Gubad

GUMBAD
BUSINESS
REVIEW
VoI. VI, No.1 JuIy 2010- December 2010
(An International Research Journal
on Business & Management)
DEPARTMENT OF BUSINESS MANAGEMENT
H.N.B. Garhwal University
(ACentral University)
Srinagar (Garhwal), Uttarakhand, India
ISSN: 0973-6158
S.S. Khanka
Family Business in India (Survival Ior Three
Generations or Beyond)

C.S. Batra, Monika Kansal
Between Philanthropy and Business case
ReIlections on CSR practices oI BT sustainable
Index companies
Isita Lahiri, Cairik Das
AComparative review oI the Development oI the
Indian Retail Panorama with special emphasis to
organized Apparel Retailing
Akhilesh Chandra Pandey
EIIectiveness oI Marketing Practices adopted by
Rural Intervention Organization in Uttarakhand: A
Comparative Study oI HARC & ATI
Ashok Kumar Sinha, Aisha Singh
Analysis oI Consumer Behavior towards branded
Laptops in India
Bimal 1aiswal, Aamita Aigam
PerIormance evaluation oI mutual Iunds in India
in a post liberalization era: An empirical analysis
1aishikha Aautiyal
Old-school Ior the NewYouth
R. Datta, R.R. Aautiyal
Human Resource EIIiciency Indiacators oI Public
Sector Banks- Acase study oI SBI in Uttarakhand
Ashutosh Priya, K.M. 1oshi & A. Kumar
University- Industry Linkage: In Search oI
Pragmatic Approach Ior Indian Higher Education

J.C. Sharma, Satyendra Kumar, S.K. Srivastava
Customer's Attitude Towards E- Banking AStudy
oI Garhwal Region
Priya Sharma, Saraswati Kala
Study the level oI SelI Consciousness &
Adjustment in practitioners and non- Practitioners
oI Japa & Dhyana
Kavita Bhatt
Tratak: The Yogic Practice Ior the Enrichment oI
HRD Managerial Skills
Garhwal University MBADepartment
GUMBAD BUSINESS REVIEW

Desk Advisor
Prof. S.P. Kala
Editor
Dr. Gajendra Singh
Associate Editor
Dr. A.C. Pandey

Prof. Raj Kumar
Faculty of Management Studies, BHU
Prof. K.M. Upadhyay
Ex 1amia Milia Islamia University
Prof. R.R. Nautiyal
Department of Economics, HABCU
Prof. 1.S. Bisht
Department of Secretarial Practices, H.A.B.C.U.
EDITORIAL BOARD
CONSULTING EDITORIAL BOARD
The Gumbad Business Reviewis published bi-annually by the Department oI Business Management,
HNB Garhwal University Srinagar (Garhwal) A Central University, Uttarakhand and the views
expressed in this journal are those oI the authors. All work published is blind reviewed according to
standard procedures oI reIerred journals. The purpose oI the Gumbad Business Review is to publish
manuscripts reporting original, creative research in the Iield oI management issues related to trade,
business and commerce. Theoretical and applied work including case studies oI companies or
comparative studies given equal weightage in publications consideration in this journal. The Gumbad
Business Reviewpublishes manuscripts only in the English language.
Submission oI manuscripts Ior publication review may be send by post or e-mail addressed to the
Editor, P.O. Box-89, HNBGarhwal University, Srinagar Garhwal (Uttarakhand), Pin-246174.
Contact Phone cum Fax No.-01370-267653
E-mail- acpmanagement70gmail.com
1uly 2010 - December 2010
S.S. Khanka 1-16
G.S. Batra
Monika Kansal 17-24
Isita Lahiri
Gairik Das 25-39
Akhilesh C. Pandey
Mukesh Singh Rawat 40-53
Ashok K. Sinha
Nisha Singh 54-61
Bimal 1aiswal
Namita Nigam 62-73
1aishikha Nautiyal 74-82
R. Datta
R.R. Nautiyal` 83-90
Ashutosh Priya
K.M. 1oshi
A. Kumar 91-97
V.C. Sharma
Satyendra Kumar
S.K. Srivastava 98-102
Priya Sharma
Saraswati Kala 103-105
Kavita Bhatt 106-110
GUMBAD BUSINESS REVIEW
Family Business in India
(Survival forThree Generations orBeyond)
Between Philanthropy and Business case
Reflections on CSRpractices of BTsustainable
Index companies
A Comparative review of the Development of
the Indian Retail Panorama with special
emphasis to organized Apparel Retailing
Effectiveness of Marketing Practices adopted
by Rural Intervention Organizations in
Uttarakhand: Acomparative study of HARC&
ATI
Analysis of Consumer Behavior Towards
branded laptops In India
Performance evaluation of mutual funds in
India in a post liberalization era-an empirical
analysis
Old-School forthe NewYouth
Human Resource Efficiency Indicators of
Public Sector Banks- Acase study of State Bank
of India in Uttarakhand
University-Industry Linkage: In Search of a
Pragmatic Approach for Indian Higher
Education
Customer's Attitude Towards E-Banking A
Study of Garhwal Region
Study the Level of Self Consciousness &
Adjustment in Practitioners and Non
Practitionersof 1apa andDhyana(ShortArticle)
1ratak: The Yogic Practice for the Enrichment
of HRDManagerial Skills
ISSN: 0973-6158
Vol. VI, No. 1
ABOUT THE UNIVERSITY AND THE DEPARTMENT
THEUNIVERSITY
Hemwati Nandan Bahuguna Garhwal University, was established in December 1973 by
the then Uttar Pradesh Government with it's headquarter at Srinagar, District Garhwal,
Northern Himalayas in the then State oI Uttar Pradesh. With eIIect Irom 15th January,
2009 the University has been elevated as a Central University by an Act oI Parliament. In
its present state the University is residential and aIIiliating in nature with its Iour
Campuses located at Srinagar, Pauri, Tehri and Chauras besides with more than 170
aIIiliated colleges and Institutions spread over the Garhwal region oI Uttarakhand State
oI India. There are Fourteen Schools with one hundred one Academic Departments
providing teaching, research and extension indiIIerent areas oI learning.
The University provides the most ideal conditions Ior serious study with the surrounding
area abounding in natural grandeur with river Alaknanda Ilowing with its sylvan beauty
supported by green Iorests accompanied by snowcovered peaks oIIering clean and Iresh
air, water, thus creating a salubrious peaceIul environment, all requisites Ior learning
with excellence and tapasya.
ABOUT DEPARTMENTOF BUSINESS MANAGEMENT
The Department oI Business Management, which is nowpart oI school oI management,
has been set up by the University with the permission oI the then State Government oI
Uttar Pradesh in the year 1996 Ior running two years Iull time MBADegree course on
selI Iinance basis. The two year Iull time M.B.A. Degree course oI the Department has
also been approved by the All India Council Ior Technical Education, New Delhi Irom
time to time.The Department has established its image as a centre oI excellence in
management education. The vision oI the Department is to be and remain a centre oI
excellence in management education and the mission statement oI the Department is to
produce quality managers and good human beings. The Department also admits
Research Scholar Ior Ph.D. in Management. The Department is located at Chauras
Campus oI the University in well structured Building with in house Library, computer
lab, Seminar hall and well equipped class rooms and tutorial rooms.
Case studies, simulation exercises, classroom presentation, class lectures including
group activities like seminars, workshops, guest lectures by outside experts, brain
games, quizzes and Iield works are some oI the techniques used in the course. Besides,
exercises relating personality development, enriching communication skills, and
building team spirit are regular Ieatures. Meditation and participation in cultural and
social activities are unique Ieatures. Summer training, Iield assignment, project work
and industrial tours are essential Ieatures oI the course.
Gumbad Business Review, Vol-6, No.1 (1uly-December 2010), ISSN: 0973-6158
1
S. S. Khanka`

Family Business in India
(Survival Ior Three Generations or Beyond)
Abstract
Historically, Iamily as a social institution has
been one oI the oldest surviving business units in India,
as anywhere else, constituting above 75 in terms oI
ownership. Most oI the researches in Iamily business are
limited to western economies. However, the research
interest in Iamily business is recent and stray outputs
have started appearing in developing countries or Asia in
general. Whatsoever research has so Iar been conducted
in Iamily business in India is scattered and our
knowledge about the subject has been Iar Irom
satisIactory. No comprehensive picture is still clear on
most aspects oI Iamily business. As such, currency is
generally given to assumptions and general
predilections Iamily business in the country. One oI the
general assumptions held is the most oI the Iamily
businesses in India survive Ior three generations and
only a Iew go beyond thus, supporting the age-old
saying, 'shirt sleeve to shirt sleeve in three generations.
It is in this context that the present paper makes a modest
attempt to examine the survival issue oI Iamily business
in India. The main Ioci oI paper is to examine the reality
or myth about survival oI Iamily business in India up to
three generations or beyond. Accordingly, the paper has
been presented in two parts. Part I gives the theoretical
perspective oI Iamily business in India and part II
presents the empirical evidences based on some case
studies on Iamily business in India.
Introduction
~Govern a family business as you cook a small fish very gently.
Chinese Proverb
'The saga oI three generations oI Iamily business is in the Iirst generation the scruIIy and astute
patriarch works hard and makes money. Born into money, the second generation does not want
more money. It wants power; it goes aIter it with the single-mindedness oI a Joseph Kennedy, and
Buddenbrook's son becomes a senator. Born into money and power, what else is leIt Ior the third
generation to do but to dedicate itselI to art? So, the aesthetic but physically weak grandson plays
the violin. But the signs oI decline are visible and that this is end oI the Buddenbrook's Iamily.
-Thomas Mann: Buddenbrook (the greatest book about a family business)
Family and business have been coeval since time immemorial. While Iamily is one oI
the oldest surviving social system (Goode 1982), Iamily business is the oldest surviving
economic system. Business history is witness to the Iact that most countries have Iamily
businesses playing signiIicant roles in their economies. Family businesses constitute the largest
size in terms oI ownership; contribute signiIicantly to the gross national production (GNP), total
industrial employment, and total exports oI the country. Though estimates do vary Irom country
`Professor (HRM) and Coordinator National Institute oI Financial Management (Ministry oI Finance, Government
oI India) FARIDABAD 121 001 (Haryana) Email: khankaniIm.ac.in, sskhanka05rediIImail.com
to country, these are above 60 per cent in the majority oI the cases. About a third oI the companies
listed in Fortune 500 are Iamily businesses (Lee 2004: 46-53). For example, even in the US, the
most proIessionalized business nation, more than 80 per cent oI all enterprises are Iamily-owned
businesses which create its 40 per cent oI GDP. Coming to the Indian case, according to the
'Report oI the Monopolies Enquiry Commission, Government oI India (1965), 75 largest
business houses in India controlled 1536 companies accounting Ior 47 per cent oI assets and 44
per cent oI paid up capital oI all non-governmental and non-banking companies. According to
Dutta (1997), more than 70 per cent oI the hundred largest corporations and 99.9 per cent oI all
enterprises in India are either Iamily-owned or controlled. Not surprisingly, this has had a
signiIicant impact on the conduct and development oI business in the country. This clearly
indicates that Iamily business has come to occupy a signiIicant place in Indian industry. In most
oI the countries, much oI retail trade, small industry, and all type oI services are in the hands oI the
Iamily, Irom the corner store to the most high-tech manuIacturing items (Anonymous 1996).
Family businesses exist all over the world Ior centuries Irom shoemakers to
conIectioners to Iarmers. Over 80 per cent oI world business is controlled by Iamilies. They
employ around 50 per cent oI world work Iorce and contribute around 40 to 50 per cent in the
world GDP. The world's oldest documented Iamily business is a construction company, named;
th
'Kongo Gumi' oI Japan Iounded in 578 ADand is currently managed by the 40 generation. Prince
Shotoku brought the Kongo Iamily members to Japan Irom Korea more than 1400 years ago to
build the Buddhist Shitennoji Temple, which still stands in Japan. Over the centuries, Kongo
Gumi participated in the construction oI many Iamous buildings, including the sixteenth-century
Osaka castle. The Kongo Iamily still continues to build and repair religious temples. Presently,
Toshitaka is its president and his son Masakazu Kongo who is 51-year old, is waiting in the wings
to succeed Toshitaka.
Some oI the largest Iamily business Iirms worldwide are:
Wal-Mart (USA): Revenues $245 billion, SamWalton Family
Samsung Group (South Korea): Revenues $98.7 billion, Lee Family
Flat Group (Italy): Revenues $54.7 billion, Agnell Family
McCain Foods (Canada): Revenues $ 3.5 billion, McCainFfamily
Tata Group (India): Revenues $7.9 billion, Tata Family
Following is an overviewoI signiIicant place assumed by Iamily business by nowworldwide:
Over 75 per cent oI all registered companies in the industrialized world
are Iamily businesses (OECD).
One-third oI Iortune 500 has Iamilies at their helm.
70 per cent Iirms in the United Kingdom are Iamily owned.
OI Italy's 100 topcountries, 43 are Iamily owned.
Family owned Iirms employ about 50-60 per cent oI the work
Iorce in the industrialized world.
In India too, 95per cent oI the registered Iirms are Iamily owned.
Companies with Iounding Iamily participation perIormed
better than non-Iamily businesses (Study of Standard and Poors 500).
In India too, the highest creator oI wealth are Iamily-owned businesses. FiIteen out oI the twenty
largest industrial houses in 1997 derived Irom the Vaishya or Bania trading castes. Eight oI them
were Marwaris (Anonymous 1997: 218). But, the sad picture is that only 15 to 20 per cent oI
Iamily businesses survive till the third generation and around 5 per cent go to the Iourth
generation (Sue 1986: 36). Researchers report that Iamily businesses are Iound to split up like
amoeba as they grow, and vary IewoI them, around 5 per cent survive beyond three generations.
Thus, they support the age-old saying, 'shirt sleeve to shirt sleeve in the three generations
Family Business in India (Survival for three Generations or beyond)
Gumbad Business Review, Vol-6, No.1 (1uly-December 2010), ISSN: 0973-6158 2
(Carlock andWard 2001, McCulloch 2004: 20-22). ProIessor Pulin Garg at the Indian Institute oI
Management, Ahmedabad (IIMA), used to tell his students, 'Haveli ki umar saath saal` (The liIe
oI a Iamily is sixty years) (http.//gurucharandas.org). Most discussions in this area oI survival oI
Iamily business are based on research on advanced countries like US. However, in most
developing countries including India, this area still remains a black box. The reason being the
academics and industry observers were puzzled to witness the recent amoebic type break up in the
second generation oI the Ambani Iamily, the largest private sector group worth over US $ 20
billion. Even the anecdotal evidence is highly limited to a Iew biographical sketches only
(Tripathy 2004, Piramal 1998) and consultant impressions (Dutta 1997, Sampath 2001).
Indian industry is largely dominated by Iamily businesses. Family businesses have
always been a matter oI great curiosity as they are distinctively diIIerent Irom other Iorms oI
businesses such as public enterprises, joint sector enterprises, and cooperatives in more than one
term such as their entrepreneurial, managerial and organizational behaviours and styles. This is
because oI the Iact that their behaviours and styles are inIluenced by the emotions oI Iamily
members, inter-personal pressures oI relatives and owners, and most importantly, the conIlicting
interest oI Iamily and business. Then, such uniqueness on these aspects leads the Iamily business
to exhibit distinct operational characteristics and also unique set oI problems and challenges. It is
against this backdrop, the present paper makes a modest attempt to discuss the nature oI Iamily
business in India and also unIold the unique challenges and problem oI management succession
considered important in Iamily owned businesses. Also given are suggestions towards the end oI
the paper to make Iamilybusiness more eIIective in India.
Family Business Defined
Family business has been as common in the Indian economy like elsewhere in the world,
it is perceived in a common sense. Various terms like 'Iamily-owned,' Iamily controlled,' 'Iamily
managed,' 'business houses,' and 'industrial houses' are used to reIer to Iamily business. Thus, the
term Iamily business conjures up diIIerent meanings to diIIerent people. While some view it as
traditional business, others consider it as community business, and still others mean it as home-
based business. As such, there are various deIinitions oI Iamily business given looking at the
diIIerent aspects oI Iamily business. For the convenience oI understanding, all deIinitions have
been broadly classiIied into two types based on the structure and process involved in Iamily
business.
Structured Definitions: These deIinitions are given based on ownership and/ or management oI
Iamily business. AIewsuch deIinitions are:
'Ownership control bythe members oI a single Iamily. - Barry
'Majority ownership by a single Iamily and direct involvement by at least two members in
its operation. - Rosenblatt, de Mik, Anderson, and Johnson
'Single Iamily eIIectively controls Iirm through the ownership oI greater than 50 per cent
oI the voting shares; a signiIicant portion oI the Iirm's senior management is drawn Irom
the same Iamily. - Leach et al.
Process Definitions: These deIinitions are based on how the Iamily is involved in the business.
Following are some oI such important deIinitions oI Iamily business:
'Family business is a Iirm which has been closely identiIied with at least two generations oI a
Iamily and when this link has had a mutual inIluence on company policy and on the interests and
objectives oI the Iamily. - R. G. Donneley (1964: 93-105)
'Family businesses are those where policy and decision are subject to signiIicant
inIluence by one or more Iamily units. This inIluence is exercised through ownership and
sometime through the participation oI Iamily members in management. It is the interaction
between two sets oI organizations, Iamily and business, that establishes the basic character oI the
Iamily business and deIines its uniqueness. - P. Davis
Some researchers argue that a broad deIinition oI a Iamily business should incorporate
3
some degree oI control over strategic decisions by the Iamily and the intention to leave the
business in the Iamily. Shanker and Astrachan (1996) note that the criteria used to deIine a Iamily
business can include: Percentage oI ownership; Voting control; Power over strategic
decisions; Involvement oI multiple generations; and Active management oI Iamily members.
In an eIIort to resolve the deIinitional ambiguity surrounding Iamily business research, Litz
(1995: 71-81) suggests that a business can be deIined as a Iamily business when its ownership and
management are concentrated within a Iamily unit. Furthermore, he argues that to be considered a
Iamily business; the business' members must strive to achieve, maintain, and/or increase intra-
organizational Iamily-based relatedness.
In sum and substance, a Iamily business can simply be deIined as a business one that includes two
or more members oI a Iamily with Iinancial control oI the company. In other words, a Iamily
business is one actively owned and/or managed by more than one member oI the same Iamily
Characteristics
The deIinitions oI Iamily business given above indicate the Iollowing characteristics oI Iamily
business:
Agroup oI people belonging to one or more Iamilies run one business enterprise.
Position in Iamily business is inIluenced by the relationship the Iamily members enjoy
amongthemselves.
Family exercises control over business in the Iorm oI ownership or in the Iorm oI
management oI the Iirm where Iamily members are employed on key positions.
Family exercises the inIluence on the Iirm's policy direction in the mutual interest oI
Iamily andbusiness.
The succession oI Iamily business goes to the next generation.
Family business in India is largely caste-related.
Every caste enjoys a dominant culture which gets duly reIlected in their Iamily
businesses also.
Types of Family Businesses
Having deIined and outlined the salient characteristics oI Iamily business, we can nowproIitably
classiIy Iamily businesses into various types as Iollows:
Family-Owned Business: This is a Iamily business in which a controlling size oI ownership
either in the Iorm oI shareholding or any other is owned either by the Iamily or a member oI the
Iamily member. Most oI the Iamily businesses especially when these are small in size Iall this
type oI Iamilybusinesses.
Family-Owned and Managed Business: In this type oI Iamily business, a controlling size oI
ownership, be in the Iorm oI shares or other Iorm oI ownership, rests with the members oI a single
extended Iamily or with a single member oI the Iamily but greatly inIluenced by other members
oI the Iamily. Such a controlling ownership conIers the Iamily permission to devise and decide
the objectives, methods Ior achieving them, and policies Ior implementing the methods. One or
more Iamily members exercise the ultimate control over the management oI the Iamily business.
Family-Owned and Led Business: This type oI Iamily business is, to a great extent, similar to
that oI above i. e. 'Family-owned and managed' business. Nonetheless, it is diIIerent Irom above
one in the sense that at least one member oI the Iamily is a member oI the board oI directors oI the
company / business. This enables him / her to exert inIluence over the business's direction,
culture, and strategies.
Family Business in India: AHistorical Perspective
Family business in India had been in practice since long, oI course, with its changing
nature and structure over the period. India enjoys a rich and glorious history oI Iamily-owned
business. The origin oI Iamily business in India is traced back to the ba:aar system in the ancient
times. Initially, Iamily business in India started in the Iorm oI trading and money lending
involving the hustle and bustle oI the ba:aar. It was also conIined to certain communities, notably
the Jains and Marwaris especially in the northern India. Its industry Iorm is relatively oI recent
origin, going back largely to the British rule and the First World War. Here is one such instance to
it. Cawasji Davar set up the Iirst cotton mill, or say, the Iirst manuIacturing enterprise in Bombay
(nowMumbai) in 1854. Consequent upon this, some trading communities started textile mills in
th
Mumbai and Ahmedabad during the last halI oI the 19 Century. The trading communities
emerged as Aggarwals and Guptas in the North, the Chettiars in the South, the Parsees, Gujarati
Jains and Banias, Muslim Khojas and Memons in the West, and Marwaris all over India.
Nowadays Aggarwals are mostly reIerred to as Marwaris. Here is an interesting legend oI how
Aggarwal Iamilies emergedas most dominatingandsuccessIul inbusiness inIndia(Roy2008: 84).
The Agrawals
TheAgrawals claim descent Irom the legendary king Agrasena oI Agroha. According to
the legend, Agroha was a prosperous city and hundred thousand traders lived in the city
during its heydays. An insolvent community person as well as an immigrant wishing to
settle in the city would be given a rupee and a brick by each inhabitant oI the city. Thus,
the person would have hundred thousands bricks to build a house and hundred thousand
rupees to start a newbusiness. Gradually, the city oI Agroha declined and Iinally gutted
in a huge Iire. The residents oI Agroha, i.e. the Agrawals, moved out oI Agroha and
spread to other parts oI India. In his book, 'Agarwalon ki utpatti, Bhartendu
Harishchandra categorized Agrawals into Iour branches: Marwaris, Deswal, Purabiya,
and Pachihiye. Nowadays, Agrawal Iamilies are mostly reIerred to as 'Marwaris.'
Jamshedji Tata started his various business enterprises like cotton mill in Nagpur, the Taj Hotel in
Mumbai, his Iamous steel plant in Jamshedpur, and several real-state developments. These
enterprises, in turn, prompted other people to join the business Ioray. Anumber oI Iamilies, such
as Birlas, Bangurs, Khaitans and Goenkas started their business in Kolkata and developed the city
as a centre Ior commerce.
Initially Iamily businessmen were engaged in small-size businesses requiring small investments
managed by themselves only. But, once they entered into manuIacturing sector, they Ielt the need
Ior more and heavy investments not manageable by themselves. At the same time, they also knew
that once they allowsomeone to join business, their control over management oI the business will
weaken which they, however, did not want. In such a case, Iamily businesses inducted their
Iamily members or relatives or Iriends in the business by allotting them blocks oI shares while
making sure that the majority control and, in turn, the management oI the business remained with
the promoting Iamily itselI. This is how corporate management was born embedded by a
combination oI joint stock principle and Iamily control over business. Because stock markets
were yet to gain suIIicient momentum, on the one hand, and the joint Iamily system was also
intact, on the other, business Iamilies were holding control over their business empires built up
through the ingenious device, popularly known as the 'managing agency system.' The managing
agency system continued till 1970 as an instrument oI maintaining Iamily control over business
enterprise. As such, all critical decisions about the business were taken by the promoting Iamilies,
euphemistically termed managing agents. This system oI corporate management got so rooted in
due course oI time that hardly any industrial Iirm remained out oI its orbit. In other words, this
indicates that all businesses were controlled and managed by a IewIamilies in the country. R. K.
Hazari, a well-known industrial economist, had concluded aIter an exclusive analysis that most
oI the prominent industrial Iirms on the contours oI Indian business during the 1950s, were in the
hands oI just 18 Indian Iamilies and two British houses. However, the period oI 1950s
5
experienced certain changes with some developments shaking and disturbing the business
environment, in general, and Iamily business, in particular. The consequence was the earlier
tranquil situation that the Iamily business was enjoying in the country got greatly disturbed
especially by Iour major developments as mentioned below:
1. With a resolution to accelerate the pace oI economic development during the post-
Independence period to solve the problem oI unemployment and poverty stalking the land,
the Government invited private sector to partake oI new opportunities available Ior
business and industrial development, oI course, amidst a myriad oI restrictions imposed
on the Ireedom oI enterprise.
2. The Governments, both at Central and State levels, set up various Iinancial institutions to
provide Iinance to private sector enterprises in the country.
3. The joint Iamily system, once the bedrock oI the Indian social structure in India, started
experiencing severe strains and threats and, in turn, increasingly loosing its place in the
social structure. For such a sorry state oI situation, thanks to inter alia growing
urbanization and ever increasing westernization in the country.
4. The right oI possession oI private property and its inheritance has been one oI the major
Iactors inencouraging Iamilybusiness in India.
In lump sum, these changes, in turn, caused changes in Iamily business in the country. With
increase in the magnanimous size oI inIrastructural projects in the country, business Iamilies
were no longer capable enough to mobilize the required resources including Iinance Irom their
own resources. As a result, Iinancial control oI business started gradually shiIting Irom
promoting Iamilies to Iinancial institutions. Also the business Iamilies started splitting and
cracking. To quote, the Dalmias were the Iirst prominent business house in the country to break up
aIter Ireedom. The pace oI splitting Iamily businesses started accelerating in the country
beginning with 1970 and since then, it has been increasingly growing. Business history is replete
with increasing number oI Iamilies splitting in the country over the period. Birlas, Modis,
Sarabhais, Bangurs, Singhanias, MaIatlals, Shrirams, Thapars, Walchands, Goenkas and the
most recently, the Ambanis are the illustrious Iamily businesses in our country who have
experienced split in their businesses. Nonetheless, it is worth mentioning that inspite oI various
changes like loosing Iinancial control over business and growing splits in businesses, the Iamily
control over management oI business still remains impaired in the hands oI promoting Iamilies.
This is indicated by the Iact that the management oI as many as 461 out oI 500 most valuable
companies is still under Iamily control in our country. One oI the signiIicant changes in Iamily
business in India is induction oI proIessionals to manage the aIIairs oI business. Tatas, Birlas,
Reliance, Wipro, and Murugappa Group are some oI the illustrative Iamily businesses employing
proIessional managers to look aIter the management issues oI their businesses. With increase in
size oI business has also led to increase in split in Iamily businesses in the country over the period.
Goenka Iamily and Ambani Iamily are such examples oI split in Iamily business in our times. The
changing environment oI Iamily business in India can be summed up as Iollows:
Earlier Presently
Business as Iamily Family as business
Family wealth and prosperity Shareholder' value and prosperity
Growth strategies Economic value added (EVA)
Expansionand diversiIication Core and competitive competencies
Familysuccession planningIor next Planning Ior attraction and retention
generation oI proIessionals
Why Family Business?
'When it works right, nothing succeeds like a Iamily Iirm. The roots run deep, embedded in
Iamily values. The Ilash oI the Iast buck is replaced with long-term plans. Tradition
counts (Facts and Figures: Family Business in the US, Family Business Maga:ine).` A
Iamily business provides a range oI advantages which other enterprises (non-Iamily
businesses) do not. These include but not conIined to the Iollowing only:
Common Values: Entrepreneur and his / her Iamily are likely to share the same ethos
and belieIs on howthings should be done. This will give entrepreneur an extra sense oI
purpose andpride - anda competitive edge Ior his / her business.
Strong Commitment: Building a lasting Iamily enterprise means entrepreneur is more
likely to put in the extra hours and eIIort needed to make the business a success. At the
same time, his / her Iamily is more likely to understand that he / she needs to take a more
Ilexible approachto his / her working hours.
Loyalty: Strong personal bonds, called loyalty, means entrepreneur and Iamily
members are likely to stick together in hard times and show the determination needed
Ior business success. Loyalty leads to commitment which gets translated into hard work
and perseverance which are the prerequisites oI success in any endeavour including
business.
Stability: Purpose provides stamina and stability in eIIorts. Knowing one is building Ior
Iuture generations encourages and strengthens his / her eIIorts in terms oI long-term
thinking and tenacious eIIorts needed Ior growth and success oI his / her business. Yes,
at times it can also produce counterproductive eIIects in terms oI entrepreneur's
inabilityto respond to requirement.
Decreased Costs: Unlike non-Iamily businesses, members oI Iamily business may be
more willing to make Iinancial sacriIices Ior the sake oI the business. For example,
accepting lower pay than they would get elsewhere to help the business in the longer
term, or deIerring wages during a cash Ilow crisis. The Iamily business can also hold
down the costs oI governance, in terms oI special accounting systems, security systems,
policy manuals, legal documents and other mechanisms to reduce theIt and monitor
employees' work habits. This is possible because employees and managers oI business
are well relatedand have trust and conIidence on each other.
Following is an example oI Bajaj Iamily business conIirming how Iamily business proves cost-
eIIective:
We may run businesses oI diIIerent sizes but we have the same standard oI living,'
says Neeraj Bajaj. 'Rahul runs the Rs 2500 crore Bajaj Auto and Shekhar runs the Rs
200 crore Bajaj Electricals, but they get equal salaries and equal pocket money. Splits
take place when there is visible inequality. We take pains to observe absolute equality,
and our 15 rules keep us honest. We travel in the same types oI cars; we are allowed
the same class oI air travel; we usually vacation together; thus, we minimise
diIIerences andcomparisons.
'Every year at Diwali the Iamily members get together and we reviewthe 15 rules by
which we run our joint Iamily. These rules relate to what each Iamily member gets as
pocket money, vacation allowance, what women spend on jewellery, and so on. Each
year the Iamily members update their allowances under the leadership oI Rahul, who
is presently the head oI the household aIter my Iather Ramakrishna's death. And we
meticulously stick to our pocket money. No exceptions! And I should knowbecause I
am currently the treasurer oI the Iamily, responsible Ior managing the Iamily wealth,
disbursing Iunds, Iiling tax returns and looking aIter the Iamily aIIairs (Das 1996).
7
Family Business Suffers from Disadvantages too
All is not well with Iamily business. It also suIIers Irom certain disadvantages as
mentioned below:
Risk oI Ownership: Family members hold the impression that the Iamily business will
continue to earn proIit and, thus, ensure receipt oI cash and other beneIits on a recurring
basis. However, when business either earns less income or incurs loss, receiving cash
and other beneIits becomes uncertain especially Ior non-active members. Then they start
challenging and questioning the ownership oI business to ensure their share in the
business cake. This produces various implications Ior the business like weakens Iamily
unity and commitment, conIlict surIaces between active and non-active Iamily members
and relatives, and businesses' market share starts dwindling and ultimately the business
dies out.
Controlling Ambiguity: Every entrepreneur wants the control oI his/ her business should
rest with the closest and trustworthy one. In practice, business control generally rests
with the siblings, the minority shareholders have only a minimal control over the
business. Minority shareholders normally are given protection oI their ownership by
having a say in: sale or merger oI the company, the issuance oI stock to others, borrowing
moneyinexcess oI a set amount, a major capital expenditure.
The Subtle Messages oI a Buy/Sell Agreement. We encourage Iamilies to put an
agreement in place that will make it relatively easy Ior a shareholder to exit ownership oI
the business. However, some Iamilies believe multiple shareholders will be in place
Iorever. In general experience, this is not the case in 99 per cent oI Iamily businesses.
Buy/sell agreements protect the company and it's stock, Ior example, against a
shareholder getting divorced and giving an ex-spouse an ownership stake, where the
stock must go in case oI death, what must happen to the stock in the event oI a
shareholder declaring personal bankruptcy, and iI the stock can be pledged as security
Ior other business investments. Sometimes, a shareholder just wishes to have control oI
his or her own investments and opts out oI the Iamily business. This raises questions like:
Are they disappointing their deceased parents?Are the active siblings sending a message
to the non-active that they do not trust them or their intentions?
Inability Ior Shareholders to Cash Out oI the Family Business: Mostly Iamily businesses
lack the Iinancial ability to Iund the redemption oI stock Irom one major shareholder.
Funds are typically not available, and most owners will reIuse to go to the bank Ior a loan
as it might put the company in a poor Iinancial position. Thus, the minority shareholder
wanting to cash out either cannot do it or must Iollow certain company policy, which
normally discusses the conditions and timing oI a stock redemption.
Major Challenges Faced by Family Business in India
Although Iamily business has been an integral part oI industrial economy oI India, it
also Iaces some major challenges but not conIined to the Iollowing only:
Challenge of Inter-relationships
One oI the peculiarities oI Iamily business is that the boundaries between work and
Iamily are quite intermingled, complex and also multiIaceted. Such an inter-related context at
times creates three overlapping perspectives that inIluence the actions and decisions oI Iamily
business owners (Hoy and Verser 1994: 9-23). These are: (i) The Iamily wants to take care oI
Iamily members. (ii) The concern Ior ownership by doing what is in the best interests oI Iamily
business. (iii) The concern Ior management by doing what is the best interests oI other
organizational employees, i.e. non-Iamily employees. Howthese three overlapping perspectives
create challenges Ior Iamily business can be exempliIied with an imaginary example:
Let us consider a Iairly common Iamily business situation in which a Iamily member
needs a job. From the Iamily perspective, one probably would see this as a chance to help out
someone in need oI job in the Iamily. From the ownership perspective, one might have concern
about the impact oI an additional employee on organizational expenses and, in turn, proIits. From
the management perspective, one might be concerned about the eIIect oI hiring an employee Irom
Iamily on other non-Iamily employees. We Iind each oI these perspectives is valid and justiIiable.
But the issue is which oI the perspectives takes precedence. Remember, these perspectives might
not be mutually exclusive all the times, but might be overlapping each other. Nonetheless, there
might be situation in which business action or decision is going to be inIluenced more strongly by
one oI the perspectives. Here needs the entrepreneurial ability oI the Iamily business to properly
balance all three perspectives simultaneously in managing the complex and overlapping
relationships in running the Iamilybusiness in an eIIective manner.
Challenge of Management Succession
Management succession has been Iound the second major challenge Iacing the Iamily
businesses everywhere in the world including India. Research studies on Iamily business have
reported that, on average, only 30 percent oI Iamily businesses survive to the second generation,
and only 10 percent make it to the third generation (Zimmerer and Scarborough 1998: 17). The
statistics is pretty alarming. Then what is the reason Ior such a sorry and alarming situation? The
reason is not diIIicult to seek. Many entrepreneurs Ior their own reasons dream oI passing on the
Iamily business to their children or kins and kiths. But, the human traits such as lack oI interest or
competence or jealousy usually get into business with their evil eIIects on business. The
consequence is Iailure oI business.
Here the Iollowing two excerpts relating to succession in Iamily business seem worth
citing:
Pulin Garg, the thoughtIul ProIessor at the Indian Institute oI Management,
Ahmedabad, used to tell his students, 'Haveli ki umar saath saal' (The liIe oI a Iamily
business is sixty years).
Thomas Mann, the Nobel Prize winning German writer, expressed the same thought in
his great novel Buddenbrooks, which is arguably the greatest book about a business
Iamily. It describes the saga oI three generations oI Iamily business: in the Iirst
generation the scruIIy and astute patriarch works hard and makes money. Born into
money, the second generation does not want more money. It wants power; it goes aIter it
with the single-mindedness oI a Joseph Kennedy, and Buddenbrook's son becomes a
senator. Born into money and power, what else is leIt Ior the third generation to do but to
dedicate itselI to art? So, the aesthetic but physically weak grandson plays the violin.
But the signs oI decline are visible and that this is end oI the Buddenbrooks Iamily.
That madness, i.e. intoxication oI power causes damages is very beautiIully illustrated in the
Iollowing Urdu couplet:
'Intoxication oI liquor leaves you, but intoxication oI power continues to grow, takes hold oI you,
and Iinally drowns you.
Sibling Rivalry
One oI the challenges Iamily businesses Iace is sibling rivalry. Why does sibling rivalry
surIaces? The main reason Ior this is the share in Iamily business cake the members get. This
happens particularly when business starts Ilourishing and expanding over the period. The sibling
rivalry ultimately culminates to split in Iamily business. As Ramachandran (2009) puts, Iamily
businesses are Iound to split up like amoeba as they grow, and very Iew oI them survive beyond
three generations. The reason is sibling rivalry surIaces mainly due to siblings' anxiety to prove
their mantle better than the others. Rivalry with each other oIten amounts to pull each other down
at the cost oI the organizational resources. The rivalry Iurther gets Iuelled and even complicated
when some members oI the Iamily in one way or other Iavour one oI the siblings. This Iurther
leads to the complication as one oI them Ieels oI unjust and undue Iavouritism. II rivalry is not
9
resolved well in time, it may lead to split in the Iamily business and, thus, may damage the age-old
Iamily business. That sibling rivalry destroys Iamily business is very well conIirmed by rivalry
between Ambani brothers. Here is the story:
The great visionary and astute entrepreneur, Dhirubhai Ambani, who loved to dream big
and to attain them, lacked the vision to carve a succession plan Ior such a giant corporation. He
passed in 2002 without providing the company with clear cut succession route. May be that he
never thought that even such huge empire will Iail short oI the aspirations oI his two young
Ambanis. He Iailed to understand the strategic importance oI planning the succession in advance
and in the year 2004; the sibling rivalry in reliance became the most talked story in the business
world. Sharp diIIerences between the two brothers started cropping up leading to a nasty seven-
month-long ownership row. On the height oI rivalry between the brother, on June 18, 2005, aIter
much public dilemmas, Prime Minister and Finance Minister has tried to mediate between two
Iighting brothers. Mukesh and Anil Iinally reached an agreement to divide assets aIter a long
drawn battle, split the Reliance Empire to steer ahead their own interests.
Followingwere the split consequences:
Step 1:
Split the Ambani Iamily stake in RIL in the 30 : 30 : 40 ratio among the
two brothers and Kokilaben. Anil Ambani to relinquish control to
Mukesh, who gets Iull control oI Reliance Industries' core oil and gas
business.
Step 2:
Create a special purpose vehicle to house RIL's stake in Reliance Energy
andreliance Capital. Anil Ambani to continue heading the two Iirms.
Step 3:
In lieu oI Anil giving up control in RIL, Mukesh Ambani transIers part oI
his 45 stake in InIocomm to anil, who nowgets to run the venture
Reliance split is a burning case to conIirm that Iamily business gets split over ego clashes. Hence
presents the biggest challenge Ior any Iamily indulged in business. Just aIter the split the
company slipped in Forbes list. Even iI the Reliance does not suIIer severely, it certainly devalues
status oI the Iamily in the society and the trust oI the customers and shareholders. II Mr. Dhirubhai
Ambani had planned a business envisioning the inherent conIlict it could have been another story
altogether where both the siblings would have complemented each other with their unique skills
and have consolidated the empire created by their Iather into a well established and cared Iamily
business not just another business.
We have seen split in Iamily business due to diIIerences and ego clashes among Iamily
members during the past ten years among the Modis, the Walchands, the Raunaq Singhs, the Bhai
Mohan Singhs and a dozen other joint Iamily Iirms who have separated (Das 2010). Family
business split generally happens with increase in the size oI Iamily, or say, joint Iamily. In a way,
living in joint Iamilies is a bit like liIe under socialism. Joint Iamily does not work in the long run
in the same way that socialism does not work. Joint Iamilies require strict equality to succeed.
But, because human beings are by nature unequal and they need material incentives to perIorm, a
joint Iamilies break up in the end. In such situation, a strong and Iair leader can help Iamily
business to prolong like Rahul Bajaj in case oI Bajaj's mentioned earlier. Bajaj's experience
shows that having a Iamily constitution or Iamily rules help to prolong the liIe oI Iamily business
on perpetual basis.
There are yet more reasons that make Iamily business ineIIective and, in turn, unsuccessIul.
Flaming (2000) terms these reasons as seven deadly sins that can run Iamily businesses into the
ground or make them less valuable in the market place. These are given in the Iollowing :
Table 1: Seven Deadly Sins of Family Business
Sins Consequences
1. It's the same oldsong. Family members' childhood behaviour and
belieIs Iollowthem into the business
2. We're one big, happyIamily. The Iailure to recognize that running a business
requires diIIerent practices than running a
Iamily.
3. They mayhave become adults, The parents are unable to accept and treat
but they'll always be mychildren. their grown children as adults.
4. You're not loyal tothis Iamily iI The Iailure is to acknowledge and treat Iamily
you insist onbeingselIish. members as individuals.
5. Father knows best. Founders usually possess dominating
personalities and may be totally consumed
by the business.
6. May be it will go away iI we Ignoring problems only adds to their
ignore it. destructive potential.
7. Tell me about your childhood. Children oIten enter the business beIore
resolving childhood issues, which can aIIect
the way that may work.
Besides, Indian Iamily businesses also have some weaknesses that make them ineIIective.
Following are the Iour most important ones as reported by Das (1999):
1. An inability to separate the Iamily's interest Irom the interest oI the
business.
2. Lack oI Iocus and business strategy.
3. Short-term approach to business, leading to an absence oI investment in
employees and in product development.
4. Insensitivity to the customer, largely because oI uncompetitive markets,
but resultinginweak marketing skills.
No doubt, there are challenges and pitIalls that make Iamily business suIIer. But it doesn't mean
that Iamily business can not run eIIectively. There are ways that Iamily businesses can do to be
eIIective and successIul. We are goingto look at this important topic next.
Business Succession Planning
We all know that sooner or later, every one retires Irom service, business or even Irom
liIe. But retirement Irom business is not just a matter oI deciding not to go to oIIice anymore. It is,
in Iact, much more than that. The paramount question that arises on retirement Irom business is
what happens to the business aIter one retires Irom the business. Who is going to manage the
business when one no longer works in the business? Howwill ownership be transIerred? Will one
business carry on or will sell it? Business succession planning seeks to address and manage these
vital issues involved in Iamily business by setting up a smooth transition between ther owner-
leader and the Iuture one oI the Iamilybusiness.
Let us begin with deIining the term 'succession planning.' Some people term 'succession
planning' as 'multi-generational planning' or 'replacement planning.' Be it called by any names,
succession planning means planning Ior succession or making preparations on who will succeed
the owner-leader oI the business. Succession planning is a process Ior identiIying and
developing Iamily members with the potential to succeed the key role oI owner-leader in the
business. According to Charan, Drotter and Noel 92001), succession planning is concerned with
developingthe second order owner-leader to run the Iamily business.
11
Research studies report that only about 30 per cent oI Iamily businesses survive into the
second generation, 12 per cent are still viable into the third generation, and only about 3 per cent
oI all Iamily businesses operate into the Iourth generation or beyond. Such trend supports the age-
old saying, 'shirt sleeve to shirt sleeve in three generations (Carlock and Ward 2001). The
obvious question is why does this happen? More oIten than not, the lack or Iailure oI a solid
business succession planning is to blame to this sorry situation. Since evidences indicate that
good succession planning makes the Iamily business survive and thrive generation aIter
generation and absence oI it derails the business down and die out. Hence, there is a need Ior solid
succession planning in Iamily business to make the business perpetuate through generations.
However, as much succession planning is signiIicant Ior Iamily business is not so simple. It
requires thoroughthinkingand solid preparations to which we turn our attention subsequently.
There is substantial body oI literature on the subject oI succession planning. However,
the Iirst work on this topic was done by Walter Mahler (1973) in his book entitled 'Executive
Continuity.' In Iact, Mehler who was highly inIluenced by peter Drucker was responsible in the
1970s Ior helping to shape the General Electric succession process which became the gold
standard oI corporate practice. Later, other researchers (Kesler 2002: 32-44, Goldsmith and
Carter 2010) expanded the succession strategies developed by Mehler and recommended Ior a
process owner Ior talent andsuccession management in business Iirms.
As mentioned earlier, Iamily businesses Iace unique situations and, in turn, challenges
that set them apart Irom the typical business. Foremost among them is maintaining a Iine balance
between business and Iamily, that is, making decisions and undertaking actions that will honour
the Iamily values as well as beneIit the business. An instance oI imbalance would be, Ior example,
iI a Iather were to pick his oldest son to take over his business, simply because he is the Iirst-born,
when the youngest son is clearly the more competent Ior the job / business. In nutshell, business
succession planning needs to be done with serious thinking. Following are some oI the important
steps involvedin making a successIul succession planning Ior a Iamily business:
1. Make a Solid Case for Succession Planning: Remember people do not resist changing, they
resist to be changed. ThereIore, iI one wants to inIluence Iamily members' opinions about
business succession, s/he wants Iirst to make a strong case Ior succession planning. Convince the
Iamily members, with real liIe examples, the need Ior and signiIicance oI having succession
planning Ior ensuring the smooth and eIIective running oI Iamily business generation aIter
generation. Give the Iamily members' Iacts and Iigures like nearly 90 per cent oI small enterprises
are Iamily-owned, but only 30 per cent oI them succeed into the second generation, while 15 per
cent make it to the third generation, and only 3 per cent reach to the Iourth generation. Thus,
convince them that the lack oI succession planning is to blame this sorry state oI Iamily business.
The Iact remains that having a solid succession plan is like having a good insurance policy Ior the
perpetual continuity oI Iamily business through generations. Educate and help Iamily members
understand the value oI putting a succession plan into place well in time. Here the views oI
Jamshed J. Irani expressed about introducing organizational change seem worth citing to
appreciate the signiIicance oI planning Ior succession well in ahead: 'Change when you are still
strong and when change appears unnecessary do not wait for the day when you have no option
but to change.`
2. Prepare an Exit Plan: ClariIy in advance under what circumstances the succession plan will
take eIIect: whether on retirement or unplanned departure or changing Iinancial situations. These
question help determine what the succession plan should detail most. Keep in mind that both
early-exit and late-exist oI the owner-leader have advantages as well as disadvantages Ior Iamily
business.
3. Identify the Successor: IdentiIying the right successor is one oI the most signiIicant steps in
succession planning. The business successor should be identiIied by competence, not by any
other considerations and compulsions. One way to do so is to Iirst identiIy the qualities or
attributes a successor must possess to succeed the business. The Iamily member who possesses
the maximum oI so identiIiedattributes should be selected Ior business succession.
4. Grooming and Developing the Successor: Once a successor is identiIied, s/he needs to be
groomed and developed to assume the headship oI the business. It can be done through various
ways like giving on-the-job training, working under mentors and advisors, and delegating some
authority to the successor much beIore the actual passing on oI the baton takes place. OI course,
grooming more than one member to become the successor oI business is not a bad idea, but at
times it may create conIusions and complexities leading to strenuous succession battles. Business
history is replete with evidences, like the recent one oI Ambani brothers, that extreme succession
battle may cause a split in the Iamily business. Yes, some may not consider the split as a bad thing
considering the Iact that the split between Ambani brothers led to a dramatic increase in the value
oI their individual holdings in the erstwhile Iamily business.
How to Make Family Business More Effective?
One way to Iind out eIIective ways to run Iamily business will be to discover the best
practices oI successIul Iamily businesses. Following are the most important ones:
Focusing on business, not Iamily needs: Although a Iamily business entrepreneur may
Ieel obligations to take care oI Iamily problems oI one type or other. S/he should not use
business as employment agency Ior Iamily members. Neither s/he should use business
Iunds Ior Iamily purposes (Anonymous 1998: ENT3). Ultimate Iocus oI running Iamily
business shouldbe Iamilyas business, not business as Iamily.
Ploughing back oI proIits in the business: ProIits earned by Iamily business should not be
used Ior meeting Iamily requirement, but should be reinvested in the business to Iurther
strengthenand sustain it inthe market place.
Using caution with Iamily: Be cautious about the implications oI hiring Iamily members in
the business to avoid likely conIlicts and conIrontations among the Iamily members.
Delegating authority or decision taking: AIamily business entrepreneur should delegate
decision taking to those who are competent and capable oI making right decisions. This
gives more time to entrepreneur to concentrate on business issues involving more serious
thinking and visioning. The Iamily entrepreneur who makes all decisions by himselI and
does not delegate to others is viewed as control Ireak. Such entrepreneur does not get
wholehearted and willing cooperation and support Irom others.
Viewing Big and Broader Picture: Family business entrepreneur should view big and
broad, that is, s/he should consider others' interests as well while running the business. In
other words, the entrepreneur while running business should strike a Iine balance among
three broad perspectives oI Iamily business: Iamily, ownership, and management, also
lumped together as the 3-Circle Model oI Iamily business.
Planning Ior Management Succession: Because Iamily business runs Ior a long period oI
time, hence there is always a need to have a good management succession plan in place to
carry on the business eIIectively. While planning Ior management succession,
entrepreneur should keep six Iactors into consideration: (i) the role oI the owner during the
transition; (ii) Iamily dynamics; (iii) income Ior Iamily members employed in the business
and shareholders; (iv) business conditions during transition; (v) treatment oI long-term
and loyal employees; and (vi) tax consequences (Brothers 1996: S11). Evidences suggest
that each oI these Iactors aIIects the choices made during the transitions and inIluence
whether the outcome is smoothing, Iunctional, and eIIective. In case no Iamily member
wishes to join the Iamily business, then the decision is to be made to transIer the Iamily
business to some non-Iamily member. In such case, the owner needs to address a key
question is ownership what type and howmuch ownership, iI any, will be retained by the
Iamily? In nutshell, the main thing in either case, i.e. transIerring the business to Iamily
member (s) or transIerring to non-Iamily member(s) is planning well in ahead. So to say,
13
the entrepreneur should not wait until something happens and then Iorced to take rush and
ill-advised actions and decisions. Here the views oI Jamshed J. Irani expressed about
introducing organizational change seem worth citing to appreciate the signiIicance oI
planning (succession) well in ahead: 'Change when you are still strong and when change
appears unnecessary do not wait for the day when you have no option but to change.`
Prepare the Family Constitution: The Iamily constitution also called 'Iamily rules,' in
simple sense, reIers to do's and don't do's in the business. It elaborates about the good
governance practices to be practiced in the Iamily business. Like corporate and political
governance, Iamily governance Iacilitates the smooth running oI Iamily business. It
maintains harmonious and cordial atmosphere in the Iamily and business. We have already
mentioned earlier how Bajaj Iamily through its IiIteen Iamily rules or call it Iamily
constitution, has been running successIully Ior generations. Similarly, austerity and the
lack oI visible symbols oI inequality, among other rules, have helped Murugappa Iamily
(one oI the Iew old Chettiar Iamilies that is still together) in running Iamily business
successIully over the generations. Here one such instance is worth citing. It is Ior austerity
and equality reasons, the young Vellayan, who runs some oI the TI companies, was reIused
an air-conditioned car some years ago. The rule or logic was iI the old patriarch, M. M.
Aunachalam, did not have an AC car, how could Vellayan? Obviously, Ior the sake oI
equality and uniIormity, Vellayan had to learn to sudue his ego to the bigger Iamily cause.
Following is an example oI 'The Family Constitution' oI a growing Iamily business in
inIrastructural Iield: G. M. Rao InIrastructure Limited (GMRIL):
The Family Constitution`
Sitting across a number oI his borrowers during his days at Vysya Bank in which he
also owned a sizeable stake that he sold to start GMR InIrastructure G. M. Rao
watched a number oI Iamily businesses Iail because oI deep divisions between
members oI Iamilies who borrowed Irom his bank. 'At that time, I decided that it
would be one oI the Iirst things I took care oI when I started GMRIL, he says. And
thus the Iamily constitution was born.
The constitution is more than just a succession plan Rao is just 60 and a decade away
Irom retirement as group Chairman it is a model oI governance
that applies to all his companies and howthey are run. It lays down a code oI behaviour
that applies to all Iamily members his two sons (Kiran Grandhi and G. B. S. Raju) run
key parts oI the group alongwithhis son-in-law(Srinivas Bommidala).
The next chairman oI the group will be selected by a three-member constitution board;
iI no decision is made, then a deadlock trustee will make the Iinal decision. The
constitution is an elaborate document it runs into over 150 pages and lays down entry
and exit procedures Ior Iamily members, and a dispute resolution mechanism, should
the need arise.
Spouses are the part oI the Iamily council too, and the members oI the Iamily go on
annual treats as part oI the constitution's requirements. In the next Iew months, says
Prasad M. Kumar, executive director oI the GMR Group he played a key role in the
initiation and draIting oI the document.- the Iamily constitution will be legal
document once all Iamily members Iinish signing it; the equivalent oI taking an oath oI
oIIice.
*Source: Business World, 21 June 2010, p. 35.
It is Iound that an entrepreneur is generally worried about ensuring that his or her business not
only survives, but also thrives to nurture the next generation. Then, question is howto ensure the
same? Some years ago, some researchers (Hunt and Handler 1999) examined the strategies
behind successIul Iamily businesses. They Iound that success is generally tied directly to how
well a Iamily business manages the Iive unique resources every Iamily business possesses
1. Human Capital: The Iirst resource is the Iamily's human capital, or "inner circle." When the
skill sets oI diIIerent Iamily members are coordinated as a complementary cache oI
knowledge, with a clear division oI labor, it produces synergy. The result is the likelihood oI
success improves signiIicantly.
Social Capital: The Iamily members bring valuable social capital to the business in the Iorm
oI networking and other external relationships that complement the insiders' skill and
knowledgesets.
3. Parent Financial Capital: The Iamily Iirm typically has parent Iinancial capital in the Iorm
oI both equity and debt Iinancing Irom Iamily members. Such a Iamily relationship
betweenthe investors andthe managers reduces the threat oI liquidation.
4. Survivability Capital: The Iamily business must also manage its survivability capital, that
is, the Iamily members' willingness to provide Iree labor or Iunds in time oI urgency so that
the venture doesn't suIIer Irom the two and, in turn, does not Iail.
5. Lower Costs oI Governance: The Iamily business must manage its ability to hold down the
costs oI governance. In non-Iamily Iirms, these include costs Ior things such as special
accounting systems, security systems, policy manuals, legal documents and other
mechanisms to reduce theIt and monitor employees' work habits. But, a Iamily business can
minimize or eliminate these costs signiIicantly because employees and managers oI
business are well related andhave trust and conIidence on each other.
II these Iamily resources are clearly delineated and judiciously leveraged into a well-coordinated
management strategy, the chances Ior success oI Iamily business greatly improve.
Ramachandran (2009) has identiIied ten dimensions oI a Iamily business which are interrelated
between succession planning and conIlict resolution and ownership structure. It is the synergy
created by the interaction and reinIorcements oI these dimensions that help Iamily businesses to
perpetuate. He terms them the Ten Commandments of Family Business.
Concluding Remarks
There is evidence to believe that like Iamily as a root-unit oI social system, Iamily
business has also been the seedbed Ior business and industrial development all over the world
including India. The greatest advantage oI Iamily business is that when it works right, nothing
succeeds like a Iamily business. It has contributed and will always contribute signiIicantly in
15
Retirement
and Estate
planning
Induction &
Grooming
Family
&
Business Ownership
structure
Preserving
Wealth ConIlict
resolution
mechanism
Figure 2: Ten Commandments oI Family Business
ProIessor K Ramachandran, ISB, Hyderabad
Compensation
& Rewards Ior
Iamily
Recruitment
and reward oI
non-Iamily
proIessionals
Business
vision,
strategy &
governance
Family vision,
strategy &
governance
Succession
Planning
terms oI production, employment, income, and exports oI the economies. However, running oI
Iamily business has not been so simple. It's successIul running is so sensitive and complex that, as
expressed in the Chinese proverb, it needs to be governed as one cooks a small Iish very gently.
Evidences are galore to reIer to conIirm that the success or Iailure oI Iamily business depends on
inter-relationships, sibling relationship (rivalry), role and place oI Iamily members, management
succession, and Iamily council /constitution. More Iavourable these key Iactors are, more are the
chances Ior the success oI Iamily business and vice versa. Thus, Iamily businesses need to
strengthen themselves inthese matters as quickly and eIIectively as possible.
References
Anonymous (1996): The Economist, 9 March.
Anonymous (1997): India's FiItyBusiness Families, Business Today, 22 August.
Anonymous (1998): HowtoAvoidaDysIunctional FamilyBusiness, Business WeekEnterprise, March2.
Brothers, P. (1996): Succession PlanVital Ior Family Business, The Cincinnati Enquirer, December 19.
Carlock, R. S. and J. L. Ward (2001): Strategic Planning for the Family Business. Parallel Planning to
Unify the Family and Business, Palgrave, NewYork.
Charan, R., S. Drotter and J. Noel (2001): The Leadership Pipeline. How to Build the Leadership
PoweredCompany, Jossey-Bass, San Francisco.
Das, Gurucharan (1996): Interviewwith Neeraf Bafaf, 27 February.
Das, Gurucharan (1999): The Problem, http//www.india-seminar.com
Donnelley, R. G. (1964): The Family Business, Harvard Business Review, XLII, 4.
Dutta, Sudipt (1997): Family Business in India, Response Books, NewDelhi.
Flaming, Quentin J. (2000): Family Baggage Out of the Family Business, Simon & Schuster.
Goldsmith, M. and L. Carter (2010): Best Practices in Talent Management. How the Worlds Leading
Corporations Manage, Developand Retain Top Talent, PIeiIIer, San Francisco.
Goode, W. J. (1982): The Family (Second Edition), Printice-Hall, Upper saddle River.
Hoy, F. andT. G. Verser (1994): Emerging Business, Emerging Field: Entrepreneurship and Family Firm,
Entrepreneurship Theory and Practice, Fall.
Hunt, James and Wendy Handler (1999): The Practices oI EIIective Family Firm Leaders, Journal of
Developmental Entrepreneurship, Volume 4, No. 2, Fall/Winter.
Kesler, G. (2002): Why the Leadership Bench Never gets Deeper: Ten Insights about Executive Talent
Management, People & Strategy, Volume 25, Number 1.
Lee, J. (2004): The EIIects oI Family ownership and Management on Firm PerIormance, S. A. M.
Advanced Management Journal, Jolume 69, Number 4.
Litz, R.A. (1995): The Family Business: Toward DeIinitional Clarity, Family Business Review, 8 (2).
Mahler, W. and W. Wrightnour (1973): Executive Continuity. How to Build and Regain an Effective
Management Team, DowJones-irwin, Homewood II.
McCulloch, S. (2004): EconomicDominanceThroughBloodliness, FamiliesinBusiness, May-June, No. 14.
Piramal, Gita (1998): Business Legends, Viking, NewDelhi.
Ramachandran, K. (2009): Indian Family Businesses. Their Survival Beyond Three Generations,
WorkingPaper, Indian School oI Business, Hyderabad. Also available at: www.isb.edu
Roy, Rajeev (2008): Entrepreneurship, OxIord University Press, NewDelhi.
Shanker, M.C. and J. H. Astrachan (1996): Myths and Realities: Family Businesses' Contribution to the
U.S. Economy AFramework Ior Assessing Family Business Statistics, Family Business Review, 9(2).
Sampath, D. (2001): Inheriting the mantle-Management of Succession and Transition in Indian Family
Business, Response Books, NewDelhi.
Sue, Birley (1986): Succession in Family Firm: The Inheritor's View, Journal of Small Business
Management, July.
Tripathi, Dwijendra (2004) : The Oxford History of IndianBusiness, OxIord University Press, NewDelhi.
Zimmerer T. W. and N. M. Scarborough (1998): Essential of Entrepreneurship and Small Business
Management, PHI Learning, Delhi.

