“ABHINAVAN”

IInd

National Conference

on

“EMERGING FRONTIERS IN MANAGEMENT –

NEXT BEST PRACTICES”

18th

January, 2014

Organized by

Indira School of Business Studies (ISBS), Pune

Director’s Message

Indira School of Business Studies is an AICTE approved institute established in 2006. At ISBS, our

aim is to align our teaching and learning to the existing business environment. Business dynamism as

an outcome of technological and eco-political variables requires designing systems and practices which

will give a competitive edge.

“Abhinavan” is our effort to provide a platform for presenting research papers on best business

practices for “Emerging Frontiers in Management”. Understanding the Next Best Practices will help

strategize and sustain in this capricious market.

We hope this conference will enlighten and enthuse the members of academia and industry in adopting

and innovating practices and systems for the new frontiers.

I would like to congratulate the faculty members at ISBS for contributing to the success of this

conference.

Dr. Renu Bhargava

Director

Indira School of Business Studies

Conference Secretary’s Message

Global business is changing radically due to enormous changes in the environments. Technological

advancements and changing dynamics of the market, changing expectations and attitudes of the

customers along with melting geo-political boundaries is making the business environments volatile.

To sustain and compete in such a scenario we need breakthrough and innovative systems and practices

to give us a competitive edge in the market.

Another aspect of this dynamic environment is the opportunities being created to win new frontiers and

address newer markets. An in-depth review of best practices and systems will help to devise strategies

that will meet the challenges of the new world and also contribute to the benefit of the society at large.

The objective of National Conference on “Emerging Frontiers in Management- Next Best Practices” is

to provide a common platform to academicians, researchers, corporate, and students for sharing of their

views, research results, and findings with regard to evolving management practices.

I would thank all the authors, reviewers, editorial board members and everyone at ISBS for their

valuable support and contribution in making this conference a success.

Dr. Bidyut Jyoti Gogoi

Professor

HOD (Research and FDP cell)

Table Of Contents

No. Title Author Page

1. New Benchmarks In HR: Use Of Spiritual Intelligence For

Sustainable Happiness In Workforce

Abhilasha Gupta 1

2. Transformational Leadership: What And How Of It?

Brijash Kumar

4

3. Conversational Marketing: A Word Of Mouse (Consumer’s

Perspective)

Bagirathi K. Iyer

11

4. Emotional Intelligence: A General Perspective Biswa Mohana Jena, Dr.

Sanjaya Kumar Satapathy

30

5. Investment Decision On The Basis Of Intrinsic Value Of

Shares Through Fundamental Analysis: A Case Study of

ITC Ltd.

Dinesh Bargale, Pooja Jain 39

6. Opportunities And Challenges For The Indian Banking

Industry – The Next Best Foot Forward

Prin. Dr. C.P. Rodrigues 50

7. The Study Of Customer Attitude In Banking And NBFCs In

Nanded district

Dr. Gajanan P. Mudholkar 70

8. Rural Marketing: A Tactic And Current Trend For Rural

Development

Dr. P. Subramanyachary 78

9. Paradigm Shift In Management Practices In India Dr. Shubhra Aanand,

Raghvendra Bhat

86

10. Emerging Frontiers In Management: Next Best Practices

Work-Life Balance: A Modern Approach To HR

Lazree Gokhale 94

11. An Empirical Analysis On Factors Influencing Stress And

Coping Strategies Among The Management Faculties Of

Indore City

Rishi Vaidya, Neha Yadav 102

12. Evaluating The Theory Of Customer Loyalty And Its

Historical Development In The Perspective Of Store

Loyalty

Dr. Prafulla A. Pawar,

Nitin B. Veer

113

13. A Paradigm Shift In Human Resource Management

Practices: Exploitation To Encouragement

Dr. Pralay Kumar Ghosh 122

14. A Study On Effective Stress Management In Tirumala

Enterprise Pvt. Ltd, Pune

Prof. Archana Suryawanshi 132

15. Role Of Financial Institutions For Economic Empowerment

Of Women

Prof. Priyanka Bobade,

Prof. Revati Balutkar

137

16. Comparing Quality Of Research Work Across Subject

Categories: Administrative Challenges

Prof. Vinod J. Kadam 145

17. A Study on Consumer Behavior towards Modes of

Shopping

Prof. Srishti Joshi, Kevin

Pereira, Aarti Pawar

155

1

New Benchmarks In HR: Use Of Spiritual Intelligence

For Sustainable Happiness In Workforce

Ms. Abhilasha Gupta

ISBN: 978-93-81791-28-8

ABSTRACT

One of the areas yet to be explored fully in the corporate domain is the use of Spiritual

intelligence to enhance motivation, creativity and the happiness quotient of the workforce.

While Maslow and Herzberg did commendable work on employee motivation and satisfaction,

but much needs to be done for employee sustainable happiness. The HR world needs a paradigm shift

for achieving long term happiness of employees.

Corporate world is realizing that a radical and fundamental learning is missing. More and more

are seeking solutions to these problems outside the management periphery. Goleman has done

noteworthy work on Emotional Intelligence. However, the need of the hour is to go beyond EQ.

PURPOSE

To explore how spiritual intelligence can be used for sustainable happiness among workforce.

KEYWORDS

Spiritual Intelligence, Spiritual Quotient, self actualization.

INTRODUCTION

While much exploration has been done

to understand how emotions and intelligence

affect happiness in a workforce, a lot needs to

be done to understand that:

1) What matters is not just happiness, but

sustainable happiness.

2) EQ i.e. emotional Quotient and I.Q. ie.

Intelligent Quotient are not a sufficient

condition for the same.

3) A deeper conceptual understanding of

the ‘Self’ is needed.

4) S.Q.ie. Spiritual Quotient and Spiritual

intelligence offer this deep conceptual

understanding of the self.

5) The understanding of the self leads to

sustainable happiness.

Maslow has done the groundwork in

defining and understanding human needs in his

theory of motivation. However, he left it at the

highest order of need hierarchy as ‗Self

2

Actualisation‘. It is this self actualization which

is a rich ground for the next level of

intelligence and understanding i.e. Spiritual

intelligence. Today corporate are realizing that

a radical fundamental learning is missing

among the workforce i.e. understanding the

‗Self‘.

Danah Zohar speaks about Spiritual

intelligence as ―Spiritual intelligence (SQ) is

unfortunately often overlooked in coaching and

development. SQ is not about religion, it is

related to that part of the brain which allows us

to hope and dream and visualize and to connect

us to our purpose in life. It is the trigger in our

intelligence which entices us to seek meaning

and a greater good by differentiating between

good and evil.

SQ is the intelligence that makes us

whole, that gives us out integrity. It is the soul‘s

intelligence, the intelligence of the deep self. It

is the intelligence with which we ask

fundamental questions and with which we

reframe our answers. It is our transformative

intelligence‖

Wigglesworth, Cindy (2012) defines

spiritual intelligence as ―the ability to behave

with wisdom and compassion, while

maintaining inner and outer peace, regardless of

the situation‖.

While cognitive intelligence is about

thinking, emotional intelligence is about

feeling, spiritual intelligence is about being.

Osho said that ―We are Spiritual beings having

a human experience, and not the other way

round.‖ Spiritual intelligence is the soul‘s

intelligence. It is the intelligence with which we

heal ourselves and with which completes us.

While E.Q. heals our emotional wounds,

Spiritual Intelligence heals our deep

impressions at consciousness level and works in

the realm of energy. As the healing is at the

very energy level, its effects are long lasting

leading to sustainable happiness.

SQ indicates the sense of purpose,

mission in life that will be reasons for an

individual‘s various choices in his lifetime,

which in turn determine his happiness. S.Q.

also helps him distinguish between lower order

needs (greed and fear based needs) to higher

order needs (self love, acceptance and gratitude

based needs)

Danah Zohar has identified the

following factors that will help an individual

understand the concept of a ‗self which is more

in alignment with itself.

moral sense – likelihood to be

responsible & ethical

depth of a person‘s values – likelihood

to act from these

open-mindedness – open to exploration

& diversity

potential for creativity & visionary

leadership

critical thinking – independence, thus

courage to make tough decisions

reflective thinking

intuition

The Indian ancient scriptures,

Upanishads and Veda‘s also spoke of

understanding the self as the source of ultimate

bliss ‘Sat Chit Anand’.

The west is now realizing that the

‗sustainable Happiness‘ that an individual seeks

in his or her lifetime is nothing, but this bliss

called ‘Sat chit anand’, which when even

literally translated means ultimate permanent

bliss.

3

UNDERSTANDING OF THE „SELF‟

Vedant philosophy considers the self as

a ‗Jeeva‘ i.e. primordial life force. Quantum

physics and the Meta physics talks of the self as

pure infinite energy which works at a

consciousness level. Sigmund Freud talks of

‗self‘ in terms of Ego, Id and Super Ego. It is

this ‗Self‘ that needs to be explored further.

Happiness is a subjective concept and

varies from individual to individual. One needs

to understand that it is our choices that

determine our happiness, its duration and

also its intensity.

HR today needs to understand that if

they want their workforce to have

sustainable happiness, then the workforce

needs to according make a change in their

choices. A Heavy CTC, salary package, perks,

allowances, incentives, bonus etc are all time

bound and time specific. Accordingly their

lasting impact and duration will also be time

bound and time specific. They will stop giving

happiness beyond a point, because they are not

eternal. This is what Maslow meant when he

said that the needs stop motivating once they

are achieved.

This implies that to get sustainable

happiness, one needs to step out of the time.

Meta physics says that we all exist in two

dimensions, viz. time and space. Hence all our

choices are also within the same frame of time

and space. To get a happiness which is eternal,

we need to make a choice which is not time or

space dependent. And….it is here that

Spiritual Intelligence comes into play. A

spiritually intelligent individual will be very

aware of every thought, action and choice. He

is in search of the eternal truth, which is not

time or space bound. It is this search that gives

him radical answers and quenches his quest

for happiness. The irony of this quest is that

not only are the answers deeply nourishing,

resting and settling, but the journey itself is a

joy.!!

SCOPE FOR FUTURE WORK

S.Q. is the new dimension which needs

to be explored. Time has revealed that as

mankind is progressing and evolving, tools like

E.Q. and I.Q. are no longer sufficient to answer

queries which are radical and where the

learnings needed are profound. There is a need

for a paradigm shift in order to achieve

sustainable happiness for the corporate of

today.

REFERENCES

1. http://www.ijsrp.org/research-paper-

0513/ijsrp-p1705.pdf

2. http://danahzohar.com/www2/?p=53

3. www.ishafoundation.org

4

Transformational Leadership: What And How Of It?

Brijash Kumar

ISBN: 978-93-81791-28-8

ABSTRACT

Transformational leadership as the name suggest refers to a style of leadership, which bring

about meaningful changes in the organization. Organization itself will not change, hence such leaders

identifies change and communicate his vision to the members of the groups. He motivates them,

inspires them and involve them in the process of implementing the change. Transformational leaders

always challenge the laid down system and procedures and makes the organization more adaptable and

evolving. Although they are influential, but create trust and acceptability for both leaders as also

members so as to enhance the synergy in the group. While working together, both reaches at a level of

understanding where followers become leaders and leaders convert into mentors. Transformational

leaders are innovative and proactive, and bring about new life and culture to the organisation.

KEYWORDS

Transformational leadership, Change, and Trust.

INTRODUCTION

―In a gentle way, you can shake the

world‖ - Mahatma Gandhi

Before going into the meaning of

transformational leadership, it is essential to

understand what are organizations and what do

they do? In any economic system, formations of

organisations for different purposes are

prerequisite for its development. According to

Keith Davis (1997), "Organisation is a group of

individuals, large of small, that is cooperating

under the direction of executive leadership in

accomplishment of certain common object." In

the similar way, Louis A. Allen defined

"Organisation is the process of identifying and

grouping the work to be performed, defining

and delegating responsibility and authority, and

establishing relationship for the purpose of

enabling people to work most effectively

together in accomplishing objectives." It is a

deliberate arrangement of people to accomplish

some specific purpose. Hence, it is a structure

wherein certain group of people are working

together for some predetermined objective.

Economic systems are not constant; they are

always subject to change with the passage of

time, consequently to meet the changing needs

of the system, the different organisations keeps

on changing in its form, structure and

objectives. Organisations, therefore, cannot

remain static; it has to be dynamic, keeps on

evolving to the environmental changes.

Keeping these organisation adaptable to

5

changes in technology, customer demands,

increasing competition, meeting the challenges

of globalisation, a different types of leadership

style is required which may be different from

transactional leadership in its approach,

thinking, vision and dealing with the group

members. As the organization of their own can

not change, we have to have leaders who can

identify required change and implement

successfully. That style is known as

Transformational leadership.

OBJECTIVE AND RESEARCH

METHODOLOGY

Since the theory of transformational

leadership is of recent origin, the objective of

the article is to explore the concept of

transformational leadership and to explain how

it works. The rationale is to elucidate the entire

concept and process of transformational

leadership in the simplest form so that it is

easier to understand and identify such leaders

with the qualities described in the article. These

leaders are different from other in their

approach and essentially they are inspirational

and visionary. An attempt has been made

through this article to inspire other to be

transformational leaders. The article is

primarily based on the secondary literature

available in the forms of books, articles

published in journals, research papers, reports,

material available on various website, etc.

Appropriate inferences based on the experience

have been drawn and quoted in the article to

support or otherwise the views of various

authors. Some of the success stories and names

of such leaders (indicative but not exhaustive)

have been mentioned in the articles to drive

home the message that in the present scenario,

perhaps, this style of leadership is more

relevant.

TRANSFORMATIONAL LEADERSHIP-

UNDERSTANDING THE CONCEPT

In the recent past, a different type of

leadership style has emerged viz.

Transformational leadership. It is a style which

leads to positive changes in those who follow.

Transformational leaders are generally

energetic, enthusiastic and passionate. Not only

are these leaders concerned and involved in the

process; they are also focused on helping every

member of the group succeed as well.

James MacGregor Burns in the year

1978 used the concept of transformational

leadership in his book ‗Leadership‘1. According

to Burns, transformational leadership can be

seen when ―leaders and followers make each

other to advance to a higher level of moral and

motivation." Through the strength of their

vision and personality, transformational leaders

are able to inspire followers to change

expectations, perceptions and motivations to

work towards common goals. (p. 20)

Subsequently in the year 1985, Bernard

M. Bass2 expanded upon Burns original ideas

to develop what is today referred to as Bass‘

Transformational Leadership Theory.

According to Bass, transformational leadership

can be defined based on the impact that it has

on followers. Transformational leaders, Bass

suggested, garner trust, respect and admiration

from their followers. Bass furthered Burns‘

work by pointing out that leaders must use their

influence and charisma to provide followers

with inspiration through a vision or mission,

which will give them a strong sense of identity.

6

Bass and Riggio (2008)3 explained that

"Transformational leaders..are those who

stimulate and inspire followers to both achieve

extraordinary outcomes and, in the process,

develop their own leadership capacity.

Transformational leaders help followers grow

and develop into leaders by responding to

individual followers' needs by empowering

them and by aligning the objectives and goals

of the individual followers, the leader, the

group, and the larger organization."

Ronald E. Riggio (2009)4 in an article

appearing on the psychology today website

explained ―Research evidence clearly shows

that groups led by transformational leaders have

higher levels of performance and satisfaction

than groups led by other types of leaders," The

reason, he suggests, is that transformational

leaders believe that their followers can do their

best, leading members of the group to feel

inspired and empowered. According to

(Northouse, 2001)5, transformational leadership

is a process that changes and transforms

individuals. This was the simplest definition to

understand transformational leadership.

Burns said that a transformational leader

needs to have a solid understanding of the

necessary goals to be successful and be

articulate in explaining those goals and the

method to which they are to be achieved.

Transformational leaders are described as

charismatic, enthusiastic, optimistic, passionate

and sometimes visionary, and have ability to

change long-held perceptions and beliefs.

BASIC COMPONENTS OF

TRANSFORMATIONAL LEADERSHIP

Fundamentally, there are four

components of transformational leadership.

These are also knows as "Four I's" viz.

idealized influence, inspirational motivation,

intellectual stimulation, and individual

consideration. These components are not

mutually exclusive and cannot be perceived in

isolation. In fact, these components are

interconnected and describe the whole process

of transformational leadership. Mutual respect

for each other in the group, encouragement for

performance and development of members,

trust and confidence of the followers are the

basis of transformational leadership which

makes this component interwoven and

connected.

(a) Idealized influence

This describes the degree of

acceptability by the followers of the leader as

their ―Role Model‖. In other words, it is the

charismatic ability of the leaders to build trust

and confidence among the followers. Here the

leadership is seen and imbibed by the group

members on high moral and ethics ground.

They believe that leader will not do any wrong.

The trust and conviction that leader will only do

right things and not indulge in any wrong doing

makes the change process very easy. The leader

assumes the role of a coach and provides equal

opportunity to all the members to grow to their

potential. He constantly communicate with the

members, involve them in the process of

decision making, put forth the challenges, and

listens to the concerns and need of the group

members. Leaders always support the followers

and appreciate their contribution in the group so

as to develop a cohesive team and channelize

the efforts of the group towards achieving

organisational goals. Leaders do not use their

position for personal gain but guide all the

efforts for maximising group synergy6.

7

Idealized influence alternatively can also be

explained in term of charismatic characteristics

of the leader wherein followers are emotionally

attached to him and respect each other in the

group.

(b) Inspirational motivation

This refers to the leader‘s ability to

inspire and motivate the group members for the

desired behaviour. Here the leader is able to

communicate his vision to the followers and

convince them to follow and implement the

same. For inspirational motivation to be

successful, the followers must have a strong

sense of commitment and should be optimistic

about the future and have faith in their abilities

that they can achieve. Leaders with

inspirational motivation are highly positive and

optimistic and infuse the same feeling among

the followers and inspire them to be optimistic

and positive about achieving the future goals.

Purpose and meaning provide the energy that

drives a group forward. Such leaders always

stimulate team spirit, encourage and

appreciation members contribution, and clearly

articulate the task in hand, explains to the

members what they are expected to do, and for

completing the task in hand how important you

are in achieving the task. These leaders are also

able to help followers experience the same

passion and motivation to fulfil these goals. It

also speaks about leader‘s ability to give

meaning and context to the work of the

followers.

(c) Intellectual stimulation

This refers to the ability of the leader to

encourage and stimulate their followers to be

creative and innovative. These leaders always

encourage new ideas and always positive about

the members involvement. Such leaders always

challenge the assumptions, existing systems,

never hesitate in accepting risks and explore

new ways of doing task. Leaders with such

traits stimulate change in the way of thinking

about problems; plead the use of analogy and

metaphor, etc. Thus, it may appear the

possibility to get new and creative ideas for

solving problems from the followers. If the

ideas and the solutions of problems suggested

by followers differ from the ideas represented

by leaders, the followers are not criticized, nor

the leaders' ideas are imposed at any cost.

Leaders with intellectual stimulation promote

critical thinking and problem solving to make

the organization better. They do not hesitation

in discarding an old practice set by them if it is

found ineffective and encourage followers to

explore new ways of doing things and new

opportunities to learn.

(d) Individual consideration

This refers to the leader‘s ability to

analyse the individual followers with a view to

identify their ability and accordingly involving

them in the process of transformation. The

leader needs to understand member‘s wishes,

values and abilities in the right perspective.

Such leader must know what motivates the

followers individually. The prerequisite of this

process to be successful is the high level of

interest of followers in action which a leaders

leads and the high level of their trust in the

leader. It is important that followers should not

feel that they are being observed rather leader

should make them feel that they are important

and being observed for better performance.

Since human needs are different, leaders with

this trait are aware of the difference in needs

8

and wishes of people and use all those different

demands in the right way. These leaders

demonstrate acceptance of individual

differences and assign the tasks in accordance

with their strength. In this process, the

individual contribution are respected and

lauded in the team, which strengthen the group

and make them more cohesive and conducive to

work. This approach not only educates the next

generation of leaders, but also fulfils the

individuals need for self-actualization, self-

fulfilment, and self-worth. It also naturally

propel followers to further achievement and

growth7.

It is evident that the persona of the

leader is of utmost importance and has to be

impeccable; as any instance of inconsistency in

his behaviour and action may result in breach of

trust and confidence between the leader and

followers. And the success of the leader will be

doubtful.

SOME REAL LIFE

TRANSFORMATIONAL LEADERS

Theory will not make sense and be

meaningful how so ever powerful it may be,

until or unless it is demonstrated in real life

examples. Therefore, some real life example of

such leaders in brief is essential to support the

concept of transformational leadership. To

begin with, Shri K V Kamath, the Non-

Executive Chairman of ICICI Bank, has

transformed ICICI bank as India‘s largest

private sector bank. In his own words he said ―..

Agility has now become critical part of

longevity of organization. It could be as simple

as looking into future would lead you taking

steps well in advance of what people around

you taking to secure the future and keep on

moving without saying I am in a state of

equilibrium‖8.

The former chairman of Infosys, Shri

Narayana Murthy has transformed Infosys,

once a small software company, into one of the

India‘s largest software company with his

vision and leadership style, has said

―Leadership is all about transformational

change‖9. It is about making impossible,

possible. A leader thinks of something that is

unimagined by the rest of the people.

Therefore, in order to help our younger people

become such leaders; our institute has to

depend on a sense of pluralism, there should be

an environment of openness, curiosity,

questioning, enlightened democracy. Leaders

thrive in a certain context. They should be well-

rounded in the business of leadership. Our

leaders are our teachers and must understand

the context of the company very well.

The turned around success story of Ford

Motor Company and Chrysler Corporation by

Lee Iacocca as the senior executive is

something which everybody knows. He said ―I

have found that being honest is the best

technique I can use. Right up front, tell people

what you're trying to accomplish and what

you're willing to sacrifice to accomplish it.

Motivation is everything. You can do the work

of two people, but you can't be two people.

Instead, you have to inspire the next guy down

the line and get him to inspire his people. You

can have brilliant ideas, but if you can't get

them across, your ideas won't get you

anywhere‖10

.

This is what the core of transformational

leadership. There are many names such as

Mahatma Gandhi, Nelson Mandela who have

transformed the very nature of the society and

thinking of the people. Shri A K Khandelwal,

9

former CMD of Bank of Baroda and Azim

Hashim Premji, chairman of Wipro Limited, are

name in the banking and corporate sector, who

can be termed as transformational leaders. This

is only indicative list of names and not

exhaustive, there are many. However, the idea

is to bring home the message that there are

leaders, who with their vision and drive can

turnaround and change the entire organization

into success and make them more effective.

LIMITATION OF

TRANSFORMATIONAL LEADERSHIP

The success of transformational

leadership is heavily skewed towards leader‘s

ability to motivate. However, the apprehension

is that these leaders may not have the requisite

skill to impart with such values to the followers

every time.

Another limitation is the potential abuse

of power; the likelihood of abuse is more as

followers blindly rely on the leader as the

relationship is based on trust.

Transformational leadership lacks

conceptual clarity as it covers many attributes

such as creating a vision, motivating, being a

change agent, building trust, empowering, and

developing potential in people; therefore it is

difficult to clearly define its boundaries

(Northouse, 1997)11

. Transformational

leadership quite often than not is describes as

an all-or-nothing approach. There is a

presumption that whatever these leaders do,

very few leaders can achieve instead of using

the transformational attributes as a continuum

that incorporates various components of

leadership (Northouse, 1997)11

.

CONCLUSION

Despite few weaknesses,

transformational leaders have tremendous

ability to enhance the performance of the group

and to bring about appropriate changes in the

organization. Such leaders are innovative,

ingenious and most suitable for the present

scenario which is uncertain, highly competitive

and evolving. In any organisation, leadership

has great responsibility in achieving and

meeting the performance bar in order to satisfy

the stakeholders. With their idealized influence,

individual consideration, intellectual

stimulation and inspirational motivation,

transformational leaders can meet the

challenges posed to them by various demands

and complexity created by ever changing

environment. These leaders change the face of

the organisation; make them more adaptable

and responsive to the societal needs. However,

the challenge is to cultivate and nurture them,

as they question the existing systems and

practices and not averse in taking risk.

REFERENCES

1. Burns, J. M. (1978). Leadership. New York:

Harper & Row,

2. Bass, B.M. (1985). Leadership and

performance beyond expectations. New

York: Free Press.

3. Bass, B. M. & Riggio, R. E. (2008).

Transformational Leadership. Mahwah,

New Jersey: Lawrence Erlbaum Associates,

Inc.

4. Riggio, R.E. (2009, March 24). Are you a

transformational leader. psychology today.

Found online at

http://blogs.psychologytoday.com/blog/cutti

ng-edge-leadership/200903/are-you-

transformational-leader.

10

5. Northouse, Peter G. (2001). Leadership

Theory and Practice, second edition.

Thousand Oaks, CA: Sage Publications,

Inc.

6. Transformational Leadership –The key to

successful management of transformational

organisational changes by Ivana Simić,

Faculty of Economics, University of Niš,

Trg VJ 11, 18000 Niš, Yugoslavia

7. Developing Tomorrow‘s Transformational

Leaders Today- The Transformational

Leadership Report (c) 2007.

8. Pritam Singh and Asha Bhandarker (2011).

In Search of Change Maestros. (Sage

Publications Ltd).

9. http://cycbth.org/Leadership-is-all-about-

transformational-change.htm.

10.

http://www.brainyquote.com/quotes/authors

/lee_iacocca.html

11. Northouse, P. (1997). Leadership: Theory

and practice. (Thousand Oaks: Sage).

11

Conversational Marketing: A Word Of Mouse

(Consumer‟s Perspective)

Bagirathi K. Iyer

ISBN: 978-93-81791-28-8

ABSTRACT

We live in a society which is in the throes of a technological uprising. The changes viewed in

the passing time are undoubtedly greater than those our predecessors came across in an epoch.

Marketing is enduring a vital shift. Brands are facing new challenges in how they interrelate with

customers and prospects. The phrase ―customer engagement‖ is a contemporary approach doing the

rounds now-a-days. Today‘s new age customers are more conversant, more demanding and expect

unswerving and exceedingly custom-made experiences. This paper mainly talks about conversational

marketing from the view point of a customer as to how social media is a powerful tool and how it

enables the customer in not only decision making but also in other aspects like product information,

time saving and direct discussion with other millions of customer. The paper also tries to throw light on

the acceptance of social media as a tool of conversational marketing, limited to the age group of 20-40,

due to constraints and time limitations. No hypothesis was not used in this paper as it is an exploratory

research. A structured questionnaire was prepared to identify the acceptance of social media for

conversational marketing from the consumer perspective. Root cause analysis was applied to analyse

and interpret the findings. The findings clearly indicate that social media is a powerful tool which is

used frequently by customers for conversational marketing.

KEYWORDS

Customer, engagement, social media, conversation, marketing.

INTRODUCTION

Historically, companies have had a one

way dialogue with each customer i.e. pushing a

sales message. But a recent Gartner report

highlights the increasing use of social networks

by consumers to inform their purchase

decisions. Consumer behaviour has changed.

The key forces leading to the changes are

growth of the internet and mobile technology

which gives access to far more information to

consumers at their fingertips, which in turn

enables greater control over their purchase

decision-making.Various social networks have

increased the options for finding information

and sharing experiences, price comparisons and

also gaining customer reviews to act as an

extension for customer service.

12

Consumers are gradually using various

channels in the buying process, and expect to

have a steady experience across them. To

deliver an unified customer experience across

all channels, businesses have to listen and

engage the customers in a new way, by

incorporating a wider set of customer insights

and using them to customize that experience.

This is where conversational marketing pops in:

how to set up a conversation with the audience,

how to maintain the conversation and how to

convert that conversation to desired behaviour

of the customers?

EVOLUTION OF CONVERSATIONAL

MARKETING

Some time back "conversational

marketing" was considered "hype" in some

circles. The reason being CM ways was ahead

of its time -- a concept without the technology

backing to make it a reality. As customers

became more tech savvy and when

opportunities arose for companies due to

Glocalization, CM became an essential tool for

companies following market orientation.

Perhaps one of the early influencers of the

concept of conversational marketing is

"The Cluetrain Manifesto: The End of

Business as Usual." The manifesto was written

in 1999 by Rick Levine, Christopher Locke,

Doc Searls, and David Weinberger. The

Manifesto asserts that "networked markets are

beginning to self-organize faster than the

companies that have traditionally served them.

Thanks to the web, markets are becoming better

informed, smarter, and more demanding of

qualities missing from most business

organizations. "Today, conversational

marketing technology is available and capable

of pushing the next phase of customer

engagement -- and human interaction -- beyond

previous boundaries.

The period when Cluetrain was

written,only 50 million people were accessing

internets. But the authors had predicted the role

of internet in mass conversation and how it

would leverage marketing.Conversational

marketing is relationship marketing for the

social media age. Thinking about the marketing

efforts in terms of a conversation changes the

approach and better integrates social media.

Relationships are something that are formed,

but conversations are ongoing and evolving and

require both sides to participate, which the

companies have started realizing. Value is an

outcome of conversations and not mere

relationships with the customers. To ensure

lifetime value an ongoing two way conversation

with the customer is a must. The path to success

for companies comprises of crusade from

Customer Relationship Management and

Relationship marketing (RM) to Customer

Conversation Management (CCM) and

Conversational Marketing(CM).

13

COMMUNITY

Influence Amplify

COMPANY CUSTOMER

Engage

Fig. 1 Source: http://www.caci.co.uk/

Conversational marketing is a step

further from what is said. It is considering all

the obtainable information (buying behaviour,

location, declared and inferred interests) and

presenting a contextual proposition that causes

the anticipated response. For marketers the art

of conversation revolves around flawlessly

conjoining the right data, right channels, right

products and the right services into a cohesive

marketing message. Conversational marketing

is a tool which helps in building and sustaining

one-to-one personalized lifetime dialogues

across all marketing channels to enhance

revenue and marketing effectiveness. It also

means unifying inbound and outbound

communication strategies by tracking and

managing all marketing activity data to

generate messages for target audience, and by

making the best, most relevant offers based on

customer behaviour and established

preferences.

UPSURGE OF SOCIAL MEDIA

Social media as a major tool of

conversational marketing lets your customer

talk to the other customer for you. Social media

is an interactive tool which enables to engage

customers which in turn leads to intimate

relationship and it also converts the customers

enthusiasm into support for the products and

services. Andreas Kaplan and Michael Haenlein

define social media as "a group of Internet-

based applications that build on the ideological

and technological foundations of Web 2.0 and

that allow the creation and exchange of user

generated content."

Social media totally depends on mobile

and web-based technologies for creation of

highly interactive platforms through which

individuals and communities share, co-create,

discuss, and modify user-generated content.

They bring about significant and inescapable

changes to communication between

organizations, communities, and individuals.

According to the latest media reports surveyed

by Social Samosa, Indian organizations use

social media much more than the global

average and those of their counterparts in

emerging economies. The report suggests that

Facebook is the most important platform for

marketers n India for engaging customers,

followed by Twitter, YouTube and blogging.

Social media marketing has also

emerged in a big way. The third quarter of the

year 2013 has witnessed a rise in social media

campaigns in the country, with every small and

big brands moving away from campaigns on

individual networks to find more value in

14

integrated campaigns on multiple networks.

Fortunately, budgets are bigger and supportive

too, as can be seen in the various campaigns of

Indian and international companies.

A total rethinking has to be done for

customer-engagement strategy—from

positioning brands and attracting prospects to

providing customer service. A meticulous

approach needs to be jotted down initially, with

a plan to scale up over time to pervade all

aspects of customer interaction. Conversational

marketing is a tool which helps in building and

sustaining one-to-one personalized lifetime

dialogues across all marketing channels and

especially through the social media, to enhance

revenue and marketing effectiveness.

Conversational marketing requires merging

inbound and outbound communication tactics

by pursuing and handling all marketing activity

data to generate messages for target audience,

and by making the best, most relevant offers

based on customer behaviour and established

preferences.

Social media is a popular platform for

the organizations to retain existing customers

and to attract prospects. Conversational

marketing is gaining prominence because of

practices like:

Generic updates instead of brand

updates.

Multiple updates daily, reply to fan

queries within 30 minutes to a few

hours. Eg. Insurance companies

responding to various business queries

Pictures contests are the most popular

contests.E.g. L‘Oreal Paris India Stay

Rooted

Tools for online monitoring, response

management, or managing social media

platforms are popular.

Social media research is done to get

customer feedback and understand

behaviour.

Many have created mobile phone apps

and plan to create more.

SOCIAL MEDIA IS A CONSUMER

ENGENDERED MEDIA:

Social media is a media through which

consumers can interact with each other and give

their positive/negative reviews about the

products and services. As mentioned by

(Blackshaw & Nazzaro,2004,pg.2), this form of

media describes a variety of new sources of

online information that are created, introduced ,

disseminated and utilized by the consumers

with the intention of interaction and

enlightening each other about products and

brands, services and various other marketing

activities. People who participate and prefer

various social media have different

demographics which creates a unique identity

and fulfils customer preferences. It constitutes

of young people, professionals

(service/business) and also housewives.

The customers are well aware about

which networking site satisfies their needs in

terms of socializing and in terms of purchasing

products/services. So accordingly the marketers

need to identify their target audience and create

effective online ads as the ability to identify the

demographics of social media audiences at a

granular level is the basis for all targeted

marketing and messaging.

SOCIAL MEDIA AS A BOON

As per a research conducted by

Forrester on behalf of Wildfire, 41% of social

15

media users say they usually come to know or

find out about new products, brands, or services

by seeing the various ads on social

networks.Before making a purchase, the

consumer can log on to a social media network

and see what other people think about various

products and how the company handles

customer service. The more information

available, the more likely the consumer will

make the buying choice that fits his or her

needs.Studies also indicate that Facebook and

Twitter are the twomost popular sites for online

purchase on the basis of likes and shares done

by other customers. Chadwick Martin Bailey,

the author of a recent study in connection with

iModerate Research Technologies found that

consumers are ―67% more likely to buy from

brands they follow on Twitter, and 51% more

likely to buy from a brand they follow on

Facebook.‖ These facts and figures are

important due to the implications for

corporations and companies having an online

presence. According to the same study

and Mashable.com, ―79% are more likely to

recommend those that follow them on Twitter

to a friend, and 60% more likely to do the same

on Facebook.‖ This immensely helps the

marketers in increasing the customer database

through word of mouse.

Source : Vision Critical

16

MULTI - DIMENSIONAL

COMMUNICATION

No ad is as convincing as having someone you

trust recommend a product or service. With

social media, word-of-mouth advertising can go

worldwide in an instant with a single message

sent from a single consumer. With some

networks, the consumer can communicate with

thousands of people at the click of a button,

easily spreading a message about a

brand/product/service of companies. But as any

coin has two sides, social media also has its

disadvantages in the form of negative

comments/feedbacks.

LITERATURE REVIEW

1. Previous Research: Exploring Social

Media Marketing Towards a Richer

Understanding of Social Media in

Postmodernity, written by: Monika

Garnyte and Ana de Ávila Pérez in the

year December 2009 (Aarhus School of

Business, University of Aarhus ).

In this thesis the authors study explores

social media marketing through the lens

of postmodernity. The thesis

investigates how companies can employ

social media in order to communicate

with postmodern consumers. It is a

study about two social media marketing

strategies undertaken by Nike & ABC

The papers concludes that social media

is a treasured tool for marketers in order

to deal with the pandemonium,

complication, incongruities and change

that postmodernity has brought to the

discipline of marketing.

The practical implication of the findings

give various recommendations for

companies which aim to implement

social media marketing strategies in

postmodernity. Furthermore, the paper

contributes to the marketing practice

through the application of its findings to

a real organization.

2. A report was provided by Harvard

Business Review Analytic Services on

the basis of an online survey conducted

( 2010): The new conversation: Taking

social media from talk to action.

This report emphasizes on exponential

growth of social media and how

customers and organizations have

realized its importance and started

utilizing it effectively. This report talks

about how social media is extremely

valuable to companies in nurturing

relationships with customers,

developing new products and

monitoring their competition.

OBJECTIVES

1. To determine whether Conversational

marketing is a major tool in social

media from the consumers perspective

2. To understand if conversational

marketing, an upcoming contemporary

business approach via social media is

well received by the customer and the

extent to which customer relies on it to

make purchase decisions and to

influence others.

METHODOLOGY

A descriptive research methodology was

used for collecting data for this topic.

With the help of non-probablity

sampling the respondents were chosen. The

17

number of samples chosen was 50 which

consisted of both genders in the age group

between 20 and 40.

Both Primary and secondary data

collection was used in this research paper. A

structured questionnaire was prepared to find

out the objectives.

DATA ANALYSIS

Interpretation- The reliability statistics is used

to check the reliability and consistency of the

questionnaire used in the research study. The

value of Cronbach‘s alpha defines the same. If

the value of Cronbach‘s alpha is between 0.6 to

1.0, then the questionnaire is said to be

consistent and useful for the study. The above

value shows that the questionnaire used for

impugned study and the data used is reliable.

