Technia Journal Vol 8 No 2...A Case Study of Tata Group of Companies Madhavendra Nath Jha The Cola...

Vol. 8. No. 2. October 2013 – March 2014

TECNIA Journal of Management Studies

A Study on Marketing Strategies in Udyan Fresh: A Retail Chain of Odisha

Anuradha Mishra

Consumption Pattern of Packed Milk Versus Fresh Milk

Meeravali Shaik, V.V.N. Harika, CH. Parimala

Brand – You & Me

Rajesh Bajaj

Human Resources Management and its Influence on Industrial Relation

L. Jayarangan, B Somu

News Analytics: A Literature Review

Parul Behl

Fluctuations in Stock Prices of Indian Automobile Industry: Due to CorporateFinancing Variables

Nikita Jain

Cloud Computing: The Forecast for Organizational Change from HR Perspective

Sandeep Kumar, Deepak Kumar

Organizational Growth and New Venture Strategy in the 21st Century

Neetu Sharma

Psychological Well-being of Management Graduates Versus ScienceGraduates in Delhi

Poonam Khurana, Anshu Loschab, Sonam Goel

Emerging Role of Corporate Sector Towards Social Responsibility:A Case Study of Tata Group of Companies

Madhavendra Nath Jha

The Cola War – The War of Two Giants

Rajeshwar Nath, Sweta Bakshi

ISSN – 0975 – 7104Regn. No.: DELENG/2006/20585

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Tecnia Journal of Management StudiesVol. 8, No. 2, October 2013 – March 2014

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Prof. Christopher TurnerPro Vice-ChancellorThe University of WinchesterWest Hill, Winchester, U.K.

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Editorial BoardDr. Ajay KumarDr. Sandeep Kumar

Dr. Sandeep KumarEditor

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From The Editor’s DeskFrom The Editor’s DeskFrom The Editor’s DeskFrom The Editor’s DeskFrom The Editor’s Desk

I take this opportunity to thank all contributors and readers for making Tecnia Journal of ManagementStudies an astounding success. The interest of authors in sending their research-based articles forpublication and overwhelming response received from the readers is duly acknowledged. I owe myheartfelt gratitude to all the management institutes for sending us their journals on mutual exchangebasis, and their support to serve you better.

We are happy to launch the Sixteenth issue of our academic journal. The present issue incorporatesthe following articles:

� A Study on Marketing Strategies in Udyan Fresh: A retail chain of Odisha.

� Consumption Pattern of Packed Milk Versus Fresh Milk

� Brand – You & Me

� Human Resources Management And Its Influence On Industrial Relation

� News Analytics: A Literature Review

� Fluctuations in Stock Prices of Indian Automobile Industry: Due to Corporate FinancingVariables

� Cloud Computing : The Forecast for organizational change from HR Perspective

� Organizational Growth And New Venture Strategy In The 21st Century

� Psychological Well-being of Management Graduates versus Science Graduates in Delhi.

� Emerging Role of Corporate Sector Towards Social Responsibility: A Case Study of TataGroup of Companies

� The Cola War – The War of Two Giants

My thanks to the authors, Mrs. Anuradha Mishra, Meeravali Shaik, Mr. V.V.N. Harika, Ms. CH.Parimala, Mr. Meeravali Shaik, Dr. Rajesh Bajaj, Dr. L. Jayarangan, Mr. B. Somu, Ms. Parul Behl,Ms. Nikita Jain, Dr. Neetu Sharma, Dr. Sandeep Kumar, Mr. Deepak Kumar, Dr. Poonam Khurana,Ms. Anshu Loschab, Ms. Sonam Goel, Mr. Madhavendra Nath Jha & Rajeshwar Nath & SwetaBakshi who have sent their manuscripts in time and extended their co-operation particularly infollowing the American Psychological Association (APA) Style Manual in the references.

I extend my sincere thanks to our Chairman Sh. R.K. Gupta, who has always been a guiding lightand prime inspiration to publish this journal. I am grateful for his continuous support andencouragement to bring out the Journal in a proper form. I also appreciate Editorial CommitteeMembers for their assistance, advice and suggestion in shaping up the Journal. My sincere thanksto our distinguished reviewers and all team members of Tecnia family especially to Mr. PradeepKumar Palei for their untiring efforts and support in bringing out this bi-annual Journal.

I am sure the issue will generate immense interest among corporate members, policy-makers,academicians and students.

Editor

Contents

1. A Study on Marketing Strategies in Udyan Fresh: A Retail Chain of Odisha ..... 1

Anuradha Mishra

2. Consumption Pattern of Packed Milk Versus Fresh Milk .............................................. 7

Meeravali Shaik, V.V.N. Harika, CH. Parimala

3. Brand – You & Me................................................................................................................... 13

Rajesh Bajaj

4. Human Resources Management and its Influence on Industrial Relation ............... 19L. Jayarangan, B. Somu

5. News Analytics: A Literature Review ................................................................................ 22

Parul Behl

6. Fluctuations in Stock Prices of Indian Automobile Industry: ...................................... 33Due to Corporate Financing Variables

Nikita Jain

7. Cloud Computing : The Forecast for Organizational Change from ............................ 37HR Perspective

Sandeep Kumar, Deepak Kumar

8. Organizational Growth and New Venture Strategy in the 21st Century ................... 44

Neetu Sharma

9. Psychological Well-being of Management Graduates versus Science ....................... 52Graduates in Delhi

Poonam Khurana, Anshu Loschab, Ms. Sonam Goel

10. Emerging Role of Corporate Sector Towards Social Responsibility: ......................... 56A Case Study of Tata Group of Companies

Madhavendra Nath Jha

11. The Cola War — The War of Two Giants .......................................................................... 62

Rajeshwar Nath, Sweat Bakshi

General Information

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� Registration Number : DELENG/2006/20585

� ISSN – 0975 - 7104

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� Printed at : Rakmo Press Pvt.Ltd.C-59, Okhla Industrial Area, Phase-I,New Delhi-110020.

Tecnia Journal of Management Studies Vol. 8 No. 2, October 2013 – March 2014

1A Study on Marketing Strategies in Udyan Fresh: A Retail Chain of Odisha

A STUDY ON MARKETING STRATEGIES IN UDYAN FRESH:A RETAIL CHAIN OF ODISHA

Abstract: The emerging agricultural marketing practices in India are toimprove small producer’s livelihoods. This can be happen by linkingprimary producers with global and national markets through fresh foodretail chains. This study on fresh food retail chain has been undertakenon Udyan Fresh of Odisha a local retail chain, started under Public PrivatePartnership mode in the year 2012 in collaboration with the StateHorticulture Department. The basic objective of this organization is tocheer for thousands of farmers who sustain on vegetable cultivation andprovide farm fresh fruit and vegetables to the consumer with Local mandi/haat price in a conducive environment. The major concern of the initiatoris how to market the product in an efficient way so that farmers also getbenefit and at the same time consumer also get the best value for theirmoney.. Udyan Fresh is an attempt to bridge the gap between theperception of the consumer and the retailers. This study focused on thebehavior of the consumer towards Udyan Fresh. The preference to visit aair-conditioned retail out let to buy vegetable is not yet being adoptedamong the people, else they want to visit the local mandis/ haat to purchasefresh vegetables with varied price and quality ranges.

Keywords: Small producers, livelihood, Agricultural marketing, retailchain, Public Private Partnership, conducive, perception.

Anuradha Mishra*

*Mrs. Anuradha Mishra, Lecturer, Centre for Agri-Business Management, Utkal University

Introduction

India is a country of aspiration, a developingeconomy, and a country which promises huge

growth. People here spend a large chunk of theirincome on food. According a recent study done byMcKinsey, the share of an Indian house holdspending on food is one of the highest in the world,with around 48% of income being spent on food andbeverages. Consumption of fresh fruits andvegetables is very high in urban area rather than ruralareas. With the penetration of organized retail outletsin suburbs, and semi urban areas, more and moreIndians are exposed to organized retail shops. Giventhe fact that the rural population constitutes thelargest segment of consumers (around 58 60 percent)some organized retailers are expanding to the ruralareas to tap the existing large consumer base.

Literature Review

Ms Priyanka Yadav (2013) clarified that Customersatisfaction means feeling of pleasure after using theproduct or service. Customer satisfaction is a criticalissue in the success of any business system, traditionalor online. To understand satisfaction we need to havea clear understanding of what is meant by customersatisfaction. Customer satisfaction is critical forestablishing long term client relationships.Relationship b/w Service quality and satisfaction isthe key to measure user satisfaction. The study wasdone in Rohtak city of Haryana and 75 respondentsare taken to analyze the customer satisfaction towardsreliance fresh. She found that higher educatedindividuals show more interests in the organizedbuying of the things. Most of the customers like tobuy the products directly from the outlet instead of


2 Mrs. Anuradha Mishra

home delivery. Customers mostly focus on the qualityof goods and service.

Mr Manish Kumar and Ms Nidhi Singh(2012)studied the Diversity in retail purchases behavior infood and grocery in NCR (Noida and Ghaziabad): anaid to formulate retail strategy and suggested thatproximity and price are more important than otherfactors and in these two RPFs there are no variationsacross geographies as well. These indicate that retailformats for grocery can be standardized on theseRPFs irrespective of geography. But other RPFs showmarked differences. So retail format need to becustomized in terms of communications, services,product assortment and ambience as geographychanges. It should be observed that socio cultural andeconomic background changes with geography.

Ali, Kapoor and Moorthy (2010) in their paper,proposed a marketing strategy for a modern food/grocery market based on the consumer preferencesand behavior. A total of 101 households havingsufficient purchasing power personally surveyed witha structured questionnaire. These households werespread across the well developed Gomti Nagar areaof Lucknow city, simple statistical analysis such asdescriptive statistical analysis, frequency distribution,cross tabulation analysis, frequency distribution, crosstabulation analysis of variance, and factor analysis toassess the consumers’ preferences for food andgrocery products and markets attribute were carriedout. The preferences of the consumers clearly indicatetheir priority for cleanliness/freshness of foodproducts followed by price, quality, variety,packaging and non seasonal availability. Theconsumers’ preference of the market place largelydepends on the convenience in purchasing at themarketplace along with the availability of services,attraction for children, basic amenities andaffordability. The result of the study suggests thatmost of the food and grocery items are purchased inloose form from the nearby outlets. And, fruits andvegetables are mostly purchased daily or twice aweek due to their perishable nature, whereas groceryitems are less frequently purchased.

According to Chakarborty (June, 2010), Indianretail is booming sector and mainly the organizingretail sector is witnessing a radical change. Indianconsumers are looking for product variety. One of theinternationalized retail formats is discount storeformat. Managing this particular retail format inIndian culture needs an understanding of Indian

Customers’ perception towards the discount storeformat. Shopping motive is a important functionalelement to lead the shopper to the market place.Shopping motive changes are based on culture, retailformat, economic and social environment. The authoridentified the driving shopping motives of the Indiandiscount store shoppers. A total of 270 were taken asa sample out of which 252 were considered for finalstudy. Factor analysis extracted three shoppingmotives, two of which relate to hedonic shoppingmotive and one to utilitarian. The factors were namedas diversion, socialization and utilitarian. Other threedimensions of the study were store attributes,shopping outcomes and shopping perceived cost.Under each dimension factors related to discountsstore were identified. The identified factors can be thekey for discount stores for understanding theirshoppers.

Hemalata, SIvakumar and Jayakumar (2009)suggested that different groups of consumers believethat variegated store attributes are important.Therefore, store attributes are important. Thereforestory attributes appears to be promising marketsegmentation criterion. In this sense, their workfocused on the store attributes as a possible criterionto segment the shoppers. They started by analyzingthe importance of consumer segmentation to theretailers. After reviewing the literature of marketsegmentation, a segmentation analysis of clothing andapparel shoppers in India was performed. First, ahierarchical cluster analysis was carried out, and thenk means cluster analysis was done which identifiedthree meaningful differentiated customer groups.Further, a classification tree analysis was performedto identify the store attributes that differentiated theclustered groups. Finally, three clusters of Indianshoppers, namely, economic shoppers, convenientshoppers and elegant shoppers were identified. Themain conclusions and their implications for retailingmanagement were pointed out.

Objectives of the Study

The study aims to achieve the following objectives

• To understand the needs of differentcustomers preference for vegetables andfruits at Udyan Fresh.

• To find out the satisfaction level of customersat Udyan Fresh.

• To examine the influence of retail location onthe purchasing behaviour.



Research Methodology

For the research study to be accepted, theprocedures for conducting it should be significantlyexpressed. The whole plan should be definedeffectively so that the researcher can have reasons infavor of some factors and so against some other. Asthere is a statistical technique for different researchstudy, so it is highly essential that the procedures andtechniques to be applied should be explainedcarefully, as under:

It has been divided into four parts: -

a) Research Designb) Sample Designc) Data Collection Methodd) Data Analysis Procedure

a) Research Design

A research design is the specification of methodand procedure for acquiring the informationneeded. Since the present study is based onexploratory research design.

b) Sample Design

An ideally selected sample, due to the time andmoney constraints represents the whole universe.Thus, a sample should never be too big as to beun-manageable nor too small as to loose itsrepresentation. In sample design, following threeaspects are highlighted:

– Determination of sample unit– Determination of sample technique– Determination of sample size

Sample Unit

The universe of the study is all the individualsusing retail outlets preferably Udyan Fresh inBhubaneswar city and the sample size of 100 is to betaken using random sampling technique.

Sample Size

Sample size refers to number of elements to beincluded in this study i.e. 100 respondents.

Sample Technique

For the present study, the techniques ofconvenience sampling (i.e. non-probability sampling)is used. A due consideration should be given to the

data collection so that the conclusion comes out to beaccurate.

c) Methods of Data Collection:

Usually, three basic methods are used to collectprimary data-

1) Interview2) Observation3) Questionnaire

Scope of the Study

This study has been taken to understand theconsumers purchasing behaviour at Udyan Fresh.Studying the purchasing behaviour helps us tounderstand the perception of any consumer towardsthe modern format of retailing for fresh fruits andvegetables and through which we can take certainstrategies to make this format homogeneous. Adetailed study has been made by studying variousliteratures on the said topic. The effort is made tounderstand perception of various customers based ondemographic conditions. The study is extensivelydone though a detailed survey done at various storeslocated at Bhubaneswar. It is based on both primaryand secondary information.

Data Analysis and interpretations

The data has been collected from the 10 differentoutlets of Udyan Fresh of different locations atBhubaneswar with 100 respondents to understand theneeds of different customer’s preference forvegetables and fruits at Udyan Fresh, to find out thesatisfaction level of customers at Udyan Fresh and toexamine the influence of retail location on thepurchasing behavior.

From the table-1 it is found that normally 60%customers of age group from 36-50 are giving their

Table 1: Demographic profile of respondents

Parameters Group number %

Age up to 25 3 3

25-35 34 34

36-50 60 60

50 & above 3 3

Total 100



preference and coming to Udyan Fresh for purchasingvegetable. So it is clearly visible that the knowledgeabout organised retailing is very well understood bythis age group customers and so also they wants tosave their time by coming this out let to purchasevegetables. But we have to encourage the othergroups to change their behavior of purchasing fromunorganized to organized retailing.

Table 2: Demographic profile of respondents


Sex Male 68 68

Female 32 32

Fig. 2: Demographic profile

Table 3: Marital status of respondents


Marital Status Married 86 86

Unmarried 14 14

Fig. 3: Marital status

From table-3 we find the result that there ismarried customer is 86% than unmarried customersof Udyan Fresh. Here we cannot conclude that themarried customers have more requirements orawareness about Udyan Fresh. But may theunmarried customers have some dependency at theirhouse holds.

Table 4: Monthly income of respondents

Parameters Group Number %

Monthly Up to 30 30Income Rs 25,000/-

Rs 25,001/- to 60 60Rs 49,000/-

Rs 50,000/- to 9 9Rs 74,000/-

Rs 75,000/- to 1 1Rs 1,00,000/-

Fig. 4: Monthly income

Fig. 1: Demographic profile

From Table-2 we found that total from 100respondents 68% are male customers and 32% arefemale customers visiting Udyan Fresh to purchasevegetables and fruits. Since Indian house are normallyrun by the male members so the Purchasing powerof them is more. So, male customers are more thanfemale customers.



Table-4 gives result that mostly the Income groupfrom Rs 25,000/- to Rs 49,000/- is 60% of the total noof respondents. So, we can say that this income groupcustomers are the frequent visitors to Udyan Fresh.

Result of table 5 is that the average76% of the totalrespondents of Udyan fresh is having minimunmqualification is graduation.There fore we can say thatdue to literacy and cetain decissisive power customerschoose Udyan Fresh for vegetable shopping.

Table 5: Educational qualification of respondents


Educational Up to High 1 1Qualification School

Intermediate 5 5

Graduate 76 76

Post Graduate 15 15

others 3 3

Fig. 5: Educational qualification

Table 6: Behavioural Profile of respondents


Location Unit-1 marketPreference

Local Market

Street sidevendors

Udyan Fresh

Reliance Fresh

Any others

Fig. 6: Location preference

Table 6 is the result of the third objective that whoare the customers having preference to visit UdyanFresh to purchase vegetables . It is found that duevarious outlets located at various places of the city so59 % customers prefer to visit Udyan fresh to getFresh vegetables that to the evening time is thepreferred time for vegetable shopping. Rest of therespondents sometimes visit other places to purchasevegetable.

Table 7: Satisfaction level of purchasing

Parameters Group Number %

Very StronglyDisagree

Strongly Disagree

Disagree 11 11

Satisfaction Agree 79 79

Strongly Agree 10 10

Fig. 7: Satisfaction

This table -7 shows that among the total sampleof 100, 79% of customers are agree that they aresatisfied what they paid and they purchased.



Conclusion

Organized retailing of fruits and vegetables by thecorporate sector is expected to expand in India. Whileretailers are experimenting with a new businessmodel, the producers are testing out a new approachin marketing fruits and vegetables. The arrangementsare still evolving, This upgrade in production andmarketing of FFVs is currently creating new capacitiesfor innovation in horticulture. While the state coulddo more to support and strengthen thesearrangements [by way of research, extension,marketing and infrastructure development. Thestrongest impact of organized retailing would be seenon the consumers. Along with the increase indisposable income and increased discretionaryexpenditure, the consumers will get better choice interms of formats where they can execute theirpurchases. With more and more consumers aspiringfor shopping convenience and quality, the organizedretailing of FFVs is going to expand and this wouldpush the demand for quality product. A customer canpay one rupee more but in exchange he/she wants aquality product. Human behavior is changing w.r.tpurchasing decision so we have to understand thebehavior and take necessary strategies towardsorganized retailing for fresh fruits and vegetables.

References

• Ali, Jabir, Sanjeev, Moorthy, Janakiraman (2010),:Buying behaviour of Consumers for FoodProducts inan Emerging Econnomy,” British FoodJournal,112.2,pp. 109 124

• Anita Goyal and NP Singh (2007), “ConsumerPerception about Fast Food in India: AnExploratory Study”,British Food Journal, 109.2,pp.182 195

• Bronnenberg, Bart J. and Vijay Mahajan (2001),“Unobserved Retailer Behaviour in MultimarketData:Joint Spatial Dependence in Market Sharesand Promotion Variables,” Marketing Science, 20(3), 284 99

• Chakorborty S., (2010), “A study of selectedDiscount Store Retail in Hyderabad for thepurpose of identifying factors in Regard toShopping Motives, Store Attributes, Shopping

Outcomes and Perceieved Shopping Cost,”International Journal of Global Business, 3.1, pp.1 19

• Choudhary, H. Sharma V., (2009), “EmpiricalStudy on operational efficiency in Retail stores inNoida”, Indian Journal of Management, Volume2, May June

• Gentry, James W., Patriya Tanshuhaj, L.LeeManzer and Joby John (1988), “ Do geographicsubcultures vary culturally,” Advances inConsumer Research 15,pp.411 417.

• Goyal, B.B., and Aggarwal, Meghna (2009),”Organized retailing in India An empricial Studiyof appropriate formats and expected trends”,Global Journal of Business Research, 3.2, pp 77 83.Available at SSRN: http:// ssrn.com/abstract =1629428

• Gupta, Sachin and Pradeep K, Chintagunta(1994), “on using Demographic variables todetermine segment membership in logit mixturemodels, “Journal of Marketing Research 31February, pp. 128 36

• Harminder Singh, Emrging Landscapes in retail RealEstate and Way forward Presentation(2008),Technopak at India Shopping Centre Forum,www.indiaretailing .com

• Helsen, Kristian, Kamel Jedidi, and Wayne,S.,Desabo (1993), : “A new approach to countrySegmentation utilizing multinational diffusionatterns,” journals of marketing, 57.4,pp1/60 71

• Hoch, Stephen J.Byung Do Kim, Alan L.Montogomery and Peter E. Rossi (1995),“Determinants of store level price elasticity,”Journal of marketing research, 32.1, pp.17 29

• Manish Kumar , Nidhi Singh, (2012) A Study ofDiversity in retail purchases behaviour in foodand grocery in NCR (Noida and Ghaziabad): Anaid to formulate retail strategy, journal of IT andManagement, Kapurthala, Volume 5 no. 2, Nov 2011April 2012, ISSN. 0974 066x

• Priyanka Yadav (2013), :Analytical Study ofCustomer Satisfaction of Reliance Fresh,International Research Journal of ManagementScience & Technology, Volume 5 , Issue 1, pg 321-339



CONSUMPTION PATTERN OF PACKED MILK VERSUS FRESH MILK

Abstract: Agriculture being the vocation of the majority was consideredthe genuine industry to be technologies worldwide. It is an accepted factthe milk from the very origin of human’s life on the earth, has been themost likely and captivating food its energetic qualities. In the early days,milk could be easily managed and availed. But with the industrial growth,population explosion, change in life style, above all over, increasingconsumption of the meats of milk generating cattle and their evacuationfrom cities caused the problems of milk scarcity and unavailability at itsunprecedented and gravity level, especially, in the big crowded cities. Wehave tried our best to compile the same in the report, which we observedand learnt during our Research on “Consumers Buying behavior towardspacked milk vs fresh milk “.

Keywords: fresh milk ,packed milk ,litters per day, hygiene, pricedifferences

V.V.N. Harika*Meeravali Shaik**CH. Parimala***

*Ms. V.V.N. Harika, Department of Business Administration, St. Ann’s College of Engineering and Technology, [email protected]**Mr. Meeravali Shaik, Research Scholar & Assistant Professor, Department of Business Administration, St. Ann’s College ofEngineering and Technology, Chirala. [email protected]***Ms. CH. Parimala, Department of Business Administration. St. Ann’s College of Engineering and Technology, [email protected]

Introduction

Agriculture being the vocation of the majority wasconsidered the genuine industry to be

technologies worldwide. So this recognizedphenomenon amplified the agro-based industryastonishingly and unprecedented during the last threedecades. As the market- oriented concept of businessand trade holds the popular and attractive vasebehind the process of manufacturing consumergoods, the progressive businessman to explore newfields, and niches resulting in consumer satisfactiondo always efforts. This enchanting and fascinatingprocess of exploration and Research was basic factor,which brought about the origin and innovation ofmilk industry to meet some unsatisfied needs of milk-consumer.

It is an accepted fact the milk from the very originof human’s life on the earth, has been the most likelyand captivating food its energetic qualities. In theearly days, milk could be easily managed and availed.But with the industrial growth, population explosion,change in life style, above all over, increasingconsumption of the meats of milk generating cattleand their evacuation from cities caused the problemsof milk scarcity and unavailability at itsunprecedented and gravity level, especially, in the bigcrowded cities. To meet this milk scarcity problems,powder milk was launched into market but it couldnot achieve the real target despite its propagation andadvertisement of its hygienic effects and still the needof fresh and natural milk were felt among theconsumer.


8 Ms. V.V.N. Harika, Mr. Meeravali Shaik and Ms. CH. Parimala

Process of Packed Milk

Packed milk is a processed milk. We collect milkfrom the approved dairy farms and process it keepingthe highest standards. Many people doubt thatpacked milk is made of chemicals or its proceedssynthetically but it is a quite misleading conception.

Milk Collection

The method adopted in collection of milk fromdairies is, to only collect milk from the approvedsuppliers who are running their cattle farms inaccordance with the prescribed standards. Thetemperature is maintained at 80C without adding ice.The chiller containers are especially cleaned beforemilk is stored in them. This milk is then transportedto the factory.

Factory Reception

As soon as milk reaches the factory reception thequalified chemists and microbiologists for conductinga series of tests once again test it. This enables us tomark the milk confirming it to be internationalstandards.

Process

The milk is then pasteurized at 780C killing 98%germs / bacteria. The milk after pasteurization is thenstandardized as prescribed by the Pakistan Pure FoodLaws at 35% fats and 8.9% SNF (Solid Non-Fats). Thisprocess makes it a premium quality product.

