PIMT

Journal of Research

Volume-12, No.-1 (July to December) 2019 ISSN No: 2278-7925 UGC Care Listed Journal

PATRONS

Sh. Naresh Aggarwal, Chairman

Sh. Pawan Sachdeva, President

Sh. Raj Kumar Goyal, Secretary

EDITOR –IN- CHIEF

Dr. Manisha Gupta, Director

Published By

Punjab Institute of Management & Technology

(Estd. In 1997, Approved by AICTE, New Delhi, Affiliated to IKG PTU, Jalandhar) (Near GPS, Mandi Gobindgarh) Vill. Alour, Khanna -141401, Distt, Ludhiana, Punjab, India

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(Estd. In 1997, Approved by AICTE, New Delhi, Affiliated to IKG PTU, Jalandhar) (Near GPS, Mandi Gobindgarh) Vill. Alour, Khanna -141401, Distt, Ludhiana, Punjab, India

AIMS AND SCOPE

The PIMT Journal of Research (PIMT JR), a peer-reviewed refereed journal, started in March, 2008 is the half yearly

publication of the Punjab Institute of Management and Technology, Khanna. The main aim of this journal is to

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EDITORIAL BOARD ISSN No: 2278-7925

PATRONS

Sh. Naresh Aggarwal, Chairman

Sh. Raj Kumar Goyal, Secretary

Sh. Pawan Sachdeva, President

EDITOR –IN- CHIEF

Dr. Manisha Gupta, Director

EDITORIAL TEAM

CMA (Dr.) Rajni Bala, Editor

Dr. Neha Mahajan , Co-Editor

EDITORIAL ADVISORY BOARD

Dr. Rajib Doogar, University of ILLINOIS, USA

Dr. Jeremy Cripps, Heidelberg College, Ohio, USA

Dr. Ravi Sen, Texas Ad M University, USA

Dr. Mahesh Joshi, RMIT University, Melbourne, Australia

Dr. Revti Raman, University of Auckland, Newzeeland

Dr. Khwaja Amjad Saeed, Pro Vice- Chancellor (Retd.), University of Punjab, Lahore, Pakistan

Prof. H.L.Verma , Guru Jambheshwar University of Sciences & Technology, Hissar

Prof. G.S Batra, Punjabi University, Patiala

Prof. R.K.Mittal, GGS Indraprastha University, Delhi

Prof. Ajay K.Rajan, MD University, Rohtak

Prof. D.D. Arora, Kurushetra University, Kurushetra

Prof. Raghbir Singh, GND University, Amritsar

Prof. Yogesh Singh, GGS Indrapstha University, Delhi

Prof. S.K. Chadha, Punjab University, Chandigarh

Prof. M.K. Jain, Kurushetra University, Kurushetra

Prof. P.K Sharma, Director, Kota Open University, Kota (Rj.)

Prof. D.P.S. Verma (Retd.), Delhi University, Delhi

Prof. S.K. Singla, Director, GNA- IMT, Phagwara

Prof. S.L.Gupta, Director, Birla Institute of Technology, Mesra, Ranchi

Dr. Nawab Ali Khan, EX-Dean, Faculty of Commerce, Aligarh Muslim University

Dr. Pooja Mehta, Assistant Professor, IKG PTU, Kapurthala

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Dr. K.K Sharma, Associate Professor, A.S College Khanna

Dr. S.K Mishra, Registrar & Head –Centre of Continuing Education, Dr. B.R Ambedkar National Institute of Technology,

Jalandhar, Punjab

Dr. Rohit Bansal, Assistant Professor, Dept. of Management Studies, Vaish College of Engineering, Rohtak, Haryana

© 2019.All rights reserved with Punjab Institute of Management & Technology, Vill. Alour, Khanna, Distt. Ludhiana, Punjab, India

Published by Dr. Manisha Gupta, on behalf of Punjab Institute of Management & Technology, Vill. Alour, Khanna Distt. Ludhiana,

Printed by National Press Associates, New Delhi

From the Editor’s Desk

I am pleased to place before the readers this issue (Vol-12, No.1) of PIMT Journal of Research (UGC Care

listed Journal), a publication of Punjab Institute of Management and Technology, Village Alour, Khanna.

The response from the contributors of research articles has been overwhelming. The PIMT Journal of

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Our commitment to the cause of promoting high quality research work in all areas of Business Management

and Information Technology will contribute to enlighten our readers in the times to come.

The Chairman Sh. Naresh Aggarwal, President Sh. Pawan Sachdeva, Secretary Sh. Raj Kumar Goyal, and

other members of Governing Council of the Institute have taken the keen interest in this academic endeavor.

I am extremely grateful to them for their continued guidance and support.

Dr. Manisha Gupta

Editor-in-Chief

PIMT, Alour, Khanna

CONTENTS

LIQUIDITY PERFORMANCE OF CENTRAL POWER SECTOR ENTERPRISES IN INDIA: A

COMPARITIVE STUDY BETWEEN POWER GENERATION AND POWER TRANSMISSION

INDUSTRIES

Sudipta Ghosh 1

AN EVALUATION OF INTELLECTUAL CAPITAL DISCLOSURES IN ANNUAL REPORTS OF

SELECTED COMPANIES

Rishi Kesh, Harpreet Kaur 7

ANALYSIS OF CONSISTENCY IN PROFITABILITY: A STUDY IN THE CONTEXT OF SELECT INDIAN

PHARMACEUTICAL COMPANIES

Radhagobinda Basak 13

RELATIONSHIP AMONG GOLD PRICES AND STOCK INDICES – AN EMPIRICAL ANALYSIS WITH

REFERENCE TO BOMBAY STOCK EXCHANGE S&P METAL INDICES

Roshan Kumar, Manisha Gupta 22

CUSTOMERS’ PERCEPTIONS AND EXPECTATIONS TOWARDS SERVICE QUALITY INITIATIVES IN

MULTISPECIALITY HOSPITALS: A REVIEW

B.B.Singla, Shilpa Khanna 28

INFORMATION COMMUNICATION TECHNOLOGY- GAPS BETWEEN THEORY AND PRACTICE IN

TEACHER EDUCATION

Zeba Ilyas 33

SERVICE QUALITY DIMENSIONS IN THE INDIAN BUS TRANSPORTATION SECTOR: A

CONCEPTUAL REVIEW

Abhishek Asthana, Sindhu, M. S. Bhat 37

SUB PRIME LENDING CRISES AND PERFORMANCE OF PUBLIC SECTOR BANK IN INDIA

Asif Pervez, Rohit Bansal 44

AGILE METHODS TAILORING IN PROJECT DELIVERY: A SYSTEMATIC LITERATURE REVIEW

Pankaj Tiwari, Suresha B 50

PROJECT CREDIT APPRAISAL PROCESS AT A LEADING POWER FINANCING COMPANY IN

INDIA: A REVIEW

Navya Mohanty, Nisha Prakash 55

TECHNOLOGY AND FINANCIAL INCLUSION

Akhil Gupta, Kriti Aggarwal, Preeti Jain 66

TWITTER USAGE AMONG INDIAN BUSINESSES: A WEBSITE CONTENT ANALYSIS

Rajwinder Saini, Mandeep Kaur 72

MEDIA PREFERENCES AMONG CONSUMERS: EMPIRICAL EVIDENCE FROM INDIA

Roopali Batra, Varun Nayyar 77

DEMOGRAPHIC CHARACTERISTICS AND CONSUMER PURCHASE BEHAVIOUR TOWARDS

COUNTERFEIT COSMETIC BRANDS

Sonia Bajwa, Simranjit Singh 83

GENDER INCLUSION AT WORKPLACE: A THRUST TO TALENT MANAGEMENT

Moon Moon Lahiri, Deepti Sharma 94

DEFENCE INDUSTRIAL BASE AND CORPORATE PROFESSIONAL RESPONSIBILITY

LT Gen Anil Kapoor*, VSM, DGIS 98

SATISFACTION LEVEL OF THE EMPLOYEES WITH REFRENCE TO KUBER CASTING PRIVATE

LIMITED (147301)

Rajni Bala, Veeni 102

THE EFFECT OF DEMOGRAPHICS ON THE USAGE OF DIGITAL PAYMENT METHODS

Baljinder Kaur, Sunayna Khurana 107

PROFITABILITY AND PRODUCTIVITY IN BANKING SECTOR: A CASE STUDY OF PUBLIC SECTOR

BANKS IN INDIA

Surjit Singh 113

EMPLOYEE SATISFACTION: A CONCEPTUAL FRAMEWORK

Monika Chopra 121

ISSUE OF GENDER EQUALITY IN THE ERA OF GLOBALIZATION

Gurpreet Singh Uppal, Gopal Krishan 125

CUSTOMER SATISFACTION TOWARDS DEMAT ACCOUNT IN REAL VALUE RELIANCE MONEY

PVT. LTD

Shalini Sharma 129

CONSUMER PURCHASE BEHAVIOR REGARDING PERSONAL CARE PRODUCTS: A COMPARATIVE

STUDY AMONG RURAL AND URBAN CONSUMERS OF PUNJAB

K K Sharma , Monika Jindal 134

A STUDY OF RISING NON PERFORMING ASSETS (NPAS) IN THE BANKING SECTOR OF INDIA AND

ITS IMPLICATIONS

Mankaj Mehta, Gaurav Gupta 139

FACTORS OF STORE ATTRIBUTES AND IMAGE AND ITS IMPACT ON CONSUMER PURCHASE

INTENTION IN ORGANIZED GROCERY RETAIL STORES IN THE CITY OF BANGALORE

A.S.Suresh, V.Ramanathan 146

ENVIRONMENTAL REPORTING OF TOP INDIAN HOTEL COMPANIES – A CONTENT ANALYSIS OF

WEBSITE AND ANNUAL/CSR REPORT DISCLOSURE

Baljit Kaur, Dheeraj Nim 150

A STUDY ON MOBILE NUMBER PORTABILITY IN PANJAB

Raja Narayanan, Sandhir Sharma 160

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LIQUIDITY PERFORMANCE OF CENTRAL POWER SECTOR ENTERPRISES IN

INDIA: A COMPARITIVE STUDY BETWEEN POWER GENERATION AND

POWER TRANSMISSION INDUSTRIES

Sudipta Ghosh*

*Assistant Professor, Department of Commerce (UG & PG) , Prabhat Kumar College, Contai, Purba

Medinipur, West Bengal, India

ABSTRACT

Liquidity is the ability of a firm to meet its current obligations when they become due for payment by realizing

amount from current assets. Neither too high nor too low level of liquidity is desirable. Therefore, a sound

financial management policy seeks to maintain optimum level of liquidity for meeting its current obligations as

and when they become due without affecting profitability.

In this backdrop, the present study is an attempt to compare the liquidity performance between power

generation and power transmission industries during the period 2008-09 to 2017-18.

The findings of the study reveal that in spite of unsatisfactory liquidity performance in terms of current ratio of

both the industries (i.e., power and transmission), the true liquidity performance as measured by quick ratio of

both the industries in the Indian central power sector is found to be satisfactory during the study period. On the

average, there is no significant difference in liquidity performance between the two selected industries as

revealed by Fisher’s t test.

In finale, it may be concluded that both the industries have managed their current assets and current liabilities

efficiently during the period under study.

Key Words: Liquidity, Current Ratio (CR), Quick Ratio (QR), Power Generation, Power Transmission,

Fisher’s ‘T’ Test.

1. INTRODUCTION

Liquidity is the ability of a firm to meet its current

obligations when they become due for payment by

realizing amount from current assets. In fact, liquidity is

a precondition for the very survival of a firm, otherwise it

will result in bad credit rating, reduction in the value of

goodwill and ultimately leads to closure of a firm.

Neither too high nor too low level of liquidity is

desirable. Therefore, a sound financial management

policy seeks to maintain optimum level of liquidity for

meeting its current obligations as and when they become

due without affecting profitability.

2. PRIOR EVIDENCE

2.1 Empirical Studies

Various studies have been carried out with respect to

liquidity performance. Some of the important studies in

this context are briefly stated below:

Akkihal (1984), showed that the performance of working

capital of the selected firms was unsatisfactory and their

liquidity position was also alarming.

Jain (1993), in his study revealed that the current ratio of

the private sector paper companies registered a declining

trend while this ratio was found to be highly fluctuating

in the public sector paper companies. The study also

found that the inventory performance in the private sector

undertakings was comparatively better than that of the

public sector undertakings.

Sur (1997), examined the overall liquidity position of

Colgate Palmolive (India) and observed that the company

registered the most satisfactory liquidity position in the

year 1986, whereas in the year 1982 the liquidity of the

company was the worst.

Shin and Soenen(1998), observed a strong negative

relation between the length of firm’s net trade cycle and

its profitability. Further, it is also found that shorter

NTCs were associated with higher risk-adjusted stock

returns.

Lyroudi and Lazaridis (2000), examined the cash

conversion cycle (CCC) of Greek food companies. The

study found that there was a significant positive

relationship between cash conversion cycle and the

conventional liquidity measure of current and quick

ratios.

Deloof (2003), investigated the relationship between

working capital management and cash conversion cycle

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(CCC) of a sample of 1009 large Belgian non-financial

firms The researcher suggested that manager could create

value for their shareholders by reducing the number of

day’s accounts receivable and inventories to a reasonable

minimum.

Bardia (2006), observed that the liquidity policies

pursued by both SAIL and TISCO were efficient.

However, the study found that liquidity performance of

TISCO was better than that of SAIL.

Raheman and Nasr (2007), examined the inter-relation

between working capital management and profitability of

94 Pakistani firms listed on the Karachi stock exchange

and observed that the current ratio of the selected firms

was far below from the standard of 2:1.

Ghosh (2008), in his study examined the liquidity

management of TISCO Ltd. and observed that the current

ratio of the company was not satisfactory, whereas the

quick ratio was found to be moderately satisfied during

the entire period under study.

2.2 Research Gap

From the review of the past studies as briefly stated

above, it is observed that no study with respect to

liquidity performance has been carried out in the Indian

central power industry. Hence, the present study may be

considered as an attempt to contribute to the existing

literature.

3. OBJECTIVE OF THE STUDY

The main objective of the study is to compare the

liquidity performance between power generation and

power transmission industries in the Indian central power

sector.

4. HYPOTHESIS DEVELOPMENT

In conformity with the above objective of the study, the

following testable hypothesis has been formulated:

HO: There is no significant difference in average liquidity

performance between the selected industries.

HA: There is significant difference in average liquidity

performance between the selected industries.

5. RESEARCH DESIGN

5.1 Data and Study Period

Data have been sourced from secondary sources (i.e.,

published annual reports of the public enterprises

survey). To arrive at a meaningful comparison, aggregate

data have been used in the study.

The study has been carried out for a span of ten years i.e.,

from the financial year 2008-09 to the financial year

2017-18.

5.2 Sample Selection and Methodology

Power generation and power transmission in the Indian central power sector form the sample size of our study. Two

popular measures of liquidity performance are employed in the study. They are as follows:

Performance Drivers Performance Measures

Current Ratio (CR) Current Assets ÷ Current Liabilities

Quick Ratio (QR) (Current Assets – Stock – Prepaid Expenses) ÷

(Current Liabilities – Bank Overdraft)

To statistically examine whether there is any significant

difference in the average liquidity trends between the two

selected industries, Fisher’s ‘t’ test has been applied in

the study. The fisher’s ‘t’ statistic is computed as

follows:

t =

√

Where: S = √

–

Apart from the above, simple statistical measures like

average, standard deviation, and co-efficient of variation

have also been used in the study.

6. EMPIRICAL FINDINGS AND ANALYSIS

6.1 Liquidity Performance Analysis in terms of

Current Ratio

Current ratio measures short-term solvency of a firm.

Higher the ratio, higher is the liquidity position of a firm

and vice versa. Conventionally, a current ratio of 2:1 is

considered to be satisfactory. The results of current ratio

are shown in Table – I as well as in Figure – I below:

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Table – I: Current Ratio (CR) of the Selected Industries during 2008-09 to 2017-18

Industry→

Year↓

Current Ratio (CR)

Power Generation

Industry

Power Transmission

Industry

2008-09 2.57 1.00

2009-10 2.68 5.78

2010-11 2.53 1.05

2011-12 2.21 0.65

2012-13 2.00 0.46

2013-14 1.70 0.48

2014-15 1.49 0.38

2015-16 1.35 0.40

2016-17 1.06 0.45

2017-18 1.02 0.47

Average 1.86 1.11

S.D. 0.63 1.66

C.V. (%) 33.87% 149.55%

Source: Computed from the Published Annual Reports of Public Enterprises Survey

Power Generation Industry: From Table – I and Figure

– 1, it is observed that current ratio of power generation

industry has shown almost a decreasing trend. The ratio

varies from 1.02 in the year 2017-18 to 2.68 in the year

2009-10. The average CR is found to be at 1.86 which is

below the conventional norm of 2:1. Hence, the liquidity

performance of power generation industry in terms of the

conventional standard is not satisfactory. The ratio has

fluctuated moderately with a C.V. at 33.87% during the

period under study.

Power Transmission Industry: The current ratio of

power transmission industry shows no specific trend,

which ranges between 0.38 in the year 2014-15 and 5.78

in the year 2009-10 with an average of 1.11. The current

ratio also lies below the standard of 2:1 during all the

years under study. Thus, liquidity performance of power

transmission industry is not satisfactory. The current ratio

has fluctuated erratically with a C.V. at 149.55%.

On the whole, liquidity performance of both the

industries (i.e., power and transmission) is found to be

unsatisfactory as the current ratio of both the industries

lies below the standard norm.

2.57 2.68 2.53 2.21 2

1.7 1.49 1.35 1.06 1.02 1

5.78

1.05 0.65 0.46 0.48 0.38 0.4 0.45 0.47

0

1

2

3

4

5

6

7

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18

CR

(in

tim

es)

Years

Figure - I: Current Ratio (CR)

PowerGenerationIndustry

PowerTransmission Industry

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6.2 Liquidity Performance Analysis in terms of Quick

Ratio

To overcome the limitation of current ratio, quick ratio

(also known as acid-test ratio) has been designed to

measure the true liquidity position of a firm. Higher the

ratio, the more favourable is the liquidity position and

vice versa. Conventionally, a quick ratio of 1:1 is

considered to be satisfactory.

The results of the quick ratio are shown in Table – II and

Figure 2 below:

Table – II: Quick Ratio (QR) of the Selected Industries during 2008-09 to 2017-18

Industry→

Year↓

Quick Ratio (QR)

Power Generation

Industry

Power Transmission

Industry

2008-09 2.36 0.97

2009-10 2.49 5.75

2010-11 2.36 1.03

2011-12 2.07 0.62

2012-13 1.86 0.42

2013-14 1.54 0.45

2014-15 1.31 0.35

2015-16 1.16 0.36

2016-17 0.88 0.42

2017-18 0.60* 0.36*

Average 1.66 1.07

S.D. 0.67 1.66

C.V. (%) 40.36% 155.14%

Source: Computed from the Published Annual Reports of Public Enterprises Survey

(*Estimated figures)

Power Generation Industry: According to Table – II

and Figure – 2, quick ratio of power generation industry

reveals a decreasing trend (except the year 2009-10)

during the entire study period. The ratio moves from 0.60

in the year 2017-18 to 2.49 in the year 2009-10 with an

average of 1.66. Except the last two years, the ratio lies

above the conventional norm of 1:1. Thus, liquidity

performance of power generation industry in terms of

2.36 2.49 2.36 2.07 1.86

1.54 1.31 1.16 0.88

0.6 0.97

5.75

1.03 0.62 0.42 0.45 0.35 0.36 0.42 0.36

0

1

2

3

4

5

6

7

2008-092009-102010-112011-122012-132013-142014-152015-162016-172017-18

QR

(in

tim

es)

Years

Figure - II: Quick Ratio (QR)

PowerGenerationIndustry

PowerTransmission Industry

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quick ratio is satisfactory during the study period. The

ratio has fluctuated moderately with a C.V. at 40.36%.

Power Transmission Industry: The quick ratio of

power transmission industry depicts more or less a

decreasing trend. The ratio varies from 0.35 in the year

2014-15 to 5.75 in the year 2009-10 with an average of

1.07 which is above the conventional standard of

1:1.Going by the conventional standard, liquidity

performance of the power transmission industry is

satisfactory. The ratio has fluctuated erratically during

the study period with a C.V. at 155.14%.

On the whole, liquidity performance of both the

industries in terms of quick ratio is found to be

satisfactory during the study period.

6.3 Fisher’s ‘T’ Test Analysis

To know whether there is any significant difference

between the selected industries with respect to CR and

QR, Fisher’s ‘t’ test has been applied. The results are

shown in Table – III below:

Table – III: Results of Fisher’s ‘t’ test for Current Ratio and Quick Ratio between Power Generation Industry

and Power Transmission Industry

Particulars Current Ratio Quick Ratio

Null Hypothesis (HO) Average Current Ratio of Power Generation

Industry = Average Current Ratio of Power

Transmission Industry

Average Quick Ratio of Power Generation Industry =

Average Quick Ratio of Power Transmission Industry

Alternative Hypothesis (HA) Average Current Ratio of Power Generation

Industry ≠ Average Current Ratio of Power

Transmission Industry

Average Quick Ratio of Power Generation Industry ≠

Average Quick Ratio of Power Transmission Industry

Degree of Freedom (10+10-2) = 18 (10+10-2) = 18

Level of Significance 5% 5%

Calculated Value of ‘t’ 0.71 1.00

Critical Value of ‘t’ 2.10 2.10

Result Null Hypothesis accepted Null Hypothesis accepted

Source: Computed

From Table – III, it is observed that the results are

statistically insignificant in both the cases i.e., CR and

QR. This is indicative of the fact that on the average,

there is no significant difference in liquidity performance

between power generation and power transmission

industry. This leads to the acceptance of null hypothesis

of the study.

7. EPILOGUE

In spite of unsatisfactory liquidity performance in terms

of current ratio of both the industries (i.e., power and

transmission), the true liquidity performance as measured

by quick ratio of both the industries in the Indian central

power sector is found to be satisfactory during the study

period. On the average, there is no significant difference

in liquidity performance between the two selected

industries as revealed by Fisher’s t test.

In finale, it may be concluded that both the industries

have managed their current assets and current liabilities

efficiently during the period under study.

8. LIMITATIONS AND SCOPE FOR FURTHER

RESEARCH

The study is limited to ten years only and based on

secondary data. Moreover, the study reflects a partial

view of liquidity performance in Indian power industry.

In spite of these limitations, further in-depth study may

be undertaken by taking longer time period and by

including other measures of liquidity.

REFERENCES

1. Akkihal,G.H. (1984): “Working Capital Management in

Small Scale Industrial Units in Hubli-Dharwat Corporation

Area”, Unpublished Thesis, Karnataka University.

2. Bardia, S.C. (2006): “Liquidity Trends in the Indian Iron

and Steel Industry: A Comparative Study of SAIL and

TISCO”, The ICFAI Journal of Financial Economics, Vol.

4, No. 1.

3. Chandra, Prasanna (2011): “Financial Management –

Theory and Practice”, 8th Edition, Tata McGraw Hill

Education Private Limited, New Delhi.

4. Das, N.G. (1990): “Statistical Methods – Vol.II”, M.Das &

Co., Kolkata.

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5. Deloof, M. (2003): “Does Working Capital Management

Affect Profitability of Belgian Firms?”, Journal of Business

Finance and Accounting, Vol.30, Issue-3.

6. Ghosh, Sudipta (2008): “Liquidity Management: A Case

Study of TISCO Ltd.”, The Management Accountant,

February Issue.

7. Jain, P.K.(1993): “Management of Working Capital” R B S

A Publishers, Jaipur, India.

8. Kothari, C.R. (2011): “Research Methodology – Methods

and Techniques”, 2nd Edition, Tata McGraw – Hill

Publishing Company Ltd., New Delhi.

9. Lyroudi, K. and Lazaridis, J.(2000): “ The Cash

Conversion Cycle and Liquidity Analysis of the Food

Industry in Greece”, Retrieved from www http://

papers.ssrn.com/id=236175.

10. Published Annual Reports of Public Enterprises Survey

(2008-09 to 2017-18).

11. Raheman, A. and Nasr, Moh’d.(2007): “Working Capital

Management and Profitability- Case of Pakistani Firms”,

International Review of Business Research Papers, Vol. 3,

No.1 , March Issue.

12. Shin, H. and Soenen, L.A. (1998): “Efficiency of Working

Capital Management and Corporate Profitability”,

Financial Practice and Education, Vol.2.

