PRATIBIMB The Reflection of Management

FINANCE | GENERAL MANAGEMENT | HUMAN RESOURCE | MARKETING | HEALTHCARE | OPERATIONS | SYSTEMS

Volume II, Issue XVIII March—April 2013 A Monthly e-Magazine

A Students’ Initiative

Visiting the Unique Selling Proposition Of Rural Women Entrepreneurs

Gayatrii Shanmugam , The Ohio State University

Is India Ready To See The Rising Sun?

Deepa Sastri, School of Petroleum Management

Panacea For Indian Economy -Poaching or No Poaching ?

S. Priya, Lal Bahadur Shastri Institute of Management

ROI Of Social Media Marketing

Aditya Vikram Bharadwaj, MDI

Shift From Corporate Ladder To Lattice

Vignesh Lakshminarayanan & Kailash Mahadevan V M , NITIE

Succession Planning

Prisoomit P Nayak , Welingkar Mumbai

Pratibimb | March-April 2013 | 2

T. A. Pai Management Institute (TAPMI) is a premier management institute situated in Manipal

and is well known for its academic rigor & faculty-student interaction. The Institute has been

recently ranked amongst top 1 per cent of B-schools in India & 4th in the South Zone by The

Week Magazine.

Founded by the visionary, Late Shri. T. A. Pai, TAPMI’s mission is to provide much needed

impetus to the task of building professional management capability in the country. In the

process, it has also played a role in strengthening the existing educational and health

infrastructure of Manipal.

TAPMI is committed to excellence in post graduate management education, research and

practice by nurturing and developing global wealth creators and leaders. We shall continually

benchmark ourselves against the best-in-class institutions. We shall foster continuous learning

and reflection, achievement-orientation, creative interdependence, and respect for diversity with

a holistic concern for ethics, environment and society.

T. A. Pai Management Institute

Manipal, Karnataka

About TAPMI

Our Mission

Pratibimb | March-April 2013 | 3

TAPMI’s e-Magazine - is the conglomeration of the various

specializations in MBA (Marketing, Finance, HR, Systems and

Operations). It is primarily intended to provide insights into the

plethora of knowledge that relate to the various departments of

Management and to give an opportunity to the students of TAPMI

and the best brains across country to exhibit their creative cells. The

magazine also strives to bring expert inputs from industries, thereby

bringing the academia and industry together.

Pratibimb the e-Magazine of TAPMI had its first issue in December

2010. The issue comprised of an interview of well known writer Ms.

Rashmi Bansal along with a series of articles by students and industry

experts like MadhuSudan Rao (AVP-Delivery, Mahindra Satyam) & Ed Cohen who is a global leader

and chief learning officer who led Booz Allen Hamilton & Satyam Computer Services to the first

rank globally for learning & development . It also included a hugely successful and engrossing game

for finance geeks called “Beat the Market” to bring out the application based knowledge of

students by providing them the platform where they were expected to predict the stock prices of

two selected stocks on a future date. The magazine is primarily intended for the development of all

around management knowledge by providing unbiased critical insights into the modern

developments.

TAPMI believes that learning is a continuous process and is not limited to the four walls of the

classroom. This viewpoint is further enhanced through Pratibimb wherein students manage and

contribute to create a refreshing learning environment outside the classrooms which eventually

leads to a holistic development process. The magazine provides a competitive platform and

opportunity to the students where they can compete with the best brains in the B-Schools of the

country. The magazine also provides a platform for prominent industry stalwarts to communicate

their views and learning about and from the recent developments from their respective fields of

business which in turn helps to create a collaborative learning base for its readers.

Pratibimb is committed in continuing this initiative by bringing in continuous improvement in the

magazine by including quality articles related to various management issues and eventually creating

a more engaging relationship with its readers by providing them a platform to showcase their

talent.

We invite all the best brains across country to be part of this initiative and help us take this to the

next level.

PRATIBIMB TAPMI’S MONTHLY e-MAGAZINE VOLUME 2, ISSUE XVIII MARCH, 2013

Pratibimb | March-April 2013 | 4

It is heartening to see a major surge in research activities in TAPMI in recent times. It manifests two

things: (i) there is an increasing inquisitiveness among the students and faculty to explore , seek and

strive and (ii) there is a sense of achievement through application of research techniques to that

inquisitiveness which ends up in contribution to the domain of management knowledge.

The recent events in research indicate that we are moving in the right direction in our augmenting the

management domain. The quality of the journals where the papers are published and the quality of

the conferences where the papers are presented go on to prove that TAPMI has, at last, arrived in

research space. It is now time to consolidate.

Best wishes,

Dr. R. C. Natarajan

Director’s

Message

Pratibimb | March-April 2013 | 5

Editor’s corner

Arun Stephen

Abhineet Rastogi

Bhavnita Nareshkumar

Devi Kailas

Kannan Venkat

Shubha Prabhu

Aditya Bhat

Lloyd George

Prof. Chowdari Prasad Dean (Branding and Promotions)

Prof. Aparna Bhat

Editor in Chief

Marketing & Advertising

Creative & Cover Design

Communications

Operations

Publishing

Faculty Advisors

Dear Readers,

Its summer! And what does summer mean for us B-school students? Internship, of course!!! As each of us gear up to have our first taste of corporate life, Pratibimb brings to you yet another edition filled with info and fun. Can't believe it? Why don't you turn a few pages and see for yourself?

Gayatrii Shanmugam of The Ohio State University discusses about rural women entrepreneurs in her article "Visiting the Unique Selling Proposition of Rural Women Entrepreneurs on this International Women’s Day!". I am sure that will strike a chord with many of you budding entrepreneurs out there, especially the ladies!

In "Is India Rady To See The Rising Sun?", Deepa Sastry School of Petroleum Management, talks about recognizing solar power as the Energy of Tomorrow and its impact. "Poaching or No Poaching" by S. Priya of LBSIM, New Delhi talks about the ethics of Poaching as a recruitment strategy in various companies today.

Aditya Vikram Bharadwaj of MDI, Gurgaon has a sure shot winner in "ROI Of Social Media Marketing", the current hot topic among marketers. Vignesh Lakshminarayanan & Kailash Mahadevan V M of NITIE, Mumbai has a very relevant article in HR on career advancement called "Shift From Corporate Ladder To Lattice". In addition, we have another entry from Prisoomit P Nayak of Welingkar Institute, Mumbai discussing the importance of Succession Planning.

As always, stay safe, celebrate life and keep reading Pratibimb.

Stay updated, like our page to hear more from us at

http://www.facebook.com/pratibimb.reflecting.management

We would like to thank all faculty members who have provided their valuable feedback to help maintain the standards we have strived to achieve. Also, send in your valuable suggestions or feedback to pratibimb@tapmi.edu.in

Enjoy Reading!

Arun Stephen

Pratibimb | March-April 2013 | 6

Contents Visiting the Unique Selling Proposition of Rural Women Entrepreneurs 7 by Gayatrii Shanmugam, The Ohio State University

Is India ready to see the rising sun? 9 by Deepa Sastri, School of Petroleum Management

Poaching or No Poaching ? 12 by S. Priya, Lal Bahadur Shastri Institute of Management

ROI Of Social Media Marketing 14 by Aditya Vikram Bharadwaj, MDI

Shift from corporate ladder to lattice 17 by Vignesh Lakshminarayanan & Kailash Mahadevan V M , NITIE

Succession planning 22 by Prisoomit P Nayak , Welingkar Mumbai

Future of Financial Research 25 by Nitin Singh, Symbiosis Pune

Pratibimb | March-April 2013 | 7

Visiting The Unique Selling Proposition

of The Rural Women Entrepreneurs Gayatrii Shanmugam , The Ohio State University

Around 1970’s the only place for entrepreneur spirit for Indian women was her kitchen.

She was a Chief Financial Officer who decided how much to spend for grocery, how much

for cleaning and washing. As a Chief Executive Officer she was responsible for the entire

operations of her kitchen. Things started changing gradually with women gaining more

respect. United Nations celebrated first International women’s day on 8 March 1975.

From 1997 they celebrated with a theme. The theme for 2012 was – Empower rural

women end poverty and Hunger.

