Journal of Research - AIMS Institutes

A PREMIER INSTITUTE FOR HIGHER EDUCATION IN INDIA

Journal of ResearchISSN 2321 - 8487

Volume 10, Issue 1, March 2015

AIMS INSTITUTES(Peenya, Bangalore)

Retail Analytics: An Approach to Understanding The Landscape of Retail Trading

The Relevance of Ideation, Opportunity Recognition and Strategic Entrepreneurship Linkage - A Fresh Perspective

Performance Evaluation of General Insurance Corporation of India� A Study With Reference to Agriculture Insurance Company of India Ltd

A Case Study on Consumers NGOs in Malaysia

A Global Perspective on Work Life Balance

Corporate Governance and Compliance

A Study on E-Commerce � with special reference to Online Shopping in Bangalore

Talent Management, Work Life Balance and Retention Strategies

A Study on the progress of New Pension System - Opportunities and Challenges to the Government and Current Crop of Investors

How Investment of Funds can improve the Level of the Athletes and Generate Revenue for the Investors?

Jungle Villagers in the writings of Kenneth Anderson

Book Review

Dr.T. Siidaiah

Monoo John, Dr. T. Dula Babu

Dr.S.Dilli, Dr.K.Jayachanra Reddy

Zorah Abu Kassim

Dr. N. Krishna Kumar

Ramesh Raj Ayer

Shivashankari.V.R, Srividhya.V,Gayathri.V

Lakshmi H.S,Dr. B.A Karunakara Reddy

Latha.T

Achuth Anil

Prabhas Pandith T.S

Ramesh Raj Ayer

AIMSJournal of Research

Dr. Kiran Reddy - Chairperson (Founder & CEO) AIMS Institutes

Dr. G. Sudarshana Reddy - Member (Associate Professor, Tumkur University)

Dr. N. Manu Chakravarthy - Member (Associate Professor NMKRV College for Women, Bangalore)

Dr. Sheri Kurian - Member (Registrar, AIMS)

Prof. Jyothirmayee - Member(Director, ACSD, AIMS)

Dr. Anupama - Member(Director, ACCL, AIMS)

Prof. Jayashree Nair - Member(Dean, IT Programmes, AIMS)

Ms. Anagha Reddy - Member(Director, Secondary Education, AIMS Institutes)

Dr.R.Jayaprakash Reddy - Member Secretary(Director, ACR, AIMS)

Editorial Board

Dr. Kiran Reddy, Founder & CEOAIMS Institutes

st st1 Cross, 1 Stage, Peenya,B angalore – 560 058E mail: [email protected]

Editor-in-Chief

Prof. M. Bhagyalakshmi (Sr. Manager, ACR)

Ms. Sanjana Jacob

Editorial support

Editorial Reviewers

AIMS School of Business

Prof. Vijay Bhasker Velury

Prof. Jyothirmayee

Dr. Anupama

Prof. Ramesh Raj Ayer

AIMS School of CommerceDr. B. Karunakara Reddy

Dr. K. Nirmala(Dept. Of Commerce, Central College, Bangalore University)

(Professor & Dean, Dr. P. ParamashivaiahDept. Of Studies & Research in Commerce, Tumkur University)

(Prof. and Dean, Faculty of Commerce & Dr. RameshManagement, Mount Carmel College, Bangalore)

Gupta (M.Com Coordinator, Dr. E. A. ParameswaraAPS College of Commerce, Bangalore)

(Professor(Retd.), Dept. Of English, Dr. Basav Raj UrasSheshadripuram College, Bangalore)

ISSN 2321 – 8487 Volume 10, Issue 1, March 2015

Sri M. Gopal Reddy - Director (AIMS Institutes)

Administrative Support

PublisherACR, AIMS

FrequencyBi-Annual

Cover DesignMr. Sajjad Shah (AIMS Institutes)


Volume 10, Issue 1

March, 2015

Editor-in-Chief

Dr. Kiran Reddy


About ACR

AIMS Journal of Research is a bi-annual journal brought out by the AIMS Centre for Research (ACR) since its inception i.e. 2005. The journal is published in March and September every year. ACR is one of the vibrant centres of excellence of AIMS. To promote research culture and to encourage high quality research activities amongst the faculty and students' fraternity are among the major objectives of ACR. The journal is addressed to corporate, researchers, faculty in the departments of Management, Commerce, Information Technology and Humanities. Thus it is a multidisciplinary and aims at providing a platform to research enthusiasts and publish high-quality Academic Papers, Reective Practices, Case Studies and Book Reviews.

Research Review Committee

Dr. Kiran Reddy- Chairperson (Founder & CEO) AIMS Institutes

Dr. Sheri Kurian – Member (Registrar, AIMS)

Dr. Kavitha Desai – Member

Prof. Jyothirmayee – Member (Director, ACSD, AIMS)

Prof.Jayashree Nair – Member (Dean, IT Programmes, AIMS)

Dr.R.Jayaprakash Reddy – Member Secretary (Director, ACR, AIMS)

© 2015 AIMS Centre for Research, AIMS, Peenya, Bangalore – 560 058.

Views expressed in the papers are those of respective author(s). Neither AIMS Journal Research, nor ACR, AIMS, Peenya, Bangalore is responsible. Unless authorized, no part of the material published in the journal may be reproduced or stored in retrieval system or used for commercial and other purposes.

Research Advisory Committee

Dr. Kiran Reddy - Chairperson (Founder & CEO) AIMS Institutes

Prof. Maneesh Reddy - Member (Director -Strategic Planning) AIMS Institutes

Dr. Sheri Kurian - Member (Registrar, AIMS)

Prof. T.Siddaiah - Member, (Professor of Management & Dean

(Retd.), Sri Venkateswara University, Tirupati, Andhra Pradesh)

Prof. Anjula Gurtoo - Member (Department of Management Studies, Indian

Institute of Science, Bangalore)

Prof. D.Anand – Member (Department of Management Studies, University of Mysore, Mysore)

Prof. Indira – Member (Department of Sociology, University of

Mysore, Mysore)

Prof. Sandhya Sastry – Member (University of Bedfordshire, UK)

Dr. Kavitha Desai – Member

Prof. Jyothirmayee – Member (Director, ACSD, AIMS)

Prof. Ramesh Raj Iyer – Member (Director, ACIL, AIMS)

Dr.R.Jayaprakash Reddy, Member Secretary (Director, ACR, AIMS)


CONTENTS

Editorial Dr. Kiran Reddy

Retail Analytics: An Approach to Understanding the Landscape of Retail Trading Dr.T. Siddaiah

The Relevance of Ideation, Opportunity Recognition and Strategic Entrepreneurship Linkage � A fresh perspectiveMonoo John, Dr. T. Dula Babu

Performance Evaluation of General Insurance Corporation of India� A Study With Reference to Agriculture Insurance Company of India LtdDr.S.Dilli, Dr.K.Jayachanra Reddy

A Case Study on Consumers NGOs in Malaysia Zorah Abu Kassim

A Global Perspective on Work Life Balance Dr. N. Krishna Kumar

Corporate Governance and ComplianceRamesh Raj Ayer

A Study on E-Commerce � with special reference to Online Shopping in Bangalore Shivashankari.V.R, Srividhya.V, Gayathri.V

Talent Management, Work Life Balance and Retention StrategiesLakshmi H.S, Dr. B.A. Karunakara Reddy

A Study on the progress of New Pension System - Opportunities and Challenges to the Government and Current Crop of InvestorsLatha.T

How Investment of Funds can improve the Level of the Athletes and Generate Revenue for the Investors?Achuth Anil

Jungle Villagers in the writings of Kenneth AndersonPrabhas Pandith T.S

Book ReviewRamesh Raj Ayer

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10

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33

42

47

56

69

78

82

86

89

Editorial


The first issue of tenth volume of our AIMS Institutes Research Journal is releasing with research papers in the areas of Management, Commerce and Humanities and a book review on Research Methodology. The academics and research are given equal importance in our institutes. We followed the blind peer review process for selection of papers for publication. In this issue the papers of the external researchers and the best papers submitted to the national conference conducted by School of Commerce are included.

Dr. T. Siddaiah in his paper, Retail Analytics: An approach to Understanding the Landscape of Retail Trading, identified that mass marketing technologies are no longer relevant to woo the customers. He opined that the most challenging issue is to mine the customer data to derive logical and useful insights. His study is based on a sample of 107 respondents and brought out some interesting relevations. His study finds that the mom and pop stores continue to be the most dominant players in retail trading. Proximity and cordial relations with shop keepers are the most dominant factors in patronizing mom and pop stores. It is the quality of products and quality of service that drive the customers to buy from corporate retail outlets.

Monoo John, and Dr. T.Dula Babu in their paper, The Relevance of Ideation, Opportunity Recognition and Strategic Entrepreneurship Linkage – A fresh perspective, have explored the irreversible cycle of creative destruction, opportunity recognition and strategic entrepreneurship in a constantly changing environment and which brings about the creation of new products, services and innovative processes. In this process, they have attempted to build a few building blocks for more advanced studies. They felt that further investigations need to be carried out at a fairly advanced level on the impact of idea generation and creative destruction on the business environment.

Dr.S.Dilli, and Dr.K.Jayachanra Reddy in their paper, Performance Evaluation of General Insurance Corporation of India – A Study With Reference to Agriculture Insurance Company of India Ltd, have evaluated the profitable performance of General Insurance Corporation (GIC) and assessed the profitability of Agriculture Insurance Company of India Limited (AICIL).

Their study was based on the annual reports of GIC and AICIL from 2004-05 to 2013-14. The study revealed that GIC's profitability position was good and the AICIL's profitability had the fluctuations. The researchers have given constructive suggestions to improve the profitability growth rate for surviving the GIC and AICIL and rendering more effective financial services to the public in general and to the agriculturists in particular.

Zorah Abu Kassim's paper, A Case Study on Consumers NGOs in Malaysia, aims at gauging the effectiveness of consumer NGOs in Malaysia. His findings indicate that consumers had the highest frequency of visiting websites and half of them lodge complaints or meet an officer for their problems. His study covers 4 consumer NGOs and 4393 consumers. Through the study he suggested the NGOs to work more closely with the government to enhance their roles. Their strong relationship can solve the problems of consumers more effectively.

Dr. N. Krishna Kumar in his conceptual paper, A Global Perspective on Work Life Balance, discussed how work life balance leads to high morale, high productivity, high commitment, low absenteeism and all these will lead to a visible spurt in productivity improving the bottom line.

Ramesh Raj Ayer in his paper Corporate Governance and Compliance describes the Indian corporate governance system and examines how the system has both supported and restrained India's ascent to the top ranks of the world's economies.

He felt that the best practices by the Corporate industry in India in the next 10 years through excellence in Corporate Governance could be showcased for emulating in the future here as well as elsewhere in the world.

Shivashankari.V.R, Srividhya.V, and Gayathri.V, in their empirical study titled, A Study on E-Commerce – with special reference to online shopping in Bangalore, tried to understand the awareness of online shopping among customers of Bangalore. Their study resulted in 74% of the respondents are highly satisfied with online shopping. They have also given some suggestions for secure buying.

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Lakshmi H.S, and Dr. B.A.Karunakara Reddy in their paper, Talent Management, Work Life Balance and Retention Strategies, tried to identify the employee retention strategies followed by IT Companies in the city of Bangalore. The study was done on a sample of 80 employees of this industry. The study identified many loop holes in the industry relating to work life balance, training, job satisfaction etc. Based on the findings the researchers made some suggestions to IT industry to reduce attrition rate.

Latha.T, in her paper, A Study on the progress of New Pension System - Opportunities and Challenges to the Government and Current Crop of Investors, proposes to identify the progress of new pension system with different parameters to compare with other investment options and indicate the beneficiary issues both to the Government and to the Investors. This study uses both primary and secondary data. This paper critically analyses different parameters of present pension system and proposes constructive suggestions.

Achuth Anil, in his paper, How Investment of Funds can Improve the level of the Athletes and Generate Revenue for the Investors?, briefly present the past and current scenario of sports in India, and how investment of funds can improve the level of the athletes and generate revenue for the investors. It also looks into the potential of investment into various ancillary sectors of the sports.

Prabhas Pandith T.S, in his paper, Jungle Villagers in the Writings of Kenneth Anderson, studies the depiction of South Indian village communities in the shikar narratives of Kenneth Anderson. The researcher argues that Anderson's portrayal of South Indian villagers is rather superficial and stereotypical which shows that Anderson has probably failed in comprehending the niceties of South Indian village communities.

Ramesh Raj Ayer reviewed the book titled, Comprehensive Research Methodology (Focussed on Marketing and Applied Research) written by B L Agarwal.

Dr. Kiran Reddy, Editor-in-ChiefAIMS Journal of Research

E-mail: [email protected]


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*Professor of Management & Dean (Retd.), Sri Venkateswara University, Tirupati, Andhra Pradesh, [email protected]

Retail Analytics: An Approach to Understanding theLandscape of Retail Trading

Dr. Siddaiah. T*

�If you ful�ll the wishes of your employees, the employees will ful�ll your visions.� - Amit Kalantri

KEY WORDSFDI; Mom and Pop Stores;Retail Trading

Abstract:

Retail business is one of the major sectors of Indian economy and about 14% of GDP comes from this sector. It is the largest component of services sector employing more than 7% of the total workforce in the country. With the unorganized sector constituting a major chunk of retail trading, India sets the record of having the highest retail shop density in the world. The organized retailing in India has been increasing consistently particularly since 1992 with , dominant domestic business groups being involved in the multi-brand retail business. FDI brings into the host country not only capital but also many other bene�ts along with certain adverse effects. Globalization of trade and investments has transformed the retail sector into highly competitive landscape. With the fast growth of social media the consumers are increasingly


well connected than ever before to in�uence or to get in�uenced. With increased connectivity, the expectations of consumers are set to change constantly creating a lot of uncertainty to the producers/marketers. Mass marketing technologies are no longer relevant to woo the customers. The consumers expect that they be given personal recognition, attention and treatment in all the retail offerings. Having customer data is one issue, the other but most challenging issue is to mine the customer data to derive logical and useful insights. It is in this context that the retail analytics has assumed greater importance.

It is a study based on a sample of 107 respondents in a metropolis, which brings out some interesting revelations. Mom and pop stores continue to be the most dominant players in retail trading. Proximity and cordial relations with shop-keepers are the most dominant factors in patronizing mom and pop stores. It is the quality of products and quality of service that drive the consumers to buy from corporate retail outlets. Notwithstanding some apparent advantages, the multinational corporate retailers may become effective agents in the extinction of a large number of mom and pop stores across the country.

Introduction

Retail business is one of the major sectors of Indian economy and about 14% of GDP comes from this sector. It is the largest component of services sector employing more than 7% of the total workforce in the country. Retail trading in India is mostly unorganized which refers to the retailers who follow the conventional formats of low cost retailing. They are kirana shops, pavement vendors, paan/beedi shops, hawkers and peddlers, owner manned general stores, etc. The organized retailing refers to the trading activities undertaken by licensed retailers and they include supermarkets/hypermarkets owned and managed by corporate groups like Reliance, Future, Raheja, Bharti, RPG, etc. It is estimated that the unorganized retailing is about 95% of total retailing in India as against 80% in China; 60% in Thailand; and 50% in Malaysia. Even in

other developed countries, the organized retailing is estimated to be not more than 70%. Since the unorganized sector constitutes a major chunk, India sets the record of having the highest retail shop density (more than 10 shops per 1000 population) in the world. The explosion of retail shops in India has been taking place because people when they fail to find any work in other occupations such as agriculture, manufacturing, etc., they take to retailing as it is an affordable business to anyone. In other words, it is the lack of other economic opportunities that makes many people take to retailing with whatever means of capital they have at their command.

Foreign Direct Investment (FDI) Foreign Direct Investment (FDI) refers to investment to be made by the foreigners to enhance the productive capacity of the economy.

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It excludes investment in securities traded in the secondary market. FDI may take different forms like financial collaborations; joint ventures and technical collaborations; capital markets via Euro issues; and private placements or preferential allotment of equity shares. FDI may take place through mergers and acquisition as well. Even prior to the FDI allowed into the retail sector, the foreign players had been operating in Indian retail sector under franchise agreements, strategic licensing agreements, and manufacturing and wholly owned subsidiaries. The two terms, FDI and MNC are used synonymously as FDI creates an MNC when the stake exceeds 50%.

Government PolicyIndia as one of the signatories to General Agreement on Trade in Services (GATS) of WTO has opened up the retail business to foreign investment. As there were some reservations on opening up of retail sector, the Government of India moved slowly, and in 1997 it initially permitted Foreign Direct Investment (FDI) in wholesale trading (cash and carry) and export trading with 100% ownership under Government Approval Route. The same has been brought under Automatic Route along with permitting FDI in single brand retail since 2006. The FDI limit in single brand retail has been increased to 100% with effect from December 2011. Amidst much of outcry and uproar, a bill was passed in the Parliament on 7 December 2012 which allows 51% FDI in multi-brand retail.

The specific FDI limits in trading sector are summarized as below.

Pros and Cons of FDI in Retail TradingRecently, some of the political groups and parties voiced serious concerns in unequivocal terms over allowing of FDI into the multi-brand retail trading. The major concern is over the displacement of small retailers by the MNCs, if allowed into Indian retail sector. This issue and other issues are briefly addressed as under:

Primarily, FDI not only brings capital into the host country but also many others which may be certain benefits or adverse effects. FDI basically supplements the domestic investment. No country in the world is completely self-reliant in domestic capital. How much developed a country may be, it seeks to get foreign capital for its growth and development; and the dependence on foreign capital by a developing country like India is obviously large. Developing countries are always capital scarce economies as their capital requirements are always much larger than their domestic savings or domestically available capital. The inadequacy of financial resources in an economy may preclude the business enterprises from seizing the business opportunities arising from globalization. So, foreign capital can be considered as life blood for any developing economy. There is some apprehension that FDI would cause 'crowding out' of domestic investment. But in a developing country like India, the replacement of domestic investment in a particular sector by FDI may result in the release of domestic funds for investment in other sectors, which is necessary for the holistic development of the Indian economy.

FDI would lead to human capital development in the host country. It is empirically observed that there exists a knowledge gap between an MNC and the host economy; and this gap widens if the host economy is much in the underdeveloped stage. The MNCs may adopt their own country standards even in the operations of their subsidiaries in the host economies. This will contribute to human capital development in the host country. The subsidiaries of MNCs which are established through FDI would establish linkages, may be vertical forward or backward integration, or both, with the domestic companies. This will also have a positive influence on the human capital development in the enterprises with which these subsidiaries have linkages. The MNCs may also undertake training of their partners in their supply chain as per the international standards. This will have a


E-Commerce

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demonstration effect. In other words, the MNCs through their recruitment and training policies and practices would indicate what skills are currently in demand. This will help the educationists to design and develop their education programs, ultimately leading to human capital development in the host country. Worldwide, the MNCs earmark a considerable amount in their annual budget for their R&D activity and become very important source of updated technology in every field. The MNCs which cause FDI flows into the host country would also bring in the advanced level of technology, which otherwise not possible for the host country to get. For example, the automotive supplier Bosch has brought into India the technology which hardly any other competitor in the world can match. The MNCs may also become source of technology to the units with which the MNCs have forward and backward linkages. More specifically, the MNCs provide technical assistance, training and other information to their suppliers and also assist them in modernizing or upgrading their production facilities. The aim is to raise the quality of the suppliers' products so that their own (MNCs) products would become qualitatively superior. The MNCs may not maintain any direct linkage with their competitors in the host country. However, the competing companies would always strive to upgrade their technology to match the technological advances of the MNCs. In other words, the MNCs have the potential to generate technological spillovers including horizontal spillovers in the host economy. The host countries may also consider the technological contributions by the MNCs more important than their capital contributions. The organized retailing in India has been increasing consistently, particularly since 1992 with dominant domestic business groups being involved in the multi-brand retail business. But there is no research study which stands as a proof that the small retailers have been snuffed out. India is a very big country with population of more than 1.2 billion. As their incomes rise, they need many more retail outlets and there is a room for every type of retailing, big and small. In fact, the small retailers have their own niche market and that cannot be taken over by the big retailers. For example, there are consumers who want more personalized and customized services. Can the MNCs provide such services? The answer is no.

It is only the small retailers who can provide that. In the present set up, the small retailers are buying their merchandize from the middlemen by paying a high price. Once the MNCs are in multi-brand retail, they can as well buy their merchandize from the MNCs at lower prices and sell them in their towns or places. Thus, the FDI in multi-brand retail in a way help the small retailers to earn better margins on their sales. In other words, allowing FDI into the multi-brand retail sector will hurt small stores, kirana shops, and the hawkers and lead to massive job losses is only a misgiving or speculative apprehension.

Competitive Landscape of Retail TradingGlobalization of trade and investments has transformed the retail sector into highly competitive landscape. With the fast growth of social media the consumers are increasingly well connected than ever before to influence or to get influenced. With increased connectivity, the expectations of consumers are set to change constantly creating a lot of uncertainty to the producers/marketers. Alongside, the retail formats have also changed. Now, the consumers have access to multiple retail formats - offline, online, offline and online, mobile shopping, etc. The rise of online and mobile shopping has changed the entire gamut of retailing. The consumers can now shop anywhere in the world by sitting at their home. With ever increasing new products, new packaging, private label brands alongside branded products, it is increasingly difficult for the consumers to have a fair or right selection of the products. Mass marketing technologies are no longer relevant to woo the customers. The consumers expect that they be given personal recognition, attention and treatment in all the retail offerings. In other words, consumers would like to get personalized experience in all their dealings with the retailers.

The technological revolutions have also created several opportunities and challenges to the retailers. In order to remain global players and sustain and develop customer loyalty, the retailers should refocus on their customers. Being forward looking, the retailers are focusing on their relationship with customers. Sustaining and developing loyalty of customers has become a core issue in marketing. The loyalty programs are revisited and refocused to create personalized shopping experience that recognizes individual customers and meets individual customer needs.


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Retailers can have access to enormous amount of customer data. The retailers can collect customer data as the customers shop in-store and online. While customers shopping in-store the retailers can monitor physical behavior of customers and get valuable information. Retailers may also video-track the customer movements while they are in-store. Retailers may also use social media tracking tools and web searches to track customer on-line movement. Mobile technologies, marketing research and personal interactions are also good sources of customer data. Third party data sources are also used to gather customer data. As the customers use different channels and formats and also change their buying pattern quite frequently, the customer data become very complex to discern meaningful insights. In other words, collecting customer data is one issue, the other but most challenging issue is to mine the customer data to derive logical and useful insights.

It is in this context that the retail analytics has assumed greater importance. Analytics may enable the retailers to analyze and discover meaningful patterns and trends in buying behavior of customers. The retailers can get valuable insights from these patterns and trends to predict the behavior of customers and accordingly change their marketing strategies. As buying patterns and trends change continuously in view of customers being influenced by several dynamic factors, the retailers face a lot of uncertainty in designing their marketing strategies. But analytics can annihilate such uncertainties and enable retailers design programs for better customer retention and increased business performance. MethodologyRetail analytics take different forms. One of them is empirical analysis. The present study is a descriptive research study based on primary data collected from sample of objects selected for the purpose. The methodology of the study is briefly described in the following paragraphs under appropriate subheadings.

Objectivesi To analyze the profile of customers who

patronize corporate retail shops;ii. To study the association between monthly

retail purchase budget and select aspects of retail buying;

iii. To study the association between monthly family income and select aspects of retail buying; and

iv. To elicit the opinions on FDI in retail trading in India.

SamplingAs the study involves informed opinions and perceptions on different aspects of retailing, the sampling frame consists of a highly educated section of the society. That is, the faculty members of a higher education institution in Bangalore were considered as a sample. There were 110 faculty members whom a structured questionnaire was administered but only 107 responded.

DatabaseThe study involves mostly primary data which were collected from the sample units by a d m i n i s t e r i n g a p r e t e s t e d s t r u c t u r e d questionnaire. The questionnaire consisted of 25 questions on profile of respondents and various other aspects of retail buying.

Data AnalysisThe data thus collected from the respondents were analyzed by simple tabulation and by applying chi-square for testing the hypotheses.

LimitationsIt is a study based on a sample of 107 respondents in a metropolis. As the sample represents a highly educated segment of the consuming-population, it cannot be considered as a representative sample of the entire consuming class. The retail traders are very broadly classified into corporate retail outlets (e.g. Reliance Retail, Big Bazar, Metro, etc) and others, conveniently called as mom and pop stores. When used jointly, they are mentioned as retail outlets.

Results and DiscussionOf the total respondents of 107, seventy respondents have a monthly retail budget of less than Rs 10,000 and the remaining thirty seven respondents are in the range of Rs 10,000 and Rs 30,000. It is observed that a majority of respondents do shop in multiple outlets. The null hypothesis is that there is no significant association between the monthly retail budget and the level of patronization of retail outlets cannot be rejected at 1% level but can be rejected at 5% level of significance.(Chi-square: 8.7899; d.o.f.: 3; critical value of Chi-square: 11.345 at 1% and 7.815 at 5% level of significance).Thus, it can be stated that the greater the retail budget, the lower the incidence of patronization.


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In a further analysis, 37 respondents are in the monthly family income range of less Rs 30,000; 46 are in the range of Rs 30,000 and Rs 1 lakh; and the remaining 24 respondents are in the range of Rs 100,000 and above. The null hypothesis is that there is no significant association between the monthly family income of respondents and the level of patronization of retail outlets cannot be rejected at 1% level of significance but can be rejected at 5% level of significance. (Chi-square:15.4842; d.o.f.: 6; critical value of Chi-square: 16.812at1% and 12.592 at 5% level of significance). Thus, there is some semblance of income levels having influence on patronization of retail outlets.

About 39% of respondents use cash method of buying; about 35% use both cash and debit cards; and only about 26% make payment by their credit cards. A sizeable segment of respondents in the monthly retail budget range of less than Rs 10,000 would prefer cash method of buying. The null hypothesis is that there is no significant association between the monthly retail budget and the method of buying cannot be rejected at 1% or at 5% level of significance. (Chi-square: 2.0608; d.o.f.: 2; critical value of Chi-square: 9.210at1% level of significance and 5.991 at 5% level of significance). This is to say that the consumers use different methods of buying irrespective of their level of retail budget.

The association between method of buying and monthly family income of respondents is also hypothesized and tested for significance. The null hypothesis that there is no significant association between the two can be rejected at 1% level of significance or at 5% level of significance. It implies that the consumers use different methods of buying depending on their levels of income.(Chi-square: 21.5325; d.o.f.: 4; critical value of Chi-square: 13.277at1% and 9.488 at 5% level of significance).

The proportion of monthly expenditure on food and grocery is less than 50% in most cases, but it is more pronounced in the case of those who are in the monthly retail budget range of less than Rs 10,000. The null hypothesis is that there is no significant association between the monthly retail budget and the proportion of spend on food and grocery in the total monthly retail budget cannot be rejected at 1% or at 5% level of significance. (Chi-square: 0.2203; d.o.f.:2; critical value of Chi-square: 9.210 at 1% and 5.991 at 5% level of

significance). In other words, consumers use a certain amount of their monthly retail budget for their food and grocery items but not a certain proportion of their monthly retail budget.

The proportion of expenditure on food and grocery items in the monthly retail budget is also related to monthly family income of respondents. The null hypothesis that there is no significant association between them cannot be rejected at 1% level of significance or at 5% level of significance. (Chi-square: 4.4905; d.o.f.: 4; critical value of Chi-Square: 13.277at1% and 9.488 at 5% level of significance). Thus, the levels of income do not have a significant influence on the proportion of expenditure on food and grocery items in the monthly retail budget.

Almost a half of the respondents buy less than 20% of their monthly retail budget from corporate retail stores. Interestingly, a larger proportion of respondents with monthly retail budget of less than Rs 10,000 buy from corporate retail stores. The null hypothesis is that there is no significant association between the monthly retail budget of respondents and the proportion of their monthly purchase from corporate retail outlets cannot be rejected at 1% level of significance but can be rejected at 5% level of significance. (Chi-square: 7.3358; d.o.f.: 2; Critical value of Chi-square: 9.210at1% and 5.991 at 5% level of significance). Further, the null hypothesis that there is no significant association between the income levels of respondents and the monthly purchase from corporate retail outlets can be rejected at 1% level of significance or at 5% level of significance. It is observed that a higher proportion of lower income group respondents buy a small proportion of their monthly budget from corporate retail outlets. (Chi-square: 29.6914; d.o.f.: 4; critical value of Chi-square: 13.277at1% and 9.488 at 5% level of significance).

