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(ABRC)

APPLIED BUSINESS RESEARCH CONFERENCE

2009

Conference Proceeding(Refereed)

1st International Conference on Behavioral, Economic and Management Sciences

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Message by Conference Chair(Dr. Shahbaz S. Gill)

Welcome to the 2009 Applied Business Research Conference. On behalf of the ABRC-2009 Conference Committee, I would like to thank you all for attending this conference and making it a success. I sincerely hope that this forum will give opportunity to researchers to interact with each other and share their work with other fellow researchers.

ABRC 2009 being the first endeavor of research & development forum, we are pleased to report that we have received more than 130 submissions from more than 51 different universities located in five different countries of the world within a short span of time. All the submissions to this conference have undergone a rigorous peer-review and paper selection process. Out of the received submissions, 97 high quality papers were selected for presentation in the conference. In addition, ABRC-2009 is accompanied by distinguished keynote speakers Prof. Dr. Manzoor Ahmed (Rector IIUI), Prof. Dr. Anwar Siddique( President IIUI), Professor Danishmand (Dean Graduate School of Management) and Prof. Ijaz Shafi Gilani from International Islamic university.

For this phenomenal success I would like to express my appreciations to all program committee members for their professional reviews that helped us to ensure a quality at our conference especially Dr. Bashir Khan (Chairman Review Committee). I would like to thank all the paper authors for their submissions and diligence in preparing the final manuscripts.

Taking this opportunity I would like to express my special gratitude to Proceedings Editor (Mr. Imran M Qureshi) ,Co-Chair ( Dr. Javed iqbal ), Program Chair (Mr. Farooq Hussain) and Conference Coordinator (Ms. Asma Asrar Qureshi) , for their professional and persistent efforts throughout the time; and to ABRC Management Committee (Mr. Naeem Ullah, Mr. Nasir Abbas, Mr. Saqib Ilyas, Mr. Muhammad Usman, Mr. Amjad Shamim, Mr.Hafiz M Jameel, Mr. Mudassar Imran Mustafa, Mr. Mohammad Ali Shahid and other fellows) for their support and hard work. Very special thanks should go to Conference Secretary (Mr. Shahid Nawaz Khan) who has made the organization of ABRC-2009 extremely efficient and smooth. Finally, I would like to thank Mr. Israr Ahmed and Ms sidrah Al Hassan) for their efforts and support.

I sincerely hope that this endeavor by ABRC will benefit all participants by utilizing the knowledge and networking therein to address business challenges facing the world to make this world a better place to live. God bless you!

Message by Proceedings Editor(Mr. Imran M. Qureshi)

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When we started with the idea of launching a conference we were not expecting it to be a big event. Initially we only thought of including universities in the capital region but we were pleasantly surprised by the overwhelming response of academic circles. We received a total of one thirty four abstracts out of which ninety seven were selected for presentation. We were also highly encouraged by the number of full papers that were received for publishing in the proceedings. The papers were then selected by a review panel and then subjected to a blind peer review process. We have tried to include the best papers from all the different areas presented in the conference.

Finally we are done with the whole process and with great relief the proceedings are being published as promised by the ABRC team. Personally I would like to thank the whole proceedings and organizing team for this commendable effort. I hope that the next conference will prove to be an even bigger success and our efforts will usher in an era of research and create a thirst for academic excellence in the country.

Table of contents:Advisory Board of ABRC-2009 5

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Manuscripts Review Committee for ABRC-2009 6

Research Papers:

o e-Government Integration 10

o HR strategies’ ‘fit’ with business strategies 22

o Stock exchange – a key institute in Econo-financial stability 43

o The impact of cellular phone on the education in Sindh 53

o Effects of leadership attitude on organizational performance 62

o Impact of Big Five Personality Traits on Job Stress amongst Sales Employees in the Pharmaceutical Industry in Pakistan 76

Advisory Board for ABRC-2009Prof. Fateh Muhammad MalikRectorInternational Islamic University,

Anwar H. Siddiqi, PhDProfessor of Public Administration President,

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Islamabad, Pakistan

International Islamic University, Islamabad, Pakistan

DanishmandProfessor of Strategic MarketingDean, Graduate School of ManagementInternational Islamic University, Islamabad, Pakistan

Ijaz Shafi Gilani, PhDProfessor of IR at IIUIChairman Gallup Pakistan

Carol Ann, APR. PhDProfessor of Public RelationsUniversity of the PacificUSA

Mutee-ur-Rehman Mirza, FCMA, FCADirector KMR Management ConsultantIslamabad, Pakistan

Nazari Ismail, PhDProfessor of Strategic ManagementUniversity of Malaya, Malaysia

Cole Hackley, PhDProfessorUniversity of the PacificUSA

Sheila Osmanwich, PhDUniversity of East LondonUK

K.S.Kang, PhDProfessor of MarketingDirectorTechnology University JalendherPunjab. India

Harpreet KaurDeputy Dean. PCTE, Ludhiana. Punjab. India

Naseer Ahmed, PhDProfessor of Marketing COMSATS Institute of Technology Attock Pakistan

Ahmed Kaleem, PhDAssociate Professor of FinanceLahore School of Economics, Lahore, Pakistan

Muzzafar Ali Qureshi, PhD Professor of Management COMSATS Institute of Technology Islamabad Pakistan

Manuscripts Review Committee for ABRC-2009

Bashir Khan, PhD(Chairman, Review Committee) Faculty of Management Sciences,International Islamic University Islamabad Pakistan

Usman Raja, PhDAssociate Professor of Organizational Behavior International Islamic University Islamabad Pakistan

Pawan Kumar Taneja, PhD Mohtasham Saeed, PhD

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Professor of Management Entrepreneurial Business SchoolIMDA Gurgaon, India

Assistant Professor of Strategic managementInternational Islamic University Islamabad Pakistan

Carol Ann, APR. PhDProfessor of Public RelationsUniversity of the PacificUSA

Kashif-Ur- Rehamn, DBAAssociate Professor of FinanceIqra University Islamabad Pakistan

Nazari Ismail, PhDProfessor of Strategic ManagementUniversity of Malaya, Malaysia

M. Ehsan Malik, PhDDean Gujranwala CampusPunjab University, Lahore

Ahmed Kaleem, PhDAssociate Professor of FinanceLahore School of Economics, Lahore, Pakistan

Nadeem Safwaan , DBAAssistant Professor of FinanceFoundation University Islamabad Pakistan

Naseer Ahmed, PhDProfessor of Marketing COMSATS Institute of Technology

Attock Pakistan

Muhammad Aslam Khan, PhDProfessor of Management Dean Hi-Tech UniversityTaxila Pakistan

Sheila Osmanwich, PhDUniversity of East LondonUK

Azhar Akhlaq. Gotland University, Sweden

Harpreet KaurDeputy Dean. PCTE, Ludhiana. Punjab. India

Arif Saleem Bodo School of ManagementBodo, Norway

K.S.Kang, PhDProfessor of MarketingDirector: Technology University Jalendher Punjab. India

Shadi Ullah Khan, PhDProfessor of Public ManagementGomal University,D.I. Khan, Pakistan

Nauman Farooqi, Ph.D.Associate Professor of FinanceMount Allison UniversityCanada

Muhammad Azeem Qureshi, PhD Assistant Professor of ManagementBZ, University Multan, Pakistan

Javed Iqbal, PhDInternational Islamic University, Islamabad, Pakistan

Shahbaz S. Gill, PhDImran M. Qureshi, MPhilFarooq Hussain, International Islamic University, Islamabad, Pakistan

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e-Government Integration

Khubaib Ahmed QureshiAssistant Professor, Head of HIMS IT Department

Hamdard Institute of Management Sciences, Hamdard University, Karachi, PakistanOffice: 6440077, Cell: 0322-2738669

khubaib_ahmed@yahoo.com

Professional Biography - M. Phil in Data Eng., ERP Consultant, Bio-informatics Scientist, Research Reviewer of Western Illinois University (Macomb, IL, USA) and Member of many technical bodies like: AGBA, Bioinformatics Org. Inc (Hudson, Massachusetts), SPIN-SEI, PMI-USA Khi. Chapter etc. 11 years of comprehensive teaching experience at various reputed Pakistani universities. I have represented Hamdard University on different elite research fora all over the world including USA, China, Malaysia, Netherlands, and Oxford England etc., and my publications are presented/published in international journals of repute (high ISI rating/impact factor) internationally, in the area of e-Business Integration, e-Government, Agent Based Mobile Computing, Mobile Databases, Business Intelligence, XML Based Languages, and CMMI etc. I have also presented research papers in international conferences throughout Pakistan. Currently, I am striving towards the prevalent field of Bioinformatics specifically for cancer drug designing, to pursue my Ph. D degree.

Abstract

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Purpose – To deliver improved services, government and public sector agencies must share information with each other, directly with the public and with other business organizations. This brings with it a requirement for more efficient ways of integrating systems together. e-Government should enable citizens and business to deal with government on a vast range of matters, any time of the day or night, without having to understand which part of government is providing the service they require. Therefore an e-Government Integration solution framework is presented, comprises the challenge of efficiently integrating diverse e-Government processes and data within and across the e-Governments, citizens and business allowing the governments to respond efficiently. Design/methodology/approach- Major approaches and evolution of enabling technologies ranging from EDI to Web Services and XML based process integration are comprehensively analyzed to discover the basic e-Government Integration framework requirements and then provide flexible, scalable and adaptable e-Government Integration solution framework.Findings- To solve integration problem several tools and technologies have emerged. Different integration technologies can be viewed as complementary, if they are properly adopted and structured. However basic findings are: making use of graphical Business Process Management which can compose WSs compliant to SOA could be effective. Loosely coupled document based communication seems scalable. XML based data transfer using WSs should be avoided to minimize network traffic, support wide variety of transports, and easily adoptable for stake holders.

There are several architectures regarding engineering e-Government, one that have been proposed in order to facilitate integration. Among the architectures is “The Zero-Time T-Strategy framework”. Through which or regarding any Process Centric Management - PCM following three aspects are identified as the most important ones in the success of an e-Government.: 1. Time to Market, 2. Strong positioning on the basis of competency, 3. Ability to adapt to changing govt./market needs.

It is found that real-time e-GI solution framework offer following Architectural features: (scalability, security, heterogeneity, adaptability, manageability, distributivity, decoupling, autonomy), real-time requirement: (asynchronous, publish/subscribe) and Business requirements: (flexibility, agility, usability, reliability) for productivity.

Research limitations/implications- e-GI Solution Framework is centrally managed where every partner is required to send their e-Government documents to e-GI Framework Hub, where their business is integrated. No changes are expected in partner’s application except application adaptors for certain situations. Also e-GI Solution Framework Hub must be supported by Backup Exchange for high level of availability.

Practical implications- In fact the proposed e-Government Integration solution is highly suitable for those countries which are not much organized and advance in technology standards.

Originality/value- Current era is expecting real e-Government and it’s Integration, which is critical to meeting citizen and business expectations of access to public sector information and services. To deliver improved services, government and public sector agencies must share information with each other, directly with the public and with other business organizations. One of the most challenging aspects of the future of e-government is the practical implementation of 'seamless' government across jurisdiction. Integrating the applications and data sources must be accomplished without requiring significant changes to these existing applications and data. To address these issues, whole marketplace has

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emerged for software solution that can help to achieve real and improved e-Government Integration solution, which is presented in this research.

Keywords- e-Government Integration Framework, Connected e-Government, e-Government Integration, e-Governance Solution, e-Government Integration Solution.

1. Introduction

e-Government is the use of information technology to support government operations, engage citizens, and provide government services. From the user's perspective, e-government should enable citizens and business to deal with government on a vast range of matters, any time of the day or night, without having to understand which part of government is providing the service they require. Actually there are four key dimensions, which reflect the functions of real e-Government: - E-services: the electronic delivery of government information, programs, and services often (but not exclusively) over the Internet. E-democracy: the use of electronic communications to increase citizen participation in the public decision-making process. E-commerce: the electronic exchange of money for goods and services such as citizens paying taxes and utility bills, renewing vehicle registrations, and paying for recreation programs, or government buying supplies and auctioning surplus equipment. E-management: the use of information technology to improve the management of government, from streamlining business processes to maintaining electronic records, to improving the flow and integration of information. Based on the compelling vision following are the necessary pillars[21] of the connected government strategies: 1. Citizen centricity, 2. Standardized common infrastructure, 3. Governance, 4. New organizational Model, 5. Social Inclusion, 6. Back-office reorganization.

The growth of the Web is revolutionizing the way government interacts with citizens, business and governments efficiently. The benefits of e-commerce are convincing more and more governments to make online versions of their services. Many governments have moved some mission-critical portions of their operations/services on-line, and many have made great strides towards workflow management [1] and others [2]. In global consideration for engineering e-Government we have to support different business models such as: G2G, G2C, and G2B etc. which ultimately require global and flexible integration solution. Infect a comprehensive and completely integrated solution could address following few challenges in addition to many others: 1. Integration of information and services, 2. Privacy and data sharing, 3. Dynamic use of the Web, 4. Partnerships and other organizational networks.

Different type of complexities in e-Enterprises or Internet Enterprise which are the enterprises that conduct business over the internet [3] and perform their business process electronically [4, 5], should also be carefully considered in true e-Govt. Integration (e-GI) solution.

However the idea of e-Government regarding e-Enterprises gives rise to certain dilemmas among which, some are new and others are old. New problems have been raised due to the technology advancements that include interaction with new technologies like Mobile Agents [6] etc. Among the old problems “integration of heterogeneous services” tops the list [6]. When talking about integration, the major goal is to make the task simple and easy to use so that further integration of new services becomes easy.

There have been several attempts to provide tools and architectures that will facilitate the integration of heterogeneous applications, however all these tools and frameworks like BizTalk, WISE, eCO, SOA require a degree of manual intervention and customization.

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Therefore an e-GI framework is presented that will minimize human intervention. The following section will provide details of the “e-Government Integration (e-GI)”.

1.2. e-Government Integration (e-GI)

e-GI is critical to meeting citizens, business and other government expectations of access to public sector information and services. To deliver improved services, government and public sector agencies in addition to other governments must share information with each other, directly with the public, business organizations and with other government organizations. This brings with it a requirement for more efficient ways of integrating complex range of systems together. e-Government should enable citizens and business to deal with government on a vast range of matters, any time of the day or night, without having to understand which part of government is providing the service they require. Therefore one of the most challenging aspects is the practical implementation of 'seamless' government across jurisdiction. Integrating the applications and data sources must be accomplished without requiring significant changes to these existing applications and data. Those applications that were not designed to interoperate, need to be integrated, enterprise government and community wide [7]. As government departments interact on a real-time basis and business processes cut across multiple enterprises and business lines, the need for information integration leads to the adoption of best suited e-GI approach [8]. Thus, legacy and newer systems can integrate to provide the government with greater competitive advantage. The volatile nature of government requirements, the effort to lower total cost of ownership, and the need to rapidly introduce new services require decoupled, event and service oriented (SOA & EDA) functionality of government and other applications. These government services not only provide new functionality but also leverage investments in legacy systems running the critical applications.

1.3. e-Government engineering architectures

There are several architectures/frameworks that have been proposed in order to facilitate integration. Among the architectures is “The Zero-Time T-Strategy framework” [4]. Through which or regarding any Process Centric Management - PCM following three aspects are identified as the most important ones in the success of an e-Govt.: 1. Time to Market, 2. Strong positioning on the basis of competency, 3. Ability to adapt to changing govt./market needs. Keeping these considerations in mind the developers of this framework recommend a component based integration and application of engineering concepts to the development of e-Government. The major focus of any architecture is to enable following major activities in the environment: Manage and evolve all technological and organizational processes effectively; Integrate and manage all government information electronically; and Empower knowledge workers at all levels with broad decision support capabilities.

USA’s Federal Enterprise Architecture (FEA): is component and business based framework for govt.-wide improvement, based on five interrelated ‘reference models’ designed to facilitate cross-agency analysis and the identification of duplicative investments, gaps, and opportunities for collaboration within and across govt. agencies. Models are: Performance Reference Model (PRM), Business Reference Model (BRM), Service Component Reference Model (SRM), Data Reference Model (DRM), and Technical Reference Model (TRM). e-Govt. Interoperability Framework (e-GIF): is collection of policies and standards endorsed for New Zealand Govt. IT systems. Brazil’s Interoperability framework e-PING: is a reference model used to guide the development of solutions and the implementation of e-Govt. technology infrastructure nationwide [21].

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2. e-GI enabling technologies

Different technologies have been used for business integration, whereas major of them are classified as:1. Electronic Data Interchange Based Integration2. Component Middleware Based Integration3. Business Process/Workflow Based Integration

4. XML Based Interaction Framework4.1. Microsoft BizTalk Server

4.2. eCO. etc. 5. Web Services Based Integration Framework

2.1. Service oriented architecture (SOA) paradigm

An architectural paradigm for creating and managing “government services” that can access distributed government functions, IT assets, and information with a common interface regardless of the location or technical makeup of the function or data. This interface must be agreed upon within the environment of systems that are expected to access or invoke that service. It supports new government requirements through the creative use and reuse of existing assets in quick and easy way. SOA offers: Loosely Coupled, request/Reply, Synchronous Communication support.

2.2. Web services (WSs)

Web Service is an implementation and important aspect of SOA [9]. WSs are loosely coupled applications using open, cross-platform standard which interoperate across organizational and trust boundaries; they are free from client context and deployment requirements [10, 11]. Specifically Web Services are platform independent loosely coupled, dynamically located and invoked, firewall friendly and widely accessible which makes them appropriate for economical EAI solution [12, 13, 14].