Graph-1

Interpretation-The above graph depicts that all the 50 respondents use social networking sites.

Root cause analysis- As world has become global village, it is very common that people use internet as

a mundane thing hence, all the respondents are very used to use social networking sites. Rationale

behind asking the question is to check the awareness about social networking sites amongst

respondents and to know if they engage in conversational marketing.

0

10

20

30

40

50

Yes No

50

0

usage of social networking sites

usage of socialnetworking sites

Reliability Statistics

Cronbach's

Alphaa

Cronbach's

Alpha Based

on

Standardized

Itemsa

N of

Items

.61 .71 10

18

Graph-2

Interpretation- The above graph depicts that 39 respondents use social networking sites daily, 8 uses it

weekly while 7 respondents uses it fortnightly.

Root cause analysis- The rationale behind asking the question is to check the frequency of usage of

networking sites.

Graph-3

Interpretation- Above graph depicts that 27 respondents have heard about conversational marketing

while 23 has not.

0

5

10

15

20

25

30

35

40

Daily Weekly Fortnightly

39

8 7

Frequency of usage

Frequency of usage

21

22

23

24

25

26

27

Yes No

27

23

Heard about CM

Heard about CM

19

Root cause analysis- The above question gives an idea that more than 50% of the respondents who are

in turn are the customers of several products knows about the concept known as conversational

marketing.

Graph-4

Interpretation- Above graph depicts that 11 respondents access SNS for accessing to information, 14

for knowledge gathering, 15 uses it for office work, 5 respondents uses for e-mail while 5 respondents

has not specified the purpose of their usage.

Root cause analysis- These figures indicate that out of 50, 45 respondent‘s uses it for some knowledge

based purpose which is an indication of the suggestion that companies can place their ads on social

networking sites, so that respondents may check those while working.

02

46

81012

1416

11

14 15

5 5

Series1

20

Graph-5

Interpretation- Above graph depicts that 45 respondents frequently notice product promotions on

social networking sites.

Root cause analysis- The reason behind asking this question is to check about the sighting of product

promotions by customers on social media.

Graph-6

Interpretation- The above graph depicts 43 respondents‘ states that product promotion is done on the

basis of customer feedback, while 7 respondents ‗states that product information by company proves

responsible for product promotion.

05

1015202530354045

45

3 1 1 0

Notice PP on social media

Notice PP on social media

0

5

10

15

20

25

30

35

40

45

Product info.byCom.

Customerfeedback

Quality ratingsby sites

7

43

0

How is PP done

How is PP done

21

Root cause analysis- The responses given by respondents state that many times customer feedback

proves more important than company information about product promotion, which shows

conversational marketing is very important in product promotions.

Graph-7

Interpretation- 47 respondents have given their positive responses on the statement that companies

should use such publicity while 3 respondents have negated this.

Root cause analysis- The rationale behind this information is to check the liking of respondents towards

the publicity made by the company. Responses states that customers like the product publicity done by

the company.

Graph-8

0

10

20

30

40

50

Yes No

47

3

should companies use such publicity

should companies usesuch publicity

0

10

20

30

40

50

Face book Twitter You tube Linked InMy Space

50 50 50

2 3

Prod. Information is effectively given on

Prod. Information iseffectively given on

22

Interpretation- Above graph states that all the respondents‘ states that Facebook, Twitter, and You

tube gives complete information about the product while 2 favoured linked in and 3 favoured My

space.

Graph-9

Interpretation- Above graph states that 17 respondents have bought nearly 5 products, while 15

respondents bought near about 6 to 10 products and 18 respondents bought 11 to 15 products.

Root-cause analysis- The buying behaviour states that customer bought products on the basis

experiences shared by other customers on social networking sites. It shows conversational marketing

helps to the customer and company vice-versa.

13

14

15

16

17

18

0 to 5 6 to 10 11 to 15

17

15

18

Products bought on basis of experience

Products bought on basisof experience

23

Graph-10

Interpretation- 41 respondents states that they frequently discuss about products offered on social

media, while 7 states they regularly but not so frequently does it, while 2 states they occasionally does

it.

Root-cause analysis- The reason behind interpreting the responses is to check the spread of information

of product through social networking sites.

0

10

20

30

40

5041

7 2 0 0

Discussion about products offered on social media

Discussion about productsoffered on social media

24

Graph-11

Interpretation- Above graph depicts that out of 50, 44 respondents‘ states that they would prefer

buying a product on the basis of customer feedback, and 6 states that they would prefer buying

company advertisement.

Root-cause analysis- The responses could be such and the reason could be that customers before

buying the products may depend more on customer feedback or ratings rather than company

advertisement. Personal experiences matter more than the company publicity for influencing consumer

opinion while buying. This shows that conversational marketing plays an important role in market

orientation approach.

0

5

10

15

20

25

30

35

40

45

Com.Adverstisement Customer feedback/ratings

6

44

whatwould be preferred while buying product

whatwould be preferred whilebuying product

25

Graph-12

Interpretation- Above graph depicts that out of 50, 47 respondents states that word of mouth of

experience of customers influence, while 3 states that it does not agree to it.

Root cause analysis- The reason for such responses could be found out in the responses of above

questions, the word of mouth of other consumers help other customers to buy the products.

Graph-13

Interpretation- above graph states that 41 respondents state that social networking sites provide

adequate information about the products.

0

10

20

30

40

50

Yes No

47

3

Word of mouth/experience influence

Word ofmouth/experienceinfluence

0

5

10

15

20

25

30

35

40

45

StronglyDisagree

Disagree Neutral Agree Stronglyagree

1 1 3 4

41

adequate product information

adequate productinformation

26

Root-cause analysis- The reasons behind such responses could be that respondents must have got help

of social networking sites for getting adequate product information, and it has helped them to buy the

products.

Graph-14

Interpretation- Above graph depicts that 44 respondents strongly agree on the part that social

networking sites helps in saving time, while 3 agree to it and 3 respondents stay neutral on this.

Root-cause analysis- The reason behind this is the social networking sites might have helped these

respondents to save time by providing adequate information to them about product.

Graph-15

0

5

10

15

20

25

30

35

40

45

StronglyDisagree

Disagree Neutral Agree Stronglyagree

0 0 3 3

44

saving time

saving time

0

2

4

6

8

10

12

14

16

18

StronglyDisagree

Disagree Neutral Agree Stronglyagree

2

5

10

18

15

variety of products/services

variety ofproducts/services

27

Interpretation- Above graph depicts that 15 respondents strongly agree to the statement that social

networking sites provides the total information of variety of products or services. 18 respondents agree

to it, 10 are neutral about 5 disagree to it and 2 strongly disagree to it.

Root-cause analysis- The responses may vary because of the experiences of the respondents from

different social networking sites. Some might have got adequate information about wide range of

products and services and some might not have got the same.

Graph-16

Interpretation- Above graph depicts that 18 consumers strongly agree on the fact that social

networking sites helps the respondents to decide appropriate prices of the product, while 18 agree to it.

8 respondents are neutral about it, while 2 disagree to it and 4 agree to it.

Root-cause analysis- The reason for such responses could be aid which social networking sites has

provided to the customers for determining the appropriate prices.

0

2

4

6

8

10

12

14

16

18

StronglyDisagree

Disagree Neutral Agree Stronglyagree

4

2

8

18 18

appropriate pricing

appropriate pricing

28

Graph-17

Interpretation- Above graph depicts that all respondents strongly agree on the part of effectiveness of

social networking sites for viral marketing.

Root-cause analysis- The reason behind such unison in response could be that all the respondents might

be using social networking sites, and are frequently using the product information given by the other

customers and it has proved effective for the respondents to buy the products. This mark the gauging of

the concept called as conversational marketing.

LIMITATION/SCOPE FOR FURTHER

WORK

The limitation of the present research

work was limited sample size and the

participants represented a narrow range of

age/occupation etc. Another improvement in

the study could have been done if my

methodology could also have included

surveying individuals involved with

participants. For e.g. family, friends, co-

workers etc. could have been a part of the

study. The major limitation was time constraint.

The future scope of the digital marketing

industry will be determined by ideas and

developments that call for the seamless

interworking of mediums. Research can be

done as to how mediums can be interlinked for

successful effective conversational marketing.

CONCLUSION

The art of conversation marketing

reflects the balance between action and

reaction, by both brand and consumer.

Ultimately it is the application of marketing

technology, combined with the acceptance that

consumers desire personal, mutually engaging

and loyal relationships, even in a digital age. As

per the research findings it can be clearly seen

that conversational marketing is an emerging

tool used by the marketers in the social mrdia

and this trend can be very useful if utilized

0

10

20

30

40

50

StronglyDisagree

Disagree Neutral Agree Stronglyagree

0 0 0 0

50

effectiveness of social networking sites for viral mktg.

effectiveness of socialnetworking sites for viralmktg.

29

properly. Two significant directions that will be

crucial for conversational marketing in the

future are (a) the increasing supremacy of

visual messaging vs. just text - which will

influence search and semantic technical

expertise ability to influence processes, and (b)

social interface - how it outlines its boundaries

with individual space and how it acclimatizes

itself to the culture and social structure in

different corners of the orb.

The research can be taken further by

conducting a study on consumer‘s buying

patterns and factors influencing their purchase

via social media.

REFERENCES

1. Blackshaw, P., & Nazzaro, M. (2004).

Consumer-Generated Media (CGM) 101:

Word-of-mouth in the age of the

Webfortified consumer. Retrieved July 25,

2008, from http://

www.nielsenbuzzmetrics.com/whitepapers

2. Cooper, S. (2013). Retrieved from :

http://www.businessinsider.in/Social-

Media-Demographics-The-Surprising-

Identity-Of-Each-Major-Social-

Network/articleshow/22949258.cms

3. Hambelton, K.(2011, March 25)

Conversational Marketing: The next phase

of customer engagement. Social CRM.

Retrieved from:

http://www.crmbuyer.com/story/72138.html

4. Kelley,B.(2010). Conversational Marketing

- Business Strategy Innovation.Retrieved

from http://www.business-strategy-

innovation.com/Conversational-Marketing-

White-Paper.pdf

5. Ledger, S. (2013,July 13) Conversational

Marketing: The art of conversation. Retrieved

from

http://blog.neolane.com/conversational-

marketing/conversational-marketing-art-

conversation/

6. https://www.surveymonkey.com/MySurvey_E

ditorFull.aspx?sm=5Q3TpadxAMyrYNL1mnID6

WDbdWG9y%2b7pmjnEiqegEoCKKS6QNoq%2f

%2bHYTcRFwO5P%2f

7. http://www.businessesgrow.com/2011/09/0

7/the-hidden-costs-of-social-media-

conversation/

ARGN. (2006). ARGNet. Retrieved July 7,

2008, from http://www.argn.com/about

8. Seave (2013). Retrieved 4th

January,2014

from :

http://www.forbes.com/sites/avaseave/2013/

07/22/how-social-media-moves-consumers-

from-sharing-to-purchase/

9. Kaplan Andreas (2011) Social media

between the real and the virtual: How

Facebook, YouTube & Co. can become an

extension of the real life of their users - and

sometimes even more, Prospective

Strategique, 38 (Mars), 8-13

10. W. Glynn Mangold, David J. Faulds :Social

media: The new hybrid element of the

promotion mix.Business Horizons, Volume

52, Issue 4, July–August 2009, Pages 357–

365

30

Emotional Intelligence: A General Perspective

Biswa Mohana Jena

Faculty, School of Commerce and Management, Ravenshaw University, Cuttack, Odisha

&

Dr. Sanjaya Kumar Satapathy

Dean, School of Commerce and Management, Ravenshaw University, Cuttack, Odisha

ISBN: 978-93-81791-28-8

ABSTRACT

We are at the beginning of a new century and intelligence and success are not views the same

way they were before. New theories of intelligence have been introduced and are gradually replacing

the traditional theory. The whole students have become the centre of concern, not only his reasoning

capacities, but also his creativity, emotion and interpersonal skills. IQ alone is no more the only

measure for success, emotional intelligence; social intelligence and luck also play a big role in the

person success and adjustment: Goleman (1995). The purpose of this research paper is to identify the

different stages of emotional intelligence with relation to age.

KEYWORDS

Social intelligence, success, reasoning capabilities, interpersonal skills, creativity.

INTRODUCTION

Our emotions play quite a significant

role in guiding and directing our behaviour.

Many a times they are seen to dominate our

behaviour in such a way that we have no

solution other then behaving as per their wish.

On the other hand, if a person has no emotional

current in him then he becomes crippled in

terms of living his life in a normal way. Hence,

emotions play a key role in providing a

particular direction to our behaviour and thus

shaping our personality according to their

development. We all want to be successful.

Many of us set goals around becoming great,

successful leaders. We are all looking for the

steps, strategies and or formulas that fit us best.

The industry is filled with authors, speakers,

coaches and other professionals that speak of

secrets to success. Not to mention the tapes

audio and Internet resources available. Success

in the business and the world globally looks to

a new and different type of leadership.

Leadership that blends knowledge (IQ) with

emotional intelligence quota (EQ).

Mayer and Salovey (1993) assert that,

emotional intelligence is the ability to monitor

31

one‘s own and others feelings and emotions to

discriminate among them and to use this

information to guide one‘s thinking and action

and promote emotion and intellectual growth.

Caruso and Wolfe (2004) define emotional

intelligence as the ability to perceive emotions,

access and generate emotions so as to assist

thought, understand emotions and emotional

knowledge and reflectively regulate emotions

so as to promote emotional and intellectual

growth.

CONCEPT OF EMOTIONAL

INTELLIGENCE

In Emotional Intelligence, Daniel

Goleman tells the story of a study done at

AT&T‘s Bell Labs, a New Jersey-based think

tank full of engineers who were all very

successful at school and who all scored highly

on IQ tests. In the study, managers and peers

nominated the top 10 to 15 percent who stood

out as exceptional, then the researches reviewed

the records of those people, observed them

working, interviewed them—all to see what it

was that could possibly separate them from

such stiff competition. What they found was

that the stars were more likely to have already

built networks within the lab which they could

rely on when they needed it to. They were the

superior collaborations, the most popular

Emotional Intelligence in a very big way is

about being socially adept, even

sophisticated—at work or at play. ―Popular and

charming,‖ writes Goleman, ―are terms we use

for people whom we like to be with because

their emotional skills make us feel good‖.

These popular and charming people, EI

proponents would argue, have a more subtle

control over their emotional brain, although

―control‖ might be a misleading word. In

essence, their brains are less likely to become

dominated by emotional impulses. And, though

the matter is complicated, it is not really their

will the separates them; more than likely, it is in

some large part the environment they have been

exposed to, the kinds of people, the situation,

their upbringing. EI promoters by no means

assert that emotional intelligence is a

completely learned phenomenon, or that it is

independent from heredity. Based, though, on

what we know of the way the brain develops in

the first two decades, it seems that in some

ways the neurological wiring to be able to read

the emotions of others is not so different from

the wiring that controls your fingers and

GENESIS OF EMOTIONAL

INTELLIGENCE

The knowing about one‘s emotional

intelligence in terms of his emotional

intelligence quotient has wider educational and

social implications for the welfare of the

individual and the society. This fact has now

been recognized and given practical shape and

implications all around the globe. The credit of

giving due publicity and acquainting the world

population with the importance and

significance of emotional intelligence goes to

the famous American psychologist Dr. Daniel

Goleman through his bestsellers like Emotional

Intelligence—why it can matter more than I.Q.

and working with emotional intelligence, etc.

He has brought to the forefront the following

points regarding the importance of emotional

intelligence and its measure through his

writings.

1. Emotional intelligence is as powerful, and

at times more powerful than IQ. While IQ

contributes only about 20% to success in

life, the other contribute the rest. We can

32

infer that emotional intelligence, luck and

social class are among those other factors.

2. Unlike IQ, emotional intelligence may be

the best predictor of success in life.

Emotionally intelligent people are more

likely to succeed in everything they

undertake in their lives.

3. Unlike what is claimed about IQ, we can

teach and improve in children and any

individual some crucial emotional

competencies paving the way for increasing

their emotional intelligence and thus

making their lives healthier, more enjoyable

and successful in the coming days.

4. The concept of emotional intelligence is to

be applauded, not because it is totally new

but because it captures on one compelling

term the essence of what our children or all

of us need to know for being productive and

happy.

5. IQ and even Standard Achievement Test

(SAT) scores do not predict who will be

successful in life. Even school success can

be predicted more by emotional and social

measures (e.g. being self-assured and

interested, following directions, turning to

teachers for help and expressing needs

while getting along with other colleagues)

than by academic ability.

6. One‘s emotional intelligence helps him

much in all the spheres of fife through its

various constituents or components namely

knowledge of one‘s emotions (self-

awareness), managing the emotions,

motivating oneself, recognizing emotions in

others (empathy) and handling

relationships. The achievement of the end

results in terms of better handling of mutual

relationships is quite essential and

significant in one‘s life. It can only be

possible through one‘s potential of

emotional intelligence and its proper

development.

The viewpoints and ideas propagated by

Daniel Goleman have brought a revolution in

the field of child caring, home, school and work

place management. It has also provided

sufficient support to the guidance and

counselling services including physical and

mental health programmes. Although these may

seem a bit exaggeration in the tall claim that

emotional intelligence is a sure guarantee for

unqualified advantage in life, yet there is no

denying of the fact that one‘s emotional make-

up counts quite substantially towards one‘s

ability to deal successfully with other people

and with one‘s own feelings. Since these

qualities count significantly towards one‘s

success in one‘s area of achievement, it may

help one to step in for the required success.

Most of the problems in our life whether

childhood or adolescent problems, home and

family problems, work situation problems or

political, regional or international problems are

the result of the mishandling of the involved

sentiments, feelings and emotions of the

individuals concerned, group of individuals,

society and the nations.

EMOTIONAL DEVELOPMENT DURING

DIFFERENT STAGES OF

DEVELOPMENT

Development, in general, applies to the

changes brought about with the passage of time.

Emotional development in this respect reflects

the following changes:

A. There is a gradual birth of different

emotions in an individual since his birth.

33

B. There are changes in the conditions or

nature of the stimuli that arouse child‘s

emotions.

C. There are changes in the manners in which

a child expresses his emotions.

A. EMOTIONAL DEVELOPMENT DURING

INFANCY

1. Right from the time of the birth, the infant

cries and his bodily movements seem to

give evidence of the presence of emotional

element in him. What are the specific

emotions, if any, he experiences at this

stage is a difficult question to be answered?

2. Truly speaking, as Mrs. Hurlock puts it, ―At

birth and shortly afterwards the first sign of

emotional behaviour is general excitement

to strong stimulation. There are no

indications of clear-cut, definite emotional

patterns that can be recognized and

identified as specific emotional states.‖

Thus, it is the stages of an undifferentiated

excitement to any stimulus.

3. The stage of undifferentiated excitement is

over in a very short time, when the general

excitement becomes differentiated into

simple responses that suggest pleasure and

displeasure. Stimuli like sudden loud noise,

wet, cold or hot objects applied to the

baby‘s skin, feeling hungry and

uncomfortable etc. bring unpleasant

responses. The stimuli like sucking, patting,

and warmth etc. bring pleasant responses.

4. The differentiation of general excitement

into pleasant and unpleasant responses takes

the following pattern according to Spitz:

―During the first two months, pleasure

and displeasure come in response to

‗physical‘ stimulation. By the third

month, pleasure is aroused by

‗psychological‘ stimulation as shown in

the baby‘s smile in response to human

face. Slightly later displeasure can be

aroused by psychological as well as

physical stimuli as may be seen in the

baby‘s reaction to being left alone.‖

(Hulock, E.B., 1959).

5. As said above, before the age of 6 months,

the emotional behaviour is expressed

through pleasant and unpleasant responses,

that is, there are only two emotions (distress

and delight) up to this stage. When the

infant completes six months, the negative

emotions take the lead and gradually in the

coming months, fear, disgust, anger,

jealousies all are distinguishable. Between

the 10th and 12th months the positive

emotions like elation, love, sympathy,

enjoyment all enter in the field. Up to 2

years, as the study of bridges conducted in

1931 shows almost all the emotions,

positive as well as negative, take their shape

and become quite distinguishable.

6. There is continuous variation in the

manifestation of emotions during infancy.

In the earlier months it is very difficult to

distinguish on the basis of facial expression

and bodily positions. Only the mothers can

determine the reasons behind her child‘s

crying and yelling. Later on they gradually

become distinguishable. Moreover in the

earlier months of infancy, child reacts more

violently to emotionally disturbing

situations, but as an infant approaches

childhood, his crying, yelling and the

vigorous movements of the body parts

become less and less violent. Gradually

with increasing age there is an increase in

34

linguistic responses and a decrease in motor

responses.

B. EMOTIONAL DEVELOPMENT DURING

CHILDHOOD

As said above, almost all the emotions

make themselves distinguishable by the

beginning of childhood. Therefore, emotional

development after the stage of emotions and the

changes in the expression of emotional

experiences. We find the following changes in a

child during childhood:

1. In infancy, the child is only concerned with

his own well-being; therefore, the emotions

are generally aroused by the conditions

which are related with his immediate well-

being. But as he grows, his world grows

larger and he has to respond to a variety of

stimuli. During childhood, peer group

relationship and school atmosphere and

other environmental factors influence his

emotional behaviour. His emotions get

linked with the new experiences and

interests and his emotional behaviour gets

linked with the new stimuli. At the same

time, he does not react to various old

stimuli. For example, he does not show

anger at being dressed or bathed, nor does

he show any fear of strangers.

2. There is a remarkable change in the

expression of emotional behaviour. In

infancy his behaviour is usually dominated

by too much intensity and is usually

expressed through motor responses like

crying, yelling etc. But in childhood and

especially in later childhood, the child tries

to express his behaviour through reasonable

means and is the result of many factors. In

childhood, the child is in a position to

express his feelings through language.

Secondly, he become social and realizes

that it may not be desirable or proper for

him to show his emotions at all times.

Thirdly, his intellect begins to play a proper

role in exercising check over emotional

outbursts.

Thus, the child advance towards

emotional stability and control and during the

later period of his childhood, demonstrates an

appreciable degree of control over his

emotions.

C. EMOTIONAL DEVELOPMENT DURING

ADOLESCENCE

The emotional balance is once again

disturbed in adolescence. An individual once

again experiences the violent and intensive

current of emotional experience. With regard to

emotional experiences, this is the period of

intensive storm and stress. At no stage this

emotional energy is as strong and dangerous as

in adolescence. It is very difficult for an

adolescent to exercise control over his

emotions. The sudden functioning of sexual

glands and tremendous increase in physical

energy makes him restless. Moreover,

adolescents are not consistent in their emotions

Emotions during this stage fluctuate

very frequently and quickly. It makes them

extremely sad. So there is too much uncertainty

in the nature of their emotional state.

At this stage, there in a strong need for

training of emotions and proper channelization

of emotional energy. The Hadow report has

emphasized this need in the following words:

―There is a tide which begins to rise in

the veins of youth at the age of eleven or

35

twelve. It is called by the name of adolescence.

If that tide can be taken at the flood, and a new

voyage begun in the strength and along the flow

of its current, we think that it will move on to

fortune.‖ (Ross, J.S., 1951).

D. EMOTIONAL DEVELOPMENT IN

ADULTHOOD

Emotional development reaches its

maximum in adulthood. During this stage,

generally, all individuals attain emotional

maturity. Given below is the meaning of

emotional maturity. MEANING OF

EMOTIONAL MATURITY

In brief, a person can be called

emotionally mature if he is able to display his

emotions in an appropriate degree with

reasonable control. An emotionally mature

person will possess the following

characteristics:

1. Almost all the emotions can be distinctly

seen in him and their pattern of expression

can be easily recognized.

2. Manifestation of emotions is very much

refined. Usually he expresses his emotions

in a socially desirable way.

3. He is able to exercise control over his

emotions. Sudden inappropriate emotional

outbursts are rarely found in him. He is able

to hide his feelings and check his emotional

tide.

4. The person no more hangs in mere idealism,

but he actually perceives the things in their

real perspective. He is not a daydreamer and

does not possess the desire to run away

from realities.

5. The intellectual powers like thinking,

reasoning etc. are properly exercised by him

in making any decision. He is more guided

by his intellect than his emotions.

6. He does not possess the habit of

rationalization i.e. he never gives arguments

in defence of his undesirable or improper

conduct. Also he never puts the

responsibility of his own mistakes on

others. He is always honest in his

behaviour.

7. He possesses an adequate self-concept and

self-respect. He never likes to do the things

or to show such behaviour as can injure his

self-respect and is adverse to his self-

concept.

8. He is not confined to himself. He thinks for

others and is keen to maintain social

relationships. He never engages himself in

such a behaviour which is antisocial and

can result in the social conflicts and

blockage of social relationships.

9. He has the courage to exercise his emotions

at a proper time in a proper place. If there is

a danger to his self-respect or if an innocent

person is attacked, he can rise to the

occasion by exercising his emotion of

anger. But if he commits a mistake and is

rebuked by his boss, he is equally able to

check his emotion of anger. Mature

emotional behaviour is characterized by

greater stability. Person having such

maturity shows no sudden shift from one

emotion to another.

As a conclusion regarding the meaning

of emotional maturity, Arthur T. Jersild is of

the opinion that emotional maturity should not

involve only simple restriction and control.

According to him, it is a very narrow view of

emotional maturity. He writes. ―An adequate

description of emotional maturity must take

36

account of the full scope of the individual‘s

capacity and powers, and of his ability to use

and enjoy them. In its broadest sense emotional

maturity means the degree to which the person

has realized his potential for richness of living

and has developed his capacity to enjoy things,

to relate himself for others, to love and to

laugh: his capacity for whole-hearted sorrow

when an occasion for grief arises… and his

capacity to show fear when there is occasion to

be frightened, without feeling a need to use a

false mask of courage.‖ (Skinner, C. F., 1968).

HOW TO HELP IN THE PROPER

DEVELOPMENT OF EMOTIONAL

INTELLIGENCE?

The following measures may prove

helpful in this direction:

1. Try to help yourself and the youngsters

develop the ability to correctly perceive

feelings both in one and others.

2. Try to give up the misgivings and

misperception of the feelings in others. It

leads to a hostile attribution bias.

Remember that love always begets love,

while suspicion, heartedness and

aggressions are rewarded likewise.

3. In all situations, self-awareness of the

feelings and emotions is most important.

Try to teach the children and help yourself

to know what you are feeling when you are

feeling it at a particular time.

4. For understanding others and their feelings,

develop the qualities of a good listener.

People who have a high EQ (emotional

quotient) also have a high score on empathy

and empathy comes through effective

listening.

5. Try to do away with the wrong notion that

thought is most appropriate when not

clouded by emotions. Try to learn the

integration of thoughts and emotions, heart

and mind for the appropriate behaviour at

the right time. Therefore, do not try to

suppress emotions (as every feeling has its

value and significance) but to strike a

balance between rational thoughts and

emotions.

6. Teach the children and yourself that all

emotions are healthy (because emotions are

what unite the heart, mind and the body).

Anger, fear, sadness, the so called negative

emotions are as healthy as peace, courage

and joy. The important thing is to learn the

art of expressing one‘s feelings or emotions

in a desirable way at a desirable time in a

desirable amount. In this connection, have

this remark of the Great Greek Philosopher

Aristotle as a guideline. ―Anyone can

become angry—that is easy. But to be angry

with the right person, to the right degree, at

the right time, for the right purpose, and in

the right way—that is not easy.‖

7. Try to practice and teach the children the art

of managing the feelings and emotions as

adequately as possible. This is especially

important for the distressing emotions of

fear, pain, anger etc.

8. Don‘t allow the emotions and feelings to

develop as hindrance and obstacles in your

path. Use them us a motivating agent or

force for achieving your goal.

9. Teach yourself and your children the

lessons of empathy, i.e. developing a sense

of what someone else is feeling.

10. Have measures for the proper development

of social skills for better communication

37

and interpersonal relationship with others.

Don‘t break the communication channel

and express your feelings with an equal

sense of attending and listening to other‘s

feelings for the better management of

relationship.

11. Try to provide more time and efforts for

developing not just cognitive professional

skills but also affective skills for the

development of emotional intelligence.

12. Last but not the least is to provide you as a

model or companion for maintaining proper

emotional bonds. If you have developed

yourself as an emotionally intelligent

individual, you may inspire or lead others to

become so. However, it is not essential to

be perfect or complete for guiding others as

parents, teachers or bosses. One just needs

to see what others need, and be there for

meeting their needs

POTENTIAL ROLE OF EMOTIONAL

INTELLIGENCE IN EVERYDAY LIFE.

In the last we can say that is there

anything new about emotional intelligence? In

some ways, emotional intelligence really is not

new. In fact, it is based on a long history of

research and theory in personality and social, as

well as I/O, psychology. Furthermore, Goleman

has never claimed otherwise. In fact, one of his

main points was that the abilities associated

with emotional intelligence have been studied

by psychologists for many years, and there is an

impressive, and growing, body of research

suggesting that these abilities are important for

success in many areas of life.

However, rather than arguing about

whether emotional intelligence is new, It is

believe that it is more useful and interesting to

consider how important it is for effective

performance at work. Although it have not had

the time to cover very much of it, It is hope that

have shown that there now is a considerable

body of research suggesting that a person‘s

ability to perceive, identify, an manage emotion

provides the basis for the kinds of social and

emotional competencies that are important for

success in almost any job. Furthermore, as the

pace of change increases and the world of work

make ever greater demands on a person‘s

cognitive, emotional, and physical resources,

this particular set of abilities will become

increasingly important. And that is good news

I/O psychologists, for they are the ones who are

best situated to help clients to use emotional

intelligence to improve both productivity and

psychological well-being in the workplace of

tomorrow.

CONCLUSION

If there is anything close to a consensus

in the understanding of intelligence. It is that

the Intelligence Quotient or ―IQ‖ does not

wholly account for an individual‘s success or

failure in the world. In fact, most social

scientists who study intelligence estimate that

IQ accounts for only 20 to 30 percent of

outcome. Even if, as proponents assert, IQ is

the ―best known predictor‖ of things like

financial success, these numbers are not the

kind you would want to wager on. The quest to

discover what accounts for the rest of who we

are and what we do—the remaining 70 to 80

percent—is now what drives the field. So we

can say that IQ is not the overall predictor of

the success in an individual. It requires other

factors for the success, in other factors

emotional intelligence is one of the biggest

reason in achieving the success

38

REFERENCES

1. Abraham, R. (1999). Emotional Intelligence

in organizations: a conceptualization.

Genetic Social & General Psychology

Monographs, 125(2), 209-224.

2. Aggarwal, Y.P. (2007). The Science of

Education Research; Kurukshetra: Nirmal

Book Agency.

3. Barnett, L.F.et al. (2000). Emotional

Intelligence and life Adjustment

4. Cox, T. (1978). Stress. (Ed.). London:

MacMillan.

5. Goleman, D. (1998). Working with

Emotional Intelligence. New York: Bantam

Books

6. McClelland, D.C. (1985). Human

motivation. Glenview, IL: Scott Foresman.

39

Investment Decision On The Basis Of Intrinsic Value Of

Shares Through Fundamental Analysis: A Case Study of

ITC Ltd.

Dinesh Bargale

Lecturer, School of Economics, DAVV Indore

&

Pooja Jain

Assistant Professor, Acropolis Technical Campus, Indore

ISBN: 978-93-81791-28-8

ABSTRACT

Fundamental analysis is the foundation of solid investing. It helps to determine the underlying

health of a company by examining the business‘ core numbers. From these ―fundamentals‖ investors

evaluate if a stock is under- or overvalued. If the intrinsic/real value of the stock is above the current

market price, the investor would purchase the stock because he knows the stock price would rise and

moves towards its intrinsic value. If the intrinsic/real value of the stock is below the current market

price, the investor would sell the stock because he knows the stock price is going to fall and come

closer to its intrinsic value.

To the present study is attempt in this direction, which focuses on the various aspects, viz;

Earning Per Share, Price to Earnings Ratio, Project Earning Growth, Price to Sales, Price to Book

Value Ratio, Dividend Payout Ratio, Dividend Yield, Book Value , Return on Equity, Intrinsic Value

of the Share and Value Anchor etc. These paper includes Earning & Dividend Level , Growth

Performance, Risk Exposure, Valuation Multiples and Estimation of Intrinsic Value.

KEYWORDS

Fundamental Analysis, Intrinsic Value, EPS, DPS, Payout Ratio, Value Anchor.

INTRODUCTION

Fundamental analysis is the foundation

of solid investing. It helps you determine the

underlying health of a company by examining

the business‘ core numbers: its income

statements, its earnings releases, its balance

sheet, and other indicators of economic health.

From these ―fundamentals‖ investors evaluate

if a stock is under- or overvalued.

In this regard the intrinsic value of the

stock must be known by the rational investors,

it helps to define actual worth of the stock. For

40

calculating, the intrinsic value of an equity

stock, the security analysis must forecast the

earnings and dividends expected from the stock

and choose the discount rate which reflects the

riskiness of the stock. This is what is involved

in the fundamental analysis. Commonly

advocated procedure of fundamental analysis

which is a three step examination, calls for;

a) Understanding the macroeconomic

environment and developments

b) Analysing the prospect of the industry

to which the firm belongs.

c) Assessing the projected performance of

the company.

But the researcher, in this study, have

confined to the third phase of fundamental

company analysis on at ITC Ltd. Therefore, the

researcher in the present work have focused

mainly on the assessing the projected

performance of the company.

FUNDAMENTAL ANALYSIS

DEFINITION

Fundamental analysis is a method of

finding out the future price of a stock which an

investor wishes to buy. It relates to the

examination of the intrinsic worth of a

company to find out whether the current market

price is fair or not, whether it is overpriced or

under-priced. Estimate of real worth of a stock

is made by considering the earning potential of

the company which depends on investment

environment and factors relating to specific

industry, competitiveness, quality of

management, operational efficiency,

profitability, capital structure and dividend

policy

If the intrinsic/real value of the stock is

above the current market price, the investor

would purchase the stock because he knows the

stock price would rise and moves towards its

intrinsic value. If the intrinsic/real value of the

stock is below the current market price, the

investor would sell the stock because he knows

the stock price is going to fall and come closer

to its real/intrinsic value.

LITERATURE REVIEW

The origin of Fundamental analysis for

the share price valuation can be dated back to

Graham and Dodd (1934) in which the authors

have argued the importance of the fundamental

factors in share price valuation. Theoretically,

the value of a company, hence its share price, is

the sum of the present value of future cash

flows discounted by the risk adjusted discount

rate. This conceptual valuation frame work is

the spirit of the renowned dividend discount

model developed by Gordon (1962). However,

the dividend discount model valuation involves

the forecast of future dividend payment which

is difficult due to the changes in firm‘s dividend

policy. Thus, the subsequent studies along this

line of literature searched for the cash flow that

is unaffected by the dividend policy and can be

obtained from the financial statements.

Ou and Penman (1989) use financial

statement analysis of income statement and

balance sheet ratios to forecast future earnings.

The primary motivation for this research is to

identify mispriced securities. However, these

authors demonstrate that the information in the

earnings prediction signals is helpful in

generating abnormal stock returns.

Fama and French (1992) show that

value stocks (high book/market) significantly

outperform growth stocks (low book/market).

The average return of the highest book/market

decline is reported go be one percent per month

higher than the average return for the lowest

book/market decline.

41

Jagadeesh and Titman (1993) document

that over a horizon of three to twelve months,

past winners on an average continue to

outperform past losers by about one percent per

month.

Lev and Thiagarajan (1993) use

conceptual arguments to study their ratios.

They demonstrate that the earnings prediction

signals in variables like growth in accounts

receivables relative to sales growth and gross

margin rate are incrementally associated with

contemporaneous stock returns and are

significant in predicting future earnings.

Joseph. D. Piotroski (2000) examines

whether a simple accounting based

Fundamental Analysis strategy, when applied to

a broad portfolio of high Book to Market firms,

can shift the distribution of returns earned by an

investor. The research shows that the mean

returns earned by a high Book to Market

investor can be increased by at least 7.5%

annually through the selection of financially

strong high Book to Market firms.

Pascal Nguyen, (2003) constructs a

simple financial score designed to capture short

term changes in firm operating efficiency,

profitability and financial policy. The scores

exhibit a strong correlation with market

adjusted returns in the Current fiscal period and

the same continues in the following period also.

STATEMENT OF THE PROBLEM

Sequence of Fundamentals analysis is

economy-industry-company analysis. And the

last leg of this sequence is Company analysis. It

may be organized in to two parts

a) A study of financials statement

b) A study of other factor

The study focused on analysis of

financial statement only to find out the intrinsic

value. There are two principle methods of

equity valuation, viz the Dividend Discount

Model and the Earning Multiplier Model. in

practice , the earning multiplier method is the

most popular method.

