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JOURNAL OF HUMAN AND WORK MANAGEMENT (Bi- annual Journal of FMS, Manav Rachna International University) Patrons Mrs. Satya Bhalla, Chief Patron, MREI Dr. N C Wadhwa, Vice Chancellor, MRIU Dr. Prashant Bhalla, President,MREI Dr Amit Bhalla, Vice President, MREI Editor-in-Chief Prof. Chavi Bhargava Sharma Editor Kaushlendra Mani Tripathi Editorial Advisory Board Prof. N K Chadha University of Delhi, Delhi

Prof. Juhani Nieminen, Lahti University, Finland

Prof. Chandrika Parmar University of Oxford, UK

Prof. Sanjay Srivastava, Manav Rachna University, Faridabad

Dr. Sourabh Bhargava Carnegie Mellon University, USA

Prof. C P Singh GGS Indraprastha University, Delhi

Prof. P K Jain Nohan Lal Sukhadia University, Udaipur

Prof. Shri Prakash, BIMTECH, NOIDA

Prof. Sandeep Patnaikm GALLUP Corporation, USA

Shri N P Singh, DIPR-DRDO, Delhi

Prof. Satvir Singh IHM, Faridabad

Dr. Neetu Purohit, IIHMR, Jaipur

Prof. S K Srivastava, Gurukul Kangri University, Haridwar


Dedicated to Our Visionary Founder

Dr. O P Bhalla (1947-2013)


JOURNAL OF HUMAN AND WORK MANAGEMENT Volume 2

July 2014

CONTENTS

Editorial M. P.I. Bondings and Values' Dynamics in E-commerce System in India Priyanka Verma Critical vs. Constructive Position of Emotional Intelligence to Workplace Performance Vandana Chopra Managing People: The Applied Psychology of Handling Human Problems in Management Aastha Dhingra TV Advertisements: Influence on Buying Behavior of Consumer Dr. Ruchi Sharma A Study of Foreign Direct Investment in Service Sector in Indian Scenario Arindam Banarjee "Management of Humanitarian Supply Chain Response"-An Oriental India's Best Practice of Asoka The Great Dr. S P Rath An Evaluative Analysis of Service Quality Gap Using SERVQUAL: A Case of Private Bank in NCR Dr. Gopal Singh Latwal. Dr. R K Sharma and Ravi Dutt The Impact of Employee's Job Satisfaction on Job Attitude and Behavior: A study of Academic Sector Jitendra Kumar Singh & Mini Jain Educational Management and Customer Participation at Secondary Education Level in an Educationally Backward District of Jammu and Kashmir Amira Wali

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JOURNAL OF HUMAN AND WORK MANAGEMENT Volume 2

December 2014

CONTENTS

Power as Base for Inter State Disparities of Income Gautam Negi and Shri Prakash Performance Appraisal System (PAS)- A vital HR Sub System for Public Sector Banks in India I K Kilam, Dr. S Banarjee and Dr. N C Wadhwa A Brief Overview of the Evoluation and Reforms in Corporate Governance Niyati Choudhary and Dr. Kamlesh Gakhar Atmospherics: Will it Work for Indian Apparel Retail Stores Ubha Savita and Mukesh Malik Organisational Behavior and Performance of Woman Employees with PTSD and its effects on Employee Turnover Pooja Mohanty and Debiprasad Das A Study of the Relationship Between Procrastination, Stress and Health amongst College Students Dr. Amit Abraham, Dr. Priyanka Masih and Neha Agarwal Customer Relationship Management: A Vision for Library Ramveer Sagar and Bindu Aggrawal

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From the Editor's Desk It is only when one goes through the grind that a meaningful story is born. This is the story of our journal too. Due to unforeseen circumstances and the untimely demise of our Founder Visionary Dr OP Bhalla there was a setback to the publication of the journal and it was not possible to publish it as per the deadlines. We are grateful to all the researchers for bearing with us and we apologize for the inadvertent and unintentional delay. This journal is dedicated to our Founder Visionary Dr OP Bhalla who initiated a movement called Manav Rachna Educational Institutions. The motto ' creating better human beings' is self explanatory and is the bloodline of all that we do. To carry forward the rich legacy of the visionary Dr OP Bhalla a trust dedicated to nation building and philanthropy has been instituted. This trust rightly named Dr OP Bhalla Foundation is working on the development and upliftment of various sections of society. This time was also a time for introspection and revisiting all that we were doing so as to ensure that the values and principles of quality and excellence that our Founder Visionary believed in were firmly ensconced into everything we did. This led us to relook at research and one issue that we felt that needed to be looked at is the kind of research that is being undertaken currently. Research should lead to insights that bring about beneficial change in the people and society. Research should feed into the various streams of society leading to necessary changes that bring about understanding about issues and problems and what action can be taken to resolve those problems. This is going to be the deciding parameter /criteria on which we will henceforth publish all papers in this journal. We know you will continue to support us in this endeavor so that whatever we do adds meaning and value to the world of knowledge and to the society and people. 'Research consists in seeing what everyone else has seen and, to think what nobody else has thought – Albert Szent-Gyorgyi '

Chhavi Bhargava Sharma Editor –in-Chief


©Journal of Human and Work Management July, 2014, Vol. 2, No.1

Faculty of Management Studies, MRIU (ISSN2320-8384)

M.P.L Bondings and Values' Dynamics in E-commerce System in India Priyanka Verma Assistant Professor, FIP Manav Rachna International University, Faridabad. Email: priyanka.fis@mriu.edu.in

The modern trading and commerce concepts have been changing day by day due it rapid growth of science, technology, management, psychology and laws' bondings (M.P.L.BONDINGS) since 17.10.2000 in India and abroad.(i.e. enforcement of THE INFORMATION TECHNOLOGY ACT,2000). In the present research project, an attempt has been made to study the multi-disciplined (factorial/ functional) and applied aspects of M.P.L.BONDINGS, morality, ethics and philosophical issues as reflected in e commerce, advertisements and depiction of female persons directly and or indirectly in our Indian system. RESEARCH PROBLEM- To Study M. P. L. BONDINGS AND VALUES' DYNAMICS IN E-Commerce SYSTEM IN INDIA SAMPLE-200 MALE CUSTOMERS+200 FEMALE CUSTOMERS from DELHI, MUMBAI, BANGALORE AND CHENNAI-50 EACH

Research Methodology and tools used: 1) C.R(t) test. 2) Dr. Meenakshi, Dr. VD Bhatnagar & Mrs Priyanka Verma “MPL Bondings perception measuring scale (2009) Constructed, standardized, reliable and valid for Indian Customers” New Theories & Equations have been postulated by the researcher which will be detailed in full paper. Keywords: MPL Bondings, e-commerce, CRM, churn and grace management

Introduction

Objective of the paper

Management, laws and psychology i.e. tridisciplined knowledge mixed bondings have been essential and inseparable facts in multieconomic activities in ancient India. Due to rapid growth of science and technology in India and abroad, new concepts namely e-business, e- marketing, e-commerce and e-tqm have been gaining grounds for 10years and more.

In the present research paper an attempt is made to study Customer Relationship Management , E Business, E-Commerce, Management. Psychology. Law(M.P.L) Bondings, morality, ethics and philosophical issues as reflected in e-commerce as reflected in Telecom Service companies in India (in selected cities)

Whatever may be the nature scope and functional dimensions of e-commerce, we must understand management, psychology and laws bonding influence on these multi-factorial economic activities. The Researched being M.Sc and MBA degrees holder has selected the problem to study, analyze and suggest for its functional areas with remedies in the changing dimensions for the collective good.


M.P.L bondings and values' dynamics in e-commerce system in India

The main objectives which need to be fulfilled through this project are given below: 1. To analyze churn and grace pertaining to MPL Bondings and changing values in E-Commerce. 2. To study, analyze and suggest for effective psycho legal and applied management remedies in Customer relationship management in E-Commerce in respect of the selected Telecom Service companies with special focus in selected Metro city Region. 3. To study and analyze the relevant policies and schemes on the E-commerce and M.P.L Bondings in the selected management, suggest for review report on the research problem- for maximization of collective good. 4. To study and analyze the overlapping areas of C.R.M, e-commerce and M.P.L Bondings with their applied utility and accountability, as per research limits and objectives etc. 5. To study and analyze the above research problem in Indian metro cities. 6. To formulate certain models for achieving desired goals in the selected research project i.e. telecommunications service companies. 7. To use mathematics and psycho-statistics methodology and designs for ascertaining, regulating, controlling, changing and harmonizing various elements under the research project. Basic Hypotheses: 1. The e-customers in morality, ethics, philosophical concepts and MPL bondings may not differ themselves. 2. The male and female customers in morality, ethics, philosophical concepts and MPL bondings may not differ themselves.

3. The e-customers, representing from different metro cities may not differ themselves in morality, ethics, philosophical concepts and MPL bondings. 4. The dynamics of morality, ethics, philosophical concepts and MPL bondings may not differ country wise. 5. The multi-factorial impacts of morality, ethics, philosophical concepts and MPL bondings as reflected in e-commerce may not differ themselves. Research Paradigm tabulated e commerce perception scores

Details Number Mean Standard Deviation

Total

Total e-commerce Delhi Mumbai Bangalore Chennai users Male Female Male Female Male Female Male Female Male Female N=50 N=50 N=50 N=50 N=50 N=50 N=50 N=50 N=200 N=200 -1 -6 -2 -7 -3 -8 -4 -9 -5 -10 M=80 M=70 M=85 M=72 M=90 M=75 M=88 M=72 M=85.75 M=72.25 15.25 15.66 N=100 M=75 S.D= 15.45

15.66 14.06 N=100 M=78.5 S.D= 14.86

21.77 18.78 N=100 M=82.5 S.D= 20.27

12.46 10.4 N=100 M=80 S.D= 11.43

16.29 14.73 N=100 M=79 S.D= 15.51

Results-All t values are found significant and valid so all null hypothesis were rejected. CR(t) values for (1)&(2), (1)&(3), (1)&(4), (1)&(6), (2)&(3), (2)&(4), (2)&(7), (3)&(4), (3)&(8), (4)&(9), (5)&(10) are significant and valid. All ethical, moral, philosophical and M.P.L Bondings have diversities in these areas. Public comfort, public health, public progress, public satisfaction ranges must be protected by ourselves. After studying the problem the researcher has selected the following models. 1) AIDA Model–E-commerce and M.P.L bondings a. Attention gaining of customers b. Interest creation in customer to desired properly/product/ services c. Desire creation in customer d. Action processes (Proper) We can include Advertising, ethics, morals and functional management and other branches of management, consumer psychology plus applied psychological concepts. 2) Customer Acquisition Model - E-commerce and M.P.L bondings Customer Acquisition, learning, conditioning, persuasion, convincing to buy/ purchase such product/ service/ interests. M.P.L (bondings are must for such models)


M.P.L bondings and values' dynamics in e-commerce system in India

3) SCOPE Model- E-commerce and M.P.L bondings Suppliers, customers, owners, partners, Employees and Management, psychology of law bondings (at national and international levels)

These models will satisfy global/ national demands, values and overall development of participants especially in maintaining progressive development as reflected in modern T.Q.M (Total quality management) and information technology systems, M.P.L Bondings and e-commerce etc.

4) SMART Model- E-commerce and M.P.L bondings Strategy for customer value, metrics using to guide customers. Alignment with product, organization and CRM objectives. Redesign business processes to changed situations. Technology using for originating, regulating, controlling and changing MPL bondings and CRM dynamics. Important observations and facts l Economic lifestyle influence CRM as reflected in churn and grace management <e-commerce< M.P.L Bondings. l Professional qualification influence CRM as

Above customer value model shows that the asset base is always surrounded by customer value and related areas which is self explanatory. Let me propose another model. Customer MPL Bonding and applied management model in e-commerce.

reflected in churn and grace management < e -commerce< M.P.L Bondings. l Social mobility rate influence CRM as reflected in churn and grace management < e-commerce< M.P.L Bondings. Utility of CRM, MPL Bondings, psycho legal aspects with respect to E-Commerce. In modern times we must examine all problems by using interdisciplinary and intra-disciplinary approaches. Especially e-marketing, e business and e-commerce are the activities which contain all functional and legal confirmation. Following models have been drawn, projected and explained for the above concepts: 1. MPL Bondings »Action plans » AIDA Model » E-commerce 2. MPL Bondings »Action plans»Customer Acquisition and Retention Model » E-commerce 3. MPL Bondings »Action plans » SCOPE Model » E-commerce 4. MPL Bondings »Action plans » SMART Model » E-commerce

Now the model given above is totally a CRM model in e-commerce with M.P.L Bondings. It is showing clearly the interdependence of Law and psychology and related areas. These three aspects play role of catalyst, regulator and controller for customer loyalty etc. Specific or general models may be adopted in our Indian e-commerce activities subject to MPL bonds under TQM system or sub systems. Consolidated suggestions 1. Management, Laws and psychology i.e. tri -disciplined facts have essential relationship in e-commerce and overlapping functional areas. New researches must be done in these areas.


M.P.L bondings and values' dynamics in e-commerce system in India 2. The moral, ethical, philosophical and M.P.L bondings are sine qua non of all actions and interactions in the modern world specifically in e-business, e-commerce and allied functional areas. Functional researches must be conducted in India and abroad. 3. The metro cities in India and abroad show fast socio-economic mobilities and multi variate dynamics so need for action oriented and applied researches shall be our functional viability. 4. The major e-commerce areas namely a. B2C Business to consumer b. B2B= Business to Business c. Consumer to Consumer d. C2B= Consumer to Business e. G2C= Government to consumers f. G2B= Government Business g. B2G= Business to Government h. C2G= Consumer to Government I. G2(P+-C)=Government to Public plus minus consumers j. (P+-C)2G = Public plus minus consumers to Government. k. MR2AR= Mixed relations to any relations etc All the aforesaid must be studied within national and global interests. The applied and functional plus minus co existential researches must be conducted by interested persons for procuring public necessities, goods and progress. 5. Proposed models (as written by researches) must be adopted in modern e-commerce and M.P.L Bondings dynamics for Indian context as well as global aspects.

Bibliography:1. Matthew L. Nelson, Michael J. Shaw, Troy Strader, Value Creation in E-Business Management, 15th America's conference on information systems. AMCIS2009. 2. Ralph Berndt, E-Business-Management, Springer Publications,2002. 3. Shyam Ranganathan, Ethics and the history of Indian philosophy, published by Narendra Prakash Jain 4. Murray E. Jennex, Knowledge management in modern organizations, published by Idea Group Inc,2007 5. Thomas L. Saaty, Luis Gonzalez Vargas, Models, methods, concepts & applications of the analytic hierarchy process, published by Kluwer's Academic, 2000 6. Leo P. Chall, Sociological abstracts, Volume 34, Issue 5,2003 7. Barney Erasmus, Ben Swanepoel, Marius Van Wyk, Hans Schenk, South African Human Resource Management, Berne convention Publisher, 2003. 8. David A. McEntire, Disciplines, disasters, and emergency management, Charles C Thomas. Publishers, 2007 9. Steve M. Jex, Thomas W. Britt, Organizational psychology: a scientist-practitioner approach, John Wiley and Sons publishers.2008 10. P. J. Louis, Telecom management crash course: managing and selling Telecom services and products, Mc-Graw Hill. 2002


ŠJournal of Human and Work Management July, 2014, Vol. 2, No.1

Faculty of Management Studies, MRIU (ISSN2320-8384)

Critical v/s Constructive Position of Emotional Intelligence to Workplace Performance Vandana Chopra Research Scholar, Department of Psychology, University of Delhi

ABSTRACT: Emotional intelligence, a widely studied construct in contemporary organizational and business settings, has both a developmental past and promising future. In the current article, the concept of emotional intelligence is reviewed with direct evidence relevant to organizational behavior. Several individual studies published demonstrate contrasting views of EI in domains of organizational functioning. The construct has been found to have beneficial as well as cynical associations with workplace correlates. Giving an overview of the empirical research on the role of emotional intelligence in organizational settings, the current article heaves light on incongruous aspects of the emotional intelligence and workplace performance. The present article can be studied in three sections. The first section provides conceptual understanding of EI, historical antecedents of the construct, two major theoretical approaches of research in the field and measures of EI based on ability-model and mixed-model approaches. In the second section, people's work performance and EI's relation to it is described. In the final section, controversial role of emotional intelligence in determining occupational success is highlighted. Finally, some conclusions and suggestions for future research on EI in workplace settings are documented. Keywords: emotional intelligence; models; measurement tools; favorable workplace outcomes, critics.

Introduction Emotional Intelligence (EI) is a relatively recent concept, but it has important implications for workplace and employee performance and management in organizations. The concept has spawned a bout of both research and applied activity and has captured the public attention. In all of the recent advances in work on emotion in organizational life, the concept has been the target of interest for both academics and practitioners/consultants. Researchers are seeking conceptually to distinguish, to define, and to validate its relationship with important work attitudes and outcomes, while practitioners are seeking to maximize potential employee performance through identification, selection, and training of critical competencies involving the emotional abilities of their employees. Attesting to this dual interest is the abundance of books, consulting agencies, workshops, journal

articles, conference papers/symposia, and organized networks of individuals where both practitioners and academics can turn to for discussion of intriguing questions and solutions to organizational problems. In this article, the concept of emotional intelligence is reviewed with direct evidence relevant to organizational behavior. The concept evolved in last two decades from the theory of social intelligence has gained wide popularity by behavioral practitioners of education, management and consulting. Scientific literature confirms that performance of employees with high emotional intelligence surpass those with low emotional intelligence. A variety of tools, methods and training interventions have been designed to assess and improve emotional intelligence of managers, leaders and subordinates and thereby increasing the success of organization. Human resource professionals


Critical v/s Constructive Position of Emotional Intelligence to Workplace Performance

and corporate executives have begun to include emotional intelligence into their daily vernacular and professional practices. Recent academic literature highlights the importance of EI as an essential forecaster of various work provinces like job performance, negotiation, leadership, work engagement, work-family conflict, stress and emotional labour (Ashkanasy & Daus, 2002; Fulmer & Barry, 2004; Humphrey, 2002, 2006; Humphrey, Pollack, & Hawver, 2008; Jordan, Ashkanasy, & Hartel, 2002). In short, EI is increasingly becoming popular within industrial and organizational psychology as a determinant of occupational success (Palmer, Gardner and Stough, 2003). Although EI has gained wide acceptance by organizational professionals and practitioners, the construct is not free of controversies. One area of concern is that the proponents of EI have become fragmented, with various scholars and practitioners of EI advocating different definitions, assumptions, models, measures, and outcomes (Locke, 2005). EI measures have been reported as psychometrically flawed instruments lacking discriminant and predictive validity to guarantee their use. The predictive validity of EI measures has been claimed to overlap with standard personality factors. The incremental validity of EI measures in predicting job performance and other work outcomes above the contribution of established predictors such as cognitive ability and Big Five personality have also been challenged in scientific writings (Conte, 2005). Furthermore, the literature is replete with unsubstantiated generalizations, with much of the existing evidence bearing on the role of EI in occupational success either anecdotal or impressionistic and/or based on unpublished or in-house research (Zeidner, Roberts, & Matthews, 2004). Thus, EI is a highly contested construct in the community of academicians and researchers. In this article, a careful look has been given to the paradoxical role of EI in organizational settings. A review of scientific literature on the construct of EI and how it has fared for organizational behavior is presented. The article summarizes the most widely accepted EI models and measurement instruments and reviews the

research linking EI to workplace performance outcomes. Consideration is given to an emerging literature that promotes the assessment, training, and the individual's utilization of emotional intelligence in the workplace. Controversial empirical critics of EI as a construct essential for workplace performance are documented with conclusions and implications for practice in future. EMOTIONAL INTELLIGENCE: CONCEPTS, MODELS AND MEASUREMENT The budding research on EI contains distinct terminology, ranging from emotional intelligence (Salovey & Mayer, 1990); emotional competence (Goleman, 1995); emotional literacy (Cooper & Sawaf, 1997), emotional quotient (Cooper, 1997), personal intelligences (Gardner, 1983) etc. The sub-divisions of EI are also variously referred to as “branches” (Mayer, Caruso, & Salovey, 2000), “factors” (Bar-On, 1997), or “competencies” (Boyatzis, 1982). Diverse opinions exist stating and reporting scientific viability of the construct. On the one hand, it has been labeled as “an elusive construct” by Davies, Stankov & Roberts (1998), and on the other, it has been said to matter twice as much as IQ by Goleman (1998). It has also, according to some, “proven resistant to adequate measurement” (Becker, 2003). For Cherniss (2000), EI provides the basis for competencies important “in almost any job” whereas for Mathews, Zeidner &Roberts (2002) EI is “a myth rather than science”. Such apparent diversified opinions on EI have divided the field with multiple conceptual definitions, models and measurement tools. The study of emotional intelligence has historical roots in Thorndike's (1920) theory of multiple intelligences. He classified intelligence into three broad types; mechanical, abstract and social intelligence. According to pioneer researchers of field of emotional intelligence, Thorndike's theory of social intelligence is the foundation stone of contemporary emotional intelligence literature. Thorndike (1920) defined social intelligence as “the ability to understand men, women, boys and girls- to act wisely in


Vandana Chopra human relations” (p. 228). Social intelligence, as Thorndike described the concept, centers on understanding the motives and behaviors of one's self and others, and using that information to make optimal decisions, which appears to have similarities with the contemporary view of emotional intelligence. Following Thorndike, Gardner's theory of multiple intelligences has been considered valuable to emotional intelligence research literature. Gardner proposed that Intrapersonal and Interpersonal, two divisions of Personal intelligence, help an individual to understand self and others. High Intrapersonal intelligence gives a better awareness and understanding of one's own feelings whereas high interpersonal intelligence helps to connect with others by effectively understanding them. Gardener's view closely allies to the existing terminology of the construct defined by distinct models and conceptual definitions. Earlier works by Thorndike and Gardner was extended by Peter Salovey and John Mayer (1990) with their ability-based model of EI. The researchers are also accredited to coin the term 'Emotional Intelligence'. They view El as, “a set of skills hypothesized to contribute to the accurate appraisal and expression of emotion in oneself and others, the effective regulation of emotion in self and others, and the use of feelings to motivate, plan, and achieve in one's life” (Salovey & Mayer, 1990, p. 185). Their current model on El comprises of four cognitive components : (1) perception of emotion (in self and others); (2) assimilation of emotion to facilitate thought; (3) understanding of emotion; and (4) managing and regulating emotion in self and others (Mayer & Salovey, 1997). The first comprehensive performance test of EI, the Multifactor Emotional Intelligence Scale (Mayer, Caruso, & Salovey, 1999), which led to a briefer test, the Mayer–Salovey–Caruso Emotional Intelligence Test (MSCEIT, Version 2.0; Mayer, Salovey, & Caruso, 2002a) is based on the ability-based model of Salovey and Mayer. Soon after the concept was introduced by Salovey et al., Daniel Goleman's book: Emotional Intelligence: Why it can matter more than IQ?, published in 1995 brought the idea to

the forefront of public attention. He proposed that harmony and coordination of individual's emotions determine how intelligently he will act and will ultimately be successful in life. Goleman (1995a) defines El as,.....being able to rein in emotional impulse; to read another's innermost feelings; to handle relationships smoothly, (p. xiii). Goleman argues,...In a sense we have two brains, two minds - and two different kinds of intelligence: rational and emotional. How we do in life is determined by both...ordinarily the complementarity of limbic system and neocortex, amygdala and prefrontal lobes, means each is a full partner in mental life (p. 28). Based on a host of case studies, anecdotal accounts, and evaluation studies, Goleman (1998) concludes that the major qualities differentiating successful from unsuccessful executives are the competencies underlying (or presumably nested within) EI. As per Goleman's formulation, EI encompasses such characteristics as motives, traits, anaspects of one's self-image. In short, EI designates the potential to become skilled at learning certain emotional responses. Goleman's contribution to the field was enhanced by Emotional Competency Index (ECI; Sala 2002), a proprietary instrument, developed within the Hay Group. These early works on the importance of emotional intelligence influenced Reuven BarOn who recognized the potential of measure and constructed a multidimensional questionnaire EQ-I. The Bar-On model provides the theoretical basis for the EQ-i, which was originally developed to assess various aspects of this construct as well as to examine its conceptualization. According to Bar-On model, “emotional-social intelligence (ESI) is a crosssection of interrelated emotional and social competencies, skills and facilitators that determine how effectively we understand and express ourselves, understand others and relate with them, and cope with daily demands”. El, in terms of Bar-On and Parker (2000), can be understood and defined as… abilities related to understanding oneself and others, relating to people, adapting to changing environmental demands, and managing emotions (p. 1). Bar-On


Critical v/s Constructive Position of Emotional Intelligence to Workplace Performance (1997) characterizes EI as “an array of non cognitive capabilities, competencies, and skills that influence one's ability to succeed in coping with environmental demands and pressures� (p. 16). EQ-i scale assesses five distinct competencies and skills labeled: Intrapersonal, Interpersonal, Adaptability, Stress management and General mood. By 2007, the wide diversity of those interested in EI was matched by the wide diversity in the conceptions of EI they employed. Some researchers defined EI as an ability to reason about emotion; others equated the concept with a list of traits and competencies such as achievement motivation, flexibility, happiness, stress management, adaptability and self-regard. Still others found the addition of such traits, which seemed to be ad hoc, to be troubling, and wondered whether a theoretically sound conceptualization of EI could be identified. (Locke 2005). Presently, in scientific literature, EI is studied and measured by two approaches: four-branch ability-based model by Mayer and Salovey (1997) measured using the MSCEIT (MayerSalovey-Caruso Emotional Intelligence Test; Mayer, Salovey, & Caruso, 2002) and mixed models of emotional competencies represented by the EQ-i (Bar-On, 1997) and the ECI (Sala, 2002). The ability model views emotional intelligence as a standard intelligence and argues that the construct meets traditional criteria for intelligence (Mayer & Salovey, 1997; Mayer, Salovey, & Caruso, 2008a). Proponents of the ability model measure emotional intelligence as a mental ability with performance assessments that have a criterion of correctness (i.e., there are better and worse answers, which are determined using complex scoring algorithms). Mixed models are so called because they mix the ability conception with personality traits and competencies such as optimism, self-esteem, and emotional self-efficacy (see Cherniss, 2010, for a review). Proponents of this approach use selfreport instruments as opposed to performance assessments to measure emotional intelligence (i.e., instead of asking people to demonstrate how they perceive an emotional expression accurately, self-report measures ask people to

judge and report how good they are at perceiving others' emotions accurately).In short, mixed models of EI have been considered a mixture of personality-type items and behavioral preferences (Mayer, Salovey, and Caruso, 2000a,b; McRae, 2000). Debates on the ideal model to measure emotional intelligence can be seen in scientific writings. On the surface level, self report measures are more preferred as they are cost-effective, less time consuming and easy to administer. However, due to the fact that respondents can provide socially desirable responses, self report measures are related weakly to performance assessment. Moreover, they have also been known to lack discriminant validity from existing measures of personality (Brackett & Mayer, 2003; Brackett et al., 2006). In contrast, The MSCEIT, performance based measure of EI based on ability model, is known to have a factor structure congruent with the theory on which it is based. It has been proved reliable and distinct from established measures of personality, and not susceptible to response distortion (Barchard, 2001 Brackett & Mayer, 2003; S; Lopes, Salovey, & Straus, 2003; Mayer et al., 2003). The MSCEIT has also been considered incrementally valid in the prediction of important workplace outcomes, including stress management and leadership potential (Janovics & Christiansen, 2002; Lopes, Grewal, Kadis, Gall, & Salovey, in press). In a meta-analysis of 13 studies that compared ability tests (e.g., Mayer, Salovey, & Caruso, 2002) and tests based on mixed model perspective (e.g., EQ-i; Bar-On, 1997), Van Rooy, Viswesvaran, and Pluta (2005) reported that performance tests were relatively distinct from self-report measures (r = 0.14). Self-report measures have also been considered to be more susceptible to faking than ability-based tests (Day & Carroll, 2008). In sum, diverse concepts, models and measurement tools of EI suggest that research on EI is still in its incipient stages. There is much to be learned about EI. However, it is to be noted that rather than arguing about the strengths and weaknesses of various models, it is more useful to consider how importance the construct is for


Vandana Chopra

effective performance at work. Furthermore, as the pace of change increases and the world of work make ever greater demands on a person's cognitive, emotional, and physical resources, this particular set of abilities and competencies will become increasingly important in near future. EI: CONSTRUCTIVE POSITION TO WORKPLACE PERFORMANCE A more complete understanding of EI requires an appreciation of how its measures relate to workplace outcomes. In this section, an attempt to create a condensed version of what one might take away from reading, one by one, a series of articles relevant to this literature is made. The summary conveys some of the major topics of study, some of the methods, and some of the many findings of positive contribution of EI to workplace performance. EI has been publicized as a panacea for modern business. More and more organizations are realizing that EI skills are essential component of any organization's management philosophy (and subsequent success). A survey of benchmark practices among major corporations found that four out of five companies are now trying to promote EI in their organizations. Three decades of psychological assessment research has vindicated the importance of taking social and emotional competencies into consideration when attempting to predict occupational effectiveness (e.g. Boyatzis, 1982; Campbell, Dunnette, Lawler, & Weich, 1970; Howard & Bray, 1988; Kotter, 1982). In the Time article which helped popularize EI, Gibbs (1995) wrote, “In the corporate world . . . IQ gets you hired but EQ gets you promoted” (p. 59). Today, EI measures are widely used for placement, selection, training, promotion and career development. Various empirical researches report positive contribution of emotional intelligence to several aspects of workplace performance (Cote´ & Miners, 2006; Goleman, 1995; Semadar, Robins, & Ferris, 2006). Emotional intelligence is hypothesized to influence the success with which employees interact with colleagues, the strategies they use to manage conflict and stress, and overall job

performance (Ashkanasy & Daus, 2005; Lopes, Cote´, & Salovey, 2006a). Employees with higher emotional intelligence also received better peer and / or supervisor ratings of interpersonal facilitation, stress tolerance, and leadership potential than those with lower emotional intelligence (Lopes et al., 2006b). Emotional intelligence has been associated with the extent to which managers conduct themselves in ways that are supportive of the goals of the organization, according to the ratings of their supervisors (Cote´ & Miners, 2006). When compared with leadership dimensions, EI has been found to be positively correlated with transformational leadership and work group outcomes (George, 2000). Prati, Douglas, Ferris, Ammeter, and Buckley (2003) developed a conceptual model for the merging of emotional intelligence, leadership, team processes, and outcomes, and argued that emotional intelligence skills were critical for effective team leadership and outcomes dimensions. Others (Coetzee & Schaap, 2004) have reported similar findings from a survey study of 100 South African managers regarding transformational leadership, transactional leadership and emotional intelligence. They found that transformational leadership was related to overall emotional intelligence, as well as two branches (identifying and managing emotion). They also found that transactional leadership was related to the managing emotion branch, and nontransactional, or 'laissez-faire' leadership was inversely related the using emotion branch. Goleman (1998) asserted that irrespective of the model of leadership that is being examined, successful leadership is largely determined by the need of leaders to possess emotional intelligence. High level of emotional intelligence has also been found to be positively correlated with job performance in various empirical investigations. Daus, et al., (2004) reported that aspects of emotional intelligence are critical for effective job performance and the prevention of negative stress outcomes from the job. Furthermore, aspects of emotional intelligence predicted job satisfaction and inversely predicted turnover intentions (Daus, et al., 2004).


Critical v/s Constructive Position of Emotional Intelligence to Workplace Performance

Lopes et al. (2004) demonstrated the relationship between emotional intelligence and work outcomes (dependent upon job performance). Those scoring higher on the EI measures were found to receive better merit, held superior company positions and received better appraisals from peers and supervisors. Stress tolerance and leadership potential were also found to be higher in such participants. Besides individual performance, EI has also been correlated positively with group performance. Rice (1999) studied 26 teams of claims adjusters working in the financial services center of a large insurance company. She found that teams with higher average emotional intelligence received higher performance ratings for managers, particularly for customer service. Emotional intelligence has been also found to contribute to more effective team functioning and performance. The relation between emotional intelligence, assessed with a performance measure, and positive workplace outcomes was examined in 44 analysts and clerical employees from the finance department of a Fortune 400 insurance company. Emotionally intelligent individuals received greater merit increases and held higher company rank than their counterparts. They also received better peer and/or supervisor ratings of interpersonal facilitation and stress tolerance than their counterparts. With few exceptions, these associations remained statistically significant after controlling for other predictors, one at a time, including age, gender, education, verbal ability, the Big Five personality traits, and trait affect. Similarly high EI level of supervisor is appreciated by colleagues and subordinates. Studying two small groups of mangers along with 108 of their subordinates, Giles (2001) found a positive relation between aspects of subordinates' commitment to their organization and supervisor's EI. Customer's relations have been also favorably influenced by EI dimension. It has been found that EI is more important among workers who have the most direct contact with customers. Although studies of emotional intelligence are only just now emerging, there is reason to be cautiously optimistic. It is hereby

suggested that there is evidence that emotional intelligence research, education and training may in the end prove beneficial. EI: CRITICAL POSITION TO WORKPLACE PERFORMANCE According to Pfeiffer (2001), “A major weakness with the extant literature of EI is the lack of scientifically sound, objective measures of the construct”. Becker (2003) purported measures of emotional intelligence as unreliable, invalid or both. Zeidner et al. (in press) reported that “current exciting surrounding the potential benefits from the use of EI in the workplace may be premature or even misplaced.” Barrett at al. (2001), one of the most vociferous group of critics of the EI construct, have argued that the irrational exuberance surrounding EI stems from the concept being inappropriately linked to past research, exaggerated claims, and the fact that its major proponents come from particularly prestigious colleges. Though widely implemented concept in occupational settings, the claimed role of emotional intelligence in workplace is not free of detractors. The field of EI is not free of negative doubtful views, criticism and irresponsible claims in the popular press. Empirical researches provide evidence about controversial role of EI in the workplace. Landy has raised objections with the pragmatics of definitions, research and application of EI construct. Landy's criticism addresses three broad areas: (1) There is a lack of scientific scrutiny of measures of emotional intelligence; (2) the construct is rooted in the (discredited) concept of “social intelligence;” and (3) research in emotional intelligence is characterized by weak designs that have yet to demonstrate incremental validity over traditional models of personality and social/organizational behavior, and it is therefore premature to apply the results. In this part of the article, empirical studies critiquing role of EI in organizational performance and individual development are summarized to understand the paradoxical view of construct in organizational setting. Literature documents several studies depicting negative results of EQ in organizational settings. A recent special issue of Leadership Quarterly


Vandana Chopra

(Vol. 13, No. 5) on emotion and leadership did not present any robust evidence showing EI to be predictor of leadership emergence or effectiveness. Indeed, there is very little empirical evidence published in scientific journals indicating that EI is necessary for leadership effectiveness when controlling for personality variables or general intelligence, especially at top leader levels (Buford, 2002; Collins, 2001; Schulte, 2002). In the study by Janovics and Christiansen (2001), two self-report measures of EI, the Trait MetaMood Scale (Salovey et al., 1995) and the Schutte EQ test (Schutte, Malouff, Hall, Haggerty, Cooper, Golden, & Dornheim, 1998), were uncorrelated with assessed job performance. Self-reported EI showed very little convergent validity with cognitive ability, correlated weakly with performance-based measures, and failed to demonstrate criterion-related validity. Slaski (2001) gathered data using EQ-i of 224 middle and senior managers from the UK's largest supermarket chain and found weak correlation of EQ to managerial performance. Managerial performance correlated modestly with the Interpersonal factor of the EQ-i (r = .23), but negligibly with the Interpersonal Factor (r = .01) and weakly with Stress Management (r = .15)and Adaptability (r = .18). Feyerherm and Rice (2002), have yielded findings that directly contradict the apparent trend in this area (e.g., the aforementioned authors found no relationship between EI components and measures of productivity or continuous improvement performance). Antonakis (2003) points out that elevated levels of emotional recognition might not be useful, because individuals could easily gauge and then magnify or misinterpret emotions in others. Conversely, being immune to emotional nuances might be adaptive for leaders, because “they would be able to focus on the mission and would not be derailed by negative emotions, pandering to individuals, and being agreeable� (Antonakis, 2003, p. 357). Thus, despite the widespread acknowledgement that emotion is a resource that influences

behavior; skeptical attitude about the concept of EI thrives. It is seen that writings on EI are a confusing mixture of unsubstantiated opinion and hyperbolic claims, together with serious, but still preliminary, research grounded in psychological theory and careful test development. However, academicians and researchers are determined to trace concrete evidences that prove EI a reliable, valid construct capable of predicting workplace success. Scientific literature also understandbly want to be assured that it is not just hype and old concept dressed up with novel and captivating label. For this, it is important to consider all the evidence so that future research may shed light on these findings leading to development of refined evidence-based EI theory. SUGGESTIONS AND CONCLUSION: In recent years, emotions in the workplace, and especially emotional intelligence, has become somewhat of a 'hot topic' in management. There has been a proliferation of academic books, doctoral dissertations, websites, scienti? c articles, and further popular accounts dealing with EI. With special reference to workplace, it has been claimed that facilitation of EI can improve workplace performance, transformational leadership, team cohesiveness, organizational commitment and supportive organizational climate. However, review of the literature suggests that claims may be premature. First warning sign is that the concept itself has consistently defied a clear and agreed-on definition—a basic scientific requirement. Furthermore, it is still unclear whether emotional intelligence represents anything more than a combination of personality variables and certain aspects of general cognitive ability (Schulte et al., 2004). Allied to this, there seems to be little agreement as to how the construct should be assessed and how it is correlated to workplace dimensions. With regard to the claimed benefits of facilitating emotional intelligence, it is hoped that this review of the literature serves as a reminder that organizations has tended to be attracted to overly simplistic solutions to complex problems. The main aim of the review is to provide a state-of


Critical v/s Constructive Position of Emotional Intelligence to Workplace Performance the-art account of conceptualization, assessment and application of EI to organizational behavior. Given the current evidence base, one cannot escape the conclusion reached by Barchard (2003) that “EI is not the panacea that some writers claim” (p. 856). There are a number of problems with the methodologies used in the research that is used to support the claimed benefits. In order to explore the impact of introducing EI to organizations in more depth, it is important for studies that address these concerns to be carried out in the near future. It is necessary for a science of EI to (1) have an adequate methodology for assessment of the construct; (2) demonstrate its partial (or complete) independence from other, seemingly analogous, concepts; and (3) show how it can explain phenomena in a parsimonious way. Without more convincing evidence emerging from high-quality studies, doubts will remain about the potential benefits of this most elusive form of intelligence. References: Antonakis (2003). "Why “emotional intelligence” does not predict leadership effectiveness: a comment on prati, douglas, ferris, ammeter, and buckley (2003)", international journal of organizational analysis, vol. 11 iss: 4, pp. 355 – 361. Ashkanasy, N. M., & Daus, C. S. (2002). Emotion in the workplace: The new challenge for managers. Academy of Management Executive, 16, 76–86. Ashkanasy NM, Daus CS (2005). Rumors of the death of emotional intelligence in organizational behavior are vastly exaggerated. J. Organ. Behav., 26, 441-452 Barchard, K.A. (2001). Emotional and social intelligence: Examining its place in the nomological network. Unpublished doctoral thesis, University of British Columbia, Vancouver. Barchard, K.A. (2003). Does emotional intelligence assist in the prediction of academic success? Education and Psychological measurement, 63. 840-858. Bar-On, R. (1997). The Emotional Intelligence Inventory (EQ-I): Technical manual. Toronto: Multi-Health Systems.

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ŠJournal of Human and Work Management July, 2014, Vol. 2, No.1

Faculty of Management Studies, MRIU (ISSN2320-8384)

Managing People: the Applied Psychology of Handling Human Problems in Management Aastha Dhingra Manav Rachna International University, Faridabad aastha_dhingra13@yahoo.in

ABSTRACT: Never before has the executive's position been so unique and challenging as it is today. The tempo of change in industry grows faster and faster. Society and the nation's strength are now influenced by business decisions. While labor unions strive for shorter and easier work week, the opposite trend seems to be working in management, with the demands on the executives multiplying in number, intensity, and complexity. The recipe for harnessing the force of human excellence starts with decisions we make daily. Few of us have discovered how to direct these driving forces and use them in our decision making process whereas few of us have gone inside to realize the true potential of our “Identity Intelligence�. Success in management seldom hinges on technical competence. Successes in understanding people explain more progress in management than other successes do, and human failures explain more failures of promotion than any other inadequacies do. By increasing our understanding of these successes and failures, we can help ourselves become better executives. The aim of this paper is to help the executives move up in the ranks of business management by understanding their own personality in a better way, and using their identity and their emotions intelligently, thereby attracting more success, better relationships, greater health, and a more fulfilled life. Keywords:- Managing people, Personality, Identity Intelligence, Emotional Intelligence.

Introduction Emotional Intelligence (EI) is a relatively recent concept, but it has important implications for workplace and employee performance and management in organizations. The concept has spawned a bout of both research and applied activity and has captured the public attention. In all of the recent advances in work on emotion in organizational life, the concept has been the target of interest for both academics and practitioners/consultants. Researchers are seeking conceptually to distinguish, to define, and to validate its relationship with important work attitudes and outcomes, while practitioners are seeking to maximize potential employee performance through identification, selection, and training of critical competencies involving the emotional abilities of their employees. Attesting to this dual interest is the abundance of books, consulting agencies, workshops, journal articles, conference papers/symposia, and organized networks of individuals where both practitioners and academics can turn to for discussion of intriguing questions and solutions to organizational problems. In this article, the concept of emotional intelligence is reviewed with direct evidence relevant to organizational behavior. The concept evolved in last two decades from the theory of social intelligence has gained wide popularity by behavioral practitioners of education, management and consulting. Scientific literature confirms that performance of employees with high emotional intelligence surpass those with low emotional intelligence. A variety of tools, methods and


Managing People: the Applied Psychology of Handling Human Problems in Management With today's increasingly competitive global market, organizations are placing paramount emphasis upon their 'Human Resources' or 'Intellectual Capital' as a source of competitive advantage. Therefore, it is very important for any organization to levy the best out of an individual, and facilitate its own growth. The workplace is difficult enough without us having to worry about the different personalities we encounter each and every day. Our jobs are a place where we come in contact with many people, both co-workers and clients, and each of their distinct personalities. If we all had the same personality it would be easy for us to predict what the other person is thinking and feeling, but since we don't we must learn to deal with the many different personalities that we come into contact with each day. The first principle for working effectively with people is to recognize the tremendous impact of modern business conditions on the variety of men and women in an organization. No longer are there a few business 'types' to work with. There are more types than you can categorize. It is important to understand how personality works at the office? One major reason is because it impacts the bottom line. While on the surface they may get along, the lack of knowledge and awareness of their personality differences is what slows down the work process and quality, ultimately. Building and cultivating relationships is an integral part of any career strategy. Whether you are a job seeker, manager or entrepreneur, you are in the relationship business. When it comes to building relationships you must start with self knowledge, and that starts with personality. There was a day, when industry was made up largely of salesmen, production men, clerks and owners. In time financial experts, controllers, and lawyers were added. But today these now traditional groups tell only part of the story. Emphasis on technology has added researchers, themselves divided into the two groups of "basic" and "applied," or "development." There are staff specialists in training, communication, operations research, quality control, production scheduling, advertising, and any number of other areas. Moreover, within specialists there are those who emphasize numbers and statistical techniques, and those who emphasize "people skills" like negotiating of analyzing motivation. These special areas mean not only that the people you deal with talk differently, but also that they think differently. A man whose formulas, and exact numbers is likely to develop a quite different frame of

mind from that of the man who deals with subtleties of public opinions, general trends, and highly subjective judgment. Also, the men you deal with today are likely to come from almost any part of the country, with all that means for differences in outlook. Keep in mind personality is only one of many drivers of behavior, but it is one that is consistent over time. The study of personality is fundamentally about asking: Who am I? Our identity is the essence of why we can be completely unstoppable in some instances and totally unmotivated in others. The decisions we make, the rules we create through those decisions, the way that our brain processes those decisions, the way we fulfill our needs, and the values that we live by reflect on our performance in our jobs, our relationship and our contribution to others. Our direction in life, who we are at our core and who we want to become seems to be guided by an internal influence. Yet we often unknowingly fight against it and cause unnecessary dissatisfaction in our lives. Few of us have discovered how to direct these driving these forces and use them in our decision making process, few of us have gone inside to realize true potential of our “identity intelligence”. Identity intelligence is the result of a cross between cultivating a greater awareness of how and why we react to our environment, and a consciousness of who we are at our core. When we know the causes of our reactivity, we are able to process the events around us more intelligently by using the part of our brain that reasons instead of that which instinctively reacts. We then have the ability to make decision based on the source of our greater self, and align ourselves with the ideal person we would like to become everything else in life falls into place. The laboratory of psychological Studies of the Stevens Institute of Technology has made a study of unsuccessful executives in over 200 companies. Inability to make decisions, the study showed, was a leading reasons for the failure of the executive. Two promising young supervisors start out with equal desire and equal opportunities for advancement. Both do well for a time, earning promotion, regular pay raises, and the respect of their superiors. But then one seems to level off “hit his ceiling” while the other keeps going up. The difference, as it so often turns out, is that one has learned how to help and teach the people under him, while the other has not.


Aastha Dhingra Our decisions, as simple as they may be, determine the direction of our entire life. The things we do as well as the things we don't do affect our environment and the way that people will act and react around us. And that environment will in turn affect our continued actions and reactions. The foundation for changing our direction and the results we get in our lives lies in the way we make our decisions. While each action or inaction has its foundations in “thinking”, not all originate from “reasoning”. “Thinking” is the process that interprets events and surroundings. “Reasoning” takes those interpretations and determines if they are true. Many times we stop at thinking. We combine emotions that we have associated with the events and “decide” that it is true without reasoning. This is because by the time we get to the thinking part, we have already started acting, or more fittingly “reacting” to a situation. To Reasons we use the more evolved part of our brain. When our brain is more relaxed or composed (in alpha state) it operates at its peak. We can therefore make better decisions without the obstacles or “reactive” perceptions. Many times we stop at thinking. We combine emotions that we have associated with the events and “decide” that it is true without reasoning. This is because by the time we get to the thinking part, we have already started acting, or more fittingly “reacting” to a situation. To Reasons we use the more evolved part of our brain. When our brain is more relaxed or composed (in alpha state) it operates at its peak. We can therefore make better decisions without the obstacles or “reactive” perceptions.

The first is the cognitive brain (sometimes referred to as the “thinking cap”). This part engages in higher order cognitive processes, such as reasoning, analyzing and conceptualizing; it is the part that makes us mentally “intelligent”. The second is the limbic part of the brain; this is the control center, the part that controls our voluntary bodily functions, such as our motor skills and our dexterity in doing things. It is the “action brain” and it is also where emotions come from. And finally it is the primitive reptilian brain which deals with our primal need to survive. It is the part of us that repeat patterns of behaviour that we usually do not like, patterns that often prevent us from taking actions and opportunities or keep us procrastinating, patterns of fear and sometimes stupidity. It reacts to emotional triggers that are outside the boundaries of our “Circle of Tolerance”. This is because during the encounter you began to “React” to the situation thus using your reactive brain instead of your reasoning brain, and for all practical purposes, you became a lizard. To elevate ourselves to the greater level of being a human being and sidestep our primal reptilian instincts, we need to respond, not react. We need to reason, not just think. To start, this requires increasing our “Circle of Tolerance”. Have you ever been talking to someone, explaining something so clearly to the extent you are absolutely sure that they Must understand; and, THEY JUST DON'T GET IT? You probably think “This person is an idiot!” they on the other hand are thinking that you just didn't know how to communicate? This is what is known in Directive Communication Psychology (a new field in Psychology) as the “Colored Glasses Syndrome”.

There are 3 parts of our brain that we must understand.