Standardization

Standardization is a process in which the excessfats and SNF’s are removed from the milk in orderto achieve the standard of 3.5% Fat and 8.9% SNF asprescribed by the Pakistan.

Homogenization

Homogenization is a process in which all thecream in the milk is mixed. In this process, milk ispassed through 200 Bars of pressure, which in turnbreaks each cell to 0.5 microns, which is 200 timessmaller than its actual size.

SKIMS Milk

There are mainly two types of milk powders, fullcream and skimmed. SKIMZ is a skimmed milk

powder. Full cream powder contains 28% fat, whereasSKIMS as compared to full cream milk powder.

Marketing of Milk

In the business world, consumer is the mostimportant elements. Health of well being theconsumer sets the future prosperity and performanceof business. If the good are properly channeled andsold to consumer the activity of the production beginsto cease.

Mainly the question lies who our customer is andwhere they are located? What they want? And whatprice they are willing to pay for our product?

The question is how to reach them? This taskinvolves the establishment of strategy coveringchannels of distributions and physical distribution ofthe product.

Available Channels for Tetra Pack Milk

Long Chain Medium Chain

Manufacturer Manufacturer

⏐ ⏐↓ ↓

Distributor Retailers

⏐ ⏐↓ ↓

Retailers Consumers

⏐ ⏐↓ ↓

Ultimate Consumer

⏐ ⏐↓ ↓

Statement of Problem

To what extent, people are responding towardsthe packed milk? The superiority of packed milk isin the areas of hygiene, convenience, taste,nourishment and affordable price. Price of packedmilk is though higher, but it is economical in the sensethat it’s quantity required to make a certain numberof tea cups is half of that of fresh milk.

We have observed that in spite of these facts,most of the families prefer fresh milk. Why is this so?


9Consumption Pattern of Packed Milk Versus Fresh Milk

Problem is to be defined and investigation is to becarried out that whether fresh milk is really preferredover packed milk or not and what could be thepossible reasons for it.

Hypothesis

Ho = Fresh milk is preferred over packed milk.

Hi = Packed milk is preferred over fresh milk.

Theoretical Framework

People prefer fresh milk, because of its easyavailability, low price, free from germs and goodtaste. Based on the observations, the most importantvariables in comparison of fresh and packed milk arequality, price, hygiene, taste and nourishment thevariable of primary interest or the dependent variableis “ preference for the type of milk”. The independentvariables influencing are below:

Quality

Price

Hygiene

Taste

Nourishment

Income

The most influencing factor is the income offamilies. Most of families may strongly believe thatthe independent variables are in favor of a certainkind of milk, but they will surely prefer the one theycan afford.

Objectives of the Research

The objective of the research is:

• To find out whether as to the consumersprefer fresh milk over packed milk.

• To examine preferences of milk consumers.


Tools of research use for the data collection willbe personal interviewing and questionnaire andsecondary data as well.

Sampling

The process of using a small number of items orparts of the whole population to make conclusions

about the whole population.

Samples

A sample is a subset or some part of a largepopulation. In research 100 respondents were selectedby us to represent the sample.

Sampling Techniques Applied

We select non probability sampling techniques,under which We applied quota sampling andprobability sampling by means of which We appliedsystematic sampling.

We interviewed the people at their home. Weselected those people who were willing to answer thequestion. We filled in the questionnaire and somequestionnaires were distributed to the people andwere collected after two or three days.

Analysis & Results

Table 1: Usage of milk type

Type of milk use No of respondents

Fresh 6

Packed 25

Both 19

Total 50

Source: primary data

Figure 1: Usage of milk type

Interpretation: the above table to reveals that the totalrespondents (50) will use as follows 6 members freshmilk will use,25 members packed milk will be use,19members both types of milk will be use.

Usage of milk



Table 2: Litters purchase daily

Litters purchase daily No. of respondents

1 Litter 8

2 litters 16

3 litters 13

above 3 litters 13

Grand Total 50


Interpretation: In the above tell about the preferenceof the respondents while purchasing the milk forconsumption. 12 members of respondents are havingpreference on price, 8 members of respondents arehaving preference on quality, 23 members ofrespondents are having preference on availability,and 7 members of respondents are having preferenceon taste.

Table 4: Price Difference

Price difference No of respondents

4 Rs 6

5 Rs 15

6 Rs 15

more than 6 Rs 14

Grand Total 50


Figure 2: Litters purchase daily

Interpretation: In the above table we can know aboutpurchase of milk daily in the form of liters by allrespondents. 8 respondents are purchasing 1 literdaily, 16 respondents are purchasing 2 liters daily, 13respondents are purchasing 3 liters daily and 13respondents are purchasing more than 3 litters daily.

Table 3: Preference of Purchase

Preference of purchase No. of respondents

price 12

quality 8

availability 23

taste 7

Grand Total 50


Figure 3: Preference of purchase

Figure 4: Price difference

Interpretation: the above table to reveals the pricedifference between the fresh milk and packed milkavailable in the market.6 member said there will be 4Rs difference in price, 15 member said there will be5Rs difference in price, 15 member said there will be6 Rs difference in price and remaining 14 membersaid there will be more than 6 Rs difference in price.

Table 5: Hygienic Milk

Hygienic milk No of respondents

Packed 0

Fresh 50

Total 50


Littres purchase daily

Preference of purhcase

Price differencebetween fresh and...



Interpretation: the above table tells the opinion of therespondents on the hygienic matter about the milk.All the total respondents (50) tell that fresh milk wasmore hygienic than the packed milk.

Chi-Square Test

Here total sample size is 50 as in this we observed20% had use both the fresh milk and packed milk andremaining 80% had usage packed milk of the one.

We expected by these respondents that 85% hadchanged their attitude and remaining 15% had notchanged their attitude.

We used chi – square of a non parametric

ΣΣΣΣΣ (Oij – Eij)2

Formula = ———————Eij

Group Observed Expected O-E (O-E)2 (O-E)2Evalues values

(O) (E)

1 40 42 -2 4 0.09

2 10 8 2 4 0.5

Total 0.59

Degree of freedom = n-1 = 2-1 = 1

The table value of chi-square for 1 d.f at 5% levelof significance is 3.841, so hypothesis is accepted.

As the value of calculated is less than the tablevalue which means the calculated value can be saidto have erases just because of chance. Hence thehypothesis does hold good.

Conclusion

From the research conducted, it has beenobserved that. There is no signification relationbetween the use of packed milk and fresh milk. About

83.6% people use only fresh milk whereas only 4%people use packed milk. The rest of people use bothpacked and fresh milk. Therefore, the hypothesisstated earlier, i.e.’ fresh milk is preferred over packedmilk, is accepted on the basis of results. Also, therelationship of education with use of packed milk isnot very strong.

References

• Adams, Kristina. ”Horses in History: ABibliography”. USDA National AgriculturalLibrary. Retrieved 24 May 2013.

• Brian M. Fagan (2004). The Seventy Great Inventionsof the Ancient World. Thames & Hudson. ISBN 0-500-05130-5.

• DK Jordan (24 November 2012). ”Living theRevolution”. The Neolithic. University ofCalifornia – San Diego. Retrieved 22 April 2013.

• DK Jordan (24 November 2012). ”BeyondWheat”. The Neolithic. University of California –San Diego. Retrieved 22 April 2013.

• DK Jordan (24 November 2012). ”The“Agricultural Revolution””. The Neolithic.University of California – San Diego. Retrieved 22April 2013.

• ”Farming”. Egypt’s Golden Empire. PBS. Retrieved22 May 2013.

• Hancock, James F. (2012). Plant evolution and theorigin of crop species (3rd ed.). CABI.p. 119. ISBN 1-84593-801-1.

• Heiser, Carl B., Jr. (1992). “On Possible Sourcesof the Tobacco of Prehistoric Eastern NorthAmerica”. Current Anthropology 33: 54–56.doi:10.1086/204032.

• Janick, Jules (2008). ”Roman AgriculturalHistory”. Purdue University. Retrieved 22 May2013.

• Janick, Jules. ”History of Agricultural andHorticultural Technology in Asia” (PDF). PurdueUniversity. pp. 3–4. Retrieved 23 May 2013.

• Janick, Jules (2008). ”Islamic Influences onWestern Agriculture”. Purdue University.Retrieved 23 May 2013.

• Jourdan, Pablo. ”Medieval Horticulture/Agriculture”. Ohio State University. Retrieved 24April 2013.

Figure 5: Hygienic milk

Hygienic milk



• Lesley Adkins, Roy A. Adkins (1998). Handbook toLife in Ancient Rome. Oxford University Press.pp. 194–196. ISBN 0-19-512332-8.

• Mascarelli, Amanda (5 November 2010). ”Mayansconverted wetlands to farmland”. Nature.doi:10.1038/news.2010.587.

• Michael Moïssey Postan, H. J. Habakkuk, Miller,Edward, ed. (1987). Cambridge Economic History ofEurope: Vol. 2: Trade and Industry in the MiddleAges. Cambridge University Press. p. 28. ISBN0-521-08709-0.

• Morgan, John (6 November 2013). ”InvisibleArtifacts: Uncovering Secrets of Ancient MayaAgriculture with Modern Soil Science”. SoilHorizons 53 (6): 3.doi:10.2136/sh2012-53-6-lf.

• Richerson, Peter J. (2001). ”Chapter 5: PastoralSocieties”. Principles of Human Ecology. pp. 79–80.

• S. Johannessen and C. A. Hastorf (eds.), ed.(1994). Corn and Culture in the Prehistoric NewWorld. Boulder, Colorado: Westview Press.ISBN 0-8133-8375-7.

• Stromberg, Joseph (February 2013). ”Classicalgas”. Smithsonian 43 (10): 18. Retrieved 27 August2013.

• UN Industrial Development Organization,International Fertilizer Development Center(1998). The Fertilizer Manual (3rd ed.). Springer.p. 46. ISBN 0-7923-5032-4.

• Vergano, Dan (19 January 2011). ”Grapesdomesticated 8,000 years ago”. USA Today.Retrieved 4 May 2013.



BRAND – YOU & ME

Abstract: Present day branding of products and services is an inescapablerequirement of the business. The need is not only to name a saleableproduct, but also to position it in the minds of prospects and customers;which creates a market pull for your products. For any businessorganisation, this task is accomplished by us - the marketers; by poolingin all the intellectual and emotional resources at our command. Presentday in the competitive environment, under which we all operate; it is verynecessary to create a comfortable space for ourselves in human market.Successful launching of “Personal Brand” creation involves a very carefulself assessment, analysis and identification of strong and weak areas of theperson concerned. Around these areas, a convincing, attention catchingstory (copy matter) needs to be prepared and communicated in a sustainedmanner. Along the way, based on response; communication changes canbe inserted. This exercise is very necessary, throughout the career of theprofessionals for achieving success in their careers.

Keywords: Branding, Competition, Self promotion.

Rajesh Bajaj*

*Dr. Rajesh Bajaj, Professor, Tecnia Institute of Advanced Studies, Madhuban Chowk, Rohini, Delhi-85 Email: [email protected]

What is this Jumbo Mumbo called – BrandYou & Me?

Beautiful lady out there, wearing big rocks – sureenough it carries a mark of Dee Beers or Gili or

Nakshatra or something like that. That distinctiveswoosh on the side of your sneakers, your T-shirtwith the green Croc on your chest, tells everybody;as to who got you branded. The blue jeans with theprominent Levi’s rivets, the watch with the high endicon embossed on the face, that coffee travel mugyou’re carrying — ah, you’re a Nestle guy or gal. Yourfountain pen with the maker’s symbol crafted into theend ...

It’s a new brand world.

You’re branded, branded, branded, and branded allover your body.

The marketer, entrepreneur or the business manknows the relevance of branding his products and

also knows, as to how he can exploit you or yourbody for benefitting his business interests.

He is using your body as an empty canvas fordisplaying his products or as a Hanger to showcasehis goods on to you with his name exhibited moreprominently than your own identity.

Do you get paid for this service rendered by youto the brand owner? No, you don’t. Rather you allowthe use of your body very happily and feel so obligedthat you willingly pay to brand owner, far in excessto the value received by you; leave apart any discountor compensation for services rendered by you.

Ladies & Gentlemen, it is the “US”, the Marketers,the Managers and enterprising Businessmen, whowork out the strategies to exploit the emotions andthe bodies of human beings for the benefit of theenterprise, we work for.


14 Dr. Rajesh Bajaj

What we are doing for the enterprises, are wedoing the same for US too or not? No, we always missout on that.

What TOM PETERS – Management Wizard hasto say on Self Branding?

“Big companies understand the importance ofbrands. Today, in the Age of the Individual, youhave to be your own brand. Here’s what it takes tobe the CEO of Me Inc.”

It’s time for me — and you — to take a lessonfrom the big brands, a lesson that’s true for anyonewho’s interested in what it takes to stand out andprosper in the new world of work.

Regardless of age, regardless of position,regardless of the business we happen to be in, all ofus need to understand the importance of branding.We are CEOs of our own companies: Me Inc.. To bein business today, our most important job is to behead marketer for the brand called “Me”.

It’s that simple — and that hard — and thatinescapable too.”

The real action is:

The main chance is of becoming a free agent inan economy of free agents, looking to have the bestseason you can imagine in your field, looking to doyour best work and chalk up a remarkable trackrecord, and looking to establish your own microequivalent of the Nike swoosh.

Because if you do, you’ll not only reach outtoward every opportunity within arm’s (or laptop’s)length, you’ll not only make a noteworthycontribution to your team’s success — you’ll also putyourself in a great bargaining position for nextseason’s free-agency market.

The good news — and it is largely good news —is that everyone has a chance to stand out. Everyonehas a chance to learn, improve, and build up theirskills. Everyone has a chance to be a brand worthyof remark.

Today brands are everything, and all kinds ofproducts and services — from accounting firms tosneaker makers to restaurants — are figuring out howto transcend the narrow boundaries of their categoriesand become a brand surrounded by a TommyHilfiger-like buzz.

Who else understands it? Every single Web sitesponsor. In fact, the Web makes the case for brandingmore directly than any packaged good or consumerproduct ever could. Here’s what the Web says:Anyone can have a Web site. And today, becauseanyone can ... anyone does! So how do you knowwhich sites are worth visiting, which sites tobookmark, which sites are worth going to more thanonce? The answer: branding. The sites you go backto are the sites you trust. They’re the sites where thebrand name tells you that the visit will be worth yourtime — again and again. The brand is a promise ofthe value you’ll receive.

The same holds true for that other killerapplication of the Net — email. When everybody hasemail and anybody can send you email, how do youdecide whose messages you’re going to read andrespond to first — and whose you’re going to sendto the trash unread? The answer: personal branding.The name of the email sender is every bit as importanta brand — is a brand — as the name of the Web siteyou visit. It’s a promise of the value you’ll receive forthe time you spend reading the message.

Nobody understands branding better thanProfessional services firms. They have almost nohard assets — prudent guess is that most probablygo so far as to rent or lease every tangible item theypossibly can to keep from having to own anything.They have lots of soft assets — more conventionallyknown as people, preferably smart, motivated,talented people. And they have huge revenues — andastounding profits.

They also have a very clear culture of work andlife. You’re hired, you report to work, you join a team— and you immediately start figuring out how todeliver value to the customer. Along the way, youlearn stuff, develop your skills, hone your abilities,and move from project to project. And if you’re reallysmart, you figure out how to distinguish yourselffrom all the other very smart people walking aroundwith very expensive suits, high-powered laptops, andwell-polished resumes. Along the way, if you’re reallysmart, you figure out what it takes to create adistinctive role for yourself — you create a messageand a strategy to promote the brand called “You”.

Roadblocks

If we ask some of the professional managers orthe managers in making to identify their own


15Brand – You & Me

distinctive brand by listing their accomplishments.Sure enough, most of them would start looking down,so as not to get singled out to respond. Eager facessuddenly turn apprehensive. When they are givencouple of emotional jolts and with some additionalcoaxing and cajoling, the pens begin to fly.

There is no magic wand here. No brilliant, earth-changing discovery or patented formula. Whathappens is very simple:

We get the go-ahead to pat ourselves on theback, to acknowledge all the accomplishments inour professional and personal lives, and to look atourselves and our enterprises in a new way.

Why is it that the women with the guts to starttheir own businesses, women who have fought theirway to the top of big, big companies struggle somightily with branding themselves? Why is it thatmost of us would rather bungee-jump than take creditfor our accomplishments, for our talents, for ourcontributions? Non-scientific analysis for thisphenomenon is that we are caught in a self-perpetuating, interconnected web of myths, mythsthat have been handed down to us in one form oranother ever since Eve took a bite out of the apple.Myths such as:

• Myth #1: If I Am Good, They Will Come

• Myth #2: Marketing Myself Is a DirtyBusiness

• Myth #3: I Can’t Control What Other PeopleThink

Myth #1: If I Am Good, They Will Come

Being good is not enough. Being all of the thingsyou are and have accomplished is not enough. Toilingaway when everyone else has gone home will notleapfrog you to the front of the pack. You must finda way to tell your story to people who will listen. Andyour story must be the answer to a question that yourcustomers, clients, and colleagues need the answer to.Otherwise, it’s the proverbial sound of one handclapping. If there is a Tsunami in high seas and hightides do not reach the shores, do the people come toknow about it? The answer, in an increasinglycompetitive, dog-eat-dog, 21st-century world, is aresounding NO.

We assume that if we quietly build it behind thescenes, they will come. We shy away from promotingourselves, from taking credit for our successes, from

being our own best advertisement. This is the biggesthurdle that we must overcome—whether we’re athome, in the workforce, or in the Corner office.

Myth #2: Marketing Myself Is a Dirty Business

Successful personal branding means continuallystanding far enough away to see yourself and yourwork as if it were not you and your work that youwere looking at. Successful personal branding meanstaking a macro view of yourself and your business,learn how to look at what’s left of the former you asjust another product on a very crowded shelf, whereevery other can of soup is jockeying for position andtrying to knock you off in the process.

Successful personal branding means wearinglabels such as “leading” and “expert,” “sought-after,”“popular,” and “well-regarded.” It means creating abrand identity that is authentic, consistent, andmemorable, one that you own and are proud of.

Myth #3: I Can’t Control What Other People Think

You must learn to be the marketing manager ofyour own brand campaign. Why do we associateMukesh Ambani with “Think Big” andNarayanmurthy with “Work Ethics”? Because theyhave worked tirelessly to create that association forus. Nike, Coke, Xerox, and Microsoft tell us how theywant us to perceive their products—and we do,thanks to tightly honed messages that are reinforcedand repeated over and over again. Well! If thecustomer perception can be aligned for all these goodsand services, why can’t you and me make a slot forourselves?

Roadmap

Here are several simple steps you can take rightnow to bottle and market YOU:

• Figure out who you are, what you stand for,and why you are different than anyone oranything else.

• Create a story that communicates your valueand your market differentiation.

• Pull the key words that you have used tocreate that story and weave them intoeverything that you say, do and publishabout yourself and your business.

• Tell your story relentlessly, passionately, andunapologetically to anyone who will listen.


16 Dr. Rajesh Bajaj

You will refine and improve it as you goalong, figuring out which parts work andwhich don’t.

So don’t be afraid to let your pen fly, to beginyour exploration of your personal brand identity.Claim your rightful role as chief flag-waver for yourcompany, your product, and ultimately, for yourself.

How to Go About It?

So how do you get your brand to dance and sing?Branding for another company or a client is alreadyquite a venture, but branding yourself is almost acompletely different animal altogether. The maindifference with branding yourself versus a client isthat there are restrictions with your client. With you,there’s typically none. And worst of all, you may evenhave to get philosophical about it!

A new company without a brand is just like anamnesiac — there’s a general feeling over how thingsshould be, but you are completely lost. An amnesiachas a previously established personality perceived bythose around him, but has no idea how to define it.

Self-branding is often an exercise in torture. Theprocess forces you to look at yourself, yourpersonality, and your skillset with harsh eyes. Intranslating those truths into descriptive copy, you’llhave to walk a fine line between confidence andarrogance, cleverness and insincerity, and appearingknowledgeable without being condescending to youraudience.

The first stage calls for mostly with self-discoveryand research, urging you to pretend to have amnesia.

The second stage deals with what you can dowith the information you would gather.

Now, in the end, it all boils down to the followingpre-requisites.

Pre-requisites:

Honesty:

None of the exercises, insights, articles, orbusiness self-help tips, will help you unless you’rehonest with yourself and about yourself.

Why build a brand at all? Simply put, it’s becauseyou’re creating a relationship with someone you don’tknow yet — and in order to make it successful,honesty must be at the forefront.

Guts:

It’s easier to design your personal brand as whoyou would like to be versus who you really are. Itsounds so obvious, but the truth is that a lot of peoplelack the self-reflection to actually follow through onthis. They will always second-guess themselves outof fear of judgment or rejection.

Exposure Risk:

The fact is, you must risk exposure when youbrand yourself. A lot of people can’t, or won’t, takethat risk — but it is unavoidable, if you wish toachieve the desired results.

Process:

Step 1 : Who am I? What am I?

When you are trying to define a brand, it’s bestto get back to basics. Who are you? What do you liketo eat? What movies do you enjoy? What music doyou listen to? What do you absolutely hate? Definewho you think you are… and then, without revealingthat, ask others to reveal who they think you are.

Ask some friends and strangers to play a game— in three adjectives, describe “YOU.” The importantpart is making sure you get a varied number ofpeople with different levels of relation to you toanswer this honestly. The results can be veryenlightening, as it reveals the depth of this person’srelationship with you as well as how you areperceived. It would be best to ask these peopleindividually so they’re not influenced by what othershave already said.

What would be interesting is that people, nomatter their relationship with you or length of time,already have a few distinct impressions of you:namely, intelligence and some sort of considerateattitude attached. Naturally, that would please you,as that was how you might would like to beportrayed. This is the time you compare the notes youwrote about yourself to what others mentioned.

Now, most of the adjectives are going to bepositive because of the nature of your relationship tothese people, but it’s interesting to note less upliftingadjectives: diminutive, girly, frivolous. Harsh as theysound, it actually is a very valuable critique.Approach AJ and ask him to explain what he meant.Detailed inputs from AJ may give you a clue to your



personality trait, creating that impression. Use yourperceived disadvantages to your advantage!

Step 2 :Where am I?

Be aware of your surroundings and who you’respeaking or pitching to. Will you do a lot of localbusiness? International business? What’s your targetmarket? Define these, and then do your research! It’svery important to be yourself and brand yourselfaccordingly — like people will be drawn to you, andthose that aren’t similar to you that are still drawnrespect where you come from.

Step 3 : How & How Soon do I get here?

Remember, remember your roots. Whenresearching and thinking about your brand, askyourself what brought you to this point in your lifeto launch a new company, website, identity, what-have-you. Where do you come from and how did youget where you’re at? Remember — your brand musttell some type of story. If you have no roots, you haveno history, so why would someone care about yourbrand or identity if you don’t have anything to backit up?

Step 4 : Distill Information

Never stop asking questions — but also know

which answers are most relevant to you. Underuncertainty, what was is one supposed to do? Whoshould be listened to? The answer is, of course,yourself. In the end, you have to decide whatinformation given to you is relevant, and don’t beafraid to negate what some have said becausesometimes it could be down to personal preferencesat this point. Everyone has an opinion. People alreadyhave a perceived notion of what they think youshould be like, and that could colour their thinking.That’s not to say you should dismiss what others say,but remember to file the bits of info where theybelong.

Step 5 : Put it all together

Be consistent:

Branding can get as extreme or as subtle as youwant. There are many important aspects to brandingyourself, but here’s the main thing that you shouldetch in your brain: be consistent. It’s a simple enoughidea, but it’s often bungled up.

Again, your brand is more than just your logo oreven your website: it is everything that involves yourcharacter. You shouldn’t show up to a client’s meetingwearing a grey suit and tie if they run a motorcyclestore, the same way you wouldn’t show up in t-shirts

Table 1: Here are the likely responses you can expect

Name Relationship Time Known Extra Info. Adjectives

Simi Sister Forever n/a Creative, Funny, Intelligent

Sheetal Sister Forever n/a Funky, Aggressive, Sweet

Sneha Ex-Girlfriend 3 years n/a Passionate, Impatient, Loving

Tanya Best Friend 8 years n/a Compelling, Poised, Controversial

Deenu Great College Friend 5 years n/a Enthusiastic, Independent,Meticulous

Anika Girlfriend of Friend Few months n/a Smart, Assertive, Impulsive

Deepti Good Friend from 8 years, off n/a Macho, Larger-than-life,High School and on Exuberant

James Online Friend + 2 years Never Met Quirky, Sharp, StubbornClient

Nathan Online Friend Few months Never Met Independent, Considrate, Bright

AJ Online Acquaintance Few weeks Never Met Diminutive, Girly, Frivolous

Abadi Stranger n/a n/a Funky, Sophisticated, Happening


18 Dr. Rajesh Bajaj

and jeans to a financial institution. Be consistent. Andmost of all, be honest.