13. Sur, D. (1997): “Working Capital management in Colgate

Palmolive (India) Ltd. - A Case Study”, The Management

Accountant, November Issue.

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AN EVALUATION OF INTELLECTUAL CAPITAL DISCLOSURES IN ANNUAL

REPORTS OF SELECTED COMPANIES

Rishi Kesh*, Harpreet Kaur

**

*Research Scholar, I.K.G. Punjab Technical University, Jalandhar, Punjab, India

**Director, Khalsa Institute of Management and Technology for Women, Ludhiana, Punjab, India

ABSTRACT

The study has been conducted to know the extent of intellectual capital disclosure in annual reports of the

companies and impact of independent variable like age of company, managerial ownership and industry

difference of company on intellectual capital disclosure. For this study data has been collected from the

annual reports of 10 large cap companies of BSE for the year 2017-18. Sample consists of 5 companies of

private sector banks and 5 companies of auto-mobile sector. A set of 78 elements of intellectual capital as used

by Bukh et al. (2005) has been used to collect the data. With the help of content analysis disclosure score for

the intellectual capital has been calculated and the data has been analyzed. Results of descriptive statistics have

found very low level of disclosure for intellectual capital. Category-wise information technology has been

found to be the most disclosed category of intellectual capital. Regression analysis of the data has shown that

there was no significant impact of age of company, managerial ownership and industry difference on

disclosure of intellectual capital. Independent t-test has also been used and the result showed that there was no

significant difference between samples.

Key Words: Intellectual Capital, Disclosure, Age of company, Managerial ownership, Industry Difference

INTRODUCTION

In the current era, knowledge is considered as a strategic

resource and it helps the organizations to become global

leader. This resource i.e. intellectual capital can be

generated at individual and organizational level.

Individual knowledge includes personal knowledge,

skills and talent and the organizational knowledge capital

includes infrastructure, networking relationships,

technologies, routines, trade secrets, procedures and

organizational culture (Bontis et al., 1999). Jurczak

(2008) describes intellectual capital (IC) as all knowledge

resources (material or non-material, tangible or

intangible) that the organization utilizes in creating the

value needed to gain competitive advantage in long

period. He has classified IC in three components i.e.

human capital, organizational capital and relational

capital. Human Capital includes competence capital,

attitude and intellectual agility of all members of the

organization and their ability to make decisions, and to

solve the problems. Organizational capital includes all

those resources which have been built through research

and development or through long term healthy practices

followed in the organization. It includes intellectual

property, organizational structure, databases and

computer equipment, management style and

organizational culture. Relational Capital includes the

relationship of the organization with the customer,

strategic partners, investors etc.

A number of studies have been made on intellectual

capital disclosure (ICD) practices with the help of IPO

prospectus (Harman, 2013; Bukh et al., 2005; Rimmel et

al., 2009). Besides this, many studies have been made on

annual reports of companies (Guthrie et al., 2000;

Alexander Bruggen et al., 2009; Kamath, 2008;

Abeyshekra, 2010). In most of the studies very small

amount of disclosure of intellectual capital had been

reported. Secondly, no clear pattern had been found for

the impact of company characteristics on the level of

intellectual capital disclosure. So, to know the extent of

intellectual capital disclosure and the impact of company

characteristics on the level of disclosure in Indian

companies, the present study has been conducted on with

the help of annual reports of the selected companies. The

study has been divided into different parts i.e.

introduction, review of literature, need of the study, data

and methods, empirical analysis, research implications,

conclusion, limitations of the study and scope for future

research.

LITERATURE REVIEW

Kamath (2008) observed small extent of ICD in Indian

firms and sector-wise his study found that disclosure of

IT sector disclosure was the highest followed by

telecommunication sector and entertainment industry.

Joshi et al. (2009) investigated that intellectual capital

recording and reporting in the Indian knowledge sector

companies was almost negligible. The study also found

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that there was no uniformity regarding intellectual capital

reporting in annual reports. Paramashivaiah et al. (2013)

in their study also reported that there was disparity and

low disclosure of intellectual capital of the sample

companies. Singh et al. (2011) in their paper investigated

and found that category-wise external capital was the

most disclosed category followed by employee

competency. Element-wise „brand‟ and „business

collaboration‟ was found to be the most disclosed

element. Joshi et al. (2012) did a comparative analysis on

ICD trends between information technology companies

of two countries i.e. India (developing economy) and

Australia (developed economy). They highlighted level

of voluntary disclosure was found to be low in both the

countries. Harman (2013) made an exploratory study on

ICD and found that disclosure of structural capital is

highest followed by relational capital and human capital.

Bukh et al. (2005) observed that disclosure of intellectual

capital was found to be affected by company

characteristics like industry difference and managerial

ownership. On the contrary, company size and age did

not affect disclosure of intellectual capital. Study

conducted by Kamath (2008) found no significant

relation between ICD and company size. Study of

Rimmel et al. (2009) found that the industry difference

and age of the company had a significant impact on

intellectual capital disclosure. This study did not find

significant impact of managerial ownership and size of

company on intellectual capital disclosure in IPO

prospectuses. Bruggen et al. (2009) conducted a study

entitled “Determinants of Intellectual Capital Disclosure:

Evidence from Australia”. The study found that industry

type and type of the company were found to be

determinant factor for the ICD. Further results suggested

that level of ICD is not related to the level of information

asymmetry. Singh et al (2011) found that disclosure

contributes to formation of wealth. Cordazzo and

Vergauwen, (2012) who conducted the study in UK

found two factors i.e. age and independence of board as

significant factors, which influence ICD. Study

conducted by Rashid et al. (2012) in Malaysia also

showed that certain company characteristics like board

size, board independence, age of company, leverage ratio

and underwriter and listing board are the factors which

affect disclosure of IC.

NEED OF THE STUDY

It is evident from the available literature that the level of

disclosure for the intellectual capital is below average

and also no consistent pattern of disclosure is found with

regard to characteristics of companies. Most of the

studies relating to ICD had been conducted in developed

economies (Cordazzo and Vergauwen, 2012) and a very

few studies had been done on developing economies

(Rashid et al., 2012; Kamath, 2008). In developing

economies, the implications of IC are supposed to carry

greater significance, because the disclosure of non-

financial information along with financial information

may create more confidence among the investors, which

ultimately boost the inflow of capital in such nations.

Recently, many firms of developing countries have

started measuring, managing and reporting their

intellectual capital. However, the complete disclosure of

intellectual capital is still at its embryonic stage. Keeping

in mind these factors, the present study has been

conducted on intellectual capital disclosure practices in

annual reports of large cap companies of private sector

banks and auto-mobile companies of India for the year

2017-18 with the following specific objectives:

To study element-wise and category-wise

disclosure of IC in annual reports of the

selected companies

To examine the impact of age of company,

managerial ownership and industry difference on

ICD.

RESEARCH METHODOLOGY

This part of the study discusses the how sample of has

been selected, elements of intellectual capital,

determinants of IC and method of data analysis.

SAMPLE SELECTION

Annual report of 10 companies listed in Bombay stock

exchange for the period 2017-18 have been taken in the

sample. Large cap section of BSE consists of 30

companies, of which 13 companies belong to either

private sector banks or auto mobile sector. A random

sample consists of 5 private sector banks and 5

companies of auto-mobile sector have been taken for the

present study.

ELEMENTS OF IC AND CONTENT ANALYSIS

Based upon prior studies (Bukh et al., 2010; White et al.,

2005; Rimmel et al., 2009; Cordazzo & Verganwen,

2012) 78 elements classified into six categories i.e

Employees (27 items), Customers (14 items), IT (5

items), Processes (8 items), Research and development

(9 items) & Strategic statements (15 items) of

intellectual capital have been used in this study. Manual

content analysis (Bozzolan et al., 2003; Yi & Davey,

2010; Abhayawansa & Azim, 2014) technique has been

used to count the elements of IC from each annual report.

DETERMINANTS OF ICD

Following independent variables have been chosen to

study the impact of these variables on the disclosure of

intellectual capital:

Age of the Company: It is expected that older

companies are less risky for making investment

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as compared to younger companies. Studies

conducted by Singh and Van der Zahn (2008)

and Rimmel et al. (2009) found age to be the

significant influencing factor for ICD. Some

other authors like Bukh et al. (2005) found in

their study that age of the company is not a

significant factor, which affect ICD.

Managerial Ownership: Promoters managed

companies are usually closely-held companies.

Practically, owners could get the non-financial

information of the company through information

channels. Thus, we can expect that level of

intellectual capital disclosure will be lesser in

those companies in which larger share of the

companies are held by their promoters. It is

expected that managerial ownership may be

negatively affecting the level of intellectual

capital disclosure.

Industry Difference: In this study, two vital and

growing sector of Indian economy have been

taken to evaluate the impact of industry

difference in ICD. Banking sector in current

scenario is very vibrant. Private sector banking is

more technology driven as well as have more

skillful and talented manpower. On the other

hand, auto-mobile sector is more capital

intensive sector. So, impact of industry

difference on their ICD is interesting to note.

METHOD OF DATA ANALYSIS

Descriptive statistics has been applied to check the extent

of IC disclosure. Pearson correlation has been used to

check the relationship between independent variables and

score of ICD Regression analysis (Cordazzo, 2007;

Abeysekera, 2010; Cordazzo and Vergauwen, 2012) has

been used to know the impact of independent variables

on intellectual capital disclosure. Finally, each of the

three independent variables have been divided into two

samples and independent t-test is applied to know the

difference of means between the samples.

RESULTS & DISCUSSION

This section represents the results of descriptive

statistics, Pearson correlation, regression analysis and

independent t-test. The results of descriptive statistics for

the disclosure of intellectual capital elements are

presented in table I:

Table I: Results of descriptive statistics for disclosure of intellectual capital

N Mean SD Min. Median Max.

10 24.50 7.337 13 26.50 36

These results suggest that the extent of disclosure for the

intellectual capital related information in annual reports

of Indian companies is not satisfactory. Disclosure score

varies from 13 to 36 items out of 78 possible elements

and average disclosure for the sample is 24.50. Value of

standard deviation is found to be 7.337, which indicates

higher variation in disclosure of intellectual capital

elements. These results are in line with findings of Bontis

(2003); Garciameca et al. (2005); Kamath (2008); Joshi

& Ubha (2009); Joshi et al. (2012) ; Bhatia et al. (2015).

Table II: Results of descriptive statistics (category-wise)

Dimension of IC

(Maximum possible score)

N Mean SD Min. Median Max. Dis. Index*

Information Technology (5) 10 3.40 1.174 2 3.50 5 68%

Processes (8) 10 3.70 1.636 1 4.00 6 46.25%

Research and Development (9) 10 1.70 1.337 1 1.00 5 15.55%

Employees (27) 10 5.30 3.302 2 5.00 13 19.63%

Customers (14) 10 3.10 1.853 1 3.00 6 22.14%

Strategic statements (15) 10 7.30 2.003 5 7.50 10 48.67%

*Disclosure Index = mean/maximum possible score of the category x 100

Table II presents the category-wise results of descriptive

statistics. The highest score of disclosure index for the

intellectual capital is in the category of information

technology i.e. 68% followed by strategic statement

category (48.67%). These results are in consistent with

results of studies conducted by Yi & Davey (2010) and

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Haji & Ghazali (2012). Information relating to research

and development is the least disclosed category. The

reported maximum score for the information technology

category is 5 out of 5 possible score. In case of process

category, in which maximum 6 items have been

disclosed out of 8 possible items and disclosure for the

strategic statement related information is 10 out of

maximum possible score of 15 elements. The average

score of disclosure for the information technology,

process, research and development, human resource,

customers and strategic statement related items are found

to be 3.40, 3.70, 1.70, 5.30, 3.10 and 7.30 items

respectively. The values of the standard deviation are

showing that there is low variation for the disclosure of

items of intellectual capital in all the categories.

PEARSON CORRELATION RESULTS

In this part, Pearson correlation has been calculated and

the relationship between the variables under study has

been reported. To tabulate the results, following

abbreviation have been used for the variables

ICD = intellectual capital disclosure, AGE = age of

company from the date of incorporation till the date of

annual report, MOWN = managerial ownership, IDIFF =

industry difference, EMP = employees, CUST =

customers, IT = information technology, PRO = process,

R&D = research and development and SSTM = strategic

statement.

Table III: Results of Pearson Correlation

ICD AGE MOWN IDIFF EMP CUST IT PRO R&D SSTM

ICD 1

AGE .222 1

MOWN -.108 -.073 1

IDIFF -.158 .510 .701* 1

EMP .851** .101 .366 .096 1

CUST .552 .126 .271 .057 .539 1

IT .361 .232 -.588 -.359 -.034 .184 1

PRO .810** -.129 -.433 -.580 .615 .231 .243 1

R&D .323 .873** .041 .552 .249 -.031 .085 -.046 1

SSTM .662* -.082 -.577 -.474 .321 -.069 .369 .810** .120 1

** Correlation is significant at the 0.01 level (2-tailed). * Correlation is significant at the 0.05 level (2-tailed).

Positive & significant correlation was reported between

industry difference and managerial ownership; strategic

statement and ICD at 5% level of significance. At 1%

level of significance positive & significant correlation

was found between employee and ICD; process & ICD;

research and development and age; strategic statement

and process.

MULTIPLE REGRESSION ANALYSIS

In this part of the study, impact of age, managerial

ownership and type of the company on intellectual

capital disclosure has been analyzed. Regression analysis

was performed to analyze the impact of above said

characteristics of the company on ICD. The regression

model can be represented as below:

ICDjt = α + β1 AGEjt + β2 MOWNjt + β3 IDIFFjt + ejt

Where ICD is the intellectual capital disclosure of

company j in the year t; AGEjt is the age of company j in

year t, IDIFFjt is the industry difference of the company j

in the year t and β2 MOWNjt is the managerial/promoters

ownership of the company j in the year t. α is

representing regression intercept; βi the parameters to be

estimated, i is 1, 2 & 3 and ejt the error term.

Null Hypothesis: There exists no significant impact of

company characteristics (Age of company, managerial

ownership and industry difference) on intellectual capital

disclosure.

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Table IV: Result of regression analysis

Probability of F-statistics was found to be 0.560 which is

much higher than 0.05 level of significance. So, above

mentioned null hypothesis cannot be rejected. Thus,

regression analysis of three independent variables; age of

company, managerial ownership and industry difference

against the extent of intellectual capital disclosure

demonstrated no significant impact. Results of some of

the earlier studies were in line with our current result.

Study of Bukh et al. (2005) reported that age of company

was not a significant variable for the disclosure of IC, but

industry difference and managerial ownership was

reported to be significant variable of the ICD. White et

al. (2010) analyzed the data of their study with the help

of multiple regression and found that age and managerial

ownership were not significant for disclosure of IC.

Regression model in the study conducted by Cordazzo

(2007) reported age of company as insignificant variable

while, managerial ownership was found to be significant

factor for disclosure of IC. Contrary to our findings

Mehra (2010) reported that nature of industry is a

significant characteristic for ICD. Alcaniz & Bezares

(2015) conducted study and reported age of company as

insignificant factor while type of firm and retained

ownership as significant variables for the ICD.

INDEPENDENT T-TEST RESULTS

Independent t-test was performed to check, if there is

significant difference between two samples for the three

characteristics of the companies; age of company,

managerial ownership and industry difference.

Null hypothesis: There is no significant difference

between mean of extent of ICD of two samples for each

of independent variable.

Table V: Result of Independent t-test

Variables Samples N Mean SD T p

Age of Company ≥ 25years 5 26.00 8.276

0.624 0.550 < 25 years 5 23.00 6.856

Managerial Ownership ≥ 30 % 4 22.25 10.905

-0.654 0.552 < 30% 6 26 4.336

Industry Difference Banking 5 25.60 4.722

0.453 0.663 Automobile 5 23.40 9.788

Probability value of t-test was found to be more than 0.05

level of significance for each of independent variable

mentioned above. Thus with 95% level of confidence

null hypothesis cannot be rejected here. So, the results

indicate that there is no significant difference between

the means of two samples for each of three independent

variables. The result of the variable industry difference is

inconsistent with the result of prior study conducted by

Ousama et al. (2012) , which reported that disclosure in

the high technology companies were higher.

RESEARCH IMPLICATIONS AND

RECOMMENDATIONS

Contrary to expectations and findings of many of earlier

studies, this study found no significant impact of

independent variables on intellectual capital disclosure.

Many factors like business environment, nature of

Variables Coefficients SE T p-value

Constant 29.178 7.807 3.737 0.010

Age of Company .272 0.190 1.431 0.202

Managerial Ownership .310 0.306 1.012 0.350

Industry Difference -14.715 11.038 -1.333 0.231

R 0.523

0.273

-0.090

0.752

R Square

Adjusted R Square

F .560

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industry, managerial shareholding etc. may be restricting

the companies to disclose more about intellectual capital.

In addition to this, Indian stock market has always

remained volatile in the absence of transparent

mechanism of information. Therefore, to win the trust of

investors and other stakeholder, disclosure of IC becomes

all the more important. So, it is highly recommended

that companies should increase the level of disclosure for

intellectual capital information in annual reports along

with other reports.

CONCLUSION

The study has been conducted to know the extent of ICD

in annual reports of the companies and impact of certain

characteristics of company on intellectual capital

disclosure. To verify these assumptions, data was

extracted from the selected sample with the help of

content analysis and then the data was analyzed. Results

of descriptive statistics reported that very low level of

disclosure was found and category-wise information

technology was found to be the most disclosed category.

Regression analysis of the data reported that there was no

significant impact of age of company, managerial

ownership and industry difference on disclosure of

intellectual capital. Independent t-test was also used and

the result showed that there was no significant difference

between two samples.

LIMITATIONS OF THE STUDY AND SCOPE FOR

FUTURE RESEARCH

The study was conducted with the help of the annual

report of 10 companies of two sectors only. Widening the

scope with regard to number of companies and sectors

may give different results. In addition to this, annual

report of only one year has been taken into account and

the study may be extended to include reports of more

years. Moreover, the focus of annual reports remains on

financial information, but for non- financial information

like intellectual capital, annual report may not be

sufficient. Study may be carried out with the help of

documents like prospectus issued at the time of initial

public offering (IPO), which may give accurate result.

Last but not the least, collection of data with the help of

manual content analysis may not be free from subjective

judgment and error of omission.

REFERENCES

1. Abeysekera, I. (2010), The influence of board size on

intellectual capital disclosure by Kenyan listed firms,

Journal of Intellectual Capital, 11 (4), 504-518.

2. Abhayawansa, S. (2011), A methodology for investigating

intellectual capital information in analyst reports, Journal of

Intellectual Capital, 12(3), 446 – 476.

3. Bhatia, M., & Agarwal, B. (2015), Intellectual Capital

Disclosures in IPO Prospectuses of Indian

Companies. International Journal of Social Sciences and

Management, 2(1), 40-51.

4. Bontis, N. (2003), Intellectual Capital Disclosure in

Canadian Corporations, Journal of Human Resource

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5. Bontis, N., Dragonetty, N.C., Jacobsen, K. and Roos, G.

(1999), The knowledge toolbox: a review of the tools

available to measure and manage intangible resources,

European Management Journal, 17(4), 391-402.

6. Bruggen, A., Vergauwen, P. & Dao, M. (2009),

Determinants of intellectual capital disclosure: evidence

from Australia, Management Decision, 47 (2), 233 – 245.

7. Cordazzo, M. (2007), Intangibles and Italian IPO

prospectuses: a disclosure analysis. Journal of Intellectual

capital, 8(2), 288-305.

8. Garcia-Meca, E., & Martínez, I. (2005), Assessing the

quality of disclosure on intangibles in the Spanish capital

market. European Business Review, 17(4), 305-313.

9. Guthrie, J. and Petty, R. (2000), Intellectual capital:

Australian annual reporting practices, Journal of Intellectual

Capital, 1(3), 241-251.

10. Haji, A.A. & Ghazali, M.N. A. (2012), Intellectual capital

disclosure trends: some Malaysian evidence. Journal of

Intellectual Capital, 13(3), 377-397.

11. Joshi, M. and Ubha, D. S. (2009), Intellectual Capital

Disclosures: the Search for a new Paradigm in Financial

Reporting by the Knowledge Sector of Indian Economy,

Electronic Journal of Knowledge Management, 7 (5), 575 –

582.

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methods, Economics and organization of enterprise, 1(1),

37-45.

13. Kamath, B. (2008), Intellectual capital disclosure in India:

content analysis of “TecK” firms, Journal of Human

Resource Costing & Accounting, 12(3), 213 – 224.

14. Mehra, V (2010), Accounting and reporting of intangible

assets in India, (Doctorate thesis), Department of Commerce

and Business Management, Guru Nanak Dev University,

Amritsar, Punjab, India.

15. Paramashivaiah, P. and Puttaswamy, (2013), Intellectual

Capital Disclosure Practices: A New Paradigm in Financial

Reporting, Vidyaniketan Journal of Management and

Research, 1(2), 85-99.

16. Rashid, A., Kamil Ibrahim, M., Othman, R., & Fong, S.K.

(2012), IC disclosures in IPO prospectuses: evidence from

Malaysia. Journal of intellectual capital, 13(1), 57-80.

17. Rimmel, G., Nielsen, C. and Yosano, T. (2009), Intellectual

capital disclosures in Japanese IPO prospectuses, Journal of

Human Resource Costing & Accounting, 13 (4), 316 – 337.

18. Singh, S. & Kansal, M. (2011), Voluntary disclosures of

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301 – 318.

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Bukh, P. (2010), The nature and extent of voluntary

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Capital, 11(4), 519-536.

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ANALYSIS OF CONSISTENCY IN PROFITABILITY: A STUDY IN THE

CONTEXT OF SELECT INDIAN PHARMACEUTICAL COMPANIES

Radhagobinda Basak*

*Assistant Professor, Department of Commerce, Sidho-Kanho-Birsha University, Purulia

ABSTRACT

Pharmaceutical sector had been one of the fastest growing business sectors in India during the last decade. In

2015, the sector held notable positions all over the world in terms of both volume of production (3rd

in the

world) and value of production (14th

in the world). In the same year, the country possessed more than 3000

pharmaceutical companies. The average CAGR of the sector during the last decade was nearly 18 per cent and

it is expected to remain at 15 per cent in near future. Keeping pace with this high growth rate of the sector, the

major firms of this sector showed satisfactory profit earning capacity during the last decade though some firms

suffered from inconsistency in profitability which may hinder its prospect in competitive environment. So,

maintaining a consistency in profitability was a major challenge for the Indian pharmaceutical firms especially

in the market where they have immense chance to grow.

In this backdrop, the present study aims at measuring the consistency in profitability of top ten Indian

pharmaceutical companies. For measuring the profitability of the firms, three relevant financial ratios

(RONW, ROCE and ROA) have been used. In case of each of the selected ratios, individual ranks have been

assigned to the companies on the basis of their average profitability and variability in profitability, respectively.

For measuring the overall Profitability performance and overall consistency in profitability, separate sets of

composite ranks have been assigned to the companies. Finally, an intra and inter firm comparison in the sector

on the basis of variability in profitability has been done using ANOVA technique.

Key words: Profitability, Consistency, Composite ranking, Intra and inter firm comparison

INTRODUCTION

Pharmaceutical sector had been one of the fastest

growing sectors in India with 17.90 per cent compound

annual growth rate along with an increase in revenue

from US$ 6 billion to US$ 36.7 billion during the last

decade (2005-2016) (IBEF report on Indian

Pharmaceutical Industry, 2017). In 2015, the Indian

pharmaceutical sector held 3rd

position in terms of

volume of production and 14th in terms of value of

production globally and the sector was predicted to have

a net worth of USD 26 billion (Alamelu et al., 2016). In

the same year, India had 10500 manufacturing units and

over 3000 pharmaceutical companies (IBEF report on

Indian Pharmaceutical Industry, 2019). Keeping pace

with this high growth rate of the sector, the major firms

of this sector showed satisfactory profit earning capacity

during the last decade though some firms suffered from

inconsistency in profitability which may hinder its

prospect in competitive environment. Therefore,

maintaining a consistency in profitability is a major

challenge for the Indian pharmaceutical firms especially

in the market where they have immense chance to grow.

In this background, undertaking a study to measure the

consistency in profitability of major Indian

pharmaceutical firms might not be imprudent and that is

what has been attempted in this study.