Consider if you are wearing Green colored glasses, certain things would appear brighter and be very clear, while others may seem dull and some may not even be noticeable at all. When you see this you may


Managing People: the Applied Psychology of Handling Human Problems in Management assume that, because it is so clear, that It will be obvious to everyone else as well, or atleast that it will be obvious when you explain it. The problem is that not everybody wears green glasses, some may wear Blue, Red and Purple, and each sees the same things from different perspectives. If the color of your glasses represents the way your brain works, each will have clarity in some areas and be oblivious to others, and they will not be the same. This product of how our brain communicates and processes can be translated to brain colors. This is not just a personality quark; in fact, studies have shown that the way the brain processes information or “communication” is based on your genes. You are born with it. DirectivCommunication has categorized these genetic patterns of communication processes and needs into colors to make it easier. And consider that while you may get frustrated or even angry at someone for Not Getting it. You are Judging them by the color of their brain. You are being a brain “Racist”! When you begin to understand your brain color, it not only puts a new light on your own identity, but gives you a new perspectives on how it affects others and how people with different brain color are affecting you. This awareness alone will increase your circle to tolerance, reduce your stress, and create greater rapport with people whether you have know them for years, or you have met them for the first time. Some of the core research for the Colored Brain model came from a combination of “Human Dynamics” research done by Sandra Seagal and David Horne, as well as work done by Ned Herman on whole brain thinking. This is not about personality, but the unchangeable genetic processes that dictate internal communication and processing. When you combine brain communication process with your values and human needs (and more importantly how those needs are ranked and their rules), you have a better dimension of what is really driving your decisions. Imagine your brain as a computer processor, some may have a PC processor, others may have a Mac processor. Each of these processors can run similar applications such as Microsoft Excel of Adobe Photoshop, and while these have the same function and similar appearance, each requires different software to do so and each runs them differently. For example, a PC will run excel in a very direct and speedy manner, but will run Photoshop in a slower and roundabout way. The Mac on the other hand in

just the opposite. But, if you try to run Excel for Mac on Your PC, it won't work and vice versa. Our brains act in a similar way. if you are a green brain (random, interactive processing) trying to do a red brain (linear objective processing) functions, you will have a great deal of difficulty doing it in the same way that a red brain person does. It then becomes essential for getting your red brain outcome to do it in a green brain way. Brain Flexibility helps you to communicate and build better rapport with others. The main genetic foundation of our brains communication does not change, but as we develop through our environment, we acquire flexibility in how we are able to use our genetic processor. Just like writing software for a PC or a Mac processor to accomplish a specific task, you can write software for your genetic brain processor. Sometimes our environment (whether it be culture, parents, social class etc.) encourages a certain way to “BE”. If this of being is a color other than your original biological color, you would be having an internal conflict that may hinder your ability to truly maximize your potential. Imagine working out in a gym, if you concentrate on your arms and don't exercise your legs, you will have big arms and little tiny, thin legs (this looks funny). The same with your brain, by exercising those parts of your brain you do not often use, you become more balanced, more flexible in your understanding and in working with other views and approaches. Traditionally, the problem has been those red brain outcomes (for example) have been taught by red brained people. So green, blue and purple brained people usually have to work harder to achieve the same results, and then the results are often not as good those red brained people that hardly worked at it at all. But, if a green brained person has awareness of a being green brained, this allows him the ability to use this natural green talent. Business also can't be carried out from boardrooms, discussing excel sheet that project the annual growth of a company. Business has evolved a long way from being perceived as a mechanical setup, where a group of individual used their knowledge about market and finances to earn profits. Today, the role of an individual's emotional state on his professional success is being widely recognized. Studies have revealed that it is not just a high intelligence quotient that is required to be a successful businessmen. Rather, individuals who have high emotional intelligence are found to make better leader and decisions makers, and hence, the most successful professional.


Aastha Dhingra Obviously, when human beings are brought together to complete tasks, emotions will play a role—theories to the contrary notwithstanding. “Don't bring your personal problems to work” is one variation of the argument that emotions are inappropriate in the workplace. Business decisions, so the argument goes, should be based on information, logic and calm cool reason, with emotions kept to a minimum.

But it is unrealistic to suppose that emotions can be checked at the door when you arrive at work. Some people may assume, for a variety of reasons, that emotional neutrality is an ideal, and try to keep feelings out of sight. Such people work and relate in a certain way: usually they come across as rigid, detached or fearful, and fail to participate fully in the life of the workplace. This is not necessarily bad in some situations, but it is usually not good for an organization for such people to move into management roles. The same would be true for people who emote excessively, who tell you how they feel about everything. Simply being around them can be exhausting. Developing emotional intelligence in the workplace means acknowledging that emotions are always present, and doing something intelligent with them. People vary enormously in the skill with which they use their own emotions and react to the emotions of others—and that can make the difference between a good manager and a bad one.It's not overly egalitarian to suggest that most professionals, managers and executives are fairly smart people (of course there can be glaring exceptions), but there can be a huge difference in how well they handle people.

An employee with a "good" personality may be fun, social, energetic, and outgoing. However, having a "good" personality doesn't necessarily equate to success in the workplace. A "good" personality tells you nothing about the fact that the employee can also make errors in judgment due to lack of "clarity" when making decisions within their own biases. This is why people with varying personality styles can successfully perform the same job. It boils down to their ability to exercise clear and sound judgment in those situations their job/role presents on a regular basis. An employee with high emotional intelligence can manage his or her own impulses, communicate with others effectively, manage change well, solve problems, and use humor to build rapport in tense situations. These employees also have empathy, remain optimistic even in the face of adversity, and are gifted at educating and persuading in a sales situation and resolving customer complaints in a customer service role. This "clarity" in thinking and "composure" in stressful and chaotic situations is what separates top performers from weak performers in the workplace.

In the May 27, 2002 Fortune magazine, in an article “Fearing the Boss More than the Competition,” (in a series on Why Companies Fail) we find the following: Sometimes CEOs don't get the information they need to make informed decisions. The main reason, says Daniel Goleman, a psychologist and author of the book Primal Leadership, is that subordinates are afraid to tell them the truth. Even when a boss doesn't intend to quash dissent, subtle signals—a sour expression, a curt response—can broadcast the message that bad news isn't welcome. That's why, according to a study by Goleman and two associates, higher-ranking executives are less likely to have an accurate assessment of their own performance.


Managing People: the Applied Psychology of Handling Human Problems in Management Caunt, J. (2000), Organise Yourself. Kogan page: London U.K Cooper, R. K., 1997, Applying emotional intelligence in the workplace. Training & Development., 51(12):31-8. Goleman, D., 1998 Working with Emotional Intelligence, New-York: Bantan book. "Influence of Personality on Individual Performances in the Workplace" StudyMode.com. 05 2012. 05 2012 <http://www.studymode.com/ essays/Influence-Of-Personality-On -Individual-Performances-1004572.html>. Thus, it is important to understand that the minds that actually execute all the policies of a company, can work best only when they are completely satisfied at the workplace. Hence, if a company wants to run successfully, each and every employee must have the identity intelligence which will help him or her to further analyse their emotions thereby leading them to take sensible, intelligent decisions.

References Briner.R.(1990), "The neglect and importance of emotion at work",European Journal of Work and Organizational Psychology, Vol. 8, pp. 323-46. Carmazzi, F. (2002), Identity Intelligence: The force for making the right decisions for personal and professional success, Veritas Publishing: Singapore

Judge, T. A., & Ilies, R. (2002). Relationship of personality to performance motivation: A meta-analytic review. Journal of Applied Psychology, 87, 797–807 "Personality and the Workplace" StudyMode.com. 06 2006. 06 2006<http://www.studymode.com /essays/Personality-Workplace-91645.html>. Salovey, P., and Grewal, D., 2005, The science of emotional intelligence. Curr. Directions in Psychol. Sci., 14 (6): 281-283. William, B.G. 1994. How to manage people: the applied psychology of handling human problems in business Prentice-Hall (1967), Singapore. Zadel, A., 2006, Impact of personality and emotional intelligence on successful training competencies. Managing Global Transitions, 4(4): 363-376.


ŠJournal of Human and Work Management July, 2014, Vol. 2, No.1

Faculty of Management Studies, MRIU (ISSN2320-8384)

TV Advertisements: Influence on Buying Behaviour of Consumers Dr. Ruchi Sharma, Assistant Professor, School of Management G L Bajaj Group of Institutions,

ABSTRACT: The research was conducted on 840 adults of Haryana of which 425 were rural and 415 were urban comprising of 420 males and 420 females. The data was analysed by applying factor analysis, t-test and mean scores. The scale consisting of 30 variables was analysed related to the impact of TV advertisements. Besides general information about the respondents, different issues related to the influence of TV advertisements were addressed. Out of these only one issue related to buying behaviour was considered. Therefore, only 16 variables relating to this study were analysed. Factor analysis extracted four factors out of these 16 variables. The t-test indicated the existence of significant disparity among the adults of different residential background and gender groups on the four issues related to the influence of TV advertisements on the buying behaviour. The study explains that male consumers believe that exposure to TV advertisements have increased participative purchase decision making whereas females emphasized that emotional buying decisions have increased due to TV advertisements. Consumers residing in rural areas find that TV advertisements have impact on their purchase decisions while urbanites consider that the TV advertisements influence their expectation and believability. Keywords: TV advertisements, influence, buying decisions, adults.

Introduction Advertisements are cost-effective ways to disseminate messages with a view to build a brand preference or to educate people (Kotler & Keller, 2006). The majority of the marketers use mass media for their marketing communications. The choice of media is dependent upon the nature of the message and the intended target audience (Etzel et al, 2008). Television is generally acknowledged as the most powerful advertising medium. The wide reach translates to low cost per exposure (Kotler & Keller, 2006). Over a longer period of time, the TV set has become a permanent fixture in all upper and middle class households, and it is not uncommon even in the poorer society of urban areas and rural households (Shah & D'Souza, 2008). India is a developing country and majority of the people are living in rural areas (Census, 2001). Rural consumers are fundamentally different from their urban counterparts socially, psychologically, physiologically and literally (Selvaraj, 2007). Hence, the buying behaviour of rural consumers has become a hot-topic for discussion because rural India, in recent days, is enthusiastically consuming everything from shampoo to motor cycles (Nagaraja, 2004).The impact of sex differences on consumer skills is also a matter of concern (Moschis & Churchill, 1979). Thus, this paper is an attempt to study the influence of TV advertisements on the buying behaviour of adult consumers of different residential backgrounds i.e. rural and urban and gender groups i.e., male and female in the state of Haryana.


TV Advertisements: Influence on Buying Behaviour of Consumers Review of Literature Advertising is a billion dollar industry today in India, and at a growth rate of 40-50% per annum, one of the fastest growing industries in the country (Unnikrishnan & Bajpai, 1996). The National Readership Survey IV and V estimated that 77% of urban population and 30% of rural population has access to TV sets. The rural viewership is expected to go up to 45-48% by 2020. As the number of TV sets increases, the appetite for entertainment of Indian viewers has increased dramatically but there is 'fragmentation' of viewership due to availability of variety of channel/programme options (Saxena, 2005). The television medium is the most attractive and important place to advertise (Chandok, 2005). Selvaraj (2007) observed that 70% population of India constitutes rural sector. Thus, it can be said the marketers and advertisers who are having eyes on this market, must perceive opportunities to target rural consumers of India. Kaur and Kaur (2002) explored fashion awareness among rural and urban adolescents. They observed that television is the most important media of information regarding fashion awareness among rural and urban respondents. With the population of over one billion, India is on the threshold of becoming one of the world's foremost consumer markets. About a quarter of this huge mass of consumers is urbanized and about three-quarter are rural (Sehrawet & Kundu, 2007). Most South Asian respondents consider advertisements pleasurable, informative and economically beneficial (Ramaprasad, 2001). One can attribute positive attitude to India being an emerging market where anything 'new' is fit for consumption (Saxena, 2005). Rising per capita income, increasing expenditure, shift from lower to middle and middle to upper income group, changing lifestyle, changing consumption pattern, and changing aspirations are the new features of the Indian rural market (Bijapurkar, 2000). The total market size of rural is 1,23,000 crore which includes 65,000 crore FMCG, 5,000 crore durables, 45,000 agri inputs, and 8,000 crore two and four wheeler market (Kashyap &

Raut, 2008). Therefore, the buying behaviour of rural consumers has gained attention of marketers along with the urban consumers buying behaviour. Decision making has become a joint process in a family, woman is the initiator and/or product evaluator, man the financier and child, an influencer (Nagaraja, 2004). Advertisers often believe that fore most desirable market for their products are young married professionals and managers who live in urban or sub-urban areas (Patti & Frazer, 1988). Advertising seems to be obsessed with gender and sexuality. In the present era of liberalization, women and young girls have become an important target in advertising as market forces work on the logic of what sells best and quickest (Prakash, 2008). Higher number of advertisements targeted at females could be the reason for higher response rate for the products among them (Dubey & Patel, 2004). Kavitha (2006) in her study observed that as the buying power of the new women is changing, advertisements are also portraying women as powerful individuals who are concerned about how their money is spent and hence make calculated decisions on what to buy for the family .This research reveals that women view television for longer hours i.e. over two-thirds of the adult viewing audience on weekday afternoons. Prime time audiences more evenly divided but women viewers still out number men. This shows that television viewing is a gendered activity and the advertisers are also aware that consumer behaviour is also gendered. Commercials are designed to take optimal advantage of gender specific fantasies, myths and fears. All the products used by a customer are not necessarily those of advertisements they liked. The key lies not only in the attractiveness of the advertisements, but also the interest of the target (Dubey & Patel 2004). For advertisers, India could represent a golden opportunity for airing television advertisements (Fam & Waller 2008).


TV Advertisements: Influence on Buying Behaviour of Consumers Objective of the Study This research is conducted to study the influence of television advertising on buying behaviour of adult consumers. To achieve this objective, an attempt is made to seek the answers of the following questions:1)

2)

Does the television advertising influence on the buying behaviour of adult consumers vary across the residential background (rural Vs Urban)? Does the television advertising influence on the buying behaviour of adult consumers vary across the gender groups (male Vs female)? Research Methodology

Keeping in mind the requisites of a good research the present study is focused on the adult consumers of Haryana. This research is an attempt to measure the significance of the issues related to the influence of TV advertisements on the buying behaviour of adults. The study comprised of four districts of Haryana which were selected at random from all the administrative divisions by using multistage Table 1: Summary of characteristics of the sample No. of Respondents Categories and % age Male 420 (50.0) Gender Female 420 (50.0) Rural 425 (50.6) Area of Residence Urban 415 (49.4) AD1 228 (27.1) AD2 204 (24.3) Administrative Division AD3 202 (24.1) AD4 206 (24.5) 314 (37.4) ? 40 Age (in years) 41 – 50 381 (45.4) > 50 145 (17.3) < 1,00,000 252 (30.0) Annual Household Income 1,00,000—3,00,000 335 (39.9) (Rupees in Lac) > 3,00,000 253 (30.1) 224 (26.7) ? 10 107 (12.7) Education ? 12 (as per Class) Graduate 339 (40.4) Post Graduate 170 (20.2) Factors

Source: Primary Data Figures in parentheses show percentages.

sampling method. The sample of urban respondents was collected from these districts. Further, two villages from each district were selected based on judgment sampling method in such a manner that one village lies near to the city and the other lies far away from the city. The nearness was considered upto 20 kilometers from the district. While conducting the survey, due care was given to the respondents of different walks of life, i.e. different gender, area of residence, educational standards, economic backgrounds and age groups. Sample Size For the present study the respondents selected were media literate adults who had an exposure to the TV advertisements. A total of 1000 questionnaires (250)

in each administrative division were circulated among the respondents. Out of the collected questionnaires, a total of 840 questionnaires were considered fit for the analysis. Of these, 425 were from rural and 415 were from urban respondents. Further details are shown in Table 1 and 2. Statistical tools applied All the responses on 16 variables related to this study were obtained on 5-point scale (from point 5 for strongly agreeing with the statement to point 1 for strongly disagreeing). The items were next subjected to a principal components analysis with varimax rotation resulting in a four-factor solution. The scale of 16 identified variables was put to reliability test. The results show that Cronbach's alpha of the scale was 0.792, which is considered satisfactory. Further parametric t-test is applied to the four factors to find out the existence of significant variance among the adults of different residential background and gender groups on the issues. Table 2: Distribution of the respondents on the basis of gender and residential area in four administrative divisions Categories Gender Area of Residence Male

Female

Rural

Urban

AD1 228 (27.1)

119 (52.2)

109 (47.8)

117 (51.3)

111 (48.7)

AD2 204 (24.3)

100 (49.0)

104 (51.0)

100 (49.0)

104 (51.0)

AD3 202 (24.1)

101 (50.0)

101 (50.0)

102 (50.5)

100 (49.5)

AD4 206 (24.5)

100 (48.5)

106 (51.5)

106 (51.5)

100 (48.5)

420 (50.0)

420 (50.0)

425 (50.6)

415 (49.4)

Total=840 (100.00)

=840 (100.00)

=840 (100.00)

Source: Primary Data; Figures in parentheses show percentages. AD1, Hisar administrative division; AD2, Rohtak administrative division; AD3, Ambala administrative division; AD4, Gurgaon administrative division.

Results and discussions As mentioned in the research methodology, the scale consisting of 30 variables was analysed related to the impact of TV advertisements. Besides general information about the respondents, different issues related to the influence of TV advertisements were addressed. Out of these only one issue related to buying behaviour was considered. Therefore, only 16 variables relating to this study were selected and analysed. Factor analysis with principal component method and varimax rotation extracted four factors as impact of television advertisements on the buying decisions of adults (Table 3). The t-test indicates the existence of significant disparity among the adults of different residential background and gender groups on the four issues related to the influence of TV advertisements on the buying behaviour (Table 4). Table 5 shows the average of the mean scores of different statements in each factor for the categories of the demographic variables of the consumers.


Ruchi Sharma Factor 1: Assistance in Buying The factor assistance in buying highlights that television advertisements are liked by the adult respondents and are influenced by them. It has enhanced their involvement in finding and buying the best products. The perusal of the results presented in table 4 explains that the gender effect (P≤ 0.49) of adults does not influence the assistance of TV advertisements on their buying behaviour. This is also depicted from the nominal variation in the mean scores of male (=3.61) and female (=3.54) respondents (Table 5). The results of t-test (P≤ 0.00) (Table 4) specify that

these parameters depict the positive impact of TV advertisements on the purchase decisions of adults. The respondents of the different gender groups (P 0.02) (Table 4) have varying views on the parameter that TV advertisements influence their buying behavoiur. The mean score of male teenagers (=3.12) suggests that they are more influenced by the parameter in comparison to the female (=3.01) respondents (Table 5). The results of t-test (P≤ 0.91) (Table 4) indicate that rural and urban respondents have insignificant variation in their views on the parameter which is also evident from the mean scores. Table 4: Results of t-statistics Gender Area of Residence

Table 3: Factor Analysis of the Variables

V1 V2 V3 V4 V5

V6 V7 V8 V9 V10 V11

V12 V13 F4 V14 V15 V16

Factor labels and variables F 1 Assistance in Buying I like TV advertisements. TV ads help me to find the best products. I feel that exposure to TV advertisement has enhanced my involvement in purchasing. No doubt, TV advertisement increases the frequency of purchase. I feel that TV ads influence me. F 2 Influence on buying behaviour Most of the times, I make up my mind to purchase the products on the basis of its advertisements. Due to TV advertisement exposure, I have started living better amenities of life. I feel that exposure to TV advertisement has enhanced my involvement in purchasing. Due to TV ad exposure, I have started experimenting new products. I feel some TV advertisement have their impact on my mind. I feel TV advertisements make the purchase of the products easier. F 3 Impact on participative purchase decision making Due to TV ad exposure, the decision making has become more participative. Due to their TV ad exposure, women are more involved in product purchase these days. Enhanced expectations and believability Quality of product is as good as expected from TV ads. I believe that due to TV advertisements, rational decision making has reduced. I feel that TV advertisements have more impact on females than males.

Rotated factor loadings

Factor Labels

t-test

sig.

t-test

sig.

0.69

0.49

5.41

0.00**

2.28

0.02*

-0.11

0.91

purchase decision making

2.06

0.04*

6.90

0.00**

Enhanced expectations and believability

2.16

0.03*

3.53

0.00**

0.659 0.649

Assistance in Buying Influence on buying behaviour

0.619

Impact on participative

0.615 0.564

0.669

** Significant at 1% level * Significant at 5% level

0.662 0.649 0.592 0.467 0.432

0.706 0.587

0.693 0.636 0.535

Kaiser-Meyer-Olkin KMO (0.839) Bartlett's test of sphericity= 0.00

consumers of different area of residence have varying views on the issue that TV advertisements assist them in buying. The urban respondents (=3.44) find TV advertisements less helpful in their buying decisions than their rural (=3.71) counterparts (Table 5). Factor 2: Influence on Buying Behaviour It deals with influence on buying behaviour which explains that the adult respondents often make up their mind to purchase a product after viewing its TV advertisement. It states that TV advertisements not only inform about the product but also influence the mind of adults. They believe that TV advertising has made the purchase of product easier. The respondents have started experimenting new products due to the TV ad exposure. It has been inferred that the involvement of adults in purchasing the products advertised on TV has enhanced considerably. All

Factor 3: Impact on participative purchase decision making This factor explains the impact on participative purchase decision making of adult respondents due to TV advertising. It indicates that while arriving at the purchase decisions for products, people do consult their spouse, children and friends while making a purchase decision. The factor also highlights that the women these days are well informed about the products due to TV ad exposure and thus, are more involved in product purchase. Table 4 exhibit the views of the respondents on the parameter that TV advertisements have impact on the participative purchase decision making which differ significantly across the gender effect (P 0.04) and residence background effect (P≤ 0.00). The mean score (Table 5) of male adults (=3.72) suggests that they agree more to the factor in relation to the female (=3.63) respondents. The inclination of rural teenagers (=3.75) is more towards the factor than the urban (=3.53) fellows. Table 5: Mean scores of the factors Factor 3: Impact on Factor 2: participative Factor 1: Influence on purchase Assistance in buying decision buying behaviour making

Categories Gender

Factor 4: Enhanced expectations and believability

Male

3.61

3.12

3.72

3.76

Female

3.54

3.01

3.63

3.85

3.71

3.00

3.75

3.62

3.44

3.01

3.53

3.70

Area of Rural Residence Urban


TV Advertisements: Influence on Buying Behaviour of Consumers Factor 4: Enhanced expectations and believability It underlines the enhanced expectations and believability of the respondents due to exposure to TV advertisements. It infers that people believe the quality of the products to be as good as advertised on TV. They are normally satisfied with the quality of the products. The factor in addition connotes that the exposure of TV advertising sometimes overload the information and expectations of people about a product and results into irrational decisions. Thus, it is indicated that exposure to TV advertisements has enhanced the expectations about a product and thereby reduce the rationality in the decision making process. It also depicts that the females are much more inclined towards TV advertisements than the male respondents. The perusal of the results in table 4 explains that the views of adult respondents on the parameter that exposure to TV advertisements enhances the expectations and believability differ significantly across the gender groups (P≤ 0.03) and area of residence (P≤ 0.00). The mean score (Table 5) of male respondents (=3.76) suggests that their expectations and believability are least affected by TV advertisements in relation to their female (=3.85) counterparts. Further, urbanites (=3.70) are found more expecting and believing to the TV advertisements as compared to the ruralites (=3.62). They believe that the products are qualitatively as good as expected from TV advertisements. Conclusion The study explains that male adults have higher acceptance on the issues that exposure to TV advertisements have influence on the buying behaviour and also have impact on the purchase decisions, whereas female respondents agree more on factor that their expectations and believability have increased due to TV advertisements. The study explains that male consumers believe that exposure to TV advertisements have increased participative purchase decision making whereas females emphasized that emotional buying decisions have increased due to TV advertisements. Moreover, the respondents residing in rural areas find that TV advertisements assist them in buying, and have impact on their purchase decisions while urbanites have higher acceptance on the parameter that the TV advertisements influence their expectations and believability. Due to the impact of TV advertisements on the mind of adult viewers, their involvement and frequency in purchasing the products has increased considerably.

References l Bijapurkar, R. (2000). The marketing in India, The Economic Times, 18, pp. 6 l Chandok, A. (2005). Impact of Advertisements on Children's Buying Behaviour. Marketing Mastermind, pp. 41-46. l Dubey, J. and Patel, R. P. (2004). Ads that Work with Youth. Indian Management, Vol. 43, No.10, pp. 68-74. l Etzel, M., Walker, B. J., Stanton, W. and Pandit, A. (2008). Marketing- Concepts and Cases, 13th Edition, New Delhi, Tata Macgraw. l Fam, K.S. and Waller, D. S. (2008). A Study of Liked/Disliked Television Commercials in India, Indian Journal of Marketing, Vol. 38, No. 2, pp. 3-10. l Kavitha, G. (2006). A Study On The Effectiveness Of The Advertising Techniques Used In The Personal Care Segment Of Women Consumers, Indian Journal of Marketing, Vol. 36, No. 8, pp. 12-16. l Kashyap, P. & Raut, S. (2002). The Rural Marketing Book. New Delhi: PolyKam Printers. l Kaur, H. and Kaur, R. (2002). Fashion Awareness Among Rural and Urban Adolescents. Journal of Social Research, Vol. 43, No. 1, pp.37-40. l Kotler, P. & Keller, K.L. (2006). Marketing Management, 12th edition, Prentice Hall of India: New Delhi. l Moschis, G.P. and Churchill Jr. G. A. (1979). An Analysis of the Adolescent Consumer. Journal of Marketing, Vol. 43, No. 3, pp. 40-48. l Nagaraja, B. (2004). Consumer Behaviour in Rural Areas: A Micro-level Study on Buying Behaviour of Rural consumers in Kavali Mandal. Indian Journal of Marketing, Vol. 34, No. 11, pp. 30-36. l Patti, Charles H. and Frazer, Charles F. (1988). Advertising: A Decision-making Approach, Dryden Press, Chicago. l Prakash, R. (2008). The Role of Women in Advertisements. Indian Journal of Marketing, Vol. 38, No. 3, pp. 3-6. l Ramaprasad, J. (2001). South Asian students’ beliefs about and attitude toward advertising.


Ruchi Sharma

Journal of Current Issues and Research in Advertising, Vol. 23, No. 1, pp. 55-70. l Saxena, R. (2005). Marketing Management. 2nd Edition. New Delhi: Tata Mc Graw. l Selvaraj, A. (2007). Rural Consumers’ Behaviour Regarding Non –Durable Goods: A Study in Erode District of Tamil Nadu. Indian Journal of Marketing, Vol. 37, No. 12, pp. 35-42. l Shah, K. and D'Souza, A. (2008). Advertising Promotion, An IMC Perspection New Delhi. Tata Mc Graw Hill Companies.

l Sehrawet, M. and Kundu, S. C. (2007). Buying behaviour of rural and urban consumers in India: the impact of packaging, International Journal of Consumer Studies, pp. 630-638. l Unnikrishnan, N. and Bajpai, S. (1996). The Impact of Television Advertising on Children. Retrieved April 25, 2007, from GJUS & T University, Hisar Web site: http://www.wacc.org.uk/modules.php?name=News &file=article&sid=309.


ŠJournal of Human and Work Management July, 2014, Vol. 2, No.1

Faculty of Management Studies, MRIU (ISSN2320-8384)

A Study of Foreign Direct Investment in Service Sector in Indian Scenario Arindam Banarjee Faculty, ICWAI

Service sector is one of the fastest growing sectors in India. Its contribution to Indian economy h The data relevant to the study has been collected from various sources like the report of the Ministry of Commerce and Industry, the department of Industrial promotion and policy (DIPP), CMIE etc. The data has been analyzed by using statistical tools like correlation, simple regression model so as to draw valid conclusion. SPSS 16 has been used for analysis purpose. As been manifold about 55.2% in Gross Domestic Product and is growing by 10% annually. One of the important things observed from the study is that the share of Service sector in total FDI in India has increased by leaps and bound in the few past years. One of the important observations that can be made is that during 1991 to 2005 the share of service sector in Total FDI was just 9.76% occupying 5th position, but its share in total FDI has increased to around 21% occupying the 1st position in 2011. Other findings are summarized as per the analyses made in the study. (Keywords: FDI, Service, Investment, Inflows, Government)

Introduction In the 21st century India is an emerging economic power with vast human and natural resources and a huge knowledge base. The economy of India is the twelfth largest economy in the world by nominal value and the fourth largest by Purchasing Power Parity (PPP). Foreign Direct Investment has been increasingly dramatically across the world. Almost all the countries in the world are realizing the importance of foreign capital's role in the rapid industrial and economic development. It contributes a lot to the economic growth and industrial development across the world. It even acts as a catalyst in the process of domestic industrial development. Further it helps in speeding up economic activity and brings with it other scarce productive factors such as technical know- how and managerial experience, which are essential for economic development. FDI plays an important role in the development process of a country. It has potential for making contribution to the development through the transfer of financial resources, technology and innovative and improved management techniques along with raising productivity. Developing countries like India need substantial foreign inflows to achieve the required investment to accelerate economic growth and development.


Arindam Banarjee 1.1 Meaning of FDI FDI is generally defined as “A form of long term international capital movement made for the purpose of productivity activity and accompanied by the intention of managerial control or participation in the management of the foreign firm”. According to the International monetary fund, FDI can be defined as “An Investment that is made to acquire a lasting interest in an enterprise operating in an economy other than that of the investor. The investor's purpose is to have an effective voice in the management of the enterprise.” FDI should not be confused with portfolio investment, which doesn't seek management control, but it is motivated by profit. Portfolio investment occurs when an individual investor invest, mostly through stockbrokers in the stocks of the foreign countries in search of profit opportunities. The World Investment Report of the United Nations Conference on trade and development (UNCTAD) defines FDI as “International Investment that reflects the objective of a resident entity in one economy (Foreign Direct Investor or Parent Enterprise) obtaining “Lasting Interest” in and control of an enterprise resident in a economy other than that of foreign direct investor.” Lasting interest implies the existence of a long-term relationship between a direct investor and the enterprise and a significant degree of influence on the management of the enterprise. 1.2 The Service Sector in India Service sector is one of the fastest growing sectors in India. It contribution to Indian economy has been manifold about 55.2% in Gross Domestic Product growing by 10% annually. One of the important things observed in share of Service sector in total Foreign Direct Investment in India is that it has increased by leaps and bound in the few past years. One of the important observations that can be made is that during 1991 to 2005 the share of service sector in Total FDI was just 9.76% occupying 5th position, but it share in total FDI has increased to around 21% occupying the 1st position in 2011 as per the latest report available through DIPP website. 1.3 FDI Policy in relation to the Service Sector In this paper an attempt has been made to analyze the FDI Inflows in Service Sector (both Financial and

Non Financial) as well as component wise like Telecommunication, Hotel and Tourism etc. Let us have a brief look into the FDI policy in relation to different service sector. in Insurance Sector, FDI upto is allowed on the automatic route subject to obtaining license from Insurance Regulatory & Development Authority (IRDA).In private Sector Banking, FDI of 49% from all sources on the automatic route subject to guidelines issued from RBI. In telecommunication Industry, FDI is limited to 49% subject to licensing and security requirements and adherence by the companies. In trading, FDI up to 51% provided it is primarily export activities, and the undertaking is an export house/trading house/super trading house. 2. Objective of the Study: Against the above background the present study conducted by me aims to explore the FDI Inflows in service sector in Indian Scenario. My study begins with the introduction to FDI and focuses on the following objectives: l Analyzes of Overall Sectoral FDI inflows in India from 2000 to 2011. l Analyzes of the FDI Inflows in Service Sector from 2000 to 2011. l Analyzes of monthly FDI Inflows in Service Sector in 2009-10 and 2010-11. l Analyzes of Component Wise break up of FDI Inflow in Service Sector in India. 3. Literature Review: It is proposed to present briefly on overall basis some of the literature referred by me while conducting my study. Liesbeth Colen, Miet Maertens, Jo Swinnen (2008) has worked on “FDI as an Engine for Economic Growth and Human Development. The objective of the study was to analyze the importance of FDI on developing countries with a view to highlight the trend of the FDI flows. The study further tries to evaluate the effect of FDI on economic growth as well as poverty reduction. Mahima Dass Gupta (2005) aims at analyzing the role and performance of FDI in India. This study focuses on analyzing different routes through which FDI


A Study of Foreign Direct Investment in Service Sector in Indian Scenario comes to India or the dimension and trend of FDI Vis a Vis certain selected Asian countries. Dr. H. A. C. Prasad and R. Sathish (2010) in Working Paper (Department of Economic Affairs Ministry of Finance Government of India), “Policy for India's Services Sector” in their paper examines major issues concerning India's service sector and gives both general and sector specific policy suggestion. The paper also emphasizes on the importance of services for India in terms of GDP growth, services export growth and openness of the economy. M. Selvakumar, T. Ambika and S. Muthulakshmi (2007) in their article “Foreign Direct Investment in Service Sector” have focused on trend and pattern of FDI in Indian Service Sector and the Global trend of FDI in Service Sector and emphasizes that Efforts should be made towards attracting efficiency seeking FDI through a right policy that expand operation, improve local skills, establish linkages and upgrade technology. Mahima Dass Gupta (2005) aims at analyzing the role and performance of FDI in India. This study focuses on analyzing different routes through which FDI comes to India or the dimension and trend of FDI Vis a Vis certain selected Asian countries.

square method) so as to draw valid conclusion. SPSS 16 has been used to analyze purpose apart from other statistical analysis with graphs etc. 5. Analysis I) Analysis of Sectoral Distribution of FDI Inflows in Service Sector and in Indian Economy: Table 1 reflects the Top 5 Sectors attracting the highest FDI Inflows (from 2002-03 to 2010-11). It can be observed from Table 1 that Services occupies the maximum FDI Inflows (26835US $ (in millions)) followed by Computer software and Hardware (10571US $ (in millions)), Telecommunication (9713US $ (in millions)), House and Real Estate (9456 US $ (in millions) and Construction (9120 US $ (in millions)). Service Sector occupies 1st position among the sectors having the maximum FDI Inflows in Indian Scenario from 2002 to 2010. The result of Table 1 is produced below: 2002-

2003-

2004- 2005- 2006- 2007- 2008- 2009- 2010-

03

04

05

06

07

08

09

10

11

Total

326

269

469

581

4664

6615

6116

4392

3403

26835

Hard & Soft

644

532

721

1451

2733

1410

1677

919

484

10571

Telecom

223

116

129

686

521

1261

2558

2554

1665

9713

Real estate

N.A

N.A

N.A

38

467

2179

2801

2844

1127

9456

47

152

151

985

1743

2028

2868

1125

9120

Sector Service Sector (Financial and Non Financial)

Economic Survey (2010-11) emphasized that India stands out for the size and dynamism of its service sectors. The contribution of Service sector to the Indian Economy has been manifold. It highlights various aspects of Service Sector like sectors attracting highest FDI Inflows in India (Service sector occupying the top position), Service Exports, share of different service categories in GDP, share and growth of Service sector etc. 4. Research Methodology The data relevant to the study has been collected from various sources like the report of the Ministry of Commerce and Industry, the department of Industrial promotion and policy (DIPP), the government of India, Centre of Monitoring Indian Economy (CMIE), RBI, and Journals. Information has also been taken from World development reports and World Investment Reports. The data has been analyzed by using statistical tools like correlation, simple regression model (using least

Computer

Construction 21

Source: Website of Department of Industrial promotion and policy (DIPP) N.A Means Not Available from DIPP Source Financial year (e.g. 2002-03) means from April, 2002 to March, 2003) Time Period: 2002 to 2011 Amount Expressed in US $ (in millions) II) It can be observed from table 2 that the maximum % of FDI Inflow is of Services (20.82%) followed by Computer Software and Hardware (8.26%), Telecommunication (8.16%), House and Real Estate (7.42%) and Construction (7.07%) (From April, 2000 to March, 2011). The result of Table 2 is produced below:


Arindam Banarjee Table 2. Percentage of FDI Inflows (in comparison to cumulative FDI Inflows) in different Sectors

Source: Website of Department of Industrial promotion and policy (DIPP)

Amount Expressed in US $ (in millions)

PERIOD : April 2002 to March 2010

Cumulative

Amount Expressed in US $ (in millions)

Inflow Total

% Inflows

Service Sector(Financial and Non Financial) 27007

20. 82

It is an endeavor to test the correlation between Cumulative FDI in Indian Economy and FDI in Service Sector. SPSS 16 is used for the purpose.

Computer Software and Hardware

10723

Telecommunication

8.26 10589

House and Real Estate

8.16

9632

Construction

7.42 9178

It is observed from Table 4 that correlation is .952 depicting a very high positive correlation. The result of correlation matrix is produced below in Table 4: Table 4 (Correlation Matrix):

7.07

Correlations Cumulative Inflow

129716

FDI.SERVIC

From April, 2000 to March 2011)

Cum.FDI E

Source: Website of Department of Industrial promotion and policy (DIPP) Time Period: 2000 to 2011 From the above Table 3 it can be observed that the % of FDI Inflow in the Service sector in the total FDI inflow is highest in the year 2006-07 (29.6%) followed by 2007-08 (26.9%) and 2008-09 (22.4%). The total % of FDI Inflow in Service sector in Total FDI Inflow from 2002-03 to 2009-10 is 21.5%. which holds the prominent (1st) position in the sector attracting FDI inflows.

Cum.FDI

Pearson

1.000

Correlation Sig. (2-tailed)

.000

N FDI.SERVIC Pearson E

.952**

Correlation

8.000

8

.952**

1.000

Sig. (2-tailed)

.000

N

8

8.000

**. Correlation is significant at the 0.01 level (2-tailed).

The result of Table 3 is produced below: Table 3 Cumulative FDI Inflow VS FDI Inflows in Service Sector

The significant influence of FDI in Service Sector on the Total Cumulative FDI in Indian Economy is tested by Regression analysis using SPSS 16.

FDI Inflows in Service Sector

Inflows

Non Financial)

Inflows

2002-03 3134

326

10.4

2003-04 2634

269

10.2

Table 5. (Regression Analysis):

2004-05 3755

469

12.5

Table 4 (Correlation Matrix):

2005-06 5549

581

10.4

2006-07 15730

4664

29.6

2007-08 24579

6615

26.9

2008-09 27309

6138

22.4

2009-10 25888

4353

16.8

Total

23415

21.5

Year

(Financial and

% of FDI

It is observed from Table 5 that R square is .906 meaning that 90.6% of the Cumulative FDI in India Economy is explained by FDI in Service Sector. The result of Table 5 is produced below:

Cumulative FDI

Model Summary

108578

Adjusted R Model R 1

.952a

Std. Error of

R Square Square

the Estimate

.906

3667.64246

.890

a. Predictors: (Constant), FDI.SERVICE


A Study of Foreign Direct Investment in Service Sector in Indian Scenario It is further observed from Table 6 that T value of FDI in Service Sector is 7.590 (which is beyond the range of - 2 and +2) and p value of .000 (p < .05). Hence the FDI in Service Sector is a very significant factor influencing the Cumulative FDI in Indian Economy. It is also observed that VIF (Variance Inflation Factor) is less than 2 hence the regression can be proceeded with. The beta coefficient is + .952 indicating that FDI in Service Sector is positively influencing the Cumulative FDI in Indian Economy. The result of Table 6 is produced below:

Unstandardized

Standardized

Collinearity

Coefficients

Coefficients

Statistics Toler

(Constant) FDI.SERVIC E

(Amount in US Million Dollars) is produced in Table 7 below: 2006

2007

2008

2009

2010

3939

2063

8043

5778

3659

FDI

Coefficientsa

1

Total FDI equity Inflows from 2007 to 2010 (Year has been taken from January to December)

Year

Table 6

Model

The total inflow of equity FDI in Service Sector (Financial and Non Financial) in India is tested through the fitting Linear Trend equation using the method of least squares. The Linear Trend Equation is Y= a + bx

B

Std. Error Beta

t

2519.934

1949.908

1.292 .244

3.776

.498

.952

Sig.

7.590 .000

ance VIF

1.000 1.000

Inflows

Source: Website of Department of Industrial promotion and policy (DIPP) The calculated Linear Trend Equation is given below Y= 4696.4 +315.5t (As it is time series)

a. Dependent Variable: Cum.FDI

The graph below (Graph 1) reflects the FDI Inflows in Service Sector in Indian Scenario from 2002-03 to 2009-10. The highest FDI Inflows in Service Sector was in the year 2007-08 (6615 US $ (in millions)) followed by 2008-09 (6138 US $ (in millions)) and in the year 2006-7 (4664 US $ (in millions)). So, a steady increase in the FDI Inflows in the service sector is observed though it has reduced a bit in the year 2009-10 compared to 2008-09. The graph 1 is produced below: Graphical Representation of FDI Inflows in Service Sector in India

However using the Linear Trend Equation as shown below the projected inflow of FDI in Power Sector in India for the year 2012, deviation taken (t) = 4 Y (2012) = 4696.4 +315.5(4) = 5958.4 US Million Dollars For the year 2013, deviation taken (t) = 5 Y (2012) = 4696.4 +315.5(5) = 6273.9 US Million Dollars. It can be observed from the above calculation that the projected FDI Inflows in Service Sector (Financial and Non Financial) in India in 2012 and 2013 is expected to be 5958.4 and 6273.9 US Million Dollars. (January to December) At the “Focus India Show” in Chicago Indian Commerce and Industry Minister Mr. Kamal Nath told the US investors that India has emerged as the “Best Destination” for FDI and joint ventures. He also described India economy as “India: The Fastest Growing Free Market Democracy”. II) Analysis of Monthly FDI Inflow in Service Sector (Financial and Non Financial) and in India Economy (2009-10 and 2010-11)

Note: X Axis represents the FDI Inflows in Service Sector (Financial and Non Financial) (US $ (in millions) Y Axis represents the years

The Table below (Table 8) represents the total FDI Inflow in India in the year 2009-10 (April, 2009 to March, 2010) and 2010-11 (April, 2010 to March, 2011). It is observed that during 3 months : May, Sept and December the increase in FDI Inflows in 2010-11 compared to 2009-10 shows a positive increase of 118, 606, 472 US $ (in millions) representing % increase of 5,40 and 30. In other months FDI Inflow shows a decreasing trend in 2010-11 compared to


A Study of Foreign Direct Investment in Service Sector in Indian Scenario 2009-10 , highest being in the month of August of 1938 US $ (in millions) (representing 59%) If we look at the overall FDI Inflow in Indian Economy in 2010-11 compared to 2009-10 it shows a decreasing trend. (Absolute decrease 6420 US $ (in millions representing 24%). The result of Table 8 is given below: TABLE 8 (FDI inflow for the Indian Economy) 2009-

2010-

Absolute Increase/

% Increase/

Month

10

11

Decrease

Decrease

April

2339

2179

-160

-0.068405301

May

2095

2213

118

0.056324582

June

2582

1380

-1202

-0.465530596

July

3476

1785

-1691

-0.486478711

August

3268

1330

-1938

-0.593023256

Sept

1512

2118

606

0.400793651

October

2332

1392

-940

-0.403087479

November 1735

1628

-107

-0.06167147

December

1542

2014

472

0.306095979

January

2042

1042

-1000

-0.489715965

February

1717

1274

-443

-0.258008154

March

1209

1074

-135

-0.111662531

25849

19429

-6420

-0.248365507

Source: Website of Department of Industrial promotion and policy (DIPP) FDI Inflows means FDI EQUITY INFLOWS From the Table below (Table 9) it can be observed that service sector in India is showing a positive increase in the month of July (34%), September (447%), November (36%) and December (135%) for the year 2010-11 compared to 2009-10. The maximum decrease is reflected in the month of June (-91%) and October (-80%) for the year 2010-11 compared to 2009-10. The result of Table 9 is produced below: Table 9 (FDI inflow in the Indian Service Sector) 2010-

Absolute Increase/

% Increase/

Month

2009-10

11

Decrease

Decrease

April

655.19

355.25

-299.94

-0.45779087

May

492.62

231.83

-260.79

-0.529393853

June

781.77

68.45

-713.32

-0.912442278

July

286.5

384.2

97.7

0.341012216

August

338.52

181.51

-157.01

-0.463813069

Sept

147.33

806.09

658.76

4.471322881

October

493.53

96.01

-397.52

-0.805462687

November 317.46

433.64

116.18

0.365967366

December

108.96

256.77

147.81

1.356552863

January

330.14

143.27

-186.87

-0.566032592

February

307.9

275.2

-32.7

-0.106203313

March

207.29

134.6

-72.69

-0.350668146

4467.21

3366.82 -1100.39

-0.246326007

In the a below Table 10 it can be observed in 200910, the total FDI Inflow in Indian Service Sector was 17% of the total FDI Inflow in Indian Economy. In the month of June,2009 the % of total FDI Inflows in Service sector to the Total FDI Inflows in Indian Economy was the highest (30%) and was the lowest (7%) in December, 2009. In 2010-11, the total FDI Inflow in Indian Service Sector was again 17% of the total FDI Inflow in Indian Economy. In the month of September, 2010, the % of total FDI Inflows in Service sector to the Total FDI Inflows in Indian Economy was the highest (38%) and was the lowest (5%) in the month of June, 2010. The result of Table 10 is displayed below Table 10 X

Y

Z

A

B

2010-

2010-

C

2009-

2009-

Month

10

10

% 11

11

%

April

2339

655.19

28 2179

355.25

16

May

2095

492.62

24 2213

231.83

10

June

2582

781.77

30 1380

68.45

5

July

3476

286.5

8

384.2

22

August

3268

338.52

10 1330

181.51

13

Sept

1512

147.33

9

806.09

38

October

1785

2118

2332

493.53

21 1392

96.01

7

November 1735

317.46

18 1628

433.64

26

December

1542

108.96

7

2014

256.77

12

January

2042

330.14

16 1042

143.27

13

February

1717

307.9

18 1274

275.2

22

March

1209

207.29

17 1074

134.6

13

25849

4467.21 17 19429 3366.82 17

X Column = Total FDI Inflow in Indian Economy (2009-10) Y Column = Total FDI Inflow in Indian Service Sector (2009-10) Z Column = % of FDI Inflow in Indian Service Sector to Total FDI Inflow in Indian Economy ((2009-10) A Column = Total FDI Inflow in Indian Economy (2010-11) B Column= Total FDI Inflow in Indian Service Sector (2010-11) C Column = = % of FDI Inflow in Indian Service Sector to Total FDI Inflow in Indian Economy ((2010-11)


Arindam Banarjee III) Component Wise Break up of Service Sector in India: In the above analyses, the article was mainly focused on FDI Inflows in Service Sector in Financial and Non Financial areas. In this section, overall component wise break up of Service Sector has been analyzed. The sector taken into consideration apart from Financial and Non Financial are telecommunication, consultancy services, Trading, Hotel and Tourism. It can be observed from the below table (Table 11) that maximum FDI has been attracted in Financial and Non Financial (54%) followed by Telecommunication (26%) , Trading (10%) and Hotel and tourism in the financial year 2010-11. The result of Table 11 is produced below:

2009-

2010-

Absolute

10

11

+/-

% +/-

Financial

4467

3366

-1101

-24

Telecom

2531

1659

-872

-34

Services

345

256

-89

-25

Trading

578

667

89

15

Hotel & Tourism

748

268

-480

-64

Total

8669

6216

-2453

-28

Sector Finan & Non

Consultancy

If we plot a graph between Cumulative FDI Inflows and FDI Inflows in Service Sector it can be shown as below:

The result of Table 11 is produced below: FDI Sector

Inflow

%

Financial

3366

54

Telecom

1659

26

Consultancy Services

256

5

Trading

667

10

Hotel & Tourism

268

5

Total

6216

Financial

& Non

PIE CHART (for the above table)

FDI Inflow in Different sectors related to Service (April, 2010 to March, 2011) in (US $ (in millions) If we make a comparison between 2009-10 and 201011 it can be observed that in only Trading reflects a positive increase in FDI Inflows in the year 2010-11 compared to 2009-10 ( % increase of 15% and Absolute increase of 89 US $ (in millions). The greatest decrease in observed in Hotel and Tourism Sector (-64%) followed by Telecommunication sector (34%) and Consultancy services (25%) as is observed from Table 12 below. The result of Table 12 is observed below:

X-axis: years, Y axis: FDI Inflows, Series 1: Cumulative FDI Inflows, Series 2: FDI Inflows in Service Sector In the above graph it can be observed that with the FDI inflow has increased with the increase of total FDI Inflows in India and has dipped in the year 2009 -10 showing a very positive correlation. 6. CONCLUSIONS It can be concluded from the above literature reviews that FDI Inflows in Service Sector do have a positive impact on economic growth. Though FDI Inflows in Service Sector occupies the highest amongst all the sectors in India in attracting FDI Inflows which is indeed a positive sign for Indian Economy but from a sectoral perspective, while the FDI inflows in services sector (financial & non-financial) recorded a decline of as much as 24% in 2010-11 compared to 2009-10, sectors which is an alarming sign. India needs is to put in place a comprehensive development strategy, which includes being open to trade and FDI. A confluence of factors such as the recent spurt in corruption cases, procedural delays, environmental policy issues, comparatively higher inflation might have affected the FDI investment into the country during the current fiscal. While in general, the global economic prospect seems to have improved in the recent past, the emergence of issues such as debt crisis in the European region is likely to have impacted the investor's sentiment during some parts of the year. This, coupled with the issues prevalent domestically, might affect the long-term FDI flows in India.