Be Short and Sweet :

Who am I? What am I? Where am I? Who areyou? How’d I get here? Be very specific, crisp andpleasant in your selection of words and weaving yoursuccess story..

Step 6 : Implement :

Pull the key words that you have used to createthat story and weave them into everything that yousay, do and publish about yourself and your business.

Tell your story relentlessly, passionately, andunapologetically to anyone who will listen. You willrefine and improve it as you go along, figuring outwhich parts work and which don’t.

With a little bit of work, you’ll be on your wayto defining your own brand.

References

• Aaker, David (2002), Managing Brand Equity,Prentice Hall of India.

• Belch, G. E. & Belch, M. A. (2001). Advertisingand Promotion, Tata McGraw Hill.

• Keller K. L. (2008), Strategic Brand Management,3rd Edition, Pearson Education

• O’Guinn,T. and Allen, C. (2009), AdvertisingManagement with Integrated Brand Promotion,1st Edition, Cengage Learning, New Delhi.

• Shah, Kruti and D’Souza, Alan (2009) Advertisingand Promotions” An IMC Perspective, Ist Edition,Tata McGraw Hill , New Delhi

• http://en.wikipedia.org/wiki/Self_brand

• http://www.wikihow.com/Build-Your-Personal-Brand

• http://www.williamarruda.com



HUMAN RESOURCES MANAGEMENT AND ITS

INFLUENCE ON INDUSTRIAL RELATION

Abstract: In the context of information technology revolution aided byinternet and flexible manufacturing, the Business Process Outsourcing(BPO) and production out sourcing grew well threatening jobs in thoughtleader USA leading to, Job migration from high labor cost zone, movinginto low cost destination like India, China. India led the soft ware side ofit and China led the hardware side of it. An estimated 60 billion dollarsoft ware export is a documented proof for it for India. However the conceptof Human Resource Management (HRM) began in mid 80s, influencedthe way employees are managed in enterprises globally for the simplereason, it is proactive and focused on areas like potential actualization (PA),quality of work life(QWL) and quality of life(QL) that fulfills both MaslowNeed Stratification Theory and ERG theory. The theories aim to focus onindividual motivation at work and thus when individuals are looked after;it has a positive impact collectively in the organization. Team work is onesuch area. The introduction of notions such as groups and motivation,which would be further developed by later organizational psychologistssuch as Maslow, Herzberg, or Vroom, partly replaced the mechanistic focusof Taylorism by a psychological interpretation of the labor process (Whyte1987). The rise in concern naturally reduces the role of informalorganization called Trade Union(TU), the very birth of it stem with theassumption that firms’ interest takes precedence over individual employeeinterest. The technology integration in firms added the proverbial fuel tothe fire hiking intellectualness in jobs substantially. The empowerment injobs reduced dependence TU assistance and there by TUs forced to eventake up casuals and contract labor causes.

Keyword: Information Technology, Collective Bargaining and Network

L. Jayarangan*B. Somu**

*Dr. L. Jayarangan, Professor, Management Studies, Sri Venkateswara Institute of Science and Technology, Chennai**B. Somu, Research Scholar, The Bharathiyar University, Coimbatore

Information technology comprises of use ofcomputers and internet as both helped in ease of

work in the first instance and make the marketborderless. (Moore & Curry, 1996) It helped inbusiness network immensely such as downstreamsupply chain and upstream for the simple reasonwhen companies look at the big picture, when theyunderstand that sometimes it’s better to co evolve

rather than compete with a rival, it can make allparties stronger. It calls for a good network seekingsynergy all the time. Computer that was pioneeredby IBM and others came on the scene to helpcomputing, due to technology convergence morphedinto electronic mail, electronic retailing called as E -tailing and even Desk top publishing. It is better weunderstand the influence of computer invention that


20 Dr. L. Jayarangan and B. Somu

has changed the lives of millions of people in thisworld. IBM founded by Watson Senior had the intentof population survey calculation in USA since the vastdata and delay in processing it, led to findings beingredundant and punch card operation of IBMsubstantially saved time. When it developed its mainframe computer which had the size of a foot ballground, it only did the mathematical function likeaddition, subtraction etc and as time went bytechnology evolved into main frame to mini mainframe to table top to lap top to now the level of fingertop! While this in itself revolutionized the way a firmworks, the advent of internet took the business intonew paradigm called E commerce. The underlyingwork of E commerce is,, it is virtual, labor displacingand minimal inventory.

The fall out of it in retailing is birth of ebay,Amazon.com, Flipkart etc that helps buyers to buyproducts without even stepping out their homes.Amazon .com, the world’s leading book store, has nobooks, no book shelves and teen girls behind thecounters. It is technology led and employees wherethere to ensure that servers are not down and queriesbeing answered. This on the one side kept labor veryminimum and with higher level of literacy. Electronicfund transfer made purchase easy and logisticsmanagement made home delivery faster and cheaper.As the firms saw the benefit of the technology, theytook to shop floor by way of out sourcing thecomponents, computer control robotics.

Historically when industrial economy came in,firms believed in vertical integration due to:

1. Cheap labor availability

2. Better value chain management

The concept of competitive advantage then was,use labor in mass production of standardizedproducts. Division of labor with IndustrialEngineering (IE) , removed non value addedmovements of labor, improving productivity on theone side and ensured quality consistency due to risein dexterity on the other. TU rigidity put the thingsthe other way around world over and US autoindustry was a case in point. As price competivenessis one element in value chain, many firms laterconfined its activity to branding and marketingleaving the production to a third party. The Detroitmajor Ford that once had steel plant and even the ironore mine to be a vertically integrated firm, now doonly styling, design and assembly. It means that

thrust on virtualization went high and brick andmortar focus moved into intangibles like brand,market capitalization and supply chain.

After World War II, all nations believed thatindustrialization was the way to move forward andregulatory economy kept the market attention fullydomestic and Public Sector Units were seen as jobgenerators. India too believed as the rest of the worldand firms like Steel authority of India (SAIL), NeyveliLignite Corporation (NLC) et al sprang up underPundit Nehru. It is around this time many nationscame out of UK colony and democracy principle tookcentre stage. Republic nations since hoped of selfgovernance, parties sprang up and vote bank politicscame in. Labor laws were pro- labor and strengthenedTUs. In India till 1990, licensing and regulations ruledthe roost resulting in monopoly in many productcategories, helping unions to arm twist themanagements. Power was in favor of workers asdemand out striped supply and two wheelerbusinesses in India, where waiting time to takedelivery is the norm. But James F Moore in his awardwinning HBR article Predators and Prey says “Maintaining bargaining power by controlling keyelements of value” even when creating a businessecological system and so in collective bargaining(Moore,1993) . TU used collective employee strengthin collective bargaining and products enjoyeddemand, settlement raised pay withoutcommensurate rise in productivity. As the economywas in demand driven situation , norm wasprofiteering than the norm of profit. But for the PSUspresence, core sector like steel, cement would haveput the consumers into enormous hardship and infew cases like sugar, drugs price control prevailedpreventing market exploitation. Local marketconcentration and inward looking governmentpolicies helped the firms than consumers. Most firmsserved the employee interest than other stake holderslike share holders, customers etc., Quality in productsremained elusive and After- sale - service beingnonexistent , market in a nut shell was in utterdisarray. Industrial Relations is reactive thanproactive built on collective bargaining. Transparencysince seen as profit destroyer, firms took lobbying tothe hilt and IR was a function of collective barragingpower than business reality. License raj helped firmscontrolling the market albeit through cartelization,cost became the least concern. Many durables likebikes and cars, one had to wait for years and after-sale- service is seen as a luxury. Price was less than


21Human Resources Management and its Influence on Industrial Relation

value for money and quality is outside Indian firmlexicon! As all bad things in a society comes an end,market was no exception. Controlled economy keptproduct quality abysmal, scale being unviable anddevoid of foreign exchange earnings (forex). In 1991,our forex was just sufficient for 15 days of oil import-the compulsion to turn the economy into marketdriven economy arrived. After all the thrust ofliberalization are de-licensing and de- regulation.

Liberalization being a key to go global andachieving globalization of brands, economy had to beopened up letting all to enter on the strength of thevalue proposition of the output. Globalization becamethe buzz word everywhere and inside the firm themantra is HRM. To take on the world, employeeswere seen as a strategic resource and HRM is one wayto manage the other resources like capital, technology,time and information.

The paradigm shift of seeing employees as aresource than a mere a factor of production meantthat instead of TUs championing their cause, firmsthemselves took it on to themselves. Technology grewwell in production like just in time, concurrenttechnology, flexible manufacturing, and robotics, allleading to rise in job intellectualness with white collarand blue collar divide blurring. As educationempowers people in normal sense, its relevance in TUis no exception. Emmott claimed that in an era wherecollective institutions were in decline, a turn towardsan individualistic management of the employmentrelationship was necessary and inevitable.(Emmott,2005). Unions were and today too arecompelled to fight for job protection than Job relatedbenefits like production incentive , bonus etc.,Collective bargaining became productivity gainsharing and the concept of counter demand is theorder now.

HRM frame work when done well, benefits theemployees in areas like PA, QL and QWL.Interestingly the first stratified motivation by Maslowtoo covered all the three above. When formalorganization like welfare function, IR department arecommitted to HRM, TU intervention is mere aduplication. Wood (1986) describes the changes thathad taken place in the society, such as “the declinein union membership, the declining role of collectivebargaining, the conscious attempt to undermine

Trade Unions, the increasing importance of ‘high tech’industries and Greenfield sites, the increasing needfor a ‘responsible flexible’ worker”, and in theworkplace, through the implementation of HRMpolicies such as “gain-saving schemes, profit-sharingand fragmented bargaining”, and the “increasing useof co-operative strategies” In fact , the trend is nounion firms and Tata Consultancy Services, Wipro,Infosys are the standing testimony to it.

Conclusion

Brick work is being replaced by network. Furthertangibles like people, product and money have givenway for intangibles like Knowledge, brand andmarket capitalization. When the intangibles aregrowing, people who create it, has to grow by rule.As management and unionized staff share commoninterests, the appearance of conflict is uncalled for,caused by inefficient management and inadequatecommunication. TU stake is only its reputation andphilosophy but for the people, it is his or her career,family and self esteem. As people are accepted as astrategic resource, formal organization can onlyhandle better since after all union is a flat structurebuilt on charisma and emotions.

References

• Emmott M. (2005) what is Employee Relations?CIPD Change Agenda, p. 20. London.

• ‘Industrial Relations System’ Concept as a Basisfor Theory in Industrial Relations’. British Journalof Industrial Relations, 13: 291-308.

• James F Moore (1993).’The Predators and thePrey: A New ecology of competition’ .TheHarvard Business Review, p-80.

• Moore, James; Curry, Shree R (1996).’The Deathof Competition’Vol.133, Issue.7,P-142.

• Whyte W. F. (1987). ‘From Human Relations toOrganizational Behavior: Reflections on theChanging Scene’. Industrial & Labor RelationsReview, 40: 487-500.

• Wood S., Wagner A., Armstrong E. G. A.,Goodman J. F. B., Davis J. E. (1975). ‘The


22 Parul Behl

NEWS ANALYTICS: A LITERATURE REVIEW

Abstract: In this paper importance of news analytics has been examined.News is generally in the textual form which is hard to quantify. Thereforethe techniques of news analytics have been devised to convert qualitativeinformation in the form that is quantifiable. As a part of news analytics,analyst’s recommendation has been considered.

Parul Behl*

*Parul Behl, Research Scholar, Department of Commerce, Delhi School of Economics, University of Delhi

Introduction

News analysis is an area which measuresqualitative and quantitative attributes of textual

news stories. Textual news is qualitative data and inthe non numeric form. It contains information aboutthe effect of the event and its possible causes. Since itis concerned with the returns, therefore it needs to beprocessed carefully. In finance it refers to the use ofalgorithm in order to process news. Researchers areinterested in news analysis to predict stock pricemovements, volatility and traded volume. However,extracting this information in a form that can beapplied to investment decision making process ischallenging, since news is generally in the form ofquantitative form and non numeric which is difficultto quantify.

With the increase in volume and sources ofinformation, investors and traders, select and analyzenews so as to make timely and good decisions.Traders, speculators and private investors analysefinancial news to anticipate the direction of assetreturn, their size and the level of uncertainty beforemaking any investment decision. News updates theinvestors’ understanding and knowledge andultimately affects the market sentiment. News articlesare considered as important because theycommunicate stock market information to the massesand they directly affect the demand supplyequilibrium of the market.

News may take various forms such as:

• Main news: It is the mainstream media thatis broadcasted via newspapers, radio andtelevision.

• Pre news: They are the sources thatresearchers research before writing any newsarticle. It comes from sources such asSecurities and Exchange Commission reportsand filings etc. It may also includeannouncements such as company earningsreport, macroeconomic news and othercorporate news.

• Rumours: They are generally less reputableand are in the form of blogs. There qualitymay vary significantly.

• Social media: In terms of reputation they fallat the lowest end. They can be published veryeasily. They are generally inaccurate sourcesof information.

Generally individual investors pay more attentionto rumours and social media rather than institutionalinvestors.

News can be of two types:

• Accounting related news (earnings statement,trading updates, financial statementinformation)


23News Analytics: A Literature Review

• Strategic news (joint venture, strategicalliance, broker conferences)

Review of Literature

Alexander D. Healy and Andrew W. (2011)studied that most difficult challenge is to manageevent risk, being posed by unanticipated news thatcauses major market moves over short time intervals.Here framework consists of real time event indices,taking on numerical values between 0 and 100,designed to capture the occurrence of unusual eventsof a particular kind. Examples include terrorist eventslike September 11, 2011.One initiative called,Thompson Reuters News scope, is integratedframework for incorporating real time news intosystematic investment and risk managementprotocols aims at solving this problem. Informationneeded for real time investment decision reachestraders through a multitude of news sources such asThomson Reuters, Bloomberg, and CNN. Data consistof interbank quotes for 45 currency pairs fromJanuary 1, 2003 through July 31, 2007. Preliminaryanalysis of the news scope historical dataset revealsstrong seasonality on intraweek and intradaytimescales as expected. Since event studies role is torapidly identify and report the arrival of market .Hereevent indices were to be calibrated against foreignexchange markets, for the data of interbank quotes for45 currency pairs since January 1, 2003.

Methodology

To establish the empirical significance of ournews indices, event study methodology is performed.Event was declared to take place whenever the scoreexceeds a certain threshold, typically 0.995.In thisanalysis the focus was on two time series describingthe behaviour of exchange rates in the periods beforeand after these events. The first is the time series oflog returns, denoted (ri). This series is derived bytaking the algorithm of the geometric mean of bid andask quotes. The second time series is that ofdeseasonalised squared log returns, denoted (si)which is a measure of volatility in exchange rates.This volatility measure considers only excess volatilityover typical seasonal volatility. Conclusion was thatthe Thomson Reuter’s news scope event indicesprovide a convenient and powerful translation ofqualitative information to quantitative signals usingThomson Reuter’s news scope calibrated to foreignexchange spot data. The significance of the indicated

market impact was verified using econometric eventstudies.

Marion Munz (2011) analyses in their study thatnews that carries material information affects thesentiments regarding the earnings multiple as itrelates to stock prices. There is little doubt that newsis very critical for the value of stock price of a publiclytraded company. News communicates criticalinformation to the public which is very difficult toquantify. News media sentiment has become anecessity where million of investors are able to tradeeasily from anywhere just by pressing a ‘submit’button and where news articles move at the speed ofthe electron, reaching million of investor instantly. Fordecades ,investors have been told that that long terminvestment are serious investments and that daytraders are just after get –rich –quick schemes, notsomething that a professional investor could everconsider. Stock market crash of 2008 became the mostpowerful recession of our life time. This shows thathow fragile the stock market readily is. Simpleexplanation to that is: “The supply of stock farexceeded the demand for stocks, because stock marketis a market and the markets main functioning rule isdemand and supply. For every seller there has to bea buyer. If more sellers than buyers come into themarket, stock prices react negatively. If panic settlesin, one can assure that lot more sellers will jump intothe market with the potential to crash it. If theeconomy is booming, investors too want to tap intothe newly created wealth and buy orders abound.Stock market booms or busts become a direct measureof the stock market sentiment. The value of the stockprice of any business is influenced by the investors’expectations of the future earnings of that particularbusiness. News about a company’s business has thepotential to change the demand supply balance andaffect any stock price. Sometimes lack of news maybe perceived as ‘negative news. Media sentiment hasdeveloped a technology that can make a rapidassessment of the sentiment expressed bymanagement in an earnings news release. The systemcorrelation that information with estimates from WallStreet analysts and overbought oversold signals of thetrading market which allows profitable tradingopportunities to be discovered. Media sentiment canadd considerable value to the decision makingprocess for traders and investors alike. It was seenthat all news is not created equal and a thoroughunderstanding of news landscape is highlyrecommended as there are laws that regulate the


24 Parul Behl

handling of material information with serious legalimplications. Media sentiment adds value byimproving the speed and accuracy of sentimentdetermination for a bigger number of news releasesof publicly traded companies in the USA.

Peter Ager Hafez (2011) accepted that financialnews moves stock prices either through direct impacton company’s expected future cash flows .Newsbased trading has a long history of being part ofinvestment decision making, only in recent years hasit been possible to test ‘quantitatively’ the impact ofnews events on individual stock prices or markets.Extensive research has shown that news, particularlystories conveying sentiment can add value in bothhigh and low frequency trading and investmentstrategies- improving the prediction of price direction,volatility and trading volume.

Methodology

Applying structured news data or news analyticsin a trading model allows for the possibility to notonly react in real time to scheduled and unschedulednews events in a fully or semi –automated fashion ,but also to consider the prevailing sentiment trend ona given market.

A methodology was presented on how toconstruct market and sector sentiment indexes thatwere used as a part of a directional sector rotationtype strategy. Indexes were based on counts ofpositive and negative sentiment news stories thatwere considered to be highly relevant to one of theindex constituents. Only that news is included whichis contextually relevant to the companies in the S&P500 i.e. where a company has been detected to beplaying a prominent role in the news story and hasbeen involved in some type of categorized event (e.g.:earnings announcement, analyst rating etc). Thefollowing model has been used:

Where, u represents universe of companies,constituted of S&P 500 equity index. ‘c’ be a company.‘p’ be the time period. Every record Pn has an eventsentiment score and an event novelty score of100. m=|Pn|.

It was concluded that considering the relevanceand impact of different company events is animportant element when constructing market and

industry sentiment indexes. It was found that marketlevel sentiment strategies significantly outperform 1month price momentum with information ratios of1.75 vs 0.40 and annualized returns of 26.5% vs 6.8%.Beyond capturing market level sentiment, industrylevel sentiment indexes using multiple newsclassifiers which provide diversity and moresentiment data are calculated. It was also shown thatbeyond using market level news sentiment to investin the S&P500, it is possible to enhance a marketstrategy by taking long and short positions in the topand bottom ranked industries when the generalmarket sentiment index is positive and negativerespectively.

David Leinweber and Jacob Sisk (2011) analyzedin their study that news analytics measure therelevance, sentiment, novelty and volume of news.When a strategy becomes known and used by toomany players, the collective market impact of gettingin and out squeezes out all profits and only the lowestcost transactors will be able to use it. They have useddata from the Thomson Reuters News ScopeSentiment Engine. It has broad coverage of over 7000US stocks, which is adequate for their test ofcontemporaneous S&P 1500 stocks over the period fora period of 2003-2008. Remarkable growth in scope,depth and volume of news has been evidenced. Eventstudy has been used here as a means of systematicscreening for interesting relationships between eventsdefined using news analytics built using RNSE data.Thresholds are based on news intensity, relevance,sentiment scores and novelty and type of items. Thestudy is done on a daily timescale. The return intervalexamined extends out to 60 days. These studies arebased on “pure signals”.

An interesting question is to investigate using theevent study explorer is the relationship between firmcapitalization and the response to news. A reasonableprior is that smaller capitalization firms with lessintensive news coverage would show greaterresponse to extreme sentiment news events. It wassummarized that there is exploitable alpha in news.News analytics produce results superior to naïve“buy on the good news, sell on bad” strategies. Thisis shown on both event studies and historical portfoliosimulation. A research group at Deutsche Bankreported on a similar approach to equity portfoliomanagement. They evaluated news strategiesseparately and in the context of a variety of quantapproaches. Pure news portfolio simulations includedin the Deutshe Bank work show positive results



similar to this study, reflecting improvements in newsprocessing in recent years.

Brad M. Barber and Terrance Odeon (2011)studied that attention is a scarce resource When thereare many alternatives, choices that attract attentionare more likely to be chosen. In this paper propositionis that individual investors are more likely to buy,rather than sell, those stocks that catch their attentionis tested. This is because attention affects buyingbehaviour more than selling. Investors face a hugesearch problem, when choosing which commonstocks to buy, because there are thousands ofpossibilities. But while selling obviously only thosestocks can be considered which they already own.Individual investors are more likely to buy attentiongrabbing stocks than to sell them. In contrastinstitutional investors search is more symmetricalbecause they hold large portfolios from which to selland they often sell short. Proxies for whom stockscatch investor’s attention are:

1. Daily abnormal trading volume2. Daily returns3. Daily news

Individual investors are net purchasers of stocksthat experience high abnormal trading volume, daysfollowing extreme price moves, and days on whichstocks are in the news whereas institutional investorsare more likely to be net buyers on day with lowabnormal trading volume than on those with highabnormal trading volume and their reaction toextreme price moves depends on their investmentstyle. In this study it has been evidenced that thecollective tendency of individual investors to moreaggressively buy than sell attention grabbing stockleads to poor returns for aggressively purchasedstocks. Investors can always weigh the merits of alimited number of stocks only. Generally informedinvestors observe the same signal whether they aredeciding to buy or to sell. They are equally likely tosell securities with negative signals as they are to buythose with positive signals. Uninformed noise tradersare equally likely to sell securities with negativesignals as they are to buy those with positive signals.Humans have bounded rationality i.e. there are limitsto how much information we can process. Since theextent to which stock grabs the investors’ attentioncan’t be measured directly, it is done indirectly byfocusing on three observable measures like news,unusual trading volume and extreme returns.However none of them is perfect proxy for attention.

All news stories are not treated equal. E.g. reportingof indictment of fortune 500 CEO will attract attentionof millions of investors, while a routine press releasemay be noticed by few. The impact of different newsstories is observed by their effects on trading volumeand returns. Trading volume is likely to be greaterthan usual when news about a firm reaches manyinvestors. Significant news will affect investors’ beliefsand portfolios goals, resulting in more investortrading than usual. In this study data is drawn fromfollowing sources: a large discount brokerage, a smalldiscount brokerage, a large full service brokerage,plexus group.

Methodology

Sort methodology has been used here stocks aresorted on the basis of abnormal trading volume whichis done by calculating for each stock on each tradingday the ratio of the stock’s trading volume that dayto its average trading volume over the previous year.For each day stocks are sorted into deciles on the basisof that day’s abnormal trading volume. Then for eachinvestor, we sum the buy-sell imbalance for purchasesand sales executed that day as:

For each partition and investor groupcombination, we construct a time series of daily buy–sell imbalances. Their inferences are based on themean and standard deviation of the time series. It wasconcluded that individual investors display attentiondriven buying behaviour. They are net buyers on highvolume days, following both extremely negative andpositive 1 day return, and when stocks are in thenews. Institutional investors in our sample –especially the value strategy investors- don’t displayattention driven buying.

Andy M et al (2011) analyzed that news flowbased strategies can add value to investors . Thosethat react quickly benefit from the short termmomentum following particular news items and gainan information advantage by incorporating news flowahead of analyst revisions. Equity analysts play animportant role in collecting and processing companyinformation and disseminating this to investors. Thevalue contained in earnings forecast is attributed toanalyst’s abilities to gather information from a varietyof sources and process it in a timely manner togenerate superior forecasts. The literature points to


26 Parul Behl

both the market and analyst misreaction to newinformation due to delayed information diffusion,investor inattention and investor’s limited ability toprocess information instantaneously. The majority ofour quantitative research focuses on companiesreported balance sheet or P&L data and sell sideanalysts estimates. It is only recently that we havebeen able to go beyond this to understand themotivations behind corporates and fundamentalanalysts’ decisions by looking at higher frequencynews flow datasets. Newsvendors collect andtranslate headlines and text from sources rangingfrom electronic newswires, newspapers andmagazines and analyze the sentiment of stories withinmilliseconds of news release. News is defined bylooking beyond earnings announcements andconsiders a variety of types of news as the release ofinformation to the market. There are two kinds ofnews: accounting and strategic news. Accountingnews enables analysts to form an expectation of newsin advance of the announcement whereas strategicinformation takes longer for analysts and the marketto decipher the information content.Data setcomprises of sample of 90,000 news announcementsfrom January 2001 onwards for companies withinS&P. Majority of news items relate to companyearnings news or guidance with the remainderequally split across other news categories. It was alsofound that lower incidence of news was reported onFridays compared with the Tuesdays and Thursdays.Also some firms tend to release bad news after theclose of trading on Fridays due to lower investorattention. The coverage of news is an increasingfunction of the size of the company, since larger andmore liquid companies are more likely to be in media.It was found in this study that there is no serialcorrelation in corporate news. Companies are equallylikely to report good and bad news going forward.Using Statistical techniques, models have been builtthat forecast the direction of company and industryearnings. It was seen that news flow datasets enablesystematic investors to bridge the gap between thetwo.