The remainder parts of the study have been structured

into eight more sections. Section 2 has dealt with the

review of related literature and section 3 has focused on

the research gap of the present study. Section 4 has

enumerated the objectives of the study. An overview of

pharmaceutical enterprise in India has been reflected in

section 5. The methodology of the present study has been

discussed in section 6. The analysis and findings of the

study have been reflected in section 7. Conclusion has

been drawn in section 8. Section 9 exposes the

limitations of the present study and section 10 proposes

some scopes for further studies in this field.

REVIEW OF LITERATURE

A number of studies have been carried out in recent years

on profitability of pharmaceutical enterprise in India and

neighbouring countries. Some of those, till reviewed, are

as below:

Vatalia, Jadav and Belani (2012) analyzed the

profitability and consistency of performance of four

Indian pharmaceutical companies with 3 ratios (gross

profit margin, net profit margin and operating expenses

ratio) for four years. As per their study, the most

consistent firm as per profitability could not occupy the

most significant position as per mean of profitability.

This finding was also echoed in the study of Devi and

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Maheswari (2015) though they measured short term

solvency ratio, long term solvency ratio and profitability

ratio for five years. Adhikari et al. (2014) analysed

profitability of SBI five ratios- operating profit to

working funds, ROA, ROE, ROI and EPS. With the help

of ANOVA test, the study found that profitability of SBI

was not consistent during the study period.

Geethalakshmi and Jyothi (2016) tried to find out the

factors affecting the profitability of pharmacy firms of

India. They selected five companies (Sun Pharma, Dr.

Reddy‟s, Cadila, Aurobindo and Lupin) and analyzed the

data for ten years. Six profitability ratios were taken into

consideration. Both average profitability and variability

in profitability were measured separately for each ratio.

As per average profitability, Sun Pharma was in the

highest position while Cadila showed least variability in

profitability. Bijendra and Singhvi (2017) analysed

liquidity and profitability of the pharmaceutical

companies in India. In the study, only four major

companies were taken and data for four years were

analysed. Six profitability ratios were considered- GP,

OP, NP, ROCE, RONW and EPS. The study found

significant difference in profitability among the

companies using ANOVA test. Swadia (2018) analysed

profitability of selected pharmaceutical companies in

India with the help of two ratios- GP margin and NP

margin. ANOVA results showed that there was

difference in profitability among the selected companies.

Dasgupta and Sen (2016) assessed the profitability

position of the scheduled commercial public and private

sector banks in India and tested the consistency in

profitability position. To analyze profitability, three

ratios were used in the study- RONW, Net Profit to Total

Fund and Net Interest Income to Total Fund. For

measuring consistency in profitability, CV was used.

Composite ranks were assigned to the sample units on

the basis of their overall consistency in profitability. For

measuring whether profitability of each bank differs from

each other, two-way ANOVA was used. Before applying

ANOVA, normality of data was tested through Jarque-

Bera test statistic. The study found that consistency in

profitability of private banking sector was better than that

of public banking sector. Further, the ANOVA results

showed that at least two banks were different in terms of

profitability (Sen & Dasgupta, 2017). In this context,

Basha and Abdul (2017) assessed consistency in

profitability of select housing finance companies in India

using two ratios- ROCE and RONW. On the basis of CV,

ranks were assigned. Puwar et al. (2017) analysed

profitability of 12 leading pharmaceutical companies in

India using Du point technique. ROE, net profit margin

and operating profit margin were used to measure

profitability. Tyagi and Nauriyal (2016) identified ROA

as indicator of profitability and found that export

intensity, market share, R&D intensity capital intensity

and size are important determinants of profitability in

Indian pharmaceutical firms. Yao et al. (2018) attempted

to find out the profitability determinants of financial

institutions in Pakistan using four ratios- ROA, ROE,

PAT to average Assets and PBT to average Assets. Size,

higher solvency, financial structure, operating cost,

labour productivity, market power and economic growth

were found to be important determinants of profitability.

Shaji and Ganesan (2012) analysed financial

performance of two Indian pharmaceutical firms.

Financial performance was measured in the aspects of

profitability, liquidity, solvency and efficiency.

Profitability was measured by ROI. Hallowell (1996)

examined relationship between customer satisfaction cum

loyalty and profitability on US banking sector.

Profitability was measured by ROA and Non-interest

expense to total revenue. Goddard et al. (2004) analysed

profitability of European banks using ROA as an

indicator of profitability. The study found a positive

association between risk and ROE. Ton (2009) examined

the effect of labour on profitability of a large US retail

firm. Profitability was measured by operating profit

margin. The study found a positive relationship between

labour and profitability. Wu (2014) examined the

relationship between forward P/E ratio and profitability

and found a U-shaped relationship between the two. ROE

was used as the indicator of profitability. Abeywardhana

(2015) examined relationship between capital structure

and profitability of non-financial SMEs in the UK. Long

term debt to total assets ratio was found to be negatively

related to profitability measured by ROA and ROCE.

John and Muthusamy (2011) identified profitability as an

important determinant variable of financial leverage in

Indian pharmacy industry. They found negative

association between profitability and financial leverage

on the basis of the analysis of the top 25 Indian

pharmaceutical firms for 12 years. Dey, Dey and Biswas

(2013) made a comparative analysis of profitability of

two listed pharmacy companies in Bangladesh (Square

and Beximco) with eight profitability ratios for four

years. As per the analysis, in case of six ratios out of total

eight ratios, Square showed better performance than

Beximco. Raheman and Nasr (2007) assessed effect of

working capital management on profitability in Pakistani

firms. Profitability was measured by net operating profit

ratio. The study found a strong negative relationship

between WCM and profitability. Mehra (2013) attempted

to analyze the effect of working capital management on

the profitability of Indian pharmaceutical sector with

sample size of 20 firms. In the study, Cash Conversion

Cycle (CCC) was used to measure the efficiency of

working capital management. Negative correlation

between CCC and profitability was observed in the

study. Vijayalakshmi and Srividya (2014) analyzed the

profitability position of Indian pharmaceutical industry

with sample size of 10 for five years. The analysis

revealed that gross profit ratio, operating profit ratio,

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return on equity capital and earnings per share have

significant effect on the net profit ratio of the selected

companies. Khan and Safiuddin (2016) carried out a

research to analyze the financial performance of selected

Indian pharmaceutical firms through establishing

relationship between liquidity and profitability. They

analyzed two profitability and two liquidity ratios of two

companies- Cipla and Dr. Reddy‟s for five years. Cipla‟s

respective performances were better than that of Reddy‟s.

RESEARCH GAP

From the literature reviewed so far, it is clear that no

study has taken a vivid comparative analysis with respect

to consistency of profitability of the top pharmaceutical

firms in India. In addition thereto, no studies have taken

into consideration intra and inter firm variability in

profitability for the sector. To address this research gap,

the present study has been attempted.

OBJECTIVES OF THE STUDY

The present study takes its objectives as to:

(i) Assess the profitability position of selected

Pharmaceutical firms in average and consistency

level;

(ii) Measure the overall profitability and

inconsistency in profitability of the selected

Pharmaceutical firms; and

(iii) Structure intra and inter-firm comparative

analyses on the basis of inconsistency in

profitability.

INDIAN PHARMACEUTICAL SECTOR- AN

OVERVIEW

Indian pharmaceutical sector is one of the premier

science and technology based sectors in India. The sector

has some unique characteristics like dominating

movement of branded generics in retail market covering

70 to 80 per cent of the market; pressures of local

players; controlled price level due to the cut-throat

competition1 etc.

Cost of drugs in India is 5per cent to 50per cent less as

compared to that of developed countries. Indian firms

export drugs to more than 200 countries at present. India

supplies 40per cent of world‟s drug requirement. India

exports drug intermediates, pharmaceutical ingredients,

finished dosage formulations, bio-pharmaceuticals and

clinical services (Mehra, 2013). Indian pharmaceutical

sector supplies over 50 per cent of global demand for

various vaccines, 40 per cent of generic demand in the

US and 25 per cent of all medicine in UK. India is the

largest provider of generic drugs worldwide contributing

20 per cent of global export in terms of volume. India‟s

1India Pharma 2020 Report by Mckinsey & Co. (www. mckinsey.com).

pharmaceutical exports reached at US$ 19.14 billion in

FY19. India contributes the second largest share of

pharmaceutical and biotech workforce in the world

(IBEF report on Indian Pharmaceutical Industry, 2019).

The industry is growing rapidly at present. The

pharmaceutical sector in India was valued at US$ 33

billion in 2017. India‟s domestic pharmaceutical market

turnover reached Rs 129,015 crore (US$ 18.12 billion) in

2018, growing 9.4 per cent year-on-year (in Rs) from Rs

116,389 crore (US$ 17.87 billion) in 2017. In February

2019, the Indian pharmaceutical market grew by 10 per

cent year-on-year (IBEF report on Indian Pharmaceutical

Industry, 2019).

Future growth potential of the sector is also notable.

Indian Pharmaceutical market is expected to grow to

USD 55 billion by 2020 from USD 30 billion in 2015.

The hospital segment is expected to grow to 25 per cent

by 2020 from current rate 13 per cent. Health insurance

penetration will increase to 45 per cent of population by

20202. It is expected that Indian pharmaceutical sector

will grow at a CAGR of 15 per cent near future and

Indian medical device market is expected to grow to $50

billion by 2025(IBEF report on Indian Pharmaceutical

Industry, 2019).

The Govt. of India has recently taken some initiatives to

improve the sector more. The Department of

Pharmaceuticals, Govt. of India has launched the

„Pharma Vision 2020‟, the aim of which is to make India

a major hub for drug discovery. The government has

allowed 74 per cent FDI in existing pharmaceutical

companies and for medical device sector 100 per cent

FDI is allowed under automatic route. The cumulative

FDI inflows between April 2000 and March 2016 were

USD 15.98 billion. India‟s largest pharmaceutical city

has been proposed to be set up near Hyderabad in

Telengana. Under Budget 2019-20, allocation to the

Ministry of Health and Family Welfare increased by 3.1

per cent to Rs 63,298 crore (IBEF report on Indian

Pharmaceutical Industry, 2019).

METHODOLOGY OF THE PRESENT STUDY

The present study is a secondary data based empirical

one. Purposive sampling technique has been adopted and

top ten Pharmaceutical firms, based on market

capitalization at BSE as on 16/06/2016, have been

selected3. To analyze the profitability position of the

companies, three representative ratios have been used,

namely, Return on Net Worth (RONW), Return on

Capital Employed (ROCE) and Return on Assets (ROA)

2India Pharma 2020 Report by Mckinsey & Co. (www. mckinsey.com).

3The selected companies occupied 71per cent of the total market capitalization

at BSE on that very date. The companies are- Sun Pharma Ltd., Lupin Ltd., Dr. Reddy‟s Ltd., Aurobindo Pharma Ltd., Cipla Ltd., Cadila Ltd., Divis Ltd.,

Glaxo Ltd., Piramal Ltd., and Torrent Ltd (www.moneycontrol.com).

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(Dey et al., 2013; Adhikari et al., 2014; Abeywardhana,

2015; Khan & Safiuddin, 2016; Geethalakshmi & Jyothi,

2016; Basha & Abdul, 2017; Bijendra & Singhvi, 2017;

Yao et al., 2018) . Data on these three ratios have been

collected and compiled from the online source

moneycontrol.com for the period 2005-06 to 2015-16.

The analysis of the present study follows two specific phases (Figure 1).

Figure 1: Route map of analysis

Phase I: Variability in profitability

In Phase-1, descriptive statistics have been reflected

through average (Mean) and consistent performances

[C.V. i.e. (sd/mean *100)] of the firm in each

profitability ratio throughout the selected study period.

On these performances, ranks and composite ranks would

have to be assigned for each select firm.

Phase-2 has emphasized on the difference between at

least two firms within and between groups on the basis of

individual ratios applying two-way ANOVA test

statistic (Das Gupta & Sen, 2016; Sen & Das Gupta,

2016; Das Gupta & Biswas, 2018). But, before the

application of ANOVA, we shall test whether the data is

normally distributed with the help of Kolmogorov-

Smirnov test and Shapiro-Wilk test.

TEST FOR NORMALITY:

Kolmogorov-Smirnov Test: A high value of KS

indicates non-normality of data. If the p value of the

corresponding KS statistic is less than or equal to 0.05,

the data will be considered non-normal at 5 per cent or

less level of significance.

Shapiro-Wilk Test: A high value of SW indicates non-

normality of data. If the p value of the corresponding SW

statistic is less than or equal to 0.05, the data will be

considered non-normal at 5 per cent or less level of

significance.

ANOVA (Two Way) :The General model can be written

as

ijjiijX ………………….. (3)

Where, denotes the general effect

is the effect of i th class according to column factor

j is the effect to the j th class according to row factor

ij is the error component with „0‟ mean and 2 variance

Hence, the null hypotheses are

H01: There is no differential effect due to classification

by years t ...21 &

H02: There is no differential effect due to classification

by companies. r ...21

Decision rule:

If tablecal FF accept 0H or otherwise reject 0H .

Mean

Rank

Composite Rank

SD

CV

Phase II: Test on variability in profitability within

and between Pharmaceutical firms

Kolmogorov-Smirnov test

and Shapiro-Wilk test

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General ANOVA table for Two-way classification without replication

Source of Variation Sum of

Square

Degree of Freedom Mean sum of square F ratio

Between

columns(Treatments)

SSC c-1 MSTR=SSC/c-1 MSTR/MSE

Between Rows (Blocks) SSB r-1 MSB=SSB/r-1 MSB/MSE

Residual Error SSE (c-1)(r-1) MSE=SSE/(c-1)(r-1)

ANALYSIS AND FINDINGS OF THE PRESENT

STUDY

Phase I: Analysis of profitability position of the selected

Pharmaceutical firms:

RONW: Average RONW was highest for Glaxo and

lowest for Dr. Reddy‟s.

In terms of consistency of RONW, Lupin secured the top

most position whereas Piramal was at the bottom (Table

1).

ROCE: ROCE is very often considered as the most

significant indicator of profitability. Average ROCE was

highest for Glaxo and lowest for Sun Pharma during the

study period.

As per the consistency in ROCE, Lupin was at the

highest position and Piramal was at the lowest position

(Table 2).

ROA: Average ROA was highest for Glaxo and lowest

for Aurobindo. On the other hand, Cipla was the most

consistent company in respect of ROA and Piramal

showed worst consistency (Table 3).

Overall profitability and inconsistency in

profitability:

According to the composite ranking based on the mean

of overall profitability, Glaxo was at the top position

followed by Divis and then by Lupin etc. Sun Pharma

had the lowest mean in the overall profitability and so, it

was at the last position.

According to the composite ranking based on the

consistency in overall profitability, Cipla Ltd. secured the

peak position. Therefore, Cipla showed least variability

in overall profit earning capacity during the study period

followed by Lupin Ltd. Piramal was the most

inconsistent company in terms of overall profitability.

There was a tie for the 2nd

and 3rd

position between

Cadila and Divis. Hence, both have been assigned same

2.5th rank (Table 4).

Phase II: Test on variability in profitability within and

between select Pharmaceutical firms:

As per the normality test following Kolmogorov-

Smirnov test and Shapiro-Wilk test statistic, the below

mentioned results have been obtained.

Kolmogorov-Smirnov test: It is seen that data of

Piramal are significantly non-normal in any of

the three ratios. Besides, data of Sun Pharma are

significantly non-normal in respect of RONW

and ROA. In most of the other cases, the data

are either normally distributed or insignificantly

non-normal.

Shapiro-Wilk test: Just like the previous results,

here also the data of Piramal are significantly

non-normal in any of the three ratios. Besides,

data of Sun Pharma are significantly non-normal

in respect of RONW and ROA. In most of the

other cases, the data are either normally

distributed or insignificantly non-normal.

Table 5 exhibits the results of normality test following

Kolmogorov-Smirnov test and Shapiro-Wilk test statistic.

The ratio-wise results of ANOVA may be presented in

the following lines.

RONW: Observed value of F is less than the critical

value of F in case of years. So, there is no significant

year-to-year inconsistency in a company‟s RONW.

Observed value of F is higher than the F critical value in

case of companies. Hence, there is a significant (at 5per

cent level) company-to-company inconsistency in a

certain year in respect of RONW (Table 6). So, our first

null hypothesis is accepted and the second one is rejected

for RONW.

ROCE: There is no significant year-to-year

inconsistency in a company‟s ROCE but, there is a

significant (at 1per cent level) company-to-company

inconsistency in a certain year in respect of ROCE (Table

7). So, our first null hypothesis is accepted and the

second one is rejected for ROCE.

ROA: As the observed values of F are less than the

critical values of F in case of both years and companies,

it can be said that in terms of ROA, there is no significant

inconsistency either between years or between companies

(Table 8). Therefore, our both null hypotheses are

accepted for ROA.

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CONCLUSION

In the pharmaceutical sector in India, variability in

profitability is quite high though the average profitability

is not unsatisfactory. Therefore, profitability is not a

challenge for the sector but maintaining a steadiness in

profitability is the challenge for the sector.

In case of none of the three ratios, significant year-to-

year inconsistency was followed as per our analysis.

Therefore, it can be strongly advocated that there is least

possibility that a company‟s profitability will expand or

contract suddenly. Companies of this growing enterprise

are able to maintain a steadiness in their profit earning

capacity in spite of having huge growth potential. It is

indeed a good sign for the companies and also for their

stakeholders. Significant company-to-company

inconsistency was observed in case of RONW and ROCE

(Bijendra & Singhvi, 2017; Swadia, 2018; Dasgupta &

Sen, 2016). It means there is high possibility that the

firms differ one another in respect of RONW and ROCE.

LIMITATIONS OF THE STUDY

In the present study, data of top ten companies, listed in

BSE (On 16.06.2016) according to market capitalization,

for a period of one decade have been analyzed due to

time and resource constraints. The results could be more

concrete if data on a large number of companies over a

longer period of time would have been cultivated.

SCOPE FOR FURTHER RESEARCH

Scope for further research may be recommended in the

following areas:

(i) A comparative analysis of profitability

between the Indian pharmaceutical firms and

foreign pharmaceutical firms may be carried

on.

(ii) A study may be conducted on the segmental

consistency of profitability of the Indian

pharmaceutical firms.

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Table 1: Analysis of Return on Net Worth (RONW) for the study period

Company Mean SD C.V. Rank on Mean Rank on C.V.

Sun Pharma 17.07 11.15 65.32 9 9

Lupin 28.39 4.13 14.53 2 1

Dr. Reddey's 15.20 5.29 34.80 10 7

Aurobindo 19.08 10.08 52.82 7 8

Cipla 17.72 5.43 30.62 8 6

Cadila 24.57 4.12 16.77 5 2

Divis 27.52 6.57 23.88 3 4

Glaxo 33.53 9.99 29.80 1 5

Piramal 23.41 32.76 139.97 6 10

Torrent 25.70 4.75 18.49 4 3

Source: Collected and compiled from moneycontrol data base (www.moneycontrol.com).

Table 2: Analysis of Return on Capital Employed (ROCE) for the study period

Company Mean SD C.V. Rank on Mean Rank on C.V.

Sun Pharma 10.81 16.27 150.55 10 9

Lupin 22.52 4.64 20.61 3 1

Dr. Reddey's 14.41 5.08 35.26 8 7

Aurobindo 12.52 8.35 66.70 9 8

Cipla 16.20 3.83 23.61 7 4

Cadila 17.78 4.03 22.69 5 3

Divis 25.17 5.51 21.90 2 2

Glaxo 32.09 10.78 33.58 1 6

Piramal 18.48 31.79 172.05 4 10

Torrent 16.86 4.78 28.36 6 5

Source: Collected and compiled from moneycontrol data base (www.moneycontrol.com).

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Table 3: Analysis of Return on Assets (ROA) for the study period

Company Mean SD C.V. Rank on Mean Rank on C.V.

Sun Pharma 10.01 13.04 130.19 9 9

Lupin 15.85 5.06 31.93 4 6

Dr. Reddey's 10.23 3.96 38.69 8 7

Aurobindo 7.76 4.97 64.08 10 8

Cipla 12.45 2.61 20.96 6 1

Cadila 13.13 3.42 26.02 5 4

Divis 20.54 5.10 24.83 2 3

Glaxo 22.02 6.67 30.29 1 5

Piramal 15.99 29.59 185.06 3 10

Torrent 12.32 2.88 23.42 7 2

Source: Collected and compiled from moneycontrol data base (www.moneycontrol.com).

Table 4: Composite Ranking

Company

Rank on Mean Rank on C.V.

Rank

on

RON

W

Rank

on

ROCE

Rank

on

ROA

Sum of

Ranks

Composite

Rank

Rank on

RONW

Rank on

ROCE

Rank on

ROA

Sum of

Ranks

Composite

Rank

Sun Pharma 9 10 9

28

10 9 9 9

27

9

Lupin 2 3 4 9 3 1 1 6 8 1

Dr. Reddey's 10 8 8

26

8.5 7 7 7

21

7

Aurobindo 7 9 10 26 8.5 8 8 8 24 8

Cipla 8 7 6 21 7 6 4 1 11 5

Cadila 5 5 5 15 5 2 3 4 9 2.5

Divis 3 2 2 7 2 4 2 3 9 2.5

Glaxo 1 1 1 3 1 5 6 5 16 6

Piramal 6 4 3 13 4 10 10 10 30 10

Torrent 4 6 7 17 6 3 5 2 10 4

Source: Authors’ calculation

Table 5: Normality Test through Kolmogorov-Smirnov and Shapiro-Wilk

Companies Kolmogorov-Smirnov Test Shapiro-Wilk Test

RONW ROCE ROA RONW ROCE ROA

KS P value KS P value KS P value SW P value SW P value SW P value

Sun Pharma .277 .028 .228 .150 .284 .021 .786 .010 .886 .153 .778 .008

Lupin .157 .200* .183 .200* .225 .165 .951 .679 .902 .231 .919 .353

Dr. Reddy‟s .212 .200* .221 .180 .267 .041 .875 .115 .899 .211 .870 .101

Aurobindo .157 .200* .255 .064 .128 .200* .961 .795 .878 .124 .971 .896

Cipla .145 .200* .227 .154 .200 .200* .959 .775 .869 .098 .952 .688

Cadila .222 .175 .133 .200* .264 .047 .888 .160 .973 .913 .851 .060

Divis .210 .200* .286 .020 .225 .164 .945 .605 .841 .046 .915 .319

Glaxo .214 .200* .268 .040 .177 .200* .917 .332 .898 .211 .927 .422

Piramal .375 .000 .324 .004 .403 .000 .627 .000 .688 .001 .574 .000

Torrent .162 .200* .224 .169 .194 .200* .945 .614 .907 .263 .942 .572

Source: Authors’ calculation

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Table 6: Two-Way without replication ANOVA of Return on Net Worth

Source of Variation SS Df MS F P-value F crit

Rows (Years) 1985.351 9 220.5946 1.486442 0.167002 1.997609

Columns (Companies) 3089.801 9 343.3112 2.313348 0.022712 1.997609

Error 12020.76 81 148.4045

Total 17095.91 99

Source: Authors’ calculation

Table 7: Two-Way without replication ANOVA of Return on Capital Employed

Source of Variation SS df MS F P-value F crit

Rows (Years) 1683.201 9 187.0224 1.197551 0.308064 1.997609

Columns (Companies) 3654.073 9 406.0082 2.599771 0.010932 1.997609

Error 12649.83 81 156.1707

Total 17987.1 99

Source: Authors’ calculation

Table 8: Two-Way without replication ANOVA of Return on Assets

Source of Variation SS df MS F P-value F crit

Rows (Years) 1242.271 9 138.0301 1.159901 0.331833 1.997609

Columns (Companies) 1894.82 9 210.5355 1.769182 0.086937 1.997609

Error 9639.131 81 119.0016

Total 12776.22 99

Source: Authors’ calculation

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RELATIONSHIP AMONG GOLD PRICES AND STOCK INDICES – AN

EMPIRICAL ANALYSIS WITH REFERENCE TO BOMBAY STOCK EXCHANGE

S&P METAL INDICES

Roshan Kumar*, Manisha Gupta

**

*Assistant Professor, Department of Management, Jharkhand Rai University, Ranchi, Jharkhand, India

**Director, PIMT, Alour, Khanna, Punjab, India

ABSTRACT

The stock Indices of a country become more reactive to both internal and external variables, and one such

variable is the price of gold. In recent scenario gold price fluctuations have attracted the intentness of many

researchers, academicians and analysts. The primary objective of this Empirical Research work is to

investigate the Dynamic relationship among gold prices and Bombay Stock Exchange BSE S&P metal indices

of India. To achieve this objective, Gold prices and BSE sensex S&P metal indices have been taken for the

period of 2005 to 2016. The various statistical tools of econometrics are applied like Augmented Dickey Fuller

Test, Johansen Co-integration test, Vector Error Correction Model, Wald's Coefficient Diagnosis, ADF tests

have shown that the data is stationary at level. The results of Co- integration test disclose that the gold prices

and BSE sensex S&P metal indices are co-integrated in long run period. The result of Vector Error Correction

Model shows that Gold price and stock market index (BSE) are co-integrated in the long period.