Investment analysis start with a

historical analysis of earning (and dividend),

growth, risk, and valuation and use this as a

foundation for developing the forecasts

required for the estimating the intrinsic value.

While earning is important, by them, they don‘t

tell us anything about how the market value of

the stock. To the present study is attempt in this

direction, which focuses on the various aspects,

viz; Earning Per Share, Price to Earnings Ratio,

Project Earning Growth, Price to Sales, Price to

Book Value Ration, Dividend Payout Ratio,

Dividend Yield, Book Value , Return on

Equity, Intrinsic Value of the Share and Value

Anchor Etc.

OBJECTIVE OF THE STUDY

1. To determine the Investment decision for

the long run.

2. To calculate the return on equity of ITC

Ltd.

3. To find out the book value per share,

earning per share, dividend payout ratio,

dividend per share of ITC Ltd.

4. To estimate the compound growth rate

performance on sales, earnings and

dividend of ITC Ltd.

5. To determine price earnings ratio of ITC

LTD.

6. To estimate the intrinsic value of ITC

Ltd.

RESEARCH METHODOLOGY

Research Design: in the view of the

objective of the study listed above, this

research is exploratory in nature. which

42

largely interpret the already available

information and it lays particular emphasis

on analysis and interpretation of the existing

and available information, and it makes use

of secondary data.

Sources of Data: The secondary data

consist of the annual report of ITC Ltd.

Ranging from 2005-06 to 2012-13. Various

other reports like company magazines,

published books and website were also

referred to fir the present study.

Tools for Analysis: the data collected for

the study was analyse logically and

meaningfully to arrive at meaningful

calculation, the following are the tools

applied for the data analysis in the present

study.

Financial Tools: Earning Per Share,.

Price Earning Ration, Projected

Earnings Growth, Price to Sales, Price

to Book, Dividend Payout Ratio.

Dividend Yield, Book Value.

Statistical analysis: Compounded

Annual Growth Rate (CAGR), Geometric

Mean.

SCOPE AND PERIOD OF THE STUDY

The scope of the study define in terms if

concept adopted and period under focus: firstly,

the binary concept of return on equity , book

value per share , intrinsic value of the share

were used for measuring profitably and market

price of the share also to arrive at various

objective of the study. Secondly the study is

based on the annual report of the company for

the period of 8 year from 2005-06 to 22012-13.

The reason for restricting the study to this small

period is the time constraint. Thus, on the

whole, the purpose of the research is to analyse

the past and present performance of ITC Ltd.

On various financial areas like return on equity,

books value of the share, growth rate in various

business factors, and the intrinsic value of the

share, etc.

LIMITATIONS OF THE STUDY

The information used is primarily from

historical annual report available to the public,

and the same doesn‘t indicate the current

situation of the firm. Since the financial matters

are sensitive in nature.

PART 1: EARNINGS AND DIVIDENDS

LEVEL

To determine the earnings and dividend

level, investment analysis like return on equity,

the book value per share, the earning per share,

the dividend pay-out ratio and dividend per

share. The data relating to such factors is

provided in the Table 1.

Return on Equity: return on equity is

derived by taking net income (profit after

interest and taxes) and dividing it by the

shareholder‘s equity. This indicated the

return which the management is realizing

from the shareholder‘s equity and shows

how effectively ordinary shareholder funds

are being utilized by management. The

return on equity is defined as:

Return on Equity: (PAIT/Ordinary

Shareholder Funds) x 100

Book Value (BV) Per Share: book value

per share means the amount net worth is

available to each share outstanding in the

company. It is derived the total

shareholder‘s funds by the total no of share

outstanding. The book value per share is

calculated as:

BVPS: Total Equity Funds/No. of Share

Outstanding

43

Earnings Per Share (EPS): Earning per

share are derived by dividing the profit of a

company by the total no. of share

outstanding. Earning here mean the net

profit (i.e., profit after interest and taxes).

This is the amount by which the total

revenues exceed the total expenses for the

year:

EPS: (PAIT-Preference Dividend)/ No. of

Outstanding Share

Dividend Payout Ratio: The dividend

payout ratio represents the proportion of

equity earnings which is paid out as

dividends. It is defined as:

Dividend payout ratio: (Equity

Dividends/Equity Earnings) x 100

Dividend Per Share: The dividend per

share is simply the dividend declared per

share. In India, the dividend is stated as a

percent of the paid up value per share.

PART 2: GROWTH PERFORMANCE

To calculate the historical growth, the

compounded annual growth rate (CAGR) in

variable like sales, net profit, EPS, and dividend per

share is used.

Table 1: Return on Equity, Book Value Per Share, Earning Per Share, Dividend Pay-out Ratio, Dividend Per share

Year Return on Equity

(%)

Book Value Per

Share (Rs.)

Earnings Per

Share(Rs)

Dividend Payout

Ratio

Dividend Per

share

2005-06 25.38 24.14 6.14 43.16 2.65

2006-07 25.84 27.89 7.37 42.06 3.10

2007-08 24.84 32.37 8.43 41.52 3.50

2008-09 22.53 36.95 8.9 41.57 3.70

2009-10 28.61 37.67 11.03 90.66 10.00

2010-11 29.24 21.12 6.55 42.75 2.80

2011-12 32.49 24.89 8.09 55.62 4.50

2012-13 33.22 29.31 9.74 53.90 5.25

Sources: Complied from the annual report of ITC Ltd.

Compounded Annual Growth Rate: The

Compounded Annual Growth Rate (CAGR) of

Sales, Earnings Per Share and Dividend Per Share

for the period of the study for ITC Ltd. is calculated

below.

1) CAGR of Sales = [Sales for 2012-13/Sales

for 2005-06]1/8

– 1 = [44224.85 /

16784.26]1/8

– 1 = 0.1287 or 12.87%

2) CAGR of EPS = [EPS for 2012-13/EPS

for 2005-06]1/8

– 1 = [9.74/6.14]1/8

– 1 =

0.0593 or 5.93%

3) CAGR of DPS = [DPS for 2012-13/DPS

for 2005-06]1/8

– 1 = [5.25/2.65]1/8

– 1

=0.0892 or 8.92%

4) CAGR of BV per Share = [BV for 2012-

13/BV for 2005-06]1/8

– 1 = [29.31/24.14]1/8

– 1 = 0.0245 or 2.45%

5) CAGR of Net Worth = [Net Worth for

2012-13/Net Worth for 2005-06]1/8

– 1 =

[23157.9/9199.25]1/8

– 1 = 0.1223 or

12.23%

44

Table 2: CAGR of various Factors

Factors CAGR (%)

1. CAGR of sales 12.87

2. CAGR of EPS 5.93

3. CAGR of DPS 8.92

4. CAGR of BV per share 2.45

5. CAGR of net worth. 12.23

Sustainable Growth Rate: Sustainable

growth rate is defined:

Sustainable Growth Rate:

Retention Ratio x Return on

Equity

Based on average retention ratio and the

average return on equity for the study period,

the sustainable growth rate of ITC Ltd. is

provided in table 3.

Sustainable Growth rate = Average Retention

Ratio x Average Return on Equity

= 0.587 x

27.76= 16.30%

PART 3: RISK EXPOSURE

Risk is the potential of losing something

of value, weighed against the potential to gain

something of value. We may find the

Following measures quite useful in getting a

handle over risk.

Beta

Volatility of return on Equity

Table 3: Calculation of average Retention Ratio and Average Return on Equity

Year Retention Ratio Return on Equity

2005-06 0.5684 25.38

2006-07 0.5794 25.84

2007-08 0.5848 24.84

2008-09 0.5843 22.53

2009-10 0.9034 28.61

2010-11 0.5725 29.24

2011-12 0.4438 32.49

2012-13 0.461 33.22

Average 0.587 27.76

Sources: : Complied from the annual report of ITC Ltd.

Beta: The capital Asset Pricing Model (CAPM)

is currently the most popular risk-return model.

According to the CAPM, the risk of a stock is

denoted by its beta, which measures how

sensitive are the return on the stock to

variations in the market return. The beta is

defining As.:

The formula for the beta of an asset within a

portfolio is

Where ra measures the rate of return of the

asset, rb measures the rate of return of the

portfolio benchmark, and cov(ra,rb) is

the covariance between the rates of return.

According to the CAPM, the required return on

an equity stock is calculated as follows:

45

Required rate of return= Risk free

return+Beta (Market Risk Premium)

Volatility of return on equity: the

volatility of return on equity may be

defined as:

Volatility = (Range of return on equity over

the study period/Average return on equity over

the study period)

Volatility= 10.69/27.76= 0.385

PART 4: VALUATION MULTIPLIES OF

THE STOCK

The most commonly used valuation

multiplies are:

Price to Earnings Ratio: The price to

earnings ratio ( PE ratio) reflects the price

the investor are willing to pay for every

rupee earning per share. The Prospective

PE ratio defined as

PE Ratio = (Price per share at the beginning of

year n)/ (Earning per share for year n)

This ratio for ITC Ltd., for the study period is given

in table no. 4.

Table no. 4: Price to Earnings Ratio (Prospective)

Year Price Per Share at the

Beginning of the Year

Earnings Per Share(Rs) P/E Ratio (Multiple)

2005-06 1352.65 6.14 220.30

2006-07 199.25 7.37 27.04

2007-08 146.8 8.43 17.41

2008-09 210.6 8.9 23.66

2009-10 184.35 11.03 16.71

2010-11 264 6.55 40.31

2011-12 182.5 8.09 22.56

2012-13 226.95 9.74 23.30

Sources: Complied from the annual report of ITC Ltd.

Interpretation:

The price earnings multiple of the company decline

in 2006-07 i.e.27.04 times to 220.30 times in 2005-

06.Further , it declined to 22.56 times in 2011-12.

Finally, it was recorded at 23.30 times in 2012-13.

It can be concluded that the investment required for

every one rupee of earnings has shown the

fluctuating trend over the study period.

Price to Book Value Ratio: the Price to book

value ratio reflects the price the investors are

willing to pay for every rupee of book value per

share. The retrospective Price to book value

ratio is defined as:

Price to Book Value Ratio: (Book value per share

at the end of year n)/ (Earning per share for year

n)

Table 5: Price to book value ratio for ITC Ltd (Retrospective)

Year Price Per Share at the End

of the Year

Book Value Per Share(Rs) Price to Book Value Ratio

(Multiple)

2005-06 195.15 24.14 8.08

2006-07 151.15 27.89 5.42

2007-08 206.25 32.37 6.37

2008-09 184.85 36.95 5.00

2009-10 263.05 37.67 6.98

2010-11 182.1 21.12 8.62

46

2011-12 226.9 24.89 9.12

2012-13 309.45 29.31 10.56

Sources: Complied from the annual report of ITC Ltd.

Interpretations:

The price to book value multiple of the

company decline from 8.08 times in 2005-06 to

5.00 times in 2008-09. Further it rose 6.98

times in 2009-10 to 10.56 times in 2012-13.So,

it can be concluded that the investment required

for every one rupee of book value of a share has

shown the uptrend over the study period.

PART 5: ESTIMATION OF INTRINSIC

VALUE

The estimation of the intrinsic value of

the share consists of the following steps:

Estimate the expected earnings

per share

Establishing PE ratio

Determination of value anchor

and value range

Estimation of expected Earnings per

share: To estimate the expected earnings

per share by projecting the sales, and others

business parameters. Based on how the

company has done in the past, how it is

faring currently and how is likely to do in

future, in investment analyst estimate the

future (expected) EPS. An estimate of EPS

is an educated guess about the future

profitability to the expected EPS for ITC

Ltd. Is provided in Table No 6.

Table 6: EPS Forecast for the Year 2013-14

Particulars 2012-13 Assumption 2013-14 (Projected)

Net Sales 32761.98 Increased by 25 % 40952.47

Less. Operating Expenses 21655.72 Increased by 20 % 25986.86

Profit Before Taxation 11106.26 14965.61

Less. Taxes 3412.07 Increased by 16 % 3958.00

Profit After Taxes 7693.58 11007.61

No of Equity Share 790.18 790.18

Earnings Per Share 9.74 13.93

Sources: Complied from the annual report of ITC Ltd.

Interpretation;

The projected EPS for 2013-14 was Rs. 13.93.

which was calculated on the certain

assumptions.

Establishment of a PE ratio: the second half of

the valuation is concerned with the price

earnings ratio. This reflects the price investor

are willing to pay per rupee of EPS. The

researcher has calculated the PE ratio by using

the constant growth dividend discount model,

and the historical analysis.

Constant growth dividend model: the PE ration

for the constant growth firm from the constant

growth dividend discount model is defined as:

PE ratio: (Dividend payout/ (Required return

on equity-Expected growth rate in dividends))

Dividend payout ratio: If the dividend payout

ratio increases the ratio increases, which has a

favourable affect on the price earning multiple.

However, an increase in the dividend payout

ratio has the effect of lowering the expected

growth rate of dividends, which leads to a

47

decrease in the price earning multiple. The

dividend payout ratio of ITC Ltd. Is set equal to

the average dividend payout ratio for the study

period, which is given as follows:

Average Dividend Payout Ratio:

(43.16+42.06+41.52+41.57+90.66+42.75+55.6

2+53.90)/8 = 51.40%

Required return on equity: The required return

on equity is a function of the risk free rate of

return and a risk premium. According to

CAPM, popularity used risk-return model, the

required rate of return on equity is: Risk free

return + Beta*(Expected market Risk

Premium)

To get the required rate of return, the following

assumption has been made:

a. The risk free rate of return is 10

percent.

b. The Beta of ITC Ltd. Stock is

0.74

c. The expected market risk

premium is 15 percent.

Given these assumptions, the required return on

equity stock of ITC Ltd. Is:

Required rate of return = 10+0.74(15) =

21.1%

Expected growth rate in dividends: the third

variable influencing the PE ratio is the expected

growth rate in dividends. The expected growth

rate in dividends is equal to:

Retention ratio x return on equity.

The expected growth rate in dividends may be

set equal to the product of average retention

ratio and the average return on equity for the

study period work out to be=0.587 x 21.1

=12.38

Using the above input, the PE ratio for the stock

of ITC Ltd. Works out to

= (1-0.5870) / (0.211-0.123) = 4.69

Historical analysis: we may look at the

historical PE ratio of the company and take a

view on what is reasonable PE ratio, taking in

to account the changes in the capital market and

the evolving competition. The average PE ratio

for ITC Ltd. IS AS FOLLOWS:

Average PE ratio:

(220.30+27.04+17.41+23.66+16.71+40.31+22.

56+23.30))/8 = 48.91

Considering the changing condition in the

capital market and the evolving competition for

ITC Ltd., we may say that the average PE ratio

for the study period is applicable in the

immediate future as well.

The weighted ratio:

PE ratio based on the constant growth

dividend discount model: : 4.69

PE ratio on historical analysis : 48.91

We can combine these two estimates by taking

a simple arithmetic average of them – this

means that both the estimates are accorded

equal weight. Doing so, we get the weighted PE

ration of:

The Weighted average PE ratio:

(4.69+48.91)/2 = 26.8

Determination of the value anchor and value

range: the value anchor is obtained as follows:

Value anchor= Projected EPS x Appropriate

PE ratio : 13.93 x 26.8 = Rs. 373.32

However, as valuation is inherently an

uncertain and imprecise exercise, it would

naïve to put great faith in a single point intrinsic

value estimate. In the present study the intrinsic

value estimate of Rs.373.32 was arrived at, it

may be more sensible to talk of an intrinsic

value range say Rs.335.99 to Rs. 410.65.

48

FINDINGS

1. The intrinsic value estimate of

Rs.373.32 was arrived at, it may be

more sensible to talk of an intrinsic

value range say Rs.335.99 to Rs.

410.65.

2. The expected growth rate in dividends

equal to the products of average

retention ratio, and the average return

on equity for the study period was

12.38%.

3. The projected EPS for 2013-14 was

13.93.

4. The risk free rate of return was 10%, the

beta coefficient was 0.74 and expected

market risk premium was 15%.

5. PE ratio was based on Constant

Dividend Discount Model was 4.69, &

PE ratio was based on Historical

Analysis was 48.91 and weighted

average PE ratio was 26.8.

6. The sustainable growth rate of ITC ltd.

was 16.30%.

7. The volatility of return on equity of ITC

Ltd. was 0.385% over the study period.

8. The CAGR in sales was 12.87, similarly

the CAGR in EPS, DPS, Book Value

Per Share, Net worth were 5.93%,

8.92%, 2.455, 12.23 % respectively.

SUGGESTIONS

From the above findings and

calculations the researcher have suggested that

the investing rule : If share price is less than

Rs.335.99 – Buy the stock of this company , If

the share price is in between Rs.335.99 &

Rs.373.32 , Hold the Stock, and if the share price is

more than Rs.373.32 , Sell the stock.

REFRENCES

1. Bhalla, V.K.(2008), Investment

Management : Security Analysis &

Portfolio Management (14th

Ed.)

S.Chand & Company Ltd., New Delhi,

pp.491-524.

2. Donald E.Fischer & Ronald J.Jordon

(2006), Security Analysis & Portfolio

Management (6th

Ed.,), Prentice Hall of

India Pvt.Ltd., New Delhi, pp.257-275

3. Eugene F.Brigham, Micheal C. Ehrhardt

(2007), Financial Management (Theory

& Practices) (6th

Ed.,), Thomson India

Edition, United States , pp.261-263.

4. James C.Van Horne.(2002), Financial

Management & Policy (12th

Ed.,),Pearson Education Asia, Delhi,

pp.85-89.

5. Ranganatham M.Madhumati R.(2005),

Investment Analysis & Portfolio

Management , TMH Publishing House,

New Delhi, pp.446-462.

6. Sudarshan Reddy G.( 2010), Financial

Management Principles & Practices (2nd

Ed.,), Himalaya Publishing House,

pp.176-180.

7. Vyuptakesh Sharan (2005),

Fundamentals of Financial

Management, Pearson Education , New

Delhi, pp.33-36.

8. Pandey I.M.(2010), Financial

Management (10th

Ed.,), Vikas

Publishing House Pvt.Ltd., New delhi,

pp.441-442.

9. Khan.M.Y., and Jain.P.K. (2011),

Financial Management, TMH

Publishing Company., New Delhi,

pp.4.7-4.10.

10. Bhalla , V.K.(2007), Financial

Management & Policy (Text & Cases)

49

(6th

E.,), Anmol Publication Pvt.Ltd.,

New Delhi, pp.728-773.

11. Chandrabose D.(2006), Fundamentals

of Financial Management , Prentice

Halllof India Pvt. Ltd., New Delhi,

pp.254-277.

12. Prasanna Chandra (2008), Investment

Analysis & Portfolio Management,

TMH Publishing House , New

Delhi,pp.442-462.

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Growth Rate - A Case Study of Wipro

& Infosys‖, Indian Journal of Finance,

Vol.4, No.1, pp.46-53.

14. Dr.Selveam M., Dr.Babu M., Indumathi

G., Kogila N. (2010),‖ Impact of

Dividend Announcement on Share Price

: An Evaluation Study‖, Indian Journal

of Finance, Vol.4, No.4, pp.3-16.

15. Venkates CK., Dr.Madhu Tyag.i,

Dr.Ganesh L (2012), ―Fundamental

Analysis and Stock Returns: An Indian

Evidence‖, Global Advanced Research

Journal of Economics, Accounting and

Finance, Vol. 1(2) pp. 33-39.

50

Opportunities And Challenges For The Indian Banking

Industry – The Next Best Foot Forward

Prin. Dr. C.P. Rodrigues

Vidya Bhavan College of Commerce

ISBN: 978-93-81791-28-8

ABSTRACT

This paper studies the opportunities and challenges faced by the Indian banking industry in the

coming years. It presents the arguments for viewing the business model and business model innovation

as the best way forward for banking industry. The paper limits the scope to Financial Inclusion and

digital revolution as a vehicle.

The research question is ―How will the Indian banking sector meet the challenges of the digital

revolution and Financial Inclusion and those posed by the impending addition of new players?‖

The keywords are business model innovation, financial inclusion, and digital revolution.

Literature review gives an insight to the business model innovation process. This paper has

analysed multiple-source documentary quantitative and qualitative secondary data. This paper,

requiring national and international comparisons, secondary provides the main source to answer the

research question(s) and to address the paper‘s objectives.

Secondary data analysis establishes that the prospects for Indian banking are great with the Indian

banking sector is relatively underpenetrated and mobile banking presents one very effective model for

Financial inclusion.

KEYWORDS

Business model innovation, financial inclusion, and digital revolution.

INTRODUCTION

With the Indian banking sector at an

inflexion point in 2013, a CII-KPMG Report

(2013) notes that the banking sector must live

up to the challenges, particularly in view of the

government‘s ambitious financial inclusion

plans and its decision to spend substantially on

infrastructure building (India Infoline,

September 2013). There is a conducive policy

environment and a conducive technology

environment – mobile telephony and the

internet.

As economic growth has taken off, the

demand for a bank account has become much

51

more pervasive across India's income groups

and communities (Shri Nandan Nilekani, 2010).

Nilekani goes on to state that ―there is a need to

shift from a low-volume, high-cost model, to a

high volume, low cost model, where large

numbers of small transactions become

profitable to banks, mirroring the pattern of

growth in telecom‖.

No matter how banks undergo the

journey to sustainable competitive advantage,

or what business model banks choose to pursue,

they should start to re-rig their ships for success

today (Accenture, 2013).

Traditional banking is facing its steepest

challenge in over a generation. PWC (2011).

The commercial banks in India today

must think about how to innovate their business

models to differentiate themselves and create a

competitive advantage with the Indian banking

sector set to have some 26 new players by 2014

- Everyone, from the mighty whales to the

financial minnows of India Inc., would like to

be a banker. Whether it is the pull effect of a

new opportunity that beckons, or the push

effect of an existing business model that is

going nowhere, or a mix of both, India is awash

with entrepreneurs who seem to think that a

banking licence is a licence to print money

(Forbes India, August 2013).

The five components of the business

model – an organisation‘s value proposition,

market segment strategy, value chain

positioning, revenue generation model, and cost

structure – are unique for a particular

organisation and its operations. There is no

single formula for success. The objective of

this paper is to initiate further debate and

discussion on some of the issues facing the

Indian banking industry in the near future.

The increase in importance of the

business model approach is particularly

connected to the considerable changes in

conditions of competition in the last two

decades. Increasing globalisation, fundamental

deregulation of the entire market range, faster

innovation cycles or a high degree of economic

integration have made the markets more

dynamic, more competitive and above all, more

complex.

RESEARCH QUESTION

How will the Indian banking sector

meet the challenges of the digital revolution

and Financial Inclusion and those posed by the

impending addition of new players?

METHODOLOGY

This paper has analysed multiple-source

documentary quantitative and qualitative

secondary data – including survey based data -

in order to understand the challenges faced by

the Indian banking industry and the road ahead.

This paper, requiring national and international

comparisons, secondary provides the main

source to answer the research question and to

address the paper‘s objectives. The secondary

data used in this paper satisfy one of the most

important criteria for the suitability of any data

set - measurement validity (Saunders et al,

2007).

The principal basis for the methodology

is derived from papers, surveys, reports and

media articles. The sources are PWC, World

Bank/IMF reports, IBEF, RBI, BCG, EIU,

KPMG, CII and IBM for example.

52

LITERATURE REVIEW

Relevance and Concept of Business Model

innovation

The greater frequency of disruption and

dislocation in many industries is shortening

business model lifecycles, requiring businesses

to bolster and accelerate innovation. BMI offers

a fresh way to think about renewing

competitive advantage and reigniting growth in

today‘s challenging environment.

Innovation in a business model is more

than mere product, service, or technological

innovation. It goes beyond single-function

strategies. Innovation becomes BMI when two

or more elements of a business model are

reinvented to deliver value in a new way (BCG,

2009).

The managerial challenge

Unprecedented challenges face the 21st

century. Technological advances and social

developments, together with a high level of

interconnectedness due to globalization and the

rise of the Internet are dramatically changing

the world‘s dynamics. Change is happening

faster, is more complex, and occurs on a more

profound level. To gain sustainable competitive

advantage in such an environment, firms need

to go beyond developing new products or

services: they need to re-think and re-design

their entire business model (Vienna University

of Economics and Business, 2013).

Business Model Innovation matters

Global survey studies of CEOs reveal that they

consider business model innovation as

fundamental for their future business. A 2005

survey by the Economist Intelligence

Unit revealed that over 50% of executives

believe business model innovation will become

even more important for success than product

or service innovation.

To orchestrate greater levels of innovation,

businesses need to develop and manage a bold

innovation strategy that spans all three types of

innovation – products/services/markets,

operations and, most importantly, business

model innovation. An IBM study found that

Business model innovation had a much stronger

correlation with operating margin growth than

the other two types of innovation (see Figure

1). The study found that companies innovating

through strategic partnerships enjoyed the

highest operating margin growth. As one CEO

remarked, ―reducing the cost base through

cooperative models is important for any growth

strategy.‖

53

Figure 1: Operating margin growth in excess of competitive peers (IBM CEO Survey, 2006)

Nearly all of the CEOs interviewed

reported the need to adapt their business

models; more than two-thirds reported that

extensive changes were required. According to

this survey, some CEOs are already looking to

business model innovation to address

permanent shifts in their market landscapes.

WHAT IS BUSINESS MODEL

INNOVATION?

Vienna University of Economics and

Business (2013) states that while

prior research has produced rich knowledge on

antecedents, consequences and the nature of

various kinds of innovations such as

incremental and radical innovation (both

product and service), architectural innovation or

social innovation, there is considerable lack of

insight with respect to business model

innovation. Despite a large variety of

definitions on the term, researchers generally

agree on the following characteristics of

business model (innovation):

A business model describes the logic of

how a business creates, delivers value to users,

and converts payments received into profits.

According to Teece (2010), business models

“[…] outline the architecture of revenues,

costs, and profits associated with the business

enterprise delivering that value”. Furthermore,

business models define the structure of the

value chain required to create and distribute the

company‘s products and services (Chesbrough

and Rosenbloom, 2002). Thus, they also state

who performs which activities in the course of a

company‘s business processes.

A business models consists of four

interlocking elements (figure 2) that, taken

together, create and deliver value. These

elements are delivery of a new customer value

proposition, a new profit formula, new key

54

processes and new key resources (Amit and

Zott, 2001; Baden-Fuller and Morgan, 2010;

Johnson et al., 2008).

Figure 2: The Elements of a Successful Business Model (Johnson, et al 2008)

Every successful company already

operates according to an effective business

model. By systematically identifying all of its

constituent parts, executives can understand

how the model fulfils a potent value proposition

in a profitable way using certain key resources

and key processes. With that understanding,

they can then judge how well the same model

could be used to fulfil a radically different

CVP—and what they‘d need to do to construct

a new one, if need be, to capitalize on that

opportunity (Johnson et al, 2008).

Business model innovation is game

changing for an entire industry. It has the

potential to reshape markets and industries

(Bonaccorsi et al., 2006; DiMaggio and Powell,

1983).

Business model innovation is especially

challenging for established firms which cannot

afford to make any mistakes in redesigning

their business models due to potential negative

effects on their existing business (Amit and

Zott, 2001;Chesbrough, 2010).

Massa and Tucci report that several

scholars agree that the Internet, together with

related advances in information and

communication technologies (ICTs), acted as

catalysis for BM experimentation and

innovation (e.g., Timmers, 1998, Amit & Zott,

2001, Afuah & Tucci, 2001), opening up new

opportunities for organizing business activities.

Casadesus-Masanell and Ricart (2010)

have observed that two phenomena have been

accompanied by considerable innovation in the

way firms ‗do business‘. These are: (1) the

advent of post-industrial technologies (Perkman

& Spicer, 2010), and (2) efforts by the

corporate sector to enter new markets in

55

developing or underdeveloped countries and

reach customers at the Bottom of the Pyramid

(BoP) – the unbanked and under-banked sector

in India, for example - (Prahalad & Hart, 2002).

A third one, related to BoP, is represented by

‗sustainability‘.

Opportunities to address economic

needs at the BoP in emerging markets, such as

India, have also pointed researchers and

practitioners toward the systematic study of

BMs. The core argument in the BoP literature is

that the vast, untapped market of the world‘s

poor represents a large opportunity for

companies to both serve customers and make a

profit. However, business opportunities at the

BoP challenge conventional ways Chesbrough,

Ahern, Finn, & Guerraz, (2006) highlight that

while the ‗right‘ product design is a necessary

condition for penetrating low income markets,

those companies that ultimately succeed in

generating commercially sustainable operations

are those that put in place the right BM. These

BMs play a crucial role in creating key

elements, such as distribution channels,

supplies and sales channels necessary for the

successful execution of business transactions.

Thus, enterprises that aim at reaching the BoP

constitute an important source of BM

innovation of doing business.

The business model has to be managed

and developed. A good business model begins

with an insight into human motivations and

ends in a rich stream of profits. A good

business model remains essential to every

successful organisation whether it is a new

venture or established player. A good business

model answers Peter Drucker‘s age-old

questions: Who is the customer? And, what

does the customer value? It also answers the

fundamental questions every manager must ask:

How do we make money, in this business?

What is the underlying economic logic that

explains how we can deliver value to customers

at an appropriate cost? (Magretta, 2002).

56

SECONDARY DATA ANALYSIS

According to a report by PWC (2007), India is likely to emerge as the third largest domestic

banking market in the world by 2040 and could grow faster than China in the long run.

Figure 3: Size of the banking sector in 2004 (PWC 2007)

Figure 4: The rise of the Asian giants (PWC 2007)

57

Indian banking sector is still relatively

small in global terms, as Figure 3 shows. India

could also rise from relatively low levels today

to having the third largest banking sector in the

world after around 2049 (Figure 4).

Figure 5: Banking return on assets ratios (PWC 2007)

Post-tax returns on assets are averaging

around 1% globally but with considerable

variations by country, with Indian banks

performing better than the banks in the

developed markets as indicated in Figure 5.

Therefore, India is attractive destination for

foreign banks.

58

Figure 6: Indian banking sector is projected to grow at a very healthy rate to 2025 (IBEF 2013)

Figure 7: Key trends and prospects for India and China (PWC 2007)

The analysis in the figures 3 to 7 above

reinforces the significance of China, India and

the other E7 markets as by far the greatest

potential growth areas in global banking in

coming decades.

59

Figure 8: Loan/GDP vs. GDP per-capita in select countries (IBEF 2013)

Despite healthy growth over the past

few years, the Indian banking sector is

relatively underpenetrated (figure 8). Loans-to-

GDP ratio is low (62 per cent) relative to many

of its emerging markets peers as well as

developed economies such as the US and UK.

Low banking penetration indicates huge latent

demand.

Figure 9: Deposit accounts per 1,000 adults (IBEF 2013)

Limited banking penetration in India is

also evident from low branch per 100,000

adults ratio. Branch per 100,000 adults in India

stands at 747 compared to 1,065 for Brazil and

2,063 for Malaysia (figure 9). Bank deposit

accounts per 1000 adults in India stands at

953.1 compared to 1,032.7 in Brazil and

1,642.2 in Malaysia.

60

Figure 10: Rising Rural Income Pushing Up Demand for Banking (IBEF 2013)

The real annual disposable household

income in rural India is forecast to grow at

CAGR of 3.6 per cent over the next 15 years.

The Indian agriculture, forestry & fishing sector

has grown at a fast pace, clocking a CAGR of

14.2 per cent over the past seven years. Rising

incomes are expected to enhance the need for

banking services in rural areas and therefore

drive the growth of the sector (figure 10).

Agriculture requires timely credit to

enable smooth functioning. However, only one-

eighth of farm households avail bank credit.

Local money-lending practices involve interest

rates well above 30 per cent, therefore making

bank credit a compelling alternative.

Figure 11: Soaring rural tele-density opens avenue of mobile banking (IBEF 2013)

Tele-density in rural India soared to

nearly 40.8 per cent in February 2013 from less

than 1 per cent in 2007 (figure 11). Banks,

telecom providers and RBI are making efforts

to make inroads into the un-banked rural India

through mobile banking solutions. In India, 36

61

per cent of the people earning less than Rs.

5,000 a month (about £75) do not have a bank

account. But they own a mobile phone. This

creates huge potential for mobile banking

(HSBC, 2010).

EVOLUTION OF MOBILE BANKING

The growth of mobile has significant

implications for banks. As mobile phones get

equipped with more and better functions, it will

transform the traditional interaction model with

the consumer. Well-appointed branches and

slick websites will no longer be enough, as

customers expect services on the move.

Location-based offers, timely and relevant

content and interactive applications will form

the basis of the mobile customer‘s engagement

with their banks.

BANKING PENETRATION IS LOW

IN RURAL INDIA BUT PICKING PACE

(IBEF, 2013):

Of the 600,000 village

habitations in India only 5 per cent have a

commercial bank branch

Only 40 per cent of the adult

population has bank accounts

Debit card holders constitute

only 13 per cent of the population and only

2 per cent have a credit card

51.4 per cent of nearly 89.3

million farm households do not have access

to any credit either from institutional or

non-institutional sources

Only 13 per cent of farm

households are availing loans from the

banks in the income bracket of < USD1000

Figure 12: India Demographics Profile 2013 (Index Mundi, 2013)

Series1, 0-14 years, 28.90%

Series1, 15-24 years, 18.20%

Series1, 25-54 years, 40.40%

Series1, 55-64 years, 6.90%

Series1, 65 years and over,

5.60%

India Demographic Profile 2013

62

GENERATION Y IS THE IMPORTANT

SOURCE OF FUTURE VALUE

According to a PWC report, to grow

revenues and combat high customer inertia,

banks need to focus on attracting the next

generation of customers – which will be largely

made up of Generation Y 15 to 35 year olds)

and the unbanked population. For these

customers, a bank‘s digital services will be

more central to their decision-making process

than branch location or even brand.

Generation Y is now choosing their

main banking provider and represents an

important source of future value for banks

(figure 12). Banks need to take their digital

products to the next level if they want to secure

these customers as they expect a rich digital

experience that is both mobile and social and

integrates their banking needs with their digital

lives. If banks are too slow off the mark, they

risk being overtaken by new entrants or non-

traditional financial services providers, who

already place digital at the heart of their

offerings, the report added.

The banks that provide a differentiated

digital experience, with advice and relationship

management elements tailored to the individual

customer, will secure deeper engagement and

more profitable relationships with their

customers.

Despite many challenges, there are

promising signs that the poor can profitably be

offered savings and payments services in great

numbers. Perhaps most promising are the

developments in branchless banking—the use

of innovative technologies (such as smart cards

and mobile phones), coupled with the use of

nonbank agents, to provide banking services to

areas previously difficult to serve profitably

(CGAP 2009).

Bringing financial services to rural

clients is the biggest challenge in the quest for

broad-based financial inclusion (figure 13).

Often the main barrier to financial inclusion in

rural areas is the great distances that rural

residents must travel to reach a bank branch.

Poor infrastructure and telecommunications,

and heavy branch regulation, also restrict the

geographical expansion of bank branch

networks (CGAP 2009).

63

Figure 13: Developing countries have narrower outreach (CGAP 2009)

64

Figure 14: The emerging challenge to the banking ecosystem

‗Defenders‘ (figure 14) are market

incumbents that have traditionally controlled

their own segments in the banking value chain.

While almost all of them aspire to move into

the digital innovator space, few are equipped to

do so without external help (through acquisition

or partnerships).

‗Attackers‘ are new entrants who are

trying to wrest share away from the incumbents

by intermediating themselves into the value

chain. These include established players in

technology and mobile as well as smaller and

more nimble start-ups. PWC (2011) believe that

while these players may be able to secure

positions on the value chain, they will be

unlikely to displace banks as the primary

provider of financial services.

PWC state that incumbents in emerging

markets – India for example - that have a large

share of unbanked or under-banked consumers

are likely to experience a greater threat from

new players. Here too, a strategic partnership

between a bank and an innovator has the best

chance of creating the winning combination to

acquire and retain new customers, assuming

banks act. However, PWC acknowledge that a

game-changing innovation by a pure play

provider (e.g. in growing or emerging areas

65

such as mobile payments or digital wallets)

may also prove successful, especially if banks

fail to act.

A Forbes India article on 8 October

2013 states that Aadhaar (figure 15) - the

world‘s largest and most audacious government

ID project - is easily the most transformative

project modern India has seen. Visa‘s Uttam

Nayak, a 17-year veteran of financial payment

services, says, ―If 600 million Aadhaar holders

get bank accounts, India can leapfrog from a

banking penetration of 24 percent to the 75

percent mark common in developed countries

like the US. Simultaneously, we can go from 3

percent ‗electronification‘ [percentage of

accounts where electronic transactions take

place] to 40–45 percent. That is unprecedented

in the world.‖

Figure 15: Aadhaar has numerous applications that will help the Indian Ecosystem (Forbes

India, October 2013)

THE EKO MODEL

The challenges of addressing financial

inclusion continue to fire up the entrepreneurs

in India. One such innovative model aiming at

financial inclusion is being run by Eko

Financial Services India.