A lot of people reading this may picture today’s women as someone whose work time

starts when sun shines in United States of America. But, unfortunately this situation is

still limited to the big cities and metros of India. There is still this big chunk of rural India

with patriarchal system. We are real winners only when there is women’s empowerment

even in rural India. To achieve this, there are few “super woman” who has already taken

baby steps. They got their feet wet using entrepreneurship. So, what was their unique

selling proposition?

For God fearing, it is Vaishno Devi in Jammu, for romantics it is Dal lake in Srinagar and

for adventurous it is Ladakh. Back in history, trekking hiking skiing was a boy’s thing. But

today marketers are selling hiking boots for women, that’s the trend. Women are always

welcomed as consumer. The rapport changes when it comes to enterprising. There is a

glass ceiling that still exists almost everywhere. So the club of successful women has

some special selling point. What is the unique selling proposition of the trekking

company in Ladakh?

Ladakh women’s travel company is the first travel company that is owned and operated

by women. It differs from other company not just in terms of its entrepreneur but also in

terms of its service. The trekkers are provided with female guides and porters. So, you

heard the “unique selling proposition” of this company. An entrepreneurial quest and

success of a woman in a traditionally men dominated area is laudable, but then if it is a

rural woman, then it is extremely commendable. Well, it is an admirable story of rural

women empowerment!

Thinlas Chorol is the woman behind this success story. She is native of a rural village

Takmachik. You need travel at least 65 km to reach the town in the district. This lady

crossed more than 500 kms and attended National Outdoor Leadership School (NOLS) at

Ranikhet, India. Of course, NOLS has strong international repute with one of their

campus in United States of America. She is not only the first woman to start a trekking

company, but also a first professionally trained female trekking guide in the year 2003.

Within 6 years, Chorol created this company. One of the most respectable

characteristic of this entrepreneurship is her vision of employing female guides and

porters. This action is an empowerment for all women in that village. Their approach of

Pratibimb | March-April 2013 | 8

homestays gives financial freedom for women in that area.

On a bigger picture, the method of entrepreneurship of this

rural woman has also marketed this village as a land of op-

portunities to the nearby places with variety of jobs like

porter, guide and host. A tremendous selling point for a

town in this dull economy!

With big conglomerates working on corporate social re-

sponsibility and Dow Jones tracking the sustainability index,

this rural entrepreneur is no less to her contemporaries.

Using eco-tourism label, they advertise habits that pose less

impact to environment. Be it using refillable water bottles

or discouraging the use of ponies that eat limited available

grass. Having come from humble rural background, Chorol

created a brand forherself and the company using her

unique selling proposition. A true rural woman empower-

ment that ends poverty and hunger!

If Chorol is the name in the regions close to the national

capital, then Chetna Gala Sinha is the name around the fi-

nancial capital of India. She is the founder of Mann Deshi

Mahila Shankari Bank in the rural Satara region of Maha-

rashtra. A baby born in the year 1997 grew up to receive a

cooperative license from Reserve Bank of India in the do-

main of rural financial company. With all these recognition,

don’t get fooled by assuming this as a regular microfinance

organization. They offered something more. They had their

own unique selling proposition-USP.

Chetna Gala Sinha had a different vision in terms of mi-

crofinance. She envisioned something that went beyond the

idea of lending. She embraced the idea that along with

monetary help they also need to be provided with neces-

sary infrastructure and training. As an answer, she created

Mann Deshi Foundation. Mann Deshi Foundation is an arm

that provides all non-financial services like financial and

entrepreneurial training. This approach makes sure that

loaned money is used in best possible way. The educational

training turns the project into sustainable one.

They were out of the box thinkers in terms of banking

and training purpose. One of the most commendable con-

cepts is “e-card”. It is nothing but a door step pigmy savings

scheme. An approach that brings the product or banking

“within arm’s reach” of the consumer! Their mobile busi-

ness school is laudable in training domain. It’s a bus that

travels to remotest village in Maharashtra and Karnataka to

teach the practical business skills. A concept of crossing all

the boundaries and delivering the product at the door step

of the customer!

Still you don’t see anything special? According to

Gutierrez, Feminist empowerment model defines women’s

empowerment as process of increasing personal, interper-

sonal and political power so that individuals can take ac-

tions to improve their life situation.In rural India with the

patriarchal system, violence against women is very com-

mon. It may be physical violence due to any reason includ-

ing alcoholism or the ridiculous sexual violence. Sinha’s

model not only gives financial freedom but also a validation

to fight violence. Well, that’s their USP!

The United Nations theme for International Women’s

day 2013 is “A promise is a promise: time for action to end

violence against women”. Chorol and Sinha used their

unique selling proposition for rural empowerment to end

poverty and hungry. They certainly fit the UN International

Women’s day 2012 theme. On an ending note, let’s be

hopeful that 2013 will be year of many social cause mar-

keting campaigns that fight violence against women. To

everyone out there, Happy Women’s day!

References

http://www.ladakhiwomenstravel.com/about.htm

http://www.manndeshi.org/smartcards.html

http://www.manndeshifoundation.org/

mobilebusinessschool.html

http://www.un.org/womenwatch/feature/iwd/

Pratibimb | March-April 2013 | 9

With India facing significant challenges of burgeoning energy deficit and lowering carbon

footprint, it is time that we reckon solar power as the Energy of Tomorrow. As India en-

deavors to achieve the targeted 15% energy from renewable sources by 2020, solar

power is expected to play a more prominent role with India’s solar potential pegged at

600 GW. Four years post the release of the National Action Plan on Climate Change

(NAPCC), this article discusses the progress made so far in the solar space and attempts

to juxtapose and analyze the solar power policies at the Centre and state level.

Among the potential states for solar development, Gujarat, Rajasthan, Karnataka, TN,

MP and AP have laid down clear mandates for solar investments and hence these states

have been chosen for evaluation. A blanket policy approach does not work because of

the underpinning differences in the macro environmental aspects of different states

(Table 1).

Table 1: Macro Environmental Analysis

(Source: Compiled by author from different sources)

Government of India (GoI) included solar energy as a key mission under the National

Action Plan on Climate Change and formally launched the Jawaharlal Nehru National

Solar Mission (JNNSM) in 2010. The project has been planned in three phases .

Is India Ready to See The Rising

Sun?

Deepa Sastri, School of Petroleum Management

Pratibimb | March-April 2013 | 10

Out of the 37 projects selected in batch I, 35 have achieved

financial closure and are expected to be on track for timely

installation. Only 143.5MW out of 1000 MW has been com-

missioned till November, 2011 and a lot more action is re-

quired on ground to meet the 2013 target of 1000 MW.

Indian states are making foray into the solar arena and poli-

cy frameworks are evolving over the stages of drafting, rede-

fining and finalizing. The table 2 provides a comparative

summary of the policy parameters in four out of the six

identified states.

While there are two main approaches for tariff determina-

tion – feed-in-tariff (FiT) / preferential tariff and reverse

competitive bidding (RCB), Gujarat, which spearheaded solar

power generation through its state policy, is the only state

to adopt FiT pricing mechanism. Gujarat State Electricity

Board (SEB) being in profits, promoted FiT in order to create

a market of stable returns for the investors. Analyzing the

sorry SEB financial situation of other states (Table 1), it is

well evident that a competitive price through RCB is the way

to go. The lowest RCB tariff under JNNSM fell from Rs.

12.16/kwh to Rs. 7.49/kwh, partly signaling the maturing

market and partly due to an oversupply of PV cells by Chi-

nese manufacturers.

An important clause in the solar policies is with respect to

Domestic Content Requirement (DCR).While this encourages

the domestic manufacturing industry, it restricts access to

the international sources for material procurement and fi-

nancial support through cheap foreign debt. In light of this

understanding, the national as well as state policies have

limited the DCR level (Table 1). Rajasthan, in a bid to pro-

mote the internal industry development, has well defined

DCR guidelines. To maintain a balanced procurement

source, MP solar policy defines a 30% DCR which is in line

with JNNSM.

Another major determinant for attracting Solar Power De-

velopers (SPDs) and increasing competition is the project

sizes. A minimum project size of 5 MW ensures developer

accountability and at the same time attracting various com-

panies. All the states do not differ in terms of minimum ca-

pacity. However, except for Gujarat, the other three states

have upper cap so as to restrict monopolizing tendencies.