Keywords: Gold prices, Bombay stock Indices (BSE), Unit Root test, Co –Integration, VECM model and Wald's

Coefficient Diagnosis

INTRODUCTION

Gold is a vital asset for the economic development. It is

considered as one of the most precious wealth items of a

nation from ancient time. In primitives age it was treated

as a currency alternative but in recent scenario it is used

as a means of investment, Jewelry manufacturing,

inflation indicators and it is traded in Stock exchange as

derivatives. (Akhtar et.al, 2011). Gold price increases

whenever there is a bearish market in the economy or

some uncertainty looms over the future. Gold is ancient,

precious, highly liquid in nature, financial assets, and it

classified as one of the very important asset classes. It

has the dual feature of commodity and currency, but cost

of storage or custody of gold makes it different from the

paper and electronic currency. (Bhunia, and Mukhuti,

2013).

Gold is treated as an asset which helps in maintaining the

purchasing power and it can help in hedging against the

inflation as well. It has a negative associationship with

stick market slump and positive associationship with

rising inflation (Filis G., 2010). The gold price is

important for currency hedging and trading but it

fluctuations in price of gold may lead to negative impact

on the performance of financial market. Rise in the price

of gold creates an unsafe investment situation. In contrast

when the price of gold decreases it leads to safe

investment for the investor (Baur 2012).

Gold is mostly demanded by developing countries. In

this manner, it has been observed that twenty per cent of

World demand belongs to Pakistan and India. In the

Middle East, China and Turkey and many developing

nations of South East Asia register a demand of fifteen to

twenty per cent in the gold market (Starr and Tran, 2008)

The rise in gold price votality is an indicator for the

stakeholders like Investor and producers of gold industry

and exposes them to risk. So, understanding the gold

price volatility enhances our understanding of stock

markets (Tully and Lucey, 2007). After the year 1990,

the average annual gold price also showed a rising trend

from the year but, it showed a decline trend in 1997 and

1998 and again showed a rising trend in the year 2000.

The price of gold is rise in India due to its heavy uses by

the domestic user. The demand of gold is higher in India

due to the following reason.

There is no credit risk attached with Gold.

Gold is a liquidity power as compared to other

financial instruments

It is treated as a Diversified Portfolio

It is used as a security against loan

REVIEW OF LITERATURE

There are many empirical research work conducted by

the various researcher to develop the relationship among

gold price and stock exchange. In contrast, only selected

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studies have to be consider to analyze the relationship

among gold price and stock markets.

Arouri et al. (2015) applied the VAR-GARCH model to

examine the impact of gold price fluctuations on the

stock market returns in China for the duration of 2004-

2011; their results show the positive significant impact of

gold price fluctuations on China’s share market return.

Arbes and Hoetoro (2014) investigated the impact of

crude oil price, stock exchange dollar exchange rate, and

stock exchange index on price of gold in U.S.A for a

duration of 2006-2012, they applied error correction

models. They observed the significant positive impact of

U.S Dollar exchange rate on gold prices while stock in

exchange index was found to have reverse impact on

gold prices in the short run period .But in long run period

the impact of crude oil price, exchange rate and stock

exchange variables on gold price was found to be

insignificant.

Guris and Kiran (2014) studied the association among

gold prices and the US dollar vs. Turkish lira exchange

rate between 1990–2011.They used co-integration tests

and found that threshold co-integration association

among them and granger causality test found evidence of

bi-directional causal associationship among the gold

prices and exchange rate. The results conclude gold to be

only partial hedge against the exchange rate.

Ahmed Raza Bilal (2013) in their empirical research

work they investigated the long-run equilibrium

associationship among time series variables, found that

no long-run association existed among monthly average

gold prices and KSE 100 index, however BSE had long-

run associationship with the monthly average gold prices.

Seuk Wai Phoong (2013) investigated market scenario

on the crude oil price and gold price impact on

Singapore, Malaysia, Indonesia and Thailand stock

exchange for the period December 1989 to May 2012.

The researcher found that the variables had co-integrating

relationship when Vector Error correction Model applied

and further explained that crude oil price and gold price

would affect the stock market returns for the selected

countries of Asia.

Raza Collins et al. (2013) investigated the long-run

associationship among gold and stock exchange of

Karachi and Bombay stock exchange from the period

2005 to 2011 and observed strong positive long run

association among Gold and BSE.

Rabi N Mishra (2012) investigated the relationship

between gold price and Indian equity prices and

concluded that any slight change in the price of gold is

unlikely to have upset the stability of effect on the Indian

capital markets. Rather, any correction in gold prices

may reduce the financial stress, if any.

Shahzadi et al., 2012. In their research study they

examined the effect of gold prices on Karachi Stock

Exchange which is major stock exchange of Pakistan, by

taking data of five years from 2006 to 2010. They

applied the Johansen’s Co Integration Test and Granger

Causality Test and found perfectly negative relationship

among monthly average gold prices and Karachi Stock

Exchange 100 index.

Chan et al. (2011) examined the associationship among

commodities, real state and financial assets, by using

monthly data for duration from January 1987 to

December 2008. They applied the Markov switching

model .They observed positive stock returns during the

time of economic expansion and negative stock returns

during the time of economic decline with infirmity

among share prices and other assets like real estate

.There was not any infirmity effect found among oil and

real estate as well as among treasury bonds and stocks.

Janabi et al. (2010) investigated whether the Gulf

Cooperation Council (GCC) equity markets are

informational efficient with reference to crude oil and

gold price collapse during the period 2006–2008. They

used daily dollar-based stock market indexes database.

The research work also tried to find out the impact of

crude oil and gold prices on the financial performance of

the six selected GCC stock markets. They concluded that

gold and crude oil price affected the stock market of Gulf

cooperative council.

Baur and Lucey (2010) to recognize the elements that

affect price of gold. They described Some of the

elements that affect the price of gold like exchange rate,

inflation, price of bond, performance of stock exchange

market, seasonality, income, Crude oil prices, and

business conditions.

Pravit (2009) they applied multiple regression and auto

regressive integrated moving average techniques to

forecast gold price on basis of previous market trend. The

research finding suggested that ARIMA is a suitable tool

to be used for forecasting the gold price in the short run

period.

Ratanapakorn, and Sharma (2007) found that the price

of gold is highly connected with global market and

domestic market in India. Additionally, Foreign

institutional investor invest their money into safest and

liquidity commodity of the economy, as the gold is the

right place for stock market development, and also being

reason for the actual development of financial

organization

RESEARCH METHODOLOGY

The research work objective is to investigate the

relationship among gold prices and Stock Indices (BSE)

metal. For this purpose secondary data are taken from the

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database of RBI and other government website. The

study investigates the monthly data of Gold price and

BSE stock Indices for the period of 2005 to 2016. Before

investigating the long term relationship among gold price

and stock indices (BSE) variables are tested for Unit root

test. In this research work augmented dicker fuller test is

used to check the stationarity of the data. The Johansen

co integration test was conducted to test the co

integration among two variables.

SAMPLING DESIGN

In this research paper the monthly data are used for the

period of 2005 to 2016. The gold price and stock indices

of BSE stock indices are taken from the official website

like RBI, BSE and Money control.com. For the purpose

of analysis eviews software 9.5 has been used.

TOOLS AND TECHNIQUES

UNIT ROOT TEST

A unit root test is used to determine the stationarity or

non stationarity of time series data. The Null hypothesis

denotes the presence of unit root and alternative

hypothesis is either stationarity, trend stationary or

explosive roots, it depends on the nature of test. There

are various methods for carrying out unit root test, the

most popular and widely used method is Augmented

Dicker fuller test Phillip perron test.

The unit root test of stationarity is based on the following

set up.

Yt = α + ρ Yt-1 + μt (1)

Where μt I and -1 ≤ 1 ρ≤1 2

If ρ =1 then the series became a random walk model and

Yt is non stationary.

Yt- Yt-1 = α + ρ Yt-1 + μt (3)

= α + ρ-1) Yt-1 + μt (4)

It can be rewritten as ∆ Yt = α + δ Yt-1 + μt (5)

Where ∆ is the first difference and δ = ρ-1) (6)

The Dickey Fuller Unit Root Test has three alternative:

1. Yt is a random walk ∆ Yt = δ Yt-1 + μt (7)

2. Yt is a random with drift ∆ Yt = β1 + δ Yt-1 + μt

(8)

3. Yt is a random walk with drift ∆ Yt = β1 + β2 + δ

(9)

Where t is the time series or trend variable. In each case,

the null hypothesis is that δ = , that is, there is a unit

root and the series is non stationary. The alternative

hypothesis is that δ is less than zero so the time series is

stationary.

The basic conditions of unit root are the following:

1. If t statistics is ≤ ADF computed value it

represents the presence of unit root for the time

series data.

2. If t statistics is ≥ ADF computed value it means

the null hypothesis is rejected and it shows that

unit root does not exist.

AUGMENTED DICKER FULLER TEST

The Augmented Dickey-Fuller unit root test has been

used to investigate the stationarity of the time series of

the study and to find the order of integration among

them. The ADF unit root test has been performed by

estimating the regression:

∆ Yt = α + βt + δ Yt-1 + θi

1

p

i

Yt-1 + μt (10)

Here P represents the number of lags and the hypothesis

δ = is tested

JOHANSEN CO-INTEGRATION TEST

The Johansen’s co-integration test has been used to check

whether the long run relationship exists among the

variables. The Johansen approach to co-integration test is

based on two test statistics, viz., the trace test statistic,

and the maximum eigenvalue test statistic. The equation

is given below:

𝓍t = αo +

1

k

j

βj 𝓍t-j + εt (11)

Here αo is n x 1 vector of constants, is 𝓍t is n x 1 vector

of variables, which consist unit root and are stationary at

first difference, k is number of lags, βj is vector of

coefficients and εt is vector of error terms. The above

equation is converted into a vector error correction

model.

Δ 𝓍t = αo +

1

1

k

j

βj Δ 𝓍t-j + δ 𝓍t-k + εt (12)

Here δ = - I + 1

K

i J

1

K

i J

βj (13)

Δ show the first difference operator and I is an n x n

identity matrix. Maximum Eigen value is applied to

count the number of characteristic roots that is

insignificantly different from unit root.

VECTOR ERROR CORRECTION MODEL

Vector error correction model is a restricted vector auto

regression established for use with non-stationary series

that are known to be co-integrated. The co-integration

term is known as the error correction term since the

deviation from long run equilibrium is corrected

gradually through a series of partial short-run

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adjustments. The common Vector Error correction model

are following:

∆yt = c + ∅1 ∆yt-1 + ∅2 ∆yt-2 + …… ∅p ∆yt-p + ECTt + ϵt

(14)

Research Hypothesis:

Hypothesis-1

Null Hypothesis: Gold price and stock market index

(BSE) are not stationary.

Alternative Hypothesis: Gold price and stock market

index are (BSE) stationary.

Hypothesis-2

Null Hypothesis: Gold price and stock market index

(BSE) are not co-integrated in the long period.

Alternative Hypothesis: Gold price and stock market

index (BSE) are co-integrated in the long period.

Analysis and Interpretation:

Table No: 1 Unit root test at level, series with constant and trend

Period Variable No of observation ADF test Probability Critical value @ 5%

Level Gold Price

Sensex BSE S&P Metal

143

143

-0.921393

-2.326065

0.9498

0.4169

-3.411352

Interpretation:

Table No 1 shows the result of ADF test statistic at

level. Since calculated value of the test statistic t is less

than its critical value (3.41) the null hypothesis is

accepted, which means for both the series Gold price and

Sensex BSE S&P Metal, unit root exists and they are

non- stationary at their levels.

Table No: 2 Unit Root Test results at first difference, with Constant and trend

Period Variable No of observation ADF test Probability Critical value @ 5%

First

Difference

Gold Price

Sensex BSE S&P Metal

143

143

-10.41856

-11.55201

0.0000 -2.881830

INTERPRETATION

The result of Unit Root Test results at first difference,

with Constant and trend the computed value is greater

than the critical value 3.41 so, the null hypothesis

rejected at 5% significance level i.e., unit root does not

exist. Accordingly, time series for Gold price and Sensex

BSE S&P metal are stationary at their first difference.

JOHANSEN CO-INTEGRATION TEST

Table No 3: Johansen’s Co-integration Test Result

Gold Price/BSE sensex S&P Metal Sample: 2005 to 2016

Trend assumption: Linear deterministic trend (restricted) Observation: 139 after adjustments

Unrestricted Co integration Rank Test (Trace)

Hypothesized No. of CE(s) Eigen value Trace Statistic λtrace Critical Value

@ 5%

Prob.**

None 0.092995 16.87231 15.49471 0.0308

At most 1 0.023495 3.304822 3.841461 0.0691

Unrestricted Co-integration Rank Test (Maximum Eigenvalue)

Hypothesized No. of CE(s) Eigen value Maximum Eigenvalue Critical Value

@ 5%

Prob.**

None 0.092995 13.56748 14.26460 0.0642

At most 1 0.023495 3.304822 3.841466 0.0691

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The results of the Johansen’s Co-integration test as

presented in Table No 3, Maximal Eigen statistic λmax

of 13.56748 is less than the 5 % critical value of

14.2646 and the trace test statistic λtrace of 16.87231

is greater than the critical value of 15.49471. The null

hypothesis of no co integration (ie. r = 0) is rejected. This

means there exists a single (ie. r = 1) co- integrating

relationship among the variables.

Vector Error correction model

System Equation:

D(GOLD_PRICE) = C(1)*( GOLD_PRICE(-1) -

226.581708164*BSE_SENSEX_METAL(-1) +

2367576.22748 ) + C(2)*D(GOLD_PRICE (-1)) +

C(3)*D(GOLD_PRICE(-2)) +

C(4)*D(BSE_SENSEX_METAL(-1)) +

C(5)*D(BSE_SENSEX_METAL(-2)) + C(6)

Here Gold = Dependent variable

BSE Sensex metal = Independent variable

C (1) = Co efficient of co integration equation for long

run causality

C (2), C (3), C (4) and C (5) = Coefficient of co-

integrating equation (short-term causality) C (6) =

Constant / intercept. From the VECM equation, the C(1)

is the coefficient of co-integrating equation (GOLD(-1) -

226.581708164 *BSE(-1) + 2367576.22748 ) from which

the residual is taken for developing the error correction

(EC) term and from the EC term the long-run causality is

developed.

Table No: 4 Vector Error Correction Model (VECM)

Variable Co-efficient Std. Error t-statistics Prob.

C(1) -0.000321 0.000273 -1.175960 0.2417

C(2) 0.105360 0.087828 1.199624 0.2324

C(3) -0.067915 0.087894 -0.772692 0.4411

C(4) -0.080366 0.170565 -0.471172 0.6383

C(5) 0.018957 0.170761 0.111016 0.9118

C(6) 407.7426 217.0645 1.878439 0.0625

The results of EC model presented in table No. 4 C (1) is

the residual at one period lag of co-integrating vector

between Gold price and BSE Sensex Metal. The ER term

is negative (-0.000321) and is highly significant at 1%,

which implies that BSE metal indices has long-run

causality on GOLD. In other words, it can be said that

BSE affect Gold in long-run period. Since the ER term

from the VECM is significant with negative sign, the

Null hypothesis “Gold price and stock market index

(BSE) are not co-integrated in the long period” is

rejected. The result thus shows that there exists a long-

run causality between BSE metal to Gold.

Table No: 5 Results of Wald test

Wald Test Value Df Prob.

F-statistic 1.242254 3, 135 0.2970

Chi-square 3.726761 3 0.2925

Null Hypothesis: C(4)=C(5)=C(6)=0

Null Hypothesis Summary:

Normalized Restriction (= 0) Value Std. Err.

C(4) -0.080366 0.170565

C(5) 0.018957 0.170761

C(6) 407.7426 217.0645

In the further step, from the Vector Error correction

model the short run causality from BSE sensex Metal

indices to Gold price is investigated by using the co-

efficient like C(4) and C(5) that jointly affect the price of

gold. Then we can say that their presence of a short run

causality from BSE Sensex Metal to gold price. The

result of Wald test is shown in the table No 5, that C (4)

= C (5) = 0 of lag two cannot jointly affect the gold. It is

depicted that Null hypothesis cannot be rejected because

the computed value of chi square test is 29.25% which is

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greater than 5%. So it shows that there is no short run

relationship among both variable.

CONCLUSION

The present Research works examine the long-run and

short-run associationship among Indian stock market

indices like BSE Sensex metal and gold price by

applying Vector Error Correction model. The study used

the monthly closing price of BSE metal Sensex and gold

price for the years from January 2005 to 31st March 2016.

The study also found that BSE sensex and Gold price are

co-integrated (model one) in long-run but not in short-

run.

REFERENCES

1. Ahmed Raza Bilal, N. B. (2013). How Gold Prices

Correspond to Stock Index: A Comparative analysis of

Karachi Stock Exchange and Bombay Stock Exchange.

World Applied Sciences Journal, Vol 21(4): 485-491.

2. Akhtar, M.N., A.I. Hunjra, S.W. Akbar, K.R. Rehman and

G.S.K. Niazi, 2011. Risk and Return Relationship in Stock

Market and Commodity Prices: A Comprehensive Study of

Pakistani Markets. World Applied Sciences Journal, 13(3):

470-481.

3. Arbes, R. R., & Hoetoro, A. (2014), Analysis on the effect

of oil price, dollar exchange rate, and

4. Stock exchange index on gold price in USA 2006-2012.

Jurnal Ilmiah Mahasiswa FEB, 2(2).

5. Arouri, M. E., Lahiani, A., Nguyen, D. K., 2015. World

Gold Prices and Stock Returns in China: Insights for

Hedging and Diversification Strategies. Economic

Modelling 44, 273–282.

6. Baur, D.G. and Lucey, B.M. (2010), Is Gold a Hedge or a

Safe Haven? An Analysis of Stocks, Bonds and Gold, The

Financial Review, Volume 45, Issue 2, Pages 217– 229.

7. Baur, D. G., 2012. Asymmetric Volatility in the Gold

Market. Journal of Alternative Investments 14, 26-38.

8. Bhunia, Amalendu, and Mukhuti, Somnath. 2013. The

impact of domestic gold price on stock price indices-An

empirical study of Indian stock exchanges. Universal

Journal of Marketing and Busi-ness Research, 2 (2), 35-43.

9. Chan, K. F., Treepongkaruna, S., Brooks, R., & Gray, S.

(2011), Asset market linkages: Evidence

10. From financial, commodity and real estate assets. Journal of

Banking & Finance, 35(6), 1415- 1426.

11. Filis G., C. I. (2010), Oil, Inflation and the Stock Market:

Transmission Mechanisms For Oil - Importing and Oil-

Exporting Countries. EABR & ETLC Conference

Proceedings.

12. Gürış, B., & Kiran, B. (2014), The price of gold and the

exchange rate: Evidence from threshold

13. Co-integration and threshold granger causality analyses for

Turkey. Acta Oeconomica, 64(1), 91-101.

14. Janabi, Mazin A. M., Hatemi. J., Abdul Nasser, Irandoust,

Manucheh (2010), International Review of Financial

Analysis, Jan 2010, Vol. 19, Issue 1, p. 47-54

15. Pravit Khaemusunun (2009), Forecasting Thai Gold Prices,

http://www.wbiconpro.com/3-Pravit-.pdf

16. Raza, A. B., Noraini, B., Talib, A., Ul, I. H., Noor, M., Ali,

A. K. and Naveed, M. (2013). How Gold Prices Correspond

to Stock Index: A Comparative Analysis of Karachi Stock

Exchange and Bombay Stock Exchange. World Applied

Sciences Journal, 21 (4), pp. 485-491.

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CUSTOMERS’ PERCEPTIONS AND EXPECTATIONS TOWARDS SERVICE

QUALITY INITIATIVES IN MULTISPECIALITY HOSPITALS: A REVIEW

B.B.Singla*, Shilpa Khanna

**

*Assistant Professor, School of Management Studies, Punjabi University, Patiala, Punjab, India

**Research Scholar, School of Management Studies, Punjabi University, Patiala, Punjab, India

ABSTRACT

Over the past few decades in the services marketing sector, much work has been Under taken to evaluate the consumer’s

perception of service quality, and a number of service models have been developed, with the gap model (Parasuraman et al.,

1985) and its accompanying SERVQUAL (Parasuraman et al., 1988) having offered significant advances to the understanding

and measurement of perceived service quality. A healthcare service is one that requires high consumer involvement in the

consumption process, and Lengnick-Hall (2005) argued that the traditional health sector views of technical quality and patient

satisfaction were inadequate to manage the complex relationships between the healthcare provider and the patient. Importantly,

effective healthcare relies significantly on the co-contribution of the patient to the service delivery process. Studies have also

evidenced that compliance with medical advice and treatment regimes is directly related to the perceived quality of the service

and the subsequent resulting health outcome. This paper is an attempt to review patient satisfaction in healthcare and its

measurement; highlights the operational issues surrounding patient satisfaction and patient perception of health service quality;

and analyses the existing focus of healthcare quality. It also considers the services literature for both the satisfaction and

perceived service quality

Keywords: SERVQUAL, Health services, Quality management, Customer satisfaction

INTRODUCTION

In whatever situation and condition the patients get the

medical treatment the ultimate goal of the patient is to

improve his/her health which will increase his/her

productivity and ultimately contribute to the economic

growth of the nation. So, healthcare industry, therefore,

plays an important role in the development of country

through improving health of nation’s populations.Health

and economic developments are so closely related that it

is impossible to achieve one without the other. While the

economic development in India is gaining momentum

over the past few decades, out health system is at cross

today (Ramani & Dilleep, 2006). One of the rapid

growing industries at a CAGR (Compound Annual

Growth Rate) of 15 % and is expected to touch US $250

billion by 2020 (Price Water coopers’ Report, 2012).

Health care service quality satisfaction has gained highest

importance , especially in developing nations like India.

Health care covers not merely medical care but also all

aspects of pro preventive care too. It is no longer limited

to care rendered by or financed by government sector

alone but recent time has seen massive participation of

private players. Private sector in health care has gained a

dominant presence in all the areas like medical education,

sale of pharmaceuticals, construction of hospitals and

providing medical services etc. at the same time superior

service quality in private health care sector has been a

major concern as customer have to pay a huge amount of

money and efforts to avail the services.

Indian Health care industry has seen unprecedented

changes in the last couple of decades. This is especially

true in case multi-specialty sector. Not so long back few

government funded medical institutes cum hospitals were

there to fill the vacuum in this sector. However factors

such as increasing disposable income of Indians, arrival

of higher number of foreign patients for treatment in

India on account of country’s cost advantage, immense

burden on government funded hospitals leading to

chaotic situation in these paved ways for emergence of

private chains in country. These hospitals made an

endeavor to improve service quality for justifying their

higher prices. (The prices are higher in Indian context.

From the global viewpoint the same are still much

lower).The advent of these corporate type hospitals has

given a new impetus to Indian health care industry.

Service quality has become an important issue since the

service industries started competing traditional industries

like manufacturing and production. Services presently

represent more than two‐thirds of world's gross domestic

product.7 Initially, quality was an industrial concept, but

now, its importance in service organizations is

exceedingly getting noted. Today, quality is a

fundamental determining factor in both industrial and

service sectors to achieve maximum return on investments

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while minimizing costs. These days, all organizations

delivering services of one kind or another are looking for

ways to improve the quality of services to produce more

satisfied service consumers and thus making the

organizations more profitable or productive.

Service quality has become a much bigger issue in India as

our economy is becoming more and more dependent on

the contribution from services sector. In India the services

industry is slow in recognizing the value of service quality

and its implications on the customer satisfaction.

Countries like United States of America and developed

countries in Europe have already acknowledged the

importance of enhanced service quality (Pakdil &

Harwood, 2013).

There is huge surge in service quality research in the

developed world over the past two decades which shows

that the concept of quality improvement has become

important year by year in the service industry. In this

paper an attempt is being made to understand the

mechanism and system of service quality in healthcare

sector.

OBJECTIVES OF THE PAPER

Here in this paper an attempt is made to review the

differences in service quality perceptions and

expectations in health care taking into consideration the

relevance of SERVQUAL

Another issue under study was to find out the increasing

concern for service quality initiatives and the factors

responsible for this growing concern.