Why customers would not buy the required quantity of items from corporate retail outlets? There might be many factors that influence the customers not to buy their total monthly requirement from corporate retail outlets. Prominent among them are 'crowding', 'costly', or 'inconvenient location'. There were only 94 samples who responded to this particular part of the questionnaire, of them 32 responded that they had not purchased all their requirement from corporate retail outlets because they are always crowded with a large number of customers; 38 felt


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that the items in corporate retail outlets are costlier; and 24 felt that the corporate retail outlets were inconveniently located. The null hypothesis is that there is no significant association between the monthly retail budget and the factors that discourage customers from patronizing corporate retail outlets cannot be rejected at 1% level of significance or at 5% level of significance. (Chi-square:0.9217; d.o.f.:2; critical value of Chi-square: 9.210at1% and 5.991 at 5% level of significance). Further, the null hypothesis is that there is no significant association between the monthly family income and the factors that discourage customers from patronizing corporate retail outlets cannot be rejected at 1% level of significance or at 5% level of significance. (Chi-square: 3.5550; d.o.f.:4; critical value of Chi-square: 13.277at1% and 9.488 at 5% level of significance).Thus, the discouraging factors to patronize corporate retail outlets are independent of retail budget or levels of income.

The favourable factors to buy from corporate retail outlets are also analyzed. More than 40% of respondents reported quality of the products as the most attractive feature of buying from corporate retail outlets, followed by 30% of respondents reporting price discounts/offers as favourable factors to buy from corporate retail outlets. The null hypothesis is that there is no significant association between the monthly retail budget and the favourable factors to buy from corporate retail outlets; cannot be rejected at 1% level of significance or at 5% level of significance. (Chi-square: 4.0732; d.o.f.:4; critical value of Chi-square: 13.277at1% and 9.488 at 5% level of significance). Further, the null hypothesis is that there is no significant association between the monthly family income and the favourable factors cannot be rejected at 1% level of significance or at 5% level of significance. (Chi-square: 7.4473; d.o.f.: 6; critical value of Chi-square: 16.812at1% and 12.592 at 5% level of significance). Thus, the retail budget or income levels seem to be having no bearing on the favourable factors to buy from corporate retail outlets.

The respondents are also analyzed by favourable factors to shop with mom and pop stores. About 60% of the respondents expressed that proximity of the shop is the most favourable factor to patronize mom and pop stores. A very significant number of respondents also expressed that familiarity/friendship with the proprietor of the store has attracted them to mom and pop stores.

The null hypothesis is that there is no significant association between the monthly retail budget and the favourable factors to shop with mom and pop stores cannot be rejected at 1% level of significance or at 5% level of significance. (Chi-square: 0.6855; d.o.f.: 2; critical value of Chi-square: 9.210at1% and 5.991 at 5% level of significance).An attempt is also made to relate the income levels with the favourable factors to patronize the mom and pop stores. The null hypothesis in this regard is that there is no significant association between the monthly family income and the favourable factors to shop with mom and pop stores. The null hypothesis cannot be rejected at 1% level of significance or at 5% level of significance. (Chi-square: 2.3345; d.o.f.: 4; critical value of Chi-square: 13.277at1% and 9.488 at 5% level of significance). Thus, the consumers patronize the mom and pop stores independent of their retail budget or income levels.

The respondents also differ on their perceptions of price setting. A large majority of respondents are of the opinion that the mom and pop stores set their prices independent of their counterparts in the corporate sector. A null hypothesis is formulated that there is no significant association between the monthly retail budget of respondents and their opinion that the mom and pop stores accept the corporate retailers as their price leaders. The null hypothesis cannot be rejected at 1% level of significance or at 5% level of significance. (Chi-square: 0.2233; d.o.f.: 1; critical value of Chi-square: 6.635 at 1% level of significance and 3.84 at 5% level of significance). It means that the opinions of consumers on mom and pop stores with regard to price setting are independent of their retail budget or income levels.

According to a large majority of respondents, better service and better quality of products are hallmark of multinational corporate retailers. The null hypothesis in this regard could be that the monthly retail budget of respondents and their perception of advantages with multinational corporate retailers are not significantly associated. The null hypothesis cannot be rejected at 1% level of significance or at 5% level of significance. (Chi-square: 1.9714; d.o.f.: 3; critical value of Chi-square: 11.345 at 1% level of significance and 7.815 at 5% level of significance). however, a large majority of respondents perceive that the multinational corporate retailers might eventually cause extinction of mom and pop stores in the


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country. A null hypothesis is formulated that there is no significant association between the monthly retail budget of respondents and their perception that multinational corporate retailers might extinguish mom and pop stores in the country. The null hypothesis cannot be rejected at 1% level of significance, but can be rejected at 5% level of significance. (Chi-square: 4.9575; d.o.f.: 1; critical value of Chi-square: 6.635 at 1% level of significance and 3.84 at 5% level of significance). Thus, the consumers' perceptions about multinational corporate retailers seem to be independent of their retail budget and income levels.

A small majority of respondents have opined that FDI in retail sector is not good in the larger interests of the country. A null hypothesis can be formulated that there is no significant association between the monthly retail budget of respondents and their opinion on FDI in retail sector that it is not good for India. The null hypothesis cannot be rejected at 1% level of significance or at 5% level of significance. (Chi-square: 0.3274; d.o.f.: 1; critical value of Chi-square: 6.635 at 1% level of s i g n i f i c a n c e a n d 3 . 8 4 a t 5 % l eve l o f significance).A null hypothesis can also be formulated as that there is no significant association between the monthly family income of respondents and their opinion on FDI in retail sector that it is not good for India. The null hypothesis cannot be rejected at 1% level of significance or at 5% level of significance. (Chi-square: 5.1985; d.o.f.: 2; critical value of Chi-square: 9.210 at 1% level of significance and 5.991 at 5% level of significance). Thus, irrespective of their retail budget or income levels, the consumers are of the opinion that foreign direct investment in retail sector is not good for the country.

More specifically, the respondents are almost equally divided over their perception that the multinational corporate retailers would aggravate unemployment and thus the incidence of poverty in India. About 60% of respondents perceive that the multinational corporate retailers might exploit Indian resources including human resources to their advantage, if permitted to do business in India. But at the positive side, 70% of respondents feel that the multinational corporate retailers would bring better technology and management systems along with capital, if they are permitted into India.

ConclusionsThe study brings out some interesting revelations. The consumers in the upper income group would tend to buy their wish-list from multiple retail outlets. It means that they do not patronize any particular retail outlet(s) for their requirements. The proportion of spend on food and grocery in the monthly retail budget is less than 50% in most cases. It is independent of income level or retail budget level. A large majority of consumers patronize the corporate retail outlets only for about 20% of their retail budget. In other words, the mom and pop stores continue to be the most dominant players in retail trading. Proximity and cordial relations with shop-keepers are the most dominant factors in patronizing mom and pop stores. It is the quality of products and quality of service that drive the consumers to buy from corporate retail outlets. Notwithstanding some conspicuous advantages, the multinational corporate retailers may become effective agents in the extinction of a large number of mom and pop stores across the country, which will eventually add fuel to the fire of chronic unemployment in the country.

References:

Anna-Lena Sachs. Retail Analytics. Springer International Publishing.

Emmett Cox. Retail Analytics: The Secret Weapon. Wiley and SAS Business

Series.

Stefan Niemeier. Reshaping Retail. Kindle Edition.


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*Associate Professor & Dean-Academics, The Oxford College of Business Management, HSR Layout, Bangalore, [email protected] **Professor & Head, Dept. of Management, Sir Vishveshwaraiah Institute of Science & Technology, Madanapalle, Andhra Pradesh, [email protected]

KEY WORDS Effectuation;Entrepreneurship Strategy;Ideation;Opportunity Recognition

The Relevance of Ideation, Opportunity Recognition andStrategic Entrepreneurship Linkage � A fresh perspective

Prof. Monoo John*, Dr. T. Dula Babu**

Ideas are born out of chaos. Idea generation is therefore all about breaking patterns. It is also true that a great majority of start- ups fold up or drag along in what is called the land of the living dead. Many failures are predestined and predictable because many entrepreneurs lose sight of their objectives by focusing on ideation and strategy while overlooking the existence of the opportunity. It is also found that the decision to launch a new venture rests not only on an assessment of its viability and its attractiveness-which are the hallmarks of opportunity recognition-but depend upon the superior execution of strategies. Strategy formulation and execution before opportunity evaluation leads to enormous failures. Still many businesses continue to die young because instead of investing on establishing the idea creation and opportunity recognition and superior strategy linkages, entrepreneurs spend most of their time obsessing over their one big idea that has inspired their start- ups.

This paper examines the critical elements of innovative entrepreneurial approaches and practices and explores the formulation of speci�c guidelines by establishing �rm linkages between ideation, opportunity existence and discovery and strategy integration and execution. Inferences and conclusions are drawn from the research of Amar Bhide (1993), John W Mullins (1996), Howard H Stevenson (1985), William A Sahlman (1997), Ian Macmillan (2000), Azhar Kazmi (2008) and others. This paper examines the power in the linkage and explores the potential in such innovative practices for ventures and start ups to succeed in the new market place.

The fortunes of an organization depend not only on its innovative products and the ideas behind it but more importantly on its inherent strengths which enable it to discover the opportunities and execute strategies to establish leadership and differentiation in a highly dynamic business environment. In other words, young entrepreneurial organizations must recognize the fact that it is not enough to build a single fantastic product: to succeed in the dynamic marketplace the product needs to be backed by timely opportunity recognition and execution of superior strategies. The power in the idea and innovation lies in this idea - opportunity - strategy linkage.

Abstract

Entrepreneurship and the inherent bene�ts of wealth creation, as well as employment generation that the entrepreneurial culture it fosters, are critical to economic development and sustenance. The entrepreneurial domain has many �avours. These �avours have given rise to as many entrepreneur types. Many such entrepreneurial ventures never get off the ground. Many �zzle out after spectacular starts. Each failure essentially arises from a mismatch between the ideas, the opportunities existing for the venture and the strategies executed for the venture to succeed. Every entrepreneur goes through two phases in his or her entrepreneurial journey-the chaotic phase and the execution phase, which translates into multiple failures. The entrepreneur will, either give up as most do or must realize the essential connection between the ideas, the discovery of the opportunities and the execution of realistic strategies in a highly dynamic churning business environment.


Introduction

An entrepreneur is one who organizes, manages and assumes the risks of a business or enterprise.' This is how the Merriam Webster dictionary defines an 'Entrepreneur'. But how do the entrepreneurs see themselves? The concept of an entrepreneur as the one who is driven by the greed of great wealth and fame is, in reality, a fallacy. True entrepreneur achievers are essentially motivated by a great idea which in turn brings in

great riches. Money issues are intrinsic to the entrepreneurial process but it is not the core purpose. It is the idea within that drives an entrepreneur, possesses him or her and shows that entrepreneurs and entrepreneurial ventures are hardly rational. So, should a breakthrough idea be one that is enduring as well as earthshaking? Would it represent an immediate opportunity or is it for the future? Should it be a fresh idea, brand-new or would it be something that is practical and useful?

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Integrating entrepreneurship processes with Innovation and opportunity LinkagesHarvard Business Review, (2006), postulates on a theme in which a breakthrough idea is a springboard, not a perfect landing, a conversation provoker, not a definite answer, a starter gun, not a finish line. It is something that makes one stand up and take notice, not sit down and work out the application of a specific formula. 'Driven by an idea' is therefore an important characteristic for the domain of entrepreneurship. But for an idea, even a breakthrough idea to create value and business, discovering the opportunity and developing the idea around the opportunity is an essential activity for entrepreneurs. Avinash Bajaj, Bazee.com says, “if we look around, we can find a lot of examples of opportunities where things can be done better. For example, you and I know that there is an opportunity but only an entrepreneur actually gets down and does something about it or with it.”

K.Ganesh of Tutor Vista.com, heard parents criticizing the education their children were receiving and realized that through the internet, people might be able to train and educate their kids better. Ganesh launched Tutor Vista which entitled a student to an unlimited amount of tutoring in a wide variety of subjects thereby helping students in various countries to not just learn but also by providing satisfying jobs for some of India's bright talents. In less than two years Tutor Vista.com had grown to employ more than 200 instructors who serve more than 10,000 students across a wide range of subjects. Online tutoring was likely to evolve into a market with few big winners, and Ganesh wants to ensure that Tutor Vista takes advantage of its early advantage entry to build critical mass and emerge as one of the best known names in the field. Later while exploring new growth paths for his business, Ganesh realized the value of focus and believed in pursuing one or two opportunities. He knew that his drive and intensity would produce better results than putting the same amount of effort behind half a dozen growth opportunities. The idea – opportunity linkage is therefore critical to the existence of an enterprise and to sustain it.

In exploring this linkage, a survey of small businesses and start ups across the country several reveals certain interesting facts. 46% of respondents focus on launching new products and services. 32% plan to enter new markets and 27% explore new lines of business. As far as funding is

concerned, two –thirds of the respondents stated that they explored infusing considerable amount of funding from banks, angel, venture capital firms or Private Equity. 16% of the respondents focus on an acquisition or a merger in the near future. 66% of the respondents feel that their business is growing. 40% have reported a negative growth. Most of these 40% are from the services sector, which is alarming because it is generally known that the services sector is experiencing robust growth.59% of the respondents achieved 90% or more of what they targeted with 11% stating they are actually doing better than expected. 18% said their performance was less than 80% of what they had expected.

Avinash Bajaj of Bazee.com points to the success of bazee.com to prove that even standard ideas, if implemented well and wrapped around the opportunities that exist and are discovered, can make all the difference between entrepreneurial success or failure. What an entrepreneur does is to spot an opportunity and execute plans on the basis of this insight

Ideas- Opportunity Linkage Fact file

a. Organic Sector• Organic farming is based on a traditional

approach to sustainable agriculture that relies on natural products and organisms to do the job that fertilizers and synthetic chemicals are doing now. The global market for Organic products and services is worth $ 40 billion today That proves a 15% growth. And what is India's share in the global organic pie? $ 300

rdmillion and recognition as the 33 largest producer of organic products.

• Organic Café - Imagine drinking your regular tea/coffee/fruit juices in the organic equivalent of Café Coffee Day (Dubden Healthy Living)

• Organic Fashion- A line of organic clothing and fashion wear that depends only on organically produced fibers and vegetable dyes (Satya Jyoti Trust)

• Brand Organic- An entire line of organic tea branded-blended with Marshmallow, tulsi, Gooseberry, Cumin. (Biotique)

• Organic Holidays – How about an organic tour/holiday in an organic resort?- Organic cottages, organic food etc are all on offer.(Sahara Organic Resort and Farm)

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b. Green EntrepreneurshipMost of those in business agree that it is no longer a choice between 'save your money' or 'save the trees'. The green space may well become a green pasture for entrepreneurs.

• Green investing encompasses ventures in renewable energy sectors including wind, solar, hydro power, bio fuels, biomass, rural energy, technologies, waste management, new energy technologies, and consumer durables such as energy efficient home appliances, green construction and water treatment- air pollution control equipments

• E-waste recycling• Waste management• Tidal energy• Bio fuel• Organic farming• Green construction• Wind turbine• Hydro power• Solar energy

The success mantra here is that new ideas or doing things differently will help an entrepreneur do well. Entrepreneurship is all about constantly innovating and exploring new lines of business listening to people around and to be able to pick ideas from the vaguest of places, converting these ideas into actionable items.

Idea – Innovation and Lateral ThinkingFor Innovation to take shape and create value, a brief look at the critical factors postulated by DeBono and associated with lateral thinking can provide clarity. The factors are:• Recognizing dominant ideas that polarize

perception of a problem.• Searching for different ways of looking at

things.• Relaxation of rigid control of thinking• Using chance to encourage other ideas. That

is because lateral thinking involves low probability ideas, which are unlikely to occur in the normal course of events.

De Bono (1967) describes a scenario to explain these factors:

A merchant who owes money to a money lender agrees to settle the debt based upon the choice of two stones (one black, one white) from a moneybag. If his daughter chooses the white stone, the debt is cancelled, if she picks the black stone, the money lender gets the merchant's daughter. However, the moneylender 'fixes' the

outcome by putting two black stones in the bag. The daughter knows this and so when she picks a stone out of the bag, she immediately drops it onto the path full of other stones. She then points out that the stone she picked must be the opposite colour of the one remaining in the bag. Unwilling to be seen as being dishonest, the moneylender agrees and cancels the debt. The daughter has solved the problem by using lateral thinking to ideate by recognizing an opportunity in the myriad stones strewn about on the floor.

Besides, in order to get a different viewpoint, a problem could be broken up into its basic elements and integrated or combined differently. Ideas come from inconveniences and innovative ideas and new business creation are essentially random processes in which there are high odds of failure as opposed to the huge rewards of possible success. Innovation and Economic conditions It is also important to acknowledge the four critical economic conditions inf luencing opportunities and which determine the success and failure of ideas. These are:

a. Buyer Utility – Is there a compelling, desperate reason for costumers to buy a product or service? Utility and technical advantage is not the same.b. Business Model- How can a company profitably deliver the new product or service idea? Are the costs, pricing and features capable of facing up to the challenges?

c. Strategic Pricing – How can a new venture price its new product or service to attract the market, to capture the buyers?

d. Adoption Hurdles- Are these reasons why an idea may not be accepted by customers, employees, strategic partners, governmental regulations, or society?

Opportunity recognitionEntrepreneurship starts with the ideas -opportunity connect and the challenge really is where to find opportunities. It may be postulated that divergent thinkers or even imaginative thinkers/ideators tend to note opportunities or problems. Curiosity and attention/ alertness are essential for noticing what's wrong or what an opportunity is. True ideators define the issue by going beyond the symptoms to the core- to the need, the want, or the fear. They isolate what they Are looking for, searching for. They focus. Successful entrepreneurs are seen to be true

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ideators who recognize opportunities in the unexpected, incongruous and innovation. They recognize changes in industry and market structure, demographic shifts, changes in perception, mood and meaning and new knowledge. It follows therefore that good ideas are not always good opportunities nor are they viable concepts. Concepts are built using ideas, entrepreneurial creativity in real time and they are built to tackle real problems. Opportunities then yield measurable benefits to, entrepreneurs and to society. John W Mullins (2003) maps out the opportunity- shaping process by providing a seminal framework- the seven domains of attractive opportunities- which ensures the success of an entrepreneurial venture.(ADD)

Entrepreneurial traits and Opportunity RecognitionEarly research on opportunity recognition explored how certain entrepreneurial traits influenced the creation of new ventures and their growth. Attempts were made by several researchers to explain how these special qualities or unique forces allowed entrepreneurs to create and grow their ventures. These forces, including the ability to innovate and to transform (Schumpeter, 1934), were said to have brought about the growth of entrepreneurship. Later, in the early 1990s, authors such as Gartner (1985) changed the direction of entrepreneurship research by bringing into focus the interaction between such new elements as the process of creating new firms, the entrepreneur, the environment and the firm itself. Gartner (1988) was also critical about the focus being limited to the entrepreneur alone and to his/her traits. Byg rave and Hofe r (1991) t e r med the entrepreneur an initiator and who had a different approach towards developing and exploiting opportunities. A detailed investigation of the cognitive thinking processes of entrepreneurs was attempted by Shaver and Scott (1991). It is important, therefore to try and understand why entrepreneurs are able to recognize the potential in a visibly chaotic situation and pursue the opportunity which only they can see while others fail to see the same opportunity or, when they do see it, fail to pursue it.

a. Creative destruction and Opportunity recognitionSchumpeter (1934) defined the term 'creative destruction' which recognized the ability of entrepreneurs to create new products and new

processes to transform and to innovate. The constantly changing environment positions the entrepreneur as a part of the entrepreneurial process of ideation, innovation, opportunity recognition and strategic exploitation of opportunities (Delamar, 2000). According to Schumpeter (1942) established firms can create road blocks to new entrepreneurs who may not have the requisite knowledge or the finances to compete with these already settled and stable firms. This suggests that entrepreneurs play a more prominent role in markets that are not already occupied by large firms. In such markets, technology is advancing at such a rapid rate that barriers to entry are non-existent.

b. Entrepreneurial motivationThe motivations required to be an entrepreneur are clearly identified in McClelland's theory, McClelland (1961) as well as by Rotter (1996) who defined the locus of control that has become the driving force in entrepreneurs. Carter, (2003) explored six main motivating factors i.e. innovation, independence, recognition, roles, financial success and self-realization. However, he failed to discover significant differences between the important career aspirations of entrepreneurs and non-entrepreneurs. Innovation and opportunity recognition are motivators that differentiate entrepreneurs from the others.

c. Entrepreneurial alertnessKirzner (1973) suggested that entrepreneurs possessed or obtained specialized knowledge and could use it to create or exploit opportunities. This is reinforced in later studies (Kaish and Gilad, 1991; Busenitz, 1996) where entrepreneurs were shown to be more active in seeking opportunity than corporate managers. Hills and Shrader (1998) and Zietsma (1999) also found that the successful entrepreneurs had high levels of entrepreneurial alertness. Timmons (1999) proposed that successful entrepreneurs have the capacity to see what others do not. Timmons (1999) cites two scientists, Edison and Einstein who between them wrongly predicted that the nickel battery would replace gasoline and that nuclear energy would never be obtainable. This reinforces the proposition that even the most brilliant scientific minds are not always fully tuned to business opportunity. However, having available technology or even opportunity on show and available is just one part of the equation. It also requires an entrepreneur to be alert to its potential reapplication opportunity and willing to

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take the risk of starting a business to exploit it. In other words, it requires a Schumpeterian champion to engage in creative destruction of an existing market.

d. Internal and external interactionGar tner (1985) ident i f ied the exter nal environment influences as a key factor affecting an individual's behavior. An individual's behavior often changes as they gain experience and knowledge through interaction with the world around them. Moore (reproduced in Bygrave, 1997) proposed that the entrepreneurial process can involve the interaction of external environmental factors with individuals or collective personalities involved in starting up the firm. Moore (reproduced in Bygrave, 1997) also proposed a stepwise process involving, innovation, triggering event, implementation and growth, outlining how the combined interaction of both individual personality and external environmental factors can influence each of these stages. Understanding the triggering process is very important because it is from this point that the 'scientist' turns entrepreneur and their thought paths change or the entrepreneur decides to back a scientist with a technology invention/innovation in a business venture.

e. E n t r e p r e n e u r i a l s e l f - e f f i c a c y a n d Entrepreneurial intentThe concept of entrepreneurial self-efficacy is based on the thought that entrepreneurs need to perceive a certain level of self-confidence in their entrepreneurial abilities before they get into the venture they wish to create (Bandura, 1986). Boyd and Vozikis (1994) suggest that self-efficacy plays an important role in the development of entrepreneurial intentions and actions. Other authors build on this by suggesting that actual intent to start up in business, possibly fuelled by entrepreneurial self-efficacy, is the best predictor of eventual entrepreneurial behavior (Krueger et al., 2000). It is observed that many entrepreneurs get into business before discovering the opportunity (Zietsma, 1999). Such entrepreneurs are, by definition, more receptive to opportunities as they simply need to find one to generate their flow of income. Chen (1998) suggests that it is entrepreneurial self-efficacy in five key skill areas: marketing, innovation, management, risk-taking and financial control which are key differentiators between people actively interested in setting up in business and those who have already started.

f. Learning to manage risk and uncertainty Researchers are increasingly focusing on defining the cognitive mechanisms used by entrepreneurs to process information (Shaver and Scott, 1991). Palich and Bagby (1995) found that entrepreneurs did not regard themselves as being more willing to take risks than managers in established firms. On face value it would seem that the risk and reward theories (Knight, 1921) are not true. However, just because entrepreneurs do not perceive themselves to be more willing to take calculated risk, does not mean that they are risk averse. This only implies that they simply do not perceive themselves to be taking risks; the actual reality may be very different. The strategic management literature also suggests that the use of cognitive short cuts is not restricted to entrepreneurs and that strategic decision-makers also adopt such processes (Dutton and Jackson, 1987). Work by Gooding (1989) provided evidence that when presented wi th unequ ivoca l da ta , manager s and entrepreneurs processed the data in exactly the same way and arrive at the same conclusions. However, when presented with equivocal data, the entrepreneurs viewed it in a consistently positive manner. Palich and Bagby (1995) confirmed in a s t u d y s p e c i f i c a l l y c o n d u c t e d a m o n g entrepreneurs and managers that entrepreneurs interpret data perceiving strengths versus weaknesses and opportunities versus threats. The uncertain world in which entrepreneurs exist renders overly cautious decision making simply impossible (Baron, 1998). Many situations regularly faced by entrepreneurs (including information overload, high uncertainty, high novelty, strong emotions, high time pressures or fatigue) frequently result in increased usage of cognitive biases or heuristic thinking processes. In such situations, the human brain suffers from an excessive amount of information to process. In order to reach a conclusion the brain attempts to find cognitive short cuts to ease the burden. One example of this is using experience to interpret uncertain situations by comparing it to a previous frame of reference as evidenced by Busenitz and Barney (1997) and Baron (1998). It has also been demonstrated that repeated use of these processes can lead to a degree of entrepreneurial overconfidence (Busenitz and Barney, 1997). As entrepreneurs repeatedly encounter situations of uncertainty, they become proficient in the use of heuristics to make reliable decisions with limited information in short timeframes. These system simplification processes manifest themselves in

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the form of a number of cognitive biases (Baron, 1998 ) . Such cogn i t ive b ia se s inc lude : counterfactual thinking-the effects of imagining what might have been; affect infusion-the influence of current states of thinking on decisions and judgments; attributional style-tendencies by individuals to attribute various outcomes to internal or external causes; the p l a n n i n g f a l l a c y - s t r o n g t e n d e n c i e s t o underestimate the time or effort required to complete a piece of work; and self-justification-the tendency to justify decisions even if they result in negative outcomes. This leads to the proposition that these thinking processes can be learned and even taught to prospective entrepreneurs. This may also offer a partial explanation why simply being intellectually adept (e.g. scientist or engineer) does not guarantee entrepreneurial success (Oakey, 2003). Scientists use a logical inclusive thinking process that almost has to be unlearned in the real world of business or complemented with an entrepreneurial partner already equipped with such skills.

g. Do cognitive biases generate innovative solutions?Kickul and Gundry (2002) demonstrate how a proactive entrepreneurial personality can precipitate a number of Schumpeterian innovat ions (new markets, products or organizational systems) as a result of their involvement in the firm. Baker et al. (2001) proposed that improvisation is a key part of business start-up. Baker et al. (2001) suggest that the start of the design process often coincides with the commencement of the business venture and that improvisation in the face of changing cus tomer expec ta t ions could be a key organizational skill.

h. Towards a model of opportunity recognition Based on a study of the opportunity recognition process by Gartner (1985, 1988),researchers have approached this issue by developing a model which incorporates three integrating elements –the creators or entrepreneurs, the totality of experiences of the organization and the availability of technology. This approach was executed by shane (2000) in order to explore the opportunity recognition process better. This model determines the different ways in which these elements interact and also integrate with each other to finally decide the quality of innovation that the organization might apply.

Developing entrepreneurship strategies that workThousands of entrepreneurial ventures take birth every year but most do not survive. It is an accepted fact that risk is intrinsic to all entrepreneurial ventures and the risk factor becomes prominent because of a mix match between the entrepreneurial idea, the opportunity and the execution of strategy. Many just born enterprises are seen to be drifting in the wind without coherent strategies, competitive strengths, requisite skills, adequate controls and relationships.

When the killer earthquake hit Gujarat in the winter of 2001, Mansukhbhai Raghavbhai Prajapati, a potter was among those who were left with nothing. His warehouse that stored pots and pans had been cr ushed to the g round. Mansukhbhai's story of survival appeared in the form of a photograph in a Gujarati newspaper with him sitting next to the broken clay pots with the caption 'The fridge of the poor breaks into pieces.' This photo caption gave birth to the idea of a clay fridge that would be affordable to the poor. The result was a refrigerator (Mitti cool) that cools water naturally while keeping food such as vegetables, fruits fresh for several days. It does not use any electricity and hardly needs to be serviced. And it costs only Rs.2000. Mansukhbhai has till date sold 700 clay fridges and his innovation attracts customers from the urban areas as well. It is evident in this innovation that the idea- opportunity- strategy connect has worked to maximize the advantage to the entrepreneur.

