Determinants of Capital Structure A Case Study of Automobile Sector of Pakistan

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February 2011
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Contents
Title
Page
Satisfaction Determinants in Business Internships
11
Dr, Kenneth R. Lord, Delia Sumrall, Dr, Rajan Sambandam
Measuring Efficiency of Public Sector Organizations:

A Case Study of Public Sector In-Service Training
Institutes in Pakistan
23
Ajmal Waheed , Norma Mansor, Noor Azina Ismail
Analyzing the Effect of Value Chain Outsourcing on Productivity

Based on the Customer and Learning Perspective of BSC Model
45
Nour Mohammad Yaghoubi, Mohammamd Moradi, Seyyed Ali Banihashemi
Career Self-Efficacy and Glass Ceiling: Moderating Effect

of Work-Related Masculinity Values
57
Dr. Tamer Bolat,Dr. Oya Inci Bolat, Ta k n K l
Can Intelligence improve Organizational Effectiveness?
69
Gholam Reza Rahimi, Mohammad Reza Noruzi
A study on some case studies recounting the rise and fall of

mining cities and towns in Mexico
75
Jos G. Vargas-Hernndez, Mohammad Reza Noruzi
Trends in Total Factor Productivity in Pakistan Manufacturing Sector
81
Khalil Ahmad, Muhammad Ilyas
A Qualitative Survey on Potential new Technology growth markets
90
M. Khalid Siddiq, Rashid Nadeem, Badar Sultan Minhas
Measuring the Attitude towards Science in Pakistan

A study of Secondary School Students
98
Rana Zamin Abbas, Muhammad Ashraf, Maqsood Ahmad

Dr. Usman Khalil , Dr.Zulfqar Ahmad
A Study of Strategic Orientations, Pakistani Brands and Implications
118
Rana Zamin Abbas, Dr. Zulfqar Ahmad, Abdul Rafay
Evaluation of the Facilities in the Teaching

of Science at Secondary School Level in district Mardan
128
Bibi Asia Naz, Rahmat ullah Shah, Javed Iqbal & Umar Ali Khan
Employee Engagement Practices in Indian

BPO Industries- An Empirical Investigation
134
B.Thiagarajan, V.Renugadevi
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FEBRUARY 2011
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Title
Page
The Extent of Awareness of Managers of Jordanian

Industrial Companies regarding the Importance of the
Commodity Packaging Quality from the Viewpoint of the Consumer
142
Dr. Fathi Abdullah Al-Share, Dr. Basim Anagreh
Consumer Attitude towards Information Privacy in

Banking Sector of Pakistan
159
Amna Sabir, Sohail Kamran
The Impact of Financing Sources on the Capital

Expenditure of Anambra State Government, NIGERIA. (1992 2008)
171
C.K.Okonkwo, Dr. L.E. Akujuobi
A Critical Analysis of the effects of Economic Variations on

real property management: A case study of Onitsha property market
181
Onwumere, Victor Onyema, Dr. Chinedu Chidinma Nwachukwu
A Study to Investigate Emotional Intelligence of Male and

Female Students at University Level in Pakistani Context
209
Sadaf Tariq, Muhammad Iqbal Majoka, Shafqat Hussain
Determinants of Capital Structure:

A Case Study of Automobile Sector of Pakistan
219
Talat Afza, Amer Hussain
A Study on Financial Performance of Wheels

India Limited-Chennai
231
S.Christina Sheela
Emotional Intelligence Determining Work Attitudes

and Outcomes of University Teachers: Evidence from Pakistan
240
Laila Mustafa , Dr. Shehla Amjad
What Cause No to School but Child Labor:

A Case of Rural Pakistan
260
Rana Ejaz Ali Khan, Hafeez ur Rehman
Survey relationship between Organizational Justice

and Organizational Citizenship Behavior (OCB) of food
product Firms in Kurdestan Province
272
Freyedon Ahmadi, Seyed Ali Akbar Ahmadi, Naser Tavreh
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Title
Page
Analyzing the factors affecting the demand for insurance

in Saudi Arabia
282
Dr. Zaid Ahmad Ansari
Enterprise Resource Planning - Real blessing or a Blessing

294
in Disguise : An Exploration of the Contextual Factors in Public Sector
Shafqat Ali Shad, Enhong Chen, Faisal Malik Faisal Azeem
Demand for Formal and Informal Credit in Agriculture:

A Case Study of Cotton Growers in Bahawalpur
308
Rana Ejaz Ali Khan, Tanveer Hussain
The Impact of Intellectual Capital on performance

of Iranian food firms
315
Amir Hosain Amir Khani, Freyedon Ahmadi, Golamhusain Homayouni
Identify factor that impact on develop of knowledge Management

in Automobile Industry
327
Freyedon Ahmadi , Jalale shirzade
Causes of disrespectful behavior at workplace:

A study on doctors of public sector hospitals in Pakistan
341
Usman Yousaf , Asad Ejaz, Bushra Usman, Saima Sardar
Personality influences Customer Switching
363
Dr Kamran Siddiqui
Relationship between Role Ambiguity and Burnout: The

Mediating Effect of Organizational Culture
373
Dr. Tamer Bolat, Dr. Oya Inci Bolat, Murad Yuksel
A Descriptive Study Regarding the role and assessment

of the Educational Technology at Secondary School
Level Khyber Pukhtoon Khwa Pakistan
399
Dr Sajjad Hayat Akhtar, Dr Muhammad Naseer Ud Din, Dr Syed Wajid Ali Shah
An Exploratory Study Regarding the Role of

Demographic Variables and Social Status of Female
Education in Pakistan
405
Miss Imrana Rani , Dr Muhammad Naseer Ud Din, Dr Abdul Rehman Khaleeq

Mr. Munir Khan
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FEBRUARY 2011
VOL 2, N O 10
Title
Page
Comparative Study of Quality of Education

in Public and Private Secondary Schools in NWFP
416
Dr Muhammad Naseer Ud Din, Dr. Ali Murtaza, Mr. Faridullah Khan
Effectiveness of the Use of Motivational Techniques

on the Educational Achievement of the Teacher s at
Higher Education Institutions in Pakistan s
430
Dr Muhammad Naseer Ud Din, Dr Sajjad Hayat Akhtar

Dr. Ali Murtaza, Dr Abdul Rehman Khaleeq
Effects of Audio Visual Aids in Students Learning at Secondary

Levels in District Rawalpindi
439
Dr. Ali Murtaza, Dr Muhammad Naseer Ud Din

Mr. Faridullah Khan
Impediments in Enhancing the quality of Education

in Public Sector Higher Educational Organizations
453
Mr. Faridullah Khan, Dr. Muhammad Zafar Iqbal
Perception of Women Regarding the Social Awareness

and role of Higher Education in Pakistan
466
Dr Muhammad Naseer Ud Din, Mr. Faridullah Khan, Mr. Munir Khan

Dr Abdul Rehman Khaleeq, Miss Imrana Rani
A Quick Look on Islamic Entrepreneurship
478
Mohammad Reza Noruzi
A Study on using Knowledge and Wisdom in Organization
485
Mohammad Reza Noruzi
Content Analysis of Islamic Studies Textbooks on

Religious Tolerance in Pakistan
491
Dr. Safdar Rehman Ghazi, Dr. Riasat Ali, Dr. Muhammad Saeed Khan
Muhammad Ramzan Shahzada, Ismail Khan
Do Selected Demographic Variables of Secondary

School Teachers Contribute to their Job Performance:
A Survey Approach?
498
Zafar Khan, Umar Ali Khan, Rahmat Ullah Shah, Javed Iqbal, Rukhsana Aziz
A Comparative Study of the Attitudes of Different

Communities towards Reproductive Health
Education of Peshawar and Dera Ismail Khan
507
Rukhsana Aziz, Rahmatullah Shah, Muhammad Shah
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FEBRUARY 2011
VOL 2, N O 10
Title
Page
Assessing the characteristics of Work-related Stress

in Public Sector Organizations
511
Ashfaq Ahmad, Muhammad Zia-ur-Rehman, Prof. Majed Rashid
Relationship between Leadership Styles and Organizational

Commitment amongst Medical Representatives of National and
Multinational Pharmaceuticals Companies, Pakistan
(An Empirical Study)
524
Nazim Ali, Muhammad Atiq Ali Babar, Sudhair Abbas Bangash
Factors Determining Migrant Remittances in Pakistan
530
Khuram Shafi , Muhammad Imran, Dr. Saqib Gulzar

Faisal Siddiqui
Mirror up to leadership and Strategic Human Resource

Management: An Exploratory Account
541
Rana Zamin Abbas, Muhammad Ashraf

Hassan Mobeen Alam , Abdul Rafay
10
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FEBRUARY 2011
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Satisfaction Determinants in Business Internships

Dr, Kenneth R. Lord
Ph.D, Associate Dean and Professor, Department of Management/Marketing
Kania School of Management, The University of Scranton,Scranton, PA ,USA
Delia Sumrall
DBA, Chair and Associate Professor, Department of Management/Marketing
Kania School of Management, The University of Scranton, Scranton, PA, USA
Dr, Rajan Sambandam
Ph.D, Chief Research Officer, TRC, Fort Washington, PA, USA
Abstract
This research adapts the methods and findings of satisfaction research to examine the
determinants of satisfaction with a critical experiential component of business education the
internship program from the perspective of both the students serving as interns and the
businesses that mentor and are served by them. Structural-equation modeling applied to
routinely collected internship assessment data at a large northeastern university reveal that
student maturity, initiative and responsibility affect performance, which in turn drives the
firm s satisfaction with the program. Opportunities for students to apply academic skill,
accomplish goals and express opinions, and to a lesser extent co-worker relationships,
influence interns satisfaction with the firm, which is the major contributor to their satisfaction
with the internship experience. Implications for internship-program management and success
and for future research are considered.
Keywords: Internships, Satisfaction.
1. Satisfaction Determinants in Business Internships
Decades of research leave little doubt that satisfaction both among buyers in the marketplace
and among employees in the workplace is a construct that has profound implications across
multiple outcome variables. Consumer research has shown that satisfaction is associated with
consideration-set size (Sambandam and Lord, 1995), loyalty (Fornell, Johnson, Anderson,
Cha, and Bryant, 1996; Olsen, 2002; Sambandam and Lord, 1995), positive word of mouth
(Anderson & Sullivan, 1993; Wangenheim and Boyn, 2007), and willingness to pay more
(Fornell et al., 1996; Homburg, Koschate, and Hoyer, 2005). Similarly, in the job-satisfaction
literature, employee satisfaction has been found to be related to employee loyalty and
organizational performance (Voon, Hamili, and Tangkau, 2009). While there is a large body
of literature dealing with customer satisfaction (sufficient to induce a substantial review more
than two decades ago see Yi 1989), little attention has focused on areas beyond mainstream
consumer products or services.
This research adapts the methods and findings of satisfaction research to examine the
determinants of satisfaction with a critical experiential component of business education the
internship program from the perspective of both the students serving as interns and the
businesses that mentor and are served by them. Internship programs are used by business
schools worldwide to provide students with hands-on experience in professional management
capacities. More than most elements of the curricula, internship programs bring the students
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into direct contact with the corporate world. There is a higher level of input provided by both
parties (the intern and the firm) as compared to traditional product or service marketing, where
the roles of buyer and seller are clearly demarcated. The intern needs to measure up to the
standards of the firm in order to facilitate continued future interaction between the school and
the firm. Similarly the firm needs to exemplify standards of excellence desired by the school
in order to continue a beneficial alliance. Therefore, there is a need for both parties to satisfy
each other. This makes the study of satisfaction with internship programs unique as compared
to other aspects of business education or services marketing in general.
2. Conceptual Model
Conceptually, satisfaction with internship programs appears to be related to job satisfaction. In
the latter case the employee's satisfaction with his/her job and factors influencing it are
studied. The intern can be considered to be a temporary employee. However, a crucial
difference is that a dissatisfied employee would at worst quit his/her job while a dissatisfied
intern might complain to the university, thus jeopardizing the firm's relationship with the
university. The firm, therefore, needs to take adequate care not to dissatisfy its interns. The job
satisfaction literature also does not typically deal with how satisfied the firm is with the
employee. Although there are a few other differences, because of the conceptual similarity, the
literature in the job satisfaction area provides a theoretical basis for developing a model of
satisfaction with internship programs.
Development of a model of satisfaction with internship programs requires an
organizing framework that includes the relevant influences. In a meta-analysis of the job
satisfaction literature conducted by Brown and Peterson (1993), four categories of variables
emerged as salient antecedents of job satisfaction: (1) Work Outcomes (performance,
commitment, etc.), (2) Individual Differences (motivation, self-esteem, etc.), (3) Role
Perceptions (role ambiguity, role clarity, etc.), (4) Organizational Variables (supervisory
behaviors and job/task characteristics). Given the similarity between job satisfaction and
internship satisfaction and the lack of prior research in the latter area, the above specified
categories could provide a useful starting point in developing a model.
In converting the conceptual model into testable form, the differences between
employment and internship scenarios and the unique features of internship satisfaction need to
be taken into account. A "terminal value" is something that is an end in itself (Cherrington,
1980). Since internship satisfaction is modeled from two perspectives (the intern's and the
firm's), the conceptual model has two terminal-value variables: the intern's satisfaction with
the internship program and the firm's satisfaction with the program. The two work-outcome
variables included are the intern's performance and satisfaction with the firm. The effects of
the three groups of antecedent variables on the terminal-value variables are expected to be
moderated by these work-outcome variables. The data used for this study, which were
collected independently as part of an internship office's evaluation/control effort, provide
information about these two types of satisfaction and useful (but not comprehensive) surrogate
measures for individual differences, role perceptions and organizational characteristics. In
recognition of that limitation, the model and any claims derived from its testing will be limited
to the aspects of the constructs captured by the data. Thus the general constructs of individual
differences, role perceptions and organizational characteristics will be limited in their
consideration to the narrow variables of personal qualities, work opportunities and coworker
relationships, respectively. Personal qualities are expected to influence performance, while
coworker relationships are anticipated to influence satisfaction with the company. Work
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opportunities are expected to influence both work-outcome variables. The model depicting
these relationships is shown in Figure 1.
[Insert Figure 1 about here]
3. Hypotheses
The hypotheses tested in this study are seen in the model paths. We will offer a brief
rationale for each.
The firm's satisfaction with the program is hypothesized to be influenced by the
performance of the intern during the course of the internship. The better the performance of
the intern, more likely it is that the firm would be satisfied. While such a relationship is
probably obvious and hardly needs testing, its inclusion is important in any model that hopes
to capture a reasonable portion of the variance in firm satisfaction. Therefore, the hypothesis
is formally stated as:
H1: The intern's performance during the internship will have a positive effect on the firm's
satisfaction with the internship.
The second terminal-value variable included is the intern's satisfaction with the
internship. It is quite possible that the two terminal-value variables could be positively
correlated, but no causal relationship is expected between them (which is, of course, why they
are treated as terminal-value variables). The intern's satisfaction with the program is modeled
as a function of two work-outcome variables: intern's satisfaction with the firm and the intern's
performance during the internship. Together, these two work-outcome variables reflect two
different aspects of the intern's satisfaction with the program. Satisfaction with the firm is a
general aspect that accounts for how well liked the firm, its operations and culture are.
Performance is a specific aspect that relates to the intern's role within the firm and his/her job
description.
Brown and Peterson (1993), while finding a positive correlation between work
outcomes and employee satisfaction, believed that there may not necessarily be a causal
relationship between those constructs. That view was consistent with what Whitman, Rooy,
and Viswesvaran (2010, p. 41) recently characterized as decades of near consensus that the
magnitude of correlation between job satisfaction and job performance was small. Even at
the time of the publication of Brown and Peterson s (1993) work, that consensus was
beginning to crack. Ostroff (1992) reported a positive relationship between employee
performance and job satisfaction. A decade later, and Schneider Hanges, Mith, and Salvaggio
(2003) demonstrated at a collective level that positive performance elevates unit satisfaction.
In a recently published meta-analysis, Whitman et al. (2010) again found a meaningful
relation between performance and satisfaction.
Satisfaction with the firm in general is expected to increase the satisfaction with the
internship program. However, as is evident from intern comments on the experience, this is
clearly not a sufficient condition. Interns could be quite satisfied with the firm but be
dissatisfied with their specific assigned tasks, thus lowering performance and satisfaction with
the internship. (Job description dissatisfaction is a role perception characteristic which while
not explicitly captured by the empirical model, is expected to be a contributor to observed
performance). The opposite scenario is also possible, where the intern likes his/her role and
performs very well, but is dissatisfied with the company in general. Therefore, in order to
capture the intern's satisfaction more completely, it is modeled as a function of both workoutcome variables. This reasoning leads to the following hypotheses:
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H2: The intern's satisfaction with the firm will have a positive effect on the intern's
satisfaction with the internship program.
H3: The intern's performance will have a positive influence on his/her satisfaction with the
internship.
The next stage in the model includes the antecedent variables that influence the workoutcome variables. Satisfaction with the firm, as mentioned before, is a general construct
which is influenced by organizational characteristics. Brown and Peterson (1993) identified
supervisory behaviors as one subgroup of variables that falls under the rubric of organizational
characteristics. Supervisory behaviors consist of such behaviors as consideration,
communication, and approval. However, as compared to job satisfaction, relationships with
one's colleagues during an internship are likely to be very important. Whitman et al. (2010, p.
68) argue that social interaction forms the building blocks (or structure) of job satisfaction
and serves to create a basis for the emergence of a shared interpretation and evaluation of the
job. Other recent studies have pointed to communication among coworkers as critical
antecedents of job satisfaction (Jong, Ruyter, and Lemmink, 2004; Voon, Hamali, and
Tangkau, 2009). An internship and the initial period of an actual job have much in common
in this regard. In both cases the person is new and needs the help of colleagues to "get
around". Relationships with coworkers are particularly important for interns because
coworkers have little to gain from the intern once the semester passes. There is no need for
them to go out of their way to help the intern, given that there is little possibility of a payoff.
The intern, on the other hand, needs the coworkers' help to adjust to the new environment and
perform his/her job effectively. Therefore we model the organizational characteristic of
coworker relationships as an antecedent influence on satisfaction with the firm.
H4: Coworker Relationships will have a positive influence on the intern's satisfaction with the
firm.
Research among consumers has demonstrated that empowerment affects satisfaction
positively, both directly and by enhancing involvement (Hunter and Garnefeld, 2008). In the
workplace, variables such as autonomy, participation and involvement all of which have
been linked to job satisfaction may represent forms of empowerment. Such empowerment
is at least indirectly associated with role perceptions (e.g., an employee or intern who suffers
from a sense of role ambiguity would hardly feel empowered ). Again, in the case of
internships, a slight variation is required in keeping with the differences between that scenario
and a job. Interns enter the program knowing the limited time frame and hoping to obtain a
valuable corporate experience. In order for this to happen, the firm needs to empower the
intern with opportunities to display his/her specific skills (defined hereafter as "work
opportunity"). When the work requirements are incompatible with the intern's skills it would
lead to dissatisfaction with the firm. Therefore, work opportunity is modeled as an antecedent
influence on satisfaction with the firm. Additionally, task incompatibility with intern skills is
expected to contribute to feelings of role conflict, a phenomenon known to detract from
performance. Role conflict in turn, detracts from performance (Brown & Peterson 1993). This
leads to the following hypotheses:
H5: Work Opportunity will have a positive influence on Satisfaction with the firm.
H6: Work Opportunity will have a positive influence on the intern's performance.
Individual-difference variables studied in the job-satisfaction area include
demographic and dispositional variables. The latter would seem to be more appropriate than
the former in studying internship satisfaction, given the rather homogeneous composition of
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the student population. The impact of dispositional individual-difference variables on job

satisfaction is thought to be mediated by sales performance (Bagozzi, 1980). Accordingly, the
impact of the individual-difference variable on the intern's satisfaction with the program is
modeled indirectly through the influence of personal qualities on performance. Specifically,
the personal qualities examined in this study are maturity, responsibility and initiative.
H7: Personal Qualities will have a positive effect on Performance.
4. Method
The data used in this study were collected as part of an ongoing data collection process used
by the internship program of a large northeastern university. The sample consists of both
undergraduate and graduate interns with majors and concentrations in marketing, humanresource management, management and information systems. Both interns and their on-site
supervisors complete evaluation instruments at the completion of the internship, as a
requirement of participation in the program. Since the model of satisfaction with internship
programs is presented from the intern's and the firm's perspective, the data include input from
both parties. Constructs pertaining to the intern are modeled using intern data and constructs
pertaining to the firm are modeled using data provided by the supervisor at the firm.
Constructs measured using data provided by the intern are intern's satisfaction with the
internship, intern's satisfaction with the firm and work opportunities. Constructs modeled
using data provided by the supervisor are firm's satisfaction with the internship program,
performance of the intern, personal qualities of the intern and coworker relationships.
The intern's satisfaction with the program was measured using three indicators. The
first was a five-point scale rating the overall internship experience (Outstanding Unsatisfactory). The second indicator was a three-point scale measuring whether the
internship was a beneficial experience (No, Neutral, Yes). The third indicator was the intern's
recommendation regarding his/her supervisor and the firm regarding placement of future
interns, using a scale similar to that employed for the second indicator. The intern's
satisfaction with the firm was measured using two indicators, both using five-point scales
(Outstanding - Unacceptable), that captured the grade given by the intern for the supervisor's
and the firm's performance. The work-opportunities construct was measured using three
indicators, each using a five-point scale (Poor - Excellent) to measure the availability of
opportunity to (i) apply academic skill (ii) accomplish goals (iii) express opinions.
The firm's satisfaction with the internship was measured using a single five point
indicator (Outstanding - Unsatisfactory) where the supervisor evaluated his/her overall
experience with the internship program. Intern's performance was measured using three
indicators. The first was a grade assigned for overall performance and was measured on a five
point scale (Outstanding - Unacceptable). The second and third indicators were measures of
accuracy and general quality of work measured on five point scales (Needs improvement Excellent). The personal-qualities construct was measured by three indicators, each of which
used a five-point scale (Needs improvement - Excellent). The items measured the intern's
maturity, initiative and responsibility. Finally, the coworker-relationships construct as
measured by data provided by the supervisors had three indicators. All three used the same
type of five-point scale (Needs improvement - Excellent) and measured the intern's acceptance
of criticism from, oral communications with and cooperativeness with coworkers.
5. Results
The sample, with a size of 160, was analyzed with Lisrel structural-equation modeling.
Of the overall fit measures, chi-square with 126 degrees of freedom was 132.59 (p=0.326), the
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goodness-of-fit index (GFI) value was 0.873, the adjusted goodness-of-fit index (AGFI) value
was 0.828 and the root-mean-square-residual was 0.042. The squared multiple correlations for
the structural equations are all above 0.70. In terms of the measurement model, all of the
indicators had significant loadings on their respective constructs. The reliabilities of the
constructs are as follows: intern's satisfaction with the internship (0.98), satisfaction with the
firm (0.88), performance (0.94), personal qualities (0.90), coworker relationships (0.91) and
work opportunity (0.79). To test possible cross- loading modification indices were examined.
The largest modification index value was very small (13.26) and since it indicated a
theoretically implausible change (using intern's rating of the internship experience as an
indicator for satisfaction with the firm), no change was made in the model. Taken together,
these measures of fit offer good support for the hypothesized model.
In terms of individual relationships, four of the seven hypotheses are significant in the
expected direction. (See Table 1 for parameter values.) Specifically, the influence of
performance on firm satisfaction with the program (H1), the influence of satisfaction with the
firm on intern's satisfaction with the program (H2), the influence of work opportunities on
satisfaction with the firm (H5) and the influence of personal qualities on performance (H7) are
all significant at the p < 0.01 level in the expected (positive) direction. The impact of
coworker relationships on satisfaction with the firm (H4) is marginally significant (p < 0.10),
while the influence of work opportunities on performance (H6) is not significant. The
influence of performance on intern's satisfaction with the firm (H3) is significant (p < 0.05)
but in the opposite (negative) direction. This last result will be discussed more extensively in
the discussion section as it offers some interesting implications.
[Insert Table 1 about here.]
6. Discussion
In general, the results of this study were as expected. Predictably, the influence of the
intern's satisfaction with the firm on his/her satisfaction with the internship was the single
largest effect in the model. While no one practice can ensure that such an outcome will
always occur, it is less likely to happen by default than if there is an effort at a couple levels to
facilitate it. First, an attempt to match students with organizations and task descriptions that
correspond to their career objectives and known strengths will go far toward placing interns in
an environment likely to enhance their satisfaction with the firm. The closer the fit between
the intern's skills and the task characteristics, the more likely it is that s/he will find the
experience worthwhile. Otherwise the internship experience loses its value and its unique
place in business education. Second, a careful debriefing of interns and their supervisors could
help program managers to identify sources of dissatisfaction, information which could be used
to improve the experience for subsequent interns or, if necessary, to avoid placing students
into inappropriate environments in the future.
Personal qualities had a strong influence on performance at the internship, which in
turn had a large effect on the firm's satisfaction with the program. This is pertinent information
for the planning and management of internship programs. Successful performance on
internships is vital if such experiences are to achieve such desired results as student
employment opportunities (at the internship organization or others within the network of
managers who become familiar with the interns) and the assurance of future internships for
other students. A negative experience with a student intern, or worse yet a pattern of such
experiences, could quickly damage the relationships that lead to such opportunities.
Recognizing the importance of the demonstration of maturity, initiative and responsibility by
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interns, it may be advisable to screen for such attributes before matching students with
internship assignments, to reinforce the importance of them before as part of students
preparation for the experience, and to make a positive assessment on those traits by the
organization a requirement for internship credit.
An intriguing result of this study was the negative relationship between the interns
performance and their satisfaction with the internship. We had hypothesized that in order to
capture the intern's satisfaction with the internship more completely, it had to be modeled as a
function of two variables; satisfaction with the firm representing a general aspect and
performance on the job representing a more specific aspect. We further hypothesized that both
of these constructs would have positive influences on the intern's satisfaction with the
internship. While this line of reasoning could be expected to be true in general, there are at
least a couple plausible alternative explanations that precludes dismissal of this result as a
statistical anomaly.
First, recall that the performance construct is based on data provided by the intern's
supervisor. Therefore a negative relationship implies that, while the supervisor perceived the
intern as performing very well the intern was clearly not satisfied with the internship. What is
likely to bring about this state of affair? When the intern is asked to do work for which he/she
is overqualified, then it is very likely that the intern would complete the work competently but
would draw no satisfaction from it. A typical scenario is when the intern who is a business
major and is aspiring to become a manager in the near future, is asked to do mainly clerical
work for which business skills are clearly not needed. From the supervisor's perspective the
intern would seem very competent at the task, but from the intern's perspective it may not be
challenging enough. Two additional pieces of information support this explanation. First, the
significant impact of work opportunities on satisfaction with the firm (as hypothesized)
underscores the point. Interns want opportunities to use the skills they have developed over
two or three semesters in a practical business situation. When these opportunities are not
provided they are dissatisfied. Additionally, while not coded and incorporated into the model,
narrative responses from interns were retained and examined for insight on this issue.
Unfortunately, those comments revealed that this scenario was not an uncommon occurrence.
Correction of this problem at this and other institutions requires clear communication to
organizations of the minimum requirements for tasks assigned to interns (i.e., they should be
challenging and require the intern to use his/her business skills), screening of internship
proposals to ensure that those criteria are satisfied before students are assigned, and a
commitment to require correction or to terminate an internship relationships with a company if
they are not.
The career-stage framework that is often applied to sales-force management may
suggest a second plausible explanation for the hypothesis-inconsistent direction of the
relationship between performance and satisfaction. Cron (1984) developed a four-stage
framework consisting of (1) exploration, (2) establishment, (3) maintenance and (4)
disengagement. The experience of a college intern in a business environment can be likened
to the exploratory stage. Research has established that exploratory salespersons have lower
levels of job involvement and performance than those at later stages and that they are more
interested in finding out if they belong and whether they can succeed (Cron, Dubinski, and
Michaels 1988; Cron and Slocum 1986, Cron 1984). Whereas the prior explanation focused
on the scenario where an intern performs well but is dissatisfied, this these characteristics of
the exploratory stage may speak to the opposite situation (still consistent with an inverse
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relationship between performance and satisfaction), in which an intern performs poorly but is
nevertheless satisfied. Here an intern who received the desired information about how well
the organization, industry or function may fit with his or her skills and objectives and learns
something about his or her capacity to succeed may be satisfied even if a lack of experience
undermines the capacity to perform well during the brief internship period.
The marginal association between coworker relationships and satisfaction with the
firm does not afford a strong basis for extracting implications. However, there may be some
benefit to encouraging organizations to provide nurturing and supportive coworker relations in
the internship environment and to advising students of the importance of engaging in
behaviors likely to foster such relationships.
This study clearly has limitations. First, the data were not collected specifically for this
study and hence, as noted earlier, the available measures do not comprehensively capture the
variables that formed the basis for the conceptual model or those that would be needed to test
the alternative explanations offered to explain discrepant results. Future research efforts could
use our model and post-hoc explanations as a basis for more complete data collection and
analysis. Second, the data we used come from only one business school. In order to generalize
the results data need to be collected from different business schools. Third, the sample,
though not limited to a single major, there were some marked absences (e.g., accounting and
finance). It would be interesting to compare the model across different functional areas of
business to ascertain whether the same or different parameters are needed to explain
satisfaction and whether their weights vary across majors and concentrations. Fourth, the
model speaks to only a few of the many variables that could influence intern satisfaction. For
example, Menguc and Bhuian (2004) found job feedback, a variable that might appropriately
be incorporated into extensions of this research, to have a strong influence on the satisfaction
of guest workers (who have some obvious similarity to interns) during the exploratory stage.
The internship experience often plays crucial roles in guiding students career decisions,
preparing them for work in their chosen fields, and aligning them with appropriate
employment opportunities. The mutual satisfaction of interns and supervisors fosters those
outcomes and the maintenance of the relationships needed to sustain such opportunities for
future generations of students. It is hoped that this research will provide some preliminary
insights and serve as a springboard for future investigation in this important dimension of
business education.
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References
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Menguc, B., & Bhuian, S. N. (2004). Career stage effects on job characteristic-job satisfaction
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and repurchase loyalty. Journal of the Academy of Marketing Science, 30(3), 240-249.
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57-65.
Schneider, B., Hanges, P. J., Mith, D. B., & Salvaggio, A. N. (2003). Which comes first:
Employee attitudes or organizational financial and market performance. Journal of
Applied Psychology, 88, 836-851.
Slocum, J. W., & Cron, W. L. (1985). Job attitudes and performance during three career
stages. Journal of Vocational Behavior, 26(April), 98-112.
Voon, B. H., Hamali, J., & Tangkau, J. (2009). Linking service climate to organisational
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Wangenheim, F. V., & Bayon, T. (2007), The chain from customer satisfaction via word-ofmouth referrals to new customer acquisition. Journal of the Academy of Marketing
Science, 35(2), 233-249.
Whitman, D. S., van Rooy, D. L., & Viswesvaran, C. (2010). Satisfaction, citizenship
behaviors, and performance in work units: A meta-analysis of collective construct
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Annexure
Figure 1: Internship Satisfaction Model
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Table 1: Parameter Estimates for the Model
Hypotheses
Standardized
Estimates
t-values
H1
0.850
10.43*
H2
1.048
4.97*
H3
-0.283
-2.05*
H4
0.249
1.78**
H5
0.770
3.74*
H6
H7
0.005
0.945
0.056
8.71*
* p < 0.05
** p < 0.10
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Measuring Efficiency of Public Sector Organizations:
A Case Study of Public Sector In-Service Training
Institutes in Pakistan
FEBRUARY 2011
VOL 2, N O 10
Listed in ULRICH S
Ajmal Waheed (Corresponding Author)

Assistant Professor, School of Management Sciences, Quaid-e-Azam University,
Islamabad, Pakistan.
Norma Mansor
Ex-Dean, Faculty of Economics and Administration,
University of Malaya, Kuala Lumpur, Malaysia.
Presently holding the post of Council s Secretary General,
National Economic Advisory Council (NEAC) of the Prime Minister,
Government of Malaysia
Noor Azina Ismail
Head, Department of Statistics,
Faculty of Economics and Administration (FEA),
University of Malaya (UM), Kuala Lumpur, Malaysia.
Note: This research article is based on the first author s PhD thesis (Waheed, 2008).
Abstract
This paper assesses the efficiency of public sector training institutes (PSTIs) in Pakistan by
employing a framework of effectiveness, efficiency, relevancy and creativity (EERC).
However, this particular paper only assesses the efficiency dimension of organizational
performance and remaining three dimensions are outside the ambit of this paper. The
principal source for collecting data was the questionnaire survey. Four sets of
questionnaires focusing on four different target groups i.e., (i) former trainees; (ii)
immediate senior officers of former trainees; (iii) faculty members; and, (iv) PSTIs were
developed to collect pertinent data. Results showed that situation in the PSTIs with respect
to efficiency and use of resources are satisfactory and they are performing their task in a
reasonably economic way. Hopefully, the findings of the study will have practical
implications for trainees, PSTIs, policy makers and on many other on-going performances
oriented policies and programs in improving the efficiency of public sector organizations.
Key Words: Performance Evaluation; Efficiency; Government performance; Training
1. Introduction
The forces of globalization and emerging trends in economics, ecological and technological
interdependence among countries (Common, 1998), reinforced by financial and economic
crises in the South East Asia region are questioning the performance, quality of services
and role and scope of public sector organizations (PSOs) in developing countries.
Efficiency and effectiveness in government organizations are a sine-qua-non for
development. The authorities in Pakistan have been trying hard to improve the efficiency of
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PSOs for over a decade. This is because (i) things have changed, a sense of public service
awareness has increased among people due to the information revolution (Shah, 2003) and
as a result they are demanding better public services i.e., efficient, equitable and transparent
services; (ii) internationally, evaluation of PSOs is being called for; (iii) globalization has
increased competition and sense of awareness (Flynn, 1995, 1997) which generates
pressure on PSOs to be more efficient and effective; (iv) resources are limited and
government is supposed to justify its spending and be accountable and transparent in public
spending; and, (v) PSOs occupy key positions in the most developing countries since they
are the major source of service delivery and therefore, their performance is subject to
intense scrutiny and frequent debate.
Peterson et al. (2003) stated that before PSOs can improve performance, they need to be
able to assess their present performance because many are facing a crises of confidence and
are thus losing credibility that is associated with (i) complaints on inefficiencies and
ineffectiveness because of the costly operations of PSOs, as compared to private sector
organizations; (ii) stakeholder dissatisfaction with the quality and delivery of services and
poor management practices; (iii) reduced funding because of poor performance and low
level of investors confidence; (iv) large size of PSOs because of numerous bureaucratic
procedures; (v) inward looking attitudes since PSOs are unresponsive to public needs and
civil servants are more interested in rent seeking activities (i.e., bureaucracies are working
for their own convenience rather than for users of their services) than delivering services
(Flynn, 1995; Goldsworthy, 1993); (vi) very limited research; (vii) increased demands for
accountability, transparency and performance (Grace, 1994; Pusey, 1991) because of
corruption and maladministration; and, (viii) dissatisfaction of employees because of poor
quality of human resource management practices leading to high turn over rate in the PSOs.
The primary concern of this paper would be on determining the level of efficiency of Public
Sector In-Service Training Institutes (PSTIs) in Pakistan. There are five PSTIs i.e., One
National Management College (NMC), which impart training to senior management level
officers of the government and four National Institutes of Management (NIMs) each at
provincial headquarter and offer training programs to middle management level officers of
the government (Establishment Manual, 1992). This paper is organized into five sections.
Following this introduction is a brief synopsis of the literature on the organizational
efficiency. Section three discusses the methodology employed in this paper. Section four
carries out an analysis of the data. The final section concludes the paper by summarizing
major findings.
2. Organizational Efficiency (OE)
Nowadays, OE has become an important issue for PSOs and government has to spend more
attention on performance measurement in the public sector than ever before (OECD as
cited in Rose & Lawton, 1999; Van Thiel & Leeuw, 2002). This is, according to Shah
(2003) due to information revolution, which has empowered citizens and enhanced
awareness of their rights and according to Peterson et al. (2003) due to increasing demands
on PSOs to generate relevant output for their clients. This increased attention to
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performance assessment in the PSOs in the opinion of Power (2000) corresponds with the
dawn of administrative reforms and good governance. Boston (1996) regards good
governance as key to improve service delivery and government performance in the PSOs.
Efficiency concerns with achieving the organizational objectives in least time and cost by
better utilization of resources. Working efficiently is doing things with the least amount of
wasted efforts (Carr, 1993; Jreisat, 1992; Lusthaus et al., 2002; Moharir, 1997a). Mulreany
(1991) also supports this point of view. He thinks that efficiency implies obtaining the
maximum output from given inputs or achieving the minimum level of inputs for a given
level of output. Jackson (1995) states clearly his conception and defines efficiency as the
relationship between the output of goods, services or other results and the resources used to
produce them. Efficiency dictates the selection of that alternative, which will yield the
greatest net return to the organization. This balance sheet efficiency involves, on the one
hand, the maximization of output (income), if costs are considered as fixed; and on the
other hand, the minimization of inputs (costs) if output is considered as fixed (Simon, 1961,
p. 173). This means that efficiency relates inputs to outputs and it refers to how well the
organization converts inputs into outputs. In other words, if there is no waste of resources,
an organization is efficient. Due to increased competitive pressure, the private sector has
successfully eliminated the waste, but in the PSOs waste does exist because of absence of
threats of takeovers and insolvency.
To measure the efficiency, one needs to quantify both the inputs and outputs of an
organization. The criterion of efficiency is easily understood in its applications to
commercial organizations working for the profit (Moharir, 1997a). It is due to the fact that
money provides a common denominator for the measurement of both inputs and outputs
and permits them to be directly compared but in the PSOs especially services sector, where
many factors are involved that are not directly and sometimes indirectly measurable in
monetary terms. In developing countries, where there is an acute shortage of resources and
at the same time clients are not happy with the PSOs especially in respect of service
delivery, efficiency can be considered as an important criterion of PSOs performance.
Citizen satisfaction from public services can be enhanced considerably by improving the
delivery of these services through increased efficiency.
Both Effectiveness and efficiency are inter-related concepts. Cherrington (1989) explains
this relationship more explicitly. According to him, effectiveness concerns both the
efficiency of the transformation process plus how well the output is exported into the
environment, while efficiency measures the quality of the transformation process. This
suggests that organizational efficiency contributes to the organizational effectiveness.
Efficiency in an organization produces immediate increase in profits and is conducive to
growth and survival of the organization, which is one of the objectives of every private
sector organization. In other words, certainly the organization, which increases its
efficiency can also, achieves its effectiveness. Nevertheless, the efficiency criterion is
insufficient for purpose of a complete organizational analysis; it is only single aspect of
organizational performance (OP) because better OP implies improvement in both the
degree of achievement of objectives and progress in achieving them at less cost and time.
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2.1. Assessing Efficiency in the Case of PSTIs

In the case of training institutes, efficiency means the greatest amount of learning at the
least cost and efforts or, it may imply the rationality of the institutes in the use of resources.
One may argue that in training the condition of less time and more output cannot apply.
More time spent in a training institute leads to more learning and knowledge and ultimately
better and improved performance but this depends upon how time is spent and whether
time efficient tendency methods are used. This concept can be applied on NMC and NIMs
(PSTIs) advanced training programs, which are completed in eighteen and fourteen weeks
respectively (comparatively more time), but more time at a training institute is tantamount
to more learning. Nevertheless, if someone can show that the same quantum of learning can
take place in twelve weeks, then efficiency will be higher in this case. The performance
indicators of efficiency can be categorized based on (i) input and cost; (ii) output; (iii) work
processes; and, (iv) structure and could be used as indicators of efficiency for these
Institutes.
2.1.1. Cost measures
Cost is a natural performance indicator that combines measures of inputs and outputs
(Moharir, 1997b). How much resources are required to train a required number of civil
servants per annum? To measure this, the following indicators can be used:
NIMs and NMC training budget
Cost per participant or trainee. This is unit cost and can be calculated with the help of
formula i.e., input / output:
Total cost of a training institute per annum
Total number of participants trained per annum
This will give an average cost per trainee. By comparing this cost with that of the previous
year, the degree of increase or decrease in cost per trainee indicates the efficiency of NIMs
and NMC. Moreover, to quantify efficiency of NIMs and NMC, the cost per trainee for
these institutes could be compared with the cost per trainee at other training institutions.
Total expenditure on training as compared to total expenditure on civil servants. This
ratio will tell us how much the government is spending on training or, what percentage of
total expenditures is spent on training.
Visiting speaker time or cost versus full time faculty member time or cost could be
another indicator of inputs. This will indicate how effectively and efficiently permanent
faculty members are utilized by these institutes.
2.1.2. Output measures
Output indicators are about what has been achieved (Moharir, 1997b; Robbins, 1990) i.e.,
the product of the institutes. It assesses effort rather than effect, in other words it answers
what one did and how well he did. An indicator which can be used as output measure is the
total number of trainees trained per annum with given inputs and this can be compared with
the achievements of the previous year and with the number of trainees trained per annum
against the government plan.
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2.1.3. Work process based indicators

Work process indicators relate to the use of resources (Khan et al., 1994). These indicators
focus on quantity and quality of activities carried out by an organization. The quality of
faculty is a process measure and can be assessed by the following indicators:
Total strength of the faculty members
Academic qualification and professional experience of directing staffs (DS) / faculty
Course completion rate / drop-out rate
Class size
Instruction hour per week
trainees attendance / absenteeism, late comers
Passing rate with grade achieved by the trainees
Evaluation of faculty members by the trainees and their reaction to the course.
In short, two things can be used to assess quality of faculty members (i) inputs of the
faculty; and, (ii) responses such as level of learning, change in performance and behavior
of the trainees to the course.
2.1.4. Structural indicators
Structural indicators assess the capacity of the organization for effective performance
(Scott, 1987, p. 332). These are based on both organizational and trainee s characteristics
presumed to have an impact on organizational efficiency. NMC and NIMs performance
could be assessed on the basis of qualifications of the teaching staff, number of books in
the library and other facilities like computers, sports, medical, and training equipment
because the quality of outputs is influenced by the quality of inputs. The selected
performance indicators of efficiency and the target groups where data are collected are
indicated in Table 1.
Table:1 Indicators of Efficiency for NIMs and NMC
Criterion
Performance Indicators (PIs)
i. Cost measures
NIMs and NMC training budget
Efficiency
Cost per trainee (unit cost)
Total expenditure on training Vs total expenditure on
civil services
Visiting speaker time / cost against permanent speaker
time / cost
Library expenditures
ii. Out put measures
Total number of trainees trained per annum with given
inputs
Target
Groups
In-Service
Training
Institutes
In-Service
Training
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Institutes
Comparison of this number with other training institute
in the public sector with same inputs
Comparison of trainees trained against the plan.
Output per faculty member and staff member
iii. Work processes based indicators
Total strength of the faculty members
Academic qualification of the faculty members
No of earned doctorates among the faculty members
Professional experience of the faculty members
Academic staff trainee ratio
Drop out rate / Repetition rate
Class size
In-Service
Instruction hours / week
Training
Trainees attendance
Institutes
Percentage of late comers
Passing rate with grade achieved
Evaluation of faculty members by the trainees
Evaluation of course by the trainees
Quality of course content
Quality of instruction
Appropriateness of training methodology
iv. Structural measures
Qualification/experience of the teaching staff
In-Service
Number of books in the library
Training
Computers, Sports, Medical, and building facilities and
Institutes
their optimum utilization
Quality of training equipment and their optimum
utilization
Source: Waheed (2008, p. 66)
3. Methodology
This paper is a part of doctoral thesis (Waheed, 2008) that evaluates the performance of
PSTIs in Pakistan. This study employs a framework of effectiveness, efficiency, relevancy
and creativity (EERC) for measuring the performance of PSTIs. In this particular paper, the
same framework is used, however, it only assesses the efficiency dimension of OP and
remaining three dimensions i.e., effectiveness, relevancy and creativity are outside the
ambit of this paper.
3.1. Study Population and Selection Procedure
For this paper, the unit of analysis is the organizations and at this level five PSTIs in Pakistan
such as four NIMs and a NMC were studied. The major information about the study i.e.,
responses were obtained from four groups of respondents i.e., (i) former trainees of NIMs
and NMC; (ii) immediate senior officers of former trainees; (iii) faculty members of NIMs
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and NMC; and, (iv) PSTIs i.e., Personnel, Accounts and Training Coordination Sections of
NIMs and NMC. The selection procedure of four target groups is explained as follows:
3.1.1. Former trainees

For this research, all civil servants who had attended advanced courses at PSTIs during
1996 2005, constituted the study population. The lists or the sampling frame of all former
trainees who had attended the training during 1996-2005 were collected from the
concerned PSTIs. In this way, the total number of former trainees who completed their
training during 1996 2005 is 2700. 300 trainees were selected from 2700 using a simple
random sampling, which is about 10 percent of the total population. Out of 300
questionnaires distributed in the office of the sampled respondents in person, 242 (81
percent) questionnaires were returned.
3.1.2. Immediate senior officers of trainees
In this case, the sampling frame as well as respondents profile was not available. The
sampling method used for selecting this target group was the convenient sampling method
i.e., while distributing questionnaires to the former trainees in their offices, their immediate
senior officers were also contacted and requested to evaluate former trainees performance
before and after and with and without the training they had received at PSTIs. A total
of 130 questionnaires were distributed to this target group, out of which 102 (78 percent)
were returned.
3.1.3. Faculty members
The total strength of faculty members of four NIMs and a NMC according to employment
records of Establishment Division, Government of Pakistan (2005) is forty eight. Since the
number is small, all faculty members were selected for this target group. In this case, 48
questionnaires were distributed in the office of the faculty members in person. Of these, 41
(85 percent) were returned.
3.1.4. In-Service Training Institutes
Five In-Service Training Institutes i.e., NIM Karachi, NIM Lahore, NIM Peshawar, NIM
Quetta and a NMC were selected for the study. The same population was treated as sample
size for this target group. As all the required information for the study regarding five InService Training Institutes are placed at Personnel, Accounts and Training Coordination
Sections of these institutes. That is why, a total of 5 questionnaires were distributed in
person to these sections of the institutes and 100 percent responses were received.
3.2. Sources of Data
The material for this study is collected from both primary and secondary sources. These are
complemented where necessary by formal and informal discussion with PSTIs former
trainees and staff. Sources from books, journals, official documents, newspaper articles and
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research articles are studied and information collected regarding the assessment of OE. In
addition, the secondary data for this study were also collected in the form of official
documents, files, annual reports, circulars, financial statements and personnel rules and
regulations handbooks and websites of PSTIs. For primary data, the study population
consisted of the former trainees of PSTIs, immediate senior officers of trainees and faculty
members of these institutes.
3.3. Data Collection
The fieldwork for collecting data and acquiring relevant information for the study is carried
out in Pakistan. A bi-angular approach to fieldwork by parallel employment of two
methods i.e., (a) questionnaires; and, (b) interviews was used in this research for data
collection and explained as follows:
3.3.1. Questionnaire
The major part of the data comprises data on four dimensions i.e., EERC of organizational
performance (OP). Four sets of questionnaires focusing on four different target groups as
explained in Section 3.1 were developed to collect pertinent data and are explained as
follows:
Questionnaire I seeks responses of the former trainees of five PSTIs. It is mainly divided
into two parts. Part (a) asks about demographic information of respondents and part (b)
contains about 59 questions in total relating to trainees reaction about the training they
received at PSTIs. This part is further subdivided into six sub-scales. They are (i) training
effectiveness, -- 15 questions; (ii) speakers effectiveness, -- 9 questions; (iii) facilities at
PSTIs, -- 6 questions; (iv) general administration, -- 8 questions; (v) relevancy, -- 9
questions; and, (vi) creativity, -- 4 questions. This set of questionnaire intends to measure
training institutes effectiveness, relevancy and creativity.
Questionnaire II was distributed to the immediate senior officers of trainees. It is divided
into two parts. Part (a) contains 20 questions and aims to assess trainees performance
before and after the training and part (b) also contains 20 questions and seeks to evaluate
trainees performance with and without training at PSTIs. The main purpose of this set of
questionnaire is to assess training institutes effectiveness.
Questionnaire III concerns the faculty members of five PSTIs. It is divided into two parts.
Part (a) asks about demographic information and part (b) contains 20 questions asking
respondents views on what are the norms, values and practices in the organizations in
which they work. This part is further subdivided into three sub-scales. They are (i)
effectiveness, -- 4 questions; (ii) relevancy, -- 4 questions; and, (iii) creativity, -- 12
questions. The intention here is to measure effectiveness, relevancy and creativity of PSTIs.
Questionnaire IV concerns the Personnel, Accounts and Training Coordination Sections of
PSTIs. This questionnaire contains 41 questions and is designed to obtain objective data
from the records of each institute. This is subdivided into four sub-scales. They are (i) cost
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measures, -- 6 questions; (ii) output measures, -- 12 questions; (iii) work processes based
measures, -- 19 questions; and, (iv) structural measures, -- 4 questions. This set of
questionnaire aims to measure efficiency of PSTIs.
The questions in Questionnaires I, II and III are in the form of a Likert scale. The scale of
change can range from 1 to 5 where, 5 is the highest i.e., a very high rate of agreement /
satisfaction and 1, the lowest or, a low rate of agreement / satisfaction. In the case of
Questionnaire IV, all questions were open ended. A summary of the target groups and
dimensions of OP intended to measure according to questionnaires is shown in Table 2:
Table: 2. Response Rate on Four Sets of Questionnaires and Dimensions Measured
Questionnaire
Used
I
II
III
IV
Respondents /
Target Groups
Population
Size
Sample
Size
Selected
No of
Responses
Percentage
of
Responses
Former Trainees
of PSTI
2700
300
242
81
Effectiveness
Relevancy
Creativity
Not
available
130
102
78
Effectiveness
48
48
41
85
05
05
05
100
Immediate
Senior officers of
former trainees
Faculty
Members of
PSTI
Four NIMs
and
a NMC
Dimensions
Measured
Effectiveness
Relevancy
Creativity
Efficiency
Creativity
3.3.2. Interviews
In this study, the principal instrument of data collection was the questionnaire. However,
informal interviews and discussions with the former trainees as well as with a cross section
of staff of PSTIs were also conducted to support the information collected through
questionnaires. Some selected questions from the questionnaires I and III were asked during
the interviews to get their reactions to the performance of PSTIs. The interviews and
discussions took place during fieldwork, lasted one to one and a half hours and were a source
of data based on inner stories given by respondents. Interviews were conducted with ninety
former trainees and twenty faculty members of PSTIs (selected conveniently) in their
offices both in person and on telephone. They were interviewed either individually or in
groups. These interviews provided in-depth information and additional insights into the
analysis relating to PSTIs training culture and were very helpful for the present study
because respondents felt more comfortable in discussion and provided information in more
detail as compared to the questionnaires.
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3.4. Methods Employed

This section provides the salient aspects relating to the methods employed for the analysis
of survey data. The returned questionnaires were coded and entered into Microsoft Excel
for the initial database, data checking and manipulation. Data were cleaned / edited and
analyzed using the Statistical Package for Social Sciences (SPSS, version 12.0) for
Windows. Different statistical tools such as (i) profile of respondents with the help of
frequency distribution and percentages were discussed; (ii) validity and reliability were
determined; (iii) factor analysis was carried to extract factor components. Mean scores of
these factor components were used in assessing effectiveness of PSTIs; (iv) means scores
of different sub-scales of questionnaires; and (v) independent sample t test and one way
analysis of variance (ANOVA) were employed to different sub-scales of questionnaires to
test various demographic groups mean differences for significance.
3.4.1. Measurement of Efficiency
Mainly two techniques such as (a) mean scores of labeled factor components extracted
through factor analysis of different sub-scales; and, (b) ranking In-Service Training
Institutes by establishing their performance indices were used to investigate their
performance in each dimension i.e., effectiveness, efficiency, relevancy and creativity as
follows:
(a) Investigating the Performance in Efficiency Dimension of OP
The measurement of efficiency dimension of OP was carried out as follows:
First of all, overall indices of EERC were obtained by adding EERC indices of all five InService Training Institutes. The details of the calculations of performance indices in efficiency
dimension can be found below under the caption of ranking in-service training institutes. As, a
five - point rating scale ranging from 1 to 5 was used in this study, therefore, 3.0 was taken as
a benchmark because this is a minimum satisfaction level of respondents.
In addition to overall indices of EERC, mean scores of labeled factor components of
Questionnaire I and III extracted through factor analysis as explained above as well as
mean scores of different sub-scales of Questionnaire IV were also obtained. Means score
below or above the benchmark will determine the performance of In-Service Training
Institutes in each dimension. One-sample t test was conducted for this purpose because it
compares the mean score of a sample to a known value, which is usually a hypothesized
mean. If the value for two-tail significance is less than 0.05, then the difference between
the means is significant.
(b) Ranking In-Service Training Institutes
To determine the rank order of the performance of five In-Service Training Institutes by
establishing their performance indices, the following model was adapted with slight
modification, which essentially corresponds to Kuppusamy s (2006) formula used for
measuring performance of Local Authorities in Malaysia.
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PTI = W1( E1 ) + W2 ( E2 ) + W3 ( R ) + W4 ( C )
W1 + W2 + W3 + W4
Where PTI refers to performance of training institutes concerned, which is based on sum of
the average means scores of four dimensions of performance obtained through the
weighted measures;
E1 = mean scores of different sub scales pertaining to effectiveness dimension of the
respective training institutes (Questionnaires I and III);
E2 = mean scores of different sub-scales pertaining to efficiency dimension of the
respective training institutes (Questionnaire IV);
R = mean scores of different sub-scales related to relevancy dimension of the respective
training institutes (Questionnaires I and III);
C = mean scores of sub-scales related to creativity dimension of the respective institutes
(Questionnaires I and III); and,
W1, W2, W3 and W4 are weights used on the four dimensions of performance i.e.,
effectiveness, efficiency, relevancy and creativity (EERC) and determined by the
interviews with six experts from different fields. Based on the average response from the
six experts, the following weights were assigned to four dimensions of OP:
W1 = 0.40; W2 = 0.25; W3 = 0.20; and, W4 = 0.15.
Four set of performance indices based on average mean scores of four performance
dimensions i.e., effectiveness, efficiency, relevancy and creativity were established for each
training institute separately.
The first performance index covers the effectiveness (E1) dimension and it includes
average mean scores of different items pertaining to sub-scales training effectiveness and
speakers effectiveness of Questionnaire I and sub-scale effectiveness of Questionnaire III.
The second performance index i.e., efficiency (E2) covers average mean scores of items
(S1 to S21) formulated from sub-scales cost measures, output measures, work processes
measures and structural measures of Questionnaire IV. To compute efficiency indices of
NIMs and NMC separately, objective data from the record of each institute were obtained
and converted into an index i.e., each item is calculated using real values which are then
normalized to form indices ranging from 1 to 5. The following formula and process is used
for converting objective data into an index in this study:
Efficiency Index =
Lowest indicator among all training institutes

Highest indicator among all training institutes
In this way an index ranging from 0 to 1 is obtained which is then normalized to form an
index ranging from 1 to 5 by multiplying with a 5. For example, to compute the efficiency
index of average cost of NIMs and NMC, the data regarding average cost of these institutes
from Table A1 (see Appendix A) is listed and calculated as follows:
Efficiency Index of Average Cost
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Cost Indicators
Average cost / trainee
NIM
Karachi
$14176
All Indices
0.4958
Overall Indices
2.48
Efficiency
Index 3
(reverse)
NIM
Lahore
$14097
0.4930
2.47
3
NIM Peshawar
$8621
(Minimum
value)
0.3015
1.50
4
NIM
Quetta
$8872
0.3103
1.55
4
NMC
Lahore
$28590
(Maximum
value)
1
5
1
All Indices = Lowest value x 5

Highest value
NIM Karachi = 14176 x 5 = 2.479 = 3
28590
NIM Lahore = 14097 x 5 = 2.465 = 3
28590
NIM Peshawar = 8621 x 5 = 1.50 = 2
28590
NIM Quetta = 8872 x 5 = 1.55 = 2
28590
NMC = 28590 x 5 = 1 = 5
28590
The efficiency indices for other items were calculated by following the same formula and
procedure (see Appendix B, from S1 to S21).
The third and fourth performance indices cover the relevancy (R) and creativity (C)
dimensions and include the average mean scores of items concerning sub-scales
relevancy of Questionnaire I and III to compute relevancy index and average mean scores
of items relating to sub-scales creativity of Questionnaire I and III to compute creativity
index respectively.
These four performance indices of EERC are simply summed up with an assigned set of
weights to calculate the composite performance index of each In-Service Training Institute
(PTI). The highest index or score would mean that the performance of the related training
institute is deemed superior to those with a lower score.
4. Analysis and Findings
4.1. Overall Efficiency
For assessing efficiency of PSTIs, the overall efficiency index (2.97) is achieved by adding
efficiency indices of all the five In-Service Training Institutes from Table 3, which is almost
equal to 3.0. This clearly shows that efficiency index of PSTIs overall is satisfactory and equal
to benchmark (3.0) on a five - point scale but probably far from being optimal. This suggests
that there is scope for improvement in the use of resources (efficiency).
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Table: 3. The Overall Performance of Training Institutes in Each Dimension

In-Service
Training Institutes
Effectiveness
Index
Efficiency
Index
Relevancy
Index
NIM, Peshawar
NIM, Karachi
NIM, Lahore
NIM, Quetta
NMC
Overall Indices
2.5802
2.5519
2.5242
2.2852
2.4865
2.4856
3.190
2.952
2.952
2.952
2.809
2.971
2.3852
2.3314
2.3630
2.5833
2.0176
2.3361
Creativity
Index
PTI
2.1402
2.6275
2.0236
2.5284
1.9127
2.5071
1.9093
2.4549
1.9464
2.3922
1.9864
2.5020
4.1.1. Efficiency from the Perspective of In-Service Training Institutes

To compute efficiency of NIMs and NMC, objective data from the records of each institute
were obtained, normalized and converted into an index (the process of converting objective
data into an index is explained in Section 3), ranging from 1 to 5. The four types of
indicators such as (i) those based on inputs and cost; (ii) those based on processes; (iii)
those based on output; and, (iv) those based on structure were identified and used as
measures of efficiency for NIMs and NMC. The analysis of these components of efficiency
from Questionnaire IV (In-Service Training Institutes) as well as mean scores for each
component is calculated and summarized in Table 4. This is derived from the survey data.
The one-sample t test cannot be applied in this case because of the small sample size as
explained in Section 3.
(i) Cost measures
Cost measures, which combine measures of input and output, that is how much resources
are required to train a required number of civil servants per annum as stated in Section 3.
Total training cost includes the trainees on-going salaries, boarding, lodging, traveling,
overheads cost during training and training cost or fee payment. In addition, the cost of
replacing trainees in the native organizations or cost of trainees not joining the office
during training has also been accounted for. When cost measures were analysed, it becomes
clear (see Table 4) that the mean score of this component (3.3) is higher than the specified
standard i.e., 3.0 (which is a benchmark on a five - point scale). This indicates that the
efficiency of In-Service Training Institutes in terms of cost measures is reasonably good.
However, among four NIMs and a NMC, NIM Peshawar seems to be more efficient
comparatively as it carries the least average cost per trainees and NMC carries the highest
average cost per trainee as shown in Appendix A.
Table: 4. Mean Scores of Sub-Scale Efficiency of Questionnaire IV (In-Service Training
Institutes)
Questionnaire
Dimension Indicators /
No of
Mean Scores
Components
Items
1. Cost measures
2
3.3
IV.
In-Service Efficiency 2. Output measures
5
2.68
Training Institutes
3.
Work
Processes 11
2.54
measures
3
4.8
4. Structural measures
Total Mean Score
21
2.97
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(ii) Output,Work Processes, and Structural Measures

The second and third components to evaluate efficiency of PSTIs are output measures and
work processes measures. When these two are examined, it is clear from Table 4 that
output component means score of 2.68 and structural measures means score of 2.54 are
lower than the benchmark i.e., 3.0, which indicates that the efficiency of NIMs and NMC
in terms of output and work processes measures is not satisfactory. However, in the case of
the fourth component i.e., structural measures the means score of 4.8 suggests that they are
performing very well as their means score is significantly higher than the specified standard
i.e., 3.0.
The total mean score (2.97) of sub-scale efficiency is almost equal to specified standard.
This indicates that the overall efficiency of PSTIs is reasonably satisfactory. However,
there are many gray areas, which need to be highlighted. For instance, in the output
measures, Table A2, Appendix A, clearly indicates that there are very few research papers
or books published by NMC and NIMs faculty in the reputed national or international
journals. It is due to the fact that main function of faculty is to impart training and this is
the reason why original research as a culture has not found roots in these institutes. It is
important to note that total number of sessions taken per faculty member per course are
also very few for which no justification was given. This means that permanent staff is not
teaching enough or is underutilized and visiting speakers may be heavily utilized. It has
also been observed that there is only one faculty member in all the five training institutes
who holds a PhD degree. Yet at the same time, the passing rate and course completion rate
of the trainees are almost one hundred percent, which is a healthy sign. However, this could
also suggest that the evaluation mechanism is not very strict. These institutes are practicing
only one level of evaluation i.e., end-of-course evaluation. Need assessment exercise is not
conducted to relate the training programs with the clients needs. Moreover, low work
motivation and high turn over rate among the member faculty and staff indicates the poor
management practices in these Institutes.
However, on an overall basis the situation at NIMs and NMC with respect to efficiency and
use of resources are satisfactory and they are performing their task in a reasonably
economic way.
4.2. Ranking In-Service Training Institutes
This section intends to rank the performance of PSTIs by establishing their performance
indices. The performance indices of these institutes are calculated by using average mean
scores of different sub-scales of Questionnaire I (Former Trainees), Questionnaire III
(Faculty Members) and Questionnaire IV (In-Service Training Institutes). The details of
survey data of Questionnaire IV can be found in Appendix B.
To establish the rank order of the performance of PSTIs, the following model was
considered, which essentially corresponds to Kuppusamy s (2006) formula used for
measuring performance of Local Authorities in Malaysia. Please refer to Section 3, where
this model and all the calculations are explained in details.
PTI = W1( E1 ) + W2 ( E2 ) + W3 ( R ) + W4 ( C )
W1 + W2 + W3 + W4
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These four performance indices of EERC are simply summed up with an assigned set of
weights to calculate the composite performance index of PSTIs. The highest index would
mean that the performance of the related training institute is deemed superior to others. The
performance indices (PTI) of five training institutes are calculated and placed in Table 5:
Table 5 shows the results of the calculations. The results indicate that NIM Peshawar
carried the ranking to the best among all the five In-Service Training Institutes followed
closely by NIM Karachi. NIM Lahore and NIM Quetta obtained the third and fourth
placing respectively and NMC fetched the last position among all five In-Service Training
Institutes.
Table: 5. The Performance Indices of Training Institutes and their Rank Order
Training
Institutes
NIPA
Peshawar
NIPA
Karachi
NIPA
Lahore
NIPA
Quetta
PASC
All
Indices
Effectiveness
Efficiency
Relevancy
Creativity
PTI
Rank
Order
Weight
0.40
Index
2.5802
Weight
0.25
Index
3.190
Weight
0.20
Index
2.3852
Weight
0.15
Index
2.1402
2.6275
0.40
2.5519
0.25
2.952
0.20
2.3314
0.15
2.0236
2.5284
0.40
2.5242
0.25
2.952
0.20
2.3630
0.15
1.9127
2.5071
0.40
2.2852
0.25
2.952
0.20
2.5833
0.15
1.9093
2.4549
0.40
2.4865
0.25
2.809
0.20
2.0176
0.15
1.9464
2.3922
1.9864
2.5020
2.4856
2.971
2.3361
Waheed (2008, p. 168)
5. Concluding Remarks
It can be concluded that the overall efficiency index of In-Service Training Institutes is
satisfactory and equal to average (3.0) on a five - point scale but probably far from being
optimal. This suggests that there is scope for improvement in the use of resources (efficiency).
Moreover, the mean scores of two components i.e., cost and structural measures are
significantly higher than the benchmark whereas the mean scores of components output and
work processes are significantly below than the benchmark i.e., 3.0. The total mean score
(2.97) of sub-scale efficiency is almost equal to specified standard (3.0). The above analysis
points to the fact that the situation at NIMs and NMC with respect to efficiency and use of
resources is satisfactory and they are performing their task in a reasonably economic way.
It can be concluded from the above analyses as well as from the interviews and discussion
with the faculty and management of NIMs and NMC that efficient training means the
greatest amount of learning for the least expenditure of time, money and effort.
Unfortunately, this is not what always happens. Available evidence reveals that the quality
of most public service training in Pakistan is low. This may be because training is treated as
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a discrete event in Pakistan rather than an element in a comprehensive program of

institutional improvement. Training, like any expenditure of resources, involves cost but
the main question is whether performance is improved after training. In Pakistan, training
cost seems to be reasonably satisfactory but training efforts at NIMs and NMC fall short of
significantly altering the situation i.e., improvement at work places.
In terms of policy implications, it is hoped that this paper will be policy-relevant. Hopefully,
the findings of the study will help prevent the known problems and their incorporation in the
design of future performance-focusing initiatives in Pakistan. The findings of the study will
have practical implications for client organizations, trainees, PSTIs, government policy
makers and on many other on-going performance oriented policies and programs and PSOs as
a whole in terms of (i) redesigning and implementing policies and programs; (ii) improving
the efficiency of their organizations; and, (iii) developing performance evaluation system for
PSOs.
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Appendix A
Table: A1.
Comparison of Cost Indicators of NIMs and NMC
Cost Indicators
NIM
NIM
NIM
Karachi
Lahore
Peshawar
Budget / annum
$5,50,000. $5,45,240. $2,16,670.
0
0
0
Tuition fee / trainee
$2340
$2340
$2340
Cost of trainees not $2670
$2670
$2670
joining the office
Total cost of training
$850,600.0 $845,840.0 $517,270.0
NIM
Quetta
$1,93,120.
0
$2340
$2670
NMC
Lahore
$9,25,200.
0
$9170
$4000
$443,620.0 $1715400.
0
Average cost / trainee
$14176
$14097
$8621
$8872
$28590
Total expenditures on During the last two decades, annual expenditures on civil service
training vis--vis total training had been less than 0.5 % of the total expenditures on
expenditures on civil civil services (Malik, 2003).
services
Source: Training Wing, Establishment Division, Government of Pakistan and Survey data
Table: A2. Comparison of Output Indicators of NIMs and NMC
Output Measures
NIM
NIM
NIM
Karachi
Lahore
Peshawar
No of advance training 2
2
2
courses offered / year
Total no of trainees trained / 55 to 60 55 to 60
55 to 60
year
Duration of advance training 12-week 12-week
12-week
course
Total no of training days
72
60
60
No of training session / day
5
5
5
Duration of each session
75
75 minute 75 minute
minute
Instruction hour / day
5.5
6.25
6.25
No of session taken / FM / 10 15
15 - 20
10 15
course
No of research papers one after one after one after
published / FM / year
every
every five every five
five year year
year
No of books published / FM / nil
nil
nil
year
Source: Survey data
NIM
Quetta
2
NMC
Lahore
2
50
50 to 60
12-week
18-week
60
5
60
minute
5
10
90
4
90 minute
nil
nil
nil
nil
6
10
12
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Table: A3. Comparison of Work Processes Based Indicators of NIMs and NMC
Work Processes Measures
NIM
NIM
NIM
NIM
NMC
Karachi
Lahore
Peshawar
Quetta
Lahore
Total strength
147 =
170 =
64 =
52 =
231 =
Faculty + officer + staff
14+15+118 12+20+136 9+10+45
4+8+40
8+41+182
Academic qualification of master
master
master
master
master degree
faculty
degree
degree
degree
degree
No of PhDs among faculty
Nil
nil
only one
nil
Nil
Professional experience of average
average
Average
average
good
faculty
Academic staff and trainee 1 : 4
1:5
1:6
1:8
1:7
ratio
Class size
25 30
25 - 30
25 30
20 25
24 30
Ratio of visiting faculty Vs 40 : 60
50 : 50
50 : 50
70 : 30
50 : 50
permanent faculty
Pass out rate
100 %
100 %
100 %
100 %
100 %
Course completion rate
100 %
100 %
100 %
100 %
100 %
Repetition rate
Nil
nil
Nil
nil
Nil
Trainees attendance
90 %
95 %
95 %
95%
90 %
Grades achieved by trainees usually A usually A usually A usually A usually A or B
or B
or B
or B
or B
Evaluation of faculty by the after every after every after every after
after
every
trainees
course
course
session
every
course
course
Evaluation of course by the end of each at the end end
of end
of end of each
trainees
course
of
each each
each
course
course
course
course
Incorporation of evaluation No
no
No
no
No
results into next training
course
NAE conducted or not
No
no
No
no
No
Faculty work motivation
Low
low
Low
good
satisfactory
T.O. rate
high
high
very high
low
Low
Job satisfaction
Low
low
Low
low
Low
How often you review after three after three after three almost
almost nil
course contents
year
year
year
nil
Source: Survey data
Table: A4. Comparison of Structural Indicators of NIMs and NMC
Structural measures
NIM
NIM
NIM
NIM
NMC
Karachi
Lahore
Peshawar Quetta
Lahore
Quality of classrooms, syndicate very good very
very
good
very
rooms, seminar rooms
good
good
good
Provision of Facilities (health, sports, excellent
very
very
very
excellent
hostels, mess, computers,
good
good
good
e-mail etc.
Training equipment
latest
latest
Latest
latest
Latest
Source: Survey data
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Appendix B
Questionnaire IV: In-Service Training Institutes
I
Efficiency
(i)
Cost measures
S1 Annual Budget (reverse)
0
(0)
S2 Average cost (reverse)
1
(20)
Mean Score
(ii) Output measures
S3 Total number of sessions (hours) taken 0
/ faculty member / course
(0)
S4 Number of research papers published in 1
the reputed or, refereed journal / faculty (20)
member / year
S5 Number of books published / faculty 5
member / year
(100)
S6 Pass out rate
0
(0)
S7 Grades achieved by participants
0
(0)
Mean Score
(iii) Work processes based measures
S8 Total strength of NIPA / PASC (faculty 0
+ Officer + staff)
(0)
S9 Number of Ph.D. among the faculty
4
(80)
S10 Professional experience of the faculty
0
(0)
S11 How do you evaluate course 0
performance?
(0)
S12 Frequency of conducting faculty 0
evaluation
(0)
S13 Do you incorporate evaluation results 1
into the next training Program?
(20)
S14 How often you review training 0
contents?
(0)
S15 Faculty work motivation
0
(0)
S16 Job satisfaction of the faculty
0
(0)
S17 Turnover rate of the faculty and staff 0
(reverse)
(0)
S18 Do you regularly conduct the need 5
assessment exercise?
(100)
1
(20)
0
(0)
2
(40)
2
(40)
0
(0)
2
(40)
2
(40)
0
(0)
5
(100)
5
(100)
3.3
3
(60)
4
(80)
2
(40)
0
(0)
0
(0)
0
(0)
0
(0)
0
(0)
5
(100)
5
(100)
0
(0)
0
(0)
0
(0)
0
(0)
0
(0)
0
(0)
0
(0)
5
(100)
4
(80)
0
(0)
0
(0)
1
(20)
5
(100)
5
(100)
5
(100)
2.68
1
(20)
1
(20)
0
(0)
0
(0)
0
(0)
4
(80)
5
(100)
3
(60)
1
(20)
1
(20)
0
(0)
2
(40)
0
(0)
4
(80)
0
(0)
4
(80)
0
(0)
0
(0)
2
(40)
4
(80)
4
(80)
0
(0)
0
(0)
0
(0)
1
(20)
5
(100)
1
(20)
0
(0)
0
(0)
0
(0)
0
(0)
0
(0)
0
(0)
2
(40)
0
(0)
0
(0)
0
(0)
0
(0)
0
(0)
0
(0)
0
(0)
0
(0)
0
(0)
0
(0)
5
(100)
5
(100)
5
(100)
5
(100)
5
(100)
5
(100)
5
(100)
5
(100)
5
(100)
5
(100)
5
(100)
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(iv)
S19
S20
S21
Mean Score
Structural measures
Computers, health, sports, hostels, mess
facilities
Number of classrooms, syndicate rooms,
conference hall, seminar rooms etc.
Training equipment and their utilization
2.54
0
(0)
0
(0)
0
(0)
0
(0)
0
(0)
0
(0)
Mean Score
Total Mean Score
0
(0)
0
(0)
0
(0)
1
(20)
1
(20)
1
(20)
4
(80)
4
(80)
4
(80)
5
(100)
5
(100)
5
(100)
4.8
2.97
Source: Survey data
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Analyzing the Effect of Value Chain Outsourcing on
Listed in ULRICH S
Productivity Based on the Customer and Learning

Perspective of BSC Model
Nour Mohammad Yaghoubi(PhD)
University of Sistan and Baluchestan, School of management and accounting , Department
of Management, Zahedan, Iran
Mohammamd Moradi
Master of public Administration , University of Sistan and Baluchestan , Zahedan, Iran
(corresponding author)
Seyyed Ali Banihashemi
Master degree of Industrial Engineering ( System Management & Productivity), Islamic
Azad University Zahedan Branch, Iran
Abstract:
Since Value Chain (VC) is especially important for organizations, this study aims to
analyze the effect of VC outsourcing on organizational productivity. This study makes use
of the conclusions of the related literature and tests out the Paired Samples T-Test , Paired
Differences mean and considers the differences between them. The population consists of
all the managers and staff of Iran Khodro Company, Khorasan Branch, who were involved
in the outsourcing process. Then, a sample of 110 people was taken from those who were
involved before and after the outsourcing process based on the purposeful (judgmental)
sampling. This study made use of the questionnaire instrument, the reliability assessment
result of which, by the use of Cronbach s Alpha, was equal to 0.823. It is important to note
that to assess productivity, the BSC model/customer and learning perspective was also
used. The findings of this study indicate that the learning and growth perspective has been
affected most by the outsourcing.
Keywords: Outsourcing, Value Chain, Productivity, Balanced Scorecard (BSC)
1-Introduction
Rapid changes in the business environment require senior management to adopt strategies
that focus on both current success and to invest in those activities that will promote a
competitive advantage for future success. One widely recommended technique for
improving one s competitive position is outsourcing . Many managers view outsourcing
as the only way to keep a business competitive into the twenty-first century (Bolat and
Y lmaz , 2009). Outsourcing activities or services to external organisations is not a new
phenomenon. Organisations have always had to take decisions about what they make and
what they buy (Delmotte, 2008).
Nowadays with increasing competitive pressures and progressing globalization, firms
have to reduce their costs and build new opportunities via optimized using of internal and
external resources. Internalization forces firms to bind resources to a course of action,
which may restrict flexibility and be hard to retreat. Also, internalization may be required
to more effectively production. The difficulty of these decisions has worsened in recent
years stimulated by raised competitive pressures, the acceleration of technological change,
and the distribution of knowledge across various organizations and geographic markets
(Mahmoodzadeh et al, 2009).
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Therefore, companies have to consider new ways of managing organisations. The need
to respond to market changes on a daily basis and the difficulty of predicting the direction
of such changes mean that organisations must focus on their core competences and
capabilities Espino-Rodriguez, and Padron-Robaina, 2004).
In recent years, firms have been developing various kinds of strategies in order to solve
problems related to the cost, quality and speed of services. Downsizing, elimination of
some functions or processes, developing strategic relationships through franchising or
contracting out or leasing arrangements can be seen as examples for these decisions.
Outsourcing is also one of these strategies (Bolat and Y lmaz,2009)..
Now outsourcing is one of the most recent management strategies to emerge in
response to demands for more efficient ways to address organizational competitiveness. In
an age where management carefully weighs the costs and benefits of every discretionary
investment dollar, finding evidence of the results of outsourcing is critical. In particular,
research considering the context surrounding an outsourcing decision s results is likely to
be essential and useful to corporate outsourcing management (Jiang and Qureshi , 2006).
Based on transaction cost theory, when a firm has already integrated its operational
functions, the decision to outsource such functions to the market should be made if it is
necessary to create or protect firm value. By outsourcing tasks to specialist organizations,
firms may better focus on their most value-creating activities, thereby maximizing the
potential effectiveness of those activities. In addition, as outsourcing increases, costs may
decline, and investment in facilities, equipment, and manpower can be reduced (Chuan
Yang et al,2006).
Outsourcing is attractive to senior management because it improves some of the
dimensions of organizational performance. According to the survey, conducted by
Accenture and the Economist Intelligence Unit, two-thirds of the respondents all of
whom had been outsourcing a major business process for at least two years agreed that
outsourcers who know how to manage the process can enhance their company s
performance and achieve a high level of satisfaction with the results (Bolat and Y lmaz,
2009). It stems from the words out (referring to exterior) and source (origin or resource),
which, in business terms, means that certain activities are acquired from outside the
firm.The term is often used as a synonym for the decision to outsource, with expressions
such as make or buy , integration/disintegration of activities or outsourcing being
common (Bolat and Y lmaz,2009). The key objective while considering outsourcing of any
activity or process is operational enhancement leading to competitive differentiation (Ilyas
et al, 2008). Outsourcing refers to the use of an external provider of goods or services
instead of having recourse to internal resources to provide the same goods or services. As
such, outsourcing is a decision concerning the boundary of a firm and this has been a
concern since the very existence of firms (Ravi, 2008). on the subject increased and
evolved, the concept of the virtual organization was born. The theory behind the virtual
organization is that any function that is not core should be transferred to an external
specialist in that function (Heywood,2001:30).
Outsourcing can be regarded as an organizational change strategy, which can influence
considerably the organizational productivity. This influence, however, can be either
positive or negative. Implementing any organizational change has its own consequences.
Based on the kind of organizational change and the trainings provided, outsourcing can
contribute to a higher or lower productivity.
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2-Literature Review
Outsourcing is made up of two words out and sourcing . Hence, to define outsourcing
we must first be clear on the meaning of sourcing . Sourcing refers to the act of
transferring work, responsibilities and decision rights to someone else.
Outsourcing is the act of transferring the work to an external party. Whether or not to
outsource is the decision of whether to make or buy. Organizations are continuously faced
with the decision of whether to expend resources to create an asset, resource, product or
service internally or to buy it from an external party. If the organization chooses to buy, it
is engaging in outsourcing (John Power et al, 2006:2). the transferring of an internal
business function or functions, plus any associated assets, to an external supplier or service
provider who offers a defined service for a specified period of time, at an agreed but
probably qualified price (Heywood, 2001:25). outsourcing is a form of predetermined
external provision with another enterprise for the delivery of goods and/or services that
could previously have been offered in-house(Rajabzadeh et al,2008).
The outsourcing model consists of four major elements (see Fig. 1): Outsourcing
subject, outsourcing object, outsourcing partner, and outsourcing design.
Outsourcing subject is the economic institution which plans to outsource (or not). The
subject has to make the strategic outsourcing decision.
Outsourcing objects are processes or process results which might be outsourced. With
regard to the activities of a company we distinguish between (1) the company core (all
activities which are necessarily connected with a company's existence), (2) core-close
activities (directly linked with core activities), (3) core-distinct activities (supporting
activities), and (4) disposable activities (activities with general availability). From an
industrial perspective, the outsourcing object is closely linked with the degree of
manufacturing penetration.
Outsourcing partners are all possible suppliers for the activities considered for outsourcing.
In this case, supplier is a term in a wider sense. This supplier could also be an inhouse
supplier, e.g. an independent business unit within a group of "rms (Arnold,2000).
Outsourcing subject
compan
y core
outsourcing object
Outsourcing partners
supplier)
Core-close activities
Core-distinct activities
Disposable activities
degree of manufacturing
penetration
outsourcing design
Figure 1. Outsourcing model (Arnold ,2000 )
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2.1 Productivity and BSC

Today, productivity is defined as a thought perspective and an intelligent action. The
preliminary concepts of productivity are simple. The lack of a clear approach to the
analysis of productivity is a common problem. Organizations need to outsource some of
their processes in order to increase their productivity. Productivity consists of two main
elements: efficiency, and effectiveness. Efficiency has to do with identifying the
customers needs and wants. Effectiveness has to do with the taped sources. To assess
each one of these elements helps to identify the organizational productivity level. On the
other hand, efficiency sees inside an organization, while effectiveness sees outside it. Also,
performance is defined as the efficient and effective use of the sources in order to reach
conclusions (Berman, 2006: 5).
In this study, the researcher has used these two concepts (productivity and performance)
interchangeably. Different methods are used to assess performance: the Balanced Scorecard
(BSC), the Europe Foundation Quality Management, Deming Award, Maryland Quality
Award, the 6 Sigma Model, and so on. In this study, as it was said before, to assess
productivity the balanced scorecard model was used, which is clarified below. The BSC is
a framework in which an organization s activities are clarified from four different
perspectives by the use of some indices (Nils-Goran and Sjostrand, 2002:11). A good BSC
verifies the strategic logic
that is, the causal relations existing between the current
activities and the long-term success. Since organizations increasingly depend on their
unvisible capital, the BSC is becoming a significant tool in management control. in other
hand The BSC is a system that enables the organization to clarify their strategy and
translate them into action. It is a system, derived from the strategy, reflecting the business
objectives which the firm had set for itself (Punniyamoorthy and Murali , 2008). The
notion of BSC, introduced initially in the early 1992, was extremely welcomed as a new
method of management control in both public and private sectors. A BSC is a commonly
understood framework in which an organization s aspirations and achievements are
clarified.
3. Definition of the problem
Nowadays, business environments are no longer seen as stable and predictable because of
economic globalisation, market maturity, technological change, the need to respond to the
customers increasing demands and fiercer competition. This means that the new
competitive environment is more difficult to predict, which makes business management
more complex. Therefore, companies have to consider new ways of managing
organisations. The need to respond to market changes on a daily basis and the difficulty of
predicting the direction of such changes mean that organisations must focus on their core
competences and capabilities. This leads to outsourcing in those areas that can be improved
by specialist companies, in other words, turning to external sources to achieve the desired
objective Espino-Rodriguez and Padron-Robaina , 2004). At present, becoming more
responsive to taking advantage of transient opportunities on the part of organizations and
business enterprises is one of the main challenges facing them. Indeed, in order to take
advantage of such opportunities, today organizations inevitably need to create a flexible
structure and take more advantage of outsourcing. Transition from an industrialist society
to an information one, from a national economy to a global one, from centralization to deCOPY RIGHT 2011 Institute of Interdisciplinary Business Research
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centralization, and finally from a hierarchical system to a network one is indicative of great
changes taking place in today society, which requires new solutions and initiatives. One of
these solutions is outsourcing which is expanding in scope every day such that not only the
governments but also the private sectors in their countries receive it with a warm welcome.
Outsourcing as one of the most important concepts in management has to do with
centralizing and increasing the efficiency of an organization s main activities. Outsourcing
as a significant tool of organizational development and productivity improvement has been
recently more appealing to organizational managers and authorities, which has been
implemented in different ways. The question remains that has the implementation of
outsourcing, from the customer and learning perspective, for Iran Khodro Company,
Khorasan Branch, been conducive to productivity improvement?
Based on what was said above, this study aims:
Study the effect of outsourcing from the customer and learning perspective on productivity;
Study the effect of outsourcing from the customer perspective on productivity;
Offer some suggestions for productivity improvement in respect with the customer and
learning dimensions.
In this study, the hypotheses are as follows:

The Main Hypothesis: outsourcing contributes to organizational productivity improvement.
The Secondary Hypotheses:
Outsourcing from the learning and growth perspective contributes to productivity
improvement.
Outsourcing from the customer perspective contributes to productivity
improvement.
4. The Conceptual Model

In this study, the researcher has used the BSC for analyzing the dependent variable in order
to study the effect of outsourcing on the productivity of Iran Khodro Company, Khorasan
Branch. Based on the BSC model, outsourcing affects productivity from four different
perspectives, of which only two are considered in this study (fig. 2).
Learning and growth
Perspective
Productivity
Value
Customer Perspective
Chain
outsourcing
Figure 2: The Conceptual Model
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5-Methodology
This study is practical in respect with objectives and the kind of research, and survey type
in respect with methods of gathering data. Among the main methods of gathering data are
library and questionnaire. Moreover, the final related scientific achievements have been
investigated and the Company s professional staff has been interviewed with in order to
know more about the different agents involved in this process.
The population consists of all the managers and staff of Iran Khodro Company, Khorasan
Branch, who were involved before and after the outsourcing process. In order to come to
justifiable conclusions, the researcher had to choose those members of the population who
have been involved in both phases (the phase before the implementation of outsourcing and
the phase after the implementation of it). Therefore, all the managers and personnel of Iran
Khodro Company, Khorasan Branch, who were involved in the outsourcing process were
chosen to represent the whole population, out of which then a sample of people was taken
from those who were involved before and after the outsourcing process based on the
purposeful (judgmental) sampling. Interviews were conducted with the recruitment unit and
those specialists involved in the outsourcing process so that 112 people were initially
chosen. In order to secure comprehensiveness of the research and because of the limited
number of individuals involved in some of the outsourcing activities, all these people were
chosen as the sample under investigation and the questionnaires were distributed among
them. Finally, 110 questionnaires were answered and analyzed. The major outsourcing
activities regarding the automobile body, paint, and assembly are as follows:
The maintenance of equipments;
The improvement of equipments and plants;
The provision of necessary material and chemicals for use in the production lines;
The provision and production of necessary material and parts, and the installation of those parts
in the production lines; and
Sale and delivery of the final products.
This questionnaire consists of 23 close questions which are subdivided into two groups of
general and specific questions. The general questions consist of three questions which are
related to the demographical characteristics of the respondents. And the specific questions
consist of 20 questions which are related to the two perspectives of the research model. The
questionnaire s measures are based on the related literature on the issue. The respondents
views have been rated with Likert Scale. The answers range from very high , high ,
middle , low , very low . For the purpose of analysis, they have been given numbers (1),
(2), (3), (4), and (5) respectively. It is also important to note that the questionnaires were
distributed among the respondents either directly (in person) or via internet.
In this study, in order to increase the content validity of the questionnaires, the following
steps have been taken:
i.
ii.
iii.
iv.
Conducting fact-finding studies (reading the theoretical texts concerning the issue and
interviewing with managers and authorities in question);
Demanding the opinions of the academics;
Distributing the questionnaires among some of the managers and authorities in question at
an early stage and improving them based on their feedbacks for preparing the final ones;
Analyzing the questionnaires used in similar studies;
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v.
Using the opinions of the professionals involved in the outsourcing process (in order to
increase the face validity);
To assess the reliability of the questionnaires, Cronbach s alpha was used, whose value was
0.823. This value is statistically seen as desirable.
6. Data Analysis
First, the data collected from the questionnaires were analyzed in terms of the
demographical variables (age, education, organizational position).then we analyze
statistical hypothesis by Paired Samples T-Test and Paired Differences mean with SPSS
program.
The descriptive statistical analysis showed that out of the whole number of the respondents,
%35.5 were under 30, %55.5 were between 30 to 40, and %9.1 were above 40. In terms of
education, %13 of the respondents held an undergraduate degree, %83 held a graduate
degree, and %14 held a postgraduate degree and above. In terms of the organizational
status, %12.7 of the people were technicians, %50.9 were specialists, %29.1 were in
charge, and %7.3 were managers.
In table 1, the effectiveness of the implementation of the outsourcing from the learning and
growth perspective concerning productivity has been illustrated.
Table1: Resulte of Paired sample T-Test related to Secondary Hypothesis (Learning and Growth)
N
Mean
Std. Deviation
df
sig
Befor outsourcing execution
110
2.4764
0.49953
-14.700
109
0.001
Aefor outsourcing execution
110
3.7182
0.59650
Examination hypothesis:
H0:1-2=0
H1:1<2
According to table 1, the respondents mean and standard deviation values were equal to
2.4764 and 0.49953 respectively before the implementation of the outsourcing in Iran
Khodro Company, Khorasan Branch. These values were equal to 3.7182 and 0.59650
respectively after the implementation of the outsourcing in Iran Khodro Company,
Khorasan Branch. And this difference (p<0.001, df=109, t=-14.700) is statistically
significant for more than %99. Hence, it follows that the implementation of the outsourcing
from the learning and growth perspective concerning productivity has been effective and
contributed to productivity improvement.
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Indices comparison:
Table 2: Indices Comparison in Learning and Growth Perspective
no
1
2
3
4
5
6
7
8
9
10
Growth and Learning

indices
Increasing focus on the core activity of company
( Henrik Branders et al,1997)
Before execution means
After execution means
2.7000
4.0818
Paired Differences
mean
1.38182
Achieving skills that are not existing in company

( Encon Y.Y. Hui et al,2004)
Creating competition sense, especially in sections
that are inefficient
Proper access to best experiences and achieving new
skills
Accelerating to institution development by
exploitation and system penetration, processes and
developed capability of the outsourcee (supplier)
Focusing on potentiality and commitment of people
on core activities
Having access to outsourcee technology
(Harris et al,1998)
Access to exterion competences
(QUE LIN et al,2003)
Increasing the staff satisfaction with decreasing
reworking
Increasing staff efficiencies
( Bertolini et al,2004)
2.4545
3.7273
1.27273
2.2364
3.7364
1.5000
2.5636
3.6455
1.08182
2.5273
3.7000
1.17273
2.3909
3.8909
1.5000
2.4364
3.5545
1.11818
2.3818
3.6909
1.30909
2.6000
3.5273
0.92727
2.4727
3.6273
1.15455
According to the above table, which shows the learning and growth indices based on the
means calculated before and after the implementation of the outsourcing in Iran Khodro
Company, Khorasan Branch, it can be seen that the mean difference of indices 3 and 6 is
higher than that of the other ones. Therefore, it can be concluded that outsourcing from
learning and growth perspective has most likely affected this index that is, creating a
competitive atmosphere especially in areas suffering from conspicuous inefficiency, and
focusing peoples abilities and commitments on key activities. Also, it can be seen that the
lowest mean difference is that of index 9, hence, outsourcing has least likely affected this
index that is, increasing the personnel s job satisfaction level through decreasing the
amount of redundant work. Finally, it can be said that outsourcing strategy from this
perspective has affected all the indices.
In table 3, the effectiveness of the implementation of the outsourcing from the customer
perspective concerning productivity has been illustrated.
Table3: Resulte of Paired sample T-Test related to Secondary hypothesis(customer)
Befor outsourcing execution
Aefor outsourcing execution
N
110
110
Mean
2.5418
3.7182
Std. Deviation
0.42478
0.57727
t
-16.244
df
109
sig
0.001
Examination hypothesis:
H0:1-2=0
H1:1<2
According to table 3, the respondents mean and standard deviation values were equal to
2.5418 and 0.42478 respectively before the implementation of the outsourcing in Iran
Khodro Company, Khorasan Branch. These values were equal to 3.7182 and 0.57727
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respectively after the implementation of the outsourcing in Iran Khodro Company,

Khorasan Branch. And this difference (p<0.001, df=109, t=-16.244) is statistically
significant for more than %99. Hence, it follows that the implementation of the outsourcing
from the customer perspective concerning productivity has been effective and contributed
to productivity improvement.
indices comparison:
no
Table 4:institution)
indices comparison
in customer
perspective
Customer Perspective (outsourcer
Before
execution means
After execution means
indices
2.4909
3.8909
1.4000
Achieving more trade opportunities and positions for

you
Availability to various and myriad capabilities
2.5091
3.7000
1.19091
2.5273
3.7273
1.2000
Getting proper trade reputation for cooperation with

pioneer outsources
Higher quality achievement (Jennings et al,2002)
Responsibility to various requests (Encon Y.Y. Hui et
al,2004)
2.5818
3.6636
1.08182
2.7909
2.3727
3.6182
3.7545
0.82727
1.38182
17
Better customization(Rajabzadeh et al,2008)
2.5455
3.6182
1.07273
18
19
Promoting quality level of the services, given

Promoting quantative level of the services given(Young
,Suzanne,200
2.5818
2.4909
3.6182
3.7909
1.03636
1.3000
20
Facilitating complex institutional methods for you
2.5273
3.8000
1.27273
11
12
13
14
15
16
Quick introduction of new products and services to you
Paired Differences
mean
According to the above table, which shows the customer indices based on the means
calculated before and after the implementation of the outsourcing in Iran Khodro Company,
Khorasan Branch, it can be seen that the mean difference of index 11 is higher than that of
the other ones. Therefore, it can be concluded that outsourcing from the customer
perspective has most likely affected this index that is, the fast introduction of products
and services to customers. Also, it can be seen that the lowest mean difference is that of
index 15, hence, outsourcing has least likely affected this index that is, enhancing quality.
Finally, it can be said that outsourcing strategy from this perspective has affected all the
indices.
7. Conclusion
This study aimed to analyze the effect of the implementation of the value chain outsourcing
strategy on the productivity of Iran Khodro Company, Khorasan Branch. For this purpose,
the balanced scorecard model was used, taking into account the two learning and customer
perspectives. This study showed that outsourcing strategy from the learning perspective has
most likely affected such indices as creating a competitive atmosphere especially in areas
suffering from conspicuous inefficiency, and focusing peoples abilities and commitments
on key activities. Moreover, outsourcing strategy from the customer perspective has most
likely affected such indices as the fast introduction of products and services to customers.
Based on the analysis of the findings of the questionnaires and the interviews conducted
with the managers and authorities in question, the insights produced from the
implementation of the outsourcing strategy in Iran Khodro Company, Khorasan Branch,
and some problems emerging out of such a task, the researcher has suggested the following
for the managers and authorities of the company to solve such problems, implement the
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outsourcing strategy more optimally and efficiently, increase its effectiveness on the
existing indices from any perspective, and finally improve productivity:
Suggestions based on the secondary hypothesis 1:
i.
ii.
iii.
iv.
v.
vi.
vii.
Ascertaining the reasons for the redundant work done in different units, and struggling for
their elimination;
Establishing a win-win relationship between the company and the suppliers, and wining
their trust in order to having access to their modern technology;
Holding seminars and conferences on the organizational change strategies especially on
outsourcing and familiarizing the personnel with its benefits and practical limitations;
Managers and personnel engaging in identifying the other outsourcable activities in
respecting units;
Identifying the company s main capabilities and focusing on them so that the company can
create a comparative advantage over the other rival companies in the market;
Evaluating the feedbacks from all the units who have implemented the outsourcing
strategy, and prioritizing them based on their level of success in performing their tasks;
Acknowledging those units who have pioneered in the implementation of outsourcing and
played a major role in it.
Suggestions based on the secondary hypothesis 2:

i.
ii.
iii.
Quality enhancement presupposes that the company, despite having regard to the volatile
market conditions, collect feedbacks from the production lines in a way that assesses the
quality of products on a regular basis, and prevents production of poor quality products and
services;
Exploiting modern and flexible technologies in a way that one can gear products and
services to the demands of customers;
Securing the suppliers context-operation with the company makes it possible for it to rise
to fame;
Since both the secondary hypotheses have been approved, the main hypothesis is
approved too. Therefore, the implementation of the outsourcing strategy in Iran Khodro
Company, Khorasan Branch, has contributed to its productivity improvement.
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References
Arnold Ulli (2000) New dimensions of outsourcing: a combination of transaction cost
economics and the core competencies concept European Journal of Purchasing &
Supply Management 6, 23-29.
Berman, Evan M.( 2006) Performance and Productivity in Public & Nonprofit
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Bertolini , Massimo and Maurizio Bevilacqua and Marcello Braglia and Marco
Frosolini(2004)
Quality and reliability corner An analytical method for
maintenance outsourcing service selection International Journal of Quality &
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Bolat ,Tamer and Y lmaz, O zgu r (2009) The relationship between outsourcing and
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Branders Henrik and Johan Lilliecreutz and Staffan Brege (1997) Outsourcing----Success
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Chuan Yang -Bai, Bing-Eng Wu and Pei-Gi Shu and Ming-Hsien Yang (2006) On
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Espino-Rodriguez,Tomas F.and Padron-Robaina, Victor(2004) Outsourcing and its impact on
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Jennings David (2002) Strategic Sourcing: benefits, problems and a contextual model
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Nils-Goran ,Olve and Sjostrand, Anna (2002); The Balance Scorecard; Translated by Alisoleimani
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Punniyamoorthy, M. and Murali R.( 2008) Balanced score for the balanced scorecard: a
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QUE LIN, BERTRAND and FRANC OIS DUHAMEL(2003) Bringing Together
Strategic Outsourcing and Corporate Strategy: Outsourcing Motives and Risks
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Career Self-Efficacy and Glass Ceiling: Moderating Effect

of Work-Related Masculinity Values
Listed in ULRICH S
Dr. Tamer Bolat

Professor, Department of Business Administration,
Balikesir University, Balikesir, Turkey.
Dr. Oya Inci Bolat
Assistant Professor, Department of Tourism and Hotel Management,
Ta k n K l
Lecturer, Gumushane Health Sciences,
Gumushane University, Gumushane, Turkey.
Abstract
The aim of this study is to analyze the moderating effect of work-related masculinity values
on the relationship between career self-efficacy and glass ceiling in organizations.
Participants of this study were female employees from banks, pharmaceutical companies,
and medical equipment distributors in Turkey. Data were collected through 186
questionnaires. The results showed a significant interaction between career self-efficacy
and masculinity for the glass ceiling. For those individuals with high masculinity, career
self-efficacy was not related to glass ceiling, whereas for those individuals with low
masculinity, career self-efficacy was negatively related to glass ceiling. However, this
study has some limitations. The results of the study cannot be precisely generalized, as the
survey was only administered in three different sectors in Turkey. Other limitations are
related to the possibility of common method bias and the effect size of the study.
Key words: Career self-efficacy, Glass Ceiling, Masculinity
1. Introduction
Even though there is a dramatic increase in the presence of women in the workforce,
women s access to various managerial positions remains limited, and this is especially so
for senior management positions all over the world (Black & Rothman, 1998; Oakley,
2000; Vianen et al., 2002; Adams et al., 2007; Weyer, 2007). According to Adams et al. s
study (2007), women, for instance, held less than 16 percent of the corporate officer
positions in the United States (US) Fortune 500 companies in 2002 and less than 15 percent
of Canada s FP500 corporate officer positions in 2004. Females also represented less than
2 percent of all Chief Executive Officer (CEO) positions at major US corporations in 2004.
Similar to this result, Stuart s (2008) research indicated that there were only fourteen
females in the CEO position at firms in the S&P 500. This phenomenon of impeding
women s upward advancement to senior management positions in large corporations is
well documented and has been referred to as the glass ceiling effect (Morrison et al.,
1995; Vianen et al., 2002).
Cultural beliefs or schemas in a society or an organization and career self-efficacy are two
important antecedents of the glass ceiling. According to expectation states theory, there are
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shared gender stereotypes within society, and these stereotypes contain status beliefs
(Ridgeway, 2001). When status beliefs develop about a status position, inequality arises
between members of this status position. At this point, in high masculine societies, the
gender gap is larger, equal opportunity is little (Hofstede, 2001), and greater status,
worthiness, and competence are generally ascribed to men (Ridgeway, 2001). Opposite to
this, in low masculine societies, the gender gap is smaller, and equal opportunity is much
prevalent with more women in working life. In addition, women s liberation means that
men and women should take equal shares both at home and at work (Hofstede 2001). Thus,
women s perceptions of the glass ceiling can vary due to their cultural beliefs. Another
factor associated with glass ceiling is self-efficacy beliefs. Self-efficacy is defined as
individuals beliefs about their capabilities to organize and execute the courses of action
needed to manage prospective situations (Bandura, 1997, p.3). Perceived self-efficacy
determines how individuals think, feel, motivate themselves, and behave (Bandura 1999,
p.2). Thus, self-efficacy beliefs, especially about career, are very important for people s
ascent up the career ladders and their perceptions about the glass ceiling.
The aim of this study is to analyze the moderating effect of work-related masculinity values
on the relationship between career self-efficacy and glass ceiling in organizations. The
study expands the literature on glass ceiling by examining the moderating effect of
masculinity on the relationship between career self-efficacy and glass ceiling. Second, even
though the antecedents and consequences of the glass ceiling phenomenon have been well
documented in Western countries (Vianen et al., 2002), little is known about this
relationship in non-Western countries, such as Turkey. From this point of view, this study
is important for generalization of this relationship to non-Western societies.
2. Theoretical Background and Hypotheses
Three approaches may explain the glass ceiling phenomenon or gender-related inequality in
organizations: biological models, socialization models, and structural/cultural models
(Cleveland et al., 2000; Bartol, 2003; Weyer, 2007). According to biological models, there
are biological differences between men and women, such as genetic, hormonal, and
physical characteristics, and the reasons for these differences are the result of genetic
patterns evolved from adaptations to differing reproductive circumstances of early males
and females. These adaptations have emerged slowly over thousands of generations, and
these differences are stable and necessary for survival (Cleveland et al., 2000; Lueptow et
al., 2001). Socialization models focus on observed differences between men and women.
The models assume that men and women behave differently due to various social and
cognitive development processes of the individuals related with life stages, such as
schooling and work life. In this approach, observed differences are not stable, but on the
contrary, are subject to change (Cleveland et al., 2000; Bartol, 2003). According to
structural-cultural models, social structures, systems, and arrangements lead and define
gender differences due to discrepancies in status and power (Bartol, 2003). In these models,
differences exist to keep the powerful in control and the powerless without power, and
these are changeable (Cleveland et al., 2000). Socialization and structural/cultural models
have received more attention in the literature than biological models (Bartol et al., 2003)
and have been called the most accepted explanation for gender differences (Lueptow et
al., 2001).
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On the other hand, it is necessary to explain expectation states theory, which is one of the
most prominent theories within structural-cultural models (Weyer, 2007). According to
expectation states theory, there are shared gender stereotypes within society and these
stereotypes contain status beliefs (Ridgeway, 2001). Status beliefs refer to widely shared
cultural beliefs or schemas about the status positions within society, such as gender, race,
ethnicity, education, or occupation (Berger et al. 1980; Ridgeway, 2001; Weyer, 2007).
When status beliefs develop about a status position, inequality arises between members of
this status position (Ridgeway, 2001). In this context, these beliefs associate greater status,
worthiness, and competence, and more valued skills with the advantaged group than the
disadvantaged group within status position (Ridgeway, 2001). Thus, whereas agentic
attributes are generally ascribed to men, communal attributes are generally ascribed to
women (Eagly, 2001). Agentic characteristics and behaviors can be described as
assertiveness, ambition, competing for attention, and making problem-focused suggestions.
Communal characteristics might be described as speaking tentatively, supporting and
soothing others, and being helpful and sympathetic (Eagly, 2001; Weyer, 2007).
It is clearly understood that cultural beliefs or schemas about gender are an important
antecedent of the glass-ceiling phenomenon in society. These beliefs, schemas, or
expectancies constitute gender roles in a society, and individuals internalize these gender
roles through the socialization process. Besides, these beliefs or schemas vary from society
to society. At this point, the typology of Hofstede about cultural characteristics may help to
understand the differences between societies about gender roles better. One of Hofstede s
cultural dimensions is masculinity, with its opposite pole as femininity (Hofstede, 2001).
According to Hofstede (2001), in high masculine cultures, the gender gap is larger; equal
opportunity is little; a smaller portion of women are in working life; socialization occurs
through traditional gender roles; women represent themselves in the same terms as men;
and women s liberation means that women should be admitted to positions hitherto
occupied only by men. Opposite to this, in low masculine cultures, the gender gap is
smaller; there is greater equal opportunity; more women are in working life; socialization
occurs through nontraditional gender roles; women represent themselves in their own
terms; and women s liberation means that men and women should take equal shares both at
home and at work . In this respect, it could be hypothesized that masculinity values are
positively related to the glass ceiling, thus giving Hypothesis H1:
H1: Work-related masculinity values are positively related to the glass ceiling.
On the other hand, self-efficacy beliefs are also associated with the glass ceiling. Selfefficacy is defined as individuals beliefs about their capabilities to organize and execute
the courses of action needed to manage prospective situations (Bandura, 1997, p.3).
Perceived self-efficacy determines how individuals think, feel, motivate themselves, and
behave (Bandura, 1999, p.2). According to Bandura (1999), individuals with higher selfefficacy beliefs are self-confident; rely on their abilities, capabilities, and knowledge;
establish higher and incentive goals, and sustain a strong commitment to them. These
people put in more effort when they encounter difficulties. In addition, when they
experience a failure, they recover their sense of efficacy quickly. Their failures are based
on their insufficient efforts, and lack of knowledge and skills, and then they take action to
overcome these failures. In contrast, people with lower self-efficacy beliefs avoid difficult
tasks because of personal threats and lack of confidence. They have a low desire to achieve
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and a weak commitment to the goals they are determined to pursue. When faced with
difficulties, they reduce and stop their efforts. They slowly recover their sense of efficacy
after a failure or obstacle. Since they view deficient performance as lack of ability, it does
not require much failure for them to lose faith in their capabilities.
As shown in the above explanations, it is evident that people s self-efficacy perceptions are
an important determinant in how they organize, create, and manage the environment that
affects their career plans, career development, and access to managerial positions (Bandura,
1997). At this point, whereas high career self-efficacy facilitates women to reach their
career aspirations, low career self-efficacy blocks women. In this context, women have
high career self-efficacy beliefs, establish higher career goals, determine career strategies,
and put in more effort to reach those career goals (Ballout, 2009). When faced with barriers
that block their advancement to senior management positions, they put in more effort to
remove these barriers. Opposite to this, when women with low career self-efficacy
perceptions are faced with difficulties, they reduce and stop their efforts to remove the
barriers. For instance, Betz and Hackett (1981) indicated, women s lowered sense of
efficacy for traditionally male-dominated occupations constraints their occupational
development and pursuits (as in cited Bandura, 1997, p.188). In sum, career self-efficacy
beliefs are very important for women s ascent up to career ladders and for perceptions
about the glass ceiling. Therefore, we advance the following hypothesis:
H2: Career self-efficacy is negatively related to the glass ceiling.
As explained previously, in masculine societies, greater status, worthiness, and
competence, and more valued skills are generally ascribed to men more than women by the
individual him/herself and others (Ridgeway, 2001). This ascription varies due to the level
of work-related masculinity values. That is why the work-related beliefs of organization
members about gender status affect the position of women in the organization. For
instance, in higher masculine organizational cultures, members, especially decision makers
about advancements, will think that men are more suitable and competent for managerial
positions than women are. Therefore, even though women have high career self-efficacy
perceptions, they are faced with organizational barriers for advancement in the
organizational ladders. Thus, we expect to find that strong career self-efficacy has the most
negative effect on glass ceiling among individuals with low masculinity but may contribute
relatively little to the glass ceiling among individuals with high masculinity. Thus, we
hypothesize:
H3: Work-related masculinity values moderate the relationship between career selfefficacy and glass ceiling, such that the relationship is stronger at lower than at higher
levels of masculinity.
Figure 1 depicts the research model.
Work-related
masculinity
Career self-efficacy
Glass-ceiling
Figure 1: Research Model
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3. Research Method
3.1 Sample
Participants of this study were female employees from 11 bank branches, 4 pharmaceutical
companies, and 2 medical equipment distributors in Turkey. Out of the 250 questionnaires
distributed, 193 were returned, giving a response rate of 77 percent. Women employees
worked in departments, such as retail banking, commercial banking, corporate banking,
private banking, consumer banking, small business banking, wealth management, mortgage
departments for the banks; sales and marketing departments for pharmaceutical companies;
and medical equipment distributors. Seven incomplete questionnaires were excluded from
the analyses, so the final sample comprised of 186 female employees. The average age and
organizational tenure of employees were 30 and 6.1 years respectively. Fifty seven percent
were married and 72 percent had a Bachelor s degree, with the remaining employees
having a graduate or vocational degree.
3.2 Measures
This study used a self-report questionnaire. The questionnaire had four parts: (1) career
self-efficacy questions; (2) work-related masculinity values questions; (3) glass ceiling
questions; and (4) demographic information.
Career self-efficacy: We developed a 5-item perceived career self-efficacy scale
(Appendix) by utilizing Schwarzer et al. s (1999) generalized perceived self-efficacy scale.
The scale was measured on a 5-point scale, ranging from 1 = strongly disagree to 5 =
strongly agree . Higher scores are associated with perceptions of higher career selfefficacy. An exploratory factor analysis was performed for career self-efficacy in SPSS
15.0. The Kaiser Meyer Olkin measurement of sampling adequacy was .846, indicating
sufficient intercorrelations. Barlett s Test of Sphericity was significant (Chi-square =
359.537, p < .001). Exploratory factor analysis indicated that one factor with eigenvalues
was greater than 1.0, and the explained variance was 62.147 percent of the total variance.
The alpha reliability of the scale was .844.
Work-related masculinity values: We measured work-related masculinity values with 5
items (Appendix). Three of the items came from Dorfman and Howel s scale (Wu, 2008),
and we developed the last 2 items of this sub-scale. This scale was measured on a 5-point
scale, ranging from 1 = strongly disagree to 5 = strongly agree . Higher scores are
associated with a higher perception of masculinity. An exploratory factor analysis was
performed for masculinity values in SPSS 15.0. The Kaiser Meyer Olkin measurement of
sampling adequacy was .694, indicating sufficient intercorrelations. Barlett s Test of
Sphericity was significant (Chi-square = 263.688, p < .001). Exploratory factor analysis
indicated that one factor with eigenvalues was greater than 1.0, and the explained variance
was 51.211 percent of the total variance. The alpha reliability of the scale was .758.
Glass ceiling: We developed 5-item perceived glass ceiling scale (Appendix). The item In
my organization, there is no distinction between men and women for promotions to
managerial positions was positively worded and reverse coded for data consistency prior
to data analyses. This scale was measured on a 5-point scale, ranging from 1 = strongly
disagree to 5 = strongly agree . Higher scores are associated with perceptions of a higher
glass ceiling. An exploratory factor analysis was performed for the perceived glass ceiling
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in SPSS 15.0. Kaiser Meyer Olkin measurement of sampling adequacy was .864,
indicating sufficient intercorrelations. Barlett s Test of Sphericity was significant (Chisquare = 538.544, p < .001). Exploratory factor analysis indicated that one factor with
eigenvalues was greater than 1.0, and the explained variance was 69.427 percent of the
total variance. The alpha reliability of the scale was .887.
4. Results
4.1 Preliminary Analyses
Firstly, a confirmatory factory analysis was conducted to test the measurement model
(Table 1). A three-factor measurement model (career self-efficacy, work-related
masculinity values, and glass ceiling) in which all parameters were freely estimated, was
compared with two alternative models: a structural null model where relationships between
variables were fixed to zero, and a one-factor model, which specified where all items were
loaded on a single factor (Esinberger, 2009; Harvey & Martinko, 2009; Mckee-Ryan,
2009). Chi-square difference tests demonstrated that the three-factor model fit the data
better than the structural null model did ( X2 (3) = 18.94, p < .05) and the one-factor model
( X2 (3) = 743.97, p < .05) did. Besides, Harman s one-factor test, one of the most widely
used statistical techniques to detect common methods variance, was performed on 15
variables (Podsakoff et al., 2003; Carr & Kaynak, 2007). Three factors with eigenvalues
greater than 1.00 together accounted for 61.907 percent of cumulative variance; the largest
factor did not account for a majority of the variance (30 percent). Thus, no general factor
was apparent (Harvey & Martinko, 2009). The one-factor model also supported this result.
The one-factor measurement model had worse fit indices than the measurement model did
(X2 = 929.42, df = 90, p = .000, RMSEA = .225, CFI=.64, NFI = .61). Therefore, there was
not a significant presence of common method variance.
Table 1. Confirmatory factor analysis of measurement variables
Model
Three-factor measurement model
Structural null model
One-factor model
X2
185.45**
204.39**
929.42**
df
87
90
90
RMSEA
.078
.083
.225
CFI
.94
.93
.64
NFI
.90
.89
.61
X2diff
dfdiff
18.94
743.97
3**
3**
n = 186; ** p < .01
4.2 Descriptive Statistics and Intercorrelations

Table 2 presents the means, standard deviations, reliabilities, and intercorrelations for the
study variables. Career self-efficacy was significantly and positively correlated with workrelated masculinity values (r = -.240, p < .01) and glass ceiling (r = -.231, p < .01). In
addition, a significant positive correlation was observed between masculinity values and
glass ceiling (r = .215, p < .01). All the correlations between study variables were in the
expected directions.
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Table 2. Means, standard deviations, reliabilities, and intercorrelations among variables

Variables
Mean
SD
1. Marital status
2. Age
3. Tenure
4. Education
5. Career self-efficacy
6. Masculinity values
1.43
30.75
6.11
2.72
4.28
2.48
.49
5.96
5.24
.68
.62
.92
1
-.251**
-.175*
.101
-.103
-.121
1
.749**
-.246**
.099
-.071
1
-.242**
.161*
-.041
1
.170*
-.044
1
-.240**
7. Glass ceiling
2.18
.96
.049
-.002
-.056
-.090
-.231**
.215**
n = 186; * p < 0.05; ** p < 0.01 (two-tailed).
4.3 Hierarchical Regression Analysis Results

Table 3 shows the results of the hierarchical regression analysis. Models 1 2 report that the
standardized beta coefficients ( s) related with each individual step. Model 1 provided
support for Hypothesis 1, which proposed a positive relationship between work-related
masculinity values and glass ceiling. Work-related masculinity was significantly and
positively associated with glass ceiling ( = .169, t = 2.318, p < .05). Hypothesis 2
suggested a negative relationship between career self-efficacy and glass ceiling. Career
self-efficacy was significantly and negatively related to glass ceiling ( = -.191, t = -2.611,
p < .05). Model 2 provided preliminary support for Hypothesis 3. Model 2 showed that
there is a significant interaction between career self-efficacy and work-related masculinity
values for glass ceiling ( = .159, t = 2.013, p < .05) and explained variance in the model
beyond that due to main effects ( R2 = .02, p < .05). Figure 2 shows the plot of this
interaction. As presented in this figure, there was a stronger negative relationship between
career self-efficacy and glass ceiling for those with low masculinity. We performed simple
slope analyses (Aiken & West, 1991), and these analyses showed that for those individuals
with high masculinity, career self-efficacy was not related to glass ceiling ( = -.139, t = 1.807, p > .05), whereas for those individuals with low masculinity, career self-efficacy
was negatively related to glass ceiling ( = -.391, t = -3.176, p < .01). These results support
Hypothesis 3.
Table 3. Results of moderated hierarchical regression analyses with glass ceiling as the
dependent variable
Glass ceiling
Independent variables
Masculinity values
Career self-efficacy x Masculinity values
R2
Adjusted R2
F
n = 186; *p < 0.05; **p < 0.01; ***p < 0.001
Step1
-.191*
.169*
.070
8.013***
Step2
-.265**
.162*
.159*
.020
.086
6.783***
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Figure 2. Work-related masculinity values as a moderator of the relationship between

career self-efficacy and glass ceiling
5. Discussion
The results of this study present the importance of masculinity as a work-related cultural
value that affects the relationship between career self-efficacy and glass ceiling. In this
study, we found that masculinity values moderated the relationship between career selfefficacy and glass ceiling. For women with low masculinity, there was a negative
relationship between career self-efficacy and glass ceiling, whereas for women with high
masculinity, the relationship between career self-efficacy and glass ceiling was not
significant. As mentioned before, cultural beliefs or schemas about gender are among the
most important antecedents of the glass-ceiling phenomenon in society. These beliefs,
schemas, or expectancies constitute gender roles in a society, and individuals internalize
these gender roles through socialization process. At this point, women with high
masculinity think that greater status, worthiness and competence, and more valued skills
are ascribed to men than women (Ridgeway, 2001). They also believe that men are more
suitable and competent for managerial positions than women are. Thus, women with high
masculinity assume that to be a man rather than self-efficacy is generally the basic criterion
for advancement to upper managerial positions in the organization. That is why it was not
surprising to find no significant relationship between career self-efficacy and glass ceiling
for women in high masculinity.
On the other hand, in this study we found that the levels of women s perceived glass
ceilings were not high (m = 2.18). This might be because of our sample. For example,
Culpan et al (2007) described the banking industry in Turkey as female-friendly.
According to the 2010 report of The Banks Association of Turkey (2011), about 50 percent
of 178.504 employees were women in 2010. In addition, in this sector, education levels of
employees are very high (78 percent of employees had a Bachelor s degree). It is estimated
there are about 25.000 medical sales representatives in pharmaceutical companies and
medical equipment distributors in Turkey, and 95 percent of these employees had a
Bachelor s degree (Kurumsal haberler, 2010). In this context, in Burke et al. s study
(2006), which was made in a Turkish bank, women reported fewer negative attitudes
towards women, and more support, indicating higher levels of both job and career
satisfaction. Besides, Jamali et al. (2006) found no evidence of glass-ceiling type barriers
in the context of Lebanese banks. The findings of Jamali et al. (2006, p.637-638) showed
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that participants considered the cultures of their organizations as generally supportive and
permeated by positive attitudes towards women.
This study has potential limitations. First, the results of the study cannot be precisely
generalized, as the survey was administered in only two different sectors in Turkey. Future
studies, therefore, should allow for generalizations regarding this subject and must cover
different countries (Bolat & Y lmaz, 2009). Further studies should also focus on essentially
male-gendered industries. In this study, a self-report methodology was used, so another
limitation is related to the possibility of common method bias. At this point, we performed
Harman s one-factor test to detect common methods variance (Podsakoff et al., 2003).
According to the analysis, no general factor was apparent. The one-factor model also
supported this result. The one-factor measurement model had much worse fit indices than
the measurement model did. Therefore, there was no significant presence of common
method variance in this study. A third limitation is the effect size of the study. We
calculated the effect size as f2 = .022 (Aiken & West, 1991). According to Cohen (1988),
this effect size has a small effect. That is why there is a need to replicate this study in other
samples for extending generalization of our findings.
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Appendix
(1) I have the necessary job qualifications for moving up the career ladder.
(2) When I am faced with difficult problems in my career path, I can solve them if I invest
the necessary effort.
(3) I have the potential for advancement to higher position in my job.
(4) I rely on my abilities to achieve my career goals.
(5) I have the necessary skills for ascent up the career ladder.
Work-related masculinity values
(1) It is preferable to have a man in a high-level position rather than a woman.
(2) It is more important for men to have a professional career than it is for women to have a
professional career.
(3) Men usually solve problems with logical analysis; women usually solve problems with
intuition.
(4) Men are inherently more successful than women are in solving organizational problems.
(5) For married couples, it is important for a husband to have a higher-level career than his
wife.
Glass ceiling
(1) In my organization, women can usually move up to a certain organizational level, but
not higher.
(2) In my organization, there is no distinction between men and women for promotions to
managerial positions. (R)
(3) In my organization, no matter how much effort women put in, they can not usually
access senior management positions.
(4) In my organization, men are preferred for upward advancement to senior management
positions rather than women.
(5) In my organization, to be a manager is generally seen as a man s job.
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Can Intelligence improve Organizational Effectiveness?
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Listed in ULRICH S
Gholam Reza Rahimi

Public Management, PhD
Islamic Azad University, Kaleibar, Iran
Faculty of Humanity Sciences, Department of Management and Accounting
Mohammad Reza Noruzi, EMBA, PhD Student (Corresponding Author)
Policy Making in Public Sector
Islamic Azad University, Kaleibar Branch, Iran
Young Researchers Club Member, IAU, Iran
Abstract
Many company leaders scratch their heads over the difficulty of implementing technical and
process improvements. Intelligence is most widely studied in humans, but is also observed in
animals and plants. Artificial intelligence is the intelligence of machines or the simulation of
intelligence in machines. This paper aims to review the new paradigm of intelligence, called
Multiple Intelligences in the area of organization
Keywords: Organizational Effectiveness, Multiple Intelligences, Management,
Organization
1. Introduction
Numerous definitions of and hypotheses about intelligence have been proposed since before the
twentieth century, with no consensus yet reached by scholars. Within the discipline of
psychology, various approaches to human intelligence have been adopted, with the
psychometric approach being especially familiar to the general public. Influenced by his cousin
Charles Darwin, Francis Galton was the first scientist to propose a theory of general
intelligence; that intelligence is a true, biologically-based mental faculty that can be studied by
measuring a person's reaction times to cognitive tasks. Galton's research in measuring the head
sizes of British scientists and laymen led to the conclusion that head-size is unrelated to a
person's intelligence (Wikipedia, 2011). Answers to the question of what makes an
organization effective have proved elusive despite more than 20 years of intensive theorizing
and research.The work of Howard Gardner sparked a shift in our traditional thinking by
suggesting that one s multiple intelligences are as important as one s ability to reason. This
paper extended this idea to OE practice and organizations. Effectiveness is an elusive concept
that can be approached through several models, none of which inappropriate in all
circumstances.This paper aims to discuss the organizational effectiveness and multiple
intelligence notions in the area of management and organization.
2. Multiple Intelligences
There are different approaches to understanding intelligence. The psychometric view is the
most traditional one. According to this approach, there is a single intelligence, which is often
called general intelligence. Every individual is born with a certain intelligence or potential
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intelligence, which is difficult to be changed. Psychologists can assess one's intelligence (IQ)
by means of short-answer tests and other purer measures such as the time it takes to react to a
flashing light or the presence of a certain pattern of brain waves (Gardner, 2004). But the
traditional IQ tests did not satisfy the researchers, so they developed a number of alternative
theories, all of which suggest that intelligence is the result of a number of independent
abilities that uniquely contribute to human performance. These theories suggest that rather
than being fixed, unitary, and predetermined, intelligence is modifiable, multi-faceted, and
capable of development (Gardner, 1993; Sternberg, 1986; Vygotsky, 1978; Yekovich, 1994;
cited in Campbell, 2000, p. 8: Noruzi & Westover, 2010).
3. Multiple Intelligences Theory

Gardner provided a means of mapping the broad range of abilities that humans possess by
grouping their capabilities into the following eight comprehensive categories or
intelligences (Armstrong, 2009, pp.6-7):
Linguistic:
Logical-mathematical:
Spatial:
Bodily-kinesthetic:
Musical:
Interpersonal:
Intrapersonal:
Naturalist:
The theoretical framework of the present study is based on Gardner's MI theory. This theory
has a positive and expansive view towards intelligence (Campbell, 2000).
4. PASS theory
PASS theory has been offered as an alternative to general intelligence, and is based on a
description of neuropsychological processes. These authors suggested that a onedimensional model with just intelligence fails to assist researchers and clinicians who study
learning disabilities, disorders of attention, mental retardation, and interventions designed
for special populations who face those challenges. The PASS model covers four kinds of
competencies that are associated with areas of the brain(Das & Jarman, 1975, Das, 2000,
Naglieri, 2002: Noruzi & Westover, 2010).
i.
The planning processes involve decision making, problem solving, and performing
activities and requires goal setting and self-monitoring.
ii.
The attention/arousal component involves selectively attending to a particular

stimulus, ignoring distractions, and maintaining vigilance.
iii.
Simultaneous processing involves the integration of stimuli into a group and requires
the observation of relationships.
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iv.
Successive processing involves the integration of stimuli into serial order.
The planning and attention/arousal component comes from structures located in the frontal
lobe, and the simultaneous and successive processes come from structures located in the
posterior region of the cortex (Wikipedia, 2011).
5. Organizational Effectiveness
To be effective and achieve its goals, an organization must successfully respond to
environmental factors. How can the effectiveness of an organization be measured? Various
models of determining organizational effectiveness exist because organizations face different
environments, they produce different products, their organizational members are made up of
different kinds of people, and the organizations are at different stages of development. Each
model is most useful to an organization having a particular combination of these environmental
and organizational attributes. Two different underlying dimensions may be considered to
develop models of organizational effectiveness. The first is the organization s internal versus
external focus. The second dimension is the organization s emphasis on flexibility versus
control. Flexibility allows faster change, whereas control allows a firmer grasp on current
operations. When these two dimensions are drawn at right angles to each other, the first four
models of organizational effectiveness can be plotted. They are the rational goal, open system,
internal process, and human relations models. According to the rational goal model of
effectiveness, an organization is effective to the extent that it accomplishes its stated goals. For
example, the formal goals of the Toronto Blue Jays are to win their division, the American
League pennant, and the World Series. With an open system model an organization is effective
to the degree that it acquires inputs from its environment and has outputs accepted by its
environment. The University of Alberta follows this model when it is concerned about the
quality and number of students applying for admission and what jobs they receive on
graduation. The internal process model focuses on the effectiveness of the internal
transformation process. When Hamilton s Stelco Inc. examines its steel-making methods to
determine price and quality competitiveness, it is focusing on its internal processes. The human
relations model focuses on the development of the organization s personnel. Marlin Travel
sends its agents on familiarization trips to expand their knowledge of specific hotels, cruises,
and destinations (Field, 2002).According to Drucker (1974, p. 4 3, Efficiency is concerned
with doing things right. Effectiveness is doing the right things. Whereas this definition of
effectiveness is often cited, there is a lack of consensus about how to operationalize the concept
(for example, Anspach, 1991; Cameron and Whetten, 1983; Cook and Brown, 1990; Hall,
1991; Herman, 1990; Kanter and Brinkerhoff, 1981; Kraft, 1991; Quinn and Rohrbaugh, 1983;
Seashore, 1983; Seashore and Yuchtman, 1967; Spray, 1976; Steers, 1977). If effectiveness is
doing the right things, then who determines what is right, what constitutes the right things, and
how they are to be measured? The literature on organizational effectiveness contains a variety
of competing perspectives. Indeed, the very concept of effectiveness has been challenged on
the grounds that multiple constituencies often cannot agree on the factors or weights underlying
such evaluative judgments (Green & Griesingev, 1996: Noruzi & Westover, 2010).
5.1 Some steps to measure Organizational effectiveness
Although there are many ways to measure success, a number of factors consistently show
up in effectiveness metrics. These include the following:
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Achieving organizational mission

Product/service quality and value
Customer satisfaction
Capacity for innovation and creativity
Adaptation to organizational and technological change
Effective information sharing and communication
Employee attraction and retention
Effective group and individual work
Quality of work life
Developing partnerships and alliances
Operational efficiency
Image and branding (Heerwagen, 2010)
5.2 Organizational Effectiveness Solutions
An old business adage says that whatever cannot be measured cannot be managed. Yet, as
Susan Cantrell, research fellow at the Accenture Institute for Strategic Change, points out,
knowledge workers resist being measured, both because they have no history of being
measured and because they believe it might take the magic out of their work. Most highend knowledge workers tend to work on unique, one-off, highly specialized problems,
making it impossible to have one measure for all such knowledge workers. Moreover,
many knowledge workers work interdependently, making it difficult to isolate one
knowledge worker s contribution from another s. And, because the work performed is
generally unobservable, a knowledge worker could be working for months, or sometimes
even years, before an output is tangibly realized (Cantrell, 2001).
According the right management institute there are some effective solutions for enhancing
organizational effectiveness as below:
Strategy Implementation
improving an organization s ability to successfully execute strategy. This is
achieved by focusing on structure, people systems and processes, and to deliver
great customer experiences.
Strategic Workforce Alignment
Strategic Workforce Alignment is a unique interactive process for executives to
quickly assess and prioritize various workforce strategies, employee needs and
investments. Based on proven Six-Sigma methodologies, individuals use a specially
designed diagnostic process called RightNavigator to prioritize (based on
importance and satisfaction) a comprehensive set of organizational workforce
strategies.
Change Effectiveness
Right Management s Change Effectiveness offerings are designed to support
change at all levels of the organization. Our change management programs assist
executives to drive organizational change, empower managers to lead through
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change, and enable employees to navigate and respond to change appropriately

(Right Management, 2010).
There may be some circumstances in which any Effectiveness is an elusive concept that
can be approached through several models, none of which inappropriate in all
circumstances or for all organizations (Noruzi & Westover, 2010).
6. Conclusions and Implications
Managers who have a good multiple intelligences can understand the challenges face with
employees. Some challenges are shown below (Cherniss, 2001):
People need to cope with massive, rapid change.
People need to be more creative in order to drive innovation.
People need to manage huge amounts of information.
The organization needs to increase customer loyalty.
People need to be more motivated and committed.
People need to work together better.
The organization needs to make better use of the special talents available in a
diverse workforce.
The organization needs to identify potential leaders in its ranks and prepare them to
move up.
The organization needs to identify and recruit top talent.
The organization needs to make good decisions about new markets, products, and
strategic alliances.
The organization needs to prepare people for overseas assignments.
A manager with high in MI is the "executive" of organizational intelligence. These
managers must establish and encourage norms, roles, and rules for efficient application to
known tasks, but must also be sensitive and responsive to change by employing sensitivity,
problem solving and decision making strategies that allow for adaptation.
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References
Armstrong, T. (2009). Multiple intelligences in the classroom. third Edition, Alexandria,
Virginia USA,
Campbell, L. M. (2000). The unspoken dialogue: Beliefs about intelligence, students,
and instruction held by a sample of teachers familiar with the theory of multiple
intelligences. Unpublished doctoral dissertation, The Fielding Institute.
United
States.
Gardner, H. (2004). A multiplicity of intelligences: In tribute to Professor Luigi
Vigno.
Retrieved May 2, 2007
from: http://www.howardgardner.com/Papers/
documents/T-101%20A%20Multiplicity%20REVISED.pdf
Gardner, H. (1993). Multiple intelligences: The theory in practice. New York: Basic
Books.
Green, Jack C. Donald W Griesingev, (1996), Board Performance and Organizational
Effectiveness in Nonprofit Social Services Organizations, NONPROFIT
MNAGEMENT & LEADERSHIP, vol. 6, no. 4, Summer 1996
Herman, R. (ed.). Nonprofit Boards of Directors: Analysis and AppZications. New
Brunswick, N.J.: Transaction, 1989.
Noruzi, Mohammad Reza, Jonathan Westover , (2010), Social entrepreneurship, 2010
International Conference on Management technology and applications (ICmta
2010), Sep. 10-12, 2010, Singapore
Sternberg, R. J. (1986). What is intelligence? Norwood, NJ: Ablex.
Vygotsky, L. S. (1978). Mind in society: The development of higher psychological
Processes. Cambridge, MA: Harvard University Press.
Wikipedia, (2011), available online at: www.wikipedia .org
Yekovich, F. R. (1994). Current issues in research on intelligence. Educational Resources
Information Center Digest #385605
Field, Richard, (2002), on Management and Information Science, Organizational
Effectiveness, Structure, and Technology. Available at:
http://apps.business.ualberta.ca/rfield/Organizational%20Effectiveness,%20Structure,%20a
nd%20Technology.htm
Das, J.P., Kirby, J., & Jarman, R.F. (1975). "Simultaneous and successive synthesis: An
alternative model for cognitive abilities". Psychological Bulletin 82: 87 103.
doi:10.1037/h0076163.
Naglieri, J.A., & Das, J.P. (2002). "Planning, attention, simultaneous, and successive
cognitive processes as a model for assessment". School Psychology Review 19:
423 442.
Susan Cantrell, Challenges and Best Practices in Measuring High-End Knowledge Work,
Accenture Institute for Strategic Change, Art of Work, Issue Six, 15 May 2001.
Judith Heerwagen, J.H. Heerwagen & Associates / Kevin Kampschroer, Kevin V. Kelly
and Kevin M. Designing for Organizational Effectiveness Powell, U.S. General
Services
Administration.
Available
at:
http://www.wbdg.org/resources/design_orgeff.php
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A Study on Some case Studies Recounting the Rise and Fall of

mining cities and towns in Mexico
Listed in ULRICH S
Jos G. Vargas-Hernndez, M.B.A;Ph.D.