A Study of Foreign Direct Investment in Service Sector in Indian Scenario

India has to fully unravel its FDI potential and the government would have to take significant measures aimed at further liberalization of FDI, thus creating a clean image by tackling corruption, easing the procedural processes and building robust infrastructure to make India an emerging investment hub.

7. References: Balasubramanyam, V.N.Mahambare, Vidya (2003), “FDI in India, Transnational Corporations, UNCTAD, Volume 12, Number 2, pp 45- 72. Chakraborty C. Nunnenkamp, P. (2008), “Economic Reforms, FDI, and Economic Growth in India: A Sectoral Level Analysis, World Development, 36(7). Pp 1192-1212 Economic Department, Ministry of Finance & Company Affairs Economic Survey 2007-2008, New Delhi. News letters published by the Department of Industrial Policy and Promotion, Ministry of Commerce and Industry, Government of India.

R. Nagaraj (2003), “FDI in India in 1990's, Trend and Issues”, Economic and Political Weekly, 26th April, 2003. Dr. Jita Bhattacharyya and Mousumi Bhattacharya (2011), “Causal Relationship between FDI Inflow and Services Export – A case of India,” Gurukul Business Review (GBR), Vol. 7 (Spring 2011), pp. 63-72. Zhu, Li-ping and Yang Xu-biao (2010), “The Empirical Analysis on the relationship between foreign direct investment and China's service industry growth efficiency” Information Science and Engineering (ICISE), 2010 2nd International Conference on Pages 3259 – 3262. Chitrakalpa Sen (2011), “FDI in Service Sector – Propagator for Growth for India?” Theoretical and Applied Economics (Volume XVIII, No. 6(559), pp. 141-156. Kulwindar Singh (2005), “Foreign Direct Investment in India: A critical analysis of FDI from 1991 -2005”.


©Journal of Human and Work Management July, 2014, Vol. 2, No.1

Faculty of Management Studies, MRIU (ISSN2320-8384)

“Management of Humanitarian Supply Chain Response” – an Oriental India's best Practice of 'Asoka the Great” Dr. S. P. Rath Professor – Management Studies Institute of Hotel Management

ABSTRACT: The 21st century management principles and practices have gone through a sea change in comparison to the 19th and 20th century. This new millennium looks for concerns of human beings and greater interests. All those management practices of European model and American model have started clearing up of the black spots of industrialization from the corporate governance and system practices. Japanese management practices have started delivering the value base management principles for the greater world with high level of quantification for quality improvisation by borrowing the concepts from the oriental principles and practices with revival and new coinage methods. As a matter of fact the oriental practices of management principles with human touch and greater social concern are the driving forces of change in the modern management. Indian management practices, principles, doctrines and arguments are in the store house of the history. It's the right time for revival of the management practices for application in the modern methods and philosophy of management. India in its oriental texts has the treasury of knowledge wealth for rephrasing and moderation as per the disciplinary streams needs for application. This in fact is one of the most advanced pragmatic philosophies for revival and reapplication for the benefits of the governance mechanisms of corporations and non commercial corporations of the 21st century. Maurya phase of the Indian history was the most pragmatic phase of 136 years of governance. Chanakya, the man, created the applied philosophy and the first empire. Asoka the Great championed the application beyond the texts that defined the future trends and both Chanakya and Asoka made the history that the world remembers as the excellent governance i.e.,the “Management of Humanitarian Supply Chain”. Management is being re-searched in this article from the Asokan governance mechanisms and applications of principles, that's the great management system for the greater world. KEY WORDS: Corporate Governance, Supply Chain Management, Revolutionary Change Management, Life Excellence Management, Corporate Benevolent Governance

1.

ASOKA- Winning the Race Strategy: Power and Control Mechanisms with Human Touch

In the World of History King Asoka is known for his veteran management & dynamism of change. The drive for change or the revolution for change in any management order is fire. Managing change and surviving with change of socio-

political & economic order is not a difficult task rather impossible if reviewed the pages of the history. Few philosophers have been able to define and redefine time. Asoka is one among them, that's why the world conferred on him “the Great” title. Out of the great rulers of the world, Asoka is regarded as the top of the list by his contributions to the society and mankind. Chandragupta Maurya, who founded the Mauryan dynasty and the first empire about 324 B.C.E., Asoka being the grandson inherited the empire about 268 B.C.E. after a four year power struggle. Asoka extended the Maurya Empire further south of India by defeating many kingdoms including the arch rival Kalinga. This empire was second in the history of the world, after the Mongol Empire. The Mauryan Empire was a political unit of a new order of magnitude


Management of Humanitarian Supply Chain Response” – an Oriental India's best Practice of 'Asoka the Great” in India, the first of its kind, for example, in which there were speakers of Indo – Aryan languages (derivatives of Sanskrit language) so far apart that their dialects must have been mutually incomprehensible. Asoka ruled almost 30 years (268 – 239 B.C.E.) on the Indian subcontinent with towering achievements. Mighty military system with excellent supply chain management he maintained the successful empire structure. Asoka at the age of eighteen was appointed as the viceroy of Avnti Rashtra with its capital Ujjayini. When Bindusara died in 272 B.C.E. Asoka captured the throne with the help of ministers headed by Khallataka or Radhagupta. That led to a war of succession for the throne of the empire between Susima and Asoka. Susima was helped by his 98 brothers except Tishya. Asoka defeated his brothers and occupied the throne, that's why he was titled as Chandasoka. Contest for the throne delayed his coronation for four years after the death of Bindusara. There is no independent historical evidence for such a struggle and bloodshed except some literature of the nearby period. During the first thirteen years of his reign he carried out traditional policy of expire expansion within India and friendly relations with foreign powers. He was aggressive at home and passive abroad. The last battle he fought was Kalinga war on the thirteenth year of his reign as per his rock edict XIII, i.e., B.C.E. 261, with the Kalinga war his his era of military conquest or Digvijaya was over and the era of spiritual conquest or Dharm Vijay was about to begin. Kalinga war opened a new epoch in the history of India. As an emperor he was able to balance such an opposite change in the management of the empire. As an able ruler he was great in managing control over all the parts of the empire. Many historians argue in favour of his foresight and knowledge. Management scholars of Indian management system very well see the knowledge management excellence of Asoka the Great. As per some historical evidences Asoka was trained to be a Minister of the Mauryan Empire with adequate master level qualifications for the purpose. His management excellence reflects his knowledge in geography, economics, philosophy and military science in the empire management.

Figure -1. Advanced Corporate Governance Model of Maurya Phase

Nand Dhananand

Chanakya & Chandragupta

Asoka, Upagupta & King Mahendra

Asoka

1. Empire Governance through Zero Failure Alternative Mechanism of Humanitarian Supply Chain The world has experienced the dynamic management characteristics of the Mauryan Empire, Chanakyas strategies, the scholastic contribution of the prominent scholars of the ancient India especially that of the Maurya period, Asoka and his conquests of wars and annexations. Asoka had a distinct advantage out of the prominent Mauryan rulers as management scholars see through. Asoka used the doctrines of Chanakya to the end limits and experimented with his prescribed theories to win success and he did it. Some of the Chanakya's doctrines none of the Mauryan Emperors dared to attempt before Asoka, which Asoka used to its end limit. 1.1.Garrisoned Strategic Townships – the Military Supply Chain for Law & Order Maintenance Maurya Empire during the reign of Asoka was a full proof through garrisoned strategic townships. Frontiers were chosen with geopolitical strategies with adequate communication links or roads, ports, river ports and large human settlements. Every strategic location to check foreign invasion was garrisoned with military forces, such townships were backed by human settlements to support the army needs by agrarian and metallurgical productions. In the time of need during the war the agrarian community was trained for policing, paramilitary and army services. Provinces were equipped to support the army camps in materials and manpower. Banking on Mandala theory each provinces were well equipped to extend immediate support to military stations in the time


S P Rath of war and emergencies. Federalist character of provinces with unitary empire system were the military hegemony strategies for the protection of the frontier Himalayan and mountain range passes in the North, North-West and North-East parts of the empire. Strategic locations in the mainland of the empire were developed with military hubs through navigation and roadways connectivity for the efficient movement of the army for support of any battlefield and war locations. Every military station was backed by civilian settlements and skilled community for self sustainability of the garrisoned towns. Army townships were also in-charge of trade ports and trade town's protection, security and policing. Geopolitical army stations were permanent in nature with activity supports by civilian settlements, agrarian community and industrial villages, trade towns and province capitals. Army intelligence, highway patrolling were the activities of large army camps garrisoned towns. Navy was a part of the Asokan military system to protect the coastal territory and maritime traders’ ships and properties. Routine transfers of army officials and regular inspections were keeping the army with wartime readiness.

2.2. Confederacy Governing Mechanisms & Successful Management – Excellent Supply Chain Response Political character of the empire was federal with unitary approach. Many kingdoms were also part of the confederacy for greater strengths and security. Foreign kingdoms like Ceylon (island), hinterland Himalayan kingdom like Tibet, Nepal, Burmese forest kingdoms, South Indian kingdoms Cholas, Pandyas, Keralaputras and Satyaputras were independent but parts of the confederacy of Asokan Empire. Asoka was pacific in the foreign relations. Confederacy was designed by Chanakya for the Mauryan Emoire for long term delivery of good and effective governance. Chandragupta and Bindusara had established the Chanakya's model of confederacy and Asoka added the extra life by establishing garrisoned towns. Asoka had a movable army of Figure – 3.

Figure – 2.

Sea Trade Routes and Connectivity of India with Ancient Western & Eastern Centers

India under Mauryan Rule of Asoka B.C.E. 250

huge size under his command. Asoka was aggressive at home and was able to crush and suppress any revolution against the empire. Confederacy used to command an army of twenty two Lakhs, more than two Lakhs of cavalry, more than twenty thousand elephants and nearly twenty thousand camel army and navy was of nearly two Lakhs soldiers as per some estimations. These military strengths were supported by more than the army size service personnel, who were equipped to join the army at the time of need. Army was under regular and routine mobility to gain expertise in geopolitical strategic warfare. With good agrarian and industrial production in the empire with high


Management of Humanitarian Supply Chain Response” – an Oriental India's best Practice of 'Asoka the Great” volume international trade in the forms of exports were contributing for high per-capita income and national income. Provinces of confederacy had a uniform revenue sharing by unitary mechanism controlled at the center in Pataliputra. Regulatory provisions including taxation structure were controlled by the center, that's how governing system was in the order. Figure – 4. Asoka's Economics of Public Life – Commerce & Trade (Model) COMMERCE AND TRADE BASE SUPPORT SYSTEM HUMANITARIAN SUPPLY CHAIN

Source: Conceptualized Modeling through Research (2012)

2.3. High Traffic and High Trade Routes – Effective Management of Humanitarian Supply Chain Response During the reign of Asoka many trade towns of the empire were at the peak of trade activities and links were largely with the international market. Cities had international reputation with specialized trade and manufacturing activities. The famous cities like Saravasti, Varanasi, Champa, Rajagriha, Ujjayin, Kosmabi, Kusinara, Saket, etc. grew around market places and attracted artisans from far and near with the allurement of easy availability of raw materials and easy market for the disposal of their products. With the consolidation disposal of markets, cities multiplied in number and became the storehouse of wealth. These cities

(Kubernagari) were so much coveted and prized by the adventuring spirits that they became the capitals of new states. Archeological data shows that many townships were built according to a certain plan. Sea trade and maritime trade were linked to different destinations outside India like Ceylon, Java, Borneo, Angkor, Aden, Kisanmyu, Kilwa, Sofala, Siam, etc. covering South Asia, Africa, and Middle East countries. Ships of Kalinga were dominating the Bay of Bengal and Ceylon destinations, Keralaputras and Pandyas were on high trades with Africa and Middle East Asia. Mauryas were in good trade links with all the independent kingdoms. More than 60 sea ports were busy on the East and West coasts of India. River ports were used for transportation to different cities in the empire. Roadways were widely connected to every city in the empire. Mountain passes were used for international trade with China, Afghanistan, Iran, Iraq, Egypt, Greece and Rome. Maurya phase experienced huge commercial international traffic. Mauryan Empire was receiving huge Buddhist pilgrimage traffic. Muryan Empire was the custodian of the Buddhist relics and holy places. All the trade routes by sea and land were safeguarded by the empire officials and army. Sea trade routes and ports were guarded by the royal navy of the empire. Trade and commercial activities were large revenue generators for the empire. 2.4. Highway Mainland Roads – Trade and Logistics Management Mauryan Empire was well known for its road connectivity inside the empire. National highways and trade highways were the roads of wealth of the empire. Trade routes were marked by convenient stages and served as links up to the most distant parts of the country with one another. One trade route was from the Eastern part to the western part. This ran principally along the great rivers. From Champa, bats and river ships plied to Banaras. From Banaras they led up the Ganges as far as Sahajati and up the Jumna as far as Kausambi, further west, the route led by land tracts to Sindhu. The second route


Management of Humanitarian Supply Chain Response” – an Oriental India's best Practice of 'Asoka the Great”

was from the North to South-West. This route extended from Saravasti, the capital of Kosala, to Pratishthana on the Godavari and the stations lying on it in the reverse direction included Ujjayini, Vidisa and Kausambi. The third rote was from North to South-East. This route was engaged from Saravasti to Rajagriha and had a number of stations including Kapilavastu, Vaisali, Pataliputra and Nalanda. The fourth trade route stretched along the land of the five rivers (Punjab) to the great highways of Central and Western Asia. Ther are references to merchants travelling from Kashmir and Gandhar to Videha, from Banaras to Ujjayini, from Magadh to Sauvira etc. A lot of wealth came from inland trade. The trading connections of Anathapindika of Saravasti extended to Rajagriha on the one side and Kasi on the other. Forest guards were hired by the merchants to protect the wealth from the robbers and forest tribes. Deserts were crossed at night with the help of land-pilots guiding the caravans by the stars. Some of the roads were called royal roads (Rajpath or Mahamagga). There are references to merchants travelling from Banaras to Baveru (Babylon). The Conquest of Kalinga by Asoka destroyed the only possible rival for the mastery of the Eastern trade. The Mauryan Empire maintained a special department for the construction of roads. At every ten stadia the empire set up a pillar to show the bye-road & distance. The most famous road of that time was the Royal Road connecting the North – West frontier with Pataliputra and leading thence to the mouth of the Ganges. Roman writer Pliny in his work called “Natural History” discussed the distance and stages of this road. The state controlled foreign trade licenses were given to the merchants of sea trade and caravan trade. External trade was carried with Syria, Egypt, Greece, etc. in the west. Principal articles of export were spices, pearls, diamonds, sandal wood, ivory, cotton cloth, silk yarn, muslin, etc.

2.5. Industry and Production Control Management for Humanitarian Response Mauryan state exercised a rigid control overall trade and industry which yielded profit. Prices of commodities were fixed and state intervened wherever there was a glut of any commodity. The superintendent of weights and measures enforced the standards of weights and measures. Markets were safeguarded against the fraudulent practices of the trading class. Ships were regulated in the river traffic and ferry charges were collected by the state. The state regulated the industry through its superintendents. The state was the biggest owner of the industry. Both the state servants and private traders were delt with the goods produced by the state. Mauryan economy was the state monopoly of mining and metallurgy. It was a source of a great income. The state enjoyed unrestricted monopoly in the trade of salt and rock salt mines. The silver mines were worked becomes clear from the large number of silver punch-marked coins assignable to the Mauryan period. There was a superintendent of iron and he looked after the manufacture of things from iron. The state controlled prices and protected the public, customers and consumers against unauthorized prices and fraudulent transactions. Severe punishment was given to those who were guilty of smuggling and adulteration of goods. Strikes by workers for an increase in salaries and wages were declared illegal because the state was monitoring adequate minimum wages system. Mauryan industrialization may be claimed as primitive industry by modern management scholars. Production control system during the period of Asoka was at its excellent craftsmanship. Timber and wood works in the structure building and ship building was one of the primary large industries in the empire. Quality control processes were of higher standards, even those quality marketing systems can be compared with any industrial procedures in modern period without robotics, automation and computerization.


Management of Humanitarian Supply Chain Response” – an Oriental India's best Practice of 'Asoka the Great”

Figure – 5. Asoka's Economics of Public Life – Industry (Model) INDUSTRIAL PRODUCTION

Source: Conceptualized Modeling through Research (2012)

2.6. Strategic Alliance with Ceylon and Custodian of Buddhist and Hindu Holy Sites – Supreme Tact in Management Towards Humanitarian Response Strategic alliance theory propagated and practiced by Chanakya was championed by Asoka by maintaining the finest and friendly relations with Ceylon. Asoka as one of the wisest emperor of the world managed the aftermath effect of the Kalinga war through revolutionary change management i.e., war widows remarriage and resettlement in Ceylon. He literally converted Ceylon as a Buddhist state. Asoka always expected an arm revolution or a silent war to bring to an end to the Mauryan dynasty after the Kalinga war. With his foresight he maintained the extraordinary friendly and family relations with Ceylon. Ceylon in fact parted with Mauryan family by allowing King Mahendra and Sanghamitra to spend their life in Ceylon. Third Buddhist council at Pataliputra was a landmark in his strategic management of a possible revolution. This in return, established Asoka as a democratic ruler and assured the army generals of no war after Kalinga war. Third Buddhist

council assured Asoka of a protégé status in Sri Lanka with power. Asoka himself adopted Buddhism in his personal life and turned as the custodian of Buddhist relics, holy places and Hindu holy places. He maintained high satisfaction Buddhist and Hindu community in his region in and outside the empire. His status of Devanampiya or Piyadasi was a supreme management strategy of managing dissatisfaction and possible revolutions. Similar strategy was adopted by Akbar of Mughal dynasty in mediaeval period, which also made him Akbar the Great. Asoka had very strong strategic alliances with Cholas, Pandyas and Keralaputras in India and outside India with Greeks, Persian, Siam kingdoms too. None of the great emperors of the world had managed so successfully different religions in their empire in the world; this makes Asoka the Great with a great difference. 3. Military Organization Management – Second to None – the Excellence in Supply Chain Asoka the Great in Military Management of the history was an enigma. He was an able general & efficient commander of war successes. Under his individual command he use to march across the empire with fighting forces of 6 Lakhs infantry, 30 thousand cavalry, 9 thousand elephants, 20 thousand camel fighters and 2 Lakhs army support service staff. The Mauryan army consisted of four limbs viz., the infantry, the cavalry, the elephants, and chariots having mobility across the empire. North – Western mountain forces were maintained to safeguard the mountain passes and trade routes. Navy was deployed in the ports, sea ports & maritime coastal trade routes. In addition to this the army was having compliments of laborers, transport workers, scouts & sappers & miners. The ambulance corps with doctors carrying their medicines & surgeons their instruments helped by bands of nurses carrying balms & bandages is also referred in the texts of contemporary Maurya period. Asoka maintained a large efficient and well equipped army which was composed of six


Management of Humanitarian Supply Chain Response” – an Oriental India's best Practice of 'Asoka the Great” sections those were, the hereditary army which was most loyal, reliable and composed mainly of the fighting classes, the hired army consisting of mercenaries who were recruited from various countries, the army formed of corporations of people (Sreni) or Guild of Levies consisting of soldiers provided by trade and craft guilds for short expeditions, the army of the king's friend (Mitra), the army belonging to an enemy (Amitra), obviously deserters and the army composed of wild tribes (Atavi Balanam) whose business was to distract or detain the enemy. There were details regarding the procedures of deployment of different kinds of army in the Mauryan battles of Asoka. The military administration of the army was looked after by the war office comprising of thirty members who were divided in to six divisions of five members each. The first division was in-charge of the navy, coast guards, river route guards and high sea naval forces. The second division was concerned with transport, commissariat and army services including the provision of drummers, grooms and mechanics and grass cutters. The third division was to deal with the infantry. The fourth division was concerned with cavalry. The fifth division was in-charge of elephants. The Asokan army had four arms (Chaturangi Sena). The addition of coordinate supply and Admirality of departments appears to be an innovation due to the genius of Asoka. The army had a separate espionage system which was intended for military intelligence. Asokan army had a very efficient and specialized supply chain management and logistics system. Movement of the army was cleared by the pilot service and parallel back up of the navy through rover ways and maritime system. Army was supplied with food, accommodations, cloth, tenting equipment, and special carpenters and metal workers through navy. Navy was involved in maintaining logistics. Army movements were supported with by garrisoned towns and army stations. Different army stations were available to increase the army strengths by double. In the time of war emergencies, army support service staffs were well equipped to join the army

immediately. The concept of paramilitary force system was another innovation of Asoka's military organization management. Professors of military strategy and warfare, diplomacy, politics and policy matters were the parts of army in think tank. Think tank of Asoka's Mauryan army was highly effective in crucial war decision makings. The available and unavailable sources of information justifies the cross docking system of Asoka's military system. The army was constituted mostly by the Kshatriyas community. To say the army was in the hands of the Kshatriyas. Meghasthenes writes “The fifth class, among Indians, consists of the warriors who were second in point of numbers to the herdsmen, but had a life of supreme freedom and enjoyment during the reign of Chandragupta Maurya. They had only military duties to perform. Asokan period witnessed high involvement of the army in structured duties and responsibilities. Army was widely used in policing and patrolling duties of the infrastructure and trade activities of the empire. Army jobs were lucrative and honourable during Asoka's reign. Asoka had meticulously structured the army functioning. Comparatively, Asoka had a superior military organization than that of the Greeks, Romans etc. who maintained huge and large armies. Military strength of Asoka's army was larger than any great emperors of the world starting from Alexander to Napoleon the Great. Asoka's army was governed by stringent moral code of conduct and regulations to deliver high ethical values. It's logically argued that, the army compelled Asoka to end his war policy after Kalinga war. Some military scholars argue that Asoka was made as a democratic ruler after Kalinga war by the army of his empire. As Asoka is known for his great military management skills, his army is also known for high ethical value mechanisms delivery. Many strong views support the argument that Asokan army delivered the high moral value by conducting the mass war widows remarriage of one hundred fifty thousand numbers and their resettlement in Tamraparni (Sri Lanka). Army supported Asoka in the social system change and made Asoka successful in his


Management of Humanitarian Supply Chain Response” – an Oriental India's best Practice of 'Asoka the Great”

drive for Dharmasoka which ultimately made Asoka the Great. Such great constructive role of army history has never repeated in this world in the last 2250 years after Asoka's reign.

4. Management of Finance, Agriculture, Judiciary, Welfare State & Social Order by Asoka the Great – Sound Management of Humanitarian Supply Chain

Figure – 6.

Corporate Governance and Corporate Good Governance is comparatively a modern concept with its impacts and forces on companies from 1980s and onward. Mauryan Empire had established corporate good governance in the period of Chandragupta Maurya and Asoka enhanced this to the level of corporate excellent governance. Such concepts were utopian as was proposed by Greek Philosophers, where as Chanakya had conceptualized it as practical and the adoption was carried forward by Chandragupta to Bindusara and Asoka further. Asoka's son King Mahida (Mahendra) to it to the level which can be called as Corporate Benevolence Governance (C.B.G.) perhaps, it will not be wrong to claim that no one has achieved till 21st century. Asoka can be regarded as the champion follower of Chanakya, who applied good governance management beyond expectations. That's how the great ruler who devised excellent management practices for the greater world. Empire or the state used to act as a corporation in the Asokan reign. Employee numbers of the Maurya Empire was exceeding forty Lakhs. Huge infrastructure, maintenance and safeguarding was the state responsibility. State was managing many non-profit organizations and departments to achieve welfare state status.

Military System Supply Chain Management (Zero-Failure & Zero-Defect) of Asokan Army

Source: Research Model Designed by Self Conceptualization (2012)

Asoka the Great, (B.C.E. 304- 239) Figure – 7 Supply Chain Management of Asoka's Maurya Empire the Humanitarian Response of Governance

ASOKA’S (EMPIRE MANAGEMENT - (S. C. M.)

Source: Conceptualized Modeling through Research (2012)

4.1. Financial Management Kautilya had designed the financial management system of the Mauryan Empire. Great emphasis was given on fiscal matters because the Mauryan state maintained a large army which had to be paid in cash. Mauryan Empire put emphasis not only on collection of revenue but also on the management of finance. The government was very cautious so that the money collected was not embezzled by its officials. History is evident, many great empires of the world were destroyed by the corruption and manipulation practices by its officials. Chanakya in his doctrine has argued that as with fish moving in water it is impossible to know when they are drinking water, so it is


Management of Humanitarian Supply Chain Response” – an Oriental India's best Practice of 'Asoka the Great”

impossible to know when they take money for themselves. Asoka had revenue intelligence and vigilance department to restrict financial corruption. Primary sources of income for the state were land revenue. The royal share of the produce of the soil called the Bhaga generally amounted to one sixth, but it differed also and ranged from one fourth to one eighth. It was based on the land used by each individual cultivator, not on the village as a whole, and also in accordance with the quality and fertility of land. Such a scientific land revenue policy was used till the Gupta period in the Indian history. After that the British government used such a land revenue policy in India with structured taxation system. There were various other sources of income of the state. The state was engaged in huge livestock trading internationally, shepherds and livestock breeders were taxed on the number of produce of the animals. The empire charged toll tax and trade tax on the articles sold. There were other taxes like forest tax, tax on intoxicants, mine tax, fish tax, irrigation tax, license tax etc. the state managed and owned vast estates and forests. Empire had monopoly of mines and traded on mineral products. The empire had its own factories managed through cooperative management of all sorts of articles. Manufacturing of cotton and silk cloths were high revenue generating products due o very large export trade. Silk yarn and silk cloth was a very high priced and profitable article during Asoka's period. The mountain trade passes were named in the geography as “Silk Route” due to the export of silk from India to other countries. Trade by waterways was controlled by the empire. River and sea ports were owned by the state and state was investing in construction, maintenance and safeguarding of the ports. State was directly participating in the organization and development of agriculture, industry and trade. State enterprises were provided with additional income. During Asoka's reign state was earning huge revenue and profit from industry and trade at domestic and international fronts. State treasury had provisions and reserves of funds for the purpose of different contingencies and emergencies like natural calamities, disaster and

famines. Cash reserves were maintained for war time situations and for the purpose of war. A separate provision of cash reserves were maintained for any kind of extra ordinary disasters. Welfare state functions like infrastructure development, education, public health and charity to the needy people were parts of the book of account. Such a scientific financial management of Asoka was few steps ahead of Chanakya's financial management provisions. Maurya period was marked by administrative change and innovations. Within this period, Asoka's reign saw an important shift in the priorities of governance. 4.2. A g r i c u l t u r e P r o d u c t i v i t y a n d Infrastructure Management Excellent management procedures were followed during the ruling of the Asoka in Maurya period. The lifeline of the empire being agriculture, it was the responsibility of the state was undertake the irrigation projects and also to construct and maintain public highways. Large river ports were constructed and maintained by the empire governance. Large numbers of river canals projects were undertaken and maintained in the empire. Monsoon dependence was shifted to round the year agriculture activities by three and four types of cropping patterns per year. Agriculture products were large parts of inland trade practices. Agrarian produce commodities prices were controlled by the state to ensure substantial profit to the producers, that's how large agricultural villages were set up on the river banks. Grass route economy being agriculture in the empire, several departments were engaged to assure higher productivity and good economic conditions of the farmers. To maintain the public economics balance state was taking care of the agricultural commodities transportation to distant market places and ports. Megasthenes has described the highway which ran from the NorthWest to Pataliputra and beyond towards East, it was 1150 miles and quite wide. Trees were planted on the roadsides and milestones and direction posts were erected along that road. Arrangements were made for its proper maintenance. A governor of the empire was responsible for building a dam across a river near


Management of Humanitarian Supply Chain Response” – an Oriental India's best Practice of 'Asoka the Great” Girnar in Western India. State bureaucracy had twenty six departmental superintendents to monitor the functional activities. Universities, Gurukuls and colleges of education were part of state infrastructure development. Urbanization was very high in the Mauryan Empire. The fortified capital was a prime element of the state was to protect the urban settlements. There seems to have four provinces in the empire under governors to look after administration and development activities – a Southern one with its center at Suvarnagiri, a Northern with its headquarters at Taxila, a Western one with its headquarters at Ujjayini and Eastern one with its center at Toshali. Pataliputra was the biggest city in the empire; even its size was larger than the Rome. The state took general care of the health of the people. Hospitals were built and maintained not only for human beings but also for animals and birds. There was a separate department for public census. A record of births and deaths were kept at every place. Figure – 8 Asoka's Economics of Public Life – Agriculture (Model) AGRARIAN PRODUCTION

Source: Conceptualized Modeling through Research (2012)

4.3. Judiciary and Welfare State Management Mauryan state was very particular about delivering impartial justice. Recognized courts for the administration of justice were available throughout the Empire. The highest court of

appeal was the King in the Council and not the King alone. There were two types of courts – Dharmasthiya courts or Civil Courts to decide cases relating to contracts, agreements, gifts, sales, marriages, inheritances, boundary disputes etc. and Kanatakasodhana courts or Criminal Courts to decide cases of thefts, robbery, murder, sex offences etc. The Supreme Court was at the capital Pataliputra presides over by the King or the chief justice. Villages were having popular courts consisting of village elders and representatives to try minor cases. The Maurya penal code was very severe. It used to order for torture, trial ob ordeal, mutilations of limbs etc. Jails were under the management of department of justice. Pardoning criminals and reduction of penalties and punishments were in the hands of Asoka. As per the justice and order system the royal family members even the emperor's family members were tried by the courts of justice and penalized. Asoka's son Kunal was blinded by force as per the justice delivery mechanism, who also ruled Magadh as an emperor. Welfare state system was monitored by the legal system and judiciary was delivering prompt and quick justice. The state regarded itself as trustee of the people. It maintained a structured salary system of different skilled and unskilled labourers. State had regulations to take care of the employee and the emperor interests. It protected the consumer by preventing the merchants from cornering commodities and raising their prices. Prices of articles were regulated in the interests of the general consumers. Fraud on customers was minimized by making the use of the standardized and stamped weights and measures compulsory. Adulterations of goods were minimized through severe punishments. Merchants were compensated for articles lost through any theft in transit. State recognized its responsibility to the destitute and diseased. Public hygiene was paid full attention by the state. Adequate measures were taken against epidemics. At the time of famine state was providing relief from state reserves and which was structurally provisioned in the state budget and adequate grains were store in the state warehouses. The government looked after the moral welfare of the people by keeping gambling, drinking and prostitution under strict control. All these large public welfare measures


Management of Humanitarian Supply Chain Response” – an Oriental India's best Practice of 'Asoka the Great” with negligible failures in delivery make Asokan management as “Corporate Excellent Governance”. Asoka maintained an empire which was neither unitary nor federal in character. 4.3. Social Order Management of the Empire Varna was the basis of the Mauryan social order and social organizations of the empire. The four Varnas became endogamous with their traditional rigidity. Brahminical system and Vedic way of life was dominating Mauryan social conditions. The society was divided in to four categories of traditional status, Brahmanas, Kshatriyas, Vaisyas and Sudras. Megasthenes refers to seven casts or classes functionally; Philosophers, Farmers, Soldiers, Herdsmen, Artisans, Magistrates and Councilors. Eventually he confused caste with occupations. There was the prevalence of mixed caste system in Mauryan Empire. Marriage between the members of the same caste was preferred through intermarriage between different castes were prevalent. Remarriage was followed by the rules of the Dharmasatra. Marriage on contract and divorce was permitted. Women were educated. Participation in social and religious functions was the rights of the women. They were also employed as spies and bodyguards. However, those privileges were restricted only to upper strata of society. The murder of a woman was regarded as equal to the murder of a Brahman. Ganikas or courtesans enjoyed a good social standing. There was a superintendent to look after prostitutes. Women were permitted to convert religion, Buddhism was accepting nuns also. 5. Revolutionary Change Management and Kalinga War–Establishment of Benevolence Corporate Governance–the Greatest Humanitarian Supply Chain Response Order Mauryan Empire achieved excellence in governance mechanism because the empire was not inherited; it was created by pragmatic philosophy of Chanakya which was strategically designed and drafted by the world's greatest strategist. The system and administration mechanism was followed without failures.

Asoka being the grand disciple of Chanakya modified and upgraded many Chanakya's doctrines and strategies. Akhand Bharat doctrine of Chanakya was almost achieved by Asoka. Factoral improvements and experience of zero failures in wars in India was instigating factor of Asoka to conquer the neighbouring state Kalinga (Modern Odisha). Chandragupta and Bindusara never attempted to invade Kalinga by violating Chanakya's philosophy of keeping democracy away from monarchy in any form of conflict. Democracy speaks the language of the masses and comes from the heart of the masses. Democracy may not deliver the best in the public interest but guarantees that worst are never delivered. Kalinga was a crude republican democracy of that time and was delivering the best in governance and public wealth generation through trade, commerce, industry and agriculture. Kalinga was dominating the Bay of Bengal and Indian Ocean through its well established trade links with Burma, Ceylon, Java, Sumatra, Borneo, Thailand and other island countries. Many of the economics historians argue that Kalinga was the largest trade economy of India and used to dictate the commodity trading price to Mauryan Empire. Per-capita income was to somewhat four times higher than the Magadh. Public rich wealth and huge buying power of Kalinga was diverting the high priced commodities of Mauryan Empire to go international through the trading community of Kalinga. At the same time Kalinga was maintaining a large army of more than three Lakhs of soldiers to safeguard its territory and maritime trade routes. Mauryan Empire sea trades through Bay of Bengal in the East Asian countries were negligible. Kalinga had community and matrimonial alliances with Ceylon and a parallel economy was growing in Sri Lanka. In the matter of international relations Kalinga was at a dictating position to Mauryan Empire through any negotiations. With the advantage of the republican democratic structure Kalinga was not in favour of territorial expansion. Chanakya as a strategist had well measured the political ambitions of Kalinga and never considered it a threat to Mauryan territorial expansion drive. In his doctrine Chanakya had explained the wealth as the greatest interest of


Management of Humanitarian Supply Chain Response” – an Oriental India's best Practice of 'Asoka the Great”

any state, so far Kalinga's wealth generation mechanism is not disturbed it will never raise any conflict with Magadh. That's why Mauryan Empire was conducting international trade with the East through Silk Trade Routes. On the eighth year after coronation Asoka waged Kalinga war in B.C.E. 261. A detailed enumeration of this was gleaned from rock edict XIII found at Sahabazgarh in Pakistan near PakAfghan border. During Asoka's period Magadh Empire had surrounded Kalinga in the north, west and south. The existence of Kalinga on the border of Magadh was definitely a threat to the power and potentiality of the later. Asoka with a superior and mighty military force supported with a zero-failure supply chain management won the Kalinga war on the battle ground near river Daya in the present Bhubaneswar. Rock edict XIII describes the horrors of Kalinga war. In this war, 150,000 thousand soldiers from the Kalinga side were taken as captives by Asoka, 1000,000 were slain and as many as that number (150,000 + 100,000 = 250,000) died of injuries and pestilence in the aftermath of the war. The war brought miseries not only to these who took to arms but also to a large number of civil population including Brahmanas, Sarmanas, their relatives and friends. As believed the sanguinary Kalinga war changed Asoka's mind. Management scholars argue that Asoka gained the wealth of this war was that of more than the double of total wealth of the Mauryan Empire. By the war economics Kalinga war was the biggest financial war business for Asoka to gain out of victory. Asoka was a warrior, and to the extent he slain his 99 brothers for the throne of Magadh. Management research has a different view of the aftermath effects of Kalinga war. In the war more than 450,000 people from the side of Kalinga died by the war at the same rate of war reverse effect Magadh had lost nothing less than 200,000 soldiers. Kalinga was maintaining a large elephant battalion to contest Magadh in any battle field. Asoka almost used his total army strength to conquer Kalinga. War reactions estimations of Asoka failed to measure his own army and army commanders' reactions after Kalinga war. Asokan army challenged the emperor to dethrone the Mauryan dynasty. Asoka

reused Chanakya's principles to handle this revolution of his gallant army. As per some literary sources Asoka asked for 22 days lead time to replace and repair the war casualties and damages. Chanakya's doctrine that a revolution can be diverted by another revolution, a change can be conquered by another change, a nail can be removed by another nail – Asoka used the doctrine to change the Mauryan army revolution by another revolutionary change management. Soldiers are society members, restructuring the social order can change the cause of their revolution. Asoka as a great scholar used Chanakya's theories for diverting his army revolution. The aftermath effects of Kalinga war are evident in the history with Asoka's policy changes to restore Mauryan dynasty back to its power and position. War victims were young and soldiers who left behind war widows and the family in grief. Asoka decided to change the war effect by changing the social order. Repairing and reversing the war damage possible through social system change. Asoka decided to be a democratic monarch and declared himself as the Dharmasoka. After Kalinga war, he converted to Buddhism by Upagupta, a Buddhist top order monk. Upagupta permitted for widow remarriages for greater social benefits. Asoka organized widow remarriage by converting the widows and agreed youth to be Buddhist. He also declared Kalinga war as the last war of his conquests. Social system of Kalinga and Magadh rejected the appeal of Asoka for their resettlement in either of the kingdoms. such a huge resettlement was agreed by the Ceylon on its land. Asoka deployed his son King Mahinda (Mahendra) and after sometime his daughter Sanghamita to Ceylon with a plant of the holy tree for the spreading of Buddhism and representative head of the resettled families. In this connection he brought some changes in the Mauryan penal code by eliminating the death penalty and royal pardon to convicts after conversion to Buddhism in selected cases. Mauryan dynasty adorned Buddhism after Kalinga war and Asoka declared himself as Devanampiya and Piyadasi – the servant of the God to take care of the subjects of the empire. Combined exercise of power and wisdom Asoka


Management of Humanitarian Supply Chain Response” – an Oriental India's best Practice of 'Asoka the Great” applied Chanakya's doctrines of diverting an arm revolution by bringing a revolutionary change movement in the society. Buddhism acted as the instrument to help Asoka for his Dhammavijay. Asoka declared to conduct the 3rd Buddhist Council in Pataliputra & invited the King of Ceylon (Tamrapani) Megaliputtatissa as the President of the third Buddhist Council. Asoka is regarded as the only emperor of India who applied Chanakya's doctrines the most to its best. Revolutionary Change Management by Asoka paved his path to greater heights of Corporate Governance. From Corporate excellent governance, Devanpiya or Piyadasi Asoka moved towards “Benevolence Corporate Governance”. This in fact was achieved by his by his son King Mahendra in Ceylon- the standing epitome is the temple of King Mahendra in Colombo, who excelled his father Asoka the great to the status of a God by the public through “Corporate Benevolence Governance”. Figure – 9 Asoka's Communication Management Model of Philosophy, Mission & Goals – Beyond Supply Chain Excellence

Uniform Communicat ion Model of Philosophy, Mission & Goals – Asoka’s Rock Edicts

Source: Conceptualized Model through Research (2012)

6.

Management of Life Excellence – The World of the Great : Nothing Larger than this in Humanitarian Supply Chain Response

Mauryan period had witnessed and experienced the excellent management applications in the empire. The creation to the phase of glory of the empire was designed by the veteran strategist Chanakya. Able generalship of Chandragupta

and Bindusara established the vast and first empire by his expansion drive. Asoka added extra glory to the empire by his expansion drive and the last battle of Kalinga war. Asoka, in fact, the man who knows the most, Chanakya and his management doctrines and he had gone beyond in applying Chanakya's theories. Chanakya was a strategist and pragmatic philosopher; his views are not untrue that religion opiates people. Chanakya maintained a secular part in his theories and proposed to use superstitions in the the benefit of the state and empire management. Asoka very well examined Chanakya's doctrine of revolutionary change management in which he had to take shelter in Budddhism. Soon after Kalinga war Asoka attempted to achieve “Management of Life Excellence”- all his patronage and governance modifications are vivid examples of it. Asoka added value, virtues and extraordinary good will to the management and corporate governance. Buddhist traditions consider Asoka as an exemplary king and Upasaka. He had a close connection with the Sangha and the leading monks of his time such as Upagupta. His generosity as a patron of the Sangha is reflected in many legends. 6.1. Third Buddhist Council – A Stepping Stone In a comparative analysis it can be claimed that Asoka attempted to bring out a new cult of philosophy and human values with highest of its order to the corporate governance. He identified the very high ethical values as suitable for incorporation to Maurya management system. Asoka's conversion to Buddhism was sudden transformative event. The Pali Chronicles asserts that Asoka convened a great Buddhist council at Pataliputra, presided over by Mogaliputta Tissa, in order to purge the Sangha of certain unacceptable practices - which was accepted as the third Buddhist council. Asoka is supposed to have built 84,000 Stupas & Viharas. Prior to Pataliputra 3rd Buddhist council two other Buddhist councils were held at Rajagriha and Vaishali. Soon after the Buddha's death at the 1st Buddhist Council in Rajagriha Upali, one of the chief disciples, recited the Vinaya Pitaka or rules of the order. A second general council is said to


Management of Humanitarian Supply Chain Response” – an Oriental India's best Practice of 'Asoka the Great” have been held at Vaisahali, one hundred years after Buddha's death. Numerous such differences appeared at the 3rd great council, held at Pataliputra under the patronage of Asoka, which resulted in the expulsion of many heretics and the establishments of the Sathviravada School as orthodox. At this council it is said that the last section was added to the Pali scriptures, the Kathavatthu of the Abhidhamma Pitaka, dealing with psychology and metaphysics. Asoka classified all the religions of his empire under five heads: The (Buddhist) Sangha, the Brahmanas, the Ajivikas, the Nirganthas (or Jainas), and other sects. He further declared that, while gave his chief patronage to the Buddhists, he honoured and respected them all, and called on his subjects to do likewise. Figure – 10.