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Strategy in Entrepreneurship Significance of Effectuation as a strategic initiativeEffectuation as a strategy initiative is considered to be a radical idea which is still evolving (Sarasvathy, 2007). But it is not just a deviation from rational choice but a decision making strategic tool. It runs parallel to predictive rationality and is seen to be systematic, based on principles and practical applications. Effectuation is not a random theory but a definite theory of creativity. It explores elements that make things valuable and how value can created. The theory of effectuation is essentially based on three elements – decision related problems, logic and inverting the principles of rational choice.

a. The decision problemWhen an independent environment or a predictable situation or a foreseeable outcome is not visible, the theory of effectuation clarifies on a method to solve decision making problems and issues defined by Knightian uncertainty (Knight, 1921), Marchian goal ambiguity (March, 1982), and Weickian enactment (Weick, 1979). Entrepreneurs face typically such issues where they face uncertainty, ambiguity about goals and inactivity. For example, when an attempt is made to introduce a radical product, the entrepreneur cannot depend on forecasts about potential demand because there is no market as yet. Knight theorized that one could segment “uncertainty” in three ways: first, problems that could be framed in terms of a bet on a known distribution of outcomes (conventionally called “risk”); second, problems that could be framed in terms of an unknown distribution of outcomes that can be approached through Bayes ian lear ning (conventionally known as “uncertainty”); and third, problems that could not be framed at all, because no distribution of outcomes exists (known as “Knightian uncertainty”).

Situations of risk and uncertainty are normally made tractable (for modeling purposes) by the attribution of subjective probabilities to future scenarios, upon which some form of calculus (estimation and/or analysis) can be made to operate. Situations of Knightian uncertainty, however, are characterized by the fact that they are intractable under the logic of any form of predictive rationality (rational choice theory being the prime example of predictive rationality).

Knightian uncertainty involves the absence of anything that might succumb to known forms of

probabilistic calculi, what Shackle (1979) termed a future not only unknown but “unknowable”. Effectuation presents a new and viable alternative, and is based on a completely different logic (exactly inverse, to be precise) than rational choice.

b. Underlying LogicThe logic behind the Effectuation process is the extent to which one can control the future; there is no need to predict it. Effectuation focuses on controlling events and aspect that bring about elements of control. It helps the entrepreneur to eliminate or minimize the need to predict- Knightian uncertainty and surprisingly defines the future the way the entrepreneur wants it. As Sarasvathy,(2001) states, there are three categories of means –who the decision maker is, which could be an individual, a firm, the economy or population as a whole; what he or she knows; whom he or she knows. It can therefore be stated that the venture creation process will begin with the answer to the question that the decision maker is rather than a presumption of a existing market. Preliminary decisions will be about delivering innovative products to customers without calculating immediate revenues and these customers will be identified randomly rather than through detailed market research. The creation of the enterprise will depend on the networks that the entrepreneur would have formed and how this network would handle unexpected events while creating the enterprise. Finally the strategies followed by the venture would attempt to control and create a market for its product rather than to predict and follow a preexisting market.

c. Inversion of the distinctive principles of rational choiceBy focusing on the effectuation process as a definitive strategic initiative, it is understood that there are three distinct ways by which it transforms uncertainties into opportunities. They are postulated as follows:

1. Calculated risk of affordable loss – The entrepreneur seeks to focus on controlling loss making events or by transferring the financial risk of the venture to its stakeholders.

2. Firmness of the commitments made by the stakeholders- Through these commitments, entrepreneurs can focus on creating new preconceived markets. The structure of the new market depends on these commitments and how

16


firm they are.

3. Knowledge through unexpected events and situations-contingencies can be seen as an opportunity for knowledge creation of an emerging situation which in turn can be used by the entrepreneur to decide, control and create. Citing (Lindblom, 1959) who discusses decision making under conditions of uncertainty, effectual decision-making is often based on a vague notion of the end objectives and which utilizes uncertainty and contingencies to clarify these very goals.

A p p l y i n g E f f e c t u a t i o n s t r a t e g y t o entrepreneurial processesThe key to understanding and applying effectuation is to realize that it co-exists with rational choice and provides an additional set of tools to the decision maker. In fact, one of the most fruitful areas for future empirical work in this regard would consist in carving out the space and bounds for the use of these two very different modes of reasoning, and better understanding how they interact. Under what circumstances what types of reasoning work and why?; how to design and implement decision procedures that work in parallel to tackle the different dimensions of different types of circumstances; whether to develop teams that do both in parallel or to stagger them in iterative cycles? - are all possible questions for future empirical research in effectuation. Effectuation reinforces the fact that decision-making is situational and episodic – i.e., it depends on the circumstances such as the life cycle of the product, or stage of development of the firm, etc. (Kuepper and Mauer, 2008). The key question between causation and effectuation is not which is better in an absolute sense, but which is more efficacious under what circumstances (i.e. what are the consequences of framing and reasoning ef fectual ly, compared to the consequences of framing and reasoning using predictive rationality).

During the time of Schumpeter's writings about innovation (Schumpeter, 1976), other researchers were exploring the manner in which inventions and innovations seemed to happen.In recent times Von hippel (1976) has worked on the importance of social processes in innovation occurrences. Effectuation actually explains how users innovate; by experimenting with different ways of innovating existing products and services. This is being effectual. When the focus of the

entrepreneur is on what should be or ought to be done with products and services as per manufacturers' instructions then, the process can be called causal or predictive. In being effectual innovators actively imagine and create new utilities for existing products and services (Bianchi, 1998). Entrepreneurs are also beginning to observe users of their products and services and recognize the new ways in which they utilize them (von Hippel, 1976) and thus allow the same users to innovate the final product or service.

First-mover advantages and consumer preference formationAccording to Wind & Mahajan, (1997), an important question to be answered is why market pioneers have long term advantages over others that enter the market afterwards. Carpenter & Nakamoto(1989) state that , “Pioneering advantage can arise from the process by which consumers learn about brands and form their preferences. This process can produce a preference structure that favors the pioneer.” Long lasting consumer preferences are essentially developed by the pioneers rather than being found. Also entrepreneurs sometimes succeed in the market by influencing these preferences rather than by responding to the market. Effectuation theory when integrated with the explanation of formation of consumer preferences gives clarity to situations where preferences (ends) do not pre-exist, consumers choose effectually based on the materials available (means). Effectuation, resolves the problem of determining how, in the absence of goals, people acquire goals. It explains March's (1982) statement for a process that explains how individuals construct new values and preferences.

The Strategy – Entrepreneurship connectEntrepreneurs today are challenged by the huge number of decisions they must make and to make decisions that are right for their business. But entrepreneurs hardly have the time to experiment and explore an analytical approach and to plan. By the time an opportunity is investigated and planned (strategized) fully, it may no longer exist. The evidence available through a multitude of successful and unsuccessful entrepreneurial journeys, points towards three general guidelines.

» Opportunities must be evaluated quickly and unpromising opportunities should be screened out. Success in the business actually

17


requires a competency which comes from a connect between a creative idea, a realistic opportunity and a superior capacity for executing the right strategy. This would depend on the objectives of starting a venture, exploring opportunities in a changing/ dynamic business environment and deciding on what basis to compete – following proven management practices or to persevere doggedly with the primary idea.

» The attractiveness of the business proposition must be measured by evaluating the inherent risk and worth as compared to other opportunities. An attractive venture is one that should bring considerable value which would balance the value given to the business by the entrepreneur.

» Analysis and planning is essential but must happen quickly because an entrepreneur has to carry on with the execution of strategies while being surrounded with critical uncertainties. Therefore, entrepreneurs who wish to exploit and escalate factors such as changing technologies, customer preferences or rules and regulations should necessarily avoid extensive analysis.

Amar Bhide, (1994), says that eventually “entrepreneurs must be smart enough to recognize mistakes and change strategies”. Entrepreneurs are like gamblers in a casino who know they are good at the game and are therefore likely to win. They believe that they are smarter, more creative and harder working than most people and with their unique and rare skills they are essentially doing the investors a favour by taking their money. But this arrogance though justified must face up to adversities such as when customers do not favour their product, or the product itself does not work to satisfy needs or when there is no more cash to spend on the project.

An analysis of responses, from entrepreneurs of some of the fastest growing companies reveals that entrepreneurs spend very little effort on planning.

Most entrepreneurs thrive in highly dynamic industries and niche markets. It is seen that they believe more in executing strategies than spend time in carefully planning. To emphasize the importance of strategy execution over planning which in turn brings about the right connect between idea- opportunity- strategies. The big issues that must be addressed by entrepreneurs are:

1. Are the goals well defined? Is there clarity on personal aspirations, business sustainability and size and the extent of tolerance to risk?

2. Is the strategy right? Is it well defined? Have the profitability and potential for growth factors been factored in? How durable is the business and what is the rate of growth.

3. Finally does the Entrepreneur have the capability to execute the strategy? Does he have a l l the r e l evan t r e source s, infrastructure? Does he/she understand his/her role as founder?

Innovation – Opportunity – Strategic Entrepreneurship fact-fileThis linkage is visible in the fact-file given below, about entrepreneurs, who changed the way India does business.

Captain G R GopinathIt is one of the ironies of life that it took a retired army man turned sericulturalist, to make flying affordable to the masses and thus rewrite the rules of the commercial airline business in the country. While he was able to change the Industry's landscape beyond recognition he has had to sell a majority stake in the airline he created to keep it afloat.

Varghese KurianThe original social entrepreneur, long before the term became fashionable, Kurian came from Kerala, went to the U.S, worked his magic in Gujarat and gave farmers all over the power to negotiate the best price for their produce. In the process, he pitch forked India from being a recipient of milk aid to becoming the world's largest producer of milk and milk products. He built the first all Indian brand-AMUL.

Raman RoyThe father of outsourcing, Roy was instrumental in helping change, the way American and

18


European companies did business, employing a full generation of young Indians and contributed significantly to the great Indian success story which is outsourcing. Significantly to the great Indian success story which is outsourcing.

Future research directions and ConclusionIn this paper, we have explored the irreversible cycle of creative destruction, opportunity recognition and strategic entrepreneurship in a constantly changing environment and which brings about the creation of new products , services and innovative processes- a myriad transformations through th destruction of old products, services and processes. In the process, we have attempted to build a few building blocks for more advanced studies in these areas. It is obser ved tha t deve lop ing, recogniz ing opportunities and exploiting them requires entrepreneurs to understand his / her motivations, be alert to see and recognize what others do not, and unders tand the t r iggers tha t push entrepreneurs towards creative destruction and to perceive a cer tain self efficacy in their competencies. Further investigations need to be carried out at a fairly advanced level on the impact of idea generation and creative destruction on the business environment.

This paper has three important discussions leading up to the specific purpose of exploring the l inkages between ideation, oppor tunity recognition and entrepreneurship strategy. The first discussion is about the idea – opportunity construct and explores how entrepreneurs are driven innovate through difficult circumstances and seemingly insurmountable inconveniences.The second discussion is an examination of the opportunity recognition process involving a set of unique forces that when combined with three integrating elements – the creative destructors, the totality of experiences and the technology leads to innovative and successful products, service or processes. The objective was to clarify on the criticality of the idea – opportunity connects for effective entrepreneurship.

This blurring of boundaries between creative destruction and opportunity recognition is what inspired us to examine the viability of integrating strategic entrepreneurship with these two elements. The final discussion explores the essential nature of entrepreneurial strategy and the creation of value. Strategic perspectives, which is essentially advantage-seeking, when

integrated with entrepreneurial perspectives, which is opportunity seeking, has the potential to create, enhance and sustain value. The complexity of business operations and their administration makes it imperative to move away from traditional management approaches and to embrace strategic entrepreneurship. This paper is an attempt to integrate entrepreneurial processes such as ideation and opportunity recognition and entrepreneurship strategy which is built upon strategic agility, creativity, flexibility, continuous innovation, effectuation and rational choice principles. An attempt is also made to bring about clarity on the subject of effectuation as a strategic initiative. The three elements that make up the core of effectuation theory – decision related problems, logic and inverting the principles of rational choice are explored in the context of strengthening entrepreneurial processes and creating effective outcomes.

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Dr. S. Dilli*, Dr.K. Jayachanra Reddy**

KEY WORDS AICIL;GIC;Performance;Pro�tability

Introduction

The insurance sector plays a vital role in the process of the economic development of any country. It has a positive correlation with economic development in any economy. It acts as mobilize of savings, as financial intermediary, as promoters of the investment activities, as stabilizer of the financial markets and as a risk manager Insurance Service leads to efficiency and productive allocation of Capital resources, facilitate growth of trade and commerce. Globalization will certainly increase insurance penetration and all sectors showed equip themselves to exploit the opportunities offered by the sector. By indenting the service of insurance coverage geographically so, “Every family in every remote village in the community feels safe and secure”. Insurance industry has always been globally growth-oriented industry. On the Indian scene too, the Insurance industry has always recorded noticeable growth vis-a-vis other Indian

industries. Triton Insurance Co. Ltd. was the first General Insurance Company to be established in India in 1850, whose shares were mainly held by the British. The first General Insurance Company to be set up by an Indian was Indian Mercantile Insurance Co. Ltd., which was established in 1907. The term "Insurance Penetration" broadly measures the contribution of the insurance industry in relation to a nation's entire economic productivity. The figure of premium vis-a-vis the GDP of 1999 stood at 0.54 per cent for non-life Insurance business and 1.39 per cent for the life Insurance business.

At present GIC and its subsidiaries are functioning through a vast country wide network, which is spread across the length and wideness of the country. But now the Indian Insurance Industry is going through a process of change. Particularly before opening up the insurance sector, India is sorting out regulator issues. Insurance Regulatory Authority has already

Abstract

The insurance sector plays a vital role in the process of the economic d e v e l o p m e n t o f a n y country. It has a positive correlation with economic development in and economy. Insurance industry has always been a growth-oriented industry globally. On the Indian scene too, the Insurance industry has always recorded noticeable growth vis-a-vis other Indian industries. The Indian insurance industry provides the life insurance and several insurance services under the LIC and GIC respectively. However, the GIC playing a key role in promoting the economic activities in the country by providing various general insurance services under public and private sector after liberalisation of Indian economy of Triton Insurance Co. Ltd. was the �rst General Insurance Company established in India in 1850, whose shares were mainly held by the British. The �rst

General Insurance Company to be set up by an Indian was Indian Mercantile Insurance Co. Ltd., which was established in 1907. The General Insurance business was nationalized after the promulgation of General Insurance Business (Nationalization) Act, 1972. The entire general insurance business in India was nationalized by General Insurance Business (Nationalization) Act, 1972 (GIBNA). The Government of India (GOI), through Nationalization took over the shares of 55 Indian insurance companies and the undertakings of 52 insurers carrying on general insurance business.

General Insurance Corporation of India (GIC) was formed in pursuance of Section 9(1) of General Insurance Business Nationalization Amendment Act (GIBNA). It was incorporated on 22 November 1972 under the Companies Act, 1956 as a private company limited by shares. GIC was formed for the purpose of superintending, controlling and carrying on the business of general insurance. General insurance products and services are being offered as package policies offering a combination of the various

threarrangements and combinations. GIC consist of 22 insurance companies under public and private management. GIC had the 15 rank among the 50 national reinsurance companies in globe for rendering best services. The present paper highlights the pro�tability performance of GIC in general and the Agriculture Insurance Company of India Limited (AICIL) in particular.


Performance Evaluation of General Insurance Corporation of India� A Study With Reference to Agriculture Insurance Company of

India Ltd

Project Fellow, Dept. of Commerce, S.V. University, Tirupati, [email protected]**Associate professor, Dept. of Commerce, S.V. University, Tirupati, [email protected]

23

formulated the rules and regulations and they are giving licenses to the private parties for setting up of new insurance companies. They stated opening by the end of the year 2000. Now growing at an annual average rate of 14 per cent of GIC's business is satisfactorily increasing and which is highest in the world. In the age of today's consumerism, the insurance requirements have expanded to keep pace with the increasing risks. Gone are the days when life insurances ruled the roost; today we have a wide collection of risk coverage commencing from health insurance to travel insurance. With the comfor table circumstances and spending capacity on the flow there is a growing trend to fulfill needs, deal with responsibilities and secure one's possessions, be it good health or worldly wealth.

The General Insurance business was nationalized after the promulgation of General Insurance Business (Nationalization) Act, 1972. The entire general insurance business in India was nationalized by General Insurance Business (Nationalization) Act, 1972 (GIBNA). The Gover nment o f Ind ia (GOI) , th rough Nationalization took over the shares of 55 Indian insurance companies and the undertakings of 52 insurers carrying on general insurance business.

General Insurance Corporation of India (GIC) was formed in pursuance of Section 9(1) of General Insurance Business Nationalization Amendment Act (GIBNA). It was incorporated

ndon 22 November 1972 under the Companies Act, 1956 as a private company limited by shares. GIC was formed for the purpose of superintending, controlling and carrying on the business of

.general insurance

As soon as GIC was formed, Government of India (GOI) transferred all the shares it held of the gene ra l in su rance compan ie s to GIC. Simultaneously, the nationalized undertakings were transferred to Indian insurance companies. After a process of mergers among Indian insurance companies, five companies were left as the fully owned subsidiary companies of GIC i.e. (1) National Insurance Company Limited, (2) The New India Assurance Company Limited, (3) The Oriental Insurance Company Limited, (4) United India Insurance Company Limited and (5) Agriculture Insurance Company of India Limited (AICIL).

thThe next landmark happened on 19 April 2000, when the Insurance Regulatory and Development

Authority Act, 1999 (IRDA) came into force. This act also introduced amendment to GIBNA and the Insurance Act, 1938. An amendment to GIBNA removed the exclusive privilege of GIC and its subsidiaries carrying on general insurance in India.

In November 2000, GIC is re-notified as the Indian Reinsurer and through administrative instruction, its supervisory role over subsidiaries was ended. With the General Insurance Business (Nationalization) Amendment Act 2002 (40 of

st2002) coming into force from March 21 , 2003, the GIC were ceased to be a holding company of its subsidiaries. Their ownership was entrusted with Government of India.

General insurance products and services are being offered as package policies offering a combination of the various rearrangements and combinations. There are package policies specially designed for householders, shopkeepers, industrialists, agriculturists, entrepreneurs, employees and for professionals such as doctors, engineers, chartered accountants etc. Apart from standard covers, General insurance companies also offer customized or tailor – made policies based on the personal requirements of the customer. General insurance companies have willingly catered to these increasing demands and have offered a plethora of insurance covers that almost cover anything under the sun. Any insurance other than 'Life Insurance' falls under the classification of

thGeneral Insurance. GIC had the 15 rank among the 50 national reinsurance companies in globe for rendering best services. It comprises of;


24


Classication of Indian Insurance Industry

General Insurance is also known as Non-Life Insurance in India. There are totally 22 General Insurance (Non-Life) Companies in India. These General Insurance companies have been classified into two broad categories namely: (a) PSUs ( P u b l i c S e c t o r U n d e r t a k i n g s ) a n d ( b ) Private Insurance Companies.

a) PSUs (Public Sector Undertakings)These insurance companies are wholly owned by the Government of India. There are totally 5 PSUs in India namely:

• New India Assurance Company Limited (NIACL).

• National Insurance Company Limited (NICL).

• Oriental Insurance Company Limited (OICL).

• United India Insurance Company Limited (UIICL).

• Agriculture Insurance Company of India Limited (AICIL).

b) Private Insurance CompaniesThere are totally 17 private General Insurance companies in India namely:

• Apollo DKV Health Insurance Company Limited.

• Baja j Al l ianz General Insurance Company Limited.

• ICICI Lombard General Insurance

Company Limited.• IFFCO Tokio General Insurance

Company Private Limited.• Reliance General Insurance Company

Limited.• Royal Sundaram General Insurance

Company Limited.• Tata AIG General Insurance Company

Limited.• Cholamandalam MS General Insurance

Company Limited.• Bharati Axa General Insurance• Future General India Insurance• H D F C E r g o G e n e r a l I n s u r a n c e

Company Limited.• Liberty Vidioco General Insurance

Company Limited.• L & T General Insurance• Magma HDI Genera l In su rance

Company Limited.• SBI general Insurance• Star Health and Allied Insurance• Universal Sompo General Insurance

Private Limited.

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Agriculture Insurance Company of India Limited (AICIL)Agriculture Insurance Company of India Limited (AICIL) was incorporated under the Indian Companies Act 1956 on 20th December, 2002 with an authorised share capital of Rs. 15 billion and paid up capital of Rs. 2 billion. AIC were

stcommenced business from 1 April, 2003. Agriculture Insurance Company of India Limited (AIC) has been formed at the order of Government of India, consequent to the announcement by the Hon'ble Union Finance Minister in his General Budget Speech FY 2002-03 that, "to sub serve the needs of farmers better and to move towards a sustainable actuarial system, it was proposed to set up a new Corporation for Agriculture Insurance". AIC has taken over the implementation of National Agricultural Insurance Scheme (NAIS) which, until FY 2002-03 was implemented by General Insurance Corporation of India. In addition, AIC also transacts other insurance businesses directly or indirectly concerning agriculture and its allied activities.

Crop insurance as a concept for risk management in agriculture has emerged in India since the turn of the twentieth century. From the concept of implementation, it has evolved sporadically but continuously through the century and is still evolving in terms of scope, methodologies and practices. India is an agrarian country, where the majority of the population depends on agriculture for their livelihood. Yet, crop production in India is dependent largely on the weather and is severely impacted by its vagaries as also by attack of pests and diseases. These unpredictable and uncontrollable extraneous perils render Indian agricultural and extremely risky enterprise. It is here that crop insurance plays a pivotal role in anchoring a stable crop growth in India.

Pre-IndependenceAs far back as 1915 in the pre-independence era, Shri J.S. Chakravarthi of Mysore State had proposed a rain insurance scheme for the farmers with view to insuring them against drought. His scheme was based on, what is referred to today as the area approach. He published a number of papers in the Mysore Economic Journal enunciating the concept of Rainfall Insurance. In 1920 Shri Chakravarthi published a book titled “Agricultural Insurance: Practical Scheme suited to Indian Conditions”. Apart from this, certain princely states like Madras, Dewas, and Baroda,

also made attempts to introduce crop insurance relief in various forms, but with little success.

Post-IndependenceAfter the attainment of Independence in 1947, crop insurance gradually started to find reference more often. The Central Legislature discussed the subject in 1947 and then the Minister of Food and Agriculture, Dr. Rajendra Prasad gave an assurance that the government would examine the possibility of crop and cattle insurance, and a special study was commissioned for this purpose in 1947-48. The Agriculture Insurance Company of India Limited (AIC) offers yield-based and weather-based crop insurance programs in almost 500 districts of India. It covers almost 20 million farmers, making it the biggest crop insurer in the world in number of farmers served. Agriculture Insurance Company of India Limited is a limited company headquartered out of New Delhi, India. AIC aims to provide insurance coverage and financial support to the farmers in the failure of any of the notified crop as a result of natural calamities, pests and diseases to restore their creditworthiness for the ensuing season; to encourage the fanners to adopt progressive farming practices, high value in-puts and higher technology; to help stabilize farm incomes, particularly in disaster years. The plan provides comprehensive risk insurance for yield losses due to natural fire and lightening, storms, hailstorms, cyclone, typhoon, tempest, hurricane, tornado flood, inundation, landslide, drought, dry spells, pests/diseases etc.

Research Design

Aims of the study• To evaluate profitability performance of

General Insurance Corporation;• To assess the profitability of Agriculture

Insurance Company of India Limited.

Source of dataThe present study confined only from secondary data, which is available in form of annual reports of GIC and AICIL for the study period of 2004-05 to 2013-14 and other material from reputed journals, books and official insurance companies web sites.

Sample design The present study intends to cover the general insurance corporation both the public and private. undertakings in general and particularly among which one public undertaking insurance company


26


undertakings in general and particularly among which one public undertaking insurance company were taken to evaluate the profitability position namely Agriculture Insurance Company of India Limited.

The analysis of the paper was started from herewith table no. 1 deals with about the earned premium and claims of General Insurance Corporation (GIC), in table no. 2 describes about the profitability of GIC in general and in table no. 3 discussed about the earned premium

Source: Annual Reports of GIC.

Notes: Figures in parenthesis are indicating percentages of total. NS- Not Significantand claims of Agriculture Insurance Company of India Limited (AICIL) and in table no. 4 described about the profitability of AICIL in particular.

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A perusal of Table 1 depicts that the General Insurance Corporation (GIC) of India premium was aggressively increased to 27.42 per cent in the year 2013-14 from 4.45 per cent in the year 2004-05. The S.D value of the GIC premium was registered with Rs. 6680.74 crore during the study period and the Compound Growth Rate (CGR) was 19.95 per cent. The paid claims of GIC are at the beginning of the study period were increased from 4.43 per cent in 2004-05 to 22.65 per cent in 2013-14 except in the year 2006-07, decreased to 4.33 per cent from 5.47 per cent in 2005-06. The S.D value was recorded Rs. 3936.46 crore and the CGR was 14.17 per cent. The t-test indicates not significant relation between the two variables growth in GIC.

A look at the Table 2 indicates the profitability performance of General Insurance Corporation of India (GIC) and it has the losses in the year 2005-06, 2010-11 and 2011-12 worth of Rs. 315, Rs. 33 and Rs. 3842 crores respectively due to raise in the claims than the premium earned. However, the net profit was registered an increase of 67.60 per cent in a fluctuating manner from 6.60 per cent in the study period.

The operating expenses of GIC have been fluctuated year by year. The operating expenses of GIC was decreased to 3.04 per cent in the year 2009-10 from 3.12 per cent in the year 2004-05, it was gradually improved year after year and registered 10.97, 11.86, 12.94 and 45.34 per cent respectively in the period of 201-11 to 2013-14. In 2013-14 the percentage of GIC operating expenses was recorded as 45.34 per cent as a highest percentage during the study period. The S.D value was recorded with Rs. 1139.81 crore

and the CGR was 30.68 per cent. The percentages of net profit have been fluctuated during the study period. The percentage of profitability were declined from 6.60 per cent to -5.20 per cent from 2004-05 to 2005-06. In the subsequent year it was abnormally registered 20.32 per cent and reached to 67.60 per cent in the end of study period by having some fluctuations. The S.D value of net profit was Rs. recorded as 1967.19 crore and the CGR was 26.20 per cent. The t-test indicates not significant relation between the two variables growth in GIC. It is graphically presented..Table 3 seems to be the overall performance of Agriculture Insurance Company of India Ltd. during the study period of 2004-05 to 2013-14. The AICIL earned income in form of collecting premium was aggressively increased to Rs. 16478 crores from Rs. 4553 crores during the period of 2004-05 to 2013-14 with an average of Rs. 9686.20 crores. It was registered a growth of 17.01 per cent in the year 2013-14 from 4.70 per cent in the year 2004-05. The calculated S.D value was recorded worth of Rs. 4355.75 crore and the CGR was shown 13.73 per cent. The paid claims of AICIL were also aggressively increased to Rs. 17244 crores (19.73 per cent) in 2013-14 from Rs. 2768 crores (3.17 per cent) in the year 2004-05 with an average of Rs. 8739.20 crores over the study period. The calculated S.D value was registered Rs. 4715.88 crore and the CGR was marked 20.07 per cent. The t-test shows significant relation between the two variables growth in income and claims of AICIL.

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Source: Annual Reports of GIC.

Notes: Figures in parenthesis are indicating percentages of total. NS- Not Significant

Table - 2

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Source: Annual Reports of AICIL.

Notes: Figures in parenthesis are indicating percentages of total. * Significant at 5% level

30


Table 4 reveals the Agriculture Insurance Company of India Limited (AICIL) has fluctuated year by year. The contribution was decreased to Rs. 80 crores (0.84 per cent) in the year 2006-07 from Rs. 1785 crores (18.85 per cent) and Rs. 322 crores (3.40 per cent) in the year 2004-05 and 2005-06 respectively. Then it was increased to Rs. 1066 crores (11.26 Per cent) and 2130 (22.49 per cent) during 2007-08 and 2008-09

respectively. It was declined to Rs. -1666 crores (-17.59 per cent) in 2009-10 and again it was registered to Rs. 32.58 crore (34.40 per cent) as a highest growth of the profit percentage during the study period. Again it was started the decreasing trend year by year and declined to minus value of Rs. 166 crore after paid climes. The value of S.D was Rs. 1589.94.