Profesor Investigador miembro del Sistema Nacional de Investigadores
Departamento de Mercadotecnia y Negocios Internacionales
Centro Universitario de Ciencias Econmico Administrativas Universidad de Guadalajara.
Perifrico Norte 799 Edificio G-306
Zapopan, Jalisco C.P. 45100; Mxico
Mohammad Reza Noruzi, EMBA, PhD Student (Corresponding Author)

Abstract
From the perspective of territorial occupancy, there are manifestations of new forms of
residential segregation patterns since the economic crisis of 1980, although it is an old
phenomenon and not exclusive of Mxico. In 1970 existed 4000 and by 1996 were more
than 100 thousand of these closed urbanizations. This paper aims to study some case
studies recounting the rise and fall of mining cities and towns in Mexico.
Keywords: Mexico, Case studies, resource based theory.
1. Introduction
The literature on structure of intra urban neighborhoods, colonies and suburban areas has
identified opposing forces, although is marked by the real estate market behavior and
population policies. Sometimes, these policies and market behavior implies the programmed
virtual displacement of poor families to get rid off them from the wealthy residential areas
(Villa y Rodrguez, 1997).
In Mexico, while the middle class is impoverishing, the higher class looks for closed
urbanizations in protected areas. Gated communities legitimize residential segregation,
increase inequality and polarization of cities. The sprawling and fragmented Mexican large
cities face the challenges to reintegrate the mosaic of segregated settlements and built
typologies, respond adequately to the mounting needs for housing and urban space and to
alleviate the still increasing housing shortage while at the same time controlling
metropolitan expansion. By reinforcing the existing segregation pattern of a rich west and
south and a poor north and east, they are the new face of today s urban sprawl in Mexico
City s metropolitan area (Potkin, 2002).
2. Insufficiency of policies
The lack of research in this topic does not allow affirming seriously regarding the
relationship between the emergence of small locations and communities and the economic
problems of the Mexican country in the last decade, although the increment of dispersed
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population in smaller rural communities and the shrinkage of larger ones, signal a worrying
situation for the provision of infrastructure and utilities. The dispersion of rural locations
and communities had increased in terms of poverty and internal exodus. The absence,
discontinuity and quality of data on natural growth does not allow to assess correctly the
future scenarios.
From the geographical perspective, the spatial concentration of these small settlements
takes place in territories that have poor accessibility and a weak functional integration to
important central locations. Considering the high supply costs of basic utilities to benefit all
the communities, and the generalized extreme poverty conditions of people living there, it
is required more productive strategies targeted toward the improvement of economic and
social conditions.
Other serious problem is the population pressure over the scarce and not renewable natural
resources such as water, forest, soil, etc., related to the food capacity. Greater concentration
of population settled in a rural community is related to diminish the cultivable land per
capita, and gradually the supplies have to be seeking in other regions. In this sense, the
greater urban concentrations are related with the environmental deterioration, as it is the
case of the central part and the Northern border line of Mexico. Some studies are aimed to
anticipate the environmental consequences of future tendencies of population distribution,
over all in fragile and high vulnerable ecosystems (Gmez de Len y Rabell Romero, 2001:
595).
Among the population policies, there has been governmental intention to achieve
population - territory equilibrium through programs for medium size cities such as public
management decentralization, health and education services decentralization and municipal
promotion. There is a territorial valorization in the strategies targeted to promote economic
growth and policies to combat territorial mechanisms that reproduce poverty such as the
program Progresa-oportunidades in Mxico.
Policies as instruments for intervention must have as objectives to sustainable exploit
territorial potentialities, reduce social exclusion and avoid natural catastrophic disasters.
The dramatic effects of natural disasters are devastating and require territorial ordering
plans to avoid human settlements in areas of high risks or to prevent possible threats. There
are not empirical evidences in the studies that the free operation of the market leads
naturally to better process of spatial redistribution of population and economic
development.
On the contrary, there is a wide consensus that the market failures can cause more troubles
than solutions. Public policies are necessary to create incentives, for the transparency of
costs, to compensate externalities, to avoid asymmetric information and imperfect
competency, etc. in order to develop programs of territorial distribution of population and
promotion of programs for sustainable economic, social and political development.
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3- Historical approaches and resource based theory

There is a strong strand of literature in the analysis of case studies recounting the rise and
fall of mining cities and towns in Mexico, depending of mining firms. Most of these studies
are historical and sociological recounts and not necessarily sustained by a specific
theoretical framework.
Most of the case studies are not historiography properly speaking but historic interpretation,
and more closely, economic history. Their limitations and the risk of misinterpretations depend
of the analyses done by the historians regarding the history of mining in Mexico and the
colonial history. The method of historic exploration used is the revision and compilation of
studies related to the topic of shrinking cities, which have been interpreted under the optic of
historic materialism, procuring to show the contradictions that characterized the mining
activities as part of the colonial exploitation scheme. With the theory development of second
contradiction of capitalism, OConnor (2001) sustains that economic growth since the
industrial revolution has been achieved at expensive costs for the autonomy of human
communities and for the natural environment
The historic materialism and the outlined Marxist revisionism set the theoretical framework to
focus the problem, without being this approach necessarily the radicalization of the point of
view and leaving an open space to the scientific reasoning of different theoretical perspectives
that can provide support to the analysis of the problem being under study. This focus to the
problem do not necessarily means to embrace
Thus, the methodological resource is deductive procuring disentangle the inherent logic in
the social and economic formation of New Spain, as it was named Mexico during the
colonial times, regarding the reproductive infrastructural scheme. The method of historic
interpretation used is the sociologic that begins understanding the inherent logic of the
studied phenomenology in general, in deductive manner, and proved through inferential
statistics in the particularities of the related phenomenon. In this form are deducted the
interactions of the laws that explain the phenomenology treated at macro-social level and
lately, are proved the outlined asseverations as a research hypothesis at micro level.
The resource based theory may offer a framework to further the study and research of these
historical and sociological recounts in the field of shrinking cities. Resource-based theory
provides the framework to explain how organizations achieve sustainable competitive
advantages. A resource is a kind of production factor which is at the firms' disposal, that is,
each one is controlled by the firm in spite of having no property right to it. Additionally,
any resource is able to create a competitive advantage if it has certain features. Resource
based theory treats enterprises as potential creators of value-added capabilities.
The theory focuses on the idea of costly-to-copy attributes of the firm as sources of
business returns and the means to achieve superior performance and competitive advantage
(Barney, 1986; Conner, 1991; Hamel and Prahalad, 1996). As Grover Grover, Teng, and
Cheon (1998:84) explain, the essence of a resource-based theory is that given resource
heterogeneity and resource immobility and satisfaction of the requirement of value,
rareness, imperfect immitability, and non substitutability, firms resources can be a source
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of sustained competitive advantage . One of the objectives of the theory is to appreciate

why competences can be perceived as a firms most valuable asset and, at the same time, to
understand how those assets can be used to improve business performance. Undervaluing
urban areas can unwittingly place the economic and social futures of countries at risk.
The historic roots of the urban profile are found in the logic of the conquerors that valuated
urban localization for the achievement of economic, political and ideological objectives.
During the colonial period in Mxico, mining was the gravitational sector of socio
economic development inserted in the primary extracting and export scheme logic under
the metropolitan- periphery colonial dependency context of the capitalism in transition
from the bilateral mercantilism to the multilateral industrial capital. The local economies of
the different Mexican regions were more obedient to transnational interests during the
different stages of development: Colonialism, economic liberalism, industrialization by
import substitution and the neoliberal regimes.
Colonization of New Spain is characterized by an abrupt demographic reduction of
indigenous population. By 1518, a year before the arrival of Corts to the Mexican land,
the indigenous population was estimated between 16 and 25 million people (Borah, 1982;
Cook y Borah, 1980; Cook y Simpson, 1948). One century later the indigenous population
were roughly one million 200 hundred thousand due to several causes such as epidemic ills
and the mortally rates resulted from the war of conquest.
The metal orientation mentality of the Spaniards is going to be the main reason of
population mobility toward the exploration of new territories to find the silver and gold
mines. The Iberian migrants had the mentality that the wealth was given by God through
the precious metals and not as the product of work. The discovery of silver deposits in
Zacatecas in 1546 is the first colonial antecedent that started the population mobilizations
to form new settlements near the mines. Other natural deposits of gold and silver were
discovered in Chihuahua and lately in San Luis Potosi. The Northern region of Mexico was
populated and a heavy transit and traffic followed between this places and the metropolis,
Mxico City.
The disarticulated internal economic structure has been more oriented toward the
exploitation of natural resources more for the transnational capital than for the welfare of
the Mexican population and its demographic development. Numerous cities, towns and
villages were founded under this logic. When the economic gravitational centers moved to
the Northern countries, following the interests of the international economic structure these
cities and towns declined and shrunk, showing that the colonial heritage is the development
of underdevelopment. Today, most of these affluent and wealthy cities are ghost towns or
have already disappeared. These are analysis of case studies in the literature of shrinking
cities, towns and villages.
The successful periods of mining exploitations are related to the population growth and the
increase of economic development of the mining cities and towns. During these successful
periods, distinct clusters emerged against which patterns of factors could be distinguished
that appeared to account for the variations in successful adoption in the firms studied. To
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explain these findings a number of theories can be initially considered, but, building on the
recent work of others cited above, resource-based theory appears to offer possible
explanations, given that the determinant factors identified are both clearly associated with
the internal contexts of the firms. Moreover, resource-based theory argues that sustained
advantage results from unique attributes of a firm developed over time therefore it could
explain why some firms had evolved to become more successful than others in this context.
Vargas-Hernndez (2007) analyzes the shrinkage of mining towns in Mexico which are going
through a shrinking and declining processes after having an enormous impact in economic
development. This shrinking process of the mining towns posits a trap and a dilemma in
economic development: From being ghost towns, at the turning point the inhabitants are
mobilizing to defend historical and cultural heritage and environmental survival from the
mining companies and to find alternative activities such as cultural tourism which may brings
the needed resources.
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References
Barney, J. (1986). Strategic factor markets: Expectations, luck and business strategy,
Management Science,32, 1231-1241.
Benko, G. y A. Lipiez (eds) (2000), La richesse des rgions. La nouvelle gographie socioconomique, Paris, PUF.
Borah, Woodrow (1982). El siglo de la depresin en Nueva Espaa. Ed. ERA. Mxico.
Castells, M. (2002), La ciudad en la nueva economa, Tareas, No. 110, enero-abril, pginas
6-21.
CONAPO (Consejo Nacional de Poblacin) (1999), La situacin demogrfica en Mxico,
1999, Mxico, D.F., Mxico, CONAPO.
Conner, K. (1991). A historical comparison of resource-based theory and five schools of
thought within industrial organization economics: Do we have a new theory of the
firm?, Journal of Management, 17(1), 121-154.
Cook, Sherburne F. y Borah, Woodrow (1980). Ensayos sobre historia de la poblacin
(Mxico y el Caribe). T. II. Ed. Siglo XXI. Coleccin Nuestra Amrica No. 29.Mxico.
Cook, Sherburne F. y Borah, Woodrow (1980). Ensayos sobre historia de la poblacin
(Mxico y California). T. III. Ed. Siglo XXI. Coleccin Nuestra Amrica No.
29.Mxico.
Gmez de Len y Rabell Romero (coordinadores (2001) La poblacin de Mxico.
Tendencias y perspectives demogrficas hacia el Siglo XXI. Mxico, D.F.: Consejo
Nacional de Poblacin-Fondo de Cultura Econmica.
Hamel, G. and Prahalad, C. (1996). Competing for the Future, Harvard Business School
Press, Paperback edition, Boston (Massachusetts).
OConnor, James (2001). Causas Naturales. Ensayo de marxismo ecolgico. Mxico, Siglo
XXI Editores.
Potkin, Kevin (2002). The incredibly shrinking cities. Convinced the world's urban
populations are growing beyond control? Not so fast...The Republic Vol. ,No. 50.
Octubre 31.
Vargas-Hernndez, Jos G. (200/). Economic and environmental shrinkage of Atenquique,
Research in progress. Instituto tecnolgico de Cd. Guzmn, Jalisco.
Vargas-Hernndez, Jos G. (2006). Trapped development: the shrinkage of mining town
Mexico. The Cerro de San Pedro Case. Working Paper. Instituto Tecnolgico de Cd.
Guzmn
Villa, Miguel y J. Rodrguez (1997). Dinmica sociodemogrfica de las metrpolis
Latinoamericanas durante la segunda mitad del siglo XX, Notas de Poblacin, Ao
XXV, n 65, Santiago, Centro Latinoamericano de Demografa, Celade.
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TRENDS IN TOTAL FACTOR PRODUCTIVITY IN PAKISTAN

MANUFACTURING SECTOR
Listed in ULRICH S
KHALIL AHMAD
Assistant Professor of Economics at Economics Department,
University of the Punjab, Quaid-i-Azam Campus, Lahore
MUHAMMAD ILYAS
Lecturer in Economics, at Economics Department, Superior University, Lahore.
Abstract
Total factor productivity (TFP), an important source of manufacturing growth remained
neglected by researchers and policy makers in Pakistan. Very few studies found in the
Pakistani context have tended to overstate TFP growth figures because of their inability to
adjust TFP growth figures
for variation in capacity utilization, hours worked and
improvement in labour productivity as a result of increased level of education and training.
The present study is free from this shortcoming. The results of present study show that
manufacturing TFP has grown in Pakistan at an annual average of 1.25 percent which
makes a contribution of 19 percent to value added growth of manufacturing sector. The
study recommends that Federal Bureau of Statistics should estimate and publish TFP
growth figures on regular basis along with other socio-economic variables. Further,
government should also take appropriate measures to promote TFP growth in Pakistan.
Keywords: Trends , Total Factor Productivity , Pakistan Manufacturing Sector
1. Introduction
The manufacturing sector is a leading sector of Pakistan economy. In the year 2008-09
this sector contributed 18.4 percent to real GDP; made a negative contribution of 30
percent to real GDP growth; absorbed 13 percent of the employed labour force;1
contributed 83 percent to total value of exports.2 It also supplies inputs like fertilizers,
pesticides, farm machinery etc. to agriculture sector; absorbs agriculture produce as inputs
such as wheat, rice, cotton, oilseeds and pulses etc. Thus, growth of manufacturing sector
boosts economic growth through its backward and forward linkage with agriculture and
services sectors.
However, growth of manufacturing sector has been very volatile. Table-1 presents
decadal growth rates of manufacturing value-added along with its share in gross domestic
product (GDP). This sector observed the highest growth rate during 1960s and in the recent
decade. Its growth rate remained very low during 1970s and 1990s. This sector has
increased its share in GDP from 9 percent during 19950s to 18 percent during the recent
decade.
1
2
For the fiscal year 2007-08.

For further details see Pakistan Economic Survey 2008-09.
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Table 1: Growth Rates of Agriculture Sector (Decadal Averages)
(Percent)
Period
1950s
1960s
1970s
1980s
1990s
2001-2009
Growth Rate
Share in GDP
7.73
9.90
5.50
8.20
4.80
9.82
8.8
12.4
14.0
16.8
17.7
17.6
Source: Pakistan (1999), and Pakistan (2009).
One of the reasons for wide fluctuations in manufacturing value added growth is total
factor productivity (TFP). TFP can be defined as any growth unaccounted for by the
growth of physical factors of production. It captures the impact of a variety of factors on
output growth. These factors include: Technical change, improvements in the efficiency as
well as learning capacity of the labour force as a result of human capital accumulation,
structural transformation, change in state policy, organizational and institutional
improvements such as improved financial control mechanisms and so on (Cypher and Dietz
2004). TFP remained neglected in Pakistan by researchers and policy makers. Very few
studies have tried to estimate TFP growth in Pakistan. However, these studies have suffered
from miscalculation of factor inputs and hence TFP. In this study an attempt is made to
accurately measure TFP by considering the true measure of factor inputs. Improvement in
manufacturing TFP is expected to lead to improve overall productivity of the economy.
The rest of the paper is organized as below: In section II, a review of existing studies on
manufacturing TFP growth is presented. Section III presents the methodologies and sources
of data used for the estimation of TFP. In section IV measurement of variables is discussed.
Estimation and interpretation of results is presented in section V. Finally, section VI
contains conclusion and policy implications and recommendations.
2. Literature Review
Cororaton et al. (1995) used growth accounting and stochastic frontier production
function approaches to estimate TFP for 25 large scale manufacturing industries of
Philippines over the period 1956-92. The results of growth accounting exercise revealed
that the number of industries with negative TFP increased through time. Starting from two
industries with negative TFP during the 1961-65 period the number of industries with
contracting TFP growth increased to 16 during 1991-92. The major deterioration in TFP
growth took place during the second half of 1980s and early 1990s. The same declining
productivity results were obtained through the stochastic frontier approach using translog
production function specification. The number of industries with negative or contracting
TFP growth rates increased from 3 in the period 1956-70 to 9 and 10 respectively during
the periods 1971-80 and 1981-92. The TFP estimates from two alternative approaches were
more or less similar during the two sub-periods 1956-70 and 1971-80 with correlation
coefficients of 0.63 and 0.54. However, during the last period i.e. 1981-92 the estimates of
TFP using growth accounting approach and stochastic frontier approach differed
significantly with a much lower correlation coefficient of only 0.26.
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Kumar (2003) employed integrated growth accounting approach covering the

period 1969-95 for making inter-temporal and inter-state comparisons of TFP in the Indian
manufacturing sector. The results showed that TFP growth in the Indian manufacturing
sector has been significant but slow at the rate of 1.35 per cent per annum during the period
under study. The study further revealed that industrially developed states experienced
either a decline or marginal growth in TFP during the whole study period.
Kemal et al (2002) employed growth accounting technique to estimate TFP in the
form of Solow residual for GDP, agriculture and manufacturing sectors of Pakistan over
the period 1964-65 to 2000-01. As per their results, the growth rate of TFP in the
manufacturing sector was 3.21 percent. The contribution of TFP to manufacturing value
added growth was 50.27 percent.
Wizarat (2004) used time series data for the period 1955-91 to compute TFP and
labour productivity, (LP), for large scale manufacturing sector of Pakistan. She constructed
index numbers for TFP and LP using neo-classical growth accounting technique. Both the
indices i.e. TFP and LP, showed continuous increase from the mid 1950s to the mid 1960s
and showed the decline thereafter. She also compared LP and TFP estimates for Pakistan
with similar estimates for some developed countries3. The comparison revealed that
Pakistan s large-scale manufacturing sector diverged from the manufacturing sector of the
Europe, at an alarming rate.
These studies relating to Pakistan have suffered from the problem of miscalculation
of TFP because these studies have used incorrect measure of factor inputs. The present
study is free from this drawback because of two reasons: First, it has adjusted the capital
input for variation in its utilization due to business fluctuations. Second, it has adjusted the
labour input for variation in hours worked and improvement in the education and skill level
of the employed labour force.
3. Methodology and Sources of Data
3.1 Methodology
Since Solow (1956), the growth accounting method has been widely used for the
calculation of TFP. This method is very simple and useful in decomposing value added growth into
growth resulting from inputs growth and from TFP growth. In this study growth accounting method
has been used for the estimation of total factor productivity of manufacturing sector of Pakistan.
The works of Kendrick (1961) and Denison (1962) made this method very popular among growth
economists. This method estimates TFP as a residual. The starting point of this approach is a
standard Neo-classical production function of the form:
Y=F(K, L, t)..................................................................................................................................... 1
Where Y represents value added in manufacturing, K the capital input, L the labour input, and, t
stands for time.
Differentiating equation 1 with respect to time, dividing it by Y, and rearranging it we get:
dY / dt ( F / K)K dK / dt ( F / L)L dL/ dt

Y
Y
K
Y
L
F/ t
Y ..................................................... 2
In equation 2 the term ( F/ t)/Y represents the proportional rate of shift of the production function.
It is also known as technical change or TFP. The terms ( F/ L)L/Y and ( F/ K)K/Y are the factor
shares of labour and capital, respectively. Denoting growth rates of output, capital, and labour by
small letters y, k, and l, and the shares of K and L by SK and SL respectively, equation 2 can be
written as:
3
These countries were U.K., Germany and the Europe as a region.
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y = SKk + SLl + TFPG ........................................................................................................ 3

Where TFPG is growth rate of TFP. Equation 3 can be solved for TFPG as:
TFPG = y SKk - SLl .......................................................................................................... 4
Using data for growth rates of Y, K, and L, and for factor shares of K and L, equation 4
can be used to calculate TFPG. The contribution of K and L can also be found by multiplying their
growth rates by their respective factor shares.
In the calculation of TFP it is generally assumed that the production function is a wellbehaved Neo-classical production function that allows decomposition of sources of growth. In
addition, it is assumed that Perfect competition, profit maximization and constant returns to scale
prevail.
Under the above assumptions, equation 4 can alternatively be written as:
TFPG = y
k (1- )l .................................................................................................... 5
Equation 5 calculates TFPG as a residual. It proxies as a catch-all variable and represents that
part of output growth which cannot be explained by the growth of factor inputs. It is, therefore, a
measure of our ignorance (Chen 1997). It also measures the shift in the production function. The
shift of the production function may be caused by a number of factors such as: technical
innovation, organizational and institutional change, shifts in the societal attitude, fluctuations in
demand, changes in factor shares, omitted variables and measurement errors (Basudeb and Bari
2000: 7).
3.2 Data Sources

To estimate growth of TFP in the manufacturing sector of Pakistan, time series data about value
added, labour and capital inputs are required. The sample for study spans from 1965-66 to 2008-09.
National income accounts do not contain data for capital stock. Therefore, gross fixed capital
formation (GFCF) was used to estimate capital stock through perpetual inventory method.4 The
required data about value added, labour force and GFCF for the years from 1963-64 to 1995-96
were taken from 50 Years of Pakistan in Statistics, Volume I Summary, FBS, Statistics Division,
Government of Pakistan, (GOP) Islamabad. The required data for the remaining period were taken
from Pakistan Economic Survey 2009. The value added and capital stock, are measured in millions
of Rupees at constant factor costs of 1980-81.5 The labour input is measured in millions of hours
worked.
4. Measurement of Variables
Traditionally, the capital input is measured in net terms i.e. net of depreciation. The crude measure
of TFP includes the effect of technical efficiency as well as the effect of improved (intensive) use of
inputs. In order to avoid the errors of measurement in TFP estimates, the capital stock has been
adjusted for variation in its utilization. One way of adjusting the TFP estimates for business
fluctuations is the Wharton Method.6 In this method, potential output is estimated by fitting a linear
trend to capital output ratio (K/Y) and then the ratio of actual output to potential output is used as
capacity utilization rate for adjusting the capital stock7.
Traditional estimates of TFP use the labour input as number of workers employed in the
production process. However, over time the average hours worked may change as a result of
business fluctuations and/or as a result of changes in the behaviour of workers regarding their
4
For the estimation of capital stock, please see: Ahmad et al (2008).

The year 1980-81 is a normal year and has been used as a base in national income accounts of Pakistan.
Further, this year lies almost in the middle of our sample period. These are very reasons that we have used
this year as a base for converting data series to a common base.
6
The other methods are the Production Function method, Proxies for capacity utilization rate, and short-run
adjustment. The details of these methods are given in Oguchi (2004).
7
For details of this method please see: Ahmad et al (2008).
5
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choice between leisure and work hours. Besides, the level of education and training acquired by
workers also improves over time. If TFP figures are estimated without making allowance for
variations in the hours worked and improvement in the quality of labour as a result of education and
training, the TFP estimates are likely to be overstated. In order to avoid this bias in TFP estimates
the labour input has been measured in terms of hours worked using data from various issues of
Labour Force Survey. Further, the labour input has been adjusted for variation in average schooling
years (including the university education). The details of adjustment of the labour input for
variations in the hours worked and for average schooling years8 are given in Ahmad et al (2008).
5. Interpretation of Results
Table-2 presents the growth rates of value added in the manufacturing sector of
Pakistan, adjusted inputs and TFP based on adjusted Solow residual method for the period
1965 to 2005. Following equation was used to calculate estimates of TFP growth for the
manufacturing sector of Pakistan.
0.54
0.46 ............................................................................... 6
TFPGt
Vt
Kt
Lt
Where TFPG t =Growth rate of adjusted TFP
Vt
Kt
=Growth rate of value added

= Growth rate of capital stock adjusted for business fluctuations
= Growth rate of labour force adjusted for education and work hours
Lt
While the value added in the manufacturing sector grew at an average rate of 6.61
percent over the sample period, however, the growth performance widely fluctuated
ranging from 9.50 percent during the recent half decade of 2001-05 to the lowest of 3.93
percent during 1990s. The manufacturing sector performed well during 1960s, 1980s and
the recent half decade 2001-05. It showed poor performance during 1970s and 1990s. The
capital input grew at an average rate of 3.04 percent. It exhibited highest growth of 4.63
percent during the second half of 1960s and the lowest growth of 1.84 percent during 200105. The growth rate of capital input has declined over time from 4.63 percent to 1.84
percent. The labour input which grew at an average rate of 2.15 percent has also exhibited
wider fluctuations. It started with a growth rate of 2.14 percent in the second half of 1960s;
fell to 1.94 percent and 1.33 percent during 1970s and 1980s, respectively. It recovered to
1.87 percent in 1990s. During the period 2001-05 its growth peaked to 4.77 percent. TFP
has grown at an average rate of 1.42 percent for the whole sample period. It has greatly
fluctuated over time. Its peak rate of growth of 4.13 percent was observed during 1980s and
its trough rate of minus 0.29 percent was observed during 1990s.
During 1960s, government adopted a policy of imports liberalization and exports
promotion
through
a
number
of
schemes
including
Export
Bonus
Scheme, tax rebates, tax exemption, Export Performance Licensing, and Pay-As-You-Earn
Schemes etc.9 In addition, accelerated depreciation allowances were granted. Moreover,
8
The data regarding hours worked and education levels were missing for some years because Labour Force
Survey was not conducted in those years. The missing values were generated through interpolation and
extrapolation.
9
Kemal et al. (2002).
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terms of trade were set against the agriculture and cotton growers and in favour of textile
industry. These policies helped in raising manufacturing TFP to 1.34 percent per annum.
In 1970s, policies of large scale nationalization without proper homework were
implemented. It was followed by exclusive reservation of a number of sectors such as
cement, fertilizer, oil refining, engineering, and chemicals for the public sector. The policy
of disinvesting profitable public sector units was discontinued. Restrictions on the
industrial production in the form of price fixation under the Profiteering and Hoarding Act
were imposed. Rupee was overly devalued. These policies acted to turn the manufacturing
TFP into minus 0.28 percent.
In 1980s market-oriented policies were implemented. Import policy was liberalized.
Tariff structure was rationalized. Par value of rupee was brought closer to its equilibrium
value and it was made convertible on capital account. Investment licensing was abolished
and prices were decontrolled. Owing to these market-friendly policies manufacturing TFP
accelerated to 4.13 percent a rate ever higher in the manufacturing history of Pakistan.
Political instability, cotton crop failure, worsening of law and order situation in the
major growth poles of the country, inadequate power supply, emergence of significant
infrastructure, bottlenecks in transport, power and other sectors along with reduced
industrial investment were among the prominent factors responsible for dismal
performance of large scale manufacturing sector during 1990s (Kemal et al. 2002). Foreign
aid cut-off further aggravated the situation.
Trade liberalization, privatization of public enterprises, strict financial discipline,
continuity of policies, and political stability are the hallmark of 2001-08. Moreover,
accommodative monetary policy, continuously improving macroeconomic environment, a
stable exchange rate, strengthening of domestic demand, and continued global economic
expansion have helped in achieving high growth rate of 1.43 percent of manufacturing
TFP.
Table-2: Trends in Manufacturing Value Added, Inputs and Adjusted TFP Growth
Rates (Solow Residual)
Source of Growth
1965-66 to 1970-71 to
1980-81 to
1990-91 to
2000-01 to
1965-66 to
1969-70
1979-80
1989-90
1999-2000
2007-08
2007-08
Value added
8.11
5.50
8.21
3.93
8.65
6.66
Capital
4.63
3.84
2.76
2.34
3.18
3.21
Labour
2.14
1.94
1.33
1.87
4.05
2.20
TFP
1.34
-0.28
4.13
-0.29
1.43
1.25
Contribution to Value Added Growth by:
Capital
57.09
69.74
33.59
59.54
36.76
48.20
Labour
26.39
35.29
16.17
47.74
46.82
33.03
TFP
16.52
-5.03
50.24
-7.28
16.53
18.77
Source: Author s estimates from the data taken from 50 Years of Pakistan in Statistics and Pakistan
Economic Survey 2009, Government of Pakistan.
Table-2 reveals that value added in the manufacturing sector of Pakistan has been
greatly contributed by the labour and capital inputs. TFP has contributed only about 19
percent of value added growth. The contribution of capital input has widely varied over
time. It has substantially reduced its contribution from over 57 percent in the latter half of
1960s to almost 37 percent in 2001-08. On the other hand, contribution of labour input to
value added growth has substantially increased over time. The labour input has contributed
almost 33 percent of the value added growth. It has largely increased its contribution from
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the very low of 26.39 percent in the second half of 1960s to the very high of 47 percent in
2001-08. The contribution of TFP to value added growth had shown an oscillatory pattern
It started from 16.52 percent in the second half of 1960s; deteriorated to minus 5 percent
in 1970s; sharply improved to over 50 percent in 1980s; fell headlong to minus 7.28
percent in 1990s and again rose to 16.53 percent in 2001-08. The TFP has been pro-cyclical
i.e. rising during expansion and falling during depression. It has been mentioned in the
previous paragraphs that 1960s, 1980s and 2001-08 have been the high growth decades and
1970s and 1990s have been the low growth decades. Thus the fluctuating pattern of TFP is
consistent with fluctuating pattern of value added growth of manufacturing.
Figure 1: Growth Rates of Value Added, Inputs And TFP in the Manufaturing sector
Source: Author s estimates using data taken from 50 Years of Pakistan in Statistics and Pakistan Economic
Survey 2009, Government of Pakistan.
A look at Figure-1 reveals that growth rates of value added and of TFP are closely
associated to each other. The growth rates of value added and capital input show smaller
fluctuations. On the other hand, the growth rates of TFP and labour input show relatively
larger fluctuations. It is observed that growth rates of value added and TFP followed
identical pattern throughout the study period. It means that when TFP grows value added
growth also gets momentum and when TFP lowers so does value added growth.
Specifically, during the latter half of 1960s, 1.34 percent growth of TFP was followed by
the relatively higher growth rate of 8.41 percent of manufacturing value added. In 1970s
when TFP growth dipped to minus 0.28 percent it pulled down the growth of value added
to 5.50 percent i.e. a much lower than its growth in the preceding period. However, in
1980s when TFP significantly improved to 4.13 percent over the previous decade, the value
added growth jumped up and reached 8.21 percent. In 1990s when TFP growth again
dipped to minus 0.29 percent, as a result of this the value added growth dropped down and
fell to a very low rate of 3.93 percent. During 2001-08 when TFP growth reached a
reasonably high growth rate of 1.43 percent, the manufacturing value added growth
recorded its peak rate of 8.65 percent
the highest ever in the history of manufacturing
sector of Pakistan. The nutshell of this discussion is that TFP and value added growth rates
are highly correlated.
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6. Conclusion and Policy Implications

TFP an important source of manufacturing growth has, unfortunately been neglected in
Pakistan by researchers and policy makers. Very few studies have been undertaken so far.
Unluckily, these studies have produced inaccurate figures of manufacturing TFP in Pakistan
because these studies have ignored variation in the utilization of productive capacity, on one
hand, and variation in the hours worked and improvement in the skills of workers resulting
from increased level of education and training, on the other.
The present study is free from these shortcomings. It has properly adjusted the capital stock for
variation in capacity utilization and labour inputs for variation in work hours and improvement
in skills of labour force as a result of increased education and training.
The average growth rate of manufacturing TFP in Pakistan remained at 1.4 percent during the
period 1965-2005. This growth rate widely fluctuated ranging from the lowest of minus 0.3
percent to 2.9 percent.
The capital input has contributed about 46 percent to manufacturing value added growth. The
labour input contributed 33 percent. TFP contributed only 21 percent of manufacturing value
added growth. The contribution of TFP to value added growth of manufacturing sector of
Pakistan has heavily fluctuated, ranging from minus 7 percent to 50 percent.
In Pakistan, where saving and investment rates are very low the need for ever rising TFP
growth can hardly be exaggerated. However, unluckily this area could not catch the attention of
authorities. It is strongly recommended that Federal Bureau of Statistics should estimate TFP
on yearly basis and these estimates be published along with other economic data. Apart from
the government must devise appropriate policies to promote growth of manufacturing TFP in
the country.
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References
Ahmad, K., M. Aslam Ch. and M. Ilyas (2008), Trends in Total Factor Productivity in
Pakistan Agriculture Sector, Pakistan Economic and Social Review, Vol. 46, No. 2
pp. 117-132.
Basudeb, G. and Bari, F. (2000), Sources of Growth in South Asian Countries, A paper
prepared for presentation at the UNU/WIDER Development Conference on Growth
and Poverty, Helsinki 25-26, May, 2001.
Chen, Edward K. Y., (1997), Total Factor Productivity Debate, Asian Pacific Economic
Literature, Vol. 11, No. 1, pp 18-38.
Cororaton, C. B., Endriga, B., Omedo, D., and Chua, C. (1995), Total Factor Productivity of
Philippine Manufacturing Industries, Journal of Philippine Development, Number 40,
Volume XXII, No. 2, Second Semester 1995.
Cypher, J. M. and Dietz, J. M. (2004), The Process of Economic Development, 2nd ed.
Routledge Taylor & Francis Group, London and New York.
Denison, E. (1962), The Sources of Economic Growth in the United States and the
Alternatives Before Us, Committee for Economic Development, New York.
Kemal, A. R., Din, Musleh ud, and Qadir, Usman (2002), Global Research Project: Pakistan
Country Report, Pakistan Institute of Development Economics, Quaid-i-Azam
University Campus, Islamabad.
Kendrick, J. W., (1961), Productivity Trends in the United States, Princeton, N. J., Princeton
University Press for National Bureau of Economic Research.
Kumar, S. (2003), Inter-temporal and Inter-State Comparisons of Total Factor Productivity in
Indian Manufacturing Sector: An Integrated Growth Accounting Approach, Artha
Vijnana (Journal of the Gokhale Institute of Politics and Economics) Poona, India,
Vol. XLV, Nos. 3-4, September-December pp. 161-184.
Oguchi, Noriyoshi (2004), Total Factor Productivity Growth: Survey Report, Asian
Productivity Organization, 1-2-10 Hirakawacho, Chiyoda-ku, Tokyo 102-0093,
Japan.
Pakistan, (1999), 50 Years of Pakistan in Statistics, Volume I
Statistics, Statistics Division, Islamabad, June.
Summary, Federal Bureau of
Pakistan, (2009), Pakistan Economic Survey, Finance Division, Economic Advisor s Wing,
Islamabad.
Solow, R., (1956), A contribution to the theory of economic growth, Quarterly Journal of
Economics 70: 65-94.
Wizarat, Shahida, (2004), Industrial Productivity Growth in Pakistan: Convergence or
Divergence? in Chaudhary & Ahmed ed. Globalization: WTO, Trade and Economic
Liberalization in Pakistan, Ferozsons (pvt.) Ltd., pp. 210-221.
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A Qualitative Survey on Potential new Technology
growth markets
VOL 2, N O 10
Listed in ULRICH S
M. Khalid Siddiq
Pakistan Technology Board
Ministry of Science & Technology
Rashid Nadeem
Pakistan Technology Board
Ministry of Science & Technology, Islamabad
Badar Sultan Minhas
PTB-MoST, Islamabad
Abstract
Study is intended to explore the potential in Pakistani Market for MNCs and government to
invest in which sector in term of technology. These sectors have been identified for planning
purposes and may be helpful both for public and private sector in making decisions about
investment in different sectors which are expected to be embraced open heartedly. It may
overcome certain water related issues in the country also. It is exploratory study with blend
of qualitative study using Delphi features to an extent. Target population was experts from
various fields with great experience in their fields. Data analysis was done by using equations
formulated to calculate sector receiving highest numeric value after adding all the highest
score assigned by experts to importance, realization time, expertise, Pakistan s competence
level in their view. Experts opinion were generalized to reduce the number of fields to
generalized areas which need attention. Areas after being generalized were rated according to
the two equations outcome value for each response and then adding up the whole into one.
The methodology was copied from a Japanese study of similar type and nature.After being
rated according to the index generated by using two equations the two areas on 1st and 2nd
number were Agriculture and Energy which are yet to be exploited in regard to technology
potent markets. These are very high priority areas with having sub sectors related to conflict
resolution of different sort still prevailing and needing attention from Public Sector.
Companies currently seeking to invest and exploit the potential in Pakistani markets in the
long run may use the findings to decide about investing in which area generally and talking
precisely in which sub sector. Government may also use it to decide about which MNCs be
allowed to invest due to having greater socio-economic impact on the people of Pakistan in
the long run. The sectors are very general in nature where as potential technologies are
supposed to be very specific pertaining to sub-sectors. So, general technology areas have
been identified and prioritized which have potential for new technologies to be adopted.
Despites the outcomes in accordance with scientific principals, the data has to be large to
have a deeper analysis in specific outcomes, greater degree of authenticity, and validity.
Keywords: Economic Technology, New Tech-Markets, Prioritization of Areas, Partial
Delphi.
1. Introduction
Developing countries are huge markets for multinational corporations/companies (MNC);
although the questions of internalization and licensing at arm s length are yet to be answered
while making a decision to go global [19]; especially Pakistan has been the focus of many
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industries due to its peculiar geo-political existence. Even in developed countries like all
those in EU international organizations are looking for future prospects in technology [13].
This is said to increase the networking importance in Pakistan further more companies in
Pakistan used networking for internationalization [6]. Study shows more interest of foreign
entrepreneurs from investment perspective whose antecedents, perhaps, are distance,
education, security, flexibility etc. Hopes are around that people are in need of some change
in different areas in the country. Experts from various parts of the country were sent an open
ended questionnaire to reflect on the coming hazards and about the areas in which Pakistani
government needs to invest in future and possibly investing in near future to overcome the
issues in currency.
Knowledge management is observed to appreciate technology usage resulting in
specialization tendency to be limited to an extent of a user or more but not expert as it has
been studied in customer relationship performance (Jayachandran et. al., 2005), although
technology is depreciated by calling it a force of oppression, exploitation and destruction
[15]. However, perfectionists approach varies sensibly for they innovate after perfecting a
tool or skill. Perfectionists may also use intelligent systems for efficient disposal in achieving
certain objectives. This is observed in regions where science and technology is given more
importance and thus research and development is considered as core of education system.
Yet limitations from nature do exist for creating equilibrium in the universe. Petrol resource
is abundance at one region, gas is at other, agriculture is used by yet another. Technology is
changing exponentially [14] which is very hard to manage. So, specialization in one
technology which is demanded globally or some is a strategy which is focused on
organizational level more than the country level.
Specializing in one profession or field/area has pros and cons which work in both the
direction to motivate and demoralize to be a Master of a trade/area. Mastering is commonly
used terminology which in research has been replaced by specialization: an often emphasized
term in studies for increasing the organizational performance. This specialization exists on
macro level also as we observe different regions having different products to offer as core
business mechanism. A country engaged in perfection for being independent in all respects is
yet to be found. Other possibility is to consume whatever is self produced. Personal level
commitment in this regard is obvious though not as it is suppose to be however nations for
their survival need diverse goods which are often imported from other parts of the global
village.
Investments in countries are dependent on the sources of the countries which may be utilized
by entrepreneurs to generate social and personal wealth in addition to supporting the people
by providing them the needful goods at their doorsteps. Macro-Markets trends are indicated
by what the country have in abundance for other parts of the worlds. Every one may offer a
product of importance to others. What the product may be depends upon richness of
resources as well as intellectual capabilities to frame them in relevance to social needs and
then positioning is required to market the product. If some one doesn t realize about the
qualities then others may identify the intangible potentials, hidden in depth of tangible
personas. Identifying the core characteristics of ones strategic economy very much relevant
to social infrastructure contributes towards harmony in society.
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2. Research Background
Product development and positioning strategies include steps to identify the skills possessed
by the workforce which then be utilized to innovate or generate goods needed by the society.
However, IT based globalization has resulted in borderless world with a focus of each
country on specialization in innovative and competitively advantageous product which it can
offer to global market [12]. Investing in HR specialization of all the strategies leads to issues
of lack of financial resources, total quality management, trained workforce, lack of
competitive advantage etc. Investing in such products development then can only be used to
fulfill the local or regional demand due to strong networks with customers however
competing with world class markets may pose a danger of bankruptcy or strategic failure of
design. Patterns of business are open to be mastered or specialized in still competing with
those who are experts by diversifying may pose loss of finances and time.
Investing in areas of new technological products fascinates the innovators and young
entrepreneurs adopting change at a much faster pace than the traditionalists who mostly are
old and middle aged people. Contribution of marketing specialists also plays an important
role in attracting young minds to new ideas. But key selling point remains tied up with the
strategy of availability of all kind of resources at economical rates. Internationalization poses
similar threats to those looking for new markets for their products which has shown success
in some cases but overcoming local competitors or taking over then is also observed and
reported in studies.
Views collected through Questionnaire were consolidated through formula due to its
complexity and data collected was on five point likert scale which was to be graded by
experts from different fields.
World s paradigm shift observed to be drifting towards scarcity of room to move about,
partial contribution of which is Technology. Change is ever living, stable, constant and
durable phenomenon mostly observed due to advancement in Technology. Every changing
world is posing dangers to world though comfort and standard of living too has changed from
living in caves to living in Paradise like places. Problems of pollution, population etc are very
common, though. Planning is evident as only tool to tap the potentials for prosperous future.
Rigorous planning undertaken with pure commitment to provide the needs to society has
been initiated for this purpose. All these steps are about future planning to overcome future
problems and realize what potential does a country have to capitalize on; thus strategically
designing policies for being self sufficient in the needs of social setup instead of importing
the basic necessities from others.
Isolation/syndrome policy of decision making rises as one major cause of policy failure
posing great threat to nations. Realization of techno-economy on the other hand poses yet
another danger of being third world country if technology isn t paid due attention due to its
very nature of importance in coming years. Technology policy needs brainstorming by group
of experts from various fields who have vision in addition to experience of issues related to
country. Brainstorming is effective idea generating, creativity enhancing and solution
oriented tool in which about 10 experts are asked to give solutions to given problem(Wilson,
2010); thereafter the options generated are input to the survey methods of collection of data
which later is analyzed to get the conclusion from experts. Employed method of survey is
beneficial from its design of responding conveniently, confidently, openly and cognitively
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due to its flexible nature. Best survey for such kind of information is Delphi or its form
known as semi Delphi which may be reshaped according to situational needs.
Purpose is to explore about the macro-market demands of the country from experts point of
view for they have the right experience and attitude towards the needs of the nation. After
experiencing the problems related to their own sector which certainly are due to other sectors
mal functioning, cause attribution capacity of such experts increase from being giving biased
opinion to get the short term profit to a state of realization and revealing to a sense which not
only helps people of one nature or nation rather they generalize the consequences to all the
globe thus leading towards harmonious global village. Experts of fields with great experience
in collaboration with scientists opinions are expected to respond collectively as error free.
Consensus is ultimate goal however statistically analyzing the data collected from experts
reflects the significance of an area or sectors in a country s economy.
Geographically, every region can be differentiated from other which can be generalized in
the case of countries and subcontinents. Cause related marketing practices are organized in
close relevance to country s culture [7]. Mere marketing is observed to be complied by the
same phenomenon of doing in accordance with the culture and values. So, products of one
type are very commonly used in some regions and same products have no market in others
[10]. We see KFC in Pakistan now after many years of business in West yet not accepted by
many due to taste and culture is non-suited.
3. Data Collection
Open ended and close ended, both techniques were used in partially Delphi [5] oriented
questionnaire. It was open ended as suggestions regarding technology development in field
of perceived as important was based on an opinion however other related columns were to
be responded on an close ended responses as Likert scale from 2 to 10 was used to
denominate the importance of that sector in our country. 10 representing very important,
and 2 representing very low importance of that sector from Pakistan s perspective. The
scale initially used was not Likert scale in true sense however it was modified for
convenience. Later in data analysis it was changed to proper 5 point Likert scale.
Target population was experts from various back grounds. Mostly from public sector for
their authentic input as they know the situation from macro view point for being an integral
part of administrative setup. Significant number of private sectors and semi government
organizations top management also responded. All the respondents were requested to
provide a copy to those who they know closely and think can fill the questionnaire
effectively. Total responses recorded were 191 from public and private sectors collectively.
The technique involved in collecting data was Snowball Sampling Effect also.
4. Data Analysis
Data was fed into work sheet software in a scheme decided by self thinking with a purpose
for convenience and ease of data interpretation. The important part of data was the
responses about main area which is yet to be exploited in Pakistan in terms of technology.
In most of the cases data was in the form of sub sector of some general area e.g. solar
energy is sub sector of Energy in addition to Gas, Petrol, Coal, Wind, Water, Nuclear etc.
So, all these sub sectors were given a common name of Energy as Energy group consists of
all such sub sectors. This generalization of responses was done through discussions with
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experts for authentication however; some fields were not identified with any of the
generalized sectors so they were given the group name of Miscellaneous.
To keep the track of all changes in the data, all the sub sectors were also noted into the
table preceded by the name of generalized sector. The other important data collected was
degree of importance in the opinion of expert rated on a 5 point Likert scale which initially
was based on a numbers from 2 to 10 nonetheless, discussions with experts resulted in
some changes to convert it to rating scale of 1-5 for convenience in the data analysis and
authenticity of the scale as it is commonly used in the world.
Complexity of data existed at the same time with the enrichment of data yet the data
reflected in one response was cognitively easy to comprehend contrary to the research work
aim of composing the data in one report form for future easy to use format. Comprehension
in contrast to conclusion as well as discussion becomes easy as consolidated report points
out the pivotal variables of concern in the study which was catered by using a formulated
equation for analysis of data. The very way of using equation for such a purpose was
observed in Japan [5]. Ease of use motivated for its usage in our study in our concern of
data complexity.
All responses generated about 100 sub sectors which were emphasized by the experts in the
instrument. Remaining columns with a number representing degree of importance,
expertise of respondent in that field, maturity time or chance of realization of that
technology sector in Pakistan considering a period of 10 to 15 years, existence competence
level of Pakistan were also considered in the study to validate the response and given
weight for having knowledge and expertise in that field. Experts were given full room to
give comments of any sort in the last column regarding the instrument or any other relevant
thing to our exploration of technology potential in Pakistan.
Importance was attributed to field specified by Area/Sector and Degree of Importance
which was to be attributed as per opinion of the expert. Yet, the remaining 3 columns are
included in the study as in formulation of equation used for data interpretation consists of
number of all columns. Values assigned to all these items were added and multiplied as
decided previously. Two equations used to accumulate the values attributed to columns.
One equation just added up the different values assigned by the respondent where as other
equation used the values of first and last two columns in sum function and the second
column value was multiplied by the sum of other 3 columns. This was to demonstrate the
value of 2nd column given more importance due to the feeling that a person who is more
expert in any field can comment in much better way than the one who is non expert in that
field.
The two equations used were recorded in the table as different columns and results from
these equations were simply used on the basis of their numeric value to find out which area
or sector was considered of greater importance by the experts. The values of two columns
after being processed as decided among a group of other experts depicted some interesting
as well as some pre-determined results on some different forums and qualitative studies.
The study of potential new technology growth markets in Pakistan is special in its nature as
qualitative aspects of Delphi [5] and 5 point Likert scale of quantitative have been used to
get the result or conclusion about which areas or sectors are of importance in Pakistan
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which may produce better results if exploited by investors from the view of investing in
technology related to those areas.
Other areas of importance are found to be Water Management scoring 3824 in expertise
equation and in neutral one 718 was yielded however rating in both the equations was 3
and 4 respectively. Water Management was taken as separate generalized field due to huge
attention paid by experts from various sectors and due to getting 24 responses in its favor.
Industry was the next generalized area getting 3678 and 757, and position wise 4 and 3, in
expertise and neutral equation respectively. Sub sector of industry were all of great
importance but due to current crisis experts may have focused other sectors or perhaps the
issue in the mind of experts was of Agro-Energy based. The experts from various sectors
voted in favor of this area were 29 in number. Fifth technology getting greater score was
Biotechnology which is linked with the agro based economy but surely needs attention
separately to expedite development.
Other areas of importance with values in two equations are listed in the table below:
Table 1
Broad Area
(1+3+4)x2
1+2+3+4
Priority
with
(1+3+4)x2
Priority
with
1+2+3+4
Environment (20)
3176
580
Pharmaceutical (21)
2896
582
Education (18)
2528
482
Materials (14)
2002
387
10
Health (16)
1844
413
10
Nanotechnology (12)
1514
313
11
11
Natural Resources (11)
1504
294
12
12
HRD (7)
1312
210
13
14
Livestock (8)
900
212
15
13
Textile (8)
888
208
16
15
Pesticides (5)
856
158
17
17
Miscellaneous (19)
3180
550
19
19
5. Conclusion
Values in columns labeled by two equations represented the Agriculture as the top most
sector with GDP share of 24.5 [2]. It is based on the result from two equations both of
which represented Agriculture as most important sector having potential for new
technologies especially biotechnology [11], and other agro based technologies which can
increase the quality of production in relation to the quantity. After adding the responses of
all the values of all the respondents and using the equations to find out the area having
larger potential for new technologies, value achieved by agriculture is 7023 in equation of
considering expertise in the area and the other neutral equation yielded score 1530 which
again in highest. The result is cross justified by the reality of 43% workforce is being
employed by agriculture [20], which is much less than figures in the past of about 70%
which is due to mechanization [20] and other factors, in addition to its importance for
survival of mankind and natural environment. Agriculture as priority sector for potential
new technology growth market is also endorsed by a study which statistically signifies
technological change and spillovers positively affecting the growth of value-added in
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agriculture [21]. Machines may have been the necessity of current mankind however fuel is
of great importance which must be clean and pure from all toxics. Mankind Mechanics are
nonetheless, needing same purity and cleanliness of food and environment they live in
which motivates to focus Agriculture as area of great importance from technology point of
view as agor-techno-economy is very successful in rich farmers of richer countries [16].
Out of 191 number of responses in favor of Agro based technologies were 56.
6. Research Implications
Technology is also said to be of great importance in machines now used in agriculture as
now we see categorization of technologies as Drying Technologies in Agriculture [3]. Area
of second high priority was found to be Energy with Expertise based equation yielding
4582 and neutral one yielding 1148. Energy s importance is obvious from all views due to
its necessary natural demand in current era to run agro and industrial machines in addition
to its necessary usage in all departments of life. Energy sub sectors were repeatedly found
as Wind and Solar technology as recorded from responses of experts. This awareness does
exist as current issues in making new dams which resists water based energy production
[1]. Therefore importance of alternate energy sources increases to meet the demand.
Numbers of responses related to Energy were found to be 44 which is close to what people
say about importance of agro based technology. Both the sectors need attention in
technology investment projects and are validated by discussions as new potential
technology areas in Pakistan.
Trans-National organizations seek potential in foreign markets. When Pakistan is
considered they may focus on information readily available to them. Study may be helpful
in strategic planning by any MNC who may seek long term involvement in Pakistani
market. The government too needs some direction in this regard as to which sectors need
exploitation for betterment of economy primarily for the sake of strong social setup.
Government also needs investment by MNCs for generating jobs for prosperous future in
addition to technology transfer boost [4]. This step may also influence general public by
not participating in non human activities which may harm image of the country. So,
indirectly, its implications are to reduce the activities inflicting harm to our image in
electronic media if and only if the study is taken one step further to government deciding
about starting projects related to the two fields mostly and minor projects related to
remaining identified general areas and sub sectors in them.
7. Research Limitations
The questionnaire was Delphi oriented and sample size too was small as about 200
responses were received. Mostly the respondents were from public sector organizations
with some percentage of private sector organizations. Scientists were also from public
sector however no civil organization was focused. Participation of civil organizations is
appreciated for they pose as the main role models of society and pretend to talk about the
issues related to society. Yet their participation was not ensured. In next study their
participation can be assured.
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References
Bhagavan, M. R. , The Energy Sector in SADCC Countries, (1985), Energy in Developing
Countries, Vol. 14, No. 4/5, pp. 214-219
Khilji, Shaista E., HRM in Pakistan, HRM in Developing countries, (2001), Routledge.
Mujumdar, Arun S., Drying Technology In Agriculture And Food Science, (2001), Drying
Technology, Vol 19, pp. 1217 1218
Langdon, S., Multinational corporations, taste transfer and underdevelopment: a case study from
Kenya, (1975), Review of African Political Economy, Volume 2, Issue 2 1975 , pp. 12 35
UNIDO, Unido Technology Foresight Manual, 2005, Organizations and Methods, Vol. 1, pp.
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Zafarullah, M., Ali, M., Young, S., The Internationalization of the Small Firm in Developing
Countries Exploratory Research from Pakistan, (1997), Journal of Global Marketing,
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Varadarajan, P. R., Menon, A., Cause-Related Marketing: A Coalignment of Marketing Strategy
and Corporate Philanthropy, (1988), Journal of Marketing, Vol. 52, pp. 58-74
Satish, J., Subhash S., Peter K., Pushkala, R., The Role of Relational Information Processes and
Technology Use in Customer Relationship Management, (2005), American Marketing
Association, Vol. 69, Issue 4, pp. 177-192
Kobi, D., Ronen K., Shaul F., Entry-Level Police Candidate Assessment Center: An Efficient
Tool Or A Hammer To Kill A Fly?, (2006), Personnel Psychology, Vol. 55, Issue 4, pp.
827-849
Krugman, P., Scale Economies, Product Differentiation, and The Pattern of Trade, (1980),
American Economic Association, www.jstor.org
Eliasson, E., A Competence Bloc Analysis of the Economic Potential of Biotechnology in
Agriculture and Food Production. (2002), Kluwer Academic Publishers, Vol. 26, pp. 285
O'Brien, E., Robertson, P., Future leadership competencies: from foresight to current
practice,(2009), Journal of European Industrial Training, Vol. 33, No. 4, pp. 371-380
May, H., G., Foresight and futures in Europe: an overview, (2009), Foresight, Vol. 11, No. 5, pp.
57-67
Inayatullah, S., (1988), The Rights of Robots: Technology, culture and law in 21st century,
Futures
Kumbamu, A., Ecological Modernization and the Gene Revolution : The Case Study of Bt
Cotton in India, (2006), The Center for Politicl Ecology, www.snsjournal.org
Herring R., J., Whose Numbers Count? Resolving Conflicting Evidence on Bt Cotton in India,
(2007), Q-square working paper, No. 44
Satish Jayachandran, S., Sharma, S., Kaufman, P., Raman, P., The Role of Relational
Information Processes and Technology Use in Customer Relationship Management,
(2005), Journal of Marketing, Vol. 38, No. 3, pp: 326-346
Wilson, C., Brainstorming, (2010), Elsevier
Markusen, J., R., The Boundaries of International Enterprises and the Theory of International
Trade, (1995), Vol. 9, No. 2, pp: 169-189
Amjad, R., Pakistan's Poverty Reduction Strategy: Why Employment Matters, (2005), Lahore
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INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS VOL 2, N O 10

Listed in ULRICH S
Measuring the Attitude towards Science in Pakistan
A study of Secondary School Students
Rana Zamin Abbas
Research Associate, School of Business & Economics, Department of Business
Administration, University of Management and Technology
Muhammad Ashraf
M.Phil Student, Department of Business Administration
Superior University Lahore, Pakistan
Maqsood Ahmad
PhD Scholar
University of Management and Technology
Dr. Usman Khalil
Dr.Zulfqar Ahmad (Corresponding Author)
Assistant Professor,Hailey College of Commerce, University of Punjab Lahore
Abstract
This study was carried out to assess the attitude of students of secondary classes towards science.
The data was collected from seven secondary schools situated in Model Town and Kahna area of
Lahore. The sample consisted of 600 students, both male and female drawn from science as well
as humanities streams. The instrument used for collection of data was a modified version of
Modified Fennema-Sherman Attitude Scales by Diana Doepken, Ellen Lawsky and Linda
Padwa1. It consisted of 28 items questionnaire to be responded on a 5-point Likert Scale. The
analysis of the data was done by using t-test, ANOVA and LSD test. The study revealed that all
students of secondary classes had positive attitude towards science. Attitudes of females are even
more positive. Similarly students of Science Group have more positive attitude than those of
Humanities Group. The study further revealed that parental attitude and school type also
contribute towards development of positive attitude of students towards science.
Keywords: Measuring , Attitude , Science , Pakistan, Secondary School Students
1. Introduction
Attitude is commonly defined as a predisposition to respond positively or negatively to
things, people, places, events, or ideas.
Attitudes or feelings towards science refer to a person's positive or negative response
to the enterprise of science. Put another way they refer specifically to whether a person likes
or dislikes science. A seven-item subscale designed by Simpson and Oliver (1990) 1
measures student attitude in terms of specific feelings towards science.
Science is fun
I have good feelings toward science,
I enjoy science courses,
I really like science,
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I would enjoy being a scientist,

I think scientists are neat people,
Everyone should learn about science.
Included in the scale are other dimensions related to attitude toward science. One example is
motivation to achieve in science. Items from this subscale include:
I always try hard, no matter how difficult the work,
When I fail that makes me try that much harder,
I always try to do my best in school,
I try hard to do well in science.
Another dimension related to attitude toward science is science anxiety, the negative
pole of the attitude concept. Items in this subscale include:
Science makes me feel as though I'm lost in a jungle of numbers and words.
My mind goes blank when I am doing science,
Science tests make me nervous.
I would probably not do well in science if I took it in college.
The science attitude of students can include attitude toward science teacher. Examples of
items representing this dimension include:
o My science teacher encourages me to learn more science, o I enjoy talking to my
science teacher after class, o My science teacher makes good plans for us. o
Sometimes my science teacher makes me feel dumb, o My science teacher expects
me to make good grades. Attitude toward science curriculum is another important
affective variable. Examples of statements representing feelings are:
o We do a lot of fun activities in science class, o We learn
about important things in science class, o We cover
interesting topics in science class, o I like our science
textbook.
"Thus the attitude is a little thing that may make a big difference." Why positive
attitudes towards science are necessary?
Science is a human enterprise that contributes enormously towards extending the intellectual
horizons and also in solving many of our practical problems for example:i. Science is an important way to understand the world. Understanding means to gain
insight into the way all nature works in a causal and mechanistic sense. Science helps us
to understand motions in the heavens, the tides, and the movement of terrestrial bodies,
the chemical constituents of matter and the nature and evolution of living organisms.
There is no other way to understand such objects and processes.
ii. Science attempts to explain natural phenomena in terms of the underlying causes in as
economical way as possible - preferably using mathematics. The ideas have to be selfconsistent and correspond with reality. They must be tested. Scientifically.
iii. Scientific knowledge is self-consistent. The self-consistency implies that one branch of
science must be consistent with all the others; Biological theories cannot contradict
Chemistry.
___________________
1
Simpson, R.D., & Oliver, J. S. (1990). A summary of major influences on attitude toward and
achievement in science among adolescent students. Science Education, 74, 1-18.
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iv.
Science is a special form of knowledge. But the differences lie both in the subject matter
and the techniques. In science the ideas are value-free.
v.
A surprising aspect of science is that almost every important idea can be expressed in a
precise manner.
There is hope, even expectation, that science can provide the solution to our many problems:
the cure for cancer and other illnesses, cheap and environmentally friendly nuclear power.
There also is considerable enthusiasm for popular science books and programmes, which
reveal the mysteries of the origin and workings of the universe-including the origins of
human beings like ourselves. Science is intellectually exciting.
2. Why negative attitudes towards science are not desirable?
While there is much interest and admiration for science, there is also some fear and hostility.
Science is perceived as materialistic and dehumanizing, arrogant and dangerous.
Reductionism, a hallmark of scientific research, robs all the mystery and wonders of life.
Some others see its practitioners as a band of cold, competitive and unfeeling technicians
wielding power without responsibility. The threats of nuclear war and the genetic
manipulation of embryos loom large. Science is also blamed for polluting the environment.
Such attitudes and feelings about science are however uncalled for; that we remain ignorant
about many aspects of human behavior is not a failure of science but a reflection of human
complexity. What science cannot do is to tell us how to live, what is good or bad. It has
nothing to contribute to moral and ethical issues; these can, however, arise in relation to the
application of scientific ideas. In principle, if we understood more about how society works,
it could help us design a just society once we made clear the ethical and moral principles that
we want.
3. Statement of the Study
The purpose of this study is to know and learn the behavior and attitudes of secondary
school students towards science learning. So the statement of this research project is "A
survey of secondary school students' attitude towards science" Significance of the
Study
The attitude of a learner toward a subject determines to a large extent, his/her success
and consequently his/her choice of a profession. In most cases this attitude is formed during
secondary classes. It is, therefore, important to discover attitudes of students and to try to
modify, if possible, through teaching strategies.
4. The significance of the study can be gleaned through the following

i.
Student's attitudes towards a subject deeply affect their learning of that subject. So it is needed to
know their attitudes, which will be helpful for teachers, curriculum designer and head teachers of
schools.
ii.
Gender difference in attitudes may be important because females usually feel themselves inferior in
science. It may therefore, be useful to know their attitudes. This study will be helpful for females that
what attitudes they should adopt and how these attitudes will fulfill their needs.
iii.
The study will help to know the attitudes of science students, so that proper emphasis may be given to
develop science attitudes.
iv.
The findings of the study may provide useful insights to curriculum planners and textbook writers to
promote desirable attitudes and counter negative attitudes for improved learning.
v.
The study may provide incentives for further researches in this domain.
5. Objectives of the Study

This study is conducted to achieve the following objectives.
i.
To measure the attitudes of secondary school students.
ii.
To measure the gender difference in attitudes of secondary school students.
100
iii.
iv.
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To know the relationship, if any, in the type of school and the attitudes of their students towards
science.
To study the attitudes of science and non-science students towards science at secondary level to
counter some wrong notions that science is a difficult subject or that some students cannot study
science at all.
6. Research Questions
i.
ii.
iii.
iv.
v.
vi.
What are students' attitudes towards science at secondary level?

What are significant differences between students' attitudes towards science at secondary level in
Lahore City?
What are significant differences between science and non-science students' attitudes towards science
at secondary level in Lahore City?
What are significant differences between 9th, 10lh class students' attitudes towards science at
secondary level?
What are significant differences between 9lh, 10th class science students' attitudes towards science.
What are significant differences between 9th, 10lh class non-science students' attitudes
towards science.
vii. What is gender effect on student's attitudes towards science at secondary level?
viii. What are the effects of fathers' education on students' attitudes towards science at
secondary level?
ix. What are the effects of mothers' education on students' attitudes towards science at
secondary level?
x.
What are the effects of school type on students' attitudes towards science at secondary
level?
7. To answer these questions following null hypothesis were formulated
H01 There is no gender effect on students' attitude towards science.
H02 There is no significant difference between science and non-science students' attitudes
towards science.
H03 There is no significant difference between 9th class science and non-science students'
attitudes towards science.
H04 There is no significant difference between 10th class science and non-science students'
attitudes towards science.
H05 There is no effect of fathers' education on students' attitudes towards science.
H06 There is no effect of mothers' education on students' attitudes towards science.
H07 There is no effect of school type on students' attitudes towards science.
H08 There is no significant difference between 9lh, 10th class science and non- science
students' attitudes towards science.
H09 There is no significant difference between 9th ,10th class science students' attitudes
towards science.
H010 There is no significant difference between 9th, 10lh class non-science students' attitudes
towards science.
Since the questionnaire was divided into four sub-groups for detailed analysis the researcher
formulated null hypothesis with respect to four sub-groups.
7.1 Sub group No.l: "Self perceptions"
The following null hypotheses were formulated.
Ho1 There is no significant difference between science and non-science students' self
perceptions at secondary level.
H02 There is no significant difference between male and female students' self- perceptions
about science at secondary level.
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th
H03 There is no significant difference between 9 , 10th class students' self- perceptions
about science.
H04 There is no effect of school type on students' self-perceptions about science.
Ho5 There is no effect of father education on students' self perceptions about science.
Ho6 There is no effect of mother education on students' self perceptions about science.
7.2 Sub group No.2: "Future expectations"
H01 There is no significant difference between science and non-science students' future
expectation from science at secondary level.
H02 There is no significant difference between male and female students' future
expectations from science at secondary level.
H03 There is no significant difference between 9lh and 10th class students' future
expectations from science.
Ho4 There is no effect of school type on students' future expectations from science.
H05 There is no effect of father education on students' future expectations from science.
H06 There is no effect of mother education on students' future expectations from science.
7.3 Sub group No.3: "Expectations from teachers"
H01 There is no significant difference between science and non-science students'
expectations from teacher at secondary level.
H02 There is no significant difference between male and female students' expectations from
teacher at secondary school level.
H03 There is no significant difference between 9th and 10th class students' expectations from
teacher at secondary level.
H04 There is no effect of school type on students' expectations from teacher.
H05 There is no effect of father education on students' expectations from teacher.
Ho6 There is no effect of mother education on students' expectations from teacher.
7.4 Sub group No.4: "Expectations from gender"
H01 There is no significant difference between science and non-science students'

expectations from gender role in science at secondary level.
H0 2 There is no significant difference between male and female students' expectations from
gender role in science at secondary level.
H0 3 There is no significant difference between 9lh and 10lh class students' expectations from
gender role in science at secondary level.
H0 4 There is no effect of school type on students' expectations from gender ro\e in science
at secondary level.
H0 5 There is no effect of father education on students' expectations from gender role in
science at secondary level.
Ho6 There is no effect of mother education on students' expectations from gender role in
science at secondary level.
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8. Definition of terms
i.
Attitude: - Attitude is commonly defined as a predisposition to respond positively or

negatively to things, people, places, events, or ideas.
ii. Attitude towards science: - Attitudes or feelings towards science refer to a person's
positive or negative response to the enterprise of science. Put another way, they refer
specifically to whether a person likes or dislikes science.
iii. Secondary school: - An institution where students learn from class 6 to 10 (age group 6
to 17).
iv. Students: - Regular students of a secondary school.
9. Assumptions
i.
Attitude can be negative or positive.
In terms of positive attitude the learner will be high achiever. In terms of negative
attitude the learner will be low achiever
ii. Attitude is changeable.
iii. Attitude can be changed due to learning.
iv.
Attitude can be changed due to experience.
v.
The study will help teachers to give more emphasis on learning in affective domain.
10. Delimitations of the study

The study will be delimited to: i. The population and sample will be male & female students studying in different
secondary schools of Lahore.
ii. The data for the study will be obtained only through a questionnaire.
iii. The study will be limited only to "attitude towards science"
iv. The study will only be conducted in secondary classes such as 9lh and 10th.
11. General Methods and Procedures
i. The investigator will conduct the study through quantitative research method.
ii. The investigator will take the sample through convenient sampling.
iii. For collecting data from the students questionnaire method will be adopted.
iv. The investigator will get filled the questionnaire from students.
v. The investigator will analyze the data through quantitative techniques.
12. Review of Related Literature

12.1 What is Attitude?
According to Kobella (1989)1, the term attitude encompasses a wide range of
affective behaviors (e.g. prefer, accept, appreciate, and commit) and is due to loosely and
without basis by some writers. It is also applied in number of contexts and with a variety of
meanings.
Vaidya (1989)2 explained attitude as "a condition of readiness for a certain type of
activity". Attitudes held by the individuals may be simple or complex, stable or unstable,
temporary or permanent and superficial or fundamental. Judgments based upon insufficient
facts are likely to yield wrong results and thereby develop biased attitudes.
Hayes (1995)"' described, "Attitude affect the way in which we perceive the world
around us".
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Anastasi (1969) defined attitude as, "a tendency to react favourably or unfavourably
toward a designated class of stimuli". It is evident that when so defined, attitudes cannot be
directly observed, but must be inferred from overt behavior, both verbal and non-verbal.
Rosenberg and Hovland (I960)' express that, "attitudes are typically defined as,
predispositions to respond in a particular way towards a specified class of objects".
Being predispositions they are not directly observable or measurable. Instead they are
inferred from the way we react to a particular stimulus.
MsGuire (1976)6 who has reviewed numerous definitions of attitudes concluded that
these definitions differ in almost every conceivable important way. Some psychologists
define attitudes as inner states, but a few refer to attitudes as consisting of groups of
responses. Some define attitudes as a disposition to respond, others considers the response as
representing the attitude. Some regard an attitude as having a unity, but others regard it as
having a set of distinct components. Some distinguish between attitude and knowledge while
others regard both as unified cognitive components.
Fishbein and Ajzen (1980)7 featured work based on hypothesized relationship among
beliefs, attitudes, behavior intentions, and behavior.
13. Characteristics of Attitude
Mohsin (1990)8 described that the attitude has following characteristic that are commonly
accepted:
i. Attitudes are not inborn; they are learned through experience.
ii. Like most psychological concepts, they can be inferred form the observed antecedent
stimulus and the consequent behavior pattern. They are thus, of the nature of an
intervening variable and a hypothetical construct.
iii.
Attitudes have objective reference; one holds an attitude regarding some object person, or issue. In
this respect, they differ form motives or personality traits that have subjective reference.
iv.
Attitudes differ in valence, having an attitude regarding an object signifies that the person concerned
is either favourably or unfavourably disposed towards it. Stated otherwise, attitudes are positive or
negative, pro or anti.
v.
They orient the organism to the attitude object and channel the energy at the disposal of the organism.
vi.
Once formed, attitudes persist in time, they are enduring dispositions and are unlikely to change
under ordinary conditions.
vii.
From operational point of view, attitudes are manifested in the consistency of responses made to a
specific object situation.
14. Importance of Attitudes
The predominant role of attitudes is the determining of our thoughts, memory and learning process. Thus
they not only determine the conclusions we derive from facts, but also influence the every fact we are
willing to accept.
The concept of attitude includes mental set, task set and intention-determining tendencies of very brief
duration as well as the relatively permanent biases of politics, economics, and religion. It is easy to
____________________________________
1
Kobella, Thomas R. (1989). Changing and Measuring Attitude in the Science Classroom. Research
Matters to the Science Teacher, No. 8901. http://www.barst.irg/research/attitude.htm.
2
Vaidya, Narendera. (1989). The Impact Science Teaching. Now Delhi: Oxford & IBH Publishing Co.
3
Hayes,
Wm
A.
(1995).
Scientific
Attitudes.
Cleveland:
MS
38733.
http://
www.riverboathouse.com/dochayes/scithink/wahsat.html.
4
Anastasi, Anne. (1969). Psychological Testing London: Macmillan Publishing Co.
5
Rosenberg, Milton J. & Havland, Carl I. (1960). Attitude Organization and Change, An Analysis if
Consistency Among Attitude Components. New York: Yale University Press.
6
MsGuire, W.J. (1976). Attitude change and the information-processing paradigm. In E.P. Hollandrer & R.
G. Hunt (Eds.), Current perspectives in social psychology. New York: University Press.
7
Ajzen, I., & Fishbein, M. (1980). Understanding attitudes and predicting social behavior, Engiewood
Cliffs, NJ: prentice Hall.
8
Mohsin, S.M. (1990). Attitude concept, formation and change. New Delhi: wiley Eastern Ltd.
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observe that students with attitudes unfavourable to certain things learn them with greater difficulty than
those whose attitudes are favourable.
Edwards (1957)9 verified the hypothesis that people select and remember from a speech those
items, which fit their attitudes, rejecting data which conflict with their views.
The relationship between attitude and information suggests that people acquire most readily
facts, which are congruent with their views. Being products of education attitudes are basic to many
educational activities. Thus progress in any field depends upon attitudes developed in children at school
level. Attitudes are seldom exempted today from discussions of student and schooling problems.
15. Components of Attitude
Individuals have many attitudes most attitudes are interconnected in clusters, but some are
relatively isolated. Occasionally, attitudes are acquired through one traumatic emotional experience but
with little information about the attitude object. Most often they are acquired through a series of lesser
emotional experiences and with more information. Some are acquired with very little feeling or emotion
and considerable information about the attitude object. (Klausmeier and Ripple, 1971)10
".Attitude includes the following components"

15.1 Cognitive Components
The cognitive components consist of ideas and beliefs, which the attitude holder has about the
object, Encyclopedia of Educational Research (1992)". Attitudes differ in the extent to which
they involve knowledge and beliefs. Some attitudes are highly intellectualized.
Where' as, others are based on large store of incorrect information and false beliefs. The
cognitive basis for attitudes may be misinformation. A person may hold an attitude and have no
strong feeling about the matter that is; the affective component may be minor. On the other hand,
his attitudes may not only be highly intellectualized, but may also have a strong affective
component. The intellectual component and the affective components work hand in hand, but
they are still independent components. The intellectual component of attitude sometimes referred
to as the cognitive (knowing) components. Hence, the cognitive component of an attitude is that
aspect which is based on knowledge or derived from it in some way. (Travers, 1977)'""
15.2 Affective Components
Travers (1977) explained that affective components consist of positive or negative affects
(feelings). Attitudes may differ in the extent to which they involve such affective components.
Some attitudes are quite irrational and involve little except this affective component. The person
who like one set of ideas and dislikes another, but cannot tell why, reflects an attitude that has a
major affective component but very little else. Many attitudes are of this nature, and common
observation suggests that they are quite easily learned; most people are characterized by many
attitudes that are of this character.According to Encyclopedia of Educational Research (1992)14,
'affective component refers to the feelings and emotions one has towards the object.
15.3 Action Components
Behavioral or Action component consists of one's actions and tendencies towards the object.
(Encyclopedia of Educational Research, 1992) 1:1
According to Travers (1977)16 many expressed attitudes bear little relation to behavior. The fact that the
action component can be independent of the other components is important for planning education. Much
of attitude education is the education of the affective and the cognitive components of attitudes, and these
components may never be carried over into action systems. The action system of an attitude may have
little support from the cognitive system, which may be almost entirely laming.
1
Edward, Allen L (1957), the social desirability variable in personality assessment and research. New York: Dryden
Press.
10
Klausmeier. Herbert J. & Ripple, Richard E. (1971). Learning and Human Abilities, Educational IPsycholigy.
New York: Harper and Row Publisher. (3 ld Edition)
" Alkin, Marvin C. (1992). Encyclopedia of Education Research. Vol. I, New York: Macmillan Publishing Co.
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Gagne & Medsker (1996)17 suggested that these three components of attitude are considered as
highly interrelated and believed that all three may be usefully addressed in attitude development.
16. Measurement of Attitude

Usually measurement of attitudes is carried out through verbal behavior.
Edwards (1957)10 defined, measurement of attitudes as "the degree of positive or negative effect
associated with some psychological object". So measures of attitude are measures of effect and hence do
not attempt to measure either the cognitive component or the action component of attitude.
Verbal behavior may be used in many ways in the determination of underlying attitudes. Any
expression of opinion provides a small amount of evidence and it can be obtained by asking a person
whether he agrees or disagrees with a particular statement of opinion. Series of opinions are ordered into
scales with respect to particular issues. Such ordered sets of statements are referred to as attitude scale.
They are used to appraise attitudes as asking subjects to examine each statement and to indicate
agreement or disagreement. An examination of these responses can then be used to provide a measure of
attitude. It is clear that endorsement of extreme statements would indicate an extreme attitude. On the
other hand, the endorsement of statements nearer a middle position indicates a corresponding scale
position of attitude.
Thurstone (1927, 1928)'g suggested, "Attitudes can be measured" by using techniques that
generate interval levels, i.e, scales of people's attitudes or values. (Encyclopedia of Educational Research,
1992)20
Anastasi (1969) proposed that attitudes can't be directly observed but must be inferred from overt
behavior, both verbal and non-verbal.
Attitudes are multidimensional and that appropriate methods are those that uncover the important
dimensions underlying the measurement. (Encyclopedia of Educational Research, 1992)22
The measurement of attitudes is both difficult and controversial, whether expressed opinions can be
regarded as indicators of "real" attitudes has frequently been questioned. This problem concerns the
relationship between verbal and non- verbal overt behavior, which may not always provide an accurate
index of attitude (Anastasi, 1969)23.
17. The Opinionnaire or Attitude Scale
According to Encyclopedia of Educational Research, (1992)24, the commonest type of attitude
measurement is the opinion scale based on the assumption that, in general attitudes are reflected in
opinion.
An information form that attempts to measure the attitude or belief of an individual is known as
opinionnaire or attitude scale. How people feel or what they believe is their attitude, Difficult to describe
and measure. Researchers must depend upon what people say and what are their beliefs and feelings?
Through the use of questions, or by getting people's expressed reaction to statements, a sample of their
opinions is obtained. From this statement of opinion, one may infer or estimate their attitude, what they
really believe.
ls
Edward, Allen L (1957). The Social Desirability Variable in Personality Assessment & Research. New York:
Dryden Press.
vi.
vii.
viii.
ix.
Thurstone, L. L. (1928). Attitudes can be measured. American Journal of Sociology, 33(4), 529-554.
Op. cit.
Op. cit.
Op. cit.
x.
Travers, Robert W.M. (1977). Essentials of Learning New York: the Macmilian Publishing Co.
xi.
Op. cit.
xii.
Op. cit.
xiii.
Op. cit.
xiv.
Op. cit.
1
Gagne, Robert M. & Medsker, Karen I,. (1996). The Conditions of Learning. London: Harcourt Brace College
Publishers.
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Attitude scales yield a total score indicating the direction and intensity of the individual's attitude
toward a company, group of people, policy or other stimulus category. In the construction of an attitude
scale the different questions are designed to measure a single attitude or dimensional variable, and some
objective procedures are usually followed in the effort to approach this goal.
Attitude scales, for example, may provide an index for evaluating different instructional
procedures. Or they may be utilized in measuring the changes in student attitudes toward literature, art,
different racial and cultural groups, or social or economic programmes (Anastasi, 1969) .
The procedures extensively used for eliciting opinion and attitudes are:
(i)
Thurstone Technique
(ii)
Likert Scale
(iii)
Semantic Differential Scale
18. Likert Scale
Instead of classification of items by a group of judges, items are selected solely on the basis of
the responses of subjects to whom they are administered in the course of developing the test.
Internal consistency is often the only criterion for item selection, although external criteria may
be employed when available (Anastasi, 1969)26.First a number of statements are collected about a
subject. The importance is not of the correctness of the statements but of expression of
favorableness or unfavorableness. Then a trial test is administered to a number of subjects. Only
those items that correlate with the total test are retained. This testing for internal consistency
helps to eliminate statements that are ambiguous or that are not of the same type as the rest of the
scale. The attitude or opinion scale may be analyzed by indicating percentage responses for each
individual statement. This assigns a scale value to each of the five responses and the instrument
yields a total score for each respondent. All statements favoring the above position are scored:
19. Scale value
Strongly agree
Agree
Undecided
Disagree
Strongly disagree
5
4
3
2
1
For statements opposing this point of view, the items are scored in the opposite order:
Strongly agree Agree
Undecided
Disagree
Strongly disagree
1
2
3
4
5
If an opinionnaire consisted of 30 statements or items, the following score values would be

revealing:
30 x 5 = 150 Most favorable response possible 30 x 3 = 90 A neutral response/attitude 30 x
1 = 30 Most unfavorable attitude The score of any individual would fall between 30 and
150, above 90 if opinions tended to be favorable to the given point of view, and vice versa.
20. Influences Contributing to Acquisition of Attitudes
During elementary school years, children's attitude generally is in close
approximation of the attitudes held by the significant adults in their world, particularly their
parents and family group and their teachers. (Klausmeier & Ripple, 1971)27
Craig (1958)28 suggested that the school and home should provide a wide choice of experiences for
children for the behavior patterns formed in the early years of life could become basic patterns for a
lifetime. So parents may be thought of as a child's first teacher of science. Effect of Teacher on Attitude
The prestige of the parents is soon transferred to the teacher. Personal attitudes of teachers
influence the attitudes of their pupils because they tend to resemble them in many respects. So attitudes of
teachers are important. (Encyclopedia of Educational Research, 1992)29
A science teacher can play a major role in developing scientific attitudes among his students and
thus he can do this by manipulating various situations and practicing various elements of scientific
attitudes that infuse among the pupils these characteristics. The practical examples given by the teacher
leave an indelible mark on the personality of his students. Pupils who engage themselves in wide reading
in science develop science attitudes more than those who study textbooks. Thus a teacher should
encourage his students to read library books and supplementary books on science.
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A student of science gets many opportunities for learning scientific attitudes during this practical
period. It is for the teacher to properly use such opportunities for developing scientific attitudes amongst
his pupils. He should actively participate in discussion and interpretation of results after the experiment.
He must inculcate in his students the habit to postpone judgments in the absence of sufficient evidence to
support a hypothesis.
Personal examples of the teacher are perhaps the single greatest force helpful in inculcating the
scientific attitudes among his pupils. Students have a great tendency to copy their teachers. So a
science teacher must be free from biases and prejudices while dealing with his students. He
should have an open-mind and be critical in thought and action in his every day dealings. He
should be totally free from superstitions and unfounded beliefs and should be objective and
impartial in his approach to his everyday problems. He should be truthful and should have faith
in cause and effect relationship. For inculcating the scientific attitudes among his pupils teacher
should create a desirable atmosphere for encouraging them in various activities. He should feel
pleasure in facing a large number of intelligent questions and answering and explaining them and
must avoid snubbing his pupils for asking so many questions. (Yadav, 1992)
21. Effect of Parents on Attitudes
Most people are likely to acquire many of their attitudes in the home in which they are brought up. A
large part of the education of children consists in training and conditioning them to take their place in
adult society, and parents provide examples, which are constantly before their children. Parental attitudes,
may be taken over by children and made their own, and this is one way in which their influence may be
exerted.
Freudian theory teaches that the parent's behavior and attitudes to the child are primary elements
in the environment in which he works out his adjustments, and there is plenty of evidence to support this.
Although many attitudes are acquired during childhood as a result of home influences, these are
not necessarily immutable. Fortunately attitudes change and develop throughout life and parents and
teachers help in this process very much. So home, schools and society all have their part to play in the
inculcation of attitudes and interests (Evans, 1965)31.
Since the child is more closely attached to his parents to any other adults, it is plausible that his
attitudes would correlate highly with them. These similarities in attitudes are due partly to suggestion and
partly to the fact that parents automatically bring the child into certain institutional groups.
Some of the acceptance of parental attitudes by children is due to deliberate instruction. Parents and
teachers through facial expression, tone of voice, and other signs of hostility, without open verbal
statements of prejudice, apparently communicate many prejudices. Even more important for the
development of certain attitudes is the emotional relationship of child and parent. Stodgily concluded
that family influences are more potent than such factors as socio-economic status or intelligence in
developing children attitudes although social status may be a conditioning factor. (Encyclopedia of
Educational Research, 1992) '"
____________________________________________
Yadav, M.S. (1992). Teaching of Science. New Delhi: Anmol Publications Pvt. Ltd. '' Evans,
K.M. (1965). Attitudes and Interests in Education. London: Routledge & Kegan Paul Ltd.
Craig, Gerald S. (1958). Science for the Elementary School Teachers New York: Ginn &
Company.
Op.cit.
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It must be recognized that behavior may reflect the home and the general background of the children.
Frequently children use parent's opinions as reliable information. Adults may display attitudes such as
open-mindedness by the way the adults approach the interests of children. A dogmatic parent may cause
to lose initiative and independence to become gullible and incurious.
Teachers and parents may teach a great deal through a little behavior. The behavior of small
children very frequently reflects the attitudes and behavior of parents. (Craig, 1958)33
According to Encyclopedia of Educational Research (1992) 4 Davis and McGinnis studies the
effectiveness of parent education on parental attitudes toward children's behavior. They found that only
slight changes occurred after participation in child study groups, but that expert instruction was more
effective than Lay instruction.
Mohanty (1996)jr> proposed that educated parents can provide better facilities for the education
of their children:
22. Gender Effects

Motivation is seen as the cognitive area that affects girls' achievement levels in science and
competence in mathematic is clearly a primary factor affecting girls' entrance retention, and success in
science courses and careers.
Several different sources of gender differences in science participation and achievement, ranging and from
cognitive abilities to socio cultural stereotyping of science as masculine, have been identified, through
research have gone into science classrooms to delineate differential participation patterns that contribute to
two types pf experiences in school science. Those experiences are accumulative, and they compound the
difference in out-of-school science activities that have been documented for boys and girls. The result is
that many girls do not have equal opportunities to learn science, and their continued lag in achievement
reflects that lack of opportunity.
Brickhouse maintains that the myth of objectivity, value-free inquiry, scientific method, and
rationality that surrounds science presents students with a false image of science, and, thereby, limits their
participation in it. Although she concurs that school science has a masculine image, she suggests three
ways in which that image may be changed.
Studying science within its historical and sociological context will allow students to see science
as part of their culture.
Students examine current or historical scientific controversies about which scientists have not
agreed.
Teaching science and its uses together so that students can see science in relation to the world.
23. Procedure and Methodology

This section deals with procedure and methodology of the research project. It describes in details the
different aspects through which the research project has under gone for collecting relevant information
and data in order to arrive at reliable conclusion.
23.1 Population of the Study

The population of the study was male and female students of seven secondary schools of Model Town
and Kahna areas of Lahore District.
______________________________
xv.
Op. cit.
xvi.
Op. cit.
xvii.
Op. cit.
Mohanty, Susandhya. (1996). Teaching of Science in Secondary Schools. New Delhi: Wiley Eastern Ltd.
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23.2 Selection of Sampling

Researcher selected seven schools (four for males and three for females) on the basis of
convenient sampling. There were different class sections available in these schools. Some schools have
only two sections (one for science & non-science students at 9th class level) and (one for science & nonscience students at 10lh class level) and some schools have separate sections for 9th, 10th science nonscience students. So the researcher selected different sections if there were many sections and selected all
the sections if there were only two sections. Then the researcher selected all the students available in
these selected sections as sample of the study. The sample that was selected consists of six hundred
secondary school students studying in these secondary schools.
Selected No of sections were 18 and selected No of students were 600(300 male and 300 female).
The distribution of sample is shown in the table A.
Table A
H/S
H/S
H/S
H/S
H/S
H/S
H/S
23.3 Tool of Research

This study was a survey research so for the collection of relevant data and information a
comprehensive questionnaire was downloaded from Internet. It had 47 items with five options per
statement starting from Strongly agree (SA), Agree (A), Undecided (U), Disagree (D), Strongly Disagree
(SD). This scale was discussed with the adviser of the study. After consultation the scale was translated
in Urdu and short down to 28 items due to some contrast in the statements. Students have to response
each item on a five points Likert Scale, already discussed. The questionnaire was prepared for male and
females students by using particular language altered at appendix A & B.
For more detailed analysis 28 questions were divided in four sub groups.
Sub group
Item No
(1)
Self perceptions
19
(2)
Future expectations
10 14
(3)
Expectations from teacher
15 19
(4)
Expectations from gender
20 28
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23.4 Administering the Questionnaire:

The researcher administered the oppionnaire personally in classroom situation. The oppionaire
was administered in seven schools out of which four were male and three were female. Instructions to
give answer were written on the Questionnaire. The subjects were supported to put a tick mark against
each item according to their own choice.
23.5 Procedure:
The study was carried out to assess the attitudes towards science on the basis of male, female 9th,
10 class, science non-science parental education and school type.
The researcher took 600 students from seven different schools of Lahore District. The number of
students from which data was collected is given in selection of sampling. In order to check the responses
a scoring scheme of the scale was designed by the researcher.
th
24. ANALYSIS AND INTERPRETATION OF DATA

24.1 Data Analysis:
The data collected on a questionnaire from seven different schools was tabulated and analyzed by
applying t-test, analysis of variance and post hoc multiple comparison test.
24.2 T-Test:
The independent sample t-test evaluates the difference between the means of two independent
groups with an independent sample t-test, each case must have a score on two variables, the grouping
variable and the test variable. The t-test evaluates whether the mean value of the test variable for one
group differ significantly from the mean value of the test variable for the second group.
24.3 Analysis of Variance

For one-way (ANOVA) analysis of variances each individual or case must have scores on two
variables. A factor divides individuals into two or more groups or levels while the dependent variable
differentiates individuals on some quantitative dimension. The ANOVA F-test evaluates whether the
group means on the dependent variable differ significantly from each other.
24.4 Post Hoc Multiple Comparison Test

Post-hoc multiple comparison test is used to compare each group's mean difference. If the answer
is lower than mean score then there is difference within groups and if the answer is higher than mean
score then there is no difference within groups.
25. SUMMARY, FINDINGS, CONCLUSION AND RECOMMENDATIONS

25.1 Summary
The study was designed to determine the attitude of secondary school students towards science.
The study of the attitudes also focused on the affects of gender difference, parental education and school
type. Similarly affects of science & non-science groups and class difference on attitude towards science
were also measured.
The sample was selected on the basis of convenient sampling from seven different schools 600
(300 male & 300 female) students were selected. The questionnaire was down loaded and translated by
the investigator in the light of advisor directions. The questionnaire had 28 items and was sub divided in 4
parts. The students had to response on a five point- Likert scale. The investigator administered the
questionnaire in classroom situation. The responses of the students were collected and the collected data
was tabulated for analysis. Investigator prepared a coding scheme. Data was analyzed through computer
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by using SPSS version 6. Analysis of variance, post hoc test of group comparison and independent sample
t- test were used to analyze the data.
25.2Findings
Findings of the study are summarized below:
Average mean score 4.06 indicates that all students' have positive attitude towards science.
Mean scores (3.9713), (4.1406) and t-value (-4.13) shows a significant difference between male
and female students' attitude towards science. It is further evident from the mean values that
female students have more positive attitude towards science as compared to male students .
Mean scores (4.2439), (3.8859) and t-value (9.18) shows a significant difference between science
and non-science students' attitude towards science. It is further evident from the mean values that
science students have better attitude towards science as compared to non-science students.
Mean scores (4.2283), (3.8111) and t-value (7.04) shows a significant difference between 9th class
science and non-science students' attitude towards science. It is further evident from the mean
values that science students have better attitude towards science as compared to non-science
students.
Mean scores (4.2672), (3.9585) and t-value (6.42) shows a significant difference between 10th
class science and non-science student's attitude towards science. It is further evident from the
mean values that science students have better attitude towards science as compared to non-science
students.
F prob. (0.0353) is 'significant at P<0.05 levels of significance. So it is concluded that father
education affects the students' attitude towards science.
F prob. (0.0304) is significant at P<0.05 levels of significance. So it is concluded that mother
education affects the students' attitude towards science.
F prob. (0.0000) is significant at P<0.05 levels of significance. So it is concluded that school type
affects the students' attitude towards science.
Mean scores (4.0299), (4.0869) and t-value (-1.37) shows no significant difference between 9th,
10th class science and non-science students' attitude towards science.
Mean scores (4.2283), (4.2672) and t-value (-0.84) shows no significant difference between 9th,
10lh class science students' attitude towards science.
Mean scores (3.8111), (3.9585) and t-value (-2.40) shows a significant difference between nonscience students' attitude towards science. It is further evident from the mean values that 10th class
non-science students have better attitude towards science as compared to 9th class non-science
students.
Mean scores (4.3587), (3.8021) and t-value (11.94) shows a significant difference between
science and non-science students' self-perceptions about science. It is further evident from the
mean values that science students have better self-perceptions about science as compared to nonscience students.
Mean scores (4.0859), (4.0470) and t-value (0.75) shows no significant difference between male
and female students' self-perceptions about science.
Mean scores (4.0116), (4.1318) and t-value (-2.32) shows a significant difference between 9th and
10lh class students' self-perception about science. It is also concluded that 10lh class students have
better self-perceptions about science as compared to 9lh class students .
F prob. (0.0000) is significant at P< 0.05 levels of significance. So it is concluded that school type
affects the students' self-perceptions about science
F prob.. (0.0014) is significant at P< 0.05 levels of significance. So it is concluded that father
education affects the students' self-perceptions about science .
F prob. (0.0449) is significant at P< 0.05 levels of significance. So it is concluded that mother
education affects the students' self-perceptions about science
science and non-science students' future expectation from science. It is also concluded that
science students have better expectations from science as compared to non-science students
at secondary level
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Mean scores (4.1333), (4.3153) and t-value (-3.29) shows a significant difference between
male and female students' future expectation from science. It is also evident that female
students have better future expectation form science as compared to male students at
secondary level
Mean scores (4.1766), (4.2810) and t-value (-1.87) shows no significant difference between
th
th
9 and 10 class students' future expectation from science
F prob. (0.0000) is significant at P<0.05 levels of significance. So it is concluded that school
type affects students' future expectation from science
F prob. (0.0093) is significant at P< 0.05 levels of significance. So it is concluded that father
education affects students' future expectation from science
F prob. (0.0032) is significant at P< 0.05 levels of significance. So it is concluded that mother
education affects students' future expectation from science
science and non-science students' expectations from teacher. It is also evident that science
students have better expectations from teacher as compared to non-science students at
secondary level
male and female students' expectation from teacher. It is also evident that female students
have better expectations from teacher as compared to male students at secondary level
Mean scores (4.0160), (4.0920) and t-value (-1.19) shows no significant difference between
th
th
9 , 10 class students' expectations from teacher
F prob. (0.0000) is significant at P<0.05 levels of significance. So it is concluded that school
type affects students' expectation from teacher
F prob. (0.6551) is not significant at P< 0.05 levels of significance. So it is concluded that
father education does not affect the students' expectations from teacher
mother education does not affect the students' expectation from teacher
science and non-science students' expectation from gender role in science. It is also evident
that science students have better expectations from gender role in science as compared to
non-science studen
male and female students' expectations from gender role in science. It is also concluded that
female students have better expectations from gender role in science as compared to male
students at secondary level
Mean scores (3.9744), (3.9315) and t-value (0.93) shows no significant difference between
th
th
9 , 10 class students' expectation from gender role in science
F prob. (0.0000) is significant at P <0.05 levels of significance. So it is concluded that school
type affects the students' expectation from gender role in science
father education does not affect the students' expectation from gender role in science
mother education does not affect the students' expectation from gender roll in science
26. Conclusions
On the basis offinding of the study the following conclusions are drawn.
All students have positive attitude towards science.
Female students have better attitude towards science as compared to male students.
Science students have better attitude towards science as compared to non-science students.
There is a difference between 9th and 10th class non-science students attitude towards science. 10th
class non-science students have better attitude towards science.
Parental education and school type affect students' attitude towards science.
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27. Conclusions of sub-groups

Science students have better self-perceptions about science, better future expectations from
science, better expectations from teacher and better expectations from gender role in science as
compared to non-science students.
Malp and female students have seen self-perceptions about science.
10th class students have better self-perceptions about science as compared to 9th class students.
School type and parental education affect students' self-perceptions about science and future
expectations from science.
Female students have positive future expectations from science, positive expectations from
teacher and from gender role in science as compared to male students.
9th and 10th class students have same future expectations from science, same expectations from
teacher and same expectations from gender role in science.
School type affects students' expectations from teacher and gender role in science.
Parental education has no affect on students' expectations from teacher and gender role in science.
28. Recommendations
On the basis of finding and conclusions, the following suggestions are seemed to be reasonable and
approachable.
The teacher should be aware of the affect that the children reflect the attitude of adult members of
their family and home.
The attitude to be taught must be identified and planed for.
Pleasant emotional experience should accompany the learning of attitude.
Instead of product approach the teaching of science at secondary level should be based on process
approach.
Learning material must be selected on basis of knowledge, skills and attitude to be learned.
The teacher should relate their teaching to the daily life experience of the students.
The teacher should encourage the students to construct new equipments and apparatus for the
experiment instead of using conventional methods and equipments.
The modern science magazine, journals, films and videocassette records should be provided to the
students for the development of positive attitude towards science and scientists.
The government should organize adults crash literacy program for uneducated parents.
There should be full use of mass media in order to eradicate attitude towards science among
parents and their children.
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References
Alkin, Marvin C. Encyclopedia of Education Research. Vol. I, New York: Macmillan
Publishing Co. (1992)
Ajzen, I., & Fishbein, M. Understanding attitudes and predicting social behavior,
Englewood Cliffs, NJ: prentice Hall. (1980)
Anastasi, Anne. Psychological Testing London: Macmillan Publishing Co. (1969)
Craig, Gerald S. Science for the Elementary School Teachers New York: Ginn &
Company.(1958)
Edward, Allen L. the social desirability variable in personality assessment and research.
New- York: Dryden Press. (1957)
Evans, K.M. Attitudes and Interests in Education. London: Routledge & Kegan Paul Ltd.
(1965) Gagne, Robert M. & Medsker, Karen 1. The Conditions of Learning. London:
Harcourl Brace College Publishers. (1996)
Hayes,
Wm
A.
Scientific
Attitudes.
Cleveland:
MS
www.riverboathouse.com/dochayes/scithink/wahsat.html. (1995)
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Klausmeier, Herbert J. & Ripple, Richard E. Learning and Human Abilities, Educational
IPsycholigy. New York: Harper and Row Publisher. (3rd Edition) (1971)
Kobella, Thomas R. Changing and Measuring Attitude in the Science Classroom. Research
Matters to the Science Teacher, No. 8901. http://www,barst,irg/research/attitude.htm.
(1989) Mohanty, Susandhya. Teaching of Science in Secondary Schools. New Delhi:
Wiley Eastern Ltd.(1996)
Mohsin, S.M. Attitude concept, formation and change. New Delhi: wiley Eastern Ltd.
(1990) MsGuire, W.J. Attitude change and the information-processing paradigm. In
E.P. Hollandrer & R. G. Hunt (Eds.), Current perspectives in social psychology. New
York: University Press. (1976)
Rosenberg, Milton J. & Havland, Carl I. Attitude Organization and Change, An Analysis if
Consistency Among Attitude Components. New York: Yale University Press. (1960)
Simpson, R.D., & Oliver, J. S. A summary of major influences on attitude toward and
achievement in science among adolescent students. Science Education, 74, 1-18.
(1990)
Thurstone, L. L. Attitudes can be measured. American Journal of Sociology, 33(4), 529-554.
(1928)
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Travers, Robert W.M. Essentials of Learning New York: the Macmillan Publishing Co.
(1977)
Vaidya, Narendera. The Impact Science Teaching. Now Delhi: Oxford & IBH Publishing
Co. (1989)
Yadav, M.S. Teaching of Science. New Delhi: Anmol Publications Pvt. Ltd. (1992)
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Appendix
The following Secondary Schools were selected on the basis of convenient sampling.
1. Govt. Model High School, Model Town, Lahore.

2. Govt. Junior Model High School, Model Town, Lahore.
3.
Govt.
F. D. Model High School, Garden Town, Lahore.
4. Govt. A.P.W.A. Girls High School, G.O.R. 1, Lahore.

5. Govt. Dar-un-Niswan Girls High School, Jail Road, Lahore
6. Govt. Girls High School, Ferozepur Road, Lahore.
7. Govt. High School Kahna Nau, Lahore.
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A Study of Strategic Orientations, Pakistani Brands
and Implications
VOL 2, N O 10
Listed in ULRICH S
Rana Zamin Abbas

Research Associate SBE
Dr. Zulfqar Ahmad (Correspondence Author)
Assistant Professor, Hailey College of Commerce
University of the Punjab
Abdul Rafay, FCA
Assistant Professor (Finance)
School of Business & Economics,
University of Management & Technology, Lahore, Pakistan.
Abstract
Purpose of this paper is to explore the three strategic orientations (customer, competitive, and
technological) of the firm and new product performance.To understand which of three
different strategic orientations is more appropriate, when and why it is so in the context of
developing product innovations. To discuss Pakistani brands and develop prepositions with
referrence to the working styles of Pakistani brands. It also discusses the theoretical and
managerial implications for business in Pakistan.
Keywords: Strategic orientation, Market orientation, Propositions, Pakistani brands
1. Introduction
There are three major strategic orientations of the firm that determine the success or failure
of new products: customer, competitive, and technological orientations. According to Narver
and Slater 1990 customer orientation is the firm s complete understanding of its customers so
that the company can be able to create special value for its customers.
In view of Narver and Slater competitor orientation is the ability to respond competitors
actions and technological orientation. In the views of Cooper and Kanter is the R&D
orientation of the firm which means that how active is the firm in adopting new technologies
and hi-tech systems with sophesticated technologies for developing new products.
Interfunctional coordination allows for communication and exchange between the firm's
organizational units that are concerned with the three orientations (Moenaert et al. 1994).
Without interfunctional coordination, the new product development process would be ruled
by a single preoccupation (customer, competitive, or technological), which reduces the
innovation's potential performance. Therefore, interfunctional coordination is the mechanism
that enables the three necessary strategic orientations to work jointly.
2. Strategic Orientation and Successful Innovation
Narver and Slater's (1990) and Slater and Narver's (1994) articles are pioneer studies of the
impact of market orientation on firm performance. Firms that are marketoriented perform
better than the others. An important question, however, which has not been addressed in the
context of innovations, concerns the reasons for this finding; is it because these firms are able
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to design a better product and or is it because of a greater general effectiveness in marketing

an innovation? For answering this we would capitalize here the research of Hubert Gatignon
and Jean-Marc Xuereb. They investigate if firm orientation has positive effects in the way
that innovations are marketed, beyond the greater performance due to having an innovation
with superior characteristics. They also investigate the impact of the firm's strategic
orientation on the characteristics of the innovations. They argue that certain kinds of
innovations are better developed when a firm stresses certain strategic orientations. These
three(customer, competitor and technology) orientations are all needed for designing
innovations that have a strong relative advantage and tends to suggest the following
propositions:
P 1: The more technology-oriented firms are, the more radical their innovations and the
higher the innovation cost.
P 2: The more competitor-oriented firms are, the lower the costs of their innovations.
Inter-functional coordination enhances the synergies among the three types of orientation to
design innovations that have a strong relative advantage, are more radical, and have a lower
cost. Regarding strategic orientation and new product performance
P 3: Interfunctional coordination enhances the interactions among the three types of
orientation necessary to market an innovation successfully.
In contrast, a competitive orientation is actually detrimental to the innovation's marketplace
performance when demand is uncertain. In a situation of high demand uncertainty, all firms
have a hard time figuring out what the real market is and what users' needs are. What is
needed here is a customer orientation, but firms that are exclusively competitively oriented
tend to fall back on improper reliance on competitors' projects and products to infer market
needs. Competitive orientation enables the firm to do what it takes to reduce the innovation's
cost in high growth markets. Competitively oriented firms seem able to muster the willpower
to cut costs, rather than rely on product features to sustain high prices and justify cost
inefficiencies by product features. The story is different in declining markets, in which it
appears that as the firm's competitive orientation increases, the cost of the firm's innovations
also increases. A competitively oriented firm is typically engaged in strong rivalries and
counterattacks with its competitors. This competitive behavior drives up costs in the short
run. In a growing market, the firm tends to recover these costs and find itself well positioned,
but in declining markets, a competitive orientation leads firms to increase the innovation's
total costs (production, R&D, selling and general administration, and marketing) through
competitive warfare.
3. Business in Pakistan
For the deeper understanding of the business in Pakistan, We would like here to capitalize the
results of Brand Election 2010 by incorporating the election results. The Brand Elections are
built on authentic research data of Consumer Multimedia Index (CMi) which is the first of its
kind and the largest single-source data in Pakistan with a most robust and representative
10,000 sample across 50 cities covering all SECs of Urban Pakistan. The results have been
organized in a few ways to shed a deeper light into the dynamics of these brands. Specifically
these elections have produced the following results:
Top 10 Brands of Pakistan
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Top Brands by Target Audience
Top Brands by Region
Top Brands by 50+ Categories
4. Top 10 Brands of Pakistan
Being the crme de la crme of the Pakistani marketplace, these Top 10 brands are the ones
that have the strongest hold over the hearts and minds of the Pakistani people. Surf Excel leads
the pack, followed by National Foods at a close second. Glamour brand LUX shines in at
number 3, with Pepsi and Sooper high on their heels at the 4th and 5th position. Nokia,
Dawlance, Super Asia, and Mortein take the 6th, 7th, 8th and 9th position while Wall s closes
the top 10 listing.
1
2
3
4
5
6
7
8
9
10
Surf Excel
National (Foods)
Lux
Pepsi
Sooper
Nokia
Dawlance
Super Asia
Mortien
Walls

1
2
3
4
5
6
7
8
9
10
Surf Excel
National (Foods)
Lux
Pepsi
Sooper
Nokia
Dawlance
Super Asia
Mortien
Walls
11
12
13
14
15
16
17
18
19
20
Colegate
Sunsilk
Tapal Tea
Rose Petal
Sony
Fair and Lovely
Rafhan
Disprin
Shan Foods
Lifebuoy
Top Brands by Target Audience

Target Audience
Male
Female
Youth
Winner Brand
Nokia
National (Foods)
Pepsi
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Top Brands by Region

Region
Sindh
Balochistan
Punjab
Khyber Pakhtunkhawa
Winner Brand
Tapal Danedar
Lux
National (Foods)
Lux
Top Brands by 50+ Categories

The individual category results show which brands rule which constituencies.
Main Category
Communication
Durables
Financial
Food-Drinks
Food-Household
Food-Impulsive
Sub Category
ISP
Mobile Phone
MSP
Deep Freezer Brands
Fridge
Microwave Oven
Split/Window
TV
Washing Machine Brands
Bank Account
Banks Personal Loan
Credit Card
Debit card
CSD
Flavored Milk
JNSD
Mineral Water
Tea
Cooking Oil
Ghee
Jam/Jelly/Marmalade
Ketchup
Noodles
Packed Desserts
Pickles
Plain liquid Milk brands
Powdered Milk
Recipes
Spices
Biscuits
Cigarette
Fast food restaurant
Ice Cream
Salty Snack
Winner Brand
PTCL
Nokia
Ufone
Dawlance
Dawlance
Samsung
Haire
Sony
Super Asia
National Bank
National Bank
Bank Alfalah
Habib Bank
Pepsi
Pakola
Shezan
Nestle Pure Life
Tapal Danedar
Pakwaan
Dalda
National
National
Maggie Noodles
Rafhan
National
Milk Pak
Nido
National
National
Sooper
Gold Leaf
KFC
Walls
Lays
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Household Care
Insecticides
Laundry Detergents
Surface Cleaner
Tissue Paper
Mortien
Surf Excel
Harpic
Rose Petal
Personal Care
Analgesic
Baby Products
Diapers
Facial Wash/Cleanser
Hair Removing
Sanitary Napkins
Shampoo
Skin Care Cream/Lotion
Soap
Talcum/Pickly Heat Powder
Toothpaste/Toothpowder/Manjan
Airlines
Car
Fuel Stations
Motorcycle
Disprin
Johnson & Johnson
Pampers
Clean & Clear
EU
Always
Sunsilk
Fair n Lovely
Lux
Tibet
Colgate
PIA
Suzuki
Shell
Honda
Transportation
The results of the Brand Elections 2010 be it for overall Top 100 brands, by gender, by region
or even for the 50+ category constituencies, offers a great insightful gold mine for the
inquisitive mind.
If we look at the Top 100 brands make up vis a vis the category constituency they represent, 27
brands each have emerged from Household food and Personal care categories. This is
followed by 15 brands from Drinks , 9 from Durables , 8 each from Household care and
Impulsive food , and 5 from the Communication category. This in itself paints a bigger
picture for the categories width and depth of presence in consumers hearts and minds on one
end and the strength of the individual brands within each of these categories.
When one takes a deeper look at some of the Top 10 Brands of Pakistan, including the likes of
Surf Excel, Lux, Pepsi, Sooper, Nokia, and Dawlance, trying to decipher and understand what
separates them from the rest of the brands that have managed to find a place in consumer
preferences, the smart marketer can draw some very interesting learning.
Simplicity and clarity of purpose are the key ingredients of these top brands. They are well
chiseled and focused. Strong leadership, strong market orientation, intelligent thinking and
consistent commitment to core equity building more than anything else.
After gaining great insights from the results of Brand Election 2010 Pakistan, as such thirtyfour propositions are suggested for firms in the context of Pakistan.
Proposition 1: by Increasing customer-focus tends to increases in market share performance
in growing markets of Pakistan, i.e. the case of communication market in Pakistan. Examples
include PTCL (ISP), Nokia (Mobile Phone), Ufone (Mobile-phone Service Provider).
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Proposition 2: By Increasing competitor-focus tends to increase in market share performance

in stable and predictable markets in Pakistan, i.e. the case of food-drinks, and food-household
markets in Pakistan. Examples include Pepsi (Carbonated Soft Drink), Shezan (JNSD),
Nestle Pure Life (Mineral Water), Tapal Danedar (Tea), Dalda (Ghee), National (Jam, Jelly,
Marmalade, Ketchup, Pickles, Recipes and Species), Maggie Noodles (Noodles), Rafhan
(Packed Desserts), Milk Pack (Plain Liquid Milk Brands) and Nido (Powdered Milk).
Proposition 3: By Increasing in both customer-focus and competitor-focus tends to increases
in market share performance and decreases in ROI in the context of Pakistan, i.e. in the case
of Food-Impulsive market in Pakistan. Examples include Sooper (Biscuits), Gold Leaf
(Cigarette), Walls (Ice Cream), and Lays (Salty Snack).
Proposition 4: By shifting/replacing resources from external monitoring to internal operations
may tend to increases in ROI in stable and predictable markets in Pakistan, i.e. in the cases of
Transportation Market in Pakistan. Examples are Suzuki (Cars), Shell (Fuel Stations), and
Honda (Motorcycles) from Transportation Market.
Proposition 5: Greater the use of logic in strategic thinking process, the greater the firm in
rational thinking orientation, i.e. the case of Durables Market in Pakistan. Example is Super
Asia (Washing Machine).
Proposition 6: Greater the use of creativity in strategic thinking process, the greater the firm
in generative thinking orientation, i.e. the case of Rose Petal (Tissue Papers) from Household
Care Market in Pakistan.
Proposition 7: Greater the use of deliberateness in strategy formation process, the greater the
firm in planning orientation, i.e. the case of Harpic (Surface Cleaner) from Household Care
Market in Pakistan.
Proposition 8: Greater the use of emergentness in strategy formation process, the greater the
firm in incrementalism orientation, i.e. the case of Tapal Danedar (Tea) from Food Drinks
Market in Pakistan.
Proposition 9: Greater the use of revolution in strategic change process, the greater the firm
in discontinuous change orientation, i.e. the case of Fair & Lovely (Skin Care Cream /
Lotion), Clean & Clear (Facial Wash / Cleanser), and Pampers (Diaper) from Personal Care
Market, and Samsung (Microwave Oven) from Durables Market in Pakistan.
Proposition 10: Greater the use of evolution in strategic change process, the greater the firm
in continuous change orientation, i.e. the case of Walls (Ice Cream) from Food-Impulsive
Market, and Bank Alfalah (Credit Card), and Habib Bank Ltd (Debit Card) from Financial
Market in Pakistan.
Proposition 11: Greater the use of markets at business level strategy, the greater the firm in
outside-in orientation, i.e. the case of Ufone (Mobile Service Provider) from Communication
Market, and KFC (Fast Food Restaurant) from Food-Impulsive Market in Pakistan.
Proposition 12: Greater the use of resources at business level strategy, the greater the firm in
inside-out orientation, i.e. the case of Gold Leaf (Cigarette) from Food-Impulsive Market in
Pakistan.
Proposition 13: Greater the use of responsiveness at corporate level strategy, the greater the
firm in portfolio orientation, i.e. the case of Lux (Soap), and Sunsilk (Shampoo) from
Personal Care Market, and Walls (Ice Cream) from Food-Impulsive Market in Pakistan.
Proposition 14: Greater the use of synergy at corporate level strategy, the greater the firm in
core competence orientation, i.e. the case of Surf Excel (Laundry Detergent) from Household
Care Market in Pakistan.
Proposition 15: Greater the use of competition at network level strategy, the greater the firm
in discrete organization orientation, i.e. the case of PTCL (Internet Service Provider) from
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Communication Market, National Bank (Bank Account) from Financial Market, and PIA
(Airline) from Transportation Market in Pakistan.
Proposition 16: Greater the use of cooperation at network level strategy, the greater the firm
in embedded organization orientation, i.e. the case of Nestle Pure Life (Mineral Water) from
Food-Drinks Market acquired AVA, and Walls (Ice Cream) from Food-Impulsive Market
acquired Polka, in Pakistan.
Proposition 17: Greater the use of compliance in the industry context, the greater the firm in
industry evolution orientation, i.e. the case of Walls (Ice Cream) from Food-Impulsive
Market installed first waste treatment plant in Pakistan.
Proposition 18: Greater the use of choice in the industry context, the greater the firm in
industry creation orientation, i.e. the case of Cement and Fertilizer Plants are multi-fueled by
gas as well as coal in Pakistan.
Proposition 19: Greater the use of control in the organizational context, the greater the firm in
organization leadership, i.e. the case of Packages Ltd. in Pakistan.
Proposition 20: Greater the use of chaos in the organizational context, the greater the firm in
organizational dynamics orientation, i.e. the case of Tibet (Talcum / Prickly Heat Powder)
from Personal Care Market, and Lahore Development Authority (Govt. Department) in
Pakistan.
Proposition 21: Greater the use of globalization in the international context, the greater the
firm in global convergence orientation, i.e. the case of Haier (Air Conditioner) from Durables
Market in Pakistan.
Proposition 22: Greater the use of localization in the international context, the greater the
firm in international diversity orientation, i.e. the case of PEL from Durables Market in
Pakistan.
Proposition 23: Greater the use of profitability in organizational purpose setting, the greater
the firm in share holder value orientation, i.e. the case of Revo (Adam Motors Co.) from
Transportation Market in Pakistan.
Proposition 24: Greater the use of responsibility in the organizational purpose setting, the
greater the firm in stakeholder values orientation, i.e. the case of Shell-Tameer Program, and
Telenor Karo-mumkin Program.
Proposition 25: Greater the use of both logic and creativity in strategic thinking, the greater
the strategic thinking orientation of the Disprin (Reckitt and Benckiser) from Personal Care
Market in Pakistan.
Proposition 26: Greater the use of both deliberateness and emergentness in strategy formation
process, the greater the strategy formation orientation of the Rose Petal tissue papers from
Household Care Market in Pakistan.
Proposition 27: Greater the use of both revolution and evolution in strategic change process,
the greater the strategic change orientation of the TCS (Tranzum Courier Services) from
Logistics Market in Pakistan.
Proposition 28: Greater the use of both markets and resources at business level strategy, the
greater the business level strategy orientation of the Sabz PVC (Plastic) of Engro Polymer
and Chemicals Ltd. in Pakistan.
Proposition 29: Greater the use of both responsiveness and synergy at corporate level
strategy, the greater the corporate level strategy orientation of the Bandial, New Khan,
Daewoo from Lahore Urban Transport System in Pakistan.
Proposition 30: Greater the use of both competition and cooperation at network level
strategy, the greater the network level strategy level orientation of the Mobile Zone, and
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United Mobile from Communication Market, and Pakistan Tobacco Company (PTC) and
Lakson Tobacco Company (LTC) from Food-Impulsive Market in Pakistan.
Proposition 31: Greater the use of both compliance and choice in the industry context, the
greater the market orientation of the small and medium factories of soap, detergent, and
cooking oil in Rahimyar Khan, Pakistan.
Proposition 32: Greater the use of both control and chaos in the organizational context, the
greater the market orientation of the Pakistan Tobacco Company.
Proposition 33: Greater the use of both globalization and localization in the international
context, the greater the market orientation of the Pepsi from Food-Drink Market in Pakistan.
Proposition 34: Greater the use of both profitability and responsibility in organizational
purpose setting, the greater the market orientation of the Sona Urea and DAP from Fertilizers
Market in Pakistan.
5. Implications and Discussions
5.1 Theoretical Implications
Both the marketing and strategy literature state that a market orientation and/or a technology
orientation increases the commercial performance of an innovation. This research has studied
simultaneously customer, competitive, and technological orientations and their relation to the
innovation characteristics and their commercial performance. Specifically, this research
contributes to the marketing literature on new product development by (1) considering
technological orientation in addition to the other strategic orientations discussed in previous
strategic orientation research, (2) viewing interfunctional coordination as a construct distinct
from market orientation, and (3) evaluating innovation characteristics as a result of the
strategic orientation of the firm and as determinants of the new product commercial
performance.
5.2 Managerial Implications
These propositions have direct managerial implications:
This research shows the relations between a new product's performance and the orientation of
the firm: a customer orientation, a competitor orientation, and a technology orientation.
6. Recommendations
The recommendations for the strategic orientation to emphasize are not unconditional. This
provides some guidelines regarding which strategic orientation or combination leads to
superior performance, depending on the market facing the firm. The role of interfunctional
coordination appears limited. Although it is clear that innovations are often driven by R&D,
the interface of marketing and R&D is still often problematic. The mechanisms considered in
the measure of interfunctional coordination appear to be insufficient to promote the benefits
that should be derived from the customer orientation represented by marketing departments.
Nevertheless, this research demonstrates that a customer orientation is particularly useful to
marketing an innovation in environments in which demand is uncertain. It is clear from this
study that (1) innovation radicalness and differentiation for competitive advantage are key to
the successful marketing of new products and (2) different firm orientations have different
effects, depending especially on demand uncertainirty level in the market.
7. Conclusion
This paper focuses upon the construct of strategic orientations, research propositions, and
managerial implications for the business in Pakistan, especially with reference to the brands
working in Pakistan. Firms like Telenor, Ufone, and Mobilink, are in transition period of
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learning organization, in order to increase their competitive advantage and market share. They
are focusing on customer care, effective delivery of services to their customer based on
knowledge management of customers. Large public sector organizations like civil bureaucracy,
PEPCO, PIA, and Police are not responding to the concept of learning organization yet. Their
human and material capital is under-utilized and severely threatened by wasted and losses. Due
to centralization of authority and decision making in large public sector organizations
customers complaints and services are mismanaged. Similarly employees benefits and
services also mismanaged. This is caused due to time delay and ill-efficiency in taking prompt
and effective decisions to mitigate the grievances of customers as well as employees. Here in
Pakistan, most of the organizations focus on personalized fashion, which means are being run
on the likes and dislike of bosses, CEOs, and MDs. Nepotism is also a prevailing curse in our
organizations. Organization structure is not organic and open but enmeshed with hierarchical
dominance, bureaucracy and red-tapism
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Referrences
Cooper, Robert G, (1984b), "The Strategy-Performance Link in Product Innovation;' R&D
Management, 14 (October), 247-59.
Kanter, Rosabeth M. (1988), "When a Thousand Flowers Bloom: Structural, Collective, and
Social Conditions for Innovation in Organization" in Research in Organizational
Behavior, Vol 10, B. M. Staw and L. L. Cummings, eds. Greenwich, CT. JAI Press,
169-211.
Narver, J.D. and Slater, S.F. (1990), ``The effect of a market orientation on business
profitability'', Journal of Marketing,Vol. 5, October, pp. 20-35.
Narver, J.D. and Slater, S.F. (1998), ``Additional thoughts on the measurement of market
orientation: a comment on Deshpande and Farley'', Journal of Market-Focused
Management, Vol. 2 No. 3, pp. 233-6.
Narver, J.D., Slater, S.F. and Tietje, B. (1998), ``Creating a market orientation'', Journal of
Market- Focused Management, Vol. 2 No. 3, pp. 241-56.
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EVALUATION OF THE FACILITIES IN THE TEACHING
OF SCIENCE AT SECONDARY SCHOOL LEVEL
IN DISTRICT MARDAN
VOL 2, N O 10
Listed in ULRICH S
Bibi Asia Naz, Rahmat ullah Shah, Javed Iqbal & Umar Ali Khan
Institute of Education & Research, Gomal University
Dera Ismail Khan, Khyber Pakhtunkhwa, Pakistan
Abstract
The problem under investigation was to evaluate the facilities of teaching of science at
secondary school level in Distt: Mardan. The population of the study comprised all students
of secondary school in Mardan. The researcher randomly selected 8 schools (4 boys and 4
girls, 4 urban and 4 rural). Ten students of 9th and 10th selected from each school. Likert type
scale having 20 items administered to students. In order to test the significant difference
among the mean scores obtained from the perception of students about the facilities in the
teaching of science at their school T-test was used as statistical technique. Significant
difference was found between the views of male and female students regarding the evaluation
of science teaching facilities at secondary school level. No significant difference was found
between 9th and 10th class student s opinions on the evaluation of facilities in teaching of
science at secondary school level. Significant difference was found between the views of
rural and urban students on the evaluation of facilities in teaching of science at secondary
school level.
Keywords: Evaluation , Facilities , Teaching , Science , Secondary School Level , District
Mardan
1. Introduction
Pakistan is a developing country. Since independence various governments have made efforts
to improve the quality of education, with the provision of educational facilities. Pakistan might
be able to meet the challenges of the future; the efforts are to be made for the improvement of
instructional materials, physical facilities and the working conditions. Academic institution i.e.
schools, colleges and universities plays a distinctive role for the refinement of personality of
individual i.e. modification of his behavior, and harmonious development of the whole
organization through efficient teaching-learning process. The appropriate use of instructional
materials and adequate facilities is one of the determinant factors of the quality education.
According to dictionary of education (1945, p.361)
Science deals with the phenomenon of nature closely related with this world composed of
matter, its facts and principles are developed through the collection and interpretation of data
from observation and experiments in contrast with scientific concept developed by purely
theoretical or philosophical means.
Ilyas (1985), Science is a body of knowledge. It is just like a collection of knots in a larger
net, the knots are specific facts or isolated bits of information. These knots are interlinked;
they produce bigger knots called concepts. When the bigger knots are interlinked, they
generate big ideas i.e. principles laws and theories.
Do they not look at the sky above them? How we have built it and made it beautiful and free
of all faults. And the earth, we have spread it wide, and set upon it mountains firm, and
caused it to bring forth planets of all beauteous kinds. Thus offering an insight and a
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reminder up to every human being who willingly turn God. (Quaff 50, Ayats 6-8). Quality
of education depends on the quality and skills of the teacher. For better education in science,
there is a need to improve the professional qualification of the science teachers and to
provide better teaching facilities in science.
Kalim (1993) states: that no nation can think of progress without the effort of its teachers.
The teacher is a planner, messenger, supervisor, evaluator, motivator, guide and human
architect. There is no replacement of teacher in education system. Here the teachers have
direct interaction with students and immediate feedback is provided to them. There is little
progress without education and there is little education with out teacher. The commission on
national education government of Pakistan, (1960) noted, No education system is better than
the teachers who serve it
According to Behrman, (cited in Rasool 2007) In Pakistan, the quality of primary and
secondary education has a declining trend. It is realized that science education in particular is
reaching lowest ebb and needs to be improved urgently. At the time of independence and
thereafter there remained acute shortage of teachers, laboratories were poor and ill equipped
and curriculum had little relevance to present day needs .
Science subjects involve practical activities. Without certain physical facilities e.g. libraries,
science laboratories, science equipments, A.V aids etc, a satisfactory teaching programme is
almost impossible. Throughout the world, science education is being reconsidered,
redesigned and replanned. Effective science teaching is based on training of students in
scientific processes such as observation, measurement etc. this needs involvement of students
in practical activities for which there is no substitute. This demands provision of physical
facilities in the science subject.
Richardson (1959) stated that the school building, science facilities, science room, laboratory
equipments, store for materials related to science, mass media and qualified science teacher
facilitate teaching learning process in the school.
The physical facilities play an important role in the teaching of science subjects (physics,
chemistry, biology) we know that science is a practical subject and that the pupil always like
doing something rather than listening. There are many concepts and principles of science,
which are difficult for the pupils to understand unless they themselves do the experiments
and find the truth.
It is useful to apply what has been already learnt. Experiments need to be covertly planed and
should have a purpose. The planned experiments provide situations leading to desired
thinking and generate interest and discussion.
To make teaching learning interesting and enjoyable.
To develop science processes and science skills.
To develop first hand experience of phenomena.
To apply what has been learnt.
To solve problems.
To initiate questioning discussion.
To help slow learners and challenge.
Serpell (1993) noted the disappointment of parents with the present education systems and
articulated support for more relevant curricula; which will be closely related to the daily lives
of students and provide practical skills for students.
Odaga & Heneveld (1995) asserted that the problem is even more severe with girls where
gender bias in subject choices and cultural factors confines girls chances of progress.
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2. Objectives of the study

i. To evaluate the present condition of laboratories for practical.
ii. To know the difference of views of students by location, gender and class about
availability of facilities for science teaching.
iii. To give suggestions for improvement.
3. Significance
Education plays very important role in the personality development of individuals. Education
at all levels is necessary for the fulfillment of needs of both individual & society. No nation
can exist without education. Good education system can maintain the prosperity & the
development of a country. In Pakistan education is classified into three levels, primary,
secondary and higher education. Secondary sector of education is in need of high priority;
secondary school not only in need of teachers but it requires well-equipped laboratories for
teaching of science subjects. All science subjects required well-equipped laboratories because
in our schools laboratories condition is not satisfactory. It is usually observed that there is
lack of desired equipments in laboratory. Everyone recognize that science laboratory will be
made equipped but in this sector there is no appropriate information available regarding the
deficiencies of science laboratories. By this study the researcher will be able to give rational
information on laboratory conditions. The findings of the study will help the education
planners, administrators and other authorities to facilitate the secondary schools with science
equipments other physical facilities and to identify the students problem and their solution
associated with the science teaching at secondary level.
4. Hypotheses
i.
There is no significant difference between the views of rural schools students & urban
schools student opinions regarding the evaluation of the facilities in the teaching of
science at secondary school level..
ii. There is no significant difference between the views of male & female students
views on the evaluation of the facilities in the teaching of science at secondary school
level.
iii. There is no significant difference between the opinions of 9th & 10th classes students
on the evaluation of the facilities in the teaching of science at secondary school level.
5. Results
Table 1: Comparison between male and female students

Gender
No
Mean
S.D
d.f
T-test
P-value
Male
80
71.87
7.04
148.88
4.587
.000
Female
80
65.98
9.06
Table 1 shows that on average male students opinion about the facilities in the teaching of
science is greater (M=71.87, SD=7.04) than female (M=65.98, SD=9.06). And the difference
was found to be significant [t (158) = 4.586, p = 0.000]
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Table 2: Comparison between 9th and 10th class students

Class
No
Mean
S.D
9th
80
68.82
9.05
10th
80
69.03
8.20
d.f
158
t-test
-0.156
p-value
0.877
Table.2. Shows that average score of 10th class student about the facilities in the teaching of
science is greater (M=69.03, SD=8.20) than 9th class students (M=68.82, SD=9.05). However
the difference was not found to be significant [t (158) = -0.156, p = 0.877].
Table 3: Comparison between rural and urban
Locality
No
Mean
S.D
Urban
80
72.17
7.5
Rural
80
65.68
8.4
d.f
t-test
P-value
158
5.128
.000
Table.3. Shows that on average the urban schools has greater (M=72.17, SD=7.5) facilities in
the teaching of science than rural schools (M=65.68, SD=8.4). There is significant difference
[t (158) = 5.128, p = 0.000].
6. Conclusions
The study revealed that
i.
Male and female students have different views on the evaluation of the facilities in
the teaching of science at secondary school level.
ii. The students of 9th and 10th class have similar opinion on the evaluation of the
facilities in the teaching of science at secondary school level.
iii. The students enrolled in urban and rural schools have different opinions on the
evaluation of facilities in the teaching of science at secondary school level.
7. Recommendations
In Pakistan there are separate schools for girls and boys at secondary school level. Male
teachers are appointed in boy s schools and female teachers are appointed in girl s schools.
Male supervisory staff supervises male teachers in boys schools and female supervisors
supervise female teachers in girls schools. The purpose of the study was to evaluate the
facilities in the teaching of science at secondary school level. Significance difference was
found between male and female students regarding the evaluation of facilities in the teaching
of science at secondary school level. Similarly significant difference was found between the
views of rural and urban students on the evaluation of facilities in teaching of science at
secondary school level.
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So it is highly recommended that facilities e.g. separate science rooms for each science
subject, science teachers, apparatus, and other needed laboratory facilities should be provided
to male and female and urban and rural science students of secondary school on the same
proportion. So that all students can get benefits from education on equal basis.
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References
Good, V. C. (1945). Dictionary of education. Me-Graw Hill, Book Co-inc. Newyark.
Ilyas J. E. A. (1985). Report of the Workshop on the Competencies of Science Teacher,
Islamabad.
Govt; of Pakistan. (1960). Report of the Commission on National Education. Majority of
Education, Islamabad.
Kalim, S. M. (1993). Studies in Education. National Education Book Foundation, Islamabad
ODAGA, A. & Heneveld, W. (1995). Girls and schools in Sub-Saharan Africa: From
analysis to issues in basic education in developing countries. An Exploration of
Policy Options for Improved Delivery to Action. Technical Paper no.298.
Washington DC: The World Bank.
Richardson, J. S. (1959). Science Teaching in Secondary Schools. Engle Wood Cliff.
Rasool, G. M. (2007). Education in Pakistan: The key issues, problems and the new
challenges. Journal of Management and Social Sciences, Vol. 3, No. 1, 47-55
SERPELL, R. (1993). The significance of schooling: Life journeys in an African society.
Cambridge
University Press.
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Listed in ULRICH S
EMPLOYEE ENGAGEMENT PRACTICES IN INDIAN

BPO INDUSTRIES- AN EMPIRICAL INVESTIGATION
B.THIAGARAJAN
MBA,M.PHIL
MLM,M.PHIL,PGD HRM(Phd)
Indra Ganesan College of Engineering , Assistant Profsser, Management Studies
Tiruchirappalli, Tamilnadu
V.RENUGADEVI
BE,MBA
Lecturer , Management Studies
Department of Management Studies, Indra Ganesan College of Engineering
Manikandam Trichirappal
Abstract
The purpose of this research article is to introduce employee engagement and key research on
engagement related factors in BPO Industries in India. The author s conducted a literature search
on employee engagement and interviews with 126 executives. Career development, performance
appraisal and motivation factors are connected to employee engagement. The implications are
that leaders should be educated on engagement, career development opportunities are
particularly important and that performance improvement should champion work life balance,
these practices are useful to increase engagement.
Key words: Employee engagement, Career Development, Correlation, Performance Appraisal
1. Introduction
Employee engagement is the level of commitment and involvement an employee has towards
their organization and its values. An engaged employee is aware of business context and works
with colleagues to improve performance within the job for the benefit of the organization. It is a
positive attitude held by the employees towards the Organization and its values. An engaged
employee is a person who is fully involved in and enthusiastic about, his or her work. Truly
engaged employees are attracted to, and inspired by, their work, committed ( I am dedicated to
the success of what I am doing ), and fascinated ( I love what I am doing ). Engaged
employees care about the future of the company and are willing to invest the discretionary effort
exceeding duty s call to see that the organization succeeds.
Employee Engagement exists when the employee feels:
i.
Physically
ii. Intellectually
iii. Emotionally attached to their work.
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2. The Nine factors that defines employee engagement

i.
Senior management has sincere interest in employee s well being
ii. Company provides challenging work
iii. Employees have appropriate decision-making authority
iv.
Company cares a great deal about customer satisfaction
v.
Employees have excellent career opportunities
vi.
Company has a reputation as a good employer
vii. Employees work well in teams
viii. Employees have resources needed to perform jobs in a high quality way
ix.
Employees have decision-making input
x.
Senior management communicates clear vision for long-term success.
3. The Ten C s of employee engagement
The leaders engage employees heads, hearts, and hands through the Ten C s of employee
engagement they are 1.Connect 2. Career 3.Clarity 4.Concey 5.Congratulate 6.Contribute 7.
Control 8.Collaborate 9.Credibility 10. Confidence
4. Review of Literature
Cristina de Mello e Souza Wildermuth et al. (2008) The purpose of this two-part article is to
introduce engagement and review key research on engagement-related factors. The author
conducted a literature search on employee engagement and pilot interviews with ten
professionals. Environment, leadership, job, and individual factors are connected to employee
engagement. Environmental engagement factors include congruency between organizational and
individual values, the quality of the workplace relationships, and work-life balance. Leadership
engagement factors include vision and integrity. Job engagement factors include the
meaningfulness of the job, its level of challenge, and the amount of control the employee has on
the job. Finally, individual factors related to engagement include resilience, locus of control,
active coping style, self-esteem, neuroticism, and extraversion. The author suggests that the
connections (or the match) between organizational, leadership, job, and individual characteristics
is particularly relevant for engagement.
Kate Pritchard (2008) draws from the ORC Putting it in Perspective Report, which annually
presents the findings of employee research projects from a vast benchmarking database. This
provides an insight into the key factors that influence employee engagement, with comparisons
across different sectors. The key finding of the paper is that while employee engagement is stable
in the UK overall, organizational pride and satisfaction levels are markedly lower in public
sector organizations. Similarly employee loyalty in this sector is low; highlighting that there is
work to be done for managers within this sector. Furthermore, the report has shown that
engagement takes a hit across all sectors during times of change. A well-crafted employee
engagement survey enables an understanding of current levels of engagement. To improve
employee engagement levels, and help combat the challenges of change management, the
principles of say, stay and strive can act as a basis for assessing the level of employee
engagement, whether through surveys or other means. Another key element for organizations to
bear in mind is the Employee Lifecycle , which can be a useful tool for understanding the
workforce.
V.Rama Devi (2009) highlighted the significance of creating a retention-rich organizational
culture and discusses the drivers of employee engagement. The paper advances the view that
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finding and retaining talent are critical elements of an organization's ability to improve
profitability, manage costs, grow by acquisition, innovate, develop new products and services,
and discover new markets. Corporate cultures characterized by teamwork, pleasant working
conditions, considerate treatment of employees, growth opportunities, flexible-working practices,
and good leadership and management practices foster employee engagement.
i.
ii.
To identify the major engagement practices that influences the employees in Indian BPO
Industries
To know the relationship between employee engagement practices and Career
Development
6. Methodology
The study is a descriptive one. Primary data was collected by the researcher with the help of
structured questionnaire administered to the Middle level executives of 5 BPO Industries in
Chennai and Coimbatore. The method adopted to get the data was Interview Schedule. 126
middle level executives from those 5 BPO Industries constitute the sample size. Random
sampling method was adopted by using lottery method. Due to various reasons organizations
name is not disclosed in this study.
7. Hypotheses
i.
There is relationship among the factors that influence employee engagement practice.
ii. There exist relationship between Employee Engagement and Career Development.
8. Reliability Statistics
Table 1
Cronbach's
Alpha
.845
N of
Items
21
An examination had been made from the reliability of the data to check whether random error
causing inconsistency and in turn lower reliability is at a manageable level or not, by running
reliability test. From table 1 it is clear that values of Coefficient alpha (Cronbach s Alpha) have
been obtained, the minimum value of Coefficient alpha obtained was 0.845.This shows data has
satisfactory internal consistency reliability.
9. Statistical Tools Used
Using Statistical Package for Social Sciences (SPSS) the following tools were administered in
this study 1) Factor Analysis 2)Correlation and 3)Reliability Test.
9.1 FACTOR ANALYSIS
Dimension: Employee engagement practices
KMO and Bartlett's Test
The individual statements on employee engagement practices was examined using factor
analysis based on 21 individual statements and the reliability of the samples collected was tested
for internal consistency of the grouping of the items.
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Table - 2
Kaiser-Meyer-Olkin Measure of
Sampling Adequacy.
Bartlett's Test of Sphericity
0.882
Approx. Chi-Square
980.270
df
210
Sig.
.000
KMO measure of sampling adequacy is an index to examine the appropriateness of factor
analysis. High values between 0.5 and 1.0 indicate factor analysis is appropriate. Values below
0.5 imply that factor analysis may not be appropriate. From the above table it is seen that Kaiser
Meyer Olkin measure of sampling adequacy index is 0.882 and hence the factor analysis is
appropriate for the given data set. Bartlett s Test of Sphericity is used to examine the hypothesis
that the variables are uncorrelated. It is based on chi- Square transformation of the determinant of
correlation matrix. A large value of the test statistic will favor the rejection of the null
hypothesis. In turn this would indicate that factor analysis is appropriate. Bartlett s test of
Sphericity Chi-square statistics is 980.270, that shows the 21 statements are correlated and hence
as inferred in KMO, factor analysis is appropriate for the given data set.
Table 3 - Total Variance Explained
Initial Eigen values
Extraction Sums of Squared
Component
Loadings
% of
Cumulative
% of
Cumulative
Total
Variance
%
Total
Variance
%
1
10.613
50.536
50.536
10.613
50.536
50.536
2
1.559
7.422
57.959
1.559
7.422
57.959
3
1.335
6.359
64.317
1.335
6.359
64.317
4
1.058
5.036
69.354
1.058
5.036
69.354
5
0.931
4.432
73.786
6
0.844
4.017
77.803
7
0.699
3.329
81.132
8
0.585
2.787
83.919
9
0.515
2.453
86.372
10
0.429
2.041
88.414
11
0.423
2.013
90.427
12
0.373
1.777
92.204
13
0.310
1.474
93.678
14
0.254
1.209
94.887
15
0.243
1.156
96.043
16
0.208
0.993
97.035
17
0.169
0.805
97.841
18
0.148
0.704
98.544
19
0.127
0.602
99.147
20
0.094
0.448
99.595
21
0.085
0.405
100.000
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Extraction Method: Principal Component Analysis.