However, a point to note is that the multi-developer model

of Charankha could be pulled off through just twenty one

developers due to this non-capping of the capacity.

The intangibles of government support and non-price incen-

tives go a long way in deciding the attractiveness of the poli-

cy. The vast wastelands and higher irradiance are proving to

be an asset for the states in solar development. While these

natural endowments facilitate solar development, it is the

political will that determines the utilization of these re-

sources. A case in point is MP allowing SPDs to set up facili-

ties above 10 MW beyond the geographical boundaries of

the state to tap the wasteland and irradiance benefits of

neighboring states like Gujarat and Rajasthan while making

it mandatory for the companies to sell it to MP SEB.

Pratibimb | March-April 2013 | 11

It is important for the governments to take note of the

mounting peak power deficits. Conflicts like the Telangana

issue of Andhra, over populist measures in TN and the coali-

tion conformity at national level pose a threat to the sus-

tainability of policies framed. Investor confidence in the

government and the financial capability of DISCOMS impact

the final investment decision in the region (Table 1).With

most DISCOMS of the potential states carrying a loss of over

100cr on their books, attracting investors is difficult. It is

here that encouraging policy benefits like tax exemptions

and concessions, single window clearance, banking and

wheeling clauses, power evacuation, water and other infra-

structural necessities strengthen the market attractiveness.

Figure 2 : Various RPO Levels in different States

The high potential new states coming into the scene have

been AP and TN. TN proposes to follow RCB. Andhra policy,

while betting on Renewable Energy Certificate (REC) market,

allows a project developer to either sell the power to the

DISCOMS at the average pooled purchase cost (APPC) or to

any customer. While AP exempts a developer from wheel-

ing, transmission and other charges, TN does not. TN is an

improvement over AP policy which contradicts CERC norms

by allowing both REC mechanism and concessionary bene-

fits. Both the states have no limitations for domestic con-

tent requirement.

The policy framing is just the beginning; the success of the

same depends on its execution and compliance. While solar

policies piggyback on the REC mechanism, the RPO compli-

ance norms have been achieved by only a few states like

Gujarat and Rajasthan (Figure 2). Hence how effective the

pro REC policy will be is yet to be seen. Also, the penalty

clauses defining liquidated damages and bank guarantees

need to be more stringent to oversee efficient and timely

implementation.

The policies of each state are aligned with their macro envi-

ronmental conditions, what is instrumental is how the

states deliver upon the promises that they have made in

their respective policies. The policy initiatives are indicative

of India’s cognizance to the growing role of renewable

source in its energy mix. It is time that the country disbands

its typical laxity and demonstrates discipline and vigor for

moving from ‘policy’ to ‘practice’ to see the Rising Sun.

References

Prime Minister's Council on Climate Change. (2008). Na-

tional Action Plan on Climate Change. India.

Tamil Nadu Regulatory Commission. (2012). Consultative

Paper on "Comprehensive Tariff Order for Solar Photovol-

taic and Solar Thermal Power Plants". Tamil Nadu, India.

Rajasthan DCR: Eligibility Criteria

Pratibimb | March-April 2013 | 12

This is an ethical dilemma companies are in when filling niche positions. It was towards the

nineteenth century that the employer-employee relationship shifted to a voluntary relation,

where the power is distributed.

It has been defined as ‘the intentional actions of recruiters in one company to identify, contact,

solicit and hire a currently employed individual or group of individuals away from another

company.’

Poaching is a wide practice, it accounts for 30 percent of the movement in labour. The sectors

like IT, technology, retail etc. are booming, NASSCOM and McKinsey predicts that the jobs

technology space will increase ten-fold from the current 60,000 professionals to over 6 lacs

people by 2015, and the recent increase in the number of start-ups is also fuelling hiring. Adding

to this, there lack of readily available talent in India.

Poaching should be accepted, and even encouraged, to make companies more competitive.

Moreover, any sort of Non-Solicitation agreement between organisations is unjustifiable under

the current socio-economic conditions. The Non-Compete agreement between the employer

and the employee is not legally enforceable. Organisations can’t bar an employee from

venturing out of the organisation. Employees are to be treated as free people and not as

subjects or assets that a company owns. There is no ethical issue involved with poaching; the

final employee always has the discretion to reject the offer. Poaching can, in a free market, help

organisations to put their assets to the best use.

As offshore outsourcing goes main stream in India, multinationals are hiring Indians to head

their teams in foreign markets. Notably, Accenture and Capgemini are increasing poaching

employees from their Indian rivals, like TCS, Wipro, and Infosys, to compete more effectively

against these companies.

When Jet airways restrained its pilots from joining Sahara, on the grounds that it had made

considerable investments in training them, the court ruled in favour of the pilots stating that

the skills and the knowledge acquired are a property of the pilots and they were free to take up

employment with Sahara.

In 2010, the U.S. department of Justice barred giants like Google, Apple, Intel Corporation and

others from entering into a non-solicitation agreement for employees. E bay has been sued for

entering into a non-solicitation of employees with Intuit.

The ever increasing competition amongst companies, high growth rate, especially in sectors like

IT technology & services, recent increase in the number of start-ups, rising concern due to

Talent Crunch are the main reasons for increase in Poaching as a recruitment strategy.

Multinationals are eying the right talent who can hit the ground from day one. Companies are

looking to stay ahead by differentiating on products, processes, technology and a host of other

things, hence require the right skill sets and knowledge. The high rate of growth in sectors like,

technology is creating more and more jobs. But the readily employable graduates in India are

Poaching or No Poaching ?

S. Priya, Lal Bahadur Shastri Institute of Management

Pratibimb | March-April 2013 | 13

less than 30%. This rising gap between the skills required

and that is available is creating the need for HRs to look for

talents in other organisations. Companies, for example

Oracle, Hewlett-Packard and Cisco, are diversifying into

other businesses; this is increasing competition in an

industry.

Poaching becomes unethical or illegal when the candidate,

for a job, is misled by a company about the job being offer.

Some practices associated with poaching cross the line

when the employee is hired to steal information or clients

related to the employer. Anti-poaching agreements are

relevant when two organisations are engaged in joint-

venture.

Employees are poached from ‘vulnerable’ companies. The

real issue lies in the employer-employee relationship; it is a

failure of the company to retain its employees. The reasons

could vary from the pay and benefits to the whole

employee proposition or because of their bosses.

The HRs should pick up signs displayed by employees at

work. The most frequent sign is change in habits related to

work, i.e., there is lack of engagement with projects or

colleagues, large number of absences, getting up-to-date

information on expense accounts.

Companies have been taking several measures to retain and

attract employees by benchmarking on their employment

brand against the competitors. Being competitive in pay

and benefits and in the whole employment proposition

could be the key. Long term incentive plans tied to the

success of the business as a whole and succession planning

could send a message to the employees that they are

significant role and are valuable to the success of the

business. Employees also leave because of their bosses, to

retain employees, the managers should be effective.

Knowledge sharing and trainings such as, Supervisory

training, Leadership training could instil useful management

skills.

NASSCOM has advised companies to not to resort to

Poaching, it has been working out strategies to deal with

situations where a whole of a team is wiped out or when

the intention is to sabotage the operations. NASSCOM has

recommended companies to follow a standardized exit and

on-boarding process and ask for relieving letters from the

new joinees.

There are three important stakeholders, Organisations,

Educational Institutions and NASSCOM. Steps need to be

taken collectively to reduce the gap between available

talent and required skills. Effective education and training in

institutions is the need of the hour. The stakeholders should

work out strategies to formulate the curriculum, specialised

courses, offer more practical exposure, guest lecturers from

veterans to the students.

References

www.osnews.com/story/26726.

www.edn.com.

www.frontlinerecruitmentgroup.com.

www.risesmart.com/blog.

www.vanderbilt.edu/magazines/vanderbilt-magazine/2010/04.

web.ebscohost.com.

Pratibimb | March-April 2013 | 14

ROI of Social Media Marketing Aditya Vikram Bharadwaj, MDI

Introduction

Social media marketing refers to the process of gaining website traffic or attention

through social media sites. It is largely driven by the consumer acting as a voice of the

brand on a social network platform.