Source: Annual Reports of AICIL.

Notes: Figures in parenthesis are indicating percentages of total. NS- Not Significant

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The operating expenses of AICIL was also have fluctuates year by year. It was increased a lot gradually from Rs. 84 crores (3.13 per cent) in the year 2004-05 to Rs. 632 crores (23.58 per cent) in the year 2013-14 with an average of Rs. 268 crores over the study period. The value of S.D was recorded Rs. 189.23 crore during the period. The net profit was decreased to Rs. -22 crores (-0.32 per cent) in the year 2006-07 from Rs. 1701 crores (25.05 per cent) and Rs. 201 crores (2.96 per cent) in the year 2004-05 and 2005-06 respectively. Then it was increased to Rs. 925 crores (13.62 Per cent) and Rs. 1972 (29.04 per cent) during 2007-08 and 2008-09 respectively. It was declined to Rs. -1868 crores (-27.51 per cent) in 2009-10 and again it was registered the profits of Rs. 2770 crore (40.80 per cent) as a highest growth of the profit percentage during 2010-11. Again it was started the decreasing trend year by year and declined to minus value of Rs. 1398 crore after operating expenses.

Source: Table No. 4

The calculated S.D value was registered as 1584.88. The t-test reveals that no significant relation between the two variables growth of contribution and operating expenses in AICIL.

ConclusionThe general insurance corporation profitability position was looking very good during the study period. It was aggressively increases the percentage of profitability growth rate from net losses to net profits during the study period. The agricultural insurance company of India limited has the fluctuations in getting good profitability during the study period. However the study reveals that the profitability performance of GIC

was registered a better one while compare with the AICIL over the study period. It was evidenced for the main reason for this poor profitability in both GIC and AICIL was increasing expenses than the revenue during the study period of 2004-05 to 2013-14. There is very much need for improve the profitability growth rate for surviving the GIC and AICIL and rendering some more effective financial services to public particularly for agriculturists by AICIL. Because of agriculture is the major role playing sector in Indian economy. Hence, the AICIL need to improve its financial soundness rather than the loses by way of implementing innovative and attractive cash back policies.

References

Banga Singh Jarnalis. Marketing strategies of general insurance companies. Deep & Deep Publication.

Koleka, B.V. An over view of General Insurance in India, , M.E.S. College of Arts and Commerce, Zuarinagar, Goa.

Manas Tripathy., Simita Misra., & K.C.Misra. (2009). Cengage Learning India General Insurance Business Operations and Decision Making.

Sharma K.C. (2010). General insurance in India principles and practices. Regal Publication.

Sharma Deendayal. Banking and Insurance.

Rajat Publications.

Shailesh R Gadhavi. (June 2012). Emerging trends in Indian Insurance Industry Issues and Challenges, Recent Thought.

www.gicofindia.comwww.icra.in http://www.medindia.net

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Zorah Abu Kassim*

KEY WORDS Consumer NGOs;Consumerism;Effectiveness of Consumer NGOs

Introduction

Consumer rights have been in the forefront of many developing countries agenda recognizing that consumers often face imbalances in economic terms, educational levels and bargaining power. More ever, increasingly there is a need for consumers to have access to non-hazardous products and the promotion of an equitable and sustainable economic and environmental protection. The United Nations Charter (1999) states the general guidelines for consumer protection and promotion based on the following principles; health and safety, economic interests, education, accessibil i ty to information, availability of consumer redress, freedom to form consumer associat ions and susta inable consumption patterns. In view of the United Nations Charter (1999), and as Malaysia is one of the signatories of this Charter, consumer rights in Malaysia can be encapsulated as follows; the rights to basic needs, safety, accessibility to information, the right of choice, the right to education, the right to representation and redress and lastly, the right to a healthy environment (MTCC, 1990). Therefore, the focus of consumer protection should be in three areas; establishment

and enactment of consumer legislations, consumer education and a system of complaints and redress for consumers. Subsequently, in 1990, a government department focused on consumer affairs was established under the Ministry of D o m e s t i c T r a d e , C o - o p e r a t i v e s a n d Consumerism (MTCC). One of the Ministry's main objectives is to implement, encourage and enhance consumer education programs and to assist consumer associations in the country (http://www.kpdnkk.gov.my/en/kpdnkk/profil/misi-visi). Consumer issues under the Ministry are predominantly in two divisions; consumer movements and consumer standards divisions. For example, one type of assistance given by the Ministry of Domestic Trade, Co-operatives and Consumerism (MTCC) are funds channelled to the many consumer NGOs in the country. However, there has been no study conducted to analyse the effectiveness of consumer NGOs. Therefore, it is important to gauge the level of effectiveness of consumer NGOs in the country. F u r t h e r m o r e , e f f e c t i v e n e s s o f t h e programs/activities conducted by consumer NGOs and how effective consumer NGOs has been dealing with consumer complaints needs to be evaluated.

Abstract

The objective of this study is to gauge the effectiveness of Consumer NGOs in Malaysia. The Ministry of Domestic Trade, Co-operative and Consumerism, Malaysia (MTCC) have allocated funds to consumer NGOs in the country as one type of assistance to consumer NGOs. The funds given to consumer NGOs are primarily to implement consumer programs and activities. Methodology was done in two stages; personal interviews with key personnel of 4 identi�ed Consumer NGOs; Federation of Malaysian Consumer Associations (FOMCA), Consumer Association of Penang (CAP), Persatuan Tindakan Wanita Islam (PERTIWI) and �nally, Persatuan Pertubuhan Pengguna Islam (PPIM). Furthermore, a structured questionnaire was developed and distributed to the public nationwide. A total number of usable questionnaires


A Case Study on Consumers NGOs in Malaysia

*Open University Malaysia Business School, Kuala Lumpur, Malaysia, [email protected]

A total number of usable questionnaires were 533 (12.1 % response rate). Low response rate was attributed to low number of respondents who have participated in a program/activity or who have visited consumer NGO websites or lodging a complaint to a Consumer NGO. Perceptions of effectiveness of Consumer NGOs from consumers were also sought. Findings indicate consumers had the highest frequency of visiting websites by FOMCA (n=100). More than half of total number of respondents (49.9%) have lodged a complaint or met an of�cer of a Consumer NGO to report a complaint. Limitations of quantitative data include simple descriptive statistics used due to types of questions asked, a biasness towards urban and younger respondents (Mean age = 32.04 years, SD= 10.1). Recommendations include gaining more support and involvement from the Government in endorsing consumer NGOs activities.insurance business.

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MethodologyThis study is implemented in two stages for the purpose of collecting data. The first stage of the study consists of firstly, conducting focus group interviews with key personnel of 4 consumer NGOs; Federation of Malaysian Consumer Associations (FOMCA), Consumer Association of Penang (CAP), Persatuan Tindakan Wanita Islam (PERTIWI) and finally, Persatuan Pertubuhan Pengguna Islam (PPIM). These key personnel included office bearers of these organizations such as the President, Chief Executive Officer (CEO), Treasurers, Secretaries and Heads of various committees of these consumer NGOs. These focus groups interviews were held at the headquarters of the 4 consumer NGOs. Thematic analysis was applied on the transcribed qualitative data. Thematic analysis illuminates prominent themes that emerged from the data. According to Owen (1984), the criteria for identifying themes are threefold: 1. Recurrence, 2. Repetition, and 3. Forcefulness.

In the second stage of this study, questionnaire surveys were developed and distributed to the public. Members of the public who were consumers were the r e spondent s. The questionnaire survey was developed as a research instrument to gauge the public perception of the e f f e c t i v e n e s s o f c o n s u m e r N G O s a s complimentary to qualitative data collection. Out of 4,393 respondents, 533 respondents (12.1%) have either participated in a program/activitiy conducted by an NGO or have lodged a complaint to a consumer NGO.

Sample and ProcedureIn the first stage of the methodology, personal interviews were conducted on 4 Consumer NGOs; FOMCA, CAP, PERTIWI and PPIM. These personal interviews were conducted with key personnel of the 4 Consumer NGOs. Criteria's of selection were firstly, the amount of allocation of funds given to Consumer NGOs from year 2007-2012 and secondly, the publicity generated by the Consumer NGOs in daily newspapers or mass media generated aroused great public interest.

In the second stage of the methodology, questionnaires were distributed for a period of 6 weeks from the 1 July – 15 August, 2012 by the use of convenience sampling to respondents. Convenience sampling has the advantage of being

feasible, practical and parsimonious. The questionnaires were distributed by the researcher and officers of the Ministry of Domestic Trade, Co-operatives and Consumerism. Snowballing effect of distributing questionnaires through family, friends, colleagues and students were used. The officers of the Ministry distributed the questionnaires through the various state offices in Malaysia on auspicious events organized by the Ministry such as “Jualan Kilang” (Factory Sales) at Putrajaya dated on 26-29 July, 2012. Questionnaire distribution was also, done through the Ministry's Officers-In-Charge for prices (“Pegawai Pemantau”) and distributed at hypermarkets, supermarkets and wet markets around the country. Furthermore, questionnaires were distributed by officers that belong to the Consumers Squad. Questionnaire distribution is shown in Table 1 below:

Table 1: Questionnaire Distribution in Malaysia

N=5319

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A total of 5,319 questionnaires were collected. However, usable questionnaires are currently at 4,393 (82.6%) questionnaires. The unusable questionnaires were due to missing data, unfilled and dupl ica te responses and incor rec t information given by the respondents. However, out of 4393 respondents, 533 respondents (12.1%) have either visited consumer NGO websites, participated in a program/activitiy conducted by an NGO or have lodged a complaint to a consumer NGO.

MeasuresA structured questionnaire were developed. A qualifying question was inserted to determine whether a respondent could answer the questionnaire with a scale of a Yes/No answers. The remainder of the questions dealt with respondents identifying visiting specific consumer NGOs websites and frequencies of visits of consumer NGOs websites. This section also dealt with obtaining frequencies in participation and getting the respondent to identify which types of activities/ programs conducted by consumer NGOs that respondents have participated in such as workshops/ seminars/programs/campaigns, p u b l i c f o r u m s , c o n f e r e n c e s , debates/talks/discussions and competitions. Frequencies of lodging a consumer complaint within the last 12 months were reported and the identification of consumer NGO where their complaints were directed. The second section of the questionnaire contains a list of statements measuring the perception of consumers on the e f fec t iveness o f consumer NGOs. The respondents were asked to indicate their level of agreements by using a Likert Scale of “1” (Strongly Disagree) to “4” (Strongly Agree). Likert scale of 1 to 4 was used to encourage respondents to have an opinion and not be “sitting on the fence”. All measures are taken and adapted from published literature (USAID Centre for Development and Evaluation Report, 2000; Shea and Sitar (2012), NGO Accreditation and Certification, 2011; KajianImpak Sambutan Bulan Pengguna Kebangsaan, KPDNKK, 2011, Career Information Centre, Ministry of Human Resource, 2012).

Statistical Analysis For the quantitative findings and for the best interest of the survey, the following statistical techniques were employed. Statistical Package for Social Sciences (SPSS) Version 20 for Windows is used to process and analysed the data. Descriptive

statistics were used; frequencies, means, standard deviations and multiple response frequencies.

FindingsThere is no direct measurement from the qualitative data but evidences emerged from the testimonies and recognition from the interviews. The effectiveness of the NGOs is manifested for NGOs roles in education, a one-stop-centre, and response from the industry, international and public recognition.

EducationConsumer NGOs' programmes have created an impact among students as there are many requests from schools to conduct talks on consumerism. Many programmes conducted by Consumer NGOs such as “Bulan Kewangan Berhemat” (“Financial Savings Month”) were deemed a success. Consumer NGOs obtain recognition from institutes of higher learning (IPT) as one university has incorporated consumerism programs. Additionally, university students do internships with the NGOs. Officer P testified that the “NGO programmes are effective as a few university staff were inspired and subsequently joined the NGOs. The sheer number of programmes conducted is a good gauge of e f f ec t iveness. NGO F car r ied out 300 programmes in a year”.

One-stop CentreMany NGOs acts as a one-stop centre for consumers. NGOs receive complains on various issues related to many third parties. The consumers also regarded the NGOs as one-stop-centres. These NGOs redirect the complaints to the third parties who are either from the ministries or industries. The NGOs perform as spokesperson for consumers. The one-stop-centre is attractive as many consumers do not know which agency to approach. NGOs are well versed with consumer issues and act as a resource centre. NGOs are moderators. Officer i claimed that the NGO is effective as a one-stop-centre, “Satu sebab kenapa orang suka datang sini sebab dekat kementerian, dia akan diarahkan ke sini dan ke sana. Dekat sini, one-stop. Datang dekat sini, kita tahulah mana kementerian yang kena diutarakan”. (“One reason why people like to come here is because if consumers go to the Ministry, they will be redirected here and there. However, if they come here, we know which Ministry they should address their complaints to”) In addition, NGO functions as a consumer complain centre. It

35


Handles and solves “Ah Long” cases (loan sharks). These are not isolated cases but NGOs claimed that they have solved many of such cases successfully. These cases mainly fall in the “grey area” by law as the authorities do not have much authority. As such, many consumers keep returning to the NGOs for help as a result of NGOs success rate of solving such cases.

Industry Response RateTo be effective, response rate is vital. Officer P and CEO F states many companies will respond positively to complaints if complaints are forwarded through Consumer NGOs. Many private companies do not want to flout regulations or have negative publicity. Consumer NGO CEO F quoted an example, “We work with Bank Negara (Central Bank), and we called all the banks to organise a dialogue session. One person has been appointed to deal directly with the NCC (National Complaint Centre)”. The follow-up services provided by the NGOs are appreciated by consumers.

International RecognitionNGO P and NGO F are recognised nationally and internationally. Both NGOs act as resource centres for international consumer organisations. International NGOs consult NGO P when faced with complicated issues and often cites NGO F as an example for best practices. Officers from NGO P were invited by countries like Thailand, Bangladesh, Laos and Cambodia to train personnel in those respective countries. Thus, NGO P is able to get funding internationally. The funding helps NGO's with operations but acts as recognition of efforts internationally. In addition to receiving invitations, NGO F receives frequent visits from other officers from Consumer NGO's from countries like Brunei, Oman, and Indonesia whose objective is to study how consumerism is practiced in Malaysia.

Public RecognitionIn addition to consumer's recognition of consumer NGOs, their roles are recognised by the government ministries as evident by contributions made to various amendments and policy formulations. Officer P claims that the public recognises their existence as for example, letters reach their office without an address on the envelope. Taxi drivers are able to locate their offices without directions given by passengers. Office P claims that these are indications of public recognition. Many consumers phoned and insist

that the NGO assist them with their problems although it is suggested to consumers to bring their cases to the Ministry and tribunal located nearest to them. Officer P quoted a recent case with a consumer:

Officer P: I suggest you go to a domestic and consumer ministry in Johor to resolve this.

Consumer P: No, no. I want [the NGO] to resolve this!

Officer P: Honestly, I feel that your problem is easier to solve if you go to the consumer tribunal…

Consumer P: No, I want [the NGO] to help me!

The confidence that the public placed on these NGOs signifies the trust and faith consumers have for the NGOs.

To compliment the qualitative findings, it was important to identify which consumer NGO websites most visited and which consumer NGOs had the highest participation in terms of programs/activities by respondents. Effectiveness was measured on the frequencies of visits of websites by respondents, frequencies of participation in activities/programs conducted by Consumer NGOs and frequencies of lodging complaints. Consumer perceptions of the effectiveness of consumer NGOs were evaluated.

Identi f icat ion of Consumer NGOs by Frequencies of Visits In terms of visiting consumer NGO websites in the last 12 months, respondents had visited FOMCA websites for 270 times, CAP websites for 154 times ,PPIM websites for 90 times and Others websites ( for example, MDTCC websites) for 67 times. Respondents visited PERTIWI websites for 22 times, Persatuan Pengguna Terengganu websites for 18 times and respondents have visited websites for PKPKL 9 times. 42 respondents have not visited any websites of consumer NGOs. Therefore, FOMCA websites are the most popular to be visited by respondents. Please see Bar Chart 1 as shown below:

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Bar Chart 1: Websites of consumer NGOs visited in the last 12 months

Note: FOMCA= Federation of Malaysia Consumer Association, CAP= Consumer Association of Penang, PPIM= Persatuan Pelindung Islam Malaysia, PPM= Persatuan Pelindung Malaysi , PERTIWI= Pertubuhan Tindakan Wanita Islam Malaysia, Trengganu = Persatuan Pengguna Trengganu, , PKPKL= Persatuan Kegunaan Pengguna Kuala Lumpur

Identi f icat ion of Consumer NGOs by participation in the last 12 months In terms of participation in programs/activities conducted by consumer NGO's, 149 respondents have not participated in any programs/activities, 113 respondents have par t icipated in a program/activity organized by FOMCA, 98 r e s p o n d e n t s h a v e p a r t i c i p a t e d i n a program/activity organized by CAP, 84 r e s p o n d e n t s h a v e p a r t i c i p a t e d i n a program/activity organized by other consumer NGO's not in the list, and 53 respondents have participated in a program/activity by PPIM. 18 r e s p o n d e n t s h a v e p a r t i c i p a t e d i n a program/activity conducted by Persatuan Pengguna Terengganu, while 15 respondents have participated in a program/activity conducted by PERTIWI. Final ly, 8 respondents have participated in a program/activity conducted by PKPKL. Therefore, many respondents have not participated in any program/activities conducted by consumer NGO as indicated by the highest frequency of 149. Please see Bar Chart 2 as shown below;

Bar Chart 2: Participation in NGO programmes in the last 12 months

Note: FOMCA= Federation of Malaysia Consumer Association, CAP= Consumer Association of Penang, PPIM= Persatuan Pelindung Islam Malaysia, PPM= Persatuan Pelindung Malaysi , PERTIWI= Pertubuhan Tindakan Wanita Islam Malaysia, Trengganu = Persatuan Pengguna Trengganu, , PKPKL= Persatuan Kegunaan Pengguna Kuala Lumpur Frequencies of consumer NGO contacted to lodge reports or complaints In terms of lodging a complaint to a consumer NGO, 222 respondents have never lodged a complaint to a consumer NGO, 100 respondents have lodged a complaint to FOMCA, 69 respondents have lodged a complaint to other consumer NGO's not in the list , 74 respondents have lodged a complaint to CAP and 37 respondents have lodged a complaint to PPIM. 14 respondents have lodged a complaint to Persatuan Pengguna Trengganu while 13 respondents have lodged a complaint to PPM and 8 respondents have lodged a complaint with PERTIWI respectively. Only 6 respondents have lodged a complaint with PKPKL. Please see Bar Chart 3 as shown below:

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Bar Chart 3: Consumer NGO contacted to lodge reports or complaints

Note: FOMCA= Federation of Malaysia Consumer Association, CAP= Consumer Association of Penang, PPIM= Persatuan Pelindung Islam Malaysia, PPM= Persatuan Pelindung Malaysi , PERTIWI= Pertubuhan Tindakan Wanita Islam Malaysia, Trengganu = Persatuan Pengguna Trengganu, , PKPKL= Persatuan Kegunaan Pengguna Kuala Lumpur

Frequencies of visiting consumer NGO websites within the last 12 months In terms of the number of times that respondents have visited consumer NGO websites, 37.97 % of respondents have visited consumer NGO websites 2-3 times in 12 months, 34.02% respondents have visited consumer NGO websites only once in 12 months, followed by 17.49% respondents have not v i s i t ed any consumer webs i te s. 5 .44% respondents have visited consumer websites 4-5 times in 12 months and finally only, 5.20% of respondents have visited consumer websites more than 5 times in 12 months. Therefore, a majority of respondents (82.51%) have visited consumer NGO's websites at least once in 12 months. Please see Pie Chart 1 as shown below:

Pie Chart 1: Frequency of visiting consumer NGO websites in the last 12 months

Participation in types of activities organized by consumer NGO in the last 12 months298 respondents who have attended workshops organized by consumer NGOs, followed by 75 respondents who attends forums, 51 respondents attends debates organized by consumer NGOs. 37 respondents attended conferences organized by consumer NGOs and finally, 25 respondents entered competitions organized by consumer NGOs. This indicates that attending workshops organized by consumer NGOs is the most popular type of activity engaged by respondents. Please see Bar Chart 4 as shown below;

Bar Chart 4: Participation in types of activities organized by consumer NGO in the last 12 months

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Frequency of lodging complaints and reports via

consumer NGO

41.51% of respondents have never lodged a

complaint or met an officer of a consumer NGO

to report a complaint.28.54% of respondents have

lodged a complaint or met an officer of a

consumer NGO to report a complaint 2-3 times,

followed by 20.75% of respondents have lodged a

complaint or met an office of a consumer NGO

once only. 5.90% of respondets have lodged a

complaint or met an officer of a consumer NGO

to report a complaint for 4-5 times and finally only

1.89% of respondents have lodged a complaint or

met an officer of a consumer NGO to report a

complaint for more than 8 times. This indicates

that more than half of the total respondents

(57.08%) have lodged a complaint or met an office

of a consumer NGO to report a complaint. .

Please see Pie Chart 2 as shown below:

Pie Chart 2: Frequency of lodging complaints

and reports via consumer NGO

Consumers Perception of effectiveness of

Consumer NGOs56.23 % respondents agree that consumer NGOs are effective while 29.22 % of respondents strongly agree that consumer NGOs are effective. 10.99% of respondents disagree that consumer NGOs are effective and 3.56% of respondents strongly disagree that consumer NGOs are effective. This indicates that the majority of respondents (85.45%) agree or strongly agree that consumer NGOs is effective. These results have to take into consideration that many of these respondents have either participated in programs conducted by a consumer NGO, visited a consumer NGO website or have either lodged a complaint or met an officer of a consumer NGO

to report a complaint. Please see Bar Chart 5 as shown below:

Bar Chart 5: Consumer Perceptions of effectiveness of consumer NGO

In terms of the means as shown in Table 4 below, the means range from 3.01-3.17 which indicates that respondents agree that consumer NGOs are effective in educating and protecting consumer rights and as a channel of consumer complaints.

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Recommendations of StudyThis is a preliminary study to gauge effectiveness of consumer NGOs. Government involvement is crucial to the success of consumer NGOs. As such, government presence needs to be more visible to the public. Victimised consumers who win their cases will send a strong message to the industry and to other consumers. Therefore, since the authority and jurisdiction lies with the government, consumer NGOs need to work more closely with the government to enhance their roles. For example, Office F confirmed “….. they ( consumers ) don't feel the need to know those (consumer), rights because they assume that the products on the shelf are safe. It is fully regulated the government “. The government must be seen to endorse NGOs efforts, As a result, the NGOs would like to see the respective Ministries to be working in partnership with them. A symbiotic relationship and constant support is crucial as consumer problems can be solved more effectively,

Limitations of the studyThis study has several limitations. In the context

of the qualitative data, only 4 major consumer NGOs were interviewed. Smaller consumer NGOs were not included in the sample. Furthermore, this study analyses only 533 respondents (12.1%) out of 4,393 respondents' usable questionnaires. This is a low percentage of the total number of respondents to answer the research questions. Therefore, a higher percentage of respondents who participated, visited the websites of consumer NGOs or made a customer complaint would lead to better results in the findings. Future research would involve investigating effectiveness of specific consumer programs advocated nationwide, for example, No-plastic Bag Campaign whereby no plastic bags are given out to shoppers in major hypermarkets and supermarkets. Effectiveness of specific individual programs implemented by consumer NGOs could also be evaluated. More qualitative insights could enrich consumer literature with longitudinal data being emphasized. For example, analyses on consumer diaries, content analysis of websites, forums and consumer publications should be undertaken (Papaoikonomou, Ryan and Valverde, 2011).

Effectiveness of consumer NGOs in increasing awareness, educating and protecting consumers' rights

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References

Kajian Impak Sambutan Bulan Pengguna Kebangsaan, KPDNKK. (2011). Career Information Centre, Ministry of Human Resources, Malaysia.

Owen, W. F. (1984). Interpretive Themes in Relational Communication. Quarterly Journal of Speech, 70, 274-287.

Papaoikonomou, E., Ryan, G & Valverde, M. (2011). Ethics and Behaviour, Vol.2 (3) 197-221. Doi:10.1080/10508422.2011.570165

Performance and Evaluation, TIPS, Building A Results Framework , USAID Centre for Development and Evaluation Report, 2000, Access athttp://www.who.int/management/district/planning_budgeting/BuildingResultsFramework.pdf, dated August , 2012.

Shea, C., & Sitar, S. NGO Accreditation and Certification: The Way Forward- An Evaluation of the Development Community's Experience. International Centre for Not-for-Profit Law. Undated. Tribunal for Consumer C l a i m s M a l a y s i a , A c c e s s e d a t http://ttpm.kpdnkk.gov.my/portal/index.php/en/ dated July, 2013.

United Nations Conference on Trade and Development, United Nations, Guidelines for Consumer Protection (as expanded in 1999), 2001 Accessed athttp://unctad.org/en/docs/poditcclpm21.en.pdf dated at September, 2012.

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Dr. N. Krishna Kumar*

KEY WORDS OECD BetterLife Index; Regus WLB Index;WLB;WLB Index

Introduction

Work Life Balance (WLB) is a broad concept that encompasses priorities between work (including career and ambition) on the one hand and life (including areas such as health, leisure, family, pleasure and spiritual development). Work life balance is about people having a measure of control over when, where, and how they work. It is achieved when an individual's right to a fulfilled inside and outside paid work is accepted and respected as the norm, to the mutual benefit of the individual, business and society.

According to the Government of Canada's Policy document on 'Work Life balance in Canadian wok places', “Work Life Balance is a self-defined, self determined state of well being that a person can reach or can set as a goal, that allows them to manage effectively multiple responsibilities at work, at home and in their community”; It supports physical, emotional, family and community health and does so without grief, stress or negative impact.(hr.councl.ca). It says, “…a healthy work place means more than warding off colds and the flu. It is more holistic and takes into consideration, the physical, spiritual, environmental, intellectual, emotional, o c c u p a t i o n a l , a n d m e n t a l h e a l t h o f employees…Wellness promotion does not just

benefit the employees because, an organization filled with healthy or fulfilled employees is a productive work place that retains its employees.”

Business dictionary defines Work Life balance, “as a comfortable state of equilibrium achieved between an employee's primary priorities of their employment position and their private life style”. Most psychologists would agree that the demands of an employee's career should not “overwhelm the individual's ability to enjoy a satisfying p e r s o n a l l i f e o u t s i d e o f t h e b u s i n e s s environment….. According to Time for Life LLC, “Work Life Balance is the separation between your work life and your personal life. It is the boundary that you create between your profession, career or business and every other segment that makes up your life. Aside from your career, these segments include your family, personal growth, spirituality fitness, health, community and friendships…”

OECD (Organization for Economic Cooperation and Development) defines work life balance, as a suitable balance between work and daily living. Health Education Board of Scotland defines Work life balance as “working practices that acknowledges and aims to support the needs of staff in achieving a balance between their home and working lives…”

Abstract

In a stress induced work culture in the World, the subject of Work-Life Balance has become a focal theme. This paper tries to examine the theme from a global perspective. Work Life balance shows wide variations between countries. World's largest economies, the USA and China do not show leadership in work life balance policies, whereas small Scandinavian countries like Denmark, Sweden, Norway, Netherlands (commonly referred as 'Nordic countries') are acclaimed for their commendable work life balance measures implemented by the respective governments ahead of others. The paper examines how the new generation emerging in China has made it clear that unlike their parents they will not end up their lives in factory sheds in appalling conditions. They value life more than work and this underscores the need for government interventions all over the world, to foster work life balance with policy measures. It is also being realized that Work life balance measures are not simple HR tools but it has economic signi�cance as well; The Conceptual Paper also discusses how Work life balance leads to high morale, high productivity, high quality, high commitment, low absenteeism and all these will lead to a visible spurt in productivity improving the bottom line.