The basic challenges of ‗financial

inclusion‘ or ‗providing banking services to the

poor‘ are that the amounts and transactions

involved in the segment are very small in value.

The operational structure prevalent in major

banks is not designed to cater to these segments

at such low costs. Often migrant labour face

66

problem of lack of access to banking services.

For example, labourers working in one state

might want to send back money to their home

in another state. First, the sum involved is

small, so normal banks cant process it.

Secondly, these people do not have the official

records as required by the banks in order to

open a bank account. Eko‘s business model

(figure 16) is addressing such gaps.

Figure 16: Eko‘s business model

In order to keep its cost low, Eko has

tapped the neighbourhood retailers, more

widely known as ‗Kirana Stores‘ in India as the

business correspondents.

LIMITATIONS OF THE STUDY

This paper has limited itself to Financial

Inclusion and Digital Revolution, that too

scratching the surface only. The Indian banking

industry has many exciting opportunities for

growth and some very daunting challenges that

will need another platform for discussion.

CONCLUSION

The secondary data analysis

demonstrates that while there is immense

potential for business expansion in the Indian

banking industry, the magic formula has evaded

the incumbent banks.

67

This is perhaps because the industry

players have not innovated their business

models to keep pace with the ever-changing

market place.

A BUSINESS MODEL STARTING FROM

A CLEAN SLATE

The business model to profitably serve

excluded customers will be significantly

different from a conventional bank model. It

needs to be created from a clean slate to prevent

existing models from influencing the design.

Also, the model will need to be ring–fenced for

it to stay true to the underlying business

imperatives (BCG, 2010).

A large segment of customers just above

the bottom of the pyramid is excluded from

formal financial services. They could be served

profitably with an innovative low cost business

model. This segment, with annual household

incomes in the range of Rs. 60,000–180,000 is

termed ―The Next Billion‖ segment. The

business models to serve customers at the

bottom of the pyramid will require state

subsidies and support. Figure 17 below captures

the imperatives.

Figure 17: ―No frilling‖ of conventional models not sufficient — Banks need to create a

business model from a clean slate (BCG 2010)

The banking sector is the barometer for

the economy at large. For an emerging

economy, where credit dispersion is often a

challenge, commercial banks act as the bulwark

for this. India therefore needs strong banks

which are well capitalised, with innovative

business models supplying products and

services to a diverse set of customers. In

today‘s increasingly digitised world, banks

need business strategies built on a scalable IT

platform and manage cost structures well.

Banks have to identify the most relevant

stakeholders (including telcos, banking

correspondents, independent financial advisors

and any supply chains). An appreciation of their

interconnectivity will help connect the dots.

Which banks are able to see through all of this,

identify new frontiers of growth, and contribute

68

more substantially to the economy remains to

be seen.

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Models & Strategies Text & Cases,

Irwin/McGraw-Hill, 2001

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E-Business, Strategic. Mgmt. J., 22: 493–

520

4) Baden-Fuller C and Morgan M 2010,

Business Models as Models, Long range

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2020, Making the Decade‘s Promise Come

True

6) Bonaccorsi A, Rossi C, Giannangeli S

2006, Entry Strategies Under Competing

Standards: Hybrid Business Models in the

Open Source Software Industry

7) Boston Consulting Group, 2009, Business

Model Innovation, When the game gets

tough, change the game.

8) Casadesus-Masanell R and Ricart J 2009,

From Strategy to Business Models and to

Tactics, Harvard Business School

9) Chesbrough and Rosenbloom 2002, The

Role of the Business Model in Capturing

Value from Innovation: Evidence from

Xerox Corporation‘s Technology Spinoff

Companies, Harvard Business School

10) Chesbrough H 2010, Business Model

Innovation - Opportunities and Barriers,

Long Range Planning 43 (2010) 354-363

11) Chesbrough H, Ahern S, Finn M and

Guerraz S 2006, Business Models for

Technology in the Developing World: The

Role of Nongovernmental Organizations,

California Management Review, Vol 48 No

3, Spring 2006

12) CII-KPMG Report, Banking sector must

live up to the challenges

http://www.indiainfoline.com/Markets/New

s/Banking-sector-must-live-up-to-the-

challenges-CII-KPMG-Report/5778427655

13) DiMaggio P and Powell W, 1983, The Iron

Cage Revisited, American Sociological

Review, 1983, 147-160

14) Economist Intelligence Unit 2005, Business

2010: Financial services - Embracing the

challenge of change

15) Forbes India 2013, How Nandan Nilekani

Took Aadhaar Past The Tipping Point

16) Forbes India 2013, Why India's Corporate

Bigwigs Want to be Bankers,

http://forbesindia.com/article/the-new-

bankers/why-indias-corpo-rate-bigwigs-

want-to-be-

bankers/35755/1#ixzz2nOxgv2BK

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Face of World Business

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Horizon – The Global CEO Study 2006

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http://www.indexmundi.com/india/demogra

phics_profile.html

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Matter, Harvard Business Review 2000

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Emerging strategies

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Dodgson, David M. Gann, and Nelson

Phillips, The Oxford Handbook of

Innovation Management (forthcoming

publication)

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Thornhill 2007, Research Methods for

Business Students, 4th

Edition, Pearson

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70

The Study Of Customer Attitude In Banking And NBFCs

In Nanded district

Dr. Gajanan P. Mudholkar

Assistant Professor, School of Commerce and Management Sciences, SRTM University, Nanded

ISBN: 978-93-81791-28-8

ABSTRACT

The Customer attitude is the most essential part to be considered in Marketing of Financial

Services. The marketing strategies of banks and non-banking financial companies can be better

understood with the assistance of customer attitude. In this research paper, researcher made an attempt

to study the Customer Attitude in Banking and NBFCs in Nanded district. For this research, researcher

has taken the sample size of 186 customers, 35 managers and 70 employees of banks and NBFCs resp.

with the help of tabulation, test of homogeneity and ANOVA, Researcher studied the Customer attitude

of Banks and NBFCs in Nanded district. The findings, suggestions and conclusions are drawn at the

end of research paper.

KEYWORDS

Customer Attitude, Bank Marketing and NBFCs.

INTRODUCTION

Financial services are about money, and

money carries a lot of psychological baggage.

People‘s attitudes toward money are highly

emotional. This may matter less at the

institutional level, but for the consumer

marketer, hitting the right emotional notes can

be critical. One financial institution, for

example, developed a typology that classified

attitudes and behaviours toward financial

matters

Demographic, geographic, and purchase

variables are relatively easy to find and use, but

they have limitations. Take, as an example, two

30-year-old men with similar incomes and

education. Both are married and childless, but

one has $100,000 in investable assets, and the

other has no savings. What variable explains

this difference in behaviour?

Attitudes and behaviours are much more

difficult to observe and measure than

demographics, but they can offer more insight

into what customers actually buy and why. And

by analysing why customers have bought in the

past, it is possible to project who would be

most likely to buy in the future

Lifestyle segmentation operates on the

principle that ―birds of a feather flock

71

together.‖ Similarities of interests, attitudes,

and activities are common among people who

live in the same neighbourhood—for example,

suburban soccer moms often read the same

magazines, shop in the same stores, and share

political and social viewpoints with their

neighbours. The tools that are used to group

customers and prospects into attitude and

behavioural segments include cross-tabulation

analysis, data mining, predictive modeling,

cluster analysis, and other statistical techniques.

The resulting variables have many names,

including psychographics, behavioural models,

values-based analysis, and lifestyle analysis.

OBJECTIVE

1) To analyse the Customer attitude of

Banking and Non-Banking Financial

Companies in Nanded district.

2) To understand the overall scenario of

Banking and NBFCs in Nanded District.

HYPOTHESIS

The hypothesis for the research is as

follows:

Null Hypothesis Ho:-The attitude of

customers towards banks marketing is not

significantly different than NBFC in Nanded

District.

Alternative Hypothesis Ha:-The

attitude of customers towards banks marketing

is significantly different than NBFC in Nanded

District.

RESEARCH METHODOLOGY

This research methodology deals with

sample size and research design

i. Determination of sample Size

Using Formulas to Calculate a Sample

Size although tables can provide a

useful guide for determining the sample

size, you may need to calculate the

necessary sample size for a different

combination of levels of precision,

confidence, and variability. The fourth

approach to determining sample size is

the application of one of several

formulas. Formula For Calculating A

Sample For Proportions. For

populations that are large, Cochran

(1963:75) developed the Equation 1 to

yield a representative sample for

N0= Z2pq

e2

ii. Which is valid where n0 is the sample

size, Z2 is the abscissa of the normal

curve that cuts off an area α at the tails

(1 – α equals the desired confidence

level, e.g., 95%)1, e is the desired level

of precision, p is the estimated

proportion of an attribute that is present

in the population, and q is 1-p. The

value for Z is found in statistical tables

which contain the area under the normal

curve.

iii. To illustrate, suppose we wish to

evaluate a state-wide Extension program

in which farmers were encouraged to

adopt a new practice. Assume there is a

large population but that we do not

know the variability in the proportion

that will adopt the practice; therefore,

assume p=.5 (maximum variability).

Furthermore, suppose we desire a 95%

confidence level and ±5% precision.

The resulting sample size is

demonstrated below.

72

N0= Z2pq

e2

= (1.96)2 (.5) (.5)/(.05)

2

= 385 Respondents

RESEARCH DESIGN

Sr.No. Parameter Description

1 Type of Research Ex Post Facto Descriptive Research

2 Nature of Research Quantitative

3 Research Instrument Structured questionnaire, observation and

interview

4 Dependent Variable Type of Financial Companies

5 Independent Variables 7Ps of Marketing, CRM, ServQual and Customer

Satisfaction

6 Control over Variables No Control- Ex Post Facto

7 Survey Period November 2010 to December 2012

8 Type of Products Financial Products

9 Methods of Data

Collection

Sample Survey Method through Interrogation

10 Universe Nanded District Financial Companies

11 Population All organized financial service providers,

manager, employees and Customers Nanded

District

12 Sampling Frame Banking Companies and NBFCs equally

13 Sample Elements Customers, Managers and Employees

14 Sample Size

Determination

Using Mean and Proportionate Sampling

Formula

15 Calculated Sample Size 386 Customers,70 Managers and 140 Employees

16 Net Responses 376 Customers, 67 Managers and 136 Employees

17 Response Rate 97.40% for Customers, 95.71 % for Managers

and 97.14% for Employees

18 Rejection Rate 2.60% for Customers, 4.29 % for Managers and

2.86% for Employees

73

19 Sampling Method Multilevel Non Probability Convenient Sampling

and Proportionate Stratified Sampling

20 Sources of Data

Collection

Primary and Secondary sources

21 Primary Sources Structured questionnaire, observation, interview

and field survey

22 Secondary sources Journals, Articles, Magazines, Digital library, e

resource database ebsco, pro-quest, open j gate,

emerald, science-direct, Harvard Business

Review case study, articles and and many other

published data

23 Measurement Scales

used

Nominal, ordinal and interval scale

24 Questions Types Dichotomous, open ended, multiple responses,

ranking and differential scales

25 Rating Scales Used Likert Scale

26 Data Interpretation Through graphs, descriptive statistics and

inferential statistics

27 Statistical Tools Z test, chi square, ANOVA, factor analysis and

multiple regression and descriptive statistical

tools and parametric and non parametric

statistical tests

28 Statistical Software

Package

Ms Excel 2010 and SPSS 20

DATA ANALYSIS AND INTERPRETATION

The cross tabulation of customers‘ attitude towards marketing practices adopted by banks and

NBFCs are as follows

Table Customers‟ Attitude

Positive Customer Attitude

Total Strongly

Disagree Disagree Neutral Agree

Strongly

Agree

Bank Customers 17 24 13 84 49 187

74

NBFC Customers 39 91 17 26 16 189

Bank Managers 2 4 5 11 11 33

NBFC Managers 11 15 3 4 1 34

Bank Employees 5 9 6 33 16 69

NBFC Employees 23 31 5 7 2 68

Total 97 174 49 165 95 580

Bank Customers 9.1% 12.8% 7.0% 44.9% 26.2% 100.0%

NBFC Customers 20.6% 48.1% 9.0% 13.8% 8.5% 100.0%

Bank Managers 6.1% 12.1% 15.2% 33.3% 33.3% 100.0%

NBFC Managers 32.4% 44.1% 8.8% 11.8% 2.9% 100.0%

Bank Employees 7.2% 13.0% 8.7% 47.8% 23.2% 100.0%

NBFC Employees 33.8% 45.6% 7.4% 10.3% 2.9% 100.0%

Total 16.7% 30.0% 8.4% 28.4% 16.4% 100.0%

Source: Field Survey and SPSS output

Graph Customers‟ Attitude

75

From the above table no. 6.116 and

graph 6.10, it is clear that the 44.9% bank

customers agree that they have positive attitude

towards bank marketing practices followed by

strongly agree response of 26.2% bank

customers. In the case of 48.1% NBFC

customers, they disagree about their attitude

towards NBFC marketing practices. In the case

of 66.6% bank managers agree and strongly

agree that they have positive attitude towards

bank marketing practices and 76.5% NBFC

managers disagree and strongly disagree that

the NBFC customers have positive customer

attitude.71% bank employees agree that the

customers have positive attitude toward

marketing practices adopted by them where as

79.4% NBFC employees disagree and strongly

disagree that their customers have positive

attitude towards marketing practices.

From the above cross tabulation, it is

observed that the banks‘ customers, managers

and employees opinion that their customers

have positive attitude towards the marketing

practices adopted by them where as NBFCs‘

customers, managers and employees opinion is

that their customers have negative attitude

towards the marketing practices adopted by

them.

The following table assists us to the

equality of variances as

Table test of Homogeneity of variances

Customer Attitude

Levene

Statistic df1 df2 Sig.

1.994 5 574 .078

As calculated significance value 0.078

is greater than the standard significance value

0.05, hence the null hypothesis for the same

(Variances are equal) is failed to reject. It

means that the variances are equal. Hence it is

recommended to use F test (ANOVA) to verify

the null hypothesis as below

Table ANOVA

Customer Attitude

Sum of

Squares Df

Mean

Square F Sig.

Between

Groups 289.053 5 57.811 40.584 .000

Within Groups 817.655 574 1.424

Total 1106.709 579

76

Source: Field Survey and SPSS output

From the above table, it is observed that

the value of F test at degree of freedom 5, 574

is 40.584 and the calculated significance value

is 0.000 less than the standard significance

value 0.05, hence the null hypothesis is

rejected. Hence the attitude of customers

towards banks marketing is significantly

different than NBFC in Nanded District.

FINDINGS

The findings of the research work is as

follows:

It is found from the table no. 6.116 and

graph 6.10, it is clear that the 44.9% bank

customers agree that they have positive attitude

towards bank marketing practices followed by

strongly agree response of 26.2% bank

customers. In the case of 48.1% NBFC

customers, they disagree about their attitude

towards NBFC marketing practices. In the case

of 66.6% bank managers agree and strongly

agree that they have positive attitude towards

bank marketing practices and 76.5% NBFC

managers disagree and strongly disagree that

the NBFC customers have positive customer

attitude.71% bank employees agree that the

customers have positive attitude toward

marketing practices adopted by them where as

79.4% NBFC employees disagree and strongly

disagree that their customers have positive

attitude towards marketing practices.

CONCLUSION

The customers‘ attitude towards bank or

NBFC marketing is analysed and it is

concluded that from the above table no. 6.118,

it is observed that the value of F test at degree

of freedom 5, 574 is 40.584 and the calculated

significance value is 0.000 less than the

standard significance value 0.05, hence the null

hypothesis is rejected. Hence the attitude of

customers towards banks marketing is

significantly different than NBFC in Nanded

District. The bank customers‘ attitude is

positive as compared to NBFC customers‘

attitude.

SUGGESTIONS

i. It is suggested that both banks and NBFCs

should increase the number of facilities so

as to increase the customer attitude.

ii. It is recommended that the banks and

NBFCs should provide fast services so as to

change the customer attitude.

iii. It is again recommended that the banks and

NBFCs should understand the customer‘s

requirements so as to change customer

attitude positively.

REFERENCES

1) Abernethy, A very M. and Daniel, D.,

Butler (1993), ―Promoting Customer

Contact people‖, Journal of Services

Marketing, Volume 7, November 1, pp. 4-

12

2) Andersen, P.H. (2001 ). 'Relationship

development and marketing

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Business India, 14 August, pp.91. Agarwal,

R.C. (1989), ―Factoring‖, The Economic

times, April 13, p. iii

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4) Andrew, Kenneth (1986), ―The Bank

Marketing, Handbook,‖ Woodhead-

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7) Batra, G.S. and Bhatia, B.S. (eds.) (1995).

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78

Rural Marketing: A Tactic And Current Trend For Rural

Development

Dr. P. Subramanyachary

Associate Professor, KKC Institute of PG Studies, Puttur, Chittoor District, Andhra Pradesh

ISBN: 978-93-81791-28-8

―Rural Marketing is no where sleeping, but we are‖-Azim Premji

ABSTRACT

Indian corporate sector is looking to rural marketing as saturation took place in urban areas. The

Indian rural market has a huge demand base and offers great opportunities to marketers. Rural

marketing management also helps to enhance living standard of rural people. This is right time to

encourage rural marketing activities to fulfil the need of the rural consumers by providing new products

to them for different purposes. Though it is unorganized marketing management, as huge potential of

consumer‘s corporate sector is looking to increase the activities of rural marketing. The basic essence

of rural marketing is to organize, develop and utilize the available at optimal level to proper utilization

and productivity of resources, in such a manner that the entire rural population may be benefited by it

and increase the production and consumption to increase Indian economy. Another important point is

the government has to give priority to the rural marketing activities in the programmes introduced for

the development of rural areas. So upgrading rural market is one way to improve access to marketing

opportunities. Since, India introduced economic reforms in the name of L.P.G. (Liberalization,

Privatization is and Globalization) has changed the face of Indian rural markets and still is on

developing transition period, due cut throat competition in urban markets, more market saturation and

negative demands. By taking the opportunity of developing rural markets, the standard of living of the

people and other development of the activities belonging to rural development can be implemented

well.

INTRODUCTION

Marketing plays a vital role in the

economic growth and overall development of a

nation. The major roles of marketing involved

in terms of specialization in activities of

comparative advantage, enhanced resource-use

efficiency and trade, advances in marketing

with economic growth. According to 2011

census 68.84% of population exists in Rural

India.742 million Indians constituting 138

million households reside in 6, 40,867 villages.

So the size of rural market is potential for

marketing activities. The current marketing

environment and economic scenario have

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brought the corporate under contemporary roofs

of modern India, which is challenging the

current standards of segmenting, targeting and

reaching the customers. In the past corporate

sector concentrated on towns only for profits.

Now the companies are looking for new

opportunities and avenues for further expansion

of marketing activities. In this situation

companies are focusing on Rural Marketing

which has large potential and updated due to

the communication revolution. For this is rural

youth who are educated, have access to

technology and have openness to change.

As economic development is going on

rapidly due to liberalization globalization and

privatization (LPG) rural markets have acquired

significance as substantial increase in the

purchasing power of the rural communities. A

survey by India's premier economic research

entity, National Council for Applied Economic

Research (NCAER) indicates that rise in rural

incomes is keeping pace with the rise in urban

incomes. The rural middle class is growing at

12 per cent, close to the urban middle class

which is growing at 13 percent.

DEFINITION AND CONCEPT

―Rural Marketing is defined as a

function that manages all activities involved in

assessing, stimulating and converting the

purchasing power of rural consumers into an

effective demand for specific products

&services and moving these products &

services to the people in rural areas to create

satisfaction and a better standard of living and

thereby achieving organizational goals‖

“Rural marketing involves the process

of developing, pricing, promoting, distributing

rural specific product and a service leading to

exchange between rural and urban market

which satisfies consumer demand and also

achieves organizational objectives”.

In the past, all marketing activities in

rural areas are not considered significantly. The

term ‗Rural marketing‘ was popularized

in1990s. The evaluation of Rural Marketing can

be briefly explained below.

Phase-1 (Before Mid-1960s)

Rural marketing refers to marketing of

rural products in rural and urban areas with

special reference to agricultural inputs and

products in markets. It was considered

synonymous to ―Agricultural marketing‖.

Agricultural products like food grains and

commercial crops inputs like cotton, oil seeds,

sugar cane etc. got the central place of

discussion during this period, for example

agricultural inputs like fertilizers, seeds and

pesticides and the markets for durables

machines like tractors, harvesters, pump sets,

oil engines and electric motors etc.

Phase-2 (Mid 1960s-Mid 1990s)

Green revolution brought scientific

farming practices and transferred many of the

poor villages into prosperous busy centres. As a

result, the demand for agricultural inputs has

grown up. Better irrigation facilities, soil

testing, use of high yield variety seeds,

fertilizers, and employment of machinery like

power tillers, harvesters, threshers etc. changed

the rural agrarian scenario.

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Phase-3 (After Mid-1990s)

What was not considered so for during

the two earlier phases was that of marketing of

house hold consumables and durables to the

rural markets. The reasons are that there were

no rural markets and the existing rural markets

for these products were not substantial-not large

enough to attract the attention of the urban

marketers and they were inaccessible. The

small villages/hamlets were widely scattered

making reach difficult and expensive.

NATURE OF RURAL MARKETING

Rural marketing is transactional or

developmental in its approach because, rural

markets have become an attractive proposition

for commercial business organizations. But it is

of delivering better standard of living and

quality of life to the rural environment taking

into consideration the prevailing rural scenario.

Innovation and adapting of upcoming changes

are essential to marketing management.

Innovative methods of social change for

successful transaction of traditional also true

that several parts of the rural area are still

undeveloped. The role of rural marketing as

such is more developmental than transactional.

RURAL MARKETING AND URBAN

MARKETING

Generally marketing products and

services for rural customers is completely

different from urban customers. The difference

arises because of the disparities in rural and

urban set ups and environment. There is a huge

untapped potential in the rural areas as more

population exists in rural areas. Hence

companies are focusing on Rural Marketing in

the recent decades. The disparities between

rural and urban customers are in the fields of

Income levels, Sources of income, Literacy

levels, Consumption pattern, Awareness levels,

Social indicators, Infrastructure levels, Road

connectivity, Psychology, Media habits and

thoughts on different issues. In spite of this

tough situation, the marketers are trying their

level best attract the rural customer. The

companies are designing a distinct Marketing

Mix variables to gain the attention of the rural

customers and they are showing variations in

the aspects of Physical products, Pricing, Place

(Distribution) and Promotions for Rural

consumers.

ATTRACTIVENESS OF RURAL

MARKETING

The rural marketing has large

population and customer potential compare to

urban areas, Raising prosperity in future,

Growth and change in consumption pattern,

Life-style changes, Life-cycle advantages,

Market growth rates is higher than urban etc.

Besides this, rural marketing is not expensive

and remoteness is no longer a problem.

Rural market has the following facts for

rural marketing; As per NCAER Report, having

688 million people in Rural India it is estimated

that annual size of the rural market totally 1,

23,000 crores. By sector wise FMCG Rs 75,000

Crore, Durables54%, Retail sector 40%, Agri-

inputs (incl. tractors) Rs 45,000 Crore, 2 /and/ 4

wheelers Rs 8,000 Crore, LIC sold 55 % of its

policies in rural India. More than two million

BSNL mobile connections, 50% in small

towns/villages and the six lakh villages, 5.22

lakh have a Village Public Telephone(VPT) 41

million Kisan Credit Cards issued with

cumulative credit of Rs 977 billion resulting in

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tremendous liquidity, regarding Investment in

formal savings instruments: 6.6 million in rural

and 6.7 million in urban.

In addition to this, Infrastructure is

improving rapidly, In 50 years only 40%

villages connected by road, in next 10 years

another 30%, More than 90 % villages

electrified, though only 44% rural homes have

electric connections. Rural telephone density

has gone up by 300% in the last 10 years; every

1000+ pop is connected by STD, Number of

―pucca‖ houses doubled from 22% to 41% and

―kuccha‖ houses halved (41%to 23%),

Percentage of BPL families declined from 46%

to 27%, Rural Literacy level improved from

36% to 59%, Low penetration rates in rural so

there are many marketing opportunities.

ROLE OF RURAL MARKETING

In recent years, rural markets have

acquired significance in countries like China

and India and other developing countries as the

overall growth of the economy has resulted into

substantial increase in the purchasing power

and change in consumption pattern of the rural

communities. On account of the green

revolution in India, the rural areas are

consuming a large quantity of industrial and

urban manufactured products. In this context, a

special marketing strategy, namely, rural

marketing has taken shape and has grown.

Sometimes, rural marketing is confused with

agricultural marketing. The agriculture

marketing denotes marketing of produce of the

rural areas to the urban consumers or industrial

consumers, whereas rural marketing involves

delivering.

LIMITATIONS OF RURAL MARKETING

Though Rural Marketing has potential

for marketing there are some limitations as

follows.

i. The literacy rate is only 58% but India

average of literacy is 74%. There are not

enough opportunities for education in

rural areas.

ii. Demand for goods in rural markets

depends upon agricultural situation and

monsoon, therefore, the demand or

buying capacity is not stable or regular as

income is irregular.

iii. Many rural areas are not connected by rail

transport. Kacha roads become

unserviceable during the monsoon and

interior villages get isolated. So

middlemen are getting profits.

iv. Another defect is lack of proper

distribution system. An effective

distribution system requires village-level

shopkeeper, wholesaler or preferred

dealer, distributor or stockiest at district

level and company-owned depot or

consignment distribution at state level.

The presence of too many tiers in the

distribution system increases the cost of

distribution.

v. Communication devices are low and not

proper such as telephone, fax etc. in rural

areas.

vi. Lifestyle in rural areas is still influenced

by customs and traditions. So people

cannot easily adapt new coming changes

and practices. They are also influenced by

different factors like religion, caste,

occupation, income, age, education and

politics etc.

vii. Rural consumers are cautious in buying

and decisions are slow and delayed due to

82

their growing environment and fear of

using.

viii. Formal media is low in rural households

and not understandable to the rural areas,

therefore specific measures for sales

promotion activities in rural areas to be

taken like participating in melas or fairs.

STRATEGIES OF RURAL MARKETING

Rural marketing involve some important

strategies as follows.

1) Client and Location specific promotion

involves a strategy designed to be suitable

to the location and the client for smooth

rural marketing.

2) Co-operative promotion strategy brings

participation between the marketing

channels and the client.

3) 'Bundling of inputs' denote a marketing

strategy that several related items are sold

to the target customers, including

arrangements of credit, after-sale service,

and so on.

4) Both traditional as well as the modern

media will be used as a marketing strategy.

5) Unique Selling Propositions (USP) involves

presenting a theme with the product to

attract the client to buy that particular

product.

6) Extension Services affect positively a

system of attending to the missing links.

7) Ethics in partnership and sustainability

business form is an important strategy for

rural marketing.

CUSTOMER PROFILE OF RURAL

MARKETING

A consumer profile is a way of

describing a consumer categorically that they

can be grouped for marketing and advertising

purposes and marketing strategies. Consumers

can be identified by many different preference,

lifestyle, life stage, attribute, and trait

categories. Thinking about consumers in terms

of the way they are represented by categorical

tiers can be useful. The first tier includes the

most common categories for describing

consumers, such as demographics,

socioeconomic status, and product usage. The

second tier extends the concepts of the first tier

and includes psychographics, generation,

geography, demographics, and benefits sought.

Market researchers may develop proprietary

consumer profiles or they may use panels of

consumers who have been classified according

to their common attributes. Market research

provider firms often make their consumer

profiles available for discrete market research

projects that are conducted for their market

research client‘s at large companies.

RURAL MARKETING TECHNIQUES

The American marketing association

defines market research as: ‗The systematic

gathering, recording and analysing of data

about problems related to marketing of goods

and services‘.

Reactive Approach

These organizations do not conduct

research, but follow what others do and see it as

a way to keep up with competition.

Proactive Approach

These organizations anticipate

developments in the market and introduce new

ideas and methods to exploit opportunities or to

minimize problems so as to get ahead of

competition.

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RURAL ADVERTISING

Any paid form of non-personal

presentation and promotion of goods, services,

ideas, and thoughts by an identified sponsor is

called advertising. The advertising should be

understandable to the rural customers and it

should get attention of customers.

One key distinction to make when

studying advertising is between general

advertising and direct response advertising.

General advertising does not attempt to achieve

an immediate measurable response. The

advertisement might be for a soft drink, say,

Coca Cola and show people enjoying a can of

the soft drink while having fun on the beach.

The person seeing the ad does not have to do

anything. Of course, the ultimate goal of the ad

is to get you to buy Coca Cola when you shop

for a soft drink. However, an immediate

response on the part of the person seeing the ad

is not expected. With a direct response

advertisement, the goal of the ad is to elicit a

direct response. This is the reason the ad must

have a device like usually a phone number to

call so that the prospect can do something after

viewing the advertisement. The advantage of

direct marketing is that there is a way of

knowing how effective the advertisement was

by simply counting how many people called

after seeing it. This is what is referred to as

measurable response. We can use the

measurable responses to compare different ads

for the product or different advertising media

like radio vs. television or even different

vehicles within the same medium e.g., two

different television programs or two radio

shows. Also, once people call in, we can

capture their names and addresses and use them

to build a database of customers or prospective

customers. In view of this proper

advertisements for rural marketing can be made

for the prosperity of rural marketing.

PRESENT SCENARIO

The concept of rural markets in India, as

also in several other countries, like China, is

still in evolving shape, and the sector poses a

variety of challenges, including understanding

the dynamics of the rural markets and strategies

to supply and satisfy the rural consumers. Rural

markets, as part of any economy, have

untapped potential. There are several

difficulties confronting the effort to fully

explore rural markets. For example Rural

Tourism in India is a country of rich culture and

heritage. With above 70% population residing

in around 6 million plus villages, real India has

its roots right inside this simplistic structure.

Rural Tourism in India takes you to a journey

of not so known – the land and people which is

the back bone of this country. It is a journey to

explore diversity and hospitality from nook and

corners of India. Rural tourism attempts to take

you away to a dream land full of peace,

simplicity and innocence.

EMERGING TRENDS IN RURAL

MARKETING

As technology advances in the field of

rural marketing new marketing devices are

coming like the following ways.

Online rural marketing

Rural people can use the two-way

communication through on – line service for

crop information, purchases of Agri-inputs,

consumer durable and sale of rural produce

online at reasonable price. Farm information

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online marketing can easily accessible in rural

areas because of spread of telecommunication

facilities all over India. Agricultural

information can get through the Internet if each

village has small information office.

Information through local agriculture input

dealers

Most of the dealers have direct touch

with the local farmers; these farmers need

awareness about pests, decease, fertilizers,

seeds, technology and recent developments. For

this information, farmers mostly depend on

local dealers. For development of rural farmers

the government may consider effective channel

and keep information at dealers, for farmer

education hang notice board and also train the

dealer recent changes and developments in

agriculture.

Cost benefits analysis

Cost benefit can be achieved through

development of information technology at the

doorsteps of villagers; most of the rural farmers

need price information of agri-produce and

inputs. If the information is available farmers

can take quick decision where to sell their

produce, if the price matches with local market

farmer no need to go near by the city and waste

of money & time it means farmers can enrich

their financial strength.

Need based production

Supply plays major role in price of the

rural produce, most of the farmers grow crops

in particular seasons not throughout the year, it

causes oversupply in the market and drastic

price cut in the agricultural produce. Now the

information technology has been improving if

the rural people enable to access the rural

communication, farmers awareness can be

created about crops and forecasting of future

demand, market taste. Farmers can equates their

produce to demand and supply, they can create

farmers driven market rather than supply driven

market. If the need based production system

developed not only prices but also storage cost

can be saved. It is possible now a days the

concept of global village.

Market driven extension

Agricultural extension is continuously

going through renewal process where the focus

includes a whole range of dimensions varying

from institutional arrangements, privatization,

decentralization, partnership, efficiency and

participation. The most important change that

influences the extension system is market

forces. There is a need for the present extension

system to think of the market driven approach,

which would cater the demands of farmers.

Processing industry

India is the second largest producer of

fruits and vegetables in the world with an

annual production of more than 110 million

tonnes of fruit and vegetable only 1.3 percent of

the output is processed by the organized sector

commercially, the reason higher consumption

in fresh form. However, as the packaging,

transportation and processing capacities

increase, the market for processed fruits and

vegetables is projected to grow at the rate of

about 20 % per annum. 100 % export oriented

units (EOU) and Joint venture units required

improving the processing industry.

85

Apana mandi / kisan mandi / rythubazaar

There is a need to promote direct

agricultural marketing model through retail

outlets of farmer's co-operatives in urban areas.

The direct link between producers and

consumers would work in two ways: one, by

enabling farmers to take advantage of the high

price and secondly, by putting downward

pressure on the retail prices.

Rural agri- export

Rural produce, raw fruits and vegetable,

processing goods, have the potential market in

Asian, Europe and western countries.

Particularly soudhy countries have

commendable potential for Indian rural

produce.

There has been a huge growth in

Internet advertising. According to Business

Week, the Internet now accounts for 14% of the

media time of Americans. Advertisers are very

excited about an advertising medium that has a

built-in tool to measure the effectiveness of the

ad Television ratings, on the other

hand, measure how many individuals watch a

particular program but many of the viewers do

not actually see the commercial.

CONCLUSION

The essence of rural marketing is to

organize, develop and utilize the available at

optimal level to proper utilization and

productivity of resources in rural areas and

increase the activities of rural marketing to

provide the standard goods to the rural

consumers. As a significance GNP is

generating from rural areas, corporate sector

has to take advantage from the introduction of

rural marketing. Then it is one of the best ways

for the rural development.

REFERENCES

1) Philip Kotler and Kevin lane keller, Global

Edition 2011

2) Bijapurkar & Rajesh Shukla ‗Spotlight on

rural consumers‘, December 3, 2008

3) Livemint.com

4) GOPAL SWAMY T P, Rural Marketing,

Wheeler publishings (New Delhi) 1998

5) AMBEKAR YADAV J B (1992),

Communication and Rural Development,

Mittal Publications (New Delhi). 1992.

6) Chandwani, and Sanjay. ‗Marketing To

Rural Consumers‘, Vision, Apr-Jun 2009,

Vol. 13 Issue 2

7) Kotler and Gerald Zaltman, ―Social

Marketing: An Approach to Planned Social

Change,‖ Journal of Marketing

8) NCAER Report 2011

9) www.rmai.in

10) ruralmarketing.org

86

Paradigm Shift In Management Practices In India

Dr. Shubhra Aanand

&

Raghvendra Bhat

ISBN: 978-93-81791-28-8

“If everything comes to your way you are travelling in the wrong side of highway” when

things are becoming more complex we are living in the paradigm shift.

INTRODUCTION

Management defined as ―the

organization and coordination of the activities

of an enterprise in accordance with certain

policies and in achievement of clearly defined

objectives‖. Fredmund Malik defines

―Management is the transformation of

resources into utility‖. Peter Drucker (1909–

2005) sees the basic task of a management as

twofold: marketing and innovation.

Management practices are considered as

science and subject itself is a part of social

sciences, it means the management practices

are designed in scientific manner and its

implementation has to be in accordance to

practices adopted in social sciences.

The development of management

concepts in western countries was evolutionary

in nature. Management practices has evolved in

response to the changing needs of society based

on changing value system due to political,

economic, social, technological and cultural

factors. Ancient India had its own management

practices, but post-independence management

concepts have borrowed from western world.

The rich heritage of Indian culture can

be trailed back from an ancient time. The

practices beliefs, traditions and customs which

we are following today were established

thousands of years back. The root of Indian

culture has existed since ancient times and has

been polished and modernized over the ages,

what we see today is urbane version of what

existed thousands of years back. In ancient

India culture was the determining factor of the

broad generation that is known as pluralistic

society where all religions receive equal

participation and respect. India is the birth place

of Hinduism, Buddhism, Jainism and Sikhism

collective known as Indian religion. When we

decide the Indian population in two ethnic

groups (Indo–Aryans and Dravidians) are found

80% of population is Hindu, Islamic practiced

by 13%, 2.3% Christians and 2% sukkahs.

Though different beliefs were followed in

different religions, the foundation base of

ancient Indian culture remains the same. The

management practices followed in India was

largely based on this cultural background.

In the war of independence, we had lost

our social structure and the cultural groups and

87

not evolved our own concepts of management

practices, keeping the Indian scenario in view.

The process of transformation from traditional

society to modern society was so rapid that we

found it convenient to transfer management

technology from western world, trusting that

management practices are scientific technology.

As a result of these grafting processes of

management, we have created more confusion

in management thinking.

The 21st century is formidable century

full of challenges and possibilities. The world is

rapidly changing, innovation is happening in all

fields of science and commerce. It becomes

inevitable for Business and Management

Professionals to manage change as well as

themselves in response to the rapid changes.