Social media marketing programs usually focuses on “content marketing”, i.e. it creates

content that attracts attention and encourages readers to share it with their social net-

works. The content quickly spreads from user to user as it appears to come from a trust-

ed, third-party source, as opposed to the brand or company itself. Hence, this form of

marketing is driven by referral or word-of-mouth, meaning it results in earned media

rather than paid media and can go viral.

Social media is the latest trend in the marketing domain. It has become a platform that is

easily accessible to anyone with internet access. Increased communication for organiza-

tions fosters brand awareness and often, improved customer service. Additionally, social

media serves as a relatively inexpensive platform for organizations to implement mar-

keting campaigns.

What is the ROI of Social media mar-

keting campaign?

ROI stands for Return on Investment. In

the financial world, ROI is used

to measure the financial efficiency of an

investment. Thus, social media ROI is

defined as a measure of the efficiency of

a social media marketing campaign.

ROI is based on the financial formula:

So, for Social Media (SM):

Here, we know our Social Media Investment, but Social Media Return is not as clearly

defined. However, the peculiar feature of the social media return is that it can be de-

fined to be essentially anything you want it to be. Thus, in general, we can say that social

media return is the value that is derived from social media based on the goals of the

campaign. These goals may be to increase brand awareness, to increase sales, to get

consumer insights, or to get email addresses of potential customers.

Pratibimb | March-April 2013 | 15

After estimating SM Return and SM Investment, ROI formu-

la is used to calculate your SM ROI. Now, this ROI number

can be used to compare to other social media campaigns.

Methodology to evaluate ROI for a Social Media Campaign

1. What is goal?

We need to know what is it we are trying to achieve, i.e.

our goal. Let’s say our goal is to capture the email address-

es into databases, so that we can nurture those leads and

turn them into clients. Now, we set a target of collecting

100 email addresses within one month period. The time

frame is necessary so that at the end of the time frame we

can measure the success of our efforts. To get these ad-

dresses, we need to give the people a highly relevant offer,

which is related to our industry. Then, we measure goal

conversion in Google analytics, which tells us how many

people sign up for the offer and end up on the confirmation

page. Thus, now we can measure cost per sale/cost per

lead

2. Traffic Vs Conversations

Conversion - How many people we need to get to visit our

website in order to collect these 100 email addresses?

If we aim for a 20% conversion rate, that means that to

collect these 100 email addresses, we need to get 500 peo-

ple to visit our website. If we are not able to achieve the

required conversion rate, it directly points to some defi-

ciencies in our offer. Either the offer is not relevant, or its

perceived value by the users is not high enough. Landing

pages can also be one of the reasons for poor conversion

rate, so they should be as per the best practices, and must

have relevant keywords. As the users sign up, and their

email addresses get stored in the database, an email auto

responder sends mail to them to nurture these leads and

turn them into clients

Traffic Sources

Face book, Twitter etc are the sources of potential traffic

that visits our website, from where we will get the 100

email addresses. We can measure traffic sources in Google

Analytics to identify which source generates maximum

traffic, which will help us in formulating our strategy later

on. Catchy headlines on Twitter, like tab on Face book etc

are a few of the ways to maximise traffic

3. Time/Cost required to implement

Next we have to determine the cost and time required

to implement this process, and find out the ROI of this

Social Media Campaign

The below flow chart shows how the traffic is filtered until

finally sales takes place.

This was the case when our goal was to capture the email

addresses into databases, so that we can nurture those

leads and turn them into clients. We can similarly calculate

the Social Media ROI in case of some other goals.

Pratibimb | March-April 2013 | 16

Model/Theory applicable/associated with the evaluation

of social media campaigns’ ROI

Kirkpatrick's Four-Level Evaluation

Level 1: Reaction (or satisfaction)

Users participate in some form of a questionnaire to rate

satisfaction of features or content (e.g., Least Favourable

to Most Favourable; Low to High; "A, B, C, D, F", etc.).

Few examples of this are rating a YouTube video, clicking

a star on a blog comment or rating a "Best Answer" on

LinkedIn.

Level 2: Learning (or knowledge retention)

Next step is measuring changes in the quantity/quality of

relationships that the network generates as a result of

implementing a social network.

These changes can be in:

Subscriber counts

Unique visitors

Returning visitors

Page views

Bounce rates

Quantity of content

Quality and popularity of

content, and so on.

Level 3: Transfer (to the real world)

To get to this point of evalua-

tion, the organization should

have clearly defined objec-

tives for developing a social

network. Also, there is a need

to observe the effect of social

network on the ultimately ben-

eficiaries.

Level 4: Results

These assessments determine the extent of impact these

social media campaigns have on the bottom line. Metrics

like this may include financial measures like:

Profitability

Increased sales

Return on Investment (ROI).

But the scope can be scaled down to include department-

level productivity measures like:

improved customer satisfaction

reduced customer complaints

Level 4 assessments usually deal with undefined bounda-

ries, and therefore are difficult to work with. That’s be-

cause increase in sales might be attributed to factors oth-

er than Social Media Campaigns.

Parameters/Metrics to be considered for calculating the

ROI

There are many metrics to consider, but here are four

that can be applied to companies of any size or industry:

Demographics

Social demographic analysis shows which initiatives are

reaching target audience. It assists in locating new

customers

Page views

It is easy to calculate and gives a measure of content

popularity

Conversion

Landing page conversion and Sales conversion tell about

the effectiveness of the program

Cost

Measuring cost per lead/sales gives a measure of the

expense we are incurring

These parameters are crucial, and must be considered for

the calculation of ROI. Demographic analysis helps in in-

fluencing future marketing, as we get to know who exact-

ly is responding to social media efforts. Page views on

different social media are not equally valuable, and this

helps in choosing which media to focus on. Again, measur-

ing conversion rate is extremely important, as it directly

correlates to revenue. However, behavioural study of pro-

spective customers is required to attribute the change in

revenue to social media campaigns. Finally, cost per lead/

sales measurement helps determine how to allocate

funds for the campaign, and success/profitability.

Conclusion

There are different things that need to be kept in mind

while trying to evaluate social media ROI. It is difficult to

realize that which of the advertisement followers actually

bought the products or hired services. So, different factors

have to be kept in consideration before ROI of the social

media campaign is calculated.

However, this is a fact that social media is very necessary

for running an online business today. Social media is no

doubt, a best way to advertise about your products, ser-

vices and brand name. To make progress in online indus-

try, taking services of social media networks is a must.

References

http://www.businesscasualblog.com/2008/12/

applying-kirkpatricks-four-level-evaluation-to-

social-network-roi.html

http://www.youtube.com/watch?

v=UChhA3QGX5U

www.socialmediaexaminer.com

Pratibimb | March-April 2013 | 17

Introduction

Each one of us wants career advancement in life. As a person’s influence and ability grows in the

organization, he/she wants to take up greater responsibilities. In organizations, there’s a well defined

hierarchy for career advancement. There are various stages in a hierarchy for which a person is

required to acquire certain skills and competencies. This hierarchy which is prevalent in many

organizations is called “The Corporate Ladder”. “Corporate Ladder “has been the prevailing model

since the 1950’s. Right from when the idea of the “Organization Man” was conceived, the ladder has

been the paradigm to structure an enterprise and successfully manage its work and people.

Though there have been certain changes on path to progression in the ladder, however the essence

of the ladder has endured the test of time. Now workplaces have changed. Organizations and the

environments have changed drastically. The burning question is whether the proverbial “Rise along

the Corporate Ladder” is still relevant in today’s business environment. Business environments and

organizations have become very diverse and complex. The technological, geographical and economic

barriers have been blurred. Gender barriers are coming down and the “Glass-Ceiling” has been giving

way. The generations are changing. With the Generation Y entering the workforce and baby boomers

on the verge of retirement, the aspirations and thought process of the workforce is changing. The

very meaning of career advancement and fulfillment has undergone a profound change with the

changing attitudes and perceptions about the workplace.

Have the existing structures outlived their era? Is there a radical shift of thinking towards a new

paradigm?

This is where the transition from a “Corporate Ladder Model” to the new “Corporate Lattice” model

assumes great significance. As organizational hierarchies are becoming leaner and agile, the Lattice

model is fast displacing the Ladder model. This is the inflexion point for many organizations and

sooner rather than later they have to shift to the Lattice model.