A Global Perspective on Work Life Balance

* Professor & Former Director of School of Management Studies, Chinmaya Institute of Technology, Kannur, Kerala. [email protected]

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Work Life Balance – Stake holders PerspectiveSo much being the subject matter of Work Life balancing, it is also worth noting that the 'Work Life Conflicts' shall lead to :

• Decreased employee job satisfaction• Increased staff turnover and

absenteeism• Lower performance levels and increased

job stress levels• Intention to leave the organization.

When we are to analyze the benefits of fostering Work Life Balance, the following perspectives come to the picture.

Benefits of WLBTo Employees:

• Employees are able to effectively manage multiple responsibilities at home, work and in the community without guilt or regret.

• Being able to work in flexible ways enables to earn income at the same time managing family and other commitment with less or no stress.

• Being part of a supportive work place those values and trusts employees enhances self- pride and productivity, satisfaction.

What employees look for?Generally employees are a breed looking for

• A good quality of life• An enjoyable work life with career

progression• Training and development• Good health• Affordable child care and elder care• Further education • More money• Time to travel• Time with friends and family• Time to do sports and hobbies• Time to do voluntary work passionate to

them.

How Business gets benefitted?With a good Policy of WLB, the business can get benefitted in more than one ways narrated below:

• Can attract the best /competent staff• Can get the best from them• Can become the preferred place to work• Increased productivity

Tools to foster Work Life BalanceFor Fostering Work Life Balance, many tools are being adopted which can be summarized as

below:• Facilitating Part time work• Fully compensated reduced working

hours (5 day week concept or 3 /4 days as in some Nordic countries -etc).

• Flexible working Hours, with core hours fixed.

• Compressed work weeks with fewer but longer working days

• Paternity Leave/ Maternity Leave- to take care of child care, breaks

• Shifting work to home (by logging-in from home).

• Compensated Leave for preparing / coaching wards for crucial Exams etc.

• Sabbatical• Flexi time, Tele-commuted / On-line

work engagements• Recreation facil i t ies, health care,

educational support.

Various Dimensions of WLBWork Life Balance is not “a one size fits all” approach. It could be seen that Dimensions of WLB widely differ depending upon the social, cultural background, societal norms on perceived role of women, income strata, education level, urban / rural community norms, caste state, religion, personality (outward or inward looking), progressive or conservative level of social mobility, level of women participation in governance etc.

Asian countries and European countries differ widely in the perceived role of women. In Europe, women are equal to men in household chores whereas in China and India, despite high income earning by the women, still they are expected to bear the burden of child care and family management with little support from men. Career ambition and neglecting family with little time devoted to be with family is normal for men but an ambitious lady climbing up in the corporate hierarchy feels guilty and this pulls her down and her career growth get stuck at early stages itself. These social issues are to be tackled with empowering both men and women, if WLB is to happen with consequent positive impact to economic growth. Increasing women presence in productive work force of the country is also a measure adopted. Currently, it is 25% in India, as against 78% in China.

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USA is ranked low by the OECD Better Life Index, in WLB as it has longer hours of work less leisure hours than EU countries. China also scores poor in WLB, as their priority is in job creation, not on enhancing quality of the work ambience. This may cause setbacks to China later as resentment may end up in backlash. Countries like Denmark, Finland, and Sweden score high in WLB with well pronounced policies to foster WLB and reduce work life conflicts. Studies conducted worldwide, have established that Work-Life Balance -

• Increases employee jobs satisfaction• Reduces staff turnover and absenteeism• Enhances performance levels • Reduces Intention to leave the

organization• Decreases Stress• Attracts new employees and talent• Increases productivity

Index on Work Life BalanceStudies on Work Life Balances at the global level are few, essentially as it isn't easy to conduct one. One such is a study done by OECD on Better Life Index. Analysis from such studies throws interesting reading in the subject of WLB. USA is

thranked very low at 28 position among 36 countries by the 'OECD Better Life Index', as it has longer hours of work, no national laws on parental leave, less leisure hours than EU countries etc. Maternity leave is an important factor in creating work life balance for families; Surprisingly, USA has been laggard in this area, pulling down their rank in Work Life balance index; many mothers in USA are forced to return to work after delivery within weeks, missing out the important bonding time with their child.

OECD's Ranking of Countries based on WLB

According to a study by Jody Heyman, founder of the Harvard based 'Project on global working families' and the Director of 'Mc grills institute for Health and Social policy', “more countries are providing the work place protections that millions of Americans can only dream of. The US has been a proud leader in adopting laws that provide equal opportunities in the work place but our work/ family protection are the worst”. Survey findings indicate that more than 50% of the executives had no plans to take vacation. They decided to stay at work and use the vacation to complete the increased work load. “At least 134 countries have laws setting the maximum length of the work week; the US does not have national law on maximum work week length, and does not place any limits on the amount of overtime that an employee is required to work each week”.

This study also reveals that a Mexican gets 10 paid holidays in a year, a Britisher gets 25 holidays, German gets 30 holidays, Norway 56 and Denmark 52 days. Americans are at work 12 weeks more a year in total hours than Europeans. Americans work long hours ie., more than 50 hours a week, as against Denmark's 15. According to a survey conducted by National life insurance Co. USA, 4 out of 10 employees feel that their jobs are extremely stressful. The study states that women in particular report stress related to the conflict between work and family. According to Kathryn Roethel (SF Gate Blog dated 26-2-2014), “…US has a pretty abysmal ranking on the list of developed countries, for creating a balance between work and life away from work”. The OECD Bet te r L i fe Index Re por t 2013 conclusively proclaims “…Americans work longer hours, have fewer vacation days, and spend as much or more time on cooking ,cleaning and caring for families as their international counterpart”. As against this, Denmark is very liberal. In Denmark, both mom and dad can take one year off after the baby is born.

China also scores poor in WLB, as their priority is in job creation, not on enhancing quality of the work ambience. This may cause setbacks to china later as resentment may end up in backlash. The young Chinese workers have different priorities and will not work long hours in appalling conditions like their fathers and mothers did!. This challenge to HR executives of MNCs has visible impact on China's competitiveness emanating solely from low wages, which may not be sustainable going forward.

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Further peep into the OECD Index/ Ranks, show South Korea having the longest hours of work among OECD countries.ie 2357 hours a year. France has the shortest work week ie 35 hours a week. Ms Yoshil Komuro, CEO Work Life Balance Co Ltd, Tokyo feels that “the economic downturn is an ideal opportunity for Japanese companies to focus on Work Life balance since it gives everyone a chance to reconsider their traditional working style where overworking and ignoring family were hallmarks of Japanese workforce. Komuro is convincing companies in Japan that it is more cost effective to implement Work Life balance than lay off employees. Government has started implementing WLB policies. According to Taro fujimoto, one oft quoted word that symbolizes the plight of overworked Japanese worker is “Karoshi' meaning “death by overwork”; now they have started to realize the futility of not having a private life.

Index of Work Life Balance in Europe

Countries like Denmark, Finland, and The Netherlands score high in WLB with well pronounced policies to foster WLB and reduce work life conflicts. Despite excellent policies, Europe also suffers from work life conflicts. According to Second European Quality of Life Survey, 'Family life and work', the official publication of the European community-Luxemburg, 2010 (pg 510-531), more than one quarter of Europeans suffer from some form of work –life conflict.

The Regus Work/Life Balance Index, an annual survey of 26,000 professionals in 90 countries, calibrates a number of different factors to produce an index value that reflects overall levels of personal-work life harmony. Among other factors, independent researchers asked respondents whether, over the past year, they were spending more time away from home, whether they enjoyed work more, whether they were achieving more at work, and whether they had taken on additional work duties. A study by the consulting giant Accenture on WLB puts it that “76 % of the Singapore respondents aren't satisfied with the Job”. Infact, the Regus work life index 2013 reflects India's better facilities in these areas. India has a score of 139 points, followed by China (136), and Singapore (128).

Regus WLB Index

Impact of Societal norms on Work Life BalanceIt is clear that career ambition and neglecting family with little time devoted to be with family is hurting individuals, family and businesses alike. A survey done by Regus, have some startling revelations. The survey found that employees world-wide, spent more time on work in 2012 than in 2010. The global recession has led to longer hours of work and additional duties burdening the employees, affecting the work life balance. Regus has suggested empowering employees through flexi-time so that travel in peak hours is reduced, Work at locations near home and, more time with families as measures to foster work life balance.

According to Regus survey, one important subjective factor that influences work life balance is job enjoyment. If workers enjoy the work, then they are less likely to take home worries and stress, and are less likely to resent the time spent at work. Mercer, a human resources consulting company has stated that in many Chinese companies, only 5 vacation days are paid in a year, the lowest in the world. Warnwant blog depicts a shocking picture on the appalling conditions of migrant rural labour which form the major chunk of work force in industrial towns of china, making electronic gadgets like smart phones for the world. “Trying to escape from extreme poverty, rural migrant labour finds themselves trapped in appalling working conditions-long working hours, 7 days a week work, no leave, no contract and bordering on bonded labour. They face discrimination at every point. They have no right to form trade unions. MNCs make their products from China outsourc ing work through cont rac t ing companies, who use the migrant labour. Things have changed only recently as shocking revelations forced authorities to enforce laws. Wall street Journal (2-9-2013) reports that “although many Chinese have to work long hours to get by, it is a lifestyle choice for many middle class people. Fortunes are made so quickly in China's fast expanding economy, that some people get sucked into it all the time, as they feel

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that they don't want to miss a one golden chance'. According to National Health international Survey on occupational Health data, 16% of American workers reported difficulties balancing work and family. Imbalance was more prevalent in the age group of 30-44(19%), compared to other age groups. Incidentally, India is ahead of china in work life balance.

ConclusionIt can be surmised that WLB attainments of countries have no relationship to the economic well being of countries or power equation or even governance status in the world order. It is emerging as a soft measure in sustainable human development in general and in the realm of enhancing human productivity in particular, and will be watched more keenly in the days to come.

References

Boris Groysberg. , & Abrahams Robin. (March 2014). Work Life Balance, Manage your Life, manage your work. Harvard Business Review.

Bryce Covert. (May 2013). The US ranks ninth to last in work life balance. Yoshil komuro. CEO, Work life balance Co Ltd, Tokyo-blog.

Dr. Linda Duxburry., & Dr Chris Higgins. (2013). Work life conflict in Canada in the new millennium- A Status Report.

Report on Work life balance Canadian Work places', Government of Canada. (2012). HR Council Report, Canada.

OECD Better life index 2013 report. OECD (2013).

Ozone Foundation Report. (2013). Journal of occupational health Psychology.

The world's hardest working countries. (June 2013). Forbes magazine.

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Ramesh Raj Ayer*

KEY WORDS Benchmarks;Compliance;Governance Index;Pyramiding and Tunnelling;Transparency

Introduction

This paper describes the Indian corporate governance system and examines how the system has both supported and restrained India's ascent to the top ranks of the world's economies. India inherited one of the world's poorest economies in the mid twentieth century with an industrial sector accounting for less than 15% of the national product. But it had a functioning stock market BSE (established in 1900) with clearly defined rules governing listing, trading settlements, equity culture and a banking system.

Early corporate industry in India was led by the managing agency system where the management enjoyed disproportionately greater rights than their stock holding justified. The Government on the other hand turned towards socialism after independence, with a bureaucratic culture of licensing and red-tapism which encouraged corruption. The situation worsened with the fawning of a large public sector steeped in inefficiency and nepotism. Global studies by World Bank over the years had put India amongst the relatively lower category of nations in terms of management practices and reporting. Indian accounting systems were tailored largely for tax avoidance and interpreting corporate financial statements was challenging. Taxation laws were inherited from the British. These were then changed, modified, added and multiplied by

successive governments. As the gap between the rich and the poor widened an unnaturally high taxation was launched. The system resulted in generating a large pool of officiallyunaccounted money known as black money. Corporate hired tax experts to file returns and legal experts to defend them at appellate tribunals. The practice spawned many agents who helped in avoiding payment of taxes.

Liberalization of the Indian economy began in 1991 witnessing policy changes that brought about a major transformation of the corporate sector. An important development was the establishment of the Securities and Exchange Board of India (SEBI) in 1992 to regulate and monitor stock trading, which played a crucial role in establishing corporate governance in the country. SEBI along with Confederation of Indian Industry sets-up committees chaired by leading industrialists to develop codes of conduct for corporate governance. The Government used these reports together with audit reports and legal opinions to formulate a framework for corporate governance which includes clause 49 for listing of companies. A new Corporate Bill was presented to the Parliament in 2011 and was notified in 2012. The Bill has brought about significant improvements in corporate governance in India since then.

Abstract

Corporate governance is a pre-requisite for sustainable growth of corporate business. But India's growth has been af�icted by poor governance. The research paper examines the business perspectives and the environment. It also explores the cause and effect relationship and the challenges faced. Showcasing the growth achieved by adopting best practices to achieve a sustainable future vision. The report also proposes an index to help monitor the level of corporate governance which could be used as a tool to help reward practitioners.


Corporate Governance and Compliance

*Associate Professor, School of Business, AIMS, [email protected].

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The quality of corporate governance affects the growth of an emerging economy like India which depends on the expansion and steady growth of the corporate sector. The research paper identifies the challenges and influences along with interventions which can foster sustainable growth of the Indian economy in future. While redefining the penalties and incentives to pave the way for a cultural change in ownership and compliance, the research paper has proposed a model rating system for the corporate with an index that could be monitored by a suitable agency of the government. The future projection for India is based on a system of strong deterrence and recognition of success led by transparent practices that show excellence in corporate governance.

The research question and the methodologyThe research question is to examine what are the reasons for the current state of corporate governance in India and how one could bring about a transformation in corporate culture.

The research method used was descriptive and explanatory. The paper is based on an extensive study of literature from secondary sources on corporate governance in India and expert opinions given by a panel of experts including CEO's, COO's, Bankers, Corporate Consultants, Chartered accountants and Corporate attorneys at the Round Table Conference jointly organized by AIMS Institutes, Bangalore and BIGCOM of LASSIB society of India. A model proposed to measure and reward governance in the industry has been developed. An empirical study to validate the model is under process and will be published as a sequel.

Examining the need for Corporate GovernanceEnhancement in science and technology has changed the way we live in India today. Liberalization, Privatization and Globalization (LPG) launched in the 90's has changed the way we do our business. There is change in environment, change in culture and change in ethos. Change is the order of the day. The change however has also brought some negative impacts along with positive ones. It has brought about a decline in ethics and values that ought to be followed by everyone including especially the Corporate. It has led to an indiscriminate pursuit of personal enrichment at any cost precipitated by archaic policies, poor implementation, lack of integrity and widespread non-compliance. Many family-owned businesses in India have

moved to become widely held limited companies since liberalization. To function as management in a corporate setup acting as a trustee of shareholders, preventing asymmetry of benefits, especial ly between the shareholdersand overriding family interest calls for a code of governance. The lack of understanding about governance and treating the shared ownership as a fiefdom had brought in its wake a spate of malpractices and violations. The management of many of these family controlled listed companies' lack transparency. They are prone to divert funds for personal gain, leaving shareholders in the lurch. Auditors too have been found to be culpably silent on questionable practices being followed at the behest of such managements.

A break-up of the shareholding and ownership of India's 500 largest companies that together account for over 90% of the market capitalization of the BSE show that 60% of the companies are family-run business groups and they comprise about 65% of the total market capitalization of the exchange. About 11% of the companies comprising about 22% of market capitalization are companies wholly or significantly owned by the Central or State Governments; about 20% of companies comprising about 8% of the market capitalization are non-Group companies controlled by Indian promoters; and the balance 9% of companies comprising about 5% of the market capitalization are non-Group companies controlled by foreign promoters. The average shareholding of “promoters” in Indian companies is as high as 48%. The percentage shareholding of different groups of shareholders for the 500 largest Indian companies shows on average that promoters own about 53% of the shareholding of these firms. 7% of shareholding is with foreign promoters, and the rest are Indian, mainly cor porate ent i t ies 19% and the government 16%. Importantly, there is a sizable non-promoter holding of foreign institutional investors of 16% and Indian institutional investors, likebanks, financial institutions, mutual funds and insurance companies 10%.

Be that as it may, the cause for concern is that there is significant pyramiding and tunneling among Indian business groups. This is without taking into account the copious reporting requirements and the requirement to show evidence of all earnings. SEBI took action against less than 10% of the companies who violated the law under its jurisdiction. The ratio of action taken to

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investigations made is quite low. As for appeals before higher authorities like the Securities Appellate Tribunal, in almost 40% of cases, the decision has gone against SEBI. Though SEBI has had some success prosecuting intermediaries, it has failed to convince the Tribunal in its proceedings against corporate insiders and major market players. Thus, it appears that the quality of public enforcement of security laws in India is poor and needs to be significantly improved to be a real deterrent.

However, corporate governance goes beyond the realm of law. It comes from the culture and mindset of management. It cannot be regulated by audit and legislation alone. For any concept or idea to form a part of our business,it needs to be put in distinct terms, so that it is understood and followed by all. One should have strict enforcement in place while efforts are made to bring non-compliance under the scanner, in the long run it would be crucial to educate the benefits of compliance to the business.

Industry Perspectives and the environment Globalization and liberalization has brought with it immense opportunities of growth. Indian corporate industry has grown exponentially from less than 30,000 in the 70's to over 300,000 in the 90's. (This does not include proprietary and partnership companies with unlimited liabilities).

The SEBI committee under the leadership of different industry has recommended on the following:

• Role of non-executive directors, including the Chairman (Mr. Rahul Bajaj, Bajaj Auto)

• Financial disclosures and board oversight o f management(Mr. N Chandra, ZEEGroup)

• Role of auditorsand the BOD(Mr. K A Birla, Aditya Birla Group)

• Role of independent directors (Mr. Narayan Moorthy, Infosys Ltd).

The Institute of Company Secretaries of India (ICSI) started awarding corporate for good governance over the last 10 years. Corporate like Tata Group, Infosys, L&T, ITC and Wipro won these awards amongst others and have evolved sound principles of governance with social responsibility.

From the government's side, there have been swift

moves through the DCA (Department of Company Affairs) and SEBI to hasten the process of bringing improvements in the corporate sector.The DCA amended Companies Act 1956 for provisions concerning corporate governance.

Some of the changes made to improve corporate governance in this act are:

• Providing for Director's Responsibility Statement (Section 217(2A)).

• BOD to report when buyback is not completed in time (sub -section (4) of Section 77).

• Small shareholders to get representation through Director (Section 252).

• Limitation in number of Directorship's for a person in companies (Section 274 & 275).

• Constitution of Audit Committees (Section 292A).

• Providing for higher penalties (a tenfold increase) on offenses tothe Act.

A National Award for excellence in corporate governance recommended by a Panel consisting of eminent persons from financial markets and corporate world was initiated by the Government in 1999.

It should be clear now as to the importance that has been laid in good corporate governance. Government, corporate and the civic societies have all been doing their bit to improve the existing level of governance. Need of the hour is to bu i ld an a tmosphere o f mutua l t r us t , responsibility and accountability that makes governing teams enthusiastic to aspire for excellence. Apart from financial compliance or disclosure, the independent oversight of management is also important. Many companies have folded up either due to fraud or poor quality of board resulting from a lack of independent oversight.It is felt that one should have strict enforcement in place while efforts are made to bring non-compliance under the scanner, in the long run it would be crucial to educate the benefits of compliance to both business managements as well as the shareholding public.

Effect of corporate governance on growthIn 2004, India's growth surged toward Chinese levels. An analysis at that time said that India's potential growth was at least 7%. The growth surpassed the projection and went on to touch 8%. Post 2008 with the global crisis and resurgence of

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mega scams in India, the growth declined from its giddy pre-crisis levels to below 5%. Two questions came to mind; 1) Is India's growth potential really above 5%? 2) Has the lack of governance contributed to the decline in growth potential?

India's high growth performance in the last decade was inexplicable. The factors that contributed to the initial surge in growth has been depleting.

• Skilled labor is no more low cost as it has grown in double digits since 2004 to keep up with the inflation.

• Quality of higher education is unable to keep pace with the demands of an economy that is hungry for skills.

• The cost of professional training isbecoming prohibitive and availability scarce.

• Governance has depleted in the last ten years because of corruption and weak enforcement by the State.

• Infrastructure, especially power, has not kept pace with the demands of high growth.

• The locus of corruption has shifted to land whose artificially inflated prices, renders it an increasingly scarce factor of production.

• India's abundant unskilled labor plays no active part because regulations lead to its chronic underutilization.

Every time there is a scam or financial crisis people lose confidence, the share market index goes down; the GDP declines. In FY 2013 India's GDP went below 5%. This year the decline has been arrested with a new government which has come to power on the plank of governance. The economy and the markets have started looking up. India should continue to witness strong growth in the near future, thanks to strong consumption in rural India and rising employment opportunities in non-agricultural sectors. Business leaders today show some degree of optimism despite uncertainty in global economic prospects.

Amid this uncertainty, the economic horizon seems both promising and challenging for India's business leaders. Those who cling to old strategies (of avoidance and/or non- compliance) and focus o n t r a d i t i o n a l d r i v e r s o f b u s i n e s s (illegal/paralegal) growth find the future forbidding and think everything they have built will be destroyed. Others who have experienced

high growth with new strategies of fair, transparent and globally competitive business which has earned them good-will along with profits are optimistic about the future. It is felt that this churning process will evolve and produce c o r p o r a t e w h o w i l l b e s t r o n g e r , practicecompliance and be more successful.

Causes and challenges to corporate governance Employment: The issue of permanent workers vs. contract workers needs to be looked at seriously. A company needs a permanent workforce to produce for normal market demand. They may also need a temporary workforce to meet the peaks of 20-30%seasonal growth rates. The flexibility premium which organizations enjoy should be shared as compensation to temporary workforce. Many companies are not doing this. On the other hand the Industrial Disputes Act, Section 5B does not allow any company to either close or undergo retrenchment. This clause also needs to be changed. The cut off from 100 persons could be increased to say 1000 persons and retrenchment allowance which is 15 days for every year of service could be increased to 45 days. It is recommended that both managements and the government should modify how to handle contract labor. The flexibility to retrench and add manpower should be provided to industry. But compensation paid needs to be higher. The Government also needs to change the focus from job protection of a few to enhancement of jobs on equitable basis for many.

Corporate Social Responsibility (CSR): Several companies have been striving in recent years to run their businesses in a responsible way with fair and ethical treatment of all stakeholders, like customers, suppl iers, shareholders, the community andenvironment.CSR has been defined in the bill as an activity which can be project-wised and is not any form of donation, charity or philanthropy. It requires that a company with net profit or net worth of 500 Cr or more or with a sales turnover of 1000 Cr or more to voluntarily spend 2% of the Net Profit on a CSR project from any of the areas identified by the Government and mandatorily reportthis in the website as well as annual report. Those that do not spend on CSR are also required to report the reasons why they haven't spent on CSR.It is a good move to recast CSR as "responsible business" with a set of voluntary guidelines which Corporate should follow.

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Fear to report misdeeds: People in India are generally afraid to fight corruption because of the fear of harassment and intimidation by powerful elements. The Whistleblowers Protection bill was passed by the Government in 2010. The bill known as the Public Interest Disclosure and Protection to Persons Making the Disclosure Bill, intends to protect whistleblowers, and facilitates the disclosure of information to uncover corruption and deceptive practices that exist in organizations. A whistleblower is a corporate employee, director or associate or any person who raises concern about frauds, corruptions, wrongdoings and mismanagement. The success of such initiative prompts one to formalize the protection against victimization, enabling us all to move a step forward towards successful Corporate Governance.

Weak enforcement: India's laws are overall considered adequate for business. Many of the country's worst problems stem from massive backlogs in the courts and archaicadministrative procedures that are exploited by those seeking to derail the enforcement.Despite having around 10,000 courts (not counting tribunals), India has a serious shortfall of judges. While the United States has 107 judges per million citizens, Britain over 50, for India it's just over 10. About 63% of pending civil cases is more than a year old, and 31% are over three years old. The present government has promised to abolish primitive laws and make it mandatory to clear cases quickly and improve enforcement. If businesses adopt anti-corruption policies and take steps to report any unethical practice to law enforcement, we may see immediate benefits.

Scarcity Syndrome: In the last few years, the Indian economy has become increasingly afflicted by discretionary charges and a lack of transparency in allocation. There have been terrestrial charges for the allocation of land, subterranean charges for the allocation of rights to mining & gas exploration and ethereal charges for the allocation of spectrum for telecom, internet and television broadcasts. Such practices by corporate to secure out of turn allotments has seriously impaired the supply cost in the country.Discretion has affected the provision of infrastructure, power generation capacity, availability and cost of fuels, the benefit of information access to the consumers being the cause and providing the effect.

Steps like retrospective tax ban on mining, cancellation of licenses, CBI investigations of business leaders etc all contributed to a negative effect on business and economy, the downgrading of the Indian economy in the medium term was the consequence. It is surmised that the scarcity syndrome caused by lack of confidence we have in the future, generated out of centuries of fear from plunder from overseas has returned. The challenge is to overcome these inherited tendencies and show robust confidence in the future.

New India generation: The gen next wants instant everything. Instant messages; Instant information; Instant friends;Instant jobs; Instant travel; Instant banking; Instant profits; Right or wrong, good or bad, they want it all now and can't wait. The relentless giving has produced a generation with practically no appreciation for the struggles the previous generations have under gone to get here. The current trends in Indian society led by the next generation are – a focus on swifter recognition and instant gratification, acknowledgement of life outside of work (social media, family expectations among others), emphasis on internal communications at workplace and acceptance of their influence on the future. The expectations youngsters seek today are more attuned to their needs, increased latitude by elders, honest answers to questions, frequent and more meaningful communications, freedom to choose their mentors and a work-life balance. This heralds the birth of a new India.

Interventions and Best PracticesCulture of Ownership: When employees are self-motivated, work with passion, get a sense of pride in belonging to the company; they feel that they own the organization. Developing an ownership culture ensures loyalty and bridges the gap between employer and employee. This feeling can optimize productivity and excellence in governance. The need to create this culture is essential for every company. It reduces problems of employee attrition. Employees are more attached to an organization which has better compliance. Ownership culture enforces the fundamental law of entrepreneurs that 'what is good for the business is good for me'. ESOP or profit sharing is the most direct way of creating ownership culture. While it may not be the only way, it is an effective method.

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Initiatives like flexible working, family-get-togethers, home office working, sabbaticals for fur ther education, f lexible annual leave entitlement, part time working, child care centers, enhanced maternity and paternity leave arrangements, etc. brings a feeling of ownership amongst employees. Ownership brings freedom, but freedom also comes with accountability. People love freedom but abhor accountability. If we don't take ownership, do not accept responsibility and be accountable then the consequence would be loss of freedom.Core values of ownership pivot around accountability but we must also accept that not all people may be driven by ownership.

Collaboration with an equality mind-set: Businesses that work collaboratively, with greater agility, can be more competitive and make better decisions have shown startling results. Companies have embraced collaboration; implement the appropriate processes and metrics. We need to have a national equality standard which is entirely pragmatic, business-led and legally sound. The equality standard should set clear objectives, cover human rights and provide a sustainable practice for business. A collaborative mind-set gives culture tools that create shared direction, alignment and commitment throughout the organization. It allows for the new thinking, beliefs and processes that will result in proper compliance and organizational success.

Simplicity and Transparency in the system: At the heart of proper corporate governance is the identification and corrections in the running of a business rm. Advances in information processing, has shifted the governance balance more towards efficient internal monitoring. Improvement in information dissemination can lead to greater external scrutiny. However, problems between the board and shareholders may lead to lack of both transparency and internal monitoring. Since corporate can take steps to further one mechanism over another, the extent to which a rm relies on internal versus external monitoring must itself be an aspect of its governance arrangements.

Empowering Independent Directors: The regulatory environment in India around corporate governance has changed rapidly and those entrusted with governance i.e. the Board of Directors and the audit committee are responsible for the prevention and detection of fraud. Clause 49 introducing the role of independent directors

was a measure for all listed companies. The Company having non-executive Chairman can have not less than one third of the Board's strength as independent directors. If the company has an executive Chairman, it needs to have not less than 50% of its Board's strength as independent directors. After this amendment from SEBI, companies appointed their 'own' independent Chairman just to ensure that they maintain majority strength on the Board. This clearly shows that India Inc is still not comfortable with true 'independent' directors and is afraid of losing Independent Directors cannot be expected to be independent from the management and act as the trustees of shareholders if their appointments are controlled by those they are supposed to monitor. The corporate governance structure hinges on these Directors, who are supposed to bring objectivity to the oversight function of the board and improve its effectiveness. Independent Directors may not be in a position to stop fraud at the highest level, but with a high level of commitment and due-diligence, they may be well placed to identify signals that indicate that everything is not as it should be and try to stop it. Discretion may lie with the enforcement authority to determine the extent of liability that independent directors may incur if they are unable to stop fraud but take steps to report it.