Between Philanthropy and Business case Reflections on
CSR practices of BT sustainable index companies
Dr. G.S.Batra `
Monika Kansal ``
* ProIessor and Head, School oI Applied Management, Punjabi University, Patiala.
** Lecturer, University Business School, Punjab University Regional Centre, Ludhiana.
Abstract
Purpose The purpose oI this explorative and
descriptive study is to explore how BT-Sustainable
index 2008 companies are perIorming in context oI their
corporate social responsibility (CSR), as well as to
check signs oI business case in respective practices oI
CSR.
Design/methodology/approach The study used a
sample oI companies listed in the BT sustainability
index 2008, an annual ranking oI the Iirms perceived to
be most sustainability conscious in India. The study
adopted an in-depth, exploratory and comparative
approach in examining the CSR issues Irom the
perspectives oI large corporations in India. Qualitative
content analysis oI the annual reports oI selected
companies with speciIic attention to human
development, community welIare, and energy and
environment conservation is undertaken.
Introduction: Corporate social responsibility has been deIined in a number oI ways. Any
particular deIinition is does not seem to justiIy the wide array oI activities that Iall within the
realm oI corporate social responsibility (CSR). Dahlsurd (2007) has complied 37 deIinitions
tending to explain CSR. This paper considers the views given by InIosys Chairman, Narayana
Murthy, who deIines CSR as, 'Social responsibility is to create maximum shareholder value
working under the circumstances where it is Iair to all its stake holders, workers, consumers, the
community, Government, and the environment. The meaning of business case has broadly
been defined as a rationale why, in taking a particular course oI action, the business might expect
to receive more beneIits than cost it bears. The beneIits can be non- Iinancial in nature, long term
and diIIicult to reckon. Mallen Baker argued that 'Apreoccupation with 'the business case only
demonstrates the immaturity oI the CSRmovement. The businesses always have business case/
economic rationale in taking any action in the name oI CSRaction because its absence may make
the action potentially detrimental to business, being Iundamentally unsustainable. It is believed
that the corporations beneIit in various ways by conducting activities within the wider realm oI
CSR. Thoughthey might be sacriIicing their immediate short term proIits, but
In the long run reimbursement unquestionably exists (the quantiIication might be diIIicult).
These beneIits may occur in variety oI Iorms. It may include enhanced proIitability and Iinancial
perIormance, increased acceptability with the investment community and consequent better
access to Iinances, saving through waste recycling resulting in reduced energy and material
inputs Ior the business, better access to the talent, a license to operate through the support oI
consumers. The business is the rationale why MNC are entering the world's poorest markets, as
individually incomes oI the poor people may be low, aggregate buying power is quite large,
representing a substantial markets. So markets at bottom oI the economic pyramid are
Iundamentally new sources oI growth Ior the MNC's. (Prahalad & Hammond, 2002). These
arguments substantiate existence oI economic rationale in pursuing CSR. The researchers have
17
been exploring the links between corporate social responsibility and Iinancial perIormance. The
investors also seem to accept this link. The enormous literature support the Iact that the indices
such as the
hat the companies showing greater degree oI sensitiveness towards the needs
oI society generally perIorm better than other companies not using Ieatures oI CSR.
Reviewof literature
Many researchers have expressed the opinion that CSR need to become part oI mainstream
business rather than a peripheral activity. It is a real challenge to integrate CSRinto core activities
oI the business in the long run (BonIiglioli & Lacy, 2004). CSR, in its true sense, is hard work
and must be seen in conjunctionwith the basic Iunctioning oI the company. Anand (Gujrat, India)
with dairy Iarming and animal husbandry in the region, MicrosoIt (raising computer literacy),
take CSR actions that ultimately help the industry to grow and beneIit the Iirm in particular
(Sharma & Talwar, 2005). Pharmaceutical Iirms can set up public health clinics to better
understand how people react to illness and then leverage that knowledge in to research and
development (Dipankar, 2003). CSRshould not only be part oI mainstream business but needs to
become an integral part oI perIormance measurement system. Pedersen & Peter (2008) added a
newdimension to support the CSRas a business case when they used CSRas a tool Ior addressing
the conIlict and management in diIIicult political environments, where business sustainability is
diIIicult in context oI MNCs. Some multinationals carry out CSR strategies when they come
under intense scrutiny Irom certain groups over the social and environmental implications oI
their activities (Shell Oil Company's CSR activities in Nigeria). Their CSR strategy is based on
principles oI sustainable development and best global practices; the company spends millions oI
dollars in health, education, agriculture, jobb creation, women's programmes, and youth training
in the hope oI reciprocation by policy makers and NGO in Iuture (Goulbourne, 2003). Prout
(2006) expressed his views that the corporations have a selI-interested approach to adopting
CSRvalues Ior marketing purposes, or to sustain acceptance among socially conscious investors,
consumers, competitors, etc. and to gain acceptance Irom developing world. Quad (2009) Iound
that CSR enhances the perIormance in a country like china with socialist legacy. Balabanis &
Phillips (1998) also reached the conclusion that (past, concurrent and subsequent) economic
perIormance is related to both CSRperIormance and disclosure, though the relationship Iound to
be weak. The past economic perIormance was Iound to partly explain variations in Iirms'
involvement in philanthropic activities. Goitom & Nancy (2008) Iound that oIIshore outsourcing
Iirms were highly involved in providing assistance to charities and supporting private and public
education. Policies addressing community, employee and customer issues Iacilitated to alleviate
the negative attitudes towards the oII source outsourcing. In developing their CSR, Iirms
emphasized the primacy oI reactive pragmatism (Dipankar, 2003). Lozano (2008) suggested that
the existence oI economic, social and environmental dimensions can be investigated and
integrated into organization so, translated into a vision oI (RSC) responsible and sustainable
corporation. Shaw(2006) Iound that Internationally-connected Ghanaian Iirms seemed to have a
better grasp oI the various dimensions oI CSRand its use to business Ior strategic advantage than
local Iirms. The large successIul organizations have a proportionate responsibility to lead in areas
beyond business that are critical Ior development and sustenance oI society (Premji, 2007). So the
larger Iirms are more inclined to use CSRas a strategic tool or Ior business purposes. Well, it does
not mean this integration is uncalled Ior in SMME's. Dzansi & Pretorius, (2009) identiIied the
need Ior breaking down Business Social Responsibility Iirst into observable indicators and
consequently into measurable elements. Companies nowcontemplate the way they interact with
various stakeholders and evaluate impact oI the business activities on society. Business and CSR
strategy seem to be on a convergent path and in Iuture business and CSRintegration may become
a norm (Silberhorn& Warren, 2007).
The sources of collection of data:
The analysis is primarily based on secondary inIormation collected Irom the respective websites
oI the selected companies. The annual report has been taken as the base Ior the reason the its use
Dow Jones Group Sustainability Index (DJGSI), the FTSE4 Good indices, and the
Jantzi Social Index t
Between Philanthropy and Business case Reflections on CSR practices of BT sustainable index companies
has been validated by earlier researches on grounds oI accessibility, consistency, timeliness and
Iinally it being an audited and comprehensive document is perceived to be more reliable than
other documents (chander, 1992).
Selection of sample:
The top Iive companies have been taken Irom the BT (British Telecom) Sustainability Index
2008. The index comprised 11 companies named as Tata Group, Reliance, InIosys, ITC, Wipro,
Suzlon Energy, Airtel, Honda, ONGC, IL&FS and Satyam in order. From Tata group, one
company i.e. Tata Power Limitedwas selected at random.
Period of study: The relevant data available in Iorm oI annual reports have been taken Irom the
year 2002 to2009.
Analysis and discussion:
1. Tata power Limited: India's largest and internationally best-known Tata group oI Companies,
Iounded by Jamsedji Tata strongly Iavors and Iollows the concept oI CSR. Sharma & Talwar
(2005) showed that the company's expenditure on society is consistent in spite oI Iluctuating
trend oI proIits oI company. Nearly 80 per cent oI the capital oI the holding company, Tata Sons
Limited, is held by these Trusts. The company has contributed in the areas oI science,
medicine, atomic energy and perIorming arts. J.R.D. Tata held the view that No success. is
worthwhile unless it serves the needs or interests of the country and its people. and took many
other initiatives like Ilood relieI to 66000 Iamilies in nearby villages in 2006, Women
empowerment through vocational training to women , various awareness campaigns, a drive
to educate and motivate the consumers to conserve energy, distribution oI quality seeds.
The company implemented the Tata Business Excellence Model (TBEM) benchmarking and
revising oI PerIormance Management System, Reward & Recognition and training Iocused on
customer orientation, improving commercial skills, team building, OEM Training and
extension oI training programme to contractor's supervisor and workers. As a result employee
relations continue to be cordial.
In 2003-2004 due to sustained monitoring, the heat rate was reduced Irom 2378 to 2349 kcal/
kWh and amounted to resource equivalent Ior the generation oI 9038 MUs. The energy saved is
energy generated and substantial savings occurred to the company. In 2005 and 2006 the
company collaborated with Maharashtra Energy Development Agency (MEDA) and Ministry
oI Non-Conventional Energy Resources to put a Solar Rural ElectriIication Plant,
ConIederation oI Indian Industries (CII) and Energy Research Institute (TERI) Ior treating
oily waste in an environment-friendly manner using bio-remediation process. In 2006-07 a
joint Energy Conservation Awareness Campaign 'I Will, Mumbai Will' was launched by
Tata Power, REL and BEST to reIresh and reinIorce the spirit oI wastage elimination,
eIIiciency improvement and cost reduction in the usage oI electricity. Under AARTI, the
Smokeless Chula programme 1,200 chullahs have been provided so Iar. The overview oI
various activities (see table 1) shows that CSR mindset is becoming more systematic and
strategic. Since 2004-05 there are sections describing CSR but the details regarding CSR
budgets, number oI beneIiciaries is becoming less available, making quantitative analysis
unIeasible. In 2009, the company has undertaken many CDM (clean development mechanism)
projects and is exploring various clean coal projects. The Tata Power Community
Development Trust has been Iormed and registered, Iormulation oI a community volunteering
policy, institution oI CNI (community need identiIication), Community SatisIaction Index
(CSI) do point towards more systematic and strategic approach towards CSR. The Iocus has
slowly shiIted to reduction oI energy and environment conservation promising potential
economic advantage through reduced carbon Iootprints and cost saving attached.
Consequently, in 2009, the issues concerning carbon Iootprints, CDM projects become
dominant.
2. Reliance industries limited: Sharma & Talwar (2005) reports that the Reliance Group argues
19
strongly against CSR. So, it is interesting to have an insight oI philanthropic initiatives oI the
company and construe the intent behind it.
the scientiIic
research activities oI Sir Hurkisondas Nurrotumdas Medical Research Society (HNMRS).
In philanthropy reliance group has shown
outstanding commitment and support to the national Iight against HIVand AIDS. For this, the
company won TERI Corporate Award Ior Business Response to HIV/ AIDS 2007 and the
UNAIDS Civil Society Awards 2006. In healthcare it engaged upon prevention through
awareness, reducing occupational hazards, a scheme named Change Agents Ior SaIety &
Health (CASH) introduced in 2002. Company also renders services regularly in primary
mobile health care and dispensaries, Reproductive & Child Health (RCH). It made
donations to 'Paryavaran Mitra', police welIare Iund, consumer education and research centre,
Gujarat Women Action group, NarmadaYojana, Oswal Education Trust, setting up oI libraries,
Gujarat Cricket Association, etc. though the number oI beneIiciaries is Iound disclosed at
some points but Iigures supporting actual amount spent are missing. The thrust upon
education included community and female education, enhancing youth employability,
rewards and scholarship, quality education like The Dhirubhai Ambani International
School, Several community welIare activities have been
taken up on a sustainable and continuous basis showits commitment as a responsible corporate
citizen. The company served the urban and village communities in the area oI health,
education, cultural activities, improvement in inIrastructure, supply oI Iodder, drinking water,
academic and sports events and many other welIare activities. Reliance Rural Development
Trust Iocussed creation oI rural inIrastructure Iacilities like construction oI roads, anganwadis
(kindergarten school), Panchayat oIIices and community halls and setting up a SJADES
(Society Ior Village Development in Petrochemicals Area) with the co-operation oI all the
neighbouringindustries inVadodara.
The company issued its Iirst corporate sustainability report in 2004-05. In 2007, the company
placed much oI emphasis on training Ior enhancing the eIIiciency, productivity and
perIormance oI all its employees. Over 68,600 mandays oI training are undertaken to develop
people in personal as well as proIessional capabilities.
In 2009 the company Iocuses on employing technology based mechanisms like EO catalyst,
modern EO reactor Ior reduction oI material consumption and co generation, Catacarb
2
technology in CO removal system increasing the CO absorption eIIiciency and reduce CO
2 2 2
concentration. The recovery oI methane rich gas has brought value Ior contribution to the
Carbon credit projects through the Clean Development Mechanism (CDM). The switch to an
energy eIIicient system oI air supply can potentially earn carbon credits. CDM projects that
reduce the greenhouse gas emissions have been identiIied and recommended Ior
implementation under the United Nations Framework Convention on Climate Change
(UNFCCC). CDM in particular, is expected to contribute to sustainable development, mitigate
climate change and assist in compliance with emission reduction commitments. So, the
company seems to understand the importance of CSRactivities but slowly the emphasis
is shifting towards the more sustainability.
3. Infosys: The philanthropic initiatives mainly included education and healthcare Ior the poor.
The initiatives oI company included Community services in 1999 - Catch ThemYoung, Rural
Reach and Train the Trainer. ComputersClassrooms initiative since 1999, has donated
computers to institutions across India in association with MicrosoIt donating the relevant
soItware. Community involvement activities included construction oI hostel, orphanage,
securing means oI livelihood Ior women by donating sewing machines, organization oI eye
camps, donation oI ambulances and passenger vans, Braille system. The company has
promoted Indian art and culture to a great extent. Healthcare Ior the poor included constriction
Dhirubhai Ambani Foundation (DAF) is
pursuing philanthropic activities to promote national welIare, social good and
The
objectives include a broad spectrum oI worthy causes ranging Irom health and environment, to
promotion oI social and economic welIare, and rural development with main thrust has been on
education and public healthcare since 1995.
Reliance School of Life Sciences.