Figure 1. Web services reference model

They use open XML and Internet-based protocols for their description, registration and invocation: Web Services Description Language (WSDL) used for describing operational features [15]; Universal Description, Discovery and Integration Language (UDDI) provides programmatic interface for publishing and discovering [16]; Simple Object Access Protocol (SOAP) [17] offers lightweight messaging framework for exchanging XML formatted data,

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supported by variety of transport protocols (HTTP, FTP, SMTP), and structured as envelop containing header (features like Security, transaction etc) and body (actual data). Other standards like: WS-Security, Monitoring and Management (WS-DM) are developed, in addition to: WS-ReliableMessaging, WS-Eventing and WS-Notification which are in standardization process. Interaction among WSs is shown in figure 1.

Adoption of an XML based messaging (SOAP), and use document based messing model, over well-established protocols enables communication among heterogeneous systems and loosely coupled relationship. Standards like BPEL4WS [18] could be used for business process definition through WSs. Heterogeneous applications (CORBA, Java etc.) may be wrapped and exposed as WSs. However WSDL neither model semantic features (document type: PO etc) nor include security oriented information such as role based access control etc. regarding adoptability service signature may change which require automatic detection and handling of changes. Using tagged language for data exchange and use of complex data types, which are not supported in SOAP (require XML parser to load XML schema from remote location) will overload the network. Another scalability issue refers to registry which could be centralized, distributed and replicated.

Figure 2. e-GI solution framework service layers

2.2.1. WS composition standards for BPM. Many efforts has been made for developing standards for WS composition [46], such as XLANG [19], Web Services Flow Languages (WSFL) [20], Web Services Choreography Interface (WSCI), Business Process Modeling Language (BPML) and finally superseding, Business Process Execution for Web Services (BPEL4WS).

3. e-GI platforms

Following are the platforms to develop e-GI solutions: TIBCO Active Enterprise, Mercator Enterprise Broker 5.0, Oracle Integration Server, HP Net Action IOE, IBM Websphere Business Intigration Suit, Miscrosoft BizTalk Server 2004, Microsoft .NET, Sun Open Net Environment, Vitria Business Ware, Versata Global 2000, BEA WebLogic Integrator, Web Methods, SeeBeyond E*Gate Integrator, etc.

4. e-GI solution framework architecture

Aim of this paper was presenting e-GI with the intent to introduce appropriate e-GI solution, therefore the bases of framework are proposed as:

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4.1. Architecture service layers

e-GI solution framework comprised of three service layers (see figure 2):

4.1.1. Transport service layer. Pure loosely coupled architecture is claimed through document based communication model; therefore business applications communicate through diverse business documents via various protocols. Transport service layer provides appropriate protocols to exchange documents between business communities. In general partners can use different protocols for documents which require gateway service/transport service to translate documents between heterogeneous protocols (see figure 3).

4.1.2. Presentation service layer. After receiving the business document from transport service layer it must be identified and understood in such a way that the information provided in that document could be accessed by the system and other lower service layer. Major services of presentation layer are: document transformation (using mappings), information translation and integration among disparate representation (see figure 4). In short we can say that it mostly deals with content semantics regarding type of business document and provides integration of data models and document format.

4.1.3. Value aided services (VAS) layer. The major requirement of business partners is to integrate diverse business processes for cross organizational business processes which is done through VAS/Business Process Integration layer (see figure 5) and require well-defined agreed upon business process. After the identification and transformation of business document by presentation service layer the information is transferred to VAS layer where certain business process related to document is applied. Objective of this layer is to provide interaction among business process of autonomous and heterogeneous partners therefore interpretability at this layer is a challenging issue which require well defined agreed upon business processes. Layered service architecture supports peer-to-peer communication among governments etc and it depends upon situation that which level of service is required .some times business integration may require transport services only, or for some situation business integration is required till presentation service, or it may be possible that business is integrated to highest level known as value aided service layer for process integration.

There must be few services across all the layers to claim reliability and manageability like:

4.1.4. Tracking services. Provide Tracking and Monitoring facilities. Every service informs their activities to tracking manager, which maintain tracking and monitoring log when any failure is reported to tracking manager it transfer that activity to Notification Manager.

4.1.5. Configuration and failover recovery services. Configuration manager continuously monitor the services if any service found fail then it is informed to Notification Manager. It also maintains system’s metadata. Once any business document fail to receive service due to document error or service failure it is notified to configuration manager by that layer which logs failure configuration in configuration database and when the failure is recovered it is kicked back through recovery service. It also offers load balancing.

4.1.6. Notification services. Provide Notification Services to monitoring staff through available modes of transport such as: e-mail, Fax, and sms. After reception of failure notice the failure is recovered.

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4.2. Architectural, real-time & government requirement for e-GI framework

It is recommended that real-time e-GI solution framework offer following Architectural features: (scalability, security, heterogeneity, adaptability, manageability, distributivity, decoupling, autonomy), real-time requirement: (asynchronous, publish/subscribe) and Business requirements: (flexibility, agility, usability, reliability) for productivity.

Figure 3. e-GI solution framework’s Transport Layer interactions

Following are architectural features of the framework:

4.2.1. Scalability. Ability of a system to grow in different dimensions is referred as scalability. In business community establishment of new relationships in low cost and efforts are desirable. Therefore provision of business services component templates and establishment of new business processes through orchestration ensures framework scalability.4.2.2. Security. It requires mutual authentication, authorization, confidentiality, and non-repudiation. This is supported with Partner’s authentication, SSL, SHTTP, S/MIME and PKI securities.

4.2.3. Heterogeneity. Different levels of heterogeneity exist within partners like: Structural Heterogeneity, and Semantic Heterogeneity etc. In general, degree of dissimilarity between partners is referred as heterogeneity. In document based communication model, it is fulfilled by providing document validation, translation, transformation and transportation in diverse forms.

4.2.4. Adaptability. Ability of system to quickly adapt to dynamic business changes. Because impacts of changes are limited in layered architecture therefore changes are incorporated in specific service component for adaptability.

4.2.5. Manageability.

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Degree of application’s visibility and manageability such as supervision, control and performance of its execution, which is provided by tracking, notification, configuration, and recovery services.

4.2.6. Distributivity. Ability to separate group of common services into different integration levels and connect them appropriately to provide required level of integration, which is achieved by orchestration facility which integrates various service components at different layers and compose them in form of web service for certain business processes.

4.2.7. Loose coupling. The most important feature of e-GI that partners should not be dependent on each other and exchange business information on demand. Impact of changes closely depends on the degree of coupling. Document based communication model is followed.

4.2.8. Autonomy. Provides more local control over local services and allow maximum flexibility to change processes without effecting to each other, such as each partner is viewed as black box. Therefore partner’s integrations are not effected due to e-GI Hub Model.

Regarding EDA real time govt. support requires:

4.2.9. Asynchronous. In asynchronous business demand information should be sent without the expectation of an immediate response or no requirement of maintaining alive connection among two systems while waiting for response, which offer more independence, and achieved by queued document facility by using message queuing facility in asynchronous business demands or in case of failure.

Figure 4. e-GI solution framework’s Presentation Layer interactions

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Figure 5. e-GI solution framework’s Value Aided Services Layer interactions

4.2.10. Publish/subscribe. Provides many-to-many consumer/producers interaction such as once producer produce information about an event that must be received by all authorized consumers. It is accomplished through e-GI Solution Framework DB by maintaining consumer/producer relationships accessed by every activated business process service.

Government requirements are offered as: Descriptive approach to BPM increase framework usability; and scalable service based layer approach makes business implementation flexible to cover business agility, whereas recovery service and multiple instances framework deployment in parallel claims ultimate reliability.

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Figure 6. e-GI framework hub model

4.3. e-GI framework technologies & architecture

e-GI is done by making use of descriptive BPM to describe process workflow which involves selection of different service components from respective layers. Transport layer contains common transport wrapper components based on .NET COM components to support different forms of transports. They can be created and customized through common temples. Presentation layer is based on multiple common WSs for mapping and transformations. For process integration; Business validations are enabled using WSs at VAS layer. Common business logics with respect to sectors are already exposed in WSs form which can easily be customized. Inter layer communication is achieved through MSMQ (see figure 2).

4.4. e-GI hub model

e-GI Solution Framework is centrally managed where every partner is required to send their government documents to e-GI Framework Hub where their business is integrated. No changes are expected in partner’s application except application adaptors for certain situations (see Figure 6). e-GI Solution Framework hub must be supported by Backup Exchange.

5. Conclusions

A lot of e-Government efforts can be tracked in the market. There are a few problems that are still not completely solved among which some are new and the rest are old. Among the old problems, integration is on the top. This is due to the fact that integration will enable the organization to leverage costs by enabling the organization to use legacy applications and will facilitate electronic communication with business partners. To solve this problem several tools and technologies have emerged. Different e-GI technologies can be viewed as complementary, if they are properly adopted and structured. However basic findings are: making use of graphical BPM which can compose WSs compliant to SOA could be effective. Loosely coupled document based communication seems scalable. XML based data transfer using WSs should be avoided to minimize network traffic, support wide variety of transports,

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and easily adoptable for partners. In fact the proposed solution is highly suitable for those countries which are not much organized and advance in technology standards.

6. References

[1] Michael “Electronic Enterprise Engineering: An Outline of an Architecture” IEEE 1997. [2] Brahim, Boualem, “Business-to-business interactions: issues and enabling technologies” Springer-Verlag April 3, 2003[3] Faisal Hoque., “e-Enterprises: Business Models, Architecture, and Components.” 2004[4] Urcan, Murat “Internet Enterprise Engineering A “Zero-time” Framework based on “T-Strategy””, IEEE 2001[5] Faisal , “e-Enterprise:Where Are You Today? A White Paper” Enamics [6] S, German, Michael, G, “XML-enabled workflow management for e-services across heterogeneous platforms” The VLDB Journal 10: 91–103 (2001).[7] TIBCO, “Enabling Real-Time Business Through A Service-Oriented and Event-Driven Architecture” at: http://www.tibco.com [8] StC. Saint Consulting Ltd. “Selecting an EAI Solution- An Introduction” EAI Market Taxonomy, 2001, at: www.saintconsulting.com. [9] Brent C., Dmitry T., “Service Oriented Architecture- Elements of Good Design”, Business Integration Jour., Jan 2004.[10] Tsur S, Abiteboul S, Agrawal R, Dayal U, Klein J,Weikum G., “Are web services the next revolution in e-commerce?”. (Panel). In: VLDB Conference,2001, pp 614–617, Rome, Italy[11] Casati F, Shan MC., “Models and languages for describing and discovering e-services”. (tutorial). In: SIGMOD Conference, 2001. p. 626, Santa Barbara, Calif., USA.[12] Stal M., “Web Services: BEYOND COMPONENT-BASED COMPUTING”, Comm. of the ACM Oct 2002, Vol. 45, No. 10.[13] Arsanjani A., “Developing and Integrating ENTERPRISE COMPONENTS AND SERVICES”, Commun. of the ACM Oct 2002, Vol. 45, No. 10[14] Zhaohui W. S., Deng Y. Li, “Introducing EAI and Service Components into Process Management” Proceedings of the 2004 IEEE International Conference on Services Computing (SCC’04). [38]. W3C; Web Services Description Language (WSDL). http://www.w3.org/TR/wsdl[15] W3C; Universal Description, Discovery, and Integration (UDDI). http://www.uddi.org [16] W3C; Simple Object Access Protocol (SOAP). http://www.w3.org/TR/soap[17] BEA, IBM, and Microsoft, “Business Process Execution Language for Web Services (BPEL4WS)”.http://xml.coverpages.org/bpel4ws.html[18] Aissi S, Malu P, Srinivasan K; “E-Business process modeling: the next big step”. IEEE Comput. 2002, 35(5):55–62[19] Microsoft; “Web Services for Business Process Design (XLANG)”. At: http://xml.coverpages.org/xlang.html[20] IBM; Web Services Flow Language (WSFL). http://xml.coverpages.org/ws.html[21] Kaczorowski W. “Connected Government- thought leaders: Essays from innovators”, Premium Publishing CISCO systems, 2004.

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HR strategies’ ‘fit’ with business strategies

Qura-tul-aain KhairMS leading to PhD

International Islamic University Islamabad Pakistandawnmbait@hotmail.com

Abstract

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Purpose- This research is basically a literature review about selecting and implementing HR Strategies with respect to the organization’s business strategies in order to gain competitive edge. HR strategy’s effect on firm performance is always dependent on how well it fits with other factors.

Design/methodology/approach- The literature which has been reviewed is concerning with Miles and Snow’s defender, prospector, analyzer business strategies and their appropriate fit with Carroll and Schuler’s HR strategies which are accumulator, utilizer and facilitators. The implementation of these HR strategies is through strategic HR choices, which are workflows, staffing, employee separation, performance appraisal training and development and compensation.

Findings- No one business strategy and no specific HR choices lead an organization to success but it is a match which is present between business strategy and HR strategies.

Research limitations/implications- This paper has emphazised on the business level strategies, review can be extended by considering corporated level strategies along with different set of stratgic HR choices.

Originality/value- This paper has covered probably all important aspects of HR strategies with respect to business strategies. The adapted strategic HR choices of each HR choices can be readily used by business following any Miles and Snow’s business strategy.

Keywords- Miles and Snow’s business strategies, defender, prospector, analyzers, HR strategies, accumulator, utilizer, facilitators, strategic HR choices. Introduction

This research is basically a literature review about selecting and implementing HR Strategies with respect to the business strategies for competitive edge. ‘Fit’ leads to better performance and lack of fit creates inconsistencies that reduce performance. Fit refers to the consistency between HR strategies and other important aspects of organization. It is pattern of planned human resource deployments and activities intended to enable the firm to achieve its goal. (Wright and McMahan, 1992). For this literature review organizational/business strategies have been considered as important aspect of organization. Table II. is presenting the main concept of this literature review. Hitt et al (2005) has cited Schuler and Jackson (1987) for the idea of external fit or vertical fit captured the alignment of HR practices with the needs of the business. By acknowledging the various postures that firms establish vis-à-vis their environments, researchers began addressing the possibility of contingency perspectives in HR strategy. Much of the researcher on HR strategies during this period focused on matching HR practices with various generic business strategies (Delery and Doty, 1996: Jackson, Schuler, and Rivero, 1989). Miles and Snow (1984) were first one to develop a typology of competitive strategies and then extended the external fit model to include HRM strategies that were appropriate under each condition. Figure I.

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Business Strategies Business strategy can be thought as a set of decisions about the direction of a firm. Strategy is a diverse field that can be divided into roughly two main strands of research: Process and content (Rumelt et al., 1991). The former focuses primarily on formulation and implementation while the latter focuses primarily on design. Within strategy content, many models based e.g. on economics, sociology, and organization theory have been applied in research. No single model or theory has found universal acceptance as a paradigm for strategy research, and, as noted by Rumelt et al. (1991), due to the applied and eclectic nature of strategy, it is highly unlikely that strategy will be a branch of e.g. applied economics as the dominant paradigm. Armstrong (2000) has stated that business strategies set the agenda for HR strategies in the areas of HR mission, values, culture, style, organizational philosophy and approach to the management of people, top management as a corporate resources, skills acquisition and development, high-commitment management and high-performance management.

Miles and Snow’s Business strategies

For this literature review the business strategies of Miles and Snow have been focused for selecting and implementing HR strategies. Miles and Snow developed a theory that there are four types of business-level strategies, named as defenders, prospectors, analyzers and reactors, which adapt different organizational characteristics to fight in the competing world for gaining competitive advantage. Their theory holds that in order to be superior, there must be a clear and direct match between the organization's mission/values (their definition), the organization's strategies (their basic strategy set), and the organization's functional strategies (their characteristics and behavior). In the view of Szilagyi and Schweiger (1984, pp: 629), Miles and Snow model addresses important issues of management coalitions in strategy implementation, the criteria for coalition membership, and the skills required of coalition members under different strategic conditions. The organizational adaptation (strategic response is complex and dynamic process. This process requires a cycle of adjustment that focuses on the simultaneous solution of three major issues: entrepreneurial (domain definition), engineering (technical), and administrative (structure-process alignment and innovation). Theses three issues are confronted within each of four global organizational adaptations defenders, prospectors, analyzers and reactors (Szilagyi and Schweiger 1984, pp: 629).