Crafting a sustainable futureA. Legal remedies and penalties to deter neglect

of governance and provide for severe punishments to modify laissez faire culture in the economy and industry.

The following areas were identified for where such action could be taken in order to achieve this.

Specifying Penalties: A review of the existing penalty levels is necessary to provide sufficient deterrent effect.In addition to enhancing the penal provisions the consequences o f n o n compliance should be widely publicised. Thee company law should state clearly in relation to eve r y r u l e w h a t t h e c o n s e q u e n c e s o f violations/breach are to be.

Filing of documents: A large number of companies default in respect of filing of documents. This would naturally result in vital disclosures being withheld from the public or stakeholders and invite stiff penalties. Defaults that are technical in nature may also be levied a late fee, the process could be made automatic.

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Fraudulent conduct: At present the Companies Act provides for addressing liability from fraudulent conduct of business by a company under section 542 read with section 406. This provision would provide a basis for dealing with fraudulent behavior on the part of companies and their management. It is strongly recommend that penalties for offenses committed with the intent of committing fraud should be enhanced to be a suitable deterrent.

Procedures, Jurisdiction and Appeal for Levy of Penalty: Under the proposed procedure, the Registrar of Companies (ROC) who is a statutory authority will levy the penalty or fine.Appeals can be made before the tribunal and resolved within 30 days. The erring company thereafter should be prohibited to claim any benefit from the State for two years. The ROC should notify the list of all erring and penalised corporate to disallow companies who are paying penalty for some misdeed to benefit from any scheme or benefit announced by the State or Central Government including tax benefits.

Phoenix Companies: A company may act in a manner that is deliberately detrimental to its shareholders, close down or vanishand then resume operations again under a separate name or guise. The phenomenon is aptly termed as the “phoenix company problem”.The corporate veil should be liftedin such instances and the past history of the concerned Directors should be compulsorily disclosed to SEBI and the prospective shareholders before going public.

B. Incentives and motivationare important to provide motivation for practicing good corporate governance than depending only on penalties for non-compliance. It is felt that motivations should be provided on an ongoing basis for observing the practices of good governance.

Direct incentives: Some of the incentives should be pecuniary especially in critical areas where the Government needs the Corporate to play a positive role. There should be rewards in the form of exemption, subsidy or financial support.

Indirect incentives: Government levies do not differentiate between the Corporate who practice good governance andcomply vis -a- vis t h o s e w h o h ave a d u b i o u s r e c o r d o f governance and compliance.Corporate who practice good governance should be given the benefits of

a) Speedy disposal of pending issues in Departments, Tribunals, Courts;

b) Preferential treatment in Government business including auctions, tenders, PPP projects, Joint Ventures etc; and

c) Fast track approvals from MOF, MOCA, & SEBI for enhancing and/or raising capital, through FII, GDR's, M&A etc.

Suggested model for ratingA measure for corporate governance which could act as reference for incentivizing all corporate activities like listing, priority processing of matters with Government departments needs to be evolved. The measure should be in the index format for comparison to help implement improvements. The measure should be carried out by an independent agency under the guidance of ROC who could be the certifying authority.

The Corporate Governance Indicator for India (CGI) index would measure eight dimensions of governance: i) Accountability, ii) System and Procedures, iii) Implementation, iv) Absence of victimization, v) Compliance, vi) Quality of Audit , vii) Composition of BOD and viii) Legal History covering matters in court resolved in favor, against & in court.The index is being tested across India.

Each dimension will carry a weightage. The weightage would depend on the relative importance of the dimension. The weighted average scores on each dimension for a corporate will be in a conditional distribution and normal.

The proposed model: Let C denote the observed score of company j on jk

indicator k. We assume that we can write the observed score as a linear function of unobserved governance g and an error term e as follows:jk jk

Cjk= αk + ßK(g + e )jk jk

Where α and ß are parameters which map k k

estimated factors for unobserved governance g jk

into the observed score. We assume that the error term is also normally distributed with mean zero and standard deviation which varies across data k

sources C . We also assume that the error term ejk jk

is uncorrelated across data sources.

Applying standard results for the multivariate


normal distribution, the conditional distribution of g given the observed data C is normal, will jk jk

have the following mean and variance:

2. Mean µ(C ) = =1 W { }jk jk

Where W is the weighted average of the observed jk

scores across all dimensions

-2 -13. Variance V ={1 + =1 } (jk) k

Here is the standard deviation and square root of variance V will give the standard error for the (jk)

distribution.

The estimates of corporate governance index will carry a margin of error that indicates the dynamics of real time vis a vis status quo associated with measuring governance at a particular time period. The margins of error however can decline over time with judicious use of α and β parameters.The testing for the variable components including the reliability of selected and random sources will be carried out over 100 organizations all over India. Clusters of aggregate measures will be assigned to categories capturing the eight dimensions of governance as mentioned above and the variable components model will be used to construct the corporate governance index.

Future VisionThe future is going to be a dynamic period in India as companies would want to take advantage of the changes in government policies and economic growth. The next 5 years will also be the time for unlearning the earlier practices of non-compliance, procrastination, avoidance, willfully misleading people, corruption & bribery, confidence in easy getaway, and escaping all forms of responsibility.

Consider ing that exemplar y Cor porate Governance practices would be going on, the processes of bench marking the procedures can be carried out by the Registrar of Companies and Ministry of Corporate affairs.The best practices by the Corporate industry in India in the next 10 years through excel lence in Cor porate Governance could be showcased for emulating in the future here as well as elsewhere in the world.

References

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Allen, F. et al. (2012). Financing firms in I n d i a . J o u r n a l o f F i n a n c i a l Intermediation, 21, 409-45.

Bertrand, M., & Mullianathan, S. (2002). F e r r e t i n g o u t T u n n e l l i n g : A n application to Indian Business Group. Quarterly Journal of Economics, 117(1):121-48.

Bhagwati, J.N., & Panagriya, A. (2000). Debunking Myths, Undermine progress and Addressing new challenges. India's Tryst with destiny.

Chakrabarti, W., & Megginson, P. Yadav. (2007). Corporate Governance in India. Journal of Applied Corporate Finance, 1-24.

Hahm, E. , & Le i sy, B. (2010) . Ta lent Management. Managing Today's Global Workforce, May 2010 Study, 10-18.

Ghosh, S.(2006). Do Board Characteristics a f f ec t pe r fo r mance? Ev idence f rom India. Applied Economic Letters, 13, 435-43.

La Porta, R., et al. (1998). Law and F i n a n c e . Journal of Political Economy 106, 1113-50.

Mamta, M., et al. (2009). The Quest for Growth. New Waves of Growth for India-Unlocking Opportunities. Accenture Institute of High Performance Report. 10-14.

Kang, N., & Nayar, N. (2004). The Evolution of Corporate Bankruptcy Law in India. Money and Finance, 37-58.

Pa r e k h , P. ( 2 0 0 1 ) . A c c e s s t o Ju s t i c e. Souvenir of All India Seminars on Justice; UNDP, 326-340.

Reddy, Y.V. (2002). Public Sector Banks and the Governance Challenge – The Indian Experience. BIS Review, 25/2002.

Report on the Observance of Standards and Codes (ROSC). (2004).Corporate Governance Country Assessment: India. World Bank-IMF, Washington DC.

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nk

nk

C αjk - k

ßk

-2

k


Research Papers Repository IIM, ISEC., & AIMS

S e l a r k a , E . ( 2 0 0 5 ) . O w n e r s h i p Concentration and Firm Value: A study from the Indian Corporate Sector. Emerging Markets Finance & Trade, 41, 83-108.

Sarkar, J. , & Sarkar, S. (2000) . Large Shareholder ac t iv i sm in developing c o u n t r i e s : E v i d e n c e f r o m I n d i a . International Review of Finance, 161- 94.

Suchismita, B. (2005). Securities Market Regulation: Lessons from US and Indian Experience. Money and Finance, Jan-Jun, 83-124. wwebsites of Indian Companies in the Corporate Sector.

Disclaimer

The contents of this paper are based on the research, observations, experience and analysis of the participants at the round table conference as well as referred published works of several writers and experts by the author. Opinions expressed do not necessarily represent the policies or positions of AIMS Institutes, Bangalore. The author intends no factual miscommunication, disrespect to or incitement of any individual, community, group, government officials, departments or corporate enterprises through this paper.

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Shivashankari.V.R*, Srividhya.V**, Gayathri.V***

KEY WORDS B2C;Consumerattitudes;E-commerce; Online shopping;Perceived risks

Introduction

In the emerging global economy, e-commerce and e-business have increasingly become a necessary component of business strategy and a strong catalyst for economic development. The integration of information and communications technology (ICT) in business has revolutionized relationships within organizations and those between and among organizat ions and individuals. Specifically, the use of ICT in business has enhanced productivity, encouraged greater customer participation, and enabled mass customization, besides reducing costs.

With developments in the Internet and Web-based technologies, distinctions between traditional markets and the global electronic marketplace-such as business capital size, among others-are gradually being narrowed down. The name of the game is strategic positioning, the ability of a company to determine emerging opportunities and utilize the necessary human capital skills (such as intellectual resources) to make the most of these opportunities through an e-business strategy that is simple, workable and practicable within the context of a global information milieu and new economic environment. With its effect of leveling the playing field, e-commerce coupled with the appropriate strategy and policy approach enables small and medium scale enterprises to

compete with large and capital-rich businesses.

It is recognized that in the Information Age, Internet commerce is a powerful tool in the economic growth of developing countries. While there are indications of e-commerce patronage among large firms in developing countries, there seems to be little and negligible use of the Internet for commerce among small and medium sized firms. E-commerce promises better business for SMEs and sustainable economic development for developing countries. E CommerceE Commerce stands for electronic commerce and caters to trading in goods and services through the electronic medium such as internet, mobile or any other computer network. It involves the use of Information and Communication Technology (ICT) and Electronic Funds Transfer (EFT) in making commerce between consumers and organizations, organization and organization or consumer and consumer. With the growing use of internet worldwide, Electronic Data Interchange (EDI) has also increased in humungous amounts and so has flourished e-commerce with the prolific virtual internet bazaar inside the digital world which is righty termed as e-malls.

We now have access to almost every knick-knack of our daily lives at competitive prices on the

Abstract

Online shopping has become new type of retail shopping. It has now been adopted all over the world including India. This shopping method is still not as well known or accepted as in many other countries, and though the knowledge of online shopping in India is now beginning to increase rapidly, to know the factors in�uencing online shopping behaviour of Indian consumers there are several articles written. The main objective of this study is to analyze factors affecting on online shopping behaviour of consumers that might be one of the most important issues of e-commerce and marketing �eld. However, there is very limited knowledge about online consumer behaviour because it is a complicated socio-technical phenomenon and involves too many factors.

The survey based average data is selected and analyzed. Finally regression analysis was used on data in order to test hypothesizes of study. This study can be considered as an applied research from purpose perspective and descriptive-survey with regard to the nature and method.


A Study on E-Commerce � with special reference to OnlineShopping in Bangalore

*Government First Grade College, Bidadi.** Government First Grade College, Kengeri.

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Internet. No matter one is educated or illiterate, an urbane or a countryman, in India or in U.K; all you need is an internet connection and a green bank account. With e-commerce then, you can buy almost anything you wish for without actually touching the product physically and inquiring the salesman n number of times before placing the final order. Amazon, eBay, Naaptol, Myntra, etc are some of the most popular e-commerce websites.

Tracing some steps back, it's been recorded that some institutes of the western world started exchanging information and data electronically by the late 1970s. But the concept of online trading of goods was first witnessed much later with the dawn of 1990. In 1994, Jeff Bezos; an American businessman started his e-commerce website Cadabra.com, now popularly known as Amazon.com. Amazon was the first online firm to execute secured online transactions. At the onset, Amazon was known as an online bookstore, but with the whelming customer-response it expanded to trading in books, music, apparels, CDs/DVDs, electronics, MP3s, v ideogames and many more. Running successfully, round-the-clock since 1994, surprisingly Amazon recorded its first profit in the year 2003 only. Although, Amazon proved to be a successful business model by late 2003, it's no less than a fact stating its tremendous popularity. The 'enriched library', online review system and a user friendly website are still the starred assets of this e-commerce company.

Dell Inc emerged as the first company ever to record sales in millions of dollars in 1997. It was also the first company to sell large number of assembled computers online. It is popularly known for its successful business model and in the year 2007, it was listed as the 34th largest company in the Fortune500 list.

The growth rate of India's e-commerce industry is fascinating. It was reported as 88% in 2013.

Total global E-commerce sale in 2011 have grown to Euro 690 billion (USD 961Billion) and recorded an increase of 20 % with an estimation of increase in the coming years and to cross the 1 trillion Euro mark in 2013. Asia pacific region is leading in terms of growth as compared to mature markets like US, UK, Japan and European countries. Asia Pacific recorded 130 % growth specially China in 2011. The online retailing is becoming an integral part of an economy and

country and worldwide increasingly seeing trust a n d c o n f i d e n c e i n p u r c h a s i n g o n l i n e (AadWeening, 2012).

Statistical data on the size and performance of Indian e-commerce industry:

• In 2013, the size of the market was $ 16 billion which was $ 8.5 billion in 2012.

• The growth rate in metro cities of India is expected to be much higher than the other cities of the country.

• The e-commerce industry is expected to be of $56 billion by 2023. But contradict to it, another forecast supported by IANS, the e-commerce market is expected to grow by $ 50- 70 billion by 2020.

Shopping onlineIndia has more than 100 million internet users out of which one half opts for online purchases and the number is rising sharply every year. The growth in the number of online shoppers is greater than the growth in Internet users, indicating that more Internet users are becoming comfortable to shop online. The capability of purchasing without leaving your place is of great interest to many consumers. Not only does online shopping offer really good deals, but also brings optimum convenience to the consumers. Moreover, the use of Internet tools for price searching and comparison provides an additional advantage in consumers' final decision, as they can purchase their desired products in the lowest available price. This project focuses on the understanding of perception of online purchase in India. For this purpose the data from 100 respondents was collected in the form of questionnaires. With nearly half of the Indian population being young and net savvy, there has been an extra ordinary rise in the numbers of online shoppers. The recent growth in the mall culture in the country has in fact made consumers more aware about different options and encouraged them to search and eventually purchase online. India has more than 100 million internet users out of which one half opt for online purchases and the number is rising sharply every year. The growth in the number of online shoppers is greater than the growth in Internet users, indicating that more Internet users are becoming comfortable to shop online. Until recently, the consumers generally visit online to reserve hotel rooms and buy air, rail or movie tickets, books and gadgets and gizmos, but now more and more offline product like clothes - saris, kurtis, T-shirts - shoes, and designer

57


lingerie, consumer durables are being purchased online. At present the market is estimated at Rs.46000 crore and is growing at 100 percent per year. The two most commonly cited reasons for online shopping have been convenience and price. The capability of purchasing without leaving your place is of great interest to many consumers. Not only does online shopping offer really good deals, but also brings optimum convenience to the consumers. Moreover, the use of Internet tools for price searching and comparison provides an additional advantage in consumers' final decision, as they can purchase their desired products in the lowest available price .On the contrary, privacy and security have been the great concerns, resulting many people to browse the Internet for informational matters than for buying online.

Digital downloads are now common too. Items previously sold on physical media (CDs, DVDs, books) can instead be downloaded directly to a customer's computer or handheld device.

Buying goods onlineThe process for buying goods online commonly involves:

1. browsing through the online catalogue2. adding items to the virtual basket3. visiting a virtual checkout4. choosing payment and delivery method5. order confirmation6. shipping confirmation (via email or sms)

Online shopping retail sales are predicted to grow steadily to $370 billion in 2017, up from $231 billion in 2012.

Consumers ages 25 to 34 lead the way in smart phone usage in-store, comparing prices, reading reviews, buying products, and engaging with brands on social media while in physical stores.

Perception

In general psychological terms, perception is our ability to make some kind of sense of reality from the external sensory stimuli to which we are exposed. Several factors can influence our perception, causing it to change in certain ways. For example, repeated exposure to one kind of stimuli can either make us oversensitive or desensitized to it. Additionally, the amount of attention we focus on something can cause a change in our perception of it.

Consumers all around the world are faced by the problem of lack of complete information on the products that they are interested in purchasing. It is imperative for consumers to be able to bridge this information gap and most consumers choose to go through a number of searches on the product before making up their mind to buy the said product. The emerging trend in this day's market is the use of the internet to retrieve product information. The emergence of online marketing has been one of the push factors that have pushed consumers to the internet to gather information on a certain product that they are interested (Hauser, 1978). The internet has turned out to be a one stop source for information where consumers can get product reviews from stores or even from other products.

For example the online shop Amazon.com allows consumers to purchase goods online and then the customers on receiving and using the product they can comment on their experience with the product. This has helped boost the consumer purchasing volumes since some websites offer extra information for consumers. The offer information for example related goods to the good that the consumer is looking for. Some websites offer information for example “consumers who bought this good also bought this good”. This is acting as a source of empowerment for the consumers who are getting more aware about the goods that they are buying. Through the internet marketers for example of brands are offering information to consumers so as to give them the opportunity to make informed buys (Hauser, 1978).

Review of Literature1. Online shopping behavior (Yuan Gao,

2005) depends on four shopping motives personality variables, internet knowledge and experience and last factor is shopping incentives. These are key determinants to

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Inf luence the behavior of onl ine consumers. Online seekers are the main sources of online shoppers. Online shoppers always want to seek information within few clicks and reach to the most relevant information according to their requirements such as competitive brands, best price offers, product specification and consumer word of mouth.

2. Based on their personality online consumers have two characteristics (Subhasish Dasgupta, 2006). a) Manifestation of offline consumer behavior b) uniquebehavioral mode. Virtual communities also play an important role on online c o n s u m e r b e h a v i o r a l . V i r t u a l communities are also known as “Venuses for Consumptions”

3. The formation of online consumer strongly influenced by its personal experience, influence of its social network, direct marketing, mass media and the Internet. From researches it is shown that direct experience (e.g. product usage) is more attractive towards online shopping rather than direct experience (e.g. reading a print ad) (Schiffman, 2009).

4. Sharma and Mittal (2009) in their study "Prospects of e-commerce in India”, mentions that India is showing tremendous growth in the Ecommerce. Undoubtedly, with the population of millions of people, online shopping shows unlimited potential in India... Today E-commerce is a common word in Indian society and it has become an integral part of our daily life. There are websites providing a number of goods and services. Then there are those, which provide a specic product along with its a l l i e d s e r v i c e s . M u l t i - p r o d u c t ecommerce. These Indian E-commerce portals provide goods and services in a variety of categories. To name a few: Apparel and accessories for men and women, Health and beauty products, Books and magazines, Computers and peripherals , Vehicles, Software, Consumer electronics, Household

appliances, Jewellery, Audio/video, entertainment, goods, Gift articles, Real estate and services.

5. Ramírez Nicolas (2010) states that "The Internet has changed many facets of our daily lives: the way we relate and communicate with one another, how we interact with a bank, read newspapers or watch television. Even the way we buy and sell. These changes have occurred due to the constant ow of companies offering new business models and innovative formulae. Discount coupons have always been a powerful marketing tool. Whether inserted in printed media or posted through letter boxes, they attracted new customers and were also offered at the time of purchase to p r o m o t e c o n s u m e r l o y a l t y b y encouraging repeat purchases at outlets. In order to play the "high number game", there were many businesses which offered special discounts to a group of customers together. This led Andrew Mason in 2008 to launch "The Point", an online community to obtain best group deals. In the November of same year, famous "Groupon" was incorporated. Currently, Groupon is present in over 45countries around the world since March 2010, and has received multi-million dollar bids from industry giants like Yahoo! and Google .All these advantages have triggered a rush among consumers to buy discount coupons and the rate of user growth is rising incessantly.

6. Dr.GagandeepNagra, Dr.RGopal (2013 ) in their paper 'A study of Factors Affecting Online Shopping Behavior of Consumers' have stated that in their paper that the organization can prioritize the consumer inherent and unequivocal requirements in online shopping environment. The results can also be used by various organizations to identify their target customer segments.

Research DesignFor this study descriptive research design has

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been adopted because this paper will analyze the factor of purchasing and consumer intention regarding online shopping. Bangalore is considered as a universe. It is not an easy task to study the overall population of determined area. A structure questionnaire will be used by researcher for collecting the response and for drawing the conclusion. Probabilistic method of sample selection will be used for this study. In this study Convenience Sampling method is being used.

Data source

Primary data The research has been developed through observation and collection of data through questionnaires. Theory is developed on the basis of field visits, feedback obtained through e-mail, queries solved through telephonic conversation and result of the data analyzed. Secondary Data: Theory is developed on the basis referring secondary like books, journals and magazines related websites, News papers.

Sampling methodConvenience sampling was used.

Sample SizeThe questionnaire was given to 60 samples. Data was collected from 60 respondents who frequently do on on line shopping. Non probabilities sampling techniques was used. The various tests like percentage analysis, correlation, weighted average method. Questionnaire was used to collect the details from on line shoppers. In questionnaire question include profile details, shopping habit details, and the satisfaction level of online shopping details. Questionnaire is constructed in simple language in order to reduce the risk of ambiguity.

Limitations of the Study The study is focused only to respondents of Bangalore City.

• The duration of project is very short period.

• The study is focused only to the perception of online shopping due to lack of time.

Method of analysis The chi-squared (I) test is used to determine whether there is a significant difference between the expected frequencies and the observed

frequencies in one or more categories. In this paper Chi-square is used for the hypothesis analysis.

Objectives of the study • To study the awareness of online shopping

among customers of Bangalore.• To analyze the factors of onl ine

purchasing which promotes consumers for online shopping.

• To study the important factor which refrain them from online shopping.

• To analyse the satisfaction level of on line shopping.

Data Analysis

InterpretationFrom the above table and chart it can be interpreted that Majority that is 63% of the respondents are Male and 37% are female. Therefore we can understand that male respondents are more interested in online shopping than female respondents.

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InterpretationIt can be inferred that Majority of the respondents fall in the category of 21 – 30, followed by 20% of the respondents come in the category of 31 – 40. 19% and 17% fall under the category of 41 -50 yrs and 11 – 20 years respectively. Only 9% above 50 yrs prefer online shopping. This shows usage of technology in shopping at various level of age group.

Experience of Online Shopping

Monthly Income of the Respondents

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InterpretationIt is found that majority of respondent fall under the category of 40,001 – 60,000 and 60,001 – 80,000 and 20% belong to the category of < than 20,000.

Showing Amount Spent on Online Shopping

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InterpretationThe above table and graph shows us clearly the 39% of the responds spend 5,001 to 10,000 followed by 28% of the respondents spend in the range of 15,001 to 20,000 and 15% spend between 10,000 to 15,000.

InterpretationThe above table and chart shows that 60% of the respondents own credit card and 40% do not own credit card.

Showing Respondents owing credit cards

Type of product purchased Online

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InterpretationThe table and chart shows that majority that is 23% of the respondents shop forBooks, Music, Videos & Recordings followed by Services(insurance, legal) at 22%, 19% shop for Clothing ,Costume and Jewelleries and 18% shop for Electronics and Accessories and Travel and Tickets(airlines, car rentals, hotels) each.

Frequency of Online Shopping

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InterpretationIt can be inferred from the above table and chart that 25% of the respondents shop often. 22% shop often and 20% shop very often and another 20% never shop and they only browser for info and 13% rarely shop.


The above table and chart clearly shows us that Majority of the respondents that is 74% of the respondents are highly satisfied. 14% are neutral about their satisfaction level and 12 % are not satisfied with the experience of online shopping.

Hypothesis Testing Findings

I. Gender-Amount SpentNull Hypothesis (Ho): At 95% significance level, gender does not have any impact on the average amount spent per purchase made online.

Alternate Hypothesis (H1): At 95% significance level, gender has an impact on the average amount spent per purchase made online.

Findings: The test reveals that there is no significant difference between gender of the respondents and their opinion on average amount spent per online purchase as the ²value is lesser than table value which is 9.49, null hypothesis is

accepted.

II. Income-Type of product purchasedNull Hypothesis (Ho): At 95% significance level, income of respondents has an impact on the Type of Product purchased online.

Alternate Hypothesis (H1): At 95% significance level, income of respondents does not have an impact on the Type of product purchased online.

Findings: The Test reveals that income of respondents has an impact on the type of product purchased online as the ² value is lesser than the table value which is 26.29, null hypothesis is accepted.

III.Credit Card- Frequency of Online ShoppingNull Hypothesis (Ho): At 95% significance level, owning a credit card does not have any impact on the frequency of online Shopping.

No of Respondents

Experience of Online Shopping

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Alternate Hypothesis (H1): At 95% significance level, owning a credit card has an impact on the frequency of online shopping.

Findings: The Test reveals that owning a credit card has an impact on the frequency of the online shopping as the ² value is greater than the table value which is 9.49, null hypothesis is rejected.

Findings of the Study

1. 63% of the respondents are male and 37%

of the respondents are female.

2. Majority of the respondents fall in the

category of 21 – 30. Only 9% above 50 yrs

prefer online shopping.

3. Whopping respondents come under the

graduate level and post graduate level.

4. Most of the respondents come under the

category of employed under occupation.

5. 22% of the respondents come under the

income level of 40000 to 60000 and

20,000 – 40,000. 17% come under the

income level of 20000 and above.

6. Almost a l l the respondents have

undergone the experiences of on line

shopping.

7. Whopping 95% of the respondents

strongly agree that online shopping

provides more variety of products and

only 5% of the respondents disagree about

the wide variety of products in on line

shopping.

8. It has been depicted that majority of the

people bought Books, Music, Videos &

Recordings (23%) followed by Services

(insurance, legal) (22%). It was observed

that many of the respondents bought

other items like clothes, shoes and bags

online. The least wished item for buying

online was flowers. Thus this result can

help marketers to formulate marketing

strategies accordingly.

9. 20% of the respondents use internet for

shopping very often. 22% of the

respondents use sometimes and 13% of

the respondents use the internet rarely.

10. 70% of the respondents use Flipkart,

S n a p d e a l , A m a z o n . 2 0 % o f t h e

respondents use eBay,Jabong, Naaptol

and a negligible 10% of the respondents

use Myntra Yep me , E buyer.

11. 64% of the respondents use internet for

shopping and at work, 24% use internet

for education and shopping, and the

balance 12% of the respondents use

internet for hobby.

12. The survey has shown that 98 percent

respondents have agreed that online

shopping saves time and money. Thus the

majority of the people agreed with the

time and money saving quality of online

shopping.

13. 40% of the respondents are not satisfied

with the quality of the product on line

shopping, 35% of the respondents and

satisfied to some extent and only 25% of

the respondents are satisfied with the

quality of the product to a very great

extent.

14. Most of the respondents say around 80%

of the respondents use cash on delivery for

payment method and around 15% of the

respondents use cheque and only 5% of

the respondents use credit card and debit

card for payment.

15. Almost 78% of the respondents state that

reputation of the company, delivery time ,

guarantee and warrantees, description of

goods, security, prices are important for

them while purchasing goods from

internet and 6% of the respondents feel

that is very important for them, 10% feel

that is neither important nor unimportant

and 6% of them that it is unimportant for

them.

16. Whopping 95% respondents feel that the

following factors are important for them

which has kept them away from shopping

on the internet

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a. Waiting to receive the product

b. Risk of credit transaction

c. Difficulty in returning the product

d. Risk of not getting what has been paid

e. Risk of loss of privacy

f. Not skilful with internet

g. Lack of trustworthiness of vendor

h. Complex compared to traditional shopping.

I Not able to touch products. And 5% of the

respondents feel that it is very important for

them for keeping them away from online

shopping as it is more expensive compared to

retail stores and also that they have undergone

a bad experience.

17. Majority of the respondents that is 74% of

the respondents are highly satisfied. 14%

are neutral about their satisfaction level

and 12 % are not satisfied with the

experience of online shopping.