and computerisation oI hospitals Ior the poor, Iree ward, Ior cancer patients, donations to the
Swami Vivekananda Youth Movement, Ior the construction oI a hospital. In education,
libraries Ior the school (Shalegondu Granthalaya) program conducted very successIul since
1997-98. In health care super-specialty hospital, construction oI the orphanage students home
& relieI shelters, supplied artiIicial limbs and other aid-equipments, through the Red Cross
Society, to physically challenged people in the rural and economically weaker sections in
Karnataka deserve mention. Other community welIare eIIorts included counselling centres Ior
the rehabilitation oI devadasi women, burial grounds in the villages oI Karnataka. It introduced
computer education to the village training centres through teachers training camps, to spread
computer awareness in rural areas, on water conservation and environmental education Ior
school teachers, Karnataka, in collaboration with the Centre Ior Environment Education
(CEE) South, Bangalore donated money to Prerana, an NGO, to award scholarships,
Karnataka.
To reduce energy consumption energy-eIIicient computers and equipment like electronic
ballast, air conditioners and pumps with the latest technologies are in use. As energy costs
comprise a very small part oI company's total expenses, the Iinancial impact oI these measures
is not substantial.
It chalks out its Iormal report on environment, health and saIety through InIosys EHS Policy
Though no quantitative targets were set, there is express commitment to conservation oI
resources, prevention oI pollution, adherence to all applicable legislations, prevention oI
accidents and occupational injuries at work, continual improvement oI Environmental
Management System, conservation oI paper, and to minimise the consumption oI rawmaterial
at InIosys. Health Assessment and LiIestyle Enrichment (HALE) initiative Iocuses on
increasing the emotional value-add oI our employees, by optimizing their health, quality oI liIe
and work environment. The healthy and happy employees are more productive and in the long
term, give competitive edge in business.These types oI eIIorts does give company global
visibility as InIosys is one oI seven global companies recognized as a Brand with a Conscience
by the Medinge Group oI Sweden, and International think tank oI brand experts, in 2004.
The OZONE initiative by the year 2009 zero downed upon reduction oI energy consumption
by 25 in near Iuture and reduced 10 in 2008, conscious approach to use paper and water
consumption. The company is committed to become carbon neutral by 2011. Ozone initiative
helps company to comply Iully with all legal requirements, provide a secure working
environment to protect the employees, assets and operations against all risks oI injury, loss or
damage, Irom natural calamities and hostile acts. In addition, evaluating opportunities to
procure electricity via renewable technologies such as wind, mini-hydro and solar explains
blending oI CSR/ sustainabilityand the economic aspects.
4. ITC limited: The social development is Iully integrated with business e.g. to overcome the
challenges oI securing the long term Iibre supply and remaining continuously cost
competitive, it has, experimented with an aggressive clone propagation strategy, as well as
serving the Iarmers engaged in pulp wood plantation on their marginal wastelands. This
practice has yielded beneIit to both Iarmers and the company Ior last 13 years in terms oI cost
competitive advantage, achievement oI 'Carbon positive' status Ior the Iourth year in
succession in 2009. It also secured 'solid waste recycling positive' status with its Tribeni and
Kovai Units. Another strategic initiative can be use oI waste paper through wastepaper
recycling designated 'WOW' (Wealth out oI Waste). It contributes to a cleaner environment and
long term cost competitiveness. It is not hard to imagine the saving coming out oI procuring
and recycling over 125,000 tonnes oI waste paper. The business is actively leveraging CDM
opportunities under the Kyoto Protocol. ITC's Social Forestry programme has been accepted
by Executive Board Ior CDM under the UNFCCCand is the Iirst oI its kind in India. In 2009,
the business earned Rs.10 crores through the sale oI CertiIied Emission Reduction (CERs).
CDM projects in the pipeline include installation oI a 90 tph green boiler at the Bhadrachalam
unit at an investment oI Rs. 860 millions which will bring substantial cost reduction and also
21
yield a signiIicant quantum oI CERs. FiIty newe-Choupals were launched in Tamil Nadu. The
company collaborated with the Government oI Madhya Pradesh under Agriculture
Technology Management Agency (ATMA) project to providing live training to Iarmers on
scientiIic agricultural practices Ior selected crops. The Company's 'Carbon Positive', 'Water
Positive' and 'Solid Waste Recycling Positive' status gives it the distinction oI being the only
Company in the world with positive Iootprints in the three major global environmental
concerns. The company has registered seven CDM projects that have already earned Carbon
credits and many others are in various stages oI the registration process. ITCHotel, the Sonar is
.
today the only hotel in the world to earn certiIied emission reduction
The company contributes towards some oI the globally renowned NGOs like BAIF Development
Research Foundation, Dhan, FES, MYRADA, Pratham, SEWA, SRIJAN and WOTR etc. It
works Ior economic development oI women, primary education, health, education and sanitary
initiatives. Overall such initiatives connote the business intent as well as enlarge the stature oI
company in eyes oI the Government, NGOs, public institutions and people at large. Prahalad &
Hammond (2002) explains the business case in ITC with its e-choupals. The company
streamlined its supply chain, reduced procurement costs in agribusiness leading to contribution to
proIits oI the company. This company seems to have integrated CSRwithin business Iramework
to a noteworthylevel.
Wipro Technologies Limited: The annual report 2001 used the word shareholders value rather
than the stakeholder's value. For human resources PCMM (people capability maturity model)
the inIormation Iocuses on sig-sigma and the team edge. But there is no mention oI green
technologies, CSR, Environment, Philanthropy kind oI things. For the Iirst time in annual report
oI 2004-05 mentioned understanding and responding to needs oI community, employees,
customers, shareholders and society and issues like September 11, dire poverty and other ills. By
2005, there is an express opinion oI ability to contribute to the society. Two main initiatives oI
Wipro are 'Wipro applying thought in schools' (training to 4500 teachers and principals Irom 241
schools Irom 14 states across India) and 'Wipro Cares' (survivors oI natural calamities and
enhancement oI learning ability oI children Irom under privileged sections oI society). Post t-
Sumani eIIorts included providing livelihood means, reclaiming agricultural land, creation oI
selI help groups (SHG) to make women independent and rebuilding the schools. The Wipro
employees are also associated with SOS Amitie' an organization with objectives oI provides
counseling the depressed people.
For human resources eIIorts are made Ior capacity building, WOCA (Wipro online consulting
Academy), WOLA (Wipro online learning academy) and leadership liIe cycle training.
Leadership vision determines the charter oI CSR struggles oI the organizations. Azim Premji in
various letters to shareholders expressed that the organizations can be successIul only by sticking
to value andethical behavior is not an obstacle to the business success.
Sustainable development Iocused three themes namely water conservation, energy conservation
and waste management. 53 percent reduction in water consumption and Iive percent reduction in
energy consumption in 2005 as compared to 2004 do represent a strong business sense. There is
no mention oI amounts spent on CSR endeavors. Annual Report 2006 Iails to mention
philanthropy and CSRexcept the statement regarding continuation oI eIIorts. Talent supply chain
management i.e. attracting, recruiting, retaining high quality talent is recognized as top risk Ior
growth in 2007. By the year 2007, the eco eye vision oI the company is presented and Iocus
shiIted to increasing sustainability in operations. Now the issues like water neutrality, bio-
diversity and waste management become relevant.
Through 'Wipro Applying Thought in Schools' (now Mission 10x) the company reaches more
than 1000 schools and through 'Wipro Cares' works Ior community improvement and
rehabilitation work post natural disasters. Annual report 2007 includes Iive year road map
showing concerns towards Ecological Sustainability with Iive key dimensions: Carbon
Iootprint, Water balance, Facilitating preservation and spread oI biodiversity, waste
management. Wipro recognizes the need to conduct business ethically and Iairly in the Iorm oI
Wipro BelieIs, Chairman's annual communication with employees, annual employee surveys
0
and 360 appraisal oI the Wipro leadership. These initiatives certainly help in employee retention
and attracting good talent. In 2008, employee saIety, health and environmental risks were given
place among toptenrisks at the business and corporate level.
Conclusion: A key Ieature oI CSR involves the way that a company engages, involves, and
collaborates with its stakeholders including shareholders, employees, suppliers, customers,
communities, non-governmental organizations, and governments. All these eIIorts thrust upon
Iostering more plausible and trustworthy relationship between the business and the community.
All the selected companies have associated themselves with diIIerent NGOs and government
bodies and try to touch the liIe oI the people in community. All the selected companies have Iully
recognized the importance oI human capital, and engaged in various progammmes Ior
enhancement oI this resource beyond mere rhetoric level. Tata, InIosys and Reliance have
institutionalized the CSRworking through Iunds. Tata and Wipro are more into philanthropy
and slowto use CSRas a business case. ITC, Infosys and Reliance have integrated CSRinto
their mainstream business to a large extent. It is also Iound that the CSR initiatives are
impacted by the leadership visionoI the company.
The CSRpath is still hazy for the Indian corporate inc. CSRis still in a conIused state in India
argument by Tatjana et al (2007) supports the current research Iindings. In India this concept has
slowly matured Irom philanthropy to sustainability business strategy on one level and Irom selI
regulation to multi stakeholder concept. Companies engage in CSRbecause, for a number of
reasons, they perceive it good for their profit margins. The business case for CSR
emphasizes the benefits to reputation, staff and consumer loyalty plus maintaining public
goodwill through numerous awards and finally by carbon credits it earns and direct benefit
to bottom line through recycling of waste and material and natural resources. At present
diversity oI eIIorts, lack oI mandatory disclosures requirements prohibits a common quantitative
analysis. There is a need Ior a Iramework that captures the business case Ior CSR in the Indian
context. The Iramework showing the relation between CSR and business concept need to be
broken down into standardized dimensions and eventually into measurable elements Ior
accountability and better quantitative analysis to gauss somewhat veiled business intent. Only
aIter that, the some mandatory CSR disclosures can be contemplated around this extremely
sensitive issue.
Bibliography
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Pedersen, E. R., & Peter, N. (2008). From periphery to centre: how CSR is integrated in mainstream
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Shaw, J. J. (2006). CSR: Where is the Love. Social Resonsibility Journal .
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(Various annual reports oI Tata power limited)
Initiative 2002 2003 2004 2005 2006 2007 2008 2009
Auxiliarypower consumptionat
wadi plants 4.58 4.36
Jojobera NA 12.7 10.9
Trombay NA 4.4 4.3
Fly ash utilization 1250 66 73 90 100
tonnes
a day
AIIrestaion(million .604 .650 .72 Over 1 Over .99 1.002
saplings)
Human T&D 6855 12250 5 mandays
(mandays) peremployee
SaIety(no. oI accidents per million manhours worked per year)
2.2 2 0.7
Communitydevelopment
Medical Iacilities LiIeline Express
over 500 villages
Free medical (Rs.96 million) 40700 42000
checkupandmedicines villagers villagers
to the villagers
Drinking Water 54 MCM oI water
Supply Schemes (rs. 1.35 millions)
Pisciculture semi .1million Iish Over .110 .39 oI Over .110
Iingerlings oI seedoIcarpvariety Mahseer Mahseer
Mahseer (million) eggs, .24 . Fingerlings
oIIry/semi
Iingerlings
Environment 6 workshops 7 teacher
Education(Teachers 177 Teachers training
Training) and 899 students workshop .
RunningoISchools Rs3.33 millions
Contraction & Rs. 1.23 millions
modernization oI
schools
AsphaltingoIroads Rs. 3.64millions 16.5Kms
PAT(rs. millions) 5082.3 5199.2 5090.8 5513.6 6105.4 6968.0 10550.7 2187.4
Isita Lahiri`
Gairik Das``
Acomparative review of the Development of the Indian
Retail Panorama with special emphasis to organized Apparel Retailing
Abstract
The retail industry in India is oI late oIten being hailed as
one oI the sunrise sectors in the economy. It is on the
threshold oI bringing the next big revolution aIter the IT
sector. AT Kearney, the well-known international
management consultancy, recently identiIied India as
the 'second most attractive retail destination' globally
Irom among thirty emerging markets. It has made India
the cause oI a good deal oI excitement and the cynosure
oI many Ioreign eyes. However, apparel retailers are
conIronting the increased pace and complexity
impacting their industry and are challenged to emerge
with a clear value proposition Ior their customers. The
researcher tried to review the development oI the
organized retail sector in India with special emphasis to
apparel retailing.
Introduction
India has topped theATKearney's annual Global Retail Development Index (GRDI) Ior the third
consecutive year, maintaining its position as the most attractive market Ior retail investment. The
Indian retail market -- one oI India's Iastest growing industries -- is expected to grow Irom US$
350 billion to US$ 427 billion by 2010. According to Euromonitor International, the Indian Retail
market will grow in value terms by a total oI 39.6 per cent between 2006 and 2011, averaging
growth oI almost 7 per cent a year. Modern retail accounts Ior about 4 per cent oI the total retail
market in India. This share is expected to increase to about 15 -20 per cent with the entry oI a
number oI corporates into the segment. Modern retail Iormats have grown by 25-30 per cent in
India in the last year andcould be worth US$ 175-200 billion by 2016.
Defining Retailing
'Any business that directs its marketing eIIorts towards satisIying the Iinal consumer based upon
the organisationoI selling goods and services as means oI distribution
Retailing is the interIace between the producer and the individual consumer buying Ior personal
consumption. This excludes direct interIace between the manuIacturer and institutional buyers
such as the government and other bulk customers.
A retailer is one who stocks the producer's goods and is involved in the act oI selling it to the
individual consumer, at a margin oI proIit. As such, retailing is the last link that connects the
individual consumer withthe manuIacturing and distribution chain (Gilbert, 2006).
* Associate ProIessor, Dept. oI Business Administration, University oI Kalyani, Nadia, West
Bengal, 741 235, Email: isitalahiriyahoo.com
** Assistant ProIessor and HOD, Retail Management, IISWBM, Kolkata.
Email: gairikdyahoo.com
25
Retailing in India
"There is nothing more powerIul than an idea whose time has come."
- VictorHugo
Organized retail industries stared to appear in Indian market in the 1990s, aIter India Iirst began
opening its economy. Textiles sector (which companies like Bombay Dyeing, Raymond's, S
Kumar's and Grasim) was the Iirst to see the emergence oI retail chains. Later on, Titan, maker oI
premium watches, successIully created an organized retailing concept in India by establishing a
series oI elegant showrooms.
For long, these remained the only organized retailers, but the latter halI oI the 1990s saw a Iresh
wave oI entrants in the retailing business. These entrants were in various Iields, like - FoodWorld,
Subhiksha and Nilgiris in Iood and FMCG; Planet M and Music World in music; Crossword and
Fountainhead inbooks.
India has close to 13 million retail outlets the highest in the world while the retail industry. Indian
Retail market stood at Rs 1,330,000 crore in 2007 with annual growth oI about 10.8 . OI this, the
share oI organised Retail in 2007 was estimated to be only 5.9 but this modern retail segment
grewat the rate oI 42.4 in 2007, and is expected to maintain a Iaster growth rate over the next
three years, especially in view oI the Iact that major global players and Indian corporate houses
are seen entering the Irayina big way.
In the organised retail segment Apparel and Iashion accessories is the largest category with 38.1
oI the market share, Iollowed by Iood and grocery accounting Ior 11.5 , Iootwear with 9.9 ,
consumer durables with 9.1, and out-oI-home Iood (catering) services and Iurniture,
Iurnishings & Kitchenware retail in the order.
The consumer spending is ultimately pushing the economy into a growth-and-liberalisation
mode. The Indian market is becoming bolder by the day, with the economy now expected to
maintain its growth at over 8 to 9 and average salaries being hiked by about 15 , there will be
lot more consumption. (Source. India Retail Report, 2009)
Growth and Opportunities
The Indian retail scene has witnessed many players in a very short span oI time. The growth rate
oI super market sales has been signiIicant in recent years because greater numbers oI higher
income Indians preIer to shop at super markets due to higher standards oI hygiene and attractive
ambience. With growth in income levels, Indians have started spending more on health and
liIestyle products. In recent years, a Iew retail chains oIIering specialised products viz books,
music, jewellery, watches, Iootwear etc have come into the market. Although these retail chains
account Ior only a small share oI the total market, their business is expected to growsigniIicantly
in the Iuture due to the growing quality consciousness, brand, designing etc oI buyers Ior these
products .Traditional outlets stock a limited range oI cheap and popular items; in contrast,
$600
$500
$400
$300
$200
U
S
$

b
i
l
l
i
o
n
s
$100
$0
1998 1999 2000 2001 2002 2003
Food, beverages
and tobacco
2004 2005` 2006` 2007` 2008`
Sources: Economist Intelligence Unit and A.T. Kearny analysis `Data for 2005-2008 is based on estimates
Clothing
Retail
Acomparative review of the Development of the Indian Retail Panorama with special emphasis to organized Apparel Retailing
modern clothing and Iootwear stores have modern products and attractive displays to lure
customers. With rapid urbanization, and changing patterns oI consumer tastes and preIerences, it
is unlikely that the traditional outlets will survive the test oI time. . (Dash, 2007)
The Retail Business in India is currently at the point oI inIlection. Rapid change with investments
to the tune oI US $ 25 billion is being planned by several Indian and multinational companies in
the next 5 years. It is a huge industry in terms oI size and according to management consulting
Iirm Technopak Advisors Pvt. Ltd., it is valued at about US $ 350 billion. Organized retail is
expected to garner about 16-18 percent oI the total retail market (US $ 65-75 billion) in the next 5
years. (Singhal, 2006).
India has topped the A.T. Kearney's annual Global Retail Development Index (GRDI) Ior the
third consecutive year, maintaining its position as the most attractive market Ior retail investment.
The Indian economy has registered a growth oI 8 Ior 2007. The prediction Ior 2008 is 7.9. The
enormous growth oI the retail industry has created a huge demand Ior real estate. Property
developers are creating retail real estate at an aggressive pace and by 2010, 300 malls are
estimated to be operational in the country (Saurabh, 2007).
Scope and Future:
Retail is clearly the sector that is poised to show the highest growth in the next Iive years. With
over 1,000 hypermarkets and 3,000 supermarkets projected to come up by 2011, India will need
2
additional retail space oI 700,000,000 sq It (65,000,000 m ) as compared to today. Current
2
projections on construction point to a supply oI just 200,000,000 sq It (19,000,000 m ), leaving a
2
gap oI 500,000,000 sq It (46,000,000 m ) that needs to be Iilled, at a cost oI US$15-18 billion
(INRnews, 2006).
The retailing conIiguration in India is Iast developing as shopping malls are increasingly
becoming Iamiliar in large cities. When it comes to development oI retail space specially the
malls, the Tier II cities are no longer behind in the race. II development plans till 2007 is studied it
shows the projection oI 220 shopping malls, with 139 malls in metros and the remaining 81 in the
Tier II cities. The government policy in states like Delhi and National Capital Region (NCR)
makes it possible torender to 50 oI the malls in India at that region.
The global retail giants like Wal-Mart, Gap, Tesco, Versace, K-Mart/SEARS, CarreIour, Mother
Care, lKEA, Trussardi, DKNYand Debenhams have made plans to march in the Indian market.
According to the Icrier report, the retail business in India is estimated to growat 13 Irom $322
billion in 2006-07 to $590 billion in 2011-12. The unorganized retail sector is expected to growat
about 10 per annum with sales expected to rise Irom $ 309 billion in 2006-07 to $ 496 billion in
2011-12 (Bailay, 2008).
Challenges
The major challenges oI Indian retail industry are large geographic area, InIrastructure
constraints, distribution costs, Fragmented market, lack oI national distribution networks, lack oI
distribution hubs. In addition oI this retail diIIerentiation, merchandising mix, supply chain
management andcompetition Irom supplier's brands are the major concern oI the day.
(Dash, 2007)
Large geographic
area
Infrastructure
constraints
Distribution costs
Fragmented market
( respondents who chose)
59
Key challenges in the Indian retail market
59
46
44
42
32
Source: KPMG Consumer Markets Survey
Lack of national
distribution networks
Lack of distribution
hubs
27
CustomerPerspectives
The recent study done by McKinsey & Co. in which they have tried to understand the psyche oI
the Indian shopper and throws up Iew interesting Iacts that retailers can use to sharpen their
strategies. As per survey 67 oI Indian love to spend time in a mall and regard it as the Iavourite
leisure activity Ior the Iamily and Iun. Shoppers in India are very Iinicky about Iresh Iood and
tend to make daily trips to ensure this. According to the survey, the concept oI Ireshness is
perceived diIIerently in various market. In India Iresh implies 'unpacked Iruits and vegetables
and meat Ireshly cut Irom a butcher. The study suggested that retailers must create exciting
Iormats that encourage window-shopping.
(Source. Business Telegraph, 26/09/2008)
In their preparation to Iace Iierce competitive pressure, Indian retailers must come to recognize
the value oI building their own stores as brands to reinIorce their marketing Positioning, to
communicate quality as well as value Ior money. Sustainable competitive advantage will be
dependent on translating core values combining products, image and reputation into a coherent
retail brand strategy.
The Indian Retail Industry is the largest among all the industries in India, accounting Ior over 10
per cent oI the country's GDP and around 8 per cent oI the employment. The Retail Industry in
India has become one oI the most dynamic and Iast paced industries with several players entering
the market. Modern retailing has entered into the retail market in India as is observed in the Iorm
oI bustling shopping centers, multi-storied malls and the huge complexes that oIIer shopping,
entertainment andIood all under one rooI.
A large young working population with age range starting Irom 24 years, nuclear Iamilies in
urban areas is the largest part oI total customers oI organized retail sector.
In India the vast middle class and its almost untapped retail industry are the key attractive Iorces
Ior global retail giants wanting to enter into newer markets, which in turn will help the India
Retail Industry to growIaster. Indian retail is expected to grow25 per cent annually. The Iuture oI
the India Retail Industry looks promising with the growing oI the market, with the government
policies becoming more Iavorable and the emerging technologies Iacilitating operations
(Dhanabhakyam, 2007).
RETAILFORMATS ININDIA
Malls: The largest Iorm oI organized retailing today. Located mainly in metro cities, in proximity
to urban outskirts, ranges Irom 60,000 sq It to 7,00,000 sq It and above. They lend an ideal
shopping experience with an amalgamation oI product, service and entertainment, all under a
common rooI. Specialty Stores: Chains such as the Bangalore based Kids Kemp, the Mumbai
books retailer Crossword, RPG's Music World and the Times Group's music chain Planet M, are
Iocusing on speciIic market segments and have established themselves strongly in their sectors.
Discount Stores: As the name suggests, discount stores or Iactory outlets, oIIer discounts on the
MRP through selling in bulk reaching economies oI scale or excess stock leIt over at the season.
The product category can range Irom a variety oI perishable/ non-perishable goods. Department
Stores: Large stores ranging Irom 20000-50000 sq. It, catering to a variety oI consumer needs.
Further classiIied into localized departments such as clothing, toys, home, groceries, etc. Among
these, the biggest success is KRaheja's Shoppers Stop. Hyper marts/Supermarkets: Large selI-
service outlets, catering to varied shopper needs are termed as Supermarkets. These are located in
or near residential high streets. These stores today contribute to 30 oI all Iood & grocery
organized retail sales. Super Markets can Iurther be classiIied in to mini supermarkets typically
1,000 sq It to 2,000 sq It and large supermarkets ranging Irom oI 3,500 sq It to 5,000 sq It. having a
strong Iocus on Iood & grocery and personal sales. Convenience Stores: These are relatively
small stores 400-2,000 sq. Ieet located near residential areas. They stock a limited range oI high-
turnover convenience products and are usually open Ior extended periods during the day, seven
days a week. Prices are slightly higher due to the convenience premium. MBO's: Multi Brand
outlets, also known as Category Killers, oIIer several brands across a single product category.
These usually do well in busy market places and Metros. Discount Malls :Top realtors and local
retail chains are developing malls in regional boroughs, speciIically to sell premium branded
goods at prices 30 to 40 per cent cheaper than the maximum retail price. At least 50 such malls are
to come up in the next two years across the country positioned in the middle-to-the-premium end
oI the market. For example, Royal Palms is developing Orchard Road Mall in the western suburbs
oI Mumbai. Similarly, Akruti Nirman, which is planning to brand its discount malls in
Kanjurmag, Ghatkopar, Mumbai and Thane as 'Cityworld', has decided to develop similar malls
in Tier II and Tier III cities.
Some highlights of the organized retailing in India:
Retail Space
Retailers in India are the most aggressive in Asia in expanding their businesses, thus creating a
huge demand Ior real estate. Their preIerred means oI expansion is to increase the number oI
outlets in a city, and also expand to other regions, revealed the Jones Lang LaSalle third annual
Retailer Sentiment Survey-Asia.
Driven by changing liIestyles, strong income growth and Iavourable demographic patterns,
Indian retail is expanding at a rapid pace. The country may have 600 new shopping centres by
2010. Mall space, Irom a meagre one million square Ieet in 2002, is expected to touch 40 million
square Ieet by end-2007and an estimated 60 million square Ieet by end-2008.
Food Retaing
Food dominates the shopping basket in India. The US$ 6.1 billion Indian Ioods industry, which
Iorms 44 per cent oI the entire FMCGsales, is growing at 9 per cent and has set the growth agenda
Ior modern trade Iormats. The prospect Ior growth oI the branded segment is huge, as nearly 60
per cent oI the average Indiangrocery basket still comprises non-branded items.
OI the 12 million retail outlets (which is the largest in the world), over 5 million sell Iood and
related products. Some oI the large players in this market are Kishore Biyani's Food Bazaar,
Mukesh Ambani's Reliance Fresh, Godrej Agrovet, the Aditya Birla Group, and the Tata Group
(which acquired 70per cent stake in Innovative Foods Irom theAmalgam Group) among others.
Telecommunications
The retail market Ior mobile phones - handset, accessories and airtime - is already an over US$
17.33-billion market growing at the rate oI 15-20 per cent. With the number oI mobile users
expected to cross 220 million by the year end (and 550 million by 2010), many players have been
chalking out aggressive plans.
Spice Group plans to invest US$ 123.8 million in the next two years in its telecom retail venture,
HotSpot Retail. Essar Group plans to invest US$ 278.56 - 334.24 million over the next three
years in its telecom retail venture.
Luxury Brands
With consumers Ior luxury goods more in numbers than adult population oI several countries,
many luxury brands have been attracted to set up shops in India to tap the growing market. Many
companies such as Bang & OluIsen, Escada, Brioni, Chanel, Louis Vuitton, Versace, Fendi,
Valentino, andSwarovski amongothers have already opened shops in the country.
According to the India Luxury Trends 2006, prepared by KSATechnopak, consumer base in this
segment is expected to treble by 2010.
Kids' retail
When it comes toIndianchildren, retailers are busy bonding -- and branding:
Monalisa, theVersace oI kids, is coming to India.
Global liIestyle brand Nautica is bringing Nautica Kids.
International brand Zapptiedup with Raymond to Ioray into kids' apparel.
29
Disney launched exclusive chains which stock character-based stationery.
Pantaloon's joint venture withGini & Jony will set up a retail chain to market kids' apparel.
Swiss kidswear brand Milou is collaborating with Tirupur-based Sreeja Hosieries.
Turner International India Pvt Ltd. will launch Cartoon Network Townsville and Planet
POGO-- two theme parks designed around its channels -- in the National Capital Region.
Sahara One Television has signed a Memorandum oI Understanding to source content
Irom Spacetoon Media Group, Middle East's largest kids' entertainment brand Ior
animation and live action content. Leading the kids' retail revolution is the apparel
business, which accounts Ior almost 80 per cent oI the revenue, with kids' clothing in India
Iollowing international Iashion trends. According to research Iirm KSA Technopak, the
branded segment comprises US$ 701.7 million oI the total kids' apparel market-size oI
over US$ 3 billion. Industry experts say kids' retailing will touch annual growth oI 30-35
per cent.
Agricultural Retail
India's large consumer base along with export potential and reIorms in agriculture (such as
opening up oI many agriculture sectors Ior 100 per cent FDI, allowing Iarmers to sell their
produce directly to buyers) have attracted a large number oI corporates into the agricultural retail
segment.
For its e-Choupal scheme, ITCbuilt internet kiosks in villages to provide Iarmers access to latest
inIormation on weather, market prices and Ioods in demand among other things.
With a US$ 5.6 billion, multi-year investment in agriculture and retail, Reliance Retail will
establish links with Iarms on several thousand acres in Punjab, West Bengal and Maharashtra.
FieldFresh, planning to become India's Iirst large-scale exporter oI produce, will annually pay
Iarmers over US$ 30,000 tolease land Ior vegetables, to hire tractors and to pay their workers.
PepsiCo, with agriculture exports worth US$ 40 million, has launched a Iive-year program with
the Punjab Government to provide several hundred Iarmers with Iour million sweet-orange trees
Ior its Tropicana juices by 2008. It has also introduced Iarmers to high-yielding basmati rice,
mangoes, potatoes, chillies, peanuts and barley Ior its Frito-Lay snacks.
Fresh, a Iood and grocery retail initiative oI Heritage Foods (India) Ltd, is in the process oI
developing a 5,000-acre cluster Iarming complex to Ieed the retail network that will have 100
stores in the next Iewmonths.
Kishore Biyani's Future Group runs Big Bazaar and Food Bazaar, one oI the most
popular retail chains in India.
International retailers in India
India's vast middle class with its expanding purchasing power and its almost untapped retail
industry are key attractions Ior global retail giants wanting to enter newer markets. The
Australian government's National Food Industry Strategy and Austrade initiated a test marketing
Iood retail in India wherein 12 major Australian Iood producers have tied up with India-based
distributor AB Mauri to sell their products directly at retail outlets. US-based home delivery and
logistics company, Specialised Transportation Inc, will enter the Indian market through a
strategic alliance with Patel Retail, a subsidiary oI Patel Integrated Logistics. Wal-Mart has
announced its plans Ior India in partnership with Bharti,
US coIIee chain Starbucks' is well on its way to set up its Iirst store in India this year.
US based Tommy HilIiger has tied up with Creative Portico, a Mumbai based home textiles
company, tosell its home textiles and Iurnishings in India.
AlIred Dunhill, a UK-based luxury men's brand, has tied up with Brandhouse Retail Ltd.
Ior its India venture andwill be opening Iour stores in the country.
The world's largest Iurniture retailer, Ikea, has established an oIIice in Gurgaon Ior market
research and is holding talks with domestic companies to open stores in India.
Some oI the international players that have already entered India include McDonald's, Pizza Hut,
Dominos, Levis, Lee, Nike, Adidas, TGIF, Benetton, Swarovski, Sony, Sharp, Kodak, Medicine
Shoppe among others.
Retail reform
The Government allows 100 per cent Ioreign direct investment (FDI) in cash and carry through
the automatic route and 51 per cent in single brand. Besides, the Iranchise route is available Ior
big operators. Now, the Government also proposes Iurther liberalisation in the retail sector
allowing 51 per cent FDI in consumer electronics, sports goods, stationery and building
equipment. Source: Business India July 2007
Source: http://en.wikipedia.org/wiki/RetailinginIndia
INTRODUCTION: Apparel retailing
In the minds oI apparel customers, where they shop and what they wear are cultural touchstones.
Customers deIine their identities by the stores where they shop and the brands they endorse or
reject. They project their aIIinities, their societal status and their tastes via the clothes they
purchase. However, apparel retailers are conIronting the increased pace and complexity
Estimated Growth in organized Retail (S mn)
Large Segments 1,924 5,024 21
Other Segments 1,315 2,645 15
Non- store retailing 239 422 12
Total Organized retail 3,478 8,091 18
2002 2007 CAGR ()
The 4 Large Segments
Food 391 1,624 33
Chain stores 326 1,462 35
Single large stores 65 162 20
Clothing 1,075 2,266 16
ManuIacturer retailers 293 590 15
Chain stories 315 852 22
Consumer durables 359 822 18
ManuIacturer retailers 141 284 15
Chain stores 98 298 25
Books & Music 97 310 26
Chain stores 54 202 30
Source: Economic Times Retail Knowledge Series
31
impacting their industry and are challenged to emerge with a clear value proposition Ior their
customers. A great deal is changing. The Iocus on Iast-Iashion styles makes accurate, timely
category and merchandise planning an imperative. Missing key Iashion trends means losing
relevancy with consumers. Furthermore, brands today are tiered and nested in each other, Iorcing
the customer to decipher which comes Iirst: the store brand, the label or the garment itselI.
Meanwhile, clothing designers are opening their own branded stores, and even top designers are
broadening their reach and creating oIIers Ior value-oriented retailers. This leaves retailers to
determine which coattails tograb to best diIIerentiate them.
In India, clothing retail accounts Ior 36 oI organised retail business. It is the largest sector.
Ready-made apparel accounted Ior an estimated 20 oI domestic clothing sales in 2007. With
growing working women wearing western wear to work, and pressed Ior time, market Ior good
readymade clothes is likely to grow. India is a Iilm-crazy nation, and the largest producer oI Iilms,
with more than 1,000 every year. They provide entertainment and an escape Irom reality Ior
India's masses, and set the popular Iashion trend. With the advent oI modern Iormat retailers and
the growth oI plastic cards, aIIluent urban Indian women are shopping like never beIore. They
spend mornings browsing in stores looking Ior deals or latest styles. Upper income urban women
are adopting ethnic chic. These are designer clothes that incorporate Indian motiIs, ethnic Iabrics
and are a Iusion oI westernandIndian styles.
In the large urban centres, apparel retailers, like Shoppers Stop, Westside and Pantaloon have
popularised their private labels, which have attracted urban shoppers. Westside carries only its
own private labels, while Ior the other stores, 20-30 oI their apparel turnover is Irom private
labels. Customers have loyalty to a store rather than any particular garment brand. This has led to
a thriving unbranded or local brand market Ior ready-to-wear clothes leading to severe
competition. Hence organized retailers like LiIestyle, Ior instance, has a loyalty programme
called `The Inner Circle', while Pantaloons oIIers a `Green Card' Rewards programmes, Westside
has `Club West' to woo the customers. Customers look to design and Iit oI the clothes, and use the
shop's name as a qualitystandard.
Defining Apparel Market
The apparel retail market consists oI the sale oI all menswear, womenswear and inIantswear. The
menswear sector includes all garments made Ior men and boys. It includes both outer and under
garments. The womenswear sector consists oI the retail sale oI all womens and girls garments
including dresses, suits and coats, jackets, tops, shirts, skirts, blouses, sweatshirts, sweaters,
underwear etc. The inIantswear sector is calculated as sales oI garments Ior children between the
ages oI 0-2 years.
INDIANAPPARELINDUSTRY IMPORTANCE
Retail, India's largest industry is driven by the markets' ability to provide better products in a
comIortable ambience at aIIordable prices. The growth oI large multi-brand apparel outlets is one
result. These outlets are usually 20,000-50,000 sq It in size, have their own parking space, and
separate counters Ior perIumes, accessories, men's wear, women's clothing and children's
clothing. Some stores also have toys, books, home wear, Iootwear and music. Some oI these
retailers have begun to develop private label brands, to supplement their range and improve their
margins. These have become signiIicant brands in their own right. Similar departmental
stores/multi brand outlets are likely to develop into a signiIicant Iormat in the Indian market over
the next decade. Indian consumers are rapidly evolving and accepting modern Iormats
overwhelmingly. Retail Space is no more a constraint Ior growth. India is on the radar oI Global
Retailers and suppliers / brands world-wide are willing to partner with retailers here. Further,
large Indian corporate groups like Tata, Reliance, Raheja, ITC, Bombay Dyeing, Murugappa &
Piramal Groups etc and also Ioreign investors and private equity players are Iirming up plans to
identiIy investment opportunities in the Indian apparel retail sector. The quantum oI investments
is likely to sky-rocket as the inherent attractiveness oI the segment lures more and more investors
to earn large proIits. Investments into the sector are estimated at INR20 25 billion in the next 2-3

years, and over INR 200 billion by end oI 2010. The apparel industry is one oI India's largest
Cotton
(Farms)
1ute/
Wool/
Silk
(Farms)
Polymers
(petroch
emical
Plants)
Man Made
Filament
Extrusion
Process
Other
Textile
Product
Shoppers
Stop
Pantaloons
Westside
Wills
Lifestyle
Marks &
Spencer
Composite
Mills
Stand
Alone
Weaving
Powerloo
m (small)
Ioreign exchange earners, accounting Ior nearly 16 oI the country's total exports. The 1996
Indian textile exports approximately amounted to Rs.35, 000 crores oI which apparel occupied
over Rs14, 000 crores.
It has been estimated that India has approximately 30,000 readymade garment manuIacturing
units and around three million people are working in the industry.
INDIANAPPARELINDUSTRY STRUCTURE
India is a country where almost halI oI the population is below 25 years oI age. It is the second
Iasted growing economy in the world, and its organized retail growing at over 30 percent per year
all the ingredients indicate towards a booming Iashion and liIestyle sector that's so very vital to
keep the growth momentum on.
Arecent study on India's Apparel Market size and values the current Indian Apparel market at
Rs.97174 crore, which is an overall growth oI almost 10 percent over 2008 and is signiIicantly
lower than the 13.6 percent growth achieved during 2007 when the market was valued at
Rs.88,340 crore. Continuing the previous year's trend, the highest growth in volume (8) as well
as value (21) terms was observed in the school uniIorm segment, which shows immense
potential Ior branded players. The women's segment has also grown at a high pace, volumes
(5.4) andvalue (14.9) bothgrowing at a higher rate than the previous year
The Apparel market in India is considered to be comprising oI Iive broad segments mens wear,
33
women swear, unisex apparel, kids wear and uniIorms. Products in the unisex segment cater to all
three major apparel segments in the ratio oI 5:3:1 Ior men's, women's and kids' apparel
respectively. The segment Ior UniIorms is considered separately because it comprises oI both
kids' size apparel as well as general sizing in men's and women's apparel Ior those customers who
are above 14 years oI age.
INDIANAPPARELINDUSTRY SCOPE
The Indian apparel and textile sector has its roots going back several thousand years. AIter the
industrial revolution in Europe, this sector in India also saw growth oI an industrial complex.
However, over the last 50 years the apparel and textile industry in India has shown a chequered
perIormance. The industry contributes around 14 to industrial production in the country, is
estimated to directly employ approximately 35 million people apart Irom the indirect
employment in allied sectors, accounts Ior a about 27 to the country's exports, and is, in sum, an
.
important economic engine Ior the nation
The Indian textiles industry is in a stronger position than it was in the last six decades. The
industry which was growing at 3-4 percent during the last six decades has nowaccelerated to an
annual growth rate oI 9-10 percent and is expected to growat a rate oI 16 percent in value terms
and will reach the level oI US $115 billion (exports US $55 billion; domestic market US $60
billion) by 2012. The clothing and apparel sub-sector are expected to growat a rate oI 16 percent
in volume terms and 21 percent in value terms, and textiles exports are expected to growat a rate
oI 22 percent in value terms, by 2012. Most oI the international brands like Marks & Spencer, JC
Penny, Gap have started procuring most oI their Iabrics Irom India. In Iact, Wal-Mart, who had
procured textile worth $200 million last year, intends to procure $3 billion worth oI textile this
year. The golden phase oI the Indian textile industry has just begun where the world is chasing it
Irom all nooks and corners. Indian textile and apparel industry has now become a part oI global
market with a wide variety oI Iabric and technically skilled manpower. India is the sixth largest
exporter oI readymade garments in the world. Apparel worth 9.7 billion dollars was exported
Irom the country in 2007-08. Due to current global meltdown, there has been a serious layoII oI
workers who were employed in this industry as, the largest importers oI RMGhave been declared
bankrupt.
Some of the major organized apparel retailers in India are as follows-Shoppers Stop,
Westside, Pantaloons,Will's Life Style, Marks & Spencer, Big Bazaar, Vishal Mega mart,
Raymond's.
Shoppers' Stop
Shoppers' Stop was started in 1991 by the K. Raheja Corp. The Company is Pioneer in setting up
large format stores having almost 947,000 square feet of retail space14.6 mn. Customer footfalls
in FY 2007 was over 410,000. Shoppers Stop has positioned it self as First Citi:ens .Special
consideration is given for there store ambience. Shoppers Stop has its own line of clothing

namely Stop, Life, Kashish, JettorioFratini, DIY etc.
Westside
In 1998,the Tatas ventured into retailing ,acquiring the Britain-based LittleWoods retail stores in
Bangalore. Stocks store-owned brands and other brands in the ratio 30.70. Around 95 of West
sides sales came from its in-store brands. Westport, Stone River Classics and Westside.The
Company was renamedTrent Ltd., and the Littlewood stores were renamed Westside. Along with
the LittleWoods Stores, the Tatas acquired the Iirms' warehouse and inIrastructure.. About 90 per
cent oI Westside oIIerings are home-grown, and they cater to diIIerent customer segments. The
other 10 per cent includes toys, cosmetics and lingerie.
Pantaloon Retail India Limited( Future Group)
Pantaloon Retail (India) Limited, is India's leading retailer that operates multiple retail Iormats in
both the value and liIestyle segment oI the Indian consumer market. Headquartered in Mumbai
(Bombay), the company operates over 12 million square Ieet oI retail space, has over 1000 stores
across 71 cities inIndia and employs over 30,000people.
Marks & Spencer (M&S) is one oI the UK's leading retailers, oIIering high quality, great value
clothing, as well as home products and outstanding quality Iood. M&S employs over 75,000
people and has over 600 stores in the UKand over 275 stores in 39 territories around the world.
Wills Life Style
ITC entered the LiIestyle Retailing business with Wills Sport range oI international quality
relaxed wear Ior men and women in 2000. The Wills LiIestyle chain oI exclusive stores later
expanded its range to include Wills Classic formal wear (2002) and Wills Club life evening
wear(2003).
Vishal Megamart : Started as a humble store enterprise in 1986 in Kolkata, the company is
today a conglomerate encompassing 183 showrooms in 110 cities / 24 states .
Raymonds
The Raymond Shop network started with a small corner shop in Ballard Estate, Mumbai around
Iive decades ago. It has grown multiIold with a dedicated team making it the largest retail store in
the country having over 390 stores in prime locations, in over 180 cities in India. Raymonds
overseas network spans 33 stores in 15 plus cities across the Middle East, Saudi Arabia, Sri Lanka
and Bangladesh.
Some of the International Players-
Lee Cooper , Arrow, Pepe Jeans ., Louis Vuitton, Dolce & Gabbana, Tommy HilIiger
Mobd oI Entry Player Stores Target Customer
Franchising United Colors oI Benetton, 160 Stores Kids & DiIIerent Customer
Marks & Spencer, Lacoste across 45 segment
cities
Joint Venture Wal-Mart withBharti, Lee Currently,7 Small Retailers (Restaurant),
cooper & Indus league ltd near NCR Large Format Retailers
Region
51, Single Mango, Nike, Adidas Urban, Fashionable
Brand
(Retail strategybenetton)
35
Public SectorApparel Retailers: - Khadi and Village Industries Commission, Tantuja Bengal
Handlooms, Andhra Pradesh Handloom etc.
During the Xth FiveYear Plan(1997-2002), 30 projects were sanctioned:
States Projects Sanctioned
Andhra Pradesh 4
Gujarat 7
Maharashtra 6
Tamil Nadu 6
Rajasthan 4
Karnataka 1
Punjab and 1
West Bengal 1
These parks will be setup by 2008-09 with an additional investment oI Rs. 15,434.60 crores. The
Integrated Textile Park at Palladam. Tamil Nadu is nearing completion. These parks will
generate an annual production oI Rs. 24,000.00 crores and will create more than halI a million
newjobs.
Supremus Apparel and Textile SEZ at Hindupur, Andhra Pradesh-a recent development oI
Public-Partnership Project in the Apparel Industry-will oIIer various tax beneIits and incentives
to Textile industry.It is been developed by KRaheja Corp, one oI the country's largest real estate
and retail companies,
o|ue Cho|n |n Appore| |ndustr|es- The value chain oI a traditional apparel company can be
broken down into a series oI keysteps as Iollows: apparel Industry Value Chain Segments
Retai outlets
Department
Stores
Specialty Stores
Cotton wool
silk etc.
Yarn
(spinning)
Fabric
(weaving,
knitting,
finishing)
Domestic and
mexicam/caribbean
Brand-named
apparel
companies
Synthetic
fibres
Synthetic
fibres
Asian Garment
Contractors
Overseas
buying offices
Domestic and
Overseas sub
Contractors
Mass merchandise
chains
Discount Chain
Off-rise, Factory
outlet, mail order
others
Trading Companies
Oil natural gas Petrochemicals
Raw material network
Normal Stores
Textile companies
Apparel manufacturers
North America
All retail outlets
All retail
outlets
Figure 1. The apparel value chain
Component networks
Production networks Export networks Marketing networks
US garment factories
(designing, cutting,
sewing, buttonholing,
ironing)
INDIANAPPARELRETAILSTUDIEDTHROUGHPORTER'S DIAMONDMODEL
India's strong perIormance and growth in the textiles sector is aided by several key advantages
that the country enjoys, in terms oI easy availability oI labor and material, buoyant and large
market demand, presence oI supporting industries and supporting policy initiatives Irom the
government.
FDI INAPPARELRETAILING
The largest number oI approvals was oI investments Irom UK (16) and Italy (14), together
representing more than 75 per cent oI the cases and 86 per cent oI the value approved. A Iew
companies have also set up export-oriented manuIacturing Iacilities in India. Some oI the highly
visible names include: Levi's, Lee, Wrangler, Benetton, Peep, Reid and Taylor, Zegna, Arrow,
Louis Philippe, Van Heusen, Lacoste, and Ralph Lauren. FDI in the apparel and textile industry
has been recently opened up, as liberalisation has gathered steam. The number oI FDI approved
between 1991 and 2004 was 641 which amounts to over US$ 1.02 billion. Now, Ioreign investors
can invest up to 100 per cent through the Foreign Investment Promotion Board (FIPB). The
Foreign Direct Investment (FDI) limit oI 24 per cent is removed and the Ioreign investors will be
able to invest up to 100 per cent through Foreign Investment Promotion Board (FIPB). The
obligation oI the Iirms with Ioreign investment to export 50 per cent oI the production is also

removed.
Franchising is the most preIerred method through which Ioreign players enter the Indian retail
market. Similarly, companies such as Hugo Boss have set up distribution oIIices in India and
these oIIices supply products, whichthe company imports to local Indian retailers.
Perhaps the opportunity Ior India is best exempliIied by industries where the government has
permitted FDI such as business process outsourcing where India has just over a 6 global market
share in areas such as call centres and oIIshore administration.
Conclusion
India's sunrise sector is witnessing a major transIormation, unlike the experience in most other
countries, growth oI Indian retail is not going to be a staggered and time-taking process. Ever
newretailing concepts are emerging in various sectors where both urban and rural areas stand to
beneIit. Future developments in organised retailing will result in increased eIIiciency in the
apparel sector by removing intermediaries in the supply chain. While urban consumers beneIit
Irom reduced prices Irom the competition, the retailers and manuIactures beneIit by way oI
higher returns they can reap Irom the national and the own label brands. As a whole, India's retail
sector needs massive investments in technology, eIIicient supply chain, logistics and cold chain
inIrastructure, and that is where investments should precisely come in. As Iar as rhe retail apparel
Support for Technology Upgradation
Government reimburses 5of the interest rates
Acredit linked capital subsidy of 10in addition
to the existing 5 interest reimbursement for
modernising the processing sector
Quality Improvement
Product Development/Design
Cheap and Abundance of Raw Materials
Well developed Textile Machinery Industry
Well developed IT capabilities
Large Domestic Potential
Favourable Demographics
Rising income and Growing
Purchasing Power
Rise of Malls, Organised retail
Low Cost
Flexibility
Skilled Labour
Ability to produce Customized Apparel
Lower Lead Times
Dominated by unorganized sector
Highly competitive and fragmented
Entry of foreign players
Firm Strategy,
Structure and
Rivalry
Govt. Regulations/
Policy
Factor Conditions
Demand Conditions
Related and
Supporting Industries
The Indian Textile Industry- Porters Diamond Analysis
Source: KPMG Analysis
37
sector is concerned the indigenous players need to be more equipped to Iace the Iierce
competition.
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39
Dr. Akhilesh Chandra Pandey `
Mukesh Singh Rawat``

