JAGRAN JOURNAL OF COMMERCE AND ECONOMICS · Corruption and bad governance are the other menacing...

Vol. 2 Issue 3ISSN 2321-6522

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Jagran College of Arts, Science and CommerceA Self Financing P.G. College Affiliated to C.S.J.M. University, Kanpur

JAGRAN JOURNALOF COMMERCE ANDECONOMICS

Prof. B.P. SinghChairman, Delhi School of Professional Studies and Research, Delhi Formerly Professor, Head and Dean Faculty of Commerce and BusinessDelhi School of Economics, University of Delhi

Prof. Arun KumarProfessor and Chairman, Economic Studies and Planning Centre, JNU, New Delhi

Prof. Pramod Kumar SaxenaDean, Faculty of Commerce, HOD (Accountancy and Law) Dayalbagh Educational Institute, Agra

Prof. R.C. GuptaProfessor, (Commerce) and Director, Govt. M.L.B. College of Excellence, Gwalior.

Prof. O.P. ShuklaPrincipal, National Defence Academy, Pune

Prof. H.K. SinghProfessor, Faculty of Commerce, Banaras Hindu University, Varanasi

Prof H.M. MehrotraHead, Dept. of Economics, Christ Church College, Kanpur

Dr. Vimal KumarAsst. Professor, Dept. of Economics, IIT Kanpur

Shri Yogendra Mohan Gupta

Shri Mahendra Mohan Gupta

Smt. Ritu Gupta

Dr. J.N. Gupta

Chairman, Jagran Group and Jagran Education Foundation

CMD, Jagran Prakashan Ltd., Former Member Rajya Sabha

Vice Chairperson, Jagran Education Foundation

CEO, Jagran Education Foundation

Our Patrons

Editorial Advisory Board

JAGRAN JOURNAL OF COMMERCE AND ECONOMICSMarch 2014Vol. 2, Issue 3 ISSN 2321-6522

Co-Editors

Chief Editor

Publisher

The government is a major actor in every

economy today. Being an agency of

nation's citizens it is answerable to them.

There are many pathways by which

countries can muff their chances, but only

a few by which they are able to prosper.

What kind of social institutions and what

type of public policies are most likely to

enable people to flourish depends on the degree to which

person is able to exercise independence and choice, his

ability to participate in political sphere and access to resources

in order to satisfy his needs of commodities like food, clothing

,shelter, health care and education. We often see that different

parts of the same country or state grow so differently and

remain so different; some are so wealthy while some are so

deprived. The distribution of resources is therefore a matter of

government concern. Corruption and bad governance are the

other menacing issues which paralyse the entire system.

Thus we need to unearth what combination of policy

measures is likely to work best for it.

In the present issue we have papers which have

tried to discuss and address the problems related to

disparity, governance, human resource management etc.

This issue attempts to bring out some useful management

strategies for organization and individual, IT enabled

commerce and governance and increasing women

participation in all walks of life may be the proposed solutions

for underlying complexities, a byproduct of growth itself...

DirectorJagran College of Arts, Science and CommerceMarch 2014

INDEX

S.No. Name of the Paper and Authors Page No.

1. Direct Cash Transfer Subsidy: 1

Implications for Indian Economy

Dr. Meera Singh and Prof. H. K. Singh

2. The Effectiveness of Organizational Culture 9

on Employees Behaviour within Management

Institutions in Gwalior Region

Dr. Nandan Velankar and Dr. R. C. Gupta

3. Work Life Balance 16

Meenakshi Singhal and Mansi Pandey

4. Embracing the Change and Harnessing Complexity 22

Revisiting the Assumptions of Organizations

in Uncertain Environment

CA Vinod Sharma

5. ASBA in India and Areas of Concern for Regulators 30

Mrs. Anu Jajoo

6. Women Entrepreneurs: Reason for Joining NGO's 35

Dr. Rachna Chaturvedi

7- df"k {ks= esaa dk;Zjr Xkzkeh.k efgykvksa dh fu.kZ;u esa Hkwfedk 40

Mk0 t;izdk'k flag ,oa Mk0 cyoUr flag

8 Study of Revised Schedule VI of Final Accounts of Companies 48

Dr. Kamal V. K. S. Bhadauria

9. Inter Regional Disparities in Agricultural Infra-structure � 56

A Case Study of Uttar Pradesh

Dr. Archna Shukla and Dr. Manju Awasthi

10. A Study of Industrial Reforms in Uttar Pradesh 61

Mayank Tripathi

11. E Commerce: Opportunity and Challenges in Indian Context 67

Dr. Vidushi Sharma and Dr. Roopali Awasthi

12 . Impact of Electronic Commerce Strategies on Business 74

Ankit Gupta and Dr. R. C. Gupta

1

*Assistant Professor, Department of Commerce, Udai Pratap Autonomous PG College, Varanasi**Professor of Commerce, Banaras Hindu University, Varanasi

DIRECT CASH TRANSFER SUBSIDY: IMPLICATIONS FOR INDIAN ECONOMY *Dr. Meera Singh

**Prof. H. K. Singh

Introduction

Cash Transfer Subsidy programme is a poverty reduction measure in which government subsidies

and other benefits are given directly to the poor in cash rather than in the form of subsidies. It can help the

government reach out to identified beneficiaries and can plug leakages. Currently, ration shop owners

divert subsidised Public Distribution System grains or kerosene to open market and make fast buck.

Such Leakages could stop. The scheme will also enhance efficiency of welfare schemes. The money is

directly transferred into bank accounts of beneficiaries. LPG and kerosene subsidies, pension

payments, scholarships and employment guarantee scheme payments as well as benefits under other

government welfare programmes will be made directly to beneficiaries. The Prime Minister's National

Committee on Direct Cash Transfers has been tasked with an ambitious mandate to provide vision

and direction to enable direct cash transfers of subsidies under various government schemes

and programmes to individuals to enhance efficiency.Cash transfers have increasingly become

synonymous with ideological contestation on the role of the state, making the debate on feasibility

shriller.

Cash Transfers are programs that transfer cash directly, generally to poor households, with or

without conditions. The purpose of a cash transfer is :

lTo provide a monetary benefit for a specific purpose or use - such as for education through a

scholarship, for healthcare through a medical assistance program, etc.

lDirect income support � such as old age income support through a pension, unemployment

assistance through an unemployment benefit, etc.

lThis is predicated on the assumption that there is a need to redistribute income as a

public policy objective. often, the purpose is to enhance private consumption levels and

achieve a minimum consumption floor.

lTo provide a direct subsidy for specific products � such as for food, fuel, agricultural

inputs, electricity, books, etc.

Objectives of the Study

This study is specifically focused on the plans, existing status and feasibility of cash transfer

schemes for energy commodities such as PDS kerosene and liquefied petroleum gas and agricultural

Products such as fertilisers.

Present Scheme of Subsidy in India

The Union Government spending subsidies on food, petroleum and fertilizer make up for

over 90 per cent of the total subsidies with Food Subsidy accounting for the highest average share

(44 percent). The average annual growth rate of the Union Government spending on subsidies has

been about 14 per cent from 2000-01 to 2012-13, with the growth rate during 2006-07 to 2012-13

2

March 2014 ISSN 2321-6522Jagran Journal of Commerce and Economics

being higher as compared to the previous phase of 2000-01 to 2005-06 (due to an overall increase in

food prices as well as higher expenses towards petroleum subsidy over the last few years). Cash

transfer can be a good way of helping the poor in many circumstances. Indeed, many schemes that

are not directly cash transfer schemes also work mainly through cash transfer, such as the National

Rural Employment Guarantee programme, which certainly has helped the poor through creating

jobs and generating cash income for a great many poor people in rural India. Cash is easy to handle

and can be, in many cases, easily monitored. It cannot be sensible to be generically against cash

transfer schemes, in a country with a lot of poverty and a commitment to use public money to make

the very poor a bit less poor. The government of India had implemented the scheme for cash transfer

to the beneficiary's account in 51 districts from January 1, 2013. Electronic Benefit Transfer (EBT)

has already begun on a pilot basis in Andhra Pradesh, Chhattisgarh, Punjab, Rajasthan, Tamil Nadu,

West Bengal, Karnataka, Pondicherry and Sikkim.

The government in India has been subsidizing crucial items like food, fuel etc. since Independence.

These subsidies have been very important in the Indian context where a significant

share of the population both in rural as well as urban areas is not always capable of affording even the

necessary goods and services at the market prices. It helps to clarify which maladies can be solved

by cash transfers, which cannot and identify those cases where the side effects of introducing cash

could be worse than the disease. Over the years, studies of the Public Distribution System show

that some states manage supply of in-kind transfers fairly well, while in a large number of cases, the

pipeline connecting citizens to ration supplies is prone to leakage and corruption. The development of

technologies such as biometrics and centralised fund-flow management systems have created

new pipelines through which cash can flow cheaply and accurately to recipients. A World Bank

study recently reported there is a direct link between cash transfers and voting behaviour. It was

found beneficiaries express a stronger preference for the ruling party that implements and expands

cash transfers. The central government provides subsidies to commodities such as fertilisers,

petroleum, and a few other services.

Fertiliser

Chemical fertilizers play a significant role in the development of agriculture sector and successful

management of food security concerns in the country. Since the land resource is finite

and there are increasing food requirements, the only way forward is to sustain increase in agricultural

productivity. The government has been pursuing policy conducive to increase availability and

consumption of fertilizers to meet the objective of increased productivity and higher agricultural growth

in the country. Fertilizer subsidy has been one of the important features of the fertilizer policy of

Government of India. The objective of fertilizer subsidy has been to provide adequate fertilizers to

farmers at affordable prices so as to induce consumption. The subsidy has been transferred to the

farmers in the form of subsidized Maximum Retail Prices (MRPs) of a basket of fertilizer products. The

Year PDSKerosene

Domestic LPGPetrol Diesel Fertiliser Food

2000-01

2001-02

2002-03

2003-04

2004-05

2005-06

2006-07

2007-08

2008-09

2009-10

2010-11

2011-12 (RE)

2012-13 (RE)

7522

5310

3018

3751

10627

15441

18853

20080

29199

18321

20496

28215

30151

6724

5830

5760

9158

10146

11851

12255

17186

19314

16071

23746

32134

41547

0

0

5225

6292

150

2723

2027

7332

5181

5151

2227

....

....

7522

5310

3018

0

2154

12647

18776

35166

52286

9279

34384

81192

32061

13811

12596

11015

11847

15879

18460

56222

32490

75849

61264

62301

67199

60974

12010

17494

24176

25181

25798

23077

24014

31328

43627

52490

63844

72823

75000

1. Ministry of Finance; Indian Public Finance Statistics: 2012-132. Indian Petroleum & Natural Gas Statistics 2012-133. Union Budget 2012-13

Source :

3


government provides subsidy for urea, 21 grades of phosphates and potash (P&K) fertilisers, and 15

grades of NPK (nitrogen, phosphorous and potash) complex. Farmers pay 25 to 40 per cent of the

actual cost and the rest is borne by the government in the form of a subsidy, which is reimbursed to the

manufacturers and importers. In 2010-11, Rs 52, 840 crore was allocated for fertiliser subsidy.

Presently, urea is mostly produced domestically while phosphates and potash (P&K) fertiliser is

imported. In 1992, the government decontrolled phosphates and potassic fertilisers. In effect this

meant that there was no control over production and distribution. However, prices were regulated

through concession rates and fixing of the Maximum Retail Price (MRP).

Annual Subsidy Spending on Petroleum Products and Fertilisers (2000-01-2010-11)

(Rs. in crore)

4


PDS Kerosene per litre

FromGovernment

Budget

2002-03

2003-04

2004-05

2005-06

2.45

1.65

0.82

0.82

1.69

3.12

7.96

12.10

4.14

4.77

8.78

12.92

67.75

45.18

22.58

22.58

62.27

89.54

124.89

152.46

130.02

134.72

147.47

175.04

Total Subsidy on PDS Kerosene and Domestic LPG to Consumers (in INR)

Year By PublicSector OilCompanies

TotalSubsidy

Domestic LPG per Cylinder

FromGovernment

Budget

By PublicSector OilCompanies

TotalSubsidy

Kerosene

Since 2002-03 the kerosene subsidy has increased more or less uniformly from INR

4.14 per litre in 2002-03 to INR 27.26 per litre in 2011-12. According to a conservation estimate by

the Union Oil Ministry, in 2012 as much as 40 per cent of the kerosene supplied was siphoned off

and sold on the black market. It is then used as furnace oil in industries and even used for adulteration

of diesel and lubricants. In India, it's the affluent who generally consume larger quantities of petroleum

products and electricity. The central government procures and supplies kerosene to the state

governments and Union Territories. Kerosene is one of the six commodities that are sold through

Public Distribution System (PDS) to ration card holders. The subsidy is provided to participating

companies who supply kerosene for the PDS. The quantity of kerosene on which subsidy is allowed

for each state are limited to the allocations made by the Ministry of Petroleum and Natural Gas.

Currently, Indian Oil Corporation Limited, Hindustan Petroleum Corporation Limited, Bharat Petroleum

Corporation Limited and IBP Company Limited are allowed to supply the kerosene.

LPG

The total subsidy provided to LPG consumers between years 2009-10 and 2012-13, which

increased from INR 160.71 billion in 2009-10 to INR 321.34 billion in 2011-12. The provisional figure for

April to September 2013 is INR 196.22 billion, which is more than half of last year's subsidy value. In 'per

unit' terms, LPG subsidy increased from INR 200.71 per cylinder in 2009-10 to INR 342.88 per cylinder

in 2011-12 and INR 405.67 per cylinder for the first half (April to September) of 2012-13. Domestic LPG is

subsidised by the central government under the PDS Kerosene and Domestic LPG Subsidy Scheme

2002. The subsidy is given to four companies which supply LPG: Indian Oil Corporation Limited,

Hindustan Petroleum Corporation Limited, Bharat Petroleum Corporation Limited and IBP Company

Limited. The central government also gives a freight subsidy for supplying kerosene and LPG to areas

such as north-eastern regions, Jammu & Kashmir, Andaman & Nicobar Islands, Lakshadweep

Island.

Source : PPAC (2013a)

PDS Kerosene per litre

FromGovernment

Budget

2006-07

2007-08

2008-09

2009-10

2010-11

2011-12

2012-13

0.82

0.82

0.82

0.82

0.82

0.82

0.82

15.17

16.23

24.06

14.85

17.39

26.44

31.16

15.99

17.05

24.88

15.67

18.21

27.26

31.98

22.58

22.58

22.58

22.58

22.58

22.58

22.58

156.08

214.05

234.88

178.13

249.94

320.30

427.14

178.66

236.63

257.46

200.71

272.52

342.88

449.72

Year By PublicSector OilCompanies

TotalSubsidy

Domestic LPG per Cylinder

FromGovernment

Budget

By PublicSector OilCompanies

TotalSubsidy

5


Subsidy Framework - Desired Elements

The design and implementation of any Cash Transfer system has many elements, all of which need to

be addressed for the cash transfer system to operate smoothly. Once a decision is taken for introducing

a cash transfer system, either for distributive reasons or for other reasons, it needs to be designed and

rolled out with a lot of planning and advance action. Any effective subsidy regime has to incorporate the

following elements :

1.Fully Electronic Service Delivery

There is a high level of user acceptance for electronic services, largely due to e-recharge for

prepaid mobile connections. Like users of prepaid mobile connections, while appreciating

the convenience of e-recharge, and the choice of locations, also have developed an expectation

of real-time delivery, beneficiaries would be in a position to accept real time transfer of

subsidy to their accounts.

2.Effective MIS Reporting

MIS modules that provide Governments with data and reports about the entire supply chain and

service delivery are an important part of the proposed subsidy framework. This would make it

possible for Government to take data-driven decisions and improve the quality of services. Data

analytics to enhance core decision making abilities would ensure better supervision and monitoring

of subsidy delivery.

3.Transparency in Subsidy Administration and Information Visibility

An important challenge with improving the effectiveness of any subsidy program lies in bridging the

information asymmetry. A large section of society is often unaware of their rights and the welfare

6


services offered by Governments. They face formidable challenges in accessing these services

and exercising their rights. A direct subsidy transfer framework facilitates monitoring the subsidy

transactions carried out at different levels. Information such as the availability of the product,

list of beneficiaries, and details of benefits drawn, among other things, provides a powerful

reconciliation and social audit mechanism. Performance of vendors who are servicing

beneficiaries on behalf of the Government can be routinely published on the Government's

website. Civil society organizations, activists, researchers, analysts, and local residents

themselves can use this information to highlight discrepancies and irregularities in social programs.

4.One Price for Subsidized Goods

The price of subsidized goods should preferably be the market price, or an administered price

that is close to the market price. This can reduce market distortions introduced by dual pricing,

improve the productivity of manufacturing and distribution, and reduce the incentives to pilfer. The

subsidy, when directly transferred to the resident or their family, provides the Government with a

targeting framework that can improve the effectiveness of the subsidy budget. The subsidy

can then be transferred directly to the beneficiary's bank account, thus ensuring that only the

individual and their family receive the subsidy.

5.Empowerment and Choice for Beneficiaries

The subsidy regime today for various products is designed with the objective of delivering

specific goods and services to pre-defined categories of citizens. Accordingly, the PDS is intended

to deliver food grains and kerosene to eligible beneficiaries. In case of the PDS, the consumers

have to purchase their subsidized products from the designated Fair Price Shops. In many of

these cases, both the product eligible for subsidy and the location of its purchase is pre-defined. To

this extent, the consumer's choice is restricted, both in terms of the product purchased and the

location of purchase. The direct transfer of subsidy to beneficiaries makes it possible for the

beneficiary to access the product or service from more than one pre-defined channels and

locations. Government distribution channels can co-exist with private providers in this subsidy

framework and the beneficiary could be provided a choice. This enhances the delivery of goods

and services for the ultimate beneficiary.

6.Efficiency in Production

Subsidies today are extensively used to incentivize the production and distribution of certain

goods and services. Over a period of time this has brought about market inefficiencies and the

over-crowding in the market of certain goods and services. Further, uncertainty in subsidy

policy also discourages firms from making large investments to improve production and

distribution. The direct transfer of subsidies to beneficiaries helps address such distortions, since

the manufacturers are no longer recipients of subsidies and can compete in the market. Efficiency

in production will be further encouraged by the absence of disincentives and uncertainty

introduced by subsidies on manufacture.

7


7.Transfer Mechanism

There is a large back-end infrastructure that is needed consisting of payment systems, bridges

between different IT systems (of banks, clearing houses, Aadhaar, etc.), clearing systems, and

soon, each of which has to be linked up with the other to be inter-operable. Further, detailed rules

and procedures have to be evolved and put in place for transfers to take place across all these

systems. All these have to have inbuilt checks and balances for traceability, preventing fraud and

facilitating audit of transactions.

8.Convenient and Effective Grievance Redressal

Advances in Information and Communication Technology can dramatically improve transparency

and bridge information asymmetry at all levels. The implementing Ministry can make a contact

centre available to beneficiaries for reporting grievances and malpractices. Today, such information

is usually available to decision makers and legislators only after a lag, when it is too late to take

action. Technology makes it possible for this information to be made available to decision

makers promptly.

Proposed System of Cash Transfer

Cash transfer of subsidy provides cash directly to a specific part of the population. Cash can be

transferred to the targeted population without stipulating any conditions. Alternately, cash can be given if

the targeted population meet certain conditions in order to avail of the cash. The Dhanalakshmi Scheme

of the Ministry of Women and Child Development is an example of conditional cash transfer where each

time certain conditions are fulfilled for a girl child, the family gets cash. The conditions include:

registration of the birth, immunisation, and enrolment in a school. Other programmes which use

conditional cash transfer are Janani Suraksha Yojana and the Balika Samriddhi Yojana. A third variant is

that credit vouchers are provided which can be used to avail of services from private sector providers.

These service providers will be reimbursed by the government. For example, the Rashtriya Swasthya

Bima Yojana enables persons below the poverty line to access health benefits from private

hospitals.

Conclusion

While there is no doubt that India will have move to a greater use of CTs instead of subsidies that

may not necessarily be the best option in all cases. It would be much more valuable if we use the process

initiated by the shift to cash transfers as a proverbial Archimedean lever: one that opens more

imaginative possibilities in addressing India's mounting agricultural and energy challenges. This paper

has examined the proposals to substitute fertiliser LPG and kerosene subsidies with cash transfers to

the end users. In both cases, a close examination of the objectives of the subsidies in the first instance

and the implications of the shift raises some demanding questions. The three items- fertiliser, kerosene

and LPG that are the focus of the budget proposals are not only important for the high costs on the

budget but they constitute two of the most singular challenges that India has faced in the past and will

8


undoubtedly face even more in the future: food and energy security, both at the national level and for the

hundreds of millions of India's poor at the household level as well. Starting from the vantage point of

strategy, it is not clear that a cash transfer is the appropriate policy option in the case of kerosene

subsidies, and in the case of fertilisers there are a host of implementation challenges and long-term

environmental ones.

References

lhttp://planningcommission.gov.in/aboutus/committee/wrkgrp12/wg_fert0203.pdf

lhttp://www.cbgaindia.org

lReport of the Expert Group on a Viable and Sustainable System of Pricing of Petroleum Products�, Ministry of

Finance, Department of Economic Affairs.

lIndia Expenditure Budget, Vol. I: 2011-2012�, Ministry of Finance, Department of Economic Affairs.

lPerspectives on Cash Transfers, Economic & Political Weekly, May 21, 2011 vol. xlvi no 21.

lResearch Report August 2012, Fossil-Fuel Subsidy Reform in India: Cash transfers for PDS kerosene and

domestic LPG.

lhttp://www.mit.gov.in/content/information-technology-act

lhttp://www.mit.gov.in/content/draft-electronic-service-delivery-bill-19

http://www.mit.gov.in/sites/upload_files/dit/files/Draft_Consultation_Paper_on_Mobile_Governance_28311.pdf

lhttp://www.thehindu.com/opinion/interview/cash-transfers-can-help-make-india-less-unequal-but-are-not-a-magic-

bullet/article4291270.ece

lhttp://www.finmin.nic.in/reports/IPFStat201213.pdf

lDutta, P, S Howes and R Murgai (2010): �Small But Effective: India's Targeted Unconditional Cash Transfers�, Economic

& Political Weekly, 25 December.

9

People in every workplace, talk about organisational culture as the concept that characterises a

work environment. One of the key assessments when employers interview a prospective employee

explores the ability of the candidate to fit in culturally. Culture is the environment that surrounds the

employee at work all of the time. While it is not always easy to capture or define, culture is an observable,

potent force in any organisation. Some people consider culture the glue that holds everyone together.