The Corporate Ladder Model

The “Corporate Ladder” can be viewed as the ascent from the base of the ladder (i.e. the entry level)

to the top of the ladder (CEO) punctuated by different strata which represent the various levels in

Why the shift?

Organizations and environments have changed drastically Technological, economic, gender barriers broken Workforce’ s thought process changing Career advancement and fulfillment has seen a profound change

Shift from Corporate Ladder to

Lattice

Vignesh Lakshminarayanan & Kailash Mahadevan V M , NITIE

Pratibimb | March-April 2013 | 18

the ladder which a person has to cross before reaching the

pinnacle.

A Typical Ladder Structure

As a person grows and becomes proficient he naturally

moves up the ladder. Initially moving up the ladder was

conceived for a person in a single organization but later on

as shifting between organizations for progression became

the trend; the definition of Corporate Ladder became more

generic. It evolved into the various stages of succession in

one’s career relative to a well defined position in the ladder

encompassing organizations.

The model was the driver for maximizing efficiencies and

economies of scale in the Industrial era. The basic

assumption of the model is that all individuals are alike and

the direction of progression of an employee is linear.

Success is defined by the level of prestige, rewards, and

power tied to each rung. High performance and career-life

fit are viewed as opposing forces. Work-life balance and

level of progression is a trade-off in this model. There is a

strict hierarchical reporting relationships and the access to

information is directly linked to the layer in the hierarchy

which the person is occupying. The “Corporate Ladder”

model epitomizes the “One size fits all approach” which is

out of sync with today’s organizational environment.

Flaws of the Corporate Ladder Model

Though the Ladder model is a highly structured approach to

career advancement it has severe limitations.

1. Today’s workplace is multicultural. There’s a huge

diversity in the workplace. The culture of all workplaces has

become all inclusive. Women are becoming critical in

organizations and the traditional roles are being challenged

in the society.

2. Employees can no longer be constrained and with

increasing freedom of interaction and knowledge sharing

and with the advent of virtualization of workplaces no

longer are employees tethered to their seat. Mobility has

become the buzz word in organizations. No longer can

employees be tied down.

3. The methods of working can no longer be defined and

flexible work practices have redefined the workplace.

Motivation is no longer monetary or linked influence and

power. Career-Life balance is no longer a trade off. Hence

an integrated approach towards one’s career, success-both

professional and personal and a seamless balance between

work and life is of paramount importance today. The

ossified standalone approach towards work and life where

one aspect has to be sacrificed for the other no longer

works. There’s fluidity in terms of how work is done, careers

are built and how each one participates and contributes in

the organization.

What's Driving this Trend?

4. “Information Arbitrage” no longer works. Work places

have become more open and the flow of information is

seamless across the organization.

5. There has been a paradigm shift in the attitudes towards

the workplace. Nowadays extrinsic motivators like

the salary and position have been replaced by intrinsic

motivators like meaningfulness of job and

accomplishment and greater say in decision making.

With a large proportion of Generation Y entering into the

organizational mix, traditional structures are being

challenged.

6. With “Talent Retention” becoming a major issue due to a

huge gap in the availability of skilled talent in the market,

constraining the employees under the existing structures

where they cannot express themselves and be creative will

become dysfunctional.

7. Organizational hierarchies have become flatter and with

an almost 25% reduction

8. With increasing size of organizations and evolution of

matrix and super-matrix forms of organizations, the

Pratibimb | March-April 2013 | 19

traditional top down hierarchy is out of the equation. There

are multiple reporting relationships. The very basis of the

various levels and the various criteria to ascend to these

levels is questionable.

9. The proficiencies or skill sets at any position are not

static but dynamic. In other words with evolution of

businesses there’s a huge overlap of skill sets required at

various levels. With increased impetus in cross functional

exposure which entails moving across divisions, domains,

positions and specializations the ladder model loses

significance. The very idea of skill sets has been redefined.

There is virtually no ladder for the amount of skills a person

wants to acquire or what kind of progress he wants to

acquire. In other words “The bottom to top approach” has

been toppled and progression is infinite. It can be

horizontal, vertical or diagonal which cuts across different

functions.

10. Each employee is “unique” and not “alike”. Hence

the fundamental assumption of the Ladder Model is flawed.

The shift to the “Lattice Model”

One can visualize a lattice as a three dimensional structure

which extends infinitely in any direction. “The Corporate

Lattice model” is a comprehensive integrated approach to

the every changing corporate scenario. At a time when the

structures and divisions with respect to an organizational

set up are blurring, the lattice model is set to displace the

ladder model. No longer are career and life separate realms

and a holistic approach needs to be adopted in an

organization. Career paths have become multidirectional as

individuals look at multiplying their chances to grow ahead.

A lattice can be viewed as a grid with different nodes and

employees can connect different nodes at any point of

time. This represents the unconstrained organizational

relationships, interaction, and communication and

information flow. There is a shift to a participative culture

and a profound transformation in the mindset.

Employees now need to feel the need of engagement to the

organization. At a juncture where one spends more time at

the workplace than the house, the workplace must create

an experience which should motivate the person to come

again the next day and perform with the same amount of

vitality and commitment. The silo approach no longer works

and widespread collaboration is enabling individuals to

constantly learn, contribute and innovate. There’s a greater

transparency and the very notion of an optimized Career-

Life fit and high performance is mutually reinforcing. There

is greater emphasis on the need to be flexible and develop

transferable skills. There is a much sharper focus on

creating a portfolio of skills that can be ported over into

new fields as they emerge. Suddenly there seems to be a

convergence of all these aspects of a workplace which have

necessitated the shift to the lattice. The very realization that

there cannot be one set certain future path reinforces the

lattice approach. Hence individuals should gain further

competencies and with his existing capabilities must take

alternative views of their career. For instance if an

individual has to go to a lower level to cultivate some

unfulfilled competency, the lattice model helps him to make

that shift. Taking a step down so as to climb up two steps is

not at all bad. In the traditional ladder set up this would

have been a stigma. Therefore the change to the lattice

needs a significant change in the mentality of organizations.

Again no two individuals are the same and hence allowing

individuals to make optimal choices of what suits them the

best has lead to the origin of “Mass Career Customization”

model.

Mass career customization (MCC) – The fundamental tenet

of the Lattice Approach

To get an insight into this model, we can correlate

customization to the products we buy. Depending on our

tastes and preferences and more essentially the priority we

assign to certain quality we customize our products. Based

on our idea, the maker customizes the features of the

product. A similar paradigm can be extended to one’s

career.

In a product customization, the amount of variation differs

from miniscule details to major features. When for a

product there’s such a plethora of options to choose from

then why can’t the same be extended to careers? This is the

raison d'être behind the Mass Career Customization

Pratibimb | March-April 2013 | 20

framework. This framework is the new way employees can

be provided with definitive options. This is a fool proof

option where employees can weigh their options like the

way one weighs different features while buying a product.

There are generally four dimensions which are the pace of

growth, the amount of workload an employee wants to

handle, the location he wants and the role and

responsibilities he wants to undertake. By laying down the

options on the basis of the weighted choice of the career

wants, an employee’s career path is much more defined.

There’s a lot of clarity and freedom of choice on the basis of

what an employee wants and accordingly can make

tradeoffs between the various dimensions. Hence

customization is a compelling proposition as it gives

individuals “the option value” i.e. the value which

individuals place on the ability to make choices at any point

of time. This is an integrated approach which takes into

consideration the undulations of a career while factoring in

the fluidity of roles and needs while ensuring greater

transparency.

The advantages of this model are motivated and productive

employees who are committed to the organization’s cause.

At the same time “Talent Retention” becomes a much

easier task. MCC requires a massive effort on the part of

managers to know their employees, engage in meaningful

conversations and come up with options that work for the

business and the employee. MCC must be viewed as an

integral part of the talent management architecture. It must

not be isolated from other career management activities

like goal setting, performance management, compensation

and benefits, succession planning, workforce planning,

scheduling and deployment and training & development.