:
*Assistant ProIessor: Department oI Business Management, HNB Garhwal University, Srinagar Garhwal
** Research Asssociate, AICTE Research Project, Department oI Business Management, HNB Garhwal University

Abstract
There has been a significant shift in the focus of
economic policy in India in the last few years, with
issues of equitable growth getting more importance.
Economist and policy makers are trying that economy
should not only maintain the tempo of growth but also
spread the benefits of growth to all sections of the
society and geographical regions of the country. This
change in approach is particularly important for the
hilly regions of the country, as they constantly struggle
with under development. Same circumstances are also
with our newly formed state Uttarakhand. This paper is
an effort to analy:e the various rural intervention
organi:ations operating in Uttarakhand to promote the
products manufactured by various unorganised people
and NGOs.This is a study of Effectiveness of Marketing
Practices adopted by Rural Intervention Organi:ations
in Uttarakhand. The study reveals that the rural
intervention organi:ations has been successful in
bringing women of remote hilly areas into the main
stream of development by organi:ing them into group
and cooperative further involving them in micro
enterprise activities. There has been a remarkable and
visible change in the confidence and leadership level of
the women. They are not only playing an important role
in the economic development of their families but are
equally involved in social and developmental issues.
With enhanced leadership and management qualities
they are capable of accessing financial institutions to
get loan for renovation of their houses, opening
provisional store for their children and selling
vegetables, processed items in the market directly or
through the cooperatives organised by NGOs. The
access to cash has increased their bargaining power at
home as well as community level.
Key words: Input-Intensive Agriculture, Livelihood,
Technical Intervention
'EIIectiveness oI Marketing Practices adopted by Rural
Intervention Organizations in Uttarakhand: Acomparative study oI
HARC & ATI
Introduction: There has been a signiIicant shiIt in the Iocus oI economic policy in India in the
last Iew years, with issues oI equitable growth getting more importance, economist and policy
makers are trying that economy should not only maintain the pace oI growth but also spread the
beneIits oI growth to all sections oI the population and geographical regions oI the country.This
change in approach is particularly important Ior the hilly regions oI the country, as they
constantly struggle with under development. Same circumstances are also with our newly Iormed
state Uttarakhand, separated Irom U P state in 2000, which is among relatively less-developed
Indian states.Uttarakhand which is primarily a mountainous state with only about ten percent oI
its total geographical area in the plains oI the seventeen districts, Haridwar, Udham Singh Nagar
and some parts oI Dehradun and Nainital districts are in the plains, while the remaining areas oI
~Effectiveness of Marketing Practices adopted by Rural Intervention Organizations in Uttarakhand: Acomparative study of HARC & ATI
the state are hilly. Further, with more than three-Iourths (78 percent) oI its total population
dependent on agriculture Ior livelihood, the economy oI Uttarakhand is predominantly dependent
on mountain agriculture. However the scope Ior agricultural policies based on modern input-
intensive agriculture has several constraints in the hilly regions oI this state due to various
physical, geographical and environmental problems. This has resulted in the majority oI the rural
population in the hills either surviving on subsistence agriculture or migrating to other parts oI the
country Ior employment. In the Iace oI such economic backwardness in the rural mountainous
areas non government organizations can play an important role by adopting eIIective marketing
policies and practices Ior marketing oI diIIerent agro and craIt products and giving an
opportunity to populationIor generating remunerative livelihoods at there own.
Marketing by an NGO usually means attracting human and capital resources. NGOs
today use various marketing principles and techniques to inIluence a target audience to
voluntarily accept, reject, modiIy or abandon a behavior Ior the beneIit oI individuals, groups or
society as a whole while in other terms we can say marketing focuses on the satisfaction of
customer needs, wants and requirements. The philosophy of marketing needs to be owned by
everyone fromwithinthe organi:ation. Future needs have to be identified and anticipated.
Uttarakhand, in spite oI being a small state, has certain key Ieatures that make it distinct
Irom other states oI the country and highlights its potential Ior development. However,
development has predominantly been in the plains, and the hill districts have been leIt behind, in
our study we will pay more attention on the eIIectiveness oI marketing policies adopted by rural
development organizations in hilly areas. All the hill districts have subsistence Iarming as their
main economic activity. Due to subsistence livelihood, migration and a remittance economy
Operate in the hill districts. They are land-locked with huge distances between the Markets and
resources, because oI these constraints, traditional agriculture cannot be the lead sector Ior
development. Thus the state Iaces the challenge oI promoting Livelihoods to minimize migration
through local employment and income generation, and to enhance the quality oI liIe oI people
living in villages. DiIIerent rural interventions organizations who are working Ior increasing the
livelihoods oI villagers through inIrastructure development, tourism promotion, agriculture
diversiIication, poultry wool-based livelihoods, Iorestry, Iishery, mining, handicraIts are

RATIONALE OF THE STUDY
Researchers Irom diIIerent regions had identiIied marketing policies and practices adopted by
various public and private sector organizations. This study draws an attention towards the
eIIectiveness oI marketing policies and practices adopted by rural interventions organizations in
the Uttarakhand as they are perIorming in the state Ior the last many years withdrawing
signiIicant monetary Iunds Irom the state and central government. For eIIective marketing
practices an organization has to understand diIIerent marketing policies which itselI are complex
one with multiple trajectories by which an organization engaged in the marketing oI products can
reach to its ultimate goal. The proposed study will also examine the IruitIulness oI diIIerent
NGO'S in the state and policy priorities that can enable the state to achieve inclusive growth.

important sectors which can play a signiIicant role in Uttarakhand's economy not only in
providing employment to a vast segment oI craIt persons in rural and urban areas but also in terms
oI generating substantial Ioreign exchange Ior the country.
The problem which is Iaced by this Iield is non availability oI a developed market;
NGOs can do this thing in a better way by designing a proper marketing mix oI Product, Price,
Place,and Promotion Ior them. This will enable the artisans to achieve better returns Ior their
product besides creating productive employment in rural areas. However, villagers and rural
population is not that much, literate and mainly comes Irom remote and rural areas do not get
adequate opportunities to access the domestic /international high end markets. To enhance their
access rural interventions organization can implement marketing support & services schemes Ior
domestic marketing and export promotion scheme Ior international marketing, by domestic
Marketing, International Marketing, and Publicity.
41
Review of Literature:
Richard Ingwe, (2009) ~The urgency of improving good governance and participation in
the state economic empowerment and development strategy It was concluded that process
has inception in 2004-2005 systematically excluded key 'publics and stakeholders in civil
society, NGOs, Iaith organizations, private sector and communities thereby preventing them Irom
participating in and determining the actions that are capable oI Iacilitating their empowerment:
reducing poverty and unemployment and promoting economic growth and value re-orientation.
The exclusion oI stakeholders has been perpetrated by government Iunctionaries and violates the
new global paradigm oI development planning that emphasizes participation. The consequence
oI this poor approach has been the dismal perIormance oI, which Iailed woeIully to cause
observable, experiential, statistical or quantiIiable improvements in the state's economy under the
multiple sectors Ior which policy thrusts, targets, strategies and Iunding Ior implementation were
set at the outset oI the plan. The exclusion oI competent civil society Irom consultations resulted
Ingwe 043 in the rather narrow conception oI the 7-point agenda oI the state government, which
lacks an all-inclusive multicultural strategy Ior reducing poverty and unemployment.Thokozani
Ian Nzimakwe (2008) ~South Africa's NGOs and the quest for developmentThe study
concluded that NGOs are increasingly recognized as an important role-player in community or
people-centered development. They are a large category oI structures responsible Ior
development. NGOs have oIten been viewed as important Ior democracy because oI their strong
support at grassroots level and their capacity to develop and empower poor communities. They
are extremely important mechanisms in rural development and they enjoy the goodwill and
acceptance oI the community. ThereIore NGOs have become very important players in the Iield
oI social development and upliItment. The democratization oI South AIrica has opened new
opportunities Ior NGOs to make a meaningIul contribution to the development oI South AIrican
society. This is particularly so at grassroots level. The primary aim oI NGOs is to improve the
living conditions oI people through development in general. This entails various aspects oI
human liIe, such as literacy, human dignity, justice and economic ability, essentially the joy oI
liIe. This paper attempts to address questions such as what is meant by development, what role
have NGOs previously played in the development process, and lastly what role should they be
playing.
Kumar Anant (2007). ~NGOs in Bihar: Voluntary sector and its credibility International
NGO 1ournal This study is based on the Iield visits, and interaction with over Iour hundred
NGO's representatives, staII and Iunctionaries in Bihar. He concluded that NGOs have lost their
credibility in people because they are not consistent, transparent, honest and accountable to their
work being done. Despite the recent cancellation oI the registration oI hundreds oI 'Iake non-
government organizations (NGOs) in Bihar, a large number oI people, including those belonging
to Naxalite outIits, have made a beeline Ior getting their new organizations registered.
Interestingly, people belonging to various Naxalite outIits and women activists top the list oI
those who have set up their NGOs in diIIerent parts oI the state. Transparency and sharing
inIormation and knowledge is a best way to build credibility which helps in building the
intellectual base oI the NGO, and its ability to articulate the views oI the people it is speaking Ior.
There is no Iix set oI guidelines Ior NGOs, which we have Ior other sectors like government,
corporate and other institutions. Nidhi Srinivas (2006) ~NGO advocacy and marketing:
Handloom weavers in India Presented in the Milano:She concluded that the handlooms
policies Irom the start mandated the establishment oI cooperative societies as an implementation
mechanism. Cooperatives have a long history in India. The logic Ior their creation was a dual one,
oI representation and eIIiciency. Governed by member-elected boards they had the potential to
represent membership accurately; at the same time they oIIered a ready target Ior governments
eager to assist local communities (Baviskar & Attwood, 1996). Funds to a cooperative would
reach members and their community. Thus weaver-cooperatives became crucial to the Indian
Government's policy goals, as a means oI reaching weaver communities across India, assisting
them in learning new techniques and helping them sell their products.Tahirou Abdoulaye and
1ohn Sanders (2005) ~New technologies, marketing strategies and public policy for
traditional food crop New technology introduction in this semiarid region oI the Sahel is
hypothesized to be made more diIIicult by three price problems in the region. First, staple prices
collapse annually at harvest. Secondly, there is a between year price collapse in good and very
good years due to the inelastic demand Ior the principal staple, millet, and the large changes in
supply Irom weather and other stochastic Iactors. Thirdly, government and NGOs intervene in
adverse rainIall years to drive down the price increases. Marketing strategies were proposed Ior
the Iirst two price problems and a public policy change Ior the third. To analyze this question at
the Iirm level a Iarm programming model was constructed.Amy Coen and Chris Dunfo( 2005)
~The Working Group on Evaluation and Program Effectiveness InterAction They studied
that with the 'The Working Group on Evaluation and Program EIIectiveness Interaction'. They
Iocused on the criteria Ior success in bringing about meaningIul changes in terms oI its mission
and major program goals. They also recommended that regularly evaluation oI progress towards
such success is very mandatory & mainstream monitoring and evaluation in policy, systems and
culture is also a part oI evaluation and program eIIectiveness interaction.Anara Alymkulova&
Didara Seipulnik,(2005).~NGO strategy for survival in central Asia financial
sustainability He studied on the topic 'NGO Strategy Ior survival in central Asia: Financial
sustainability'. The most sustainable Iinancing strategy is to diversiIy income sources. A
sustainable approach to NGO Iinancing is one that avoids dependency on any single source oI
revenue, external or internal. It is diIIicult to determine a Iormula Ior the percentages that need to
be derived Irom various sources in order to support a 'Iinancially sustainable NGO. However, a
balance between externally and internally generated resources is necessary to allow an
organization to meet its operating and administrative expenses while maintaining the Ireedom to
determine its program priorities and projects, irrespective oI donor preIerences.Gaby Ramia
(2002) ~International NGOs and global social policyISAxv world congress of sociology:
He studied the partial globalization oI the social policy is seen in the growth in importance oI
welIare programs emanating Irom super national and global government and non-govt
institution yet while there is literature Irom within the social policy research community on the
international institution response to the poverty and increasing inequality oI world resource
development relatively little appreciation is given to the importance oI the re-design oI
organization management. Michael Edwards & David Hulme (1995)~Scaling up NGO
ImpactsIt was concluded that Iundamental requirement Ior successIul inIluencing is a degree
oI openness on the part oI the organization that is being lobbied. II this is not present, no amount
oI inIormation or experience-sharing will induce changes in the system. For the majority oI
British development charities, however, there is no escaping the linkage between practical
experiences and inIluencing, Ior it is their practice base which generates the themes and the
evidence (and thereIore the legitimacy) Ior their related, but subsidiary, inIormation and
education work. However, as the role oI northern NGOs changes in response to the growing
strength and range oI southern development institutions, this linkage will become less directly
controllable by the northernagencies themselves.
Objective: The Broad objectives oI the study are to examine the various marketing strategies
adopted by non-governmental organizations in marketing oI diIIerent products and study the
potential growth and perIormance oI rural markets in Uttarakhand.There is also an attempt to
study the Government policies Ior promoting NGO's Ior marketing the diIIerent products
manuIacturedbySHGs.
Research Methodology
The respondents Irom various NGOs have been considered as the population Ior data collection
in this study. The units being studied in this case has been two rural interventions organisations in
Uttarakhand state only. The extent oI universe in this study was especially rural and hilly areas oI
the state. The total sample size oI the proposed study is two major NGOs, Irom operating in
districts Pauri,Tehri, Rudraprayag, Chamoli, Almora and Bageshwar oI Uttarkhand Irom where
the responses were taken Ior conducting the research.These regions are marked with diversity in
43
the context oI language, literacy level, customs, liIe styles and economic growth. This
heterogeneity holds many implications to the marketers especially to those who want to study the
decision making aspects oI rural consumers. ThereIore, the selection oI these areas represents a
true perspective Ior the proposed study.
Data Collection: The data has been collected through questionnaires. A structured
questionnaire have been designed to Iind out responses Ior eIIectiveness oI marketing policies
and practices adopted by rural intervention organizations in Uttarakhand. The sources oI
secondary data include Internet, magazines, journals and books Irom various concerning
libraries and registrar oIIice oI NGOs in Uttarakhand.
Technical Intervention forLivelihood
One oI the key thrust areas oI HARC is technical intervention Ior increasing agriculture
production, Iood and economic security and Ior ensuring livelihood Ior rural poor. Agriculture is
the main source oI livelihood in the hills. For sustainability in production oI agricultural produce
and to address the problems oI low productivity and lack oI technical knowledge, HARC
provides technical support during pre-cultivation, cultivation and post-cultivation period to the
Iarmer interest groups and their Iederations. High quality production, diversiIication oI crops,
organic Iarming, promotion oI rural technology, conservation and propagation oI traditional
local seeds and value addition to local products are the major areas oI Iocus under technical
interventionIor livelihood promotion.
HARCpromotes organic Iarming in the hills by building the capacities oI the Iarmers in the areas
oI organic Iarm planning, organic documentation, internal control system (ICS), Iarm mapping
system, training and demonstration on techniques oI organic Iarming like- vermi-compost,
NADEP, liquid manure, wormi wash. HARCis Iacilitating the process oI organic certiIication oI
900 hectares oI agricultural land oI more than 4000 Iarmers in districts Uttarkashi, and Chamoli.
DiversiIication in production oI cash crops as well as the traditional crops is being promoted to
increase the income oI rural households. For this HARC emphasizes on annual crop cycle and
Iarm planning, development oI production zones, introduction oI variety oI crops, propagation oI
traditional local seeds and development oI common Iacility centres to provide technical
assistance.
HARC organises trainings, demonstrations, interIace events between Iarmers and scientists, Ior
disseminating advance agricultural techniques to promote scientiIic and healthy agricultural
practices. The major agricultural techniques promoted by HARC are - integrated pest
management (IPM), conservation oI traditional seeds, polyhouse technology, plant protection,
soil conservation, iron wire staking, nursery raising & orchard management etc . HARC also
Iacilitates the linkage building between Iarmers and diIIerent technical institutions, agri-input
service providers and technical experts to ensure the regular availability oI agri-inputs and
technical knowledge to Iarmers.
More than 10,000 Iarmers have been beneIited in the region through extension services oI
HARC. A cadre oI para technicians (Bare-Ioot Scientists) developed by HARC have been
instrumental totake the mission Iorward.
Majorinitiatives of rural interventions in Uttarakhand by HARC
Livelihood Promotion through self-help Group
One oI the core practice areas oI HARCis promoting and sustaining rural livelihood Ior the local
poor through agri and agri allied activities. HARC has developed and diversiIied the livelihood
scale according to the needs oI people and availability oI resources in the region. HARCprovides
technical support Ior high quality agricultural production and business development services to
local people Ior the promotion oI agri-based enterprise. These interventions are being carried out
by Iorming and strengthening community based institutions and their Iederations in rural areas.
The collective approach has also helped in creating a niche in the local and national market Ior
45
agri and agri-based products oI hill-region.
Promoting good governance
HARC's concept oI promoting good governance is, that the institutions Iormed under
constitutional act (institutions Ior local selI-governance) should be strengthen in such a way that
they act as strong, active and eIIective institutions oI local development and provide a platIorm to
citizens Ior articulating their voices, concerns, priorities, problems and issues, which are directly
and indirectly aIIecting their liIe. This means, promoting transparency, responsibility and
accountability among these institutions by increasing the leadership qualities, awareness,
knowledge and Iunctional skills oI elected representatives as well as oI common villagers. Under
this theme HARC is working Ior strengthening Panchayati Raj Institutions in rural areas and
urban local bodies in urbanareas.
Farmer's Crower's FederationsReorganized As Producer's Company : HARC has registered
two grower's Iederations under Producer's Company Act. Devrana Valley Fruit & Vegetable
Grower's Association, earlier registered under Society Registration Act, registered as 'Devrana
Jalley Fruit & Jegetable Producer Company Pvt. Ltd. Another Iederation known as Aromatic
Plant Grower's Association, consists oI 140 growers engaged in cultivation oI Lemon Grass,
Marigold & Citronella in Sahaspur block oI Dehra Dun district, has been registered as 'Pachawa
Doon Agri & Aromatic Producers Company Pvt. Ltd. HARC, helped in reorganizing the
production, processing, marketing strategies and internal management system oI newly Iormed
producer's companies. During the whole process HARChas extended its support to the Iarmers in
preparing the by-laws oI both the companies and organized orientation workshops on the
company related internal management system. Both the companies are gradually strengthening
their internal systems, production and marketing management according to the company
regulations. The unique Ieatures oI this model are that only a grower can become a member oI this
company and its proIit cannot be disbursed among its members, but it will be used only Ior the
capacity development and providingservices to its members.
Freedom from Mediators through Cash Credit Limit (CCL)
Fruit & Vegetable Grower Association, Purola, encouraged by HARC, has more than 200
members. These members are organized as FSHGs at village level. For last 3-4 years association
has been engaged in providing services to its members in production and marketing oI agriculture
produce. The association has developed its linkages with Mother Dairy and Okhla wholesale
market oI Delhi. The association has also done networking with diIIerent technical institutions
and agri input suppliers to provide technical inIormation, seed, manure, pesticides and other agri
inputs to its members Ior the quality production. In this area the middlemen have a strong network
oI their agents and some Iarmers are still under inIluence oI these middlemen. The agents oI the
mediators in the villages get the commission Irom the payment oI villagers and this management
makes the Iarming less proIitable Ior Iarmers. The cultivation oI Pea crop is higher in this region.
But due to lack oI other option, the Iarmers were getting seed Irom these middlemen on their terms
and conditions. To get rid oI this system oI mediators the association, with the motivation oI
HARC, prepared a strategy to get its members Iree Irom the clutches oI middlemen. The
association developed its direct linkages with seed companies and was successIul to make them
agree on providing quality seeds to the association. The companies started providing pea seeds to
the Iarmers but due to unavailability oI money on time Iarmers were still dependent on the
mediators.In this regard, HARCIntervention has made the Iarmers Iree Ior the marketing oI pea
on their own terms andcondition and no more dependency on mediators
Employment opportunities by cultivation of aromatic plants with support of National
Medicinal Plant Board
Aromatic and medicinal plant cultivation was initiated by HARC this year Ior the Iirst
time with support oI NMPBin district chamoli with an aim to increase the livelihood and income
earning opportunities in the area. The program Iocuses on increasing the production oI Mint,
Tulsi, Anardana, Amla in the area and providing value addition techniques so that the products are
sold in the market at good price.
In the Iirst stage oI the project the production oI Japani Mint has been initiated in 2
hectares oI land with 46 Iarmers. The production oI Rama, Shyama and sweet vessel Tulsi had
been initiated in 3 hectares oI land with 210 Iarmers. The training on package oI practices was
organized so that the Iarmers could have the technical knowledge about the production. In
villages Umatta, Hadakoti and Kaleshwar the work is being done by the members oI the SelI Help
Groups at community level.A distillation plant has been installed at HARC`s community
Iacilitation center at Kaleshawar value addition to the produce. This plant is used to extract Tulsi
and Mint oil. The products are dried by the drier and with the help oI SHGs Mint and Mint Tea is
be prepared. This helped inincreasing the employment opportunities Ior the Iarmers.
Procurement and Supply Chain Management
Procurement and supply chain management is one oI the important components oI agri
business. For proper planning and strengthening oI the management oI procurement and supply
chain, HARC Iacilitated and build the capacities oI Ranwai Valley Autonomous Multipurpose
Cooperative society, Iruit and vegetable grower associations oI Naugaon, Purola and producer's
company oI Dhari KaInaul. These interventions aimed at Iacilitating well-planned procurement
and quick supply oI the product Irom the intervened area. Under this process, the Iarmers
associations, women cooperative and producer's company were provided help to prepare their
procurement plans. As a Iollow up oI procurement plan the Iacilitation was provided Ior
marketing oI the surplus produce as estimated by the target groups to the local and New Delhi
wholesale (mandi) market. The Iollowing steps were taken to strengthen the procurement chain.
Procurement and Supply Chain of Fruits & Vegetable produce

47
Procurement and Supply-Chain of Cereal, Grain, Pulses and ValueAdded Product
For ensuring production and supply oI agriculture produce according to market demand, a Iace-
to-Iace interaction between National Dairy Development Board (NDDB) and members oI Iour
Iruits and vegetables grower association was organized in May 2007 at ward level. During this
interaction a procurement plan was prepared and market was ensured to the producers by
developing marketing linkages with marketing agencies such as NDDB and other local and
national Mandies.
HARCprovides a platIorm to Buyers and Sellers by organizing Buyer Seller meet to Iacilitate the
Iresh Iruits and vegetable supply chain.
The Iacilitation Ior organic Iood supply chain was done Ior Rawain Women Cooperative,
which is involved in trading oI Iood grain, spices and millets. Through this Iacilitation women
cooperative got an opportunity to do negotiations with buyer on their own. The cooperative
collected the products Irom its members and sold it in the market. This Iacilitation resulted into
the huge sale oI chillies, Rajma, Amla Candi and Anardana.The Cooperative has identiIied
export companyIor supplying oI Anardana and Chillies also.
Farmers getting millions of rupees by marketing of fruits and vegetables through
organized supply chain
Under the livelihood promotion mission, HARC made its eIIorts to link the Iarmer
directly to the market so that they can control the supply chain themselves through their
Iederations. As a result oI this a strong supply chain and multi optional marketing channel is
available to producers. During year 2007-08 the producers oI Ranwai Valley had sold 31080 tons
oI Iruits and vegetables worth INR318.3405 millions.
Market promotion for the products of women cooperative
Market promotion is one oI the most important tools Ior ensuring marketing oI products
oI groups at village level. HARC has organized various promotional activities Irom time to time
Ior product presentation and penetration in the market. This year, under the product promotion
strategy, the main concentration was on household and institutional level marketing oI products.
At institutional level such institutions were who have a positive attitude and understanding
towards rural economic development. Direct delivery oI products to customer at household level
was started with a target oI covering 300 households in Dehradun at initial stage. Seeing the
encouraging response oI the customer, it is being planned to increase household coverage upto
1000 household in next year. This year cooperative introduces a giIt pack on the occasion oI

Deepawali Iestival. This giIt pack was marketed at the household level, in the retail shops, and at
government and non-government institutions by organizing promotional activities during the
Iestival oI Diwali.
Significant Achievement of HARC:
The major achievement oI HARC is increased capacities oI the institutions at Iinancial and
administrative Ironts. These institutions are nowcapable oI managing their internal systems
and Iinancial processes eIIiciently. The documentation system has become strong and some
Iederations have taken the initiatives to prepare their annual report. Internal and external
audit oI the institution is being done. The responsibility oI management oI the Gravity Based
Ropeway that was constructed last year with support Irom oIIice oI Principal ScientiIic
Advisor, Govt. oI India and Indian Institute oI Technology, Roorkee has been owned by the
association. The association is maintaining the ropeway Iunctioning very well.
The institutions have now access to various types oI inIormation such as bank schemes,
agriculture techniques etc. Increased access to loan has reduced the exploitation oI Iarmers at
the hand s oI middlemen. People nowtake loan Ior purchasing seeds and are then Iree to sell
the product tothe customer oI their own choice.
The signiIicant change in the attitude oI members oI the institutions towards social security is
an achievement. The constant eIIorts oI HARC to sensitize and encourage the members oI
the institutions Ior spending some money on their social security was successIul to some
extent. More than 2000 members oI diIIerent institutions have taken liIe insurance, health
insurance and accidental insurance policies this year. This also proves that the economic
status oI the people has increased as they are investing money Ior their social security.
HARC has been successIul in bringing women oI Rawain and Alaknanda valley into the
main stream oI development by organizing them into group and cooperative and involving
them in micro enterprise activities. There has been a remarkable and visible change in the
conIidence and leadership level oI the women. They are not only playing an important role in
the economic development oI their Iamilies but are equally involved in social and
developmental issues. With enhanced leadership and management qualities they are capable
oI accessing Iinancial institutions to get loan Ior renovation oI their houses, opening
provisional store Ior their children and selling vegetables, processed items in the market
directly or through their cooperative. The access to cash has increased their bargaining power
at home as well as community level.
Knowledge building oI men and women on various aspects oI Iarming has been the biggest
achievement oI HARC. Increased technical knowledge and enhanced skills in scientiIic
Iarming which includes plant protection, organic Iarming, quality control, pre and post
harvesting technologies, crop cycle planning, best Iarm practices, seed and other agri inputs
management etc. resulted into better utilization oI available resources especially optimum
and scientiIic use oI agricultural land. Due to lowproductivity oI traditional crops about 30
agricultural land remained barren with out cultivation oI any crop. With the use oI new
Iarming technologies and proper crop cycle planning this 30 barren land is converted into
productive land. This has increased the production that leads to increased Iood security and
cash income oI the Iamily.
The major change can be seen in the Iarming methods adopted by the Iarmers. Earlier
Iarmers were able to take one or two crop cycle but now proper Iarm planning most oI the
Iarmers is getting 3-4 crops in a year. The various newvarieties oI Iruits, vegetables, spices,
Iood grains introduces by HARCin the region this year which has brought diversiIication oI
crop and created various options Ior livelihood and increased Iood security. The increase in
production oI Iood, grains and vegetables. The producers aIter their home consumption are
selling surplus produce to the market. Thus providing Iood security and also economic
security to the people. Due to diversiIication the local people have now more sustained
49
livelihoodoptions.
HARC' has been successIul in increasing the production and Iood security through technical
interventionin RawainValley.
The processing oI rawIruits and vegetables has been taken as a mission to increase the shelI
liIe oI the products and to provide an option Ior income generation Ior women. Earlier
without value addition techniques the highly perishable Iruits and vegetables were available
only in the season. But nowwith value addition the Iruits and vegetables are available in the
Iorm oI processed items round the year Ior selI-consumption and Ior marketing. The best
part is that the income earned by the selling oI these products is coming in the hands oI
women thus increasing their access to direct cash.
One oI the biggest achievements oI HARC is increased area oI organic Iarming. On one
hand organically produced crops are contributing to the health oI the soil and protecting the
environment Irom pollution by organic Iertilizer and pesticide, on the other hand healthy
Iood is available topeople.
Breaking the nexus between market agencies and middlemen and Ireeing the Iarmers Irom
the clutches oI the middlemen is the major success oI HARC. This has helped to reduce the
exploitation oI the people to a great extent and now the Iarmers have direct access to the
market. This resulted into increased IlowoI money towards Rawain Valley.
Good quality oI production and Iarmer's direct access to market through well managed
supply chain has improved the Ilow oI money in the region. Earlier due to dependency on
middlemen Ior the marketing oI produce the Iarmer used to get the money aIter 2-4 months.
Now due to well-established and transparent system oI procurement and supply chain, the
Iarmers are getting money Ior the sale oI their produce within 10-15 days. ThereIore
Iinancial losses due to delay in payment has been minimized. This has led to increase
purchasing power oI the people.
The strength oI HARC is its strong linkages with 51 institutions like agri-input supply
companies(seeds, Iertilizers, packaging material), technical institutions, agricultural and
horticultural universities, marketing institutions, training institutions, central and state
government institutions, Iinancial institutions etc. within and out side the state. This network
oI institutions is a very strong base oI HARC Ior promoting agricultural diversity at one
place, which has been done nowhere in Uttrakhand
Taking Right to InIormation at grass root level is one oI the achievements oI HARC. The
special eIIorts Ior manual preparation under section 4 (1) (b) oI RTI were initiated by HARC
at Panchayat level. HARCcould reach more than 5000 people who were educated on various
provisions oI RTI. As a result many people Iiled application to get the important inIormation
Irom various departments.
HARC`s intervention Ior strengthening the role oI panchayati raj institutions in
implementation oI National Rural Employment Guarantee Scheme were recognized at grass
root level as well as state level. The major Iocus on initiation oI perspective planning in some
panchayats Ior model building. This initiative was recognized at district and state level.
HARC was also successIul to raise some oI the very important issues related to smooth
Iunctioning oI NREGS at state level through advocacy workshops and Iace to Iace
interaction between panchayat representatives, citizens and state level concerned authorities
Appropriate Technology India
Appropriate Technology India's Goals
Expanding local capacity to harvest, process and market Non-Timber Forest
Products - oak tasar silk, honey, bamboo and rajma.

Strengthening community-based conservation and development institutions like Van

Panchayats, Mahila Mandal Dals, SelI Help Groups.

Providing ecologically sound, productivity enhancing, cost-eIIective technologies,
training and services Ior sustainable enterprise development.

Creating income and employment opportunities Ior thousands oI mountain villages
in Uttarakhand.

Conducting biological and socio-economic research and monitoring.

Providing Iinancial and insurance services to meet community needs through
microIinance.