John Kittrell (2011) focused in their study thatmedia effect is one of the better known empiricalresults connecting news and stock returns : companieswith no media coverage outperform companies withhigh media coverage. Event study methodology hasbeen used here. In this, firstly, news sentiment relativeto companies must be measured in a meaningful way.Then, they attempted to discern sentiment related

events in the life of a company that might signal atemporary misevaluation of its stock. The event of asentiment reversal is identified via the net newssentiment metric. The idea was that an extensiveperiod of negative news coverage around a companycauses downward pressure on its stock price, andwhen the negativity has sufficiently subsided there isvalue to be unlocked on the long side. Monte Carlosimulations are implemented for concentratedportfolios of sentiment reversals.To aid the studyDJNA (Dow Jones News Analytics) has constructedan archive, which comprises of millions of financialnews stories. It was demonstrated that newssentiment can be used to obtain long term positiveexcess returns. In this case there is much room forrefinement. Monte Carlo simulations show that excessreturns are not uniformly distributed through time.Companies descending from an extended period ofpositive net news sentiment are good shortcandidates. If negative to positive reversals createmore opportunities while the market is going down.One might reasonably expect such a combinedstrategy to distribute the expected out performanceas sentiment reversals equally over different marketsituations.

Dan di Bartolomeo (2011) analyzed that news isinformation that describes how the state of the worldis somehow different than it usually is. Byincorporating news into our formal models, we canrecognize, understand and respond to the periods ofheightened risks. For measuring risks we will usesymmetric measures such as expected standarddeviation of asset return, some measure of potentialloss such as conditional “value at risk”. Riskassessment models have traditionally focused onestimating portfolio risk from security covarianceover time horizons of a year or more which issustainable for long term investors such as pensionfunds. The recent proliferation of high frequencytrading and algorithm execution method has createddemand for very short horizon risk assessment inwhich the analytical evaluation of news play animportant role. Event study methodology has beenused and the challenge of running long term eventstudies is how to control for the release of subsequentnews items which may or may not be in the samedirection. In this study focus was on the short termreaction to news. Returns were sorted into threegroups and news flow is categorized either aspositive, negative or marginal news to avoid reactingon every reported news item or focus on the major



news releases. After that returns were measured over2-5 and 5-10days post the announcement. Resultshowed that investors reacted strongly to earningsannouncement and guidance news, which is notunsurprising as investors focus more on these newsitems when making their assessments. There ishierarchy to news citations, with earnings relatednews having a larger impact. It was also observed thatfollowing positive news, trading volumes aresignificantly higher for earnings and M&A relatednews. Business cycles also affect the dominance ofnews items only the actions of the analysts wereobserved, rather than motive behind analyst’sactions.In this case strategy was to buy companieswith positive returns around news events, sell thosewith negative returns and ignore companies whichare considered to have neutral news flow. Pricechanges arise due to an imbalance between thenumber of willing buyers and the number of willingsellers. Financial markets are driven by the arrival ofinformation in the form of news and in the form ofannouncements that are anticipated with respect tocontent.

Michael Dzielinski et al (2011) analyzed thatprivate investors generally overreact to bad news.Increase in bad attention to negative news can predicta subsequent increase in volatility. When prices drop,volatility increases .this was evidenced during recentcrisis where following stock market drops, volatilityreached record values. This study shows that marketwith many financial analysts show higher volatilityafter downturn the result suggested that privateinvestors react nervously to bad news, which leadsto observed asymmetry in volatility. Increasedvolatility while market prices drop is referred to asvolatility asymmetry. The study shows that volatilityasymmetry is most pronounced in highly developedmarkets and in particular, in markets with higherparticipation of private investors.

This study discusses volatility of the S&P 500increases after an increase in the number of Googlesearches for specific keywords related to macroeconomy like recession.

In this study, we study a wide range of marketsfor a long time period; the asymmetric powerGARCH (APARCH) with asymmetric t-distributionis used. The following specification of the APARCHmodel has been used:

Where,

α, γ, β, δ Are the APARCH parameters to beestimated?

It was proposed that news tends to be asymmetricas well. The media predominantly report bad news.A large number of bad news items leads tooverreaction of private investors increasing volatility,thus a larger proportion of private and on average lesssophisticated investors on the market increasesvolatility symmetry as well. It was also seen that timeswith high volatility coincide with times where manyinvestors trade on he market.

Chaudhary Kapil and Bajaj Sushil (2010)conducted this study to examine the value of analystsservices for investors and explore the presence ofannouncement effects of their recommendations onthe stock market return behavior. The issue underinvestigation is then is, if analysts’ recommendationsmade publicly available, do actually benefit investorsby creating significant excess returns. Academictheory is clearly at odds regarding this issue.Investing the effectiveness of analyst’srecommendations represents a more powerful test ofthe validity of the semi strong form of the efficientmarket hypothesis. This research is useful for bothfinancial academics and practitioners. From academicperspective, the study contributes to a betterunderstanding of hoe analysts evaluate stocks, andtheir role in the price formation process. Frominvestors’ perspective, this research enhancesunderstanding of the usefulness of analystrecommendations in investment decision.

In this study the information regarding stockrecommendation is gathered from the electronicpaper version of the Economic Times. They havegathered 222 buy recommendations over the periodJuly 2005 to December 2007.

Methodology

The present study employed event studymethodology to examine the effects of analysts’recommendations on stocks’ returns by using dailyadjusted closing prices for the sample stock for 240days before and 30 days after the recommendationpublic date. The secondary data is collected fromwww.etinelligence.com and necessary share pricedata and the value of Cnx nifty are obtained fromwww.nseindia.com


28 Parul Behl

Stock recommendation date is considered as anevent and an event window period of 61 days is usedi.e. 30 days before and 30 days after the event day.An estimation period of 240 to -31 days is used forcomputing the expected returns using the marketmodel given by the following equation:

Rit = αi + βiRm + εit

In order to examine the investment performanceassociated with these analysts’ recommendations weconsider holding period of one month, three months,six months and one year.The present study could notgenerate the evidence of an announcement effectassociated with equity analysts’ recommendations inIndia. Overall, the study provides no reliable evidenceof performance for equity analysts and brokeragehouse stock recommendations in Indian capitalmarket.

Frino Alex et al (2009) examined the impact oftrade characteristics on stock return volatility. Usinga sample of transaction data from the Australian StockExchange, the trading frequency of medium sizedtrades is found to have the greatest impact on stockreturn volatility. The result lends support to thestealth trading hypothesis (Barclay and Warner, 1993).After controlling for trading frequency, the averagetrade size is found to have little explanatory poweron price volatility. Stock return volatility is moresensitive to buyer-initiated trades than seller-initiatedtrades, especially so for buyer-initiated medium sizedtrades.

The data used in this study are provided by theSurveillance division of the ASX.The dataset containstrade and quote records for all ASX stocks, which areextracted from the Stock Exchange AutomatedTrading System (SEATS) database over the sampleperiod from January 1996 to December 2001.5) Theserecords provide details of price, volume, time and thetrade direction of every order and trade. The initialsample of stocks considered for analysis included allASX stocks that were constituents of the AllOrdinaries Index as of 31 December 2001.8) Excludedfrom this sample were stocks that had missingobservations on normal trading days across the entiresample period. Also excluded from analysis were off-market trades and those that were triggered by themarket opening and closing call auctions. Theseexclusions produce a final sample of 438 ASX stocksfor analysis.

Methodology

To provide a cross-sectional analysis of thevolatility-volume relation, a two step procedure isperformed as follows:

1) The sampled securities are partitioned intothree ‘stock size groups’ based on theirmarket capitalization as of 31 December 2001.Group 1 contains large capitalization stocksin the ASX/S&P100 index (i.e., 87 sampledstocks); Group 2 contains mediumcapitalization stocks that are outside Group1 and within the ASX/S&P 300 index (i.e., 149sampled stocks); and Group 3 contains thesmaller capitalization stocks outside Group 2and within the All Ordinaries Index.

2) A ‘trade size’ classification rule is developedand utilized to divide transactions for eachsample stock into small, medium and large.

A finer-tuned analysis of the volatility-volumerelation is undertaken using several regressionmodels. To measure daily volatility, a proceduresimilar to Schwert (1990) and Jones et al. (1994) isemployed. For each stock, daily price volatility isestimated from the absolute residuals of the followingmodel:

where , Ri,t is the daily closing mid point returnof stock i on day t, and Dk,t’s (k = 1, 2,..5)

This study examines trade characteristics thatdrive stock return volatility for 438 stocks traded onthe Australian Stock Exchange (ASX) over the six yearperiod from January 1996 to December 2001. Tradescharacteristics such as trading frequency, trade sizeand trade direction (i.e., buyer-and seller-initiatedtrades) are examined. More future research in thisarea across different stock exchanges is encouragedto confirm the findings of this study and the otherlimited few that have largely concentrated theirexamination on US stock exchanges.

Wesley S. Chan (2003) examined monthly returnsfollowing public news. He compared them to stockswith similar returns, but no identifiable public news.There is a difference between the two sets. He findsstrong drift after bad news. Investors seem to reactslowly to this information. I also find reversal after



extreme price movements unaccompanied by publicnews. Using a database of stories about companiesfrom major news sources, he looked at monthly stockreturns after two sources of stimuli. The first is publicnews, which is identifiable from headlines andextreme concurrent monthly returns. The second islarge price movements unaccompanied by anyidentifiable news. Each month, he formed portfoliosof stocks by each source, and follow momentumtrading strategies. He examined if there is subsequentdrift or reversal, against the alternative of noabnormal returns. I find that stocks with news exhibitmomentum, while stocks without news do not.

In particular, stocks with bad public news displaya negative drift for up to 12 months. Less drift isfound for stocks with good news. I interpret this tomean that prices are slow to reflect bad public news.Furthermore, stocks that had no news stories in theevent month tend to reverse in the subsequent month.The reversal is statistically significant, even aftercontrolling for size and book-to-market. This isconsistent with investor overreaction to spurious pricemovements. He also finds that the effects diminish,but are present, when one eliminates low pricedstocks and are stronger among smaller, more illiquidstocks than larger ones. A possible explanation is thatsome investors are slow to react to information, andtransaction costs prevent arbitrageurs fromeliminating the lag. The fact that most drift occursafter low returns reinforces this view, since shortingstocks is more expensive than buying them. He alsoshows that most bad news drifts occur in subsequentmonths without earnings announcements.

The results were that investors are slow torespond to valid information, causing drift. Second,investors overreact to price shocks, causing excesstrading volume and volatility and leading to reversal.The results are also consistent with a richer set oftheories (detailed below) that try to explain short-rununder reaction and long-run overreaction in terms ofinvestor behavior.

Methodology

To summarize his approach, he collected allstocks in a given month that had at least one newsstory. He ranked all such stocks by monthly rawreturns and selects the top and bottom terciles. Herefer to these two sets as ‘‘news winners’’ and ‘‘newslosers,’’ respectively. He then examined abnormalreturns for up to 36 months after the initial headline

month. To determine whether predictable drift orreversal occurs after pure price movements, herepeated the test above for ‘‘no-news’’ stocks, thosethat had no headline in a given month. He formedmonthly equal-weighted portfolios of the winner andloser stocks and interpret them as legs of a tradingstrategy. He calculated overlapping returns using astandard rolling-portfolio method as in Jegadeesh andTitman (1993) and Fama (1998). the time-seriesvariation of the monthly abnormal return on thisportfolio accurately captures the effects of thecorrelation of returns across event stocks missed bythe model for expected returns. The mean andvariance of the time series of abnormal portfolioreturns can be used to test the average monthlyresponse of the prices of event stocks for [fourmonths] following the event.To examine stock pricereactions to public news, he need to know wheninformation was released and he used the Dow JonesInteractive Publications Library of past newspapers,periodicals, and newswires. This database hasabstracts and articles from many sources, going backto before 1980. However, some sources are onlyavailable after being archived in electronic format. Toget around the problem of spotty data, he selectedonly those publications with over 500,000 currentsubscribers, daily publication, and stories availableover as much of the 1980 to 2000 period as possible.

Hence it was concluded that investors appear tounder react to public signals and overreact toperceived private signals. The stronger finding is forthe news stocks. This noteworthy result is moreunderstandable if one considers the possibility ofdifferent types of investors. Most of the drift is on thedownside among smaller, probably illiquid stocks.Furthermore, most negative drift happens over manymonths even without new information in the press.This supports the idea that more sophisticatedinvestors might not arbitrage away the pattern, sinceshorting is more expensive than buying. Thus, itappears that both bounded rationality and frictions,far from being minor factors in asset pricing, interactto create relatively long-lasting anomalies.

Jeffrey Hobbs, Tunde Kovacs, Vivek Sharma(2012) In this paper they investigated the relativeperformance of analysts’ recommendation changesbased on how frequently they revise a typicalrecommendation. There are at least three reasons tobelieve that analysts who differ by the frequency ofrevision may have differential profitability for


30 Parul Behl

investors. Analysts compare their own assessment ofa firm’s fundamental value with the market price andrevise their recommendation when they see asubstantial change relative to their outstandingrecommendation. It is possible that some analystshave better knowledge of the industry, more timelyaccess to management, suppliers, and customers, oralternatively are able to process publicly availableinformation more efficiently than others. We expectthat analysts with an advantage in information or skillare able to identify mis-valuation in stock prices moreoften, and thus revise their recommendations morefrequently. Therefore, trading on theirrecommendations will be more profitable to investorsin terms of exploiting short-term mispricing. Ourstudy examines whether the frequency ofrecommendation revisions relates to theirprofitability. We attempt to generate a profitabletrading strategy for investors by focusing onperformance differences at the analyst level. Thefindings herein could potentially help the ordinaryinvestor, who has limited time and resources and islikely to follow just one or a few analysts, identifysuperior performers from the universe of all sell sideanalysts based on a simple measurable yardstick offrequency of recommendation changes in the recentpast. Our study also contributes to the academicliterature by providing information about the sourcesof competitive advantage in sell-side equity research.They then explored some of the potential reasons forwhy frequently revising analysts yield greaterreturns. The source of this higher profitability could,for example, be an enhanced ability to interpretpublicly available information. However, they find nostatistical difference between frequently andinfrequently revising analysts in the percentage ofrecommendation changes that occur around earningsannouncements, and the difference in profitabilitybetween the two groups is not concentrated in thoserevisions that are made during earningsannouncement periods. Additionally, it is possiblethat frequently revising analysts respond morequickly to other information events proxied byabnormally large stock returns or trading volume.Thus it appears that those analysts who mostfrequently revise their recommendations do bettereven in the short-run; they do not outperform theircounterparts simply on the basis of quantity. Overall,our results suggest that at least part of the superiorprofitability of frequently revising analysts’recommendations derives from a better knowledge ofthe industry or companies they cover or from more

timely access to management, suppliers, andcustomers.

The analysts’ recommendations data are extractedfrom the Institutional Brokers’ Estimate System (IBES,hereafter) detail recommendation files for all U.S.firms with a Center for Research in Security Prices(CRSP, hereafter) share code of 10 or 11. Our sampleperiod begins in November, 1993, when the IBESrecommendation data file coverage commences, andends in 2006.

Abnormal return under the CAPM is computedas follows:

Additionally, an event study introduces thethorny issue of what types of information differentanalysts’ use; for example, it could be the case thatinfrequently revising analysts tend to use long-terminformation while short-term analysts use short-terminformation. By employing a maximum one yearholding period for each recommendation and anaggregate portfolio strategy they are able todetermine, over the long-run, which analysts are moreprofitable. P

Consistent with the empirical literature, they findpositive “alphas” subsequent to analystrecommendations, and also found that the analystswho most frequently change their recommendationsare the ones with the highest excess returns. Thus itappears that analysts in our first quintile are simplyable to identify mispriced stocks more often.

These robustness results suggest that thefrequency of recommendation revisions capturesincremental information ignored by current factorsknown to help and identify superior analystrecommendations. Results of the study suggested thatanalysts who revise their recommendations morefrequently are more responsive to the market and donot derive their advantage from firms’ earningsreports not derive their advantage from firms’earnings reports. A significant part of their overalladvantage lies in those revisions that

Follow unusual market activity. The results areconsistent with the hypothesis that at least part of thesuperior profitability of frequently revising analystscould be attributed to their superior skill inuncovering private information. It was concluded thatinvestors are better off, both in the short-run and in



the long-run, following the advice of analysts whomake revisions more frequently.

References

• Alexander, D., Healey and Andrew, W. (2011)“Managing real time risks and returns: The ThomsonReuters News scope Event Indices”. The handbookof News Analytics in Finance. John Wiley andSons Ltd.

• Antweiler W.; Frank M. (2005) “The market impactof corporate news stories”, working paper,University of British Columbia.

• Bangoli, M., Clement, M., Crawley, M., and S.Watts. (2009),”The Profitability of analysts’ stockrecommendation: What role does investor sentimentplay” [cited 2010 January 29].

• Barber,B., Odean, T., 2000, “Trading is hazardousto your wealth: the common stock investmentperformance of individual investors” J. Finance 55,773–806.

• Barber,B., Odean, T., 2008, “All that glitters: theeffect of attention and news on the buying behaviourof individual and institutional investors”. Rev.Financ. Stud. 21, 785–818.

• Bjerring, J.H., Lakonishok J., &Vermaelen T.(March 1983).”Stock Prices and Financial AnalystsRecommendations”. The Journal of FinanceVol.38 No.1, pp. 187-204.

• Brown, Lawrence D., ed., 2000, I/B/E/S ResearchBibliography, Sixth Edition, I/B/E/SInternational Incorporated.

• Brown, Stephen J., William N. Goetzmann andAlok Kumar. 1998. “The Dow The- ory. WilliamPeter Hamilton’s Track Record Reconsidered.” In: TheJournal of Fi- nance Vol. 53, No. 4: 1311-1333.

• Busse,J. and C. Green, 2002, “Market Efficiency inReal Time, Journal of Financial Economics”, Volume65, Issue 3, September, Pages 415-437.

• Chang, J, Khanna T and Palepu K, 2000, “Analystactivity around the World, Working Paper no. 01-061,Harvard Business School.

• Chan W.S. (2003) “Stock price reaction to news andno- news: Drift and reversal after headlines,” Journalof Financial Economics, 70 (2), 223-260

• Chakarbarti, Rajesh. (2003), “Should you bet onyour broker’s advice: A Study of analysts

recommendation in India” cited 2010 January29];online available from:http://papers.ssrn.com/sol3/papers.cfm?abstract_id=649844

• Cowles, A. 1933. “Can Stock market Forecastersforecast?” In: Econometrica Vol. 1: 309-324.

• Colker S. (Summer 1963). “An Analysis of SecurityRecommendations by Brokerage Houses.” QuarterlyReview of Economics and Business Vol.3, pp. 19-28.

• Daniel K.; Hirshleifer D.; Subrahmanyam A.(1998) “Investor psychology and security marketunder and over reactions,” Journal of Finance, 53,1839-1886.

• Davies, P.L. & Canes M. (1978 January). “StockPrices and the Publication of Second-HandInformation.” Journal of Business Vol.51, pp. 43-56.

• DeBondt W.F.M.; Thaler R. (1990) “Do securityanalysts overreact?” The American EconomicReview, 80 (2), paper presented at the Hundredand Second Annual Meeting of the AmericanEconomic association, May, pp. 52-57.

• Elton, J. Edwin, Martin J. Gruber, and SethGrossman, 1986, Discrete expectational data andportfolio performance, Journal of Finance, 41, 699-714.

• Fama, E.F. 1970. Efficient Capital Markets: AReview of Theory and Empirical Work, Journalof Finance, 25:383-417. headlines. Journal ofFinancial Economics 70, 223260.

• Fama, E. F., Fisher, L., Jensen, M. C. and Roll, R.(1969)The adjustment of stock prices to newinformation, International Economic Review, 10,pp. 1–21.

• Groth R., Lewellen W., Schlarbaum G., & RonaldLease. (1979 January- February). “An Analysis ofa Brokerage House Securities Recommendations.”Financial Analyst Journal Vol.35, pp.32-40

• Hong, H. and Kubik, J. D. (2003) Analyzing theanalysts: career concerns and biased earningsforecasts, The Journal of Finance, 58, pp. 313–351.

• Hobbs Jeffrey, Kovacs Tunde, Sharma Vivek(2012),” The investment value of the frequency ofanalyst recommendation changes for the ordinaryinvestor.” Journal of Empirical Finance, Volume 19,Issue 1, January 2012,Pages 94-108


32 Parul Behl

• James H. B., Lakonishok J, & Vermaelen T. (1983March). “Stock Prices and Financial Analysts’Recommendations”. The journal of finance,Vol.38 No. 1, pp. 187-204.

• Jung Boochun, Shane Philip B., Yang YanhuaSunny (2011),” Do financial analyst’s long termgrowth forecasts matter? Evidence from stockrecommendation and career outcome.” Journal ofAccounting and Economics, ; online availablefrom:http://www.sciencedirect.com/science/article/pii/S0165410111000905

• Patton A.J.; Verardo M. (2009)” Does beta movewith news? Firm specific information flows andlearning about profitability” (September).Available at SSRN: http://ssrn.com/abstract =1361813.

• Schuster, Thomas. (2003)”Fifty – fifty. StockRecommendation and stock prices. Effects and

benefits of investment advice in the BusinessMedia” [cited 2010, January 24]

• Schipper, K., 1991, Analysts’ forecasts,Accounting Horizons 5, 105-121.

• Tetlock P.C.; (2007) “Giving content to investorsentiment: The role of media in the stock market,”Journal of finance, 62, 1139-1168.

• Wesley S.C (2003). Stock price reaction to newsand no-news: drift and reversal afterheadlines.Journal of financial economics, 70,223-260.

• Womack, K. L., 1996. Do brokerage analystsrecommendations have investment value?Journalof Finance 51, 137167.

• Yan, X., Zhang, Z., 2009. Institutional investorsand equity returns: are short-term institutionsbetter informed? Rev. Financial Studies 22, 893–924.



FLUCTUATIONS IN STOCK PRICES OF INDIAN AUTOMOBILE INDUSTRY:DUE TO CORPORATE FINANCING VARIABLES

Abstract: Share investing is taking a risk and investors seek those financialmeasures that have significant impact on stock price. This paper attemptsto investigate the value of various Corporate Financing Variables on stockprices in the context of top Indian Automobile Industry. This paperdetermines whether Earnings per Share (EPS), Return on Assets (ROA)Dividend per Share (DPS) and Intrinsic Value (IV) have significantinfluence on stock prices of Indian Auto Industry. The study used 2013-2014 financial reports of top 5 Indian Auto Industry. The result of thisstudy shows Correlation between each Corporate Financing Variable withStock Prices. Impact concluded from this study shows Positive as well asnegative effect.

Index Terms: Stock price, Corporate Financing Variables, EPS,Correlation

Nikita Jain*

*Ms. Nikita Jain, Assistant Professor, Management Department, Ideal Institute of Management & Technology and School Of [email protected]

Introduction

The relevance of financial statement has alwaysbeen central focus for investors and for market

analysis to understand the key factors that explainstock prices. To understand the stock pricing strategytheoretical valuation technique is been used showingcorrelation between different variables and stockprices of various Indian Auto Industries.

Stock prices change as a result of market forces.By this we mean that share prices change becauseof supply and demand. If more people want to buy astock (demand) than sell it (supply), then the pricemoves up and vice-versa. The most important factorthat affects the value of a company is its earnings. Partof these earnings is distributed as dividends, whilethe remainder is retained by the company forreinvestment.

Different studies have been linked to financialvariables to stock prices showing correlation using

variables like:

• Earnings per Share (EPS),

• Return on Assets (ROA),

• Dividend per Share (DPS) and

• Intrinsic Value (IV)

To show their proximity in stock prices of IndianAuto Industry.

Some research works says that EPS is a significantpredictor to show impact of stock prices when thefirm consistently increases its EPS over a longerperiod of time. Various study says, many companiesdid not experience any increase in stock prices despiteincrease in their quarterly EPS. This suggests that EPSmay not be a good financial variable of stock price ona short-term basis. ROA is significantly expected tocorrelate with stock prices since it is part of Profits.


