Management Review 2011

ISSN - 0975-7988 Vol.
3, Issue 1, Jan-June, 2011
FROM THE EDITOR
RESEARCH ARTICLES
HUMAN RESOURCES HELPDESK FOR COMPETITVE ADVANTAGE AN IMPORTANCE PERFORMANCE ANALYSIS OF SELECT HYPERMARKETS IN INDIA
3 12 18 31 39
Nitin Barekere & Rajkumar B. K.
AN EMPIRICAL STUDY OF INTUITIONS ROLE IN CORPORATE DECISION - MAKING ADOPTION OF INTERNET BANKING A GLIMPSE ON INFLUENCING VARIABLES
Rangaraj G. & R. Thimmarayappa
Ajimon George & G. S. Gireesh Kumar
FOREIGN DIRECT INVESTMENT IN INDIAN RETAILING A CASE OF WAL-MART
S. Harish Babu & Cynthia Menezes
IMPACT OF CUSTOMER RELATIONSHIP MANAGEMENT ON CUSTOMER RETENTION A CASE OF HOTEL ASIA, JAMMU
Deepak Jain
FUNDAMENTAL ANALYSIS AS A METHOD OF SHARE VALUATION IN COMPARISON WITH TECHNICAL ANALYSIS

Venkatesh C. K. & Ganesh L.
47
CRM PRACTICES IN NEW AGE BANKS IN INDIA

Suresh Chandra Bihari
53 63
FORECASTING THE SYMMETRIC AND ASYMMETRIC VOLATILITY IN MINI GOLD FUTURES MARKET EVIDENCE FROM MULTI COMMODITY EXCHANGE OF INDIA
Birenjan Digal
GROWTH OF RETAIL CREDIT BY COMMERCIAL BANKS IN KARNATAKA

Linda Daniel & R. Alamelumangai
70 77
TECHNOLOGY LEADERSHIP
Joseph Sebastian Thekedam
INVESTORS' PSYCHOLOGY TOWARDS IPO GRADING AN EMPIRICAL STUDY
88 94 99
Amrita M. A. Manika Awasthy
Anindita Chakraborty & Ravindra Pathak Sandhya Anvekar & Meghna Verma
EMOTIONAL SUPPORT AND WORK BALANCE A CASE STUDY OF MARRIED WOMEN EMPLOYEES
CEO INSIGHT : SAKET GORE
BOOK REVIEW
CREATING MAGIC BY LEE COCKERELL THE ART OF CHOOSING BY SHEENA IYENGAR
104 105
Chitra Parthasarathy
M. S. Ramaiah Institute of Management (Post Graduate Centre for Management Studies & Research) Post Box No : 5405, MSRIT Post, New B.E.L Road.Bangalore - 560 054. Website : www.msrim.in
Dr. Pallab Bandyopadhyay

Director, HR, Citrix Systems
Dr. C. S. Thammaiah Dean
Faculty - Finance
CONTENTS _______________________________________________________ EDITORIAL RESEARCH PAPERS Human Resources Helpdesk for Competitve Advantage - An Importance Performance Analysis of Select Hypermarkets In India Nitin Barekere & Rajkumar B. K. An Empirical Study of Intuitions Role in Corporate Decision -Making Rangaraj G. & R. Thimmarayappa Adoption of Internet Banking - A Glimpse On Influencing Variables Ajimon George & G. S. Gireesh Kumar Foreign Direct Investment in Indian Retailing - A Case of Wal-Mart S. Harish Babu & Cynthia Menezes Impact of Customer Relationship Management on Customer Retention A Case of Hotel Asia, Jammu Deepak Jain Fundamental Analysis as a Method of Share Valuation in Comparison with Technical Analysis Venkatesh C. K. & Ganesh L. CRM Practices in New Age Banks in India Suresh Chandra Bihari Forecasting the Symmetric and Asymmetric Volatility in Mini Gold Futures Market: Evidence from Multi Commodity Exchange of India Birenjan Digal Growth of Retail Credit by Commercial Banks in Karnataka Linda Daniel & R. Alamelumangai Technology Leadership Joseph Sebastian Thekedam Investors' Psychology Towards IPO Grading - An Empirical Study Anindita Chakraborty & Ravindra Pathak Case Study : Emotional Support and Work Balance - A study of Married Women Employees Sandhya Anvekar & Meghna Verma CEO Insight : Mr. Saket Gore, CEO - Consumer Products Division, Himalaya Drug Company Amrita M. A. Book Review : Creating Magic by Lee Cockerell Manika Awasthy The Art of Choosing by Sheena Iyengar Chitra Parthasarathy 104 105 3 1
12 18 31
39
47
53
63
70 77 88
94
99
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M. S. Ramaiah Management Review Vol. 3, Issue 1, Jan-June, 2011
EDITORIAL The International refereed Research Journal 'M.S. Ramaiah Management Review' has entered the third year of existence with doubled contents of research articles and has an inclusion of 'Case Study' as a special feature. Our continuous efforts towards offering wide insights into management research and applicability have been reflected in the varied articles in this volume. With many challenges and issues of growing economies, the management research has become imminent foundation for future strategies for competence and sustainability. The articles presented in this issue are the epitome of the business world today.
The first article by Nitin and Rajkumar, Human Resources Helpdesk for Competitve Advantage: An
Importance Performance Analysis of Select Hypermarkets In India indicates that ImportancePerformance Analysis is an effective tool in identifying key employee experience services for improvement and providing service improvement methods hypermarkets.
Rangaraju and Thimmarayappa in their paper, An Empirical Study of Intuitions Role in Corporate Decision -Making take up a study of variables that play a significant role in intuitive business decisions.
The next article by Ajimon George and G S Gireesh Kumar, Adoption of Internet Banking A Glimpse
on Influencing Variables explores the factors crucial for adopting Internet Banking services and suggests a conceptual model of application.
The paper by S.Harish Babu and Cynthia Menezes, Foreign Direct Investment in Indian Retailing - Case of Wal-Mart understands the prospects and impact of FDI in the Indian retail market from Wal-Mart's perspective.
The impact of CRM in retaining customers is discussed by Deepak Jain in his paper on Impact of
Customer Relationship Management on Customer Retention A Case of Hotel Asia, Jammu which has applicability in tourism and hospitality sector.
Venkatesh and Ganesh in their article on Fundamental Analysis as a Method of Share Valuation in Comparison with Technical Analysis report the findings of a survey on the use of fundamental and technical analysis in Indian stock market and conclude that fundamental analysis is significantly more useful for taking long positions in the market.
Suresh Chandra Bihari in his article CRM Practices in New Age Banks in India gives those CRM
practices of finding the most profitable and loyal customer groups to target for effective implementation of CRM strategies in banking sector.
Birenjan Digal estimates and evaluates the forecasting performance of three alternative models for
predicting the daily volatility of futures markets in his article on Forecasting the Symmetric and Asymmetric Volatility in Mini Gold Futures Market: Evidence from Multi Commodity Exchange of India.
The paper Growth of Retail Credit by Commercial Banks in Karnataka by Linda Daniel and
Alamelumangai analyses the growth phase of retail credit by banks in Karnataka.
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Joseph Sebastian Thekedam takes up an empirical study in his research paper on Technology
Leadership to investigate principals' technology leadership practices.
The article on Investors' Psychology Towards IPO Grading - An Empirical Study by Anindita Chakraborthy and Ravindra Pathak focuses on the IPO grading initiatives and its uses to the retail investors.
The new feature of this issue is a case study which is contributed by Sandhya Anvekar and Meghna
Verma titled Emotional Support and Work Balance - A study of Married Women Employees. The authors through their empirical study devise a framework for achieving work balance with emotional support for married women employees.
Mr. Saket Gore, CEO - Consumer Products Division, Himalaya Drug Company, is the guest CEO for this
issue being interviewed by Amrita.

Lastly, this issue has two books reviews - the first one Creating Magic by Lee Cockerell reviewed by
Manika Avasthi and the other one The Art of Choosing of Sheena Iyengar by Chitra Parthasarathy. I hope this research journal is very resourceful to all its readers; from academicians, students to practising managers.
Dr. Sandhya Anvekar Chief Editor
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Nitin Barekere & Rajkumar B.K. Abstract: The intent of this study is to utilize Importance- Performance Analysis (hereafter referred to as IPA) in understanding the employee's degree of care, satisfaction and priority listing on some key experience attributes. The analysis provides an understanding for Human Resources Professionals in improvising their employee service offerings through internal help desk in response to evolving customer needs. The postulated method has been applied to the employees of few select retail Hypermarkets in India through a comprehensive customer survey. The outcome of the study results indicate that the proposed IPA method can effectively identify key employee experience services arenas that may be improved upon, and also serve as a valuable tool in assisting HR practitioners in developing employee experience service improvement methods and thereby establishing a competitive advantage in attracting and engaging talent. Keywords: Importance Performance Analysis, Hypermarkets and HR Helpdesk.
Human Resources Helpdesk for Competitve Advantage: An Importance Performance Analysis Of Select Hypermarkets In India
1. Introduction: Customer satisfaction has become increasingly important for retailers, as it may increase customer loyalty, cross-buying, positive word of mouth, and reduce price sensitivity (Matzler, Bailom, Hinterhuber, Renzl and Pichler, 2004). Satisfaction is viewed as a result of a preference for an object or service and judgments of its performance (Myers & Alpert, 1968). Built on this concept, an ImportancePerformance Analysis (IPA) technique was developed as a market tool for researchers (Martilla & James, 1977). To excel in superior customer service standards organizations must strive for their internal customer (employee) satisfaction. IPA has been applied in understanding critical performance factors in customer satisfaction for products and services in a variety of disciplines (Hawes and Rao, 1985; Yavas and Shemwell, 1997; Tikkanen, Alajoutsijarvi and Tahtinen, 2000; Zhang and Chow, 2004; O'Neill and Palmer, 2004). Most existing studies are directed in understanding the degree of satisfaction toward different service factors. However, the in-congruencies among employees with respect to the degree of satisfaction and the degree of care on each factor in their choice behavior are areas of study that had not been previously addressed adequately. Thus, this research intends to address this gap, based on a comprehensive
employee survey that focuses on how employees react to the service offering experiences. The Importance Performance Analysis (IPA) is utilized to analyze the degrees of satisfaction and care toward different service items from the perspective of not only overall employees but also different classified groups of employees. The outcome of this study can provide useful information for HR Professionals in identifying apt plans for improving their service quality standards and in providing better response to the expectation of their staff. The analysis will assist in the judicious allocation of resources. There are three distinct steps involved in the IPA process. First, a set of product features or attributes is identified through a literature review, focus group interviews and the use of managerial judgment (Martilla and James, 1977). Secondly, consumers are asked two questions about each attribute: How important is it? and How well did the provided product or service perform? Last, the importance and performance scores are calculated for each attribute. These values provides x and y coordinates which are then placed on a two-dimensional plot called the Action Grid (Blake, Schrader and James, 1978). Hawes, Kiser and Rao (1982) and Hawes and Rao (1985) utilized the IPA concept in researching on retirement communities and health care applications.
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Sethna (1982) found IPA technique to be pretty useful in identifying service quality areas that require remedial strategic actions. The underlying assumption of the IPA technique is that customer's' level of satisfaction with the attributes is mainly derived from their expectations/perceptions and judgment of the product's or service's performance. Lewis (1985) used the IPA as a competitive analysis technique in identifying tourists' perceptions towards hotel industry. Almanza, Jale and Lin (1994) used the IPA matrix to determine means for improving customer satisfaction while Lewis and Chambers (1989) reported on the elective use of IPA by the Sheraton Hotel in monitoring customer satisfaction index. The concept of importance is viewed by customers on the same lines as satisfaction (Barsky, 1992; Rosenberg, 1956). When a customer perceives an attribute as an important parameter, the customer will also believe that the particular attribute will play a significant role in influencing his or her product choice (McKenzie, 1986). More recently, the term importance has been used to refer to the perceived importance of an attribute and its effect on product or service quality (Carman,1990). Lilien, Kotler and Moorthy (1993) defined the term &important attributes' as those considered important by consumers, and that the various brands or products are perceived to differ, Hemmasi et al. (1994), however, stated that performance lies in customer perceptions of performance of the attribute. Hence, the more favorable the perception of a performance are, greater is the likelihood of the choice from among similar alternatives. It is imperative to note that the customer loyalty is not the same as customer satisfaction. Instead it measures how good customer's expectations are met by a given transaction, while customer loyalty measures how likely a customer is to repurchase and engage in partnership activities. Satisfaction is necessary but a sufficient condition for loyalty without satisfaction. Satisfaction and loyalty are not surrogates for each other. It is possible for customers to be loyal without being highly satisfied (e.g., when they are few other choices available) and to be highly satisfied and yet not loyal (e.g., when many alternatives are available). Firms are required to gain a better understanding and insight of the relationship between satisfaction and loyalty to use this as distinct competitive advantage in today's battle for attracting and retaining talent. Inter-relationship between Satisfaction, Service Quality and Loyalty: Most researchers propose that the relationship between satisfaction and loyalty to be positive, (i.e., the more satisfied customer is with a service provider the more loyal they are to the service provider). Thus, the exact nature of the relationship between overall satisfaction and loyalty is still an empirical issue. Generally speaking, prior researches showed that the service quality influences customer satisfaction. An increasing customer satisfaction will then enhance customer loyalty. Earlier, Fader and Schmittlein found a positive relationship exists between market share and loyalty. Researchers have also found that service quality is by far the most critical determinant of experience perception. Employee loyalty may be realized by the employee's intent to continue working with the same organization and him/her recommending friends and relatives against relevant job openings and career opportunities. 2. METHODOLOGY : Understanding an employee's attitude towards a service is essential for better employee engagement and retention. Such analysis will help in identifying various factors that contribute towards customer's higher degree of satisfaction which in turn will help in designing effective employee experience strategies (Engel, et al., 1993). In 1977 Martilla and James suggested a simple structure of IPA (ImportancePerformance Analysis) from the product attributes study they had performed earlier in the motorcycle industry. They proposed a simple two-dimensional framework to describe the relationship between the degree of satisfaction and the degree of care. Later, Sethna1982 found that IPA to be an effective tool for use in identifying critical parts of services that still remains to be improved. In 1991, O'Sullivan suggested the following four-step process to conduct the IPA: List every service items and then develop a questionnaire based on these listed items. Give a score to these items associated with of
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Importance and Performance for every service items. The first indicator of Importance is to reflect a customer's degree of care towards a product/service while the second indicator of Performance is specified to identify customer's degree of satisfaction to a product/service. Assign scores for each of the service items using a two-dimensional diagram with Performance on the X axis and Importance on the Y axis. Divide the entire diagram into four cells, using the mean scores on each axis as the dividing point.
Figure 1: Diagram of Importance Performance Analysis
High Importance (Degree of Care) --->
Employee
Human Resources Helpdesk for Competitve Advantage: An Importance Performance Analysis Of Select Hypermarkets In India 3. RESEARCH STRUCTURE : The study based on the overall research structure (refer Figure 2), intends to explain how the gap between Importance and Performance can be appropriately handled with thecomposition of different service items. A schematic representation of the Research Structure is appended below:
Figure 2 : Step-by-Step Research Structure
Service Items Recruitment Payroll Policy Administration Complaints Management Query Resolution Exit & Final Settlement Importance Gap Performance Service Improvement Strategies
II Concentrate Here
I Keep Up the Good Work
Categories
Low
III Low Priority
IV Possible Overkill
Reward Administration Technology Support (ESS/MSS) Ethics and Communication
Performance (Degree of Satisfaction) -----> High Low --
Cell I (Keep up the Good Work): This is an area of high importance and high performance that indicate customers care about the services and express high satisfaction levels. Hence, it is important to continue maintaining momentum on the product/service strengths. Cell II (Concentrate Here): This is an area that needs to be addressed since customers find it important while the performance of the product/ service has been low. It is wise to concentrate on this cell and leverage in developing positive employee engagement. Cell III (Low Priority): This is an area of low priority since neither the product/service has performed well nor the customer feels it's important to him/her. Cell IV (Possible Overkill): This is an area wherein the product/service is over bundled with fringes (possible overkill) while the same is of least importance from the customers' stand point.
3.1 Customer Categories : The data collected in the form of a questionnaire survey can further be classified based on criteria, such as respondents' gender (male or female) and educational backdrop (Undergraduate or Graduate) , tenure within the current organization (Less than One Year and More than a Year) etc. 3.2 Selecting Service Items : Bowen & Schneider (1982) pointed out that costumers usually assess the service quality according to their observed staff's behavior. This study uses seven service items to measure employee's perception on HR Shared Services Practice Recruitment, Payroll, Policy Administration, Complaints Management, Query Resolution, Exit & Final Settlement, Reward Administration, Technology Support (ESS/MSS), Ethics and Internal Communication. The quality of service is measured using five point Likert Scales. 3.3 Description of the Study Data : This research uses data from select retail Hypermarkets in India. Surveys were conducted using questionnaire that were administered randomly to the staff of select Hypermarkets that has across
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seven cities (Bangalore, Mumbai, Pune, Chennai, Delhi, Kolkata and Hyderabad). To ensure even spread thirty different hypermarkets were selected that has institutionalized HR Helpdesks. Because of time and cost constraints, the sample size is arrived using the below appended formula:
n=N/N(2d/Z/2)2+1 = n=309092/309092X(2X0.03/1.96)2+1 = 1063 (N=population size, n=sample size)
Table 1: Sample sizes in different levels of Sample Error in 95% Confidence Interval
Error (d) Sample Size (n) 0.01 9314 0.02 2382 0.03 1063 0.04 599 0.05 384
Table 3 : Importance analysis of overall respondents
Overall Employee (957 respondents,100% ) Service Items Recruitment Payroll Policy Administration Complaints Management Query Resolution Exit and Final Settlement Reward Administration Technology Support (ESS/MSS) Ethics and Communication Mean Score 4.15 (4.28)* 4.16 (4.43)* (4.62)* 4.22 4.17 (4.26)* 3.87 Priority 8 3 7 2 1 5 6 4 9
The total number of employees eligible for this study stood at 309,902 across India. The study therefore uses this number as the indicative population size (N). Given the acceptable sample error d=0.04, the confidence level 95%, and assuming the population size is 309,902; the expected sample size is 600. 4. DATA ANALYSIS : A total of 2000 questionnaires were administered of which 1300 of them were returned. From this a total of only 957 sample data that were completed in all aspects by respondents have been classified into several groups according to the selected criteria (see Table 2).
Table 2 : Data Classification
Classifications Gender Education Customer Attributes Male Female Graduate Under Graduate Number of Samples 678 279 438 519 Percentage 70.8% 29.2% 45.8% 54.2%
4.24 ( )*This indicates significant differences.
(2) Employee Importance Analysis Based on Different Employee Classifications The results of employee importance analysis, based on different employee classifications are listed in Tables 4 and 5. Important findings are discussed below. Difference Analysis Based on the respondent's educational backdrop: In this survey there are 438 respondents who are graduates (45.8%) and 519 respondents were undergraduates (54.2%). The analysis results with respect to importance between employees who are graduates to that of undergraduates are listed in Table 4. It indicates that the levels of importance for Graduates are generally lower than that of Under Graduates. The statistical analysis results also found that there is a significant d i ff e r e n c e b e t w e e n G r a d u a t e a n d Undergraduate Groups on the service items of Complaints Management, Technology Support and Ethics and Communication.
Difference Analysis Based on Gender: In this
The Importance-Performance Analysis (IPA) in this study was conducted as per the above three types of data classification. 4.1 Importance Analysis : (1) Overall Employee Importance Analysis Data analysis results listed in Table 3 indicate that employees in general pay more attention to the service items like Query Resolution, Complaints Management, Payroll and Technology Support. The Importance scores of these four service items are higher than the average scores of 4.24 for overall employees.
survey, there are 678 males (70.8%) and 279 females (29.2%). The analysis results with respect to importance between male group and female group are also listed in Table 5. It indicates that the level of importance for males is generally lower than that of females. However, the differences on all service items are not statistical significant, according to the
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t-statistics test on the 95% confidence interval.
Table 4 : Importance analysis based on respondents educational background
Education Graduate Under Graduate (438 Respondents, 45.8%) (519 Respondents, 54.2%) Service Items Recruitment Payroll Policy Administration Complaints Management Query Resolution Exit and Final Settlement Reward Administration Technology Support (ESS/MSS) Ethics and Communication Mean Score 4.10 4.24 4.11 (4.38)* 4.60 4.18 4.14 (4.23)* (3.82)* Priority 8 3 7 2 1 5 6 4 9 Score 4.20 4.32 4.21 (4.47)* 4.61 4.25 4.19 (4.28)* (3.90)* 4.27 Priority 6 3 7 2 1 5 8 4 9
Human Resources Helpdesk for Competitve Advantage: An Importance Performance Analysis Of Select Hypermarkets In India (2) Employee Performance Analysis Based on Different Employee Classifications The results of employee performance analysis based on different employee classifications are listed in Tables 7 and 8. Performance Analysis based on respondents educational background: From Table 7, it can be seen that the performance levels of Graduate employees are generally higher than those of Undergraduates. According to the statistics analysis, the differences are significant between Graduates and Under Graduates on the service items of Complaints Management, Query Resolution, Exit and Final Settlement and Technology Management. Performance Analysis based on respondents gender: The performance analysis results between male and female groups are also listed in Table 8. It indicates that the performance levels for females are generally lower than that for males. However, the differences on all service items are not statistical significant.
Table 7: Performance Analysis based on respondents educational background
Education Graduate Under Graduate (438 Respondents, 45.8%) (519 Respondents, 54.2%) Service Items Recruitment Payroll Policy Administration Complaints Management Query Resolution Exit and Final Settlement Reward Administration Technology Support (ESS/MSS) Ethics and Communication Mean Score 3.92 (3.80)* 4.04 (3.77)* (3.82)* (3.70)* 3.39 (3.83)* 4.02 Priority 3 6 1 7 5 8 9 4 2 Score 4.07 (3.98)* 4.10 (3.92)* (3.99)* (3.90)* 3.63 (3.94)* 4.13 Priority 3 5 2 7 4 8 9 6 1
4.20 ( )*This indicates significant differences.
Table 5: Importance analysis based on respondents gender

Gender Male Female (678 Respondents, 70.8%) (279 Respondents, 70.8%) Score Priority Score Priority 4.13 8 4.20 7 4.29 3 4.27 4 4.14 7 4.18 8 4.40 2 4.48 2 4.61 1 4.66 1 4.22 5 4.23 5 4.16 6 4.22 6 4.23 4 4.33 3 3.85 9 3.91 9 4.23 4.28
Service Items Recruitment Payroll Policy Administration Complaints Management Query Resolution Exit and Final Settlement Reward Administration Technology Support (ESS/MSS) Ethics and Communication Mean
4.2 Performance Analysis (1) Overall Employee Performance Analysis Data analysis results listed in Table 6 indicate that employees feel more satisfied on the service items of Policy Administration, Ethics and Communication, Recruitment, Technology Support, Query Resolution and Payroll. The scores of Performance of these six service items are higher than the average score of 3.89.
Table 6 : Performance analysis of overall respondents
Overall Employee (957 respondents,100% ) Service Items Score Priority Recruitment (4.00)* 3 Payroll (3.89)* 6 Policy Administration (4.08)* 1 Complaints Management 3.84 7 Query Resolution (3.90)* 5 Exit and Final Settlement 3.82 8 Reward Administration 3.52 9 Technology Support (ESS/MSS) (3.92)* 4 Ethics and Communication (4.07)* 2 Mean 3.89 ( )*This indicates significant differences.
3.81 3.92 ( )*This indicates significant differences.
Table 8: Performance Analysis based on respondents gender

Gender Male Female (678 Respondents, 70.8%) (279 Respondents, 70.8%) Service Items Recruitment Payroll Policy Administration Complaints Management Query Resolution Exit and Final Settlement Reward Administration Technology Support (ESS/MSS) Ethics and Communication Mean Score 4.03 3.88 4.11 3.85 3.92 3.84 3.57 3.95 4.10 3.92 Priority 3 6 1 7 5 8 9 4 2 Score 3.95 3.91 4.00 3.81 3.86 3.76 3.40 3.85 4.02 3.84 Priority 3 4 2 7 5 8 9 6 1
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4.3 Importance Performance Analysis : This research applies the IPA diagram, proposed by Martilla and James 1977 , to study the Importance and Performance perceptions for employees and these are classified into different groups. 4.3 (a) IPA Grid of Service Items for Overall Employees : For overall employees, Figure 3 shows the level of Importance and Performance on the nine service items listed for the HR Helpdesk services. Based on the results of IPA, it seems that only the item Exit and Final Settlement is located in the Concentrate Here cell, which means that HR professionals need to pay more attention to improve the Exit and Final Settlement. The Reward Administration is in the cell of Low Priority, while the items of Query Resolution, Technology Support, Payroll and Complaints Management are in the of Keep Up the Good Work. Finally the items on Policy Administration, Recruitment and Ethics and Communication are in the Possible Overkill Cell.
Figure 3: IPA grid for services items for overall respondents
Figure 4: IPA grid for services items for graduate respondents
With respect to Under Graduates, Figure 5 shows the degrees of Importance and Performance on these nine service items. From the Under Graduates perspective, the result of IPA indicates that Hypermarkets needs to pay more attention to their Complaint Management. The service items like Query Resolution, Payroll and Technology Support are in the Keep up the Good Work cell and need to be kept up. Reward Administration is in the cell of Low Priority. However, the items of Recruitment, Policy Administration and Ethics and Communication are in the Cell of Possible Overkill. It means that Hypermarkets may consider reallocating the efforts on these items to others.
Figure 5: IPA grid for services items for undergraduate respondents
4.3(b) IPA Diagrams for Graduate and Under Graduate Employees : For Graduates, Figure 4 shows the degrees of Importance and Performance on those nine service items. The results for Graduates seem to reveal that Hypermarkets needs to pay sufficient attention to the improvement of Query Resolution and Complaints Management since they figure in the Concentrate h e r e c e l l . Te c h n o l o g y S u p p o r t , R e w a r d Administration and Exit and Settlement are in the cell of Low Priority while recruitment, Policy Administration and Ethics and Communication are Possible Overkill areas.
4.3(b) IPA Diagrams for Male and Female Employees : For male employees of Hypermarkets, Figure 6 illustrates their levels of Importance and Performance on these nine service items. From the perspective of male employees, the results of IPA suggest that Hypermarkets shall pay more attention to upgrade the Payroll Services. The items of Query Resolution and Complaints Management are in the Keep up the Good Work Cell and should be kept up. Technology Support, Recruitment and Ethics and Communication are in the Possible Overkill Cell. However, the items of Reward Administration and
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Exit and Settlement are relatively less important. Hypermarkets may consider diverting the current level of efforts on these items to other essential tasks.
Figure 6: IPA grid for services items for male respondents Table 9: Service Improvement Action Plan Matrix
Service Items Recruitment Payroll Policy Administration Complaints Management Query Resolution Exit and Final Settlement Reward Administration Technology Support (ESS/MSS) Ethics and Communication Overall Male Female Graduate Under Graduate
O O V
O O V

V V

O V

V O V
V Located in the Cell II of Concentrate Here. Located in the Cell III of Low Priority. Located in the Cell IV of Possible Overkill. O Located in the Cell I of Keep Up the Good work.
Figure 7 shows the degrees of Importance and Performance on these nine service items from female employees' perspective. Service items like Query Resolution, Complain Management, Technology Support and Exit and Final Settlement are the areas that need to be focused on. Reward Administration is relatively less important, and Hypermarkets may consider reallocating efforts here to other items. Again, Recruitment, Policy Administration and Ethics and Communication are in the Possible Overkill cell.
Figure 7: IPA grid for services items for female respondents
From the service improvement action plan matrix
it is clear that Exit and Final Settlement needs to be concentrated for service level improvement as their performance has found representation for Overall, Under Graduate and Female Categories.
In all of the above analysis, Recruitment, Policy
Administration and Ethics and Communication are highly rated and are possible areas of overkill and hence while their performances have been good, they are the less important from the employee's standpoint.
Female employees have to be catered to in a better
way since in this category, Query Resolution, Complaints Management, Technology Support, Exit and Final Settlement all have representation in Concentrate Here cell.
However, comparing with other groups, for
CONCLUSION : This paper has presented an evaluation method for understanding employee services care and satisfaction with respect to some critical service items. The proposed method has also been applied in analysis of the employee services through the HR Helpdesk in select Hypermarkets with a comprehensive survey. Recommendations based on the survey results are summarized below in the Table 9.
Graduates, Query Resolution is an important factor that needs to be improved upon. This is due to their higher engagement levels with the helpdesk on variety of issues.
Further, for Under Graduates, Complaint
Management is found to be a service factor that needs to be improved upon. This is due to their requirement of greater information needed in comprehending issues affecting them.
From all the IPA classification and study, Reward
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Administration consistently figured in the cell of least priority. Although Reward Administration is important, these services are either not well publicized are internally or understood. Efforts
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need to be made in educating the employees on Helpdesk Reward Administration service offerings.
While the male employees rated complaint
Human Resources Helpdesk for Competitve Advantage: An Importance Performance Analysis Of Select Hypermarkets In India REFERENCES : Blake, B.F., L.F. Schrader and W.L. James., 1978, New tools for marketing research: the action grid, Feedstuffs 50(19), 38-39. Crompton, J.L. and Duray, N.A., 1985, An investigation of the relative efficacy of four alternative approaches to importance-performance analysis, Journal of the Academy of Marketing Science, Fall, 69-80. Day, R. L., 1977, Extending the concept of consumer satisfaction, Advances in Consumer Research, Vol. 4, No. 1, pp. 149-154. Dolinsky, A. L. and Caputo R.K. (1991) Adding a Competitive Dimension to Importance- Performance Analysis: An Application to Traditional Health Care System, Health Marketing Quarterly, 8(3/4), pp. 6179. Hayes, Robert (2001), Customer Loyalty: The competitive Advantage, Unpublished Manuscript. Havitz, M. E., Twynam, G. D., and DeLorenzo, J. M. (1991) Importance-Performance Analysis as a Staff Evaluation Tool, Journal of Park and Recreation Administration, 9(1):43-54. Halstead, D., & Page Jr., T. J. (1992), The effects of satisfaction and complaining behavior on consumers' repurchase behavior, Journal of Satisfaction, Dissatisfaction and Complaining Behavior, 5-11. Martilla, J. A., and James, J. C. (1977), An Importance -Performance Analysis, Journal of Marketing, 411, 77-79. Mitra, A. (1993), Fundamentals of Quality Control and Improvement, Macmillan Publication, NY. Parasuraman, A., V.A. Zeithaml, and L.L.Berry (1985), A Conceptual Model of Service Quality and Its Implications for Future Research, Journal of Marketing, Vol 49 Fall, 41-50. McGregor, D. (1960), The Human Side of the Enterprise, New York Edition, McGraw-Hill.
management and query resolution to be in the Keep up the Good Work cell, their female counterparts rated this as area that need to be concentrated upon by their employers.
From the all of the IPA matrix, payroll services
seemed to be the most consistent serice factor in Keep up the good Work cell. The study has conducted detailed analyses on the perceptions of employees on the nine selected service items. Some insightful recommendations have been proposed, based on the comparisons between different groups. In other words, IPA method has been successfully applied in the Hypermarket Employee Services analysis to assist Human Resources managers in developing employee service improvement action plans in response to their internal customers' needs and in keeping competitive edge. Future extensions of this study may include How to extend current study findings to the construction of new strategies for market segmentation and to explore the potentials of transferring the study findings to Supermarkets and other retail formats. LIMITATIONS OF THE STUDY : The study involved only those Hypermarkets with institutionalized HR Helpdesks. Another limitation of this study lies in sampling method that covered employees of Hypermarkets from only 7 major cities like Bangalore, Mumbai, Pune, Chennai, Delhi, Kolkata and Hyderabad and other Tier Two and Tier Three cities were ignored due to the paucity of time and resources. Further, the Supermarkets and Convenience Stores were outside the scope of this study. Although every attempt was made to explain each of survey questions listed in the questionnaire, the respondent's biases towards their dispositions cannot be ruled out.
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Oliver, R. L. (1981), Measurement and evaluation of satisfaction processes in retailing setting, Journal of retailing, 57(3), 25-48. Parasuraman, A., V.A. Zeithaml, and L.L.Berry (1985), A Conceptual Model of Service Quality and Its Implications for Future Research, Journal of Marketing, Vol. 49, 41-50. R u c c i A . J . , K i m S . P. a n d Q u i n n R . T. (1998),Employee-Customer-Profit chain at Sears, Harvard Business Review, 82-97. Sekaran U. (2003), Research Methods for Business: A Skill-Building Approach, 4th Edition, John Wiley & Sons Inc., New York. Sethna, B. N. (1982), Extensions and testing of Importance-Performance Analysis, Business Economics, September: 28-31. Thomas Lefevere (2004) An Examination of Links Between Employee Satisfaction andCompetitive Advantage in Service Industry, University of Memphis,177-184 Tornow, W., & Wiley, J. (1991), Service quality and management practices : A look at employee attitudes, customer satisfaction and bottom-line consequences, Human Relations learning, 14(2), 105-115. Treytl, Kristina J. (2002), The impact of employee satisfaction on customer satisfaction with the sales interaction, San Jose State University. Wilensky, H. (1961). Work, careers and social integration, International Social Science Journal, 12(4), 543-74. Woodside, A G., Frey, L. and Daly, R.T. (1989), Linking Service Quality, Customer Satisfaction, and Behavioral Intention, Journal of Care Marketing, 517.
Nitin Barekere is a researcher with Department of Social Sciences,JJT University, Jhunjhunu, India. He can be contacted at nitinbarekere@rediffmail.com. Rajkumar B K is with Department of Management Studies, JJT University, Jhunjhunu, India. He can be reached at rajkumarbkg@gmail.com
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11 M. S. Ramaiah Management Review Vol. 3, Issue 1, Jan-June, 2011
An Empirical Study of Intuitions Role in Corporate Decision - Making _______________________________________________________