Asoka's Dhammavijaya over Sri Lanka. Secondly, the removal and reduction of orthodox school influence on Buddhism provided Asoka an upper hand in the religious sect and community. Asoka's intentions of virtue induction for the common masses in Buddhism were fulfilled. Asoka received a change in the image of the emperor from the war veteran status to knowledge veteran. Wide spread social acceptance of his Dhamma was possible by the preaching of a knowledge master. Third Buddhist council conveyed and established Asoka as a knowledge master internationally and also with his subjects. At the same time the feel good factor enhanced within his army, which may have brought a revolution to dethrone the Maurya dynasty during his life time. This council endorsed his preaching of virtue in to the Mauryan administration. The retaliation by Kalinga in the near future was avoided. To keep Kalinga in good will he appointed a governor and a Dhamma monitor in Tosali of Kalinga. Sri Lanka was in a special status of most favoured nation of Asoka with utmost care, financial grants and developmental activities to pacify the anguish and anger of Kalinga, in which he succeeded for some time but Kalinga retaliated under the ruling of Kharavela. 6.2. Dhamma – The Inclusion and Management of Life Excellence

The Spread of Buddhism in Asia, 400 B.C.E. – 600 C.E. The Mahavamsa mentions a number of Buddhist missions dispatched by Asoka at the conclusion of the 3rd council – Himalayan region, Yona (in the North-West), Western Malwa, Varanasi, Maharrattha (Western Deccan), Suvarnabhumi (perhaps Myanmar or South East Asia), Sri Lanka. Other records and cannons confirm that missions were sent to Greece, Babylon, Syria, Egypt, Arab, Afghanistan, Indonesia and coastal China. Third Buddhist council strengthened Asoka's international relations and most favoured nation status with Sri Lanka. Since Sri Lanka turned a Buddhist nation. That justifies

Most of Asoka's inscriptions are about Dhamma (the Prakrit form of Dhamma). Pillar edict VI reveals that the practice of having inscriptions on Dhamma (Dhamma Lipi) inscribed in various parts of the empire began 12 (expired years) after his coronation. The theme of Ahimsa (noninjury) is an important aspect of Asoka's Dhamma and his frequently mentioned and emphasized in his rock edicts. It bans animal sacrifices and killing of animals. The good conduct and social responsibilities that were part of Dhamma were anchored to certain key relationships. The ceremony of Dhamma is described as consisting in proper courtesy to slaves and servants, respectful behaviour to towards elders, restraint in one's dealings with all living beings, and liberally to Sharmanas and Brahmanas. Even Asoka declares the gift of


Management of Humanitarian Supply Chain Response” – an Oriental India's best Practice of 'Asoka the Great”

Dhamma is best of all gifts. Pillar edict –II describes Dhamma as consisting of the least amount of sin, performing many virtuous deeds, compassion, liberality, truthfulness and purity. The Asokan edict presents the king as exemplifying Dhamma in his ideas and actions. As the patriarch of his empire, Asoka projected himself as the proclaimer and teacher of Dhamma par excellence. One of the most remarkable innovative aspects of Asoka's idea of his own Dhamma and Dhamma of a king was his renunciation of warfare and his re-definition of righteous conquests, the Dhamma – Vijaya of Arthasastra. Asoka seems to have taken the Buddhist idea of Dharma – Vijaya one step further, with Dhamma missionaries replacing the king and his army. Dhamma- Vijay is described as the best kind of conquest, and the king claims to have achieved it over the Yavans, Kambojas, Nabhakas, Nabhapankits, Bhojas, Pitinikas, Andhras, Cholas and Pandyas. Outside the subcontinent, he claims to have attained Dhamma – Vijaya in the dominions of Antiochus II, Ptolemy II, Philadelphus of Egypt, Megas of Cyrene (in North-Africa), Antigonus Gonatas of Macedonia, and Alexander of Epirus or Corinth. The XIII major rock edict ends with Asoka expressing the hope that his successors would not embark on any fresh conquest by arms, and if they could not avoid it, they should at least not be harsh to conquered people. Asoka created a special cadre of Dhamma-Mahamattas 13 years of his coronationto spread Dhamma within the kingdom and among the border people. Dhamma was an ideological tool used by Asoka to weld and consolidate his far-flung empire that focused on the relationship between the individual and society; however it failed as a unifying strategy in the rulership of future emperors. Dhamma was one step further to Buddhism and was borrowing the principles of virtue from Hinduism. Dhamma had a holistic and welfare approach to empire management as was conceived, designed and strategized by Chanakya. Asoka attempted and to a great extent delivered his Dhamma principles. As observed through management analytical techniques, Asoka's achievements were far superior and much ahead of time and period. Highest quality governance mechanism was adopted by Asoka and excellent governance was

delivered to the empire. Life Excellence Management may not be utopian but ultimately demands an environment an environment at global level, simply which was missing in his period. Asoka devised the principles of Dhamma without empirical strategies to control the malfunctioning. Achieving life excellence management under dynastic monarchical order is impossible for a long run. Chanakya always followed counter strategies and alternative strategies with legal enforcements for large corporate governance, which Asoka missed out. Asoka delivered life excellence management for duration of two decades under his governorship of the empire. If Dhamma would have been followed for more than two hundred years in India, arguably it can be said that sufficient to eliminate any religion of that time. Dhamma application in its totality is beyond “Benevolence Corporate Governance”, perhaps, Dhamma was applied more in Sri Lnaka than in India as history recognized King Mahinda's governance mechanisms and practices. Comparatively none of the Great rulers of the world history had ever attempted such a noble practice its true sense. The second Great ruler of India, Akbar the Great attempted a similar tact to unify the empire and to gain confidence of the subjects. Asoka in fact a true secular ruler and practiced the life excellence to the height of virtues. 7. Asokan Management Theorization: Humanitarian Supply Chain Unachievable in Future Industrial Operations of the World Achievements of three decades of Asoka can be theorized in to different management concepts and systems. Contributions of his period are superior management theories of attainment, that needs revival management research for the strong hold of the the Indian Management System (I.M.S.). as Indian management begins from the Pre-Vedic period till the end of 11th century A.D., Mauryan period has championed many theories system. Asoka had taken up many management theories to the height of its order. Eventually Asoka was the only personality who experienced most of the doctrines of Chanakya. In the period of before Christ the technology, environment, scientific developments etc., were


Management of Humanitarian Supply Chain Response” – an Oriental India's best Practice of 'Asoka the Great” nothing more than the primitive methods. It sounds very difficult to compare the modern management of 20th & 21st century with Mauryan period of Asoka. In comparative methods when the applications of dynamism are compared it astonishes that with limited resources and technology the Mauryan army had achieved Zero-Defect and Zero-Failure Supply Chain Management. International trade with more than 18 countries through sea route on wooden ships were frequent, more than 6000 K.M. longnational highway was maintained, metallurgy and steel making were achieved – 2250 years old Asokan metal pillars are available rust free for our references, unbelievable scientific progression are available in the Mauryan texts, quality engineering and quality management were industrial production norms, disaster management preparedness and adequate financial planning and reserves of Mauryan period were even more advanced than many of the developed countries of the world today. HRM and Corporate Governance mechanism had excelled many steps ahead of the contemporary world in delivering corporate good governance, Corporate Excellent Governance & Corporate Benevolent Governance, what the present world has failed to deliver. In a broad spectrum of management theorization of Asokan phase seven headlines are provided here with brief divisions of achievements and comparison with modern management of today's world. These are; (1) Military Management, (2) Public Administration & Corporate Governance, (3) Welfare System Management, (4) Agriculture, Industry & Trade Management System, (5) Efficient Financial Control & Treasury Management, (6) Human Resource Management & Development, (7) Corporate Governance Model etc. I) Military Management (a) Zero – Failure Supply Chain Management of the army (b) Zero – Defect army Supply Chain Management at war © Cross Docking Supply Chain Management at war (d) C o n t i n g e n c y a n d E x t r a O r d i n a r y requirements meeting supply chain

(e) (f)

(g) (h)

(II) (a) (b) © (d)

(e)

management Alternative strategies and alternative positioning system Over flow and Super flow strategic arrangements for winning positioning system Internetworking & Intranetworking of army supply chain management Knowledge Management & Intellectual Capital Management of army and war time decision making Public Administration & Corporate Governance Public – Private – Partnership in Agriculture, Industry, Trade & Commerce Guilds and Banking System for trade and commerce finance International trade to more than 18 countries State trade and Industry support – Infrastructure support management, insurance coverage, commercial hub & ware-housing, roadways and waterways safeguarding & surveillance system Trade facilities taxes for security, price control, weights & measures control, fraudulence and adulteration control, diplomatic envoys for healthy international trade facilities

(III) Welfare System Management (a) Provision of CSR – Corporate Social Responsibility – health care, education, old age care, social care (b) Corruption control and anti corruption vigilance mechanism © Natural disaster mitigation and preparedness (d) Natural calamities handling, shifting and demand management (e) Social courts, social justice & social policing (IV) A g r i c u l t u r e , I n d u s t r y & Tr a d e Management System (a) Surplus agrarian production of 3 to 4 times more per year (b) Contingency agricultural products reserves © Domestic and international trade for


Management of Humanitarian Supply Chain Response” – an Oriental India's best Practice of 'Asoka the Great”

(d) (e) (f) (g) (h)

(I) (j)

(k)

Demand – Supply control Fair pricing for adequate profitability Cash cropping for national cooperative industry – international and domestic trade for market control Agro-base industry for domestic and foreign markets Life saving products for domestic markets Mine base production and metallurgy for public life use equipment, military equipment and war-gears, luxury goods for domestic and international markets Quality management of consumer goods, consumer durables & industrial goods Technology management for industrial equipment, military equipment, transport equipment, consumer equipment, infrastructure equipment, etc. Transportation and infrastructure system maintenance, management and upgradation of roadways and waterways

(V) Efficient Financial Control and Treasury Management (a) Scientific budgeting with provisions of reserves for disaster, famine, war recoveries (b) Currency circulation and defined salary systems for all services © Cross coordination between departments of administration and regulations (d) Adequate documentation for decision making, sourcing and referencing (e) Uniform and defined tax structure (VI) Human Resource Management & Development (a) Public census and citizen identification for national policy making (b) Awards, rewards and promotion system in work (c) Defined wage and salary system with limited minimum wage system (d) Prompt and efficient civil, criminal and social court justice delivery system (e) Human capital retention and intellectual capital management system (f) Public institutions & universities of education & specialized skills training

(VII) Corporate Governance Model (a) Working Governance (b) Corporate Good Governance (c) Corporate Excellent Governance (d) Corporate Benevolent Governance (e) Management of Life Excellence In the late 20th century and 21st century, in the world of management, Japanese theories and concepts are dominating the world of industry. Japanese management concepts are admired as the best applications in production, quality engineering and management, quality control, cost minimization, value for money, continuous improvement, etc., by the world. These concepts are revival of oriental management practices of Samurai cult with new coins of modern management. Indian Management System (I.M.S.) has started gaining little attention in the 21st century for a revival of modern management applications. Mauryan phase especially Asokan period had achieved excellence in application. Mauryan period has a lot in its store house to offer dynamism to Modern Management in practice and application. Managing the humanitarian supply chain of “Asoka the Great” of oriental Indian history of Maurya Period is the class beyond the industrial achievements of the modern world, to claim, will stand firmly true without arguments. Bibliography & References: 1.

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ŠJournal of Human and Work Management July, 2014, Vol. 2, No.1

Faculty of Management Studies, MRIU (ISSN2320-8384)

An Evaluative Analysis of Service Quality Gap Using SERVQUAL: A Case of Private Bank in NCR Prof (Dr) Gopal Singh Latwal Faculty of Management Studies Institute of Information Technology & Management Janakpuri, New Delhi-58

Prof (Dr) R. K. Sharma

Ravi Dutt*

Bharti Vidyapeeth University, Paschim Vihar, New Delhi E-mail rksharma992@ yahoo.com

Research Scholar, Banasthali Vidyapith (Rajasthan) E-mail rdutt26 @ gmail.com Corresponding author

ABSTRACT: Service sector is the most important contributor to the GDP of developed economies. It is also dominating in developing countries in the era of globalization. The growing importance of service sector in Indian economy has been observed over the past decade. The rapid growth shows the emergence and growth of service sector in an agrarian country like India. Service being abstract in nature can be experienced through deeds and performance. Measuring service quality is difficult because of its subjective nature. The functional quality is usually the primary determinant of customer's quality perception. The quality and satisfaction is directly related. In today's increasingly competitive environment, quality service is critical to corporate success. It is assumed that private sector banks provide superior quality thus, this paper attempts to examine the main features of service quality, GAP model, analyze bank's performance with respect to various service dimensions, how retail customer rates their service quality and to identify the areas where improvement is sought with the help of SERVQUAL analysis. The study is carried out by using the original SERVQUAL questionnaire. Weighted average is calculated to accurately evaluate the GAP of various service dimensions as per the importance placed by the customers. The study reveals that frontline employees are very important in service delivery and key to fulfill the expectation of the customer in terms of service quality. Key Words: Service Quality, GAP Model, SERVQUAL

1. INTRODUCTION Service sector is the most important contributor to the GDP of the developed economy. It is also dominating in the developing country in the era of globalization. The growing importance of service sector in Indian economy has been observed over the past decade. It is growing rapidly with the growth rate 11.18 per cent in 2007. The contribution of service in the GDP accounted 60.7 percent in 2006 which show the emergence and growth of service sector in agrarian country like India, and within service sector the contribution of banks in the GDP Growth is 2.5 per cent in 2008-09, which is likely to increase 8.7 per cent by 2013(McKinsey Report). Service is an abstract aspect of the marketing that can be experienced through the deed, activity and the performance. In the word of Zeithaml, Service is any act, deed, and performance. Service quality is very important aspect for the service provider as they guide and direct the organization success path. The satisfied customer contributes towards the growth of the organization. The organization must know the specific needs of the customers resulting in satisfaction and factors contributing towards dissatisfaction. The satisfaction or dissatisfaction depends on the balance between customers' expectations and customers' experiences (perception) with the products and services (Zeithaml et. al, 1990). The customer is an important stakeholder of the service industry who gives business to the organization and decides the fate of the organization. They are now even more important in view of intense competition in this era of globalization.


Ravi Dutt, Gopal Singh Latwal & K K Sharma It is very difficult to measure the satisfaction level of the customers; especially in case of services, it is not easy to accommodate most of the satisfaction attributes than that of the product. As the global economy is now led by the service sector, service providers are interested to find out new dimensions of the service quality. Parasuraman et al. (1985, 1988) advocated such a tool where service quality gap is calculated to find out the areas where there is a gap in satisfaction and named it as SERVQUAL. Initially they have identified five different dimensions with sub-categorization that are all related to the level of satisfaction. Although there are some criticisms on the long-term stability of the results of the SERVQUAL scale (Lam and Woo, 1997) and on the general applicability of the five dimensions (Crosby and LeMay, 1998), it is widely used by academics and practitioners to measure service quality. The use of SERVQUAL is useful to find out the gap in services. The banking industry in India has grown tremendously since independence and the race has been intensified with the liberalization. This paper attempts to study one of the leading private sector banks of India. 2. LITERATURE REVIEW Sasser et al., 1978, have defined service quality as the level of service that is delivered by the operation. Anderson and Zeithaml (1984), Parasuraman, Zeithaml, and Berry (1985), have found the evidence in both the manufacturing and services industries indicating that quality is a key determinant of market share and return on investment as well as cost reduction. Grönroos (1984) has concluded that Service quality is concerned with the ability of a company to meet or exceed customer expectations. Two components of quality are relevant to serviceproviding organizations: technical quality and functional quality. Payne (1993) has defined technical and functional qualities. The technical quality refers to the outcome dimension of the service operation process whereas functional quality refers to the process dimension in terms of the interactions between the customer and the service provider. Donabedian (1980, 1982); Kovner and Smits (978) have identified that importance of functional quality for services as technical qualities are not easily assessable to the customer so, functional quality is usually the primary determinants of customers' quality perceptions. Bolton and Drew 1988, Zeithaml 1988,

concluded that there is growing evidence to suggest that perceived quality is the single most important variable influencing consumers' value perceptions. These value perceptions, in turn, affect consumers' intentions to purchase products and services. Zeithaml et. al, 1990, suggested that the satisfaction or dissatisfaction depends on the balance between customers' expectations and customers' experiences (perception) with the products and services. Pirsing concluded the issue of quality is very fundamental to business. The quality and satisfaction is directly related to each other. “Although we cannot define quality, we know what quality is.” David Garvin, has identified five perspectives of quality viz. Transcendent view (judgmental perspective of quality), Product- Based (based on objectivity), User-based (perception based and determined by customers desires), Manufacturing Perspective (Conformance to specification), and Value-Based (quality is judged in relation to the price or satisfaction made by the customer). Unlike goods quality, which can be measured with some objectivity, service quality is a nebulous concept. The unique features of services such as inseparability of production and consumption, intangibility, and heterogeneity make measurement of quality a very complex issue. In the absence of objective


Ravi Dutt, Gopal Singh Latwal & K K Sharma measures, firms must rely on consumers' perception of service quality to identify their strengths and weakness and design appropriate strategies. Lewis and Booms, 1983 have highlighted that the organization measure the quality in terms of the service delivered with respect to their expectations. It is a measure of how well the service level delivered matches the customer's expectations. Voss, 1985, has proposed measures used to measure service quality. The hard measures are quantifiable but soft measures are qualitative, based on perception details. The soft measures are relevant for intangible aspects of the service. 3. SERVICE QUALITY Service quality is the single most researched area. According to Fisk et al. (1993) early research in service quality disclosed its subjective nature, but it was not until several years later that the concept of service quality as the result of differences between actual and expected levels of service began to emerge. The interest in service quality has its roots in the area of quality; more specifically total quality management dominating in the last decade. In today's increasingly competitive environment, quality service is critical to corporate success. In the past the focus was mainly on meeting internal quality or technical standards. The focus today has shifted to qualifying customer assessments of services, and translating these measures into specific internal standards (Brown, Hitchcock and Willard, 1994). Delivering high quality service is closely linked to profits, cost saving and market share. Improved service quality cuts cost because companies have fewer customers to replace, less corrective work to do, fewer inquiries and complaints to handle and less employee turnover and dissatisfaction with which to deal. Customers judge service quality relative to what they want. They view a company's service quality by comparing their perceptions of service

experiences with their expectations of what the service performance should be. A service quality gap results when service perceptions fall short of expectations. Zeithaml, Parasuraman and Berry (1985) have developed what is called "A Service Quality Model". Customer Needs and CUSTOMER VIEW Dimensions of Service Quality, e.g. Expected ♦ Usefulness ♦ Reliability ♦ Understanding ♦ Responsiveness

GAP = Quality

Perceived

Figure: 1. Service Quality Model 3.1 Service Quality in Banking The term bank is generally understood as an institution that holds a banking license granted by financial supervision authorities. Under the authorities, the bank conducts the most fundamental banking services like accepting deposits and making loans, and other financial services (Wikipedia). According to Cowling and Newman (1995), service quality has been widely used to evaluate the performance of banking services. Nowadays, the incredible development of the Internet has changed the way that banks conduct business with their customers. As a result, many banks come with innovation in the service to enhance the satisfaction 3.2 Service Quality Dimensions The term of service quality is a complex, multidimensional concept In addition to the technical and functional dimensions; service quality is further composed of various unique dimensions which cover both the process of producing the service as well as the outcome. In recent years research has been undertaken in an effort to understand the factors which influence service quality. The most important contributors to the research within the field of service quality are Zeithaml, Berry and Parasuraman. In their exploratory


Ravi Dutt, Gopal Singh Latwal & K K Sharma research which dates back to 1995 they revealed that the criteria used by customers in assessing service quality fit in ten, potentially overlapping dimensions. The authors (Parasuraman, Zeithaml, & Berry, 1988) extended their research in 1988 and reduced the list to five attributes to form the basic structure of the well-know SERVQUAL, which is considered to be a useful tool to determining service quality.

services literature" Brown and Bond (1995). The basic Gap model has five gaps; later on it was extended up to seven major gaps in service quality concepts. Word of Month

Past Experience

Personal Needs Expected Service

Gap 5 Perceived Service

Consumer Marketer Service Delivery

Service Firm

Gap 1 Initial Dimensions: Tangibles Reliability Responsiveness Competence Courtesy Credibility Security Access Communication Understanding the customers

Gap 4

Gap 3

External Communication to Consumers

Translation of Perceptions

Service

into Service Quality

Consolidated Dimensions:

Gap 2

Tangibles Reliability

Customer Expectations

Service Perception

Management Perception of Consumer Expectations

Assurance Empathy

Service Quality: Discrepancy between customer expectations and perceptions

Figure: 2. Conceptual Model of Service Quality

4. SERVQUAL' SCALE AND GAP MODEL The SERVQUAL approach of measurement of service quality was introduced by Parasuraman et.al. in 1985. It was developed based on a marketing perspective with the support of the Marketing Science Institute. It is widely used as an instrument for measuring service quality that would apply across the board for services with minor modification in the scales. They concluded that service quality as perceived by customers depends on the gap between their expectations and the level of services that they were received. This instrument is a very versatile and valuable tool for measuring quality and identifying problem areas. It is capable of capturing service gaps at varying levels of details. Gap analysis can reveal the firm's strength and weaknesses. (Verma) The gap model is one of the best received and most heuristically valuable contributions to the

Figure 3: Gap Model

Gap 1: consumer expectation - management perception gap: Management may have inaccurate perceptions of what consumers actually expect. It requires the appropriate management processes, market analysis tools and attitude. Gap 2: service quality specification gap: There may be an inability on the part of the management to translate customer expectations into service quality specifications. This gap relates to aspects of service design. Gap 3: service delivery gap: Guidelines for service delivery do not guarantee high-quality service delivery or performance. Reasons for this include lack of sufficient support for the frontline staff, process problems, or frontline/contact staff performance variability Gap 4: external communication gap: Consumer expectations are fashioned by the external communications of an organization Gap 5: expected service - perceived service gap: Perceived quality of service depends on the size and direction of Gap5, which in turn depends on the nature of the gaps associated with marketing, design and delivery of services (ibid). Cronin and Taylor (1992) have intensely criticized SERVQUAL scale based on the fact


Ravi Dutt, Gopal Singh Latwal & K K Sharma

that gap theory is supported by little empirical and theoretical evidence. They have proposed a “performance-based” service quality measurement scale called SERVPERF. They advocated that their un-weighted performancebased SERVPERF scale was a better method of measuring service quality than SERVQUAL. This was supported by number of authors (Babakus and Boiler 1992; Babakus and Mangold 1989; Oliver 1993) Though SERVQAUL is criticized, but it has wide implication on various areas such as banks, hospital, travel and tour, public transportation, Car service, Business school, hotels, local government, airline, retailing, etc. 5. OBJECTIVE It is general assumption that private sector banks provide superior quality thus, this paper attempts to examine the main features of service quality, GAP model, analyze bank's performance with respect to various service dimensions, how retail customer rates their service quality and to identify the areas where improvement is sought with the help of SERVQUAL analysis in NCR. SERVQAUL model was quite useful in the banking industry (Yavas, Bilgin, Shemuel, 1977). So, SERVQUAL is used to calculate the gap in services provided by a bank.To understand how much service quality dimensions of bank is influenced by certain personal variables. 6. ADMINISTRATION OF QUESTIONNAIRE The study is carried out by using the original SERVQUAL questionnaire (22 questions each for expectation and perception for five dimensions of service quality) developed by Parasuram et. al. The demographic aspects have been analyzed. The responses have been captured in 7- point Likert Scale and gap score is calculated by subtracting expectations from perceptions (E-P).

7. DATA COLLECTION The methodology adopted is a convenient judgmental sampling with the sample size of 100 retail customers. The data is collected through structured schedule and questionnaire, the sources are ATMs and bank customers from various areas of west Delhi and Gurgaon. 8. ANALYSIS AND FINDING The collected data is analyzed for the gap score. The gap score is the difference between the expectations (E) and perceptions (P), which is then averaged. Descriptive statistics are used for data analysis. SPSS 17.0 and MS-Excel software are used for the statistical calculation and interpretation. The methodology is presented below stepwise. Step 1: Calculation of Un-weighted Score: The gap score is calculated and averaged on the basis of response of respondents. Un-weighted score give the vague idea of gap score based on the questionnaire. Gap scores for five different categories as given below: Strongly Disagree 1 2 3 Expectations Tangibles E1: Excellent banking companies will have modern looking equipment

E 5.6

4 5 Perception Tangibles P1: XYZ bank has modern looking equipment

Strongly Agree 6 7 P 5.4

E-P

0.2 E2: The physical facilities at excellent banks will be visually appealing

5.7

P2: XYZ bank’s physical facilities are visually appealing

5.3

E3: Employees at excellent bank will be well groomed

5.9

P3:XYZ bank’s employees are well groomed

5.5

E4: Material associated with the service (such as pamphlets or statements) will be visually appealing

5.8

P4: Material associated with the services (Such as pamphlets or statements)are visually ap pealing at XYZ bank.

5.1

Total Average Gap Score (total E -P /4)

23.0

Reliability E5:When excellent banks promise to do some thing by a certain time, they do

E 5.6

Reliability P5: When XYZ bank promises to do somet hing by a certain time, it does so.

P 5.2

E6: When a customer has a problems, excellent banks will show a sincere interest in solving it.

5.9

P6: When you have a problem, XYZ bank shows a sincere interest in solving it

4.9

E7: Excellent banks will perform the service right the first time.

5.8

P7: XYZ bank performs the service right the first time

5.1

E8: Excellent banks will provide the service at the time they promise to do so.

5.7

P8: XYZ bank provides its 5.1 service at the time it promises to do so.

E9: Excellent banks will insist on error free records

5.7

P9: XYZ bank insists on error free records

0.4

0.4

21.3

0.7 1.7 0.43

E-P

0.4

1.0

0.7

0.6 5.4 0.3


An Evaluative Analysis of Service Quality Gap Using SERVQUAL: A Case of Private Bank in NCR Total 28.7 Average Gap Score (total E -P /5) Responsiveness E E10: Employees of excellent banks will 5.6 tell customers exactly when services will be performed

25.7 Responsiveness P10: Employees in XYZ bank tell you exactly when service will be performed

P 4.9

E11: Employees of excellent banks will 5.7 give prompt service to customers

P11: Employees in XYZ bank give you prompt service

5.3

E12: Employees of excellent banks will 5.7 always be willing to help customers

P12: Employees in XYZ bank are always willing to help you.

5.3

0.3 3.0 0.60

0.7

0.4

0.4 E13: Employees of excellent banks will 5.2 never be too busy to respond to customers’ requests

P13: Employees in XYZ bank are never too busy to respond to your queries

4.8

Total Average Gap Score (total E -P /4) Assurance E14: The behavior of employees in excellent banks will instill confidence in customers

22.2

20.3

E 5.6

Assurance P14: The behavior of employees in XYZ bank instills confidence in you

P 5.1

E15: Customers of excellent bank will feel safe in transactions

5.8

P15: You feel safe i n your transactions with XYZ bank.

5.6

E16: Employees of excellent banks will be consistently courteous with customers

5.6

P16: Employees in XYZ banks are consistently courteous with you.

5.2

P17: Employees in XYZ bank have the knowledge to answer your questions.

5.1

0.4 1.9 0.48 E-P

0.5

0.2

0.4 E17: Employees of excellent banks will 6.0 have the knowledge to answer customers’ questions. Total 23.0 Average Gap Score (total E -P /4) Empathy E E18: Excellent banks will g ive 5.7 customers individual attentions

21.0 Empathy P18: XYZ bank gives you individual attentions

E19: Excellent banks will have operating hours convenient to all their customers.

5.1

P19: XYZ bank has operating 4.6 hours convenient to all its customers

E20:Excellent banks will have employees who give customers personal attentions

5.1

P20: XYZ bank has employees who give your personal attention.

P 4.8

0.9 2.0 0.50 E-P

Step 3: Calculation of Weighted Score: Weighted score is then calculated by simply multiplying the Un-weighted Score (Step 1) by Weight (step 2). The outcome is stated below: Un-weighted Score (Step 2) 0.43 Tangible 0.60 Reliability Responsiveness 0.48 0.50 Assurance 0.64 Empathy Total Weighted Sore Dimensions

X X X X X X

Weight (Step 3) 0.23 0.21 0.20 0.19 0.17

= = = = = =

Weighted Score 0.099 0.126 0.096 0.095 0.109 0.525

Step 4: Analyze and Take Necessary Actions: The final step is to find out the weak areas of the service quality dimension, where organization should pay more attention. The gap score indicates the extent of gap in service quality. Satisfaction is inversely proportional to the gap score. The larger the gap score is, the more is the dissatisfaction. Overall picture of the analysis can be presented in a single table as shown below:

0.9

0.5

0.6 E21: Excellent banks will have their customer’s best interest at heart.

5.2

E22: The employees of excellent banks will understand the specific needs of their customers.

5.6

P21: XYZ bank has your best interest at heart.

4.7

P22: The employees of XYZ understand your specific needs.

4.9

0.5

Total Average Gap Score {Total E -P )/ 5}

26.7

Un-Weighted Scores Categories Average score for Tangibles 1. Average score for Reliability 2. Average score for Responsiveness 3. Average score for Assurance 4. Average score for Empathy 5. Total Average (Total /5) Un -weighted Score

23.5

0.7 3.2 0.64

Gap 0.43 0.60 0.48 0.50 0.64 2.65 0.53

Step 2: Assigning Weights: The un-weighted score does not consider the importance of the dimension as it is the generalization of the questionnaire. In order to know the relative importance, customers are asked to assign weights under constant sum scale. The points against each of the dimensions are totaled and averaged to normalize it. The points assigned by the respondents are as: 1. 2. 3. 4. 5. Total

Dimensions

Expectations

Perceptions

(E)

(P)

Total Gap Score (E-P)

Tangible

23.0

21.3

1.7

0.43

0.23

0.099

Reliability

28.7

25.7

3.0

0.60

0.21

0.126

Responsiveness

22.2

20.3

1.9

0.48

0.20

0.096

Assurance

23.0

21.0

2.0

0.50

0.19

0.095

Empathy Total

26.7

23.5

3.2

0.64

0.17

0.109 0.525

4.5

Dimensions The appearance of the banks physical facil ities, equipment, personnel, and communication material (Tangibles) The banks ability to perform the promised service dependably and accurately (Reliability) The bank’s willingness to help customers and provide prompt service (Responsiveness) The knowledge and courtesy of the bank’s employees and their ability to convey trust and confidence (Assurance) The caring, individual attention the bank provides to its customers (Empathy)

Points 23 21 20 19 17 100

Averag e Gap Score

Weightings

Weighted Score

(W)

The dimension Empathy has the highest average gap score (un-weighted) 0.64. But after the adjustment with weights, the score becomes 0.109 that is no higher. Thus, the weight has a lot of implication. Individually, the customers are very much dissatisfied in this category. The Reliability has the second highest gap score (unweighted) 0.60 and 0.126 (weighted). It means that the performance of the bank in these categories is not very good and it should give sufficient attention to all of the subcategories under the dimension. The bank is paying good attention toward Tangibility, Assurance, and Responsiveness. The weight assigned by the male and females reveals the facts that the customer considers the following quality dimensions more important out of the five.


Ravi Dutt, Gopal Singh Latwal & K K Sharma

The respondents are asked to Rank the three service dimension out of five based on importance. Reliability, responsiveness and tangibility appear the three most important service quality dimensions.

dimension. Thus, the present study report is conforming earlier finding by (Shil and Das, 2006) in Bangladesh. Padhy and Swar 2)

The study shown that the reliability has the more gaps after Empathy un-weighted gap scores 0.60, while the weighted gap has substantially reduced to 0.126. It means the weight has implication and the bank has improved on empathy but, the empathy is not very important dimensions for the respondents. The respondents of HDFC bank are more dissatisfied with the reliability aspect of the bank. Thus, the bank should give more attention to all the subcategories under the dimension of reliability.

3)

The respondents ranked Reliability, responsiveness and the tangibility the three most important quality dimensions.

4)

Assurance and empathy was found to be less important quality dimensions.

5)

There is no significant difference between the personal factor (gender, age, occupation and income) and preferences of service quality dimensions.

Chi square test is used for the testing of significance level of the formulated hypothesis of the service quality dimensions with respect to the personal variables. The interpretation was done at 5 % level of significance. While calculating chi-square some cells have expected frequency less than 5 so, the personal factors variables are regrouped as under. The personal factors include sex, age group (below 25 yrs and above 25yrs), occupation (Working and non-working) and the income group (below 3 lacs and above 3 lacs) Ho: There is no significant difference between the Customer profile or characteristics (Age, Gender, occupation and income group) and the preferences of service quality dimensions. H1: There is significant difference between the Customer profile or characteristics (Age, Gender, occupation and income group) and the preferences of service quality dimensions. Customer profile or characteristics and Preference of Service Quality Dimensions Chi-square Value Gender Age Occupation Income Group

5.72 0.96 0.38 3.62

Chi-Square Table value 5.99 5.99 5.99 5.99

Significant/ Not-significant Not Significant Not Significant Not Significant Not Significant

Since, the calculated chi-square value is less than the table value, so, we accept the null hypothesis that there is no significant difference between the personal factor and preferences of service quality dimensions. 9. FINDINGS 1)

The Empathy has the highest gap score in the case of un-weighted (0.64) and weighted (0 .109). But, the highest weighted score is of reliability is 0.126. It means that the performance of the bank in this category is not very good and it should give sufficient attention to all of the subcategories under the

10. CONCLUSION SERVQUAL analysis is very useful to calculate the Gap score of various service quality dimensions to measure the customer satisfaction by differentiating the expectation and the perception of the customer. Service quality is very important for retention of customer and to withstand in the competitive environment. Superior service quality is the key to the success of the service provider. On the one hand it enhances the customer loyalty and on the other hand it improves the image and profitability of the service provider. SERVQUAL analysis has wide implications; it is helpful in identifying the weak areas where immediate action is required to improve their services and to win customer loyalty.


Ravi Dutt, Gopal Singh Latwal & K K Sharma

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Brown, S.W. and Bond, E.U The internal/external framework and service quality: Towards theory in services marketing, Journal of Marketing Management, February, (1995), pp.25- 39.

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Crosby, L., LeMay, S.A., (1998). Empirical determination of shipper requirements for motor carrier services: SERVQUAL, direct questioning, and policy capturing methods, Journal of Business Logistics, Vol. 19, No.1, pp. 139-153.

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11. Sasser, w.; Olsen, R., and Wyackoff, D., (1978). Understanding Service Operations in Management of Service operations, Boston, MA: AJlyn and Bacon 12. Voss, C., (1985). Field Service Management, in Voss C., Armistead C., Johnston B. and Morris B. (Eds.), Operations Management in Service Industries and the Public Sector, John Wiley & Sons. 12. Verma, H.V, Service Marketing , Text & Cases, 3rd Ed., Pearson Education, pp. 267-303 13. Zeithmal, V.A., Parasuraman, A. and Berry, L. L., 1990. Delivering Quality Service, Balancing customer perceptions and expectations, The Free Press, New York. 14. Zeithmal, Bitner, Gremler, and Pandit, Service Marketing, Integrated Customer, Focus Across the Firm, 4th Ed., and Tata McGraw Hill. 15. Shil, N.C., and Das. B, Analysis of Gap in service quality through: SERVQUAL: A case of deposit service provided by a bank in Bangladesh, Indian Journal of Marketing, Vol- IIIIX, issue 6, june 2009, pp 3-11. 16. Mangold. W.G, Babakus. E., Adapting the Servqual scale to hospital service: An imperial investigation, Feb 1992, Health Service Research, http://findarticles.com/p/articles/mi_m41 49/is_n6_v26/ai_12072377/, accessed on 12th Jan, 2010, 10 am. 17. Wang.C, Wang. Z., The impact of internet on service quality in the Banking Sector, http://epubl.luth.se/1653 -0187/2006/07/LTU-PB-EX-0607-SE.pdf, accessed on 12 Jan 2010, 11:10 am. Islam. M. R, A Context Analysis of customer satisfaction in Services, 2005, pp-219, Blekinge Institute of Technology, accessed on http://www.bth.se/fou/cuppsats.nsf/all/9b6ee6c 68007b805cd002fe57b/4file/Master's%20 Thesis2005_bth.doc., 16 Jan 2010, 3:25 pm.


ŠJournal of Human and Work Management July, 2014, Vol. 2, No.1

Faculty of Management Studies, MRIU (ISSN2320-8384)

The Impact of Employee's Job Satisfaction on Job Attitude and Behaviour's: A Study in Academic Sector Mr. Jitendra Kumar Singh

Dr. Mini Jain

Mewar University, Chittorgarh, Rajasthan jatinsmile@gmail.com

Assistant Professor R.C.A. (PG) Girls Degree College, Mathura

ABSTRACT: Human life is surrounded by needs. A person satisfies one of his needs and immediately the next need arises. If all the needs of a person are satisfied, he will not work anymore. For this the person wants to get satisfied with the job he is doing. When an employee joins an enterprise and performs his duties, he wants to satisfy his economic, social and psychological needs. Anyone who works in an organization develops a set of attitudes about work which are usually referred to under the general term job satisfaction. Job satisfaction refers to an individual's general attitude toward his or her job. It is a collection of positive and/or negative feelings that an individual holds toward his or her job. In general, people are satisfied with their jobs. Depends on facets of satisfaction—tend to be less satisfied with pay and promotion opportunities. Satisfied employees who feel fairly treated by and are trusting of the organization are more willing to engage in behaviors that go beyond the normal expectations of their job. This paper aims to analyze the factors influencing job satisfaction of employee's in academics along with the impact of satisfied and dissatisfied employees on the workplace. Key Words: job satisfaction, attitude, behaviors

INTRODUCTION Job satisfaction is an attitude, which Porter, Steers, Mowday and Boulian (1974) state is a more "rapidly formed" and a "transitory" work attitude largely associated with specific and tangible aspects of the work environment". There are different perspectives on job satisfaction and two major classifications of job satisfaction (Naumann, 1993) are content (Herzberg, 1968; Maslow, 1987; Alderfer, 1972) and process theories (Adams, 1965; Vroom, 1964; Locke, 1976; Hackman & Oldham, 1975). Locke (1976) defines job satisfaction as a pleasurable or positive emotional state resulting from the appraisal of one's job or job experiences. Job satisfaction is one of the most popular and widely researched topics in the field of organisational psychology (Spector, 1997). Job satisfaction has been studied both as a consequence of many individual and work environment characteristics and as an antecedent to many outcomes. Employees who have higher

job satisfaction are usually less absent, less likely to leave, more productive, more likely to display organisational commitment, and more likely to be satisfied with their lives (Lease, 1998). There are a variety of factors that can influence a person's level of job satisfaction. Some of these factors include the level of pay and benefits, the perceived fairness of the promotion system within a company, the quality of the working conditions, leadership and social relationships, the job itself (the variety of tasks involved, the interest and challenge the job generates, and the clarity of the job description/requirements). The happier people are within their job, the more satisfied they are said to be. The concept of job satisfaction has gained importance ever since the human relations approach has become popular. Job satisfaction is an intangible variable. It consists of a complex number of variables, conditions, feelings and behavioral tendencies.


The Impact of Employee's Job Satisfaction on Job Attitude and Behaviour's: A Study in Academic Sector Today's work environment is undergoing a major shift; factors such as globalisation, growing economies, and improved technology are constantly presenting new challenges and creating new opportunities for people. With these changes, people's attitude towards their jobs are also changing. In this grow-or-die marketplace, the success of any organisation relies on its workforce. Satisfied and committed employees are the most significant assets of any organisation, including academics. As academic institutions are the backbone of a nation's economy, the efficient management of human resources and the maintenance of higher job satisfaction levels affect the growth and performance of an entire education system. The Indian academic sector is a fast-growing educational service sector that has seen tremendous progress following liberalisation. Review of literature The study of job satisfaction is a topic of wide interest to both people who work in organizations and people who study them. Job satisfaction has been closely related with many organizational phenomena such as motivation, performance, leadership, attitude, conflict, moral etc. Researchers have attempted to identify the various components of job satisfaction, measure the relative importance of each component of job satisfaction and examine what effects these components have on employees' productivity. Spector (1997) refers to job satisfaction in terms of how people feel about their jobs and different aspects of their jobs. Ellickson and Logsdon (2002) support this view by defining job satisfaction as the extent to which employees like their work. Schermerhorn (1993) defines job satisfaction as an affective or emotional response towards various aspects of an employee's work. C.R. Reilly (1991) defines job satisfaction as the feeling that a worker has about his job or a general attitude towards work or a job and it is influenced by the perception of one's job. J.P. Wanous and E.E. Lawler (1972) refers job satisfaction is the sum of job facet satisfaction across all facets of a job. Abraham Maslow (1954) suggested that human need from a five-

level hierarchy ranging from physiological needs, safety, belongingness and love, esteem to self-actualization. Based on Maslow's theory, job satisfaction has been approached by some researchers from the perspective of need fulfillment (Kuhlen, 1963; Worf, 1970; Conrad et al., 1985) Job satisfaction and dissatisfaction not only depends on the nature of the job, it also depend on the expectation what's the job supply to an employee (Hussami, 2008). Lower convenience costs, higher organizational and social and intrinsic reward will increase job satisfaction (Mulinge and Mullier, 1998; Willem et al., 2007). Job satisfaction is complex phenomenon with multi facets (Fisher and Locke, 1992; Xie and Johns, 2000); it is influenced by the factors like salary, working environment, autonomy, communication, and organizational commitment (Lane, Esser, Holte and Anne, 2010; Vidal, Valle and AragĂłn, 2007; Fisher and Locke, 1992; Xie and Johns, 2000). Different people interpret compensation differently. In this paper compensation, reward, recognition, and wages are terms used in different situations (Zobal, 1998). The compensation is defined by American Association is “cash and non-cash remuneration provided by the employer for services renderedâ€? (ACA, p. 9). Salary was found to be the prime factor for the motivation and job satisfaction of salaried employees of the automobile industry from the results of the survey by Kathawala, Moore and Elmuti (1990). The survey tried to assess the various job characteristics and the way the employees ranked them as motivators and satisfiers. The results showed that compensation was ranked as the number one job element for job satisfaction and increase in salary for performance was ranked as the number one job element for motivation. Compensation is very valuable tool for retention and turnover. It is also a motivator for an employee in commitment with the organization which in result enhances attraction and retention (Zobal, 1998; Moncarz et al., 2009; Chiu et al., 2002). It also works as communicator when it is given to employee against his services which shows how much an employee is valuable for its organization (Zobal, 1998).


The Impact of Employee's Job Satisfaction on Job Attitude and Behaviour's: A Study in Academic Sector The mentoring is used for developmentorientation (Scandura and Williams, 2004). When a supervisor provides mentoring, the relationship affects the protégés skill development and intentions to remain with the employer (McManus and Russell, 1997). On the other hand non-supervisory mentor may increase mentee's confidence by providing access to outside organization (Scanduraa and Williams, 2004). The immediate supervisor support is very important in organizational change. Although the support of supervisor is not very crucial in satisfaction but it has positive impact on satisfaction (Griffin, Patterson and West, 2001). According to Chakrabarty, Oubre, and Brown (2008) “perhaps the finest way in which supervisors can portray himself as a role model is to personally demonstrate proper techniques so that employee could understand how job should be done.” J.D. Politis (2001) has examined the roles played by leadership in the process of knowledge acquisition and a survey was carried out on 227 persons who have been engaged in knowledge acquisition activities to examine the relationship between leadership styles and knowledge acquisition attributes. The results showed that the leadership styles that involve human interaction and encourage participative decision-making are related positively to the skills essential knowledge acquisition. According to the study conducted by Friedlander and Margulies (1969), it was discovered that management & friendly staff relationships contribute to the level of job satisfaction. However, this result contradicts with view of Herzberg (1966) who supported the view that supervision is irrelevant to the level of job satisfaction. According to Frame (2004) work conditions are defined as an employee's work place, work instruments, the work itself, organization policy, and organizational rules. Arnold and Feldman (1996), promoted factors such as temperature, lighting, ventilation, hygiene, noise, working hours, and resources as part of working conditions. The worker would rather desire working conditions that will result in greater

physical comfort and convenience. The absence of such working conditions, amongst other things, can impact poorly on the worker's mental and physical well-being (Baron and Greenberg, 2003). Robbins (2001) advocates that working conditions will influence job satisfaction, as employees are concerned with a comfortable physical work environment. In turn this will render a more positive level of job satisfaction. Arnold and Feldman (1996) shows that factors such as temperature, lighting, ventilation, hygiene, noise, working hours, and resources are all part of working conditions. Employees may feel that poor working conditions will only provoke negative performance, since their jobs are mentally and physically demanding. Objectives of the Study The objective of the study is as follows: l To identify whether the job satisfaction lead to positive attitudes & responsible behaviors. l To identify the factors which influence the job satisfaction of employees. l To identify the impact of employees' job satisfaction on their attitude. l To identify the factors which improve the satisfaction level of employees. WHY EMPLOYEE SATISFACTION IS IMPORTANT? 1. Importance of Employee Satisfaction for the Organization: l Enhance employee retention. l Increase productivity. l Increase customer satisfaction l Reduce turnover, recruiting, and training costs. l Reduced wastages and breakages l Reduced accidents l Reduce Absenteeism l Enhance customer satisfaction and loyalty. l More energetic employees. l Improve teamwork. l Higher quality products and/or services due to more competent, energized employees. l Improves a corporate image


Jitendra Kumar Singh & Mini Jain 2. Importance of Employee Satisfaction for the Employee l Employ will believe that the organization will be satisfying in the long run l They will care about the quality of their work. l They will create and deliver superior value to the customer. l They are more committed to the organization. l Their work is more productive. FACTORS INFLUENCING EMPLOYEE JOB SATISFACTION 1. Policies of Compensation and Benefit: This is the most important variable for employee satisfaction. Compensation can be described as the amount of reward that a worker expects from the job. Employees should be satisfied with competitive salary packages and they should be satisfied with it when comparing their pay packets with those of the outsiders who are working in the same industry. A feeling of satisfaction is felt by attaining fair and equitable rewards. Following these points come under this category: l Salaries or wages l Bonus l Incentives such as medical allowance, educational allowance, HRA etc. 2. Job Security: Job security is an employee's assurance or confidence that they will keep their current job. Employees with a high level of job security have a low probability of losing their job in the near future. Certain professions or employment opportunities inherently have better job security than others; job security is also affected by a worker's performance, success of the business and the current economic environment. Following these points come under this category: l Facility of transfer l Accessible / reasonable target

l Leaves

3. Working conditions: Employees are highly motivated with good working conditions as they provide a feeling of safety, comfort and motivation. On contrary, poor working condition brings out a fear of bad health in employees. The more comfortable the working environment is more productive will be the employees. Following these points come under this category: l Feeling safe and comfort in working environment. l Tools and equipment. l Working methods l Security guards and parking facility. l Well ventilated with good light fans and air- conditioning. l Neat and clean office place, rest area and washrooms. 4. Relationship with Superior authority: A good working relationship with your supervisor is essential since, at every stage, you need his or her professional input, constructive criticism, and general understanding. Fallowing these points come under this category: l Relationship with immediate supervisor. l Communication between employees and senior management. l Treatment to employee. 5. Promotion and Career Development: Promotion can be reciprocated as a significant achievement in the life. It promises and delivers more pay, responsibility, authority, independence and status. So, the opportunity for promotion determines the degree of satisfaction to the employee. Fallowing these points come under this category: l Opportunity for promotion. l Equal opportunity to grow despite being male or female l Training program. l Opportunity for use skills and abilities. 6. Leadership Styles: The satisfaction level on the job can be determined by the leadership style.


The Impact of Employee's Job Satisfaction on Job Attitude and Behaviour's: A Study in Academic Sector Employee satisfaction is greatly enhanced by democratic style of leadership. It is because democratic leaders promote friendship, respect and warmth relationship among the employees. On contrary, employees working under authoritarian and dictatorial leaders express low level of employee satisfaction. Following these points come under this category: l Prefer democratic style of leadership l Friendship, respect and warmth relationship. 7. Work Group: There is a natural desire of human beings to interact with others and so existence of group in organization is a common observable fact. This characteristics result in formation of work group at the work place. Isolated workers dislike their job. The work groups make use of a remarkable influence on the satisfaction of employees. Following these points come under this category: l Relationship with the group members. l Group dynamics l Group cohesiveness l Need for affiliation. 8. Personal Variables: The personal determinants also help a lot in maintaining the motivation and personal factors of the employees to work effectively and efficiently. Employee satisfaction can be related to psychological factors and so numbers of personal variables determine the employee satisfaction of the employees. There are 5 variables comes in this category – Personality, Expectation, Age, Education, and Gender Differences. 9. Other Factors: There are some other important variables which affect the level of employee satisfaction in organization. Following these points come under this category: l Group outgoing (feel like a part of family). l Encouragement and feedback. l Use of internet and other technology for doing job.

IMPACT OF JOB SATISFACTION ON EMPLOYEE PERFORMANCE ? Satisfaction and Productivity: “Happy workers are productive workers” – Myth. While research said “Productive workers are likely to be happy”. Satisfied workers are more productive and more productive workers are more satisfied. Worker productivity is higher in organizations with more satisfied workers. ? Satisfaction and Absenteeism: Satisfied employees have fewer avoidable absences, while it certainly makes sense that dissatisfied employees are more likely to miss work. ? Satisfaction and Turnover: Satisfied employees are less likely to quit. Organizations take actions to retain high performers and to weed out lower performers. ? Satisfaction and Workplace Deviance: Satisfied employees are less likely to create a deviant behavior at the workplace, while dissatisfied employees creates an anti-social kind of behavior at the workplace including unionization attempts, substance abuse, stealing at work, undue socializing and tardiness. ? Satisfaction and Organization Citizenship Behaviour (OCBs): Satisfied employees who feel fairly treated by and are trusting of the organization are more willing to engage in behaviors that go beyond the normal expectations of their job. ? Satisfaction and Customer Satisfaction: Satisfied workers provide better customer service. Satisfied employees increase customer satisfaction because they are more friendly, upbeat, and responsive; they are less likely to turnover, which helps build long -term customer relationships; and they are experienced. Dissatisfied customers increase employee job dissatisfaction. ? Job Involvement: Identifying with the job, actively participating in it, and considering performance important to self-worth.


The Impact of Employee's Job Satisfaction on Job Attitude and Behaviour's: A Study in Academic Sector Organizational Commitment:Identifying ? with a particular organization and its goals, and wishing to maintain membership in the organization. ? Employee Engagement: An individual's involvement with, satisfaction with, and enthusiasm for the organization. HOW TO IMPROVE EMPLOYEE SATISFACTION? Employee attitudes typically reflect the moral of the company. In areas of customer service and sales, happy employees are extremely important because they represent the company to the public. 1. Clear, Concise and Consistent Communication: In many organizations, employee doesn't know what is mission, vision, objects. Building a corporate culture that requires employees to be an integral part of the organization can be an effective way of getting the most from the talents or competencies brought to the organization by each employee. We should keep employees informed on the company's position, progress made, issues/challenges, and how they directly contribute to the success of the business. 2. Getting to Know Your Employees and Create a Team: It can be done by the hiring right employee for right job and clearly defined and communicated employee expectations. Every organization should spend time to instill trust and accountability, lying out clear expectation and securing their commitment to the business and build a culture around working together to meet challenges, create new advantage, and propel the business to greater success. 3. Training and Other Improvement Programs: Provide necessary education, training and coaching that increases employees skills and shows the employee that you are interested in their success and readiness for new responsibility. 4. Empower Employees Across the Company: Step up appropriate levels of new responsibility

across the company. Push appropriate decision making and allow people closes to the issue to make the call. Make sure your employee knows that you trust them to do their job to the best of their ability. 5. Work Itself: We can increase employee satisfaction by making job rotation, job enlargement like knowledge enlargement and task enlargement as well as job enrichment. Target should be accessible for employee. 6. Fair Compensation and Benefits: Policies of compensation and benefits are most important part of organization. But you should build your policies at “suitability” not “the best”. 7. Opportunity for Promotion and Career Development: Develop programs to promote all titles in the organization and build programs for career development of each title. Organization should give opportunity to every employee for using their abilities, skills and creativeness. 8. Monitor Performance and Reward for Contribution: People naturally keep score. Use this to as advantage by monitoring positive contribution and behavior, rewarding as appropriate. Motivate others to reach new performance levels by knowing how they measure up to expectation. We should build the proper evaluation and fair and encourage employees perform work. 9. Provide Regular, Honest Feedback: Don't wait for a crisis situation to give feedback. Instead, give regular constructive input into the employee's performance across a wide variety of issues, build loyalty, challenge to new levels of performance and keep it real. 10. Provide Best Equipment and Safe Working Condition: Invest in employees by making sure their tools and equipments don't keep them from being successful. Give them the very best tools to deliver the very best performance to the company, customers and the marketplace. Companies should build occupational health and safety program.