Conceptual framework of review

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Defenders:

Miles and Snow (1978) defined defenders as conservative business units, which are having preference to maintain a secure position in relatively stable product or service area instead of looking to expand into other fields. They compete primarily on the basis of price, quality, delivery or service. Defenders are more interested in protecting their market share, hence less interested in new product development or market development. They tend to be highly formalized and centralized, to emphasize cost control (Hambrick, 1983), and to operate in a stable environment. As their emphasis is on one core and stable product so they have single core technology, often vertically integrated, which is updated to maintain efficiency. Defenders discourage risk-taking behaviours because they prefer reliability to innovation. The structure is functional that’s why there is extensive division of labor and high degree of formalization. Planning is intensive not extensive.(1) In summary the organizational requirements of defender strategy unit are maintenance of stability, internal focus, limited environmental monitoring as main focus is on the one core product or service, centralized control systems, standardized operating procedures (Bird and Beechler, 1995), domain protection, and efficiency production (Szilagyi and Schweiger, 1984). As long-term employee attachment to the firm is needed so job security is another important requirement on the employee side (Gomez-Mejia, et al. 2003, pp: 33). Prospectors:

Prospector firms compete in broad product-market domains characterized by continual states of flux. Constant product-market innovation reflects a response to this dynamic domain, requiring the capacity to closely monitor external events (Miles and Snow 1978). These are those organizations, which are almost continually search for markets and they regularly experiment with potential responses to emerging environmental trends. Thus these organizations often are the creators of change and uncertainty to which their competitors must respond (Miles and Snow, 1978, p. 29). Gomez-Mejia, et al. (2003, pp: 33) has cited and acknowledged prospector organizations as growth and innovation oriented, development of new products, and eager the first in new product or market areas, even if some these efforts fail (Miles and Snow 1978). The prospector’s strategy is associated with flexible and decentralized organizational structures, complex products (such as computers and pharmaceuticals, and unstable environments that change rapidly. In addition, such organizations tend to seek new opportunities, focus on continuous development and believe in flexibility as cited by (Armstrong, 2000, pp: 69). The flexibility specifically technological flexibility (Szilagyi, A. D and Schweiger, D. M. 1984, pp: 629), constant state of change product line and rapid resource deployment (Bird and Beechler, 1995) In summary the basic strategy set of prospector includes broad domain, which is in a continuous state of development, monitors a wide range of environmental condition, trends and events, creators of change in their industries, growth primarily from new markets and new products but uneven and spurt-like growth. Planning is broad not intensive Main characteristics and behaviours include inefficiency organizations, changing structure and technology, dominant coalitions are marketing and R and D, frequent prototype production, multiple technologies, technologies in people not machines (1).

Analyzers:

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Miles and Snow have proposed the analyzer strategy as a unique combination of the prospector and defender types. They have put these two types of organization at opposite ends of a continuum of adjustment strategies, with the analyzer being somewhere in the middle of this continuum as a viable alternative strategy. Analyzer represent organizations that operate in relatively stable as well as changing product-market domains (Miles and Snow 1978). In their stable area, these organizations operate routinely and efficiently through use of formalized structure and processes. In their more turbulent areas, top managers watch their competitors closely for new ideas and then rapidly adopt those, which appear to be the most promising. In analyzers, management believes that a firm can compete not only in the early phase of the product development when the emphasis is on the uniqueness, but later on as well, when efficient mass production becomes necessary to be competitive (Miles and Snow, 1978). These organizations are less committed to stability and efficiency than are defenders (Hambrick, D.C. 1983). In summary the basic strategy set of analysis includes a mixture of products and market, some stable and other changing, successful imitation through extensive marketing surveillance, avid follower of change, growth normally occurs through market penetration and growth may also occur through product and market development. Planning is both intensive and comprehensive. The main characteristics and behaviours includes dual technology core and moderate efficiency, dominant coalition is marketing, applied research and production. Offer unique products at low cost (1).

Strategic HRM

Strategic HRM refers to the overall direction the organization wishes to pursue in achieving its objectives through people. Strategic HRM addresses broad organizational concerns relating to changes in structure and culture, organizational effectiveness and performance, matching resources to future requirements, the development of distinctive capabilities, and the management of change. It is concerned with both human capital requirements and the development of process capabilities such as the ability to get things done effectivelyA firm’s deliberate use of human resources to help it gain or maintain an edge against its competitors in the market place. The grand plan or general approach an organization adopts to ensure that it effectively uses its people to accomplish its mission (Gomez-Mejia, et al. 2003, pp: 2).Strategic human resource management has been defined as: All those activities affecting the behaviour of individuals in their efforts to formulate and implement the strategic needs of the business. (Schuler, 1992)Wright and McMahan (1992) defined Strategic HRM as:The pattern of planned human resource deployment and activities intended to enable the firm to achieve its goals.Strategic HRM is an approach to making decisions on the intentions and plans of the organization concerning the employment relationship and its recruitment, training, development, performance management, reward, and employee relations policies and practices. It is an essential component of corporate and business strategy. According to Hendry and Pettigrew (1986), SHRM is seeing the people of the organization as a ‘strategic resource’ for the achievement of ‘competitive advantage’.

Strategic HRM and HR strategies

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The term ‘strategic HRM’ and Hr strategies are often used interchangeably, but a distinction can be made between them. (Armstrong, 2000). Strategic HRM can be regarded as a general approach to the strategic management of human resources in accordance with the intentions of the organization on the future direction it wants to take. It is concerned with longer-term people issues as part of the strategic management processes of the organization. What emerges from this process is a stream of decisions over time that forms the pattern adopted by the organization for managing its human resources and defines the areas in which specific HR strategies need to be developed. It will deal with macro-concerns about structure, values, culture, quality, commitment, performance, competence and management development (Armstrong, 2000). HR strategies will focus on the specific intentions of the organization as to what needs to be done and what needs to be change. The issues with which these strategies may be concerned include ensuring that the organization has the people it needs, training, motivation, reward, and flexibility, team-working and stable employee relations. These are the issues that facilitate the successful achievement of the business strategies (Armstrong, 2000). To sum up, it could be said that the relationship between strategic HRM and HR strategies is comparable with the relationship between strategic management and corporate or business strategies. Both ‘strategic HRM’ and’ strategic management’ are terms describing an approach that may be adopted by top management and focuses on longer-term issues and setting the overall directions. HR and corporate/business strategies can be outcomes of this approach, which specify in more detail the intentions of the organization concerning key issues and particular functions or activities. (Armstrong, 2000)

HR Strategy

Why are people more important today? What is it about HR issues that bring them into a discussion of strategic management? Art of the answer to these questions has to do with shifting priorities and perspectives about competition and firm advantage. (Hitt et al, 2005) Conner and Prahalad (1996) has pointed out that as theorist of strategic management turn inward toward resource-based and knowledge-based view of the firm, where competitive advantage increasingly resides in a firm’s ability to learn, innovate and change, the human element becomes increasingly important in generating economic value. Armstrong, (2000) has identified three eras in research and practice that were defined by particular sets of assumptions and perspective about managing people for competitive advantage. Each of these eras of HR strategy had their parallels in strategic management. During the era of person-job fit, HR activities were focused on establishing the levels of efficiency and employment stability required in firms pursuing strategies of expansion and vertical integration. During the era of systematic fit, HR strategies focused on the internal consistency among HR bundles and then linked them vertically with the requirements of strategy. Instead of focusing on the individual practices in isolation, this HR strategy paradigm placed a premium on developing synergies inherent in the overall system. Today’s emerging HR paradigm reflects an era of strategic management that emphasizes knowledge-based competition. HR systems are being designed to develop and reinforce idea of intellectual capital and knowledge management that propel strategy formation. In a conceptual model for strategic HRM the key argument is, that the fit between firm strategy and HRM strategy is determined by (matching hypothesis) task characteristics of the strategy type and internally, consistent HRM practices. (Becker, et al, 2001)When talking and exploring Miles and Snow (1978) business strategies, there are different HR strategies with respect to each business strategy. In the literature different name of HR

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strategies are found but representing almost the same activities and requirements, which are achieved through different HR choices or practices, for defender, prospector and analyzer. Carroll (1991) and Schuler and Jackson (1987) defined three kinds of HR strategy. He pointed out Accumulator, utilizer and facilitator HR strategies. Bird and Beechler, (1995) has referred the Carroll’s (1991) definition of accumulator. An accumulator strategy is based on maximum involvement of employee’s skills. Under this strategy the firm acquires human resources latent potential and develop that potential over time in a manner consistent with the needs of the organization. In this strategy, employee abilities, skills and knowledge is developed according to the requirement of the organization and time. A utilizer strategy is predicted on minimal commitment and high skill utilization. It seeks to deploy the human resources of a firm as efficiently as possible through acquiring and dismissing personnel based on short-term needs, and matching employee skills to specific task requirements.(Schuler and Jackson, 1987, Carroll’s 1991). Finally, a facilitator strategy is found on generating new knowledge and new knowledge creation. Under this strategy the firm acquires self-motivated personnel and encourage personnel to develop their own skills and knowledge, which they and the employer believe are important. This strategy facilitate well coordination between accurate placement and flexible team structures.(Schuler and Jackson, 1987, Carroll’s 1991) Andersen, et al. (2006) has presented HR architecture profiles, which they have claimed that these were internally consistent and, also fit with the strategy types. Borrowing the distinctions between organic and mechanistic from the organizational design literature, they argued that defenders should employ HR architectures that are mechanistic in their design while prospectors should employ HR architectures that are organic in their design. They claimed that analyzers occupy a middle ground between the two. In order to achieve internal consistency, the different elements of the HR architecture should be characterized by being “organic” or “mechanistic”. In their view, the overall focus of organic HR systems is to meet demands for change, skill utilization, and growth while the overall focus of mechanistic HR systems is to meet the demands for operational results, stability and skill enhancement. The characteristics and requirements according to each business strategy are almost same in the (Anderson et al. 2006) HR strategies and Schuler and Jackson, (1987) and Carroll’s (1991) HR strategies. Similarly, Porter (1980) had suggested three generic strategies that are known as cost leadership, differentiation, and focus in literature. Each business strategy has its own characteristics but many researchers have identified their relationship with other business strategies. Kim and Lim (1988) have mentioned in their article that they had selected Porter’s business strategies for three reasons one of them was,“Porter's types bear some relationship to other strategy categorizations in the literature, as Miller and Friesen suggested: "For example, Miles and Snow's (1978) prospectors and Miller and Friesen's (1978, 1984) SB adaptive firms differentiate via product innovation. Hambrick (1983a), Dess and Davis (1984), and Henderson (1979) have all discussed cost leadership, a strategy often used by Miles and Snow's (1978) defenders. Miller and Friesen’s (1984) niche innovators pursue a focus strategy" (1986a: 38)”For the this review, above mentioned three Schuler and Jackson, (1987) and Carroll’s (1991) HR strategies have been focus, which will be reviewed in the alignment with the business strategies with the help of six strategic HR choices or dimensions. Strategic HR Choices

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A form’s strategic HR choices are the options it has available in designing its human resources system. Choices are strategic to the extent that they affect the firm’s performance either favorably or unfavorably in the long run. (Gomez-Mejia, et al., 2003, pp: 25) The main preference in the SHRM literature has been a unitary index that contains a set (though not always the same set) of theoretically appropriate HRM practices derived from prior work (Arthur, 1992). Furthermore, notion of alignment and fit are common themes in the conceptual literature (e.g., Cappelli and Singh, 1992; Jackson and Schuler, 1995; Ulrich and Lake, 1990;). As mentioned above, Huselid and Becker have done a substantial amount of research on developing a comprehensive firm-wide measure of an organization’s HRM system. They found that a high performing HRM system (termed High-Performance Work System) has a positive effect on firm performance. Becker and Huselid (1998, Becker, Huselid and Ulrich 2001) reviewed their past research on HRM systems and ended-up presenting typologies of four HR architectures. The four HR architectures are based on a cluster analysis comparing forty characteristics describing the structure of the overall HRM strategy. Twenty-four of the characteristics regarded the HRM System (selection, appraisal, development, compensation, communication, etc.). The rest of the characteristics (Implementation Alignment) focused on other distinctiveness that would be expected to facilitate the implementation of a High-Performance Work System. The four architectures embraced the ability of HRM professionals to effectively manage different element of the HR system, the alignment between the HRM system and the larger firm strategy, the clarity and communication of the firm’s mission, and the leadership style of senior management. Based on literature studies of strategic human resource management (SHRM), six dimensions of SHRM (e.g. Becker et al., 2001) have been identified. These dimensions are studied in accordance with each business strategy. These are listed in Table 1 below. Gomez-Mejia, et al., (2003) has referred continuum of strategic HR choices, and along which three things should be kept in mind. First, the list of strategic HR choices in Table II. is not comprehensive. Second, many different HR programs and practices may be separately or together to implement each of these choices. For example, if a firm chooses to base pay on performance, it can use many different many programs to implement this decision, including cash awards, lump-sum annual bonuses, raises based supervisory appraisals, and an employee-of-the-month award. Third, the strategic HR choices listed in Table II. represents two opposite poles on a continuum. Very few organizations fall at these extremes. Some organizations will be closer to the right end, some closer to the left end, and others closer to the middle. Its important to choose to set the strategic HR on the opposite poles of a continuum for this literature review as two business strategies of Mile and Snow’s, Defender and Prospector, are also on the each side of the continuum of organizational characteristics. HR strategies for Analyzer are placed some where in the middle or center of the continuum.

Work Flows:

Workflows refer to the ways tasks are organized to meet production or service goals. Organizations face several choices in what they emphasize as they structure work flows (Thompson and Strickland, 1993). They can emphasize: getting work done at minimum cost or innovation, encouraging creativity, exploration and new ways of doing things, even though this may increase production costs, Control (establishing predetermined procedure) or flexibility (allowing room for exceptions and personal judgment), explicit job descriptions in which each job’s duties and requirements are carefully spelled out) or broad job classes in which employees perform multiple tasks and are expected to fill different jobs as needed,

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and finally, detailed work planning in which processes, objectives and schedules are laid out well in advance or loose work planning in which activities and schedules may be modified on relatively short notice, depending on changing needs (Gomez-Mejia, et al., 2003, pp:27).

Staffing:

Staffing refers to the emphasis an organization places on the recruiting and screening of potential employees. When an organization devotes many resources to recruiting and selection (controlled for size of course), it is likely that it will run fewer risks of selecting poor performers. (Andersen, et al. (2006). Staffing encompasses the HR activities designed to secure the right employees at the right place at the right time. Organizations face several strategic HR choices in recruiting, selecting and socializing employees, all part of the staffing process (Gomez-Mejia, et al., 2003). These include: promoting from within versus hiring from outside, empowerment immediate supervisors to make hiring decisions versus centralizing these decisions in the HR department, emphasizing a good fit between the applicant and the firm versus hiring the most knowledgeable individual regardless of interpersonal consideration and lastly hiring new workers informally or choosing a more formal and systematic approach to hiring (Gomez-Mejia, et al., 2003).

Employee Separation:

Employee separations occur when employees leave the firm, either voluntarily or involuntarily. Some strategic choices available to ht e firm for handling employee separation are: use of voluntary inducements such as early retirement packages to downsize a work force (Balkin, 1992) versus use of layoff, impose a hiring freeze to avoid laying off current employees versus recruiting employees as needed, even if doing so means laying off current employees, providing continuing support to terminated employees perhaps by offering them assistance in securing another job versus leaving laid-off employees to fend for themselves (Richard, 1999) and finally, making a commitment to rehire terminated employees if conditions improve versus avoiding any type of preferential hiring treatment for ex-employees (Gomez-Mejia, et al., 2003, pp:27).

Performance Appraisal:

Managers assess how well employees are carrying out their assigned duties by conducting performance appraisals. It consists of identification, measurement and managing of human performance in organizations (Banks and Roberson, 1985). Some strategic HR choices concerning employee appraisals are: developing an appraisal system that is customized to the needs of various employee groups for example, by designing a different appraisal form for each job family versus using a standardized appraisal system throughout the organization, using the appraisal data as a developmental tool to help employees improve their performance versus using appraisals as a control mechanism to weed out low producers, designing the appraisal system with multiple objectives in mind such as training, promotion and selection decisions versus designing if for a narrow purpose such as pay decisions only (Bernardin et al. 1995) and finally, developing an appraisal system that encourages the active participation of multiple employee groups for example, supervisor, peers and subordinates versus developing one that asks solely for the input of each employee’s supervisor. (Gomez-Mejia, et al., 2003, pp: 28)

Training and Development:

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Training and career development activates are designed to help an organization meet its skill requirements and to help its employees realize their maximum potential. Delaney and Huselid (1996) has supported that HR practices that improve the general skills of employees, their motivation and the structure of work are positively related to the performance of the organization. Valle, R. et al (2000) concluded that strategic training is contingent on business strategy and the characteristics of the work processes. They argued that it couldn’t be concluded from the study that pre-existing formulas cannot determine training policies. Some of the strategic HR choices pertaining to these activities are: choosing whether to provide training to individuals or to teams of employees who may come from diverse of the firm, deciding whether to teach required skills on the job or rely on external sources for training, choosing whether to emphasize job-specific training or generic training and finally deciding whether to hire wage people from outside the firm who already have the required talent (buy skill) or to invest resources in training the firm’s own lower-wage employees in the necessary skills (make skill). (Gomez-Mejia, et al., 2003)

Compensation: Compensation is the payment that employees receive in exchange for their labor. The package of quantifiable rewards an employee receives for his/her labors. It includes three components: Base compensation, pay incentives and indirect compensation/ benefits (Milkovich and Newman, 1999). Some of the strategic HR choices related to pay are: providing employees with a fixed salary and benefits package that changes little from years to year and therefore involves minimal risk versus paying employees a variable amount subject to change, paying employees on the basis of the job they hold versus paying them for their individual contributions to the firm, rewarding employees for the time they have spent with the firm versus rewarding them for performance, and finally, centralizing pay decisions in a single location such as the HR department versus empowering the supervisor or work team to make pay decision (Gomez-Mejia, et al., 2003).

Strategic HR Choices Definitions

Work Flows: Workflows refer to the ways tasks are organized to meet production or service goals. (Gomez-Mejia, et al., 2003).