Lattice at Work- How Organizations are harnessing the

benefits

A very relevant example of lattice in action is exemplified by

how Cisco resurrected its fortunes from the aftermath of

the dot com bubble. The organization had come crumbling

down from being one of the most valued companies and

this is when the organization started embracing the lattice

approach. Cisco then realized the value of the collaboration

both internally and externally. Engagement became the

central objective around which everything else was

structured. To make sure that the employee’s objectives

were aligned to the goals of the organization, employees

had the mission, vision and the objectives printed on to

their cards. Cisco transformed its structures to enable cross

functional coordination by instituting cross functional

councils thereby promoting collaboration and participation.

Apart from this the organization has heavily invested on the

development of its employees and helped employees

choose realistic fulfilling career paths. At the same time it is

offering flexible work options and other wellness programs.

Apart from this the organization has virtualized the

workplace with social networking tools. For instance

communication has been virtualized by video conferencing.

Other examples are promotion internal wikis and podcasts,

tutorials on how to share blog and usage of a Facebook like

internal platform to communicate with partners and

customers. All these efforts have ultimately unleashed a

wave of productivity in the organization. Cisco for long has

been the best place to work and people stay and make

careers in this great organization.

Conclusion

Though there is a noticeable shift towards the corporate

lattice model, one cannot underestimate the importance of

the ladder model. The concept of “Lattice” has taken root in

service based organizations where roles are fluid. However

in organizations, where there are significant differences in

skill requirements for successive levels, the extent of

deployment of the lattice philosophy is still unknown or the

idea might not be feasible. Ladder model also helps in

identification and differentiation of a very good person from

an average person. At a time where ROI on employee is

significant, Ladder model does provide a clear direction on

“Talent Retention”. The Ladder model is by far the most

efficient and relevant model for grooming talent for taking

up leadership positions in any organization. The Ladder

model has too undergone a metamorphosis to a “Round

Ladder Model”, where reciprocal mentoring relationships

have broken down the “Tunnel Vision”. Organizations are

however adopting an optimized mix of both the Ladder and

Lattice approaches. Hence, on the evidence of this, one can

conclude that despite the promise and potential of the

lattice model, it is still very early to conclude that it will

supersede the existing Ladder Model.

Pratibimb | March-April 2013 | 21

References:

http://www.deloitte.com/view/en_US/us/Services/consulting/all-offerings/hot-topics/human-capital-trends-

2011/1644e312bc44f210VgnVCM2000001b56f00aRCRD.htm

http://www.forbes.com/2011/03/16/corporate-lattice-ladder-leadership-managing-hierarchy_2.html

http://businessfinancemag.com/article/shift-corporate-ladder-lattice-0422

http://blogs.hbr.org/ideacast/2010/07/when-the-corporate-ladder-beco.html

http://www.thecorporatelattice.com

http://www.masscareercustomization.com

http://www.leadersmag.com/issues/2011.3_Jul/PDFs/LEADERS-Cathleen-Benko-Deloitte.pdf

http://lifeworkalliance.com/pdfs/moving_towards_a_new_career_paradigm.pdf

http://talentmgt.com/articles/view/the_corporate_lattice_/print:1

http://blog.upmo.com/2011/03/02/the-corporate-ladder-is-collapsing/

The Corporate Lattice :Achieving high performance in the changing world of work by Cathleen Blenko and Molly Anderson –

Harvard Business Press

http://www.learningwiki.com/files/717/MASIE%20Mass%20Career%20Customization%20-%20A%20New%20Talent%

20Model.pdf

http://www.emeraldinsight.com/journals.htm?articleid=1626434&show=html

https://www.whymetlife.com/downloads/MetLife_MMI_MultiGenCaseStudies.pdf

Pratibimb | March-April 2013 | 22

“We really should be running succession management as if we are producing a product

because, at the end of the day, we are producing a product that needs to come off the end

of a production line and be delivered to someone at a certain period of time”

Marc Effron, President, The Talent Strategy Group

Introduction:

Succession Planning has emerged as one of the most important Strategic Business Process

in all types of organizations. The events of succession at Apple Inc. (consequent to the

death of the charismatic Steve Jobs) and the baton changing at in some Indian MNC’s (Tata,

L&T) have spilt into the mainstream media - resulting in higher levels of awareness.

Moreover, the critical concern that many family businesses face today is how to institution-

alize succession planning while taking care that the business will safeguard the future re-

quirements and needs of the owner and his/her family.

If an owner does not efficiently plan the proper transition in his/her lifetime then it can re-

sult in huge monetary losses and even loss of the business on the whole. Family Firm Insti-

tute estimates that “70% will not survive into the second generation, and 90% will not make

it to the third generation”.

India’s Tryst with Succession Planning:

In India till very recently, Succession Planning was not given due importance because of the

following sociological mind sets

Many senior management executives and at times the Entrepreneur too feel that

they are ‘indispensable & immortal”.

There is a fear that if a potential successor is identified, the current role holder could

feel ‘insecure - intellectually threatened’, etc.

Succession, be it at the family level, community, politics - have been messier than

seamless.

But, slowly Succession Planning is gaining traction because of the following possible

reasons:

Risk Mitigation: Succession Planning is one of the key components of an organiza-

tion’s risk mitigation approach, from Business Continuity point of view. Hence, inves-

tors and other stakeholders are putting pressure on the Boards of large listed compa-

nies to embed the process of Succession Planning.

Succession Planning

Prisoomit P Nayak , Welingkar Mumbai

Pratibimb | March-April 2013 | 23

Increased Attrition: Explosion in opportunities for

talented employees in India has led to acceleration in

attrition, revealing unplanned ‘holes’ on the organiza-

tion chart. Hence, due to this new reality of top tal-

ent quitting, and the increasingly difficult challenge of

obtaining an external replacement, succession Plan-

ning has come into focus.

Institutionalize Talent Management Process: In to-

day’s world, the ‘excellence in the knowledge compo-

nent’ of all roles is going to drive the success of busi-

ness. Therefore, the continued success of the organi-

zation is very closely related to, not only having tal-

ented and competent employees in key roles but also

having processes of continuous identification, assess-

ment of internal/external talent. This discipline alone

can feed the population of the talent pipeline with

potential successors.

Challenges in Succession Management:

Defining Future Roles

One major challenge for organizations is to define

critical present and future roles, particularly as busi-

ness model changes in response to the market forces.

The key is to be able to recast talent assessment of

the potential successors. Tools like the 9-box model

help determine leaders’ readiness to advance in the

talent pipeline.

Need for Speed Versus Accuracy

Succession planning must be much more dynamic,

much more real-time so that a company’s portfolio of

people should be updated at least quarterly, rather

than annually. When it comes to what the future

holds, it’s critical for HR and others making talent

decisions to be tightly aligned with strategy teams

not to understand it in depth, but to understand the

contours what the likely shifts in business will be.

Danger: Unconscious Bias Ahead

Bias is an inclination to present or hold a partial per-

spective at the expense of possibly equally valid alter

natives. Unconscious bias can cloud hiring decisions,

talent reviews, and high potential selection, as well as

the overall process of “marching people through the

pipeline and developing talent.

Industry disruption and the need to predict an uncer-

tain future

Challenges unique to managing global talent pools

Pre-requisites for successful planning for the future

Moving beyond the status quo

Creating viable and agile systems, policies and prac-

tices

Increasing Diversity

A key way to increase diversity in the pipeline is to

reduce bias. One way to mitigate such bias is by

providing targeted intervention to talent manage-

ment decision makers. For example, BAE partnered

with corporate consulting firm Cook Ross Inc. to fig

ure out a more structured and systematic way to root

out bias in its talent processes. The company used to

select participants for its emerging leaders program

through manager nomination, but the program was

viewed as “subjective and inconsistent” and the com

pany realized that “a lot of bias was getting in the

way”. During calibration discussions, the company

worked to ensure that it was assessing potential “and

not preference through our own lenses,” and

achieved a diverse representation of participants

while ensuring high potential for leadership. The re

sult was that the company’s diversity and inclusion

strategy and training now includes unconscious bias

training—an enterprise-wide training requirement

for all leaders by 2013.

Rethinking Global Strategies

With increased globalization, it is key to “start with a

global hat and to keep the global hat on”. When it

comes to getting the right people, the right plan and

the right fit for global talent:

Make sure there’s global and functional representa-

tion of critical stakeholders in decision-making.