SuggestionsThe online shopping is getting popular among the young generation as they feel it more comfortable, time saving and convenient. It is analyzed from the survey that when a consumer makes a mind to purchase online goods he or she is affected by multiple factors. The main crucial identified factors are time saving, the best price and convenience. The best price factor is popular among online shoppers because generally in online markets prices are lower as against the physical markets. People compare prices in online stores and then review all feedbacks and rating about product before making the final selection of product and decision. To purchase online the products are in demand because of the best price, convenience and time saving. The main barrier in the process of online shopping is the safety issue. People are afraid to share their personal information and financial information on internet. Credit cards are also not available to all in general as majority of the consumers are young generation and to avail credit cards in not a simple process. Due to which consumers are reluctant to make online purchasing, then second the most familiar barrier is the low level of trust on online stores therefore, sellers have to make proper strategies to increase the consumer's level of trust on them.

In addition to above information, the respondents also shared the information regarding their expectations for improvement in online shopping

websites. The respondents said that by improving the after sale services, securities of the online payments, speed in delivery of goods purchased and improving the packaging of the goods can further increase the interest of shoppers for e-tailing rather than visiting a retail store.

The buying behaviour of Consumers can be elaborated through findings obtained through survey. By focusing on various factors identified in this study, the corporate can make their marketing strategies in better way. It will help to convert their potential customers into active customers. By improving the after sales services, providing more secured payment options, timely delivery of the goods with better packaging can further boost the demand of various products and services through web stores.

ConclusionOnline shopping has become extremely popular over the last decade. Utilized mostly by the "Net- Generation", this service is extremely convenient. Although online shopping can be very convenient and beneficial there are also some potential problems that can arise.

Consumers have been seen to exhibit different buying behaviors when shopping online than when they are shopping in a physical store. After applying statistical techniques it was found that there is no significant difference among the response of male and female respondents. This makes it imperative that retailers study the behaviours of consumers and make changes in order to remain profitable and successful. The overall results prove that the respondents have perceived online shopping in a positive manner. This clearly justifies the project growth of online shopping. The results can also be used by various organizations to identify their target customer segments.

References

Dasgupta, S. (2006). Encyclopedia of virtual communities and technologies. London: Idea Group Inc (IGI), 340.

GagandeepNagra., & Gopal , R. (2013). A study of Factors Affecting Online Shopping Behavior of Consumers. International Journal of Scientific and Research Publications (IJSRP), 3(6).

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Schiffman. (2009). Consumer Behavior. India. Person, 258.

Ramírez Nicolas (2010). Asian J o u r n a l o f management and research 3(2), 396-405.

Sharma and Mittal (2009). Prospects of e-commerce in India, Asian Journal o f management and research, 3(2), 396-408.

Yuan Gao. (2005). Web systems design and online consumer behavior. London: Idea Group Inc (IGI).

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Ms. Lakshmi, H.S*, Dr. B.A.Karunakara Reddy**

KEY WORDS Employee Attrition;Job Satisfaction; Retention Strategies; Talent Management; Work Life Balance

Introduction

Companies in India as well as in other countries face a formidable challenge of recruiting and retaining talents while at the same time having to manage talent loss through attrition be that due to industry downturns or through voluntary individual turnover. Losing talents and employees result in performance losses which can have long term negative effect on companies especially if the departing talent leaves gaps in its execution capability and human resource functioning which not only includes lost productivity but also possibly loss of work team harmony and social goodwill.

Employee retention refers to policies and practices companies use to prevent valuable employees from leaving their jobs. How to retain valuable employees is one of the biggest problem (& challenge) that plague companies in the competitive marketplace. Not too long ago, companies accepted the “revolving door policy” as part of doing business and were quick to fill a vacant job with another eager candidate. Nowadays, businesses often find that they spend considerable time, effort, and money to train an employee only to have them develop into a valuable commodity and leave the company for greener pastures. In order to create a successful company, employers should consider as many options as possible when it comes to retaining

Abstract

Employees are the asset to the industries, particularly to Information Technology Industries. Employees in this industry have spread across wide range of age group, culture and Nations. Hence their attitude towards work changes very quickly. As soon as they feel dissatis�ed with the current employer or the job or reason may be any, they switch over to the next job. It is the responsibility of the employer to retain their best employees.

Talent management is an organization's commitment to recruit, retain, and develop the most talented and superior employees available in the job market. If they don't, they would be left with no good employees. The objective of this study is to suggest some strategies to retain the employees in IT industry. This paper is to examine the literature relating to retention of good employees and the role that work-life balance (WLB) issues have in an employee's decision to stay or leave an organisation.

The paper begins with a brief overview of the seminal material in the more generic management literature and then tailors the discussion to Information and Technology Industry in Bangalore. The paper provides an overview of the key employee turnover literature within the Information and Technology Industry in Bangalore for those academics researching in this area, with speci�c attention given to the role of work life balance issues in the turnover decision-making process. The paper also provides a theoretical and practical framework for industry to develop talent management strategies for reduced employee turnover, with a focus on the role that balancing work and family plays in these strategies.

The key �ndings emerging from this literature review focus on job attitudes such as job satisfaction and organisational commitment, personal attributes such as positive and negative affectivity, the role of work life balance in employee turnover and, �nally, the strategies provided to alleviate high turnover rates.

Suggestions to management are presented for organisational consideration. These suggestions include the need for legislation on maximum, as well as minimum working hours, good role models at the workplace, �exible working hours and arrangements, sound recruitment and training opportunities and company family friendly work policies.The most intriguing idea that emerged in my review of talent management was the success of implementing talent management review meetings. By talking about talented employees and making their knowledge, skills and potential known to other managers in different parts of the organization, the potential use and development of internal talent is magni�ed for both the organization - and the talented employees.


Talent Management, Work Life Balance and Retention Strategies

*Research Scholar, Bharathiar University, Coimbatore**Professor, School of Commerce, AIMS

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employees, while at the same time securing their trust and loyalty so they have less of a desire to leave in the future. Employees need to be retained because good, faithful, trained and hardworking employees are required to run business. They have acquired good product knowledge over the long run and a trained employee can handle customers better and also solve problems of peers who are new to the organization. When an employee leaves he takes away with him all company information such as ongoing projects, etc. Goodwill of the company gets hampered due to more employee turnover rate and the competitors start poking their nose to recruit best talents from them.

Efciency of work is hampered to a large extent with attrition rates being a bane of every industry; companies are devising innovative business models for effective retention of talent.

Employee retention has become a major concern for corporates in the current scenario. Individuals once being trained have a tendency to move to other organizations for better prospects. Lucrative salary, comfortable timings, better ambience, growth prospects are some of the factors which prompt an employee to look for a change. Whenever a talented employee expresses his willingness to move on, it is the responsibility of the management and the human resource team to intervene immediately and nd out the exact reasons leading to the decision. Some of the retention strategies employers are adopting are talent management and work life balance.

Purpose of StudyEach day, the competition is out to steal your most talented employees. The best defence is to create a total work experience so attractive that your brightest star would never consider leaving. The aim of the present report is to study factors like reasons for attrition, retention strategies, importance of talent management, and role of work life balance in retaining the efcient employees.

Objectives of the Study• To identify the employee retention

strategies followed in the IT industry in the city of Bangalore.

• To analyse the importance of talent management.

• To know the perception of employees about work life balance.

• To retain efcient employees by adopting talent management and work life balance

Review of LiteratureDespite several studies carried out on employee retention, the strategic human resource researchers are still investigating the causal mechanisms between HR practices and rm's performance mostly related to voluntary turnover as a critical component (Shaw, Gupta and Delery, 2005) as employee retention plays a vital role in bridging the gap between the macro s t r a t e g i e s a n d m i c r o b e h a v i o u r i n Organizations. This is because it ensures stability and connects the experiences of individuals in Organizations on a continuous basis to the critical measures of success factors in the Organization. The decision of leaving the Organization is not easy for an individual employee as well as signicant energy is spent on nding new jobs, adjusting to new situations, giving up known routines and interpersonal connection and is so stressful (Boswell, Boudreau and Tichy, 2005). Therefore if timely and proper measures are taken by the Organizations, some of the voluntary turnover in the Organization can be prevented. The reasons for employee turnover may vary from external environmental factors such as economy that inuence the business that in turn affects the employment levels (Pettman 1975; Mobley, 1982, Schervish, 1983; Terborg and Lee, 1984) to Organizational variables such as type of industry, occupational category, Organization size, payment, supervisory level, location, selection process, work environment, work assignments, benets, promotions and (Mobley, 1982; Arthur, 2001).

Managing high-performing employees can also be stressful at times. There is no single denition of employee retention that ts all circumstances. To retain employees, you must choose the right tools to achieve your goals. The possibilities are numerous – compensation schemes, crèches, pension plans, cars, bonuses, fresh paint, coaching, 360-degree assessments, barbecues, to name just a few.

Research DesignResearch design is a blue print or framework which species the details of the procedures necessary for obtaining the information needed to structure or solve research problems.


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The present study was carried out in Information technology industry, Bangalore. A sample of 80 employees was selected for gathering primary data. Convenience sampling method was adopted for more accurate and easier way of study. The primary data was collected by using questionnaire method

This paper is based on empirical research is used. A mixed method approach was followed for investigation, which included self-completed questionnaires, focus group interviews, and possible secondary sources like Journals, Books, Magazines, Internet and Newspapers was referred to know the contemporary employee retention scenario. Collected data has been analysed by using percentage analysis and simple ranking analysis. Primary and secondary data have been used to draw appropriate conclusion.

Data Collection1. Primary Data: The questionnaire was filled

by directly meeting the employees of the organizations.

2. Secondary Data: Secondary data were collected from newspapers, magazines, Journals, online resources, etc.

Results and DiscussionThe variables identified for the study have been explained for better comprehension.

Job stress leading to work-life imbalances: Jobs in software industry bring lot of pressure and stress for these professionals. Stress at workplace can be triggered by work related or non-work related issues. Work related pressure is generally due to overwork, forced overtime, early morning-night shifts due to strict deadlines and when, there is too much of pressure on performance. Non work related stress can be contributed by personality conflicts, disorganized supervisors, gossip, harassment, poor teamwork, manager abuse and general insensitivity of management towards employees. The stress levels in employees may lead to fatigue, lesser or no time with family and loved ones, taking a toll on their personal life. Thus when the professional stress invades the personal life and employees are not able to handle this anymore; they start exploring other options and often switch to other jobs even if they have to compromise on their salary and benefits for a job where they could devote more time to their family.

Job availability in the market: Job availability in the market is one of the primary reasons for employees' voluntary attrition across all the companies in software industry. High demand of software professionals leads to plenty of employment opportunities in the market and this posi t ive percept ion of exter nal market opportunities directly influences the attrition decision-making process. The type and intensity of a job search is however affected by an employee's and organizational characteristics influencing the intention to leave. Generally it has been found that high performing employees are more likely to quit than low performing employees if the market condition is good in terms of job availability. This variable tends to be more influential in booming times than at the time of recession.

Promotion or Career advancement: Opportunities to learn and grow are weighty in attracting and retaining techies and if the organization is not able to provide opportunities that meet the growing aspirations; employees may start exploring other options. There was a time when providing good working conditions, above par pay and perks could motivate employees to stay and perform but today, beyond all these things employees' expect ample of opportunities for career advancement in the organization. Sometimes employees are not aware of the ways they can grow in the organization and who are the role models within the organization. Such kind of persisting ambiguity and lack of career planning drives/instigates an individual to look for other jobs.

R e m u n e r a t i o n : A s p i r a t i o n f o r h i g h e r remuneration with better benefits and incentives is another variable responsible for attrition of software professionals. Most of the compensation plans usually fail to satisfy the employees. The employees expect salary revisions very often and if this does not happen they tend to move to other organizations which are providing them better remuneration. The overwhelming desire of these professionals to work on overseas assignments is also primarily motivated by financial concerns. The appropriate as well as attractive salary has always been an important subjective variable responsible for the attrition of employees as there is no standardized system of compensation followed in the industry.


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Career change (including formal study any kind of educational pursuits): Quitting job for educational pursuits is yet another reason for attrition in the case of these professionals. Seasonality and a spike in the number of employees going for higher studies also contribute significantly for attrition Although employees may leave their job any time for educational pursuits but generally Q1 and Q2 are the periods when maximum number of employees leave for higher studies, so these are the times when attrition is slightly higher than the rest of the quarters. Some of the employees decide to leave a company or at times even an industry, if they feel an inappropriate fit between their personality and organizational requirements. Such employees are the employees who wish to explore other avenues and with that desire tend to switch to other jobs.

Constant Change and Uncertainty in the present working environment: It is quite common in many companies that employees are shifted from one process to another depending on the requirement of projects. Employees generally take time in getting acquainted with the new processes and shifting of project and responsibilities puts additional pressure and stress on the employees. Some of the employees adjust to these changes and some of the employees who find it difficult to adapt according to the new environment; out of frustration decide to leave the company.

Dissatisfaction with performance appraisal system: It has been viewed that most of the employees generally don't understand the appraisal process of the organization. They are not clear about the appraisal parameters and the way they are appraised in an organization resulting in the accumulation of regrets about it. While interviewing some of the professionals we came to know that once the ratings are finalized, although there is a provision of discussion of appraisal with the appraiser, it generally remains a process only on the appraisal workflow lifecycle without tangible dissatisfaction redressal or re-rating. If the employees feel that they are more worthy and have been undervalued and are discontented about the way they have been appraised in the organization they prefer to switch to an organization which would recognize their contribution a bit more.

Lack of autonomy and creative freedom: Autonomy is the degree to which a job provides an employee with the discretion and independence to

schedule their work and decide how it is to be done. It is a positive attribute for employees, managers, teams, and organizations as a whole. Employees generally desire autonomy and creative freedom, and when it is not provided to employees it leads to inefficiency in some way or the other. This quest for autonomy and creative freedom is another reason for churn in the industry, especially amongst the creative fraternity. Creative people value their freedom more than money and in the absence of autonomy and creative freedom prefer to opt out.

Organizational stability: The nature of software industry shows that it is difficult for software companies to maintain a consistent growth rate. There are always ups and downs in business activities related to projects. The employees assess management values, work culture, work practices and credibility of the organization. Most of the employees are not highly motivated to work in the organizations which are not upfront about the level of stability within the organization. Unstable work environment and the impending threat of further change reduce employees' performance and commitment and provoke employees to leave their job.

Brand image: Brand image, which helps in building the value proposition over competitors, is another variable which has been found responsible for attrition. The employer's image is shaped by personal and professional experiences of the existing employees and; with the kind of reputation the company enjoys in the market. Hence it becomes important that an employer examines at regular intervals, the factors which are critical for creating a positive brand image which may help in engaging and retaining employees. The presence of clear focus, business plans and campaigns and employee friendly policies are a must for creating positive brand image inside and outside the organization.

Personal Reasons (unrelated to the job): At times employees are satisfied with the job but still decide to quit the company because of personal concerns unrelated to their job. These personal concerns may be health concerns, - pregnancy, illness, spouse getting better job at another place, shifting to outsourcing roles commuting for long distance in the same city and many others. However there are employees who relocate to tier 1 cities for a better lifestyle, for better opportunities for children/ family or for more career options.


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Dissatisfaction with

Compensation Level

Similarly employees may also relocate to tier II or tier III cities either to reduce the expenditure, for simpler lifestyle and health concerns. These basically include reasons which are generally beyond the control of the company.

Data Analysis and Interpretation

A. Talent management through proper training: The main motive of asking this question is to

know that whether the deserving employees are given training to enhance their knowledge. The executives think that the training given to them is important. The result shown in figure 1 is that total of 48 employees agree and 11 employees disagree. They believe that they don't need training. But training is important because it gives them the knowledge about the plans, which they have to sell, and it also helps them in connecting to their company. It is also important because it helps them in solving their que r i e s, wh ich they have abou t the documentation as the same is

Figure 1

B. Work life Balance: This question is asked to know whether the employees can manage both personal and professional life.06 employees strongly agree and 40 employees disagree with this aspect (Figure2). They feel that they give more importance in achieving the targets rather than concentrating on their personal life.

Figure 2

Covered during these training sessions. Also it will help them in understanding the importance of teamwork as special training is given to make them understand the importance of team working.

C. Dissatisfaction with compensation level: The purpose of asking this question is to know that the executives are sat is f ied with the compensation they are being given. So that we can come toknow that if there is any need to make any changes in their compensation pattern. As being shown in the figure only 04 executives are satisfied with the compensation being given to them. 06executives neither agree nor disagree with theircompensation and 46 of the executives are dissatisfied with the compensation given to them (Figure 3).The compensation given is quite less in accordance to the work the executives do. Their pay must be increased so that they also feel worth enough and become motivated to perform good job

Figure 3


Work Life Balance

Talent managemen

through proper training

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D. Rewards and Recognition based on the talent of employees: The reason why this question is asked is to know if these executives are given reward and recognition on the spot for the good work done to motivate them. According to the figure 26executives agreed that they are given reward and recognition on the spot for the good work done by them, 4 executives neither agree nor disagree and 28 executives disagreed that they are given reward and recognition on the spot (Figure 4). The reward and recognition should be given to them on the spot for the good job they do as it boost them and will help them to improve their performance.

Figure 4

E.Working Conditions:The motive of asking this question is to know about the atmosphere of the companies they areworking in. If it is friendly and motivating andgood to work. 44 of the executives agree that the atmosphere of their companies is friendly and motivating, 19 neither agree nor disagree and 12are those who are not satisfied with the atmosphere of their companies (Figure 5). They do not find the atmosphere of their companies friendly and motivating. If the working condition is good, it helps them to perform well in their field and hence productivity increases.

Figure 5

F. Assigning the job based on their skill: The reason for asking this question is to know if the job specification is done properly or not. Total of 59 executives agree that yes their job is according to their knowledge and qualification and only 05 executives disagreed to the statement(Figure 6). This clearly indicates that the responsibility of doing the job entirely matches thecapability of the jobholder.

Figure 6

G. Ability to meet targets:The motive behind asking this question wasto know if the targets given to the employees are achieved by them in time or not and 48 executives agreed to the above said statement and 05executives disagreed (Figure 7).

Figure 7

Rewards andrecognition based on

the talent ofemployes

Assigning the jobbased on their skill

Working Conditions

Ability to Meet the Targets

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H. Lack of autonomy and creative freedom: O n ly 0 4 exe c u t ive s s a i d ye s t o t h e abovestatement. As the employee does not have freedom to implement their innovative ideas they are planning to start up with their own business and 44 executives disagreed to the above statement (Figure 8). This clearly indicates that employees that are at the executive level still want to continue with their present job but might think of becoming entrepreneurs sometime in future.

Figure 8

I. Dissatisfaction with performance appraisal system:The executives were asked if they are satisfied with the performance appraisal system of the Company 33executives were found satisfied and 18 were not satisfied. The ratio is very much varying from theexecutives who agree and those who disagree (Figure 9). The reason behind this might be HR Resourcing policy, Promotion policy for Officers,Transfer policy for officers, Promotion policies or overseas selection policy of the company.

Figure 9

J. Participation in Management:45 executives agreed that their suggestions were considered and are given chance in decision –making and only 3 disagreed to the above statement (Figure 10). This shows that the companies treat employee's participation in management as an important task and an effective measure t o i n c r e a s e t h e p r o d u c t i v i t y a n d theperformance of the employees.

Figure 10

FindingsFrom the above data analysis and interpretation, following were the findings:

1. Training is not given to the deserving employees to enhance their skill.

2. There is no work life balance3. Employees are not happy with the given

compensation.4. As the job assigned does not match with

their skill, employees are not satisfied with their job.

5. Employees are unable to spend quality time with their family members.

6. Employee's talents are not recognized, nurtured and enhanced.

7. Employees are not happy with the performance appraisal.

8. Employee's social life got affected.

SuggestionsBased on the above findings I would like to suggest some of the retention strategies to the IT industry, which will help the organisation to reduce the attrition rate.

Lack of autonomy and

creative freedom

Participation in

Management

Dissatisfaction with

performance

appraisal system

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1. Talent management has to be implemented to retain the efficient employees.

2. To develop a talent mind set at all levels in the organization.

3. To create a winning Employee Value Proposition.

4. To recruit great talent continuously.5. To grow leaders6. For better work life balance, employees can

adopt the strategies like Telecommuting, Alternative Work Schedules, Expanded maternity and paternity leaves, Tiered Pay Scales, Virtual Assistants, and Reduced billable hours.

7. Jobs should be assigned based on the employee skill.

8. Employees should be encouraged to spend quality time with their family members.

9. Employees' talents should be identified, nurtured and enhanced.

10. Employees should be given an opportunity to balance both personal and professional life.

This means that a talent mind set is to be developed at levels in the organization preferably at the top. An employee value proposition is to be developed for employees just like the one that is created for its customers. Most important change the way you differentiate; make it on the basis of how much you invest in your top and low performers.

Apar t from this having a strong talent management culture and work life balance also determines how organization rates their organizations as work places. In addition if employees are positive about the talent management practices of the organization, they are more likely to have confidence in the future of their organization. The resultant is a workforce that is more committed and engaged determined to outperform their competitors and ensure a leadership position in the market for their organization

ConclusionIn today's scenario, talent acquisition and management has emerged as a key strategic process in an organization. Though there is a better availability of workforce in the market than ever before, yet the challenge to acquire the right talent still persists for any organization, wor ldwide. Thus, enhanced cor pora te compet i t iveness and g loba l iza t ion has transformed the regular process of human

resource recruitment into talent acquisition.

Talent management also known as human capital management is evolving as a discipline that encompasses process right from hiring people to retaining and developing the same. So it includes recruitment, selection, learning, training and development, competency management, succession planning etc. These are all critical processes that enable an organization to compete and stand out in the market place when managed well.

The talent management is all about nurturing and guiding the talent in your organization in alignment to the strategic and long run goals of the organization. It is the succeeding step to talent acquisition.

Organizations nowadays are becoming employee centric. Employees are asked to or assigned projects that pertain to their skills and abilities and what they are best at. To put it other words, jobs are designed around people now and not vice versa. The most productive employees are allowed to choose projects and assignments that are most suitable to their area of expertise. American Express and IBM are two very good examples of organiza t ions tha t implement a ta lent marketplace strategy.

There are work-life balance concerns, issues of job flexibility all of which calls for renewing the social contract with the employees. The employees, their psyche, their beliefs and most important their attitudes are changing.For better work life balance, employees can adopt the strategies like Telecommuting, Alternative Work Schedules, Expanded maternity and paternity leaves, Tiered Pay Scales, Assistants, and Reduced billable hours.

The report found that employees who are happy with their work-life benefits work 21 percent harder and are 33 percent more likely to plan to stay at that organizationAll these are essential to achieve the strategic objectives and ensure long term success of an organization.

By adopting talent management and work life balance, employees will get job satisfaction and will retain in the same organisation. This helps in reducing attrition rate and these are the retention strategies which work out effectively to retain efficient employees.

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Latha. T*

KEY WORDS De�nedContribution Scheme;Institutional Framework;New Pension System

Introduction

Pension is a welfare benefit to establish a solid and sustainable social security arrangement and it is a measure of secure income for the elderly people .The need for pension reforms in India was due to the low coverage of the existing old age security programs, the demographic trends with the increase in life expectancy and the governments financial constraints which increased the pension liability.

The New Pension System was first proposed in 1998 by a special commission known as Old Age Security and Income Security (OASIS) project. The eight member expert committee with representatives from Ministry of Finance, Labour and Social Justice, under the Chairmanship of Dr.S.A. Dave, undertook the first comprehensive study of India's Pension Sector. The two reports (Expert Committee Report 1 (1999) & Expert Committee Report 2 (2000)) constituted by the Ministry of Social Justice and empowerment for devising a pension system for India, created awareness and initiated the debate on the need to reform the Indian Pension System. In the Annual Budget Speech in Feb 2003 by the then Union Finance Minister Mr. Jaswant Singh, announced the bold and progressive reform called the privately managed defined contribution scheme also called as New Pension System with effect

from 1-1-2004.

New Pension System is a voluntary contribution of funds for a sustained period of time (60 years) to enable the subscriber to draw pension after he attains 60 years of age. This scheme has been introduced by the Government of India and it is monitored by the institutional framework comprising of Pension Fund Regulatory and Development Authority (PFRDA), Pension Fund Managers (PFM), Central Record Keeping Agency (CRA), National Securities Depository Ltd (NSDL) etc.

There are two accounts under this system Tier I and Tier II.

Tier I Account –No withdrawal can be made till the subscriber reaches 60 years of age. Upon completion of 60 years 60% can be withdrawn and the remaining 40% of the total balance available at the end of contribution year will be annuitized. The Central Government and several State Governments have implemented this scheme.

Tier II Account - The subscriber can withdraw from his balance anytime he/she wishes to withdraw and the minimum contribution in a year is an amount of Rs. 6000 and it is most suitable for the general public.

Abstract

Pension is an important welfare measure aimed at supporting safety nets for the elderly citizens of the country. The elderly population has been growing at a faster pace than the overall population, due to the rise in the Life Expectancy, and the number of citizens over 60 years is expected to double by 2016 and by 2030, every 8th citizen will be over 60 years old and in turn increase the pension liability. The New Pension System is a well De�ned Contribution Scheme introduced initially for the Government Employees from Jan 2004 and now to the private sector and public as well.

This paper aims to examine whether the New Pension Systems institutional framework can garner superior returns on retirement on savings on the basis of returns, safety, and liquidity, and �exibility, taxability of income and cost of investment. Therefore there is a need for a study in this �eld as it is still in the initial stage of development in our country, which will also help in gaining a competitive advantage over other retirement investment options.


*Assistant Professor, Government First Grade College, Bangalore. [email protected]

A Study on the progress of New Pension System-Opportunities andChallenges to the Government and Current Crop of Investors

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Review of Literature

The concept of New Pension System and its emergenceApproach to the Regulation of Private Pension Funds in India and Application of International best practices, reviews the current situation of India from 1999 to 2001 and provides the initiative for pension reform, which must include effective governance & regulation. Most attractive policy strategy appears to be one where individuals make choices about the three fundamental facets of old age planning – contribution rates, equity exposure and guarantee structure, and how administrative charges affect pension values and the need for clear disclosure of the charges levied by different providers. The need for improvement of financial knowledge among potential participants and a clear transparency in the new system is required and examining the potential role of private pension funds, principles of supervision, and the best international practices in the area of pension schemes and further research is needed for flexibility, high degree of stability and security.

Statement of the ProblemThe literature review has identified that the Old Pension System was more beneficial to the pensioners and a liability to the government in contrast to the New Pension System. Therefore the present study proposes to identify the progress of this new system with different parameters to compare with other investment options and indicate the beneficiary issues both to the Government and to the Investors.

Significance of the Study The present study is intended to evaluate the pros and cons of New Pension System, and to analyze how it operates, to meet the set objectives of the scheme.

To evaluate the investment of Pension contributions by Pension Fund Managers during the past 5 years and to contemplate the various other options which can be given to individual subscribers to choose their preferred investment pattern.

Objectives(1) To create awareness for the New Pension

System that has an institutional framework and its working.

(2) To examine the progress under various parameters.

(3) To study the challenges and opportunities

associated with New Pension System.(4) To give suitable suggestions based on the

findings of the study.

Data CollectionPrimary data and Secondary data have been used for the study. Personal interviews with the authorit ies of the banking sector, NPS government department, who are informed about the overall operational activities.The secondary data was collected from the Government Orders, Annual reports of the institutions, Annual statements of the employees, Journals, Newspapers, Reference books, Websites etc. Challenges

• To empower the subscribers to take appropriate investment decisions based on risk return profile.

• To provide safety and optimum returns by monitoring the working of Fund Managers

• Covering the unorganized sector and making it a popular choice among more and more people in the public.

• Improving the financial literacy levels among the investors.

• The real challenge will be in seeing that t h e e n t i r e s y s t e m ( i n s t i t u t i o n a l framework) functions smoothly

• To focus on simplicity in system design and bring about a complete transparency in contributions and returns.

Statistical ToolThe statistical tool used is the comparative analysis of different investment options based on a few parameters like returns, safety, liquidity, and flexibility, taxability of income and cost of investment. .The period of the study is restricted to three previous years 2012, 2013 and 2014.