THE SERVQUAL

The SERVQUAL service quality model was developed

by a group of American authors, 'Parasu' Parasuraman,

Valarie A. Zeithaml and Len Berry, in 1988. It highlights

the main components of high quality service. The

SERVQUAL authors originally identified ten elements of

service quality, but in later work, these were collapsed

into five factors - reliability, assurance, tangibles,

empathy and responsiveness - that create the acronym

RATER.

In their work of 1988, these components were collapsed

into five dimensions which defined service quality as the

gap existing between “expectations” and “perceptions” of

the service delivered. The current form of SERVQUAL

consists of twenty two sections which assists measuring

service quality across the five RATER dimension which

are applicable to service providing organization in

general (Akter et al., 2008). The dimensions are:

Tangibles: referring to the appearance of

communication materials and physical facilities,

equipment and appearance of personnel.

Reliability: the ability to perform promised

service reliably and accurately.

Responsiveness: the willingness to help the

customers and provide prompt service.

Assurance: referring to the knowledge and

courtesy of employees and their ability to inspire

trust and confidence.

Empathy: caring, individualized attention

provided to customers.

CUSTOMER SATISFACTION AND SERVICE

QUALITY

In the past years, a number of studies have investigated

the relationship between customer satisfaction and

service quality. Parsuraman et al.(1985,1988) is one of

the most famous researcher that gave a great attention to

this relationship.

Service quality is a very important component to measure

patient satisfaction in the health care industry (Taner and

Antony,2006).Since patients are usually more worried

about the seriousness of their health condition, the

medication, medical outcome, and medical staff quality,

they would always look for a better health service quality

and expect the best service quality. So, patient perception

of service quality is very much influencing the choice of

hospital, health care provider, and quality is a very

critical element in patients’ choice of hospital

(Jusoff,2009). According to Ford et al.(1997). Patient

satisfaction is a complicated phenomenon that is related

to many factors such as patient expectations, service

quality, health status and outcome, and health system

characteristics. It is critical to clearly understand the

determinants of health care service quality evaluation,

patient satisfaction and what encourage the patients to

refuse a service of the health care sectors. While many

studies were conducted in an attempt to measure service

quality and patient satisfaction of hospitals all over the

world throughout the years, only a few studies have

focused on assessing the relationship between patient

satisfaction and service quality in private hospitals.

REVIEW OF LITERATURE

Since its inception, SERVQUAL has been widely used

across services industries such as travel, hotels, higher

education, real estate, accountancy, construction and

hospitals etc. to judge service quality therein (Foster,

2001). SERVQUAL has remained a preferred scale to

measure hospital service quality (Vandamme and

Leunis, 1993) and assessing the relationship between

hospital service quality and various variables such as

Leadership Style (Jabnoun and Al Rasasi, 2005). Even

the impact of service quality on patient satisfaction

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(Reidenbach and sandifer-smallwood, 1990) have been

assessed through SERVQUAL.

Turner and Pol (1995) noted that service quality is

positively correlated with satisfaction; however, the

direction and strength of the predictive relationship

between quality and satisfaction remains unclear. The

direction of patients’ satisfaction influenced by many

factors such as doctor patient communication (Naidu. A

2009; Andaleeb et al. 2007), waiting time to receive the

medical care services (Bielen and Demoulin 2007;

Camacho et al 2006), availability of more facilities in

hospital (Andaleeb et al. 1998) and many more factors

affecting patients’ satisfaction in private hospitals

Panchapakesan, Rajendran and Lokacheri (1996)

have observed that patients and attendants treat the

interpersonal aspect of care as the most important one, as

they cannot fully evaluate the technical quality of health

care services. They have also revealed that the hospital

service providers have to understand the needs of both

patients and attendants in order to gather a holistic view

of their services.

Camilleri and O’Callaghan (1998) have found that both

private and public hospital service users consider the

professional and technical care quality as well as the

degree of personal attention(service Personalisation)

given to them as the two most important aspects of the

service product. The study has also revealed that a lot of

old public hospital customers, of late have become more

titled towards private sector.

Although SERVQUAL has remained a popular tool to

measure service quality in health care industry yet, its use

has also been questioned by many. (Ford et al 1999) has

argued that the measure of health services is different

from those services typically associated through

SERVIQAL and therefore healthcare organizations may

need to develop their own instruments or modify and/ or

supplement these available instruments.

Myron D Fottler, Duncan Dickson, Robert C Ford,

Kenneth Bradley, Lee

Johnson(2006)' conducted a study on "Comparing

hospital staff and patient perceptions of customer service:

a pilot study utilizing survey and focus group data." The

measurement of patient satisfaction is crucial to

enhancing customer service and competitive advantage in

the health-care industry. While there are numerous

approaches to such measurement, this paper provides a

case study which compares and contrasts patient and staff

perceptions of customer service using both survey and

focus group data. Results indicate that there is a high

degree of correlation between staff and patient

perceptions of customer service based on both survey and

focus group data. If further research can affirm these

findings, they create exciting possibilities for gathering

valid, reliable and cost-effective customer service

information.

Bakar, Akgun and Assaf (2008) have found that

patients’ perceived scores are higher than expected for an

ordinary hospital but lower than expected for a high

quality hospital. Young patients have a high- expected

service score gap and a low adequate service score

difference. Highly educated patients have a high

expected service score difference while uninsured

patients have a low adequate service score difference.

Lamb et al. (2008) noted that service quality is

considered the most effective way a firm can differentiate

it from competitors. According to Aagja and Garg

(2010) hospital service quality is the discrepancy

between patients’ of services offered by a particular

hospital and their expectations about hospitals offering

such services.

Adrienne Curry et.al. (2008) used two different

techniques to address the issue of consultation of

stakeholder in healthcare. The two proposed approaches

viz., SERVQUAL and the Nominal Group Technique on

basis of which data were collected data from a variety of

different stakeholder groups.The priority of dimensions

emerged from study included empathy, responsiveness,

reliability, assurance, and tangibles. From the Nominal

Group Technique research; it was clear that the overall

priority was patient-focused care, followed by

organization, communication and skilled staff

Acharyulu and Rajshekhar (2009) have observed that

the highest service gaps in case of Indian healthcare

industry are for reliability and responsiveness. The same,

according to the researchers is a real cause for concern

and provides a definite starting point for service

improvements.

Wilson et al. (2010) identified service quality is one of

the key factors that affect satisfaction. Patients’

satisfaction is defined as an evaluation of evident

healthcare dimensions. In the private healthcare sector,

it basically depends on curing of the illness. Patients’

satisfaction may be considered as one of the desired

outcomes of care so; patients’ satisfaction information

should be indispensable

Subhajyoti Ray and V. Venkata Rao (2010) assessed

the change in service quality as a result of e-Govemment

project implementation. The authors have studied the

automated civic services system implemented by the

Municipal Corporation of the city of Ahmedabad,

Gujarat State. They proposed the analytical hierarchy

approach as a tool that can be used to assess

e-Govemment induced changes in public service quality.

There were significant advantages of using the method

proposed by study. The method provided a very

convenient tool to e- Government project managers to

monitor the progress made and need to focus on areas

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where improvement was required (Subhajyoti Ray, V.

Venkata Rao, 2005)

Eleuch (2011) analysed that health service quality

perception is a judgment of whether the service

performed for a patient was the most appropriate to

produce the best result that could be reasonably expected

by the patient. Some studies on patient perception

conducted in developing countries have shown that

patients are able to assess and evaluate structural,

process, and outcome of perceived service quality

(Haddad et al. 1998, Andaleeb SS.2001, Baltussen et at.

20014). In private healthcare sector customer perceived

service quality has great importance to service providers.

They should ensure good service quality as perceived by

customers can help a private practice effectively

differentiate itself from competitors and thus giving it a

competitive advantage over others. (Mpinganjira and

Peer, 2011).

Chimed-Ochir, O. (2012),argued that the consideration

of patient satisfaction is an integral part of hospital

management. Misunderstanding of patients’ needs can

lead to underutilization of the existing health facilities

and even influence the overall development of the health

system negatively. A concern was raised about the

challenging issue for healthcare providers are to realize

what elements of patients’ perception significantly

influence their satisfaction. A patient centred study

conducted revealed that patient satisfaction significantly

depend on empathetic services such as nursing care,

respectfulness of nurses and attentiveness of doctors to

patients. It was also said that the level of comfort in the

patients’ room had a great influence on patients

satisfaction.

Irfan, S. M., Ijaz, A. and Farooq, M. M. (2012) used

five quality dimensions, namely; empathy, tangibles,

timeliness, responsiveness and assurance were used to

investigate the quality of services delivered to patients by

public hospitals in Pakistan. The result indicated that

public hospitals are not making visible efforts to deliver

quality services.An exploratory method was used to find

out the relationship between different service quality

variables to identify the most important factors that

determines customer satisfaction.

Zarei et al. (2013) studied service quality in private

hospitals of Iran, evaluating the service quality from the

patients. They found that the highest expectations and

perceptions were related to the tangibles dimension and

the lowest expectation and perception related to the

empathy dimension. Butt and Run (2010) found that the

highest and lowest expectations and perceptions gap of

service quality was reported in the tangibles dimension as

it relates to the physical delivery of care at private

hospitals

It was revealed that the overall service quality regarding

private hospitals are providing satisfactory service to the

patient without discriminating by income or

occupation.(Siddiqua, J. and Choudhury, A. H. 2014).

Coddington & Moore (2014) suggest top five factors

that define quality for health care providers from a

consumer’s perspective. These dimensions are warmth,

caring and concern; Medical Staff; Technology

Equipment; Specialization and Scope of Services

available; and Outcome

According to Newman (2014), despite the controversies

regarding the validity and reliability of SERVQUAL, its

application can be found in health care. The SERVQUAL

dimensions have been modified to suit some study

purposes. Lim and Tang (2014) introduce in

"accessibility/affordability" while Tucker and Adams

(2001) included "caring and outcomes" in their research.

Johnston (2000), increased the SERVQUAL dimensions

to eighteen. On the other hand, the dimensions were

reduced from ten to seven dimensions by Reidenbach

and Sandifer-Smallwood. Their dimensions were

"empathy", "patient confidence"

MacStravic S. (2015) the literature discloses five factors

that stimulus the creation of successful brand equity in

hospital marketing ; i.e. customer satisfaction, trust,

customer loyalty, relationship commitment, and customer

awareness. Customer satisfaction takes place when the

consumer has worthy experiences; the repurchase rate is

high when consumer expectations are exceeded.

Customers who have confidence in an organization will

continue to purchase its products or services that satisfy

them.

Abram(2017) in survey on State of Population Health

survey referred that consumers now a days want cost and

quality transparency. According to the result of survey

77% of consumers want to know the cost of treatment

before going for it.Higher out of pocket costs and high

deductible health plans are valid reasons for this increased

interest for transparency

Blake Morgan, Forbes(2018), highlighted the top 5

trends in Customers; experience for Health care;

Augmented reality, Leveraging Data For Health

care,Patient personalization, Use of Wearable Devices In

Health care , and enhanced Use of Smart Technology.

According to the study conducted by Morgan clinics are

using robots that can monitor a patient without a human

provider being in the room. Smart devices and

applications will continue to grow and spread throughout

the healthcare field.

Keneth R. White(2019), The healthcare industry's

ongoing transformation creates both challenges and

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opportunities for marketers. This transition is driven by

two variables. One is the evolution from a fee-for-service

payment system to a healthcare delivery model based on

transparency, quality outcomes and patient

satisfaction. The second is the rise of the empowered

healthcare consumer. These changes affect both the "how"

and the "who" of medical marketing strategies. As a

result, the role of Service providers as decision-makers is

undergoing a transformation.

CONCLUSION

The study showed that SERVQUAL is a valid, reliable,

and flexible instrument to monitor and measure the quality

of the services. Highly competitive market in the private

hospital industry has caused increasing pressure on them

to provide services with higher quality.The increasing

literacy rate and awareness and increasing levels of

income and the evolution of the media, has brought the

Indian consumer closer to demand quality health care. In

the light of these developments, health care providers

need to have a closer look at the perception of their

patients and try to provide quality medical and health

services to meet their expectations. The assessment of

service quality has posed a challenge for improving the

efficiency and effectiveness of health care service. .A firm

to be successful needs to have a better understanding of

consumer perceptions of service quality.

Gronroos identified three components which affects

overall service quality they are: Technical quality,

Functional quality and Image of the organization.

Technical quality is the outcome of a particular service

and it involves what a customer receives from a service

encounter. Functional quality refers to the way a service is

provided to the customer. It emphasizes on the process of

service delivery. The functional quality and the technical

quality both affect the image of an organization. Image of

an organization is often referred as corporate quality

which is attributed by its current and potential customers.

The Customer assessment of perceived service in health

care provides inputs for the health care organization to

improve its service quality attributes. Analyzing patients’

perspectives gives users a voice, which offers the

potential to make services more responsive to people’s

need and expectations, important elements of making

health care system more effective

REFERENCES

1. Aagja P.Jayesh and Renuka Garg (2010) “Measuring

Perceived Service Quality For Public

Hospitals(Pubhosqual) In The Indian Context”, International

Journal of Pharmaceuticals And Health Care Marketing,

4(1),60-83.

2. Abram(2017) A survey on State of Health Care, a study of

Asian Patient

3. Acharyulu G.V.R.K. and Rajashekhar B (2007), “Service

Quality Measurement In Indian Healthcare Industry,

”Journal of International Business And Economics,

7(2),38-41.

4. Baalbaki , Ahmad, Pashtenko and Makarem (2008), “Patient

Satisfaction With Healthcare Delivery Systems”,

International Journal of Pharmaceuticals and Health Care

Marketing. 2(1), 47.

5. Badri A Massod , Attia Samaa and Ustadi M. Abdulla(2009),

“Healthcare Quality And Moderators Of Patient Satisfaction

:Testing For Causality” , International Journal of Healthcare

And Quality Assurance , 22(4), 382-410.

6. Berry ,L,V.A Zeithaml and A. Parsuraman (1990), “Five

Imperatives For Improving Service Quality”, Slone

Mangement Review, 31(4) 29-38.

7. Bij Vander J.D.,T Vollmar and M. C. D. P. Weggeman.

(1998), “Quality Systems in Healthcare: A Situational

Approach”, International Journal of Healthcare Quality

Assurance, 11(2), 65-70.

8. Brown, TJ, GA Churchill and JP Peter (1993), “Improving

The Measurement of Service Quality, Journal of Retailing ,

69(1), 127-139.

9. Bruansberger Kairn and Gates H. Roger (2002),

“Patient/Enrollee Satisfaction With Healthcare And Health

Plan”, Journal of Consumer Marketing, 19 (7), 575-590.

10. Chahal, Hardeep(2008), “Predicting Patient Loyality and

Service Quality Relationship: A Case Study of Civil Hospital,

Ahmedabad , India”, Vision, 12(4), 45-55.

11. Foster, T (2011), “Expect The Unexpected: Enterprise

Information System At A State Water Resource Department

Improves Process, Quality, and Customer Service”, Quality

Progress, 34, 49-55.

12. Gill Liz and White Lesley (2009), “A Critical Review of

Patient Satisfaction”, Leadership in Health Services,

22(1),8-19.

13. Keneth R. White(2019), A Review of patient satisfaction in

Multispeciality Hospitals, 36(2),27-33

14. Rodrigues, L. L. R., Barkur, G., Varambally, K. V. M., &

Motlagh, F. G. (2011). Comparison of SERVQUAL and

SERVPERF metrics: an empirical study. The TQM Journal,

23(6), 629–643

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Services Research, 163–178

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INFORMATION COMMUNICATION TECHNOLOGY- GAPS BETWEEN

THEORY AND PRACTICE IN TEACHER EDUCATION

Zeba Ilyas*

**

Assistant Professor, Guest, Faculty of Education, Jamia Millia Islamia, New Delhi, India

ABSTRACT

Schools which are the foundation stone and feeding institutions for the colleges and universities should have

very robust teaching learning process. Use of appropriate educational technology at the school level should

have an inbuilt system and mandatory requirement for the classroom teaching. An essential training for the

use of technology needs to be provided to the students’ trainees, who undergo B. Ed. or M. Ed. programmes.

This entails that the curriculum of teacher training institutions must be fully loaded with theoretical and

practical components of educational technology, so that these pupil teachers may use the educational

technology in the school teaching. However it has been noticed that the working teachers while working as

regular teachers in the schools have adequate theoretical knowledge devices and techniques but they are

unable to make the use of such technologies in the classroom

The present study is an attempt to find out the gaps between theory of educational technology imparted to

students teachers during the training programmes in the teacher training institutions and the practice of the

same in the a schools. The study has a sample of 100 pupil teachers of B.Ed from Al-Falah university and 20

teachers teaching at various schools in south Delhi .

Key words- Educational technology, Theory, Practice, Teacher Education

INTRODUCTION

Today is an era of technological advancement in all

walks of life and education is not an exception. Various

technological tools, devices and techniques have made

teaching learning process easier and robust. A well-

equipped teacher in technology excels in the field of

education. “’Teachers need support in using and

integrating ICT into the curriculum and teaching methods

( Lai & Pratt,2004; Amutabi and

Oketch,2003;McGorry,2002 )’. In fact now a days,

course of educational technology has become a main

attraction for the student in the teacher training

institutions. This is an information age where use of new

technologies in the classroom is essential for providing

opportunities for students and teachers (Bhatia & Ilyas

2017). These student teachers are given wide exposure of

educational technologies through a classroom

demonstration, presenting the assignments and terms

papers in seminars and conferences etc. by almost all the

training colleges barring few. These student teachers are

in a way not only taught theoretical aspects of the

educational technology ,but they are trained rigorously in

using them to make their learning more concrete and

lifelong. The way these flied operate today is vastly

different from the way they operated in the past because

of the rapid development (Sharma 2008).

Information and Communication Technology (ICT) plays

a vital role in all aspects of a country’s economy

particularly education (Ankita & Husain2017). By using

ICT tools teachers and students can develop a better

understanding of the content and may use it in the

classroom and in their day to day life. Rapid growth and

improvement in ICT have led to the diffusion of

technology in education (Gulbahar and Guven ,2008).

Education system around the world is becoming

increasingly pressured to apply the new ICT tools to the

curriculum to provide students with knowledge and skills

they need in 21st century (Hue and AbJalil ,2013).

Use of computer, internet, mobile, phone, whatsApp and

the similar other technologies are very common and well

within the reach of teacher and students as well, and the

curriculum of B.Ed and M.Ed. provide a comprehensive

theoretical base of the various tools ,techniques and

devices to their students. With the help of these

technologies people can work with collaboration with the

help of computers (Plomp et al; (2007) Sanyal (2001),

Bhattacharya and Sharma (2007.) The description of

software, hardware, Mass media, radio, television, films,

multimedia, TPACK, SAMR, UDL, MOOCS, teaching

machines, computers and audio visual appliances,

assistive technology like mobile computing and so on so

forth are very well transacted by the teacher educators in

the classrooms of teachers’ training. But at the same time

it has been observed that these students while after

having joined any school as a regular teacher are

reluctant to use their skills and competence of

technologies in the day to day teaching assignments in

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the classroom, in spite of the fact that in some areas the

use of ET may enable the students to learn the concepts

and process more effectively. Students should also have

the opportunity to use such application in practical

classes, seminars and assignments (Aroroa, Quraishi &

Quraishi 2011).

The researcher as a scholar of Educational technology

was very disappointed to see the dismal situation of

practising educational technologies in the classroom by

the teachers teaching different subjects. Hence, she tried

to find out the causes of very pathetic situation of the use

of educational technologies in government Schools of

Delhi, and took up the present study with the following

objectives:

OBJECTIVES

-To study the curriculum of B.Ed. from Educational

Technology point of view

-To study the perception of student teachers about the

components of educational technology prescribed in the

present curriculum.

-To study the perception of working teachers about the

use of educational technology in the classroom

-To study the gaps the gaps between the theory and

practice in the use of educational technology

SAMPLE

The researcher selected 100 student teachers

from Al-Falah University studying educational

technology at B.Ed level. The researcher also

selected 20 working teachers of varied

experiences from 2 south Delhi Sarvodaya

Vidyalyas i.e. 10 from each school. Two teacher

each from the discipline of science, maths, social

science, commerce and language were randomly

selected.

TOOLS AND TECHNIQUE

Two questionnaires, one each for pupil teachers

and for working school teachers were developed

by the researcher to study the perception of

student teachers about the components of ET

taught to them during their B.Ed. programme and

of the working teachers regarding the use of ET

in their day today classroom teaching

Curriculum of educational technology at B.Ed.

level being used in Al-Falah was analysed.

ANALYSIS OF DATA

The data collected through the questionnaires were

arranged in tabular form and they were analysed as

follows:

Table 1: Perception of Pupil Teachers about the theoretical components of Educational Technology

SA (%) A (%) NA (%)

Theory of ET discussed thoroughly 100

Its importance was fully discussed 100

All the concepts involved in ET were

discussed 100

Techniques were taught 100

Description of tools /devices were

taught 90 10

Processes involved in ET discussed 80 10 10

Teleconferencing discussed 60 40

Digital library discussed 60 40

Table 1. has been developed to study the perception of

the student teachers regarding the theoretical aspects

they learned during their study at B. Ed. Level . The

responses through the questionnaire revealed that 100 %

respondents accepted that they learned all the theoretical

components including the importance and all the

concepts related to the Educational Technology and

similarly the various terms used in ET. While asking

about the techniques related to the ET 100% student

teachers said that they were taught about techniques.

About 90% respondent responded in affirmation that

their teacher discussed about all the tools and devices

used in the area of ET in detail. About the processes

involved in the use of different technologies 80%

responded that they were fully acquainted with the

process of ET during their training. About the knowledge

of teleconferencing merely 60% reported that they were

given theoretical background of the same.

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Table 2: Perception of student teachers about the practice of ET in classroom

Frequently Rare Never

Use of internet 80 - -

Preparation of ppt 80 20 -

writing CD 80 20 -

Creating email ID 80% 20%

Sending/receiving mails 100%

-

Creating folders/ files 60% 30% 10%

Browsing of APPS 80 10 10

Use of Mobile Technology 80 20

Teleconferencing 20

Digital library 80 10 10

The above table reveals the perception of the student

teachers about their involvement in the practice imparted

by the teachers to train them in using various tools and

devices of ET during B.Ed. programme. It was reported

by 80% students that were trained in the use of internet

and preparation of power point presentation (PPT) very

frequently, but 20% reported that were trained in

preparation of PPT rarely. The 80% respondent also

pointed out that they were made to learn about creating e

mail ID and writing the CD frequently while 20% said

they were rarely trained in both of these components.

They (100) also reported that they were trained in

receiving and sending e mails. Moreover, 60% student

teachers said they were frequently involved in creating

folders and files while 30% said they were trained rarely

and 10% indicated that they were never trained in this

area. On the components of browsing APPs and the use

of mobile technology, 80% responded that they were

frequently involved practically in this area while 10%

responded that were rarely involved and the similar

percentage responded never for the same. About 20%

reported that they were given exposure to the

teleconferencing on few occasions.

Table-3: Usage of the educational technologies in school

Table 3 depicts the responses of the working teachers in

the schools about their use of various technologies in the

classrooms which they studied during their B.Ed. course.

Only 40-60% teachers reported that they use power point

presentation in the teaching learning process. Regarding

the use of internet also it was found that only 40-60%

teachers use it in their teaching. Regarding the use of any

APPs (below 20%), use of e-mail (below 20%), use of

television (below 20%), and the radio (below 20%) were

the responses of the teachers which are very

90-100% 60-80% 40-60% 40%- 20 Below 20%

Use PPT Yes

Use Internet Yes

Use any APPS Yes

Use Email Yes

Use TV Yes

Use Pictures on

mobile camera Yes

Use Radio Yes

Use Smart classroom Yes

Teleconferencing Yes

Use of Digital library Yes

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disappointing. About 40-60% teachers reported that they

use pictures on mobile and similar percentage (20-40%)

shows the use of smart classroom while teaching in the

classrooms. No teacher reported to have used

teleconferencing. About the use of digital library below

20% teachers said that they use it.