Jitendra Kumar Singh & Mini Jain Conclusion On the basis of above points we can say that employee attitudes typically reflect the moral of the company. In areas of customer service and sales, happy employees are extremely important because they represent the company to the public. So, every organization should develop strategies that strengthen the work environment and increase the employee morale and employee satisfaction to enhance employee performance and productivity, which ultimately results in high profits, customer satisfaction as well as customer retention. Job satisfaction represents one of the most complex areas facing today's managers when it comes to managing their employees. Although thousands of papers and research have been conducted on job satisfaction all over the world, in the Republic of Macedonia this is one of the least studied research fields. Many studies have demonstrated an unusually large impact on the job satisfaction on the motivation of workers, while the level of motivation has an impact on productivity, and hence also on performance of business organizations. There is a considerable impact of the employees perceptions for the nature of his work and the level of overall job satisfaction. Financial compensation has a great impact on the overall job satisfaction of employees. Employee job satisfaction can improve service quality and increase employee satisfaction. In this circumstance, policy makers and managers have turned their attention to provide different kinds of facilities to their employees in order to satisfy their employees. A good work environment and good work conditions can increase employee job satisfaction and the employees will try to give their best which can increase the employee work performance. References A.H. Maslow (1954) Motivation and Personality. New York: Harper & Row.

AL-Hussami M (2008). A Study of nurses' job satisfaction: The relationship to organizational commitment, perceived organizational support, transactional leadership, transformational leadership, and level of education. Eur. J. Sci. Res., 22(2): 286-295. Arnolds, C.A., & Boshoff, C. (2001). The challenge of motivating top management: A need satisfaction perspective [Electronic version]. Journal of Industrial Psychology, 27(1), 39-42. Bhatti, K., & Qureshi, T. (2007). Impact of employee participation on job satisfaction, employee commitment and employee productivity. International Review of Business Research Papers, 3(2), 54 – 68. C.R.Reilly(1991) Organizational Behavior. Annual Review of Psychology, pp. 427- 458 Chakrabarty S, Oubre DT, Brown G (2008). The impact of supervisory adaptive selling and supervisory feedback on salesperson performance. Ind. Mark. Manage., 37: 447-454. Chiu KR, Luk VW, Tang TL (2002). Retaining and motivating employees, Compensation preferences in Hong Kong and China. Personnel Rev., 31(4): 402-431. E. A Locke (1980) The Nature and Causes of Job Satisfaction. M.D Dunnette (Ed.), Handbook of Industrial and Organizational Psychology, Chicago, Rand McNally. pp.1297-1349 Ellickson. M.C., & Logsdon, K. (2002). Determinants of job satisfaction of municipal government employees [Electronic version]. Public Personnel Management, 31(3), 343-358. F. Friedlander, and N. Margulies (1969) Multiple Impacts of Organization Climate and Individual Values System upon Job Satisfaction, Personnel Psychology. 22, pp. 177-183. F. Herzberg (1966) Work and the Nature of Man. Staple Press. London. Greenberg, J., & Baron, R. A. (1993). Behavior in organizations (4th ed.). Needham Heights, MA: Allyn and Bacon. Greenberg, J., & Baron, R. A. (1995). Behavior in organizations (5th ed.). Needham Heights, MA: Allyn and Bacon.


The Impact of Employee's Job Satisfaction on Job Attitude and Behaviour's: A Study in Academic Sector Griffin MA, Patterson MG, West MA (2001). Job satisfaction and team work: the role of supervisor support. J. Organ. Behav., 22: 537-550. Herzberg F, Mausner B, Snyderman BB (1959). The motivation to work. New York Wiley. pp. 157. J.D. Politis (2001) The relationship of various Leadership Styles to Knowledge Management. Leadership and Organization Development Journal, 22(8), p.354-64. J.P. Wanous and E.E. Lawler (1972) Measurement and Meaning of Job Satisfaction. Journal of Applied Psychology, pp95-105 Lane KA, Esser J, Holte B, McCusker MA (2010). A study of nurse faculty job satisfaction in community colleges in Florida. Teach. Learn. Nurs., 5: 16-26. Lease, S. H. (1998). Annual review, 1993–1997: Work attitudes and outcomes. Journal of Vocational Behaviour, 53(2), 154–183. Locke, E. (1976). The nature and causes of job satisfaction. In M. D. Dunnette (Ed.). Handbook of industrial and organizational psychology (1297–1349). Chicago: Rand McNally.

Mulinge M, Muller CW (1998). Employee Job Satisfaction in Developing Countries: The Case of Kenya. World Dev., 26(12): 2181 -2199 Scanduraa TA, Williams EA (2004). Mentoring and transformational leadership: The role of supervisory career mentoring. J. Vocat. Behav., 65: 448-468. Spector, P.E. (1997). Job Satisfaction: Application, Assessment, Causes, and Consequences. Thousand Oaks, CA: Sage. Spector, P.E. (2000). Industrial & organizational psychology (2nd ed.). New York: John Wiley & Sons. Vidal MES, Valle RS, Aragón BMI (2007). Antecedents of repatriates' job satisfaction and its influence on turnover intentions: Evidence from Spanish repatriated managers. J. Bus. Res., 60: 1272-1281. Y. Kathawala, M. Kevin and E. Dean (1990) Preference between Salary or Job Security Increase. International Journal of Manpower. 11 (7). Zobal C (1998). The ideal team compensation system – an overview: Part I. Team Perform. Manage., 4(5): 235-249.


©Journal of Human and Work Management July, 2014, Vol. 2, No.1

Faculty of Management Studies, MRIU (ISSN2320-8384)

Educational Management and Consumer participation at Secondary Education Level in an Educationally Backward District of Jammu & Kashmir Ms. Amira Wali National University of Educational Planning and Administration NUEPA, New Delhi-16

ABSTRACT: In India, following the Right to Education Act of 2009, a considerable increase in gross enrolments at Elementary levels of education, has led to an impetus in the demand for Secondary Education. In this direction, A time-bound target specific scheme called Rashtriya Madhmik Shiksha Abhiyan (RMSA) has been launched in the Eleventh Five Year Plan in order to Universalise Secondary Education. This paper, based on empirical findings and secondary data analysis, relates to Secondary Education Management, in an Educationally Backward District of Jammu & Kashmir. The paper is divided into three parts. The first and second parts deal with consumer participation and consumer facilities at Secondary Education level in the state. The last section of this paper throws light on the participation of community (who in turn are secondary consumers) in the Secondary Education schooling process, under the frame work of decentralized approach to educational management. Universalisation of Secondary Education has been made the agenda of the eleventh plan, but strategies of this policy are not being implemented in a proper way. Planning competencies at the local levels have to developed inevitably, in order to capture the essence of decentralisation. Or else, Universalisation of Post Basic Education will remain rhetoric. Keywords: secondary education, educational management, consumer participation

INTRODUCTION As we embark upon a rights based approach for making basic education available (expansion), accessible (equity), adaptable (inclusion) and acceptable (quality) to the stakeholders, there has been a progressive realization to extend these provisions to the post-basic stage. Some countries have already extended the age of free and compulsory education up to the age of 16 or 18 years, that includes secondary grades. In Germany, Secondary Education has already been universalized and Japan has made the first nine years of education compulsory (including primary and junior secondary). In India, with emerging pressure from Elementary Education, Secondary Education will gain further momentum (Khandelwal, 2002). The criticality of Secondary Education in the continuum of educational stages lies in its place between Elementary Education and Higher Education. “Any university reform will remain largely ineffective unless the level of Secondary

Education is raised”, stated the Radhakrishnan Commission on University Education, 1948. Apart from serving as an essential link between the basic and higher education stages, Secondary Education has other positive externalities of education on health, gender equality, and living conditions that are more profound in case of Secondary Education as compared to primary education as reiterated by the findings of National Family Health Survey III (2007). Insert Table 1.1 The rapid increase in Elementary Education leads to increase in demand for Secondary Education, and hence the need to increase the priority to Secondary Education (Tilak, 2008). In order to universalise Secondary Education, a time bound target specific scheme called Rashtriya Madhmik Shiksha Abhiyan (RMSA) was launched in March 2009 that envisages universalisation of Secondary Education by 2017, targetting a gross enrolment ratio of 100 percent at this level.


Educational Management and Consumer participation at Secondary Education Level in an Educationally Backward District of Jammu & Kashmir By definition of Universalisation of Elementary Education (UEE), we mean that every child of the relevant age group, i.e. 6-13 years should be in elementary school. Similarly, Universalisation of Secondary Education (USE) would mean that all the children of the relevant age group (14-15 years) should be enrolled in grades IX-X. Secondary Education enrolment is not a function of the population of 14-15 age groups, but essentially a function of Elementary Education graduates. But some students never enroll in the schools, some drop-out in elementary grades and some do not complete the elementary cycle. Hence, USE would mean to universalize access to Secondary Education for all the possible elementary graduates so that their participation would be enhanced and each eligible child would be brought into the Secondary Education system. Denying access to these students will affect their participation adversely. Rationale for the present Study Jammu & Kashmir is an Educationally Backward state. Among 35 states of the country, Jammu & Kashmir ranks 30th in terms of literacy and Coefficient of Equality in male-female literacy rate (0.74, the national average being 0.80) with only five states behind it. The state has a high Gross Enrolment Ratio (GER) of 119.10 percent and NER of 97.18 percent at Primary level and a GER of 100.69 and NER of 75.31 at Upper Primary level. The transition rate from Primary to Upper Primary was high at 94.29 percent in 2008-09.The drop-out rate is 8.38 percent at the Primary level. Surprisingly, the drop-out rate shoots up to 21.95 percent at the Upper Primary and 44.30 percent for grades I-X. This implies a difference of 22.35 percentage point increase in the drop-outs from Upper Primary to Secondary level. Within 22 districts of the state, District Baramulla stands tenth in rank in order of literacy rates and coefficient of equality for male-female literacy (0.71, 0.74 being the state average and 0.80 the national average).In terms of backwardness in education, district Rajouri has been ranked at the top followed by Kupwara, Budgam, Kargil and Baramulla, while as Jammu

is least backward followed by Kathua, Srinagar, Islamabad and Doda. District Baramulla is divided into eighteen Educational Blocks that are not co-terminus with the Community Development Blocks. Literature Review Secondary Education, in spite of being the lintel of the entire structure of a country (Mukhopadhyay, 1999) is faced with serious concerns as regard to its access, quality and funding. It has largely remained unrecognized and under provided among the various sectors and levels of education (Mukhopadhyay, 1999). Owing to the repercussions of the status on Elementary Education on the secondary level, this stage of education suffers even more since India has not achieved 100 percent primary and elementary completion rate. The inefficient status of the primary education system, comparatively low participation of girls at all levels, large number of habitations unserved from schooling provisions and very low attendance rates at secondary levels remain to be areas of major concern (Mehta, 2003). In India, the demand for Secondary Education has increased around 30 times from 1950-2008 but the number of institutions and teachers have grown only 23 and 17 times, respectively (MHRD, various years). This indicates lack of adequate access provisions. Inspite of increasing enrolments in India, the GER at junior secondary level is 62.71 percent and at higher secondary it is just 35.92 percent, with a combined (IX-XII) GER of 49.26 percent (MHRD, 2009-10) which is far lower than that of India's global competitors in East Asia (average 70 percent) and Latin America (average 82 percent) (World Bank, 2009). Whereas the drop-out rate at the primary level (I-V) is 28.86 percent, it increases to 42.39 percent at the elementary level (I-VIII) and 52.76 percent at the secondary level (I-X). The GPI at secondary level in India is 0.88 (IX-X). Even in countries like China, Bangladesh and South Africa, the GPI at secondary level is 1.0, 1.13 and 0.99 respectively. Secondary Education suffers because of the state of Elementary Education in terms of access, transition and equity. The physical infrastructure


Educational Management and Consumer participation at Secondary Education Level in an Educationally Backward District of Jammu & Kashmir in schools needs to be improved in order to make a reliable assessment of their adequacy for achieving the goal of universal access. (Govinda, Bandhopadhyay, 2008). Secondary Education has been highly underfunded. Regarding public expenditure on education, almost the same percentage relative to the GDP was allocated to primary (1.7%) and Secondary Education (1.6%) worldwide in 2009 (UIS, 2011). In India, in the first five year plan, 13 percent of the total plan expenditure on education was allocated to Secondary Education, followed by 19 percent in the second five year plan remaining around that proportion until the sixth five year plan where the funding increased to 25 percent. But it gradually declined to 10.5 percent in the ninth plan and 12 percent in the tenth plan, one of the lowest proportions ever allocated to Secondary Education during the postindependence period (Tilak, 2008). However, an upward trend has been observed in the eleventh five year plan where around 20 percent of plan outlay is for Secondary Education as against 50 percent and 30 percent for Elementary and Higher Education, respectively. The Annual Work Plan and Budget of Jammu & Kashmir 2011-12 states: “The target during the Eleventh Five Year Plan is to provide a secondary school within 5 Kms of any habitation and to provide a higher secondary school within a reasonable distance of 7Km to 10 Km in any habitation. This will be part of the vision to ensure universal Secondary Education by 2017, i.e. the end of the Twelfth Five Year Plan…” -Page 16, AWP &B, 2011-12, J&K A comparative analysis of participation of boys and girls at secondary and higher secondary stages in district Budgam of Jammu & Kashmir district revealed that the participation of girls is low owing to additional household chores apart from school work, lack of female teachers in schools, and equal opportunities of participation to girls not being provided on account of dominance of boys in schools (Ahmed, 2000). Quality of education and supervision of schools

at Primary and Secondary levels in Jammu & Kashmir is an area of concern in the government sector. A recommendation made was to give school supervisory responsibilities to the Panchayats and to encourage locally employed teachers to minimize absenteeism in schools, especially in remote areas (State Development Report Jammu & Kashmir, 2003). Objectives l To undertake the diagnostic exercise for Consumer participation and Consumer Facilities at Secondary level of Education in District Baramulla. l To enquire into the issues in Educational Management vis a vis prescribed Support structures at Secondary Level Research Design and Methodology This study is diagnostic and descriptive in nature. Students at lower secondary level (Grades IX and X) are treated as consumers of education. In order to assess the situation of consumer participation in the secondary education system, secondary data has been analyzed. As such, Part I is entirely based on Secondary data. The major sources of secondary data for have been the “Statistics of School Education”, “SEMIS” (Secondary Education Management Information System) data obtained from NUEPA (National University of Educational Planning and Administration, MHRD, New Delhi), and Census data. Secondary data has been subjected to various statistical calculations in order to arrive at important Educational Indicators like the Gross, Net Enrolment Ratios and Gender Parity Indices. Secondary data analyses includes all the schools of Jammu & Kashmir having lower secondary grades managed by Government and private/ other bodies. For Part II and III, primary data collection has been undertaken for empirical investigation of the educational facilities provided in schools and the Educational Management through support structures. Also, data provided by the State and District Secondary Education Administration has been analysed.


Educational Management and Consumer participation at Secondary Education Level in an Educationally Backward District of Jammu & Kashmir

Sampling Methodology Primary data has been collected in 13 sampled schools amounting to a sample size of 6 percent of the total population (220 Secondary Schools:157 Government, 59 Private managed and 4 managed by other bodies), with a secondary school (having IX and X grades) as a sample unit. Out of eighteen educational zones in district Baramulla, three sampling frames were developed by dividing the educational zones on the basis of their Net Access Ratios (NARs). Each sampling frame consisted of six educational zones. Within each sampling frames, the educational zone with the maximum number of secondary schools was selected. In each zone, the secondary schools were divided on the basis of their managements (Government or private). The final sample has been collected on the basis of random sampling using random numbers. Data collection in sampled schools was done by using an Interview Schedule called the “School facilities Schedule� as a data collection tool, employing structured interviewing technique. The School Facilities Schedule is a detailed schedule consisting of a checklist type of questionnaire. The School Facilities Schedule has been developed by reviewing the CABE Committee report, SEMIS DCF, RMSA framework, Plan and Proposal documents retrieved from the State and District mission RMSA. The primary data collected from schools has been transformed (wherever required), coded, quantified and analysed in terms of their Frequencies, Percentages and Cross Tabulations. Primary data has been processed and analysed using the Statistical Package for Social Scientists (SPSS). Results and Discussion Part I Consumer Participation at Secondary Education Level in District Baramulla Consumer participation at lower Secondary level has been analysed in terms of the enrolments of the student developed into important educational indicators like GER, NER and GPI.

Gross and Net Enrolments at Secondary Level of Education In order to understand the status of Participation of these children in the Secondary Schooling system, two important indicators i.e. the Gross Enrolment Ratio (GER) and Net Enrolment Ratio (NER) have been developed for the Jammu & Kashmir state and District Baramulla. Whereas the GER takes into account overage and underage students participating at the Secondary level, the NER excludes the same and is specific to ages 14 and 15 (ages corresponding to lower secondary grades). Insert Table 1.2 and Table 1.3 Methodology of calculation: The GER and NER figures have been calculated for the year 2009 using Census data from 2001 and 2011 and Secondary Education Management Information System (SEMIS) data 2009-10 from NUEPA, MHRD.

First, using Census data 2001, the percentage composition of the 14-15 years age group was calculated. The Census population in 2001 and 2011 of Jammu & Kashmir state were compared to find the Average Annual growth rate (AAGR) using the formula AAGR= 100 x (Pn/Po)1/n -1; where 'Pn' is the population of Year 2011,'Po' is the population of Year 2001, and 'n' is the number of intermediate years between 2001 and 2011. On the basis of the rate of growth calculated, the population of 2009 was projected using 2001 census population in all ages. From this population, the percentage of population aged 14-15 years in 2009 were calculated assuming the same percentage composition as of 2001. The enrolment in the 14-15 year age group in 2009-10 was obtained using SEMIS data 2009-10.


Educational Management and Consumer participation at Secondary Education Level in an Educationally Backward District of Jammu & Kashmir Insert Table 1.4

Insert Figure 1.3

It is evident that more than 50 percent children who should have been in lower secondary grades, are out of the secondary education schooling system. The situation is worse at age specific grading. In all actegoried District baramulla Lags behind Jammu & Kashmir on the whole, in terms of consumer participation at the Secondary level.

The state average for GPI has increased from 0.79 to 0.81 in the two consecutive years. Districts Ladakh and Kargil exhibit GPI of greater than 1.00 meaning gender disparity at the Secondary level with higher enrolment of girls as compared to boys. The GPI of capital District Srinagar has improved to 1.00 exhibiting perfect gender parity at Secondary level.

Insert Figure 1.1 The disparities in enrolment ratios between the two regions are quite evident except in the Rural regions where it is marginally low for District Baramulla. The disparity in enrolment ratio for males is more pronounced than that of females in Urban category for District Baramulla Insert Figure 1.2 This graph is reiterative of the earlier findings on GER. The disparity between the NER figures of Jammu & Kashmir and District Baramulla is high for Urban category and marginally lower for Baramulla in the category. On the whole, it is safe to infer that Net Enrolment Ratios are lower for District Baramulla as compared to the state average in all categories. In almost all categories, male participation is more pronounced than their female counterparts. However, it is pertinent to add here that the state averages for GER and NER are below 50 percent and 30 percent respectively, implying that participation at this level is abysmally low. Girls' Enrolment and Gender Parity in Secondary Grades Gender Parity at Secondary level of education is an issue in the state. Most of the districts in the state have less than 50 percent of girls' enrolment to total enrolment in Secondary grades. The district-wise GP Indices for the districts in Jammu & Kashmir and the Educational Zone wise GP Indices for District Baramulla have been given separately. Methodology of Calculation: The GPI was calculated by consolidating SEMIS enrolment data for 2009-10 and applying the formula: GPI = Total Enrolment of girls in IX-X Total Enrolment of boys in IX-X

District Baramulla has a GPI lower than state average, but has improved over 2008-09. The zone-wise analysis of this district will give a clear picture of the status of gender parity. Insert Figure 1.4 There are sharp inter zonal variations in the GP Indeces for the zones of District Baramulla. Zone Uri (both Rural and Urban regions) need to identify gender parity as their thrust areas and target the girl population aged 14-15 years and incorporate them in the secondary schooling system. This needs to be done on priority basis. Part II Consumer Facilities (Infrastructural and Academic) at the Secondary Level under RMSA Framework The framework of Rashtriya Madhmik Shiksha Abhiyan (RMSA) has prescribed a detailed list of necessary physical and academic infrastructure to be made available in government Secondary schools. The CABE Committee Report, 2005 recommended a sample norm for facilities in secondary schools in order to reduce the disparities in facilities offered in various school categories. A list of the infrastructure and academic facility variables has been drawn in the tables given below, developed in the light of the RMSA framework, CABE Committee Recommendations and the state norms. The government and private managed body schools have been analysed separately since RMSA applies to government schools exclusively. This has also helped in developing an understanding of the state of private un-aided schools vis-a vis the facilities offered.


Educational Management and Consumer participation at Secondary Education Level in an Educationally Backward District of Jammu & Kashmir Insert Table 1.5 and Figure 1.5 Schools without buildings make the students open to outer distractions and lad to lack of concentration in classes. The Schools with kuccha buildings are harmful and unsafe since they are prone to damage in the instance of earthquakes or even when students play or run about in them. The issue of rented buildings is also a grave concern since the owners might ask to leave their premises anytime and may not give permission to alter the building suited to the needs of the school. It was also observed that the buildings are rented out to more than one school disturbing the daily activities and curricular transactions of both schools. RMSA scheme should enable such schools to have their own buildings and strengthen these identified schools on priority basis. Given below Table 1.6 shows the lack of requisite physical infrastructure facilities in Sampled Schools of District baramulla. Insert Table 1.6 Though all schools have not constructed new buildings for Upgraded sections, it does not seem to be an issue for IX and X Grades. However, it also means that the classroom provisions for the lower grades might get affected due to nonavailability of new building. All schools having classrooms for IX and X have classroom size lesser than the state norm prescription. For the schools that have constructed new buildings, they do not have the requisite features mentioned in the RMSA framework, for example, earth quake resistance (which is important in a seismic prone zone like Jammu & Kashmir) or water harvesting systems. RMSA framework says that Boundary Walls need to be constructed by the states in schools. There are four government schools without boundary walls and three schools without their own playgrounds. It is heartening to note that there are schools without ramps for CWSN and no sanitation facilities for them. It implies that these schools are not accessible to CWSN. A proper drainage system implies a septic tank/ or out-flow of sewage into soak pits or garbage pits. However, three out of the thirteen schools were found to have an open drain system which is hazardous to health and

affects the environment adversely. As far the computer laboratories are concerned, though most of the schools had them, they were kept under lock and key in the government schools. None of the computers in laboratories of either managements had an internet connection. Insert Table 1.7 More Private schools exhibit a PTR higher than 30:1 as recommended by CABE report, 2005 and RMSA framework. Though all the schools have separate classrooms for IX and X, there is a mention of multi-grade teaching in rainy reason. This is due to the reason that lower grades do not have sufficient classrooms and they study out in the open. In the instance of rain, these students are sent to the classrooms of higher grades. It implies that where additional classrooms are not built for secondary grades, the facilities of the children from lower grades are affected. Part III Participation of the community (Secondary Consumers) through prescribed Support Structures under the frame work of decentralized approach to Educational Management RMSA Framework has recommended the establishment of Management Structures at the National Levels, State levels and School levels. The Secondary School Management Structure should essentially consist of the 1. SMDC: School Management and Development Committee. This Committee is responsible for all activities including planning, collection of data under SEMIS, implementation, monitoring, evaluation, remedial measures for improving academic and infrastructure at the school level. In doing so, the SDMC has to be assisted by two sub-committees. l School Building Committee: For carrying out and maintaining records for constructions, repairs etc under both recurring and non-recurring expenditure. l Academic Committee: For ensuring quality improvements, equity, reducing


Educational Management and Consumer participation at Secondary Education Level in an Educationally Backward District of Jammu & Kashmir

barriers-like socio-economic, gender, disability, teachers and student attendances, recommending teachers for training, guidance, counseling etc. 2) PTA: Parent Teacher Association. Through this association, timely exchanges between the parents and teachers and grievance redressal of the parents is ensured. Also, the parents are involved in the functioning of the school. Given below is the state of RMSA Support Structures in Sampled Schools. Insert Table 1.8 Almost all the government schools except one have constituted the SMDC and all of them maintain written records of SMDC proceedings. However, all the schools have not constituted the School Building Committee, Academic Committee and as many as four schools have not constituted the PTA. Insert Table 1.9 (a) The RMSA Framework has suggested a total of 18 members in the SMDC composition. The same has been agreed under the state norms (Page 36, AWP&B, 2011-12, J&K). Most of the schools have SMDC members ranging from 110. Only two schools members between 11-20. It can be inferred that most of the schools do not have 18 members in the SMDC (Page 54). The RMSA Framework lays emphasis on SMDC meetings at least once in 15 days, that means twice in a month (Page 55). The SMDC meetings in schools follow the pattern shown below. Insert Table 1.9 (b) None of the schools follow the RMSA recommendation and most of the SMDC meetings take place on a monthly or 3-monthly basis. The PTA is a must in every school as per RMSA Framework. The AWP&B, 2011-12. J&K (page 36) has prescribed ten members for the PTA. The meetings of the PTA are supposed to be held every month.

Insert Table 1.10 (a) and Table 1.10 (b) None of the PTA in schools have the requisite members for it and only a single school conducts monthly PTA meetings, as prescribed by RMSA Framework (page 55). It is understandable that when the requisite support structures are not in place, it is a serious impediment for implementation of the scheme. Conclusion Four important considerations have emerged from this paper. Firstly, participation at the Secondary Education level is very low, i.e. less than 50 percent for boys and girls. In turn, more than 50 percent students aged between 14-15 years are out of the Secondary Schooling system, both at the state and district levels. Secondly, infrastructure facilities at the secondary school level in the district are unequal and insufficient as per RMSA and CABE recommendations. Third, planning for Secondary Education in District Baramulla, is taken as a necessary exercise, but not undertaken as per the framework of RMSA and has not been able to decentralize the whole process of planning. Hence, need based planning does not take place. A major reason for this is the fourth finding, where the management structures for RMSA, both at the District level and at schools levels are either not strengthened, or do not exist at all. The framework and approach of RMSA scheme impressively capture the essence of Universalisation policy and have laid out the ground work and requirements for achieving universal Secondary Education. However, schemes are effective only when they are implemented according to the prescribed framework. This paper provides numerous pointers towards the lag in proper implementation of the RMSA scheme. In some cases the structures are not in place where as in others, the structures do not function effectively.


Educational Management and Consumer participation at Secondary Education Level in an Educationally Backward District of Jammu & Kashmir

It is important that some measures for proper implementation of the scheme should be taken so that RMSA is a success and Universalisation of Secondary Education becomes a reality. References Ahmed, M.R. (2000). Comparative analysis of participation of boys and girls at secondary and higher secondary level in Chararisharief zone of district Budgam (unpublished diploma dissertation). NIEPA, New Delhi. Government of India Planning Commission. (2008). Eleventh five year plan volume IISocial sector (2007-12). New Delhi: Oxford University Press. Govinda, R. & Bandhopadhyay, M. (2008). Access to elementary education in India: Country analytical review. UK: University of Sussex. Khandelwal, B.P. (2002). Policy issues in Secondary Education. In K. SudhaRao (Ed.), Educational policies in India (pp.143-161). New Delhi: NIEPA. Mehta, A. (2003). Universalisation of Secondary Education Can it be achieved in the Near Future? Journal of Educational Planning and Administration, 17(4), 507-528. Mehta, A. (2004). Indicators of educational development with focus on elementary education: Concept and definitions. Retrieved from http://www.educationforallinindia.com/Ne wpercent20Modules/modulepercent20onpe rcent20indicatorspercent20ofpercent20edu cationalpercent20development.pdf Ministry of Home Affairs, Census data 2001 and 2011, Retrieved from www.censusindia.gov.in/2011-prov-results/ pov_data_products_J&K.html Ministry of Human Resource Development. (2005). Report of the CABE Committee on universalisation of secondary education. Retrieved from http://www.educationforallinindia.com/univers alisation%20of%20secondary%20education%2 0report%20of%20CABE%20Commuitee.pdf

Ministry of Human Resource Development. Selected Educational Statistics time series (2005- 06). Retrieved from http://www.educationforallinindia.com/SESallindia-time-series-2005-06.pdf Ministry of Human Resource Development. (2010). Statistics of school education 200708. New Delhi: Author Ministry of Human Resource Development. (2011). Statistics of school education 20092010. New Delhi: Author Ministry of Human Resource Development. Annual report 2010-11. Retrieved from http://education.nic.in/AR/AR2010 -11/AR2010-11.pdf Ministry of Human Resource Development. Framework for implementation of RMSA. Retrieved from http://education.nic.in/secedu/Framework_ F inal_RMSA.pdf Mukhopadhyay, M. & Parhar, M. (Ed.). (1999). Indian education development since independence. New Delhi: Vikas Publishing House. The World Bank. (2010). Global Monitoring Report 2010: The MDGs after the Crisis. Washington DC: Author. Tilak, B.G. (Ed.). (2008). Financing of Secondary Education in India: Grants-in-aid policies and practices in the states. New Delhi: Shipra Publications. UNESCO. (2010). Global Education Digest 2010: Comparing Education Statistics Across the World. Canada: Author. Retrieved from http://www.uis.unesco.org/Library/Documents /GED_2010_EN.pdf UNESCO. (2011). Global Education Digest 2011: Comparing Education Statistics Across the World. Canada: Author. Retrieved from http://www.unesco.org/new/en/media-servIces/ single-vIew/news/2011_global_e ducatIon _digest_coping_with_the_demand_for_second ary_education/ Zaidi, S. (1997). Indicators of Educational development Module 6. New Delhi: NIEPA.


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Faculty of Management Studies, MRIU (ISSN2320-8384)

Power as base of Inter-State Disparities of Income Shri Prakash and Gautam Negi ABSTRACT: The paper deals with disparities of electricity use and growth of SDP of Indian states and Union Territories. The data base relates to 1997-98 and 2009-10. Secondary data have been taken from different official websites. The study uses descriptive statistics, Lorenz curve and Coefficient of Variation for evaluating the convergence/divergence of development level among the regional units. Regression Model is used for determining relation between electricity used and growth of SDP of states. The empirical findings partly run counter to the convergence hypothesis and some findings are in consonance with the hypothesis of convergence for some states.

INTRODUCTION Energy resources, especially electricity, have been treated as an important factor of modern economic growth. This holds true especially for post industrialization era. Modern means of transportation, particularly railways and new agricultural technology, are also highly energy intensive. In fact, importance of energy as the means of economic growth was emphasized by no less a person than Lenin who, in a public meeting in 1913 exclaimed, “Give me TWO E'sElectricity and Education, I will transform the backward, agrarian, and underdeveloped Soviet economy into a modern, industrialized and developed economy' (Quoted, Prakash, S., 1977). Since then electricity has not only been treated as an important instrument of growth in USSR alone, but it has also emerged as the means of raising standard of living and maintaining high life style across the globe. It is, therefore, not surprising that use of electricity has emerged as an important indicator of the stage of growth of an economy Prakash, S. and Singh, Inderjeet Singh, 1986). 1. Professor of Eminence, BIMTECH, Greater Noida, India 2. Asst Professor, Manav Rachna I University, Faridabad, India Energy has, in fact, been the pivot of all human productive activities since times immemorial. But the sources and forms of energy have been

changing over the years since the early phases of evolution of civilization and development of organization of economic activities. Economic and technological progress that humans have made has critically hinged on exploration of new sources and forms of energy resources and the generation and utilization of energy for ever increasing purposes. Energy has come to be known as a “Strategic Commodity”. Any uncertainty about its supply can threaten the functioning of the economy, particularly in developing economies which face severe power shortages in the face of ever rising demand for it (Cf. Energy Statistics, 2013). This is not surprising since energy is a universal intermediary in production activities of all sectors and segments of modern economies. Prior to the industrial revolution, human labour and effort was the main source and form of energy; so human labor time and effort constituted major energy source. But industrialization, resulting in exponential growth of output, culminated in an explosive growth of production; use of energy resources also spread form production to all walks of life. The base of production shifted from manual to mechanical processes, which required extensive use of electricity. Use of mechanical process of production resulted in great deal of economy in labour and time. This, in turn, resulted in astronomical growth of labour productivity, which became the base of incessant growth of national and per capita income across the globe (For Indian economy, See, Prakash, S. and


Shri Prakash and Gautam Negi Balakrishnan, Brinda, 2008, Sharma, Amit, 2012). As the production processes moved away from mechanical to automatic and automatic to digital processes, use of electricity increased manifold. The use of electricity and productivity of labour increased with every change in the production processes. Electricity is extensively used in Agriculture, Manufacturing, Services and Household sectors. Any shortage in supply of energy significantly affects both consumption and production, which constrains economic growth. But shortage of supply and exploration of new ways and mechanisms of electricity generation lead to rise in cost of generation and distribution resulting in increased prices of both inputs and outputs. This, in turn, affects the prices of all other commodities and accentuates inflationary pressures in the economy. A variety of factors increase the demand for electricity in India. Advent of green revolution technology in North West India resulted in the first phase of electricity shortages, which resulted in extensive power cuts in agricultural seasons. Subsequent universal electrification of villages and switch over from coal/diesel based haulage of trains and factory production led to ubiquitous power cuts across all state in India. Consequently, electricity has emerged both as a facilitator and enabler and debilitating and limiting factor of growth in India. The rapid change in Indian economy may be gauged from the fact that during the late seventies and early eighties, electricity intensity of production ranged from Re. 0.05 to 0.15 per rupee worth of output in Indian economy (See, Prakash, Shri and Singh, Inderjeet, 1986). The per capita use of electricity is an important indicator of economic health of a country and indicates its stage of social, economic and technological development. As an economy progresses from a primarily agrarian to an industrialized economy, the per capita use of energy resources in general and electricity in particular tends to rise. Brief Review of Literature There are few studies on inter-state disparities of electricity use. Sarkar (1994) studied the link between disparities in planned outlays and

development of states. He covers 15 states and 14 variables are used as indicators of developmentper capita expenditure on health, percentage of electrified villages, per capita consumption of electricity, per capita SDP etc. He found Punjab as the highest and Bihar as the lowest in rank order in the use of electricity. Prakash, S. and Rajan, P. (1977) are probably the first who studied the divergence between the planned targets and actual development of states with special reference to Madhya Pradesh (1977). Prakash, S. and Mohapatra (1980) analyzed inter and intra state inequalities of development with special reference to M.P. They used 33 socioeconomic variables for the measurement of status of development by an innovative method of factor analysis; their method was a modified form of M.G. Kendall's method of factor analysis by change in rank order as a result of inclusion or exclusion of specific attribute/variable in analysis. They included proportion of electrified villages and per capita electricity use as two of the 33 variables in the analysis. They covered a period of about one and a half decades. They concluded that heavy and basic goods industry based selectivity approach to growth had resulted in an accentuation of inter and intra region inequalities (1981). But Dholakia (1994), in his study of 20 states for the period from1960-61 to 1990-1991 found the growth of state economies to be convergent towards the Indian average. Cashin and Sahay (1996) lend support to Dholakia's findings. But several other studies also lend credence to Prakash-Mohapatra hypothesis of not only existence but accentuation of divergence of development of states. Raman (1996), Manjit and Mitra (1996) and Ghosh et al (1998) also analyzed inter-state differential of growth. Dasgupta et al (2000) in a study of 22 states from 1960-61 to 1995-96 found conclusive evidence for divergence of development among the states. However, shares of different sectors in states appear to converge towards national averages. As economic structure of India has moved away from primary to tertiary dominated, inter-sector differences are also highly marked (Prakash, S., Negi, Gautam, 2013, Sharma S., Bhatnagar, G., 2013, Sharma, Amit and Rauthan, A.J., 2013). Roy (2012) highlights the divergence between per capita SDP of 15 states during the era of liberalization. He also points out


©Journal of Human and Work Management December, 2014, Vol. 2, No.2

an increase in income disparities between rural and urban India. Above brief review of literature has revealed the fact that the findings about regional inequalities of development have been inconclusive and role of electricity in regional growth and inequalities has not received adequate attention in literature. Besides, empirical evidence for the new millennium has been scanty so far. This study is a modest attempt to fill a part of this empty corner. Main Thrust of Study The paper evaluates inequalities of inter-state utilization of electricity and its effect on growth of states' SDP. Both per capita and absolute values have been used in analysis of 32 states and UT's of India over a period of 13 years from 1997-98 to 2009-10. Sources of Data Data relate to state wise use of power both in total and per capita terms. The utilization of power is related to the growth of SDP both in absolute and per caput terms for the period covered by the study. Daman & Diu, Dadar & Nagar Haveli and Lakshadweep are not covered by the study due to unavailability of data. Findings are not likely to be affected by these omissions, as these UT's account for an average of 0.70% of the total electricity used in India. Regional Classification States have been grouped into the following five regions for inter-regional comparison: Region(No. of States/UT’s) North (9)

States and UT’s Haryana, Himachal Pradesh, Jammu & Kashmir, Punjab, Rajasthan, Uttar Pradesh, Uttarakhand, Chandigarh, Delhi West (5) Gujarat, Madhya Pradesh, Chhattisgarh, Maharashtra, Goa South (5) Andhra Pradesh, Karnataka, Kerala, Tamil Nadu, Pudicherry East (6) Bihar, Jharkhand, Orissa, West Bengal, A&N Islands, Sikkim North East (7) Assam, Manipur, Meghalaya, Nagaland, Tripura, Arunachal Pradesh, Mizoram Note- Numbers in parenthesis indicate the number of states in each region.

Data relating to SDP are taken from Economic Survey (Govt. of India). State wise energy consumption figures are taken from CSO's publications and India Statistics. Thus, all data used in this study are secondary. Methods and Models The following methods/models are used in empirical analysis: Descriptive statistics; Regression models; Coefficient of Variation; ANOVA; Intra-class Coefficient of Correlation. The study uses comparative frame work of

Faculty of Management Studies, MRIU (ISSN2320-8384)

analysis. It analyses distribution and utilization of electricity among the states and its relation with SDP and per capita SDP of states at two points of time- 1997-98 and 2009-10. The two points are separated by 13 years, which is sufficient to reflect the change in long term trend of convergence/divergence of inter-state disparities of income and electricity and inequality, if any exists. Lorenz Curve and CV are used for evaluation of convergence or divergence of growth among states. Mean differences are tested by t statistics. Median test is also used to evaluate whether the two data sets belong to the same or different populations. This will also highlight intertemporal convergence/divergence in development of the states. For capturing relation between electricity use and income, regression model is used. The following regression models are used and the models are estimated by classical OLS: SDPjt = á0 + á1ECjt +Ut ln SDjt = â0+â1lnECjt +V The subscript j refers to state and t=1, 2 stand for 1997-98 and 2009-10 respectively. SDP denotes state domestic product, EC depicts electricity utilized, U and V refer to random errors of estimates. As electricity used and SDP are measured both in absolute and per caput terms, 4 regression functions are estimated by OLS. The paper uses single equation approach of econometric modeling. Therefore, no problem of identification is involved. ANOVA (two factors without replication) is applied on the absolute and per capita values of SDP and EC for the two time periods to further test for significance of differences. The intra class coefficient of correlation (ICC) is calculated from the ANOVA table by the formula as below Where mb is mean square between classes (rows) and mw is mean square within classes (column). Results of Empirical Analysis Results of empirical analysis are presented sequentially. First, the results of descriptive statistics are examined.


Shri Prakash and Gautam Negi Disparities of States' SDP The descriptive statistics of inter-state distribution of SDP and per capita SDP among the states for 1997-98 and 2009-10 are reported in table 1. Table-1

Mean Standard Error Median Standard Deviation Sample Variance Kurtosis Skewness Range Minimum Maximum Sum Count

Absolute Values 1997-98 2009-10 SDP SDP 359571193.7 1644550626 74071043.4 336717038.7 222842273 879344440.5 419009096.6 1904759211 1.75569E+17 3.62811E+18 2.578182638 3.148916438 1.564609692 1.638964837 1733485760 8175293195 6383160 29045188 1739868920 8204338383 11506278197 52625620035 32 32

Per Capita Values 1997-98 2009-10 SDP SDP 14467.46875 56624.71875 1321.304922 5406.29016 12037.5 50828 7474.429364 30582.59546 55867094.32 935295145.4 1.5480308 2.158411474 1.449951138 1.441482902 30569 131072 4014 17064 34583 148136 462959 1811991 32 32

On the assumption that the SDP and per capita SDP are distributed symmetrically (normally) among the states, it is expected that the difference of mean and median will converge to zero statistically. The hypothesis is evaluated by t statistics: The calculated values of t statistics for 1997-98 and 2009-10 are 1.85 and 2.27 respectively which exceed the critical values of t for 0.05 and 0.07 probability level; it indicates that SDP of states is unevenly distributed. This implies existence of significant degree of disparities in the levels of SDP of states. This inference is further supported by the value of CV, which is as high as 117% and 116%. These values of CV for these two years indicate that the level of disparities of SDP among the states has not changed despite the lapse of 13 years and the trumpet that is being blown for accelerated growth of Indian economy during the era of globalization. The inter-state disparities of SDP seem to have marginally declined from 1997-98 to 2009-10, but this inference is not supported by the range of variation of SDP among the states, which has increased from 1.73E+09 in 1997-98 to 8.18E+09 in 2009-10. Besides, the coefficient of skewness and kurtosis also lend credence to the thesis that inter-state disparities in SDP have increased in the 13 years covered in the study, marginal decline in the value of CV notwithstanding. As the geographical area and population vary greatly among the states of India, distribution of SDP is likely to be affected by this disparity. The absolute values of differences may, however,

also be affected by differential population growth of states. Therefore, descriptive statistics for per capita SDP (PCSDP) is also evaluated. The t values of difference between mean and median of PCSDP for the two years are 1.84 and 1.07 respectively. This implies that the difference of mean and median of PCSDP has substantially declined from 1997-98 to 2009-10. The CV has also been substantially reduced to 51.7% and 54% respectively for the base and terminal years. These results lend credence to the postulation that differentials of SDP are affected by population growth; normalization of SDP by population has reduced inter-state disparities of distribution. But this is contradicted by the increase in the value of coefficient of kurtosis from 1997-98 to 2009-10, which implies that positive skewness of the distribution curve has been accentuated further. The results of this table do not conform to the inferences drawn from inter-state distribution of absolute values of income/SDP. These results highlight an important aspect of empirical analysis and it is that the nature of measurement of the values of the variables and statistical tool of analysis may affect the results that may or may not conform to each other if values are measured differently or different methods of data analysis are used. It is, therefore, advisable not to depend on one methodological instrument or form of data used for analysis. Disparities of Electricity Used in States An important question in the context of this study is whether the distributional attributes of SDP and per capita SDP of states are replicated by the distribution of total and per capita electricity used in states. The answer may emerge from the results reported in table 2. Table-2

Mean Standard Error Median Standard Deviation Sample Variance Kurtosis Skewness Range Minimum Maximum Sum Count

Absolute Values 1997-98 2009-10 EC EC 10201.68966 17650.34375 2301.923825 3701.928098 5240 8780 12396.23917 20941.26769 153666745.6 438536692.6 2.061905051 1.062930305 1.433227627 1.324934637 49539 77684 74 177 49613 77861 295849 564811 29 32

Per Capita Values 1997-98 2009-10 EC EC 345.58817 579.60325 46.999628 79.61556 266.55384 452.71473 253.10074 450.37362 64059.987 202836.4 0.3351811 0.9776754 1.0658231 1.1855884 938.11318 1777.2645 73.753053 59.639431 1011.8662 1836.9039 10022.057 18547.304 29 32


ŠJournal of Human and Work Management December, 2014, Vol. 2, No.2

Faculty of Management Studies, MRIU (ISSN2320-8384)

Figure-1

The t values of differences between mean and median for the two years are 2.16 and 2.40. Thus, the difference of mean and median is highly significant statistically for total energy utilization in the states both in 1997-98 and 200910; the corresponding values of CV are 122% and 119% for the two years. The mean and median difference is much more highly marked for total electricity used in states than for the SDP. The values of CV are also higher for electricity than for SDP. On the whole, these results may be taken to mean that the distribution of electricity generated and utilized is highly uneven among the states than the uneven distribution of SDP. These inferences are subject to confirmation by the results obtained for per capita electricity consumption of states. Descriptive statistics of per capita electricity consumption is also calculated. As expected, the difference between mean and median and the value of CV for base and terminal years for per capita electricity used have lower values than their corresponding values for total electricity used in states. This also holds true for the values of coefficients of kurtosis and skewness. These results conform to those derived for distribution of per capita SDP but the degree of inequalities in the distribution of per capita electricity used in states is much less marked than for total electricity used, differentials being imputed to differences of population. Part of the differentials of electricity used in states may also be a consequence of the differences of development among the states.

Figure-2

The above Lorenz curves for the two time periods are significantly distanced from the line of equal distribution, highlighting high degree of inequalities in the distribution of SDP among states. The almost similar shape of the curves for the two time periods signifies an insignificant change in inequalities in distribution of SDP among states despite the lapse of 13 years. The table below captures the change in cumulative percentage shares of states in SDP at two time points: Table-3 Cumulative % of States

The above inferences may need more direct and conclusive evidence for support. Hence, Lorenz curves have been traced both for SDP and electiricity used in states in absolute and per caput terms. Lorenz Curves of Distribution of SDP among States The degree of inequalities in distribution is likely to be more sharply highlighted by the Lorenz curve than what has been revealed by above results of descriptive statistics. The curves are reported below.