Others compare it to a compass providing direction. Culture creates a common ground for team

members, providing a sense of order that all team members know what is expected from them. It

contributes towards a sense of continuity and unity while offering a vision around which an organisation

can rally. At the observable level, culture is manifested in an organization's climate the behaviours

and strategies that can be managed in support of organisational goals.

This research work is an attempt to examine the influence of organisational culture on employees

work behaviour. We try to ascertain the influence that organisational culture has on employees work

behaviour, and to formulate recommendations regarding organisational culture and employee work

behaviour.

Key words : organisational culture, employees, employee behaviour.

Introduction

The culture of the organisation should be developed to support continuous improvement,

improve employees' style of performing their job and thus develop quality awareness. Organisational

culture has influenced employee work behaviour as a result of the acceptable behaviours and

attitudes to various jobs in the organisation. Organisational culture is a major determinant of an

employee's efficiency and effectiveness in carrying out their jobs. That is, organisational culture is one

of the major key determinants of how employees perform or behaves in his job.

Academic interest in organisational culture is evidenced by the level of attention it has

received over the last few decades. The relationship between organisational culture and employee

work behaviour has been the subject of abundant research in several fields. While this topic is rich in

studies, many researchers concur on the fact that there is no agreement on the precise nature of the

relationship between organisational culture and employee work behaviour.

Despite the plethora of studies on organisational culture in the last few decades, there is no widely

accepted causal relationship between organisational culture and employee work behaviour. The

empirical evidences emerging from various studies about the effect of organisational culture on

employee work behaviour have so far yielded mixed results that are inconclusive and contradictory.

Because of these contradictory results, the question of whether organisational culture improves

or deteriorates employee's work behaviour is still worthy of further research such as the one being

undertaken in this study. In addition, despite the existence of these studies, very little attention has

THE EFFECTIVENESS OF ORGANISATIONAL CULTURE ON EMPLOYEES BEHAVIOUR WITHIN MANAGEMENT INSTITUTIONS IN GWALIOR REGION

*Dr. Nandan Velankar ** Dr. R.C. Gupta

*Assistant Professor (Management), Prestige Institute of Management Gwalior, MP**Prof. (Commerce) Govt. MLB Art & Commerce College of Excellence, Gwalior

10


been given to management institutions. This research attempts to provide more empirical evidence on

the effects of organisational culture on employee work behaviour in management institutions in

Gwalior region.

Conceptual Framework

Organisational Culture

Brown (1998, p 9) defines organisational culture as �the pattern of beliefs, values and

learned ways of coping with experience that have developed during the course of an organisation's

history, and which tend to be manifested in its material arrangements and in the behaviours of

its members�. This suggests that organisational culture is articulated in the organisation, in order

to shape the way in which organisational members should behave.

Organisational culture is one of the symbols used for organisational analysis (Morgan, 1997).

In this symbol, the essence of organisation revolves around the development of shared meanings,

beliefs, norms, values and assumptions that guide and are reinforced by organisational behaviour.

Organisational values are important because they have effects on important individual and

organisational outcomes. Organisational values are expected to produce higher levels of

productivity (Jehn, 1994; Hall, 1999).

Organisational culture has been seen as the pattern or way a given group has invented,

discovered or developed in carrying out a particular task or solving a particular problem or useful and

effective in learning. This pattern must have worked well enough for the group to be considered valid

and therefore must be taught to new members or entrants as the correct way to perceive, think and

feel in relation to those problems. Organisation culture is a set of values that help organisational

members know that which is acceptable and that which is unacceptable within the organisation

(Ojo, 2010).

Behaviour

Behaviour is something psychologists have been trying to define for ages. Several theories have

come up and each has been right in a way. But we still don't have an exact definition for human

behaviour. We probably never will have one, because human beings change and each individual is

different from one another. It might be possible to have a few generalisations but the truth is that each

one of us does things differently.

Literature Review

Berson & Linton (2011) discovered that within the research & development (R&D) and

administrative environments, leadership behaviour of a manager is closely related to work

satisfaction of the employees.

Nielsen et al. (2010) have stated that leadership behaviour and job satisfaction will depend on

the organizational context; therefore another objective of this research was to understand how

the leadership behaviour of the administrator in different organizational cultures affects job

satisfaction.

11


Ojo, (2010) examined that organisational culture has been seen as the pattern or way a given

group has invented, discovered or developed in carrying out a particular task or solving a particular

problem or useful and effective in learning. This pattern must have worked well enough for the group

to be considered valid and therefore must be taught to new members or entrants as the correct way

to perceive, think and feel in relation to those problems. Organisation culture is a set of values that

help organisational members know that which is acceptable and that which is unacceptable within

the organization.

Jones, Chine and Ryan (2006) in some comparative works published said that seven dimensions

could be used to compare culture across organisations.

l Innovation and risk taking - willing to experiment, take risks, encourage innovation.

l Attention to detail - paying attention to being precise vs. saying its �good enough for chopped

salad�.

l Outcome orientation - oriented to results vs. oriented to process.

lPeople orientation - degree of value and respect for people. Are people considered unique talents,

or is an engineer an engineer an engineer.

lIndividual vs. team orientation - are individuals most highly noted, or are collective efforts

Aggressiveness taking action, dealing with conflict.

l Stability - openness to change.

McKinnon, Harrison, Chow and Wu (2003) state that there has been empirical research

conducted on organisational culture and organisational commitment, yet there has been little

to provide evidential support of the effect that organizational culture has on organisational

commitment.

Objectives

The objectives of this study are:

(i) To determine whether organisational culture influence employee work behaviour.

(ii) To examine whether a change in organisational culture will cause a change in employee

work behaviour.

The Study

The study is exploratory in nature and questionnaire survey is used to complete it.

Sampling Design

Population: Teaching employees of management institutions of Gwalior region.

Sampling Frame: Respondents from the management institutions.

Sampling Element: Individual respondents of various management institutions.

Sample Size: 75 individual respondents.

Sampling Method: Non probability convenient Sampling is used.

12


Tools Used for Data Collection

A self designed questionnaire is framed with the purpose to study, �The Effectiveness of

Organisational Culture on Employees Behaviour�.

Tools Used for Data Analysis

Chi-square was used to measure the discrepancies existing between the observed and expected

frequency and to proof the level of significance in testing stated hypotheses.

Hypotheses

H (1) Organisational culture has no significant influence on employee work behaviour.0

H(1) Organisational culture has a significant influence on employee work behaviour.A

H(2) A change in organisational culture will a change in employee work behaviour.0

H(2) A change in organisational culture will a change in employee work behaviour.A

Hypothesis Testing and Findings

i.Table � 1 depicts the gender wise distribution of respondents.

Table - 1Gender Wise Distribution of Respondents

Gender Frequency Percentage Rank

Male

Female

Total

50

25

75

66.67

33.33

100

1

2

Source : Based on primary data

There are 25 female respondents while 50 are male respondents.

ii. Table � 2 reveals the age wise distribution of respondents

Table - 2Age Wise Distribution of Respondents

Age Frequency Percentage Cum. Percentage

Below 30 years

30-50 years

Above 50 years

Total

21

46

8

75

28.00

61.33

10.67

100

28.00

89.33

100


46 respondents fall in the age group of 30-50 years while 21 respondents fall in the age group below

30 and 8 respondents fall in the age group of above 50 years.To examine the Organisational

Culture Influences on Employee Work Behaviour among the respondents, chi-square test was applied

and the results are given in Table-3.

13


Table - 3

Organisational Culture Influences Employee Work Behaviour

Observed (O) 2(O-E)

Strongly Disagree

Disagree

Undecided

Agree

Strongly Agree

Total

5

5

8

32

25

100


Expected (O)

15.0

15.0

15.0

15.0

15.0

(O-E)

-10

-10

-07

17

10

100

100

49

289

100

638

2Calculation of (c) 2 2c= ∑ (O � E) �M E d.f. = n-1

= 638 �M 15 = 5-1

= 42.53 = 4

Interpretation 2 2 Since the calculated value of c(42.53)is greater than the tabulated value of c(9.48)hence we

reject the null hypotheses (H) thus, the alternate hypothesis is accepted.0

�This indicates that organisational culture has a significant influence on employee work

behaviour�.

To examine that a change in organisational culture will cause a change in employee work behaviour

among the respondents, chi-square test was applied and the results are given in Table 4.

Table - 4

Observed (O) 2(O-E)

Disagree

Undecided

Agree

Strongly Agree

Total

8

15

30

22

75


Expected (O)

18.75

18.75

18.75

18.75

(O-E)

-10.75

-3.75

11.25

3.25

115.66

14.06

126.56

10.56

266.74

14


2Calculation of (c)

2 2c= ∑ (O � E) �M E d.f. = n-1

= 266.74 �M 18.75 = 4-1

= 14.22 = 3

Interpretation 2 2 Since the calculated value of c(14.22) is greater than the tabulated value of c(7.815)hence

we reject the null hypotheses (H) thus, the alternate hypothesis is accepted.0

�This implies that a change in organisational culture will cause a change in employee work

behaviour�.

Findings2 2a.In testing the first hypothesis, the calculated cis greater than the tabulated c; we therefore reject

the null hypotheses (H) and accept the alternative hypotheses (H). This indicates that 0 1

organisational culture has a significant influence on employee work behaviour.2 b.Finally, when the second hypothesis was tested it was also discovered that the calculated cis

2greater than the tabulated c; we reject the null hypotheses (H) and accept the alternative 0

hypotheses (H). This implies that a change in organisational culture will cause a change in 1

employee work behaviour.

Conclusion and Recommendations

In this study, we tried to look at the analysis of the influence of organisational culture on

employee work behaviour with evidence drawn from management institutions of Gwalior region. Self

designed questionnaires were administered to respondents who are teaching employees at various

management institutions. To find out their opinions and views about organisational culture and its

influence on employee work behaviour. The conclusions we can deduce from the study among other

things are that: (i) organisational culture influence employee work behaviour in the organisation. (ii) a

change in organisational culture will lead to a change in employee work behaviour. The following

recommendations are made to the management institutions of Gwalior region and organisations that are

interested in setting up or modifying their culture in order to improve their employee's work behaviour.

(i)Every individual has different culture and beliefs that he works with and when he comes to an

organisation that has a completely different culture and beliefs from his own, he must be allow to

internalise himself first with the organisation's culture and beliefs to know whether he can manage

with them or not. It is the ability of the employee to cope with the organisations culture that will

determine how he behaves at work. It is strongly recommended that management institutions of

Gwalior region should encourage new candidates to get internalise first with the organisations

culture to know whether they can manage with them or not.

15


(ii)Adequate motivational factors must be put in place in the organisation for employees because it

improves employee living standard and thus gingers employee towards achieving higher

productivity. It is strongly recommended that management institutions of Gwalior region should

provide adequate motivational factors like housing allowance, vehicle loan, holiday allowance,

health allowance, etc that will make their employee feel comfortable with themselves and their job

and thus thrive towards higher productivity.

(iii)When an organisational culture is unstable and changes from time to time, it makes the employee

discourage and tired of learning different culture all the time. It is strongly recommended that

management institutions of Gwalior region should operate with a strong culture and not weak

culture. It is a weak culture that changes from time to time. Strong cultures are cultures that are

established by the founders of an organisation to become the organisations way of life.

References

lOjo, O. (2010). Organisational Culture and Corporate Performance: Empirical Evidence from Nigeria, Journal of Business

Systems, Governance and Ethics, Vol. 5, No. 2, pp.1-12.

lOjo, O. (2008). Organisational Culture and Performance: Empirical Investigation of Nigerian Insurance Companies,

Manager Journal, No. 2, pp. 118-127.

lJones, M. C., Cline, M. and Ryan, S. (2006). Exploring Knowledge Sharing in ERP Implementation: An Organizational

Culture Framework. Decision Support Systems 41:2, 411-434.

th lCascio, W. F. (2006). Managing Human Resources: Productivity, Quality of Life, Profits.7Edition, Irwin: McGraw-Hill.

lShani, A.B. and Lau, J. B. (2005) Behaviour in Organizations: An Experiential Approach (8th ed.), New York: McGraw-Hill

Irwin.

lHall, R. (1999). Organizations: Structures, Processes and Outcomes. Eaglewood Cliffs, NJ: Prentice Hall.

lCable, D. M. and Judge, T. A. (1997). Interviewers Perceptions of Person-Organization Fit and Organizational Selection

Decisions. Journal of Applied Psychology, 82(4): 546-561.

l Jehn, K. A. (1994). Enhancing Effectiveness, An Investigation of Advantages and Disadvantages of Value-Based

Intragroup Conflict. The International Journal of Conflict Management, 5(3): 223-238.

16

*Assistant Professor, Jagran College of Art, Science & Commerce**Assistant Professor, Jagran College of Art, Science & Commerce

WORK LIFE BALANCE*Meenakshi Singhal**Mansi Pandey

Work life balance is about effectively managing the juggling act between paid work and

other activities that are important to us- including spending time with family, taking part in sport

and recreation. Research suggests that improving the balance between our working lives and our

lives outside work can bring real benefits for everyone. It can help build strong communities and

productive work-force.

TTM (Trans-theoretical model) can facilitate an analysis of the meditational mechanisms.

Interventions are likely to be differentially effective. Given the multiple constructs and clearly

defined relationships, the model can facilitate a process analysis and guide the modifications and

improvement of the intervention. TTM can support a more appropriate assessment of outcome.

Interventions should be evaluated in terms of their impact. The trans-theoretical model has been used

to understand the stages of individual process through the cognitive and behavioral process they

use.

�Change, like any meaningful endeavor proceeds sequentially through stages.�

Introduction

'Space we can recover, lost time never'- Napoleon

In the contemporary parlance the modern man is often in a state of flux the two main forces

that are constantly pulling are WORK & PERSONAL LIFE. 9 A.M to 5 P.M boundaries are getting

more and more porous- at 11 A.M one may attend a PTA, at 7P.M could at be the valedictory

function of a conference; often the critical periods also coincide. However WLB is not a myth.

It may be achieved with some strategies.

To focus on how to successfully combine work and personal family relationships and leisure time

into a satisfying life. Work life balance is a concept including proper prioritizing between

�work� (career & ambition) & �life style� (health, pressure, leisure, family & spiritual development /

meditation)

There is a myth that �WLB� means spending 50% of your time at work & 50% of your

time at home. In reality WLB occurs when an individual with a finite amount of mental, physical and

emotional resources allocate those resources in way that corresponds their personal and/or

professional goals, many studies have found that there is no gender differences in experience

of work life conflict.

Reasons for Imbalances :- Competition, individual career ambition, global economy, longer working

hours.

Work life balance entails having some breathing space for yourself each day; feeling a sense

of accomplishment, while not being consumed by work and having an enjoyable domestic life without

short-changing career obligations and its rooted in whatever fulfillment means to you within

24-hours, seven days a week and however many years you have left.

17


Six discipline support work life balance, though individually none are synonymous with WLB.

These discipline includes: self management, time management, stress management, change

management, technological management, leisure management.

�Work life balance is the ability to experience a sense of control and to stay productive and

competitive at work while maintaining a happy, healthy home life with sufficient leisure time. Its

attaining focus and awareness, despite seemingly endless tasks and activities competing for your

time and attention.�

�Work life balance - that perfect combination of career, family and individual time.�

WLB is where work interacts positively with all the other activities important in life. Example family-

time, leisure, self-development, community participation, care responsibilities .

WLB will vary for each person and will change throughout life.

�All I really care about is doing my part to help you get to your greatness. To help you reach your

best at work. To help you find happiness at home, to help you make to work.� � Robin Sharma

Importance of WLB

When your life is well organized you feel happier and more energized. You accomplish more at a

faster pace. You focus on the right things.

lFeeling valued :- Work life balance policies such as flexible hours, chance to work from

home when sick are just some of the ways that employees will be made to feel empowered, valued

and trusted members of the work force.

lIts individual :- Each individual will have different needs to achieve their own personal

WLB. One person may want to work from home seven days a week, or take most of their

annual leaves on Fridays or Mondays so they can take small trips. Parents on the other hand

needs flexible working hours and be able to work school times to fit in with dropping off

and picking their kids up.

lA better work environment :- If employees feel that their needs are being met, they are more

likely to be happy, creating a more pleasant atmosphere in the office, they will also be driven to

achieve the best results possible and will want to stay employed.

lAttracting the cream of the crop :- It is common today for many businesses to list some

of their WLB policies or stress that they have them when advertising a role within their company by

having these policies in place. You will attract many applicants and will have a selection

of the perfect candidates that will be eager to work for you and will enjoy and appreciate the benefits

you offer your staff.

lIncreased productivity

lIncreased employee engagement

lReduced absenteeism

18


lHigh morale

lOther importance

a.Individual :- Both employee and employer are happier and productive.

b.Family :- Improved relationship, better interpersonal relationships more time to self and spouse,

involvement with child care/ leisure.

c.Community :- Participate in community activities. Be a role model of WLB appreciated and

evaluated.

d.Organizational :- Work from home opportunities.

e.Simulated work place :- Flexi-timings.

(TTM) appears to be most befitting to address WLB.

The Trans - Theoretical Model is a model of intentional change. it is a model that focuses on the

decision-making of the individual. This model has general implications for all aspects of intervention

development and implementation. Traditional interventions often assume that individuals are ready for

an immediate and permanent behavior change. Trans-theoretical model makes no assumption about

how ready individuals are to change. it recognizes that different individuals will be in different stages

and that appropriate interventions must be developed for everyone. As, a result, very high participation

rates have been achieved. The Trans-theoretical Model can result in high retention rates. Traditional

interventions often have very high drop out rates. Participants find that there is a mismatch between their

needs and readiness and the intervention program. Since the program is not fitting their needs, they

quickly drop out. In contrast, the Trans-theoretical Model is designed to develop interventions that

are matched to the specific needs of the individual. Since the interventions are individualized to their

needs, people much less frequently drop out because of inappropriate demand characteristics.

The Trans-theoretical Model can provide sensitive measures of progress. Action oriented programs

typically use a single, often discrete, measure of outcome. Any progress that does not reach criterion is

not recognized. This is particularly a problem in the early stages where progress typically does not

involve easily observed changes in overt patterns of behavior. In contrast, the Trans-theoretical Model

includes a set of outcome measures that are sensitive to a full range of cognitive, emotional,

and behavioral changes and recognize and reinforce smaller steps than traditional action-oriented

approaches.

The Trans-theoretical Model can facilitate an analysis of the meditational mechanisms. Interventions

are likely to be differentially effective. Given the multiple constructs and clearly defined relationships, the

model can facilitate a process analysis and guide the modification and improvement of the intervention.

For example, an analysis of the patterns of transition from one stage to another can determine if the

intervention was more successful with individuals in one stage and not with individuals in another stage.

Likewise, an analysis of process use can determine if the interventions were more successful in

activating the use of some processes.

19


The Trans-theoretical Model can support a more appropriate assessment of outcome. Interventions

should be evaluated in terms of their impact, i.e., the recruitment rate times the efficacy.

Stages of Change : The Temporal Dimension

The stage construct is the key organizing construct of the model. It is important in part because it

represents a temporal dimension. Change implies phenomena occurring over time. However,

this aspect was largely ignored by alternative theories of change. Behavior change was often

construed as an event, such as quitting, smoking, drinking, or over-eating. The Trans-theoretical

Model construes change as a process involving progress through a series of five stages.

lPrecontemplation :- It is the stage in which people are not intending to take action in the

foreseeable future, usually measured as the next six months.

lContemplation :- It is the stage in which people are intending to change in the next six months.

They are more aware of the pros of changing but are also acutely aware of the cons.

lPreparation :- It is the stage in which people are intending to take action in the immediate future,

usually measured as the next month. They have typically taken some significant action in the past

year.

lAction :- It is the stage in which people have made specific overt modifications in their life-styles

within the past six months. Since action is observable, behavior change often has been equated

with action. But in the Trans-theoretical Model, Action is only one of five stages.

lMaintenance :- It is the stage in which people are working to prevent relapse but they do not

apply change processes as frequently as do people in action. They are less tempted to relapse and

increasingly more confident that they can continue their change.

Process of Change

lConsciousness Raising :- At work place/ community level awareness example- showing

imbalance in a video clip. Looking for answer to some such questions- who am I? why am I here?

What is my work profile? What do I want to be remembered for? What do I look forward to after

work? The other questions about intra- personal + inter-personal relationship as one looks within

with the help of these queries ones strategies + weak spots may be identified and self-awareness

emerges, the grey areas are identified work life imbalance.

lDramatic Relief :- Giving time to one's subordinates on completion in time/extra time to interpret.

Self awareness about on unhealthy WLB may arouse anxiety and worry thus creating negativity in

ones perception of self. However the healthy models one may evaluate paves the way for

inspiration, intrinsic motivation, a drive towards the positive. For eg. Giving recognition to ones

subordinate for completing the work before the deadline. Alongside help your child to plan a new

game with friends. Psychodrama, role playing and modeling may be some special interventions

20


that manifest at the emotional, cognitive (thought processes, information interpretation) and also

behavioral levels- encompassing all the three WLB projected through the media or some

friends and colleagues shall be the inspiration.

lEnvironmental Reevaluation :- A healthy happy you. How one feels or processes information

regarding one's own WLB- how one is impacting the work place or personal life positively or

negatively. Empathy training. For eg. showing a video clip when as a child one's parents were only

demanding and not responding how one feels and how as a parent one is doing the same/at

workplace one bullies as one were bullied when one started working. The reflection & realization

that I am adversely affecting my surroundings (work & life both) would bring about a change in

attitudes and perception.

lSocial Liberalization :- Taking initiatives in both walks of life. Some empowerment programs /

procedures may be implemented at the community and corporate levels so that the imbalance

may be addressed.

lSelf-reevaluation :- As a competent worker/an involved parent. One's mirror image of the self as

a considerate supervisor, an involved parent and also a friend in need vis-a vis its otherside

may more people considerably.

lStimulus Control :- Make friend with, hang out with balanced people and evaluated their

behaviour. Maintaining a journal to identify the loop holes and addressing them. Self-help groups-

people who are sailing in the same boat can suggest simple ways and the recipient is at ease to

adopt the same- as he interpret these as tried and tested.

lHelping Relationships :- Rapport building, a therapeutic alliance, counselor calls and buddy

systems can be sources of social support. Scaffolding- where any sort of support- social or

professional may help a boost one's enthusiasm or coping skills.

lCounter Conditioning :- Leisure time activities to counter stress. Music, sports, social networking

sites, dramatics etc.

lReinforcement Management :- Self rewards and punishments. For example an outing with

family after completing a dead line, buying a favourite CD, spending some extra time at workplace

after diwali party etc. The recognition that one has been able to complete a task shall enhance the

self-concept and self-esteem, which is reinforcing by itself. However it is accompanied by social

recognition- the change takes the verb form-' I am efficient' (self-efficacy) .

lSelf Liberalization :- Brainstorming and action-orientation. Motivation research indicates that

people with two choices have greater commitment than people with one choice.