Old ways of doing things are not anymore

proving to be effective. We have to evolve new

forms of management and supervision that are

appropriate to the sweeping transformations

happening all around us and inside us.

Paradigm Shift is the fundamental

change in an individual's or a society's view of

how things work in the world. They are

discontinuous and complex to predict and

understand.

Now, whether the business schools or

managers want it or not, a discontinuous

paradigm shift in management is happening.

Working ever more diligently within the

existing paradigm leads to frustration, not

progress.

Whenever there was a theory evolved,

scientists had looked at the problem in a

fundamentally different way to solve the

problem so as in management. The experience

of paradigm shifts in science can teach us a

good deal about the ongoing paradigm shift in

management,

In management it‘s a shift from a firm-

centric prospective of the world in which the

firm‘s purpose is to make money for its

shareholders to a customer-centric prospective

of the world in which the purpose of the firm is

to add value for customers, now the paradigm

required in the same regard is the multiple stake

holder approach which involves customer,

employee, supplier shareholders, government

etc.

There is a happy realization amongst the

management practitioner, that the new

paradigm not only makes more money for the

firm than shareholder capitalism: when

correctly executed but it also makes tons more

money. This result can be seen from the results

of firms when they implement the new

paradigm, like Wipro, TATA, Apple, Amazon

and many more. The fact that it‘s also better for

those doing the work and for those for whom

the work is done will also help accelerate the

transition, a theory should disclose new

phenomena or new relationships among

phenomena

Now what used to be common sense is

obsolete. If you want to make money, focus on

delivering value to multiple stakeholders.

Making money is the result of the firm‘s

activities, not the goal.

And multiple stakeholder approach is

not a choice but mandate for the businesses

LITERATURE REVIEW

It has been found out by Xavier (2004)

that it is a paradigm which is a blend of beliefs

being utilized to set the limitation and address

the problem solving. When does a Paradigm

shift is expected to occur? Its answer is that

whenever an innovative analytical framework

88

demands to change the understanding of the

pattern that how a system operates. Such a shift

of Paradigm may occur in any form of system

i.e. man management, family system, health

care, political system, and system of info

technology, HRM, retailing or marketing.

In the Scenario of rapid shifts, some

scholars like Chan Heng Chee (1994)

researched out that today world has no ringing

model which can altogether work so well that

our purpose could be fulfilled. Hypothesis

framed by Kuhn‘s (1970) has proved workable

as well as inflectional above and beyond the

areas of academia and pure science. So Kuhn

being a scientist and historian is considered a

great contributor in this regard. As a routine

business leaders today have to shift Paradigm

which is a key to proceed towards innovation

and progress.

Prof. B. R. Virmani & Dr. Priya

Mahurkar in their research work explained that

Management in India is an amalgam of

practices borrowed from the West-and more

recently from Japan-over laid with age-old

Indian values and norms that the still extant. In

India there are four types of organizations-

traditional family-owned private sector; public

sector, government departments and

multinationals.

Many Researchers found that many of

the Management practices suggested by

Foreign specially the Western consultants when

implemented in Indian Organizations, get

rejected by the environment resulting in

contradiction within the Indian context between

stated policies and actual practices termed as

"Dualism" in Indian Management. Many of

these practices remain on paper without proper

implementation. Therefore, it becomes

imperative to evolve our own concepts of

Management, which are in tune with Indian

environment and value systems.

―After that episode ( Birla‘s Split) most

Indian business families started thinking very

seriously about having a roadmap for one,

accommodating family members inside

business and two, entry of sons and daughters

into the business,‖ says Salil Bhandari,

managing partner, BGJC, a Delhi-based

consulting firm. Indian business families are

different from those in the West.

As per the survey conducted by Ernst &

Young Global Limited, a UK company

―There‘s no question that in the next few years,

most organizations will have workforces that

are predominantly global. But they are neither

prepared for this nor able to fully understand

where and how to invest in talent and maximize

the return on that investment. At the same time,

companies realize that they need high-quality

managerial and executive talent to succeed in

the new markets that are so critical to the future

growth of businesses everywhere. The results

of our new global talent management survey

highlight this gap between expectations and

reality – a gap that urgently needs filling.

Talent is not a ―soft‖ skill anymore: it has a

positive and quantifiable connection to a

company‘s financial performance. Our survey

results bear this out.

High-performing companies tend to

manage their talent more effectively than their

lower performing counterparts.

In these times of changes, the best

attitude is to welcome change with open arms

and be willing to be the change ourselves.

What is the paradigm shifts that we

need in order to arrive at a new age of global

prosperity and peace? The present article is an

89

attempt to identify the areas and the paradigm

required on those areas.

RESEARCH QUESTIONS

Why Indian businesses are complex

What are the management practices

followed by business housed in India

Why Indian businesses are facing

challenges after liberalization and

globalization.

How paradigm can help business house to

cope up in the new environment.

Which are the factors that affect the

structure of Indian Business?

OBJECTIVES

To study the traditional management

practices in India

To identify the practices that needs to be

reviewed under present context

To find out the paradigm required in present

management system in India

RESEARCH METHODOLOGY

The study is based on researcher‘s

personal observation as well as informal

personal discussion with the top managers of 50

small companies having turnover of 50 lacs to

10 Cr p.a., from different geographical areas in

India were taken as a sample for study.

The data was collected in a very

informal manner however the structure of

questionnaire was followed.

Few case studies of big Indian

companies have also been taken into

consideration.

ANALYSIS

In India business can be classified in

four major categories, Family Business, Public

Sector Undertakings, Professionally run Big

Corporate and Multinational Companies

The management practices in all four

types of businesses are distinct from each other.

Family Business contributes 60-70

percent of GDP of most developed &

developing countries however in India the

percent contribution is around 85 percent. You

name the company and you find it family

owned business Birla‘s, Ambanies, Wadia

Jindal‘s and many more. Indian business

families are different from those in the West.

In India, most business families are part

of the old joint family system. Most of the

Business families face unique management

challenges because of the differences in the

attitude & aspirations of family members. As

new generations join the family business, it is

an enormous challenge to keep the family &

business together. Some sacrifice the business

to keep the families together, while others

sacrifice the family to keep the business. Global

research shows that most business families

can‘t keep their flock together for more than

three generations.

It has been observed that just 13 percent

of the Family business survive till 3rd

generation & only 4 percent go beyond third

generation and one third of business families

disintegrate because of generational conflict.

Ramachandran says that for India, no clear data

exists but there is anecdotal evidence. The

Birlas split after three generations, the Ambanis

in the second generation, and the Bajajs in the

third generation. The Jindals have divided the

business empire operationally; though the

90

control of the company is centralized in the

hands of Savitri Jindal.

However, the close-knit structure of

families, which fosters teamwork combined

with respect to family values and family elders,

has been the key to success of many family

businesses. Indian Family Businesses forms the

‗backbone‘ of the Indian economy and hence

there is a need to extend the life span of the

family businesses so that the economy can

continue to derive benefit from their

contribution.

The present research was an attempt to

identify what is the need for paradigm in family

owned businesses in India.

Characteristics of Indian business

Power distance

Multi state, multi culture and multi-

language

Uncertainty avoidance

Individualism

Lack of professionalism

In accordance to the present

management practices adopted by Indian

business traditional, following were the major

motivators

Pay

Manager quality

Sense of accomplishment

Laws of work

Status of the company

Job Security

Government jobs

Retirement benefits

Nature of Indian corporates

ANALYSIS

As an outcome of the research Table 1,

clearly describes the areas where paradigm is

must.

Historically, Indian businesses were

divided into two group‘s first purely family

owned and non-professional and second

government business, they were hierarchical in

nature and very stringent communication

network. After industrialization and

privatization as number of players have

increased, level of competition also increased

as a result nature of businesses have changed

and modernized with major focus on profit and

wealth maximization. As we all know that if

this trend continues fifty more years from now,

there would be no winners. All will be losers.

So the relevance of competition in business has

also lost the significance and we need a

paradigm which can redefine competition with

the concept of networking and cooperation.

This is very important for the sustainability of

business operations worldwide. It‘s a get on

together or a blow up together.

91

Table 1: Identified areas, paradigm needed

Traditional Management

Practices

Modern Management

Practices

Paradigm Required

Family based Competition based Networking based

Personal view System view Organic view

Self-management Personnel management Human resource management

Control Empowerment Liberation

Owner centric Manager centric Leader centric

Intelligence quotient Emotional quotient Spiritual quotient

Passive Thinking Reactive Thinking Proactive Thinking

Agri based Industry based Services based

Short term goals for survival Growth strategy Development of strategies for

complete roadmap of business

Power centric Management based Knowledge based

Under traditional management practices

ownership was very important and businesses

had personal view and owner concerned about

his own growth more than the business growth.

When modernization of business happened and

the size of business expanded there was an

upsurge need for the development of the

system. And business houses developed the

system in which business can run

automatically. Thus system approaches of

management evolved. However much scientific

inventions and discoveries that benefitted us

now, Mother Nature is now on the brink of

collapse. If that happens, then our whole

society will also collapse. Corporations must

now inevitably factor in the environment in its

operations. We have to realize that all of human

life is possible only because of Mother Nature‘s

support. From a macro level point of view, the

human species literally suckle from the breasts

of Mother Nature. Thus we now need to expand

our development framework to include the

interests of the Earth in strategic planning. The

present management paradigm required is the

organic view of management.

Business Managers and Professionals

must now do away with the mechanistic

approach to organizational management. This

kind of paradigm treats the whole set up like

giant clockwork. The problem with this kind of

paradigm is that it is limited to analysing causes

and effects only. It cannot analyse counter

effects. We have to shift to the organic view

that looks into the human organization as a

living organism in which all the parts are

mutually interrelated with each other. Rather

that analysing causes and effects only, we can

analyse relationships which are mutually

interdependent with each other where even the

tiniest part can send ripples upon the whole and

92

vice versa. Thus there is an innate and holistic

appreciation of the whole and the parts.

In order to get the best outcome from

the men/people a number of techniques and

theories of innovation have devised by the

behavioural scientists Herzberg‘s two factor

theory and theory Y of McGregor‘s is very

relevant in this regard. Then innovative concept

of empowering people has replaced the idea of

motivating people. Tongren (1994) suggests

that a substantial shift of Paradigm is occurring

in the most of organizations, now days.

Accordingly control techniques like approval

and authorization have been replaced by

empowerment, accountability as well as trust.

The latest and most innovative concept

emerged now is the liberation of

personnel/employees through providing then

share in the business and enough autonomy.

CONCLUSION

During the last three decades the

western especially the American concepts of

management have become popular in India and

to a large extent efforts are made to absorb

some of these concepts in wide variety of

organizational settings. The concepts ranged

from the Taylor‘s scientific management,

management by objective to emphasis on

business process reengineering etc.

In the present global environment, it

becomes mandatory for Indian businesses to

look into the management practices in the

fundamentally different manner with special

focus on Indian perspective. They have to

realize the fact that Indian culture is very rich

and we are culturally stronger from rest of the

world even from the ancient times.

There is an upsurge need for the entire

management practitioner as well as

academicians to integrate with each other and

evolve new management practices which can

support the country to maintain the pace of

growth in the global market. It is no more a

choice but there is a question of survival.

Things have started moving in the favourable

direction now domestic migration are y happing

with a rapid pace, instead of having cultural

barriers now Indian businesses have started

working in their core competency areas. The

fruitful results are expected to come soon.

BIBLIOGRAPHY

1) Agrawal, N. (1994). Determinants of inter-

generation conflict in organizations.

Journal for, 121-134.

2) Ali, A. (October 2012, Vol. 2, No. 10).

Significance of Paradigm Shift from

―Management to Leadership‖ – A Review

of Literature. International Journal of

Academic Research in Business and Social

Sciences, 499-506.

3) Allen, D. K. (n.d.). Paradigm Shifts: How to

Manage Complex Organizations.

4) Burns, J. M. (1978). What makes a

Difference in Leaders? Harper Torch books.

5) Chattopadhyay, G. (1975). Dependency in

Indian culture from mud huts to company

board. Indian Management, 14, 22-29.

6) Chee, C. H. (1994). Paradigm shift -

paradigm found? Eastern Economic

Review, Vol. 157 Issue. 47, pp. 36.

7) Chong, L. (. (2002). Business Environment

and Opportunities in India – Bangalore

and. St. Gallen: Verein Business Books &

Tools.

93

8) Mahurkar, P. &. (n.d.). Dualism In

IndianManagement.

9) Sorman, G. (2001). The genius of India.

New Delhi: Macmillan India Ltd.

10) Xavier, M. J. (2004). Paradigm Shift from

management to leadership. Indian Institute

of Management, Bangalor, pp20.

11) Zaleznik, A. (1977). Managers and leaders:

Are they different? Harvard Business

Review, pp 67.

94

Emerging Frontiers In Management: Next Best Practices

Work-Life Balance: A Modern Approach To HR

Lazree Gokhale

Faculty, Marathwada Mitra Mandal‘s College of Commerce.

ISBN: 978-93-81791-28-8

ABSTRACT

Introduction

Work-life balance for any one person is having the ‗right‘ combination of participation in paid

work defined by hours and working conditions and other aspects of their lives.

This combination will change as people move through life and have changing responsibilities

and commitments in their work and personal lives. Work-life balance policies can assist employees

achieving a balance between their work and personal commitments that is right for them. However,

availability of policies is not necessarily enough for these policies ‗to work‘. The policies need to be

supported by the workplace culture, which reflects the beliefs, values and norms of the whole of the

organization. Other important factors in the success of work life balance policies include proper

communication of commitment to the policies to existing and future employees , raising awareness of

the policies, education of managers about the importance of policies, and training of managers on ‗how

to‘ implement these policies.

Reasons for selecting the topic

The study of the following reasons is mainly responsible for selecting the topic for the project.

Stress related absenteeism

Poor retention levels

Unethical employee behaviour

Stress related diseases like weight gain and depression

Strained family and personal relationships

Competing responsibilities

High levels of multitasking strain

Less spousal support to women

95

Research methodology used

The research methodology used for collection of data is:

Questionnaires/schedules

5 - point scale method

Personal interviews

Books, references, periodicals.

Findings and conclusions of the research

The findings and the conclusions of the research are as under:

Compressed work weeks for employees working for 10-12 hours a day

Transportation facilities for employees at strategic points

Easy granting of emergency leaves and family care days

Organizing socio-formal functions including employees‘ families.

Promoting work from home and flexible working hour concepts.

Creating standard format options of work-life balance policies from which the employee should be

asked to choose at the time of employment.

Creating an awareness regarding the importance of work-life balance policies among employees to

ensure their whole- hearted co-operation.

Continuous reviewing of work-load, job description, job specification to avoid unnecessary load on

employees.

Change in break timings to increase productivity.

Workshops, seminars, art of living, time management sessions to ensure employees can strike a

work -life balance.

Providing optimum holidays/ paid time off to ensure employee satisfaction

Key areas

Work- life Balance

Contribution of the management

Contribution of the employee as a whole in achieving the balance

WHAT IS WORK-LIFE BALANCE?

Work-life balance is a prescriptive

concept as it attempts to design work

environments so as to maximize concern for

human welfare. It is a goal as well as a process.

The goal is the creation of a more involving,

satisfying and effective job environment for the

people at all levels within the organization. As

a process work-life balance involves efforts to

realize this goal through active participation on

both sides viz. the organization and the

employee.

96

It is the degree to which the members of

a work organization are able to satisfy their

important personal needs through their

experiences in the organization. It focuses on

the problem of creating a human working

environment where the employees work co-

operatively and achieve results collectively.

Work-life balance thus refers to the level of

satisfaction, motivation, involvement and

commitment individuals experience with

respect to their lives at work.

However Work-Life Balance does not

mean an equal balance. Trying to schedule an

equal number of hours for each of the various

work and personal activities is usually

unrewarding and unrealistic. At the core of an

effective work-life balance definition are two

key everyday concepts that are relevant to each

person; they are Achievement and Enjoyment.

Achieving work – life balance can be

boiled down to the following:

Being aware of different demands on your

time and energy,

Having the ability to make choices in the

allocation of time and energy,

Making conscious choices.

The allocation of time and space for a

person to achieve a ―balanced‖ life can be with

consideration to:

Me time – taking care of a person‘s own

physical and emotional needs.

Close others – family, close friends,

other people with whom they have

strong emotional ties.

Paid employment – time allotted for

paid work for fulfilling financial needs.

Distant others – involvement in

voluntary activities for the larger

community.

LITERATURE REVIEW

The programs influencing work- life

balance of an employee are expressed below :-

1) Flexible Working Hours: The basic

principle of flexible working hours is

employees have a core period when they

must normally be at work and non-core

times when they are able to decide for

themselves when to arrive and leave.

a. Annualized Hours: The scheme is

that the department managers are to

trade ‗surpluses‘ or ‗deficits‘ of

people‘s time when an area has a

surge in demand whereas other area

is relatively quiet. Instead of senior

managers having to arrange

temporary transfers, the employees

and their managers make

arrangements on their own. Thus

HR acts as a banker receiving

deposit of hours and issuing them

out.

b. Compressed Work Weeks: A

compressed work week is any

scheduling of work that allows a

full-time job to be completed in

fewer than the standard five days.

The most common form of

compressed work week is the 4- 40

that is 40 hours of work is

accomplished in four 10 hour days.

Thus that employee has three

consecutive days off. As most

people complain that their weekends

are too short having a longer

weekend has its attractions.

c. Adjustable Shift Patterns: Although

the traditional production lines

demand a rigid shift where hundreds

of workers are clocked on and off

97

and the same time such jobs is very

few in number. Nowadays the

opposite trend is occurring - global

operations increasingly need to

stagger shifts so that there is always

someone to respond to queries or

tasks from other time-zones.

d. Job Sharing: Another technique for

flexible arrangement of working

hours is job sharing. This occurs

when one full time job is assigned to

two persons who then divide the

work according to agreements made

between themselves and the

employer. Job sharing often occurs

where one person works one- half

day although it can also be done on

weekly and monthly bases for

sharing of assignments.

e. Part time Work: This is another

method of arranging the work

schedule in a flexible manner. Part

time work schedule classifies an

employee as ‗temporary‘ and

requires less than the standard 40

hour work week. Part timers are

easy to release and hire as required.

Hence many organizations use part

time work to cut down labour costs

and deal with the ups and downs of

the business cycle.

2) Enhancing Self-Esteem and Motivation:

Enhancing employee motivation and self –

esteem plays a major role in ensuring that

the quality of work- life for employees is

maintained on the up-side.

a. Employee Empowerment:

Empowerment is the process of

enhancing feeling of self-efficiency

and a sense of ‗owning‘ a job. It is

the motivation factor sought after by

young job aspirants. empowerment

is a process of enhancing feelings of

self- efficacy among organizational

members by the removal of formal

organizational practices that foster a

feeling of powerlessness among

employees. However empowerment

needs to be implemented with

caution. Where employees suffer

from inflated egos and are highly

self-centered empowerment does not

work. and are highly self- centered

empowerment does not work. When

employees look for secured but not

challenging jobs, empowerment

sounds hollow.

b. Participative Management: When

subordinates are involved in

decision making at all levels, the

resultant concept is participative

management. It is another tool used

by managers to motivate employees.

However at what level of decision

making can participation be allowed

differs from organization to

organization. The main benefit of

participative management is that the

employee identifies himself with the

job and organization and this leads

to improved motivation and

enhanced task performance.

Participation leads to reduced

conflict and stress, more committed

to goals, better acceptance to change

and improved communication

3) Stress Management and Mentoring: Mental

health programs dealing with stress are

beginning to emerge as a new and important

aspect of work- life balance programs in

recent years. An individual suffering from a

high level work-related stress cannot enjoy

98

a high quality of work-life. For this HR

mangers have to look into nature of work,

working conditions, worker‘s abilities etc.

also attempts to put employees on jobs best

suited to their talents should be made.

Balance has to strike between achievement

of organizational goals and career

advancement of employees‘ thereby

ensuring development of people at all

levels.

a. Employee Counselling: Counselling

is a dyadic relationship between two

persons; a manager who is offering

help (counselor) and an employee

whom such help is given

(counselee). Formal counselling is a

planned, systematic way of offering

help to subordinates by expert

counsellors. Informal counselling is

the day to day relationship between

the manager and his subordinates

where help is readily offered

without any formal plan.

b. Mentoring: Mentoring is the use of

an experienced person (mentor) to

teach and train someone the

(protégé) with less knowledge in a

given area. The mentor nurtures,

supports and guides the efforts of

young people by giving appropriate

information, feedback and

information whenever required. A

mentor offers emotional support and

guidance to the protégé so that the

protégé can improve his chances for

success in his career.

4) Provisions for Family and ‗Me‘ Time:

Work – life balance does not revolve only

around the employee but also includes his

family members. The employee is expected

to discharge his duties towards his family

members and simultaneously have some

personal time for himself.

a. Sabbaticals and Career Breaks:

Sabbaticals which used to be a rare

privilege are now widespread among

organizations. A sabbatical derived

from the Latin word ‗sabbaticus‘

which literally means ‗ceasing‘ is a

rest from work, often lasting from

two months to a year. In the strict

sense, however sabbatical lasts a

year. A sabbatical, can be paid or

unpaid.

b. Maternity Leave: It is a leave of

absence for an expectant or new

mother for the birth and care of the

baby. This is a very important factor

in creating a work-life balance for

families. This policy provides that

all working mothers-to-be are

entitled to a maternity leave period

of 12 weeks from her office. While

the first six weeks of maternity leave

is to be taken before delivery, the

remaining six weeks of leave will be

granted immediately after the child

is born.

c. Leave of absence: Leave of absence

(LOA) is a term used to describe a

period of time that one is to be away

from his primary job, while

maintaining the status of employee.

i. Paid leave: Generally, paid

leave of absences are given

at the request of the

employer, or per some

statutory or contractual

requirement.

ii. Unpaid leaves: Are generally

at the request of the

employee or as a result of

99

suspected misconduct on the

part of the employee. A

leave of absence may be

obtained for a variety of

employee-requested reasons,

including attending the

health needs of the employee

or of a family member of the

employee.

OBJECTIVES OF PROJECT

The aims and objectives of this project

are as follows:

1) The study aims at understanding basics of

the concept of ‗work –life balance‘ and also

creating awareness amongst the employees

regarding the concept.

2) The study aims at identifying the various

policies and practices employed by the

organization in order to help the employees

achieve a state of balance.

3) The study aims at identifying the employee

needs through the questionnaire method so

that the deviations between the existing

policies and employee demands can be

reduced to minimum.

4) The study through a graphical analysis aims

to present before the organization an

employee satisfaction survey in terms of

work-life balance and also the changes

desired by the employees in the current

policy structure

SCOPE OF THE STUDY

For the purpose of graphical analysis primary

questionnaire method was utilized for 30

employees from IT sector (training and

development) viz. Karrox technologies located

at J.M. road was the principal information

source

RESEARCH METHODOLOGY

1) Primary Data: Questionnaire or Schedule:

Questionnaire is the method used for data

collection in all branches. However there is

a minor difference between a questionnaire

and a schedule. Questionnaire is filed up by

the respondent himself without any

assistance from the interviewer whereas in

schedule the interviewer records the

respondent‘s answers.

2) 5 Point Scale: It is a rating in which various

tangible and intangible aspects relating to

one‘s study can be monitored with the help

of this method. The main advantage of this

method is that is the ratings obtained for

various parameters provide a scope for

comparative study.

3) Interview Method: Interview means ‗conversation with a purpose‘ or ‗a process of social interaction‘. It is a face to face dialogue of the researcher with the respondent.

4) Secondary data: Secondary data is the data

collected processed and published by

someone else either for his personal use or

for public use.

Books

Periodicals and journals

Internet

DATA ANALYSIS AND GRAPHICAL

ANALYSIS

How many hours in a day do you normally

work?

Nature of Graph: Simple Bar Graph

Conclusion: The graph shows variation in

number of hours of work for employees

ranging between 7 -12. The graph shows

97% of employees work up to less than 10

100

hours a day whereas only 3% of employees

work in the range of 10-12 hours a day.

How many hours a day do you spend

traveling to work?

Nature of Graph: Simple Bar Graph

Conclusion: The graph shows 20%

employees take less than half an hour 20%

employees take almost an hour 50%

employees take nearly two hours whereas

10% employees take more than two hours

to commute to and fro from the office

premises.

Being an employed man/woman who helps

you to take care of your children?

Nature of Graph: Simple Bar Graph

Conclusion: The graph shows that out of the

married sample population considered 78%

of the employees take help from their

spouse, 16.67% take help from their parents

and in-laws respectively whereas 11%

entrust the responsibility to servants and

22% prefer crèche or day care centres.

Do you generally feel you are able to

balance your work life?

Nature of Graph: Simple Pie Chart

Conclusion: The graph shows 46% of the

sample population feels that they are unable

to balance their work-life while 53% has a

positive response on their work-life balance.

Do you miss any quality time with your

family or friends because of work?

Nature of Graph: Joint Bar Graph

Conclusion: The graph shows 6.66% of the

employees never miss any quality time with

their friends, 20% of them rarely do so,

50% of them sometimes are unable to strike

a balance while ,23.33%are always busy.

Do you ever feel tired or depressed because

of work?

Nature of Graph: Joint Bar Graph

Conclusion: The graph shows 33.33% of

the employees never feel tired or depressed

because of work, 23.33% of them

sometimes feel so, and 40% of them are

often tired whereas 3.33% are always

feeling tired or depressed due to work

pressure.

Do you feel you are given sufficient breaks

from work?

Nature of Graph: Simple Pie Chart

Conclusion: The graph shows 50% of the

sample population feels that they are given

sufficient breaks while 50% feel that they

should get more relief time from work.

How do you manage stress arising from

your work?

Nature of Graph: Simple Pie Chart

Conclusion: The graph shows that 15% of

the sample population use face book as a

means of entertainment, 27% prefer music

or TV,16% like to read books, 22% prefer

spending free time with friends or family

and other 20% have other options like

exercise, yoga etc.

What contributions can the organization

make for improving your work life balance?

Nature of Graph: Percentage Bar Graph

Conclusion: The graph shows 67% of the

employees feel they should be given

COUNSELLING SERVICES while 33.33%

of the employees give a negative response

for it.

Do you take special initiatives to manage

your diet?

Nature of Graph: Simple Pie Chart

Conclusion: The graph shows 60% of the

sample population takes special initiatives

to balance their diet while 40% of them

show a negative response for a special diet.

101

Should work life balance policy in the

organization be customized to individual

needs?

Nature of Graph: Simple Bar Graph

Conclusion: The graph shows that 40% of

the population strongly agrees to the idea,

16.67% of the employees agree to it,

23.33% are indifferent to the concept,

13.33% disagree to it while 6.67 % are

strongly against the idea.

LIMITATIONS OF THE STUDY

The study is conducted for 30 employees in

karROX technologies, the sample

population however can be extended as per

the need and extent of research.

The study can cover monetary non-

monetary aspects of incentives and their

contribution to work-life balance of an

individual

The research can be conducted for both

genders taking a cross-sectional study of the

ages of working population to identify their

individual set of problems.

The word limit specified for the research

paper is a constrain limiting further scope of

study.

102

An Empirical Analysis On Factors Influencing Stress And

Coping Strategies Among The Management Faculties Of

Indore City

Rishi Vaidya

Asst. Professor, Modern Institute of Professional Studies, Indore (M.P)

&

Neha Yadav

Asst. Professor, Modern Institute of Professional Studies, Indore (M.P)

ISBN: 978-93-81791-28-8

ABSTRACT

Purpose

Teaching profession was once viewed as a ‗low stress occupation‘ and they have been envied

for tenure, light workloads, flexibility and other perks such as foreign trips for study and conference.

However, some recent studies suggest that faculty is among the most stressed occupational group.

Design/methodology/approach

The present study was conducted to explore the faculty perception towards occupational stress

using established questionnaire, data collected from 200 management faculties of Indore city. Research

findings on the coping strategies that faculty used to tackle stress were also reviewed.

Findings

Through this study, it is concluded that there are variations in the experience of stress related to

work, role, personal development, interpersonal relation and organizational climate by the male and

female faculties. Therefore, there is the need for effective management of the stressors by making use

of different management strategies by providing effective guidance and counselling.

Originality/value

The study reveals that care should be taken to make even remote faculty feel a part of the

greater whole of this institution thorough regular communication and support.

103

KEYWORDS

Stress, Coping strategies, Faculty

INTRODUCTION

Stress is a term commonly used to

describe feelings of tensions or exhaustion

usually associated with work overload or overly

demanding work. Stress is natural phenomenon

in an individual‘s daily life. In the workplace, it

can serve to enhance an individual‘s

motivation, performance, satisfaction and

personal achievement (Mathewman, Rose and

Hetherington, 2009). In other words, stress is

considered to be any pressure which exceeds

the individual‘s capacity to maintain

physiological, psychological and/or emotional

stability (Furnham, 2005). Hans Selye (1979)

defines stress as any external events or internal

drive which threatens to upset the organismic

equilibrium. That is, stress is anything that

changes our physical, emotional, behavioural or

mental state while we counter various stimuli in

our environment. Hans Selye points out the

important aspects of the stress process and the

stressors - that is, the antecedent stimuli that

cause the stress (Sekaran, 2004).

The phenomenon of stress is highly

individualist in nature. Recent researchers

demonstrate that individual responses to stress

differ according to the stressor and varying

environmental and personal factors (Cox,

Griffiths and Rial-Gonzalez, 2000). Some

people have high levels of tolerance for stress

and thrive very well in the face of several

stressors in the environment. On the other hand

some individuals are not able to perform well

except when subject to a level of stress that

activates and energizes them to put forth their

best efforts (Sekaran, 2004). This shows that

individual differences may cause some to

interpret these stressors as positive stress or

Eustress (which stimulate them), while other

experience negative stress or distress (which

detracts from their efforts). These effects may

be short term and diminish quickly or they may

last long time (Newstrom, 2007).

Faculty members from around the world

experience high level of stress. A lot of work

regarding occupational stress has been done

concerning low productivity, job satisfaction,

high absenteeism, physical and psychological

disorders; yet, very few studies were conducted

regarding stress in institution of higher

education. The reason behind this matter lies in

perception that teaching is generally a low

stress job compared to corporate world. But

research conducted in USA shows that, out of

26 other occupations, teaching seems to be one

of the most stressful occupations. Occupational

stress at higher education is becoming a key

issue for both faculty members and

administrators.

Stress is the body‘s reaction to a change

that requires a physical, mental or emotional

adjustment or response. Stress can come from

any situation or thought that makes you feel

frustrated, angry, nervous or anxious. Stress is

caused by an existing stress-causing factor or

―stressor‖. Stress is a condition which happens

when one realizes the pressure on them or

requirements of situation are wider than they

can handle, and if these requirements are huge

and continue for a long period of time without

any interval, mental, physical or behavioural

problems may occur. Job stress is one of the

104

most important workplace health risks for

employees in developed and developing

countries (Paul, 2002; Danna and Griffin,

2002).

REVIEW OF LITERATURE

Numerous studies found that fob stress

influences the employees‘ job satisfaction and

their overall performance in their work.

Because most of the organizations now are

more demanding for better job outcomes. In

fact, modern times have been called as the ―age

of anxiety and stress‖ (Coleman, 1976). The

stress itself will be affected by number of

stressors.

Nevertheless, Behr and Newman (1978)

had defined stress as a situation which will

force a person to deviate from normal

functioning due to the change (i.e. disrupt or

enhance) in his/her psychological and/or

physiological condition, such that the person is

forced to deviate from normal functioning.

From the definition that has been identified by

researchers, we can conclude that it is truly

important for an individual to recognize the

stresses that are facing by them in their career.

Some demographic factor may influence the

way a university academic staff act in their

workplace.

Workers in an organization can face

occupational stress through the role stress that

the management gave. Role stress means

anything about an organizational role that

produces adverse consequences for the

individual (Kahn and Quinn, 1970). Role

related are concerned with how individuals

perceive the expectations other have of them

and includes role ambiguity and role conflict

(Alexandros-Stamatios G.A. et. al., 2003).

Family and work are inter-related and

interdependent to the extent that experiences in

one area affect the quality of life in the other

(Sarantakos, 1996).It asks about whether home

problems are brought to work and work has a

negative impact on home life (Alexandros-

Stamatios G.A. et al., 2003). Home-work

interface is important for the workers to reduce

the level of work-related stress.

Several studies have highlighted the

deleterious consequences of high workloads or

work overload. Workload stress can be defined

as reluctance to come to work and a feeling of

constant pressure (i.e. no effort is enough)

accompanied by the general physiological,

psychological, and behavioural stress

symptoms (Division of Human Resource,

2000). Al-Aameri A.S. (2003) has mentioned in

his studies that one of the six factors of

occupational stress is pressure originating from

workload. Alexandros-Stamatios G.A. et al.

(2003) also argued that ―factors intrinsic to the

job‖ means explore workload, variety of tasks

and rates of pay. Rapidly changing global scene

is increasing the pressure of workforce to

perform maximum output and enhance

competitiveness. Indeed, to perform better to

their job, there is a requirement for workers to

perform multiple tasks in the workplace to keep

abreast of changing technologies (Cascio, 1995;

Quick, 1997).

The ultimate results of this pressure

have been found to one of the important factors

influencing job stress in their work (Chan et al.,

2000). A study in UK indicated that the

majority of the workers were unhappy with the

current culture where they were required to

work extended hours and cope with large

workloads while simultaneously meeting

105

production targets and deadlines (Townley,

2000).

OBJECTIVES OF THE STUDY

The present study was designed to

analyse the factors influencing stress and

coping strategies among the management

faculties of Indore city with following specific

objectives:

1) To study the factors influencing

stress and the stressors among the

management faculties.

2) To analyse the level of stress among

the faculties.

3) To study the coping strategies

adopted by the faculties to reduce or

eliminate stress.

4) To know whether gender difference

exists with regards to stress and

coping strategies.

METHODOLOGY

The criteria for selection of the

respondents for the study were the full time

employed faculties in the management colleges

of Indore city. Three colleges offering MBA

and BBA courses were contacted for the

selection of the sample. The total sample size

was comprised of 200 faculties (100 males and

100 females), who were selected by random

sampling method from the selected colleges.

Since the respondents were highly educated,

questionnaire was considered to be the most

suitable instrument for the data collection. To

collect information about demographic

characteristics and coping strategies for stress,

questionnaires were developed. The tools used

to carry out the present research included the

following aspects:

Demographic characteristics questionnaire

The demographic characteristics

schedule consisted information of the teachers

regarding age, gender, education, designation,

total service, monthly income of the

respondents, family type, family size,

employment of the spouse and annual income

of the family.

Employment Organization Sources of

Stressors (EOSS) scale

EOSS is a self-administering scale,

which could be administered individually or in

a group. In the present study, the EOSS was

administered for the individual teachers. The

scale developed by Telaprolu and George

(2005), was adopted in the study to measure the

level of stress among the degree college

teachers. It consisted of 80 statements and had a

five-point scale such as ―always‖, ―frequently‖,

―sometimes‖, ―rarely‖ and ―never‖ with scoring

as 4, 3, 2, 1 and 0 respectively. The range of the

scores was 0 to 320. Based on the total scores,

the level of stress was quantified as follows:

Category Range

Very low stress 0-80

Low stress 81-160

Moderate stress 161-240

High stress 241-320

Interpretation of Employment

Organization Sources of Stressors scale:

The EOSS scale had been categorized

into five components depending upon the

nature of the stressors. The statements 1 to 16

106

represented work stressors, statements 17 to 32

represented role stressors, statements 33 to 48

represented personal development stressors,

statements 49 to 64 represented interpersonal

relations stressors and statements 65 to 80

represented organizational climate stressors.

But among the statements some statements

were positive and some were negative. Each

statement had five alternatives and the subject

had to choose one alternative for each item

based on their assessment. Scores 4 through to

0 were assigned to the responses ―always‖,

―frequently‖, ―sometimes‖, ―rarely‖ and

―never‖, respectively to the statements which

reflected the sources of stressors. The scoring

pattern was reversed in case of negative

statements, which reflected no sources of

stressors. The scores were interpreted such that

higher the score, the greater was the perception

of stressor from each source as well as in the

overall organization.

Coping strategy questionnaire

Coping strategies questionnaire

consisted of the items to collect information

from the teachers regarding the physical and

mental stress management strategies adopted by

them.

RESULTS AND DISCUSSION

Table 1 shows the profile of

respondents. Majority of the teachers (75.0%)

fell in middle age group i.e. between 31-50

years of age followed by younger age group i.e.

below 31 years of age (14.5%) and old age

group i.e. above 50 years of age (10.5%).

Further it was evident that each 75.0 per cent of

the male and female teachers belonged to

middle age group between 31-50 years where

as only 6.0 per cent of the male and 23.0 per

cent of the female faculties‘ belonged to young

age group i.e. less than 31 years of age.

Marital status depicted that maximum

percentage of the teachers (82.5%) were

married followed by unmarried (17.5%).