DISCUSSION AND CONCLUSION

The description of the Educational Technology (ET)

transacted in the curriculum of B.Ed. by teacher

educators and the use of those technologies by the

working teachers teaching in the schools raise several

questions. On one hand the teacher educators teaching in

the teacher education institutions are imparting all

necessary knowledge regarding the theoretical

components of Educational Technologies and a detailed

theoretical discussion seems to have taken place related

to the tools, techniques and devices of educational

technology in the classroom. Curriculum of the course

seems to be highly loaded and all necessary components

of ET have been included and are transacted in the

classroom with student teachers. Similarly it has also

been reported that a practical exposure is also provided to

the students regarding the tools, techniques and the

various devises of ET. Training on these tools seems to

be an essential component of the course and the students

have shown their complete satisfaction about their

practical training on such tools and techniques. On the

other hand while gathering information from the teachers

working in the schools it has been found that by and

large there is either no or very minimal use of the

educational technologies in the classroom teaching. To

some extent the teachers use internet and or deliver

lectures with the help of PPT.

Hence, the whole scenario indicates that there is

essentially a gap being noticed in the theory and the

practice in relation to educational technology. However

lack of tools and devices in these schools may be one the

reasons of not using technologies in the classroom

teaching. Issue is sensitive and alarming as there is

enough emphasis on the use of educational technology in

the classroom. Equally important is that the governments

are making huge allocation to the educational institutions

to procure even very expensive but necessary technology

tools and devises which needs to be optimally utilised by

the teachers as well as students failing which the national

resources may go waste without producing fruitful

results. The school management and the administration at

the top should take a serious note of it.

REFERENCES

1. Ankita & Husain, Ilyas ((2017) : Information and

Communication Technology Act of School Education 2013

– A Critical Analysis in Signage, Vol. 5 No.2, July- Dec.

2017, ISSN 2321-6530

2. Arora,D,Qurishi,S,& Qureshi,Z (2011)ROLE OF

INFORMATION COMMUNICATION

TECHNOLOGY....12TH National Conference on emerging

trends in computing and communication by Pioneer institute

of professional studies

3. Amutabi, M. N. & Oketch, M. O. (2003), 'Experimenting in

distance education: the African Virtual University (AVU)

and the paradox of the World Bank in Kenya', International

Journal of Educational Development Vol. 23No.(1),Pp; 57-

73.

4. Bhatia & Ilyas (2017) : Access to ICT in Signage, Vol. 5

No.2, July- Dec. 2017, ISSN 2321-6530

5. Bhattacharya, I. & Sharma, K. (2007), 'India in the

knowledge economy – an electronic paradigm', International

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568

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Development using Information and Communication

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7. Gulbahar & Guven (2008)A SERVEY ON ict

INTEGRATION USAGE AND THE PERCEPTIONOF

SOCIAL STIDIES TEACHERS IN TURKEY .Journal on

educational technology and society Vol 3.

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INTEGRATION INTO CURRICULUM AMONG

UNIVERSITY LECTURERS IN VIETNAM, international

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9. Plomp, T., Anderson, R. E., Law, N., & Quale, A. (Eds.).

(2009). Cross-national information and communication

technology: policies and practices in education. Charlotte,

N.C.: Information Age Publishing.

10. Sharma, R. (2003), 'Barriers in Using Technology for

Education in Developing Countries', IEEE0-7803-7724-

9103.Singapore schools', Computers & Education Vol .41,

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11. Sanyal, B. C. (2001), 'New functions of higher education

and ICT to achieve education for all', Paper prepared for the

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Countries, International Institute for Educational Planning,

UNESCO, September 10 to 12, Paris

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SERVICE QUALITY DIMENSIONS IN THE INDIAN BUS TRANSPORTATION

SECTOR: A CONCEPTUAL REVIEW

Abhishek Asthana*, Sindhu

**, M. S. Bhat

***

*Research Scholar, School of Management Studies, JNTUH Hyderabad, India

**Professor-Management Studies, School of Management Studies, JNTUH Hyderabad, India

***Former – Director, School of Management Studies, JNTUH Hyderabad, India

ABSTRACT

Transportation is one of the major key elements of the economic development. People are travelling places to

explore new opportunities for livelihood and career. More people than ever before are opting for bus travel as

their preference for travel. In India, the State Road Transport Corporation (SRTC) operates with an objective

of connecting maximum possible places whereas the private operators exist to make profits however the success

and survival of the firm whether public or private rest on its service quality and the passenger’s satisfaction.

There are various challenges which the service provider firm faces like high innovation rate, customer demand

for quality competition, due to which they are pressurized to deliver more to meet customer expectations.

Increased competition is forcing the service provider firms to come up with innovative ideas to attract the

passengers but constant change in the very expectation of service quality makes it difficult for the firm to win

passenger loyalty. Therefore, it is important to study the various researches and its relevance in the Indian

context. This paper tries to study and understand the concept of service quality, service quality measurement

scales and their application in highway passenger bus transportation sector. The development of literature in

context to bus transportation industry in various countries and in Indian settings is discussed. The travel

experience and the dimensions of service quality are reviewed in highway passenger bus transportation in

Indian context.

Keywords: Service Quality, Customer Satisfaction, Bus Transportation, Service Quality Dimensions

INTRODUCTION

Service sector accounts for over 60 percent of total global

wealth. Being the largest sector of India, it is the key

driver of India‟s economic growth. The service sector

grew at 12.5 percent year-on-year in 2018-19 at current

prices with its contribution to India‟s Gross Value Added

(GVA) being 54.17 percent of total India‟s GVA.

Activities such as transportation, tourism,

communication, finance, insurance, real estate, human

resources etc. forms India‟s service sector1.

India has one of the largest road networks in the world of

approximately 47 lakh kilometers. Around 65% of the

total freight and 80% of the passenger traffic is carried

out by road. Over the next decade, it is estimated that

transport sector would require an investment of nearly

$500 billion.

This is projected to be part of an overall push to stimulate

overall infrastructure investments to 6.8 percent of GDP

during the 12th plan and 8.0 percent of GDP during the

13th plan

2. The passenger transportation industry is a

large contributor to economic value within various

transportation branches such as airlines, railways and bus

transportation. In the passenger transportation industry,

service quality is an aspect influencing travel user

choices, defined as customer perception of how well a

service meets or exceeds expectations (Parasuraman,

1988 and Czepiel,1990). Perception of service quality

provides a competitive edge to the service provider.

Saikumar (2011) observed that private bus service exists

to maximize profit and are in general not concerned

about the issues relating to social welfare and on the

other hand State Road Transportation Units (SRTU‟s)

main objective is to maximize public welfare. SRTU‟s

plays an important role in extending bus transportation

services to all sections of the society to improve

commutation even if the running the buses on certain

routes is not profitable. For example, the APSRTC

operates 5000 Palle Velugu services at a loss of Rs 7 per

each kilometer amounting to Rs 1000 crore loss per

annum3. Post privatization SRTC‟s faced stiff

competition from private players. Over the decades the

operations of public services have been subjected to

many changes since the introduction of liberalization

(Binge, 2003). Bus service providers work in the

direction to gain competitive advantage over their

competitors (Tam, 2000) and service quality has emerged

as most important tool for the service providers whether

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public or private to differentiate over competition. The

improvement in service quality is quite visible in the

public sector also (Lagrosen and Lagrosen 2003; Nadiri

and Hussain, 2005) observed that the passenger‟s

satisfaction is affected by service quality which helps in

retention and also encourages recommendations in the

transportation sector. It also leads to improving public

image in the minds of the passengers. High-quality of

service results in increased customer patronage,

retention, market share, and increased profitability

(Morash & Ozment, 1994). Railway and airline

transportation services have been researched many times

in the past in terms of enhancing service quality,

however, very scanty research has been done with respect

to highway passenger bus transportation services.

Therefore, the research related to service quality and

customer satisfaction in the bus transportation is vital in

improving the standards of the sector.

The objectives of the study are to review the literature

related to service quality and dimensions of service

quality across various industries. Then the development

of literature in context to bus transportation industry in

various countries and in Indian scenario is discussed. The

travel experience is understood and the various

dimensions of service quality are examined that impact

the service quality which in turn leads to customer

satisfaction.

REVIEW OF LITERATURE

For any organization, measuring service quality is

important to understand the needs and expectations of the

customers and thereby use it to build competitive

advantage over its competitors. In transportation sector

too, its measurement is critical. Passenger choices are

evolving and hence it makes sense for a service provider

firm to understand how passenger choices are shaping

up. Zeithaml, Parasuraman, and Berry (1985, 1988) in

their research defined service quality as the extent of

difference between customers‟ expectation of service and

their perception of the service. They developed an

instrument SERVQUAL to measure the service quality

by identifying five dimensions namely tangibility,

reliability, responsiveness, assurance and empathy. The

same authors refined the instrument and improved its

reliability and validity through later assessment study.

The instrument is popularly used by the organization to

measure the service quality.

The service quality is widely known to be

multidimensional (Gronoos 1982,1990; Parasuraman

1985) and there is no consensus among the researchers

about the nature or the content of the dimensions (Brady

and Cronin, 2001). The American perspective focusses

on the functional quality attributes whereas the European

perspective considers technical quality and image also. In

review of literature it is seen that the study of service

quality dimensions is greatly influenced by the European

perspective.

Lehtinen and Lehtinen (1982) defined service quality in

terms of physical quality, interactive quality and

corporate (image) quality. Physical quality relates to the

tangible aspects of the service. Interactive quality

involves the interactive nature of services and refers to

the two-way flow that occurs between the customer and

the service provider. Corporate quality refers to the

image attributed to a service provider by its current and

potential customers. Gronroos also emphasized the

importance of corporate image in the experience of

service quality, similar to the idea proposed by Lehtinen

and Lehtinen (1982). Customers bring their earlier

experiences and overall perceptions of a service firm to

each encounter because customers often have continuous

contacts with the same service firm

The customers perceive what he receives as the outcome

of the process in which the resources are used, i.e. the

technical or outcome quality of the process. But he also

and often more importantly, perceives how the process

itself functions, i.e. the functional or process quality

dimension. For some services the technical quality is

difficult to evaluate. As in healthcare the patient

(customer) has to rely on the technical competence of the

doctor and it might be difficult for him to evaluate the

immediate results and therefore customers rely on other

attributes such as reliability and empathy to access

quality.

The five dimensions of SERVQUAL have been

contested for being unsuitable for some service

businesses (Cronin and Taylor, 1992). In practice,

suitable modifications are thus generally needed in order

to reflect the specific characteristics of the service

context being studied. In their study, Hu and Jen (2006)

proposed a scale of bus service quality under four

dimensions – interactions with passengers, tangible

service equipment, convenience of service, and operating

management support – and undertook a survey of bus

services in Taipei, Taiwan. Interaction with passengers

refers to the respect and care passengers feel when

interacting with service providers, and how they respond

to passengers‟ problems. Tangible service equipment

relates to the level of comfort of the facilities and

equipment operated by the service providers.

Convenience of service concerns accessibility, the

information provided, and the convenience of the service

network. Finally, operating management support pertains

to elements such as bus schedules, service periods, and

the number of staff.

Joewono and Kubota (2007) measured the service quality

of Indonesian paratransit systems using nine factor which

were – availability, accessibility, reliability, information,

customer service, comfort, safety, fare, and

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environmental impact. They explored user-perceived

service quality and overall satisfaction with the

paratransit service in order to make forecasts with regard

to competition from motor vehicles in Bandung,

Indonesia. The results showed that service quality has

positive effects on both overall satisfaction and customer

loyalty, and overall satisfaction has a positive impact on

customer loyalty Eboli and Mazulla (2007) investigated

service quality attributes important for customer

satisfaction with a bus transit service in Cosenza, Italia.

Respondents were asked to rate the importance and

satisfaction with 16 service quality attributes (bus stop

availability, route characteristic, frequency, reliability,

bus stop furniture, bus overcrowding, cleanliness, cost,

information, promotion, safety on board, personal

security, personnel, complaints, environmental protection

and bus stop maintenance). The result shows that the

latent variables important for global customer satisfaction

are service planning which is reflected in reliability,

frequency, information, promotion, personnel and

complaint. In order to sustain and improve the loyalty of

existing passenger and to attract new passengers,

transport service providers have to improve the service to

accommodate wide range of customer needs and

expectation (Beirão & Sarsfield Cabral, 2007;

Andreassen, 1995)

SERVICE QUALITY DIMENSIONS

Customer evaluates the execution of service both from

the perspective of outcome and actual process of service

delivery (Parasuraman 1985). Various aspects of service

quality have been categorized in the literature

(Parasuraman 1985, Brady and Cronin 2001, Cronin and

Taylor 1992, Dabholkar et. al. 2000). Customers'

perceptions of a company's performance are based on

individual components, rather than using a single

summary measure (Brady and Cronin 2001). In bus

transportation context, the passenger journey has various

service dimensions, starting from the mode of booking of

tickets to giving a rating or writing a review of travel

experience. It is important to measure those key service

dimensions where the customer's experience is most

likely to be impacted by problems.

The traditional literature on the service quality has

highlighted the importance of tangibility of the core

products and services provided, whereas, the

contemporary views lay emphasis on the importance of

other additional benefits i.e. add-ons which the product

or a service may provide. Alignable improvements are

necessary for the firms to exist but add-ons provide

delight to the customers. For example, alignable

improvement in the mobile phone device industry would

be improvement in the communication area and non-

alignable add-ons would include providing camera, radio,

storage capacity and so on. The distinction between

alignable and non-alignable addons is important for our

research because consumers are likely to use different

cognitive processes to assess these two types of

improvements. (Marco Bertini, Elie Ofek, Dan Ariely

2008). In context to the highway passenger bus

transportation, competition is coming not only from the

other firms in the industry but also from the private

personal transportation. Hence the add-ons play an

important role in enhancing the satisfaction level of the

customer which needs to be explored.

The conceptual definition of service quality can be

applied across various service industries, however the

dimensions forming the service quality needs to be

identified and developed as per the industry. For

example, in the food delivery sector, one of the aspects of

service quality may be quick delivery time

of food; however, this is clearly irrelevant to the quality

in the healthcare industry. There are elements of service

quality that are important to specific industries that may

not be generalizable. Therefore, it is important for each

industry to determine its own set of service quality

characteristics that best suit the service they provide. In

transportation, areas such as service reliability, comfort,

safety, and communications are considered to be key

dimensions of service quality.

Since, these variables are related to measure the service

quality of bus service, it is termed as „BUSQUAL‟ as did

by Shainesh and Mathur (2000) in the case of RAIL

QUAL; Ekiz et al., (2006) in the case of AIRQUAL and

Tsoukatos and Rand (2007) in case of GIQUAL. Service

quality in bus services were highlighted by Too and Earl

(2010) whereas Wang (2010) analysed the gap between

perceived and expected quality in urban transport.

Benedelto (2012) used 15 items to measure the service

quality in bus services. In this study, we will define the

dimensions of the service quality keeping SERVQUAL

scale as the underlying scale.

The table below gives us dimensions of service quality

which are measured across industries. Not all of these

factors will be relevant to transportation industry and

hence it is important to understand and consider each

dimension critically, to decide whether or not they should

be included in the measurement of service quality.

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Table 1 - Dimensions Used to Measure Service Quality in Various Industries.

Dimension Modified/ Sub Divided Industry

1 Tangibility Alignable Tangibility Healthcare, Banking, High Speed Rail, Airlines, Retail

Non-Alignable Tangibility Transportation, Education, Electronic Items

2 Reliability Healthcare, Banking, Online Education, Retail Space

3 Responsiveness Communication Healthcare, Banking, Airlines, Customer Service, Online

Education, Retail Space

4 Assurance Trust Healthcare, Banking, Auto repair, Online space, Online Education

Safety Healthcare, Airlines, Railways

5 Public Image Banking Airline, Public Vs Private

6 Competence Healthcare, Auto Manufacturing, IT

7 Understanding the Customer Telecommunication, Cable TV operators, Hospitality

8 Empathy

Healthcare, Banking, Airlines, Catering, Auto repair, Online

Education, Retail Space

SERVICE QUALITY DIMENSIONS FOR BUS TRANSPORTATION

Proposed Model: Authors

Service

Quality

Customer

Satisfaction

Safety

Tangibility

Supplementary

Tangibility

Trust

Communication

Reliability

Public Image

Empathy

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DISCUSSION

TANGIBILITY AND SUPPLEMENTARY

TANGIBILITY

A number of studies measuring service quality in various

service sectors include the influence of tangibles.

(Vandamme & Leunis, 1993; Nel & Bovaird, 1996 and

Boshoff & Gray, 2004). In the literature it is argued that

the most significant difference between services and

products is the characteristic of intangibility which in

turn has a noteworthy impact on the marketing

management of services (Parasuraman et al., 1985 and

Grönroos, 1990). The intangibility nature of service

makes it difficult for the customers to understand service

quality thereby making it even more complicated for

businesses to understand how consumers perceive and

evaluate a service. Consumer‟s perception of quality is

often based on physical evidence and price rather than

the core service. Physical evidence refers to the

environment in which the service is delivered and where

the firm and the customer interact and also any tangible

commodities that facilitate performance or

communication of the service (Zeithaml & Bitner, 1996).

This suggest that the physical evidence plays a vital role

in the transportation sector in influencing the service

experience of a passenger. Further establishing the

significance of tangibility in the perception of service

quality in transportation sector, Nagadevera (2007)

assesses the quality of services provided by transport

service providers in Karnataka and Tamil Nadu and

Andhra Pradesh and the study revealed that passengers

expectations with regard to robust looking bus, the visual

appearance of facilities, and professional appearance

were relatively low yet their perceived performance were

higher for all of these variables.

It is proposed that the tangibility evaluation may be

further divided into two parts. While the first one refers

to the core aspects of the bus, the second one refers to

supplementary services passenger expectation which

engages the passenger while travelling in the bus. It is

believed that the passenger attaches much important to

these supplementary tangible items and are willing to pay

premium price for the service. These items if neglected

by the service providers may result in loss of business

opportunity and hence it becomes imperative to test the

importance of these aspects in the evaluation process of a

passenger of the travel experience.

RELIABILITY

Reliability is the ability of the service provider firm to

perform the promised service dependably and

consistently. Reliability means that the service provider

delivers on its promises-promises about delivery, service

provision, and core service attributes. Passengers want to

travel with the service providers which can keep their

promise – promise about service outcomes such as

punctuality in terms of pick up and reaching the

destination on time and core service attributes in terms

tangibles as explained in their website or communicated

to them by the selling agency.

All companies need to be aware of customer expectation

of reliability. Firms that do not provide the core service

that customers think they are buying fail their customers

in the most direct way.

COMMUNICATION

Responsiveness is another aspect of service quality

which plays a critical role to exceed customers

expectation, which is readiness and willingness of the

employees to offer service encompasses timeliness of

services (Kumar and Charles, 2010). It further includes

understanding attention to passengers‟ concern in their

travel experience. Technology has made this requirement

easier to cater to customers need and many service

providers are utilizing the technology for communicating

with their customers. The customer wishes to have

details of the travel journey to be sent to them

as an SMS Communication regarding the delay in

reaching the pick-up point causes disappointment in the

customers mind. Live location sharing of the bus and

communicating with the driver has enriched the

experience of waiting for the travel as the customers are

sure of the on-going situation.

Tangibility

(Alignable and

Non-

Alignable) Supplementary

Service

Tangibility

Core Service

Tangibility

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TRUST AND SAFETY

In industries where one-on-one employee-to-customer

relationships are the focus of the service provided, trust is

an important construct. As with any human interaction,

trust is a key factor in forming a lasting positive

relationship. In the literature, trust was included in the

loyalty model for both the medical care and auto repair

industries. The customer must have complete confidence

when putting their health or automobile in another's

hands, and if that trust is broken the customer will be

highly unlikely to feel comfortable returning to that

particular service provider. In the developed countries,

passengers are less concerned about the precautions to be

taken for the journey however in Indian context there

have been instances where there is gross negligence and

overlook of matter which has proved costly. For instance,

absence of fire extinguisher in the journey can be

overlooked by the maintenance team and if the

emergency exit is jammed, due course of proper action to

be followed can be missing. For the long duration, the

service providers must provide two drivers but this rule is

seldomly followed in the private transportation service

providers. Hence passengers trust in the service provider

is an important dimension to measure the service quality.

Safety as a factor to measure the service quality has been

used in many service industries, including hospitals and

health care, package delivery, and air traffic control. In

bus transportation also safety has an important role to

play. The highway roads can be bad and in such

instances, it the driver‟s ability to drive in a manner that

jerky movement are minimum. Companies‟ tough policy

towards rash driving can be viewed very positively by

the passenger.

EMPATHY

Empathy is the individual attention and caring the

organization offers to its customers that involves giving

individual attention to customers. (Parasuraman et al.,

1985). In few countries, it is essential for the service

providers to provide individual attention and also

demonstrate it to them that the firm has done its best to

satisfy their needs. In this competitive world, the

customer‟s requirements are rising day after day and it is

the companies‟ duties to their maximum to meet the

demands of customers, else customers who do not

receive individual attention will search elsewhere. In

transportation context, customers also expect the staff i.e.

people on the ground, conductor and the driver to be

neatly dressed, polite and pleasant to speak to. There are

various instances where they need to interact with the

staff for help and would expect them to be empathetic

towards them. For example, the passenger may not

understand the native language of the place when he is

visiting from one state to another or may be requiring

help in keeping his or her luggage. A passenger may be

traveling with young children with them and would like

to deal with empathetic people. Also, one of the

expectations is that the staff can handle any conflict

which may arise during the journey.

PUBLIC IMAGE

The consumer's image of a service provider can have a

lasting effect on how they perceive the performance of

the service being delivered. The public image of the

organization is generally thought to be derived from

attitudes accumulated through direct experience with the

service combined with indirect experiences through

marketing and communications (Andreassen and

Lindestad 1998). Gronroos (1988) describes image as a

preconceived notion or memory of an organization held

by the customer that may influence the perception of the

service provided. There has been debate, however, on

whether image affects customer loyalty directly or is

mediated by other factors (Bloemer 1990). Dowling‟s

research in the airline industry demonstrate that the

passenger's evaluation of service quality and service

value is influenced by the perception of airline image

(Dowling 1994). It has also been argued in the literature

that image not only influences perceptions of service

quality and value of service but also customer's

satisfaction with the service (Andreassen and Lindestad

1998).

Assurance

Safety

Trust

Responsiveness Communication

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CONCLUSION

The research in the field of service quality in highway

passenger bus transportation is in an initial stage of

development stages considering Indian scenario

nevertheless the importance of service quality to improve

customer satisfaction is well understood. Therefore, it

becomes important to identify the determinants of service

quality which in turn would be helpful in improving the

lacked area thereby leading to enhanced customer

satisfaction.

Passengers would like to utilize their time while

travelling and in the age of enhanced technology, it has

become easier for the service provider to cater to this

need of the customer. Supplementary tangibility

dimension is important as the options to provide items

are plenty but it would add up to the cost and therefore it

become more important to understand how to keep the

passengers engaged during travel. There is a need to

deliver a high level of service to their customers by

enhancing not only the tangible dimensions, but also

improving the knowledge, skills and courtesy of their

staff. This is especially important because the ability of

the staff to inspire confidence and trust in relating to

customers has been found to be an important dimension

of service quality, which has a positive impact on

customer satisfaction. A favorable and well-known image

is an asset for any firm because image has an impact on

customer perceptions of the communication and

operations of the firm in many respects. If a service

provider has a positive image in the minds of customers,

minor mistakes will be forgiven. If mistakes often occur,

however, the image will be damaged. If a provider‟s

image is negative, the impact of any mistake will often

be magnified in the consumer‟s mind. In a word, image

can be viewed as a filter in terms of a consumer‟s

perception of quality.

In this paper, the literature related to service quality in

the transportation sector is studied and based on the

traditional and contemporary views, the proposed

dimensions for measuring the service quality in the bus

transportation are tangibility, supplementary tangibility,

reliability, communication, trust, safety, empathy and

public image. It is recommended that future researchers

empirically test the proposed dimensions in the context

of public and private bus transportation.

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22. Valarie A., Z., Mary Jo, B., & Dwayne, G. (2006). Services

marketing (4 ed.): McGraw-Hill

23. Valarie A., Z., Parasuraman, A., & Leonard L., B. (1990).

Delivering Quality Service: Balancing Customer

Perceptions and Expectations (1 ed.). New York, USA:

Free Press.