Conserving biodiversity through action research, participatory monitoring. oI natural
resources and plantation programs.
The above range oI activities requires a suIIicient range oI skills and expertise to execute
them. In most oI the livelihood sub-sectors that the programme is involved, AT India initiatives
have invariably been the Iirst oI their kind in Uttarakhand. This means that the organization is
today a repository oI skills and expertise that are unique and not easily replaceable. Currently ATI
has 76 persons on its permanent pay roll. About 95 oI the staII comprises oI home-bred
Garhwalis, ascribing it a distinctlylocal identity notwithstanding its broad global vision.
450 Iar-Ilung villages bounded by the mighty Himalayas, typiIy the poverty and
hardship that characterizes most mountain villages oI India. But a closer look reveals a
heartening phenomenon. These remote villages have been integrated into a unique community
owned enterprise, creating alternatives to a subsistence economy, where there were none. The
result being- villagers producing premium Iinished products like tasar silk and organic honey Ior
distant high-end markets; them hosting urban tourists in their quaint village homes; highland
villages Iully commercializing dairy operations. All this in tandem with protecting their
biodiversity.
AT India initiated its livelihood diversiIication programme 14 years ago in 1994. It
commenced operations in the sericulture and bee-keeping sub-sectors by adding economic value
to the available oak leaves, diverse nectar and pollen rich herbs and shrubs, in the project area.
Currently, AT India has 5 livelihood sub-sectors under its ambit (viz. sericulture; bee-keeping;
dairy development, eco-tourism, and dwarI bamboo) with roughly 7926 beneIiciaries. ATIndia's
approach to livelihood development is not merely to provide local communities with income
generatingopportunities but also toenable them to consistently increase their incomes.
AT India's livelihood programmes are conceived with a conservation dimension to ensure
synergy between their economic and ecological principles. By building the villagers' economic
stake in their surrounding Iorests and natural resources, AT India has revolutionized community
perspectives on the use oI these resources. Although, the project has not reached the stage where
measurable impacts through reduced levels oI extraction can be claimed yet the substantial
regeneration work being undertaken with the help oI the local communities is an indicator oI their
shiIt in perception. AIar sighted approach towards natural resources is Iurther evident through
the large number oI saplings being planted on private lands under AT India's nurseries and
plantation programme
Significant Achievement of ATI:
Biodiversity Conservation Network: ATIndia took the lead in establishing, commercially
viable oak tasar sericulture through village based enterprises. Since its inception 15 years ago, AT
India has developed a range oI novel livelihood activities enabling steady returns to beneIiciaries
51
who nownumber approximately 7926, generating beneIits oI around 20 million INRper annum.
Thus, what started as a biodiversity conservation project in 1994, with the mandate to
develop an enterprise based model Ior conservation, has evolved into a vibrant livelihoods
diversiIication and skills development programme. Even so, it has remained true to its original
ideal oI biodiversity conservation. The Iorest-based enterprises developed under the programme
exempliIy AT India's vision oI economic security Ior local Iorest-dependent communities.
Simultaneously the improved community perceptions oI their natural resource base, along with
the apparent health oI the project area Iorests, demonstrate its IulIillment oI the sustainable Iorest
resources use ideal.
Today ATIndia is acknowledged to be at the IoreIront oI innovation in the development
strategies, both in the context oI livelihood development and conservation, in the Western
Himalayas. It's strategy oI raising value oI existing resource base to enlist community
participation in the conservation eIIorts, on this wide a scale, has perhaps been tested Ior the Iirst
time in India.
Self Sustainability: In a bid to decentralize its operations and make them selI-sustainable, AT
India, Irom its early years, organized its production activity into community owned enterprise.
Currently, AT India works in alliance with two other entities that have evolved Irom its main
programs, andhave complementary but distinct roles:
Devbhumi Natural Products Producers Company Limited (DNPCL) Iounded in 2007, has
been designated to provide product development and production management services in the
non-organized rural sector and establish linkages with main stream markets. It comprises oI the
p r o d u c e r s , wh o a r e t h e a c t u a l s h a r e - h o l d e r s o I t h e c o mp a n y.
Ushamath Mahila Mahasangh (UMM) Iounded in 2005, is a micro-Iinance institution in the
cooperative sector apart Irom being the apex body oI the 729 women SHGs Iunctioning under the
project. It works as a community owned, managed and controlled MFI, oIIering credit and micro-
insurance services not just to its 7617 women members but thousands other in rural and semi-
urban areas oI Uttarakhand.
AT India is leIt with the primary role oI developing technical skills and local capacities
Ior production oI goods and services at the community level. Alongside, it also seeks to pursue
program relatedresearch and conservation initiatives
The presence oI the above two enterprises is expected to play a signiIicant role in
ensuring the long-run viability oI AT India's projects even aIter its withdrawal.
AT India's future Plans: Projects in the pipeline include expanding Business Development
Services and Value Chain integration operations in 2 sub-sectors, dairy and bee-keeping along
with assessing the potential oI introducing two new sub-sectors- selected spices and citrus, Ior
which Uttarakhand has both comparative and competitive advantages. The project has been
started to use a market driven strategy based on value chain analysis and development oI business
development services markets in the respective sub-sectors. This model has already been
successIully employed by AT India in the dairy, beekeeping and sericulture sub-sectors. The
project planned over three years will create and Iacilitate income opportunities Ior 8000 client
households in remote villages oI the Himalayas. It is anticipated that 70 oI the clients are
women.
Appropriate Technology India -Business Development Model
To attain economic security under its various livelihoods activities, AT India adopted a Value
Chain or Business Development Services approach. This strategy is being implemented in a
number oI economic sub sectors including the sericulture value chain oI oak tasar and eri silk;
beekeeping and honey processing, dairy development, dwarI bamboo, eco-tourism and other
organic commodities. The BDS model involves the Iollowing:
Organization oI the community into entrepreneurial groups, to capture and generate
economies oI scale;
Training entrepreneurs to act as commercial technology transIerors at the community
level thereby providing incentive Ior input services to enhance the production and
productivity;
Creating provision Ior establishing stand alone output services Ior collection,
distribution and marketing services; and
Linkingproducer groups with Iinancial services.
This strategy has multiple long term implications as AT India in the long-run wants to graduate
Irom the organizational aspects oI production, processing and distribution and Iocus only on
upgrading technology and establishing market linkages.
Conclusion: The major achievement oI these rural intervention organizations are their
increased capacities oI the institutions at Iinancial and administrative Ironts. These institutions
are now capable oI managing their internal systems and Iinancial processes eIIiciently. The
institutions have started to empower the rural people with various types oI inIormation such as
bank schemes, agriculture techniques etc.More inIormation and increased access to loan has
reduced the exploitation oI Iarmers at the hands oI middlemen. People now take loan Ior
purchasing seeds and are then Iree to sell the product to the customer oI their own choice.The
consistent eIIorts oI these rural intervention organizations have become successIul to sensitize
and encourage the members oI the institutions Ior spending some money on their social security.
More Rural people have started taking liIe insurance, health insurance and accidental insurance
policies too. This also proves that the economic status oI the people has increased as they are
investing moneyIor their social security.
These rural intervention organizations have become successIul in bringing women oI t hi s
state into the main stream oI development by organizing them into group and cooperative and
involving them in micro enterprise activities. There has been a remarkable and visible change
in the conIidence and leadership level oI the women. They are not only playing an important
role in the economic development oI their Iamilies but are equally involved in social and
developmental issues.
Knowledge building on various dimensions oI Iarming has been the biggest achievement oI
these interventions. Increased technical knowledge and enhanced skills in scientiIic Iarming
which includes plant protection, organic Iarming, quality control, pre and post harvesting
technologies, crop cycle planning, best Iarm practices, seed and other agri inputs
management etc. resulted into better utilization oI available resources..
The major change can be seen in the Iarming methods.The various new varieties oI Iruits,
vegetables, spices, Iood grains introduces diversiIication oI crop and created various
options Ior livelihood and increased Iood security. The producers aIter their home
consumption sell surplus produce to the market. Thus providing Iood security and also
economic security to the people. Due to diversiIication the local people have now more
sustained livelihood options.
These rural intervention organizations have been successIul in increasing the production and
Iood security through technical intervention in the state.The technical interventions Ior
increasing livelihood options brought a change in the liIe oI rural people and they have
adopted systematic and scientiIic ways oI Iarming. With the use oI newIarming technologies
and proper crop cycle planning 30 barren land has been converted into productive land.
This has increased the production that leads to increased Iood security and cash income oI the
Iamily
53
References:
AnaraAlymkulova & Didara Seipulnik (January2005).'NGOstrategy Ior survival in central
Asia Iinancial sustainabilityTheWilliam Davidson institute.
Bora, R.S. (2000), 'Arresting Out-migration: Some Policy Considerations Ior Uttaranchal,
The Indian Journal oI Labour Economics, 43 (2).
Bajracharya, D(1992), 'Institutional Imperatives Ior Sustainable Resource Management in
Mountains, in N S Jodha, M. Banskota and T Partap (eds), Sustainable Mountain
Agriculture, Vol. 1, OxIord andIBHPublishing Co., NewDelhi, 205-234.
Dr.Anant Kumar (2007). 'NGOs in Bihar: Voluntary sector and its credibility International
NGOJournal Vol. 2 (4), pp. 82 84.
Fayez A. Simadi1* and Fawwaz Almomani(March 2008) He studied on 'Clients'
satisIaction about non-governmental organizations (NGOS) 'Clients' satisIaction about non-
governmentalorganizations (NGOS) services in Jordan International NGO Journal Vol. 3
(3), pp. 038-047,
Getaneh Gobezie (December, 2008). 'Sustainable rural Iinance: Prospects, challenges
andimplications Paper Presented at the Annual ConIerence organized by Association oI
Ethiopian MicroIinance Institutions (AEMFI).
Gaby Ramia (2002)'International NGOs and global social policy International sociological
associationxv world congress oI sociology:
Jodha, N S, M Banskota and T Partap (1992), 'Strategies Ior Sustainable Development
oIMountain Agriculture: An Overview, in N.S. Jodha, M. Banskota and T. Partap ,
Mercer, Claire (2002). 'NGOs, civil society and democratization: literature Progress in
development studies, 2: 5-22
Ministry oI Rural Development (MoRD) (2006): The National Rural Employment
GuaranteeAct 2005 (NREGA), Operational Guidelines 2006, 2nd Edition, Government oI
India,NewDelhi.
Ramesh Chand (1997), 'Agricultural DiversiIication and Development oI Mountain
Regions, M DPublications, NewDelhi.
Richard Ingwe , ( 2009) 'The urgency oI improving good governance and participation in the
state economic empowerment and development strategy International NGOJournal Vol. 4
(2), pp. 034-045.
Malhotra, S.P. (2005), 'Opportunities, Challenges and Prospects in Agriculture and
Forestry, in M L Dewan and Jagdish Bahadur (eds), Uttaranchal Vision and Action
Programme, Concept Publishing, NewDelhi, 54-66.
Michael Edwards & David Hulme(1995). 'Scaling up NGOImpacts Source: Boiling Point,
Issue 35
Silvia del Amo Rodriguez and Maria del Carmen Vergara-Tenorio (December,
2008)'Strategies Ior social and cultural inclusion on development and natural resource
management International NGOJournal Vol.4(2), pp. 27-033.
Thokozani Ian Nzimakwe (2008) 'South AIrica's NGOs and the quest Ior development
International NGOJournal Vol. 3(5), pp. 090-097
Tahirou Abdoulaye and John Sanders (2005) 'New technologies, marketing strategies and
public policyIor traditional Iood crop StaII Paper #05-07.
http://www.ua.nic.in
www.ceehimalya.org
www.harcuttrakhand.com
(We thankIully acknowledge all India Council oI Technical Education, New Delhi Ior
Sponsering the research project.)
www.atindia.org
Prof. Ashok Kumar Sinha`
Dr. Nisha Singh``
ANALYSIS OF CONSUMER BEHAVIOR TOWARDS BRANDED
LAPTOPS IN INDIA
ABSTRACT
In the modern day market customer is said to be the king.
The companies in order to create value based services,
products and earn proIits will always have to consider
the consumers and take their problems into
consideration Ior expansion in newmarkets and sectors.
Laptops are becoming increasingly popular with
consumers mainly because they oIIer portability,
convenience and perIormance in one small package. So
when we think oI buying a laptop, diIIerent parameters
such as, technical conIigurations, aIter sales services,
price, screen size, battery liIe, looks and warranty
period, are considered.
Due to globalization, we have a lot oI choice owing to a
lot oI players in the mobile computing market through
various brands in the market. So Ior every brand to
continuously keep increasing their sales it is necessary to
have unique Ieatures in order to diIIerentiate their
oIIerings Irom their competitors. It is the diIIerentiation
which makes any seller leader oI the market. There were
sever al i mpor t ant aspect s such as , br and
equity,availability,its various Ieatures, modelsusp, etc.
which were analysed and the conclusion will pave the
way Ior the laptop companies to consider while
Iormulating marketing strategy,launching new products
and expanding markets.
Research Methodology
Descriptive research is used to obtain inIormation concerning the current status oI the
phenomenon to describe "what exists" with respect to variables or conditions in a situation. The
methods involved range Irom the survey which describes the status quo, the correlation study
which investigates the relationship between variables, to developmental studies which seek to
determine changes over time.
We have done a descriptive study oI the market to have a better understanding oI the market in
terms oI the actual availability oI laptops at the points oI purchase as against what is mentioned on
the respective websites oI the major players oI the market.
Two Methods used Ior collectionoI data:-
1) Primarycollection oI Data.
2) Secondaryanalysis oI available Data.
For the collection oI primary data we did a survey, in which we collected Iirst hand
inIormation Irom the major dealers across Delhi NCR.
* Executive Director: Quantum Global Campus,Roorkee, INDIA
Email-proIsashokyahoo.co.in
** ProIessor-Business,Vorheese College, South Carolina,USA
Email-nishasinghrkeyahoo.co.in
We visited close to 100 stores in Delhi- NCRto gather the data & insights into diIIerent identiIied
brands.
A) SecondaryData: This mainly involved collection oI data Irom the respective
websites oI identiIiedlaptopbrands.
Competition mapping: An initial database was created consisting oI the laptop models
oI all the identiIied brands as per their conIigurations.
Tools Used:
Checklist togather diIIerent views oI dealers.
MS word - Ior documentation and Iinal report.
MS Excel - to perIorm one-to-one analysis oI laptops oI same speciIication oI diIIerent
brands.
SPSS -capturing the data across 100 stores visited to generate reports to assist in Iindings
and conclusion.
INDUSTRYANALYSIS:
Here are some Iacts about IndianITindustry
India is one oI the Iastest growing ITmarkets in the world.
India is also the Iastest growing PC market in the ASIA-PaciIic region, and also the
country with the Iastest growth in the internet usage in this region.
It is now predicted that laptop computers will outsell desktop machines by 2013-14.
Many executive and also lower positions require employees to have access to mobile
computing power in the Iorm oI a laptop. This saves time at the workplace thus
improving employee productivity.
The inIormation technology industry ended its worst year ever with the worldwide IT
spending declined to 5.2 in 2009. However, this industry would return to growth in
2010 with $3.3 trillion oI total spending, registering a 3.3 increase Irom 2009.
IT industry body Nasscom has projected a single-digit growth rate Ior the current
Iinancial year (between4 and 7).
PCPenetration
India has one oI the lowest PC penetrations in the world at less than 4 as per latest available
reports Irom Department OI InIormation Technology, GOI. Other developed and emerging
economies have much higher PCpenetration rates:
INDIA 36/1000
CHINA 122/1000
USA 734/1000
NORWAY 773/1000
India is expected to sell around 8 million PCs as compared to 21 million Ior China. In order to
reach at China's PC penetration levels India needs to grow its PC manuIacturing at CAGR oI
about 30 Ior the next 5 years. With rising income levels, increasing awareness about computers
through school level education combined with GOI's readiness project the penetration level in
India is set to growmany Ioldin coming years.
Overall the cost diIIerence between a desktop and a laptop based on the components only is
around 30 Ior the same conIiguration. At the same time diIIerence between selling price oI a
laptop and a desktop oI same conIiguration stands at around 60.This enables payers to have
better margin in case oI higher proportion oI laptop sales in total sales oI company. Absence oI an
unorganized assembled market in laptop segment enables players to have more pricing and
branding power as compared to a desktop product. This also helps in commanding better margins
in laptop business.
Analysis of consumer behavior towards branded laptops in india
55
Table1
India PC Shipments ('000s) by Form Factor` and Growth Trends: 1an-March 2010 vs.
Oct-Dec 2009 and 1an-March 2010 vs. 1an-March 2009
Form Factor 1Q2009 4Q2009 1Q2010 Growth Growth
(Jan-March (Oct-Dec Jan-March 1Q2010over4Q 1Q2010over1Q2009
2009) 2009) 2010) 2009) 2009)
Desktop PCs 1,213 1,271 1,436 13 18
NotebookPCs 166 699 803 15 72
Total Client PC 1,679 1,970 2,240 14 33
`Source: IDC's India Quarterly PC Tracker, 1Q 2010 May 2010 release
In the overall PC (Notebooks and Desktops combined) market, HP retained the top spot
with a market share* oI 16.5, while Dell (13.6) and Acer (13.0) took the second and
third spots, respectively.
The largest selling Brand/Product(Analysis)
H.P HCL
LENOVO ACER
DELL SONY
COMPAQ Others(Toshiba, Asus, Samsung, Wipro &Gateway)
The U.S.P oI the brands(Analysis)
Looks AIter Sale Service
Brand Image Features
Price Others (speciIications etc.)
The most popular screen sizes(Analysis)
12 13.3
14.1 15.4
15.6
Time Periods oI the OIIers
Festivals. First week oI the Month.
Last week oI the Month. Quarterly.
Arbitrarily
The actual market availability oI Laptops VS Projected
0 25 25-50
50-75 75 and above.
The time taken Ior delivery oI a particular model oI the selected brand
On the same day. Within 3 days.
Within a week. More than a week
The Most Enquired Brand
H.P HCL
LENOVO ACER
DELL SONY
COMPAQ Others
ANALYSIS
Availability oI laptop models as against mentioned in the websites oI the identiIied brands.
Table: 2
Models ShelI Web
Availablity Availablity
Brands (No.) (No.)
ASPIRE ASPIRE ASPIRE
ACER ASPIRE4736Z 5738Z 4740 5740 4 6
DELL INSPIRON14 INSPIRON 15 STUDIO14 3 16
DV42000 DV6 2125
HP/Compaq SERIES CQ510 CQ610 TX 4 18
LENOVO G550 G460 G560 Y450 3 54
SONY EA15 EB14 EB15 3 38
HCL AE1VO555 AXOP3857 AXOP3857 AXOP4114 4 10
Total 21 152
Figure:-3
ACER scores the most in terms oI actual availability as compared to its competitors with 67
availability against its site which is Iollowed by HCL (40), HP (22), DELL (19), SONY
(8), and LENOVO (6).
This inIormation is derived aIter visiting the various retailers at diIIerent locations like Noida,
Delhi, Gurgaon, Faridabad, and Ghaziabad.
The Iargest seIIing brand/product
Frequency Percent Valid Cumulative
Percent Percent
Valid HP/Compaq 24 24.0 24.0 24.0
HCL 17 17.0 17.0 41.0
Lenovo 10 10.0 10.0 51.0
Acer 13 13.0 13.0 64.0
Dell 23 23.0 23.0 87.0
Sony 8 8.0 8.0 95.0
Others 5 5.0 5.0 100.0
Total 100 100.0 100.0
57
TabIe: 4
Figure:5
HP/Compaq and Dell are highest selling brands Iollowed closely by HCL.
The U.S.P. of the brand
Percent Percent
Valid Looks 3 3.0 3.0 3.0
After sale Service 20 20.0 20.0 23.0
Brand mage 33 33.0 33.0 56.0
Features 16 16.0 16.0 72.0
Price 28 28.0 28.0 100.0
Total 100 100.0 100.0
TabIe: 6
Figure:7
Brand image, price and aIter sales service are the major determinants which aIIect the
customers' buying behavior.
The most popuIar screen sizes
TabIe: 8
Percent Percent
Valid 12" 3 3.0 3.0 3.0
13.3" 6 6.0 6.0 9.0
14.1" 47 47.0 47.0 56.0
15.4" 16 16.0 16.0 72.0
15.6" 28 28.0 28.0 100.0
Total 100 100.0 100.0
A2) Which is the largest selling brand/product?
A3) What is the U.S.P of the brand?
HP/Compaq
HCI
Lenovo
Acer
Dell
Sony
Others
Looks
After sale service
Brand Image
Features
Price
Figure:9
14.1 is the most preIerred screen size
The generaI time period of the offers
TabIe: 10
Percent Percent
Valid Festivals 11 11.0 11.0 11.0
First Week of Month 9 9.0 9.0 20.0
Last Week of Month 10 10.0 10.0 30.0
Quarterly 26 26.0 26.0 56.0
Arbitrarily 44 44.0 44.0 100.0
Total 100 100.0 100.0
Figure: 11
Most oI the oIIers are announced in a staggered manner by various brands and they include USB
data card, cleaning kit, mobile phones, antivirus soItware, and price discounts to name a Iew.
The time taken for deIivery of a particuIar modeI of the seIected brand
TabIe: 12
Percent Percent
Valid Same Day 57 57.0 57.0 57.0
Within 3 Days 16 16.0 16.0 73.0
Within a Week 6 6.0 6.0 79.0
More than a week 21 21.0 21.0 100.0
Total 100 100.0 100.0
A4) Which are the most popular screen sizes?
A5) What is the general time period of the offers for the
customers offered by the company/dealer?
12"
13.3"
14.1"
15.4"
15.6"
Festivals
First Week of Month
Last Week of Month
Quarterly
Arbitrarily
59
Figure:13
Majority oI the models on the shelI are delivered on the same day.
The most enquired brand
TabIe: 14
Percent Percent
Valid HP/Compaq 26 26.0 26.0 26.0
HCL 15 15.0 15.0 41.0
Lenovo 13 13.0 13.0 54.0
Acer 15 15.0 15.0 69.0
Dell 20 20.0 20.0 89.0
Sony 4 4.0 4.0 93.0
Others 7 7.0 7.0 100.0
Total 100 100.0 100.0
Figure:15
Dell and HP/Compaq are the most enquired brands.
FINDINGS & CONCLUSION
In our attempt to understand the communication which Ilows Irom the companies to the
channel partners to end customers, we managed to come up with the Iollowing results:-
Promotional strategies around leading brand of laptops Marketing Pitch for different
brands .
1.HP- very good service, over 732 service centers Use oI Chrome body makes it resistant to
scratches.
2.Acer- Best value Ior money Consumer can have the best conIiguration at minimum price.
3. Dell- Customization at aIIordable price.
A6) What is the timetaken for delivery of a particular model of
the selected brand?
A7) Which is the most enquired brand?
Same Day
Within 3 Days
Within a Week
More than a week
HP/Compaq
HCI
Lenovo
Acer
Dell
Sony
Others
4. Compaq- meet diIIerent consumer requirements (two market strategy)
5. Sony - Technology innovators and snob value.
6. Lenovo Innovations and Ieatures.
7. HCL- Indian Company, Value Ior money, 24*7 support service.
Brand Positioning-
1. Dell Based on customization
2. Acer- Price Sensitive and brand conscious
3. Sony Tech Savvy and upwardly mobile people.
4. HP- Brand Conscious and value.
5. Compaq - To attract price sensitive consumers.
6. Lenovo Business oriented users and Tech savvy
7. HCL- Price Sensitive, high on technology
Conclusion
HP/Compaq and Dell are highest selling brands Iollowed closely by HCL.
Brand image, price and aIter sales service are the major determinants which aIIect the
customers' buying behavior.
14.1 is the most preIerred screen size.
Most oI the oIIers are announced in a staggered manner throughout the year by various
brands and they include USB data card, cleaning kit, mobile phones, and antivirus
soItware to name a Iew.
Majority oI the models on the shelI are delivered on the same day.
Dell and HP/Compaq are the most enquired brands.
Disclaimer: This survey was carried throughout Delhi & NCR region across 100 stores and
the results Ior a PAN India survey may vary.
Biblioraphy & References
1) Business world magazine.
2) Marketing management 12 e, Philip Kotler , Kevin Keller.
3) State oI the art marketing research by- Albert Blankenship, George Breen, Alan Dutka-Business &
Economics
4) Internet marketing Ior inIormation technology companies: Proven Online
5) India BrieIing: quickening the pace oI the change Edited by Alyssa Ayres, Philip Oldenburg.
6) IDC report on Indian computing industry Ior 2009.
7) Research Methodology, by R Panneeraselvan
8) Research Methodology, by S.C.Sinha, A.K.Dhiman
9) Marketing Research, by Naresh K Malhotra
(10) Indian Journal oI MarketingVol : XL, October 2010
(11) Business Research (An International Business Magazine) INDJ- 03783
(12) Global Journal oI Emerging Market Economics INDJ- 05305 Business Wire (OCT 4-2010
Websites:
(1) www.hclstore.in (2) www.hclinIosystems.in (3)www.lenovo.com/in/en
(4) www.welcome.hp.com (5) www.dell.co.in (6) www.sony.co.in
(7) www.acer.co.in (8) www.timesoIindia.com (9) www.idcindia.com
(10) www.newtechnology.co.in
61
Performance evaluation of mutual funds in India in
post-liberalization era-an empirical analysis
Abstract
In this paper performance evaluation of mutual fund
schemes in India is carried out through risk-return
analysis and various performance evaluation tools like
sharpe ratio, treynor ratio, fenson measure and fema
measure .The period of study is seventeen years which
starts from the post liberali:ation period from 1993 to
2009.25 open ended equity , balanced and income
mutual funds are randomly selected for the study
keeping in view that every scheme has operated for at
least period of eight years since its inception.
Mean return and of
sample mutual fund schemes during the period of study
were calculated to be 5.201 and 17.087 .,which is
found to be more then the mean return of market
portfolio which is 4.89 with lower mean risk as
compare to market portfolio( 20.46)
risk measured by standard deviation
Introduction
A mutual Iund is a portIolio oI stocks, bonds, or other securities that is collectively owned by
hundreds or thousands oI investors and managed by a proIessional investment company. The unit
holders are people who have similar investment goals. Each Iund has speciIic investment criteria,
which are spelt out in its prospectus, the oIIicial booklet that describes the mutual Iund. Investors
then knowwhat they are getting and can match their objective to that oI a Iund. The pooled money
has more buying power than one investor alone, so that a Iund can own hundreds oI diIIerent
securities. Thus, its success is not dependent on how just one or two companies perIorm but on
perIormance oI several stocks, which Iund is holding.
Amutual Iundmakes moneyintwo ways:
`By earning dividends or interest on the investments it owns
`By selling securities that have appreciated in value.
Investors make money in the Iorm oI dividends and interest that are passed on to them and the
increase (or decrease) in the Iund's value. The mutual Iund manager keeps constant watch on
Iinancial markets and adjusts the portIolio to achieve the highest returns. By owning part oI a
Iund, the hard work oI selecting and monitoring stocks and bonds is done Ior investors. The
majority oI mutual Iunds available are open-ended Iunds. Open-ended Iunds can have an
unlimited number oI investors or money in the Iund. These Iunds are always open to accept
money Irom investors and to return the money back to investors. This gives the investor the
Ilexibility to enter into the scheme or to exit Irom the scheme or to exit Irom the scheme as and
when required as per their needs. Managers oI closed-end Iunds, on the other hand, decide upIront
howmany units they will issue and when they will sell them. The only way to purchase shares in a
closed-end Iund, once the original shares have been sold, is to buy them Irom a current investor.
Bimal 1aiswal`
Namita Nigam``
* Asstt. ProIessor, Department oI Applied Economics, Faculty oI Commerce, University oI Lucknow, Lucknow.
Email: bimalsiyaramyahoo.com
** Asstt. ProIessor, Institute oI Environment And Management, Jankipuram, Kursi Road, Lucknow.
E-mail: nigam.namitarediIImail.com
Occasionally, open-end Iunds can and do close to new investors, oIten because oI high cash
inIlows that cannot be invested in a timely manner. They do not become closed-end Iunds,
however, because current shareholders can still buy additional shares Irom the Iund , When
investors purchase a mutual Iund, they own a piece oI an investment portIolio. They share in the
gains, losses, and expenses in proportion to the amount they have invested in the Iund. At the close
oI every trading day, a mutual Iund company tallies the value oI all the securities in its portIolio
and deducts its expenses (e.g., management Iees, administrative expenses, and advertising costs).
The balance is divided by the number oI shares owned by shareholders to arrive at the value oI one
unit oI the mutual Iund. The net asset value or NAVis the price that Iund pays you per unit when
you sell. For a majority oI people, mutual Iunds are a major part oI their investment portIolio-
unless they have a lot oI money and ample time to devote in individual securities. The
IewdeIinitionoI mutual Iunds are given below
The Security & Exchange Board oI India Mutual Fund regulation 1996 deIined 'Amutual
Iund is a Iorm oI a trust established to raise money through the sale oI units to public or a
section oI public under one or more scheme Ior investing in securities including money
market instruments. Mutual Fund come under the previewoI Indian Trust Act, 1882.
Encyclopedia Britannica deIines a mutual Iund as 'Mutual Fund also called Unit Trust or
open ended Trust a company that invests the Iund oI its subscribers in diversiIied securities
& in turn issues units representing shares in those holdings. They make continuous oIIering
oI newshares at net asset value & redeem the share on demand at net asset value determined
daily by the market value oI the securities they hold.
Objective of the Study
1) To Studythe status oI mutual Iunds industry in the post libralisation period.
2) To assess the Iinancial perIormance oI Indian mutual Iunds in terms oI risk & return aIter
liberalization.
3) To compare the perIormance oI Iunds with a bench mark portIolio (market index).
Scope of the Study
The time span oI study is post liberalization period i.e. it starts Irom year 1993 and ends with year
2009.
The study is limited toopenended mutual Iund scheme with growth option in India.
Thus time span is very long period about seventeen years & thereIore is quite suIIicient to study
the perIormance oI the mutual Iund industry in India.
Reviewof literature-
Several researchers have undertaken lots oI study on mutual Iunds and its perIormance
evaluation Irom manyyears .BrieI oI IewoI them is given below-
Kon, S.F., (1983), in his paper evaluated perIormance in terms oI selectivity & timing parameters
over a period, January 1960 to June 1976. The sample was 37 Iunds. The study concluded that
individually Iew Iunds have shown positive selectivity & timing skills but collectively mutual
Iunds Iailed toperIorm satisIactorily.
Henriksson, R.D., (1984), evaluated perIormance in terms oI market timing abilities with sample
oI 116 open-ended investment schemes during the period, February1968-June 1980. The
empirical results obtainedindicatedunsatisIactory timing skills oI the Iund managers.
Vaid, S., (1994), in his paper looked at the perIormance in terms oI the ability oI the mutual Iund to
attract more investors & higher Iund mobilization. It shows the popularity oI the mutual Iund as it
is perceived to pay superior returns to the investors. She concludes that even Ior equity-oriented
Iunds, investment is more in Iixed income securities rather than in equities, which is a distortion.
Sarkar, J. & Majumdar S., (1995), in his paper evaluated Iinancial perIormance oI Iive close-
to invest
Performance evaluation of mutual funds in India in a post liberalization eraan empirical analysis
63
ended growth Iunds Ior the period February1991 to August 1993, concluded that the perIormance
was below average in terms oI alpha values (all negative & statistically not signiIicant) & Iunds
possessed high risk. No reIerence was provided about the timing parameters in their study.
Jaydev. M., (1996), in his paper evaluated perIormance oI two schemes during the period, June
1992 to March 1994 in terms oI returns/benchmark comparison, diversiIication, selectivity &
market timing skills. He concluded that the schemes Iailed to perIorm better than the market
portIolio (ET's ordinary share price index). DiversiIication was unsatisIactory. The perIormance
did not showany signs oI selectivity & timings skills oI the Iund managers.
Gupta, O.P. & Sehgal, S., (1997), in his paper evaluated mutual Iund perIormance over a Iour
year period, 1992-96. The sample consisted oI 80 mutual Iund schemes. They concluded that
mutual Iund industry perIormed well during the period oI study. The perIormance was evaluated
in terms oI benchmark comparison, perIormance Irom one period to the next & their risk-return
Characteristics. Gupta & Sehgal in another paper 'Investment PerIormance oI Mutual Funds:
The Indian Experience, 'presented at UTI-ICM Second Capital Market ConIerence, Dec. has
reported that Mutual Fund Industry had perIormed reasonably well during their period oI study.
Mishra (2001) evaluated perIormance over a period, April 1992to December 1996.The sample
size was 24 sector sponsored mutual Iunds. The perIormance was evaluated in terms oI rate oI
return, Treynor's, Sharpe & Jensen's measures oI perIormance. The study also addressed beta's
instability issues. The study concluded dismal perIormance oI PSU mutual Iunds in India, in
general, duringthe period, 1992-96.
Narayan & Ravindran (2003) studied the perIormance oI Indian Mutual Funds in a bear market
using relative perIormance index, risk-return analysis, Treynor's ratio, & measures oI Shape,
Jensen & Fema.
Research Methodlogy
The data used in the study is totally secondary data. On 31 march 2009 there are 1001 mutual
Iunds scemes are Iloated by various mutual Iunds companies with total oI 417300 crs asset under
management,in which 293 schemes are equity mutual Iunds schemes, 509 schemes are income
schemes and 35 scemes are balanced schemes. Out oI these available scheme , 25 actively traded
equity,balanced and income schemes with growth option are taken Ior study. Thus sample size is
25 equity schemes. The study period is post liberalisation period which start Irom 1993. thus the
study period is 17 years Irom December 1993 to June 2009.
Net Asset Value (NAV)
The average logerithemic return on mutual Iund.is calculated by taking month end NAVs.The
sourse oI the data is webside oI ascociation oI mutual Iund oI India. (AMFI) The net asset value is
the mirror image depicting the worth oI the investment per unit. It is an indicator oI the capital
appreciation oI the Iunds under the schemes as on date oI NAV. NAVrepresented Iunds per share
market value. The NAVis calculated by dividing the aggregate value oI the net assets oI a scheme
by the number oI outstandingunits under the scheme.
Benchmark portfolio-
BSE-100 index is used as a bench mark in present study and is considered as market portIolio
.The average logrithem return is used as a return Irom market portIolio.
Risk-Free asset
A risk Iree asset is that asset which has zero verability oI return. Investor buy an asset at the
begining oI the holding period with the none terminal value, such type oI asset can be considered
as risk Iree asset. Government sequirities and nationalized bank diposits Iall under this category
as the Government sequirities are not easely avilable to the commen man.,.Nationalized bank
diposits are considered as risk Iree asset and interest rate on such diposit are considerd as risk Iree
return. The interest rate on bank deposits is collected Irom the webside oI RBI and logerithemic
returns are calculated to Iind mean return.

Performance evaluation-
Following tools are used forPerformance evaluation
For each mutual Iund scheme in the sample return have been calculated by taking year end NAVs
.the annual returnIor the sample schemes are calculated by using the Iollowing equation--.
Rpt Log (NAVt/NAVt-1)
Where Rpt is the annual return on mutual Iund portIolio Ior the period t
NAVt net asset value Ior the (t) Period.
NAVt-1 net asset value Ior the (t-1) Period
The returns on the Iund portIolio are averaged as Iollows
n
Rp _ Rpt/n
t-1
Rp is average return on the mutual Iund portIolio.
S.D. oI Iund returnis used tocalculate total risk oI mutual Iund portIolio.
Measurement of BETA-
Beta calculation requires covariance oI the scheme returns & market returns. Covariance
essentially measures towhat extent the schemes returns & market returns move together.
|c|mu|ofc| co|cu|o|ngBeo}
Beta Cov(r r )/Var(r )
p, m m
Where
Cov(r r ) Covariance between the index's return & the mutual Iund scheme's return.
p, m
Var(r ) Variance in the indexreturn.
m
Sharpe Ratio: - This ratio given by William Sharpe in 1996 & is one oI the most useIultool Ior
determininga Iund's perIormance.
The sharpe ratio represent the tradeoII between risk & return. At the same it also Iactors in the
desire to generate returns, whichare higher than those Irom risk Iree return.
The assumption behind the sharpe ratio is that small investor invest Iully in the mutual Iund &
does not hold any portIolio to eliminate unsystamatic risk & hence demand a premium Ior the
total risk.
It is a ratio indicating the relationship between the portIolio additional return over risk Iree return
& total risk oI the portIolio measured in terms oI standard deviation. As the standard represents
the total risk experienced by a Iund, the sharpe ratio reIlects the returns generated by undertaking
all possible risk.
This ratio is also reIered as reward to variability ratio. The sharpe ratios Ior diIIerent mutual Iund
schemes as well as benchmark portIolio have been completed by using the Iollowing Iormula: -
Sharpe Ratio r -r
p f / p
Risk Premium / Total Risk
Where: r Average ReturnoI the Iund
p
r Average RiskFree Return
I
o Standard Deviation i.e. total risk oI the portIolio
p
& Benchmark Comparison r -r o
m I / m
Where r Average Return oI the benchmark portIolio &
m
o StandardDeviationoI Market PortIolio.
m
The Sharpe ratio is a measure oI relative perIormance, in the sense that it enables them to compare
two or more investment opportunities.
65
AIund with the higher Sharpe ratio in relation to another Iund or market portIolio is preIerable as
it indicates that the Iund has higher risk premium Ior every unit oI total risk.
The major limitation oI sharpe ratio is that it is based on the capital market line. The major
character oI the capital market line is only the eIIicient portIolios can be plotted on the Capital
Marker Line, but not ineIIicient portIolio. Hence we assume that a properly managed portIolio
(mutual Iund schemes) is aneIIicient portIolio.
Treynor's Ratio: - Jack Treynor in 1965 conceived an Index oI portIolio measure called as
reward to volatilityratio.
He assumes that the investor can eliminate unsystematic risk by holding a diversiIied portIolio.
Hence this perIormance measure adjusts excess return over the risk Iree return Ior systematic
risk.
TheTreynor ratios Ior the sample schemes have been computed by using the Iollowing Iormula:
TreynorRatio Risk Premium / Systematic Risk
r -r
p I / p
Where r Return oI PortIolio
p
r Risk Free Return
I
Systematic Risk oI PortIolio.
p
/s neoI the market portIolio is equal to 1.
Treynor RatioIor Benchmark PortIolio (r -r )
m I
Where r Return on Market PortIolio.
m
II Treynor ratio oI the mutual Iund schemes is greater than (r -r ), then scheme has outperIormed
m I
the market.
For a completely diversiIied portIolio on without any unique risk, the two measures give identical
ranking, because total variance oI completely diversiIied portIolio is its systematic variance.
Whereas a poorly diversiIied portIolio could have a high ranking on the basis oI Treynor ratio &
as a lowrankingonthe basis oI Sharpe ratio.
Thus two ratios mayrankthe schemes diIIerently
1ensen Measure
Sharpe & Treynor ratio rely mainly on ranking oI portIolio in comparison to the market portIolio
but they are unable to evaluate that whether the Iund has given return more/less than expected
return. Hence there is a need Ior a better perIormance measure.
Michael Jensen has developed another method Ior evaluate oI perIormance oI a portIolio. This
measure is based on diIIerential return & is known as Jensen's Ratio, the Jensen's Ratio measures
the diIIerences between the actual return oI a portIolio & expected result oI a portIolio in viewoI
the risk oI the portIolio. The model based on Capital Asset Pricing Model (CAPM), where
expected return oI the portIolio is measured as:-
r r + (r r )
s f p m f
Where r ~ ||s| f|ee |eu|n, beta coeIIicient oI the portIolio, r return Irom benchmark
I p m
portIolio.
CAPM gives the expected return oI a security or portIolio in view oI it systematic risk. The
diIIerential return gives an indication, how well portIolio has perIormed. The perIormance
measure or diIIerential return is measured by the Iactor J & is deIined by the equation.
p
J PortIolio return- expectedreturn oI the portIolio
p
r r + (r r )]
p f p m f
II 1p is positive, it shows that the portIolio has perIormed better & it has outperIormed the market
& lies above the security market line.
II 1p is negative, it means that the portIolio has under perIormed as compared to the market & lies
belowthe securitymarket line.
II 1p is zero, it indicates that the portIolio has just perIormed what its expected to & expected
return & actual return oI the portIolio both would be on the Security Market Line (SML).
Jensen's measure, J is based on the systematic risk & |equ||es & Security Market Line. It
p
measures the distance between the portIolio & the Security Market Line. Thus Jensen'sIndex
attempts toconstruct a measure oI absolute perIormance.
Fema Measure
Fema's Model attempts to measure the perIormance in terms oI the components oI risk oI
portIolio.
Jensen's measure computes excess returns over expected returns based on premium Ior
systematic risk, Eugene F Fema (1972) goes one step ahead. In view oI Capital Asset Pricing
Model, the return oI a portIolio is consisting oI risk Iree returns & risk premium.
r r +risk premium
p f
The risk premium is consisting oI reward Ior risk bearing & reward Ior stock selection.
Risk Premium Reward forRisk +Rewards forSelection.
The reward Ior stock selection is Ior the better selection oI stock Ior the portIolio. It's the return
earned on a portIolio over & above the return in view oI the risk oI the portIolio the reward Ior
stock selecting may be negative. It shows that return is not suIIicient because oI poor selection. As
Fama's measure is based on total risk, it Iocuses on the vertical diIIerence between the portIolio
return & the Capital Market Line.
Every portIolio has systematic as well as unsystematic risk. So, the reward Ior risk can be
decomposed into reward Ior systematic risk & reward Ior unsystematic risk. Thus, Fama
breakdown the observed return in Iour components.
1- Risk Iree return (r )
f
2- Reward Ior Systematic Risk(r )-- (r r )
m f
3- Reward Ior unsystematic Risk (rid) --(r r ) |( / ) ()]
m f p m
4- Reward Ior Stock Selection- (r -r ) - ( / ) (r r )
p f p m m f
Fema says that the portIolio perIormance can be judged by the net superior returns due to
selectivity. His perIormance measure denoted by F is deIined by equation.
p
F Portfolioreturn- risk free returns due to all risk
p
(r -r ) |( / ) (r r )]
p f p m m f
Where F Fama's measure forportfolio
p
r portfolio return
p
r risk free return
f
standard deviation of portfolioreturn
p
standard deviation of the market return
m
Apositive value oI F indicates that the Iund earned return higher than expected returns & lies
p
above Capital Market Line, & a negative value indicates that the Iund earned returns less than
expected returns & lies belowCapital Market Line.
Data Analysis and Conclusion
Table (I) shows that
67
Average Return on Iund ~ Average return on market portIolio ~ Average return on risk Iree asset
Average Risk(o) oI Iund Average Risk on market portIolio.
The table 1 shows that any return oI portIolio oI Mutual Fund is greater than one any return oI
Benchmark portIolio which is (BSE-100), whereas average Total risk oI Mutual Fund portIolio is
lesser than Benchmark portIolio. The average systematic risk oI Mutual Fund is 0.8105 which is
less than average oI Benchmark portIolio which is always1.
Average Return oI Mutual Fund is greater than the Benchmark as well as Risk Iree rate oI
return.This shows that portIolio was properly managed by Iund managers giving high average
return at lesser risk as compare to Benchmark portIolio.
The average mutual Iund with its mean annual return oI 5.20 at total risk level (o) oI 0.17087
out perIormedthe market with4.89 return at a risk level 0.20463.
Table 2 and 5 shows that out oI 25 Iunds 17 Iunds have under perIormed the market & no equity
Iund have returnlesser thanriskIree rate.
Table 3 shows that there is no portIolio with negative return. 9 Iunds have return between 2-4 . 9
Iunds between 4-6 whereas 6 Iunds have return between 8-10 out oI 25 equity diversiIied
open ended Iunds selectedIor the study.
As Iar as systematic risk is concerned 3 Iunds are oI low risk, 7 with average & 10 average
systematic risks whereas only 5 withhigh more than 1 out oI 25 Iunds selected.
This shows that most oI the Iunds lies between average to above average systematic risk category.
Table 3 shows that 7 Iunds have average systematic risk and 10 Iunds belong to above average
systematic risk category while 5 Iunds have high systematic risk.
Table 4it shows that 9Iunds here are average total risk & 12 Iunds are with high total risk.
On comparing Table 3 & 4 it seems that equity Iunds have out perIormed the market but still they
are not properlydiversiIied. There is Iurther scope Ior diversiIication & Iund manager should take
more eIIorts todiversiIythe portIolio & to reduce the diversiIiable risk
Table 6 shows that out cf 25 selected equity mutual Iunds 17 Iunds have lesser then oI market
portIolio which is 1.this shows that portIolio is properly managed and containing lesser risk as
compare to equity shares.
The sharpe index measures the risk premium oI the portIolio relative to the total amount oI risk in
the portIolio. Table 7 shows that 14 Iunds have greater sharpe index then the benchmark portIolio
out oI 25 selected Iunds, while 13 Iunds have higher treynor ratio as compare to the benchmark
portIolio. Both the ratios are giving same ranking Ior the selected Iund shows that portIolio is well
diversiIied.
II J is positive, it shows that the portIolio has perIormed better & it has outperIormed the market.
p
In the analysis table 8 shows that 16 Iunds having positive J have outperIormed the market &
p
better managed portIolio. Whereas 9 Iunds with the negative J has under perIormed as compare
p
to market i.e. their perIormance is lesser than what it should be in viewoI risk.
18 Iunds have positive F shows that out oI 25 Iunds 18 Iunds have positive reward Ior stock
p
selectivity showing good stockselection ability oI Iund manager.
Thus the results oI perIormance measures suggest that more than 50 sample mutual Iunds
schemes were able to satisIy the investor's expectations by giving more return at lesser risk as
compare to market portIolio. The study also shows that most oI the sample Iunds were giving
excess return over expectedreturns based on both premium Ior systemic risk and total risk.
Bibliography
Bevis Charles, W, (2002 November), The Future oI Mutual Fund Industry, Financial
Research Corporation
Change, E.C. & Lewellen W., (1984), 'Market Timing & Mutual Fund Investment
PerIormance', publishedinJournal oI Business, (January), pp.57-72
Gupta, O.P. & Sehgal, S., (1997), 'Investment PerIormance oI Mutual Funds- The Indian
Express', 'Indian Capital Market- Trends & Dimensions', published in Tata McGraw Hill
Publishing CompanyLtd. (on behalI oI Institute oI Capital Market, Navi Mumbai),
Henriksson, R.D., (1984), 'Market Timing & Mutual Fund PerIormance: An Empirical
Investigation', published inJournal oI Business
Jaydev. M., (1996), 'Mutual Fund PerIormance: An Analysis oI Monthly Returns', published
in Finance IndiaVol. X, No.1, (March), pp.73-84.
Kar Pratip; Natrajan, I and Singh, J.P. (2000) Survey oI Indian Investors, SEBI and NCAER
Kon, S.F., (1983), 'The Market Timing PerIormance oI Mutual Fund Managers', Journal oI
Business, (July), pp.323-47.
Reid Brian K and Rea John D,(2003 July), Perspective, Mutual Fund Distribution Channel
and Distribution Costs, Investment Company Institute
Rustagi R. P.,Investment analysis and portIolio management, sultan chand & sons
publication, NewDelhi,ISBN81-8054-528-8
Sarkar, J. & Majumdar S., (1995), 'Weak From oI EIIicient Market Hypothesis' published in
ASpecial Analytical Investigation', Vikalpa, (April-June) pp25-30
Vaid, S., (1994), 'Mutual Fund Operation oI India', published in Rishi Publication, Varanasi,
India. Pp101-19
Appendix
Table -1
Average Return onIund (Arp) 0.052013
Average Risk (o) oI Iund (Aop) 0.0170878
Maximum ReturnonIund 0.097593
Minimum Return on Iund 0.0219
Maximum RiskonIund 0.215864
Minimum Risk Iund 0.030576
on
Average () oI Iund (Ap) 0.810556
Maximum Return on market portIolio rm 0.085846
Minimum Return on market portIolio 0.040582
Maximum risk on market portIolio o 0.192751
m
Minimum riskon market portIolio o 0.167399
p
Average returnonmarket portIolio (Ar 0.0489061
m)
Average Risk on market portIolio ( Ao .2046374
m)
Average returnonrisk Iree asset (Ar -0.013566
I)
Minimum return onrisk Iree asset r -0.00807
I
Maximum returnon risk Iree asset r 0.007881
I
69
Table- 2
o
Table- 3
Risk () & Return of Mutual Fund