Maximum percentage of the males (91.0%) and

of the females (74.0%) were married and 9.0

per cent of the males and 26.0 per cent of the

females were unmarried.

Table 1: Demographic characteristics of the selected degree college teachers

Sr.

No.

Demographic

variables Males n=100 Females n=100

Total

N=200

Frequency Percentage Frequency Percentage

I. Age

1 Young (< 31 years) 6 6.0 23 23.0 29 (14.5)

2 Middle (31-50 years) 75 75.0 75 75.0 150 (75.0)

3 Old (> 50years) 19 19.0 2 2.0 21 (10.5)

II. Marital status

1 Unmarried 9 9.0 26 26.0 35 (17.5)

2 Married 91 91.0 74 74.0 165 (82.5)

III. Family type

1 Nuclear family 65 65.0 71 71.0 136 (68.0)

2 Joint family 35 35.0 29 29.0 64 (32.0)

107

IV. Family size

1 Small (< 5 members) 70 70.0 51 51.0 121 (60.5)

2 Medium (5 - 7

members) 24 24.0 47 47.0 71 (35.5)

3 Large (> 7 members) 6 6.0 2 2.0 8 (4.0)

V. Education

1 Post graduation 51 51.0 70 70.0 121 (60.5)

2 Doctorate 48 48.0 29 29.0 77 (38.5)

3 Post doctorate 1 1.0 1 1.0 2 (1.0)

VI. Designation

1 Lecturer / Asst.

Professor 44 44.0 67 67.0 111 (55.5)

2 Sr. Lecturer / Reader /

Assoc. Professor 46 46.0 32 32.0 78 (39.0)

3 Professor 5 5.0 1 1.0 6 (3.0)

4 Principal 5 5.0 0 0.0 5 (2.5)

VII. Working experience

1 1 – 5 years 27 27.0 53 53.0 80 (40.0)

2 6 – 10 years 42 42.0 30 30.0 72 (36.0)

3 11 – 15 years 25 25.0 14 14.0 39 (19.5)

4 More than 15 years 6 6.0 3 3.0 9 (4.5)

VIII. Monthly income

1 Low (< Rs.20,000/-) 43 43.0 24 24.0 67 (33.5)

2 Medium (Rs. 20,000/-

to Rs. 40,000/-) 35 35.0 40 40.0 75 (37.5)

3 High (> Rs. 40,000/-) 22 22.0 36 36.0 58 (29.0)

In relation to family type, majority of

the teachers (68.0%) were from nuclear family

and 32.0 per cent were from joint family. It

represented that 65.0 per cent of the males and

71.0 per cent of the females were from nuclear

family whereas, 35.0 per cent of the male and

29.0 per cent of the female teachers were from

joint family.

With respect to family size, 60.5 per

cent of the teachers of both categories had small

family i.e. up to four members per family

followed by medium family size with 5-7

members (35.5%) and large family size i.e.

above 7 members (4.0%). Further 70.0 per cent

of the male and 51.0 per cent of the female

teachers had small family size i.e. up to 4

members in their family, followed by medium

family (24.0 % of the male and 47.0 % of the

female teachers).

The education of the degree college

teachers ranged from post-graduation to post-

doctoral degrees. On the whole, a maximum of

60.5 per cent of the teachers were post

graduates followed by 38.5 per cent having

doctoral and rest had post-doctoral degree.

Further it was evident that 51.0 per cent of the

male and 70.0 per cent of the female teachers

were postgraduates, 48.0 per cent of the male

and 29.0 per cent of the female teachers were

doctorates and only 1.0 per cent of each of the

males and females were post doctorate degree

holders.

108

ANOVA

The One-way ANOVA was applied to check

whether any significant difference exists among

the stress scores of faculty members. Table 2

shows that a significant difference exists

between the stress scores of male and female

faculty members (p <.01). According to the

results, female faculty members experience

more stress (mean = 26.18) as compared to

male faculty members (mean = 23.62).

Table 2: One-Way ANOVA of overall stress between male and female faculty members

Sum of

Squares df Mean

Square F Sig.

Between Groups 355.079 1 355.079 11.360 .001 Within Groups 6720.276 198 31.257

Total 7075.355 199

Moreover, Table 3 shows another

significant difference existing between the

stressors scores of male and female faculty

members (p <.05). According to the results,

female faculty members undergo more stressors

(mean = 19.21) as compared to male faculty

members (mean = 17.77).

Table 3: One-Way ANOVA of stressors scores between male and female faculty members

Sum of

Squares df Mean

Square F Sig.

Between Groups 112.463 1 112.463 5.942 .016 Within Groups 4069.371 198 18.927

Total 4181.834 199

A further investigation permits us to

determine the reasons behind these results.

Table 4 illustrates our findings; out of the eight

groups of stressors, only debts, extra activities

and illness, seem to make the difference (p

<.01). Male faculty members (mean = 2.34)

seem to be more stressed by life burdens than

females (mean = 1.41). There is generally high

pressure exerted on men to fulfil family

demands. On the other hand, female faculty

members (mean = 1.92) suffer from extra

activities more than men (mean = 1.60) as

women have to maintain balance between job

and family demands. Moreover, women (mean

= 2.19) seem to be more concerned with health

issues than men (mean = 1.46), may be because

they are more emotive than men.

Table 4: One-Way ANOVA of different causes of stressors between male and female faculty

members

Sum of

Squares

df Mean

Square

F Sig.

109

Work

Stressors

Between

Groups .305 1 .305 .783 .377

Within Groups 83.686 198 .389

Total 83.991 199

Role

Stressors

Between

Groups .359 1 .359 .536 .465

Within Groups 144.120 198 .670

Total 144.479 199

Personal

Development

Stressors

Between

Groups .930 1 .930 1.028 .312

Within Groups 194.481 198 .905

Total 195.410 199

Interpersonal

Relations

Stressors

Between

Groups 47.238 1 47.238 82.886 .000*

Within Groups 122.532 198 .570

Total 169.770 199

Organization

al Climate

Stressors

Between

Groups 29.474 1 29.474 38.546 .000*

Within Groups 164.397 198 .765

Total 193.871 199

As for coping strategies, Table 5 shows

no significant differences in coping strategies

adopted by both female and male faculty

members except that females (mean = 15.31)

seek more emotional support than men (mean =

13.6).

Table 5: One-Way ANOVA if coping strategies adopted by male and female faculty members

Sum of

Squares

df Mean

Square

F Sig.

Seeking

Social

Support

Between

Groups 159.001 1 159.001 25.294 .000*

Within Groups 1351.497 198 6.286

Total 1510.498 199

110

Accepting

Responsibilit

y

Between

Groups .073 1 .073 .012 .914

Within Groups 1335.264 198 6.211

Total 1335.336 199

Escape-

avoidance

Between

Groups 12.859 1 .930 1.028 .312

Within Groups 1768.266 198 .905

Total 1781.124 199

Planful

Problem

Solving

Between

Groups 29.624 1 29.624 2.082 .151

Within Groups 3059.722 198 .570

Total 3089.346 199

Positive

Reappraisal

Between

Groups 21.179 1 21.179 2.456 .119

Within Groups 1854.351 198 8.625

Total 1875.530 199

CONCLUSION

The objectives of this study were to

investigate if female faculty members

experience different levels of stress in

comparison with male colleagues, to determine

the different types of stressors that both genders

are exposed to in their daily lives, and to

explore the kinds of coping strategies they

apply to solve their problems.

Stress affects the efficiency of the

individual. So it is necessary to provide proper

environment and support to each to maintain

individual stress. The study has shown that

there are variations in the experience of stress

related to work, role, personal development,

interpersonal relation and organizational

climate by the male and female faculties.

Therefore, there is the need for effective

management of the stressors by making use of

different management strategies by providing

effective guidance and counselling.

The negative implications of work stress

are recognized as a challenge to both men and

women. The results of the current study

revealed that female faculty experience more

stress if compared to male faculty members; as

far as we know, these findings meet with those

of many studies conducted in western countries

men. It was found that male have more

concerns regarding the life style and the

facilities they are supposed to provide to their

families, even though undergoing debts and

loans; it‘s a fact in India as it is still a male-

oriented society. Meanwhile, tasks and

activities that women do beside their careers as

well as health issues were considered stressful

111

factors; unfortunately, we were not able to find

any supporting study; these findings support the

study of Clarke and Cooper in 2000 when they

established that organizations suffer business

loss through lost working days and

absenteeism.

The study has revealed a remarkable

status between the males and females faculties

that the relationship between the demographic

characteristics and the different components of

employment organization sources of stressors.

The demographic characteristics significantly

influenced the various employment

organization sources of stressors. Therefore, it

is prime perspective to resolve the teachers‘

stress by discussing the stressors which are

responsible for creating stress.

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113

Evaluating The Theory Of Customer Loyalty And Its

Historical Development In The Perspective Of Store

Loyalty

Dr. Prafulla A. Pawar

Professor, Department of Management Sciences, University of Pune, Pune, India

&

Nitin B. Veer (Corresponding author)

Research Fellow, Department of Management Sciences, University of Pune, Pune, India

ISBN: 978-93-81791-28-8

ABSTRACT

Customer loyalty is related to the strength of product and their relationship between an

individual‘s relative attitudes towards repeat patronages‖. Objective of this study was to evaluate the

customer loyalty theory and its theoretical development and to critically analyse various models on the

customer loyalty developed by different authors. Rational of this study was to evaluate customer

relationship methods that used by retailers to assess the loyalty behaviour of customer and Behavioural

understanding of this kind of problem is too important to analyse. Conceptual study method was used

for the evaluation of customer loyalty with the help of present theories on store loyalty. Finally,

researcher has concluded that customer loyalty is depending on two dimension of nature in which

behavioural aspect is one dimension and other attitudinal.

KEYWORDS

Customer Loyalty, Retail Store, store Patronage, Customer Loyalty Programs

INTRODUCTION

Customer loyalty is all about attracting

the right customer, getting them to buy, buy

often, buy in higher quantities and bring you

even more customers. We have studied the

various definitions of customer loyalty which is

formulated by different loyalty authors. It is

important for defining customer loyalty and

historical development of loyalty concept.

According to Schiffman & Kanuk (2003),

Consumer learning is defined as ―the

behavioural process by which individuals

acquire the purchase and consumption

knowledge and experience they apply to future

related decision process‘‘. It can be called as

114

consumer learning process. Retail business

scenario in India has been changed after

liberalisation of economy. Foreign retail players

are entered into the Indian retail trade due to

these transition domestic retailers has started

some effective customer relationship practices

to attract new customers and retain same loyal

to existing one. Multinational retailers and

domestic big retailers started using innovative

strategy to retain customer. Customer loyalty

programs are the one of important retain

strategy use by various retailer now a day while

studying behavioural and attitudinal nature of

customer loyalty. In this study we have used

historical evidences of loyalty development

with the help different loyalty models

developed by loyalty researcher.

Stores which succeed in stimulating the

loyalty of customers that are favourable to

loyalty minimise the effects of competition and

can become niche retail outlets (Kahn et al.

1988).

RATIONAL OF STUDY

Outcome of the customer loyalty is

repeat visit to the particular store or patronage

to the same store. Customer loyalty program is

the one of the customer relationship technique

that used by retailers to assess the loyalty

behaviour of customer. Now a day number of

loyalty programs are increased in the retail

business to attract more customers. Some

retailer are attracting customer through

providing rewards, discount schemes and high

promotions. Everyone has objective to retain

customer, make them loyal and increase

profitability through loyal customers. For

getting inside into loyalty programs it is

necessary to understand customer retention

strategy (Taylor and Timothy 1998).

Objective of this study is to evaluate the

customer loyalty theory and its theoretical

development. We have critically analysed

various models on the customer loyalty

developed by different authors. If it is

considered that the loyalty program is important

medium to attract new customer and make them

loyal to repeat purchase. But further question

can‘t be answered that some customers having

hundreds of loyalty cards end up using some of

them. What influences the use of certain cards?

Inside analysis of the keeping number of

loyalty cards in wallet is to the part of

understanding this behaviour. Behavioural

understanding of this kind of problem is too

important to analyse (Nilakanatan M). Hilmer

F. and Donaldson L. (1996) reviews a body of

research indicate that many programs widely

discussed in the business it is one kind of

management strategies or fads and argues that

many customer loyalty programs seem to have

been adopted too quickly, without much

thought. Most retailers are at a very basic level

in using loyalty programs, and many customers

see the programs as punitive. Critically

understanding of customer behaviour is

difficult task and It is practically unsolved

question that does customer have same attitude

to correlate loyalty products equally to all.

THEORETICAL DEVELOPMENT

The concept of loyalty first appeared in

the 1940s. In its earliest days loyalty was

proposed as a uni-dimensional construct, which

was related to the measurement perspective

taken by the researcher. Initially loyalty

concept was correlated with store preference.

Store choice concept used for the measure the

customer loyalty which was later referred to as

attitudinal loyalty and behavioural loyalty

115

respectively. Nearly 30 years after loyalty first

appeared in the academic literature. Day (1969)

proposed that loyalty may be more complex

and that it may comprise both attitudinal and

behavioural aspects. This two-dimensional

concept has since been combined and referred

to as combined customer loyalty. Two

dimensional model later on used for the loyalty

study (e.g. Jacoby, 1971).

LITERATURE REVIEW

Two-Dimensional Loyalty Model

1. BEHAVIOURAL LOYALTY

There are two important dimensions of

loyalty in which some theory inclined towards

behavioural context of customer loyalty. The

historical development of behavioural loyalty is

evaluated by researcher in 1964.In their

analyses further state that behaviour is the true

statement of store loyalty? Initial definition of

customer loyalty took a more behavioural

perspective such as a form of repeat purchasing

of particular product or service. Many

researchers relate the customer loyalty concept

with the store loyalty. (Tucker, 1964). The

behavioural concept of loyalty is then continued

to be discussed by other researcher also. Some

scholars interpret that behavioural definitions of

loyalty equate customer loyalty with repeat

purchase and exclusive repeat purchase. It also

defines as store patronage, its more readily

observable outcome and manifestation (Hart,

Smith, Sparks and Tzokas 1999).

2. ATTITUDINAL LOYALTY

Attitudinal loyalty was defined by

Oliver (1997) as a deeply held commitment to

repurchase or repatronage a preferred product

or service consistently in the future, thereby

causing repetitive same store or same kind of

purchasing, despite situational influence and

marketing efforts having the potential to cause

switching behaviour (Oliver 1999).Attitudinal

definition of customer loyalty based on

consumer‘s preference, intentions or strength of

affection for retail store. Attitudinal approaches

that used to define loyalty is indicates

satisfaction level of customer and satisfaction

leads to the repeat purchase purpose

(Reichheld, 1994).Some researcher emphasized

as attitudinal loyalty is based on commitment

and trust in the past researches (East, Gendall,

Hammond and Lomax 2005).

RESEARCH APPROACH AND ANALYSIS

Conceptual study of the each model has

done by using historical development of

customer loyalty with the help of different

models suggested by loyalty researcher. We

have critically examined each model and

explored insightful information on the loyalty.

Historical development of Customer

Loyalty -

ALAN S. DICK AND KUNAL BASU

(1994)

There is two-dimensional model of behavioural

loyalty and attitudinal loyalty is then used to

define customer loyalty that is presented by

Alan S. Dick and Kunal Basu. According to

Dick and Basu (1994), ―customer loyalty is

defined as the strength of product and their

relationship between an individual‘s relative

attitude repeat patronages‖.

Relative attitude toward store -

Relative attitude means attitude presence in the

customer and such attitude compare the attitude

116

with available alternatives to purchase. This is

because it is the contrast between alternatives,

such as influence of other demographic factors

like influence group and their recommendation,

which is likely to motivate behaviour. Four

levels of relative attitudes which are shown by

the following figure.

No Yes

Strong

Low Relative Highest Relative

Attitude Attitude

Attitude Strength

Lowest Relative High Relative

Weak

Attitude Attitude

Attitudinal Differentiation

Source: Dick, Alan S. and Kunal Basu (1994), ―Customer loyalty: toward an integrated

conceptual framework,‖ Journal of Academy of Marketing Science, 22 (2), 100

JILL GRIFFIN (1995)

Similar two-dimensional model of

behavioural loyalty and attitudinal loyalty used

to define customer loyalty is published by Jill

(1995) right after Dick and Basu (1994). One

conceptual difference is that Jill (1995)

mentioned in his research attachment to the

store is more important than the relative

attitude. He states that loyalty is the attachment

to the product or service or with the particular

retail store instead of relative attitude together

with customers‟ repeat patronage that defines

customer loyalty.

In this research attachment has got more

attention to verify the two dimensions of

loyalty. The attachment customer feels towards

a product or service is formed by two

dimensions: the degree of preference (the extent

of the customer‘s conviction about the product

or service) and the degree of perceived product

differentiation (how significantly the customer

distinguishes the product or service from

alternatives). When the two factors are cross-

classified, four attachments possibilities

emerged, as shown by the figure below

117

Four relative attachments

Product differentiation

No Yes

Strong Low attachments Highest attachments

Buyer preference

Weak Lowest attachments High attachments

Source: Griffin, Jill (1995), Customer loyalty: how to earn it, how to keep it, New York,

Lexington Books, 21

NAOTO ONZO (1995)

Dick and Basu (1994) and Griffin

(1995)'s approach of categorizing customer

loyalty by behavioural loyalty and attitudinal

loyalty is supported by Onzo (1995). Another

two-dimensional model of behavioural loyalty

and attitudinal loyalty are used to define

customer loyalty by Onzo (1995).According to

Onzo (1995), store loyalty can be defined as a

commitment towards a certain specific store

which caused by the satisfaction with the past

purchase experience and the action of

repeatedly purchases of that specific store. Such

store loyalty can be further explained by

behavioural loyalty and attitudinal loyalty.

Behavioural loyalty means the action of buying

a specific store repeatedly. Behavioural loyalty

is considered to be high when a customer

purchases a specific store repeatedly. In

contrast, behavioural loyalty is measured to be

low if there is no consistence in the purchase

pattern. Attitudinal loyalty states that loyalty is

a state of mind which means a customer is

"loyal" to a store or a company if they have a

positive, preferential attitude toward it.

Customer loyalty is depending on the level of

loyalty presence in customer. It means that two

dimensional loyalty should be either low or

high. The loyalty is considered to be low when

both the levels of behavioural loyalty and

attitude loyalty are low.

SIMON KNOX (1995)

There is another similar model of

customer loyalty presented by Knox (1995).

Although the aim of this model is

originally used to explain store loyalty, it can

also apply on explaining customer loyalty. In

Knox (1995) ‟s store loyalty matrix, customer

loyalty can be divided into four different

categories: loyal, variety seekers, habitual and

switchers. From the figure below, both loyal

and habitual have high level of store support, in

the other word is high level of behavioural

loyalty. However, the level of store

commitment (attitudinal loyalty) is low for

habitual, therefore they are more likely to

defect to other stores if purchasing of their

routine is disrupted for some reasons. Loyal are

less likely to do this since their level of store

commitment is also high. Both variety seekers

and switchers are frequent defectors but their

motives are very different. Variety seekers are

loyal purchasers that are polygamous. They

simply buy form a wide portfolio of stores for

118

different usage occasions. Switchers, on the

contrary, are motivated by price deals and

promotional tactics which, in other words, with

no loyalty.

YOUJAE YI AND HOSEONG JEON

(2003)

The approach of using behavioural

loyalty and attitudinal loyalty to categorize

customer loyalty is further supported by Yi and

Jeon (2003). They also suggested that customer

loyalty can be classified into different types by

customers‟ attitude and repeated patronage.

They tried to correlate the concept of store

loyalty in the domain of customer loyalty

context.

For analysing impact of loyalty program

on customer it is important to analyse the level

of involvement by consumer in the particular

loyalty program. When the level of

involvement of the product is low, the value

perception of the loyalty program does not

mercenarily transform into store loyalty

because a customer is likely to derive value

from the loyalty program rather than from a

product. In this case, the target of loyal attitude

of the customers is to the program instead of a

store. On the other hand, since customers are

considered to be polygamous in nature,

customer loyalty could be divided into a

number of stores.

RICHARD L. OLIVER (1999)

According to Olivier (1999),

behavioural loyalty alone is not enough to

analysis customer loyalty. Further analysis is

needed to infer loyalty or disloyalty solely from

repetitive purchase patterns. These further

analysis needed to detect true store loyalty

requires researchers to assess consumer beliefs,

affect, and intention within the traditional

consumer attitude structure.

Cognitive loyalty

The first loyalty phase is cognitive

loyalty (loyalty based on store belief only)

whereas the store attribute information

available to the consumer indicates that one

store is more preferable to its alternatives.

Cognition can be based on prior or vicarious

knowledge or recent experience-based

information.

Affective loyalty

Under cumulative satisfaction, attitude

towards a store is developed in the second

phase. Commitment at this phase refers to

affective loyalty which is encoded in the

consumer‘s mind as cognition and affect. While

cognition is directly subject to counter-

argumentation, store loyalty in this phase is

directed at the degree of affect (liking) for the

store. This form of loyalty is still subject to

changes.

Conative loyalty

Conation implies a store-specific

commitment to repurchase while conative

loyalty use a loyalty state that contains what, at

first, appears to be the deeply held commitment

to buy noted in the loyalty definition. This

commitment is to the intention to re-buy the

store and is more similar to motivation.

Action loyalty

In this phase, the previous loyalty state

is transformed into readiness to act. This is

accompanied by an additional desire to

overcome obstacles that might prevent the act.

119

Action is perceived as a necessary result of

engaging both of these states. If this

engagement is repeated, action inertia develops,

thereby facilitate repurchase.

PHILIP KOTLER (2003)

Kotler (2003) suggested that customers

have various degrees of loyalty to specific

stores, stores, and companies. Therefore, buyers

can be divided into four groups according to

store loyalty status.

Hardcore Loyals (High customer

loyalty) who buy the same store all the time.

These people are the best target market. Soft-

core Loyal (Moderate customer loyalty) in

which consumers who are loyal to two or three

stores. These people are good for market

research. Shifting Loyal who move from store

to store. These people are good targets for a

niche market and finally, Switchers consumers

with no loyalty. They change products if they

see a good deal or if they are looking for new

things.

MARK D. UNCLES, GRAHAME R.

DOWLING AND KATHY HAMMOND

(2003)

After having a clearer picture of how

customer loyalty is categorized with the

composition of behavioural loyalty and

attitudinal loyalty by different researchers

mentioned above. They do changes in the

earlier research with changes the existing

model and introduce other factor for analysis

other than two dimensional models on

customer loyalty. Mark D. Uncles, Grahame

R. Dowling and Kathy Hammond tried to

define customer loyalty by different models

instead of combining behavioural loyalty with

attitudinal loyalty. According to Uncles,

Dowling and Hammond (2003), there is no

universally agreed definition of customer

loyalty. Instead, there are three popular

Under this model, customer loyalty is

defined attitudinally as an ―attitudinal

commitment‖ to store. These attitudes may be

measured by asking how much people say they

like the store, feel committed to it, will

recommend it to others, and have positive

beliefs and feelings about it – relative to

competing stores. This kind of loyalty is

measured by the frequency of store purchase

and number of repeat-purchase.

It is suggested that attitudinally-loyal

customers are much less susceptible to

negative information about the store than non-

loyal customers. Besides, when the loyalty to a

store increased, the revenue-stream from loyal

customers becomes more predictable and can

become considerable over time. The concept of

―attitudes define loyal‖ even extends to a

relationship between customers and some of

their stores. It is a relationship that will be even

stronger when supported by other members of

a household or buying group, and where

consumption is associated with community

membership or identity.

JENNIFER ROWLEY (2005)

Rowley (2005) suggested that it is not

only important to distinguish between loyal

and non-loyal customer, but also important to

segment customers who are already in the

loyal category. Therefore, she divided

customers who are both attitudinal and

behavioural loyal to the store into four

categories of loyalty orientation by

120

differentiates between positive loyalty and

inertial loyalty. According to Rowley (2005),

inertial loyalty on either attitudinal or

behavioural dimension is associated with

loyals who are neutral about their loyalty;

they are consistent in behaviour, but the fact

that they do not want to switch does not

indicate any affinity for the business or store.

The introduction of inertial loyalty and

positive loyalty aimed to yield some

categories which assist in thinking about the

nature of loyalty.

The model above proposed that loyals

can be segmented into four categories of

loyalty orientation: captive, contented,

convenience-seeker and committed.

Captive customers continue to

patronize a store, service, or service outlet

because they have no real choice.

Convenience-seeker in which customer in this

category exhibit a behaviour that includes

frequent re-purchase or visit to a store

location, but they are attitudinally inert.

Contented customers continue as a customer,

but do not extend their involvement with the

store. Each purchase made by customer in

this category is evaluated on its merits.

Committed customers in this category are

positive in both attitude and behaviour.

CONCLUSION AND JUSTIFICATION

Customer loyalty is divided in two state

of nature as behavioural and attitudinal

loyalty.Two dimensional model later on used

for the loyalty study. On the basis of different

theories on loyalty present study concludes that

loyalty is depend on relative attitude of

customers, demographics, attachment,

satisfaction, purchase experience, variety

seekers, habitual and switchers, level of

involvement, consumer beliefs, affect, and

intention, degree of loyalty and commitment

etc.It can be further elaborated that customer

loyalty has two dimensions and all the

determinant of customer loyalty falls between

behavioural loyalty and attitudinal loyalty.

REFERENCES

1. Day, G. S. (1969). A two dimensional

concept of brand loyalty. Journal of

Advertising Research, 9(3), 29–35.

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―Customer loyalty: toward an integrated

conceptual framework,‖ Journal of

Academy of Marketing Science, 22 (2),

101.

3. East, Robert, Phillip Gendall, Kathy

Hammond and Wendy Lomax, (2005),

―Consumer loyalty: singular, additive or

interactive?,‖ Australasian Marketing

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Redeemed (New York: Simon & Schuster,

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to earn it, how to keep it, New York,

Lexington Books, 23

6. Hart, Susan, Andrew Smith, Leigh Sparks

and Nikolaos Tzokas (1999), "Are Loyalty

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Marketing," Journal of Marketing

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Loyalty: Measurement and Management‖

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loyalty‖, Journal of Advertising Research,

Vol. 11 No. 3, pp.25-31.

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9. Kahn, B., Kalgan, M., and Morrison, D.

(1988), "Inching versus change-of pace

brands : using purchase frequencies and

penetration rates to infer brand positioning".

Journal of Marketing Research, 25, 4,

pp.384-90.

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deference: can brand management stop the

rot?‖ Marketing Intelligence and Planning,

14 (4), 36

11. Kotler, Philip (2003), Marketing

management, Eleventh Edition, New Jersey,

Prentice Hall, Inc.

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Behavioural Perspective on the Consumer,

McGraw- Hill, New York, NY.

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consumer loyalty?,‖ Journal of Marketing,

63 (special issue), 36

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senryaku : tajigenkasuru seichoryoku no

gensen,‖ Tokyo, Nihonkeizaishinbunsha,

p.55

15. Reichheld, F.F. (1994), ―Loyalty and the

renaissance of marketing‖, Marketing

Management, Vol. 2 No. 4, pp. 10-21.

16. Rowley, Jennifer (2005), ―The four Cs of

customer loyalty,‖ Marketing Intelligence

and Planning, 23 (6/7), 576

17. Schiffman, L. G., & Kanuk, L. L. (2004).

Consumer behaviour (8th Ed.). New York:

Prentice-Hall.

18. Taylor and Timothy B. (1998), ―Better

Loyalty Measurement Leads to Business

Solution‖, Marketing News, Vol.32 Issue

22 pg 4.

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Loyalty," Journal of Marketing Research, 1

(August 1964), 32-5.

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Kathy Hammond (2003), ―Customer loyalty

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Consumer Marketing, 20 (4), 296.

122

A Paradigm Shift In Human Resource Management

Practices: Exploitation To Encouragement

Dr. Pralay Kumar Ghosh

Director, Suryadatta Institute of Management, Pune

ISBN: 978-93-81791-28-8

ABSTRACT

Today, the Indian workplace is changing dramatically and largely becoming a fun place. All

these are due to new and newer creative human resource practices adopted by organizations. The

purpose of this paper is to analyse how these practices have evolved over the years and transformed

from exploitation to encouragement and what are the triggers. The methodology followed is

exploratory research and the data produced and published by Great Place to Work Institute for ‗India‘s

Best Companies to Work‘ for the years 2008-2013, have been used for this paper. The analysis reveals

that from Google India Pvt. Ltd., the number one ranked best company to work for to other top ranking

companies in the list have all revolutionized HR practices and the overall environment has changed

much for the better with lots of encouragement. These changes were not natural but circumstantial in

the context of the rapidly changing business environment.

KEYWORDS

Great Place, Change, Culture, HR Practices

INTRODUCTION

Over decades, practices in Human

Resource Management have changed in

corporates progressively in tune with changes

in the Business Environment.

The characteristics, which existed

decades back and the ones that exist today are

perhaps, radically different – a transition from

somewhat exploitation to encouragement!

Some of the triggers are population growth and

progress, changes in the quality of workforce,

education, exposure, access to information &

technology, Liberalization, Privatisation and

Globalization dynamism in the economy, to

name a few. The new characteristics

necessitating changes at the workplace and

emergence of ―classes from masses‖ - a talent

pool, that is today much aware and has

"options". Coupled with this, changes in

business policy and strategy like Mergers,

Acquisitions and Takeovers are also influences

on the change observed at the work place

(Weber, Yaakov et al, 2012). Therefore, it now

takes a different management style to perform

123

in different circumstances and generation of

people. This leads to it being challenging.

LITERATURE REVIEW

It is evident from the available literature

that the evolution of the Personnel Policies in

India from domestic to a global player dates

back to three phases: Post independence, Post

Economic Reforms and Post the Information

Technology Revolution (Ghosh, 2011). The

past sixty years has seen Human Resource

functions evolve from being procedural in

nature to that of a behavioural one. Fast

changing dynamic business environment

pushing Indian organizations to pursue more

rationalized HRM practices which is solely

based on performance and less influenced by

the traditional values, religious and political

factors (Som, 2006). In response to the on-

going restructuring, every business organization

crafted and continues to draft a set of its own

human resource practices based on its

applicable policy and situation (Murthy, 2010).

Innovation in HR means innovation in each of

its process - be it recruitment, rewards and

recognition, motivation, cost effectiveness,

competency building or training and

performance appraisal (Pallavi and Mishra,

2010).

Nevertheless, there is a scarcity of

relevant and robust empirical evidence to guide

both researchers and practitioners in this regard.

While the issue under research is of great

relevance today, one does not find enough

variety in its available literature. However, a

distinct observation for HR has been the

challenging demand on this function in light of

the changes in the economy and advent of

better technology. Today, there exist several

public forums that keep sharing different

practices in this fraternity. This change has

been triggered by a change in the world

economy. Access to technology did not demand

enough manual labour and called for a different

orientation & learning. With its growing

significance and importance, HR has therefore

become a highly networked fraternity as a

profession worldwide. Owing to this today

there are an array of studies, surveys and

materials for further research.

OBJECTIVES

The objective of this paper is to analyse how

HR practices have evolved and what still exists

as exploitations along with new good HR

practices which are likely to usher in 2014 as

encouragement.

METHODOLOGY

The methodology followed is

exploratory research which is based on

secondary data. The exploratory approach

attempts to discover general information about

a topic that is not well understood by the

researcher. While gaining insight (i.e.,

discovery) on an issue is the primary goal,

exploratory research is used. For example, just

because we know that many Great Places to

Work exist, it does not necessarily mean that

we understand what HR practices they follow.

DATA

Data used for this paper has mostly been

collected from published research studies &

surveys along with personal corporate

networking with authors.

124

Over two decades, the Great Place to

Work Institute, USA, conducting surveys to

advance the knowledge of what makes a Great

Place to Work. Every year the Institute's list of

Best Employers is published in the Fortune

magazine and the Financial Times in the US

and UK respectively, and in 29 countries

globally

In India, for the years 2008-2013,

‗India‘s Best Companies to Work For‘ list was

produced by Great Place to Work Institute,

India as a special supplement in the leading

Business daily newspaper in India, The

Economic Times and for the earlier years 2003

to 2007 In India the list was published every

year in Business World.

This paper has the top ten companies

studied for analysis and the list is enclosed as

Annexure 1.

The top 10 list of companies reveals that

Google India Private Limited was ranked four

times (different spots), Intel Technology India

Private Limited thrice, Forbes Marshall twice,

NIIT thrice, NTPC Limited thrice, etc. all in a

span of last 5 years.

ANALYSIS

The analysis has been carried out to find

out what has made these 10 companies be

tagged as ―Best Company to Work‖ or ―Great

Place to work‖ from a HR practice point of

view. Apart from this, the paper also analyses

few other companies that have great HR

practices.

The analysis of data and information

shows that changes over the years can be

attributed to both external and internal factors.

Several changes have been adopted through

widespread awareness and knowledge building.

The beginning notable transformations include

change in the leadership styles, which were

earlier inherited from the British Government

and then shifting focus from personnel

management to human resource development.

This change was not natural but circumstantial

in the context of the operating economy, as

penned down below:

i) Culture

The employees of the number one

company Google India Pvt. Ltd feel that the

company has the world's most successful

corporate culture. Another company, NTPC

Ltd. creates a culture where people enjoy

working. Blue Dart Express has a strong culture

of communication spearheaded by the top

management. In fact, a distinct component of

culture is omnipresent in all these great places

to work.

No doubt that Culture is a competitive

advantage and it has transformed from a ‗nice-

to-have‘ to ‗must have‘ (Hay Group, 2013). HR

practices are enablers to building a credible

culture. Culture is company‘s best competitive

advantage, be it in attracting people, retaining

customers and creating a brand name and

reputation in society. This onus lies on HR as

they are the central custodian of people‘s

behaviour and attitudes, which determines the

way the organisation is perceived. Each

company has a unique way of doing things that

defines its culture. However, this culture needs

to be propagated through desirable values and

behaviours. The more an organisation adopts to

a ―common‖ culture, which is easy for people

to adjust, the better is their performance. People

come from different families and cultures. Each

family has a different upbringing. These

characteristics, therefore, inculcate behaviour.

125

It is therefore the responsibility of the

organisation to interact across geographies in

understanding different local cultures, before

defining its own. Once implemented, this

evolves and then an ambience and atmosphere

around it is created. Primarily organisations

compare on Culture. Typically, no two

organisations have the same culture due to

varying people, varying management styles and

business objectives. Not every organisation is

created for one purpose but it is different intents

that determine the culture of the organisation.

The company ―Google‖ always promoted

Innovation by giving its members a certain

percentage of time to spend on projects they

passionately feel about and wish to nurture.

Similarly there are other organisations that have

decentralised decision making, which

empowers its people to do more and be

accountable for the decision they make. Since

culture can be created as well as destroyed,

managing culture across countries can be

particularly challenging for global

organizations.

Encouraging innovation and trying at

the workplace is very important and forms part

of a great company‘s inherent culture. Members

fear to take risks and pursue initiatives because

of fear of failure. However, companies like

Schmidt and Forbes Marshall (Ghosh, 2014)

encourage that these failures occur and that

trying is rewarded rather than not trying at all.

ii) Empathy and Care:

All these companies primarily focus on

employees – basically all initiatives and

practices revolve around people. 'People First'

philosophy helps Blue Dart Express in retaining

talent. American Express has one of the

strongest retention rates in the financial sector

due to the initiatives all about caring for the

employees' personal relationships and health.

Google celebrates its employees in more ways

than one. At Intel, bosses make sure personal

life does not take a backseat. All this shows

empathy towards people, which keeps the

morale high.

iii) Diversity

Diversity is an opportunity in Human

Relations (HR) practice (Chukwunonso,

Franklyn (1995). Diversity brings in ―Variety‖.

Modern management has specialisations that

were unheard before. Specialisation has given

the opportunity to dive deeper into a particular

skill set and benefit maximum out of it. This

has helped take different professions to achieve

new heights and feet, be it Media,

Communications, Supply Chain, Strategic

sourcing, Maintenance, Application

development, etc. All this has helped exploit

technology, which is a change from exploiting

people in the past towards encouraging people.

Companies such as Microsoft and IBM have

Diversity as a Key Result Area (KRA) of the

Top Leadership Team

(hrmknowledgeplatform.blogspot.in).

iv) Globalisation and advent of data and

technology orientation

Globalization has got people from

different geographies together. This is an

outcome of the 1980‘s and 1990‘s when the

economy opened up with the WTO agreement.