21


Conclusion

Freud believes that a normal person is one who can work and love. For a 'self- actualized'

(Maslow), 'fully functioning person' (Rogers), a balance between his personal life, work (professional life)

and leisure is accepted by most psychologists and other social scientists, TTM has addressed many

problems and WLB has been approached in the present work. TTM has been operationalized at

different stages and strategies/interventions are developed. Interventions challenge the negative

pattern at cognitive, emotional and behavioral levels hastily. We echo with Robin Sharma: �All I really

care about is doing my part to help you get to your greatness. To help you to reach your best at work to

help you find happiness at home. To help you to make you mark.�

References

lVelicer.WF, Prochaska.J.O, Fava, J.L. Norman, G.J,& redding C.A (1998) application of Transtheoretical model of

behaviour change .

lPro-change behaviour system, INC.

22

*CA Vinod Sharma

EMBRACING THE CHANGE AND HARNESSING COMPLEXITYREVISITING THE ASSUMPTIONS OF ORGANIZATIONS IN UNCERTAIN ENVIRONMENT

* Director, Jagran Institute of Management

Today Business and Organizations must learn to deal with uncertainty and complexity related to

production and delivery of increasingly complex products and services in a rapidly changing

uncertain environment. At times this raises and challenges the thoughts concerning the effectiveness

of traditional management methods, which primarily lay emphasis on efficiency and strategic

planning and control. An organization in today's context to be successful must learn to adapt, change

and be creative. Survival today requires businesses to learn to bring about self-transformation with a

view to adapt and change to harness and gain from complexity and uncertainty

The future is fundamentally uncertain, yet there are discernable directions, even if signs point to

conflicting and multiple outcomes. For some, uncertainty justifies not thinking about the future, while

for others the uncertainty is a source of opportunity. Without a concerted effort to be future-focused,

organizations run grave risks of diminished importance or even oblivion in the fluctuating world of the

early 21st century. Thinking about the future increases the likelihood of success in the long

run.

Thus the present study attempts to focus on how organizations can embrace change by

complexity and uncertainty. This paper is basically compilation of thoughts based on secondary data

that is available in the form of work of some distinguished authors. The study reveals that in

order to deliver sustainable performance organizations must have trans-disciplinary systems

and scientific approach towards analyzing patterns of change in the past thereby identifying

the trends of change in the present and extrapolate alternative scenarios of possible change in

the future, to help people and organizations create the future they desire.

Introduction

Industrialized countries are in a process of fundamental and rapid change. The globalization of

firms and markets has been the driving force behind a radical transformation process, which has

gained momentum with the information technology revolution and the liberalization and

deregulation of markets.

Globalization can be seen as a new stage in the development of the world economy;

thereby implying the merging of national markets into one borderless world markets, where

as "internationalization" in this context would refer to increasing border-crossing economic

activities. This has resulted in a growing worldwide integration and interpenetration of economic

activities. It has created new bases of competition such as quality and time, besides intensifying

price and cost competition by eroding national monopolies or oligopolies.

When faced with shifting market dynamics, emerging competitive threats, strategic mergers,

technology breakthrough or governmental imperatives, organizations must learn to redefine and

23


transform themselves, by building new capabilities as they move ahead. Identifying and responding

to undefined opportunities demands a deep understanding of values and clear vision. Given this

mandate it is really tough to identify new opportunities, launch new ventures and build them

into viable propositions.

All global players now must be able to produce high quality products on low costs, sell

them at a reasonable price and deliver them quickly and in time.

Meeting the above competition criteria is not enough. There is growing need for today;

firms' competitiveness depends increasingly on their capability to continuously innovate new

products and processes that better meet the demands of customers. Innovative companies

enjoy first-mover advantages in the product market.

Many organizations long for more stability, however savvy enterprises recognizes that this

present challenging environment provides fertile ground for finding and exploiting opportunities

provided they know how to adopt and acquire ability to become responsive towards the

environment in which they compete and operate.

The pressures facing multi businesses firms are multifaceted and unprecedented. The

demand is for having organizations designed to adapt to uncertain environment backed with

powerful corporate strategy. With competition intensifying companies are now discovering that

success depends on the combined assets, skills and capabilities of the firm as whole and not

silos.

As the market place changes and evolves, the task of delivering outstanding sustainable

performance has become highly complex. Increasingly it involves the organizational design of

management structures and control systems that drive the strategic change, capitalize on new

opportunities, and minimize risk all without hindering the company's flexibility and creativity.

Organizations who focus solely on core competencies and existing efficient processes

often become loser and those who remain successful do so by managing short run excellence

even as they drive long term innovation and change. All this calls for leading change and

organizational renewal, building organizational architecture that drives both incremental and 1disruptive innovations and technology.

If we look at as to what has changed in last few decades then we find that business today is 2being impacted by multiple forces, economic shocks, atomization of markets and demands,

borderless commerce, advances in technology, a sense of acceleration and deconstruction of

business. Monolithic markets of nineties have now migrated to micro-segmentation, multiple

competitors and short product cycles. Size does not guarantee continued success nor does a

good reputation. Of the 500 fortune companies, only few have figured in the top 100 list. Clearly

business is under an unprecedented pressure to perform and the key to perform in this highly

turbulent environment is to anticipate the future and work towards it.

24


The present study attempts to focus on how organizations can embrace change by

accepting complexity and uncertainty. The study reveals that in order to deliver sustainable

performance organizations must have a trans-disciplinary systems and scientific approach

towards analyzing patterns of change in the past thereby identifying the trends of change in

the present and extrapolate alternative scenarios of possible change in the future, to help

people and organizations create the future they desire. The challenge is to see beyond the

innumerable fragments to the whole, stepping back far enough to appreciate how things

move and change as a coherent entity.

Approach

Responsiveness to change � planning the Scenarios

�It is not the strongest, who survives, nor the most intelligent but those, most responsive to

change� � Charles Darwin. The need as of now is to focus on innovation and acquire ability to be

responsive to change, quality and process improvement, adoption of sound values and

management by fact and feedback. Ultimately the responsiveness will turn out to be the difference

between survival and demise. Rapid rates of change, an explosion of new insights from the life

sciences, and the insufficiency of the old machine model explains how business today really

works have revolutionized management thinking.

One of the biggest rewards from harnessing the complexity is achieving high rate of

delivery of new products and services coupled with rapid adaptation to changing conditions. By

investing in complexity, organization develop products and services through captive supply

chain, the model of self organizing networks. Innovative products and services emerge as a

result of a changing pattern of collaboration of network of suppliers, both by competing and

co-operating, each expert in its own domain. Organizing networks of captive supply chain is

characterized by long term relationships between the network participants, but does not always

require the same partners to be involved always and thus offer flexibility in terms of need

base association and separation for the production and delivery of different products and

services.

According to Richard Pascale if you want your company to stay alive and then try

running it like a living organism, where the first rule of life is also the first rule of business �

Adapt or die.

Four Common Principles of Life and Business

1Equilibrium is a precursor to death

When a living system is in a state of equilibrium, it is less responsive to the changes that are

occurring around it. It is most at risk when it feels most secure. Organizations often aim for s.

25


equilibrium, for a short period of time. Equilibrium is fine but prolonged equilibrium lulls organization

into comfortable routines.

�The Law of Requisite variety� states for any system to adapt to its environment, it has to

incorporate requisite internal variety to cope with variety from outside � the environment. Too

much equilibrium can be mortal, because when rules of the game changes once the winning

formula for any organization becomes their own worst enemy. It is evident that when the world

around is changing fast at unprecedented rate for any organization maintaining equilibrium is a

threat to its future existence. Organizations need new kind of agility that enables them to

reinvent. One of the recent examples is the demise of one of the great commercial Banks,

J. P. Morgan.

GE Capital Corp makes small acquisitions to revitalize their corporate gene pool. It amplifies

survival threats and foster disequilibrium to evoke fresh ideas and innovative responses.

Similarly companies like Capital One, Cisco and many more follow the same pattern of

creating disequilibrium.

2When threatened or when galvanized by a compelling opportunity, living things

move towards the edge of chaos

This evokes higher levels of mutations and experimentation and is more likely to result

in fresh new solutions. The edge of chaos is a condition, not a location. The objective is not

chaos but the edge of chaos, where there are more mutations and more possibility for

serendipity. Think about deadlines. When a deadline is far away, not much happens. As the

deadline approaches we feel the kick and start working to fulfill the same. If we wait for too long,

and try to do too much in too short of time, we freeze up and crash � in other words we have

gone over the edge into chaos. So it is very essential to understand the difference between the

two, as one is constructive and drive the passion to work and excel whereas other is

destructive and kills the motivation.

Reaching the location of edge of chaos calls for business associates to have charters to

innovate, visualizing themselves to the repository of ideas i.e. obsessed with creativity.

However one has to be cautious of not crossing the border and landing in a location of complete

chaos i.e. going off the edge completely. Allow associates to view themselves as entrepreneurs

who are responsible for identifying and creating new business ideas and solutions. Does this

means that the edge of chaos is a condition of relentless discomfort? The answer lies in the fact

that it is always uncomfortable when an environment has aspirations or structures that are

so strong that your discomfort makes you constantly hone your competitive edge. On

the other hand completely chaotic systems and organizations are non productive and

destructive by nature. So it is of utmost importance to find the edge of chaos, where company

can experience upheaval but not dissolution. Edge of chaos should be viewed as situation

26


for productive change. We can think of company 3M that foster this culture across the

organization.

3As living things move closer to the edge of chaos, they have a tendency to self-

organize, and new form emerges from the turmoil.

It refers to 'self-organization� and emergence which is a major source of innovation, creativity

and evolution. Organizations should be designed to exhibit self-organization and emergent

behaviors. Think of as to how Linux has spread. It represents an organization of open system

software programmers, who have managed to generate software for servers that host almost

more than 35% of the Web applications. These programmers represent an organization of

people, all independent, who come up with effective and robust solutions in their software

because it's constantly being tested and evolving in real time.

Another example of successful self-organizing system could be cited as of Tupperware

worldwide. Each dealer is self-employed and must recruit others to host parties, those who

excel, as a host becomes dealers and the most successful dealers become the Team leaders.

It is claimed that more than 80% of homes in USA alone have at least one Tupperware

product in them.

If you are attempting a fundamental reinvention of how your organization approaches the

world, then clearly you need that collective intelligence, so as to arrive at solutions that all of

the stakeholders have to say and can come to grips with.

The way we manage organization will increasingly lay its foundation on living systems.

In fact an organization is a living system, once we get the foundation of how living things

work then the idea like self directing teams will become part of a fundamental set of

beliefs which states very clearly that in this era of change, we must enroll the entire organization

in discovering the way ahead.

Chaos is not the random, lawless, and meaningless behavior it appears to be. Instead,

chaos is stable globally and unpredictable locally.

4Living systems cannot be directed along a linear path.

Unforeseen consequences are inevitable. The challenge is to learn how to disturb them in a

manner that approximates the desired outcome and then to correct the course as the outcome

unfolds. Unforeseen consequences are inevitable. The real challenge is to disturb them in a

manner that approximates the desired outcome.

Disturb, don't direct means that we must rethink our old notions of social engineering within the

companies. Leaders must change their outlook of preconception that their job is to make

hierarchy perform. Today's leader must remember that they need to design organizational

27


structures that are adaptable to change � self-reorganizing. They all need to understand that in

living systems, things happen that they can't predict, and once they do, then those events can

set off avalanches with consequences that they could have never imagined.

Findings

Reorganizing for Emergence

At this point of discussion we can conclude that business doesn't unfold in a predictable, linear

manner, so we need to carefully think upon the rules, principles, inferences that we can draw that

most apply to this hyper turbulent and dynamic environment where nothing is certain. If we analyse

the above statement carefully then it simply implies that success of an organization in future

depends on its ability to plan the business scenarios well in advance and accordingly reconfigure its

resource base with reference to participants of its value chain.

We can think of no concrete solutions however one can frame certain basic guidelines and they

are enumerated as follows:

1Design, don't engineer

2Discover, don't dictate

3Decipher, don't pre assume

Evolve design principles that disturb, but don't direct. People often rely on social engineering

to create and enforce the rules, so it is better to design rather to dictate. As events unfold, figure

it out the effects � things that could never be predicted, but that need to be considered

mainly because outcomes can't be dictated they have to be discovered as and when they happen.

Once outcomes start emerging you can't dictate the fastest solution everywhere. You need to

decipher, and not presuppose, and this calls for creating a design for an organization that allows

a community to learn from itself, to come up with its own solutions to its problems. And then to

have restraint not to try to impose those solutions on every other community in the name of

efficiency as each living system has unique DNA pool and the same cannot be replicated

exactly. Organizations are living systems having their own gene pool and hence will have different

approaches and styles of dealing with uncertainties prevailing in the environment in which they

compete and operate. Through self-organization, the behavior of the group emerges from the

collective interactions of all the individuals. Often individuals if follow simple rules, the resulting

group behavior can be surprisingly complex and remarkably effective. Organizations that will last

for long need to certain attributes such as Flexibility, Robustness and Self Organizing. We need to

think today's organization as self directing living entity where role of leaders is to provide enough

fertile ground where self awareness and realization leads to intrinsic motivation, creativity and

innovation which are rules of the games of the new knowledge based economy.

28


In our today's world of fast changing markets, evolving competitors and technologies, there is a

constant need to keep revising and updating knowledge and information about possible markets,

customer needs and technical possibilities � PLAN THE SCENARIO.

According to plan the scenario we should think about alternative descriptions or stories

of how the future might unfold. Scenarios compile information about divergent trends and

possibilities into internally consistent images of plausible alternative futures. Scenarios are

designed to systematically explore future challenges and opportunities and aid in strategy

development. In the process, they often provoke the imagination, raise fundamental questions,

make explicit our deeply held values, and stretch our world views. Scenarios are not predictions

of the future, as there are NO future facts. Rather, they encourage people to think about how to

navigate successfully across the different circumstances that might be encountered. Scenarios

can expand our 'field of view' and help people to see possible threats and opportunities that

would otherwise have remained hidden.

Scenarios are an investment in learning. A set of several significantly different scenarios

helps �bound the uncertainty� of the future so that organizations can systematically plan for future

contingencies and clarify their vision of the future they prefer. Scenario thinking is real one and not

the end product, but merely a powerful tool.

Organization can't afford to imagine and design products and services which they feel might

succeed, thereby organize a system to produce and deliver the same �the efficient frontier. Imaging

about products and services that have customer appeal forces organizations to explore the

possibilities and decide accordingly (Creativity), followed by strict execution of what has

been decided to gain maximum advantage of efficiency in operations (Mechanical and

Economic optimization.), both are opposite qualities required.

Imagination and creativity thus must precede efficiency of execution. Role of creativity and

ability to explore the possible scenario will be the deciding factors of success. Exploration and

experiment means developing ability to tolerate �failure� and being open to new thoughts and ideas

to harness the true benefits from complexity by developing long term social relationship among

the participants of value chain.

Imperatives for succeeding in Uncertain World

Corporations will have to develop a new dynamic approach to strategy formulation -

collaborative, drawing on key signals from all quarters, and constantly evolving in the light of new

circumstances. Leaders of these corporations will seek to build resilience and flexibility into the

very fabric of the organization, by developing a set of core capabilities.

Corporations who succeed in the future will be those whose leaders remain steadfast in the ely.

29


face of uncertainty, and who have the qualities to manage change effectively. Organization must

plan their scenarios for future and accordingly plan to allocate resources.

In order to arrive at what you do not know, you must go by way of ignorance.

In order to possess what you do not possess, you must go by way of dispossession.

In order to arrive at what you are not, you must go through the way in which you are not

References

lRichard Pascale, Surfing the Edge of Chaos

lKevin Kelly, New rules for the new Economy

lAllan M Webber, How Business is lot like life

lJeffrey Goldstein, Self- designing organizations

lJames Moore, Advent of Business Ecosystem

lTapscott, D., Digital Economy. Promise and Peril in the Age of Networked Intelligence McGraw-Hill,

New York

lTeece, D., Profiting from Technological Innovation: Implications for Integration, Collaboration, Licensing, and

Public Policy,

lHarper, The Competitive Challenge: Strategies for Industrial Innovation and renewals

lPrahalad, C. and G. Hamel, The core competence of the Corporation,HBR

lEliasson, G, The Knowledge-Based Information Economy, in Eliasson, G

End Notes

I. A �Disruptive Innovation� is a successfully exploited product, service or business model that significantly

transforms the demands and needs of a mainstream market and disrupts its former key players. Mainstream

markets do not initially appreciate its set of performance attributes, highly rated by niche market customers.

Mainstream market customers as well as competitor's value different performance attribute sets and therefore

view the innovation as substandard.

II. AtomizationDefined as the disintegration of an industry chain into ever smaller segments and

niches, atomization is also visible in the computer industry, among others.

30

*Assistant Professor, Jagran Institute of Management, Kanpur

ASBA (Application Supported by Blocked Amount) is an additional payment mode to stapply for IPO/FPO/Right Issues. It was introduced in India on 1 September 2008 by SEBI

with a view to make the existing public issue process more efficient. Initially it was introduced for retail

investor, At present all categories of investors are eligible to apply through ASBA mode.

This facility allows investor to apply for public offering with the money moving out of

bank account only after allocation of shares. The application money will remain blocked in the bank

account till the finalization of basis of allotment of the issue and will be earning interest during the

intervening period. The bank shall within the issue open period, upload the application data in the

electronic bidding system. Once the basis of allotment is finalized, ASBA bank will transfer the

requisite amount to the Registrar for share being allotted, and unblock the remaining amount.

This paper explain the mechanism of ASBA process and highlight the various issues

involved in this facility which need to be seriously addressed by the regulators (SEBI and RBI). There

are certain areas where ASBA banks have contradict guidelines from the regulators. In the absence of

clear cut laws governing this facility, the whole ASBA process needs to be restructured. Paper also

takes up the issue from AML (anti money laundering) angle and addresses the need for plugging the

loopholes. Beside this it also talks about the benefit and changes in primary market with the

introduction of ASBA reforms.

Introduction

ASBA refers to the application mechanism for subscribing to IPO. The system which

ensures that the application money remain in investor bank account till the shares are allotted.

The scheme was introduced for retail investor, now it has been extended to corporate investors

and HNI as well. The mechanism requires the applicant to give an authorization to block his/her

application money in the bank account for subscribing to the public offering. Applicant's bank

account is debited only after the basis of allotment is finalized or when issue is withdrawn or

fails. ASBA can be availed only to subscribe to book building issues and select right issues.

For maximum participation of retail investor SEBI has raised the maximum amount for bidding for

retail investor from Rs 1 lakh to 2 lakh.

Only certain designated banks such as Self Certified Syndicate Banks (SCSB) can offer

this facility to the applicants. The applicant can submit the ASBA application to the SCSB

(with whom he is maintaining the account) to block the fund to the extent of application money

for the purpose. This facility can be availed by either submitting up the form online or by

using internet banking facility. The fund remains block till the finalization of basis of allotment

and demand from Registrar to transfer the amount. In case of partial allotment the amount

ASBA IN INDIA AND AREAS OF CONCERN

FOR REGULATORS *Mrs. Anu Jajoo

31


so demanded is debited to clients account and remaining fund is unblocked. Following figure

shows the whole process of ASBA application

Benefits to the Investor

ASBA mode scores over traditional mode of cheque payment for applying in IPO as

it enhances the transparency of the share allotment process and reduces the lags in

application process. Investor stands to benefit on the following grounds :-

lFirstly, as money is only blocked and remains in the bank account applicant does

not lose out on the interest that can be earned during the period in CASA.

lSecondly, there is no worry about the refund. Instead of earlier waiting period of

getting the refund cheque in case of non allotment/partial allotment, there is no

Source: NSE India

32


waiting period in ASBA process and the application amount is unblocked immediately

after finalizing the allotment.

lThirdly, on allotment the status of allotment can be ascertained from the branch.

lFourthly, during the bidding period applicant can approach bank for withdrawing

application and unblocking the amount before 3 hours of closure of bid period. Even

after the bid closure period applicant can still send a withdrawal request to the

Registrar. Subsequently Registrar will ask SCSB concerned to unblock the application

money.

Impact on Primary Market

stData available from Registrar showed that large public issues floated after 1 May 2010,

have seen a very good response for this mode of payment. Market regulator SEBI intends to

reduce the time for public issue to 7 working days from earlier 12 days, for which ASBA must be

successful. An internal SEBI study shows that average number of individual investor has risen

over 3 times to 1.17 lakh since various regulatory reforms including ASBA. Investors are

now directly able to submit ASBA application in more than 67000 bank branches as against

less than 10000 branches that existed before.

Earlier the broker group did not promote the scheme as there was no direct incentive attached

for them for ASBA application. Later SEBI decided to give 1.5% brokerage for client application

through ASBA route.

Areas of Concern

Growth in individual participation and bringing down the time taken between closure

of IPO and listing of securities seems the right step by SEBI but it would be better if the entire

scheme is reviewed by SEBI and RBI. Some of the issues which needs to be addressed

are :-

lFive different applications for an issue under one ASBA is allowed. That means

ASBA bidder can be different from ASBA account holders. As per scheme an ASBA

application is accepted after verifying account holder authorization. Bank ignores

anti money laundering angle. It is not clear that what is the relationship between the

SCSB and the third party which is applying through the bank's account holder. It

seems to be a breach of KYC norms.

Where ASBA bidder is different from ASBA account holder, there arise ambiguities in

the case of death of account holder. It is not clear whether the instructions are still

operational or not. In case where the heir /nominee of deceased account holder files

countermanding instructions, there is no legal document that could support the bank

position.

33


l

case where balance is held in account, bank has a charge as Banker's general lien. Thus

a bank has explicit right to hold the credit balance till dues of the customer are paid.

What is the nature of charge bank enjoy on the balance so held in the blocked form.