Analysis of Different ParametersReturns: The average NPS fund for central government workers has given10.35% returns and the state government scheme has delivered 10.84%.The high returns is for the estimated 14 lakh central government and 22 lakh state government employees who have nearly 53,500 crores invested in the NPS corpus managed by three pension fund managers –LIC,UTI and SBI. The returns on NPS are fairly good when compared to insurance policies, bank FDs and NSC. The investment with a very highest return at present is ELSS Funds with a return of 27.3%.


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Safety: The NPS funds are managed by the institutional framework which is under the control of the government .The investment option to Tier II a/c can be made in three types of funds of NPS.E-class consisting of Equity funds. C-class consisting of debt funds that invest in corporate bonds and G-class consisting of government securities but allocation to Equity funds cannot exceed 50 %. The NPS is meant for those who cannot manage their asset allocation themselves.

Liquidity: The investments in Tier I a/c is locked up till the investor turns 60 years .After he is 60 years, 60% can be withdrawn and the remaining 40% would be annuitized. .Before the completion if he wishes to withdraw in the case of Tier II a/c he could withdraw 20% and the balance 80% would be annuitized. The investor of Tier II a/c can withdraw their investment at any time. There is a proposal to allow 25 % of the corpus to be withdrawn for specific purposes like education, marriage and purchase of house.

Flexibility: Under Tier I a/c 15% of the NPS fund can be invested in equities and the balance in fixed income instruments .Under Tier II a/c the investor can change their asset allocation and even change the Pension Fund Managers once in a year unlike in ULIP the investor cannot change without terminating the plan.

Cost of Investment: In this institutional framework the intermediaries were selected by the bidding process. Therefore the fees and charges are comparatively less when compared to Mutual Funds and Insurance industry .It is the cheapest financial product with an expense ratio of 0.01%, and a one time expense for obtaining the PRAN card. The complex procedure in opening the NPS a/c has not attracted investors. The compulsory purchase of annuity that is at least 40% of the maturity corpus must be put into an annuity to give monthly income.

Taxability of Income: The NPS offers tax benefit, besides the deduction u/s 80C; contributions of up to Rs 1 lakh in a year made by an employer on behalf of the employee are eligible for additional deduction u/s 80CCD.The contribution under this section is 10% of Basic pay and DA.

The subscribers to NPS are at a disadvantage compared to PPF (Public Provident Fund) which is under the EEE (exempt) tax and is not taxed at any point, whereas NPS is taxed at exit or at

maturity (EET)

The new budget proposal of an additional tax deduction of Rs.50, 000 in NPS under 80CCD (1B) is an initiative taken by the Government to help in increasing the inflow of funds in the Government sponsored scheme.S No & R a n k i n g T y p e o f I n v e s t m e n t R e t u r n 1 E L S S 2 7 . 3 % 2 U L I P 8 -10%3PPF/VPH8.7%4SENIOR CITIZEN SCHEMES9.2%5NPS8-11%6BANK FDs &NSCs8.5-9%

Wealth Rating on the basis of different parameters of the study

Opportunities • The savings through NPS will provide depth and stability to the capital market.

• Enhance investments in Government and Corporate bonds

• Provide funds to the government for infrastructural development.

• Pension reforms will help the government to fund their pension liabilities

Suggestions• The government should take the initiative

to create awareness about this pension plan and attract the private investors and general public.

• NPS should be given the same tax treatment as other long term savings.

• Withdrawals from NPS are taxed on maturity whereas PPF is not taxed at all the three stages and therefore the next

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Budget should remove the end taxation.

• The investments in Equities is restricted to only 15% for central and state government employees (Tier I),whereas the limit is 50% for non-government employees(Tier II).The investment in Equities should be increased to 50% for government employees.

• Removal of the mandatory savings (10%Basic and DA) will enhance the funds for additional contributions and thereby give more flexibility to the Fund Managers to diversify the portfolios.

• Increase in the number of subscribers to NPS will minimize the risks and reduce the costs.

• More incentives must be given by the government to the banks, post offices etc. to popularize this scheme by covering the unorganized sector and the public.

ConclusionThe New Pension System will have an impact on government finances and capital market liquidity and can help in promoting inclusive growth for the vast population of India only if the government takes the initiative to promote the scheme.

Framework of Nps PFRDA – Pension fund Regulatory and Development Authority – The Regulating body of pension funds and provides guidance and supervision of the schemes.

PFM - Pension Fund Managers: - They are the various investment options into which the pension contributions of employees are invested.

CRA – Central Record Keeping Agency: It creates subscribes data – base, provides information on pension contribution generation of reports, addresses the grievances etc.

NSDL – National securities Depository Ltd – It will maintain the entire records of the NPS, including the contributions, investments, balances and annuity of each employee.

SCHIL – Stock Holding Corporation of India Limited – It is the custodian of the Investments made by the PFM's (Pension Fund Managers)

NPS Trust – The supervision of the scheme functioning and performance of all intermediaries is done by the NPS trust under the guidance of PFRDA.

PRAN – Permanent Retirement Account NumberEvery investor of the new Pension system is given a unique Permanent Retirement Account number for easy identification

References

Depar tment of Pens ions & Pens ioners Welfare Notification, 15th October, 2013.

Directorate of Economics and Statistics, Grass Roots Research and Advocacy M ove m e n t , 2002.

Government Order NO. FD (SPL) 28 PENS 2009, Bangalore 29th March 2010.

Government Order NO. FD (SPL) 28 P E N th

2009, Bangalore 19 January 2010.

Government Order NO. FD (SPL) 04 PET 2005, Bangalore 31 March, 2006.

Government Order NO.FD (SPL) 79TAR 2006, Bangalore. 16 June, 2006.

Karnataka Gazettes with reference to Pension Systems.

Karnataka Pay Commission Report 2012.

Prasad Syam. (2010). A Crisis in Making- Special Reference to Kerala.

The Hindu, Karnataka, No to new p e n s i o n schemes, 2011.

Swarup, D. Pension Reforms in India – A Social security Need, 2002.

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Achuth Anil* (MBA) AIMS

KEY WORDS Athlets;Indian Sports;Potential Investment;Revenue

Introduction

The global sports sector is estimated to be worth USD 480–620 billion comprising a range of associated businesses such as sports equipment manufactur ing and retai l , merchandise production and retail, adventure sports tourism, sports therapy and infrastructure. In India, sport is yet to be recognized as an industry and there has been no comprehensive study on the industry's estimated size in the country. In fact, sport as an industry contributes to about one to five per cent to the GDPs of various countries (average of 5.27% in the EU, 4.3% in the US and 3.4% in China). However, a lack of a sports culture in India has deterred the formation of a similar industry in the country despite growing awareness. This not only brings down the country's performance in sports but also leads to the loss of opportunity which could have led to the formation of a source of revenue and jobs. A study needs to be done on what the scenario is in the country and what can be done for the creation of the industry and its sustenance.

The journey of Indian SportsThough the current situation says otherwise India had significant victories in football and hockey earlier in the century. Making its Olympic debut

at the 1928 Amsterdam Games, Indian hockey team cruised home to its first Olympic gold, without conceding a single goal. From 1928 to 1956, the Indian hockey juggernaut won six straight Olympic gold medals, while winning 24 consecutive matches. During this time, India scored 178 goals conceding only 7 in the process. When you think about legends in the game, names like Dhyan Chand, Dhanraj Pillai, Balbir Singh comes in mind.

The national football team was quite successful until the 1970s, qualifying for Olympic tournaments and the FIFA World Cup. The team qualified for the 1950 World Cup finals in Brazil, but could not appear as they still played in their bare feet at that time. The Indian team also won the 1951 and 1962 Asian Games gold medals in football. In 1956 the team finished fourth at the Melbourne Olympics.

Current ScenarioAn interesting phenomenon is the evolution of sports leagues in the IPL skin that are making waves. Leagues like Indian Badminton League (IBL), Pro Kabbadi League, and Indian Super League (ISL) have had great crowd support and competition of talents with the ISL making the

Abstract

Thinking of short-term pro�tability is not the way for the development of sports as an Industry. India has a great potential and resources to develop as a country of sports for which a long-run perspective and a great effort need to be put into the development of sports sector from the grass root level. This effort will not only bring up the competitive spirit of India but also could be a consistent source of revenue for whoever is investing, be it the government or a private body.

This paper will brie�y present the past and current scenario of sports in India taking a team game as an example, and how investment of funds can improve the level of the athletes and generate revenue for the investors. It will also look into the potential of investment into various ancillary sectors of the sport like training and development, infrastructure development, merchandise production and retail, equipment manufacture and retail etc. To support the argument of this paper - few relevant case studies would be presented to explain how investment in sports can

Generate considerable amounts of revenue. The paper will also discuss the challenges that are faced by the private investors and what needs to be done to get over it. A set of recommendations will be offered at the end for successful implementation of investment in the sector and become an important driving force of economic growth.


How Investment of Funds can improve the Level of the Athletes andGenerate Revenues for Investors?

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biggest splash.

The facilities at Kolkata's Salt Lake City; the biggest football stadium in India and one of the biggest in Asia by spectator capacity; has got a remarkable facelift at the cost of seating capacity. From 100,000, it has been brought down to 68,000, which has been described as right sizing in the current scenario. The state stands to gain from such events; it will receive a fee of at least Rs.12 lakh per match, three times the usual fee charged for other matches. Sunanda Dhar, CEO of the I-League; India's primary football league run by the All India Football Federation (AIFF) says ” 'Copy-pasting the IPL model' is probably the best way to create new excitement in football.” There is great expectation on the ISL to bring in much-needed money into the sport.

Potential of investment

1) Revenue from training and developmentCase study: AFC Ajax's Youth Academy in Netherlands is acknowledged as one of the most advanced football youth academies in Europe, consisting of 13 teams and 200 youth players between the age of 7 and 19 years. The academy has made special agreements with over 80 private and municipality schools in the greater Amsterdam area from where students are gathered by academy workers every day and sent to the youth center. In addition, the Ajax youth center suppor ts their s tudies by giving complementary lessons and homework, emphasizing on the importance of education, along with daily sport training. Numerous players who attended the youth academy of AFC Ajax went on to play in their respective national teams and became famous; graduates of the academy include Johan Cryuff, Frank Rijkaard, Dennis Bergkamp and Wesley Sneijder. The academy's training center (De Toekomst in Dutch or The Future in English) was established in 1996 and includes nine football fields spread over 14 hectares. It is jointly owned by Stadion Amsterdam N.V, a private holding company, and the Government of Amsterdam. Most of the star players who graduated from the academy went on to help Ajax win many championships and when their stock values peaked, the club sold them off for high profits, for example Cryuff was sold to Barcelona for 2 million dollars in 1973, Bergkamp was sold to Inter Milan for 7 million pounds in 1993, Van der Vaart was sold to Hamburger SV in 2005 for 5.5 million euros, Wesley Sneijder was

sold to Real Madrid for 27 million euros in 2007 and one of the latest being Daley Blind who was sold to Manchester United in 2014 for 13.8 million pounds.

2) Revenue from infrastructure developmentCase Study: The Verizon Centre is a multi-purpose sports and entertainment venue with a seating capacity of approximately 20000 seats and is home to the NBA's Washington Wizards, the NHL's Washington Capitals, the WNBA's Washington Myst ics, and the NCAA's Georgetown Hoyas men's basketball team. The Verizon Centre is the result of a USD 260 million redevelopment plan, that was launched 17 years ago by sports entrepreneur Abe Pollin, who envisioned a new sports arena in downtown Washington as opposed to the older U.S. Airways Arena that he operated, which was too difficult to get to—since it was situated in the suburbs of Washington DC, and also out of date. The arena is supplemented by a variety of concession stands and restaurants. The arena also houses various sports bars and grills, clubs, the Volkswagen Theatre, a fitness center and a salon. Since its inception, the arena has hosted high profile sporting events like the 1998 Stanley Cup Final, the NBA (2001) All-Star games and the 2003 World Figure Skating Championship, besides being the venue for numerous family shows and concerts. The stadium has served host to more than 36.5 million people who have attended the various events organized at the venue. The Verizon Centre is considered a commercial success. Other benefits: The Verizon Centre has revitalized the surrounding neighborhoods in downtown Washington DC, with the opening of numerous restaurants, bars and other businesses.

3) Revenue from telecasting


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The table here shows how much clubs in this particular league in England gains from TV revenue.

4) Revenue from associate industriesAssociate industries like sports equipment manufactur ing and retai l , merchandise production and retail, adventure sports tourism, sports therapy can blossom under the popularity that grows and this in turn can generate a great amount of jobs and subsequently revenue for people investing in it.

Challenges for investors

• Government: The government has had a lack of commercial focus on sports other than cricket. Proper monetization and commercialization of the existing leagues would have helped the cause. Insufficient planning and organizing of sporting events have led to more problems like shortcomings in asset monetization, de-motivating private investment etc.

• Transparency in league governance: T h e r e h a v e b e e n i n s t a n c e s o f controversies around conflict of interests. For instance, being a franchise and a l eague owner a t the same t ime; controversial auctioning of players and spot-fixing. Such incidents have raised questions on professional governance and transparency in leagues. They also tend to result in loss of faith among league sponsors.

• Industry status for sports: The absence of a sports industry in India often restricts opportunities in sports management/ marketing/consulting. This can restrict the poss ib i l i ty of re ta ining e l i te sportspersons in the sports ecosystem after they retire.

• Low engagement of clubs with the community: This could result in limited viewership and failure to generate interest in the game.

• High Investment: The general thought process for investors is in short-term gains and since sports is an industry with returns in the long term; the time factor becomes a deterrent for investors.

• Society: The society in the country does not give sports other than cricket as a profession much respect and this general behavior de-motivates people from going into sports to earn a living as it garners no respect.

Recommendations

1) Private sector entry: Entry of private sector could boost professionalism and the quality of infrastructural facilities, which could have a positive impact on Indian sports performances and become a motivating factor for greater monetizing strategies.

2) Introduction of League system: With the introduction of leagues in India, revenue generation can occur through ticket sales, telecast rights, various sponsorships and some clubs owning academies could generate revenue from the transfer of players to other clubs in team games.

3) Development of grass root level: Things need to happen at the lowest level and then flow up, meaning there needs to be major changes at the school and college level to promote the sport, to attract more and more youngsters to play the game. A league system with support from existing commercial leagues needs to be developed which acts as a medium for national team selection and for increasing the fan following. . Thus, excitement is generated which would help improve the standard of the game so that there are better players being groomed for the future selection for the national team. This excitement around the sport then can be utilized to promote the commercial league system and help in raising revenues through the right marketing efforts and advertising.

ConclusionA detailed analysis of various sectors of the sports ecosystem shows the involvement of private entities, besides Government bodies and sports authorities, although in a limited scope and mostly in the form of CSR activities. The business of sports in India is yet to pick up steam and this could largely be driven by the birth of more consistent leagues on the lines of the IPL in cr icket . Case s tudies on domest ic and international events indicate the relatively long gestation periods of commercial returns on investment in sports, but they also indicate the


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High revenue generating potential of sports leagues. Nonetheless, it has been observed that investment in sport provides private organizations with significant social return on investment in terms of enhanced brand recognition and brand building by reaching out to a large segment of the population. This is due to the high appeal and loyalty sports enjoy with the youth and the fact that they create brand loyalty by engaging local community members. Corporate houses already involved in sports should now consider for profit ventures in sports such as owning franchises and providing sponsorships to various leagues and tournaments and take the country forward to a brighter sporting future.

Websites

www.kpmg.comwww.sportskeeda.comwww.espnfc.comwww.telegraph.co.uk


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Prabhas Pandith T.S*

KEY WORDS Indian character;Indian villages;Purity of villages;Romanticizing India;Shikar narratives

Introduction

Though not as popular a writer as Jim Corbett, Kenneth Anderson (1910-74) has had a powerful impact on the tradition of shikar writing in India. His influence is felt particularly in the southern states where the hunter-writer is said to have been quite active. Anderson's writings have not attracted enough academic interest for it has been alleged that much of his narratives are fanciful tales than recollections of real-life adventures. (Sayeed)

Nevertheless, for this paper which considers Anderson's writings as works of literature and focuses chiefly on the representation of South Indian villages and its people, the question whether his works are pure fiction or not loses some of its significance. Another point, which probably is a little more significant for us, is that Anderson though is a British national with Scotland being his place of origin, considered himself an Indian. Traditionally too he has been treated as anIndian writer with Mahesh Rangarajan choosing to include him in his “Five Nature Writers” in An Illustrated History of Indian Literature in English. Yet, Anderson's tales were written primarily for the western readers as one can gather from the descriptions in some detail of common things Indian, which would be

termed completely unnecessary if an Indian were to read them. Therefore the accusation against Anderson that he portrays rather a romanticized picture of Indian villages has some merit in it. In any case, the fondness with which Anderson portrays Indian jungles, villages and its people, is proof enough to maintain that his accounts do not invent the Indian village but merely builds upon an experience that was indeed 'real'.

For Anderson India is a country of diversity. The uniqueness of Indian jungles is to be found in their variety. He writes,

. . . Where anywhere else in the world . . . would I find the conditions of India? A journey by train or road of a few hours separated my home in Bangalore from the cold climate to be found on any of the several mountain ranges that lay within two hundred miles, or from the swelteringly hot weather of the plains that lay even closer; from the dense forests to the west, . . . and the extremely arid, semi-desert areas of the east; from the teeming millions of one of the cities and the utter solitude of a jungle within fifty miles from home; from the varied languages and the dialects of the towns and the almost incoherent vocabularies of the forest tribes; (91-2)

Abstract

The paper tries to analyze the picture of village communities on the fringes of South Indian jungles as represented in the shikar narratives of Kenneth Anderson. The paper argues that Anderson's representation of the village communities fails to capture the niceties that set each of these communities apart. The paper maintains that for Anderson, all South Indian villages, in their essence, are alike. The obvious differences between them are ignored as super�cial. It is argued that Anderson's depiction of South Indian villagers is rather stereotypical as he proceeds to romanticize them as simple and pure. The paper claims that Anderson apparently considers the villages pristine and perfect, in spite of him taking note of several shortcomings within the organization of the villages. Such shortcomings are conveniently ignored which is problematic. Moreover, the paper maintains, Anderson's account of the villagershinges upon the binary of city verses village. It is noted that, for Anderson, the perceived purity of the villagers is due to their fortunate aloofness from civilization.The paper ends with the suggestion that Anderson probably fails to understand what he sees before him.


*Asst. Professor, Department of Languages, AIMS, [email protected]

Jungle Villagers in the Writings of Kenneth Anderson

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Yet it is not the variety alone that is unique to India. Indians, Anderson suggests, are people of unique disposition. They seem to possess almost a surreal disinterestedness that keeps them involved and yet detached from things that are held to be precious elsewhere:

[w]here in the world time be of so little, if any consequence, as in India? Where in the world would consequences themselves be of so little importance? It matters not how you dress, or whether you dress at all! The bare requirements of existence are all that do matter. . . . There is a time to be born and a time to die and each event is as inevitable as the other. Moreover, death follows life and life follows death, so it really does not matter where you start and where you end, as it all works out the same thing. (92)

The “distinctive character” of India that Anderson has captured thus, makes repeated appearances in his tales. Yet, never once has this “quintessential” Indian character been associated with the urban, 'civilised' spaces of the country. In other words, Anderson's concept of India is embedded essentially, or at least best manifested, in its jungles, villages and tribal communities.

Anderson, being a shikar, quite naturally finds the jungle as the most engaging space. It is the only space which, apart from being occupied with the very many activities and events, is capable of revealing dimensions of one's own personality that had never been even suspected of existing. Jungle, for Anderson, is a place to find solace. It is his true home. In the introduction written to one of his works, speaking about himself in third person, Anderson remarks that he “appears to be the jungle himself ” as we get the impression that he “belongs there.” The jungle is “home for him and here is the place he would want to die; the jungle is his birthplace, his haven and his resting place when the end comes.” (4)

This 'wish' of the writer to breathe his last in jungle probably emanates from the knowledge that, in forest death can occur rather casually. Indian jungle even as it is a place of immense beauty, vitality and variety, is after all a dangerous place-a fact Anderson never tires of repeating. Even the passages that i l lus t rate the unmatched exquisiteness and blissful magnificence of Indian forests fail not in reminding the reader that in forest danger lurks behind every other bush or tree. “On a tree directly above the grazing deer is a small family of langurs” begins a passage and continues to describe the play of langurs and a

fawn, “[t]wo of these jump to earth and playfully chase a spotted fawn. Then one leaps back to a low branch where, hanging by its legs, it grabs the fawn by the tail and half lifts it off the ground.” The passage ends in a picture of devastation as “an elongated form, golden and spotted in the rays of the early morning sun, springs from under the bush and in two bounds reaches the little fawn. In the next second it is dead, while the panther glowers and growls over the small quivering body.” (16)

Going by Anderson's own accounts, jungle though is home par excellence, is notfor the uninitiated. Thus, the only available space to experience what he considered the quintessential India, without being exposed to the casual dangers and destruction, is the human habitats established at the fringes of or a convenient clearance within the forest- hamlets, villages and tribal settlements.

According to Anderson, South Indian villages, in their essence, are all alike. Of course, this is not to say that Anderson is oblivious to the obvious diversity in village communities. Not only does Anderson notice the extremely minute differences that distinguish one landscape from the other, he makes a keen observation of the vagaries in human temperaments too. “I have found” he says, “that even the ordinary villager of Andhra Pradesh is, on the whole, much more friendly, than his counterpart in Mysore state where I live, while the folk inMadras state reveal a disposition between the two.” (88) Similarly one finds several passages in his writings that are informed by an ethnologist's inquisitiveness. They capture even those aspects of people's lives that are apparently insignificant giving us the ethos of that particular culture.

Despite these variances Anderson sees certain qualities as common to all villages in South India, especially to the jungle hamlets. The people of these settlements though not without their own peculiar idiosyncrasies, are one nonetheless. He considers them to be simple, innocent, sociable, generally honest, polite, ignorant, gullible and sometimes witty. “India is a country” writes Anderson, “that demands of its inhabitants a sharpness of wit.” (164) Their simple lives are ruled by a logic that is plain to the extent of being primitive. In the tale titled“The Bellundur Ogre”, Anderson narrates the story where the villagers manage to capture acattle-lifting tiger in a pit. And the following morning,all the inhabitants of Bellandur village turned out, . . . to gloat over their

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Erstwhile enemy and throw firebrands at it, before putting it to death by the simple but rather slow process of spearing it from above. Evidently nobody had a gun, and the question of cruelty, of course, did not occur to anybody. For was not this animal the tiger which had killed and devoured so many of their cattle? (20-1)

And yet as he remarks elsewhere, “[t]he Indian villager is a man of unbounded patience, an attribute easier to understand if one observes his complete apathy, his capacity for resignation and for accepting whatever misfortune it may be the will of God to bestow upon him.” (19)This quality, for Anderson, is authentically Indian and is best exemplified in an average Indian villager. They are “usually hospitable” pressing their guest “at the last moment to extend [his] stay.” (152)

Anderson makes a clear distinction between the townsmen and the 'simple' village folk who are unburdened by the 'higher' dogmas that haunt the former. Even a cursory look at the characters from the 'civilized' India that people his tales reveal that they form a body of people that is exactly opposite of what a villager is. Almost all the city dwellers that Anderson pictures are generally loathsome: vain, boastful, greedy, ignorant, officious and complexly contemptuous. The Range Officer of Diguvametta (93) and the District Forest Officer of Salem District (159-60) are some such examples. Referring to the village called Jungalpalayam in Tamil Nadu, as the 'happy village', Anderson holds that “the folks living in this hamlet, although far from civilization, medical help, schools, places of amusement and so-called cooperative centres . . . were always contended and laughing. . . . They seemed singularly free form the political consciousness that is such a dominating factor in India.”(167)

In fact, Anderson seems to suggest that the happiness of these jungle hamlets is because of, not in spite of, their aloofness from modern 'civilization'. For Anderson, the advent of civilization in India destroys, like its pristine jungles, the 'simplicity' of an Indian village life. Byra, a 'friend' of Anderson belonging to the poojaree community, is one of those figures in Anderson's writings that represent a typical villager. Anderson calls him simple and, more interestingly, “pure”. Anderson, for whom the most authentic of Indian qualities is the disinterestedness, the political consciousness of the 'mainstream' India seems misplaced, if not unnatural. It is the villagers' disinterestedness and its resultant purity that makes them such lovable people.

The intimacy that Anderson seems to have

established with the village folks is nevertheless not blind. He is keenly aware of the several 'evils' that haunt these cultures too. A level of oppression that is invariably seen in the village communities, their superstition, ignorance, lack of legitimate ambition, patriarchy, over and unscientific reliance on myths, are all recognized, spoken of, and even mocked at. But never are they considered to be so great as to require reformation.

The well-meaning sympathy of Anderson for the village folks is 'broad' enough to cast a negligent eye on the 'evils' of their organizations.The common frailties of these people are always tolerable and forgivable. Anderson fails to acknowledge the necessity to eradicate certain aspects o f these communit ies that are unquestionably disempowering. Perhaps, Anderson feels that the attempts at reformation of these communities would ultimately lead to the d e s t r u c t i o n o f t h e i r s i m p l i c i t y a n d 'purity'.Anderson is not interested in rooting this simplicity/'purity' in spiritualty. Even as Anderson emphasises the disinterestedness of an Indian villager, he is reluctant to relate it to thespiritual and philosophical idealism of Hinduism. For him, the 'purity' and simplicity of anIndian villager is not a spiritual endowment but a natural state of mind. The 'purity' or the simplicity of the villagers is natural, in its literal sense, originating from their proximity to nature.

One could argue that such an affectionate and endearing portrayal of Indian villagers was in the best interest of the writer. After all, is not Anderson a saviour of these multitudes? Such arguments, tilting towards cynicism, could well be made. However, a sympathetic reading of Anderson reveals that for him, the 'natural goodness' in the Indian villager is because of his/her proximity to nature-the jungle.

References

Anderson, Kenneth. (2012). The Kenneth Anderson Omnibus. Vol. I, New Delhi: Rupa.

Rangarajan, &Mahesh. (2008). Five Nature Writers: Jim Corbett, Kenneth Anderson, Salim Ali., Kailash Sankhala, M., &Krishnan. An Illustrated History of Indian Literature in English. Ed. Arvind Krishna Mehrotra. New Delhi: Permanent Black, 351-65.

Sayeed.,&Vikhar Ahmed. Hunter's Tales. Frontline. 27.6.

Http://www.hindu.com/fline/fl2706/stories/20100326270609400.htm> accessed on 8 March 2014.

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Description

The book aptly covers the statistical methods used in research especially for marketing and applied research. The book is recommended for postgraduate students in commerce and management. Starting with concepts of Statistics the book covers in two chapters the fundamental research areas in marketing research using surveys. It also has a chapter on the rudiments of using the concepts in international marketing and advertising. The research methodology coverage is widespread over nine chapters with inputs on sampling methods, research design, scaling measures, and hypothesis testing showing how a number of parametric and non-parametric statistic are used. From preliminaries in bivariate and multivariate analysis the author goes on to show in the remaining chapters the usage of complex methods of analysis like discriminant, factor, cluster and conjoint.

Overall the author has splendidly covered in eighteen chapters the entire gamut of research techniques and tools used for solving research problems in any field with special emphasis on marketing. Even Doctoral students especially those from non-mathematical or statistical background will benefit from the contents in the book.

The format of the book and the fonts used are good and easy to read. While the tables are printed well the quality of computer screen prints used both in applications and examples are unreadable and hence need drastic improvement. The proofing also has not been fool-proof! There are some glaring errors including in examples appearing in a few places which could be corrected in the next edition. The coverage on software packages used for data tabulation and analysis is inadequate. Applications like SPSS etc

could have been shown in separate chapters. While the usage of quantitative tools are shown comprehensively, the qualitative description and applications which have become important especially in consumer, social and digital marketing areas of research have not been covered.

The addition of appendices however is a wonderful support and covers matrix algebra, estimation of parameters and useful statistical tables.

The book is recommended as a reference for students pursuing Masters and Doctorate studies as well as research guide faculties.


New Age International Publishers, New Delhi � 110 002, First Edition, 2015, Pages: 553.Author's Name: B L AgarwalReviewer: Ramesh Raj Ayer, Associate Professor, School of Business, AIMS.

Book Review

RESEARCH METHODOLOGY(Focussed on Marketing and Applied Research)

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