Rangaraj G & R. Thimmarayappa
Abstract: Organizations are set up with clear purposes and their survival depends on right decisions. If purpose is the door to economic progress, Decisions are the keys to its survival. In a highly competitive world, especially during the period of recession, the quality of decision at every stage indicates the length of survival of the organizations. Managers are often confounded with the problem of Decision-making as time is too short and are often under extreme pressure to perform. From a given point, managers use their extreme knowledge and data with various tools for better decision-making. Rational and Non-rational decision-making are the two major theoretical classifications within which different choice could be made by the managers, the choice being invariably affected by the availability of time. This study focuses on six important variables that play significant role in decision-making with a sample size of 50 executives who represent both public and private sectors who are also pursuing with Management study (MBA). The analysis indicates that four out of the six variables have a positive role to play in intuitive business decisions. Besides, the study also indicates that management oriented education helps in better intuitive decision making and the effectiveness of intuition is very high when managers are faced with heavy time constraint. Irrespective of the type of business viz., Public or Private, intuition helps in filling the void while making decisions. Key Words: Intuition, Experience, Education, Time, Environmental uncertainty, Decision-making. Introduction : The management science is based on the scientific method and uses the rational approach to decisionmaking. It assumes that there is a logical, orderly way of making decisions that is transferable from one individual to another and is independent of decisionmakers emotions. The techniques of management sciences, most often is quantitative, though influence of intuitive and judgments in decision-making cannot be ruled out. The quintessential aspect about decision-making is generally laid out by two well know theories: Rational and Non rational. Business managers take a lot of decisions everyday and although some major past rational decisions may be remembered it is almost impossible to keep an account decisions made intuitively, the process itself involving some mental shortcuts. Further, decision is a function of time and choice and decisions are short lived. Consequently, there has been limited research work undertaken in this domain. Significance of Rational form of Decision Making : One major feature with rational form of decisionmaking is that the success or even failure could be attributed to some elemental component in a decision-making process. This would then form a knowledge bank and the managers could fall back on these in future similar situations. This is the strong reason why often it is the rational form of Decisionmaking that is preferred by the managers in corporate sectors. The theory of rational decision-making is the outcome of the calculus of probability sometime during the mid-seventeenth century exhibiting reasonableness of the choice. The progress and survival of the theory is mainly resting on the ideals of optimization by the process of selection of alternative that has the highest expected value. The availability of high quantum of data and the mind boggling speed with which the data can be processed to get information paving way for reasonably good decision-making has forced the modern managers to prefer the rational form of decision-making. The modern day Organizational set up questions a choice of preference over the other(s) when multiple alternatives exists at every level of hierarchy and this has lent more teeth to the rational form of decisionmaking. Significance of Non-Rational form of Decision Making Gigerenzer1 points out that Non-rational Theories on Decision-making identifies search as an important
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An Empirical Study of Intuitions Role in Corporate Decision - Making _______________________________________________________ component and does not rest on the principles of optimization but aim to describe the process and outcome of decision-making. Non Rational theories provide more realistic picture of decision-making especially when the decision-maker is constrained by time and knowledge is scarce leaving the future very hard to predict. Non-rational theories, particularly intuition is not given importance as corporate decision maker often rely on rational decisionmaking mainly on account of two factors. Scholars perceive intuition to fall within the realm of irrational or paranormal, falling beyond the scope of a scientific study 2 and two, the ability to provide a stepwise proof of account at any stage. The assumption that a systematic and careful analysis yields better choice than those coming from intuitive processes and as noted by Decision theorists that the accuracy of decision is inversely related to decision speed have further tilted the scale in favor of rational form of decision-making. However, there has been criticism on the rational theory about the human decision-maker by psychologists and economists. Voicing out against the assumption of intuitive processes being anyway inferior to rational decisionmaking, Mintzberg3 has identified the term Strategic Planning as oxymoron. He identifies strategy to possess the characteristics of synthesis while planning is about analysis and hence strategy cannot be planned. Consequently some work has been carried out to understand intuition as a means of decision-making in managing corporate affairs for relatively quick decisions 4 and for accuracy of 5 decision. Intuition as a method of decision-making in corporate is misunderstood and misinterpreted mainly due to the way the subject of intuition is handled. Intuition is used as a method of decision-making almost by everyone. People use intuition to advice, help and also to suggest various aspects relating to social and business issues of which they are not a part. Therefore they are only a part of non-corporate domain with a high guarantee that their failures would never be questioned. However, in corporate domain, the business decision-maker is responsible for his acts but Intuition as a method of decision-making cannot provide a back reference. Besides many are aware of what intuition would do but lack what it means. Therefore it behooves to understand the definition and characteristics of Intuition. Intuition Definition: Intuition is defined as an immediate awareness by the subject, of some particular entity, without such aid from the senses or from reason as would account for that awareness6. It is the act of grasping the meaning, significance, or structure of a problem without explicit reliance on the analytic apparatus of one's craft7. It is the subjective experience of a mostly nonconscious process fast, alogical and inaccessible to consciousness that, depending on exposure to the domain or problem space, is capable of accurately extracting probabilistic contingencies8 . Characteristics of Intuition: Though non-consciously intuitive processes are being used quite often in corporate Decision-making, it is imperative that specific features of Intuition are not understood about its application in Corporate Sector. There has been some confusing aspect about the process and outcomes as intuitive which necessitates the understanding of the characteristics of Intuition process9 . Intuition is Fast : The possibility of skipping a detailed step-wise sequence derived out of learned behavior sequences allowing an individual to choose the course of action from amongst alternatives is the main feature of intuition. The process is quick10. Agor11 and Burke & Miller12 hold that speed is the primary motivator for developing intuition in management. The intuitive process is developed over years of experience learning to separate mentally the irrelevant pieces of information from the critical ones. Intuition Covers Total Association : The process of Intuition does not associate the logical considerations but patterns or features are recognized. This is brought about through the process of matching the environmental stimuli with the patterns or features that are held by the individuals over a period. Agor13Shirley and Langan14recognize intuitive results to arise through the process of recognition and retrieval from large chunks or patterns stored in memory.
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An Empirical Study of Intuitions Role in Corporate Decision - Making _______________________________________________________ Intuition is Non-Conscious : Intuitive process occurs outside the conscious thought. Years of experience coupled with the refinement of processes in applying a procedure or providing a solution is only a fraction of crystallized facts that is accessible. Thus the power to draw from storehouse of memory is dependent on the ability, experience and refinement process of the individual. Ray & Myers15note that many years of preparation and work provides raw materials and conditions for incubation of ideas in the subconscious. Intuition not about Emotions : Ray & that Intuition does not come from emotion. Emotion involves psychological changes, often the strong feeling arising subjectively rather than conscious mental effort. Messages through Intuition does not flow clearly in situations of anger or joy as the receptive power of the consciousness are often blocked, the conscious already being occupied with other emotive intent. Objective : The study envisages applicability of intuition as a form of non-rational Decision - making by corporate executives. Methodology : The study covers the application of intuitive method of Decision-making in corporate sectors. The responses of 50 executives drawn on random sample using a five point Likert scale with the scale ranging from strongly agree to strongly disagree. The analysis is made in consonance with the objective and hypotheses. Based on the nature, the business units have been classified as production and service sectors. Six variables that play significant role in Decision - making using intuition are studied. These variables are brought out along with its impact in decision making. Hypothesis : Proposition 1 (P1): As the problem poses a heavy time constraint, intuitive Decision - making effectiveness increases. Myers16 argue Proposition 2 (P2): A higher relationship exists exists between Management oriented Education and Intuitive process in better Decision - making Proposition 3 (P3): Intuition fills in the void to bring about an effective Decision - making irrespective of classification of business in situations of environmental uncertainty. Results and Analysis :Requisite Experience : Experience is a key factor for managers in making corporate decisions. It is more important in intuitive form of Decision - making. The application of intuitive form of Decision - making would augur well in situations where the individual has adequate knowledge about the subject domain and skill to apply for specific situations. Both these come from experience. Burke and Miller17project the importance of experience while defining intuition as a cognitive conclusion based on a decision maker's previous experience and emotional inputs. Individuals draw intuitive knowledge from the storehouse and apply in adequate dose, which has invariably come through experience. This variable has a coefficient of variation of 29.27% which is the second lowest amongst the variables with a mean and variance of 3.86 and 1.27 respectively. Data Availability : Rational form would be preferred where abundant relevant data is available which provides for an indepth analysis and tracing of every step and method. This is because rational theories are normative18 . However, managers cannot always depend on the data available before them. This is because of two reasons. One - business environment is highly volatile which gives data too short a life and two: a tailor-made data for specific applicability is a rarity among business. In such situations, intuition would be a better Decision - making choice for managers. This variable has a derived coefficient of variation of 40.23% with a mean and variance of 3.48 and 1.97 respectively.
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An Empirical Study of Intuitions Role in Corporate Decision - Making _______________________________________________________

Table 1 Mean, Variance and Coefficient of Variation of Variables Table 2 Values of Chi-Square for testing Hypothesis
Variables
Requisite Experience Data Availability Dealing with alternatives Time Environmen tal Uncertainty Education
Mean Variance Coefficient of Variation 3.86 1.27 29.27% 3.48 3.40 1.97 2.12 40.23% 42.94%
Variables Time (P1) Education (P2)
Chi- Square 27.4 12.4
4.02 3.12
1.00 1.90
24.87% 44.23%
3.50
1.77
38.00%
Large Number of Alternatives: Where a large number of alternatives are derived out of application of managerial tools of evaluation, each of the alternatives appears to be more satisfying than the other and picking the right choice from amongst the alternatives would be difficult. This puts the Decision Maker in a quandary. Making a choice in an organization where functional departments conflict is high would be even more difficult as rational form of Decision - making is about optimization and thus in such situations intuition would be an ideal choice of Decision - making. The coefficient of variation derived for this variable is 42.94% with a mean of 3.40 and variance of 2.12. Time: Organizations are under constant pressure to perform in a competitive environment because their survival depends on its performance and such pressure percolate to the managers at all levels of hierarchy depending upon the position of the managers in the organizations. In such circumstances, time is the major element that is influential in Decision - making.
Time constraint is one of the six variables under study and has a higher consistency with a coefficient of variation 24.87%. The mean and variance for this variable is 4.02 and 1.00 respectively which is the highest and the lowest among the variables under study and thus appears to be an important variable. The data is tested for proposition P1 using chi square which yielded a value of 27.4 at 4 degrees of freedom and thus the proposition holds good subscribing to the view that the effectiveness of intuition is higher when managers are faced with heavy time constraint. This finding is in accordance with the results described by 19 Fredrickson & Mitchell who hold the view that fast decisions are achieved by using a less thorough strategic decision-making process involving limited information, analysis and participation. Though pressure for manager is alike irrespective of choice of Decision - making viz., rational or non-rational, intuition, by providing several shortcuts through mental ability of the decision maker provide respite against the ticking of the clock. Education: As business gets tougher, understanding the business environment and application of right tool for evaluation of a proposal is necessary. Since the business environment is very dynamic, it is necessary for every manager to hone skills of business to be able to compete and win. And such skills could be learnt invariably through education either formal education or through corporate training. The approach to a problem solving could be a lot easier with a combination of education and experience. The support of education as a variable in intuitive decision has a coefficient of variation of 38%. The mean and variance for this variable are 3.5 and 1.33 respectively. The chi-square value of 12.4 at 4 degrees of freedom supports the proposition P2 that the management oriented education offers for a better
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An Empirical Study of Intuitions Role in Corporate Decision - Making _______________________________________________________ intuitive decision-making. There are no studies explicitly testing the assertion on P2 because researches on intuition consider education to be an integral part of experience. The proposition P2 is explicitly tested here because all the respondents have a minimum basic qualification of graduation and all are pursuing with post graduation study in management (MBA). Although the specific intents of respondents to pursue with MBA are not examined here it is apparent that advancement in career entails a higher decision-making power, which may come through possessing an MBA qualification.
Table 3 Values of ANOVA for testing Hypothesis
business decision-making. On a five-point scale the average value of all the six variables are found to be more than 3 suggesting that intuition has a positive role to play in the business decision-making. A major finding of the study is the preference of intuitive method when managers are faced with time constraint. Although for any business decision, time would be a limiting factor the consequence of decision is more important irrespective of the method chosen viz., rational or non-rational. What characterizes the preference of intuition over other forms of decision methods is the speed and reduction in the number of steps. The Time variable showed low variance (1.00), which implies agreement among respondents about importance attached to Intuition when time puts a severe constraint while making decision. Education appears to have a profound effect on intuitive form decision-making. The exposure that one gets by undergoing the curriculum that covers most managerial topics provide a better focus on the subject and may help in better decision-making. Intuition in such a case may help by providing shortcuts, which further helps in quick decisionmaking. There is an agreement among respondents about the effectiveness of experience in intuitive form of decision-making. This variable showed a low variance (1.27). The problem solving capability and thus taking a decision is mainly dependent on the knowledge in the relevant domain and this comes from experience. This is in accordance with the findings of Agor21who is of the opinion that intuitive processes, in part, is based on inputs from facts and experience gained over the years and experiences are the accumulated memory of past impressions, actions, and achievements. Irrespective of the type of business viz., Private or Public, in situations of environmental uncertainty, Intuition is preferred although a higher variance (1.90) indicates that there is no general agreement among respondents. Intuition is likely to play significant role in view of the complexity and dynamism of business environments. The variances for the other two variables under study viz., Data availability and Dealing with large number
Variable Environmental Uncertainty (P3)