Staffing:

Staffing encompasses the HR activities designed to secure the right employees at the right place at the right time. (Gomez-Mejia, et al., 2003) Refers to the resources an organization devotes to recruiting and screening potential employees (e.g. Delaney and Huselid 1996)

Employee Separation Employee separations occur when employees leave the firm, either voluntarily or involuntarily (Gomez-Mejia, et al., 2003)

Performance Appraisal

Managers assess how well employees are carrying out their assigned duties by conducting performance appraisals. It consists of identification, measurement and managing of human performance in organizations (Banks and Roberson, 1985)

Training and Development

Training and career development activates are designed to help an organization meet its skill requirements and to help its employees realize their maximum potential. (Gomez-Mejia, et al., 2003)

Compensation:

Compensation is the payment that employees receive in exchange for their labor. The package of quantifiable rewards an employee receives for his/her labors. It includes three components: Base compensation, pay incentives and indirect compensation/ benefits (Milkovich and Newman, 1999).

Table I. Definitions of HR strategic choices.

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Work Flows Efficiency Innovation Control Flexibility Explicit job descriptions Broad job classes Detailed work planning Loose work planningStaffing Internal recruitment External recruitment Supervisor makes hiring decision HR department makes hiring decision Informal hiring of new employees Formal hiring of new employees Emphasis on “fit” of applicant with Emphasis on applicant “technical” firm culture qualifications and skillsEmployee Separation Voluntary inducements to retire Layoffs Hiring freeze Recruit as needed Preferential rehiring policy No preferential treatment Continuing support for terminated Letting laid-off workers fend for employee themselvesPerformance Appraisal Customized appraisals Uniform appraisal procedures Developmental appraisals Control-oriented appraisals Multipurpose appraisals Narrow-focused appraisals Multiple inputs for appraisals Supervisory input only (supervisor, peers, subordinates) Training and Development Individual training Team-based training On-the-job-training External training Job-specific training Generic training emphasizing flexibility “Buy” skills by hiring experienced “Make” skills by providing training to less workers at higher wage experienced workers hired at a lower wage

Compensation Fixed pay Variable pay Job-based pay Individual-based pay Seniority-based pay Performance-based pay Centralized pay decisions Decentralized pay decisions

Table II. Source: Gomez-Mejia, L. R, Balkin, D. B., Cardy, R. L. (2003). Managing human resources. Eastern Economy Edition, third edition.

Matching / integration of business strategies and HR strategies

According to Miles and Snow (1984) view the human resource practices are part of the systems and processes that are expected to be consistent with strategy. Presumably, HR polices influence employee behaviour. If different employee behaviours are required to implement different strategies, then HR policies should systematically vary with organizational strategy. Strategic integration is necessary to provide congruence between business and human resource strategy so that the latter supports the accomplishment of the former and, indeed,

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helps to define it. The aim is to provide strategic fit and consistency between the policy goals of human resource management and the business. Fombrun et al (1984) were first researcher who originally pointed out that the aim of strategic integration was to provide strategic fit and consistency between the policy goals of human resource management and the business. They stated thatJust as firm will be faced with inefficiencies when they try to implement new strategies with outmoded structures, so they will also face problems of implementation when they attempt to effect new strategies with inappropriate HR system. The critical management task is to align the formal structure and the HR systems so that they drive the strategic objectives of the organization. HR strategies are different, however, in the sense that they are intertwined with all other strategies. The management of people is not a distinct function but the means by which all business strategies are implemented. HR planning should be an integral part of all other strategy formulations. Where it is separates, it needs to be closely aligned. Whereas Hitt et al (2005) has mentioned in his book that the integration of HR and business strategies is seen by some commentators as a main distinguishing feature of strategic HRM. Doubts have been cast by a number of commentators such as Storey (1993) on the extent to which such integration does take place, often on the grounds that integration is not an issue when there are no corporate strategies. This was not the case in any of the eight organizations covered by Armstrong and Long’s research. In all but two of them the HR strategies, in Walker’s (1992) terms, were fully integrated; in the remaining cases the strategies were ‘aligned’. As the Managing Director of ABC Distribution (Armstrong and Long, 1994) pointed out:Our HR strategy has to respond to our business strategy… The challenge for HR is to look at all the areas that encompass and make sure they are integrated into the main plan.The Director of Personnel of ABC Distribution recognized that:The development of HR strategies should be shared more widely with the business controllers. If we don’t do that we run the risk of not developing the consistent themes we need to have.But the Director of Finance was positive that: In terms of performance improvement the business and HR strategies are very closely linked. Productivity is a major area and the HR implication of pursuing these policies is critical. These, incidentally, were not the only positive contributions from Finance Directors. It was found by Armstrong and Long that, without exception, the eight finance directors were all fully aware of the significance of the HR perspective for their organizations, although they were obviously concerned with financial performance and budgets.On the basis of interviews conducted by Armstrong and Long (1994), Armstrong (2000) has explained the achievement of the integration of business strategies and HR strategies when:There are well- articulated business strategies operating in the context of a clear mission.There is a powerful driving force in the shape of commitment to certain values and overall strategies for change.The chief executive or managing director recognizes the contribution that people make to increase added value and achieving competitive advantage and ensures that people issues are fully taken into account at the time business strategies are being prepared.The other members of the top team generally share the views of their chief executive on the added value that can be created by considering HR and business issues simultaneously.The HR director is capable of making a full contribution to the formulation of business strategies as well as those relating to people.

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The integration of business and resourcing strategies is based on an understanding of the direction in which the organization is going and the determination of the numbers of people required to meet business needs, the skills and behaviours required to support the achievement of business strategies.(Beaumont, 1993). The impact of organizational restructuring as a result of rationalization, decentralization, delayering, mergers, product or market development, or the introduction of new technology_ for example, cellular manufacturing. Plans for changing the culture of the organization in such areas as ability to deliver, performance standards, quality, customer service, team working and flexibility, which indicate the need for people with different attitudes, beliefs and personal characteristics. These factors will be strongly influenced by the type of business strategies adopted by the organization and the sort of business it is in. these may be expressed in Miles or Snow’s (1978) typology of defender, prospector and analyzer organizations (Hitt et al, 2005).Taking into account Tyson and Witcher’s (1994) point out that you can only study HR strategy in the context of business strategies, the processes of formulating both business and HR strategies as identified in research conducted by Armstrong and Long (1994) in a number of companies, some of them will be discussed in next headings. Now question arises that whether HR strategies should be according to or consistent with business strategies or business strategies should be according to the HR strategies. In this context, Golden and Ramanujam (1985) suggests, one-way linkage and two-way linkage. In one-way linkage, a linage exists, though not highly integrated, following sequentially from a strategic business planning to HR, and HR is seen as a resource but not a strategic business partner. But in two-way linkage, information flows both to HR planners from business planners and vice-versa. A sense of reciprocity and inter-dependence exists in the relation. According to Miles and Snow (1984) view, the human resource practices are part of the systems and processes that are expected to be consistent with business strategy. Similarly, Armstrong and Long, (1994) pointed out that: “Our HR strategy has to respond to our business strategy… The challenge for HR is to look at all the areas that encompass and make sure they are integrated into the main plan.”. Tyson and Witcher’s (1994) point out that you can only study HR strategy in the context of business strategies. Gerstein and Reisman (1983) recommended a diagnosis of the “business situation” primarily in terns of the product life cycles as a precondition for matching HR characteristics to situational requirements. There is a widespread belief that HRM strategies are the dependent variables and the business strategy the independent variables in this relationship. The view is that HRM strategy should be in some sense follow business strategy.(Tichy et al, 1981;1986 Miller, 1989) In contrary to above opinions there are some researchers who recommend that business strategies should be in accord with the HR strategies. Like, Costa (1993) suggests that human resource practices contribute to business strategy development and implementation. Similarly, Waterman (1994), provided an important insight on the connection between strategy and effective management of people; he says people are the strategy. To remain competitive in a constantly changing environment, many organizations are making human resources a significant part of their long range business and strategic planning.(Niehaus and Price, 1991). According to Golden and Ramanujam’s (1985) two-way linkage, Nininger (1982) has suggested that human resource planning should be carried out at the same time as strategic business planning in a parallel process. He further adds that successful linking of HR with strategic business planning is dependent upon participation within and across the levels of organization. Lengnick-Hall,C. A., Lengnick-Hall, M. L. (1988) has clearly mentioned that integration should not be a unidirectional process from either perspective it undesirable

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consequences are to be minimized. Similarly, Kelly (1989) has mentioned that HR issues, internal and external, would be considered in the business planning process.

Business strategy/ HRM strategy/strategic HR choices:

Defender business strategy/ Accumulator strategy/strategic HR choices:

The HR strategies that best fit to defenders’ needs, categorized according to six major strategic HR choices. Top managers in this type organization are highly expert in their organization’s limited area of operation but do not tend to search outside their narrow domains for new opportunities." (Miles and Snow, 1978, p. 29). Firms with a defender strategy limit their search for new opportunities and instead, focus attention internally on ways to enhance organizational effectiveness (Miles and Snow, 1978). An accumulator HRM strategy, based on building maximum involvement and achieving skilled execution, serves defender needs because it focuses on providing skill development in an evolutionary fashion in accordance with the firm’s slowly evolved human resources needs (Bird and Beechler, 1995). Its concern is on the acquisition of those employees having latent potential. Once latent potential is acquired, the attention is then shifts to developing ability, skill and knowledge in ways that will serve company purposes (Andersen, et al. 2006). As defenders tend to be highly formalized and emphasize cost control so workflow follows the predetermined procedures through detailed work planning and explicit job description (Miles and Snow 1984), there is high level of employee participation on work issues (Schuler and Jackson, 1987) Defenders require standardized skills, and fewer professionals. Recruitment does not need to be as selective. Jobs are well described, easy to monitor, and outcomes are predictable (Andersen, et al. 2006). So, often the recruitment is internal and HR department makes the employee selection decisions. The process of hiring is formal and based on predefined lines. Employees are technical in their skills and abilities (Gomez-Mejia, et al., 2003). The firm searches for both human potential and personal fit and the relationship between employer and employee is expected to be long-term. So there is job security (Bird and Beechler, 1995). Relatively, egalitarian treatment of employees (Schuler and Jackson, 1987). Although the job of employees in the defender organizations is long-term and secure, so there is a use of voluntary inducement such as early retirement packages, imposing a hiring freeze to avoid laying off current employees, providing continuous support to terminated employees perhaps by offering them assistance in securing another job (Gomez-Mejia, et al., 2003). Performance appraisal follows uniform appraisals procedures and used as a control mechanism to weed out low producers. It is used for narrow focus of pay decisions only (Gomez-Mejia, et al., 2003). A recent study undertaken by Martell, Gupta and Carroll (1996) demonstrated the effects of different HR practices and business strategy on firm performance. Specifically, these researchers found that training has higher positive effects for firms adopting a cost control strategy (defender) than with innovation strategy (prospector). Training of employees for defender type organizations is extensive training to develop potential which, because it is directed at internal fit, is biased toward on-the-job training and the development of a skill set that is firm specific (Bird and Beechler, 1995, Marchington and Wilkinson, 1996). Organizations invest resources in training the firm’s own lower-wage employees in the necessary skills (‘make skills’) (Gomez-Mejia, et al., 2003) The emphasis on incentive compensations should be low (Andersen, et al. 2006; Gomez-Mejia, et al., 2003). The application of compensation and promotion policies are on seniority

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basis and fixed. Compensation policies emphasize job security (Bird and Beechler, 1995, Gomez-Mejia, 2000). HR department makes centralized pay decisions (Gomez-Mejia, 2000).

Prospector business strategy/ Utilizer strategy/strategic HR choices

Prospector firms are expected to employ a utilizer HRM strategy geared toward providing appropriated, readily available skills consistent with the companies’ constantly changing needs. Such an approach places minimal emphasis on employee commitment while trying to achieve high skill utilization. As a consequence, selection policies focus on closely matching skills to immediate task requirements (Bird and Beechler, 1995). Empowering immediate supervisors mainly do recruitment externally. Recruitment is need based. Great emphasize is given on the fit of applicant with culture. As hiring process is highly informal so there is a requirement of socialization of new employees (Gomez-Mejia, et al., 2003). Unstable environment of the prospector firm makes the recruitment sudden as well as employee separation in the form of layoffs (Richard, 1999) Prospector as focus on growth and innovation, and development of new products so it requires flexibility, which allows room for exceptions and personal judgment, in it work flow. Planning is loose so that activities and schedules can be modified on relatively short notice, depending on changing needs. (Andersen, et al. 2006, Gomez-Mejia, et al., 2003) Prospectors require that employees upgrade skills continuously and have high levels of expertise. High levels of training are required (Miles andSnow et al. 1978 b). The need for rapid deployment of resources in response to market development and innovation, reduces the emphasis on pre-planned training (Bird and Beechler, 1995) the need of adaptability of system in prospector business unit to the innovation and new market makes the process of training team based or cross-functional and uses external sources of training (Gomez-Mejia, et al., 2003). The view of employees as another resource of the firm and the emphasis on resource utilization and deployment encourage the development encourages the development of appraisal and reward system based on results (Kagono et al., 1985) As appraisal system is result oriented so there is need of customized appraisals which are used as developmental tool. As far as designing of appraisal system is concerned, it must be in accordance with the training, promotion and selection decisions. So that appraisal system encourages the active participation of multiple employee groups (supervisor, peers, and subordinates) (Gomez-Mejia, et al., 2003). Compensations is likely to be referred to the external labor market (Bird and Beechler, 1995, Gomez-Mejia, et al., 2003). As jobs are difficult to monitor, and outcomes are usually unpredictable so high emphasis on incentive compensation (Andersen, et al. 2006). So compensation is decentralized and rewards risk taking and performance (Gomez-Mejia, et al., 2003). Analyzer business strategy/ Facilitator strategy/strategic HR choices

Analyzers perceive the environment as slowly changing and are followers of change. Simultaneously they are operating in both stable and turbulent domains concern with existing areas and innovation also in new market opportunities. Through intensive and comprehensive planning this type of firm builds selectively on strengths, although new attractive segments to apply strengths are monitored closely (Andersen, et al. 2006). Encourage and support self development of abilities, skills and knowledge is in focus. The HRM unit mainly is concerned with coordinate between accurate placement and flexible team structures.

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Analyzers require professionals for managerial positions. Moderate selectiveness. A Facilitator strategy fits the organizational requirements of Analyzer firms because it accommodates the management of dual pressures imposed by an Analyzer strategy. The pursuit of new markets requires an infusion of new skills and talents into the firm, encouraging hiring from the external labor market (Bird and Beechler, 1995). Maintenance of existing product lines, by contrast, necessitates the internal development of employees and encourages the development of an internal labor market. Consequently, staffing policies will likely be a mix of both internal and external selection. Firms with a Facilitator strategy may seek to offset the potential schizophrenic outcomes of a mixed staffing policy by carefully recruiting employees with a desire for self-development (Gomez-Mejia, et al., 2003). By encouraging and supporting self-development, a firm can focus its activities more fully on the accurate placement of personnel and the design of flexible teams. Analyzers require experts in managerial and professional jobs. Training should be moderate. HRM unit plays the training and maintenance role appropriate to the defender strategy by using accurate placement and appraisal devices. For innovation developments, the unit plays a more developmental role by designing flexible and enriching team structures and processes. Most jobs are well described and easy to monitor. Managerial and professional jobs are an exception. Moderate emphasis is given on incentive compensation (Andersen, et al. 2006).

Conclusion

The conclusion of this review is present in this statement of Miles and Snow (1984), that human resource practices are part of the systems and processes that are expected to be consistent with business strategy. The aim of this review was to have an overview of a larger proportion of the conceptual landscape between HRM and strategy, with the purpose of making the notion of fit more explicit both in term of internal consistency of HRM systems, and their fit with the strategy of the firm. The strategic HR choices individually or in bundle, do not just play a role in the success of any firm by aligning particular business strategy. There have been a number of attempts at producing universally applicable lists of best practices, which, it is assumed, will be effective in improving performance. However, there is no evidence that a particular bundle is superior to any other bundle in all circumstances. Miles and Snow (1978) have argued that their typology does not imply one best business strategy, any of the three strategy types can lead to high firm performance. Consequently, no distinction is made as to whether or not one particular ideal match will outperform another; rather it is proposed that firms with appropriate matches will outperform firms with mismatches.

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Internet Link(1). www.kulzick.com\ Miles and Snow Organizational Types/ (accessed 12 September 2008).STOCK EXCHANGE – A KEY INSTITUTE IN ECONO-FINANCIAL STABILITY

Hira NizamaniIsra University Hyderabad

hira.nizamani@isra.edu.pk, hiranizamani@gmail.com

Shiffa MariamIsra University Hyderabad

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shiffamariam@isra.edu.pk,shiffamariam@gmail.com

Abstract

Purpose The purpose of the study is to analyze the existence of non linearity of risk and return involved in the stock market. An attempt has been made to model the volatility of stock returns and to test volatility of the Pakistani stock market.

Design/ Methodology/Approach primarily the research mainly focuses on gathering empirical data through statistical and mathematical models to analyze trends of non- linearity in Stock Market. For this purpose sample data was collected from various stock trading companies and KSE monitor itself. Then data was tested using the Capital Asset Pricing Model (CAPM). While along with this data was also collected for theoretical comparison through questionnaire with a sample size of 200. Later the data was used to draw conclusions and for theoretically contrasting the mechanism and vulnerability of the KSE with other two the exchanges the decisive factors were the products, mechanism, technology, and governance.