Cumulative

1997-98

2009-10

25%

1.08%

1.11%

50%

7.46%

7.95%

75%

33.42%

33.87%

% SDP

The above table depicts inequality of distribution of SDP accurately. The table shows that approximately 1% of total states have had 25% of sum of SDP of all states; in fact, among the states. 25% of GDP of India (sum of SDP of states) was


Shri Prakash and Gautam Negi

accounted by 1.08% of the states in 1997-98, the proportion of states accounting for 25% of total GDP increased marginally to 1.11%, highlighting further accentuation of distributional inequalities of income among the states. But 7.46% of total states had a share of 50% in total GDP in 1997-98. Proportion of states having 50% of total GDP marginally increased to 7.95% in 2009-10. Only one third of total states have had a share of 75% of total GDP in both the years. These results lend strong evidence of distributional inequalities being further increased despite high growth of Indian economy during the period of 13 years, which separate these two time points. This implies that economic growth failed to mitigate the inequalities in the distribution of SDP among the states. Such results are explained by the differential growth of SDP of states during these years. The developed states have successfully maintained their lead in development over the states lagging in development race. The findings are in consonance with the inferences derived from descriptive statistics though the results are more accurate numerically. These results also lend credence to the inferences drawn by several researchers with regard to the underdevelopment of U>P in comparison to the development of 5-7 most developed states of India in different fields of social and economic activities (See, Prakash, S. and Chaturvedi H., 2012). Lorenz Curves of Distribution of Electricity among States The Lorenz curve for total electricity used pertaining to the base and terminal year are depicted below: Figure-3

Figure-4

The shapes and locations of the above Lorenz curves are similar to the curves of SDP. The Lorenz curves for both the time periods are quite distant from the line of equal distribution, thus signifying high differentials in inter-state use of electricity. The table below captures the change in cumulative % of electricity used and cumulative % of states for the two time periods Table-4

Cumulative % electricity use 25% 50% 75%

Cumulative % of States 1997-98 2009-10 0.41% 3.71% 30.12%

0.50% 5.94% 31.73%

The table highlights significant disparities in the distribution of electricity used among the states. 25% of the total electricity used is accounted by only 0.41 and 0.50% of the states in 1997-98 and 2009-10. As against this, 5.94% of states used 50% of the total electricity in 2009-10; this is in contrast to the fact that 3.71% states used 50 per cent of total electricity in 1997-98. Thus, percentage share of total states using 50 per cent of total electricity was lower in 1997-98, implying inequality in the distribution of electricity used has been further accentuated. A perusal of the above two tables indicates that the disparities in electricity used is more than the disparities in the distribution of SDP. Thus, economic development has implied wider spread of scarcity of electricity than before among the states of Indian Union. This is against the general belief that development generally leads to more even distribution of prosperity and greater and better living conditions for the people of the


©Journal of Human and Work Management December, 2014, Vol. 2, No.2

country. Above findings are again in consonance with the results obtained from descriptive statistics. But, the increase in inequalities in electricity used is more marked as compared to the increase in inequalities of SDP for the two time periods among the states. Relation between SDP and Use of Electricity in States Growth of income/output is theoretically envisaged to be mainly a function of employment, stock of capital and technology. This has been the thrust in literature relating to growth. Yhe following growth accounting equation has been popular among economists: “Gy = Gl + Gk” G is growth rate and subscripts y, l and k refer to income/SDP, employment and capital respectively. Substitution of observed values of three growth rates for US economy left a big residual. Abromovitz (1966) and Saltor (1967) attributed the big residual to technology. Solow interpreted the value of intercept of the production function to represent influence of technology on output. However, Shultz (1967) and Dannison (1969) attributed the residual factor of growth to education. Schultz also hypothesized that each generation leads to substitution of less by more and better educated work-force which raises productivity and accelerates growth. The Schultz thesis has been explored by V.N. Kothari (1973) and Shri Prakash (1976) by limited and indirect empirical evidence, while Amit Sharma (2012, 2013) explored it recently with extensive empirical evidence for Indian economy. He\is findings lend credence to the thesis that the India's economic growth has been driven by productivity which has been labour displacing in effect. Consequently, economic growth of India has been employment less growth. This study postulates electricity to be an additional factor of growth, while both education and technology are assumed to be represented by intercept. Besides, the role/contribution of capital and labour to growth of output is also overlooked. The postulation that electricity has been the main driver of Indian economic growth constitutes the base of the OLS estimates of

Faculty of Management Studies, MRIU (ISSN2320-8384)

following four linear and log linear regression models of SDP and PCSDP on EC and PCEC: The regression results are sequentially tabulated below SDP97-98 = 37371478 + 33515.7 EC97-98, R2 = 91.04, F= 274.41 t: (1.16) (16.57) SDP09-10 = 101928646.4 + 87399 EC09-10, R2 = 92.33, F= 361.09 t: (0.81) (19.00) ln SDP97-98 = 5.33 + 0.815 ln EC97-98, R2 = 0.96, F= 635.22 t: (46.58) (25.20) ln SDP09-10= 5.76 + 0.815 ln EC09-10, R2 = 0.94, F= 467.70 t: (40.07) (21.63)

The linear regression models of SDP as a function of electricity used fit the data well both for 1997-98 and 2009-10. Explained proportion of variation ranges from 91.04% to 92.32% and coefficient of correlation is highly significant. Thus, only 8-9% of total change in SDP is explained by random factors. The function takes employment, capital and technology as given exogenously and fixed, their influence does not appear to be statistically significant in these relations. The intercept of both the functions is not significant statistically. But the coefficient attached to the electricity used is highly significant statistically. The response of SDP to increase in electricity used shows a substantial increase from 1997-98 to 2009-10. Corresponding to an increase of 1 KW of electricity used, SDP, on an average, increased by Rs.33, 515 in 1997-98 and Rs.87, 399 in 200910. Degree of responsiveness of SDP to electricity used thus has increased approximately 2.5 times from 1997-98 to 2009-10, which implies that the intensity of electricity used in production processes has increased a great deal over a period of 13 years across the states. These results lend credence to the thesis of this study that electricity used is both an enabler and constraining factor of growth. How much potential growth of SDP has been lost due to shortages of electricity is only a matter of conjecture. It needs detailed research investigation which uses the number of hours for which electricity supply is stopped due to shortages. It may conveniently be surmised that the less developed states might have been the greater losers than the developed states for reasons that are obvious.


Shri Prakash and Gautam Negi The difference between the coefficients of electricity in above 2 functions seems to be highly significant. The log linear function fits the data slightly better than the linear function. On an average, 94-96% of total change in SDP of states is explained by the log-linear function. The elasticity coefficient of electricity is highly significant. Corresponding to a 100% increase in the use of electricity, SDP of states increased by 81.5% for both the years. Obviously, the elasticity coefficients of log-linear functions for these 2 years do not differ at all. This is in contrast to the apparent significant difference in the value of coefficient of elasticity in linear functions for 2 years. Relation Between Per Capita SDP and Per Capita Electricity Used The linear and log linear functions are used for per capita SDP and per capita electricity also. The OLS estimates of the functions are reported hereunder. PCSDP97-98 = 6705.80 + 23.92 PCEC97-98, R2 = 62.01, F= 44.24 t: (4.38) (6.65) PCSDP09-10 = 22294.33 + 59.23 PCEC09-10, R2 = 76.04, F= 95.44 t: (5.04) (9.77) ln PCSDP97-98 = 3.03+ 0.45 lnPCEC97-98, R2 = 0.50, F= 27.23 t: (14.23) (5.22) ln PCSDP09-10 = 3.47 + 0.47 lnPCEC09-10, R2 = 0.66, F= 58.61 t: (21.42) (7.66)

The linear regression models of per capita SDP as a function of per capita electricity used in 199798 and 2009-10 fit the data reasonably well. The explained proportion of variation ranges from 62% in 1997-98 to 76% in 2009-10. Thus, a relatively 24% to 38% of total change in per capita SDP is explained by random factors. But factors other than per capita electricity used also exercise significant influence on per capita SDP in both the years, since the intercept is significant in both the functions. The coefficients attached to the per capita electricity used are statistically significant in both the cases. It may, therefore, be inferred that PCEC significantly influences PCSDP. The one unit change in PCEC shows an increase in PCSDP, which ranges from 24 in 1997-98 to 59 units in 2009-10, Thus increase PCSDP in response to increase in PVEC is 2.5 times more in 2009-10 than in 1997-98. Corresponding to 1 KW increase in per capita

electricity used per capita SDP, on an average, increased by Rs.23.92/ in 1997-98 and Rs.59.23 crore in 2009-10. The results are similar to the regression of absolute values of SDP on total electricity used. The results lend credence to the earlier inference that the intensity of electricity used has increased 2.5 times over a period of 13 years across the states. The fit of log linear function to data is less satisfactory than the liner function of per capita SDP on per capita electricity used function. Only 50-66% of the change in PCSDP is explained by the function. The intercept and the elasticity coefficients are significant statistically. Corresponding to 100% increase in per capita electricity used, per capita SDP of states increased by only 45-47%. The elasticity coefficients also do not differ significantly for 2 years in this case also. The results are similar to the log linear regression of absolute values of SDP on electricity used. Results of ANOVA The variance is also an indicator of convergence or divergence among the units involved in analysis. High variance indicates greater divergence from the mean whereas the lower values of variance point towards lower degree of differentials among the observed values of the variable. Besides, Yule and Kendall have developed the Coefficient E which is similar to the Gini coefficient. They have shown the following relation between the squared coefficient E and variance: E2= 2贸2 Therefore, it is postulated that E = (/2)贸 (Yule and Kendall). This supports the use of ANOVA for analyzing disparities in distribution. The results of ANOVA for SDP of states at two points in time are reported in the table given below: SDP97-98 and SDP09-10 Source of Variation SS Rows 8.34471E+19 Columns 2.64188E+19 Error 3.44668E+19 Total

1.44333E+20

ICC = -0.0289

df

MS F P-value F crit 31 2.69184E+18 2.421084915 0.008109 1.822132 1 2.64188E+19 23.76143371 3.08E-05 4.159615 31 1.11183E+18 63


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The table depicts that the variation between rows and between columns is highly significant which implies that the variation has increased significantly in the distribution of SDP among states in both the years taken together (between rows) and between two years of observations for all states taken together. The results highlight that the degree of inequality of distribution of SDP has increased over the years on the one hand, and distributional inequalities among the states have been sharpened on the other. The sign of the intraclass correlation coefficient is negative which indicates that the distributional inequalities of SDP among states are sharper within the year than between the years. Results of ANOVA for electricity utilization for two points in time are as follows: EC97-98 and EC09-10

states taken separately vary significantly. Besides, the distributional inequalities of SDP are more highly marked than those of electricity in 1997-98. This is highlighted by the negative sign of intra-class correlation coefficient (ICCC). SDP09-10 and EC09-10 Source of Variation SS Rows 5.62E+19 Columns 4.33E+19 Error 5.62E+19

df

MS F P-value F crit 31 1.81E+18 1.000042 0.499953 1.822132 1 4.33E+19 23.85416 2.99E-05 4.159615 31 1.81E+18

ICC = -0.031

The results of the above table for 2009-10 are in consonance with those for the year 1997-98. Incidentally, the results of ANOVA lend credence to the results derived from descriptive statistics. This takes us to the analysis on per capita basis. ANOVA of Per Capita SDP PCSDP97-98 and PCSDP09-10

Source of Variation SS Rows 12113970934 Columns 1238021400 Error 4790471468 Total

Faculty of Management Studies, MRIU (ISSN2320-8384)

df

18142463802

MS F P-value F crit 28 4.33E+08 2.528764 0.00839 1.882079 1 1.24E+09 7.236156 0.011907 4.195972 28 1.71E+08 57

Source of Variation SS Rows 2.21E+10 Columns 2.84E+10 Error 8.62E+09

Df

MS F P-value F crit 31 7.13E+08 2.564098 0.005311 1.822132 1 2.84E+10 102.2514 2.45E-11 4.159615 31 2.78E+08

ICC = -0.0314

ICC = -0.021

Both between rows and between columns are statistically significant and intra-class correlation coefficient is also negative. Thus, the distribution of electricity used differs significantly between the years as well as among the states at the given points in time. During the given years of observation inequalities among the states are more highly marked than the inequalities between the years. Joint Variation of SDP and Electricity Used The results of joint variation of SDP and electricity among the states are shown below: SDP97-98 and EC97-98 Source of Variation SS Rows 2.53E+18 Columns 2.26E+18 Error 2.53E+18

df

MS F P-value F crit 28 9.03E+16 1.000061 0.499936 1.882079 1 2.26E+18 25.06208 2.73E-05 4.195972 28 9.03E+16

Variations of SDP of states in 1997-98 and 200910 both between columns and rows are statistically significant. Intra-class correlation is also negative. Thus, these results in line with those obtained for absolute SDP of states. PCEC97-98 and PCEC09-10 Source of Variation SS Rows 4755907 Columns 1098231 Error 2796517 Total

Df

8650655

MS F P-value F crit 28 169853.8 1.700654 0.083108 1.882079 1 1098231 10.99599 0.002534 4.195972 28 99875.6 57

ICC = -0.0271

Variations of SDP of states in 1997-98 and 200910 both between columns and rows are statistically significant. Intra-class correlation is also negative. Thus, these results in line with those obtained for absolute SDP of states.

ICC = -0.031

Between the rows variation is not significant while the variation between the columns is statistically significant. Joint variation of SDP and electricity taken together between the states does not differ substantially. But the differences of SDP among the states and electricity used by

PCEC97-98 and PCEC09-10 Source of Variation SS Rows 4755907 Columns 1098231 Error 2796517 Total

8650655

ICC = -0.0271

Df

MS F P-value F crit 28 169853.8 1.700654 0.083108 1.882079 1 1098231 10.99599 0.002534 4.195972 28 99875.6 57


Shri Prakash and Gautam Negi However, the variation of per capita electricity used in states between the columns is statistically significant at 0.002 probability level while the between the rows variation is significant at 0.08 probability level. Intra-class correlation is again negative. These results, on the whole conform to those for 1997-98.

Figure 5

Joint Distribution of Per Capita SDP and Electricity Results of ANOVA for the analysis of SDP and electricity taken together are reported hereunder: Figure 6

PCSDP97-98 and PCEC97-98 Source of Variation SS Rows 8.61E+08 Columns 3.03E+09 Error 8.34E+08 Total

df

4.73E+09

MS F P-value F crit 28 30739516 1.031653 0.467438 1.882079 1 3.03E+09 101.7049 7.98E-11 4.195972 28 29796382 57

ICC = -0.0320

Per capita SDP and per capita electricity used in states in 1997-98 does not vary significantly between the rows, that is, among the states, though the variation between the columns is highly significant statistically/ Intra-class correlation is also negative. Therefore, distribution related inequalities for SDP among the states is much more highly marked than the inequalities of distribution of per capita electricity used by the states. The results are in consonance with those for joint distribution of absolute values PCEC09-10 and PCEC09-10 Source of Variation SS Rows 1.49E+10 Columns 5.03E+10 Error 1.41E+10

df

MS F P-value F crit 31 4.8E+08 1.052724 0.443586 1.822132 1 5.03E+10 110.2766 9.84E-12 4.159615 31 4.56E+08

ICC= -0.0320

Above results for 2009-10 are similar to those for 1997-98. Regional Variations Inter-regional variations are generally mirror image of inter-state variations, though the magnitudes of differences may be moderated by aggregation effect on values. The inferences from descriptive statistics are supported by Lorenz curves for SDP and electricity used.

The Lorenz curves of regional SDP for both the years are not very distant from the line of equality. Aggregation of states into regional units has reduced the regional disparities in distribution of SDP both in 1997-98 and 2009-10. The Lorenz curves of electricity used in 1997-98 and 2009-10 are shown in figure 7 and 8 Figure 7


©Journal of Human and Work Management December, 2014, Vol. 2, No.2

Figure 8

Faculty of Management Studies, MRIU (ISSN2320-8384)

l An important

aspect of the results is that different methods of data analysis, including those of ANOVA are in conformity with each other which indicate that the results are not specific to particular method of data analysis. References

These Lorenz curves show that the regional disparities in absolute electricity have been reduced in 2009-10 as compared to 1997-98. The regional inequalities are also significantly less as compared to the interstate variations in electricity used. This is also attributable to aggregation effect on disparities. Conclusions and Findings l There

are significant disparities in the distribution of SDP among states l There exist evidence to support the thesis that economic growth has not mitigated regional inequalities of development; l The electricity utilization is highly uneven in states and is more marked than the inequalities in the distribution of SDP among states l The Lorenz Curves for SDP and Electricity lend support to the findings of descriptive statistics of inter-state disparities; l The regional disparities are much less marked in comparison to inter-state disparities in SDP distribution and electricity utilization. This accounted by aggregation effect on inequalities in the distribution of SDP and electricity used; l Electricity intensity of SDP has increased over the years; l The degree of responsiveness of SDP to electricity used has increases more than two fold in 13 years; l An increase of 100% in the electricity utilization results in 81.5% increase in SDP; l Per capita regression functions yield results similar to the function based on absolute basis of values.

Abramovitz, Moses (1956), “Resources and output trends in the US since 1870” American Economic Review, May, Vol. 46 Anbalagan, P. (2011) “Public Expenditure on Education: A study of interstate variations in India”, IJBEMR, Vol. II, Issue 1, pp 19-31 Boyle, E. G. and McCarthy, T. G. (1997) Simple Measure of Convergence, Oxford Bulletin of Economics and Statistics, Vol. 59, No.2, pp 257-264 Cashin, P. and Sahay, R. (1996): “Internal Migration, Centre- State Grants, and Economic Growth in the states of India”, IMF Staff Papers, Vol. 43, No.1, pp 123-71 Dasgupta, D. et al (2000) “Growth and Interstate Disparities in India”, Economic and Political Weekly, July 1, Vol. XXXV, No.27, pp 2413 -2422 Dennison, E.F. (1962), “Sources of economic growth in US and the alternatives before us”, Committee for Economic Development, supplementary paper No.13, New York Dholakia, R. (1994) Spatial Dimension of Acceleration of Economic Growth in India”. Economic and Political Weekly, August 21, Vol. XXIX, No.35, pp 2303-09 Energy Statistics (2013) Ghosh, B.S., Marjit, S. and Neogi, C. (1998): “Economic Growth and Regional Divergence in India, 1960 to 1995” Economic and Political Weekly, June 27-July 3, Vol. XXXIII, No.26, pp 1623-30 Kendrick, J.W. (1961), Productivity trends in the US, Princeton University Press Kothari, V.N. (1971), Educated unemployment in India, Earth Vikas, Vol. 1 Marjit, S. and Mitra, S. (1996) Convergence in Regional Growth Rates: Indian Research Agenda”, Economic and Political Weekly, August 17, Vol. XXXI, No.33, pp 2239-42 Mathur, P.N. (1962) “An efficient path for the technological transformation of an economy.”In T.Barna( Editor),Structural interdependence and Economic Development, Macmillan, London.


Shri Prakash and Gautam Negi Prakash, Shri (1977) “Regional Inequalities and Economic Development with special reference to Infrastructural facilities in India, Indian Journal of Regional Science, Vol. IX, No.2 Prakash, Shri, and Mohapatra, A.C. (1980) “Economic Development in the state of MP, India: a study of inter temporal and intra regional variations: Third World Planning Review, Vol. II No 1, Liverpool University Press. Prakash, Shri and Rajan (1977) “Interstate differentials of agricultural growth among Indian states”, Indian Journal of Regional Science Prakash, Shri and Singh, Inderjeet (1984) “Energy intensity in Indian economy – a study in input output framework” proceedings of twentieth anniversary international conference IORA, NEHU, Shillong Prakash, Shri and Balakrishnan, Brinda (2008) “Input Output Modelling of Labour Productivity and its Human Capital and Technology Components in Indian Economy”, Bulletin of Political Economy, Vol.2, No.2, pp 137-64 Prakash, Shri and Nair, Radhakrishnan, C. (1978) “Economic development and regional inequalities with special reference to Madhya Pradesh”, Productivity, Special issue Prakash Shri, Negi , Gautam and Sharma, Sudhi (2013) “Rising Contribution of tertiary sector in Indian economic growth” Indian Services Journal

Sarkar, P. C. (1994) “Regional Imbalances in Indian Economy over Plan Periods”, Economic and Political Weekly, March 12, Vol. XXIX, No 2, pp 621-33 Salter, W.E.G. (1960) Productivity and technical change, Cambridge. Schultz,T.W.(1960) “Capital formation by education”, Journal of Political Economy, Vol.68, Dec. Sharma, Amit (2012) “Subtitution of professional and technical education for general education in employment in Indian economy”, IIMS Journal of Management Science. No.1, Jan- June Sharma,Shalini , Sharma, Amit. and Bhatnagar, Gunjan (2012)” Productivity effect of upgradation of educational qualification in Indian economy” UPUEA, Economic Journal, 2012, Vol 5 No.5. Solow,R.M.(1969) “Growth theory, An Exposition”, Clarindom Press, Oxford. Solow, R.M. (1962), “Technical progress, capital formation and economic growth”, American Economic Review, May. Yule, G. Udney and Kendall, M.G. (1954) Introduction to the Theory of Statistics, 4-th Edition, Reprin 1993, Universal Book Stall, New Delhi. www.mospi.org.in


ŠJournal of Human and Work Management December, 2014, Vol. 2, No.2

Faculty of Management Studies, MRIU (ISSN2320-8384)

Performance Appraisal System (PAS) - a Vital HR Sub System for Public Sector Banks in India Prof. IK Kilam, (Research Scholar, Manav Rachna International University, Faridabad) Dr. S. Banerjee & Dr. N C Wadhwa (Vice Chancellor, Manav Rachna International University, Faridabad)

1. Introduction / Background Performance Appraisal System (PAS) is an integral part of the overall HRD system within an organization. While on one hand, it contributes towards periodic measurement of performance of individuals and the organization as such, on the other, the system also contributes greatly towards people's development. It is generally recognized to be an effective system in this direction, yet there is a certain degree of laziness and consequently there are many apparent loopholes in the implementation process at different levels of operation. In India, there are banks segregated in different groups. Each group has its own benefits and limitations in operations. Each has its own dedicated target market. A few of them work in the rural sector only while others in both rural as well as urban. Many banks are catering in cities only. Some banks are of Indian origin and some are foreign players. Banks in India can be classified into: Public Sector Banks, Private Sector Banks, Cooperative Banks, Regional Rural Banks, and Foreign Banks. Public Sector Banks are banks where a majority stake (i.e., more than 50%) is held by a government. The shares of these banks are listed on stock exchanges. Public Sector Banks are indeed large banking organizations delivering banking services to a vast majority of customers. With changes taking place rather fast, in the economic & financial environment, customer needs and expectations growing by each passing day, technology helping a great deal to improve the variety, quality and pace of such services, enhanced competition among the banks and other financial players,

there is increased pressure to perform better and better at individual level & the organizational level as a whole. The relevance of Performance Appraisal System in Public Sector Banks in India becomes particularly more critical in view of their size, diversity and their contextual relevance to the economic and financial environment of the country. It therefore becomes necessary to examine the efficacy of this system with a view to bring in necessary periodic changes in formats and the system as a whole & also initiate steps to strengthen the implementation process within all public sector banks. Literature Review Pattnaik Manjula & Pattnaik Balachandra (2011), Performance Appraisal System in Public Sector Banks, CiiTInternational Journal of Mining Knowledge Engineering, Online:ISSN 0974-9578, DMKE082011022, August 2011, Public sector banks at all strata – big Public sector banks, medium Public sector banks and small Public sector banks are emphasizing the importance of Performance Appraisal System (PAS). It is only through proper implementation of Performance Management System that quality workforce can be retained. Usually a separate independent agency is appointed to evaluate the performance of the employees which is usually carried out online. The returns are based on the contribution of the employees to the organization in the form of performance. The primary objective of performance evaluation is to identify the employees' strengths and weaknesses in order to reinforce the strengths and to develop methods and tools to improve upon weakness areas. Job profiles are to be clearly defined with respect to


IKKilam, S Banarjee and N CWadhwa factors, criteria and measurement. In Performance Management Process, Career Counseling is done to align the individual goals with business goals. Individual employees are imbibed with best skills to fit in future vacancies and to develop leadership capabilities. All these are carried over to make the Public Sector Banks the Employers of Choice. This is backed by cohesive, competent and committed HR teams. HR teams with Business Managers accomplish organizational objectives. People's vision and values are understood before proceeding to place them on the job. Public Sector Banks are mainly performance-oriented through rewarding best performers, applying process and systems approach and providing opportunity for continuous improvement. Shrivastava Pallavee, Kumari Singh Sandhya & Kiran Rai Usha (2010), Performance Appraisal as a tool to improve marketing efficiencies in banking industry: A case study of PNB Banking sector is a fast growing sector of India. With swift expansion in the number of branches and the new functions assigned to them, banks are beginning to feel a new pressure on their organizational abilities i.e. the processes of recruitment, placement, training, promotion and appraisal, in order to ensure that the right number of staff with the right capacities are available at the right time and for the right places. Appraisal is one of the key factors of organizational ability which is the focus of this study. As we know that performance appraisal is one of the most widely used methods for measuring the value of employee performance, the success of performance appraisal depends on how effectively it is implemented. It also depends on how well the employees have understood the performance appraisal system and how positively they are oriented towards their system. Banking sector competes by innovating and developing the core competencies of their human resources. The human resource system can be made effective by having a valid appraisal system that also acts as a true motivator. The purpose of the paper is to know the impact of performance appraisal on the reward, motivation, job satisfaction, superiorsubordinate relationship which will finally lead

to customer satisfaction and better performance by the bank. Almost all Banks in India are legitimately aspiring to become world-class in their quality of products and service delivery. They have to deliver greater value to the customer at lower costs in order to emerge as globally competitive financial entities. Knowledge and skills in their employees have to be leveraged to gain competitive advantage. Here comes the role of an effective Performance Management System. According to Dr. A K Khandelwal, Chairperson, Committee on HR Issues of PSBs. “The current Performance Appraisal System in public sector banks is an area of serious concern. With the exception of few, most banks are using the standard appraisal format circulated by the Government. Even the appraisal format used for senior executives including CMD and ED is trait based and is totally out of tune with the strategic role these executives are expected to perform. The appraisal system is routinely administered and generally not used for developmental interventions. Further, much of the appraisals and ratings have upward bias, with 80 - 90% of appraises getting 'excellent' rating. This does not lend to distinguishing performers from nonperformers. This in turn has dampening effect on performers. Further, it has in many cases, a cascading effect leading to mediocrity�. Eichel and Bender (1984) State that performance appraisal can also be called as the Achilles heel of management. Although leaders of many public organizations strive to be employee focused or employee centered, a lack of emphasis is given to the process of performance appraisals that is intended to assist the employee in achieving both personal and organizational goals. Bernardin and Beatty (1984) Suggest that employee reactions to a performance appraisal system are usually better indicators of the overall viability of a system than the more narrow psychometric indices. Cleveland, Murphy and Williams (1989) Suggest that performance appraisal information is most frequently used for salary administration, performance feedback and for identification of employee strength and weaknesses. However,


ŠJournal of Human and Work Management December, 2014, Vol. 2, No.2

performance appraisal is often used for multiple purposes rather than a single function. Bretz, Milkovich and Read (1992) Indicate that the most important performance appraisal issue faced by organizations is the perceived fairness of the performance review and the performance appraisal system. Their findings suggested that most employees perceive their performance appraisal system as neither accurate nor fair. Murphy and Cleveland (1995) Suggest that employee reaction to appraisals is a class of neglected criteria that should be considered in evaluating the success of a system. Skarlicki and Folger (1997) Suggest that the appraisal process can become a source of extreme dissatisfaction when employees believe the system is biased, political, or irrelevant. Cascio (1998) Defines performance appraisal as a process to improve employee's work performance by helping them realize and use their full potential in carrying out the organization's missions and to provide information to employees and managers for use in making work related decisions. He goes on to define effective performance appraisal system as an exercise in observation and judgment, a feedback process and an organizational intervention. It is a measurement process as well as an intensely emotional process. Above all, Cascio stated that it is an inexact, human process that is utilized differently in almost every organization, regardless of the industry. Geddes, Deanna and Konrad (2002) conducted a study on “Demographic Differences and Perceptions of Performance Appraisal�. They examined the differences between employees and their managers regarding perceptions of performance appraisals, in general, and negative feedback. Major HR Initiatives of Public Sector Banks In the context of gaining competitive advantage necessitated by macro and micro level changes in the operative business model, most of the organizations are continuously considering various strategic HR options. In the journey of

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organizational transformation, the critical challenge lies in evolving a performing organization so that the business deliverables can contribute to the operative efficiency of the organization. The need for institutionalizing "Performance Management System" (PMS) as a strategic HR tool can hardly be ignored. In the background of such thinking, a one-day seminar to deliberate on the various theoretical and practical options of installing PMS in public sector banks was held as back as August 2003. The seminar deliberated on the following thematic areas, which are in fact, quite relevant even today: l A review of traditional model of employee appraisals and its limitations in the context of changes in the workplace l The new paradigm of Performance Management through goal setting and Balanced Score Card l Behavioral analysis of the dynamics of organizational transformation - "Promise to Performance" : experiments in PMS l Presentation of case : "Organizational Turnaround through PMS" Human Resource Management plays a vital role in accomplishment of corporate goals. In a service-oriented industry like Banking, success depends on prompt and efficient customer service, which can be achieved by recruiting right talent, grooming and right placement. Banking industry as a whole is facing shortage of staff and Banks are making all out efforts to recruit employees both in clerical and officer cadre. Conscious attempts are being made to improve / infuse young employees to replace the superannuating employees. All the Public Sector Banks have put in place a comprehensive HRM Policy that provides the road map for acquiring appropriate and need based human resources, its development through training, job enrichment, reward and recognition for better performance, career progression, welfare and retention. The Banks are allocating around 3 to 10 % of their net profit towards various schemes for the welfare of staff including retired staff. These welfare schemes are administered by a Central Welfare Committee / HR committee consisting of management and employees representatives.


IKKilam, S Banarjee and N CWadhwa Several perquisites like leased accommodation, provision of mobile phones, Group Insurance, etc. have been significantly improved for all categories of staff, which besides, being a great motivational factor in improving the employee productivity, were indicative of a healthy employer-employee relationship. To attract, retain and train its fresh employees, many banks are partnering with the established external educational institutes. These institutions are providing induction training of new hires at Management Trainee level. This has brought about a touch of professionalism and oriented positively the recruitment approach of banks. For example, PNB has partnered with Manipal Global Education Services (MaGE), Bengaluru for recruitment of Management Trainees. The course contents of the Programme are tailor made as per requirement of the Bank. Similarly, other public sector banks are also utilizing the services of established training / management institutes to provide leadership training to their officers and senior executives. All these banks have well established training colleges for ongoing training of its staff – clerical, officers & executives. Further, to bring attitudinal change among front line staff and other officials, banks are providing exhaustive trainings on soft skills, leadership management, etc. The banks' quest to enhance the competencies of the workforce has continued through focused and need based trainings at various institutes of repute like IIMs, JNIBF, ISB, XLRI and NIBM. Customized programmes are also organized to develop expertise in certain niche areas like Risk Management, Treasury Operations, New Product Development, Marketing and IT. Specialized trainings to the Senior Management / Top Management Level Executives are conducted based on periodic requirements. The banks have been able to add substantially to the skill level of its officials through this training intervention and motivating them to perform with renewed vigor and enthusiasm. Some of the other initiatives being taken on the HR front include: l Scientific assessment of Manpower requirements; l Simplification of the Annual Performance Assessment system;

Adoption of uniform appraisal system as l advised by Ministry of Finance, Govt. of India; l Review of Promotion Policy to make it more objective and suitable as per the present requirements; l Inclusion and integration of more HRMS modules (activities) to provide full-fledged solution to all HR issues; l Introduction of faster promotion process, relaxing eligibility criteria for officers; l Va r i o u s w e l f a r e m e a s u r e s b e i n g implemented for employees such as Group Savings Linked Insurance, Death Relief Scheme, Reimbursement of Education Expenses of wards of employees, Tie-up arrangement with various hospitals for cashless treatment, Medical Assistance for Retired Employees and so on. All these HR measures are contributing towards better performance of individual bank officials and the banks as a whole. Study Sample / Design In order to examine the current efficacy of Performance Appraisal System in Indian Public Sector Banks, a request letter under RTI Act 2005 was sent along-with one page questionnaire to HRD heads of 25 Public Sector Banks during Oct /Nov 2013. The questionnaire was aimed to assess the areas like: 1. Whether PAS is implemented for officers & clerical staff of the bank; 2. Whether new formats on PAS as advised by Ministry of Finance, Govt. of India in 2011 12 have been adopted; 3. Whether any formal training inputs are given to appraisers, reviewers, appraisees and the dealing HR staff, on PAS formats in use & the annual implementation process; 4. Whether there are any plans to review the formats, system & the implementation process in the next 2/3 years; 5. Details of changes brought about towards more effective implementation of the PAS, during last three years; 6. Whether a detailed manual is prepared & distributed among staff for clear guidelines on the system & its implementation; 7. Whether the system is fully / partially


ŠJournal of Human and Work Management December, 2014, Vol. 2, No.2

computerized; 8. Relevant data on officer & clerical staff strength of the bank during last three financial years; 9. Whether this researcher could visit the bank's apex training college to seek feedback on implementation of PAS from bank officers / executives on training at such training colleges; 10. Any other views on PAS in general & in respect of the concerned bank in particular. In addition, detailed individual questionnaires were administered to nearly 380 bank officials from different banks in the category of chief managers and above with over 20 years of work experience in the banking sector and their responses sought as appraisers / appraisees. The responses were obtained during personal one to one discussions with these bankers and during some of the training programmes at National Institute of Bank Management (NIBM) Pune & at some of the individual training colleges of different banks. Study Findings l

All the public sector banks do have a system of annual performance appraisal system for their officers & executives. Till recently, they had their individual formats in use for this purpose, but after the intervention by the Ministry of Finance, Govt. of India during 2011-12, they have generally adopted the uniform standardized PAS formats. Similar system for clerical staff is yet not in force in these banks.

l

Though not fully committed as yet, some of these banks propose to make a review of the current PAS within next two to three years.

l

As far as giving suitable training inputs to appraisers, appraisees, reviewers & the concerned HR staff is concerned, most of the banks seem to be relying only on the detailed circulars that are issued regarding PAS formats & the implementation aspect. Some of these banks have also prepared detailed manuals of instruction on implementation of the PAS and distributed them among their branches / offices towards effective implementation of the system.

Faculty of Management Studies, MRIU (ISSN2320-8384)

l

l

l

Barring a few, most of these banks have c o m p u t e r i z e d t h e PA S t o m a k e implementation easy & quick and make use of advanced technology towards this vital HR process. Among the recent changes in PAS brought about by these banks are: Formation of Grievances Redressal Mechanism by some of the banks; adoption of uniform formats as advised by Govt. of India; Incorporating added weight-age for new business parameters / dimensions as are introduced recently to the branch portfolio; providing a column in the PAS formats about integrity aspects, etc. As regards uniformity of PAS formats across all public sector banks, it is found through a research study based on a sample survey of over 148 bank officials as appraisers, that 21.62 % 'strongly agree' with the idea the PAS formats to be uniform across all public sector banks, while as many as 47.97 % of the respondents 'agree' with this contention. Overall, 69.59% (47.97% + 21.62%) respondents as appraisers agree that the PAS formats should be uniformly applicable to all public sector banks. At the same time 12.16% respondents 'disagree' with uniform formats system and 2.02% respondents 'strongly disagree' with this system of uniform PAS formats across all these banks. Overall, 14.18% (12.16% + 2.02%) respondents in the category of appraisers do not favor the idea of uniform formats. And, as many as 16.20% respondents have indicated that they can not say anything in this regard. Similarly the survey of 228 bank officials as appraisees reveals that 56.14% of the respondents favor the 'uniform' pattern of PAS formats, while 21.05% respondents in the similar category are of the opinion that the PAS formats should be 'differently' used in different banks. As many as 22.80% respondents as appraisees indicated that they could not say anything in this regard. It is therefore reasonable to infer that the bank officers by and large, seem to be happy with the system of uniform PAS formats as introduced for different public sector banks on the advice of the Ministry of Finance, Govt. of India during 2011-2012.


IKKilam, S Banarjee and N CWadhwa

GRAPH I The Performance appraisal Formats in all Public Sector banks should be uniform(Response from Appraisers) 60.00%

(appraisers and appraisees), 69.04% respondents have indicated that the PAS formats are appropriate in size, while 23.28% respondents on the whole feel that these are rather lengthy / descriptive. And as many as 7.67% of the respondents feel that the formats are too brief.

50.00%

GRAPH III

40.00%

Do you find Performance Appraisal forms in your bank (Response from Appraisers)

30.00% 20.00% 10.00%

70.00% 60.00%

0.00% Strongly agree

Agree

Neither agree nor disagree

Disagree

50.00%

Strongly disagree

40.00% Series1

30.00% 20.00%

GRAPH II

10.00%

Should the Performance Appraisal formats & implementation system be followed in different PSBs – (Response from Appraisees)

0.00% Too descriptive

Appropriate

Too brief

GRAPH IV Do you find Performance Appraisal forms in your bank (Response from Appraisees)

60.00% 50.00% 40.00% 30.00%

Series1

20.00% 10.00% 0.00% Differently

l

Uniformly

Cant say

As regards appropriateness of the size of PAS formats as in use, in different public sector banks, the survey of 148 bank officials as appraisers reveals that 60.81% percent of the bank officers believe that the formats in use are appropriate. At the same time, 29.72% respondents under the same category believe that these formats are too descriptive / lengthy, while only 9.45% of the respondents have stated that these formats are too brief. Similarly, the survey of 230 bank officials as appraisees reveals that 74.34% of the respondents believe that the PAS formats are appropriate in size. From the same category, 19.13% of the respondents have stated that these formats are too lengthy while 6.52% have stated that these are rather too brief. If we add the two categories of respondents

80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00%

Series1

Too descriptive

Appropriate

Too brief

GRAPH V ALL TOTAL (Appraisers + Appraisees) 80.00% 60.00% 40.00%

Series1

20.00% 0.00% Too descriptive

Appropriate

Too brief


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Conclusions & Recommendations On the whole, this research study indicates that public sector banks in India have well established performance appraisal system in place for its officer staff. Of course, there is scope for examining the feasibility of making this system applicable for clerical staff as well. Wherever there are gaps in fully computerizing the performance appraisal system and on - line submission of annual appraisal formats, these need to be filled up expeditiously. Monitoring mechanism in respect of implementation system on an annual basis needs further strengthening to make the system deliver the desired results on employee performance and development. There is also need for increased awareness about putting in place a foolproof system of reviewing the system at-least every three years with a view to bring in new changes as are needed

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periodically. Holding annual workshops / seminars / training sessions for appraisers, reviewers, appraisees and concerned HRD staff on PAS will also contribute towards increasing the overall efficiency in adopting, accepting and implementing the performance appraisal system with much greater zeal and to make the system more effective and result oriented. On the whole, PAS in PSBs is reasonably well established and an accepted HRD sub system. Apart from bringing in increased level of commitment within the banking organizations and all relevant stake holders towards better implementation of the PAS, strict annual monitoring and a periodic review of the system & the formats in use will go a long way in improving the overall effectiveness of the system.


©Journal of Human and Work Management December, 2014, Vol. 2, No.2

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A Brief Overview of the Evolution and Reforms in Corporate Governance Niyati Chaudhary* and Dr. (Mrs.) Kamlesh Gakhar** *Ms. Niyati Chaudhary: Junior Research Fellow, Institute of Management Studies and Research (IMSAR), Maharshi Dayanand University, Rohtak, Haryana, INDIA. E-mail address:niyatichaudhary03@gmail.com.Contact No. 09991063837.

** Dr. (Mrs.) Kamlesh Gakhar: Professor, Institute of Management Studies and Research, Maharshi Dayanand University, Rohtak. Haryana, INDIA. Correspondence address: House no.261, Sector 14, Rohtak-124001, Haryana. E-mail address:kamleshgakhar09@gmail.com.

ABSTRACT: In today's corporate world, every stakeholders' group requires good corporate governance. Good corporate governance acts as a key to handle accounting scandals and to mitigate growing concern about the quality of financial statement. Corporate Governance reforms got a kick start with the rise of frauds and scams in the corporate sector all over the world. Need for the good corporate governance was realized in India with the liberalization, privatization and globalization of the Indian Economy in 1991. The objective of this paper is to study the reforms in corporate governance. This study covers the various regulations and policy developments with regard to the evolution of corporate governance practice in India. This paper also analyses reforms in corporate governance in various countries. The study is based on secondary data collected from various journals, books and websites. Keywords: corporate Governance, Reforms, Clause 49, JEL Classifications: G34, G38

Introduction Corporate governance is a mechanism which tries to eliminate the principle-agent problem by ensuring accountability to stakeholders. A broader view of Corporate governance can be seized from few of the following definitions:According to Milton Friedman, “Corporate governance is to conduct the business in accordance with owners' or shareholders' desires, which generally will be to make as much money as possible, while conforming to the basic rules of the society, embodied in law and local customs”.

According to the CII's report of 1998, “Corporate Governance deals with laws, procedure, practices and implicit rules that determine a company's ability to take managerial decision vis-à-vis its claimants-in particular, its shareholders, customers, creditors and the employees”.

The Cadbury Committee defined the corporate governance as a system by which companies are directed and controlled. Shleifer and Vishny describe corporate governance as “The ways in which suppliers of finance to corporations ensure themselves of getting a return on their investment”. Figure 1.1 SCOPE OF CORPORATE GOVERNANCE


Niyati Chaudhary and Kamlesh Gakhar

Source: Tricker, Bob, Essential Director (The Economist), Replika Press Pvt. Ltd., Kundli, 2004, p.5. Scope of Corporate governance presented in figure 1.1, shows relationship between all stakeholders. Boards of directors are accountable to all stakeholders. Board of directors has relationship with shareholders, auditors, management and stakeholders. Board of directors is accountable to the management as well as equity shareholders. They are accountable to the management for taking timely decision. Simultaneously, the board is also responsible to equity shareholders for protecting their interest but not at the cost of stakeholders. Board of directors takes into consideration the interest of all stakeholders. Ethics plays a vital role in the corporate governance. Lack of ethics in corporate governance gives adequate scope for enterprise to mislead stakeholders and raise suspicions about the efficacy of the corporate governance system. The term governance means a controlling or ruling function, which is exclusive accountability of board of directors. In broad, corporate governance reforms have significantly focused on the relationship between the management and the Board members. Corporate governance is getting popular in the business as well as in academics. There are mainly two reasons behind this. One is that the corporate form of the business has succeeded progressively all over the world, which led to the spree of corporate frauds worldwide. Another reason is that these corporate companies contribute to the overall growth and development of the economies. 2. Corporate Governance Development in India: The BSE was established in 1875, the oldest stock exchange in Asia. The Bhabha committee was set up in India. Companies act, 1956 was founded on the basis of recommendations given by this committee. Disclosure of financial results and protection of minority shareholders is integrated in this act. In 1950s, financial scandals in LIC and PNB in 1985, eroded shareholders'

wealth. As per review of literature corporate governance was weak in India in comparison to US, UK, Germany and Japan. Prior to the governance reforms in India, Indian corporate governance in practice was considered weak and quite dysfunctional. System of governance was a failure due to inconsistent disclosure and largely ineffective boards of directors. Indian government took initiative to reform the corporate governance in response to the awareness generated by Cadbury committee report and corporate developments world over. Since financial liberalization in 1991, there were significant corporate governance reforms in India. In 1991, the Indian government faced a fiscal crisis and economy performed poorly. With economic reforms in India, Indian government established SEBI and NSE. The Securities and Exchange Board of India (SEBI) --India's securities market regulator – was established in 1992.Establishment of SEBI was the significant development in the area of corporate governance and investor's protection. SEBI introduced regulatory regime for users in fairness and transparency. The Companies Act, 1956 was silent about the composition of the directors or the minimum qualification required (other than qualification shares) to become a director. Concerns for corporate governance in India rose due to enhancement in Frauds like Harshad Mehta stock market scam, 1992. Earliest attempt in corporate governance development was Code for Desirable Corporate Governance by Confederation of Indian Industry's on 1st April 2001. One hundred forty listed companies accounting for almost 80 percent of market capitalisation started following a mandatory code. By April 2003, every listed company in India adopted the SEBI code of Corporate Governance. 2.1 (Confederation of Indian Industry) CII's Desirable Corporate Governance Code: This is the first institution initiative in India regarding corporate governance. The primary objective was to develop and promote a code for Corporate Governance to be adopted and followed by the Indian companies including Private Sector, the Public Sector, Banks or


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Financial Institutions, all of which are corporate bodies. The final draft of the said Code was broadly circulated in 1997 while the Code was released in April 1998 called Desirable Corporate Governance Code. The initiatives taken by CII were related to protection of investors' interest mainly the small investors and to develop a high level of public confidence in business and industry and the promotion of transparency as well as disclosure of information by the corporate sector needed to move towards international standards. There is need to move towards international standards in terms of disclosure of information by the corporate sector in order to develop a high level of public confidence and to attract low cost capital from across the globe, as well as to survive international competition. Both Indian and international investors demands greater disclosure. Recommendation by CII: l

l

l

Firms should have 1/2 outside directors when the CEO and Chairman are the same while 30% outside directors if the firm has a nonexecutive chairman. Firms should have an audit committee with at least three nonexecutive members. All members should have experience in financial matters The firm's financial statements should be certified by CEO and CFO.

When the CII adopted the Code of Corporate Governance from the recommendations given by the Task Force, the difference between the recommendations of the Task Force and the final outcome was very little .Firms which do not comply with Clause 49 can be delisted and face financial penalties. 2.2 Kumar Mangalam Birla Committee, 1999: After the code of corporate governance issued by the Cadbury committee, the Kumara-Mangalam Birla Committee also issued a code of corporate governance for companies in India. Under the chairmanship of Kumar Mangalam Birla, Securities and Exchange Board of India (SEBI) set up a committee to promote and raise standards of corporate governance. This Report was an

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attempt to evolve a Code of governance in Indian companies. The recommendations given by this c o m m i t t e e t r i e d t o d i ff e r e n t i a t e t h e responsibilities and obligations of the board and the management and also gave emphasis to the rights of shareholders in demanding corporate governance. Clause 49 in the Listing Agreement in the year 2000 is the result of the recommendations of the Kumar Mangalam Birla Committee. The recommendations given by this committee were divided into mandatory and nonmandatory recommendations. These recommendations have been made applicable to all listed companies with the paid–up capital of Rs.3 crores and above or net worth of Rs.25 crores or more at any time in the history of the business. The Board of Directors and the management of the company are responsible for putting the recommendations into practice. The Birla Committee's recommendations were mainly focused on two elementary goals of improving the function and structure of company boards and increasing disclosure to shareholders. The committee made following recommendations: l l l l

Regarding board representation and independence with respect to company boards Concerning the function and constitution of board audit committees Regarding disclosure and transparency issues particular with respect to information provided to shareholders. Related to a company's annual report to shareholders should contain a Management Discussion and Analysis (MD&A) section

Recommendations given by this committee were incorporated with country's new code on corporate governance. SEBI revised the clause 49 on the basis of these recommendations. These recommendations were expected to be enforced through the listing agreement on the listed companies for initial and continuing disclosures in a phased manner. They took effect phase between 2000 and 2003. Firstly reforms were applied to newly listed and large companies, then to smaller companies, and finally to the enormous majority of listed companies.


Niyati Chaudhary and Kamlesh Gakhar The companies were required to disclose a report on corporate governance separately in their annual reports, describing the steps they took to comply with the recommendations of the committee. These were expected to enable shareholders to know whether the company in which they invested, stand with respect to specific initiatives taken to ensure robust corporate governance. The committee accorded recognition to the three fundamental aspects of corporate governance that is accountability, transparency and equality of treatment for all stakeholders.

Shareholder rights: Shareholders are permitted to have access to quarterly results, analyst presentations, half-yearly financials and important event reports, reviews of complaints and grievances by non-executive directors. Clause 49's provisions were not expected to be implemented immediately; rather, it offered a phased-in implementation schedule. Specially, firms that were listed on the Bombay (Mumbai) Stock Exchange (BSE) under the listing flag “A� were expected to fulfill by March 31, 2001.

2.3 Enactment of Clause 49, 2000:

2.4 Reserve Bank of India report, 2001:

SEBI approved the Birla committee's key recommendation and integrated them in clause 49 of the Listing Agreement.

Reserve Bank of India made 2 groups - advisory group which worked on the International Financial Standards and Code and second group set up by Reserve Bank was consultative group of Directors of Banks/Financial Institutions. In March 2001, the advisory group on corporate governance attempted to compare the status of corporate governance in India with respect to the internationally recognized best standards. This group suggested improving corporate governance standards in India. In April, 2001 the consultative group of directors of banks and financial institutions had a goal to review the supervisory role of boards of banks and financial institutions. This group worked to obtain feedback on the functioning of the boards regarding compliance, transparency, disclosures, audit committees etc .They made recommendations for making the role of board of directors more effective with a view to diminishing risks and over exposure

The major recommendations focused on the board of directors, audit procedures, and shareholder rights. They have been as under: Composition of the board: 50% of the directors must be nonexecutives and 50% must be executives if there is a full-time chairman. Constitution of audit committee: The committee must have three independent directors and a chairman with financial background. A finance director and an internal audit head are to be special invitees. There should be a minimum of three meetings to be convened annually. Responsibility of the committee is to review the financial performance on a half-yearly/annual basis, appointment/removal/remuneration of auditors, and review internal control systems and their adequacy. Board procedures: Minimum four meetings are to be held each year. A director cannot be a member of more than 10 committees and a chairman cannot serve up on more than 5 committees across all the companies. Directors must mention all the committees of which they are members. Management discussion and analysis report: There should be a report on the financial statement which should include a discussion of industry structure and trends, opportunities and threats, segment performance, analysis of financial performance, future outlook, and risks

and concerns.

2.5 Naresh Chandra Committee: Naresh Chandra committee was appointed in 2002 to examine and recommend the ammendments to the law related to the auditorclient relationships and the role of independent directors. The committee discussed expansively about the statuary auditor-company relationship, rotation of statutory audit firms/partners, process for appointment of auditors and determination of audit fees, independence of auditing functions, measures to ensure that management and companies put onward a true and fair statement of financial affairs of companies, certification of


ŠJournal of Human and Work Management December, 2014, Vol. 2, No.2

financial statements and accounts, setting up an independent regulator and the role of independent directors. In addition, it recommended that it is required that the CEO and CFO of listed companies certify and take responsibility for, the fairness and correctness of their company's annual audited accounts. The committee proposed to study and build upon its report following the benchmarks set by Sarbanes Oxley Law (SOX). This committee further recommended a list of disqualifications for audit assignments, such as: l l l

direct relationship with the company to be audited any business relationship with the client A personal relationship with a director.