Environment :
ANOVA F - Ratio 1.288
Micro environment is internal and hence controllable by the business. It is the volatility of macro environment that has a direct and profound effect on business units. Business units may be classified based on type, nature, size etc., Irrespective of the classification it is the good business decisions that paves way for growth. Khatri & Ng20 analyzed three types of business units to understand the effect of intuition. In the present study, the classification of business is made sector-wise viz., Public and Private. This variable has the highest coefficient of variance at 44.23%. The mean and variance are 3.12 and 1.90 respectively. One way ANOVA is carried out which signifies that intuition is playing its role to fill up the void irrespective of classification of business (F Ratio =1.288, p>0.05) supporting P3 proposition. Discussion and Conclusions : Though Intuition as a method of decision-making has been practiced by managers its application in the managerial field has not been explored much. This study has indicated the importance of Intuition in
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An Empirical Study of Intuitions Role in Corporate Decision - Making _______________________________________________________ of alternatives are high compared to other variables and thus these variables have not much significance in preferring intuition a means of decision-making. References: G, International Encyclopedia of the Social and Behavioral Science, Vol 5 Elsevier Science. (2001) Khatri, N., & Ng. H.A., The Role of Intuition in Strategic decision-making. Human Relations. (2000) Mintzberg, H., The rise and fall of strategic planning. The Free Press: New York. (1994) Perlow, L. A., Okhuysen, G. A., & Repenning, N.P., The Speed Trap: Exploring the relationship between decision-making and temporal context: Academy of Management Journal 45: 931-955, (2002)
5 6 4 3 2 1 Gigerenzer 11 Agor,
W.A, The Logic of Intuition. How Top Executives make important decisions. Organizational Dynamics 14/3, 5-18 (1986)
12Bruke,
L.A, & Miller, M.K., Taking the Mystery out of Intuitive decision-making. Academy ofManagement Executives 13 (4); 91-99 (1999)
13Agor,
W.A., Intuition in Organizations: Leading and managing productivity. Newbury Park, CA Sage. (1989)
14Shirley, D.A., & Langan Fox, J., Intuition: A review
of the literature,. Psychological Reports 79: 563-584 (1986) Ray, M & Myers, R.. Practical Intuition. In W.H. Agor (Ed) Intuition in organizations, 247-262. Sage Publications: Newbury Park, California. (1990)
16 17 15
Ibid.,
Khatri & Ng., Op.cit (2000)
Burke and Miller Op.cit., (2000) Gigerenzer Op.cit (2000)
Wild, K.W., Intuition: Cambridge: Cambridge University Press. (1938) Bruner, J.S.. On Knowing. Cambridge, MA: Harvard University Press. (1962) Lieberman, M.D.. Intuition: A Social cognitive neuro-science approach. Psychological Bulletin 126: 109-137 (2000) Drik Dane & Michael G. Pratt: Academy of Management Review 2007 Vol 32 No 1(2000)
10 9 8 7
18 19
Fredrickson, J.W & Mitchell, T.R., Strategic decision processes. Comprehensiveness and performance in an industry with an unstable environment. (1984)
20
Khatri & Ng Op.cit (2000)
W.A, The logic of intuition: How top executives make important decisions; in Intuition in Organizations, 157-170. Sage Publications: Newbury Park, California.(1990)
21Agor,
Seebo, T.C., The Value of experience and intuition. Financial Management 22.1.27 (1993)
Rangaraj G is a Research Scholar in University of Mysore. He can be contacted at rangaraj_95@yahoo.co.in R. Thimmarayappa holds a doctorate and is with Department of Commerce, Maharaja's College, University of Mysore, Mysore.
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Adoption of Internet Banking A Glimpse On Influencing Variables _______________________________________________________ Ajimon George & Gireesh Kumar Abstract: The purpose of this paper is to explore the factors influencing the adoption of IB services and to suggest a theoretical model, by drawing up on several theories on Technology adoption and empirical evidences through extensive literature review. The suggested model integrates TAM, TPB, IDT, DTPB and institutional forces. However, the validity of the model suggested in this paper is subject to empirical testing. The influencing variables incorporated in the model are perceived usefulness, social influence, awareness of services, product involvement, perceived ease of use, computer and internet proficiency, perceived web security, perceived risk, perceived benefits, institutional forces, resistance to change, trust, and demographic variables. There are evidences in the literature that all these variables directly or indirectly affect the attitude of a person either positively or negatively and the attitude has a strong, direct, and positive effect on consumers' intentions to actually use the new technology or system, i.e. Internet Banking (IB). An understanding of these factors are useful for bank administrators to better promote IB services to non-users and to improve customer services through IB. IB is one of the fastest rising services and is a powerful tool for improving customer satisfaction as well as increasing cross-selling opportunities. Therefore, banks should keep track of the ever changing banking industry and the latest updates of Internet technology to envisage future competition. However, banks should not neglect their branch networks as face to face communication is still vital. Keywords: Internet Banking, TAM, TPB, IDT, DTPB, WAP Banking Introduction : In this era of globalization, with increased competition around the globe in all sectors and with the proliferation of MNCs, many firms are modifying their strategies to reach customers worldwide more easily and cheaply. Therefore, banking industry also have attempted to attract customers and build customer satisfaction through providing better products and services by taking advantages of the technological developments, particularly in the area of telecommunications and information technology. Banks have always been in the forefront to harness technology for improving their products, services and efficiency. Internet is increasingly used by banks as a channel for receiving instructions and delivering their products and services to customers. The field of banking has made considerable progress, and the use of internet technology has become a very powerful force, changing the very core of traditional banking [1]. Internet banking is one of the latest innovations in the banking sector to attract and retain customers. It helps to eliminate costly paper handling and teller interaction in an increasingly competitive banking environment. The transaction costs of providing banking services on the net are lower than the traditional channel. Booz and Hamilton [2] found that the cost to deliver manual transaction at a branch was typically more than a dollar, while ATM and call center transactions cost about 25 cents, and internet transactions cost about a penny. Internet Banking is a product of e-commerce in the field of banking and financial services. In what can be described as Business-To-Customer (B2C) domain for banking industry, Internet Banking offers different online services like balance enquiry, requests for cheque books, recording stop-payment instructions, balance transfer instructions, account opening and other forms of traditional banking services. Mostly, these are traditional services now offered through Internet as a new delivery channel. The literature on 'banking through IT' seems to suggest that currently, the main multimedia delivery channel in banking is the internet, accessed via Personal Computer (PC). The terms, multimedia banking, Internet banking, e-banking and online banking are often used in the literature interchangeably, to refer to the same technology form [3]. The term electronic banking often refers to online
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Adoption of Internet Banking A Glimpse On Influencing Variables _______________________________________________________ banking/ internet banking. However, electronic banking is an upper construct including also telephone banking, WAP-banking as well as i-Net television banking. In this study, the terms Internet Banking (IB) and Online Banking (OB) are used interchangeably. IB/OB is different from Electronic Banking (e-banking) in that the latter is a higher level activity that encompasses not only IB/OB, but also Telephone Banking, ATM, WAP-banking and other electronic payment systems that are not operated through the Internet. The Concept of Internet banking (IB) : A number of definitions about the concept of IB are found in the IB literature. A perusal of these definitions reveals the following; Internet banking can be defined as the use of technology to communicate instructions and receive information from a financial institution where an account is held. Internet banking includes the system that enables financial institution, customers, individuals or business to access accounts, transact business or obtain information on financial products and services through a public or private network, including the internet [4]. Internet banking refers to systems that enable bank customers to get access to their accounts and general information on bank products and services through the use of bank's website, without the intervention or inconvenience of sending letters, faxes, original signatures and telephone confirmations (Henry, 2000 cited by Tulani Dube et al., [5]). It differs from online banking in that internet banking provides universal connection from any location world wide and is universally accessible from any internet linked computer (Bradley and Stewart, 2003; Rotchanakitumnuai and Speece, 2003; Jan-Her Wu et al., 2006 cited by Tulani Dube et al., [5]). Internet banking is defined as the delivery of banking services through the open-access computer network (internet) directly to customers' home or private address (Lau, 1997 cited by Yiu Shing Chi et al., [6]). Pikkarainen [7] defines internet banking as an Internet portal, through which customers can use different kinds of banking services ranging from bill payment to making investments. Chang [8], Sullivan and Wang [9] consider internet banking, a process innovation whereby customers handle their own banking transactions without visiting bank tellers. It also allows non-customers to visit virtual banks via the public network while Phone banking or PC banking provide only closed networks limited to the existing client. Based on the above definitions, it can be concluded that internet banking is the use of internet by bank customers for transacting their banking transactions. In other words, it is the use of internet by banks to deliver banking services to customers irrespective of their geographical location. It is the delivery of traditional bricks and mortar banking services via non personal communication channel, viz, internet. The difference between traditional banking and internet banking is that, the latter brings home banking services, while the former brings customers to bank braches. Types of Internet Banking : Diniz (1998), Henry (2000) and M.U Yibin (2003) cited by Tulani Dube et al., [5] identify three functional level/kinds of internet banking that are currently employed in the market place and these are: informational, communicative and Transactional. Informational : This has been identified as the first level or basic level of internet banking. Typically the bank has the marketing information about the bank's products and services on a stand alone server. The risk is very low as informational systems typically have no path between the server and the bank's internal network. This level of internet banking can be provided by the bank or outsourced. Though the risk is very low, the server or Web site may be vulnerable to alteration. Therefore, banks should take appropriate control measures to prevent unauthorized alterations to the bank's server or Web site. Communicative / Simple Transactional : This type of internet banking allows some interaction between the bank's systems and the customer. The interaction is limited to e-mail, account inquiry, loan application or static file updates (names and address changes). It does not permit any fund transfer.
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Adoption of Internet Banking A Glimpse On Influencing Variables _______________________________________________________ In this form of internet banking, the risk is higher than informational systems because the servers may have a path to the bank's internal networks. Therefore appropriate controls need to be in place to prevent, monitor and alert management of any unauthorized attempt to access the bank's internal networks and computer systems. Virus controls also become much more critical in this environment. Advanced transactional : This level of internet banking allows banks customers to electronically transfer funds to/from their accounts. Since a path typically exists between the server and the bank's or outsourcer's internal network, this is the highest risk architecture and must have the strongest controls. Customer transactions include accessing accounts, paying bills, transferring funds etc. Customer expectations from IB can be conveniently categorized under four different categories, namely, view-only functions, account control functions, new services and reconciliation functions. The categorization of customer expectations were derived from studies carried by Gandy and Chapman [10]; Gandy and Brierly [11] and Gandy [12]. View only: (1) Check balances (2) View statements/Account (3) Historical records. It is found that more than 60 per cent of the customer inquiries concern details about balances and the last few transactions made by the customer [12]. Reeti Agarwal et al., [13] opined that using e-banking for balance inquiry to be the most useful, closely followed by inter-account transfer of funds. Account control : (1) Accounts amendment (2) Order cheque books (3) Transfer funds (4) Pay bills to third parties (5) Standing orders/direct debit (6) Order/Print statements (7) send messages (8) Pay credit card bills New Services : (1) apply for loans (2) Open current accounts (3) Open savings accounts (4) Apply for credit cards (5) Apply for mortgages (6) Apply for insurance (7) Reconciliation/integration, Internet banking Indian Scenario : ICICI Bank, the second largest bank in the country after SBI, in terms of asset size, is the first Indian bank to offer Internet banking in 1996. It is the first bank in India to launch a web site, and then follow it up with internet banking. After ICICI bank, IndusInd Bank and HDFC Bank were the early ones to embrace the technology in 1999. Internet banking, both as a medium of delivery of banking services and as a strategic tool for business development, has gained wide acceptance internationally and is fast catching up in India with more and more banks entering the fray. A study on the Internet users, conducted by Internet and Mobile Association of India [14] revealed that about 23% of the online users prefer Internet banking as the banking channel in India, second to ATM which is preferred by 53%. Out of the 6,365 Internet users sampled, a significant number of online users do not use Internet banking, and hence there is a need to understand the reasons for not using it. Having deployed a centralized CORE banking application systems, a number of banks in India, over the last 3-5 years, have been trying to create multiple delivery channels such as Internet banking, ATMs, call centers, mobile banking, and so on. Though many articles about IB are found, a detailed account of the factors influencing the adoption of IB services based on both theoretical and empirical support are seldom found. This research article is an attempt to address this gap. The primary objective of this paper is to explore the factors influencing the adoption of IB services through extensive literature review and to suggest a theoretical model, the reliability of which is subject to empirical testing. Theoretical Background : The literature on innovation adoption shows that there are several theories that explain the factors influencing the adoption of new technologies. Fishbein and Ajzen [15] in their Theory of Reasoned Action (TRA) posit that behavioural intentions are determined by (a) an individual's attitude towards the behaviour and (b) subjective norms surrounding the performance of the behaviour. An attitude towards adopting an innovation is derived from an individual's beliefs that adopting the innovation will
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Adoption of Internet Banking A Glimpse On Influencing Variables _______________________________________________________ lead to certain consequences. Intention to perform a behavior will take place if the individual has a positive evaluation of performing the behaviour. The more favorable the attitude with respect to certain behaviour, the stronger should be an individual's intention to adopt the behaviour. Subjective norm refers to a person's perceptions of the social pressure to engage in a certain behavior. The idea suggest that attitudes and beliefs of others ( friends, family, colleagues, peers etc.) in groups to which a person belongs will shape his/her behaviour towards the usage of a specific technology. According to Roger's [16] Innovation Diffusion Theory (IDT), innovation adoption is a process of uncertainty reduction. To reduce uncertainty about the new technology, individuals will gather and synthesize information about the technology. Based on three decades of innovation study, five key attributes affecting the adoption of any innovation were suggested. These five characteristics are relative advantage, compatibility, trialability, observability and complexity. The first four attributes are positively and the last attribute is negatively related with the adoption rate. Perceived relative advantage refers to the degree to which an innovation is perceived as being better than its precursor. If reflects one's assessment of the extrinsic benefits received when the innovation is adopted or used. The IB services offer relative advantages when compared to branch banking and other alternative methods in terms of price, convenience and performance. Perceived compatibility refers to the degree to which an innovation is perceived to be compatible with existing values and current needs. Roger [16] suggested that an innovation that is perceived to be consistent with existing values, past experiences and current needs is more likely to be adopted. IB services become compatible once they overcome the security and privacy concerns. Complexity: Complexity is the degree to which an innovation is perceived as relatively difficult to understand [17]. In other words, it refers to the extent to which the use of the innovation is easily understood and perceived to require little learning. The more complex the product or service is to understand and use, the slower is its adoption rate. Complexity is the direct antonym of ease of use offered in TAM. Trialability refers to the degree to which an innovation is perceived as being trialable on a limited basis prior to any decision to adopt [17]. When potential adopters are allowed to experiment with an innovation, they will feel more comfortable with the innovation and are more likely to adopt it. In the context of IB, it is the opportunity given to potential user to experiment with IB services. A more rapid diffusion occurs when consumers can have low-cost or low-risk trial of the service. It is an effective means of reducing the perceived risk. Observability: Observability of an innovation is the degree to which an innovation is visible to the other members of a social system [17]. The more easily consumers can observe the positive effects of adoption, the greater its chances of success. IB consumers are able to observe the positive effect of the service immediately. For example, they can check account activities, pay bills and make investment anywhere. Davis [18] developed Technology Acceptance Model (TAM), according to which 'users' adoption of computer system depends on their behavioural intention to use, which in turn depends on attitude, consisting of two beliefs, namely perceived ease of use and perceived usefulness. TAM is an adaptation of TRA in the Information System (IS) field. TAM theorizes that a technology that is easy to use, and if found to be useful will have a positive influence on the intended user's attitude which in turn increases intention towards using the technology that generates the adoption behaviour. Perceived usefulness is defined as the degree to which 'a person believes that using the system will enhance his or her performance'. Perceived ease of use, on the other hand, is defined as the degree to which 'a person believes that using the system will be free of mental effort' (Davis, 1989). TAM is one of the most utilized models for studying IS (Information System) acceptance [19]. TAM has been the instrument in many empirical studies and it has been found that its ability to explain intention and attitude towards using
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Adoption of Internet Banking A Glimpse On Influencing Variables _______________________________________________________ IT is better than TRA (Theory of Reasoned Action) and TPB (Theory of Planned Behaviour) [20]. TAM is a powerful, highly reliable, valid and robust predictive model that may be used in a variety of contexts [21]. However, in many studies additional variables have been introduced to TAM and these external variables have added the model's predictive power. Ajzen [22] in his Theory of Planned Behaviour (TPB), which is an extension of TRA, posits that behavioural intentions are a function of (i) an individual's attitude towards the behaviour, (ii) the subjective norms and (iii) the individual's perception of behavioural control. Perceived behaviour control reflects the individual's beliefs of his or her ability to perform the behavior, which are affected by external factors (e.g., time and money) and internal factors (e.g., ability and self efficacy). The TPB proposes that one's behavioural intention is influenced not only by the attitude and subjective norms but also by perceived behavioural control. This is based on the premise that individuals are likely to engage in a certain behaviour when they believe they have the required resources and confidence to perform the behaviour. Taylor and Todd [23] proposed the Decomposed Theory of Planned Behaviour (DTPB), which combines aspects of the TPB with aspects of IDT. The theory postulates that attitude, subjective norms and perceived behavioural control will influence the intention to use a technology. Taylor and Todd took the TPB one step further by decomposing the attitudinal, normative and perceived control beliefs into multi-dimensional constructs. This provided higher explanatory power and a more precise understanding of the antecedents of behavior. Attitude is decomposed into perceived usefulness, ease of use and compatibility, which influence the formation of attitude toward a certain behaviour. Subjective norm is decomposed into peer influences and superior influences, and perceived behavioural control is decomposed into self-efficacy, technology, and resources. Weihua Shi et al., [24] constructed a model, by drawing upon the social contagion theory and institutional theory, to investigate how institutional forces such as coercive pressures, normative pressures and mimetic pressures influence the acceptance of IB by individuals. Coercive forces are coercive pressures, for example, to use such financial services such as mortgage, loan and retirement account management, banks may require users to embrace IB. Normative forces suggest that individuals will be more likely to adopt IB if they perceive that a large number of other individuals in their social network have already adopted IB. Mimetic pressures suggest that individuals may selectively imitate the attitudes and behaviours that have been adopted by higher-status individuals. The model is empirically tested and the results reveal that normative and coercive pressures significantly influence the attitude and intention of adopting IB, while mimetic pressures appear not to. It is found that coercive pressures have higher influences on attitude and intention than normative pressures. Adoption of IB Influencing Variables : This paper explores the factors influencing the adoption of IB services and suggests a theoretical model, as shown in figure 1, by drawing upon the above theoretical framework and empirical evidences. The suggested model integrates TAM, TPB, IDT, DTPB and institutional forces. However, the validity of the model suggested in this paper is subject to empirical testing. The influencing variables incorporated in the model are detailed below. Perceived Usefulness : Perceived usefulness is defined as the degree to which 'a person believes that using the system will enhance his or her performance [18]. Perceived usefulness covers a wide range of aspects such as time savings, fast service, cost savings, instant access, opportunity cost savings( i.e, enables more time for work), and convenience i.e., banking from anywhere, any time [25]. Gerrard and Cunningham [26] noted that the perceived usefulness depends on the banking services offered such as checking bank balances, applying for a loan, paying utility bills, transferring money abroad and obtaining information on mutual funds. There are extensive evidences proving the significance of effect of perceived usefulness on adaptation intention [27, 25, 28, 29]. As a consequence, the greater the perceived
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Adoption of Internet Banking A Glimpse On Influencing Variables _______________________________________________________ usefulness of using IB services, the more likely that IB will be adopted [30]. Social Influence : Social influence plays an important role in determining the acceptance and usage behaviour of adopters of new IT [31]. In Taylor and Todd's [23] study, Social influences were equivalent to subjective norm and defined as other people's opinion, superior influence, and peer influence. Khalil and Michael [67] decomposed subjective norm, and the decomposition of subjective norm reveals that friends, family members and colleague or peers were found to have a significant positive effect on the subjective norm. Reeti Agarwal et al., [13] found that friends or relatives to be the most important in increasing their awareness level about e-banking and in influencing them to use it. The normative and mimetic forces used by Weihua Shi et al., [24] are almost found to be synonymous to social influence and subjective norms and therefore the researcher propose to combine all these constructs into one. The impact of social influence on customers' perceived usefulness is empirically tested and the impact is found to be positive [32, 33]. Hence in the proposed model the same relationship is taken. Awareness of Services and its Benefits : The adoption or rejection of an innovation begins when Consumer becomes aware of the product [34, 35]. An innovative product or service will not enjoy great success unless consumers are aware of its existence and the potential benefits it offers. OB services are quite a new experience to customers and many customers are unaware about these services and its benefits. Many studies found that lack of awareness of OB is found to be one of the reasons for non adoption of OB services [36, 64, 37]. Guiltinand and Donnelly [38] emphasized on the importance of awareness before adoption of any innovative products. To create awareness about IB services and its benefits, banks should make extensive marketing efforts. Polatoglu and Ekin [39] argued that marketing effort in Turkey had a positive influence on e-banking acceptance. The extant literature supports the hypothesis that awareness of services and its benefits has positive impact on customers' perceived usefulness [36, 7, 33] and the same relationship is proposed to be continued in the suggested model. Product Involvement / Financial Services Involvement : Product involvement has been defined as the degree of personal relevance of an object, product or service to a customer based on inherent needs, values and interests [40]. In the context of banking services, an individual will be involved with such products if he or she is interested in reading information about financial services either in the press or in consumer reports, usually makes a lot of product comparisons when considering a financial product, pays attention to financial advertising or discusses financial products with friends. Product involvement concept is different from usefulness concept in the sense that the former refers to the product itself (i.e. IB services) while the latter refers to the perceived advantages of using the product. Research studies have suggested that user involvement may lead to an increase in both perceived usefulness and perceived ease of use. McKechnie et al., [41] and Manzasno-Aldas [42] pointed out that consumers who are highly involved with financial services perceive IB services as easier to use than low involved consumers do. The same hypothesis is proposed to be continued in the suggested model. Product involvement has also been identified as a factor influencing internet banking services use [43]. Perceive Ease of Use : Perceived ease of use is defined as the degree to which 'a person believes that using the system will be free of mental effort' [18]. Zeithaml et al., [44] stated that the degree to which an innovation is easy to understand or use could be considered as perceived ease of use. According to Mathieson [45] the perceived ease of use is the consumer's perception that banking on the internet will involve minimum of effort. PEOU may cover aspects such as accessibility/speed of internet, ease of performing IB transactions and, ease of navigation in the bank site. Consult [46] affirmed that the drivers of growth in electronic banking are determined by the perceived ease of use which is a combination of convenience provided to those with easy internet access, the availability of secure, high standard electronic banking functionality, and the necessity of banking
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Adoption of Internet Banking A Glimpse On Influencing Variables _______________________________________________________ services. Many studies provide evidence of the significant effect of perceived ease of use on usage intention, either directly or indirectly [29, 47, 73]. Computer Self - Efficacy : Computer Self-efficacy is defined as an individual's self confidence in his or her ability to perform tasks across multiple computer application domains [48]. Several studies have examined the relationship between self-efficacy with respect to computer use [48, 18]. Wang et al., [49] find that computer selfefficacy and perceived ease of use are related. Khalil and Michael [67] decomposed perceived behavioural control, and the decomposition of the perceived behavioural control into self efficacy and resource facilitating conditions reveals that these are two significant factors that can affect an individual's perception of his/her ability to use IB. Thus based on the empirical support, it can be stated that the stronger a person's computer self-efficacy, the more likely he/she tries to adopt IB services. Prior Experience of Computers : Since the OB services are delivered through the medium of internet, consumers have to be familiar with a set of accompanying technologies such as a personal computer and a web browser [50]. Customers' prior experience in using computers and internet ease the complexity of using IB services. Proficient users of the internet will consider accessing OB services to be less complex and will therefore show a greater proclivity to use it [51]. IB Familiarity : Katariina et al. [52] examined the role of 'familiarity', which refers to some specific activity, e.g., whether or not the consumer has previous experience in buying on the internet or whether the consumer feels familiar with a specific website or vendor, and found that familiarity has a significant impact on IB consumer perceptions and preferences. They operationalised the concept of IB familiarity by using two variables, frequency and length of IB use. Familiarity in using IB is found to have a significant influence on the perceived usefulness of IB [53]. Thus based on the extant literature, there seems to be a theoretical overlap among the above three constructs, viz., computer self-efficacy, prior experience of computers and IB familiarity and accordingly in the proposed model, the researcher proposes collapsing these three constructs in one and would like to call it 'Computer and Internet Proficiency'(CIP). Internet Access, It's Speed and Cost : The availability of access to computers/internet is a pre-requisite for adoption of IB. The more widespread the access to computers/internet, the greater the possibility of use of IB. Table 1 gives an idea about India's relative position in the penetration of internet vis--vis other developed and emerging economies. As revealed in the table, penetration of internet in India is abysmally low in comparative terms. Therefore, when compared to other developed countries, India is still in the early stages of internet banking growth and development.
Table 1 - Penetration of internet in India and other developed and emerging economies
Country India Austria Australia China France Germany Japan Singapore Switzerland United Kingdom United States Internet users per 100 people in 2009 5.3 73.5 72.0 28.8 71.3 79.5 77.7 73.3 70.9 83.2 78.1
Source : World Development Indicators, World Bank (http://www.worldbank.org.data)
There are empirical evidences which identified lack of access to computers/internet as one of the possible reasons for slow adoption of IB [54, 69]. Internet access and its speed is found to be one of the factors affecting the adoption of online banking [36]. The consumers have to pay not only the bank fees and charges, but also they have to bear the costs associated with internet activities. As pointed out by Sathye [36], the costs of internet banking services are twofold. The cost, in general, depend on the specific type of internet connection used : broadband or dialup access. Customers using broadband have to pay a flat monthly fee, whereas those using a dial up access are charged on a per-minute basis. The marginal cost connection for broadband subscribers is zero and therefore it is expected that they are more favorably
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Adoption of Internet Banking A Glimpse On Influencing Variables _______________________________________________________ inclined towards I.B. They also do not suffer from the slow connection problem associated with the telephone line modems, which on its own can discourage certain people from adopting OB [55]. Perceived Web Security : (PWS) defined by Salisbury et al.,[56] as the extent to which one believes that the World Wide Web is secure for transmitting sensitive information. It is noted that the adoption of purchasing products on the WWW may involve a greater risk than the adoption of other IT innovations. When one purchases products online, there may be a perception of risk involved in transmitting sensitive information such as credit card numbers across the WWW. Security refers to the reliability of IB and an overall belief on the part of the user that banking transactions can be completed confidentially and safely. There are plenty of evidences in the existing IB literature that security is found to be an important factor for the adoption of IB services [57, 58, 37, 59]. Since security is the ability to protect against potential risks, It can be concluded that the more the perceived web security, the lower would be the perceived risk. Perceived Risk : Peter and Ryan [60] defined perceived risk as a kind of subjective expected loss. Ming-Chi Lee [61] defined perceived risk in the context of IB as the subjectively determined expectation of loss by an online bank user in contemplating a particular online transaction. Most of the researchers claimed that consumer's perceived risk is a kind of multidimensional construct and five components or types of perceived risk in OB have been identified : financial, performance, social, privacy, and time/convenience. Financial Risk : Is defined as the potential for monetary loss due to transaction error or bank account misuse. Many customers are afraid of losing money while performing transactions or transferring money over the internet. At present OB transactions lack the assurance provided in traditional setting through formal proceedings and receipts. Thus, consumers usually have difficulties in asking for compensation when transaction errors occur [62]. Performance Risk : Refers to losses incurred by deficiencies or malfunctions of OB websites. Performance risk has to do with concerns that products and/or services will not perform as anticipated. Customers are often apprehensive that a breakdown of system servers or disconnection from the internet will occur while conducting OB transactions because these situations may result in unexpected losses [62]. Social Risk : Refers to the possibility that using OB may result in the possibility of negative responses from the consumer's social networks. The social status of the consumer who uses OB services may be affected because of positive or negative perceptions of IB services by family, acquaintances or peers [63]. It is possible that one's social standing may be enhanced or diminished depending on how OB is viewed. Privacy Risk : Has to do with the possibility that consumers' sensitive information such as usernames, passwords and credit card details will get disclosed due to phishing or hacking. A phising attack takes place when a user receives a fraudulent e-mail representing a trusted source that leads to an equally fraudulent website that is used to collect personal information. Both phising and hacker intrusion not only lead to users' monetary loss, but also violate users' privacy. Perceived fear of the divulgence of personal information and feelings of insecurity have a negative influence on IB services use [64]. Time / Convenience : Risk refers to the perception that the adoption and the use of IB service will take too much time and cause inconvenience due to delay in making transactions because of low speed and difficulty in finding appropriate services and hyperlinks. It may also be related to learning how to operate OB website. The time risk may be related to the time involved in dealing with erroneous transactions and downloading information [65].
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Adoption of Internet Banking A Glimpse On Influencing Variables _______________________________________________________ Researchers have found that perceived risk is influenced by trust toward the transaction partner. When people trust others, they assume that those they trust will behave as they expected to, reducing the complexity of the interaction. Jarvenpaa and Todd [66] have shown that trust works as a mechanism for reducing consumers' perceived risk in internet shopping. Perceived Benefits : Perceived benefits include the four key attributes drawn from Roger's Innovation Diffusion theory (IDT). They are relative advantage, compatibility, trialability and observability. Khalil and Michael [67] found that specific factors such as relative advantage, ease of use, compatibility, trialability and image significantly affected the formation of attitude about IB. Institutional Forces : Institutional forces include coercive forces, normative forces and mimetic forces. Normative and mimetic forces are synonymous to social influence and subjective norms. Weihua Shi et al., [68] found that normative and coercive pressures significantly influence the attitude and intention of adopting IB, while mimetic pressures appear not to. It is further found that coercive pressures have higher influences on attitude and intention than normative pressures. Resistance to Change : Another factor that affects adoption is whether the existing mode of service or product delivery fulfils the customer's needs adequately. In the context of IB, telephone banking and brick and mortar branches are the existing modes of transacting banking business. Adoption of new technologies often comes across a certain amount of resistance to change from present ways of operating. Generally, Unless there is a need customers may not try to change from the traditional form of banking. The issue of customer's resistance to change from traditional ways of conducting banking activities to OB has received considerable attention in the literature [36, 69]. In the context of adoption of technology, Quinn and Mueller [70] stated that human beings what they are, there tend to be resistance to change. Trust : Studies of OB have shown that trust is a critical factor in stimulating OB operations [71, 72,73]. Doney and Cannon [74] define trust as the perceived credibility and benevolence of a target of trust. The first dimension of trust, perceived credibility is the extent to which one partner believes that the other partner has the required expertise to perform the job effectively and reliably [75]. Benevolence concerns the consumer's belief that the company is interested in his or her welfare, has no intention of behaving opportunistically and it is motivated by the quest for mutual benefit. Studies found that perceived ease of use is an antecedent of trust and PEOU increases trust [76, 77]. However, Kent Eriksson et. al., [78] considered trust in IB as an antecedent to ease of use and perceived usefulness and found that trust has a positive effect on both ease of use and usefulness. Demographic Variables : There are enough evidences in the literature that demographic variables such as age, gender, education and income affect the adoption of IB. Reeti Agarwal et al., [79] observed that the usage frequency of IB services significantly depended on the age of respondents and that people in the age group of 31-45 years using e-banking most frequently. With the increase of age the amount of time spent over the internet may decrease drastically thus reducing the interest to do online shopping. Income, level of education and working status of the women are also found to be positively associated with online shopping [80]. IB is found to be clearly favoured by educated males living in highly urbanized area. Furthermore, mature customers over the age of 65 and minors under the age of 18 were less likely to use IB [81]. Gender wise usage of the internet banking reflects polarization towards males [82]. Wai-Ching [83] found that different age groups, education level, income level, are having significant relationships with the usage of e-banking. The young age group is more computer literate and finds it easy to accept and use new technologies.
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Adoption of Internet Banking A Glimpse On Influencing Variables _______________________________________________________ Attitude : Attitude (ATT) refers to an individual's positive or negative feelings (evaluative affect) about performing a particular behaviour [15]. TAM suggests that attitude is based on the salient beliefs which a person has about the consequences of a given behavior and his or her evaluation of those consequences. In IB context, consumers' attitude towards IB is influenced by Perceived usefulness, perceived ease of use, perceived risk, perceived benefits, institutional forces, resistance to change, trust and demographic variables as shown in figure 1. There are evidences to prove that attitude has a strong, direct, and positive effect on consumers' intentions to actually use the new technology or system [84, 85]. Conclusion : The factors influencing the use of IB services discussed above on the basis of empirical support from IB literature have important implication for Banks. These factors are useful for bank administrators to better promote IB services to nonusers. The potential for internet banking in India is immense, considering the rising penetration levels of the internet in Indian homes and offices. More importantly, an understanding of these influencing factors helps banks to improve customer services through IB and to remove customer concerns regarding the use of IB, particularly the security concerns. IB is one of the fastest rising services and is a powerful tool for improving customer satisfaction as well as increasing cross-selling opportunities. Therefore, banks should keep track of the ever changing banking industry and the latest updates of internet technology to envisage future competition. Despite all these, banks should not neglect their branch networks as face to face communication is still vital. References :
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69. Daniel, E., (1999), Provision of electronic banking in the UK and the Republic of Ireland, International Journal of Bank Marketing, Vol. 17, No. 2, pp.72-82. 70. Quinn, R.B and Mueller, J.A. (1982), Transfering research results to operations, in Tushman and Moore (Eds), Readings in the Management of Innovation, Pitman, MA, p. 62. 71. Bomil, S. and Ingoo, H. (2002), effect of trust on customer acceptance of Internet Banking, Electronic Commerce Research and Applications, vol. 1, pp. 247-263. 72. Mukherjee, A. and Nath, P. (2003) A model of trust in online relationship banking, International Journal of Bank Marketing, Vol. 21, No. 1, pp.5-15 73. Suh, B. and Han, I. (2002) Effect of trust on customer acceptance of internet banking, Electronic Commerce Research and Applications, Vol. 1, pp.1-42. 74. Doney, P.M. and Cannon, J.P. (1997), An examination of the nature of trust in buyer-seller relationships, Journal of Marketing, Vol.61 No.2, pp.35-51.. 75. Ganesan, S. (1994), Determinants of long term orientation in buyer-seller relationships, Journal of Marketing, vol.58, No.2, pp.1-19. 76. Wu, I.L. and Chen, J.L. (2005), An extension of trust and TAM model with TPB in the initial adoption of on-line tax: an empirical study, Internation Journal of Himancomputer studies, Vil. 62 No.6, pp-784-808. 77. Gefen, D. Karahanna, E. and Straub, D.W. (2003), Trust and TAM in online shopping: an integrated model, MIS Quarterly, Vol.27 No. 1, pp.51-90. 78. Kent Eriksson, Katri Kerem and Daniel Nilsson (2005), Customer acceptance of internet banking in Estonia, International Journal of Bank Marketing, Vol. 23 No.2, pp. 200-216. 79. Reeti Agarwal, Sanjay Rastogi and Ankit Mehrotra (2009), Customers' perspectives regarding e-banking in an emerging economy, Journal of Retailing and consumer services, Vol. 16, pp.340-351. 80. Sujana Adapa, (2008), Adoption of Internet shopping: cultural considerations in India and Australia, Journal of Internet Banking and Commerce, Vol. 13 No.2, pp. 1-17. 81. Michal Polasik and Tomasz Piotr Wisniewski (2009) Empirical analysis of Internet Banking adoption in Poland, International Journal of Bank Marketing, Vol. 27, No. 1, pp.32-52 82. P.K. Gupta and Jamia Millia Islamia (2008), Internet banking in India Consumer concerns and bank strategies, Global Journal of Business Research,Vol. 2, No. 1,p-44. 83. Wai-Ching Poon (2008), Users' adoption of e-banking services: the Malaysian perspective, Journal of Business & Industrial Marketing, vol. 23 No. 1, pp. 59-69, available at www.emeraldinsight.com/0885-8624.htm 84. Hernandez, J.M.C. and Mazzon J.A. (2007), Aoption of Internet banking: Proposition and Implementation of an integrated Methodology Approach, International Journal of Bank Marketing, vol.25 No.2, pp.72-88. 85. Jaruwachirathanakul, B. and Fink, D., (2005), Internet Banking Adoption Strategies for a developing country: the case of Thailand, Internet Research, vol.15 no.3, pp.295311.
Ajimon George is an Assistant Professor, Department of Commerce, Marian College, Kuttikkanam, Idukki (Dt), Kerala. His e-mail: georgeajimon@rediffmail.com G S Gireesh Kumar is an Associate Professor, PG & Research Dept. of Commerce, Nirmala College, Muvattupuzha, Kerala. He can be reached at: gireeshkartha@yahoo.com
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Foreign Direct Investment in Indian Retailing - Case of Wal-Mart _______________________________________________________ S. Harish Babu & Cynthia Menezes Abstract: Partial liberalization took place in policy in which foreign companies are allowed to own up to 51 per cent in single-brand retail JVs as approved by the Foreign Investment Promotion Board (FIPB). Besides this, foreign companies are allowed in wholesale cash-and-carry business and export trading with 100 per cent equity through the automatic route. Foreign companies with 100 per cent equity can also carry out trading of items sourced from the small-scale sector and do test marketing of products for which the company has a manufacturing approval under the FIPB route. This study is of particular importance to the Indian Retail sector context as it brings in one of the largest retailers in the world to India and is bound to affect the retail industry and the Indian economy as a whole. The Understanding of prospects and impact of FDI in the Indian retail sector from Wal-Mart's perspective. Literature provides a lot of evidence to support how foreign companies can impact a country. Analyzing different authors view point, the impact a foreign retailer can have in three main areas on its economy, the industry, and consumers. Wal-Mart, one of the biggest retailers in the world, having an international presence in a number of countries, was a perfect example to support this study. Facts from various reports, articles and the interview conducted helped in preparing a case study on why Wal-Mart should enter India and how its entry would impact the Indian economy. Keywords: Foreign Direct Investment, Strategy, Consumer and Competition. Introduction : 1.1 Organized Retailing In the developed economies, organized retail is in the range of 75-80 per cent of total retail, whereas in developing economies, the unorganized sector dominates the retail business. The share of organized retail varies widely from just one per cent in Pakistan and 4 per cent in India to 36 per cent in Brazil and 55 per cent in Malaysia Modern retail formats, such as hypermarkets, superstores, supermarkets, discount and convenience stores are widely present in the developed world, whereas such forms of retail outlets have only just begun to spread to developing countries in recent years. In developing countries, the retailing business continues to be dominated by family-run neighborhood shops and open markets. As a consequence, wholesalers and distributors who carry products from industrial suppliers and agricultural producers to the independent familyowned shops and open markets remain a critical part of the supply chain in these countries (ICRIER study Impact of Organized Retailing on the Unorganized Sector, 2008). The Deloitte-Stores (2007) study held that the retail business would slow down definitely over the next decade in developed countries, while it would grow strongly in developing countries. This is based on a projection of three significant changes that will occur. First, the population in the age-group 50-70 years and above in the developed world will explode, shifting the share of consumer spending further away from goods towards services, such as travel, healthcare and maintenance of the elderly. Second, the population growth in the age-group 20-35 years in these countries will be relatively modest making the hiring of entry-level workers difficult, while the population in the age-group 35-50 years will decline leading to acute shortage of middle and upper management positions. Third, in developing countries, there will be plentiful supply of workforce and consumers in the younger age groups. Besides, this demographic shift will make the developing countries more dynamic and risk-taking enabling them to grow much faster than the developed world. Driven by these trends, it is expected that retailers in developed countries will increasingly move to the markets of developing countries for growth. 1.2 Regulatory Framework: There had been no specific restrictions on the entry of foreign retailers into the Indian market till 1996. A few foreign players were granted permission for
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Foreign Direct Investment in Indian Retailing - Case of Wal-Mart _______________________________________________________ retailing under this earlier regime. However, in 1997 it was decided to prohibit FDI in retailing into the country. In January 2006, however, a partial liberalization took place in policy in which foreign companies are allowed to own up to 51 per cent in single-brand retail JVs as approved by the Foreign Investment Promotion Board (FIPB). Besides this, foreign companies are allowed in wholesale cashand-carry business and export trading with 100 per cent equity through the automatic route. Foreign companies with 100 per cent equity can also carry out trading of items sourced from the small-scale sector and do test marketing of products for which the company has a manufacturing approval under the FIPB route. 2 Wal-Mart's Company Information : This study is of particular importance to the Indian Retail sector context as it brings in one of the largest retailers in the world to India and is bound to affect the retail industry and the Indian economy as a whole. The Understanding of prospects and impact of FDI in the Indian retail sector from Wal-Mart's perspective. Wal-Mart Stores, Inc., founded by Sam Walton in 1962, is one of the largest retailers in the world. During its conception, Sam Walton declared that the company's three policy goals would define its business: respect for the individual, service to customers, and striving for excellence (Hayden, Lee, McMahon and Pereira, 2002). The first Wal-Mart store opened in Rogers, Arkansas, in 1962 and seventeen years later, its annual sales topped $1 billion. By the end of January 2002, Wal-Mart was the world's largest retailer, with $218 billion in sales (Achtmeyer, 2002). Currently, it operates over 4,150 retail stores globally with an international presence in 10 countries, which includes three Asian countries China, South Korea, and Japan and dominant retail stores in Canada, Mexico, and the United Kingdom (Confederation of Indian Industry (CII) and Price water house Coopers India). 3 Wal-Mart's Strategy : Wal-Mart's strategy is discussed under two heads Marketing and growth strategy. Wal-Mart is choosing a different modus operandi for expanding. Rather than acquiring a store estate outright, it is using the joint venture route in India, to enable it to utilize the local know-how and 3.1 Marketing Strategy : It aims to guarantee everyday low prices as a way to pull in customers (Achtmeyer, 2002). John Fleming, the chief merchandising officer, and Stephen Quinn, the chief marketing officer said, that after intense research, Wal-Mart is seeing its 200 million customers in three new groups - "brand aspirational" (people with low incomes who are obsessed with names like Kitchen Aid), "price-sensitive affluent" (wealthier shoppers who love deals), and "valueprice shoppers" (who like low prices and cannot afford much more). These categories enable WalMart to not only understand how people shop at its stores, but why they shop the way they do (Barbaro, 2007). 3.2 Growth Strategy : A strategic goal of Wal-Mart is to expand and it has done so successfully (Hayden, Lee, McMahon and Pereira, 2002). Internationally, it is very selective in entering foreign markets. It began its global operations in 1991, in neighboring Mexico followed by Puerto Rico, Canada, Argentina and Brazil. Fourteen years later after it went overseas, its international presence confined to just ten countries and India would be the eleventh once Wal-Mart sets its retail chain there (Saraf, 2005). To summarize, Wal-Mart's competitive strategy is to dominate every sector where it does business by selling goods at low prices, outselling competitors, and expanding. Wal-Mart's only presence in India has been through its sourcing office located in Bangalore. It has been very eager to get a foothold in the Indian market, the second most-populous nation and fourth largest retail market, also reckoned as one of the fastest growing retail markets in the developing world. India is already Wal-Mart's fastest growing sourcing market and according to Wal-Mart's research, a huge organic growth opportunity lies ahead for Wal-Mart in the future as its home market becomes increasingly saturated (Bhatnagar, 2006).
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Foreign Direct Investment in Indian Retailing - Case of Wal-Mart _______________________________________________________ managerial expertise of Indian economy. Local contacts will enable it to extract the best supply chain deal and help in cultivating relationships with wholesalers, suppliers and producers in the country (Writer, 2007). 4 Wal-Mart in India : Wal-Mart's only presence in India has been through its sourcing office located in Bangalore. It has been very eager to get a foothold in the Indian market, the second most-populous nation and fourth largest retail market, also reckoned as one of the fastest growing retail markets in the developing world. India is already Wal-Mart's fastest growing sourcing market and according to Wal-Mart's research, a huge organic growth opportunity lies ahead for Wal-Mart in the future as its home market becomes increasingly saturated (Bhatnagar, 2006). Wal-Mart is choosing a different modus operandi for expanding. Rather than acquiring a store estate outright, it is using the joint venture route in India, to enable it to utilize the local know-how and managerial expertise of Indian economy. Local contacts will enable it to extract the best supply chain deal and help in cultivating relationships with wholesalers, suppliers and producers in the country (Writer, 2007). Indian telecom firm Bharti Enterprises and US-based retail giant Wal-Mart agreed on a 50:50 joint venture for a new chain of wholesale stores in India to serve small retail shops. The "partnership of equals" is named Bharti, Wal-Mart Private Ltd (Times of India, 2007). It is termed as the partnership of equals as it would be a partnership of two very well respected companies in their own rights. Wal-Mart plans to open "hundreds" of Wal-Martbranded superstores across India in five years starting in 2007, working with Bharti Enterprises, a company that runs the leading Indian cell phone operator, said the Bharti chairman, Sunil Mittal. According to the deal, the stores will be owned by Bharti but operated under the Wal-Mart names, with logistics, purchasing and support from Wal-Mart itself. The new Joint Venture will have six board members, three from each side. It is looking at 10-15 wholesale stores in India over the next seven years with the first store scheduled to come up in the second half of 2008. The size of the stores will vary between 50,000sq ft and 100,000 sq ft and the investment could vary anywhere from $30 to $200 million, with Bharti to invest $2-2.5 billion in the front end retail over a period of time. It will sell a range of products to various B2B consumers, including retailers, hotels and restaurants or any organization that has a sales tax registration. The product range will include groceries, consumer appliances, fruit and vegetables. It will customize its operations in the Indian market as per local requirements. In order to ensure that the manufacturers in India make the best out of WalMart's presence, it will source 90% of its products locally, with the remaining 10% from some other low-cost countries like China. Finally, in order to keep up the quality standards and make sure that Indian supplier's match up to Wal-Mart's international quality standards, it may even invest in some of the manufacturing units (Timesnow, 2007). On Wal-Mart being Bharti's partner in the joint venture, Bharti has forged a deal with the world's best retailer. Bharti classifies Wal-Mart as its natural partner because it brings with it world class processes and technologies in the supply chain, logistics and cold chain, thus delivering immense value to both small and big retailers by driving down prices (Times now, 2007). Moreover, the size with which Wal-Mart wanted to enter the Indian market, Bharti had similar plans for the Indian market. Wal-Mart would help Bharti revolutionise retail with its speed, scale and size (Thomas and Chakravarty, 2007). With this deal, Wal-Mart's mission is almost accomplished. It was lobbying entry in the Indian market for very long and the joint venture enables it to get a toe hold in the Indian market, although serving individual customers may still be far away. However, what's more important is that Wal-Mart is entering a large country Germany and Korea limiting growth, India remains the only large market where it can look for additional revenue (Timesnow, 2007). 5 Prospects for Wal-Mart in India : According to John Menzer, "India represents a $250 billion retail market, growing 7.2 percent a year, but modern retailing is just starting to emerge. This shows that India is a huge organic growth opportunity for Wal-Mart. (Bhatnagar, 2005)
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Foreign Direct Investment in Indian Retailing - Case of Wal-Mart _______________________________________________________ The eclectic paradigm discussed in the literature review describes that a firm which satisfies ownership, location and internalization advantage, chooses to conduct its operations on an international scale. It is noticed that India offers Wal-Mart prospective opportunities to expand its operations here. For instance, Wal-Mart has some very unique tangible and intangible benefits like brand name, technology, supply chain, operations and management which offer it ownership advantages. All the ingredients for a retail revolution are present extraordinary demographics, surging disposable incomes and an increased propensity to spend rather than save (Reddy, 2005) suggesting that the future is alluring for Wal-Mart. To further reap the benefits of such advantages, Wal-Mart should internalize its operations. However, Indian regulations for FDI impose certain restrictions and rather than Wal-Mart having unique ownership, it has come up as a joint venture with an Indian player Bharti. 6 Impact of Wal-Mart's Entry in India: According to the benign model of development, FDI results in rise in productivity by supplying more capital, effective management, and marketing and technological practices which leads to increase in national saving and generates economic growth (Gillis et al, 1996). Wal-Mart's entry would bring in huge capital investment along with expertise, technology and management practices required for setting their operations. This will enhance the development in retail industry and spur economic growth. According to the Malign Model of development, foreign investments bring in technological know how which is important for economic progress. WalMart's entry will definitely bring in the technological know how that it has developed over years with its experience in the retail industry worldwide, thus leading to economic progress. The impact Wal-Mart's entry would have on the Indian market in three main spheres has been described earlier in the literature review in three main segments- Economy, Competition and Consumers. Here, I will consider the impact from Wal-Mart's perspective. To further support the facts stated in the case, comparisons are made with the impact Wal-Mart had on the Chinese economy. Wal-Mart China is used as a comparison since there are a lot of similarities between the Indian and Chinese economies such as both are developing nations, a huge population and a diverse consumer base to mention a few. 6.1 Impact on Economy : In the process of expanding its operations, Wal-Mart would benefit many other industries in the supply chain, both backward and forward, eventually benefiting the Indian economy. For instance, according to Li Fei, a retail marketing professor at Tsinghua University, Wal-Mart helped in China's transition from state planning to free markets and to bring its economy into the 21st. 1. According to Wal-Mart officials, their entry would lead to a rise in the India's Gross Domestic Product. This view is supported by Bloomberg's report, as with Wal-Mart's entry, India's sales through retail chains, as opposed to traditional family-run stores, is expected to reach around 35% of the total by 2015, from about 4% currently. 2. Wal-Mart suggests that with their entry, there would be a direct impact on lowering of India's inflation rate and reducing the poverty. This is because a big retailer like Wal-Mart works on a mass buying approach, which in turn, enables them to achieve economies of scale, leading to reduction of prices, the benefit of which is directly passed on to consumers, and thus resulting in lowering the inflation rate. This view is supported by Frank Stephenson, and according to his study, without Wal-Mart, about half a million of the Chinese people each year would be stuck in rural poverty that is, for most of them, far worse than sweatshop labor. Michael Strong also states that Wal-Mart might well be singlehandedly responsible for bringing about 38,000 people out of poverty in China each month, whicturns out to be a whooping number of 460,000 per year (Stephenson, 2006). 3. It will boost up sales of a lot of other businesses linked to it - a cyclical approach whereby there will be creation of wealth across the chain. It's dependence on a number of suppliers like farmers, agriculture, transportation, pharmacy, FMCG, etc to name a few will boost productivity in each of these sectors
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Foreign Direct Investment in Indian Retailing - Case of Wal-Mart _______________________________________________________
It will have a significant impact on the lives of farmers and small scale vendors, by teaching them new techniques for improving productivity and providing them with ready market access for their products. Its impact on local business is based on the philosophy of operating globally and giving back locally. Nurturing local producers has already had an extremely positive impact on modernizing and enhancing the food value chain. It is keen on sourcing food and dairy products from India and ready to bring in high-end technology, invest in cold chains and address issues such as contract farming. However for it to increase the volume and range of goods sourced from India, the best way is to have retail stores in India (Confederation of Indian Industry (CII) and PricewaterhouseCoopers India).
retail business gives an indication of what to expect from Wal-Mart in terms of employment (Sridhar, 2007). In an interview with Business Standard, anti Wal-Mart activist Wade Rathke, said that in most of the countries where Wal-Mart operated, it had a negative impact on the labor practices. For instance, in Mexico and Argentina they have exploited workers by paying low wages, reduced employee benefits and enforced contractual employment. A classic argument which Wal-Mart has put forward to this criticism has been that their objective will be of eliminating the "middlemen", which will mean not only better realization by farmers but also lower prices for consumers (Sridhar, 2007). Also, it has been noticed that till date, sectors like insurance, banking, civil aviation etc which have been opened to private investment, have grown (Saraf, 2005). 6.2 Impact on Retailing Industry : The Left parties that support the Congress-led coalition government in India, project the view that by allowing FDI in retail, foreign retailers would hurt millions of small shop owners of the unorganized retail sector. According to them, with the entry of foreign and big retailers, what would lie at stake would be the livelihood security of 12 million small shopkeepers, 40 million hawkers and at least 200 million (of the 600 million) small farmers a sacrifice not worth to be made for ensuring success of the organized or the big retailers (Sharma, 2007). This opinion of foreign retailers having a devastating affect on small shopkeepers, workers, farmers and consumers in developing countries is also supported by anti-Wal-Mart activist Wade Rathke. However, according to Wal-Mart, the fear that they would wipe out the familyowned shops is overstated considering the fact that it plans to open a few hundred stores across India which can never hope to meet the entire country's retail needs. Although, the middle class Indians in many cities will eventually go away from neighborhood stores and settle for the convenience of Wal-Mart, but at the same time, given the sheer size and diversity of India's population, the small retail outlets will still survive for the foreseeable future (The Subcontinent, 2006). Another very interesting article by Ayyappa states how small kirana-walas can still afford to have an upper hand over the biggies like Wal-Mart despite their strategy of offering lower prices. Firstly, they
Retailing is one industry which directly influences the industry for infrastructure as it requires moving goods efficiently from one place to another. WalMart's investment in India will directly boost up the freight industry, railways, ports and shipping and pipelines. 4. It will directly influence the country's employment. Regarding employment creation, Wal-Mart suggests their entry will result in creating jobs in the following ways A Foreign retailer will always be a foreigner and will have to source local talent to understand the local market. This would result in drawing talent from the country for staffing its organization. Wal-Mart's entry will not only result in creating employment for the higher end workers but also for semiskilled and unskilled workers. Talent will not only be drawn from metros, but the whole of India including smaller towns. Thus whether a retailer is Indian or Foreigner, net impact would be employment generation. Despite the fact that Wal-Mart feels employment will be created in each of the above sectors, there have been criticisms regarding the extent of employment losses that would result from Wal-Mart's entry into India. The fact that Wal-Mart's turnover per employee is about 95 times that of an average Indian worker in the
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Foreign Direct Investment in Indian Retailing - Case of Wal-Mart _______________________________________________________ have location benefits (stone throw away from the households), which enables families to fulfill their local needs without wasting time. Secondly, their effective home-delivery system enables consumers to place orders from home and get them delivered at their door steps. Thirdly, the local trader knows his consumer very well and greets them the moment they enter. This is a kind of relationship which Indians crave for as they tend to have more social life, compared to Americans who are more individualist. Fourthly and finally they are willing to gives their consumers credit. All these are certain advantages that these traders enjoy (Ayyappa, 2006). To all this, Wal-Mart has to say that once they are allowed entry and are able to establish their base, they will understand the Indian consumer better and try best to offer them localized services. Moreover comparisons with other developing economies reveal that that with flourishing modern trade and increasing global retailer presence, domestic competitors will still hold majority stake in the Indian market. For instance, in China, leading retail chains Carrefour and Wal-Mart have more than 100 stores, and still domestic competitors hold more than 90% of the market. Similarly in Mexico, in spite of the presence of global retailers including WalMart, the number of retail outlets, including momand-pop stores, increased just by 2% (Confederation of Indian Industry (CII) and PricewaterhouseCoopers India). In the organized retail sector, Wal-Mart will face competition from some well established players like Big Bazaar, Subhikhsa, Star India Bazaar etc and upcoming players like Reliance. Kishore Biyani, founder of Pantaloon Retail (India) Ltd., the country's top chain with some $450 million in annual revenue,has been pressing to keep Wal-Mart out. "We are trying to close the back door and the front door," he says. He feels that it won't only be the existing established players that would pose threat to WalMart, but players like petrochemical giant Reliance, as well which alone is planning an initial investment of $750 million to set up 1,000 hypermarkets. According to him, the more time it takes Wal-Mart to get clearance from Indian authorities, the better prepared its local competitors can be (Global Business, 2006). 6.3 Impact on Consumer : Wal-Mart suggests that with their entry it is the Indian consumer who would be the greatest beneficiary as they would get wider variety, better quality products at relatively lower prices, lower price inflation, increased choice, greater convenience, better assortment and wider availability of goods. Wal-Mart has been recognized as a leader in supply chain management and for passing its savings on to its customers. Moreover, it is consequently credited for keeping inflation down in the United States, a direct beneficiary to consumers (Confederation of Indian Industry (CII) and PricewaterhouseCoopers India). Some studies suggest that the traditional mom-andpop stores in India, accounting for about 97% of the total market in India, have developed indigenous processes and skills, and thanks to their unparalleled proximity, convenience and services offered, they might have an upper hand in retaining customers ( Confederation of Indian Industry (CII) and PricewaterhouseCoopers India). To this, sources from Wal-Mart say that, taking a cue from such stores' competitive advantage, foreign retailers like them would have to and will eventually localize the existing service levels to match the Indian consumers' expectations. For instance, in Wal-Mart China, meat is unwrapped because Chinese customers think it looks fresher that way. This shows how Wal-Mart customizes its services locally to meet customer's needs. Moreover, the consumer today is more aware and is willing to give a chance to newer formats. In order to be successful, Wal-Mart will Go Glocal adapt local practices with global standards. Conclusion Literature provides a lot of evidence to support how foreign companies can impact a country. Analyzing different authors view point; I have summarized the impact a foreign retailer can have in three main areas on its economy, the industry, and consumers. Wal-Mart, one of the biggest retailers in the world, having an international presence in a number of countries, was a perfect example to support my study. Facts from various reports, articles and the interview conducted helped in preparing a case study on why Wal-Mart should enter India and
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Foreign Direct Investment in Indian Retailing - Case of Wal-Mart _______________________________________________________ how its entry would impact the Indian economy. Summarizing the case, there are mixed opinions on Wal-Mart's entry in India. However to all the criticisms, sources from Wal-Mart have counter arguments to support their entry. For instance one of the critics of Wal-Mart said Please don't look at Wal-Mart coming to India as a step forward. It is, in fact, 10 steps backward for us. There are tons of other Indian businesses that are looking to expand to the retail sector. We should be supporting them rather than laying out the red carpet for one of the most deplorable ideas of business that has ever existed. Why make one of the richest corporations richer at our expense. - Indian Inheritance, 2006 To this, Wal-Mart defends by saying that, till when can you stop a country from growing. By allowing foreign retailers, India will benefit in terms of all the above discussed parameters or else by restricting entry, it would be deprived of all this. Wal-Mart is coming up in collaboration with an Indian player, thus its success will ultimately lead to success of an Indian company and the growth of the Indian economy. References :
1. Achtmeyer, W.F. (2002) Wal-Mart Stores, Inc,
rising elephant: Benefits of modern trade to Indian economy, PricewaterhouseCoopers India, cited 30-07-09.]
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8. Giridharadas, A. and Rai, S. (2006) Wal-Mart
plans to open hundreds of stores in India, International Herald Tribune, November. 200611-27.
9. Global Business (2006) Wal-Mart's Superstores Gain Entry Into India, http://money.cnn.com/ 2006/03/23/news/companies/walmart_india/ind
ex.ht m (Accessed on 30th July 2009)

10. Indian Inheritance (2006) Wal-Mart and its
entry to India, Indian Inheritance, May, 28th 2006 in http://indianinheritance. wordpress.com /2006/05/28/walmart- and-its-entry-to-india/ (Accessed on 30th July 2009)
11. International Herald Tribune, November, 2006-
Tuck School of Business in http://mba.tuck.dartmouth.edu/pdf/2002-20013.pdf (Accessed on 14th August 2009).

2. Ayyappa (2006) Will Wal-Mart's Indian entry
11-28. 12. Reddy, B. (2005) Wal-Mart assault: India may forced to open its protected retail sector, but WalMart for the first time will face real communists in India, IndiaDaily, July 12th, 2005. 13. Saraf, A. (2005) What Brings Wal-Mart to I n d i a , I B E F, J u n e , 2 0 0 5 - 0 6 - 1 6 i n http://ibef.org/attachment/WhattoIndia.pdf (Accessed on 14th August 2009) 14. Sharma, D. (2007) FDI in Retail -Big box retail will boost poverty, India Together, February. 2007- 02-16 in . htm (Accessed on 31st July 2007). 15. Sridhar, V. (2007) Wal-Mart walks in, F r o n t l i n e , J a n u a r y. 2 0 0 7 - 0 1 - 1 2 i n http://www.hindu.com/thehindu/fline/fl2326/sto ries/20070112002003700.htm (Accessed on 30th July 2009)
affect the kiranawallahs? Trailblazers, December 2006-12-01 in . html (Accessed on 31st July 2009)
3. Barbaro, M. (2007) Wal-Mart shifting its growth
strategy, International Herald Tribune, March 2nd 2007 in http://www.iht.com/articles/2007/03/02/ business/walmar .php (Accessed on 14th August 2009) .4. Bhatnagar, P. (2006) Wal-Mart's dilemma in India, CNNMoney, April, 2006-04-04 In
h t t p : / / m o n e y. c n n . c o m / 2 0 0 6 / 0 3 / 2 3 /
news/companies/ walmart_india/index.htm (Accessed on 30th July 2009) 5.Confederation of Indian Industry (2005) The
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Foreign Direct Investment in Indian Retailing - Case of Wal-Mart _______________________________________________________