Further to this, India saw an era of mergers and

acquisitions and integration with conglomerates

across continents. This change called for a

different dimension in human resource

management. An angle of integrating different

cultures, aligning them to a common goal and

outlook. The onus of this fell on the leadership

of the firms along with HR professionals. This

demanded a separate training ground and

126

exposure. The HR professional today is more

culturally sensitive and helps adopt different

cultures from different nationals to integrate

them into the organisational goal, while

companies continue to achieve progress. It is

not practical for a line Manager to always work

on such factors, but HR‘s core job is to look at

these factors all the time and implement best

practices. Google has the Algorithmic selection

process of forecasting people retention,

assessing characteristics and predicting

performance. This is not left alone, given that

data alone only gives the ―as is‖ position. They

help that know and identify how to intrude and

probe further in making a logical and near

correct decision. Parallel the practice of having

one on one meeting with necessarily all people

in the team by Managers (and not just top or

low performers) is treated with equal

seriousness.

v) Women at the workplace

Google provides extra benefits to new

mothers by giving five months off at full pay

and full benefits; they were allowed to split up

that time however they wished, including

taking some of that time off just before their

due date. If she likes, a new mother can take a

couple months off after birth, return part time

for a while, and then take the balance of her

time off when her baby is older. Plus, Google

began offering the seven weeks of new-parent

leave to all its workers around the world.

NIIT was one of the first in the country

to give dating allowances in the nineties

targeted at their predominantly young

workforce.

Further, professionalization of HR

function has facilitated the development of best

practice in HRM.

Cummins in India (part of Cummins

Inc, US) has specifically aimed at raising the

ratio of women in leadership positions over the

last few years

(hrmknowledgeplatform.blogspot.in).

P&G in India worries about career

progression of people and especially women, as

part of the CEO‘s key agenda in their goals.

The Chairman of the TATA group,

Cyrus Mistry‘s perspective is that women bring

in a different perspective in their management

style, which is complementary to men. This is

seen in practice today with women in

leadership positions in various Tata companies

(Times of India, 2013).

FINDINGS

From the above, perhaps, following

parameters emerges as important ones that are

responsible for change in HR practices:

Corporate Culture, Empathy and Care, Diversity,

Globalisation and advent of Data and technology

orientation and Women at the workplace. Some

of the visible practices, then and now, can be

summarized as below:

127

CONTEMPORARY PRACTICES THEN CONTEMPORARY PRACTICES NOW

Simple appraisal system (on paper and

procedural)

Performance management systems (receiving

and sharing feedback – 360 Degree)

Recruitment through traditional methods On line recruitment and use of Social

Networking sites

Promotion mainly based on Seniority Promotion based on Merit and Performance

Slow Career Growth Accelerated Career Growth

Mostly same job with enhanced

responsibilities till retirement

Job rotations

Fixed Timings Flexible Timings

Limited Training & Development Lots of training & development

Little scope of experimentation Opportunities to Collaboration and Innovate

Exploitation to a great extent Encouragement and dignity of labour

Manually driven Technology and Data driven

Simple Compensation structure – mostly

fixed component

Expanded Compensation structure – more

towards variable- Participating in sharing of

company profits

Based on one time qualification acquired and

test it throughout the career

Regular enhancement of qualifications,

Skill and competency building,

Value based learning,

Mentoring,

Applying a variety of modern tools available

for employee engagement.

Mostly promotions from within Lot of importance on Leadership

Development and Succession Planning

Lack of appreciation for exceeding

performance

Rewards and Recognition

Limited job pressure and stress Fitness and health a priority with more

stressful jobs and long working hours

Joint family – balanced work life Nuclear Family – Pressure on Work-life

balance

Local Business Environment – no issue on Globalized Business Environment – cultural

128

culture issues more prominent

More or less single business strategy Rapid Change in business strategies

Conservative growth by firms Higher aspirations and expectations

Manageable number of people in the

organisation

Managing large numbers

Culture and Employee Engagement

Recruitment through references Talent Acquisition and On boarding

Mostly family run businesses Increasing professionally run businesses

Single location or within the nation Multiple locations and even across continents

LIMITATIONS/SCOPE FOR FUTURE

RESEARCH

A topic for further research is to know

how a company evolves a policy that could

work towards building the morale of an

employee. What is that ―inflection point‖, when

these policies are formulated? A good case to

actually research by interviewing people across

the top 50 companies that get rated as the best

places to work and then analyse the inflection

points determined by the top management on

why they adopted a certain policy and the

philosophy behind such policies.

CONCLUSION

HR has become more relevant as a

function for the People. With People and Skills

ever evolving, the function has had no choice

but to change. The influence of this function on

the business was limited as it was concerned

with paying people on time, negotiating labour

contracts and arrangements and above all look

after the welfare of the people. While all of

these still exist, it is simply not the only

functions of HR. Today, HR is linked with the

Business environment; it is linked with

people‘s changing skills and talent

requirements. Why this change? Earlier issues

such as salary and wage disbursement needed

much administration. Today, these are

―services‖ that can be outsourced. The HR

function has more thinking than execution and

they exist to do things, which no other function

would spend time on doing. As such, they

remain niche to every other function in the

organisation and are expected to be custodians

of people‘s interests. Good HR practices

helping organizations to attract talent and

controlling retention.

More and more companies would likely

to follow current contemporary HR practices in

coming years recognizing the potential benefits

and value they offer. Recruitment through

Social Media Network would rise. Google HR

practices would become ―Success Mantra‖ for

corporate thereby placing application of data

driven decision making for HR function and

opening up immense opportunities for data

analytics. The other new emerging practices,

that come from reputed Indian firms like

Mahindra‘s, Infosys, Tata‘s, Forbes Marshall,

etc. would base on employee friendly policies

such as fun at work, flexible working hours,

compensation to be linked with performance

and incentives, stock options offer that enable a

129

person to realise their direct contribution to the

profits of the company, work from home,

regularly upgradation of educational

qualifications, encouraging sports and fitness in

general, promoting creativity and innovation at

the workplace with full access to organisation‘s

resources, and practices of reverse mentoring

from Junior‘s to Senior‘s. Women centric

practices would open up more work

opportunities for them for concessions;

facilities and enabling environment new age

perspective management style.

Though exploitation continues, in areas

where people are not so aware and informed

about the ―right‖ practices, the overall

environment has changed much for the better

with lots of encouragement. In the Indian

context this syndrome is still driven by a

complex of looking at subordinates with limited

skills and lower amount of faith instilled in

them with lack of appropriate delegation

(Sparrow and Budhwar, 1997; Budhwar and

Khatri, 2001). In the present times, Businesses

are looking beyond profitability, growth and

shareholder value enabling a greater purpose of

existence. All these changes and evolution shall

help shape a better workplace and in turn help

the Indian economy prosper in a fair and

transparent way. While routine HR functions

like recruitment, selection, training &

development, performance appraisal and

compensation management continues in most

of the companies what has changed are

practices in each of these components driven by

the companies in the list of Great Place to work.

REFERENCES

1. Budhwar, P., & Khatri, N. (2001). A

comparative study of HR practices in

Britain and India. International Journal of

Human Resource Management, 12(5), 800-

826.

2. Business World (2003-2007), ―India‘s Best

Companies to work for‖, Great Place to

Work Institute, Survey Reports

3. Chatterjee, S. R. (2007). Human Resource

Management in India: ‗Where From‘ and

‗Where To?‘ Research and Practice in

Human Resource Management, 15(2), 92-

103.

4. Chukwunonso, Franklyn (1995), The

development of human resource

management from a historical perspective

and its implications for the human resource

manager, Department of Information

Technology, Federal University of

Technology, Yola

5. Ghosh, Dr Pralay Kumar (2011),

―Revolutionizing people practices in

organizations‖, paper presented at a

National Conference on Contemporary HR

Practices for People Management, held at

Karpagam College of Engineering,

Coimbatore on 4th

November

6. Ghosh, Pratik (2014), (Senior Manager,

Forbes Marshall India), a personal

conversation on 2nd

January, 2014.

7. Hay Group (2013), The cultural advantage:

World‘s Most Admired Companies

8. hrmknowledgeplatform.blogspot.in

9. Murthy, S. (2010), ‗Trajectory towards

high performance works systems‘, HRM

Review, Vol.X, Issue-II, February, pp. 48-

51.

10. Pallavi, and Mishra, A.K. (2010),

‗Innovative HR practices by organizations

across different sectors‘, HRM Review,

Vol.-X, Issue-V, May, pp.10-18.

11. Som, A (2006). "Bracing MNC

Competition through Innovative HRM

practices: The Way Forward for Indian

130

Firms", Thunderbird International

Business Review, 48(2): 207-237.

12. The Economic Times (2008-13), ―India‘s

Best Companies to work for‖, Great Place

to Work Institute, Special Supplements

13. Times of India (2013), Cyrus Mistry wants

more women in leadership roles in Tata

group, June 24

14. Weber, Yaakov, Dalia Rachman-Moore and

Shlomo Yedidia Tarba (2012), HR practices

during post-merger conflict and merger

performance International Journal of Cross

Cultural Management April1,

2012 12:1 73-99

http://ccm.sagepub.com/content/12/1/73

Annexure 1

RANK 2003 2004 2005 2007 2008 2009 2010 2011 2012 2013

1 Texas

Instru

ments

Fedex

Corporatio

n

FedEx

Corporati

on

RMSI

Private

Limited

RMSI

Private

Limited

RMSI

Private

Limited

Google

India

Pvt. Ltd.

Google

India

Pvt. Ltd

Googl

e India

Pvt.

Ltd

Google

India Pvt.

Ltd

2 Fedex

Corpor

ation

Texas

Instrument

s

Sapient

Corporati

on

Classic

Stripes

Private

Limited

Marriott

Hotels

India

Pvt. Ltd.

Intel

Technol

ogy

India

Pvt Ltd

MakeM

yTrip

(India)

Pvt. Ltd.

Intel

Technol

ogy

India

Pvt Ltd

Intel

Techn

ology

India

Pvt Ltd

Intel

Technolo

gy India

Pvt Ltd

3 Johnso

n and

Johnso

n

NTPC NTPC Google

India Pvt.

Ltd

Google

India

Pvt. Ltd

Federal

Express

Corpora

tion

Intel

Technol

ogy

India

MakeM

yTrip

India

Pvt. Ltd

NTPC

Ltd

American

Express

4 Eli Lilly

Computer

Sciences

Corporatio

n india(P)

Ltd

Honeywel

l

Technolo

gy

Solutions

Lab Pvt

Ltd

Federal

Express

Corporatio

n

Agilent

Technol

ogies

Aviva

Life

Insuranc

e Co

India Ltd

Marriott

Hotels

India

America

n

Express

Make

MyTri

p India

Pvt.

Ltd

NIIT Ltd

5 Philips

Softwa

re

Centre

Mind Tree

Consulting

Pvt. Ltd.

RMSI

Private

Ltd.

Marriott

Hotels

India Pvt.

Ltd.

Classic

Stripes

Private

Limited

Google

India

Pvt. Ltd.

NetApp

India

Pvt. Ltd.

Marriott

Hotels

India

Forbes

Marsh

all Pvt.

Ltd

Forbes

Marshall

Pvt. Ltd

131

6 GCPL Sasken

Communic

ation

Technologi

es Ltd.

JW

Marriott

Hotels

India Pvt.

Ltd.

Mumbai

Mind Tree

Consulting

Pvt. Ltd.

America

n

Express

Qualco

mm

India

Pvt. Ltd

America

n

Express

Classic

Stripes

Pvt. Ltd

Americ

an

Expres

s

NTPC Ltd

7 Wipro-

Spectr

amind

Godrej

Consumer

Products

Ltd

CSC NTPC Ltd.

Cadbury

India Ltd

Marriott

Hotels

India

Pvt. Ltd

NTPC

Ltd

Scope

Internati

onal

Pvt. Ltd

Marrio

tt

Hotels

India

Pvt.

Ltd

Ujjivan

Financial

Services

Pvt. Ltd

8 Nokia Intel

Technologi

es India

(Pvt.) Ltd.

Sasken

Communi

cation

Technolo

gies Ltd.

SAP Labs

India Pvt.

Ltd.

NTPC

Ltd.

America

n

Express

PayPal

India

Pvt. Ltd.

Agilent

Technol

ogies

Intuit

Techn

ologies

Servic

es Pvt

Ltd

MakeMyT

rip India

Pvt. Ltd

9 Birla

Sun

Life

Insura

nce

Sapient

Corporatio

n

Mind

Tree

Consultin

g Pvt. Ltd.

American

Express

Service

Center

GCPL Network

Applianc

e

Systems

Pvt. Ltd

Ajuba

Solution

s India

Pvt. Ltd

Claris

Lifescien

ces Ltd

Qualco

mm

India

Pvt.

Ltd

Marriott

Hotels

India Pvt.

Ltd

10 Cadbu

ry

India

Honeywell Dabur

India Ltd.

Freescale

Semicondu

ctors Pvt.

Ltd.

Hilti

India

Pvt. Ltd.

NTPC

Ltd.

SAS

Institute

(India)

Pvt. Ltd

NetApp

India

Pvt. Ltd

NIIT

Ltd

Blue Dart

Express

Ltd

132

A Study On Effective Stress Management In Tirumala

Enterprise Pvt. Ltd, Pune

Prof. Archana Suryawanshi

ISBN: 978-93-81791-28-8

ABSTRACT

Stress management often involves controlling and reducing the pressure or the tension which

occurs in stressful situation which ultimately leads to emotional and physical changes. The purpose

behind the study was to find out the reasons behind the stress and also to get the factors affecting stress.

The research paper focuses on exploring the reasons for the stress and studies the various patters which

are responsible for the stress. The researcher uses the chi square test for the study have100 respondents

selected randomly. While studying some findings was there was link between the marital status and the

job stress. And second was the no link between the income of the employee and the job stress.

KEYWORDS

Physical stress, emotional stress, socio- economic variables

INTRODUCTION

Stress has been a major problem in any

organization. There are various causes and

techniques used for managing the stress.

Stress is an emotion that is affecting on the

physical as well as mentally on the human

being. Emotional stress occurs when people

think a situation which is difficult to complete

the task. People may think stressed in various

situations. Physical stress is a stress which has

direct effects on the body of the human being.

The physical stress may lead to the emotional

stress and vice versa.

INTRO OF THE COMPANY TOPIC

Trimula Enterprise Pvt. Ltd is situated

in Pune which is a facility management services

provider company. The company has 200

employees working in the organization. The

organization consists of experienced staff and

recruits the candidates and then sending them to

their clients. Due to a lot of work load in the

organization people are not even getting the

weakly off so people are stressed at the

workplace.

RESEARCH METHODOLOGY

The researcher has adopted various

dimensions of stress management in Daulat

Agro India Pvt. Ltd. Pune and its association

133

with various socio-economic variables. The

researcher has adopted research design which is

descriptive method.

STATEMENT OF THE PROBLEM

Stress is very important aspect to study.

This has impact on the profits of the

organization and also the growth of the

organization. The stress at workplace can affect

their personal relation also. The work place is

the challenging where jobs are assigned to

individual and they are needed to work

according to it. Many factors are responsible for

the job stress and so there arises a problem.

OBJECTIVES OF THE STUDY

1. To study whether there is an association

between the marital status, income level

, gender with the job stress.

2. To study various behaviour pattern of

employees working in the organization

3. To study various techniques adopted to

reduce the stress.

HYPOTHESIS

1. There is no association between the

marital status and job stress

2. There is no association between the

income level and the job stress.

3. There is no association between the

gender and the job stress

UNIVERSE, POPULATION AND SAMPLE

Population for the study was 300

employees working in the organization. The

questionnaire distributed to all the employees

working in the organization. From the whole

population only 200 employees responded to

the questionnaire, so 100 selected responses

were used as the sample size for the study.

Therefore simple random technique was used

for the study.

TOOLS FOR DATA COLLECTION

The research collected data from both

primary and secondary data. The primary data

was collected from the respondents by

distributing well-structured questionnaire. The

secondary data is collected from the annual

reports, journals, previous researches etc.

STATISTICAL TOOLS

The tools used for the study are chi

square which is used to test the hypothesis. To

analyse the results the SPSS version 20 is used.

Data was analysed and output is generated

accordingly.

LIMITATIONS OF THE STUDY

The sample size of 100 respondents

were used which was very small so results

analysed may vary compared to the population.

LITERATURE REVIEW

Selye (1950) defined the stress often

without exactly specifying what is meant it is

often seen as ―Umbrella Concept‖ i.e. an

unspecific and general concept, indicating a

field of research where many different topics

have been studied. (Buunk, de Jonge, Ybema,

de Wolff, 1998). States as the changes, work

dissatisfaction, mental disorders, sexual

134

problems, absenteeism, violence and even

accidents. Beer and Mcgrath (1992) wrote the

stress as stress producing events and conditions.

Warr (1994) has presented five main

components of mental health in Western

societies: a) affective well-being, b) degree of

competence, c) level of aspiration, d) level of

autonomy and e) basic functioning. But he

pointed out that in occupational research the

first three aspects usually receive most of the

attention, and in his own research three facets

are mentioned: depression, anxiety, and job

satisfaction (Warr, 1990).

HYPOTHESIS TESTING

1. There is no association between the marital status and job stress

Job Stress

Marital

Status

Status Strongly

Agree

Agree Neither

agree nor

disagree

Disagree Strongly

Disagree

Total

Single 3 3 11 4 4 25

Married 14 36 4 16 5 75

Total 17 39 15 20 9 100

Source: primary data

Degrees of freedom = 4

Chi- Square Value= 22.711

Table Value = 9.5

Results

Since X^2 value is greater than the table value, the null hypothesis is rejected. Hence, there

exists an association between Marital Status and stress in the job.

2. There is no association between the Income and job stress

Job stress

Income

Status Strongly

Agree

Agree Neither

agree nor

disagree

Disagree Strongly

Disagree

Total

10000-

15000

13 8 3 2 6 32

15000- 16 4 2 3 9 34

135

20000

20000-

25000

3 10 6 0

2 21

25000-

30000

3 5 0 0 1 9

30000-

above

2 1 0 1 0 4

Total 37 28 11 6 18 100

Source: primary data

Degrees of freedom = 16

Chi- Square Value= 17.10

Table Value = 26.3

Results

Since X^2 value is less than the table value, the null hypothesis is accepted. Hence, there exists

no association between income of the employee and job Stress.

3. There is no association between the gender and the Job stress.

Job Stress

Gender

Status Strongly

Agree

Agree Neither

agree nor

disagree

Disagree Strongly

Disagree

Total

Male 17 39 15 17 7 95

Female 0 0 1 3 1 5

Total 17 39 16 20 8 100

Source: primary data

Degrees of freedom = 4

Chi- Square Value= 3.8

Table Value = 9.5

RESULTS

Since X^2 value is less than the table value, the

null hypothesis is accepted. Hence, there exists

no association between gender and job Stress.

FINDINGS

1. The study shows that there is a job

stress in which it was found that there is

an association between Marital Status

and stress in the job. It is found that

136

married people have a lot of

responsibilities at their personal and so

it affects the professional life due to it.

2. The second finding was that there exists

no association between income and job

Stress. The chi square value is 17.10 in

which the affect of the income of the

employee on the job stress.

3. There exists no association between

gender and job Stress. This was the third

finding which has no associated relation

between the gender may be male or

female on the job stress.

CONCLUSION

The organization stress is due to the

imbalance between the work life and the

personal life. The work stress sometimes

becomes very tough job to handle it. Some

employees handle stress by neglecting the other

problems but some can‘t handle the stress then

this impact on the physical as well as

emotionally to get through it. While studying

the researcher noticed that the marital status has

an impact on the job stress which ultimately has

effect on the mind of the employee.

SUGGESTION

There are various techniques used for

handling stress those are as follows:

1. To find out what is the base of stress and

then finding the reasons behind and getting

out some conclusion to solve the problems

at work place.

2. Doing some quick yoga exercises which

relieves you from the stress at the

workplace when there is shortage of oxygen

then yoga helps to reduce the stress.

3. Always separate the professional life with

your personal life because both will get

hampered if the any one is affected. So keep

both aspects balanced that will definitely

help to cope with the stress.

BIBLIOGRAPHY

Websites:

1. http://www.slideshare.net/hemanthcrpatna/a

-study-on-stress-management-of-

employees-at-syndicate-bank

2. http://www.nlm.nih.gov/medlineplus/ency/a

rticle/001942.htm

3. http://voices.yahoo.com/7-ways-deal-

workplace-stress-difficult-11027160.html

4. http://www.helpguide.org/mental/work_stre

ss_management.htm

Books:

1. Performance Under Pressure: Managing

Stress in the Workplace (Manager's Pocket

Guide Series) Heidi Wenk

Somaz (Author) , Bruce Tulgan (Author)

page no 52-75.

2. Job stress by James H. Humphrey ( 1998).

page no. 39-65

3. Handbook of Work Stress by Julian

Barling, E. Kevin Kelloway, Michael R.

Frone. (2005) page no. 7-30.

137

Role Of Financial Institutions For Economic

Empowerment Of Women

Prof. Priyanka Bobade

Asst. Professor, Marathwada Mitra Mandal‘s Institute of Management Research & Training Center,

Deccan, Pune

&

Prof. Revati Balutkar

Asst. Professor, Marathwada Mitra Mandal‘s Institute of Management Research & Training Center,

Deccan, Pune

ISBN: 978-93-81791-28-8

ABSTRACT

Entrepreneurship amongst women has been a recent concern. Women have become aware of

their existence their rights and their work situation. Objectives of the study are to identify the role of

financial institutions for the empowerment of women entrepreneurship development, to study the

socio-economic dimensions of women entrepreneurs, to find out the motivational and facilitating

factors of women entrepreneurs, to assess the dual role conflict between work and home among women

entrepreneurs. Government and NGOs should promote small and medium enterprises of women with

the support of constant counselling by special team members to help the aspiring women to identify

their projects is needed. Since implementation of planning in India, several policies and approaches

were made to reduce inequalities between women and men. As a result a shift from ―welfare‖, to

―development‖ to, ―empowerment‖ to ―human development‖, approaches has taken place to change the

position and status of women.

KEYWORDS

Empowerment, NGO, Socio-economic dimension

INTRODUCTION

India‘s Eleventh Five Year Plan (2007-

12) has recognized for the first time that women

are not just as equal citizens but as agents of

economic and social growth. The approach to

gender equity in the plan is based on the

recognition that interventions in favor of

women must be multi pronged and they must

provide women with basic entitlements to

address the reality of globalization and ensure

an environment free from all forms of

138

discriminations, disparities deprivations and of

violence against women. India has committed

to facilitate the Millennium Development Goals

(MDG) and is a signatory to many International

Conventions, including Convention for

Elimination of all forms of Discrimination

against Women because any development

strategy will be lop sided without involving

women who constitute half of the world

population. All developing countries today,

focusing on the need for development of

women and their active participation in the

mainstream of development process. It is also

widely recognized that apart from managing

household, bearing children, women are going

out for earning income from traditional work in

the fields to working factories or running small

and petty enterprises. They have also proven

that they can be better entrepreneurs and

development managers in any kind of human

development activities. Therefore, it is

important and utmost necessary to make

women empowered in all spheres of

development process. The empowerment of

women also considered as an active process

enabling women to realize their identity and

powerful in socio-economic development. The

Financial Institutions by virtue of their long

experience and expertise are in a better position

to play the promotional role in the economy.

Financial Institutions can also undertake what

William Diamond, the World Bank Economist

calls ―Direct Efforts‖ in the sense that the

efforts are directed toward achieving the

specific objectives of the Government from

time to time. Women need special attention to

realize their potentialities and effective

participation in decision making process at

home, community governance and work place.

This conductive environment should include

basic amenities such as better health and

nutrition, education sensitization on their rights

and protective laws, employment opportunities

and expansion of income generating activities,

etc. Globally the gender equalities are playing a

major role impeding progress towards the

poverty reduction. Women are generally

involved in productive work but lack of

resources or assets they are not performing their

roles effectively. The patriarchal systems of

society and power conflict in the family

structure made them to struggle with

powerlessness. The Government Policy to

encourage Small and Cottage industries

emerged as an important strategy for

development bankers geared themselves to this

task and give priority to development of

economically backward people and provide

concessional finance as well as special efforts

are made to encourage entrepreneurship. The

creation of enterprise is, no doubt, costly and

expensive and the return will be delayed and

meagre especially in the early stages. But these

are the risks which are to be undertaken by any

entrepreneurs along with the financial and

moral implications of it. As the future belong to

real entrepreneurs, those competent and capable

enough to face the challenges of increased

competition, decline of protected markets new

technologies and foreign collaboration will

survive. Education is a strong interventional or

influencing media that sets values, develops

attitudes and creates drive in people towards

professional and vocational directions,

perceptions; motivation and awareness

combined together propel mass to acquire skills

and competencies to achieve goals with

determination. Entrepreneurship development

among women is an empowerment strategy to

promote income generating enterprises which

generate sufficient livelihood and economic

sustenance to family income. As a result the

women are often more vulnerable to poverty

than men. To overcome these challenges,

139

barriers and existing disparities the women

must acquire capabilities, skills, and capacities

on the one hand and self-confidence, self-

identity and self-esteem on the other hand. The

process of motivation, risk bearing, leadership

qualities with economic sustenance is the

crucial root for empowerment. The Indian

woman is often an object of admiration by

people both in and outside the country for the

role she plays in the country‘s public life and as

well as for certain qualities that she seems to

possess in greater measure than women of other

parts of the world. There are a number of socio-

religious customs and rituals, which affect very

much the social, economic and cultural status of

women in India. The change in the socio-

economic position of women in India is a

welcoming feature, even though it causes some

disturbances in the traditional society. In Indian

society, woman‘s place has been primarily

confined to the home and her role is limited to

procreation, rearing of children and catering for

the needs of men folk by way of creature

comforts. Women perform multiple duties by

combining all types of household work

including child care and such other jobs as

farming, animal husbandry, participation in

household or cottage industry, etc. depending

upon the opportunities offered by the

traditionally determined economic and

institutional structure (Sawant. D.D. 1981).

Women‘s role has been ignored, though they

contribute substantially to the progress of a

country. Women-folk is the driving force not

only in reshaping the socio – economic fabric

of a community but also built up strong

economic structure. Women can make equal

contribution with that of men, in various

spheres of activity. But, the society deliberately

kept away this segment of human resource from

the process of development. A retrospective

view of women in Indian society gives a precise

idea of the status they were assigned in the past.

UPLIFTMENT OF WOMEN

The movement for the liberation of

women received a great stimulus from the rise

of the militant national movement in the

twentieth century. In the first quarter of the

present century Mahatma Gandhi and many

other enlightened men and women had worked

for the upliftment of women. It was left to

Gandhiji to give direction, strength and

inspiration to all embracing national movement,

which was to draw into its vortex women in

large numbers. Gandhiji‟s message offered to

the women of India an opportunity to break

away from the past with all its frustrations.

What is more, Gandhiji by linking women‘s

participation with economic rehabilitation and

social reform gave the much-desired content to

their participation (Menon, 1976). Women

played an active and important role in the

India‘s freedom struggle. They participated in

large numbers in the agitation against the

partition of Bengal and in the Home Rule

Movement. Numerous women marched in

political processions, picketed shops selling

foreign cloth and liquor, spun and propagated

―Khadi‖, went to jails in the non-cooperation

movement and participated actively in the

revolutionary movement. More than any other

factor, participation in the national movement

contributed to the awakening of Indian women

and their emancipation. Women‘s struggle for

equality took a big step forward with the

coming of Independence.

Women in India have not only reached

the highest position of power, have not only got

equal political and civil rights as men without

having to fight for them, they have been

140

increasingly joining the higher ranks of

administration and the various other public

services and acquitting themselves with credit.

Fundamentally man and woman are one; their

problem must be one in essence. The soul in

both is the same. The two live in the same life,

have the same feelings and each is a

compliment of other. The one cannot live

without the other‘s active help. But some how

or other, man has dominated woman from ages

past and so woman has developed an inferiority

complex. She has believed in the truth of man‘s

interested teaching that she is inferior to him.

But some among men have recognized her

equal status. Gandhiji said that woman is the

companion of man, gifted with equal mental

capacities. She has the right to participate in

every minutest detail in the activities of man

and she has an equal right of freedom and

liberty with him. The woman who knows and

fulfils her duty realizes her dignified status. She

is the queen not the slave of the household over

which she presides. The ideas of Gandhiji to

who man and woman are of equal rank, but

they are not identical. They are a peerless pair,

being supplementary to another, each helps the

other so that without the one the existence of

other cannot be conceived and therefore, it

follows as a necessary corollary from these

facts that anything that will impair the status of

either of them will involve the equal ruin of

them both.

WOMEN‟S ROLE IN CHANGING

SOCIETY

The status of women in our country is

culture, region and age specific. The status of

women in Hindu society has changed from time

to time. Their position has been variously

estimated and diametrically opposite views are

held regarding her place in different stages of

civilization. On the one hand she is considered

little better than a slave or beast of burden,

condemned to drudgery, bought as a cattle and

treated as such. On the other hand, those who

have had anything to do with tribes reckoning

decent from the mother are likely to view a

woman as the undisputed mistress of the family

if not of community life as well. Both concepts

are, ―as far as the vast majority of the people

are concerned, bound to be far away from the

actual state of affairs.‖ In discussion of

women‘s status in any society, the general

convention has been to access their roles in

relation to men. Two other dimensions have in

recent times been introduced to facilitate such

assessment particularly in a period of change:

A. The extent of actual control enjoyed by

women over their own lives.

B. The extent to which they have access to

decision-making

Processes and are effective in positions

of power and authority. There is so much

variability in the relation of women to society

that any general statement must be taken with

caution. Categorically, her utility,

resourcefulness in domestic life, refreshing

company and affectionate care of children have

always proved a great asset to her partner in life

and have, to a considerable extent, determined

her status at different stages of civilization.

EMPOWERMENT

Women constitute half of population in

every society. They have been playing

significant roles in the social and economic

fronts. Women as mothers and caretakers

contribute to human resource development.

Therefore, women‘s welfare, accessibility to

development and participation in the decision-

making process are imperative in the context of

141

their multiple roles in the society. National

Policy on Empowerment of Women in India,

2001 empowerment of women emerged as one

of the significant strategies in the development

process and brought changes in thinking in our

socio-economic environment.

EMPOWERMENT OF WOMEN

Empowerment is a multi-dimensional

process, which should enable the individuals or

group of individuals to realize their full identity

and powers in all spheres of life. It consists of

greater access to knowledge and resources,

greater autonomy in decision making to enable

them to have greater ability to plan their lives,

or have greater control over circumstances that

influence their lives and free them from

shackles imposed on them by custom, belief

and practice.

Empowerment of women means equal

status to women. It does not necessarily follow

with raising money incomes or longer life

spans. It is only the yardstick of ―Welfare‖ to

―Development‟ of women. Socio economic

empowerment of women through increased

awareness of their rights and duties as well as

access to resources is a decisive step towards

greater security for them. It includes higher

literacy level and education for women, better

health care for women and children, equal

ownership of productive resources, increased

participation in economic and commercial

sectors, awareness of their rights and

responsibilities, improved standards of living

and acquiring self-reliance, self-esteem and

self-confidence. Gender equality and

empowerment of women is recognized globally

as a key element of progress in all areas.

Women become empowered through

collective reflection and decision-making. The

parameters of empowerment are: Building a

positive self-image and self-confidence;

1. Developing ability to think critically;

2. Building up group-cohesion and fostering

decision-making and action;

3. Ensuring equal participation in the process

of bringing about social change;

4. Encouraging group action in order to bring

about change in society; and

5. Providing measures for economic

independence.

The Government of India and Non

Government Agencies implemented the

following programmes for promotion of

entrepreneurship in general and particularly

among women;

1. Prime Minister Rojgar Yazana (PMRY)

2. Swarna Jayanti Gram Swarojgar Yozana

(SGSY)

3. District Rural Industrial Project

4. Rural Employment Generation Programme

5. Support to Training and Employment

Programme for Women (STEP)

6. Construction of Technology Parks for

Women

7. Women‟s Corporation Finance Corporation

(WCFC)

8. Federation of Societies of Women

Entrepreneurs (FSWE)

9. Small Entrepreneurship Development

Institutions of India (SEDII)

10. District Industrial Center (DIC)

11. Development of Women and Children in

Rural Areas (DWCRA)

12. Integrated Rural Development Programme

(IRDP)

13. Commercial Banks, Financial Corporations,

National Bank for Agriculture and Rural

Development

14. Sri Shakti Groups.

142

WOMEN‟S EMPOWERMENT AND

SECTORAL DEVELOPMENT

Empowerment would become more

relevant if women are educated, better informed

and can take rational decisions. It is also

necessary to sensitize the other sex towards

women. It is important to user changes in

societal attitudes and perceptions with regard to

the role of women in different spheres of life.

Adjustments have to be made in traditional

gender specific performance of tasks. A woman

needs to be physically healthy so that she is

able to take challenges of equality. But it is

sadly lacking in a majority of women especially

in the rural areas. They have unequal access to

basic health resources and lack adequate

counselling. The result is an increasing risk of

unwanted and early pregnancies, HIV infection

and other sexually transmitted diseases. The

greatest challenge is to recognize the obstacles

that stand in the way of their right to good

health. To be useful to the family, community

and the society, women must be provided with

health care facilities. Social Empowerment of

Women Equal access to education for women

and girls would be ensured special measures

would be taken to eliminate discrimination,

universalization education, eradicate illiteracy

create a gender sensitive educational system,

increase enrolment and retention rates of girls

and improve the quality of education to

facilitate life-learning as well as development

of occupation / vocation / technical skills by

women. Reducing the gender gap in secondary

and higher education would be a focus area.

Sectoral time targets in existing policies would

be achieved, with a special focus on girls and

women, particularly those belonging to weaker

sections including the Scheduled

Castes/Scheduled Tribes/Other Backward

Classes/Minorities. Gender sensitive curriculum

would be developed at all levels of educational

system in order to address sex stereotyping as

one of the causes of gender discrimination.

ECONOMIC EMPOWERMENT OF

WOMEN

Since women comprise the majority of

the population below the poverty line and are

very often in situation of extreme poverty,

given the harsh realities of intra-household and

social discrimination, macro-economic policies

and poverty eradication programmes will

specifically address the needs and problems of

such women. There would be improved

implementation of programmes which are

already women oriented with special targets for

women. Steps would be taken for mobilization

of poor women and convergence of services, by

offering them a range of economic and social

options, along with necessary support measures

to enhance their capabilities.

The study has been conducted to know

how transformation has occurred in the women

roles in entrepreneurial world. Also the study

talks about the status of women entrepreneurs

and the problems faced by them when they

ventured out to carve their own niche in the

competitive world of business environment.

Women owned businesses are highly increasing

in the economies of almost all countries. The

hidden entrepreneurial potentials of women

have gradually been changing with the growing

sensitivity to the role and economic status in the

society. Skill, knowledge and adaptability in

business are the main reasons for women to

emerge into business ventures. Women

Entrepreneur' is a person who accepts

challenging role to meet her personal needs and

become economically independent. A strong

desire to do something positive is an inbuilt

143

quality of entrepreneurial women, who is

capable of contributing values in both family

and social life. With the advent of media,

women are aware of their own traits, rights and

also the work situations. The glass ceilings are

shattered and women are found indulged in

every line of business from papad to power

cables. The challenges and opportunities

provided to the women of digital era are

growing rapidly that the job seekers are turning

into job creators. They are flourishing as

designers, interior decorators, exporters,

publishers, garment manufacturers and still

exploring new avenues of economic

participation. In India, although women

constitute the majority of the total population,

the entrepreneurial world is still a male

dominated one. Women in advanced nations are

recognized and are more prominent in the

business world. Women constitute almost half

of the total population in India but they are not

enjoying their freedoms, equalities, privileges,

on par with their male counterparts. Since

implementation of planning in India, several

policies and approaches were made to reduce

inequalities between women and men. As a

result a shift from ‗welfare‘ to ‗development‘ to

‗empowerment‘ to ‗human development‘

approaches has taken place to change the

position and status of women. Both government

and NGO‘s sectors were intervening to

empower the women. The National

Empowerment Policy, 2001 also emphasized

that women‘s economic empowerment may be

visualized only with the development of women

entrepreneurship. The Government of India has

defined women entrepreneurs based on women

participation in equity and employment of a

business enterprise. Accordingly, a woman

entrepreneur is defined as an enterprise owned

and controlled by a woman having a minimum

financial interest of 51% of the capital and

giving at least 51% of the employment

generated in the enterprise to a woman. With

the impetus given to women entrepreneurs they

have shown significant impact on all segments

of the economy in India.

CONCLUSION

Generally the areas chosen by women

are retail trade, restaurants, hotels, education,

cultural, insurance and manufacturing. Majority

of the women entrepreneurs have under taken

enterprises like Beauty Parlors, Fancy Stores,

Hardware / Electrical, Readymade / cloths,

Food processing / Paper products, and others in

the study. A shift of economic activities from

such above areas to Industries, Trade,

Commerce, Hotels and other large scale

enterprises owned by women entrepreneurs

may be sustained. Support from Government

Organizations and Non Government

organizations should be provided for such

activities. Then only women will be in high

yielding enterprises and their real

empowerment can be achieved. Women

entrepreneurial development is one of the

important areas where majority of countries

have focused upon as a part of overall Human

Resource Development. It is well ascertained

by policy makers across the countries that

strategic development of an economy required

equal participation and equal opportunities to

all sections and gender. Entrepreneurial

development is one significant instrument for

sustainable socio-economic development.