Eigen Value represents the total variance explained by each factor. Percentage of the total
variance attributed to each factor. One of the popular methods used in Exploratory Factor
Analysis is Principal Component Analysis, Where the total variance in the data is considered to
determine the minimum number of factors that will account for maximum variance of data.
Table 4
Rotated Component Matrix
Component
1
Ability job fit
0.077
0.038
0.479
0.669
Work environment
0.083
0.183
0.798
0.103
Decision making process
0.347
0.158
0.720
0.306
Materials & equipments
0.547
0.142
0.629
-0.016
Team member
0.628
0.292
0.397
0.077
Autonomy & authority
0.211
0.351
0.567
0.524
Learning & choice of assignment
0.634
0.525
0.123
0.080
Reward & recognition
0.729
-0.005
0.259
0.421
Non-monetary recognition
0.624
0.319
-0.009
0.424
Feedback given by superior
0.193
0.247
0.054
0.757
Opportunity to do best every day
0.141
0.750
0.244
0.211
Organization policy
0.579
0.471
0.363
0.243
Career development process
0.162
0.361
0.032
0.671
Opportunities to grow in career
0.406
0.561
0.177
0.465
Performance evaluations
0.447
0.318
0.515
0.167
Previous performance appraisal

Guidance & support in achieving
the target
0.325
0.553
0.529
-0.051
0.104
0.601
0.222
0.282
Recognition for doing good work

Encouraged to think independently
& creatively
0.632
0.249
0.248
0.407
0.494
0.611
0.190
0.285
Opportunity to acquire knowledge
0.376
0.709
0.094
0.257
0.266
0.247
0.043
Training to develop skills & ability

0.813
Extraction Method: Principal Component Analysis.
Rotation Method: Varimax with Kaiser Normalization.
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Interpretation of factors is facilitated by identifying the statements that have large

loadings in the same factor. The factor can be interpreted in terms of the statement that loads
high on it.The factors of a study on employee engagement practices comprises of 21 individual
statements. Out of 21 statements, 4 individual statements contribute more towards employee
engagement practices.
The statements are:
Training provided by the management to develop skills and ability
At work lot of opportunity to do best every day
A safety and conducive working environment is being provided by the management
Feedback Mechanism is proper.
Table 5
Correlations
Career
Performance
Responsibility Motivation Development
Evaluation
Competency
Responsibility
Pearson
1
Correlation
Sig. (2-tailed)
N
126
Motivation
Pearson
.740(**)
1
Correlation
Sig. (2-tailed)
.000
N
126
126
Career
Pearson
.674(**)
.704(**)
1
Development
Correlation
Sig. (2-tailed)
.000
.000
N
126
126
126
Performance
Pearson
.674(**)
.704(**)
1.000(**)
1
Evaluation
Correlation
Sig. (2-tailed)
.000
.000
.000
N
126
126
126
competency
Pearson
.757(**)
.811(**)
.637(**)
.637(**)
1
Correlation
Sig. (2-tailed)
.000
.000
.000
.000
N
126
126
126
126
126
** Correlation is significant at the 0.01 level (2-tailed).
Table 5 shows the correlations among the 5 independent variables

10. Career Development
The correlation between the variables career development and responsibility at work was .674
correlated and significant, correlation between career development and motivation is .704 highly
correlated and significant, correlation between career development and performance appraisal is
highly correlated and highly significant and correlation between career development and
competency is .637 correlated and highly significant. All the factors of employee engagement
practices are positively correlated with career development. Performance appraisal and
motivation in employee engagement is highly correlated with career development and it s
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significant at 0.01 levels. There exists relationship between employee engagement practice and
career development
11. Conclusion
Employee Engagement is a positive attitude held by the employees towards the
organization and its values. It is rapidly gaining popularity, use and importance in the workplace
and impacts organizations in many ways. Employee engagement emphasizes the importance of
employee communication on the success of a business. An organization should thus recognize
employees, more than any other variable, as powerful contributors to a company's competitive
position. Therefore employee engagement should be a continuous process of learning,
improvement, measurement and action. Though practically it s not possible to engage employee
fully towards the organization but we can make the employee to have active participation in their
job by means of proper guidance (in job, career development, performance appraisal, motivation,
and competency).
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References
Cristina de Mello e Souza Wildermuth, Patrick David Pauken (2008) A perfect match: decoding
employee engagement
Part I: Engaging cultures and leaders, Industrial and
Commercial Training, Vol.40 (3), pp 122 128
Gerard H. and Dan Crim (2006). "The Ten C's of Employee Engagement". Ivey Business
Journal. Retrieved on 2006-11-09.
Human resources Development (HRD 2009)-News letter, A monthly Publication of the National
HRD network, Vol. 24(10),pp.121-123
Kate Pritchard (2008) Employee engagement in the UK: meeting the challenge in the public
sector, Development and Learning in Organizations, Vol.22 (6 ),pp. 15-16
C.R.Kothari, Research Methodology Methods & Techniques, New Age International (p) Ltd,
(2004)
C.B.Mamoria & S.V.Gankar, Personnel Management, Himalaya Publishing House
V.Rama Devi (2009) Employee engagement is a two-way street, Human Resource Management
International Digest, Vol.17(2),pp 3 - 4
Steve Batts Getting engaged HR Magazine society for Human Resource Management, Feb.
2004.
Stephen P.Robbins, Organizational Behavior Concepts , Controversies and applicants , India pvt
Ltd ., New Delhi , 3rd edition ,1984
www.siescoms.edu/images/pdf/reserch/working_papers/employee_engagement.pdf
www.hr-nipmkc.org/images/mag/02.pdf
www.hrmguide.net/usa/commitment/employee-engagement.htm - 24k
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The Extent of Awareness of Managers of Jordanian
VOL 2, N O 10
Listed in ULRICH S
Industrial Companies regarding the Importance of the

Commodity Packaging Quality from the Viewpoint of the Consumer
Dr. Fathi Abdullah Al-Share
Marketing Department, Jadara University, Jordan
Dr. Basim Anagreh

Marketing Department, Jadara University, Jordan
Abstract
The purpose of this study was to investigate the extent of awareness of managers of Jordanian
industrial companies regarding the importance of the commodity packaging quality from the
viewpoint of the consumer through a combination of the following elements: the quality of the
packaging design, the symbolic dimension of the packaging, and the role of the packaging in
enhancing the position of the company. A questionnaire, which was prepared for this purpose,
has been distributed on a sample of the research community. The study concluded that there is a
high level of awareness among the managers of Jordanian food industry companies from the
viewpoint of consumers between the quality of the packaging design, the symbolic dimension of
the packaging, promoting the company's position and the size of demand for the Jordanian food
products, whether theses factors were taken together or individually. The study recommended
working on providing information that helps design the packaging, which contributes to the
achievement of the objectives of the company regarding the competition in the lowest cost, as
well as raising the level of the qualification of the companies specialized in producing packaging
in both the scientific and the practical aspects, which serve the promotional objectives of the
industrial companies with a high degree of professionalism.
Keywords: Extent , Awareness , Managers , Jordanian , Industrial companies, Importance ,
Commodity Packaging Quality , Consumer
1. Introduction
During the past twenty years, the world, in light of the openness and international conventions,
witnessed main transformations represented in the trend of the manufactured companies toward
international markets, which contributed to the increasing of the volume of trade exchange, and
the competition between the producers in the markets of goods and services. This marketoriented trend led the food companies to reconsider their marketing strategies especially with
regard to designing the packaging of the product and adopting a packaging policy that is in line
with the tastes and requirements of consumers in those markets.
Packaging design is considered one of the factors influencing the purchasing behavior
because of its consuming dimensions and implications in creating a mental picture for the
consumer, so that some of the thinkers of marketing called packaging "The Fifth Element" after
product, price, distribution and promotion (Kotelr, 2000 P414). In light of the technological
advances and increasing the market competition, many international companies highlighted their
products by focusing on the packaging because of its promotional dimensions as well as other
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components contained in the packaging such as the brand, identity, shape, and color (Silayoi,
Speece, 2007, P 0.114).
Based on the above, the researchers said that it is necessary to draw the attention of
managers of food products companies regarding the importance of the packaging role in
highlighting the food products of Jordan in the local and regional markets as compared with
those products imported from the neighboring countries.
2. Problem of the study
Given the location of the product as one of the most important elements of the marketing
mix, the role of packaging in differentiating the product and its components , it was important for
the managers of Jordanian food industry companies especially the marketing managers to be
aware of this fact and give the packaging design an active role because of its materialistic and
symbolic dimensions that contribute to the promotion and affirmation of the position of the
company and its products in the minds of consumers.
Based on the foregoing, the purpose of this study is highlighted by answering the
following questions:
i.
What is the extent of understanding the packaging design quality by the managers of food
products companies?
ii. What is the extent of understanding the symbolic dimension of packaging by the
managers of food products companies?
iii. What is the extent of understanding the role of packaging in promoting the status of the
company by the managers of food products companies?
3. Importance of the study
The importance of this study lies in drawing the attention of managers of food products'
companies to the importance of packaging generally in increasing the volume of sales due to the
intense market competition at the local and regional levels, as the sector of Jordanian food
products represents 28 per cent from the GDP according to the report of Amman Chamber of
Industry (Amman Chamber of Industry Report, 2009).
The objectives of the study include the following:
Informing the managers of Jordanian food industry companies about the importance of
commodity packaging as one of the most important methods of competition in the
market.
Identifying and analyzing the most important factors affecting the design of commodity
packaging.
Defining the role of packaging and its dimensions in the formation of the mental image
among consumers.
Recognizing the reality of the Jordanian food industry and the overall challenges facing
this sector.
Recognizing the promotional role in which the commodity packaging contributes.
5. Limitations of the study
The main difficulties faced by the researchers were as follows:
i.
Few studies on the cognitive side of the importance of packaging quality for the
Jordanian food industry companies are under study.
ii. Lack of cooperation by some managers of companies in the study in expressing their
opinion about the reality of their products compared to the competing products.
6. Questions of the Study
The main question of the study from which the following questions are divided is:
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What is the level of awareness among the managers of Jordanian food products
companies regarding the importance of the cost of packaging design from the viewpoint
of the consumer and the size of demand?
Sub-questions:
First question: What is the level of awareness among the managers of Jordanian food products
companies regarding the importance of packaging design from the viewpoint of consumers?
Second question: What is the level of awareness among the managers of Jordanian food products
companies regarding the symbolic dimension of packaging from the viewpoint of consumers?
Third question: What is the level of awareness among the managers of Jordanian food products
companies regarding the packaging role in enhancing the position of the company from the
viewpoint of the consumers?
7. Theoretical framework and previous studies
With the increasing of commodity-like products and the domination of selective
consumption, the importance of commodity packaging has grown under the international
openness , the importance of packaging with its inherent information was confirmed that it
represents an important role for the consumer, who reached to a high degree of awareness and
consumer culture.
Here we will discuss the importance of packaging, the evolution of packaging technology,
the costs of packaging, packaging definition, and packaging functions by highlighting the various
elements of packaging.
8. The importance of packaging
Packaging is considered one of the components of the product and it is one of the main
components of the marketing policies, especially in light of the huge growth in stores with selfservice that packaging plays roles different from the traditional role, keeping the goods, and it
contributes to the demand for goods, selling them through the creation of a mental image for the
consumers, leaving an impression of the item and buying it at any time. This is in addition to the
data that it contains regarding the usage method, the date of production which is important to the
consumer, as well as highlighting the brand that distinguishes the product from other competitive
products.
However, there are some factors that contributed to targeting the packaging as a marketing tool,
including:
i.
Self-service
Packaging is considered the first connecting point between the consumer and the product
and it reflects the status of the product which is sold on the basis of self-service (Cravens
& Pierce, 2006).
ii. Consumer affluence
High consumer income means a boost of the largest amount of money in exchange for a
better packaging.
iii. Company and brand Image
Packaging contributes to informing the consumer with the brand, as well as the
manufacturer.
iv.
Innovation opportunity
The creative packaging brings many benefits to the consumers as well as the profit for the
producers through color , shape and size in addition to the brand.
v.
Packaging at the point of sale
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Packaging is regarded as one of the most important factors that contribute to and
influence the purchasing decision for the consumer in many convenience goods at the
point of sale. The packaging is also considered a silent sale way on the shelf
(Rowan,2000, P26).
9. Development of packaging Technology:
Technological development, international openness and the proliferation of self-service shops
"supermarkets" enabled the goods to depend on themselves completely through the link between
the packaging and the consumer, which led the productive companies to the development of
materials from which packaging is made because they contribute to achieve the desired benefits
of protecting and promoting the product because of the inherently dynamic and changing nature
of packaging.
10. Definition of packaging:
There are many efforts by scientists in their interests regarding the definition of
packaging that the first interest was focused on professionals and producers, but the importance
of packaging as a means of communication has led to a growing interest by marketing scientists
that they defined marketing from two sides: technical and marketing. Regarding the technical
side, packaging is defined as "the art, science and technology of preparing the products for
marketing and selling". Regarding the marketing side it is known as "a means to ensure the safe
delivery of the product to the final consumer in good condition and in the lowest cost"
(International trade center, 1992, p27). Mualla, 2008, p. 110 also noted that packaging is a set of
activities for the design and production of the frame, content or container of the commodity.
11. Packaging as a cognitive tool
The well-designed packaging contributes to create a mental picture of the consumer and it may
be regarded as a promotional tool for the item; it is also a cognitive tool operated as a brand
because of its ability to influence the mind of the consumer, especially in the delivery of
symbolic meanings to the consumer as well as transferring a picture of the producer's personality
to the consumer, and having an impact on the purchasing behavior of consumers. This issue will
be addressed through Arthur model, which is referred as the letters AIDA, which in turn refer to
four consecutive psychological operations occurring during the purchase process which are:
attention, interest, desire, and behavioral Action (Mualla, 2007, p. 341).
11.1 Attention
Packaging has a marketing function through which it can attract the attention of the
consumer, and highlight the characteristics of the commodity and its distinct characteristics
during the purchase inside the store. (Prendergast & Pitt, 1996, p66).
11.2 Interest
The interest in packaging leads to the fact that the consumer requests the commodity and
thus reads the specification data, which ultimately leads to generate interest in knowing the
properties of the commodity. (Krishna & Morrison2008, p807).
11.3 Desire
The consumer is always trying to satisfy his needs and desires from the preliminary vision
of the product through the packaging which gives an implicit meaning either to accept or
spontaneously reject the item (Shimp 2000, p223).
11.4 Behavioral Action
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The packaging, with its dimensions, works on determining the position of the consumer
concerning the commodity , and then influencing his purchase decision through the delivery of
the right message by convincing the buyer that this product is best for him.
12. Packaging functions
As a result of the massive evolution in the communication technology and its consequent
emergence of consumer products and services, other marketing functions of the packaging have
emerged other than traditional functions such as containing and protecting the product such as
unmentioned aspects; some of these functions are (Shimp 2000, p223):
i.
Drawing attention to the commodity through the brand and its potential benefits.
ii.
Stimulating the consumer on selectivity between the alternatives and the choices.
iii.
Creating a kind of balance between what the commodities achieves as value and cost
to the consumer.
iv.
Entering the chaos of competition at the point of purchase.
Packaging contributes to the achievement of any ambiguity concerning the commodity
because it contains a brand, as well as explaining the ways of usage and the group of benefits
derived from the commodity and what it offers like satisfying the consumer needs. There are also
logistical dimensions of packaging, in terms of transport and storage that represent product
protection while being traveled through the channels of distribution from the place of production
to the points of sale and consumption, in addition to the information involved in the packaging
regarding transport and storage. Packaging sometimes can be an indication of "the quality of the
product by some consumers because it gives a kind of uniqueness and originality to the product
(Sileuyoi a speece, 2004, p10).
13. Packaging Costs
It should be noted that the cost of packaging plays an active role in the design of the
packaging that marketing managers should choose the attractive packaging which is able to
create a mental picture to the consumer compared with the products of competitors, which may
be conducted through new markets, enabling companies to produce the greatest amount of
reducing cost resulted from the design of packaging.
14. Packaging cost elements
The process of calculating the cost of the packaging starts from the beginning of the
adaptation of the idea of packaging until it reaches the final consumer. It also includes:
development costs, packaging materials' cost, distribution costs, and the promotional costs for
introducing the new packaging to the consumers.
15. Packaging elements
The consumer's look at the packaging could be distorted by the psychological dimension
as he relates the characteristics of packaging with the commodity itself; the packaging involves
many meanings such as the mark and its implications, color, design, shape, size as well as the
material from which the packaging is made and the information it holds which gives an idea
about the commodity to the consumer (Meyers & lab liner, 1998, p208).
16. Packaging Design
Packaging design may be considered one of the thorny issues, therefore caution is important
when designing the packaging in line with the cultures of people, because it allows a good flow
to the eye and sharpens the focus of the consumer (Shimp, 2002.p225). Many packaging
designers stressed that packaging combines several elements at the same time and that it is
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capable to create a mental image of the unique mark , since these elements involve color, shape,
size and design data.
17. Packaging shape & size
The shape and size of packaging have connotations and meanings that contribute to arouse the
emotions and feelings, for example, the circular and curved lines implicitly imply the
womanhood, while the sharp lines of angles imply manhood, or that such commodities are
especially for males (Shimp, 2002, p225). Companies operate on the production of packaging of
different sizes to satisfy the needs and desires of consumers according to the targeted markets,
taking into account the purchasing capacity and the consumption patterns (Mandrel & Semesters,
2008, P 320). The form of packaging plays a role in the transfer of information about the content
of the item and gives a positive or negative implication regarding the commodity, because the
shape contributes to the delivery of a mental image affecting the consumer perception, and
fulfills the desire of the commodity even before the consumer reads the information contained in
the packaging (Dunne, P. and Lusch 1999, p214).
18. Relevant previous studies
In order to enrich the cognitive aspect of the study, it is important to consider some previous
studies despite the little Arabic Studies in this regard. We will refer to them and know their
objectives.
Howeidi study (2009): entitled "The impact of the cover and display on the purchasing behavior
of buyers of convenience goods from retail stores (supermarkets) in Jordan," The results of this
study showed that there is a lack of interest in the elements of packaging that the industrial
companies should increase their attention to packaging, as well as the fact that the consumer is
capable of distinguishing between the products through the brand that carries, as well as the
written statements, not misleading the buyer ,providing warnings related to the products such as
standards of control, taking interest in the duration suitability, and adhering to honesty with
regard to the aspects of promotions.
Al- Samadi study (2005) on "Assessing the design of food commodities packaging" A Field
Study of consumers' trends in the capital Amman.
The results of this study suggest that consumers are unsatisfied with the packaging of food
commodities with a disparity in the answer, according to the age group in addition to the income.
Shurufat study (2005) entitled : "The role of packaging in giving cosmetics a competitive
advantage
in
the
Jordanian
market."
The results of this study showed that there was a positive relationship between the quality of
packaging and the effectiveness of marketing cosmetics in the Jordanian markets. There was a
link between the quality of product and packaging therefore the decision of the consumer was
positively affected by packaging when conducting the purchase process.
Lu, Gargalo and Maunar (2007) in a study entitled "Packaging as a strategic tool" treated
packaging as a strategic tool. The study found that consumers have a desire to build a clear
understanding of packaging and recognition of pictures and colors that make them feel happy;
most consumers go to the commodity based on their belief that the packaging is an indication of
the quality of the product.
Silayoi and Speece study (2007), which was under the title "The importance of packaging
attributes: a conjoint analysis approach'.
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The purpose of this study was to identify the growing importance of packaging design in the
food industries and its role in highlighting the identity of the product as well as the easiness of
recognizing it by consumers. The results of this study showed the role played by the packaging
in stimulating consumers to the purchasing decision. The aesthetics of packaging contribute to
attracting consumers as well as the fact that technology has a role in the design of good
packaging.
Van Hurley's study (2007, which carried the title "The importance of packaging color on
consumer purchase intent: the influence of color at the point of purchase".
The purpose of this study was to investigate the role of the packaging color that it is an indication
on the level of the quality and performance of the product. The results of the study concluded
that color plays a role in influencing the decision and the preference of the buyer most effective
of which are red and blue, while the color yellow was the least affecting. The study also showed
that packaging plays the role of the silent man at the purchase point inside the shop, and thus
plays an important role in the promotion of products.
According to a study conducted by Wells, Farley & Armstrong (2007) entitled " The importance
of packaging design for own - label food brands".
This study explained the importance of packaging design concerning the signs of distributors of
food goods inside the shop, as well as the behavior of buyers toward the brand and the impact of
packaging design with its information on the purchasing decisions of consumers. The results of
the study showed that there is a strong relationship between the packaging design of such
markers
and
the
influence
of
the
purchase
decision
by
them.
Silayoi and Speech (2004) conducted a study titled with "Packaging and purchase decisions".
The objectives of this study focused on the role of packaging elements in the definition of the
good for the consumer that they were represented with a series of dimensions such as the visual
dimension which includes shape and size. The results of the study, conducted on shoppers in
supermarkets in the city of Bangkok in Thailand and focused on determining the elements most
affecting the purchase decision, showed that consumers use the data written on the packaging
and prefer them to be clear and simple and that the elements of packaging play a role in the
process of marketing communication i.e. promoting them.
19. Research Methodology
The research has two main aspects:
A - Theoretical side: there has been an adoption of the descriptive analytical method for the most
important aspects in the studies on the subject of research that serves its objectives.
B Field side: it contains a survey to analyze the current reality of the packaging design in the
Jordanian food manufacturing companies, that the researchers have determined the community
and the sample of the research. The researchers designed two forms of a questionnaire: one
addressed to the business managers, and the second addressed to the consumers. The researchers
analyzed and processed the data of the study, based on SPSS Chi-squire, one sample T test and
other related methods that serve the research purposes.
20. The Stability of the Tool

To verify the reliability of the study tool, stability coefficient was calculated in Cronbach alpha
for all the paragraphs of the tool as a whole; Cronbach alpha coefficient of the tool as a whole
was (0.78), a high value, for the purposes of applying the tool.
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21. Sample of the study

The sample consisted of (470) male and female consumers and (76) managers of Jordanian food
industry companies which were randomly selected from the community study. Tables (1, 2)
show the distribution of the sample members according to the personal variables.
Table 1: The distribution of the sample of consumers depending on the personal variables
Variable
level
redundancy
percentage
Male
Female
Gender
Total
Age
years old
years old
years old
years old
years and over

Total
less than high school
High School
Community College
Educational level
BA
Master
PhD
Total
We can see from Table (1) the following:

i.
The number of males in the sample was (363) - (77.2%), while the number of females
was (107)- (22.8%).
ii. The highest percentage of the distribution of the sample members according to the
variable of age was (58.3%) for the age group (18-25 years), while the lowest percentage
was (5.1%) for the age group (46-55 years).
iii. The highest percentage for the distribution of the sample members according to the
variable of the level of education was (76.0%) for the scientific qualification (BA), while
the lowest percentage was (0.6%) for the scientific qualification (less than secondary).
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Table 2: The distribution of the sample of managers depending on the personal variables
Variable
level
redundancy
percentage
less than high school
High School
Male
Female
Gender
Total
years old
Age
years old
years old
years old
years and over

Total
Community College
Educational level
BA
Master
PhD
Total
We can see from table (2) the following:

i.
The number of males in the sample was (72) - (94.7%), while the number of females was
(4)- (5.3%).
ii. The highest percentage of the distribution of the sample members according to the
variable of age was (55.3%) for the age group (46-55 years), while the lowest percentage
was (5.3%) for the age group (55 years and over).
iii. The highest percentage for the distribution of the sample members according to the
variable of the level of education was (65.8%) for the scientific qualification (BA), while
the lowest percentage was (7.9%) for the scientific qualification (Doctorate).
Showing the results of the statistical analysis and answering the research questions
This part contains the results of the study which aims to know the extent of awareness of
managers of Jordanian industrial companies regarding the importance of the commodity
packaging quality from the viewpoint of consumers. Here are the results.
Question 1: What is the extent of awareness of managers of food products companies regarding
the importance of the packaging design quality from the viewpoint of the consumer?
To answer this question, we have calculated the arithmetic means and the standard deviations of
all the paragraphs of the field of the quality of the packaging design. Table (3) explains this.
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Table 2-B: The Arithmetic means and the standard deviations of all the paragraphs of the field
"The Packaging Design quality"
evalu
Nu
mbe
paragraph
arithmetic mean
standard
deviation
rank
ation
degre
e
good packaging helps draw attention
High
Packaging plays a key role in the marketing of the food product
High
Packaging creates a mental picture for the consumer
High
the well-designed packaging contributes to repeating the process of buying the food
product
High
the packaging helps giving indications about the components of food products
High
Packaging is executable for other uses and it commensurate with my income
High
As seen from Table (2-B) the highest arithmetic mean for the quality of packaging design was
(4.70) for paragraph (1) "good packaging helps draw attention" with a high evaluation degree,
while the minimum arithmetic mean was (3.86) for paragraph (4) " the well-designed packaging
contributes to repeating the process of buying the food product with a high evaluation degree.
One Sample T-test was applied on the total field / the quality of the packaging design, table (3).
Table 3: The results of applying One Sample T-test on the field of the packaging design quality
field
arithmetic
standard
mean
deviation
degrees of
statistical
freedom
significance
the quality of the packaging design
It is seen from Table (3) that there is a high level of awareness among the managers of
companies of food products to design the packaging from the viewpoint of consumers, where the
arithmetic mean for the total field was (3.67), a high value, and T value was (57.898), a value
that is statistically significant at the level of significance ( = 0.05). This indicates the existence
of statistically significant high level of awareness among the managers of food products
companies to design the packaging from the viewpoint of consumers, consequently, there is a
high level of awareness among the managers of food products' companies regarding the
importance of designing the packaging from the viewpoint of consumers.
Question 2: What is the level of awareness among the managers of food products' companies of
the symbolic dimension of the packaging from the viewpoint of consumers?
To answer this question, the arithmetic means and standard deviations of all the paragraphs of
the field of the symbolic dimension of packaging were calculated. Table (4) shows that.
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Table 4: The arithmetic means and standard deviations of all the paragraphs of the field of the symbolic
dimension of the packaging
number
paragraph
arithmetic mean
standard
deviation
rank
evaluation
degree
The good packaging makes me feel happy when buying the item
High
the packaging of high-quality affects my decision in the
High
purchasing process
I prefer the special packaging regardless of content
intermediate
I tend to buy a gift regardless of the content
High
I go to stores that display the products of special packaging
High
the form of the packaging gives me a social dimension in front
High
of friends
It is seen from Table (4) that the highest arithmetic mean for the field of the symbolic dimension
of the packaging was (4.14) for the paragraphs (2,4) "the packaging of high-quality affects my
decision in the purchasing process, I tend to buy a gift regardless of the content" with a high
evaluation degree, while the lowest arithmetic mean was (3.35) for paragraph (3) "I prefer the
special packaging regardless of content" with an intermediate evaluation degree.
One Sample T-test was applied on the total field/ the symbolic dimension of packaging. Table
(5).
Table 5: The results of applying One Sample T-test on the field of the symbolic dimension of packaging
field
the symbolic dimension of packaging
arithmetic mean
standard deviation
degrees of freedom
statistical significance
.67
It is seen from table (5) that there is a high level of awareness for the managers of the food
products companies regarding the symbolic dimension of packaging from the viewpoint of
consumers, where the arithmetic mean of the total field was (3.67), a high value, and the T value
was (24.60), a statistically significant value at the significance level ( = 0.05). This indicates the
existence of statistically significant high level of awareness among the managers of food
products companies regarding the symbolic dimension of packaging from the viewpoint of
consumers. Consequently the level of awareness among the managers of food products
companies regarding the symbolic dimension of packaging from the viewpoint of consumers is
high.
Question 3: What is the level of awareness among the managers of food products' companies
regarding the role of packaging in promoting the company's position from the viewpoint of
consumers?
To answer this question, the arithmetic means and standard deviations have been calculated for
all the paragraphs of the field of the role of the packaging in the promotion of the company's
position, table (6) shows that.
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Table 6: The arithmetic means and standard deviations have been calculated for all the paragraphs
of the field of the role of packaging in the promotion of the company's position
number
Paragraph
arithmetic
standard
mean
deviation
the special packaging shows the prestigious status of the industrialized
rank
evaluation
degree
High
company
the special packaging provides a higher status for the industrialized
High
company compared to the competitive companies

the use of modern technology in packaging promotes the company's
High
position
the interest in packaging is an indicator of the interest in the content and
High
quality
I buy based on the packaging, which bears the slogan of the company
High
responsible for the production

the continuous updating of packaging contributes to the promotion of the
High
consumer's loyalty to the company and its products
It is seen from table (6) that the highest arithmetic mean for the role of packaging in promoting
the company's position amounted to (4.28) for paragraph (2) "the special packaging provides a
higher status for the industrialized company compared to the competitive companies" with a high
evaluation degree, while the minimum arithmetic mean was (3.70) for paragraph (5) "I buy based
on the packaging, which bears the slogan of the company responsible for the production" with an
intermediate evaluation degree.
One Sample T-test was applied on the total field/ the role of the packaging in promoting the
company's position, Table (7).
Table 7: The results of applying One Sample T-test on the filed of the role of packaging in the promotion of
the company's position
Field
arithmetic mean
standard
deviation
degrees of
statistical
freedom
significance
The role of packaging in the promotion of the

company's position
It is seen from table (7) that there is a high level of awareness for the managers of the food
products companies regarding the role of the packaging in the promotion of the company's
position from the viewpoint of consumers, where the arithmetic mean of the total field was
(3.99), a high value, and the T value was (33.239), a statistically significant value at the
significance level ( = 0.05). This indicates the existence of statistically significant high level of
awareness among the managers of food products companies regarding the role of packaging in
the promotion of the company's position from the viewpoint of consumers. Consequently there is
a high level of awareness among the managers of food products companies concerning the role
of packaging in the promotion of the company's position from the viewpoint of consumers.
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We have also detected the extent of awareness of the managers of Jordanian industrial companies
regarding the importance of the quality of commodities' packaging, the results were as follows:
Table 8: The Frequencies, percentages, and (Chi-Square) values for the managers' answers
on the questions of the study tool
Yes
NO.
Question
Frequency
percentage
No
Chi-
Frequenc
perce
ntage
Square
Do you think that the good packaging is considered a good way to ensure
the recognition of the commodity by the consumer?
Do you think that packaging is the last chance to attract the attention of the
consumer?
Do you think that the new ideas in the process of packaging can give the
company a competitive advantage?
Do you think that packaging defines the direction of the consumer towards
the goods in the moment of purchase?
Is your company aware that the material from which packaging is made
plays a role in raising the consumer's sentiment?
Is your company aware that packaging has a role in delivering the mental
picture of the consumer?
Is your company aware of the fact that the link between the consumer and
the product reflects the identity of the producer?
Is your company aware that packaging plays a promotional role as a
connecting point with the consumer that it attracts him?
Is your company aware that the consumer at touching the item can judge
the quality of the product, which generates the interest in him?
Is your company aware that when viewing the image of the item on
packaging, the desire of buying the product rises in the consumer?
Is your company aware that raising packaging costs increases the volume
of sales?
Is your company aware that the choice of packaging design must be
studied within a scientific framework?
Is your company aware of the role of administrators and academicians in
the packaging design?
Is your company aware of the emotional and social aspects of the colors
used in designing the packaging?
Is your company aware of the strong relationship between the packaging
design and the purchasing decision inside stores?
Is your company aware that the high quality of packaging which is
associated with high costs increases profits?
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It is seen from table (8) that the answers of all the members of the sample on the questions, " is
your company aware that when viewing the image of the item on the packaging , the desire of
buying the product rises in the consumer? , is your company aware that packaging plays a
promotional role as a connecting point with the consumer that it attracts him? , do you think that
new ideas in the process of packaging can give the company a competitive feature?" were (yes )
with a (100%) percentage.
Chi-Square values were statistically significant at the significance level ( = 0.05) in favor of
(yes) to the questions (14, 1,4, 15, 6,5, 16), while (Chi-Square) value was statistically significant
at the significance level ( = 0.05) and in favor of (no) to the question (13).
22. Discussion of the Results and Analysis
It was noted before that the importance of this study lies in drawing the attention of the
managers of Jordanian food industry companies to the importance of packaging and its role in
raising the volume of sales, as well as raising the consumer's perceptions of packaging and its
impressive dimensions especially the quality of packaging and the symbolic dimension, in
addition to its role in promoting the status of the company.
There is no doubt that the awareness of the companies' managers in this study regarding
the importance of the packaging quality requires knowledge with the effects and results that may
be made by packaging. Within this context, the results of the current study involve a range of
important practical implications:
i. The commodities' packaging is not an end in itself but a means aimed at eventually achieving
the desired goals, therefore the decision of adopting packaging must be subjected to the logic of
scientific planning through which we can determine the feasibility of any efforts made in the
design of packaging, including studying and analyzing the benefits that can be achieved by
packaging and comparing them with the costs that need to be spent. In this framework, the study
findings, from the viewpoint of consumers regarding the effects that can be made by packaging,
indicate that the level of awareness of managers of food products of the packaging quality
design, from the viewpoint of consumers, is high . This is a positive sign that managers build an
effective strategy when designing packaging, because of its positive effects in attracting
consumers and increasing sales volume.
ii. The results of the study indicate that there is a high level of awareness among managers of
food products companies regarding the symbolic dimension of the packaging from the viewpoint
of consumers, which of course has some important practical implications when it comes to the
ability of the packaging to inducing the purchasing behavior of consumers in particular its ability
to generate interest and purchase because of the symbolic dimensions of the packaging, which
requires providing technical capabilities that help give a higher degree of realism and excitement
in the commodity packaging although the distinctive packaging, regardless of content, obtained a
medium degree in the evaluation.
iii. The results of the current study confirmed the credibility of the relationship between the role
of packaging in the promotion of the company's position from the viewpoint of consumers; the
result showed a high level of awareness among managers of food companies with respect to the
role of packaging and the promotion of the company's position in accordance with the point of
view of consumers. This requires the need of consolidating and strengthening the process of
packaging the commodities by the companies in the study through providing scientific and
professional skills and qualifications that raise such companies to the level of professionalism in
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order that packaging has an effective role in promoting the company's position and thus
contributing to increasing the sales' volume.
iv. Regarding the extent of awareness of managers of companies in the study with respect to the
importance of packaging the commodities , the results have shown that packaging plays a
promotional role , because of the fact that it is a connecting point with consumers, and
contributes to attract the consumers to the product; the process of packaging commodities gives
the company a competitive advantage that the response of the study sample was yes with a ratio
of 100%. This process also creates the desire of purchasing in the consumers.
23. Recommendations
Based on the results of the study , the two researchers recommend the following:
i.
The need of conducting researches and studies to provide information that helps managers
when designing packaging by the Jordanian industrial companies so as to contribute in
achieving the goals they seek in the lowest costs.
ii.
Raising the company's rehabilitation level of producing packaging from the scientific and
practical aspects, including the process of designing packaging which can serve the
promotional objectives of industrial companies with a high degree of professionalism; this
can be achieved by holding specialized training courses in the area of packaging and the
emphasis on asserting its aspects of innovation .
iii. 3 - The need of developing scientific courses that concern the packaging of commodities in
universities and community colleges and joining such courses with practical training
programs that assist in the development of the creative skills of students and giving them the
necessary scientific expertise.
24. Future research directions
The main objective of the current study was to identify the extent of awareness of managers
of Jordanian food industry companies regarding the packaging of commodities from the
viewpoint of the consumer concerning the good packaging design and the symbolic
dimension and its role in promoting the status of the company. The results of the study
showed that this effect was generally positive, both from the viewpoint of consumers and the
managers themselves. Also, this study was limited to the Jordanian food industry companies
therefore it is important to generalize its findings to the companies of other industries in other
sectors in general. Therefore the research should be extended in the future to study the same
packaging of commodities on a broader sample that is more representative of other
companies to contribute in reaching to the results that can be generalized.
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Consumer Attitude towards Information Privacy in
Banking Sector of Pakistan
VOL 2, N O 10
Listed in ULRICH S
Amna Sabir
Department of Business Administration,
Fatima Jinnah Women University, Rawalpindi, Pakistan.
Sohail Kamran (Corresponding Author)

Assistant Professor, Department of Business Administration,
Fatima Jinnah Women University, Rawalpindi, Pakistan
Abstract
The purpose of the study was to investigate the consumers attitude towards information privacy
within the banking sector of Pakistan. The data was gathered from (n= 150) bank customers
through survey research and quantitative research approach was used to test the hypothesis. The
study results indicate that Pakistani commercial banks do not care much about consumer rights
of privacy and use consumers data for marketing purposes. Study results revealed that bank
customers are concerned about their information privacy. Research results also indicate that
consumers disapprove the use of their information by the banks for marketing purposes.
Widespread use of Internet technology and access to the liberated media made urban consumers
more aware about their rights. Consequently, the urban customers have become more demanding
for the businesses. Implications for the Banks are firstly, to respect the consumers privacy and to
protect the consumers data from any potential inappropriate use. Secondly, in the event the bank
targets their products to existing customers then prior consent must be obtained from the
customers.
Key Words: Consumer Privacy, Consumer Right of Privacy
1. Introduction and Theoretical Background
Westin (1967) considers privacy as customers ability to control the terms under which their
personal information is obtained and used (Westin, 1967). However, according to Froomkin
(2000), Meaning of the word privacy is much broader than just the control of personal
information by customers. Privacy is social authority of freedom and the ability that creates a
personal feeling between the organization and its customers (Froomkin, 2000). Prosser (1960)
proposed that privacy is not a unified concept. He explained four dimensions of privacy. Firstly,
intrusion (i.e., physically invading a person's privacy), secondly, disclosure (i.e., publicly
disclosing embarrassing private facts), thirdly, false light (i.e., false public portrayals), and lastly,
appropriation (i.e., use of a person's image or identity without permission) as aspects of privacy
(Prosser, 1960).
Although, advancements in the computer based technologies have helped the modern businesses
in managing the data. However, it has also posed danger to the personal information as the
personal information is dealt by this technology in the contemporary world (Schwartz 2004,
Skipper, 1979 Culnan, 1993). Customers desire to protect their personal information, as majority
of the customers information is collected and maintained in different companies databases
(Skipper, 1979).
However, customers personal information is often used for the secondary purposes. Such as,
businesses use customers information to target new products. Sometimes companies transfer
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customers information to the third party (Culnan, 1993, Hughes 1994, Burnett (1998).
Companies often access the demographical, lifestyle, shopping habits, financial data and
personal identifiers information of consumers for marketing purposes (Hughes 1994; Jackson
and Paul 1994; Nash 1993). The access to consumer information is enabled by the availability of
large marketable databases compiled from public records. Different businesses exchange their
customer lists through mailing list brokers. Consumer credit reports may also be used for direct
marketing as long as the solicitation includes a firm offer of credit (Culnan, 1993).
The misuse of consumers data by different businesses has created the sense of insecurity among
contemporary consumers. Consumers are concerned about their information. They feel hesitant
and reluctant, when the marketer asks too many questions no matter the marketer complies with
the consumers privacy (Graeff and Harmon, 2002).
Culnan and Armstrong (1999) maintain that businesses that do not disclose the privacy of the
consumers are thought to have the competitive edge over those businesses that do not fulfill
privacy terms and conditions. Consumers are willing to provide their personal information to the
organizations that are reliable, credible and trustworthy. So, companies must behave ethically,
when it comes to dealing with the consumers information (Culnan and Armstrong, 1999, Rosen,
2000).
Privacy is a social contract where all power lies with the consumer. Consumer has the right to
restrict his information and he must be informed where this information is being given by the
marketer. The contract is breached if marketer disseminates information without the consent of
consumer (Culnan, 1995). The marketers often use the consumer databases to figure out the
prospects for their product or service. In this regard the credit data of the consumers are made
available to the marketers. This is newer form of target marketing where the marketers use all
sort of consumers data from drivers licenses to the transactions they make (Thomas and Maurer,
1997). So, it is clear that there is an unauthorized access and the misuse of consumer databases
by the marketers (Goodwin 1991, Thomas and Maurer, 1997). This information of the consumers
is used for plenty of purposes that are not related to what that information was previously
collected. This information is further reproduced wrongly that can lead to consumers detriment
(Royko, 1996). Jones (1991) observed that the companies and the marketers, who gather, store,
handle, and trade consumers statistics or information have no cutthroat enticement to defend
consumer Privacy (Jones, 1991).
According to Huang and Lin, (2005), it is very important for the companies to take the consent
from the customers for using of their personal information for other purposes. If companies share
consumer data with other companies or with third party than, it is simply irritating for the
customers. The authors further argued that the privacy statement must easily be understood by
consumers. If company gives consumers information to third party or use the consumer list for
selling their own product or service than, It should be done with the consent of the consumers
(Huang and Lin, 2005).
Tsarenko and Tojib, (2009) proposed that trust and willingness to disclose personal information
are positively related. Development of trust among financial firm and the customer is very
critical for the business success. If the customers continuously upgrade their information, this
reduces the risks of fraud. This also improves the relationship among the financial institution and
the customers. Further more; the risk of control over the personal information can be reduced by
the formation of mutual trust. Consumers are willing to provide consent for their personal
information usage to banks, if they are well informed about the use of their personal information
(Tsarenko and Tojib, 2009).
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Consumer perceptions are different towards direct marketing and their privacy concerns (Phelps
et al 2000). Consumers attitude could be positive or negative, which depends on how their
personal information is used by the organizations. Consumers are least concerned about their
privacy, if information is used rightly (Culnan, 1993). Milne and Gordon (1993) found that if
consumers do not receive abundance of marketing communications than their attitude towards
direct marketing will remain favorable (Milne and Gordon, 1993).
Previously conducted different studies show that majority of consumers are very much
concerned about their privacy. However, Individuals are less likely to identify information
practices as privacy invasive; Firstly, when more information is collected and both the parties are
still bounded in a contract. Secondly, consumers have the perception that they can control the
future use of their information. Thirdly, the information collected is relevant to the transaction
being made. And lastly, when individuals believe that information is used to draw reliable and
valid inferences about them and not the vague one (Baker, 1991; Clarke, 1988; Stone et.al.,
1983; Tolchinsky et al., 1981; Woodman et.al., 1982).
Consumers are reluctant to provide their personal information, if they believe that personal
information will be disseminated to public (Singer et al, 2000). According to Rosen (2000) some
consumers are much worried about their intimacy and they have certain boundary around
themselves. These consumers do not want and allow anyone to cross that limit of intimacy.
Where as, some consumers believe that the interference does not matters to them. As they are not
doing anything wrong and companies cannot harm them by taking their personal information. He
also mentioned two types of citizens and their concerns for privacy. First type is social that
includes celebrities and famous people and second type is the private general public. The social
ones are more willing to expose their personal information. However, mostly private public do
not wish to disclose their personal information as they want themselves to be anonymous (Rosen,
2000).
Figure 1: Theoretical Framework and Development of Hypothesis
Consumer information used
for marketing purposes
banks use it for selling
their products and
services
Sell or lend it to the
third party
Consumers Attitude
towards privacy
Consumers Concern for the

Information Privacy
1.2 Hypothesis
H1: Pakistani Bank Consumers have a negative attitude towards the use of their personal
information marketing purposes.
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H2: Pakistani Bank Consumers are concerned about their Information privacy.
2. About the present study

Pakistan s banking sector has been transformed within a short period of five years (2000-2005)
from a lethargic and government dominated industry to a much more lively, competitive and
profitable sector (Akhtar, 2006). In June, 2008, Forty five (45) banks were operating with 8343
branches having more than 20.4 Million account holders. Pakistani banking sector consists of
public sector commercial banks, domestic private commercial banks, foreign banks, and
specialized banks (www.sbp.org.pk/).
This is commonly observed that few commercial banks in Pakistan try to sell their products and
services, such as credit cards through direct marketing practices such as, telemarketing to the
existing account holders. These direct marketing practices might raise the privacy concerns
within the bank customers. Some previous studies have been carried out on consumer
information privacy concerns by different researchers in the developed countries perspective
(see, Culnan and Armstrong 1999, Phelps et al. 2000, Rosen, 2000, and Culnan, 1993).
Consumer issues are constantly addressed by the developed countries researchers in developed
nations context. However, there remains a dearth or even absence of literature on the consumers
concerns in the different sectors of the economy in the developing countries. Similarly no
research was found on the consumers attitude towards information privacy in Pakistani banking
sector. So, the present research attempts to discover the consumers attitude towards information
privacy within the Pakistan s banking sector. The focal point of the study was to debate about the
banks consumers concerns regarding privacy. Thus, this research will not only further the
knowledge in the area of consumer privacy with some new findings but, also stimulate the
developing countries researchers to address different consumer concerns in the developing
countries perspective. This research also intends to provide information to the bank managers
about the consumers attitude towards their information privacy.
The present research aims to study two dimensions of consumers rights to information privacy.
Firstly, this research plans to investigate the consumers attitude toward information privacy and
secondly, to study the consumers concern about information privacy in the Banking sector of
Pakistan.
3. Methodology
This study took place in the twin cities of Rawalpindi and Islamabad, Pakistan. The purpose of
the research was to probe the consumers attitude towards the use of their personal information
for marketing purposes and consumers concerns for privacy in the banking sector. This study
was of quantitative nature where the results are proved through the use of statistical tests and
correlation analysis was conducted to test the hypothesis.
3.1 Variables
To study the consumers attitude towards information privacy one dependent and two
independent variables were identified from the previous literature (Singer et al, 2003, Culnan,
1993). Consumers attitude towards privacy was taken as a dependent variable in this study. Both
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Consumers information use for marketing purposes by banks and consumers concern for
information privacy were selected as independent variables. Two hypotheses were developed to
check the consumers attitude towards the use of personal information for marketing purposes and
consumers concerns about information privacy in Pakistan s banking sector.
3.2 Participants and sampling
The qualifying criterion for being the respondent of the study was to hold an account with any
commercial bank for at least one year. A total of 194 different commercial banks consumers
were given the questionnaires. However, 150 (77%) questionnaires were fully completed by the
respondents. Non probability, convenience sampling technique was used to collect the primary
data from the respondents. Ninety nine (66%) study participants were male and fifty one (34%)
respondents were female. Fifty Nine (39%) study participants belong to the age group of 18-25
and ninety one (61%) of the respondents were aged 26 years or above.
3.3 Instrument
A five point likert scale questionnaire was used with five options given in front of each question.
These options were, strongly agree=1, agree=2, neither agree nor disagree =3, Disagree =4,
strongly disagree =5. The questionnaire included twenty items, which were adopted from
different previous researches. However, some amendments were made according to the variables
of this research. Some of the variable and the questions were transformed to the compatibility
mode for this research.
Questions regarding the consumers attitude towards privacy, information use for marketing
purposes and consumers concern for the privacy were asked from the respondents. Firstly; seven
questions related to consumers attitude towards privacy were asked from respondents (adopted
from Culnan, 1993). Secondly; ten questions related to marketing variables were asked to find
out the consumers attitude towards the information used for the marketing purposes (adopted
from Phelps et al. 2000 and Sheehan and Hoy, 2000). Thirdly; three questions regarding the
consumers concern for privacy were asked from the respondents (adopted from Phelps et al.
2000).
The questionnaire was designed in English language (Official language of Pakistan), which is
mainly understood by the educated people. However, as the respondents of the study included
both well educated and less educated bank customers. Consequently, the questionnaire was also
translated in Urdu language (National language of the country), which is understood by both the
educated and less educated people of Pakistan i.e. school leavers. To facilitate the less literate
respondents all the questionnaires were filled in the presence of the researchers. Researchers
provided support to those respondents, who faced some problems in understanding the questions.
3.4 Tests Used for Data Analysis
SPSS version 16.0 (Statistical Package for Social Sciences) was used to analyze the primary data
collected through the questionnaires. It was used in order to check the reliability and the
normality of the data, conducting the group statistics, correlation analysis and regression
analysis.
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3.5 Ethics of the research

Respondents confidentiality was assured. Only those consumers who volunteered to be the
participant of the study were asked to fill the questionnaire. Few respondents left the
questionnaire incomplete, but they were not compelled to complete the questionnaire. Further
more those people who once declined to be a participant of the study were not pursued to fill the
questionnaire.
4. Data Results and Analysis
The study was carried out to investigate the consumers attitude towards information privacy in
the banking industry of Pakistan. This section provides the reliability, normality, group statistics,
correlation and regression analysis results.
Table 4.1 shows the reliability test for marketing purposes, privacy concern and attitude toward
privacy. The Alpha ( ) value of each of the variable is equal to 0.6 or greater, which indicates the
reliability of the data. Attitude towards the privacy variable was comprised of seven items and
value was 0.6. Ten items were included for the marketing purposes variable and value is 0.75.
Privacy concern included three items and value is 0.66, which demonstrates data reliability.
(Please see Table 4.1 attached in Appendix).
Skewness and kutosis were applied in order to check the normality of the questionnaire (Table
4.2). The normality of the questionnaire was subject to the Skewness and kutosis test for the
authenticity of results. The values to be valid must be ranged between +1 and -1. In present study
the attitude towards privacy (skewness=0.36, kurtosis=0.35), marketing purpose
(skewness=0.76, kurtosis=2.42) and concern for the privacy (skewness=0.18, kurtosis=0.10)
were calculated. However, The Kurtosis value for the marketing purposes (kurtosis=2.42) was
not between the valid ranges mentioned above which indicates that the data is not normally
distributed, while skewness value of the concern is also showing the same perspective. The
overall reliability and the normality of the questionnaire show moderate reliability, which also
indicates a normal questionnaire. The results of the reliability and the normality of the
questionnaire are consistent with the research done by Singer et al. (2003) as the variable used in
their research related to the privacy concern had the same i.e. 0.6.
(Please see Table 4.2attached in Appendix).
Group Statistics are shown in the above mentioned table (table 4.3). Attitude towards privacy
(Means=2.77, S.D=0.68) indicates negative customers attitude towards information privacy
policies of banks. Hence consumers are dissatisfied with banks customers information privacy
practices. Customer information use for marketing purposes (Mean=2.45, SD=0.45) portrays
consumers unwillingness to pass their personal information to the third party or used by banks
themselves for direct marketing purposes. Privacy concern (Mean=3.2, SD=0.63) demonstrates
consumers concern for personal information privacy. Low S.D values of attitude towards privacy
(S.D 0.68), marketing purpose (S.D 0.45) and concern for privacy (S.D 0.63) describe
similarities in respondents attitude toward information privacy. (Please see Table 4.3 attached in
Appendix).
Table 4.4 shows the regression values of the variables that include the t- value, beta and pvalues. The t-value, beta and the p-value for attitude towards privacy are 10.456, 3.432 and .000
respectively. These values are significant as the t-value and beta are greater than 2, and the p-
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value is smaller than 0.05 respectively. This demonstrates that the consumers attitude towards
privacy is positive, as consumers want their personal information to be kept confidential. These
results are consistent with the research findings of some previous researchers on the consumers
attitude towards the privacy, where consumers indicated positive attitude towards the privacy
and that they wanted their personal information to be kept confidential (Skipper, 1979, Baker,
1991; Clarke, 1988, Huang and Lin, 2005, Singer et al. 2003).
The t-value, beta and the p-value value for marketing purposes are -2.045, -.260 and .043
respectively. These values illustrate a negative consumers attitude towards the information use
for the marketing purposes by banks. Two values in the negative show that the consumers have
negative attitude towards the use of their personal information for the marketing purposes. The tvalue, beta and the p-value value for privacy concern were 5.076, .415 and .000 respectively,
indicating that respondents are concerned about their privacy. The present study results indicate
similarity of observations as given by the previous researchers (Graeff and Harmon, 2002,
Skipper, 1979, Rosen, 2000). (Please see Table 4.4 attached in Appendix).
To check the relationship among different variables they were subjected to correlation matrix
(Table 4.5). The Pearson value is -0.166 that is a weak relationship and its negativity signifies.
This exemplifies that consumers do not want their privacy to be disclosed and they have negative
attitude towards the use of information for the marketing purposes. The P value is 0.43 that is
significant at 0.05% and it demonstrates a moderate to strong relationship between these two
variables.
The Pearson value for privacy concern is 0.385 that shows a moderate relationship between the
attitude towards the privacy and the privacy concern. This means that the consumers want their
privacy and that the personal information that they provide to the banks must be kept
confidential and they must not provide it to the other companies that is called in the literature as
the third parties. The P value is .000 that is significant at 0.01% and this signifies a strong
relationship between the two variables.
To ascertain relationship between independent variables the Pearson value was 0.071. This
shows a strong relationship but on the other hand the P value shows a non-significant
relationship between the two variables that is 0.387. The results in this aspect are varied because
of the fact that consumers are willing to provide the information of them as they are not at all
concerned for the privacy of themselves and they are not afraid of where there information is
being used. (Please see Table 4.5 attached in Appendix).
The value of R square is 0.27, which indicates 27% variation in the dependent variable, which is
attitude towards privacy is explained by the Independent variables, which are information use for
other purposes and consumers concern for privacy. The justification for the low value of R
square is that the study has used the cross section data and it is quiet common in case of cross
sectional study that the vale of R Square is relatively low as compared to a time serious model.
The value F statistic is 4.18, which indicates overall significance of the model at 1% level. The
R-square values are very close to the one of the research done by Phelps et al (2000) on privacy
concerns and the consumers willingness to provide the personal information. The second
independent variable that is the concern for the privacy has the compatible values with this
research of Phelps et al. (2000).
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After the above mentioned statistical analysis hypotheses H1 and H2 are accepted. It is
concluded on the basis of the study results that Pakistan bank consumers have a negative attitude
towards the usage of their personal information for marketing purposes (HI), and Pakistani bank
consumers are concerned about their information privacy (H2).
5. Discussion and Conclusion
This study investigated urban consumers attitude towards information privacy in the banking
sector of Pakistan through a survey research. The study findings suggest that majority of the
respondents are concerned about their information privacy. Study findings also depicted a
negative attitude towards the use of their personal information for marketing purposes without
prior permission.
The study results point out that banks use existing consumers information especially for targeting
their product or services. These types of practices are the violation of the consumers right to
privacy and are contrary to the individual privacy rights definition (see westin, 1967 and
Froomkin, 2000). Furthermore banks do target their products and services to existing customers
without any prior permission, which is another form of consumers privacy right infringement
(see poser, 1960). The invasion to consumers information privacy in the banking sector
potentially causes resentment among the consumers.
Although, different previous researches conducted in the developed nations context have
illustrated the similar types of finding as of the present study. Researchers such as (Culnan and
Armstrong 1999, Culnan, 1993, Hughes 1994, Burnett 1998, Phelps et al, 2000) mentioned
consumers concern about information privacy and negative attitude towards the consumers
information used for marketing purposes.
However, present study results are unprecedented in a way that the study was conducted in a
developing country context. Normally, Pakistani consumers were either not aware of their rights
or unconcerned in case of their rights infringement by different businesses. It was mainly
because of the fact that even urban Pakistani consumers had very few or even no sources of
information in the past. However, nowadays Urban Pakistani consumers are more empowered,
well informed and educated because of their access to the information through liberated media,
and internet etc. These both factors have played some role in educating the urban consumers
about their rights. In result, urban area consumers have been more demanding for the businesses.
Subsequently, the banks must respect their customers privacy to keep the customers satisfied.
Pakistani banking sector has experienced a great expansion and a lot of new banks branches have
been opened across Pakistan in past few years. Accordingly, banks are finding it hard to attract
new account holders and to gain the competitive edge over the competing banks. In a country,
where it is a common business norm to infringe the consumers rights, any business which
protects the consumers rights i.e. right of privacy, can gain the competitive edge over competing
businesses. Therefore, banks must respect the consumers privacy to gain the position of
trustworthy and credible business in the eyes of customers. If direct marketing to the existing
customers is required then the prior permission must be obtained from the customers, so that they
do not feel intimidating. The implications for the policy makers are to bring any regulation which
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protects Pakistnai consumers against any possible misuse of customers information within the
banking sector.
5.1 Limitations and Direction for the Future Research
This study was conducted with a relatively small sample and data was collected through
questionnaire from the twin cities of Rawalpindi and Islamabad, Pakistan. So, the study finding
might not be generalized to the whole Pakistani population. Therefore, to improve generalization
chances the same type of study could be conducted with a large sample size with data collected
from all parts of the country. Secondly; this study was carried out in the urban area of Pakistan
and data was gathered from either literate or less literate commercial bank customers through
questionnaires. A significant chunk of Pakistani population is illiterate and banks do also have
illiterate customers. A qualitative study through Interviews could be conducted to investigate the
illiterate customers attitude towards information privacy in the banking sector.
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Appendix
Table 4.1 Reliability
Variables
Marketing Purposes
Privacy Concern
No of Items
10
3
Alpha ( )
0.75
0.66
0.6
Attitude towards the Privacy
Table 4.2 Normality

Variables
Attitude towards privacy
Marketing purposes
Skewness
0.36
0.756
Kurtosis
0.351
2.426
Concern for the privacy
-0.185
0.106
Table 4.3 Group statistics

Variables
Attitude towards privacy
Marketing purposes
Concern for privacy
N
150
150
150
Mean
2.7705
2.4567
3.2022
Std. Deviation
0.68300
0.45376
0.63210
Table 4.4 Regression values of the variables

Variables
Attitude towards the privacy (constant)
Marketing Purposes
Privacy concern
N
150
150
150
t-value
10.456
-2.045
5.076
Beta
3.432
-.260
.416
p-value
.000
.043
.000
Table 4.5 Pearson Correlation

Variables
Marketing
Purposes
-.166
Privacy concern
Pearson
Attitude towards
privacy
1
Marketing Purposes
P-Value
Pearson
-0166
.043
1
.000
.071
Privacy concern
P-Value
Pearson
0.043
0.385
0.071
.387
1
P-Value
0.000
0.387
Attitude towards
privacy (Constant)
.385
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Listed in ULRICH S
THE IMPACT OF FINANCING SOURCES ON THE CAPITAL

EXPENDITURE OF ANAMBRA STATE
GOVERNMENT, NIGERIA. (1992
2008)
C.K.OKONKWO
DEPARTMENT OF FINANCIAL MANAGEMENT TECHNOLOGY, SCHOOL OF
MANAGEMENT TECHNOLOGY, FEDERAL UNIVERSITY OF TECHNOLOGY, OWERRI,
NIGERIA
.
DR. L.E. AKUJUOBI MNIM, ACTI
SENIOR LECTURER, DEPARTMEMT OF FINANCIAL MANAGEMENT
TECHNOLOGY,SCHOOL OF MANAGEMENT TECHNOLOGY,FEDERAL UNIVERSITY
OF TECHNOLOGY, OWERRI, NIGERIA.
.
Abstract
This research sought to assess the relationship between the financing sources, namely Statutory
Allocation, Internal Revenue, Value Added Tax, Loan, Grants and Government fund Raising
activities and Capital Expenditure of Anambra State Government from 1992 1988. The study
used secondary data collected from the reports of the Accountant General of the State. The
impact of the sources on the capital expenditure was ascertained using Ordinary Least Square
(OLS) method of multiple regression model. The results appeared to be inconsistent with already
held belief such that federal statutory allocation despite the huge amount had a negative impact,
while loans impacted the most on capital expenditure followed by internally generated revenue.
Based on the findings it is recommended that strategies be put in place for beefing up and
sustaining internally generated revenue, financing of income yielding projects through loans
based on period of benefit principle and the provision of enabling environment for the take off of
an internal economy powered by the private sector as the state moves toward financial
autonomy.
Key Words: Financing, Anambra State Government, Financing Sources, Economic
Development, Capital Expenditure, Budget and Fiscal Operations.

1. Introduction
Anambra State upon creation on 27th August 1991 was faced enormous infrastructural problems
which required a huge capital expenditure outlay to overcome. The problems were daunting and
overwhelming. The situation becomes more apparent when the responsibilities are compared
with the limited financial resources. It is this problem of insufficient funding syndrome and the
consequent overdependence on external sources of financing, that this research investigated
using the ordinary least squares method of multiple regression analysis technique.
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The period of under review is from 1992 2008 a duration of 17 years in which various
administrations in the state made great efforts, to develop the state economically and provide
basic needs for the people in the State. The state being one of the federating states of Nigeria
competes intensely for funds from the federal revenues such that Akujuobi (2001) Dajunma
(1994), Ovwasa (1995, Jimoh (2003) observed the consistent efforts made from 1946 to 1984
towards achieving an acceptable revenue allocation formula. The efforts include philipson
commission (1946), Hicks
Philipson Commission (1951), Chucks Commission (1953),
Raisman Commission (1958), Binna Commission (1964), and Dina Commission 1969). More
recent efforts include the 1981 Allocation of Revenue Act and the 1984 Allocation of Revenue
Amendment Act.
According to Philip (1980), the share of Federal revenue to the States in Nigeria has been
declining over the years and this was one of the major causes of fiscal imbalance between the
Federal Government on one hand and the State and Local Governments on the other hand.
Similarly, Jimoh (2003) showed that between 1960 and 1999 an average of about 70% of
federally collected revenue was allocated to the Federal Government. This has led the lower
level governments particularly the state governments to complain of insufficient funds to execute
the constitutionally delegated duties.
Perhaps, this can explain the near total collapse of critical infrastructure evident throughout the
Federal Republic of Nigeria. Anambra State being one of the federating states in Nigeria is
equally affected by the dearth of infrastructural in the country. The state is among the non-oil
producing states, with very little land mass and a huge ecological problem, who are complaining
that the constitutionally assigned revenue sources do not generate sufficient revenue to match the
constitutionally assigned duties the state governments are expected to carryout.
The general objective of this study therefore is to investigate and ascertain empirically the role of
the financing sources of Anambra State Government in financing the capital expenditure
profiles.
2. Hypothesis
Drawing from the general objective, the analysis is conducted on the null hypothesis that the
sources of financing namely statutory allocation, value added tax, internally generated revenue,
loans and grants do not significantly impact on the capital expenditure profile of Anambra State
Government.
3. Significance of Study
This study is undertaken to provide salient answers to the perennial problems of poor
infrastructure occasioned by underfunding and also to make policy recommendations to
Anambra State Government in particular and state governments in Nigeria in general. This work
is divided into four parts. The introduction is in part one, while the review of related literature is
in part two. Part three involves the empirical evaluation of financing sources of the capital
expenditure profile and highlights the findings. The work is rounded up with the
recommendations and conclusion.
In theory, private markets will allocate goods and services among individuals efficiently. In other
words, there is no waste of resources as individual choices are matched by the productive
abilities of the society. In the absence of a robust private sector, African Governments, on
attainment of political independence assumed the role of prime movers of their economies.
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Adubi et al (1999) posited that massive market failure existed on the African continent when
private markets failed to allocate goods and services efficiently. To buttress the position of
Adubi et al (1999), Jones and Mason (1982) stated that although market failure is the main and
common justification for state intervention, other reasons may exist to achieve other social and
political objectives. Hussien Jalilian (1999) states also that in many developing countries an
important social objective was the improvement of income distribution. The idea being that
through state intervention, the surpluses generated would be used to correct income inequalities.
However, natural monopolistic tendencies of some activities have led many governments
to hold the view that certain key sectors of national and strategic importance should be under
state control. In some cases the objective was the reduction of foreign domination of economic
activities, while in others as an opportunity to use their control of economic resources to
consolidate political power. (Baton 1998). These later objectives have led to government failure
which has been used to describe the inefficiencies associated with government intervention and
the subsequent failure of state-owned enterprises. According to Jalilien (1999) corruption and
bureaucratic procedures have been identified as major causes of the failure of these enterprises.
To perform these activities of national and strategic importance, governments are led to carry out
fiscal operations. This concept of governmental fiscal operations is essentially a duality
consisting of revenue and expenditure. According to Anyanwu (1997) a fiscal system refers to
institutional arrangement for making budgetary decisions of raising revenue, incurring
expenditure and engaging in debt/borrowing operation.
Akujuobi (2006) posits that one of the major objectives of government is the promotion of
economic development and the maximization of the welfare of its citizens. This can be achieved
by government through allocation, distributive and stabilization functions (Musgrave and
Musgrave, 1982) whether performed by public or private sector.
For a developing country like Nigeria where the private sector is not forthcoming with initiatives
for growth and development, the governments at various levels command the greater part of
national development. In literature, there abound justifications for government intervention in the
economy. Adam Smith (1913) gave the following four reasons for government participation in
the economy, national defense, administration of justice, provision of heavy public works and
duty of meeting the expense necessary for the support of sovereignty of nations. (Akujuobi and
Akujuobi 2007). Comptemporary reasons for government intervention include production cost
conditions, joint consumption and non exclusion goods. This according to Herber (1979) and
Musgrave and Musgrave (1982), along side with other important conditions of supply and
demand calls for governmental action. Other scholarly works on the concept of externality,
public goods and the need for some kind of intervention include those by Pigou (1920) who
pioneered the work on the relationship between externality and public sector, Margolis (1968),
Killick (1985) Wedel and Rodwell (1992).
Theories of economic development can be categorized into four major and sometimes competing
schools of thought. According to Todaro and Smith (2006), these include Rostow s stages of
growth models; theories and patterns of structural change; international
Dependence
Revolution and Neoclassical counter resolution. According to Walt Rostow a country wishing to
develop must pass through five stages namely:
The Traditional and Stagnant Low per Capital Stage,
The Transitional Stage,
The Take-off Stage,
The Drive to Maturity Stage
The Mass Production and Consumption Stage.
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The structural-change model states that underdevelopment is due to under utilization of resources
arising from structural or institutional factors that have their origins in both domestic and
international dualistic situations. The international Dependence Revolution Models contain
three main streams of thought namely:
Neocolonial Dependence Model
False Paradigm Model
Dualistic Dependence Thesis.
International Dependence Models view developing countries a beset by institutional, political
and economic rigidities both domestic and international and are thus trapped in a dependence and
dominance relationship with rich countries.
Capital expenditure refers to those expenses where period of benefit is more than year, which
means that the benefits are spread over a long term horizon usually more than a year.
5. EMPIRICAL ANALYSIS OF THE FINANCING OF ANAMBRA STATE CAPITAL
EXPENDITURE PROFITS
5.1 Methodology and Data Source
The sources of financing that make up the basic explanatory variables are Federal
Statutory Allocation (SA), Internally Generated Revenue (IR), Loans (LNS) Value Added Tax
(VT), Grants (GRT) and Government Fund Raising Activities (GFR) while Capital Expenditure
is the dependent variable. To ensure enough and current data points for econometric analysis, the
period covered is 1992 to 2008. The statistical data was compiled from various issues of the
reports of the Accountant General of Anambra State Government. With the application of
computer software, Statistical Package for Social Science (SPSS 15.0), the Ordinary Least
Square (OLS) method of multiple regression models was used to test the joint impact and
individual contributions of the independent variables to the capital expenditure of Anambra State
Government.
5.2 Data Presentation
The study was conducted using data presented on Table I.
5.3 Test of Significance
The coefficient of multiple determinations (R2) was used to test the goodness of fit of the model
for management decision making. The F-test was used to test overall significance of the
explanatory variable taken together. The student t-test was used to test for the significance of
each explanatory variables contributing to the financing of the capital expenditure profile of
Anambra State Government as the number of years under review is below (30) thirty.
5.4 Model Specification
In order to evaluate the Anambra State Government capital expenditure the following model was
specified and the functional form given as thus:
CAPEX = F[SA,IR,LNS,VAT,GRT,GFR] ________ (1)
Where
CAPEX
=
Capital Expenditure
SA
=
Federal Statutory Allocation
IR
=
Internally Generated Revenue
LNS
=
Loans
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VAT
GRT
GFR
=
=
=
Value Added tax

Grants
Government Fund Raising Activities
5.5 Mathematical Form of the Model

The mathematical representation of the ordinary lest squares regression model (Multiple
Regression Model) adopted for the study is as follows:
CAPEX = B0 + Bb1+ SA + B2IR + B3LNS + B4VAT + B5GRT + B6GFR + E __ (2)
Where
B0 = Represents the intercept parameter,
B1 B6 = Represent the slope parameters of the independent variables
The error term of the regression t is introduced to represent the unexplained variation
encountered in the modeling as chances abound in real life that would make the model not to be
100% certain.
Results from the regression output (table 3) is used to fit a model equation for the capital
expenditure against all financing sources as follows indicating a predictive model for the
financing of Anambra State Capital Expenditure Profile.
Estimated predictive model:CapeXt = -826.088-0.181sAt + 1.08541Rt + 3.497VATt
+ 0.729LNSt + 0.396GRTt 0.320 GFRt --- 3
Also the order of contribution of each explanatory variable as deduced from the t-student test is
as given below in descending order.
LNS >
1R
> GRT
> VAT
> SA
> GFR
2.484 >
2.032 > 0.796
> 0.745
> -0.241
> -0.462
Test of the hypothesis.
The Null hypothesis is stated as all the financing sources have no significant effect on the
capital expenditure for the 17years under review. This means that all the coefficients of the
explanatory variables in the regression model are zero which is stated mathematically below:
Here the null hypothesis (Ho): Bo = B1 = B2 = B3 = B4 = B5 = B6 --- Bk = 0
Where k = 1-6
The alternative hypothesis (H1) Bo B1 B2 B3 B4 B5 B6 --- Bk
0 where k = 1 - --- 6
This is to say that at least one of the financing sources has a significant impact of the capital
expenditure, the dependent variable
6. ANALYSIS OF VARIANCE (ANOVA)
The significance of the model as a whole was tested using the analysis of variance technique
through the application of SPSS 15.0 computer software.
7. DECISION RULES:
F test:- The test of the model as a whole is done with F statistic. The decision rule for this test
is if the calculated F statistic by the computer is greater than the tabulated F statistic, we
reject the Ho and conclude that the regression is significant. In other words, the independent
variables play a significant role in the variation in the dependent variable.
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As shown in table 2 Anova , the computer calculated F statistic is 19.875. This compared with
F values from the table at 1% and 5% levels of significance to make the study more meaningful.
F tabulated at 1% with (6.10) degrees of freedom is 5.39 and at 5% is 3.22.
From the above values it can be seen that
At 1% level of significance F calculated of 19.875 > F tabulated of 5.39
At 5% level of significance F calculated of 19.875 > F - tabulated of 3.22.
Since F*cal. 19.875 > Ftabulated @ 1% & 5% (5.39 and 3.22) Df (6, 10) respectively, We reject
the Null (H0) Hypothesis and Accept HA and state that there is a significant relationship
between the financing sources and the capital expenditure of Anambra State Government.
t-tab @ 5% = 2.228 (Df.)
t-tab @ 1% (Df:10) 3.161
The order of contribution is summarized as follows
LNS > IR > GRT > VAT > SA > GFR
2.484 > 2.032 > 0.796 > 0.745 > -0.241 > 0.462
Estimated model: The resultant estimated model is as follows
Capext = -826.088 + -0.181SAt + 1.854Rt + 3.497VATt + 0.729 LNSt + 0.396GRT + - 0.320
DGFR.
It is therefore correct to accept the alternative hypothesis according to the decision rule and state
that the model estimate significantly explains the variation in the capital expenditure for the
period under review.
8. Recommendations
On the basis of these findings we therefore offer the following recommendations.
As captured by Akujuobi and Akujuobi (2009) in their study of financing sources of state
governments in Nigeria, the states were not generating enough internally. In Anambra state, this
very important source was found not significant to the capital expenditure. Efforts should be
made towards generating more revenue internally. These efforts should include the following:
i.
It is hereby strongly recommended that the state government should; through the use of
information technology, professionals, well trained staff and revenue consultants, overhaul
its internally generated revenue machinery, incorporating checks and balances mechanism to
control and forestall leakages and sharp practices of corrupt officials.
ii.
Since the state is the home of very enterprising businessmen, it should establish clusters of
industrial parks equipped with all necessary infrastructures to enable cottage industries, small
and medium enterprises emerge from the informal sector to the formal sector where their
economic potentials can be easily quantified, assessed and exploited.
iii.
The state government should promptly fish out and deal with fraudulent revenue staff, tax
evaders and other non-compliant tax payers. It should also endeavour to reorganize and
restructure the staff orientation of the board of internal revenue to ensure effective and
efficient revenue collection.
iv.
The state should strive to ensure the exploitation of the enormous oil reserve in the state in
order to participate in the sharing of the 13% derivation fund to increase its share of the
federation account as an oil producing state.
v.
All efforts must be directed to the coming on stream of orient refinery and petrochemical
industry situated in the state in the shortest possible time to earn regular streams of income
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from the annual profits coupled with the economic development that will come about through
the multiplier effect the refinery will have in the state.
vi.
The gas generated from the oil fields will also be used to generate electricity which will help
to unleash the productive capacity of the people of the state, hither to held ransom by power
holding company of Nigeria through epileptic power supply.
vii.
The state as the findings indicate has not made much use of grants in financing of projects.
This is not very encouraging. The state should pay its counterpart funding to keep attracting
internal and external grants for the provision of critical infrastructure in the state. This will
definitely reduce over reliance on loans which have negative impact on economic
development as identified by Akujuobi and Onuorah (2007).
viii.
The current rebranding effort of the Federal government should be embraced by the state
along with the anti-corruption crusade and the due process programme in its revenue
generation efforts.
ix.
Anambra state should also embrace the use of modern financing instruments as long term
debt securities to build markets, establish transport schemes and warehouse storage facilities
since majority of her people are engaged in wholesale and retail trading which contributes
about 12% of the Nations Gross Domestic Product (GDP) (CBN statistical bulletin 2007).
9. Conclusion
The foregoing findings therefore informed some conclusions which include:i.
The negative impact of the statutory allocation is a pointer to the under funding of Anambra
state as it is not an oil producing state with a small land mass.
ii.
The negative direction of the impact of statutory allocation is also a confirmation of the funds
mis-appropriation theory as held by the majority of the citizenry on the ability of the state
government officials to manage resources.
iii.
Also from the results, the state s reliance on loans to provide infrastructure will increase the
pressure on recurrent expenditure as the principal and interest are paid, with the state finding
itself in a vicious cycle.
iv.
The result is in line with Rostow s stages of growth and Harrod-Domar (AK-model) growth
models where the mobilization of domestic and foreign savings (due to poor capital
formation in low-income developing countries) (LDC) through loans is a necessary strategy
for economic development at the take off stage which is the beginning of economic growth
process (Todara and Smith 2006).
v.
Finally, it is obvious from the study that Anambra State Government depends largely on
loans in the financing of her capital expenditure profile and less dependent on Internal
Sources and Statutory Allocation. According to Akujuobi and Akujuobi 2009, this portents
danger for the state as well as other states in Nigeria, and does not help their quest for
political autonomy and economic development.
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References
Adigwe P.C. (2000), Public Finance A Contemporary Approach, Amazing Grace Printing and
Publishing Company Enugu.
Adimmadu M.E. (2003), Finance Today and Challenges to Development, Barlo Publishers,
Benin.
Adubi A.A and E.C. Obioma (1999), Public Expenditure Management in Nigeria. NCEMA,
Ibadan.
Afolabi L. (1999) Monetary Economies Heinemann Educational Books (Nig) Plc Ibadan.
Akujuobi L.E. (2006) Investment Analysis Osprey, Owerri.
Akujuobi L.E. and A.B.C. Akujuobi (2006), Fiscal Federalism and Resource Control. The way
out of Nigerian Marginalization Problem in Journal of Economic and Financial
Research Vol. 1 No 1 March.
Akujuobi L.E and A.B.C Akujuobi (2007), An Evaluation of the Financing of the Expenditure
Profiles of State Government in Nigeria in Economic and Business Review Vol. 1 No 1
January.
Akujuobi L.E and A.C. Onuorah (2007), Debts and Economic Development in Nigeria Journal
of Research in National Development, Vol 5 No 2 http/www.transcampus.org.
Anyanwu J.C. (1997), Appraisal of the 1996 Budget and the highest of the 1997 Budget.
NCEMA Policy Analysis Seies Vol. 3 No 1.
Central Bank of Nigeria (1996), Annual Reports and Statement of Accounts Lagos.
Ekpo A.H. (1995) Public Expenditure and Economic Growth in Nigeria in A.A. Fajingbesi and
A.F. Odusola, eds, Public Expenditure and Growth, NCEMA, Ibadan.
Jimoh, A (2003). Fiscal Federalism, the Nigerian Experience n Fiscal Policy and Growth in
Africa s Fiscal federalism, Decentralization and the incidence of Taxation, Ad Hoc
Expert Group Meeting UNCC Addis Ababa 7th 9th October.
Ministry of Finance, Government of Anambra, 1992 2009 Estimate of Anambra State of
Nigeria, Government Press, Awka.
Munnel A.H. (1990) Why has Productivity Growth Declined? A.A. Fajingbesi and A.F.
Odusola, eds, Public Expenditure and Growth, NCEMA, Ibadan.
Mum, G. and Woelfil (1991), http://em.wikipedia.org/wk/capital-expenditure .
Musgrave R.A. and P.B. Musgrave (1982), Public Finance in Theory and Practice, McGraw Hill,
New York.
Ndekwu E.C. (1998), Tax Structure and Administration in Nigeria. NISER, Ibadan.
Nnamocha P.N. (2002), Public Finance for a Developing Economy: The Nigerian Application,
BON, Owerri.
Nwezeaku N.C. (2005), Taxation in Nigeria Principles and Practice Springfield Publishers,
Owerri.
Nwezeaku N.C. (2006) Theories and Practice of Financial Management Springfield
Publishers, Owerri.
Nworuh G.E. (2001), Fundamentals of Applied Quantitative Techniques for Management
Decisions Bon Associates, Owerri.
Smith, A. (1913), The Wealth of nations, Macmillan & Co, London.
Todaro M.P. and S.C. Smith (2006), Economic Development New Delhi India, Darling
Kindersley, New Delhi.
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Annexure
TABLE 1 : ANAMBRA STATE GOVERNMENT FINANCING
EXPENDITURE PROFILE (1992-2008) (=N=MILLION)
YEAR
CAPEX
SA
IR
VAT
LNS
1
1992
438.40
960.00
157.65
.00
250.15
2
1993
497.23
708.20
169.44
.00
268.07
3
1994
526.57
741.15
172.21
.00
265.95
4
1995
1214.50
1167.05
815.00
.00
285.04
5
1996
858.40
1077.50
924.50
.00
210.60
6
1997
615.20
1337.30
432.60
.00
175.80
7
1998
767.90
1585.40
403.70
474.40
257.00
8
1999
2358.80
1707.90
861.10
658.50
349.00
9
2000
13911.40
6419.90
861.00
649..90
7679.90
10
2001
12602.40
7415.00
1664.20
886.40
10873.90
11
2002
9856.90
11400.00
2621.10
1440.00
8827.90
12
2003
1929.60
12008.30
804.40
1464.00
3691.20
13
2004
7138.60
16338.60
3664.40
1800.00
114.00
14
2005
15906.90
19707.90
7464.70
2040.00
339.20
SOURCES
GRT
5.24
10.30
4.53
9.09
74.00
58.30
92.60
2985.50
2361.00
930.50
893.00
4035.00
676.80
6771.60
15
2006
15616.40
23324.50
4660.20
2701.30
80.00
7323.50
16
2007
25080.38
25407.37
6023.87
3543.46
3024.55
4923.46
17
2008
29440.40
31359.89
5981.61
4672.53
3498.08
13437.88
Source: Report of the Accountant General and Budget Estimates of Anambra state government
various years (1992-2008)
AND
CAPITAL
GFR
50.60
56.44
61.10
60.80
.00
.00
.00
.00
419.90
.00
.00
.00
6265.10
4525.20
6304.50
.00
.00
Y
=
CAPEX =
CAPITAL EXPENDITURE
X1
=
SA
=
STATUTORY ALLOCATION
X2
=
IR
=
INTERNAL REVENUE
X3
=
VAT
=
VALUE ADDED TAX
X4
=
LNS
=
LOANS
X5
=
GRT
=
GRANTS
X6
=
GFR
=
GOVTS FUND RAISING ACTIVITIES
Data Source: Secondary data obtained from
1)
Reports of the Accountant General of Anambra State Government
2)
Budget estimates from the ministry of finance (MOF) of Anambra State Government.
Variables Entered/Removedb
Model
1
Variables
Entered
Variables
Removed
GFR,
LNS,IRa
VAT, SA
Method
.
Enter
a All requested variables entered.

b Dependent Variable: CAPEX
Model Summary
Model
1
R
a
.961
R Square
.923
Adjusted R
Square
.876
Std. Error of
the Estimate
3260.09225
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INTERDISCIPLINARY
JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS
b
VOL 2, N O 10
Model Summary
Change Statistics
Model
Durbin-Watson
Square Change
F Change
df1
df2
1
.923
19.875
6
a Predictors: (Constant), GFR, GRT, LINS, IR, VAT, SA
ANOVA
10
Sig. F Change
.000
1.541
Sum of
Squares df
Mean Square
Regression
1E+009
6
211237312.44
Residual
1E+008
10 10628201.477
Total
1E+009
16
a Predictors: (Constant), GFR, GRT, LINS, IR, VAT, SA
Model
1
Sig.
19.875
.000
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A CRITICAL ANALYSIS OF THE EFFECTS OF
ECONOMIC VARIATIONS ON REAL
PROPERTY MANAGEMENT:
A CASE STUDY OF ONITSHA PROPERTY MARKET
VOL 2, N O 10
Listed in ULRICH S
Mr. Onwumere, Victor Onyema

B.sc (Est. Mgt), M.sc (Est. Mgt), ANIVS, RSV, Head, Department of Estate Management
Technology, Imo State Polytechnic Umuagwo, Nigeria.
Dr. Chinedu Chidinma Nwachukwu
B.Sc (Est Mgt), M.Sc (Project Mgt), Ph.D (Project Mgt), PMP, ANIVS, RSV, FCRMI,
Lecturer, Department of Project Management Technology, Federal University of
Technology, Owerri, Imo State.
Abstract
The real property market constitutes an integral part of the general business economy. The two
sectors are so closely related that trends in the business economy may come from or result in
changes in the real property market. This work is an attempt to gain an insight into the nature and
conditions of the property market under the prevailing economic changes in Nigeria. The
resulting problems which have contributed greatly to making real property management a
difficult task are highlighted in this work. Hence, the purpose of this study was to critically
analyze the effects of economic variations on real property management using Onitsha property
market as a case study. The study was able to discover the major causes of economic problems in
Nigeria and possible solutions were proffered. Estate Surveyors and Valuers were advised on
how to deal with some of the effects of economic variation on Real Property Management. The
study also sought to enlighten the public on the importance of the roles of Estate Surveyors and
Valuers in the real estate sector of the economy. Recommendations were made to Estate
Surveyors towards improving Real Property Management practice in Nigeria.
Keywords: Economic Analysis, Effects , Economic Variations, Real Property Management,
Property Market
1. Introduction
The Nigerian civil war which took place between 1967 and 1970, disorganized all sectors of the
economy. According to Okongwu (1986, p.11) if we exclude the civil war experience, cyclical
swings in oil receipts exerted marked influence from 1974. The petroleum sector exhibited an
increasing and dominant influence as regards contributions to government revenue, rising from
1% in 1960 to over 80% as of now. At the same time, partly because of the vagaries of oil, we
have now forcefully rediscovered what we had really known all along: that this excessive
reliance on crude petroleum exports, this essential replacement of the previous composite vector
of traditional primary exports with the single, though more lucrative, crude oil vector, does not
provide secure foundations for prosecuting deliberate development policy.
Much reliance placed on petroleum and its allied products was the main cause of our economic
problems. Moreover, the gains from oil boom were not wisely utilized owing to lack of foresight.
At a point in time, our economy became import and consumption oriented. So, when the oil glut
hit, we were caught napping. The oil glut is a situation in the oil market where the oil supply
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substantially exceeds its demand. We became a debtor nation; fell from boom to recession and
from grace to grass. The mismanagement of our foreign reserves and public funds and excessive
government recurrent expenditure also contributed to our economic problems.
Government economic recovery policies in the short time worsened the situation in the market.
Such policies include the Austerity Measure of 1982; Economic Emergency Programme of
1985; the Structural Adjustment Programme of 1986; Second Tier Foreign Exchange Market;
increase in Local Fuel Price to get more revenue for the government, Banning of some imported
goods without giving a reasonable period of time to adjust, etc. These policies resulted to serious
variations in every sector of the economy.
The study considered the effects of these changes on real property management with a special
focus on the Onitsha property market. The specific objectives of this research are:
i.
To investigate the major cause of economic problems in Ontsha as they affect property
market;
ii. To suggest possible ways to revamp Onitsha real property market;
iii. To establish the relationship between the real estate economy and the general business
economy;
iv.
To ascertain the effects of economic variations on real property management in Onitsha;
v.
To encourage Estate Surveyors to always analyze the real property market to enable them
manage economic fluctuations and crises;
vi.
To emphasize the need for employing professional Estate Surveyors in both private and
public sectors to offer advice and render property management services in order to make the
life of the real property to last longer especially, at this time of economic problems.
Data on which analysis are based were mainly from administration of questionnaires, oral
interviews, personal observations and collection of relevant information from textbooks, journals
and papers. The population of the study was fifty (50) practicing Estate Surveyors in Onitsha.
Out of these Estate Surveyors, forty (40) of them were drawn through stratified random sampling
technique. Forty (40) questionnaires were administered; out of which thirty-eight (38) were used
for the analyses. Chi-square (x2) test statistics was used to test the hypothesis of the study, which
states that there is significant negative effect of Economic Variations on Real Property
Management in Onitsha. The result of the study revealed that economic variations in Nigeria
have adverse effects on real property management in Onitsha. The test statistics showed that at
0.05 level of significance (X2 cal.=44.2500, X2 tab.=5.991), there was a significant negative effect
of economic changes on real property management in Onitsha. The study revealed that the major
cause of economic variations in Nigeria was over-dependence on Petroleum and its allied
products at the expense of Agriculture and other sectors of the economy. Inadequate planning of
various government recovery policies worsened the situation in the market. These policies had
adverse effects on per capita income of the people. There was no co-ordination in pricing system,
therefore, the prices of goods and services increased discriminately. The deregulation of interest
rate made borrowing for investment purposes very costly. Incessant political, social and religious
hostilities disrupted Nigerian economy. Sometimes, problems in the global economy caused
economic changes in Nigeria. The study identified the effects of these economic problems on
Real Property Management as tedious rent revisions, under estimation of maintenance costs,
higher incidence of rent defaults, stagnant rents, delayed maintenance, unrealistic forecasting etc.
To stabilize Nigerian economy, more attention should be given to Agriculture and other sectors.
The government should come up with measures to solve incessant political, ethnic and religious
crises which discouraged foreign investors. The principles of checks and balances should be fully
implemented among the three arms of government to check the problem of mismanagement of
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public funds by those in leadership positions. Estate Surveyors and Valuers operating in a
variable economy should analyze and recognize trends in the market to enable them manage
economic fluctuations and crises.
2. The Problem
Nigerian economy has been unstable since her independence in 1960 due to some factors.
Instability in the economy has been provoking some changes in every sector. It is the purpose of
this study to critically analyze the effects of economic changes on real property management
with focus on Onitsha property market.It is also the intention of the study to guide Estate
Surveyors operating in a variable economy on the possible ways to cope with the situation to
achieve positive results.
3. Economic Variations
Variation means varying or being variant. It is a thing that differs from other things or from a
standard (Hornby 1989, p. 1412). There are four common different types of economic variations
namely: seasonal variations, cyclical fluctuations, long-term movements and random changes.
According to Kyle (1983, p. 15) changes that recur at regular intervals at least once a year are
called seasonal variations. Such changes arise from both nature and custom. In the northern
United States, for example, construction virtually stops during the winter months and this
seasonal change affects both the government and the real estate economy.
Historically, economists have concentrated on cyclical fluctuations in the general economy.
Business cycles are usually defined as wavelike movements of increasing and decreasing
economic prosperity. A cycle consists of four phases: expansion, recession, contraction and
revival (Kyle 1983, p. 16). Long-term movements of the general economy, usually measured
over 50 years or more, reflect the overall direction the economy is taking. For example, the
steady increase in goods and services produced per capita in the U.S is a long-term movement
upward. Such movements are believed to result from population growth and shifts, technological
breakthroughs, the rate of savings and investment, and utilization of natural resources. Political,
bureaucratic and contingency factors also influence a nation s growth rate. The growth pattern in
specific industries is usually quite different from the national long-term growth pattern (Kyle
1983, p. 17). Random changes are non-periodic fluctuations of the economy that may be caused
by legislative and judicial decisions or by strikes, revolutions, wars, fires, storms, floods and
other catastrophes. These changes, impossible to predict or analyze, may affect one or more
sectors of the aggregate economy. They may affect all industries in an area or one industry
nationwide. Real estate activity, especially, construction, is very vulnerable to labour strikes,
political changes and natural disasters. One example of a random change with regard to real
estate is a national labour strike which would halt construction activity. Another is a zoning
ordinance change allowing undeveloped land to be used for industrial purposes, which would
stimulate construction activity in that locality. The only way to survive random fluctuations of
the economy is to be alert to them and adaptable enough to cope with events as they occur (Kyle
1983, p. 18).
4. Real Property
The Oxford Advanced Learner s Dictionary, the fourth edition (1989, p. 1044) expresses the
term real property as: immovable property, consisting of land, buildings, etc.Real property
includes land as well as buildings and other material improvement on it and legal right relating to
these assets. There are many types of real properties. Each type is also made up of separate subcategories. Real property can be classified according to their ownership, use and physical form.
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These classifications are Commercial, Residential, Industrial, Agricultural, Recreational,

Building Land, Mineral Properties, etc.
There are two broad divisions of property. The first is Real Property also called Realty. This
refers to land whether developed or undeveloped. This was the main known form of property
over the ages. There are however, other forms of property more abundant in supply because men
through their conscious effort can increase their quantity e.g. clothes, motor cars, books,
television sets, etc (Osime 1989, p.74). Osime (1989, p.74) also emphasized on the peculiar
features of real property; he stated that the area of land in any particular locality or country is
fixed or limited. Another peculiar feature of land is that it is immovable. For this reason, there
are special procedures for its acquisition, tenure and disposition. While real property is immobile
in nature, the other forms of properties mentioned above which are known as personal properties
can be freely moved from one place to another.
5. Real Property Management
Estate/Property Management is defined as: the direction and supervision of an interest in landed
property with the aim of securing the optimum return; this return need not always be financial,
but may be in terms of social benefit, status, prestige, political power or some other goal or group
of goals (Thorncroft 1965, p. 3).
In this definition, Management embraces both direction or the overall control of policy.
Supervision here entails implementation of the policy. The meaning given to Estate is also
wide and includes any interest in landed property giving rise to a measure of control.
According to Sangosanya (1983, p.40) real property management is essentially concerned with:
the decision to develop, maintain, improve or replace buildings in their setting in order to satisfy
or provide physical framework for satisfying human needs. It is therefore concerned with
investment decision and economic use of resources. There are five stages in such a process:
i.
ii.
The vision of the idea;

The analysis of the present position and the resources that are available or could be made
available;
iii. The decision to (develop, maintain, improve or replace), and the preparation of the plan of
operation;
iv.
The creation of the bridge from plan to reality, whether it is the bridge of tenure or where an
adequate form of ownership already exists, the provision of inspiration, advice or financial
help;
v.
The execution of the work.
6. Real Property Market
The term market has different meanings and as such has become relative to the field of
operation, sphere of life and/or context within which it is used. According to Ring and Dasso
(1979, p. 39) a market may be defined as:
i.
A meeting of people (buyers and sellers) who wish to exchange goods and money;
ii. A public place (as in a town) or a large building where a market is held;
iii. The region in which any commodity can be sold;
iv.
The course of commercial activity by which the exchange of commodities within a
market area is affected;
v.
A body of goods.
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However, as applied to real property, the fourth definition suits our purpose. Hence the term
market in the context of real property market could be defined as: a course of commercial
activity by which the exchange of commodities within a market area is affected (Ring and Dasso
1979, p. 39). Although a market is usually thought of as a locality, it is rather the interplay of all
comprising factors, which will affect the transaction if the subject property is offered for sale. It
is not only the sum of the transactions of buying and selling and renting real property but would
also include: All the factors and forces of demand and supply which influence market prices and
which affect the rate or intensity of market activity; thus the market is not a particular place
(Ratcliff 1961, p. 227).
It is the interplay of such factors which seek primarily to determine demand, supply, rent ability
and development that function to produce a real property market. A property may be purchased
either for owner s occupation or for investment purposes. Likewise, the real property market
could be a rental market involving transfer of real property ownership. Real property market
operations are classified according to the type of property traded. The kinds of real property
market recognized as specialized fields of operation include:
i.
Residential;
ii. Commercial;
iii. Industrial;
iv.
Agricultural;
v.
Special Properties, etc.
7. REAL PROPERTY MARKET ANALYSIS
A neighborhood that has a diversified yet well-integrated business sector is in better economic
condition than an area that depends on a single major industry for its support. If that company
moves, the economic framework of the area would probably collapse. The property manager can
draw upon several sources of statistical information for help in assessing the economic health of
a neighborhood. Brokers, appraisers and local newspapers are fruitful sources, as is the local
chamber of commerce, which should be able to supply data on the number and type of
businesses in the area, the volume of their activity, and the general trend of growth in the past.
Neighborhood financial institutions are another important barometer of the area economy. The
volume of mortgage loans outstanding reflects the overall confidence in the real estate market. If
banks will not make loans for which property in the area serves as collateral, it is a fairly safe
assumption that the value of real estate in the neighborhood is declining.
The property manager must also try to assess the potential for growth within the community.
Provided there are no natural or artificial boundaries or local zoning restrictions, the opportunity
for growth will depend upon the amount of existing competition in the neighborhood and on the
availability of loans for construction or expansion. An inverse relationship exists between
mortgage interest rates and business activity: as interest rates climb, business growth drops. The
manager of commercial or industrial property can secure this and other meaningful information
from the local chamber of commerce and banking institutions.
Rental rates currently being charged in the neighborhood are another sound indicator of the
present economic strength of the real estate market. When space is in short supply, rents are
high. The consumer price index published by the Bureau of Labor Statistics displays trends in
rental schedules in 20 sample cities. Housing classifieds placed in local newspapers over the past
couple of years will yield information on a particular neighborhood. The best and most reliable
information, of course, is obtained by the property manager through telephone calls to local
businesspersons and a thorough shopping of the competition (Kyle 1983, pp. 22-23).
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8. SUPPLY AND DEMAND ANALYSIS

The occupancy rate for a particular type of property reflects the relationship between supply and
demand for that type of space at its current rental level. As occupancy and vacancy rates are
continually fluctuating, so too are supply and demand.
A high occupancy rate indicates a shortage of space and the possibility of rental increase. A low
rate, as evidenced by many for rent signs posted in the area, will result in tenant demands for
lower rents, decorating or tenant alteration allowances, and other concessions on the part of the
landlord, such as free rent or gifts of appliances.
The oversupply of space which results in low occupancy rates can be either technical or
economic in nature. Technical oversupply occurs when there are more units available than
potential tenants, while economic oversupply reflects the fact that the space available is priced
beyond the purchasing power of the potential tenants.
Statistics on vacancy rates can be obtained from the U.S Census Bureau, from current regional
housing reports published by the Department of Commerce or `from local owner-manager
associations. The Building Owners and Managers Association publishes local occupancy surveys
that are useful to commercial property managers. Local utility companies are another fruitful
source of information concerning occupancy levels. The number of inoperative meters
corresponds roughly to the amount of vacant space. Useful information on vacancy rates can be
collected from the office of the National Population Commission in Nigeria.
To find out whether occupancy levels for a given type of property are rising or falling, and how
rapidly, the property manager must survey comparable properties. The amount of similar existing
space and vacancy levels in the neighborhood must be inventoried according to building type,
age, size, location, features and rental schedule. New construction must also be noted. The
second step in analyzing occupancy trends is matching the local tenant population to the
available space. Of interest here are the number and density of potential tenants, their ability and
willingness to lease, and the stability and trend of their financial resources or income.
Information about the tenant population (whether individual, as with residential properties, or
corporate, as with office space) can be obtained through government agencies, local chambers of
commerce, and other outlets. The manager must then project the growth rate of the market based
on past economic trends and current conditions.
8.1 Social and Cultural Aspects
The final checkpoint in the manager s survey of a neighborhood is more relevant to residential
property managers than to managers of commercial or industrial real estate. Nonetheless, any
amenities that make the neighborhood attractive to potential residents will indirectly benefit
business and industry by providing a local pool of potential consumers and employees. When
touring the neighborhood, the manager should note the number and location of parks,
playgrounds, theaters, restaurants, schools, colleges, churches, and any other social or cultural
organizations that will be attractive to potential tenants (Kyle 1983, pp. 23-24).
9. Evaluation of the Market Data
Once the regional and neighborhood market surveys are complete, the manager must analyze the
information concerning transportation facilities, economic conditions, type and amount of similar
space, rental schedules, and population composition. When reviewing this data, the manager
must keep in mind the special features of his or her particular type of property and the needs of
the potential tenants.
Industrial property managers should pay attention to opportunities for expansion, transportation
facilities, special utility services, the availability of raw materials, and the potential work force in
the area. In most locales, the chamber of commerce will have this information available. Traffic
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counts and patterns, the location of competitors, public transportation facilities, parking space,
and the median income of the population are deciding factors for the manager of commercial
property. Residential property managers will be most concerned with the size of family units, the
median income level, population trends, current employment rates and the area s social and
cultural facilities.
By reconciling the data gathered from market surveys with the specific features of a particular
property and the current rental rates in the area, the manager can arrive at the optimum price for
a standard unit of that type within the market area. From this figure the base expected income for
the property can be calculated. Regional and neighborhood analysis are only as reliable as the
judgments behind them. It takes a professional property manager who is knowledgeable about
real estate economic cycles to assess their impact on future trends in his or her own market area,
and thus be able to take advantage of this knowledge (Kyle 1983, p. 24).
Table 1: 2006 POPULATION CENSUS DISTRIBUTION IN ONITSHA:
L.G.A
MALE
FEMALE
TOTAL
Onitsha North
63,304`
61,638
124,942
Onitsha South
72,204
64,458
136,662
135,508
126,096
261,604
Total
Source: National Population Commission Office, Awka, January, 2008.

According to 2006 population census, the total number of people in Onitsha was 261,604. From
personal observation of the researcher, the total number of people in Onitsha is more than the
number approved by National Population commission. This shows that the census was not
properly conducted in Onitsha. The 2008 figure can be calculated thus:
pn = p(1+r)n where:
pn = Projected 2008 population;
p = the base population ie, 261,604;
r = rate of population growth ie, 2.25%;
n = the number of years of projection ie, 2 years.
pn = 261,604(1+2.25%)2
pn = 261,604(1+0.225)2
pn = 261,604(1.0225)2
pn = 261,604(1.0455063)
pn = 273,508 people
There is increase in population from 261,604 to 273,508 between 2006 and 2008. This
shows about 4.6% increase in population of Onitsha residents. It equally indicates that
there is relative increase in demand for properties for residential purposes.
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Table 2. THE RESULT OF THE ANALYSIS

Response
Fo
Fe
(Fo-Fe)
(Fo-Fe)2
(Fo-Fe)2/Fe
Yes
32
12.67
19.33
373.65
29.49
No
12.67
-9.67
93.51
7.38
Indifferent
12.67
-9.67
93.51
7.38
Total
38
38.00
-0.01
44.25
Source; Computer analysis of the study

Decision: Since the computed X2 value is greater than the critical value
(X2(44.2500) >
x2(5.991) , we accept the yes hypothesis (H1) and then conclude that Economic
Variations have adverse Effects on Real Property Management in Onitsha.
10. RELATIONSHIP BETWEEN THE ECONOMY AND REAL PROPERTY MARKET
The real property market constitutes a major integral part of the general business economy. The
two sectors are so closely related that trends in the business economy may come from or result in
changes in the real property market. They have a direct relationship. Let RPM and GBE
represent the real property market and the general business economy respectively. Then, the
equation connecting the two quantities is:
RPM = K
GBE
Or RPM = K(GBE)
This means the ratio of RPM to GBE is always constant. The relationship may also be written,
RPM & GBE, which reads RPM is proportional to GBE. The graph of RPM plotted against GBE
is a straight line through the origin. It is obvious that if RPM is doubled, GBE must also be
doubled. If GBE is halved, RPM must be halved and so on. The relationship is further illustrated
graphically.
RPM
0
GBE
Figure 1 :The graphical illustration of the relationship between Real Property Market
(RPM) and General Business Economy (GBE).
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Recessi on
ns
io n
Co
Exp
a
EC ONO MIC ACTIVITY
11. ILLUSTRATION OF ECONOMIC VARIATIONS WITH THE RENTAL MARKET

Construction cycles in residential, commercial and industrial properties are important to the
property manager because they influence supply and demand for various kinds of rental
accommodation. During the expansion phase (see fig. 4.4) of the building industries, the rental
market is generally good and vacancy rates are low. Construction activities increase at this phase.
The country is working at near full-employment level; wages and consumer purchasing power
climb to their highest point. The demand for goods and space (accommodation) increase. Prices
increase due to greater demand and the purchasing value of the naira decreases. Credit is equally
eased and more money becomes available for purchasing. At the same time, the increased profits
earned by developers attract new capital for the continued expansion of construction activities to
meet space demand.
Peak
n st
ruc
t
io n
Reviv al
(TROUG H)
TIME
FIGURE 4.4: THE CONSTRUCTION CYCLE
As the cycle peaks, the supply of let-able accommodation equals and exceeds the demand. At
this point, rent begins to fall and vacancy rates increase. During the contraction phase, the rental
market is poor and vacancy rates are high. The property owners begin to compete for tenants.
The result is a drastic reduction in rents.
When the cycle reaches the trough stage, the demand for space once again equals its supply. At a
time, the demand begins to surpass the supply of available space causing rental rates as well as
construction activities to increase.
A special feature of the real estate rental market is its tendency to undergo a severe and
prolonged contraction phase. When the supply of a manufactured product exceeds the demand
for it, the manufacturer is able to cut back on output in order to balance supply and demand.
However, during contraction of the real property rental market, property owners cannot reduce
the amount of leasable space in their buildings. Let-able accommodation that was constructed to
meet business and consumers needs at the peak of the cycle remains. Vacancy rates increase as
the downward trend becomes more severe. Since a minimum rental rate must be charged to cover
operating expenses on the property, rental rates generally do not drop below a certain point.
Some property owners may decide to take their unlet space off the market rather than losing
reasonable money. Some developers who are unable to subsidize the property, will sell at
distressed prices and mortgages will repossess others.
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12. WHO IS A PROPERTY MANAGER?

A property manager is a man or woman who has acquired the necessary skills and is involved in
leading a team of functionaries engaged in directing and supervising real property with the
purpose of securing the ultimate objective of the owners.
A professionally trained property manager in this context is an Estate Surveyor and Valuer where
an Estate Surveyor and Valuer is a person who has been registered by the Estate Surveyors and
Valuers Registration Board of Nigeria. Property managers can be classified into two main
groups: Internal and External property managers. Internal property managers are those who are
employed directly by property or estate owners who may be private business organization such
as Banks, Insurance companies, trading and manufacturing concerns, or by Federal, State or
Local Government including Government parastatals such as NEPA, NPA, NNPC, etc. External
property managers consists of firms and Individual Estate Surveyors and Valuers in private
practice who are retained by property owners to provide a complete or partial range of property
management services. He represents the client and acts as a mediator between the tenants and
landlord.
13. FUNCTIONS OF A PROPERTY MANAGER
In a normal Management Contract Agreement, the range of services required to be provided by a
property manager can be classified into the following:
Determination of rental value, collection of rent, keeping and rendering of accounts for
rent collected.
Keeping of property register and records which will provide necessary data on the
property, including location, details of ownership, details of tenants, long range diary of
events, details of rent reviews, etc. The records should be kept in such a manner that the
events could be picked up and acted upon in good time.
Dealing with the selection of tenants, negotiating and agreeing terms and ensuring that
tenancies/leases/sub-leases are appropriately documented and where consents are
required, ensuring that such consents are obtained.
Ensuring that the covenants either in a head-lease, in a certificate of occupancy or other
forms of conveyance are observed and performed, including payment of ground rents and
development charges.
Dealing with tenement, general and water rates, ensuring collection from those liable to
pay and that payments are made promptly to the relevant authorities.
Advising on adequate insurance for the property, reviewing the sum insured at required
intervals and ensuring that premium is paid regularly.
Where services are provided such as in blocks of flats or in other multiple occupation
property, ensuring that such services are run to the satisfaction of both owners and
tenants. This will also involve the determination and collection of service charges. In this
connection, it is advisable to remember that service items such as lifts, generators,
pumps, etc, will usually require replacement at some time in the future. Therefore, a
provision for this should be included in the service charge account.
Selection and supervision of staff for the property:- This will consist mainly of porters,
lift operators, cleaners, electrical and mechanical technicians who are engaged directly
and exclusively for a particular property. Sometimes the services of such staff are
contracted to specialize organizations; in such cases the property manager will invariably
negotiate, agree on terms and enter into service contracts.
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Day to day maintenance:- Having established records of the property portfolio the Estate
Surveyor has to control, supervise and organize the property on a daily basis for
preservation and profitability. Day to day maintenance involves:o Repairs:- He ensures that competent Contractors are used where no in-house
maintenance unit exists. He would ensure that repairs are done with economy in
mind and that the best materials are employed. For example, if good paint is used
the job will not need to be carried out often. In multi-occupied properties service
charge will be collected to carry out such minor repair that would normally be
tenants responsibility. If a defect is observed and is not immediately tackled it
would lead to more expensive repairs or even complete collapse of the property
and heavy loss. Repairs are therefore to be carried out promptly.
o Cleaning and Gardening: Thorough daily cleaning ensures that the property is
kept in good condition and gardening enhances the aesthetics and value as well as
reducing the health risk for occupants.
o Security:- In these days where the average worker s take home pay can hardly
feed him, it is not surprising that incidence of stealing is on the increase. Major
targets include fire extinguishers, hose-reels and their nozzles, compressors,
indeed anything moveable. Even unmovable items like electrical fittings are
targets. Adequate security is therefore important and the Estate Surveyor has the
role of ensuring that he recruits suitable personnel or a good security company.
o Pest Eradication:- Apart from the nuisance and health risk aspects, pests cause
deterioration of buildings. Cockroaches eat the wood. So do rats and other insects.
Eradication therefore ensures the preservation of the building for longevity and
profit. The Estate Surveyor had the role of ensuring quarterly eradication and
rodent control.
o Regular Service of Equipment:- Where major equipment are installed,
maintenance contracts must be entered into with the Lift Company, Generator
Company, Air-conditioning Company, etc, to ensure that these are maintained
regularly and overhauled when due. A long term maintenance programme will
usually be prepared by the Estate Surveyor.
o Fire Protection:- The Estate Surveyor ensures that fire fighting equipment are
adequate. These include hydrants, hose-reels, alarms, smoke detectors,
extinguishers, etc. It is normal to have the Federal Fire Service certify the
adequacy of measures.
o Rating:- The Estate Surveyor is best placed to understand the criteria used in
valuing the premises for rates and will be quick to appreciate the need to object or
not to ensure rates, ground rents and other charges are paid promptly.
o Control of Tenants:- The Estate Surveyor makes regulations for proper use of the
premises, will attend tenants association meetings where management problems
are discussed and peculiar problems thrashed out, will enforce regulations and
ensure compliance with the provisions of the leases.
Valuation Studies:- The Estate Surveyor handles these vital aspects of Property and
Estate Management. The property has to be valued and revalued as the need arises.
Valuation could be for the purpose of sale, Company accounts, insurance, mortgage, etc.
Knowing the value of what you have, manage, control is an important aspect of
management.
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Redevelopment Opportunities:- In managing an Estate, the Surveyor is well equipped to

advise on the seizing of any opportunity to redevelop existing or part of an existing
portfolio. Examples of such redevelopment are in Ikoyi where the UAC seized the
opportunity of increasing income to redevelop its old colonial houses. Vast
redevelopment opportunities do exist in Central Lagos but perhaps the capital intensive
nature of such ventures has kept many corporate bodies back.
Change of Use:-The Estate Surveyor is always aware of the opportunities that exist in
change of user. New Market Road, Iweka Road and Old Market Road are areas in
Onitsha where change of user is common. The Estate Surveyor will of course be aware of
the legality or otherwise of such change. The new Banks are currently turning erstwhile
residential houses into banking premises in some major commercial towns in Nigeria.
Obviously, property owners, including corporate bodies are making more money by this;
they collect higher rents with many years in advance since these banks value their
security of tenure. The Estate Surveyor is ideally qualified by virtue of his training to
read the market, and advise what user is more in demand.
Refurbishment:- The Estate Surveyor can offer his professional advice to refurbish a
property instead of complete redevelopment. It is another avenue for increased income or
for beneficial occupation. It is cheaper and takes less time. Many properties have been
refurbished over the last few years to provide better quality accommodation fairly
cheaper. An example is the Kingsway building in Lagos which has changed from a
Departmental Store to an American type mall. It is obvious that the UAC makes more
money this way than selling household goods.
Sale:- The Estate Surveyor is well placed to advise on the sale of whole or part of the
property portfolio and the price to sell at. It could become necessary to sell part of a
portfolio to finance redevelopment or refurbishment of other portfolio. The Estate
Surveyor also handles the sale to completion.
Purchase:- This is another management function and includes advise on the price to pay
on the acquisition of new property ;and handling the actual transaction and seeing it to
completion.
Mortgages:- The Estate Surveyor is again very equipped to supervise this especially, in
corporate bodies like commercial and Merchant Banks, Building Societies, Mortgage
Banks, etc.
Liaising with Solicitors in Drawing up Leases and Amendments to Leases:- The Estate
Surveyor is well versed in the Law of Real Property. By his training and experience, he is
in a good position to appreciate a legal document dealing with property and will point out
to the Solicitor exactly what the client wants. Although he is not a Lawyer but by his real
property experience, he knows the pitfalls and co-operation between him and the
Solicitor. In the preparation of legal documents, the Estate Surveyor should supply details
of agreements to the Solicitors who would first of all prepare appropriate legal document
in draft form. The draft is sent to the Estate Surveyor for vetting before it is engrossed for
execution by both parties. Usually, both parties are given the opportunity to comment on
the draft prior to engrossment.
Construction:- There is great necessity for the Estate Surveyor to be involved in new
construction. He is relevant at all stages. Some of the areas of particular importance are:a. Assembling the site including ensuring there are no encumbrances, litigation, etc.
b. Project Management: By the Estate Surveyor s training, he is well equipped to manage
the construction to completion. He acts as a Project Co-ordinator.
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c. Advice on Materials and equipment:- This is an area where the experience of the Estate
Surveyor is very important. An experienced Estate Surveyor versed in property
management is in a position to advice on:
i. Lifts: The Estate Surveyor is able to decide which companies are to be patronized.
However reputable a lift is, it is the maintenance that matters. A Corporate body
does not want to import a jet-age brand of lift and install in their modern office
block only to find that the contractor is never found when he is needed, that he is
not really equipped to maintain and has no manpower. Of course, by this time, it
will be too late. Once you have installed the lift you are virtually married to the
company that installed it. So, it is important to choose a lift supplied by a capable
lift company.
ii Generators:- To a lesser degree, the same goes for generators as for lifts. But there
is greater flexibility as far as generators are concerned. There are many generator
service companies around and you can always fire one and employ another. Some
of these generator service companies can install a large generator for a corporate
body and from the onset, it would be problems galore. The Estate Surveyor with
his experience will ensure that appropriate company is selected and always
contacted when need be.
iii. Air-Conditioning: Central air-conditioning systems are used in some corporate
bodies. The Estate Surveyor, by experience, would advise which packaged split or
wall-units would stand the test of time.
iv. P.H.C.N: The Estate Surveyor will ensure that each floor is separately metered.
This saves future problems especially, where part of the space is to be leased out.
v. Maintenance Staff Offices:- This is often omitted with the result that very
expensive space is later allocated for this. The Estate Surveyor makes sure that
maintenance office spaces are provided for the Engineers, Technicians, Cleaners,
etc.
All the services stated above may or may not be required by a client/owner of the property at the
same time.
13. PRACTICAL DEMONSTRATION OF REAL PROPERTY MANAGEMENT
PROCEDURES
The following steps are taken in real property management:
The client must give instruction to the property manager. The instruction may be oral or
written. Written instruction is preferable.
The property manager must collect a signed Revocable Power of Attorney from his
client. This is an authority to act on behalf of his client.
Tenancy Agreement containing both the Landlord and the tenant obligations must be
signed by both parties.
The position of each tenant in the subject property shall be indicated in a chart for easy
identification.
Where the subject property is already occupied by tenants, their rental positions should be
noted.
The property manager shall collect from the Landlord the details of already existing
management problems.
New file should be opened for the subject property to contain the above details.
Specific account and receipt books should be opened for the property.
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The property manager should see himself as a mediator between the Landlord and the
tenants
.If the tenant defaults in paying his rent, he shall be served rent demand notice. If he fails to pay
contrary to the nature of the tenancy agreement he signed, he shall be served notice to quit. A
yearly tenant is served six months notice while a month notice is served a monthly tenant. It is
important to note that a property manager should not be partial to any of the parties (the
Landlord or the tenant). This is because each of the parties has his right, which should be
respected. After the expiration of the six months or the one month s notice to quit as the case
may be, a seven days notice to quit (owner s intention to take up possession) should be given to
the tenant. After the expiration of the seven days notice, a court summon can be instituted against
the tenant.
It is very important to hold meetings with the tenants occasionally to tackle some problems.
FORMAT FOR THE PREPARATION OF THE STATEMENT OF ACCOUNT FOR THE
LANDLORDS
Table 3.0 RENTAL POSITION AS AT 30TH NOVEMBER, 2007:
S/
NAME OF MONTHLY AMOUNT
MONTHS
MONTHS
NO.
TENANT
COVERED
IN
BY
ARREARS
RENT
OF PAID
TENANTS
BY
TENANTS
REMARKS
PAYMENT
1
John Eze
N3,000.00
N36,000.00
Nil
Jan-Dec. 07
Victor Mba
N4,000.00
N48,000.00
Nil
Jan-Dec. 07
3.
Tony Agu
N2,000.00
N22,000.00
Jan-Nov. 07
Total=
Dec. 07
N106,000.00
Total Amount collected =

N106,000.00
Less Management fee @ 10% =
N10,600.00
Amount due to the Landlord =
N95,400.00
The total amount of ninety five thousand, four hundred naira (N95,400.00) due to the Landlord is
received by me:
SIGNATURE OF THE LANDLORD: ____________________________
NAME OF THE LANDLORD: __________________________________
DATE: ______________________________________________________
NOTE: That the duplicate of the statement of account of any accounting period should be kept
properly in the property s file for reference purposes.
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14. GENERAL OVERVIEW OF CONTEMPORARY NIGERIAN ECONOMY

The petroleum-based economy of Nigeria, long hobbled by political instability, corruption and
poor macroeconomic management, is undergoing substantial economic reform under the new
civilian administration. Nigeria s former military rulers failed to diversify the economy. The
economy has overdependence on the capital-intensive oil sector, which provides 20% of GDP,
95% of foreign exchange earnings, and about 65% of government revenues. The largely
subsistence agricultural sector has not kept up with rapid population growth, and Nigeria, once a
large exporter of food, now must import food. In 2006, Nigeria successfully convinced the Paris
Club to let it buy back the bulk of its debts owed to the Paris Club for a cash payment of roughly
$12 billion (USD).
Nigeria s economy is struggling to leverage the country s vast wealth in fossil fuels in order to
displace the crushing poverty that affects about 57 percent of its population. Economists refer to
the coexistence of vast natural resources wealth and extreme personal poverty in developing
countries like Nigeria as the resource curse . Nigeria s exports of oil and natural gas at a time
of peak prices
have enabled the country to post merchandise trade and current account
surpluses in recent years. Reportedly, 80 percent of Nigeria s energy revenues flow to the
government, 16 percent cover operational costs, and the remaining 4 percent go to investors.
However, the World Bank has estimated that as a result of corruption 80 percent of energy
revenues benefit only 1 percent of the population. During 2005 Nigeria achieved a milestone
agreement with the Paris Club of lending nations to eliminate all of its bilateral external debt.
Under the agreement, the lenders will forgive most of the debt and Nigeria will pay off the
remainder with a portion of its energy revenues. Outside of the energy sector, Nigeria s economy
is highly inefficient. Moreover, human capital is underdeveloped Nigeria ranked 151 out of
177 countries in the United Nations Development Index in 2004 and non-energy-related
infrastructure is inadequate.
During 2003-7 Nigeria is attempting to implement an economic reform program called
the National Economic Empowerment Development Strategy (NEEDS). The purpose of NEEDS
is to raise the country s standard of living through a variety of reforms, including
macroeconomic stability, deregulation, liberalization, privatization, transparency and
accountability. NEEDS addresses basic deficiencies, such as the lack of freshwater for household
use and irrigation, unreliable power supplies, decaying infrastructure, impediments to private
enterprise and corruption. The government hopes that NEEDS will create 7 million new jobs,
diversify the economy, boost non-energy exports, increase industrial capacity utilization, and
improve agricultural productivity. A related initiative on the state level is the State Economic
Empowerment Development Strategy (SEEDS).
A longer-term economic development program is the United Nations (UN)-sponsored
National Millennium Goals for Nigeria. Under the program, which covers the years from 2000 to
2015, Nigeria is committed to achieve a wide range of ambitious objectives involving poverty
reduction, education, gender equality, health, the environment and international development
cooperation. In an update released in 2004, the UN found that Nigeria was making progress
toward achieving several goals but was falling short on others. Specifically, Nigeria had
advanced efforts to provide universal primary education, protect the environment and develop a
global development partnership. However, the country lagged behind on the goals of eliminating
extreme poverty and hunger, reducing child and maternal mortality and combating diseases such
as human immunodeficiency virus/acquired immune deficiency syndrome (HIV/AIDS) and
malaria.
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A prerequisite for achieving many of these worthwhile objectives is curtailing endemic

corruption, which stymies development and taints Nigeria s business environment. President
Olusegun Obasanjo s campaign against corruption, which includes the arrest of officials accused
of misdeeds and recovering stolen funds, has won praise from the World Bank. In September
2005, Nigeria, with the assistance of the World Bank, began to recover US$458 million of illicit
funds that had been deposited in Swiss banks by the late military dictator Sani Abacha, who
ruled Nigeria from 1993 to 1998. However, while broad-based progress has been slow, these
efforts have begun to become evident in international surveys of corruption. In fact, Nigeria s
ranking has consistently improved since 2001 ranking 147 out of 180 countries in Transparency
International s 2007 Corruption Perceptions Index and placed 108 out of 175 countries in the
World Bank s 2006 Ease of Doing Business Index.
15. MACRO-ECONOMIC TREND
This is a chart of trend of gross domestic product of Nigeria at market prices estimated by the
International Monetary Fund with figures in millions of Nigerian Naira.
Table 4.3
Inflation
Index
Year
Gross Domestic Product
US Dollar Exchange
(2000=100)
1980
50,849
0.78 Naira
1.30
1985
98,619
2.83 Naira
3.20
1990
286,374
8.94 Naira
8.10
1995
1,928,642
54.36 Naira
56
2000
4,676,394
102.24 Naira
100
2005
14,894,454
131.01 Naira
207
2006
18,222,800
125.50 Naira
2007
19,589,510*
118.50 Naira
For purchasing power parity comparisons, the US Dollar is exchanged at 75.75 Nigerian Naira
only. Current GDP per capita of Nigeria expanded 132% in the sixties reaching a peak growth of
283% in the seventies. But this proved unsustainable and it consequently shrank by 66% in the
eighties. In the nineties, diversification initiatives finally took effect and decadal growth was
restored to 10%.
Due to inflation, per capita GDP today remains lower than in 1960 when Nigeria declared
independence. About 57 percent of the population lives on less than US$1 per day. In 2005 the
GDP was composed of the following sectors: agriculture, 26.8 percent; industry, 48.8 percent;
and services, 24.4 percent. In 2005, Nigeria s inflation rate was estimated to be 15.6 percent.
Nigeria s goal under the National Economic Empowerment Development Strategy (NEEDS)
program is to reduce inflation to the single digits.
In 2005 Nigeria s central government had expenditures of US$13.54 billion but revenues of only
US$12.86 billion, resulting in a budget of 5 percent. Nigerian tax authorities face the challenge
of widespread tax evasion, which is motivated by complaints about corruption and the poor
quality of services.
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16. Agriculture
Nigeria ranks fifty-fifth worldwide and first in Africa in farm output. Agriculture has suffered
from years of mismanagement, inconsistent and poorly conceived government policies, and the
lack of basic infrastructure. Still, the sector accounts for over 26.8% of GDP and two-thirds of
employment. Nigeria is no longer a major exporter of cocoa, groundnuts (peanuts), rubber and
palm oil. Cocoa production, mostly from obsolete varieties and overage trees, is stagnant at
around 180,000 tons annually; 25 years ago it was 300,000 tons. An even more dramatic decline
in groundnut and palm oil production also has taken place. Once the biggest poultry producer in
Africa, corporate poultry output has also slashed from 40 million birds annually to about 18
million. Import constraints limit the availability of many agricultural and food processing inputs
for poultry and other sectors. Fisheries are poorly managed. Most critical for the country s
future, Nigeria s land tenure system does not encourage long-term investment in technology or
modern production methods and does not inspire the availability of rural credit.
Agricultural products include cassava (tapioca), corn, cocoa, millet, palm oil, peanuts, rice,
rubber, sorghum and yams. In 2003 livestock production, in order of metric tonnage, featured
eggs, milk, beef and veal, poultry and pork, respectively. In the same year, the total fishing catch
was 505.8 metric tons. Round wood removals totaled slightly less than 70 million cubic meters
and sawn wood production was estimated at 2 million cubic meters. The agricultural sector
suffers from extremely low productivity, reflecting reliance on antiquated methods. Although
overall agricultural production rose by 28 percent during the 1990s, per capita output rose by
only 8.5 percent during the same decade. Agriculture has failed to keep pace with Nigeria s rapid
population growth, so that the country, which once exported food, now relies on imports to
sustain itself.
17. Industry
Nigeria ranks 44th worldwide and third in Africa in factory output. Nigeria s proven oil reserves
are estimated to be 35 billion barrels; natural gas reserves are well over 100 trillion ft3 (2,800
km3). Nigeria is a member of the Organization of Petroleum Exporting Countries (OPEC) and in
mid-2001 its crude oil production was averaging around 2.2 million barrels (350,000 m3) per
day. The types of crude oil exported by Nigeria are Bonny Light oil, Forcados crude oil, Qua Ibo
crude oil and Brass River crude oil. Poor corporate relations with indigenous communities,
vandalism of oil infrastructure, severe ecological damage and personal security problems
throughout the Niger Delta oil-producing region continue to plague Nigeria s oil sector. Efforts
are underway to reverse these troubles. In the absence of government programs, the major
multinational oil companies have launched their own community development programs. A new
entity, the Niger Delta Development Commission (NDDC), has been created to help catalyze
economic and social development in the region. Although it has yet to launch its programs,
hopes are high that the NDDC can reverse the impoverishment of local communities. The U.S.
remains Nigeria s largest customer for crude oil, accounting for 40% of the country s total oil
exports; Nigeria provides about 10% of overall U.S oil imports and ranks as the fifth largest
source for U.S imported oil.
The United States is Nigeria s largest trading partner after the United Kingdom. Although the
trade balance overwhelmingly favours Nigeria, thanks to oil exports, a large portion of U.S.
exports to Nigeria is believed to enter the country outside of the Nigerian Government s official
statistics, due to importers seeking to avoid Nigeria s excessive tariffs. To counter smuggling
and under-invoicing by importers, in May 2001, the Nigerian Government instituted a 100%
inspection regime for all imports, and enforcement has been sustained. On the whole, Nigerian
high tariffs and non-tariff barriers are gradually being reduced, but much progress remains to be
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made. The government also has been encouraging the expansion of foreign investment, although
the country s investment climate remains daunting to all but the most determined. The stock of
U.S. investment is nearly $7 billion, mostly in the energy sector. Exxon Mobil and Chevron are
the two largest U.S corporate players in offshore oil and gas production. Significant exports of
liquefied natural gas started in late 1999 and are slated to expand as Nigeria seeks to eliminate
gas flaring by 2008.
Oil dependency, and the allure it generated of great wealth through government contracts,
spawned other economic distortions. The country s high propensity to import means roughly
80% of government expenditures is recycled into foreign exchange. Cheap consumer imports,
resulting from a chronically overvalued Naira, coupled with excessively high domestic
production costs due in part to erratic electricity and fuel supply, have pushed down industrial
capacity utilization to less than 30%. Many more Nigerian factories would have closed except
for relatively low labour costs (10%-15%). Domestic manufacturers, especially pharmaceuticals
and textiles, have lost their ability to compete in traditional regional markets; however, there are
signs that some manufacturers have begun to address their competitiveness.
Nigeria s official foreign debt is about $28.5 billion, about 75% of which is owed to Paris Club
countries. A large chunk of this debt is interest and payment arrears. In August 2000 the
International Monetary Fund (IMF) and Nigeria signed a one-year Stand-by Arrangement (SBA),
leading to a debt rescheduling agreement in December between Nigeria and its Paris Club
creditors. By August 2001, despite continued dialogue with the IMF, Nigeria had been unable to
implement many of the SBA conditions. The IMF consented to extend its SBA by a few months
and seek out revised targets and conditions for a new agreement. As of September 2001, only a
few of Nigeria s creditor governments had signed bilateral rescheduling agreements. Another
obstacle to debt restructuring involves World Bank classification. Any long-term debt relief will
require strong and sustained economic reforms over a number of years.
In the light of highly expansionary public sector fiscal policies during 2001, the government has
sought ways to head off higher inflation, leading to the implementation of stronger monetary
policies by the Central Bank of Nigeria (CBN) and underspending of budgeted amounts. As a
result of the CBN s efforts, the official exchange rate for the Naira has stabilized at about 112
Naira to the dollar. The combination of CBN s efforts to prop up the value of the Naira and
excess liquidity resulting from government spending led the currency to be discounted by around
20% on the parallel (nonofficial) market. A key condition of the Stand-by Arrangement has been
closure of the gap between the official and parallel market exchange rates. The Inter Bank
Foreign Exchange Market (IFEM) is closely tied to the official rate. Under IFEM, banks, oil
companies and the CBN can buy or sell their foreign exchange at government influenced rates.
Much of the informal economy, however, can only access foreign exchange through the parallel
market. Companies can hold domiciliary accounts in private banks and account holders have
unfettered use of the funds.
Expanded government spending also has led to upward pressure on consumer prices. Inflation
which had fallen to 0% in April 2000 reached 14.5% by the end of the year and 18.7% in August
2001. In 2000 high world oil prices resulted in government revenue of over $16 billion, about
double the 1999 level. State and local governmental bodies demand access to this windfall
revenue, creating a tug-of-war between the federal government, which seeks to control spending,
and state governments desirous of augmented budgets preventing the government from making
provision for periods of lower oil prices.
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18. SERVICES
Nigeria ranks 63rd worldwide and fifth in Africa in services output. Low power and telecom
density has crippled the growth of this sector. Since undergoing severe distress in the mid-1990s,
Nigeria s banking sector has witnessed significant growth over the last few years as new banks
enter the financial market. Harsh monetary policies implemented by the Central Bank of Nigeria
to absorb excess Naira liquidity in the economy has made life more difficult for banks, some of
who engage in currency arbitrage (round-tripping) activities that generally fall outside legal
banking mechanisms. Private sector-led economic growth remains stymied by the high cost of
doing business in Nigeria, including the need to duplicate essential infrastructure, the threat of
crime and associated need for security counter measures, the lack of effective due process and
nontransparent economic decision making, especially in government contracting. While corrupt
practices are endemic, they are generally less flagrant than during military rule, and there are
signs of improvement. Meanwhile, since 1999 the Nigerian Stock Exchange has enjoyed strong
performance, although equity as a means to foster corporate growth remains underutilized by
Nigeria s private sector.
19. TRANSPORT
Nigeria s publicly owned transportation infrastructure is a major constraint to economic
development. Principal ports are at Lagos (Apapa and Tin Can Island), PortHarcourt and
Calabar. Docking fees for freighters are among the highest in the world. Of the 80,500
kilometers (50,000 mi.) of roads, more than 15,000 kilometers (10,000 mi.) are officially paved,
but many remain in poor shape. Extensive road repairs and new construction activities are
gradually being implemented as state governments, in particular, spend their portions of
enhanced government revenue allocations. The government implementation of 100% destination
inspection of all goods entering Nigeria has resulted in long delays in clearing goods for
importers and created new sources of corruption, since the ports lack adequate facilities to carry
out the inspection. Four of Nigeria s airports Lagos, Kano, PortHarcourt and Abuja currently
receive international flights. Government-owned Nigeria Airways ceased operation in December
2002. Virgin Nigeria Airways started operations in 2005 as a replacement and serves domestic
and international routes. There are several domestic private Nigerian carriers, and air service
among Nigeria s cities is generally dependable. The maintenance culture of Nigeria s domestic
airlines is not up to U.S. standards.
20. LABOUR FORCE
In 2005 Nigeria had a labour force of 57.2 million. In 2003 the unemployment rate was 01.8
percent overall; urban unemployment of 12.3 percent exceeded rural unemployment of 7.4
percent. According to the latest available information from 1999, labour force employment by
sector was as follows: 70% agriculture, 20% in services, and 10% in industry. Labour unions
which have undergone periods of militancy and quiescence reemerged as a force in 1998 when
they regained independence from the government. Since 1999 the Nigerian Labour Congress
(NLC), a union umbrella organization, has called six general strikes to protest domestic fuel
price increases. However, in March 2005 the government introduced legislation ending the
NLC s monopoly over union organizing. In December 2005, the NLC was lobbying for an
increase in the minimum wage for federal workers. The existing minimum wage, which was
introduced six years earlier but has not been adjusted since, has been whittled away by inflation
to only US$42.80 per month.
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21. GRADUAL REFORM

The Obasanjo government supports private-sector led, market oriented economic growth and
has begun extensive economic reform efforts. Although the government s anti-corruption
campaign has so far been disappointing, progress in injecting transparency and accountability
into economic decision making is notable. The dual exchange rate mechanism formally
abolished in the 1999 budget remains in place in actuality. During 2000 the government s
privatization program has showed signs of life and real promise with successful turnover to the
private sector of state-owned banks, fuel distribution companies and cement plants. However, the
privatization process has slowed somewhat as the government confronts key parastatals such as
the state telephone company NITEL and Nigerian Airways. The successful auction of GSM
telecommunications licenses in January 2001 has encouraged investment in this vital sector.
Although the government has been stymied so far in its desire to deregulate downstream
petroleum prices, state refineries, almost paralyzed in 2000, are producing at much higher
capacities; by August 2001 gasoline lines disappeared throughout much of the country. The
government still intends to pursue deregulation despite significant internal opposition,
particularly from the Nigeria Labour Congress. To meet market demand the government incurs
large losses importing gasoline to sell at subsidized prices.
22. INVESTMENT
Although Nigeria must grapple with its decaying infrastructure and a poor regulatory
environment, the country possesses many positive attributes for carefully targeted investment
and will expand as both a regional and international market player. Profitable niche markets
outside the energy sector, like specialized telecommunication providers, have developed under
the government s reform program. There is a growing Nigerian consensus that foreign
investment is essential to realizing Nigeria s vast but squandered potential. European
investments are increasing, especially since Belgian consultancy companies such as Genco are
exploring the Nigerian market.
Companies interested in long-term investment and joint ventures, especially those that use
locally available raw materials, will find opportunities in the large national market. However, to
improve prospects for success, potential investors must educate themselves extensively on local
conditions and business practices, establish a local presence, and choose their partners carefully.
The Nigerian government is keenly aware that sustaining democratic principles, enhancing
security for life and property and rebuilding and maintaining infrastructure are necessary for the
country to attract foreign investment. The stock market capitalization of listed companies in
Nigeria was valued at $67.756 million in November 05 2007 by the Nigerian Stock Exchange.
23. FOREIGN ECONOMIC RELATIONS
Nigeria s foreign economic relations revolve around its role in supplying the world economy
with oil and natural gas, even as the country seeks to diversify its exports, harmonize tariffs in
line with a potential customs union sought by the Economic Community of West African State
(ECOWAS), and encourage inflows of foreign portfolio and direct investment. In October 2005,
Nigeria implemented the ECOWAS Common External Tariff, which reduced the number of
tariff bands. Prior to this revision, tariffs constituted Nigeria s second largest source of revenue
after oil exports. In 2005 Nigeria achieved a major breakthrough when it reached an agreement
with the Paris Club to eliminate its bilateral debt through a combination of write-downs and
buybacks. Nigeria joined the Organization of the Petroleum Exporting Countries in July 1971
and the World Trade Organization in January 1995.
Source: Economy of Nigeria Wikipedia, the free encyclopedia, 2008.
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24. CAUSES OF ECONOMIC VARIATIONS IN NIGERIA