16. Stephenson, F. (2006) Wal-Mart's development 18. Thomas, J.P. and Chakravarty, C. (2007)"A
impact in China, Pienso, August.20060829http://pienso.typepad.com/pienso/2006/08/ walmartsdevelo. html (Accessed on 30th July 2009)
17. The Subcontinent (2006) End of retail
couple of hundreds of executives from telecom will eventually move to retail, Infotech online, A p r i l , 2 0 0 7 - 0 4 - 1 7 i n
http://infotech.indiatimes.com/articleshow/msid1918168,prtpage-1.cms 19. Times of India (2007) Wal-Mart, Bharti launch
innocence, The Subcontinent, November 25th, 2006 in http://www.literateworld.com/edit.htm
joint venture in India, Times of India, August, 2007-08-06.
S. Harish Babu, an Asst. Professor in the Department of MBA, Nitte meenakshi Institute of Technology, Yelahanka, Bangalore North. He can be reached at harishtrue@gmail.com Cynthia Menezes holds Ph.d. and is an Associate Professor in Canara Bank School of Management, Bangalore University, Bangalore.
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Impact of Customer Relationship Management on Customer Retention A Case of Hotel Asia, Jammu _______________________________________________________ Deepak Jain Abstract: Impact of globalization, competition, growing customer acquisition cost, customer awareness and expectations, higher customer turnover, laws and legislation, technological innovation has introduced a tool named CRM in tourism and hospitality sector. Today customers are the most important stakeholders for any industry. With the rise in income level and standard of living, and increasing competition it become mandatory to keep them (customers) satisfied to have repeat business out of them. They (Customers) impacts both long and short term policies and objectives of manufacturers, service providers and intermediaries. Therefore, it became necessary for later to have enough knowledge of different environments and customer expectations, to squeeze the gap between perceived & expected services, and to design strategies against services failures recovery. CRM is a technique that helps the hotel to retain their customer and also improves their satisfaction level by providing special services. CRM achieves its objectives by using proven methodologies and ebusiness technologies in identifying, creating and retaining profitable customers, and in building long lasting relationship - key to financial success. The objective of this paper is to study the impact of CRM on hotel Asia (Jammu) in customer retention, customer's loyalty and their satisfaction level; and findings prove the statement to be true. Keywords: Loyalty, Retention, Customers, Relationship Management, Staff, and Hotel Asia etc Introduction : Marketing is the core of success of any business venture. It impacts the society everyday in a number of ways a) launch of new products and services; b) help to understand need, desires of new and retained customers, c) help customers to locate desired products and services, d) to disseminate the information that makes people's lives easy, and e) to create exchanges, generate employment and wealth and economic development. Despite of all positives, it raises ethical, moral and behavioral issues that affect the society, environment and communities, adversely. Marketing to customers is most important activity for all organizations to undertake because the same generate profits for company and employment for society, and to serve customers needs with products / services offering - which is the ultimate aim of any organization. It is to be noted that marketing efforts (including services as promotion and distribution) accounts a major chunk of price of services / products. Therefore, in today's competitive business environment, it is mandatory to understand customers, its requirements, and customer's profitability for designing strategies. CRM is a business strategy designed to bring down the costs and to increase company's profitability through customer satisfaction and loyalty ness; and to maintain competitive differentiation to gain market share. It is a process / methodology used to learn and understand about customers' needs, wants and behaviour to develop long term relationships1 Impact of CRM in Customer Retention : In order to have repeat purchase from customers, it is necessary to retain them first, required in today's competitive environment. Kathleen Gage (2004)2 argued that this is the area where companies fails, especially the small businesses. She added, even today, companies believe that customers should contact them if they have need for products / services, which should be the reverse case. Need is to give a thought to a question: a) Effect on company's profitability if you are able to convert a first time or occasional customer into a repeat or frequent customer?
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Impact of Customer Relationship Management on Customer Retention A Case of Hotel Asia, Jammu _______________________________________________________ It must be noted that customers who regularly visit your business would like to refer your company to others by creating WOM, only if, they are satisfied. Converting occasional buyers into regular customers though different CRM and marketing strategies or by making occasional buyer to purchase different product lines will help the company in increasing profitability. Company need to think on to certain issues like: How to expand their basic product or service into solutions? What are your current offerings? Are there other products and services you could develop that are consistent with your market and your company vision? What are the other avenues you could open? Is it necessary to partner with other companies or not? Marketing is about timing, just because you contact a customer today, it does not mean that they will buy today. Need is to be in touch with them regularly and frequently as this will increase chances that they will purchase your offerings. Relationship between CRM and Hospitality Industry : CRM is all about the managing customer's knowledge to understand and serve them in efficient manner. Customer service is an important element of CRM; however, CRM also coordinates customer relation with different business functions. It also helps the companies to come closer to their customers, and in finding new ways to create value for customers. The conceptual framework of CRM is also applicable in hotel industry as a source of sustainable competitive advantage. Hospitality industry is getting fascinating by CRM because of the quality of services and number of quantity of customer touch points. In the world of universe of serving guests, there are numerous challenges as they are challenging customers and one the biggest challenge in the age of Brands" is to ensure a consistent customer service. This challenge is three-folded: a) to manage consistency during different seasons and time, b) to ensure consistency across job titles, roles, and pay; and c) communication message must be in tune with marketing plan to set guests expectations according to season and customer tier considerations. Guest servicing standards must focus on consistency in quality service delivery and even to prevent negative experiences. If any guest experienced a negative event, need is to note the same and report to authorities. Further, the same information must be made available to the employee (s) in contact with that particular customer, and making them to put extra efforts to ensure left hotel customers remains positive. Another benefit to capture negative events information is it enables to analyze customer experience shortcomings. This requires active and different methods to manage, monitor, and predict customer satisfaction to fine-tune the communication message, marketing activities, transaction standards, and employee's training. Predictive analytics is used to understand different reasons of dissatisfaction, before it bundles-up and impacts customer loyalty. This can be done easily with the help of CRM. Purpose of Study : Organizations have discovered and research studies have shown that retaining current customers is less expensive than attempting to attract new ones. Companies realized that in order to develop longterm relationship with customers, they must focus on the profitable and economically viable customers only. This can be achieved through CRM practices as they can have significant impact on customer satisfaction level, leading to increase customer retention rate. Therefore, purpose of this study is to explore the impact of CRM practices on customer retention in building healthy business relationships with customers. Research Objectives : There are number of the hotels in Jammu, and the level of competition is severe. Race to acquire new customers and to retain the regular customers is at its peak. Competitors are coming with new service
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Impact of Customer Relationship Management on Customer Retention A Case of Hotel Asia, Jammu _______________________________________________________ offerings, structure and features in their hotels, resulting, increasing cost and reduced profitability as a whole. So, hotels are considering the CRM as important and innovative tool to resolve the problem. Objective 1 Weather implementation of CRM in hotel industry leads to Customer retention or not. Objective 2 Whether CRM helps in offering better services to customers as per their preferences or not. Objective 3 Whether CRM helps in introducing new avenues for both business and customers or not. Literature Review : Today, hotel business is acknowledged as a global industry with service providers and customers reaching out to corners of the world. Increasing competition is the biggest challenge been faced by hotel industry, now-a-days. Kandampully and Suhartanto (2000)3 stated that competition has major implications for the customer; providing him with increased choice; greater value for money; and better levels of service. Ghobadian et al. (1994)4 stated that service quality is the requirement to remain profitable and to taste success in today's environment. Chapman et al. (2005)5 argued in favour of provisions for quality service to meet customer expectations. According to Ghosh and Jiju (2004)6, quality service includes meeting and always exceeding the expectations level of the customer. A customer holds service expectations based on different criteria's that includes past experiences, word of mouth, and advertisements from service providers. Customers always make comparison of perceived service (PS) and expected service (ES) (Grewal et al., 1998)7. If PS level falls below the ES level, customers are disappointed, else customers will prefer purchasing services again in future. Ingram (1996)8 stated, service quality received tremendous attention from business world due to its practical implications in defining customer satisfaction and To survive in this industry, hotels must deliver quality service those results in customers' satisfaction. Services must be of superior quality than expected; otherwise, customers will be dissatisfied (Shemwell et al., 1998)10. Various studies proved that services when delivered at level of perceived quality, customers are satisfied and shares their experience with others, and have intentions to re-buy in future. This increases the possibility of high ROI, increased market share, and profits (Barsky and Labagh, 1992; Fornell, 1992; Hackl and Westlund, 2000; Halstead and Page, 1992; LeBlanc, 1992; Legoherel, 1998; and Stevens et al., 1995)11-17. So, need is to understood service delivery from customers perspective (Fache, 2000)18 Numerous studies have looked for customer satisfaction in service industry (Almanza et al., 1994; Cadotte and Turgeon, 1988; Gundersen et al., 1996; and Qu and Li, 1997)19-22. Satisfaction is equated as well performed business functions to the level of customer expectations (Swan and Combs, 1976)23. The key is to measure the customers' satisfaction level and meet it (Lam et al., 1996; Lewis and Nightingale, 1991)24-25. A company if able to understand the different drivers of customer's satisfaction has a competitive advantage over others (Garvin, 1991; Berry and Parasuraman, 1991)26-27. Failure, will proves to be costly affair, as customers communicate negative to others (Chon et al., 1995) 28. The literature indicates that a satisfied customer creates repeat purchase with favourable recommendations, and generating profits for the company. A satisfied customer is the cheapest and easiest method of hotel promotion (Knuston, 1988b; and Naumann, 1995)29-30. It is seen as a major reason for new sales (Reichheld and Sasser, 1990)31 In the words of Mahatma Gandhi, customer are not dependent on you, rather, we depends on them. positive word of mouth. Most hotels focus in enhancing services and building customer loyalty. To achieve these goals, Yang (2004)9 emphasised on need to constantly attempt to understand what the consumers desires.
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Impact of Customer Relationship Management on Customer Retention A Case of Hotel Asia, Jammu _______________________________________________________ It is the customers for whom we are in business. Continuation of businesses is the outcome of their faith on us. We are not obliging them (customers) with our services, it they who are giving us the opportunity to serve them. Research Hypothesis : On the basis of literature review, some of the research hypothesis emerged as: (H1): Implementation of CRM in hotel leads to Customers' retention. (H2): CRM offers better and improved services to customers according to their preferences. (H3): CRM introduces new avenues for both business and customers. Research Methodology : Stage I While conducting the research two approaches are considered: qualitative and quantitative. Primary and secondary data was used to conduct study. To collect the theoretical issues (secondary data) various CRM related books, journals, websites and portals are tallied. Basic primary data is collected by questionnaire; interview, their day to day archives or log files, direct observations and physical artifacts. Questionnaire was developed in form of five point Likert Scale ('1' = Strongly Agree to '5' = Strongly Disagree) and then reviewed. For analyzing the hypothesis a well structured questionnaire is designed and collected data is analyzed by IBM SPSS 19.0. Basic analysis applied on the data is T -test. Data was collected from 120 customers, but only 104 questionnaires were received dully filled. With no choice left, 4 questionnaires were randomly discarded from the analysis. Finally, total number of respondents recruited in the study is 100. Stage II In order to support the findings of Stage I, a survey was conducted in 3 other Star Rated Hotels. Questionnaire with an objective To check whether Questionnaire was again developed in form of five point Likert Scale ('1' = Strongly Agree to '5' = Strongly Disagree) and reviewed. Analysis and data Interpretation : Stage 1
Quality Test of Research
CRM impact the rate of customers retention and satisfaction on other Star rated hotels or not was developed and analyzed. The survey was designed only for staff members of different Star Rated Hotels in order to collect their opinion about CRM and its benefits.
DT1: Case Processing Summary N % Cases Valid 100 100.0 Excluded (a) 0 0.0 Total 100 100.0
DT2: Reliability Statistics Cronbach's Alpha N of Items .911 26 As the value is 0.911, which is very high and indicates strong internal consistency among the items.
a. List wise deletion based on all variables in the procedure. Demographic Profile : 64% of the respondents were male and remaining 36% were females. Majority of respondents are in age group of 21-35 years i.e. 47%; followed by 26% in age group within 36-50; and remaining number of respondents are in age group more than 50. 55% of the respondents are post graduates and 45% are simply graduates; 56% of the respondents are working professionals; 33% are in businesses; and
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Impact of Customer Relationship Management on Customer Retention A Case of Hotel Asia, Jammu _______________________________________________________ remaining 11% lies in category Others that includes: unemployed, housewife's etc. Testing the Hypothesis : Case 1: This case tried to study whether implementation of CRM in Hotel Asia leads to increase the Customer retention rate or not. (H0): Implementation of CRM in hotel will not lead to customer retention ( =3) (H1): Implementation of CRM in hotel will leads to customer retention ( < 3)
Dt3 : One-Sample Statistics :
N Var1 100 Mean 1.5500 Std. Deviation 1.13150 Std. Error Mean .11315
Dt6: One-Sample Test

t df Test Value = 3 Sig. (2- tailed) Mean Difference 95% Confidence Interval of the Difference Lower Upper .000 1.68000 1.4636 1.8964
Var2 15.404 99
DT6 shows: the significant is 0.00 that is lesser than 0.05 and the calculated value of 't' is 15.404. So, null hypothesis will be rejected and alternative hypothesis is accepted. As the confidence interval is less than 3, alternative hypothesis is accepted and null hypothesis is rejected. This interpret that Implementation of CRM in hotel will improves Customer Retention Rate. Case3: This case tried to study whether factor like use of Information Technology provides assistance to staff and helps them in providing more attention toward customers of Hotel Asia or not. (H0): CRM does not introduce any new opportunities for both business and customers. (H3): CRM introduces new avenues for both business and customers.
DT7: One-Sample Statistics
DT4: One-Sample Test :

Test Value = 3 df Sig. (2- tailed) Mean Difference 95% Confidence Interval of the Difference Lower Upper Var1 13.699 99 .000 1.55000 1.3255 1.7745 t
DT4 shows: the significant is 0.00 that is lesser than 0.05 and the calculated value of 't' is 13.699. So, null hypothesis will be rejected and alternative hypothesis is accepted. As the confidence interval is less than 3, alternative hypothesis is accepted and null hypothesis is rejected. This interpret that Implementation of CRM in hotel will improves Customer Retention Rate. Case2: This case tried to study whether CRM is capable of providing better and improved services to customers of Hotel Asia as per requirements or not. (H0): CRM does not offers better and improved services to customers according to their preferences ( =3) (H2): CRM offers better and improved services to customers according to their preferences ( < 3)
DT5: One-Sample Statistics :
DT8: One-Sample Test

Test Value = 3 df Sig. (2- tailed) Mean Difference 95% Confidence Interval of the Difference Lower Upper Var1 15.731 99 .000 1.84000 1.6079 2.0721 t
DT8 shows: the significant is 0.00 that is lesser than 0.05 and the calculated value of 't' is 15.731. So, null hypothesis will be rejected and alternative hypothesis is accepted. As the confidence interval is less than 3, alternative hypothesis is accepted and null hypothesis is rejected. This interpret that CRM helps in introducing new avenues for both business and customers. Stage II Integrated Search : Objective: To check whether CRM really creates impact on customer retention of other Star Rated hotels or not.
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Impact of Customer Relationship Management on Customer Retention A Case of Hotel Asia, Jammu _______________________________________________________
DT9: One-Sample Statistics
Hotels using CRM Hotel Asia Hotel Regency Hotel Jammu Ashok Statistics Loyalty Score (Mean) Std. Deviation 3.97 0.52 4.64 0.28 4.38 0.41
profitable but not doing well with presented products or services, then there exists an opportunity to serve him with superior products / services before losing it to competitors. It must also be kept in mind that all customers are not the same and retaining 100% of customers is not possible. CRM is based on the idea of treating different customers individually. In another words, it is not possible to attract and retain all customers with the same policy and treatment. Companies have to adjust their policies accordingly. Moreover, the top management or strategic makers must consider customer retention as a mainstream activity that invites same level of consideration and attention as other departments needed. Limitations of the study : Lack of support by the hotel staff as number of them feared about research and they did not participate. Moreover, guests demand privacy, it also stops us to reach them anytime. Guests filled the questionnaires at the reception only. Time and money was the major constraints. References :
1.
Interpretation: Hotels using CRM have loyalty scores at higher side.
Conclusions : The goal of the research was to study the impact of CRM practices on customer retention. CRM is a key element of the modern marketing in recent years. Companies across the world are trying to make use of CRM systems to help in businesses. On the other hand, acquiring and retaining customers proved to be as challenging task. Based on data analysis, it was interpreted that implementing CRM in hotel definitely helps to improve customer retention. During the research, learning is that retaining the existing customer is much cheaper than acquiring the new customers. Customer satisfaction may result into loyalty and retention. It was even identified during research that it is cheaper to keep the existing customers happy than to attract new ones. Maintaining relations with existing customers and to encourage them to remain loyal with company is a dynamic and meticulous job. It is important to take a note that computerized CRM system can play a curtail role in success of an organization, but the way they are used can make substantial difference in outcome. It is recommended that all the departments must be involved with CRM processes. Customer Value Management is a recent emerging approach of attraction for corporations. The goal is to identify the value that can be delivered to customers along with their products through their supportive processes and services. The CVM methodology incorporates a key concept from CRM is that the success comes from focusing, understanding and serving targeted customers effectively. Need is to perform Customer's profitability analysis to understand whether he/she is contributing towards company profitability or not. . If customer founds
Destination CRM.com, What is CRM?, Retrieved June 18, 2010,

http://www.destinationcrm.com/Articles/CRMNews/Daily-News/What-Is-CRM-46033.aspx
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http://www.kathleengage.com/
3. Kandampully, J. and Suhartanto, D. (2000), Customer loyalty in the hotel industry: The role of customer satisfaction and image, International Journal of Contemporary Hospitality Management, Vol. 12 No. 6, pp. 346351. 4. Abby Ghobadian, Simon Speller, Matthew Jones (1994), Service Quality Concepts and Models, International Journal of Quality & Reliability Management, Vol.11, No.9, pp.43-66. 5. Rayka Presbury, Anneke Fitzgerald, Ross
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Impact of Customer Relationship Management on Customer Retention A Case of Hotel Asia, Jammu _______________________________________________________ Chapman, (2005) "Impediments to improvements in service quality in luxury hotels", Managing Service Quality, Vol. 15 Iss: 4, pp.357 373 6. Jiju Antony, Frenie Jiju Antony, Sid Ghosh, (2004) "Evaluating service quality in a UK hotel chain: a case study", International Journal of Contemporary Hospitality Management, Vol. 16 Iss: 6, pp.380 384 7. Grewal, D., Parasuraman, A., Voss, G. (1998), The roles of price, performance and expectations in determining satisfaction in service exchanges, Journal of Marketing, Vol.62 No 4, pp.46-61. 8. Hadyn Ingram, (1996) "Classification and grading of smaller hotels, guesthouses and bed and breakfast accommodation", International Journal of Contemporary Hospitality Management, Vol. 8 Issue: 5, pp.30 - 34 9. Yang, Jen Te. (2004), Qualitative Knowledge Capturing and Organizational Learning: Two Case Studies in Taiwan hotels, Tourism Management, Vol. 25, Issue 4, pp. 421-428.
10. Donald J. Shemwell, Ugur Yavas, Zeynep Bilgin,
Behaviour on Consumers Repurchase Behaviour, Journal of Satisfaction, Dissatisfaction and Complaining Behaviour, Vol. 5, pp. 1-11.
15. LeBlanc, G. (1992), Factors Affecting
Customer Evaluation of Service Quality Travel Agencies: An Investigation of Customer Perceptions, Journal of Travel Research, 30(4): 10-16.
16. Legoherel, P. (1998) Quality of tourist services:
the influence of each participating component on the consumer's overall satisfaction regarding tourist services during a holiday Proceedings of the Third International Conference on Tourism and Hotel Industry in Indo-China and Southeast Asia: Development, Marketing and Sustainability (pp. 47-54). Thailand.
17. Stevens, P., Knutson, B., and Patton, M. (1995),
DINESERV: A Tool for Measuring Service Quality In Restaurants, The Cornell Hotel Restaurant Administration Quarterly, 36(2): 5660.
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(1998) "Customer-service provider relationships: an empirical test of a model of service quality, satisfaction and relationship-oriented outcomes", International Journal of Service Industry Management, Vol. 9 Issue: 2, pp.155 168
11. Barsky, J.D. and Labagh, R. (1992). A strategy
and Improvement of Services in Tourism, Managing Service Quality, 10(6): 356-366.

19. Almanza, B. A., Jaffe, W., and Lin, L. (1994),
Use of the Service Attribute Matrix to Measure Consumer Satisfaction, Hospitality Research Journal, 17(2): 63-75.
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for customer satisfaction. The Cornell Hotel and Restaurant Administration Quarterly, 35(3): 3240.
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Factors in Guest Satisfaction, The Cornell Hotel Restaurant Administration Quarterly, 28(4): 4551.
21. Gundersen, M. G., Heide, M., and Olson, U. H.
Satisfaction Barometer: the Swedish Experience, Journal of Marketing, Vol. 56 (1), pp. 6-21.
13. Hackl, P. and Westlund, A.H. (2000) On
(1996), Hotel Guests' Satisfaction Among Business Travellers, The Cornell Hotel Restaurant Administration Quarterly, pp. 72-81.
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structural equation modelling for customer satisfaction measurement Total Quality Management, 11(4/5/6): 820-825. 14. Halstead, D., and Page, T. J. Jr. (1992) The Effects of Satisfaction And Complaining
and Satisfaction of Mainland Chinese Visitors to Hong Kong, Journal of Marketing Research, Vol. 17, pp. 460-469. 23. John E. Swan, and Linda Jones Combs (1976),
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Impact of Customer Relationship Management on Customer Retention A Case of Hotel Asia, Jammu _______________________________________________________ Product Performance and Consumer Satisfaction: A New Concept, Journal of Marketing, Vol. 40, pp. 25-33.
24. Lam, T., Mok, C., and Wong, L. (1996), 28. Chon, K. S., Christianson, D. J., and Lee, C. L.
(1995), Modelling Tourist Satisfaction: Japanese Tourists' Evaluation of Hotel Stay Experience in Taiwan, Australian Journal of Hospitality Management, Vol. 2, No. 1, pp. 1-6.
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Customer Satisfaction Vs. Customer Retention, Asian Hotel and Catering Times, pp. 34-36.
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Deepak Jain is with College of Management, School of Business, Shri Mata Vaishno Devi University, J&K, INDIA. He can be reached at deepakjain274191629@yahoo.co.in
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Fundamental Analysis as a Method of Share Valuation in Comparison with Technical Analysis _______________________________________________________ Venkatesh.C.K. & Ganesh. L. Abstract: This article reports the results of a questionnaire survey in June/July 2010 on the use of Fundamental and Technical analysis by brokers/fund managers in Indian stock market to form their forecasts of share price movements. The findings of the research reveal that more than 85 percent of the respondents rely upon both Fundamental and Technical analysis for predicting future price movements at different time horizons. At shorter horizons there exists a skew towards reliance on Technical analysis as opposed to Fundamental analysis. But the skew becomes steadily reversed as the length of horizon considered to be extended. Technical analysis is considered slightly more useful in forecasting trends than Fundamental analysis, but Fundamental analysis is significantly more useful while taking long positions in the market. Key Words: Stock market, Long Term, Short term
Introduction : In all financial markets, a central question in the market is how market participants forecast their future market developments. Financial market participants are often classified according to two different forecasting approaches, Fundamental and Technical. Stock analysis is crucial when deciding to buy investments and when evaluating your investment strategies. Regular stock market analysis can ensure to make the most of your money and minimize your risks. While some investors use fundamental analysis while others use stock market technical analysis or stock technical analysis to evaluate their stocks. Fundamental analysis is method of finding out the future price of a stock which an investor wishes to buy. It relates to the examination of the intrinsic worth of a company to find out whether the current market price is fair or not, whether it is overpriced or under priced. It believes that analyzing the economy, strategy, management, product, financial status and other related information will help to choose shares that will outperform the market and provide consistent gains to the investor. It is the examination of the underlying forces that affect the interest of the economy, industrial sectors, and companies. It tries to forecast the future movement of the capital market using signals from the economy, industry and company. It requires an examination of the market from a broader perspective. The presumption behind
fundamental analysis is that a thriving economy fosters industrial growth which leads to development of companies. Estimate of real worth of a stock is made by considering the earning potential of the company which depends on investment environment and factors relating to specific industry, competitiveness, quality of management, operational efficiency, profitability, capital structure and dividend policy. Technical analysis stands in contrast to Fundamental analysis. Fundamental analyses study only the stock price movements themselves and believe that the history of previous data provides indicators for future stock price movements. Technical analysts have developed tools and techniques to study past patterns and predict future price. It is basically the study of markets only. They study the technical characteristics which may be expected at May or market turning points and their objective assessment. The previous turning points are studied with a view to develop characteristics that would help in identification of major market tops and bottoms. Human reactions are, by and large consistent in similar though not identical reaction; with the help of various tools, the technician attempts to correctly catch changes in trend and take advantage of them. Thus, Technical analysis is directed towards predicting the price of a security. The price at which a
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Fundamental Analysis as a Method of Share Valuation in Comparison with Technical Analysis _______________________________________________________ buyer and seller settle a deal is considered to be the one precise figure which synthesizes, weighs and finally expresses all factors, rational and irrational quantifiable and non-quantifiable and is the only figure that counts. The purpose of doing this complex analysis is to help them decide whether it is advisable to buy, sell or hold the security of that company. Fundamental vs. Technical : Analyzing fundamentals such as earnings, cash flow, and assets, is useful in determining buyout and liquidation value of a company. Growth models can be made to gauge potential accumulation in the worth of the company. The difficulty is in trying to bridge this information to the market price of the shares, whereas the technical analyst often interprets the data by studying a chart. He may look for price patterns, trends, conflicting signals, or slight changes in buying momentum. Determining the success of technical analysis is very difficult due to the subjective nature of this practice. Ten technical analysts can examine the same chart and have differing opinions of how and when the price will move. Many famous technical analysts, such as George C. Lane, have little written about their personal successes using such techniques. Technical analysis says nothing of a company's finances; it attempts to get inside the head of the investor. Fundamental analysts will try to figure out what a stock is really worth, versus what it is being traded at. Technical analysts will attempt to gauge the current emotional state of the buyers to forecast if further buying or selling is likely. This article discusses elaborately some of the investor's opinion about fundamental and technical analysis. The aim of this article is not to determine which art is better. Instead, should endeavor to find out which method is commonly used on a particular stock. Review of Literature: The origin of Fundamental analysis for the share price valuation can be dated back to Graham and Dodd (1934) in which the authors have argued the importance of the fundamental factors in share price valuation. Theoretically, the value of a company, hence its price, is the sum of the present value of future cash flows discounted by the risk adjusted discount rate. This conceptual valuation frame work is the spirit of the renowned dividend discount model developed by Gordon (1962). However, the dividend discount model valuation involves the forecast of future dividend payment which is difficult due to the changes in firm's dividend policy. Thus, the subsequent studies along this line of literature searched for the cash flow that is unaffected by the dividend policy and can be obtained from the financial statements. A study by Yu-Hon Lui and David Mole (1998) reports on the use by foreign exchange dealers in Hong Kong of fundamental and technical analyses to form their forecasts of exchange rate movements. The findings of this study reveal that more than 90 percent of the respondents rely on both fundamental and technical analyses for predicting future rate movements at different horizons. Thomas Oberlechner (2001) presents the findings of a questionnaire and an interview survey on the perceived importance of Technical and Fundamental analysis among foreign exchange traders and financial journalists in Frankfurt, London, Vienna and Zurich. Foreign Exchange traders confirm that, out of the both forecasting approaches, technical analysis is more prominent than the other. But the Financial journalists put more emphasis on fundamental analysis than foreign exchange traders. Statement of the Problem : Most of research works concentrate on the foreign exchange market. Also the reviews from the study do not throw light on the complementarities of the two tools. Another gap exist that there may be difference of opinion with fundamental and technical analysis when investing for long term and short term investment which is not examined in previous studies. The current survey is done after critically reviewing the above mentioned research works. The survey is done on the Stock markets. The major aspect of the current research is to understand the attributes of the respondents when the market is bullish or bearish. The current research work suggests suitability of the two tools to different investors (Long term or Short term). It specifically analyses respondent's preference towards the nature of the companies while choosing stocks. The highlight of
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Fundamental Analysis as a Method of Share Valuation in Comparison with Technical Analysis _______________________________________________________ the current study is the identification of different industries /sectors and the applicability of Fundamental and Technical analysis while taking positions in those industries or sectors which most of studies not covered in the research work. Objective of the Study : To find out the commonly used method in forecasting trends and turning points in the stock market.
Age 20 to 30 yrs 31 to 40yrs Above 40 yrs Total
Analysis for the study can be done by a. Understanding the demographic profile: age of the respondents b. Understanding the frequency of usage of analysis by various stock market participants c. Analyzing the usage of Fundamental and Technical analysis while forecasting trends and turning points.
Table 1 Age of the respondent
Specific Objective : The objective of the study can be concluded by Understanding the demographic profile of respondents ( for the purpose of this study respondents include, Brokers, Sub-brokers, Mutual fund companies, Institutional investors) Understanding the frequency of usage of analysis by various stock market participants Analyzing the adoptability of Fundamental and Technical analysis to various market conditions/situations. Understanding the importance given by dealers to Fundamental and Technical analysis over intervals of forecasting horizons. Data Sources and Methodology : After analysis from licensed stock broking firms, Sub-brokers, Mutual fund companies, licensed banks and Stock market analysts, a close- ended questionnaire was designed for the analysis. The data was collected from four South Indian cities, namely, Bangalore, Hubli, Hyderabad and Cochin. The closed ended questionnaire was admitted to a sample of 100 respondents. Since the respondent's choose are from experienced seniors, the analysis made was more accurate. The usage of these tools by informed investors such as, Brokers, Sub-brokers, Fund managers, Institutional investors is also critically reviewed in this study. The questionnaire is statistically validated using various statistical tools such as, Mean, Standard deviation. One way ANOVA test is conducted and it is tested at 1%, 5% and more than 5% significance levels. Analysis and Interpretation: Descriptive Analysis :
Frequency 26 62 12 100
Percent 26.0 62.0 12.0 100.0
Chart 1 Age of the respondent
Age
62 12 26
20 to 30 yrs
31 to 40yrs
Above 40 yrs
Table: 1 and chart: 1 indicates the age distribution of the respondents. It is evident that substantial (88%) percentages of respondents are above 30 years of age. This shows that the sample chosen for research has rich blend of experience and expertise.
Table: 2 Designation of the Respondent
Position Director Fund Manager Senior Dealer Junior Dealer Total Frequency 10 4 60 18 100 Percent 10.0 4.0 60.0 18.0 100.0
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Fundamental Analysis as a Method of Share Valuation in Comparison with Technical Analysis _______________________________________________________
Chart: 2 Designation of the Respondent
Designation
60 18 10 4
With respect to the firms chosen for survey, it is the blend of broking firms and banks. Since As these two have maximum share in the trading activities. 70 percent of the respondents belong to licensed broking firms, 26 percent belong to licensed banks and 4 percent belong to other categories which include Mutual funds and Institutional investors.
Table: 4 Trade off between Fundamental analysis and Functional analysis
Director
Fund Manager
Senior Dealer
Junior Dealer
Items Level of variable FA Frequency of usage of Analysis TA Total Analysis helps in generating better returns in the short term FA TA Total FA TA Total FA TA Total FA TA Total FA TA Total FA TA Total
FA
Mean
Std. Deviation 23.718 23.867 32.876 4.877 6.148 40.685 8.168 8.191 40.088 16.465 16.382 37.821 30.299 30.069 31.731 7.769 6.615 40.261 14.544 16.710 39.904
12.948 12.395 40.064 6.327 8.207 38.557 4.165 5.509 40.653 6.435 7.229 36.096
F Value
Sig Value
Above table and chart indicates the designation of the respondents. A substantial (60%) percentage of respondents assumed the office of senior dealers, 18% are Junior dealers, 10% are Directors and 4% of the respondents were fund managers. As the sample size has more number of senior dealers it makes the findings more concrete and reliable.
Table: 3 Types of Firms
Type of Firm Licensed Broking Firm Licensed Banks Others Total Frequency 70 Percent 70.0
47 50 97 40 50 90 50 25 75 49 50 99 50 49 99 50 38 88 50 28 78
37 50 87 41 50 91 23 50 73 50 14 64
28 71.91 51.49 11 89.25 55.56 94 5.76 66.67 16 83.88 50.40 61 39.40 50.51 91 8.74 56.93 92 8.48 64.10
13 86.73 57.24 14 86.34 55.22 9 90.57 68.49 97 3.24 78.13
88.25
.000**
4576.28
.000**
Analysis helps in generating better returns in the long term
1706.20
.000**
When the market is bullish, the results of analysis is highly reliable
422.73
.000**
When the market is bearish, the results of analysis is highly reliable
11.30
.001**
26 4 100
26.0 4.0 100.0
Analysis is most useful tool while strategizing the portfolios in stock markets
2564.11
.000**
Analysis is the most useful tool while taking long positions in the stock market
444.45
.000**
Chart: 3 Type of Firm
Analysis is more useful while forecasting trends
TA Total FA
780.05
.000**
Analysis is more useful while forecasting turning points
TA Total
2340.31
.000**
Type of Firm
4 70 26
Analysis is advisable to Long term investors Analysis is advisable to short term investors
FA TA Total FA TA Total
4449.61
.000**
1816.92
.000**
** 1% sig * 5% Sig.
Licensed Broking Firm
Licensed Banks
Others
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Fundamental Analysis as a Method of Share Valuation in Comparison with Technical Analysis _______________________________________________________ Chart 4 the analysis has revealed that about 91percent of the respondents have advised Technical analysis for the short term investors and an overwhelming 97 percent of the respondents have advised Fundamental analysis for the long term investors.
Table: 5 Level of Forecasting horizons for Fundamental and Technical analysis
Items Level of variable FA Intra day TA Total N 50 50 100 50 50 100 50 50 100 50 50 100 50 49 99 50 48 98 50 39 89 Mean .10 9.98 5.04 .02 9.98 5.02 .04 9.96 5.41 .52 9.48 6.35 3.37 6.63 7.08 7.25 2.75 6.36 8.31 1.69 6.34 Std. F Deviation Value .303 .141 4.970 .314 .141 4.991 1.178 .198 4.650 1.298 1.035 3.356 1.764 2.690 2.302 .560 1.537 3.731 .198 1.127 4.194 2594 .000** 930 .000** 4 .055 711 .000** 2901 .000** 41568 .000** 43641 .000** Sig Value
Frequency of Analysis Returns in the short term Returns in the long term Bullish highly reliable Bearish highly reliable Portfolios in stock markets Long positions in the stock market Forecasting trends Forecasting turning points Short term investors Long term investors 97 91 92 61 94
28
71.91 11 89.25 5.76 16 83.88 39.40 8.74 8.48 13 86.73 14 86.34 9 90.57 3.24
FA
TA
Table 4 and Chart 4 shows the perceived usefulness of both the analytical tools. More than 72 percent of the respondents use Technical analysis regularly to understand the movements of the stock prices. About 90 percent of the respondents believe that Technical analysis generates huge amount of returns in the short run. On the contrary, 94 percent of the respondents endorse that Fundamental analysis is highly reliable tool for generating returns in the longer run. As the stock market is highly volatile and take the forms of bullish and bearish trends, the survey shows that nearly 84 percent of the respondents rely upon technical indicators when the market is bullish. Close to 61 percent of the respondents take positions based on Fundamental anlysis when the market is bearish in nature. Creating portfolios in the stock market is a matter of utmost importance to all the investors, more than 91 percent of the respondents reveal that Fundamental analysis is the useful tool for creating portfolios in the market. In addition to this a large portion (92 percent) of the respondents agree that Fundamental analysis is the feasible tool for taking long positions in the stock market. For understanding the Stock market game one has to depend more upon trends and turning points. Close to 87 percent of the respondents have choosen Technical analysis for idenfying trends and turning points. Investors in the market can be broadly categorised as, short term and long term investors. Accordingly,
FA 1 week TA Total FA 1 month TA Total FA 3 months TA Total FA 6 months TA Total FA 1 year TA Total FA Beyond 1 year TA Total
** 1% sig * 5% Sig. Chart 5
2.75 6.63 9.98 9.98 9.96 9.48 7.25 3.37 0.52 Intra day 1 week 1 month 3 months 6 months 1 year
1.69
8.31
Beyond 1 year
FA
TA
Table: 5 compare the importance of Fundamental and Technical analysis over seven different horizons. Both approaches exercise an influence, though to a
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Fundamental Analysis as a Method of Share Valuation in Comparison with Technical Analysis _______________________________________________________ different extent, at all horizons. For Fundamental analysis, this influence increases with the length of the time horizon. Out of a 10 point scale 8.31 is been scored by Fundamental analysis for a time horizon of beyond one year. The reverse is true for Technical analysis which has highest score at shorter time horizons and lower scores at longer horizons. At the shorter time horizon it has a scoring of 9.98 on a scale of 10 and at the long time horizon the scoring has reduced to 1.69. Thus, at shorter horizon, there exists a skew towards reliance on technical, as opposed to fundamental analysis, but this skew becomes steadily reversed as the length of the horizon considered increases. This finding is consistent with that of Taylor and Allen (1992) for United Kingdom Stock exchange market and Yu-Hon Lui, David Mole (1998) for Hong - Kong Foreign Exchange market. Further, the analysis indicates dealers consensus on the shift of the skew towards both Fundamental and Technical analysis. Statistical analysis shows that the skew towards reliance on technical methods is significant at the Intraday, 1 week, 1 month and 3 months. The skew towards Fundamental analysis is significant at 1 year and beyond one year, that is, at longer time horizons. This suggests that models that focus on fundamentals may perform badly over shorter time horizons, over a longer time horizon models based on fundamental analysis may perform better. The joint influence of Fundamental and Technical analysis is further confirmed by dealer's perception of their complementarity. A larger proportion of the respondents indicate that the two analyses are complimentary than indicate that they are mutually exclusive or substitutes. Bottom Line : At the bottom line the survey concludes that, at all time horizons, a very high proportion of respondents place some weight on both fundamental and technical analysis while forming views. At shorter horizons, there exist a skew towards reliance on technical as opposed to fundamental analysis, but the skew becomes steadily reversed as the length of horizon considered is increased. Technical analysis can be a very valuable tool, but it is important to realize the benefits as well as the limitations before diving in. There is no definite answer about whether technical analysis should be used as a substitute to fundamental analysis, but many agree that it has its merits when used as a compliment to other investing strategies. More effort should be made into which stocks are predominantly bought by fundamental investors and which ones attract technical analysts. References : Yu-Hon Lui and David Mole (1998) The use of Fundamental and Technical analysis by Foreign exchange dealers: Hongkong evidence, Journal of International Money and Finance, 17 (1998) 535545 Thomas Oberlechner (2001) Importance of Technical and Fundamental analysis in the European Foreign Exchange Market, International Journal of Finance and Economics, January-2001; 6, 81-93 (2001) DoronNissim, Stephen Penman, (2001) Ratio Analysis and Equity valuation; From research to PracticeReview of Accounting Studies 6, 109154, 2001 Nobert M Fiers, Ronald Macdonald, (2002) Towards the Fundamentals of Technical Analysis, Economic Modelling, 19 (2002) 353374 Sanjay Sehgal and Meenakshi Gupta, (2005) Technical analysis in the Indian Capital MarketA Survery, Decision, Volume 32,No.1, JanuaryJune2005 Jennit.L.Bettman,Stephen.J.Salut, Emmenn L Schultz, (2009) Fundamental and Technical Analysis, Substitutes of Compliments, Accounting and Financ49(2009)21-36 http://www.suite101.com/content/the-truth-offundamental-vs-technical-analysis-of-stocksa304962#ixzz1AAew9FKQ
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Venkatesh.C.K. is an Assistant Professor with Govt. First Grade College, Kadugudi, Bangalore-560 067. He can be contacted at ckv_krishna@yahoo.co.in. Ganesh.L, holds doctorate and is a Professor at Christ University Institute of Management, Bangalore. He can be reached at Ganesh.l@christuniversity
CRM Practices in New Age Banks in India _______________________________________________________ Suresh Chandra Bihari
Abstract: The aim of the research paper is to find the most profitable and loyal customer groups from the existing customer base which can be targeted for effective implementation of CRM strategies. In order to achieve this, a study on the different factors affecting the revenue and loyalty to some of the mostly used bank products i.e. credit card, debit card and internet banking services is done. A sample of well diversified group of new age bank customers are surveyed and different customer groups are formed based on different age, sex, occupation and income levels by doing cluster analysis using the survey data. Four customer groups have been identified. These groups are compared based on the level of revenue generated from each customer group and the loyalty to each of these products. The customer group giving maximum profit and more loyal to bank products are identified for implementation of suitable CRM strategy. Keywords: CRM Practices, New Age Banks, Profitable & loyal customers, CRM Strategy
Introduction: In India, the banking industry has been operating in a very stable environment for decades. The initiation of financial sector reforms in 1991, which included industry, trade, taxation, external sector, banking and financial markets, had a great impact on the Indian economy. It strengthened the fundamentals of the Indian economy and transformed drastically the operating environments of banks and financial institutions of the Indian subcontinent (Purwar, 2003). The financial health of Indian commercial banks, in terms of capital adequThe new rules of competition require recognition of the importance of consumers and the necessity to address their needs through innovative products supported by new technology. In this environment, the managerial challenges include market segmentation, product positioning, innovative delivery channels, crossselling, etc. acy, profitability, and asset quality, has improved significantly. This sector is experiencing major changes as a result of the economic reforms. The economic reforms have also created new and demanding customers (the ever-increasing Indian middle class) and the new mix of players consisting of the public sector units, private banks, and the foreign banks. Because of this competition customers' expectations regarding service and innovative products have risen (Ravichandran,
2003). The new rules of competition require recognition of the importance of consumers and the necessity to address their needs through innovative products supported by new technology. In this environment, the managerial challenges include market segmentation, product positioning, innovative delivery channels, cross-selling, etc. There is an urgent need to introduce new products. Existing products need to be delivered in an innovative and cost-effective way by taking full advantage of emerging technologies. In the present scenario of falling interest rates and increasing number of players, the banking industry is finding it very difficult to meet the high growth rate expectations. They are constantly looking for newer ways to achieve organic growth. They are adopting strategies which enable them to acquire new customers and transform them into loyal customers. But the success of a bank's strategy depends upon its ability to develop customer insights and translate them into effective operating strategies. The core of a successful growth strategy for a bank is to ensure a good customer experience at each and every customer touch point. Herein lies the importance of Customer Relationship Management (CRM). The emphasis has to be on CRM in order to sustain and achieve growth and profits. CRM in banking industry focuses on how companies are adopting the concept to converge people, processes and products more
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CRM Practices in New Age Banks in India
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however, CRM systems can be viewed as information systems aimed at enabling organizations to realize a customer focus. Clearly, an increasing number of diverse organizations are adopting CRM, yet surveys are beginning to highlight the potential risks. Even though CRM systems are proving to be an incredibly popular choice for implementation, success is proving to be illusive. According to a study, of the 202 CRM projects, only 30.7 percent of the organizations claimed that they had achieved improvements in the way they sell to and service customers (Dickie, 2000). Moreover, a recent and broader survey estimated that 70 percent of the companies will ultimately fail. The Giga survey also revealed that companies generally underestimate the complexities of CRM, lack clear business objectives, and tend to invest inadequately in the provision of CRM software. While the findings by Giga highlight a fairly gloomy scenario, it is clear that all the organizations are not facing failure. Therefore, there is a great need for more empirical research on the implementation of CRM. Objective : The research objective deals with profiling bank customers based on age, sex, occupation and income into different customer groups and to measure the most loyal and profitable customer groups to the bank. This would help the banks to concentrate on those customer groups to implement CRM strategies which give maximum business to the bank and most loyal to it. Also it helps to design strategies for other customer groups to retain them and to maximize the revenue generated from them. This helps banks to sustain in the market as well as increase their market share and expand their business. Literature Review : CRM has been a part of marketing literature since more than a decade. Interestingly, there is still much debate over what exactly One example of a narrow perspective is to view CRM as database marketing (Peppers and Rogers, 1995) emphasizing promotional aspects of marketing by leveraging customer databases.constitutes CRM (Nevin, 1995; Parvatiyar and Sheth, 2001; Sin et al., 2005). According to Parvatiyar and Sheth (2001), some of the themes represent a narrow functional marketing perspective while others offer a perspective that is
effectively to get along with true relationship marketing. Customer Relationship Management (CRM) has been in India for over a decade but its penetration into the industry in general and financial services sector in particular has not been very impressive. With the entry of many foreign banks and the setting up of many private sector banks, there is an increased competition in the banking sector to attain a competitive advantage. Banks have slowly but surely realized the importance of building and maintaining customer relationships. CRM is a holistic strategy which can help the banks to become customeroriented and implement customer-focused strategies, which in turn will help them build long-lasting relationships with the customers and hence increase their profits. CRM in the banking sector is of strategic importance. The research deals with profiling bank customers based on age,sex,occupation and income and to find out the most loyal and profitable customer group to the bank. This would help the banks to concentrate on those customer groups to implement CRM strategies which give maximum business to the bank and most loyal to it. Also it helps to design strategies for other customer groups to retain them and to maximize the revenue generated from them. This helps banks to sustain in the market as well as increase their market share and expand their business. The current study also explores the association between deployment of customer relationship management (CRM) best practices and loyalty of profitable customers in scheduled commercial new age banks of India with respect to retail banking segment. This is important because a strong positive association will act as a significant motivator to organizations for making larger investments towards deployment of CRM best practices. On the other hand, a weak association will fail to provide necessary encouragement to the same organizations for CRM deployment. This study also highlights the fact that implementing CRM requires effective leadership, sourcing, targeting, and evaluation strategies. In recent years, many organizations have identified the need to become more customerfriendly due to increased global competition. As a consequence, CRM has become an important factor in many organizational strategies. Fundamentally,
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cross-sell and up-sell services to the customers and to bring in prospective customers. Moreover, CRM allows a company to address all types of customers; it serves at different points in their lifecycle and helps to choose the marketing program that best fits a customer's attitude towards the company and willingness to purchase its products and services. According to Blery and Michalakopoulos (2006), whose views are congruent with Brown's, CRM permits businesses to leverage information from their databases to achieve customer retention and crosssell new products and services to the existing customers. They also emphasize that CRM, when successfully implemented, can have a dramatic effect on the bottom line performance. Zineldin's (2005) study on the Swedish banking industry found that the important criteria about a bank from the customer's point of view are account and transaction accuracy, carefulness, efficiency in correcting mistakes, and friendliness and helpfulness of the employees when dealing with the customer. They also identified that convenience of location, price, recommendations from others, and advertising are not important selection criteria for banks. So, three factors figured out very distinctly from their study, viz., CRM, quality of products/services, and differentiation. In another study on a European Bank by Lindgreen and Antioco (2005) the bank treated CRM as a strategy which allowed them to focus on the profitable clients through discriminated segmentation; understanding different combinations of clients, products and volumes; taking a proactive approach; and setting up a mix of distribution channels with standardized or specialized services on a one-to-one basis with the clients. This helped them to satisfy and retain their customers. The study of the Royal Bank of Canada by Khirallah (2001) reflects that their approach to CRM was a perfect balance between technology, people and business processes. The emphasis of this bank on this reality of the industry and its willingness to allocate resources accordingly separates Royal Bank from others in the country. Going over to customer loyalty, Oliver (1999) defined it as a deeply held commitment to re-buy or re-patronize a preferred product or service in the future despite situation influence and marketing efforts having the potential to cause switching behaviour. Thus, loyalty has both an attitudinal and behavioural dimension (Day, 1969; Dick and Basu,
broad and paradigmatic in approach and orientation. One example of a narrow perspective is to view CRM as database marketing (Peppers and Rogers, 1995) emphasizing promotional aspects of marketing by leveraging customer databases. Other examples of a narrow approach include electronic marketing (Blattberg and Deighton, 1991) and aftermarketing (Vavra, 1992). Electronic marketing encompasses all marketing efforts supported by information technology while aftermarketing efforts focus on customer bonding after the sale is made. On a broader level, CRM may mean customer retention or partnering (Peppers and Rogers, 1993, Vavra, 1992). In order to develop a comprehensive list of CRM practices, it is essential to identify the key constructs of CRM. In this direction, Sin et al. (2005) have proposed that CRM comprises the following four constructs: Key customer focus, CRM organization, Knowledge management and Technology-based CRM. Brown (2000) claims that CRM has several advantages over traditional mass-media marketing. Some of them are: Reduces advertising costs; Makes it easier to target specific customers by focusing on their needs; Makes it easier to track the effectiveness of a given campaign; Allows organizations to compete for customers based on service, not prices; Prevents overspending on low-value clients or underspending on high-value ones; Speeds the time it takes to develop and market a product (the customer relationship lifecycle); and Improves the use of customer channel, thus making the most of each contact with a customer. Similarly, Xu and Walton (2005) have put forward some reasons for which companies implement CRM. These are: Improving the customer satisfaction level Retaining the existing customers Enhancing the customer lifetime value Providing better strategic information to sales, marketing, finance, etc. Attracting new customers, and Cost savings In addition to the reasons mentioned above, Brown (2000) states that a company implements CRM to
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Sample Size : A sample of 200 customers of different Indian banks is approached for survey. After running missing value analysis on these data to remove inconsistencies, 181 customers are selected for analysis. As a rule of thumb, a bare minimum of 10 observations per variable is required to avoid computational difficulties1 as the number of questions used in the .So questionaire were 18, so considering the sample size of 181 is fair 2 . Methodology : As the primary objective of the study is to group the customers based on profitability and loyalty aspect, cluster analysis is used. Cluster Analysis is primarily of two types- hierarchical and non hierarchical or kmeans clustering. First the data is analyzed using Hierarchical Clustering to obtain the number of clusters in which the customers are grouped. Hierarchical Clustering technique begins by either a series of successive mergers or of successive divisions. Under Hierarchical Clustering technique the following steps are executed: This technique starts by taking different units which are considered as entities. Mutual distance between successive entities is examined. Those two entities that are most similar are merged. This process is repeated and merging is continued till all are merged to form one entity. At each stage of agglomerative process, distance between the two merging entities is noted. The stage which shows sudden jump in this distance is chosen (Since it indicates that two very dissimilar entities are being merged). After obtaining the number of clusters using hierarchical clustering, the data is analyzed using Kmeans Clustering in which the number of clusters is pre defined. It is basically done to get more clarity about the different clusters which are formed. In K-Mean Clustering, data is divided into k partitions or groups with each partition representing a cluster. Therefore, as opposed to hierarchical
1994). Behavioural loyalty will include examples like repeat purchase, word of mouth, etc while attitudinal loyalty will comprise examples like trust or emotional attachment (Baumann et al., 2005). Further, behavioural loyalty does not necessarily reflect attitudinal loyalty, because there might exist other factors that prevent customers from defecting (Aldlaigan and Buttle, 2005; Liljander and Roos, 2002; Reinartz and Kumar, 2002). Customer loyalty has been additionally related to profit levels (Reichheld and Teal, 1996). Besides, customer loyalty is one of the key objectives of CRM (Das, 2004; Lindgreen, 2004; Parvatiyar and Sheth, 2001; Payne, 2002; Sin et al., 2005). Methodology (Data Collection) : Primary source for data collection is used for study. The sample chosen for study consists of Indian customers of various banks.The sample is divided on the basis of age,sex,occupation and income. Random sampling technique is used for sample selection. The sample consists of homogeneous mix of customers across various age,sex,occupation and income groups as described below:
Age 20 - 30 30 - 40 40 - 50 50 60 60 above Gender Male Female Occupation Student Working professional Self employed Govt. Service Income <10000 10000-30000 >30000
Table 1: Customer Group Dimensions
The questionnaire (as shown in Annexure-1) is used to measure the loyalty and profitability of the existing bank customers towards its three banking products i.e. credit card, debit card and internet banking services. The questionnaire is tested for reliability so that if same questions are re-administered to same respondents, then same responses would be elicited. The questionnaire that respondents are asked to complete consists of series of questions in order to measure the profitability and loyalty of customers towards 3 products i.e. credit card, debit card and internet banking. To measure the profitability for each of the product, number of transaction and amount of transaction per month for each of the customer for each product is used. Similarly to measure the loyalty of customers, preference to other products, switch to other products and recommending others for the product for each customer is taken into account.
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Agglomeration Schedule : The agglomeration schedule shows the number of cases or cluster being combined at each stage as shown in Anexure-2. Each subsequent step leads to a formation of new cluster in one of the three ways 1) by grouping two individual cases 2) by joining a case in already existing cluster 3) by grouping two clusters together. The Coefficients column indicates the distance between the two clusters (or cases) joined at each stage. From the table it is clear that 4-cluster solution is obtained. Dendrogram : Dendrogram is another way of representing the cluster at several stages in the diagrammatical way. A glimpse of the dendrogram formed after analysis is shown in annexure-3. In this the average distances is scaled down to the scale of 25 in order to represent well. From dendrogram it is expected the number of cluster to be 4. Initial Cluster Centers : The mean value for the initial cluster centers is shown in annexure-4. The values in this table are the means for each variable within each initial cluster. For instance, the mean of occupation in first cluster is 2 and in second cluster 4. By default, the program chooses cases which are dissimilar and uses the values of these cases to define the initial clusters. Iteration History : Iteration history as shown in annexure-5 shows the progress of the estimation process after every iteration. At each iteration, as cases are reassigned to different cluster, cluster centers change. Each number indicates how far the new cluster center is from the cluster center at the previous iteration. When the change is small enough for all clusters, iteration stops and the final solution is reached. Final Cluster Center : The final cluster center as shown in annexure-6 shows the means for each variable within each final cluster. The final cluster center reflects the attributes of the prototypical case for each cluster. As the means across all the four clusters are different the result is
clustering, the number of clusters must be known a priori. Under K-mean clustering technique the following steps are executed: K initial cluster centroids or seeds are selected, where k is the number of clustered desired. Each observation is assigned to the cluster to which it is the closest. Each observation is reassigned or re-allocated to one of the k-clusters according to predetermined stopping rules. Finally if there is no re-allocation of data points or if the reassignment satisfies the criteria set by the stopping rule the result is complete else Step 2 is continued. Limitations of the Study :
Only few of Indian banks are taken for our study. But care has been taken to include the major players in Indian banking industry. Only retail customers are taken for the study. Only 3 of the banking products i.e. use of credit card, debit card and internet banking services are taken into consideration for the study based on the popularity and coverage of these products. Some of the factors are considered to measure the profitability and loyalty of the customers. For example to measure the profitability of banks, number of transaction and amount of transaction for a time period is taken into consideration. Similarly to measure the loyalty of customers, individual preference towards the product, willing to switch to another product and recommending others about the product are taken into consideration.
Findings : In order to group customers based on the profitability and loyalty aspect, cluster analysis is applied. Initially Hierarchical Cluster analysis is applied on the data, with Ward's method and interval squared Euclidean distance. After obtaining the number of clusters as 4, K-Means Clustering is applied on the data to get an idea about what type of customers that comes in each cluster.
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CRM Practices in New Age Banks in India validated. Observation :
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Group3 consists of lower age students with no or
As from the output of the cluster analysis it is evident that based on defined age, gender, occupation and income group, the customer base can be grouped into four groups. Each group is having different characteristic towards amount of revenue generating for banks and loyalty towards a bank as evident from final cluster centers as shown in annexure-6. The below summery table explains the different characteristics of each customer group.
Attributes Age Gender Occupation Group-1 30-40 Male Working professional Income 10,000-30,000 Debit Number of 30-60 Card transaction Amount of 10,000-50,000 transaction Loyal Yes Credit Number of 30-60 Card transaction Amount of 10,000-50,000 transaction Loyal Yes Internet Number of 30-60 banking transaction Amount of 10,000-50,000 transaction Loyalty Yes Group-2 50-60 Male Self employed >30,000 30-60 10,000-50,000 Yes <30 10,000-50,000 Yes 30-60 10,000-50,000 Yes Group-3 20-30 Male Student <10,000 <30 <10,000 No <30 <10,000 Yes <30 <10,000 No Group-4 50-60 Male Govt service >30,000 30-60 10,000-50,000 Yes <30 <10,000 No <30 <10,000 No
little income bracket. As these customers are less frequent to credit, debit cards and internet banking services, these customer segment is less profitable to banks. As far as loyalty is concerned, these customers are less loyal to the products and can be easily diverted to other bank products.
Group4 consists of upper age male customers who
are government servants with high income bracket (>30,000). These customers are quite comfortable using debit cards but averse in using credit cards or internet banking services. So major revenue is generated through debit card transactions rather than other services. They are also quite loyal to debit cards. Recommendations : It is clear that each customer has different level of usage towards different products and it is influenced by some factors like income level, age, sex, occupation, financial liability etc. By using three mostly used bank products like credit card, debit card and internet banking services and grouping customer base into four different groups based on income, age, sex and occupation, it is found out that the revenue generated from these group and loyal towards these said bank products differs from group to group. Based on these results following suggestions can be made: As group1 and group2 customers are more
Table 2: Post analysis Summary Table
From the above summary table following conclusion can be drawn: Group1 consists of middle age male customers
who are working professionals with income bracket of Rs 10,000-30,000/month. By analyzing the loyalty it can be drawn that these customers are loyal to the banking products like debit, credit cards and internet baking services and they are not easily switch to other bank products. They are one of the profitable customer segments as the revenue generated in card and internet banking segment are high.
Group2 consists of upper age male customers who
profitable than group3 customers. So much care should be taken and appropriate CRM strategy to be implemented to retain these customers.
Group1 and group2 customers are loyal to all the
three products. So special preference to be given to retain these customers.