Blocking and unblocking is simply the technical mechanism, while the forces of law decide

its legal enforceability. There is a lot of confusion over the situation where bank gets

an attachment/freezing order from other authorities under the provision of various laws.

On what grounds bank can refuse to acknowledge the attachment order in the absence

of legally tenable document that would support SCSB to hold the legal control over the

blocked amount. Bank has no clear-cut guidelines to pay to the Registrar on behalf of

bidder. This confusion amounts more when bidder is not even the client of the

bank.

Bank position is weak even in the court because in absence of charge, holding a

control over funds to secure a contingent claim will not be entertained in financial courts.

(as on the date of receipt of attachment order there may not be any claim from Registrar,

claim arise when shares will be allotted) . Situation is crucial when the investor is big

stakeholder. It may create a systemic problem and a big financial suffering for

SCSBs.

lAs per RBI Notification, lien on CASA deposit would be inappropriate. This ambiguity

need to be resolved soon as without lien providing ASBA facility may lead to confusion

to the SCSBs. It is obviously difficult for the banks to comply with the conflicting

directions of SEBI and RBI. There are no guidelines from RBI which ban ASBA against

term deposit. That means blocking the fund in OD account against term deposit is

also allowed.

lThe whole process of ASBA can be viewed as the guarantee payment to the Registrar

from SCSBs, for which banks may in few cases suffer financially. Bank guarantee has

cost implication. In this respect also a clear regulatory view should be there from

banking regulators.

lSCSBs in a way take a financial exposure, but the exposure limit is shown nowhere in

the books. There may not be a problem from CRAR ( Capital to risk weighted Assets

ratios), but there could be some concern from the disclosures that are required from

Single/Group borrower's limits.

lThere are chances of operational fraud by bank employee, where they can upload a

bid without blocking the full amount or not blocking at all and client can deposit the

money just before the final allotment. Chances for such irregularities are high when

bank apply in their own name.

When bank mark collateral on deposit security, an agreement of pledge is executed. In

34


l

period the money is in application (before allotment). Moreover in debt issue basis

of allotment is First come First serve. So there is a fair chance for investor applying in

initial period.

SEBI's move can be interpreted as a way to promote investor participation in primary

market. There is chance to make money from IPO as long as investor and market sentiments

are bullish for the issue. ASBA is successful in this respect because an investor can a

ggressively participate in the issue by applying multiple applications in the name of his

family members, as five applications are applicable from one ASBA account.

Conclusion

Banks must understand the risk associated with the facility especially with the entry of

institutional investors, QIBs etc where it involves huge financial loss. Regulators need to clarify

the issues involved as it does not seems feasible for a individual bank to exclude itself from the

scheme, because it may have negative effects on its business.

References

l

lwww.sebi.gov.in

lEconomictimes.indiatimes.com

lArticle by Shivprasad Laxman Chhatre in allbankingsolutions.com

lIPO/FPO � Initial Public Offer/ Follow On Public Offer

lASBA -Application Supported by Blocked Amount

lCASA � Current account Saving account

lQIB � Qualified Institutional Buyers

lKYC � Know Your Customer

lSCSB- Self Certified Syndicate Banks

ASBA makes no sense for debt issue as now the Debt Issuer provides interest for the

www.nse.india.com

35

*Dr. Rachna Chaturvedi

WOMEN ENTREPRENEURS: REASON FOR JOINING NGO'S

* Assistant Professor, Jaypee University of Engineering & Technology Guna, Madhya Pradesh

Women's nonprofit organizations have long played an important role in the lives of women .In

India, well-educated and affluent women found socially sanctioned work outside the home in the

voluntary sector. They worked as volunteers under the aegis of religious organizations and for social

service where profits are dedicated to the alleviation of poverty. Participation with nonprofit

organizations in India gave women an opportunity to enter the social and political spheres in ways

often denied to them by the for-profit and public sectors. Important changes in women's lives are a

direct result of the intervention of nongovernmental organizations (NGOs). This paper examines

entrepreneurship involved in initiating such NGOs. Entrepreneurship, has been defined in the for-

profit literature as �the catalytic agent in society which sets into motion new enterprises, new

combinations of production and exchange�. Although the concept of entrepreneurship is closely

linked with the for-profit sector and may seem strange in the NGO world, it is not. The same

entrepreneurial spirit is key to initiating projects and mobilizing resources, whether it is for promoting

a social cause in the nonprofit sector or promoting a profit-making enterprise. This paper examines

women entrepreneurs in the nonprofit sector. Entrepreneurial activity attracts certain kinds of

individuals. Such self-selection is not a random event but is influenced by personal characteristics as

well as socioeconomic and cultural factors. The paper examines women entrepreneurs

in a particular segment of the nonprofit sector in India to determine which factors influence

such self-selection.

Key words : Non Profit Organisations, Women Entrepreneurs, Socioeconomic Factors

Introduction

Women's nonprofit organizations have long played an important role in the lives of

women. In India, well-educated and affluent women found socially sanctioned work outside

the home in the voluntary sector. They worked as volunteers under the aegis of religious

organizations and for social service nonprofits dedicated to the alleviation of poverty. Participation

in nonprofits in India gave women an opportunity to enter the social and political spheres in

ways often denied to them by the for-profit and public sectors. Important changes in women's

lives are a direct result of the intervention of nongovernmental organizations (NGOs).This paper

examines entrepreneurship involved in initiating such NGOs. Entrepreneurship, has been

defined in the for-profit literature as �the catalytic agent in society which sets into motion new

enterprises, new combinations of production and exchange�. Although the concept of

entrepreneurship is closely linked with the for-profit sector and may seem strange in the NGO

world, it is not. The same entrepreneurial spirit is key to initiating projects and mobilizing

resources, whether it is for promoting a social cause in the nonprofit sector or promoting a profit-

making enterprise. Both kinds of enterprises are the result of the entrepreneur's innovation,

leadership, imagination, efforts, and ability. Thus, using the definition from the for-profit literature,

36


we define a nonprofit entrepreneur as a self-directed, innovative leader who starts nonprofit

enterprise .The individual women entrepreneurs who have successfully established NGOs ask

the following questions: What are the characteristics of women entrepreneurs in this sector?

What motivates them? In addition, are there any structural and cultural factors relevant to

women's entrepreneurship of NGOs? Entrepreneurs in both sectors face similar challenges:

identifying opportunities, promoting innovative ideas, implementing ideas into viable enterprises,

mobilizing resources, and undertaking risks inherent in starting a new project. This suggests

that entrepreneurship in the for-profit or nonprofit sector are related, although the primary

motivations in the two sectors differ�making profits versus promoting a social cause.

Furthermore, entrepreneurs in both sectors are equally vulnerable to the personal, structural,

and cultural environments in which they live.

Given the paucity of entrepreneurial literature in the nonprofit sector, especially in the less

industrialized countries, it was found that cultural values and norms are critical in explaining

entrepreneurship. The individual's decision to start a business is affected by factors such as family

support, qualifications, business experience, and socioeconomic and personality characteristics.

Following are brief overview of the factors influencing the women entrepreneurs to join an NGO

(I) Socio-economic Variables

In this section we examine a variety of socioeconomic variables, including education, work

experience, income, and marital and family status, to determine their influence on women

entrepreneurs of nonprofit organizations.

a) Education and Experience :- In a heavily bureaucratic country like India, only highly

educated entrepreneurs could successfully negotiate the administrative requirements

necessary in founding and running an NGO. Usually women who had previously worked as

social workers, or had experience to run the NGO rather they have insights into current

social issues. The skills required in founding a successful NGO are interpersonal skills,

education, administrative skills, experience in non profit sector and leadership roles.

b) Income :- Most of the founders of NGO's came from either upper or middle-income

groups Sufficient family income allows women to pursue their goals in starting NGOs and

forgo higher market incomes. In the cases where family income was insufficient, human

capital had allowed them to pursue income-producing employment at the same time as

founding the NGO.

c) Marital Status and Family Responsibilities :- In India, the cultural norm dictates that

young couples live with the husband's family as an extended family, which involves

shared domestic and financial responsibilities. Furthermore, upper and middle-income

households have access to inexpensive labour to help with household and childcare

chores this allowed them to work |outside the home. So the marital status and childcare

responsibilities did not affect the women's decision to start an NGO.

37


d) Financial Capital and Personal Connections :- Access to, or the lack of, financial

capital is not a crucial factor in the decision making for many of the NGO entrepreneurs.

Usually all of the NGOs start with little financial capital because their needs are minimum.

Start-up financing from other NGOs was common for these needs. In most cases, the

NGOs often rely on volunteer & labour; this often includes recruiting friends and family.

Personal connections gave many of the women access to volunteer labor and

donations.

e) Role Models :- The for-profit literature suggests that entrepreneurial husbands or other

family members positively affect women's decisions in becoming entrepreneurs. This is

also true for the nonprofit sector. Despite the diverse family backgrounds, many

entrepreneurs come from families in which parents were highly involved in either providing

or advocating for social services. Parents, as role models, are highly influential in shaping

the values of social justice among the women entrepreneurs. Parental influence, �made me

decide to do social work and volunteer.� Thus, in the nonprofit sector, the human capital

(influence) of parents differs from the for-profit sector, where the parents provide skills and

experiences of running a for-profit enterprise. In the nonprofit sector, parental influence

helped shape values and actively supported the mission of the NGO; this was critical to the

founding of the NGO. And in a practical way, parents often helped by volunteering at

the NGOs and sometimes donating money.

II) Motivational Factors

a) Desire to Serve Others :- Women are motivated by the need to serve others and

believed they could best do so under the aegis of an NGO.. The desire to serve

others and make people aware of their human and constitutional right had motivated

them to start an NGO.

b) Needs in Community :- Many feel that they perceived a need in the community that

was not being fulfilled. Many of the women are motivated by the rural women's needs,

which have been ignored or call for specific political or judicial action. It has been claimed

that a �great need to bring about self-awareness among women� and �stimulate a wider

and deeper knowledge of the problems�.

c) Desire to Achieve Change :- Many women stated that they are motivated to found the

NGO in order �to achieve change� i.e. to �change people's outlook towards unwanted

children�; another believed that it was necessary to �make changes in the structural and

legal facilities to fight injustices towards women. The study shows that the lack of

education and resources, combined with an unsympathetic police and judicial

system, make lower caste rural women vulnerable to social abuse and that change

was paramount in achieving social justice.

38


Suggestions

Despite the problems, certain policy suggestions have been suggested as an interest to

government and donors. Governments in many countries, due to poverty or ideology, do not

provide many social services for the poor. They may see NGOs as alternative providers of public

services and sometimes encourage such activity through tax subsidies and other means. Thus, it is

not unreasonable to assume, from a public policy perspective, the need to encourage the founding

of such NGOs and to ensure that those founded are sustainable and successful. Furthermore,

donor's local and international who are keen to promote women's issues are interested in

encouraging start-ups and ensuring that the NGOs they fund are successful. Governments and

donors can make an effort to ensure that more women, especially of lower castes, receive higher

education and training in interpersonal skills and are recruited to volunteer. This may help reduce

the tendency for only upper class women to start NGOs. Furthermore, there is a need for public

support to enable wider diffusion of some of the key themes that are part of the feminist

perspectives, namely, concern for equity and social justice. If more people, both men and women,

are exposed to such ideology, more may take action in the form of starting NGOs or support the

entrepreneurs that do. It may be of value to ensure that those involved in social work and in

volunteering be targeted to receive publicly available resources to support

the formation of organizations. These include training programs and mentoring services to

facilitate the formation of NGOs. If such programs can be made available to those who are

contemplating starting NGOs, or who are in the process of doing so, they may be able to

increase the new entrepreneurs' chances of success. Although this study cannot shed light on

NGOs that were started but were unsuccessful, it sheds some light on where to direct information

and training resources so that the likely pool of NGO founders is targeted early on, when making

good decisions is critical.

Conclusion

All women entrepreneurs share a feminist ideology and a desire to help others. By founding

an NGO whose mission is closely related to their ideology, they are able to actualize their

beliefs, and this affords them a high level of satisfaction and accomplishment. Earnings and

independence seem to be secondary to pursuing the mission of the NGO. Lack of access to

financial capital does not pose a major challenge to entrepreneurs in this sector; what is essential

is access to volunteers and donations, initially through personal networks. Neither the number

of young children nor the presence of a husband affects women in their decision to start an NGO.

It is not that the women are immune to childcare and domestic responsibilities but that they

receive help from either their husbands or family members by living in the extended family

structures that are common in India. This gives them the flexibility to pursue their goals of starting

and running the NGO. Thus, their choice is not contingent on childcare costs or household

responsibilities. These resources, however, would also have been available for other kinds of le or

39


employment, and thus this factor does not completely explain why women choose

entrepreneurship in the nonprofit over the for-profit sector. Parental role models and early

professional and volunteer experience served to raise their awareness and motivate many of the

women to pioneer NGOs to pursue social justice. Because they are self-professed feminists, it is

not surprising that they choose to start NGOs addressing women's issues to remedy social

injustices and work for change. Interpersonal skills were paramount in their starting NGOs,

especially because they had to mobilize resources such as volunteer labor and donations

through the help of family, friends, and others. Because starting an NGO requires an unusual

reliance on friends and the local community to mobilize resources, being educated and

belonging to a high status provides the required connections to facilitate this resource

mobilization. Furthermore, many of the issues that the NGOs take on are deeply embedded

in the traditional, cultural, and religious fabric of society, and rallying the support of local

communities in rural areas is often extremely difficult. Women who take a stand against the

local practices are often subject to harassment from the community and receive little or no

support from the local police when filing complaints or seeking help from local public agencies.

Thus, feminist, educated, self-confident, and affluent women, from respected echelons of

society, are more likely to succeed in dealing with local bureaucracies and the police on

socially controversial issues. Thus, it is likely that the woman entrepreneur of an NGO dealing

with socially sensitive and controversial issues is an educated individual who comes from a

middle- to upper-income household.

References

lBlanchflower, D. G., and Oswald, A. J. �What Makes an Entrepreneur?�Journal of Labor Economics, 1998, 16 (1),

26�60.

lGupta, A. �Indian Entrepreneurial Culture: Bengal and Eastern India.�,The Culture of Entrepreneurship. San

Francisco: ICS Press, 1991.

lHisrich, R. D. �The Woman Entrepreneur: A Comparative Analysis.� Leadership and Organization Development

Journal, 1986, 7 (2), 8�17.

lKassam, M., Handy, F., and Ranade, S. �Forms of Leadership and Organisational Structure of Non-profits: A Study

of Women's NGOs in India.� Chinmaya Management Journal, 2000, 4 (1), 30�40.

lMishra, S. N., and Mishra, S. �Good Governance, People's Participation, and NGOs.� Indian Journal of Public

Administration, 1998, 44 (3), 439�453.

40

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* izoDrk] vFkZ 'kkL= foHkkx] Jh ctjaxh egkfo|ky;] eobZeqDrk] dkuiqj nsgkr** izoDrk] okf.kT; foHkkx] fryd egkfo|ky;] vkSjS;k

orZeku ;qx oSKkfud] rduhdh ,oa vkfFkZd ;qx gSA gekjs ns'k Hkkjr esa Hkh izeq[k :Ik ls bu {ks=ksa esa Hkh larks"ktud

fodkl fd;k gSA ijUrq bruk lc gksus ds ckotwn d`f"k {ks= fo'ks"k dj d`f"k {ks= esa dk;Z djus okys etnwj (efgyk) dh

fLFkfr vkt Hkh lkspuh; gSA d`f"k {ks= esa dk;Zjr xzkeh.k efgyk etnwjksa dh fLFkfr iq#"kksa dh vis{kk vR;Ur detksj gS]

bu efgykvksa dks yxHkx lekt ds izR;sd {ks= esa vius iq#"k lgHkkfx;ksa ds Åij fuHkZj jguk iM+rk gS ifj.kkeLo:Ik

buds fu.kZ; fuekZ.k esa Hkwfedk u ds cjkcj gksrh gSA d`f"k {ks= esa dk;Z djus okyh vf/kdka'k efgyk;sa ¼viokn #i esa NksM+

fn;k tk;½ xjhch dh js[kk ds uhps thou&;kiu djrh gSaA ifj.kkeLo#i mudh vkfFkZd fLFkfr ds lkFk&lkFk 'kSf{kd o

lkekftd fLFkfr Hkh detksj gksrh gSA d`f"k {ks= esa dk;Zjr efgyk;sa iq#"kksa dh vis{kk etnwjh dh nj esa fyax Hksn dk

f'kdkj gksrh gSa D;ksafd [ksrksa esa iq#"kksa ds cjkcj dk;Z djus ds ckotwn mUgsa de etnwjh izkIr gksrh gSA u dsoy etnwjh

cfYd vusd {ks=ksa esa fo'ks"kdj fu.kZ; fuekZ.k esa ¼fu.kZ; ysus½ efgykvksa dh iq#"kksa dh vis{kk Hkkxhnkjh fuEurj gksrh gSA

,d vuqeku ds vuqlkj xzkeh.k {ks=ksa esa etnwjh djus okyh efgykvksa esa 75 izfr'kr ls vf/kd d`f"k {ks= esa etnwjh djrh

gSaA ;|fi vusd ifjokjksa dh eqf[k;k ¼yxHkx 20 izfr'kr½ efgyk;sa gSa] ysfdu ;s Hkh d`f"k dk;ksZa ds lkFk&lkFk ifjokj

o Ik'kqvksa dh ns[kHkky dh ftEesnkjh Hkjiwj mBkrh gSaA

izLrkoukHkkjr esa orZeku le; esa Hkh vf/kla[; xzkeh.k lekt df"k dk;ksZa ls viuk thou fuokZg dj jgk gSA izkphudky ls gh

df"k dk;Z xzkeh.k lekt dk izeq[k O;olk; jgk gSA orZeku esa xzkeh.k lekt Hkh /khjs&/khjs VwV jgk gS vkSj la;qDr ifjokj dk LFkku ,dy ifjokj ys jgs gSaA la;qDr ifjokj esa df"k dk;ksZa ds lkFk&lkFk vU; dk;Z Hkh la;qDr #i ls fd;s tkrs Fks ijURkq ifjokjksa ds ,dy gksus ls df"k dk;ksZ esa igys dh vis{kk efgykvksa dh Hkkxhnkjh esa of¼ gks xbZ gSA

df"k {ks= esa dk;Z djus okyh vf/kdka'k efgyk;sa (viokn #i esa NksM+ fn;k tk;) xjhch dh js[kk ds uhps thou&;kiu djrh gSaA ifj.kkeLo#i mudh vkfFkZd fLFkfr ds lkFk&lkFk 'kSf{kd o lkekftd fLFkfr Hkh detksj gksrh gSA df"k {ks= esa dk;Zjr efgyk;sa iq#"kksa dh vis{kk etnwjh dh nj esa fyax Hksn dk f'kdkj gksrh gSa D;ksafd [ksrksa esa iq#"kksa ds cjkcj dk;Z djus ds ckotwn mUgsa de etnwjh izkIr gksrh gSA u dsoy etnwjh cfYd vusd {ks=ksa esa fo'ks"kdj fu.kZ; fuekZ.k esa (fu.kZ; ysus) efgykvksa dh iq#"kksa dh vis{kk Hkkxhnkjh fuEurj gksrh gSA ,d vuqeku ds vuqlkj xzkeh.k {ks=ksa esa etnwjh djus okyh efgykvksa esa 75 izfr'kr

ls vf/kd df"k {ks= esa etnwjh djrh gSaA ;|fi vusd ifjokjksa dh eqf[k;k (yxHkx 20 izfr'kr) efgyk;sa gSa ysfdu ;s Hkh df"k dk;ksZa ds lkFk&lkFk ifjokj o Ik'kqvksa dh ns[kHkky dh ftEesnkjh Hkjiwj mBkrh gSaA Hkwfe ij LokfeRo ds ekeys esa efgyk;sa (yxHkx 3 ls 4 izfr'kr) cgqr gh fucZy gSa ftlls mudks df"k ½.k vkfn feyus esa dfBukbZ gksrh gSA lkFk gh vk; dk Lrj fuEu gksus ls fofHkUu izdkj ds fu.kZ; ysus esa mudh Hkwfedk yxHkx ux.; lh jgrh gSA

v/;;u dk mn~ns'; 'kks/k v/;;u ds fuEufyf[kr mn~ns'; gSaA

1-Ekfgyk df"k Jfedksa dh ikfjokfjd ekeyksa esa fu.kZ; fuekZ.k dh izfØ;k dk irk yxkukA2-Ekfgyk df"k Jfedksa dh vkfFkZd fu.kZ; esa lgHkkfxrk dk irk yxkukA3-Ekfgyk df"k Jfedksa dk vkfFkZd Lrj tkuukA4-Ekfgyk df"k Jfedksa dk 'kSf{kd Lrj tkuukA5-Ekfgyk df"k Jfedksa ds jkstxkj dk Lrj ,oa iq#"kksa ds ofu"ifr o muds ikfjJfed dk irk yxkukA

41


midYiuk

1-Lkekt dk iq#"k iz/kku gksus ds dkj.k ikfjokfjd ekeyksa esa efgyk df"k Jfedksa dh fu.kZ; fuekZ.k izfØ;k esa fgLlsnkjh fuEure gksrh gSA

2-Ekfgyk df"k Jfedksa ds }kjk vkfFkZd miktZu ds ifj.kkeLo:Ik mUgsa vkfFkZd ekeyksa esa fu.kZ; ysus dk vf/kdkj ugha gksrkA