34 Ms. Nikita Jain

List of top 5 Indian Automobile Industries takenfor this research:

Table 1: list of top 5 Indian Automobile Industries

S.No. Top Indian Automobile Industries

1 Tata Motors Limited.

2 Mahindra & Mahindra Limited.

3 Maruti Suzuki India Limited.

4 Ashok Leyland Limited.

5 Hero Motocorp Limited.

Literature Review

Review of Literature shows the previous studiescarried out by the researchers in this field in order togain insight into extent of research. The researchstudy can be more specific and understandablereferring to theories, reports, records and informationmade in similar studies. This will provide theresearcher with the knowledge on what lines thestudy should proceed and serves to narrow theproblems.

J. Ohlson (1995): his research concentrated onlyon earnings as the value driver of share prices.Intrinsic value of equity as an additional variablestarted to gain prominence with residual incomeframework becoming indicator of value creator ofstock prices.

Skousen et al. (2007): says “A person or entityinvests in equity securities (stocks) of companies fora host of reasons. It may be for safety cushion, cyclicalcash needs, investment for a return, investment forinfluence, or purchase for control. Whatever thereason might be, an investor undertakes thoroughfinancial evaluation of the available options beforedeciding to invest in stocks of a particular company.This study focused on investment in stocks for areturn.”

Bouwman et al. (1995): says “Regardless of thevariables used to predict stock price or its returns, ifthe information is relevant, which means that itcontains something new, one should be able toobserve a reaction in the market. The usual marketreaction is a change in stock price in either directionor trading volume as the market incorporates the newinformation.”


A. Research Objective

The objective of this study is to examine the valueof each corporate financing variable viz. earning,dividend, assets in Indian Automobile Industry. Thisstudy is to understand relation between variousvariables and stock price and show their impact eitherin positive or negative way.

A primary objective of this study is to provideinformation that is fruitful to external users in makingcredit and investment decisions. Depending uponstock prices they will make investment decision as tobuy or sell.

B. Research Hypothesis

H1: Earning per share and Return on Assets influencestock prices of automobile company

H2: Dividend policy relevance is examined to be nullhypothesis as it is not greater than retainedearnings.

D1<RE1

H3: Intrinsic value is assumed same as Book value toconsider value of the company.

C. Research Data and Sample

The underlying study has Data of top 5 Indianautomobile industries whose variables details havebeen taken for year 2013-2014. One advantage ofyearly data is that financial statement errors are verymuch minimized in annual financial statementsbecause they are subject to audit. This also makes thedata less volatile and more reliable. Summary ofsample firms and corporate financing variables isshown in table below:

Table 2: Indian Automobile Industry and Corporatefinancing Variables.

Automobile Industries EPS DPS ROA IV

Tata Motors Ltd. 1.04 2.00 59.58 59.58

Mahindra & Mahindra Ltd. 54.61 14.00 272.63 238.75

Maruti Suzuki India Ltd. 79.19 8 615.03 615.03

Ashok Leyland Ltd. 1.63 .60 16.74 16.74

Hero Motocorp Ltd. 105.62 65.06 280.43 280.43


35Fluctuations in Stock Prices of Indian Automobile Industry: Due to Corporate Financing Variables

Table 3: Stock price of Indian Automobile Industries

Automobile Industries Stock Price(taken from

June’ 2014 @BSE)

Tata Motors Ltd. 476.00

Mahindra & Mahindra Ltd. 1183.60

Maruti Suzuki India Ltd. 2559.00

Ashok Leyland Ltd. 34.50

Hero Motocorp Ltd. 2447.45

D. Research Variables: EPS, DPS, ROA, IV

Earnings per Share (EPS): The portion of acompany’s profit allocated to each outstanding shareof common stock. Earnings per share serve as anindicator of a company’s profitability.

Calculated as:

Net Income – Dividends on Preferred Stock= ————————————————————

Average Outstanding Shares

Earnings per share are generally considered to bethe single most important variable in determining ashare’s price.

Dividend per share (DPS): The the sum ofdeclared dividends for every ordinary share issued.Dividend per share (DPS) is the total dividends paidout over an entire year (including interim dividendsbut not including special dividends) divided by thenumber of outstanding ordinary shares issued.

Return on Assets (ROA): An indicator of howprofitable a company is relative to its total assets.ROA gives an idea as to how efficient managementis at using its assets to generate earnings. Calculatedby dividing a company’s annual earnings by its totalassets, ROA is displayed as a percentage. Sometimesthis is referred to as “return on investment”.

The formula for return on assets is:

Net Income= ——————

Total Assets

Intrinsic Value (IV): The actual value of acompany or an asset based on an underlyingperception of its true value including all aspects of thebusiness, in terms of both tangible and intangiblefactors. value investors that follow fundamentalanalysis look at both qualitative (business model,

governance, target market factors etc.) andquantitative (ratios, financial statement analysis, etc.)aspects of a business to see if the business is currentlyout of favor with the market and is really worth muchmore than its current valuation.

Analysis & Results

As expected, corporate financing variables haveshown positive impact on stock prices of 5 Indianautomobile industries. In this study, analysis is beendone taking all 4 corporate financing variablestogether and showing their cumulative correlationwith stock price.

(Assumption: stock prices rate has been takententatively from June’2014 rate and of Bombay StockExchange (BSE))

Table 4: Correlation between Variables and StockPrice

Variables: EPS, DPS, Stock Price CorrelationROA & IV @BSE Degree

Tata Motors Ltd. 476.00 0.816063

Mahindra & Mahindra Ltd. 1183.60 0.866129

Maruti Suzuki India Ltd. 2559.00 0.838754

Ashok Leyland Ltd. 34.50 0.837304

Hero Motocorp Ltd. 2447.45 0.927887

Above table is followed by graph below: thisgraph explains comparison between correlations ofvarious Automobile industries.

Graph 1: Comparison in Correlation Degree ofIndian Automobile Industry


36 Ms. Nikita Jain

Interpretation: in this graph Tata Motors haslowest correlation with variables, as its EPS & DPS isquiet low as compare to running stock price. On otherhand, Correlation of Hero Motocorp is highest in allindustries because of its High EPS & DPS. MarutiSuzuki and Ashok Leyland both are same in spite ofquiet a difference between their EPS, it is due to thereason that Maruti Suzuki has high EPS & DPS andAshok Leyland has High ROA & IV.

Overall result says that corporate financeVariables and stock Prices of given IndianAutomobile Industries has Positive Impact, implyingas variables increases stock price of company willincrease automatically. They have direct relationship.

Recommendations

For investors, market analysts and academicians(professors and students), we recommend thecontinued use of EPS, DPS, ROA and IV as a predictorof share price. Other variables like solvency ratio,liquidity ratio, interest rate, inflation rate, volume ofshare transactions, and categorical variables like firmsize, nature of business, etc. should be used as well.Any combination of these variables may be made tocompete against each other to determine the best-fitmodel.

• Future researches on this topic should covera longer period and greater number ofrespondents if the researcher intends to usepanel or pooled data.

• Instead of share price, a researcher may useinstead stock return as the one of the variableto correlate with.

• For qualitative variables, dummies may beused to specifically capture unquantifiablefactors like nature of business, competitorsact, services provided by company.

• Colleges and universities should providestudents and faculty members alike withtools for extensive research endeavors.

• The study should be further conducted toestablish the value relevance of capitalstructure in Indian Automobile Sector.

Conclusions

The use of Corporate Financing Variables to

explain stock Prices in Indian Automobile Industrieshas been an important area for research globally. Thisresearch shows the extent to which variables caneffect fluctuations in stock price positively ornegatively. This study finds that Dividend Policy andInvestment Policy are value relevant to investorssignaling information regarding market structure.What this study had accomplished was to confirmthat EPS, DPS, ROA, and IV have significant impacton stock price. If we were to predict stock price giventhe model, we could assume that for every percentagechange in EPS, DPS, ROA and IV there would be anaverage increase in stock price.

The result of this study would benefit not onlythe investors and financial market analysts but alsothe professors and students in business and financecourses. The scope of this study will be furtherexamined in perspective of each variable correlationwith stock price of industries.

References

• Advances in Quantitative Analysis of Finance andAccounting.

• Higgins, H. & Lu, Q. 2009. Predicting stock priceby applying the residual income model andBayesian statistics.

• Higgins, H. & Lu, Q. (2009. Predicting stock priceby applying the residual income model andBayesian statistics. Advances in QuantitativeAnalysis of Finance and Accounting.

• O’Hara, T., Lazdowski, C., Moldovean, C. &Samuelson, S. 2000. Financial indicators of stockperformance. West Haven: American BusinessReview.

• Ohlson, J. 1995. Earnings, Book Values andDividends in Equity Valuation,” ContemporaryAccounting Research, pp.661-687.

• Sloan, R. G., 1996, “do stock prices fully reflectinformation in accurate and cash flows aboutfuture earnings,” The Accounting Review, Vol.71,pp. 289-315.

• ]http://www.moneycontrol.com/financials.

• ]http://www.investopedia.com

• http://business.mapsofindia.com/automobile/top-automobile-companies.html


37Fluctuations in Stock Prices of Indian Automobile Industry: Due to Corporate Financing Variables

CLOUD COMPUTING : THE FORECAST FOR ORGANIZATIONAL

CHANGE FROM HR PERSPECTIVE

Abstract: Cloud computing has made significant strides in terms ofpopularity and prevalence over the last few years. Today, businesses relyon this burgeoning technology to provide solutions across a variety offunctions. Cloud computing, however, covers such a wide variety ofinformation technology (IT) from the relatively simple to the extremelycomplex that many people find the term confusing. As more businessesmove their IT systems to the cloud to support rapid business modelinnovation, new services, and cost efficiencies, how are IT organizationsevolving? Cloud computing is a disruptive technology that is set to changehow IT systems are deployed because of its apparently cheap, simple andscalable nature. The dynamics of organizational climate and change willbe a huge challenge to be deal with for the HR professionals.

Sandeep Kumar*Deepak Kumar**

*Dr Sandeep Kumar, Professor, Deptt. of Management, Tecnia Institute of Advanced Studies, Delhi**Deepak Kumar, Research Scholar, Mewar University, Chittorgarh, Rajasthan.

Introduction

Cloud computing is undoubtedly one of the mostwidely discussed innovations of the last few

years. Both national and international growthpredictions are staggering and as a result everyorganization is asking itself, whether it should beconsidering Cloud computing. Cloud computing hasmade significant strides in terms of popularity andprevalence over the last few years. Today, businessesrely on this burgeoning technology to providesolutions across a variety of functions.

Cloud computing, however, covers such a widevariety of information technology (IT) from therelatively simple to the extremely complex that manypeople find the term confusing. It is not surprising,therefore, that when organizations seek to use Cloudcomputing there are many questions to consider andit is not always clear where to start. The adoption ofthe technology is expected to increase rapidly. In fact,industry experts predict that within a decade, amajority of employees will work within internet-based applications. Therefore, it is important for

organizations like yours to evaluate the impact cloudcomputing will make on your most important asset— your workforce.

Cloud Computing

There have been many official definitions ofCloud computing developed over the past number ofyears. The definition of Cloud computing thatunderpins this swift is that from National Institute ofStandards and Technology and ISO/IEC JTC. At abasic level Cloud computing is about usingcomputing services based in the internet (or theCloud) rather hosting them locally. In reality manypeople are already using Cloud computing ineveryday life without even realizing it. Services suchas e-mail, social networking, photo sharing, etc. areall forms of Cloud computing. From a businessperspective Cloud computing is essentially anevolution of managed services and outsourcearrangements that have been available for manyyears.


38 Dr Sandeep Kumar and Deepak Kumar

In a general sense Cloud computing can bedivided into three delivery models, four deploymentmodels and five essential characteristics as describedbelow. The characteristics of each are quite differentand therefore it is important to understand themwhen considering Cloud computing.

Delivery Models:

• Infrastructure as a Service (IaaS): as the namesuggests this is essentially the provision ofinfrastructure services or piping and plumbing(e.g. servers, storage, network, etc.) in theCloud.

• Platform as a Service (PaaS): under this model,as well as providing the underlying piping andplumbing the vendor also provides theapplication development platform fordevelopment of applications.

• Software as a Service (SaaS): probably the mostwell-known version of Cloud Computing; underthis model the vendor provides the entire suiteof services from the underlying piping andplumbing to the application itself.

Essential Characteristics:

• On-demand self-service: A consumer canunilaterally provision computing capabilities,such as server time and network storage, asneeded automatically without requiring humaninteraction with each service provider.

• Broad network access: Capabilities are availableover the network and accessed through standardmechanisms that promote use by heterogeneousthin or thick client platforms (e.g., mobile phones,tablets, laptops, and workstations).

• Resource pooling: The provider’s computingresources are pooled to serve multiple consumersusing a multi-tenant model, with differentphysical and virtual resources dynamicallyassigned and reassigned according to consumerdemand.

• Rapid elasticity: Capabilities can be elasticallyprovisioned and released, in some casesautomatically, to scale rapidly outward andinward commensurate with demand.

• Measured service: Cloud systems automaticallycontrol and optimize resource use by leveraging

a metering capability at some level of abstractionappropriate to the type of service (e.g., storage,processing, bandwidth, and active user accounts).

Deployment Models:

• Private Cloud: The Cloud infrastructure isoperated solely for an organization. It may bemanaged by the organization or a third party andmay exist on premise or off premise.

• Community Cloud: The Cloud infrastructure isshared by several organizations and supports aspecific community that has shared concerns (e.g.,mission, security requirements, policy, andcompliance considerations). It may be managedby the organization or a third party and may existon premise or off premise.

• Public Cloud: The Cloud infrastructure is madeavailable to the general public or a large industrygroup and is owned by an organization sellingCloud services.

• Hybrid Cloud: The Cloud infrastructure is acomposition of two or more Clouds (private,community, or public) that remain unique entitiesbut are bound together by standardized orproprietary technology that enables data andapplication portability (e.g., Cloud bursting).

Cloud Migration: Benefits

• Opportunity to manage income & outgoings:Introducing third party cloud infrastructuresolutions presents itself as an opportunity toimprove the management of income andoutgoings for both finance staff and customers.Third party cloud infrastructure solutionsfacilitate the easing of cash-flow management forfinance staff as the cloud pricing model hasminimal upfront cost and monthly billing, and italso minimizes variability of expenditure onelectricity. These are a benefit, in contrast to in-house data center, as upfront costs of buyinghardware are high and clients can be slow to pay,resulting in cash-flow difficulties. Additionallyenergy costs are a significant outgoing and byusing an external provider they would benefitfrom providers ability to negotiate whole-saleenergy prices. Third party cloud infrastructuresolutions also surface many opportunities formanaging income for customers, sales andmarketing staff, as new pricing models can be


39Cloud Computing : The Forecast for Organizational Change from HR Perspective

offered to them. This is a benefit, in contrast tointernal data centers which require a pricing tomodel comprising of a large upfront fee plusmonthly support costs (due to cash-flow issues),as customers can be offered more choice overhow they want pay or alternatively the financedepartment can choose to get the infra-structureoutsourcer to bill their customers directlyreducing the finance departments’ administrativeburden.

• Improved status: Introducing third party cloudinfrastructure solutions present an opportunityfor support management and support engineersto improve their status. Support managers canimprove their status in the organization bysuccessfully championing the high profilemigration that has strategic implications. This isa benefit to the support manager as by workingwith new and potentially prestigious technologyit may lead to career progression and increasedjob satisfaction. Support engineers would alsobenefit by improving their status within theirindustry by developing sought after cloudadministration skills and experience.

• Improve satisfaction of work: Third party cloudinfrastructure solutions present an opportunityfor support engineers, sales and marketing staffto improve the satisfaction of their work. It is anopportunity for support engineers to shedunsatisfying routine and potentially timeconsuming work such as performance ofhardware support, network support andswitching backup tapes as well as being offerednew challenges in terms of cloud administration.This is a benefit as support engineers can focuson more satisfying and value-adding work suchas resolving customers’ software supportrequests. This benefit is enabled by the switch tocloud- infrastructure as the third party cloudprovider would be responsible for the moreroutine maintenance. Technical developers couldalso benefit from the migration as they can beinvolved in systems support (e.g. performingregular system health checks), which aresometimes viewed as a chore. In smallorganizations, there is not usually a cleardistinction between the roles of systemadministrators and technical developers, anddifferent people have to be involved when thereis a problem. Third party cloud infrastructure

solutions present an opportunity for sales andmarketing staff to create new product/serviceofferings that better fit the customers need interms of scalability and cost effectiveness incontrast to an in-house data center. This is abenefit as this provides staff with a new andpotentially satisfying challenges that would nothave existed without the migration to cloud-infrastructure.

• Opportunity to develop new skills: Third partycloud infrastructure solutions present anopportunity for support managers, engineers,sales and marketing staff to develop new skills.For support managers and engineers it is anopportunity to develop new skills in cloudcomputing administration. This is a benefit as thesupport engineers will expand their existing skillsets and experience with knowledge of managinga technology that will be in demand throughoutthe IT industry for years to come. For sales andmarketing staff it presents an opportunity todevelop skills is product/service creation andlaunching. This is a benefit to sales and marketingstaff as it will expand their existing skill sets andexperience enabling their career progression.

• Opportunity for organizational growth: Thirdparty cloud infrastructure solution presents anopportunity for sales and marketing staff to createnew product/service offerings that may appeal toa larger market-share due to cloud-infrastructuresproperties of scalability and its cost effectivenessin contrast to an in-house data center. This is abenefit as it may facilitate sales staff meetingtargets by enabling them to target marketsegments previously not attracted by limitationsof scalability.

Cloud Migration: Risks

• Deterioration of customer care & service quality:Third party cloud infrastructure solutions presenta risk to customer care and overall service qualityfor support managers, support engineers andcustomer care staff. Support managers andengineers are at risk of becoming dependent upona cloud service provider which they have nocontrol over and at risk of requiring additionalresources to do the migration and deal with shortterm issues that arise subsequent to the migration(e.g. shortfalls in cloud operations knowledgeresulting in tasks taking temporarily longer to



complete). Support managers and engineersspecifically risk becoming dependent upon acloud service provider for resolving hardwareand network issues. This is a risk as it could resultin the deterioration of service quality that thesupport manager would not be able to control.Support managers also risk temporarily requiringmore resources to cope with migration and alsothe relative lack of knowledge and experienceheld by support staff regarding cloud systems.This is a risk because staff may initially requiremore time to perform the same tasks due tohaving to learn how-to perform tasks in the cloudenvironment which could compromise servicequality and customer service.

Customer care staff are also at risk of not beingable to offer the existing levels of customer serviceas it may take longer to resolve customer queriesas cooperation with external service providersmay become necessary. This is a risk becauseresponse times to deal with customer queries mayincrease resulting in back-logs and cascades ofadditional work as customer call back forprogress updates and will result in customer carestaff dissatisfaction.

• Decrease in satisfaction: Third party cloudinfrastructure implementations present a risk ofdecreasing job satisfaction of support engineers,sales & marketing staff, and customer care staff.Support engineers risk decreasing job satisfactionas work may shift from a hands-on technical roleto reporting and chasing up issues with thirdparty service providers. Support engineers willbecome dependent upon the responsiveness ofthird party service providers to resolve problemsthus reducing the level of control supportengineers have over resolving issues. This is a riskto support engineer satisfaction as they derivesatisfaction from technical aspects of work andrapidly resolving problems to customersatisfaction. Sales and marketing staff risk ofdecreasing job satisfaction if they are setunrealistic goals regarding the selling of the newcloud based services. This is a risk to sales andmarketing’s satisfaction as they derive satisfactionfrom meeting sales and market share targets.Customer care staff also risk decreasing jobsatisfaction because their ability to perform theirjob will be dependent upon third parties out oftheir control resulting in a greater lag betweencustomer queries and resolution.

• Departmental downsizing: Third party cloudinfrastructure implementations present a risk ofdownsizing to IT support departments. ITsupport departments are at risk of downsizing ifthe majority of their work comprises hardwareand network support. This is a risk because cloudproviders will be responsible for maintainingthese aspects of support making the capabilityunnecessary within the IT support department.Both support managers and support engineerswill be impacted as support engineers may losetheir jobs and the support managers may loseinfluence as they have a small department.

• Uncertainty with new technology: Third partycloud infrastructure implementations present arisk to the finance/business development staff asit may open the organization to long-termvolatility derived from market forces associatedwith the costs of using a cloud and data transfercosts. This is a risk as the medium to long-termviability of a cloud solution versus an internalhosting solution are uncertain. Additionally,switching to external hosting decreases thecertainty of customer lock-in in terms of softwaresupport contracts as now the hardware ismaintained externally and therefore the companycan no longer make the case that it offers an ‘all-in-one’ maintenance contract which avoidshaving to deal with multiple contactors. Anotherconsideration is the loss of in-house expertiseresulting in additional barriers to bringing thesystem back in-house if the cloud provider isinadequate.

• Lack of supporting resources: Third party cloudinfrastructure implementations present a riskresource scarcity in IT support and sales/marketing departments. There is a risk oftemporarily upsizing the IT support departmentsto cope with migration and also the relative lackof knowledge and experience held my supportengineers regarding cloud systems. This is a riskbecause staff may initially require more time toperform the same tasks due to having to learnhow-to do so in the cloud environment. There isa risk of temporarily upsizing sales/marketing tocope with the creation and launch of new cloudbased products/services. This is a risk becausesales and marketing staff will need to developappropriate strategies and materials to ensure themarketplace is aware of the product offering. Insummary these results illustrate that whilst the



financial and technological analyses are certainlyimportant, the organizational dimension shouldalso be considered. This should be particularlyconsidered from service quality and customercare perspective, and the organizationalgovernance and risk implications of being sohighly dependent upon a third party for product/service delivery to customers. In some cases, thefinancial dimension may not even be the primaryconsideration for business-critical applications.These findings are reinforced by the fact that atpresent the majority of management at theorganization is reluctant to implement the changebeyond a test environment despite the financialincentives as the risks are perceived to outweighthe lost savings.

Changes in the Air – Cloud Computing’sImpact on IT Organizations

As more businesses move their IT systems to thecloud to support rapid business model innovation,new services, and cost efficiencies, how are ITorganizations evolving? On an HR ExecutivesDebriefs webcast, Changes in the Air – CloudComputing’s Impact on IT Organizations held onSeptember 14, 2011, Stephen Redwood, Principaland Chris Weitz, Director, Deloitte Consulting LLP,discussed:

• Corporate IT is changing mission to facilitatethe benefits of cloud through rapiddeployment, flexibility, scalability andimproved economics.

• Considerations for restructuring IT is servicedelivery models and approach to clientservices.

• Rapidly evolving IT skills that can supportcloud services and software models.

• Considerations of cloud computing impact onorganizational change factors.

• Emerging job definitions and organizationstructures for the cloud era.

HR’s ascent into the cloud is one of sixrevolutionary trends in our Human Capital Trends2012 report. Why? Because in the past 24 months, acouple of factors have converged to create a “perfectstorm” of opportunity for HR organizations toleverage the usage and availability of Software-as-a-Service (SaaS) technology. First, businesses expect

more from HR than HR has been able to deliver inthe past. For example, during the cloud migration,company leaders may ask HR to help make criticaldecisions like:

• Who are the right people for us?

• Who has the best potential long-term?

• Where should they be located?

• What will be the Job Satisfaction constituents?

• What will be the impact on the existingworkforce?

• What will be the impact on OrganizationalCulture& Structure?

• What will be the level of integrity andsincerity of the employees?

• What impact would be there on internalcommunication?

Now, as the economy is recovering, leaders arebecoming even more demanding that HR be able tosupport critical decisions necessary for the businessto grow. HR transformation provides opportunitiesfor operational excellence, but is also enabling HR tofocus and deliver value to important business areas:

• Support operational excellence: In the early daysof HR transformation, the focus was primarily onautomation and moving administrativetransactions to centralized service centers. Now,I see HR transformation evolving more into doingthings that add value and results to the business.It’s about taking a companywide perspectiverather than a business unit perspective to savecosts, simplify and standardize. For example,standardizing HR operations in terms oftechnology, processes, cultural norms,communications, workforce intelligence and HRpolicies. The demand for workforce informationis continually increasing. I see a transition froma “what do I need to do” mentality to now oneof “what do I need to know in order to solve abusiness problem”.

• Devise and implement improved talentstrategies: People are a key enabler for companiesbeing able to grow as the economy recovers. Asa result HR is being asked to play a bigger rolein not only performance and successionstrategies, but in providing management withcoaching, insight and advice on bigger issues, like



workforce planning, workforce development andglobal sourcing—requests that were not asprevalent and to the level of specificity three yearsago.

• Support revenue growth: This is the biggestchange I’m seeing. HR is being requested, evenmandated, to support M&A activity, businesstransformations, globalization and entry into newmarkets. That means having a talent roadmapand model that can be applied across the boardand quickly put into use when needed.