Plan the timeline accurately, setting clear expecta-

tions and allowing extra time for global complexities.

Maintain a learning mind-set and be flexible. For ex-

ample, one may learn something from colleagues and

vendors that can enhance the final solution.

Be clear about selection criteria—both what’s essen-

tial and what’s desired. Assign weights and use rigor

around psychometrics and essential cultural fit fac-

tors, including non-quantitative ones.

Pratibimb | March-April 2013 | 24

Probing Individual Aspirations

Global talent shouldn’t be treated as static “lists and

big pools”. During talent reviews, assess employee

aspirations to create more transparency around

what the person wants rather than the manager

assuming what someone wants.

In 2012, PepsiCo implemented “candid career conversa-

tions,” in which employees fill out online profiles about

their aspirations, experiences and critical experience

they think they need to have to advance in the compa-

ny. The manager then offers his or her perspective.

Examples:

McDonalds, in the recent past had lost two Top Manage-

ment Employees, one after the other, in the same role- due

to their sudden passing away- and yet it was able to name a

third competent person to fill the shoes of the same role.

GE is legendary in their record of generating successors-

across the management roles and functions. When the cur-

rent CEO, Jeffrey Immelt was elevated to the position, two

other candidates were also in the running. Once Jeffrey was

named, two large global companies immediately offered

the top job to the other two GE potential CEO candidates.

The Murugappa Group is a family business spanning across

4 generations. Their leadership includes each of the seven

flagship companies to be headed by a family member with

informal interaction and consultation among themselves. In

the late 1990’s, the group in order to shed the traditional

family business approach, went for a mass professionalism

and though there were short term troubles, it had many

long term benefits in terms of turnover and profits. Now

the group CEO is a non-family member and 5 out of 9 board

members are outside family professionals.

Conclusion:

Hence, the only way forward for Indian organizations to get

better at this process, quickly, is by embedding Succession

Planning in the KPI’s of all Senior Management role holders.

The brief communicated to them should be that they have

to make themselves ‘redundant, in their current role, at the

end of a tentatively indicated fixed period of time by gener-

ating a competent successor (internal and/or external). The

current Role holder should be considered for their next role

- lateral or vertical- only if they deliver on this KPI. Succes-

sion Planning is too important a process to be internally

‘outsourced’ to the CEO & Top Management, HR or external

Consultants.

References

Babcock, Pamela. (Oct 2012) Babcock “Rethinking Succes-

sion Planning”, SHRM.

P, Vijayan. (Sep 2012) “Succession Planning”, aWEshkar,

Vol. XIV, No. 2

www.empoweredindia.com/Archives_ET/ET201202.html

http://en.wikipedia.org/wiki/Bias

http://www.murugappa.com/

http://www.ge.com/

http://www.baesystems.com/

http://www.pepsico.com/

Pratibimb | March-April 2013 | 25

Whenever I pore over the national dailies, there is a buzz in media about Human

Development Index (HDI). In the various components of HDI, one is Tele Density. Tele Density

depends proportionately (ad valorem) on usage of mobile connections per capita. Now the

stark reality portrays that Tele Density is higher in urban India. But in rural India it is tad.

Future of Financial Research

Nitin Singh, Symbiosis , Pune

Pratibimb | March-April 2013 | 26

As the time is ticking, there is a sea change in the

technology advancements. Especially, clamour for cheap

technological advancements are gaining momentum. Social

Inclusion is the major force responsible for driving this

propensity. However, competition also played a huge role

into this transformation. Increased cost effectiveness and

market capitalization are factors behind these changes.

Advancements made

In this era of ultra high speed technology umpteen smart

phones at throwaway prices are available in the market.

With the increase in demand for blogs, internet and social

media, there is a colossal rise in their usage. Various kinds

of paradigms such as fashion, marketing, advertisement and

fashion are leveraging this rising appetite to the hilt.

With the rise in tech savvy people, a remarkable rise in

trade and financial activities is ostensible. Moreover, small

retail investors who don’t have much advanced gizmos are

now not feeling alienated. Paucity of high end technology

for financial domain usage is not ill afforded now. Blogs are

new fad now for various facets of society, be it finance,

fashion, spiritual, social or political.

Internet is now buzzword everywhere. It has become

ubiquitous. And the great news is that it is beneficial to us

in manifold ways. The moot point is that this progress is

now making inroads in financial sector.

Financial sector and technological advancement are

entwined

With rise in competition and globalisation, there was

imminent overhaul needed in financial sector. To catapult

the efficiency of stock exchanges and trading, it was felt

that financial research must also pace in accordance with

technology. Therefore a streak of reforms were introduced

by experts.

With the talisman of social and financial inclusion gaining

traction, there is a huge section of small investors from

small towns, who were not capable of coping with

intermittent and mercurial financial activities, are now

Pratibimb | March-April 2013 | 27

making use of cheap technology for their progress. This is

providing a level playing field for small investors.

Now small investors or common Diaspora can extract useful

and indispensable knowledge required for financial re-

search. The Rajiv Gandhi Equity Scheme is a welcome step

in this direction. It is intended by government to promote

small retail investors. Various set of concessions are be-

stowed upon investors in this scheme. Our government is

trying to target small investors from tier-II cities, where fi-

nancial activities are not active as they should be. Hence in

such a case to alchemize this scheme usage of now going

cheap and advanced technology is adopted.

If such kind of boost in terms of technology and financial

accessibility is given to people in remote terrains, then cov-

eted goal of wholesome and inclusive progress can be

achieved. Participation from rural and far-flung areas will

improve. The penetration of technology in these areas helps

in alleviating poverty and amelioration of infrastructure.

Impact on financial sector

We will see salubrious impact on our economy if aforemen-

tioned measures are adopted. Particularly, financial sector

would rise by leaps and bounds. Phenomenal rise in finan-

cial activities will result in greater profit margin in financial

paradigm. This would in turn buoy investor sentiments in

growing sectors such as infrastructure projects in rural ter-

rains. Now this causes inflow of FIIs in market. Now in that

case we have more money in the market therefore ECBs can

be raised easily. This is how the whole financial market

transforms from dud to rejuvenated, streamlined and

strengthened market.

Impact on economy, which is in soup

High fiscal deficit

During fiscal year 2011 a whopping 200% rise in subsidies

given by government. That means our expenditure outstrips

income receipts. But if investments in the form of FIIs,

FDI, ECB, FCCBs start flowing into the market, there seems

the silver lining. This will harness our government to rein

in burgeoning fiscal deficit to comfortable zone. High fiscal

deficit is a major stumbling block which is continuously

haunting our economy. It causes catastrophic impacts on

economy. For example, high fiscal deficit gives rise to disar-

rayed Current Account deficit (CAD). CAD is the major com-

ponent in Balance of Payments (BoP). Dastardly, BoP gets

affected.

High Interest rates and uncomfortable key policy

rates

High interest rates suppress the money in market which

causes people to move from investment to savings. This

hampers investment in the market. For example, due to

high interest rates demand of automobiles in the market is

slumping. The manufacturing process in domestic market

slows down and it causes growth of core sector to take a

hit. Manufacturing has 79% weight-age in Index of Industrial

production (IIP). Thus, IIP becomes sluggish. However, be-

cause of cheap advanced technology easily available to in-

vestors in tier II and tier III cities, there is a landscape which

portrays a rosy picture of overhauling and revamping whole

economy at a huge scale. This potential germinates much

needed investments in various forms and improves infra-

structure projects which are almost dead now. At last, we

will see reduction in repo rate and Cash Reserve Ratio

(CRR), which are vital for the industrial growth of a nation.

Recently, we have also seen eyebrows rising when a prover-

bial debate in media was fuelled by honchos of major banks

in our country.

Pratibimb | March-April 2013 | 28

banks in our country.