3-Ekfgyk df"k Jfedksa dk vkfFkZd Lrj fuEu gksrk gSA

4-Ekfgyk df"k Jfedksa esa f'k{kk dk Lrj vR;Ur fuEu gksrk gSA

5-Ekfgyk df"k Jfedksa dks vU; {ks=ksa esa lhfer ek=k esa jkstxkj izkIr gksrk gSA

'kks/k v/;;u i¼fr

izLrqr 'kks/k v/;;u tuin vkSjS;k ds xzkeh.k {ks=ksa ds df"k {ks= esa dk;Zjr efgyk df"k Jfedksa dks vk/kkj ekudj fd;k x;k gSA 'kks/k v/;;u ds vUrxZr tuin ds lHkh fodkl [k.Mksa ds ik¡p&ik¡p xk¡oksa dk p;u nSo fun'kZu i¼fr ls fd;k x;k gSA p;fur izR;sd xk¡o ls nl&nl efgyk df"k Jfedksa dk p;u mudh dqy la[;k ds izfrfuf/kRo ds vk/kkj ij fd;k x;k gSA

bl izdkj ls dqy 35 xk¡oksa dh 350 efgyk df"k Jfedksa (mÙkj nkrkvksa) dk p;u ,d fuf'pr mn~ns'; ds rgr fd;k x;k gSA efgyk df"k Jfedksa dk p;u nSo fun'kZu i¼fr ds vk/kkj ij O;fDrxr lk{kkRdkj fof/k ls fd;k x;k gSA efgyk df"k Jfedksa dk lk{kkRdkj djus ds fy;s izR;sd efgyk ls iUnzg&iUnzg iz'uksa dks rkfydk ds :Ik esa fy[kk x;k gSA bu iz'uksa esa izeq[k #i ls efgyk df"k Jfedksa dh 'kSf{kd ;ksX;rk] ifjokj dk izdkj] ikfjokfjd fopkj foe'kZ esa lgHkkfxrk] cPpksa dh f'k{kk dk fu.kZ;] cPpksa ds tUe ds chp vURkj] ?kjsyw lkeku [kjhnus dk fu.kZ;] Lo;a ds miHkksx dk lkeku [kjhnus] [ksrksa esa Qly cksus dk fu.kZ;] mRikfnr Qly dks cspus dk fu.kZ;] efgykvksa ds ifjokj dh ekfld vk;] etnwjh jkf'k ij vf/kdkj ,oa efgykvksa dks izkIr jkstxkj ds izdkj vkfn dks lfEeyr fd;k x;k gSA

rkfydk& 1

,jokdVjk

fo/kwuk

vNYnk

Lgkj

vthrey

HkkX;uxj

vkSjS;k

95

104

107

95

104

121

150

776

06

10

10

08

13

13

15

75

xqykyiqj] uxykck?k] ljS;k] uxykn;k] QStqYykiqj

csyk] ;kdwciqj] Hkwjk] vltuk] ::dyk

?klkjk] eksgEenkckn] gjpUniqj] nsojk;, n[kukbZ

nsohnkliqj] lgkj] lgk;y] iVuk] ygjkiqj

lkWQj] ekSteiqj] fcjgwuh] xf<+;k] xaxnkliqjk

ddksj] Vhdeiqj] ds'keiqj] nsojiqj] nkSyriqj

v;kuk] D;ksaVjk] Hkjlsu] HkkÅiqj] [kkuiqj

Ø0la0fodkl[k.M

3507;ksx

1

2

3

4

5

6

7

dqy xzke

dqy xzkeiapk;r p;fur xzke

v/;;u {ks= ls lEcfU/kr fodkl [k.M ,oa p;fur xzke

L=ksr & vFkZ ,oa lkaf[;dh if=dk

mi;qZDr rkfydk ds v/;;u ls Li"V gS fd v/;;u {ks= ds dqy 776 xkaoksa o dqy 75 xzke iapk;rksa esa ls izR;sd fodkl [k.M esa ikap&ikap xkaoksa dk p;u fd;k x;k gS vFkkZr dqy 35 xkaoksa dk v/;;u ds fy;s p;u fd;k x;k gSA

42


fo'ys"k.k rFkk O;k[;k

tuin vkSjS;k ds 7 fodkl[k.Mksa ls p;fur lHkh 350 efgyk df"k Jfedksa ds lk{kkRdkj }kjk izkIRk vkadM+ksa dk mi;qDr lkaf[;dh; i¼fr ds ek/;e ls fo'ys"k.k fd;k x;k gSA vkadM+ksa ds fo'ys"k.k esa fofHkUu lkaf[;dh ek/;ksa dk lgkjk fy;k x;k gSA vkadM+ksa ds fo'ys"k.k ls izkIRk fu"d"kksZa ds ek/;e ls efgyk df"k Jfedksa ds csgrj thou&;kiu ds fy;s lq>ko izLrqr fd;s x;s gSaA

'kks/k v/;;u ls lEcfU/kr lk{kkRdkj ls lEcfU/kr iz'uksa dks iwNus ds fy;s fuEu rkfydkvksa dk iz;ksx fd;k x;k gSA lkFk gh izkIr vkadM+ksa ds fo'ys"k.k ls fu"d"kZ izkIRk fd;s x;s gSaA

rkfydk & 2mRrj nkrkvksa (efgyk df"k Jfedksa) dh 'kSf{kd ;ksX;rk

fuj{kj

lk{kj (izkbejh] ek/;fed] vf/kd)

;ksx

315

35

350

90 izfr'kr

10 izfr'kr

100 izfr'kr

Ø0la0'kS{kf.kd ;ksX;rk

1

2

3

la[;k izfr'kr

L=ksr & lk{kkRdkj ls izkIr

rkfydk & 3mRrj nkrkvksa ds ifjokj dk izdkj

,dy ifjokj

la;qDr ifjokj

;ksx

182

168

350

52 izfr'kr

48 izfr'kr

100 izfr'kr

Ø0la0ifjokj dk izdkj

1

2

3

la[;k izfr'kr


rkfydk & 4

vDlj gksrk gS

dHkh&dHkh gksrk gS

ugha gksrk gS

;ksx

63

105

182

350

18 izfr'kr

30 izfr'kr

52 izfr'kr

100 izfr'kr

Ø0la0ifjokj fopkj foe'kZ esa lgHkkfxrk

1

2

3

la[;k izfr'kr

efgyk df"k Jfedksa }kjk ikfjokfjd fopkj foe'kZ es lgHkkfxrk


mi;qZDr rkfydk ls izkIr vkadM+ksa dk fo'ys"k.k djus ij Kkr gksrk gS fd xzkeh.k {ks= esa orZeku esa Hkh vf/kdka'k df"k etnwj efgyk;sa (yxHkx 90 izfr'kr) fuj{kj gSa tcfd buesa ls dqN gh yxHkx (10 izfr'kr) Jfed lk{kj gSaA bu lk{kj efgykvksa esa dksbZ Hkh mPp f'k{kk izkIRk ugha gSA

mi;qZDr rkfydk ds fo'ys"k.k ls Li"V gS fd xzkeh.k {ks= dh efgyk Jfed vk/ks ls la[;k esa (yxHkx 52 izfr'kr) ,dy ifjokj ds #i esa thou ;kiu djrh gSa tcfd buesa ls vk/ks ls dqN de (yxHkx 48 izfr'kr) la;qDr ifjokj esa thou ;kiu djrs gSaA

43


mi;qZDr rkfydk ds fo'ys"k.k ls Li"V gS fd xzkeh.k {ks= dh efgyk Jfed esa ikfjokfjd fopkj foe'kZ vk/ks ls vf/kd ifjokjksa esa ugha gksrk gSA tcfd 30 izfr'kr efgyk;sa fopkj foe'kZ djus esa lgHkkfxrk djrh gSaA losZ{k.k esa ik;k x;k fd 18 izfr'kr efgyk;sa ikfjokfjd fopkj foe'kZ esa lgHkkfxrk vDlj djrh gSA

rkfydk & 5

ifr

iRuh

la;qDr #i ls

;ksx

220

42

88

350

63 izfr'kr

12 izfr'kr

25 izfr'kr

100 izfr'kr

Ø0la0f'k{kk dk fu.kZ;

1

2

3

la[;k izfr'kr

efgyk df"k Jfedksa ds cPpksa dh f'k{kk dk fu.kZ;


mi;qZDr vkadM+ksa ls Li"V gS fd xzkeh.k {ks= esa cPpksa dh f'k{kk dk fu.kZ; eq[; #i ls ifjokj esa iq#"kksa ds Åij fuHkZj (63 izfr'kr) jgrk gSA tcfd efgykvksa dks bl fu.kZ; esa vf/kdkj cgqr gh de (12 izfr'kr) izkIr gSA lkFk gh yxHkx ,d pkSFkkbZ fu.kZ; ifr o iRuh nksuksa feydj djrs gSaA

rkfydk & 6

,d o"kZ ls de

,d ls nks o"kZ ds chp

rhu o"kZ

rhu o"kZ ls vf/kd

;ksx

196

119

28

07

350

56 izfr'kr

34 izfr'kr

8 izfr'kr

2 izfr'kr

100 izfr'kr

Ø0la0vUrj (o"kksZa esa)

1

2

3

4

5

la[;k izfr'kr

mRrjnkrkvksa ds cPpksa esa tUe ds chp vUrj


mi;qZDr rkfydk ds fo'ys"k.k ls Li"V gS fd xzkeh.k {ks= dh efgykvksa esa cPpksa ds tUe ds chp vUrj vk/ks ls Hkh vf/kd (56 izfr'kr) esa ,d o"kZ ls de jgrk gSA tcfd ;g vUrj (3 o"kZ ls vf/kd) flQZ 2 izfr'kr esa ik;k tkrk gSA ,d ls nks o"kZ ds chp yxHkx ,d frgkbZ efgyk;sa gS tcfd rhu o"kZ dk vUrj dsoy 8 izfr'kr efgykvksa us gh crk;k gSA cPpksa ds chp de vUrj lEHkor% efgykvksa dh f'k{kk esa deh ,d dkj.k gks ldrh gSA

rkfydk & 7efgyk df"k Jfedksa ds fopkj esa cPpksa ds chp vUrj j[ks tkus ds dkj.k


eak ds LokLF; ds fy;s

lq[kh thou ds fy;s

cPpksa dh vPNh ns[kHkky ds fy;s

irk ugha @ ugha tkurs

;ksx

18

29

24

279

350

5 izfr'kr

8 izfr'kr

7 izfr'kr

80 izfr'kr

100 izfr'kr

Ø0la0vUrj ds dkj.k

1

2

3

4

5

la[;k izfr'kr

44


rkfydk & 8

Lo;a (iRuh)

ifr

ifr@iRuh nksuksa

vU; lnL;

;ksx

42

203

77

28

350

12 izfr'kr

58 izfr'kr

22 izfr'kr

8 izfr'kr

100 izfr'kr

Ø0la0fu.kZ; ysus okys O;fDr

1

2

3

4

5

la[;k izfr'kr

efgyk df"k Jfedksa ds Lo;a ds cPpksa ds chp vUrj j[kus ds fu.kZ; esa lgHkkfxrk


mi;qZDr rkfydk ds fo'ys"k.k ls irk pyrk gS fd vf/kdka'k efgyk Jfedksa dk mÙkj tkudkjh u gksukA mi;qZDr iz'u ds lEcU/k esa (80 izfr'kr) jgk gSA tcfd dqN efgyk;sa gh cPpksa ds tUe chp vURkj ds dkj.kksa dks ysdj ltx gSaA

mi;qZDr rkfydk ds fo'ys"k.k esa dgk tk ldrk gS fd xzkeh.k {ks=ksa esa cPpksa ds chp tUe esa vUrj dk fu.kZ; eq[; #i ls iq#"k (ifr) ij fuHkZj gSA efgyk;sa dsoy 12 izfr'kr gh blds fy;s mÙkjnk;h gSaA tcfd ifjokj ds vU; lnL;ksa dk fu.kZ; dsoy 8 izfr'kr gh ik;k x;k gSA bl lEcU/k esa ifr&iRuh nksuksa dks fu.kZ; dh lgHkkfxrk (22 izfr'kr) gSA

rkfydk & 9

mRrjnkrk Lo;a (efgyk)

ifr

ifr@iRuh nksuksa

ifjokj ds vU; lnL;

;ksx

56

182

84

28

350

16 izfr'kr

52 izfr'kr

24 izfr'kr

8 izfr'kr

100 izfr'kr


1

2

3

4

5

la[;k izfr'kr

?kj ifjokj dk lkeku [kjhnus gsrq efgyk df"k Jfedksa dk fu.kZ;


mi;qZDr vkadM+ksa ls Li"V gS fd ?kj dk lkeku [kjhnus esa Hkh efgyk df"k Jfedksa ds Åij iq#"kksa dks cgqr vf/kd ojh;rk (52 izfr'kr) izkIr gS tcfd Lo;a mudk gd dsoy (16 izfr'kr) gh gSA ifjokj ds vU; lnL; Hkh bl ekeys esa fu.kZ; (8 izfr'kr) Hkh ys ysrs gSaA ,d pkSFkkbZ ifr iRuh feydj mi;qZDr fu.kZ; ysrs gSA

rkfydk & 10


ifr

ifr@iRuh nksuksa

vU; lnL;

;ksx

70

182

91

7

350

20 izfr'kr

52 izfr'kr

26 izfr'kr

2 izfr'kr

100 izfr'kr


1

2

3

4

5

la[;k izfr'kr

efgyk df"k Jfedksa ds Lo;a ds mi;ksx ds fy;s dqN [kjhnus ds lEcU/k esa fu.kZ; esa lgefr


rkfydk & 11

efgyk Jfed (iRuh)

ifr

ifr@iRuh nksuksa

vU; lnL;

;ksx

49

196

84

21

350

14 izfr'kr

56 izfr'kr

24 izfr'kr

6 izfr'kr

100 izfr'kr

Ø0la0 fu.kZ; ysus okys O;fDr

1

2

3

4

5

la[;k izfr'kr

efgyk df"k Jfedksa }kjk [ksrksa esa Qly cksus ds fu.kZ; esa lgHkkfxrk


mi;qZDr rkfydk ds vkadM+ksa ls fo'ys"k.k fd;k tk ldrk gS fd Lo;a ds miHkksx ds fy;s oLrq;sa [kjhnus esa efgyk Jfedksa dks iq#"kksa (ifr) ds Åij fuHkZZjrk vk/ks ls Hkh vf/kd (52 izfr'kr) gS tcfd Lo;a efgyk;sa dsoy (20 izfr'kr) gh fu.kZ; ys ikrh gSaA bl fo"k; ij ifjokj ds lnL;ksa dk fu.kZ; dsoy (2 izfr'kr) gh vk;k gSA ,d pkSFkkbZ L=h iq#"k fu.kZ; feytqy dj ysrs gSA

mi;qZDr rkfydk ds fo'ys"k.k ls Li"V gS fd [ksrksa esa Qly cksus esa Hkh ?kj esa iq#"kksa (ifr;ksa) dk opZLo (56 izfr'kr) gS tcfd Lo;a efgyk Jfed ,slk fu.kZ; dsoy (14 izfr'kr) gh ys ikrh gSaA ifjokj ds vU; lnL;ksa dk fu.kZ; dsoy (6 izfr'kr) gS tcfd ifr&iRuh ,slk fu.kZ; yxHkx (24 izfr'kr) djrs gSaA

rkfydk & 12


ifr

ifr@iRuh nksuksa

vU; lnL;

;ksx

21

207

42

80

350

6 izfr'kr

60 izfr'kr

12 izfr'kr

22 izfr'kr

100 izfr'kr

Ø0la0 fu.kZ; ysus okys O;fDr

1

2

3

4

5

la[;k izfr'kr

efgyk df"k Jfedksa }kjk Qly ds mRiknu dks cspus ds fu.kZ; esa lgHkkfxrk


mi;qZDr rkfydk ds fo'ys"k.k ls Li"V gS fd xzkeh.k {ks=ksa esa df"k mRiknu dks cspus dk fu.kZ; izeq[k :Ik ls iq#"kksa (ifr;ksa) (60 izfr'kr) ds ikl dsfUnzr gS tcfd efgyk Jfed dsoy ;g fu.kZ; (6 izfr'kr) gh ys ikrh gSaA ifjokj ds vU; lnL; Hkh (22 izfr'kr) ;g fu.kZ; ysrs gS tcfd ifr&iRuh feydj Qly cspus dk la;qDr fu.kZ; (12 izfr'kr) ysrs gSaA

rkfydk & 13

500 #0 rd

500 #0 ls 1000 #0 rd

1000 #0 ls 1500 #i;s rd

1500 #0 ls vf/kd

;ksx

14

49

189

98

350

4 izfr'kr

14 izfr'kr

54 izfr'kr

28 izfr'kr

100 izfr'kr

Ø0la0 ekfld vk; (#i;s esa)

1

2

3

4

5

la[;k izfr'kr

efgyk df"k Jfedksa ds ifjokj dh ekfld vk;


45


mi;qZDr rkfydk ls Li"V gS fd xzkeh.k efgyk ifjokjksa dh ekfld vk; 1000 ls 1500 #0 rd vk/ks ls vf/kd ifjokjksa dh yxHkx 54 izfr'kr gS tcfd 500 #0 rd vk; dsoy 4 izfr'kr ifjokjksa dh gh gSA 28 izfr'kr ifjokjksa dh vk; 1500 #0 ekfld ls vf/kd gS vFkkZr~ yxHkx lHkh ifjokj xjhch js[kk ls uhps thou&;kiu djrs gSaA

rkfydk & 14

gk¡

ugha

irk ugha

;ksx

77

228

45

350

22 izfr'kr

65 izfr'kr

13 izfr'kr

100 izfr'kr

Ø0la0 etnwjh jkf'k ij vf/kdkj

1

2

3

4

la[;k izfr'kr

efgyk df"k Jfedksa dk etnwjh jkf'k ij Lo;a dk vf/kdkj gksuk


mi;qZDr rkfydk ds fo'ys"k.k ls Li"V gS fd efgyk df"k Jfedksa }kjk mRikfnr etnwjh ij ml dk Lo;a dk vf/kdkj cgqr gh de yxHkx (22 izfr'kr) gh gS tcfd ml etnwjh ij vU; yksxksa dk gd yxHkx (65 izfr'kr) gSA bl lEcU/k esa 13 izfr'kr mÙkjnkrk vfu.kZ; dh fLFkfr esa gSaA

rkfydk & 15

ifr dks

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26 izfr'kr

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1

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etnwjh jkf'k ij vf/kdkj u gksus dh fLFkfr esa fdls nh tkrh gSA


mi;qZDr rkfydk ds fo'ys"k.k ls Li"V gS fd efgyk df"k Jfedksa }kjk mRikfnr etnwjh dk vf/kdka'k Hkkx mlds ifr ds fgLls esa (58 izfr'kr) tkrk gS tcfd la;qDr ifjokj ds eqf[k;k dks (36 izfr'kr) rFkk vU; dks dsoy 6 izfr'kr gh tkrk gSA

rkfydk & 16

df"k {ks= ls

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mi;qZDr rkfydk ds fo'ys"k.k ls irk pyrk gS fd xzkeh.k {ks= esa efgyk df"k Jfedksa dks ewy :Ik ls df"k ds {ks= esa gh (91 izfr'kr) jkstxkj izkIr gksrk gSA df"k ds vfrfjDr vU; {ks=ksa esa ;g ek= (9 izfr'kr) gh gSA dsUnz ljdkj dh eujsxk tSlh ;kstuk ds lapkyu ls efgykvksa dks lM+d fuekZ.k] ukyk o rkykc [kqnokbZ rFkk xzkeh.k ukfy;k¡ cukuk vkfn esa jkstxkj izkIr gksus yxk gS ijUrq vf/kla[;k tula[;k df"k dk;Z esa yxh gqbZ gSA

46


fu"d"kZ

v/;;u {ks= ls lEcfU/kr xkaoksa dh efgyk df"k etnwjksa ds losZ{k.k ds vk/kkj ij fuEufyf[kr fu"d"kZ izkIr gq;s %&

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laUnHkZ

llkaf[;dh ikf=dk] m0iz0lvFkZ ,oa lka[; if=dk] vkSjS;kA

47


48

STUDY OF REVISED SCHEDULE VI OF FINAL ACCOUNTS OF COMPANIES

*Dr. Kamal V.K.S Bhadauria

*Assistant Professor, Jagran College of Arts, Science and Commerce, Kanpur

Introduction

Schedule VI to the Companies Act, 1956 ('the Act') provides the manner in which every

company registered under the Act shall prepare its Balance Sheet, Statement of Profit and Loss and

notes thereto. In the light of various economic and regulatory reforms that have taken place for

companies over the last several years, there was a need for enhancing the disclosure requirements

under the Old Schedule VI to the Act and harmonizing and synchronizing them with the notified

Accounting Standards as applicable. Accordingly, the Ministry of Corporate Affairs (MCA) has

issued a revised form of Schedule VI on February 28, 2011. As per the relevant notifications, the

Schedule applies to all companies for the Financial Statements to be prepared for the financial year

commencing on or after April 1, 2011.

The requirements of the Revised Schedule VI however, do not apply to companies as referred to in

the proviso to Section 211 (1) and Section 211 (2) of the Act, i.e., any insurance or banking company, or

any company engaged in the generation or supply of electricity or to any other class of company

for which a form of Balance Sheet and Profit and Loss account has been specified in or under any

other Act governing such class of company.

It may be clarified that for companies engaged in the generation and supply of electricity, however,

neither the Electricity Act, 2003, nor the rules framed there under, prescribe any specific format for

presentation of Financial Statements by an electricity company. Section 616(c) of the Companies Act

states that the Companies Act will apply to electricity companies, to the extent it is not contrary to the

requirements of the Electricity Act. Keeping this in view, Revised Schedule VI may be followed by such

companies till the time any other format is prescribed by the relevant statute.

Objective and Scope

1. The objective of this Guidance Note is to provide guidance in the preparation and presentation of

Financial Statements of companies in accordance with various aspects of the Revised Schedule VI.

However, it does not provide guidance on disclosure requirements under Accounting Standards,

other pronouncements of the Institute of Chartered Accountants of India (ICAI), other

statutes, etc.

2. In preparing this Guidance Note, reference has been made to the Accounting Standards notified

under the Companies (Accounting Standards) Rules, 2006 (as amended) other Accounting

Standards issued by the ICAI (yet to be notified under the Act) and various other pronouncements of

the ICAI. The primary focus of the Guidance Note has been to lay down broad guidelines to deal

with practical issues that may arise in the implementation of the Revised Schedule VI.

49


3. As per the clarification issued by ICAI regarding the authority attached to the Documents Issued by

ICAI, �'Guidance Notes' are primarily designed to provide guidance to members(Chartered

Accountants) on matters which may arise in the course of their professional work and on which they

may desire assistance in resolving issues which may pose difficulty.

Applicability

1. As per the Government Notification no. F.No.2/6/2008-C.L-V dated 30- 3-2011, the Revised

Schedule VI is applicable for the Balance Sheet and Profit and Loss Account to be prepared for the

financial year commencing on or after April 1, 2011.

2. Early adoption of the Revised Schedule VI is not permitted since Schedule VI is a statutory

format.

3. The Revised Schedule VI requires that except in the case of the first Financial Statements laid before

the company after incorporation, the corresponding amounts for the immediately preceding period

are to be disclosed in the Financial Statements including the Notes to Accounts. Accordingly,

corresponding information will have to be presented starting from the first year of application of the

Revised Schedule VI. Thus for the Financial Statements prepared for the year 2011-12 (1st April st2011 to 31 March 2012), corresponding amounts need to be given for the financial year

2010-11.