The oil boom of the 1970s led Nigeria to neglect its strong agricultural and light manufacturing
bases in favour of an unhealthy dependence on crude oil. In 2000 oil and gas exports accounted
for more than 98% of export earnings and about 85% of Federal government revenue. New oil
wealth, the concurrent decline of other economic sectors, and a lurch toward a statist economic
model fueled massive migration to the cities and led to increasingly widespread poverty,
especially in rural areas. A collapse of basic infrastructure and social services since the early
1980s accompanied this trend. By 2000 Nigeria s per capita income had plunged to about onequarter of its mid-1970s high, below the level at independence. Along with the endemic malaise
of Nigeria s non-oil sectors, the economy continues to witness massive growth of informal
sector economic activities, estimated by some to be as high as 75% of the total economy
(Economy of Nigeria Wikipedia, the free encyclopedia, 2008). We can observe that the major
cause of economic variations in Nigeria is over-dependence on petroleum and its allied products.
Inadequate planning of various government recovery policies worsened the situation in the
market. The government had applied policies such as Austerity Measures, Economic Emergency
Programme, Structural Adjustment Programme, Deregulation, Privatization and
Commercialization, Monetization, etc. These policies have adverse effects on per capita income
of the people. There is no co-ordination in pricing system. The prices of goods and services
increase discriminately. Any person who is in constant touch with the market will testify that the
supposedly commonest food items like Garri, Yam and Rice have for a protracted period
maintained a very high price tag beyond the reach of an average Nigerian. Unfortunately, prices
of such related common goods continue to skyrocket in months if not in days.
Scarcity of petroleum products are no longer a visiting omen, but has assumed a back-seat in our
National archive, resulting to incessant and unchecked hike in transport fares and other related
hazard. This situation becomes more disheartening when one calls back to mind the fact that
such is happening in a country that supplies petroleum products to her neighbouring countries
and continents.
The deregulation of interest rate made borrowing for investment purposes very costly. Central
Bank s directives to the Commercial Banks to limit the amount of credit facilities have in a
sense, put the construction industry on a tighter rope. Banks now increase their lending rate at
random thereby making borrowing difficult for investors.
Incessant political, social and religious instability disrupt Nigeria economy. These crises include:
religious disturbances in the North, Nigeria civil war, conflict in Niger-Delta, etc. Problems in
the global economy sometimes cause economic changes in Nigeria. The current increase in the
prices of some of the global commodities such as oil and rice has resulted to sharp increase in
prices of goods and services in Nigeria.
Corruption and embezzlement of public funds by our leaders at all levels of government are
contributing to our economic disorder. Funds meant to develop all the sectors of the economy
always end up in private pockets.
25. PECULIARITIES OF PROPERTY MANAGEMENT IN THE STUDY AREA
Onitsha, the commercial nerve center of Eastern Nigeria has the single largest market in the West
African sub-region. Its population is largely traders and the main economic activity of the city is
buying and selling. From the researcher s investigation, the following peculiarities were noticed:
i. Monolithic Occupation
Over 80% of Onitsha tenants are traders and as such any government policy that affects buying
and selling (such as the recent banning on some imported items) will grossly affect rent payment.
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There are increases in void period for commercial properties, high rate of rent default and
litigations.
ii. Low Rental Income
Onitsha properties are characterized with low rental income. In the last three years, a three
bedroom flat on the average was let at N96,000.00 per annum; thus creating a paradoxical
impression in the face of increasing demand for residential accommodation.
iii. High Proliferation of Property Management Quacks
Due to the fact that over 50% of Onitsha landlords and tenants are unenlightened traders, they
are therefore, ignorant of the dangers of untrained Property Managers. They see property
management as rent collection only; forceful ejection of defaulting tenants, etc.
iv. Few Activities of Government in Onitsha
Onitsha is one of the major cities in the East with few activities of either State or Federal
government. This factor contributes to low income from hotel accommodation and prime
properties especially in Onitsha G.R.A.
v. Absence of Night Life and Bad Road Network
These problems affect routine inspection and rent drive. People always want to be at home
before 7 p.m because of criminal activities in the city. Rent defaulters who are usually seen in the
evening hours are not properly followed up. Bad road networks also affect rent drive activities.
vi. Poor Maintenance Culture
Most of the properties in Onitsha are not properly maintained due to majority of landlords are
unenlightened on the need for them to maintain their properties in order to command the current
rent passing in the neighbourhood where the property situates. This results to discriminate
increase in rent.
26. A CRITICAL ANALYSIS OF THE EFFECTS OF ECONOMIC VARIATIONS ON
REAL PROPERTY MANAGEMENT IN THE STUDY AREA
Nigeria s economy is so bad that every administration that comes up has its own programmes
and policies to revamp the economy. These programmes and policies lead to variations in the
general economy or to some sectors of the economy.
The government effort to revive the economy by banning the importation of some essential
goods without long notice had adverse effect on traders who form over 80% of the tenants in
Onitsha. The problem had resulted in high rate of rent default in properties
occupied by
the affected traders.
Rent revision during unstable economic period is always difficult. The Estate Surveyors make
more frequent rent surveys to assist in negotiating new rents with existing or new tenants. They
also make steady checks for inflation where long leases are granted by inserting suitable rent
review clauses in the lease agreement.
During these periods, tenants complain of low sales, non-payment of salaries/wages; company
workers, especially, building construction companies, complain of lack of funds as their
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principals have failed to pay up. There is always delay in the rent payment of such tenants. This
problem of non-payment of rent on time complicates real property management practice.
A variable economy makes budgeting a difficult task for Estate Surveyors. A management
surveyor cannot provide adequate maintenance services for all the properties without running
into the problem of under-estimating the cost of the maintenance works because of the steady
rise in the cost of materials.
It is true that properties do appreciate in value but in a variable economy, properties, especially,
if they remain unoccupied and ill-managed for a long duration, may depreciate quickly in value.
Some sites for big projects may not be put to their highest and best use due to lack of fund to
finance them. High interest rate prevalent during unstable economic period may force a
developer who cannot realize enough fund to construct a single floor shops on a good site for a
high rise shopping complex thus, rejecting a vital advice from the Estate Surveyor.
There is problem of unrealistic forecasting during this period. Forecasting is essentially a future
projection of events based on the analysis of collected and collated information. It involves
delving into the past, examining the present and projecting the future (Ogbuefi 2002, p.58).
Forecasting is also a statement, quantitative or non-quantitative in nature, concerning possible
state of events in the future. The statement itself derives from the application of certain
techniques on a set of given data relevant to the event subject to forecasting. The data may be
empirical or hypothetical. One of the greatest problems facing the cost-benefit techniques and
indeed all viability appraisal technique is the forecasting of future costs and benefits. There are
problems as to the types, forms or elements of costs and benefits which will likely flow from a
project, scheme or decision. But the most difficult aspect of forecasting here concerns the
magnitude and distribution of costs and benefits over time or during the life of a project or
scheme (Umeh 1977, p.97). Forecasting is a very important tool to probe the past, present and
future events; but where the economy is unstable there would be errors.
Other problems faced by property managers in the study area are: high rate of rent default,
stagnant rent, slow growth rate of rents, outright default of rent, a greater incidence of bad debts,
delayed maintenance, etc.
27. SUGGESTED MEASURES FOR BETTER PERFORMANCE
Adequate security measures should be taken by the government to check the activities of
criminals in Onitsha. This shall enhance the operation of property managers during evening
hours which is the
right time to get the traders at home for routine inspection, rent payment
drive for defaulters, distribution of notices, etc. Property managers in Onitsha should also
make proper use of morning hours, say, by 6.30 am they should be out to visit their tenants.
The problems of monolithic occupation and low rental income can be solved by creation of
enough federal and state government presence in Onitsha. Such presence include: establishment
of Seaport,
International Airport, Industries, Higher Institutions, etc.
The researcher also suggest that property managers in Onitsha should assist in educating the
property owners on the need to maintain their properties. A well maintained property attracts
responsible tenants. A
property manager faces the risk of losing his first class tenants who
pay their rent as and when due if his property portfolio is not well maintained.
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28. SUMMARY
The Central problem of our present national economic state is that oil and gas exploration and
extraction continues to remain, after a quarter of a century of intensive, highly profitable
experience, not a true sector of the Nigerian domestic economy but essentially an enclave
activity within the territorial (geographical) bounds of Nigeria, an enclave but true sector of the
industrial centers of the international economy (furnishing them with raw materials oil for now
and later also, if they wish, gas and investment profits for industrial growth), with no real link
with the Nigerian domestic economy. Deprived of any real stabilizing links with the oil enclave,
the economy is exposed to the full dynamics of the destabilizing effects of the investment in the
enclave as well as to the vagaries of the international oil cycle. This central problem is deep and
severe in its manifestations, adversely affecting every sector of the Nigerian economy, every
aspect of the society including behaviour patterns (Okongwu 1986, p.429).The chapter stated
discoveries made in the study and some recommendations are given to revamp our dwindling
economy. The implementation of these recommendations shall ease real property management
practice in Nigeria.
29. FINDINGS
Some findings made by the researcher are as follows:
Nigerian economy depends more on oil for the bulk of its export than on any other product.
Agriculture and other sectors are neglected. This was the origin of our economic problems.
The importation of fuel and other petroleum products which their raw materials are got in
Nigeria is not in the best interest of the Nigerian economy.
Policy discontinuities arising from administrative changes has been contributing to economic
variations in Nigeria.
Corruption and malpractice in the electoral process are dangerous canker to our economic
development. Money and time spent on election tribunals and repetition of elections could have
been used to develop other sectors of the economy.
Mismanagement of our resources by our leaders, ethnic and political crises are seriously
contributing to complicating our economic problems.
There are features of economic variations in Nigerian economy.
The real property market has a direct relationship with the general business economy. A change
in one sector affects the other.
Economic variations in Nigerian economy negatively affect the Real Property Management
practice.
Foreign investors are yet to have enough confidence in our economy and security network.
Inadequate planning of various government recovery policies worsened the situation in the
market. These policies had adverse effects on per capita income of the people.
There was no co-ordination in pricing system, therefore, the prices of goods and services
increased discriminately.
The deregulation of interest rate made borrowing for investment purposes very costly.
Sometimes, problems in the global economy caused economic changes in Nigeria.
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The study identified some effects of economic variations on Real Property Management as under
estimation of maintenance costs, tedious rent revisions, higher incidence of rent defaults,
stagnant rents, outright default of rent, delayed maintenance, unrealistic forecasting, etc.
30. RECOMMENDATIONS
In order to ensure that the above raised issues are tackled, the following recommendations are
hereby proffered:
More attention should be given to the agricultural and other sectors of the economy. The money
budgeted every year for Agriculture and enhancement of other sectors such as tourism,
technology, etc, should be increased proportionately. This measure will make our Agricultural
sector to be more productive which shall drastically reduce excessive expenditure on the
importation of food every year.
Without political, ethnic and religious stability, there would be no economic development. The
government should come up with measures to check incessant political, ethnic and religious
crises which scare foreign investors.
The principles of checks and balances should be fully implemented among the three arms of
government to check the problem of mismanagement of public funds by those in leadership
positions.
The government should make our refineries functional and individuals should be allowed to
build private refineries. This measure shall stop the importation of fuel and other petroleum
products. The local prices of these products shall be reduced and our foreign reserve shall further
be increased proportionally.
An unmaintained property portfolio causes management problems for the Property Manager.
Nigerian Institution of Estate Surveyors and Valuers should be engaged on massive
enlightenment programmes to educate property owners on the need to make provisions for
maintenance services. The Institution should also sponsor a bill restricting the operation of
quacks because most of the property owners in the study area cannot differentiate a professional
Property Manager from a quack.
Any government policy affecting buying and selling should be handled carefully. Adequate
notice should be given to enable the affected traders to change line of business. Management
problems created by non-payment of rent by traders which form over 80% of tenants in the study
area can be curtailed.
The government should take necessary measures to industrialize the nation to reduce mass
unemployment which has now reached alarming proportions and involves all categories of
labour
skilled and unskilled persons, university graduates and specialist individuals.
Unemployment in the context includes also the disguised unemployment of the armies of street
hawkers now so evident in our urban areas. It represents a distinct waste of human resources
embodied in the individuals and their productivity potentials which the public policy cannot
tolerate. Moreover, it promotes social instability which has a negative effect on our economy.
The get-rich-quick attitude of some various financial institutions and individuals should be
checked by the government.
Advancing the technological development of the nation is very necessary. This will go a long
way in improving the quantity and quality of the nation s total output.
31. CONCLUSION
The management roles of Estate Surveyors and Valuers sum up to issuing counsels during
development stages to curtail unnecessary future management procedures coupled with
assisting in management,
maintenance and repairing functions; after leasing, to carryout
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routine inspection of the property to ensure its long life together with maximization of returns
forthwith. An Estate Surveyor cannot take the risk of managing a building which its income is
less than its cost of maintenance. Generally speaking, the period of economic variations is very
risk to real estate development and management. An effective method for risk reduction is for the
developer to avail himself of the services of the Estate Surveyor and Valuer. The decision to
develop should be based on the discovery of an investment opportunity which is confirmed as
feasible and viable by a professionally executed study.
Subsequently, the construction phase should be managed to ensure that the project is built to
specification, within budget and on schedule. This important role of the Estate Surveyor shall
save the nation from the cases of current reoccurring building failures. If the property is to be
sold, the objective of the sales agent will also be derived from the feasibility report in order to
achieve targeted sales prices for projected number of units, and on schedule. Also, if the project
is to be let at the letting stage and if the market study has been properly done, the projected
occupancy levels must be realized
at anticipated rentals on projected lease terms.
At the management stage, the objective of management will also be derived from the feasibility
report. This will help to provide the level of property services within budgeted operating cost,
keep tenants, realize expected net income, meet debt service obligations and pay equity interests.
It is most unfortunate that the crucial need for the professional Estate Surveyor to maintain
properties of various kinds has not been fully appreciated by most people. It is generally
observed that our development projects, particularly, government ones, cost much more than
they are worth and I believe that one of the reasons for this is the absence of relevant
professional advice on the relationship of the cost of these projects to their values. This is the
kind of advice which the Estate Surveyors and Valuers are best place to give. Government at
times, put up residential properties that eventually cost at least double the capital that would have
been utilized if appropriate advice had been got from qualified Estate Surveyors. To make it
worse, when these buildings are finally put up, they are left to deteriorate due to lack of
adequate management, maintenance and repair services. Such
properties rapidly attain a
high level of obsolescence.
By the nature of his profession, an Estate Surveyor and Valuer is closer to evelopers/investors
and financial institutions than any other professional and he should, therefore, use this advantage
to the interest of the society.
The expertise knowledge in the management of real properties possessed by the qualified Estate
Surveyors and Valuers at this time of economic variation enable them to achieve a high level of
management and maintenance quality in properties under their care, thereby achieving least costs
and maximum returns. If they are sought for advice as to how to construct buildings with
minimum costs using adequate building and construction materials, the burden of putting up new
buildings will be lesser while people also enjoy good structural and sanitary environment.
During times of economic changes, a real estate manager operates in a risky business
environment. This environment is risky precisely because of the greater market and economic
uncertainty which characterizes it, the higher cost of developing and operating developed
building and the greater requirement for professional management of the development process.
In order to reduce development and management risks in variable economic conditions, the only
viable option open to the prudent real estate developer/owner is to entrust his affairs at inception
stage to the Estate Surveyors and Valuer. This is so because the most potent instrument for risk
reduction is the carefully executed feasibility and viability report, comprising the market
and
economic study of the project idea and an analysis of its investment potential.
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In addition, the feasibility and viability report incorporating the Quantity Surveyor s cost
estimates, is the only authentic working document which serves as reference material for all
participants in the development process: the architect, the building contractor, the letting agent,
the property manager, the quantity surveyor, the lender, the equity investors and the developer.
This research work has dealt with the physical, institutional and economic frameworks within
real estate development in the study area takes place. This would help both the real estate
developer and manager to know the features of the environment where they are operating.
Property managers who can analyse the real estate market and recognize trends will be prepared
for economic fluctuations and crises. By anticipating changes in the market and adjusting rentals
and other factors within their control, property managers can minimize the
effect
of
contraction in the real estate cycle and keep their vacancy rates as low as possible. They should
use their knowledge and judgement concerning market conditions when setting rental structures,
allocating money for operating costs, renovating properties and making other financial plans.
General knowledge of the market should be integrated with information about the market in the
area where the Estate surveyor is operating.
Having identified the economic constraints of the country and some recommendations made
accordingly, the researcher believes that their implementation will ensure a brighter real property
market for Estate Surveyors and Valuers.
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References
Adebiyi, C.O. (1986). The Property Manager in Private Practice. A Paper presented at a
Workshop, organized by the Nigerian Institution of Estate Surveyors and Valuers, Lagos,
Nigeria.
Adu, D.B. (2004). Comprehensive Mathematics for Senior Secondary Schools. Lagos, Nigeria:
A. Johnsons Publishers Limited.
Akagha, S.U. (1981). Property Management in Practice. The Estate Surveyors and Valuers,
Vol. 5, No. 1, July Edition, Lagos, Nigeria.
Dasso and Ring, (1979). Real Estate Principles and Practice. New Jersey: Prentice Hall, Inc.
Economy
of
Nigeria.
Retrieved
July
1,
2008,
from
http://wikipedia.cas.ilstu.edu/index.php/Economy of Nigeria.
Hornby, A.S. (1991). Oxford Advanced Learner s Dictionary. Oxford, Great Britain: Oxford
University Press.
Iloabuchi, K.E.O. (2000). Principles of Property Management. Lecture Notes at the Department
of Estate Management, University of Nigeria, Enugu Campus, Nigeria
Kyle, K. (1983). Property Management. U.S.A: Real Estate Education Company.
Nwachukwu, C.C (2004) An Analysis of the impact of Urban Growth on Real Estate
Development in some Nigeria Cities: A Case of Commercial and Residential Properties ,
African Journal of Applied and Theoretical Economics (AJATE), Volume 8 No.1
Nwafor, F.I. (2002). The Impact of Environmental (Noise) Pollution On Real Property Values:
A Case Study of Onitsha Metropolis. Unpublished B.Sc Dissertation, Department of
Estate Management, University of Nigeria, Enugu Campus.
Nwankwo, P.C. (1991). Property Management and Maintenance to Elongate Lives of
Properties and Ensure Increasing Returns on Real Estate Investment. A paper presented
at a seminar organized by the Nigeria Institution of Estate Surveyors and Valuers, Lagos
State Branch, Nigeria.
Ogbuefi, J.U. (2002). Aspects of Feasibility and Viability Studies. Enugu, Nigeria: Institute for
Development Studies, University of Nigeria, Enugu Campus.
Okongwu, C.S.P. (1986). The Nigerian Economy: Anatomy of a traumatized economy
with some proposals for stabilization. Enugu, Nigeria: Fourth Dimension Publishing
Company Limited.
Osisogu, U.A. (2000). Pre-Degree University Mathematics. Abakaliki, Nigeria: University Press
Limited.
Osime, S.O. (1989). Property Management, The Legal Angle. The Estate Surveyors and
Valuers, Vol. 13, No. 1, January Edition, Lagos, Nigeria.
Ratcliff, J. (1961). Real Estate Analysis. New York: Mc Graw Hill Book Company.
Sangosanya, A.G. (1983). The Economics of Property Management. The Estate Surveyors and
Valuers, Vol. 7, No. 1, July Edition, Lagos, Nigeria
Thorncroft, M. (1976). Principles of Estate Management. London: The Estate Gazette Limited.
Umeh, J.A. (1977). Feasibility and Viability Appraisal. Ibadan, Nigeria: Onibonoje Publishers.
208
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A Study to Investigate Emotional Intelligence of Male and
Female Students at University Level in Pakistani Context
VOL 2, N O 10
Listed in ULRICH S
Sadaf Tariq
Ph.D Scholar, Foundation University Islamabad, Pakistan.
Muhammad Iqbal Majoka
Assistant Professor, Department of Education, Hazara University Mansehra, Pakistan.
Shafqat Hussain
Ph.D Scholar, Foundation University Islamabad, Pakistan.
Department of Education, Hazara University Mansehra
The work presented in the manuscipt is a result of original research conducted by Department of
Education Hazara University Mansehra Pakistan in collaboration with Department of Education,
Foundation University, Islamabad, Pakistan. This research was not supported by any
organization.
Abstract
The study was conducted to investigate emotional intelligence of university students, as
perceived by them. The objectives of the study were to explore self-perception of students on
different aspects of emotional intelligence, to compare male and female students on these
aspects, and find association between perceived emotional intelligence and academic
achievement. A sample of 300 university students (150 male and 150 female) was selected
randomly from six public sector universities located in Rawalpindi and Islamabad. Self-rating
scale was used as the research instrument for measuring the perceived emotional intelligence of
sample students. The academic achievements (CGPA) of sample students in fall semester 2008
were collected from their institutions. Data analysis revealed that university students considered
themselves to be fairly aware of their emotional self-awareness, as slightly intelligent in
managing emotions, as fairly intelligent in reading emotions and as moderately intelligent in
handling emotions. Emotional intelligence as perceived by students had no connection with their
academic achievement.
Keywords: Emotional intelligence, self-perception, emotional self-awareness, managing
emotions, handling emotions, reading emotions, male and female university students, academic
achievement.
1. Introduction
Emotional intelligence plays a very vital role in individual s success at different domains
in various fields of life. On the bases of latest developments in cognitive and social psychology,
IQ alone is no more considered as the only measure for success; emotional intelligence, social
intelligence, and luck also play an essential role in a person's success in life.
Historically, the idea of emotional intelligence is not very old. According to Sparrow and Knight
(2006), it was the starting point when Edward Thorndike first talked of a Social intelligence in
1920.Then there were series of developmental steps to understand various forms of human
intelligence. Idea of IQ by David Wechsler In 1940, a paper on emotional intelligence and
emancipation by Leunen published in 1966, first article on Emotional Literacy by Claude Steiner
published in1974, first work on Multiple Intelligences by Howard Gardner was published
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in1983, use of the phrase emotional intelligence in an unpublished thesis by Wayne Payne
in1986 , and announcement of emotional Intelligence theory by Peter Salovey & Jack Mayer
in1990 were the gradual steps in this regard. However, the term entered the mainstream only
with Daniel Goleman, who published the first of his emotional intelligence books in1995.
Goleman (1995) argues that IQ contributes only about 20% to success in life, and other forces
contribute the rest. He also says that emotional intelligence can be as powerful as IQ and
sometimes even more. Unlike what is claimed about IQ, we can teach and improve students in
some crucial emotional competencies.
Goleman (1995) describe emotional intelligence as a different type of knowledge. It is the
ability to motivate oneself and persist in the face of frustrations; to control impulse and delay
gratifications; to regulate one's moods and to empathize with and relate with others. Emotional
intelligence is a different way of being smart; it includes knowing what your feelings are and
using your feelings to make good decisions in life. It is being able to manage distressing moods
well and control impulses. It is being motivated and remaining hopeful and optimistic, when you
have setbacks in working towards goals. It is empathy; knowing what the people around you are
feeling and it is getting along well with other people, managing emotions in relationships, and
being able to persuade or lead others.
Many authors view emotional intelligence as encompassing personality characteristics
and both social and emotional skills ( Boyatzis, 2006; Petrides & Furham, 2000, 2001). Zeidner,
Matthews, and Roberts (2009) define emotional intelligence as a generic competence in
perceiving emotions (both in oneself and in others), in regulating emotions, and in coping
effectively with emotive situations. They add that emotional intelligence has roots in social,
practical, interpersonal, and intrapersonal intelligences. It is also closely linked to positive
psychology movement, which has placed increasing emphasis on the importance of happiness
and well-being.
EQ is a measure of emotional intelligence, or ability to use both emotions and cognitive
skills in one s life. Emotional intelligence competencies include, among others, empathy,
intuition, creativity, flexibility, resilience, coping stress, leadership, integrity, authenticity,
intrapersonal skills and interpersonal skills. IQ is a number used to express the apparent relative
intelligence of a person. It is the measure of cognitive abilities, such as the ability to learn or
understand or to deal with new situations; the skilled use of reason; the ability to apply
knowledge to manipulate one's environment or to think abstractly as measured by such objective
criteria as intelligence tests. EQ implies using emotions as well as cognitive abilities to function
more effectively but IQ relies solely on individual cognitive skills (Susan, 2004).
Lynn (2000) points out that emotional intelligence encompasses many competencies that drive
our internal world as well as our response to external world. According to Neale, Spencer-Arnell
and Wilson (2009), developed emotional intelligence leads to improved relationships, improved
communication with others, better empathy skills, acting with integrity, respect from others,
improved career prospects, managing change more confidently, fewer power games at work,
feeling confident and positive, reduced stress levels, increased creativity and learning from
mistakes.
Emotional intelligence has been the focus of research in various fields ranging from
management science to classroom teaching. According to Goleman (1996), emotionally
intelligent students manage their impulses and tend to find rational solutions to problems.
Consequently this ability leads to lifelong success. On the other hand, its lack tends to escort to
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emotional, academic, social and behavioural difficulties. Nelson and Low (2003) argue that
emotional intelligence (EI) being set of learned abilities results in wise behaviour, high
achievement, and mental health. Therefore emotionally intelligent students are skilled in
interpersonal communication, self-management, goal achievement, and demonstrate personal
responsibility in completing assignments and working effectively.
There is ample theory and research that advocates the impact of cognitive abilities and
personality on academic achievement. However, these factors predict academic success limited
to 30 percent of variability in academic grades at the most. Seventy per cent of the variance
remains to be explained. In recent past, a number of studies have been conducted that are
focused on the impact of adolescent emotional intelligence on academic success. These
studies have had mixed results, possibly due to differences in the theories, for example,
Goleman (1995), Gardner (1983), Mayer and Salovey (1990), all imply the need to address the
development of emotional intelligence of students in the classroom. Though emotional skills
begin in the home with good parent-child interactions, but sometimes parents are unable to
provide this for their children due to their own poor emotional states (Mayer & Salovey, 1997).
Therefore, it remains on the part educational institutions to foster students needs in this regard.
The students due to the increasing societal problems need support for being emotionally
intelligent. On the other hand, teachers are facing the challenges of interpreting curriculum,
producing student's achievement on standardized tests and managing a class full of students with
different academic and emotional needs. To get these students to their next academic level, we
must meet them where they are and give them skills and resources to cope with stressors so they
will then be better able to attend to academics. (De Falco, 1997). Because emotional learning
contributes to social and academic adjustment (Greenberg, Kusch, Cook, & Quamma, 1995;
Salami, 2010), therefore Oatley (2004) says that teachers must perform the Herculean task of
imparting knowledge, yet keeping all students safe and happy even though their home life might
be very different. Academics and emotional literacy must go hand in hand.
Associations between EI ability and both social and academic success have been
summarized in a number of recent book chapters and review articles (e.g. Brackett & Salovey,
2006; Mayer, Salovey, & Caruso, 2004). Many studies have been conducted in different cultures
to see the relationship between students emotional intelligence and their academic achievement.
Similarly there are few studies to investigate the gender difference in emotional intelligence. For
example Newsome, Day, and Catano (2000) investigated the relationship of emotional
intelligence, cognitive ability, and personality with academic achievement. They found that none
of the EQ-i factor scores, nor the total EQ-i score, was significantly related to academic
achievement.
A study by O Connor and Little (2003) assessed the relationship between emotional intelligence
and academic achievement, as measured by grade point average, in college students, using both
self report and ability-based measures of emotional intelligence. The results showed that
emotional intelligence was not a strong predictor of academic achievement regardless of the type
of instrument used to measure it.
The studies conducted in Pakistan are very few, for example, the studies by Zafar (2005)
and Ashraf (2004) show that male and female students are equally intelligent and that there is no
relationship between emotional intelligence and academic achievement. As emotional
intelligence can be learned and taught, this factor may vary from culture to culture and society to
society. Moreover, university is the level where the learners may have cumulated all emotional
skills and are prepared to enter in practical life, thus it was considered very important to find for
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university students in Pakistani culture, what is the perception of university students about their
level of emotional intelligence? Are there gender differences in EQ? And do the results of EQ,
like IQ, contribute to academic success? In order to find the answers of these questions, a study
was conducted to investigate emotional Intelligence of Male and Female Students at University
Level in Pakistani Context. The main objectives of the study were: a) to investigate, perception
of emotional intelligence of male and female students about their emotional self awareness,
managing emotions, handling emotions and reading emotions; b) to compare male and female
students on emotional intelligence as perceived by them; and c) to find out relationship between
each aspect of emotional intelligence with academic achievement.
2.RESEARCH METHODOLOGY
The main focus of this study was to investigate emotional intelligence of university
students. This was a survey type descriptive research. The population of this study was
comprised of all students of the public sector universities located in twin cities of Rawalpindi
and Islamabad. In Rawalpindi, there were two public sector universities, namely Fatima Jinnah
Women University and Pir Mehr Ali Shah Arid Agriculture University Rawalpindi. In
Islamabad, four public sector universities, namely Quaid-e-Azam University, National
University of Modern Languages, Federal Urdu University of Arts, Science and Technology and
International Islamic University were selected. As the study was delimited to the students of
master degree programs, the size of the population was 7900.
A sample of 300 students out of the above population of 7900 was selected using
stratified random sampling technique. Twenty five (25) female students from Fatima Jinnah
Women University and 55 students i.e. 30 male and 25female from each of the remaining four
universities were selected using random sampling technique. In this way, 150 male and 150
female university students constituted the sample of study. In order to measure the emotional
intelligence of students, a 17-item self-assessment scale developed by Santrock (2001) was
modified under the guidance of experts committee. The questionnaire was administered for pilot
testing to the selected 20 students not included in sample. This scale was based on five point
rating scale with options strongly agree , agree , undecided , disagree , and strongly
disagree related to four aspects of emotional intelligence, namely, emotional self awareness,
managing emotions , reading emotions , and handling relationships. According to Santrock
(2001), if the scores are 75-85 out of 100, the students probably are fairly emotionally intelligent.
If the scores are 65-74, they probably are moderately emotional intelligent. If the scores are 4564, they likely have average emotional intelligence and if the scores are less than 45, students
likely have below average emotional intelligence.
The researchers personally visited the public sector universities in Rawalpindi and
Islamabad and administered this selfassessment scale to the sample students. The academic
score (CGPA) in fall semester 2008 for each student included in the sample was collected from
his/her parent institution. Data was collected with 100 percent return rate due to high
cooperation from teachers and students.
For analyzing the data, the responses on each item of the questionnaire were scored by
assigning 5 marks to strongly agree , 4 marks to agree , 3 marks to undecided , 2 marks to
disagree and 1 mark to strongly disagree response. On the basis of mean rating scores and
range of scores, students were categorized as highly emotionally intelligent, fairly emotionally
intelligent, moderately emotionally intelligent, and average emotional intelligent using criteria by
Santrock (2001). For comparing male and female students on different aspects of emotional
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intelligence, t-test was applied. To see the correlation between students ability in specific
aspects of emotional intelligence and students academic achievement, correlation coefficient
between perceived emotional ability scores and academic achievement of students were
calculated. This relation was interpreted according to Garrett and Woodworth (2006). If the
value of r was equal to 4PEr, it was interpreted as existence of some (but very low) relation. If it
was five or six times of PEr it was interpreted as existence of low relationship. If the value of r
was greater, it was interpreted (as greater) accordingly.
3. RESULTS
The data collected through the research instrument was tabulated, analyzed and interpreted in the
light of the objectives of the study. For categorizing the students in different levels of emotional
intelligence, the mean rating score of the students was calculated in different aspects by taking
the lower limit of the population mean and by dividing it by the number of questionnaire items
included in the specific aspect of emotional intelligence.
Table 1: Estimation of mean population scores on four aspects of emotional
Intelligence
_____________________________________________________________________
Abilities
N
M
SD
SE
Mean population
Mean rating
in emotional
rating
intelligence
Emotional
self-awareness
300
12.42
0.72
0.03
12.36 to 12.47
4.27
Managing
300
21.36
1.78
0.06
21.24 to 21.47
2.45 emotions
Reading
emotions
300
12.55
0.73
0.03
12.52 to 12.58
4.07
Handling
emotions
300
20.37
0.24
0,02
20.35 to 20.39
2.58
Table 1 shows that on the basis lower limit of the mean population range, the minimum
average perception scores of students on emotional self-awareness, the ability to manage
emotions, the ability to read emotions, and the ability to handle the emotions were 12.36 out of
the maximum score of 15, 21.36 out of the maximum score of 30, 12.55 out of the maximum
score of 15, and 20.35 out of the maximum score of 25 respectively. The mean rating for these
factors was found to be 4.27 out of 5, 2.45 out of 5, 4.07 out of 5, and2.58 out of 5 respectively.
Hence these results make it clear that the students are justified to consider themselves to be
highly intelligent in the ability of emotional self-awareness, average intelligent in the ability of
managing their emotions, fairly intelligent in the ability of reading their emotions, and
moderately intelligent in the ability of handling emotions.
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Table 2: Difference between mean perception scores in emotional intelligence of male and
female students.
____________________________________________________________________
Abilities in
Gender M
SD
SEmean
t- value
diff
emotional
of
intelligence
students
SelfFemale
12.27 1.00
0.08
awareness
0.11
2.63
12.56 1.04
0.08
Managing
Emotion
Reading
Emotions
Handling
Emotions
Female
19.99
0.43
0.03
Male
22.73
1.88
0.15
Female
12.47
1.03
0.08
Male
12.63
1.04
0.08
Female
20.36
1.68
0.03
Male
20.38 1.68
Df= 298
0.03
*P>0.05
0.99* Male
0.15
0.6
0.52*
0.11
1.45
0.93*
0.45
0.5
0.51*
t-value at 0.05 level=3.841
Table 2 indicates the difference between the mean perception scores of male and female
on the ability of emotional self-awareness, the ability of managing their emotions, the ability of
reading their emotions, and the ability of handling emotions was non-significant (P>0.05). Thus
male and female students were at same level of intelligence in emotional self-awareness,
managing their emotions, reading their emotions, and handling emotions. However, the mean
scores for male students in these abilities were a little bit greater than that for female students.
Table 3: Correlation between emotional abilities scores and academic achievement scores of students
Factors of relationship
r
PEr
p
Ability of emotional selfawareness and academic
achievement scores
0.05
0.03
n.s
Ability to manage emotion

and academic achievement
Scores
0.03
0.04
n.s
Ability to read emotion

Scores
0.08
0.04
n.s
Ability to handle emotions

Scores
0.05
0.02
n.s
n.s= not significant
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Table 3 shows that the correlation coefficients between perceived ability of emotional selfawareness and academic achievement, perceived ability to manage emotions and academic
achievement, perceived ability to read emotions and academic achievement, and ability to handle
emotions and academic achievement of university students were 0.03, 0.04, 0.01 and 0.02
respectively. Since the values of correlation are much less than 4 PEr in the case of all the four
factors, there existed no relationship for these abilities and academic achievement.
4.DISCUSSION
The results of study revealed that the perception of students on their emotional
intelligence was found satisfactory except managing emotions. They reported to have the ability
to perceive emotions accurately and generate emotions so as to assist thought, to understand their
emotions and emotional knowledge and to reflectively regulate emotions so as to promote
emotional and intellectual growth.
Another result of the study indicated that all the students (both male and female)
perceived themselves to be unsuccessful in managing and handling their emotions because they
did not have the capacity to handle emotion related feelings, understand the information of those
emotions and manage them. This result can be explained in the views of Mayer and Salovey
(2000), that emotions convey information. Happiness, anger and fear are the categories in
handling emotions. Happiness usually indicates a desire to join with other people; anger indicates
a desire to attach or harm others. Each of them conveys its own pattern of possible messages and
actions. Full understanding of emotions involves the comprehension of the meaning of emotions,
coupled with the capacity to reason about those meanings. It is central to the group of
emotionally intelligent students. Perhaps the students under study were not properly trained in
emotional intelligence skills.
Comparison between male and female students revealed that there was no significant
difference between self perception of male and female students on emotional intelligence. These
findings are in line with the results of studies by Zafar (2005) and Ashraf (2004).
Furthermore, the study showed that no significant correlation was found between self
perception mean scores in different emotional intelligence skills and academic achievement
scores of university students. These findings are also in line with the results of studies by Zafar
(2005) and Ashraf (2004). This may be due to the fact that all the three studies have been
conducted in the same culture. However, these results are not consistent with many other studies
that appear in literature. Besides the socio-cultural differences, research tools and sample size
may be the root cause for these inconsistencies. There further studies may be conducted by using
test rather than self rating scale on larger population and sample.
5.CONCLUSIONS
On the basis of the analysis of data, following conclusions were drawn:i.
The university students considered themselves to be very good in emotional intelligence.
They perceived themselves positively on emotional intelligence.
ii. Out of the four aspects of emotional intelligence namely, emotional self-awareness,
managing emotions, handling emotions and reading emotions, they considered
themselves to be very good in emotional self-awareness, good in reading emotions,
average in handling relations and below average in managing relations.
iii. Though male and female students did not differ much in their perceptions, male students
considered themselves to be somewhat superior to female students in all the four aspects
emotional intelligence.
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iv.
University students perceptions about their emotional intelligence did not relate with
their academic performance, meaning thereby that emotional intelligence, as measured in
the study, was not associated with the academic success.
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Determinants of Capital Structure:
A Case Study of Automobile Sector of Pakistan
VOL 2, N O 10
Listed in ULRICH S
Talat Afza
Dean and Professor, COMSATS Institute of Information Technology, Lahore, Pakistan
Amer Hussain
Faculty Member, IAA, University of Management and Technology, Lahore, Pakistan
FCMA, Ph.D Scholar, COMSATS Institute of Information Technology, Lahore, Pakistan
Abstract
The present study focuses on the determinants of capital structure of Automobile Sector of
Pakistan. The research examines whether the industry specific attributes of Automobile Sector
affect the capital structure choice of firms and validates our results with Rajan and Zingales
(1995) and Booth et. al. (2001) and provide an explanation for the behavior of firms in choosing
debt equity ratio. The study uses pooled data regression model on the sample of 26 firms of
Automobile sector of Pakistan and uses liquidity and cost of debt variables which were not used
in earlier studies in Pakistan and have significant influence on the debt and equity financing
decisions. The results show that the firms which are large in size and having good assets
structure should go for debt financing to finance new projects. The results of profitability, taxes
and liquidity are statistically significant and are consistent with Static Trade off Theory and
Pecking Order Theory.
Key Words: Capital Structure, Debt Equity ratio, Cost of Debt.
1. Introduction
Capital Structure refers to the combination of debt and equity of a firm which shows the behavior
of the firm in financing its overall operations and growth and is considered one of the important
decisions in financial management. The primary objective of the firm is to maximize the
shareholders wealth by making an appropriate mix of the main sources of finance for a firm
including retained earnings, proceeds from the issue of ordinary shares, preference shares and
debt. Debt financing include issuance of bond or long term notes payable, leasing and loans from
bank. In developing countries like Pakistan, debt is analyzed in terms of short term financing and
long term financing as small and medium sized firms prefer short term financing. The excessive
use of debt financing makes the firms risky due to bankruptcy cost.
Debt capital is provided by banks, individuals and financial institutions i.e. investment, leasing
and insurance firms which invest in debt securities such as bonds etc. The profitable firms may
avail the tax shield by using debt financing otherwise the debt would increase the risk of
bankruptcy. Bankruptcy costs include direct and indirect costs, the former consists of liquidation
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cost which is higher for a small firm and lesser for a large size firm. Indirect costs are the result
of changes in policies of firm regarding long term investments i.e. reduction in the staff of
research and development department, reducing training and development budgets of employees
and advertisement expenses etc. As a result, quality of goods and services fall down and also
affect the sales revenue of the firms. Therefore, the potential benefits of leverage diminish due to
bankruptcy cost and highly levered firms are considered to be highly risky by lenders and
investors. If the borrowing firm has low credit rating, the borrowing will not be cost effective for
the firm. Equity financing includes issuance of common stock and cost of equity is higher
because shareholders demand higher dividend for the risk of volatility of earnings.
The present study also examines the influences of liquidity, cost of debt, non debt tax shield and
taxes variables on capital structure decisions which are not studied in the previous studies in
Pakistan .
1.2
Theoretical Framework
There are many theories which explain the behavior of the firm in making Capital Structure
decisions. Each theory presents a different explanation of corporate financing. The existing
empirical literature has mixed results of these theories. Few of the theories which are relevant to
debt and equity decisions are given below:
Stewart C. Myers (1984) presented Pecking Order Theory which states that the firms prefer to
use their internal sources of financing to equity financing. If internal financing do not meet the
needs of the firm, they use external financing, first they apply for bank loan, then for public debts
and as a last resort, equity financing is used. Thus the profitable firms are less likely to opt for
debt for new projects because they have the available funds in the form of retained earnings.
Ross (1977) explains that debt is considered as a way to highlight investor s trust in the firm. If a
firm issues debt, it provides a signal to the market that the firm is expecting positive cash flows
in the future. Thus, the higher level of debt shows the confidence of the managers in future cash
flows but another impact of the signaling factor is the problem of under pricing of equity. If a
firm issues equity instead of debt for financing its new projects, investors will interpret the signal
negatively.
Among other explanations about a firm s behavior in choosing its capital structure is the agency
theory given by Jensen and Meckling, (1976) which identify the possible conflict between
shareholders and a manager s interests because the share of manager is less than 100% in the
firm. The managers are agent to shareholders, they try to transfer wealth from bondholders to
shareholders by borrowing more debt and investing in risky projects.
Empirical results of previous studies show that the determinants of capital structure are industry
specific and this study will also validate whether the determinants of Capital Structure identified
by Booth et. al. (2001) and Rajan and Zingales, (1995) provide an explanation for the Capital
Structure decisions of firms in Automobile Sector of Pakistan. In Pakistan, the research culture
is at its initial stage, the financial data is not maintained in a proper way by any authority and is
very difficult to collect data of the relevant firms. The present study is based on the financial data
collected from the balance sheets and income statements of 22 out of 26 firms of Automobile
Sector from Karachi and Lahore Stock Exchanges of Pakistan. The data is taken for the period of
2003 to 2007, making 110 firm years for panel data analysis. The annual reports of the remaining
firms were not available on either of the stock exchanges.
The paper is organized as follows: first section of the paper gives a brief view of the background
of the study. Second section summarizes the relevant literature. Third section gives description
of the data and the explanation of the variables. Fourth Section shows the data analysis and fifth
section summarizes the results.
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2. LITERATURE REVIEW
Many empirical researchers have explored the determinants of capital structure choice from
different point of views and in different environments related to developed and developing
economies.
Miller and Modigliani (1958) examined that the value of the firm was independent of its capital
structure and the benefits and the cost of debt are set off, showing no affect on the value of the
firm. The theory depends on few irrational assumptions such as ignoring the effects of taxes,
transactions costs of equity and bankruptcy cost. However, it provides a starting point that helps
understand the capital structure and its determinants affecting the decisions of financing mix.
Titman and Wessels (1988) analyzed the explanatory power of some of the recent theories of
optimal debt equity ratio. They found that financing with debt was negatively related to firm s
uniqueness regarding its type of business. Transactions costs might be an influencing
determinant of capital structure decision and the results were consistent with existing theories.
Another study on testing the static trade off theory and pecking order theory on the attributes
consisting of size, tangibility of asset, profitability of firm, growth and risk was done by Cassar
and Holmes, (2003) and the results of regression analysis showed that the asset structure,
profitability and growth were important factors which affected the debt equity ratio of the firms.
Size and risk showed weaker influences on the debt financing of the firms. Their results were
consistent with the static trade off, pecking order and agency cost theories. They proved that the
theories applicable on capital structure of large firms are valid for small and medium enterprises
of Australia. Rajan and Zingales (1995) pointed out that factors examined by previous
researchers as correlated with the firm leverage in the United States, having similar relationship
in other countries also.
Booth .et. al. (2001) analyzed data from ten underdeveloped countries including Pakistan and
empirically proved that some of the characteristics of modern finance theory were transferable
across countries. In a subsequent study, D Vasiliou et. al. (2003) concluded that the firms with
heavy investments in fixed assets had higher leverage ratio than the smaller firms. The study
affirmed the trade off theory and pecking order theory. Mitton T (2007) explained the tendency
of firms in the emerging market for debt financing. In a recent study, Cespedes et.al. (2009)
explained the behavior of firms in Latin America covering seven countries. They experienced
that ownership oriented firms preferred equity financing and found out that there were lower tax
shields and higher bankruptcy costs.
Jong et. al. (2008) analyzed that the debt equity ratio was related to a number of country specific
factors such as bond market development, protection of creditors right and growth rate of gross
domestic product. Although many foreign researchers have studied the attributes affecting the
choice of debt and equity ratio of firms in developed countries, few of them researched on firms
in developing countries. In the perspective of Pakistan, Rahman (1990) studied the Industry and
Size as determinants of Capital Structure decisions and the results showed that Engineering and
Tobacco industries were heavily geared. Industry groups did not provide significant differences
with respect to this measure of financial leverage. Focusing on the factors affecting capital
structure decisions of firms of Japan, Malaysia and Pakistan, Mahmood, (2003) found that the
firms in Japan and Pakistan showed very high leverage ratios more than 70% because of
Japanese developed market status and underdeveloped capital market of Pakistan which forces
firms to opt for bank loan rather than raising equity.
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Qureshi and Azid (2006) identified that the public sector preferred financing through debts due
to corporate governance, favorable terms and conditions of commercial banks and lesser
accountability than private sector. Shah and Khan (2007) examined that there was highest
leverage ratio for textile industry and the average profitability of textile industry was negative
due to understatement of profit by family controlled firms. Hijazi (2006) examined the cement
sector of Pakistan and the results, except for firm size, were found to be highly significant and
rejected the static trade off theory as the size and leverage were positively correlated. Tangibility
was an important attribute of corporate structure decision and was positively related to leverage.
Kanwar (2007) explained the attributes of Capital Structure in Sugar industry of Pakistan and
the results depicted that return on assets, asset tangibility, market to book ratio and size are found
to be significant except tax rate. The developed provinces of Pakistan showed highest debt ratios.
The average debt ratio was 48.3 % for sindh, 23.7 % for Punjab and only 7.6 % for NWFP.
Rafiq et. al. (2008) examined the chemical industry of Pakistan regarding capital structure choice
and suggested that chemical sector preferred equity financing and less debt. Size influenced the
leverage positively, showing that large size firms prefer debt financing than opting for equity.
Growth showed positive association with debt, indicating tendency of debt financing.
The present study examines the influences of the independent variables such as tangibility of
assets, size of firm, profitability of firm, taxes, cost of debt, non debt tax shield and liquidity on
leverage ratio of Automobile Sector of Pakistan. On the basis of theoretical frame work of
Ranjan and Zingales (1995) and previous empirical results, we have developed the following
hypotheses between leverage as a dependent variable and tangibility, size, tax, profitability,
liquidity, non-debt tax shield and cost of debt as independent variables.
H01 = A firm with higher percentage of fixed assets will not have high leverage.
Ha1 = A firm with higher percentage of fixed assets will have high leverage.
H02 = The size of a firm has negative relationship with leverage.
Ha2 = he size of a firm has positive relationship with leverage.
H03 = The profitability of a firm has positive relationship with leverage.
Ha3 = The profitability of a firm has negative relationship with leverage.
H04 = The higher rate of taxes has negative relationship with leverage.
Ha4 = The higher rate of taxes has positive relationship with leverage.
H05 = The higher cost of debt has positive relationship with leverage
Ha5 = The higher cost of debt has positive relationship with leverage
H06 = The firms with more current assets will not have less leverage
Ha6 = The firms with more current assets will have less leverage
Ha7 = The firms with higher rate of depreciation will not have less leverage
H07 = The firms with higher rate of depreciation will have less leverage
3.
RESEARCH METHODOLOGY
According to the existing literature, the determinants of Capital structure have been analyzed
under Pecking order Theory, Static Trade off Theory and Agency Cost Theory. These theories
have empirically tested the relationship of debt and equity using secondary data mostly based on
published financial statements listed at different stock exchanges. The present study also uses
secondary data collected from Karachi Stock Exchange and Lahore Stock Exchange of Pakistan.
Moreover, the Spearman s correlation and Regression model is used to develop statistical
framework. This section includes the sample data and the variables used in investigating and
distinguishing the determinants of Capital Structure of Automobile industries of Pakistan by
using statistical techniques.
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3.1
Data Description
The present study uses the data collected from the balance sheets and income statements of 22
out of 26 firms of Automobile Sector of Pakistan for the period of 2003 to 2007 making 110 firm
years for panel data analysis. Moreover, all those firms which were delisted from either Lahore
or Karachi Stock Exchange excluded from our sample.
3.2 Regression Model (Rajan & Zingales, 1995)
The existing literature provides empirical evidence for defining leverage as a function of industry
specific variables. The present study uses panel data regression analysis known as Constant
Coefficient Model and facilities analysis of time series and cross sectional data. The use of panel
data model minimizes multicollinearity among the attributes of debt equity ratio and improves
the precision of econometric estimates. The equation of regression model is as follows:
LG = 0 + 1 (TG) + 2 (SZ) + 3 (PF) + 4 (TX) + 5 (LQ) + 6 (CD) + 7 (NDTS) +
Where
LG = Leverage
TG = Tangibility of assets
SZ = Firm Size
PF = Profitability
TX = Taxes
LQ = Liquidity
CD= Cost of Debt
NDTS=Non Debt Tax shield
= error term
The current study excluded growth attribute as we are already using size and asset tangibility
variables. Our model included the tax provision, liquidity, cost of debt and non debt tax shield
which were not used in the model by Ranjan & Zingales (1995), Hijazi & Tahir (2006) and
Mahmood ( 2003).
These variables have significance in Static Trade off Theory and Pecking Order Theory. Tax is
considered a basic element for Static Trade off Theory as it encourages firms for debt financing
to avail tax shield if the firm is operating in profits. The firm is considered liquid if it can pay off
its current liabilities over a period of time and is significant feature of pecking order theory
which is usually having negative relationship with leverage. The cost of debt is the cost of using
long term debts which influences the firm for further debt or equity financing.
3.3
Variables of the Study
a-Explanation of Variables
The study follows the frame work of Rajan and Zingles, (1995) and Shah and Hijazi (2005) and
uses tangibility of assets, firm size, profitability, taxes, liquidity, cost of debt and non debt
depreciation of the firm as independent variables to examine the degree of leverage. We present
the description of these variables and their measurement in this section.
3.3.1 Leverage (LG) :Dependent Variable
The existing literature gives different proxies for the measurement of leverage. Titman and
Wessels (1988), Rajan and Zingales (1995) used market value based and book value based
measures of leverage. Market value of Leverage is calculated by dividing the book value of debt
by book value of debt and market value of equity where as book value of leverage can be
calculated by dividing the book value of debt by book value of debt and book value of equity.
The present study uses book value measure of leverage as it is easy to calculate and in the case
of bankruptcy; book value of debt is taken into consideration. Secondly the market value of debt
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does not affect the tax shield (Banerjee et. al. 2000) and is immaterial in affecting the payment of
debt and generating the cash saving through tax shield.
In Pakistan, short term debt financing is easier than long term debt financing as the average size
of firm is either small or medium and short term financing is cost effective and technically
feasible (Shah and Hijazi, 2004). The major source of debt financing in Pakistan are commercial
banks and now bond market and term finance certificate are growing rapidly. Booth et al (1999)
pointed out that the use of long term financing was not as common as the short term financing.
3.3.2 Tangibility of Assets (TG):Independent Variable
The firms having large amount of fixed assets can obtain loan easily as the long term assets are
used as collateral for security. Bankers may offer lower rate of interest to firms having large
portfolio of fixed assets. The tangibility of assets is positively related with leverage.The present
study takes gross fixed assets as numerator to have uniformity in the data as different firms use
different methods of depreciation. Secondly, the firm can mortgage fully depreciated assets.
3.3.3 Firm Size (SZ)
There are controversial point of views about the relationship of size and leverage of a firm.
Bankruptcy costs do not affect the debt financing decision of large size organization as those
costs are fixed and do not form the major proportion of the value of the firm. Titman and
Wessels, (1988) argued that the large firms have less chances of bankruptcy as they are
diversified, therefore, a positive relationship is expected between size and leverage of a firm.
Rajan and Zingales,(1995) argued that the possibility of under pricing of new equity is reduced
due to less asymmetric information about the large firms, encourages to use equity financing. It
indicated size and leverage are negatively related.
3.3.4 Profitability (PF)
Debt financing is attractive for firms due to tax shield. According to the trade off theory, when a
firm has higher profitability, it will issue further debt to reduce its tax burden but the pecking
order theory assumes that the firms choose to use retained earnings to finance its operation and
growth needs. When retained earnings are not sufficient to cater the need, the firm moves
towards debt financing and equity is the last resort for the firm.Titman and Wessels (1988),
Rajan and Zingales (1995), Booth et al (2001) found a negative relationship between leverage
and profitability in emerging countries.
3.3.5 Tax Provision (TX)
All researchers believe that tax provision influences debt equity ratio. Higher rate of tax
encourages profitable firms to opt for high gearing to obtain tax shield. There are theoretical and
empirical arguments that the tax shield of debt financing induces the firms to get more debt to
maximize the value of the firm. However, Miller (1977), Fama and French (1998) found no
evidence in supporting tax benefits of debt financing. Barclay and Smith (1995) and Graham
(2000) found mixed results for tax shield of debts.
3.3.6 Non Debt Tax Shield (NDTS)
The non debt tax shield consists of depreciation charges and investment tax credit. De Angelo
and Masulis (1980) examined that tax shield on depreciation can be replaced by tax benefits of
debt financing. Therefore, a firm with larger amount of non debt tax shield is expected to use less
amount of debt. Heshmati (2002) argued that firms get tax saving for debt financing and non
debt tax shield due to depreciation expenses reduce the use of debt financing. There is a negative
relationship between leverage and non debt tax shield.
3.3.7 Liquidity (LQ)
Profitability and liquidity of firms is an indicator of their ability to pay off interest and original
amount of debt (Brennan and Schwartz, 1984). Signaling theory suggest that debt financing
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gives signal of positive cash flow to investor. Pecking Order Theory explains that firm favor
internal funds for financing the growth and business operations, then chooses debt financing if
internal funds are not sufficient and equity financing is considered last resort due to high
flotation cost.
3.3.8 Cost of Debt (CD)
Interest is the cost which a firm has to pay to use the money for investment and business
operation. According to Static Trade off Theory, the behavior of the firm is affected with the
increase and decrease in cost of debt. There are advantages of using debt financing in the form of
tax saving and cost of debt is in the form bankruptcy and agency costs. To take the benefit of tax
saving, the firm will get maximum loan for business financing but high debt investment will take
the firm to bankruptcy and to avail the tax saving, the firm must be in profits otherwise, the firms
in business losses can not avail tax savings. The financial distress cost is of two types.
4. Analysis
The descriptive analysis of each variable affecting the debt equity level of the sample firms in
terms of mean, maximum, minimum, standard deviation is made to see the variation of data for
Automobile Sector of Pakistan. We have explained the behavior of industry specific variables
selected for the present study.
Table 4.1 shows that the highest mean value of size 20.81 where as the profitability has 0.12
which is the lowest value. The current assets to current liabilities ratio has highest standard
deviation of 3.12 where as the profitability has the lowest standard deviation of 0.17.
To check the degree of correlation and direction of relationship between the independent and
dependent attributes of capital structure choice, the spearman s correlation is run using SPSS.
Table 4.2 indicates that the highest correlation is between liquidity and leverage with the
coefficient value of 0.701 which is significant at 0.01 confidence level. There is no
multicollinearity problem in our selected variables.
Table 4.3 presents the summary of the influences of independent variables on debt equity ratio.
The independent variables influence the leverage by 29.3%. Tangibility is positively influencing
the leverage and is consistent with Static Trade off Theory with coefficient value of 0.083 which
is not significant. The firms of Automobile sectors with large asset structure prefer debt
financing to avail the benefits of tax shield. Profitability is negatively related with leverage with
coefficient value of -0.609 which is significant at 1% confidence level.
The profitable firms of Automobile Sector prefer to use retained earnings for financing the
projects first and then debt financing if further funds are required and consider equity financing
as a last resort. The behavior of firms in Automobile Sector is following the Pecking Order
Theory.
Taxes are having positive relationship with leverage with coefficient value of 0.025 which is
statistically significant, showing that the increase in tax provision encourages the firm to go for
debt financing to avail the tax shield which is following the Static Trade off Theory. The non
debt tax shield is negatively related with leverage and is insignificant which is consistent with
literature, showing the firms having high depreciation expenses do not prefer debt financing as
depreciation itself provide tax shield to firms. The liquidity variable has negative relationship
with leverage which is statistically significant, showing that liquid firms prefer internal resources
for financial needs and is consistent with theoretical model of Pecking Order Theory.
Cost of Debt is negatively related with leverage and is statistically insignificant, indicating that
the firms having high cost of debt avoid debt financing which is consistent with Static Trade off
Theory. The size is positively related with leverage and is insignificant , reflecting the behavior
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of large firms in Automobile Sector for debt financing as the bankruptcy costs form a small
portion of the total value of the large firm and there are less chances of bankruptcy for larger
firm.
5. Conclusion
There are two main theories which affect the determinants of capital structure of firm either
positively or negatively. The first one is the Trade off theory which elaborates the tradeoff
between the cost of bankruptcy and benefits of tax shield. The second is pecking order theory,
introduced by Myers and Majluf (1984).
The behavior of firms in Automobile Sector indicates that they avail the cash saving through tax
shield by debt financing and increase in depreciation does not encourage the firms for further
debt financing, supporting the static trade off theory. Non debt tax shield, liquidity and cost of
debt variables are negatively related to leverage and are consistent with the results of previous
researches. The firms with better liquidity position prefer equity financing than debt investment
in the business and the results are significant, supporting the pecking order theory. The study
indicates some policy implications for the managers and investors of firms in this sector. The
large firms of Automobile Sector having good asset structure should finance their growth and
current operations by debt financing and the firms with increasing cost of debt should use
retained earnings to meet the financing needs, followed by equity financing if further funds are
required.
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Annexure
Table 2.1 Summary of Expected Results
Determinants
Proxy used in this study
Expected
relationship
Positive
Tangibility of Assets
Total Gross Fixed Assets/ Total Assets
Size of firm
Log of Total Sales
Positive
Profitability
EBT/ Total Assets
Negative
Taxes
Tax provision/ Net profit before taxes
Positive
Non-Debt Tax Shield
Depreciation / Total Assets
Negative
Liquidity
Current Assets/ Current Liabilities
Negative
Cost of Debt
Interest before Tax/ Long term debts
Negative
Table 4.1
Descriptive Statistics
Leverage
N
110
Minimum
.00
Maximum
1.69
Mean
.5894
Std. Deviation
.32529
Tangibility
107
.00
2.00
.5977
.38459
Profitability
110
-.31
1.00
.1190
.17327
Taxes
110
-1077
24.82
.4388
2.36748
Liquidity
107
.18
31.64
1.8741
3.11880
Cost of Debt
106
.00
3.04
.3463
.52405
Size
110
.00
24.65
20.8123
2.90611
NDTS
104
-.02
.08
.0271
.01845
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Table 4.2 Spearman s Correlation Coefficient Analysis
Leverage
Tangibility
Profitability
Taxes
NDTS
Liquidity
Cost of Debt
Size
LG
TG
PF
TX
NDTS
LQ
CD
SZ
Correlation
Coefficient.
1.000
.089
-.292**
.005
.084
-.701**
.034
.098
Significance
.361
.002
.962
.394
.000
.728
.307
Correlation
Coefficient.
.089
1.000
-.444**
-.260**
.537**
-.361**
.114
-.602**
Significance
.361
.000
.007
.000
.000
.247
.000
Correlation
Coefficient.
-.292**
-.444**
1.000
.414**
-.081
.477**
.160
.528**
Significance
.002
.000
.000
.412
.000
.102
.000
Correlation
Coefficient.
.005
-.260**
.414**
1.000
-.037
.184
.179
.540**
Significance
.962
.007
.000
.710
.057
.067
.000
Correlation
Coefficient.
.084
.537**
-.081
-.037
1.000
-.174
.312**
-.086
Significance
.394
.000
.412
.710
.077
.001
.387
Correlation
Coefficient.
-.701**
-.361**
.477**
.184
-.174
1.000
-.117
.189
Significance
.000
.000
.000
.057
.077
.235
.051
-.117
1.000
.103
.001
.235
.295
-.086
.189
.103
1.000
.387
.051
.295
Correlation
Coefficient.
.034
.114
.160
.179
Significance
.728
.247
.102
.067
Correlation
Coefficient.
.098
-.602
Significance
.307
.000
**
.528
**
.000
.540
.312
**
.000
**
**. Correlation is significant at the 0.01 level (2-tailed).
Table 4.3 Regression Analysis

Variable
(Constant)
Tangibility
Profitability
Taxes
Non-Debt Tax Shield
Liquidity
Cost of debt
Size
B
.426
.083
-.609
.025
-.465
-.032
-.073
.014
Std. Error
.364
.125
.177
.011
1.918
.010
.055
.015
t value
1.170
.667
-3.448
2.207
-.243
-3.264
-1.321
.905
Significance
.245
.507
.001
.030
.809
.002
.190
.368
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Listed in ULRICH S
A STUDY ON FINANCIAL PERFORMANCE OF

WHEELS INDIA LIMITED-CHENNAI
S.CHRISTINA SHEELA
B.Com.,M.B.A.,M.Phil.,(Ph.D)
HOD Department of Management Studies
Indra Ganesan College of Engineering
Manikandam, Trichy 12
Abstract
The researcher carried out the study with the objective of finding out the financial performance
of WHEELS INDIA LTD, Chennai for the financial year 2005-2009. The researcher is interested
in finding out the major factors that determine the financial performance of the organization. The
researcher carried out the study with Analytical type of research design in the study with the help
of secondary data collection method. For this purpose the researcher took past 5years balance
sheet into consideration. The data is checked out for the validity and reliability before conducting
the study. The researcher used the following financial tool namely ratio analysis, comparative
balance sheet and DuPont analysis and also statistical tools such as trend analysis and
correlation. The study reveals that the financial performance is satisfactory. Ratios help to
summarize large quantities of financial data to make quantitative judgment about the financial
performance of the firm s. Profitability ratios indicate there is a decrease in the profit level,
utilization of fixed assets and working capital in the last financial year. Thus the company can
take necessary steps to improve sales and profit. This paper introduced a new approach for
performance evaluation DuPont Analysis. The major contribution of this paper is the use of
Five Power Analysis methodology to retrieve ratios most commonly used in financial analysis to
tackle the problems of sample size and distribution uncertainty. This could avoid the waste of
resources due to the uncertainty of relations among the ratios when using them for analysis.
Keywords: Financial Performance, Five Power Analysis, Comparative Analysis, DuPont
Analysis, Measures
1. Introduction
Finance as the system that include circulation of money, the granting of credit, the making of
investment and provisions of banking facilities
Financial statements are the end products of financial accounting. A set of financial statements
prepared by the accountant of a business enterprise that purport to reveal the financial position of
the enterprise, the result of its recent activities, and an analysis of what has been done with
earnings
Financial statements are prepared to meet external reporting obligations and also for decision
making purposes. They play a dominant role in setting the framework of managerial decisions.
However, the information provided in the financial statements is of immense use in making
decisions through analysis and interpretation of financial statements. Financial statement analysis
is the process of identifying financial strengths and weaknesses of the firm by properly
establishing relationship between the items of the balance sheet and the profit and loss account.
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Jose M. Moneva, Eduardo Ortas (2010)1 in his study Corporate environmental and financial
performance: a multivariate approach evaluated the significance of the link between corporate
environmental and financial performance in order to show managers how an adequate
management of environmental factors could contribute to the financial success of the firm. The
results support the idea that enterprises which obtained higher rates of environmental
performance show better financial performance levels in the future.
John irron (2010)2 in his study Financial Statements why it is important for all business? states
that the purpose of financial statements is to give information regarding the financial situation,
performance and changes in financial situation of a venture that is helpful to a wide range of
users in making financial decisions. Financial statements should be comprehensible, appropriate,
reliable and comparable. Reported property, liabilities and equity are directly connected to an
organization's financial situation. Reported income and operating cost are directly connected to
an organization's financial performance.
Mark T. Soliman (2008)3 in his study The Use of DuPont Analysis by Market Participants
founded that a change in asset turnover is positively related to future changes in earnings. This
paper contributes to the literature along three dimensions. First, the paper contributes to the
financial statement analysis literature and finds that the information in this accounting signal is in
fact incremental to accounting signals studied in prior research in predicting future earnings.
Second, it contributes to the literature on the stock market's use of accounting information by
examining immediate and future equity return responses to these components by investors.
Finally, it adds to the literature on analysts' processing of accounting information by again
testing immediate and delayed response. Taken together, the analysis indicates that the DuPont
components represent an incremental and viable form of information about the operating
characteristics of a firm.
4
Chien-Ta Ho & Yun-Shan Wu (2010) : This paper conducted a review of literature and
five-power analysis to aggregate financial ratios appropriate for the analysis. Five-power analysis
in the study is a combination of liquidity, asset utilization, leverage, profitability, and growth.
Future research could set up a specific model for the preliminary selection of financial ratios
with a new to make studies of this kind more complete
3. Objectives
i.
To assess the financial performances of Wheels India Ltd, Chennai by using Five Power
Analysis.
ii. To make comparative study for the past 5 years data.
iii. To judge the working operations of the firm.
iv.
To predict the future using Trend analysis.
v.
To study the relationship between liabilities (Reserves & surplus, secured loan, unsecured
loan, current liabilities) and sales.
Research design constitutes the blue print for collection, measurement and analysis of data. The
type of research used here is analytical. The required data was collected from secondary data.
Sources like the annual reports of the organization of previous 5 years. The is Chennai based
company WHEELS INDIA LTD, Chennai.
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4.1 Financial Indicators

Five Power Analysis : it is the five category of ratios liquidity, asset utilization,
leverage, profitability, growth ratio.
Comparative Analysis
DuPont Analysis
4.2 Statistical Indicators
Trend Analysis
Correlation
Using Statistical Package for Social Sciences (SPSS) the following tools were administered in
this study
1) Correlation and 2) Reliability Test.
5. DATA ANALYSIS AND INTERPRETATION FIVE POWER ANALYSES
Table 1
RATIO
A Profitability
CODE
A1
A2
INDICATORS
Gross Profit Ratio

Net Profit ratio
VALUE
7.11
2
.714
B Assets Utilization
C Leverage Ratio
D Liquidity Ratio
E Growth Ratio
A3
A4
A5
B1
B2
B3
B4
B5
C1
C2
C3
C4
C5
C6
C7
C8
C9
D1
D2
E1
E2
Operating Profit ratio

Return on capital Employed
Return on Total Asset Ratio
Fixed asset ratio
Capital Gearing ratio
Debt Equity ratio
Proprietary Ratio
Interest Coverage ratio
Debtors Turnover ratio
Creditors Turnover ratio
Stock Turnover Ratio
Working Capital Turnover
Ratio
Fixed Assets Turnover Ratio
Capital Turnover Ratio
Total Assets Turnover Ratio
Creditors Velocity Ratio
Debtors Velocity Ratio
Current ratio
Quick ratio
Net sales Growth
Net income Growth
6.44
16.942
4.492
0.688
2.56
1.712
0.672
5.968
7.478
6.148
7.862
5.824
3.648
2.29
1.634
66.728
48.83
2.394
1.442
3.55
2.65
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INTERPRETATION
Current Ratio, Quick Ratio, Fixed Assets Ratio, Capital Gearing Ratio, Debt-Equity
Ratio, Proprietary Ratio, Interest Coverage Ratio, Creditor s Velocity Ratio is in
Increasing level.
Gross profit ratio, Net profit ratio, operating profit ratio, Return on total asset ratio,
Return on capital employed ratio, creditors turnover ratio, stock turnover ratio, Working
capital turnover ratio, Fixed assets turnover ratio, total asset turnover ratio has decreasing
during the entire study period. As the ratio is higher it shows a good management.
The debtors turnover ratio shows fluctuation. It indicates decrease in efficiency of asset
management. But the debts were collected promptly as the ratio is higher.
The debtor s velocity ratio which is the collection period shows between 2 to 3 months, it
indicates the debt collection efficiency is satisfactory.
Comparative Balance sheet from 2004 to 2009 has been analyzed in order to find the actual
position of assets and liabilities of the company.
Table 2
Particulars
Sources of Funds
Share Capital
Reserves and Surplus
Secured Loans
Unsecured Loans
Deferred Tax Liability
Liability
Provision
Total
Application of Funds
Fixed Assets
Investment
Miscellaneous Expenses
Current Assets
Total
% Inc/Dec
05-06
% Inc/Dec
06-07
% Inc/Dec
07-08
% Inc/Dec
08-09
0
16.97
-6.30
-21.30
7.03
76.31
-21.56
8.06
0
14.25
42.18
-27.72
12.43
32.11
-75.20
17.28
0
11.85
15.83
31.51
11.48
57.26
372.84
27.17
0
8.89
36.32
23.97
9.07
-19.35
37.50
9.50
22.97
25.70
0
-2.17
8.06
14.30
116.84
0
18.50
17.28
30.14
0.00
0
25.39
27.17
21.51
105.74
0
-3.70
9.50
INTERPRETATION
The comparative balance sheet the reserve and surplus, secured loans, unsecured loans,
current assets, fixed assets, and current liabilities for the financial years 2004 and 2005,
2007 and 2008 were increased.
The comparative balance sheet the reserve and surplus, fixed assets, and current liabilities
were increased and secured loans, unsecured loans and current assets for the financial
years 2005 and 2006, 2006 and 2007 and 2008 and 2009 were decreased.
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A DuPont model, A DuPont model of ROE is calculated by (figure 1)

Return On Equity
(ROE)
Multiplied by
Financial leverage
Return On Assets
Divided by
Multiplied by
Common
Stock Equity
Total Assets
Net Profit
Margin
Total Asset
Turnover
Table 3: Overview of ROE:

Year
Financial Leverage Return on Assets
ROE
2004-2005
3.70
6.33
23.42
2005-2006
3.46
5.40
18.70
2006-2007
3.59
4.53
16.25
2007-2008
4.10
3.55
14.57
2008-2009
4.12
2.67
11.01
INTERPRETATION
Return on Equity has decreased during the entire study period from 2005 to 2009. But it
is at a satisfactory level.
A DuPont model of ROI is calculated by (Figure 2)
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Table 4: Overview of ROI

Earning as a
Year
Turnover
ROI
2004-2005
3.83
0.28
13.68
2005-2006
5.57
0.28
19.89
2006-2007
5.86
0.29
20.21
2007-2008
6.94
0.29
23.93
2008-2009
5.67
0.27
21
% of sale
INTERPRETATION
Return on Investment has increased during the study period 2005 to 2008. But in the last
financial year it has been decreased.
Trend Analysis is done for Sales and Profit after Tax
Table 5: TREND FOR SALES
X X2
YEARS
SALES (Y)
XY
TREND VALUE
2005
77896.98
-2
-155793.96
77977.512
2006
84335.83
-1
-84335.83
87826.982
2007
100326.87
97676.452
2008
113020.67
113020.67
107525.922
2009
112801.91
225603.82
117375.392
TOTAL
488382.26
10
98494.70
---
INTERPRETATION
The sales trend shows increasing all the years. The sales may be 146923.802 lakhs for the
financial year 2012.
Table 6: TREND FOR PROFIT AFTER TAX
Year
Profit After Tax (Y)
X2
XY
Trend Value
2005
2864.70
-2
-5729.4
2871.07
2006
2636.87
-1
-2636.87
2716.17
2007
2603.04
2561.27
2008
2586.27
2586.27
2406.37
2009
2115.48
4230.96
2251.47
Total
12806.36
10 -1549.04
----
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INTERPRETATION
The trend value for Profit after tax shows decreasing. It may be 1786.77 lakhs for the
financial year 2012.
Table 7: Correlation Analysis
Reserves & Surplus Secured Unsecured Current Liabilities Total Income
Pearson Correlation
Reserves & Surplus
Sig. (2-tailed)
Sales
.958**
.088
.934**
.699
.974**
.003
.868
.006
.122
.001
Pearson Correlation
.958**
.277
.827*
.746
.918**
Sig. (2-tailed)
.003
.595
.042
.089
.010
Pearson Correlation
.088
.277
-.077
.432
.101
Sig. (2-tailed)
.868
.595
.884
.393
.848
Secured
Unsecured
Pearson Correlation
.934**
.827*
-.077
.502
.934**
Sig. (2-tailed)
.006
.042
.884
.311
.006
Current Liabilities
Pearson Correlation
.699
.746
.432
.502
.566
Sig. (2-tailed)
.122
.089
.393
.311
Pearson Correlation
.974**
.918**
.101
.934**
.566
Sig. (2-tailed)
.001
.010
.848
.006
.242
Total Income
Sales
.242

*. Correlation is significant at the 0.05 level (2-tailed).
INTERPRETATION
The sales is highly correlated with reserves & surplus, secured loan and current liabilities.
6. Suggesstion
i.
ii.
iii.
iv.
v.
vi.
The current assets position and debt equity ratio is good in the company, but the
percentage increase of current assets is very low. Therefore, the company should take
necessary steps to improve this situation.
The current liabilities is increasing gradually in all years, the company can have a control
over the liability.
To increase the productivity of the organization working capital should be properly used.
The company has to concentrate with its gross profit and net profit and take necessary
steps to increase sales and profit.
Proper planning is necessary to maintain profitability and liquidity position of the
company.
The company should take corrective and stable policy regarding its debtor and other
lender.
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vii.
viii.
Increase in the sales is not cause for increase in profit so the company has to reduce its
expenses and debtors which help to increase the profit.
The company can adopt new tools and technologies to increase the profitability of the
firm.
7. Conclusion
On studying the financial performance of WHEELS INDIA LIMITED for a study period of five
years 2004-2005 to 2008-2009, the study reveals that the financial performance is satisfactory.
Ratios help to summarize large quantities of financial data to make quantitative judgment about
the financial performance of the firm s. Profitability ratios indicate there is a decrease in the
profit level, utilization of fixed assets and working capital in the last financial year. Thus the
company can take necessary steps to improve sales and profit.
Therefore it can be concluded that the financial conditions and performance of the
organization is doing well, but still to be improved.
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References
Corporate environmental and financial performance: a multivariate approach a journal article
by Jose M. Moneva, Eduardo Ortas (2010) (Industrial Management & Data Systems)
Financial Statements why it is important for all business? an article by John irron (2010)
The Use of DuPont Analysis by Market Participants by Mark T. Soliman (2008) Financial
analysis with the DuPont ratio: A useful compass
Ramachandra Reddy and Yuvaraja Reddy and Yuvaraja Reddy.B. Financial performance
through Market Value Added Approach, The Management Accountant, Vol.42 (1) Jan
2007, pp.56-59
Dr.Sangeetha Arora and Shubpreet Kaur, Financial Performance of Indian Banking Sector in
post Reforms Fre:A Comparative appraisal of Public, Private and Foreign Sector Banks,
Gyan Management,Vol.1(1) July-Dec 2006,pp.35-47
Dr. Satyanarayana Chary and Prasad T performance of venture capital undertaking-A case
study Udyog pragathi, vol.30, n0.4, Oct-Dec 2006,pp.5-20
Accounting ratios for risk evaluating is a study conducted by S.K.Bagchi, (july 04, the
management account).
Performance of the financial and investment companies 2001-02 , Reserve Bank of India
Bulletin, vol VII, NO.8, August 2003,pp.
Navdeep Aggarwal and Singla.S.K, How to develop a single index for Financial Performace ,
Indian Management, Vol.40 (3) March 2001, pp.59-62.
Shergill, GS.Maninder.S and Sarkaria, Market structure and financial performance AN Indian
Evidence with enhances contorls , The Indian Economics Joursal, Vol.48 (2), Dec 2000
pp.97-107.
I.M Pandey (1995) Financial Management. Published by Vikas Publishing House Pvt Ltd., New
Delhi.
Khan& Jain (2001) Theory and Problems of Financial Management. Published by Tata McGrawHill Publishing Company Ltd., New Delhi.
Prassanna Chandra (1999) Fundamentals of Financial Management. Published by Tata McGrawHill Publishing Company Ltd., New Delhi
Research Methodology - Kothari
www.wikipedia.org
www.investopedia.com
www.universalteacher4u.com
www.wheelsindia.com
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Emotional Intelligence Determining Work Attitudes and

Outcomes of University Teachers: Evidence from Pakistan
Listed in ULRICH S
Laila Mustafa
COMSATS Institute of Information Technology,
Department of Management Sciences, Abbottabad
Dr. Shehla Amjad
Professor at COMSATS Institute of Information Technology,
Department of Management Sciences, Abbottabad
Abstract
Emotional Intelligence (EI) is a focus of attention of researchers during the past few decades.
Teachers play a very significant role in achieving the objectives of any educational institute. The
literature indicates a strong relationship between EI and work success. The main aim of the
research is to analyze the effect of EI on the work attitude and work outcomes of university
teachers in Pakistan. The study analyzes EI in determining job satisfaction, job involvement,
organizational commitment, career commitment, withdrawal intentions and job performance
factors. The teachers from COMSATS Institute of Information Technology, Abbottabad are
selected as respondents on the basis of proportionate random sampling. Primary data collected
through questionnaires is analyzed using descriptive statistics, correlations, tests of significance
and regression analyses. The results indicate that EI has a significant effect on work attitude and
work outcome of teachers. This effect is found to be most prominent in job performance, job
satisfaction and withdrawal intentions and to a lesser amount in organizational commitment
Keywords Emotional intelligence, Job performance, Job satisfaction, Withdrawal intentions,
University teachers.
1. Introduction
The concepts of emotion and intelligence have been debated throughout history. Every
individual possess both but the level of use differ from person to person. Prior to early 1990s, the
concept of EI got very little attention and the main focus of researchers was on the significance
of cognitive intelligence for obtaining workplace achievement (Carmeli, 2003). The sense of
self-awareness, of being smart about what one feels, serves as a foundation to emotional
intelligence, on which most other emotional skills depend. It is foundation because it allows one
to implement some self-control. The idea is not to hold back the feelings but rather to do what
Aristotle considered the hard work of the will; Anyone can become angry that is easy, but to
be angry with the right person, to the right degree, at the right time, for the right purpose, and in
the right way this is not easy [Aristotle, The Nicomachean Ethics.] (quoted in Goleman,
1995:ix)
The individuals having the same IQ level may not necessarily be having the same academic
success because they all possess different levels of EI (Brown and Brooks, 2002; Bracket and
Katulak, 2004; Suliman & Al-shaikh, 2006). There is empirical evidence which suggest that only
the intelligence cannot explain our achievements at work or life; it is the emotion as well which
plays a key role in organizational success (George, 2000; Goleman et al., 2002; Wong & Law,
2002; Law et al., 2004; Sy & Cote, 2004; Suliman & Al-shaikh, 2006). The employees EI can
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forecast work related outcomes, such as job satisfaction and job performance (Bachman et al.,
2000; Prati et al., 2003; Wong & Law, 2002).
In educational institutions, teachers play a significant part by being a role model. EI plays a very
significant role in the success of the teachers careers and the organizational performance. In this
paper an attempt is made to analyze the EI level of university teachers and the effect of EI on
improving their work outcomes and work attitudes.
2.1 Emotional Intelligence Defined
Emotional intelligence is not just being pleasant, giving positive expressions and controlling
feelings, nor is it about managing, using, or influencing people (Cooper & Sawaf, 1997; Cherniss
& Adler, 2000). It is the skill to precisely recognize and comprehend own emotional responses
and of others (Cherniss & Adler, 2000). More formally defined, emotional intelligence refers to
the skill of recognizing and expressing emotions, understanding emotions, incorporating
emotions in thought, and controlling positive and negative emotions in self and others (Matthews
et al., 2002).
2.2 What is Emotion?
Although many definitions are present for emotions in literature, neither a single definition is
accepted worldwide (Peterson and Wayne, 1986; Cohen and Areni, 1991; Richins, 1997; Wong,
2004) nor a consent of how to assess emotions (Edwardson, 1998). However the people who are
good at appraising and expressing their emotions are better understood by other people they
work with (Salovey and Mayer 1989-1990). Management scholars, educators, and development
practitioners have verified interest in understanding emotions in the workplace for more than a
decade (Salovey and Mayer, 1990; Daus and Ashkanasy, 2005; Peslak, 2005; Groves et. al.,
2006).
2.3 Emotional Intelligence of teachers and educational institutes
Educational institutes are social places and learning is basically a social process and the
teaching-learning process is hugely affected by social and emotional competencies of the
teachers. Teaching is a profession which requires teachers to demonstrate or display emotion
which they may not actually possess (Adeyemo and Ogunyemi, 2003; Ergur, 2009). Emotionally
intelligent teachers very actively try to direct their students work and life. They are flexible in
response to negative stress and less likely to engulf themselves with pessimism and strong
negative emotions (Nelson et al., 2006).
2.4 Emotional Intelligence and individual performance
It is evident from the literature that individuals with higher EI have happier, more fruitful lives
and seem to do well at work (Tischler et al., 2002). The EI based competencies predict the
performance very well as compared to IQ by itself (Snarey and Vaillant, 1985; Feist and Barron,
1996; Cherniss, 2000). People who manage themselves on their own (Bandura, 1976) and are
meticulous (Barrick and Mount, 1991) have a propensity to be more productive. According to
some scholars (e.g. McGarvey, 1997 and Johnson and Indvik, 1999), the richer the organization
in terms of emotions, the higher an employee s emotional intelligence is likely to be (Suliman
and Al-shaikh, 2007).
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2.5 Emotional Intelligence and organizational performance

The EI impact on work success or organizational success, as defined by advancement in the
organization, was clearly demonstrated by an excellent review of EI literature by Dulewicz and
Higgs (2000). The work success is described as the improvement in one s work behavior
(Tischler et al., 2002). Emotionally intelligent individuals experience permanent positive mood
and feelings that generate satisfaction and well being as compared to those who take these
feelings as anger, depression and disappointment (Carmeli, 2003). The employees not only get
involved in the job for their self-interest; but they also do so because they involve their emotions
in it. Similarly, an emotionally intelligent individual would not hold the organization responsible
in case of every frustration they encounter (Abraham, 1999). Employees are anticipated to
identify, handle and utilize their emotions to eliminate the hindrances in the way of choosing and
advancing their career prospect in a better way (Carmeli, 2003). A person with high emotional
intelligence has the ability to better regulate the emotions therefore his/her withdrawal intentions
may also be low. EI is positively related to job performance (Goleman, 1998, 2001; Abraham,
1999). Business community is suggested to consider EI as a better way to evaluate individuals
during the recruitment in order to predict success in the organization (Goleman, 1998; Rozell et
al., 2001; Lam and Kirby, 2002; Bardzil and Slaski, 2003; Dulewicz et al., 2003).
2.6 Emotional Intelligence in Pakistan
The literature cited suggested that emotional intelligence has gained vital importance and
research work has been done in this regard all over the world. However in third world countries
like Pakistan the field is yet to be explored where EI is comparatively a new field and
consequently people are not very much aware of it. The researchers in Pakistan have tried to
highlight significance of EI by analyzing its effects in various fields. Yousaf and Ahmed (2007)
tried to explore EI by measuring its effectiveness at managerial positions. Farooq (2003) tried to
explore the effect of EI on academic performance of students. Rahim (2010) and Naeem et al.,
(2008) analyzed Pakistan s banking sector for impact of EI on stress and service quality
provided. Malik (2010) evaluates the effect of demographic factors (Age, Education, Job tenure,
Gender and Marital Status) on the EI level which directs to organizational performance among
male and female employees of the Pakistan s banking sector. However there is still a need to
analyze the impact of EI in education sector of Pakistan.
3. Methodology
3.1 Objective and Sampling
In the light of above cited literature the objective of this study is to analyze the effect of teacher s
EI on their work attitudes and work outcomes. The universe of the study is higher education
sector of Pakistan and COMSATS Institute of Information Technology, Abbottabad is selected
as sample higher education institute. The total number of teaching faculty at Abbottabad campus
is 450. Out of these 30 percent is selected as sample i.e. a total of 135 questionnaires are
distributed, using a proportionate random sampling technique, amongst all the departments of the
university. From these a total of 103 duly filled in questionnaires are received.
3.2 Data collection procedure
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The method used for data collection is primary by using a structured standardized questionnaire.
It consists of 34 questions related to those variables which are determining the work attitude and
work outcomes of the individuals. The work outcome includes job performance and withdrawal
intentions. Whereas, work attitude includes job satisfaction, job involvement, organizational
commitment and career commitment. The other part of the questionnaire has questions related to
measuring EI. It is measured using Emotional and Social Competence Inventory (ESCI), a tool
developed by Boyatzis and Goleman (2007) and acquired legally from Hay Group organization.
This is a standard measuring tool developed to measure EI component. A five point likert scaling
technique is used to measure all the components.
The ESCI measures 18 competencies organized into four clusters: Self-Awareness, SelfManagement, Social Awareness, and Relationship Management. Self-Awareness includes
Emotional Awareness. Self-Management includes Emotional Self-Control, Adaptability,
Achievement Orientation and Positive Outlook. Social Awareness cluster is composed of two
competencies: Empathy, Organizational Awareness. Finally the Relationship Management
cluster includes these clusters i.e. Coach and Mentor, Inspirational Leadership, Influence,
Conflict Management and Teamwork.
3.3 Conceptual framework
In the following conceptual framework there are six dependent variables and one independent
variable as shown in Figure 1.
Fig 1: Impact of Emotional Intelligence
Job Performance
Withdrawal Intentions
Emotional
Intelligence
Career Commitment
Job Involvement
Organizational Commitment
Job Satisfaction
Source: Based on Carmeli (2003)
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3.4 Hypotheses development and data analysis

The following hypotheses are formulated for empirical testing:
There is a positive relationship between EI and job satisfaction of teachers.
There is a positive relationship between EI and organizational commitment.
There is a positive relationship between EI and career commitment of the teachers.
There is a positive relationship between EI and job involvement of the teachers.
There is a positive relationship between EI and job performance of teachers.
There is a negative relationship between EI and withdrawal intentions of teachers from
the institution.
The data is analyzed using descriptive statistics, tests of significance i.e. Multivariate Analysis of
Variance (MANOVA), correlation and regression analyses.
4. Results and Discussions
Preliminary analysis is performed to measure the mean score, variance and standard deviation of
the data collected. It also describes the skewness and kurtosis. The result of descriptive analysis
is given in the Table 1.
Insert Table 1 here
Job Satisfaction has a mean score of 3.94 and standard deviation of 0.537. The results show the
variance statistic 0.289. The normal curve is skewed to the right with a skewness of -0.627 and is
relatively peaked with kurtosis measure of 1.221. Moreover, Job Involvement shows the highest
average value with a mean score of 4.09 and standard deviation of 0.507. The skewness is of
0.017 and a peak of -0.385. The results also depict a variance of 0.257.
Organizational Commitment has a mean score of 3.85 and standard deviation of 0.577. It has
skewness of -0.195 along with a kurtosis -0.526. It also shows a variance of 0.332 and Career
Commitment has a mean score of 3.97 and standard deviation of 0.495. The descriptive statistics
of this variable shows a skewness of -0.055. It also has a variance of 0.245 and kurtosis -0.422.
Withdrawal Intention is relatively a negative variable and that is why it is showing the lowest
average with a mean score of 2.50, standard deviation of 0.812 and variance of 0.660. It has a
skewness of 0.314 with kurtosis of 0.402. Finally, Job Performance has a mean score of 3.95,
standard deviation of 0.401 and variance of 0.161. The skewness is -0.019 and kurtosis is -0.426.
For this study a simple one-way MANOVA was applied in order to further verify the results. It
works in a situation when there is one categorical independent variable and two or more
continuous dependent variables. The MANOVA was performed to investigate differences in EI
levels of the respondents in terms of their work attitudes and outcomes. Six dependent variables
were used: job satisfaction, job involvement, career commitment, organizational commitment,
withdrawal intention and job performance. The independent variable was emotional intelligence.
MANOVA has been used in this field by many researchers in their studies (e.g. Lane et al., 2010;
Narimani and Basharpoor, 2009; Cook, 2006; Philips et al., 2004 and Chan, 2004).
Preliminary assumption testing was conducted to check for sample size, normality, linearity,
univariate and multivariate outliers, homogeneity of variance-covariance matrices, and
multicolinearity, with no serious violations noted. Following are the assumptions for MANOVA:
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4.1 Sample Size

The first assumption of MANOVA is to have a large sample size. There is a need to have more
cases in each cell than the dependent variables. The minimum required number of cases in each
cell in this study is six (the number of dependent variables). In this study a total of eighteen cells
(three levels of our independent variable; and six dependent variables for each) are there. The
number of cases in each cell is provided as part of the MANOVA output. In this case there are
many more than the required number of cases per cell. Moreover, for this study this assumption
has been met as the sample size is quite large.
4.2 Multivariate outliers and multivariate normality
MANOVA is quite sensitive to outliers (i.e. data points or scores that are different from the
remainder of the scores). Multivariate outliers are subjects with a strange combination of scores
on the various dependent variables (e.g. very high on one variable, but very low on another). The
multivariate outliers and multivariate normality is checked and the results are shown in following
tables.
Insert Table 2 here
Insert Table 3 here

In Table 3, the Mahalanobis distance has a value 23.5. This value was compared to a critical
value which in this case, with six dependent variables, is 22.46. As the value 23.5 is larger than
critical value, it means there is multivariate outlier . In this case at least one value has exceeded
the critical value.
To check which actually the outlier is, it was further investigated and the results are shown in
Table 4. Here those people (or cases) are highlighted that had values higher than the critical
value of 22.46. In this case only one person had a score that exceeded the critical value. This was
the person with ID=88 and a score of 23.5. Because there is only one person and its score is not
too high, this person is not excluded from the data file.
Insert Table 4 here
4.3 Linearity
This assumption refers to the presence of a straight-line relationship between each pair of the
dependent variables. This is assessed by generating scatter plots between each pair of the
variables. These can be shown in the figures 1 and 2. These plots do not show any evidence of
non-linearity; therefore, the assumption of linearity is satisfied.
Insert Figure 1 here
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Insert Figure 2 here

5 Multicolinearity and Singularity
MANOVA works best when the dependent variables are only moderately correlated. To check
for multicolinearity simple correlation was conducted and found that the dependent variables are
only moderately correlated and the variables are not combination of other variables. This is
shown in Table 5 which indicates no severe problems of multicolinearity as none of the related
variables exceeded the value of 0.60. Thus this assumption is also satisfied.
Insert Table 5 here
6 Homogeneity of variance-covariance matrices

The test used to assess this assumption is Box s M Test of Equality of Covariance Matrices. If
the Sig. value is larger than .001, then this assumption is not violated. As can be seen from the
Table 6 the significance value is 0.027, which is larger than the cut-off, then it can be concluded
that this assumption is not violated.
Insert Table 6 here
7.Equality of Variances
To check for equality of variances assumption Levene s test of equality of error variance was
conducted. In order to fulfill this assumption the significance values must be greater than 0.05.
As given in Table 7, none of the variables recorded significant values; therefore we can assume
equal variances.
Insert Table 7 here
After checking for all the assumptions, the one-way multivariate analysis of variance
(MANOVA) was conducted.
8. Multivariate Tests
This set of multivariate tests of significance indicates whether there are statistically significant
differences among the groups on a linear combination of the dependent variables.
In Table 8 shown above, we obtained a Wilks Lambda value of .673, with a significance value
of .000. This is less than .05; therefore there is a statistically significant difference between work
attitudes and outcomes in terms their emotional intelligence level.
Insert Table 8 here
9. Between-subjects effects
Do the EI levels differ on all the dependent variables or just one? This information is provided in
Table 9. Because there are a number of separate analyses here, a higher alpha level is set to
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reduce the chance of a Type 1 error (i.e. finding a significant result when there isn t really one).
This is done by a Bonferroni adjustment in which the alpha value .05 is divided by 6 (number of
dependent variables), giving a new alpha level of .0083. The results are considered significant
only if the probability value (Sig.) is less than .0083.
Insert Table 9 here
10. Significance
From Table 9, the values are compared for significance with the new adjusted alpha value of
.0083. From the results it is clear that except the variable of withdrawal intentions all other
variables show a significant difference in terms of their EI levels.
11. Effect Size
The effect size can be seen from the values given in the Table 9 under the heading of partial eta
squared. In case of first dependent variable (job satisfaction) the value is .178, which, according
to generally accepted criteria is quite a large effect. According to Cohen (1988), the distribution
is like this .01=small effect, .06=moderate effect, .14=large effect. This represents that 17.8 per
cent of the variance in job satisfaction scores is explained by emotional intelligence. All
variables have a score larger than .14 which means they all have large effects except the variable
withdrawal intention which has a score of 0.06 which is considered a medium effect. It is
concluded that a considerable amount of variances in all the dependent variables are being
explained by the independent variable (emotional intelligence).
A MANOVA was performed to investigate differences in EI levels of the respondents in terms of
their work attitudes and outcomes. Six dependent variables were used: job satisfaction, job
involvement, career commitment, organizational commitment, withdrawal intention and job
performance. The independent variable was emotional intelligence. Preliminary assumption
testing was conducted to check for sample size, normality, linearity, univariate and multivariate
outliers, homogeneity of variance-covariance matrices, and multicolinearity, with no serious
violations noted. There was a statistically significant difference between EI levels of low,
moderate and high on the combined dependent variables: F(12, 190)=3.47, p=.000; Wilks
Lambda=.673; partial eta squared=.180. When the results for the dependent variables were
considered separately, all the dependent variables, except withdrawal intentions, showed
significant differences using a Bonferroni adjusted alpha level of .0083.
The relationship between independent variable (emotional intelligence) and dependent variables
(factors of work attitudes and work outcomes) was further investigated using Spearman s rank
order correlation. Spearman s Rank Order Correlation (rho) is used to calculate the strength of
the relationship between two continuous variables. Preliminary analyses were also performed to
ensure no violation of the assumptions of normality and linearity. The correlation result is
represented in Table 10.
Insert Table 10 here
The correlation matrix indicate that job satisfaction has a moderately positive relationship with
emotional intelligence [r=.395, n=150, p<0.01]. The positive result implies that higher emotional
intelligence level leads to increased job satisfaction, thus approving the acceptance of hypothesis
H1, that there is a positive relationship between these two variables. Job involvement is also
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showing a moderate positive correlation with emotional intelligence [r=.375, n=103, p<0.01],
with high level of job involvement is associated with higher levels of emotional intelligence. It
suggests the acceptance of the hypothesis H2 that these two have a positive relationship.
The results shows a moderate correlation between organizational commitment and emotional
intelligence [r=.350, n=103, p<0.01]. The variables hold a positive correlation at a significance
level of 0.01. This variable has the lowest correlation value as compared to other dependent
variables with emotional intelligence. The value shows that EI of a teacher has an impact on the
level of organizational commitment. This correlation strengthen the results of Carmeli (2003),
accepting the hypothesis H3. Moreover, the career commitment, like previous dependent
variables, is also showing a positive relationship with emotional intelligence [r=.420, n=103,
p<0.01]. This variable also holds a positive correlation at a significance level of 0.01. Career
commitment has a relatively higher correlation value depicting a relatively strong relationship
with EI. This shows that as the EI level increases the person becomes more committed towards
his/her career because he/she has sense of responsibility and loyalty. Thus the hypothesis H4 of
showing a positive relationship between these two variables is accepted here supporting previous
studies.
There is a negative correlation depicted between emotional intelligence and withdrawal
intentions [r=-.231, n=103, p<0.05], which shows that high levels of emotional intelligence is
associated with lower levels of withdrawal intentions of the teachers from the institute. Thus, the
hypothesis H5 which states a negative relationship between the two is proved to be accepted.
The correlation of withdrawal intentions and sub-dimensions of EI also depicts a negative
relationship. Thus, it can be concluded that as the EI level increases the chances of that
individual leaving his/her job decreases. The last variable, job performance, is found to have a
significant positive relationship with emotional intelligence [r=.463, n=103, p<0.01], for the
pooled data, which allows us to accept the hypothesis H6 of showing a positive relationship
between these two variables. Correlation coefficient of .463 depicts that job performance has the
highest correlation with emotional intelligence as compared to other dependent variables.
Furthermore, the significance level of 0.01 shows that it has a significant positive relationship
with independent variable. The result supports the fact that with high levels of EI results in
higher levels of job performance, which is consistent with the findings of Carmeli (2003).
Furthermore, the results also show a significant positive relationship between job performance
and other sub-dimensions of EI. Similar results are also found by Wong and Law (2002) in their
study except for the variables organizational commitment and withdrawal intentions for which
they found low and insignificant correlations.
In order to further test the hypotheses, the study used linear regression to find out the coefficient
of independent variable (emotional intelligence) affecting the dependent variables. Separate
linear regressions are run for all the dependent variables. The dependent variables and the
independent variable are combined for data analysis and entered separately for regression
analysis. Later these results are tabulated in a single table in order to know and compare their
affects simultaneously. The regression analysis between all the independent and dependent
variables resulted in the values depicted in Table 11.
There are a number of values provided as a result of regression analysis. Here for this study some
values are omitted. So, only those values are taken which are necessary for this study as shown
in the Table 11. R square statistic gives the ratio of explained variation to total variation. R is the
coefficient of correlation. If R is higher than 0.9 the issue of multicollinearity exists in the
variables. Moreover, the higher is F statistics; more significant is the regression.
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Insert Table 11 here

It can be concluded that approximately 20 percent of the variability of job satisfaction is
accounted for by the independent variable (emotional intelligence) in this model and also there is
an expected increase of .624 in the job satisfaction score for every unit increase in emotional
intelligence. Moreover, it is concluded that approximately 18 percent of the variability of job
involvement is accounted for by emotional intelligence in this model and a unit increase in EI
results in an expected increase of .552 in the job involvement score. In addition, the relationship
between EI and organizational commitment was found to be slightly weak with a variability of
8.5 percent. Career commitment shows a variability of 18.2 percent and an increase of .544 for
every unit increase in EI. The next variable, withdrawal intentions, depicts a minimal variability
of only 5.8 percent and a negative relationship with a beta value to be -.502. It means that
decrease of .502 is expected in withdrawal intentions score for every unit increase in emotional
intelligence. The last variable of job performance is the one most affected by a change in EI with
the highest variability of 22.7 percent. Also there is an expected increase of .492 in the job
performance score for every unit increase in emotional intelligence variable. From the above
discussion it is concluded that the results of regression analysis have further confirmed the
hypotheses of the study.
12. Conclusion
The EI level of the teachers poses a significant effect on their work attitudes and outcomes. The
descriptive statistics showed a normal distribution of the values of all the variables. As
MANOVA was used for measuring the difference between the EI levels, therefore, its results
indicated that there is a statistically significant difference between EI levels of low, moderate and
high on the dependent variables in combination. Even when looking individually, all variables
showed significant difference except withdrawal intentions. The result of spearman correlation
showed a significant positive relationship between all the variables and emotional intelligence
except withdrawal intentions which showed a significant negative relationship. According to
these results the hypotheses of the study are found to be true. The results of regression analysis
have further confirmed the acceptance of hypotheses. All these results were consistent with the
past research. As can be seen from the findings that having a good EI results in a greater job
satisfaction, job involvement, job performance, career commitment and organizational
commitment and lesser chances of turnover (withdrawal intentions).
As emotionally intelligent people know their emotions and know how to control them and know
other person s emotions as well. From the findings of the study and previous literature, it is
evident that teachers play a very vital role in building up the nation. Therefore, more emotionally
intelligent teachers will be able to deal with their students more effectively. The limitations of
the study include small sample size and subjective basis of measurement. Despite these
limitations, the study will be able to add to the knowledge base available on emotional
intelligence of university teachers and its impact on their work attitudes and outcomes in
Pakistan.
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ANNEXURE
Table 1: Descriptive Statistics
N
Job Satisfaction
Job Involvement
Org. Commitment
Career
Commitment
Withdrawal
Intentions
Job Performance
Emotional
Inteligence
Valid N (listwise)
Minimum Maximum
Std.
Deviation Variance Skewness Kurtosis
Mean
Statistic Statistic Statistic
Std.
Statistic Error
Statistic Statistic Statistic
Statistic
103
103
103
103
2.25
2.80
2.40
2.80
5.00
5.00
5.00
5.00
3.9393
4.0913
3.8447
3.9709
.05293
.04996
.05682
.04877
.53718
.50703
.57662
.49500
.289
.257
.332
.245
-.627
.017
-.195
-.055
1.221
-.385
-.526
-.422
103
1.00
5.00
2.5049
.08004 .81230
.660
.314
.402
103
103
3.09
2.92
4.91
4.64
3.9470
3.9104
.03950 .40084
.03825 .38818
.161
.151
-.019
-.370
-.426
.011
103
Table 2: Checking assumption for outliers

Model Summaryb
Model
R
.566a
R Square
Adjusted R
Std. Error of
Square
the Estimate
.321
.278
.32977
a. Predictors: (Constant), Job Performance, Withdrawal Intentions, Org

Commitment, Job Satisfaction, Career Commitment, Job Involvement
b. Dependent Variable: Emotional Intelligence(overall)
ANOVAb
Model
1
Sum of Squares
Regression
df
Mean Square
4.930
.822
Residual
10.440
96
.109
Total
15.370
102
F
7.555
Sig.
.000a
a. Predictors: (Constant), Job Performance, Withdrawal Intentions, Org. Commitment, Job

Satisfaction, Career Commitment, Job Involvement
b. Dependent Variable: Emotional Intelligence(overall)
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Table 3: Checking for the outlier (Residuals Statistics )

Minimum
Maximum
Mean
Std. Deviation
Predicted Value
3.3645
4.4237
3.9104
.21984
103
Std. Predicted Value
-2.483
2.335
.000
1.000
103
.041
.162
.083
.024
103
3.4040
4.4476
3.9100
.22018
103
-.78300
.80468
.00000
.31993
103
Std. Residual
-2.374
2.440
.000
.970
103
Stud. Residual
-2.531
2.503
.001
1.002
103
-.88975
.84652
.00039
.34159
103
-2.606
2.575
.000
1.014
103
Mahal. Distance
.552
23.518
5.942
4.093
103
Cook's Distance
.000
.125
.010
.017
103
Centered Leverage Value
.005
.231
.058
.040
103
Standard Error of
Predicted Value
Adjusted Predicted Value
Residual
Deleted Residual
Stud. Deleted Residual
a. Dependent Variable: Emotional Intelligence(overall)
Table 4: Checking for the outlier (Extreme Values)
Emotional
Intelligence(over
Case Number
Mahalanobis Distance
Highest
Lowest
all)
Value
88
4.11
23.51814
53
3.72
16.77358
24
3.98
15.68380
15
3.56
15.65880
16
3.58
15.57420
29
3.48
.55158
68
3.69
.71339
103
4.07
.74760
43
3.38
.83086
57
3.16
.86849
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Table 5: A correlation matrix of dependent variables

Org.
Job
Job
Career
Commitmen Commitmen
Satisfaction Involvement
Job
Withdrawal
Performanc
Intentions
1.000
Job
Satisfaction
Job
.691**
1.000
.445**
.565**
1.000
.505**
.480**
.450**
1.000
-.398**
-.502**
-.323**
-.354**
1.000
.427**
.482**
.416**
.498**
-.338**
Involvement
Org.
Commitment
Career
Commitment
Withdrawal
Intentions
Job
1.000
Performance
Table 6: Box s Test of Equality of Covariance Matrices

Box s M
df1
df2
Sig.
67.566
1.461
42
21128.935
.027
Table 7: Levene's Test of Equality of Error Variancesa

F
df1
df2
Sig.
Job Satisfaction
5.145
100
.057
Job Involvement
3.011
100
.054
.221
100
.802
1.992
100
.142
.173
100
.841
.736
100
.482
Org. Commitment
Career Commitment
Withdrawal
Intentions
Job Performance
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Table 8: Multivariate Testsc

Partial Eta
Effect
Emotional
Value
Pillai's Trace
Hypothesis df
Error df
Sig.
Squared
.343
3.314
12.000
192.000
.000
.172
.673
3.465a
12.000
190.000
.000
.180
Hotelling's Trace
.461
3.613
12.000
188.000
.000
.187
Roy's Largest Root
.401
6.413b
6.000
96.000
.000
.286
Intelligence Wilks' Lambda
a. Exact statistic
b. The statistic is an upper bound on F that yields a lower bound on the significance level.
c. Design: Intercept + EI_ranges
Table 9: Tests of Between-Subjects Effects

Dependent
Type III Sum

of Squares
Mean
df
Square
Partial Eta
Source
Variable
Sig.
Squared
Emotional
Job Satisfaction
5.236
2.618
10.820
.000
.178
Intelligence
Job Involvement
2.849
1.424
6.093
.003
.109
Org. Commitment
4.375
2.187
7.405
.001
.129
Career
4.676
2.338
11.509
.000
.187
4.015
2.008
3.172
.046
.060
3.016
1.508
11.278
.000
.184
Commitment
Withdrawal
Intentions
Job Performance
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Table 10: A Correlation matrix

EMOTIONAL INTELLIGENCE SUBDIMENSIONS
Spearman s rho
Social-
Relationship-
Total Emotional
Self-Awareness
Self-Mgt
Awareness
Mgt
Intelligence
.289**
.390**
.323**
.326**
.395**
.000
.001
.001
.000
.395**
.289**
.309**
.375**
.000
.003
.002
.000
.398**
.270**
.228*
.350**
.000
.006
.021
.000
.446**
.308**
.322**
.420**
Sig. (2-tailed) .000
.000
.002
.001
.000
Withdrawal
Correlation
-.285**
-.099
-.197*
-.231*
Intentions
Coefficient
.004
.318
.046
.019
.436**
.303**
.455**
.463**
.000
.002
.000
.000
Job
Correlation
Satisfaction
Coefficient
Job
Correlation
Involvement
Coefficient
.288**

Org.
Correlation
Commitment
Coefficient
.299**

Career
Correlation
Commitment
Coefficient
.400**
-.132

Job
Correlation
Performance
Coefficient
.387**

*. Correlation is significant at the 0.05 level (2-tailed).
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Table 11: Regression Analysis

Unstandardized Coefficient
Dependent
Variables
R Square
t
Sig.
Beta
.624
Std. Error
.123
5.08
25.80
.000
.451
.203
Job
Involvement
.552
.118
4.68
21.93
.000
.422
.178
Org.
Commitment
.433
.141
3.07
9.40
.003
.292
.085
Career
Commitment
.544
.15
4.73
22.42
.000
.426
.182
Withdrawal
Intention
-.502
.202
-.248
6.17
.015
.240
.058
Job
Performance
.492
.090
5.45
29.707
.000
.477
.227
Job
Satisfaction
Figure 1: Scatterplot of the data
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Figure 2: Normal distribution plot of the data
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What Cause No to School but Child Labor:
VOL 2, N O 10
Listed in ULRICH S
A Case of Rural Pakistan

Rana Ejaz Ali Khan
Department of Economics, The Islamia University of Bahawalpur. Pakistan
Hafeez ur Rehman
Department of Economics, The Islamia University of Bahawalpur. Pakistan
Abstract
In order to improve participation in school and elimination of child labor, policy-makers need to
be aware of household factors that constrain demand for schooling and enhance supply of child
labor. The paper analyzed determinants of child labor (5-15 years) by using sequential probit
model. It is found that boys are more likely to go to school, to combine school and work and to
do full-time work but less likely to do home-care. The children from female-headed households
are more likely to go school. The education of head of household, father and mother impacts the
schooling of children positively and child labor negatively. Among them mother s education has
stronger effect. Assets of the household affect the schooling positively. Poverty in different ways
affects the welfare of children negatively. From the policy perspective reducing poverty,
increasing adult education and awareness about girls education may enhance the welfare of
children.
Keywords: Child labor, Rural Areas, Child Schooling, Children welfare, Pakistan,
1. Introduction
It is universally accepted that child labor is detrimental. However there is wide divergence on
how to tackle this problem. The policies those are efficient in curbing child labor entail an
analysis of the key determinants of child labor. Ray (2000) opined that child labor takes diverse
forms in different regions and its key determinants may vary from one area to another. For
instance, Francavilla and Lyon (2002 for Cote dIvoire) explored that girls are slightly more
likely than boys to do labor in urban areas but less likely than boys in rural areas. Child labor is
relatively high in the countries having larger ratio of rural population. In Pakistan 66 percent of
population lives in rural areas and 24 percent of GDP comes from agriculture sector. It suggests
the analysis of child labor in rural areas of the country separately.
According to the first and only national child labor survey in Pakistan, more than two thirds of
the child labor was engaged in agriculture, forestry, hunting and fishing. A significant part of the
child labor, i.e. 71 percent which had suffered from illness or injuries as found in agriculture.
Children s contribution to work in rural areas was about eight times higher than that in urban
areas. The girl child labor had higher percentage in agriculture at the national level, i.e. out of the
total girl child labor, 77 percent was engaged in agriculture, as compared to 67 percent of boys.
In rural areas of the country about 80 percent of girl child labor was engaged agricultural sector
as compared to 72 percent of boys (FBS 1996). The figures suggest the analysis of child labor
separately for rural areas.
A number of studies have probed the child labor in urban and rural areas collectively (see for
instance, Maitra and Ray 2002). The justification for analysis of child labor in rural areas
separately may be that urban sector is generally more accessible to researchers and thus yields
better results from complete data. But it would be overly ambitious to make recommendations
about implementing programs on rural areas which are feasible in urban or peri-urban areas.
Moreover poverty is more pronounced in rural areas of Pakistan as compared to urban ones. The
clusters of population are scattered in rural areas resulting into less accessibility to schools.
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Informal sector is prominent in employment as well as financing in rural communities. It shows

that rural households in Pakistan have specific socioeconomic characteristics. So determining
factors of child labor in rural areas may differ or have different intensity. That is why some
researchers have focused on urban and rural areas separately (see for instance, Sawada and
Lokshin 2000 for child schooling in rural Pakistan; Bhalotra and Heady 2003 for rural Pakistan;
Hou 2009 for separately rural and urban areas of Pakistan).
Child Labor Act 1991 bans the employment of children. The legal intervention may run the risk
of reducing already limited choices available to Pakistani children. It leads to analysis of supply
side determinants of child labor and policy recommendations instead of demand side
determinants that is the core of current study.
There are number of studies concerning determinants of child labor. Majority of them (see Barki
and Shahnaz, 2001; Ray, 2000, 2001, 2004; Hou 2009) have been based on official data. We will
use the primary data. This is novelty of the current study. Barki and Shahnaz (2001) have used
the data of children aged 5-14 years and sample was consisted of the cluster of child labor
concentrated areas. Maitra and Ray (2000) have analyzed the age group of 10-17 years for
Pakistan. We will focus on children in the age group of 5-15 years, as 15 years is the age for
completion of secondary education. The sample for the current study consists of all types of rural
households. It makes the current study different from the previous ones. Ray (2000) has
estimated the determinants of child labor taking into account the number of working hours of
Pakistani children. As the children working for few hours but heavy load of work may have
devastating effect on welfare so we have included the labor force participation as child labor
even the child is doing few hours of work. This is another distinguishing feature of current study.
Hou (2009) examined the relationship between wealth and children activities by disaggregating
children into four categories, i.e. urban boys, urban girls, rural boys and rual girls. The study
found that wealth is crucial in determining children activities, but it is not sufficient to enroll
children in schools. This is specifically the case for rural girls. Self and Grabowski (2009 for
rural India) concluded that mechanical technology in rural areas has negative impact on child
labor. Bhalotra and Heady (2003) have found an interesting result for Pakistan using official data
that is children from land-rich households are more likely to do work than the children of landpoor households. We will reexamine the matter by primary data. Maitra and Ray (2002) have
analyzed the determinants of child labor collectively for urban and rural areas in three countries,
i.e. Peru, Pakistan and Ghana. They found that household poverty discourages a child for
achieving superior outcomes like shcooling. The data was consisted of urban and rural areas
collectively. We will see the relationship for rural areas separately. Although Filho (2008) has
done unique estimation for pure income effect on schooling and child labor. The study concluded
that in the perspective of poverty the cash-benefit alone is not a cost-effective policy to increase
school enrolment and reduce child labor. Similarly, Edmonds (2006) documented large increase
in schooling attendance and decline in total hours worked when families become eligible for
fully anticipatable social pension income.
2. Methodology and Research Design
There is no universal definition of child labor, as the definitions of child and labor are highly
dependent on locality of these elements. We have adopted the definition as the participation of
school-age children (in the age group of 5-15) in the labor force i.e. work for wage or in
household enterprises to earn a living for themselves or to support household income and rural
areas are defined as the areas outside the boundaries of municipal committee and town
committee. If the household is living in rural area, while some children or persons are working in
urban area, the household is taken as rural household.
The study departs from its predecessors in that it uses the primary data. We have used the cluster
sample technique. The sample was selected so that it comprised of all the households of all
income groups. All the households of the sample were surveyed either they were sending their
children to school or work. The clusters were taken from rural areas of two districts of Pakistan,
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i.e. Pakpattan and Faisalabad. The sample observations consisted of individuals in the age group
of 5-15 years from one thousand rural households from each district. Each observation consists
of information on child, head of household, parents and household characteristics.
The determinants of child labor are analyzed as a sequential decision making process, using
sequential probit model. The sequential approach is justified by the assumption that parents are
altruistic. They give first preference to schooling.
The definitions of dependent and explanatory variables used in the model are shown in table No.1.
The sequential choices making the welfare of the child are assumed as: (i) schooling (ii) schooling
and work (iii) work only (iv) neither schooling nor work. This leads to the following four choices,
and choice probabilities, to be estimated for each child:
P1 = Probability to go to school only.
P2 = Probability to go to school and to work simultaneously.
P3 = Probability not to go to school but to work.
P4 = Probability neither to go to school and nor to work.
In the sequential probit model the probabilities for the four choices are determined as followed:
P1 = f (b1X)
P2 = [1 - f (b1X)] f (b2X)
P3 = [1-f (b1X)] [1-f (b2X)] f (b3X)
P4 = [1-f (b1X)] [1-f (b2X)] [1-f (b3X)] f (b4X)
Where f represents the standard normal distribution function, and b1, b2, b3 and b4 are vectors of the model
parameters. The vector X contains the explanatory variables.
Table No.1 Definitions of Variables Used in Sequential Probit Estimation

VARIABLES
DEFINITION
Dependent Variables
P1 (Child goes to school only)
1 if child goes to school only, 0 otherwise
P2 (Child goes to school as well as to work) 1 if child goes to school and to work, 0 otherwise
P3 (Child does not go to school but to Work)
P4 (Child neither goes to school nor work)
1if child does not go to school but to work, 0 otherwise

1 if child neither goes to school nor to work, 0 otherwise
Explanatory Variables
Child Characteristics
BORD (Birth-order of child)
Birth-order of child in his/her brothers and sisters
CGEN (Child s gender)
1 if child is male, 0 otherwise
CAGE (Child s age)
Child s age in completed years
CAGESQ (Child s age squared)
Child s age squared
CEDU (Child s education)
Child s education in completed years
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Head of household Characteristics

HGEN (Head of household s gender)
1 if head of the household is male, 0 otherwise
HAGE (Head of household s age)
Head of household s age in completed years
HAGESQ (Head of household s age squared) Head of household s age squared

HEDU (Head of the household s education)
Head of the household s completed years of education
HEMP (Head of household s employment)
1 if Head of household is employed, 0 otherwise
HY (Head of household s income)
Head of household s income per month in Rupees

(000s)
Parent characteristics
FEDU (Father s education)
Father s education in completed years of education
FEMP (Father employment)
1 if father is employed, 0 otherwise
FY (Father s income)
Father s income per month in Rupees (000s)
MEDU (Mother s education)
Mother s completed years of education
MEMP (Mother s employment)
1 if mother is employed, 0 otherwise
MY (Mother s income)
Mother s income per month in Rupees (000s)

Household Characteristics
ASST (Household s ownership of assets)
1 if the household has ownership of assets, 0 otherwise
HHPCY (Household s per capita income)
Household per capita income per month in Rupees (00s)
HHSIZ (Household size)
Number of household members
HNUC (Household nuclear status)
1 if household is nuclear , 0 otherwise
CHILD04
Number of children (up to 4 years) in the household
CHILD515
Number of children (5-15 years) in the household
CHILD16
Number of siblings (16 years and above)
3. Results and Discussion

Summary statistics and sequential probit results are presented in table No.2 and 3 respectively.
3.1 First Stage Results
The first stage results show the probability for the children to go to school. There may be differences
in children s human capital formation in the way the parents interact with children depending on
children birth-order, gender and age, etc. Emerson and Souza (2008) particularly focused on the
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birth-order and child schooling and work. Our results revealed that higher birth-order among brothers
and sisters have higher probability to go to school. The possible explanation may be that: the elder
children (low birth-order) have more earning capacity as compared to younger ones which make
them drop out school and engage in work (see third stage results); the elder children (low birth-order)
have more direct and opportunity cost of schooling and in context of rural areas, there is lower
availability of school for elder children.
The attitude of parents may affect the investment on children. We have focused on gender of the
child, that may change the parents attitudes. We have found that in rural areas of Pakistan the boys
are 7.5 percent more likely to go to school as compared to girls (see also, Sawada and Lokshin, 2000
for rural Pakistan). There may be a number of possible explanations for this gender gap but
particularly in Pakistani community the girls are responsible for childcare and domestic
responsibilities. They are less likely to go to school and more likely to do home-care (see fourth stage
results).
The age of the child is an important factor determining his/her activity. Our results have shown
positive probability for age and negative for squared age. It implies that the probability for a child to
go to school increases at a decreasing rate. It is contradictory to the general perception that school
participation diminishs by increase in age. The possible explanation may be that in our sample the
minimum age of child is 5 years and at this age all children are not sent to school in rural areas, so as
the age increases the school participation increases. It means school enrolment is delayed. But once
the child is enrolled one-year increment in schooling of the child raises the probability for the child to
remain in school by 8.2 percent.
The characteristics of the head of the household are critical in determining the child s education. We
have found that children from the female-headed household are more likely to go to school. The
result corroborates the findings of Burki and Shahnaz (2001) but contradicts that of Maitra and Ray
(2002) for Pakistan and Ray (2004) for Asian countries, that is gender of the head of the households
does not matter in schooling decision of children.
The age of head of the household has shown a positive effect on child schooling. The older the head
of the household, the more likely it is for the child to attend school, less likely to combine school
with work (from second stage results) and less likely to do work (third stage results). It contradicts
the findings of Burki and Shahnaz (2001), i.e. life cycle of the head of household has no significant
effect on household choice for child s schooling and work. Our result explains the phenomenon that
older heads of households have prime-age (16+ years) children which contribute to household
income so school-age children are more likely to go to school. It is also supported by the coefficient
of variables child16 which explains that prime-age siblings in the household enhance the school
participation of children.
It is found that head of household s education plays a positive role in child s schooling. The
probability for the child to go to school increase by 7.3 percent as a result of one year increment of
schooling of head of household on average. It is corroborated by the third and fourth stage results
where head of household s education decreases the probability for the child to work and no-work and
to do home-care. The results indicate important complementarity between the education of the head
of household and child s schooling (see also Burki and Shahnaz, 2001). About the employment status
of head of household, our results have shown that children from unemployed head of the household
are less likely to go to school. The result highlights the fact that an unemployed head of household
cannot ensure himself against income fluctuations that results into supply of child labor from the
household.
Parent characteristics, specifically education and income, are important determinants of child
schooling and child labor. We have included the number of years of schooling of each parent, their
employment status, and income in our model. It is found that father s education and mother s
education both have positive impact on child s schooling. It provides strong evidence of interCOPY RIGHT 2011 Institute of Interdisciplinary Business Research
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generational persistence of illiteracy in families. It is further found that mother s education is more
important than father s for school participation of children. The mother s income has also shown a
positive effect on child s schooling. It means mother s income contribution to the household makes
the household less vulnerable.
The theoretical background for the inclusion of ownership of assets in the model rests on the
assumption that lack of assets is a source of poverty and inefficiency to get credit. It is found that if
the household has assets, children are more likely to go to school. It suggested that ownership of
assets makes the household stable against fluctuations in income through credit procurement or sale
of the assets.
The notion that rural children from households of low per-capita income are less likely to go to
school is supported by our results. It may further be corroborated by the variables of head of
household s income (Hy) and mother s income (My). To analyze the impact of family size and
family structure on the household decision for children schooling and child labor, we captured the
number of family members in the household as continuous variable along with a binary variable of
nuclear structure of household, i.e. whether the family is nuclear or combined. The household size as
a continuous variable has shown no significant impact on the schooling decision of the children while
children from combined families are more likely to go to school. (see also Cigno and Rosati, 2002 for
India). The explanation may be that in rural areas combined family system is prevalent and such
families manage the schooling of children easily by household economies of scale in education of
children.
It is found that household composition exerts an impact on child s schooling. The number of infants
negatively affects the child schooling and positively part-time work and home-care activity. The
number of school-age (5-15 years) children in the household shows a negative effect on child
schooling. It shows an intra-household resource competition (See also Ray, 2001:10). On the other
hand number of prime-age (16+ years) in the household depicted a positive impact on child
schooling. The possible explanation may be that these siblings support the family income and
enhance schooling of children.
3.2 Second Stage Results
The second stage estimation eliminates from the sample the children who go to school. The
probability to be determined for the remaining sample is that of combining school and work. It is
estimated that boys are more likely to combine school with work. The possible explanation may be
as: cultural values, domestic responsibilities for girls, and lower market opportunities for girls restrict
the part-time work by girls. Conversely, boys have more earning capacity and have high opportunity
cost of schooling so they join the labor market on part-time as well as on full-time (from third degree
results) more frequently than girls. The child s age matters in decision regarding the combination of
school and work. It is estimated that the probability for the child to combine school with work
increases with age. The negative age-squared effect suggested that combination of school and work
decreases in higher age and children enter full-time work. The current years of education of child
increases the probability to combine school and work. It shows that children have to work to support
their educational expenditures. As the education level increases the educational cost swells, so the
probability to combine schooling and work enhances.
The age of head of household has shown negative effect on combining school and work. The older is
the head of household, it is less likely that the child would combine school with work. The result is
corroborated by the first stage results, where the children from older head of households are more
likely to go to school. The income of head of household and father has shown negative impact on
combining school and work. Mother s employment and income have also shown negative impact.
These variables are conceptually interrelated. The explanation may be that they increase the financial
status of household which affects combination of school and work negatively. Similarly, ownership
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of assets has shown a negative impact on combining school and work. Here again the financial status
of the household decreases part-time work of the children.
The combined families have shown a complex impact on children activities, that is the children from
these families are more likely to go to school (first stage results), more likely to combine school and
work and more likely to work only (third stage results).
3.3 Third Stage Results
The third stage of the estimation looks only at the children who are not in school and not combining
school with work. It determines the probability that they will work. Educational level of the child has
shown a negative impact on work and home-care activity (fourth stage results). It may be postulated
that child schooling is an important variable to decrease child labor and home-care activity.
Education of the head of household has shown negative impact on child labor. It is corroborated by
first and fourth stage results where education of head of household boosts the school participation
and slides down the home-care activity. The employment status of the head of household has also
shown negative impact. The children from the employed head of household are less likely to work.
They are also corroborated by the first and fourth stage results. Similarly income of the head of
household has shown negative impact on child labor and that is also corroborated by first and second
stage results.
It is found that probability of child labor is negatively related to father s education and mother s
education (see also Ray, 2004). Furthermore, the father s income and mother s employment have
significant results for child labor. Both of them negatively affects the child labor.
We have estimated that children from the households having assets are less likely to work. It is in
line with the first stage results where children from such households are more likely to go to school.
Similarly, household per-capita income has shown negative impact on child labor and it is also in line
with first stage results (see also Edmonds 2006 for rural South Africa).
The income of the head of household, household assets and household per-capita income are interrelated economic factors determining the socio-economic status of the household and ultimately the
activity of the child.
Composition of household is an important determinant of child labor. The presence of school-age
children raises the child labor and presence of prime-age children shrinks the child labor. They are
corroborated by first stage results.
3.4 Fourth Stage Results
The fourth stage estimation of model includes all the remaining children, that is children not going to
school, not combining school with work and not working but doing home-care. The fourth stage
category is last but not the least in significance in the perspectives of children welfare. This kind of
work is by no means beneficial, as work for family may be requiring longer hours that keep them
away from school. The activity deprives them of their childhood and education.
It is found that girls are more likely to do home-care as compared to boys (see also, Barki and
Shahnaz, 2003 for Pakistan; Deb and Rosati, 2002 for Ghana and India). The possible explanation
may be that parents anticipate relatively higher returns from boys work and assign household work
activities to daughters also due to social norms.
It is found that home-care is negatively related to the age of the child at an increasing rate. The older
is child, the less likely, it is for him/her to do home-care and more likely to do work (third stage
results). As the age of the child increases, his/her capacity to earn increases and he/she is more likely
to be involved in work instead of home-care.
The mother s education and employment has shown negative impact on home-care activity of
children. Similarly assets of the household and household per-capita income have shown negative
impact on home-care activity. These results are corroborated with the previous results. Household
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size is the variable which has shown significant results only for home-care activity. The household
size increases the home-care activity. It may be due to surplus of labor supply from the household.
The composition of household is important for home-care activity. The number of infants and schoolage children increases the home-care activity but number of prime-age siblings declines it. The
results are corroborated by the previous results.
4. Conclusion
The results of the study lead to some important recommendations. The parents are gender sensitive
for their children activities. The awareness raising may be effective for gender bias elimination. In
the long-run, reducing poverty by employment opportunities for adults may contribute more than any
other interventions for the elimination of child labor. Ownership of assets in rural areas may also
result into elimination of child labor and increase in school participation. In the short-run provision
of educational subsidies may be another way to transfer resources to poor households.
The adult literacy is an important factor of children welfare. Adult literacy programs may be
proposed in rural areas. Similarly, the employment of mothers is a critical determinant of child labor
so increase in employment opportunities for poor female may decrease the child labor.
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References
Barki, A. A., & Shahnaz, L. (2001). The Implications of Household Level Factors for Children s
Time Use in Pakistan. Paper presented in International Conference on Child Labor in South
Asia, October 15-17, 2001 in New Delhi, India.
Bhalotra, S., & Heady, C. (2003). Child Farm Labor: The Wealth Paradox. World Bank Economic
Review, 17, 197 - 227.
Brown, D. K. (2001). Child Labor in Latin America: Policy and Evidence. Pacific Economics
Review, 7,11-19.
Cigno, A., & Rosati, F. C. (2002). Why Do Indian Children Work, and Is It Bad for Them. IZA
Discussion Paper 115, Institute of Study of Labor (IZA), Germany.
Deb, P., & Rosati, F. (2002). Determinants of Child Labor and School Attendance: The Role of
Household Unobservable. Research Paper, Understanding Children Work. Italy.
Edmonds, E. V. (2006). Child Labor and Schooling Response to Anticipated Income in South Africa.
Journal of Development Economics. 81,386-414.
FBS (1996). Child Labor Survey. Federal Bureau of Statistics (FBS). Government of Pakistan,
Islamabad.
Filho, I. E. C. (2008). Household Income as a Determinant of Child Labor and School Enrolment in
Brazil: Evidence from a Social Security Reform. IMF Working Paper No. 08/241.
International Monetary Fund, Washington, D.C.
Francavilla, F., & Lyon, S. (2002). Children Work in Cote dIvoire: An Overview. Research Paper,
Understanding Children Work, Italy.
Gustafsson-Wright, F., & Pyne, H. H. (2002). Gender Dimensions of Child Labor and Street
Children in Brazil. World Bank Policy Research Working Paper, World Bank, Washington,
D.C.
Hou, X. (2009). Wealth: Crucial but not Sufficient Evidence from Pakistan on Economic Growth,
Child Labor and Schooling. Policy Research Working Paper No. 4831. The World Bank,
Washington, D.C.
Maitra, P., & Ray, R. (2002). The Joint Estimation of Child Participation in Schooling and
Employment: Comparative Evidence from Three Continents. Oxford Development Studies,
30,41-62.
Ray, R. (2000). Child Labor, Child Schooling, and Their Interaction With Adult Labor: Empirical
Evidence for Peru and Pakistan. World Bank Economic Review. 14, 347-367.
Ray, R. (2001). Simultaneous analysis of Child Labor and Child Schooling: Comparative Evidence
from Nepal and Pakistan. Schools of Economics, University of Tasmania, Australia.
Ray, R. (2004). Child Labor in Asia: A Survey of the Principal Empirical Evidence in Selected Asian
Countries With Focus on Policy. Discussion Paper. School of Economics, University of
Tasmania.
Sawada, Y., & Lokshin, M. (2000). Household Schooling Decisions in Rural Pakistan. Study
conducted by Japanese Ministry of Education, The Foundation for Advance Studies on
International Development, and Matsushita International Foundation, Japan.
Self, S & Grabowski, R. (2009). Agricultural Technology and Child Labor: Evidence from India.
Agricultural Economics. 40, 67-78.
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Table 2: Summary Statistics (Mean and Standard Deviation) of Explanatory Variables

Children
Variables
Going to School
Children Combining Children Working Children Neither Going to

School with
Only
School nor Working
Work
Only
BORD
2.2516 (1.2145)
1.6923 (0.9281)
2.2682 (1.2653)
2.4074 (1.3939)
CGEN
0.5483 (0.49927)
0.5769 (0.5038)
0.4878 (0.5060)
0.4814 (0.5091)
CAGE
9.1871 (2.7605)
12.6153 (2.4670)
10.6829 (2.6780)
9.5555 (3.6514)
CAGESQ
91.97 (52.6576)
165.00 (56.8914)
121.1219 (53.7369)
104.1481 (72.9012)
CEDU
3.8322 (2.6032)
7.2307 (2.3376)
0.9024 (2.0347)
0.6296 (1.8218)
Head of Household Characteristics

HGEN
0.9461 (0.7921)
0.9276 (0.0437)
0.9844 (0.0732)
0.9784 (0.9138)
HAGE
41.3871 (6.5756)
46.3846 (9.8145)
43.8780 (6.3960)
42.9629 (9.2132)
HAGESQ
1755.85 (554.2711) 2244.15 (936.0746) 1965.19 (567.5284)
1927.55 (781.6268)
HEDU
9.9354 (5.3823)
4.1923 (4.0597)
0.9268 (1.6338)
1.0370 (2.3118)
HEMP
0.9161 (0.2780)
0.8700 (0.1320)
0.5122 (0.5060)
0.7474 (0.4465)
HY
7.1622 (7560.80)
2.4038 (1275.76)
1.2829 (591.143)
1.5333 (1080.95)
Parent Characteristics
FEDU
9.9996 (5.4276)
4.1923 (4.0597)
0.9268 (1.6338)
1.0370 (2.3118)
FEMP
0.9100 (0.27421)
0.6100 (0.3856)
0.5122 (0.5060)
0.7407 (0.4465)
FY
7.1622 (7560.80)
2.4038 (1275.76)
1.2829 (0591.14)
1.5333 (1080.95)
MEDU
9.2903 (6.2636)
2.1153 (3.4447)
0.1707 (1.0932)
-0.6666 (2.1483)
MEMP
0.8290 (0.2576)
0.8846 (0.3258)
0.5122 (0.5060)
0.6666 (0.4803)
MY
4.0158 (4605.72)
1.2000 (1025.67)
6.5853 (693.17)
6.7777 (605.31)
ASST
0.9161 (0.2780)
0.7692 (0.4296)
0.5853 (0.4987)
0.4814 (0.5091)
HHPCY
19.8952 (2713.04)
5.2790 (213.98)
2.9949 (180.23)
3.7109 (179.27)
HHSIZ
6.5290 (1.7067)
7.6923 (1.1922)
7.2739 (1.7857)
6.8518 (2.2988)
HHNUC
0.3677 (0.4837)
0.03846 (0.1961)
0.2439 (0.4889)
0.3333 (0.5547)
CHILD04
0.6000 (0.7898)
0.2083 (0.4148)
0.3157 (0.6710)
1.1315 (0.8437)
CHILD515
3.1822 (1.1390)
3.5000 (1.5036)
2.2631 (0.9334)
1.7368 (1.2010)
CHILD16
0.7294 (0.9804)
1.0416 (1.1220)
0.8421 (0.6882)
0.7105 (0.8976)
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Table No.3 Sequential Probit Results for Time Utilization of Rural Children (5-15 Years)
Variables
Constant
First Stage:
Second Stage:
Third Stage:
Fourth Stage:
P 1=
P 2=
P 3=
P 4=
Probability
Probability
Probability
Probability
that the Child
that the Child
that the Child
that the Child
Goes to School
Goes to School
does not go to
neither go to
Only
as well as
School but
School nor
Work
Work
Work
0.8189 (1.6416)
-3.2210 (-2.0203)
1.4367 (2.7386)
-0.7898 (-1.2396)
BORD
0.0345 (1.2924)**
0.0335 (1.0539)
-0.1236 (-0.441)**
0.0049 (0.1000)
CGEN
0.0753 (1.7103)*
0.0310 (2.3501)**
0.0043 (2.06141)*
-0.014(-1.5900)**
CAGE
0.1233 (2.5239)*
0.0417 (1.3782)*
0.0988 (1.3527)**
-0.097(-1.3531)**
CAGESQ
-0.0098 (-3.2080)*
-0.032 (-1.9147)**
-0.0041 (-1.0482)
0.0054 (1.5341)**
CEDU
0.0820 (2.2820)*
0.0126 (3.5327)*
-0.029 (-1.5569)**
-0.1193 (-2.764)*
Head of Household Characteristics