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SUB PRIME LENDING CRISES AND PERFORMANCE OF PUBLIC SECTOR

BANK IN INDIA

Asif Pervez*, Rohit Bansal

**

*Post-Doctoral Fellow (UGC), Department of Commerce, Aligarh Muslim University, Aligarh, India

**Assistant Professor, Department of Management Studies, Vaish College of Engineering, Rohtak,

Haryana, India

ABSTRACT

Banks promote economic growth of a country by intermediating money flows, supporting payment system

and implementing monetary policy in the economy.The global financial crisis of 2007-08 affected all the

countries in the world and India too felt its impact. The present study attempts to assess the impact of sub-

prime lending crisis on the financial performance of public sector banks in India. Data for a period of 13

years from 2005 to 2017were collected from RBI database, financial statements of banks and other sources

available in public domain. The period of the study was divided into three eras that is pre crises, financial

crises and post crises era. It was concluded that financial crises negatively impacted financial performance

of Indian Public sector banks but their performance had further worsened in post crises period.

Key words: Sub Prime Lending Crises, Financial Performance, Public Sector Bank

INTRODUCTION

Banking act as lifeline of an economy as banks

intermediates money flows supports payment system and

helps in implementing monetary policy in the economy

and thereby promoting economic growth of the country.

Financial crisis causes stress on the financial system

which may results in failures of important financial

institutions and sudden downturn in the economy. The

financial crisis of 2007-08 was originated in the US in

August 2007 as the sub-prime mortgage crisis, which

further deepened during September 2008 on failure of

some important financial institutions, resulted in a

worldwide failure of confidence. It affected all the

countries in the world, developed as well as developing

countries. Asian countries were also affected by the US

financial crises as their exports were declined due to

decrease in the demand from the developed countries.

Therefore, this financial crisis affects the financial sector

of the developing economies through trade and

confidence channels. Indian banking system also felt the

shock but managed it efficiently. Indian banking system

though considered to be sound, well regulated,

diversified and shock absorbing, it was not immune to

the financial crisis of 2008. Accumulation of poor quality

assets on bank’s balance sheet due to sub-prime lending

is a threat to banks survival. NPA is one of the measures

of asset quality of bank. Poor quality assets have effects

on other performance variables of the banks that is

capital adequacy ratio, efficiency, profitability and

liquidity.This study deals with the analysis of

performance of the Indian Public sector banks in Pre

Crises, During Crises and Post Crises era.

STATEMENT OF PROBLEM

The global financial crisis of 2007-08 affected all the

countries in the world with varying degree. Indian

economy too felt the impact of global financial crisis

of 2007-08. It is believed that Indian commercial

banks were resilient in the initial phase of the crisis.

But as the crisis deepened, they were affected to some

extent. The present study attempts to assess the impact

of sub-prime lending crisis on the financial

performance of public sector banks in India.

REVIEW OF LITERATURE

Anand (2014) analyzed the performance of Scheduled

Commercial Banks during the period 2005-06 to 2007-08

and concluded that the Indian Banking Industry was

stable but growing slowly.

Badola and Verma (2006) identified NII, Provisions and

Contingencies, Net profit as the high power indicators of

profitability while NPAs, CD Ratio, Business per

employee as the low explanatory power indicators of

profitability.

Batra (2003) argued that NPAs caused reduction in

steady erosion of capital resources, competitiveness and

increased difficulty in augmenting capital resources

Mahesh and Rajeev (2009) found that deregulation has

significantly impacted efficiency measures of banks.

They found that Public Sector banks were doing better

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than private sector banks in terms of efficiency.

However, Private Banks have shown marked

improvement during the post-liberalization period in their

efficiency measures.

According to Kumar et al, (2009) financial crisis

transmitted into the Indian economy through export and

exchange rates, financial sector.

Singh (2010) argued that GDP affects the profitability of

banks while the asset quality measured by expense

management by OEXP/TA and NPA/TA ratio affects the

performance of banks adversely.

OBJECTIVES OF THE STUDY

The broad objectives of the study are as follows

1. To analyze the impact performance of Public

sector banks in Indiain terms of lending

behaviour, assets quality and Profitability during

the pre-financial crisis, financial crisis and post

financial crises era.

2. To understand the current performance status of

Public sector banks in India.

3. To suggest measures to safeguard commercial

banks in time of crisis.

RESEARCH DESIGN

The present study is mainly based on secondary data. An

analytic and descriptive research design was adopted for

the present study. Banks in the Indian public sector banks

were included in the sample of the study. The

performance of banks was analyzed with respect to their

lending behaviour, profitability and assets quality. Data

were collected from RBI database, financial statements

of banks and other sources available in public domain.

Data for a period of 13 years from 2005 to 2017 were

collected from RBI database, financial statements of

banks and other sources available in public domain. The

period of the study was divided into three eras that is pre

crises, financial crises and post crises era. Descriptive

statistics were used to analyze the collected data. Data

were presented with the help of tables and graphs.

DATA ANALYSIS

This section of the study is divided into three sub section,

Impact of sub-prime lending crises on lending pattern of

banks, Impact of sub-prime lending crises on Profitability

of banks and Impact of sub-prime lending crises on Asset

Quality of banks.

IMPACT OF SUB-PRIME LENDING CRISES ON

LENDING PATTERN OF BANKS

This section is about the Impact of sub-prime lending

crises on lending & investments pattern of banks during

the pre-financial crisis, financial crisis and post financial

crises era. Changes in the lending and investments

indicators of the banks across the different ownerships

and across the different eras have been assessed. The

analysis is based on the calculation of the following

ratios.

Investment in government securities to total

investments (GSTI)

Advances secured by tangible assets to total

advances (ASTA)

Unsecured advances to total advances UATA)

Priority sector advances to total advances

(PSTA)

Table 1: Lending Patterns of Public sector Banks

Year GSTI ASTA UATA PSTA

2005 83 83.00 17 34.45

2006 83 81.11 18.89 35.33

2007 81 81.30 18.70 34.00

Pre-crises Average 82 81.80 18.20 34.59

2008 82 78.90 21.10 32.38

2009 84 80.73 19.27 30.16

2010 83 79.82 20.18 30.89

During Crises Average 83 79.82 20.18 31.14

2011 82 80.71 19.29 30.56

2012 84 82.62 17.38 28.82

2013 82 86.59 13.41 28.00

2014 81 87.07 12.93 28.48

2015 85 87.18 12.82 29.31

2016 84 86.59 13.41 31.05

2017 83 86.51 13.49 32.15

Post crises Average 83 85.32 14.68 29.77

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Increase in risk factor brings an increase in the investments in government securities since these were considered to

the least risky.

Figure 1:Trends of Lending Patterns of Public sector Banks

There was an increase in the investment in government

securities of Public sector banks from the pre crises era to

Crises and post crises era. There was a decrease in Ratio

of advances secured by tangible assets to total advances

and a increase in Ratio of unsecured advances to total

advances from pre crises era to crises but an increase in

ASTA and a decrease in UATA was observed in post

crises era. The ratio of priority sector advance to total

advances decrease from pre crises era to crises era. It

further decreased in post crises era.

IMPACT OF SUB-PRIME LENDING CRISES ON

PROFITABILITY OF BANKS

This section is about the Impact of sub-prime lending

crises on performance of banks in terms of profitability

during the pre-financial crisis, financial crisis and post

financial crises era. Changes in the financial performance

indicators of the banks across the different ownerships

and across the different eras have been assessed. The

analysis is based on the calculation of the following

ratios.

Operating profit ratios (OPR)

Return on Assets (ROA)

Return on Equity (ROE)

Net Interest Margin (NIM)

Table 2: Profitability of Public sector banks

Year OPR ROA ROE NIM

2005 2.39 0.95 17.24 3.18

2006 2.00 0.88 15.39 3.03

2007 1.91 0.92 16.08 2.79

Pre-crises Average 2.10 0.92 16.24 3.00

2008 1.84 1.00 17.13 2.35

2009 1.96 1.03 17.94 2.35

2010 1.87 0.97 17.47 2.29

During Crises Average 1.89 1.00 17.52 2.33

2011 2.05 0.96 16.90 2.77

2012 2.05 0.88 15.33 2.76

2013 1.87 0.80 13.24 2.57

2014 1.71 0.50 8.48 2.45

2015 1.70 0.46 7.76 2.35

2016 1.51 -0.07 -3.47 2.23

2017 1.68 -0.10 -2.05 2.12

Post crises Average 1.80 0.49 8.03 2.46

0

20

40

60

80

100

Pre-Crises Crises Post-Crises

GSTI ASTA UATA PSTA

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There was a decrease in the operating profit ratio (ratio of

operating profit to total assets) from pre crises era to

crises era, it further decreased in post crises era. There

was a marginal increase in ROA from pre crises era to

post crises era which further decrease in post crises era.

Figure 2: Trends in Profitability of Public sector banks

There was an increase in average ROE from pre crises

era to crises era but a decrease from crises era to post

crises era for Public sector banks. Average Net interest

margin decreased from pre crises era to crises era but

increased in post crises era.

IMPACT OF SUB-PRIME LENDING CRISES ON

ASSET QUALITY OF BANKS

This section is about the Impact of sub-prime lending

crises on Asset Quality of banks in terms of Gross NPA

to Gross Advance Ratio (GNGA) during the pre-financial

crisis, financial crisis and post financial crises era.

Changes in the Gross NPA to Gross Advance Ratio of

the banks across the different ownerships and across the

different eras have been discussed.

Table 3: Asset quality of Public sector banks

Year Gross NPA Gross Advance GNGA

2005 465985 8708509 5.350916

2006 421172.5 11347238 3.711674

2007 389730 14644950 2.66119

Pre-crises Average 3.907927

2008 406000 18190740 2.231905

2009 459176.2 22834734 2.010867

2010 573008.7 25193309 2.274448

During Crises Average 2.172407

2011 710474.1 30798042 2.306881

2012 1124892 35503892 3.168362

2013 1644616 45601686 3.60648

2014 2272639 52159197 4.357121

2015 2784680 56167175 4.957842

2016 5399563 58219511 9.274491

2017 6847323 58663734 11.67216

Post crises Average 5.620476

0

2

4

6

8

10

12

14

16

18

20

Pre-Crises Crises Post-Crises

OPR ROA ROE NIM

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Average of the ratio of Gross Non-Performing Assets to Gross Advances has been analyzed as a measure for the asset

quality across the three eras.

Figure 3: Asset quality of Public sector banks

The results have been illustrated graphically in. There

was a decrease in GNGA from pre crises era to crises era

in Public sector banks. It increased to a greater extent

from crises era to post crises era.

FINDINGS OF THE STUDY

There was an increase in GSTI from the pre crises era to

Crises and post crises era. There was adecrease in ASTA

and increase in UATA from pre crises era. PSATA

decreased from pre crises era to crises era. Operating

profit ratio decreased from pre crises era to crises era, it

further decreased in post crises era. ROA marginally

increase from pre crises era to crises era which further

decrease in post crises era. ROE increased from pre

crises era to crises era but it decreased in post crises era.

NIM decreased in crises era as compared to pre-crises era

however, it increased in post crises era. There was a

decrease in GNGA from pre crises era to crises era which

further increase in post crises era.

PRACTICAL IMPLICATIONS OF THE STUDY

The findings of the study will be helpful to the policy

makers involved in banking sector to develop strong and

viable banking structure in the country that can withstand

the economic crisis of future. Similarly, this study can

facilitate in developing Early Warning Signal models so

that prompt corrective actions could be taken to counter

the negative effects of such crisis.

LIMITATIONS OF THE STUDY

The study is limited to Indian Public sector banks only.

The period of the study is confined to 13 years only from

2005 to 2017. The study is limited to studying the

performance variables of banks limiting to Lending

behaviour of banks, Profitability and Assets Quality of

banks. Other variables such as liquidity, managerial

ability, Social impact, etc. are not included under the

purview of this study.

CONCLUSION

There was an increase in the investment in government

securities of Public sector banks during financial crises

and post crises period in comparison to the pre crises era

as increase in risk factor bring an increase in the

investments in government securities since these

securities are considered to be least risky. There was a

decrease in secured advances during financial crises,

however, secured advances of public sector banks

increased in post-crises period to reduce the risky assets

in their portfolio. There was a decrease in priority sector

lending by the bank during crises and post crises period

as bank advanced more to sectors other than priority

sectors to increase their profitability. There was a fall in

average Return on Assets and return on equity and

Operating profit ratio of public sector banks in post crises

era indicating that performance of public sector banks

had worsened in the post crises period in comparison to

even financial crises period. However, Average Net

interest margin increased in post crises period. Assets

quality of public sector banks had deteriorated in post

crises period as average Gross Non-Performing Assets to

Gross Advances had increased to a greater extent from

crises era to post crises era. Hence, it can be concluded

that financial performance of Indian Public sector banks

had further worsened in post crises period.

0

1

2

3

4

5

6

pre crises post

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REFERENCES

1. Anand, S. (2014). Emerging Challenges for Indian Banking

Industry in the backdrop of Global Financial Crisis. Oxford

Journal: An International Journal of Business &

Economics, 8(1).

2. Batra, S. (2003).“Developing the Asian markets for Non-

Performing Assets; developments in India”.IIIrd Forum on

Asian Insolvency Reform, Seoul, Korea.

3. Das, A. (1997). “Measurement of productive efficiency and

its decomposition in Indian banking firms”.Asian Economic

Review. Vol. 39 No. 3, pp. 422-39.

4. Mahesh, H.P. and Rajeev, M. (2009). “Producing financial

services: an efficiency analysis of Indian commercial

banks”. Journal of Service Research.Vol. 8 No. 2 pp. 7-29.

5. Kumar, R. et al. (2009). “Global financial crisis; impact on

India’s poor”. UNDP, INDIA.

6. Singh, D. (2010).Bank Specific and Macroeconomic

Determinants of Bank Profitability.The Indian

Evidence.Paradigm.14(1)

7. Database on Indian Economy (n.d). Reserve bank of India

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AGILE METHODS TAILORING IN PROJECT DELIVERY: A SYSTEMATIC

LITERATURE REVIEW

Pankaj Tiwari*, Suresha B

**

*PhD Scholar, Department of Management Studies, Christ (Deemed to be University), Bengaluru,

Karnataka, India

**Associate Professor, Department of Management Studies, Christ (Deemed to be University), Bengaluru,

Karnataka, India

ABSTRACT

Most of the organizations has been embracing agile methods replacing traditional methods for project,

program and portfolio management because they are more flexible and tailored processes apart from the

hybrid methods can bring benefits such as business alignment, customer involvement, increase in quality and

greater productivity. The objective of this study seeks to assess, combine, and present research facets on

prevalent agile practices, approached and trends in the subject area. The research method used is a Systematic

Literature Review (SLR) which is carried out on the available studies between 2000 and 2019. The outcome of

the review indicated 69 (total of 642 papers) empirical studies and it is found that most of the methodologies

are used in software development and a very few uses agile, hybrid approach in the non-software arena.

Benefits such as team work, customer involvement, flexibility and increase in productivity, are also indicated.

Keywords: Agile project management, Hybrid methodologies, Agile method tailoring, Agile practice

INTRODUCTION

Increasingly, new challenges are appearing in the project

management arena due to the dynamic environment and

the competitiveness in a services based economy

(Chesbrough & Spohrer, 2006). The demand for

organizations to offer high quality services and product is

growing swiftly. Because of the fast paced competition,

organization realized to work with projects for the value

creation rather dealing with operations. Therefore, most

of the organizations are moving towards project driven

approaches to respond to the dynamic conditions. Earlier

organizations applied “off-the-shelf” project management

practices but remained unsuccessful and discovered that

these are not suitable for their specific work and maturity

in project management. Some of the these organizations

joined larger group who adopted agile methodologies,

which benefited them in timely project delivery, raising

the customer gratification and conception of business

value in short span of time. Though agile methodologies

need assurance along with the culture to adapt and

recognized communication to accept new encounters

(Martinez et al., 2016). The key contribution through

paper is to offer a detailed understanding and

embellishment of various project management methods

and agile practices, focus on the need to tailor the project

mangement methods based on the right fit for the

organization. In this perspective, empirical cases are

gathered, to offer tailoring efforts and practices for the

project management, related problems which appears

while acceptance and tailoring development and examine

pragmatic hybrid methods and practices.Furthermore,

practitioners can specify which agile method is helping

them to drive successful projects whereas researchers

take advantage of learning new knowledge by focusing

on the research gaps.

BACKGROUND

Now a days usage of agile approach is increasing and

over 60 percent of organizations execute agile projects by

making use of hybrid approach from agile methodologies

and project management practices. Hoda et al. (2017)

performed the analysis by focusing on various agile

software development practices and concluded that large

organizations can be benefited by using hybrid agile

methods. Various other authors supported the idea of

hybrid method and some observed inconsistencies. But

the gap is observed in the current work by Kuhrmann et

al. (2017) in the available literature for traditional

processes and agile methods. Initial agile literature,

focused on project management and detailed many

techniques with respect to traditional methods. As the

time evolved , current state of agile software

development is captured by many authors and

practitioners. It was found that larger organization face

many challenges in the agile methods adoption apart

from the other factors, such as, social, human, etc. which

influence the project success, and focus towards right

balance among group autonomy and role of the

organization. Moroever, not much of evidence is found

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on the various forms of hybrid approaches and related

factors even though some of the hybrid frameworks are

proposed in the existing literature.The description used

for the hybrid approach is a blend of traditional and agile

methodologies, which allows projects to take more agiled

approach (Conforto et al., 2010) . This can be applicable

partly or fully in any stage of the project and the project

issues can be tackled in many ways by having hybrid

approaches, to encourage productivity and flexibility at

work (Keith et al., 2013) Hence, the mixed approach is

needed, by making use of the strong points and reducing

the flaws of both agile and traditional methods (Boehm

& Turner, 2004). A hybrid model was presented by

Mukhtar et al. (2013) for the usage of Artifical

Intelligence technique in Agile Software Development

practices by concluding that the hybrid approach is not

dependent on the firm size and any other standards, and

is an outcome of usual progression of the various

development techniques applied by organizations. In

2005, Boehm and Turner investigated that agile

processes can be used along with the standard processes

without impacting other system, and enforced the use of

agile practices along with the traditional processes. Keith

et al. (2013) leveraged the data science approach to

device the hybrid methodology which is termed as

SoMSD based on the service-oriented paradigm and

modularity and service- dominant logic theory.

Papadakis and Tsironis (2018) proposed a hybrid agile

model with respect to a non-software perspective

considering added perception towards service

provisioning used in new “product” development

(Cooper & Sommer, 2016) which would result in greater

customer integration and improvements in development

productivity.

DESIGN OF THE STUDY

The research process was conducted based on the

guidelines from Kitchenham and Charters (2007). The

research questions are formulated after the widespread

“browsing” of online databases and libraries and

structured review process was designed Webster and

Watson (2002) to perform the review, followed by the

data collection and analysis, discussion of the outcomes,

and conclusion, by subsequent steps –

Review Plan

o Determining the review need

o Formulating the research questions

o Creating and analyzing the review

procedure

Performing the review through

o Search of the appropriate information

o Relevant studies

o Assessing the quality of the study

o Extracting and synthesizing the data

Reporting the review findings

RESEARCH QUESTIONS

With the objective of having detailed information linked

to agile and development approaches , suggested hybrid

models and altering efforts, the three corresponding

research questions are formulated –

Research Question 1 – What are the evolving agile

practices, development methods and techniques in

crafting tailored methods are used presently in project

delivery?

Research Question 2 - Any emerging hybrid approaches

and method tailoring work carried out presently?

Research Question 3 - Can hybrid agile tailored

approaches be pragmatic and embraced in different

perspectives?

RESEARCH METHOD

This paper is based on a systematic review which has

been adopted as the research design to suit the aim of the

paper along with the following considerations:

The search string or phrase used to collect the

studies -

“Project delivery AND Services AND Agile

AND Hybrid AND method tailoring AND Agile

practice AND Agile method tailoring”

Time duration chosen – 2000 to 2019

To have lesser bias, the search is carried through

online databases such as – The Business Source

Premier (EBSCO), IEEE, Springer, Wiley online,

ScienceDirect- Elsevier along with Google

Scholar

Overall from Google Scholar 21 papers for

inclusion were identified followed by the

assessing the relevancy and reviewing the

significant papers‟ reference list (snowballing) to

have the extra sources for the same.

Papers with no citation and are non-peer

reviewed between 2018 and before were omitted

but reviews, phd dissertations and conference

papers along with the English journal papers are

included.

The next step indicated if these papers qualifies

as per the inclusion rule. Nineteen (19) papers

were omitted based on the relevance, if peer-

reviewed and citation. Finally, eleven studies are

identified.

With the help of eleven studied, a backward

snowballing carried out to include more papers

concerning structured methodologies and

frameworks.The review covers quantitative and

qualitative work by academicians and

practitioners.

Additionally, a forward and backward

snowballing is carried out to retrieve 642 articles

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with no duplication. All papers were

encompassed and omitted on the basis of their

titles along with the abstracts and overall appears

as 121 papers. With content exclusion leaves 39

articles plus the 11 initial set of studies.

Further investigation on the quality of individual

publications is not done rather relied on the

quality screening undertaken by the respective

research databases.

Data extraction is performed by Mendeley and

synthesized by having MS-Excel form.

REVIEW FINDINGS AND DISCUSSION

The total of 69 empirical studies (29% case studies, 24%

framework proposals, 17% reviews and surveys and rest

miscellaneous) are identified and categorized in five

themes – Scaling agile methods, Tailoring approach,

Hybrid approach, Adoption approach and Agile methods.

By examining the stated research questions, the emphasis

remains on the wider depiction of the literature available

on frameworks, hybrid methods, tailoring methods and

related information on agile project managementred, can

be applied to any domain –

Research Question 1: What are the evolving agile

practices, development methods and techniques in

crafting tailored methods are used presently in project

delivery?

The following practices along with its success criteria,

restrictions, benefits, challenges, , etc. are found to be

adopted – “Scrum” emphasized in project management

scenarios where customer based requirements cannot be

created and offers easy approach to deal with to deal

with volatile difficulties. Self-organized groups called as

„sprints‟, produces quality product through proper

planning and completes by having review called as

„retrospectives‟. A list of features is maintained in a

„backlog‟ to be realized in the system, followed by the

decision by product owner to take a decision on items to

be considered during sprint (Hossain et al., 2011). Teams

are self-sufficient to execute their tasks by having „daily

standup‟ meeting, led by „scrum master‟ (i.e.

coordination incharge) who helps team members to

resolve their work related issues. Thus, Scrum model also

provides the enhanced prominence and control on

disseminated efforts. “Dynamic systems development

method” (DSDM) is a framework which splits projects

in different phases, such as “pre-project”, “project life

cycle”, and “post project”. It is grounded on the

involvement of users, project group empowerment,

stating current business requirements, frequent delivery,

incremental development (which is iterative in nature),

flexible to permit alterations, continuous testing, and

effective communication (Dyba et al., 2008). “Extreme

programming” (XP) has the focus towards development

and quality improvement and it is a lightweight

methodology. This reacts faster to the quick requirement

changes and having small release cycle and with

continued customer integration (Hummel, 2014). XP

suits well to experienced groups but challenging to work

in a multifaceted organizations. “Lean” thinking is based

on seven principles of eliminating waste, strengthening

the learning, fater delivery with late decision, empower

the team, build integrity, and see the whole (Rodriguez et

al., 2014). “Crystal” is a group of methodology features

which organizations make use to ensemble discrete

projects and fulfill business demand by considering

amount of communication required, life threatening

implications and corporate significances which make the

development process further intricate (Livermore, 2008).

“Feature Driven Development” (FDD) is a

methodology useful for bigger teams and consists of five

easy steps, to develop the model, create the features list

and prioritize the same in an implementation plan

followed by recapitulation of the development where

each iteration represents customer based deliverable.

Other methodologies can be embraced in agile

development practices (Campanelli et al., 2015).

“Rational Unified Process” is a framework which is

arose due to the challenges faced in waterfall model and

it warrants product with greater quality, by meeting the

requirements successfully as per the agreed schedule

(Tanveer, 2016). “Kanban” approach is centered around

lean principles with the focus of waste reduction and

elimination in the production process. It is one of the

flexible method with cost saving. “Hybrid approaches”

consists of multiple methods (such as agile and plan

driven, agile methods) which are viable and important for

projects comprising blend of basic features (Wang, 2011)

. For example, using agile and lean together or Scrum

and XP based on the purpose. As per Keith et al. (2013),

a successful hybrid approach should be capable of

modularizing the project related process among higher

and lower risk tasks. Kuhrmann et al. (2017) discovered

that amalgamation of diverse development methods can

be used irrespective to industry segment, such as, RUP

and Scrum can offer a hybrid solution in a broader

environment.

Research Question 2: Any emerging hybrid approaches

and method tailoring work carried out presently?

In 2011, Han and Hayata recommended a different

method for software project management and its

development, by incorporating traditional development

process (i.e plan-driven) with Scrum technique.