• New Skills and Competencies: As locallyprovisioned services move to cloud based servicedelivery models, organizations will need to investin professional development of staff, making surethat training in business-related skills is providedalong with technical training. IT staff with skillsin managing and supporting the infrastructureand platforms that are now available from avariety of vendors (i.e., IaaS, PaaS) will need tofocus on how to ensure that these services areprovided securely, effectively, and efficiently bythe vendors. Additionally, these staff will need togrow their skills to support specific businessfunctions, rather than a particular server orinfrastructure.

Deep knowledge of key drivers that affect servicedesign, including security, policy andarchitecture, and regulatory compliance, will alsobe important. In the cloud, IT applications staffwill need to be more knowledgeable in all theareas that their applications touch, such asnetworking, storage, and security. Partnershipsbetween procurement, internal audit, legal affairs,information security and IT operations will beessential to ensure all viewpoints and concernsare addressed. Campus-wide IT governance willbe needed to prioritize technology investments toensure that IT resources are dedicated to thestrategic initiatives of the organization.

• Organizational Change: Development of anorganization depends upon the organizationalbehavior and organizational behavior is affectedby the behavior of individual employee.Individual employee’s behavior is influenced byorganizational climate. So, it is like a chain. Iforganizational climate is favorable, thenorganization will grow smoothly. On the otherhand if employees carry a positive attitude then

also organizational climate can be favorable. It isupon the individuals how they perceive theclimate of the organization or they feel about it.Management should consider employees’viewpoints and take some continuous feedbackfrom them, so that organizational climate can bemaintained as healthy and best. Following are thekey constituents of organizational climate

a. Opennessb. Confrontationc. Trustd. Authenticitye. Pro-activityf. Autonomyg. Collaborationh. Experimenting

Managing the dynamics of organizational changewould be a key challenge for a Human resourceprofessional in the Cloud Era.

Second, just as HR was being asked to do more,cloud and SaaS HR technologies have evolved toenable more, with broader functionality, intuitiveusage and entirely new offerings that weren’tavailable a few years ago. Key advantages of SaaS:

• Speed to Deliver: Newly available SaaS solutionsare easy to acquire, allow companies toimplement with a different iterative approach,and reduce overall implementation effort andtimeframes.

• Lower Cost of Ownership: Implementing a SaaSsolution delivers a reduced implementation costrelative to the older on premise solutions. SaaSsolutions provide a lower total cost of ownership,reduce capital spending (subscribe vs. buy) andallow for faster realization of benefits.

• Unified HR Solutions: Companies are achievingvalue through integration. Solution consolidationwill continue. As a result, companies will haveless need for point solutions in the future.Integration and simplicity will allow companiesto improve the usage of data and analytics.

So, two storm fronts have converged into onelarge opportunity. Demand for greater HRinvolvement in the business is met by a robust supplyof enabling SaaS technologies and a smooth transitioninto Cloud while managing the organizational changeon the other hand.



Conclusion and Future Work

Cloud computing is a disruptive technology thatis set to change how IT systems are deployed becauseof its apparently cheap, simple and scalable nature.The findings of this paper shows that cloudcomputing can be a significantly cheaper alternativeto purchasing and maintaining system infrastructurein-house. Furthermore, cloud computing couldpotentially eliminate many support-related issuessince there would be no physical infrastructure tomaintain. Despite these advantages, this case studyshowed that there are important socio-technical andOrganizational issues that need to be consideredbefore organizations could migrate their IT systemsto the cloud.

The impact that cloud computing has on each ITorganization will depend on the blend of cloud basedservices that each organization adopts. Some ITorganizations will grow, some organizations willinevitably shrink, but most will simply evolve. Someorganizations will become part of the cloud, some willmaintain their own cloud, and others will remainconsumers of the cloud. Whichever category yourorganization falls under, an understanding of theentire IT organization (central and distributed),coupled with ongoing investments in training andprofessional development will be critical inpositioning for success. The dynamics oforganizational climate and change will be a hugechallenge to be deal with for the HR professionals. Or,as our fellow Weather Channel meteorologist mightsay, monitor the radar, keep your eye on the sky, andprepare in advance.

References

• Ali Khajeh-Hosseini, David Greenwood & IanSommerville, “Cloud Migration: A Case Study ofMigrating an Enterprise IT System to IaaS” 2011.

• A. Khajeh-Hosseini, I. Sommerville, and I. Sriram,“Research Challenges for Enterprise CloudComputing,” Submitted to 1st ACM Symposiumon Cloud Computing (SOCC 2010), 2010.

• Changes in the Air – Cloud Computing’s Impacton IT Organizations held on September 14,2011, Stephen Redwood, Principal and ChrisWeitz, Director, Deloitte Consulting LLP

• Cloud Security Alliance (CSA) – SecurityGuidance for Critical Ares of Focus in CloudComputing V2.1

• HR and the Cloud: A Perfect Storm, JohnMalikowskion June 10, 2011

• H.R. Motahari Nezhad, B. Stephenson, and S.Singhal, “Outsourcing Business to CloudComputing Services: Opportunities andChallenges,” 2009.

• H. Erdogmus, “Cloud Computing: Does NirvanaHide behind the Nebula?” IEEE Software, vol. 26,2009, pp. 4- 6.

• I. Sriram and A. Khajeh-Hosseini, “ResearchAgenda in Cloud Technologies,” Submitted to 1stACM Symposium on Cloud Computing (SOCC2010), 2010.

• ISO/IEC 27001, Information technology - Securitytechniques - Information security managementsystems — Requirements

• ISO/IEC JTC 1 SC38 SGCC N 430, Study GroupReport on Cloud Computing

• M.A. Vouk, “Cloud computing issues, researchand implementations,” 30th InternationalConference on Information Technology Interfaces(ITI 2008), Cavtat/Dubrovnik, Croatia: 2008, pp.31-40.

• M. Armbrust, A. Fox, R. Griffith, A. Joseph, R.Katz, A. Konwinski, G. Lee, D. Patterson, A.Rabkin, I. Stoica, and M. Zaharia, “Above theClouds: A Berkeley View of Cloud Computing.,”2009.

• National Institute of Standards and Technology(NIST) – Definition of Cloud Computing

• Nancye Jenkins, IT Project Consultant, Universityof New Hampshire Vienna Shea, BerryDunn

• P. Jaeger, J. Lin, J. Grimes, and S. Simmons,“Where is the cloud? Geography, economics,environment, and jurisdiction in cloudcomputing,” First Monday, vol. 14, 2009.

• R. Yanosky, “From Users to Choosers: The Cloudand the Changing Shape of EnterpriseAuthority,” The Tower and the Cloud, R. Katz,EDUCAUSE, 2008, pp. 126-136.


44 Dr. Neetu Sharma

ORGANIZATIONAL GROWTH AND NEW VENTURE STRATEGY IN

THE 21ST CENTURY

Abstract: The resurgence of new venture creations and failures has ledpractioners and researchers to identify the factors that impact new ventureperformance. One major research stream in the strategic managementliterature suggests that new venture strategic decisions are critical to theirsuccess. Research on new venture strategies has experienced limited successand beckons the call for more substantive studies. Given the recent rise oftechnology ventures in transitional economies it represents an opportunityto examine the new venture strategy impact on the environment-performance relationship. The model presented in this paper is designedwith the transitional economies in mind as the backdrop for testing themodel. The paper is a response to a call to further exploratory research innew venture strategies and their performance implications. A modelframing the environment, new venture strategy and performance is offered.Propositions describing the relationships of the variables in the model aredeveloped. Finally, conclusions and implications for future research arediscussed.

Keywords: Organizational Growth, Venture Strategy, Performance,Venture Environment

Neetu Sharma*

*Dr. Neetu Sharma, Asst. Prof. Commerce and Management, Department of Commerce, Career College, Barkatullah UniversityBhopal (M.P.) Email- [email protected]

Introduction

The recent surgence of new venture creations andfailures has led practioners and researchers to

identify the factors that impact new ventureperformance. New ventures are often identified asnewly established firms or those with less than sevenyears of existence. One major research stream in thestrategic management literature suggests that newventure strategic decisions are critical to their success.The new venture must determine the manner theyalign their strengths and weaknesses with theopportunities and threats in the task environmentrepresentative of the specific industry where theirventure conducts business. Some researchers havediscovered that new ventures that enter themarketplace with aggressive marketing strategies and

broad targeted markets are more successful thanthose with narrow target markets (Miller and Camp,1985; Tsai, MacMillan and Low, 1991). The mostsuccessful companies are those that have developedaggressive venture strategies and have made venturescritical components of their strategic and operatingsuccess. For today’s corporations, traditional internalexpansions, efficiency improvements and“synergistic” acquisitions are no longer sufficientsources of growth in most industry segments that hadgrown crowded and hypercompetitive. The newchallenge is to search for emerging “white space”opportunities, “new-business creations that wouldmeet the unmet, unserved needs of customers inemerging markets.” In ventures, large and midsized


45Organizational Growth and New Venture Strategy in the 21st Century

companies can discover a source of growth they arestriving to achieve. New business creation has becomecentral to achieving strategic and financial objectivesof market champions. “Silicon Valley wouldn’t existif big companies couldn’t identify technology andmarket opportunities and move with speed tocapitalize on them”, says Mike Moritz of SequoiaCapital Partners.

Opportunity-driven business development is anexperimental approach to be practiced by companiesfacing radical industry or market change. Accordingto Peter Skat-Rørdam1, this approach is based on twocore beliefs: Most companies possess a wealth ofattractive opportunities. Most of these usually remainundiscovered, with only a few ever brought toattention, and in the best case only one or two actuallypursued. Many companies will soon find that itnecessary to employ an opportunity-driven andexperimental approach to business development,especially in changing industries, simply because thefuture is so uncertain. Opportunities arise andcrystallize on a continuous basis. “Every companymeets new opportunities (and threats) daily. Anemployee discovers an opportunity to sell a currentproduct in a new market segment, for example, or acompetitor suddenly goes up for sale. Suchopportunities do not wait for the next strategymeeting.” Some opportunities may shape newchallenges, influence your strategic intent, and thuschange your business set-up radically. Otheropportunities that require incremental changes maybe defined as short-term projects intended to improvethe performance of the present business set-up.

New ventures tend to have limited resources anda lack of legitimacy compared to the large more

established firms who have been in existence for alonger term. Stinchcombe (1965) characterized newventures as a ‘liability of newness’ with a highpropensity to fail because of their limited resourcecapabilities. Others have noted that new ventures arehighly dependent on environments for resourcescritical to their success (Eisenhardt and Schoonhoven,1990; Pfeffer and Salancik, 1978). However, it is alsoobvious that new ventures have capabilities that areniche specific possessing speed and flexibility toexploit certain industry opportunities more readilythan large, established firms (Dean, Brown, andBamford, 1998). The Internet has been filled with newventures exploiting niches that large firms deemunprofitable or time consuming. Regardless, thestrategies new ventures adopt to manage andinfluence their environments will impact the overallperformance of the firm.

The literature has offered two primary competingperspectives on the environment and strategies firmschoose to adopt. The two perspectives areenvironmental determinism and environmentalmanagement. The environmental determinismsupporters tend to view the environment as adeterministic influence and firms make strategicchoices by adapting to opportunities and threats inthe environment (Hannan and Freemand, 1977;Scherer, 1980). Porter (1980) points out that innovativeand differentiation strategies are often found indynamic and uncertain environments. Similarly,industrial organization and population ecologyresearchers claim that environmental determinismconditions influence a firm’s strategic choices(Scherer, 1980; Hannan and Freeman, 1977).

In contrast, environmental managementresearchers suggest that firms’ craft and implementstrategies to best manage their environments forcritical resources and gain a competitive advantage(Clark, Varadarajan and Pride, 1994; Zeithaml andZeithaml, 1984). Lenz (1981) points out that as firms’craft strategies specific to customers that provesuccessful competitors will often imitate them as aretaliatory strategy and thereby changing marketcompetition within the industry. Although there hasbeen past research on the environment-strategy-performance relationship, there has been limitedresearch examining the impact of new venturestrategy on the environment and how it affectsventure performance. More specifically examiningnew venture strategy as a moderator variable.


46 Dr. Neetu Sharma

Research on new venture strategies hasexperienced limited success and beckons the call formore substantive studies. Failures of new venturesare often linked to their limited resources or abilityto attract the needed resources. Peng and Heath (1996)point out that the problem is more prevalent for newventures in transitional economies than in marketeconomies. They suggest that new ventures intransitional economies like Russia, China, and Brazilare more constrained by limited technical, managerialand marketing capabilities than those in marketeconomies like the U.S. Bruton and Rubanik (1997)suggest new research in the context of new venturesin transitional economies is an opportunity to advancenew venture theory. The model presented in thispaper is designed with the transitional economies inmind as the backdrop for testing the model.

The paper is a response to a call to furtherexploratory research in new venture strategies andtheir performance implications (Carter, et. al., 1994;McDougall and Robinson, 1990). A brief literaturereview on environments and new venture strategieswill be developed. A model framing the environment,new venture strategy and performance is next offered.Propositions describing the relationships of thevariables in the model are presented. Finally,conclusions and implications for future research arediscussed.

Literature Background

As previously noted firms depend on resourcesand information from their environments critical totheir success. New ventures face many potentialhazards in terms of limited resources, lack ofenvironmental knowledge, industry data, vendorsupport, and customer preferences.

Because new ventures have limited or noperformance records their potential for success is alsolimited. Thus, environments have a major impact onnew venture performance. New ventures tend toexamine their environments in terms of opportunitiesand threats. Dutton and Jackson (1987) identifyopportunities and threats as two strategic categoriesconfronting firms. These two categories seemespecially critical for new ventures because of theirlimited track records.

Environment-Opportunity

Prior research suggests that the environmentplays a critical role in shaping the resource

opportunities of new ventures (Eisenhardt andSchoonhoven, 1990). Gartner (1985) points out that thecreation and exploitation of the environment by a newventure is pursuing an opportunity. The creation andexploitation of the environment depends on newventures assessing market discrepancies or niches andthen pursuing the essential resources to leverage theopportunities (Savitt, 1998).

Industry growth has been identified as a keyelement of market attractiveness. Generally the moreattractive the industry growth then the more likelynew ventures enter the industry and grow. Porter(1980) suggests that new ventures entering highgrowth industries will provoke less response orretaliatory strategies from incumbent firms and havemore potential for succeeding. Miller and Camp(1985) even suggest that new venture entrepreneursseek high growth markets to minimize the effects ofcompetitive pressures. Chandler and Hanks (1994)found that market attractiveness is positively relatedto new venture growth.

Pfeffer and Salancik (1978) point out that industrygrowth also indicates environmental munificence.Environmental munificence represents the extentcritical resources required by new ventures areavailable in the environment. New ventures are morelikely to obtain critical resources in high growthindustries than they could otherwise in low growthindustries. The opportunity for growth minimizessome of the competitive pressures. Research showsthat venture capitalists prefer to invest in newventures in high growth industries (MacMillan, Siegeland Narasimha, 1985; Sandberg, 1986). Otherresearchers point out that high growth industries dohave some limitations. Many firms may be enteringthe industry simultaneously thereby diminishing theluster for venture capitalists and the success for newventures (McDougall et. al., 1994; Tsai et. al., 1991).Regardless industry growth represents an importantenvironmental dimension that typifies an opportunityfor new ventures.

Environment-Threat

Threats represent the second environmentaldimension critical for new ventures. Stinchcombe(1965) referred to special difficulties that new venturesface in acquiring critical resources as ‘liabilities ofnewness’. Liabilities of newness pose threats to newventure success if they are not managed well. Threatscome in many different forms to new ventures. For



example, new technology ventures often requiresubstantial financial resources in the early stageswhile developing their technology. The ‘cash burn’rate or rate that cash is spent will often exceed theirrevenues. In fact, there may be no revenues forextended periods imposing questions of firmsurvivability. Technologies that are rapidly changingin industries may bring unanticipated consequencesthat derail the new venture and its potential forsuccess (Tushman and Rosenkopf, 1992). Also,because new ventures often lack industry andenvironmental knowledge as well as not havingstrong relationships with customers and supplierstheir legitimacy is weakened (Stinchcombe, 1965).Consequently, new ventures are in a risky andvulnerable market position. They are susceptible tomany threats from multiple stakeholders that threatenthe new venture’s performance. A key challenge fornew ventures is to minimize these threats andposition their firm for success in the marketplace.These conditions are often described asenvironmental hostility by researchers (Covin andSlevin, 1989; Tsai et. al., 1991). Thus, environmentalhostility is one way of examining the industry andstakeholder threats confronting the new ventureviability and performance.

New Venture Strategy

New venture strategies have been described andexamined by researchers in various ways (Eisenhardtand Schoonhoven, 1990; McDougall and Robinson,1990; Romanelli, 1989). Some researchers use productinnovation as a means of examining new venturestrategy (Chandler and Hanks, 1994; Eisenhardt andSchoonhoven, 1990). They define product innovationas the degree new ventures develop and introduce

new products and services into the marketplace.Zahra and Covin (1993) measured product innovationby new product development, rate of change ofproducts, and speed and variations in new productsdeveloped. The product innovation strategy reflectsa venture’s proactive approach to entering theindustry and minimizing competitive pressures.

Market differentiation is another dimension ofexamining new venture strategy. Marketdifferentiation refers to the extent a firm pursues astrategy based on unique venture attributes matchedto the market opportunities (Miller, 1987). Uniquemarketing efforts extend to personal networks thatthe entrepreneur brings to the marketplace thatdistinguishes or improves the venture performance(Ostgaard and Birley, 1994).

Market breadth is a third dimension of examiningnew venture strategy. Market breadth refers to thescope of the market that new ventures are attemptingto capture or serve. McDougall and Robinson (1990)measured breadth by the variety of customers,geographic range, and the number of productsoffered. They suggest that providing a broad rangeof products to a large customer base is an importantcomponent of new venture strategy. McCann (1991)lends further support by suggesting that marketbreadth is an important variable for inclusion in anynew venture research.

Finally, marketing alliance is another dimensionfor identifying new venture strategy. Bucklin andSengupta (1993) refer to marketing alliance as thelateral working relationship between a venture andits competitors in one or more aspects of marketing.They measure marketing alliance by the newventure’s emphasis on marketing complementaryproducts, designing and manufacturing of newproducts, introducing new products, promoting newproducts, providing support services and pricingcollaboration with other firms. Their studydemonstrates the importance of marketing alliancesand how those alliances allow a new venture tomanage critical resources or lack of them in changingmarkets. Other researchers suggest marketingalliances enable new ventures to obtain concrete andabstract resources that improve the venture’s marketposition (Eisenhardt and Schoonhoven, 1996). Theconcrete resources include specific skills and financesto manage the venture while abstract resourcesinclude firm legitimacy and market acceptance.

These four dimensions represent the


48 Dr. Neetu Sharma

conceptualization of the new venture strategy to beincluded in the model. They represent thefundamental strategic choices for new ventures in avariety of environmental settings. They also haveprominence in the strategic management literaturethat fits equally well in the new venture field of study.The four dimensions should be equally useful inexamining new venture strategy in transitionaleconomies.

Proposed Model

Figure 1 (Appendix) contains the proposed modelthat offers a framework for examining the role of newventure strategy in the relationship between itsenvironment and venture performance. The primarydimensions of the environment are industry growthand environmental hostility. The model integrates theenvironmental determinism and environmentalmanagement perspectives as a means of examininghow entrepreneurs adapt to their environments andbe proactive to exploit opportunities available. It isproposed that environmental determinism will playa mediating role for new venture strategy whileenvironmental management perspective will play amoderating role for new venture strategy. In themodel industry growth hostility is representative ofthe environmental determinism perspective whileenvironmental hostility represents the environmentalmanagement perspective.

The environmental determinism perspectiveassumes that new venture strategy takes an adaptiveresponse to the environment. More importantly it willmediate the impact of the environment on the newventure performance. Assuming there are nicheopportunities in the environment affordable to viableventures then the new venture will need to adaptcertain strategies to transform these opportunities intoachievable performance. Having the right ventureattributes matched with the industry opportunity willenhance the venture’s acceptance in the marketplace.Tsai et. al. (1991) noted the mediating impact that newventure strategies may have on performance. Theystate that new venture strategies will mediate apositive impact for return on investment ofenvironmental munificence in terms of product lifecycle. Contrastingly, the new venture strategies willmediate a negative impact on market share ofenvironmental hostility. They concluded thatenvironment and strategy separately affect newventure performance.

The environmental management perspectiveoffers an alternative view about the impact of newventure strategy on the environment affecting ventureperformance. A hostile environment may haveadverse effects on the new venture and give cause fordeveloping different strategies to cope. New venturestrategies will seek options and risk minimizingalternatives to absorb uncertainties in theenvironment that may adversely impact the newventure’s performance. New venture strategies aredeveloped that proactively reduce the negativeimpacts and enhance the positive elements of theenvironment. Thus, the environmental perspectivesuggests that new venture strategies play amoderating role in the environment that affectsventure performance.

Propositions

Based on the literature background severalpropositions are offered that address the differentroles of new venture strategy in the environmentaffecting venture performance. The propositions aredeveloped focusing on the transitional economies asthe backdrop for testing the model.

1. There is a positive relationship betweenenvironmental determinism and performancewhen new venture strategy is a mediatingvariable in transitional economies.

2. There is a positive relationship betweenenvironmental management and performancewhen new venture strategy is a moderatingvariable in transitional economies.

3. There is a positive relationship between industrygrowth and venture performance when mediatedby new venture strategies.

4. Product innovation will positively mediate therelationship between industry growth andventure performance.

a. The higher the degree of product innovationthe more positive the relationship betweenindustry growth and venture performance.

b. The lower the degree of product innovationthe less positive the relationship betweenindustry growth and venture performance.

5. Market differentiation strategy will positivelymediate the relationship between industrygrowth and venture performance.



a. The higher the degree of marketdifferentiation the more positive therelationship between industry growth andventure performance

b. The lower the degree of marketdifferentiation the less positive therelationship between industry growth andventure performance.

6. Market breadth strategy will positively mediatethe relationship between industry growth andventure performance.

a. The higher the degree of market breadth themore positive the relationship betweenindustry growth and venture performance.

b. The lower the degree of market breadth theless positive the relationship betweenindustry growth and venture performance.

7. Market alliance strategy will positively mediatethe relationship between industry and ventureperformance.

a. The higher the degree of market alliance themore positive the relationship betweenindustry growth and venture performance.

b. The lower the degree of market breadth theless positive the relationship betweenindustry growth and venture performance.

8. The negative relationship between environmentalhostility and venture performance will bemediated by new venture strategies intransitional economies.

9. Product innovation will moderate the negativerelationship between environmental hostility andventure performance.

a. The higher the degree of product innovationthe weaker the relationship betweenenvironmental hostility and ventureperformance.

10. Market differentiation will moderate the negativerelationship between environmental hostility andventure performance.

a. The higher the degree of marketdifferentiation the weaker the relationshipbetween environmental hostility and ventureperformance.

11. Market breadth will moderate the negative

relationship between environmental hostility andventure performance.

a. The higher the degree of market breadth theweaker the relationship betweenenvironmental hostility and ventureperformance.

12. Market alliance will moderate the negativerelationship between environmental hostility andventure performance.

a. The higher the degree of market breadth theweaker the relationship betweenenvironmental hostility and ventureperformance.

The propositions developed reflect the possiblerelationships and their impact for examining the roleof new venture strategy in the context of theenvironment. The new venture strategy is treated asa means of mediating or moderating the environmentfor best performance by the new venture.

Conclusion and Future ResearchImplications

The model proposed offers a framework forexamining the role of new venture strategy and itsrelationship with the environment. More specifically,the mediating and moderating roles of new venturestrategies that interact with environments to impactventure performance are examined. The mediatingrole of new venture strategy is developed in thecontext of industry growth as one environment thatnew venture strategy can mediate. It is furthersuggested that product innovation, marketdifferentiation, market breadth and market alliancestrategies mediate a positive effect on new ventureperformance in an environment with industrygrowth. McDougall et. al. (1994) suggests thataggressive venture strategies are necessary to achievebetter venture performance in a rapidly growingindustry.

However, new venture strategy can also play amoderating role in the context of environmentalhostility. The model suggests that when new venturestrategies are emphasized and are the strongest thenthe negative impact of environmental hostility on newventure performance is weaker than otherwise can beexpected. Romanelli’s (1989) study reaffirms theproposition that new ventures with aggressivestrategies are more likely to improve or enhance their


50 Dr. Neetu Sharma

survivability in a hostile environment.

The literature is replete with research suggestinghow industry and market conditions lead newventures to adopt different strategies for bestperformance (Carter, et. al. 1994). The literature is notfirm on how these strategies deal with environmentsto best manage them or the best matches for success.The model proposed offers a framework to considerand test new venture strategies that deal withenvironments to impact venture performance. Byexamining the environment from two differentperspectives new venture strategies are offered togenerate the best venture performance. Each of thetwo perspectives shapes the way firms deal withenvironments. In one case, new ventures adapt totheir environments as their entrepreneurs assess andrespond to the environment or industry conditions.In the other case, new ventures have the capacity toenact their environments or industry and can be moreproactive in managing their environments.