2.6 N. R. Narayana Murthy Committee, 2003: By analyzing the compliance of clause 49 by the listed companies, SEBI found that there was a need to amend the clause 49 for protecting the interest of investors. Thus, SEBI constituted a Committee under the Chairmanship of Shri N.R. Narayana Murthy, for reviewing implementation of the corporate governance code by listed companies. The main goal of this committee was to study the role of independent directors, related parties, risk management, directorship and director compensation, codes of conduct and financial disclosures. This committee focused on mandatory recommendations regarding responsibilities of audit committee, quality of financial disclosure, requiring boards to assess and disclose business risks in the company's annual reports. It also projected additional governance reforms and rules, particularly corresponding to the role of the board of directors. Recommendations of this committee were related to the formal training of board members, the elimination of nominee directors, the reinforcement of the responsibilities of the audit committee, improving the quality of financial disclosures and the implementation of policies to protect “whistle blowers� who approach corporate audit committees. 2.7 Clause 49 Amendments: The Murthy Committee particularly considered the role and responsibilities of audit committees.

Faculty of Management Studies, MRIU (ISSN2320-8384)

It recommended that audit committees must have those members who have knowledge of finance. They also affirmed that whistleblowers should have access to the audit committee without first having to inform their supervisors. As a consequence of report submitted by Murthy committee, SEBI made so many changes in Clause 49 in 2004. They recommended amendments in clause 49 regarding corporate boards, audit committees and shareholder disclosure. CEO/CFO certification of internal controls constituted the largest transformation of the governance and disclosure standards of Indian companies. However, these amendments were not implemented till January 1, 2006 primarily due to industry resistance and lack of attentiveness to accept such wide-ranging reforms. Clause 49, as currently in effect, includes the following key requirements: l

l

Board Independence: Boards of directors of listed companies must have a minimum number of independent directors. Where the Chairman is an executive or a promoter or related to a promoter or a senior official, then at least 50% the board should comprise of independent directors; otherwise independent directors should constitute at least one-third of the board size. Independent directors are those who don't have financial association with the company, not related to Board or one level below Board of the company and no former relationship with the Company for the last 3 years. Nominee directors of financial Institutions must be considered as independent director.

Audit Committees: listed companies must have audit committees of the board with a minimum of three directors, two-thirds of whom must be independent and at least one of them must have accounting or financial management experience. The roles and responsibilities of the audit committee are specified in detail such as they should meet 4 times in a year of time gap not exceeding 4 months in a year. The main role of the members of this committee is to review internal audit


Niyati Chaudhary and Kamlesh Gakhar function, obtain outside legal or other professional advice, and review whistleblower program if one exists amongst other things. l

There should be minimum 4 meetings of board of directors in a year. The time gap between the meetings is maximum 3 months.

l

There must be CEO/CFO certification of effectiveness of internal controls. The CEO and CFO of listed companies must certify that the financial statements are fair. They should inform audit committee if they need any significant changes.

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Disclosure: Listed companies must periodically make different disclosures regarding financial and other matters to ensure transparency. The other areas of disclosure include discussion of internal controls adequacy, significant trends, risks, and opportunities in annual report, compensation to directors and accounting treatment. Annual reports of listed companies must carry status reports about compliance with corporate governance norms.

l

Whistleblower policy is optional and the independent directors lose status as “independent� if served 9 years at company. Training of board members and performance evaluation of nonexecutive board members is required.

2.8 Dr. J. J. Irani Expert Committee on Company Law: In 2004, the government constituted an expert committee under the chairmanship of J.J.Irani, with the task of proposed revision of the company Act, 1956 and also enabling easy interpretation by revision of the provisions of law. They worked on the area, to enable adoption of internationally accepted best practices and for protection of interest of stakeholders and investors. l Every company must have at least one director resident in India. l Presence of Independent directors on the board committees for improving corporate governance. l Permission of meeting by electronic means. 2.9 C o r p o r a t e g o v e r n a n c e v o l u n t a r y guidelines, 2009:

After receiving various suggestions from stakeholders and on the basis of various committees' report, Ministry of corporate affairs issued corporate governance voluntary guidelines, 2009. This covered various issues related to corporate governance. The ministry provides various guidelines for good practices which may be voluntary adopted by public and private companies. 2.10

The Companies Bill, 2012:

This Bill was introduced and passed in the Lok Sabha on 18th December 2012. Its enactment will allow corporate sector in India to have a modern legislation for growth and regulation. The Bill is all set to reinstate the 55 year old Companies Act, 1956. The circulation of the new act is a step towards globalization and is an attempt to meet the varying environment showing the technological and legal developments. l Independent Director: Every LISTED Public Company shall have at least one-third of the total number of directors as independent directors. Independent directors to will have office for a term of 5 successive years and are not liable to retire by rotation. l Appointment & Qualification of directors: Now, Companies can appoint maximum 15 directors. More than 15 directors may be appointed only after passing a special resolution in AGM. There is no need for obtaining central government approval for the same. l Prescribed classes of companies have to appoint at least 1 woman director in the board. l Every company shall have at least 1 director who has stayed in India for at least 182 days or more in the previous calendar year. l Company cannot give loan to a director. l

Audit & auditors: In case of removal of auditors before expiry of the term, the Bill provides for special resolution and no requirement of corporate governance approval and no prior special notice. As per this bill, auditor has to attend every general meeting. A company's auditor shall not offer, directly or indirectly, the particular services to the company, its holding and subsidiary company.


©Journal of Human and Work Management December, 2014, Vol. 2, No.2

l

l

Meetings: l The first board meeting of the company must be held within 30 days of incorporation of the company. Minimum 7 days notice is required to be given for a board meeting. The notice may be sent by electronic means to every director at his corresponding address registered with the company. l A board meeting may be called at a shorter notice in case of urgent business. At least one independent director must be present at such meeting. Committees of Board of Directors: This is mandatory for listed companies and other prescribed classes of companies to appoint committees such as: Audit committee, Stakeholders Relationship Committee, Nomination and Remuneration committee.

3. Developments in UK: In England, Bank of Credit and Commerce International (BCCI) and the Barings Bank scandals enlightened the corporate governance. These corporate failures pointed to the absence of appropriate structure and objectives of top management. The Committee of Sponsoring Organizations (COSO) was created to suggest adequate measurers to check the scandals in future. In 1992, the report recommended a control framework. It pointed towards people's awareness and understanding on the issue and resolved that something ought to be done to stop the rot of corporate misdeeds. 3.1 Cadbury committee on Corporate Governance – 1992: This committee was set up by Financial Reporting Council, London. The Chairperson of this committee was Sir Adrian Cadbury. The main objective of this committee was to raise the standards of corporate governance and the level of confidence in financial reporting. The committee examined the accountability of the board of directors to shareholders and to society. In 1992, Cadbury committee submitted “Code of Best Practices” report. The report suggested the way to attain the balance between the power and accountability of the board of directors. The recommendations given by this committee were not mandatory. The recommendations were

Faculty of Management Studies, MRIU (ISSN2320-8384)

related to the board of directors, non-executive directors, executive directors and those on reporting and control. The main noteworthy recommendation was the setting up of an audit committee with independent members. The important recommendations were separation of the role of CEO and Chairman. This committee recommended the selection process for Nonexecutive directors. 3.2 The Paul Ruthman Committee: This committee was setup to deal with the controversial point of Cadbury report. This committee was chaired by Ron Hampel. This committee restricted the area of the reporting requirement to internal financial controls. The notable recommendation by this committee was the extension the directors' responsibility related to business risk assessment and minimizing the risk of fraud. 3.3 The Greenbury Committee, January 1995: The basic objective of this committee was to identify good practices by the Confederation of British Industry (CBI) and to prepare a code of such practices. The committee aimed to provide the proper allocation of responsibility for determining directors' remuneration, the appropriate reporting to shareholders and greater transparency in the process. This committee produced the Greenbury Code of Best Practice. This covered mainly four elements of corporate governance - Remuneration Committee, Disclosures, Remuneration Policy and Service Contracts and Compensation. The Greenbury committee recommended that UK companies should implement the code. The companies should create annual compliance statements, to ensure that the best practices are followed. It was set up to examine the remuneration of the directors. 3.4 The Hampel Committee, November 1995 : This committee was set up to promote high standards on Corporate Governance both to protect investors and to enhance the position of companies listed on the London Stock Exchange. This committee introduced combined code which was the combination of recommendations of Cadbury Committee and Greenbury Committee. This committee had the following recommendations:


Niyati Chaudhary and Kamlesh Gakhar I) The auditors should report on internal control confidentially to the directors. ii) The directors of the company must maintain and assessment all controls. iii) Companies should time to time assess their need for internal audit function and control. 3.5 The Combined Code: The provisions contained in the Combined Code were that the boards should have a sound system of internal control to safeguard shareholder's investments and the company's assets. The directors must appraisal the effectiveness of the internal control covering the financial, operational and compliance and risk management. They should inform the same to shareholders that they have done so. 3.6 The Turnbull Committee, 1999: The Turnbull Committee was set up by the Institute of Chartered Accountants in England and Wales (ICAEW) to provide guidance to aid companies in implementing the requirements of the Combined Code relating to internal control. It suggested that the board should consider the requirement for carrying out an internal audit annually, where companies do not have an internal audit function.

SOX is also known as the 'Public Company Accounting Reform and Investor protection Act of 2002'. This legislation recommended the auditors' independence, enhancement of financial disclosures and corporate responsibility. This act recommended the formation of an independent audit committee. It also recommended that each annual report contain an internal control report. Conclusion Corporate governance reforms are a big achievement for the companies listed in India. This will help to protect the stakeholder's interest. In the period of 2000-04, three committees were established: the Kumar Mangalam Birla Committee, the Naresh Chandra Committee and J.J. Irani. SEBI enacted Clause 49 of the Listing agreement on the basis of recommendations given by the Birla committee. In the evolution of corporate governance reforms in India, Clause 49 is landmark. It is mandatory for the listed companies to comply with Clause 49 and the stock exchange has the responsibility to verify the same.

4. Development is USA: Corporate governance came into more limelight with the incident of the Watergate scandal in United States. Corporate scandals and frauds led to the development of the Foreign and Corrupt Practices Act of 1977. This act enclosed specific provisions concerning the establishment, maintenance and review of systems of internal control. In 1985, the Tradway Commission was formed to recognize the main reason of misrepresentation in financial reports and to recommend ways of reducing incidence thereof. The tradway report recommended the following: l Need for a proper control environment l Independent audit committees l Publishing reports on the effectiveness of internal control l To build up an integrated set of internal control criteria to enable companies to improve their control. 4.1 The Sarbanes Oxley Act (SOX), 2002:

Table 1: Summary of Corporate governance Reforms in India. Year

Reforms in India

1992

Formation of SEBI (Securities and Exchange Board of India)

1996

CII CG taskforce CII (Confederation of Indian Industry), India‘s largest industry and business

1998

association comes up with the first voluntary code of corporate governance SEBI sets up a committee for good corporate governance under

1999

Kumar

Mangalam Birla SEBI approves the committees key recommendation and integrates them in

2000

clause 49 of the Listing Agreement--Enactment of Clause 49 RBI – Report of the advisory group Financial Standards and Code

2001

Banks/Financial Institutions on Corporate Governance Establishment of the

2002

- Standing Committee on International and consultative Group of Directors of

Naresh Chandra committee

to examine various

governance issues SEBI constituted a Committee under the Chairmanship of Shri N.R.

Narayana

2003

Murthy Committee

2004

Clause 49 Amended, Dr. J j irani Expert Committee on Company Law

2006

Revision of clause 49 (Clause 49 amendments Implemented)

2008

Introduction of the Companies bill

2009

MCA Voluntary -CG Guidelines

2011

Reintroduction of revised Companies bill after Satyam scandal

2012

Amendment related to Corporate Governance Guidelines in Company Bill, 2012


©Journal of Human and Work Management December, 2014, Vol. 2, No.2

References: l

CII Sets Up Task Force on Corporate Governance, Business Standard, Jan. 12, 2009. l Cadbury Committee Report: A report by the committee on the financial aspects of corporate governance. The committee was chaired by Sir Adrian Cadbury and issued for comment on (27 may 1992). Also retrieved from http://www.jbs.cam.ac.uk/cadbury/rep ort/index.html website access at 27.2.2012, 7.10 p.m. l Confederation of Indian Industry, (March 1998) Desirable corporate Governance: A Code (Based on recommendations of the national task force on corporate governance, chaired by Shri Rahul Bajaj). l Companies Bill (2009), available at http://www.mca.gov.in/Ministry/acts_bills. html; see also Ministry of Corporate Affairs. l Department of Company Affairs (2000) Report of the taskforce on Corporate Excellence through Governance ( on the basis of report submitted by a committee chaired by Dr P L Sanjeeva Reddy & by Kumar Mangalam Birla Committee on corporate Governance , Chartered Secretary (March 2000) l Friedman, Milton and Rose Friedman (1981), Free to choose: A personal statement, Avon Publisher of Bard, Camelot and Discus books, New York , P.xvi l Greenbury Committee Report (1994), investigating board members' remuneration and responsibilities l Greenbury Report (1995), “Directors’ Remuneration — Report of a Study Group”, Gee Publishing. l Hampel Committee Report, “Committee on Corporate Governance”, 1998. l Jamshed J. Irani et al., Expert Committee on Company Law, Report of the Expert Committee to Advise the Government on the New Company Law 3 (2005), available at www.primedirectors.com/pdf/JJ%20Irani%20 report-MCA.pdf. l Kumar Mangalam Birla Committee Report, on Corporate Governance, 2000. l Ministry of Corporate Affairs, Government of India, Corporate Governance Voluntary Guidelines 2009 (December 2009), available at

Faculty of Management Studies, MRIU (ISSN2320-8384)

http://www.mca.gov.in/Ministry/latestnews /CG_Voluntary_Guidelines_2009_24dec2 009.pdf l Naresh Chandra Committee (2002), Report on Corporate Governance. l N.R. Narayana Murthy et al., the Securities and Exchange Board of India, Report of the SEBI Committee on Corporate Governance 1.6(2003), available at http://www.sebi.gov. in/commreport/corpgov.pdf. l Naresh Chandra, Report of the CII Task Force on Corporate Governance (November 2009), available at www.mca.gov.in/Ministry/latestnews/Draft_Re port_NareshChandra_CII.pdf [hereinafter CII 2009 Report]. l Reports on Corporate Governance, (2004), Economic India Info Services. Academic Foundation. l SEBI, Issues Under Clause 49 and Proposed Amendments 1 (2003), available at www.sebi.gov.in/commreport/clause49.html. l Securities and Exchange Board of India (2002) Report on SEBI Committee on Corporate Governance (under the chairmanship of Shri N R Narayanamurthy) l SEBI Committee on Disclosures and Accounting Standards, Discussion Paper on Proposals Relating to Amendments to the Listing Agreement (Sep. 2009), available at www.sebi.gov.in/commreport/amendproposal .pdf. l Sarbanes Oxley Act of 2002 passed by the congress of the United States of America on 23rd January, 2002. l Shri Kumar Mangalam Birla et al., the Securities and Exchange Board of India, Report of the Kumar Mangalam Birla Committee on Corporate Governance (1999), available at http://www.sebi.gov.in/commreport/corpgov.html. l Shleifer, A and Vishny, RW (1997), “A Survey of Corporate Governance”, The Journal of Finance, 50(2), pp. 737. l Turnbull Committee Report (1998), “Combined Code of Best Practices in Corporate Governance”. l w w w. d e l o i t t e . c o m / a s s e t s / D c o m -India/.../2012/RA-25-2012.pdf http://www.thehindu.com/business/Industry/co mpanies-bill-passed/article5003777.ece


ŠJournal of Human and Work Management December, 2014, Vol. 2, No.2

Faculty of Management Studies, MRIU (ISSN2320-8384)

Atmospherics: Will it work for Indian apparel retail stores Ubba Savita * and Mukesh Malik** *Assistant Professor, Haryana School of Business, Guru Jambheshwar University of Science and Technology, Hisar. **Assistant Professor, Faculty of Management Studies, Manav Rachna International University, Faridabad.

ABSTRACT: Iretail stores with high attractive power are the need of hour for the retailers to increase the popularity of store and footfall thereby stimulating the sales. As other marketing tools become obsolete in the competitive environment, atmospherics are likely to play a crucial role in the unending search for differential advantage. Past researches, have shown that there is significant association between retail atmospherics and customer purchase intention. Hence, the purpose of this study is to examine the influence of store atmospheric stimuli on customer purchase intention towards apparel stores. Five independent variables such as display and layout, music, lighting, cleanliness and participant factors were selected. For this study, 114 respondents from NCR were chosen. Regression analysis was carried to examine those atmospherics which can stimulate customer purchase intention towards apparel stores. Findings indicated that participant factor has the greatest impact on customer purchase intention. Key words: retail atmospherics, purchase intention.

Introduction A traditional store that solely focuses on selling products hardly survives in this modern world. People demand more than just a product while shopping in a store. In this 21st century customers' hunger for comfortable environment, nice atmosphere, and creative design of the store is never ending. Hence, it is indispensible for retailers to come up with stores that have highly attractive attributes to increase popularity of store and footfall, thereby stimulating the sales. As other marketing tools become neutralized in the competitive battle, atmospherics is likely to play a growing role in the unending search of firms for differential advantage. Atmospherics refers to the design of an environment via display and layout, lighting, cleanliness, music and participant factors. Store atmospherics is a useful tool to entice and retain valuable customers and investigate the purchase intention. Atmospherics are present in every buying situation developed casually or organically (Kotler, 1973). Atmospherics of the store is key element in forming consumers' purchasing attitude in consumer decision process (Pan et al. 2008). Store atmospherics is believable to influence customer purchase

intention. Numerous research and studies conducted overseas prove that store atmospherics affect customer purchase intention. Thus researchers of this study intend to find out if store's display and layout, music, lighting, cleanliness, and participant factors will bring effect on customer purchase intention in Indian setting also. A Review of the Pertinent Literature Review of various research papers reveals relevant findings that prove the positive effect of atmospherics on customer purchase behavior and intentions. Atmospherics is the effort to design buying environments to produce specific emotional effects in the buyer that enhance his product probability (Kotler, 1973).Various forms of retail atmospherics are putting an effort in increasing a good shopping experience for the consumers. Akhter et al. (1994) tests the effects of retail store environments on brand judgments and proves empirically the importance of atmospherics. Many studies describe the interrelationships among retail environment, self congruity and retail patronage and show the positive effect of store environment on store performance (Sirgy et al., 2000; Kumar and Karonde, 2000). On the other hand, some


Ubha Savita and Mukesh Malik consumers also perceive the store environment as a manipulative tool used by the retailers (Lunardo and Mbengue, 2011). Turley and Milliman (2000) focus on effects of facility based environmental cues or atmospherics on purchase intention, and tells that shopper respond to an atmosphere with one of two responses – approach or avoidance whereas Slatten et al., (2009) discusses three atmospherics constructs which are ambience, interaction and design. The study also reveals that design and interaction are linked with customer's feelings of joy. The retail environment is an important element in defining customer purchase intention where it describes store's personality by considering its perceived effectiveness, as well as functional quality (Darden and Babin, 1994). Atmospherics stimulate customer's perceptual and emotional responses and ultimately affect their purchasing intention (Levy and Weitz, 2003). Customers walk around with many wants and buying intentions that don't materialize, until situational factors, such as motivating atmospheres influence the consumers in favor of purchase. Grossbart and Hampton (1990) examine the relation between responsiveness and environmental dispositions and suggest that atmospheric responsiveness is related to experience reflecting customer's openness to environmental factors, stimulation and distraction and adaptive to physical circumstances. Backstrom and Johansson (2006) point out that retailers use even more advanced techniques in order to create compelling in-store experiences to their consumers. Feedback from consumers reveal that in-store experiences to a large extent are constituted by traditional values such as behavior of the personnel, a layout that facilitates the store visit and identifies seven key marketing activities that were found to distinguish high and low performance retailers with respect to in-store promotion (Fam et al. 2011) There are various dimensions of customer satisfaction which show the relation of store attributes and their relevance in store selection process (Manrai et al. 2007; Ghosh et al. 2010; Ballantine et al. 2010). It can be easily said that the service has significant effects on customer satisfaction and loyalty. The research shows that

good employees' service can be more effective for increasing the satisfaction and loyalty of customers with a low perception of the atmospherics compared to those with a higher perception (Ha and Jang, 2010). Atmospherics has an impact on the customer purchase intention which has been proved by various studies. But these results have been proven for the Western countries. Though retailing has its roots in India for agies, however the modern day retailing is still in nascent stage. There is a requirement to find whether there is any impact of atmospherics on customer purchase intention in Indian environment Objective of the Study The objectives of the study are : l to understand the elements in various factors under retail atmospherics (participant factors, music, display and layout, lighting, cleanliness) l to study the way in which apparel retailers use the above factors to influence customer purchase intention. Hypothesis of the Study H1- The better the display and layout, more is the customer purchase intention (CPI) of customers towards apparel stores. H2 – The more soothing the music, more is the CPI of customers towards apparel stores. H3 – The more the lighting, more is the CPI of customers towards apparel stores. H4- The more the cleanliness, more is the CPI of customers towards apparel stores. H5 – Better the participant factors, more is the CPI of customers towards apparel stores. Research Methodology The present study is conducted in National Capital Region (New Delhi, Faridabad, Gurgaon and Noida). A total of 114 respondents are selected from these cities using convenience sampling. A self-administered questionnaire is used as the data collection instrument. The questionnaire is adopted from Han et al. (2011). A likert type five points scale is used ranging from strongly disagree to strongly agree. The questionnaire is classified into two sections- first section consists of constructs


©Journal of Human and Work Management December, 2014, Vol. 2, No.2

Faculty of Management Studies, MRIU (ISSN2320-8384)

Mean

Std. Deviation

Standardized Beta

t-Value

4.0211

0.50088

-0.043

-0.419

Music

3.5509

0.83869

-0.058

-0.706

Lighting

3.9

0.62415

0.243

2.563*

Cleanliness

4.314

0.57251

0.184

1.892

Participant

4.1126

0.5107

0.416

4.644**

Customer Purchase intention (CPI)

Table 1: Regression Analysis Constructs

Variables

3.9982

0.67391

R2 Adjusted R2 F-Value**

0.411 0.384 15.097

1) The corridors in the store allow a good circulation. 2) The product organization allows me to identify the location of products in the store easily. 3) The locations of each department in the store are important. 4) Store display window allows me to see displayed products clearly. 5) The clear shelves information increases my well being and comfort.

and Layout

Display

1)The rhythm of the background music is adequate. 2) The volume of the background music is adequate. 3) The type of music which is played at the store is the kind of music that I usually listen to. 4) The background music is pleasant. 5) The existence of background music increases my well being and comfort. 1) The light in the areas of products allows me to evaluate the quality of the products (e.g., clothes, dress, blouse, trouser, etc.). 2) The light at the corners of the store (more hidden areas) is sufficient. 3) The overall light in the store is sufficient. 4) Different lighting used in each area inside the store is important. 5) The bigger the clarity increases my well being and comfort. 1)

The store’s floor is clean.

2) The shelves are clean. 3) The store is clean. 4) The products are tidy and not damaged. 5) The fact that the store is clean and tidy increases my well being and comfort. 1) The appearance of employee is important. 2) The politeness of employee is important. 3) Communication between employee and customers is important. 4) The employees provide good service quality to me. 5) Crowding shows attractiveness of the store. 6) The fact of having a reasonable number of customers in the store increases my well being and comfort 1) I would like to purchase in the store. 2) I would like to shop longer in the store. 3) I would like to visit the store again. 4) I would like to tell my family and friends about the store. 5) I would like to repurchase in the future. Model summary

Source: Field Survey. Note: * Significant at 0.05 level. ** Significant at 0.01 level. Customer purchase intention is dependent variable

that relate to five dimensions of atmospherics, namely - display and layout, music, lighting, cleanliness and participant factors. In the second section, information corresponding to customer purchase intention towards apparel stores based on store atmospheric stimuli stated in first section is collected. All respondents' responses and personal information are kept confidential. Results and Discussion The data collected is coded and tabulated, keeping it in context with the objective of study. Each atmospheric variable is represented by five constructs except participant variable that has six constructs. Table-1 highlights the mean and standard deviation of five atmospheric variables and customer purchase intention. Cleanliness variable which includes constructs like clean store and shelves scores the highest mean i.e. respondents are more agreeable; hence the customers look for clean stores so that while touching and looking at the products, their hands do not get dirty. While music variable which includes constructs like rhythm, volume, type of music, scores the lowest mean; the respondents do not worry much about the type of music that is being played in the store. Also music variable scores the highest standard deviation (0.838) which means that there were more variations in the responses about the music variable as

different people like different type of music. Display & layout variable scores the lowest standard deviation (0.500) which shows that less variation was recorded in the responses of various constructs of this variable like circulation in corridors, clear shelves, window display etc. thereby highlighting that all the stores take good care of display and layout that ultimately provides freedom to customers to roam and catch a glance of products available at the store. Multiple regression analysis is applied to study the cause and effect relationship among the variables. Customer purchase intention (CPI) is treated as dependent variable and atmospheric factors including display and layout, music, lighting, cleanliness and participant factors as the independent variables. The analysis is of the form: CPI= b0 + b1 (display and layout) + b2 (music) + b3 (lighting) + b4 (cleanliness) + b5 (participant factors) Table-1 demonstrates the results of regression analysis. F-value for this model is 15.097 with 0.000 significance level where as the R2 is 0.411. Participant factors and lighting have shown significant positive relationship with customer purchase intention; whereas cleanliness has nonsignificant positive relationship with customer purchase intention. On the other hand display & layout and music have non-significant negative relationship with customer purchase intention. Results show that participant factors have the highest impact on customer purchase intention followed by light. The following paragraphs explain the hypotheses on the basis of regression results. Results of the study show a negative but nonsignificant relationship between display and layout and customer purchase intention. The value of â is -0.043 (p>0.05). Therefore, display and layout of a store doesn't play a significant role to influence customer purchase intention. Designation of display and layout normally lead to comfortable look and search for products in the store. However that does not influence CPI. All the stores are taking focusing on the display and layout, then it comes out to be a factor that is not differentiating when it comes to CPI. However hypothesis H1- The better the display and layout,


Ubha Savita and Mukesh Malik more is the CPI of customers towards apparel stores is rejected on the basis of the study. Many researches show positive effect of music on customer purchase intention but from the result of this study, it has been found that there is a negative relationship between music and customer purchase intention but the significance value shows p>0.05 (â= -0.058) which is nonsignificant. Therefore, playing background music is not contributing to enhance the customer purchase intention. The hypothesis H2 -The more soothing the music, more is the CPI of customers towards apparel stores is rejected. This is a factor that shows the highest standard deviation thus different people like different type of music. The retailers need to comfort the negative effect by music on CPI by understanding the type of people visit the store and the type of music liked by them. Understanding the music requirements of customers will help increase the CPI. There is a positive relationship between lighting and customer purchase intention with the significant â value 0.243 which is significant at 0.05 level. Customers tend to rely on the lighting of store to determine the quality and appearance of products before buying it. The result for this factor shows that hypothesis H3 – The more the lighting, more is the CPI of customers towards apparel stores is accepted. Sufficient lighting is important for customers as it will affect customers in determining the product quality and form perception on store (Areni & Kim, 1994). Many customers will purchase on a product if the quality reaches their expectations. There is a positive cause and effect relationship between cleanliness and customer purchase intention however â (0.184) which is nonsignificant at 0.05 level (p>0.05). The hypothesis H4- The more the cleanliness, more is the CPI of customers towards apparel stores is rejected. Researchers argue that customers focus more on cleanliness of store rather than other atmospheric elements. When visiting a store, customers will not only look at the display product or layout but also the cleanliness of store because it also contributes to other ideals like health. Cleanliness acts as a hygienic factor which has effect on customer's visit in the store so the positive relationship shows that without a clean

environment, customers would not feel comfortable however as all the stores are taking good care of cleanliness, this does not effect the CPI of the customers. From the result of study, a significant value of p<0.05 is obtained for â which shows that there is a positive relationship between participant factors and customer purchase intention. Hence hypothesis H5 – More the participant factors, more is the CPI of customers towards apparel stores is accepted. Participants are all those who participate in customer purchase process like employees and other customers. Grewal and Sharma (1991) suggest that store employee will influence customer buying emotion and satisfaction. Again, customers will be satisfied with the service of employees and will further purchase the product in store, if employees pose a friendly approach and help customers in reaching to a purchase decision while serving the customers. Furthermore, customers will prefer a high number of crowds in a store. They will form a perception that the particular store had something special or attraction that attract customers to come to the store and spend time in the store. Conclusion Atmospherics has become a differentiating factor in retail as various parameters are strongly related to shoppers' retail choice. So, the retailers are taking into consideration the usefulness of the retail atmospherics in a broader way. The changes in the industry represent a new wave of retail atmospherics. Today's business paradigm reveals that retailers have tried almost every possibility in order to capture more consumers and thus increase their market share. This paper is an attempt to understand the retailers' use of atmospherics effecting customer purchase intention towards apparel stores in NCR. Nowadays, there are a variety of apparel stores and tremendous increase of buyers' power. Retailers have to create the pleasure and comfort in the atmosphere for customers in order to increase the purchase intention when they visit the store. Retailers should have the knowledge of customer purchase intention to help them in identifying customers' purchase behavior on their products and services, their willingness to


©Journal of Human and Work Management December, 2014, Vol. 2, No.2

revisit the store, and deliver positive word-ofmouth to fellow customers and friends. By using such knowledge, retailers will have more understanding on customers' preferences to build an appropriate store atmosphere. A well-defined store atmosphere will help to entice and retain customers and create positive impact on the customer purchase intention by minimizing cost, time, and effort. The study has shown that participant factors and lighting have positive and significant effect on customer purchase intention. Cleanliness is having a positive but non-significant effect on customer purchase intention. Music and display & layout have shown negative however nonsignificant effect on customer purchase intention. The results confirm that the participant and lighting factors have shown positive significant effect on customer purchase intention. The retailers need to note that in the world of stiff competition, with new stores coming up everyday, these two factors can be used effectively. The apparel retailers need to invest in employing skillful frond end employees who can help in increasing the purchase intentions of the footfalls entering the store. These are the people who can influence the people and make them decisive about their purchase decisions. Another atmospheric factor that affects the CPI is lighting. Lighting is one factor that can make the apparels look more attractive and appealing. The retailers should use lighting in store in such manner that the apparels on display becomes the limelight. If the apparels look more attractive and of high quality, the customers purchase intention could be increased. Three atmospheric factors that have shown nonsignificant cause and effect relationships with CPI are display and layout; music and cleanliness. Surprisingly display and layout and music have shown negative effect on CPI, however, this effect is insignificant. The retailers in India need to know the display and layout and music requirements of the people so that this negative effect could be converted into positive significant effect. It is seen that the apparels are

Faculty of Management Studies, MRIU (ISSN2320-8384)

not being displayed properly in the store. The retailers should creatively use the layout and display so that more and more people like to pay visit and spend time in store. The music can be influential in creating a positive mood among the customers. The retailers should understand the music requirements of the people. Cleanliness is one factor that may not be having a significant effect on CPI. However, ignoring that factor can turn out to be deadly. The people expect the stores to be neat and clean. This may not be a motivating factor but can be a dis-satisfactory among the people. The competition is high and creative use of the atmospheric factors by the retailers can help to increase the customer purchase intention. References Akhter, S.H., Andrews, J.C., and Durvasula, S. (1994), “The Influence of Retail Store Environment on Brand- Related Judgements” Journal of Retailing and Consumer Services, Vol. 1, No. 2, pp. 67-76. Backstrom, K. and Johansson, U. (2006), “Creating and Consuming Experiences in Retail Store Environments: Comparing Retailer and Consumer Perspectives” Journal of Retailing and Consumer Services, Vol. 13, No. 6, pp. 417-430. Ballantine, P.W., Jack, R., and Parsons, A.G. (2010), “Atmospheric Cues and Their Effect on the Hedonic Retail Experience” International Journal of Retail & Distribution Management, Vol. 38, No.8, pp. 641-653. Darden, W.R. and Babin, B.J. (1994), “Exploring the Concept of Affective Quality: Expanding the Concept of Retail Personality” Journal of Business Research, Vol. 29, No. 2, pp. 101 -109. Dennis, C., Newman, A., Michon, R., Brakus, J.J. and Wright, L.T. (2010), “The Mediating Effects of Perception and Emotions: Digital Signage in Mall Atmospherics”, Journal of Retailing and Consumer Services, Vol. 17, No. 3, pp. 205-215. Fam, K.S., Merrilees, B., Richard, J.E., Jozsa, L., Li, Y., and Krisjanous, J. (2011), “In-Store Marketing: a Strategic Perspective” Asia Pacific Journal of Marketing and Logistics, Vol. 23, No.2, pp. 165-176.


Ubha Savita and Mukesh Malik Fowler, K., and Bridges, E. (2010), “Consumer Innovativeness: Impact on Expectations, Perceptions, and Choice Among Retail Formats” Journal of Retailing and Consumer Services, Vol. 17, No.6, pp. 492-500. Gauri, D.K., Trivedi, M. and Grewal, D. (2008), “Understanding the Determinants of Retail Strategy: An Empirical Analysis” Journal of Retailing, Vol. 84, No.3, pp. 256-267. Ghosh, P., Tripathi, V. and Kumar, A. (2010), “Customer Expectations of Store Attributes: A Study of Organized Retail Outlets in India” Journal of Retail & Leisure Property, Vol. 9, pp. 75-87. Grewal, D. and Baker, J. (1994), “Do Retail Store Environmental Factors Affect Consumers’ Price Acceptability? An Empirical Examination” , Vol. 11, No. 2, pp. 107-115. Grossbart, S. and Hampton, R. (1990), “Environmental Dispositions and Customer Response to Store Atmospherics” Journal of Business Research, Vol. 21, No.3, pp. 225-241. Ha, J. and Jang, S.C. (2010), “Effects of Service Quality and Food Quality: The Moderating Role of Atmospherics in an Ethnic Restaurant Segment”, International Journal of Hospitality Management, Vol. 29, No.3, pp. 520-529. Han, C. R., Li, K.S., Yen, L. B. and Fei, Y. S. (2011), “The influence of store atmosphere on customer patronage intention towards apparel stores in Malaysia”, Journal of Retailing, Vol. 87, No.4, pp. 206-218. Kotler, P. (1973), “Atmospherics as Marketing Tool” Journal of Retailing, Vol.49, No.4, pp.48-64. Kumar, V. and Karande, K. (2000), “The Effect of Retail Store Environment on Retailer Performance”, Journal of Business Research, Vol. 49, No.2, pp. 167-181.

Lunardo, R. and Mbengue, A. (2011), “When Atmospherics Lead to Inferences of Manipulative Intent: Its Effects on Trust and Attitude”, Journal of Business Research, article in press. Retrieved from www.sciencedirect.com/science/journal/ on 04-07-2011 at 3:40 P.M. Manrai, L.A. and Manrai, A.K. (2007), “A Field Study of Customers' Switching Behavior for Bank Services” Journal of Retailing and Consumer Services, Vol. 14, No.3, pp. 208-215. Pan, F.C., Su, S.J., and Chiang, C.C. (2008), “ D u a l A t t r a c t i v e n e s s o f Wi n e r y : Atmospheric Cues on Purchasing” International Journal of Wine Business Research, Vol. 20, No. 2, pp. 95-110. Sirgy, M.J., Grewal, D. and Mangleburg, T. (2000), “Retail Environment, Self -Congruity, and Retail Patronage: An Integrative Model and a Research Agenda”, Journal of Business Research, Vol. 49, No. 2, pp. 127-138. Slatten, T., Mehmetoglu, M., Svensson, G., and Sværi, S. (2009), “Atmospheric Experiences That Emotionally Touch Customers: A Case Study from a Winter Park”, Managing Service Quality, Vol. 19, No. 6, pp. 721-746. Smith, D. and Burns, D.J. (1996), “Atmospherics and Retail Environments: the Case of the Power Aisle” International Journal of Retail & Distribution Management, Vol. 24, No. 1, pp. 7-14. Turley, L.W. and Milliman, R.E. (2000), “Atmospheric Effects on Shopping Behavior: a Review of the Experimental Evidence” Journal of Business Research, Vol. 49, pp. 193-211.


ŠJournal of Human and Work Management December, 2014, Vol. 2, No.2

Faculty of Management Studies, MRIU (ISSN2320-8384)

Organisational Behaviour and Performance of Women employees with PTSD and its effects on employee turnover First author:

Prof. Pooja Mohanty Assistant Professor English & Business Communication School of Management KIIT University E-mail: pooja.mohanty@ksom.ac.in, poojamoh@hotmail.com

Second author: Prof. Debiprasad Das Assistant Professor OB & HR School of Management KIIT University E-mail: debiprasad.das@ksom.ac.in

ABSTRACT: In the present era, the role of women in organizational growth is tremendous. But violence against women has also had a considerable growth. An attempt is made to bridge the research gap between the psychologically or emotionally tortured women and their organisational behaviour and performance and to gauge its effects on the turnover of the organization. A person experiencing PostTraumatic Stress Disorder (PTSD) often faces a number of chronic psychological ailments. The purpose of this study, hence, is to bring about a prolific understanding of the work-productivity of women employees with PTSD and the impact of such employees' condition (performance) on the company turnover. An attempt is also made to find the desired solution to this problem as a step towards the psychological well-being of working women and thereby to negate its ill effects, if any, on employee turnover. Keywords: Organizational behaviour, PTSD, women employees, performance, employee turnover

Introduction Torture inflicted upon a person, leaves behind a perennial impression on the mind of the victim. This impression becomes, in the course of time, a part of the sustained system of belief of the concerned individual and later becomes a compulsive part of the personality of the individual, which can be cured through certain treatments (Basoglu, Paker, Ozmen, Tasdemir, Sahin, 1994). Psychological treatments available for torture survivors include psychodynamic approaches, insight therapy, testimony method, cognitive therapy, and cognitive –behavioural treatment, etc. (Basoglu and Aker, 1996). Women, since the early ages, have been continuously subjected to one or the other type of torture. It is sometimes physical and at other times, emotional or psychological. According to various studies made, the trauma resulting from the torture takes its toll in multiple aspects of the life and personality of the concerned. A series of changes take place in the person's approach to life and in the perception of the incidents. This rigorous metamorphosis results in PostTraumatic Stress Disorder (PTSD) (Basoglu et

al, 1994; Basoglu and Paker, 1995; Basoglu et al, 1996).This affects the approach of the victim towards his/her work and life in general. Hence, a proper treatment is necessary to enable the victim lead a near-normal life (Vesti, Kastrup, 1992; Skylv, 1992; Cooper and Clum, 1989). India has the world's largest number of professionally qualified women in the world. It has more working women than any other country in the world. This includes female workers at all levels of skill- from the surgeon and the airline pilot to bus conductors and menial labourers (according to an E-Review in JBMA, by the Team from Larsen & Tourbo Limited, 2009). Irrespective of the number of working women, the number of cases relating to torture, whether physical, emotional or psychological is ample. A number of studies have been made on this since 1980's. These are carried out to study the psychological consequences of different types of torture. These studies (Allodi & Cowgill, 1982; Rasmussen & Lunde, 1980; Kjaersgaard & Genefke, 1977; Cathcart et al., 1979; Lund et al., 1980; Abildgaard et al., 1984; Domovitch et al., 1984; Peterson et al., 1985; Peterson & Jacobsen,


Pooja Mohanty and Debiprasad Das 1985; Allodi et al., 1985; Hougen et al., 1988; Jensen et al., 1982; Mollica et al., 1987; Paker et al., 1992; Beebe, 1975; Tennant et al., 1986; Kluznik et al., 1986; Miller et al., 1989) have brought about a significant exposure to the understanding of the condition of the victims. Numerous similar studies have been made in this area. Yet, there are still a few questions unresolved. Is a person under this state of mind, capable of leading a near-normal life and how does this affect her work-life? Is she capable of carrying out her work properly? If not, what reformatory step/steps could be taken towards the improvement of the condition she is in? A research conducted recently found that the Performance of an organization is negatively and insignificantly associated with employee turnover, workload, work stress (which could be the result of various factors including PTSD), salary, and family to work conflict. The result of the research study provided evidences of a negative relationship between the dependent variables of organizational performance with the Independent variables like, employee turnover, workload, work stress, salary, family to work conflict, etc., (Tariq, Ramzan and Riaz, 2013). DEFINITION: Psychological torture: This is the creation of extreme fear in a position of uncontrollability. Physical torture is almost invariably accompanied by psychological torture, or the experience of extreme fear. Not infrequently, psychological torture occurs in the absence of physical torture. Examples are threats to oneself or one's family, mock executions, sexual verbal assaults, abuse with excrement, forced nudity.

or more persons acting alone or on the orders of any authority to force another person to yield information, to make a confession, or for any other reason” (Basoglu, Marks, 1988). In the Article 1of the Declaration on the elimination of violence against women in UN General Assembly resolution 48/104 of December, 1993, the meaning of the term, "violence against women" means any act of gender-based violence that results in, or is likely to result in, physical, sexual or psychological harm or suffering to women, including threats of such acts, coercion or arbitrary deprivation of liberty, whether occurring in public or in private life (United Nations, General assembly, Distr. Generasl, A/RES/48/104, 23 February 1994). The meaning of torture is anguish of body or mind; the infliction of intense pain or to punish; coerce, or afford sadistic pleasure. With time, the definition of torture has also undergone refinement. l The physical and mental suffering deliberately inflicted upon a human being by any other human being. l The infliction of suffering, upon anyone for any purpose- or for no purpose (Kanchan, Mohan Kumar, Pradeep Kumar, and Yoganarasimha, 2007). The Tokyo Declaration of the World Medical Association in 1975, defined torture in relation to detention and prison as “the deliberate or intentional systematic wanton infliction of physical of mental suffering by one or more persons acting alone, or on the orders of any authority, to force another person to yield information, to make a confession, or for any reason”. (Kanchan, Mohan Kumar, Pradeep Kumar, and Yoganarasimha, 2007).

Psychological torture was extremely wide spread in the 1980s. It can be extremely effective in causing both short term and long term damage and should not be considered a lesser form of torture (According to the report, 'Breaking the Silence, Building True Peace, A report on the disturbances in Matabeland and the Midlands, 1980-1989, Summary Report).

Psychological torture could be of many types. For example, the war-victims are forced to undergo several activities which account for a serious mental turbulence. The following are some such methods adopted by the tormentors for the purpose.

In 1975, the World Medical Association defined torture as “the deliberate, systematic, or wanton infliction of physical and mental suffering by one

1. Deprivation techniques comprises of Sensory Deprivation- victim is hooded or blindfolded and kept in dark room for long time.

Types of psychological torture


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Perceptual Deprivation- Victim is blindfolded and frequently transferred from one place to another Social Deprivation- Solitary confinement in a dark environment. Deprivation of basic needs- Withholding food, water, toilet facilities, sleep, clothing etc. 2. Coercion techniques The victim is compelled or coerced to perform or to witness actions that cause mental anguish. 3. Threats and humiliation Direct threat, or threat directed towards family members, relatives, friends etc. along with humiliation. 4. Communication techniques The victim is mentally tortured by giving a variety of confusing, contradicting and false information regarding tragedy involving close relatives. (Kanchan, Mohan Kumar, Pradeep Kumar, and Yoganarasimha, 2007). From another study we can perceive psychological ill-treatment, as "death or mutilation threats", "false accusations", blackmail or light threat", "forcing to humiliating behaviour", etc., watching others being tortured, "death or mutilation threats against the family, friends or colleagues", "being detained in prison with tortured persons", "forcing to watch or listen to torture or killing of others"), deprivation of basic life resources like, "food and water deprivation", "normal sleep deprivation", "deprivation of medical care or drugs", (Jovic and Opacic, 2003) DOMESTIC TORTURE Women are often in great danger in the place where they should be safest, that is, within their families. For many, 'home' is where they face a regime of terror and violence at the hands of somebody close to them – somebody they should be able to trust. Those victimized suffer physically and psychologically. They are unable to make their own decisions, voice their own opinions or protect themselves and their children for fear of further repercussions. Their human rights are denied and their lives are stolen from them by the ever-present threat of violence (Mehr Khan, in a report of UNICEF, Innocenti Digest, 2000). Further, it defines domestic violence as, “violence by an intimate partner and by other

Faculty of Management Studies, MRIU (ISSN2320-8384)

family members, wherever this violence takes place and in whatever form.” Domestic Violence against Women: Industrialized Countries Canada _ 29% of women (a nationally representative sample of 12,300 women) reported being physically assaulted by a current or former partner since the age of 16. Japan _ 59% of 796 women surveyed in 1993 reported being physically abused by their partner. New Zealand _ 20% of 314 women surveyed reported being hit or physically abused by a male partner. Switzerland _ 20% of 1,500 women reported being physically assaulted according to a 1997 survey. United Kingdom _ 25% of women (a random sample of women from one district) had been punched or slapped by a partner or ex-partner in their lifetime. United States _ 28% of women (a nationally representative sample of women) reported at least one episode of physical violence from their partner. Asia and the Pacific Cambodia _ 16% of women (a nationally representative sample of women) reported being physically abused by a spouse; 8% report being injured. India _ Up to 45% of married men acknowledged physically abusing their wives, according to a 1996 survey of 6,902 men in the state of Uttar Pradesh. Korea _ 38% of wives reported being physically abused by their spouse, based on a survey of a random sample of women. Thailand _ 20% of husbands (a representative sample of 619 husbands) acknowledged physically abusing their wives at least once in their marriage.