HGEN
-0.031 (-1.3628)**
-0.0081 (-1.8237)*
0.4616 (0.9778)
0.1429 (0.7324)
HAGE
0.0117 (1.4347)**
-0.0459 (-1.7852)*
0.1022 (1.8448)*
-0.1467 (-2.1533)*
HAGESQ
-0.0010 (-0.8813)
0.0004 (1.8358)*
-0.0012 (-0.9293)
0.0099 (2.0754)*
HEDU
0.0736 (1.8230)*
-0.2563 (-0.4562)
-0.211 (-1.6360)** -0.156 (-1.1614)**
HEMP
0.0276 (1.7612)*
-10.3429 (-0.5197)
-0.122(-1.1556)**
HY
0.0130 (2.1941)*
-0.0823 (-1.3623)** -0.0771 (-1.2901)**
-0.1714 (-2.0091)*
0.0003 (1.0603)
Parent Characteristics
FEDU
0.0953 (2.2569)*
0.2555 (0.4548)
-0.0829 (-1.6164)**
0.3606 (0.4736)
FEMP
0.0076 (0.3843)
0.0029 (0.9217)
0.0671 (0.4166)
0.1637 (0.3496)
FY
0.0130 (0.1940)
-0.074 (-1.6412)**
-0.0372 (-1.4217)**
0.0261 (0.2437)
MEDU
0.1197 (2.1148)*
0.0062 (0.1274)
-0.0250 (-1.9526)* -0.0325 (-1.3139)*
MEMP
0.0001 (0.1664)
-0.0800 (-1.6640)*
-0.1172 (-1.7513)* -0.1528(-1.3441)**
MY
0.0324 (2.1372)*
-0.026(-1.2863)**
0.0000 (0.1524)
-0.0001 (-0.9246)
ASST
0.0720 (2.2695)*
-0.0833 (-2.1528)*
-0.0133(-1.1663)** -0.1156 (-1.1812)*
HHPCY
0.0010 (2.6271)*
-0.0096 (-1.8572)*
-0.0428 (-1.9323)* -0.0018 (-1.4483)*
HHSIZ
0.0194 (1.1007)
-0.0053 (-0.6224)
0.0181 (0.1559)
0.4107 (1.6845)*
HHNUC
-0.0549 (-1.2952)** -0.0323 (-1.3128)**
-0.0198 (1.3359)*
0.2441 (1.1543)
CHILD04
-0.1434 (-1.3520)**
0.1741 (2.0870)*
-32.2610 (-0.4484)
0.1676 (2.8153)*
CHILD515
-0.0025 (-3.6316)*
0.0246 (2.0163)*
0.0422 (1.9716)*
0.4486 (2.4298)*
CHILD16
0.3484 (1.5517)**
1.5337 (0.9076)
Log of Likelihood
Function
-480.11
-86.21
-0.1070 (-1.2980)* -0.1905 (-2.4665)*
-320
-344.6
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Number of
Observation
673
97
537
710
R-Squared
0.7645
0.6597
0.6970
0.7227
0.8764
0.8475
0.8083
0.9243
Percent Correct
Prediction
* Indicates significant at 5 percent level and ** indicates significant at 10 percent level.
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Survey Relationship between Organizational Justice

and Organizational Citizenship Behavior (OCB) of food
product firms in Kurdestan Province
Listed in ULRICH S
Freyedon Ahmadi
Assistant Professor, Management Department , Sanandaj Payam-E-Noor University
Seyed Ali Akbar Ahmadi
Associate Professor, Management Department, Tehran Payam-E-Noor University
Naser Tavreh
PHD student , Management Department , Payam-E-Noor University
Abstract
The purpose of this study are to analyze relationship between organizational justice and
organizational citizenship behavior (OCB) of food product firms in kurdestan province. For
achieved the purpose mention above were been selected 73 employer in kurdestan province
productive food firms. In this study were used 4 component of organizational justice such as
Distributive Justice , Interpersonal justice , Procedural Justice and Informational Justice , also
for deification of organizational citizenship behavior have been used of organ dimension such as
Altruism , Courtesy , Conscientiousness , Sportsmanship and Civic Virtue. Results indicated
there are meaningful relationship between dimension of OJ with OCB except of informational
justice .
Keywords: Survey relationship between organizational justice and organizational citizenship
behavior (OCB) of food product firms in kurdestan province
1. Introduction
Employees in any organization are important because their attitudes and behaviors play a vital
role in the quality of service provided by them. Customer satisfaction and customers' perceptions
of service quality are significantly influenced by the attitudes and behaviors of service
employees (Bitner, Booms, & Tetreault, 1990; Schneider & Bowen, 1993). The interaction
between employees and manager in service delivery is essential to the satisfaction or
dissatisfaction of customers (Bitner, Booms, & Tetreault, 1990). In this regard, employees are
primarily responsible for providing a sustainable competitive advantage for the organization.
Therefore, success of an organization depends on managing and retaining employees (Woods,
1992). Employee turnover is particularly important in the private organizations because, turnover
is critical and costly (Bonn & Forbringer, 1992). Woods and MacCauley (1988) describe both
the tangible and intangible costs of the turnover decision. One of the most critical intangible
costs is the loss of employee morale for those employees who choose to remain with the
organization. This result in the poor morale of employees who may be overworked, and can, in
turn, effect the level of service provided. Therefore, it is imperative that management understand
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the specific dimensions that help shape employees' attitudes toward their jobs (Rogers, Clow, &
Kash, 1994).
When employees react to the way they are treated at work, their motivation to respond cannot be
understood adequately without taking into account two separate notions of fairness: distributive
justice and procedural justice (Folger & Konovsky, 1989; Greenberg, 1986). Adams (1965)
conceptualized fairness by stating that employees determine whether they have been treated
fairly at work by comparing their own payoff ratio of outcomes (such as pay or status) to inputs
(such as effort or time) to the ratio of their co-workers. This is called distributive justice, and it
presents employees' perceptions about the fairness of managerial decisions relative to the
distribution of outcomes such as pay, promotions, etc (Folger & Konovsky, 1989). In contrast,
procedural justice focuses on the fairness of the manner in which the decision-making process is
conducted (Folger & Konovsky, 1989). In other words, the focus shifts from what was decided to
how the decision was made (Cropanzano & Folger, 1991).
Organizational justice [based on equity theory] and organizational citizenship behavior [OCB]
have finally come into an international business and cross-cultural research prospective. The
investigation of the two conceptual frameworks has unraveled over the years. From Adams'
[1965] equity theory evolves the concept of organizational justice and from Bateman and Organ
[1983] evolved the concept of organizational citizenship behavior. Multinational corporations
continue to pursue global diversity. This new trend
places a demand on research to aid business in creating new competitive advantages. in this
study the impact of OCB on develop of OJ are surveyed.
2. Literature review
2.1 Organizational citizenship behavior
Organizational Citizenship Behaviors (OCB) are discretionary behaviors on the part of the
worker, which are neither expected nor required, and therefore cannot be formally rewarded or
punished for the presence of lack of, by the organization. Schnake (1991) gives three reasons
why OCB are not affected by organizational influences: (1) OCB are subtle and therefore hard to
objectively rate, which makes for difficult inclusion in appraisals; (2) Some forms of OCB may
pull people away from their own work to assist another; and (3) Because OCB cannot be
contractually required (if they were required behaviors, they would be contractual behaviors, not
OCB), the organization cannot punish employees for not performing them. For this reason, OCB
is commonly defined in terms of social exchange (Moorman, 1991). Moorman describes the
difference between economical and social exchange: Because social exchange exists outside of
strict contracts, the exchange tends toward ambiguity, allowing for discretionary, prosaically acts
by the employee . Researchers have identified many different types of OCB, but these are
currently consolidated into five dimensions: Altruism, Courtesy, Conscientiousness,
Sportsmanship, and Civic Virtue.
2.1.1 Dimensions of OCB
i. Altruism :The first dimension is Altruism (also referred to as helpful behaviors, pro-social
behaviors, and neighborliness). This dimension is associated with behaviors that either directly
or indirectly help another worker with a present work-related problem. It is easy to see the
benefits for this dimension of OCB: workers helping each other instead of distracting supervisors
from their jobs. Also, the workers may benefit by not showing their supervisor how often they
need help, which may come up on their performance appraisal.
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ii. Courtesy : The second OCB dimension, which is closely related to altruism, but distinctly
different, is Courtesy. It refers to helpful behaviors that prevent a work related problem from
occurring or help to lessen the severity of a foreseen problem. Behaviors such as advance
notices, reminders, and consultation fall under this dimension.
iii. Conscientiousness : The third dimension is Conscientiousness, which includes such behaviors
as being punctual; maintaining a better-than-average attendance record (i.e., coming to work
when you re sick or during sever weather conditions); and following an organization s rules,
regulations, and procedures.
iv. Sportsmanship :The fourth dimension is Sportsmanship; this is the only dimension that
identifies a lack of behaviors. Organ (1988) described it as tolerating less-than-desirable
situations without complaining or making federal cases out of small potatoes . This dimension
might just be a supervisor s most favorite: a lack of petty grievances.
v. Civic Virtue : In the same work, Organ defined the fifth dimension, Civic Virtue, as the
responsible participation in the political life of the organization An example of such behaviors
is staying up-to-date with important issues of the organization.
Organ (1988) makes the note that the five dimensions of OCB may not all be present when one is
found. The people whom we think of as most conscientious are not always the most altruistic,
and vice versa; and the conditions that evoke altruism from us are not always the conditions that
inspire us to conscientiousness .
2.2 Organizational justice
Equity theory in its basic form predicts that individuals are motivated by the perception of
inequity [Adams 1965]. The theory states that men and women are in a continual and never
ending state of social comparison with a referent group of individual. Adam's traditional theory
assumes that responses to injustices are more dynamic in form and entail a need to reduce that
level of distress or dissonance created by the inequitable state. Individuals constantly measure
their perceived "inputs" and their "outcomes" as a ratio in comparison to a referent individual.
Adams defines the "inputs" in social exchange as qualities and characteristics that a person
possesses such as age, seniority, social status, education, effort, ability or skill, etc. The
"outcomes" are defined as items or privileges received in social exchange such as rewards,
money, increased status, authority, or enjoyable work/assignments/duties. It is crucial to note that
inequity produces two different social behaviors. Here is a simplistic example. If an individual
perceives inequity because his or her "inputs" far exceed his or her "outcomes" or vice-versa, one
may expect that anger or guilt will follow.
Blau [1964 p.88-89] mentioned that this notion of social exchange is at work in just about every
facet of life. One can see this as the "keeping up with the Jones' syndrome" in neighborhoods or
in people being jealous of others because they feel inequitable in some respect. The basic belief
in equity theory is that when someone is in the inequity stage, he or she will then be moved or
motivated to do something that will help the person regain a perception of equity in the situation.
When equity is present, the belief is that the person is at peace with the social exchange and is
not moved to any action other then contentment. Greenburg [1990] found that employee pay
reduction without an explanation as to why the cut in pay occurred moved [motivated]
employees to ratify the injustice [inequity] by raising the levels of employee-organizational theft.
In another article, Greenburg [1979] studied people who subscribed with high degree to "The
Protestant Ethic". By controlling this variable, Greenburg believed that the "input" and
"outcome" ratio would not match the norm of equity theory. He found that in fact, people did not
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conform to the norm under such conditions. This finding is particularly interesting because one
could posit that the religion in a border culture or the Mexican culture might affect equity as
perceived by the samples.
Huseman et al. [1987] introduced a new perspective to equity theory with the notion of equity as
a question of sensitivity. In the mid-eighties, studies involving issues of equity and
organizational justice lead to conflicting findings. In order to address this issue, Huseman et al.
developed the construct of equity sensitivity. One can see this as a logical step forward from the
type of research Greenburg [1979] conducted with "The Protestant Ethic", where he found that
protestants were not sensitive to the normal notion of equity theory. Huseman et al. [1987]
hypothesized that individuals come to terms with equity in one of three ways. The three types of
individuals are equity sensitive, benevolent, and
entitled. These three types of people deal with equity in different manners.
First, equity sensitive individuals follow the traditional equity theory model of behavior and
understand equity in the traditional inputs/outcome ratio with a referent group. Either form of
inequity thus motivates equity sensitive individuals in that they are moved to equalize the social
exchange. Regardless if equity sensitive individual's inputs exceed outcomes or vice-versa, they
are easily motivated to act. Second, benevolent individuals are those that sense equity only when
their inputs exceed their outcomes as compares to the referent other. One can easily understand
these individuals as people who regardless of all their efforts and other inputs seem to go
unrecognized or unappreciated. The third and final category discussed by Huseman et al. was
entitled individuals. The entitled individuals are those who sense equity only when their
outcomes surpass their inputs. The classic example of this individual is that of someone who
seems to be rewarded more than what is deserved. In reference to the border culture and the
Mexican culture, one may ask whether this area contains a higher percentage of benevolent
individuals that may see the system under which they live as "just the way things are". Thus,
benevolent individuals may simply accept their lot in life and continually produce far more
inputs than the received outcomes.
Greenburg [1987] developed a taxonomy of equity and organizational justice theories that fit into
two dimensions' reactive--proactive dimension and a process content dimension. The
taxonomy helped give researchers an identification of where the research was and where
research needs to go in the future. The classification of a reactive theory, according to
Greenburg, focused on people's attempts to avoid or escape perceived states of unfairness. These
theories examine individual's reactions to injustices. On the other hand, Greenburg mentions that
the classification of proactive theories focuses on behaviors designed to promote justice, thus
avoiding a future injustice. The theories belonging to the proactive dimension examine
individuals who are continuously attempting to create just states. The second dimension
proposed by Greenburg was process--content dimension which was developed from the area of
legal research, which distinguishes between the way that verdicts are derived and what those
verdicts are. A process approach, according to Greenburg, focuses on how various outcomes in
the organization are determined. These theories focus on procedures used to make decisions and
the implementation of those organizational decisions. By contrast, a content approach concerns
itself with articles that are concerned with the fairness of the results from the distribution of
outcomes in an organization.
Greenburg reemphasized Adam's theory of inequity in that he stated that over-paid workers
would feel guilty about their outcomes exceeding their inputs and that underpaid workers would
feel angry because their inputs far outweighed their outcomes. He also stated that according to
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equity theory, underpaid workers should be less productive and less satisfied than equitably paid
workers and that overpaid workers should be more productive and less satisfied than equitably
paid workers. General support has been found for these predictions over a large variety of
experimental settings.
Thibaut and Walker [1975] began to research procedural justice in the 1970s. Deutsch [1975]
and Leventhal [1976] were among the first to demonstrate that procedural justice could be
viewed as an extension to equity theory in that it researched the domain of the allocation process.
Folger's [1977] research shifted the focus from how employees react to inequitable outcomes to
how they react to unfair procedures. By changing the focus, Folger demonstrated that giving the
employees an opportunity to have a voice in the decisions affecting them enhanced their
reactions to the outcomes of the decision and thus avoided an inequitable state. Bies and Moag
[1986] along with Tyler and Bias [1990] were among the first to begin the research of
interactional justice, which is seen as
a component of procedural justice.
The literature has developed four constructs that make up organizational justice.
Figure 1 : Model of four different forms of organizational Justice
Distributive
Justice
Interpersonal
Justice
Organizational
Justice
Informational
Justice
Procedural
Justice
Distributive Justice is the form of organizational justice that focuses on people s beliefs that they
have received fair amount of valued-work related outcomes. Distributive justice affects worker s
feelings of satisfaction with their work outcomes, such as pay and job assignments.
Procedural Justice refers to people s perception of the fairness of the outcomes they receive.
Unfair procedures not only makes people dissatisfied with their outcomes (as in the case of
distributive justice) but also leads them to reject the entire system as unfair.
Interpersonal Justice refers to people s perceptions of the fairness of the matter in which they are
treated. Impersonal and disrespectful behavior shown by boss causes the demonization in
subordinate.
Informational Justice is people s perception of the fairness of the information used as the basis
for making decision. Informational justice prompts feelings of being valued by others in an
organization.
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3. OCB and OJ
Some empirical support exists for the influence of perceptions of fairness on OCB. Dittrich &
Carroll (1979) and Scholl, Cooper,and McKenna (1987) found that perceptions of job equity and
pay equity were significantly correlated with extra role behavior . Konovsky & Folger (1991) s
study showed presented preliminary evidence for a relationship between procedural justice and
altruism. According to Robert H. Moorman (1991), fairness perceptions, particularly those
derived from interactional justice , are instrumental in predicting the occurrence of citizenship.
Williams S, Pitre R, Zainuba M.(2002) found that in a sample of 114 employees from various
industries, organizations, and positions, the likelihood of organizational citizenship behaviors
(OCB) increased when employee perceptions of fair treatment by supervisors became more
positive.
4. Theoretical Framework
Based on the review of the extant literature and the discussions that followed, a theoretical model
proposed for empirical testing is provided in figure 2.
Figure 2: Relationship between OJ and OCB dimensions
Distributive
Justice
Altruism
Interpersonal
justice
Courtesy
OJ
OC
Conscientiousness
Procedural
Justice
Sportsmanship
Informational
Justice
Civic Virtue
5. Hypotheses of research
H1: There are meaningful relationship between of Distributive Justice
citizenship behavior in food product firms
H2: There are meaningful relationship between of Interpersonal justice
H3: There are meaningful relationship between of Procedural Justice
citizenship behavior in food product
H4: There are meaningful relationship between of Informational Justice
and organizational
and organizational
and organizational
and organizational
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6. Research Method
6.1 Participants
Seventy three employees of food product firms in kurdestan province (one Iranian province)
participated in current study. This amount of employees are determined by the below formula:
Pqt 2 1.962 .05 0.5
n0
96.04
d2
(0.1)2
n
n0
n 1
1 0
N
96.04
95.04
1
300
73
The participants ranged in age from 30 to 47. There were 45 males and 28 females that
participated in the study. Education ranged from high school through graduate school, with the
majority of the participants holding Associates or Bachelors degrees.
6.2 Data Collection Instrument
The scale used to measure Organizational Citizenship Behavior has twenty seven questions. The
survey uses a Likert scale with anchors of one-almost never and five almost always. The first
thirteen questions are based on a scale developed by Farh and his colleagues. These items were
developed in China and are similar to American scales measuring OCB. The items cover three
subscales of active positive contributions; Civic Virtue, Altruism, and Conscientiousness. The
remaining questions focus on Sportsmanship, and Courtesy.
The scale used to measure Organizational Justice has 12 questions to describe four dimensions of
OJ: Distributive Justice, Procedural Justice, Interpersonal Justice, and Informational Justice are
based on Colquitt, 2001 study.
7. Analysis and Results
7.1 Reliability
Reliability estimates were assessed by calculating Cronbach alpha values for each of the
variable used in the study. Alpha estimates varied from a low of 0.7014 for Informational Justice
to a high of 0.8465 for Distributive Justice . Since reliability values between 0.60 and 0.80 are
considered adequate for most research purpose (Nunnally, 1967), the measurement scales used in
this study can be considered relatively reliable.
7.2 Descriptive Statistics
Table 1 presents the descriptive statistics for the OCB & OJ variables. The mean for Distributive
Justice is 2.2 , for Interpersonal justice is 2.78 , for Interpersonal justice is 3.11 and for
Procedural Justice is 2.87 as well as for OJ is 2.94 . Therefore Procedural Justice have greatest
mean among dimension of organizational justice.
The mean for Altruism in food product firms is 3.24 , Courtesy is 3.47 , Conscientiousness 3.01 ,
Sportsmanship is 3.11 and Civic Virtue is 2.74 as well as for OCB is 3.08 .Therefore Courtesy
have greatest mean among dimension of organizational citizenship behavior.
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Table1. Descriptive statistics of selected variables

Variable Description
Variable name
Distributive Justice
DJ
Interpersonal justice
IJ
Procedural Justice
PJ
Informational Justice
IJ
Altruism
Altruism
Courtesy
Courtesy
Conscientiousness Conscientiousness
Sportsmanship
Sportsmanship
Civic Virtue
Civic Virtue
OCB
OCB
OJ
OJ
Mean
3.02
2.78
3.11
2.87
3.24
3.47
3.01
3.11
2.74
3.08
2.94
Standard Deviation
0.124
0.241
0.211
0.147
0.175
0.154
0.149
0.137
0.149
0.147
0.18
7.3 Correlation Analysis

The output given in Table 2 below depicts that there is a significant positive relationship between
OCB and OJ at the 0.05 significance level. This means that OCB is positively associated with
OJ. As such when the OJ increases, it is expected that Altruism, Courtesy, Conscientiousness and
Sportsmanship will also increase.
The result shows that correlation between dimension of OJ except informational justice and
organizational citizenship are meaningful.
Based on Table 2 all of Hypothesis except fourth Hypotheses are accepted
Table 2. Pearson Moment Correlations
Altruism
Courtesy
Conscientiousness
Sportsmanship
Civic Virtue
OCB
DJ
0.564*
0.442*
0.385*
0.293*
0.278*
0.350*
IJ
0.308*
0.425*
0.267*
0.287*
0.311*
0.323*
PJ
IJ
0.437*
0.290*
0.184
0.241*
0.178
0.223*
0.347*
0.248*
0.117
0.198
0.124
0.172
OJ
0.337*
0.290*
0.221*
0.211*
0.198
0.230*
8. Conclusion
This study shows relationship between organizational citizenship behavior and organizational
justice.The results of this study indicate that there are meaningful correlation between some
components of organizational citizenship behavior and dimension of organizational justice. In
this correlation the role of distributed Justice is very important. But The main question is Why is
there positive correlation between Organizational Justice and Organizational Citizenship
Behavior? Trust appears to be an important mediating variable (Konovsky and Pugh, 1994).
Organizational justice enhances employee trust, which in turn stimulates the display of
citizenship behavior.
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The more perception of fairness people receive, the more positive mood people will have.
According to Steve Williams, Richard Pitre & Mohamed Zainuba (2000), the likelihood of
performing specific OCB activities increased when respondents were placed in a more positive
mood. So, mood is another possible factor, which affects the relationship between OCB and OJ.
According to Organ s (1988b, 1990) study, if treated fairly, the employee may be less likely to
believe that citizenship behavior outside his/her prescribed role is inappropriate.
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References
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Cropanzano, R., & Folger, R. (1991). Procedural justice and worker motivation. In R.M.Steers &
L.W. Porter (Eds.), Motivation and work behavior (2nd ed., pp. 131-143).New York:
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Folger, R., & Cropanzano, R. (1998). Organizational Justice and Human Resources
Management. Thousand Oaks, London: Sage Publications.
Folger, R., & Konovsky, M. A. (1989). Effects of procedural and distributive justice on reactions
to pay raise decisions. Academy of Management Journal, 32,(1), 115-130.
Greenberg, J. (1990a). Organizational justice: Yesterday, today, and tomorrow. Journal of
Management, 16,(2), 399-432.
Greenberg, J. (1990c). Looking fair vs. being fair. In B. M. Staw & L. L. Cummings (Eds.),
Research in Organizational Behavior. Greenwich, CT: JAI Press.
Konovsky, M.A., Folger, R., & Cropanzano, R. (1987). Relative effects of procedural and
distributive justice on employee attitudes. Representative Research in Social Psychology,
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Moorman, R. H. (1991). Relationship between organizational justice and organizational
citizenship behaviors: Do fairness perceptions influence employee citizenship? Journal of
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Schneider, B., & Bowen, D. E. (1993). The service organization: Human resources management
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Thibaut, J. & Walker, L. (1975). Procedural justice: A psychological analysis.Hillsdale, NJ:
Lawrence Erlbaum
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Analyzing the factors affecting the demand for
Insurance in Saudi Arabia
VOL 2, N O 10
Listed in ULRICH S
Dr. Zaid Ahmad Ansari

Assistant professor (Marketing), Department of Marketing, College of Business Rabigh, King Abdul Aziz University, Saudi Arabia.
Abstract
This paper attempts to find out the factors affecting the demand for insurance customers in Saudi
Arabia. The paper identifies the motivating factors for the existing users of insurance policies
and the demotivating factors for non users of insurance. The paper also attempts to find out the
problems faced by the executives of the insurance company in promoting insurance in Saudi
Arabia. The study is based on primary data collected from 500 users of insurance, 400 non users
of insurance and 80 insurance executives through a structured questionnaire in Jeddah city of
Saudi Arabia. The collected data was analyzed using simple statistical techniques such as
percentages, mean, Chi-Square tests with the help of Statistical Package for Social Sciences
(SPSS). The results of the study shows that the main motivating factor for purchasing insurance
is legal factor and the Saudi insurance market is presently being driven by compulsory lines of
insurance business such as motor insurance and health insurance for expatriates. Islamic
principles are the main demotivators for purchasing the insurance policies. The providers of
insurance in Saudi Arabia shall focus on educating the people that the insurance in Saudi Arabia
is operating on Islamic Principles.
Key words: Insurance, Islamic insurance, Sharia h.
1. Introduction
Insurance industry supply individuals and businesses with coverage against specified
contingencies, by redistributing losses among the pool of policyholders. Presently it forms an
integral part of the global financial market, with insurance companies being significant
institutional investors. In recent decades, the insurance sector has grown in economic
importance. This growth can be attributed to a number of factors including, but not
exclusively: i. Rising income and demand for insurance, ii. Rising insurance sector
employment, and iii. Increasing financial intermediary services for policyholders, particularly
in the pension business (Ward and Zurbruegg, 2002).
The link between the growth of an economy and growth of an insurance industry is well
established. The role of insurance market development in economic growth is provided by
Outreville (1990) and Ward and Zurbruegg (2002). These studies suggest that insurance
industry through risk transfer, financial intermediation, and employment can generate positive
externalities and economic growth.
With the established relation between the financial development and economic growth
it is appropriate to identify the factors that encourage the demand for these financial services in
general and demand for insurance in particular. Empirical research on insurance markets by
Browne et al. (2000), Ward and Zurbruegg (2002), Beck and Webb (2003), and Esho et al.
(2004) have shown that the level of insurance demand within an economy can be influenced by
a number of particular variables, including economic, legal, political, and social factors.
In this research the researcher investigates the reason which motivates the people of
Saudi Arabia to buy insurance and the factor that resists them in buying insurance. It also
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investigates the problems faced by the executives in marketing insurance. In the following
section the researcher presents the current situation of the Saudi insurance industry, followed
the review of the existing related literature, conceptual framework of the study, methodology
and data collection, results and discussions, and conclusions and practical implications.
1.1 Present Scenario of Insurance Industry in Saudi Arabia
The insurance industry in Saudi Arabia was liberalized in the year 2004. This newly
liberalized industry has been growing fast, the growth rate was 27% in 2008, and 33.8% in
2009 (The Saudi Insurance Market Report, 2009). This high growth was mainly driven by
compulsory lines of business i.e., Motor Insurance and Health Insurance for expatriates. Health
insurance gross written premiums represented 50% of the insurance market with remarkable
growth rate of 51.8% in 2009. General insurance represented 43% of the total insurance market
with an average growth rate of 14.4% and Protection and savings insurance market was 7%
percent establishing a remarkable high growth rate of 68.9% in 2009. It is note worthy that
motor insurance within the category of general insurance represents 21% of the total insurance
market of Saudi Arabia. Thus the motor insurance and health insurance business in Saudi
Arabia together makes more than 70% of the total insurance market (The Saudi Insurance
Market Report, 2009).
Insurance penetration defined as Gross Written Premiums (GWP) divided by the total
Gross Domestic Product (GDP) in 2009 increased to 1.06% up from 0.62% in 2008,
representing a 69.9% increase. Insurance density defined as Gross Written Premiums per capita
increased from SR440 per capita in 2008 to SR 576 per Capita representing 30.8% increase
(The Saudi Insurance Market Report, 2009). Despite the high growth in insurance penetration,
the total penetration level is incomparably low to the developed countries such as US and
Japan. One of the most unpopular lines of business for Insurance in Saudi Arabia is Protection
and Savings (P&S). Interestingly this segment has shown high growth rate of 81% in 2008 and
approximately 69% in 2009 (The Saudi Insurance Market Report, 2009). However, the
researchers hypothesize that this remarkable growth in Protection and Savings may have
happened due to the customers change in perception about the insurance by using compulsory
insurance such as motor and health insurance. Thus they stepped out of these compulsory
insurance to purchase Protection and Savings, which may further extend to other personal lines
of insurance.
Since 2004 the Saudi insurance industry has been growing on an average of more than
30% annually (The Saudi Insurance Market Report, 2009). But 71% of the total GWP is
contributed by compulsory lines of insurance only. However after six years of liberalization it is
considered appropriate to find out the factors that usually the customers consider purchasing
insurance to further standardize the insurance industry. The industry is also ready for second
generation reforms, prior to it, this study is important to establish the motivating factors and
demotivating factors affecting the demand for insurance. This study is also important because the
market potential will saturate soon with the coverage of compulsory lines of business i.e., Motor
and Health Insurance. Thus, to promote other lines of insurance business it is important to know
the mind set of public about insurance and the factors that affect their decision to purchase
insurance or not to purchase insurance. The insurance companies can target the public with
appropriate strategy ones their mind set is understood, and the motivators and demotivators
identified.
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The role of insurance market development in economic growth is well established
(Outreville, 1990; Ward and Zurbruegg, 2002). These studies suggest that insurance industry
through risk transfer, financial intermediation, and employment, generates economic growth.
Other studies further shows link between financial growth and economic growth (Levine and
Zervos 1998, Levine 1999, Levine et. al. 2000, King and Levine 1993a, b, and Bech et al., 2000).
The findings of these studies show that well functioning financial institutions improve the
efficiency of capital allocation, encourage savings, and develop capital formation, ultimately
leading to a more productive, growing economy.
Early studies highlighted that the demand for life insurance, as a long term consumption
decision, is positively related to anticipated income, permanent rather than current income
(Yaari, 1965; Hakansson, 1969; Fortune, 1973; Fisher, 1973; Lewis, 1989). Support between
income and life insurance consumption has been confirmed (Beenstock et al., 1986; Truett and
Truett, 1990; Browne and Kim, 1993; Outreville, 1996).
Beenstock et al., 1988, indicated a positive relationship exists between national income in
industrialized countries and spending on property - liability insurance. Browne et al., 2000
analyzed motor vehicle and liability insurance in OECD countries and found that a positive and
statistically significant relationship exists between premium density and GNP per capita.
(La Porta et al., 1997, 2000; and Levine, 1998, 1999) show that legal environments which
provide good investor protection tend to encourage a higher degree of financial intermediation,
as well as economic growth. Levine et al., (2000) highlight that countries with better creditor
rights, more rigorous law enforcement and better accounting information tend to have more
highly developed financial intermediaries. This is particularly important to the insurance industry
where consumers can be at risk of opportunistic behavior by insurance companies. For example,
this could be including companies refusing to pay claims, or alternatively reducing the
investment return due on a policy.
Insurance can also be seen as a product that is valued subjectively by its consumer. In
fact Hofsted (1995) points out that the level of insurance within an economy depends on the
national culture and the willingness of individuals to use insurance as a means of dealing with
risk. It is not surprising that Douglas and Wildavsky (1982) show that the demand for life
insurance in a country may be affected by the unique culture of the country to the extent that the
culture affects the degree of risk aversion. Using education and the uncertainty avoidance index
to approximate the level of risk aversion Esho et al. (2004) confirm that risk aversion has a
significant impact on demand for property - casualty insurance. Outreville (1996) observes
similar findings emphasizing that education promotes an understanding of risk and hence aids
insurance demand. However, in the case of property casualty insurance, Esho et al. (2004)
highlight that the demand for insurance is in the main unaffected by cultural factors. This is in
line with Park et al. (2002), who fail to identify that national culture has a significant impact on
insurance pervasiveness in any specific country.
Another social aspect analyzed by Zelizer (1979) is religion. He noted that historically
religion has provided a strong source of cultural opposition to life insurance with some religious
groups believing that a reliance on insurance represents a distrust of God s protective care. In
some Muslim dominated countries, the religious beliefs inhibit those forms of insurance that
facilitate speculation of future events, thereby discouraging growth of the insurance sector.
Wasaw and Hill (1986), Browne and Kim (1993), Enz (2000), and Ward and Zurbruegg (2002)
test whether countries with a strong Islamic background have a reduced demand for insurance
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consumption. Their results generally do confirm that consumers in Islamic nations purchase less
life insurance policies, which is reflected in the below global average life insurance penetration
in Muslim dominated countries, such as United Arab Emirates, Qatar, and Kuwait.
Thus from the foregoing review of literature it can safely be concluded that the a well
functioning insurance industry is important for the growth the economy as it encourages savings,
investment, employment and above all encourages the entrepreneurs. The developed economies
were benefitting from the mechanism of the insurance in promoting their economies but Middle
East countries such as Saudi Arabia were reluctant from introducing insurance for one or other
reasons. Thus in this study the researcher wish to investigate directly from the public of Saudi
Arabia the reasons why they have purchased insurance, why they have not purchased insurance
and what are their expectations from an insurance policy. In the following sections the researcher
discusses the conceptual framework of the study.
The review of literature highlighted the existence of a dynamic and well functioning
insurance industry for the growth of an economy. The existing literature shows that the demand
for various types of insurance is affected by number of factors such as life insurance demand is
positively related to anticipated income rather than current income, income and life insurance
consumption. There is relation between national income and spending on property liability
insurance, between legal environment and demand for insurance, national culture and the
willingness of individuals to use insurance. Besides risk aversion has significant impact on
demand for property casualty, education promotes an understanding of risk and hence aids
insurance demand. Another important factor is religion which negatively affects the demand for
insurance.
Though the demand for insurance is affected by number of factors in this study the
researcher focused on the areas such as impact of legal compulsion on purchase decision, how
much the personal safety, safety and security of family was considered while purchasing
insurance. Another important aspect investigated was that whether insurance was purchased for
return on investment or not. The following sections present the conceptual framework of the
study, research hypothesis, and research methodology.
3. Conceptual Framework of the Study and Hypothesis
The conceptual framework of the study hypothesized that insurance market in Saudi Arabia is
mainly dominated by compulsory lines of business i.e., motor and health. In this study the
researcher analyzed the level of importance given by the people of Saudi Arabia which generally
the people consider while purchasing insurance policy. The hypotheses states that insurance
market is dominated by compulsory lines of insurance and the main reason for the existing users
of insurance to purchase insurance is legal compulsion. The researcher wishes to find out the
affect of Islamic principles on demand for insurance. Thus from the given back ground the
researcher propose the following hypothesis to be tested in this study.
4. Hypothesis
From the review of literature the researchers developed the following three hypotheses.
H1
: The Saudi insurance market is dominated by the compulsory insurance (Motor and
health insurance)
H2
: Legal compulsion is the main reason for purchasing insurance.
H3
: Islamic principles affect the demand for insurance in Saudi Arabia.
H4
: People do not know about the insurance and insurance products.
H5
: People of Saudi Arabia prefer investment income than risk minimization.
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5. METHODOLOGY AND DATA COLLECTION

5.1 Data collection
This study targets the insurance market of Saudi Arabia. The study was conducted on the users
of insurance, and non users of insurance the executives of insurance companies. The study was
proposed on sample of 500 users of insurance, 500 non users of insurance and 100 executives.
Approximately 20% more questionnaires were distributed for all the three groups of respondents
i.e., 600 questionnaires were distributed for users and non users and 120 questionnaires were
distributed for executives of the insurance companies. The questionnaires were distributed by
trained undergraduate students to all randomly in Jeddah city. 500 usable questionnaires were
collected back from the users and 400 from the non users. From the executives 80 usable
questionnaires were received. The collected information through questionnaires was entered in
SPSS software for analysis.
5.2 Survey Instrument
Questionnaire was used for the purpose of data collection from the each group of respondents
i.e., users of insurance, non users of insurance and insurance executives. The user s questionnaire
enquired about the reasons for purchasing insurance and what are the issues pertaining to
insurance in Saudi Arabia from customer s point of view. The same enquiry was done from the
executives as well and the non users were asked to tell the reason why they didn t purchase
insurance. This was to find out what insurance the people of Saudi Arabia generally purchase
and make comparative analysis of the responses from users and the executive s response. For
effective administration the questionnaire was translated into Arabic.
5.3 Data Analysis
The data was analyzed on SPSS software by using the following statistical tools i.e., percentage
analysis, mean, factor analysis, and cluster analysis.
6. RESULTS AND DISCUSSION:
Hypothesis 1: The Saudi insurance market is dominated by the compulsory insurance i.e., motor
and health insurance.
The results of the study show that the Saudi market is mainly driven by the compulsory lines of
business i.e., Motor insurance and health insurance. Together these insurance policies shared
more than 70% of the total insurance premium in the year 2009 (The Saudi Insurance Market
Report, 2009). This trend is there in the Saudi insurance market since 2004 when the insurance
industry was liberalized for better regulated environment. Thus the hypothesis stating that
insurance market of Saudi Arabia is dominated by compulsory lines of business is acceptable.
This fact is further supported by the test of hypothesis 2.
Hypothesis 2: Legal compulsion is the main motivator for purchasing insurance in Saudi Arabia:
This fact is tested from table 01 and table 02. Table 01 presents the reason why the current users
of insurance purchased insurance while in table 02 the same fact is analyzed from insurance
executive s side. From 500 users of insurance 75.4% said that they purchased insurance because
it is legally compulsory. In table 02 the insurance executives confirmed the fact that the people in
Saudi Arabia purchase insurance because it is legally compulsory. On two point scales 1 equal to
yes and 2 equal to no, Legal compulsion was the main reason for purchasing insurance with 1.09
mean value. Almost all the executives agreed that the people buy insurance because it is
compulsory. Thus the hypothesis can safely be accepted.
Hypothesis 3: Islamic principles affect the demand for insurance in Saudi Arabia.
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Table 03 analyzed the response from the non users of the insurance. From among the given
reasons for not purchasing insurance the respondents said that they did not purchased insurance
because it is against Sharia h. The mean value 1.54 is the lowest for this reason. The fact is
further supported by the users of insurance when they were asked to respond on the various
issues concerning insurance in Saudi Arabia in table 04. The users (table 04) from among the
various issues said that they highly agree to the fact that people in Saudi Arabia consider
insurance against Sharia h (mean 1.67, std. deviation 1.128). In table 05 the executives again
confirmed the fact that the problem they face in marketing insurance is that the people consider it
against Sharia h. Thus all the three set of respondents confirmed that the insurance in Saudi
Arabia is considered against Sharia h. Therefore the hypothesis is accepted.
Hypothesis 4: People do not know about the insurance and insurance products.
Table 05 shows the problems faced by the insurance executives in marketing insurance in Saudi
Arabia. The executives said that the people of Saudi Arabia do not know about insurance
products (mean 1.30 std deviation 0.461) in general and about the different types of insurance
(mean 1.25, std deviation 0.436). The users also said that the people of Saudi Arabia do not
know about insurance (mean 2.45, std. deviation 1.739) and insurance products (mean 2.09, std.
deviation 1.283). Thus the insurance executives as well as the insurance users both confirm the
fact that the public do not know about insurance and thus they may be even ignorant that
insurance in Saudi Arabia is operating on Sharia h compliant basis. The hypothesis stating that
people do not know about insurance and insurance products can be accepted.
Hypothesis 5: People of Saudi Arabia prefer investment income over risk minimization.
In table 06, to identify the important aspects of an ideal insurance product, factor analysis
was conducted to identify the underlying dimensions among a set of insurance product attributes.
Principal Component Analysis was done using varimax rotation criterion. The Kaiser criterion
was used to retain only those factors with Eigen values greater than 1. Based on factor analysis,
two sets of components/ factors emerged with an Eigen value greater than 1, which explains the
61.537% of variance. The total variance explained by factor 1 is 39.168%, primarily comprising
the attributes related to risk management abilities of an insurance product as indicated by factor
loading values. Factor 2 explains 22.369 % variation and loads high on factors related to high
return of investment.
Table 07, Hierarchical clustering approach has been used to group the consumers into
market segments based on their responses on product attributes. The consumers have been
divided into two segments. The segment 1, which comprised of 77.4% (table 08) of the sample,
prefer insurance product for getting higher return on the investment. This provides a clear
indication that the insurance providers should not only focus on the risk coverage attributes of
their products, but they should emphasis much on the return on investment. The consumers
belonging to segment 2 focuses much on the risk coverage and claims settlements which
comprised of 22.6% of the respondents. Thus the people of Saudi Arabia are looking for return
from their investment not for risk minimization for their money. Therefore the hypothesis is
accepted.
6.1 Discussion
The Saudi Insurance industry is one of the fastest growing insurance industries in the world.
During the year 2009 the growth was as high as 33%. Though the Saudi insurance industry is
growing fast it is confined to compulsory lines of insurance business i.e., motor insurance and
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health insurance (mandatory for expatriates only). These two insurance policies made
approximately 70% of the total gross written premiums. The results of the study show that
insurance in Saudi Arabia is being sold because of legal compulsion as is shown in table 01
that 75.4% of the respondents purchased it because insurance is compulsory. Legal compulsion
is followed by personal security in motivating them to buy insurance followed by security of
family and return on investment. Though they are looking for return on investment they are not
buying insurance for it. It is discouraging to know that only 1.2 percent purchased insurance for
security of family and 0.6 percent it for good return on investment. The security of family
reason can be a direct market for health insurance and return on investment will be direct huge
market for protection and savings insurance. Thus these two reasons needed to be stimulated.
As analyzed by Zelizer (1979) religion is an important determinant of the demand for insurance.
This aspect is strongly resisting the demand for insurance in Saudi Arabia. All the three groups
of respondents, the users of insurance in table 04, non users of insurance table 03 and insurance
executives in table 05 said that the people of Saudi Arabia consider insurance against sharia h.
Though in Saudi Arabia only Sharia h compliant insurance companies are operating; users, non
users and the executives said that people in Saudi Arabia consider insurance against Sharia h .
This is the reason why the main motivating factor for purchasing insurance remains the legal
compulsion . Further the study shows that the people are looking for return from their investment
not just risk minimization. This is the reason that during the last couple year protection and
savings has shown remarkably very high growth rate of 69% in 2009, 85% in 2008. The cluster
analysis (table 09) showed that 77% of the respondents are looking for return on their investment
only 23% are interested in risk minimization from their investment in insurance.
7. Conclusions and practical implications
From the foregoing study it can safely be concluded that there is huge potential ahead in
insurance in Saudi Arabia. The industry has been witnessing very high growth rate since
liberalization in 2004 and the growth was as high as 33.8% in 2009 compared 27.2% in 2008.
However the concerning point is that this growth is mainly driven by the compulsory lines of
business i.e., motor insurance and health insurance (health insurance is presently compulsory for
expatriates only). The government is evaluating the possibilities of making health insurance
mandatory for all Saudi citizens as well, which will trigger the market for another couple of
years. The study shows that comparatively the public is unaware about insurance in general and
particularly about different types of insurance products. Thus the insurance managers should
focus on creating awareness about the insurance, its products, and benefits that it can provide.
The managerial team should focus on providing cost benefit analysis of insurance to the public
which may motivate them to invest their money for risk minimization in addition to investment
income.
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Annexure
Table No. 01
Reasons for purchasing insurance customers
Reasons
No.
Percentage
Legal Compulsion
377
75.4
Personal Security
114
22.8
Security of Family
1.2
Good Return on Investment
0.6
500
100
Total
Table No. 02
Reasons for purchasing insurance products Executives view
Reason for purchase insurance products
Mean
SD
Legal Compulsion
1.09
0.28
Personal Security
1.33
0.47
Security of Family
1.49
0.50
Good Return on Investment
2.00
0.00
1= Yes, 2 = No
Reason
Table No 03
Reasons for not purchasing insurance non users
N
Mean*
Std. Deviation
Insurance is Against Sharia h
400
1.54
0.499
No Reason in fact I May Buy it Later
400
1.54
0.499
I am Aware But I don't Need
400
1.64
0.482
No one has Communicated About Insurance
400
1.66
0.476
I don't Have Any Such Asset Where Insurance is Compulsory
400
1.66
0.474
I Don't Have Insurable Interest
400
1.71
0.454
Not Fully Aware of Insurance Plans
400
1.72
0.450
I Have Better Means of Investment That Gives higher Returns
400
1.78
0.415
*1= Yes. 2= No
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Table: 04
Issues in respect to insurance
Cluster 1
Cluster-2
Issues
People consider Insurance against
Sharia h
People want lower premium
Total
Sig.
Mean*
1.60
SD
1.095
Mean
1.90
SD
1.220
Mean
1.67
SD
1.128
5.771
0.017
1.51
0.904
2.25
1.325
1.67
1.053
45.711
0.000
1.85
1.036
1.96
1.157
1.88
1.063
0.863
0.353
1.93
1.210
2.67
1.379
2.09
1.283
29.486
0.000
2.13
1.305
2.62
1.163
2.23
1.291
12.380
0.000
2.26
1.356
2.62
1.218
2.34
1.334
5.919
0.015
2.33
1.343
2.55
1.487
2.38
1.376
2.216
0.137
2.36
1.739
2.80
1.701
2.45
1.739
5.618
0.018
People Want More Features in

Insurance
People Do Not Know About
Different Insurance Products
People Avoid Insurance
Salesman
People Do Not Show Interest in
Insurance
People consider buying insurance
as waste of money
People Do Not Know About
Insurance
*highly agree-1, ,highly disagree-5
Table No. 05
Problems of marketing insurance executives view
Total
Problems
Mean
SD
They Don't Know About Different Insurance Products
1.25
0.436
They Consider Insurance against Sharia h
1.29
0.455
People Do Not Know About Insurance
1.30
0.461
People Avoid Insurance Salesman
1.44
0.499
They do Not Show Interest in Insurance
1.49
0.503
They Want Lower Premium
1.61
0.490
They Consider Buying Insurance as Waste of Money
1.65
0.480
They want More Features in Insurance
1.78
0.420
Long Waiting hours for talking to Managers in Companies
1.85
0.359
People Are Not Easily Available
1.86
0.347
*yes-1, no-2
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Table: 06,
Factor Analysis - Rotated Component Matrix
Product Features
Component
1
High Risk Coverage
0.797
0.242
Fast claims Settlement
0.797
0.296
Simplified Contract
0.788
0.213
Tailor Made Products
0.787
0.055
Ease of Procedures
0.746
0.145
Easier Instalment
0.667
0.441
Low Premium
0.554
0.475
Legally Safe
0.548
0.296
Higher Return on Investment
0.027
0.784
Flexible Terms of Exit
0.297
0.768
High Discount
0.316
0.730
Total variance explained (%)
39.168
22.369
Cumulative variance explained (%)
39.168
61.537
Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization.
Table: 07,
Cluster Membership (Hierarchical cluster)
Case
2 Clusters
Higher Return on Investment
Easier Instalments
Flexible Terms of Exit
Low Premium
High Discount
High Risk Coverage
Legally Safe
Ease of Procedures
Fast claims Settlement
Tailor Made Products
Simplified Contract
Cluster
Table: 08,
Number of Cases in each Cluster (K-means cluster)
1
2
Total cases
387
113
500
77.4%
22.6%
100.00
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Enterprise Resource Planning - Real blessing or a Blessing

in Disguise : An Exploration of the Contextual
Factors in Public Sector
Listed in ULRICH S
Shafqat Ali Shad

Department of Computer Science and Technology
University of Science and Technology of China
Huangshan Road, Hefei, 230027 Anhui, China
Enhong Chen
Department of Computer Science and Technology
University of Science and Technology of China
Huangshan Road, Hefei, 230027 Anhui, China
Faisal Malik Faisal Azeem
COMSATS institute of information technology,Pakistan
CIIT, Quaid Avenue Wah Cantt, Pakistan
Abstract
Information systems have always been in a prime focus in organizations in both local (Pakistani)
and global environment. Now the race of being the best through Information Systems has created
its importance in public sector organizations to meet the global challenges. Public sector
organizations have been facing problems in different segments of technology adoption especially
in ERP projects. ERP adoption/implementation projects in public sector organizations still
encounter major setbacks in terms of partly/completely success/failure. Cultural and other social
barriers have been resistant in technology adoption in Pakistan. Now in the case of big ERP
adoptions the contextual factors must be identified and addressed. The paper investigates the
reasons of success or failure by addressing nature of complexities regarding different contextual
factors. The study includes a sample of Pakistan s four public sector organizations. The sample
of this four organizations includes two organizations (Type-A) i.e. Oil & Gas Development
Company Limited (OGDCL) and National Database Registration Authority (NADRA) where
ERP has been successfully implemented and other two (Type-B) i.e. Pakistan
Telecommunication Corporation Limited (PTCL), Higher Education Commission (HEC) where
ERP implementation is in progress. The findings address the contextual factors i.e. cultural,
environmental & political changes which have a variable impact on ERP systems
adoption/implementation in addition to Business Process Re-engineering (BPR). Paper also
briefly includes analysis of gaps between pre & post ERP implementation scenarios.
Key words: Enterprise Resource Planning, Information Systems and Process Re-engineering.
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1. Introduction
Government of Pakistan (GoP) has started making its owned organizations highly competitive in
order to meet country s internal and global information communication requirement reliably and
in a secure manner. Since the last decade GoP starting putting her efforts towards technology in
almost all the industrial and community life sectors both in terms of infrastructure and Skill
development. Now GoP is moving towards successful ERP adoption in its industrial sectors like
Banking, Telecommunication, Education, Logistics and Energy etc. State Bank of Pakistan
(SBP) started drawing ERP benefits though by encountering many problems since its ERP
project initiation in July, 2002 but rest of the sectors are still into the process of ERP
adoption/implementation. GoP is putting billions of dollars onto implementation of ERP
solutions by having a standard world class ERPs with internationally recognized teams of
consultants.
The Study limits itself on four public sector organizations (Type-A & Type-B) i.e. Pakistan
Telecommunication Corporation Limited (PTCL), Higher Education Commission (HEC), Oil &
Gas Development Company Limited (OGDCL) and National Database Registration Authority
(NADRA). The paper highlights the reasons of ERP failure by focusing upon the gaps that arise
other than the areas i.e. cost and time but the contextual factors that are generally ignored or least
focused but may be the reasons of project failure. The gap which may become cause of the
effects on the successful ERP adoption and implementation is explored in the paper. In
Pakistan s scenario because of not having sufficient knowledge in this domain organizations may
suffer in identification and treatment of the contextual factors in ERP projects. The reason of
missing these factors may be due to the following predefined international standard practices as
accomplished in other developed or developing countries that may vary from region to region
and country to country. This paper may work as a facilitator for the management of public sector
organizations of Pakistan who are involved in ERP implementation and for those who are
planning to move towards ERP adoption.
The paper follows a particular sequence, as in the coming section paper briefly describes the
relevant research in developing countries in public sector organizations. Section III describes the
research design by investigating ERP implementations in the three above stated sample
organizations of Pakistan. The fourth section portrays the research environment. Section-V
interprets the findings through the data analysis and at the end section VI will be concluding the
findings through analysis of a CSF model. The research will pave the way for the managers to
decide proactively about what are the most critical contextual factors and their handling that may
convert their ERP projects into a true blessing or a blessing in disguise .
2. Enterprise Resource Planning (ERP) systems
Since the evolution of ERPs in 1990s and then of extended ERPs in 2000s (Mohammad et al,
2002) it is considered as an instant replacement of the legacy systems and operating processes
(Mullin R. 1999). Any ERP package implementation requires extensive business process
reengineering and alignment (BPR & A) (Holland et al,1999) so that the gaps of perceived and
actual happenings may be reduced. Different well known ERP systems like SAP, Oracle, People
Soft, JD Edwards and BAAN have penetrated in the market because of their extensive features
and potential market needs. But ERP systems according to Sally Wright, Arnold M. Wright,
(2002), always bear high risk due to its cross functional inter-relationship with business
processes. This relationship if not clearly defined and communicated among all the stake holders
can cause many contextual complexities that may lead the project towards failure. ERP system
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implementation complexity, drastic cultural human and organizational changes and at times the
high customization cost drive the customer to go over the implementation plan carefully (L. P.
Willcocks and R. Sykes, 2000).
As in the public sector of Pakistan, Out of the sample of four, when two organizations of Type-A
have been explored initially. HEC (Higher Education Commission) of Pakistan in 2006 contract
awarded to the Siemens Pakistan Engineering Company for mySAP based modules
implementations i.e. FI/CO (Finance and Controlling), HR ( Human Resource Management)
MM ( Material Management) and HEC Project System (Anwar & Amjad, 2007). HEC keenly
showed interest in skill development through training of SAP modules to its employees for
making this ERP project successful. Pakistan Telecommunication Ltd the largest
telecommunication company in Pakistan being managerially controlled by Etisalat International
Pakistan LLC, since April 12, 2006 by acquiring its 26% shares (www.etisalat.ae retrieved as on
12-12-2009). Implementation of SAP-based ERP in the area of Financial Management and
Supply Chain Management, Human Capital Management, Network Lifecycle Management,
Planning and Business Process Optimization with the cost of 1.6 billion is on the go by Siemens
Pakistan. Project will prolong for 20 months with momentous deliverables every 6 months
(Zubair Qureshi, 2007). Type-B organizations of the selected sample are with ERP implemented
into them i.e. OGDCL & NADRA. Oil and Gas Development Company Limited (OGDCL)
working on Oracle Financials being one of the early ERP adopters in public sector of Pakistan,
they have raised their annual sale growth up to Rs.100.26 billion (2006-2007). NADRA is
considered as one of the critical implementations because of its organizational and the nature of
work to be accomplished. A large scale implementation of Oracle ERP Suite has been made in
NADRA in addition to a leading human-centric BPM platform Ultimo. Addressing the layers of
culture (W. Skok and H. Dringer 2001) in any organization, disruptive organizational changes
evidently occur when ERP implementation moves on (Soh et al, 2002). Human behavioral,
cultural and social attributes need to be satisfied in contrast with the type and level of changes
through ERP adoption in any organization. The suggested reasons of ERP failure are not just
technical issues but concerned behavioral factors as well (W. Skok and H. Dringer, 2001).
According to Chatfield there is a noteworthy impact of Organizational culture and structure on
ERP implementation (C. Chatfield, 2000). Technology implementations need an assessment of
human management and organizational risk to mitigate the technical risk for the system success
(D. L. Olson, 2001). Contextual factors that contribute in the failure of ERP implementation
highlighted as lack of management commitment, end user involvement in the project, poorly
defined communication management structure, political intrigue and hidden agendas (Stein et al,
1999). Roles and responsibilities of the workforce surely change in ERP adoption process which
should be pre-defined and set up (Rodney et al, 2005). Zhenyu Huang & Prashant Palvia, 2001
sate that A company with a strong culture would have better understanding of application
functionality, data management, and more accepting of ERP systems (Zhenyu Huang &
Prashant Palvia, 2001) which reflect towards the re-organization of culture, political and
environmental norms in a proactive manner. The success of an ERP project is settled upon the
acceptance of the changes by organization /employees i.e. organization s cultural changes or
Business Process Redesign (BPR) instead of the reasons of system bad performance and cost etc
(Kenneth et al, 2002) In Pakistan as interviewed from around 30 respondents (employees)
general perception prevailed in the public sector employees that is IT implementations are
though being going on but these are dominated and affected by corporate culture, beaurocratic
behavior of the top level management and political structure and observed as the strongest
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barriers in its success. So as stated by Hsin Hsin Chang, 2006 that corporate culture dominates
the IT functions to play its due role strategically (Hsin Hsin Chang, 2006).
Critical success factors have been analyzed by a lot of researchers in the past as Slevin and
Pintor (1987) talks about tactical and strategic project management capabilities, Gibson (Holland
et al,1999) states about the top management support and Holland at all (Holland et al,1999)
narrate deep emphasis on the need of project phases keeping in view the individual actions in an
ERP project implementation. Leadership also plays a critical role in the success of an ERP
project (Sarker and Lee S. Sarker and A. S. Lee, 2000). Critical Success factors have been
pragmatically analyzed by Christopher P. Holland and Ben Light presented in their CSF model
which has also been used and applied in this paper. For the purpose of going for the
Implementation of ERP, strategic and tactical approaches are used which are strategically
important to be considered. The model stated below covers the same especially ERP projects
need to include these factors to be analyzed.
ERP Implementation Process

Strategic
Tactical
Legacy Systems
Business Vision
ERP Strategy
Top Management Support
Project Schedule/Plan
Client Consultation
Personal
Business Process Change &
Software Configuration
Client Acceptance, Monitoring and
feedback
Figure 1: A Critical Success Factors Model of Implementation from Holland et al. (1999)
and later on by David Allen, Thomas Kern & Mark Havenhand (2000)
The above stated CSF Model later on experimented through case study method successfully.
Now this paper pragmatically analyzes the contextual factors i.e. cultural, environmental and
political in addition to other tactical and strategic ones in public sector organizations of Pakistan
where maximum number of ERP solutions is being and have been adopted as off-the-shelf from
different international ERP vendors.
As the prime objective of the research study is to explore in the impact of the real contextual
factors that affect public sectors ERP implementations in Pakistan both in a positive and
negatively. The research is exploratory in nature with statistical data analyses gathered from four
public sector organizations of Pakistan unlike the historical researches which have mostly been
made by case study methods. There is no prior research in this context in especially in this region
so the generalizability of this study has been taken into consideration in ab-innitio by
investigating the ERP implementations in public sector organization and past researches have
also been taken into account. The study focuses upon the contextual factors stated above, in the
light of CSF model of Holland et al.
Sample of four public sector organizations has been selected and the study explored the ERP
implementations in public sector organizations of Pakistan taking into account the contextual
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lens of CSF model presented earlier by Slevin & Pinto (1987) and Holland et al (Holland et
al,1999). When started exploring ERP implementations in Pakistan, the researcher found quite
stubborn and non-cooperative environment for research purposes then the study made through a
sample based data collection from the employees of four public sector organizations and reached
at the findings at the end from the collected data through questionnaires and informal interviews.
The three independent variables (contextual factors) have been analyzed for their affects on ERP
implementations in public sector of Pakistan. For this study officials of the organizations have
been contacted, most of them were reluctant in providing information because of prevailed
potential threats in their minds and off course due to their organizational structure/culture.
Finally four organizations were selected for exploration of the contextual factors for ERP
implementations i.e. HEC (Higher Education Commission) & PTCL (Pakistan
Telecommunication Company) (Type-A) for pre implementation analysis and OGDCL (Oil and
Gas Development Corporation) & NADRA (National Database Registration Authority) (Type-B)
for post implementation analysis. In addition to the contextual factors stated above this study
also included briefly the strategic and tactical areas in order to be more realistic and authentic in
research findings. The data collection undertaken for this research is primarily through
questionnaires and informal interviews and through the literature known/available about these
organizations.
4. The Research Environment
In Pakistan, Public sector organizations have their own typical hierarchical structure. They have
historically been facing a lot of contextual barriers in acquiring technology. Though they put
their emphasis on efficiency initially but as the directions of the global market towards
technology changed their pace, they also had to move towards big IT implementations. As a
result ERP (Oracle Financials) in OGDCL and SAP in central bank i.e. State Bank of Pakistan
successfully implemented by the government though they faced a lot of tactical and strategic
barriers. Later on ERP implementations have been encouraged into other public sector
organizations by the Government. In the last decade private sector giants due to the prevailed and
forth coming market opportunities in Pakistan also started shifting themselves from the old
complex IS structure to ERP based environment especially in Telecom, Banking and Energy
sectors. Being a new market for ERP vendors like Oracle Financials and SAP put a lot of
emphasis on it and are successfully moving towards their business objectives. Pakistan Software
Export Board is also putting its endeavors towards the development of ERP solutions both open
source and licensed for the SMEs and large organizations. The research focuses upon the OffThe-Shelf ERP solutions in large public sector organizations because of the need to analyze the
real contextual barriers that cause delays and failure of ERP projects. As analyzed the
complexity of the offered ERP packages in Pakistan, these packages do have a lot of
complexities but there are more complex contextual barriers in Pakistan that lead them more
towards failure. Need of information for the government in different its sectors has been
increasing and this local and global pressure getting more and more enhanced and pushing
government to put more emphasis on big technological and structural investment in the form of
ERP implementation especially.
4.1 Hypothesis postulated
H1: ERP implementation is drastically affected by contextual factors (i.e. cultural, environmental
and political) with their effects on each other in public sector organizations in Pakistan
5. Analysis and Discussion of the Critical Success Factors
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The research mainly focuses upon the identified factors of that has earlier been exposed by
Holland and Light (Holland et al,1999) and later on by David Allen, Thomas Kern & Mark
Havenhand [21] which states two types of tactical and strategic factors which need to be
addressed when assessing ERP implementation. When these factors have been dugout in the
current environment for the purpose of analysis were found quite critical as the role of legacy
systems and old process design must be analyzed due to the practicing activities that ultimately
reflect towards the new technology i.e. ERP adoption and new strategy development. Holland
and Light (Holland et al,1999) interpret business and IT systems as a pool of existing business
processes, organizational culture, and organization structure which are the determinants of the
amount of IT and organizational change required to implement ERP successfully. The model
though reflects a true picture but when researched the contextual factors, drills down the concept
of socially constructed organizational conditions that may become the main reasons of success or
failure of ERP implementation in public sector organization (David Allen, Thomas Kern & Mark
Havenhand, 2002). There may be the difference in explanations but as a whole intensity of these
contextual factors has been found quite critical which if not addressed can lead the project
towards failure. This paper focus is though primarily on contextual factors but all the elements
described in the CSFs model stated above were brought into analysis as well but these factors
have been analyzed in connection with the contextual factors. Fig-II uncovers the contextual
factors being part of the CSFs model that shows the behavior of these factors as a lens for
successful ERP implementation.
Figure 2: Critical Success Factor model of ERP
STRATEGIC
Project Schedule/plans, ERP Strategy, mission, Top
Management Support
Contextual Lens
Organizational Culture, Construction of past
Technological implementations, Political structure
`
TACTICAL
Relationship and knowledge management,
Business Process Changes & Software
configuration, technical tasks and employee
acceptance
Monitoring and feed back, trouble-shooting
Implementations adapted from Slevin & Pinto (1987)

[16], Holland et al. (Holland et al, (1999) and David Allen et al (1999)
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Prior to the current research same model has been applied on public sector higher education
institutions (HEIs) by David Allen et al using case method which is infect the extension of some
of the areas of Holland and Light s (Holland et al,1999) research efforts. This research paper
focuses on the same areas but with a different approach and additional contextual factors.
Data collected from four Pakistani public sector organizations through face to face informal
interviews from their employees and through personally delivered questionnaires. Informal
interviews contained open ended questions regarding their view point about ERP, culture,
environment, their views about organizational internal & external political structure and their
views about organization s top level management without following a planned sequence of
questions. The survey questionnaire was same for all four (sample) organizations to have a view
of their pre and post implementation scenarios regarding contextual factors stated above. It
consisted of three types of formats. Professional & personal information (general format), scaled
response questions and dichotomous questions. At the time of data gathering the researcher face
a very low degree of cooperation from the employees due to various contextual issues. It has
been intensively observed that the employee there were quite reluctant in providing required
information especially in written questionnaires though they responded in a comparatively better
manner in verbal informal interviews because of considering this information leakage as a threat
to their jobs. Initially this questionnaire was tested in all four public sector organizations in a low
profile in order to get early feed back and response. Then it was redesigned and distributed in all
four selected organizations. Most of the employees found unaware of ERP, its actual purpose and
its features even though they are using it, especially in NADRA with Oracle financials
implemented. They quoted as they are provided an ERP number through which they perform
limited tasks required by the organization. Those who provided their viewpoints, they did not
provide information from which they may be traced. OGDCL which is Pakistan s one of the
early ERP (Oracle Financials) adopters found comparatively good among its employees
regarding its ERP. In the same manner when the study went through the data collection phase at
HEC it was quite difficult for the researcher to find out the people there who have been part of
ERP/SAP project or those who know about ERP implementation in progress in their organization
for the purpose of interviews and questionnaire response. Employees in PTCL were quite a bit
reluctant in providing required information especially in written form because of the political and
environmental issues within and outside the organization (As mentioned by many of the
employees there) amongst employees and the management. 100 questionnaires had been
distributed in each of the public sector organizations listed above. Due to the political, cultural
and environmental factors discussed above, 30 questionnaires had been received back from the
respondents from each organization except PTCL from where 33 returned. In order to analyze
the data, tools used were SPSS and MS excel.
Data collected through the questionnaires and informal interviews after analysis, reflected in
three formats (As the structure of the questionnaire and interview was designed) lead the study
towards the same direction. The Cronbach s alpha of the both types of organizations, one where
ERP implementation is in progress and the other with ERP implemented in itself derived from
SPSS was [0.825] & [0.873] respectively. 82.5% & 87.3% ensured the reliability of the study.
[Details attached in Table-1 in Annexure] After the analysis of the dichotomous questions part,
reasons of ERP project delays primarily are lack of planning, lack of management skills, slow
decision making and lack of technical skills which are 88.33333%,70%, 66.66667% and
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68.33333% respectively [table-3,annexure]. Behavioral and Authority related concerns were

primarily highlighted. Lack of skills as a major threat and existing culture as one of the
prominent barriers identified.
Table-2
Contextual Factors
OGDCL
PTCL
NADRA
HEC
Culture
(23.727)
(42.236)
(41.958)
(26.093)
.000000
.000000
.000000
.000000
(33.463)
(40.652)
(41.865)
(29.976)
.000000
.000000
.000000
.000000
(47.132)
(34.077)
(36.666)
(24.319)
.000000
.000000
.000000
.000000
p-value
Environment
p-value
Political
p-value
[*The values shown in the parentheses in the table-2 are the t-values]
All four organizations when analyzed that t-value is high, and the p-value is .000000 of all the
factors for each organization which reflects as a strong evidence against the null
hypothesis(Ho).As on the basis of t-test and significance level drawn, we can safely reject the
null hypothesis and will accept the alternate one. It means ERP implementation is drastically
affected by contextual factors (i.e. cultural, environmental and political) with their effects on
each other in public sector organizations in Pakistan. Details have been provided in table 1a in
annexure.
5.1 Organizational Culture & environment
Culture as a whole affects on the productivity of the organizations by affecting individuals and
drastically affects the thinking of the employees in any organization (Bandura, A. (1977) (1982).
Culture as a pattern of basic assumptions from groups of individuals derived from different
perceptions (Schein, E. H. 1985) contributed both positively and negatively on the happenings
in any organization. Early researches state that cultural changes due to any of the organization
change like BPR, ERP or TQM includes employees behavior and their efficiency can cause
good or bad in any organization (Al-Khalifa et al, (2000), Hoffman et al, (2000). This paper
focuses upon the cultural factors that are affected by the perceived change and ultimately affect
individual perceptions regarding ERP implementation in public sector organizations in Pakistan.
Communication among the stakeholders regarding ERP implementation effects form their beliefs
and perceptions if done in a right and planned manner (Bates et al, 1995). ERP implementations
in relation with cultural factor have already been explored and analyzed (Taylor, et al, 1998) so,
is being preceded in this paper by focusing only on public sector organizations. As analyzed in
Pakistan s public sector organizations it do & did affect ERP implementation projects in the form
of delays, cost and time overruns etc. No doubt since the past decade Government of Pakistan
has changed her approach towards technology adoption by following a global and private sector
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patterns but faced a lot of hindrances in doing so not just only because of required skill set and
complexity and cost of the software/ERP but due to the contextual factors especially cultural
ones that had not been positively addressed.
At the time of data collection through questionnaires and informal interviews in two public
sector organizations where ERP implementation is in progress i.e. HEC and PTCL, many of the
employees were threatened by the perceived drastic cultural change in the organization. This
unrest when analyzed was found due to neglecting the employees concerns and by considering
culture as a non-affecting factor which can easily be re-enforced in any organization. The culture
in Pakistan public sector organizations as observed and interviewed is though inflexible but need
to be addressed rightly when BPR for ERP and ERP Implementation itself or any other change
major is required. Most of the respondents (employees) during the interviews have been found
unaware of the ERP even by being end users of it. According to some of the respondents in
NADRA, they don t know what ERP is, they are just provided an ERP number as their ID, they
just view and use their screen as trained up to a limited scope/scale.
i.
In the data collection phase the below stated issues regarding environmental and cultural
issues had been addressed in both pre & post ERP implementation scenarios in public
sector organizations of Pakistan i.e.
ii. Organization culture i.e. its norms and rules
iii. Attitude of employees towards work
iv.
Employee selection and involvement criteria for ERP project team
v.
Change in employee behavior/attitude
vi.
ERP as a social threat
vii. BPR for ERP implementation
viii. Social needs fulfillment
ix.
Employees reluctance due to dual responsibilities
x.
Change in management structure (hierarchical etc)
xi.
ERP Implementation as an opportunity
xii. Financial benefits before & after ERP implementation
xiii. General environmental change acceptability through ERP
xiv.
Organizational structure flexibility for ERP implemented
xv.
Change in working standards through ERP
xvi.
Monitoring threats after ERP implementation
5.2 Political Structure
Bureaucracy, during the course of study, when drilled down in German sociology (Weber and
Max , 1962) found as one of the most famous approaches of organizational governance. As
observed from the existing literature in today s knowledge base economy a typical bureaucracy
has been changing its shape from a rigid control base over employees and processes to
knowledge based flexible technology, business and management base. This culture/structure has
been used by many large and complex organizations round the globe by encouraging the already
tested and practiced moves which no doubt behaves as a barrier in BPR for ERP implementation.
Senge, (1990) states about the capabilities of continual change of the organizations which work
in an unstable or highly volatile environment. When talk about public sector organizations of
Pakistan their top level management is highly influenced or supposed to be answerable to the
state representatives/rulers so they are controlled politically to great extent. HEC and PTCL
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employees when interviewed, they reported a heavy involvement of rulers (As Pakistan is facing
a political unrest for last many years) which caused so many problems and ambiguities in ERP
implementation projects. Even trying to be flexible the public sector organizations followed the
private sector technology adoption and usage patron but still the political structure has developed
strong roots into it due to which enforcement of any change in any of these organizations takes
the productivity down and as a result the unattended problems and misconception in the minds of
the employees/stakeholders lead that particular change towards failures. The ultimate decisions
though are made in the high level groups of individuals but are not properly communicated down
the line amongst the employees who carry forward these activities with a lot of risks.
Data gathered in this regard focusing on the below stated issues in two different ERP
implementation (complete & in progress) scenarios in public sector organizations of Pakistan i.e.
i.
Bureaucratic management style
ii. End user involvement in different phases of the project
iii. Training (formal & informal)
iv.
Misconceptions / fears like rightsizing or downsizing, loss of authorities etc addressed by
the Top Level Management
v.
Political influences of regulatory bodies and the government on the public sector
organizations
vi.
Conflicts resolution and management
vii. Potential risk(s) awareness associated with ERP implementation
viii. Communication planning and management
ix.
Criteria for selection of ERP vendor and consultant for implementation
5.3 Social construction of technological legacy
Legacy systems play a vital role in organizational strengths but these technologies may often
cause failure of the organizations because of the obsolescence issue(s) and volatile market
conditions. At times organizations are distressed by legacy technology failures (D. Knights and
F. Murray, 1994) so as the happening in Pakistan. From the collected data analysis averages
derived from the particular question of BPR, an overall lickert scale average of 3.269841 and
3.051724 were drawn out of the employees response for both (Pre & post implementation) types
of organizations respectively which theoretically reflects that majority of the employees is quite
uncertain or to an extent in favor of change in exiting/traditional organizational processes. In
Pakistan s public sector organizations since the last decade technology penetrated in a very
creepy manner because of unawareness, poor technology infrastructure, potential threats amongst
stake holders, political and economic instability etc Even the issue of process obsolescence have
been ignored for many years due to being uncontested in the market place within the country.
Now it s a matter of survival in a highly competitive market within and outside the country they
are bound to be best in class to serve the public. When interviewed from randomly selected
respondents from different public sector organizations it was observed that they were socially
and skill wise threatened by the technology revolution through ERP in their organizations
although they want process change that s why they are not ready to switch from the legacy
systems to the advanced ones.
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5.4. Relationship and knowledge management

Early research (S. Chang, 2000) highlights the criticality of ERP in public sector organizations
because of its highly complex nature both in terms of technical and managerial contexts.
Conesus between all the stake holders is quite critical for successful ERP implementation in
public sector organizations. Knowledge gaps are fulfilled by mutual understanding, required skill
set and implementation experiences the different parties involved in ERP implementation. From
the data collected through the questionnaires and informal interviews, the level of awareness and
clarity about ERP was not up to the mark. Employees in one of the selected organizations were
not clear about what could be the maximum output of what their job is/will be before and after its
implementation. The research overall derived a conclusive overall applied scale average of
3.492063 in the organizations where ERP implementation is in progress and 3.533333 where
ERP has already been implemented. The response evidently shows that there is high need to
involve employees in order to avoid delays and cost overruns in ERP implementation projects.
5.5. Communication as a political process
Study in the phase of data analysis explored an average communication structure in ERP projects
in public sector organizations in Pakistan. Though there is a strong will and interest of the top
level management in ERP implementation in all analyzed organizations of Pakistan but their
approach traditionally was more towards enforcement instead of positively convincing. Now the
top management is trying to address the communication needs within the organization and the
ERP project but still not reached up to the required level of satisfaction which as a result comes
up as one of the contextual barriers. Many of the respondents showed their deep concerns about
limited sharing approach in their organizations though they are informed directly or indirectly
to an extent. Those who are involved generally don t share any or all the information with their
colleagues considering it a threat for their job from the top level management and from their
peers as well. Slow decision making process has been complained by the respondents is just
because of the complex hierarchical decision structure. When some or all the concerns of the
stake holders, especially internal stakeholders are not addressed, they react in different ways is
the forms of rumors of threats and project failure most of the times even before ERP
implementation. High ups generally ignore the real importance of communication across the
organization in public sector and face very critical problems which finally lead them towards
project failure.
6. Conclusions
This research paper is a continuity of the previous efforts made in the area of ERP
implementation pros and cons. In Pakistan no such effort on ERP in Public sector was found
earlier especially when GoP is putting a lot of its resources towards technology implementations
in its owned organizations across different industries. As the paper focus is on the contextual
factors i.e. culture, environmental and political, in addition to the brief view of BPR,
communication process, legacy systems and relationship with knowledge management. It comes
with the point of view that in addition to the core focused areas of ERP implementation, public
sector organizations bear more risk as compared to the privately owned bodies because of their
strongly rooted cultural, environmental and political structure. These contextual as proved from
the data analysis gathered from public sector organizations of Pakistan are one of the major
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causes of project delays, cost and time over run or complete project collapse. Where ERP
implementation is partly or completely successful even these organizations are still facing
problems of distrust from their employees and unable to create loyalty with them. The
framework provided (Holland et al,1999) has paved the way for its application onto the
neglected areas which most of the times place barriers in ERP success. Pakistan is passing
through critical political and economical crises which in tern are causing both short and long
term loss. ERP projects are though tried to be run on private sector pattern but with different
methodology of handling its internal stake holders. This exploratory research nullify Ho by
proving that the ERP implementation is drastically affected by contextual factors (i.e. cultural,
environmental and political) with their effects on each other in public sector organizations in
Pakistan. When gap between the two types of organizations analyzed, intensively found lack of
proper planning and stake holders involvement due to which Type-A organizations have
suffered with the issues of time delays and cost overrun. Type-B organizations with ERP
implementation in progress are doing although better but repeating the same pattern of ERP
adoption which reasoned critical problems for the early ERP adopters. Beaurocratic management
style placed a lot of hurdles in the success of successful ERP implementation stated by the
employees of Type-B organizations and the same practice has been observed in Type-B with a
slightly less proportion. Threats of social disintegration through ERP are comparatively more in
Type-B organization. Majority of the employees of Type-A organizations viewed that there is no
drastic change positive change after ERP implementation where as employees of Type-B
organizations are quite optimistic in this regard. If the addressed contextual factors are properly
served, the adoption/implementation of ERP will be a collective effort of all the stake holders
which ultimately result in its success.
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Demand for Formal and Informal Credit in Agriculture:
A Case Study of Cotton Growers in Bahawalpur
VOL 2, N O 10
Listed in ULRICH S
Rana Ejaz Ali Khan

Department of Economics,
The Islamia University of Bahawalpur, Pakistan.
Tanveer Hussain
Joint Director, Cholistan Institute of Desert Studies
The Islamia University of Bahawalpur, Pakistan.
Abstract
The objective of the paper is to identify the determining factors of demand for formal and
informal credit by cotton growers in Bahawalpur. The borrowing behavior of the farmers
revealed that educated farmers and big farmers take loaning from the formal sector. The distance
of the formal sector loaning agency, number of visits to take the loan, high transaction cost and
bribe and corruption push the farmer towards informal loaning. To make the formal sector
loaning effective, it is proposed to formal sector credit institutions to make the processing rapid
and decrease the transaction cost. It is further proposed that for the far flung areas, the
accessibility should be effective.
Keywords: Agriculture loaning, Formal Credit, Informal Credit, Cotton Growers, Pakistan,
1. Introduction
Credit markets work imperfectly in developing economies due to a number of reasons like
imperfect information, scarcity of resources, lack of good management and governance. Such
problems are particularly important in agriculture as it is larger sector in a number of economies.
As a result of these imperfections credit market often do not seem to function well. They are
often characterized by credit rationing, that is why some farmers cannot obtain loans at any
interest rate. Even agricultural producers with economically viable projects may not obtain the
loan they need to invest in particular activity. It makes them switching from formal to informal
sector loaning.
In developing economies like Pakistan the agricultural loaning from formal sector is hard to
channelize as 50 percent of the cultivable land is consisted of uneconomic holdings. The small
and medium-sized farms take 92 percent of total cultivable land at the national level. Though the
small farms are owned but they are so small to be pledged by the formal institutional loaning.
The farmers are illiterate. They follow the orthodox technique of production and fail to make
investment in farms due to poverty. It again push them to informal sector loaning. On the other
hand agricultural loaning becomes more important due to floods and droughts and untimely
rains. Although a significant part of the agricultural loans are used for consumption and social
needs as well litigation and politics. Singh, et. al. (2009) has mentioned the use of such loans on
home construction including farm building and repair, social festivity, domestic expenditure,
education, health care, purchase of car, payment of old debt, litigation and sending the family
member abroad, etc. Agriculture, particularly cotton growing has become highly capital intensive
in terms of investment such as in machinery, irrigation and inputs particularly fertilizer, seeds,
chemicals, etc. These have enhanced the demand for agricultural credit. On the other hand
Pakistan is fourth producer of cotton in the world, third largest exporter of raw cotton and largest
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exporter of cotton yarn. It is contributing 55 percent to foreign exchange earnings of the country.
Bahawalpur is situated on the cotton producing belt of the country. It may be a good case study
for cotton growers. The cotton growers need loaning at different stages of production. To meet
the credit demand, expansion of agricultural credit system in formal as well as informal has been
witnessed.
The problems of agricultural loaning from formal sector is that farmers have to face strict
conditions and complicated procedures. The credit costs (despite the fact that the interest rates
are lower due to public policy) are very high specially for poor households who require low
amounts of credit. They have no material collaterals, face high costs of access and lack of social
capital (Manig 1996; Akram, et. al. 2008; Singh, et. al. 2009).
As a result farmers who do not have access to formal credit resort to demanding credit for
informal sector so as to meet the short falls in their credit needs. Hoft and Stiglitz (1993) pointed
out that rural money lenders continue to dominate the informal sector, and there is evidence that
the interest rates charged by them have been remaining high and unaffected. Duong and Izumida
(2002) explained that low level of returns and asset growth and limited formal lending for
consumption smoothing make the poor households formal sources unattractive. So they move to
the informal sector market to meet their credit demands (see also Barslund and Tarps 2003). That
is why there is evidence of informal sector as a bigger source of loan not only in rural but also in
urban areas (Shah, et. al. 2008). When the farmers have only way to take loan from informal
sector, the commission agents and agricultural input dealers exploit the farmers by charging
higher prices of inputs and lower prices of crops.
Menig (1996) opined that effectiveness of establishing a formal credit system to satisfy the actual
credit requirements within a short term is largely overestimated, at least when the aim is to reach
the lower agricultural income group. It is supported by the fact that government s distribution
policy bypass the needs of small farmers in the prevailing societal modes of distribution in rural
areas. On the other hand, the informal credit market is under-estimated. It facilitates the farmers
by providing adequate loans at time in cash and kind. In terms of development policy, it would
be worth considering whether a dualistic agricultural credit system (formal and informal credit
market) should be promoted during a period of transition until the formal institutions become
fully effective. It means strengthening the informal credit system in view of improving
competition, transparency and refinancing possibilities should be considered in policy options.
The restricted informal sector allows limited financial transactions. Refinancing through the
formal institutional system, therefore may be a development measure of financial policy to reach
the poor farmers and those lacking access to credit.
The objective of the current study is to estimate the determinants of demand for formal and
informal credit by cotton growers, as a case study of Bahawalpur. On the basis of empirical
findings, policy proposals may be given to improve the formal credit system.
In the previous literature, researchers have attempted to probe different aspects of formal and
informal credit in agriculture sector. Manig (1996) has explained the importance of informal
financial markets for rural development in Pakistan. The study concluded that formal and
informal sector credit sources are complement to each other and they do not compete each other.
The traditional informal credit market is underestimated so far as its functions in the social
development progress is concerned.
Akram, et. al. (2008) have analyzed the credit constraints faced by the farmers who attempts to
avail loan from formal sector. Shah, et. al. (2008) focused on the determinants of credit program
participation taking the data from low-income households. The explanatory variables were
education, marital status, income and expenditures of household, household size, household
occupation, ownership of collateral and ultimately the characteristics of credit, i.e. formal and
informal credit.
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Udoh (2005) has particularly focused on the demand and control of credit from informal sources
by rice producing women in Nigeria. The study revealed that farm expenditures, personal
income, interest rate, education, spouse income and experience are important factors that
determine demand from informal sector. Personal income, education, spouse income and interest
have inverse relationship with the amount of credit collected by the women. The more educated
the women are, the less credit they will obtain from informal sector. The same kind of effect has
been found of the spouse income on demand from informal credit source. A women who is
married to a man with high income status seldom take credit from informal institutions. It
reflects the direct and indirect influence on the women production, consumption and investment
activities. Singh, et. al. (2009) have analyzed the inadequacies of institutional credit for
agriculture and compared it to the non-institutional credit. The identified problems of
institutional credit were complicated and time-consuming procedure, bribe to agents and
officials, higher rate of interest, no bank at village level, untimely availability and poor quality of
inputs and high transaction cost. The study also estimated the reasons of preference of farmers
for non-institutional credit. They were easy to avail, no formality-needed and no surety and
security needed. The suggestions given by the farmers to improve the performance of
institutional credit were also compiled. The major suggestions were the simple loan procedure,
reduction in rate of interest on loans, sanction of the loan on the spot, increase in credit limit,
subsidized loan for small farmers and lessening the paper work. Micheal (2008) has also
attempted to compare the socioeconomic characteristics of farmers who have benefited from the
formal and informal credit sources. A vast majority of the farmers was found to have benefited
from the informal sector loaning. Through a regression analysis, the impact of age, education,
household size, farm size and farming experience was also estimated. The results show that age
of the head of household, education and family labor positively and significantly contribute to
farm output.
3. Methodology
A survey of 563 households involved in cotton growing in eleven villages of Hasilpur, district
Bahawalpur made the data valid. From each village almost 50 households who have cultivated
cotton in the last one year were surveyed randomly. Only those households were taken who have
availed credit from either formal or informal sector or both of them at least in the last one year.
The villages were selected so that it may comprised of all kinds of farm households of all farm
sizes. Three villages were taken near to the city within the distance of five kilometers, the four at
the distance of 10 kilometer and remaining four at the distance of 20 or more than twenty
kilometers.
We have included only seasonal loans like the loans for fertilizers, seed, pesticides, etc. the
capital loans (for tractor, tube well and machinery etc.) are excluded due to the fact that the small
farmers may have ineligibility to take these loans. Secondly the informal sector makes the loan
available only for seasonal or crop requirement. The dairy, poultry and fish farming loans by the
same farmer are also excluded. However, the cotton growers require loans irrespective of farm
size and kind of crop.
The demand for formal credit is measured by the ratio of formal credit to the total credit availed
by the farm households in the last one year. It ranges form zero to one. A farm household who
has availed all the credit from formal sector have the value of one and household who availed all
the credit from informal sector takes the value zero. While the value above 0.5 shows more credit
demand from formal sector and less than 0.5 show more credit availed from informal sector.
There may be a variety of the factors that may affect the ratio of formal and informal credit.
Broadly the factors may be divided into demand and supply side factors. They may be
inadequate collateral value, existence of interest (interest-Riba is prohibited in Islam), involving
the bribe in formal sector, distance to the source of credit, expensive procedure in informal
sector, education of the farmer, land value, experience in farming and lag in disbursement of
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loan, etc. (Akram, et. al. 2008; Singh, et. al. 2009). The factors included in our model are shown
in table-1.
The demand for formal credit is estimated by OLS model.
FCRT = f (EDU, EXP, FSIZ, VISIT, DIST, COST, BRIB)
(1)
The definitions of the dependent and explanatory variables used in the model are shown in table-1.
Table-1. Definitions of Variables Used in the Model
Variables
Definitions
FCRT (Demand of formal credit)
Ratio of the formal credit to total credit
EDU (Farmer s education)
Number of years of education of the farmer
EXP (Farmer s experience)
Farmer s experience in cotton growing in years
FSIZ (Farm size)
1 for subsistence level, 2 for economic holding and 3 for big farm.
VISIT (Trips to loaning source)
Number of visits of the farmer to loaning agency to take loan
DIST (Distance of the source)
Distance of formal source of loaning from farmhouse in kilometers.
COST (Transaction cost)
Cost of the loaning, interest and all other costs
BRIB (Bribery)
1 if some bribery is taken by the source, 0 otherwise.
One common problem encountered in cross-sectional studies is hetroscedasticity, whose

existence renders the OLS estimates inefficient. White s heteroscedasticity tests carried out to
examine whether heteroscedasticity is a problem in the current analysis and the estimation
procedure is then adopted.
The summary statistics and results of OLS model are given in table-2. The results are consistent
with theoretical implications of the demand for loan from formal and informal sector.
Talbe-2. OLS Results of Demand for Formal Loans
Variables
Coefficients
t-statistics
Constant
2.6857
2.9357*
EDU
0.2583
1.3579**
EXP
2.7293
0.9738
FSIZ
1.6032
2.9358*
TRIP
0.0153
2.6734*
DIST
-0.0847
-1.2748**
COST
-1.6348
-2.5318*
BRIB
-0.0804
-1.6135*
R-Squared = 0.7396
No. of observations = 563
* and ** denote 5 and 10 percent level of significance respectively.
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The following features of the results are worth noting.

4.1 Education of the Farmer
The demand for the formal sector loaning is positively related with the education of farmer (see
also Udoh 2005 for Nigeria). The explanation may be that the loaning from formal sector
requires documentation and office visits that is convenient for educated farmers. For the less
educated and illiterate farmers there emerged the problem of calculation, estimation and
valuation of assets, loans and returns. They are usually not aware of credit schemes, the pubic
sector incentives for loaning as well as the varieties of the inputs. The formal sector loaning
officers also do not behave well to these illiterate and poor farmers. On the other hand from the
informal source of loaning, it needs almost no documentation, so farmers of lower education
tends towards informal sector loaning.
4.2 Farm Size
Collateral is the most significant requirement for loaning for formal sector. A significant ratio of
the farmers, i.e. 77 percent use agricultural land as collateral that is acceptable to all formal
sector loaning agencies (Akram, et. al. 208). It is hypothesized that the big farmers should have
higher probability for loaning from formal sector. Kshirsagar and shah (2005) concluded that
formal lending institutions have bias towards the larger handholding farmers in providing
cheaper access to credit. It is estimated that by increase in the farm size from subsistence to
economic and large holding, the demand for formal loaning is enhanced (see also Kshirsagar and
Shah 2005 for India). The fact is that big farmers by their influence and social as well as political
status make the utilization of formal loaning convenient. For such type of farms it takes lesser
time to get the loans. On the other hand the small farmers, particularly the farm of subsistence
level no say in formal sector source of loaning. From the policy perspective the cooperative
farming may be a solution for collateral problem.
4.3 Visits to Source of Loaning
Processing of loan application and disbursement of credit in time is the most important aspect of
rural credit. It not only develops confidence among borrowers but also helps in increasing
efficiency of lending institutions. The slow processing of loan application or delayed
disbursement not only delay the sowing and growth of crop but also raise the cost. On the other
hand timely disbursement of credit, therefore not only helps to reduce cost of credit but also
enhance returns form agriculture. The rapid application processing reflects the procedural
simplicities as well as efficiency of lending institutions.
To capture the effect of time of processing the loans by any source, instead of including the time
in days, we have taken the visits to the source of credit. The time may create ambiguity as the
small and subsistence level holders most probably may not have their own connivance so they
may have longer time to get the loan. The number of visits captures the collection and filling of
application forms, procurement of required documents, obtaining guarantee, submission of
application form and collection of sanctioned loan, etc. Anyhow it is found that the visits to the
source of credit negatively affects the demand from formal institutions (see also Singh, et. al.
2009). The explanation may be that from the informal sector the loan is available in one or two
visits as well as in the form of cash and kind. It reflects the faster processing of loans by informal
sector institutions (see also Kshirsagar and Shah 2005 for India).
4.4 Distance to the formal Source of Credit
Distance from the farm household to formal institution of credit may be an important factor
affecting a farmer s credit activities (Akram, et. al. 2008). The demand for loan from the formal
sector is negatively related to the distance from farm house and source of credit. From the policy
point of view it is much important. The largest agricultural loaning agency in Pakistan is ADBP,
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that provides the services of loaning to the farmers at their doorsteps by mobile credit officers.
The commercial banks as well as cooperative banks also have same type of facility. But our
results show failure of such policy as large distance to the source of credit makes the farmer to
take loan from informal sector.
4.5 Transaction Cost
It is generally presumed that the cost of the credit remains high in the case of informal sector
loaning. The informal sector like the commission agents in the grain markets and dealers of the
pesticides, seeds and fertilizer charge high interest rates. Kshirsagar and Shah (2005) narrated
that borrowers feel less comfortable with informal lending sources due to their higher interest
rate. On the other hand the formal sector loaning agencies charge lower interest rate but the total
cost may be higher due to number of visits and bribe and expenditures on documentation.
Kshirsagar and Shah (2005) also stated that formal lending institutions have higher transaction
cost particularly from the small farmers. Our results have shown that the higher cost of loaning
negatively affects the demand of credit from formal sector loaning. The farmers prefer to take
loans from informal sector. It is reflection of the fact that rural money lenders are dominant in
loaning. Again the matter is of serious concern regarding the management and governance in the
formal institutions of agricultural credit.
4.6 Bribe and Corruption
There is significant increase in the formal sector loaning in agriculture in the last three decades
particularly through Zarai Tarakiati Bank Limited formerly Agricultural Development Bank of
Pakistan along with commercial and cooperative bank. But there are evidences of bride and
corruption which make the borrowing more cumbersome and costly to the farmers. Therefore the
farmers had to resort to informal credit sources. To detangle the role of corruption and bribe in
the demand for agricultural credit, we have included the dummy variable of bribe for loan taking.
The results indicate that the element of bribe decrease the demand for formal loaning. From the
policy point of view, the target of effective loaning cannot be obtained in the presence of such
type of elements.
5. Concluding Remarks
Based on the cross-sectional analysis this study empirically examined the demand for formal and
informal sector credit by cotton growers in Bahawalpur. It explained how demand for formal and
informal credit is influenced by education of the farmers, farming experience, farm size, visits to
lending source, distance to formal credit source, transaction cost and bribery. The main finding is
that a number of formal credit institutions are operating in Pakistan. These institutions are still
unable to extend adequate credit to farmers particularly to subsistence and small farmers.
The evidence from this study suggests that education of the farmer and farm size positively
impact the demand for formal credit but visits to the source of loaning, distance of the formal
loaning from the farmhouse, transaction cost and bribe negatively impact the demand for formal
loaning and farmers switch from formal loaning to informal loaning.
The findings offer a number of important implications for policy makers.
For adequate availability of credit to the farmers, particularly to the small farmers, the
conditions of collateral should be relaxed.
The government must develop programs for remote areas to proide the credit to farmers.
The simplified and rapid loaning procedures with major emphasis on extension of credit
facilities to poor community farmers are strongly recommended.
Bribery, nepotism should be eliminated and transaction cost be minimized in formal
loaning agencies.
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References
Akram, W., Z. Hussain., M. H. Sial and I. Hussain (2008) Agricultural Credit Constraints and
Borrowing Behavior of Farmers in Rural Punjab. European Journal of Scientific
Research, 23,2: 294-304.
Barslund, M. and R. Tarp (2007) Formal and Informal Rural Credit in Four Provinces of
Vietnam. Discussion Paper. Department of Economics. University of Copenhagen,
Denmark.
Duong, P. and Y. Izumide (2002) Rural Development Finance in Vietnam: A Microeconomic
Analysis of Household Survey. World Development, 30,2:319-35.
Hoff, K. and J. E. Stiglitz (1993) Money lenders and Bankers: A Model of Fragmented Credit
Market with Monopolistic Competition. Paper presented at the Econometric Society
Meeting. Anaheim.
Kshirsagar, K. G. and D. Shah (2005) Rural Credit Delivery in Maharashtra: Experience with
Formal and Informal Lending Institutions. Econ WPA No. 051204, available at
www.repec.org
Manig, W. (1996) The Importance of the Informal Financial Market for Rural Development
Financing in Developing Countries: The Example of Pakistan. Pakistan Development
Review, 35,3:229-239.
Michael, O. F. (2008) Agricultural Loan a Means to Increase Agricultural Production in Ekiti
State, Nigeria. The Social Science, 3,4:332-340.
Shah, S. R., A. T. Bukhari., A. A. Hashmi and S. Anwer (2008) Determination of Credit
Program Participation and Socioeconomic Characteristics of Beneficiaries: Evidence
from Senegal. Pakistan Development Review, 47,4:947-959.
Singh, S., M. Kaur and H. S. Kingra (2009) Inadequacies of Industrial Agricultural Credit
System in Punjab State. Agricultural Economics Research Review. 22,309-318.
Udoh, E. J. (2005) Demand and Control of Credit form Informal Sources by Rice Producing
Women of Akwa Ibom State, Nigeria. Journal of Agriculture and Social Sciences,
1,2:152-155.
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The Impact of Intellectual Capital on performance

of Iranian food firms
Listed in ULRICH S
Amir Hosain Amir Khani

Department of Management, Tehran Payam-E-Noor University
Freyedon Ahmadi
Department of Management, Sanandaj Payam-E-Noor University
Golamhusain Homayouni
Department of Management, Tehran Payam-E-Noor University
Abstract
The purpose of this study is to analyze the indicators and variables of intellectual capital and
firm's performance as well as their relationships. For achieved the purpose mention above were
been selected 52 firms in t Kurdestan province in Iran.
In this study were used 3 component of intellectual capital such as human capital , structural
capital and costumer capital, also for deification of firm's performance have been used of three
dimension such as market valuation , profitability and productivity.
Results indicated there are meaningful relationship between intellectual capital and firm's
performance. Also the human capital have important role in enhance of productivity in Iranian
corporative companies.
Key words: Intellectual capital, human capital , structural capital , costumer capital ,
performance , market valuation , profitability , productivity
1. Introduction
With the emergence of knowledge-based economy, we have witnessed many changes in the
corporate nature of work. Changes also occur in the value as well as perception placed on
corporate performance s parameters. In this century, many business communities over the globe
agree that knowledge assets are becoming more critical in the corporate value creation than
physical production factors particularly in knowledge-intensive sector such as information
technology. Unfortunately, the traditional accounting convention is unable to accommodate the
need for reporting the knowledge assets. Thus, this phenomenon has created significant disparity
between the market value and book value of many companies.
Intellectual Capital is one aspect of essential resources for corporate success in a knowledge
economy. Many researchers noted that the large gap between book value and market value of the
companies over time resulted from many companies failed to report some hidden value in the
annual report (Brennan and Cornell, 2000; Mouritsen et al. 2004a). One would argue that this
gap reflects excessive speculations by market players. However, in the long run the market value
and book value discrepancy may be better explained by the change in the sources of value
creation as the economies have moved from tangible assets to intellectual capital (IC).
There are studies that have investigated IC performance and its relationships to board structure
(Ho and Williams, 2003) and company performance (Gan and Saleh, 2008). Investigating IC
performance is more significant than other accounting or market based performance measures
because it takes into consideration the performance of tangible as well as knowledge assets in
creating value.
The role of IC in creating value is crucial in attaining competitive advantage in the
marketplace and superior financial performance (Drucker, 1995; Marr and Schiuma, 2003).
However, there is a lack of appropriate measures of a companies IC (Chen et al, 2005). Thus,
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the continuing failure to identify, measure and understand the value of relevant IC components
may lead to inefficient investment decisions when the value of IC is not considered in the
decision making process.
There is no universal classification for IC. Prior research uses their own classification of IC
such as Scandia Navigator (Edvinsson and Malone, 1997), Balance Score Card (Kaplan and
Norton, 1996), Intangible Assets Monitor (Sveiby, 1997), Value Chain Score Card (Lev,
2001),Value Platform (Petrash, 1996) and many others. All of the IC classifications are not
entirely identical and some are simple and straight forward and some others are quite
complicated. However, the literature suggests IC can be classified into three common categories
namely i) human capital; ii) internal structure (i.e. organizational capital); and iii) external capital
(relational capital).
Human capital is the knowledge that employees take with them when they leave the
organization. Knowledge can be unique or generic which includes innovation, flexibility,
tolerance for ambiguity, motivation, satisfaction, learning capacity, loyalty and formal training
and education; know how, education, vocational qualification, work related knowledge and
entrepreneurial spirit (Brennan and Torous, 1999). The knowledge that embodied in employees
can be formalized through patents, copyright and brands (Bontis et al 2001). They argued that
human capital is important because it is a source of innovation and strategic renewal.
On the other hand, internal structure or organizational capital is the knowledge in the
organizations which is independent of people or can be simply defined as the knowledge that
stays in the organization whenever employees leave the organization. Examples are intellectual
properties, contracts, databases, information, systems, cultures, procedures, manual,
administrative system, routines and best practices (Brennan and Cornnell 2000; Bontis et al.,
2000; Edvinsson and Malone, 1997). According to Bontis (1998), if an organization has poor
systems and procedures, the overall IC will not reach the fullest potential.
The third component of intellectual capital is external structure. External structure (also known
as relational capital) is defined as valuable knowledge that interacts with the external sources of
the organization like customers, suppliers and creditors through networks, strategic alliances and
distribution channels (Bozzolan et al., 2003; Sveiby, 1997). These external sources create a
positive perception towards an organization, which include the image, reputation, customer
loyalty, commercial power, negotiating capacity with financial entities and environmental
activities.
In this research is used three dimension of IC: Human capital, Structural capital and costumer
capital.
There is no generally accepted definition of Intellectual Capital. However, many have offered
views that provide a general concept. One of the most succinct definitions of intellectual capital
is given by Stewart (1997), as packaged useful knowledge . He explains that this includes an
organization s processes, technologies, patents, employees skills, and information about
customers, suppliers, and stakeholders. Various other definitions use concepts such as ability,
skill, expertise, and other forms of knowledge that are useful in organizations. A comprehensive
definition of Intellectual Capital is offered by Brooking (1996). Intellectual Capital is the term
given to the combined intangible assets which enable the company to function . Petty and
Guthrie (2000) observed Intellectual Capital is instrumental in the determination of enterprise
value and national economic performance . While intellectual capital is generally intangible in
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nature, it is becoming widely accepted as a major corporate strategic asset capable of generating
sustainable competitive advantage and superior financial performance (Barney, 1991). Edvinsson
and Malone (1997) define the difference between a firm s market value and book value as the
value of intellectual capital. A firm s intellectual capital, in a broad sense, is comprised of human
capital and structural capital (Bontis, 1996). Human capital is employee-dependent, such as
employees competence, commitment, motivation and loyalty, etc. Although human capital is
recognized as being the heart of creating intellectual capital, a distinctive feature of human
capital is that it may disappear as employees exit (Bontis, 1999). In contrast, structural capital
belongs to firms, including innovative capital, relational capital, and organizational
infrastructure, etc. Recognizing the value of intellectual capital is consistent with the theory of
stakeholder view (Donaldson and Preston, 1995), which maintains that stakeholder relationships
include all forms of relationship of the company with its stakeholders, e.g. employees,
customers, suppliers, and residents of the community.
In the other hand classification of different components of Intellectual Capital facilitates to apply
the concept at strategic and operational level. According to Edvinsson and Malone (1997),
Intellectual Capital takes three basic forms: human capital, structural capital, and customer
capital. Human capital includes knowledge, skills, and abilities of employees. Human capital is
an organization s combined human capability for solving business problems. Human capital is
inherent in people and cannot be owned by organizations. Human capital also encompasses how
effectively an organization uses its people resources as measured by creativity and innovation.
Structural capital is everything in an organization that supports employees (human capital) in
their work. Structural capital is the supportive infrastructure that enables human capital to
function. Structural capital includes such traditional things as buildings, hardware, software,
processes, patents, and trademarks. In addition, structural capital includes such things as the
organization s image, organization, information system, and proprietary databases. Because of its
diverse components, Edvinsson and Malone classify structural capital further into organizational,
process and innovation capital.
Organizational capital includes the organization philosophy and systems for leveraging the
organization s capability. Process capital includes the techniques, procedures, and programs that
implement and enhance the delivery of goods and services. Innovation capital includes
intellectual properties and intangible assets. Intellectual properties are protected commercial
rights such as patents, copyrights and trademarks. Intangible assets are all of the other talents and
theory by which an organization is run.
Customer capital is the strength and loyalty of customer relations. Customer satisfaction, repeat
business, financial well-being, and price sensitivity may be used as indicators of customer
capital. The notion that customer capital is separate from human and structural capital indicates
its central importance to an organization s worth. The relationship with customers is distinct
from other relationship either within or outside an organization.
Brooking (1996) suggests that Intellectual Capital is comprised of four types of assets: (i) market
assets, (ii) intellectual property assets, (iii) human-centered assets and (iv) infrastructure assets.
Market assets consist of such things as brands, customers, distribution channels, and business
collaborations. Intellectual property assets include patents, copyrights, and trade secrets. Humancentered assets include education and work-related knowledge and competencies. Infrastructure
assets include management processes, information technology systems, networking, and
financial systems.
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Given the growing gap between the market and book values of firms, investigation into how to
measure firms intellectual capital and whether capital market is efficient with intellectual capital
has been drawing broad research interest. By modeling sales as a function of a firm s
organizational capital, net fixed assets, number of employees, and R&D capital, Lev and
Radhakrishnan (2003) developed a firm-specific measure of organization capital. Using a sample
of approximately 250 companies, they showed that organizational capital estimate contributes
significantly to the explanation of the market values of firms, beyond assets in place and growth
potential.
Similar to the concept of Skandia Navigator (see Bontis et al.,1999), Public (2000a, b) depicted
firms market value as created by capital employed and intellectual capital, which consists of
human capital and structural capital. He proposed the VAIC method to provide information
about the value creation efficiency of tangible and intangible assets within a company. Instead of
valuing the intellectual capital of a firm, the VAIC method mainly measures the efficiency of
firms three types of inputs: physical and financial capital, human capital, and structural capital,
namely the Capital Employed Efficiency (VACA), the Human Capital Efficiency (VAHU), and
the Structural Capital Efficiency (STVA). The sum of the three measures is the value of VAIC.
Higher VAIC value suggests better management utilization of companies value creation
potential. Using data from 30 randomly selected companies from the (UK) FTSE 250 from 1992
to1998, Public (2000b) also showed that the average values of VAIC and firms market value
exhibit a high degree of correspondence.
3. Relationship between IC & corporate performance
Intellectual capital management has been the core of the enterprise operation in knowledge era.
Through research by Bornemann et al. (1999) found enterprises, which manage their intellectual
capital better, owned stronger competitive advantage than the general enterprises, and companies
which strengthen their own intellectual capital management often perform better than other
companies (Bomemann et al. 1999; Johanson 1999). Brennan and Connell had published papers
and pointed out intellectual capital management played an important role on the long-term
business performance of an enterprise (Brennan et al., 2000). At present, in domestic the
researches on intellectual capital and enterprise performance focus on human capital and
enterprise performance. For example, FANG Run-sheng, LI Yuan (2002), who gave empirical
analysis on the changes of enterprise management persons and business performance thought the
changes of human capital structure management played noticeable positive role on enterprise
performance improvement. Zhu Xing-zhen (2003), who analyzed the human capital which
played a role on enterprise profitability capacity, liquidity capacity, and operational capacity and
development capacity, pointed out that human capital is a critical factor to enterprise
performance.
Intellectual capital of knowledge at the core plays a more important role on the enterprise
performance and gains competitive advantage (Teece 2000).Thus it can be seen, in theory
research, scholars generally point out that there are positive relevant relationships among
intellectual capital and the market value of enterprises, stock prices, business performance, and
intellectual capital can build and maintain business performance and competitive advantage
(Edvinsson and Malone 1997; Stewart 1997; Youndt and Snell 1998; Brennan and P. 2000).
Researches indicate that there are very few literature researches on the relationship between the
components of intellectual capital and the enterprise performance, and there is no literature
research on study the relation between intellectual capital and enterprise performance according
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to empirical evidence of Iranian s securities market from the various components of intellectual
capital perspective. Whether is intellectual capital able to positively promote corporative firms
performance like matter capital? Comparing intellectual capital with physical capital, which
plays more visible role in positively promoting the performance of corporative firms? How do
human capital and structure capital as well as costumer capital which are the components of
intellectual capital impact the corporative firm's performance? This paper will study the above
issues from the human capital, structure capital and costumer capital perspective which are the
components of intellectual capital, and empirically research on the relations between intellectual
capital and corporative firm's performance will be done.
4. Conceptual framework
The framework for this study as in Figure 1, shows that VAIC influences corporate performance
and the market value of companies. This study is the adaptation of the study by Kin Gan and
Zakiah Saleh(2008) of which the theoretical framework is depicted in Figure 1.
Figure1. Theoretical Framework
Market valuation
Human capital
Structural capital
Intellectual capital
Performance
Costumer capital
Productivity
Profitability
5. Hypotheses
H1.There is a significant relationship between IC and market-to-book value ratios.
H1a. There is a significant relationship between human capital efficiency and market-to-book
value ratios.
H1b. There is a significant relationship between structural capital efficiency and higher marketto-book value ratios.
H1c. There is a significant relationship between costumer capital efficiency and market-to-book
value ratios.
H2. There is a significant relationship between IC and profitability.
H2a. There is a significant relationship between human capital efficiency and profitability.
H2b. There is a significant relationship between structural capital efficiency and profitability.
H2c. There is a significant relationship between costumer capital efficiency and profitability.
H3 There is a significant relationship between IC and productivity.
H3a. There is a significant relationship between human capital efficiency and productivity.
H3b. There is a significant relationship between structural capital efficiency and productivity.
H3c. There is a significant relationship between costumer capital efficiency and productivity.
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6. Research method
In this study we selected 52 corporative firms in Kurdestan province (Iran). Models in this study
are an adaptation from the study carried out by Kin Gan and Zakiah Saleh (2008).The formulas
used were duplicated from this study.
Model 1 examines the relationship between market-to-book value (M/B) ratios and the aggregate
measure of intellectual capital, VAIC.
Models 2 and 3 examine whether the aggregate measure of VAIC is associated with firms
profitability and productivity.
The dependent variables are market to-book value, profitability as measured by returns on assets
(ROA); and productivity as measured by returns on assets turnover (ATO).
M/Bit = 0 + 1 VAICit + it (1)
ROAit = 0 + 1 VAICit + it (2)
ATOit = 0 + 1 VAICit + it
Model 4, 5 and 6 on the other hand, examine the relationship between market-to-book value
(M/B) ratios, ROA and ATO and the individual components of VAIC.
M/Bit = 0 + 1 CCEit + 1 HCEit + 1 SCEit + it (4)
ROAit = 0 + 1 CCEit + 1 HCEit + 1 SCEit + it (5)
ATOit = 0 + 1 CCEit + 1 HCEit + 1 SCEit + it (6)
6.1 Measurement of Variables
6.1.1 Dependent variables
In this study, return on assets (ROA) is used as the measure of profitability, where:
Returns on Assets (ROA): Ratio of net income divided by book value of Total assets
Asset turnover (ATO): Ratio of total revenue to book value of assets
Market-to-book value ratios of equity (M/B): M/B is the total market Capitalization to book
value of net assets
Market value of common stock = Number of shares outstanding x Stock price at the end of the
year
Book value of common stocks = book value of stockholders equity
6.1.2 Independent variables
The Value Added Intellectual Capital (VAIC) forms the measurement for the independent
variables in this study. VAIC measures how much new value has been created per invested
monetary unit in resources. It is an analytical procedure designed to enable the various
stakeholders to effectively monitor and evaluate the efficiency of Value Added by a firm s total
resources and each major resource component. A high coefficient indicates a higher value
creation using the company s resources, including IC.
VAIC is a composite sum of three indicators of human capital efficiency (HCE) , structural
capital efficiency (SCE) and costumer capital efficiency (CCE).
The procedures for computing VAIC are as follow:
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Step 1
Calculate Value Added, which is derived from the difference between output and input.
VA = Output - Input
Consistent with Belkaoui (2003), value added is expressed as:
VA = S B DP = W + I + T + D + NI
Where S is the net sales revenues; B is cost of goods sold; DP is depreciation;
W is staff costs; I is interest expense, D is dividends; and T is taxes and NI is the net income.
Step 2
Calculate costumer capital (CC), human capital (HC) and structural capital (SC). Pulic (1998)
states that CCi is:
CC i = book value of the net assets for firm i;
Edvinsson and Malone (1997) and Pulic (1998) stressed that total salary
and wage costs are an indicator of a firm s HC, as such,
HCi = total investment in salary and wages for firm i;
To derive the value of SCE, the value of a firm s structural capital needs to be established first.
Under Pulic s model, SC is VA minus HC. The lesser the contribution of HC in value creation,
the greater is the contribution of SC. Pulic proposes calculating SC as:
SCi = VAi HCi; structural capital for firm i.
Step 3
The final step is to compute Costumer capital employed efficiency (CCE), human capital
efficiency (HCE) and structural capital efficiency (SCE). These values are derived using the
formulae given below:
CCEi = VAi/CEi; VA costumer capital coefficient for firm i
HCEi = VAi/HCi; VA human capital coefficient for firm i
SCEi = SCi/VAi; VA structural capital coefficient for firm i
In this study, Costumer capital employed efficiency (CEE), shows how much new value has been
created by absorption one Costumer. Human capital efficiency (HCE) on the other hand,
indicates how much value added has been created by one financial unit invested in the
employees. Finally, structural capital efficiency (SCE) is the indicator of the VA efficiency of
structural capital.
6.2 Descriptive Statistics
Table 1 presents the descriptive statistics for the dependent and independent variables. The
mean for M/B is 2.2 , which implies that investors generally value the sample firms in excess of
the book value of net assets as reported in the annual reports (2009). Profitability (ROA) and
productivity (ATO) have a mean of 20 and 12 per cent, respectively. A VAIC of 5.3 was
obtained, indicating that the firm created RM 5.3 out of every RM1 invested in the firm.
However, if the components are examined individually, it is evident that costumer capital (mean
= 1.76) is more efficient in comparison to Structural capital (mean = 1.53) and Human capital is
the most of them (mean = 2.01).
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Table1. Descriptive statistics of selected variables

Variable Description
Variable name
Mean
Standard Deviation
MB
2.0200
.46628
Profitability
ROA
.20787
.085430
Productivity
ATO
.1255
.06174
Value Added Costumer Capital Efficiency
CCE
1.7601
.39914
Value Added Human Capital Efficiency
HCE
2.0147
.58167
Value Added Structural Capital Efficiency
SCE
1.5333
.39351
Total Value Added Intellectual Capital
VAIC
5.3081
1.17337
Total performance
PER
2.3533
.60400
Market Valuation
6.3 Correlation Analysis

The output given in Table 2 below depicts that there is a significant positive relationship
between VAIC and ROA, ATO, MB, CCE, HCE and SCE at the 0.01 significance level. This
means that VAIC is positively associated with profitability, productivity, Market Valuation,
human capital efficiency and structural employed efficiency as well as costumer capital
efficiency. As such when the VAIC increases, it is expected that Market Valuation, profitability,
productivity, human capital efficiency and structural capital efficiency as well as costumer
capital efficiency, will also increase. The result shows that correlation between intellectual
capitals with the market valuation is more than correlation between IC with profitability and
productivity. Also human capital has more correlation with productivity, structural capital has
more correlation with profitability and costumer capital have more correlation with productivity.
Based on Table 2 all of Hypotheses are accepted. But for testing of fit model is used of AMOS18
software.
X1
X2
X3
X4
X5
X6
HCE
=0.748
SCE
0.415**
CCE
0.461**
0.395**
VAIC
0.447**
0.411**
0.401**
ROA
0.398**
0.417**
0.116
0.461**
ATO
0.417**
0.368**
0.347**
0.447**
0.361**
MB
0.214*
0.324**
0.318**
0.298*
0.247*
0.237*
PER
0.311**
0.218*
0.217*
0.317**
0.318**
0.361**
X7
X8
0.315**
** Significant at 0.01 level, * Significant at 0.05 level

Table 1: Correlations between component of IC and PER
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The result indicates the variables are positively related and somewhat correlated, with strengths
ranging from .116 to .461. Even though correlation by itself does not imply causation, it is nonethe-less required in order for there to be a causal relationship (Hair et al., 1998). Therefore, this
result is useful towards making causation in this study.
The structural model was analyzed using the Amos 18. The final SEM framework for this study
is presented in Figure 2. The analysis of the structural model resulted with a chi-square value of
28.168 with 17 degrees of freedom and a probability level of 0.043. This test statistic indicates
the overall fit of the model to the data. Since the probability value of the test is just below the .05
level used by convention, we are forced to investigate the models fit by examining the fit indices.
The chi-square test is sensitive to sample size and the models degrees of freedom, and for this
reason the test is difficult to use as a sole indicator of SEM fit (Hair et al., 1998). The observed
variables were: HCE= Value Added Human Capital Efficiency; CCE= Value Added Costumer
Capital Efficiency; SCE= Value Added Structural Capital Efficiency, MB= Market Valuation ,
ROA= Profitability and ATO= Productivity. The hidden variables were: VAIC= Total Value
Added Intellectual Capital , PER= firms performance .
6.4 Structural Model Analysis
For analysis of fit model was used of Amos software ( version 18).
The results of this estimate were shown in figure 3.
Figure 3 Structural Model Test Results
HCE
MB
0.44*
0.61*
0.85*
CCE
VAIC
PER
0.57*
0.52*
0.51*
0.75**
ROA
SCE
ATO
Chi-square=28.168, dof=17,
prob. =.043, RMSEA=0.069, NFI=0.935, CFI=0.973, RFI=0.894, TLI=0.955
Since the chi-square test is known to be sensitive to sample size and non-normality in the
underlying variables, further investigation is required in order to determine if the overall fit of
the model to the data is truly acceptable. The comparative fit index (CFI) can also be used to test
the absolute fit of the model. In this case the CFI value is 0.973 which is above the .9 level used
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by convention. Thus, it is safe to say that the model does fit the data very well. The TuckerLewis Index (TLI) is another fit index whose value closest to one indicates good model fit. The
TLI for the model in this study is 0.955, which also indicates great fit. The Root Mean Square
Error of Approximation (RMSEA) is another fit index whose value signifies the level of error of
approximation. Values under .07 would indicate a reasonable amount of error, and values near
.05 would indicate a close fit to the model. The RMSEA for this study is .069, which also reveals
a very good fit between the model and the data in question.
7. Conclusion
This study shows relationship between intellectual capital and firm's performance. The results of
this study indicate that there are meaning full correlation between components of intellectual
capital and dimension of performance firms. In this correlation the role of human capital is very
important because human capital have critical impact on firm's productivity. If in the firms pay
attention to absorption of expert personnel and develop of satisfaction of current staff in
organization their performance will improvement.
Furthermore this results consistent with Kin Gan et al (2008) study, their finings show that
physical capital efficiency is the most significant variable related to profitability while human
capital efficiency is of great importance in enhancing the productivity of the company. This may
serve as an indicator to firms of the importance of IC in developing the economy on balancing
the resources for investing in IC especially in human capital.
Correlation between IC with market valuation is not consistent with Kin Gan et al (2008) and
Firer and Williams (2003) . Gan et al finding indicate that M/B is a very poor predictor of the
efficiency of a firm. also Firer and Williams (2003) finding show that indicates that the South
African market continues to place greater faith and value in physical capital assets over
intellectual capital assets.
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Identify factor that impact on develop of knowledge

Management in Automobile Industry
Listed in ULRICH S
Freyedon Ahmadi
(PHD in public management)
Assistant Professor, Sanandaj Payam-E-Noor University
Jalale shirzade
Sanandaj Payem-E-Noor University
Abstract
This article has as its main objective to identify the elements of knowledge management within
the scope of the organizational structure and Organizational culture of a Automobile industry .
To reach the proposed objective, a qualitative research with a study case in a Automobile
industry of the city of Isfahan (Iran) was carried out. As result of the research, a top-down
organizational structure is found out, in which the upper management creates the basic concepts
so that the inferior levels can implement them. However, it is inefficient in stimulating the
necessary dynamic interaction for organizational knowledge creation. As to the organizational
structure compatible with knowledge management in the company, the data show a deficiency in
the following aspects: team work, little delegation of responsibilities. Also Knowledge
management is important to achieve competitive advantage, as well as organizational culture in
implementing and protecting knowledge management.
Keywords: Knowledge Management, Organizational Structure, Organizational culture ,
Automobile Industry
1. Introduction
Knowledge Management (KM) is, in the organizational management, an area that has received
increasing attention. This is the era of knowledge, in which the creation and management of
knowledge have become the central aspect of decisions and economic growth. For Drucker apud
Nonaka e Takeuchi (1997, p. 5), "in the new economy knowledge is not only one more resource,
along the traditional production factors, work, capital and land, but the only significant resource
currently".
Corroborating with the above-mentioned idea, Terra (2000, p. 1) affirms that "the main input of
workers is not the physical effort anymore, but the capacity to create, to learn and to develop
new concepts, products and services based strictly in knowledge".
According to Muller e Grings (2003), the competitive factor is knowledge and the abilities of
people in each organization. Thus, many organizations have realized the importance of easy
systematic actions to identifying, developing, sharing, using and holding back knowledge.
For Terra (2000), KM must be related to seven dimensions that evaluate the existence of action,
values, rules and compatible mechanisms with the implantation of a management systems
process that involves three different levels of the managerial practice: the strategic, the
organizational and the structural ones.
In the organizations, many data and information are lost due to non-comprehension on the part of
their managers and collaborators of the difference between the many types of knowledge,
making it difficult, thus, the creation of an organizational memory (LINKE, 2001).
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There are two types of knowledge highlighted by Nonaka e Takeuchi (1997, p. 7):
The explicit knowledge can be expressed in words and numbers, and easily communicated and
shared under the form of raw data, scientific formulas, codified procedures or universal
principles, and the tacit knowledge is highly personal and difficult to formalize, what makes it
difficult to be transmitted and shared with others. The tacit knowledge is deeply rooted in the
actions and experiences of an individual, as well as in their emotions, values or ideals.
Nonaka e Takeuchi (1997) go on affirming that, in order for the tacit knowledge to be
formalized in organizations, it will have to be converted into words or numbers that any one can
understand. It is precisely during the time when this conversion occurs from tacit to explicit and,
again in tacit, that the organizational knowledge is created.
In the words of authors Krogh; Ichijo e Nonaka (2001, p. 15), "to admit the value of the tacit
knowledge or discovering how to use it is the main challenge of a creative knowledge company,
demanding open conversations and good personal relationships that is, the qualification for
knowledge".
2. Explaining of topic
2.1.Relationship between organizational culture and KM
Existence of a flexible organizational culture which could support changes well and keeps
the organization in a stable competitive benefit appears necessary. Because organizational
culture is the identity of an organization and individuals are acted unconsciously in accordance
with it (Davenport and Prusak, 1998). Members of the organization have a kind of mental
inference and judgment from characteristics and factors such as creativity, organizational
dependence (identity), integration, power distance, risk acceptance, group work, accountability,
communications model and managerial support. This general inference and understanding of the
organization causes the formation of a specific shape for organizational culture or its identity. It
is the organizational culture and its characteristics that determine job and organizational behavior
of employees. If a culture exists and it is possible to discuss about it, it should have specific
dimensions which are definable and measurable. Culture of each organization is affected to a
large extent by national values, beliefs and norms of that organization. National culture has more
effects on activities of employees than organizational culture (Davenport and Prusak, 1998).
With due attention to the increasing speed of transitions, violence of competitive
environment, transitions of information technology and lack of environmental confidence in
today world, knowledge is the most strategic source for maintaining and strengthening of
competitive benefit. Effective management of knowledge is one of the most serious challenges of
organizations (Nonaka and Takeuchi, 1995). Knowledge management could not be effective in
an organization in which no important organization transition has occurred, because it is the
basic human force and basis of knowledge management and success of knowledge management
depends much on deep changes of its culture (Nonaka and Takeuchi, 1995). Current
organizations should develop and encourage a culture that is supportive of processes of
knowledge management in order to be encountered with transitions and lack of environmental
confidence and also gaining of stable competitive benefit and it should provide necessary
grounds for them. Industrial organizations in general and especially automobile industry are not
excluded from this principle. Automobile industry has a specific importance because of its
extensive nature that is partially reflection of human achievements' collection in different
industries and also because of being mobile for various industries and general need of
consumers.
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Many of the clear-sighted have compiled a model based on their definition of organizational
culture and each one has considered special aspects and based on it they have proposed different
variables for describing of organizational culture. Obtained cultural dimensions in these
researches could not draw Iranian indicators of culture properly. It is possible to relate this issue
to the existent cultural variation in Iranian society or consider it in describing and clarifying of
Iranian specific culture through deficiency of obtained indicators. Many of the pensive believe
that identity of Iranian culture is influenced by three religious, national and western cultures that
are always refining and changing. Extreme cultural dynamism, change and transition during
recent decades constitute another aspect of special characteristics of Iran's society (Holowzki
,2002).
Tyler (1871) is the first one who has offered a formal description of culture term. He defined
this word as a complicated generality which consists of knowledge, belief, art, ethics, rule,
customs and every other capability and habit that is achieved by an individual as a member of the
society. Many definitions and descriptions of culture exist in different courses such as
anthropology, sociology and archeology. In studying of classic literature, 164 different
definitions of culture have been found. Some of these definitions include every thing from rule
and religion to art, while some other put emphasis on specific value orientations. Hidden beliefs
are the thing that builds the nature of culture which individuals have learned commonly and
regulate daily behaviors according to it. Some have defined organizational culture as a set of
common values, expectations, attitudes and norms that creates cohesion for the organization
(Lemken, Kahler, H., & Rittenbruch, 2000). Today, organizations that have distributed their
branches all throughout the world displace their specific culture for cultural characteristics of
communities and nations in which they perform activity (Oliver and Kendadi, 2006).
Putnam (2002) believes that if a durable lesson from primary councils of social capital
exists, it would be that it is not possible to suppose social capital is a good thing at every time
and place and we must be attentive of its potential weaknesses. Just as a nuclear power station
indicates huge investment in physical capital, despite the fact that leakage of radioactive might
mean its pure value is considered negative for the society. So, networks and norms benefit those
who belong to them, at the cost of those who don't belong to them. Therefore, it could be said
that as organizational culture obliges group members to perform useful works with each other, it
could obliges them to prejudicial, individual, narrow mindedness, pessimistic and even delusive
activities towards individuals out of the group. Common values and world view don t guarantee
quality, intellectuality and utility of the group. Managers must be vigilant that organizational
culture has consistency with commission and strategies of the organization. Organizational
culture is a two blade sword. From one side it is a bed that facilitates access to organizational
purposes and from the other side it could be a barrier on the way of executing of changes in the
organization . Several variables and factors are mentioned for organizational culture and through
studying of them and literature the researcher has selected the following factors for studying in
automobile industry.
2.2.Relationship between organizational Structural organization and KM

The current context is characterized by accelerated changes in markets, in technologies and in
organizational structures, and the capacity to generate and to absorb innovations is considered
crucial in order to organizations become competitive.
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For Terra (2000, p. 115), "the strict bureaucratic model of organization is becoming more and
more inadequate to face the current challenges imposed to companies". The above-mentioned
author affirms that the bureaucratic companies are found, in general, in relatively steady
environments, while those that are breaking with the bureaucratic paradigm are found in more
dynamic sectors and more intensive in knowledge.
Terra (2000) presents two main groups of theoretical thinking and practical action in the
companies, in terms of implantation of innovative organizations, which are now presented:
Organizational Structures that are above the hierarchic-bureaucratic structure: admitting that
bureaucracy does not generate creativity, but it is adequate for knowledge accumulation, and that
the organization involving task force, although providing knowledge creation, does not make its
transference to the organization easier, some companies have worked on similar solutions that
combine these types of structure.
Organizational Structures that look for breaking with the hierarchic-bureaucratic tradition. These
new forms have the following characteristics: work in team; leadership changes according to the
needs of projects; more delegation of responsibilities for getting in touch with customers;
reduction of the hierarchy to the minimum possible; teams or work units have a wide array of
responsibilities; work teams are supported by intelligent information systems that guarantee the
capture, codification, transference and fast access to knowledge accumulated by the company;
information and training must be provided just-in-time to perform; the systems for evaluation of
employees take into account the opinion of all the people with whom each individual worked.
According to Nonaka e Takeuchi (1997) the dominant models of managerial process, those
which were implanted before the sprouting of KM are: the top-down model and the bottom-up
model, both inefficient as to stimulating the necessary dynamic interaction to creating
organizational knowledge. The model considered by the above-mentioned authors, called
middle-up-down, is superior for the creation of knowledge in relation to the traditional models,
because it places the average-leveled manager in the center of knowledge management and
redefines the role of the upper management and the employees of the front line. Top-down
management is the classic hierarchic model, having its roots in Max Weber and Frederick
Taylor, using the division of work, in which the upper management creates the basic concepts so
that the inferior levels can implement them.
As for the bottom-up management, it is basically a top-down management reflected in the mirror,
considering that the hierarchy and the division of work give place to autonomy, with knowledge
being to a large extent controlled in the base. This organization has a format of few hierarchic
levels, where managers give few orders and instructions, but serve as sponsors of the employees
in the front line. This model is well-applied at 3M, whose basic principles are autonomy and
enterprising spirit, translated into practices such as: absence of excessive planning; reduced
paper use; acceptance of errors as something normal; regular border crossing; encouragement for
initiative taking; flow of ideas from bottom to top; minimum interference of the superior levels;
incapacity of the superior levels to defeat an idea and maintenance of a flat and small
organizational structure (LINKE, 2001)
As to these first two models, top-down is adequate to deal with explicit knowledge, but it does
not serve for knowledge creation, because it ignores the development of tacit knowledge, being
able to occur the destination alignment of some managers with the company s destination. The
bottom-up model on its turn is adequate to deal with tacit knowledge, but its emphasis on
autonomy makes it difficult the creation, dissemination and sharing of knowledge within the
organization (NONAKA e TAKEUCHI, 1997).
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Considering that in the two presented models middle management does not appear, because it
only processes information, not creating new knowledge, Nonaka e Takeuchi (1997), according
to their studies in Japanese companies, raised the third alternative to manage and to create
knowledge, that is, the middle-up-down model.
According to Nonaka e Takeuchi (1997, p.147), "in the middle-up-down model, the upper
management creates a vision, a dream, while the middle management develops more concrete
concepts than the employees of the front line can understand and implement. The mid-level
managers try to solve the contradiction between what the upper management hopes to create and
what really exists in the real world".
It is observed that the communication between all the hierarchic levels is fundamental, with the
middle-up-down model, in the opinion of authors Nonaka e Takeuchi, the one that better plays
this role, since it has a responsible for operating the connection between the top and the base of
the pyramid
3. Hypotheses of research
3.1.
Knowledge-oriented organizational culture affects knowledge management in
3-1-1-Knowledge creating organizational culture affects knowledge management in
3-1-2-Knowledge maintaining organizational culture affects knowledge management in
3-1-3-Knowledge sharing organizational culture affects knowledge management in
3-1-4-Knowledge applying organizational culture affects knowledge management in
3.2.
Organic structure affects knowledge management in automobile industry.
3-2-1- team work affects knowledge management in automobile industry
3-2-2- more delegation of responsibilities affects knowledge management in
automobile industry
3-2-3- flexibility affects knowledge management in automobile industry
4. Research method
This research that has been performed in the time period of autumn-2008 until autumn-2010 is
applicative and from the nature viewpoint is metrical-descriptive in which data collection has
been done through field study mainly. The major tools of data collection are two ascertained
questionnaires that are compiled based on theoretical principles of subject. Cronbach's alpha
coefficient of the first questionnaire is 0.92 and the second one is 0.972. Various levels of
employees and managers of automobile industry form the second phase of statistical population
of the research. In the first phase of research we have used improbable sampling and simple
sampling method. It is in the way that the questionnaire has been sent to those accessible
individuals or their mail address or electronic-mail has been existed. In the second phase,
classified sampling has been applied. For performing of factoral analysis it is necessary to
measure 5 to 10 sample per variable and totally a maximum of 300 samples. With regard to the
point that 40 variables should be measured in the questionnaire, 250 questionnaires have been
distributed among the respondents whether in their presence, sending by mail or sending e-mail
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.Many of workers and employees, supervisors and authorities, experts and managers of
automobile industry from various classes were selected to answer to the questions for classified
sampling that is one of the probable samplings. In order to determine the sample volume, a
preliminary study has been performed with distributing of questionnaires among 30 employees
of automobile industry which is estimated to 120 persons by primary sample variance estimation
on significant level of 0.01 and permissible error of 0.06.
For analysis of data in the exploratory phase of research, confirmative factoral analysis method
has been used to find out basic indicators of organizational culture and organizational Structural
and group summation of variables. Regression test is used to measure research hypotheses and
studying the effect of indicators of organizational culture and organizational Structural on
knowledge management. Structural equations model and AMOS 18 software have been applied
to test the model through the relation among variables.
5. Data analysis
5.1- Ranking of components and indicators of knowledge management
Friedman test has been used in this research for ranking of components and indicators of
knowledge management. Results of this test show the significance of ranking on 0.01 level about
the components and indicators of knowledge management in the current state. Ranking of
indicators of knowledge management are significant on 0.01 level in an ideal state, but ranking
of indicators of knowledge management on 0.01 level is not significant. The obtained results
indicate that the lowest attention has been paid to applying and creating of knowledge and in
return the most attention has been paid towards maintenance among the indicators of knowledge
management. Among the indicators of knowledge creating component, the lowest attention has
been given to financial support and cohesive relation of the company with centers of research
and development and universities for using of their results. About component of knowledge
keeping, the lowest attention is given to support from learners and mental capitals of the
company. About sharing of knowledge, the lowest attention is given to reward, encouragement
and evaluation of performance based on the amount of knowledge sharing. About the indicators
of knowledge applying component, the lowest attention is paid to the indicator of holding of
educational workshops. Among the indicators of knowledge creating component, the most
attention should be given to indicator of attracting of knowledge owners. Among the indicators
of knowledge keeping it must be given to indicator of support from learners and mental capitals
of the company and among the indicators of knowledge sharing, highest attention should be
towards indicator of using of services of information and communication technology for
accessibility of employees to the up-to-date technical knowledge. Among the indicators of
knowledge applying component the highest attention should be focused on indicator of
motivation and reward for using of knowledge (tables 2&3).
Table 2 Rating of Components of Knowledge management and their
indicators in current state
rank Components of Ranking
Indicators
Ranking
knowledge
of
of
management
average
average
Using of information technology in 12.32
Maintaining of knowledge
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Maintaining of 2.70
knowledge
2
Sharing
of 2.68
knowledge
3
Creating
of 2.40
knowledge
Legal preservation of innovations,

commercial marks and other effects
and commercial secrets
up to dating of the corporation's
Knowledge
with
regard
to
environmental changes and programs
of the corporation
recording of managers and employees'
experiences, lessons of previous
successes and failures
Supporting of learners and mental
capitals of the corporation
Holding
educational
courses,
seminars, conferences, exhibitions
and
conversation
rooms
and
participating in them
Existing of group working along with
discussion and conversation
Using of services of information and
communications
technology
for
accessing of employees to technical
modern Knowledge
Free current of information in the
organization
reward,
encouragement
and
evaluating of performance based on
the amount of knowledge sharing
Attracting of knowledgeable persons
Continuous contact with customers in
order to be aware of their needs
Offering of new ideas and solutions in
the organization continuously
creating of incentives for enhancing
of employees' knowledge level
financial support and cohesive
relation of the corporation with
centers of research and development
and universities for using of their
results
Applying of superior thoughts of
11.99
11.11
9.71
9.54
12.38
11.97
11.03
10.34
8.86
11.39
11.15
10.88
9.84
7.58
11.87
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4
Applying
of 2.23
knowledge
employees in operational processes

and products of the corporation
Number and new designs and
products
Reward and motivation for using
Applying of knowledge
Number of innovations of employees
holding of educational workshops, the
manner of operationalization of
knowledge of individuals
Table 3- Rating of indicators of knowledge management in ideal state

Components of knowledge management
Ranking
of
average
Attracting of knowledgeable persons
12.05
creating of incentives for enhancing of employees'
11.30
knowledge level
11.05
Offering of new ideas and solutions in the organization
11.02
continuously
9.51
Continuous contact with customers in order to be aware of
their needs
financial support and cohesive relation of the corporation
with centers of research and development and universities
for using of their results
Supporting of learners and mental capitals of the
11.39
corporation, association and up to dating of the
11.10
corporation's Knowledge with regard to environmental
10.60
changes and programs of the corporation
10.49
recording of managers and employees' experiences, lessons
9.95
of previous successes and failures
Using of information technology in Maintaining of
knowledge
Legal preservation of innovations, commercial marks and
other effects and commercial secrets
Using of services of information and communications
11.71
technology for accessing of employees to technical modern
Knowledge
10.90
reward, encouragement and evaluating of performance
10.21
based on the amount of knowledge sharing
9.55
10.30
10
9.48
8.27
Indicators of
knowledge
management
Creating of
knowledge
Maintaining
of
knowledge
Sharing of
knowledge
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Existing of group working along with discussion and

conversation
Holding educational courses, seminars, conferences,
exhibitions and conversation rooms and participating in
them
Free current of information in the organization
Reward and motivation for using Applying of knowledge
Number and new designs and products
Number of innovations of employees
holding of educational workshops, the manner of
operationalization of knowledge of individuals
Applying of superior thoughts of employees in operational
processes and products of the corporation
9.25
11.38
10.36
10
9.32
8.84
Applying of
knowledge
5.2- Ranking of factors of organizational culture and organizational Structural from the
viewpoint of effect on knowledge management
Friedman test has been used in this research for ranking of factors of organizational culture and
organizational Structural . Results on the significant level of 0.01 reveal that quality of
communications and power distance has the lowest advancement for knowledge management
respectively in current state among the factors of organizational culture also in the organizational
Structural Team Work , Flexibility and more delegation of responsibilities have the most
effect on knowledge management at an Current state (tables 4&5).
Table 4- Ranking of factors of organizational culture from the viewpoint of effect on knowledge
management at the current and ideal state
rank
factors of organizational culture
Ranking of average
1
accountability
4.90
2
organizational dependence (identity)
4.80
3
cohesion (integration)
3.64
4
individual creativity
3.63
5
6
power distance
quality of communications
3.55
3.31
Table 5- Ranking of factors of organizational Structural from the viewpoint of effect on

knowledge management at the current and ideal state
rank
factors of organizational Structural Ranking of average
1
team work
4.70
2
flexibility
4.52
3
more delegation of responsibilities
3.21
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5.3- Testing of research hypotheses

In order to test the research hypotheses and studying of the effect of factors of knowledgeoriented organizational culture and organic Structural on knowledge management in the current
and ideal state, multi type regression model has been used in step by step method. As it is
observed in table 6, coefficient of determination for the studying factors in the current state is
0.51 which shows that it is possible to describe 0.51 of changeability in knowledge management
by knowledge creating organizational culture and knowledge sharing organizational culture.
Moreover, results of variance analysis of regression test show that the regression model could
describe changes in dependent variable at the current state on significance level of 0.05. As it is
cited in table 7, coefficient of determination for the studying factors in ideal state is equal to
0.35. Variance analysis of regression test shows that the regression model could describe
changes in dependent variable (knowledge management) on significance level of 0.05. also the
same result have been attached for organizational Structure .
The most effective factor of knowledge-oriented organizational culture and organizational
Structure on knowledge management is knowledge creating organizational culture and
organizational Structure at the current and ideal state of automobile industry. Generally, the
regression model has the capability to describe changes in dependent variable on significance
level of 0.05 in two current and ideal states.
Table 6- Regression test of the effect of knowledge-oriented organizational culture factors on
knowledge management in current state
model
Correlation
coefficient
coefficient of
determination
Significa
nce level
Constant amount
knowledge creating
organizational culture
knowledge
sharing
0.71
0.51
60.6
0.000
Nonstandardized
coefficients
0.24
0.46
0.37
standardized
coefficients
0.43
0.34
Significance
level
1.11
4.56
3.62
0.271
0.000
0.000
Table 7- Regression test of the effect of knowledge-oriented organizational culture factors on knowledge
management in ideal state
model
Correlation
coefficient
coefficient of
determination
Significanc
e level
Nonstandardized
coefficients
standardized
coefficients
Significance
level
Constant amount
knowledge creating
knowledge applying
knowledge keeping
0.59
0.35
20.3
0.000
2.03
0.49
0.30
-0.24
0.56
0.35
-0.28
6.67
5.70
3.11
2.151
0.000
0.000
0.002
0.034
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Table 8- Regression test of the effect of knowledge-oriented organizational Structural

factors on knowledge management in current state
model
Correlation
coefficient
coefficient of
determination
Significa
nce level
Constant amount
knowledge
creating
organizational structure
knowledge
sharing
0.63
0.51
70.1
0.000
Nonstandardized
coefficients
0.22
0.42
0.31
standardized
coefficients
0.47
0.40
Significance
level
1.17
4.76
3.58
0.185
0.000
0.000
Table 9- Regression test of the effect of knowledge-oriented organizational Structural

factors on knowledge management in ideal state
model
Constant amount
knowledge
creating
knowledge
applying
organizational
culture
knowledge
keeping
Correlation
coefficient
coefficient of
determination
Significan
ce level
Nonstandardized
coefficients
standardized
coefficients
Significance
level
0.53
0.37
21.2
0.000
2.09
0.42
0.37
-0.21
0.56
0.35
-0.28
6.67
5.70
3.11
2.151
0.000
0.000
0.002
0.034
5.4- Testing of model of knowledge-oriented organizational culture and organic Structure based
on model of structural equations in the current and ideal state of automobile industry
Structural equations' analysis is used for testing of model in the current and ideal state and path
diagram has been used to clarify the effect of one variable on another variable. In this section
those factors of knowledge-oriented organizational culture and organic structure are considered
in the model that their effect on knowledge management have been proved in regression test.
For testing the model is used of AMOS 18 software. The result of this testing is addressed in the
below figure.
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Figure 1. The model indicate relationship between organizational culture and Structure
with KM
0.75*
0.59*
Organizational
culture
accountabil
ity
0.67*
0.67
0.53
identity
0.57*
integratio
n
0.47*
Organizational
Structure
0.44*
0.63*
individual creativity
KM
power
distance
quality of communications
0.7*
0.71*
* Significant at 0.001 level
0.58*
team
Chi-square=31.165, dof=11,
flexibility
more
delegation of
prob. =.054, RMSEA=0.067

NFI=0.995, CFI=0.968
RFI=0.867, TLI=0.943
6. Conclusion
In automobile industry the lowest attention has been given to components of knowledge creating and
applying respectively among the components of knowledge management. And among the indicators of
knowledge application, the lowest attention is given to indicators of holding educational workshops,
the manner of operationalizing of knowledge of individuals and number of employees' innovations,
respectively. On the other hand the highest attention must be given to indicators of motivation and
reward for using of knowledge and number of new designs and products with regard to application of
knowledge, while the lowest attention has been given. In automobile industry among the factors of
organizational culture, quality of communications and power distance has the lowest advancement for
knowledge management at the current state. Factors of cohesion (integration), quality of
communications and organizational dependence (identity) have the highest effect on knowledge
management in ideal state respectively. Also Team work , flexibility and more delegation of
responsibility have the highest effect on knowledge management .In the other hand in the organization
that we see dimension of cultural for example integration and identity and dimension of organic
structure for example Team work and flexibility creating of knowledge are easier.
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Causes of Disrespectful Behavior at Workplace:

A Study on Doctors of Public sector hospitals in Pakistan
Listed in ULRICH S
Usman Yousaf
Lecturer, Hailey College of Banking & Finance, University of the Punjab, Lahore, Pakistan.
Asad Ejaz
Lecturer, Hailey College of Banking & Finance, University of the Punjab, Lahore, Pakistan.
Bushra Usman
Faculty Member, Institute of Business Administration, University of the Punjab, Lahore,
Pakistan.
Saima Sardar
Area Head, KASB Bank Limited, Lahore, Pakistan.
Abstract
The purpose of this research was to explore the causes of disrespectful behavior of doctors
towards patients. Disrespectful behavior of doctors towards patients in public sector hospitals is a
serious issue that needs to be addressed. As the reporting of disrespectful behavior of doctors has
become more frequent, it is of vital importance to have a comprehensive understanding of
possible causes of disrespectful behavior. From a managerial perspective, it is also vital to be
aware of the organizational implications of disrespect, as this can potentially pose substantial
threat to the success of organizational work. The various factors that can influence doctors
disrespectful behavior towards patients must be identified to cope up with the problem. Instead
of this, there is a modest coverage of disrespectful behavior of doctors and also from patients in
the existing literature. Few relevant researches were mainly conducted in UK, USA, Canada,
Australia and Norway. But no research, according to best of our knowledge, has yet been
conducted on this issue in under developed and developing countries specially Pakistan. This
study is the first of its type which will be conducted in Pakistan. Quantitative research method is
used to identify the causes of disrespectful behavior. Data was collected through questionnaire
from 367 general physicians (450 questionnaires were distributed, response rate was 81.55%)
who are working in public sector hospitals in Punjab, Pakistan. The SPSS software was used to
analyze that data and to identify the relationship between independent variable (disrespectful
behavior of doctors towards patients) and dependent variables (9 factors that can instigate the
disrespectful behavior of doctors). The motivation for this research is to better understand the
causes of disrespect and extend the literature. This study will also allow hospital administrators,
with better understanding of the causes of disrespectful behavior in the workplace, to introduce
strategies aimed at reducing such incidences. Furthermore, this study will also help the hospital
administrators in development of better coping skills at all levels when disrespectful episodes do
occur.
Key Words: Disrespect, Workplace, Physician, Work Stress.
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1. Introduction
Every organization, especially service providers, that has human beings as workers regularly
experiences some sort of disrespectful behavior at workplace. As this is the nature of human
behavior (Bernstein & Fundner, 2003) so it is hard to imagine any workplace being exempted of
examples of this. Although, the higher expectations are associated with the people working in
hospitals because they are employees within those organizations where everyone is oriented
towards the noblest of goals, that of helping improve the health and welfare of fellow human
beings (Bernstein & Fundner, 2003) but still hospitals, which are also full of ambitious,
aggressive and goal-oriented individuals who also have substantial power within and outside the
organization, have similar track record of behavior like other organizations. Respect toward
patients is one of the most fundamental and central tenets guiding both modern bioethical
practice and the everyday behaviour of all healthcare professionals (Bernstein & Fundner,
2003). However, this phenomenon of respect is often violated in interactions between doctors
and patients (Miedema et al., 2009; Blanchard & Lurie, 2004). Disrespectful behavior of patients
and especially doctors in public sector hospitals is a serious issue that needs to be addressed at all
levels as reporting s of disrespect in the workplace especially in hospitals are becoming
increasingly frequent. Indications of this transpire in many aspects of everyday life, such as in
conversations with others, in magazines, newspapers, and on television. Due to the increasing
numbers of news channels and use of advance technology in Pakistan, disrespected patients and
doctors are now also able to share their experiences publicly. Electronic media such as Geo
news, Express News, Duniya News and print media such as Dawn, Jung, and Express
newspapers have all featured stories concerning disrespectful behavior pervasiveness in
hospitals. In recent past many such incidents were reported by news channels like the recent
incident of doctors and newsmen clash at Jinnah Hospital, Lahore (Dawn News, Thursday, 01
Apr, 2010). As patients and doctors reporting of disrespect become more frequent, it is vital to
have comprehensive understanding of possible causes of disrespectful behavior. Furthermore, the
disrespectful behavior at workplace can lead to an unhealthy work environment which may
further leads to high employee turnover. Because of this an organization may loose very talented
employees. On the other hand such behavior may also loose the relationship between
organization and its customers. When talking about health care settings, this scenario will leads
toward a situation where people, who are the customers of public sector hospitals, got annoyed
and may choose to discontinue their medical treatment. Instead of this, there is a modest
coverage of disrespectful behavior by patients and doctors in the existing literature. Accordingly,
it is important to gain an understanding of the various factors that can influence doctors and
patients disrespectful behavior towards each other, in an effort to begin to remedy the problem.
From a managerial perspective, it is also vital to be aware of the organizational implications of
disrespect, as this can potentially pose substantial threat to the success of organizational work.
Hence, disrespect is a key concern for both doctors and their patients. In the last decade, there
has been increased interest in disrespectful and destructive behaviors in organizations but little
work on this issue has been done for medical professionals. Relevant researches were mainly
conducted in UK, USA, Canada, Australia and Norway. But no research, according to best of our
knowledge, has yet been conducted on this issue in under developed / developing countries like
Pakistan. This study will be first of its type which will be conducted in Pakistan. The purpose of
this research is to explore the causes of disrespectful behavior of doctors towards patients at
public sector hospitals. The motivation for this research is to better understand the causes of
disrespect and extend the literature. This study will allow hospital administrators and managers
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to better understand the causes of disrespectful behavior in the workplace and to better
comprehend that how aspects of organization life might contribute to disrespectful episodes. This
will help them to introduce strategies aimed at reducing such incidences as well as contributing
towards the development of better coping skills at all levels when disrespectful episodes do
occur. The research begins with a review of existing literature on disrespect at workplace
followed by the research methodology, analysis, findings, and conclusion, which will includes
important implications for practitioners and potential directions for future research.
Although it is likely that disrespect is experienced across industries (Laschinger & Finegan,
2005) but among all, helping professions especially hospitals are relatively more stressful
working environments (Lee, Stewart & Brown, 2008) where the concerns of disrespect for
individuals may be particularly problematic and important.
2.1. Respect and Disrespect in the Literature
The concept of respect has been discussed more as compared to the concept of disrespect in
literature. Research relating to the concept of respect has been conducted in various fields of
human resource management (Darwall, 1977), psychology (Boeckmann & Tyler, 2002),
sociology (Pope, 1999), politics (Middleton, 2004), and relationship and marriage literature
(Kesler, 1994). On the other hand, much of the literature on disrespect can be found in the field
of psychology (Miller, 2001; DeCremer & Tyler, 2005; Hershcovis et al., 2007). It should be
noted that a handful of studies have been carried out to explore the causes and effects of
disrespectful behavior in hospitals and schools (Blanchard & Lurie, 2004; Shwalb & Shwalb,
2006).
2.2. Respect and Respectful Behavior
The Oxford English Dictionary calls respect a relation of one person or thing to another; to have
relation to, to refer (Oxford English Dictionary 1989).People believe that they are entitled to
respectful treatment by others (Baron, 1993; Bies & Moag, 1986) although it is often difficult,
even for those involved, to stipulate exactly what constitutes respectful treatment in a given
situation (Folger & Cropanzo 1998). Respect is multi-dimensional in nature and can be viewed
from a number of different viewpoints. Recognition and appraisal respect (Darwall, 1977) are the
two most repeatedly cited dimensions of respect in the literature. Recognition respect represents
a morel or ethical stance of respect. The moral stance, which refers to the duty to treat others
with respect and kindness that we demand for ourselves (Kent, 1959; De Cremer, 2002, 2003; De
Cremer & Tyler, 2005a,), is the most common viewpoint exhibited in the literature. The morel
dimension of respect explain that the respect is a signal of recognition as a person and it provides
information about one s status, prestige and a feeling of being accepted by others (De Cremer,
2002, 2003; De Cremer & Tyler, 2005a,). Kant (Hill, 2000, p. 64) acknowledged that it is a duty
to respect others as human beings and never simply as means (Kent, 1959). Everyone has equal
moral status regardless of their gender, nationality, religion or ethnic background (Hooft, 2010).
Alternatively, the positive evaluation of a person is regarded as appraisal respect which further
implies that the respect is for those who deserve it (Costley et al, 2005; Darwall, 1977). De
Cremer and Tyler (2005a) have shown that the strong desire of receiving respect is heavily
influenced by the reputation concerns and these concerns also have affects on people s selfCOPY RIGHT 2011 Institute of Interdisciplinary Business Research
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esteem to a larger extent lacking of which may, in extreme cases, lead to self-harm or harm to
others. People value respect because of the reputational concerns (Cremer & Mulder, 2008).
Cremer & Mulder (2008) further explains that the respect is a community based value and is a
right and duty of everyone (Kant, 1993). It should be recognised that the perceptions of respect
may be different across different cultures and social settings (Campbell, 2007; Middleton, 2004)
and is based on people s changeable expectations and perceptions (Campbell, 2007; Shwalb &
Shwalb, 2006; Sung, 2004). The type and strength of relationship is a strong determinant of how
one finds another s action disrespectful (Miller, 2001). But in all cases it is a very important
phenomenon of our social life because it communicates recognition of one s existence (Honneth,
1992) and respect substantiate an individual s value as a human being (Margolis, 2001).
The respectful behavior includes equal treatment, fairness and acceptance (Campbell, 2007;
Costley, Babis, Friend & FitzPatrick, 2004; DeCremer, 2002; Egge, 1999; Frei & Shaver, 2002;
Mazur, 2008) and an absence of any of these would be perceived as disrespect. These behaviors
are significantly important because unbiased and equal treatment allow people to feel respected
(Boeckmann & Tyler, 2002). An individual s perception of respect and disrespect does not only
base on the treatment he or she received but is also influenced by the treatment others receive for
which he or she is a witness to. For example witnessing the unfair treatment towards a team
member may alter one s perception of the fairness of the team (Colquitt, 2004). Similarly, the
extent to which others are respectfully or disrespectfully treated can influence an individual s
own perceptions of respect (Hornstein et al., 1995). Individuals engagement with their work and
their intentions to show group-serving efforts normally increases because of such respectful
behavior and can cause individuals to show extra performance (Sleebos, Ellemers & Gilder,
2007). Understanding, listening to the viewpoints of others (Frei & Shaver, 2002; Miller, 2001)
and tolerance (Campbell, 2007; Costley et al, 2004; Frei & Shaver, 2002) are also considered as
important constituents of respectful behavior. Furthermore, the willingness to forgo exercisable
power held by any person in any given situation is an indication of respect for the other person
(Bitran & Hoech, 1990). Furthermore, the feeling of organizational respect is also associated
with perceived organizational support (POS) (Rhodes & Eisenberger, 2002).
2.3. Disrespect and Disrespectful Behavior
Rude, aggressive, discourteous, disheartening, threatening, humiliating, blaming, demeaning or
abusive comment or conduct which violates norms of mutual respect can be described as
disrespectful behavior (Martin & Hine, 2005; Hadikin & O'Driscoll 2000; Bies, 1993; Bies &
Tripp, 1996). This behavior may be physical or psychological in nature and may directed
towards an individual or at a group as a whole. This disrespectful behavior can create an
unreceptive work environment which may limit individuals to work effectively in their pursuit of
work goals (Bernstein & Fundner, 2003; Kumar, 2009). Bullying, which is an intimidating,
criticizing, harassing, and aggressive behavior (Hadikin & O'Driscoll 2000), is also a form of
disrespectful behavior. Workplace bullying is a behavior of treating peers, managers, supervisors
or customers in an improper and disrespectful manner. Such conduct makes the recipient feel
upset, threatened, humiliated or vulnerable which weaken their self confidence (Sleebos,
Ellemers & Gilder, 2007) and which may cause them to suffer stress (Lim & Cortina, 2005). In
return disrespect for others creates a negative atmosphere, which then leads to distrust, hostility,
harassment, bullying, malpractices and frustration. (Sinha R. 2009). Interpersonal aggression is
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also a result of disrespectful behavior and it leads to further disrespectful behavior at workplace,
(Glomb & Huiliao, 2003). Perhaps the disrespectful behavior is recognized as the most common
source of anger and aggression (Bettencourt & Miller 1996, Cohen et al 1996). Miller (2001)
suggests that disrespect is a feeling which occurs when one feels that he or she is denied of
something for which they are entitled to. Consequently, disrespectful conduct is normally viewed
as injustice (DeCremer & Tyler, 2005; Honneth, 1992; Miller, 2001; Ward & Ostrom, 2006).
Bird (2004) describes disrespect as a failure to fulfill the social, ceremonial or ritual expectations
of respectful attitude in a specific situation and as the perception of disrespect is based on
individual expectations so it may vary for different people. Ramarajan & Barsade (2006) suggest
that disrespect causes lower satisfaction and is persistent and destructive in its long-term effects
while the respectful treatment also have long-term effects and may make a hardest jobs less
tough.
Negative judgment by others in a relational interaction arise the perception of disrespect. Lack of
acceptance between individuals is one of the causes for individuals feeling being negatively
judged by others (DeCremer & Tyler, 2005; Egge, 1999). Its effects between individuals and
when dealing in a group is different. The very factor of lack of acceptance brings with it
impoliteness and ignorance between individuals. Anyhow, when dealing in a group this very lack
of acceptance may cause expulsion and alienation. Discrimination is another important
determinant of disrespect which often results in judgmental disposition and a lack of acceptance.
Factors like demographics, physical appearance, and social and economic status are normally the
triggers of discrimination (Kumar, 2009). Unequal treatment and biasness are the most
significant examples of discrimination which arises the feeling of disrespect (Boeckmann &
Tyler, 2002; Buttny & Williams, 2000). One can be discriminated on the bases of factors like his
or her wealth, education, marital status, gender, physical or mental disability and social class
(Blanchard & Lurie, 2004; Buttny & Williams, 2000; Mastrofski et al, 2002; Egge, 1999).
Additional factors such as personality and dressing could also instigate discriminatory behavior
(Kumar, 2009). Stereotyping depending on discrimination brings disrespect due to its false
judgment about one s character through their external traits. (Buttny & Williams, 2000; Egge,
1999; Simon & Sturmer, 2003; Wolfram, Mohr & Schyns, 2007). Among some peculiar actions
causing disrespect one may not be listening to others (Buttny & Williams, 2000; Miller, 2001;
Ward & Ostrom, 2006). This failure of listening to others springs a feeling of being neglected on
gounds of their values and beliefs. This very ignoring others causes impoliteness, insult and other
disrespectful behaviors (Keaveney, 1995; Ward & Ostrom, 2006). When talking in the
organizational setups, coworkers treasons and superiors allegations have direct effects on
injustice and disrespectful feelings (Bies, 1993; Kesler, 1994; Miller, 2001). Why these actions
are believed to be disrespectful because they violate human rights and brings injustice.
2.4 Consequences of Respect and Disrespect

The nature of relationship is an influential determinant of how one finds another s action
disrespectful (Miller, 2001) and the perception of respect in a relationship enhance the strength
and quality of relationship (Boeckmann & Tyler, 2002; DeCremer, 2003; Duncan, 1997; Gittell,
2002). Lower levels of commitment and loyalty towards the organization are the consequences
of disrespect at workplace (Miller, 2001). High perception of disrespect could result in
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discontinuation of a long-term relationship (Shwalb & Shwalb, 2006; Duncan, 1997).