CRM strategy to be implemented in debit card
are self employed with high income bracket (>30,000). They are loyal to the banking products. Like group1 working professional customers, they are quite profitable to bank by analyzing the number of transactions and amount of transactions made by them through different financial products. Comparably these customers use less credit card transactions in compare to debit card transactions.
sector to retain the group1, group2 and group4 customers as they are profitable and loyal to the product.
In credit card and internet banking sector CRM
strategy to be implemented to retain group1 and group2 customer segments and to capture group3 and group4 customer segments.
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CRM Practices in New Age Banks in India Conclusion :
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Coyles, S., and Gokey, T. C. (2002). "Customer retention is not enough". McKinsey Quarterly, Vol. 11 No.2, pp. 75-81. Daffy, C. (1999). Once a customer, always a customer. New Delhi: HarperCollins. Das, K. (2004). h-CRM: The key to lifelong business relationships. New Delhi: Viva Books. Dick, A.S., and Basu, K. (1994). "Customer loyalty: Toward an integrated conceptual framework". Journal of the Academy of Marketing Science, Vol. 22 No.2, pp. 99-113. Dyche, J. (2002). The CRM Handbook: A Business Guide to Customer Relationship Management. Upper Saddle River, NJ: Addison-Wesley. Annexures : Annexure-1 Questionnaire Please fill up certain essential details about you and your bank
Name Age (in Years) Name(s) of the banks transacted with Gender (M/F) Occupation
Different customers have different test and preferences. Their usage towards a particular banking product like credit card, debit card, internet banking service is influenced by different internal and external factors like income, age, sex, occupation, financial liabilities etc. So banks should do a proper market research and find out the target customer segment for different products and implement CRM strategy for the customer segment which is most profitable and most loyal as compared to other customer segments. References : Aldlaigan, A., and Buttle, F. (2005). "Beyond satisfaction: customer attachment to retail banks". International Journal of Bank Marketing, Vol. 23 No.4, pp. 349-359. Barnes, J. G. (1997). Closeness, strength, and satisfaction: Examining the nature of relationships between providers of financial services and their retail customers. Psychology and Marketing, Vol. 14 No. 8, pp. 765-790. Baumann, C., Burton, S., and Elliot, G. (2005). Determinants of customer loyalty and share of wallet in retail banking. Journal of Financial Services Marketing, Vol. 9 No. 3, pp. 231-248. Bearden, W. O., Netemeyer, R. G., and Mobley, M. F. (1993). Handbook of marketing scales: Multi-item measures of marketing and consumer behavior research. Thousand Oaks, CA: Sage Publications. Bose, R. (2002). "Customer relationship management: Key components for IT success". Industrial Management & Data Systems, Vol. 102 No. 2, pp. 89-97. Chowdhury, A. (2007, April 2). Loyalty Matrix. Retrieved May 10, 2007, from Businessworld: http://www.businessworld.in/content/view/1116/117 2/ Cokins, G. (2002). Measuring customer value: How BPM supports better marketing decisions. Business Performance Management, pp. 13-18.
Please answer a few questions related to transaction with bank (banks, in case of more than one) you are presently transacting with in terms of the services provided to you. (Please tick one correct option) Please mark your response (tick or encircle) to each of the following statements, according to your best opinion. DEBIT CARD
1) Do you have debit card Yes No 2) If yes, average number of transactions done
per month on your debit card < 30 30 60 > 60
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3) Total amount of transaction done in a month 12) Will you recommend others for using the
at an average on your debit card < 10,000 10,000 50,000 >50,000

4) Do you prefer using debit card for payment
credit card of your bank Yes No Internet Banking
over other payment mode like cash,cheque,credit card etc Yes No

5) D o y o u w a n t t o s w i t c h t o o t h e r
13) Do you have internet bank account Yes No 14) How often you use internet bank service in a
month

bank/discontinue from the current service Yes No

6) Will you recommend others for using the
< 30 30 60 > 60
15) Average amount of transaction done through
debit card of your bank Yes No Credit Card

7) Do you have credit card Yes No 8) If yes, avrage number of transactions done per
your internet banking service in a month at an average <10,000 10,000 50,000 > 50,000
16) Do you prefer using internet banking over
other mode of payment for fund transfer, utility bill payment etc Yes No
17) Do you want to switch to other bank /
month on your credit card < 30 30 60 > 60

9) Total amount of transaction done in a month
discontinue from the current service Yes No

18) Will you recommend others for using the
at an average on your credit card < 10,000 10,000 50,000 >50,000

10) Do you prefer using credit card for payment
internet banking facility of your bank Yes No
over other payment mode like cash, cheque, debit card etc Yes No
11) Do you want to switch to other bank /
discontinue from the current service Yes No
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CRM Practices in New Age Banks in India Annexure - 2 Agglomeration Schedule

Cluster Combined Stage 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 160 161 162 163 164 165 166 167 168 169 170 171 172 173 174 175 176 177 178 179 180 Cluster 1 151 71 14 77 102 87 13 90 105 84 3 2 151 127 83 156 42 75 11 10 91 16 2 1 3 3 13 28 6 2 4 22 8 1 8 4 1 2 1 1 Cluster 2 152 115 71 167 148 133 129 122 119 101 20 15 153 151 102 169 168 163 161 42 156 41 10 12 43 27 17 91 16 5 13 40 28 24 22 6 4 8 3 2 Coefficients .000 .000 .000 .500 1.000 1.500 2.000 2.500 3.000 3.500 4.000 4.500 5.167 6.000 6.833 7.833 8.833 9.833 10.833 510.041 523.035 536.716 551.120 565.763 580.449 598.103 615.957 635.824 656.818 678.856 702.109 727.626 756.155 785.503 825.063 865.629 915.868 975.394 1124.702 1456.685 Stage Cluster First Appears Cluster 1 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 145 135 140 138 139 155 165 144 151 153 163 148 156 159 164 173 171 174 170 177 179 Cluster 2 0 0 2 0 0 0 0 0 0 0 0 0 0 13 5 0 0 0 0 158 143 149 160 147 141 142 124 161 162 157 167 152 168 150 172 169 176 175 166 178
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Annexure - 4 Initial Cluster Centers
Cluster
Next Stage 13 3 80 40 15 130 82 46 81 116 44 52 14 60 64 125 56 113 113 163 168 169 170 174 166 179 171 173 176 178 176 175 175 177 178 177 179 180 180 0
1 age gender occupation income no_tran_debit_card amnt_tran_debit_card prfn_debit_card switch_debit_card recom_other_debit_card no_tran_credit_card amnt_tran_credit_card prfn_credit_card switch_credit_card recom_other_credit_card no_tran_internet_banking amnt_tran_internet_banking prfn_internet_banking switch_inter_banking recom_other_internet_banking 1 0 2 2 2 1 1 0 1 3 2 0 1 0 2 3 1 0 1
2 5 0 4 2 1 1 0 1 0 2 2 1 0 1 1 2 1 0 1
3 1 0 1 1 1 1 0 1 0 1 1 1 0 1 1 1 0 1 0
4 5 0 2 3 3 3 1 0 1 2 2 0 1 0 2 1 0 1 0
Annexure - 5 Iteration History(a)

Change in Cluster Centers Iteration 1 2 3 4 5 6 7 8 9 10 1 2.459 .139 .079 .057 .091 .054 .000 .000 .037 .000 2 2.231 .228 .196 .179 .088 .149 .187 .085 .076 .151 3 1.590 .257 .115 .065 .143 .096 .000 .000 .000 .000 4 2.211 .192 .116 .129 .072 .124 .117 .051 .000 .086
Annexure - 3 Dendogram using Ward Method Rescaled Distance Cluster Combine
Annexure-6 Final Cluster Centers

Cluster 1 age gender occupation income no_tran_debit_card amnt_tran_debit_card prfn_debit_card switch_debit_card recom_other_debit_card no_tran_credit_card amnt_tran_credit_card prfn_credit_card switch_credit_card recom_other_credit_card no_tran_internet_banking amnt_tran_internet_banking prfn_internet_banking switch_inter_banking recom_other_internet_banking 2 1 2 2 2 2 1 0 1 2 2 1 0 1 2 2 1 0 1 2 4 1 3 3 2 2 1 0 1 1 2 1 0 1 2 2 1 0 1 3 1 1 1 1 1 1 0 1 0 1 1 1 0 1 1 1 0 1 0 4 4 1 4 3 2 2 1 0 1 1 1 0 1 0 1 1 0 1 0
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CRM Practices in New Age Banks in India Annexure - 7 Anova

Cluster Mean Square age gender occupation income no_tran_debit_card amnt_tran_debit_card prfn_debit_card switch_debit_card recom_other_debit_card no_tran_credit_card amnt_tran_credit_card prfn_credit_card switch_credit_card recom_other_credit_card no_tran_internet_banking amnt_tran_internet_banking prfn_internet_banking switch_inter_banking recom_other_internet_banking 83.966 .223 22.382 19.087 4.322 3.869 2.716 2.683 2.683 2.768 6.094 6.715 6.715 6.430 5.815 6.976 2.461 2.330 2.461 df 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 Error Mean Square .449 .251 .451 .269 .407 .405 .182 .181 .181 .299 .280 .138 .138 .144 .310 .271 .213 .215 .213 df 177 177 177 177 177 177 177 177 177 177 177 177 177 177 177 177 177 177 177 F
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Annexure - 8 Number of Cases in each Cluster
Sig. .000 .448 .000 .000 .000 .000 .000 .000 .000 .000 .000 .000 .000 .000 .000 .000 .000 .000 .000 .889 49.657 71.037 10.623 9.551 14.886 14.814 14.814 9.253 21.730 48.523 48.523 44.697 18.784 25.717 11.554 10.845 11.554 186.905
Cluster
1 2 3 4
66.000 30.000 33.000 52.000 181.000 .000
Valid Missing
Suresh Chandra Bihari, PhD in Banking and Finance, is a Professor in Banking & Finance at IBS-Hyderabad, a deemed University. He is the winner of the Macro Research Award of 2009-10 of Indian Institute of Banking Finance and is also one of the prize winners in Micro Research Project 2010 of the Institute. He can be contacted at scbihari@gmail.com
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Birenjan Digal Abstract: Recent studies suggest that a negative shock to stock prices will generate more volatility than a positive shock of equal magnitude. This paper estimates and evaluates the forecasting performance of three alternative GARCH type models for predicting the daily volatility of futures market by evaluating the symmetric and asymmetric volatility for Mini gold futures in India Multi Commodity Exchange of India (MCX). The competing Models include GARCH, TGARCH and EGARCH used with Student-t distributions for the period from 1st December 2004 to 15th July 2009. The estimated results show that the symmetric GARCH models provides the best out-of-sample forecasts and offers comparatively high degree of forecast accuracy in conditional volatility for Mini gold futures markets and considered to be the more appropriate model for forecasting the volatility of mini gold futures. Finally, to conclude that new shock will have implication on returns for a longer period, so old information is more important than recent information and that the information decays very slowly. Keywords: Mini Gold Futures Returns, GARCH Model, MCX, Volatility, Forecasting. JEL Codes: C32, G10, C50 Introduction : Volatility is the extent to which the return on an underlying asset fluctuates over a given period of time. It is most commonly calculated as the annualized standard deviation of returns and represents the risk associated with that particular asset. Historically, financial price series have shown great variation in volatility over time. Furthermore, there is significant evidence of volatility clumping. This means that periods of high volatility tended to occur together, as do periods of low volatility. As volatility represents risk, the phenomenon of clumping is very relevant to market participants. However, on a given day past volatility is not important phenomenon to predict future volatility. This is because volatility is a key component of many financial decisions, asset pricing, risk management, portfolio selection and hedging strategies Jondeau and Rockinger (2003). Stock prices volatility in financial markets has received a great attention from academics, policy makers and practitioners over the past decades because it can be used as a measure of risk and often exhibit some well-known characteristics. First, large changes tend to be followed by large changes and small changes tend to be followed by small changes, which mean that volatility clustering is observed in financial returns data. Secondly, financial time series
Forecasting the Symmetric and Asymmetric Volatility in Mini Gold Futures Market: Evidence from Multi Commodity Exchange of India
data often exhibit leptokurtosis, which indicate that the return distribution is fat -tailed as observed by Mandelbrot (1963), Fama (1965), Laurentand Peters (2002). Finally, changes in stock prices tend to be negatively related to changes in stock volatility which is identified to be leverage effectBlack (1976), Christie (1982), Nelson (1991), Koutmas and Saidi (1995). Recently, several authors have investigated the volatility of stock market by applying econometric models and suggested that, no single model is superior Akgiray (1989), Pagan and Schwert (1989). Brailsford and Faff (1996) and Koutmos (1998) examine the predictive performance of several statistical methods with GARCH and TGARCH models for Australian stock exchange. Dimson and Marsh (1990) examine various technical methods of predicting the volatility of UK stock market returns and find that exponential smoothening and regression model performed best according to their criteria. There is a large literature on modelling and forecasting volatility, however only a limited study ha s appeared in the literature focusing on the Indian stock market. Varma (1999) examined the volatility estimation models comparing GARCH and EWMA models in the risk management setting. Pandey (2002) analyzed the extreme value estimators and found the performance with Parkinson estimator for
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63
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forecasting volatility over these horizons. Kumar (2006) examined the comparative performance of volatility forecasting models in Indian markets and the results were found contrary to Brailsford and Faff (1996). Therefore, the research regarding to Indian commodity derivatives are scarce in nature, so the present study shed light on the modelling and forecasting of Mini gold futures market in India. The main purpose of this study is to evaluate the relative ability of various GARCH types of models to forecast daily futures market volatility in Indian commodity market. We investigate the ability of symmetric and asymmetric models to forecast volatility. Finally, we assess whether we can identify one model that is clearly the best according to statistic and risk management evaluation criteria.Our study proceeds along the following lines: Section 2 introduces the data and sample size conducted in this study.Section 3 describes brief discussion about econometric methodology, while Section 4 incorporates the data used and provides empirical results for price discovery measures are determined and compared for two markets.Here we begin with some descriptive statistics and then we pursue with various models for calculating the symmetric and asymmetric effect on volatility. Section 5 investigates theforecasting ability of the models. Ourconclusions are to be found in Section 6. The appendix provides additional empirical analyses of our constructed futures order flow over a long and recent sample. Data and Sample Size : The data for this study consists of observations on the daily closing price returns for Mini Gold futures contracts over the period extending from 1st December 2004 to 15th July 2009 for a total 1660 observations. The MCX and the NCDEX are the two exchanges introduced gold futures contracts in late 2003. These futures contracts trade on the Multi Commodity Exchange of India (MCX) and contract specifications and trading details are available from their website (www.mcxindia.com). As the MCX does not offer an archive of futures prices, we obtain futures prices from their vendor website terminal ( In sample analysis is carried out for the period 1 December 2004 to 31 December 2008 (1523 observations) and the remaining 137 observations
Forecasting the Symmetric and Asymmetric Volatility in Mini Gold Futures Market: Evidence from Multi Commodity Exchange of India (from 1 January 2009 to 15July 2009) are used to evaluate the out -of-sample forecasting performance of the model. Since most trading activities take place in the near -month contract, only near-month contract data are examined. Futures price returns are calculate as Rt = ln(Pt/Pt-1) where Pt is the closing price on day t. 3. Econometric Methodology 3.1 Generalized Autoregressive Conditional Heteroskedasticity (GARCH): Bollerslev (1986) extended Engles ARCH model to the GARCH model and it is based on the assumption that forecasts of time varying variance depend on the lagged variance of the asset. An unexpected increase or decrease in returns at time t will generate an increase in the expected variability in the next period. The basic and most widespread model GARCH can be expressed as; Rt a bRt 1 t
t | It 1 N (0, ht), p p ht ht 0 i i 1 i
j ut
1 1 Where, j>0, i 0, the GARCH is weekly stationery i + j< 1, the latter two quantifying the persistence of shocks to volatility Nelson (1992). In particular, volatility forecast are increased following a large positive and negative index return, the GARCH specification that capturing the welldocumented volatility clustering evident in financial returns date Engle (1982). 3.2 Threshold Generalized Autoregressive Conditional Heteroskedasticity (TGARCH): In TGARCH model, it has been observed that positive and negative shocks of equal magnitude have a different impact on stock market volatility, which may be attributed to a leverage effect Black (1976). In the same sense, negative shocks are followed by higher volatility than positive shocks of the same magnitude Engle and Ng (1993). The
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64
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threshold GARCH mo del was introduced by the works of Zakoian (1990) and Glosten, Jaganathan and Runkle (1993). The main target of this model is to capture asymmetric in terms of negative and positive shocks and adds multiplicative dummy variable to check whether there is statistically significant different when shocks are negative. The conditional variance for the simple TGARCH model is defined by ;
Rt t | It a bRt 1 t
Forecasting the Symmetric and Asymmetric Volatility in Mini Gold Futures Market: Evidence from Multi Commodity Exchange of India 4. Result & Discussion : To assess the distributional properties of mini gold futures, descriptive statistics are reported in the below Table 1. The mean daily percentage return on the mini gold futures is .0979 with a standard deviation of 1.4057. The negative value of skewness and kurtosis are more than 3 indicates that the logarithmic return series is not normally distributed but it is negatively skewed and leptokurtic. The nonnormality can also be confirmed by the Jarque-Bera test where the null hypothesis of the given series is normally distributed. Here the J -B statistic is highly statistically significant and hence we reject the null hypothesis. The unpredictability of returns and volatility clustering of futures returns behavior can be seen by looking at the Ljung-Box Q statistic for 10, 15& 20 lags for mini gold futures returns. The conventional Augmented Dickey-Fuller (ADF) (ADF) test and Phillips Perron (PP) test were employed to test the stationarity of the series at 1 per cent Mac Kinnon critical value. Hence, we reject the null hypothesis of the given series is nonstationary, So the ADF test confirms that the mini gold futures series is stationary which may be interpreted as the stylized fact of mean reversion. The summary statistics of the returns conforms that there is time varying conditional heteroskedastic, fat tail, volatility clustering. The results of univariate GARCH (1,1), TGARCH(1,1) and EGARCH (1,1) models are estimated for mini gold futures returns series and exhibited in Table 2. Next, we use a combination of information criteria such as minimum Akaike information criteria (AIC) and the maximum Loglikelihood (LL) values and a set of diagnostic tests to choose the volatility model that best models the conditional variance of mini gold futures returns. The conditional mean () and Rt-1 parameters are significant in all the estimated models except the EGARCH model. The ARCH and GARCH terms are positive and significant in all the estimates. The sum of the ARCH and GARCH coefficients (+) is very close to one, indicating that the volatility shocks are quite persistent. The parameter estimates of all the GARCH models coefficients of the conditional variance equation, and are statistically significant at
1 N (0, ht), p q i t 1 i u2 1 j 1 j t 1 h j t t 1 u2 d
Where, dt takes the value of 1 if t is negative, and 0 otherwise. So good news and bad news have a different impact. 3.3 Exponential Generalized Autoregressive Conditional Heteroskedasticity (EGARCH) : The Exponential GARCH model specifies conditional variance in logarithmic form, which means that there is no need to impose estimation constraints in order to avoid negative variance Nelson (1991). The mean and variance equation for this model is given by;
Rt a bRt 1 t
t | It
1 N (0, ht), ut j j 1 j ht j 1 j q j ut j ht j i 1 p i ht 1
q log ht
Where, captures the asymmetric effect. The exponential nature of EGARCH ensures that the conditional variance is always positive even if the parameter values are negative; thus there is no need for parameter restrictions to impose non-negativity.
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65
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1percent and 5 per cent levels implying a strong support for the ARCH and GARCH effects. The sum of ARCH () and GARCH () estimates are quite close to unity, which is an indication that the stationary model with high level of persistence and long memory in the conditional variance. In the GARCH (1,1) model, (+) observed with 0.9998 is also an estimation of the rate at which the response function decays on daily basis. Since the rate is high, the response function to shocks is likely to die slowly. In other words, if there is a new shock it will have implication on returns for a longer period. In such markets old information is more important than recent information and that the information decays very slowly. For the TGARCH and EGARCH models the persistence in volatility is very long and explosive suggestive of an integrated process. The asymmetric effect captured by the parameter estimate is negative and significant in the TGARCH suggesting the presence of a leverage effect. The asymmetry term is however positive and insignificant in the EGARCH model, also suggesting no leverage effect. The presence of a leverage effect is mixed. The results of diagnostic tests statistics show that the GARCH models are correctly specified. The Qstatistics for the standardized squared residuals are significant at GARCH (1,1) model, suggesting the GARCH models are successful at modelling the serial correlation structure in the conditional means and conditional variances. Overall, using the minimum AIC and the maximum LL values as a model selection criteria for the GARCH models, the preferred model is the GARCH model based on the AIC and LL. 5. Forecast Evaluation In order to evaluate the forecasting performance of different models we use four forecast error statistics, namely, the mean absolute error ( MAE), the root mean square error (RMSE), the mean absolute percentage error ( MAPE) and the Theil- U statistics, defined as follows :
MAE 1n | i ni 1 i|
i i
n 1 RMSE (
)2
MAPE
n i 1 1n i |( ni 1 i 1i
i) /
i|
n ( i 1 n i 1 ( i 1 )2
2
TU
i)
Where in all the above statistics 'n' stand for the number of out of sample forecasts. MAE and RMSE are two of the most popular measures to evaluate the forecasting capability of a model. MAE measures the average absolute forecast error. It is a conventional forecast accuracy evaluation criterion which does not permit the offsetting effects of over prediction and under prediction. Whereas RMSE weights greater forecast errors more heavily in the average forecast error penalty. Another criterion which is popular among financial researchers is T heil U statistics (Theil, 1996). Theil- U statistics uses the random walk model as a benchmark model for comparing the level of accuracy of forecast model. A U statistic of one indicates that the model under consideration and the benchmark model have equal forecasting capability. While if U < 1 the forecasting model under consideration is better than the benchmark model and vice versa for U > 1. In short, the model that exhibits the lowest values of the error measurement technique is considered to be the best model. The results reported in Table 3 shows that the GARCH model has outperformed all the other models and provides the most accurate forecast. On the basis of MAE, RMSE foreca st error statistics and Theil s U statistics. GARCH model dominates the forecasting performance and it is considered to be the
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best model followed by the TGARCH model. On the other hand the EGARCH model is the worst performing model under the same criterion. However, under the MAPE forecast error statistics the EGARCH model is considered as the best model and t he TGARCH model ranked second best. Despite its mathematical and statistical simplicity, the GARCH model provides the most accurate forecast compared to other competing models in the study. Our finding suggest, that the GARCH model is the best model and offers comparatively high forecast accuracy is consistent with the study of Stock and Waston (1998) which argues in favour of GARCH model among other rival models for the US macroeconomics series. Figure 1 (appendix) presents the out-of-sample volatility forecast and variance forecast for the Mini gold futures return series. 6. Conclusion : The main purpose of this paper is to examine the relative ability of various GARCH types of models to forecast daily futures market volatility in Indian commodity market to evaluate the symmetric and asymmetric volatility behaviour of Mini gold futures market in India. Our findings suggest that the Mini gold futures return series explores the stylish characteristics lik e volatility clustering, leptokurtosis and asymmetric effects associated with future return series on more advanced stock markets. The parameter estimates for ARCH () and GARCH () estimates are quite close to unity, which is an indication that the stationary model with high level of persistence and long memory in the conditional variance. Therefore, the GARCH (1,1) model is the best model and offers comparatively high forecast accuracy in conditional volatility for Mini gold futures markets. Finally, we conclude that new shock will have implication on returns for a longer period, so old information is more important than recent information and that the information decays very slowly and asymmetric model is considered to be the more appropriate model in predicting future response. References : Akgiray. V. (1989), Conditional Heteroskedasticity in Time Series of Stock Koutmos, and Saidi (1995), Asymmetric Volatility and Risk Return Tradeoff in Foreign Stock Markets, Journal of Multinational
Forecasting the Symmetric and Asymmetric Volatility in Mini Gold Futures Market: Evidence from Multi Commodity Exchange of India Returns: Evidence and Forecasts, Journal of Business, 62, 55-80. Black., F. (1976), Studies of Stock Market Volatility Changes, Proceedings of the American Statistical Association, Business and Economic Statistics Section, 177-181. Bollerslev, T. (1986), Generalised Autoregressive Conditional Heteroskedasticity, Journal of Econometrics, 31, 307-27. Brailsford T.J. and R.W. Faff, (1996), An Evaluation of Volatility Forecasting Techniques, Journal of Banking and Finance, 20, 419-38. Christie. A. A (1982), The Stochastic Behaviour of Common Stock Variance Value, Leverage and Interest Rate Effects, Journal of Financial Economics, 10, 407 -432. Dimson, E. and Marsh, P. (1990), Volatility Forecasting without Data -Snooping. Journal of Banking and Finance, 14, 399 421. Engle, R. F. (1982), Autoregressive Conditional Heteroskedasticity with estimates of the variance of United Kingdom inflation, Econometrica, 50, 987-1007. Fama, E., (1965), The Behaviour of Stock Market Prices, Journal of Business38(1),34105. Glosten, L. R; Jagannathan, R., & Runkle, D. E, (1993), On the Relation between the Expected Value and the Volatility of the Nominal Excess Returns on Stocks. Journal of Finance, 48(5), 1779-1791. Jondeau. E & Rockinger. M (2003), Conditional Volatility, Skewness and Kurtosis: Existence, Persistence, and Comovements, Journal of Economic Dynamic and Control, 27, 1699 1737.
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Financial Management, 2, 27-43. Koutmos, G., (1998). Asymmetries in the Conditional Mean and the Conditional Variance: Evidence from Nine Stock Markets, Journal of Economics and Business, Vol:50, Pp: 277-290. Kumar. S.S.S (2006), Comparative Performance of Volatility Forecasting Mo dels in Indian Markets Decision, 33 (2), 26 40. Laurent S. and Peters J-P, (2002). GARCH 2.2: An Ox package for estimating and forecasting various ARCH models, Journal of Economic Surveys, 16, 447485. Mandelbrot, B., (1963), The Variation of Certain Speculative Prices, Journal ofBusiness, 36, 394-419. Neloson, D.B (1991), Conditional Heteroskedasticity in Asset Returns: A NewApproach, Econometrica, 55, 703 708. Pagan A.R. and G. W. Schwert, (1989), Alternative Models for Conditional StockVolatilities, Journal of Econometrics, 45, 267-290. Pandey A (2002), The Extreme Value Volatility Estimators and Their Empirical.Performance in Indian Capital Markets,NSE Working Paper No. 52downloadable from Stock, J. and Watson, M. (1998), A Comparison of Linear and non-linear UnivariateModels for Forecasting Macroeconomic Time Series, NBER Working Paper, No. 6607. Varma, J.R (1999), Value at Risk Models in the Indian Stock Market IIMA WorkingPaper No: 99 07 05. India. Theil H (1996), Applied Economic Forecasting North Holland, Amsterdam. Zakoian. J (1994), Threshold Generalized Autoregressive Conditional HeteroskedasticityModels, Journal of Economic Dynamics and Control, 18, 931 955.
Table: 1 Descriptive Statistics for Mini Gold Futures Return Series