Yawning demand for gold

Lack of attractive and salutary financial instruments In the

market impede money in the market. Instead people are

lured by the glitter of yellow metal. Unfortunately behind

the shine of precious yellow metal there lies accumulation

and blockage of capital. People vehemently invest into buy-

ing gold as it is giving fairer return. Secondly, our skyrock-

eting import bill which is growing exponential due to import

duty paid on import of gold. Thirdly, it is causing imbalance

in our trade balance. Keeping in view of these intricacies the

viable solution would be to formulate attractive and benefi-

cial financial instruments. In order to increase the reach of

financial products, use of booming technology can be lever-

aged. This would increase participation and stakes of small

investors with big investors too. Further, if this model is

adopted, then there would be overt outcomes. Diversion of

investors to other financial instruments will reduce astro-

nomical demand of gold.

Depreciation of Rupee

The drop in rupee against dollar is 20% since early 2011.

Panacea for us in these circumstances would be to access

overseas funds. Second, introduce FDI in the market. How-

ever, for both of the solutions raising investor sentiments is

the most important. Here too our reforms in technology

which translate into financial penetration, can rev up the

whole financial structure.

Stubborn Inflation

On account of demand-supply mismatches in the market,

there is inflation. Nut die to the lack of investment in the

market, we see inflation going north. There is an imminent

need to raise capital invested in market. And this brooks no

delay.

Drop in investments

A mere 29.5% of our GDP is attributed to investments. Gross

Fixed Capital Formation (GFCF) is lowest in seven years. In

order to appease the situation government must switch

from subsidies to investments. It must invest in roads,

towns and broadband infrastructure. Introduction of mobile

payments will further streamline the process of reforms.

Pratibimb | March-April 2013 | 29

is lowest in seven years. In order to appease the situation

government must switch from subsidies to investments. It

must invest in roads, towns and broadband infrastructure.

Introduction of mobile payments will further streamline the

process of reforms.

Decline in portfolio inflows

During previous year portfolio inflows were Rs. 110120 cr

as against Rs. 47738 cr inflows in 2011-12 year. To stem this

rot government must improve general sentiments. It must

allow employees to migrate from EPF to NPS for long term

savings to be deployed in stocks.

Financial Inclusion felicitated because of technology

Pointers of financial inclusion

In India, almost half the country is unbanked.

Only 55 per cent of the population have deposit ac-

counts and 9 % have credit accounts with banks.

India has the highest number of households (145

million) excluded from Banking.

There was only one bank branch per 14,000 people.

6 lakh villages in India, rural branches of SCBs includ-

ing RRBs number 33,495.

Only a little less than 20% of the population has any

kind of life insurance and 9.6% of the population has

non-life insurance coverage.

Just 18 per cent had debit cards and less than 2 per-

centage had credit cards.

Financial Exclusion – Why did we fail?

Absence of Banking Technology

Absence of Reach and Coverage

Absence of Viable Delivery Mechanism

Not having a Business Model

What has been done so far

ICT based Business Correspondent (BC) Model for

low cost doorstep banking services in remote villag-

es.

Board approved Financial Inclusion Plans (FIPs) of

banks for 3 years, starting April 2010.

Roadmap to cover villages of above 2000 population

by march 2012

Availability of minimum four banking products

through ICT model has been ensured.

Guidelines for convergence between Electronic Ben-

efit Transfer and FIP have been issued.

Pratibimb | March-April 2013 | 30

Guidelines for convergence between Electronic Ben-

efit Transfer and FIP have been issued.

All Bank branches must be on Core Banking Solution

(CBS). All Regional Rural Banks (RRBs) to be on CBS

by September 2011

Multi-channel approach (Handheld devices, mobiles,

cards, Micro-ATMs, Branches, Kiosks

Front-end devices transactions must be seamlessly

integrated with the banks’ CBS.

In a nutshell

The technology advancement in communication sector is

the key for growth. Especially, financial sector’s progress

depends on technology. Hence technological advancement

in terms of mobile communication devices is quintessential

for us. The coveted dream of financial inclusion and in-

creased participation of secluded society based on econom-

ic background is proportional to recuperation of technology

for the betterment of common people. For example, Aa-

kash tablet that comes for just Rs, 2200, is making cuts in

the society. It is well fit in the pocket of needy. Its afforda-

bility and multifaceted use will definitely make sea changes

in our financial sector.

The panacea for our economy is heightened financial activi-

ty. And this turns into reality if our people are given all eq-

uitable opportunity to grow. That would cause inclusive

growth for whole economy at a huge scale. Our economy

which is a laggard in non conducive global environment can

be resurrected only if stakes from left small investors are

taken into consideration. Cumulative and aggregated

growth is capable of overhauling our ennui financial sector

which now depends at the behest of western economies.

We cannot any more afford to depend on such whimsical

and capricious economies. The brunt of dependence on

western economies was clearly evident when global reces-

sion caved in 2008. Our whole economy was incarcerated in

shackles. To set it free from such covert shackles we have

to be independent and efficient.

India would come up as a major financial hub of world if its

financial sector integrated with advance technology grows

by leaps and bounds.

Steady growth in technology is driving our economy partic-

ularly, financial research towards new heights. This propi-

tious trend of inclusive growth in financial research is mak-

ing strides to transform our nation into past glorious form

of Golden Sparrow.

Pratibimb | March-April 2013 | 31

References

www.rbi.org.in

http://commerce.nic.in/

http://www.thehindubusinessline.com/multimedia/dynamic/00879/BL27_FI_eps_879175g.jpg

http://rbidocs.rbi.org.in/rdocs/speeches/pdfs/fic060911dg.pdf

http://biz.thestar.com.my/archives/2011/3/24/business/b_pg12banksystem.jpg

http://static.expressindia.com/expressindia/newpic/gross08.jpg

http://www.getmoneyrich.com/wp-content/uploads/2012/09/Inflation-Asia.jpg

http://business.gov.in

http://indiabudget.nic.in/

http://india.gov.in/

http://www.burson-marsteller.com

http://www.business-standard.com/newsimgfiles/2012/june/29062012/062912_36.jpg

www.economictimes.com

www.frontline.com

www.epw.org

Pratibimb | March-April 2013 | 32

Introduction

`Does the stock market overreact?' De Bondt and Thaler in 1985 gave start to a new wave of thinking

known as behavioural finance. Weak form inefficiency of the stock market was discovered by them after

analysing how people are systematically overreacting to unexpected and dramatic news events which were

surprising and profound. The Efficient Market Hypothesis as proposed by Fama (1970) asserts that the

stock prices reflect the relevant information. The asset prices follow a random walk path i.e. they are

merely random numbers. The study conducted by Caginalp G. and H. Laurent (1998) by the predictive

power of price patterns finds patterns and confirms that they are statistically significant even in out-of-

sample testing and report.

The pattern of the stock index might help in predicting some of the effects of the various events. The

calendar anomalies tends to exist which goes against the efficient market hypothesis. The researchers have

used Gregorian calendar to investigate the calendar anomalies. There are various countries and societies

which follow their own calendar on the basis of their religion. For example, the Hebrew calendar is

followed by the Jewish society, which is strictly based on luni-solar, the Christian society follows the

Gregorian, which is based on solar, and similarly Hindu and Chinese follow their own.

The Hindu calendar is called “Panchanga” and it is based on both movements of the sun and the moon.

The festival of “Diwali” is typically occurs at the end of October and beginning of November.

The special ritual called “Mahurat Trading” can be observed on major stock exchanges like NSE, BSE,

NCDEX to name a few lasts for about an hour. It is performed as a symbolic ritual since many years. It

marks a link with the rich past and brokers look at it on a positive note. It marks an auspicious beginning to

the Hindu New Year. The investors place token orders and buy stocks for their children, which are

sometimes never sold and intraday profits are booked, however small they may be. Thus, it is widely

believed that trading on this day will bring wealth and prosperity throughout the year.

It is interesting to observe the behaviour of trading activities during the period preceding and succeeding

Mahurat Trading. The purpose of this study is to know the effect of the festival prior and post diwali on the

the returns.

Econometric methodology

I have measured stock return as the continuously compounded daily percentage change in the share price

index (S&P CNX NIFTY) as shown below:

Rt = (lnPt – lnPt-1) x 100 …………………… (1)

Where, Rt = return at time t

Pt, Pt-1 = closing value of the stock price index at time t, t-1.

I have used S&P CNX Nifty as it has got the most liquid stocks in its portfolio. Further, the National

Stock Exchange is largest in terms of Market capitalisation and Volume. I have used the data of the

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