Disrespected customers may look for an alternative when they are dissatisfied with the service
they receive (Costley et al, 2005). Unfortunately, disrespect can be found in many places of
workplace environment (kumar, 2009) including hospitals and other healthcare units. Disrespectful
behavior and conduct at workplace specially in helping professions like medicine is a very serious problem as it may
create a stressful working environment and may result in low satisfaction with profession and high burnout. Past
studies revel that the public sector hospitals do appear to experience a higher level of
disrespectful behavior than private sector organizations (Burner & Pope, 2007).
Past studies also found a high level of tension and stress among doctors (Lee, Stewart & Brown, 2008).
Disrespect in the health care workplace can reduce quality of life and can produce a negative
effect on its targets and their families (Miedema et al., 2010). Personal use of strategies such as eating
nutritionally and spend some time with his family, and professional strategies, such as the assessment of the patient
doctor relationship and participation in continuing medical education seems to reduce stress and tension.
Furthermore, doctors should be encouraged to develop the necessary skills to deal with difficult patients (Lee,
Stewart & Brown, 2008). Every human deserves respect (Kent, 1959) at workplace. When people
at work offend, embarrass or humiliate us, it hurts our dignity and well-being. It also hurts our
working relationships and can lower our productivity. Over time, disrespect in the workplace can
lead to an unhealthy work environment and a high rate of employee turnover (Pinel & Paulin,
2005). Similarly the patients who experience disrespect in healthcare facilities may be less likely
to use health care services or return for follow-up care (Blanchard, & Lurie, 2004).Ramarajan &
Barsade (2006) explained that disrespectful behavior at workplace has long term pervasive and
harmful effects and a respectful working environment helps stemming burnout in organizations
especially in services providing organizations.
Disrespect negatively impacts the self-perception of its target ((Sleebos, Ellemers & Gilder,
2007)) and hurts the feelings of inclusiveness and belongingness within a group environment
(Barreto & Ellemers, 2002; Boeckmann & Tyler, 2002; DeCremer, 2002; DeCremer & Tyler,
2005; Simon & Sturmer, 2003) by limiting the ability of individuals to work effectively and also
by limiting the ability of teams to meet their service targets (Bernstein & Fundner, 2003). In
organizations, where there is a pervasiveness of disrespectful environment and employees feel
that they are not listened to in a group and that their ideas and suggestions even are ignored,
many of them may decide to leave the organization because they did not feel respected. (Cremer
& Mulder, 2008). This may result in loosing very talented employees as such employees are
often the targets of disrespectful behavior of colleagues, supervisors, managers and customers
(Daniel, 2007; McCord & Richardson, 2001).
There is also a strong relationship between respect and trust, as the individuals who are being
treated respectfully normally have higher levels of trust for the organization ((Laschinger &
Finegan, 2005; Frei & Shaver, 2002; Reilly, 2002). Contrarily, disrespect arises lower
satisfaction at workplace, higher levels of psychological distress, high turnover and lower levels
of psychological well-being and health satisfaction (Miedema et al., 2010; Martin & Hine, 2005).
Victims of disrespectful conduct may even have feelings of tranquility, low life satisfaction; and
more somatic complaints (Cortina, Magley, 2003). Large amount of past literature suggest that
disrespectful behavior escorts to severe physical and emotional problems for the targets,
including damage to their self-esteem, anxiety, posttraumatic stress disorder, depression and
deprived concentration (Miedema et al., 2009 ; Namie & Namie, 2000; Davenport, Schwartz &
Elliott, 1999; Hornstein, 1996). This is in conjunction with the theme presented by Caza &
Cortina (2007) who argues that there are negative consequences of disrespectful behavior on
individual well-being. They also suggest that the targets of disrespectful conduct may endure
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psychological distress, dissatisfaction and disengagement from organization, and performance

decline. So it can be argued that respectful treatment will result in increased satisfaction (Bitran
& Hoech, 1990; Costley et al, 2004; Winsted, 2000). The disrespectful behavior exhibited by
others is a most common source of anger and interpersonal aggressive behavior (Glomb &
Huiliao, 2003; Bettencourt & Miller 1996, Cohen et al 1996). People also show unwillingness to
comply with authorities when they fell disrespected by those authorities (Miller, 2001; Huo et
al., 1996, Lind et al., 1993) So disrespectful behavior at workplace may lead to low job
satisfaction and much of the energy and efforts of its victims are eaten up by negativity. This in
tern adversely affects the efficiency of the working environment and may also results in low
profitability. Infact there is a strong relationship between workplace disrespect from patients side
and doctors productivity (Hutton & Gates, 2008). So, such behavior can cost a company millions
of dollars a year (Johnson & Indvik, 2001).These costs may include medical expenses, legal
costs, wastage of time in preparing or attending court cases and the expense associated with
replacing staff. Other costs associated with disrespectful workplace behavior include the time
spend on listening complaints, adverse publicity, adverse reputation, the loss of talent, lower
morale among employees, absenteeism, lower efficiency and difficulty to attract talent in future
(Daniel, 2007). A positive word of mouth is another outcome of respectful treatment (Blodgett et
al, 1995; Costley et al, 2005). Such positive remarks of someone are highly beneficial for an
organization s reputation and are one of the most effective forms of advertisement and can
positively influence the profitability of that organization (Kumar, 2009).
It is important to address the issues of disrespectful conduct like workplace harassment and
abuse in order to protect patient s and doctors safety and avoid workplace dissatisfaction.
Disrespectful encounters might influence doctors to refuse to work in higher-risk environments,
such as emergency departments or rural areas. Further, such encounters might lead to
posttraumatic stress disorder (Miedema et al., 2009) while the ill treated and disrespected patient
might decide to not to make follow up visits to the doctor at hospital and may even decide to
terminate the current medical treatment and are often inspired to self-discharge without the
advice of their doctor (Ibrahim, Kwoh & Krishnan, 2007).
2.5 Implications of Respect and Disrespect
Doctors, in common, face many challenges at personal and occupational levels (Lee, Brown &
Stewart, 2009). According to Lee et al. (2009) Personal stressors included personality traits and
the need to balance family and career while the Occupational stressors included challenging
patients, workload, deadlines, competency issues, excessive documentation, and changing roles
within the workplace. Both these stressors might create severe psychological pressure and too
much Stress will cause frayed tempers which might force the doctors to show disrespect at
workplace. Types of disrespect range in severity from verbal disrespect to more extreme
encounters such as physical assault. Long wait times for appointments, shortage of doctors,
limited resources, general stress (Bernstein & Fundner, 2003), deficient interpersonal skills,
failure to discourage or circumvent violence (Magin et al., 2008) can all lead to patient
frustration and disrespectful behavior. Similarly, psychiatric illness, socioeconomic
disadvantage, and impeded access to medical care are also the important causes of patients
disrespectful conduct (Elston et al., 2002). On the other hand, the doctors disrespectful behavior
might be because of patient expectations, respect from specialists, overhead and income
inequities (Manca et al., 2007), physician shortages (Miedema et al., 2010), work deadlines,
powers struggles similar to those that exist in other large, complex non-medical organizations
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(Vredenburgh & Brender, 2004; Bernstein & Fundner, 2003), hospital-specific pressures
including limitations on resource availability (Lee, Stewart & Brown, 2008), and dealing with
failure and mistakes (Bosk 1979; Hilfiker 1998). Keeping up with the ever expanding body of
knowledge is daunting for doctors. Inadequately compensated additional administrative,
educational and research responsibilities (Bernstein & Fundner, 2003), for which they are given
inadequate time to perform may add to stress levels and produce an environment of disrespectful
behavior. Ignorance of violence risk minimization measures, lack of interpersonal skills of
doctors and their failure to identify problematic situations in advance could be seen as a
precipitant of violence in certain circumstances (Magin et al., 2008). Kumar (2009) argued that
rude responses, perceptions of discrimination, the presence of an audience, a sale-focused
atmosphere, personal conversations and process-related problems are the main causes or
influencers of disrespectful behavior in working environment. He further argues that the
perceptions of disrespect were influenced by the one s expectation of high standards of service in
the workplace. The results of a research conducted by Hershcovis et al. (2007) shows that the
trait anger and interpersonal conflict are the strong predictors of interpersonal aggression while
the interpersonal conflict, situational constraints, and job dissatisfaction are the strong predictors
of organizational aggression. They further discussed that Poor leadership and interpersonal
injustice which refers to one s assessment of whether he or she was treated fairly by an authority
figure during the performance of a formal work are the predictors of supervisor-targeted
aggression (Hershcovis et al., 2007). In all its form, the aggression in employees often results in
abusive and disrespectful workplace behavior.
Power struggle, in which one is trying to gain the control by using the others as means to his /
her ends (Bernstein & Fundner, 2003) is an important organizational issue (Vredenburgh &
Brender, 2004) which should be catered because it can add to the stress level of doctors which
may intern influences disrespectful behavior towards others. Job demands are the aspects of the
job that require sustained physical or mental effort and are therefore associated with certain
physiological and psychological costs (e.g., exhaustion) (Demerouti et al., 2001). It is
commonly sighted in the past literature that job demands, particularly the frequency and intensity
of client interactions in human services, lead to burnout and disrespectful conduct (Cherniss,
1980). Perceived discrimination has also been associated with lower levels of satisfaction with
the healthcare facilities. According to Blanchard & Lurie (2004) race and socioeconomic status
of a patient are the most cited reasons of perceived discrimination. A patient s education is also
associated with its perceptions of disrespect. More educated patients may perceive more
respectful behavior from health care staff and doctors (Blanchard & Lurie, 2004). The most
concerning problems is that the ill treated and disrespected patient might decide to not to make
follow up visits to the doctor at hospital and may even decide to terminate the current medical
treatment. Patients who have strong perceptions of disrespect and of receiving unfair treatment in
the hospital are often inspired to self-discharge without the advice of their doctor (Ibrahim,
Kwoh & Krishnan, 2007). Patients may leave against their doctor s advice because of their
disagreement with their doctor s judgment of their health status but a conflict between the doctor
and patient is a more serious cause of self-discharge (Jeremiah, O Sullivan & Stein, 1995;
Ibrahim, Kwoh & Krishnan, 2007). Using derogatory names, shouting, intimidating, withholding
needed information and humiliating their employees is known as Abusive supervision (Keashly,
1998). Mitchell & Ambrose (2007) conceptualize such abusive supervision as a type of
aggression which can create a hostile work climate and could encourage disrespectful conduct
and deviance from supervisor given work directions. Work pressures may result in the manager
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or supervisor being unable or less able to deal with inappropriate or disruptive behavior by staff
members (Branch, Ramsay & Barker, 2007). In case of disrespectful work environment the
managers or the person in control (i.e., doctor) are often the target of disrespectful treatment
because they are perceived as responsible for a range of workplace stressors. Branch, Ramsay &
Barker (2007) further argues that such behavior is among one of the few ways by which
dissatisfaction with organizational issues can be voiced by staff. A very important point with
respect to the perceptions of respect and disrespect is the presence of others at the time of
incident. There is a very powerful affect of an audience on the pain of an insult as well as the
reaction to it. Okimoto (2008) emphasize that the disrespectful behavior has the negative effects
not only on its targets but also on the observers of such incidents. Normally, disrespect in front
of others fabricates more anger (Ferguson & Rule 1981). A reason for such strong reaction is that
an insult in front of others seems more unjust. For example, a criticism in private may be taken
as legitimate and appropriate but can appear nasty and unjust if delivered in public (Bies & Moag
1986). Secondly, the insult in front of others may produce more moralistic anger which hurts
more because insulted in public amalgamate the victim s feelings of disrespect with public
humiliation. The relationship with and the nature of the audience at the time of disrespectful
incident also affects the intensity of the victim s feelings of injustice.(Miller D., 2001 )
Location of practice, experience, and gender of the doctor seemed to affect disrespectful
encounters. Miedema et al. (2009) argues that young, female, rural physicians are more
vulnerable to disrespectful encounters. They further argue that the doctors who work in
emergency departments having large patient loads and have patients of mental illness and
addictions are also often the targets of disrespectful treatment. Physicians-in-training and those
working in after-hours settings are particularly the targets of disrespect by supervising
physicians, senior co-workers, nurses or patients. (Miedema et al., 2009; Miedema et al., 2010).
Serving in heavily populated area means that there will be large number of patients for every
doctor in such workplace. Because of this a patient has to wait long before accessing to the
doctor. Furthermore, the rising overhead forces doctors to try to see more patients which magnify
the waiting time (Manca et al., 2007). This waiting time might create frustration among patients
as many patients became rude if kept waiting and may show disrespectful behavior towards
doctors and other staff members. Magin et al. (2008) discussed that majority of times the
disrespectful behavior due to long waiting times is directed toward the practice staff like
receptionists who have to cope with such behavior more than the doctor. But on the same time
these demanding patients which are considered as a probable source of disrespectful behavior
might make the doctors feel uncomfortable and even personally threatened (Miedema et al.,
2009).
2.6 Some facts about Pakistan
Pakistan is the 7th largest country in the world with respect to population having an over 2.18 %
population growth rate (World Bank, 2000). Here, in Pakistan, the poverty rate is 36.2 % in rural
areas and 22.6% urban areas while in Punjab province this rate is overall 33 % (Asian
Development Bank, 2002). As there is a huge no of poor people, the majority is dependent on
public sector hospital for health care services. Currently there are overall 965 hospitals in
Pakistan out of which 46 public sector hospitals are in province of Punjab. Like many other
under developed and developing countries, Pakistan is also facing the problem of shortage of
doctors. With over 160 million populations there are only 1, 22,248 registered doctors (general
practitioners). Punjab province, which is population wise the largest province of Pakistan, has
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51, 935 registered doctors while there are only 10, 996 doctors registered as specialists. Here the
doctor to patient ratio is 1 to 100 in rural areas and 1 to 14000 in urban areas. All this data shows
that there is a serious problem of shortage of doctors in Pakistan as a whole and in Punjab too
(pfmsg, 2009).
3. Limitations
For the purpose of this study, only public sector hospitals in province of Punjab are taken, as the
majority of the population here is dependent on these hospitals. Furthermore, the study was only
conducted on General Physicians specially those who are working in outdoor units of public
sector hospitals.
4. Conceptual Framework
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Here the Disrespectful behavior of doctors towards patients is the dependent variable while all
other factors like Additional Administrative, Educational & Research Responsibilities, Lack of
Interpersonal skills, Failure to identify problematic situations, High Patient Expectations, Rude
behavior of patients, Behavior of Specialists / Seniors, Shortage of doctors & Physicians, Work
deadlines, Limitation on Resource availability, Power Struggles, Income Inequalities and
Stressful Working environment are independent variables. Furthermore, the conceptual model
also reveals the justification of independent variables by showing the in-text referencing of
relevant researches.
For the purpose of this study a total of 8 public sector hospitals were taken from province of
Punjab. Sample consists of General Practitioners who are working in these hospitals. Convenient
sampling technique was used for selection of respondents for this study. As the current study is
an effort to examine the causes of disrespectful behavior of doctors towards patients in Pakistan,
so the quantitative research technique was selected to identify the relationship between different
factors (9 independent variables and 1 dependent variable). A total of 450 questionnaires were
distributed out of which 367 questionnaires were returned, the response rate was 81.55 %. The
responses were given by 271 male doctors and 96 female doctors. Conscious effort was made to
include both male and female respondents having different length of work experience. The
purpose of this effort was to include the responses of both genders and also of different work
experience length. Furthermore, to develop the conceptual model and to identify the independent
variables which have impact on disrespectful behavior of doctors towards patients (dependent
variable), a pilot study on 15 doctors was initially conducted. This pilot study endorsed the
selection of independent variables which were identified by literature review. The data was
coded and analyzed with he help of SPSS software.
6. Research Questions
Question 1:
Burden of additional administrative, educational and research responsibilities negatively
influence doctors behavior at workplace.
Question 2:
Lack of interpersonal skills is the cause of disrespectful behavior of doctors at workplace.
Question 3:
Non supportive, demanding and rude behavior of patient negatively affects the doctors
respectful behavior at workplace.
Question 4:
Rude or less respectful demanding behavior of seniors negatively influences the
respectful behavior of general physicians.
Question 5:
Stress created because of limited resources with reference to physician shortage
negatively affects the respectful behavior of doctors at hospitals.
Question 6:
Limitations on physical resource availability negatively influence the respectful behavior
of doctors.
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Question 7:
Stressful working environment of hospitals negatively contribute towards respectful
behavior of doctors.
Question 8:
Stress created because of income inequalities between general physicians and specialists
is the cause of disrespectful behavior of general physicians at workplace.
Question 9:
Power struggles at workplace is a cause of disrespectful behavior of doctors.
Question 10:
Doctors generally show less then optimal behavior towards patients in hospitals.
7.Data Analysis
For collection of data 5-points likert scale is used (1=strongly disagree, 2=disagree, 3=neutral,
4= agree and 5=strongly agree). As already described, the SPSS software is used for data
analysis. The analysis of data reveals that majority of doctors are of the opinion that the
Additional Administrative, educational & research responsibilities, demanding and rude behavior
of patients & specialists, shortage of doctors, limitation of physical resources, stressful working
environment and income inequalities are the causes of disrespectful behavior of doctors towards
patients. While at the same time they have the opinion that lack of interpersonal skills and power
struggles between employees are not the contributing factors towards doctors disrespectful
behavior. Following frequency tables exactly describe these results.
Frequency Table
Additional Responsibilities
Cumulative
Frequency
Valid
Percent
Valid Percent
Percent
Neutral
1.1
1.1
1.1
Agree
2.2
2.2
3.3
Strongly Agree
355
96.7
96.7
100.0
Total
367
100.0
100.0
Interpersonal Skills
Cumulative
Frequency Percent Valid Percent
Valid
Strongly Disagree
Disagree
Neutral
Total
Percent
350
95.4
95.4
95.4
1.4
1.4
96.7
12
3.3
3.3
100.0
367
100.0
100.0
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Non Supportive Patients

Cumulative
Frequency
Valid
Percent
Valid Percent
Percent
Neutral
1.4
1.4
1.4
Agree
10
2.7
2.7
4.1
Strongly Agree
352
95.9
95.9
100.0
Total
367
100.0
100.0
Demanding Seniors Behavior

Cumulative
Frequency
Valid
Percent
Valid Percent
Percent
Neutral
10
2.7
2.7
2.7
Agree
1.6
1.6
4.4
Strongly Agree
351
95.6
95.6
100.0
Total
367
100.0
100.0
Shortage of Doctors
Cumulative
Frequency
Valid
Percent
Valid Percent
Percent
Neutral
1.1
1.1
1.1
Agree
2.2
2.2
3.3
Strongly Agree
355
96.7
96.7
100.0
Total
367
100.0
100.0
Limited Physical Resources

Cumulative
Frequency
Valid
Percent
Valid Percent
Percent
Neutral
1.6
1.6
1.6
Agree
2.2
2.2
3.8
Strongly Agree
353
96.2
96.2
100.0
Total
367
100.0
100.0
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Stressful Working Environment

Cumulative
Frequency
Valid
Percent
Valid Percent
Percent
Neutral
.8
.8
.8
Agree
10
2.7
2.7
3.5
Strongly Agree
354
96.5
96.5
100.0
Total
367
100.0
100.0
Income Inequalities
Cumulative
Frequency
Valid
Percent
Valid Percent
Percent
Neutral
2.2
2.2
2.2
Agree
1.9
1.9
4.1
Strongly Agree
352
95.9
95.9
100.0
Total
367
100.0
100.0
Power struggle
Cumulative
Frequency
Valid
Strongly Disagree
Percent Valid Percent
Percent
345
94.0
94.0
94.0
Disgree
17
4.6
4.6
98.6
Neutral
1.4
1.4
100.0
367
100.0
100.0
Total
Disrespectful Doctors Behavior

Cumulative
Frequency
Valid
Percent
Valid Percent
Percent
Neutral
1.6
1.6
1.6
Agree
1.6
1.6
3.3
Strongly Agree
355
96.7
96.7
100.0
Total
367
100.0
100.0
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Here the N = 367. This analysis shows that 96.7 % respondents are agreed that doctors generally
show less then optimal behavior towards patients in hospitals. Results also show that 95.4 %
respondents are in strong disagreement that lack of interpersonal skills contributes towards such
disrespectful behavior. Same is the case with our independent variable named power struggle,
where 94% respondents strongly denied its effect on doctors disrespectful behavior towards
patients. Other seven independent variables got the respondents agreement with respect to their
effect on our dependent variable. 96.7% strongly agree that the additional administrative,
educational and research responsibilities, which create extra work burden for doctors, effect their
behavior towards patients. Rude and demanding behaviors of patients and seniors / specialists are
also the large contributors of such behavior. These independent variables got 95.9 % and 95.6 %
strong agreement of respondents respectively. Other contributors of this disrespectful behavior
are shortage of doctors, limited physical resources, stressful working environment of hospitals
and income inequalities between senior / specialists and general physicians. These independent
variables got strong agreement of 96.7 %, 96.2 %, 96.5 % and 95.9 % respectively.
Reliability of data is also ensured. There are no excluded variables for this study and the value of
cronbach alpha is 0.745. Model summary shows that 95.8 % variation in dependent variable is
because of independent variables so the model is good fit with the R-square value of 0.958 which
according to Cohen (1988) is a lagrge effect. ANOVA table shows 0.000 significance which is
high significance level. Furthermore, the coefficients explained that there is a significant
relationship between dependent variable (disrespectful behavior of doctors towards patients) and
independent variables (Additional Administrative, Educational & Research Responsibilities,
Demanding / Rude behavior of patients, Demanding / Rude behavior of Specialists / Seniors,
Shortage of doctors & Physicians, Limitation on Physical Resources availability, Stressful
Working environment, Income inequalities) with significance level of 0.000. on the other hand,
lack of interpersonal skills and power struggles got 0.902 and 0.830 significance values
respectively which shows that the relationship of these independent variables with dependent
variable is weak and lesser significant.
Case Processing Summary
N
Cases
Valid
Excluded
%
367
100.0
.0
367
100.0
Total
Reliability Statistics
Cronbach's
Alpha
N of Items
.745
10
a. Listwise deletion based on all variables in the

procedure.
Model Summary
Model
1
R
.979
R Square
a
.958
Adjusted R
Std. Error of the
Square
Estimate
.957
.059
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Model Summary
Model
.979
Adjusted R
Std. Error of the
Square
Estimate
R Square
a
.958
.957
.059
a. Predictors: (Constant), Power struggle, Shortage of Doctors, Non

Supportive Patients, Interpersonal Skills, Stressful Working
Environment, Limited Physical Resources, Demanding Seniors
Behavior, Income Inequalities
ANOVA
Model
1
Sum of Squares
Regression
Residual
Total
df
Mean Square
27.881
3.485
1.236
358
.003
29.117
366
Sig.
1.010E3
.000
a. Predictors: (Constant), Power struggle, Shortage of Doctors, Non Supportive Patients,

Interpersonal Skills, Stressful Working Environment, Limited Physical Resources, Demanding
Seniors Behavior, Income Inequalities
b. Dependent Variable: Disrespectful Doctors Behavior
Coefficients
Standardized
Unstandardized Coefficients
Model
1
B
(Constant)
Std. Error
-.151
.185
.003
.027
-.407
Demanding Seniors Behavior

Shortage of Doctors
Coefficients
t
Beta
Sig.
-.817
.415
.004
.125
.901
.050
-.405
-8.164
.000
.200
.037
.246
5.382
.000
.910
.031
.814
29.502
.000
-.228
.037
-.234
-6.185
.000
.228
.037
.195
6.185
.000
Income Inequalities
.326
.055
.370
5.973
.000
Power struggle
.003
.013
.003
.215
.830
Interpersonal Skills
Non Supportive Patients
Limited Physical Resources

Stressful Working
Environment
a. Dependent Variable: Disrespectful Doctors Behavior
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8. Conclusion
As the reporting of disrespectful behavior of doctors has become more frequent especially in
Pakistan so it is very importance to have a comprehensive understanding of possible causes of
disrespectful behavior. This study aims to understand those behaviors and is the first of its type
which is conducted in Pakistan. The study reveals the fact that the doctors (general physicians)
are working in very stressful working environment of public sector hospitals. There is a shortage
of doctors and in addition to this they are also facing the problems of limited resources. Shortage
of doctors and other resources makes working environment tougher and more stressful for the
doctors. The study also diagnose that the patients often become rude towards doctors. This rude
and also demanding behavior of patients contributes to the doctors less then optimal behavior
towards them. Same is the case with behavior of seniors especially specialists. Seniors /
specialists normally do not treat the juniors / general physicians with very respectful manner.
The stress and probably anger created because of this behavior of senior doctors / specialists
forces the general physicians less optimal behavior towards patients. Adding fuel to the fire,
there is huge gap between the incomes of general physicians and specialists. This income
inequality creates dissatisfaction among general physicians which ultimately results in their
disrespectful behavior towards patients. So one may conclude that all the above mentioned
factors are the causes of doctors less then optimal behavior towards doctors.
On the other side, majority doctors denied that this disrespectful behavior of there is the
consequence of their lack of interpersonal skills. Although literature identifies that the
interpersonal skills are very helpful in conflict resolution and even for avoiding the conflicts, but
in this study doctors strongly disagree that their less optimal behavior is the reason of this fact.
Power struggles are the part of organizational life but in this study, it is identified that although
there are power struggles in hospitals too but that is not the cause of their less optimal behavior
for patients.
The disrespectful working environment can potentially pose substantial threats to the smooth
working of organization so, from a managerial perspective, it is very important to be aware of
organizational implications of disrespect. In satisfaction to this requirement, this study identifies
various factors that can influence doctors disrespectful behavior towards patients. This
identification will help health care organization to cope up with the problem. This study will also
allow hospital administrators and managers to better understand the causes of disrespectful
behavior in the workplace and to better comprehend that how aspects of organization life might
contribute to disrespectful episodes. This will help them to introduce strategies aimed at reducing
such incidences as well as contributing towards the development of better coping skills at all
levels when disrespectful episodes do occur.
This study has certain limitations which were previously discussed. So for expanding this
research work it is suggested that this study may also be conducted on other provinces of
Pakistan and private sector hospitals may also be included to identify the causes of disrespectful
behavior. As there are also reporting of disrespectful behavior of senior doctors / specialists
towards patients so it may also be an interest area for future study.
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Personality influences Customer Switching
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Listed in ULRICH S
DR KAMRAN SIDDIQUI
MBA(IBA, Karachi)
MA Marketing (University of Bradford, UK)
PhD Marketing (Manchester Business School, Manchester, UK)
Assistant Professor
Institute of Business Administration
University Road, 75270
Karachi, PAKISTAN
Abstract
The purpose of this study was to examine relationships between personality factors and customer
switching for services. The study has various distinctive features. Previously there has been no
meaningful research on the relationship between personality traits and customer switching
variables. Most previous studies were directed towards establishing a relationship between
individual personality traits and buying behaviour or to predict sales of expensive items such as
automobiles, in which personality was not the only influencing factor. Moreover, almost all of
the earlier work on personality traits and consumer decision-making was targeted at the study of
products not services. In contrast, the current study was aimed at customer switching rather
than buying behaviour; and building the conceptual framework on services rather than
products. Using two services (Credit Cards Services [N=220] and Mobile Phone services
[N=588]), consistent support was found for the effects of personality traits on customer
switching patterns among mobile phone and credit card users. The personality factor Openness to
Experience emerged as a single predictor for Customer Switching for both services. Personality
facets Artisictic Interests and Achivement Striving were consistent in providing major predictive
power predicting customer switching for the two services. A number of factors suggest that these
results generalizable globally but they were subject to a number of limitations, and hence further
research is warranted.
Keywords: Personality, Five-Factor Model, Consumer Behavior, Customer Switching, Services,
Mobile Phones, Credit Cards
1. Introduction
In traditional marketing literature customer loyalty and customer switching have been considered
as two opposite sides of a single coin (Dick & Basu, 1994; Knox & Walker, 1995; Zeithaml,
Berry, & Parasuraman, 1996; Knox, 1998). More recently social scientists have started
segregating the two closely knitted concepts (Keaveney, 1995; Hill & Alexandar, 2000). They
realized that these two concepts are not the opposite things; customers may switch to competition
still feeling loyal to the previous supplier. In explaining the concept of customer switching, only
a few studies have examined the motives behind switching behaviour. For switching behaviours
the most well known study was carried out by Keaveney (1995) after studying more than 500
consumers. She identified more than 800 critical reasons that led customers to switch their
service providers. On the basis of this, Keaveney grouped reasons for customer switching into
the following eight categories: (a) core service failure, (b) service encounter failure, (c)
employee responses to service failures, (d) pricing, (e) inconvenience, (f) attracted by a
competitor, (g) ethical issues, and (h) involuntary switching (Keaveney, 1995). In another
research it was revealed that certain customers will have a greater propensity to switch service
providers no matter how their service failure situations are handled (Keaveney & Parthasarathy,
2001). They have suggested that in an online service context, demographic factors such as age
and income, as well as individual factors such as risk aversion, influence whether a customer
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continues to use an online service or switches to another provider. After careful examination of
the literature concerning factors influencing customer switching, two important points were
noted, (a) earlier research on customer switching always considered it as having extrinsic values
to customer not intrinsic, (b) the role of consumer personality in customer switching is found to
be almost absent. This research attempts to investigate the intrinsic values of consumer for their
switching behaviour by examining the role of personality factors and facets on the switching
behaviour among mobile phone and credit card users.
Customer switching, customer exit or customer defection behaviour can be defined as the extent
to which the customer has changed his/her service provider(s) in the past (Reichheld, & Sasser,
1990). For services consumers, it can be described as determination to use the same service
category but switch from one service provider to another (Keaveney & Parthasarathy, 2001). In
the services environment, customer switching behaviour may be total or partial (Santonen,
2007): (a) total switching is usually easy to detect, since consumers close all their accounts and
refer to another service provider for their future needs (Colgate & Hedge, 2001); (b) partial
switching can be determined as a loss of any portion of a customer s business and it is
significantly more difficult to detect than total switching (Reichheld, 1996). Partial switching
occurs in two ways; customers can either shift some of their current patronage to another service
provider or they can actually acquire additional services, but from another service provider, with
the latter being substantially more difficult to trace.
Customer switching could be seen as a result of a series of problems encountered over a
period of time that eventually and slowly leads to switching to another service provider (e.g.
Bejou & Palmer, 1998) or a single critical incident may trigger the customer switch (Limbrick,
1993). Similarly, there are causal factors, which directly influence customer switching as
outlined by Keaveney (1995), or which are indirectly related to it, for example, service quality
and satisfaction (Zeithaml et al. 1996).
In order to help companies increase their profitability, it is suggested to keep marketing focus
on existing customers loyal instead of acquiring new ones (Fornell & Wemerfelt, 1987). This is
based on the consideration that existing customers are more profitable and less expensive to
keep, as opposed to the costs of attracting new ones (Dawkins & Reichheld, 1990). They claimed
that, based on their consulting experience, a 5% decrease in customer switching might lead to an
increase in the net present value of customers of between 25% and 85% in a wide range of
service, from credit cards to insurance brokerage and from motor services to office building
management. However, factors which might affect the customer switching rate were not
discussed in their study.
Literature supports significant associations between mobile users service usage, service
bundling and their switching behaviour (Ranganathan, Seo & Babad, 2006). Based on data on
over 30,590 mobile users, they support significant associations between mobile users service
usage, service bundling and their switching behaviour. For mobile phone services they refer
service bundling as assembling of different services into a single package. These bundling
services are normally complementary services and include voice mail, multimedia messaging,
online games, web access, email, and so on. In their study, support was found for the proposition
that size of bundling and usages of service have negative associations with switching behaviour.
This is due to the fact that the time and energy invested to learn and use a service bundle might
discourage customers to defect and secondly the larger number of items in the service bundle
would enhance the customer locking-in to the service provider (Ranganathan, Seo & Babad,
2006).
Another factor that indirectly affects switching behaviour is the market structure (Jones &
Sasser, 1995). If the market has monopoly or oligopoly conditions, implying high switching
costs, switching would be a difficult and sometimes impossible option, resulting in false loyalty
(Hostages). Under these circumstances, a dis-satisfied customer with high switching costs will
not switch, since there is no alternative. On the other hand, satisfied customers will not need to
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switch even though there are low switching costs. Switching becomes important when there are
at least a few viable alternative providers in a market. The relationship between satisfaction,
loyalty and switching under two extreme market conditions i.e., monopoly and perfect
competition, as proposed by Jones and Sasser (1995) and further developed by Lee et al (2000).
The two services selected for the current study i.e., credit card and mobile phones fall in the
middle of this matrix, implying a certain level of competition in the marketplace that switching
costs are at a moderate level, and that customers have choices and the means to switch in these
marketplaces.
A careful examination of the previous literature suggests that research on the influence of
consumer personality and other demographic variables on the attainment of customer loyalty,
customer satisfaction or reduction in customer switching, is largely absent.
On the other hand, a tremendous volume of research has been conducted on the personality
factors/facets and their predictability for behavioral intercourse (Larsen & Buss, 2005). There are
numerous reasons for its predictive capability. Firstly, the personality factors/facets remain stable
in adulthood (Costa & McCrae, 1992). Secondly, these are dimensions, not types, so people vary
continuously on them (Costa & McCrae, 1992). Thirdly, the factors and their specific facets are
heritable (Loehlin, McCrae, Costa & John, 1998). Fourth, the factors probably had adaptive
value in a prehistoric environment (Buss, 1996). Fifth, the factors considered universal, having
been recovered throughout the world (McCrae & Costa, 1997). Finally, knowing one s
placement on the factors/facets is useful for insight and diagnosis (Costa & McCrae, 1992).
Several successful recent studies demonstrate empirically the relationship between
personality and consumer behaviour. For instance personality factor extraversion was directly
related to positive consumption emotions and neuroticism predicted negative consumption-based
emotions. They not only confirm previous findings that emotions play a crucial role in
satisfaction, but also reveal their dependence on customers individual predisposition. They
suggest that a direct relationship between personality and self-satisfaction does exist, mediated
by the system of emotions (Matzler, Faullant, Renzl, & Leiter, 2005). In another study it was
observed that extroversion is positively related to positive affective responses and that a positive
indirect relationship exists between extroversion and brand affect (Matzler, Bidmon & GrabnerKrauter, 2006). Similarly, consumers who are conscientious and environmentally concerned
have bought ecological products or have switched products for ecological reasons (Fraj &
Martinez, 2006).
After examining the literature, the researcher could not identify meaningful research on
individual personality traits in relationship to consumer satisfaction patterns of relatively new
and technologically-enabled services such as credit cards and mobile phones.
Sampling: The sample comprised university students enrolled on at least their second year
throughout Pakistan. All three levels of university education, i.e. undergraduate, graduate and
doctoral were considered for this study. The student component provided a significant proportion
of young people, and also includes respondents who were familiar with mobile phone and credit
card services. Part-time students, enrolled in evening, weekend, executive or doctoral
programmes also proved to be a better target for credit card study. It is important to note that
both of these populations have been selected from larger populations on the basis of both
judgment and convenience. Psychologists often select samples based on convenience and many
modern day researchers do not consider this practice as any problem (MacCallum, Widaman,
Preacher & Hong, 2001). Based on the evidence from the literature on effective sample size such
as Comrey and Lee (1992); Meyers, Gamst and, Guarino (2006); Hair, Anderson, Tatham and
Black (1998); a sample size of 500 university students was believed to be adequate for the
current study.
Research Instrument: The questionnaire measures customer switching behaviour related to
two relatively new, fast-growing and technologically-sophisticated services. The purpose of
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employing two different services in a single instrument is to enhance the ability to generalise and
generate confirmatory results from the same study. The first part of questionnaire contained a
brief note which explained the purpose of the study and how this research will contribute to
academia in general and the management/marketing literature in particular. Second part
contained items related to Mobile Phone and Credit Card Switching. This research uses Zeithaml
etal (1996) battery of customer switching. According to Zeithaml et al (1996) these 2-item scales
measuring customer switching have weaker alphas, with values falling below 0.6. Moreover,
they indicated the need to add items to the scale in further research. Therefore, one more item
was added to make it three and these items were slightly re-phrased to align with requirements of
different services, i.e. mobile phone and credit cards. All items were measured by a five point
Likert scale. Third part integrated the research uses Goldberg s IP-IP instrument for personality
assessment. There are several reasons for choosing the IP-IP. Firstly, it measures the FFM and
subordinate facets. Secondly, it had a lesser number of items which ultimately requires a shorter
time for completion of the questionnaire. More importantly it was free of cost and instantly
available through the web site (http://ipip.ori.org) which resulted in quick pre-testing. The
biographical characteristics were included to define the characteristics of sample. An open-ended
question was also included as part of the questionnaire, providing space for unsolicited
comments or suggestions from respondents. The domain scales (N, E, O, A and C) had
correspondingly larger coefficient alphas, which ranged from 0.79 to 0.87 while internal
consistencies for the scales for the 30 individual facets ranged from 0.71 to 0.88.
The questionnaires were administered to groups of students in semi-natural classroom
settings, mostly in the presence of their faculty members. Class-rooms were selected mainly for
two reasons, these being: (a) they provided a comfortable and distraction-free space with all the
reading and writing arrangements in place including adequate lighting; (b) they signified that
more formal behaviour was expected from students. This strategy worked well and most of the
students completed the questionnaire without any major problem. A total of 800 questionnaires
were distributed; 8 students declined to cooperate and 792 questionnaires received with a
response rate of 99.4%. However, 204 questioners were voided due to incomplete data and other
reasons, resulting to 588 usable responses. Table 1 presents the distribution of respondents on
demographic variables (e.g., sex and age).
Table 1 Summary of participant s demographic details
Demographic Variable
Category
Count
%
Male
379
64.5%
Sex
Female
209
35.5%
16 24 yrs
340
57.8%
Age
25 34 yrs
218
37.1%
Above 34 yrs
30
5.1%
4. Analysis
Using a priori knowledge about Goldberg s IP-IP inventory, five high order factors i.e.,
Neuroticism, Extraversion, Openness to experience, Agreeableness and Conscientiousness were
factor analysed separately. These factor analyses were performed using 24 items related to each
factor and hence making the five separate analyses for all 120 items in the IP-IP inventory.
Items were factor analysed using the maximum likelihood method of extraction and direct
oblimin form of oblique rotation. The factor loading criteria were applied which required that (a)
a factor must have at least 2 salient item loadings greater than 0.3, (b) individual items must have
at least one factor loading greater than 0.3 and (c) any item loading on more than one factor
when the final solution is obtained will be placed only in the factor on which it loads most
highly. Overall scores were created by summing item scores creating one-dimensional factors
scores, one for each factor. The resulting value was then divided by the number of items in that
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factor, making overall scores relative and comparable. Participant s potential overall scores on
each factor ranged from 1 to 5 (Table 2).
Table 2: Confirmatory Factor Analyses Five Factor Model
First Order
Second Order
Facets
#
EV VE M
SD Factors
M
SD
Depression
2 0.91 5.23 21.8 2.66 0.55 Neuroticism
0.79 2.56 0.81
Anxiety
3 0.86 3.09 12.9 2.79 0.87
Anger
3 0.82 2.39 9.98 2.54 0.67
3 0.79 2.28 9.53 2.13 1.14
SelfConsciousness
Immoderation
2 0.72 1.87 7.81 1.85 0.79
Vulnerability
3 0.64 1.8 7.5 3.41 0.81
2 0.92 5.29 26.5 2.69 0.69 Extraversion
0.84 2.92 0.93
Excitement
Seeking
Activity Level
2 0.91 2.74 13.7 2.58 0.99
Friendliness
2 0.88 1.97 9.87 3.42 0.86
Gregariousness
3 0.87 1.74 8.7 2.74 1.21
Assertiveness
2 0.72 1.49 7.47 2.68 0.96
Cheerfulness
3 0.71 1.27 6.38 3.43 0.86
Cooperation
2 0.93 5.29 26.5 2.96 0.99 Agreeableness
0.83 2.62 0.86
Altruism
2 0.88 2.74 13.7 2.58 1.07
Trust
3 0.84 1.97 9.87 2.68 0.52
Modesty
2 0.8 1.74 8.7 2.81 0.84
Morality
2 0.79 1.49 7.47 2.56 0.64
Sympathy
2 0.73 1.27 6.38 2.15 1.11
Cautiousness
3 0.84 4.32 20.6 1.87 0.76 Conscientiousness 0.74 2.80 0.86
Self-Efficacy
2 0.81 3.29 15.7 3.43 0.78
Self-Discipline
2 0.79 2.56 12.2 2.71 0.66
Orderliness
2 0.74 2.11 10.1 2.6 0.96
Dutifulness
3 0.67 1.46 6.95 3.44 0.83
Achievement
2 0.61 1.22 5.84 2.76 1.18
Liberalism
2 0.82 3.69 15.4 2.7 0.93 Openness
0.77 2.88 0.84
Adventurousness 2 0.81 3.17 13.2 3.45 0.83
Emotionality
2 0.8 2.49 10.4 2.98 0.96
Imagination
3 0.78 2.34 9.76 2.6 1.04
Intellect
2 0.72 2.03 8.46 2.7 0.49
Artistic Interests
3 0.68 1.56 6.5 2.83 0.81
# - No. of items loaded;
- Alpha; EV Eigenvalue; VE - % variance explained
Similarly, confirmatory factor analyses were conducted for the mobile phone attitudes
scale using a multi-step process which includes; firstly extracting the factors; creating summated
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scales and examining the descriptive statistics. Table 3 present the eigenvalues, percentages of
variance and factor loadings of Mobile Phone and Credit Card Switching factors.
Table 3: Confirmatory Factor Analyses-Mobile Phone & Credit Card Switching Factors
Mobile Phone Credit Card
Switching
Switching
Items
(N=220)
(N=588)
Eigenvalue
2.53
1.70
Variance explained (%)
40.15
39.80
0.92
0.92
M
2.58
2.34
SD
1.07
0.81
I would switch to another network for low prices.
0.92
I would switch to another network for better deals.
0.90
I would switch to another network for 3G connectivity.
0.79
I would switch to another network for more credit limit.
0.96
I would switch to another network for better package deals.
0.92
I would switch to another network for low interest.
0.80
The multiple regression analyses were performed to explore the relationships between
personality factors (as predictor variables) and Customer Switching variables (as criterion
variables). In the first set of the analyses, the Customer Switching dimensions as criterion
variables were regressed on the Big Five personality dimensions as predictor variables in
stepwise regression analyses. In the second set of analyses, the same Customer Switching
dimensions as criterion variables were regressed on the predictor variables of the 30 personality
facets. Stepwise multiple regressions was undertaken in order to obtain the best possible. Mean
scores for mobile phone switching was regressed on personality factors.
Table 4: Summary of Regression Analyses of Factors Predicting Customer Switching
Criterion Variable
Predictor variable
R
Adj. R F
Credit Card Switching
Openness
0.261 0.168
0.155
20.848*
Mobile Phone Switching
Openness
0.132 0.117
0.106
17.516*
* p<=0.05
The personality factor Openness predicted credit card switching with a of 0.261 and an
adjusted R2 of 0.155. Similarly, mobile phone switching was also predicted by the same
predictor variable, i.e. Openness with a of 0.132, and an adjusted R2 of 0.106. Thus the
proportion of variance in credit card switching and in mobile phone switching predicted by the
five broad personality factors collectively was 0.155 (15.5%) and 0.106 (10.6%). The positive
values of also reflect that the Openness to Experience score is directly correlated with the
scores on both mobile phone switching and credit card switching. Although the predictive
power of the personality factor Openness seems to be very small, nevertheless these analyses
were able to identify the same predictor of customer switching for two different services. This
makes the case stronger for the Openness personality factor as a predictor of customer switching.
Table 5 presents a summary of the regression analyses of personality facets predicting
switching behaviour among mobile phone and credit card users. Mobile Phone Switching
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behaviour was predicted by three personality facets, i.e. Openness: Artistic Interests ( = 0.224),
Openness: Imagination ( = 0.186), and Agreeableness: Trust ( = 0.076) with a cumulative
adjusted R2 of 0.142. Credit Card Switching behaviour was predicted by five personality facets,
which were Conscientiousness: Achievement Striving ( = 0.413), O4: Openness: Actions ( =
0.264), Openness: Artisitc Interests ( = 0.101), O6: Liberalism ( = 0.077), Agreeableness:
Compliance ( = 0.056), with a cumulative adjusted R2 0.279. The cumulative adjusted R2 for
Mobile Phone Switching and Credit Card Switching were 0.142 and 0.279 respectively, which
suggests that variance in customer satisfaction in relation to mobile phone services and credit
cards services is predicted by 14.2% and 27.9% respectively. Multicollinearity diagnostics were
examined and it was revealed that condition indices in all three analyses were less than 30 and
none of the factors have a variance proportion of .50 or higher on a factor with a high condition
index.
Table 5: Summary of Regression Analyses Facets Predicting Customer Switching
Criterion
Predictor
M.R
R
Ad.R
F
Variable
Vraiable
Mobile Phone Openness: Artistic Interests
0.244 0.213 0.145 0.142 5.762
Switching
Openness: Imagination
0.186
(N=588)
Agreeablness: Trust
0.076
Credit Card Conscientiousness: Achievement
0.413 0.544 0.296 0.279 4.367*
Switching
Openness: Artistic Interests
0.101
(N=220)
Openness: Liberalism
0.077
Agreeablness: Compliance
0.056
* p<=0.050
5. Discussion
The multiple regression results show that mobile phone switching and credit card switching are
predicted by the personality factor of Openness which explains 15.5% and 10.6% of the
covariance respectively. When analysed at the facet level, these small relationships increase in
magnitude such that personality facets Artistic Interests, Liberalism and other facets are able to
explain mobile phone and credit card switching behaviour by 14.2% and 27.9% respectively.
According to Costa and McCrae (1992) open individuals are curious about inner and outer
worlds and their lives are experimentally richer, and Liberalism, means the readiness to reexamine social, political and religious Liberalism. Keaveney and Parthasarathy (2001) have
explained switching behaviour as a re-examination of the relationship with the service
provider(s), which is conceptually closer to the central idea of openness, and Liberalism. But
some other facets that also play an important role in switching may be involved here. In mobile
phone switching, artistic interests (aesthetics) plays an important role along with Liberalism.
This means that mobile phones might be switched for the clarity of sound or quality of mobile
phone (3G), reasons that can be associated with an individual s appreciation of Artistic Interests.
Similarly, credit card switching also reflects Achievement-Striving, which can easily be
understood as a good motive for switching from one credit card company to another in order to
secure a higher credit limit, reflecting a benefit to an individual.
As mentioned earlier the two services selected for the current study i.e., credit card and
mobile phones are not subject to strong competition in Pakistan where switching costs are at
higher levels, and customers have fewer choices and limited resources to switch in this
marketplace. As described by Jones and Sasser (1995) and further supported by Lee et al (2000),
similar studies observing the switching behaviour in market places where switching costs are
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lower and customers have more choices to switch, and more resources to switch, may yield
stronger relationships.
This research also supports Jones and Sasser s (1995) categorisation of customers. They
have classified customers into four groups: (a) loyalist/apostle (high satisfaction - high loyalty),
(b) hostage (low satisfaction - high loyalty), (c) mercenary (high satisfaction - low loyalty), and
(d) defector (low satisfaction - low loyalty). They concluded that the first two types are highshare, generally high-profit customers re-purchasing from the same suppliers or service
providers. There are reasons to continue patronage to the same supplier or product since
Loyalists are highly satisfied while Hostages may not have alternatives to switch to. They also
reveal that higher levels of customer satisfaction do not necessarily correspond with higher
likelihood to re-purchase a product or service. In the case of the Mercenary class, having high
level of satisfaction, yet still having propensity to switch. This behaviour can be better explained
by invoking the personality factors of the Mercenary class. This act of re-examining the
relationship with services providers can be best be explained by Openness, and more precisely
the Values facet of the individual consumer. The conclusions presented above were consistent
across two different technologically enabled services, i.e. mobile phone and credit card services.
Both services are now widely used and part of latest phase of globalisation the manifestation of
the.
6. LIMITATIONS
The results obtained depended on the data collection method employed. Therefore, data
collection problems, such as those deriving from flawed questions, inaccurate answers or
respondents with insufficient knowledge may also affect the results obtained. However, all
attempts were made to reduce these errors, by piloting the questionnaire and ensuring that the
questions were clear and unambiguous. Additionally, instructions were given to participants in a
clear and un-ambiguous manner. These problems were also minimized by a strong screening
process which resulted in dropping out several questionnaires from further processing.
7. NEED FOR FURTHER RESEARCH
This study has, therefore, paved a way for further research in several aspects. Keaveney s
(1995) factors affecting switching are all external to the customer, while the results of this study
point the way to a new research angle, i.e. the customer s internal, or more precisely behavioural
reasons for switching. This provides a clear opportunity for research to examine and compare the
antecedents that affect customer loyalty, satisfaction and switching. More empirical work should
also be done on developing various approaches for measuring customer switching other than
relying on customer loyalty constructs, in order to explore the deep essence of switching
behaviour. While customer loyalty and customer switching were considered as two distinct
constructs in this study, other researchers could conduct a more thorough investigation and
examine these constructs from psychological and behavioural points of view. Based on the
experience of conducting the current study, future research could try to replicate this study in
different contexts, possibly in different countries, and using different sets of services or
products.
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Relationship between Role Ambiguity and Burnout: The

Mediating Effect of Organizational Culture
Listed in ULRICH S
Dr. Tamer Bolat

Professor, Department of Business Administration,
Dr. Oya Inci Bolat
Assistant Professor, Department of Tourism and Hotel Management,
Murad Yuksel
Department of Business Administration,
Balikesir University
Abstract
The main purpose of this study was to investigate the effects of organizational culture types on
burnout both direct and through role ambiguity. Data were collected from a variety of
organizations such as a hotel, a mining company, an insulation and construction materials
company, an automotive parts manufacturer, and a tire marketing company in Turkey. In this
study, we developed and tested a model which has interactions between organizational culture
types, role ambiguity, and burnout. Some of our hypotheses were supported while others were
not. The findings of the study showed a positive relationship between role ambiguity and
burnout. On the other hand, the relationships between organizational culture types and both role
ambiguity and burnout, were seen in different directions due to the types of organizational
culture. In this context, the results indicated that the clan culture had a negative direct effect and
a negative impact through role ambiguity on burnout. Similar results were found for the
hierarchy culture. There was a negative relationship between the hierarchy culture and burnout,
and role ambiguity also mediated this relationship. It was determined that the adhocrachy culture
affected the burnout by both direct and through role ambiguity. As predicted, a positive
relationship was observed between the adhocrachy culture and role ambiguity. On the other
hand, the study s results indicated, the adhocracy culture increased the level of burnout.
Key words: Organizational culture, role ambiguity, burnout,
1. Introduction
Meaning, antecedents and consequences of burnout, and coping with it are among the important
topics in the work settings since 1970s, and discussions on this issue are still ongoing (Maslach
& Goldberg, 1998; Maslach et al., 2001). High level of employee burnout has many negative
effects on organizations and individuals such as decreasing in job satisfaction, organizational
commitment, and job performance or increasing in intention to leave the job, absenteeism,
anxiety, and depression (Dunegan et al. 1992; Scandura & Schriesheim, 1994; Bauer & Green,
1996; Maslach et al. 2001; Ard & Polatc , 2008). Therefore, understanding the antecedents of
burnout better is very important for coping with burnout at individual and organizational level. In
their study, Maslach et al. (2001) classified the andecedents of burnout into the five main
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headings: Job characteristics, occupational characteristics, organizational characteristics,

demographic characteristics, and personality characteristics. In this context, job characteristics,
occupational characteristics and organizational characteristics such as workload, role conflict,
role ambiguity, occupational stressors, job standardization, arrangement of people and
equipment, pressure to produce, decision making policy, social support, autonomy, performance
reward link, feedback, coaching, socialization, and mentoring (Jackson et al., 1987; Mills &
Huebner, 1998; Greenglass et al., 2001; Hsieh & Hsieh, 2003; Schaufeli & Bakker 2004; Sundin
et al., 2007; Thomas & Lankau 2009), demographic characteristics such as age (Brewer &
Shapard, 2004; Garrosa et al., 2008), sex (Ronen & Pines 2008), education level (Jackson et al.,
1987), and personality characteristics such as self-esteem, locus of control, emotional stability,
extraversion, openness, aggreableness, conscientiousness, positive/negative affectivity, proactive
personality, optimism, hardiness, and type A personality (Mills & Huebner, 1998; Ghorpade et
al., 2007; Alarcon et al., 2009; Lamb, 2009) were investigated as antecedents of burnout in many
studies.
In this context, one of the issues that needs to be examined about burnout is organizational
culture which affects both individual and organizational behavior (Dosoglu-Guner, 2001;
Cameron & Quinn, 2006) through shaping organizational context (Thompson et al., 1996;
Maslach et al., 2001), hence determines the level of burnout (Schulz et al., 1995). On the other
hand, level and direction of this effect will vary depending on the types of organizational culture
(Cameron & Quinn, 2006). While level of burnout may increase in certain types of
organizational culture, it may reduce in other types of organizational culture. Deshpande and
Webster (1989) defined organizational culture as a pattern of shared values and beliefs that helps
individuals to understand the organizational functioning and the norms for behavior in the
organization. As can be seen from this definition, organizational culture shapes the status and
role behaviors within the organization. In this regard, it could be argued that organizational
culture is one of the important determinants of role ambiguity in the organization. Taking into
consideration the relationship between role ambiguity and burnout, it can be said that
organizational culture has a direct effect on burnout, as well as an indirect effect through role
ambiguity. In spite of these interactions, there are few studies investigated the association
between organizational culture and bunrout (Schulz et al., 1995; Williams et al., 2007), and we
couldn t find any study clarifying the interactions between these three variables.
At the same time, another issue that needs to be dealt with is culture itself. We could encounter
many different approaches about definition, dimensions, classification, and measuring of culture
and organizational culture in the literature (Cameron & Quinn, 2006; Seymen, 2008). We
prefered to use Competing Values Framework which was developed by Cameron and Quinn
(2006) for measuring to organizational culture. The reasons we have choosen this model are that
it is useful for identifying the major approches to organizational design, stages of life cycle
development, organizational quality, theories of effectiveness, leadership roles and roles of
human resource managers, and management skills (Cameron & Quinn, 2006), all of which are
related to the antecedents of burnout.
The main purpose of this study was to investigate the effects of organizational culture types on
burnout both direct and through role ambiguity. This study made two important contributions to
the literature. First, few researches focused on the relationships between organizational culture
and burnout (Schulz et al., 1995; Williams et al., 2007). This study filled this gap. At the same
time, organizational culture itself is affected by the culture of the society the organization
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operates in. Therefore, it would be useful to investigate these relationships in different societies
and compare the results obtained from various countries. Thus, the second contribution of this
study was to provide a foundation for future comparisons.
2.1 Organizational Culture
Athough there are hunderds of definitions of culture, in almost all of them, culture is defined as a
set of shared values, beliefs, and practices (Oudenhoven, 2001). According to Hofstede (1991),
culture is a collective programming of the mind, which makes a group of people different from
other groups. Collective programming might be seen at national or organizational level. National
cultures separate its members from other nations whereas organizational culture separates its
members from other organizations (Oudenhoven, 2001). In the related literature there is no
agreement about the definition of organizational culture (O Reilly et al., 1991; Jones et al.,
2005), which is sometimes used as organizational culture, business culture or corporate culture.
However, there is agreement that organizational culture is very important in terms of the fact that
an individual obeys organizational context (O Reilly et al., 1991) and organizational culture is
also important in terms of organizational performance and the efficiency of the organization in
the long run (O Reilly et al., 1991; Cameron & Quinn 1999 in cited Kangas, 2005, p.35). While
the definitions made about organizational culture differ according to the focus or research areas
of the researchers, the definitions generally focus on tangible or intangible aspect of the concept
(Ataman, 2001). In other words, intangible elements such as feelings or beliefs are highlighted in
some of the definitions, whereas directly observable tangible elements (ceremonies, stories,
clothes, language etc) are stressed in others (Ataman, 2001). For instance, while Hofstede (2001)
defines organizational culture as collectively programmed thoughts, Deal and Kennedy define it
as the way to do or execute the job (Deal & Kenndy in cited Seymen, 2008, p.35). So whether
poor or strong, an organizational culture is quite effective in making many a great decisions from
whom to be promoted or what decisions are to be made to what the employees should wear or
what sports they should do (Deal & Kennedy 1982 in cited Erdem, 2007, p.64). For this reason
organizational culture has been in the focal point of organizational studies for the last thirty years
(Adler & Jelinek, 1986; O Reilly et al., 1991; Dastmalchian et al., 2000). In spite of
disagreement about defining and evaluating the concept (O Reilly et al., 1991; Jones et al.,
2005), it can be said that organizational culture has been widely accepted to be of great
importance about fitting an individual to organizational context (O Reilly et al., 1991).
There can be found a lot of classifications about classification of organizational culture in the
literature. Among the mostly accepted models in the literature of management and organization
can be counted Quinn and Cameron s Competing Values Framework based mainly on the
relation between organizational effectiveness and organizational culture (Dwyer et al., 2003).
The framework claims that organizational cultures may change depending on dominant
organizational attributes, binding mechanisms, leadership styles and overall strategic emphases
(Dwyer et al., 2003). These variables are also among the antecedents that influence role
ambiguity and burnout (Rogers & Molnar 1976; Maslach et al., 2001). For this reason we have
used Quinn and Cameron s Competing Values Framework to find out the relations between
organizational culture, role ambiguity and burnout in this study. The framework is made of the
intersection of two axes. The vertical axis emphasizes the dimension of flexibility and dynamism
at one extreme and stability, order and control at the other. The horizontal axis emphasizes the
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dimensions of internal orientation, utility and integration at one extreme and external orientation
and rivalry at the other (Dastmalchian et al., 2000) (Figure 1).
Flexibility and Discretion
The Clan Culture

Internal Focus
and Integration
The Hierarchy
Culture
The Adhocracy
Culture
The Market
Culture
External Focus
and
Differentiation
Stability and Control
Figure 1. Competing Values Framework

Source: Cameron & Quinn, 2006, p.35.
The Clan Culture: The clan culture type is internally oriented and emphasizes informal
governance (Dwyer et al., 2003). The organization is a very friendly place to work where people
share a lot of values among themselves. It is like an extended family in which the leaders, or the
heads of the organization, are considered to be mentore and perhaps even parent figures. Success
is defined in terms of sensitivity to customers and concem for people. In the organizations where
this type of culture is dominant, the long-semi benefit of human resources development is
emphasized and a great importance is attached to cohesion and morale. Emphasis is placed
especially on commitment, teamwork, cohesiveness (Dastmalchian et al., 2000; Dwyer et al.,
2003). Cohesiveness and personal satisfaction as the measure of organizational effectiveness are
more important than achieving nancial goals (Dosoglu-Guner, 2001; Stoica et al., 2004). The
teamwork directed to the defined goals is so strong and evaluation of the contribution of
employees to the system in the long run is so righteous in the clan culture typed organizations
that the members naturally can t help serving the system (Ouchi, 1987 in cited Erdem, 2007,
p.66).
The Hierarchy Culture: The organizational cultures where the hierarchy culture type is dominant
adopt an internal orientation and an emphasis on mechanistic governance such that formal rules
and policies are closely followed (Dwyer et al., 2003). The workplace is regular and quite
formal. The way any function should be realized is well defined by means of mechanisms such
as work specifications, procedures and orders (Erdem, 2007). The hierarchical culture represents
a bureaucratic structure, orders, rules, and uniformity (Dosoglu-Guner, 2001). Hierarchy culture
stresses order and regulations. Leadership style is administrative. Tracking and control are
emphasized relative to clearly stated goals (Stoica et al., 2004). Effectiveness is based mainly on
permanence and achieving clearly defined goals (Dwyer et al., 2003). At this point achieving the
defined goals and low cost are important success criteria (Dwyer et al., 2003; cal & A ca
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2010). However, this structure causes alienation, reduces independent decision-making and
terminates the feeling of goal (Erdem, 2007).
The Adhocracy Culture: The organizations where this culture type is dominant are characterized
as an entrepreneur, creative and adaptable cultures that emphasize innovation, profitability and
growth (Dosoglu-Guner, 2001). The culture has an advanced organic structure that
organisational status and positions are not valued or considered temporary (Erdem, 2007). What
keeps the organization together is commitment to experience and innovation. The organization s
long-term emphasis is on growth and acquiring new sources. Success means gaining unique and
new products or services. Being a product or service leader is important. Individual initiative and
freedom are encouraged in this culture type. Shortly this type of organizations value
enterpreneurship, creativeness and adaptability (Dastmalchian et al., 2000; Dwyer et al., 2003;
Stoica et al., 2004; Jones et al., 2005).
The Market Culture: The market culture type has a formal governance structure and an external
orientation. (Dwyer et al., 2003). In the organizations where this type of culture is dominant,
employees are competitive, goal-oriented and focus on their own benefit. The market mechanism
working in the organization measures the contribution of employees to the organization and
everyone takes whatever they contribute to the organization (Erdem, 2007). The leaders are
hand drivers, producers, and competitors. The glue that holds the organization together is an
emphasis on winning. The long-term focus is on competitive actions and achievement of
measurable goals and targets. Success is defined in terms of market share and penetration
(Dastmalchian et al., 2000).
Considering the four culture type discussed obove, it is possible to judge the features of an
organization about motivation, leadership and effectiveness (Dwyer et al., 2003). In some of the
studies made in the field, some organizations are reported to have the four of these culture types
(Deshpande & Farley, 2004); and in some of the studies some organizations are said to have
some of the culture types more dominant than other culture types (Jones et al., 2005).
2.2 Role Ambiguity
Before discussing role as a concept, it will be better to have a look on the concept of status.
Status is the positive or negative evaluation quality about the place an individual in a social
system made by other members of the society. According to Linton, status is the place an
individual occupies in the social system . In other words, status is a position and a pattern of
expectations for the people occupying that position (Tekarslan et al., 2000). At this point the
diferences about culture and beliefs may change expectations from meanings and attitudes to
status (Tekarslan et al., 2000). The concept of role is a kind of net to bind appropriate behaviors
to social positions and statuses (Hilbert, 1981). The concept is mostly used to imply the
behaviors expected from people who occupy certain social categories. These categories include
statuses (or positions) in official or non-official systems (Lynch, 2007). A role specifies who
an individual is (Tekarslan et al., 2000), whereas a position is the total of behaviors defined
what a person can or cannot do in the limits statuses s/he occupies (Erdo an, 1997). Roles are
about statuses and statuses roles. However, a role alone cannot make a status (Tekarslan et al.,
2000).
In their seminal research on role dynamics and organizational stress that they open new horizons
for researchers, Kahn and colleagues (1964) provide a definition of role ambiguity. They state
that certain information is required for adequate role performance; this is, in order for a person to
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conform to the role expectations held by members of his role set (Kahn et al., 1964 in cited Tidd
et al., 2004). First an individual must know what these expectations are and second, he must
know what activities he is expected to do to fulfill his responsibilities. The absence of this
knowledge defines role ambiguity. Role ambiguity indicates the feelings of uncertainty or a lack
of clarity about duties, responsibilities and objectives of one s work, which is a form of role
stress (Orpen, 1977; McCleese & Eby, 2006).
Kahn et al. make a theoretical model taking two main dimensions of role ambiguity. These are
uncertainty of duty (uncertainty of performance expected from an individual) and socioemotional uncertainty (psychological result or dissatisfaction of failure in achieving role
responsibilities) (Theodorakis et al., 2010). Based on this model, Eys and Carron define role
ambiguity as (Eys & Carron in cited Theodorakis et al., 2010):
- Lack of necessary knowledge about role responsibility,
- Insufficient knowledge about musts to fulfill role responsibilities,
- Insufficient knowledge about procedures for evaluating role performances,
- Insufficient knowledge about what to do in case of unsuccess to fulfill role responsibilities.
Shortly, Role ambiguity lacks adequate information both about what his or her tasks are as well
as how to accomplish them (Tidd et al., 2004).
2.3 Burnout
Burnout syndrome which is defined as negative attitudes and feelings towards recipients of the
service, emotional exhaustion, because of chronic work stress, is a subject of interdisciplinary
area of occupational stress (Orgesta et al., 2008). The term burnout was first used by Greene
(1961) (Greene 1961 in cited Maslach et al., 2001). Freudenberger (1977) defines burnout as a
situation that all occupational groups can experience, as an occupational hazard, and failure, low
accomplishment or burnout because of extreme demands for energy, power or sources. Maslach
and Jackson (1981) defines the concept as a syndrome appeared with the reflection of negative
attitudes towards the work done or other people committed in the process as a result of physical
exhaustion, permanent tiredness, fatique and hopelessness among people who are subjected to
extreme demands in their jobs and among those who must work face to face with others.
There are different classifications about dimensions of burnout. Maslach et al. (2001) specify
three dimensions of burnout as emotional exhaustion, depersonalization and reduced personal
accomplishment. In this classification, emotional exhaustion defines end of energy and emotional
sources (Bakker et al., 2000); depersonalization defines lack of or low emotion among employees
towards their colleagues or those who take service (Hayter, 2000), a feeling of unconcern to
existence of others, ignorance of people s characteristic features, putting a distance between
themselves and their clients considering the clients are not human but objects (algan et al.,
2009). Reduced personal accomplishment defines reduced personal accoplishment is the selfevaluation component and is equated with reduced professional efficacy, productivity or
capability, low morale, and an inability to cope with job demands. It represents a decline in one s
feelings of competence and achievement at work (Schwarzer et al., 2000; algan et al., 2009).
According to Maslach and Jackson (1981) the clearest signal of burnout is the increase in the
feeling of exhaustion. The employee feels used up from the job with little desire or motivation to
go to work each day. Burnout employees, psychologically, lack the energy needed for the job
and lose their emotional enthusiasm for the job over time (Maslach & Jackson, 1981; Lambert et
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al., 2010).
Another classification of burnout was made by Pines ve Aronson (1981). They define burnout as
a feeling of physical, emotional and mental exhaustion appearing as a result of long-term
emotional challenge or effort. Here physical exhaustion indicates low energy, chronic fatique and
weakness. Emotional exhaustion indicates desparation, hopelessness and a feeling of being
trapped and mental exhaustion indicates improved negative attitudes to oneself, his work and his
life (Pines & Aronson 1981 in cited Enzmann et al., 1998).
2.4 Relationships between Organizational Culture, Role Ambiguity and Burnout
2.4.1 Relationship between Organizational Culture and Role Ambiguity
As discussed above, role is the total what a person can do or what he cannot do in the status
he occupies (Erdo an, 1997). For this reason status is the essential factor in roles. At this point
considering the roles the place of an individual in a society as negative or positive evaluation
made by other members of the society, one can think that the roles, and dependently status are
determined and formed by the society. In other words, the roles and status attitudes of
individuals are made by other members of the society as well as the norms suggesting and
approving these attitudes and the values these norms are based upon (Tekarslan et al. 2000). For
this reason, as Linton says, roles are parts of a culture (Linton in cited Hilbert, 1981) and roles
consist of the order of cultural environment individuals occupy (Lynch, 2007). As expressed
about the role theory, responsibilities of all employees and [their] positions at work should be
defined. Only under these circumstances the managers can direct employees; and, in turn,
employees can report on their work and responsibilities (Fichter & Cipolla, 2010). De ne
organizational culture as the pattern of shared values and beliefs that help give the members of
an organization meaning, and provide them with the rules for behavior in the organization
(Dosoglu-Guner, 2001; Dwyer et al., 2003; Stoica et al., 2004). Organizational culture extremely
affects the status in an organization and the role attitudes they are based on (Thompson et al.,
1996).
Organizational culture is one of the most influential reasons that employees do not know what
their responsibilities are and how they must fulfill these responsibilities. There is a significantly
relationship between organizational culture and role ambiguity. That s to say, role ambiguity will
increase in some organizations whereas it will decrease in some others.
The clan culture and role ambiguity
The clan culture emphasizes informal governance. The organization is held together through
employee loyalty, morale and commitment (Dwyer et al., 2003). In organizations where this type
of culture is dominant, it can be said that written work specifications and requirements do not
exist. This can be thought to increase role ambiguity but in fact the case decreases role ambiguity
because agreement, teamwork and commitment are among the basic components of these
organizations (Dastmalchian et al., 2000; Dwyer et al., 2003). The study made by Schuler (1977)
indicates that there is a negative relationship between participation in decision making and role
ambiguity. The following can be hypothesized then:
H1a: The clan culture is positively related to role ambiguity.
The hierarchy culture and role ambiguity
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One of the main organizational structure types, formalization is the extent to which rules and
procedures are established within an organization. Formalisation is the use of well-de ned rules
and regulations to govern the behavior of individuals so that actions within the organization
become standardized. In other words formalization should help reduce the role ambiguity in the
workplace. It is frustrating not knowing what needs to be done, how it is done, or what resources
to use (Lambert et al., 2010). The hierarchy culture type adopts an internal orientation and an
emphasis on mechanistic governance such that formal rules and policies are closely followed
(Dwyer et al., 2003). The hierarchy culture represents a bureaucratic structure, orders, rules,
uniformity and shortly formalization (Dosoglu-Guner, 2001). Formalization provides guidance
and direction for employees in carrying out their jobs, and, as such, should reduce the unclear
expectations of workers (Lambert et al., 2010). The following can be hypothesized:
H1b: The hierarchy culture is negatively related to role ambiguity.
The adhocracy culture and role ambiguity
In the adhocracy culture, people are encouraged to stick their necks out, take risks and be
independent (Dastmalchian et al., 2000; Dwyer et al., 2003). Flexibility and external orientation
are valued. However, organizational status and positions are not valued or seen temporary. This
culture type has an advanced organic organizational structure (Erdem, 2007). And this structure,
together with lack of formalization, will increase role ambiguity (Morris et al., 1979; Nicholson
et al., 1983; Podsakoff et al., 1986). The following can be hypothesized:
H1c: The adhocracy culture is positively related to role ambiguity.
The market culture and role ambiguity
The organizations where the market culture is dominant, informal management structure and
external orientation are valued. The organization is achievement focused and emphasizes
competition (Dwyer et al., 2003; Stoica et al., 2004; Jones et al., 2005). Chang et al. (2010)
divides the market culture into three dimensions of behavior like customer orientation,
competitor orientation and internal function coordination. They claim employees do not
experience role ambiguity because of the fact that the employees focus on goal achievement
about realizing the needs and desires of their customers which they really know well. In these
organizations the necessary work specifications and formalizations are made clearly because
formalization is the most important feature of the organization. The mechanic organizational
structure in these organizations will reduce role ambiguity.
H1d: The market culture is negatively related to role ambiguity.
2.4.2 The Relationship between Role Ambiguity and Burnout
In explaining the relationship between role ambiguity and burnout can be used the role theory,
and job demand-control model. The job demand control model which was developed by Karasek
(1979) and Karasek and Theorell (1990) is a very important model to explain burnout (Karasek
& Theorell 1990 in cited Sundin et al., 2007, p.759; Thomas & Lankau, 2009). According to this
model, the interaction between psycho-social job demand and job control determines the
dimension of stress because of the job (Demiral et al., 2007; Sundin et al., 2007). In this model
job demand defines workload and power used to achieve it including how fast you must fulfill it.
Job control indicates employees jobs as well as their knowledge, skill, proficiency, and the
possibility to use them in workplace. It also indicates the authority the employees have about
their job (Demiral et al., 2007).
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In workplaces with high job demand and low job control, the level of job stress is very high
(Karasek, 1979). It is clear that under these circumstances employees will feel ambiguous about
job demand because of role ambiguity. Furthermore, as employees do not have the necessary
knowledge about how to fulfill their responsibilities, they will not get to know how well they are
at the dimension of job control. It is probable that the employees under these circumstances will
have permanent stress and anxiety depending on the level of ambiguity. According to role
theory, ambiguity should increase the probality that a person will be dissatisfied with his role,
and will experience anxiety (Rizzo et al., 1970). Schuler et al. (1977) emphasize that role
ambiguity is related to stress, unattendance, low job satisfaction and low expectations (Schuler et
al. 1977 in cited Fichter & Cipolla, 2010, p.258). Similarly, according to Cordes and Dougherty
(1993, 630) and Maslach et al. (2001) role ambiguity is one of the reasons of burnout. On the
other hand, in case of disobedience to job requirements the earned status should be lost
(Tekarslan et al., 2000). If employees have socio-emotional ambiguity, this will result in
psychologic problems and disorders (Theodorakis et al., 2010). The findings of the studies about
role ambiguity and burnout support positive relationship between role ambiguity and burnout
(Fimian & Blanton, 1987; Emster & Harrison, 1998; Low et al., 2001; Lu, 2008). Positive
relationship has been found between role ambiguity and emotional exhaustion (Brookings et al.,
1985; Emster & Harrison, 1998; Kirk-Brown & Wallace, 2004; Liang & Hsieh, 2008; Tunc &
Kutanis, 2009), depersonalization (Brookings et al., 1985; Emster & Harrison, 1998; Gmelch &
Gates, 1998; Liang & Hsieh, 2008; Tunc & Kutanis, 2009) and low personal accomplishment
(Brookings et al., 1985; Gmelch & Gates, 1998; Liang & Hsieh, 2008; Tunc & Kutanis, 2009).
The following can be hypothesized:
H2: Role ambiguity is positively related to burnout.
2.4.3 The Relationship between Organizational Culture and Burnout
One of the important factors of job burnout is organizational characteristics (Maslach et al.,
2001; Lambert et al., 2010). Organizational context affects burnout. Culture is one of factors
affecting employees behaviors (Thompson et al., 1996). Schulz et al. (1995), indicate that
organizational culture affects burnout. The relationship between organizational culture and
burnout may be at different aspects depending on organizational culture type. That s, burnout
may increase in some organizations whereas burnout may decrease in some others.
The clan culture and burnout
An important factor of job demands-control model is social support (Sundin et al., 2007). Social
support is the social and pshchological support one has from around him (Y ld r m, 1997). At
this point one can say that the support one will have from his colleuages and managers is very
significant in the clan culture where integration is the most important factor, people share a lot
among themselves, dependence is high like a big family, leaders and managers are thought
mentors or parents (Dastmalchian et al., 2000; Dwyer et al., 2003), and where teamwork is at
quite high level (Ouchi, 1987 in cited Erdem, 2007, p.66). The studies made on social support
and integration show that these variables will reduce burnout (Sundin et al., 2007; Lambert et al.,
2010). Besides, another important aspect of this culture is that commitment to the management is
high. In a study made by Lambert et al. (2010, 138) a negative relationship was found between
commitment to decision making and burnout. Furthermore cohesiveness and personal
satisfaction are more significant than financial goals in this culture type (Dosoglu-Guner, 2001;
Stoica et al., 2004). Considering the reducing effect of burnout on organizational cohesiveness
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and personal satisfaction (Kalliath et al., 1998; Tan & Akhtar, 1998; Koustelios & Tsigilis, 2005;
Tsigilis et al., 2006; Griffin et al., 2010), there is a negative and meaningful relationship between
the clan culture and burnout. The following can be hypothesized:
H3a: The clan culture is negatively related to burnout.
The hierarchy culture and burnout
In the hierarchy culture, workplace is regular and formal. The order and rules are important.
Every detail is given specifically about job satisfaction, procedures and orders so that everyone
will know their responsibility about how to do what (Erdem, 2007). Shortly, formalization is
high. From this aspect, this culture may cause alienation, reduce the feeling of goal achievement
and cohesiveness to organization (Erdem, 2007). In this organizational culture type employees
will have monotonous work, will not commit all processes of the job and will have a feeling of
alienation towards their job, which is another common source of stress for employees (Lambert
et al., 2010; Okutan & Tengilimo lu, nd). There was a positive relationship between
formalization and emotional burnout in the study made by Lambert et al. (2010). However, there
was a negative relationship between commitment to decision making and burnout in the same
study (Lambert et al., 2010). In other words, it can be maintained that employees will feel
themselves burnout in the hierarchy culture representing centralization because of limited
commitment to decision making processes. Okutan and Tengilimo lu (nd) find that the
mechanical organizational culture is a source of stress. From this point one can say that there is a
negative effect of the hierarchy culture on burnout. The following can be hypothesized:
H3b: The hierarchy culture is positively related to burnout.
The adhocracy culture and burnout
The adhocracy culture encourages personal initiative, risk taking and freedom. In the centre of
this culture type is entrepreneurship, creativeness and adaptability (Dastmalchian et al., 2000;
Dwyer et al., 2003; Stoica et al., 2004; Jones et al., 2005). It has an advanced organic
organizational structure (Ataman, 2001; Erdem, 2007). Employees can contribute to defined
goals of the organization by using their knowledge and skills, can reach any necessary
information or knowledge and take decisions when necessary (Ataman, 2001). In this type of
culture local management and job autonomy are valued instead of the hierarchical structure. Job
autonomy has been defined as the degree to which the job provides substantial freedom,
independence, and discretion to the individual in scheduling the work and determining the
procedures to be used in carrying it out (Hackman & Oldham, 1976 in cited Grandey et al.,
2005). Researchers found that the employees who have the necessary job autonomy will
experience less burnout (Grandey et al., 2005; Griffin et al., 2010; Miner et al., 2010).
Therefore, one can conclude that there is much less burnout among employees in the adhocracy
culture.
H3c: The adhocracy culture is negatively related to burnout.
The market culture and burnout
One of the main features of the market culture is the market mechanism not only in but also out
of the organization (Erdem, 2007). This will cause competition among employees, which may
increase alienation and reduce teamwork and social support. They will become competitive and
goal oriented. This will push them to burnout. Considering the negative relationship between
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social support, adaptability and burnout (Sundin et al., 2007; Lambert et al., 2010), burnout will
increase in the market culture.
H3d: The market culture is positively related to burnout.
2.4.4 The Relationships between Organizational Culture, Role Ambiguity and Burnout
As discussed above, it is projected that organizational culture affects role ambiguity. It is also
thought that there is a relationship between role ambiguity and burnout. Organizational culture
has an effect on burnout by means of role ambiguity, in other words, it can be said that role
ambiguity has a medating effect on organizational culture and burnout. On the other hand, from
the discussion above, it is clear that the relation between organizational culture and burnout is
not limited to role ambiguity. That s to say that there are direct relationships between
organizational culture and burnout except from the relationship between them and role
ambiguity. The following hypotheses can be developed:
H4a: Role ambiguity mediates the relationship between the clan culture and burnout.
H4b: Role ambiguity mediates the relationship between hierarchy culture and burnout.
H4c: Role ambiguity mediates the relationship between the adhocracy culture and burnout.
H4d: Role ambiguity mediates the relationship between the market culture and burnout.
The conceptual model developed by these hypotheses can be seen in Figure 2.
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Figure 2. The conceptual model (error variances for observed variables, and measurement itemloadings omitted for clarity)
3. Method
3.1 Sample
Data were collected from a variety of organizations such as a hotel, a mining company, an
insulation and construction materials company, an automotive parts manufacturer, and a tire
marketing company in Turkey. Seven hundred questionnaires were distributed individually by a
research team to employees, who were given seven days to complete them. In order to assure
confidentiality, the research team collected completed questionnaires from the employees.
Employees worked in departments, such as the front office, food and beverage, housekeeping,
human resources, accounting, sales and marketing, and security etc. for the hotel; acid
production department, tribune department, boric-acid pomping station, borax dehydration
station etc. for the mining company, production, marketing, accounting, finance, sales and
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marketing etc. for the insulation and construction materials company, an automotive parts
manufacturer, and a tire marketing company; production departmant, R&D departmant, logistic
department for the automotive parts manufacturer, and marketing, finance, accounting for the tire
marketing company. Four hundred and eighty-four employees completed the questionnaires,
resulting in a response rate of 69 percent. Incomplete questionnaires were excluded from the
analyses. 3.4 percent of the sample was under 20 years, 54.8 percent was 21-40 years, 39.4
percent was 41-50 years, and 2.4 percent was 51 years and over. Tenure ranges of the sample
were 13.9 percent under 1 year, 21.1 percent 1-5 years, 14.3 percent 6-10 years, 9.4 percent 1115 years, 7.9 percent 16-20 years, and 33.4 percent 21 years and over. 90 percent (n = 422) of the
sample was male, 10 percent (n = 47) was female; 77 percent was married; 5.1 percent had a
secondary school diploma, 62 percent had a high school diploma, 13.4 percent had a vocational
high school diploma, 16 percent had a bachelor s degree; and 3.5 percent had a graduate degree.
The rate of full time employees was 69.3 percent.
3.2 Measures
Organizational culture: Organizational culture was measured using the Competing Values Scale
of Cameron and Quinn (2006). The scale is composed of four subscales: the clan culture, the
hierarchy culture, the adhocracy culture and the market culture. The sample items were The
organization is a very personal place. It is like an extended family. People seem to share a lot of
themselves for the clan culture, The organization is a very controlled and structured place.
Formal procedures generally govern what people do for the hierarchy culture, The
organization is a very dynamic and entrepreneurial place. People are willing to stick their necks
out and take risks for the adhocracy culture, and The organization very results-oriented. A
major concern is with getting the job done. People are very competitive and achivementoriented for the market culture (Cameron & Quinn, 2006). Coefficients were .88 for the clan
culture, .80 for the hierarchy culture, .83 for the adhocracy culture, and .72 for the market
culture.
Role Ambiguity: Role ambiguity was measured using 6-item scale developed by Rizzo et al.
(1970). The alpha reliability for this scale was .80 and the scale was one-dimensional. An
example item was, I know what my responsibilites are . Items of the scale were positively
worded. Therefore, all items were reverse-coded for data consistency prior to data analyses. In
this case, higher scores are associated with perceptions of role ambiguity.
Burnout: Burnout was measured by the short version of Pines and Aronson s the burnout
measure (Malach-Pines, 2005). This short version was developed by Malach-Pines from Pines
and Aronson s original scale, and the items used in the short version converted into phrases by
Bolat (2011). For example, hopeless item was converted as I feel hopeless because of my
job . The scale of Pines and Aronson is one of the widely used scales to measure burnout in the
literature (Enzmann et al., 1998; Malach-Pines, 2005), and it was developed for use with all
occupations as well as non-occupational groups (Malach-Pines, 2005). The sample item was, I
feel hopeless because of my job . Higher scores indicate burnout of employees (Malach-Pines,
2005). An explaratory factor analysis was performed for burnout scale in SPSS 15.0, because of
items in original scale were converted into phrases by Bolat (2011). Kaiser-Meyer-Olkin
measurement of sampling adequacy was .92, indicating sufficient inter-correlations. Barlett s
Test of Sphericity was significant (Chi-square = 2095.71, p < .001). Explarotary factor analysis
indicated that one factor with Eigenvalues was greater than 1.0, and the total variance explained
was 51.85% of the total variance. The alpha reliability of the burnout scale was .89.
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All items in the measurement scale were measured on a five point scale, ranging from 1 =
strongly disagree to 5 = strongly agree .
4. Results
4.1 Preliminary Analyses
Before analyzing the hypothesized relationships, a confirmatory factory analysis was conducted
to test the measurement model. Six-factor measurement model (the clan culture, the hierarchy
culture, the adhocracy culture, the market culture, role ambiguity, and burnout) in which all
parameters were freely estimated, was compared against three alternative models a structural
null model which relationships between variables were fixed to zero; a three factor model that
combined the hierarchy culture, the clan culture, the adhocracy culture, and the market culture
items into a single factor, with items related to role ambiguity and burnout as separate factors,
and a one-factor model was specified where all items loaded on a single factor (Esinberger,
2009; Harvey & Martinko, 2009; Mckee-Ryan et al., 2009) (Table 1). Chi-square difference tests
demonstrated that six-factor model fit the data better than the structural null model ( X2 (15) =
2357.40, p < .05), three-factor model ( X2 (12) = 265.76, p < .05), and one-factor model ( X2
(15) = 4872.38, p < .05). Besides, Harman s one-factor test which is one of the most widely used
statistical techniques to detect common methods variance, was performed on 40 variables
(Podsakoff et al., 2003; Carr & Kaynak, 2007). Five factors with eigenvalues greater than 1.00
together accounted for 54.27 percent of cumulative variance; largest factor did not account for a
majority of the variance (%33). Thus, no general factor is apparent. One-factor model also
supported this result. One-factor measurement model had much worse fit indice than the
measurement model (X2 = 6174.14, df = 702, p = .000, RMSEA = .129, CFI=.93, NFI = .91).
Therefore, there was not a significant presence of common method variance.
Table 1. Confirmatory factor analysis of measurement variables
Model
Six-factor measurement model
Structural null model
Three-factor model
One-factor model
X2
1301.76**
3659.15**
1567.52**
6174.14**
df
687
702
699
702
RMSEA
.044
.095
.052
.129
CFI
.98
.93
.98
.93
NFI
.97
.91
.96
.91
X2diff
dfdiff
2357.40
265.76
4872.38
15**
12**
15**
N = 469; ** p < .01
4.2 Descriptive Statistics and Intercorrelations

Table 2 shows the means, standard deviations, reliabilities, and intercorrelations for the study
variables. The results show that all of the organizational culture types are negatively and
significantly related to role ambiguity and burnout. Besides, significant positive correlation was
observed between role ambiguity and burnout. Some of the correlations between study variables
such as the hierarchy culture and burnout, were in the unexpected directions.
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Table 2. Means, standard deviations, reliabilities, and correlations among variables

Variables
Mean
SD
1. The clan culture

2. The hierarchy culture
3. The adhocracy culture
4. The market culture
5. Role ambiguity
6. Burnout
3.23
3.46
3.13
3.29
2.25
2.17
1.00
.80
.93
.76
.88
.96
.768**
.870**
.711**
-.532**
-.415**
.694**
.721**
-.561**
-.443**
.779**
-.464**
-.327**
-.426**
-.265**
.447**
* p < 0.05; ** p < 0.01 (two-tailed); N = 139.
4.3 Model Comparisons

Before conducting specific hypothesis tests, following Anderson and Gerbig (1998) a series of
alternative models was evaluated (Ito & Brotheridge, 2001; Lance & Bennet, 1998): a conceptual
model in which all parameters were freely estimated (M1), a structural null model in which
covariances among exogenous variables were freely estimated, but no causal effects were
estimated between them and the endogenous variables or among the endogenous variables (M2),
a direct effect model in which mediational paths were fixed to zero (M3), a completely mediated
model (the direct paths between organizational culture types and burnout were fixed to zero
(M4), a completely mediated model in which the path from the market culture to role ambiguity
was fixed to zero (M5), a partial mediated model in which the paths from the market culture to
role ambiguity and burnout were fixed to zero (M6), and a partial mediated model in which the
path from the market culture to role ambiguity was fixed to zero (M7). As shown in Table 3, the
conceptual model indicated acceptable fit to the data. On the other hand, the path between the
market culture and role ambiguity did not reach significance. That s why we developed the last
three models in which the paths between the market culture, role ambiguity and burnout were
fixed or unfixed to zero (model 5-7).
Firstly, the conceptual model was compared against a structural null model (M2). The result of
this comparison showed that there is a significant chi-square difference, supporting the
conceptual model. Secondly, the conceptual model was tested against model 3. As Table 3
indicates, a significant chi-square difference was observed, indicating support for the conceptual
model. Thirth comparison was made between model 1 and model 4 for determining whether a
completly or partially mediated model fit the data best (M4). The result indicates, a significant
chi-square difference was observed. The conceptual model demonsrated a significantly lower
chi-square than the fully mediated model, supporting the inclusion of the direct-effect and
mediational paths. On the other hand, due to the nonsignificant path between the market culture
and role ambiguity, extra comparisons were made for determining whether with or without the
market culture models fit the data best. In that case, the conceptual model was tested against to
completely mediated model in which the path from the market culture to role ambiguity was
fixed to zero. As Table 3 indicates, a significant chi-square difference was observed, and the
conceptual model demonstrated a significantly lower chi-square than alternative model 5.
Another comparison was made against model 6 (a partial mediated model in which the paths
from the market culture to role ambiguity and burnout were fixed to zero). We observed a
significant X2 difference, and the conceptual model demonstrated a significantly lower chiCOPY RIGHT 2011 Institute of Interdisciplinary Business Research
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square than alternative model 6. Finally, we made a comparison between the conceptual model
and alternative model 7 (a partial mediated model in which the path from the market culture to
role ambiguity was fixed to zero). In this comparison nonsignificant chi-square difference was
observed. The alternative model 7 was more parsimonious than the conceptual model. In this
point, we conluded that alternative model 7 (the partial mediation model the path from the
market culture to role ambiguity was restricted to zero) provided the best fit of the models we
evaluated.
Table 3. Chi-square difference test for alternative models
Models
M1.The conceptual model
M2.Structural null model
M3.Direct effect
M4.Completely mediated model
M5.Completely mediated model -the path from the market
culture to role ambiguity was fixed to zeroM6.Partial mediation -the paths from the market culture to role
ambiguity and burnout were fixed to zeroM7.Partial mediation -the path from the market culture to role
ambiguity was fixed to zero-
X2
1301.76**
1637.51**
1457.70**
1333.42**
1333.88**
df RMSEA
687
.044
696
.054
692
.049
691
.045
692
.045
CFI
.98
.97
.98
.98
.98
NFI X2diff dfdiff

.97
.96 335.76 9**
.96 155.94 5**
.97 31.66 4**
.97 32.12 5**
1310.49**
689
.044
.98
.97
8.74
2*
1302.37**
688
.044
.98
.97
.61
1ns
N = 469, * p < .05, ** p < .01, ns = nonsignificant
4.4 Hypothesis Tests

The retained model is shown in Figure 3. As the figure indicates, the clan culture ( = -.47, p <
.05) and the hierarchy culture ( = -.62, p < .001) were associated with role ambiguity in a
significant negative direction, whereas a positive relationship between the adhocracy culture and
role ambiguity ( = .43, p < .05) in the expected directions. On the other hand, no relationship
between the market culture and role ambiguity was seen. Taken together, these results support
H1a, H1b, and H1c, and do not support H1d. As Figure 3 also indicates, a positive relationship
between role ambiguity and burnout ( = .55, p < .01), as predicted H2.
The Figure 3 shows, the clan culture ( = -.77, p < .01) and the hierarchy culture ( = -.53, p <
.01) were associated with burnout in a significant negative direction, whereas the adhocracy
culture ( = .55, p < .05) and the market culture ( = .45, p < .05) were positively and significantly
related to burnout. These relationships between organizational culture types and burnout are in
expected directions for the clan culture and the market culture, and in unexpected directions for
the hierarchy culture and the adhocracy culture. These findings support H3a and H3b, and not
support H3c and H3d. Finally, all of these results taken together, partially mediating effects of
role ambiguity were also observed between organizational culture types and burnout except the
market culture, supporting H4a, H4b, and H4c and not supporting H4d.
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Figure 3. Retained Model.
5. Discussion
In this study, we developed and tested a model which has interactions between organizational
culture types, role ambiguity, and burnout. Some of our hypotheses were supported while others
were not. As hypothesised, the findings of this study showed a positive relationship between role
ambiguity and burnout. This result is consistent with the findings of Fimian and Blanton (1987),
Shulz et al. (1995), Emster and Harrison (1998), Low et al. (2001), and Lu (2008). This
relationship was observed in all the organizational culture types of competing values framework,
except the market culture. As role ambiguity increased, so did burnout. On the other hand, the
relationships between organizational culture types and both role ambiguity and burnout were
seen in different directions due to the types of organizational culture. In this context, the results
indicated that the clan culture had a negative direct effect with the features such as a very
friendly place to work where people share a lot of themselves, and deeming of cohesiveness and
personal satisfaction were more important than achieving nancial goals (Dosoglu-Guner, 2001;
Dwyer et al., 2003; Cameron & Quinn, 2006), and had a negative impact through role ambiguity
on burnout with the features such as teamwork, participation and consensus (Dastmalchian et
al., 2000; Stoica et al., 2004; Cameron & Quinn, 2006). This finding is consistent with the
results of Shulz et al. (1995). Shulz et al. (1995) found that the clan culture leads less burnout.
Although not the same, the results of the study are also similar to the findings of Schuler (1977)
on participation and burnout relationship, and the findings of the studies examined the
associations of participation in management, job satisfaction, and organizational commitment
with burnout (Sundin et al. 2007; Lambert et al., 2010) (Kalliath et al., 1998; Tan & Akhtar,
1998; Koustelios & Tsigilis, 2005; Tsigilis et al., 2006; Griffin et al., 2010).
Similar results were found for the hierarchy culture. There was a negative relationship between
the hierarchy culture and burnout, and role ambiguity also mediated this relationship. It is clear
that how hierarchy culture reduces the role ambiguity with its typical features such as formalized
and structured work-place, orders, formal rules, and uniformity (Dwyer et al., 2003; Stoica et al.,
2004; Cameron & Quinn, 2006). The negative relationship between the hierarchy culture and
role ambiguity was expected direction and consistent with previous findings (Dzamba, 1977). On
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the other hand, while the hierarchy culture was associated with burnout, the direction of the
relationship was the opposite to that which was predicted.
It was determined that the adhocrachy culture affected the burnout both directly and through role
ambiguity. As predicted, a positive relationship was observed between the adhocrachy culture
and role ambiguity. On the other hand, the study s results indicated, the adhocracy culture was
characterized as dynamic, entrepreneurial, and creative work-place (Dosoglu-Guner, 2001;
Cameron & Quinn, 2006), increased the level of burnout, contrast to our hypothesis.
When we evaluated the interactions between the marketing culture, role ambiguity, and burnout,
we found no relationship between the marketing culture and role ambiguity, and a negative
association between the marketing culture and burnout. At this point, we made a several
comparison for the conceptual model against alternatives model, and we saw that the partial
mediation model -the path from the market culture to role ambiguity was restricted to zero, and
the path from the market culture to burnout was free estimated- provided the best fit of the
models we evaluated. When we completely removed the market culture from the analysis, we
observed a significant chi-square difference, and the conceptual model demonstrated a
significantly lower chi-square than alternative model. Hence, although the market culture had no
significantly impact on burnout through role ambiguity, direct effect of the market culture on
burnout made a significantly contribution to the retained model.
Taken together these results, it will be useful to examine both the hierarchy culture and the
adhocracy culture s associations with burnout. When looking at features of these organizational
culture types, it can be seen that these two organizational culture types are completely opposite
of each other (Cameron & Quinn, 2006). In this context, the results about both culture types were
opposite to our hypotheses, are significant. Therefore, the explanation of reasons that led to the
opposite results, may be same for the hierarchy and market culture. This situaiton may be
explained by taking into consideration the characteristics of the hierarchy and the adhocracy
cultures. As might be remembered, whereas the management of employees is concerned with
secure employment and predictability in the hierarchy culture, people stick their necks out and
take risks (Cameron & Quinn, 2006), and the leaders are considered innovators and risk takers in
the adhocracy culture (Dastmalchian et al., 2000). These cultural features are directly related to
uncertainty concept. Uncertainty has been defined as an individual s perceived inability to
predict something accurately (Milliken, 1987), or the psychological state of doubt about what
current events mean or what future events are likely to occur (Watson, 2004). The relationships
between both the hierarcy and the adhocracy culture, and burnout can be examined by
uncertainty avoidance concept which is one of the Hofstede s cultural dimensions. According to
Hofstede (2001), uncertainty avoidance refers to a society s stress level in the face of an
unknown future, and different societies have adapted to unstructured situations in diffferent
ways. In a high uncertainty avoidance society like Turkey, people prefer their lives to be
structured, well organized, and secure. They rely on rules and institutionalized procedures to
reduce stress and anxiety when facing ambiguity and uncertainty (Brodbeck & Frese, 2008).
Therefore, people in this study had a less burnout level in the hierarchy culture as uncertainty
level weak than in the adhocracy culture as uncertainty level high. Herewith, it ca be said that the
relationships between both the hierarchy culture and the adocrachy culture, and burnout vary
from society to society, and uncertainty avoidance moderates these relationships. Thus, in
accordance with uncertainty avoidance level, we could see a negative association between the
hierarchy culture and burnout in a high uncertainty avodinance society, and opposite to this, a
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positive relationship in a weak uncertainty avodinance society. Similarly, whereas we might

observe a positive association between the adhocracy culture and burnout in a high uncertainty
avodinance society, a negative relationship could be seen in a weak uncertainty avodinance
society.
At this point, Lambert et al. (2010) found a positive relationship between formalisation and
emotional burnout, which they had not expected in their study concluded in US. They connected
this unexpected result to their measurement, and denoted they might measure the perceptions of
bureauctaric red tape rather than formalisation. Also they found a negative association between
input into decision making (decentralization) and emotional burnout . In fact, with a view
point of uncertainty avoidance, both the results of Lambert et al. (2010) are valid for a weak
uncertainty avoidance society like US, and our results are suitable for a high uncertainty
avoidance society like Turkey.
On the other hand, the above explanations appear in a conflict with our hypotheses about role
ambiguity, and the results obtained. In fact, although ambiguity is quite similar to uncertainty,
these two terms should not be confused. This is because ambiguity implies that alternatives are
known, while uncertainty implies that the alternatives are potentially unknown or even
unknowable (Clampitt & Williams, nd). Therefore, people generally desire a clarity in their
roles, and feel discomfort and disquiet in an ambiguous work place regardless of level of
uncertainty avoidance. For example, Bauer and Spencer (2003) found no difference between role
ambiguity and need for clarity between Germany (a high uncertainty avoidance society) and US
(a weak uncertainty avoidance society).
Derived from these findings, there is a need for further studies to investigate how the hierarchy
and the market cultures are associated to burnout in different societies. Future researches also
should examine the moderating effect of uncertainty avoidance on relationships between
organizational culture types and both role ambiguity and burnout.
As with every study, there are also potential limitations for this study. First, the results of the
study should not be generalized to other socities, as the survey was administered in Turkey.
Future studies should, therefore, allow for generalizations regarding this subject and must cover
different countries (Bolat & Y lmaz, 2009). Secondly, sample size might be another limitation of
this study, since structural equation modeling needs a large sample size. Thus, small sample size
may produce biased results (Theodorakis, 2010). In the study, chi-square, RMSEA, CFI ve NFI
fit indices were used for analyzing the data and comparing to models. According to Tanguma
(2001, 775), GFI, AGFI, NFI and chi-square indices were unstable for smaller sample. In this
situation, chi-square ve NFI values could be affected by sample size. On the other hand, CFI and
RMSEA indices which were used for comparisions between the conceptual model and
alternative models were the least sensitive fit indices to sample size (Fan et al., 1999; Tanguma,
2001). Thus, used of CFI and RMSEA indices in the analysis could reduce propability of biased
results.
In conclusion, in this study, we determined that the organizational culture types had an effect on
burnout both directly and through role ambiguity and directions of these effects were changes
due to organizational culture types.
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A DESCRIPTIVE STUDY REGARDING THE ROLE AND ASSESSMENT

OF THE EDUCATIONAL TECHNOLOGY AT SECONDARY SCHOOL
LEVEL KHYBER PUKHTOON KHWA PAKISTAN
Dr Sajjad Hayat Akhtar
Head Master in Provincial Education Department
Mardan Khyber Pakhtunkhwa Pakistan
Dr Muhammad Naseer Ud Din
Assistant Professor, Institute of Education and Research,
Kohat University of Science and Technology, Pakistan
Dr Syed Wajid Ali Shah
Assistant Professor, Faculty of Education
Abdul Wali Khan University, Mardan, Pakistan
Abstract
This Descriptive Study was conducted in Khyber PukhtoonKhwa Pakistanto find out the Role
and Assessment of the Educational Technology at Secondary School Level. In this study the
authors to evaluate the role of educational technology at secondary school level in Pakistani
context. The study has defined the role of emerging technology, needs of educational
technologies, impact of educational technology and effectiveness of educational technology. The
main objectives of the study were to determine the role of emerging technologies, needs, impact
and effectiveness of emerging technologies at secondary school level. The following results were
drawn by the researcher in the light of the analysis of the data. It was found that the educational
technology have facilitated secondary education as an interactive process. Computer had
disseminated theoretical and practical activities for remedial teaching and learning process.
Computer mediated communication for counselling was not used. Besides, computer was not
used in science practical, overhead projector, educational TV were not used and educational trips
and exhibitions are not arranged. There is also shortage of skilled educational technologist.
Keywords: Educational Technology, Emerging Technologies, Computer and Secondary School.
1.
Introduction
The present era is of technology. The foundation of all types of technology is laid down in
educational institutions. The education at secondary level plays a pivotal role and is held
responsible for the development of society. Therefore, secondary education can be made effective
with the use of educational technology. The secondary schools are using educational technology in
curriculum development, in learning process and in the evaluation of learners. Its scope and needs
are becoming greater day by day.
Aggarwal J.C (1995, PP.1,2) Technology has two aspects, i.e. technology as things and technology
as social process. Technology as things in the use of scientific knowledge to practical works by
organization which involve in 2 Ms i.e. machinery men, while the technology of social process
means the use of scientific and other organized knowledge to practical works by hierarchically
ordered systems which include men machines.
The word E.T was recognized in 1967 with the establishment of national council for
Educational Technology in the United Kingdom. The United Kingdom Association for programmed
learning immediately added E.T to its title in 1968. In the USA it was the department of AudioCOPY RIGHT 2011 Institute of Interdisciplinary Business Research
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Visual Instruction of National Education Association for Educational Commission and technology
in 1970. The word System appeared quite regularly in the early writings on educational
technology. But it did not become widely adopted at once as a central conceptual frame work
Educational Technology permanently established now as a field of study. Instructional development
educational communication and educational resources are some names which describe the field.
Venkataiah (1996, pp.4,7)
2.
Literature Review
Educational Technology is a field made up of elements of other areas. There is very little
content which is unique. It has taken components of cognitive psychology, perception psychology,
measurement, evaluation, communication, management, media and system engineering. These
components are organized synergistically to a point where the whole is larger than the total of its
components. The field is quickly evolved from audio-visual education through educational
communication to Educational Technology. There are limits to be overlapping of ideas namely
among three terminologies viz Educational Technology, instructional technology, communication
technology. .According to Kumar, K.L (2006, p.2) technology is sign to the techniques as well as
the technical invention. A methodical way of applying the techniques to achieve an objective is as
important as the use of technical equipment for the same. In fact, techniques are compute as the
software and the equipment as the hardware of technology .
Early evolution referred to the role of technology in education which signifies the use of
audio-visual equipment, i.e. hardware in educational process. Latter developments recognise the
concepts of technology of education, i.e. techniques and methodologies of the teaching learning
process. In fact this is the software aspects of educational technology.
3.
Objectives
Objectives of the study were to:

1. Evaluate the role of educational technology at secondary level in Khyber Pukhtoon Khwa.
2. Assess the impact of educational technology at secondary level in Khyber Pukhtoon Khwa.
4.
Methodology
Data was collected through survey and questionnaires. The researcher administered three different
self assessment questionnaires and sampled principals, senior school teachers and students at
secondary school level in 12 districts out of 24 districts of Khyber Pukhtoon Khwa province
(Pakistan) i.e. Mardan, Nowshera, Peshawar, Abbottabad, Kohistan, Shangla, Malakand, Swat,
Swabi, Bunner, Dir Bala and Kohat. For demographic profile percentages were used to compare the
frequencies of the responses. Chi square was applied to measure the role, needs, impact and
effectiveness of educational technology at secondary school level. Heads of the schools, SSTs,
students of secondary school and GHS, GGHS total population 1,2,3, and 4 were taken as a sample
1,2,3 and 4 i.e. 25%, 25%, 25% and 5%.
5.
Result
The following results are presented after the data were analysed statistically.
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Table No.1 Opinion of Principals regarding the availability of educational technology

S.No
1
2
3
4
5
6
7
8
9
10
Statement
The principal possess skills in the use of latest
technologies.
Teachers are interest to use emerging technologies in
teaching learning process.
The emerging technologies make easy the teaching
learning process as an interactive process.
Emerging technologies have promoted perception of
the learners.
Emerging technologies have proved to develop
intellectual level of the students.
Emerging technologies allows direct access to other
supporting sister s organization.
Emerging technologies provides a plane to achieve
curriculum objectives.
The principal has have refresher training in the use of
emerging technologies.
Emerging technologies covered the vast area for
Providing relevant information to teachers.
The principals have had enough personal control over
media.
SA
UD
DA
SDA
50
40
10
20
20
2
38.5
70
30
20
15
90.3
100
10
16
10
234
100
20
10
10
238.5
110
10
10
301
120
10
379.7
100
20
15
240.3
60
40
10
10
20
67.1
100
30
10
252.8
50
40
10
30
10
45.7
Table No.1: It is observed from the above analysis that calculated value of chi-square is greater than
table value of 2 = 9.488 at P = 0.05, so as a whole that the result is significant. Therefore, it is
supported that the emerging technologies are the basic needs of the schools.
Table No.2 Opinion of Teachers regarding the availability of educational technology
S.No
1
2
3
4
5
6
7
8
9
10
Statement
Your learners are able to use your chosen media
conveniently and without undue cost to themselves.
Yours learners have positive feeling about your chosen
media, and do they have the learning skills to use them.
Education television is accessible medium for the
secondary students.
Educational television is the effective sources of
increasing enrolment rate.
Computer is used in your teaching learning process.
Computer disseminated theoretical and practical learning
activities.
Internet and www have enabled students to gain new
learning experience.
Institutions have providing educational technologies
items for the benefits of the students.
The teachers has have related training in use of
educational technologies.
The teachers has have related refreshers course regarding
educational technologies.
SA
UD
DA
SDA
250
140
10
60
40
628.3
100
200
250
45
354.5
50
30
20
200
300
515
450
70
10
40
30
1150
100
50
30
20
400
848.3
350
150
10
50
40
643.3
400
100
60
40
860
200
50
50
300
525
100
50
200
250
676.1
80
50
20
300
150
415
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Table No.2: It is observed from the above analysis that the calculated value of chi-square is greater
than table value of 2 = 9.488 at P= 0.05, so as a whole the result is significant. Therefore it is
supported the statement that the students faced problems in having access and use of emerging
technology.
Table No: 3 Opinion of Students regarding the availability of educational technology
S.No
Statement
YES
TSE
NO
1
2
3
4
5
Access to radio as a medium is cheaper for you then such media.

Educational television is a familiar medium for you.
Latest information s about the courses was provided through ETV.
Computer mediated communication is fully interactive medium for you.
Educational technology encourages access of students to computer
mediated communication.
Computers are used in science practical in the laboratories.
It was difficult to provide computer mediated communication facilities to
remote areas.
It was difficult to provide scientific laboratories facilities to remote areas.
Emerging technologies have proved to increase intellectual level of
students.
Students faced problems in having access and use of emerging
technologies.
3150
3450
3720
4050
3830
750
650
480
150
180
600
600
300
300
490
2100
3050
400
450
2000
1500
1213.3
3200
4030
300
200
1000
370
3053.3
4200
100
200
6
7
8
9
10
2
2730
3430
4939.2
6510
5460.9
2010
5914.5
7293.3
Table No.3 It is observed from the above analysis that the calculated value of chi-square is greater
than table value of 2 = 5.991 at P= 0.05, so as a whole that there was no provision of educational
technology at secondary level.
6.
Conclusions
i.
ii.
iii.
iv.
v.
vi.
vii.
viii.
ix.
x.
The focuses of varied educational technology revealed that radio and television are not
accessible as a medium of instruction both in rural as well as urban areas.
It was found that the teachers did not make effective use of educational technology in rural
areas.
It was discovered that the educational technology is not available for technical subjects both
in rural as well as urban areas.
It was also revealed that internet is not available both in rural as well as urban areas.
It was found that computer mediated communication is not use for counselling and science
subjects both in urban as well rural areas.
It was found that the teachers do not send their recommendations about the subjects to higher
authorities both in rural as well as urban areas.
In the same way that the syllabus is frequently being revised both in rural as well as urban
areas.
It was also found that the teachers have no chances for refreshers courses both in rural as well
as urban areas.
It was discovered that enough places are not available for the use of educational technology.
It was discovered that the educational exhibition are not frequently arranged both in
402
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Recommendations
Keeping in view the constraints due to in-adequate educational technology facilities the
researcher makes a few general recommendations. The researcher is firm in his belief that: if the
existing in-adequate resources are optimally utilized and efficient management is corrected; the
motivation for innovation would start within rural as well as in urban areas schools themselves.
i.
Educational technology accessibility may be ensured in all the secondary school in Khyber
Pukhtoon Khwa.
ii. Radio, television, computer and internet may be provided to each school.
iii. Educational technology may be provided for technical subjects.
iv.
Educational technology may be used effectively.
v.
Audio cassettes may be used for drama and documentaries.
vi.
Computer mediated communication should be used for counselling and science practical.
vii. Flash card, felt board, static model, overhead projectors, sectional model, slides, opaque
projectors and models should be used in teaching learning process both in rural as well as
urban.
viii. Enough places may be provided for the use of educational technology.
ix.
Educational technology should be provided for technical subjects.
x.
Teachers may be sent their recommendations about the subjects to higher authorities.
xi.
The sufficient budget should be allocated for educational technology.
xii. The Head of the institutions should be authorised to purchase educational technology
equipment.
xiii. Television channel should be launched for secondary students.
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References
Aggarwal, Jc (1995) Essential of educational technology teaching learning, India, Vishal Printers,
Delhi.
Best W.J and khan J.V (1989) Research In Education, Sixth Edition, New York Prentice Hall.
Commission on Instructional Technology (1970) To Improve Learning. A Report of the President and
Congress of the United State Washington, D.C.
Govt of NWFP (2006), Annual Statistical Report of Schools in North West Frontier Province,
Directorate of School & Literacy NWFP.
Govt of NWFP (2007), Annual Statistical Report of Schools in North West Frontier Province,
Directorate of School & Literacy NWFP.
Kumar, K.L (2006) Educational Technology, New Age international (P) Limited, Publishers New
Delhi.
Venkataiah.N (1996) Educational Technology, APH Publishing Corporation Daryaganj New Delhi.
Govt. of Pakistan (1999) District Census Report of Abbottabad Publication No.32.
Govt. of Pakistan (1999) District Census Report of Kohistan Publication No.45.
Govt. of Pakistan (1999) District Census Report of Mardan Publication No.28.
Govt. of Pakistan (1999) District Census Report of Nowshera Publication No.55.
Govt. of Pakistan (1999) District Census Report of Peshawar Publication No.33.
Govt. of Pakistan (1999) District Census Report of Shangla Publication No.106.
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AN EXPLORATORY STUDY REGARDING THE ROLE

OF DEMOGRAPHIC VARIABLES AND SOCIAL STATUS
OF FEMALE EDUCATION IN PAKISTAN
Listed in ULRICH S
Miss Imrana Rani

Phd. Scholar, Education Department
Islamia University Bahwalpur
Kohat University of Science and Technology
Dr Abdul Rehman Khaleeq
Provincial Education Department
Govt. of the Punjab, Lahore
Mr. Munir Khan
Ph.D Scholar, Institute of Education and Research,
Kohat University of Science and Technology,
Abstract
The study was aimed to exploring regarding the role of demographic variables and social
position of female education in Pakistan. Education is the principal instrument in awakening the
child s professional training and helping him to adjust normally in the society. It is the
investment made by the nation in its children for harvesting future crop in the form of a
responsible and productive adult of the society. Education is a process of socialization according
to the social needs of the society. Education of women is regarded as key element in their quest
for equality. The impact of education on women themselves, their family and society cannot be
over emphasized. The contribution the women can make towards economic development of
families and the economic system, need to be monetarily assessed to see how much is best if they
are involved in productive behaviour. The objectives were: (i) to exploring the role of
demographic variable of female education in Pakistan; (ii) to study the descriptive analysis of
social position of female education in Pakistan. The lowest level of education for inclusion in the
sample was at least secondary school certificate. The study was delimited to Punjab. The cluster
random sampling technique was used for administering the instrument of this study. The
conclusions of the study were: (1) Majority of the respondents was found well educated and most
of them were married up to the age of 25 years. (2)They were living in a joint family system, but
family responsibilities did not hinder their career because they were performing household
jointly and getting the things according to their desire. (3) Salary of majority of the respondent s
was in the range of Rs:5,001-10,000 per month. However, a few respondents had other sources
of income up to Rs.5000; (4) Majority of the respondents claimed importance of educated female
because education solves the financial problems and enhancement of personality and awareness.
Female education should be encouraged and expended in all regions of the country proper
arrangements for female education can secure them and make them able to earn and live full life.
Keywords: Female Education, Family, Society, Personality, Freedom of Women.
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1.
Introduction
Education is basic in the life of man, which is able to sharp his faculties of mind, and
helps to grow harmoniously. This also helps to grow harmoniously in every sphere of lifePhysical, intellectual social and emotional. Education plays vital role in the progress of a country
also. Education is a life long investment in human resources development. The quality and
quantity of educated manpower determine the strength of a nation. All developed and educated
countries have recognized the needs of intimate relation of education of life and needs of the
community. Education is a key factor in economic development and social transmission. As
observed in UGC report 1893-84. A good, efficient and relevant system of education must be
forward looking and flexible to go in for the adventure of ideas.
Education plays an important role in human resource development. It raises the
productivity, efficiency of individuals and produce skilled manpower that is capable of leading
the economic development. Importance of Education for human resource development does not
need any justification and clarification. The developed countries attach highest priority to
education; same is the case with the developing countries. The constitution of Pakistan accepts
education as one of the fundamental rights of a citizen as well as constitutional commitment of
the government accepts to provide access to education to every citizen (Govt. of Pakistan, 2000).
Farooq, (1993) describes that education is as old as civilization. In the earliest days
however it was unorganized and on an individual basis. It was also practical in nature. In the
beginning there were no schools. Boys and girls were taught by their own parents to perform the
tasks that all adults must do to live. Self-preservation was the basis of all learning. The boy
learned from his father and the older men of tribe how to hunt, fight and take part in tribal
worship and government. The girl was, likewise, taught by her mother and older women of the
tribe. Learning and doing were not separated. The purpose of education in the primitive society
revolved around the present. Primitive education sought to satisfy the needs of the present and of
the very immediate future. The dominant purpose of the education in primitive societies was that
of survival. To ensure survival, primitive education had to provide instruction for these needs,
adequate food, protection from hazards of nature and protection from enemies. Education is an
attempt to change human behaviour through the process of learning as reflected in the aims of
education. Education as a social institution wants to bring about those behavioural changes,
which are considered worth while and desirable by the society. All learning is not education.
Only those changes in action, thinking and feelings are termed as education that are socially and
culturally approved and desired. Learning includes changes, both positive and negative, but only
those acquisitions are termed as education which takes into account the cultural norms, national
values, ideas and aspirations (Govt. of Pakistan. 2002).
Farooq (1999), describes that Allama Dr. Muhammad Iqbal in his lectures on the
reconstruction of religious thought in Islam categorically rejected the implication that there was
discrimination in Islam based on sex. He says, From the inequality of their legal shares
inheritance between sons and daughters it must not be supposed that the rule assumes the
superiority of males over females. Such on an assumption would be contrary to the spirit of
Islam. The Qur an says, And for women are rights over men similar to those for men over
women 7. Mostly all the Harems of Prophet (PBUH) were adorned with the ornament of
knowledge. Great Grand Lady Bibi Khadijat-ul-Kubra was poetess of first order. Bibi UmmeCOPY RIGHT 2011 Institute of Interdisciplinary Business Research
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2.
Literature Review
Higher education is today recognized as a capital investment and is of paramount importance for
economic and social development of the country. Institutions of higher education have the main
responsibility for equipping individuals with advanced knowledge and skills required for
positions of responsibility in government, business and other professions. Only highly educated
manpower can handle advanced technology. Thus, without the participation of highly qualified
manpower, the process of economic development is very difficult to be accelerated. It is,
therefore, important that decision-makers must recognize that higher education is an important
factor of development (Govt. of Pakistan, 1998).
Khalid H. (1992) explains that for Pakistani women, formal measures to improve their
status and integrate them into national development started at the turn of the century, before
political independence. From the Women s Reform Movement (1886-1925) to independence in
1947, Muslim women in South Asia radically altered the parameters of their own existence.
Starting with a demand for female education, women proceeded to demand the right to own
property and to vote. In this half-century upper and middle class women moved from being
shrouded silent creatures confined to the women s sections of their homes to being vocal active
individuals. For the first time, the voice of Muslim women was heard in the sub-continent. They
were addressed and started addressing themselves as a group in conferences, political rallies,
newspapers and journals and women s organizations. Muslim women became aware of and
participated in political movements at the same time that they became aware of and fought
against their own oppressed conditions as women. In fact, in the years proceeding independence,
an effective alliance was forged between those supporting women s rights and those leading the
Pakistan movement. As a result, independence brought universal franchise, and the right to
education and employment for all citizens.
Salma was a good writer. How finely our Prophet (PBUH) puts once If any body has slave girl
and be arranges for her better education and looks after her very nicely, he than marries her
legally after setting her free, he will get double reward there upon. From the members of house
of Prophet (PBUH), Bibi Fatima, the illustrious daughter of Prophet (PBUH) had grasping hand
in the science of Qur an and Hadith. She was also eloquent speaker and proficient poetess. In the
same way her daughters Bibi Zainab, Bibi Umme-Kalsoom and grand daughters Bibi Sakina and
Fatimat-us-Sughra were also reputed scholars and teacher of Muslim Sciences (Khalid 1990).
Hassan, (1982) noted that the status of women in Islam was much higher than the one
granted by Buddhism and Hindusim. Islam gave women the legal rights of property, marriage
and divorce. Her status in the community, very much like the status of a man, was determined by
her needs. The status of woman as a daughter, wife and mother was raised from that of an
unwanted baby, who used to be buried alive in pre-Islamic days in Arab countries to one whose
upbringing and nature with love and respect, become an act most acceptable to God and resulted
in achieving God s blessings (Ministry of Education 2000).
Ahmed, (1996) describes that the backwardness of a country depends mainly on the
percentage of illiterates. This percentage is very high among men in the world, but alarmingly
high in the case of women. Women form almost half of the population of a country. If such a
large portion is denied the privilege of education, the country is found to lag behind. There was a
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time when it was said that educated women are apt to neglect their domestic duties and lose their
tender grace and feminine virtue. An educated woman was respected to be self-conceited, good
only for novel reading, playing on the organ and disobeying her parents. But those days are gone.
It is now pretty difficult to procure a good match for a girl who does not have love to read and
write. The importance of education for women is now admitted on all hands (Philppines, 994).
Shoukat, (1986) explains that the status which a society accords to women has always
been considered a pertinent yardstick to measure the standard of civilization it is deemed to have
achieved. It has been an issue that has attracted attention through out the ages from prophets,
sages, statesmen and reformers. In spite of the over whelming significance of their role in
maintaining a social system women have struggled for centuries to win recognition of their
rights, Discrimination and petty tyrannies to which they have been subjected is a very sad
chapter of human history. Even to day, the fight is not over. Practically in every modern society,
advanced or backward feminist movements are fighting against numerous built in male
prejudices. It is, in view of these facts that the United Nations had made improvement in the
status of women an integral part of the charter of Human Rights. Since its inception nearly forty
years ago, through conferences, committees and conventions, it has tried very seriously to
impress upon the member states to put removal of sex discrimination as one of the top priorities
in the agenda for national development. The Qur an does not place any economic responsibilities
on women and ensures that all women are to be provided for by men related to them by blood or
marriage. At the same time, women are given the right to earn and retain their personal earnings.
Muslim women are free to use their financial resources in whatever way they like. They can buy
and sell property or invest their money in any trade or business. They can give the mandate of
their property to any person of their choice without even the consultation of their consorts. In
economic matters, the juridical status of women is the same as that of men. The law allows them
to make use of their material assets in whatever way they please. Despite strong family ties,
Muslim women can maintain their independence in various walks of life Sudha K.D. (2000).
Khalid, (1990), describes that the women in general are dehumanized and exercise little
control over either themselves or on affairs affecting their well being. They are treated as
possessions rather than as self-reliant and self-regulating humans. They are dispossessed and
disinherited in spite of legal safe guards. The vast majority of rural female are made to work as
long as sixteen to eighteen hours a day without any payment. Their status is based mostly on
local customs irrespective of Quranic percepts. The Islamic provisions do receive lip service but
their influence is greatly masked by country s old cultural patterns. Islam has given women an
honoured place and given them fundamental rights in matters relating to marriage, divorce and
inheritance, her participation in society and her dignity were recognized in unequivocal terms. In,
practice, however, like the rest of the Muslim world, the Pakistani women are denied due social
prestige and economic equality. They are mostly confined to only monotonous affairs, without
opportunities for intellectual growth.
Shoukat, (1986), describe further describes that all biographies of the prophet show that
he was an ideal and an exemplary father. His paternal affection and concern were exactly the
same for his sons and his daughters. They were the equal recipients of his fatherly care and
devotion, and on their death, he felt the same grief and bereavement 15. He added that the
society as a whole has also a responsibility in this matter. It must create a change in the attitudes
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of the parents and in the people s responses to transformations that are taking place in the status
of women in our social system, with a view to eliminate those traditional notions which have
generally debarred our women from public life. There should be full realization that the quality
and excellence of a nation is judged by the place it accords to women in society by giving them
rights which belong to them by law and religion, the society will not be a loser. It is a
sociological investment which can result in a lot of social good. No one would question that a
woman should be a good wife and a devoted mother but to confine better role merely to the
narrow world of domesticity is a gross miscalculation of her abilities. She should be given a
chance to fight, shoulder to shoulder with men the battle of existence on various fronts, so that
her aptitude and abilities can be purposefully chanalized 16. Shoukat further explains the states
of women that the status of women during the Muslim rule over the subcontinent and later under
the British rule was based mostly on custom and environments produced by the interaction of
various cultural and religious groups. The status accorded to them, however, was not strictly
according to religious principles. Islam had given women a very respectable niche, had conferred
upon her certain fundamental rights in matters relating to marriage, divorce and inheritance. Her
social dignity and the contributions she would make towards the betterment of life in society
were recognized in unequivocal terms. In practice, however, over the Indo-Pakistan Subcontinent like the rest of the Muslim world, women were degraded in social prestige and
economic equality. They were mostly confined to domestic drudgery and draped in purdah, they
were completely debarred from public life 17. The late Allama Iqbal whose massage touched the
deepest chords of Muslim devotion to Islam, and who became the spiritual father of the Pakistan
movement also impressed upon his coreligionists that the place accorded to women in Muslim
society was derogatory to human dignity and the treatment meted out to her was un Islamic.
In Arabia, the birth place of Islam the position of woman was in no way better and elevated.
Patriachel form of social structure made women a part of men s property. Similar drastic changes
in favour of women in other fields of life were brought by Islam. In educational, social and
political spheres, she has been accorded a status much higher and honourable than was conferred
on her by other creeds.
2.1
Statement and Objectives:
The study was aimed at exploring the status of female education in Pakistan. The
objectives of the study were the status of female education in Pakistan, to evaluate the role of
female education as a daughter, mother and a wife and to explore the legal status and political
rights.
3.
Method and Procedure:
The study was aimed to exploring the role of demographic variables and social position
of female education in Pakistan. For the purpose of data collection, questionnaire was
administered to the sample, on the following categories of the respondents: (i) 200 teachers; (ii)
200 Nurses; (iii) 200 Telephone Operators; (iv) 200 house wives; (v) 200 bankers; (vi) and 200
Police Officers.
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3.1.
Population
All the women in Punjab, educated up to secondary education level, constituted the
population of the study.
3.2
Sample
A cluster sample of 1200 respondents, randomly selected from 8 districts of Punjab.