NOB Mean S.D Skewness Kurtosis Jarque-Bera 1660 0.0979 1.4057 -1.603 24.0204 11513.7 Probability LB (10) LB (15) LB (20) ADF PP 0.00000 43.3259 60.2815 74.8354 -7.48808* -57.0139*
Sample:December 1, 2004 to July 15, 2009. The Ljung - Box Q test of serial correlation of up to 20 lags. ADF is the Augmented Dickey Fuller Test and PP refers to Phillips Perron Test. * indicates significance at 1 % level.
Table: 2 Estimated Volatility Models
GARCH TGARCH EGARCH Mean Equation: 0.0083* (29.48) 0.0086* (32.64) Rt-1 0.2095* (10.08) 0.1891* (9.50) Variance Equation: LB (10) ARCH Test AIC LL 3.6604 (8.14) 0.1308* (5.49) 0.8690* (12.0) 198.45* 0.8896** -6 30812 8861 133 9.70E-07* (9.80) 0.1557** (2.32) 0.8340* (-8.54) -0.1406** (2.14) 217.78* 0.8140 -6 31643 8850 692
Models
0.0083 (1.08) 0.2057 (1.42)
-0.6275 (-1.31) 0.1436* (3.05) 0.8245* (23.40) 0.1471 (1.38) 208.15* 0.9135 -6 30751 8848 051
Note: * and ** indicate Statistically Significance at 0.01 per cent and 0.05 per cent level. Superscripts (1) denote rank of the model.
Table: 3 Forecast Performance of Estimated Models
Particulars Root Mean Squared Error Mean Absolute Error Mean Absolute Per cent Error Theil Inequality Coefficient GARCH 0.01928 0.01308 2.69514 0.49429 TGARCH 0.02003 0.01339 2.32422 0.53880 EGARCH 0.02006 0.01340 2.31370 0.54022
Notes: Out-of-Samples forecast for the period from 1 January 2009 to 15July 2009
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Appendix Figure 1: Static Volatility Forecast and Forecast of Variance Graphs
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Birenjan Digal is an Assistant Professor in the Department of Management Studies, Christ University, Bangalore. His contact email is birenjan.digal@christuniversity.in
Growth of Retail Credit by Commercial Banks in Karnataka _______________________________________________________ Linda Daniel & R.Alamelumangai Abstract: Retail Credit by Banks is going through a growth phase in Karnataka. The results of the analysis show that Nationalized Banks dominated the Retail Credit segment of Banks in the year 2000. But in the last decade Private Sector banks and Foreign banks slowly paved way into this sector and took over a major portion of the market share in this segment. Customer Relationship Management and Quality of Service offered have helped them to establish themselves firmly. 'Fingertip banking' through internet and mobiles has replaced the days when the customer has to be physically present to avail the banking services. Each customer is recognized to be unique and the banks' offerings are designer made to meet the individual's needs. Customer Retention is as important as Customer Attraction. Housing loans continue to dominate the Retail Loan Segment. This is due to the large size and long tenure of the individual housing loan. State Bank Group, Nationalised Banks and Private Banks have cashed in on this opportunity. The second major component is vehicle loans and credit cards. Foreign Banks on the other hand have identified the Credit Card segment as being lucrative and have carved a niche for themselves with aggressive marketing strategies.
Introduction : Banking in Karnataka begun in 1868, when the Presidency Bank of Madras opened its branch to cater to the needs of the British plantation produce exporting companies. Karnataka Bank was established as an off shoot of the Swedeshi Movement in 1905. The freedom movement of India also played a crucial role as can be seen in the establishment of Karnataka Bank which was created as an off shoot of the swadeshi movement of 1905. The enactment of the Indian Co-operative Societies Act in 1912 led to the establishment of many cooperative societies in the region. Agriculture the primary sector of the economy was the focus of these banks. Seven principal banks of the country viz., Canara Bank, Syndicate Bank, Corporation Bank, Vijaya Bank, Karnataka Bank, Vysya Bank and the State Bank of Mysore have originated from the State of Karnataka. With its rich banking heritage Karnataka is aptly called 'The Cradle of Banking in India. State Bank of Mysore, Canara Bank, Vijaya Bank and Vysya Bank have their headquarters in Bangalore. Corporation Bank and Karnataka Bank have their headquarters in Mangalore while Syndicate Bank is headquartered in Manipal. Until the early 1990's the banking scenario was dominated by public sector banks and other scheduled banks. The few private banks were no threat to these major players due to the
strict government policies. Hence the banks did not feel the need to foray into sectors that were under served. The entry of the private sector into the banking sector with aggressive marketing has led these banks to rethink some of their strategies. Earlier Banking was the main activity of these banks. Due to entry of the private banks and foreign banks they have been forced to diversify into other areas like insurance, equity and mutual funds. Lending operations of commercial banks have undergone a phenomenal change. Revolutionary changes are witnessed in the retail lending segment of commercial banks. Gone are the days when the customer had to be physically present at the premises to get a loan facility. Technological innovations have facilitated the conversion of 'physical banking' into 'fingertip banking' In developing countries innovations in information technology, evolvement of the global market and financial market reforms have attributed to the spurt of the retail lending operations. At the end of March 2009 there were totally 67 commercial banks operating in Karnataka including 12 foreign banks. This is the second highest State in the country after the State of Maharashtra which has 79 commercial banks in operation. The total number of branches of commercial banks in Karnataka is 5998 and the average number of people served by each branch is 10,000 against the national average of
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Growth of Retail Credit by Commercial Banks in Karnataka _______________________________________________________ 14,000. This indicates the intensity of penetration of banking in the State. In the current scenario, banks have been thriving on retail lending. Retail operations help to increase probable profits and limit probable losses. The focus of banks now, is to increase the probable profits while limiting possible losses. The size of loans and also the wide variety of product offering has helped the bank spread their risk and be safer to a larger extent. Like other countries in the world, India is also experiencing a real surge in retail banking. Retail loans which stood at 11% of the total bank credit of the country in the year 2000 increase to 20% of the total bank credit by March 2009. The retail boom has not only pulled the domestic player but even the foreign banks are looking for a share in the pie. The Germany-based Deutsche Bank opened its first Asian retail branch in India in the year 2005 year and entered the credit card segment in 2007. The bank has a lot of expectations from the sub-continent. Kenneth Borda, Chief Executive (Asia-Pacific, excluding Japan), Deutsche Bank had remarked that India will be the destination outside their home markets. Retail exposure of banks includes various types of retail credit, such as residential mortgages, consumer credit cards, automobile and personal loans, loans against securities, and small business loans. The most common type of retail loans in India are housing loans, loans for consumer durables, personal loans and education loans. Credit cards have also become important in the retail lending segment. Today's retail banking sector has become multidimensional. There are multiple product offerings like deposits, credit cards, debit cards, insurance, investments and securities. These are delivered to the consumer via multiple channels like call centre, internet, mobile and kiosk. Most of the retail banking is executed electronically through the Automated Teller Machines, Mobile Phones and Online Banking. Review of Literature Finch, J. Howard et al (1996) studied the changing face of Retail Banking and concluded that the modern bank must implement a program to quantitatively measure and monitor customer satisfaction to benchmark service improvements. A bank's overall mission and strategy must also change to reflect this new focus, and rewards and recognition must reflect the new customer service implementation. Banks that successfully make these changes should have a secure future in the financial services industry. Frances X.Frei (1997) studied Process Variation as a Determinant of Service Quality and Bank Performance and concluded that the task for the managers is to discover the best process improvements to result in process variation. Today there are several service delivery channels in financial institutions: branches, call centers, mail, ATMs, direct (PC) banking, Web-based banking, and sales kiosks. These service delivery channels are subtly different and require different process designs to achieve required performance criteria. For instance, in the high volume channels-branches, call centers, and mail virtually all service processes are initiated by data entry done by bank employees. With the newer channels, consumers do the data entry and initiate the service processes. This change in process initiation has implications for managers. As financial institutions invest in developing new service delivery channels, they need to understand the impact of process variability on service performance. Lawrence J. Radecki (1998) while studying that geographic reach of retail markets concluded that if depositors are offered incentives in the form of higher yields or lower minimum balance requirements, many might be prepared to switch to an out-of-town bank, a development that would create a national market for retail banking products. Frances X Frei et al (1998) identified that innovation in banking lies more in process and organizational changes than in new product development. Given the inability to control the use of the varied distribution channels (ATMs, branches, etc.), banks are either investing in all channels simultaneously or undertaking fairly radical changes to their service offerings. Thus, bank managers face a crucial decision of choosing between the correct strategy for the future and living with misaligned systems that they know to be inefficient. The micro-foundations of retail banking are embedded in the inter-relatedness of learning processes within the producer/user dimension of the
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Growth of Retail Credit by Commercial Banks in Karnataka _______________________________________________________ service sector. The bulk of commercial banking innovation consists of inter-dependences created by the impulse of new technologies and propagated by means of adaptive changes in the organizational forms and in the absorptive capacity of demand accrued by means of capabilities and competences (Davide Consoli -2003). Kimberly Hedley et al (2005) predicted that by the year 2015, the retail banking industry will be forced to adapt to rapidly changing customer expectations. Population growth will increase the relative numbers of both the oldest and youngest customer segments, posing significant new challenges and opportunities for banks. While older customers tend to require more high-touch service but are generally more loyal, youthful customers are fickle, technology savvy, and highly inclined to research and negotiate the best deals. Customers' decision patterns will become more complex. Better-informed, more discerning customers will redefine the rules of the game by demanding greater advocacy and control in their banking relationships. 2015 will present tremendous opportunities for retail banks, particularly with respect to harnessing product, service and process innovation to serve customers better, to differentiate themselves in an increasingly crowded market-place, and to de-commoditize current products and services. Moreover, advances in technology will enable unprecedented levels of global connectivity, IT functionality and the ability to realize the enormous potential of data. Shyamala Gopinath (2005) says that the percentage of middle to high income Indian households is expected to continue rising. The younger population not only wields increasing purchasing power and more comfortable in availing personal loans compared to previous generations. Improving consumer purchasing power, coupled with more liberal attitudes toward personal debt, is contributing to India's retail banking segment. To face the future a paradigm shift in bank financing through innovative products and mechanisms involving constant upgradation and revalidation of the banks' internal systems and processes is required. Banks now need to use retail as a growth trigger. This requires product development and differentiation, innovation and business process re-engineering, micro-planning, marketing, prudent pricing, customization, technological up-gradation, home / electronic / mobile banking, cost reduction and cross-selling. Beverly J. Hirtle et al (2005) studied the Performance of US Banks in relation to retail operations and concluded that a focus on retail activities is not associated with improved performance, measured by equity market returns and volatility, for the largest banks, and may actually lower performance for small and medium-sized institutions. Their examination of the industry trends and commentary suggested a cyclical nature to the interest in retail activities. In this sense, the current level of focus may well be temporary as banks react to the turbulence in capital markets since 2000. As technology continues to evolve and relative returns in other financial activities improve, banks may once again switch their focus to developing other businesses and shifting away from the branch-centric mode of retail banking. V.P.Shetty (2006) argues that the growth prospects under retail finance is due to a) change in psychology of the Indian consumer who is no longer credit averse, b) paradigm shift in the lender's profile from NBFCs to commercial banks which are able to offer not only much better rates but also an entire product suite to suit the customers needs and c) increase in household incomes in the backdrop of the surge in the Indian economy. Within the retail finance market, housing loan is the biggest component which would continue to grow. Banks are responding to the huge loan growth momentum through innovative and customized products, and flexibility to the customers through different options. S.Santhanakrishnan (2006) has pointed out that the retail asset market (as measured by disbursements) has grown at a compounded annual rate of 30% for the last three years. The asset market has been growing twice as fast as bank credit and thrice as fast as the nominal GDP. They believe this is a strong structural trend that will gather momentum over the years ahead. Mortgages, two-wheeler loans and credit cards have seen the fastest growth. Penetration of organized financing is on the rise, while the share of organized financiers has increased to around 40% of the financing market. Seventy percent of the cars sold in India are purchased through finance schemes. Amit Singh Sisodiya and Kavitha Putta (2006) have said that retail banking promises to be the next growth hotspot. With a growing middle-class, booming job
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Growth of Retail Credit by Commercial Banks in Karnataka _______________________________________________________ market scenario, and increasing household income, it is not hard to know where the growth lies. It is this reason that is driving the banks in the country to capitalize on this upcoming trend. Taking the lead have been the private sector banks, which are ruling the retail roost in the country. Apart from conventional banking, banks are now supplementing their products by introducing consumer-centric services. N Kamakodi and M Basheer Ahmed Khan (2008) conducted a study among bank customers about their views on electronic banking channels and the result highlighted the necessity of human contact with the clients by the banks. This throws up a challenge to banks. Technology alone cannot give a sustainable competitive advantage for the banks. When all banks introduce modern technology, a bank will lose its position as a differentiator. Beyond a point, modern technology along with 'personal touch' will be necessary to retain existing clients and to attract new ones. Banks have to incorporate this in their operational strategy. H.S. Srivatsa and R. Srinivasan (2008) conducted a study in the state of Karnataka regarding the New Age Youth Behaviour in banking. From the results they concluded that across all regions, convenience is the main deciding factor in bank selection criteria. The group that believes in branch banking still exists and the reason can be attributed to the safety factor and the inertia to change. Channel convenience and security are very important factors in deciding the channels. Across all the four regions, tele-banking was not popular since it was not perceived as a safe and convenient channel. In terms of product selection, customers look at benefit maximization and convenience in products as the most important factors. The results also explicitly state that customers would strongly consider those products that come with extra benefits at gratis. Objectives To study Retail Lending Operations Vis--vis Total Credit by commercial banks in Karnataka To study the composition growth of Retail Lending Operations by commercial banks in the State of Karnataka To study the extent of the entry of Private Throughout the period under reference (2000 to 2009), there is a quantum jump in both Total Credit and Retail Credit of Scheduled Commercial Banks of Karnataka. Between 2000 and 2009, the quantum of Total Credit of commercial banks is increased by 7.07 times and that of Retail credit by 11.14 times in Karnataka. Retail Credit in Karnataka accounted for only 16% of the Total Credit a decade ago but this has Sector Banks and Foreign Banks into the area of Retail Lending Operations in the state of Karnataka. Methodology : The relevant data was compiled from Basic Statistical Returns of Scheduled Commercial Banks in India, RBI Annual Publications. The period under study is the Ten Period 2000 to 2009. Meaning of Retail Credit :
Retail banking refers to the dealing of Commercial banks with individual customers, both on liabilities and assets sides of the balance sheet. Fixed, current and savings accounts are the constituents in the liabilities side and cash credit, overdraft and term loans are the constituents on the assets side. Related ancillary services include credit cards and depository services. Modern retail banking sector is characterized by three basic characteristics namely a) multiple products (deposits, credits cards, investments and securities), b) multiple channels of distribution (call centre, branch, internet and kiosk) and c) multiple customer groups (consumer, small business and corporate). In retail banking institutions execute transactions directly with consumers, rather than corporations or other banks.
In retail lending operations, the typical products offered in India are housing loans, consumption loans for purchase of durables, auto loans, credit cards and educational loans. The loans are marketed under attractive brand names to differentiate the products offered by different banks. The loan values of retail lending typically range between Rs.20,000 to Rs.100 lakh. The loans are generally for duration of five to seven years with housing loans granted for a longer duration of 15 years. Credit card is another rapidly growing sub-segment of this product group. Analysis and Interpretation : Retail Lending Operations Vis--vis Total Credit by commercial banks in Karnataka.
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Growth of Retail Credit by Commercial Banks in Karnataka _______________________________________________________ increased gradually and in the year 2009 Retail Credit Karnataka accounted for 1/4th of the Total Credit. This growth can be seen in the following Table No.1. This clearly indicates that commercial banks in Karnataka are focusing on Retail Credit.
Table 1
(In Percentage)
Year (End March) 2000 2001 Housing Loans 36 42 38 46 53 55 59 62 60 61
Loans for Other Consumer Retail Durables Loans 7 5 3 2 2 3 2 2 2 1 57 53 59 52 45 42 39 36 38 38
Percentage Share Of Retail Credit To Total Credit Of Scheduled Commercial Banks In Karnataka from 2000 to 2009
(Rs. in crores)
2002 2003 2004 2005 2006 2007 2008 2009
Year (End March) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Total Credit (Rs.) 30,053 33,856 43,363 53,540 64,623 86,648 1,24,508 1,70.833 1,97,630 2,12,325
Retail Credit (Rs.) 4,908 5,822 8,449 11,511 17,526 25,885 37,373 45,696 51,107 54,677
Percentage share of Retail Credit to Total Credit 16.33 17.20 19.48 21.50 27.12 29.87 30.02 26.75 25.86 25.75
Source: Compiled from Basic Statistical Returns of Scheduled Commercial Banks in India, RBI Annual Publications.
Extent of the entry of Private Sector Banks and Foreign Banks into the area of Retail Lending Operations in the state of Karnataka : Private Sector and Banks and Foreign Banks have slowly made a foray into the Retail lending segment and carved a niche for themselves over the last decade. In the beginning of the twentieth century both these groups had a market share of just 15%. Their penetration has been gradual and by the end of 2009 they have moved to 36% of the market share. They have in fact eaten into the market shares of State Bank Group and Nationalized Banks. This can be seen very clearly in Table 3.
Table 3 Bank Groupwise Market Share Of Scheduled Commercial Banks Under Retail Credit in Karnataka
Year (End March) 2000 State Bank Group 29 28 23 22 Nationalised Regional Rural Banks Banks 51 48 40 45 5 6 5 4
Source: Basic Statistical Returns of Scheduled Commercial Banks in India, RBI Annual Publications.
Composition of Retail Credit : Retail Credit of Commercial banks have been categorized under three headings namely a) Housing loans, b) Loans for consumer durables and c) Other retail loans. Housing loans continue to dominate the retail credit segment by virtue of their per account value and tenure. Housing loans are showing an upscale movement. They account for 61% of the Retail loans. The other two components loans for consumer durables and other retail loans are showing a decreasing trend except in the years 2002 and 2009. The composition of Retail Credit extended by Commercial banks in Karnataka from 2000 to 2009 is depicted in Table 2.
Table 2 Composition Of Retail Credit Extended By Commercial Banks In Karnataka from 2000 To 2009
(In Percentage) Private Foreign Sector banks Banks

10 11 8 8 5 7 23 21
2001 2002 2003
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Growth of Retail Credit by Commercial Banks in Karnataka _______________________________________________________