Findings KSE is very susceptible to the change in the macro environment. As an emerging market KSE continues to grow and assume a more outstanding role in the economy, the regulatory framework evolves along side, although with delays and sub-optimal solutions characteristic of political processes. The regulatory development takes place, in many cases, as a response to financial crisis, scandals and scams in an effort to restore the investors’ confidence in the markets and institutions. Since informational imperfections are inherent in financial markets, a basic task of a financial regulator is, therefore, enhancing the revelation of information and preventing the misuse of asymmetric or insider information. Another feature of the financial markets is the presence of network effects, where value to any one individual increases with the increase in the number of participants. The resulting herding behavior can lead to excessive volatility and sharp swings in the stock prices. Another aspect of the KSE that is common in emerging markets – a skewed size-distribution of stocks traded.

Research Limitation The data used for theoretical comparison is hard to achieve in real life as KSE is still dominated by big brokerage houses. But still measures can be taken by SECP to change this situation. Also the future returns are unpredictable in both short and long run thus even empirical methods used can not guarantee the predictions. On the contrary further empirical tests can be conducted to comprehend the extent to which KSE is susceptible to the political and economical changes in the Pakistan’s macro environment.

Practical Implications The key implications of these findings for policy makers in Pakistan include assurance of proper governance of KSE and constant advancements in the technology for investors and management. The findings also suggest the SECP can take measures to improve investor confidence by reduced imperfect information scenario, and timely responding to maintain investor confidence.

Originality/ Value This study not only focuses empirical but also focuses on theoretical analysis aspects of KSE that led to its vulnerability. The previous studies either focused on empirical or theoretical analysis. Through the study we have tried to provide a shock prove mechanism for KSE through advancements in stable products, technology and proper governance.

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Keywords KSE vulnerability, KSE governance, CAPM, SECP, political susceptibility

Paper type Research paper

1. Introduction

For a country’s well being and reputation it is important to have a strong and well governed financial system. A typical Capital markets comprises of stock and bond market. The stock exchange which is a formal market facilitating the trade of financial assets can be defined as organized market for buying and selling financial instruments known as securities, which include stocks, bonds, options, and futures. [1] Its impact on the financial stability as well as economic stability is observed in form of creating capital for business sector, helping in good corporate governance, gives companies an opportunity to expand product lines, increase distribution channels, hedge against volatility, increase its market share, or acquire other necessary business assets.

It gives people a chance to buy shares and therefore become part-owners (shareholders) of profitable enterprises, the stock market may helps to reduce large inequalities of income distribution. It also helps the government to finance infrastructure projects through selling of bonds publicly, in economic recession, depression, or financial crisis which eventually advances to a stock market crash.

Like any other third world country, Pakistan, also has a developing financial system. [2] The Pakistani stock market comprises of three stock exchanges, which are Karachi Stock Exchange (KSE), Lahore Stock Exchange (LSE), and Islamabad Stock Exchange (ISE), respectively. KSE in 2002 was pronounced to be one of the top performing markets around the world. But, this is not always the case KSE in truth is highly speculative, broker dominated, and has a narrow product offerings. But despite, this at current valuation, it does offers domestic and foreign investors options attractive enough to generate sustainable market capitalization.

2. REVIEW of LITERATURE

Aaj TV (2008) broadcasted the she clarified that the central bank's Prudential Regulatory Framework is largely supportive of exposures to the stock market, and that within the existing regulations, banks have the aggregate capacity of an incremental amount of Rs 40 billion to invest in the stock market, if they wish to do so. She said that Pakistan stands out in Asia for allowing foreigners to own 100 percent of any asset in any sector, and are not subjected to any ownership limits or discriminatory taxes on dividends in the secondary market. At current valuations, the stock market offers an attractive option to investors, both domestic and foreign. She said, the stock markets should do more to mobilise resources for the industry by encouraging more and more corporate listings, as the banking sector is still unduly burdened with meeting the bulk of the financing requirements of the economy. [3]

Muhammad Aslam (2007) has scrutinized that Stocks last week managed to recover from the early week’s shock of the Lal Masjid operation but late reports that the seminary was cleared again lured investors to the market amid an actively traded week as volume soared to new year’s high of over half a billion shares, reflecting that both genuine and speculative buying was at its peak. Leading shares witnessed a fresh price flare-up under the lead of oil, banks, cement, and blue chips on all other counter owing to shortage of their floating stocks, while losses on the other hand were mostly fractional.

Karachi (AFP) Three years ago it was the world's best performing index, and Pakistan's stock market has grown more than tenfold since the end of 2001. But the astronomical increase has prompted stakeholders and analysts to wonder whether the Karachi Stock Exchange (KSE) can sustain that growth, while lax regulation has raised questions about money laundering. The Pakistani market is a sheer speculative market and governed by some groups or influential individuals having inside information .[4]

Farhan Bokhari (2007) has described that Pakistan's leading stock market, the Karachi Stock Exchange (KSE), has so far paid little attention to the country's emerging political uncertainty as the government of its military ruler, General Pervez Musharraf, faces a rising set of protests from the opposition parties. The stock market once again ended the week on a positive note with share price gains, although there were opposition backed calls against the government in the latest session of the Pakistani parliament in Islamabad. [5]

3. COMPARATIVE ANALYSIS Of KSE AND WORLD MARKETS

The focus of this part of the paper is of comparative analysis between three global stock exchanges with the parameters of mechanism, products, technology. The primary stock exchange is a U.S, New York based stock exchange branded as “Big Board”. The New York Stock Exchange trades in a continuous auction format. Most of the time buyers and sellers organize in a market that provides competent price discovery in an auction environment. The human interaction and expert judgment as to order execution differentiates the NYSE from fully electronic markets.[6] In a comparative analysis based of the first parameter of products, it is inferred NYSE has a vast variety of products available to its investors . This includes NYSE equities, bonds, derivatives, and equities and bonds classified on the basis of technology used in the transactions. Unlike, the emerging markets (specifically Asian financial markets) New York Stock Exchange does not show any major issues.

The second stock exchange is a London based stock exchange “London Stock Exchange”. LSE is one of the world’s largest exchanges. This market is integrated market of financial instruments, where the sub markets are segregated on the basis of financial securities traded in them. The first sub market is main market is principal market for larger, and well established companies. This market provides a world-class listing and trading environment for securities.

The second sub market is Alternative Investment Market (AIM) premeditated for the companies with short track record of rising capital. The third market is Professional Securities Market (PSM) that enables companies to raise capital through the issue of specialist securities – such as debt and depositary receipts – from professional or institutional investors. The products line ranges from ordinary shares to derivatives, from exchange traded funds and commodities to global depository receipts.

Fig. I Comparative performance of KSE

KSE on the other hand, is the main stream capital market of Pakistan. Since its inception is has observed surges and crashes, but yet maintain to capture the eyes of investors domestically and in foreign. KSE unlike, NYSE and LSE does not provide wide range of products to its investors but does provide them with securities profitable enough to serve

as an incentive to remain in the market. In terms of technology KSE still lags behind as it does not offer full flag real time buying and selling, but it does give real time monitoring of the transactions taking place of the floor, along with it does provide Risk management System (RMS) for the investors. when we compare the governance of KSE, it is observed that KSE is broker dominated institution, which creates a negative synergy, as at time these broker representative indulge themselves into activities that favor big brokerage houses rather then small scale investors (reference to stock market scam of 2005).

4. CONVICTION BEHIND THE REFORMING OF FINANCIAL MARKETS IN PAKISTAN

It’s been 61 years approx: 6 decades since the inception of Pakistan, but still Pakistan’s financial market is an emerging market even amongst the Asian Financial Markets. Even India the neighbor country with which Pakistan not only shares the international territorial borders but also the bloody history of independence and culture is far ahead of it in the race of emerging markets. Conventionally the means of finance in the developing countries including Pakistan has been dominated by informal finance, consisting primarily of loans from family members or friends or banks. Such practices have had the advantages of low transactions costs, responsiveness to borrowing need frequently for emergency consumption purpose and low rates of non-repayment. Nevertheless, this has greatly limited the scope for financial intermediation due to the largely personalized nature of the contacts. Evidently, economies grow, and these arrangements need to be diversified, in fact need to be supplemented by the services that only formal institutions like commercial banks and capital markets can provide.

In the preliminary stages of development of the modern, financial sector Pakistan, have chosen the path of controlling interest rates, directing and rationing the allocation of credit to priority sectors and using the banking system for inexpensive funding of government activities. Resultantly undermining the process of financial development and leading to ‘financial repression.’ Savings depressed and other distortion have been created, including the strong preference for debt versus equity financing of long term investment in the presence of regime of low interest rates.Recognition of these problems had led Pakistan, to pursue the path of financial liberalization. Characterized by extensive deregulation of interest rates, concessionary credit schemes have been phased out, government owned banks have been privatized, terms of government borrowing have been linked more closely to market rates and permission granted for the establishment of new types of financial institutions (investment banks, leasing companies, mutual funds, etc.) in the private sector and removal of restriction on foreign portfolio investment.

Four main ideas led to the development of modern financial system. First, the privatization of public sector units gave a boost to the capital market. Second, the capital market was opened to foreign investors through its internationalization. Third, the command economy were transforming into the capitalist system. Finally, the tremendous increase in the services for trading, settlement and depositing system and the introduction of automation and computerization of stock exchanges accelerated the emergence of capital market.

5. PROBLEMS FACED BY CAPITAL MARKETS BEFORE CDS

The capital markets of Pakistan have witnessed a substantial growth leading to an increase in the trading volume. The custody and safe keeping of physical certificates required maintenance of huge vaults by the individuals and institutions and the physical settlement of certificates was no longer feasible. Moreover, the manual system was also

plagued by lengthy delays, risks of damage, forgeries and considerable time and capital investment. The Members of the Stock Exchange, Investors, Issuers of Securities, faced problems such asincreased volume of book-keeping and paper work, problems in settlement due to increased volume, prolong share transfer procedure taking up to 45 days new issues the issuers more than 2 months required to dispatch certificates. Increase risk of damaged, lost, and duplicate certificates. Lengthy procedure involved in pledging for physical assets securities.

6. POLITICAL INSTABILITY AND KSE SUSCEPTIBILITY KSE -100 even after 60 years of independence remains susceptible to the changes in the political environment. Pakistan’s political history has faced a lot of setbacks having a direct depressing impact on its economy and financial stability. KSE was very much effect by the change of regime at the end of FY 1999, when Former PM Nawaz Sharif ruling was overthrown by General Pervaiz Musharraf. Then in 2001 the 9/11 attacks caused a negative impact on Pakistani Stock Market resulting in the decease of KSE index, more than 90 per cent of the money that Pakistani expatriates sent to Pakistan after 9/11, made its way into consumption and real estate, instead of Pakistan’s booming stock market. This has created a property bubble that may burst any time.

Fig II: KSE Surges and Crashes due to Political events. Later, the index witnessed bullish again as the result of strengthened U.S – Pak relations in war against terror as President Pervez Musharraf resolute to support the war against terror in neighboring Afghanistan and shortly Iraq. [Fig. VI - 2]

Fig III: KSE volatility Pattern

This in turn helped attract FPI from overseas to pile into the country's stock market. State-run companies got listed on KSE, auxiliary boost investor confidence. Thus, Karachi Stock Exchange (KSE) became one of the hottest speculative, rising over 10-fold in just 42 months.

Later with speculation on Musharaf – Benazir Bhutto (Late) deal the market. Market again responded negatively dropping after the assination of Ms Bhutto. But later jumped gaining some points as Musharaf stepped down. Other events that contributed towards the surge and crash of KSE are new economic agenda, Indo- Pak Tension, improving economy, improving Indo – Pak relations, S&P’s Upgrading of Pakistan’s Rating, Change of PM, Badla Scam, etc. All these events stand as witness to the vulnerability of KSE in spite of till increasing market indicators. In Pakistan, these types of events take place almost regularly; it has become difficult for the market to react correctly to the true effect of the event. Or many times, the market just fall short to these events because of its being still undeveloped.

7. RISK, AND RETURN IN KSE

7.1.1Capital Asset Pricing Model

The capital asset pricing model (CAPM) has played a central role in financial practice. In this paper are using it as through its implementation it is simpler to analyze and predict the susceptibility of a stock within the market to certain events. In this model, the focus will be on (i) analyzing the effects of political/ social/ economic events in the volatility of randomly chosen 5 stocks from KSE, (ii) comparison f risk and sensitivity, (iii) numerical depiction. In the efficient capital markets the investors would take on extra risk only if they are compensated in the form of extra return. The market only compensates the investor to the extent that he will receive extra return for extra market risk he takes on by investing in a new stock. However, the market will not pay the investor any extra return for taking on unnecessary risk in the form of company’s own risk. Therefore, it is best for investors to act rationally and to maintain diversified portfolios of many stocks and in this manner they can eliminate the company’s own risk and they can make investments in stocks at a lower required rate of return. Market portion of risk can be represented through the ‘Beta’ coefficient and it is the corner stone for Capital Asset Pricing Model (CAMP).

7.1.2 Methodology

Market carries Risk. It moves up and down because of macroeconomic factors (inflation, general interest rates) and political changes. Therefore the market has some expected rate of return which changes with time because of this there is possibility of different outcomes. There are no fully diversified portfolios in reality. The CAMP based on the promise market Beta to be Equal to + 1.0. We can then look at the 5 different beta and compare them with the markets. Our approach for calculating the beta will be straight forward. We will assume that we analyze the movements in KSE index for a period of 1 year and we also analyze the price movements for the stocks in KSE for the same year. We pick the risk free rate of return as the starting point for the changes in the expected return. Beta represents the risk of stock relative to the return of the market and in terms of risk free rate of return we can define the Beta as the expected rate of return for a particular stock minus risk free rate of return divided by the expected rate of return for the market minus risk free rate of return. We use historical data of expected rate of return and we graphed it against changes in the overall market return.

7.1.3 Risk and Sensitivity

As mentioned earlier the model the risk free rate of different securities that are, Pakistan oil Field, Hub Co, Pakistan State Oil, OCDCL, and Daira Ghazi Khan Cement Company. Under the current political situation the KSE over all return is low and due to this the following calculation are resulted for the portfolio beta.

Portfolio Beta =

Table VII- 1: Portfolio Beta

Beta rm Portfolio Beta

Pakistan oil Field

1.012 14.8% 0.2024

Pakistan State Oil

1.1 13% 0.22

Daira Ghazi Khan Cement Company.

0.97 11% 0.194

OCDCL 1.4 14% 0.28Hub Co -2 20% -0.4Total 0.4964

Table I : Beta Vs Market Return

Fig IV: Market Return V/s Beta (CML)

7.1.4 Conclusion

The price fluctuations of individual security are more as compared to KSE in the current market situation. The ultimate effect of the price fluctuations is high beta depicting high risk

of the stock. The market offers a return lesser than the previous decade due to prevailing uncertain political situation. The market is inefficient as the beta should lie on the Security market line, but currently it does not. The price can show the vise versa trend in the healthy political conditions.

8. CRITICAL ANALYSIS

Considering the above analysis of Pakistan Stock Market it wouldn’t be futile to come to conclusions as, Pakistani market is a speculative market and governed by group(s) or influential individuals having inside information. The floating of bonds, remains almost non-existent. In comparison to the world’s largest liquid markets i-e, NYSE and LSE, KSE still have a long way to go in terms of product and services. NYSE and LSE are high tech advanced stock exchanges, with maximum investor confidence. NYSE and LSE have diversified their range of products and services on the basis of technologies for the convenience of the investors, whereas KSE is still lagging behind. The political conditions also effect the all three exchanges to a great extend but KSE is far much more affected. The market has witnessed extensive deregulation of interest rates, concessionary credit schemes have been phased out, government owned banks have been privatized, terms of government borrowing have been linked more closely to market rates and permission granted for the establishment of new types of financial institutions (investment banks, leasing companies, mutual funds, etc.) in the private sector and removal of restriction on foreign portfolio investment. The remarkable increase in the services for trading, settlement and depositing system and the introduction of automation and computerization of stock exchanges accelerated the emergence of capital market. The market is not transparent either. A very common practice of the commission, is that it only warns the culprits and never holds the big fish accountable. Pakistan’s stock market is more volatile due to the behavior of the political, economic, and financial events in the country. Financial markets carefully monitor important political events. Stock prices reacted properly and at appropriate times only to those events that seem to have some long-term effects. The implementation of a new risk management structure, based on international best practices, is in gradually improving the prevalent risk management framework at the exchanges. The obstacles for good corporate governance are hindering a lot hence effecting positively towards the vulnerability of KSE, whereas the issues at NYSE and LSE also exist but do not contribute towards the vulnerability of the respective. 9. REFERENCES

http://en.wikipedia.org/wiki/Stock_exchange(accessed on 17th sept 08)

GOVERNMENT OF PAKISTAN, (2006- 07) “Capital Markets”, Ministry of Finance, (Economic Adviser's Wing), IslamabadAaj T.V (accessed on 2008 -4th dec)

www. dawn.com /2007/07/16/ebr19.htm (accessed on 2008 – 6th Nov)archive.gulfnews.com/articles/07/01/14/10096641.html (accessed on 2008 – 6th Nov)

THE IMPACT OF CELLULAR PHONE ON THE EDUCATION IN SINDH

Dr. Niaz Ahmed BhuttoAssistant Professor

Sukkur Institute of Business AdministrationOffice: +92 (71) 5630272 ext 123 Fax. +92 (71) 5632465

niaz@iba-suk.edu.pk

Falahuddin ButtAssistant Professor

Sukkur Institute of Business Administration

Ali Raza & Mona ShafiqueStudents

Sukkur Institute of Business Administration

Abstract

Purpose – The Purpose of this paper is to investigate the impact of cellular phones on the education in Sindh and to examine whether emerging technology help or hinder the performance of students.