These are Bhawalpur. D.G.Khan,Fasialabad, Gujranwala Lahore, Multan Rawalpindi and
Sargodha
3.3
Research Instruments
One questionnaire comprising two sections; one each for social role and the economic role
of the females, was developed and administered on the following categories of the respondents:
i.
Teachers/Education Officers
ii. Nurses/Lady Health Visitors
iii. Telephone Operators/Clerks
iv.
House Wives
v.
Bankers
vi.
Police officers
3.4
Data Collection
The questionnaire developed for the purpose of data collection was tried out on a limited
sample. The data were collected by the researcher herself through the questionnaire designed for
the purpose and the remaining data were collected with the help of two research assistants
3.5
Data Analysis
Data collected through questionnaire were tabulated, analyzed and interpreted by

applying percentages at descriptive statistics in the light of the objectives of the study.
4.
Result and Interpretation
Table 1:
Distribution of responses about profession of the respondents
Profession
Number
Percentage
Nursing
Banking
Teaching
PTCL
Police
Housewives
200
200
200
200
200
200
16.7
16.7
16.7
16.7
16.7
16.7
1200
100
Total
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Table 1 shows that the respondents of all categories included in the sample were equal in
number. The respondents who were administered the questionnaire, responded to it.
Table 2:
Distribution of responses regarding education of respondents

Number
Percentage
Matric
251
20.9
F.A
275
22.9
BA/B.Sc
266
22.2
MA/M.Sc
225
18.8
Others
183
15.3
Total
1200
100
Qualification
Table 2 shows that the qualifications of 66 percent respondents were found up to be BA

/BSc degree. Only 18.8 percent were with a Masters degree. 15.3 percent reported that they had
other certificates and diplomas, in addition to other than the formal qualification.
Table 3:
Distribution of responses about marital status of respondents

Marital status
Number
Percentage
Married
Unmarried
676
524
56.3
43.7
Total
1200
100
It is clear that in the present respondent s data married respondents were more find than
unmarried respondents.
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Table 4:
Distribution of responses regarding age at the time of marriage of

the respondents
Age
16-20
21-25
26.30
Above-30
Total
Respondents
149
204
214
109
676
Percentage
22.0
30.2
31.7
16.1
100
In the age wise table the distribution of respondents describes that out of the 676 married
respondents over 52 percent were married by the age of 25 years. Almost one third of the
respondents got married between the age level 26-30.
Table 5:
Distribution of monthly salary of the respondents
Responses
Number
Percentage
Up to
5,000
5,00110,000
294
29.4
458
45.8
10,001-15,000 15,00120,000
140
14.00
72
7.2
Above 20,000
Total
36
.36
1000
100
Table 5 reflects that per month salary of 45.08 percent respondents was found between
Rs. 5,001 and Rs. 10,000, followed by 29.04 percent who claimed their salary Rs. 5,000 or
below. The salary of 14.00 percent was found in the range of Rs. 10,001-15,000. Only 7.02
percent fell in the range of Rs. 15,001-20,000.
Table 6:
Distribution of respondents about effects of female education
Responses
Number
Percentage
Financial
Importance
of Educated
Females
Enhancing the
personality and
awareness
Total
327
27.25
465
38.75
214
17.83
1200
100
Social
194
16.17
Table 6 depicts that 27.25 percent respondents claimed financial effect of female
education, followed by 38.75 percent who claimed importance of educated female. Enhancement
of personality and social effect was claimed by 17.83 percent and 16.17 percent respectively.
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Table 7: Distribution of responses regarding qualification of mothers socio-economic

status
Prima
I
II
F.A
B.A
M.A
Total
111
53
28
1200
9.25
4.42
2.33
0.75
100
P.T.C.
Agricultu
re
15
24
1200
1.25
0.67
100
Illiterate
ry
564
284
151
Percentage
47.00
23.67
12.58
Occupatio
Unemploy
Busin
Heal
Teach
Banki
ment
ess
th
ing
ng
765
198
75
90
25
Percentage
63.75
16.50
6.25
7.5
2.08
Income
0-5,000
5,011-1,0000
10,001-15000
15,001-20,000
773
175
125
90
37
1200
64.42
14.58
10.42
7.5
3.08
100
Number
III
Matri
Middle
Qualificat
ion
Number
Numbers
Percentage
Army
public
Police
Total
Above
20,000
Total
i.
Table 7 indicates that 45.5 percent of the respondent s mothers were found with
qualification from primary to matric. Whereas, 47.00 percent of them were illiterate.
None had higher qualification.
ii.
63.75 percent of the respondent s mothers were found unemployed. However, 36.25
percent were found employed in variety of occupations.
iii.
89.42 percent of the respondent s mothers were found with income up to Rs:150,000.
Only 3.08 percent were earning more than Rs:20,000.
4.
Findings:
In the demographic section, the analysis of the data revealed that following findings:
i.
Sixty six percent respondents were found with qualification BA/B.Sc. Only 18.75 percent
were with MA/M.Sc degree. Other certificates and diplomas, in addition to other than the
formal qualification were reported by 15.25 percent respondents.
ii.
Out of total sample 56.33 percent respondents were found married and 43.67 percent
unmarried. Marriage upto the age of 25 years was claimed by 52.22 percent.
iii.
The analysis of the data revealed that financial effect of female education was claimed by
27.25 percent respondents, followed by 38.75 percent who claimed importance of
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education for female. Enhancement of personality and social effect was claimed by 17.83
percent and 16.17 percent respectively.
iv.
5.
So for salary analysis to concerned 7.02 percent fell in the range of Rs 15,001-20,000 per
month. Mothers of 62.25 percent of the respondents were found with qualification from
primary to B.A, 36.25 percent of the respondents mother were employed in a variety of
occupations and 3.08 percent of the respondents were earning more than Rs.20,000.
Conclusions
The survey has offered a snapshot of society in Pakistan at a point in time. There is
much that is positive, with increasing levels of education for both men and women, the improved
opportunities for work an the range of material possessions available for the women.
In general, the women seemed happy in their chosen jobs but they were faced with the
conflicts made by competing demands form work, financial needs to work, children, and running
a home. The more extended form of family life in Pakistan was also evident and this might be
part of the social provision that enables women to work while also having a family.
In the light of the analysis of data and findings of the study it was concluded that most of
the respondent s mothers were educated but a few of them reported that their mothers earned
more than Rs. 20,000 per month. Salary of majority of the respondents was in the range of Rs:
5,001-10,000 per month and majority of the respondents were claimed importance of educated
female because education solves the financial problems and enhancement of personality and
awareness. Education of women is regarded as a key element in their quest for equality. The
impact of education on women them-selves, their family and society cannot be overemphasized.
The contribution the women can make towards economic development of families and the
economic system need to be monetarily assessed to see how much is lost if they are not involved
in productive labour. Education and training alone can narrow the difference in competency and
achieving empowerment of women and their social position and placement of the talent where it
can be most productive.
6.
Recommendations:
One of the most interesting observations is the rapid change in society over just one generation.
However, this rapid rate of change generates its own stresses and strains. The survey reveals that
educational and workplace opportunities have grown quite markedly. Many women have taken
advantage of the increased opportunities. However, these women face some obstacles. It was
observed that majority of the respondents were found doing job to overcome the financial
problems. For which education is an essential element. For that purpose the govt. should make
such arrangement that girls going to their institutions should feel secure and safe. Further
research is recommended to obtain more relevant reliable and applicable results by taking a
larger sample from all the provinces and the society as a whole has also a responsibility in this
matter. It must create a change in the attitude of the parents and in the people s responses to
transformations. Print and electronic media should play a significant role to encourage the female
to come to the world of work.
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References
Ahmad, A. (1996) Muslim Women and Higher Education, (A case for separate institutions for
women), Islamabad. Institute of policies studies. P.36
Ali, K. and Hamid. A. (1999) Problems of Working Women in the Rural Informal Sector of
Punjab: Pakistan in the Lahore Journal of Economic vol. 4.
Farooq, R. A. (1993) Education system in Pakistan Issues and Problems. Islamabad: Asia
Society Promotion of Innovation and Reform in Education. P.96
Farooq. R. A. et al. (1999) Factors Affecting Development of Female Education in NWFP.
Issues and Problems in Development of Female Teacher Education and their Retention in
the Teaching Profession, Islamabad: Society for Educational Advancement Research and
Training. pp.10-12
Govt. of Pakistan. (2001). Pakistani Women Opportunities and Challenges 2001.
Islamabad.pp.66-69
Govt. of Pakistan (2002) Socio-Economic Indicators at District level Punjab Islamabad: Federal
Bureau of statistics pp. 40-45
Hasan Z. (1982) Women in Education in Pakistan Islamabad: Ministry of Women Development
Social Welfare and Special Education Islamabad. P.34
Khalid H. (1990) Education of Women and National Development, Islamabad: National
Education Council. pp. 10-11
Ministry of Education (2000) Pakistan School Education Statistics 2000-2001. Islamabad:
National Education Management Information System.pp, 102-106
Philppines, M. (1994). Education of Women in Asia, Proceedings of the Regional seminars on
the Education of Women in Asia, Asian Development Bank, Canada.
Shoukat, P (1986). Status of women in the Muslim world. Aziz Publishers Lahore. Pakistan.
Pp.46-49. 98-100,
Sudha K.D. (2000). Gender Roles. New Delhi: A.P.H. Publishing Corporation.
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COMPARATIVE STUDY OF QUALITY OF EDUCATION

IN PUBLIC AND PRIVATE SECONDARY SCHOOLS IN NWFP
Listed in ULRICH S

Kohat - Pakistan
Dr. Ali Murtaza
Preston University, Islamabad, Pakistan
Mr. Faridullah Khan
Lecturer, Institute of Education and Research,
Kohat - Pakistan
Abstract
The quality education is an indispensable and inevitable agent for change as education is a
process of civilization and development. The issue of deterioration of quality in education in
Pakistan, especially decline in quality of secondary education was the slogan of the day. The
major purpose of the research was to compare the managemet aspects in public and private
schools of NWFP. All the heads of secondary schools of public and private sector of the NWFP
province constituted population of the study. A sample of 216 head teachers (fifty percent from
public sector schools and fifty percent private schools) was selected from nine districts. NWFP
is generally distributed in three different Zones, which are Zone I, Zone II and Zone III. Due to
limited time and resources, the study was delimited to the nine districts of NWFP namely Kohat,
Karak, Hangu, Peshawar, Swabi, Banuu, Lakki Marwat, Abbotabad and Manschera. Two
hundred and sixteen secondary schools (twenty-four secondary schools from each sample
district) were randomly selected. The proportion of public sector schools and private sector
schools, boys and girls schools was equal. All the heads of selected 24 secondary schools of
public and private sector from each district (the proportion of public sector schools and private
sector schools, boys and girls schools was equal i.e. fifty fifty) were included in sample. The
questionnaires, one each for heads, secondary school of Public and Private Secondary Schools,
prepared and validated through pilot-testing, were used as the research instruments of the study.
Data collected through questionnaire research instrument was tabulated, analyzed and
interpreted by using simple percentage and Chi-Square as a statistical tool, in the light of the
objectives of the study. Main conclusions of the study were: that private sector schools had
actually less number of students and teachers at secondary level as compared to public sector
schools. In public sector schools student-teacher ratio was higher than that of private sector
schools. Regarding involvement of subordinate staff in decision making, keeping themselves as
a part of team while leading them and carrying out the wellorganized tasks, heads of private
sector secondary schools were better than heads of public sector secondary schools. The heads of
public sector secondary schools were more qualified academically as well as professionally,
having more administrative experience as compared to private sector secondary schools heads.
Keywords: Public schools; Private schools; Head teachers; Administrative aspects;
Management Aspects
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1.
Introduction
Education is the best investment in the national development. The return in this investment is to
produce the human capital suited to the needs of society, which is acquired after a long time.
Primary education is considered necessary for the developing countries of the world. The
endeavors to make it compulsory helps in increasing the literacy rate, the secondary education is,
in a way a terminal stage at which the economy starts getting its consumptions in many sectors
(Coombs, 1968).Secondary education holds a key position and is the terminal stage for majority
of students. The largest number of educated manpower in Pakistan is available at this stage. The
economists consider the secondary education as a backbone of the national economy while the
sociologists consider it is an effective weapon of social reforms. It can be said that secondary
education is closely related with the economic development and social welfare of the country
(Ali, 1970). Secondary education is an important sub sector of the entire education system. On
the one hand, it provides middle level of work force for the economy and on the other hand it
acts as a feeder for the higher education. The quality of higher education, which is expected to
produce high quality professional in different fields of social, economic and political life of
country, depends upon the quality of secondary education. This level of education therefore,
needs to be organized in such a way that it should prepare young men and women for the pursuit
of higher education, as well as make them able to adjust with their practical lives meaningfully
and productively (Brown, 1998).
The constitution of Pakistan accepts education as one of the fundamental rights of a
citizen as well as constitutional commitment of the government accepts to provide access to
education to every citizen (Govt. of Pakistan, 2000). The education system in Pakistan consists
of a number of stages, primary, middle secondary, higher secondary and college and university
levels (Farooq, 1993). The quality of education is being struggled at all levels in Pakistan
alongwith other developing and under developed countries. Students in developing countries
have a mean level of achievement below that in industrial countries and their performance shows
a much greater variation around the mean (Iqbal, 1987).
2.
Literature Review
Secondary education holds pivotal position in education system, for it is terminal stage
for most of students and it also serves as a linkage stage between elementary and higher
education. It provides input for higher education and thus quality of higher education is
dependant upon secondary education. Secondary education is expected to expand and improve
such faculties in the adolescence so that they may play their role as useful citizens of Pakistan
(Baloch, I990). Secondary schools both Middle and High would become multipurpose schools
and provide general education with practical bias suited to the interests of the children and the
life of the community (Louis, 1987).
There are two sectors working side by side in the field of secondary education, i.e. private
sector and government sector in Pakistan (Govt. of Pakistan, 1979). Private sector plays an
important role in the development of education in a country. It helps both in the qualitative
improvement and the quantities expansion. Private sector bears a good deal of burden of the
expenditures on this important social cause even in the most advanced countries. In a country
like Pakistan where the population growth rate is about 3 percent, annually and only about 20
percent of the existing children are in the secondary schools, the support of the private sector is
the most needed to share this huge burden. Unless education is made free or heavily subsidized it
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cannot reach the underprivileged sections of society. Government spending has become
necessary to update the content and methodology of education. Huge governmental financing has
become essential to provide new services like guidance and counseling, to give vocational bias to
secondary education and to equalize educational expenditure (Maqsoodah, 1998).
Role of head teacher is considered as active driver for better management of schools at
any sector. A good head has to perform the role of team leader, supervisor, manager and
facilitator to teaching learning environments and also to motivate in case of any deficiency found
in system. Edelebosch (1992) states that Educational programmes are more likely to be
successful when there is significant community involvement and participation. The school
factors considered to be influencing learner achievements are facilities and equipment available
in the school, institutional climate and leadership behavior of the head, qualification, training and
morale of the teachers (Singhal, 1991). Secondary education is an important sub sector of the
entire education system. On the one hand, it provides middle level of work force for the economy
and on the other hand it acts as a feeder for the higher education. The quality of higher education,
which is expected to produce high quality professional in different fields of social, economic and
political life of country, depends upon the quality of secondary education. This level of education
therefore, needs to be organized in such a way that it should prepare young men and women for
the pursuit of higher education, as well as make them able to adjust with their practical lives
meaningfully and productively (Brown, 1998).Secondary education is an important stage in the
educational ladder. It has well defined objectives and a structure of its own. Its contribution is
two fold: (i) The overall development of the individual. (ii) The balanced development of a
region. It is to be seen whether the present system of secondary education is performing these
two functions. A number of types of regional disparities may exist in the performance of the
system. If so, it is imperative to explore the ways and means by which the regional disparities in
secondary education can be overcome and also to find out factors which facilitate or inhibit the
performance of secondary school system. Such discussions will provide light for future policies
in establishment and management of secondary schools. They will enable the planner to reduce
and obviate the sick and the chronically sick schools as well as strengthen the number of good
schools. Quality is the single most important issue in education, business and government today.
We all recognize that there are problems with today s education system. Students are leaving or
graduating from high school and college unprepared to meet the demands of society. This
problem has a ripple effect throughout society. Students who are not prepared to become
responsible productive citizens become a burden to society. These students, products of an
education system that does not focus on quality and increase, social welfare costs. They impact
criminal justice system, they are not prepared to meet the needs of the next generations, and most
important, they are citizens who feel alienated from the society. (Arcaro, 1987). Quality of
secondary education has a special significance for every one. In simple terms we have accorded
secondary education a status of its own and wish that more prestige be added to it than is the case
so for. Quality of secondary education depends the quality of higher education. There by the
quality of research and development of a nation is dependent directly on the quality of secondary
education. We are gradually learning that apportioning blame on any particular sector for its poor
quality heaps no one. Thus far higher education has blamed the + 2 stage for its misery and
which in turn have been quick to point the finger somewhere else. It is now clear that as bridge
the secondary stage needs both resources and attention. Being crucial in numerous ways no
nation can afford to ignore its legitimate claims. Quality of a system is largely dependent on the
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quality of its patrons. In other words a society or the constituents of the society define quality
and create conditions under which the quality can be developed and offered. No doubt suitable
curricula and teachers etc are only tools in the eventual attainment of that goal. Quality here is
related and valued in terms of the returns it brings to its possessor. And returns can be measured
in term of success, which comes as part of the bargain one undergoes for quality education. In
the long run institutions acquire a name for the distinct flavour of quality, which they offer. This
is one process through which quality comes to be defined either by an individual or an
institution. Better quality teachers or institutions are assumed to bring about quality education
(Abadzi, 1993).
Although basic minimum infrastructure and qualified teachers are inevitable to improve
the quality of secondary education, it cannot be said with certainty by making them available
(Satijia, 1998). The standards of education will improve only when these resources are managed
well. Improvement of curricula, textbooks and teachers are undoubtedly important inputs to the
package of quality improvement, yet the delivery system occupies a far more significant place to
make these inputs yield the desired results. In fact, unless the traditional management and
delivery system undergo a radical change to suit the needs of the fast expanding secondary
education, as also to meet the challenge of inadequacy of resources, there seems to be little hope
of raising the quality of secondary education. Good quality education depends on the availability
and effective use of (a) teaching methodologies designed to encourage independent thinking; (b)
capable, motivated, well-trained teachers; (c) appropriate, well-designed curriculum; (d)
effective learning materials including, but not limited to, textbooks; (e) a suitable, wellmaintained learning environment; and (f) a valid and reliable examination system and a well
stocked library as well (Govt. of Pakistan, 1959).
Keeping in view the above circumstances it was imperative to research upon quality of
education in Pakistan, especially to compare the management aspects of both the sectors public
and private secondary schools. The slogan of the day that quality was deteriorating and lowering
in our schools, it was need of the day to observe the head teachers management as part of
quality in schools of public and privately managed. Without improving quality of education, we
cannot keep pace with the modern era.
2.1
Statement of the Problem
The major purpose of the research was to compare the Quality of Education in Public and
Private Secondary Schools of NWFP
2.2
Objectives of the Study
The present study was conducted to compare the quality of education in public and
private schools of NWFP having following objectives:
i.
ii.
iii.
To investigate the number and qualification of teachers, the enrolment of students as well
as student-teacher ratio in both public and private schools.
To compare the administrative, academic, supervisory and support service aspects of
management by heads of public and private secondary schools.
To make recommendations for improvement of the quality of education in both types of
schools.
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2.3
Significance of the Study
Secondary education holds pivotal position in education system of every country, for it is
terminal stage for most of students and it also serves as a linkage stage between elementary stage
and higher education. It provides input for higher education and thus quality of higher education is
dependant upon secondary education.
This study will help us to know about the major problems faced by secondary teachers.
The most common problems at the secondary education levels are (a) Educational Problems (b)
Financial Problems (c) Home Adjustment (d) Vocational Adjustment (e) Health Adjustment and
(f) Personal and Social Problems.
2.4
Delimitations of the Study
NWFP is generally distributed in three different Zones, which are Zone I, Zone II, and
Zone III. The study was delimited to the following nine districts of NWFP:
i.
ii.
iii.
iv.
v.
vi.
vii.
viii.
ix.
x.
Kohat
Karak
Hangu
Peshawar
Swabi
Banuu
Lakki Marwat
Abbottabad
Manshera
.
3.
Research Design
3.1
Population
As the nature of study was descriptive type. As the population of the study was large, the
study was delimited to the secondary schools in public and private sector of the NWFP Province.
is generally distributed in three zones, which are different Zones, which are Zone I, Zone II and
Zone III.. Three districts from each zone were selected randomly.
The major purpose of the research was to compare the managemet aspects in public and
private schools.This section includes design and description of the population, sample, instruments
used to collect data, their construction, the method of data collection and analysis of data. As the
nature of study was descriptive type.
3.2
Sample
Random sampling technique was used and description of sample was as followed.
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3.2.1
Sample of Schools
Total two hundred and sixteen secondary schools in public and private sector (twentyfour secondary schools from each sample district) were randomly selected. The proportion of
public sector schools and private sector schools, boys and girls schools was fifty- fifty.
3.2.2
Sample of Heads
All the heads of already sampled 216 secondary schools of public and private sector (the
proportion of public sector schools and private sector schools, boys and girls schools was equal)
included in sample.
Sample of Heads
Total Number of Heads = 216
Public
Male
Female
Kohat
6
6
Karak
6
6
Hangu
6
6
Peshawar
6
6
Swabi
6
6
Banuu
6
6
Lakki Marwat
6
6
Abbottabad
6
6
Manshera
6
6
Total
54
54
Male
6
6
6
6
6
6
6
6
6
54
Private
Female
6
6
6
6
6
6
6
6
6
54
Total
24
24
24
24
24
24
24
24
24
216
3.3
RESEARCH INSTRUMENTS
The researcher prepared three questionnaires using five-point scale after going through
the related literature, consisting of books, journals, articles, reports, magazines with the help of
honorable supervisor and members of supervisory committee. Their suggestions were
incorporated in the questionnaires.
i.
Questionnaire for Heads of Secondary Schools.
ii. Questionnaire for Teachers of Secondary Schools.
iii. Questionnaire for Students of Secondary Schools.
3.3.1
PILOT TESTING
For the pilot testing, four secondary schools were taken from district Kohat. It was
further divided into two male and two female equally. The researcher personally visited and
administered relevant questionnaires among four heads. They were requested to give their
suggestions freely for the improvement of the questionnaires. They were also requested to
amend the questions, if necessary in format and the language to make the questions simple and
understandable. Accordingly questionnaires were revised and prepared by incorporating their
suggestions and proposals. Then the final version of questionnaires was developed.
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3.4
Data Collection
The investigator started data collection process w.e.f 17th of October, 2009 by visiting
each sampled school and administering the questionnaire in person. It took about three months to
collect data from the selected sample. The response rate was 100 percent.
3.5
Data Analysis
Data collected through above-mentioned instruments were tabulated, analyzed and
interpreted category-wise as principals. To analyze the data, chi-square as a contingency test and
percentage were used.
For statistical treatment chi-square as a contingency test was applied using the following
formula:
Oi
=
Frequency observed or experimental determined
Ei
=
Frequency expected
df
=
Degree of freedom
P
=
Probability of exceeding the tabulated value of 2 = Oi - Ei
=
(Oi - Ei ) 2
=
(Oi - Ei) 2
Ei
(Garrett, 1997)
Chi-square as contingency test was used to compare the frequencies of

principals/teachers, teachers/students and principals/students. On the basis of the analysis and
interpretation of data, conclusions were drawn and recommendations were made.
4.
RESULTS
This section deals with the analysis and interpretation of data. The data collected through
research instruments were tabulated, analyzed, and interpreted in the light of the objectives of the
study by using chi-square.
Table 1 (a): Qualification of Administrators and Teachers
Qualification
Ph.D
Heads
Public
Private
Public
Teachers
Private
02
0
03
0
M.Phil
04
0
10
02
Academic
M.A/
B.A/
M.Sc
B Sc
82
20
41
49
22
63
22
58
Professional
Other
s
0
18
10
26
M.Ed
B.Ed
C.T
20
04
24
22
88
55
52
44
0
31
12
16
Others
0
18
20
26
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Table 1 (b): Enrollment of students in secondary classes and teacher student

ratio
Sector
Average
Average
TeacherNature of Building
Enrollment teachers
student
Own
Govt.
Rented
ratio
Public
158
26
1:70
0
98
10
Private
77
3
1:28
45
0
63
The above tables indicate the demographic position of public and privately managed
schools. The academic and professional qualifications of both heads and teachers of public sector
schools are higher than those of private sector schools. The average enrollment per sampled
school of public sector was 158 whereas the average enrollment per sampled school of private
sector was 77. Average teacher student ratio in public schools was 1:70 whereas in private
schools it was 1:28.
Table 2: Administrative Aspects
Indicators
School
Involve staff in decision
making.
like to be a part of team
Task being carried out
in the institution are
well-organized.
The recruitment
procedure is
standardized
There is coordination
among the
administrative staff
Teachers have
command over subject
matter
*Significant
Public
Private
Public
Private
Public
Private
Public
Private
Public
Private
Public
Private
SA
35
20
25
52
27
A
22
27
32
32
33
Reponses
UD
DA
4
29
5
20
2
32
4
12
5
31
SDA
18
36
17
8
12
36
50
25
32
2
4
20
14
25
8
26
27
34
31
2
2
30
33
16
15
49
52
29
24
3
2
17
18
10
12
32
12.4*
22.5*
10.6*
16.8*
28
df = 4
12.8*
12.6*
26
21
2
at 0.05 level = 9.488
Table 2 indicates that the 2 values for all six administrative aspects of public and private
schools head are greater than the critical value at 0.05 level. Involvement of staff in decision
making differed significantly in favour of public schools heads in the category of strongly agree.
Head likes to be a part of team with leading teachers differed significantly in favour of private
schools heads in the category of strongly agree. The aspect of well organization of tasks was
found differed significantly in favour of private schools heads in the category of strongly
disagree. The fair selection procedure for recruitment of teachers differed significantly in favour
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of public schools. The coordination among the administrative staff differed significantly in
favour of private schools heads in the category of strongly agree. Whereas, the teachers having
command over subject matter differed significantly in favour of public schools heads in the
category of strongly agree.
Table 3: Academic Aspects
Indicators
School
SA
Job security for teachers

is ensured
Lesson planning is done
by teachers regularly.
Attention is given to the
character building of
students.
Teachers are well
prepared before taking
the class.
The students compete
well with the students.
School environment is
suitable for teaching.
*Significant
Public
Private
Public
Private
Public
Private
Public
Private
Public
Private
Public
Reponses
A
UD
DA
SDA
52
24
30
32
2
2
16
34
8
16
19.5*
52
29
27
30
1
3
18
26
10
20
12.5*
45
18
22
20
6.6
38
30
32
32
1
1
23
29
14
16
48
34
15
10
28
38
26
34
1
2
32
22
21
12
36
38
2
1
14
21
10
27
46
21
Private
df = 4
10.1*
7.2
18.9*
at 0.05 level = 9.488
Table 3 exhibits that the obtained 2 value is greater than the critical value at 0.05 level as
the frequency of responses of public and private schools heads about four aspects. Ensuring job
security for teachers differed significantly in favour of public schools heads in the category of
strongly agrees. Teachers having command over teaching methodology differed significantly in
favour of public schools heads in the category of strongly agree. Giving attention to the
character building of students does not differ significantly. School providing quality education
differed significantly in favour of private schools heads in the category of strongly agrees.
Students competing well with other students do not differ significantly. Keeping school s
environment suitable for teaching differed significantly in favour of public schools heads in the
category of strongly agree.
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Table 4: Supervisory Aspects

Indicators
Timings ore observed
properly
Sports and games are
arranged
Subjects and contents
being taught are relevant
to needs to society.
The student assessment
procedure is fair
Students are admitted
according to merits
Student teacher ratio is
adequate.
School
Public
Private
Public
Private
Public
Private
Public
Private
Public
Private
Public
Private
*Significant
SA
22
42
67
24
46
37
A
26
27
38
18
35
34
22
36
42
26
18
33
df = 4
Reponses
UD
DA
3
30
2
23
2
1
3
35
1
18
2
25
18
16
28
24
20
24
2
3
4
1
2
3
26
32
22
30
30
32
2
SDA
27
14
0
28
8
10
40
21
12
27
38
16
11.5*
17.8*
2.7
10.2*
12.9*
14.0*
at 0.05 level = 9.488
Table 4 exhibits that the obtained 2 value is greater than the critical value at 0.05 level
for the frequency of responses of public and private schools heads about five aspects.
Observing timings properly differed significantly in favour of private schools heads in the
category of strongly agree. Arranging sports and games differed significantly in favour of public
schools heads in the category of strongly agree. Relevance of subjects and content being taught
to the present and future needs to society does not differ significantly. Adoptions of fair
assessment procedure differed significantly in favour of public schools heads in the category of
strongly disagree. Students admission according to merits differed significantly in favour of
public schools heads in the category of strongly agree. Adequate student teacher ratio differed
significantly in favour of private schools heads in the category of strongly disagree.
Table 5: Support Services Aspects
Indicators
School
SA
Science laboratories are

well equipped
Needed A.V. aids are
available.
Sufficient furniture in
available in rooms.
Public
Private
Public
Private
Public
Private
Reponses
A
UD
DA
SDA
40
20
16
14
5
4
25
32
22
38
12.0*
36
13
20
17
3
2
26
30
23
46
19.2*
42
26
26
24
2
1
25
26
13
31
11.6*
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The school has separate

staffroom for teachers.
Drinking water facility
is available.
Building facility is
adequate
*Significant
Public
Private
Public
Private
Public
48
30
26
20
2
2
19
31
13
25
30
38
32
30
1
2
26
22
19
16
1.9
28
20
2
2
24
37
10
33
29.5*
44
16
Private
df = 4
11.6*
at 0.05 level = 9.488
Table 5 shows that the obtained 2 value is greater than the critical value at 0.05 level for
the frequency of responses of public and private schools heads about five aspects. Science
laboratories being well equipped differed significantly in favour of public schools heads in the
category of strongly agree. Needed A.V. aids are available differed significantly in favour of
public schools heads in the category of strongly agree. Availability of sufficient furniture in
rooms differed significantly in favour of public schools heads in the category of strongly agree.
The school having separate staffroom for teachers differed significantly in favour of public
schools heads in the category of strongly agree. Availability of drinking water facility does not
differ significantly. Adequate building facility differed significantly in favour of public schools
heads in the category of strongly agree.
5.
Discussion
Pakistan needs to develop a good strategy of human development in which good quality
education, adaptation and skill acquisition are given the primary importance (Shah, 2007).
Secondary education is the anchor bay of education. It holds pivotal position in entire education
system. It provides middle level work force for the economy and on the other hand it acts as an
input for higher education. This study manifested that public sector secondary schools were
better than that of private sector secondary schools regarding infrastructure. Quality of
management has a central role in secondary education. It has remained neglected for long and it
is time that it now receives special attention. But obviously, it would necessitate a new look at
some of the basic issues relating to policy, planning and management of secondary education,
especially in the third world countries. In western countries private sector schools are much
better than public schools (Singhal, 1991). This study contrasted with the above mentioned
results of the study conducted by Singhal (1991) as in our country heads of public sector
secondary schools were highly qualified academically as well as professionally having more
experience as compared to heads of private sector secondary schools.
The situation in Pakistan's secondary schools falls short in most aspects. Teaching is
almost entirely in the lecture/recitation mode. Teachers are often poorly motivated and have few
opportunities to keep themselves up-to-date in content or methodology; curriculum is outdated
and poorly disseminated; textbooks do not match curriculum objectives, are badly organized, are
of low production quality; learning materials, except for textbooks, are scare; and examinations
are technically flawed and their credibility is undermined by widespread cheating and other
malpractices. Only motivated trained teachers can make the teaching learning process effective
and meaningful. Proper training can motivate the teachers and enhance their performance
(Hussain, 2003). Proper physical facilities are necessary for creating conducive environment for
teaching learning process. The study showed that position of public sector schools was better
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than that of private sector secondary schools regarding physical facilities. A study has identified
school and family background factors affecting learner achievement. The school factors
considered to be influencing learner achievements are facilities and equipment available in the
school, institutional climate and leadership behavior of the head, qualification, training and
morale of the teachers (Singhal, 1991).
Khaliq (2000) proposed that library services, laboratory services, provision of
instructional and furniture, curricula activities, quality of results of inter classes, providing
complete teaching staff, co-operation from community, teacher s commitment towards
professional obligations, provision of funds, grants and proper physical facilities, supervisory
system, motivational and professional training of teaching staff as helpful administrative for
quality education. Present study also confirms the same aspects at secondary level. If the heads
of institutions should be able to tackle all these problems in their intuitions, they can impart
quality education at higher secondary level. In a report on the examination system Deakin (1974)
found the public examination system of Pakistan in a state of near anarchy. Private managed
schools have some limitations also, the shortage of physical facilities lies in such limitations but
along with all such, their proper management produces good results. The both sector must utilize
the dominant aspects in their own circumstances.
6.
Conclusion
On the basis of interpretation and finding of data following conclusion were drawn
The demographic data of study revealed that private sector schools had actually less number
of students and teachers at secondary level as compared to public sector schools. The results
of 10th class students in boards examinations of private schools were better than
government schools. With respect to ownership of building almost 98% public sector schools
had their own buildings while majority of private schools were running in rented buildings.
In public schools, student teacher ratio was higher than private schools.
The quality of education is the most burning issue of the day. Administration is considered to
be the most important ingredient of any organization, for it serves as the asset for the most
previous assets of the nations which are educational institutions. The entire study revealed
that heads of private sector secondary schools were better than heads of public sector
secondary schools regarding involvement of other staff in decision making, keeping
themselves as a part of team while leading them and carrying out the tasks in a wellorganized fashion. But the heads of public sector secondary schools were more qualified
academically as well as professionally having more administrative experience as compared to
private sector secondary schools heads.
It is no more rhetoric but a time tested reality that destiny of the nations is shaped in
classrooms. It means that teachers are the central figure in education system of any country.
The present research found that teachers of public secondary schools were more qualified
academically as well as professionally having command over teaching methodology as
compared to the teachers of private secondary schools.
Head teachers management aspects were found better in privately managed schools for the
aspects of becoming a part of team well arranged tasks, and coordination among
administrative staff. Whereas the aspects of involving staff in decision making, keeping
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selection procedure fair, and observing teachers command over subject matter were found
dominant in public sector schools.
The quality of education is intrinsically integrated and directly proportional to the quality of
infrastructure. The physical facilities hold paramount position in educational institutions. It
was found that position of physical facilities was better in public secondary schools than in
private secondary schools with respect to buildings, libraries, play grounds, furniture while
position of private sector secondary schools was better in availability of computer labs and
gas facilities.
The quality of education also owes a lot to the quality of supervision. It was found head
teachers of private schools were better for having observing timing, and maintaining teacher
student ratio. Whereas arranging sports and game, keeping fair assessment procedure and
merit based admission were found dominant at public sector schools management.
7.
Recommendations
On the basis of analysis of data, findings and conclusions the following recommendations
are offered.
The enrollment of students was higher in public sector than private sector. It is therefore
recommended to establish more schools in the public sector. School mapping kept in mind
before establishing new schools. The heads and teachers of schools should take such necessary
actions which may help to raise academic standard of these schools. The heads of public schools
should take serious consideration of the problem of their low pass percentage. Teachers of public
schools may be made accountable for their poor result in examinations. They must also be
rewarded with incentives for showing good results. Teachers of both systems should be given
opportunities for regular in-service training in order to improve their teaching methodology.
Libraries of public and private schools should be kept well maintained and all necessary books
be available and students and teachers should be encouraged to get benefit from their library. All
necessary educational facilities such as well maintained buildings; science laboratories with
standardized apparatus and needed audio visual aids be provided and maintained by school
management. Teachers should be encouraged to make use of A.V. aids more and more to make
teaching process more effective. The school curriculum should be updated according to the
emerging needs of the society and it should be revised regularly. The study indicates that due
consideration was not given to merit in student admission procedure. Merit should be the sole
consideration for entry to private institutions. Access to higher education, is recommended to
base on entry tests that measure the aptitude and ability of suitable candidates for higher
learning. The services of National Testing Service are utilized for construction of valid and
reliable tests at secondary level.
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References
Baloch, F. M. and S. A. Khalid. 1990. Secondary Education in Balochistan. Provincial Education
Council, Quetta, Pakistan.
Deakin, J. 1974. A Report on Public Examinations in Pakistan. Ministry of Education,
Islamabad, Pakistan.
Edelenbosch, J. 1992. Community Involvement in Educational Process. McGraw Hill Book
Company New York, USA.
Farooq, R.A. 1993. Education System in Pakistan. Asia Society for Promotion of Innovation and
Reform in Education, Islamabad.
Govt. of Pakistan. 1959. Report of the Commission on National Education. Karachi. pp. 144145.
Govt. of Pakistan. 1979. National Education Policy. Ministry of Education Islamabad. P-32.
Govt. of Pakistan. 2000. Economic Survey of Pakistan 1999-2000. Economic Advisor s Wing,
Finance Division, Islamabad. P. 117, 139.
Hussain, S. 2003. Provisions for Education in Five Year Plans Iqbal Open University Printing
Press, Islamabad, Pakistan. pp. 103-148.
Iqbal, M. 1987. Review of Educational Policies. Punjab Education Extension Center. Lahore. P.
22, 30.
Khaliq, H.A. 2000. A Study of the Administrative Problems of Boys Higher Secondary Schools
in Pakistan. Ph.D. Unpublished Thesis IER. University of Punjab, Lahore.
Louis, D. H. 1987. The Crises of Education in Pakistan. Royal Book Company Karachi,
Pakistan.
Maqsoodah, A. 1998. Role of Private sector in Expansion of Primary Education in Rawalpindi
City. Department of Educational Planning and Management, Allama Iqbal Open
University, Islamabad:. Unpublished M.A. Thesis.
Satijia, B. R. 1998. Value Education Trends in Education. Anmol Publication, Pvt. Ltd. New
Delhi, India.
Shah, R. (2007) Impact of Higher Education on Earnings of Women in the Public Sector
Educational Institutions in Pakistan. International Business & Economics Research
Journal. 6(11)121-122
Singhal, R. P. 1991. Education and Training in Sri Lanka. Asian Development Bank and Edcil.
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EFFECTIVENESS OF THE USE OF MOTIVATIONAL TECHNIQUES

ON THE EDUCATIONAL ACHIEVEMENT OF THE TEACHER S
AT HIGHER EDUCATION INSTITUTIONS IN PAKISTAN S
Listed in ULRICH S

Dr Sajjad Hayat Akhtar
Head Master in Provincial Education Department
Mardan Khyber Pakhtunkhwa Pakistan
Dr. Ali Murtaza
Abstract
The study explored into a descriptive research to evaluate the effectiveness of the use of
motivational techniques on the Educational achievement of the teacher at higher education level
in Pakistan s. Motivation is usually defined as an internal state that arouses, directs and
maintains behavior a certain period of time. However, it is the process of arousing, sustaining
and regulating activities, to be precise a concept limited to some aspects such as the energetic
behavior or purposive regulation. Main objectives of the study were to investigate the
motivational techniques used by the heads of institutions, examine the views of teachers about
the effective and ineffective motivational techniques, and identify the students' opinions about
the performance of the teachers and to find out the impact of motivational techniques. On the
basis of analysis it was concluded that majority of heads used constructive as well as optimistic,
appreciate intentionally, reward, constructive criticism, incentive, expressing expectations,
promotion, recognition, status, personal loyalty and shown interest as motivation techniques and
they did not provide job security.
Keywords: Motivational techniques, Effective and Ineffective Motivational techniques,
Students opinions, performance of the teachers and impact of motivational techniques.
1.
Introduction
Motivation of teachers has been a prime concern of school and college administrators. Every
educator needs to be concerned about motivation. It is a quality that students, teachers, parents,
school and college administrator, and other members of the community must have if our
educational system is to prepare young people adequately for the challenges and demands of the
coming century. Of course, the way these various groups of individuals generate and use
motivation differs greatly. Students need motivation to learn, parents need it to track the
educational progress of their sons and daughters, teachers need it to become better teachers, and
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school, college and university administrators need it to ensure that every facet of the schools,
college and university they manage continues to improve.
Motivation is an important tool that is often under-utilized by heads of institutions in
today workplace. Heads use motivation techniques in the workplace to inspire teachers to work,
both individually and in groups, to produce the best results for education in the most efficient
and effective manner. It was assumed that motivation had to be generated from the outside, but it
is now understood that each individual has his own set of motivating forces. It is the duty of the
heads of institutions to carefully identify and address these motivating forces.
Motivation is the desire or drive within a person to achieve some goal. Within is the
operative word here, for motivation is an internal condition based on a person s perceptions and
needs (Ricks et al; 1995). The term motivation derives from the Latin word movers, to move .
It is virtually impossible to determine a person s motivation until that person behaviour or action
an individual performs at each moment in time, the initiation and persistence of an intentional,
goal - directed activity (Mifflin, 1995).
Human resources are the most important and usually the most expensive asset that any
organization can possess. In higher educational institutions it is largely the work of the teacher
that determines the degree of success or failure in the institution's efforts to achieve its goal of
integrating faith and learning. It is the teacher who gives the institution its credibility and
determines its character. Most college students are, whether aware of it or not, endeavoring to
develop their own worldview and the teacher is very often the major role model in this process.
A motivated and committed college teacher has the opportunity to influence significantly the
student in building a worldview that rests on a faith commitment. The researcher used the word
faith as philosophy of life and integration of learning with philosophy of life is necessary and
duty of the teacher is to create harmony between new learning and faith of the students. The
students mainly believe in their peculiar values of the society of the teacher influences the
students through their faith, values and attitudes, the impact will be significant. How this is an
individual thought of the researcher.
2.
Literature Review
Motivation is defined as the biological, emotional, cognitive or social forces that activate
and direct behavior. Motivation is the art of getting people to do things or to do things more
efficiently or quickly. The vast majority of studies on motivation have looked at persons working
in educational institutions, businesses, industries or military organizations where there are formal
supervisor/worker relationships and where performance can be stimulated to a large extent by
rewards such as promotions or wages and benefits. Motivation is a very important factor in
learning, creativity, responsibility, healthy behaviour and last change. Motivation is one of the
most important components of learning. It holds a pivotal role in the teaching and learning
process. (Chand,1990).
Motivation is an internal state or condition (sometimes described as a need, desire or
want) that serves to activate or energize behavior and give it direction to internal state or
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condition that activates behavior desire or want that energizes and directs goal-oriented behavior
influence of needs and desires on the intensity and direction of behavior (Kleinginna and
Kleinginna, 1981).Motivation refers to a state that directs the behaviour of the individual towards
certain goals. Motivation has been defined as: the psychological process that gives behavior
purpose and direction (Kreitner, 1995).
Motivational psychology is about latent psychological processes that are assumed to
explain particular behavioral characteristics. The basic motivational question is to explain at least
in part which behavior or action an individual performs at each moment in time, the initiation
and persistence of an intentional, goal-directed activity. Motivation also partly explains the
degree of effort that is spent while performing an activity and the satisfaction that is derived from
an activity and/or its outcome(s). Motivation is a process that starts with a physiological or
psychological deficiency or need that is a mind at a goal or incentive. Thus, the key to
understanding the process of motivation lies in the meaning of and relationship between needs,
drives and incentives (Luthans, 1995).
Arif (2003) states: Motivation is an extremely complex concept and motivating students
is critical task of teaching. Both environmental and personal factors influence motivation to
learn. Needs, goals, beliefs, attributions, expectations, reward and incentives all affect
motivation. How to put all this knowledge into creating a classroom environment that encourages
motivation? Teacher is the chief agent in creating this environment whose motivation itself is the
key factor to inspire demotivate and uninterested students.
Motivation, in the most general sense of the term, is an attempt to explain why behavior
occurs (e.g., why people do what they do). Many educators believe motivation is a pre-requisite
for learning. Behaviorists, though, view it as a collateral product of learning because it is, itself,
learned (Richard, 1972).The term 'motive' refers to goal directed behaviour and energizing
conditions within the organism that drives behaviour. It is generally used to refer to certain
conditions within the individual which besides arousing, actually predisposes him to respond or
behave in a way appropriate to the satisfaction offends. Motives direct the activity of the
individual towards his goals. A motive represents the individual s reason for choosing one
certain behaviour from among several choices. There are five basic characteristics commonly
associated with motivation. The first aspect of motivation refers to the amount of effort being
applied to the job. This effort must be defined in relation to its appropriateness to the objectives
being pursued. The second characteristic, persistence, is demonstrated by continued efforts of the
determination to achieve a particular goal, often in the face of obstacles, such as being a poor
college student, possibly having to work, have a family etc. The third characteristic, activation, is
demonstrated by the initiation or production of behavior, such as one s decision to go to college.
The fourth characteristic, intensity, is the great vigor of responding that usually accompanies
motivated behavior, such as studying to make good grades. The last characteristic, direction, is
therefore measured in terms of how persistent effort is applied in relation to the goals being
pursued (Pinder, 1998). Motivation is an important factor in the learning process. Motivation
implies the arousal and maintenance of interest in learning. Interest is a basic factor in learning.
No learning can take place without the interest of the learner. This means that motivation plays a
vital role in learning. In fact no real learning can take place without motivation. Motivation
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brings the learner to the proper frame of mind for learning. It concentrates the attention and
energy of a person on the activity or knowledge to be learnt (Bhatia, 1997).
One of the head s primary tasks is to motivate people in the organization to perform at
high levels. This mean getting them to work hard, come to work regularly and make positive
contributions to the organization s mission. But job performance depends on ability and
environment as well as on motivation. It is an important tool that is often under-utilized by heads
of institutions in educational institutions. Heads use motivation techniques in the workplace to
inspire teachers to work, both individually and in groups, to produce the best results for
education in the most efficient and effective manner. It was assumed that motivation had to be
generated from the outside, but it is now understood that each individual has his own set of
motivating forces. It is the duty of the heads of institutions to carefully identify and address these
motivating forces (Moorhead and Griffin, 1995). Managers need to provide the right
organizational climate to ensure that their employees can see that by working towards the
organizational goals they are also achieving some of their own goals. These goals could be such
things as financial rewards or personal rewards such as the respect of their colleagues or job
satisfaction or combination of any number of things that the employee considers to be important
(Pepitone and Bruce, 1999).
2.1
Objectives
The study was based on the following objectives:
i.
ii.
3.
To examine the views of teachers about the effective and ineffective motivational
techniques used by their heads.
To identify the students' opinions about the performance of the teachers.
Methodology
Survey and questionnaires were the main means of data collection. Three different self
assessment questionnaires were administered on sampled principals, teachers and students at
degree colleges of public sector in Pakistan.
Data collected through questionnaires were
tabulated, analyzed and interpreted category-wise, compare responses of three groups
(Principals/teachers, teachers/students and principals/students) and compare responses of male
and female principals, teachers and students. To analyze the data, chi-square as a contingency
test and percentage were used.
Table 1
Questionnaire for Principals
Principals
1
2
3
4
5
Statements
The principal is always constructive and optimistic.
The principal motivates teachers to be more innovative.
The principal appreciates his teachers work openly.
The principal is stiff in his dealings.
The principal provides personal loyalty to the teachers.
SA
UD
SD
10
30
2
20
10
19
45
10
32
19
5
2
6
3
5
36
13
44
28
36
30
10
38
17
30
2
277.3
32.7
232.4
125.5
277.3
433
6
7
8
9
10
11
12
13
14
15
16
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The principal expects better performance from his teachers.

The principal guides and appreciates the teachers to develop
sense of humour.
The principal awards teachers with impressive titles.
The principal chides the teachers on their mistakes.
The principal is punctual.
The principal acknowledges the teachers achievements.
The principal cares his teachers egos.
The principal is sympathetic to his teachers.
The principal encourages hard working teachers.
The principal gives his teachers an appropriate workload.
The principal creates a professional competition among
teachers.
The principal acts like role model for teachers.
Table:2
Teachers
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
45
13
10
5.5
45
25
15
10
62.3
30
19
30
25
43
35
30
39
48
47
35
43
26
47
38
28
6
5
6
2
5
4
7
3
6
15
15
15
20
5
17
25
10
14
14
15
6
9
8
5
28.4
50.6
43.9
11.2
32.6
37.6
12.7
51.7
24
43
20
193.8
28
44
15
25.2
SA
UD
SD
26
53
11
148.2
30
49
136.0
18
50
16
10
285.3
10
24
54
49.1
46
37
46.4
31
48
12
98.9
22
51
13
10
144.0
46
28
14
10
54.8
43
45
30
39
3
2
16
8
8
6
1053
1428
35
41
11
33.4
28
43
14
11
70.8
51
26
11
96.8
32
43
10
90.4
37
43
63.6
48
28
12
1177.
6
28
52
10
171.0
Questionnaire for Teachers

Statements
30
Constructive and optimistic attitude of the principal enhances

the performance of the teachers.
Encouragement for creativity and innovation by the principal
leads the teacher to better performance.
Appreciations on genuine efforts motivates teacher to do even
better.
Stiff dealing of principal enhances the performance of teacher.
Personal loyalty of principal enhances the performance of
teacher.
Expressions of expectations of the principal enhance the
performance of the teacher.
Guidance and appreciation to develop sense of humour enhance
the performance of teacher.
Award with impressive titles ensures the better perfomance of
the teacher.
Chiding on mistake affects the performance of the teacher.
Punctuality of the principal makes the teacher punctual.
Acknowledgement on achievment enhances the performance of
the teacher.
Careness of self-respect of the teachers by the principal
enhances the performance.
Sympathetic behaviour of the principal causes the better
performance.
Encouragement on hardworking motivates the teacher.
Assignment of appropriate workload by the principal increases
the performance of the teachers.
Professional competition leads the teacher to better
performance.
A good action as a role model of the principal augments the
teachers performance.
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Table: 3
Questionnaire for Students
Students
Statements
Your teacher is always constructive and optimistic.
Your teacher motivates students to be more innovative.
Your teacher appreciates the students performance openly.
Your teacher is stiff in his dealings.
Your teacher inspires creativity among students.
Your teacher expects positive behaviour from the students.
Your teacher uses sanction and praise techniques for motivation.
Your teacher appreciates his students on their academic
achievement.
Your teacher chides the students on their mistakes.
Your teacher is punctual.
Your teacher establishes a good relationship with students.
Your teacher maintains students attention and interest during
the class.
Your teacher is sympathetic to his students.
Your teacher encourages hard working students.
Your teacher allows the use of instructional technology.
Your teacher creates competitive environment among students.
Your teacher tries to be a role model for students.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
4.
SA
UD
SD
36
35
41
8
40
45
36
42
38
32
9
33
32
39
1
2
2
2
4
3
2
13
21
21
36
13
13
8
8
4
4
45
10
7
15
61.9
108.1
536.9
185.2
195.6
22.3
49.4
34
41
14
10
4.2
10
8
36
11
16
37
2
1
3
34
45
9
43
30
15
274.1
187.4
13.2
40
35
15
19.0
35
34
33
10
41
32
37
37
14
32
3
2
3
2
2
20
15
16
33
16
10
12
11
41
9
35.1
29.7
21.1
46.4
39.7
Overall Comments
In looking at the responses of tables, it has to be noted that principals are constructive as
well as optimistic. Principals are most sure that they are achieving what they have to achieve
while teachers are more aware of the motivating effects due to this they are more innovative than
they are. One word of appreciation by the heads intentionally or unintentionally makes them both
(teachers and students) very happy. Majority of the principal s intentions reveal that they are
very stiff in their dealings.
In general most teachers and students agree that their principals provide personal loyalty
to them. It is clear that from the item number 6 that all respondents show those expressions of
principal s expectation about teacher performance make motivate them. It is note worthy that
some principals appreciate the teachers to develop senses of humors, award with impressive titles
and chide them on their mistakes for better performance.
5.
Conclusions
i.
ii.
iii.
Following conclusions were drawn in the light of finding of the study.

Majority of the principals hold that they are constructive as well as optimistic, appreciate
intentionally and a good deal of principals are very stiff in their dealings.
Majority of teachers and students agree that their principals provide personal loyalty to
them. They also agree that expression of principals expectations make them to motivate.
Some principals appreciate the teacher to develop sense of humor, award with impressive
titles and chide them on their mistake for better performance.
Majority of principals agree that they are punctual, sympathetic and role model for
teachers. They also care teacher s ego, establish good relationship with them and assign
them appropriate workload according to their choice and interest.
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iv.
v.
vi.
vii.
6.
Majority of principals believe in fair play in all academic matter, give regular payment of
salary, give appropriate relief time to the teachers, handle fairly all financial matters,
apply leave rules fairly, criticize the teachers in constructive way and encourage hard
worker teachers.
Majority of principals are found ambitious, therefore, they develop habits of self-study
among teachers, provide them ambience environment, give them verbal or non verbal
recognition, allow them to enjoy fringe benefits, assist and lead to achieve targets and
also provide them ample chance of professional growth.
It is found that some principals are very strict, conscious and responsible about their
duties; they recommend timely promotion of their teachers, submit medical bills of their
staff quickly, consult their teachers in academic matters and also give feedback to the
teachers on their academic performance.
A large number of principals agree that they trust in their teachers, delegate responsibility
and authority to their teachers and allow them freedom of action.
Recommendations
On the basis of conclusions, following recommendations are made.
i.
ii.
iii.
iv.
v.
The study results reveal that a good deal of principal believes in favouritism and they
behave discriminately. It is recommended that principals should believe in justice and fair
play. They behave indiscriminately in assigning the examination duties and financial
benefits. It may be possible by appointing honest, fair and neutral principals in the
institutions.
The study results show that some principals give feedback to their teachers on their
academic matter where as female principals give less feedback than male principals. It is
therefore, recommended that they majority of the principals should give regular feedback
on academic matters especially female principals should take more care in this respect. It
may be possible by developing a regular system of evaluation.
The study results reveal that majority of the principals do not consult their teachers in
academic matter which cause distrust and frustration. It is recommended that principals
may ensure the participation of teachers in decision-making about academic matter.
Regular meetings may be held for discussion on academic matters so that academic
matters may properly be planned.
The study results reveal that there is shortage of latest instructional technology due to
lack of funds, especially in female institutions. It is recommended that principals be
ensured to provide instructional technology i.e. television, video cassettes, tele text,
computer technology, projector and transparencies and other modern gadgets in the
classroom and govt. may allocate special funds for this purpose.
The study results reveal that principals chide the teachers on their mistakes whereas male
teachers are more chided than female by their principals. It is therefore, recommended
that principals may be ensure in guiding, assisting and leading instead of chiding. It may
be possible only when male principals will change their authoritarian nature into
brotherhood.
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vi.
vii.
viii.
ix.
x.
xi.
The study results show that majority of the principals are very stiff in their dealing. It is
recommended that principals should be tolerating, polite and kind hearted. Principals may
achieve such attitude by acting upon of tolerance of Holy Prophet (Peace be upon him).
The study results reveal that majority of the principals do not provide job security and the
apprehend teachers for transfer. It is therefore, recommended that principals may avoid
creating unfavourable situation and they should not apprehend their teachers to transfer.
Government may provide job security through changing rules and regulation about
transfer of teachers.
The study results show that appreciation on genuine efforts and positive behaviour fairly
enhances the performance of female teachers. It is recommended that male principals
should appreciate on genuine efforts and should show positive behaviour.
The study results reveal that male teachers are stiffer than female teachers. It is
recommended that male principals should be polite, sympathetic and kind hearted like
female teachers.
The study results show that male teachers maintain students' attention, interest and
encourage the students to using library fairly more than female teachers. It is therefore,
recommended that female teachers should also use library and encourage their student to
use library so that they may maintain the attention and interest of the student.
It was found that motivated teachers fulfill their responsibilities by exerting maximally.
Therefore, it is recommended that motivation techniques may be included in detail in
training course of teachers and a special training course may be arranged for educational
managers, administrators and supervisors for achieving their competency to use
motivation techniques appropriately.
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References
Arif, M .H. 2003. Human Development and Learning. Majeed Book Depot, Lahore, Pakistan.
pp.163-180.
Bhatia, K.K. 1997. Educational Psychology and Techniques of Teaching. Kalyani Publishers,
New Delhi, India. pp. 123-125.
Bloom, B.S. 1996. Human Characteristics and School Learning. Plains: White
Chand, T. 1990. Principles of Teaching. Anmol Publications, New Delhi, India. P 94.
Griffin,R.W. 1994. Management. Houghton Mifflin Company Boston, Massachhusetts.
USA.P.138.
Johns, G. 1996. Theories of Work Motivation. Leadership Organizational Behaviour: Harper
Collins College Publishers, New York USA.pp.72-88.
Kleinginna, P. Jr. and A. Kleinginna. 1981. Motivation and Emotion. Prentice Hall, New
Jersey, USA. P. 263.
Kreitner, R.1995. Management. 6th ed. Houghton Mifflin Company, New York, USA. pp. 466507.
Longman Inc. New York, USA.P.178, 194.
Luthans, F. 1995. Organizational Behaviour. 7th ed. McGraw-Hill, Inc. New York, USA. pp.
141-165.
Mifflin, 1995. Management and Organization. South-Western Publishing Co, New York, USA.
P.122, 167.
Moorhead.G and R.W.Griffin. 1995. Organizational Behaviour. Houghton Mifflin Co, Boston,
USA. pp.65-89,
Pepitone, J. and A. Bruce. 1999. Motivating Employees. McGraw Hill Inc. New York, USA.
P.262.
Pinder, C. C. 1998. Work motivation in organizational behavior. Upper Saddle River, NJ:
Prentice Hall. New Jersey, USA.P.136.
Richard, W. M. 1972. Contingency Management in Education. John Wiley and Sons, New York,
USA.P.109.
Ricks, B.R., M.L.Glinn and A.S.Daughtrey. 1995. Contemporary supervision, Managing People
and technology, McGraw- Hill, Inc. New York, USA. P.169,182,
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EFFECTS OF AUDIO VISUAL AIDS IN STUDENTS

LEARNING AT SECONDARY LEVELS
IN DISTRICT RAWALPINDI
Listed in ULRICH S
Dr. Ali Murtaza

Kohat - Pakistan
Mr. Faridullah Khan

Kohat - Pakistan
Abstract
The Research was conducted to find out the Effects of Audio Visual Aids on Students
Learning at Secondary Level . This study provides basic and comprehensive information to
assist you in developing effective communication among teachers and students. The use of audio
visual aids can create a lot of interest and make teaching- learning process more effective when
these are coupled with good public speaking skills. The study puts emphasis to use audio visual
aids frequently while teaching the students. No doubt, speaking style and stage presence of
teachers are personal talents but these can be refined with much practice and experience and by
using the audio visual aids quite often while teaching. In this study much emphasis is given to
visual aids which are essential to all successful presentations. The objectives of the study were to
determine the effects of audio visual aids in the academic achievement of students at Secondary
level, to examine the effects of audio visual aids on the academic achievement of students at
Secondary level, to give recommendations for the usage of suitable audio visual aids in the
methods of teaching at Secondary level and to determine whether the use of audio visual aids is
more effective than traditional methods of teaching. All the students studying in the primary
schools of District Rawalpindi constituted the population of the study. Data collecting instrument
was Objective type test. The collected data was tabulated, analyzed and interpreted by using
correlation method.
Keywords:
Public schools; Private schools; Head teachers; Administrative aspects;
Management Aspects. Secondary Level.
1.
Introduction
Education is the process of bringing desirable change in the behaviour of human beings.
It is integrated part of human activity. In the broader sense it may be said that good ideas lead to
good practices and the good practices may become the harbinger of good ideas. Education does
into merely mean the acquisition pf knowledge or experience but it also means the development
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of habits, attitudes and skills which help a man to lead a full and worthwhile life (Tanveer,
1979).
Education as direction envisages the impact of two things, i.e. persons and things.
Persons influence the children directly and indirectly while things keep the attention of the
children occupied. The child must get the meanings of a thing and then he responds to it,
appreciates it and assimilates it. This response must not only be physical, but mental as well.
Physical responses only train the child while mental responses educate him (David, 1981).
Education is not something static, but it is a continuous and lifelong process. Soon after
the birth and throughout his life, a man undergoes various experiences and continuously learns
one way of behaviour or another. He is subjected to varying and changing condition of life and
has to make adjustments to these different situations and circumstances. Learning through these
experiences of life contributes towards his mental and physical maturity (Quina, 1989).
A man without knowledge is really a blind even he has eyes. Educated man is as much
superior to an uneducated person. It nourishes us like mother, guides us like father and delights
us like wife (Ahmad, 1969).
Education plays a very vital role in the development of fully functioning personality of an
individual. Education also plays its role in making the individual capable to control his
environment and also serves to the general good of the society. Education brings an immense
change in habits, behaviour, feelings and thoughts of the individual due to which he develops all
those capacities which enable him to control his environment (Quina, 1989).
Education is the emancipation from ignorance. It emancipates the person from the
tyranny of the small self and the educated person becomes altruistic and social. Education means
enabling the mind to find out that ultimate truth which emancipates us from the bondage of the
dust and gives the wealth, not of things but of inner life, not of power but of love. H.G Wells
says, One could define education as the lifting of mind out of blind alleys . Education is an
activity or process which is responsible for the modification of the behaviour of an individual
(Barrow, 1990).
Education gives a new shape to man. Education makes the mind; if the mind is the man,
it is education which makes the man. Education is a conscious process to train the children for
fulfilling the responsibilities of adult life. It develops in them thinking and reasoning power in
order to enable them to rise to the occasion, when they are faced with the pressing problems of
home, community and world (David, 1981).
Education is the training of the eye and mind so that the individual should make correct
responses to the problems and opportunities of life. Education is a mean to direct the child
properly; it is the prime concern of education to direct the undeveloped capacities, attitudes,
interests, and needs of the young people into the most desirable channels. Education plays very
vital role in providing the trained manpower to flourish its economy (Kneller, 1984).
2.
Literature Review
Education is considered as the only mean to develop the fully functioning personality of
an individual and for shaping a fruitful and an impressive personality of the individual it is very
necessary that it must be according to the desires and needs of the individual. If it is according to
the desires and needs of the individual then it will leave good impression on the personality of an
individual. We can further say that education which is being provided to the students must be
effective one (Shahid, 2000). Secondary education is the earliest program of education for
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children, beginning generally at the age of five or six and lasting from six to eight years. In most
countries Secondary education is compulsory for all children. In larger communities special
classes or schools are usually provided for children who have physical or developmental
disabilities. The purpose of Secondary school is to introduce children to the skills, information
and attitudes necessary for proper adjustment to their community and to the society. Basically,
the subjects taught are mathematics, social studies, science, music, languages, physical education
and handicrafts. These are often supplemented with other subjects such as foreign languages.
Over the years new subject matter has made the Secondary school curriculum more advanced
(Encyclopaedia Encarta, 2005).
Teacher is the person who is fully responsible to impart knowledge to students for the
fulfilment of their desires. He is to play a very vital role in making his lessons attractive. He
should not know only about modern teaching strategies and techniques that are in practice now
days but must be familiar with their use also. Effectiveness of teaching lies not only in using the
modern methodology but also in his communication power, knowledge of the subject matter,
body gestures, and the effective use of audio visual aids as well (Morris, 1982).
Teaching is an arrangement and manipulation of a situation in which there are gaps or
obstructions which an individual will seek to over come and from which he will learn in the
course of doing so. Teaching is an intimate contact between a more mature personality and a less
mature one which is designed to further the education of the later (Mohanty, 1995).
Audio visual aids are recognized as those materials, gadgets, instruments, etc. that are
used by a teacher to supplement his verbal communication with the student on any lesson or
subject matter. Audio visual materials are also called instructional media materials. Serving as
educational aids and acting through senses. The teacher thereby tries to make his lecture more
lucid, interesting, absorbing and effective. Audio visuals as the word implies are the means of
involving the Ears, the Eyes or both the Ears and Eyes at the same time. Information-come
instructional technology is the broad umbrella under which all such materials or aids are covered
(Frank, 1971).
The use of audio visuals is considered to be the best vehicle for providing the desire
information in amore effective, understandable and quick manner. The term audio visual material
has thus to be explained in some detail in its development process has also to be understood in
order to gauge the true nature of this media (James, 1989).
Audio visual materials are basically instructional media materials, which work primarily
through the senses, especially hearing and seeing and thus serve as educational aids. These
materials include films, radio and television programs, recordings, and models. The term
instructional technology includes the equipment involved in using the material, such as motionpicture projectors, television sets, overhead projectors, video projectors and record and tape
players. The term does not include reference books, text books, or certain other printed matter
which are often called print media (Hughes, 1962).
Most audio visual materials demand a greater use of the senses and stimulate the intellect
more than ordinary reading matter does. A comparative analysis of the different media would
reveal that by involving the senses, audio visual materials present a more realistic experience as
compared to the mere reading of a text book. Although text books still rank as the most widely
used teaching resource yet each year educators use more and more audio visual materials to
supplement text books so as to inculcate the interest of their students. For example, a film
showing the development of an insect might arouse the curiosity of a student who had little or no
previous interest in Biology. Similarly the visual presentation of parts of a flower in a model
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form can create a better image in the minds of the students rather than a simple text narration or
picture in a text book. Tape or video recording of some text, poem or speech can convey the
exact sense or meaning that might never become known in the printed text (Shane, 1961).
The use of audio visual materials has brought into existence several new terms. The term
educational media and technology refers to audio and visual combinations of various media that
is now popularly and conventionally understood as multimedia. Teaching that stimulates more
than one sense at a time is sometimes called multi sensory instruction. It is now common to see
schools utilizing instructional media materials and technology with greater intensity than ever
before. Apart from being innovative new technology is attractive and creates an impression and
impact that lingers in the minds of students rendering to memory in a real way. It leaves little to
the imagination since the images are either real or almost real leaving no scope for
misconception or false imagery. Innovative methods produces an environment of better learning
as compared to reading matter alone which at times appears tasteless, insipid or boring to the
reader (Menacker, 1974).
A total multimedia based institution may be called an instructional materials centre, a
learning resources centre, or a media centre. Such centres ill be difficult to maintain or sustain in
view of their modernity and high cost and the fact that only sophisticated training programs or
customers can be the beneficiaries of such centres. The National University of Modern
Languages at Islamabad may be near to such a centre equipped with all the gadgetry necessary
for high quality automated instruction (Hughes, 1962).
Instructional Media materials were first developed in the United States in the late 1880 s
following the invention of motion pictures. Simultaneously during the early 1900 s, schools
began to use motion pictures in their teaching programs. Most teachers, however, did not realise
the true educational value and significance of motion pictures and other audio visual materials
until after 1929 when Second World War began. The armed forces use such materials and
equipment to train millions of recruits quickly and this gave some food for thought to the
Educators who had under rated the significance of this media. During 1940 onwards instructional
media materials were put to general use in schools in the USA. Instructional media materials are
normally classified according to the senses involved in the use of such materials. Thus visual
materials are primarily for seeing as compared to audio materials which are for hearing. Multi
sensory materials, on the contrary, involve the use of two or more senses (Huning, 1972).
2.1
Statement of the Problem

The problem taken up for investigation can be stated in precise term as Effects of audio
visual aids on students learning at Secondary school level .
2.2
i.
ii.
2.3

To determine the effects of audio visual aids in the academic achievement of students at
Secondary level.
To examine the effects of audio visual aids on the academic achievement of students at
Secondary level.
Significance of the Study
Audio-visual aids can help teachers a lot in communicating his students because they
make teacher confident and provide an opportunity for variety in his teaching. The use of an over
head projector for example, can not only take the focus off you but can also provide memory
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prompts. Other audio-visual aids you should consider using include audio cassettes, video, slides,
computer presentations, flip charts or materials that you can hand around. This study will
definitely enable and motivate teachers to use audio visual aids comprehensively in their lessons.
This study also gives a comprehensive discussion on the importance, scope, use and
significance of audio visual aids in the educational programs for the Secondary school education.
This study also throws light on the types of audiovisual aids that can be used to make the
teaching- learning process more effective and fruitful. This Study also highlights the important
tips that are be kept in mind while using the audio visual aids.
3.
Research Methodology
The purpose of the study was to examine the effects of audio visual aids on students
learning at Secondary level. In order to test the relative effectiveness of independent variable, i.e.
an instructional paradigm (audio visual teaching), the choice of most suitable design for this
experiment was the basic step.
Campbell and Stanely (1963) postulate a number of factors, which affect the internal and
external validity of experimental designs. Relevant to internal validity, there are eight different
factors (these include history, maturation, testing, instrumentation, statistical regression,
differential selection, experimental mortality and selection maturation interaction). If these
factors are not controlled in the design, they may produce adverse effects, which confound the
effects of the independent variables.
Whereas factors affecting internal validity operate on the scores derived from the
dependent variables and, therefore, make the experiment poor as an experiment, factors affecting
external validity operate upon the experimental treatments. Campbell and Stanely (1963)
postulated four factors which jeopardize external validity.
3.1
Population
The aim of this study was to investigate the relative effectiveness of audio visual aids on
students learning at Secondary level. Therefore students studying in the primary schools of
District Rawalpindi constituted the population of the study.
3.2
Delimitation of the Study
The study was delimited to Students of 10th class of English medium school. During the
experiment the following three units of science subject of 10th class were covered:
1. Machines
2. Force
3. Energy
3.3
Sample
One Section of 10th class of Cantt Board Public School No: 2 Rawalpindi (English
medium) was taken as sample of the study. Sample students of Cantt Board Public school No: 2
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Rawalpindi were further divided into two groups, i.e. experimental and controlled groups on the
basis of pre-test by using pair random sampling technique. Each group had 15 students.
Two science teachers having equal qualification, equal teaching experience and
considerably equal teaching potential were selected to teach the controlled and experimental
groups.
3.4
Research Design
While looking at the nature of the study The One- Group Pre- test- Post-test design was
found suitable. This design involves one group which is pre- tested, exposed to a treatment and
then is post- tested. The success of the treatment is determined by comparing pre- test and posttest scores. This design is symbolised as under:
O1
T
O2
Where O1 is the observation based on the pre- test, O2 is the observation based on post- test and
T is treatment.
3.5
Research Instrument
In order to equate the control and experimental groups, a teacher made pre- test was
administered before the allocation of students to the experimental and the controlled groups.
Immediately after the treatment was over, a teacher made post- test was administered to subjects
of both the experimental and the controlled groups. The purpose of this test was to measure the
achievement of the students constituting the sample. The researcher constructed these both tests,
the pre- test and the post- test, after a thorough review of the techniques of test construction and
related units of Science. Consent of the class teachers and experts was weighed in the
construction of tests.
Both the pre- test and post- test were almost parallel with same difficulty level. The two
chapters were taught before the start of experiment; also give a weightage of 25% in the both
tests. Each test was composed of multiple test items pertaining to a combination of learning
domains. These test items were based on the selected two units of 10th class of Science subject.
These two units were taught during the experiment to both the experimental and the controlled
groups, and were intended to measure the learning outcomes. Same post- test was administered
after two weeks as a surprise test to measure the retention level of both the controlled and
experimental group.
3.6
Selection and Training of Teachers for Experiment
Two teachers teaching science subject to the students of 10th class of Rawalpindi Cantt
Board Public School No: 2, Rawalpindi City having equal qualification, equal teaching
experience and considerably equal teaching potential was selected for teaching Science to the
control and the experimental groups. The teacher who was volunteer to teach the experimental
group was provided one week training in using the audio visual aids.
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3.7
Data Collection
During the experiment two different treatment patterns were applied. The control group
was provided with traditional routine situation in the classroom while experimental group was
taught with audio visual aids as treatment. The experiment continued for six weeks. Soon after
the treatment was over, post-test was administrated to measure the achievement of the sample
subjects. Pre-test scores of the sample students were served as data to equalize the control and
the experimental groups, while post-tests was administrated to measure achievement level of the
students as result of treatment.
3.8
Data Analysis
Raw scores obtained from pre-test, and post-test were presented in tabular form for the
purpose of interpretation. For the manipulation of data, the means, standard deviations, and
differences of means were computed for each group. Significance of difference between the
mean scores of both the experimental and control groups on the variable of pre-test scores, and
post test scores was tested at 0.05 levels by applying t-test. To examine the treatment affects for
high and low levels of achievement of the two groups. The One- Group Pre- test- Post-test
design was found suitable. This design involves one group which is pre- tested, exposed to a
treatment and then is post- tested. The success of the treatment is determined by comparing pretest and post- test scores. This design is symbolized as under:
O1
T
O2
Where O1 is the observation based on the pre- test, O2 is the observation based on posttest and T is treatment.
For statistical analysis the formulae followed by Garrett (1997) and Gay (2000) were applied.
The following formulae were used in doing statistical analysis:
I.
SE D
II.
Standard error of the difference between two means

SD 2 1 SD 2 2
Computation of t-value
T
III.
N2
M1 M 2
SE D
Analysis of variance
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4.
Step 1
Correction term (C)
Step 2
SS Term
Step 3
Step 4
= SS Between means
= X1
=
SS Within groups = SS Total
X1 X 2 2
N2 N2
X 21 X 22 C
2
X2
SS Means
Results and Discussions
This chapter is confined to the analysis and interpretation of data obtained from pre-test and
post-test. Previous achievement scores in the subject of Science were obtained from the pre-test
to equate the groups. Significance of difference between the mean scores of experimental and
control groups on pre-test and post-test were found out by applying t-test, and The One- Group
Pre- test- Post-test design was found suitable for the analysis of the data.
The significance of difference between the mean scores of experimental and control
groups on pre-test in Science was found out by applying t-test.
Obtained results along-with analysis and interpretation are presented in the following
pages.
Ho 1:
There is no significant difference between the mean scores of experimental group and
control group on pre-test in the subject of Science.
Table 1:
Significance of difference between the mean mean scores of experimental
and control groups on pre-test
Group
Df
SD
Experimental
Group
Control Group
16
15
19.87
36.11
16
15
33.17
20.87
*Not Significant
df=15
SED
1.47
1.825
t-value at 0.05 level =2.04
Table 1 indicates that the mean scores of the pretest in science of the experimental group
were 19.87 and that of the control group was 20.87. The difference between two means was not
statistically significant at 0.05 levels. Hence, the null hypothesis, there is no significance of
difference between the mean scores of experimental and control groups on pretest was accepted
and both the groups could be treated as equal on the variable of pretest in Science.
These findings support the views of Arnold (1942) who found that learning occurs in conducive
environment and suitable surroundings.
Ho 2: There is no significant difference between the mean scores of low achievers of
experimental
group and control group on pre-test in the subject of Science.
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Table 2: Significance of difference between the mean scores of high achievers of

experimental and control groups on pre-test
Group
Experimental
Group
Control Group
N
8
Df
7
M
14.75
SD
17.72
15.5
21.43
*Not Significant
df=15
SED
1.56
- 0.48
Table 2 reflects that there was no significance of difference between the mean scores of high
achievers of experimental and control group on pretest. To obtained t value through calculation
is - 0.48 at 0.05 levels, which is less than the, table value. Hence, the null hypothesis, there is no
significance of difference between high achievers of the both groups on pretest, was accepted.
So, the high achievers of the both groups could be treated as equal.
Ho 3
There is no significant difference between mean scores of high achievers of experimental

group and control group on pre-test in the subject of Science.
Table 3: Significance of difference between the mean scores of low achievers of
experimental and control groups on pre-test
Group
Experimental
Group
Control Group
N
8
Df
7
M
25
SD
16.77
25.75
16.04
*Not Significant
df=15
SED
1.43
- 0.52
Table 3 reflects that there was no significance of difference between the mean scores of low
achievers of experimental and control group on pretest. Hence, the null hypothesis, there is no
significance of difference between the low achievers of the both groups on pretest was accepted.
The calculated t - value is -0.52, which is less than the table value and is insignificant at 0.05
levels. Hence, the both groups could be treated as equal
Ho 4: There is no significant difference between the mean scores of experimental group and
control group on post-test in the subject of Science.
Table 4: Significance of difference between the mean scores of experimental and control
groups on post-test
Group
Experimental
Group
Control Group
*Not Significant
N
16
Df
15
M
38.87
SD
68.26
16
15
31.06
48.54
df=15
SED
1.91
4.08
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It appears from Table 4 that difference between the mean scores on the post-test of the
experimental group was 38.87 and the same of the control group was 31.06.The difference
between the two means was found significant at 0.05 level in favour of the experimental group.
Hence, the null hypothesis, there is no significance of difference between the mean scores of
experimental and control groups on post-test, was rejected, in the light of the t-value obtained
which is greater than the, table value at 0.05 level which is significant at 0.05 level. Hence, the
null hypothesis was rejected.
These findings support the results reported by Petty (1996) that students learn effectively
by direct method if they are taught immediate requirements of it.
Ho5
There is no significant difference between mean scores of low achievers of experimental

and control groups on post-test in the subject of Science.
Table 5: Significance of difference between the mean scores of high achievers of

experimental and control groups on post- test
Group
Experimental
Group
Control Group
N
8
Df
7
*Not Significant
M
33
25.5
df=15
SD
39.93
27.14
SED
2.04
3.67
Table 5 shows that the difference between the mean scores of high achievers of
experimental and control groups on post-test was statistically significant at 0.05 levels in favor of
the experimental group. The calculated value is 3.67, which is greater than table value at 0.05
level. Hence, the null hypothesis, there is no significance of difference between the mean scores
of experimental and control groups on posttest, was rejected.
Ho 6
There is no significant difference between the mean scores of high achievers of

experimental group and control group on post-test in the subject of Science.
Table 6: Significance of difference between the mean scores of low achievers of

experimental and control groups on post-test
Group
Experimental
Group
Control Group
*Not Significant
N
8
Df
7
M
43.75
SD
38.48
36.25
25.75
df=15
SED
2.0
3.75
Table 6 indicates that the difference between 3.75 the mean scores of low achievers of
experimental group and control group on post-test was not statistically significant at 0.05 levels.
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The calculated t- value at 0.05 levels is 3.75, which is higher than table value at same level.
Hence, the null hypothesis, there is significance of difference between the mean scores of low
achievers of both groups, was rejected.
These results supports the concept of Collitzs (1926), which found students with low
scores, had low interest in learning a foreign language.
5.
DISCUSSIONS
The advantages of using audiovisual instructional techniques during teaching- learning sessions
are immense and remarkable as compared to the traditional methods of teaching. Audio visual
instructional techniques can enhance classroom learning, create opportunity for individualized
learning programs, and can serve as an effective tool for motivating students to learn. In the
classroom situation, audiovisual techniques should be incorporated as a basic instructional tool
and not simply used to occasionally supplement traditional learning techniques. The use of these
tools can free the teacher for more personalized teaching tasks. Educational technology permits
teachers to develop individualized learning programs for their students. Students can progress at
their own pace and can learn to manage their own learning process. Audiovisual tools can be
used to monitor student- teacher interactions. Supervisors can monitor the work of a larger
number of students with these devices. These devices also permit students to reexamine and to
judge their own performance.
We have already concluded that audio visual aids are quite effective in making teaching
learning process more effective and fruitful. In fact these are the helping tools with the teacher
that can enable him to communicate with his students in a befitting manner. Audio visual
materials add interest in the teaching learning process by capturing the attention of the students
through colours and visuals. It is quite imperative that teacher should use them often during the
teaching process. It must be remembered that the key to a strong presentation isn't the equipment
you use but is, actually the suitable time and the method that you choose while using them.
All primary schools of district Rawalpindi were considered the population of the study.
Cantt Board Public School No: 2 Rawalpindi was randomly selected as a sample. A section of
10th class was divided into two equal groups (experimental and controlled) on the basis of pretest. Later, two teachers of almost equal educational qualification, teaching experience and
potential were selected to teach experimental and controlled groups. Experimental group was
taught with the help of audio visual aids while the controlled group was taught with the
traditional methods. As the experiment was ended, a post- test was conducted and the results
highlighted clearly that the group (experimental) taught with the help of audio visual aids
produced good results than the controlled group.
Data was collected, tabulated, analysed and interpreted by finding out the arithmetic
mean, median, mode, standard deviation and finally the T- test was applied to show the data in
real terms. On the basis of the available data, results were drawn and recommendations were
made.
The One- Group Pre- test- Post-test design was found suitable. This design involves one
group which is pre- tested, exposed to a treatment and then is post- tested. The success of the
treatment is determined by comparing pre- test and post- test scores. This design is symbolised as
under:
O1
T
O2
Where O1 is the observation based on the pre- test, O2 is the observation based on posttest and T is treatment.
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6.
Conclusions
The study was actually conducted to know whether the traditional method of teaching
was suitable for students learning or the use of educational media was helpful in making the
students learn easily and happily. Earlier it was believed that Audio Visual Aids can work
wonders in making the students learn quite comfortably. To prove this notion correct, the study
was initiated and all the primary schools of Rawalpindi district were taken as the population of
the study. But due to short of time and infrastructure the Cantt Board Public school No: 2
Rawalpindi was selected as the sample of the study. A section of 10th Class was taken and
divided into two groups (experimental and controlled) on the basis of pre-test. Later, two
teachers of almost equal experience and potential were selected to teach experimental and
controlled groups. Experimental group was taught with the help of audio visual aids while the
controlled group was taught with the traditional method. As the experiment was over, a post- test
was conducted and the results highlighted clearly that the group (experimental) taught with the
help of audio visual aids produced good results than the controlled group. Hence we can
conclude that audio visual aids are quite effective during teaching- learning process and audio
visual make students learning long lasting as compared to the traditional methods of teaching.
7.
Recommendations
i.
ii.
iii.
iv.
v.
As it has been proved that audio visuals make teaching- learning process more effective,
efforts should be made to provide suitable aids in the educational institutions of all levels.
Each school must have 2 to 3 model classrooms where necessary and suitable audio
visual aids should be available.
Teachers should be encouraged and guided to improve audio visual aids during teachinglearning process.
Schools should be provided sufficient financial resources to purchase audio visual aids as
per requirement of the class.
Due attention should be given to teachers training and higher authorities should arrange
special training programs for teachers to get expertise in using the audio visuals.
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Dayton, D. K. (1989). Planning, Producing & Using Instructional Media (6th ed.). Harper &
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James, D. R. (1989). Instructional Media and the New Technologies of Instruction (3rd Ed.).
Macmillan Publishers. New York. pp.
Johnson, K. A. (1989). Instructional Design: New Alternatives for Effective Education and
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(Module 3). National Academy of Higher Education. Higher Education Commission.
Islamabad. pp.
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Their Current Status. Hillsdale, NJ: Lawrence Erlbaum Associates, Publishers. pp.
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Romiszowski, A. J. (1988). The Selection and Use of Instructional Media. Kogan,

London: p.
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Siddiqui, S. A. (1970). Towards Introducing Programmed Instruction in Pakistan. Pakistan
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Shamim, A. (1997). The Need and Use of Audio Visuals in Teaching at Various Educational
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Shane, M. L. (1961). Laboratories for Foreign Language Teaching. Methuen and Co., Limited,
London. pp.
Smith, P. L. (1993). Instructional Design. New York: Macmillan Publishing Company. New
York. p.
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IMPEDIMENTS IN ENHANCING THE QUALITY OF

EDUCATION IN PUBLIC SECTOR HIGHER
EDUCATIONAL ORGANIZATIONS
Listed in ULRICH S
Mr. Faridullah Khan

Kohat University of Science and Technology, Kohat
Dr. Muhammad Zafar Iqbal
Professor and Director,
Institute of Mass Communication
Sarhad University, Islamabad
Abstract
The purpose of this descriptive study was to explore impediments in enhancing the quality of
education in public sector higher education organizations in Pakistan. All the public sector
universities/DAIs in Pakistan and the vice chancellor, deans, registrar, teachers and students of
these universities constituted the population of the study. A sample of 25 universities along with
25 vice-chancellors and registrars was selected through random sampling technique.
Convenience sampling technique was used to select 25 deans, 200 teachers and 500 students
form the sampled higher education organizations. Responses were collected through a
questionnaire containing eighteen items, the most recurring in literature and possible problems
faced by higher education institutions to enhance the quality of education. For item analysis
simple percentage, mean and standard deviation were used as statistical measures. The study
revealed that lack of financial resources, lack of quality assurance at the feeding schools and
colleges and lack of planning were major barriers in improving the quality of education in the
higher education organizations.
Keywords:
1.
Total Quality Management, Quality Assurance, Higher Education Commission,

Universities & DAIs.
Introduction
Higher Education is a sine qua none for the advancement of nations and development of
knowledge based economy and qualified work force (Mishra, 2006, Government of Pakistan,
1972). Knowledge explosion, the cutting edge developments in the field of science and
technology, globalization and depleting resources have brought every sphere of life under
tremendous pressure to respond to the changing scenario and educational organizations are no
exception. These phenomena have prompted accountability, efficient utilization of resources,
market driven approach and quick response to emerging needs and requirements of the
stakeholders in higher education institutions (Stella, 2002) Pressure from various stakeholders
like students, government, business and industry and the society as a whole is mounting on
higher educational organization to adopt quality assurance measures in these institutions.
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Acknowledging the importance of higher education for national growth and knowledge
economy, developing nations have chipped more money in higher education and opened a
number of higher education institutions, however, there is a growing concern about higher
education institutions capabilities to produce gradates according the requirements of the society,
efficient running of these institutions and quality of the graduate themselves (Lenn, 2003)
These circumstances have brought the issue of quality in education to the forefront.
Quality in higher education has become the prime concern of countries worldwide. In the
backdrop of such situation countries find themselves in the tight corner to ensure and assure the
quality of higher education at a nationally comparable and internationally acceptable standard
(Stella, 2002). Consequently, many countries initiated national quality assurance mechanisms
and many more are in the process of evolving a suitable strategy. Most of the quality assurance
bodies were established in the nineties and after a few years of practical experience, they are
rethinking many issues of quality assurance (Stella, 2002).
Higher education institutions worldwide resorted to Total Quality Management (TQM)
(Ho & Wearn, 1995, Bolton, 1995)and adopted various standardized quality models and
institutional assessment approaches like Malcolm Baldrige National Quality Award (MBNQA),
European Foundation Quality Model (EFQM), International Organization for Standardization
quality management system standards (ISO 9001: 2008), Deming Prize, Australian Quality
Awards and Balanced Scorecard (Paunescu & Fok, 2005; Hides, Davies & Jackson, 2004)
besides some other national quality awards and models. Accreditation of academic and
professional programmes has been started to standardize academic and professional programmes
at national level.
Most of the quality assurance bodies were established in the nineties and after a few years
of practical experience, they are rethinking many issues of quality assurance (Stella, 2002). In
Pakistan, Quality Assurance Agency (QAA) was set up on January 18, 2005 at Higher Education
Commission of Pakistan (HEC) to improve academic quality and standards across the country.
Moreover, Quality Enhancement Cells (QECs) have been established in 45 national universities
phase-wise and the target is all national universities with a QEC. The QAA at HEC with help of
QECs in the universities are making all over efforts to improve the quality and standards of
higher education in Pakistani universities to bring them at par with international universities
(Batool and Qureshi, 2007). Moreover, higher education institutions in Pakistan have been
encouraged in the National Education Policy 1998-2010 to implement ISO 9001 quality
management system and secure certification (Government of Pakistan, 1998). However, before
initiating any quality improvement move, it is of paramount importance to conduct a self
assessment and explore the problems faced by the organization that is going to embrace such
efforts. Keeping the above scenario in view, this empirical study was conducted to explore the
problems faced by the institutions to improve the quality of education.
1.1

The present study was conducted to find out impediment in enhancing the quality of
education public sector educational organization in Pakistan.
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Importance of the Study
It is a well-established fact that the impact of quality in higher education is multidimensional in a

country like Pakistan. There is a direct link between the quality of higher education and
socioeconomic development of the country. Nowadays, higher education is recognized as a
capital investment as it leads to the accumulation of human capital, which is the key to
increasing incomes and sustained economic growth. The educational managers are the backbone
of inductive process. They are the policy makers, planners, implements, administrators and
change agent in education.
1.3
Delimitation of the Study

Only public sector universities and degree awarding institutions were investigated due to
time and financial constraints.
2.
Literature Review
Higher education refers to education offered by post secondary education (Husen and
Neville, 1985). Higher education includes all education above the level of the secondary school
given in Colleges, Universities Graduate School, Professional Schools, Technical Institutes,
Technical Colleges and Normal Schools (Ghaffar, 1996). Higher education in Pakistan is
referred to as a type of education that is pursued in post-secondary educational institutions
including professional schools which are approved as institutions of higher education by the
competent state authorities. These institutions have the basic responsibility for providing
individuals with the advanced knowledge and skills that are required for their professional life
and are the greatest asset of a nation (Mughal & Manzoor, 1999). The purpose of these
institutions is not just to provide knowledge but they also have multidimensional objectives with
an aim to support and improve the process of social and economic development. Moreover, they
develop capabilities of individuals to the highest potential level so that they grow intellectually
and contribute effectively to a society.
2.1
Overview of Higher Education in Pakistan
Pakistan inherited a very weak base of higher education at the inception (Isani and Virk,
2005). When India was subdivided, only two of the then existing 21 universities were on the
Pakistan side of the border one in the West wing at Lahore, University of the Punjab
established in 1882, and one in the East wing in Dhaka (Hayes, 1987). Sindh University received
its charter in 1947 and it was in the process of organization when Pakistan came into being in
that year (Isani and Virk, 2005)
The Higher Education system in Pakistan is comprised of universities/Degree Awarding
Institutions (DAIs) and affiliated colleges. These higher education institutions are under the
umbrella of Higher Education Commission (HEC). The Higher Education Commission is an
apex and autonomous body that allocates federal government funds to the universities and DAIs
and accredit their degree programs. The affiliated colleges though funded and regulated by
provincial governments, follow the curriculum of the HEC funded universities/DAIs with which
they are affiliated.
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The Pakistan higher education sector is predominantly public in nature, with public
Higher Education Institutions (HEIs) dominating both the university/DAI and College sectors,
however a phenomenal surge in the number of private higher education institutions has taken
place in the recent years. As a result of the endeavors by the HEC, the number of universities
and DAIs has risen to 133 which consist of 73 public and 60 private sector universities and DAIs
(HEC, 2010) as is shown in the table 2.2 & 2.3. These universities can be broadly categorized
into general and professional universities. The majority falls in the general category (Isani and
Virk, 2005).
The HE sector enrolls less than 3% of the 17+ to 23+ years age cohort, and compares
unfavorably with countries such as India at 6% and Malaysia at 9.6%. There is also a large
distance learning program (Isani and Virk, 2005).
2.2
Problem and Issues in Higher Education
Higher education in Pakistan is plagued with multiple maladies due to which higher
education institutions have not been able to achieve the main purpose of higher education which
is to produce people with moral and intellectual excellence and academic ability that can develop
logical thinking and contribute effectively towards the industrial, economic, technological and
social development of the country (Isani and Virk, 2005).
According to the World Bank Report (1992) (cited in Isani and Virk, 2005) the most
pressing issues of higher education in Pakistan include among others, a flawed institutional
framework, inefficiency and ineffectiveness, problematic nature of design and delivery of
service, irrelevance and wastage, under funding of low productivity in research.
Isani and Virk (2005) observed that under-funding, faculty problems, lack of governance
and accountability, inadequate physical facilities and student support services, outdated
curricula, the problem of quality, periodic student unrest, absence of linkage between universities
and industries were the problems in achieve excellence in higher education institutions in
Pakistan.
Hayes (1987) states that in Pakistan, programs and enrollments have been poorly
conceived in their relationship to the labor market and future manpower requirements. The
largest enrollments have been in the fields where employment opportunities in an
underdeveloped economy are relatively scarce. Moreover, Pakistani educational institutions lack
of trained teachers, and handful teaching and physical resources.
Some of the problems discussed in Government Five Years Plans with regard to higher
education as pointed by The Boston Group (n.d.) are:
Inadequate laboratory and library facilities
Outdated Syllabi and textbooks
Poor quality of research and faculty
Not enough students studying technical subjects
The Boston Group (n.d.) Has also reported some structural flaws regarding the
governance and internal management of the public universities which are:
Absence of accountability and transparency
Disconnect between roles, responsibility and authority
Lack of proper financial management
Missing internal and external incentives for research
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They believe that these flaws have led to the following problems:
Inability to attract and retain high quality faculty in sufficient number
Inadequate financial support from the government
Inefficient distribution of funds within universities
Lack of research and development of intellectual property
These problems are adversely affecting the quality and standard of education in Pakistan. The
government is well aware of the importance of quality higher education for developing a quality
workforce and knowledge based society and has urged the public sector university in the
Education Policy 1998-2010 to adopt ISO 9001 quality management system to streamline the
internal functioning of the universities and ensure quality education. Similarly in the New
Education Policy 2009, the higher education system and institutions have been stressed to accord
high priority to ensuring the quality of services and quality of outcomes. Internal quality
assurance processes of higher education institutions must be strengthened to conform to
international standards of quality assurance. Besides, the government of Pakistan has taken a
number of effective measures to tackle these problems and improve higher education standards
in the country. Many accreditation council have been as a quality assurance measure to pull up
the standard of education in the country.
Quality in education is difficult and controversial. Some authors look at quality in
education as value addition through teaching and research while others include the quality of
support services and customer satisfaction. Korukonda, (1992) sees quality as a qualitative
change in the student.
Quality is multidimensional and is judged by a variety of parameters. It is seen as a
mentally stimulating environment and learning conditions supported by excellent teaching
materials and teachers who stimulate the students involvement and interest and assist them in
achieving new points of understanding whether those be cognitive, affective or psychomotor.
While it is easy for experienced educator to immediately judge high-quality teaching but he is at
a loss if asked to define it precisely. In general, the quality of education is often measured by the
teaching conditions (inputs), and much more rarely by the learning (outcome) (UNESCO, 1989).
The faculty, the infrastructure and support provided to the faculty and the students for teaching
and research and the efficiency of operation of university academic programs define the
conditions conducive to quality education (Government of Pakistan, 2007). Quality should be
applied in teaching and academic programs, research and scholarship, staffing, students,
infrastructure and the academic environment (HEC).
The quality of education and the learning achievement of students depend heavily on the
competence, personality, and dedication of the teacher. But this is not the whole story. They also
depend on the conditions under which the teachers and students are working for example on
whether the size of the class manageable and its atmosphere conducive to learning, and whether
there is an ample supply of equipment, textbooks, and other learning materials. Not least of all,
they depend on the characteristics of students themselves on whether they are well nourished,
physically and mentally healthy, strongly motivated to learn and enjoy strong family support
(Besterfield, 2004)
Quality assurance is the planned and systematic review process of an institution or
programme to determine whether or not acceptable standards of education, scholarship and
infrastructure being met, maintained and enhanced (Hayward, Cited in Batool & Qureshi, 2007).
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3.
Methods and Procedure of the Study
This was the descriptive/survey type of study.
completion:3.1
Following procedure was adopted for its
Population
Population of the study included all the public sector universities along with the top
management, the teachers and the students pursuing different academic programmes at these
educational institutions. The top management includes vice-chancellors, deans and registrars.
3.2
Sample
Out of the all public sector universities, 25 universities along with their vice-chancellors
and registrars were selected through random sampling technique. However, convenience
sampling techniques was used for the dean, the teachers and the students. Only those deans,
teachers and students were contacted who were willing to participate and readily available.
Table 1: Province-Wise Universities and DAIs in Pakistan
Public
Region
Universities
Azad Jammu and Kashmir
4
2
Baluchistan
8
6
Federal Area
16
13
Gilgit-Baltistan
1
1
Khyber-Pakhtoonkhwa
24
15
Punjab
41
22
Sindh
39
14
Total
133
73
Source: HEC, 2010, http://www.hec.gov.pk/OurInstitutes/Pages/Default.aspx
Table 2 : Sample Size and Response Rate
No of
Subjects
Vice-chancellors
25
Registrars
25
Deans
25
Teachers
200
Students
500
Total
775
25 Universities & DAIs
Categories
Questionnaires
Private
2
2
3
9
19
25
60
Response
Sent
Returned
Discarded
Used
Rate
25
25
25
100%
25
25
25
100%
25
25
25
100%
200
168
10
158
88.4%
500
407
20
387
84.7%
775
650
30
620
87.2%
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3.3
Research Instruments
A 3-point Likert scale questionnaire consisting of eighteen different items representing
the possible problems was developed for the above mentioned stakeholders of higher education
institutions.
3.3
Data Collection
Since the study was descriptive in nature, survey was considered appropriate research
design to collect the data. The data were collected through the researcher s personal visit,
mailing the questionnaire and where possible some friends help was sought for the purpose after
proper orientation.
3.4
Data Analysis
The Data collected through questionnaires were tabulated, analyzed and interpreted by
using suitable statistical tools of simple percentage, mean and standard deviation. Findings were
drawn and recommendations were made for the improvement. Scale values were assigned to
each of the three responses ranging from 1-3 views Yes to Know and to calculate the mean score,
or standard deviation and further percentage were calculated.
4.
Results and Discussion
Table 3: Descriptive Statistics

Table.3 represents the overall perceptions (Vice Chancellor, Deans, Registrar, Teachers and
Students) of Mean score ranking of item analysis of problems faced by the higher education
institutions in Pakistan.
Item Analysis
Lack of Financial Resources
Lack of Quality Assurance at Feeding
Colleges & Schools
Centralized Decision-making
Lack of Physical Resources
Lack of Planning
Lack of Human Resources
Lack of Communication Between Students
and Administration
Lack of Equipped Lib.
Favouritism Nepotism
Resistance to Change
Politics Among Students & Teachers
Lack of Communication Between Teachers
and Administration
Lack of Incentives for Teachers Prof.
Development
Poor Governance
Lack of Adequate Space
External Interference
Lack of Facilities & Poor Pay Structure for the
Teachers
Outdated Curriculum
N
620
Minimum
1.00
Maximum
3.00
Mean
2.25
Rank
I
Std.
Deviation
0.74
620
1.00
3.00
2.20
II
0.76
620
620
620
620
1.00
1.00
1.00
1.00
3.00
3.00
3.00
3.00
2.20
2.18
2.17
2.15
III
IV
V
VI
0.74
0.77
0.80
0.75
620
1.00
3.00
2.13
VII
0.79
620
620
620
620
1.00
1.00
1.00
1.00
3.00
3.00
3.00
3.00
2.12
2.08
2.06
2.01
VIII
IX
X
XI
0.79
0.78
0.77
0.84
620
1.00
3.00
2.00
XII
0.81
620
1.00
3.00
2.00
XIII
0.77
620
620
620
1.00
1.00
1.00
3.00
3.00
3.00
1.95
1.95
1.93
XIV
XV
XVI
0.85
0.82
0.82
620
1.00
3.00
1.90
XVII
0.80
620
1.00
3.00
1.86
XVIII
0.79
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Table 3 shows descriptive statistics regarding vice chancellors, deans, registrars, teachers and
students perceptions about the problems faced by the public sector higher education institutions
in Pakistan. The results in table indicate that the first six major problems identified by the
respondents include lack of financial resources (M=2.25), Lack of Quality Assurance at Feeding
Colleges & Schools (M=2.20), Centralized Decision-making (M=2.20), Lack of Physical
Resources (M=2.18), Lack of Planning (M=2.17) and Lack of Human Resources (M=2.15)
having mean score ranking I, II, III, IV, V and VI, respectively. This shows that majority of the
respondents viewed these problems the most pressing ones and huge stumbling blocks to
improve the quality of education in these institutions. Moreover, these aspects are the
prerequisite for introducing any quality management system. Next six problems identified as a
result of the study include Lack of Communication between Students and Administration
(M=2.13), Lack of Equipped Library and laboratories (M=2.12). Favouritism and Nepotism
(M=2.08), Resistance to Change (M=2.06), Politics among Students & Teachers (M=2.01), Lack
of Communication between Teachers and Administration (M=2.00) having mean score ranking
VII, VIII, IX, X, XI, XII, respectively. The last group of the problems faced by these
educational institutions were Lack of Incentives for teachers professional development
(M=2.00), Poor Governance (M=1.95), Lack of Adequate Space (M=1.95), External Interference
(M=1.93), Lack of Facilities & Poor Pay Structure for the Teachers (M=1.90) Outdated
Curriculum (M=1.86) and ranked as XIII, XIV, XV, XVI, XVII, and XVIII respectively. These
problems were existed and impeding quality assurance and improvement initiatives but not that
much severe.
Table 4: Frequency Distribution
Table 4 represents the frequency distribution of the responses of vice chancellor, deans,
registrar, teachers and students regarding the problems faced by the higher education
institutions in Pakistan.
S. No
1
2
3
4
5
6
7
8
9
10
Items Analysis
Frequency
Yes
Lack of Financial Resources
Responses
Percentages
Responses
Percentages
Responses
Percentages
Responses
Percentages
Responses
Percentages
Responses
Percentages
Responses
Percentages
Responses
Percentages
Responses
Percentages
Responses
269
43.4
258
41.7
255
41.6
249
40.2
240
38.9
32.2
38.2
235
37.9
225
36.3
220
35.5
217
Lack of Planning
Lack of Quality Assurance at Feeding
Colleges & Schools
Lack of Physical Resources
Centralized Decision-making
Lack of Equipped Lib. & Lab.
Lack of Communication Between
Students and Administration
Lack of Human Resources
Politics Among Students & Teachers
Favouritism & Nepotism
To Some
Extent
240
38.7
208
33.5
238
38.4
236
38.1
261
41.9
30.1
35.5
228
36.8
261
42.1
185
29.8
236
No
Total
111
17.9
154
24.8
127
20.0
135
21.8
119
19.2
22.2
26.3
157
25.3
134
21.6
215
34.7
167
620
100%
620
100%
620
100%
620
100%
620
100%
620
100%
620
100%
620
100%
620
100%
620
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11
12
13
14
15
16
17
18
Poor Governance
Lack of Communication Between
Teachers and Administration
Resistance to Change
Lack of Adequate Space
External Interference
Lack of Incentives for Teachers Prof.
Development
Lack of Facilities & Poor Pay Structure
for the Teachers
Outdated Curriculum
Percentages
Responses
Percentages
Responses
Percentages
Responses
Percentages
Responses
Percentages
Responses
Percentages
Responses
Percentages
Responses
Percentages
Responses
Percentages
35.0
207
33.4
202
32.6
201
32.4
195
31.5
186
30.0
185
29.8
170
27.1
156
25.3
38.1
175
27.9
218
35.2
254
40.8
200
32.3
202
32.6
250
40.5
218
35.5
219
35.2
26.9
238
38.7
200
32.2
165
26.8
225
36.2
232
37.4
185
29.7
232
37.4
245
39.5
100%
620
100%
620
100%
620
100%
620
100%
620
100%
620
100%
620
100%
620
100%
Table 4 shows descriptive statistics regarding the problems faced by the higher education
institutions in Pakistan. The problems are rated on the Yes % of the participants responses.
i.
ii.
iii.
iv.
v.
vi.
vii.
43.4% of the respondents believed that the institutions were facing shortage of financial
resources while 17.9% maintained that there was no lack of financial resources. Similarly
38.7 % opined that the problem of lack of financial resources existed to some extent.
41.7% of the participants viewed that there was lack of planning at the institutions while
24.8% maintained that there was no lack of planning at the institutions. Moreover, 33.5 %
opined that there was lack of planning to some extent at the institutions.
41.6% of the respondents believed that there was lack of quality assurance at feeding
colleges and schools which was affecting the quality of education in higher education
institutions while 20.0% maintained that lack of quality assurance at feeding colleges and
schools was not an obstacle in enhancing the quality of education. Similarly 38.4 %
opined that it was a problem to some extent.
40.2 % of the participants viewed that there was lack of physical resources which was
affecting the quality of education in the institutions while 21.8% maintained that there
was no lack of physical resources. Moreover, 38.0 % opined that the problem of shortage
of physical resources existed to some extent.
38.9% of the respondents believed that the mode of decision-making was centralized
which was adversely affecting the quality of education at the institutions while 19.2%
maintained that the mode of decision-making was not centralized. Similarly 41.9%
opined that the mode of decision making was centralized to some extent.
38.2 % of the participants viewed that libraries and laboratories at the institutions were
not well equipped and was affecting the quality of education while 26.3% maintained that
libraries and laboratories were well equipped and this problem did not exist. Moreover,
35.5 % opined that libraries and laboratories were not fully equipped and was a problem
to some extent.
37.9% of the respondents believed that there was a lack of communication between the
students and the administration which was affecting the quality of education at
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viii.
ix.
x.
xi.
xii.
xiii.
xiv.
xv.
xvi.
xvii.
institutions while 25.3% maintained that lack of communication between the students and
the administration was not a problem. Similarly 36.8 % opined that the problem existed
but to some extent and not that much severe.
36.3% of the respondents believed that human resources were inadequate which was
affecting the quality of education adversely while 21.4% maintained that there was no
dearth of human resources and not a problem. Similarly 42.3 % opined that human
resources were insufficient to some extent.
35.5% of the respondents believed that the students and the teachers were involved in
politics and this problem was affecting the quality of education while 34.7% maintained
that there was no politics among the students and the teachers. Similarly 29.8 % opined
that the problem of politics among the students and the teachers existed to some extent.
35.0% of the respondents believed that there was favouritism and nepotism in the
appointment of faculty and other staff and assigning tasks which badly affecting the
quality of education while 26.9% maintained that there was no favouritism and nepotism
as such. Similarly 38.1 % opined that the problem of favouritism and nepotism existed to
some extent.
33.4% of the respondents believed that governance at the institutions was poor and
affecting the quality of education negatively while 38.7% maintained that governance
was not poor. Similarly 27.9 % opined that the governance at the institutions was weak to
some extent.
32.6% of the respondents believed that there was communication gap between the
teachers and the administration and the communication was not that much effective and
frequent while 32.2% of the respondents were satisfied and maintained that there was no
lack of effective communication between the teachers and the administration. Similarly
35.2 % opined that it was a problem to some extent.
32.4% of the respondents believed that any change for improvement of quality of
education that resulted in extra work and discipline was resisted while 26.8% maintained
that change was not resisted. Similarly 40.8 % opined that resistance to change was a
problem to some extent.
31.5% of the respondents believed that available space and infrastructure was inadequate
which hampering the quality of education while 36.2% maintained that the available
space and infrastructure was adequate. Similarly 32.3 % opined that lack of space was a
30.0% of the respondents believed that there was external interference (from powerful
people in the society and other government institutions) which had a negative impact on
the quality of education in the institution while 37.4% maintained that no external
interference was taking place. Similarly 32.6 % opined that external interference was
taking place to some extent.
29.8% of the respondents believed that there were no sufficient incentives for the
teachers professional development while 29.7% maintained that incentives for the
teachers professional developments were sufficient and posed no problem for the quality
of education at the institutions. Similarly 40.5 % opined that it was a problem to some
extent.
27.1% of the respondents believed that there was lack of facilities for the teachers and
remuneration was insufficient which was affecting the quality of education while 37.4%
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xviii.
5.
were satisfied with the facilities and pay structure. Similarly 35.5 % opined that it was a
25.3% of the respondents believed that existing curricula were outdated and they
considered it a problem in enhancing the quality of education while 39.5% opined that
the existing curricula were not outdated and hence not a barrier in enhancing the quality
of education. Similarly 35.2% believed that the existing curricula need improvement and
considered them a problem existed to some extent.
Findings
Table 4 shows the problems confronted by the higher education institutions. The respondents
believed that problems like lack of financial resources (43.4%), lack of planning (41.7%), lack of
quality assurance at the feeding schools and colleges (41.6%), lack of physical resources
(40.2%), lack of well equipped libraries and laboratories (38.2%), lack of communication
between the students and the administration (37.9%) and politics among the students and the
teachers (35.5%) were existed and hampering the moves to improve the quality of education in
these institutions. Similarly they opined that problems like lack of human resources (42.1%),
centralized decision-making (41.9%), resistance to change (40.8%), lack of incentives for the
teachers professional development (40.5%), favouritism and nepotism (38.1%), and lack of
communication between the teachers and the administration (35.2%) were present to some
extent. The respondents also maintained that there were no such problems like outdated curricula
(39.5%), poor governance (38.7%), lack of facilities and poor pay structure (37.4%), external
interference (37.4%) and lack of adequate space (36.2%).
6.
Conclusions
The following conclusions were drawn out after analysis of responses.
6.1 IMPEDIMENTS IN ENHANCING THE QUALITY OF EDUCATION

i.
ii.
iii.
Majority of the respondents considered lack of financial resource, lack of planning, Lack
of quality assurance at the feeding schools and colleges, lack of physical resources, lack
of well equipped libraries and laboratories, lack of communication between the students
and the administration and Politics among the students and the teachers as major
problems to improve the quality of education in the higher education institutions.
Majority of the participants held that lack of human resources, centralized decisionmaking, resistance to change, lack of incentives for teachers professional development,
favouritism and nepotism and lack of communication between the teachers and the
administration were the problems to some extent to improve the quality of education.
Majority of the respondents maintained that outdated curriculum, poor governance, lack
of facilities and poor pay structure, external interference and lack of adequate space were
not problems to enhance the quality of education.
463
7.
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Recommendations
The following recommendations were made in the light of the findings and objectives of
the study.
The study exposed the lack of financial resource, lack of planning, lack of quality
assurance at the feeding schools and colleges, lack of physical resources, lack of well equipped
libraries and laboratories, lack of communication between the students and the administration
and Politics among the students and the teachers as major problems to improve the quality of
education in the higher education institutions. In this respect it is recommended that
arrangements should be made on war footing to tackle these problems. Student-wings of the
political parties operative at the campuses should be banned forthwith as active politics destroys
the peaceful environment of the campuses and kills the merit. However, students centered
activities without external interference may be allowed to prepare the students for future
responsibilities. Unless there is a quality input, there is no quality output. Quality assurance
practice should be implemented at the colleges and school level. Without communication
common objectives cannot be achieved. In order to acquaint the students of their rights and
responsibilities and enable them to benefit from the facilities the university is offering, there
should be a student-handbook which is comprised of all the information that the students may
need. There should be orientation sessions at the induction and start of each academic session.
Moreover, one window operation facility may be launched by establishing Information Center
providing all sorts of information in one place. Also web-mail facility may be used to inform the
students with the latest information and getting students feedback. The remaining problems
should be tackled phase-wise as they are time consuming.
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References
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Hides, M. T., Davies, J. & Jackson, S. (2004). Implementation of EFQM excellence model selfassessment in the UK higher education, The TQM Magazine, 16 (3), 194-201
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perspective. Islamabad, Pakistan: National Book Foundation.
Lenn, M. P. (2003). Strengthening world bank support for quality assurance and accreditation in
higher education in East Asia and the Pacific. World Bank Document
Maguad, B. A. (2006). The modern quality movement: Origins, development and trends. Total
Quality Management, 17 (2), 179 203
Mishra, S. (2006). Quality Assurance in Higher Education: An Introduction, Bangolore, India:
National Assessment and Accreditation Council.
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PERCEPTION OF WOMEN REGARDING THE SOCIAL
Listed in ULRICH S
AWARENESS AND ROLE OF HIGHER

EDUCATION IN PAKISTAN
Mr. Faridullah Khan
Kohat University of Science and Technology ,Kohat
Mr. Munir Khan
Ph.D Scholar, Institute of Education and Research,
Miss Imrana Rani
Phd. Scholar, Education Department
Islamia University Bahwalpur
Abstract
In this paper, the authors study aimed at investigating the perception of Women regarding the
social awareness and role of Higher Education in society of Pakistan. The major objectives of the
study were: (1) To explore the role and awareness of higher education and their impact on
women in Pakistan society and culture; (2) To study the extent to which women who acquired
higher education enjoy their rights in society; The entire population of the study was all female
teachers and students of Kohat University of Science and Technology (KUST), Kohat. Among
them twenty female teachers and fifty students were randomly selected were included in the
sample of the study. After going through the relevant literature a questionnaire was developed.
For data the researcher himself in the reachable universities administered collection the
questionnaire validated with the help of university teachers and students and the procedure of
mailing was adopted for the rest of the universities taken in the sample. Data collected through
questionnaire research instrument was tabulated, analyzed and interpreted using Chi-Square as a
statistical tool, in the light of the objectives of the study. On the basis of finding the main
conclusion were made the study indicated that majority of respondents revealed that women
were not enjoying their marital rights according to their own desires. Parents did not spend equal
money on girl's education and had no freedom of choice and expression. Moreover a bulk of the
university female teachers and students were aware of their rights, responsibilities and their
household role for nurturing their children and adjustment in their families. In spite of this
knowledge they were unable to achieve desired status in the society.
Keywords: Higher Education, Female teachers, Female Students, Social respect, Society
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1.
Introduction
Education is a process of socialization, which brings change in the behavior of individuals and
empowers them to learn to live with dignity and freedom. Through the process of education,
human beings develop abilities, skills and attitudes that help them to modify their behavior
according to the social, economic and political demands of their environment. Education is
considered the most important way of human capital formation, which is prerequisite for
sustaining the development of a nation (Govt. of Pakistan, 2004)
The Universal Declaration of Human Rights (1948) argues that Every one has the right
to Education. This fundamental right has been recognized in the Convention on the Rights of
Child 1989 stressing that the child has right to education and it is the duty of the state to ensure
that primary education is free and compulsory. The National Education Policy (1998) further
indicates, The ideology of Pakistan lays down two important obligations on the government.
Firstly, education will be accessible to all citizens. Secondly, it shall enable them to prepare
enlightened and civilized individuals committed to the cause of Islam. These two obligations are
in accordance with the teaching of Holy Quran that recognizes provision of education as a right
of the individual. Being a signatory of the universal declaration of Education for All during
the Jometin World Conference on education held in 1990, Pakistan is bound to provide
educational facilities to obtain universal primary education (Govt. of Pakistan, 1998).
In times to come, education and education alone will determine the place of a country in
comity of nation (Govt. of Pakistan, 1998). It is the commitment of any government to provide
education to every citizen, so provision of education is above all a public responsibility. Pakistan
has not yet succeeded in universalizing the basic education and still is struggling to achieve the
target. There still remain many tasks, which require our immediate attention in the vital area of
basic education to keep abreast with the fast changing world of today. As the matter of basic
education is concerned it is not so much matter of so many years of schooling, but rather the
acquisition by individual young or old male or female through formal or non formal means, of
certain basic skills, knowledge and attitudes. Different people have different perceptions about it,
some regard primary education as basic education and others consider literacy as basic education
(Bishop, 1986; Khan, 2000). Knowledge and attitudes learned in school or out of school, which
are necessary to enable the individuals young or old to live a useful and productive life. It
enables the individual to improve the quality of his life to continue his education to the best of
his abilities (Qaisrani and Khawaja, 1989).
The development of a nation and its education are closely related to each other. The
importance of education is realized everywhere and is now on top of the political agenda of most
nations. Education produces knowledge, skills, values and attitudes. It is actually the main
instrument for disseminating and accomplishment of human civilization.
Higher education is viewed as a source of great potential for the socio-economic and
cultural development of the country. The purposes of higher education are multi-dimensional and
may be termed as personal, social, economic and cultural. In the context of Pakistan it has
ideological meanings attached to its purposes as well (Ahmad, 1982).
Higher education has the additional role of reflecting and promoting an open and
meritorious civil society. Civil society is neither state nor market, but is a realm that links public
and private purposes. Within this realm, higher education promotes values that are more
inclusive or more "public" than other civic venues, such as religious communities, households
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and families, or ethnic and linguistic groups. Higher education is expected to embody norms of
social interaction such as open debate and argumentative reason; to emphasize the autonomy and
self-reliance of its individual members; and to reject discrimination based on gender, ethnicity,
religious belief, or social class. The best higher education institution is a model and a source of
pressure for creating a modem civil society. This is an ideal not often realized, but is nevertheless
a standard against which to measure national systems (Ahmad, 1982).
2.
Literature Review
Education and particularly higher education cannot be divorced from its milieu and social
context. Religious, moral, historical and cultural ethoses permeate through the fabric of the
educational system of a country. The context of higher education in Pakistan, therefore, is to be
within the Islamic ideology which is the genesis of Pakistan and its cultural and religious
traditions. This context is enshrined in the Constitution of Pakistan 1973 and in the Objectives
Resolution (Alam, 2004).
According to Eileen (1991) stated that "Social Recognition" is the degree to which an
individual perceives society as valuing her or his talents and abilities. In its most general sense,
social recognition refers to a person's self-definition in relation to others. Individuals experience
themselves `from the standpoint of the social groups as a whole' to which they belong. Social
recognition enables the person to get insight and have awareness of what is undesirable and
unfavorable about her current situation, perceive a better situation, the possibilities of attaining it
and realizing what is within her reach and what she could do to get to a better situation.
Impact is the difference your programs are making in peoples lives. In more technical
terms, impact is the reportable and verifiable difference a long-grant program makes in the lives
of citizens (Social Science Encyclopedia, 1985).
Education plays a role of social change agent whereas higher education days a role of
leadership in all fields of life. Women constitute about 50percent population of the country. They
need equal opportunity of excess in all disciplines of higher education. No doubt that enrollment
of girls is increasing in higher education but still equal chances are not available. They are
deprived of their rights and empowerment in the society.
Right is defined in Chambers Dictionary, 1995, as "A person has a right to something or
a right to do something, if it is morally or legally proper to have it or to do it". Moreover
"Empowerment is about people - both women and men taking control over their lives: Setting
their own agendas, gaining skills, building self - confidence, solving problems and developing
self - reliance".
It is true that the women's liberation in the West is one extreme, but the subjection of
women in the third world is another. It is commonly observed that women are still treated as
second class citizens. They are denied even some of the fundamental rights and privileges which
are so essential for the preservation of human dignity. It is also commonly observed that without
legitimate and active participation of women, these states would not be able to accomplish the
vital task of nation-building (Eileen, 1991).
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In spite of the persistent efforts of the United Nations, however, it is painful to say, that
the movement towards the improvement of the legal status of women in the world is still slow.
Even the advanced countries where constitutionally men and women have been accorded
absolute equality before law, women still continue to suffer from social; and political disabilities
which hinder their full and effective participation in national life.
It is a matter of common knowledge that the legal position of woman, relating to her
rights under private law, is of paramount significance for the welfare of a modem society.
Political privileges and legislative enactments do not accomplish much if inside the family, in
her private rights; she remains a victim of irrational customs and traditions (Amira,. 1996).
The recent trends in the entire Muslim world show that the leaders at the helm of affairs
realize that in social, economic, cultural and educational areas of community life, women play a
decisive role in national uplift. Therefore, considerable efforts are being expended to provide the
female population with opportunities and facilities to acquire qualifications and specialized
knowledge which would enable them to make society intellectually, morally and materially
prosperous.
The question of social recognition of women in our society has always been a very
painful subject for discussion or research. Islam and our Constitution both guarantee equality to
all people, including equality of gender. There is a wide spread misconception about the place
Islam accords to women. It is wrongly taken that Islam relegates women to an inferior status. It
confines them inside the four walls of their homes, and it restrains them from taking up
employment outside their homes or running their own business. This is wholly contrary to facts.
Amira (1996) stated that United Nations Educational, Scientific and Cultural
Organization accords the greatest importance to the role of women graduates who, contribute in
various ways - as professionals within their chosen domains of expertise, as decision - makers
their participation in family and community life.
Education is thus a principal means to empower women so that they realize their
potential. Higher education, a key factor in capacity - building for each nation, has special
responsibility for humanity's ability to attain the goals of sustainable development and peace.
Dickens and Charles (1996) viewed that women play a very vital part in the growth of a
society. Their contribution has, historically, been very considerable throughout the rise and fall
of civilizations. Their roles in social life are always numerous, diverse and highly valuable. In
sheer number they are almost equal to men. God has created mankind with two persons of
opposite sexes, physically and culturally dependent upon each other. Society literally lives and
continues to live because of the co-operative efforts of men and women both.
Women doubt their self worth, as well as the basic human needs of respect and dignity
and affirmation. Restricted mobility for women, affects their education and work/ job
opportunities; this adds to the already fewer educational facilities for women.
Women in Pakistan are deprived of their basic rights and they are struggling through
different movements. Higher education is viewed as a source of great potential for the socioeconomic and cultural development of the country. Hence, it appeared suitable to study the
opinions highly educated women about role of higher education in understanding social respect
of women in society
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2.1
Objectives of the study
The present research was the following main objectives:

a.
b.
2.2.
To explore the role and awareness of higher education and their impact on women in
developing understanding about their rights;
To study the extent to which women who acquired higher education enjoy their rights in
society;
Delimitations
The study is delimited to all female teachers and students of Kohat University of Science and
Technology (KUST),
3.
Materials and Methods
3.1
Population
The population of the study were comprise all female teachers and students of Kohat University
of Science and Technology (KUST),
3.2
Sample
A sample is small portion of population of the study. Among them twenty female teachers and
fifty students were randomly selected were included in the sample of the study.
3.3
Data Collection
The researcher was personally collect the data from sample University and was
administer the questionnaire to the female teachers and students.
3.4
Data Analysis
Data collected through above-mentioned instruments were tabulated, analyzed and interpreted
category-wise; compare responses of two groups (teachers/students). To analyze the data, chisquare as a contingency test and for statistical treatment chi-square as a contingency test was
applied using the following formula:
Oi
=
Frequency observed or experimental determined
Ei
=
Frequency expected
df
=
Degree of freedom
P
=
Probability of exceeding the tabulated value of X2
=
Oi - Ei
=
(Oi - Ei) 2
Ei
(Garrett, 1997)
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Chi-square as contingency test was used to compare the frequencies of teachers/students.