2004 2005 2006 2007 2008 2009 20 20 20 20 21 22 43 37 39 39 36 39 3 2 1 2 2 3 22 26 24 27 31 28 13 15 16 12 10 8
Source: Compiled from Basic Statistical Returns of Scheduled Commercial Banks in India, RBI Annual Publications.
To dwell further into this aspect, we have considered the percentage share of different components of Retail Credit for various Banks in Karnataka for the year 2009. Housing loans are the major component of Total Retail loans for State Bank Group, Nationalised Banks and Private Sector Banks. The major component of the Regional Rural Banks is other loans owing to the inherent nature of their banking motives. Vehicle loans account for 1/5th of the retail credit of Private Sector banks. This indicates the booming automobile loan segment. Education loans have been given importance by State Bank group and Nationalized banks. The surprise element is the focus on Credit Cards Segment by Foreign Banks. They have established themselves as market leaders in this segment. 73% of their Retail lending operations is in the area of Credit Cards.
Table 4 Share of Different Components of Retail Credit for Various Banks in Karnataka for the year 2009.
(In Percentage)
Regional All SBI and Nationalised Foreign Private Rural Commercial Associates Banks Banks Banks Banks Banks 62 59 17 20 58 51 0 7 7 0 24 2 5 6 1 27 0 0 0 73 10 7 6 3 0 64 1 21 0 3 16 1 9 3 15 21
is almost negligible. This is due to the fact that the size of the individual housing loan is much large and the tenure much longer. The rise in the middle class population with a need for 'owned houses' has also contributed to this. Hence State Bank Group, Nationalised Banks and Private Banks have cashed in on this opportunity. Other retail loans account for more than half of the retail credit. The major components in this segment are vehicle loans and credit cards. The boom in the vehicle loans is attributed to advancement in technology and in credit cards to the ease of shopping. Foreign Banks on the other hand have identified the Credit Card segment as being lucrative and with their aggressive marketing strategies carved a niche for themselves. Nationalized Banks were dominating the Retail Credit segment a decade ago. But now, Private Banks with their state of art technology based services and personalized services have become the key players in this area. Nationalized Banks have to either adopt technology based strategies combined with human touch or be left behind in the race. References :
Basic Statistical Returns of Scheduled Commercial Banks in India, Annual Publication of Reserve Bank of India
(2000 to 2009) Davide Consoli (2003). The evolution of retail banking services in United Kingdom: a retrospective analysis, ESRC Centre for Research in Innovation and Competition, University of Manchester, CRIC Working Paper No 13 Lawrence J. Radecki (1998), The Expanding Geographic Reach of Retail Banking Markets, Federal Reserve Bank of New York Economic Policy Review. Frances X. Frei, Patrick T. Harker and Larry W. Hunter, (1998) Innovation in Retail Banking, The Wharton School, University of Pennsylvia Kimberly Hedley, John White, Cormac Petit dit de la Roche and Sunny Banerjea (2005) The Paradox of Banking 2015Acheiving more by doing less, IBM Institute for Business Value, IBM Business Consulting Services
1. Housing 2. Consumer Durables 3. Vehicle loans 4. Education loans 5. Personal Credit Cards 6. Others
Conclusion : Retail Credit continues to be a significant component of the Total Bank Credit in Karnataka. It accounts for nearly 1/4th of the total bank credit in Karnataka in 2009. Housing loans continue to dominate the Retail Loan Segment while the Consumer Durables Credit
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Growth of Retail Credit by Commercial Banks in Karnataka _______________________________________________________ Frances X. Frei, Ravi Kalakota and Leslie M. Marx (1997), Process Variation as a Determinant of Service Quality and Bank Performance: Evidence from the Retail Banking, The Wharton School, University of Pennsylvia, Financial Institutions Center. Ms Shyamala Gopinath (2005), Retail Banking Opportunities & Challenges Keynote address at the IBA - Banking Frontiers International Conference, Mumbai, 28 May 2005. Beverly J. Hirtle and Kevin J. Stiroh (2005), The Return to Retail and the Performance of U.S. Banks, Federal Reserve Bank of New York, Staff Reports no. 233. Finch, J. Howard and Helms, Marilyn M. (1996), The Changing Face of Retail Banking, Bank Marketing; Jun96, Vol. 28 Issue 6, p49 N Kamakodi and M Basheer Ahmed Khan (2008), Customer Expectations and Service Level in EBanking Era: An Empirical Study, The IUP Journal of Bank Management, 2008, vol. VII, issue 4, pages 5070. V.P.Shetty (2006), Indian Banking Sector: The Changing Paradigm, Chartered Financial Analyst, October 2006, p34. S.Santhakrinan (2006), Role of Credit Information in Retail Banking: A Business Catalyst, Chartered Financial Analyst, October 2006, p71-74. Amit Singh Sisodiya and Kavitha Putta (2006), Retail Banking: Banks Rush In, Chartered Financial Analyst, October 2006, p86, p87. H.S. Srivatsa R. Srinivasan (2008), New Age Youth Banking Behavior An Explorative Study In The Indian Banking Sector, Journal of Services Research by Institute for International Management and Technology, Volume 8, Number 2 (October 2008March 2009) Bhaskar.T, Sundararajan,R and Krishnan.P.G (2009). A fuzzy mathematical programming approach for cross-sell optimization in retail banking, Journal of the Operational Research Society, May 2009, Vol. 60 Issue 5, p717-727, p11.
Linda Daniel is a Ph.D student with Alagappa University, Karaikudi, Tamil Nadu, India. E-mail:linda.suku@gmail.com R.Alamelumangai, Associate Professor, School of Management, Alagappa University, Karaikudi, Tamil Nadu, India. E-mail: mangai1905@gmail.com
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Technology Leadership _______________________________________________________ Joseph Sebastian Thekedam Abstract: This empirical study attempts to investigate the technology leadership of principals by using the seven primary dimensions of principals' technology leadership: i) vision and leadership; ii) learning and teaching; iii) productivity and professional practice; iv) support, management, and operations ; v) assessment and evaluation; vi) responsible decision making related to social, legal, and ethical issues and vii) interpersonal and communication skills. The main objectives of this study are to investigate principals' technology leadership practices in their respective colleges and the methods and strategies principals use to lead technology integration into the educational environment. Qualitative as well as quantitative data were collected by means of semi-structured interviews and questionnaires that were administered to teachers and principals of professional colleges. The findings show that interpersonal and communication skills are important antecedents to principals' overall effective technology leadership. The technology standards and technology competencies of the principal as a technology leader have a significant influence on the quality and effectiveness of the technology programme in an educational institution. This study reveals that technology integration as an instructional strategy needs to be learned in the wider context of changing pedagogy and paradigms of thought about technology use in education. Keywords: Technology Leadership, Technology Integration, Technology Vision Introduction : Changes in college environments are inevitable to keep abreast with the demands of the 21st century. Principals play a vital role in colleges in leading college reform, implementing innovations and making improvements. It is their responsibility to adopt appropriate changes that ensure an effective integrated education system. For fundamental changes to take place, it is essential that principals have a clear purpose linked to a sustainable vision for the college. Since the principal's leadership and management influence the teaching and learning in the college, they should have a pertinent understanding of what actions and strategies to take, and which leadership and management style to apply to have a positive influence on teachers' information and communication technology integration into their teaching and students' learning practices. An effective principal can enable the teachers to perform at their best and create an environment where teachers are willing to bring about appropriate change in order to ensure that effective teaching and learning takes place. The technology standards and technology competencies of the principal as a technology leader have a significant influence on the quality and effectiveness of the technology programme in an educational institution. For college principals to provide effective leadership in their colleges, they must possess knowledge and understanding of the issues and capabilities of technology. They must also be able to use technology appropriately in the fulfillment of their roles of coordinator and communicator of college programmes and activities. Students benefit from technology if the college environment is technology-rich and if the staff and principal have a shared vision of how and why technology is integrated into educational environment. As a cornerstone to promote the innovative use of information and communication technology in their colleges the principals should encourage teachers to use information and communication technology in their instructional practices. Principals as the leaders in their colleges should not underestimate the impact of integrating information and communication technology into teaching and learning. They should implement effective strategies to ensure that their colleges are equipped with appropriate information and communication technology infrastructure for teaching and learning. Principals themselves should use information and communication technology and attend training opportunities and be competent about every aspect of information and communication technology integration. Principals should display sincerity and confidence, and demonstrate excellent communication skills to motivate the teachers and
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Technology Leadership _______________________________________________________ students. Principals' actions determine the attitude of teachers towards information and communication technology integration, as well as teachers' commitment. A way that a principal can provide and sustain supportive contexts for teachers is through teacher professional development as it influences teachers' confidence levels, their inclination toward trying out new innovative ideas, as well as their attitude towards the teaching profession and creative classroom practices. Teacher professional development creates a supportive environment and principals should encourage and create teacher professional development opportunities where teachers can continuously share their expertise, success, frustrations and knowledge with one another. Although teachers should assume responsibility for their own development, principals should assist teachers by providing the necessary time, resources, support and encouragement to enable them to work towards their professional development and achieving the colleges' goals. Principals have significant responsibilities of initiating, organizing, planning and implementing teachers' professional development in their colleges, especially through creating in-house training opportunities. It is important that principals should support and encourage teacher professional development activities that will enable teachers to engage in innovative practices by making use of information and communication technology in their teaching and learning. It therefore remains a challenge for principals to provide teacher professional development opportunities for individual teachers, and to positively influence teachers' thinking and beliefs about the importance of information and communication technology integration into their teaching and learning practices. TECHNOLOGY LEADERSHIP STANDARDS / DIMENSIONS : Principal's technological leadership practices are more important than a principal's individual competency level with technology. For effective technology leadership and for a comprehensive and appropriate use of technology in colleges the following standards are essential for college principles: 1. Leadership and Vision : Principals inspire a shared vision for comprehensive integration of technology and foster an environment and culture conducive to the realization of that vision. The following performance indicators for the standard (Leadership and Vision) promote the establishment of a vision for technology and the leadership practices that encourage staff members and students to use that technology: a) Principals facilitate the shared development by all stakeholders of a vision for technology use and widely communicate that vision, b) Principals maintain an inclusive and cohesive process to develop, implement, and monitor a dynamic, long range, and systemic technology plan to achieve the vision, c) Principals foster and nurture a culture of responsible risk taking and advocate policies promoting continuous innovation with technology, d) Principals use data in making leadership decisions, e) Principals advocate for research-based effective practices in the use of technology (BrooksYoung, 2002). 2. Learning and Teaching : Principals ensure that curricular design, instructional strategies, and learning environments integrate appropriate technologies to maximize learning and teaching. The five performance indicators under this standard help principal better understand how to examine and evaluate current instructional technology use and then provide support to teachers as they strive to improve their instructional practice. The performance indicators for this standard are: a) Identify, use, evaluate, and promote appropriate technologies to enhance and support instruction and standards-based curriculum leading to high levels of student achievement, b) Facilitate and support collaborative technologyenriched learning environments conducive to innovation for improved learning, c) Provide for learner-centered environments that
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Technology Leadership _______________________________________________________ use technology to meet the individual and diverse needs of learners, d) Facilitate the use of technologies to support and enhance instructional methods that develop higher-order thinking, decision-making, and problem solving skills, e) Provide for and ensure that faculty and staff take advantage of quality professional learning opportunities for improved learning and teaching with technology. The first four performance indicators relate to the integration of technology into the curriculum. The last indicator emphasizes the importance of professional development for teachers. Teachers will have to be provided time to change, training to make the change, and support to encourage change. Two technology leadership tasks for principals concerning the Learning and Teaching standard are: i) Assist teachers in using technology to access, analyze, and interpret student performance data, and in using the results to appropriately design, access, and modify student instruction, and ii) Collaboratively design, implement, support, and participate in professional development for all instructional staff that institutionalizes effective integration of technology for improved student learning. Performance indicators for this standard refer to the support role of the principal as he or she provides encouragement and understanding as teachers begin to incorporate technology into their instructional practices and as they learn to use technology as a part of their classrooms. 3. Productivity and Professional Practice : Principals apply technology to enhance their professional practice and to increase their own productivity and that of others. One of the best ways to support change is to model it personally. This standard identifies the importance of the principal modeling the use of technology in personal and professional roles. The five performance indicators are: a) Model the routine, intentional, and effective use
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of technology, b) Employ technology for communication and collaboration among colleagues, staff, parents, students, and the larger community, c) Create and participate in learning communities that stimulate, nurture and support faculty and staff in using technology for improved productivity, d) Engage in sustained, job related professional learning using technology resources, e) Maintain awareness of emerging technologies and their potential uses in education, f) Use technology to advance organizational improvement. The performance indicators of this standard relate directly to the principals ability and inclination to use technology. Principals need to use technology effectively to make positive changes in productivity for themselves and those they lead. Two technology leadership tasks for principals in this standard are: Use current technology-based management systems to access and maintain personnel and student records, ii) Use a variety of media and formats, including telecommunications and the college website, to communicate, interact, and collaborate with peers, experts, and other education stakeholders. 4. Support, Management, and Operations : Principals ensure the integration of technology to support productive systems for learning and administration. The performance indicators for this standard examine areas vital to the ongoing success of technology for the college the acquisition, maintenance, and replacement of technological infrastructure. The five performance indicators are: a) Develop, implement, and monitor policies and guidelines to ensure the compatibility of technologies, b) Implement and use integrated technology-based management and operations systems, c) Allocate financial and human resources to ensure complete and sustained implementation of the technology plan, d) Integrate strategic plans, technology plans, and other improvement plans and policies to align
i)
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Technology Leadership _______________________________________________________ efforts and leverage resources, e) Implement procedures to drive continuous improvements of technology systems and to support technology replacement cycles. 5. Assessment and Evaluation : Principals use technology to plan and implement comprehensive evaluation systems of effective assessment and evaluation. The four performance indicators for principals are: a) Use multiple methods to assess and evaluate appropriate uses of technology resources for learning, communication, and productivity, b) Use technology to collect and analyze data, interpret results, and communicate findings to improve instructional practice and student learning, c) Assess staff knowledge, skills, and performance in using technology and use results to facilitate quality professional development and to inform personnel decisions, d) Use technology to assess, evaluate, and manage administrative and operational systems. The principal's specific technology leadership tasks are: i) Promote and model the use of technology to access, analyze, and interpret campus data to focus efforts for improving student learning and productivity, ii) Implement evaluation procedures for teachers that assess individual growth toward established technology standards and guide professional development planning, iii) Include effectiveness of technology use in the learning and teaching process as one criterion in assessing performance of instructional staff. As campus leaders of technology principals need to set into place evaluation procedures that ultimately improve student performance. The progress of the students must be monitored and used to make improvements. Principals are charged with leading this effort to analyze student performance data and make it useful. Principals should also include a technology component in their evaluation of teachers. Because teachers will be at various stages of technology competency individual technology improvement plans need to be developed. These individual plans then would drive the teachers' choice of technology professional development. 6. Social, Legal, and Ethical Issues : Principals must understand the social, legal, and ethical issues related to technology and model responsible decision making related to these issues. Principals should pay careful attention to the performance indicators for this standard. Because of the long-range risks associated with not paying attention to these areas, this is the most important standard for Principals to understand and address as individuals. The following five performance indicators for this standard are sated with potential hazards: a) Promote and enforce privacy, security, and online safety related to the use of technology. b) Identify, communicate, model, and enforce social, legal, and ethical practices to promote responsible use of technology. c) Ensure equity of access to technology resources that enable and empower all learners and educators. d) Promote and enforce environmentally safe and healthy practices in the use of technology. e) Participate in the development of policies that clearly enforce copyright law and assign ownership of intellectual property. These indicators cover equality of access; social, legal, and ethical issues; safety and security of online use; and potentially harmful environmental issues. The specific tasks facing principals are: Secure and allocate technology resources to enable teachers to better meet the needs of all learners on campus, Adhere to and enforce among staff and students the acceptable use policy and procedures related to security, copyright, and technology use, Participate in the development of facility plans that support and focus on health and environmentally safe practices related to the use of technology.
Principals must ensure that technology is up to date
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Technology Leadership _______________________________________________________ and available to all students, regardless of race, sex, or academic standing. 7. Interpersonal and Communication Skills : Principals must be able to get along with teachers and staff members as they begin to integrate new learning technologies. A principal can be an effective leader without technological expertise; however, without interpersonal and communication skills, principals cannot be effective technology leaders. Technology leadership requires refined interpersonal and communication abilities, as well as technological competency. The three performance indicators are: a) Interact and communicate well with teachers, staff members and students as they begin to integrate new learning technologies. b) Demonstrates an understanding of technology needs and concerns of faculty, staff and Students c) Maintains positive relationships with faculty, staff and students in regard to technology d) Encourages college personnel to utilize information sources about technology for professional development e) Model the use of technology to increase the efficiency of their colleges and improve communication and collaboration within the educational community. f) Communicates effectively with faculty, staff, and students about technology Objectives of the Study :
With relatively few studies specifically addressing
effective Information and Communication Technology practice in the teaching environment through teacher professional development. To investigate the principals' contributions to the successful and sustainable implementation of information and communication technology in education in their institutions. To examine the practical problems faced by principals while executing technology leadership in their colleges.
Review of the Literature : This review provides a summary of the literature that is relevant to the educational leadership needed to facilitate the integration of technology into the teaching and learning process. Few studies have been done to explore the methods and strategies that college principals use to lead technology integration in their colleges where technology is viewed as an instructional strategy and part of larger college reform efforts. Wilmore and Betz in their research study pointed out that information technology will only be successfully implemented in an educational institution if the principal actively supports it, learns as well, provides adequate professional development and supports his/her staff in the process of change (Wimore & Betz, 2000, p. 15). Diane Yee, in her research on principals, leadership and technology integration found that the educational institutions that integrated information and communication technology in the most constructive way were those where the principals shared an unwavering vision that information and communication technology had the potential to improve student learning (Yee, 2000, p. 291). Similar to Yee's research, Schiller's findings highlight the key role that the principal must play not only in supporting technology, but also facilitating change and intervention strategies in the teaching and learning process (Schiller, 2003). Hughes and Zachariah investigated the relationship between effective administrative leadership styles and the use of technology and they found that it is the teacher's pedagogy that needs to change and that the leaders needed to align the changes into productive future directions. (Hughes & Zachariah, 2001). Kearsley and Lynch noted in their study that the technology is a powerful tool that supports educational institutional reform and facilitates student learning. The potential benefits of good leadership can include improved academic achievement by students, improved student
evaluation of principals' technology leadership, this area necessitates future exploration so that current and future leaders can be prepared to deal more effectively with technology and to successfully implement technology policy. The main objective of this study is to empirically investigate principals' technology leadership practices in their respective colleges. The supplementary objectives of the study are : To analyze the methods and strategies do principals use to integrate technology into the educational environment. To probe how principals develop and spread
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Technology Leadership _______________________________________________________ attendance and reduced attrition, better vocational preparation of students, more efficient administrative operations, and reduced teacher/staff burnout and turnover. (Kearsley & Lynch, 1994). Theoretical Framework : Drawing from the empirical literature on principals' leadership in general and specifically their effectiveness as technology leaders, seven primary dimensions of principals' technology leadership will be examined and serve as the conceptual framework for this study: i) vision and leadership; ii) learning and teaching; iii) productivity and professional practice; iv) support, management, and operations ; v) assessment and evaluation; vi) responsible decision making related to social, legal, and ethical issues and vii) interpersonal and communication skills. The aforementioned seven dimensions are chosen because they are the principals' core tasks in dealing with teaching and learning as well as administrative operations with technology in their colleges. Methodology : A mixed-method approach of both quantitative and qualitative methodology is used for this study. The quantitative methodology consists of the surveys sent to principals and teachers. The qualitative methodology includes the researcher's use of indepth interviewing as a second source of data collection and analysis. This explorative study investigates the methods and strategies that principals use for technology integration as they relate technology use as a tool of instructional strategy. It also investigates what changes occur as a result of technology integration and how these changes may be connected to college reform efforts. Sampling Methods : The population for this study was all the teachers and principals of the Professional Colleges in Karnataka, Tamilnadu and Kerala State. Participants were selected after the pilot study, and a questionnaire was sent to each teacher along with a cover letter explaining the purpose of the study and providing needed information to properly complete the questionnaire. Teachers were asked to evaluate their principal's role in leading and facilitating technology use in their colleges. To encourage the return rate, follow up thank you postcards and personal contacts were made until a satisfactory percentage of participants completed the questionnaire. All surveys were collected anonymously unless the survey responded voluntarily offered his/her contact information. All presentation of data from survey responses and interviews use numbers or pseudonyms so as to not reveal the identity of any participant. Although the nature of the research questions could impact on a principal's job performance, the researcher will maintain participant anonymity and confidentiality at all times. The participants are informed of the research objectives, data collection methods and data collection devices. 500 questionnaires were sent randomly to selected teachers of the professional colleges in the States of Karnataka, Tamilnadu and Kerala. Of the 500 survey forms mailed, 292 were returned. The response rate was 58.4 percent, normal for such research. Of these 292, only four survey forms were deemed unusable because the respondents answered incompletely. Two hundred and eighty eight or 57.6 percent of these survey forms were analyzed for this study. Data from some of the respondents were missing for some of the study questions, which accounts for discrepancies in total number of responses from one item to the next. Design of the Instrument : To explore technology leadership, the researcher used the Professional College Principals' Technology Leadership Questionnaire. The survey instrument is a two-part questionnaire designed to collect data on factors associated with the role of principals as leaders of technology on their respective campuses. Part one of the instrument is designed to measure the technology leadership, technology standards and accompanying performance indicators of college principals. Part one asks seventy five questions using the Likert scale (5-point scales). Part two of the survey instrument is designed to collect demographic data of the respondents, including gender, educational level, age and number of years of teaching experience etc. Based on the preliminary analysis, the seven leadership dimensions showed consistency across the individual groups of assessment responses. The alpha coefficients (shown in parentheses) were calculated for each scale: i) vision and leadership (0.934); ii) learning and
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Technology Leadership _______________________________________________________ teaching (0.916); iii) productivity and professional practice (0.952); iv) support, management, and operations (0.941); v) assessment and evaluation (0.955); vi) responsible decision making related to social, legal, and ethical issues (0.937) and vii) interpersonal and communication skills (0.928). Data Analysis : For data analysis, the Statistical Package for the Social Sciences (SPSS version 11.5) software was chosen. Both descriptive and inferential statistics were calculated on all quantitative data. Descriptive statistics were used to manage the data in the form of frequencies, proportions, percentages, means, and standard deviations. Findings : Of those teachers who responded to the demographic information on the instrument, respondent gender consisted of 193 (67.01%) males and 95 (32.99%) females; respondent age ranged from 28 to 60 years. Years of teaching experience varied, with 156 (54.17%) with less than 10 years, 94 (32.64%) with 10-20 years, and 38 (13.19%) with more than 20 years. One hundred and ninety four respondents (67.36%) held basic degree (minimum requirements) to teach in the professional colleges and ninety four respondents (32.64%) held a research degree or higher qualification. Part one of the survey document contained seventy five questions and each of the Standards was measured using the responses to only those questions identified to measure that particular standard. The range of possible mean scores on the Likert scale responses on this instrument is 1.00 to 5.00. The following table presents the results of the survey instrument:
Table: 1
Standards/ Dimensions Leadership and Vision Learning and Teaching Productivity and Professional Practice Support, Management, and Operations Assessment and Evaluation Social, Legal, and Ethical Issues Interpersonal and Communication Skills Valid N (list wise): 288 Mean Standard Deviation Variance 3.0833 1.64221 2.697 2.9514 1.72431 2.973 2.9618 1.80454 3.256 2.8125 1.73293 3.003 2.9653 1.63972 2.689 2.0590 1.32254 1.749 3.1250 1.65437 2.737
The lowest mean score (2.0590) was for the standard: Social, Legal, and Ethical Issues. The largest amount for variance occurred in the mean scores for the standard: Productivity and Professional Practice. Arithmetic mean scores were also tabulated for each performance indicator. The following Table displays a short description of the performance indicator, the questions measuring that indicator and the combined mean scores for all study participants.
Table: 2 Mean Scores by Performance Indicator
1. Leadership and Vision Questions Combined Mean Performance Indicator Shared Vision 21, 35, 57 3.127 Technology Plan Process 6, 14 3.043 Innovation 19, 25 2.836 Use of Data to Make Decisions 7, 13, 58 3.129 Research-based Technology Practices 17, 50 3.281
2. Learning and Teaching Questions Combined Mean Performance Indicator Use Technology for Instruction 22,70 3.311 Support Innovative Uses of Technology 60, 3 2.746 Provide Learner Centered Tech Environment 5,49 2.968 Support Tech for Higher-Order Thinking 31, 48, 59 1.994 Provide for Professional Development 71, 55 3.738
3. Productivity and Professional Practice Questions Combined Mean Performance Indicator Model Technology Use 26, 51 3.397 Use Technology for Communication 12, 46 3.112 Create/Participate in Tech Learning Communities 31, 61 3.426 Engage in Professional Development 4, 72 2.192 Aware of New Technologies 16, 47 2.241 Use Tech for Organizational Improvement 45, 62 3.403
a) b) c) d) e)
a) b) c) d) e)
a) b) c) d) e) f)
a) b) c) d) e)
4. Support, Management, and Operations Questions Combined Mean Performance Indicator Guidelines for Tech Compatibility 27, 44 2.946 Use of Technology Management Programs 15,52 3.527 Allocate Resources for Technology 36, 63 3.224 Integration of Tech Plan with Other Plans 18, 73 1.694 Implementation of Continuous Improvement 24, 43 2.672
a) b) c) d)
5. Assessment and Evaluation Questions Combined Mean Performance Indicator Assessment of Tech Resources 32, 64 2.469 Use of Tech to Analyze Data 11, 74 3.632 Assessment of Staff Competency 2, 69 3.174 Assessment of Administrative Systems 34, 53 2.586
6. Social, Legal, and Ethical Issues Questions Combined Mean Performance Indicator Equity of Access 20, 68 2.163 Social, Legal, and Ethical Practices 37, 41 1.713 Privacy, Security, and Safety Practices 28, 54 2.834 Environmentally Safe and Healthy Practices 40, 56 2.108 Policies that Enforce Copyright 9, 65 1.477
7. Interpersonal and Communication Skills Questions Performance Indicator
a) b) c) d) e)
Participant's highest mean score (3.1250) was for the standard: Interpersonal and Communication Skills.
a) b) c) d) e) f)
Interact and Communicate Demonstrates an understanding of needs and concerns Maintains Positive Relationships Encourages Professional Development Improve Communication and Collaboration Communicates Effectively
23, 38 8, 67 29, 42 1, 75 33, 39 10, 66
Combined Mean 3.361 2.849 3.085 3.117 3.004 3.334
Fourteen of the performance indicator mean scores were higher than 3.00.
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Technology Leadership _______________________________________________________ Performance indicator (2 e), which asked participants whether their principals provide for and ensure the faculty to take advantage of quality professional learning opportunities for improved learning and teaching with technology, received the highest combined mean score (3.738). The lowest score (1.477), and the only combined mean score less than 1.5, was performance indicator (6 e) dealing with Policies that Enforce Copyright. The method of in-depth interview was used to corroborate the survey data and provide more comprehensive, in-depth and detailed data collection from the principal's perspective in regards to the major research questions. Ten respondents were chosen for in-depth interviews. Each participant was asked thirty six questions following a specific interview protocol. The principals presented multiple perspectives when discussing technology use and integration strategies. No matter what the perspective, principals all share three common themes, (1) modeling technology use, (2) promoting technology use through baby steps and (3) creating technology trainers. Within these themes additional details and strategies are presented. When specifically asked about methods and strategies for technology integration, principals were able to more explicitly state what they were doing. Seven topics emerged: (1) providing more teachers training, (2) using technology to model expected teacher use, (3) obtaining additional software and hardware, (4) monitoring technology use, (5) creating more time for discussion about technology use, (6) planning with teachers to integrate technology, and finally, (7) using methods to shift paradigms. Three themes emerge to answer the question: What changes result from technology integration? .They all stem from an increase in the use of technology as an instructional tool. This increase requires (1) changes in the education environment, (2) more support at all levels and (3) a commitment to the future. Changes in the education environment include communication processes, information access and most importantly, teaching and learning strategies. Support includes modeling by principals, staff development by technology leaders, support by leaders for changing paradigms and pedagogy and stakeholder involvement. A commitment to the future includes understanding the students that we are teaching today and reaching to understand the future that we are preparing our students to lead. Five themes emerge about technology methods and strategies for future technology goals. They are (1) modeling technology use, (2) providing more time for staff development, (3) reaching out to stakeholders, (4) providing more access to technology for teachers and (5) developing understanding in teachers about changing their paradigm. Discussion : Principals' technology leadership has been measured as one construct comprising seven technology leadership dimensions. The first technology leadership standard/dimension deals with Leadership and Vision. This study attempted to place a quantitative score on the abstract concept of leadership and vision. To do so, the Technology Leadership Questionnaire asked questions about shared vision, innovation, using technology to make decisions, planning for research based technology practices. The combined mean score for the first technology leadership standard/dimension is 3.0833. It is the second highest of all the standard mean scores. This indicates that of the seven technology leadership standards, principals do well in the area of Leadership and Vision. In fact, the combined mean score for performance indicator 1c (Innovation) is the lowest of all the performance indicator scores (2.836). The performance indicator scores for questions asking about technology planning are much higher, indicating that principals incorporated technology into their own campus improvement plans and developed technology plans. The performance indicator scores also indicate that principals very much support their teachers in Research-based Technology Practices. These scores point out a continued strength on the part of principals to provide the necessary vision and leadership for technology. Previous research shows that articulating, sharing, and demonstrating technology visions are effective leadership behaviors (Aten, 1996; Cory, 1990; Ford, 2000; Inkster, 1998; Jewell, 1998; Ray, 1992). The questions related to the second technology leadership standard, Learning and Teaching, were designed to measure principals' support for teachers' use of technology, principals' willingness to provide technology based professional development for teachers, and the principals' evaluation of teachers technology use. The combined mean scores for
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Technology Leadership _______________________________________________________ second technology leadership standard is 2.9514. The results in this standard indicate that the teachers felt their principals moderately supported the use of technology for teaching and learning. Indeed, 64% of the participants indicated that their principals provided technology staff development for the teachers, allocated additional budget money for technology, and reviewed classroom observations to evaluate the implementation of technology by teachers. This study indicates principals fairly support technology in the teaching learning process. Technology leadership dimension/standard three concerns Productivity and Professional Practice. This standard addresses how Professional College Principals use technology to make positive changes in productivity for themselves and others. For principals to be leaders in the use of technology, they first have to be knowledgeable about technology and model its use. The mean score for Standard three is 2.9618. The performance indicator combined mean score for indicator 3a (Modeling technology use) is 3.397. These scores indicate that the principals are technologically competent and to some extent frequent users of technology. This study confirmed that principals are becoming much more technologically literate and using technology more often. Communication technologies seem to be especially important to participants of this study. The fourth standard is Support, Management, and Operations. This standard is concerned with compatibility issues, technology based management systems, support issues, and continuous system improvement plans. Principals combined mean score for this standard is 2.8125. The survey data also indicate 54% of the principals regularly use student management software program. This data shows that a good number of principals are very proficient in this area. Technology leadership standard five refers to Assessment and Evaluation which specifically targets evaluation of technology use in learning, communication, and productivity. The combined mean score for this standard is 2.9653. The combined mean score in the performance indicators 5b (Use of technology to analyze data) and 5d (Assessment of Administrative Systems) are 3.632 and 2.586 respectively. The other two performance indicators in this standard dealt with assessment of the technology infrastructure (5a) and assessment of staff technology needs (5c). Assessment of the technology infrastructure has a combined mean score of 2.469 while the combined mean score for assessment of staff technology needs is 3.174. These scores indicate that the principals in the study used existing technologies such as student management programs, computerized grade programs, and attendance programs to evaluate and report results. The sixth technology leadership standard deals with equal access; social, legal, and ethical practices; safe and secure online use and; potential health and environmental issues. Equal access pertains to the ability of all students being able to access the technology of a college regardless of their economic status, race, sex, educational program, or any other limiting factor. The combined mean score in the performance indicators 6a (Equity of Access) and 6c (Privacy, Security, and Safety Practices) are 2.163 and 2.834 respectively. In fact, the combined mean score for performance indicator 6e (Policies that Enforce Copyright) was the lowest of the entire performance indicator scores (1.477). The seventh standard contains indicators dealing with Interpersonal and Communication Skills. The combined mean score for technology leadership standard seven is 3.1250 which is highest of all standards. Principals' interpersonal and communication skills showed a significant and positive impact on principals' effective technology leadership. This finding supports previous research (Chang, 2003) showing that to become effective technology leaders, principals must build positive working relationships, communicate change and new ideas well, and identify and support teacher needs and concerns. Conclusions : This study indicates that professional college principals are doing a satisfactory job at integrating technology in education in their institutions and technology integration can be facilitated by principals with limited access to technology resources. The results of the survey questions pertaining to principal involvement demonstrate that principals are good at providing their teachers with access to technology for them to use with their courses. Allocating technology resources is more of
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Technology Leadership _______________________________________________________ a managerial role than a leadership role for principals to hold. It indicates that the manager role of principals is still an important one for principals to fill when it comes to technology integration. It also shows that principals understand how to implement new instructional initiatives by providing the support to do so and that technology is understood to be an instructional strategy by principals. This study reveals that the principals' leadership of technology integration as an instructional strategy needs to be supported differently than other instructional strategy implementations. This is largely due to the fact that technology integration requires changing pedagogy and the structure of learning environments. Technology integration as an instructional practice requires a commitment and constant renewal of the resources involved, most often computer technology, at a much faster rate than is traditionally necessary for books or other instructional materials. Staff development for this implementation also has to combine a focus on skill development as well as pedagogy, with the larger focus on pedagogy. Staff development initiatives and follow-up support for a technology integration plan must also include constant monitoring and evaluation by leadership. This study discloses that technology integration as an instructional strategy needs to be learned in the wider context of changing pedagogy and models of thought about technology use in education. Overwhelmingly principals noted that teachers needed to change their teaching style to integrate technology. Furthermore, this integration is not just about using technology but about creating student-centered constructivist learning environments where technology is used as a tool for inclusive development of the students. The most important common themes shared by this study are : Principals who demonstrate technological proficiencies integrate technology with greater technological specificity. Principals who have advanced technology skills have an advantage in furthering the technological professional development of staff. Working personally with and training staff in technology, may decrease the principals' need for formal classroom technology observations. Principals should balance their roles of manager and leader to lead and implement a vision for technology integration. Principals should practice reflective leadership, examining technology use and integration from multiple perceptual orientations and lenses. Principals should expect from their teachers and students positive accountability of its use and effectiveness in the teaching and learning process.
References : Anderson, R. E., & Dexter, S. (2005). School Technology Leadership: An Empirical Investigation of Prevalence and Effect. Educational Administration Quarterly, 41(1), Aten, B. M. (1996). An Analysis of the Nature of Educational Technology Leadership, Unpublished doctoral dissertation, University of San Francisco. Brooks-Young, S. (2002). Making Technology Standards Work for You: A Guide for School Administrators. Eugene, OR: International Society for Technology in Education. Chang, I. (2003). The New Leadership Trend: Technology Leadership. Journal of Education Research, 114, pp. 83-95. Cory, S. (1990). Can your District become an Instructional Technology Leader? The School Administrator, Special Issue, pp. 17-19. Flanagan, L.& Jacobsen, M. (2003). Technology Leadership for the Twenty-first Century Principal. Journal of Educational Administration, 41( 2), pp. 124-142. Ford, J. I. (2000). Identifying Technology Leadership Competencies for Nebraska's K-12 Technology Leaders, Unpublished doctoral dissertation, University of Nebraska, USA. Hughes, M., & Zachariah, S. (2001). An Investigation into the Relationship between Effective Administrative Leadership Styles and the use of Technology, http://www.ucalgary/vol5/hughes.html. Inkster, C. D. (1998). Technology Leadership in Elementary School Principals: A Comparative Case
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Technology Leadership _______________________________________________________ Study, Unpublished doctoral dissertation, University of Minnesota, USA. Jewell, M. J. (1998). The Art and Craft of Technology Leadership. Learning and Leading with Technology, 26(4), pp. 46-47. Kearsley, G., & Lynch, W. (1994). Educational Technology: Leadership Perspectives, Educational Technology, pp. 5-17. Pelgrum, W.J. (2001). Obstacles to the Integration of ICT in Education: Results from a Worldwide Educational Assessment. Computers & Education 37, pp. 163178. Ray, D. (1992). Educational Technology Leadership for the Age of Restructuring. The Computing Teacher, 19(6), pp. 8-14. Redish, T., & Chan, T. C. (2007). Technology Leadership: Aspiring Administrators' Perceptions of Their Leadership Preparation Program. Electronic Journal for the Integration of Technology in Education, 6, pp. 123-139. Schiller, J. (2003). Working with ICT Perceptions of Australian Principals. Journal of Educational Administration, 41(2), pp. 171-185. Webber, C.F. (2003). New Technologies and Educative Leadership. Journal of Educational Administration, 41(2), pp. 119-123. Wilmore, D. & Betz (2000). Information Technology and Schools: The Principal's Role. Educational Technology and Society 3(4). http://ifets.icce.org/periodical/vol4, 2000.html. Yee, Diane (2000). Technology Leadership. Journal of Education Research, 112, pp. 151-152. Zain, M.Z.M. & Atan, R.M. (2004). The Impact of Information and Communication Technology (ICT) on the Management Practices of Malaysian Smart Schools. International Journal of Educational Development, 24, pp. 201211.
Joseph Sebastian Thekedam an Associate Professor at St. Berchmans' College, Changanacherry P.O. Kerala. He can be contacted at jsthekkedam@yahoo.com
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Investors' Psychology Towards IPO Grading: An Empirical Study _______________________________________________________ Anindita Chakraborty & Ravindra Pathak Abstract: IPO grading initiatives by SEBI in the year January 2007 brings a new trend in the capital market. This move of SEBI is pioneering initiative to safeguard the interests of the retail investors who are comparatively new to the capital market. The present paper is an attempt to understand the SEBI's pioneering initiative of IPO grading. The paper also makes an attempt to assess the awareness levels of retail investors regarding IPO grading. The paper also throws light on the theoretical aspects of IPO grading and its use to the retail investors. The study came out with the factors like articulacy, regulatory and reliance. Keywords: IPO, IPO grading
Introduction : The Securities Exchange Board of India (SEBI) introduced the grading system for initial public offering (IPO) in January 2007 on optional basis and made it mandatory from May 1, 2007. This initiative has improved the business of credit rating agencies and made the fundamentally strong companies feel happy while put the fundamentally poor companies in a dilemma but failed to change the disposition of the investing community. It is a fact that some companies with poor grading have withdrawn from issuing IPOs and many of them are approaching another rating agency for their IPO grading. Everybody in the market strongly believes that the regulator may come out with many crucial issues like IPO pricing of unlisted companies and uniform face value for shares in the forthcoming board meeting. No other country in the world carries out IPO grading and therefore it is necessary to see the usefulness of the process. Initial Public Offering, also referred to simply as a "public offering," is the first sale of stock by a private company to the public. A company can raise money by issuing either debt or equity. If the company has never issued equity to the public, it's known as an IPO. IPOs can be a risky investment for investors. For the individual investor, it is tough to predict what the stock will do on its initial days of trading and in the near future since there is often little historical data with which to analyze the company. Also, mostly IPOs are done by the companies which are going through a transitory growth period, and they are therefore subject to uncertainty regarding their future value.
IPO (Initial Public Offering) grading is a service aimed at facilitating the assessment of equity issues offered to investors. The grade assigned to any individual issue represents a relative assessment of the 'fundamentals' of that issue in relation to the other listed equity securities in India. Grades are assigned on a scale of 1 to 5 with a higher (5/5) score indicating stronger fundamentals and a lower score (1/5) indicating poor fundamentals. This move of SEBI is yet another initiative to safeguard the interests of the retail investors who are comparatively new to the capital market. As IPO grading represents an independent opinion from an agency that is not connected with the placement of the issue and has an ongoing incentive to maintain its reputation for independence and analytical rigor. IPO grading is not a recommendation to invest in the graded instrument. It is not a comment on the price of the graded security or its suitability for a particular investor. It does not comment on issue price, likely price on listing or movement in price post listing. The researchers particularly insist the Indian retail investors to be new because they hesitantly divert their savings towards the volatile market as they are accustomed of getting heavy interest rates on their savings till a few years ago. With falling interest rates the educated population has now started to slowly divert some part of their savings in the fast growing capital market.
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Investors' Psychology Towards IPO Grading: An Empirical Study _______________________________________________________ SEBI's Guidelines for IPO Grading : The Securities and Exchange Board of India (SEBI) had first experimented IPOs grading on optional basis. But on the other hand, none of the promoters and lead managers voluntarily chose to be graded even at no cost to the companies concerned. This has led SEBI to make IPO grading compulsory for all. The important features of SEBI's decision on IPO grading are as follows: The grading exercise will exclude the issue price from its scope; It will be carried out by recognized credit rating agencies; The grading will be on a 5-point scale, the lowest grade to be indicated by 1 and the highest by 5. The issuing company will be allowed to choose the rating agency for grading its IPO The main criticism voiced against SEBI's decision has been that it excludes the issue price from the scope of grading. The critics have argued that the issue price is a crucial factor in determining the worthwhileness of an IPO from the investor's viewpoint to include it. However, it can also be argued that the rationality of the price itself depends on the IPO's fundamental quality. Determining the quality is a very complex work which is beyond the competence of most investors. That is why so many poor quality and even fake IPOs get subscribed. Grading of IPOs in terms of their fundamental quality will enable investors steer clear of unsound and fraudulent IPOs. Such IPOs are likely to be restrained by the grading system as they will be in the bottom grades of 1 and 2. The qualitative analysis of IPOs has to include factors such as business prospects of the company and the industry, company's competitive strength, management's competence and integrity, quality of corporate governance, reliability of the company's accounting and audit system, etc. Assessment of IPO Grading : From the discussion made earlier, it is clear that it is vital for an investor to take a look at the fundamentals of the company in which they wish to invest their hard earned money. This is probably the reason why SEBI has initiated IPO grading, with the help of which an investor is in a position to take a close look at the company's activities and the risk involved in investing in the company in the long run. However the following points regarding the same are worth nothing: 1. The grade assigned to an issue represents relative assessment of the fundamentals of that issue. It is a onetime assessment and has no ongoing validity. 2. IPO grading totally ignores the valuation aspect of the company's IPO. 3. The grading does not aim to indicate the likely returns from the IPO to the investor for his investment. 4. The IPO grading also does not take into account market factors such as liquidity, demand, supply situation of the scrip, the market sentiment at the time of issue and so on. This information is also important from the investor's point of view. From the above points researchers feel that there is lot of scope for improvement in IPO grading system. Although SEBI has made it mandatory to get IPO grading done, the parameters and grades are not standardized so it becomes necessary for SEBI to standardized parameters. The market factors such as liquidity, demand, supply, situation of the scrip, market sentiments at the time of issue, etc. are not taken into consideration and the very purpose of protecting the interest of the investors is defeated. This is mainly because pricing of the issue is the most crucial determinant of returns to the investors and it is not included in the grading process. A fundamentally strong issue priced aggressively may not leave much for the investors after listing. In fact, investors might lose money on such aggressively priced IPO. On the other hand, if investor puts money in the IPO of a fundamentally poor company, that is also priced very low, profits are likely accrue after listing. As said IPO grading may not affect the fundamentally strong companies to be subscribed but only with poor fundamentals. It is a fact that some companies with poor grading have withdrawn from issuing IPOs and many of them approaching another rating agency for their IPO grading.
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Investors' Psychology Towards IPO Grading: An Empirical Study _______________________________________________________ The approach to IPO grading is very alike to the research architecture that is available to bond markets in the form of credit ratings. A credit rating is a relative assessment of the fundamentals of the bond security. Likewise, IPO grading is relative assessment of the fundamentals of the equity security. IPO Grading is value adding to the investment process of institutional investors due to the independent and focused information on relative fundamentals that is contained in the IPO Grading rationale. Moreover, the expression of the independent opinion on relative fundamentals as a single unambiguous symbol creates the possibility of discovering meaningful relationships between fundamentals and pricing. It may be noted that institutional investors extensively use credit ratings in the market for privately placed bonds where credit ratings are not mandatory. Review of literature : Pandey & Kumar (2001) found that IPOs creates potential agency problems and associated costs by the outside investors. The potential conflict of interest problems between insiders and outsiders could be very high in countries with weak corporate governance mechanisms like India. Crouzet Faugeron et al (2003) researched at two competing hypotheses to explain IPO underpricing in France when a seasoned offering follows the IPO. They found evidence in favor of the signaling hypothesis in the case of fixed price IPOs. For the auction-like procedures, they showed that the initial investors' demand, rather than post-IPO performance, determined the type of security that was issued, but had no effect on the financing decision itself. The market feedback hypothesis was therefore only weakly supported. Carter et al (1990) examined that the returns earned by subscribing to initial public offerings of equity and found that more informed investors' capital required higher returns. Berglund (1994) presented a model that explains a number of empirical observations on initial public offerings. The model assumed that the firm which intends to go public is best informed about the future prospects of the firm. The analysis depicted that under reasonable conditions under-pricing will arise. Aggarwal (2000) found that aftermarket activities are less transparent and include stimulating demand through short covering and restricting supply by penalizing the flipping of shares. In her study she analyzed that more than half of IPOs, a short position of an average 10.75 percent of shares offered is covered in 22 transactions over 16.6 days in the aftermarket, resulting in a loss of 3.61 percent of underwriting fees. Chemmanur (1993) presented an information-theoretic model of initial public offering pricing in which insiders sell stock in both the initial public offering and the secondary market, have private information about their firm's prospects, and outsiders may engage in costly information production about the firm. The study depicted that the information reflected in the secondary market price of equity gives a higher expected stock price for high-value firms. Tinic, Seha M (1988) researched that IPOs of common stocks were typically underpriced and found that the results, based on samples of IPOs of common stocks that were brought to the market before and after the Securities Act of 1933, provide considerable support for the implicit insurance hypothesis. Aussenegg et al (2006) studied IPO pricing in Germany to determine whether when-issued trading provides information that was useful for setting IPO offer prices, and whether such trading supplants book-building as a source of information. They found that relevant informations for pricing IPOs were revealed, and that, once when-issued trading has begun; book-building is not a source of costly information for pricing. But book-building does not appear to be fully supplanted as a source of pricing information. Boehmer et al (2006) found that initial institutional flips help predict future returns and suggested that at least some institutions retain valuable private information about IPO firms. Their study depicted the importance of aftermarket relations between underwriters and investors. Fernando et al (2002) researched that when firms go public in an IPO, they must choose a number of shares to offer and a price level for those shares. They found that the relationship between IPO price level and under pricing was U-shaped, and demonstrated economically significant differences across firms choosing different IPO prices in the amounts of money left on the table due to under pricing. They also found that institutional ownership and underwriter reputation were greater at higher price levels, and that post-IPO turnover was lower for high-priced IPO's than for mid-priced IPO's. Jain and Sharma (2008) in their paper explored and explain the concept of IPO
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Investors' Psychology Towards IPO Grading: An Empirical Study _______________________________________________________ grading and its underlying rationale. They provided an objective evaluation of the costs and benefits associated with IPO grading. Objectives : Table 2 Reliability Statistics To develop and standardize a questionnaire for analyzing the investors psychology towards IPO grading. To analyze the underlying factors of investors psychology towards IPO grading. To open new vistas for further research. Cronbach's Alpha .782 Factor Analysis: Factor Analysis using principal component Varimax rotation was applied on the raw scores of 10 items to find out the factors that contribute towards investors' psychology towards IPO grading. These factors are briefly introduced below as per table 3: Articulacy : This factor has emerged as the first important determinant of research with a total variance of 3.474. Major element consisting this factor include legal formalities for IPO grading(0.722), IPO grading as a way of showing company performance (0.713), benefit to investor (0.713), transparency in IPO grading process (0.597). In this research it was found that articulacy plays a major role in IPO grading. Regulatory : This factor has emerged as the second most important determinant of research with a total variance of 1.327. Major items consist in this factor are awareness about IPO grading (0.792), Institutionalization (absorption by organization) of IPO grading (0.666), and compulsion/mandatory of IPO grading (0.655). During this research it was found that responsiveness plays a vital role. Reliance : This factor has emerged as the third most important factor of research with total variance of 1.031. Major items consisted in this factor were Trust on SEBI's guidelines regarding IPO grading (0.835); Recommendation for buy holds or sells decision (0.604), Trust on credit rating agencies (0.562). During the research it was found that reliance of retail investors on credit rating agencies and SEBI's No. of Items 10 The reliability value was found to be 0.782 (See table 2). The reliability of more than 0.7 was considered good. Thus the reliability of the questionnaire was found good.
Research Methodology : The study was exploratory in nature with survey method being used to collect the data. The total population includes the retail investors of Gwalior. The sample size was 100 retail investors and individual respondent was the sampling element. The non-probability sampling technique was used. A selfdesigned questionnaire was used for taking the responses of the retail investors' likert-type scale of 1to5. The tools used for data analysis were item to total correlation which was applied to check the consistency of various items used in the questionnaire. For testing the reliability, Cronbach alpha was applied to the items and validity of the questionnaire was checked using face validity method which was found to be high. Finally in order to find out the factors affecting investors' psychology towards IPO grading, factor analysis was applied using SPSS 13.0 software. Results & Discussion: Consistency of the Questionnaire: The consistency of all the items in the questionnaires was checked through item-to-total correlation. Correlation of every item with total was measured and the computed value was compared with cut off value or standard value of 0.19422 as per table-1. The computed value was found high and so none of the item was dropped. Reliability: For checking the reliability of the questionnaire, Cronbach Alpha was calculated by using SPSS 13.
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Investors' Psychology Towards IPO Grading: An Empirical Study _______________________________________________________ guidelines are incredible. Jain & Sharma (2008) said mandatory IPO grading by Credit Rating Agencies for assessment of 'fundamentals' of issuer companies had provided an additional investment guidance tool for the unsophisticated investors. Implications of the Study : This study is intended to be a useful contribution to the academicians to understand the investor's psychology towards IPO grading. It will also contribute to the retail investors, which are taken as the sample because it provide a knowledge about the different features of IPO grading This research is also helpful in taking decisions related to capital market. Suggestions : Parameters for grading and grades should be standardized. The valuation aspect of the IPO should also be taken into consideration while grading so that it can be of much use to the retail investors. A few of market factors such as liquidity in the market demand and supply of the script, market sentiment, etc. should also be taken care of while grading an IPO. Conclusion : The study revealed that there is awareness in the retail investors towards IPO grading; they have sufficient knowledge about IPO grading. Retail investors play a key role in any economy. These are the people who have high degree of risk and try to make the right decisions to make their investment profitable. The analysis reveals that factor like articulacy shows that IPO grading is beneficial for the investors and investor think that the IPO grading process is transparent too. They think that IPO grading process help them to know the performance of the company. The factor regulatory shows that investors are well aware of the IPO grading and they are satisfied with the compulsion of IPO grading. The factor reliance shows that the investors have trust on SEBI's guidelines regarding IPO grading and they also have faith on the credit rating agencies who give grade to the companies after a long research. At last on the the basis of research we can conclude that IPO grading is beneficial to the investors because it's a way of showing company performance it shows whether the fundamentals of the company is strong or poor on the basis of which investors can decide about their investment decision. Although it is a new concept but it is highly accepted by the public as per our results. References : Aggarwal, Reena (2000). Stabilization Activities by Underwriters after Initial Public Offerings. Journal of Finance, American Finance Association, 55(3), 1075-1103.
Aussenegg, Wolfgang, Pichler, Pegaret, Stomper, Alex, (2006). IPO pricing with Book-building and a When-Issued Market. Journal of Financial and Quantitative Analysis, 41(4), 829862 Berglund, T. (1994). The Pricing of Initial Public Offerings: A Simple Model. Retrieved on January 2, 2009 from http://ideas.repec.org/p/ dgr/ kubrem/1994673.html. Boehmer, Beatrice, Boehmer, Ekkehart, Raymond, Fisher, P.H. (2006). Do Institutions Receive Favorable Allocations in IPOs with Better Long-Run Returns? Journal of Financial and Quantitative Analysis, 41(4), 809-828. Carter, B Richard, Manaster, Steven, (1990). Initial Public Offerings and Underwriter Reputation. Journal of Finance, American Finance Association, 45(4), 1045-67. Chemmanur, J. Thomas, (1993). The Pricing of Initial Public Offerings: A Dynamic Model with Information Production. Journal of Finance, American Finance Association, 48(1), 285-304. Crouzet Faugeron, Marie Anne, Ginglinger, Edith, Vijayraghavan, Vasumathi, (2003) French IPO returns and subsequent security offerings: Signaling hypothesis versus market feedback hypothesis. Retrieved on January 2, 2009 from h t t p : / / h a l . a r c h i v e s ouvertes.fr/docs/00/16/50/26/PDF/FrenchIPO.p df.
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Investors' Psychology Towards IPO Grading: An Empirical Study _______________________________________________________ Fernando, S. Chitru, Krishnamurthy, Srinivasan, Spindt, A. Paul, (2002). Is the Offer Price in IPOs Informative? Underpricing, Ownership Structure, and Performance. Retrieved on J a n u a r y 2 , 2 0 0 9 f r o m http://fic.wharton.upenn.edu/fic / papers /01/0133.pdf. Jain, Tarun and Sharma, Raghav (2008). Mandatory IPO Grading: Reflections from the Indian Capital Markets. Icfai Journal of Corporate and Securities Law, 5(4), 8-22.
2. 3. 4. 5. Trust on SEBIs guidelines regarding IPO grading Compulsion /mandatory of IPO grading Trust on credit rating agencies Institutionalization (absorption by organization) of IPO grading. 0.427899 0.612411 0.52259 0.678039 Consistent Consistent Consistent Consistent Accepted Accepted Accepted Accepted
6. 7.
Transparency in IPO grading 0.653446 process Benefit to investor 0.676463
Consistent Consistent
Accepted Accepted
8.
Recommendation for buy holds 0.557844 or sells decision.
Consistent
Accepted
9.
IPO grading as a way of 0.578169 showingcompany performance. Legal formalities grading for IPO 0.656517
Consistent
Accepted
10.
Consistent
Accepted
Pandey, Ajay, Kumar, G. Arun, (2001). Relative Effectiveness of Signals in IPOs in Indian Capital Markets. Retrieved on January 2, 2009 from http://www.iimahd.ernet.in/ publications/data/2001-09-03AjayPandey.pdf. Tinic, M. Seha, (1988). Anatomy of Initial Public Offerings of Common Stock. Journal of Finance, American Finance Association, 43(4), 789-822. Annexures
TABLE 1: Showing Item to Total Correlation for Different Responses of Retail Investors.
S No. 1. ITEMS Awareness grading. about the CORRELATION IPO 0.443111 CONSISTENT/ INCONSISTENT Consistent ACCEPTED/ REJECTED Accepted
TABLE 3: Showing Total Variance Explained.