Pooja Mohanty and Debiprasad Das Middle East Egypt _ 35% of women (a nationally representative sample of women) reported being beaten by their husband at some point in their marriage. Israel _ 32% of women reported at least one episode of physical abuse by their partner and 30% report sexual coercion by their husbands in the previous year, according to a 1997 survey of 1,826 Arab women. Africa Kenya _ 42% of 612 women surveyed in one district reported having been beaten by a partner; of those 58% reported that they were beaten often or sometimes. Uganda _ 41% of women reported being beaten or physically harmed by a partner; 41% of men reported beating their partner (representative sample of women and their partners in two districts). Zimbabwe _ 32% of 966 women in one province reported physical abuse by a family or household member since the age of 16, according to a 1996 survey. Latin America and the Caribbean Chile _ 26% of women (representative sample of women from Santiago) reported at least one episode of violence by a partner, 11% reported at least one episode of severe violence and 15% of women reported at least one episode of less severe violence. Colombia _ 19% of 6,097 women surveyed have been physically assaulted by their partner in their lifetime. Mexico _ 30% of 650 women surveyed in Guadalajara reported at least one episode of physical violence by a partner; 13% reported physical violence within the previous year, according to a 1997 report. Nicaragua _ 52% of women (representative sample of women in León) reported being physically abused by a partner at least once; 27%

reported physical abuse in the previous year, according to a 1996 report. Central and Eastern Europe/CIS/Baltic States Estonia _ 29% of women aged 18-24 fear domestic violence, and the share rises with age, affecting 52% of women 65 or older, according to a 1994 survey of 2,315 women. Poland _ 60% of divorced women surveyed in 1993 by the Centre for the Examination of Public Opinion reported having been hit at least once by their ex-husbands; an additional 25% reported repeated violence. Russia (St. Petersburg) _ 25% of girls (and 11% of boys) reported unwanted sexual contact, according to a survey of 174 boys and 172 girls in grade 10 (aged 14-17). Tajikistan _ 23% of 550 women aged 18-40 reported physical abuse, according to a survey. (Adapted from “Violence Against Women,” WHO, FRH/WHD/97.8, “Women in Transition,” Regional Monitoring Report, UNICEF 1999, and a study by Domestic Violence Research Centre, Japan.) Effects of torture on women: 1. Symptoms and Consequences of torture: There are 121 different types of post-traumatic disorders: 72 types of physical, 41 types of psychological and 8 types of social economical after-effects of torture. All the interviewees experienced both physical and psychological post-traumatic effects (100%), and socioeconomic effects (70%) (This is derived from a checklist, Torture: the Grave of Human Rights, written by KRCT, Hangyeorae Publishing: Seoul, 2004, p.143, 149. This checklist was originally derived from the Istanbul Protocol and the books published by the IRCT in 1992, 1995, 1997, International Rehabilitation Council of Torture Victims. (Report prepared by KRTC by Byun, Kim and Jo, 2005). According to various other studies, the psychological symptoms of the torture-victims


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have multi-dimensional existence. (Agger and Jensen, 1990). These have been amply documented. These include psychosomatic symptoms like, pain, nervousness, insomnia, nightmare, tremor, weakness, fainting, sweating, diarrhoea, etc., behavioural changes like, withdrawal, suspiciousness, irritability, aggressiveness, impulsiveness, suicidal tendencies, depression, phobia, etc., and cognitive impairment like confusion, disorientation, memory defects, loss of concentration, etc.( Allodi & Cowgill, 1982). Similar studies were made by Rasmussen & Launde, 1980; Launde, 1982; Domovitch et al., 1984, etc. Another study (Basoglu, 1984) also depicts symptoms like, feelings of defeat, helplessness, hopelessness and ultimately depression. According to this study, there could be irritability, generalized anxiety, and sleep disturbance, outbursts of hostility and aggressive behaviour, and aggravated condition of the d e p r e s s e d m o o d ( F a l c o n , Ry a n a n d Chamberlain, 1985). According to another study, depending on type method and duration of torture, outcome can vary from mild to severe physical, psychological and social trauma. Physical consequences can be early or delayed in form of severe pain, haemorrhage, infection, scars, mutilation, disfiguration etc. (Basoglu, M. Paker, O. Paker, Ozmen, Marks, Incesu, Sahin, Sarimurat, 1994). Psychological consequences include anxiety, depression, phobia, sleep disturbances, alcohol/ drug abuse, post traumatic stress disorders, suicidal tendencies etc. ( Basoglu et al., 1994) Social consequences are related to social stigma, unemployment, negativity in social activities etc. (Kanchan, M. Kumar, P. Kumar, and Yoganarasimha, 2007). Irrespective of who the victim is, the consequences have to be similar. Rather those could be more intense when the victim is a woman with dual responsibilities of family, as well as, job. Similar types of torture, especially domestic, when inflicted upon women, the effects or the trauma caused by it play havocs on

Faculty of Management Studies, MRIU (ISSN2320-8384)

the organizational behaviour and performance of working women. This is more because, if the victim is exposed to the external environment before adequate treatment (Basoglu, 1992; Falcon, Ryan and Chamberlain, 1985), and carrying with her, her own changed perception of the events, the consequences are aggravated (Lindy et al., 1983; Horowitz et al., 1984). This can be treated through several psychological therapies (Marks, 1987; Gelder, Marks and Wolff, 1967; Marks, 1985; Marks, 1988). Irrespective of the organization the victim is working with and the kind of job she is into, she encounters a chain of undesirable consequences. Performance suffers at the cost of psychic imprisonment. Mobility and flexibility of thought and understanding are paralysed and everything seems ambiguous to the victim. Decision-making ability is also tainted. And hence, these repercussions could be many-folded. Psychological torture on women could be of several forms. It could be domestic abuse or spousal abuse (occurs when one of the partners tries to subjugate the other partner in the relationship by using tactics like fear, intimidation, humiliation, blames or threats. The abuser may use any of these tricks, in order to gain absolute command over the relationship, and manipulate it to suit his needs) (Porcerelli, Patricia,West, Binienda, and Cogan, 2006); it could be external, that is, eve-teasing, negative criticisms, persisting fear of personal security of women, etc. (Allodi F., Randall, G.R., Lutz, E.L., 1985).This happens most often in the work place. All this affects the performance of an individual to a large extent. When women are forced to live in this atmosphere for long, a considerable change takes place in their perception and there by, in their personality resulting in increased ratio of absenteeism and poor performance in the organization. 2. Effects of domestic torture on women The table below shows the different types of violence against women throughout the life cycle (Table 1).


Pooja Mohanty and Debiprasad Das Table 1 - Examples of Violence against Women throughout the Life Cycle Phase

Type of violence

Pre birth

Sex-selective abortion; effects of battering during pregnancy on birth outcomes

Infancy outcomes

Sex-selective abortion; effects of battering during pregnancy on birth

Girlhood

Child marriage; female genital mutilation; physical, sexual and psychological abuse; incest; child prostitution and pornography

Adolescence and

Dating and courtship violence (e.g. acid throwing and date rape)

Adulthood

economically coerced sex (e.g. school girls having sex with “sugar daddies” in return for school fees); incest; sexual abuse in the workplace; rape; sexual harassment; forced prostitution and pornography; trafficking in women; partner violence; marital rape; dowry abuse and murders; partner homicide; psychological abuse; abuse of women with disabilities; forced pregnancy.

Elderly

Forced “suicide” or homicide of widows for economic reasons; sexual, physical and psychological abuse.

(Source: “Violence Against Women”, WHO., FRH/WHD/97.8)

Table 2 - Health Consequences of Violence against Women NON-FATAL OUTCOMES

Physical health outcomes: ? Injury (from lacerations to fractures and internal organs injury) ? Unwanted pregnancy ? Gynaecological problems ? STDs including HIV/AIDS ? Miscarriage ? Pelvic inflammatory disease ? Chronic pelvic pain ? Headaches ? Permanent disabilities ? Asthma ? Irritable bowel syndrome ? Self-injurious behaviours (smoking, unprotected sex) Mental health outcomes: ? Depression ? Fear ? Anxiety ? Low self-esteem ? Sexual dysfunction ? Eating problems ? Obsessive-compulsive disorder ? Post-traumatic stress disorder FATAL OUTCOMES

? Suicide ? Homicide ? Maternal mortality ? HIV/AIDS

(Source: “Violence against Women”, WHO Consultation, 1996)

The above tables clearly exhibit the consequences of torture on women. The effect of the violence, whether physical or psychological, gives rise to a series of imbalanced circumstances in the victim's everyday life. It is evident that such a person would not be able to perform the way she could have performed in the

normal conditions. Hence, this study has been made as an attempt to trace the different consequences a person could face as a result of torture and abuse. In yet another study, to investigate the impact of purely psychological torture, Metin Basoglu of King's College London, UK, and colleagues surveyed 279 survivors of torture from the former Yugoslavia. Between 2000 and 2002 the survivors answered questions about the nature of the torture they endured. The majority of them had endured beating and other forms of physical torture, including electric shocks, tooth extractions and suffocation. But about 20 of the survivors experienced purely psychological manipulations, such as sham executions or the torturing of family members and threats of rape. The researchers collected medical assessments of whether the torture survivors showed signs of PTSD - a form of lasting anxiety. They found no difference in the prevalence of this disorder between the two groups. Basoglu says the findings challenge the common perception that psychological torture is less distressing than physical torture. "Implicit in this distinction is a difference in the distressing nature of the events. The evidence takes issue with that," he says. "And since psychological torture is as bad as physical torture, we shouldn't use it.” (Khasmi, 2007). The findings chime with previous work, say others. "The conclusions are completely consistent with what those subjected to these draconian practices have reported," Rubenstein says. He points out that US Senator John McCain, who experienced torture as a prisoner of war in Vietnam, has said that if he were forced to make a decision between enduring psychological or physical torture, he would not hesitate to pick the latter (Khamsi, 2007). "Torture generates extremely bad intelligence data" and is "enormously counterproductive", according to bioethicist Steven Miles at the University of Minnesota in Minneapolis, US (Khamsi, 2007). Hence, it holds clarity that the torturer does not necessarily gain out of the act of torturing the victim.


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3. O r g a n i s a t i o n a l b e h a v i o u r a n d performance of psychologically tortured women Women have shown a similar vigour and enthusiasm in their work-life as men. Their performance has also been akin to that of men. Several researches have already been carried out in the arena of similarities and differences between men and women employees in an organization. The question, now in context, is not a comparison between men and women employees. Rather, it is a study made to bring into the forefront the behaviour and performance of those working women who are the victims of torture. It is evident that a woman with PTSD finds it extremely difficult to manage the episodes of both her personal, as well as, organizational behaviour. Her behaviour, hence performance, would not tally with that of the non-PTSD women. Hence, treatment of the same becomes inevitable (Marks, 1987; Basoglu and Aker, 1990). A study made by Mckinsey & Company shows that women are better organizational and financial managers than men. After an extensive work on relationship between organization and financial performance and on the number of women who are managers at different companies, Mckinsey has found, first, that the companies around the world with the highest scores on nine important dimensions of organization—from leadership and direction to accountability and motivation—are likely to have higher operating margins than their lower ranked counterparts do (Table 3).

Faculty of Management Studies, MRIU (ISSN2320-8384)

Table-4

Source: A Business Case for Women; The Mckinsey Quarterly, 2008)

These findings suggest that companies with higher numbers of women at senior levels are also companies with better organizational and financial performance. Although the analysis does not show a causal link, the research argues for greater gender diversity among corporate leaders (Desvaux, Devillard-Hoellinger, Meaney, 2008). Desvaux, Devillard-Hoellinger & Meaney have drawn the conclusion from the study that companies will be able to draw from a broader pool of talent in an era of talent shortages. This research shows a correlation between high numbers of female senior executives and stronger financial performance. Hence, it is evident that women in business, in the present era, are indispensable. In yet another study, it was found that businesses headed by women were not more likely to go out of business, nor less successful than those owned by men. A company's age was positively related to its survival regardless of the gender of its owner-operator. Size was unrelated to survival. There were no differences in earnings growth between businesses headed by men and those headed by women (Kalleberg, Leicht, 1991). On the other hand, ethical decision making is affected by many individual factors, and in particular, many studies report sex differences in ethicality (Loe et al., 2000; Jawahar, and Hemmasi, 2006). Women's moral development and ways of reasoning are fundamentally different from those of men and are more

(Source: A Business Case for Women; The Mckinsey Quarterly, 2008)


Pooja Mohanty and Debiprasad Das dependent on ethical understanding (Gilligan, 1982). A subsequent research stream abides by the belief that women are more likely than men to view certain questionable acts as unethical (Konovsky and Jaster, 1989), as well as, less willing to behave unethically (Beu et al., 2003; Thoursie, 2007). Other studies (Cox and Nkomo, 1990) suggest that there are no ethical differences between males and females. These varying findings have generated considerable debate and speculation (Valentine, Godkin, Page and Rittenberg, 2009). However, it is quite evident that women play a very vital role in an organization (Youssef and Luthans, 2007). But when a working woman is under the effects of PTSD, the desired performance cannot be achieved because of the various facets of trauma the victim is compelled to undergo (Basoglu et al., 1996). All those symptoms of torture can be traced in this person as well. And a person carrying these symptoms, obviously, cannot concentrate and be as productive as a non-PTSD person (Basoglu et al., 1996). Treatment: When treatment is taken into consideration, another factor comes into the scenario, that is, the psychological well-being of women. The survivors of torture often have a combination of social, psychological and medical problems which require a multi-disciplinary approach that would involve social, legal, psychological and medical help. Among these problems, traumatic stress reactions are particularly important because these can cause severe psychological disability that might last decades, or even a lifetime, if left untreated (Basoglu and Aker, 1996). Psychological treatments available for survivors include psychodynamic approaches, insight therapy, testimony method, cognitive therapy, and cognitive-behavioural treatment. Behavioural therapy is based on the principle that prolonged imaginable or live-exposure to an anxiety- evoking situation reduces anxiety (Somnier, Vesti, Kastrup and Genefke, 1992; Basoglu and Aker, 1996). It has been demonstrated in controlled studies that behavioural treatments are of great efficacy in combat-related post traumatic stress disorder (PTSD). Cognitive behavioural treatment can

also be of great help for the treatment of torture survivors. From a few studies it has been found that this approach of treatment can be effective in reducing torture-related traumatic stress responses (Skylv, 1992; Bustos, 1992; Basoglu et al., 1996). Various methods of treatment are involved in the process of treatment of PTSD and so, it has become easier to help the victims lead a normal, healthy and fruitful life. Psychotherapy often involves cognitive interventions to help the survivor to leave the 'victim role' induced by the traumatic experience. This can be seen as helping the survivor regain a sense of control over the trauma, as well as, current environmental events (Basoglu, 1992; Basoglu et al.,1996; Agger and Jensen, 1990). Treatment is inevitable when the question of organizational and societal growth is in context. Women play a vital role in the present era, in any organization or society in general. And hence, treatment of any psychological problem is of pivotal importance (Loe et al., 2000; O'Fallon and Butterfield, 2005). And although social support is also important, there is quite a lot of evidence that even social support may not be of much use unless the individual is psychologically healthy enough to be able to access and use it properly (Caroll, Rueger, Foy and Donahoe, 1985; Bustos, 1992; Basoglu et al., 1996). This inevitably would result in poor women employee turnover and further resulting in poor overall retaining of women employees and finally contributing weakly towards the overall employee turnover and productivity of the organization. Conclusion: Torture, whether physical or psychological, results in a great deal of psychological turbulence. It destroys a person's personality and remains with the person for a reasonably longer period than perceived. Torture in any form is unacceptable in any civilized society. Though considerable steps have been taken towards the eradication of this social evil, yet, to make the society completely torture-free is a huge challenge for mankind. It has become a matter of concern, even more, when there has been a considerable growth of working women in the


©Journal of Human and Work Management July, 2014, Vol. 2, No.1

Faculty of Management Studies, MRIU (ISSN2320-8384)

A Study of The Relationship Between Procrastination, Stress And Health Amongst College Students Dr. Amit Abraham

Dr. Priyanka Masih

Associate Professor And Head Department Of Psychology St. John's College Agra

Assistant Professor Department of Psychology St. John's College Agra

Ms. Neha Agarwal St. John's College Agra

Abstract The purpose of this study is to see if any relationship exists between procrastination, stress and health of college students. It is assumed that procrastinators have a tendency to become stressed out when put under time constraints. This stress can have a negative impact upon their immune system, causing more chronic health conditions. Much has been talked about stress and its relationship with health in psychology but hardly any research has been done relating these variables to procrastination. Key Words: procrastination, stress, health

Introduction Procrastination is derived from the Latin verb procrastinare, which literally means to put off or postpone for another day (DeSimone, 1993; as cited in Ferrari, Johnson and McCown, 1995). Psychologists often cite procrastination as a mechanism for coping with the anxiety associated with starting or completing any task or decision. Scientifically, procrastination is defined as "postponing the completion of a task to the point of feeling uncomfortable about one's delay" (Johnson and Bloom, 1995). Behaviorists typically define it as a learned habit derived from a human preference for short-term rewards (McCown, 1986) and at least 20 percent of people classify themselves as such (Marano, 2003). Studies have shown that 70 percent of the college population procrastinates on their schoolwork (Ellis and Knaus, 1977) and the likelihood of procrastination increases from freshmen to senior year (Hill, Hill, Chabot and Barrall, 1978). College students who procrastinate have also claimed that their procrastination has a significant impact on their academic standing, ability to understand class material and the overall quality of their lives (Ferrari, 2001). Ferrari and Pychyl (2003) have identified three basic types of procrastinators:

l Arousal types, or thrill-seekers, who wait to the last minute for the euphoric rush. l Avoiders, who may be avoiding fear of failure or even fear of success, but in either case, are very concerned with what others think of them; they would rather have others think they lack effort than ability. l Decisional procrastinators, who cannot make a decision. Not making a decision absolves procrastinators of responsibility for the outcome of events. Procrastination can be behavioural procrastination or decisional procrastination. Behavioural procrastination is a self-sabotage strategy that allows people to shift blame and avoid action. "They'd rather create the impression that they lacked effort than ability,” says Ferrari (1995). "They can blame their failure on the lack of time." Ferrari (2001) also thinks that procrastinators suffer from low esteem and self-doubt and worry about how other people judge their abilities. "Procrastinators view their self-worth as based on ability," he says. So according to their logic,” If I never finish the task, you can never judge my ability." The decisional procrastination strategy is to put off making a decision when dealing with conflicts or choices. People who practice high


Amit Abraham and Neha Agrawal level decisional procrastination tend to be afraid of errors and are likely to be perfectionists. These procrastinators seek out more and more information about alternatives before attempting to make a decision, if they make one at all. Procrastination and Health Procrastination is correlated with several health problems. Depression, vulnerable self-esteem, and anxiety are related to those who procrastinate. Anxiety levels are especially high for procrastinators near exam period, and these same individuals feel the most relief once they turn in important papers. While procrastinators' stress level and health are good at the beginning of a semester, problems arise as the semester progresses. Late in the semester, procrastinators reported an average of 8.2 symptoms per week, while non-procrastinators only had 5.2 symptoms per week (Tice and Baumeister, 1997.) Procrastination has been described as a selfregulation style that involves delay in the start and/or completion of a task (Ferrari and Tice, 2000), and the avoidance of an intention and its implementation (Van Eerde, 2000). Although the negative mental health consequences of procrastination (e.g., anxiety and depression) are well established (Ferrari, 1991a; Flett, Blankstein, and Martin, 1995; Haycock, McCarthy, and Skay, 1998), recent investigations have revealed that procrastination is also associated with negative physical health consequences (Sirois, Melia-Gordon, and Pychyl, 2003; Sirois and Pychyl, 2002; Tice and Baumeister, 1997). Specifically, it has been demonstrated that procrastinators tend to engage in fewer wellness behaviors such as healthy eating and exercise (Sirois et al., 2003; Sirois and Pychyl, 2002), and that the poor health experienced by procrastinators may be due in part to their tendency to delay seeking care for their health problems (Sirois et al., 2003). Procrastination and Stress The relationship between procrastination and stress is a complicated one. It creates stress by increasing time pressure to get work done. The ultimate time stress is the 'deadline'. The closer you get to the deadline with work

unaccomplished, the more stress you are supposed to feel. A study of 374 undergraduate students by the Procrastination Research Group at Carleton University in Ottawa found that "procrastination is related to not only higher stress, and poor coping strategies, but also avoidant behaviours" (Sirois and Pychyl, 2001). Students who suffer from these avoidant coping styles resist completing assignments and addressing other deadlines that evoke tension and anxiety. Academic Procrastination While academic procrastination is not a special type of procrastination, procrastination is thought to be particularly prevalent in the academic setting, where students are required to meet deadlines for assignments and tests in an environment full of events and activities which compete for the students' time and attention. Gallagher, Borg, Golin and Kelleher (1992) conducted a survey which indicated that 52% of surveyed students indicated having a moderate to high need for help concerning procrastination; 80%-95% of college students engage in procrastination; and approximately 75% consider themselves procrastinators. Objectives The major objectives of the study were as follows: 1. To study the level of procrastination, stress and health amongst adolescents. 2. To study if procrastination, stress and health have any relationship. Hypotheses 1. There will be a positive relationship between procrastination and stress amongst college students. 2. There will be a negative relationship between procrastination and health amongst college students. 3. There will be a negative relationship between stress and health amongst college students. Sample Purposive Random Sampling was used because the sample comprised three different courses of


©Journal of Human and Work Management July, 2014, Vol. 2, No.1

Faculty of Management Studies, MRIU (ISSN2320-8384)

study in the various degree colleges of Agra city. The sample consisted of a total of 100 boys and girls between the age group of 18 – 23 years taken randomly from different post graduate and graduate courses from the Arts, Science, and Commerce and Education streams from various colleges in Agra. Table 1 shows the sample characteristics. Table 1: Sample Characteristics

Faculty

Level Sex

N=100 Arts Science Commerce Education Total Graduate Post graduate Total Male Female Total

43 18 22 17 100 63 37 100 50 50 100

Tools Procrastination Scale: The items of the procrastination scale have been self constructed based upon various research studies done on procrastination for the student population (Lays, 1986; Ellis, 1977; and Ferrari, 2001). The Procrastination Scale is a five point scale consisting of a total of 20 statements. Student Stress Scale: The items of the student stress scale have been self constructed based upon various research studies done on stress upon college students. (Insel and Roth, 1985; Romano, 1992; Ross, Niebling and Heckert, 1999). There are a total of 31 statements based upon events/circumstances (stressors) which can be stressful and thus lead to stress. Health Scale: The items of the health scale have been self constructed based upon the various conditions conducive to good health – both physical as well as mental. The statements were drafted after a detailed study of various researches done on health and conditions which influence the same. (Marks, D. F., Murray, M., Evans, B., Willig, C., Woodall, and C., Sykes, C. 2005; Cassileth, B. R., Lusk, E. J., Strouse, T. B., Miller, D. S., Brown, L. L., Cross, P. A., and Tenaglia, A. N. 1984). The final draft of the scale comprises 15 items.

Design The study is a cross-sectional research of survey nature done by purposive random selection of respondents from the graduate and post graduate classes of various colleges in Agra city. Crosssectional studies are designed to look at a variable at a particular point in time and in our case during the course of college education. A correlational research design has been used for studying the relationship between procrastination, stress and health. This design is so used because we have based our study on assumptions. The data was only collected on the three variables, nothing controlled other than the sample and no variable manipulated. Procedure The data was collected from the students of various colleges after seeking permission from the college authorities. The students were approached in their respective classrooms and given detailed instructions for each of the three scales. One scale was administered at a time. Any doubts were cleared and sufficient time given to them for marking their responses. Results The mean procrastination score of the current sample was 52.29 ±7.13, which indicates that the sample is high on procrastination. For descriptive purposes, differences in the procrastination scores of the two groups were examined. Boys (M= 53.22 ± 7.64) scored more than the girls (51.36 ± 6.54). Both these findings were comparable to earlier findings of Steel (2007), that, three out of four college students consider themselves procrastinators. Men procrastinate more than women (about 54 out of 100 chronic procrastinators are men). The causes of procrastination combine temptation, sense of immediacy, the value of doing the job, and whether you believe you can get the work done. Table 3: Showing Correlation between Procrastination, Stress and Health of Students Correlation Between

Whole Group

Boys

Procrastination and Stress

0.180

-0.64

0.406 *

Procrastination and Health

-0.190

-0.188

-0.132

Health and Stress

-0.041

0.103

-0.016

* Significant at .05 level of significance

Girls


Amit Abraham and Neha Agrawal To examine the main hypotheses, correlational analyses were conducted with each of the main variables. As expected, procrastination was positively related to stress (0.180) and negatively related to health (-0.190). Further, there was a negative relationship between stress and health (0.041). All these relationships were replicated for both the groups, except for a negative relation between procrastination and stress among the boys in the sample (-0.64) which is quite interesting to note. Table 3 shows the correlation between procrastination, stress and health of students. Discussion The present study sought to extend previous researches in an Indian setting. These researches suggested a relationship between procrastination, stress and health. The results of this study indicate that the college students have high levels of procrastination. Previous procrastination research in other parts of the world has reported high levels of procrastination among students (Gallagher, Borg, Golin and Kelleher, 1992; Ellis and Knaus, 1977). The results of the index study point out to the global existence of the process. It appears that some people may frequently procrastinate decisions and/or tasks because they are unable to control their desire for short-term pleasurable activities (Ferrari, Joseph and Emmons, 2003). Chronic procrastinators feel that they do not have much mastery over their own behavior (Ferrari, Parker, and Ware, 1992). This suggestion may hold true for the academic behavior of the students. The hypothesized relationship between procrastination, health and stress was also supported providing a plausible explanation for the poor health and high stress among procrastinators. The current findings suggest that procrastinators may not feel capable of attending to deadlines and engaging in actions necessary for completing tasks well within time limits. This may further lead to stress and health issues. The urgency experienced triggers a stress response and might cause physical and psychological symptoms of stress. Procrastination may be positively related to stress as it eats away the time that was available for the completion of a task, and puts

unjustified demands on the person who has to finish the task in a very less remaining time before the deadline. The findings are well supported by a study done by Tice and Baumeister (1997). In their study of procrastination versus health and stress, they found that at the beginning of the term procrastinators had a lower level of stress, which rose as the deadline of the assignment became more immediate. Procrastinators were also healthier early in the semester, as shown by lower number symptoms reported (an average of 2.8 symptoms/week for non-procrastinators vs. 1.4 symptoms/week for procrastinators at the start of the semester.) For procrastinators, the beginning of a term is often care-free, as opposed to that of those who started working immediately. Increasing levels of stress and health problems began right away for non-procrastinators. Therefore, procrastinators retain good health as long as the deadline is not near. Procrastination has been described as a selfregulation style that involves delay in the start and/or completion of a task (Ferrari and Tice, 2000). Another line of thought would be that procrastination as a trait can also be the cause of delays in health promoting behaviors such as vaccinations, exercise, healthy diet etc. Sirois (2004), also reported a negative relation between trait procrastination and intentions to engage in health behaviours. The big cost of procrastination is to the person's health. During a given semester, students that were identified as high procrastinators had evidence of compromised immune systems as more colds, flu, and some had bouts of insomnia (Marano, 2003). Procrastinators find it difficult to engage in self regulatory behavior. This points towards the poor control that procrastinators might have on temptations to engage in unhealthy behaviours. Further, stress, caused due to procrastination may lead to coping responses that involve health behaviours (e.g., smoking, drinking, or eating excessively). According to Glenn (2002), the procrastinators may also have problems with impulse control and general self-regulation -drinking more beers at a sitting (or whiling away more hours in a hammock) than they initially


©Journal of Human and Work Management July, 2014, Vol. 2, No.1

intend to. Specifically, it has been demonstrated that procrastinators tend to engage in fewer wellness behaviors such as healthy eating and exercise (Sirois et al., 2003; Sirois and Pychyl, 2002), and that the poor health experienced by procrastinators may be due in part to their tendency to delay seeking care for their health problems (Sirois et al., 2003). Though stress and health are differentially related to procrastination in both the groups, but the direction of correlation is in accordance to the hypotheses of the current study except the negative correlation between procrastination and stress among boys. Interestingly boys who were high on procrastination were low on stress. A plausible explanation for this finding may be that girls in India are still treated as inferior to boys. The number of boys pursuing higher education still far outnumbers the girls. The girls, who are able to make it to college education, tend to value it more as compared to boys. Thus it might be quite natural for the girls to attach more importance to finishing tasks on time. This is also supported by the lower procrastination score in girls as compared to boys. Another explanation which would require further research to associate it with procrastination, would be, that there are gender differences in the cognitive appraisal of stress and stressors. Boys may indulge more in procrastination and yet experience lesser stress as they perceived themselves as having more resources for coping with it, whereas girls granted greater importance to the stressful situation (Govaerts and Grégoire, 2004). Implications of the study Academicians all over the world feel that procrastination brings down the grades of the students. High levels of trait procrastination and daily stress are maladaptive and closely associated with stress. This study has implications for students and academicians who have to deal with procrastination on a daily basis. The relationship between stress and health is not new, but the current research is an attempt to incorporate procrastination as a verifiable mediating variable. Procrastination is both a possible contributor to stress and behavioural barrier to health. There may also be fruitful

Faculty of Management Studies, MRIU (ISSN2320-8384)

avenues of research on the interaction of these variables and their impact on the performance of students. References Cassileth, B. R., Lusk, E. J., Strouse, T. B., Miller, D. S., Brown, L. L., Cross, P. A., and Tenaglia, A. N. (1984). Psychosocial status in chronic illness. New England Journal of Medicine, 311, 506-511. Ellis, A., and Knaus, W.J. (1977). Overcoming procrastination. New York: Institute for Rational Living. Ferrari, J.R. (2001). Procrastination and attention: Factor analysis of attention deficit, boredomness, intelligence, self -esteem, and task delay frequencies. Journal of Social Behavior and Personality, 16, 185-196. Ferrari, J. R., and Emmons, R. A. (1995). Methods of procrastination and their relation to self control and self -reinforcement. Journal of Social Behavior and Personality, 10, 135–142. Ferrari, J.R., Johnson, J.L. and McCown, W.G. (1995). Procrastination and task avoidance: Theory research and treatment. New York: Plenum Press. Gallagher, R.P. (2008). Acting in Time on Climate Change. Paper presented at the Acting in Time on Energy Policy Conference, Harvard University, Boston, MA. Gallagher, R.P., Borg, S., Golin, A., and Kelleher, K. (1992). The personal, career, and learning skills needsof college students. Journal of College Student Development, 33(4), 301-10. Glenn, D. (2002). Procrastination in college students is a marker for unhealthy behaviours. The Chronicle of Higher Education, November 24, 2004. Govaerts, S. and Grégoire, J. (2004). Stressful academic situations: Study on appraisal variables in adolescence. European Review of Applied Psychology, 54(4), 261-271. Hill, M. B., Hill, D. A., Chabot, A. E., and Barrall, J.F. (1978). A survey of college faculty and student procrastination. College Student Journal, 12, 256-262.


Amit Abraham and Neha Agrawal Insel, P., Roth, W. (1985). Core concepts in health (4th edition). Palo Alto, CA: Mayfield Publishing Co. International Institute for Population Sciences (IIPS) and ORC Macro. (2007). National Family Health Survey (NFHS-2), 2005 06: India. Mumbai: IIPS. Retrieved from h t t p : / / w w w. n f h s i n d i a . o r g / N F H S 3%20Data/press-relesed.pdf Johnson, J. L., and Bloom, A. M. (1995). An analysis of the contribution of the five factors of personality to variance in academic procrastination. Personality and Individual Differences, 18, 127–133. Lay, C. H. (1986): At last, my research article on procrastination. Journal of Research in Personality, 20, 474-495. Marano, H. (2003). Tomorrow…tomorrow: Why we procrastinate. Accessed October 16, 2003: http//www.ediets.com/news/printarticle.cfm?ar ticle_id=6421 Marks, D. F., Murray, M., Evans, B., Willig, C., Woodall, and C., Sykes, C. (2005). Health psychology: Theory, research and practice (2nd ed.). Thousand Oaks, CA: Sage.. McCown, W. (1986). An empirical investigation of the behaviours of procrastination. Social and Behavioural Science Documents, 16, 1-89. Ross, S.E., Niebling, B.C. and Heckert, T.M. (1999): Sources of stress among college students. College Student Journal, 33, 312-317.

Sirois, F. M. (2004). Procrastination and intentions to perform health behaviors: The role of self-efficacy and the consideration of future consequences. Personality and Individual Differences, 37(1), 115-128. Sirois, F. M. (2007). "I'll look after my health, later": A replication and extension of the procrastination-health model with community-dwelling adults. Personality and Individual Differences, 43 (1), 15-26. Sirois, F. M., Melia-Gordon, M.L., and Pychyl, T. A. (2003). "I'll look after my health, later": An investigation of procrastination and health. Personality and Individual Differences, 35 (5), 1167-1184. Sirois, F. M., and Pychyl, T. A. (2002). Academic procrastination: Costs to health and well -being. Paper presented at the American Psychological Association, Chicago. Steel, P. (2007): The nature of procrastination: A meta-analytic and theoretical review of quintessential self-regulatory failure. Psychological Bulletin, 133, 65-94. Tice, D. M., and Baumeister, R. (1997): Longitudinal study of procrastination, performance, stress and health: The cost and benefits of dawdling. Psychological Science, 8, 454-458. Umberson, D., Hui Liu, and Reczek, C. (2008). Stress process across the life course. Advances in life course research, 13, 19–44.


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CUSTOMER RELATIONSHIP MANAGEMENT: A VISION FOR LIBRARY RAMVEER SAGAR* DR. BINDU AGGARWAL DEPUTY LIBRARIAN

ASSOCIATE. PROFESSOR

K Block, Manav Rachna College of Engineering, Delhi-Surajkund Road, Sec. 43, Faridabad, Haryana-INDIA Email-ramveer.mrce@mrei.ac.in + 09811468939

K Block, Manav Rachna College of Engineering, Delhi-Surajkund Road, Sec. 43, Faridabad, Haryana-INDIA bindu.mrce@mrei.ac.in

Abstract The paper highlighted the concepts and technology of CRM a vision for library. In today's highly competitive world, an increasing number of organizations have realized the importance of becoming more customer-centric and invested a large amount of time and resources in a Customer Relationship Management (CRM) system with the aim of better managing their customers. A large number of CRM projects, however, end up failing or struggling. While many studies have been conducted about methodologies, tools, and theoretical conceptualizations of CRM, there is little, if any, emphasizing the critical steps and key challenges to its successful implementation. It aims to compiles the critical steps and provides a conceptual framework for the implementation of CRM that will lead to better preparation for consultants and organizations alike that want to make CRM an operational tool. Key Words: Customer Relationship Management; CRM Process; CRM Definition; CRM Strategy; and Relationship Marketing Discipline.

Introduction Customer relationship management is a broadly recognized, widely-implemented strategy for managing and nurturing a company's interactions with clients and sales prospects. It involves using technology to organize, automate, and synchronize business processes— principally sales activities, but also those for marketing, customer service, and technical support. The overall goals are to find, attract, and win new clients, nurture and retain those the company already has, entice former clients back into the fold, and reduce the costs of marketing and client service. Once simply a label for a category of software tools, today, it generally denotes a company-wide business strategy embracing all client-facing departments and even beyond. When an implementation is effective, people, processes, and technology work in synergy to increase profitability, and reduce operational costs

Customer relationship management (CRM) consists of the processes a company uses to track and organize its contacts with its current and prospective customers. CRM software is used to support these processes; information about customers and customer interactions can be entered, stored and accessed by employees in different company departments. Typical CRM


Ramveer Sagar and BinduAgrawal goals are to improve services provided to customers, and to use customer contact information for targeted marketing. While the term CRM generally refers to a software-based approach to handling customer relationships, most CRM software vendors stress that a successful CRM effort requires a holistic approach. CRM initiatives often fail because implementation was limited to software installation, without providing the context, support and understanding for employees to learn, and take full advantage of the information systems. CRM tools should be implemented "only after a well-devised strategy and operational plan are put in place". CRM can be implemented without major investments in software, but software is often necessary to explore the full benefits of a CRM strategy. Educational institutions worldwide are undergoing fundamental shifts in how they operate and interact with their “customers”: students, alumni, donors, faculty members, and staff members. Kotler and Fox (1995) state that “the best organization in the world will be ineffective if the focus on 'customers' is lost. First and foremost is the treatment of individual students, alumni, parents, friends, and each other (internal customers). Every contact counts!” During the mid-1980s and the late 1990s, many colleges and universities began restructuring and reengineering their operating processes to cut costs and become more efficient while responding to increased competition. Yet these organizations also realized that building the inhouse technology necessary to achieve these goals was expensive, difficult, and timeconsuming. As a result, many turned to enterprise resource planning (ERP) applications. 1. W h a t i s C u s t o m e r R e l a t i o n s h i p Management (CRM)? CRM stands for Customer Relationship Management. The customer, in this case, can be a citizen, business representative, intermediary or partner. CRM is the discipline of improving the way customers are managed through changes in business processes, people, organisation and technology. The key drivers for a CRM programme within the public sector tend to be the

improvement of services to citizens, together with some real expectation of improving the efficiency and the effectiveness of the organisation. Other drivers could be to focus limited resources on those in most need or to maximise revenue from customer facing activities. Improvements in customer service from CRM can range from a more rapid and focused response to enquiries through to proactive contacts with customers to anticipate and manage potential issues. CRM is a key enabler for customers wishing to access local government services, improving the efficiency of traditional channels i.e. phone, face to face, and mail and providing innovative channels such as Internet, SMS and DigiTV. The central component of a CRM solution is generally the creation of a single shared customer database – allowing information to be collected once but used many times. The sharing of this customer data across the authority, in conjunction with the functional tools provided by a CRM solution, allows the authority to make gains in both efficiency and effectiveness e.g. by improving the ability of front line staff to resolve issues at first contact or dealing automatically with enquiries that originate over the web. CRM is often seen as consisting of a number of layers, connecting customers through to front and back office and possibly third parties as shown in the diagram below: As Nevin (1995) points out, these terms have been used to reflect a variety of themes and perspectives. Some of these themes offer a narrow functional marketing perspective while others offer a perspective that is broad and somewhat paradigmatic in approach and orientation. A more popular approach with the recent application of information technology is to focus on individual or one-to-one relationships with customers that integrate database knowledge with a longterm customer retention and growth strategy (Peppers & Rogers, 1993). Thus, Shani and Chalasani (1992) have defined relationship marketing as “an integrated effort to identify, maintain, and build up a network with individual consumers and to continuously strengthen the network for the mutual benefit of both sides, through interactive, individualized


©Journal of Human and Work Management July, 2014, Vol. 2, No.1

and value added contacts over a long period of time”. In other business contexts, O'Neal (1989), and Paul (1988) have proposed similar views of customer relationship management. Berry (1995), in somewhat broader terms, also has a strategic viewpoint concerned with CRM. A simple CRM process Resource development and constituent relationship management (CRM) go hand in hand. Whether it is through financial donations or volunteer activities, your constituents' willingness to contribute is greatly influenced by their perception of the value you have placed on their relationship with your organization. Today's sophisticated donors appreciate organizations that are aware of and recognize their achievements and current interests. While many organizations attempt to collect this information, most ends up storing their data in multiple, disjointed systems. In this situation, it is frustrating and difficult – if not impossible – to develop a holistic perspective of the constituent. 3. CRM: The Concept and the Technology The modern concept of Customer Relationship Management has come a longway from marketing and market theories to corporate business strategies supported by modern CRM solutions. Here we will take a look at some of the most famous theories, their evolution and the time when they were dressed in hardware and software solutions supporting the business. Direct Marketing: In the 1960, the phenomenon of “Direct Marketing " was introduced. It involves communicating with large numbers of clients through promotional messages or advertisements in newspapers and magazines. Based on the principle of mass marketing, it focused on the sale of mass products of the largest possible number of customers. Target Marketing: With the increase in purchase of products and services from consumers more data about them will become available. Analysis of data begins to associate the products with customers who buy them. Thus appears the term " Target Marketing " , the practice of promoting a product or service to a specific group of potential or existing customers.

Faculty of Management Studies, MRIU (ISSN2320-8384)

Relationship Marketing (based on relationships and focus on clients): For first time popularized by Regis McKenna in his book " Relationship Marketing: Successful Strategies for the Age of the Customer " in 1993, Relationship Marketing has been adopted by many companies. The idea is to know more about customers and to get to know them closely, by understanding their individual preferences and thus increasing their value and life cycle (customer lifetime value). 4. Need for CRM in Libraries: It goes without saying that library customers have become more knowledgeable and demanding in an era marked by an abundance of information resources and services. As with any industry, libraries too face growing challenges to continuously meet customer expectations, and attract and retain users in light of plentiful competition. The ability to understand customers, build relationships and market diverse services is imperative when considering ways to expand service offerings and improve Return on Investment (ROI). CRM - Customer Relationship Management underpins any effort to grow usage and demonstrate ROI. In its broadest sense, CRM comprises three essential areas: customer management, usage analysis, and marketing. In this comprehensive approach to CRM, these three areas "collaborate" to create the best possible and most rewarding experience for many different groups of library users. The first area, customer management, pertains to the storage of core information, such as name, addresses, transaction history, etc., but extends into a wider spectrum. In this context one should think of managing customer correspondence (questions, suggestions, and complaints), the interfacing with customer subscription and payment services, and the safeguarding of customer data integrity. The second component of CRM, usage analysis, involves the in-depth understanding of user behavior correlated with demographic breakdowns and geographic patterns. Usage analysis, along with the ability to granularly slice data, enables libraries to assess performance and determine paths for improvement. Marketing, finally, relates to a set of activities, ranging from promoting offerings to delivering engaging new services.


Ramveer Sagar and BinduAgrawal In combination, the three aspects of CRM customer management, usage analysis and marketing - provide libraries with an important tool to deliver services that are aligned with user needs. Collections, after all, must reflect the prevalent and varied interests amongst different constituents within the community. The online experience furthermore should mirror a new paradigm of information delivery, extending beyond search to involve collaboration and community building. By deploying CRM solutions, libraries can effectively communicate with customers, understand their needs in today's environment, and continuously deliver relevant services and experiences. 5. Why Are Institutions Interested in CRM? CRM enables the creation of an effective strategy for an institution to differentiate itself by establishing relationships and gathering data to build those relationships through focused use of business analysis. In doing so, it enables the institution to build quality relationships with prospects, students, parents, staff and administration, faculty and alumni. It uses a variety of communication and collaboration methods in the decision process to bring students into a relationship with the institution. It also helps the school maintain and achieve a competitive advantage in recruiting in a global market. Finally, CRM is a means to capture valuable data. That data will help the institution make smart decisions in the future about how to recruit and retain relationships with prospects and students so that they will stay and flourish at the institution. Improving CRM System with Cost Effective Practice

Customer Relationship Management is very important from a firm's perspective to get better at business and understand the needs of the customer to develop a better product. In this regard Gartner came up with 5 different costeffective ways that will help improve the customer relationship management system Extracting More Value from CRM System

CRM or Customer Relationship Management system is one of the most important tools for businesses to thrive. Over the years, customer remains the most important factor for any business. Wooing the customers and convincing them is the primary focus of all companies and they leave no stone unturned in this process. 6. Customer Relationship Management (CRM) in Library and Information Services : Good customer service is essential for organizations where delivery to internal and external customers is a requirement at all levels. CRM offers an integrated approach to achieving this through anticipating and satisfying customer needs. This broader view of customer relationships and requirements enables libraries and information services to better benchmark and evaluate progress. This, in turn, can lead to increased efficiency and customer satisfaction.


©Journal of Human and Work Management July, 2014, Vol. 2, No.1

7. Conclusion: In a conclusion we can say that faced with widespread economic, technological, and cultural change, academic institutions are looking to enhance the value and effectiveness of their existing customer relationships, while attracting new and loyal customers. As institutions begin embracing e business and elearning, the driving forces behind CRM will become even stronger. The notion of effective customer information management as a productivity issue is being replaced by the need for effective customer management as a competitive advantage. Tomorrow's systems will go far beyond productivity-related features (such as Web-based student registration) to the development of customer information as a strategic advantage. References: 1. Berry, L. L. (1995) “Relationship Marketing of Services--Growing Interest, Emerging Perspectives.” Journal of the Academy of Marketing Science, pp. 236-245. 2. Bickert, J. (1992) “The Database Revolution.” Target Marketing, pp.14-18. 3. Nevin, J. R. (1995) “Relationship Marketing and Distribution Channels: Exploring Fundamental Issues.” Journal of the Academy Marketing Sciences, pp. 327-334. 4. Peppers, D. & Rogers, M. (1993) The One to One Future: Building Relationships One Customer at a Time. New York: Doubleday. 5. Shani, D. & Chalasani, S (1992) “Exploiting Niches Using Relationship Marketing.” Journal of Consumer Marketing, 9 (3), 33-42. 6. Jackson, B. B. (1985) Winning and Keeping Industrial Customers: The Dynamics of Customer Relationships. Lexington, MA: D.C. Heath. 7. O'Neal, C. R. (1989) February) "JIT Procurement and Relationship Marketing.” Industrial Marketing Management, 18, 55-63. 8. Kotler, P., and Fox, K. (1950) Strategic Marketing for Educational Institutions. Englewood Cliffs, N.J.: Prentice Hall.

Faculty of Management Studies, MRIU (ISSN2320-8384)

Webography: 1. http://marketingeverything.blogspot.com 2. http://doc-0o-00-docsvIewer.googleusercon tent.com 3. http://www.gembrio.com/_crm 4. http://docsviewer.googleusercontent.com /viewer/securedownload/dsn1aovipa 5. http://esysbase.com/tag/customer-relation ship-management/ 6. http://jisc.cetis.ac.uk/crm-tools/documents/ benefits-of-crm.pdf 7. http://www.glyndwr.ac.uk/en/Flexiblestudy /Modules/CustomerRelationshipManageme ntCRMinLibraryandInformationServices/


JOURNAL OF HUMAN AND WORK MANAGEMENT In this modern era of scientific temper and creativity, the role of management professionals, researchers and academicians have become more dynamic and challenging than ever before. Now the role of academicians and academic institutions are not only restricted to knowledge dissemination but also they are pivotal in knowledge generation. This new journal is a broad based multidisciplinary journal being introduced for academicians, researchers and management professionals with the noble idea of becoming an instrument and catalyst for developing, nurturing, creating and disseminating knowledge to the academic community and the organizations. This new bi-annual peer reviewed publication is a forum for communicating interdisciplinary views and researches in all areas of human and work management including Industrial/ Organizational Psychology / HRD / Strategic Management / Marketing / Consumer Behaviour / Management Education / Positive Psychology / Applied Psychology and all other allied areas of Management. The research papers will include empirical investigations, theoretical papers, case studies, review articles, methodological and application based papers. The journal would have broad circulation among various professionals including Managers, Consultants, Policy makers, Researchers, Educationists, Behaviour Scientists, Psychologists and students.

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INSTRUCTIONS TO AUTHORS Manuscript for publication in the Journal of Human and Work Management (JHWM) must comply with the format described in the publication manual of the American Psychological Association (6th Ed.). The manuscript should include a separate title page with the name of the author(s) and affiliations. Author identification notes should be typed only on the title page. E-mail address of the corresponding author may please be provided. The manuscript should be typed in double spacing in Times New Roman, Font size 12. Word Limit (Maximum): Articles based on empirical data: 5000 words Theoretical or Review Articles: 6000 words Brief reports: 1500 words. The articles should broadly contain: Title, Abstract, Keywords, Introduction, Objectives/Hypothesis, Method (This should cover Techniques, Sample, Tools/Measures, Procedure etc.), Results, Discussion, Conclusion and References (in Alphabetical order). Reference Examples: All Journal titles with volume number should be in italics. Also, book titles should be in italics. Citing print resources: Book: Zohar, D., & Marshall, I. (2000). SQ-Spiritual Intelligence: The Ultimate Intelligence. London: Bloomsbury. Chapter in an edited book: Kumar, V.V., & Mehta, M. (2011). Gaining adaptive orientation through spiritual and emotional intelligence. In A.K. Chauhan & S.S. Nathawat (Eds.), New facets of positivism (pp. 281-301). New Delhi: Macmillan Publishers India. Article in a journal: Kumar,V.V., Mehta, M., & Maheshwari, N (2013). Effect of emotional Intelligence on achievement motivation, psychological adjustment and scholastic performance of secondary school students. Journal of the Indian Academy of Applied Psychology 39(1), 60-67. Citing DOI: Bledow, R. (2013). Demand-perception and self-motivation as opponent processes: A response to Bandura and Vancouver, Journal of Management, 39, 14-26. doi: 10.1177/0149206312466149.


Kumar, V.V., & Mehta M. (2011). Scale for Spiritual Intelligence [Database record]. Retrieved from Psyc TESTS. doi: 10.1037/t16725-000. Citing web resources: Hershey Foods Corporation. (2001, March 15). 2001 Annual Report Retrieved from http://www.hersheysannualreport.com/2000/index.htm Online Newspaper Articles: Becker, E. (2001, August 27). Prairie farmers reap conservation’s rewards. The New York Times. Retrieved from http://www.nytimes.com Tables and graphs should be on a separate page having their intended position clearly indicated in the text. Any experimental research reported in JHWM should have the approval of the ethics committee or the author should make a statement that he/she has maintained necessary ethical standards while publishing. The article must be accompanied with an undertaking that the same has not been published elsewhere, and will not be sent for publication anywhere till it is under review in JHWM. All data, views, opinions and statements expressed in the journal are the views of the authors. For any copyright violation or plagiarism authors will be responsible. Neither the editors nor the publisher are in anyway responsible for the same. The editor reserves the right to edit or modify the articles for which no communication shall be done with the authors. Articles are assessed by the editorial board. Articles are generally revised on certain key dimensions, such as originality of the work, scientific argument, style of English, format of the paper, references, citations and suitability of the article for the Journal. In case of review articles, the importance of the subject and the extent of the comprehensive review are assessed. Based on the recommendations of the editorial board, the articles will be sent back to the authors for revision or the articles which do not fulfil the above requirements will be rejected. The decisions will be informed through email only. Manuscript Submission: Authors can email their papers to the Editor at editor.fms@mriu.edu.in or director.fms@mriu.edu.in


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