Methodology – This study has used survey via questionnaires to examine the impact of cell phones on education in Sindh. 200 questionnaires were filled up from eight different cities of Sindh through convenience sampling technique. The age group under consideration was of 15 to 25 years old students as respondent.

Findings – The results show that there is no negative impact of cellular phones on the education of students in Sindh. Rather this study has uncovered some positive outcomes for the use of cell phones on the study of students and their results by improving the relationship among students, decreasing the communication gap, producing friendly atmosphere and by helping accessing the academic information.

Research limitations – The data is gathered from only eight different cities of Sindh through convenience sampling technique. There are many rural areas where access of information is not possible due to cost and time management. Further research can be made on the same just by extending the sample size by considering more cities and rural areas of Sindh.

Practical implications – As the findings of this study suggest that the use of cell phone does not affect adversely the studies of students; cell phones may not be thought or considered as harmful technology. Use of cell phones may be allowed for students of at least A levels.

Originality/value – The study of impact of cell phone on the education of students is not done before in Sindh. Although some studies are found in European countries but this has been done first time in Sindh and Pakistan.

Keywords – Cellular phone, Impact, Education, SindhPaper type – Research paper1. INTRODUCTION

Young people are the real asset of country, and they will be the emerging stars of future, for that they need sound education. To be successful in any field education is as important for youth as blood for heart. Technology has changed the every aspect of daily life. According to one study, people are among the major consumers of mobile phone

technology, and are after considered to be forerunners in its adoption and evolution (Oksman, Turtiainen, 2004) Therefore, it is reasonable not only for youth but as well as for the prosperity of the country to conduct research on this group to measure the impact of cellular phones on education. Among young people, the mobile is perceived and used as an always-open personal link to a broad network of friends, through this personal network, young people can easily make contact from almost any place, at almost any time and for almost any reason. Cellular phones have given the opportunity to parents to remain in contact with their children and get rid of tension related to them. Cell phone has opened the new ways of communication for everyone and expanded the social boundaries in the society; such as, new ways of accessing information through sms, calls and voice messages, not only this but the organizing academic meetings and availability of resources and they are possible with the emergence of cell phones. Though the use of cell phones has created lots of ease for society as a whole it can not be escaped from producing negative effects on society generally and students particularly. But it can not be denied from the fact that the excessive use of everything produces the adverse effects and so the cell phones. But some studies have shown its harmful effects on human body especially on heart. Basing on above, this created the interest to conduct research on the effects of use of cell phones on the study of students for province Sindh. The first part of this paper introduces the subject matter. The second part portrays the literature review – the works done so far in this area. The third part explains the methodology of this study. Results and discussions have been analyzed in fourth part and last part concludes the study.

2. LITERATURE REVIEW

Cellular phones have tremendous effects on society. They have been penetrated in to ‘everyday life’ through products, knowledge and cultural processes (Harvey , Greg , 2005). Like simple cell phone is attached into a person’s life can alone create a new way of looking at the world socially, it removes the social boundaries, family, friends & they are button away. From a theoretical perspective, the cell phone can be viewed as a technology for adjusting time and space (Adams, Paul , 2005; Green, 2002; Janelle et al., 2004). Cellular phones enable a person for an immediate response to certain stimuli and also time management, so information exchange rapidly occurs that was never before.

Plans for the day become more flexible and schedules less fixed in time and space, allowing more spontaneous or impulsive decision-making, at least among young people (Ling, Haddon, 2001, Ling, Yttri , 2002), basically it reshapes one’s life the way of thinking and reacting in the social world become changing with the boom of cell phones. Daily work plans are flexible, at the spot decisions increasing day by day because of fastest information exchanges.

With a few exceptions, most studies concerning the actual use and meaning of the mobile have defined the specific sub-groups of users; young people’s actions in particular situations, locations, and interactions — for instance, texting to friends, but the risk increases the exaggerate use of this instrument and its total impact and role of a smart technology. Because that is most likely integrated into people’s especially young people’s everyday life (Valentine & Holloway, 2002; Ling, 2004). Young generation’s life styles, attitudes and behavior patterns rapidly changed because of cell phones. They continuously use it so that non-communicative periods of the day become shorter, split up by incoming

phone calls and a stream of text messages and emails that must be managed and replied too (Ling, 2004).

It is not wrong to say that cell phone drags people to individualization and promotes one to connect with particular person which creates absenteeism in the social meetings. People may withdraw from public spheres. With the comparison of the Internet, the mobile phone has gone to less sociological theorizing and research, because it is seen as supporting only micro social bilateral interaction (Noah, 2005).

This study has used Periodical Literature to locate negative mobile phone stories between the years 1981 and 2000 in the New York, and it stated before 15 years that how the introduction of cell phones, hand-held telephones greatly increased the possibilities for personal communication and simultaneously disrupted established patterns of social interaction (Pain et al., 2005). From social perspective, on one hand cellophane increase the social life of a person, speedy exchange of information, immediate decision making affecting society but apart from these advantages, it encourages people to withdraw from social meetings, and also mass usage of this smart technology leads to frustration and workload.

Cell phones are becoming to today's youth identity. Approximately 80% of all teenagers have cell phones worldwide, and have developed their own language and social groups away from the prying eyes of their parents. Young people use their mobiles for voice calls and especially text messages as key tool for organizing their daily meetings and activities. Mobile phones are also employed for safety management and the mediation of perceived risks of being outdoors in public spaces (Bolin, 2006).There are some categories of youth and according to them, their perception about the cell phones is different. Some young people take cell phones as fashion, some for safety/security, some for instrumental purposes and some for expressive purpose.

According to one estimate from a recent national media survey, the cell phones have negatively influenced the young people, mobile phone use has increased since 2001, still no more than 20 per cent of all young people (15–24 years old) make more than four calls per day (Kasesniemi & Rautiainen, 2002). It shows that there is massively used instrument by youth. One reason like a cell phone gives so much privacy; parents cannot interfere and didn’t know the contacts of his children. One research also supports this point that the mobile phone has been the first private communication device that has enabled contact between friends outside of parental supervision (Frandberg et al., 2005).

In Sweden 2003, 98% of all young people aged 15-24 years had access to mobile phones (Hjorthol et al., 2005). However; young people are not a homogeneous group — not even in the case of mobile phone usage. For example, young women send text messages much more frequently than young men do (Kasesniemi et al., 2002; Anderson et al., 2001).

According to some researchers, life’s borders have already been redrawn (Charles et al., 1991). Mobile telephony supports the integration of the multiple professional and personal roles we assume by making us “telephonically present” at times and in places that once preempted such communication. The truth about cell phone is that it causes several human diseases. Cell phones effects and applications from medical perspective include: using cells for electronic transfer of tracheal breath sounds ti remotely monitor asthma patients, it also give addiction to smoking and causing neurological and tissue changes due to postural and radiations effects

(Anderson et al., 2001). More over Cell phones use electromagnetic radiation in the microwave range. This may be harmful to human health. These concerns have induced a large body of research (both epidemiological and experimental, in non-human animals as well as in humans).

3. RESEARCH METHODOLOGY

Survey via questionnaires is conducted to examine the impact of cell phones on education in Sindh. This study has used convenient sampling because there are too many rural areas where access to information is not possible in terms of cost and time management. Karachi, Hyderabad, Nawabshah, Sukkur, Khiarpur, Larkana, and Ghotki are the cities from where data has been collected. 200 questionnaires were filled up from eight different cities of Sindh. The age group under consideration was of 15 to 25 years old students as respondent. Out of two hundred, 100 questionnaires were distributed among Karachi, Hyderabad and Nawabshah as 50, 30, and 20 respectively, and remaining 100 questionnaires were distributed as twenty (20) each for Nawabshah, Sukkur, Khiarpur. Shekarpur and Larkana. Criteria for selecting the educational institutions for this construct is based on the minimum number of students enrolled in it that is 200, and the general perception of public about the better image of such institutions.

The hypothesis of this study is:Use of cell phones worsens the education of the students in Sindh.

Dependent Variable

The dependent variable of this hypothesis is: “Total study hours in a day”The variable ‘study hours’ has direct and positive impact on the results of the students and thus it shows the degree, quality and standard of education.

Independent Variable In this hypothesis, the independent variable is:“Diversion of attention during studies due to cell phones” This independent variable explains at what extent the diversion of attention can reduce the study hours of the students and explains negative impact on education.

4. RESULTS AND DISCUSSIONS

Simple regression has been run to test the relationship. The results show that no strong relationship exists between ‘study hours’ and ‘diversion of attention due to cell phones’. The value of t-statistic is 1.39 with a ‘p’ value 0.17. The null hypothesis of having no impact of diversion of attention due to cell phone use on study hours of students is not rejected on the calculated values of t-statistic and p-value. The coefficient of variation R 2 is 0.01, which indicates the weak relationship between ‘study hours’ and ‘diversion of attention due to cell phones’. 10% of the variation of dependent variables is explained by independent variable.

The descriptive analysis of the study does not support the hypothesis that the use of cell phones worsens the education of students in Sindh. This can be proved from the responses of the following questions:

Q#1. Has cell phones ruined the education?

The data show that at least 49% respondent did not agree with the statement that cell phone ruined the studies of the students. Only 27% did agree with this statement while 14% were having the views that cell phone can affect the studies to some extent and 9% were those who have no opinion about this relationship.

Q#2. After the use of cell phones, your results in school\colleges.

The responses showed that 60% respondent were of the view that results of the examinations at colleagues and universities were good after using the cell phones and about 33% were of the view that the results were excellent after the use of Cell phone.

It is because cell phones helped them a lot in facilitating their studies i.e. calendars, dictionary, calculator and alarm clock. About 73% of the respondent were strongly agree with this statement, 15% were tend to agree, 6.3 were having no opinion and only 6% were disagree with this statement.

Facilities , like calendar, dictionary & calculator

Missing

Disagree

Not sure

Tend to agree

Agree

Cell phone helps in accessing academic information

Missing

Disagree

Tend to disagree

Not sure

Tend to agree

Agree

Cell phone helps in communication with family, friends

Disagree

Tend to disagree

Not sure

Tend to agree

Agree

Q#3 Does cell phone help in accessing the academic information”?

In the response of the other question, “Does cell phone help in accessing the academic information”? 63% respondents said “yes” and were strongly agree, 20% were tend to agree and only 6% were disagreed with this statement while 10% were with no opinion. About 74% of the respondents were of the view that cell phones help in communication with family, friends & relatives and it makes easy and relax in order to concentrate on studies.

5. CONCLUSION The general perception – the use of cell phones leaves the negative impact on study hours of the students has been rejected by the results of this study. Rather the results of this study show some positive outcomes of the use of cell phones on the study of students and their results. Use of cell phones helps improving the relationship among students, decreases the communication gap, produces the friendly atmosphere and helps accessing the academic information.

6. REFERENCES

Adams, Paul C. (2005) “The Boundless Self: Communication in Physical and Virtual Spaces, New York: Syracuse University Press.

Anderson, K., Y.Qui A. Whittaker and M. Lucas (2001) “Breath Sounds, Asthma and the Mobie Phone”, Lancet (20 Oct.): 1343

Bolin, G. (2006). Makten över tekniken eller teknikens makt? Mönster i obilanvändningen 2005’ “The Power over Technology or the Power of Technology? Patterns in Mobile Phone Usage 2005), in Sören Holmberg and Lennart Weibull (eds), Du stora nya värld (Grand New World), pp. 403–11. Göteborg: SOM Institute.

Charles Leerhsen, et al, “If A Movie Usher Answers”’ Newsweek, 26 August 1991, p. 62.

Frandberg, Lotta, Thulin, Eve and vilhelmson, B. (2005). Rorligbetens omvandling, Om resor ocb virtuell kommunikation – utveckling, drivkrafter,granser ( The transformation of mobility. On Travel and virtual communication – Development, Driving forces, Limits. Lund: Studentlitteratur.

Green, N. (2002). On The Move: Technology, Mobility, and the Mediation of Social Time and Space, The Information Society, 18(4): 281–92.

Harvey, M. and Greg, H. (2005). The Mobile Phone as Media, International Journal of Cultural Studies, Vol. 8(2): 195-211.

Hjorthol, Randi, Hovland Jakobsen, Mona, Ling, Rich, Nordbakke, Susanne and Haddon, L. (2005). Mobility in Every day Life, A Qualitative Study of the Use of Car and ICT in families with Children. Oslo: Telenor FoU R1/2005 (consulted 30 August, 2006).

Janelle, Donald G. and Gillespie, A. (2004). Space-Time Constructs for Linking Information and Communication Technologies with Issues in Sustainable Transportation, Transport Reviews, 24(6): 665–77.

Kasesniemi, E. L. and Rautiainen, P. (2002), The Text Messaging Culture of Finnish Teenagers, in J. Katz and M. Aakhus (eds) Perpetual Contact: Mobile Communication, Private Talk, Public Performance, pp. 170–92. Cambridge: Cambridge University Press.

Ling, R. and Haddon, L. (2001), ‘Mobile Telephony and the Coordination of Mobility in Everyday Life’. Rand D Report, Telenor, 16.

Ling, R. and Yttri, B. (2002). Hyper-coordination via Mobile Phones in Norway, in J. Katz and M. Aakhus (eds) Perpetual Contact: Mobile Communication, Private Talk, Public Performance, pp. 139–69. New York: Cambridge University Press.

Ling, R. (2004). 'The Mobile Connection. ‘The Cell Phone’s Impact on Society’, San Francisco: Morgan Kaufmann.

Noah, A. (2005). The World is Phone Booth: The American Response to Mobile Phones, 11(23).

Oksman, Virpi and Turtiainen, J. (2004). Mobile Communication as a Social Stage: “Meanings Of Mobile Communication In Everyday Life Among Teenagers In Finland”, New media and society 6(3):319-39

Pain, Rachel, Grundy, Sue, Gill, Sally,Towner, Elizabeth, Sparks, Geoff and Hughes, K. (2005). Mobile phones, Urban Life and Geographies of Young People’s Safety, International Journal of Urban and Regional Research, 29(4): 814–30.

Rich Ling, “The Mobile Connection. The cell phone’s impact on Society”.pp-238 San Francisco, CA and Oxford: Elsevier/Morgan Kaufmann, 2004.

Valentine, G. and Holloway, S. L. (2002). Cyberkids? Exploring Children’s Identities and Social Networks in On-Line and Off-Line Worlds, Annals of the Association of American Geographers, 92(2): 302–19.

Effects of leadership attitude on organizational performance

Prof.Dr.M.Ehsan MalikDirector General Punjab University Gujranwala Campus

Cell: 0300-8455453Drmalikehsan@hotmail.com

M. Mudasar GhafoorIncharge Department of Business Administration Punjab University Gujranwala Campus

Cell: 0333-8103618mudasar@pugc.edu.pk

Nida IqbalStudent of Business Administration Punjab University Gujranwala Campus

ABSTRACT

Leadership is the ability to influence a group of people toward the achievement of goals. Leaders must clarify the direction towards the attainment of goals to the employees through communication and encourage them to feel confident and able to take risks in work completion. Leadership style also has a significant impact on performance. This study investigates the relationship between the leadership attitude and organizational performance, impact of leader’s styles on the performance of employees and effects of leadership on the output of the company. Specifically, the objectives of the study are to examine the impact of leadership styles on performance of companies and relationship between corporate culture, leadership style and performance of different companies are also examined. Data for this study was collected from 119 employees within the 14 different types of organizations that have implemented different leadership styles in their organizations in order to enhance employee’s commitment towards their goals. This data is collected to test the hypothesis. This study is highly complex in cross-sectional context and conducted in non-contrived settings. Time horizon is cross-sectional and unit of analysis is individuals. Overall, the findings showed that companies practiced different sets of culture at the workplace. As for the leadership style, no special difference was found in different types of companies since results show the similarity of styles used by the leaders in all organizations. The findings also showed some pattern on the relationship between types of leadership styles adopted by companies with the performance of their employees. For the local companies, the result shows a significant dependence between performance and leadership styles. The results of the study indicate that leadership attitude do indeed influence organizational performance. Decisions made by leader’s lead to increase or decrease of the outcome of the organization as they directly influence the behavior and performance of the employees. Finally, the findings indicate that there is an association between leadership styles and company’s performance in all types of organizations. The implications of this research are also discussed.

Key Words: Organizational culture, performance, goals, competing values framework, Leadership style, attitude, employee’s commitment.