Factor Name Initial Values Total 3.474 Eigen Variables/Convergence % of Variance 34.737 (10) Legal formalities for IPO grading (9) IPO grading as a way of showing company performance (7) Benefit to investor (6) Transparency in IPO grading process 13.266 (1) Awareness about the IPO grading (5) Institutionalization (absorption by organization) of IPO grading. (3) Compulsion /mandatory of IPO grading Loadings
Articulacy
.722 .713 .713 .597 .792 .666
Regulatory
1.327
.655 Reliance 1.031 10.310 (2) Trust on SEBIs guidelines .835 regarding IPO grading (8Recommendation for buy holds .604 or sell decision. (4) Trust on credit rating agencies .562
Anindita Chakraborty is working as an Asst. Professor, Faculty of Management Studies, Banaras Hindu University (BHU), Varanasi. He can be reached at anindita_19dec@rediffmail.com. Ravindra Pathak is an Asst. Professor in pathakravi11@gmail.com Prestige Institute of Management, Gwalior. His e-mail is
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Sandhya Anvekar & Meghna Verma Abstract: Work-life balance has become the most challenging task before working women irrespective of their socio-economic status. The work and life can always be affected by improper emotional support from family front especially in case of married women employees who have children and dependent elders at homes. In the present empirical study, the objectives focused on exploring the factors crucial for emotional support required for work and life balance and thereafter suggesting a conceptual framework for achieving work balance by emotional support. Introduction : Perceived as a 'the fast growing city in Asia', Bangaluru is identical with hectic pace of work-life, traffic congestion, long distance between home and office, travel time, exploding population, competent work environment etc. The work and life can always be affected by improper emotional support from family front especially in case of married women employees who have children and dependent elders at homes. The emotional support derived from motivation, emotional security, compatibility with spouse for maintaining emotional balance, recreation and retreat are some of the crucial factors for achieving and maintaining work-life balance. Literature review : Work-life balance has become the most challenging task before working women irrespective of their socio-economic status. There are various studies focused on this issue exploring its significance and resolution. In India, it has much more significance because of socio-cultural reasons. Work life balance is a critical issue for men and women in the modern society, an in-depth understanding of the issue is not only desirable but also necessary .The poor Work Life Balance results in the range of physical and psychological strains in an individual with attendant consequences for organization in terms of low productivity, poor quality, low employee retention and weak employment engagements. Individual drivers are the major factors of Work-Life Balance for people-Anup K Singh and Richa Awasthy (2009). Harish C. Jain (2009), McMaster University Canada, While studying the Work Life Balance in China , Fang Lee Cooke and Xingyao Jing (2009), have found that despite the fact that the one-child policy has led to the reduction of child care work for married couples , child care and elderly care responsibilities continue to fall upon women disproportionately in spite of the fact that most of them work full time. As a result of this, women employees are more likely to be affected by Work Life Conflict than men. Since the majority of Chinese women work throughout their life, their Work Life Conflict tends to be the highest when they are between 30-35 years of age. Liu (2003) observed that the relation between age and Work Life Conflict takes a parabola shape, with Work Life Conflict reaching the top at the middle of one's career. Galinksy and Bond (1998) found that in the US, having a larger proportion of top executive positions filled by women is associated with greater provision of work-life balance policies. They also found that companies with a larger proportion of women in their rightly mentioned that most workers juggle their personal and work-life every single day between children and work, and between other family and community responsibilities. The term work life balance was coined in 1956 to response to the growing concerns by individuals and organizations alike that work can impinge upon the quality of family life and vice versa, thus giving the rise to the concepts of work-family conflict and family work conflict. Organizations like WIPS (Women In Public Sector) working with the British High Commission and the Standing Conference on Public Enterprises organize special training programs for the career advancement of women to balance work and family.
Case Study Emotional Support and Work Balance: A study of Married Women Employees
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Emotional Support and Work Balance: A study of Married Women Employees _______________________________________________________ workforce were more likely to invest in policies such as job sharing, part-time work, flexible time off policies and childcare. Companies were more likely to invest in costly options such as paid parental leave when women constituted a smaller proportion of the workforce. Given the proportion of sole female parents in New Zealand, in female-dominated industries or workplaces there may be increased benefits to employers of assisting with work-life balance. This is an issue that could be further explored in the consultation process. There are a number of theories about whether or not firms with more female employees develop more extensive work-life balance policies. Konrad and Mangel's (2000) research in the United States found that firms with a greater percentage of female employees were more likely to have more extensive work-life balance policies. Of the firms employing higher numbers of women, they found higher productivity levels in those firms that had a greater number of work-life balance policies. This finding counters adverse selection theory. Adverse selection theory claims that firms with more attractive policies will attract individuals who have greater need for those policies. As an example, adverse selection theory would predict that firms with more generous maternity leave policies would attract pregnant women, or women who were planning to become pregnant. If most of the employees in a firm used the more expensive work-life balance policies most of the time, then their provision would become uneconomical and reduce profitability. This study is important because it has findings that are opposite to the predictions of adverse selection theory. Emotional Support (ES) and Work-life Balance (WLB): This study was chosen to explore on the research questions like-Is Emotional support necessary for Work life balance? What factors provide emotional support to married women employees to achieve work-life balance? What linkage the emotional support has with work-life balance? The present paper analyzed a case of Married Women Employees in the city of Bengaluru, the Silicon Valley of India. Bengaluru, one of the fast growing cities in Asia in terms of urbanization and services boom, has witnessed spectacular changes in socio-economic status of women employees. The growing living costs, exploding residential base, traffic congestion, distance of workplace from home, competitive work environment etc. have necessitated Work Life Balance. The following issues apparently lead to interface of emotional support with the Work Life Balance among married women employees in urban areas especially in a developing country like India Prominent share of women employees in the service sector in India; Most of the women population falls under working segment in the urban areas; Growing urbanization, globalization and technological variables have impacted on the women status in the society; The socio-economic interventions have created stress levels in both work and home spheres where the women need to be a multi tasking; Need for employment and financial security has been pushed in the lifestyles due to increasing costs of living; Nuclear families have given scope for careers for women; Balance between work and home is a must for a harmony and peace in one's life. (Sandhya Anvekar 2011) Research Objectives: In the present empirical study, the objectives were mainly focused on exploring the factors crucial for emotional support required for work and life balance and thereafter suggesting a conceptual framework for achieving work balance by emotional support. In brief, the objectives were To understand the factors crucial for work balance at office by married women employees; To find out which factors lend emotional support for balancing work and life to married women employees; To conceptualize a framework for achieving work balance with emotional support as a major contributor. Methodology: Data collection: The study focused on a sample of 100 married women employees from the city of Bengaluru, with varied employment. They were investigated to collect the data. The respondents represented a diverse set of
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Emotional Support and Work Balance: A study of Married Women Employees _______________________________________________________ occupations from both private and public sectors. They were chosen conveniently by the authors. The sample was taken from city of Bengaluru since it has a unique lifestyle. Speed and competence are the hallmarks of this city and they have significant impact on the personal lives. The work-life balance here cannot be achieved and maintained if there is no emotional support from family and spouse in case of married women employees. By using the survey method, questionnaires were administered to collect the data from the sample taken. Data Analysis & Interpretations: The survey led to understand the profile of respondents chosen from the city of Bengaluru.
Table - 1 Demographic profile of respondents (MWE) in %
Age % Education 20 yrs 02 <SSLC 21-30 28 SSLC 31-40 42 Degree 41-50 14 P.G. > 50 14 >P.G.
The survey explored the factors crucial for work balance at office. The most significant factor was the motivating work environment which has positive and direct relation with work balance. The time factor, fair pay/increments/promotions are also significant and pursuit of higher qualification was found to be the least important. Table - 3 Factors crucial for work balance at office
18
12
26
24
20
Occupation Teaching Office Mgt. Professionals Domestic help House Keeping % 32 16 28 10 14
Issues No Gender bias No Harassment at work by others Punctuality & regularity in job Commitment for tasks given Job satisfaction Motivating work environment Pursuit of higher qualifications Fair pay/increments/promotions Performance appreciation Safety at work place Recreation & retreat
Rank 6 5 2 10 4 1 11 3 7 9 8
28% of them belonged to professionals and 42% were from 31-40 years group. 70% are degree holders. The type of family revealed that 74% of the respondents are from nuclear family and 26% come from joint families. The work-life profile indicated that 54% of them had family size between 2 to 4 members. 42% of them have children below 3 years which indicates the balance is required at home and is essentially related with emotional support. 42% travelled everyday for more than 5 kms to reach their respective workplace.
Table - 2
To balance life at home front required the emotional support that came from following factors. Emotional security and safety at home was the most significant factor. Motivation from spouse, compatibility and support in tasks were other factors that help balance at home for a woman employee. Recreation and retreat; appreciation on performance; emotional counseling; fair treatment etc. are common variables required for work-life balance.
Table - 4 Emotional support for balance at home
Work-life related profile in % of the respondents

Size of family 2 20 Children < 3 yrs 42 None 14 Work place distance <2 30 2-5 28 5-10 28 >10 14 2-4 54 3-6 yrs 04 4-6 16 6-12 yrs 20 >6 10 12-18 yrs 20
Requisites Recreation & retreat Support from dependent members of family Motivation by spouse Emotional Counseling Compatibility with spouse Appreciation for accomplishments Fair treatment Medical & personal care in emergency Emotional security/safety Emotional space and let out
Rank 4 5 2 6 3 8 9 7 1 10
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Emotional Support and Work Balance: A study of Married Women Employees _______________________________________________________ To balance work at office (work place) with emotional support, married women employees mainly rely on motivating work environment. Fair treatment and performance appreciation are other significant factors that lend emotional support to them.
Table - 5 Emotional support for balance in office
Requisites Safety at work place Performance appreciation Recreation & retreat Fair treatment Motivating work environment Health Management facilities Flexi timings of jobs Emotional counseling
Rank 7 3 4 2 1 6 5 8
Motivating work environment and emotional security at home are the most crucial factors that give emotional support to married women employees for achieving balance at work. Motivation, fair treatment, recreation and retreat are the common factors significant in both home and office for emotional support. Last but not the least, compatibility with spouse at home is the foundation for motivation and economic empowerment thereby leading to achieve balance in Work-life. Conclusion: The married women in India have many challenges to face in their work and life due to diversity of occupations, socio-economic strata and impact of globalization. Indian society is mainly balanced by women folklore for institution of marriage to be stable and secured. The employers, the employees and the public authorities are realizing the significance of Work Life Balance especially for married women employees that have a holistic impact on the social status of our country. Increasing mental stress levels without providing emotional support to them can lead to the social system breaking into fragments that can shatter the institutions of marriage and family in India. Lending a helping hand to married women employees is the social responsibility of all those who emotionally depend on them. A balanced outlook towards work as well as life leads to harmonious personal and social life. Suggested Readings : Galinsky, Ellen and Bond, James T. (1998) , The 1998 Business Work-Life Study: A Sourcebook Executive Summary. New Yo r k : F a m i l i e s a n d Wo r k I n s t i t u t e http://familiesandwork.org/summary/ worklife.pdf Konrad, Alison M and Mangel Robert (2000) ,The Impact of Work-Life Programs on Firm Productivity Strategic Management Journal 21:1225-1237 Liu,J (2003), Study on Work/Family balance in career management, unpublished Master Dissertation ,Sichuan University ,China
Work Balance with emotional support for Women Employees: The survey findings led to conceptualization of a support system framework. The emotional support being as main base for achieving balance at home and in office was drawn from various psychological dimensions.
Table - 6 Framework for achieving work balance with emotional support
Fair treatment
Recreation & retreat
Emotional security
WORK BALANCE WITH EMOTIONAL SUPPORT
Motivation
Compatibility Appreciation
Source: Developed by Authors
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Emotional Support and Work Balance: A study of Married Women Employees _______________________________________________________ Fnag Lee Cooke and Xingyao Jing(2009), WorkLife Balance in China: Sources of Conflict and Coping Strategies, NHRD Network Journal Volume 2, Issue- 3,18-28 Anup K Singh and Richa Awasthy (2009), WorkLife Balance: Causes ,Consequences and Interventions., NHRD Network Journal Volume 2, Issue- 3,59-67 Harish C Jain (2009), Issues and Prospects relating to Work- Life Balance, NHRD Network Journal Volume 2, Issue- 3,9-17 Sandhya Anvekar (2011), Challenges and Interventions of Work Life Balance (WLB): A Case Study of Married Women Employees (MWE) in Bengalure City, MAIMT-Journal of IT & Management, Vol.4, No.2, Nov.2010-April 2011, pp.117.
Sandhya Anvekar, a Doctorate in Management Studies, has research experience with I.I.M. (Ahmedabad) and T.I.S.S. (Mumbai). She has several publications to her credit and has presented research papers in many national and international conferences. Currently she heads the Research and Publications Centre at MSRIM, Bengaluru. She can be reached at sandhyaa@msrim.org or head.research@msrim.org Meghna Verma is an Assistant Professor in the area of Marketing and Operations Research at M.S.Ramaiah Institute of Management, Bengaluru. She can be contacted at meghna@msrim.org
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CEO Interview _______________________________________________________ To keep the body in good health is a duty, otherwise we shall not be able to keep our mind strong and clear . - Gautam Buddha CEO - Consumer Products Division, Himalaya Drug Company
In conversation with Amrita M A
Saket Gore In a healthy body dwells a healthy mind. Most of us are fortunate enough to have healthy bodies at the time of birth, in addition to that the continuous care and love of our elders make us more stronger and healthier. But once we become adults we start taking our body for granted, just the way we regularly maintain our vehicles and other appliances, our body also requires continuous maintenance and occasional repairing. Human beings along with science have developed medications to help us take good care of our body. India famous for its rich heritage and culture has also gifted the mankind with abundance of knowledge of herbs used for curing various ailments. This abundance of knowledge of herbs is called Ayurveda. Ayurveda is a system of self-care that originated in India more than 5000 years ago, Ayurveda is becoming very popular all over the world, with hundreds of healers incorporating it into their practices and thousands of people using its well-tried principles and therapies to improve their well-being. One of the leading pharmaceutical industries in herbal healthcare in India is Himalaya Drug Company. Himalaya Drug Company - A Brief Profile : Since its inception, the company has focused on developing safe, natural and innovative remedies that will help people lead richer, healthier lives. Today, Himalaya products have been endorsed by 300,000 doctors around the globe and consumers in 71countries rely on Himalaya for their health and personal care needs. As a confirmation that Himalaya is dedicated to providing the highest quality and consistency in herbal care, the Company was awarded an ISO 9001:2000 certification in 2003. Starting off operations in Dehradun way back in the 1930s, the company later spread its wings to Mumbai and across the country. In 1975, the company set up an advanced manufacturing facility in Makali, Bangalore, India, which today houses the Corporate headquarters. In 1991, the company relocated its R&D facility to Bangalore. Mission : Establish Himalaya as a science-based, problemsolving, head-to-heel brand, harnessed from nature's wealth and characterized by trust and healthy lives. Develop markets worldwide with an in-depth and long - term approach, maintaining at each step the highest ethical standards. Respect, collaborate with and utilize the talents of each member of the Himalaya family and the local communities where Himalaya products are developed and/or consumed, to drive our seed-toshelf policy and to rigorously adopt eco-friendly practices to support the environment we inhabit. Ensure that each Himalaya employee strongly backs the Himalaya promise to exceed the expectations of the consumer, each time and every time. Nothing less is acceptable.
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The Himalaya Drug Company was founded in 1930 by Mr. M. Manal with a clear vision to bring Ayurveda to society in a contemporary form and to unravel the mystery behind the 5,000 year old system of medicine. Years ago, on a visit to Burma, Mr. Manal saw restless elephants being fed with a root to pacify them. Fascinated by the plant's effect on elephants, he had it scientifically evaluated. After extensive research, Serpina , the world's first antihypertensive drug, was launched in 1934.
_______________________________________________________
CEO Interview _______________________________________________________

Himalaya Exclusive Outlet
Himalaya brand. Saket's success in India has landed him the additional responsibilities of heading Himalaya's personal care business in Russia, Israel, Sri Lanka, Nepal, Bangladesh and Central Asia. He successfully launched the personal care line in Russia in 2007 and expanded the company's presence in Nepal and Bangladesh. His multi-pronged marketing strategy for Sri Lanka has led to the acceptance of the brand by key influencers including beauticians and skincare experts. His vision is to make Himalaya the most admired and loved 'wellness' brand in India and across the world and to this end, he has launched several new initiatives that seek to build a strong connect between Himalaya, the consumers and the wider community. In 2011, he was elevated to the position of CEOConsumer Products Division, to lead the Personal Care business worldwide. He continues to head Himalaya operations in CIS countries, Israel, Sri Lanka, Nepal and Bangladesh. Prof. Amrita M A , a Faculty from MSRIM, interacted with Mr.Saket Gore- CEO, Consumer Products Division , Himalaya Drug Company and had a detailed insight in to company's presence and operations. Q1. Greetings from MSRIM! Sir, please appraise us on the herbal drug scenario in India and abroad. SG:In India, there exists a long tradition of using herbal remedies for treating ailments. For ages, minor ailments have been treated using herbs. For example, our grandmothers made a concoction of Tulsi to treat cough while Neem is widely used to keep skin healthy. The level of acceptance for herbal drugs is, therefore, very high in India. While several countries have indigenous systems of medicine, the tradition is particularly strong in India, Southeast Asia and China. Q2. We know that The Himalaya Drug Company is into Pharmaceuticals, Personal Care and Animal Health products. Which are the prime growth generators?
Mr. Saket Gore : CEO, Consumer Products Division Saket Gore is a Production Engineering graduate from Mumbai University, he also holds a Masters in Marketing from the reputed Jamnalal Bajaj Institute of Management Studies, Mumbai. He has over 10 years of experience in the FMCG sector, having worked with Hindustan Lever for a decade. Apart from his vast experience in FMCG, He has also worked for companies like Mahindra & Mahindra and Airtel. Saket joined Himalaya in 2007 as Business HeadConsumer Products Division, responsible for managing the company's personal care division and retail operations across India. In his tenure, he has successfully positioned Himalaya as the safe, efficacious choice of the young and discerning consumer. His keen insights into emerging trends, consumer behavior and preferences have helped bring the brand evermore closer to the consumer. Apart from tapping into the young consumer base, he has also increased Himalaya's reach and accessibility across the country. Within a few months into his profile in the company, Himalaya doubled its presence in Modern Retail Trade. In addition to making inroads into multi-store outlets, he has overseen the expansion and revamp of Himalaya's own exclusive outlets. Today, Himalaya has crossed the 100 retail outlet mark in India, with stores in major cities at prime locations. By launching several new products and entering into new segments within personal care, he has continued to build on the 'head-to-heel' herbal offering of the
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CEO Interview _______________________________________________________ SG:Presently, Pharmaceuticals contribute approximately 60%, Personal Care close to 34% and the remaining comes from Animal Health. Over the last four years, the personal care division has been growing at a healthy pace. This is due to the nature of FMCG products which can be used daily and by the entire family. Moreover, rise in disposable income, increasing awareness and availability of personal care products are also contributing to this growth. Going by the market response, in the coming 2-3 years, personal care products will overtake pharmaceutical products. While personal care is growing faster, the pharma range is the backbone of the Himalaya brand. Our pharmaceutical range gives us credibility with doctors while our personal care products give us visibility. This works well for us, helping us build equity with the medical fraternity and our customers. Q3.Kindly elaborate on Himalaya's presence in overseas countries. Which are the new geographies you are planning to enter in near future? SG:We are present in 71 countries. Presently, overseas markets contribute to 45% of our total revenues. Our overseas business is growing at a healthy pace and in the next couple of years will surpass our earnings from India. We plan to enter Western Europe and Africa with our personal care and pharmaceutical products. Our products are already available in Eastern Europe. Q4.With new regulations, bans on certain drugs being a common feature in the export scenario, what makes The Himalaya Drug Company survive and become a leader? SG:At Himalaya, we ensure our products meet the regulatory requirements laid by different countries. Sometimes these regulations may not be very precise as is the case with allopathic drugs. However, we ensure that we submit detailed dossiers on the product, giving comprehensive information on safety and efficacy. We have put in place systems that qualify our products for registration in international markets. We have an EU-GMP compliant manufacturing plant, a mandatory requirement under the new EU directive. Moreover, the safety and efficacy of our products is clinically validated. Q5. The Himalaya Drug Company is known for innovative marketing strategies. Elaborate the importance and impact of innovative marketing strategies as against conventional methods. SG:We believe in experiential marketing where the consumer can touch and feel the product. To facilitate this we have exclusive Himalaya outlets. Our company spends less money on print media for advertising. We are there in the market for more than 80 years and having earned the credibility, we make efforts to sustain the same by giving good quality products. Also we focus on building awareness; very recently we conducted a 1 minute video contest depicting the various uses of Hand sanitizer at college level. The response was very good. Himalaya always believes in creating value for customers. Q6. It is observed that The Himalaya Drug Company has never rested upon its laurels and always reinvented themselves into various segments. What are the factors that keep the momentum? SG:The vision of our founder to take wellness in every home through herbal healthcare is our driving force. We are a research-based organization and cater to different needs of consumers across the globe. We are continuously researching new herbs, developing new products with the objective of making herbal healthcare affordable and accessible. Today our face wash has 18.9 % market share and the most important factor to keep the momentum going is to have the competitive edge over others. Q7. Nowadays more focus is on Talent management to boost productivity, what kind of approach does Himalaya Drug Company have towards Talent Management?
_______________________________________________________
CEO Interview _______________________________________________________ SG:At Himalaya, we invest a lot of time on recruitment. We select only those candidates who see a future with us and hence our attrition rate is just about 6.5%. Our employees are encouraged to do their PhDs, exposed to global needs and standards, and are given opportunities to work on different products which does not lead to stagnation or monotony. Q8. The Himalaya Drug Company emphasizes on monitoring quality from Seed to Shelf, what strategies are used to percolate this commitment to the lowest level? SG:The quality of our products depends on the quality of herbs. Thus, it becomes imperative to monitor the process from 'seed to shelf'. Our herbs are either cultivated or sustainably collected. We also source herbs through a network of contract farmers. Presently, we are working with over 2000 farmers across India. Such contract farming arrangements help us closely monitor the quality of herbs. Our Agro-Tech division trains farmers in sustainable herb collection. Onsite visits are made to track cultivation practices, monitor soil and water quality, ensure use of natural pesticides and implement other Good Agricultural Practices. We also work with NGOs involved in cultivation and collection of medicinal plants. Through these initiatives, we work with small scale and marginal farmers, mainly women farmers, contributing to their economic empowerment. The R&D team at Himalaya, thereafter, conducts studies to determine efficacy of herbs, authentication, standardization, isolation of new molecules, structure elucidation and stability studies, safety and efficacy in preclinical as well as clinical situations. Each Himalaya product goes through over six to eight years of research before being launched. Our therapeutic products are subjected to the same rigorous standards of testing as any allopathic drug including toxicity studies, Phase I to Phase IV clinical trials and stability studies. Our clinical trials are based on the Helsinki Declaration. The protocols adhere to World Health Organization (WHO) and Good Clinical Practices (GCP) standards. Our products are manufactured in a WHO-Good Manufacturing Practices certified facility. These practices ensure standardization, batch to batch consistency and a promise to our customer that only the best Himalaya product will reach them.
Q9. What are the employee engagement activities
carried out in The Himalaya Drug Company?

SG: Apart from the general activities such as sports
meet, personal counseling, perks such as transport facility, we largely focus on taking personal care of the employees by arranging for annual health checkups and also by providing breakfast, lunch and dinner. Special care is taken while serving these meals with respect to quality as well as specifying calorific value of the food items.
Q10.What impact does social media networking
have on the marketing strategies?

SG: Social media is a great way to reach out to a target
audience, especially youngsters who congregate on social networking sites to express their opinions, discuss, deliberate. It is a great way to access fresh, exciting ideas. We recently ran a contest for our hand sanitizer, PureHands, on Facebook where college students from Bangalore sent in their creative ideas for a PureHands TVC.
Q11. In the present scenario, where the average age
of CEO is decreasing by the day, how important is experience according to you?

SG: Nothing can substitute experience. According to
me, experience is very important and before taking on the position of the CEO, the person should be exposed to minimum 2-3 different functions of the organization.
Q12.What are the essential qualities to become a
successful CEO? SG: The essential qualities to become a successful
_______________________________________________________
CEO Interview _______________________________________________________ CEO are to trust people and also know whom to trust, always keeping the end goal in mind and belief in team work. A good CEO should lead from front when things are down and should lead from behind when things are smooth.
Q13.Our
mantra for being successful managers ?

SG: We talk a lot about smart work and students
budding managers at MSRIM and in other B-schools are eager to know what is your
interpret it as short cut. There are no shortcuts in life. Smart work is hard work done in systematic manner along with passion. And this type of smart work never fails. All the best for a bright future!
Amrita M A is a faculty of Operations and HR at MSRIM. She has industry as well academic experiences. She can be reached at amritam@msrim.org.
_______________________________________________________
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Published by DOUBLEDAY, Newyork, 2008, Pg 270, Price : US 26$, Canada : $30 It's not the magic that makes it work, it's the way we work that makes it magic. This book 'Creating Magic: 10 Common Sense Leadership Strategies From A Life at Disney by Lee Cockerell exemplifies just that. Lee Cockerell has been the Vice President of Operations for Walt Disney for more than ten years. He takes us through the magical journey of leading effectively which results in exceptional performance (magical in itself) of cast members which eventually creates magic at Disney for millions of visitors each year. Lee Cockrell's ten leadership strategies are easy to follow because these strategies can be learnt and developed by just keeping your eyes and ears open, being sensitive to the feelings of others and above all, having the desire and passion to lead, not just manage. Lee Cockrell spoke about these strategies in the Seminar organized at Virginia Commonwealth University in Richmond, Virginia, USA and what intrigued me the most was the fact that the leader should not just focus on the end result but on the entire process that leads to the increased effectiveness of employees in terms of performance and commitment. The leadership strategies mentioned in this book are simply common sense but will yield mind blowing results if implemented in a right way. I would like to discuss these strategies little more in detail to justify the above point. In Chapter Three Lee Cockerell talks about Inclusion which is definitely a buzzword in organizations today no matter what part of the world of you are residing. It is simply not about hiring members of diverse cultures and values but truly valuing and respecting them with dignity which leads to true inclusion. I completely agree with this point because true inclusion would lead to affective commitment by an employee where the employee would stick with the organization for a long period of time not because 'he ought to' but because ' he wants to'. The other point that I find interesting is in Chapter five, where he emphasizes that to be an effective leader you need to hire not only the 'perfect person' but an ideal one. Ideal in terms of overall competence like technical, technological, leadership and management. Companies sometime spend a fortune looking for a perfect person and in the process may fail to hire the ideal one, one who can continue to add value to the job. In Chapter nine he talks about ARE (Appreciation, Recognition and Encouragement) which is an 'inexhaustible resource'. 'ARE' can motivate an employee to stay committed to an organization indefinitely. Appreciation, Recognition and Encouragement go hand in hand and blend perfectly well with each other. A good leader needs to keep an employee motivated by appreciating and recognizing the dedication and hard work not just in private but in public as well to prevent him from indulging in any kind of withdrawal behavior. Strategy eight in chapter nine is about 'Staying Ahead of the Pack'. As mentioned in this chapter the leader can do this by constantly being aware of its environment, learning from the best people around him, from the competitors, keeping up with the colleagues, and knowing the customer base. Very true, if you lag behind you will be overtaken by your competitors who like predators would eat you to satiate their hunger for success. Knowing who your customers are, taking care of their little desires that can make their vacation memorable, is of utmost importance. Customer loyalty is key to success for an organization , the leader needs to make sure that the employees go an extra mile to make sure the customers are happy and satisfied. In conclusion I would like to say that following these ten strategies can help the organization sow the seeds for effective leadership irrespective of what kind of industry or organization it is, at any level of the hierarchy and with people of diverse values or from varied cultures. This book is a must read for anyone who wants to be a 'magical leader to create magic in their organization'. Manika Avasthi Adjunct Professor, Virginia Commonwealth University, Richmond, Virginia, USA.
Book Review Creating Magic: 10 Common Sense Leadership Strategies from a Life at Disney by Lee Cockerell
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The Art of Choosing by Sheena Iyengar Published by Halchette, New Delhi, 2010, Price : Rs. 499/We make choices every day, which range from the mundane to the significant. The daily choices we make determine and shape our life. Defining choice as the ability to exercise control over ourselves and our environment, Sheena Iyengar examines the various factors that influence our choices. This professor at the Colombia University Business School makes a seemingly abstract topic enjoyable even as she manages to the convey the significance of change. We measure our life on a variety of scales including years, major events, and achievements. We could do the same by the choices we make, the cumulative result of which is that we are where we are and what we are. The author elaborates with several examples to show how choice is a powerful force. The point to note here is not the number of choices we have, but the number of choices we are able to perceive. We have the ability to create choices by altering our interpretation of the world. The author provides the example of a shipwrecked mariner out in the open seas for seventy six days with little chance of survival. As he drifted he heard a voice asking him if he wished to survive. His mind responded with an emphatic yes, which kept him alive until he was rescued by a passing boat. All of us face such circumstances in our daily lives, when we need to decide whether to act or to just stand by and observe. On a wide canvas, the author has knit together personal, familial, cultural, psychological and political scenarios, dissecting skillfully the decisions made from a variety of available choices. The cultural dimension affects how choices are perceived and made across the world. Historically, collectivism has been a universal. She traces the evolution of the more recent individualism in the west, especially in the US, to factors such as industrialization, capitalism and political freedom. Individualist ideology focuses on the 'i' and looks at choice as an opportunity to promote an individual's ability to be or do whatever she or he desires. Collectivism believes that the individual is a part of the collective family, co-workers, village, nation and hence sees choices from this perspective. These differences affect what constitutes choice and the way people choose, which ,in turn, affects organizations and even societies. It explains, for instance, why greater wealth is associated with individualism. Similarly a higher population density is associated with collectivism. Asians, who tend to be more collectivist, believe they are less able to influence other people and see fate as playing a greater role in their lives. The Bhagvad Gita asks us to focus on the action and not on the fruit and Muslims end most sentences with Insha Allah. A study that the author undertook at Citicorp, an international bank employing people of various backgrounds across the globe shows the considerable effort made by such an organization to create a unified corporate culture. The author talks of freedom and choice in terms of the political, economic and social environment. There is 'freedom to' and a 'freedom from'. The former refers to the ability to achieve outcomes and realize ones full potential while the latter is the absence of coercion or forcible interference in the pursuit of one's goals. Capitalism emphasizes freedom through the limitless opportunities it throws up, in contrast to socialism/communism which aims for equality of outcome guaranteeing its members an adequate standard of living. Prevailing economic situation in the Western and communist states has shown that neither system is flawless and a good balance might be a better option. On a more sober note, the author looks at the global environment with its incredible connectivity which also makes it rather bewildering and chaotic. The author refers to the present day problems of terrorism between the western and the Muslim world and suggests a different frame for creating and making choices to end this regrettable phenomenon. Professional managers will find this book an interesting and illuminating read as it could help in understanding why people differ in the decisions they make (based on choices) and what makes them differ. Chitra Parthasarathy
Visiting Professor, MSRIM. She can be reached at chitraparthasarathy@msrim.org
Book Review
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M. S. RAMAIAH MANAGEMENT REVIEW A Research & Academic Journal of Business Management
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ISSN - 0975-7988 Vol.

3, Issue 1, Jan-June, 2011

FROM THE EDITOR

Nitin Barekere & Rajkumar B. K.

Rangaraj G. & R. Thimmarayappa

Ajimon George & G. S. Gireesh Kumar

FOREIGN DIRECT INVESTMENT IN INDIAN RETAILING A CASE OF WAL-MART

S. Harish Babu & Cynthia Menezes

FUNDAMENTAL ANALYSIS AS A METHOD OF SHARE VALUATION IN COMPARISON WITH TECHNICAL ANALYSIS

CRM PRACTICES IN NEW AGE BANKS IN INDIA

GROWTH OF RETAIL CREDIT BY COMMERCIAL BANKS IN KARNATAKA

INVESTORS' PSYCHOLOGY TOWARDS IPO GRADING AN EMPIRICAL STUDY

CEO INSIGHT : SAKET GORE

Dr. Pallab Bandyopadhyay

Dr. C. S. Thammaiah Dean

Alamelumangai analyses the growth phase of retail credit by banks in Karnataka.

Leadership to investigate principals' technology leadership practices.

issue being interviewed by Amrita.

Dr. Sandhya Anvekar Chief Editor

I Keep Up the Good Work

III Low Priority

Reward Administration Technology Support (ESS/MSS) Ethics and Communication

Performance (Degree of Satisfaction) -----> High Low --

4.24 ( )*This indicates significant differences.

4.20 ( )*This indicates significant differences.

Table 5: Importance analysis based on respondents gender

3.81 3.92 ( )*This indicates significant differences.

Table 8: Performance Analysis based on respondents gender

From the service improvement action plan matrix

An Empirical Study of Intuitions Role in Corporate Decision - Making _______________________________________________________

An Empirical Study of Intuitions Role in Corporate Decision - Making _______________________________________________________

Variables Time (P1) Education (P2)

Chi- Square 27.4 12.4

Variable Environmental Uncertainty (P3)

ANOVA F - Ratio 1.288

Khatri & Ng., Op.cit (2000)

Burke and Miller Op.cit., (2000) Gigerenzer Op.cit (2000)

Khatri & Ng Op.cit (2000)

Source : World Development Indicators, World Bank (http://www.worldbank.org.data)

4. Ajay Prakash and Garima Malik (2008). Empirical study of

Adoption of Internet Banking A Glimpse On Influencing Variables _______________________________________________________

Adoption of Internet Banking A Glimpse On Influencing Variables _______________________________________________________

Adoption of Internet Banking A Glimpse On Influencing Variables _______________________________________________________

Foreign Direct Investment in Indian Retailing - Case of Wal-Mart _______________________________________________________

Retailing, Deloitte Touche Tohmatsu and Stores Magazine.

Development, New York: Norton, 1996, Fourth Edition.

ex.ht m (Accessed on 30th July 2009)

Tuck School of Business in http://mba.tuck.dartmouth.edu/pdf/2002-20013.pdf (Accessed on 14th August 2009).

Foreign Direct Investment in Indian Retailing - Case of Wal-Mart _______________________________________________________

innocence, The Subcontinent, November 25th, 2006 in http://www.literateworld.com/edit.htm

joint venture in India, Times of India, August, 2007-08-06.

Dt6: One-Sample Test

DT4: One-Sample Test :

DT8: One-Sample Test

Interpretation: Hotels using CRM have loyalty scores at higher side.

Destination CRM.com, What is CRM?, Retrieved June 18, 2010,

Gage, Kathleen (2004), Retrieved June 18, 2010,

and Improvement of Services in Tourism, Managing Service Quality, 10(6): 356-366.

really works, Harvard Business Review (November-December), pp. 80-95.

Percent 26.0 62.0 12.0 100.0

Chart 1 Age of the respondent

Analysis helps in generating better returns in the long term

When the market is bullish, the results of analysis is highly reliable