The proposed model is an attempt to advancenew venture theory. Primarily, the model suggeststhat the two environmental perspectives be integratedto better understand the impact of new venturestrategies on performance. In addition, the modelsuggests there are more ideal matches of new venturestrategies with the environment that may lead to thebest venture performance. The model offers aframework for testing these matches and theirrelationships among the new venture strategies anddifferent environmental perspectives.

Transitional economies offer an ideal setting fortesting the model because of their underdevelopedinstitutional frameworks. Transitional economieshave been ignored in past research and offer a richenvironment for testing new venture theory. Further,new technology is being developed in the transitionaleconomies that provide industries representative ofindustry growth and potential. Finally, the richnessof transitional economies offers researchers anopportunity to examine new venture activity in anenvironment other than market based economieswhere so much research has been conducted in thepast.

References

• Aldrich, H., 1979, Organizations andenvironments, Prentice-Hall, Englewood Cliffs,NJ.

• Bruton, G.D. and Y. Rubanik, 1997, “Hightechnology entrepreneurship in transitionaleconomies: The Russian experience,” Journal ofhigh Technology Management Research, 8(2) pp.213-223.

• Carter, N.M., T.M. Stearns, P.D. Reynolds, B.A.Miller, 1994, “New venture strategies: Theorydevelopment with an empirical base,” StrategicManagement Journal, 15 (1), pp. 21-41.

• Chandler, G.N., S.H. Hanks, 1994, “Marketattractiveness, resource-based capabilities,venture strategies, and venture performance,”Journal of Business Venturing, 9(4), pp. 331-349.

• Clark, T., P.R. Varadarajan, W.M. Pride, 1994,“Environmental management: The construct andresearch propositions,” Journal of BusinessResearch, 29, pp. 23-38.

• Covin, J.G., D.P. Slevin, 1989, “Strategicmanagement of small firms in hostile and benignenvironments,” Strategic Management Journal,10(1), pp. 75-87.

• Dean, T.J., R.L. Brown, C.E. Bamford, 1998,“Differences in large and small firm responsesenvironmental context: Strategic implicationsfrom a comparative analysis of businessformations,” Strategic Management Journal, 19,pp. 709-728.

• Dutton, J.E., S.E. Jackson, 1987, “Categorizingstrategic issues: Links to organizational action,”Academy of Management Review, 12(1), pp. 76-90.

• Eisenhardt, K.M., C.B. Schoonhoven, 1990,“Organizational growth: Linking founding team,strategy, environment, and growth among U.S.semiconductor ventures, 1978-1988,” Adminis-trative Science Quarterly, 35 (3), pp. 504-529.

• Gartner, W.B., 1985, “A conceptual framework fordescribing the phenomenon of new venturecreation,” Academy of Management Review, 19(4), pp 696-706.

• Hannan, M., J. Freeman, 1977, “The populationecology of organizations,” American Journal ofSociology, 82 (4), pp. 929-964.

• Lenz, R.T., 1981, “Determinants of organizationalperformance: An interdisciplinary view,”Strategic Management Journal, 2, pp. 131-154.



• MacMillan, I.C., R. Siegel, R. Nrasimha, 1985,“Criteria used by venture capitalists to evaluatenew venture proposals,” Journal of BusinessVenturing, 1(1), pp. 87-105.

• McCann, J.E., 1991, “Patterns of growth,competitive technology, and financial strategiesin young ventures,” Journal of Business Ventures,6(3), pp. 189-203.

• McDougall, P.P., J. G. Covin, R.B. Robinson, L.Herron, 1994, “The effects of industry growth andstrategic breadth on new venture performanceand strategy content,” Strategic ManagementJournal, 15 (7), pp. 537-554.

• McDougall, P.P., R.B. Robinson, 1990, “Newventure strategies: An empirical identification ofeight archetypes of competitive strategies ofentry,” Strategic Management Journal, 11 (6), pp.447-467.

• Miller, A., B. Camp, 1985, “Exploringdeterminants of success in corporate ventures,”Journal of Business Venturing, 1(1), pp. 87-105.

• Ostgaard, T.A., S. Birley, 1994, “Personalnetworks and firm competitive strategy - Astrategic or coincidental match?,” Journal ofBusiness Venturing, 9 (4), pp. 281-305.

• Peng, M. W., P. S. Heath, 1996, “The growth ofthe firm in planned economies in transition:Institutions, organizations, and strategic choice,”Academy of Management Review, 21 (2), pp. 492-528.

• Pfeffer, J., G. R. Salancik, 1978, The ExternalControl of Organizations: A ResourceDependence Perspective, Harper and Row, NewYork.

• Porter, M. E., 1980, Competitive Strategy, TheFree Press, New York.

• Sandberg, W. R., 1986, New VenturePerformance, Lexington Books, Lexington, MA.

• Savitt, R., 1988, “Entrepreneurial behavior andmarketing strategy”, Philosophical and RadicalThought in Marketing, pp. 307-322, LexingtonBooks, Lexington, MA.

• Scherer, F. M., 1980, Industrial Market Structureand Economic Performance, Houghton Mifflin,Boston.

• Stinchcombe, A. L., 1965, “Organizations andsocial structure”, J. G. March, Handbook ofOrganizations, pp. 142-193. Rand McNally,Chicago, ILL.

• Tsai, W. M., I. C. MacMillan, M. B. Low, 1991,“Effects of strategy and environment on corporateventure success in industrial markets,” Journal ofBusiness Venturing, 6 (1), pp. 9-28.

• Tushman, M. L., L. Rosenkopf, 1992,“Organizational determinants of technologicalchange: Toward a sociology of technologicalrevolution,” L. L. Cummings, B. M. Staw,Research in Organizational Behavior, pp. 311-347,JAI Press Greenwich, CT.

• Zahra, S. A., J. G. Covin, 1993, “Business strategy,technology policy and company performance,”Strategic Management Journal, 14 (6), pp. 451-478.

• Zeithaml, C. P., V. A. Zeithaml, 1984,“Environmental management: Revising themarketing perspective,” Journal of Marketing, 48(1), pp. 46-53.


52 Dr. Poonam Khurana, Ms. Anshu Loschab and Ms. Sonam Goel

PSYCHOLOGICAL WELL-BEING OF MANAGEMENT GRADUATES

VERSUS SCIENCE GRADUATES IN DELHI

Abstract: Education is the back bone of a progressive nation. From ancientBharat to modern India, higher education has always occupied a place ofprominence in Indian history. India has a tradition of learning. A view ofthe impressive achievements of the Indian civilization over three millenniareinforces the belief that India was a leading knowledge society in themillennia gone by. There was a continuous process of intellectualrenaissance through some awe inspiring contributions by our saints, poets,philosophers, scientists, astronomers and mathematicians to new thoughts,principles and practices (Task force report, 2001). Aim of the research isto find out the Psychological Well-being among management graduatesversus science graduates. So researcher selected 200 students comprisingof 100 students of each stream.. The all subjects were randomly selectedFrom Delhi. Scale was use for data collection is personal datasheet andPsychological Well-being scale developed by Bhogale and Prakash (1995),and data was analyzed by t test. Result show that there is no significantdifference between the psychological well-being of Management and Sciencegraduates.

Keywords: Education, management, science, graduate, psychological,wellbeing

Poonam Khurana*Anshu Loschab**Sonam Goel***

*Dr. Poonam Khurana, Associate Professor, Rukmimi Devi Institute of Advanced Studies, Delhi.**Ms. Anshu Loschab, Assistant Professor, Rukmimi Devi Institute of Advanced Studies, Delhi.***Ms. Sonal Goel, Professor, Rukmini Devi Institute of Advanced Studies, Delhi

Introduction

Psychological well-being refers to how peopleevaluate their lives. According to Diener (1997),

these evaluations may be in the form of cognitions orin the form of affect. The cognitive part is aninformation based appraisal of one’s life that is whena person gives conscious evaluative judgments aboutone’s satisfaction with life as a whole. The affectivepart is a hedonic evaluation guided by emotions andfeelings such as frequency with which peopleexperience pleasant/unpleasant moods in reaction totheir lives. The assumption behind this is that mostpeople evaluate their life as either good or bad, sothey are normally able to offer judgments. Further,

people invariably experience moods and emotions,which have a positive effect or a negative effect. Thus,people have a level of subjective well-being even ifthey do not often consciously think about it, and thepsychological system offers virtually a constantevaluation of what is happening to the person.

Psychological well-being leads to desirableoutcomes, even economic ones, and does notnecessarily follow from them. In a very intensiveresearch done by Diener and his colleagues, peoplewho score high in psychological well-being later earnhigh income and perform better at work then peoplewho score low in well-being. It is also found to be


53Psychological Well-being of Management Graduates versus Science Graduates in Delhi

related to physical health. In addition, it is oftennoticed that what a society measures will in turninfluence the things that it seeks. If a society takesgreat effort to measure productivity, people in thesociety are likely to focus more on it and sometimeseven to the detriment of other values. If a societyregularly assesses well-being, people will providetheir attention on it and learn more about its causes.Psychological well-being is therefore valuable notonly because it assesses well-being more directly butgood work environment

In the present paper, psychological well-being hasbeen defined in terms of internal experience of therespondent and their own perception of their lives.It gives a special focus both on momentary moodsand long term states of their mental well-being.

At the most basic lave Psychological well-being(PWD) is quite similar to other term that refer topositive mental status, such as happiness forsatisfaction and in many base it is not necessary forhelpful to worry about find distinctions between suchterms.

The concept of well-being originated fromPositive Psychology. The shift from negative topositive psychology is a welcome change in thediscipline. The focus of positive psychology is tostudy the improvement in the lives of individuals.Positive Psychology has emerged from the problemof the west. Thus it may be inferred that knowledgeis culturally conditioned. Well-being is often definedas a sound economic disposition. A western study ofrelationship between having money, and lifesatisfaction revealed that between 1940 s and the year2000, people needed more money to maintain, thesame level of satisfaction. In other words one neededmore money to stay happy in 2000 than in 1940 s,with the requirement of money steadily increasingover the years. Another study proved that while therichest American measured 5.8 on satisfaction whilethe Slum dwellers of Kolkata measured 2.9 indicatingagain that satisfaction is not directly related to moneyper se. However, up to the income level of $ 10,000 acorrelation between money and satisfaction wasfound, beyond which addition in income did notcontribute to well-being. Thus an economic criterionwas found to have a limitation in predicting well-being.

Lewis (1991) reported that young womengenerally tended to seek social support more so thanyoung males, while Hammarström and Janlert (1997)

demonstrated that social support was more stronglyassociated with well-being for females rather thanmales

Objective of the Study

The main objective of the study is to study andcompare Psychological well-being of Managementand Science Graduates in Delhi.

Hypothesis

There is no significant difference between thePsychological Well-being of Science GraduatesandManagement Graduates.

Methodology

Research Design: Being the study exploratory innature, it has gone through collection of data from 50Science Graduates and 50 Management Graduatesfrom different colleges in Delhi and analyzing thesame using the mean, standard deviation and t-testetc.

Tools used:

The following tools were used in the presentstudy:

1. Personal Data sheet: This personal data sheet,the information about Age, Stream, andfamily income were collected.

2. Psychological Well-being scale: Psychologicalwell-being questionnaire developed byBhogale and Prakash (1995), was used tomeasure psychological well-being. These are28 sentences in this scale. All at the sentencehad a two option “yes” or “no” belong twooption can choose one option and marked bysymbol (“). In positive sentence 1 point foryes and 0 point for no. and in negativesentence 1 point for no and 0 point for yes.The test -retest reliability coefficient is 0.72and internal consistency coefficient is 0.84.The author has reported satisfactory validityof the questionnaire.

Results and Findings

These data were analyzed and computed withExcel Microsoft programme. All items in threequestionnaires were rated by using Five point LikertScale to score the levels of the degree.


54 Dr. Poonam Khurana, Ms. Anshu Loschab and Ms. Sonam Goel

During data analysis mean and Student test are used. The formula for mean and t-testare given as follows:

Table 1.1: Difference in the Mean Scores in relation to Gender.

Gender N Mean Std. Deviation Std. Error Mean

Female 8 5.13 1.126 .398

Male 12 5.08 2.503 .723

The table shows that the difference in the mean scores of Science graduates and the Management graduatesis 5.13. The difference in the mean scores of Male participants is 5.08. Following negligible initial difference,Levene’s Test for Equality of Variances was applied to test the hypothesis. The table 1.2 shows the details ofthe test.

Table 1.2: Differences in Science graduates and post graduates scores with respect to gender.

Levene’s test for T test for Equality of Meansequality of variances

F Sig. t df Sig. Mean Std. 95% Confidence(2 tailed) Diffe- error Interval of the

rences Diffe- Differencerence

Upper Lower

Equal 3.421 0.081 0.044 18 0.965 0.04 0.949 -1.952 2.035Variancesassumed

Equal 0.051 16.328 0.960 0.04 0.825 -1.704 1.788variancesnotassumed

Interpretation: An analysisof pre- test and post test scores in relation to gender showed that the P value orthe significance value corresponding to the F- test of equal variances assumed is 0,081 which is less than 0.05.This suggested that the independent two sample T test with un equal variance should be used to compare themean scores of Science graduates and management graduates with respect to the gender. The P- value of thet test with unequal variance was 0.965, which was greater than 0.05. this meant that there was no significantdifference in mean score of Science graduates and management graduates with respect to gender at 5% levelof significance. As a result the findings suggested that since there was no significant difference to be found inthe mean scores of the Science graduates and the management graduates with respect to gender.

Table 1.3: Difference in the Mean Scores in relation to their discipline

Gender N Mean Std. Deviation Std. Error Mean

Science 10 5.70 1.829 .578

Management 10 4.50 2.121 .671

The details in the table indicate that there is a mean difference of 5.70 and standard deviation of 1.829between the scores of Science graduates. The mean difference in the scores of Management graduates is 4.50with standard deviation 2.121. Following the descriptive analysis, a T test analysis was carried out. The table1.4 shows the details of T test analysis.


55Psychological Well-being of Management Graduates versus Science Graduates in Delhi

Interpretation:An analysis of Science andmanagement graduates in relation to discipline of thestudy shows that the P value or the significance valuecorresponding to the F test of equal variancesassumed is 0.456 which is greater than 0,05. Thissuggests that there was no significant difference inmean score of Science graduates and managementgraduates with respect to the discipline of the study.Since there is no significant difference found in themean scores of the science and managementgraduates, it can be concluded that there is not anysignificant difference in the Psychological well-beingof Science graduates and management graduate

References

• Bhogle and Prakash (1995). manual of thepsychological well-being questionnaire.

• Broota, K. D., (1992), Experimental design inbehavioral research, Wiley, Veastern Limited.

• Government of India (2010). National Programmefor Health Care of the (NPHCE), Ministry ofHealth and Family Welfare, New Delhi.

• Jahoda, M. (1958), current concept of positivemental health. Network: basic book.

• Moore, S. E., H. Y. Leslie and C. A. Lavis (2005).‘Subjective well-being and life satisfaction in theKingdom of Tonga’. Social Indicators ResearchVol. 70, pp: 287-311

• Singh, D. (1990), Concept of psychological well-being : Western and Indian perspectives, NIMHANS Journal, Vol. 8, pp. 1-11.

Table 1.4: Differences in Science graduates and post graduates scores with respect to Discipline of the study

Levene’s test for T test for Equality of Meansequality of variances

F Sig. t df Sig. Mean Std. 95% Confidence(2 tailed) Diffe- error Interval of the

rences Diffe- Differencerence

Upper Lower

Equal 0.581 0.456 1.355 18 0.192 1.20 0.886 -0.661 3.061Variancesassumed

Equal 1.355 17.618 0.193 1.20 0.886 -1.664 3.064variancesnotassumed


56 Madhavendra Nath Jha

EMERGING ROLE OF CORPORATE SECTOR TOWARDS SOCIAL

RESPONSIBILITY: A CASE STUDY OF TATA GROUP OF COMPANIES

Abstract: The European Commission defines CSR as ‘the responsibilityof enterprises for their impacts on society. This is the definition which isthe most suitable for the context of the article’s research question.In India,there is now governmental regulation regarding CSR through article ofthe Company Act, 2013 to spend at-least 2% of their Net Profit of lastthree years..

This Article will discuss the emerging role of corporate sector towardssocial responsibility by emphasizing on the different Corporate SocialResponsibility (CSR) issues that emerged within TATA Group ofCompanies (Tata Motors, Tata Steel, Tata Consultancy Services, TataChemicals Ltd, Tata Tea, Titan, Tata Chemicals Limited, Tata ArcheryAcademy, Tata Quality Management Services, Tata Relief Committee).

The article makes use of publicly available information, secondary datainclusive of quantitative and qualitative data as well collected from thecompany’s website, online newspapers and non-governmental organization(NGO) reports, academic journals and book.

Madhavendra Nath Jha*

*Madhavendra Nath Jha, Associate Professor, Tecnia Institute of Advanced Studies, Madhuban Chowk, Delhi-85

Introduction

This Article will discuss the emerging role ofcorporate sector towards social responsibility by

emphasizing on the different Corporate SocialResponsibility (CSR) issues that emerged withinTATA Group of Companies (Tata Motors, Tata Steel,Tata Consultancy Services, Tata Chemicals Ltd, TataTea, Titan, Tata Chemicals Limited, Tata ArcheryAcademy, Tata Quality Management Services, TataRelief Committee).

There is no clear definition of CSR. In CorporateSocial Responsibility, Legal and semi-legalframeworks supporting CSR, Lambooy gives anoverview of several definitions of CSR.1

Goyder (2003) argues: – Industry in the 20thcentury can no longer be regarded as a privatearrangement for enriching shareholders. It hasbecome a joint enterprise in which workers,

management, consumers, the locality, govt. and tradeunion officials all play a part. If the system which weknow by the name private enterprise is to continue,some way must be found to embrace many interestswhom we go to make up industry in a commonpurpose.)2

CSR implies some sort of commitment, throughcorporate policies and action. This operational viewof CSR is reflected in a firm‘s social performance,which can be assessed by how a firm manages itssocietal relationships, its social impact and theoutcomes of its CSR policies and actions (Wood,1991).3

The European Commission defines CSR as ‘theresponsibility of enterprises for their impacts onsociety’.4


57Emerging Role of Corporate Sector Towards Social Responsibility:

A Case Study of Tata Group of Companies

This is the definition which is the most suitablefor the context of the article’s research question.InIndia, there is now governmental regulationregarding CSR through article of the Company Act,2013 to spend at-least 2% of their Net Profit of lastthree years.

But well before the aforesaid mandatoryprovision rather right from the inception , in TataGroup of Companies, the CSR perspective could bedescribed as following a principles-based approach,with codes of conduct that prescribe values andprinciples which company members as a wholeshould aspire to follow.

Objectives of the Study

To understand the concept of CSR

To know the details of CSR activities adopted bythe Tata Group of Companies & it has fulfilled itsresponsibility towards all stakeholders.

Methodology

The article makes use of publicly availableinformation, secondary data inclusive of quantitativeand qualitative data as well collected from thecompany’s website, online newspapers and non-governmental organization (NGO) reports, academicjournals and books.

Tata Group

Introduction

The Tata group’s core purpose is to improve thequality of life of the communities it serves globally,through long-term stakeholder value creation.

Founded by Jamsetji Tata in 1868, the Tata groupis a global enterprise headquartered in India, andcomprises over 100 operating companies in sevenbusiness sectors: communications and informationtechnology, engineering, materials, services, energy,consumer products and chemicals. Tata companieshave operations in more than 100 countries across sixcontinents, and export products and services to over150 countries. The revenue of Tata companies, takentogether, was $103.27 billion (around Rs 624,757 crore)in 2013-14, with 67.2 percent of this coming frombusinesses outside India. Tata companies employaround 200,000 people across India & 581,470 peopleworldwide. It thus has the pride to be nation‘s largestprivate employer.

Good corporate citizenship is part of the Tatagroup’s DNA. Sixty-six percent of the equity of TataSons, the promoter holding company, is held byphilanthropic trusts, thereby returning wealth tosociety. As a result of this unique ownership structureand ethos of serving the community, the Tata namehas been respected for more than 140 years and istrusted for its adherence to strong values and businessethics.

Mr. Ratan Naval Tata, under the Chairmanshipof the TATA Group from 1991 to 2012, added manyfeathers to the cap of this Group of companies.Besides being Business Man of the Year for Asia byForbes in 2004, Mr. Ratan Tata serves on the boardof the Ford Foundation and the program board of theBill & Melinda Gates Foundation’s India AIDSinitiative. The group went through majororganisational phases — rationalisation, globalisation,and now innovation, as it has set a goal to reach areported $500 billion in revenues by 2020-21, whichis almost double the size of the Walmart -today. 5

Ratan Tata has stepped down to pass on theentire responsibility to Cyrus Mistry .

Approximately two third of the equity of theparent firm, Tata Sons Ltd., is held by philanthropictrusts endowed by Sir Dorabji Tata and Sir RatanTata, sons of Jamsetji Tata, the founder of today’s Tataempire in the 1860s. Through these trusts, Tata SonsLtd. utilizes on average between 8 to 14 percent of itsnet profit every year for various social causes. Evenwhen economic conditions were adverse, as in the late1990s, the financial commitment of the group towardssocial activities kept on increasing, from Rs 670million in 1997 -98 to Rs 1.36 billion in 1999-2000. Inthe fiscal year 2004 Tata Steel alone spent Rs 45 croreon social services.6

Tata is accredited to initiate various labor welfarelaws, almost in parity of the developed countries. Theestablishment of Welfare Department was introducedin 1917 and enforced by law in 1948; Maternity Benefitwas introduced in 1928 and enforced by law in 1946.So, in the case of the mandatory expenditure on CSRactivities was introduced by each & every constituentsof the TATA Group of companies at the time ofinception itself and enforced by law in 2013-14.

Tata Group’s Profile & CSR Activities

All the Companies and Societies of the TataGroup have undertaken the various CSR activities for



discharging their responsibilities of towards society.

Tata Motors

Tata Motors, Pune has started communitydevelopment activities for the benefit of TELCO(earlier Tata Motors was known as TELCO) familiesand local residents in 1973 with having aim towardsall round development of the local communities. TataMotors, Jamshedpur is fighting against Leprosy.

Tata Motors has kept on undertaking various CSRactivities, few of them are as below:

(a) Pollution Control

Tata Motors is the first Indian Company tointroduce vehicles with complete Euronorms.

(b) Restoring Ecological Balance Tata Motors hasplanted 80,000 trees in the works and thetownship and more than 2.4 million treeshave been planted in Jamshedpur region.

(c) Employment Generation Relatives theemployees at Pune have been encouraged tomake various industrial co-operativesengaged in productive activities like re-cycling of scrap wood into furniture, welding,steel scrap baling, battery cable assembly etc.The Tata Motors Grihini Social WelfareSociety assists employees’ womendependents; they make a variety of products,ranging from pickles to electrical cableharnesses etc; thereby making themfinancially secure.

(d) Economic Capital

In Lucknow, two Societies-Samaj VikasKendra & Jan Parivar Kalyan Santhan havebeen formed for rural development & forproviding healthcare to the rural areas.

(e) Human Capital

Tata motors has introduced many scholarshipprograms for the higher education of thechildren.

(f) Natural Capital

On the World Environment Day, Tata Motorshas launched a tree plantation drive acrossIndia and countries in the SAARC region,Middle East Russia and Africa. As many as25,000 trees were planted on the day. Apart

from this more than 100,000 saplings wereplanted throughout the monsoon.7

Tata Steel

Tata Steel was awarded The Energy ResearchInstitute (TERI) award for Corporate SocialResponsibility (CSR) for the fiscal year 2002-03 inrecognition of its corporate citizenship andsustainability initiatives. TISCO was also conferredthe Global Business Coalition Award in 2003 for itsefforts in spreading awareness about HIV/AIDS.

Tata Steel has adopted the Corporate CitizenshipIndex, Tata Business Excellence Model and the TataIndex for Sustainable Development. Tata Steel spends5 -7 per cent of its profit after tax on several CSRinitiatives.