1. INTRODUCTION

By definition, leadership is the ability to influence a group of people toward the achievement of goals (Robbins, Coulter and Lussier, 1990 & 2001). A successful leader must be able to

establish trust by giving employees more freedom to act autonomously and make decisions. In addition, leaders must clarify the direction towards the attainment of goals to the employees through communication and encourage them to feel confident and able to take risks in work completion. Leadership style also has a significant impact on performance (Bycio et al., 1995; Avolio and Bass, 1993). According to Schulz (2001), a high performance firm is one in which the culture provides employees with the accountability and responsibility necessary to meet customer needs in a timely manner to ensure business success. A high performance company is characterized largely by the following: high outputs or productivity, sustained and increasing market share, greater profitability or shareholder value, innovation, and differentiation of service from that of its competitors in its sector in one way or another (Stevens, 2000). This exploratory study examined the extent in which perceptions concerning leaders planning, implementation, and organizational climate influence perceptions of the employee’s performance. The study is further concerned with exploring the extent to which organizational climate moderate the relationships between leaders and the employees. The main hypothesis developed relate to: (1) the effect of organizational structure on participation of leaders in strategic planning and behavior (2) the effect of strategic planning on employees performance (3) the effect of psychological support from leaders In addition, studies examining the relationship of leadership to various environmental factors, defined as those pertaining to the industry in which the organization operates, including competitors, customers, suppliers, as well as government, trade unions and so forth (Sabherwal & King, 1992), have examined the effect of outsourcing opportunity on the flexibility on the part of leaders (Markus & Benjamin, 1996).While past research has made important contributions in describing behaviors or structural features of leadership and/or how these may be related to organizational and environmental factors, it does not enable executives to determine leadership behavior.

1.1 Objectives of study:

To determine the factors that affects the organizational performance. To examine leadership behaviors and structural features of the leadership in isolation or in association with environmental and organizational factors

2. Theoretical Framework

2.1 Performance of the Organization:

Organizational performance comprises the actual output or results of an organization as measured against its intended outputs (or goals). www.wikipedia.com. Performance is defined as how well the organization a) executes activities of developing, operating and maintaining applications and b) responds to functional needs and contributes to meeting strategic business goals (Chan & et al., 1997).According to Schulz (2001), a high performance firm is one in which the culture provides employees with the accountability and responsibility necessary to meet customer needs in a timely manner to ensure business success. A high performance company is characterized largely by the following: high outputs or productivity, sustained and increasing market share, greater profitability or shareholder

value, innovation, and differentiation of service from that of its competitors in its sector in one way or another (Stevens, 2000).

2.2 Leader Behavior:

Analyses of leadership have frequently presumed that leadership style or leader behavior was an independent variable that could be selected or trained at will to conform to what research would find to be optimal. Even theorists who took a more contingent view of appropriate leadership behavior generally assumed that with proper training, appropriate behavior could be produced. Fiedler noting how hard it was to change behavior, suggested changing the situational characteristics rather than the person, but this was an unusual suggestion in the context of prevailing literature which suggested that leadership style was something to be strategically selected according to the variables of the particular leadership theory. But the leader is embedded in a social system, which constrains behavior. The leader has a role set in which members have expectations for appropriate behavior and persons make efforts to modify the leader's behavior. Pressures to conform to the expectations of peers, subordinates, and superiors are all relevant in determining actual behavior. Leaders, even in high-level positions, have unilateral control over fewer resources and fewer policies than might be expected. Investment decisions may require approval of others, while hiring and promotion decisions may be accomplished by committees. Leader behavior is constrained by both the demands of others in the role set and by organizationally prescribed limitations on the sphere of activity and influence. This work revisits the work of Frederick Hertzberg and translates his landmark research into eight practical leader-behaviors consistent with the research. Those behaviors are: (1) creating a leadership platform; (2) becoming the principal-learner and principal-teacher about leadership; (3) affirming and teaching the powerful roles of organizational beliefs, vision, and mission; (4) leading and modeling reciprocity of accountability; (5) building collegiality around problems of practice; (6) emulating the actions of successful coaches; (7) developing the cultural understanding and affirmation that leadership and growth bring discomfort; (8) developing a sense of professionalism throughout the organization consistent with professionalism as demonstrated in and expected of other learned professions.

2.3 Leader decision:

1. The passing of judgment on an issue under consideration. 2. The act of reaching a conclusion or making up one's mind. 3. A conclusion or judgment reached or pronounced; a verdict. 4. Firmness of character or action; determination.

Middle English decision, from Old French decision, from Latin decision, decision-, curtailment, settlement, from decision, past participle of decider, to cut off, decides. One of the critical, but often overlooked, requirements for effective leadership is sound decision making. This is especially true as we soar ever higher into the ranks of middle and upper management. Typically, as this progression occurs, leaders become more focused on strategic decisions relating to plans, policies, programs and personnel, and less consumed with day-to-day tactical concerns. Good decision making, especially in middle and upper management, will therefore likely increase overall organizational health and effectiveness. Understanding the meaning and art of deciding, therefore, is paramount.

2.4 Direction specified by leaders:

Two studies have assessed the effects of leadership changes in major positions in organizations. Lieberson and O'Connor….. examined 167 business firms in 13 industries over a 20 year period, allocating variance in sales, profits, and profit margins to one of four sources: year (general economic conditions), industry, company effects, and effects of changes in the top executive position. They concluded that compared to other factors, administration had a limited effect on organizational outcomes. Using a similar analytical procedure, Salancik and Pfeffer examined the effects of mayors on city budgets for 30 U.S. cities. Data on expenditures by budget category were collected for 1951-1968. Variance in amount and proportion of expenditures was apportioned to the year, the city, or the mayor. The mayoral effect was relatively small, with the city accounting for most of the variance, although the mayor effect was larger for expenditure categories that were not as directly connected to important interest groups. Salancik and Pfeffer argued that the effects of the mayor were limited both by absence of power to control many of the expenditures and tax sources, and by construction of policies in response to demands from interests in the environment. If leadership is defined as a strictly interpersonal phenomenon, the relevance of these two studies for the issue of leadership effects. But such a conceptualization seems unduly restrictive, and is certainly inconsistent with Selznick's conceptualization of leadership as strategic management and decision making. If one cannot observe differences when leaders change, then what does it matter who occupies the positions or how they behave? Pfeffer and Salancik investigated the extent to which behaviors selected by first-line supervisors were constrained by expectations of others in their role set. Variance in task and social behaviors could be accounted for by role-set expectations, with adherence to various demands made by role-set participants a function of similarity and relative power. Lowing and Craig experimentally demonstrated that leader behavior was determined by the subordinate's own behavior. Both studies illustrate that leader behaviors are responses to the demands of the social context. The effect of leadership may vary depending upon level in the organizational hierarchy, while the appropriate activities and behaviors may also vary with organizational level. For the most part, empirical studies of leadership have dealt with first line supervisors or leaders with relatively low organizational status. If leadership has any impact, it should be more evident at higher organizational levels or where there is more discretion in decisions and activities. Providing training to staff has many costs: the cost of resources involved in preparing and giving the training, the cost to participating organization in travel and lodging, and the cost of staff being away from the workplace. To justify these costs, managers need to feel confident that the training they are providing, or asking their staff to attend, will make a difference in staff performance. They need to know that staff members have not only acquired new knowledge, attitudes, and skills from the training but can, and do, put them into practice back on the job. There are many kinds of evaluation involved in developing and managing a high-quality training program which will ensure the results that managers need. These include needs assessments, baseline evaluations, input evaluations, process evaluations, and outcome evaluations, impact evaluations which are used to evaluate individual job performance, organizational performance, program performance, and demographic health indicators. Training organizations or training programs within a larger organization most commonly evaluate baseline knowledge, attitudes, and skills (KAS), and conduct input, process, and outcome evaluations. Needs assessments are done infrequently and are generally conducted for the purpose of designing a new course or for a large-scale, ongoing course. Often, years after an initial needs assessment, the same course is still given, even though changes in the

environment would suggest that a new needs assessment be conducted or that the course be revised. An impact evaluation, in spite of its importance, is rarely conducted.

2.5 Focusing on the impact of training on individual performance.

The desired long-term impact of training is to improve organizational and program performance and, ultimately, to contribute the achievement of national demographic and health goals. It is difficult to demonstrate a direct link between training and these long-term results because of the many factors other than training that are involved. However, it is possible to demonstrate the impact of training on staff skills and performance. For this reason, TIE focuses on the first level of impact—job performance of trainees—with the assumption that good individual performance will lead to strong organizational and program performance and better client services, and eventually make a significant contribution to the achievement of desired demographic and health goals. If the connection between job performance and training is so important, why have organizations resisted evaluating the effect of training on job performance? There are many reasons for this: the costs of conducting such an evaluation are rarely covered by donor-supported projects; managers and staff of training and service delivery organizations often do not have the skills to undertake this type of evaluation; many organizations are reluctant to uncover organizational deficiencies; and managers are often intimidated by the time and money required to remedy these deficiencies. Both service delivery and training organizations often find it easier to keep doing what they have always done. As one trainer commented, "We're so busy doing the training, we don't have time to think about changing it! After a while it becomes routine."

2.6 General Hypothesis:

Based on the above discussion, the present study is designed to test the following hypothesis: (1) Non serious behavior of leader will affect the performance of the business (2) If leaders take wrong decision, it will affect the performance (3) Rewards given by the leaders improves the performance (4) good on job training affects the performance (5) performance have affect on the output of the organization.

3. Method

3.1 Study Settings:

The descriptive method of research was used because it facilitated the description of the prevailing culture type of selected organizations. The descriptive method is also a logical approach because the data consisted of the perceptions of respondents. Study setting was non contrived.

3.2 Research Instrument:

The instrument used for this study is questionnaire which is pretested and designed by ourselves. The questionnaire constitutes two parts. The first part comprises demographic characteristics of the respondents such as gender, age, qualification, occupation, and the automobile used by the respondent. The second part of the questionnaire has different questions which represents key dimensions of organizational leadership attitude. These

dimensions include performance of employees, leader’s behavior, and management, organizational glue, strategic planning of leaders and criteria for success.

3.3 Sample:

The sample was composed of the managers and employees of different organizations located in the Gujranwala region. Data were collected from a range of firms pertaining to 14 different organizations. A total of 125 questionnaires were distributed among the firms using the method of non-probability sampling. From a total of 125 personnel, the researcher was able to retrieve 119 questionnaires or 95% of total possible respondents.

3.4 Analysis:

Performance and Satisfaction

CasesIncluded N

ExcludedPercent N Percent

TotalN Percent

Performance StyleSatisfaction StylePerformanceDecisionSatisfaction DecisionPerformance BehaviorPerformanceBehavior

115

115

115

115

115

115

96.6%

96.6%

96.6%

96.6%

96.6%

96.6%

4

4

4

4

4

4

3.4%

3.4%

3.4%

3.4%

3.4%

3.4%

119

119

119

119

119

119

100%

100%

100%

100%

100%

100%

This Bar chart shows the frequency of the organizational performance. Within our sample 89 respondents shows positive response while remaining shows negative.

This Bar chart shows the frequency of satisfaction of organizational employees. Within our sample 85 respondents shows positive response while remaining shows negative.

StylesStyle Frequency Performance SatisfactionYes

No

Don’tKnow

Total

112

5

2

119

MeanN

Std.DeviationMean

NStd.Deviation

MeanN

Std.DeviationMean

NStd.Deviation

1.2091110

.45122.5000

4.57743.000

1.

1.2696115

.5351

1.2818110

.54412.2500

4.5000

2.00001.

1.3217115

.5704

This Bar chart shows the frequency of the effect of leadership style on the organizational performance. Within our sample 112 respondents shows positive response while remaining shows negative.

Behavior

Behavior Frequency Performance SatisfactionExcellent

Satisfactory

Non-satisfactory

Total

112

5

2

119

MeanNStd.DeviationMeanNStd.DeviationMeanNStd.DeviationMeanNStd.Deviation

1.014768.12131.450040.50382.71437.48801.2696115.5351

1.102968.30611.500040.64052.42867.53451.3217115.5704

This Bar chart shows the frequency of the effect of leader’s behavior on the organizational performance. Within our sample 68 respondents are strongly agree and 40 of them gives satisfactory response and remaining shows negative response.

Decision

Decision Frequency Performance SatisfactionTransformational

Transactional

None

Total

52

58

8

119

MeanNStd.DeviationMeanNStd.DeviationMeanNStd.DeviationMeanNStd.Deviation

1.00052.00001.428656.59872.00007.81651.2696115.5351

1.00052.00001.571456.68381.71437.48801.3217115.5704

This Bar chart shows the frequency of the effect of leader’s decision on the organizational performance. Within our sample 52 respondents shows positive response while remaining shows negative.

4. Discussion

The study has achieved its objectives of providing insights into the relationship between leadership attitude and performance of the organization. The two are positively related, as witnessed by the findings. Further, this relationship exists within each of the organization. The findings provide evidence that largely confirms the hypothesis, as well as raising questions that invite further research. The results of this exploratory study provide confirmation to the somewhat ubiquitous conceptual proposition that the structure of the implementation process and the nature of the planning of leaders influence the performance as well as the out put of the organization. The study utilized perceptions of employees to measure aspects of the leader’s attitude, planning and implementation of their decisions in the organization to get maximum performance and output. Future research on this topic should attempt to utilize more exact measurements of these variables. Secondly, although statistically significant correlations were revealed within this study, the generalizability of these results is constrained by the small number of organizations and small sample size. Nevertheless, the results of this study has accomplished what an exploratory investigation purports to do; that is to determine the feasibility of conducting future research on a delineated topic. The results of these particular exploratory analyses have indeed suggested that future research on the relationships between leadership attitude and performance of firm is warranted. This exploratory analysis should serve as a heuristic guideline for future research. Furthermore, the results of this study strongly suggest to managers that it is important to devote time and effort to strategically planning for how performance and output will be maximized.

5. Managerial Implication

First, the findings of this study showed that organizational performance and output is dependent on leadership styles in both local and foreign companies. The empirical findings of this study provide several theoretical implications. First, the findings of this research support the generalization of findings and conclusions of previous researches on the relationship between organizational performance and leadership style. Despite differences in the model of leadership styles used, the results of this study indicate that there is a strong relationship between organizational performance and leadership style and how a certain corporate leaders are suited to a certain types of organizational culture. In addition, this study also contributes in terms of providing empirical evidence about organizational culture, leadership style, and organizational performance by focusing on different local companies. In the highly competitive business market where change is fast and rampant, the managers may need to have deep knowledge of the range of corporate leading styles that might be effective in their organization to improve performance. Therefore, managers should decide what is effective to build an adaptive, dynamic, and successful corporate culture when undergoing a change in organization. Second, the finding that leadership style and type of firm are independent would be useful for managers to understand the most frequently practiced leadership styles (auditor, ambassador and driver) in local and foreign companies. Since both types of organizations practiced similar leadership styles, managers should know the characteristics of these leadership styles, such as persistent in how they want the subordinates to do the work and its outcome, having deep knowledge of the company and products in aiming to achieve

company’s goals and targets, and that these characteristics might strengthen the organization’s performance. It would also be useful to further improve the style of management, which can ultimately results in a higher level of performance and increase employees’ sense of belonging. Third, the finding that organizational culture is partially associated with leadership styles in local and foreign companies would be useful for managers to have deeper knowledge of the importance of having the ‘right’ organizational culture and leadership style that promotes organizational effectiveness and high performance. Fourth, the findings that corporate culture is not associated with performance either in local or foreign organizations could draw management’s attention to the fact that corporate culture is not the only determinant in achieving organizational performance. In the present business environment, even though corporate culture is important, the companies should also look at other contributing factors such as economic conditions, high levels of global competition, and technological advancement that should be addressed quickly since they will impact directly on a company’s profitability and performance. The findings also indicate that hierarchical organizations tend to suffer the greatest tendency to incur loss. This might be attributed to the fact that hierarchical culture characteristics emphasized more on integration and establishment of uniformity, leading to the creation of a strong culture. According to Ogbonna and Harris (2000), the company that held strong values might bring profit to the company if the culture is geared to the positive direction and able to quickly adapt towards changes of the external environment. However, if this company fails to quickly adapt to the required change, they might suffer in the long-term growth and may even affect the survival of the organization. Therefore, clan and result-oriented organizations are in consistent with the present business environment and more reliable to achieve high performance compared to the organizations that adopt a hierarchical culture. Finally, the findings that leadership style is associated with performance either in local or foreign companies would be useful for managers to know that there are one-best culture and leadership style that can fit in particular situations. Somehow, the company might has greater probability to succeed if they have the right combination of corporate culture, style of leaders and subordinates level of readiness whether they are newly hired or experienced worker, as long as the leaders act within the defined goals and targets of the company (Sagie, 1997; Vroom, 1960; Fiedler, 1971). Since leadership is about coping with change, organizations need to have strong leaderships and strong management teams for optimum effectiveness (Robbins, 2001).

6. Limitations:

Limitations are basically constraints which affect the quality of the study. First, the sample size is relatively small (14 organizations) which might reduce and affect the generalizability of the findings and conclusions. Second, the sample in this study covered a mixture of industries. Since certain culture types might relate to specific industry types, this might also affect the accuracy and generalizability of the findings. As a result, the use of more advanced statistical analysis could not be carried out due to the limitations of these types of data. Finally, the results of this study are limited and constrained by the measures adopted to gauge organizational performance and leadership style. While the measures used are accepted as reliable and valid, additional insights into association may be gained by adopting different measures of performance and leadership style that may reflect different perspectives.

7. Direction for Future Research:

The authors recommend the following for future research investigations: Expand the number of dimensions contained within the leadership implementation scales. Incorporate the construct of “Organizational Culture” along with the measurement of organizational climate. Expand the number of dimensions within the organizational climate scale. Increase the sampling size of departmental units within the study. Utilize quantitative and qualitative methodological approaches for variable measurement and observation. Measure the moderator influence of such factors as employee training.