4. ICAI had earlier issued the Statement on the Amendments to Schedule VI to the Companies Act,

1956 in March 1976 (as amended). Wherever guidance provided in this publication is different from

the guidance in the aforesaid Statement, this Guidance Note will prevail.

Summary of Revised Schedule VI

Main principles

l The Revised Schedule VI requires that if compliance with the requirements of the Act and / or the

notified Accounting Standards requires a change in the treatment or disclosure in the Financial

Statements as compared to that provided in the Revised Schedule VI, the requirements of the Act

and / or the notified Accounting Standards will prevail over the Schedule.

l The Revised Schedule VI clarifies that the requirements mentioned therein for disclosure on the face

of the Financial Statements or in the notes are minimum requirements. Line items, sub-line items

and sub-totals can be presented as an addition or substitution on the face of the Financial

Statements when such presentation is relevant for understanding of the company's financial

position and /or performance.

Major changes related to the Balance Sheet

lThe Revised Schedule VI prescribes only the vertical format for presentation of Financial

Statements. Thus, a company will now not have an option to use horizontal format for the

presentation of Financial Statements as prescribed in Old Schedule VI.

50


lCurrent and non-current classification has been introduced for presentation of assets and liabilities

in the Balance Sheet. The application of this classification will require assets and liabilities to be

segregated into their current and non-current portions. For instance, current maturities of a long

term borrowing will have to be classified under the head �Other current liabilities.�

lNumber of shares held by each shareholder holding more than 5 percent shares in the company

now needs to be disclosed. In the absence of any specific indication of the date of holding, such

information should be based on shares held as on the Balance Sheet date.

lDetails pertaining to aggregate number and class of shares allotted for consideration other than

cash, bonus shares and shares bought back will need to be disclosed only for a period of five years

immediately preceding the Balance Sheet date including the current year.

lAny debit balance in the Statement of Profit and Loss will be disclosed under the head �Reserves

and surplus.� Earlier, any debit balance in Profit and Loss Account carried forward after deduction

from uncommitted reserves was required to be shown as the last item on the Assets side of the

Balance Sheet.

lSpecific disclosures are prescribed for Share Application money. The application money not

exceeding the capital offered for issuance and to the extent not refundable will be shown separately

on the face of the Balance Sheet. The amount in excess of subscription or if the requirements of

minimum subscription are not met will be shown under �Other current liabilities.�

lThe term �sundry debtors� has been replaced with the term �trade receivables.� 'Trade receivables'

are defined as dues arising only from goods sold or services rendered in the normal course of

business. Hence, amounts due on account of other contractual obligations can no longer be

included in the trade receivables.

lThe Old Schedule VI required separate presentation of debtors outstanding for a period exceeding

six months based on date on which the bill/invoice was raised whereas, the Revised Schedule VI

requires separate disclosure of trade receivables outstanding for a period exceeding six months

from the date the bill/invoice is due for payment.

l�Capital advances� are specifically required to be presented separately under the head �Loans &

advances� rather than including elsewhere.

lTangible assets under lease are required to be separately specified under each class of asset. In the

absence of any further clarification, the term �under lease� should be taken to mean assets given on

operating lease in the case of lessor and assets held under finance lease in the case of

lessee.

lIn the Old Schedule VI, details of only capital commitments were required to be disclosed. Under the

Revised Schedule VI, other commitments also need to be disclosed.

lThe Revised Schedule VI requires disclosure of all defaults in repayment of loans and interest to

be specified in each case. Earlier, no such disclosure was required in the Financial Statements.

51


However, disclosures pertaining to defaults in repayment of dues to a financial institution, bank and

debenture holders continue to be required in the report under Companies (Auditor's Report)

Order, 2003 (CARO).

Main changes related to Statement of Profit and Loss

lThe name has been changed to �Statement of Profit and Loss� as against 'Profit and Loss Account'

as contained in the Old Schedule VI.

lUnlike the Old Schedule VI, the Revised Schedule VI lays down a format for the presentation of

Statement of Profit and Loss. This format of Statement of Profit and Loss does not mention any

appropriation item on its face. Further, the Revised Schedule VI format prescribes such 'below the

line' adjustments to be presented under �Reserves and Surplus� in the Balance Sheet.

lIn addition to specific disclosures prescribed in the Statement of Profit and Loss, any item of income

or expense which exceeds one percent of the revenue from operations or Rs. 100,000 (earlier 1% of

total revenue or Rs. 5,000), whichever is higher, needs to be disclosed separately.

lThe Old Schedule VI required the parent company to recognize dividends declared by subsidiary

companies even after the date of the Balance Sheet if they were pertaining to the period ending on

or before the Balance Sheet date. Such requirement no longer exists in the Revised Schedule VI.

Accordingly, as per AS-9 Revenue Recognition, dividends should be recognized as income only

when the right to receive dividends is established as on the Balance Sheet date.

lIn respect of companies other than finance companies, revenue from operations need to be

disclosed separately as revenue from (a) sale of products, (b) sale of services and (c) other

operating revenues.

lNet exchange gain/loss on foreign currency borrowings to the extent considered as an adjustment

to interest cost needs to be disclosed separately as finance cost.

Disclosures no longer required

The Revised Schedule VI has removed a number of disclosure requirements that were not

considered relevant in the present day context. Examples include:

(a) Disclosures relating to managerial remuneration and computation of net profits for calculation

of commission;

(b) Information relating to licensed capacity, installed capacity and actual production;

(c) Information on investments purchased and sold during the year;

(d) Investments, sundry debtors and loans & advances pertaining to companies under the same

management;

(e) Maximum amounts due on account of loans and advances from directors or officers of the

company;

(f) Commission, brokerage and non-trade discounts

52


However, there are certain disclosures such as value of imports calculated on CIF basis,

earnings/expenditure in foreign currency, etc. that still continue in the Revised Schedule VI.

Structure of the Revised Schedule VI

The Structure of Revised Schedule VI is as under:

I. General Instructions

II. Part I � Form of Balance Sheet

III. General Instructions for Preparation of Balance Sheet

IV. Part II � Form of Statement of Profit and Loss

V. General Instructions for Preparation of Statement of Profit and Loss

Major Differences Between the Old and the New Schedule VI

Rounding off of Figures Appearing in Financial Statement

lOld - Turnover of less than Rs. 100 Crs � Round off to the nearest Hundreds, thousands or decimal

thereof

Turnover of Rs. 100 Crs or more but less than Rs. 500 Crs � Round off to the nearest Hundreds,

thousands, lakhs or millions or decimal thereof.

lNew - Turnover of Rs. 500 Crs or more � Round off to the nearest Hundreds, thousands, lakhs,

millions or crores, or decimal thereof Turnover of less than Rs. 100 Crs � Round off to the nearest

Hundreds, thousands, lakhs or millions or decimal thereofTurnover of Rs. 100 Crs or more � R/off to

the nearest lakhs, millions or crores, or decimal thereof.

Net Working Capital

lOld - Current assets & Liabilities are shown together under application of funds. The net working

capital appears on balance sheet.

lNew - Assets & Liabilities are to be bifurcated in to current & Non-current and to be shown

separately. Hence, net working capital will not be appearing in Balance sheet.

Fixed Assets

lOld - There was no bifurcation required in to tangible & intangible assets.

lNew - Fixed assets to be shown under non-current assets and it has to be bifurcated in to Tangible &

intangible assets.

Borrowings

lOld - Short term & long term borrowings are grouped together under the head Loan funds sub-head

Secured / Unsecured.

lNew - Long term borrowings to be shown under non-current liabilities and short term borrowings to

be shown under current liabilities with separate disclosure of secured / unsecured loans. Period and

amount of continuing default as on the balance sheet date in repayment of loans and interest to be

separately specified.

Finance Lease Obligation

lOld - Finance lease obligations are included in current liabilities

lNew - Finance lease obligations are to be grouped under the head non-current liabilities

Deposits

lOld - Lease deposits are part of loans & advances

lNew - Lease deposits to be disclosed as long term loans & advances under the head non-current

assets

Investments

lOld - Both current & non-current investments to be disclosed under the head investments

lNew - Current and non-current investments are to be disclosed separately under current assets &

non-current assets respectively.

Loans and Advances

lOld - Loans & Advance are disclosed along with current assets

lNew - Loans & Advances to be broken up in long term & short term and to be disclosed under non-

current & current assets respectively. Loans & Advance to subsidiaries & others to be disclosed

separately.

Loans & Advance from related parties & others to be disclosed separately.

Deffered Tax Assets / Liabilities

lOld - Deferred Tax assets / liabilities to be disclosed separately.

lNew - Deferred Tax assets / liabilities to be disclosed under non-current assets / liabilities as the

case may be.

Cash and Bank Balances

lOld - Bank balance to be bifurcated in scheduled banks & others.

lNew - Bank balances in relation to marked balances, held as margin money against borrowings,

deposits with more than 12 months maturity, each of these to be shown separately.

Profit and Loss (DR Balance)

lOld - P&L debit balance to be shown under the head Miscellaneous expenditure & losses.

lNew - Debit balance of Profit and Loss Account to be shown as negative figure under the head

Surplus. Therefore, reserve & surplus balance can be negative.

Sundry Creditors

lOld - Creditors to be broken up in to micro & small suppliers and other creditors.

lNew - It is named as Trade payables and there is no mention of micro & small enterprise disclosure.

53


54


Other Current Liabilities

lOld - No specific mention for separate disclosure of Current maturities of long term debt

Current maturities of long term debt to be disclosed under other current liabilities.

lNew - No specific mention for separate disclosure of Current maturities of finance lease obligation

Current maturities of finance lease obligation to be disclosed.

Separate Line Item Disclosure Criteria

lOld - any item under which expense exceeds one per cent of the total revenue of the company or

Rs. 5,000 which ever is higher; shall be disclosed separately

lNew - any item of income / expense which exceeds one per cent of the revenue from operations or

Rs. 1,00,000, which ever is higher; to be disclosed separately

Expense Classification

lOld - Function wise & nature wise

lNew - Expenses in Statement of Profit and Loss to be classified based on nature of expenses

Finance Cost

lOld - Finance cost to be classified in fixed loans & other loans

lNew - Finance cost shall be classified as interest expense, other borrowing costs & Gain / Loss on

foreign currency transaction & translation.

Foreign Exchange Gain / Loss

lOld - Gain / Loss on foreign currency transaction to be shown under finance cost

lNew - Gain / Loss on foreign currency transaction to be separated into finance costs and other

expenses

Purchases

lOld - The purchase made and the opening & closing stock, giving break up in respect of each class

of goods traded in by the company and indicating the quantities thereof.

lNew - Goods traded in by the company to be disclosed in broad heads in notes. Disclosure of

quantitative details of goods is diluted.

Conclusion

The Accountants will have to get used to the new format. The major issue for fresh accountants/

students of accountancy, professors shall be to cope with the new format even though during the

school/college curriculum, the old schedule VI and its peculiarities were mastered through the 5 year

course. The Industry shall face real difficulty for the time to come in this regard.

55


Investors and Financial Analysts will have to educate themselves with the new format and the

contents of the disclosures for the purpose of drawing the conclusion.

SEBI will have to issue clarifications for changes in the format of reporting and modification in format

for compliance with clause-41 of Listing Agreement.

Tax Authorities will have to adjust themselves with the new format through form 3CD shall continue

to give the required information. In this connection, attention is drawn to the fact about computation of

book profit for levy of MAT. Similarly, the computation of arrears of depreciation, provision of dividend,

other provisions will have to be redefined since the difference between provision and short term

liability has undergone the change.

Though Bhagavat-Gita propagates that Only thing that is constant is Change, the issues

surrounding the change have to be dealt with at different levels. The element of speed has caught

everyone with surprise and as stated earlier, this revision has impacted everyone related even remotely,

with Financial Statements, in one way or the other. The guidance note from ICAI and/or clarifications

from MCA also shall smoothen the process of adaptation for change.

References

l Dr. K.V.K. Singh; Dr. A.K. Garg; Company Accounts, Swati Publ.

l The Economic Times.

l Business Standard.

l www.professionaltimes.org

l The Institute of Chartered Accountants of India.

Infrastructure plays a crucial role in agricultural development. Infact, the farmers of a region with

abundance of infra-structure may be in a better position to utilize their limited land resources than those of

a region where the necessary infrastructure is lacking. The increasing role of infrastructure in agricultural

development especially after the introduction of the high yielding varieties technology in 1966 deserves

special attention.

Uttar Pradesh which is one of the backward state in India is selected for the present

study. A detailed analysis reveals the relative backwardness of Uttar Pradesh among the

states in India. The paper examines the extent of inter-regional disparities on the agricultural development

in Uttar Pradesh. We have gone into the details of the direct and indirect role of infrastructure in

determining the level of agricultural productivity in Uttar Pradesh with the help of cross-sectional data

across the districts.

The study is based on the data available for the district of Uttar Pradesh. Most of the information on

district wise infrastructure facilities and adoption of new agricultural practices was collected from the

office of Director, Department of Agriculture (Agricultural Statistics Section) government of Uttar Pradesh.

Further the study reveals the existence of inter-regional differences in the level of infra-structural

facilities in Uttar Pradesh. Uttar Pradesh plain regions are significantly endowed with the infra-structural

facilities whereas these facilities are lacking very much in the Bundelkhand plateau region. The same

patterns of inter-regional differences on the use of new agricultural practices and the level of agricultural

productivity is also indicated. It has been observed that the infra-structure is a significant determinant of

the level of agricultural productivity through the use of new agricultural practices is also remarkable. We

find that the availability of infra-structure induces the farmers to go in the widespread use of new

agricultural practices leading to higher level of agricultural productivity. On the whole infra-structure

contributes a great deal to modern agricultural and therefore a suitable policy for infra-structure with a rural

bias is needed for economic development of the agricultural based backward economic like that of Uttar

Pradesh.

Keywords : Infrastructure, Regional disparity, Economics development.

Introduction

With the introduction of economic reforms and focused emphasis on achieving high growth,

agriculture in India has made strides. Thanks to the agricultural technology being gradually introduce

since the mid 1960s. The issue of income inequality has not received the attention that it deserves. True,

the reference is made frequently to the provision of safety met to the poor but the main objective behind

it is to avoid rise in the incidence of absolute poverty rather than prevention of deterioration in income

disparity. Infrastructure plays a crucial role in agricultural development. Infact, the farmers of a region

with abundance of infra-structure may be in a better position to utilize their limited land resources than

56

INTER REGIONAL DISPARITIES IN AGRICULTURAL INFRA-STRUCTURE � A CASE STUDY OF UTTAR PRADESH *Dr. Archna Shukla

**Dr. Manju Awasthi

* Assistant Professor in Economics, D.B.S.P.G. College, Govind Nagar, Kanpur (U.P.) **Associate Professor in Economics, D.B.S.P.G. College, Govind Nagar, Kanpur (U.P.)

57


those of a region where the necessary infrastructure is lacking. The increasing role of infrastructure in

agricultural development especially after the introduction of the high yielding varieties technology in

1966 deserves special attention.

Uttar Pradesh which is one of the backward state in India is selected for the present study. A

detailed analysis reveals the relative backwardness of Uttar Pradesh among the states in India, as far as

the level of infrastructure is concerned. Actually Uttar Pradesh itself exhibits infra-regional differences.

The paper examines the extent of inter-regional disparities on the agricultural development in Uttar

Pradesh. We have gone into the details of the direct and indirect role of infrastructure in determining the

level of agricultural productivity in Uttar Pradesh with the help of cross-sectional data across the

districts.

Research Methodology

The study is based on the data available for the district of Uttar Pradesh as whole North

Uttar Pradesh plain region, South Uttar Pradesh plain region and Bundelkhand region. Most of the

information on district wise infrastructure facilities and adoption of new agricultural practices was

collected from the office of Director, Department of Agriculture (Agricultural Statistics Section)

government of Uttar Pradesh, Lucknow. Other supplementary data on infra-structure and data revealed

to Agricultural Productivity are taken from Uttar Pradesh Statistical Hand Book 2012 and Uttar Pradesh

through figures 2011 both published by the Directorate of Statistics and Evaluation, Government of Uttar

Pradesh, Lucknow. All these data refer to the year 2010-11 except in few cases for which 2010-11 data

are not available. It is needless to say that the validity of our conclusion is contingent upon the

accuracy of these date.

Regional Disparities in Agricultural Infra-structure

Infact, it is very difficult to isolate the items of infra-structure, which are exclusively related to

agriculture. However, we have taken care of it to the extent, possible, while selecting individual items of

infra-structure, though the ultimate selection is conditional on the availability of the district wise

information. Infra-structure in its broad sense used in this study, covers the items which provide external

economies to the farmers as a whole. As many as seven items of infra-structure are included in the

present study, such as

(i) Irrigation : The percentage of gross sown area irrigated in the district during 2010-11 is used as a

proxy for the irrigation facilities made available to the farmers by the government because

government canals, tubewells and other wells contribute more than 70 percent of the total

area irrigated in the state.

(ii) Finance : Availability of agriculture credit through various agencies per rural family during

2010-11.

(iii) Power : Percentage of inhabited villages electrified in the as on March 31, 2010.

58


(iv) Marketing : Number of regulated markets per lakh households in the district as on October

29, 2009.

(v) Education : Rural literacy rate (in per cent) in the district as per 2011 census.

(vi) Transport : Length of road (in km) per thousand square km area of the district as on

March 31, 2010 and

(vii) Extension services : Number of composite demonstrations conducted for paddy and wheat per

lakh households in the district during 2010-11 is taken for this purpose.

Regional figures relating the above items of infra-structure are computed from the relevant district

figures included in the regions are presented in Table 1.

Table 1 indicates the extent of regional disparities in infra-structural facilities available in Uttar

Pradesh. The extent of irrigation has considerably increased after the introduction of new-technology in

agriculture but the Bundelkhand region is lacking in this basic input very much. The percentage of gross

irrigated area to the gross sown area is only 9.2 during 2011-12 in the Bundelkhand region as against

23.4 per cent, 57.5 per cent and 31.8 per cent in the North Uttar Pradesh plain region, South Uttar

Pradesh plain region and Uttra Pradesh state respectively.

Table 1: Regional disparities in infra-structure facilities in Uttar Pradesh some selected items

1.Percentage of gross area sown irrigated during 2011-12

2.Availability of agricultural credit through various agencies

3.Percentage of inhabited villages electrified as on March 31, 2010

4.Rural literacy rate as per 2011 census

5.Number of regulated markets per block as on October 29, 2009

23.40 57.46 9.16 31.85

45.24 63.79 23.43 46.27

20.12 44.71 7.33 21.66

13.69 20.83 19.13 17.17

0.21 .019 0.09 0.16

ItemsNorth Uttar

Pradesh plainregion

South UttarPradesh plain

region

Buldelkhandregion

Uttar PradeshState

59


The south Uttar Pradesh and the Uttar Pradesh state with respect to other infra-structural facilities

which directly relate to the agricultural performance of a region are the availability of credit, power,

education, transport and marketing facilities but these facilities are very poor in the Bundelkhad region

as compare to other region of Uttar Pradesh as shown in items 2, 3, 4, 5 and 6 in Table 1 respectively.

Bundelkhand farmers, because of their socio-economic backwardness, deserve special attention as

regards the provision of extension services but it looks as if they are neglected in this regard.

Infra-structure and Agricultural Productivity

We have prepared the composite index of infra-structure and used it to measures the relative

position of the overall agricultural infra-structure in the districts. An index of infra-structure has been

constructed as a simple index of weighted standard scores for individual infra-structural items. The

correlation coefficient between agricultural productivity per hectare and individual items of infra-

structure are considered as weights. Agricultural productivity used in the study is the gross value

of agricultural output (of ten major crops) grown in Uttar Pradesh covering about 85 per cent of the

gross sown area per hectare during 2011-12 at constant (2001) prices. Regional difference in

the composite index of infra-structure and agricultural productivity along with the differences in the

level of adoption of new agricultural practices as measured by the adoption index in three regions are

presented in Table 2.

Table 2: Composite index of infra-structure and some other related items in the three regions and Uttar Pradesh state as a whole

6.Road length (in km) per thousand and square km. as on March 31, 2009

7.Number of composite demonstration for paddy and wheat per lakh of households during 2011-12

796.14 476.94 390.79 540.90

19.40 18.35 11.46 16.34

ItemsNorth Uttar

Pradesh plainregion


region

Buldelkhandregion

Uttar PradeshState

92.54 143.88 50.11 100.00

110.43 130.02 36.20 100.00

104.22 112.19 73.00 100.00

1.Composite index of infra-structure regional average

2.Adoption index regional average

3.Index of agricultural productivity

ItemsNorth Uttar

Pradesh plainregion


region

Buldelkhandregion

Uttar PradeshState

60


Table 2 reveals that the South Uttar Pradesh plain region is endowed with the infra-structure

facilities, whereas, these facilities are lacking very much as in the Bundelkhand region. Average indices

of infra-structure for the three regions turn out to be 50.51, 92.54 and 143.88 for the Bundelkhand

plateau, north Uttar Pradesh plain and south Uttar Pradesh plain regions respectively. The same pattern

of differences between the three regions is also indicated with regard to adoption of new agricultural

practices and agricultural productivity in the region. This is also borne out by the significantly positive

associates of infra-structure with the level of adoption and that levels of agricultural productivity

Adoption of new agricultural practices that promote agricultural productivity might be forth coming

where adequate infra-structure was available and in the absence of such an adequate infra-structure,

their adoption might not also be forth coming.

Conclusion

The study reveals the existence of inter-regional differences in the level of infra-structural facilities in

Uttar Pradesh. Uttar Pradesh plain regions are significantly endowed with the infra-structural facilities.

Whereas these facilities are lacking very much in the Bundelkhand plateau region. The same patterns of

inter-regional differences on the use of new agricultural practices and the level of agricultural

productivity is also indicated. It has been observed that the infra-structure is a significant determinant of

the level of agricultural productivity through the use of new agricultural practices is also remarkable. We

find that the availability of infra-structure induces the farmers to go in the widespread use of new

agricultural practices leading to higher level of agricultural productivity. On the whole infra-structure

contributes a great deal to modern agricultural and therefore a suitable policy for infra-structure with a

rural bias is needed for economic development of the agricultural based backward economic like that of

Uttar Pradesh.