The value of the degree of freedom for any analysis is obtained from the following calculations:
df = (r-1) x (c-1)
On the basis of the analysis and interpretation of data, conclusions were drawn and
recommendations were made.
4.
RESULTS
The major purpose of the study was to find out the Role of university education in
understanding of social respect in women. This chapter deals with the analysis and interpretation
of data obtained by the means of questionnaires. The analysis of data is given below:
In this study the data have been interpreted and analysis through chi square as a
contingency test. The chi-square test is said to be one of the most widely used tests for statistical
data generated by non-parametric analysis. The chi-square test is commonly used in analyzing
data where two groups or variables are compared. Each of the variables may have two or more
categories, which are independent from each other. The data for this comparison is generated
from the frequencies in the categories. In the results and discussion section the data have been
interpreted and analysis in two different groups.
5.
COMPARATIVE RESPONSES BETWEEN TEACHERS AND STUDENTS
5.1
Discussion of Results
Each question is considered in turn and the patterns of responses compared using chisquare as a contingency test. In using chi-square in this way, no group is considered as a control
group. The question being addressed is whether the groups differ in their responses from each
other. They are considered in pairs: do the principals and teachers respond in different ways?
Do the teachers and students respond in different ways?
The results for each question are shown as percentages for clarity but the chi-square
calculations are carried out using the frequency data. Grouping of data is carried out where any
category drops below 5% or 10 respondents and the degrees of freedom are reduced accordingly.
The samples are as follows: Teachers: N = 20; Students: N = 50
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Results:
Research Items
Higher education creates
sense of all types of
women rights
Higher
education
awakens the pros and
corns
of
the
empowerment in women
Higher
education
awakens the pros and
corns
of
the
empowerment in women.
Higher educated women
can t
keep
balance
between job and home
Higher education helps
the women for leading
independent
economic
life
Higher education helps
the females in the
adjustment with their
families.
Higher
education
empowered women to
have freedom of choice
and expression for her
recognition in the society
Higher
education
prepares the women for
nurturing
of
their
children according to
the modem needs of the
society..
Women
enjoy
their
marital rights according
to their own desire.
Opinions of the girls for
their own marriage are
considered good by the
society
Higher educated woman
Selected
Sample
Teachers
Students
Teachers
Reponses
N
20
50
SA
6
28
A
2
16
UN
3
0
DA
5
3
SDA
4
3
20
50
11
32
10
Students
Teachers
20
50
Students
Teachers
Students
Teachers
20
50
20
50
28
10
16
4
0
1
2
4
4
1
10
14
16
11
Students
Teachers
20
50
32
6
30
7
9
9
10
1
10
1
3
1
0
1
0
20
50
7
12
6
23
1
2
3
9
3
4
10
Students
Teachers
Students
X2
df
13.6
< 0.001
23.5
< 0.001
21.3
< 0.001
9.6
< 0.001
9.3
< 0.001
15.3
< 0.001
2.3
< 0.001
20.5
< 0.001
20.5
< 0.001
15.3
< 0.001
Teachers
Students
Teachers
Students
Teachers
32
20
50
7
6
28
10
2
16
1
3
0
0
5
3
32
4
3
20
50
Students
Teachers
20
32
3
7
6
10
2
1
7
0
2
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is the agent of western

thoughts.
Higher educated women
role is more vital then
men
5.3
Students
Teachers
Students
50
20
50
10
14
17
11
10
14
16
0.4
< 0.001
9.4
< 0.001
Result Interpretation
Although some teachers hold a strongly positive view, in general they are less positive
when compared to their students. In many ways, teachers and students hold similar views
although the teachers are not quite so positive. It is clear that the teachers are different in their
responses from students, being significantly more holding negative views. Perhaps, the
teachers know the clear picture of the women in local society.
All groups are positive but the teachers are less confident and students are most
confident. Perhaps the teachers rare most sure that they are achieving what they want to
achieve while the students are more conscious about the empowerment of the women.
Both the groups are almost positive. In general students appear to be more enthusiastic
in deciding whether Higher Education prepares the females for leadership responsibilities in
the households. Remaining disagreeing group has their own views in relativity to their own
negative experiences.
Again we have a hard support by the teachers for the topic. A large fraction of the
teachers group agrees to this view. Meanwhile we see a balanced situation when students
views are concerned.
Both the parties are having positive views about the topic. Students are more hopeful
about their independent economic life while some teachers disagree to some extent because of
the dependency of women on men for their economic needs.
The gap between the two groups can be seen clearly. Students highly rely on higher
education for the adjustment of women with families. Teachers may support the attitudes of the
females towards their families and making it responsible for the females adjustment.
The above results show that the general idea about the topic remains positive. The
teachers have a stronger positive stand in this regard as compared to students. Almost the same
proportion of teachers and students shows disagreement to the topic.
Here the teachers appear to be strongly supporting this vista. Though the students are
also positive, but the teachers are having more confidence in this regard. Those who disagree
are a minority. This shows that the teachers are having a clearer outlook towards the role of
higher education in the nurturing the children.
Nearly half of both the parties are having a positive thinking. But half of the teachers
are strongly supporting this topic. Teachers are insisting on the fact the women enjoy their
marital rights according to their own desire.
Discussion on an important issue is discussed. And a clear opposition is seen in both
the parties. The teachers are in strong support of the above mentioned topic while the students
are in strong disagreement of the view.
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Here lies an unusual situation. Nearly half of the teachers agree to this belief while half
of the teachers disagree. Here the students polls show a strong disagreement to the aforesaid
view. This shows that in this regard the students are holding more confidence in their answers
as compared to the teachers.
Here the witness a strong opposition to the topic by the teachers. A small fraction of the
teachers are in its support while we observe a balanced situation
examining students
comments. Nearly equal percentages agree and disagree.
6.
Discussion
Higher education was widely perceived as an indicator of the social recognition of

women and even more importantly as an agent for the empowerment of women .It was
expressed by the highly educated women that education gave them awareness about their
consent for marriage, equal rights for its dissolution, permission for second marriage, right of
inheritance of property and laws in t h e matters. There is no doubt that Islam accords women
virtually the whole gamut of rights including the rights to property, work and wages , to choose a
spouse , to divorce if marriage doesn't prosper , to get education and to participate in economic
social and political activities. Where as large numbers of marriages in our society are
performed without seeking the consent of the bride. Both civil and religious laws theoretically
protect women rights in cases of divorce but practically many women are unaware of their
rights, Legal literacy may be the constraint in this regard.
A survey conducted by the Human Rights Commission of Pakistan reported that in
2002 almost 90 % of women included educated to graduate level didn't realize that they had
rights at all , such as those of divorce (Government of Pakistan, 2002).
Discrimination against women particularly is acute in rural areas. In some areas of rural
Sindh and Baluchistan, female literacy rates were 2 percent or less. A survey of rural females
by the National Institute of Psychology found that 42 percent of parents cited "no financial
benefit" as the reason they kept their daughters from attending school and sent their sons
instead. Similarly a study by the NWFP directorate of primary education concluded that most
girls in rural areas do not go to school because they have to look after the household. In
Karachi only 28 percent of girls were completing matriculation as opposed to 83 percent of
boys passing the same tests. In Baluchistan conditions were much worse, with only 2 percent
of the province's women having received any formal education (Government of Pakistan,
2002).
The main objectives of educating females are precisely the same as those of educating
the other sex--to develop all their powers and faculties, and to prepare them for happiness and
usefulness because females are as capable of attaining all sorts of knowledge as the males.
Pakistan ranks lowest in the region in the most gender related human development indicators.
The statistics axe disturbing and chilling: the country's females on top administrative and
managerial jobs are mere 3 percent.
For over forty years in Pakistan, we have deprived our women the right of "equality" in
education. Education is a human right and an essential tool for achieving the goals of equality,
development and peace. Equality of access to attain educational opportunities is necessary to
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become agents of change. Literacy of women is an important key to improve health, nutrition
and education in the family and to empower women to participate in decision-making in
society (Chaudhary, 1991).
Curricula and teaching materials should be developed in line with- young women and
girls requirements of academic and technical training, career planning, leadership and social
skills and work experience to prepare them to participate fully in society. Human rights
education programmes that incorporate the gender dimension at all levels of education, in
particular by encouraging higher education institutions, especially in their graduate and
postgraduate juridical, social and political science curricula, to include the study of the human
rights of women should be arranged.
As an educational tool the mass media can be an instrument to educate people for the
advancement of women and for development. Television especially has the greatest impact on
people and, as such, has the ability to shape values, attitudes and perceptions of women and girls
in both positive and negative ways. It is therefore essential to provide non-formal education,
especially for rural women, in order to realize their potential with regard to health, microenterprise, agriculture and legal rights.
7.
Conclusions
In the light of the analysis of data and findings of the study following conclusions were
drawn.
i.
ii.
iii.
iv.
Higher education created sense in women about their rights, responsibilities,

empowerment, and leadership in household, nurturing their children well and
adjustment in their families.
Discrimination against women was widespread, and kept women in a subordinate
position in society It was reported by female university teachers and students that there
was an overwhelming preference for male child in our society. In cases of food, health
care, nutrition and education boys were preferred over girls .Career was no preference
but for the male .Parents had the slogan of "marriage for daughter and degree for the
son :" In Pakistani society where feudal and tribal values were still thriving ,women
were perceived even by themselves as second rate beings.
Majority of respondents revealed that women were not enjoying their marital rights
according to their own desires. Their own choice was condemned. They were of the
opinion that men could not go up to four marriages without any sound reason. They
were not independent to hold property inherited from their parents. They were not
allowed to run any business of their choice and develop themselves economically.
Parents did not spend equal money on girl's education and had no freedom of choice
and expression.
The major hindrance in social recognition of women in Pakistan according to the
respondents was the domination of male in society. Secondly they mentioned that lack
of education is another obstacle and even those who were educated they even did not
know about their rights. They also indicated that traditions and customs prevailing in
the society were barriers in achieving the real status in society.
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v.
Female teachers and students suggested that media can play a very constructive role in
promoting women's role in society. They recommended that elimination of gender gap
is essential in this regard. Education is the most powerful vehicle to empower women.
They were of the opinion that if laws are properly implemented that can also uplift
women position in society.
8.
Recommendations
In the light of the findings of the study and the conclusions drawn, following
recommendations were made:
i.
The study indicated that majority of the university female teachers and students were
aware of their rights, responsibilities and their household role for nurturing their
children and adjustment in their families. In spite of this knowledge they were unable to
achieve desired status in the society. It is recommended that details of their
responsibilities and rights should be incorporated in the curricula and women should be
prepared through teaching to get their full rights.
ii. No doubt higher education was playing role in creating awareness about the gender
equality and enlightenment in the society. Along with it the government of Pakistan
made so many efforts to safeguard the rights of women through commissions,
committees and legislations yet the Pakistani society is male dominated and due to lack
of proper education this society is moving very slowly towards social justice and
economic equality of women. It is recommended that in every district "A Women Right
Safety Commission" should be set up with full facilities and powers. This commission
should coordinate the activities of all the concerned departments to ensure the equality
and justice.
iii. A common curriculum was taught to girls and boys at different stages of education.
During the last fifty years no conscious efforts were made to create a society on the
basis of gender equality. It is recommended that a special subject of female education
should be introduced from class one to Ph.D level for every girl student. This step will
strengthen the confidence of female for achieving their rights and empowerment.
iv.
Majority of the respondents expressed that there were many barriers to get their
property share, to run independent business, to get due rights of inheritance and to hold
any highest position in public office without discrimination. It reflected that in the
presence of so many legal provisions the practical situation was worse. It is
recommended that all the means of awareness, propagation, education and training
should be activated for this purpose. Electronic Media can play a more constructive role
in this regard.
v.
Majority of the respondents were of the view that females did not have authority to
decide about their education and parents did not spend equal money on the education of
their daughters and sons. It is recommended that governments should mobilize all
educational institutions and the media to change negative attitudes and values towards
the female education and to increase public awareness of the value of girl children
through public education by promoting equal treatment for girls and boys at all level.
Investing in education and training for girls and women, with its exceptionally high
social and economic return, can prove to be one of the best means of achieving
sustainable development and economic growth in the society.
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References
Ahmad, A. 1982. Muslim Women and Higher Education. Institute of Policy Study. Islamabad.
Pakistan. pp. 26 - 33.
Alam, J. 2004. National Commission on the Status of Women. Government of Pakistan
Ministry of Women Development, Social Welfare and Special Education. Islamabad.
Pakistan.p.21
Amira, A. 1996. Women, the Family and Divorce Laws in Islamic History. Syracuse
University Press. Syracuse, New York. USA. p. 79.
Bishop G (1986). Innovation in Education, London: Macmillan
Chambers Essential English Dictionary. 1995. Chambers Harrap Publishers, Edin Burgh .U.K. p.
577.
Chaudhary, M. S. 1991. Women's Rights in Islam. Islamic Publications Ltd., Lahore. Pakistan.
pp. 23 - 30.
Dickens, S. and W, Charles. 1996. Great Expectations. Ed. Janice Carlisle. Bredford. U.K. p.
67.
Edwards, S. 1985. Male Violence Against Women: Excusatury and Explanatory
Ideologies in Law and Society. Groom Helm, London. U.K. pp. 183 - 216.
Eileen, M. 1991. Women and Education. Tavistock Publications, Ltd. London. U.K. p. 13.
Encyclopedia Britannica. 1985. The Encyclopedia Britannica, Inc., Chicago, 11I., Vol. 23.
USA.
Garrett, H.E.1997. Statistics in Psychology and Research in Education, 6th ed.Combine
Printers Pvt. Ltd, Lahore. Pakistan.P.263.
Govt. of Pakistan, 2004, National Sample Survey of Private Schools in Pakistan Academy of
Educational Planning and Management Ministry of Education Islamabad, Pakistan. P9.
Govt. of Pakistan, 2002, National Sample Survey of Private Schools in Pakistan Academy of
Educational Planning and Management Ministry of Education Islamabad, Pakistan. P5.
Qaisrani N, Khawaja S (1989). Planning of Basic Education in Pakistan, Islamabad: Academy
of Educational Planning & Management.
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A Quick look on Islamic Entrepreneurship
VOL 2, N O 10
Listed in ULRICH S
Mohammad Reza Noruzi, EMBA, PhD Student

Abstract
This paper aims to review and study the Islamic entrepreneurship. Entrepreneurship is one
of the most important phenomena in today's turbulent economy and a motor for countries
which they want to be developing faster. In addition to this, Islamic countries want to
develop faster as well need to concentrate more on training entrepreneurship strategies in
society. They should support potential entrepreneurship ideas. This paper aims to review
and study the Islamic entrepreneurship.
Keywords: Entrepreneurship, Training Entrepreneurship, Islamic Entrepreneurship
1. Introduction
The concept of entrepreneurship, long hallowed in the context of business ventures, has been
increasingly applied to the context of social problem solving (e.g., Dees, 1998; Emerson &
Twerksy, 1996; Thake & Zadek, 1997). The challenges of finding effective and sustainable
solutions to many social problems are substantial, and solutions may require many of the
ingredients associated with successful business innovation of the constellation of problems
associated with long-term poverty; such problems often demand fundamental transformations in
political, economic, and social systems (Alvord et al,2004). Some research in the development
literature has assessed characteristics common to large-scale, successful poverty alleviation
initiatives (e.g., Krishna, Uphoff, & Esman, 1997; Tendlar, 1989). Some investigators have focused
on the organizational and institutional characteristics of effective development agencies (e.g.,
Brown & Covey, 1987; Korten, 1980; Paul, 1982), and others have looked at the characteristics of
successful social movements (Alvord et al, 2004). This paper presents an overview of
entrepreneurship broadly first, then social entrepreneurship specifically, and highlights the
behavioral traits possessed by entrepreneurs. First, we introduce the concept of entrepreneurship
and then social entrepreneurship, while providing a brief introduction to social entrepreneurs and
their activities. Finally, we present an analysis of the traits and major standards of entrepreneurship
education that a social entrepreneur is expected to possess in learning the social entrepreneurship
process (Noruzi, Westover, 2010).
2. Entrepreneur
An entrepreneur is someone who organizes, manages, and assumes the risks of a business or
enterprise. An entrepreneur is an agent of change. Entrepreneurship is the process of
discovering new ways of combining resources. When the market value generated by this new
combination of resources is greater than the market value these resources can generate
elsewhere individually or in some other combination, the entrepreneur makes a profit. An
entrepreneur who takes the resources necessary to produce a pair of jeans that can be sold for
thirty dollars and instead turns them into a denim backpack that sells for fifty dollars will earn
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a profit by increasing the value those resources create. This comparison is possible because in
competitive resource markets, an entrepreneur s costs of production are determined by the
prices required to bid the necessary resources away from alternative uses. Those prices will be
equal to the value that the resources could create in their next-best alternate uses (Russel,
2008).
2.1 Importance of Entrepreneurship
The entrepreneurial process is started by sensing that certain practices form an anomaly and can
thus be done differently. Crucial is how one can hold onto this anomaly and reveal how the
commonsense way of acting somehow fails and is doomed to perish as a new practice is slowly
developed and becomes visible. For instance, digital technology has quickly rendered the taping of
sound and images on music and video cassettes obsolete. This anomaly that drives the
entrepreneurial process forms a historical possibility that, once recognized through a new shared
practice, will be practiced by most people in roughly the same way. In the example of the cell
phone, the idea of wireless phoning was at first unbelievable but very quickly, people saw the
advantages of this artefact and even further developed it by practicing, for instance, a textmessaging culture. Now some people no longer have a fixed ( landline ) phone connection at
home, or in the city of Nokia there is no longer the possibility to install a fixed connection
(Steyaert, 2007).
As entrepreneurship is more and more connected to everyday life and practices, it is clear that
entrepreneurship and entrepreneurs become less exclusive and can be observed in less obvious
contexts than one normally expects. This pervasiveness, however, differs from the increasing
homogeneity pinpointed by the critique of entrepreneurial selves, since it is assumed that
entrepreneurship as it changes significantly people's forms and styles of living is continuously
questioning and bringing variations to how life is organized. Ultimately, when entrepreneurs give
form to the future face of society and when it is the task of entrepreneurship to create from the
society people have to live in, the society people want to live in, as Saras Sarasvathy has noted,
entrepreneurship brings multiplicity and creativity to the organizing of society (Steyaert,
2007:Noruzi, Westover, 2010).
2.2 Promotion of entrepreneurship
Given entrepreneurship's potential to support economic growth, it is the policy goal of many
governments to develop a culture of entrepreneurial thinking. This can be done in a number of
ways: by integrating entrepreneurship into education systems, legislating to encourage risk-taking,
and national campaigns. An example of the latter is the United Kingdom's Enterprise Week, which
launched in 2004.
Outside of the political world, research has been conducted on the presence of entrepreneurial
theories in doctoral economics programs. Dan Johansson, fellow at the Ratio Institute in Sweden,
finds such content to be sparse. He fears this will dilute doctoral programs and fail to train young
economists to analyze problems in a relevant way (Johansson, 2004). Many of these initiatives
have been brought together under the umbrella of Global Entrepreneurship Week, a worldwide
celebration and promotion of youth entrepreneurship, which started in 2008. The charity The
Aldridge Foundation sponsors Academies specialising in entrepreneurship, teaching core
entrepreneurial attributes to young people with the aim of improving their life skills (Aldridge,
2004).
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2.3 Objectives of Good Entrepreneurship Training

Entrepreneurship education is often seen as a special kind of training to become an
entrepreneur or to enlarge job prospects of the individual. With this kind of education, various
goals are combined. Based on the Expert Group "Education for Entrepreneurship" of the
European Commission and the National Consortium of Entrepreneurship Education U.S.A, this
section will show the main arguments promoting entrepreneurship education and point out
their main objectives.
There are two special objectives of entrepreneurship education. In a broader view,
entrepreneurial attitudes and skills shall be promoted, in a narrow sense a specific training on
how to create a business is provided. The European Expert Group agreed about five objectives
of Entrepreneurship Education:
Expert group: Education for Entrepreneurship: Objectives of teaching about
entrepreneurship
(EGEE 2004: 12)
"Promoting the development of personal qualities that are relevant to entrepreneurship, such
as creativity, spirit of initiative, risk-taking and responsibility;
Offering early knowledge of and contact with the world of business, and some
understanding of the role of entrepreneurs in the community;
Raising students awareness of self-employment as a career option (the message being that
you can become not only an employee, but also an entrepreneur);
Organising activities based on learning by doing
for example by means of students
running mini-companies or virtual firms;
Providing specific training on how to start a business (especially in vocational or technical
schools and at university level)."
Similarly the US-American Consortium of Entrepreneurship Education points out five stages to
the entrepreneurial spirit.
Entrepreneurship Education, a Lifelong Learning Process (NCSEE 2004
nurturing.htm)
Stage
Supposed to
Target group
Basics
understand economics and free enterprise primary grades,
identify career options
junior high,
gain prerequisite basic skills
high school
Competency understand problems of employers
career and technical education
awareness
discover entrepreneurship competencies
Creative
learn how to create new businesses
advanced high school career and
applications apply specific occupational training
technical programs, Colleges
learn entrepreneurship competencies
Start Up
develop policies and procedures for a new training programs for adults
or existing businesses
become self-employed
Growth
solve business problems effectively
programs to assistant entrepreneurs
expand existing businesses
Finally the US-National Consortium develops 403 content standards, grouped to 15 major
standards, again to three sections of entrepreneurial skills, ready skills and business function
(Noruzi, Westover, 2010).
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Major Standards of entrepreneurship education (NCSEE 2004 standards_detail.htm)

Entrepreneurial Skills
Ready Skills
Business Functions
Business
Foundations:
Business
Financial
Entrepreneurial
Processes: discovery,
concepts and business activities
Management
concept development,
Human Resource
Communications and Interpersonal
resourcing,
Management
Skills
Actualization,
Information
Digital skills
Harvesting
Management
Economics: Basic Concepts, Cost-Profit
Entrepreneurial
Relationships, Economic Indicators /
Marketing
Traits / Behaviour:
Trends, Economic Systems, International
Management
Leadership, Personal
Concepts
Operations
Assessment
and
Financial Literacy: Money Basics,
Management
Management
Financial Services, Personal Money
Risk
Management
Management
Professional
Development:
Career
Strategic
Planning, Job-Seeking Skills
Management
The content standards have to be understood as a kind of comprehensive tool box including
business and economic knowledge as well as personal and ethical competences. However, they
are not targeted to specific grade levels.
3. Islamic Entrepreneurship
The Islamic society has witnessed vigorous economic activity since the Prophet (PBUH) first
came to Medina. To this agrarian community was added a group of experienced traders from
Mecca, a great center of inter-regional trade. Monetization came early, and the ban on unequal
exchange of similar fungibles seems to have facilitated the process. Muslims started with
Byzantine gold dinars and Persian silver dirham, but early on they began to mint their own
coins. The state had a monopoly on coinage, and any tampering with their weight or purity was
severely punished (Ismail, 2006, p.2).
Besides being holistic in approach, Islamic entrepreneurship dictates that the individual must
first be a religious person, then a practitioner (religious person who also practice what he
learn). The benevolent person (insan berihsan) submits only to the Almighty. Through his/her
vocation the person is expected to perform his/her duties as an ibadah and entrusted with the
role of a responsible leader (khalifah) (Radiniz, 2007).
The concept of entrepreneurship in Islam also bases on co-operation, generosity and
benevolence. That is why Islam really encourages uqud al-tabarruat or unilateral contract
such as loan (al-Qard) in order to promote cooperation and inculcate sense of brotherhood
amongst Muslims. At the same time Islam extremely prohibited monopoly, exploitation, fraud
or usurious transactions. In other word, every entrepreneur should always preserve the good
deeds and avoiding the evil such as being honest, fair, and accurate in every transaction
(Ismail, 2006, pp.12-13).
3.1 Islamic Entrepreneurship Focus on Eight Principles of Thoughts:
i.
Entrepreneurship is an integral part of Islamic religion.
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ii.
iii.
iv.
v.
vi.
vii.
viii.
By virtue of human nature, the Moslem entrepreneurs are khalifah and have the
responsibilities developed prosperity and sees business as part of ibadah or good deed.
Motivation Success in Islam is not merely measured by the end result but also the
way and means of achieving them.
Ibadah business activity is part of ibadah or good deed
Position of Entrepreneurship and business in Islam Islam encouraged its ummah to
venture into business. Prophet Muhammad S.A.W expounded that 9 out 10 source of
rizque (reski) can be found in business.
Islamic Economic System - Islamic Entrepreneurship should operate within the domain
of Islamic Economic system and act as the vehicle towards global acceptance of Islamic
Economic System.
Guiding Principles of Islamic Entrepreneurship is by the al-Quran and al-Hadith
Entrepreneurial Ethics based on exemplary conducts of Prophet Muhammad S.A.W
(Radiniz, 2007)
3.2 Islamic Entrepreneurship as Integral Part of the Religion

Islam is a complete way of life. There is no separation between business and religion. Islam
has its own entrepreneurship culture and guiding principles based on the Al-Quran and Hadith
to guide business operation. By virtue of the human nature, the person must firstly be a
Muslim, then an entrepreneur. He has the responsibility to perform ibadah and be a
khalifah . Muslim entrepreneur should search for God s blessings above all other factors.
Muslim entrepreneurs perform business not solely for profit, but above all, to fulfill the fardhu
kifayah .
3.3 Muslim Entrepreneurship Ethics
To prevent laziness entrepreneurship requires hard work
To eradicate fear risk taking is necessary
To search for legitimate ventures
To avoid forbidden sources of income and property
To show gratitude and thankfulness of whatever has been acquired
To grow and develop capital and profit
To diversify business ventures
To avoid greediness
4. Conclusion
Social Entrepreneurship by itself shows up frequently in the media, is referenced by public
officials, has become a common topic of discussion on university campuses, and informs the
strategy of several prominent social sector organizations. The reasons behind the popularity of
social entrepreneurship are many. On the most basic level, there s something inherently interesting
and appealing about entrepreneurs and the stories of why and how they do what they do. As well,
government officials and policy makers should try to expand social entrepreneurship talents in the
society for expanding economic conditions and the quality of life (Austin, 2006; Noruzi, Westover,
2010).
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Alvord, Sarah H., L. David Brown and Christine W. Letts, (2004), Social Entrepreneurship and
Societal Transformation: An Exploratory Study Journal of Applied Behavioral Science,
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Entrepreneurship: Same, Different, or Both?, ENTREPRENEURSHIP THEORY and
PRACTICE, January, 2006
Austin, J., Gutierrez, R., Ogliastri, E. and Re cco, R. (eds) (2006a) Effective Management of
Social Enterprises. Cambridge, MA: David Rockefeller Center Series on Latin
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Secondary
education.
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experiences in rural development. West Hartford, CT: Kumarian.
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for
Entrepreneurship
Education.
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A Study on using knowledge and wisdom in organization
Listed in ULRICH S
Mohammad Reza Noruzi, EMBA, PhD Student

Abstract
Today, managers should not just pay attention to the money for workers. they should spend much
more time for the other important factors as well. They should think for not just traditional workers
because the other kinds of workers have been emerged and called "knowledge workers" and
managing these kinds of workers needs knowledge and wisdom and intelligent managers as well.
And these kinds of workers have changed the traditional organizations to intellectual organizations.
This paper aims to study on using knowledge and wisdom in organization.
Keywords: Intellectual Capital, Intellectual Capital Knowledge, Organization

1. Introduction
In ancient time, the ruler of kingdom searches for the group of intellectual people, who can
advise them for better a management. For developing the IC, they have been established so,
many schools of thought & universities around the world. Today s ruler must do the same for
worldwide holistic Intellectual human resource development, whole can make prosperous
world. Organizations which have more intelligent staff will do better (Nirmal et al, 2004).
Indeed, 'the increase in the stock of useful knowledge and the extension of its application are
the essence of modern economic growth' (Kuznets 1966). Enlightened economic historians
have long emphasized the role of technology and organization in economic development.
Formalization, the sharing of personal knowledge, and the development of structural
approaches as a mechanism to transfer learning throughout the firm may on the other hand sap
creativity and impede learning. Ideally, one would like to develop approaches or models which
have a common essential logic, but which enable customization of particular features. This is
but one of the many challenges to service firms in the new economy where knowledge sharing
itself can often is the basis of competitive advantage (Teece, 2002).
Also doing a successful strategy and transferring a traditional organization to a knowledgebased one, and keeping and accumulating the IC and intangible resources in the organization
more efficient, organizations should use from LO and knowledge accumulate strategies and
professional team building strategies in their organizations to survive and growth and
dynamical capability in today's' competitive era (Hung et al, 2005; Davenport & Beck, 2002;
Groves, 2002; Levet & Guenor, 2000).
2. Intellectual Capital
Information and knowledge are the thermonuclear competitive weapons of any time. In today s
time, acquiring the knowledge is not a big deal but implementation of acquired is a big deal.
Only intelligent people can take the decision that where & when the acquired knowledge
implementation can produce the best results.
Success goes to those who manage their intellectual capital wisely (Stewart, 1997, p. 68).
Many view the accessibility of knowledge as the foundation for establishing a competitive
advantage in the new millennium (Edvinsson & Malone, 1997; Stewart, 1997). The theory of
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intellectual capital has emerged in the past decade in response to these advances within an
organization. Although the theory is new and research is in the early formative stages,
theoretical foundations have been identified as anchors of intellectual capital.
In the simplest of terms, Ulrich (1998) defines intellectual ,& competence multiplied by
commitment (p. 125), meaning that intellectual capital equals the knowledge, skills, and
attributes of each individual within an organization multiplied by the person s willingness to
work hard. Klein and Prusak (1994) define intellectual capital as the intellectual material that
has been formalized, captured and leveraged to produce a higher-valued asset (p. 67).
The literature on intellectual capital has deployed a variety of different classification schemes
(i.e., Edvinsson and Malone 1997; Petrash 1996). There are widely accepted, three-category
classification, which divides intellectual capital into codified knowledge about an
organization s systems and operations (systems capital); knowledge about customers, markets,
and distribution (customer capital); and knowledge acquired from people skills and expertise
(human capital; Bontis 1996; Bontis and Fitz-enz 2002; Stewart 1997; Sveiby 1997). Figure 1
provides an overview of the three types of intellectual capital used in this study. Whether
professional based or customer based, it is common practice for service firms to purchase some
of their intellectual capital from external consultants and franchisors (Walsh et al, 2008, p.302).
2.1 Benefits of Intellectual Capital in Management and Organization
Successful organizations hire intelligent staff and this is the usual form of developing IC in the
organization (Sveiby, 1997; Rose et al 1997; Stewart, 1997; Edvinsson, L., and Sullivan, 1996;
Edvinsson, L. and M. S. Malone, 1997).
Most organizations have adapted or transformed their management styles and business models
to manage intellectual capital (IC) and respond to the IC-enabled dynamics of the knowledge
economy. Many of these organizations have done it without even realizing that they are
adopting an intellectual capital management (ICM) approach. A top executive of a leading
consumer products company, whose name is withheld, commented that his company is not
interested in ICM. "Show me the money," he said. "All I see are the circles and pyramids that
ICM people draw in conferences." What this executive did not realize is that he was already
managing IC in one way or another on a daily basis to make money. If it weren't for this
executive's daily reliance on his gut feeling and tacit knowledge to manage his employees'
innovation, the company he works for wouldn't be a market leader. If the company's employees
did not care about the management of customer and structural capital, it wouldn't invest
millions of dollars in its interactive Web site to solicit consumers' feedback 24 hours a day,
seven days a week (ICM, 2009).
Knowledge, competence, and related intangibles have emerged as the key drivers of
competitive advantage in developed nations. This is not just because of the importance of
knowledge itself, but because of the rapid expansion of goods and factor markets, leaving
intangible assets as the main basis of competitive differentiation in many sectors. There is
implicit recognition of this in both management theory and practice with the growing emphasis
being placed on the importance of intangible assets, reputation, customer loyalty, and
technological know-how. By using a good structure like learning organization we will have
organizational structure that have the ability to support the Intellectual capital in today's
market. So today's organizations should try to use this paradigm (learning organizations) to be
competitive. Also because our contemporary organizations may differ from the traditional
organizations and so we should implement new skills to be learning organization so that our
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staff can adjust themselves with new technologies. Also can sense the weak signals in the
environment and can reply the prosper answer to them. In this situation our managers and
executives and CEOs can effectively manage the Intellectual Capital in the organization.
Successful managers and businesses have been managing intellectual capital one way or
another all along, whether consciously or intuitively. This however, does not mean that they
have an ICM program or strategy. Managing IC as a matter of common business sense is not
sufficient for the development of ICM as an organizational competency. It is only when a
management style moves from being intuitively applied to a planned and systemized process
that it can be perfected. Only then can it be substantially transformed from being an art to
becoming a science. Once it transitions into a science, it becomes testable, measurable, more
predictable, and, most importantly, repeatable. Though organizations that apply ICM advance
this goal, there is still a long road of experimentation and applied research ahead for the
emerging field of ICM to become more of a "science." (ICM, 2009)
One of the established precepts of ICM to date, however, is dividing IC into human, customer,
and structural capital-what.
2.1 Barriers for IC
Despite the embryonic stage of the IC field (Serenko and Bontis, 2004), the extant literature
offers a number of factors that affect intra-organizational knowledge flows and serve as
antecedents to knowledge sharing. These are based on four different schools of thought:
i. The social school;
ii. The structural school;
iii. The rational school; and
iv. The incentive school.
Out of these various lines of thought, a number of specific, overlapping factors have been
identified and reported by researchers (Huber, 2001; Cabrera and Cabrera, 2002; Connelly and
Kelloway, 2003; Hutchings and Michailova, 2004; Bock et al., 2005, 2006; Lin and Lee, 2006;
Michailova and Hutchings, 2006; Al-Alawi et al., 2007; Ang and Massingham, 2007; Du et al.,
2007; Hall and Goody, 2007; Lin, 2007; Makela et al., 2007; Riege, 2007; Yang, 2007). Many
of these research highlights are summarized here:
National cultural influences impact the propensity of organizational members to share
knowledge (e.g. collectivistic societies such as Japan versus individualistic cultures
such as the USA).
Connective efficacy and feedback on the quality and usefulness of knowledge donated
and received is also precursor to sharing.
Organizational structures that are less bureaucratic better support knowledge flows.
Technological issues related to system integration, support, IT training, and
understanding the capabilities and limitations of current systems.
Workforce heterogeneity/homogeneity (e.g. differences in age, ranks, experience,
education, gender, etc.) has an impact on knowledge sharing.
Intra-organizational work climate also drives knowledge sharing behaviors. Examples
here include the degree of affiliation with the organization, perceptions of job security,
innovativeness and tolerance to failure, freedom in decision-making and degree of
monitoring, interpersonal relationships (i.e. degree of familiarity between knowledge
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donor and recipient), interpersonal trust, and interpersonal communication (Serenko et

al, 2007, pp.613-614).
3. Conclusions
As David (2009) state; it seems that every month a new management technique emerges that
CEOs, hungry for new ways to improve the performance of their business, readily devour.
Companies are rightsizing, downsizing, and reengineering. They are promoting a culture of
leaders and followers. They are striving to be learning organizations and promoting team
building and self-empowerment. The options are overwhelming. But all these techniques have
one thing in common; they are seeking to discover better ways of utilizing organizational
resources (Davis, 2009). So our managers and CEO's should provide themselves with the latest
knowledge so that they could overcome to the forthcoming events. This important as stated
earlier is possible with competent employees and managing them effectively. Also managers
should note that; that organizations are operating in a vacuum is not surprising, as they do not
have any methods or tools to use that would enable them to analyze their intellectual capital
stocks and organizational learning flows. To that end, a methodology and valuation system is
required that will enable managers to identify, document, and value their knowledge
management. This will enable them to make information rich decisions when they are planning
to invest in the protection of their various intellectual properties (Davis, 2009, p.17). So they
should an IC management system in their organization to identify intellectual employees. After
identifying those staff, the organization can utilize them in appropriate way in organizational
shared vision.
Managers who do not pay attention to the IC and knowledge flow in the organization or know
themselves the only intellectual source of the organization or firm should note that, this idea
was on Fredric Taylor's time in the 19 centuries and we are in twenty first century and
knowledge in the most important factor in all managing process in this era. Peter Drucker
(1993) heralds the arrival of a new economy, referred to as the knowledge society. He claims
that in this society, knowledge is not just another resource alongside the traditional factors of
production labor, capital, and land but the only meaningful resource today.
As mentioned earlier, intellectual capital research has primarily evolved from the desires of
practitioners (Bassi and Van Buren 1998; Bontis 1996a; Darling 1996; Edvinsson and Sullivan
1996; Saint- Onge 1996). Finally, consequently, recent developments have come largely in the
form of popular press articles in business magazines and national newspapers (Davis, 2009,
p.18).
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collaborative culture , Tourism Management, Vol. 28 No. 2, pp. 530-43.
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Content Analysis of Islamic Studies Textbooks on
Religious Tolerance in Pakistan
VOL 2, N O 10
Listed in ULRICH S
Dr. Safdar Rehman Ghazi

Assistant Professor, Institute of Education and Research
University of Science and Technology Bannu
Dr. Riasat Ali
Director, Institute of Education and Research
University of Science and Technology Bannu
Dr. Muhammad Saeed Khan
Director, Institute of Education and Research
Hazara University, Haripur Campus
Muhammad Ramzan Shahzada
M. Phil Scholar (Islamic Studies), Department of Islamic Studies
Gomal University, Dera Ismail Khan
Ismail Khan
M. Phil Scholar (Education), Institute of Education and Research
University of Science & Technology, Bannu
Abstract
This study was conducted with the objective to identify the content that promotes religious
tolerance and intolerance and strength/weakness of concept of religious tolerance in Islamic
Studies textbooks. This study was delimited to the only content analysis on religious tolerance
of Islamic Studies textbook of 8th grade and Islamic Studies compulsory textbook of 9th grade
published by Textbook Board Peshawar, NWFP, Pakistan. In the light of curriculum draft on
the subject for both classes was analyzed using qualitative methods. It was concluded that
Islam is fully in favor of religious tolerance. In the curriculum draft one objective for each
grade reflects religious tolerance and these objectives are translated in the manner of infusion
in these textbooks. No behavioral objective, content or material was in support of religious
intolerance in the respective textbooks. Although these textbooks have no content regarding
intolerance however needs further review for better presentation of this issue. For peace and
tranquility of external and internal religious and ethnic crises it is recommended that religious
tolerance material should be propagated through all available sources especially educational
institutions, print and electronic media. Further research is recommended for the content
analysis of other textbooks at all levels of education in Pakistan.
Keywords: Tolerance, Intolerance, Religious Tolerance, Islamic Studies, Textbooks,
Islamic Studies
1. Introduction
The inhabitants of the world are immersed with hate and intolerance. None tolerate the other
and everyone seems to be devoid of the spirit of tolerance. The universal love of humanity is
on the verge of collapse. The world is divided into various religions and sects. Every religion
and sect considers itself the true and on the right path and labels the others as wrong. This is
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because of intolerance. If there is tolerance, there will be tranquility, sympathy, peace, stability
and justice the world will turn into global harmony. Now the burning issue is what actually
tolerance is? (Schweitzer, 2007).
According to Oxford Advanced Learners Dictionary (2005), etymologically tolerance means
(i) the act or practice of tolerating especially sympathy or indulgence for belief or practices
differing from one s own. (ii) Capacity for enduring or adapting as to poor environment.
Sarfati (2003), views that the word tolerance means bearing or putting up with someone or
something not especially liked . However, now the word has been redefined to all values, all
beliefs, all lifestyles, all truth claims are equal . Denying this make a person intolerant, and
thus turn him contemptible.
Religious tolerance means, to extend religious freedom to people of all well religious
traditions, even though you may disagree with beliefs and for/or practices (Kung, 2005).
Religious Tolerance is based on philosophy that teaches love, compassion, trust, fairness, cooperation and reverence for the human family and all life on our beautiful planet (Ham, 1998).
Religious intolerance is, when a group (a society, a religious group) specifically refuses to
tolerate practice, persons or belief on religious grounds (i.e intolerance in practice). Religious
intolerance may be purely religious (De Marco, 2008).
Freedom of religion in its Islamic context employs that non Muslims are not compelled
to convert to Islam, nor are they hindered from practicing their own religious rights or customs.
Both Muslims and Non Muslims are entitled to propagate the religion of their own, as well as
to defend it against attack or seditions provocation religious regardless as to whether such an
action is launched by their co religionists or by others (Kamali, 1997). Freedom of belief has
been consistently enunciated as a norm of the Sharia (Islamic Laws) regardless of
consideration of time and circumstances (Rehman, 1982). The citizen shall be entitled to all the
rights he shall be issued within the limits of the law, freedom of religion and belief, freedom of
worship (Maudidi, 1937). The universal Islamic declaration of human rights issued by the
Islamic council of Europe: every person has the right to freedom of conscience and worship in
accordance with religion beliefs (Azzam, 1981).
Allah addresses all the humanity with these words: Oh Human kind! We created you
from a single (pair) of male and female, and made you into nations and tribes, that ye may
know each others (not that ye may despise each other). Verily the most honoured of you in the
sight of Allah is the most righteous of you (Sura 49, Verse 13).
According to Sunan Abu-Dawud the prophet Muhammad (peace be upon Him) said, He who
ill-treat a non Muslim to subject or over burdens him will find me as his opponent .
When christen delegation of Abyssinia came to Madinah prophet Muhammad (peace be
upon him) not only allowed them to stay in the mosque but also personally took care of them
and serving them food (Nomani and Nidvi 1920). Islam granted non Muslim full rights with
Muslim in the state of Medieval to their lives, their freedom and their possessions. The Jews
had the complete freedom to practice their religion. The Jews in Madinah at the time of the
Prophet had their own school of learning, named Baith-ul-Madaris where they would recite the
Torah, worship and educate themselves (Ali, 1986). The prophet Muhammad (peace be upon
Him) promoted and practiced equity among the people irrespective of the fact that they either
believe in Islam or otherwise. He selected a non Muslim Amr Ibne Umaiyah as Ambassador to
be sent to Negus the king of Ethiopia (Arnold, 1961). The prophet successor carried the
Quranic policy of religious tolerance. When Umar Ibn ul Khitab. the second caliph, librated
Jerusalem from the Byzantine Roman occupation. Umer happened to be inside the greatest
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christen charge Jerusalem at the time for the Muslim afternoon prayer. Umer refused to
perform his prayer in the church, for fear that it might give Muslim of future generations as a
reason to confiscate the church and make it in to Islamic mosque (Qasmi, 2004).
A Coptic, christen sect in Egypt, a woman came to Umar complaining that the Muslim
governor Amru-Abn-Al-as took her house in order to add the land to an adjacent site being
used for the construction of mosque. Umar inquired into the matter and was told by Amr that
the Muslim had increased in number and needed to expand the mosque. Amr explained that he
had offered the Coptic woman a great deal of money, but when she refused, Amr left the
money in a fund for her to take it any time she wanted. Though many modern laws permit such
procedure, Umar did not accept according to Islamic principles. He ordered the Amer to stop
the expansion of the mosque and rebuild the house of christen woman, as it had been before
(Nomani, 1979).
According to Sulaman, (2000), in the present scenario Islam is the religion of tolerance,
complete and most correct code of life by introducing Islamic teaching in school. We can
create a society through religious tolerance which is the essential part of Islamic teaching and
which would ethically/morally/socially and in every field of life be better than us?
Keeping in view the need and importance of religious tolerance efforts are being made
on each and every forum. According to the Staff Report of Daily Times (2005) on Human
Rights day, the monitory body of the Federal Human Right, law and Justice Ministry arranged
various seminars in regard of religious tolerance. The National Commission for Justice and
peace (NCJP) Chairman said that people should promote interfaith harmony and peace. (NCJP)
Chairman Archbishop J. Saldanaha and Secretary General Peter Jacob said that incidents
causing religious should be checked. They cited that recent attack on missionaries and other
minorities as an example and said that human rights should be protected.
Table 1: Killing and Injured Data due to Terrorism and Sectarianism from 2001 to May
2008 (Hussain, 2008)
TERRORISM
Years
2001
2002
2003
2004
2005
2006
2007
2008
Grand Total
No. of
Incident
2
13
8
10
10
16
50
23
132
Killing
2
55
33
27
34
158
969
408
1684
SECTARIANISM
Injured
130
13
70
77
139
2704
957
4090
No. of
Incident
1
2
3
4
5
4
3
22
Killing
Injured
16
16
63
81
78
105
142
501
5
40
15
235
155
224
392
1066
Table 1 shows an increasing ratio of deaths and injuries due to terrorism and sectarianism. The
main cause of terrorism and sectarianism is perceived as religious intolerance. Now the
question arises what is the effective way or method to promote tolerance and to eliminate
intolerance. This problem can be solved by opting different ways but the most effective way is
Education. Textbooks play a vital role in teaching learning process, so the most effective way
is to incorporate the textbooks with Religious Tolerance. Therefore, it is the time need to
analyze the content of textbooks in light of religious tolerance and intolerance.
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2. Objectives of the Study
i.
ii.
iii.
To identify the content of the Islamic Studies textbooks that promotes religious
tolerance and intolerance.
To find out the strength and weakness of concept of religious tolerance in Islamic
Studies textbooks.
To propose suggestions to improve the content on religious tolerance in Islamic Studies
textbooks.
3. Delimitations of the Study

Keeping in view the availability of time and resources this study was delimited to the content
analysis on religious tolerance in Islamic Studies textbook of 8th Grade and Islamic Studies
compulsory textbook of 9th Grade published by Textbook Board Peshawar, NWFP, Pakistan.
4. Methodology
The curriculum draft of Islamic Studies 8th and 9th Grades year 2009, developed by the
Curriculum Wing Ministry of Education and the material on religious tolerance and intolerance
was analyzed in the respective textbooks published by NWFP Textbook Board Peshawar using
qualitative methods.
The major purpose of the study was to analyze the curriculum draft and contents of Islamic
Studies textbooks on religious tolerance and intolerance at 8th and 9th Grades. To achieve this
objective the researchers critically analyzed the curriculum draft and relevant material of the
concerned textbooks, the details are as under:
Table 2: Islamic Philosophy about Religious Tolerance
Quranic
Verses
20
Proponent
Hadith
15
Total
25
Quranic
Verses
-
Opponent
Hadith
-
Total
0
Table 2 shows that 100% statements are in the favor of religious tolerance which shows that
Islam fully favors and strongly supports religious tolerance.
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Table 3: Analysis of the Behavioral Objectives Statements of Religious Tolerance

Translated in 8th Grade Islamic Studies 2009, NWFP Textbook Board, Peshawar,
Pakistan
S.No
Objectives
Morality,
Rights of
People,
and Respect
for
Humanity
Unit
Topic
Islamic Worships
Good Manners
Patience and Endurance
Pilgrimage and its Internationalism/Universality

Forgiveness
Tolerance
Consistency of the Prophet of Allah
Goodness of Promise or Good Agreement
A Great Reward
Promotion of Good Social Relations
High Morality
Understanding of Goodness and the Life of the Holy
Prophet as a Role Model
Different Styles/Forms of Justice and Equity
Strategies of Preaching
Conditions for Promotion of Goodness
Fulfillment of Promise)
Perseverance
Goodness of Society/Sociality
Sincerity and Piety
Justice and Equity
The Ways of Preaching & Training

and Promotion of Goodness and
Prevention of Evils
Human Rights
National Unity
Rights of the Handicapped

Unity due to Creed and Ideologies
Unity due to Worship
Commandments of Allah
Sayings of the Holy Prophet
Table 3 shows that there is one objective related to religious tolerance which was translated in
different (11) units with different (17) topics in the 8th Grade Islamic Studies textbook.
Table 4: Analysis of the Behavioral Objectives Statements of Religious Tolerance
Translated in 9th Grade Islamic Studies 2009, NWFP Textbook Board, Peshawar,
Pakistan
S.No
1
Objectives
Morality,
Rights of People
and Respect for
Humanity
Units
Lesson No. 7
Topic
Quranic Sura Mumtahina Verse Seven & Eight
Guidance from Hadith

The Holy Quran
Love and Obedience
Islamic Tax
Patience, Gratitude and our
Collective Life
Human Rights: Regarding
Human String and Relations
Hadith: Seven, Nine, Ten, and Twenty

Quran Sura Almayda, Verse Forty Eight
End of the Prophetic hood
Importance of Islamic Tax
Patience
Important Points of Last Address of the Holy
Prophet
Table 4 shows that there is one objective in the curriculum draft developed by Curriculum
Wing, Ministry of Education related to religious tolerance which was infused in the 9th Grade
textbook of Islamic Studies in different (7) units under different (7) topics.
i.
It was concluded that Islam is fully in favor of strong support of religious tolerance.
Islam has a dominant role over other religions in regard this issue.
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ii.
iii.
iv.
In the curriculum draft for the 8th and 9th Grades, the common objective for each grade
reflects religious tolerance for respective textbooks.
From the extensive analysis of the both textbooks, it can be inferred that in each
textbook respective objective on religious tolerance is translated in the manner of
infusion.
No behavioral objective was in support of religious intolerance and no content or
material was found in favor of religious intolerance.
6. Recommendations
i.
Although textbooks of Islamic Studies have no content regarding intolerance but should
be revised and more sufficient material should be included in respect of religious
tolerance.
ii. For peace and eradication of external and internal religions and ethnic crises it is
recommended that religious tolerance material should be propagated through
educational institutions and media.
iii. Further research is recommended for the content analysis of textbooks of Islamiayat at
all levels of education.
iv.
Research studies are also recommended for other subjects; especially Pakistan/Social
Studies at all levels so that the intolerance content may totally be eliminated from the
textbooks for the peace in the society.
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References
Ali, K. (1986). A Study of Islamic History, Naeem Publishers, Al Fazal Market, Lahore. P. 42
Arnold, (1961). Thomas: The Preaching of Islam, London
Azzam, (1981). Universal Islamic Declaration, The Islamic Council of Europe
Daily Times, (2005 December 11). Govt. should Educate People about Religious Tolerance,
Staff Report, Retrieved from: www.dailytime.com
De Marco, (2008). Servalus at European Congress of Religious Study, Retrieved from:
www.religioustolerance.org.com
Ham, K. (1998). The Genesis Solution, General Re-pids, ML: Baker Book House, P. 47
Holy Quran, Sura 49, The Inner apartments, (Hujuraat) Verse 13
Hussain, Z. (2008). Frontline Pakistan: The Struggle with Militant Islam, New York: Columbia
University Press, ISBN-0231-14224-2
Kamali, H. (1997). The freedom of Expression in Islam, The Islamic Text Society, 22a Brook
lands, A venue Cambridge CB2 2DQ, United Kingdom
Kung, H. (2005). Ontario Consultants on Religious Tolerance, Paraphrased from Forum 18,
Retrieved from: www.Religioustolerance.org/ and www.forum18.org
Maudidi, A. A. (1937). The Islamic Law and Constitution, Islamic Publication, Shah Alam
Market, Lahore
Nomani, S. (1979). Al Farooq, Matha Azam ghar Almajlis-ul-Ala-Lil Saqafa, Al Kahra
Nomani, S. Nidvi, S. (1920). Sirat-ul-Nabi, Faizi Printing Press, Lahore, Jild 2, P. 37
Oxford Advanced Learners Dictionary, (2005). Oxford University Press, Seventh Edition, P.
1615
Qasmi, J.A. (2004). Maqalat-e-Qasmi, Vol 2, Islamic Research Centre, Peshawar
Rehman, A. (1982). Al Quran wa Qadaya l Insan. Beirut, Daral-Ilmi Malayin
Sarfati, J. (2003) Answer in Genesis: Excerpted from the Tyranny of Tolerance, Creation, Vol.
25, P. 6
Schweitzer, F. (2007). Religious Education, British Journal of Religious Education, Vol.29, P.
89
Suleiman, (2000). Introducing Extensive Islamic Education Teaching in School, Edinburg, U.K
Sunan Abu Dawud, Vol. 2, P. 255
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Do Selected Demographic Variables of Secondary
School Teachers Contribute to their Job Performance:
A Survey Approach?
VOL 2, N O 10
Listed in ULRICH S
Zafar Khan
Institute of Education & Research, Gomal University, D.I.Khan
Umar Ali Khan

Rahmat Ullah Shah

Javed Iqbal
Rukhsana Aziz
Northern University, Nowshera
Abstract
The present study examined the relationship of age and experience of secondary school
teachers with their self perception of job performance at secondary school level in public sector
schools of the province Khyber Pakhtunkhwa. A total of 493 senior working teachers at
secondary school level participated in the study. A valid and reliable teacher job performance
scale (TJPS-Self) was utilized for data collection. The scale is comprised of 25 items covering
the aspects of teaching skills, management skills, discipline & regularity, and interpersonal
skills. Teachers age and experience have been examined in an attempt, which one lift up
educator performance. The data were analyzed, by using correlation and regression. The
outcome of the study advocates that age does not appear as a significant variable for the
performance of secondary school teachers, while experience contribute a significant amount in
the performance of secondary school teachers.
Keywords: Age, Teaching experience, Perceptions, Job performance.
1. Introduction
Schools are the places where we educate our young ones to meet the potential needs of our
nation. Not only students get knowledge in the classroom but their behavior is also modified
according to demand and need of the society. But how effectively they are trained it depends
upon the teachers who are actually involved with their training. The task of the teacher is
central to education both within and outside the classroom; they leave deep impact on the
development and attitudes of their students. He opens up the minds of the youth, provide vistas
for serious thinking in new directions and advancement. Class room teachers have direct effect
on their students behavior as the student s get used to adapt the style and behavior of those
teachers who inspire them. (Slater, Davies, & Burgess, 2009) described that it is a common
sense that performance of teacher matter and student will achieve more from an inspirational
teacher as compare to average or poor teacher. Having a good teacher as mediocre or poor
teacher makes a big difference. It is the teacher who decides what to be taught and how to be
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taught. It is he who plans out as to what is to be placed before students and what is to
suppressed.
Teachers Job performance refers to the extent to which an individual carryout his or her duty
with reference to certain specified standard set by the school and is described as an employee
successful execution of work assigned.
According to modern concept role of teacher is to facilitate learning and create learning
environment instead of inducing knowledge in students. (Kumar, 2007)claim that defining
good teaching in straight forward manner is a difficult task, because there is a great
advancement in technology and pedagogy, teachers are supposed to be a manager of
learning . According to Jordan, 1986 as cited in (Bishay, 1996) that high level of associations
within the faculty group is significantly correlated with higher students reading scores.
(Hanif, 2004) argued that the origin which shaped the teacher performance are teaching style,
teaching quality and duties assigned to him/her, is a complex phenomenon which depends
upon various factors and it is better to study it in diverse background. Job performance is
described as an employee s successful carrying out of his/her tasks. These tasks include
preparation of their lesson plans, preparing question papers, attitude towards students,
colleagues and administrator.
According to Shanxi Research Center for Secondary Education, 1997 as cited in (Zhao, 2009)
Teacher professional performance is the Teacher s demonstration of skills or competency in
class with an emphasis on teachers ability to perform instructional tasks . Our curriculum also
stresses to make the students a patriotic and responsible citizen of the nation. The quality of
educational process and its product is unquestionably influencing by teacher job performance
(Hanif, 2004). Teachers who strongly consider these ethics are likely to manifest them in their
performance. They keep these values in mind when preparing their lesson plan. These teachers
are also more conscious of their behavior and job attitude as they desire to put good example
for their students.
One of the theories addressed by teacher selection research focusing on the pre employment
decisions of school administrators is the decrement theory of aging. According to this theory as
applied within the teacher selection context, the physical abilities of individuals decrease as
these individuals age, and older individuals are less capable than younger individuals of
performing physically in the job setting. To explore if the decrement theory of aging would
explain chronological age effects as detected by early teacher selection research (Young &
Delli, 2002) manipulated chronological age of teacher candidates and perceived physical
activity levels associated with vacant focal teacher positions and found the decrement theory of
aging to offer little explanatory power for explaining their results.
The decrement theory of aging suggests that because increased age is associated with a
deterioration of performance related abilities and motivations, and also with declining
cognitive function possibly linked with higher levels of role ambiguity, as age increases, role
ambiguity relation with performance should also increase (Shirom, Gilboa, Fried, & Cooper,
2008). However (McEvoy & Cascio, 1989) in their meta-analytic study found that job type
professional versus non professional did not moderate age performance relationship.
Several researchers, however, have discussed the inconsistencies in the literature regarding the
effects of age, gender and race on performance ratings (McEvoy & Cascio, 1989) (Waldman &
Avolio, 1986) (Kubeck, Delp, Haslett, & McDaniel, 1996) (Seymour, Angelo, & Joseph,
1983). As these researchers note, although dozens of studies have assessed variances in
subgroup evaluations, some have found significant subgroup effects while others have found
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none. In addition, the overall contribution to variance explanation in most studies which have
found significant subgroup effects has been very small. Effect sizes also generally cover with
the research design.
Much of the research conducted on this topic has employed correlational design. Consequently,
researchers have identified numerous factors that are related to teachers job. Most of these
factors can be divided in to organizational factors, individual factors and demographic factors.
(Young & Place, 1988) termed chronological age between 40-70 years as a bona fide
occupational qualification. It is expected that high levels of teacher social interaction on the job
are linked to higher job performance. Researchers often have reported on the effects of
demographic factors. For example (Kubeck, Delp, Haslett, & McDaniel, 1996) claimed that
adult personnel may have better work performance than younger counterparts. (Wai, 1994)
also established the relationship between teachers age and performance. However no such
study was carried out in our local setting. This lack of research relative to demographic factors
affecting poses the question for investigation.
(Child, 2002) opined that , teachers would have been engaged in compiling a portfolio which
consists of new experience , skill acquisition, experience, additional training and students
progress data for a period of time. It could begin with teachers having the opportunity to
review, in depth their current position. To move closer to this culture Self-appraisal by
teachers, as in need of improvement. The researcher realized that there needed to be some
instrument or strategy which enabled and empowered teachers to reflect on their job. As a
working secondary school teacher the researcher feel that no time is devoted to the business of
reflection, as a profession teachers need to assert and articulate their skills and celebrate their
success. In fact quality of education directly relates with competency and performance of its
teachers. Teaching performance is one of the central areas of concern of our education
department. A large number of different factors have an effect on the performance of teachers.
Some Personal competencies are also required to perform various tasks of the job. But this
paper only examined the relationship of age and experience of the teachers with their
performance.
2. Purpose of the study
The purpose of this study was to examine the relationship of secondary school teachers age
and experience with their job performance at secondary school level in the province of Khyber
Pakhtun Khwa (Pakistan).
3. Research questions
This study was directed by the following research questions
i.
Is there any overall relationship between teachers age and their performance at
secondary school level?
ii. Is there any overall relationship between teachers years of experience and their
performance at secondary school level?
iii.
Which demographic variable of teachers (age or experience) mostly influenced their job
performance?
4. Methods
This piece of work is a part of large scale study, employed a quantitative research design. All
the secondary school teachers currently working in the public sector secondary schools make
the population for this study.
The researcher has used education management information system (EMIS, 2009-10) annual
statistical report for government schools for selection of schools at first stage, was employed.
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Stratified random selection was used. Then at the second stage randomly secondary school
teachers were selected from the list of schools obtained at the first stage. 112 schools were
selected because of their locality and gender wise characteristics. 493 secondary school
teachers provided the data for the study.
5. Teacher job performance scale
(Zhao, 2009) defined teacher performance as a manifestation of skills or expertise in a class
with an emphasis on teachers ability to perform instructional task. In the current study, teacher
job performance was measured by teacher job performance scale (TJPS-Self).
Teacher job performance scale developed by (Hanif, 2004), was used to cover the four
important dimensions of teacher job performance. The scale consisted of 25 items and was
designed to reflect on the aspects of teaching skills, management skills, discipline & regularity,
and interpersonal skills.
The author reported the Cronbach s alpha reliability of teacher job performance scale as .94
for the whole scale and this value for four subscales varies between .80 to .92.Demographic
information was also obtained by asking the questions of age and experience of the teachers.
6. Data analysis
The independent variables were the age and experience of the teachers, while teacher
performance was treated as dependent variable. Correlation and regression analysis were
performed to examine the relationship between the independent and dependent variables. The
SPSS statistical software package, version 16, was used to analyze the data.
7. Results
A total of 493 useable questionnaires were received back with a response rate of 88%. The
gender proportions of the respondents were 309 (62.67 %) male and 184 (37.32 %) female.
With reference to locality 286 (58%) were urban teachers while 207 (42%) were rural teachers.
Majority of the teachers 269 (55 %) possessed Master degree in academic as well as Master
degree in professional, followed by 158(32 %) held master degree in academic and bachelor
degree in professional qualification.
Table 1: Age Wise Distribution of Secondary School Teachers
Age Group
No of Secondary School
Teachers
Percentage
24-32
130
26 %
33-40
176
36 %
41-48
143
29 %
49-58
44
09 %
493
100%
Total
With respect to age the above table illustrates that the age of the teachers respondents ranged
from 24 years to 58 years with a mean of 39 years.62% of the respondents belonged to the age
group under 40, indicating the a large number of teachers belonged to youngest age group.
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Table 2: Experience Wise Distribution of Secondary School Teachers

Years of
Experiences
1-8
No of Secondary School
Teachers
219
Percentage
9-16
176
36%
17-24
45
9%
44%
25-33
53
11%
Total
493
100.00
Table 2 furnishes details with regard to teaching experience, 44% of teachers had teaching
experience of less than 8 years, 36% between 9 16 years, 9% 17 24 years and 11% between
25-33 years. Overall, the range of total experience was from 1 to 33 years with a mean of 12
years.
Table 3: Relationship of Teachers Age and experience with Performance Score
Performance Score
Teachers Age
Teachers Experience
Pearson Correlation
.032
Sig. (2-tailed)
.480
Pearson Correlation
.056
Sig. (2-tailed)
.321
493
The above table reveals how the change in one variable is accompanied by the change in the
other variable in terms of magnitude. The co-efficient of correlation between teachers
experience and self perception performance score is higher (.056). The magnitude of
correlation between teachers age and self perception performance score is .032, indicating a
slight, almost negligible relationship (Mangal, 2004).
Table 4: Regression Analysis of age and experience with teacher self-perception
Job survey score
F
Teachers Age
.001
.032
.499
Teaching Experience
.003
.056
1.558
Age & Experience
.004
.064
.941
Note: p < .01
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The above table depicts the regression analysis results. It is obvious that only 1% variance in
the teacher job performance is predicted by the teacher age ( =.032, F= .499, P<.05). While
3% variance in the teacher job performance was predicted by their teaching experience
( =.056, F= 1.558, P<.01). Teacher job performance was predicted by both age and teaching
experience by up to 4% ( =.064, F= .91, P<.01).
8. Discussion
Teachers performance is among the most important issues in education enterprise. It is
commonly recognized that age and experience of the teachers are the influencing factors that
contribute to the teaching performance. So these factors deserve some attention. Age is the
most significant predictor of the performance with a high co-efficient. It consistently
contributed to the performance as rated by one self. (Wai, 1994) also found that teachers age
is positively and significantly correlated with the self concept of performance. The age metaanalysis agreed with one another with respect to the relationship between age and performance.
(Waldman & Avolio, 1986) concluded that the belief that work performance declines with the
age could not be supported. (Rhodes, 1983) identified a casual factors in the relationship
between age and work attitude and performance. (McEvoy & Cascio, 1989) reported on the
basis of 96 independent studies that were conducted to find age-performance correlation, that
age and job performance were unrelated.
(Elfers, Plecki, Knapp, Yeo, & McGowan, 2007) found in their study that the most important
factors in determining math teaching assignments are teacher qualification or experience and
majority of teachers respondent indicated that experience in a particular subject or
qualification are moderately and very important factors in determining math teaching
assignments at their schools. The most experienced teachers 25 years or more hold this view
more strongly than less experienced teachers. (Slater, Davies, & Burgess, 2009) also found that
a very low level of experience showing a negative effect in teacher effectiveness.
In their study (Seymour, Angelo, & Joseph, 1983) older employees surpassed the younger
ones, a partial correlation was found between experience and performance, which removed the
influence of age, confirmed that experience rather than age determined performance. (Sparrow
& Davies, 1988) obtained a relation between age and job performance in the form of inverted
U. however for performance measure age accounted only for a small proportion of the
variance. They found three important results. The first was that job complexity did not
moderate the effect of age and performance, in fact for all age groups performance was higher
for the more complex tasks. The second result was in regard to performance in which age
played a small role in its variance. Lastly, training played a very strong role as a mediating
variable between age and performance.
(Kubeck, Delp, Haslett, & McDaniel, 1996) argued that older workers may have better job
performance than younger workers, if performance benefits from job knowledge are gained
through experience.
In this study teacher job performance criterion was limited to measure skills such as teaching
skills, management skills, interpersonal skills and discipline & regularity, collected from the
working teachers, other criteria such as student achievement are also important. Yet the
researcher on the relationship between age and job performance consistently shows older
worker performing as well as younger worker (McEvoy & Cascio, 1989) (Waldman & Avolio,
1986).
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9. Conclusion
The presented study explored the relationship of teachers demographic variables such as age
and experience with their job performance score. In summary, although age and performance
of teachers are low correlated but age does not appear as a significant variable in explaining
their job performance. The amount of variance explained is nearly 1 %. The second
demographic variable considered in this study shows a significant prediction in the job
performance according to teachers perspective.
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References
Bishay, A. (1996). Teacher Motivation and Job Satisfaction: A Study Employing the
Experience
Sampling
Method.
Retrieved
May
11,
2010,
from
http://www.hcs.harvard.edu/~jus/0303/bishay.pdf
Child, A. J. (2002). Talking it through: a way to raise teacher performance. Management in
Education , 16 (2), pp. 11-13 available at http://mie.sagepub.com/content/16/2/11.
Elfers, A. M., Plecki, M. L., Knapp, M. S., Yeo, G. J., & McGowan, M. L. (2007). Teaching
Math in Washington s High Schools: Insights from a Survey of Teachers in High
Performing or Improving Schools. Center for strengthing the Teaching Profession,
College of Education, University of Washington.
EMIS. (2009-10). Annual Statistical Report of Government Schools. Retrieved May 28, 2010,
from Elemantry & Secondary Education Department Government of Khyber
Pakhtunkhwa:
Available
at
http://www.enwfp.com/docs/ASC%20200910%20Report.pdf
Hanif, R. (2004). Teacher stress job performance and self efficacy of women school teachers.
Islamabad: Ph.D thesis, Institute of Psychology, Quaid-i-Azam university.
Kubeck, J. E., Delp, N. D., Haslett, T. K., & McDaniel, M. A. (1996). Does Job-Related
Training Performance Decline with Age ? Psychology and Aging , 11 (1), pp. 92-107.
Kumar, A. (2007). Ensuring Teachers Accountability through Performance. New Delhi:
Mahamaya Publishing House.
Mangal, S. K. (2004). Statistics in Psychology and Education (2nd ed.). New Delhi: PrenticeHall.
McEvoy, G. M., & Cascio, W. F. (1989, Feb). Cumulative evidence of the relationship
between employee age and job performance. Journal of Applied Psychology , 74 (1),
pp. 11-17.
Rhodes, S. R. (1983, March). Age-related differences in work attitudes and behavior: A review
and conceptual analysis. Psychological Bulletin , 93 (2), pp. 328-367.
Seymour, G., Angelo, D., & Joseph, E. (1983, August). Age, experience, and performance on
speed and skill jobs in an applied setting. Journal of Applied psychology , 68 (3), pp.
469-475.
Shirom, A., Gilboa, S. S., Fried, Y., & Cooper, C. L. (2008). Gender, age and tenure as
moderators of work-related stressors' relationships with job performance: A metaanalysis. Human Relations , 61 (10), pp. 1371 1398.
Slater, H., Davies, N., & Burgess, S. (2009, January). Do Teachers matter? Measuring the
variation in teacher effectiveness in England downloaded Oct 21, 2010, from
www.bristol.ac.uk/cmpo/publications/papers/2009/wp212.pdf.
Sparrow, P. R., & Davies, D. R. (1988, September). Effects of Age, Tenure, training, and Job
Complexity on Technical Performance. Psychology and Aging , 3 (3), pp. 307-314.
Wai, C. H. (1994, september 2). An Investigation of the Relationship between Principals
leadership and Teachers self concept , Master of Education Thesis, Retrieved January
12, 2010, from http://www.fed.cuhk.edu.hk/en/cuma/94hwchow/
Waldman, D. A., & Avolio, B. J. (1986). A Meta-Analysis of Age Differences in Job
Performance. Journal of Applied Psychology , 71 (1), pp. 33-38.
Young, I. P., & Delli, D. A. (2002, December). The Validity of the Teacher Perceiver
Interview for Predicting Performance of Classroom Teachers. Educational
Administration Quarterly , 38 (5), pp. 586-612.
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Young, P., & Place, A. W. (1988). The Relationship between Age and Teaching. Journal of
Personnel Evaluation in Education , 2, pp. 43-52.
Zhao, S. (2009, June). 2+2 Program for Teachers Performance Appraisal in China. English
Language Teaching , 2 (2), pp. 60-68.
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A COMPARATVE STUDY OF THE ATTITUDES OF DIFFERENT

COMMUNITIES TOWARDS REPRODUCTIVE HEALTH
EDUCATION OF PESHAWAR AND DERA ISMAIL KHAN
Listed in ULRICH S
Rukhsana Aziz, Rahmatullah Shah, Muhammad Shah

Institute of Education and Research, Gomal University
D.I.Khan, Pakistan
Abstract
This study makes comparison between attitudes of different communities towards reproductive
health education of Peshawar and Dera Ismail khan. The population of the study consisted of
all members of different communities of Peshawar and Dera Ismail Khan. The researcher
randomly selected 150 respondents (150 rural and 150 urban) from every district. A
questionnaire was used for data collection. Mean statistic was used for data analysis. The main
findings of the study are: Most of the rural communities in Peshawar and D.I.Khan have
negative attitudes, where as some of the communities in urban areas have moderate and
positive attitude towards reproductive health education.
Keywords: Reproduction; Community; Education; Attitude; Urban; Rural
1. Introduction
A large majority of Pakistanis are unaware about reproductive health. They need proper
guidance and counseling in this area. Female are particularly kept unaware about this aspect.
On one side there are cultural constraints and on the other side there is lack of education that
keeps them unaware of such knowledge. Even in educated community a very small number of
people know very little about reproductive health education. The reason my be that there is no
curriculum of reproductive health education in educational institutions. Reproductive health
education is considered a key strategy for promoting safe sexual behavior among teenagers
(Lindberg et al, 2000). People s ability to reproduce (have children) and regulate their fertility.
A state in which women are able to go through pregnancy and child birth safely; outcome of
pregnancy is successful in terms of maternal and infant survival and well being; and couples
are able to have sexual relations free of the fear of pregnancy related contracting diseases
(Fathiullah, 1998) . Reproductive health concept became a central concern for health policymakers and international developing planner at ICPD. Reproductive health concept become
central as a result of advocacy activities in the international arena, by the feminist movement
and women s health advocates (McIntosh & Finkle, 1995). The reproductive health approach
has been adopted by all UN organizations, and is being implemented in many countries since
ICPD. Because of misfortune the underlying ideology of this approach has not been adopted,
which recognizes the realities of women s lives and advances the necessity of the
empowerment of women to achieve their reproductive rights (Zurayk, 1999).
In developing countries different international health programs including Health For All
(HFA) and Primary Health Care(PHC) did not achieve their desired targets during the last
three decades (WHO, 1998a; 1998b; 1998c;1998d;). International agencies tried their best to
improve health conditions by integrating health programs and strategies with national health
policies but did not succeed due to different factors related to health policy contents, context
and process (de Leeuw, 2000; McKee et al., 2000; Watt & Gilson, 1994).
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2. Statement of the problem

The study was to compare the attitude of different communities in Peshawar and D.I.Khan
about reproductive health education.
3. Objectives
To know the level of attitude of different communities of Peshawar and D.I.Khan.
To compare the attitudes of different communities of rural and urban towards
reproductive health education.
3. Methodology
It was a descriptive study. The population of the study constituted all the members of districts
Peshawar and Dera Ismail Khan, N.W.F.P. The researcher developed a 30 items questionnaire
for data collection. The researcher studied relevant literature for the development of the
questionnaire. Experts in social sciences were consulted for the sake of validation of the scale.
For reliability, a dry run of the scale was conducted. Cronbach Alpha was achieved as high as
0.861. Questionnaire was personally administered by the researcher at local level, and mailed
to outstation respondents. Mean was utilized as a statistical technique for data analysis.
4. Results
Table: Showing the comparison of means of the attitudes of rural and urban communities of
districts Peshawar and Dera Ismail khan
Mean Categorization:
1-1.69 =Negative Attitude
1.70-2.39 =Moderate Attitude
2.40-3.0 =Positive Attitude
Variables
Literate
Illiterate
Affected
Families
Religious
Scholar
Doctor
Labor man
Peshawar
Rural
Mean
25 1.3200
25 1.4000
25 1.2400
N
N
25
25
25
Urban
Mean
2.22
1.2200
1.6400
25
1.0400
25
1.6800
25
25
1.8000
1.5200
25
25
2.7200
2.6400
Variables
Literate
Illiterate
Affected
Families
Religious
Scholar
Doctor
Labor man
Dera Ismail Khan

N Rural
Mean
25 1.4800
25 1.4800
25 1.5600
N
25
25
25
Urban
Mean
2.6800
1.3200
2.6400
25
1.6400
25
2.5200
25
25
2.3600
1.4400
25
25
2.6000
1.6600
The above table shows that in Peshawar the attitude of literate rural, illiterate rural and urban of
both Peshawar and D.I.Khan, affected families of rural of both Peshawar and D.I.Khan, the
urban of Peshawar, religious scholars of rural of both Peshawar and D.I.Khan, religious
scholars of urban Peshawar labor men of rural of both Peshawar and D.I.Khan, and urban of
D.I.Khan, are negative towards reproductive health education. The attitude of literates of urban
Peshawar, doctors of rural of both Peshawar and D.I.Khan is moderate towards reproductive
health education. The attitude of literate urban D.I.Khan, affected families and religious
scholars of urban D.I.Khan, doctors of urban of both Peshawar and D.I.Khan, and the labor
men of urban D.I.Khan have positive attitude towards reproductive health education.
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5. Conclusion
The rural communities in D.I.Khan and Peshawar were mostly negative attitudes towards
reproductive health education. The attitudes of doctors in rural and urban communities were
moderate. The attitude of urban communities in Peshawar and D.I.Khan were positive towards
reproductive health education.
6. Discussion
Reproductive health education is a very important area of education But in Pakistan due
importance has not been given to this area. In rural areas of Peshawar and Dera Ismail Khan,
the attitude towards reproductive health education is mostly negative. The reason may be lack
of awareness and the influence of religious scholars, who are also unaware about the
consequences and the actual teaching of Islam about reproductive health. In rural areas of
Peshawar and Dera Ismail Khan affected families have mostly negative attitudes because this
seem to be kept unaware about reproductive health. The cultural constraints do not allow these
peoples even to talk about reproductive health. The illiterates in both rural and urban areas
have almost negative attitudes because they have neither discussed the consequences of the
problem nor they have read or gone through such kind of literature. In this research study,
doctors and educated people have positive and moderate attitude, because they are well aware
about the significance of reproductive health education. They know the far-flung effects of this
type of education on family and children. The results of the study indicate that there is a need
of proper awareness about reproductive health education at every level. The researcher has
tried to recommend the possible efforts to be done for awareness of the people about
reproductive health education. The researcher has also suggested some problems to be solved
by the future researchers in this regard. The parents have to take a lot of care as the parents and
in families the children have to face a lot of problems leading towards miserable life.
Therefore, there is a need to take necessary steps regarding awareness about reproductive
health education in masses. In some countries like Iran the gap between rural and urban areas
regarding reproductive health is minimized as Mehryar (2007) described that the long standing
urban rural gap in contraceptive prevalence rates has been reduced to about 10 percent, which is
mainly the result of better-educated urban couples continued practice of withdrawal. The
religious scholars may have a great influence on reproductive health education but unfortunately
they have negative attitudes towards this education. Saleem & Bobak (2005) indicated that
women's decision autonomy is significantly associated with contraceptive use but it does not
appear to mediate the link between woman's education and contraception. There is no
provision of the contents of reproductive health education at any level in educational ladder.
Therefore, even the literates have no proper awareness about reproductive health. In this research
study even the literates from the rural areas have negative attitudes about reproductive health
education..
7. Recommendations
The study may be replicated to other districts in N.W.F.P.
Electronic and print media may be mobilized for educating people on reproductive health.
Reproductive health education may be given through non government organizations.
Reproductive health education as a subject may be introduced in schools, colleges and universities.
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References
De Leeuw, E. (2000). Beyond community action: Communication arrangement and policy net
works. Commentary. In Poland, B.D, Geneva, L.W and Root man, (11th ed). Setting
for health promotion: Linking Theory and Practice. Thousand oaks .Sage. 287300.Fathalla, M. (1998). Issues in reproductive health: Health and being a woman.
Export Group Meeting on Women and Health: Mainstreaming the Gender perspective
in to the Health Sector, Tunisia, New York:
Mehryar, Ahmad-Nia, H. A., Shirin, kazemipour, & Shala. (2007). Reproductive health in Iran:
Pragmatic achievements, unmet needs, and ethical challenges in a theocratic system.
Studies in Family Planning, 38(4), 352-361.
McKee, M., Zwi, A., koupilova, I., Sethi, D., & Leon, D. (2000). Health policy-making in
Central and Eastern Europe: Lesson from the Inaction on injuries. Health policy and
Planning, 15(3), 262-269.
Macintosh, A., & Finkle, J. (1995). The Cairo conference on population and deveploment: A
new paradigm. Population and Development Review, 21 (2), 223-60.
Saleem, S., & Bobak, M. (2006). Women's autonomy, education and contraception use in
Pakistan: A national study. Reproductive Health, 2(8), 1742-4755
Un Lindberg, L. D., Ku, L., & Sonenstien, F. (2000). Adolescents repots of reproductive health
education, 1988 and 1995. Family Planning Perspectives, 32, 220-224.
WHO. (1998a). The health for all policy for the WHO European region:21 targets for the 21st
century. Copenhagen. WHO regional office for Europe.
WHO. (1998b). Health for all in the 21st century.Geneva.World Health Organization.
WHO .(1998c). Good governess for health. Geneva.World Health Organization.
WHO. (1998d). Health for all renewal: building sustainable health system-from policy to
action. Geneva. World Health Organization.
Walt., & Gilson, L.(1994). Reforming the health sector in developing countries: The central
role of policy Analysis. Health Policy and Planning. 9(4), 353-370.
Zurayk, H. (1999) Reproductive health and population policy: a review and a look ahead, in
A.I.Mundigo(ed.), Reproductive health : program and policy changes Post-Cairo,
Belgium: International union for the scientific study of population.
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Assessing the characteristics of Work-related Stress
in Public Sector Organizations
VOL 2, N O 10
Listed in ULRICH S
Ashfaq Ahmad
Independent Researcher, Islamabad
Muhammad Zia-ur-Rehman
Phd Scholar, Faculty member, National University of Modern Languages Islamabad
Prof. Majed Rashid
Professor of Management Sciences, Islamabad,
Abstract
In relation to work related environment, stress is extensively discussed around the globe. Public
sector work environment in Pakistan is also no exception to this discussion. The study was
conducted to analyze whether the work environment of Pakistan Audit Department was
significantly stress-provoking. Quantitative results were obtained through questionnaire survey. By
adopting non-probability convenience sampling technique, the population was divided into three
strata and at least 20% of each stratum was taken as sample (n=93). Though overall results did not
prove a significant relationship between work environment and stress, yet certain inconsistent
associations were observed. Women were found more vulnerable to stress than men in certain
respects and work environment did have some stress-related health outcomes for the employees.
Keywords: Assessing, Characteristics, Work-related Stress, Public Sector Organizations
1. Introduction
Stress, which is extensively discussed around the globe in relation to work environment, is a
primitive notion and finds its origin in the Latin term stringere , which means to draw tight
(Skeat, 1958). The Latin word compares the person suffering from stress with the Stone Age
man facing a pack of wolves and feeling tied up in knots . So stress can be taken as a normal
reaction to an abnormal situation in which the person reacts either by fighting or by fleeing
from danger. This idea of fight or flight was the first important explanation of stress by an
American physiologist who introduced the theory of the fight-or-flight response to explain
the reaction of the animals to external threats (Cannon, 1915). He also coined the term
homeostasis to elucidate the idea of the balance in the organic system which was disturbed
by stress, leading to malfunctioning of the body (Cannon, 1935). The modern perception of
stress in the workplace may be attributed to Dr. Hans Selye, who used stress to refer to the
general breakdown of the body in response to the wear and tear of modern life (Selye, 1950).
Since 1950 s, there has been massive research on work-related stress . The researchers in the
West have proved with empirical evidence that disagreeable work environment, lack of career
development, weak interpersonal relationships of employees at work, role ambiguity and role
conflict and workload are major stressors of work environment, resulting in undue pressures
and demands for the employees and, thus, leading them to have stress-related health outcomes.
In view of the seriousness of the problem, it is important to explore the construct of workrelated stress with reference to the Pakistani work environment. Pakistan Audit Department, as
one of the major employers in the public sector in Pakistan, needs to find out whether the work
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environment in its offices is significantly related to stress and whether the abovementioned
characteristics of stress prove as stressful for its employees as they do for the workers in the
West. Employees suffering from stress have negative health outcomes that affect their
performance. A well-timed identification and resolution of the problem of work stress in the
work environment may immensely improve the performance of the employees and increase
their productivity.
The main objectives and aims of the research were to determine the significance of relationship
between work environment in Pakistan Audit Department and variables of research, to
investigate stress-related health outcomes for the employees of Pakistan Audit Department and
to examine the vulnerability of working women to stress as compared to men.
During the past half a century, various researchers have approached stress differently.
Symonds (1947) looked upon stress as a negative environmental characteristic, having the
potential to cause a serious harm to the physical health of the individual. During his research
on the psychosocial disorders in the Royal Air Force flying personnel, he concluded,
Stress...is a set of causes not a set of symptoms. Conversely, Selye (1950 &1956) defined
stress in terms of non-specific changes within the biologic system that occur when
challenged by noxious stimuli. He explained that the physiological response was divided into
three stages: the alarm stage, the resistance stage and the exhaustion stage. Repeated and
intense physiological response might cause wear and tear in the body, which he called
diseases of adaptation (Selye, 1956). The most recent approach to study stress was the
psychosocial approach that conceptualized stress in terms of the dynamic interaction between
the person and work environment. The Demand-Control theory of Karasek (1979), the PersonEnvironment Fit theory of French, Caplan & van Harrison (1982) and Effort-Reward
Imbalance theory of Siegrist et al. (2004) are conspicuous instances of this approach. With the
advent of occupational psychology in the 1960 s, the researchers started trying to explore the
impact of the characteristics of work environment on the employees health and performance
(Cox, Griffiths & Rial Gonzalez, 2000). During the last couple of decades, the researchers have
almost arrived at a reasonable consensus regarding the characteristics of work-related stress,
which are experienced by the employees at work and which have the potential to harm them
physically, socially and even psychologically (Baker, 1985; Marmot & Madge, 1987; Karasek
& Theorell, 1990; Kasl, 1992; Warr, 1992; Cox & Cox, 1993; Johnson, 1996; Cox, Griffiths &
Rial Gonzalez, 2000; Lallukka, 2008). The characteristics of work that may prove stressful for
the employees include work environment, career development, interpersonal employee
relationships, employee roles and abnormal workload. The stressful characteristics of work
have negative health outcomes for the employees (Lallukka et al., 2004, 2005 & 2008).
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3. Disagreeable Work Environment

The simplest interpretation of disagreeable work environment may be the boring, repetitive and
uninteresting work, which does not offer any opportunity to the employees for challenge,
thinking or participation. Kornhauser (1965) found in his study that the exposure to
monotonous work resulted in boredom, anxiety, depression, resentment and poor psychological
health. French and Caplan (1970) suggested that lack of participation in decision-making led
the employees to a feeling of loss of self-esteem. More recently, Terry and Jimmieson found in
a study (1999) that lack control over work resulted in work stress, associated with anxiety,
depression, apathy and exhaustion, leading to cardiovascular diseases. Smith (1997) proved
with empirical evidence that boring work environment of employees assigned with the job of
using video display terminals (VDTs) was so stressful that it was putting them into mental and
physical ill health. A critical factor that has lately made the work environment stressful for the
employees is the increased use of information and communication technology (ICT) in the
changing employment patterns. Meta-analytical studies by Windel & Zimolong (1997) and
Cox, Griffiths & Rial Gonzalez (2000) identified this changing work environment as the new
hazard for the employees.
4. Lack of Career Development

It was established long ago that lack of expected career development was associated with
work-related stress. Back in 1977, Marshall found in a study that the major source of work
stress was lack of personal career development in the form of job insecurity, fear of
redundancy and lack of prospects of promotion. In a study conducted in Japan on the fear of
redundancy as a source of stress (Liu, et al., 1997), it was confirmed that the anticipation of job
loss was stress provoking and was responsible for certain preexisting illnesses. Subsequently,
Reissman, Orris, Lacey, & Hartman (1999) studied work stress with reference to downsizing
and found that the uncertainties as a result of the rumors of dismissal drastically reduced
worker productivity and dented the spirit of teamwork. Similarly, Maurier & Northcott found
in their study (2000) that the threat of job insecurity was closely associated with depression.
There are other studies that have validated these findings. Brewer & McMahan-Landers (2003)
confirmed the strong negative relationship between job satisfaction and job stress; Siegrist, et
al. (2004) established that effort-reward imbalance at work was the major source of workrelated stress; and, Von Vultee & Arnetz (2004) observed that lack of career development was
more stress provoking for female than for male employees.
5. Weak Interpersonal Relationships of Employees at Work

Good interpersonal relationships of employees at work are indispensable not only for the
betterment of the individual employees but also for the overall organizational health (Cooper,
1981). The employees may have relationships with superiors, subordinates and colleagues
(Sauter, Murphy & Hurrell, 1992). If these relationships do not provide support to the
employees, they get exposed to work-related stress (Cohen & Willis, 1985). There are a
number of studies in support of this phenomenon. Davidson and Cooper (1981) found close
relationship of low interpersonal support at work with stress. The findings of a study by Weiss
(1983) suggested that lack of support at work was responsible for producing higher level of
stress in the managers. A survey conducted by the Ministry of Labour in Japan (1987)
revealed, 52% of the women interviewed had experienced anxiety and stress, the main cause
being unsatisfactory interpersonal relations at work (61%) . Studies by Branthwaite & Ross
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(1988) and Warr (1992) discovered that low interpersonal support at work led the employees to
fall a prey to anxiety, emotional exhaustion, job tension and low job satisfaction. In a study,
Jones, Hodgson, Clegg & Eliot (1998) discovered that the employees reporting stress-related
illnesses were 6 times more likely to report lack of support from people in charge at work
than the general working population. Certain studies (McDonald, 1989; Leather et al., 2003)
have suggested that distracting working conditions (e.g. exposure to noise) result in weedy and
stressful interpersonal relationships. Cropanzano, Howes, Grandey & Toth (1997), Randall,
Cropanzano, Bormann & Birjulin (1999) and Cropanzano & Li (2006) found in different
studies how perceived and damaging politics in organizations destroyed interpersonal
relationships at work, thus leading the employees to have stress responses.
6. Role Ambiguity and Role Conflict
There are two dimensions of employees roles in the organization that may be stress provoking.
Role ambiguity indicates that an employee has insufficient information about his or her role
and role conflict occurs when an employee has to perform certain roles, which are
contradictory to each other (Cox, Griffiths & Rial Gonzalez, 2000). The recognition that role
in organization is a potential psychosocial hazard can be attributed to the work of Kahn and
his colleagues (Kahn et al., 1964). Subsequently, French & Caplan (1970), Kahn (1973) and
Margolis & Kroes (1974) identified stress outcomes of role ambiguity and role conflict. A little
later, French, Caplan, & van Harrison (1982) concluded that role ambiguity and role conflict,
were the most powerful predictors of psychological health. These findings were confirmed
by Jackson & Schuler (1985). Cooper & Smith (1986) and Bhalla, Jones & Flynn (1991)
concluded in their studies that white-collar workers were more prone to the role conflict than
were manual workers. In a longitudinal study conducted by Ingersoll (1999), various patientfocused redesign models were initiated in a number of hospitals during the period of 10 years
with the objective to see the effect of change of roles upon the midlevel nurse managers. The
researcher found that the nurse managers had to struggle hard to keep up with the demands of
the change in their roles. They felt frustrated and stressed at their perceived inability to handle
the situation and to meet the multiple requirements of the colleagues as well as the patients.
Researchers believe that women are more susceptible than men to the stress and anxiety caused
by role ambiguity and role conflict. Blau (1998) believes that women have increasingly come
out of their homes and entered the workforce during the last three decades of the twentieth
century. Brezinka & Kittel (1995), Lai (1995), Barnett (2004) and Ylikoski et al. (2006) have
arrived at the same conclusion in their different studies. They discovered that women faced
more demanding situation than men owing to their multiple roles at home and at work. Thus,
the working conditions had more serious health outcomes for women than for men.
7. Abnormal Workload & Work Schedule
Abnormal workload implies strenuous working conditions which result in work fatigue,
exhaustion and burnout (Maslach, Schaufeli & Leiter, 2001). Abnormal work schedule stands
for lengthy and sustained working hours, which are highly irritating and stressful and can result
in sleep loss and fatigue (Ryman, Naitoh & Englund, 1989). Some employees waste their
constructive leisure time due to the spill over effects of their work, which takes them
to a
point where life is relatively empty and only half meaningful (Kornhauser, 1965). Abnormal
workload is perhaps one of the earliest characteristics of work, which received the attention of
the researchers (Frankenhauser, 1975 & Stewart, 1976) as closely related to work stress.
Eskelinen and his colleagues (1991) found in their study a strong positive relation between
workload and the level of stress symptoms. Similarly, Schattner & Coman (1998) conducted a
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study to find out the work-related stressors of Australian metropolitan general practitioners
(GPs). The findings of the study suggested that time pressures constituted the most frequent
and severe work-related stressor. The effect was so disastrous that 50% of the practitioners
were considering leaving their present workplace and 53% were even thinking of simply
abandoning the general practice. A similar study was conducted by Simoens, Scott, & Sibbald
(2002) to get the views of the Scottish general practitioners on work-related stress and their
intentions to quit the job. The study concluded that the most critical sources of job stress were
abnormal workloads and insufficient time to do justice to the job. Another study of the same
nature was conducted in the Norwegian food and beverage industry (Hammer et al., 2004).
This study, too, like the previous one, confirmed that work-to-family conflict, resulting from
abnormal work demands, was significantly and positively related to job stress and health
symptoms.
8. Health Outcomes of Stress
There is enormous body of research literature that focuses on the stress-related health outcomes
for the employees. The researchers have proved the negative impact of various characteristics
of stress on the physical and mental health of the employees. The findings of a lot of studies
(Boggild and Knutsson, 1999; Peter & Siegrist, 2000; Lundberg, 2002; Ferrie et al., 2005;
Roelen et al., 2007; Lallukka et al., 2004, 2005, 2008 & Lallukka, 2008) confirmed that work
stress in one way or the other not only caused coronary heart diseases (CHDs), cardiovascular
diseases (CVDs) and somatic tensions but also resulted in psychosomatic health problems
including depression, anxiety, chronic fatigue.
The construct of work-related stress was explored through questionnaire. In order to collect
secondary data, a qualitative content-analysis in the form of extensive literature review was
conducted. Later, unstructured interviews with the respondents were conducted to identify the
nature of stressors from the viewpoint of the probable respondents. These initial efforts were
helpful in properly designing the questionnaire for collecting primary data. The questionnaire
was divided into two sections: first, for collecting demographic information and second, for
collecting feedback of the respondents on the variables of research. The demographic section
was based on tick-boxes, comprising of six questions on gender, age, education, experience,
department and management position in Pakistan Audit Department. The second section
consisted of six segments in accordance with six variables of research-work environment,
career development, interpersonal relationships, employee roles, work load and health
outcomes of stress. In each segment, certain questions were included on different factors of
stress relating to respective variable. A four-item scale was included to get the response on the
first variable. Similarly, second and third variables were measured by 7-item and 9-item scales
respectively. Each of the last three variables was measured by a 2-item scale. These factors
included in these segments were inspired by the findings of previous researches included in
literature review. The reliability and validity of the questionnaire was checked in unstructured
interviews and, then, it was distributed among target group of respondents.
The whole population was divided into three strata by using non-probability convenience
sampling technique. The research was conducted within the geographical boundaries of
Lahore. For the purpose of research, the relevant strength of Audit Offices, Accounts Offices
and R&D Department of Pakistan Audit Department located in Lahore was approximately 200,
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175 and 125 respectively, and 20% of each population was taken as taken as expected
respondents. So the sample became 100, of which 40 were taken from Audit Offices, 35 from
Accounts Offices and 25 from R&D Department. In this way, an effort was made to make the
sample truly representative of the whole population.
Primary data was collected at five responses based on Likert Scale (Likert, 1932) through
close-ended, self-constructed questionnaire. The questionnaires were distributed among the
respondents personally and they were given a few days time to fill in the same. The
questionnaires were collected by hand after they were filled in. Overall, 100 questionnaires
were distributed and the researcher was able to retrieve 93 questionnaires. At the time of
delivering questionnaires, the researcher explained to the respondents the purpose of the
research, the nature of topic and issues involved in it so that the respondents fully understood
the questions before offering their response. As the questionnaires were personally delivered
and collected by the researcher and fully understood by the respondents, the retrieval rate was
sufficiently high at 93. Resultantly 93% of the distributed questionnaires were analyzed.
The results of the study need to be taken in the perspective of its limitations. The questionnaire
technique employed in the study was not free from subjectivity in the respondents. As the
study was not longitudinal, the reactions of the respondents may have changed with the
passage of time. The study was conducted within the geographical boundaries of various
offices of Pakistan Audit Department located only in Lahore only.
10. Research Analysis
The survey respondents were predominantly males, contributing 77.4% to the population. The
population was evenly distributed among age groups, ranging from early 30s to late 50s. The
education level of most of the respondents (67.7%) was post graduate or above. A majority of the
respondents (53.70%) enjoyed a sufficiently long stay in service, ranging from 15 years to more
than 21 years. Of the respondents, 70% were rendering Audit or Accounts service, which is the
major function of Pakistan Audit Department. Taken together, 74.2% held management positions
at senior, middle or lower hierarchical levels. Since the respondents belonged to Pakistan Audit
Department, this demographic information was also representative of the Civil Service of
Pakistan.
11. Disagreeable Work Environment
Descriptive results showed that the first variable of disagreement work environment was
unrelated to stress. The variable was measured by a 4-item scale. Out of four factors, boring
work, lack of challenge in work and continuous computer work were rejected as work stressors
by the respondents with cumulative percentages of 55.9, 49.5 and 83.9 respectively. However,
43.0% of the respondents agreed and 39.8% strongly agreed that lack of control over work was
stressful to them, thus proving this factor a potential stressor of work environment with an
overriding cumulative percentage of 82.8. In terms of mean values, the first three factors were
scored high by the respondents (2.92 4.12) that suggested that these were not meaningfully
related to stress. The low mean score of 1.96 in the last factor indicated its strong relationship
with stress.
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11. Lack of Career Development

On the analysis of data, lack of career development was found most significantly related
to stress. Out of the seven factors included in this variable, five were declared potential
stressors by the respondents. The first two factors -job insecurity and fear of joblessness were rejected by population with cumulative percentages of 92.5 and 81.8 respectively.
This was because the respondents enjoyed permanent civil service. A major portion of the
population with a cumulative percentage of 88.1 strongly agreed and agreed that
defective evaluation system was a cause of stress. Similarly, lack of promotion prospects
and lack of opportunities were regarded as stressful by 72.1% of the population.
Nevertheless, the factors, which were identified by a huge majority of the respondents as
most stressful were meagre remuneration (97.9%) and lack of special incentives (97.8%).
In mean values, the last two were scored the lowest by the respondents (1.2 and 1.61),
suggesting their strong association with stress.
12. Weak Interpersonal Relationships of Employees
About interpersonal relationships of employees at work, the feedback of the respondents
was mixed and this variable was found weakly related to stress. This variable was
measured by a 9-item scale but most of these factors were not proved stressful. For
instance, lack of communication was rejected by 58.1% of the population as a cause of
stress. Similarly, the respondents also disapproved insubordination (57%), absenteeism
(53.7%), gossips of colleagues (66.6%), nuisance of telephone (75.3%) and
isolation/discrimination (69.9%). Only three factors lack of support at work, personality
conflicts and boss phobia were identified as stressful by the respondents. Those who
strongly agreed and agreed to the stressful nature of these three factors collectively made
up 77.4%, 82.8% and 77.3% of the total population respectively. These results were also
endorsed by the mean values scored by the respondents in respect of these factors. Only
the last three factors were scored low by the respondents (1.85 to 2.25) while, in all the
remaining cases, the mean scores ranged from 3.10 to 3.81, suggesting that these factors
were unrelated to stress.
13. Role Ambiguity & Role Conflict
The variable of employee roles was also found unrelated to stress. A majority of
respondents disagreed and strongly disagreed with percentages of 61.3 and 35.5
respectively that role ambiguity was related to stress. However, 62.2% of the population
endorsed the relationship of role conflict with stress. This situation is characteristic of the
public sector in which there are no role ambiguities because of detailed job descriptions
but there are role conflicts as certain employees have to perform additional roles. In mean
values, role ambiguity was scored high at 4.29 while role conflict was scored low at 2.49.
14. Abnormal Workload & Work Schedule
This variable was found moderately related to stress. This variable was measured by 2item scale. 58.1% of the respondents believed that they had abnormal workload and
54.9% accepted that they suffered from loss of leisure. The mean scores in both these
cases (2.73 & 2.76) also suggested their weak relationship with stress.
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15. Health Outcomes of Stress

The last variable was found significantly related to stress. A large number of respondents
(53.8%) believed that stress had negatively impacted their physical health. Still, larger
number of respondents (78.5%) admitted having mental outcomes of stress.
In overall results, the hypothesis that the work environment in Pakistan Audit Department
was significantly related to stress could not be validated. There were six variables of
research under study. Of these, disagreeable work environment and employee roles were
scored highest by the respondents in mean values (3.03 and 3.39), suggesting these were
found unrelated to stress. Weak interpersonal relationships and abnormal workload, with
comparatively high mean scores of 2.95 and 2.74, were modestly related to stress. Lack
of career development was the only variable, which was scored lowest at 2.50 and, thus,
was found by the respondents significantly associated with stress. The respondents also
admitted that they did have stress-related health outcomes as they scored this variable at
2.55, which was the second lowest mean value. Taken together, 52.7% of the respondents
found public sector work environment related to stress. In terms of overall mean value,
the hypothesis was scored relatively high by the respondents at 2.86, which suggested
only a weak relationship of work environment with stress. As for differences between
males and females, data suggested that lack of supervisory support, which was
moderately stressful for males with a mean score of 2.35, was extremely stressful for
women with a low mean score of 1.90. Similarly, personality conflicts were not as
troublesome for men (1.93) as for women (1.57). Most strikingly, the factor of isolation
and discrimination, which was scored high by men at 4.21, was scored low by women at
2.43. It suggested that isolation and discrimination was unrelated to stress for men, but
for women, it was strongly related to work stress.
16. Conclusion & Recommendations
The results of the study show by and large a weak and modest relationship between the
work environment in Pakistan Audit Department and work-related stress. In respect to the
variables of research, the researchers found inconsistent associations between work
environment and stress. Key findings are about of the variables of research, disagreeable
work environment and employee roles are unrelated to stress, weak interpersonal
relationships and abnormal workload are modestly related while lack of career
development and health outcomes are meaningfully related to stress.
The employees in Pakistan Audit Department are generally satisfied with the work
environment. Though they are not troubled by monotony, lack of challenge and use of
computers in their work, yet majority of them believe that they lack control over their
work, which puts them into a lot of stress. The employees are mostly dissatisfied with the
system of career development. Even if they are pleased with the level of job security,
they feel stressed at inappropriate performance evaluation system, lack of sufficient
promotion prospects and lack of opportunities as well as incentives. The most potential
stressor for the employees in Pakistan Audit Department is scanty remuneration. The
employees strongly feel that what they are getting is far less than that in the private
sector. There are generally good interpersonal relationships of employees in the Pakistan
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Audit Department. Nevertheless, there are some personality conflicts, which are stressful
for employees. The employees are not normally supported by their supervisory staff and,
hence, most of the employees suffer from boss phobia. The employee roles usually are
not stressful in the work environment. There are no role ambiguities found in the
employees of Pakistan Audit Department, perhaps because job descriptions are duly laid
down in the public sector. However, some employees suffer from role conflicts.
Abnormal workload and work schedule does not generally produce much stress in the
work environment of Pakistan Audit Department. The employees complaining of
overwork and loss of leisure due to work are probably assigned special tasks. The work
environment in Pakistan Audit Department does have some stress-related health
outcomes, mainly caused by various factors of lack of career development. A strong
negative impact of stress is observed on the mental health of the employees, leading to
such problems as loss of temper and frustration, but no major impact is seen on their
physical health. In the work environment in Pakistan Audit Department, the female
employees are more vulnerable to stress than their male colleagues. The factors such as
lack of support and role conflicts, which do not trouble men, affect the women severely
because they have to perform multiple roles at home and at work. As the work
environment is male chauvinistic, the women cannot help feeling isolated and
discriminated. Consequently, they fall an easy victim to stressful personality conflicts.
The researchers projected the following recommendations;
There is a need to create awareness regarding stress at the senior management level for
taking remedial measures to address the problem, which is very much there. The
employees may be allowed to exercise some control over their work, which may ensure
their participation in work. The system of compensation may be overhauled and the
employees may be paid according to their skill and expertise and not through a Basic Pay
Scale system. The performance evaluation system may be reconstructed on scientific
lines, envisaging special incentives for high achievers to uproot job dissatisfaction. A
new system of career development needs to be launched. Employees may be trained
properly to perform their jobs. This will ensure supervisory support at work because
unless an employee knows his job, he cannot offer support to his subordinates.
Appointments and postings of employees may be made on the basis of their skill,
knowledge and expertise and not on personal likes and dislikes. Focus on work may be
improved, discouraging personality conflicts and gossips. The bureaucratic and rigid
formality may be replaced with familiarity and information communication so as to
remedy boss phobia. The male employees need to change their attitude towards women
by avoiding dragging them into personality conflicts. They need to provide women
support at work to reduce their sense of isolation and discrimination. Women must get
due respect for being in a demanding situation due to their multiple roles at home and at
work. In view of differences between the responses of males and females, a focused study
on stress with particular reference to women is also recommended to fully understand the
nature of work stressors for working women. As no clear patterns have been identified in
the current research, the replication of the current study with a larger sample size is
suggested to arrive at definitive results.
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Relationship between Leadership Styles and Organizational Commitment
Listed in ULRICH S
amongst Medical Representatives of National and Multinational

Pharmaceuticals Companies, Pakistan (An Empirical Study)
Nazim Ali
Lecturer, Department of Management Sciences, Abasyn University, Peshawar
Muhammad Atiq Ali Babar
Lecturer, Department of Management Sciences, Abasyn University, Peshawar
Sudhair Abbas Bangash
Lecturer, Department of Pharmacy, Abasyn University, Peshawar
Abstract
This study comprehensively evaluated the link between leadership styles and
organizational commitment. Data was collected from 277 medical representatives of
national and multinational pharmaceuticals companies through two time tested
questionnaires, The Multifactor Leadership Questionnaire (MLQ-5x/Short Form) (Bass
& Avolio, 1995) and Organizational Commitment Questionnaire (Porter et al., 1974).
Statistical Package for Social Sciences (SPSS 15 Version) was used for data operation.
Pearson correlation revealed a significant correlation between transformational leadership
style and organizational commitment and transactional leadership style and
organizational commitment. Multiple Regression showed the transactional leadership had
23% impact on organizational commitment and transformational leadership had 46%
impact on organizational commitment.
Key words: Pharmaceuticals companies; medical representatives; leadership styles;
organizational commitment; Pakistan
1. Introduction
Transactional leadership and transformational leadership have received much attention
many years ago (Bass, 1988; 1990; Bass and Avolio, 1993; Hartog, et al., 1997).
Leadership styles, transformational and transactional, are associated with many
organizational outcomes such as satisfaction, group performance, organizational
performance, and commitment (Kirkpatrick and Locke, 1996). In different cultures and
settings, these results have been validated (Al-Dmour and Awamleh, 2002). As
organizational commitment is positively correlated with work efforts, performance and
negatively correlated with absenteeism and turnover (Luchak & Gellatly, 2007; Allen &
Meyer, 1996; Par and Tremblay, 2007), it is imperative to study these leadership styles
and their impact on organizational commitment. As there is no study conducted to
investigate the leadership styles and their impact on organizational commitment amongst
the medical representatives of national and multinational companies of Pakistan, this
study will do.
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Burns (1978) identified two types of leadership, transformational leadership and
transactional leadership. Transformational leadership occurs when one or more persons
engage with others in such a way that the leaders and followers raise one another to
higher levels of motivation and morality (Burns, 1978, p. 20). According to Marzano et
al., (2005), fours I s are important in the transformational development process.
i.
ii.
iii.
iv.
Idealized Influence
Inspirational Motivation
Intellectual Stimulation and
Individual Consideration
Idealized influence is also known as charisma. Leaders are admired, respected, and
trusted. Followers identify with and want to emulate their leaders (Avolio & Bass,
2004). Bass and Avolio (1994) described inspirational motivation as: Transformational
leaders behave in ways that motivate and inspire those around them by providing
meaning and challenge to their followers work....The leaders creates clearly
communicated expectations that followers want to meet and also demonstrates
commitment to goals and shared visions. Yukl (2006) described intellectual stimulation
as behavior that arouses strong follower emotions and identification with the leader .
Bass and Avolio (1994) describe individual consideration as: Transformational leaders
pay special attention to each individual s needs for achievement and growth by acting as
a coach or mentor. Followers and colleagues are developed to successively higher levels
of potential....New learning opportunities are created along with a supportive climate.
Individual differences in terms of needs and desires are recognized. The leader s behavior
demonstrates acceptance of individual differences.
According to Burns (1978), Transactional leadership occurs when one person takes the
initiative in making contact with others for the purpose of an exchange of valued things .
According to Bass and Riggio (2006), Transactional leaders are those who lead through
social exchange . Yukl (2006) described contingent reward as
clarification of the
work required to obtain rewards and the use of incentives and contingent rewards to
influence behavior . Management-by-exception focuses on leadership as a negative
behavior. This leadership behavior is when the leader concentrates on the subordinates
deviances, mistakes, and errors and then taking corrective actions as quickly as possible
when they occur (Avolio & Bass, 2004).
3. Relationship between Leadership Styles and Organizational Commitment
A plethora of research can be found on the relationship between leadership styles and
organizational commitment. For examples, Ibrahim et al (2010) in their Paper Entitled
Leadership Style and Organizational Commitment: Test of a Theory in Turkish Banking
Sector found that there was a significant relationship between leadership stylestransactional and transformational- and organizational commitment of the employees.
Similarly, Charles and Katherine (2007) in their study titled The effect of transactional
and transformational leadership styles on the organizational commitment and job
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satisfaction of customer contact personnel investigated a significant correlation between

leadership styles and organizational commitment. Keeping in view the above literature
review, it is hypothesized that:
H1:
There is a significant relationship between transformational leadership
style and organizational commitment.
H2:
There is a significant relationship between transactional leadership style
and organizational commitment
4. Methodology
4.1 Data collection procedure
Sample of the present study consists of national and multinational pharmaceuticals
companies in Pakistan. Four hundreds (400) questionnaires along with a covering letter
that explained the purpose of the study were administered to medical representatives of
national and multinational companies. Two hundreds and eighty two (282) questionnaires
indicating a return rate of 70.50% were returned from them. Only five (5) questionnaires
were disposed off because they contained incomplete information.
4.2 Multifactor Leadership Questionnaire
Transformational and transactional leadership styles were measured by using The
Multifactor Leadership Questionnaire (MLQ-5x/Short Form) (Bass & Avolio, 1995).
Transformational leadership style was measured by Four (4) subscales which are
Charisma, Individualized Consideration, Inspirational Motivation, and Intellectual
Stimulation. Examples of Charisma include the manager acts in ways that build my
respect , and the manager instills pride in me being associated with him . Examples of
individualized consideration includes the manager spends time teaching and coaching ,
and the manager treats me as an individual rather than just a member of a group .
Examples of Inspirational Motivation include the manager talks optimistically about the
future , and the manager talks enthusiastically about what needs to be accomplished .
Examples of Intellectual Stimulation include the manager re-examines the critical
assumption to question whether they are appropriate , and the manager seeks differing
perspectives when solving problems . Transactional leadership style was measured by
two (2) subscales which are Contingent Rewards, and Management-by-Exception.
Examples of contingent rewards include the manager provides me with assistance in
exchange for my efforts , and the manager discusses in specific terms who is
responsible for achieving performance targets . Examples of management-by-exemption
include the manager fails to interfere until problems become serious , and the manager
waits for things to go wrong before taking action . Responses were recorded on 5-point
likert scale, 0 not at all , 1 once in a while , 2 sometimes , 3 fairly often and 4
frequently, if not always . Reliability of each subscale is shown in table 1.
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Table 1
Scales
Items
Reliability
Charisma
.86
Individualized Consideration
.90
Inspirational Motivation
.82
Intellectual Stimulation
.74
Contingent Rewards
.93
Management-by-Exception
.79
4.3 Organizational Commitment Questionnaire

Fifteen (15) items from the questionnaire developed by Porter et al. (1974) were used to
measure organizational commitment. The effects of Reverse coded questions were
nuffified by subtracting from 6. Examples include "I find that my values and the
organization s values are very similar" and "I am proud to tell others that I am part of this
organization". Responses were recorded on 5 point likert scale from 1 Strongly
Disagree to 5 Strongly Agree . The scale showed good Reliability = .81).
5. Findings
Table 2: Relationship between transformational Leadership and organizational
commitment
transformational Leadership
Commitment
Pearson Correlation
Sig. (2-tailed)
N
.205(**)
.001
277
Table 2 indicates that there is a significant relationship between transformational

leadership style and organizational commitment. Therefore H1 which states that there is a
significant relationship between transformational leadership style and organizational
commitment is accepted in this study.
Table 3: Relationship between Transactional Leadership and organizational
commitment
Transactional Leadership
Commitment
Pearson Correlation
Sig. (2-tailed)
N
.411(**)
.000
277
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Table 3 indicates that there is a significant relationship between transactional leadership

style and organizational commitment. Therefore H2 which states that there is a
significant relationship between transactional leadership style and organizational
commitment is accepted in this study.
Table 4: Model Summary
R
Adjusted R Std. Error of F
Model R
Square Square
the Estimate
Sig.
1
.433(a) .188
.182
1.38835
31.648
.000
a Predictors: (Constant), Transactional Leadership, transformational Leadership
Table 4 indicates the coefficient of determination (R Square) which shows that 18% of
the variance in organizational commitment can be attributed to Transactional Leadership
and transformational Leadership styles.
Table 5: Coefficients (a)
Model
Unstandardized
Coefficients
Std.
B
Error
.974
.239
(Constant)
Transformational
.232
Leadership
Transactional
.467
Leadership
Standardized
Coefficients t
Beta
B
4.074
Sig.
Std.
Error
.000
.092
.140
2.525
.012
.067
.387
7.005
.000
a Dependent Variable: Commitment
Beta as shown in table 5 indicates that Transformational Leadership has 23% impact on
organizational commitment while Transactional Leadership has 46% impact on
organizational commitment. The result also indicates that transactional leadership style is
a stronger predictor of organizational commitment that transformational leadership style.
6. Conclusion
This study evaluated the relationship between leadership styles -transactional and
transformational- and organizational commitment. Data was collected from 277 medical
representatives of national and multinational pharmaceuticals companies through two
time tested questionnaires, The Multifactor Leadership Questionnaire (MLQ-5x/Short
Form) (Bass & Avolio, 1995) and Organizational Commitment Questionnaire (Porter et
al., 1974). Statistical Package for Social Sciences (SPSS 15 Version) was used for data
operation. Pearson correlation revealed a significant correlation between transformational
leadership style and organizational commitment and transactional leadership style and
organizational commitment. Multiple Regression showed the transactional leadership had
23% impact on organizational commitment and transformational leadership had 46%
impact on organizational commitment.
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References
Awamleh, R., & Gardner, W. L. (1999). Perceptions of leader charisma and
effectiveness: The effects of vision content, delivery, and organizational
performance. Leadership Quarterly, 10(3):345-373.
Bass, B.M., (1994), Transformational leadership and team and organizational decision
making. Sage Thousand Oaks. CA.
Bass, B.M., & Avolio, B., (1993), Trans-formational leadership and organ-izational
culture . Public Administration Quarterly, 17, 112-21.
Hartog, D.N.D., Muijen J.J. & Koopman V., (1997), Transactional vs. transformational
leadership: an analysis of the MLQ . Journal of Occupational and Organizational
Psychology, 70: 19-34.
Bass BM, Avolio BJ (1994). Improving organizational effectiveness through
transformational leadership. California: Sage.
Burns JM (1978). Leadership. New York: Harper & Row.
Allen, N.J.,& Meyer, J.P. (1996). Affective, continuance, and normative commitment to
the organization: an examination of construct validity. Journal of Vocational
Behavior, 49, 252-276.
Luchak, A. A., & Gellatly, I. R. (2007). A comparison of linear and nonlinear relations
between organizational commitment and work outcomes. Journal of Applied
Psychology, 92 (3), 786-793.
Par, G., & Tremblay, M. (2007). The influence of high-involvement human resources
practices, procedural justice, organizational commitment, and citizenship
behaviors on information technology professionals turnover intentions. Group &
Organization Management, 32 (3), 326-357.
Leithwood, K. (1992). The move toward transformational leadership. Educational
Leadership, 49 (5), 8-12.
Ibrahim S M, Nurzahit K and Trker B (2010). Leadership Style and Organizational
Commitment: Test of a Theory in Turkish Banking Sector Journal of Academic
Research in Economics, 2010, vol. 2 (1), pp 1-20
Charles R. Emery, Katherine J. Barker (2007). The effect of transactional and
transformational leadership styles on the organizational commitment and job
satisfaction of customer contact personnel , Journal of Organizational Culture,
Communications and Conflict,
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Listed in ULRICH S
Factors Determining Migrant Remittances in Pakistan

Khuram Shafi (Correspondent Author)
Department of Management Sciences
COMSATS Institute of Information Technology, Pakistan
Muhammad Imran
Dr. Saqib Gulzar
Faisal Siddiqui
Department of Business Administration
Air University PAF Complex, E-9, Islamabad, Pakistan
Abstract
This study examines the flow of migrant remittances from Pakistan. The statistical
analysis uses the following determining factors: Rate of Interest, Rate of Inflation, Rate
of Unemployment and the Number of Migrants. The results of this study endorse some
earlier results of other studies, but they differ in some respects. An attempt is also made
to detect followers effects on the tendency to remit, and the verification is that such
effects do exist. In the labor-sending countries, migration has been seen as resulting in a
mixture of benefits and costs. The costs include the loss of labor supply in which
generous amounts of human capital have been invested, the deformation of the age
structure of the population (in the instance of substantial volumes of emigration),
depopulation of rural areas, etc. The benefits include the reduction of social tensions from
unemployment and/or underemployment, the acquisition of skills in the foreign countries
by the returning migrants, and the money transfers from migrants to their families back
home, i.e., remittances, etc. These were the issues debated among Pakistan policymakers,
politicians, analysts, and academics. When Pakistan labor migration to different area of
the world like Bahrain, Canada, Germany, Japan, Kuwait, Norway, Qatar, Saudi Arabia,
Oman, U.A.E, Abu Dhabi, Dubai, Sharjah, U.K, U.S.A and Other Countries took on
dramatic dimensions. The main body of data is for remittances to Pakistan. The objective
of this study is to test the significance of certain factors in terms of their effects on
remittances to Pakistan. These factors are the Rate of Interest, Rate of Inflation, and Rate
of Unemployment. The study attempts to see if these factors have had any effect on the
dimensions of remittances. It also attempts to see if there are any structural changes
during this period that affect migrants' propensity to send. The period of migration
extends over 23 years, and it is remarkable to examine whether the remittance behavior
of migrants has changed over the years.
Key words: Migration, Remittances, Inflation rate, Interest rate, Unemployment.
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1. Introduction
A remittance is a transfer of money by a foreign worker to his or her home country.
Remittances have become a significant source of income for less developed countries.
According to the World Bank (2004), remittances received by less developed countries
totaled US$93 billion in 2002. Remittances are playing an increasingly large role in the
economies of many countries, contributing to economic growth and to the livelihoods of
needy people (though generally not the poorest of the poor). As remittance receivers
often have a higher propensity to own a bank account, remittances promote access to
financial services for the sender and recipient, an essential aspect of leveraging
remittances to promote economic development In the labor-sending countries, migration
has been seen as resulting in a mixture of benefits and costs. The costs include the loss of
labor supply in which substantial amounts of human capital have been invested, the
distortion of the age structure of the population (in the instance of substantial volumes of
emigration), depopulation of rural areas, etc. The benefits include the reduction of social
tensions from unemployment and/or underemployment, the acquisition of skills in the
foreign countries by the returning migrants, and the money transfers from migrants to
their families back home, i.e., remittances, etc. These were the issues debatable in
Pakistan.
Oded and Robert (1988) put in plain words the importance of remittances in the
development process is due to a number of factors: first, the scale and pace of rural-tourban migration; second, the magnitude of urban-to-rural remittances-urban-to-rural
remittances are usually transferred over quite a considerable period of time and amount to
10%-30% of migrants' income;1 third, the wide-spread interest in transfers of incomes
and in mechanisms that generate changes in the distribution of income; fourth, the impact
of remittances on the resource constraint in the economy at large where savings are
suboptimal and, in particular, in the agricultural sector, especially with respect to
technological change in agricultural production;2 and fifth, the role of children as
migrants enhancing returns to the bearing and rearing of children.. Paul Winters et al,
(2001) get the Information and assistance flow from both family migrant networks and
community migrant networks. They find that community and family networks are
substitutes in assisting migration, suggesting that, once migration is well established in a
community, family networks become less important. In addition, the development of
strong community networks erases the role of household characteristics in migration,
allowing those initially least favored to also participate in migration. Bruce and Wade
(2001) adopting a framework that applies both macro and micro variables to the study of
migration in Namibia, the analysis of the findings of the Namibia Migration Project
emphasizes the utility of combining different scales and methods of data collection in
terms of explaining migration dynamics and extending trends and patterns to future
scenarios. Sara et al, (2005) discover that trips and duration of time away have distinct
influences upon migration; that household level migrant networks are more influential
than village level migrant networks; that female migrant networks and male migrant
networks have different influences upon migration outcomes; and, that migrant social
capital influences men and women's migration differently. Douglas (1990) inspection
culls disparate elements from the theoretical and research literature on human migration
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to argue for the construction of a theory of migration that simultaneously incorporates

multiple levels of analysis within a longitudinal perspective. He showed the dynamic
interplay between network growth and individual migration labor, migrant remittances,
and local income distributions all create powerful feedback mechanisms that lead to the
cumulative causation of migration. J. Edward et al, (1996) analysis, and look at theories,
data, and research on the macroeconomic relationship between international migration
and national development in all world regions. Earlier reviews have generally been
pessimistic about the prospects for economic development as a result of international
migration. They given a supportive mix of macroeconomic policies and infrastructure,
international migration may function as a dynamic force promoting economic growth and
national development, so long as it does not bring about the selective emigration of
scarce human capital needed for development at home. Ma. Reinaruth (2002) explain the
factors affecting the remarkable increase in emigration from the Philippines to nonMiddle Eastern destinations since the 1980s, taking into consideration the dynamic
demographic and structural policy changes in the Philippines and the host countries. In
particular, he look at the impact of macroeconomic variables such as population, average
earnings and unemployment rates, in both the sending and host countries, on the
migration of the Filipinos. Gordon (2002) discover the extension of microeconomic and
migrant network theoretical frameworks for explaining perceived post-migration life
satisfaction of repeat (temporary) and more permanent labor force internal migrants in
Thailand. Data from the 1992 National Migration Survey were used in logistic regression
models to predict increased versus decreased post-move satisfaction with employment
situation, living environment, and community facilities. Contrary to the neoclassical
migration theory assumption, results showed that migration was associated with
decreased post-move satisfaction. Ben Rogaly et al, (2001) shows the People who
migrate temporarily for manual work are not usually unionized and are often unprotected
by effective legislation against travel and workplace risks. They say all this is true of
West Bengal, where migrant workers employed in rice cultivation have made crucial
contributions to the agricultural successes of the last two decades. West Bengal's gangs of
mobile rice workers are recruited directly by individual employers at busy labor market
places or in migrants' home villages. They summarize the findings of recent empirical
research on the scale and pattern of seasonal migration for rice work in West Bengal.
They analyses the causes and consequences of the migration, including its relation to
ongoing social change in four source areas. Lincoln and Ahmet (1999) the viewpoint
three migrant-status categories were defined: (a) Returned migrants, (b) Non-migrant
close kin or friends of migrants, and, as a control group, (c) All others. Edwin (1967)
studies of Indian social organization have consistently stressed the necessity of
understanding the joint family within the institutional framework of Indian society.
Structural characteristics of the joint family are easily summarized: It is patrilocal,
patriarchal, and patrilineal; after marriage a girl accompanies her husband to his parental
household unit, authority is vested in the oldest living male, and inheritance is traced
through the male line. Gordon (2006) discussing methods for estimating stocks and flows
of illegal migrants. He shows wage differentials between the United States and Mexico
are hardly a new phenomenon, yet illegal migration from Mexico did not reach high
levels until recently. An increase in the relative size of Mexico's working-age population,
greater volatility in U.S.-Mexico relative wages, and changes in U.S. immigration
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policies are all candidate explanations for increasing labor flows from Mexico. Finally,
he considers policies that regulate the cross-border flow of illegal migrants. Peggy et al,
(2003) make clear special issue of the International Migration Review on transnational
migration represents both a victory and a challenge. For those who have advocated for
the recognition of transnational migration, this publication is a victory in that it attests to
the importance and growing acceptance of a transnational perspective among migration
scholars. They have also a challenge because many of the criticisms raised initially by
detractors have been quite valid. Making sense of transnational practices and placing
them in proper perspective still requires much conceptual, methodological and empirical
work. Luis (2003) prove migrants' long-distance economic relations with their homelands
have been the subject of an extensive, albeit fragmented, multidisciplinary inquiry. Most
existing studies have been primarily concerned with the north-south flow of monetary
remittances that migrants send to their homelands. Using a transnational perspective
informed by economic sociology tenets, this article argues that this north-south, monetary
centered approach is too limited, for it fails to heed the multiple macroeconomic effects
of migrants' transnational economic and noneconomic connections and, thus,
underestimates migrants' agency and their influence at the global level. He using the
concept of transnational living, the study presents new vistas of transnational migration
that question accepted notions about the relationship between labor mobility and capital
mobility. Patricia and Sarah (2003) aims to bring gender into an even tighter transnational
migration focus by broadening and deepening our original framework of "gendered
geographies of power," linking it more directly to existing and emerging scholarship.
They examine and highlight previously neglected areas such as the role of the state and
the social imaginary in gendering transnational processes and experiences. They identify
issue that remains under-appreciated, under-researched, and/or under-theorized. Finally,
they initiate a discussion of how a gendered analysis of transnational migration can help
bridge this particular research to other gendered transnational processes under study that
do not privilege migration. Saqib and Hui (2009) find a significant affect of inflation on
exports of Pakistan they find that high rate of inflation in Pakistan is one of the major
factors that cause devaluation in the domestic currency. Saqib and Hui (2010) Pakistan's
balance of payments is highly dependent on workers remittances. Large amounts of
workers remittances always supports huge payment balances but these remittances can
not be sustained over a long period of time. Pakistan s balance of payments used to suffer
from fluctuating workers remittance sine the year of its independence. Kenneth and
Michael (2003) clarify the altruism, insurance, and investments are three potential
motives for migrant remittances that have been explored in the literature. They developed
model in this paper posits an additional motive - that remittances are necessary for the
migrant to participate in the employment networks that are based in the village, and thus
are partially a payment for the option to change jobs within this network. They tested
model with data on Mexican migrants to the United States and finds support in that
network strength and diversity increase remittances, whereas the insurance motive
predicts stronger networks will decrease remittances. Hendrik et al, (2005) give details
these two questions are examined empirically in relation to data from Egypt, Turkey, and
Morocco for households with family members living abroad. They concluded that the
family ties and the net earnings potential of migrants have stronger effects on the flow of
remittances than the net earnings potential of the households in the country of origin.
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Secondly, because the receipt of remittances has a positive effect on the emigration
intentions of household members still living in the country of origin, the receipt of
remittances may contribute to new flows of migration, particularly in the case of
Morocco. Dennis and Jeffrey (1998) to better understand the positive contributions return
migrants and migrant remittances make in Latin American society, this paper offers a
reevaluation of existing conceptual frameworks. They focus on the potential range of
household strategies for remittance investment, the ways migrant circulation patterns
relate to family and household decision making, and the impact of remittances and
migration upon community structure. Finally, they using ethnographic data from rural
Mexico, we illustrate our argument and demonstrate the dynamic nature of contemporary
migration and migrant remittances. Belinda and Jonathan (2004) changes in immigration
policy and legislation have the power to shape and alter the gendering of migration in
significant ways, and can have a dramatic effect on the lives and relationships of the men,
women and families involved. They contextualize migration regimes in South Africa and
examine in detail the likely implications of the new Immigration Act. Philip (1992)
demonstrate the relationship between migration and development has been described as
an unsettled one to emphasize the uncertainty of researchers over how fast economic
growth can reduce emigration.2 History teaches that development will ultimately reduce
emigration which results from the search of better jobs and wages, but since development
processes often span decades, international institutions established to promote economic
growth that have recently been asked to "do something" about international migration are
asking what steps they can take to minimize unwanted migration .
3. Methodology
The aim of study is to determining those factors which is effect the flow of remittances.
For this Purpose we shell have two sources of data named as Primary Data and
Secondary Data. For secondary data we visit different websites of the banks like State
Bank of Pakistan and Asian Development Bank and also get the data in the Economic survey of Pakistan 2008-2009 and collect the data from there websites as well.
3.1 Variable Explanation
Flow of remittances: (The dependent variable) in every time period is hypothesized to be
a function of the following factors (independent variables) the rate of interest in the
countries of origin, the rate of inflation and the rate of unemployment, In the following
brief explanation of the expected effect of each independent variable on the flow of
remittances.
Rate of Interest: The rates of interest prevailing at origin and destination may affect the
amount of remittances depending on the relation (differential) between the two interest
rates. A relatively high interest rate in the country of origin may increase the amount of
remittances because it is preferable to shift savings to that country. But there is an
additional effect having to do with absolute rather than relative interest rates. Higher
interest rates may increase the tendency to save at each level of income and thus the
quantity of funds that can be remitted.
Rate of Inflation: Inflationary pressures in the country of origin reduce real income and
thus may make necessary increased remittances. On the other hand, inflation increases
the risk of reducing the real purchasing power of remitted funds and thus may delay
remittances until safe placement of funds are originate. It appears that the effect of
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inflation would depend partly on the nature of remittances. Part of the effect of inflation
would appear through the exchange rate to the extent that the exchange rate is determined
by relative price levels in the two countries.
Rate of Unemployment: The rate of unemployment in the country of objective may have
negative effects on the amount of remittances for two reasons. First, some migrants may
become, partly or wholly, unemployed and their incomes may be reduced. For example
Today s employment crises mostly countries in the world like Dubai, Pakistani and other
world migrant are unemployed. Second, increased unemployment may create
uncertainties for the immediate future and therefore reduce remittances at least in the
short term.
4. Hypothesis
Ho: Interest rate, inflation rate and unemployment affect the flow of remittances in
Pakistan.
Ha: Interest rate, inflation rate and unemployment do not affect the flow of remittances in
Pakistan.
5. Sample/Data Collection:
The data for this research paper is collected from the internet from various websites.
These websites include www.sbp.pk (State Bank of Pakistan (SBP). www.adb.org (Asian
Development Bank) and also get the data in the Economic Survey of Pakistan 2008-2009.
6. Data Analysis and Interpretation:
The regression equation is
Flow of Remittances = 2690 - 134 INTEREST RATE + 173 UNEMPLOYMENT RATE
+ 21.4 INFALATION RATE
The equation shows the Interest Rate affect negatively, Unemployment affect positively
and Inflation Rate also affect positively on Flow of Remittances.
Predictor
Coef
StDev
FLOW OF
REMITTENCE
INTEREST
UNEMPLOY
INFALATION
2690.3
755.5
3.56
0.002
-133.77
173.1
21.422
42.63
4.100
109.0
-3.14
1.59
5.23
0.005
0.129
0.000
S = 705.6
R-Sq = 79.1%
R-Sq (adj) = 75.8%s
The variables are testified with regression by using Minitab. The column of Predictor
shows the variables used in this paper, Coefficient shows the impact of independent
variables on dependent variable which is -133.77 of Interest, 173.1 of Unemployment and
21.422 of inflation on Flow of Remittances. This means that if there is 1% increase in
Interest then the Flow of Remittances will negatively -133.77 and if there is 1% increase
in unemployment then the Flow of Remittances will grow with 173.1 and if also there is
1% increase in Inflation then the Flow of Remittances will grow with 21.422%. T shows
the efficiency of the variables which is -3.14 for Interest, 1.59 for unemployment and
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5.23 for Inflation; these values show that the variables are very efficient. P shows the
significance level of the variables which is 0.005 for Interest and 0.000 for Inflation
showing that these variables are very significant. The relationship between dependent and
independent variables is 79.1%, shown by R-Sq, shows that Interest Rate, Unemployment
and Inflation Rate have very strong relationship with the Flow of Remittances.
7. Analysis of Variance:
Source
Regression
DF
3
SS
35831075
MS
11943692
Error
19
9460487
497920
Total
22
45291562
F
23.99
P
0.000
In Variance Analysis DF shows the Degree of Freedom SS shows the Sum of Square
MS shows the Mean of Square F show the Variance and P shows the Significance
Level. F shows the variance; its value is 23.99 shows that there is no variance element in
the values of the variables and P shows the significance level of the variance analysis
which is 0.000 showing that are very significant.
8. Unusual Observations:
R denotes an observation with a large standardized residual
Flow of Remittances
8000
6000
Flow of
Remittances
4000
2000
0
1 4 7 10 13 16 19 22
In this graph X-axis show the no of year and on Y-axis show the flow of remittances. The
graph shows first six year flow of remittance almost same but in seventh year show some
increase but next year will decrease basically the graph shows the fluctuations increase
decrease trend but 12th year to 17th year show the increase trend and then also show
decrease trend and after that also show the increase trend
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INTEREST RATE
UNEMPLOYMENT RATE
25
10
8
20
15
INTEREST
RATE
10
6
4
UNEMPLOYM
ENT RATE
2
0
5
0
1 4 7 10 13 16 19 22
1 3 5 7 9 11 13 15 17 19 21 23
In this graph X-axis show the no of year and on Y-axis show the Interest Rate and
Unemployment Rate. The Interest Rate graph shows the came trend and after that show
increase trend and subsequently 1997 to onward show the decrease trend till 2008.
INFALATION RATE
250
200
150
100
INFALATION
RATE
50
0
1
10 13 16 19 22
In this graph X-axis show the no of year and on Y-axis show the Inflation Rate. The
graph shows the inflation increase trend continuously.
9. Conclusion
The purpose of this study is twofold first to review the theory and the evidence of migrant
remittance behavior and second to present the evidence from Pakistan. This paper has
attempted a analysis of the explanation of remittances that is based on the idea of an
informal mutually beneficial between the migrant and the country of migrants. It is
suggested that remittances should be understood as the result of a reasonable agent
behavior performing freely but controlled by his loyalty and commitment to country. In
terms of the objective of the migrant, it is recommended that there is a wide variety of
plans that may relate to different state of affairs. The study also presents the results of an
economic investigation that utilizes the data on remittances from Pakistan. From these
results it appears that the size of remittances is affected by the rate of inflation and the
rate of interest. The rate of unemployment seems to be important but not in all cases. The
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results also suggest that there are important follower s effects that may be certified to
different attitudes of the equivalent groups of migrants and to the effect that the duration
of migration may have on remittances even if migrants of different followers have equal
behavior. They provide support for the rate of inflation and the interest rate differentials
as important helpful variables of migrant remittance behavior, and they also recommend
that the rate of unemployment should be considered as a factor affecting remittances.
Finally, our results suggest that there are important followers effects.
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Saqib Gulzar and Hui Xiaofeng (2010). A Study on the Problem of Deficit in the
Balance of Payments: The Case of Pakistan , Interdisciplinary Journal of
Contemporary Research In Business, ISSN 2073-7122, IJCRB 2010 Vol .2, No.
6. pp 371-382.
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International Journal of Networking and Virtual Organizations (IJNVO) Vol. 6,
No. 4, pp 333- 343
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Mirror up to leadership and Strategic Human Resource

Management: An Exploratory Account
Listed in ULRICH S
Rana Zamin Abbas

Research Associate & MS Management Student
University of Management and Technology, Lahore Pakistan
Muhammad Ashraf
M. Phil Student, Superior University
Lahore-Pakistan
Hassan Mobeen Alam (Corresponding Author)
Assistant Professor, Hailey College of Commerce
University of the Punjab,Lahore Pakistan
Abdul Rafay, FCA
Assistant Professor (Finance)
School of Business & Economics
University of Management & Technology
Lahore, Pakistan.
Abstract
This paper focuses upon exploring the contribution of constructionism and existential
perspective for the strength and value of subjective perspective of leadership as well as
strategy. It also advocates the value of subjective perspective when we give due status to
this approach. It invites the reconsideration of objectivist approach to leadership on
logical grounds. This paper begins by considering the valuable input of an existentialist
perspective and then explores the worth and value of social constructionist approach in
leadership studies and also highlights the importance of strategy making from
humanistic/ existential approach. This paper takes a new and fresh approach about
reconsidering the objectivist approach to leadership and discusses the worth of subjective
approach for the value of leadership as well as humanistic/ existential approach to
strategy. The real worth of this paper shines out when we strategically combine the two
perspectives into one i.e. social constructionist and existential perspectives. These two
perspectives act like two head lights of the vehicle of leadership from which rays of light
come out for illuminating the concept of leadership. Moreover, it also presents
humanistic/ existential approach to strategy. From this paper long term future
implications will be beneficial both for practice and it will also provide an opportunity of
understandings how people view leadership. Moreover, this paper highlights ideas that
might be explored in near future.
Key Words: Leadership, Strategy, Existentialism, Constructionism, Sustainable
Competitive Advantage
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1. Rationalist Viewpoint
Traditional approaches of leadership just focus upon distilling the essence of leadership.
The fascinating questions are discussed beautifully by Grint (1997), some key statements
from ancient philosophers and some from management thinkers. According to Kakabadse
from the ancient philosophers to Hobbes and Nietzsche, to current scholar, finding out
what makes the visionary hero, the superhuman, the great man or woman, tick, has
become an obsession . The study of Adler and House and Aditja focus upon the
limitations of such approaches. The study of Alimo-Metcalfe and Alban-Metcalfe
highlights the grave risk when we apply these very remote and out of context model of
leadership and it is nothing but absolute truth that one model good for America may not
be good for Pakistan. It would be a blunder when we try to seek for standard accounts/
models of leadership.
Collinson (2005), Pye(2005), Wood(2005), Dodge(2001), Popper(2004) writings focus
on incorporating subjective elements. Cooper argued that the objective approach lead to
the standard account of the world and yes this is useful when some constants like,
physical forces, some chemical reaction, gases and stones are under discussion, but the
question is this, do these models capture the lived leadership experience? The fact is that
our world is very much human. Its whole existence are the functions of human beings.
These standard accounts/models miss the subjective voice which is the voice of
followers. This thinking further strengthens the approach which labels Leader as an
active and followers as passive agents and goes on saying that leaders are revolutionary
and the followers are narrow-minded.
2. Existentialism and Constructionism Viewpoint
According to existentialist our self is not a static but quite dynamic and conscious being,
who is constantly in the process of becoming and constructionist call it a social
construction. According to Holy Quran Sura/Chapter 53 An-Najm, V.No.39 That man
can have nothing but what he strives for; In other words we are conscious being to
participate in a construction of reality (Yablon, 1980, p. 24, cited in Klugman, 1997, p.
303).
So when we combine these two perspectives in order to reap the benefits of both sides. At
one hand existentialism perspective provides consciousness of the present as well as the
future intentions to act while on the other hand constructionist gives reflection or
awareness about influential factors which shape up both past and present. (Klugman 1997
p. 304)
In this way, combining these two perspectives give us complete range of present, past and
future.
When we evaluate management and leadership thinking, we find that most of researchers
say that the essence of something precedes its existence e.g. as we see in the case of
feminist debate over essence. At this point of juncture existentialism raises the questions
and asks, to which extent the spirit of human nature is measurable and essence comes
first our existence. This view further get strengthened from the fact that the human nature
is having inscrutable depths and can never be measured accurately only with few
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apparent characteristics. Here, the existentialist would argue that the reductionist
approach to leadership will not consider each individual as unique and the uniqueness of
each relationship.
Now we would focus upon consciousness which is the most important part of
existentialism. We would summarize this and which may be gross over simplification of
the concept as follows: see for detail Sartre, 2000).
Being-in-itself: acting unreflectively;
Being-for-itself: acting reflectively; and
Being-for-others: reflecting on being objectified by another(s).
When we consider these dimensions/ aspects of leadership process, we observe a range of
possibilities and spectrum of unique subjectivities when people interact with each other.
But there is no clue of such subjectivities in objective approaches. In objective
approaches to leadership these subjectivities are utterly neglected and no proper attention
is given to them at all.
3. Social Constructionist Viewpoint
Literature provides evidence of the roots of social constructionist perspective which
stems from sociology, history, anthropology, women studies, psychology, literary studies
and cultural studies. According to Burr, (1995, p.2), there is no one single characteristics
from the multiple disciplines about constructionist viewpoint and so there is no clear
classification of this viewpoint.
It is credit of Harding (2003) who identifies the consideration of power as salient and key
force in Leaders and Leadership studies. When we view leadership, as socially
constructed, features like local circumstances, local practices, local processes, local
situations and local ideas become noticeable. These may create a hostile climate or tend
to create creative atmosphere of leadership. One such practice is dependency on
leadership. In the words of Gammill and Okaley. Dependency of leadership is a serious
sign of social pathology that induces massive learned helplessness among members of a
social system .
Constructionist and existentialism gives birth to the social dynamic process of leadership
and we will gain the following insights:
Researchers role will be changed
Less dependency on leaders
management of meanings will be developed when leader and led will interact
Consideration of the Individual perspective
Importance of interrelated and dialogical self will be utmost
Encouraging more open dialogue
Character of Relationship will be discussed
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4. Viewpoints about Strategy

The significance of utilizing people as a sustainable competitive advantage is touching
the zenithal point of fame day by day, and this approach to strategy is the token of their
real successes and financial viability. According to Daniel Burger, there are three salient
features of strategy.
Processes
Leadership
Effectiveness.
5. People as a Competitive Advantage viewpoint
According to Jack Welch, the only thing that will uphold a company s competitive
advantage tomorrow is the caliber of people in the organization .
According to Barney (1991), the resources of competitive advantage which fulfill the
criteria of sustainable competitive advantage must be able to have the following features:
value, scarcity, imperfect immutability, and non-substitutability. That s why in the
modern time most of the organizations are changing their perspectives and focusing upon
the Heil s declaration that their enduring source of competitive advantage rests within
their human capital (Heil et al., 2000, p. 4) and knowledge, experience, skills and
energy of their people (O Reilly & Pfeffer, 2000, p. 3).
6. A humanistic/existential Viewpoint on strategy
Bartlett and Ghoshal (1994) gives invitation of change of perspective with his full vitality
when he asserts that [s]enior managers of today s large enterprises must move beyond
strategy, structure, and systems to a framework built on purpose, process, and people (p.
79)
purpose not strategy is the reason that organizations exist (p. 88) .
Values in humanistic/ existential psychology are not just concepts but play very central
role in humanistic/existential psychology. That s why it is the faith of French
existentialist Jean-Paul Sartre that individuals find meaning in life through the
commitment to values (Westen, 1996). Again in the study of Maslow (1998), we observe
that all humans struggle to the optimum level for their all kinds of achievements and
growth and in this phenomenon, one s independence and free decision-making are keys
to open up the doors of organizational success. The study of Kilcourse (1994) provided
us again the idea of value leadership that organizational intelligentia can utilize to
apply the philosophy of existentialism, for financial viability and organizational success.
SHRM is a long term financial planning and token/ symbol of organization financial
/commercial viability. So, CEOs focus upon this aspect so that their organizations can
become another 500 fortune companies and touch the zenithal point of organizational
prosperity, fame and luck. Finance is an integral part of SHRM and in present time
everyone is discussing quantitative aspects of finance but we are very first time
discussing the qualitative factor for the successes of organization, in this paper, through
the concepts of human capital, existential and construcionist approaches to leadership,
link of financial viability to SHRM and value leadership. Financial viability will be
adversely affected by non existence of such qualitative factors and spirit of SHRM will
be deeply hurt and damaged. In research, this concept is highlighted with different names
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and brands e.g. intrinsic and extrinsic motivations, employee satisfactions, drive,
employee retention, employee development, human capital, talent development,
intellectual development, organizational effectiveness.
It is clear from the above discussion that organizational strategy is incomplete without the
healthy contribution of HRM. These two are the chips of the same coin and not
contradictory to each other rather complimentary to each other just like wearing the coat
without trouser is humorous and funny, same is the case with organizational strategy
without HRM. What will happen to organizations when HRM does not integrate with
strategy? Certainly, organizations will become neurotic and will go to their natural death.
Resultantly, chaos will prevail in every inch of the organizations and there will be no
concept of direction and effectiveness will totally disappear from the beautiful face of
organization. This beautiful face of organizations will present a very gloomy picture
which is horrible and terror stricken and this is the direct contrast with the
existential/humanistic face of organization. In the manner of John Keats, the
organizational heart will ach and the drowsy numbness will pain the organizational sense
as they have drunk hemlock.
In this way, the whole fabric of organizational life will be shattered and dejection with
frustration will prevail everywhere. Resultantly, meaninglessness and alienation with a
sense of irresponsibility will stigmatize the whole sphere of organization. This
directionlessness will germinate again an ugly stream of chaos, creating an abyss of
dismal agony and collapse everything. This is not something fictional but a something
directly from the bottom of well-thought hearts like Jane Paul Sartre, Simon Debour from
France, Martin Hedgier from Germany, Kafka from Czech Republic and Erich Fromm
from Germany.
7. Summary and conclusion
Consequently, today organization have deep realization that their enduring source of
competitive advantage sets within their human capital (Heil et al., 2000.p.4) and the
knowledge, experience, skills and energy of their people (O Reilly & Pfeffer,
2000,p.3). According to Weir and Smallman (1998), conventional view of strategy
depicts highly formulized or mechanical strategic planning that seems a snare . Now,
it is a high time of converting the contractual employees into the committed employees of
purposeful organizations. Through the journey of HRM evolution, a new concept of
integrated HRM has evolved in management thinking and has become a source of
competitive advantage. This can be applied further on all levels of strategy i.e. functional
level, business level, corporate level and network level, covering the range from micro to
macro level. This integrated HRM approach may be instrumental for applying the
existentialist principle to strategy. All CEOs, change agents, managers and leaders must
be well aware and knowledgeable of these principles, so that organizational effectiveness
may reach to its optimal levels and only then people s talent will be fully utilized as a
sustainable competitive advantage.
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