REFERENCES

1. Achi Reddy (1990), ―Socio-Economic

conditions of women construction workers

in Hyderabad‖, Paper presented at the

144

workshop on women works, Hyderabad

(ISST).

2. Alfred Desouza (1975), ―Women in

contemporary India‖, Manohar, Delhi.

3. Ananta Basudev Sahuand and Sandhya

Rani Das, (1992), ―Women Empowerment

through Self Help Groups‖: A Case Study.

4. Anita Shrma, (1990), ―Modernization and

status of working women in India‖, Mittal

publications, New Delhi.

5. Anna. V. (1990), ―Socio–Economic Basis

of women Entrepreneurship‖ SE PME,

Rawat Publications, New Delhi.

6. (http://www.cacci.org.tw/Journal/20

November, 2008.WEF (2007). The Global

Gender Gap Report 2007, World Economic

Forum.

145

Comparing quality of research work across subject

categories: Administrative challenges

Prof. Vinod J. Kadam,

Assistant Professor, Department of Information Technology, Dr.Babasaheb Ambedkar

Technological University, Lonere

ISBN: 978-93-81791-28-8

ABSTRACT

The journal impact factor was devised by Eugene Garfield as a way to count the

impact of scientific and research journals. The SCI Journal Citation Report gives annual

Journal impact factors .This ISI® Journal Citation Reports (JCR®) Impact factor is used

worldwide as a method to measure the quality of research work done by researchers (who

wrote those papers). The journal impact factor is also used by leading journals in their

advertising. This factor is also used by people to compare different journals. But this impact

factor is totally research category dependent. Administrators usually disregard this fact while

comparing two or more journals from different subjects or categories. Use of Impact factor is

not good idea to compare journals across subject categories due to various facts. In this paper

we have investigated various Administrative difficulties and challenges in comparing journals

and or research papers across subject categories. We have also investigated different methods

proposed by different researches to solve the problem.

KEYWORDS

Scientometrics, Bibliometrics, Impact-factor, Citation, Journal evaluation

INTRODUCTION

The idea of impact factor was first

introduced by Eugene Garfield in science

in 1995 as a simple way to count influence

of a journal. (Garfield, 1995) Impact factor

is based on citation analysis. But now-a-

days, the impact factor of journal, where

the article is published in, is used as

measurement of the quality of the article

by different universities for tenure and

promotions researches, and also to

evaluate their research scholars. This is

also used by different government

agencies for grants and for funding

different research projects and to evaluate

the quality of research held in different

organizations.

In many countries, including India,

the impact factor is not only used as

bibliometric indicator to measure quality

of journal but also to measure research

articles, the researchers who wrote those

146

papers, the university where researcher

works. It is even used to measure quality

of institute where these researches work in

(Amin M. & Mabe M., 2000) (Lawrence,

2003) (Monastersky, 2005)

(Sombatsompop & Markpin, 2005) (Adler

et al. 2008). This journal impact factors are

computed yearly for all journals that are

indexed in Thomson Reuters Journal

Citation Reports. The concept of journal

impact factor is used to compare the

journals within a certain field of science or

research (Amin M. & Mabe M., 2000).

The journal impact factor for year Y is

given by following formula

IF = A/B (1)

Where

A= the number of citations in the year Y to

items published in Y-1 and Y-2 years.

B= the number of articles, reviews,

proceedings, or notes published in the

same Y-1 and Y-2 years by that journal

(Garfield, 2006).

Though ISI impact factor is not a

flawless method to judge the journal

quality but main advantage of journal

impact factor concept is that it is already in

use and has being used since long for

measuring quality of journals. Another

advantage of Impact factor is simplicity

(Nasrollah Rezaei-Ghaleh MD et al.,

2007). Due to that it is a good technique

for scientific evaluation (Hoeffel , 1998)

(Garfield, 2007).

But Impact factor should not be

used to compare journals across different

subject areas because of citation dynamics

in different subject areas are different

(Seglen,1997) (Narin & Hamilton,1996)

(Dorta-González, P., & Dorta-González,

M. I.,,2010) (Dorta-González, P., & Dorta-

González, M. I.,2011a) (Dorta-González,

P., & Dorta-González, M. I.,2011b) and

this journal impact factor concept is purely

research area dependant. Still many

administrators use journal impact factor to

compare journal performance across

subject categories.

These are various reasons stating

why two journals from different category

should not be compared using impact

factors. It may be possible that top journals

in one subject are may have impact factor

higher than that of bottom journals in other

area. (Amin M.& Mabe M.,2000) The

average number of references included in

the research paper is comparatively lower

in some subject categories. E.g. the

citation density is very low for

mathematics journals than other subject

journals.(Abt & Garfield,2002) The

number of retrospective years required to

find 50% of the cited references (The half

life) is longer for physiology journals than

that for physics journals. (Garfield, 2006)

The Fundamental and pure subject areas

may have higher average impact factors

than specialized or applied ones.(Amin

M.& Mabe M.,2000) .In social sciences,

there are average two authors per paper

while in fundamental life sciences, there

are four authors per papers. There is a

strong and significant correlation between

the average number of authors per paper

and the average impact factor for a subject

area. (Amin M.& Mabe M.,2000) . There

may be less number of journals available

in small research subject category.

Dynamic research fields with high activity

and short publication lags, such as

biochemistry and molecular biology, have

a correspondingly high proportion of

147

citations to recent publications–and hence

higher journal impact factors–than, for

example, ecology and

mathematics.(Metcalfe,1995) (Moed,

Burger, Frankfort & Van,1985) (Narongrit

Sombatsompop & Teerasak

Markpin,2005)(Pudovkin & Garfield,

2002) the speed of discovery is different

subject categories (Bordons, Fernandez &

Gomez, 2002) is also cause of different

impact factors (Adam,2002).Different

variants of impact factor have been

proposed by different researches to address

the problem of subject category

dependency. In the next section, we have

explained difficulties while comparing

journals and research articles across

subject categories using solely Impact

factor concept. Then we have also

investigated different methods proposed by

different researches to solve the problem.

Conclusions are drawn based on these

investigations.

Need of comparing research work

across subject categories-

Here we have given few

applications where administrators have to

compare different journals across subject

categories.

To compare universities from

different domain based on research

work e.g compare quality of

research work at Technological

Universities with medical

universities and agricultural

universities.

The administrator, who may not

have, knowledge of the particular

reach work, has to compare

different research articles.

Librarians to purchase different

level journals from different fields.

Government agencies to compare

different research works from

different research areas for grants

and funding.

To recommend the set of journals

for publication of research work to

their research scholars.

Accreditation agencies like (e.g in

India NBA or NAAC) to decide

quality of research work done at

particular university /Institute.

Why not Impact factor?

A journal‘s impact factor is

calculated using two factors. First is the

number of citations in the current year to

articles, research papers and review papers

published by the journal in the last two

years and second is the number of articles,

research papers and review papers

published by journal in the last two years.

The journal impact factor is highly

discipline-dependent. Comparisons of

journals across different subject areas

should not be made based on impact factor

(Amin M.&, Mabe M.,2000)

Because,

In some subject categories, the

percentage of total citations in the first

two years after publication of article

may be higher than in other subject

categories (Erjen van Nierop ,2009) .

The bottom journals in fundamental

and basic subject journals may have

higher impact factors than the top

journals in specialized subject fields

(Amin M.& Mabe M.,2000) .

148

Average number of authors per paper

varies according to subject area, e.g.

social sciences with average two

authors per paper and fundamental life

sciences where there are over four.

There is natural tendency of authors to

refer their own work in their other

journal papers or articles (Amin M.& ,

Mabe M.,2000) .

Citation habits and dynamics can be

different in different subject (Seglen,

1997) (Narin & Hamilton,1996) .

Citation impact of a subject is directly

related to average number of

references per journal article which

varies from subject to subject (Seglen,

1997)(Narin & Hamilton,1996) . Very

less number of References to articles

are used within the arts and humanities

(Seglen, 1997) (Hamilton, 1991).

Similarly, in mathematics reference

lists are often very short than e.g.

biosciences.(Loet Leydesdorff et

al.,2013)

In new and rapidly growing research

area, the number of articles making

citations is large (Seglen,

1997)(Hargens & Felmlee,1984)

(Vinkler,1996).

There may be comparatively less

number of journals available in some

areas or there may be only few journals

with low impact factor available in

some subjects or there may be only

few journals with high impact factor

available in some subjects.

Journals in some field may be heavily

cited by adjacent fields (Seglen,1989)

(Narin, Pinski & Gee ,1976) (Folly,

Hajtman, Nagy & Ruff ,1981).

In some subject categories, more

number of conferences is being

organized per year. More Alternative

mean of publication may be available.

e.g Scholars in social sciences and

humanities publish their results more

in books than in journals or conference

proceedings but researchers in

computer engineering and Information

Technology etc. publish their work

more in conference proceedings than in

journals.(Chen &

Konstan,2010)(Freyne et al.,2010)

Time required to conduct and publish

research may be different in different

subjects (Amin M.& Mabe M.,2000) (

Thomson Scientific 2008).

SOME PROPOSED METHODS

Besides impact factor, JCR also

computes three other factors immediacy

index, cited half life and citing half life. In

the past, many avenues for the ranking of

journal impact were researched. Some

modification and improvements in Impact

factor has been suggested by some

researchers in the literature (Bensman,

2007) (Althouse, B. M., West, J. D.,

Bergstrom, C. T., & Bergstrom, T., 2009)

and Five-year Impact Factor, the Eigen

factor Score and the Article Influence

Score (Bergstrom, 2007) etc. has been

added in 2007 by Thomson Reuters

(Bornmann, L., & Daniel, H. D. 2008).

These methods may be better than Impact

factor but some are comparatively too

complex (Waltman, L., & Van Eck, N. J.,

2010) and any of these do not solve the

problem of journals‘ comparison across

subject categories.

149

The normalized impact factor

(NIF) was presented as a comparatively

uncomplicated approach empowering the

Journal Impact Factors to be used to

compare journals across different subject

areas (P. Owlia ,M. Vasei,B. Goliaei and I.

Nassiri ,2011) . The equation of The

normalization impact factor method

proposed by Sen, B.K, for the comparison

of journals across subject categories

,(Sen,1992)(Marshakova-Shaikevich,1996)

is given by

(2)

Where

NIF(j) = Normalized Impact Factor of a

journal j

IF(j) = Impact Factor of a journal j

Highest IFS = Highest IF in the Subject

Category s.

But the main problem with this method is

that it uses maximal impact factor of the

subject category (Highest IFs). This

maximal value or few maximal values

(Marshakova-Shaikevich, 1996) cannot

always be feature of most of journals

present in the subject category. (Pudovkin

& Garfield, 2004)

Another normalized impact factor

method is suggested by Fromter to

compare journal performance across

subjects according to this method the IF of

the publishing journal is divided by the

arithmetic mean of all Ifs of the category

excluding review journals. (Fromter et al.,

1999) (Garg, Suresh Kumar & Bharvi Dutt

,2011).

Moed et al. suggested normalized

impact factor of journal that takes into

account both the citation characteristics in

the sub-fields covered by a journal, as well

as the composition of the journal in terms

of types of documents, particularly

‗normal‘ research articles, notes, and

review articles. (Garg, Suresh Kumar &

Bharvi Dutt ,2011) (Moed et al., 1998)

Numerous other methods have

been proposed to normalize journal impact

factor by their field (Sombatsompop N,

Markpin T ,2005) (Sombatsompop N,

Markpin T, Premkamolnetr N ,2004) . But

these normalized impact factors are not

adequate, because like sen‘s method, these

use only the highest impact factor or a few

of the highest Impact factors to calculated

normalized impact factor of a journal.

Some Highest impact factors are not

always representatives of majority of

journals in the subject category (Pudovkin

and Garfield ,2004).

As alternative way, we can use

Rank normalization method proposed by

Pudovkin AI and Garfield E. (Pudovkin

and Garfield ,2004) and relative impact

indicators proposed by Egghe, L. &

Rousseau, R.( Egghe, L. & Rousseau,

R.,2002) .The Formula for rNIF(j) is given

by the equation 3

(3)

Where

rNIF(j) is rank normalized IF of journal

j.

Ns is number of journals in the subject

category S

150

Rank (j) is the rank of journal in the

category S

rNIF is based on number of journals in the

category .It should be noted that Some

subject categories may have more journals

compare to other categories. rNIF and

relative impact indicator are simple to use

but have practical difficulties. (Garg,

Suresh Kumar & Bharvi Dutt ,2011)

Other vital approach, journal to

field impact score (JFIS) (Van Leeuwen T.

N., Moed H. F. ,2002) which is based on

cited-side normalization (Waltman and van

Eck,2010). The ―Journal to Field Impact

Score‖ was computed by dividing the

journal IFs by the aggregate IFs calculated

for their related subject categories (Van

Leeuwen T. N., Moed H. F. ,2002).

Any of these methods can not

reflect the real position of journals in their

subject categories because these methods

neglect the variation of journal IF

distribution within different subject

categories (Nasrollah Rezaei-Ghaleh MD,

Fereidoun Azizi MD,2007).

The average number of references

included in the research paper is

comparatively lower in some subject

categories. (Abt & Garfield,2002) To look

after particularly this problem, the

Fractional counting of a citation has been

proposed.(Leydesdorff, L., & Bornmann

,2011)(Moed,2010)(Zitt, M., & Small, H.

,2008) These methods are based on citing-

side normalization.(Waltman and van

Eck,2010) In these methods, a citation in

an article having n citations in reference

list makes value 1/n.

Audience factor proposed by Zitt

and Small (2008) but unlike Impact factor,

it is based on weighed Citations. Weight of

a citation originating from a journal is

lower if that journal is having large

average reference list.(Waltman and van

Eck,2010)(Zitt, 2010) . Audience factor

uses the mean of the fractionally counted

citations to a journal. This mean is then

divided by the mean of all journals

included in the Science Citation Index.

Other alternative methods the

source normalized impact per paper

(SNIP) and ‖Journal Impact Factor based

on Fractional Counting of Citations‖ are

based on source normalization(Moed,

2010) (Leydesdorff L, Opthof T ,2010) .

Leydesdorff L and Opthof T

(Leydesdorff L, Opthof T ,2010)

introduced ‖Journal Impact Factor based

on Fractional Counting of Citations‖. But

in this method, citations from articles with

long reference lists are considered less

important than those from articles with

short reference lists (Moed ,2011) .

SJR (SCImago Journal Rank) is

another metric using methodology akin to

Google's PageRank to measure journal

impact or prestige, giving greater weight to

citing references from more influential

sources.

Moed (2010) proposed a method

which divides a improved Impact factor

with a three years window by the median

number of references in the Scopus

database. SNIP (Source Normalized

Impact Per Paper) is a measure of impact

which can adjust for different citation

patterns across different disciplines,

therefore allowing more equitable cross

disciplinary comparison. The SNIP is

defined as the ratio of the journal's average

citation count per paper to the "citation

potential" of the journal's subject field.

151

The "citation potential" is a measure of the

average number of times a paper in the

journal's subject field is cited. Source

Normalized Impact per Paper (SNIP) is

now in use as an alternative to the IF in the

Scopus database (Leydesdorff & Opthof,

2010b). In SNIP method normalization is

performed in the numerator as well as in

the denominator, that‘s why this exercise

is complex (Leydesdorff L, Opthof T

,2010) . According to L. Leydesdorff and

T. Opthof (Leydesdorff L, Opthof T ,2010)

, SNIP is based on dividing the mean of a

distribution by the value of the median of

another distribution.

CONCLUSION

Administrators those are not

familiar with citation behaviour of

research area use impact factors to

compare journals across subjects. This

Impact factor value is totally subject

category or research field dependant. The

people, Employers, universities,

government agencies, and accreditation

agencies use the impact factor values of

journals to compare research work of a

person/persons published in it with

research work published by other persons

in other subject category‘s journal. This is

not a fair way of comparison of journals

across subject categories. Different

methods proposed by different researches

to solve the problem. There are some

limitations of these methods also.

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155

A Study on Consumer Behavior towards Modes of Shopping

Prof. Srishti Joshi, Kevin Pereira, Aarti Pawar

Indira School of Business Studies, Pune, India

ISBN: 978-93-81791-28-8

ABSTRACT

Shopping has changed as a result of the influence of technology with most people preferring online

shopping to the traditional physical store shopping. This trend took center stage in the past decade with

many retail giants integrating the two approaches to achieve maximum benefit. This research aims to

understand the comparison between online shopping & physical store shopping and consumer behaviour

towards these modes of shopping. This paper identifies and discusses that male population tend to shop

more online shopping rather than physical shopping. For safety of payment more preference is given to

physical shopping.

People are slowly going for online shopping but the majority of people go to physical shopping as it

is having trust, feel and touch of the product. In our research we have found out that flipkart and jabong are

the major players in the online retail and online shopping is here to stay and number of people favouring this

mode is growing day by day.

KEYWORDS

online shopping;consumer behaviour;physical shopping

INTRODUCTION

“Consumer behavior is the study of

individuals, groups, or organizations and the

processes they use to select, secure, and dispose

of products, services, experiences, or ideas to

satisfy needs and the impacts that these processes

have on the consumer and society.‖― (Kuester,

2012)

Shopping has changed as a result of the

influence of technology, with the advent of online

shopping more options have been provided to the

consumers. A critical understanding of consumer

behaviour in the virtual environment, as in the

physical world, cannot be accomplished if the

factors affecting the purchase decision are ignored

or misunderstood. For instance, online consumers‘

concerns about lack of opportunity to examine

products prior to purchase are regarded as the

specific factor affecting the buying

decision.Internet is changing the way consumers

shop and buy goods and services, and has rapidly

evolved into a global phenomenon. Many

companies have started using the Internet with the

aim of cutting marketing costs, thereby reducing

the price of their products and services in order to

156

stay ahead in highly competitive markets. This

study is expected to improve our understanding of

online and physical consumer behaviour.

LITERATURE REVIEW

The current literature on consumer online

purchasing decisions has mainly concentrated on

identifying the factors which affect the

willingness of consumers to engage in Internet

shopping. In the domain of consumer behaviour

research, there are general models of buying

behaviour that depict the process which

consumers use in making a purchase decision.

These models are very important to marketers as

they have the ability to explain and predict

consumers‘ purchase behaviour. The classic

consumer purchasing decision-making theory can

be characterized as a continuum extending from

routine problem-solving behaviours, through to

limited problem-solving behaviours and then

towards extensive problem-solving behaviours

[Schiffman et al., 2001]. The traditional

framework for analysis of the buyer decision

process is a five-step model. Given the model, the

consumer progresses firstly from a state of felt

deprivation (problem recognition), to the search

for information on problem solutions. The

information gathered provides the basis for the

evaluation of alternatives. The development and

comparison of purchasing evaluation criteria

result in the actual decision to buy. Finally, post-

purchase behaviour is critical in the marketing

perspective, as it eventually affects consumers‘

perception of satisfaction/dissatisfaction with the

product/service. This classic five stage model

comprises the essence of consumer behaviour

under most contexts. Nevertheless, the

management of marketing issues at each stage in

the virtual environment has to be resolved by

individual E-marketers. Peterson et al.

[1997]commented that it is an early stage in

Internet development in terms of building an

appropriate dedicated model of consumer buying

behaviour. Decision sequences will be influenced

by the starting point of the consumer, the relevant

market structures and the characteristics of the

product in question.

Lina Zhou, Liwei Dai and Dongsong

Zhang ―Online Shopping Acceptance Model-a

Critical Survey of Consumer Factors In Online

Shopping‖, Journal Of Electronic Research, VOL

8,No.1,2007, have presented a OSAM (Online

Shopping Acceptance Model) to explain

consumer acceptance of online shopping.

According to authors, given no time or economic

limitations, an online survey, supplemented with

other qualitative (e.g., interview) or quantitative

methods (e.g. phone survey), seems to be

appropriate for validating OSAM, assuming that

several methodological issues (i.e., survey design,

subject privacy and confidentiality, sampling and

subject solicitation, distribution methods, and

survey piloting) are properly addressed. Consumer

factors and their effects on online shopping

intention and behavior have been studied from a

variety of perspectives. The research trends

identified in this study also highlight a few

managerial issues that should be appealing to

online retailers such as shift in shopping

orientations etc. Proposed OSAM also suggest

online marketing strategies and principles. This

study shed light on some future research issues.

Ming-Hsiung Hsiao in his Transportation

Research Part E 45 (2009) 86–95 has observed

that in past decade, the way people shop has

changed dramatically. Consumers are surrounded

by technology that promises to redefine the way

that they interact and shop. Web based shopping

or e-shopping features in freeing the consumers

157

from having to personally visit physical store. Of

these elements, information gathering, transaction

/purchase and delivery may be the three more

noticeable ones for the shopping mode choice

between e-shopping and store shopping .Store

shopping generally prevails over e-shopping when

it comes to shopping products like automobiles,

real estates, life insurance etc. On the other hand

e-shopping prevails when it comes to products

like music, software etc.

The study can be broadly classified in two

factors:

Economic: Consumers attempt to

maximize their utility subject to

limited amount of money and time.

Psychological: It considers the mind

set of consumers.

It is finally found that in terms, avoiding a

shopping trip physical store has far more benefits

than bearing waiting for the delivery of online

purchased books. This finding disagrees with

others In which they believe that the benefit from

saving travel time can be balanced against the

offsetting time spent waiting for delivery. In a

literature by Rick L. Andrews and Imran S.

Currim year 2004.He has studied ―Behavioural

differences between consumers attracted to

shopping online versus traditional supermarkets

implications for enterprise design and marketing

strategy‖ Despite the dot.com shakeout, online

revenues continue to increase and are projected to

impose greater pressure on traditional distribution

channels. However, there is a striking absence of

published empirical work on how consumers

attracted to shopping online behave relative to

consumers shopping in a traditional store. This

study uses data from both traditional supermarket

scanners and an online supermarket to test

expected differences in choice behaviors of such

consumers. Results of analyses conducted for two

product categories indicate that compared to

traditional supermarket consumers, online

consumers are less price sensitive, prefer larger

sizes to smaller sizes (or at least have weaker

preferences for small sizes), have stronger size

loyalty, do more screening on the basis of brand

names but less screening on the basis of sizes, and

have stronger choice set effects.

According to Xia and Monroe (2009),

consumers will save in monetary when there are

price promotions on specific products. In an

online context, consumers are more likely to

depend on the price cues to determine the quality

of a product which are presented in the web site

because they cannot see or touch the actual

product. their study resulted that consumers with a

shopping goal are more responsive towards

promotional messages such as "pay less" and

"discount" while consumers without shopping

goal are responsive towards promotional

messages such as "save more" and "free

gift".viewed that at a certain point, perception of

lower quality of the product will evoked when

there is a price reduction or there will be questions

on the retailer's intention to reduce the price. Price

will be a primary factor when consumers search

product in a web and this would show that

customer behavioral intention are related to the

price cues that are more readily accessible from

memory.

Online shopping has grown tremendously

due to a number of benefits that users perceive the

mode of shopping to have. Among them is the

flexibility of purchase where the customer is able

to find information as well as make a purchase

any time anywhere. Another benefit is the cost

benefit and this comes in because online products

are perceived to be a lot cheaper than physical

158

store products according to a survey by Forsythe&

Liu, 2006.

The cost aspect is due to the reduced

overheads as well as the costs of maintaining the

store fronts. Despite the fact that online products

sometimes bear delivery costs onto the final price,

the selling price of most of these products are

cheaper than those of physical stores.The third

benefit is that of convenience where individuals

can do shopping anytime anywhere. The

emergence of anytime internet enabled devices

together with a variety of shopping applications

for smartphones have encouraged people to

conduct online shopping. The above benefits

come with other drawbacks which have actually

held back the proliferation of online shopping.

The first and major problem is that of internet

security in terms of identity theft and credit card

fraud. Many online transactions require use of

credit cards or bank accounts and many shoppers

are afraid of releasing such information

online..This was the survey carried out by

Forsythe& Liu, for online shopping and physical

shopping from 2006 to 2010.A survey carried out

by Xinyu (Jason) Cao Frank Douma Fay Cleavel

and ZhiyiXu of Humphrey Institute of Public

Affairs University of Minnesota for The

Interactions between E-Shopping and Store

Shopping ,proposed two competing assertions

innovation-diffusion hypothesis and efficiency

hypothesis. People in urban areas are more likely

to buy online because people in urban areas are

more open to new technologies and ideas than

those in remote areas. Therefore, with online

buying being an innovative shopping channel, the

innovation-diffusion hypothesis states that urban

residents are more likely to be online buyers. This

research aims to reveal the interactions between e-

shopping and in-store shopping using a sample of

Internet users in the Minneapolis-St. Paul

metropolitan area through a number of analytical

approaches.

OBJECTIVES OF THE STUDY

This research aims to compare between

online shopping & physical store shopping. To

understand which is the most preferred mode of

shopping and also to understand what criteria

customers look into while selecting the mode for

shopping. With this study an attempt is made to

find out consumer motivations to engage in online

shopping versus physical store shopping and also

to find out the perceived benefits and drawbacks

of internet shopping versus physical store

shopping so that the long term impacts of online

shopping vs physical store shopping can be

understood.

HYPOTHESIS

1. H0: Demographics don‘t significantly impact

the choice of mode of shopping.

2. H0: Variety of brands does not significantly

impact the preference of modes of shopping of

customers.

3. H0-Delivery times does not significantly

impact consumer behavior towards shopping

modes.

RESEARCH METHODOLOGY

The primary objective of this paper is to

do comparative study of online shopping and

physical store shopping.This is achieved by a

framework which includes following components:

i) Research Design: it is Descriptive

Research as it a conclusive and structured

159

study to find out the characteristics of

problem.

ii) Sampling Design: In this case cluster

sampling is followed as we have done

online survey and have covered

heterogeneous kinds of people.

iii) Sampling Size: This study is based on the

sample of 100 respondents.

DATA COLLECTION

The type of method followed for data

collection is primary data collection, as we have

collected the information directly from the people

through a self prepared questionnaire. We have

collected information from online reviews as well.

DATA INTERPRETATION AND ANALYSIS

i)Gender:

From the figures it is evident that online shopping is preferred more by the male population compared to

their female counterparts.

ii) Income:

People with the salary range of 10000-20000 prefer to shop online.This

mode of shopping is not very popular among high income groups.

iii) Preference:

58% 24%

8%

10%

Per month Salary

10,000 - 20,000

20,000 - 30,000

30000-40000

above 40000

Male 74%

Female 26%

Per month

Salary

10000-

20000

58%

20000-

30000

24%

30000-

40000

8%

40000 &

above

10%

Preference

160

59% of the people prefer to do online as well as physical shopping followed by online shopping indicating

that online shopping is more preferred than physical store.

iv) Time Duration (Online shopping):

Out of the 76 respondents who shop online, 43% of people have been

shopping online for less than a year whereas the number of people shopping online for more than a year

is quite small which indicates that online shopping has gained popularity recently.

v)Time Duration (Physical Shopping):

55% of people out of 83 have been doing physical store shopping for more than 3yrs so majority have been

engaged in physical store shopping.

Online 17%

Store 24%

Both 59%

Shopping Preference

Less than 1 year,

43%

1-2 years, 32%

2-3 years, 17%

above 3 years, 8%

less than 1 year 7% 1-2 years

17%

2-3 years 21%

above 3 years 55%

Spot Shopping duration

Online 17%

Store 24%

Both 59%

Less than a

year

43%

1 to 2 years 32%

2-3 years 17%

More than 3

years

8%

Time(Physical)

Less than a year 21%

1 to 2 years 14%

2 to 3 years 10%

More than 3

years

55%

161

vi) Willingness to Recommend:

80% of people out of the 76 who have shopped online would recommend it to others which shows most

people favour online shopping and must have had a positive experience shopping online.

vii) Product wise preferences

GROCERIES:

When it comes to groceries people still prefer physical stores.

Yes 80%

No 15%

Cant Say 5% willingness to recommend Yes 80%

No 15%

Cant Say 05%

Groceries

Over The

Internet

22 27%

Retail Store 61 73%

Fast food

162

Fast-Food:

Fast-Food is also preferred to be purchased from physical stores.

Books:

When it comes to books internet is the preferred medium.

Cosmetics:

Cosmetics are bought more in retail stores.

Clothes:

54% of people prefer to buy clothes in retail store. Hence, a majority

still relies on retail stores for clothes.

Cinema/Concert tickets:

Over The

Internet

24 29%

Retail Store 59 71%

Books

Over The

Internet

60 70%

Retail Store 26 30%

Cosmetics

Over The

Internet

30 38%

Retail Store 50 63%

Clothes

Over The

Internet

40 46%

Retail Store 47 54%

163

Around 80% of people book tickets online.

Jewellery:

Jewellery is bought more from retail store.

Electronic goods: Electronic Goods are bought more online

viii) Online store/website popularity (1-lowest, 5 highest)

Ebay is a not a popular site for shopping online.

Cinema/Concert ticket

Over The

Internet

6

9

79

%

Retail Store 1

8

21

%

Jewellery

Over The

Internet

21 28%

Retail Store 55 72%

Electronic Goods

Over The

Internet

5

6

66%

Retail Store 2

9

34%

Ebay

1 18 20%

2 13 15%

3 34 39%

4 15 17%

5 8 9%

Olx

1 11 13%

2 16 19%

3 30 35%

164

olx is a site that is not so commonly used by people.

Jabong is the site that is considered as important by (15-30%) by

people.

Amazon is also a site that is importantly used by people (13-29%).

4 25 29%

5 4 5%

Jabong

1 9 10%

2 11 13%

3 27 31%

4 26 30%

5 13 15%

Amazon

1 11 13%

2 18 21%

3 21 24%

4 25 29%

5 11 13%

Flipkart

1 12 13%

2 6 7%

3 11 12%

165

46% people consider flipkart as the important site to buy from. Hence, it is the most popular online shopping

destination

ix) Reasons for online shopping preference

4 20 22%

5 41 46%

Price

1 10 11%

166

For 39% people price indifferent. 20% rate price to be most important

41% people consider time as important. For them online shopping

gives them convenience with more saving of time

For 37% people are indifferent to shipping/delivery time.

2 5 5%

3 36 39%

4 23 25%

5 19 20%

Convenient & Time Saving

1 7 8%

2 9 10%

3 20 22%

4 37 41%

5 17 19%

Fast Shipping

1 11 12%

2 6 7%

3 34 37%

4 27 29%

5 14 15%

Trust

1 10 11%

2 14 15%

3 32 34%

4 30 32%

167

34% of people are neutral on trust. And 32% give importance to trust in online shopping.

Only 16% people are very brand conscious. 42% are neutral

towards brands they purchase online

For 40% of people friend referral is not so important. However 41% of the respondents give importance to

friend referrals when purchasing online.

5 7 8%

Brand Consciousness

1 11 12%

2 7 8%

3 38 42%

4 20 22%

5 14 16%

Friend Referral

1 10 11%

2 7 8%

3 35 40%

4 26 30%

5 10 11%

168

x) Reasons for spot shopping preference

169

xi) Location Preference in spot shopping

Shopping malls are most preferred followed by organized retail stores

CHI-SQUARE TEST

We performed the chi-square test to check the correctness of hypothesis

170

Hence we reject the null hypothesis i.e, variety of brands does impact the preference of shopping modes of

customers.

171

Hence we accept the null hypothesis i.e, delivery times does not significantly impact consumer behavior

towards shopping modes.

FINDINGS & RESULTS

Male population tends to shop more online

rather than from physical stores

For safety of payment more preference is give

to physical shopping.

Flipkart is the most popular used for online

shopping destination as it gives more

discounts and offers.

People are slowly going for online shopping

but the majority mentality of people goes to

physical shopping as it is having trust, feel and

touch of the product.

Online shopping has gained popularity

recently as the people have been using this

mode for less than a year.

CONCLUSION

The choice of shopping differs from

person to person, so it is difficult to determine the

preference of shopping with absolute certainty.

From the study, it can be conlcuded that the online

mode of shopping is gaining popularity at a fast

pace. Also, the chi square analysis also helps us to

conslude that variety of brands affects the choice

of shopping modes of customers and delivery time

does not significantly affect shopping mode

prefernce. Thus shoppers opting for online mode

of shopping are variety seeking and are not

affected much by delivery timings.

Although, the advantages of spot shopping

cannot be ignored, the online mode is giving

tough competition to physical stores to lure

customers and increase the footfalls. In the light

of discounts and better deals available at online

stores like jabong and flipkart, the challenge of

physical stores to retain customers increases.

However, discounts and deals are not enough to

keep shoppers entwined and so online shopping is

not the only resort that shoppers seek. They look

for a combination of both. They combine the

tangibility and financial aspects

(dicounts/offers/deals) of both the modes of

shopping.

REFERENCES

1. Andrews, R.L. and Currim, I.S. (2004)

‗Behavioural differences between

consumers attracted to shopping online

versus traditional supermarkets:

implications for enterprise design and

marketing strategy‘, Int. J. Internet

Marketing and Advertising ,Vol. 1, No. 1,

pp.38–61

2. Brown, M., Pope, N. and Voges, K.,

"Buying or Browsing? An Exploration of

Shopping Orientations and Online

Purchase Intention,"European Journal of

MarketingVol. 37, No. 11/12: 1666-1685,

2003.

3. Lina Zhou, Liwei Dai and Dongsong

Zhang ,―Online Shopping Acceptance

Model — A Critical Survey Of Consumer

Factors In Online Shopping‖,Journal of

Electronic Commerce Research, VOL 8,

NO.1, 2007

4. Ming-Hsiung Hsiao, ,‖Shopping mode

choice: Physical store shopping versus e-

172

shopping‖,Transportation Research Part E

45 (2009) 86–95

5. Ruyter, K., Wetzels, M. and Kleijnen, M.,

"Customer Adoption of E-Service: An

Experimental Study,"InternationalJournal

of Service Industry ManagementVol. 12,

No. 2: 184-208, 2001.

6. Sandra forsythe,Chuanlan liu,David

shannon, and Liu chun gardner

―Development of a scale to measure the

perceived benefits and risks of online

shopping‖Journal of Interactive Marketing

volume 20 / number 2 / spring 2006

7. Stafford, T. F., Turan, A. and Raisinghani,

M. S., "International and Cross-Cultural

Influences on Online Shopping

Behavior,"Journal of Global Information

Management Vol., 7, No. 2: 70-87, 2004.

8. Sultan, F. (2002). Consumer Response to

the Internet: An Exploratory Tracking

Study of On-Line Home Users. Journal of

Business Research, 55(8), 655–663.

9. Xinyu (Jason) Cao,Frank Douma, Fay

Cleaveland, ZhiyiXu,Humphrey Institute

of Public Affairs University of

Minnesota,CTS 10-12,‖The interactions

between E-shopping and store shopping:A

case study of the twin cities‖,2010

Annexure

Questionaire

Online Shopping versus physical store shopping

Please read each question carefully and indicate your response by selecting the most appropriate choice.

DEMOGRAPHIC INFORMATION

1. Gender: Male Female

2. Age: yrs

3. Education:

4. Occupation:

5. Monthly Income: 10000-20000 20000-30000

173

30000-40000 40000 & above

6. Which mode of shopping do you prefer? Online

Physical store Both

7. In general, you prefer to do your shopping of: (Select only one)

Over The Internet Retail Store Over the Phone

1.Groceries

2.Fast Food

3.Books

4.Cosmetics

5.Clothes

6.Cinema/Concert Ticket

7.Jewellery

8.Electronic Goods

8. If online for how long have you been shopping Less than a year

online? 1 to 2 years

2-3 Years More than 3 years

9. Rate the websites on a scale of 1 to 5 where 1 is the lowest and 5 is the highest.

www.ebay.in

www.olx.in

www.jabong.com

www.amazon.com

www.flipkart.com

Others(specify)

10. Rate the following on a scale of 1 to 5 based on our reasons for shopping online

Attribute 1 2 3 4 5

Price/Discounts

Convenience & time saving

Fast Shipping

174

Trust

Brand Conciousness

Friend referrals

11. Would you recommend online shopping Yes

to your friends? No

12. If you prefer stores, for how long have you been Less than a year

Shopping in physical stores? 1 to 2 years

2-3 Years More than 3 years

13. Please select the types of stores you visit for Shopping Malls

shopping: Retail store

Local stores

Flea markets If other please specify:

14. What are the main reasons for preference of physical stores? (Rank the following in order of

importance 1: most important, 5 least important)

Attribute 1 2 3 4 5

Safety of payment

Trust of store/brand

Touch/feel of the product

Interaction with sales staff

Overall Experience

175

176