References

lN. Shah, �Infra-structure for the India economy�, Commerce, Vol., 119, No. 5061, Annual Number, 1969.

lK.N. Prasad �the economy of backward region in a backward economy� A case study of Bihar in relation to other states of

India (2 Vol.), Scientific book Agency, Calcutta, 1967.

lC.R. Watson (jr), �Theinfra-0structure for agricultural growth�, in Herma M. South Worth and Berer F. Johnson (Eide):

Agricultural Department and Economic growth, Cornell university, press, Ithaca, New York, 1967, pp. 107-142.

thl�Infra structure and economic performance- Across section analysis of Bihar� presented by the author at the 19 Indian

Econometric Society Conference held at Poona during December 1980.

lWord Bank (1997), China 2020 sharing rising income, Washington V.C., U.S.A.

lYang Tao Denis (1996). �Urban based policies and rising income inequality in China�, The American Economic Review,

Vol. 89 No. 2, pp. 306-310.

lVyas, V.S. (1997). �Agricultural policies for the nineties issue and approaches:, in Uma Kapilo (Ed) (1998). Indian Economy

Science Dependence Academic Foundation, Delhi, pp. 367-399.

61

*Mayank Tripathi

A STUDY OF INDUSTRIAL REFORMS IN UTTAR PRADESH

*Assistant Professor, Banshi College of Management &Technology, Kanpur

This paper takes the view of Industrial reform in Uttar Pradesh. Uttar Pradesh is the most populous

state of India with one-sixth of the country's population. The large size of Uttar Pradesh is indicative of

the large contribution of manufacturing sector to the country's economic growth.

This paper discusses about Infrastructural reforms like Creation of Industrial Infrastructure

Development Fund (IIDF) and Establishment of Industrial Infrastructure Development Authority (IIDA).

Government of Uttar Pradesh has taken steps to reform Power and Energy sector by uninterrupted power

supplies for 24 hours to industrial areas and Natural gas to be promoted as an alternative source of

energy.

For the Industrial development of Uttar Pradesh Government is providing incentives to existing units,

deregulating & simplifying the policies and implemented Micro & Small Enterprises Policy in Uttar Pradesh.

In present era it is the need of each state to initiate industrial reforms and review investment

policy.

Key words:- Industrial reform, Infrastructure, Industrial Infrastructure Development Fund,

Investment Policy.

Introduction

India moved in the direction of economic and industrial reforms from year 1991.By taking this

view each state took initiatives. Uttar Pradesh is the most populous state of India with one-sixth of the

country's population. The large size of Uttar Pradesh is indicative of the large contribution of

manufacturing sector to the country's economic growth. Uttar Pradesh's large size relative to other

Indian states and the professed goals of its leaders and policy makers make it imperative for industries in

this state to develop fast. However, recently there has been a marked deceleration in industrial growth

which needs to be addressed by a strategically oriented industrial policy.

The Government of Uttar Pradesh took some initiatives to improve the industrial development.

The Industrial Policy introduced some specific measures to improve the regulatory framework for the

MSE sector which briefly included:

lSingle table under one roof' to obviate the need for a entrepreneur to visit different departments

lAutomatic approval for industrial building plans

lAbolition of inspections

lPollution zoning atlas for the State to facilitate with issue of no objection certificate by the

Pollution Control Board

lDeveloping micro-enterprise cities to meet critical infrastructure gaps

lLaghu Udyog Poshan Yojana.

l Making available credit at lower rates of interest and developing service sector

62


Infrastructure Reforms

1.Creation of Industrial Infrastructure Development Fund (IIDF) with a budgetary provision of Rs. 50

crores. Provision of Rs.50 crores was made for next four years also. Fund to finance and subsidize

initiatives in infrastructure creation;

2. Establishment of Industrial Infrastructure Development Authority (IIDA) to manage IIDF, IIDA to work

under a whole-time managing director, having professional personalities in its management. IIDA

will have right to collect user-charges and raise capital and will become self-sustaining through

professional project planning and implementations;

3. Creation of world class infrastructure through private partnership like transshipment centres,

integrated transport and trade centres, exhibition halls, trade centres, container depots, way-side

facilities, display centres etc.

4. Maintenance of Industrial Estates by a Cooperative Society of the entrepreneurs. The Society will

receive 60 per cent of taxes collected by the local authority and may be getting necessary financial

assistance as and when necessary;

Power and Energy Reforms

1.Uninterrupted power supplies for 24 hours to industrial areas. IT/BT/Food Processing/Agro-based

industries involving investment of more than 10 crores and other industries involving investment of

more than 50 crores will be supplied electricity through dedicated feeders;

2. Feeders having 75 per cent or more industrial load will be deemed as industrial feeders and will be

exempted from power cuts;

3. Dedicated feeders built at the cost of industries shall not be tapped for any other purpose, except

where such industry consents to tapping of such feeders for another industrial unit under

mutual agreement;

4.Captive and co-generation to be promoted;

5. Natural gas to be promoted as an alternative source of energy;

6.Financial assistance for investment in infrastructure projects;

7.Industrial Estates for IT /BT units are eligible for 50 per cent of investment or Rs.25 million, whichever

is less;

8.Other industrial estates are eligible for 20 per cent of investment or Rs.25 million,

whichever is less;

9.Call centre hubs having covered area of not less than 10,000 m2 are eligible for 50 per cent of

investment or Rs.5 million, whichever is less;

63


Incentives to Existing Units

1. Stamp duties on business transactions to be rationalized to Rs. 2 per thousand;

2.Agreement relating to deposit of title deeds for pawn or pledge, from existing Rs.5 per

thousand;

3.Bank guarantee, subject to a maximum of Rs.10,000 from existing Rs.5 per thousand subject to a

maximum of Rs.10,000;

4.Conveyance of movable property belonging to the industry, from existing Rs.20 per thousand;

5.Mortgage deed in which possession is not transferred, from existing Rs.70 per thousand;

6.Collateral security, from existing Rs.10 per thousand;

7.Rates of interest on arrears of declared trade tax and assessed trade tax to be reduced to

14 per cent and 12 per cent, respectively from existing 24 per cent and 18 per cent,

respectively;

8.Reimbursement of 50 per cent expenditure incurred on registration of patents and other intellectual

property rights, subject to a maximum of Rs.5,00,000;

9.Interest rates of state financial institutions to be brought at par with bank! market rates;

10.Reimbursement to small scale units of expenditure incurred on obtaining quality certification

of 50 per cent of expenditure subject to a maximum of Rs. 2,00,00.

11.Market and technical studies and study of production skills, 90 per cent of expenditure

subject to a maximum of Rs. 50, 000;

12.Incentives to existing small scale units under U.P. Small Industries Technical Up-gradation

Scheme;

13.50 per cent subsidy, subject to a maximum of Rs.2,50,000 for purchase/import of technical know-

how from government recognized institutions;

14.50 per cent capital subsidy, subject to a maximum of Rs.2,00,000 for purchase of additional

machinery for increasing production;

15.5 per cent interest subsidy for five years, subject to a maximum of Rs.50,000 per annum, on loans

from banks / financial institutions for purchase of machinery;

16.Purchase of diesel for captive power plants permitted against from 3-B;

17.Identification of trade fares and exhibitions will be made at industries shall be chosen through a

transparent process at least 6 months before the event. State Government will bear 50 per cent of

transportation and space rental expenditure;

64


Deregulation and Simplification

1.An Act to be passed for effective implementation of Single Window Clearance System. System of

self-certification and third-party certification will be introduced;

2.Only one combined inspection of industries in a year;

3.Small scale units having less than 25 employees exempted from labour laws;

4.Entrepreneurs and traders having turnover up to Rs.3,00,000 exempted from trade tax registration;

5.Automatic approval of industrial building maps on submission except for a restricted list of highly-

polluting industries;

6.Compulsion of giving employment to land-holder in lieu of acquired land removed;

7.In case of recovery of dues:

lStamp duty to be charged on actual auction amount;

lRecovery charges on actual amount recovered/ amount of OTS only;

8.Breaking local truck cartels

U.P. Shops and Establishments Act, 1962 will be amended considering the needs of Call Centres,

Multiplexes, Shopping Complexes and other services.

Micro and Small Enterprises Policy in U.P.

In addition to policy measures announced by Central Government, most state governments have

programmes to help the growth and development of the small scale industries. State government has

also announced an industrial policy in 1998 which a number of provisions relating to small enterprises

such as single table under one roof and permitting inspection of factories only with prior approval of the

District Magistrate. More recently, in February 2004, Uttar Pradesh Government has approved a New

Industrial and Service Sector Investment Policy, 2004 (main features of policy are annexed). The main

provisions of the policy related to small scale industry sector are given below:

1.One hundred per cent exemption from payment of stamp duty for new small scale firms in 24

districts of Purvanchal and 7 districts of Bundelkhand.

2.10 per cent capital subsidy on investment in new small scale firms in 24 districts of Purvanchal and 7

districts of Bundelkhand, subject to a maximum of Rs. 500000.

3.15 per cent capital subsidy, subject to a maximum of Rs. 750000, to women enterprises and

economically and socially weaker strata entrepreneurs in such areas.

4.5 per cent interest subsidy to new small scale firms for 5 years subject to a maximum of Rs. 250000

per annum.

5.Exempting small scale firms having less than 25 employees from labour laws.

6.Proposal to amend Uttar Pradesh Shops and Establishments Act, 1962 considering the needs of

calls centres, multiplexes, shopping complexes and other service facilities which are kept open 24

hours.

7.Proposals to create a Uttar Pradesh Small Industrial Firms Rehabilitation Board.

65


It can be said that the policy focus continues to be on small scale industrial firms and on

manufacturing segment only. Although micro and small enterprises exist in trade and services as well.

With the exception of small scale industry policies, the major objectives of the other programmes, such

as rural industrialization, employment generation, poverty alleviation and women empowerment, has

been to facilitate the establishment of an enterprise rather than ensuring its sustained growth on a

long term basis. Only 7 per cent of unorganized manufacturing enterprises and 29 per cent of service

enterprises were found registered in the state of Uttar Pradesh. Even at national level, only 10 per cent of

manufacturing and 39 per cent of service enterprises were registered. Thus, most of the micro and small

enterprises in the state are outside of the policy and regulatory framework of the government. In general,

an enterprise in Uttar Pradesh needs to obtain 13 major approvals prior to setting up an enterprise and

another 10 after that. These approvals are mainly related with registration, land use permission,

certification, no objection from Pollution Control Board, etc. However, state government has introduced

regulatory reform in the state in order to provide investment friendly environment. But most enterprises

hesitate for registration of the firm and face hurdles in compliance with government policy and

regulations. A recent survey also highlighted the problems of entrepreneurs regarding business

operations. They also reported that despite the changes, government inspectors continue to harass

them. Supply chain relations between micro and small enterprises are also weak and are forced mainly

by market demand.

Thus, micro and small enterprises in the state of Uttar Pradesh are contributing significantly in

economy and social empowerment of the weaker sections of the society. Most of the micro and small

enterprises are owned by family members and are rural based in the state of Uttar Pradesh, however,

sector is characterized by low average investment Rs. 147200 on plant and machinery in the

manufacturing enterprises, Rs. 73200 in service enterprises and Rs. 135875 in trading enterprises. 53

per cent of manufacturing enterprises had initial investment of over Rs. 1,00,000 as against 42 per cent

of trading and 90 per cent of service enterprises. The average employment per enterprise in the sector is

low with 2.36 persons in manufacturing segment and 1.67 in service enterprises. Registered small scale

enterprises have 4.48 employees in an enterprise. But most micro and small enterprise workers are

owners and unpaid household workers, accounting for almost 75 per cent of the workforce. Women

workers are highly represented and are more in manufacturing enterprises than service enterprises, with

a share of 27 and 14 per cent, respectively. Most manufacturing micro and small enterprises are based

on traditional skills and generally produce low quality products and cater mostly for local markets.

Government support to micro and small enterprises has shifted from protection to promotion; however,

most of the enterprises are outside of the ambit of policy and regulatory framework. This calls for

introducing industrial reforms and policy for management and development of micro and small

enterprises in the state.

Conclusion

We can analyze that Government of Uttar Pradesh is willing to create a industry friendly

environment. These major reforms are encouraging the investors. It can been reiterated that in today's

66


scenario, a state needs the investors more than the investors needing the state and more so after

knowing the fact the industry's are fleeing to Uttar Pradesh in pursuit of better incentives in that state. In

such a situation it becomes essential to actively pursue a set of agenda items. Some of these are:

l Making the state easy to do business with

l Solving problems of entrepreneurs, not selling procedures to them

l Using measurements for improving, not mere accounting

l Being a facilitator, not a controller

l Treating investors and entrepreneurs as customers

The art of working in the above mode is how the three elements-purpose, process and people link

together. It is important to understand these links for better execution of things. Hence, it is of vital

importance to develop Infrastructure, Power and Energy sector, Incentives to existing units,

Deregulation and Simplification and through Micro and Small Scale Policy � and also the way they work

together as a whole. They are the foundation for effective execution, and are at the centre of

conceiving and executing any strategy.

Planning Commission, India, Tenth Five Year Plan (2002-07)

Singh A.K. & Fahimuddin (2006), 'Socio-Economic Survey and Preparation of Action Plan for Generation of Self-

Employment through Khadi and village Industries In Selected Districts of Eastern Uttar Pradesh.

References

lAcademic Foundation (2003), India's Manufacturing Sector Policy Framework, Delhi: Academic Foundation.

lBalasubrahmanian (2000), India's Small Scale Industries Policy In 1990's, Indian Economic Journal, Vol. 47 (2).

lDas, Tarun (2003), Economic Reforms In India, Bank Of Maharashtra, Pune.

lGovernment of India (2002), Third All India Census of Small-scale Industries 2001-02, DC (SSI), Ministry of Small-Scale

Industries, Government of India.

lGovt. of U.P. (2005), A Review of Policy and Regulatory Environment, for MSEs (Micro and Small Enterprises) in Uttar

Pradesh.

lGoyal S.K., Chalapati Rao K.S and Kumar Nagesh (1984), �Small-scale and Big Business,� Indian Institute of Public

Administration.

l

l

67

E-Commerce which primarily refers to buying, selling, marketing and servicing of products or

services over internet. E-Commerce provides multiple benefits to the consumers in form of

availability of goods at lower cost, wider choice and saves time. Generally distribution of global E-

Commerce has been influenced by economic factors, political factors, cultural factors and

supranational institutions.

E- Commerce can be broadly divided into the Business- to- Business (B2B) and

the Business-to-Consumer (B2C) segments. According to Forrester, the business to consumer

(B2C) e-commerce market in India is set to grow at the fastest rate within the Asia- Pacific region at a

CAGR of 57% between 2012-16. So far about 75-80% of all e-commerce transactions in India are

travel related, comprising mainly of online booking of airline tickets, railway tickets and hotel

bookings. The biggest players in the travel category are MakeMytrip.com, Yatra.com and the

Indian Railways IRCTC website for railway bookings.

Non travel related online commerce comprises 20-25% of the B2C e-commerce market and

includes :

lE-tailing or online sales of durable goods

lFinancial services such as insurance and online bill payment

lOnline classified, matrimonial and job websites as well as market places

lDigital downloads including music, eBooks and paid content subscriptions

Of these e-tailing is the largest and fastest growing segment. The most popular

categories here are similar to those in other markets and include consumer electronics, computer

hardware, mobile phones, books and apparel. This list is rapidly expanding

to include new categories such as appliances, furniture, pet care, organic foods, health care,

cosmetics and beauty products. In many ways India's e- commerce market is the same stage of

growth as the US was at the late nineties and china was at about 6 to 7 years ago.

This paper examines different opportunities of e- commerce via, E � Business, E- Learning, E-

Insurance for the WTO and developing countries and future media of E- Commerce. It raises key

challenges also that are being faced by consumers relating to e- commerce i.e. Ethical issues,

perceptions of risk in E-service encounters etc.

Introduction

Many international business researchers are of the opinion that increased globalization of

markets and increasing international competition imply that firms in all nations will face similar, if not

identical, competitive environment. In the new millennium, the internet-based way of doing

E COMMERCE: OPPORTUNITY AND CHALLENGES IN INDIAN CONTEXT

* Assistant Professor, Jagran College of Art, Science and Commerce**Assistant Professor, Jagran College of Art, Science and Commerce

*Dr. Vidushi Sharma

**Dr. Roopali Awasthi

68


business has certainly changed many industries and has influenced many customers and

business. It has changed the shapes of whole set of industries and markets and has already had a

great impact on consumers and is all set to have a very exciting future. It has improved services,

reduce costs, open new channels and transform the competitive landscape.

E-Commerce, which primarily refers to buying, selling, marketing and servicing of products or

services over internet. Business on the net is classified into B2B (Business to Business), B2C

(Business to Consumer) and C2C (Consumer to Consumer). B2B transactions are largely between

industrial manufacturers, partners, and retailers or between companies. B2C transactions take

place directly between business establishments and consumers. However generally E-commerce

can be broken down into two parts first E-merchandise and second E-finance.

Growth of E-commerce

Electronic commerce or E-Commerce encompasses all business conducted by means of

computer networks. Advances in telecommunications and computer technologies in recent years

have made computer networks an integral part of the economic infrastructure,. More and more

companies are facilitating transactions over web. E-commerce provides multiple benefits to the

consumers in form of availability of goods at lower cost, wider choice and saves time. People can

buy goods with a click of mouse button without moving out of their house or office. Similarly online

services such as banking, ticketing including airlines, bus, railways, bill payments, hotel booking

etc. have been of tremendous benefit for the customers. Most experts believe that overall E-

Commerce will increase exponentially in coming years. Business to business transactions will

represent the largest revenue but online retailing will also enjoy a drastic growth. Online businesses

like financial services, travel entertainment, and groceries are all likely to grow.

India has an internet user base of about 137 million as of June 2012. The Penetration of

e-commerce is low, compare to market like the United States and United Kingdom, but it is

growing at faster rate with a large number of new entrants in the industry. Indian e-commerce

market was worth about $2.5 billion in 2009. It went up to $6.3 billion in 2011 and to 14 billion in

2012.

Factors Influencing the Distribution and Forms of Global E-commerce

All countries are not likely to benefit equally from the virtual circle of Internet diffusion created

by globalization and multiple revolutions in communication technologies (ICTs). Forces influencing

the distribution of global E-Commerce and its forms include economic factors, political factors,

cultural factors and supranational institutions. Economic factors mainly influence perceived

relative advantage of Internet use whereas political and cultural factors influence the compatibility

of the Internet with a society. Supranational institutions initiatives are influencing the price, quality

and availability of ICT products and services, mainly in developing countries, thereby increasing

69


relative advantage of Internet use. Moreover international institutions are influencing laws,

regulations and policies in developing countries making them more compatible with Internet

use.

Review of Literature

An attempt has been made to put forward a brief review of literature based on few of the related

studies undertaken worldwide in the area of e-commerce as follows.

Elizabeth Goldsmith and Sue L.T. McGregor (2000) analyzed the impact of e-commerce on

consumers, public policy, business and education. Andrew D. Mitchell (2001) examined the key

issues that electronic commerce poses for Global trade, using as a starting point the General

Agreement on Trade in Services (GATS), the world Trade organization (WTO) agreement most

relevant to e-commerce. Jackie Gilbert Bette Ann Stead (2001) reviewed the incredible growth of

electronic commerce (e-commerce) and presented ethical issues that have emerged. Security

concerns, spamming, Web sites that do not carry an "advertising" label, cyber squatters, online

marketing to children, conflicts of interest, manufacturers competing with intermediaries online.

Arvind Panagariya (2000) examined Economic issues raised by e-commerce for the WTO and

developing countries. E-commerce offers unprecedented opportunities to both developing and

developed countries.

Opportunities for E-commerce

Development of internet gave the birth of an electronic marketplace which provide a virtual

space where sellers and buyers trade with each other as in the traditional marketplace. E-

marketplaces have become an alternative place for trading. These features have been reshaping

the economy by affecting the behaviour of buyers and sellers.

E-business

E-business affects the whole business and the value chains in which it operates. Adopting E-

Business also allows companies to reduce costs and improve customer response time. E-

commerce involves an online transaction. This can range from ordering online, through online

delivery of paid content, to financial transactions such as movement of money between bank

accounts. Online stock trading saw sustained growth throughout the period of broadband

diffusion. E-shopping is available to all these who use a computer. Over the past year Amazon.Com,

E-Bay India, India times have seen a rapid growth in categories such as mobile handsets,

jewellery, fashion apparel, books, gift items and other items.

E-commerce Integration

The rationale for infusion of E-Commerce education into all business course is that

70


technological developments are significantly affecting all aspects of today's business. An

e-commerce dimension can be added to the business curriculum by integrating E-Commerce

topics into existing upper level business courses.

Open and Distance Learning

The education and continuous learning have become so vital in all societies that the demand for

distance and open learning will increase. As the availability of the Internet expands as computing

devices become more affordable and E-learning will become more popular. In fact, for many

countries distance education has been the most viable solution for providing education to

hundreds of thousands of students.

E-Insurance

The recent growth of Internet infrastructure and introduction of economic reforms in the

insurance sector have opened up the monopolistic Indian insurance market to competition from

foreign alliances. Traditional insurance requires a certificate for every policy issued by the insurance

company. However paper certificates encumber problems including loss, duplication and forging

of the certificate. The conventional certificate is now replaced with an electronic certificate that can

be digitally signed by both the insurer and the insurance company and verified by a certifying

authority.

Online policy purchase is faster, more user-friendly and definitely more secure than the

traditional process. E-insurance also makes the insurance procedure more secure since the policy

details are stored digitally and all transactions are made over secure channels. Therefore it is more

attractive to the insurer.At the same time it incurs less cost and requires fewer resources than

traditional insurance and is therefore more profitable for the insurance company.

Future Media of E-commerce

Patric Barwise (2001) reported that Probably 99% e-commerce today is done using PCs

either desktops or laptops. For B2B e-commerce this is unlikely to change for B2C e-commerce

however, things will be more complex. There will be wider range of relevant media, including

interactive digital TV and a range of mobile and wireless services. There will be huge difference

between different consumers ownership of equipment and access technology. Some will have

broad band access and others have no digital communication at all.

Challenges for E -commerce

Internet based e-commerce has besides, great advantages, posed many threats because of

its being faceless and borderless. Some of the challenges are given below.