Fund rp p rm m rI
Baroda Pioneer ELSS 96 0.022259 0.169704 0.057269 0.17989 0.00119
Birla SunLiIe -95 0.097593 0.159868 0.051682 0.174092 -0.00807
Canara Robecco Bal Fund-G 0.036136 0.115336 0.041957 0.167399 -0.00212
DBS Chola Growth Fund-G 0.055684 0.228367 0.085846 0.191144 0.007881
DSP Black Rock 0.082054 0.137992 0.046007 0.18834 0.00119
Escort Balance -G 0.084584 0.161592 0.085946 0.191144 0.007881
Franklin Tempelton
India Bluechip-G 0.057661 0.215864 -0.040582 0.173181 -0.00502
HDFC Equity-G 0.084156 0.196342 0.040582 0.173181 -0.00502
HDFC Capital Builder-G 0.048237 0.188172 0.040582 0.173181 -0.00502
ICICI Pru FMCG-G 0.048894 0.159776 0.046007 0.18834 0.00119
ICICI Pru Growth -G 0.089982 0.21239 0.67808 0.192751 -0.00308
ICICI Pru Income -G 0.040186 0.030576 0.06780 0.192751 -0.00308
SBI Magnum Balanced -G 0.043059 0.209325 0.05168 0.174092 -0.00807
SBI Magnum Contra Fund 0.053745 0.185688 0.046007 0.18834 0.00119
SBI Magnum FMCG 0.006434 0.157804 0.046007 0.18834 0.00119
SBI Magnum Multiplier Plus 0.034329 0.240781 0.040582 0.173181 -0.00212
Principal Balanced -G 0.039146 0.144942 0.046007 0.18834 0.00119
Principal Index 0.041138 0.16383 0.046007 0.18834 0.00119
Kotak- 30 0.080141 0.209683 0.067808 0.192751 -0.00308
JM Balanced -G 0.0219 0.150856 0.051682 0.174092 -0.00807
JM Equity -G 0.038696 0.201403 0.051682 0.174092 -0.00807
LIC MF Equity 0.030588 0.195145 0.046007 0.18834 0.00119
LIC MF Govt. Sec -G 0.033698 0.042813 0.046007 0.18834 0.00119
LICMF Growth 0.030775 0.215079 0.046007 0.18834 0.00119
SBI Magnum Global -G 0.049759 0.237163 0.051682 0.174092 -0.00807
Risk/Return .2 .2 .5 Average Above High risk Total
Low Risk Below Risk .5 average ~1.
Risk .7 risk
7 1
0 0 0 0 0 0 0
0 - 2 0 0 1 0 0 1
2 - 4 1 0 3 2 3 9
4 - 6 1 0 2 3 2 9
6 - 8 0 0 0 0 0 0
8 - 10 1 0 1 5 0 6
~ 10 3 0 7 10 5 25
Table- 4
Risk () & Return of Mutual Fund
o
o
o o o o o
Table- 5
Risk return grid diagrame
o o o o
o o o o
Risk/Return Low Risk Below Average Above High risk Total
average Risk average ~1.
.7 risk
.05 .05 .09 .09 .12 .12 .18 .18 .25
0 0 0 0 0 0 0
0 - 2 0 0 1 0 0 1
2 - 4 1 0 3 2 3 9
4 - 6 1 0 2 3 2 9
6 - 8 0 0 0 0 0 0
8 - 10 1 0 1 5 0 6
~ 10 3 0 7 10 5 25
rp~rm, p m rprm, p m
Birla SunLiIe -95 Franklin Tempelton India Bluechip-G
DSP Black Rock HDFC Equity-G
ICICI Pru FMCG-G HDFC Capital Builder-G
SBI Magnum Contra Fund Kotak- 30
rp~rm, p~ m rprm, p~ m
Baroda Pioneer ELSS 96 DBS Chola Growth Fund-G
Canara Robecco BalanceFund-G ICICI Pru Growth -G
Escort Balance -G SBI Magnum Balanced -G
ICICI Pru Income -G SBI Magnum Multiplier Plus
SBI Magnum FMCG JM Equity -G
Principal Balanced -G LIC MF Equity
Principal Index LICMF Growth
JM Balanced -G SBI Magnum Global -G
LIC MF Govt. Sec -G
71
Table- 6
Fund rp p p
Baroda Pioneer ELSS 96 0.022259 0.169704 2.52
Birla SunLiIe -95 0.097593 0.159868 0.740695
Canara Robecco Bal Fund-G 0.036136 0.115336 0.58703
DBS Chola Growth Fund-G 0.055684 0.228367 0.662978
DSP Black Rock 0.082054 0.137992 0.6497
Escort Balance -G 0.084584 0.161592 0.719056
Franklin Tempelton India Bluechip-G 0.057661 0.215864 1.029
HDFC Equity-G 0.084156 0.196342 0.836684
HDFC Capital Builder-G 0.048237 0.188172 0.92200
ICICI Pru FMCG-G 0.048894 0.159776 0.95036
ICICI Pru Growth -G 0.089982 0.21239 0.94272
ICICI Pru Income -G 0.040186 0.030576 -0.090706
SBI Magnum Balanced -G 0.043059 0.209325 0.96750
SBI Magnum Contra Fund 0.053745 0.185688 0.805192
SBI Magnum FMCG 0.006434 0.151804 0.584688
SBI Magnum Multiplier Plus 0.034329 0.240781 1.2309
Principal Balanced -G 0.039146 0.144942 0.68405
Principal Index 0.041138 0.16383 0.60927
Kotak- 30 0.080141 0.209683 0.961970
JM Balanced -G 0.0219 0.150856 0.585884
JM Equity -G 0.038696 0.201403 1.060116
LIC MF Equity 0.030588 0.195145 0.926869
LIC MF Govt. Sec -G 0.033698 0.042813 -0.13588
LICMF Growth 0.030775 0.215079 0.994956
SBI Magnum Global -G 0.049759 0.237163 1.22070
Table-7
Fund Treynor Ratio Sharpe Ratio
Tp Tm Sp Sm
Baroda Pioneer ELSS 96 0.318597 0.056079 0.124151 0.311740
Birla SunLiIe -95 0.1426538 0.059487 0.66093 0.343220
Canara Robecco Bal Fund-G 0.065168 0.044077 0.331691 0.263305
DBS Chola Growth Fund-G 0.072103 0.077965 0.209325 0.40788
DSP Black Rock 0.124463 0.044817 0.586004 0.23795
Escort Balance -G 0.107947 0.078136 0.474670 0.408780
Franklin Tempelton India Bluechip-G 0.06091 0.045602 0.29037 0.26331
HDFC Equity-G 0.097719 0.045602 0.454187 0.2633198
HDFC Capital Builder-G 0.057762 0.045602 0.28302 0.263319
ICICI Pru FMCG-G 0.050195 0.044817 0.298567 0.38165
ICICI Pru Growth -G 0.098716 0.68118 0.36776 0.23795
ICICI Pru Income -G -0.47699 0.070888 1.4150 0.36776
SBI Magnum Balanced -G 0.052846 0.059752 0.244256 0.343220
SBI Magnum Contra Fund 0.06527 0.044817 0.283028 0.237957
SBI Magnum FMCG 0.00896 0.044817 0.034544 0.237957
SBI Magnum Multiplier Plus 0.029611 0.042702 0.151378 0.246574
Principal Balanced -G 0.055780 0.044817 0.26187 0.237957
Principal Index 0.065567 0.044817 0.243838 0.237957
Kotak- 30 0.086509 0.070888 0.39688 0.367769
JM Balanced -G 0.051153 0.059752 0.198666 0.343228
JM Equity -G 0.044115 0.059752 0.232201 0.34322
LIC MF Equity 0.031717 0.044817 0.150646 0.237957
LIC MF Govt. Sec -G -0.239181 0.044817 0.759302 0.237957
LICMF Growth 0.029734 0.044817 0.137554 0.237957
SBI Magnum Global -G 0.04737 0.059752 0.243836 0.343220
o
Table- 8
Fund r Jenson measure Fema measure
I
p p (J ) (I )
Baroda Pioneer ELSS 96 0.00119 -0.12025 -0.031834
Birla SunLiIe -95 -0.00807 0.061404 0.050793
Canara Robecco Bal Fund-G -0.00212 0.0123814 0.007887
DBS Chola Growth Fund-G 0.007881 0.003886 0.045344
DSP Black Rock 0.00119 0.051746 0.048027
Escort Balance -G 0.007881 -0.2172327 0.010647
Franklin Tempelton India Bluechip-G -0.00502 0.015756 0.233528
HDFC Eq-G -0.00502 0.0510215 0.037475
HDFC Capital Builder-G -0.00502 0.0112119 -0.001312
ICICI Pru FMCG-G 0.00119 0.0051117 0.0096840
ICICI Pru Growth -G -0.00308 0.549100 0.588118
ICICI Pru Income -G 0.00308 0.0496959 0.032021
SBI Magnum Balanced -G -0.00807 -0.006681 -0.018031
SBI Magnum Contra Fund 0.00119 0.0164687 0.008369
SBI Magnum FMCG 0.00119 -0.020959 -0.030878
SBI Magnum Multiplier Plus -0.00212 -0.016112 0.022921
Principal Balanced -G 0.00119 0.007460 0.003465
Principal Index 0.00119 0.012642 0.026582
Kotak- 30 -0.00308 0.015028 0.006104
JM Balanced -G -0.00807 0.005037 0.024278
JM Equity -G -0.00807 -0.016578 0.022357
LIC MF Equity 0.00119 0.012141 -0.017038
LIC MF Govt. Sec -G -0.13588 0.038597 0.022312
LICMF Growth 0.00119 -0.015005 -0.215947
SBI Magnum Global -G -0.00807 -0.015110 -0.034029
73
Old-School for the New Youth
Why is today's urban youth bringing Old-School trends back? An Indian Perspective
1aishikha Nautiyal`
*Alliance University, BTM 1st Stage, Bangalore, Karnataka
Email: jaishikhangmail.com
Abstract
Various researches have been carried out to understand
the role oI nostalgia or retro marketing in inducing old-
school/vintage purchases among consumers (mainly
Generation X or baby boomers). This research paper
explores the mindset oI the younger urban consumers in
India (primarily major Indian metropolitans) and their
Iascination with old-school products and dispensing
with the same when they became outdated in the past.
The idea is to comprehend the perceptual lure behind the
category 'old-school', the psyche oI the urban youth in
reviving styles oI the past and the Iactors that inIluence
the same. Considering the youth-centricity oI the paper,
diIIerentiation has been tried to be created among the
lines oI gender and levels oI propensity toward old-
school trends. These questions have been answered by
means oI an online survey comprising 45 respondents.
Key Words: Old-school trends, India, Urban youth
Introduction
What is the great appeal that lies in the things oI the past? What is 'old-school'?According to web
resources like Wikipedia, old-school can be deIined as anything belonging to the past or an earlier
era and looked upon with high regard or respect. In some cases, within a certain context, it might
be considered as a pejorative. The term 'old-school' primarily applies to trends in music, clothing,
gaming or language.
The motivation behind this research is to comprehend as to why old-school trends and products
are lapped up more willingly by the modern consumer viz. the urban youth. OI course, new
products and newer technologies drive an average consumer, but why is it that a trend or a product
having Iormerly been written oII as out-dated, cliched or passe at the time it was in demand,
garners universal acclaim, once it hits the 'old-school category'. The research also aims to explore
the young and urban Indian consumer mindset behind a Iascination towards products or
phenomena that 'make a comeback'. By means oI this report, it is argued and bolstered by
evidence that 'old-school' trends bear immense value in the young consumers' minds. The attitude
oI the consumers toward the same is Iavorable and most people tend to subscribe to the past to
boost their present estimation oI the selI. In the course oI this work, changes in the willingness oI
the consumers to dissociate with a mass-popular product at a given point in time and attempts to
endorse the same vintage product as haute couture in later times were observed.
To elucidate the research angle better, one can consider the example oI The Converse All Star, a
th
sneaker brand that was originally established in the early 20 century. From being the most stylish
Iootwear choice in the 60s, 70s and the 80s and later getting outmoded, the brand has again Iound
st
its lost swing in the 21 century. The Converse All Star is once again a rage among modern
consumers and has been heralded as the sneaker du jour brand. Another example that stands out
is Hats and more speciIically the 'Fedora'. While it was practically a social Iaux pas to go places
without a hat in the yester years, the practice gradually wore out, as the times became more casual.
The 90s sawthe 'old-school' Fedoras coming back again as they were endorsed by stylish rappers
and became synonymous withthe uber-cool hip-hop culture.
The point to be noted in the above examples is that when old-school accessories make a
comeback among consumers oI a certain time, while their physical Iorm may remain the same
with slight alterations, their sense oI purpose and associations with the consumers change
drastically. So, while wearing a hat signiIied tradition and gentlemanliness in the 1950s, it relates
more with style, chic, and urbanity in the 2000s. It can also be said that an old-school product will
only make a comeback iI it canIit within the present value Iramework oI the modern consumer.
The concept oI revisiting the past is not new to consumers. And various reasons could be
attributed to this phenomenon. Some studies Iocus on howone tends to opt Ior nostalgic products
or events like eating a childhood candy treat or watching an old episode oI a Sit Com oI the yester
years, so as to IulIill the social need to belong somewhere or Ieel connected (Loveland, Smeestars
and Mandel, 2010). This recourse to nostalgia can be extrapolated to give credence to the ambit oI
the present study. There is a marked tendency in consumers to usher in Old-school trends Irom
time to time.
Similar researches conducted in the past (Silverman, 1995) suggest that consumers might turn to
the past, looking Ior brand authenticity, a sense oI well being, convenience and a yearning Ior the
good old days. As noted by (Barrager, 1993), the retrogressive trends mentioned in the present
research and strongest among the young consumers, are not just symbolic oI nostalgia, but also
have a strong sentimental appeal.
Some researchers note that an old-school brand serves a dual purpose. While the nostalgic
elements that it creates, are more synonymous with today's Gen Xers and Boomers (taking them
back to their days oI childhood glory), it also connects with the global youth. The connect is
deIined by an inspiration to relate with a past that wasn't witnessed by today's youth in person. It
gives them an opportunity to create new experiences out oI this past memorabilia closet. Old-
school products are also well received by the youth because they meet the present Iunctional
requirements (like the all newrevamped Beetle), and still manage to create that reminiscent touch
among their youthIul users (Brown, Stephen, Robert V. Kozinets, and John. F. Sherry, Jr. (2003)).
There are some old-school styles that are better received by the younger generation. Examples
could include Jeggings, Silly Bandz, Bell Bottoms, Skinny Jeans et cetera. One phenomenon that
has really taken the youth by storm is the reappearance oI the Geek Look. This look is primarily
spearheaded by large glass Irames which have bold looks. This style is being espoused heavily by
the youth and savagely endorsed by younger celebrities across the globe. While this look was
panned heavily in the 90s as passe since it Iound huge similarities with the Iashion oI the 60s, the
st
21 century has seen a miraculous resurgence oI the same. Going by the geek look, Ray Ban
WayIarers have garnered a huge Ian Iollowing by the masses, typically the youth. This evergreen
asymmetric style by Ray Ban, once the mecca oI style in the 70s, lost its way out in the 90s. Nowit
is in vogue again and the WayIarers cannot serenade the younger consumers enough. They are
also better tweaked with today's requirements as the 'Iunk-element' in them has been revamped by
way oI more colorIul designs. But they are as beautiIully juxtaposed with the past as they are with
the present.
Method
The ultimate question being asked in the present study is iI the youth is keen on reviving Old-
school trends in Iashion, music, gaming, language et cetera. And iI the previous question is
answered aIIirmatively, what is their inspiration behind doing so? In other words, it can be said
that the present research looks at uncovering the Iactors that govern the youth's inclination
towards retro trends. Since age oI the consumers is being narrowed to the youth, it would be
interesting to study the role oI gender in its receptivity to back in time styles. The awareness and
responsiveness levels oI young Iemale and male consumers can be compared to understand the
Old-school revival.
Old-School for the New Youth Why is today's urban youth bringing Old-School trends back? An Indian Perspective
75
For the purpose oI empirical research, the research hypothesizes the Iollowing:
Ho: The younger urban Indian consumers are not keen on reviving Old-school trends
H1: The younger urbanIndian consumers are keen on reviving Old-school trends
H2: Old-school trends are promoted more by young urban Indian Iemales than young urban
Indian males
An online survey was conducted to gauge the Old-school sentiment among the young consumers
in India. The survey comprised a mix and match oI closed and open ended questions so as to
Iacilitate preciseness and also leave room Ior imagination in the process. Arandom sample oI 45
respondents was considered and the ratio oI male to Iemale respondents was tried to be kept
consistent so as to compare their involvement with old-school trends and avoid the scales tipping
in Iavor oI any one gender. Basic statistical percentages were employed as the response
barometer.
Analysis and Findings
The basic line oI diIIerentiation in the research was on the basis oI gender and its respective
involvement in the revival oI old-school trends among urban Indian youth. This was the pivot
around whichvarious analyses were made and conclusions reached.
Although the age bracket Ior the survey was conIined to 16-39, a majority (75.6 ) oI the
responses came in Irom the 22-27 age group (reIer to table and chart 1.0).
Most oI the inIormation was collected Irom the leading Indian metropolitans like Delhi, Mumbai
and Bangalore, as it is practicable to extrapolate the revival and acceptance oI old-school trends
Table 1.0
Age
Gender
Answer Options Male Female Response Response
Percent Count
16-21 3 4 15.6 7
22-27 15 19 75.6 34
28-33 3 0 6.7 3
34-39 1 0 2.2 1
answered question 45
skipped question 0
Age group of the respondents
Chart 1.0
Age group of the respondents
by the urban Indian youth, witnessed in these cities, to other tier 1 and 2 cities oI India (reIer to
chart 1.1). The respective cities are represented by their states in the tables and charts and show
participation levels oI male and Iemale respondents in each state.
State-City wise representation of the respondents (Cender)
Although the concept oI global revival oI past trends has been studied by many researchers in the
past under heads like nostalgia and retro marketing among others, it was imperative to understand
what the respondents thought oI the present research, as it was being conducted under the old-
school umbrella. To this end, 95.6 oI the respondents, when asked howthey deIined old-school
trends, pointed at them as styles/products/trends oI the past (reIer to table and chart 1.2).
1able 1.2
State-City wise representation of the respondents (Cender)
1able 1.2
What is your deIinitionoI Old-School?
Gender
Answer Options Male Female Response Percent Response Count
An old place to study 1 1 4.4 2
Aschool Ior the old 0 0 0.0 0
Styles/products/trends oI the past 21 22 95.6 43
skipped question 0
Relevance of the respondents' definition of old-school
Chart 1.2
Relevance of the respondents' definition of old-school
50
State
31.8
43.5
18.5
26.1
13.6
8.7
4.5
13.0
0.0 0.0
Karnataka
Delhi
Maharashtra
Gujarat
All Other Responses
Male
Female
40
30
20
10
0
77
The primary purpose oI the study was to explore iI the young urban Indian consumer was
interested in reliving the past via old-school styles witnessed across a breadth oI media and
liIestyle choices. The survey unraveled that 55.6 oI the respondents oI the survey were
'moderately' interested in sporting a look or style oI the past (reIer to chart 1.3). The research also
aimed at understanding iI the old-school trends were propagated more by young urban Indian
Iemales as opposed to their male counterparts. The study revealed that out oI the total sample size
56.5 oI the Iemale respondents were 'moderately interested' in sporting a look or style oI the
past. This Iigure was moderately higher than 54.5 oI the male respondents with a similar
response. 8.7 oI the Iemale respondents were 'extremely interested' in adopting old-school
styles as opposed tonil by the male respondents.
Chart 1.3
Inclination of the urban Indian youth toward old-school trends and styles
The areas where the urban Indian youth witnessed the retro trends most were also central to
exploration in the study. The common trend areas were represented by Automobiles, Books,
Fashion, Food, Gaming (video), Language, Movies, music and others could be speciIied (reIer to
chart 1.4). For 82.6 oI the Iemale respondents, there was a tie between movies and Iashion
where old-school trends were majorly witnessed. The choices by Iemales were supported by
examples oI old-school revival in high waist trousers, tweed jackets with suede elbow patches,
big Ilowery prints, big Iramed geek glasses, bell bottoms, ripped denim, contemporary but back
in time movies like Dabangg, Action Replayy among others.
Chart 1.4
Areas where old-school styles are witnessed and possibly adopted by urban Indian youth
Least
Extremely
Indifferent
Less
Moderately
How keen are you on sporting a look or style of the past?
56.5
4.5
22.7
4.3
8.7
13.0
17.4
Male
Male
4.5
Gaming (video)
Food
Books
Language
Automobiles
Music
Fashion
Movies
Female
Female
18.2
54.5
60
100
80
60
40
20
0
40
20
0
9.1
18.2
27.3
45.5
72.7
77.3 72.7
73.9
82.6
82.6
30.4 30.4
17.4 17.4
17.4
Which area have your encountered these old-school/retro trends in?
This was closely Iollowed by music suggested by 73.9 oI the Iemale respondents. For 77.3 oI
the male respondents, the areas were topped by movies, closely Iollowed music and Iashion at
72.7. The male choices were supported by more examples oI how old-school music was
resurIacing amidst the younger male population in India (with reIerences to disco beats, classic
rock, lyrics, rhythm etc.) The Iigures are suggestive oI the Iact that more young Indian Iemales are
likely to adopt old-school trends in Iashion and movies. Similarly, more young Indian males are
likely to adopt old-school styles showcased in movies.
The objective oI this study was also to Iind out about the inspiration and reasons among the urban
Indian youth to bring back old-school styles in Iashion or music Ior instance. According to prior
studies with boomers and generation Xers, it was Iound that it was mostly nostalgia Ior the past
that spurred the above junta into Iollowing retro trends and making old-school purchases. Since
this study Iocused on the urban Indian youth (16-39), a majority oI the responses (51.1 )
indicated that the prime reason to adopt or Iollowold-school trends was that 'it Ielt hip and stylish'
(reIer to table 1.5).
1able 1.5
Why the urban Indian youth adopts old-school trends
According to chart 1.5, (52.2) oI the Iemale respondents suggested that they Iollowed/adopted
old-school trends since 'it Ielt hip and stylish'. Nostalgia ranked at 30.4 among the Iemale
respondents. 50.0 oI the male respondents attributed the same reason oI old-school 'Ieeling hip
and stylish' as their inspiration behind adopting these trends. On the nostalgia Iront, male
respondents rankeda little higher than their Iemale counterparts at 36.4.
Chart 1.5
Why the urban Indian youth adopts old-school trends (gender-wise)
What in spires you to adopt/Iollowan old-school trend?
Gender
Doesn,t inspire me at all 4 4 17.8 8
Nostalgia 8 7 33.3 15
It Ieels hip and stylisht 11 12 51.1 23
My Iriends do it 2 2 8.9 4
skipped question 0
What inspires you to adopt/follow an old-school trend?
9.1
0
20
40
My friends do it Doesn't inspire
me at all
No stalgia It feels hip and
stylish
60
8.7
18.2
17.4
36.4
30.4
50.0
52.2
Male
Female
79
It could be inIerred Irom the same that by adopting old-school trends, the younger Indian
generation can discover the 'era oI bygones' Ior itselI, which is well tweaked with the present
requirements. These trends are almost like a repository oI mix and match styles that have a lot oI
novelty in them and hence appeal to the urban Indian youth. It is not so much a sentimental
longing Ior the past as it is a treasure hunt to see what the past can oIIer.
Along with deducing possible reasons Ior old-school revival among the Indian youth, it was also
important to understand the perception oI the same target group toward a style that was rejected in
the past as being too hackneyed and then later serenaded as a must have once it got tagged as
vintage or old-school. To this end, 62.2 oI the respondents in the survey (majority) indicated
that an old artiIact touted as anold-school product or style 'was really cool' (reIer to table 1.6).
1able 1.
Perceptual associations with old-school styles
65.2 oI the Iemale respondents gave credence to the 'old-school being really cool' notion as
opposed to 59.1 by their male counterparts (reIer to chart 1.6). This is suggestive oI the Iact
that even iI those styles that phase out a certain point in time, have a lucrative chance at making a
comeback among a diIIerent age group oI consumers. The reasons are the shiIts in the perceptual
value oI the styles to the new target consumers and how well this value gels in with the modern
requirements.
Chart 1.
Perceptual associations with old-school styles
Although there was greater inclination in Iemale respondents oI the study to sport a style or look oI
thepast as opposedtothemalerespondents, yet thedesiretoadopt comebackstyles was witnessedin
products that could be easily accommodated by both genders. These gender neutral styles or 'a guy-
girl thing' as designated in the survey ranged Iromgeek glasses, ConverseAll star sneakers, tapered
denim, video games and some expressions in language (reIer to table 1.7). OI course, the examples
mentioned below do not exhaust the universal set oI such trends, but attempts have been made to
extrapolate on Iindings Irom very common examples oI gender neutral old-school styles, to what
might constituteageneral senseoI old-school adoptionamongtheurbanIndianyouth.
Astyle that got outdatedin the 90s is in vogue nowas old-school. Howdo you react?
Gender
IndiIIerent toward it 9 5 31.1 14
Old-school is really cool 13 15 62.2 28
I don't like it at all 0 1 2.2 1
I only support new things 0 2 4.4 2
skipped question 0
Astyle that got outdated in the 90s is in vogue now as old-school.
How do you react?
100
80
60
40
20
Male Female
59.1
65.2
21.7
40.9
8.7
4.3
0
Old-school is
really cool
Indifferent toward it
I only support
new things
I don't like it at all
1able 1.7
Prevalence of gender neutral old-school trends
While the younger Indian generation is keen on embracing the trends oI the past, it doesn't seem
too keen to compromise on the Iunctional modernity oI the same styles (reIer to table 1.8). That is
to say, that a majority oI the respondents (84.4 ) suggested that in adopting a certain style or
product oI the past, while they would love Ior it to retain its old-school style in built or
architecture, they would want it to be technologically in tune with the times. 91.3 oI the Iemale
respondents corroborated that the above mentioned was 'the best combination'. 77.3 oI the
male respondents had a similar view(reIer to chart 1.8).
1able 1.8
1he ideal old-school product
Chart 1.8
1he ideal old-school product (gender-wise preference)
Waht's your experience withold-School trends?
Take you pick on these Iive old-school trends
I call it
Aguy thing Agirl thing Aguy-girl Response Count
Geek Glasses (big and bold Irames 22.7 18.2 59.1(26) 44
Ior casual purposes)
Converse All star sneakers 20.9(9) 7.0(3) 72.1(31) 43
Tapered Denim 25.0(11) 13.6(6) 61.4(27) 44
Mario Brothers 42.9(18) 2.4(1) 54.6(23) 42
Boo Ya! (Expression) 26.2(11) 19.0(8) 54.8(23) 42
skipped question 0
Do you like an old-school product that has yesterday's style quotient and today's technology and
convenience?
Gender
This is the best combination 17 21 84.4 38
No. I like it old in every way 1 1 4.4 2
What's old-school
without old technology 4 1 11.1 5
skipped question 0
100
80
60
40
20
0
Male
Female
No. I like it old
in every way
What's old-school
without old technology
This is the best
combination
Do you like an old-school product that has yesterday's style quotient and
today's technology and convenience?
4.5
4.3
18.2
4.3
77.3
91.3
81
Conclusion
Based on the Iindings Irom the survey and the sub-sequential analysis, the null hypothesis that the
younger urban Indian consumers are not keen on reviving Old-school trends is rejected. The data
presented and analyzed in the research corroborate the inclination oI the target segment to relive
the old-school era by styles and trends oI the past. Moreover, the second hypothesis that old-
school trends are propagated more by young urban Indian Iemales as opposed to their male
counterparts stands to good reason and is accepted. The data presented and analyzed in the
research bolster the same. As was deduced in the previous sections, there is greater prevalence oI
gender neutral old-school styles among the target segment.
The prime inspiration oI the younger generation oI consumers and the urban Indian youth
speciIically in reviving old-school trends is more exploratory in nature as opposed to nostalgia.
Styles oI the past present a wonderIul opportunity to the youth to experiment with the styles oI the
older era. But this rendezvous with the past and the usage oI these products is highly
contemporary andlacedwithmodernity.
References:
Brown, Stephen, Robert V. Kozinets, and John F. Sherry, Jr. (2003) 'Sell Me the Old, Old
Story: Retromarketing Management and the Art oI Brand Revival, Journal oI Customer
Behavior, 2(June), 85-98.
Barrager, D. (1993). RetroPower. Brandweek, Vol 34, 11, March, 15.
Loveland, Smeestars, and Mandel. (2010). Still preoccupied with 1995: The Need to Belong
and PreIerence Ior Nostalgic Products. Journal oI Consumer Research, Vol 37, 3, April, 15.
Silverman, I. (1995). Status loses Stature among Japanese. Advertising Age, Vol 66, 13,
March, 27.
Rousseau, G.G., Venter, D.J.L. (1999). The InIluence oI Nostalgia on Consumer PreIerence.
Journal oI Industrial Psychology, 25(2), 36-42.
Web resources
Trends with nine lives (n.d.). Retrieved on September 13, 2010, Irom
http://www.synovate.com/changeagent/index.php/site/Iullstory/trendswithninelives/
Newschool takes onold-school Iashion (n.d.) Retrieved on September 14, 2010, Irom
http://www.examiner.com/generation-x-in-dallas/new-school-takes-on-old-school-Iashion
Language oI the 90s (n.d.). Retrieved on September 14, 2010 Irom
http://www.inthe90s.com/generated/terms.shtml
Survey resources andgraphs
http://www.surveymonkey.com
Human Resource Efficiency Indicators of Public Sector Banks-
Acase study of State Bank of India in Uttarakhand
R. Datta`
Prof. R.R. Nautiyal ``
* Guest Lecturer, Department oI Economics, HNBGarhwal University,Srinagar.
e-mail: lakshmi23vishnurediIImail.com
** ProIessor & Head, Department oI Economics, HNBGarhwal University, Srinagar
e-mail: rrnautiyalyahoo.in
Abstract
Human resources oI a bank play one oI the most pivotal
roles in determining the eIIiciency oI the bank. Banks
have to understand that the capital and technology-
considered to be the most important pillars oI banking
are replicable, but not human capital. ThereIore human
capital oI a bank should be seen as a valuable resource
Ior the achievement oI competitive advantage. In this
paper an attempt has been made to Iind whether the
geographical variations oI the branches have any impact
on the Human Resource eIIiciency indicators and assess
the impact oI geographical variations on work load oI
managers and direct communication oI the branch
managers with the public.The paper is a case study
based on 102 branches oI State Bank oI India in
Uttarakhand. Empirical results suggest that proper
planning and communication at the branch level is the
major Iactor determining their HR eIIiciency. A
signiIicant relationship was Iound to exist between
indicator oI HR eIIiciency and type oI branches. Also
type oI branches based on rural, semi urban, urban
segregation was Iound to have a signiIicant association
with the hours oI direct public dealing by the managers.
Introduction
The core Iunction oI human resource development in the banking industry is to Iacilitate
perIormance improvement, measured not only in terms oI certain Iinancial indicators oI
operational eIIiciency but also in terms oI quality oI Iinancial services provided. The skill level,
attitude and knowledge oI the personnel play an important role in determining the
competitiveness oI a bank. Banks have to understand that the capital and technology-considered
to be the most important pillars oI banking are replicable, but not human capital, which needs to
be viewed as a valuable resource Ior the achievement oI competitive advantage. The primary
concern oI the bank should be to bring in proper integration oI human resource management
strategies with the business strategies. It should Iaster cohesive team work and create
commitment to improve the eIIiciency oI its human capital. More than operational skills, today's
banking call Ior certain `soIt skills' to attend the needs and requirement oI the customers at the
1
counter.
2
In the context oI Indian Public Sector banks, E. D' Souza (2002) observes that with the implicit
insurance by government oI support in times oI Iinancial diIIiculty the public sector banks
sensitivity to eIIiciency has been reduced which has resulted in a growth in establishment costs at
the expense oI provisioning and expenditures on technological upgradation. It is only when
public sector banks perceive that the government will not be underwriting their decisions and that
they Iace a hard budget constraint, will they have an incentive to tackle the problem oI
83
Human Resource Efficiency Indicators of Public Sector Banks- Acase study of State Bank of India in Uttarakhand
establishment costs and be able to upgrade technologies, provide better quality services, and
become more eIIicient. The motivation Ior employees in an eIIiciently run organization cannot be
solely based on rewards such as power and prestige as these are not linked to the perIormance oI
an organization. The challenge Ior public sector banks accordingly is to upgrade technology,
downsize, shiIt the composition oI the employees towards oIIicers, introduce multitasking, and a
stronger linkbetweenpay and perIormance.
3
Berger and Mester (1997) utilized data Irom 6000 U.S. commercial banks to estimate the impact
oI bank size, organizational Iorm and governance, age oI the bank, market characteristics, and
state geographic restrictions on competition on three perIormance measures: total cost divided by
gross assets, net income divided by gross assets, and net income divided by equity. They Iound
that most oI the variance in measured eIIiciency remained unexplained and attributed this to
unmeasured Iactors such as differences in managerial ability. They concluded that the sources oI
the variationinbank eIIiciency remain a 'black box.
Banking by its nature is an inIormation (intensive) and human capital intensive industry. And the
eIIiciency oI Public Sector Banks is one oI the most talked about issues in today's banking
industry. ThereIore in this paper we have tried to examine whether type oI branches based on the
geographical segregation oI public sector banks have any eIIect on certain parameters oI human
resource eIIiciency.
4
In a study conducted in Madhya Pradesh (Jones, Williams, Nilsson & Thorat, 2007), it was Iound
that attitudes oI branch managers shape the branch lending behaviour. It is shown that training
can bring about attitudinal change, which in turn is reIlected in behaviour and social impact.
5
Berger and Mester's (1997) Iindings suggest that managerial ability may play an important role
in explaining bank perIormance. While the ability oI the bank's managers at the Iirm or
headquarters level can certainly impact the bank's perIormance, much oI a bank's activities occur
at the branchlevel.
Hence the paper attempts to analyse the perIormance oI the bank based on the managerial ability
oI the branch managers in the branches oI SBI in the state oI Uttarakhand. In this paper our
endeavor is to assess the human resource eIIiciency oI State bank oI India branches in the state oI
Uttarakhandbased on geographical segregation.
Objectives
The main objectives oI the paper are
(i) To Iind whether the geographical variations oI the branches have any impact on the HR
eIIiciency indicators.
(ii) To assess the impact oI geographical variations on work load oI managers and direct
communication oI the branch managers with the public.
Methodology
The study is based on primary data. Out oI 22 Nationalised banks, 3 Regional Rural Banks, 2
Cooperative Banks and 12 Private Sector Banks in Uttarakhand , only SBI has been selected Irom
the 22 Nationalised Banks Ior the purpose oI the study. The main justiIication behind choosing
SBI Ior this study is that SBI works as 'lead bank' in 9 out oI 13 districts oI Uttarakhand namely
Almora, Bageswar, Chamoli, Champawat, Pithoragarh, Pauri, Rudraprayag, Tehri Garhwal and
Uttarkashi. Moreover, out oI all the commercial banks- nationalised and non nationalized, it has a
maximum network oI 321 ( as on March 2009) branches spread over all the 13 districts. Though
SBI is the 'lead bank' in 9 districts but in the other Iour districts namely Dehradun, Haridwar,
Nainital and Udham Singh Nagar it has a very good networking oI branches . It is thereIore quite
evident that SBI has a major role to play in the economy oI Uttarakhand and so SBI was chosen as
a representative oI commercial banks Ior the purpose oI this study. Primary data was collected
through a survey Irom all the 13 districts oI the state through a Iramed interviewschedule. Out oI
321 branches oI SBI in the state, 102 branches oI SBI was selected covering all the districts using
stratiIied sampling method. The survey was carried out in 2008 and 2009 and covered 64(62.7 )
rural, 26 (25.5) semi urban and 12(11.8) urban branches. Figure 1.1 presents the distribution
oI branches oI SBI inthe sample andin the state Ior 2008.
Figure 1: Distribution of types of branches of SBI in the sample and population(state).
Comparing the bars in Figure 1 it is clearly understood that the sample has been a good
representative oI the population Ior the study as Iar as types oI branches in terms oI geographical
location is concerned. However rural branches have been some more in the sample compared to
semi urban branches to get the eIIect oI the interior branches located in high altitudes, remote
areas oI the state.
ThesamplingdesignbasedonthedistributionoI branches across districts is shownthroughTable1
Table 1: Districtwise population branches of SBI and sample-the sample design
Source: The data regarding the population branches was obtained Irom . *Number
oI sample in each district is almost 35 percent oI the population, chosen based on geographical
representationi.e., urban, semi urban and rural.
In this paper the variable used to measure the work load oI managers is number oI signatures done
by the manager per day. Hours oI public dealing per day by the manager tries to capture the
communication oI managers with the public directly. Empirical results were obtained using SPSS
(version 15).
Districts Population branches Number oI Samples*
(as on September 2007)
Almora 29 10
Bageswar 9 4
Chamoli 20 8
Champawat 8 3
Dehradun 37 13
Haridwar 21 7
Nainital 14 5
Pauri 36 13
Pithoragarh 26 9
Rudraprayag 13 5
Tehri 29 10
Udham SinghNagar 26 9
Uttarkashi 15 6
Total 283 102
www.rbi.org.in
85
Analysis
In this section certain parameters oI human resource eIIiciency have been examined to
understand howIar the branches oI SBI in the state are perIorming eIIiciently. The data regarding
indicator oI Human Resource (HR) eIIiciency and the responses oI branch managers is presented
in table 2.
Table 2 : Indicatorof HRefficiency-analysis of the sample.
Source: Based on primary data
From table 2 it is observed that 38 (37.3 percent) respondents said that proper planning and
communication at the branch level was the major Iactor determining their HReIIiciency while 20
(19.6 percent) respondents were oI the view that proper distribution oI load oI work helps
increase the eIIiciency. Only 9 (8.8 percent) managers were oI the opinion that proper
inIrastructural Iacilities helps to increase the HReIIiciency at the branch level. 15 managers said
that proper appraisal oI the services and incentives Ior employees can improve the HReIIiciency
while other 15 (14.7 percent) said that transIer procedure is an important Iactor in HReIIiciency.
Only 5 (4.9 percent) respondents had other opinions. We thereIore carried a chi-square test (since
these are categorical variables) to Iind iI there exists any association between the type oI branches
based on geographical regions (urban, semi urban and rural) and HReIIiciency indicator. In order
to IulIill the basic assumption oI chi square test that the expected count is not less than 5 in any cell
we reduced the degrees oI Ireedom by transIorming the categories oI HR eIIiciency indicator as
Iollows.
Table: 3 Types of branch and indicatorof HRefficiency a crosstabulation
H : Type of branch does not have significant effect on indicatorof HRefficiency
0
Degrees oI Ireedom 2. Table value at 1 percent level oI signiIicance 9.21
Table 3 shows that a significant association exists between indicator of HR efficiency and
2
type of branches. The calculated _ (Chi square) value is 9.948 which is higher than the table
value at 1 percent level oI signiIicance (9.21) Ior 2 degrees oI Ireedom. ThereIore the null
HReIIiciency indicator Frequency Percent
Proper planning and Coordination 38 37.3
Proper DistributionoI Work load 20 19.6
InIrastructural Iacilities 9 8.8
Appraisal oI services 15 14.7
TransIer Policy 15 14.7
Others 5 4.9
Total 102 100.0
Type oI Branch Proper planning, Others(InIrastructural Total
communication Iacilities, Appraisal oI
and distribution oI services, TransIers
work and others)
Rural Count 43 21
Expected Count 36 28 64
Semi Urban Count 12 14
Urban Count 3 9
Total Count 58 44 102
Calculated chi square( ?2 )value 9.948
hypothesis (H ) is rejected and it is concluded that a signiIicant relationship exists between
0
indicator oI HReIIiciency and type oI branches. This implies that the location oI the branch is an
important Iactor indetermining the indicator oI HReIIiciency in the SBI branches in the state.
In order to assess the work load oI managers, the number oI signatures done by the manager each
day was chosen as a variable. The Irequency is presented in table 4
Table 4 Frequency of numberof signatures done by the managerperday in the sample
Source: Basedon primary data
It was Iound Irom the sample that out oI 102 branch managers, 21 (20.6 percent) had to do
signatures below 50 signatures per day while 39 (38.2 percent) managers did in the range 51 to
100. 34 (33.3 percent) managers said that they had to sign between 100 to 200 documents per day
on an average and only 8 (7.8 percent) managers said their average signatures per day was above
200.In order to assess the work load oI managers based on type oI branches the chi-square test was
undertaken. To reduce the degrees oI Ireedom, the category oI signatures was divided as Iollows:
Table: 5 Types of branch and work load -crosstabulation.
H : Type of branch does not have significant effect on work load
0
Degrees of freedom 2. Table value at 1 level of significance 9.21