8. REFERENCES

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Chan & et al., (1997) en.wikipedia.org/wiki/Organizational performance. 22.11.2009, 12:25 P.M

Chan & et al., (1997). Performance www.answers.com/topic/decido 13.11.2009 at 12:12 P.M

Def. of Performance of the Organization. www.bnet.com 11.11.2009, 12:30 P.MDef. of Training www.google.com 13.11.2009, 12:11 P.MLieberson and O'Connor (35) Effects of leadership www.studymba.com 22.11.2009, 12:25 P.M

Leader Behavior www.answers.com/topic/decido 12.11.2009, 12:10 P.M

Leader decision www.answers.com/topic/decido 12.11.2009, 12:12 P.M

Lowing and Craig (37) Leader behavior www.bnet.com 22.11.2009, 12:25 P.M

Markus & Benjamin, (1996) www.answers.com/topic/decido, 12.11.2009, 12:10 P.MMarkus & Benjamin, (1996) Effect of outsourcing opportunity on the flexibility on the Part of leaders. www.definition.com (13.11.2008 at 12:30 pm);

Ogbonna and Harris (2000) www.answers.com/topic/decido (12.11.2009 at 12:10 pm);(Robbins, 2001) Leadership www.studymba.com (13.11.2009 at 12:20 pm);Robbins, Stevens and Coulter, (1990, 2000, 2001) High performance company www.bnet.com , 22.11.2009, 12:34 P.MRobbins and Coulter, 2001 Leadership; Lussier, 1990

Robbins, S.P. and Coulter, M.K. (2001) Management (7th edition), Prentice Hall, 7th Edition.

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Schulz, J.W. (2001). Leadership styles .Management Quarterly, Spring2001, Vol. 42

Stevens, J. 2000. Attributes of a high performance company.. People Management, Vol. 6 Issue 7, p29, 3p

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Training www.bnet.com, 11.11.2009, 12:35 P.M

Impact of Big Five Personality Traits on Job Stress amongst Sales Employees in the Pharmaceutical Industry in Pakistan

Shiza Zulfiqar ToorInternational Islamic University Islamabad

shizatoor@gmail.comTel: +0092-334-5273929

Samia MinhasInternational Islamic University Islamabad

minhassamia@yahoo.comTel: +0092-332-5175657

Mehwish MushtaqInternational Islamic University Islamabad

mehwish_689@yahoo.comTel: +0092-345-5383649

Irum MehmoodInternational Islamic University Islamabad

irumbba15@yahoo.comTel: +0092-321-5207588

Abstract

Purpose- The purpose of this paper is to present a discussion of the impact of the big five personality traits on job stress on the sales employees currently working in the pharmaceutical industry in Pakistan.

Design/Methodology/Approach- Questionnaire distribution method was used to conduct this research. The total numbers of respondents were 108 and the numbers of pharmaceutical

companies visited were 13 in number. Employees that are surveyed are all from the sales department.

Findings- The findings of this research paper indicate that extraversion, conscientiousness, openness and agreeableness are negatively related with job stress where as neuroticism is positively related with job stress. The relationship between personality traits and job stress is highly significant. Conscientiousness was found to be the most influential personality trait as compared to other traits.

Research Limitations/Implications- This research has been limited to the impact of the Big Five Personality Traits on job stress. Secondly, for data collection only the questionnaire distribution method has been used.

Practical Implication- This paper encourages the Hiring personnel in the Pharmaceutical companies to consider the use of personality tests in the selection of sales employees as the results suggest that certain traits are related to an employee’s ability to cope with job stress.

Originality/Value- This paper suggests that extraversion might not be that effective with coping job stress as compared to other personality traits. This paper also focuses on a specific industry in Pakistan i.e. Pharmaceutical industry, where no such research has been conducted in the past.

Index Terms— Personality traits, Big Five Personality Traits, Five Factor Model, Job Stress

Impact of Big Five Personality Traits on Job Stress

Job stress is a dilemma of most of the working organization in today’s world. It is found that the companies lose between US$100 billion to US$300 billion annually because of job stress. These costs include absenteeism, accidents, health care expenses, and decline in productivity which the company has to bear if they are offering health services and these kind of other benefits to there employees (Crampton et al. 1995).

Job stress has been defined as “the non-specific response of the body to any demands made upon it” (Selye, 1976). It is believed to be an internal state or response to anything we intentionally or unintentionally identify as a threat, either real or imagined (Clarke and Watson, 1991). Stress is a dynamic condition in which an individual is confronted with a chance, restraint, or demand related to what he or she needs and for which the result is perceived to be both doubtful and important (Robbins, 2001). Stress is usually coupled with impaired individual performance in the workplace. The Negative effects include reduced efficiency, decreased aptitude to perform, less initiative and reduced interest in working, increased rigidity of thought, a lack of concern for the organization and colleagues, and a loss of responsibility (Greenberg and Baron, 1995; Matteson and Ivancevich, 1982). Important occupational outcomes of job satisfaction, organizational commitment and employee withdrawal behavior have often been associated with Stress (Naumann, 1993; Sullivan and Bhagat, 1992; Tett and Meyer, 1993; Williams and Hazer, 1986). It has been found that a negative relationship exists between ‘Satisfaction and commitment’ and ‘leave and turnover’ (Arnold and Feldman, 1982; Hollenbeck and Williams, 1986). High levels of work stress result in low levels of job satisfaction (Landsbergis, 1988; Terry et al., 1993) and job stressors are prognostic of job dissatisfaction and a greater inclination to leave the organization (Cummins, 1990).  

The five-factor model postulates that normal personality is a multidimensional concept composed of five dimensions or traits: these are neuroticism, extraversion, openness, agreeableness, and conscientiousness. Neuroticism reflects one's degree of emotional stability and adjustment. Extraversion assesses the degree to which individuals are assertive, active,

and talkative. Openness measures the extent to which people are open to new experiences, are creative and imaginative, and prefer variety. Agreeableness reflects the extent to which one is altruistic and cooperative. Conscientiousness measures one's self-control and purposefulness and is associated with academic and occupational achievement (Costa and McCrae, 1985; McCrae 1991; Costa and McCrae, 1992).

Research has shown that the big five is related to an individual’s relationships with others in social settings (Buss, 1992). Further, other research on the big five has shown that neuroticism, extraversion and conscientiousness to be related to career success (Judge et al., 1999). Neuroticism has also been found to be related to one’s intention to remain in an organization (Morrison, 1997). The relationship to job performance is perhaps the most controversial research on the big five. Some studies show that conscientiousness, agreeableness and extraversion were related to job performance (Tett et al., 1991), while meta-analyses has revealed that conscientiousness was the strongest predictor of job performance across all job groups (Hough et al., 1990; Barrick and Mount, 1991). More relevant to this work, a negative relationship has been found between neuroticism and job satisfaction (Buss, 1992). Neuroticism has also found to be significantly related to organizational commitment (Morrison, 1997). Specific research on personality in the hospitality industry has found that job competence and job aspiration were positively related to enthusiasm and cheerful mood states. Further, these mood states were positively related to work satisfaction (Ross, 1995).

However not significant literature was found to support the relationship between personality traits and job stress. Therefore, our research is based upon studying the impact of an individual’s personality on coping job stress in the pharmaceutical industry.

Method

Subjects or ParticipantsThe Pharma sector is one of the ignorant sectors regarding the research study. A

general supposition exists that as compared to Fast Moving Consumer Goods (FMCG) the sales employees of Pharma industry experience more stress because they have to achieve the targets without advertising their products to the end consumer and secondly their prospective customers are less then as compared to FMCG. The research was conducted in the Pharmaceutical Industry of Pakistan by distribution of questionnaires in 13 different pharmaceutical companies. The sample consisted of a group of 108 sales employees currently working in different Pharmaceutical companies. 15 sales employees were from Novartis Pharmaceutical company, 27 respondents were from Pharma Net, 5 respondents were from Leads Pharma, 8 from Roche Pharma, 5 from Pearl Pharma, 6 from GlaxoSmith Kline, 15 from Aventis, 5 from Wilsons, 2 from Benson Pharma, 1 from Vision Pharma, 2 from Paramount, 2 from Grays Pharma, 4 from Attabark Pharma and 11 were from HighNoon Laboratories. Apparatus

Questionnaire distribution method was used to conduct this research. Two questionnaires were adapted. The personality questionnaire that was used to conduct our research is called the Big Five Inventory also known as BFI, (John, Donahue, & Kentle, 1991. Benet-Martinez & John, 1998) and the questionnaire used to analyze job stress was developed by Jagdish K. Dua (1994). Design

Fig. 1. Graphical representation of the relationship of personality traits as the independent variables and job stress as the dependent Variable.

Five hypotheses can be derived from the theoretical framework. The Null Hypothesis of our research can be stated as follows:Ho: There is no association between Big Five Personality Traits and Job StressThe alternate hypotheses are stated as follows:H1: There is a significant relationship between extraversion and job stressH2: There is a significant relationship between neuroticism and job stressH3: There is a significant relationship between conscientiousness and job stressH4: There is a significant relationship between agreeableness and job stressH5: There is a significant relationship between openness and job stressH6: There is a significant relationship between Big Five Personality Traits and Job Stress.Procedure

Extraversion and Neuroticism were measured using 8 item scales each. Agreeableness and Conscientiousness were measured using 9 item scales each. Openness and job stress were measured using 10 and 18 item scales respectively. Each respondent was asked to indicate the level of agreement for each statement, using a scale anchored by “strongly agree” (5) to “strongly disagree” (1). These scales have been used in prior personality research. The reliability coefficient also known as Cronbach’s Alpha was 0.682 for stress, 0.792 for Extraversion, 0.665 for Neuroticism, 0.794 for Agreeableness, 0.764 for Conscientiousness and 0.835 for Openness.

ResultsPearson’s Correlation Matrix

Job Stress

Conscientiousness

Agreeableness

Neuroticism

Openness

Extraversion

Job Stress Pearson Correlation 1

Sig. (2-tailed) N 108Conscientiousness

Pearson Correlation -.505(**) 1

Sig. (2-tailed) .000 N 108 108Agreeableness Pearson -.395(**) .597(**) 1

Neuroticism

Conscientiousness

Openness

Agreeableness

Extraversion

Job Stress

Correlation Sig. (2-tailed) .000 .000 N 108 108 108Neuroticism Pearson

Correlation .328(**) -.489(**) -.396(**) 1

Sig. (2-tailed) .001 .000 .000 N 108 108 108 108Openness Pearson

Correlation -.255(**) .487(**) .352(**) -.227(*) 1

Sig. (2-tailed) .008 .000 .000 .018 N 108 108 108 108 108Extraversion Pearson

Correlation -.212(*) .426(**) .207(*) -.411(**) .400(**) 1

Sig. (2-tailed) .028 .000 .031 .000 .000 N 108 108 108 108 108 108

Table 1 Correlations Matrix (Notes: * p<0.05, ** p<0.01)

The Pearson correlation matrix obtained for the five interval scaled variables is shown in Table 1. From the results, we see that job stress is, as would be expected, significantly, negatively correlated to conscientiousness, extraversion, agreeableness and openness. That is, the job stress experienced by people of such personalities is comparatively low. However the more a person is neurotic, the job stress also increases (positive correlation of 0.328). The correlations are all in the expected direction. It is also important to note that no correlation exceeded 0.51 for this sample. If correlations were higher than 0.75 and above, we might have had to suspect whether or not the correlated variables are distinct and would have doubted the validity measures.

Hypothesis TestingRegression analysis was used to test the hypotheses H1, H2, H3, H4, H5 and H6.

Table 2Coefficients Table: Personality Traits as predictors of job stress

R-Square Unstandardized CoefficientsStandardized Coefficients t Sig.

  B Std. Error Beta BStd. Error

Extraversion 0.045 -0.409 0.183 -0.212 -2.232 0.028*Neuroticism 0.108 0.616 0.172 0.328 3.576 0.001**Conscientiousness 0.255 -0.755 0.125 -0.505 -6.03 0.000**Openness 0.065 -0.521 0.192 -0.255 -2.716 0.008**Agreeableness 0.156 -0.742 0.168 -0.395 -4.426 0.000**

Notes: * p<0.05, ** p<0.01

H1: There is a significant relationship between extraversion and job stressIt was found that Extraversion was negatively related with job stress i.e. the more a

person is an extrovert; the less would be the job stress. R Square for this relation indicates that 4.5 per cent of the variation in Job stress can be explained by Extraversion. The test results are statistically significant at 5 per cent level of significance (p<0.05) i.e. the sample data provides sufficient evidence to support our alternative hypothesis i.e. there is negative association between job stress and extraversion.

H2: There is a significant relationship between neuroticism and job stressResults proved Neuroticism to be positively related with job stress i.e. the more a

person is neurotic; the more would be the job stress. R Square for this relation indicates that 10.8 per cent of the variation in Job stress can be explained by Neuroticism. The test results are statistically significant at 1 per cent level of significance (p<0.01) i.e. the sample data provides sufficient evidence to support our alternative hypothesis i.e. there is positive association between job stress and neuroticism.

H3: There is a significant relationship between conscientiousness and job stressConscientiousness was proved to be negatively related with job stress i.e. the more a

person is conscientious; the less would be the job stress. R Square for this relation indicates that 25.5 per cent of the variation in Job stress can be explained by Conscientiousness. The test results are statistically significant at 1 per cent level of significance (p<0.01) i.e. the sample data provides sufficient evidence to support our alternative hypothesis i.e. there is negative association between job stress and Conscientiousness. H4: There is a significant relationship between openness and job stress

Openness was found to be negatively associated with job stress i.e. the more a person is open; the less would be the job stress. R Square for this relation indicates that 6.5 per cent of the variation in job stress can be explained by Openness. The test results are statistically significant at 1% level of significance (p<0.01) i.e. the sample data provides sufficient evidence to support our alternative hypothesis i.e. there is negative association between Job stress and Openness.

H5: There is a significant relationship between agreeableness and job stressAgreeableness was also found to be negatively associated with job stress i.e. the more

a person is agreeable; the less would be the job stress. R Square for this relation indicates that 15.6 per cent of the variation in Job stress can be explained by Agreeableness. The test results are statistically significant at 1 per cent level of significance (p<0.01) i.e. the sample data provides sufficient evidence to support our alternative hypothesis i.e. there is negative association between Job stress and Agreeableness.

H6: There is a significant relationship between personality traits and job stress

Table 3Anova Table: Multiple Regression

RR Square

Adjusted R Square

Std. Error of the Estimate F Sig.

.525(a) 0.275 0.24 6.31512 7.742 0.000

a Predictors: (Constant), Openness, Neuroticism, Agreeableness, Extraversion, Conscientiousness

To test this hypothesis multiple regressions was done. The results of regressing the five independent variables against Job stress can be seen in an output. The first table in the output lists the five independent variables that are entered in our regression model and R (0.525) is the correlation of five independent variables with the dependent variables, after all the Interco relations among the five independent variables are taken into account.

In Table 3, the R square (0.275), which is the explained variance, is actually the square of multiple R (0.527) .The ANOVA table shows that the F-value of 7.742 is significant at 0.000 level .In he degree of freedom in the same level the first number represents the number of independent variables five, the second number (108) is the total number of

complete responses. What the results mean is that 27.5 per cent of variance (R square) in Job stress has been significantly explained by the five independent variables. Thus the hypothesis is substantiated.

Discussion

The results of this study provide evidence that Big Five personality dimensions are related to Job stress. Of the six hypothesis tested, five were substantiated at 99 per cent confidence interval, whereas one was substantiated at 95 per cent level of significance. Using multiple regression analysis it was found that conscientiousness, agreeableness and neuroticism, openness significantly account for the variation in the job stress.

The findings of this research paper indicate that extraversion, conscientiousness, openness and agreeableness are negatively related with job stress where as neuroticism is positively related with job stress. 27.5 per cent (R square) of the variation in job stress can be explained by the big five personality traits. The remaining 72.5% of the variation might be caused by other factors like job satisfaction, organizational commitment, employee monitoring and employee turnover. The literature proves this relationship of job stress with these variables. The relationship between personality traits and job stress is highly significant (p<0.000). Conscientiousness (R2= 25.5%, p<0.000, β= -0.505) was found to be the most influential personality trait as compared to other traits. This means that most of the variation in job stress can be explained by conscientiousness. Literature also supports the strong impact of conscientiousness on job stress in the organizational context.

It was however interesting to find that Extraversion did not have that significant of a relation (Sig=0.028*) with job stress as compared to the other traits. Usually for a sales job, people who are high on extraversion are preferred because according to hiring staff, such people have more capability to cope with job stress. Therefore it was interesting to find that conscientiousness, openness, and agreeableness contribute more in coping with job stress as compared to extraversion.

Implications and Future Prospects

This paper encourages the Hiring personnel in the Pharmaceutical companies to consider the use of personality tests in the selection of sales employees as the results suggest that certain traits are related to an employee’s ability to cope with job stress. Although it has been suggested in previous studies that extraversion is the most significant personality trait for sales employees, this paper suggests that extraversion might not be that effective with coping job stress as compared to other personality traits.

A person with high extraversion, conscientiousness, openness and agreeableness will no doubt help a sales employee cope with stress, but the fact that only 27.5 per cent of the variance in job stress is significantly explained by the five independent variables considered in this study, still leaves 72.5 per cent unexplained. In other words there are additional variables that are important in explaining job stress that have not been considered in explaining job stress in this study. Further research might be necessary to explain more of the variance in job stress.

Limitations

This research has been limited to the impact of the Big Five Personality Traits on job stress. Secondly, for data collection only the questionnaire distribution method has been used. This paper also focuses on a specific industry in Pakistan i.e. Pharmaceutical industry, where no such research has been conducted in the past.

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