71


Perceptions of Risk in E-service Encounters

Mauricio S. Featherman, Joseph S. Valacich & John D. Wells (2006) reported that as

companies race to digitize physical based service processes repackaging them as online e-

services, it becomes increasingly important to understand how consumers perceive the digitized e-

service alternative. E-service replacements may seem unfamiliar artificial and non authentic in

comparison to traditional service processing methods. Consumers may believe that new internet

based processing methods expose them to new potential risks the dangers of online fraud,

identity theft and to steal confidential information using spoofed web sites, have become common

place and are likely to cause alarm and fear within consumers.

E-commerce Integration

E-commerce Integration assures coverage of all critical aspects of e-commerce, but it also has

several obstacles. First adding e-commerce materials to existing business courses can

overburden faculty and students. Second many business faculty members may not wish to add e-

commerce topics to their courses primarily because of their own lack of comfort with technology

related subjects. Third and finally this approach requires a great deal of coordination among faculty

and disciplines in business schools to ensure proper coverage of e-commerce education.

Legal System

The information transferred by electronic means which culminates into a contract raises many

legal issues which cannot be answered within the existing provisions of the contract act. The IT act

does not form a complete code for the electronic contract. Some of the multifaceted issues raised

are Contracts by e-data, Cyber contracts interchange, Validity of e-transactions, Dichotomy of

offer and invitation to treat, Identity of parties, the issues of jurisdiction etc.

Human Skills Required for E-commerce

Over the recent few years, several capitalists have detected a rising prospects in the

products due to rising Internet usage, technology advancement with several fraud anticipation

tools, gen-next who find it easier to transact by the Internet and more importantly, two way

communication between the buyer and seller through blogs and VolP's, the evidence is there for all

to see. Some of the early appetizers like Flipkart.com, snapdeal.com, amazon.com have seen

tremendous growth since their beginning.

Today, the market place is engulfed with several e-commerce options for customers to

choose from. A variety of advanced products and services are being offered, pampering customers

for choice. Online shopping is no more an honour enjoyed by your friends and family living in the US

or UK. Today, it is a reality in India.

72


2007

2008

2009

2010

2011

0.5

1.6

2.5

4.3

6.3

Years Growth (in billions)

6000

5000

4000

3000

2000

1000

0

Growth

2007 2008 2009 2010 2011

Growth

Growth of E-commerce over the years

( Figures in USD billions)

In the last couple of years, the growth of e-commerce industry in India has been extraordinary

as more buyers have started determining to profit of using this display place. There is sufficient

scope for online trade in the future if they comprehend the Indian shopper's essence and cater to

their needs.

By 2016 the Indian E-Commerce market is expected to hit US$ 18 billion, growing from

US 14 billion in 2012. This will be driven mainly by growth in market place models, making up

two thirds of the projected figure, as conflicting to the current model in which online shops own

and manage their own product supply chain.

Offline brands will also shift their operations online. According to Allegro researches

�We expect horizontal players to generate significant business from market place

models in the future�,

Today, we are speaking about E-Commerce development of India, the seventh largest by

geographical area, the second most populous country, and the most crowded democracy in the

world. Indian E-Commerce space percentage is getting higher as more and more online retailers

73


enter the market. Although this level of entry in the E-Commerce market is good from a long term

view point, the challenge is that most tycoons do not have the resources or capital to wait for years

before they can get profit.

With the rapid expansion of internet e-Commerce is set to show a very important role in the st21 century the new chances that will open will be available to both large establishments and small

companies. The role of government is to deliver a legal framework for E-commerce so that while

domestic and international profession are permissible to expand their horizons, basic rights such

as privacy, intellectual property, prevention of fraud, consumer protection etc. are all taken

care of.

Conclusion

With the growth of computer technology, the World Wide Web has become the connection

medium for the networked world. Computers from locations that are geographically dispersed can

talk with each other through the Internet. Each and every technology has positives and negatives

association with its use and adoption.

It is clear from above discussion that E-commerce creates not only new opportunities for

business, education and academics. It raises challenges also like ethical, legal and requirement

of additional skills for human resources.

While many companies, organizations and communities in India are beginning to take

advantage of the potential of E-Commerce, critical challenges remain to be overcome before e-

commerce would become an asset for common.

References

lAndrew D. Mitchell (2001); towards compatibility: The future of E-Commerce within the global

trading system; 2001; pp. 683-723.

lDiana Oblinger (2001); Will E-Business shape the future of open distance learning? : Open learning;

vol. 16, no.1, 2001; pp. 9-25.

lElizabeth Goldsmith and Sue L.T. Mcgregor (2000); E-Commerce: Consumer protection issues and implications

for research and education; Journal of Consumer studies and home economics; vol. 24, no. 2, June 2000, pp. 124-

127.

lMauricio S. Featherman, Joseph S. Valacich and John D. Wells (2006); Is that authentic or artificial Understanding

Consumer perception of risk in E-Service encounters; Information system Journal; vol. 16, 2006; pp. 250-257.

lPrithviraj Das Gupta and Kasturi Sen Gupta (2002); E-Commerce in the Indian Insurance Industry; Electronic

Commerce Research; vol. 2, 2002; pp. 43-60.

lRichard T. Watson and George M. Zinkha (1997); Electronic Commerce Strategy: Addressing the key questions;

Journal of Strategic Marketing; vol. 5, pp. 189-209.

lDaniel N. Ownwanne and Kamal Nayan Agarwal (2007); Outsourcing E-Commerce effects in Global Market in its

statistical survey.

lDaniel J. Pare (2002); B2B E-Commerce services in developing countries; London school of Economics.

74

*Assistant Professor, Department of Management & Commerce, Dream Valley College , Gwalior.**Professor (Commerce) & Director M.B.A, M.L.B. Govt. College of Excellence Gwalior (M.P.)

IMPACT OF ELECTRONIC COMMERCE

STRATEGIES ON BUSINESS *Ankit Gupta**Dr. R. C. Gupta

The spread of high-speed Internet among communities and the proliferation of electronic commerce

(e-commerce) among businesses create both opportunities and challenges for businesses. On the one

hand, e-commerce may reduce many of the disadvantages associated with an isolated location by

decreasing marketing, communication, and information costs and increasing access to lower cost

suppliers and services. On the other hand, geographically isolated businesses may find increased

competition for their "local" or "traditional" customers from nonlocal Internet businesses.

The proliferation of electronic commerce throughout business organizations is having profound

effects on business strategies. "The rules of competition are being re-written and redefined as the

technological revolution continues, particularly in the area of world-wide commerce." Projections of

commerce via the internet are remarkable.

This paper examines the impact of electronic commerce strategies on business. In

this study, we have used E-Business Strategies for Competitive Advantage to Internet companies. By E-

Business Strategies e-business managers can adopt appropriate strategies for meeting the unique

challenges of e-business. This study provides e-business managers with a framework to help them

systematically analyze and develop successful strategies to address the problems of doing business

online.

Introduction

The proliferation of electronic commerce throughout business organizations is having

profound effects on business strategies. "The rules of competition are being re-written and redefined

as the technological revolution continues, particularly in the area of world-wide commerce."

Projections of commerce via the internet are remarkable

"Electronic commerce has evolved from a high-tech marvel to a corporate initiative."

Electronic commerce can no longer be ignored or thought of only as an I.T. project. Electronic

commerce projects must now be intertwined with the firm's strategic plans. The most notable

strategic effects at the business-unit level are value-added, differentiation, cost leadership, focus,

and business growth strategies.

Many rural businesses have adapted to the "opportunities" and "threats" created by

advances in information and communications technologies (ICT) by developing an e-commerce

strategy. In narrow sense E-Commerce refers to using the Internet to market and sell goods and

services. E-Commerce is, however, much broader and includes "the electronic exchange of

information, goods, services, and payments and the creation and maintenance of web-based

relations"

E-Commerce activities generally are classified as business-to-business (B2B) or

75


business-to-consumer (B2C). Business-to-business e-commerce involves using the Internet to

facilitate supply-chain operations and include electronic data interchange (EDI), electronic funds

transfer, electronic forms and messaging, and shared databases. Business-to-consumer e-commerce

uses the Internet as a retail market channel and in the case of information, as a product or service

delivery channel. B2B e-commerce dominates B2C e-commerce in terms of value of sales and percent

of total sales.

This paper examines the effects--emerging and potential--of electronic commerce on these

types of strategies.

E-commerce is a commercial activity dealing directly with the trading of goods and services

and with other related business activities, in which the electronic communication medium plays a

central role. These activities include the communication of information, the management of payment,

the negotiating and trading of financial instruments, and the management of transport (Heng, 2003).

E-Commerce is a part of e-business and its goal is to generate profit through the various set of

activities based on buying and selling principles.

E-commerce is strongly related to the information technologies and telecommunication

technologies. (The banking industry as a fast growing industry is facing the challenges of electronic

commerce business. Although the e-commerce basics have been well known for years, some

adjustments according to the banking needs have been adopted). An efficient way to do e-business

is to manage web implementation of the assets that present and support entity's core business

operations, including the software applications and databases in the information technology

environment. Although a significant investment might be expected to cover the requirements of

powerful, flexible and secure technology, there are many tools on the market supporting e-business

technology fundamentals and products needed to build e-business solutions (Vedran Batos

2003).

Benefits of E-commerce to Company

Many businesses adopt an e-commerce business plan because it provides the owner

greater flexibility in terms of operating location and hours. That is, e-commerce may present an

individual with the opportunity to be a "lifestyle entrepreneur" and locate the business where the

entrepreneur wants to live. For some individuals this enhanced flexibility might result in a move, but in

many cases e-commerce permits entrepreneurs to remain in place and benefit from proximity to

family or other local assets.

Most businesses use e-commerce because it provides the opportunity for increased

profits (through higher sales or lower costs) and thus enhanced sustainability of the firm. E-Commerce

has the potential to significantly improve the efficiency of operations in all phases of the business'

supply chain.

76


E- Commerce Services and Products

E-commerce products and services are methods used by banking organizations to carry out their

transactions without necessarily coming into physical contact with their clients. These services include

Automatic Teller Machines (ATMs), Electronic Fund Transfer (ETF), mobile banking, online banking,

Electronic Data Interchange (EDI) and telecommunication services.

Credit card is one of the few remarkable innovations introduced successfully by banks in the last five

decades, and it is currently being used extensively in B2C electronic commerce. But it is an expensive

means of payment for e-commerce and many on-line shoppers will prefer other forms of paying for their

purchase (Long 2000). So will many on-line retailers who have to cough up set up and transaction costs

and 2-3% of every payment. Moreover credit cards are not suitable for person-to-person trade on the

Internet. In short, e-commerce has created a demand for low cost facility for micro payments and flexible

payment (Long 2000). New ways of on-line payments are appearing in the market, such as deduction

from a pre-paid account, electronic billing services, direct transfer out of bank accounts.

There is a possibility for credit card companies and banks to act as information

intermediaries. In such a construction, a bank customer downloads software from the bank that

he knows and can trust. With the help of the software, he can browse without the target websites

knowing his identity at all. When he decides to buy an article on-line, the software generates a new

identity for him, with a fictitious name and e-mail address, a coded postal address, and a one-off

credit card number. The new identity is sent, via the online merchant, back to the bank. The bank would

then check the details of the transaction and approves the transaction. Similarly the post office

receives a decoded address label and the coded name.

Impact of the Internet on Marketing Mix and Competitive Forces

The Internet can dramatically lower entry barriers for new competitors. Companies can enter into

e-commerce easily because they do not need sales forces and huge capital investments as they

do in offline markets. As the number of people with Internet access increases, the competition for

online business in many industries will also increase. According to the Department of Commerce's

'Digital Economy 2000' report, in 2000 the number of people with Internet access reached an

estimated 304 million worldwide, an increase of almost 78 percent over 1999 (Betts 2000). The Internet

also brings many more companies into competition with one another by expanding geographic

markets (Porter 2001).

The Internet changes the basis of competition by radically altering product/service

offerings and the cost structure of firms (e.g., cost reductions in production, distribution, and

transaction). The Internet also changes the balance of power in relationships with buyers and suppliers

by increasing or decreasing the switching costs of these buyers and suppliers. By reducing

customers' search costs, the Internet makes price comparison easy for customers, and thus increases

price competition (Bakos 1998). The price competition resulting from lowered customer search costs

77


increases rivalry among existing competitors, reduces switching costs of customers, and thereby shifts

bargaining power to customers. On the other hand, IT reduces menu cost�the cost of administering

multiple prices for a number of different products or services�and, in part, facilitates price

discrimination (Bakos and Brynjolfsson, 1997). The Internet creates new substitution threats by enabling

new approaches to meeting customer needs and performing business functions (Porter 2001). World

Wide Web (WWW) technology itself has produced new promotion venues. The Internet also facilitates

an electronic integration of the supply chain activities, achieving efficient distribution and delivery. It also

facilitates partnerships or strategic alliances by networking partners or allies.

E-business Strategies for Competitive Advantage

This section considers the impact of the Internet on marketing mix and competitive forces,

and suggests strategies for achieving a competitive advantage.

1. Product Strategy

On the Internet, consumers can easily collect information about products or services

without traveling to stores to inspect products and compare prices. In the offline market researching

product offerings can be extremely expensive and time consuming. As a result, consumers rely on

product suppliers and retailers to aid them in the search, and the suppliers and retailers take

advantage of this situation by charging higher prices (Allen and Fjermestad 2000; Viswanathan 2000).

Consumers end up paying more and often not getting the product they really wanted. However, this

is not the case for e-commerce. In the Internet market, a complete search of product offerings is

possible at virtually no cost. Because consumers can easily compare prices and find close

substitutes, companies are forced to lower prices. Companies cannot achieve competitive

advantage simply by exploiting consumers' search costs, as they did in the physical market.

2. Price Strategy

The Internet enables consumers to compare prices, products, and services across

suppliers. For example, by logging onto price-comparison sites like Pricescan.com and shopping

agents like Bottomdollar.com, consumers can readily compare the prices and features of more than

10,000 products available on the Web (Sinha 2000). This leads to increased price competition and

lowers the prices of products or services. According to Bakos (1998), lower search costs for price and

product offerings in Internet marketplaces promote price competition among sellers. The Internet

thus significantly affects competition, and intensive price competition can eliminate sellers'

profits.

3. Promotion Strategy

One of the reasons why many dot.com companies do not realize profits is that they spend

a great deal of money for mass marketing to promote their e-brands to consumers. One television

executive recently said, "The dot-coms spent like drunken monkeys trying to build their brands. They

were willing to pay any price. They were unsophisticated and in a hurry" (Elliott and Rutenberg 2000).

78


The recent demise or downsizing of so many Internet start-ups has had a significant effect on television

network revenues (Carter 2000).

4. Place Strategy

For most companies, place refers to the supply chain (or value chain). The place aspects of

the marketing mix are closely related to the distribution and delivery of products or services. The

Internet and its associated application software have significantly changed the way companies'

products or services are delivered by reducing transaction and distribution costs.

One way for companies to differentiate their products from rival companies is faster and

more efficient delivery of products to their customers. The Internet allows companies to jump over

parts of the traditional supply channel. Direct sellers like Dell Computer do not rely on wholesalers

and retailers to deliver their products to consumers.

E-business strategies composed of the five competitive forces and the four marketing mix shows

that there is no single optimal business strategy for e-commerce because the sources of competitive

advantage differ across different industries or markets. By the same token, in industries or markets

where different levels of competitive forces are present, certain combinations of product,

price, promotion, and place strategies may not work for gaining competitive advantage.

E-commerce Marketing Strategy

E-commerce marketing strategies helps in tuning the business to meet greater peaks withstanding

the obstacles global e-commerce marketing facts with the help of suitable e-commerce marketing

solutions. There are a wide variety of e-commerce marketing strategies that may be

effective in deciding upon the business trends. These marketing strategies of creating propaganda help

in inviting more traffic to your websites there by increasing the effective online business with boost in

the page rank of your site.

The main e-commerce marketing strategy includes various factors such as :-

Improving Traffic

To increase the business today, give a boost to the traffic. Traffic gets affected due to

several reasons such as lack of content stuffs, offensive contents on their sites, no proper handle over

keywords, lack of attraction over webpage titles as well as description and many more. Failing to know

the reason behind the slowdown of traffic is an added reason in fall of the traffic rates.

A professional site must be perfect with the content which is the main factor that gives choice to the

visitors either to explore over the site and revisit for updates or to quit. Contents are responsible to

manage the visitors and to handle the professional look that decides on the search engine ranking.

Creating Hype

To get the company name to reach the public is the main goal of the e-commerce

marketing strategies that work upon. It is effectively done by spreading the information among

79


friends and family circle. Publicity over the professional site can increase more visitors when the

products and stuff on the site are more interested upon. To spread a word on the company a

professional can help in reaching the right track of advertisement.

Enhancing the business can be effectively done with the help of e-commerce marketing strategy

that helps in creating impact of e-commerce on marketing and business issues. Some of the hyping

techniques include the posting of articles, blogging, press release, and email campaign

through known circle of people. Creating hype makes people expect what you can do for

them.

Enhancing Page Rank

Page ranking also has several aspects to be performed with the contents and the stuff it

holds. The page rank increases the possibility of click ability over the search engine result page. As

some customers' think of using their credit cards over the online websites for purchase due to the

poor page rank. A good page rank must create a first sight trust over the customers or the

visitors ensuring for safety transaction. The page rank gives an idea that this site is well recognized

and accepted among the other online sites.

Search Engine Backing

Search engine marketing plays a major role in enhancing e-commerce marketing

solutions with definite search engine concepts. The e-commerce marketing concepts are essential

in making the difference among the website click ability. Search engine e-commerce marketing and

its four domains helps the people who search with the relevant keywords to land with the right content

of data.

Support with Damage Control

Safety measures with the website security are more essential as the visitors are more

cautious in choosing their sites for a purchase. Secure professional sites are more liked by the

customers as they expect for the search engine results that match their expectation. Support with

damage control is essential as the website informations are not to be taken for other usage by any

one. Securing the data as well as providing security to the customers' transaction is the most essential

ones to be cared upon for best profit on providing the best e-commerce marketing solutions.

E-commerce Marketing Plan

E-commerce marketing plans includes the Concept of Service that stimulates the profit

level with increase in the website traffic. Updates over the sites with effective offering services to serve

the customers with attractive and comfortable service are the main factors on which e-commerce

marketing plan and strategies work upon.

E-commerce marketing plan include the essential organizing patterns with service to

website designing, construction, programming, development, maintenance and promotion of the

product that are launched over the site.

80


Online business organization includes the operation of the website product dealings such

as ordering, conformity on order demand and supply, design description, customer service and support

to satisfy the expectation.

Ecommerce marketing plan must include the following stages.

lGoal definition for the site

lPlanning of website structure

lWebsite design and development

lWebsite programming

lTechnical release of website

lWebsite maintenance

Impressive and Effective E-Commerce Marketing Strategies are the best tools with

supportive e-commerce marketing concepts and organizational tricks that helps in enhancing the

business development. E-commerce marketing tactics with conventional type of business with

extraordinary stuff on the website takes the website to the top ranking position.

Findings and Suggestions

On the basis of our study the following points will show some findings and suggestions:

1.Focus on Niche Markets

Marketing and selling products through a designed website on the Internet places

companies in competition with a large number of firms and provides consumers with easy access to

comparisons of competitors' products and prices. Head-to-head competition with large Internet

stores will occur on standardized, high-volume items such as books, shoes, sporting goods, and

consumer electronics. Smaller businesses generally do not have the ability to compete in these

e-markets because the firms do not have (1) the volume or scale economies to match the low price,

or (2) the marketing budget to get an early listing on web searches. Thus, it is recommended that

smaller businesses concentrate on a niche market in order to reduce online competition.

2.Effectively use Service Providers

A wide variety of programs and services are available locally and on the Internet to

assist companies with their e-commerce. Services available include website design and hosting;

software systems for integrating e-commerce with accounting, shipping, and inventory management;

and business analytics software to provide data and statistical analysis on the company's e-commerce

activity. These services can be valuable in identifying a niche market, reaching customers in that

market, and developing an efficient production and distribution system for serving customers.

3.Creating a Website is the Beginning, not the end of an E-commerce Strategy

Many businesses struggle with website optimization, i.e., getting the business to appear on the first

page of a search engine. Strategies for optimizing a website are different from those needed to create

81


an initial site and make it fully e-commerce capable, e.g., creating a shopping cart to handle

online transactions.

4.Be Prepared for Growth

The initiation of e-commerce may result in a significant increase in sales, and the business

must be prepared to meet this demand or the e-commerce "window of opportunity" may be lost. The

typical Internet customer expects quick and accurate responses to their online orders. The timely

delivery of goods and services consistent with the quality perceptions of customers is critical to

cultivating repeat customers, word-of-mouth advertising, and favourable online reviews. In addition, the

business can somewhat manage the pace of increasing product sales by limiting web-based

promotions to targeted geographic areas or specific customer profiles.

5.Integrate E-commerce into Overall Business Operations

E-Commerce is broadly defined as "using online resources and tools to do business better

� more efficiently and productively� (Montgomery, 2007). As such, e-commerce holds the promise and

challenge of affecting every aspect of a business' operation from product design and production to

distribution and service delivery. Businesses using or considering e-commerce should investigate

the potential roles for e-commerce in all aspects of the businesses' operations.

6.E-commerce is not for all Businesses

In our opinion, most small town businesses would benefit from having a website. Consumers

increasingly rely on the Internet for information, and a website is a relatively inexpensive way to

present information on a business' products, hours, location, phone number, and sales. E-Commerce

is, however, much more than maintaining an informational website, and the e-commerce related

components and services (e.g., shopping carts, fraud protection, SEO, EDI, analytics software)

may add more to the firm's costs than they contribute to profits. That is, e-commerce may not be a profit

maximizing business strategy for a firm if the cost of implementing e-commerce exceeds the

increase in net revenues or decrease in operating and marketing costs attributable to e-commerce.

Conclusion

In the final analysis, what is important to the firm is that e-commerce produces an acceptable return

on investment. It is good business practice to forecast and monitor the resources (time, money, and

other) devoted to implementing and conducting e-commerce and the benefits (increased sales and

reduced costs) attributed to e-commerce strategies. If a business forecasts insufficient long-term

return on investment, broadly defined to include financial and time commitments, then e-commerce as

currently used is not a good fit for the company. In this situation, the business may elect to revise the

scale and scope of its e-commerce program or it may decide to withdraw from e-commerce altogether.

In this study, we used E-commerce strategies for competitive advantage to Internet companies. By

understanding the impact of the Internet on business, e-business managers can adopt appropriate

strategies for meeting the unique challenges of e-business. This study provides e-business managers

82


with a framework to help them systematically analyze and develop successful strategies to address the

problems of doing business online.

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