1. Self -Help Groups (SHG’s) 2. Supports SocialWelfare Organizations 3. Healthcare Projects4. Economic Empowerment 5. Assistance togovernment

Tata Consultancy Services (TCS)

TCS aims at the Tata group‘s philosophy ofbuilding strong sustainable businesses community.The elements that make for strong corporatesustainability at TCS include the following: A fair,transparent corporate governance , a strong strategyfor long-term growth ,Best-in-class HR processes ,initiatives for community betterment and welfare. In2010-11, TCS supported its local communities in theUnited States: supported the victims of the 2010Chilean earthquake, conducted IT educationalprograms for high school students in Cincinnati ,raised support and awareness for diabetes preventionthrough a series of marathon sponsorships TataConsultancy Services runs an adult literacy program.Indian government launched Saakshar Bharat, anadult education programe in 2009 and the programewill now go online via TCS‘ partnership. The scheme,aimed at female literacy aims to make literate 70million people, of which at least 85 percent arewomen literate and the program has already beenrolled out in 167 districts across 19 states.8

Tata Chemicals Ltd (TCL)

Tata Chemicals is making an effort forsustainability. Tata Chemicals supports the UNGlobal Compact and is committed to reporting itssustainability performance in accordance with GRI




(Global Reporting Initiatives) guidelines .Its mainoperations for environment protection includeoptimal use of resource, finding and/or generatingalternative sources of fuel and raw materials, andmaximizing reuse and recycling . All in all they havethe policy of 3avoid, reduce and reuse‘.9

Tata Tea

Tata Tea has been working hard since the 1980sto fulfill the needs of specially-abled people. It has setup the Srishti Welfare Centre at Munnar, Kerala; itsvarious programs provide education, training andrehabilitation of children and young adults withspecial needs.

Srishti has four projects:

a. The DARE Schoolb. The DARE strawberry preserve unitc. Athulyad. Aranya.

Titan

In its corporate philosophy CSR is defined asdoing less harm and more good by adopting thefollowing practices:

1. Respecting and supporting local communities,2. Caring for the employees, 3. Being an activemember of society 4. Committed to sustainabledevelopment 5. Putting safety(at work) first 6.Opportunities to differently- abled people - Titan hasemployed 169 disabled people in blue collarworkforce at Hosur.

TCSRD

Tata Chemicals Limited (TCL) set up the TataChemicals Society for Rural Development (TCSRD) in1980 to promote its social objectives for thecommunities

The initiatives that TCSRD is involved in include:

1. Agricultural development 2. Animalhusbandry 3. Watershed development 4. Education5. Rural energy 6. Women’s programs 7. Relief work

Tata Archery Academy

Established in Jamshedpur in 1996 with thetraining facilities like highly efficient coaches, archerygrounds, equipment from India and abroad to select& train boys and girls between the age group of 13

to 18 years for the four years course and it providesthe training during which the cadets are also impartedwith formal education.

TQMS

Tata Quality Management Services (TQMS -adivision of Tata Sons) had been entrusted with thetask of institutionalizing the Tata Business ExcellenceModel (TBEM). The TBEM provides each companywith a wide outline to help it improve businessperformance and attain higher levels of efficiency andproductivity. It aims to facilitate the understandingof business dynamics and organizational learning.TBEM is a 3customized -to-Tata‘ adaptation of theglobally renowned Malcolm Baldrige model. TBEMmodel focuses on seven core aspects of operations:leadership, strategic planning, customer and marketfocus, measurement, analysis and knowledgemanagement, human-resource focus, processmanagement and business results.

Tata Relief Committee

Tata Relief Committee (TRC) works to providerelief at disaster affected areas. During naturalcalamities there are two phases of assistance:

1. Relief Measures and 2. Rehabilitation Program.

Tata Corporate Sustainability: Changes,Policy & Recognition

Introducing Changes in the Company’s Article andRules for Sustaining CSR Clause No. 10 of TataGroup

A Tata Company shall be committed to be a goodcorporate citizen not only in compliance with allrelevant laws and regulations but also by activelyassisting in the improvement of the quality of life ofthe people in the communities in which it operateswith the objective of making them self reliant. Suchsocial responsibility would comprise, to initiate andsupport community initiatives in the field ofcommunity health and family welfare, watermanagement, vocational training, education andliteracy and encourage application of modernscientific and managerial techniques and expertise.This will be reviewed periodically in consonance withnational and regional priorities. The company wouldalso not treat these activities as optional ones butwould strive to incorporate them as integral part of



its business plan. The company would also encouragevolunteering amongst its employees and help themto work in the communities. Tata companies areencouraged to develop social accounting systems andto carry out social audit of their operations.Amendments were made to the Articles ofAssociation of the major Tata group companies in the1970s. Newly included was an article stating that the“company shall be mindful of its social and moralresponsibilities to consumers, employees,shareholders, society and the local community. Toinstitutionalize the CSR charter, a clause on this wasput into the group’s ‘Code of Conduct.’ This clausestates that group companies had to actively assist inimproving quality of life in the communities in whichthey operated. All the group companies weresignatories to this code. CSR was included as one ofthe key business processes in TISCO. It was one ofthe eight key business processes identified by TISCO’smanagement and considered critical to the success ofthe company.

POLICY

“No success or achievement in material terms isworthwhile unless it serves the needs or interests ofthe country and its people. -J R D Tata The corporatepolicy of the group encompasses the sustainabledevelopment of all the stakeholders.

The major points included in the corporate policyare following :

• Demonstrate responsibility and sensitivity tobiodiversity and the environment

• Comply with rules and regulations relatingto environment

• Constantly upgrade technology and applystate -of-the- art processes and practices withinstitutional arrangements that will combatlarger issues like climate change and globalwarming

• Create sustainable livelihoods and buildcommunity through social programpertaining to health, education,empowerment of women and youth,employee volunteering,

• Find ways to enhance economic human,social and natural capital for bringing andmaintaining a balance among business,society and environment.11

Recognition

In a free enterprise, the community is not justanother stakeholder in business but is in fact the verypurpose of its existence.”- Jamsetji Nusserwanji , TataFounder, Tata Group.

“Corporate Social Responsibility should be in theDNA of every organization. Our processes should bealigned so as to benefit the society. If society prospers,so shall the organization...”-

Manoj Chakravarti, G M -Corporate Affairs &Corporate Head -Social Responsibility, TitanIndustries Limited in 2004.

Corporate Social Responsibility has always beentaken care of by the Tata group. The founder Mr.Jamshedji Tata used to grant scholarships for furtherstudies abroad in 1892 . He also supported Gandhiji‘scampaign for racial equality in South Africa . Tatagroup has given country its first science center andatomic research center . “The wealth gathered byJamsetji Tata and his sons in half a century ofindustrial pioneering formed but a minute fraction ofthe amount by which they enriched the nation.Jamshed Irani, Director, Tata Sons Ltd, says, “TheTata credo is that ‘give back to the people what youhave earned from them’. So from the very inception,Jamshetji Tata and his family have been following thisprinciple.” (a statement on the Tata group’s websitewww.tata.com).

In July 2004, B. Muthuraman, Managing Director,Tata Steel Limited (TISCO) announced that in futureTISCO would not deal with companies, which do notconform to the company’s Corporate SocialResponsibility (CSR) standards. Speaking at theannual general meeting of the Madras Chamber ofCommerce and Industry,

He stated, “We will not either buy from or sell tocompanies that do not measure up to Tata Steel’ssocial responsibility standards.”

Commitment Towards Nation Building

Health Infrastructure

1. Tata Main Hospital, Jamshedpur, 2. TataMedical Center, Kolkata 3. Tata Memorial Hospital,Mumbai, ICU in Joda and Balangpur, CHC in Bariand Kuhika, Hospitals in Gobarghati,Sukinda, Joda,Belpahar, Belipada and Bamnipal, Lifeline Express -the Hospital on Wheels, Mobile Health Clinics, Centre




for Hearing Impaired Children, Tata MedicaHospitals (Two Big Hospitals are being set in Odisha)

Educational Infrastructure

Institute of Mathematics Sukinda College, Jodacollege centenary Learning centre at XIMB J N TataTechnical Education Centre School of Hope ShishuNiketan.

Sports Infrastructure

1.Tata Athletics Academy 2. Tata ArcheryAcademy 3. Tata Football Academy 4. Tata SteelAdventure Foundation 5. Sports Feeder Centres6. Stadium at Keonjhar.

Preservation of Culture & Heritage

1. Contribution to setting up national Center forperforming arts, Mumbai

2. Tribal cultural centers showcases legacy of ninetribes Jharkhand and Orissa

3. Gramshree mela activities

Conclusion

Deep thinking, full dedication, sensingresponsibility towards society and acting wisely aboutCSR are key factors behind bringing back andmaintaining the general balance in the economy andsocial arena.

In this liberalized era of economy, every businesshouse owe some responsibility towards the society,nation and world in general which provide it with allhuman, material and natural resources. Consideringthe long run growth and sustainable developmentfollowing the norms of CSR , devising new policiesand effective implementation is inevitable to bringand sustain a balance between corporate world andsociety, present generation and upcoming generation,man and nature.

As far as the Tata group is concerned, it has gonea long way in fulfilling its duty and responsibilitytowards the society and the nation. It has reached themasses to elevate their lives, raise their livingstandard, to nurture their dreams and to hone their

skills justifying the statement of the founder ¯

“We do not claim to be more unselfish, moregenerous and more philanthropic than other people.But we think we started on sound andstraightforward business principles, considering theinterests of the shareholder, our own, and the healthand welfare of the employees, the sure foundation ofour prosperity”.

References

• European Commission,Communication from theCommission to the European Economic andSocial Committee and the Committee of theregions: A renewed EU strategy 2011-14 forCorporate Social Responsibility , COM(2011) 681final, p. 6.

• Forerunners in corporate social responsibility ,March 16, 2005 | The Indian Express,www.tata.com

• Innovation is a Journey with a Compass, May 21,2012 www.financialexpress.com

• Mark Goyder, Redefining CSR: From the Rhetoricof Accountability to the Reality of Earning Trust(Tomorrow’s Company, 2003)

• Tata Motors:Corporate Social ResponsibilityAnnual Report 2009-10

• T.E. Lambooy, Corporate Social Responsibility.Legal and semi-legal frameworks supportingCSR, 2010, pp. 10-12.

• Wood, D.J., Towards improving corporate socialperformance (Business Horizons, Vol. 34 No. 4,World Business Council for SustainableDevelopment 1991) pp. 66-73

• www.tatamotors.com/sustainability/CSR-10/content.php

• www.pluggd.in/india

• www.tatachemicals.com, 22 Jan 2008

• w w w . t a t a . c o m / 0 _ o u r _ c o m m i t m e n t /community_initiatives/tcci.html

• http://www.csrtree.com/tata-group-front-runner-csr-practices/


62 Dr. Rajeshwar Nath and Ms. Sweat Bakshi

THE COLA WAR — THE WAR OF TWO GIANTS

Abstract: Duopoly is the market situation when there are only twoplayers.The almost whole of the market segment is divided in these two.According to Cournot’s there happens a strategy game. Each watch themove of others. Since it is highly sensitive market no one can increase theprice as other would gobbled the first share in the market. The players adopta strategy according to which their production depends on another’sproduced. This article is basically a reflection ofPepsi and coke strategiesin the beverages market of India.The model indicates how much the othershould produced if the first player production is known.

Rajeshwar Nath*Sweta Bakshi**

*Dr. Rajeshwar Nath, Associate Professor, Inmantec Business School, Ghaziabad [email protected]**Ms. Sweta Bakshi, Research Scholar, Ranchi University

Literature Review

In the early-1990s, when India began to open up itseconomy to foreign investments, Coke started

plotting a strategy to re-enter the fast-growingmarket. When an initial joint venture with formerBritannia Industries Ltd. chairman Rajan Pillai failedto take off, the company’s attention shifted to theParle Group, which commanded 60 percent of India’ssoft drink market. In a landmark strategic alliance,Coke acquired Parle’s stable of brands – including thepopular Thums Up spicy cola – and gained access toits nationwide bottling and distribution infrastructure.

The deal gave Coke a huge head start. “Just likethat, we acquired a 60 share,” Neville Isdell, then-president of Coke’s Northeast Europe and MiddleEast Group, told Journey magazine soon after theagreement was signed.

We caught up with three instrumental membersof the team that helped architect Coke’s return toIndia and lay the foundation for what is now thecompany’s seventh-largest market: former Coca-ColaIndia CEO Jay Raja, former head of external affairs

for Coca-Cola India Abraham Ninan, and Dalvi. Theyreflected on the milestone, 20 years later:

Raja: Coke, at that stage, had expanded its globalbusiness footprint around the world. India was deemed thelast frontier, and it was an imperative to get back. We hadto not only get permission to restart our business, but alsoto develop a strategy to leapfrog the competition. I wasdetermined for Coke – given its history in India – to remainin control of our destiny. That was the guiding principle Ipursued.

Neville Isdell and I agreed that we should acquireParle’s soft drink trademarks: Thums Up, Limca (acloudy lemon soda), Citra (a clear lemon soda), GoldSpot (an orange soda) and Maaza (a juice-based mangobeverage). Inheriting these brands, plus their franchisesystem and distribution infrastructure, gave us marketleadership on day one. It gave us a profitable businessto build on. We had market-leading brands and theinternational brands of The Coca-Cola Company. The55 bottlers in the Parle system would continue to bottlethe brands they were already selling and have the


63The Cola War — The War of Two Giants

opportunity to produce Coca-Cola brands. We were stillin control of our destiny.

It was risky, however, because we were acquiringcompetitive brands, which was unprecedented for thecompany as an entry strategy. Neville and I agreed to askfor forgiveness later if it didn’t work out – rather thanasking for permission up front. Before signing theagreement, we had to get approval from our Board ofDirectors. Roberto Goizueta categorized it as the deal of thedecade.

Dalvi: For the first time in the history of the company,we had two sugar colas in the same market. Coke was aworldly, sophisticated brand that had been gone for 17years, so it was like an old friend coming back. Thums Up,on the other hand, was a grassroots favorite… a true fighterbrand with a strong sense of nationalism. We wanted tokeep that aura. The marketing challenge was having bothbrands co-exist in a way so that one plus one equaled threeand to outflank our competitor. We had to appeal to peoplewho fondly remembered the taste of Coke and leverage themas brand advocates. At the same time, the future was clearlyin recruiting new drinkers, so we were laser-focused onyouth. An entire generation had grown up without Coke.Some may have tried it while traveling or even tasted aproduct that had been smuggled into India, but the vastmajority had just heard of the brand. Virtual consumption,as we called it. We saw nothing but upside.

Raja: Consumer studies revealed that Thums Upwas preferred, by far, over our primary competitor. Thattold us we had a loyal consumer base that would notswitch, and that we couldn’t afford to overlook ThumsUp to promote Coke. One major advantage we had wasthat a generation of young Indians was drinking ThumsUp, which has a very unique taste profile and strongbrand personality. With Thums Up in our stable, wecould launch a two-pronged strategy against ourcompetitor. We positioned Coke as an aspirational,international brand, and continued to market ThumsUp as a national revered icon.

Ninan: The dominant package size at the time in India,250 ML, was sold for 5.5 Rupees. We decided to re-introduce Coca-Cola in 300 ML glass bottles at 5 Rupees.We up-sized the industry.

Raja: We offered more product for less money.Reporters initially told us, “300 ML is too much for theIndian consumer to drink. They can barely finish a 200 MLbottle!” When I took them around in Agra, they weresurprised to see crates filled with mostly empty Coke bottles.

“You don’t have to finish it to try it,” I told them. “Butyou have to like it to finish it.”

A series of traditional parades signaled Coke’sreturn.

Ninan: Demand for the product was incrediblyhigh. Coca-Cola was literally flying off the shelves.People were picking it up so quickly that shop ownersdidn’t have enough time to chill the bottles. That meantconsumers were getting warm Coke, which caused themto question whether or not they were buying the sameproduct they remembered from 17 years ago. By the timewe got to Chennai, 10 months after launching in Agra,we started chilling the product for three days beforedelivering to the marketplace. We wanted to remindpeople of the true, ice-cold taste of Coke, and that wasthe only way to do that.

Raja: We made the decision to launch in Agra forseveral reasons. First, a new plant was being built nearbyby a bottler who was very eager to become a Coke franchisebottler. Also, the historical significance of the Taj Mahal –one of the nine wonders of the world – would signal thatCoke was returning to India. Finally, from a marketingstandpoint, we wanted to introduce a series of innovationsin a mid-sized market so we could test and then modify ourplans, if necessary, before reaching bigger markets.

Ninan: The Agra launch did more than reintroduceIndia to Coca-Cola. We also delivered 10 industry-firstinnovations that touched consumers, retailers, bottlers andsuppliers and boosted the brand’s visibility in the market.These included the 300-ML “Georgia Green” contourbottle; pallet-loading, open-bay trucks; auto-rickshaws andbicycle pushcarts; the first-ever ‘Dynamation’ digitalbillboards; image-enhanced graphics on the distributionfleet and retail signage; and four-color heat-fired tiles forkirana stores. We also introduced product coding, whichenabled better inventory control, and full-depth stackableplastic crates.

Dalvi: We approached everything with humility.Many people saw our return as a big multinational comingin and threatening the local products they knew and loved.We were very mindful of that. We couldn’t do a lot ofnational advertising because we didn’t yet have a systemin place to deliver the product on that scale. We launchedone market at a time – approximately 17 cities in 17 months– and went as local as we could with our advertising.

Ninan: We knew the best way to celebrate Coke’sreturn would be to organize a Juloos, a traditional Indian



procession. So, in every market, a parade of trucks, vans,trolleys and local bottler sales people sampled free productalong the main thoroughfare. The idea of a Juloos wasprovided by Win Mumby, a member of the India Task Forcethat visited India in the summer of 1992 to develop a re-entry strategy for the company into India. This establishedto the retail trade that “Coke is back and we’re here forgood” and generated a lot of positive PR. There were hugeexpectations among media and the public. To them, thereturn of Coke represented the opening up of India’seconomy to the Western world. TV networks, includingCNN in some cases, covered these market launches andprovided a lot of free publicity.

Raja: We inherited 55 Parle bottlers as franchisees.All of them had to invest in facility upgrades to meet ourquality standards before launching. Every month, one ortwo plants came onboard. For the launch in Calcutta, Isuggested to the local franchise bottler that he invite thehead of Parle to the inauguration so he could see thedifference. He came and was shocked. He said: “Jay, youhave converted a cockroach into a butterfly.”

Dalvi: Our team strongly emphasized the importanceof building the right foundation. It could have been easyfor us to simply blend in by following what the local marketwas doing in terms of quality, packaging and advertisingstandards. We were always driven by a focus on doing theright thing for the business over the long term.

Raja: Sales volume jumped 50 percent in the first twoyears, and we captured almost two-thirds of the market.Bottlers saw a 40 percent volume increase, on average. Theywere making a smaller margin than what they were usedto, but the incremental volume made up for that.

Leading Coke’s return to India was a once-in-a-lifetime opportunity. I was the first pair of boots on theground, and I built a team of young professionals tostart a business from scratch. I’d tell my team that wewere going straight from infancy to adulthood,bypassing adolescence. Coke’s global story wouldn’t becomplete without a return to India.

Dalvi: In my 30 years at Coke, that assignment was,by far, the highlight of my professional career. The chanceto create something out of nothing… to launch the world’slargest soft drink brand in potentially the largest marketin the world… will likely never happen again. We knewIndia would be massive for Coke. There was no doubt inour minds it would be a billion plus-case market. The onlyquestion was how fast we could get there. You can’t saythat about every market.

The 50 bilion rupee soft drink industry is growingat 6 Per cent to 7 per cent annually. In India Coke andPepsi have a combined market share of around 95 percent directly or through franchise? Campa cola has 1per cent share and the rest is divided among localplayers. Industry watchers say fake products alsoaccount for a good share of the balance. There areabout 110 soft drink producing units(60 per cent beingowned by Indian bottlers) in the country employingabout 125000 people.

There are two distinct segments of the market-cola and non cola drinks. The cola segments accountsfor a share of 62 per cent while the non cola segmentincludes soda, clear lime, cloudy lime and drinks withorange and mango flavours.

The per capita consumption of soft drinks in Indiais around5 to 6 bottles compared to Thailand’s 73 ,the Philipines 173 and Mexico 600. The industrycontributes over Rs 12 billion to the exchequer andexports goods worthrRs 2 billion. It also supportsgrowth of industries like glass, refrigeration,transportation, paper and sugar. The department offood processing industries had stipulated that ——contains no fruit juice-labels should be pasted on therefundable bottles.

Soft and aerated drinks were considered productsfor the middle class and affluent. The soft drinkindustry has been urging the government tocategories aerated waters (soft drinks) equitably withother consumer products of mass consumption andremove special excise duty.

The industry estimates that the beverage marketshould grow at twice the rate of GDP growth. TheIndian market should have their growth by at least12 per cent; however it has been growing at a rate ofabout 6 per cent. It may be recalled that Coca Colathe world’s number one player was present in Indiafor a long time in collaboration with an Indianproducer but was shown doors in the late 1970S. Itreemerged in India following the economicliberalization era but after its rival world number twohad already entered in a big way following a long andtough fight against the opposition from domesticproducers.

When Coca Cola re-entered, it installed a newmile stone as it acquired the well flourishing India’stop player –Parley. Since then it is basically a fightbetween the Two American Giants. Others are



playing a peripheral role as adjuncts to THE twoMNCs. World’s third biggest playuer CadburySchereppes had also made an entry but was gobbledup by coke.

When Coca Cola acquired Parley brands, it wasinfact buying the bottling facilities, the marketing network, and established the consumer perfrence duringthe market build up.The brands of parley assumed adrag on the global brand. As the coke was notinterested in those brands, it did not promote them.The result in the short run was a loss of market to thecompetitor. Coca Cola decided to market moreeffectively the Parley brands. It has in its armory cokethums up, Limca, fanta and many others. The latestto enter market was Parley’s erstwhile Rimjimalongside Portello a black currant flavored drink verypopular in Sri Lanka.

Coca cola operates through 35 plants and 16franchises throughout the country and while pepsihas 20 plants but it has 7 more franchisees at 23to16 of its rival . Coca cola claims a market shareof 51 per cent while pepsi has a share of 46 percent. Coca cola had approached the government fora five year extension for divesting 49 per centequity in the bottling subsidiary Hindustan cocacola holdings. It set up the marketing subsidiaryas part of its strategy to integrate all the bottlingoperations both company owned and franchiseebottlers apparently keeping in line its global policy.All together it had bought initially over 38franchisee bottlers.

Both coca cola and Pepsi planned for the launchof lemon version of their products. Both have beenexpanding their non -carbonated drink lines up asconsumers seem to be shifting away from carbonatedsoft drinks. Pepsi co is deliberating whether to comeout with Pepsi twist a cola mixed with lemon. Butwhile both companies have juicy sport drinks, bottledwater and other drink in their line ups but both failedto launch a new national variety of a cola flavoredcarbonated soft drink.

Pepsi co had achieved Rs 3 billion worth ofexports which include processed foods, rice andsoft drinks concentrate. Pepsi co completed thesecond phase of expansion and with this expansionPepsi co was to explore the possibility ofexpanding the export of concentrates to morecountries in addition to the export to Russia andother South African countries.

The methodology adopted here is statisticalinterpretation and application of cournot’s theory

Table 1: The price and sale of the beverages IndianMarket from 2000 to 2015

Year Price /200ml Sell in milion Rs

2000-01 20 243

2001-02 18 262

2002-03 18 279

2003-04 17 291

2004-05 16 310

2005-06 15 330

2006-07 15 359

2007-08 15 373

2008-09 12 388

2009-10 12 403

2010-11 12 420

2011-12 10 443

2012-13 10 453

2013-14 10 460

2014-15 8 479

Table 2: The Price per Litre of Beverages and Sell inLitre in India

Year Price /lt. Sell in Lt.

2000-01 100 2430000

2001-02 90 2911111

2002-03 90 3100000

2003-04 85 3423529

2004-05 80 3875000

2005-06 75 4400000

2006-07 75 4786667

2007-08 75 4973333

2008-09 60 6466667

2009-10 60 6716667

2010-11 60 7000000

2011-12 50 8860000

2012-13 50 9060000

2013-14 50 9200000

2014-15 40 11975000



Solving these two

Qd=16592178-1.53583p

Or 1.53583=16592178-Qd

As the market is basically a duopoly as Pepsi andcoke are the main market leaders and share of otherproducers of soft drinks are insignificant in compareto these two

Share of pepsi-46 per cent=q1Share of coke-51 per cent=q2According to cornet’s model1.53583=16592178-(.46q1 +.51 q2)

Solving

MR=16592178-2QdMR =PRICE =P=401.53583*40=16592178-.46q1-2*.51q2Or 61.43=16592178-.46q1-1.02q21.02q2=16592117-.46 q1Or q2=-16266840-.45 q1

Thus q2=16266840-.45(q1=1,2,3…n)

Similarly for q1=18034910-.55(q2=1,2,3,…n)

It’s clear that while coca cola sells are higher thanpepsi cumulative

With its increased number of franchisee Pepsi,with better supply chain- its availability isomnipresent and inventory in each plant is low butcumulatively it’s higher.

If we put P=0 THE market POTENTIAL ISKNOWN.

References

1. Gyval Young Witzel-Michael Kaul, The sparklingstory of coca cola Witzel

2. LONNIE Bell, The story of coca cola

3. Mark Pendergrast, For God country and coca cola



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