2
The calculated value oI in table 5 is 15.65 which is much greater than the table value (9.21) at 1
percent level oI signiIicance Ior degrees oI Ireedom 2. ThereIore the null hypothesis that there is
no association between the type oI branches and work load oI managers is rejected. It is thereIore
concluded that type oI branches based on geographical location is an important Iactor oI
determining the work loadoI managers.
In order to Iurther understand the communication oI managers in terms oI public dealing, they
were asked on an average how many hours they have to spend directly with the public. The
Irequency is presentedin table 6.
Frequency oI number oI signatures done Frequency Percent
0 - 50 21 20.6
51 - 100 39 38.2
100 - 200 34 33.3
More than200 8 7.8
Total 102 100.0
Type oI Branch Less than More than 100 Total
100 signatures/ day signatures/day
Rural Count 47 17 64
ExpectedCount 38 26
Semi Urban Count 7 19 26
Expected Count 15 11
Urban Count 6 6 12
Expected Count 7 5
Calculated chi square( 2 )value 15.65
87
Table 6: Hours in public dealing by the managers-sample analysis
Source: Based on primarydata
It is Iound that only 1 (1 percent) manager in the sample dealt less than 3 hours while 10 (9.8
percent) managers dealt between 3.1 to 6 hours. Out oI 102 managers, 91 (89.2 percent) managers
said they dealt more than 6 hours directly with the public. To examine whether there exists any
relationship between type oI branch and hours oI public dealing a chi-square test was carried out
as shown in table 7.
Table 7: Type of Branch and Public dealing of managers-a cross tabulation
H : Type of branch does not have significant effect on public dealing of managers
0
Degrees of freedom 2. Table value at 1level of significance 9.21
The calculated value in table 7 is 19.36 which is greater than the table value at 1 percent
level Ior signiIicance Ior degrees oI Ireedom 2. Thus the null hypothesis is rejected that there is no
association between type oI branch and hours oI public dealing. It implies that type oI branch has
signiIicant eIIect on the hours oI dealing with the public directly.
Results
Thus Irom the above study the results that emerge are
Majority oI the respondents Ielt that proper planning and communication at the branch level
was the major Iactor determiningtheir HReIIiciency.
AsigniIicant relationship exists between indicator oI HR eIIiciency and type oI branches.
This implies that the location oI the branch is an important Iactor in determining the indicator
oI HReIIiciencyin the SBI branches in the state.
Almost 72 percent oI the managers were oI the opinion that the have to do 50-200 signatures
per day in the branch indicating the number oI various Iiles, documents that they have to
examine.
Type oI branch based on geographical region is an important Iactor oI determining the work
load oI managers (where work load is measured by the variable 'number oI signatures done
by the manager per day')
It was Iound that 89.2 percent oI the branch managers have to deal with the public directly Ior
more than6 hours per day.
Type oI branches based on rural, semi urban, urban segregation has a signiIicant association
Hours in public dealing Frequency Percent
Less than3hours 1 1.0
3.1 - 6hours 10 9.8
6 hours andmore 91 89.2
Total 102 100.0
Type oI Branch Below6 hours More than 6 hours Total
Rural Count 18 46 64
Semi Urban Count 9 17 26
Urban Count 12 0 12
ExpectedCount 5 7 12
Calculated chi square value 19.36
chi square
with the hours oI dealing with the public directly by the managers.
Discussion and suggestions
Banking by its nature is an inIormation (intensive) and human capital intensive industry.Astudy
6
by Anand (2000) points out that when the turnover per employee amongst banks in
urban/metropolitan areas are compared, Ioreign and private banks are still doing more than
twice better than the public sector banks in their ability to mobilize deposits and disburse
advances per employee.This led us to raise the question whether public sector banks are
lagging behind in human resource eIIiciency or is it the obligation oI social banking like
branch expansionin remote areas that acts as a constraint Ior the eIIiciency.
Banks occupy an exclusive position among the Iinancial institutions. This exclusiveness oI
banking arises on account oI the Iact that among the various Iinancial institutions banks
alone have the ability to create money in the Iorm oI credit and thereby provide the economy
with additional purchasing power and liquid invisible resources. Commercial Banks act as
Iinancial intermediaries i.e. intermediaries oI saving and investment. Traditionally, a bank
has been considered basically a business unit that aims at maximizing its own proIit while
undertaking its activities, its services to society being incidental to the basic objective oI
maximizing the proIits. This orthodox viewon the nature oI a bank has undergone a change in
recent years and the banking oI a country is nowbeing considered as constituting essentially
and Iundamentally the Iinancial inIrastructure oI the economy rather than as a mere
agglomeration oI proIit seeking business institutions. The role oI Public Sector Banks
becomes harder as they have to IulIill certain social obligations along being 'commercial'.
Hence this paper made an analysis to capture the eIIect oI geographical location on certain
HReIIiciency indicators.
The main suggestions that emerge Irom the study are:
As HReIIiciency indicator changes according to the type oI branches based on geographical
location, thereIore policy Iormulation in HR division should take into consideration the
Iactor that the area where the employee is posted. Special incentives should be there Ior
posting in remote area branches.
Direct public dealing by the managers was Iound to be quite high in the branches. Adequate
employees should be there in the branches so that the manager deals with only the special
cases directly with the customers. This will help the manager in sparing more time Ior
employee coordination, distribution oI work load, planning at branch level etc.
Work load oI the employees depend very much on the location oI the branch, hence the HR
division should pay special attention in allotting employees based on the kind oI location oI
the branch. For example some branches in Uttarakhand at very high altitudes have mass oI
pilgrims during some peak seasons which are even more than some urban branches|as we
understood Irom the interviewat Badrinath SBI branch|. So it is necessary to Irame policies
likewise.
Planning and coordination at the branch level was Iound to be oI paramount importance. The
plan and target set by the central level or regional level oIIices oIten cannot be implemented
due to area speciIic problems which varies Irom branch to branch areawise, blockwise,
districtwise etc. ThereIore, planning should be made more decentralized Ior the best result.
More autonomy to be given to the managers and district level heads to deal with area speciIic
problems andIormulate strategies likewise.
References:
1. S. Bhat, Managing Challenges in Banking Industry. Article (2005) published in www.
India MBA.com.
2. D. Souza , Employment and Human Resource Practices in Public Sector Banks in the
Nineties, Paper published in Shuji Uchikawa (ed.) - "Labour Market and Institution in
89
India: 1990s and Beyond", Institute oI Developing Economies, Japan, March, 2002.3.
Berger and Mester, Inside the black box: What explains diIIerences in the eIIiciencies oI
Iinancial institutions?, Journal oI Banking & Finance, Elsevier, vol. 21 (7),1997, pages
895-947, July.
4. Jones, Williams, Nilsson and Thorat, Training to address attitudes and behaviour oI rural
bank managers in Madhya Pradesh, India: a programme to Iacilitate Iinancial inclusion.
Journal oI International Development, vol. 19 issue 6,2007, pages 841-851
5. Anand, Banking Sector Employment in India: Emerging Trends and Pattern, Indian
Journal oI Labour Economics, 43(4), 2000, pp. 1001-1012.
6. A.D. Athanassopoulos. An optimisation Iramework oI the triad: Capabilities,service
quality and perIormance. Working paper, Warwick Business School, University oI
Warwick, Coventry, CV4 7AL, U.K., 1997.
7. A. D. Athanassopoulos, A. C. Soteriou, and S. A. Zenios. Disentangling within - and
between - country eIIiciency diIIerences oI bank branches. Working paper no. 97-10,
Department oI Public and BusinessAdministration, University oI Cyprus, Kallipoleos 75,
Nicosia, Cyprus., 1997.
8. Joshi, V. & I.M.D. Little - "India's Economic ReIorms 1991-2001", OxIord University
Press, N. Delhi, 1997.
9. Lazear, E.P. & S. Rosen. 'Rank-Order Tournaments as Optimum Labour Contracts,
Journal oI Political Economy, October, 89, pp. 841-64,1981.
10. Mankidy, J. 'Human Resource Management in Banks: Need Ior a Paradigm ShiIt,
Prajnan, Vol. XXVIII, No. 4, 357-372, 2000
th
11. Patil, R.H. "Contemporary Banking: Competition and Markets", Speech at 17 Bank
Economists' ConIerence, in N. Jadhav (ed.) - "Challenges to Indian Banking,
Competition, Globalization, and Financial Markets", Macmillan, 1996.
12. Pillai, R.V. " Report oI the Committee Ior Standardization oI Pay Scales, Allowances and
Perquisites oI OIIicers in the Nationalized Banks with ModiIications", Government oI
India, NewDelhi,1974.
13. A. Berger and D. B. Humphrey. EIIiciency oI Iinancial institutions: International survey
and directions Ior Iuture research. European Journal of Operational Research, pages xxx-
yyy, 1997.
14. A. N. Berger, J. H. Leusner, and J. J. Mingo. The eIIiciency oI bank branches. Working
paper no. 9427, The Wharton Financial Institutions Center, Federal Reserve Board, 20th
and CSts., N. W., Washington, August 1994.
University-Industry Linkage: In Search of a Pragmatic
Approach for Indian Higher Education
Dr. Ashutosh Priya`
Dr. K. M. 1oshi``
Dr. A. Kumar```
Introduction:
One oI the world's largest economies, India has made
tremendous strides in its economic and social
development in the past two decades and poised to
realize even Iaster growth in the years to come. AIter
growing at about 3.5 percent Irom the 1950s to 1970s,
India's economy expanded during the 1980s to reach an
annual growth rate oI about 5.5 percent at the end oI the
period. It increased its rate oI growth to 6.7 percent
between 1992-93 and 1996-97, as a result oI the Iar
reaching reIorms embarked on in 1991 and opening oI
the economy to more global competition. Its growth
dropped to 5.5 percent Irom 1997-98 to 2001-02and to
4.4 percent in 2002-03, due to the impact oI poor rains on
agriculture output. But a lavish monsoon that led to a
turn around in agriculture sector, India's economy surged
ahead to reach a growth oI 8.2 percent in 2003-04
(Dahlman & Utz, 2006). This is very clear in line with
the projections oI India's Tenth Five-Year Plan and now
the Eleventh Five-Year Plan.
It is the right time and opportune Ior India to make its
transition to knowledge economy- an economy that
creates, disseminates, and uses knowledge to enhance its
growth and development. The knowledge economy is
oIten taken to mean only high technology industries or inIormation and communication
technologies. It would be more appropriate, however to use the concept more broadly to cover
howany economy harnesses and uses newand existing knowledge to improve the productivity oI
agriculture, inIormal industry, and services and increase overall welIare. In a knowledge based
economy both economic competitiveness and improvements in quality oI liIe depend on the
eIIectiveness oI knowledge sharing between business and higher education (OECD 1996). The
need Ior reciprocal terms has become vital with reIerence to the growing Iinancial crisis and lack
oI qualitative researchand degree output.
Although higher education in India has expanded enormously since independence and enlarged
in size (Reddy, 1998) but unIortunately, this enlarged size oI the universities in India, is Iacing
Iinancial crisis, as visible in many developing countries. Over the years, the dependence oI Indian
universities on government has increased and source oI their income has declined sharply. On the
other hand universities have not been able to tap private resources Ior its development with regard
to inIrastructure, research and teaching programmes (Oza and Joshi, 1999). Since it will remain
diIIicult Ior these institutions to raise the tuition in terms oI cost recovery, alternative measures
will have to be Iocussed. In such circumstances, the look towards market and its demand will
deIinitely serve the purpose i.e. university-industry cooperation.
Universities and industry, which Ior long have been operating in separate domains, are little what
getting closer to each other to create synergies. University-industry interIace has been a
Irequently and commonly used terminology among industries, academics and government in
* Dr. Ashutosh Priya is ProIessor at Department oI Management Studies, Amrapali Institute, Haldwani
** Dr. K. M. Joshi is ProIessor in Economics at Post Graduate Department oI Economics at Bhavnagar University, Bhavnagar
*** Dr. A. Kumar is ProIessor in Management and Coordinator University and Industry linkage cell at the
Department oI Business Administration, Faculty oI Management, Bhavnagar University, Bhavnagar, Gujarat, INDIA
91
recent times. The constantly changing paradigms, in response to growing complexity oI business
environment have made these two entities to look Ior betterment through each other. It is
attributable to such Iactors as rethinking oI innovation model, promoting economic growth
through technological innovation, an emphasis on the social accountability oI science and
technology development, all leading to the Iavourable environment or cooperation between
industry andacademia.
While thinking about the diIIerent strategies regarding the relevance oI teaching and research, the
university-industry interIace has emerged in IoreIront in context oI the higher education reIorms.
Many countries especially developed have beneIited Iorm this interIace. The declining allocation
oI resources by the state Ior higher education and within the education sector has compelled the
look at private Iunding resources. The resources Irom private sector would Ilow on sustainable
basis iI the nature oI tie up is mutual beneIiciary. As a consequence, the university academic
interaction is the only long lastingprivate source oI Iunding Ior the higher education.
Along with this, university-industry interIace have increasingly been seen in a Iavourable light by
governments, given the importance oI high level continuous proIessional development and
technological innovation Ior the competitiveness oI national economies. As a result, many
countries have introduced a number oI incentives mechanisms, such as tax concessions or
matching grants in selected technological domains.
The term 'university-industry' linkage covers a variety oI realities. It is a process in which the
actors in the industrial and academic domains cooperate with each other so as to upliIt the
perIormance potential oI both domains.
-
During the past hundred years, the world's most successIul technology companies did the bulk oI
their important research work in their own laboratories. The German chemical industry created
the central research laboratory, which was replicated in the UKand the US. Internally generated
research became a critical competitive advantage: only the biggest and the richest companies
could aIIord to recruit the brightest researchers and to support them with enough money and time
to develop brilliant new ideas. Probably the best-known example oI this was Bell Laboratories,
the research arm oI the US telephone monopoly, which achieved an astonishing record oI success
in basic and applied research during the post-war period. More recently, the most successIul
Japanese companies built their reputation Ior innovation and quality on the back oI very high
levels oI investment intheir own research departments.
But in recent years, the picture has started to change radically. Long-established technology
companies have Iound themselves under attack Irom diIIerent competitors on many Ironts.
Companies that have only been in existence Ior a Iewdecades have sprung to global prominence,
oIten by exploiting other people's research. And 'not invented here has become a term oI
approval, rather thanone oI scorn. The reasons Ior the change are:
-As the complexityoI products increases, Iirms are being Iorced to conduct research
into a wider portIolio oI technologies than they can possibly manage by themselves. It has
become necessary to bring together a whole range oI diIIerent scientiIic disciplines in order to
make technological breakthroughs: it is no longer enough to be a leader in just one or two
disciplines. Merck, which has one oI the biggest research budgets oI any company in the world,
has stated that: 'The cascade oI knowledge Ilowing Irom biotechnology and the unravelling oI
the human genome to name only two recent developments is Iar too complex Ior any one
company to handle alone. Increasing global competition and technological change have Iorced
companies to move away Irom vertical integration, to Iocus on their core strengths and to
outsource a growing proportion oI their activities. Responsibility Ior R&D has oIten been
devolved Irom corporate headquarters down to individual divisions, and central laboratories
have been cut back or closed. At the same time, companies have been increasingly willing to
collaborate with outside partners oI all kinds. The big research laboratories that used to be run by
quasi-monopolies (such as AT&T, Xerox, BT, or IBM) have had to change their role in this
environment.
People and capital have both grown more mobile. Researchers have become much more willing
University-Industry Linkage: In Search of a Pragmatic Approach for Indian Higher Education
to move Irom one laboratory to another, depending on where they see the most exciting
opportunities. Venture capitalists have made it possible Ior research projects that once could only
be Iinanced by bigcompanies to be spun out and developed in newstart-up companies.
In this changing environment, universities are potentially very attractive partners Ior business.
Good university researchers operate in international networks: they know where cutting edge
work in their Iield is going on around the world. Unlike corporate or publicly owned research
Iacilities, university laboratories are constantly being reIreshed by the arrival oI clever new
researchers in the Iorm oI students, postgraduates and teachers. For this reason, governments in
many countries are attempting to build bridges between business and universities. For example,
Japan is seeking to develop the research capacity oI its university system. The country has a high
level oI investment in R&D, but a large proportion oI that work in the past has taken place within
corporate laboratories. In the new world oI open collaboration and multi-disciplined research,
what was once Japan's great strength its brilliant company-led research could now be turning
into a weakness (Lambert, 2003).
Literature Search
UnIortunately no detailed study on university-industry linkage is available with regard to the
Indian higher education, but manystudies oI developed countries are available.
The literature that analyses national systems oI innovation stresses that the innovative
perIormance oI a country, and thus its growth potential, depend upon the development oI a
balanced system oI knowledge production and distribution (Nelson, 1993; Lundvall, 1992). The
emphasis placed by these and other authors on the speciIic role played by 'knowledge' in the
process oI innovation and economic growth has become even more central since the emergence
oI the so called 'knowledge-based economies' (OECD, 1996). In a French study Autant-Bernard
(2001) Iound that public research increases private innovation both directly and indirectly by
increasing private research.
The development oI new technology Ior being cost eIIective and eIIicient is critical to the
producers' competitiveness. Firms can develop their technical capabilities and products either
based on internal research and development (R&D) or outsourcing. Although it remains
necessary to build own internal R&Dcapacity, the external sources oI technologies have become
more and more important (Aaron, 1988; FusIeld & Haklisch, 1987; Atlan, 1987; Baldwin,
Donald and Green, 1984; Wu, 1994; etc.). Firms can develop and enhance their technical
capabilities through many interIaces, including inter-Iirm cooperation, industry-research
institution cooperation, and university-industry cooperation etc. The university-industry
cooperation has been stressed and envisaged by many scholars Ior building national
competitiveness (Berman, 1990; Bartlett, 1988; Belanger, 1988; Sumney, 1989; Chan, 1990;
Barber, 1985; Chen, 1994; Wu, 1994). In the U.S. and Japan, the world number one and number
two R&D spenders, university-industry links have 'an old and honorable history. In the U.S.,
industrial Iunding Ior university research was close to 8 through most oI the 1950s, dipped to as
low as 2.5 in the late 1960s, and has been on a steady rise through 1980s and 1990s, reaching
7.1 in 1997. While such support to university research takes many Iorms Irom contracted
research to individual consulting, university-industry cooperative research centers are seen as an
eIIective means to promote the linkages between industry and university, and has been strongly
supported by National Science Foundation (Hane, 1999). In Japan, university-industry links aIter
World War II became largely inIormal and consultative, based on networks oI individuals rather
than oI institutions (Kodama and Branscomb, 1999). The recent reIorm in Japanese higher
education systems by making national universities independent non-proIit institutions has
brought visible changes inthis relationship.
Many have also studied the need Ior the industry to build the linkage and its beneIits. The access
to manpower, basic and applied research results, universities Iacilities have been widely
discussed (Atlan, 1980; Peters and FusIeld, 1982). An evaluation oI joint Australian Research
Council/Department oI Employment, Education and Training industry-linked research schemes
concluded that both universities and industrial partners were positive about their experiences
93
(Turpin et al., 1999).
The relationships and beneIits oI university-industry linkage are both direct and indirect. The
beneIits Iall in the category generated through the policies oI government, academic institutions,
researchers, and many indirect beneIits through unplanned Irame. As a result measuring and
understanding these beneIits becomes diIIicult at many lengths (Georghiou and MetcalIe, 1993;
Luukkonen, 2000).
Nature and Benefits of University-Industry Linkage
There are ample evidences oI mutual beneIits oI university interIace with industry. The Iollowing
beneIits Ior higher education institutions are perceived Irom stronger collaboration with
enterprises, bothin developedand developing countries (Blackman & Segal, 1993):
Opportunity to attract additional Iunds Ior initial teaching and research, increasing
Iinancial autonomy oI higher education institutions, especially iI governmental core
Iunding is tightly linked to speciIic academic purposes;
co-operative research with enterprises pulling in more public Iunds iI there are
governmental project Iunds Ior collaborative research o teaching programmes;
acquisitionoI or access to up-to-date equipment;
opportunities Ior staII and students to become Iamiliar with state-oI-the-art industrial
science and technology and management systems and enhancement oI their Iamiliarity
with the constraints oI industry;
improved interaction oI higher education departments and employers Ior the development
and adaptation oI (technology oriented) degree programmes;
improved trainingand employment prospects Ior students;
supplemental income Irom consulting, allowing academic staII to improve their salaries;
enhancement oI the HEI's image as a contributor to the economy.
There are several Iactors that encourage and Ioster the attitude oI industry to enhance interIace
with university. According to Atlan (1990) and Peters and FusIeld (1982) they are: (1) access to
manpower, including well-trained graduates and knowledgeable Iaculty; (2) access to basic and
applied research results Irom which new products and processes will evolve; (3) solutions to
speciIic problems or proIessional expertise, not usually Iound in an individual Iirm; (4) access to
university Iacilities, not available in the company; (5) assistance in continuing education and
training; (6) obtaining prestige or enhancing the company's image; and (7) being good local
citizens or Iosteringgood community relations.
The universities too have strong beneIits while interIacing with industry. According to Peters and
FusIeld (1982) there are several reasons Ior this interaction: (1) Industry provides a newsource oI
money Ior university; (2) Industrial money involves less 'red tape than government money; (3)
Industrially sponsored research provides student with exposure to real world research problems;
(4) Industrially sponsored research provides university researchers a chance to work on an
intellectually challenging research programs; (5) Some government Iunds are available Ior
applied research, basedupon a joint eIIort between university and industry.
The structural adjustment programme envisaged by the international Iinancial institutions
(especially IMF & World Bank) to many oI the developing countries on one side, and increase in
the competitive allocation Ior available scarce resources, have led to drastic changes in the
Iunding mechanisms Ior higher education. Governments, especially in developing countries are
making all attempts to reduce subsidies in higher education and oIIset the reduction through
private Iinancing. Under the various Iorms oI private Iinancing, the university industry
cooperation can serve as a major source, although cost recovery measures too would play a vital
role. Funding Ior research, new programmes, sustenance oI existing programmes in a period oI
crisis would be Ieasible throughuniversity industry cooperation.
The areas where linkage is Ieasible between the higher educations institutions and industry, has
increased over the period oI time. Fewmajor areas oI collaboration are as Iollows.
Sponsored students: Some company's sponsor individual students. This approach is
particularly commonin UKand USA, where service industries are in IoreIront.
Contract Research, Collaborative Research and Consultancy: In contract research, the
business pays the university researchers to undertake a speciIic task oI research on its
behalI. The industry gets the results oI research, although the industry is not actively
involved in the work. In collaborative research, the university and the business researchers
work together on a shared problem. Consultancy takes the Iorm oI expert advice or
analysis service.
Intellectual Property andTechnology TransIer: The legal Iorm oI protection Ior inventions,
brands, designs and creative works are part oI intellectual property. This includes patents,
copyrights, designs and trademarks. The technology transIer Irom universities involves
patents inmajoritycases.
Funding University Research: The business can also get the advantage through Iunding
universityresearchto create innovative products and services.
Skills: The universities can collaborate with business to produce students with particular
skills as per the requirement oI the business. This can be done through oIIering joint
courses or by actively getting involved in Iunding. The business may also oIIer training in
their Iirm to developspeciIic skills.
Case Study of Gujarat
A study was conducted to understand the opinion and attitude oI the industries towards the
concept oI university-industry linkage and their current contribution and Iuture planning in this
regard.
The companies were divided into three categories viz, large scale, medium scale and small scale.
A questionnaire was sent to each oI the Iirm selected. Nearly 123 Iirms were selected Ior the
purpose and only 42 responded. Among those who responded, the large scale constituted 14
percent large scale, 43percent medium scale and 43 percent small scale Iirms.
Almost all the Iirms except Iewsmall scale stated that they were contributing Ior the education in
the Iorm oI taxes and other measures. Some oI the large scale Iirms were also running their own
schools. All the Iirms Ielt that it was their duty towards the nation to enhance the access to
education.
Around 40 percent oI the respondents Irom large scale Iirms wanted to have some collaboration
with the higher education institutions. The pharmaceutical industries were the most ahead to
express their willingness Ior the same. This industry expressed its desire to set up laboratories and
also to collaborate Ior R&D along with the consultancy. The HR department inIormed that they
were already hiring PhD and postgraduate students through campus interviews and walk in
interviews. Some oI the Iirms in the large scale expressed their desire to get involved with the
university Ior teaching and buildingnewprogrammes as per their needs.
Some oI the medium scale Iirms have a desire to play role in the programme building within the
higher education system. They Ielt that university could help them in solving many oI their
technical problems andalso extend them the expertise in management.
Majority oI the small scale Iirms did not express their willingness to directly involve in the
universities as their Iinancial capabilities were conIined. But they wanted university to run
awareness programmes Ior these small entrepreneurs who would include knowledge regarding
patents, knowledge transIers, government policies, tax reIorms etc.
In all, the industry expressed its need to collaborate with the universities in one or the other Iorm;
to contribute in job and wealth creation, to generate higher levels oI sustainable growth, and to
promote enterprise, innovation andincreased productivity.
It was equally necessary to understand the other part oI the interIace between the two
stakeholders. Adetailed questionnaire was also sent to selected educational institutions to know
95
their current status with regard to industry's support and their Iuture aspirations with regard to
collaborations. Around eighteen higher educational institutions responded. Among all the
respondents, only 7 percent oI the institutions had received some sort oI Iinancial support. This
assistance was largely Ior research and consultancy. Around 2 percent oI the institutions received
partial assistance Ior their recurring expenditure too. But these 2 percent institutions were
managed by the industrialist. The major industrial support came in the Iorm oI internships. Most
oI the institutions where internships are compulsory Ior the students stated that industrial support
Ior were highly appreciable in this regard. UnIortunately the interIace was less or more conIined
to proIessional programmes only. The general courses do not have signiIicant contribution
coming Irom the industry.
As most companies employ skilled trained manpower, it was expected that they would provide
considerable support to the development oI technical institutions. However, the responses
revealed that none oI the companies had provided physical or Iinancial support to technical
institutions, which oIIer joboriented programmes.
Overall study indicates that in spite oI very substantial mutual beneIits, interaction between
companies and institutes is at lowebb. Although both knowthe beneIits oI collaborating but it has
not been realized.
Some Policy Suggestions
The university industry linkage works on bilateral gains and it has been recognized well by the
concerned stakeholders involvedin the process.
Each university/higher education institution needs to identiIy the areas where they can build
an eIIective university-industry relationship. They need to revisit their mission and academic
model to identiIy the right interIace mix.
The main barrier to greater consultancy is time limits set by individual institutions along with
the lack oI reward structures Ior academics that bring in extra research income as a result oI
consultancy. The universities should Irame concrete policies oI encouraging nature Ior the
consultant through high incentives. The policies have to be oI diIIerentiated scope. Asingle
policy Ior all would not be Ieasible.
The issue oI concern in contract research is connected to the price that institutions charge
industry Ior such work. The universities should go Ior Iull economic costs Ior the contract
research.
While going Ior collaborative research partnerships it is important to determine at the outset
the ownership and exploitation rights Ior any intellectual property (IP) that may be generated.
Although the negotiations on the terms and conditions oI IP ownership and exploitation can
be time consuming and costly, but model contracts have to be developed Ior the same. It
would be useIul to establish a simple set oI ground rules Ior IPownership, which would be the
deIault position on which to build most negotiations. There must be maximum Ilexibility in
the use oI IP to exploit as wide a range oI areas as possible. Academics should continue to
receive incentives Irom universities to commercial IP. Ownership should go by the length oI
contribution.
Inorder toaddress the above issues andother problems relatedtouniversityindustrylinkage, it is
recommended that university should have a separate business liaison oIIice. The Iunctions oI
this oIIicewouldincludedevelopingnetworks oI businesses; marketingtheresearchstrengths oI
the institution; advising on consultancy agreements and contract research; arranging major joint
ventures.
The role oI the government in building university business interIace has to be strong. The
government should encourage both the stakeholders through its policy, which may include tax
concessions Ior industries taking consultancy or other IormoI collaboration with the academic
institutions. Similarly the academic institutions actively involved in such interIace may be
encouragedbyextendingadditional grants Ior research.
The universities should regularly conduct surveys to understand the nature and type oI
manpower demand in the market. The university should involve the people Ior industry right
Iromthe course launchtosyllabi Iramework. This wouldalsoinclude teachingspeciIic modules
by the people Irom industry. The industrial training should be enhanced to develop the skills
amongthestudents Ior their Iutureemployment.
The university industry linkage is a less researched area in India. Although the nature oI crisis has
already touched Iinance, eIIiciency and quality issues, but no precise steps have been taken by the
universities. Nowit is the right time Ior the universities totune its oIIerings as per the market demand
whenapproachingtowards the Knowledge basedeconomy. It is onlyuniversityindustrylinkage on
a larger scale generate resources Ior the higher education along with the production oI true human
capital.
References
Aaron,Elizabeth(1988December)'TappingIntoUniversityTechnology,HighTechnologyBusiness,pp.26-32
Atlan, Taylan (1987) 'Bring Together Industry and University Engineering Schools,` in Getting More
Out of R&Dand Technology, The ConIerence Board, Research Report #904
Atlan, Taylan (1988) Tappinginto UniversityTechnology, HighTechnology Business, pp.26-32.
Autant-Bernard,C.(2001)ScienceKnowledgeFlows:EvidenceIromFrenchCase.ResearchPolicy30:1069-1078.
Barber, Albert A. (1985) 'University-Industry Research Cooperation, Journal of Society of Research
Administrators, pp.19-29
Baldwin, Donald R. and James W. Green (1984 Spring) 'University-Industry Relations: A Review oI
Literature, Journal of Society of Research Administrators, pp.5-17
Bartlett, JosephW. (1988November) 'Joint VenturesWithIndustry,HighTechnologyBusiness, pp.30-32
Berman, Evan M. (1990 Summer) 'R&DConsortia: Impact on Competitiveness, Journal of Technology
Transfer.
Chan, Sinchen, (1990), 'The factor influencing university and industry cooperative performance
research, Unpublished thesis, Graduate School oI Business Administration, National Chungchi
University, Taiwan.
C. Blackman and N.Segal (1993) Industry and Higher Education. London, New York, Philadelphia;
Pergamon, p. 938.
Dahlman, Carl and Anula Utz (2006) India and the Knowledge Economy- Leveraging Strengths and
Opportunities. WBI Development Studies, Washington, TheWorld Bank.
Georghiou, L. and J. MetcalIe (1993) Evaluation oI the Impact oI European Community Research
Programmes uponIndustrial Competitiveness. R&DManagement 23 (2): 161-169.
Lambert, Richard (2003) Lambert Reviewof Business-University Collaboration. London: HM Treasury.
Lundvall, B.A. (1992) National System of Innovation. Towards a Theory of Innovation and Interactive
Learning. London, Pinter.
Luukkonen, T. (2000) Additionality oI EUFramework Programmes. Research Policy29:711-724.
Nelson, R.R. (1993) National Innovations Systems- AComparative Analysis. NewYork, OxIord, OxIord
University Press.
OECD (1996). The Knowledge-Based Economy. Paris, Organisation Ior Economic Cooperation and
Development.
Oza, Nila and K.M.Joshi (1999) Privatisation of Education Issues and Options. Jaipur, Mangal Deep
Publications.
Peters, Lois.S and Herbert I.FusIeld (1982) University-Industry Research Relationships, National
Science Foundation.
ReddyR.G.(1998)HigherEducationinIndia.Conformity,CrisisandInnovation, SterlingPublishers,NewDelhi.
Turpin, T., Ayward, D., Garret-Jones, S., Speak, G., Grigg, L., & Johnston, R. (1999) University and
Industry Research Partnerships in Australia. An Evaluation of ARC/DETYA Industry-Linked Research
Schemes. Canberra: Department oI Education, Trainingand Youth AIIairs.
Wu, Feng-Shang (1994), 'Technological Cooperation. Model and Trend, the Third Symposium on
Industrial Management, FunjungUniversity, Taiwan
97
CUSTOMER'S ATTITUDE TOWARDS E- BANKING
ASTUDYOF GARHWALREGION
Dr. V.C.Sharma`
Satyendra Kumar``
Prof. S.K. Srivastava```
Associate ProI. Department oI Commerce, HNB Garhwal University, Srinagar Garhwal (Uttarakhand).
**Guest Iaculty, Department oI Commerce, HNB Garhwal University, Srinagar Garhwal (Uttarakhand).
***ProI. & Head, Department oI Commerce, HNB Garhwal University, Srinagar Garhwal (Uttarakhand).
ABSTRACT
Technology has been one oI the most important Iactors
Ior the development oI mankind. Banking industry is
Iast growing with the use oI technology in the Iorm oI
ATMs, on-line banking, Telephone banking, Mobile
banking, plastic card etc. In the recent years the way to
do banking has changed. Internet banking has grown and
a lot oI banks working mainly with the Internet as a
medium have entered the Indian bank market. The main
objective oI study to analyse the attitude oI customers
towards internet banking in Garhwal region. A total oI
200 respondents were selected and surveyed. Asample
oI 100 respondents selected Irom public sector banks as
well as the same sample was taken oI 100 respondents
Irom private sector banks equally. As a result attitude oI
respondents was Iound positive towards E-banking.
Key words: E-Banking, Customer Attitude
INTRODUCTION
Over the years, the banking sector in India has seen a no. oI changes. Most oI the banks have
begun to take an innovative approach towards banking with the objective oI creating more value
Ior customers. In the world oI banking and Iinance nothing stands still. The biggest change oI all
is in the, scope oI the business oI banking. Banking in its traditional Iorm concerned with the
acceptance oI deposits Irom the customers and lending oI surplus oI deposited money to suitable
customers who wish to borrowand transmission oI Iunds. Apart Irom traditional business, banks
nowa day provide a wide range oI services to satisIy the Iinancial and non Iinancial needs oI all
types oI customers Irom the smallest account holder to the largest company and in some cases oI
non customers. The entire banking sector has undergone a restructuring during recent years as a
result oI recent developments. Newtechnologies have added to the competition.
The IT revolution has made it possible to provide ease and Ilexibility in operations to customers
thus making liIe simpler and easier. Online banking has changed the Iace oI the entire banking
system. Internet banking helps the customers to carry out their Iinancial transactions using a
secure website or web portal. Online banking is a powerIul 'value-added' tool to the banking
system which is used to attract new customers. E-banking is becoming increasingly popular
among banking customers. The introduction oI E-banking across the globe has made the Iinancial
transaction convenient and customer-Iriendly. E-banking helps in reducing costs by providing
cheaper and Iaster ways oI delivering products to customers. It also helps the customer to choose
the time, place and method by which he wants to use the services and gives eIIect to multichannel
delivery oI service by the bank. E-banking has not only reduced the time consumed in Iinancial
transactions, it has shrunk the geographical Irontiers to make their business truly global. Finally,
it has helped the banks and Iinancial institutions to retain increasingly sophisticated customers,
develop newcustomer base and capture greater share oI banking business in a highly competitive
environment.
INTERNETBANKING ININDIA
The Reserve Bank oI India constituted a working group on Internet Banking. The group divided
the internet banking products in India into 3 types based on the levels oI access granted. They are:
i) Information Only System: General purpose inIormation like interest rates, branch location,
bank products and their Ieatures, loan and deposit calculations are provided in the banks website.
There exist Iacilities Ior downloading various types oI application Iorms. The communication is
normally done through e-mail. There is no interaction between the customer and bank's
application system. No identiIication oI the customer is done. In this system, there is no
possibility oI any unauthorized person getting into production systems oI the bank through
internet.
ii) Electronic Information Transfer System: The system provides customer- speciIic
inIormation in the Iorm oI account balances, transaction details, and statement oI accounts. The
inIormation is still largely oI the 'read only' Iormat. IdentiIication and authentication oI the
customer is through password. The inIormation is Ietched Irom the bank's application system
either in batch mode or oII-line. The application systems cannot directly access through the
internet.
iii) Fully Electronic Transactional System: This system allows bi-directional capabilities.
Transactions can be submitted by the customer Ior online update. This system requires high
degree oI security and control. In this environment, web server and application systems are linked
over secure inIrastructure. It comprises technology covering computerization, networking and
security, inter-bank payment gatewayand legal inIrastructure.
SERVICES THROUGH E-BANKING:
Bill payment service You can Iacilitate payment oI electricity and telephone bills, mobile
phone, credit card and insurance premium bills as each bank has tie-ups with various utility
companies, service providers and insurance companies, across the country. To pay your bills, all
you need to do is complete a simple one-time registration Ior each biller. You can also set up
standing instructions online to pay your recurring bills, automatically. Generally, the bank does
not charge customers Ior online bill payment.
Fund transfer You can transIer any amount Irom one account to another oI the same or any
another bank. Customers can send money anywhere in India. Once you login to your account, you
need to mention the payee's account number, his bank and the branch. The transIer will take place
in a day or so, whereas in a traditional method, it takes about three working days. ICICI Bank says
that online bill payment service and Iund transIer Iacility have been their most popular online
services.
Credit card customers: with Internet banking, customers can not only pay their credit card bills
online but also get a loan on their cards. II you lose your credit card, you can report lost card
online.
Railway pass: This is something that would interest all the aam janta. Indian Railways has tied
up with ICICI bank and you can nowmake your railway pass Ior local trains online. The pass will
be delivered to you at your doorstep. But the Iacility is limited to Mumbai, Thane, Nashik, Surat
and Pune.
Investing through Internet banking: you can now open an FD online through Iunds transIer.
Now investors with interlinked demat account and bank account can easily trade in the stock
market and the amount will be automatically debited Irom their respective bank accounts and the
shares will be credited in their demat account. Moreover, some banks even give you the Iacility to
purchase mutual Iunds directly Irom the online banking system. Nowadays, most leading banks
oIIer both online banking and demat account. However iI you have your demat account with
independent share brokers, then you need to sign a special Iorm, which will link your two
accounts.
Recharging your prepaid phone: Now just top-up your prepaid mobile cards by logging in to
Customer's attitude towards e- banking a study of garhwal region
99
Internet banking. By just selecting your operator's name, entering your mobile number and the
amount Ior recharge, your phone is again back in action within Iewminutes.
Shopping: with a range oI all kind oI products, you can shop online and the payment is also made
conveniently through your account. You can also buy railway and air tickets through Internet
banking.
OB1ECTIVEOFSTUDY:
The main objective oI the present study is to analyse the attitude oI banking customer towards E-
banking. The Iurther study to analysed there was any diIIerence in the attitude oI Public and
Private sector banks customers towards E-banking.
RESEARCH DESIGNANDMETHODOLOGY
The study is based on the primary and secondary data. An exploratory research design has been
Iollowed to carry out the study. First oI, a survey has been carried out in the area with particular
reIerence to Garhwal region (Pauri and Tehri district). Convenience sampling technique was used
Ior data collection. During the survey data has been collected 200 respondents which is Iairly
representative by the Public and Private sector banks. For studying the attitude oI respondents
towards E-banking the 'Likert Scale was used. As per this scale the statements were quoted in
the questionnaire with the corresponding Iive checkboxes to the ticked as Strongly Agree, Agree,
Neutral, Disagree, Strongly Disagree. The respondents were asked to read the statements and tick
the most appropriate checkbox as per their belieI. Then this data was converted into tables and
with the help oI 'weighted Averages the attitude towards the E-banking was assumed. In
addition to that 'Chi-Square test was implemented in order to test the hypotheses oI the study.
ANALYSIS ANDDISCUSSION:
The study that 50.10 percent oI total respondents have positive attitude towards E- banking, 24.39
have negative attitude towards E- banking whereas 25.51 percent oI the respondents are neutral in
the response.
Source: Computed Irom the data collected Irom respondents.
The analysis oI attitude 29.77 percent Private and 20.33 percent Public sector banks respondent
have Positive attitude towards E-banking. Where as 10.27 percent Private and 14.12 percent
Public sector bankrespondents have a negative attitude towards E-banking.
A simple test oI hypothesis has been perIormed to check the diIIerence oI attitude
response based on Public and Private sector banks Ior each oI the statements. This involved
testing the null hypothesis i.e. there is no signiIicance diIIerence in the attitude oI the respondents
towards the speciIic statements based on Private and Public sector bank respondents. To test the
signiIicance oI this relationship, Chi-square test has been used. The results oI the hypothesis have
been put in table 2.
Table 2: ATTITUDERESPONSES AS PERLIKERTSCALE
Table 2 depicts the attitude oI the respondents towards E-banking based on some oI the important
statements as per Likert Scale. As per the data, 11.60 Percent oI the respondents agree with varied
Table- 1 Overall Attitude of the Respondent Towards E- Banking
S.No. Attitude Total Private Sector Bank Public Sector Bank

1 Strongly Agree (SA) 20.65 14.49 6.16
2 Agree (A) 29.45 15.28 14.17
3 Neutral (N) 25.51 15.51 10.00
4 Disagree (D) 12.82 4.44 8.38
5 Strongly Disagree (DA) 11.57 5.83 5.74
Total 100.00 55.55 44.45
degrees (5.10 percent A along with 6.50 as SA) E-banking should be banned, where 80. 90
percent (48.69 SD and 32.21 D) were against banning oI E-banking whereas 7.50 percent
respondent was neutral. The response oI Private and Public sector banks are same. Similarly, in
another important statement that E-banking is saving time and money, 52.80 percent (25.67 SA
and 27.13 A) agreed to the statement while 20.70 percent (8.92 SDand 11.78 D) did not Iaviour in
that statement. As Iar as sector wise analysis is concerned the hypothesis Ior the same was also
accepted. Third positive statement was E-banking is attractive, 60.70 percent oI the respondents
agree, 22.80 percent oI the respondents disagreed and rest oI 16.70 respondents are neutral. Again
the response oI Private and Public sector banks was same.
Source: Computed Irom the data collected Irom respondents.
Forth statement was E-banking is risky than counter banking. In response to this statement, 66.70
percent oI the respondent believed so and merely 20.10 percent Ielt it was not risky to use E-
banking. In this case null hypothesis was accepted. It's mean Public and Private sector banks
respondents have same opinion about the statement. Another negative statement was put Ior
response i.e. iI the respondents Ielt that lack oI cyber laws implementation makes internet Iraud.
66.6 percent oI the respondents agree with the statement where as 16.70 were oI Ieeling that this
doesn't aIIect their attitude towards E-banking and the remaining 16.7 percent oI the respondents
were neutral in the response oI this statement. The null hypothesis Ior this statement is accepted
because there is no signiIicance diIIerence in the attitude oI the respondents towards E-banking oI
public and private sector banks customer. The next positive type statement was it is very easy to
use E-banking. 60.50 percent (35.42 percent Aand 24.08 percent SA) oI the respondents were oI
the opinion that it is very easy to use E-banking. In terms oI sector wise attitude oI respondents
towards E-banking there is no signiIicant diIIerence Iound. The last statement was iI the
respondents liked to use E-banking rather than go to the bank. 50.6 percent respondent ware like
to use E-banking while 29.30 percent oI the respondents like to go to the banks. Public and Private
sector banks respondents shown same attitude towards E-banking.
An analysis oI the above statements reveals that the consumers on the whole have a positive
attitude towards E-banking. They Ieel that E-banking are attractive, useIul, time saving and easy
to use rather than counter banking or physical banking. On the other side there is a negative aspect
too and this reveals that E-banking is a very risky than counter banking. Due to the cyber law
implementation situation in India It is very risky to use E-banking, because hackers can hike your
username and password. As per the hypothesis testing all the respondents Ielt Iear about the
security issues. The main reason may be the hiking oI password and other inIormation about the
accounts. Thus the E-banking should try to overcome these weaknesses in order to make it
acceptable to all.
Conclusion
The paper explores the attitude oI banking customer towards the E-banking in garhwal region.
The implications oI the study are that consumer have positive attitude towards E-banking.
Around 50 percent oI the respondents have a positive attitude, around 24 percent oI the
respondents have a negative attitude and 26 percent have neutral attitude towards E-banking as a
Statements as perLikert Scale tomeasure the Attitude towards Accepted OR
attitude of the respondents. E-banking Rejected
Banking should be banned on Internet Negative Accepted
E-banking is saving oI time and money Positive Accepted
E-banking is attractive Positive Accepted
E-banking is risky rather than counter banking Negative Accepted
Lack oI cyber laws Iear oI hike your account. Negative Accepted
It is very easy to use E-banking Positive Accepted
I like to use E-banking rather than go to the bank Positive Accepted
101
medium oI banking. Though customer have positive attitude towards E-banking even then it is
still considered as a risky aIIair. Thus there is need Ior inIrastructure development to make it risk
Iree. With the implementation oI broadband it has becoming Iaster in speed but the customer still
has to pay as per the data used and thus there is a hitch in usage. Most oI the neutral respondents in
this study thought that literate were not able to use internet, they are having a mind setup that they
need some special skills beIore they can use internet.
In short, we can say that banking customer shown positive attitude towards E-banking yet it is an
undisclosed gold mine, it is in its inIancy and with the improvements in the inIrastructure and the
usage oI the internet will expand Iurther. It is still a risky medium Ior most oI the respondents and
thus due to this reason is proving as proIligate Ior banking. It's a medium oI Iuture banking which
ensure the hacking the accounts.
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banking technologies byUS consumer, The International Journal of Bank Marketing, 22:4/5, 238-258.
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Business, the 4GTechnology. The ICFAI University Press, Hyderabad.
NKamakodi and M Basheer Ahmed Khan, November 2008. 'Customer expectations and service level in
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whichbanktopatronize, The International Journal of Bank Marketing, Jol 19, No.3, pp 104-114.
Rob Lawson. And Sarah Todd. (2003) 'Consumer PreIerences Ior payment methods": a segmentation
analyses, International Journal of Bank Marketing, Vol 21, No.2, pp 72-79.
Sandeep Kautish October (2008),"Online Banking: A paradigm shiIt", E-Business, mobile
network perIormance, The ICFAI University Press,Hyderabad.
Susan, H, C, Tai. And Jackie, L, M, Tam (1996) 'AComparative study oI Chinese Consumers in Asian
Markets ALiIestyleAnalysis, Journal of International Consumer Marketing, Vol 9. No1, pp 25-42.
Tao Sun., Marty Horn. And Dennis Merritt. (2004) 'Values and liIestyles oI individualists and
collectivists: a study on Chinese, Japanese, British and US consumers, Journal of Consumer Marketing,
21:1, 318-331.
WalIriend, M, Lassar. Chris, Manolis. And Sharon, Lassar. (2005).The relationship between consumer
innovativeness, personal characteristics, and online banking adoption, The International Journal of
Bank Marketing, Jol 23, No.2/3, pp 176-198.
Wendy, W, N, Wan. Chung-Leung, Luk. And Cheris, W, C, Chow (2005) 'Customers' adoption oI
bankingchannels inHongKong, TheInternational Journal of BankMarketing, Vol 23No.2/3, pp255-272

Short Paper
Study the level of Self Consciousness &Adjustment in practitioners
and non-Practitioners of 1apa & Dhyana.
Priya Sharma`
Dr. Saraswati Kala``
* Post Graduate Scholar
** Assistant ProIessor Dev Sanskriti University, Haridwar, Uttarakhand
Abstract
The study has attempted to explore the eIIect oI Japa and
Dhyana (Japa-silent chanting oI Mantra and Dhyana-
Meditation) on selI consciousness and adjustment level
in Human selI. The SelI Consciousness Scale, developed
by Dr. Asha Shukla and other Adolescent Adjustment
Scale, developed by Mrs.Ragini Dubey were
administrated on IiIty girls' students, out oI which
twenty Iive were selected Irom Rishikul Ayurvedic
College, Haridwar and other twenty were selected Irom
Dev Sanskriti University, Haridwar, in the State oI
Uttarakhand. Results have shown that there is signiIicant
diIIerence in practitioners and non practitioners oI Japa
and Dhyana.
Introduction
In present scenario, mankind is Iully engaged in various types oI activities, which sometimes
results as no time Ior oneselI that is why, a man or a woman become the victim oI many problems,
disorders and diseases. While Iunctioning and living in present day dynamic and Iast changing
environment with struggling and Iacing many problems, and problematic situation, it is a natural
phenomenon to get adjusted in the demanding situation which may be known as problems oI
adjustment. The result oI these adjustment problems generate misunderstandings seeking
quickly overcome and bailing out oI the situation or problems. These sometime Iorce the person
encountering the situation and withstanding the problems to lose selI conIidence as ultimately
loosing selI consciousness.
'Adjustment is an important concept in psychology. It reIers to a relationship between an
individual and his/her environment, which helps to satisIy his motives' (Morgan 1961)
.According to Antonio Domassio theory oI consciousness it must showhoweach oI us, acquires
a sense oI selI, as it must take into account not only brain but also the whole body.' (This concept
is nearer to Ayurvedic concept). Japa and Dhyana are two tools which can be used Ior helping a
Person to be a well adjusted person by increasing his or her consciousness level iI these two tools
are applied properly. There are many scientiIic beneIits oI these tools. As Iound while
experimenting and judging the level oI selI conIidence and consciousness among practitioners
and non practitioners oI Japa and Dhyana, where there was a great diIIerence between both these
two groups achievements inraising the level oI selI conIidence and consciousness.
Research- Design and Methodology
In this short experimental research work, Ex Post Facto Research was used as a parameter oI
study. So Iar as sampling is concerned Samples consist oI Forty Five students- Twenty Five Irom
Rishikul Ayurvedic College, Haridwar and Twenty Irom, Dev Sanskriti University, Haridwar.
AccordinglyPurposive sampling was used in this short experimental research.
Tools- SelI Consciousness Scale oI Dr. Asha Shukla was used and applied. Adolescent
Adjustment Scale oI Mrs. Ragini Dubey was also used and applied.
Variables-Independent variable- 1apa and Dhyana
Japa is the recitation oI any mantra or the name oI lord. It is really an important part oI yoga. In
103
'Gita', you will Iind to read that the Lord Krishna while clariIying power oI yoga to Arjuna says
that 'Yajnanam Japa Yajnosmi 'meaning thereby among Yajna I am Japa Yajna. Mantra is a
process oI repetition the pre tested and qualiIied sacred words created by sadhana oI Holy Souls
or even created by Gods and Goddesses. The Japa is practiced through mental process oI
repeating the holy Mantras or the well tested words in a sequence. Dhyana is the continuous Ilow
oI perception or thought again through mental process and to Iocus on the concentration oI Mind.
There is continuous current in the mind oI object like the IlowoI the water in a river. There is only
one vritti in the mind; whichinspires IlowoI continuous thoughts and ideas.
Dependent variable-Self- Consciousness. SelI consciousness is really a great power oI a
person. II it is developed, a person can perIorm in a diIIerent way which can make the person
diIIerent than others.. One can do even impossible deeds. According to Antonio Domassio- 'A
theory oI consciousness must showhoweach oI acquires a sense oI selI, it must take into account
not only the brainbut whole oI the body.
Adjustment- Adjustment reIers to a relationship between an individual and environment, which
helps to satisIy ones motives. Adjustment disorder is an emotional disturbance caused by on
going stressors within the range oI common experience. It occurs when ordinary liIe stressors
push people beyond their limit to cope up the demanding situation eIIectively. There can be many
examples oI this as- unemployment, marital striIe, poor health conditions, prolonged illness,
unethical behaviour in the society, unIavourable job conditions, economic problems and like,
however disadjustment caused by stressors typically disappear when a person's liIe
circumstances improve and to improve the circumstances Japa and Dhyana are the tools can be
applied and used. The Iindings oI the experiment on the selected students as mentioned above are
indicated intheTables below:
Result table
Table 1
Tvalue is 3.73, which proves signiIicant diIIerence, so null hypothesis is rejected on 0.01level oI
conIidence.
Table 2
TValue is 2.6, which is more than the value oI dI Irom the table so null hypothesis is rejected on
0.01 level oI conIidence.
Discussion and Interpretation
The result oI the experiment shows that there is no signiIicant diIIerence oI the level oI selI
consciousness and adjustment between practitioners and non practitioners oI Japa and Dhyana in
appearance. As through Japa and Dhyana, all the mental powers are directed by one and thereIore
mind and body both do work together. And in such a condition, a person can get success easily.
These both connect the mind on one thing and the person Iocuses only on his goal. Hence physical
appearance may be remote in appearance but the inner impact may be Ielt by the person who
undergo the process withcontinuity.
Conclusion
Since the old days, Japa and Dhyana are in vague. But today the Iorms oI these have been
changed somewhat because person uses these things as a 'curing practice' Ior getting positive
results. These practices have multi qualities which can be Ielt by the practitioners and may diIIer
Irom person to person. Japa and Dhyana, on one side provides relieI Ior mental and physical, on
the other hand, these enrich the inner qualities also. But regularity and continuity is the main
Iactor to be maintained. As Bogart- 'Investors have Iound that meditative practices enhance
observation Mean S.D. sed dI t value Sig. level
Adjustment 22.28 0.67 0.18 48 3.73 0.01
Observation Mean S.D. sed dI t value Sig.level
SelI consciousness 25.72 4.72 1.32 48 2.6 0.01
Short Paper Study the level of Self Consciousness & Adjustment in practitioners and non-Practitioners of 1apa & Dhyana.
psychological growth and well being.
In this way, these practices have immense eIIect on increasing the adjustment power and selI
consciousness. This is a short experimental research and theAuthors have started working it with
large sample size Ior getting Iurther results.
References
1. Coon, Dennis (2001) 'Introduction to psychology', learning Davis drive Belmont,
U.S.A., pp12.
2. Kumar, S.K., 2002, 'Psychology oI meditation', concept publishing company, N.Delhi-
pp12.
3. Goyandka, Harikrishna Das, 'Yoga Darshana', Govind Bhavan karyalaya, Gita press,
Gorakhpur.
4. Rathaur, Sarita, 2007, 'The study oI adjustment oI adolescent in context oI parent's
acceptance & non acceptance', pp8-26
5. Srimali, mandakini, 2001, 'Pragya Purush Ka Samagra Darshana', Akhand Jyoti Sansthan
Mathura pp 7.22.
6. Swami, Shivanand, 1969, 'Concentration and Meditation', The Divine liIe society,
Shivanand nagar pp9.
7. Saraswati, Swami Satyananda, 2006, 'A.P.M.B.', yoga publication trust Munger, Bihar.
8. Swami, Sivananda, 2000, 'DhyanaYoga', ADivine liIe society publication, pp.50.
Short Paper Study the level of Self Consciousness & Adjustment in practitioners and non-Practitioners of 1apa & Dhyana.
105
1ratak: The Yogic Practice for the Enrichment of
HRD Managerial Skills
Dr. Kavita Bhatt`
Abstract
The eIIective perIormance oI an organization depends
not only on the available opportunities, but on the
excellent management oI HRD too. The dissimilarity oI
two diIIerent organizations could be seen as the result oI
diIIerent attitudes oI managers oI HRD. HRD
management is the mandatory and challenging
component oI each and every Iield oI our liIe in this era
oI cut throat competition. We need it Ior better utilization
oI human and non- human resources. HRDManagement
is very important and sensitive aspect so it becomes
obvious Ior any organization or industry to have such
people who have the capability to take the
responsibilities. This paper is an attempt to understand
the characteristics oI a HRD manager and Iactors
inIluencing the personality in western and Indian views.
It helps to search the strategy Ior the enhancement oI
HRDmanagerial skills with the practice oI Tratakkarma
in Indian Philosophy oI Yoga.
Part I
We are Iacing the problems oI mental stress, anxiety, nervousness, diIIidence and
misconduct in HRD managers presently. In Iact these diIIiculties are the constitution oI basic
crisis oI human nature in such challenging occupation. Various intellectuals have given distinct
perceptions Ior the enhancement oI skills to make harmonizing nature oI man. Most oI them have
been given by western stream. So there is a need to search the strategy Ior the personality
enhancement to be a perIect HRD manager. The physical, mental and spiritual balance in the
personality oI a man is necessary to be a good HRD manager. To describe the enhancement
strategy oI skills Ior HRDmanagers, it is necessary to knowtheir characteristics.
First oI all it is necessary to know the Iactors inIluencing the managerial and
behaviourial attributes oI a person which can help him to be a Iine HRDmanager. So we will try
to concentrate on the Ieatures oI HRD manager now. AIter that we will try to understand the
general views oI personality according to western and Indian scholars in the second part oI our
paper.

There are three major attributes oI a HRD manager according to Pareek and Rao. The
Iirst quality oI a manager is technical attribute (knowledge oI appraisal system, programmes,
carrear planning, counseling etc). The second is managerial attribute (organizing ability and
systems development skills). There are so many Iactors oI personality Ior the HRD manager as
per the third attribute oI personality Ior well- management. These are given below-
1- Inventiveness.
2- Devotion in humanbeings and their potentials.
3- Positive attitude towards others.
4- Imagination andcreativity.
* Dr. Kavita Bhatt, GRF (ICPR), Deptt. oI Philosophy, HNB Garhwal University, Srinagar (Garhwal) Uttarakhand

Tratak: The Yogic Practice for the Enrichment of HRD Managerial Skills
5- Concern Ior people and their development.
6- Friendly, sociable and aIIable.
7- Attitude Ior research and development work.
8- Interest in learning newthings.
9- Abilityto work as a team member.
10- Concern Ior excellence.
AIter the brieI discussion oI the characteristics oI a good HRDmanager this is necessary
to know the Iactors oI personality which inIluence the skills oI a person. So, that we can
successIully make a strategy to develop the skills through the practice oI Tratakkarma oI
Hathyoga. We will discuss the concept oI personality in the second part oI this paper. Let us move
towards it.
Part II
We can not talk about the nature oI man unless we consider the whole personality oI
man. Western intellectuals suppose to change the external environment oI man Ior good results
Ior skills oI man, but Indian view is quite diIIerent Ior the same thing. This is necessary to
understand the concept oI personality Ior the enhancement oI a personality as a good HRD
manager. So now we will try to understand the term personality in western and Indian
perspective.
According to (John and Srivstava, 1999) there are Iive important Iactors oI a
personality. An emerging consensus points to the existence oI Iive important Iactors:
Extraversion (active, selI-conIident, passionate, sociable), Agreeableness (liberal, kind, caring,
innocent), Conscientiousness (organized, planed, consistent, responsible), Neuroticism
(anxious, selI-pitying, tense, worrying), and Openness to Experience (artistic, curious,
imaginative, having wide interests). Each super Iactor covers a extensive area oI individual
diIIerences and includes a number oI additional particular personality dimensions or aspects.
While the western scholars assumes the Iactors oI behavior oI physical and mental characterstics
according to external environment, the Indian scholars assume that there is a requirement to
balance the three major internal Iactors oI personality called Sattva, Rafas and Tamas oI man Ior
better selI-management.
We will Iocus on the above Iactors oI personality according to Indian perspective but
Iirstly we will try to understand the meaning oI personality according to ancient philosophical
thought oI Indian intellectuals. 'Concept oI personality involves the philosophical,
psychological, personal, social, moral and other aspects oI human liIe. Hence, any concept oI
personality will depend upon these considerations. Indian concept oI man reIlects certain distinct
characteristics. It is more comprehensive, more spiritual and a positive world aIIirming
3
approach. AIter the brieI description oI Indian view oI personality now we are in the right
position, to understand the Iactor oI personality. So we will try to make a Irame oI Iactor which
could be helpIul to mold the personality oI a man Ior better managerial skills.
There are several qualities oI man like- knowledge, optimism, courage and wisdom etc.
denoted by Sattva. Rafas is the conductor oI hard-work, social service, adventure and creativity
etc. The third guna, Tamas decides the percentage oI wrong and delayed decision, lack oI
conIidence, Irustration, Iear, sleep and laziness in the personality oI a man. So we can say that the
whole Ieatures oI our personality denoted by the diIIerent appearance oI these three gunas. The
Indian thinkers assume that the proportion oI gunas can be modiIied or controlled by an
individual through change in his thought and actions as encouraged by selI-will, selI-analysis and
selI eIIort. The Iactors oI the personality oI any person have Iour parts, which are physical, subtle,
causal and astral body. The details oI structure oI personality oI a man is as below-
107
Structure of Personality in Indian perspective
Physical body Subtle body Causal body Astral body
1-Five gross element 1- Manas 1- Prana
2- Three subtle gunas 2- Buddhi 2- Chetana
3- Ahankara 3- Atman
4- Chitta
'Know Sattva (decency), Rajas (Activity) and Tamas (obscurity) to be the three qualities oI the
SelI with which the great one always totally saturates all survival. When one oI these qualities
entirely prevails in a body, then it makes the personiIied one highly eminent Ior that worth. Sattva
is stated to have the proIile oI knowledge, Tamas oI ignorance, rajas oI action, love and
abhorrence. Such is the nature oI these three which is all pervading and clings to everything.
When man experiences a Ieeling Iull oI bliss, a deep calm, as it were and a pure light then let him
knowthat it is Sattva. What is mixed with pain and does not hive contentment, one may knowthat
it is rajas which is diIIicult to deIeat and ever draws man towards physical objects. What is
attached with illusion, what has the character oI an unclear collection, what cannot be grasped by
analysis, what cannot be completely known, one may believe them as tamas.
It is accurate according to Indian opinion that the three gunas are the basics oI
personality to conduct the body and mind Ior some special aim or attitude. As the strategic
viewpoint we can say that iI somehowwe can make the balance oI above three gunas, there can
be established a special type oI qualitative nature oI a person. As the result he will be success at

the achieving goal oI attitude changing oI his personality Ior the batter management.
Sattva guna maintains- decency, precision, intelligence, harmony and pleasure.
Rajas guna maintains- sensuality, mobility, activity, irresolution, passions and restiveness.
1amas guna maintains- ignorance, heaviness, inactivity, rest and idleness.
The Iraction oI gunas can be balanced and modiIied by a personality through changes in
his contemplations and actions as encouraged by selI-will, selI-analysis and selI contemplation.
The gunas do not involve any proper Iinding. Their punctual association with the excellent,
disciplined, selI-controlled and moral environment stimulates physical strength and integral
health, mental discipline, essential morals with calm spirituality in a person. While their
associations with the bad, disordered, and immoral activities with terrible environment lead a
person toward physical, mental, immoral, and uncertain damage.
It is interesting to know how the gunas aIIect personality and behavior. The pervasive
sustaining physical, mental and social environment can be positive and i.e. sattvic or it can be
negative and immoral i.e. tamasic. The consequence oI this pervasive environment on the
process oI the three gunas is very much vast. SelI analysis, selI-will, selI-control and discipline
lead a person toward the perIect selI-management. The eIIect oI this enveloping environment on
the process oI the three gunas is extremely magniIicent.
AIter a brieI observation oI Trigunas we may say that we can change our attitude and
behavior according to our nature oI job. So we will try to make an observation oI the practice
which can improve our skills according to our HRD managerial job. As we have stated in the
abstract oI our paper that there is a Iantastic way to develop our positive attitude, potential and
intelligence with the practice oI Tratak karma oI the ancient Philosophy oI Hathyaga. So nowwe
will try to discover a way Ior excellent HRD management in Iorm oI Tratak karma in the
concluding part oI our paper.
Part III
To discuss the technique and beneIits oI Tratak karma, it is necessary to know the
source and importance oI Tratkarma in the Philosophy oI Yoga. Hathyoga- a branch oI Indian

Philosophy has given various practices like Shatkarma, Asana, Pranayam and Dhyan etc. Ior the
physical, mental and spiritual beneIits to mankind. Satkarmas (Dhauti, Jasti, Neti, Nauli, Tratak
and Kapalbhati) is the puriIication system and it provides the base Ior whole practice oI Yoga.
This is the system which is most powerIul to get the way oI selI- puriIication, selI-discipline,
SelI-will, selI-analysis and selI- eIIort through the puriIication oI mind and body. Tratakakarma
is the IiIth sudhikriya oI Shatkarma in Hathyaga. While practicing it, we aIIord total
enhancement in our physical and mental attributes through the balance oI above said three gunas.
The balance oI three gunas (Satva, Rafas and Tamas) is the Iundamental need Ior the
positive change oI the nature and personality oI a person while imbalance is the root cause Ior
every irregularity in the behaviourial, physical and mental perIormances. We can make a perIect
way Ior the development oI managerial characteristics through the practice oI Tratakkarma. So
the technique oI Tratak is required Ior the practice. So let us move to discuss the technique oI
tratak karma.

Technique of 1ratak karma :- Sitting in any meditative posture (Dhyanatmak Asana) any small
objective or slow light source must be seen with concentration until tears start coming out oI
eyes. AIter that closing the eyes the small objective should be thought about and then be calm
mind. We should sit in meditation in this position till we Ieel good. This state puriIies the ideas
and concentrates our mind on the aim. This is the practice Ior the harmonizing our physical,
mental andspiritual positiontowardwell-being.
Vic Comello also gives the similar technique to the successIul personality. According
to Comello, 'Set aside halI an hour each day Ior quiet reIlection. Begin by getting yourselI in a
comIortable position, close your eyes, and then check over each part oI your body to make sure it
is relaxed. Nowthink oI nothing. That's right, nothing. Don't try to think about anything at all. In
Iact, try to keep your mind as blank as possible. Imagine that your eyes are looking into the backs
oI your shut eyelids. II thoughts or memories rise, let them, but don't Iorce the issue. II nothing
comes to mind, that's Iine too. Just try to maintain a state oI undirected consciousness Ior a halI
hour. There, you have just learned Transcendental Meditation, boiled down to its essentials. Even
iI no insights come to mind, you will Iind that you Ieel mentally and physically reIreshed and
reinvigorated at the end oI the halI hour. When it Ieels natural to do so, use your relaxation periods
to think about your liIe and the direction it is taking. Try to deIine the track you would like it to be
on and what more you could be doing to get it there. Don't think in terms oI what you 'should be
doing. Think rather in terms oI what you 'want to do. Using 'should be language oIten takes us
oII Iocus because it starts us thinking about what other people want us to do. To hell with what
other people think you should be doing! Stay Iocused on what you want to do. Don't stray Irom
the realization that you are keeping yourselI Irom doing something important you want. At times
while you are relaxing, thoughts or memories may Iloat into consciousness that you suspect
might be psychologically signiIicant. It's good to break out oI the meditative state to pursue what
they might mean. The best time to come upon such memories is right aIter waking up Irom a night
oI sleep, so try to lie in bed Ior a while aIter the alarm rings, iI that's possible Ior you. The
memories that come to the surIace should be searched Ior the lessons that were learned Irom the
experiences being remembered. That is, try to imagine what the experiences may have meant to
you and what liIe lessons you may have taken Irom them. Then try to relate the experiences to
what is happening toyour liIe in the present.
We Iind that the psychological reIreshment oI our internal personality aIIord the
balance oI three gunas. We can understand this reIreshment through the accurate understanding
oI the beneIits oI Tratak.
Benefits of 1ratakkarma forenrichment of personality to HRDmanagers-
This is the process oI puriIication oI mind through eyes to grow concentration power,
109
balance Sattva and Rafas and Tamas gunas, make positive eIIects on the secretion oI glands and
Nervous system. It is beneIicial in curing the mental and insight problems. The balance oI three
gunas resulted as the successIul personality. While we are totally depend on the three gunas Ior
our positive or negative attitudes. According to S.N. Sharma 'The dynamics oI the Iactors oI
personality depend upon the quality and quantity oI the three gunas i.e. Sattva, Rajas and Tamas.
The gunas are the real springs oI behavior in response to these Iactors. The intensity oI behavioral
acts depends upon the level oI energy. They can be at dominant, moderate or lowlevels. When the
Iactors are associated with Sattva and Rajas they produce beneIicial and positive eIIects. But
when they are associated with Tamas and Rajas they produce harmIul and negative eIIects.
Positive eIIects help the development and produce a well developed and integrated personality
with positive and constructive outlook. Negative eIIects obstruct the development and produce
dwarIed and neurotic personality with negative and destructive outlook.
Here are some other beneIits to be noted down as- mental puriIication pleasure,
concentration, selI- control andrealization.
As the result oI the practice oI tratak, we pass Irom the process oI introspection which
can lead us towards a balance personality and successIul Ieatures. We can Iind the qualities oI
inventiveness, dedication in human beings and their potentials, positive approach towards others,
imagination power and creativity, concern Ior people and their development, Iriendly, sociable
and aIIable, attitude Ior research and development work, interest in learning newthings, ability to
work as a team member and concern Ior excellence. Essentially these are the basic qualities which
can make a person the perIect HRDmanager. We can establish these pillars oI our personality as a
HRDmanager through the practice oI Tratakkarma.
References
1- P. Subba Rao (2004) Essential oI Human Resource Management and Industrial Relations,
Himalaya PublishingHouse, pp 204-05
3- Dr. S. N. Sharma (2004) Indian concept oI man and his development, Parimal Publication,
Delhi,, pp 43,61, 212
4- Translated by Swami Niranjananand Saraswati, author Gherand Muni, Gherand Sanhita,
Yoga vidyalaya trust, Munger, Bihar, 1999
5- Vic ComelloPostedon hdbkpersonality.com
2- www.cambridge.org
Call For Articles
The Department oI Business Management, HNBGarhwal University solicits articles and papers
on Trade, Commerce, Industry, Business and Management related issues Irom academicians,
practicing managers and student. The selections oI the papers/articles Ior the publication will be
based on their relevance, clarity, originality and the extent to which any impart knowledge,
understanding and applicationoI knowledge in respective Iield.
Terms of Submission
1. The manuscript oI the Research Papers and long articles should be accompanied by an
abstract (within 100 words) oI the article and an introduction oI the author`s (name,
designation, aIIiliation) on separate sheets.
2. The manuscripts should normally be typed on a A4 size paper in double line spacing with 1.5
inch margin on all 4 sides. The authors may send 3 copies oI the printout along with one soIt
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3. Manucripts submitted Ior consideration must be accompanied by a conIirmation Irom the
authors that the article is the original work oI the author (s) and has not been published
anywhere else.
4. ReIerences used should be listed at the end oI the test. Only those reIerences, which are
actually utilized in the text should be included in the reIerence list at per the Iormat given
below:
a) Books 'Robbins, S.P. (2001). Organizational Behavior, New Delhi: Pearson Education
Asia, pp-50-54.
b) Journal Article 'TuIano, Peter (1995). Using Derivatives: What Senior Managers Must
know, Harvard Business Review, vol. 36 (1), pp. 35-36.
c) Edited Book: Mishra,J.N. (2009). Management Paradigm in the age oI E-commerce,
in G.S. Batra and R.C. Dangwal (eds.), Business Management and Globalization, New
Delhi: Deepand Deep, pp249-258.
d) Internet Audit J. (2003). Two Pedagogical Approach to Entrepreneurship Education using
an I nt ent i on Base Model oI Vent ur e Cr eat i on, www. Commer ce.
Ubc.ca./researchcentres/area2/papers
5. The editors/editorial board reserve the right to modiIy and improve the manuscript.
Editorial decisions will be communicated within a period oI 8 weeks oI the receipt oI the
manuscript.
7. Authors will receive one complementary copy oI the journal in which their articles
are published.
Address forSubmission
Electronic Submission- acpmanagement70gmail.com
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sent as an e-mail.
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Editor
Department of Business Management
Chauras Campus HNB Garhwal University (ACentral University)
Tehri Garhwal, Uttarakhand, India- 249161
www.gumbad.ac.in
Prof. S.P. Kala
Desk Advisor
Dr. A.C. Pandey
Associate Editor
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Gumbad Business Review
Gumbad Business Review
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1. Place oI Publication : Srinagar Garhwal, Uttarakhand, India
2. Periodicity oI its Publication : Bi-Annual
3. PrintersName : Saraswati OIIset Press, Srinagar Garhwal, Uttarakhand
4. Publisher`s Name : Department oI Business Management
H.N.B. Garhwal University (ACentral University)
Srinagar Garhwal, Uttarakhand, India
5. Editor`s Name : Dr. Gajendra Singh -Editor
Dr. A.C. Pandey- Associate Editor
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Department of Business Management
Chauras Campus, HNB Garhwal University (ACentral University)
Tehri Garhwal, Uttarakhand, India- 249161
Tel Fax: 00-91-01370-267653
Website: www.gumbad.ac.in, www.hnbgu.ac.in
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