Customer and project team can be benefited by applying

"Waterfall-Up-Front" to identify requirements, create

documents, and combine them together as a contract.

This can reduce project risks related to delieverables,

goals and scope of the project. To have the advantage

over rework, project delays and rescheduling, agile

methods can be applied at the the time of design and

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other stages such as unit testing and implementation, by

following the iterative rational practice. This can helps in

formalizing the process of “build-transfer-operate”. Keith

et al. (2013) implemented the notions related to the

service orientation paradigm and service orientation and

modularity principles approach. It aims at the emphasize

of modularization on human interaction which is needed

for any IT project process rather aims only on technical

architecture. Thus, it is a service oriented methodology

and not the approach for the service-oriented software

creation. Also, it is not necessary that a software is being

developed. A model was recommended by Mukhtar et al.

(2013) having RUP layer, integrated scrum layer and

case based reasoning (CBR) layer by following notion of

synchronization among Agile software development and

Artifical Intelligence techniques. To assess the details in

the form of cases given by the user, the CBR technique is

carried out and this offers the appropriate solution

relating to development life cycle improvements. RUP

layer is grounded on broad-spectrum of unified process

and scrum layer is incorporated with the basic steps of

RUP. Another hybrid model was proposed by Sultana et

al. (2014), which comprises of features and practices

from DSDM, XP and Scrum to improve the team

productivity and to provide benefits at organizational

level, and most significantly to the customer too. Tanveer

(2016) recommened an approach that make use of Agile

and RUP features used for management, communication

and predictability which offers ease in tailoring artifacts,

project based roles and need. It is important to keep the

project and team in mind while applying in an

organization.

Research Question 3: Can hybrid agile tailored

approaches be pragmatic and embraced in different

perspectives?

Amongst 69 studies, the review of literature observed a

few of the studies examines the agile approaches in non-

software perspective are applied. Agile development

methodologies were examined by Cao et al. (2009) in

other contexts along with adaptation challenges, based on

the adaptive structuration theory. Besides, Levardy and

Browning (2009) exhibited a process related to product

development which is used to perform tasks associated to

project management, by giving more emphasis on project

planning and control in which every decision aims

towards maximization of the probable project value

which is built on the “Adaptive process modeling

framework” (APDP) simulation (Fuchs, 2019). Riberio et

al. (2010) explored agile methods in for small and

medium enterprises (especially in construction industry),

which determined the various facets of agile values and

principles required for a business. However, external

environment is always considered as acute factor in

business success by having agile management enablers as

collaboration, workforce, culture, stakeholder,

technology and organizational structure. Though the

number of studies found are less but it reflects that agile

practices and the thoughtprocess can be useful in various

domains.

CONCLUSION

Current review covers the present position of the hybrid

models, agile methodologies and plan-based methods and

determines the universal ideologies which form an

integrated hybrid approach. Systematic literature review

is carried out by searching and classifying the available

literature on empirical studies and insights on agile

methods, structured and hybrid methods, difficulties

faced in agile adoption and success factors. Analysis was

carried out on 69 research papers offering qualitative

outcomes. While review it is found that most of the

methodologies are used in software development and a

very few uses agile, hybrid approach in non-software

arena. Mostly, scrum agile methodology is used in

traditional process apart from the adoption methods.

Based on the Manifesto for Agile Software Development,

many organizations are gaining the momentum towards

agile thinking and greater consideration in educational

research. The review correspondingly indicates that the

customary measures (i.e. time, cost and scope) are

important nevertheless not adequate in current dynamic

setting. Newer ways of tailored methods makes

organizations for the future improvements. Other benefits

such as team work, customer involvement, flexibility and

increase in productivity, are also indicated in the current

literature (PMI, 2018).

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PROJECT CREDIT APPRAISAL PROCESS AT A LEADING POWER FINANCING

COMPANY IN INDIA: A REVIEW

Navya Mohanty*, Nisha Prakash

**

*Post Graduate Student, Christ (Deemed to be University) Bengaluru, Karnataka, India

**Assistant Professor, Christ (Deemed to be University) Bengaluru, Karnataka, India

ABSTRACT

In today’s scenario of rising non-performing assets (NPA) crisis, increasing cases of frauds and defaults in the

banking and financial sector, an efficient and effective credit evaluation mechanism is the need of the hour.

Especially in cases relating to infrastructure, which involves larger amounts of capital investment, the presence

of a proper appraisal system is a must to avoid defaults that could lead to crisis. This article relates to the

concept of the project appraisal process adopted by a financing organization which specializes in the financing

of power projects. A project appraisal process helps in assessing a particular project in terms of its viability and

whether the generated cash flows would be sufficient to service the debt. For any organization involved in the

lending business, the credit appraisal process forms an integral part of its operations. The article delves deep

into the different stages of credit appraisal process such as pre-screening, entity appraisal, project review

including projections for generation from the plant over the life of the project and calculation of tariff as per

CERC1 regulations which will impact the future cash flows. The objective of the study is to critically examine

the effectiveness of the project appraisal process followed by the power financing company. This paper will be

of interest to policymakers and decision makers in the banking sector to understand the gaps in the existing

credit appraisal process.

Keywords: credit appraisal process, credit risk appraisal, project financing, project appraisal, power financing

INTRODUCTION

Project Appraisal refers to a comprehensive and structured way of examining a project to assess the project’s

economic, technical, financial, social, and environmental viability (Sahibzada, Mahmood & Qureshi, 1985). This

process serves as a decision-making guide in the selection/rejection of projects from competing alternatives. Credit

Appraisal, which forms an integral part of the project appraisal process, is carried out by the lender to ensure that only

those borrowers who require credit and can meet the repayment obligations are provided with credit (Kithinji, 2010).

Hence, the credit appraisal process is mainly undertaken to see if the project would be able to generate enough cash

flows to service the loan amount in the stipulated time, adhering to all terms and conditions set by the loan agreement.

The credit appraisal process has become very crucial in light of the rising non-performing assets (NPA) crisis plaguing

the Indian banking/financial sector, as is evident from Figure 1. The NPA crisis is largely contributed by the large

borrowers2 which as evident from Figure 2 have been constituting more than 80% of the reported NPAs, though, the

advances to this segment of borrowers account only to about 53%. Further, infrastructure forms a significant

contributor to NPA as evident from Table 1, according to which the sector accounts for 36% of the advances of which

about 18% are NPAs. Hence infrastructure industry, which includes the power companies which raise capital for

building medium and large-scale power plants, is a priority sector for NPA.

Figure 1: Gross Non-Performing Assets as a % of total proceeds of Indian Banking Sector

1 Central Electricity Regulatory Commission (CERC) is a regulator of power sector in India.

2 The authors have used RBI’s definition of the Large borrowers as one who has aggregate fund-based and non-fund based exposure of ₹50 million and above.

2.3% 2.3% 2.5% 2.4% 2.9% 3.2% 3.8% 4.3%

7.5% 9.3%

11.6% 9.3%

0%

5%

10%

15%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

INTRODUCTION

Project Appraisal refers to a comprehensive and

structured way of examining a project to assess the

project’s economic, technical, financial, social, and

environmental viability (Sahibzada, Mahmood &

Qureshi, 1985). This process serves as a decision-making

guide in the selection/rejection of projects from

competing alternatives. Credit Appraisal, which forms an

integral part of the project appraisal process, is carried out

by the lender to ensure that only those borrowers who

require credit and can meet the repayment obligations are

provided with credit (Kithinji, 2010). Hence, the credit

appraisal process is mainly undertaken to see if the

project would be able to generate enough cash flows to

service the loan amount

in the stipulated time, adhering to all terms and

conditions set by the loan agreement. The credit

appraisal process has become very crucial in light of

the rising non-performing assets (NPA) crisis plaguing

the Indian banking/financial sector, as is evident from

Figure 1. The NPA crisis is largely contributed by the

large borrowers1 which as evident from Figure 2 have

been constituting more than 80% of the reported

NPAs, though, the advances to this segment of

borrowers account only to about 53%. Further,

infrastructure forms a significant contributor to NPA

as evident from Table 1, according to which the sector

accounts for 36% of the advances of which about 18%

are NPAs. Hence infrastructure industry, which

includes the power companies which raise capital for

building medium and large-scale power plants, is a

priority sector for NPA

Source: Financial Stability Reports, Reserve Bank of India website

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Figure 2: Share of large borrowers in Commercial Bank’s loan portfolio

Source: Financial Stability Reports, Reserve Bank of India website

Table 1: Stressed advances ratio of major industries/sub-sectors as on March 31, 2019

Industry/Sub-sector Sector’s proportion of advances % of stressed advances

Metals and Products 11.5 28.5

Mining and quarrying 1.4 26.7

Engineering 5.7 25.0

Construction 3.7 21.8

Gems and Jewellery 2.7 21.5

Automotive Industry 3.0 18.4

Infrastructure 36.4 17.8

Food processing 5.3 17.6

Paper and Products 1.0 16.9

Textiles 6.5 16.1

Cement Industry 1.8 14.2

Source: Financial Stability Report June 2019, Reserve Bank of India website

Monitoring and controlling NPAs is crucial in the Indian

context as the banking sector remains the primary source

of capital, particularly for small and medium enterprises

(SMEs) (Messai & Jouini, 2013). Higher levels of NPA

are a cause of concern for any economy as they adversely

impact the lending capabilities of the banking sector. The

banking sector mobilizes savings into investments that

ultimately benefit the overall economy. In India’s

context, the financial system is heavily reliant on the

banking sector, and hence, a resilient banking sector is

required for economic growth (Mor, Chandrasekar, &

Wahi, 2006). The infrastructure sector has been a

significant contributor to India’s NPA crisis (Sinha,

2014) as shown in Table 1. Due to the significant NPAs

emanating from the infrastructure sector, financial

institutions, including banks, are hesitant to provide

funding to the sector (Nachiket and Sehrawat, 2006).

According to RBI, “…there is enough evidence to

suggest that a substantial portion of the rise in impaired

assets in the sector is attributable to non-adherence to the

basic appraisal process by the banks” (RBIa, 2013). A

developing infrastructure sector is a pre-requisite for the

growth of other industries as well, and a lack of funding

in this sector will hamper the growth of the economy as a

whole.

According to the former governor of RBI, Dr. Raghuram

Rajan, the increasing trend of NPAs can be attributed to

various factors such as the recent bank frauds, default on

loan payments, over-optimism of lenders, and loss of

promoter and banker interest (Rajan, 2016). His

successor, Dr.Shaktikanta Das, attributed the

deterioration of asset quality and rising NPAs for banks

and other financial institutions, especially Public Sector

Banks (PSBs), can be linked to the years 2006-2011

(Das, 2019). During this period, bank lending was

growing at an average rate of over 20%. However, with

the adverse macroeconomic environment, weak credit

appraisal and post-appraisal monitoring process, project

delays, cost overruns, and the absence of a strong

bankruptcy regulating system turned the fortunes of the

lending organization. Apart from traditional banking

institutions, NBFCs are also gaining traction in terms of

providing finance to the different sections of the

economy. NBFCs are typically exposed to the non-

traditional segments of the market; therefore they are to

some extent at a higher risk of defaults than the

traditional banks (Lavanya, Maheshwari, & Prof, 2018).

58.1 58 56 53.3 53

72.8 86.4 86.5 85.4 82.2

0

50

100

Jan-15 Jan-16 Jan-17 Jan-18 Jan-19

Gross Advances Gross NPAs

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Hence, it becomes relevant to understand and study the

process of project appraisal adopted by NBFCs for the

purpose of credit and other risk management problems.

NBFCs encounter further problems such as the high cost

of funds, competition from the banking sector, non-

performing assets, etc. (Gumparthi SSn, 2010). Recent

research in the area of credit risk has classified the

determinants of NPA into three broad categories, namely

macroeconomic factors, bank-specific factors, and

borrower-specific factors (Memdani, 2018). The

macroeconomic factors in literature, covering GDP,

inflation, current account deficit, unemployment rates,

interest rates, public debt, credit growth, income per

capita, money stock, national economic downturn, real

effective exchange rate, the income tax rate, etc. are

outside the control of lending entities. However, bank

and borrower-specific factors such as internal bank

operations, default on payment by the borrower, failure

of the borrower to disclose vital information during the

loan application process, etc. can be continuously

monitored by the lending agency. Hence, to arrest the

deterioration of bank assets, it is essential to have a

robust credit appraisal process and stringent government

policies.

The Government of India has been undertaking

initiatives and making policy changes to tackle the NPA

crisis and increase the overall asset quality of the banking

and financial sector (Mukhopadhyay and Loan, 2018).

E.g. the Central Repository of Information on Large

Credits (CRILC) was set up in 2014-15 providing a

borrower database containing credit information from all

Scheduled Commercial Banks (SCBs), excluding

Regional Rural Banks (RRBs), to facilitate offsite

supervision (RBIb, 2018). In 2015, RBI initiated the

annual Asset Quality Review (AQR) where a sample of

loans is inspected to check whether asset classification

was in line with loan repayment and whether the

government has made provisions adequately (RBIc,

2016). The Ministry of Corporate Affairs (MCA)

implemented the Insolvency and Bankruptcy Code (IBC)

to streamline the attachment of assets in case insolvency

to protect the interest of creditors and investors in 2016

(MCA, 2016). Further, to bring the non-banking financial

institutions under the purview of RBI guidelines, it has

been aligning the regulatory and supervisory frameworks

for NBFCs with that of banking institutions. As a result

of the increased scrutiny and regulations, the recognition

of NPAs improved, and the asset quality of banks

improved (Kaveri, 2018). The gross non-performing

assets (GNPA) ratio, which is the ratio of NPA to total

advances, declined to 9.3 percent in March 2019 from

11.5 percent in March 2018 (RBId, 2019). Considering

the improvement in NPA with tightening regulations,

financial institutions such as banks and NBFCs could

benefit from a robust credit appraisal process to examine

the creditworthiness and repayment ability of the

borrower, before sanctioning the loan amount. The need

for a sturdy credit appraisal process is particularly

applicable for industries involving higher capital

investment, such as construction and infrastructure, to

avoid further NPA issues.

The rising amount of NPAs pose a threat to the economy

as a whole and have an adverse impact on the banking

and financial sector. But it has been found out by

researchers that an efficient and effective credit risk

management process along with a robust appraisal

process can help to control and ultimately reduce the

amount of NPAs in the economy (Ghenimi, Chaibi, &

Omri, 2017). In this context, this paper analyses the

credit appraisal process involved in financing one of the

most capital intensive sectors, namely the power sector.

The power sector is the backbone of any well-functioning

economy and is much needed to spur future growth,

making it essential to provide adequate resources to this

sector for their functioning. This article explains the

project appraisal process adopted by a leading power

financing company in India and how successful and

efficient the process is in providing the funds and

avoiding any defaults or bad loans which may turn into

NPAs. The paper is structured in five sections; the next

section covers the review of existing literature followed

by a detailed description of the data and methodology

used for analysis in section 3, section 4 covers the

findings, and finally, we look at the implications and

conclude in section 5.

LITERATURE REVIEW

Financial institutions follow credit control policies to

assess and evaluate prospective applicants to decide who

should be given credit, and for what period, repayment

arrangements and collateral requirements (Payle, 1997).

The robustness of the credit policies followed by a

financial organization minimize its losses from bad debts,

though the revenues from loans might reduce due to the

stringent controls followed (Bonin and Huang, 2001).

According to the existing literature, a sound credit policy

would help improve asset quality and establish a

standardised approach to assessment, measurement and

reporting of NPAs (Simonson and Hempel, 1999).

Project finance has been defined as a technique for

raising funds to finance large capital-intensive projects,

especially infrastructure projects, where the lenders of

funds particularly look at the cash flows generated from

the project to see whether it will be able to service their

loans and provide the promised returns to the equity

investors (Srivastava & Rajaraman, 2017). In addition to

future cash flows, project assets could also be used as

collateral in which case the collateral is limited to the

extent of project assets. The parent company usually

creates a legally independent project company, termed as

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a Special Purpose Vehicle (SPV), which is financed

through equity and a non-recourse debt to undertake the

completion of a single project having a limited life (Esty

& Sesia, 2005). To ensure that debt servicing has priority

over other payments through generated cash flows,

additional collateral from sponsors, credit enhancement

mechanisms like debt service reserve accounts, and

payment security mechanisms, etc. are used. Hence, the

structure of the SPV ensures that the credit risk in project

finance is largely looked at from the project’s perspective

and is not much dependent on the credit quality or

creditworthiness of the promoter company or sponsor.

So, it becomes important to consider all possible

liabilities, cash flows, and losses in the evaluation of

credit risk in addition to the likelihood of defaults and

other inherent risks associated with the project.

The presence of comprehensive credit evaluation and

project appraisal mechanism becomes all the more

important in case of infrastructure projects. Capital

intensive long-term projects such as power projects, toll

roads, and plazas, railway stations, airports, etc. have

unique features that make their financing challenging.

Firstly, such projects involve large amounts of money to

be invested in a single-purpose asset. Secondly, there are

usually two main phases in a long-term project, namely

construction and operation, each having different

associated risks and cash flow patterns. Construction is

usually characterized by technological and environmental

risks, while operation involves market and political risk,

among other risks. The major part of the expenses is

incurred in the initial construction phase, with revenues

starting to accrue only when the operation begins.

Finally, infrastructure projects rely on the joint efforts of

several parties like the construction company, input

supplier, host government, off-taker, etc. So, any failure

in proper coordination, conflicts, and free-riding will lead

to a high cost for the project. Also, inefficient

management of funds and diversion of the funds for other

purposes reduces the trustworthiness and ability of the

project company to pay the debt (Sorge, 2004).

The challenges faced in financing infrastructure projects

need to be kept in mind to build an effective and efficient

project appraisal process. The most widely used tool for

this purpose is the discounted cash flow (DCF) method,

which is based on the time value of money. Under DCF

the net present value (NPV) and the internal rate of return

(IRR) are commonly used (Akalu & Turner, 2002). Apart

from DCF and IRR, external rate of return, return on

investment, benefit/cost ratio, payback period method

have also been used for project evaluation. Other less

common methods include the life cycle costing method,

the growth rate of return method, profit-to-investment

ratio method, savings-to-investment ratio method, cost-

effectiveness method, project balance method,

accounting methods, etc. (Remer, 1995a). Though

different methods are available, the two most commonly

used and relied upon methods are the NPV and IRR

methods. These two methods provide the basis for almost

all other project evaluation techniques.

In the power financing corporation that we consider in

this paper, the evaluation method used for project

appraisal is NPV. However, before getting into the NPV

valuation part, assumptions about the future projections

and cost of capital need to be dealt with in detail. This

paper considers the various aspects in project appraisal,

including financial analysis. In the next section, we

describe the research methodology and the sources of

data in detail.

DATA AND RESEARCH METHODOLOGY

The article is based on the experiences gained during a

two-month internship done at the credit appraisal

department of the power financing corporation. To study

the efficiency of the credit appraisal process, we rely

primarily on the primary data collected during the

internship process. The primary data collection includes

interaction with the Projects Appraisal team to

understand the details of the project appraisal process and

also to understand the financial model used by them for

the process. The reports studied included project

appraisal report of a project previously appraised by the

company, contractual agreements, including the power

purchase agreement and EPC3 contracts, were used to

understand the basic framework of the appraisal process.

The Central Electricity Regulatory Commission (CERC)

guidelines, circulars, and notices on tariff calculations

were studied to learn about tariff calculation, to forecast

the cash flows from the project. In each project, a

financial model quantified the project appraisal process,

which helped analyze the debt repayment ability. The

decision to finance the project heavily relied on the

financial model. Hence in this article, we analyze the

financial model in detail, along with the process. After

understanding the process, the researcher studied the

literature on project financing and credit appraisal to

identify the loopholes and weaknesses in the appraisal

process of the power financing corporation in

comparison to industry standards. In the following

section, we discuss the project appraisal process

conducted by the power financing corporation in detail.

PROCESS STUDY

The appraisal process adopted by all lenders – credit

appraisal in case of traditional banking for

individuals/companies and project appraisal in case of

long-term project financing – has the similar ultimate

3 Engineering, Procurement and Construction (EPC) contracts are agreements

between the contractor and the end-user where the contractor agrees to be

responsible for all the activities including procurement, design, construction,

commissioning and hand-over of the project

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objective of assessing the bankability and

creditworthiness of the borrower. At a power financing

company, project appraisal is a crucial part of the entire

loan sanctioning and disbursement process. An overview

of the appraisal process undertaken by the company is

provided in Figure 3.

Figure 3: Process Flow chart of the appraisal process at a leading power financing

corporation

Step 1: Preliminary Screening

The first step in availing a bank loan for a project is that

the borrower has to submit an application in the format

prescribed by the power financing corporation. The

application forms are available online as well as offline.

This is followed by the preliminary screening process

which covers checking the authenticity of the

applications, their bankability, and whether the

application can be taken forward for appraisal. In this

process, the financial assistance screening committee

studies the proposal to understand the bankability of the

project by going through the submitted documents,

company profile, market data, etc. Once the committee

gives its approval a task force meeting is conducted,

which is attended by financing corporation’s officials

from projects, entity, risk, and legal departments, and the

observations of the meeting are taken into consideration

for the further appraisal process. In certain cases, to

check the authenticity and bankability of a project, site

visits are also undertaken.

Step 2: Appraisal Process

After going through the preliminary screening process,

the shortlisted project undergoes the appraisal process

which is a crucial stage in loan sanctioning and

disbursement process. The appraisal process can be

broadly divided into two, namely entity appraisal and

project appraisal. The entity appraisal involves a detailed

evaluation of the promoters of the project including an

appraisal of the promoter’s ability to contribute value

assets for the undertaken project and his/her ability to

take the project through its entire project life. The entity

appraisal process excludes the evaluation of the project

itself. Similar to other infrastructure projects, power

projects are often developed through an SPV (Special

Purpose Vehicle), which is a legal entity created to

develop the particular project. They are typically

established to isolate the parent company from the

financial risk associated with the project. The entity

appraisal process at the power financing corporation

includes the evaluation of the promoter/parent company

(identification, shareholding pattern, board of directors,

key personnel, credit ratings and financial information),

promoter’s equity contribution to the proposed project,

prior power projects undertaken by the promoter/parent

company, currently undergoing projects, and default

status. The entity appraisal team studies the current and

past ratings of the promoter/parent company issued by

various external credit rating agencies such as CARE.

Financial statement analysis is also done to evaluate the

financial standing of the promoter/parent company. The

default status check provides an understanding of the past

or current defaults the promoter/parent company might

have had with any financial institution. After a detailed

analysis of the above information, as per the entity

appraisal policy of the company, an entity grading, based

on both qualitative and quantitative factors, is assigned

for the promoter/parent company. The team also prepares

an entity appraisal report which is then forwarded to the

loans committee for consideration.

The project appraisal refers to a structured way of

assessing a particular project to understand its viability. It

involves analysing the qualitative and quantitative

aspects of the project to evaluate the profitability and

bankability of the project before recommending it for

financial assistance. The project appraisal process,

methods, and techniques vary across organizations

depending on the type of project being appraised. In the

case of the power financing corporation, the project

appraisal has two aspects, namely, quantitative and

qualitative. While the qualitative aspect takes into

consideration the project details, contracts entered into,

identification of associated risks and mitigation

measures, clearances and statutory compliances, the

quantitative aspect focuses on building a financial model

to understand the profitability, debt servicing capability,

etc. The different qualitative and quantitative aspects

considered within the project appraisal process are

summarized in Figure 4 and Figure 5, respectively.

Application for

funding of the

proposed project Preliminary

Screening Appraisal

Process

Sanctioning and

Disbursement of loan

Post-appraisal

process

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Figure 4: Qualitative aspects considered in the Project Appraisal process

Source: Primary source;

Policy documents obtained from the company

In the project specific information, details checked

include the purpose of the project, scope of the project

(land & site development, erection and commissioning of

Power Evacuation infrastructure, etc.), project location

(lease agreement, status of land acquisition, etc.), a

review of technology proposed to be used, construction

requirements (power and required, source, etc.) and its

impact on the environmental. Operations and

Maintenance (O&M) expenses are also calculated, and

this should be comparable to similar power projects

approved by the power financing corporation.

Engineering, Procurement, and Construction (EPC) is a

form of contracting arrangement where the EPC

Contractor is made responsible for all the activities from

design, procurement, construction, to commissioning and

handover of the final project to the end-user or owner.

The contractor will carry out the detailed engineering

design of the project, procure all the equipment and

materials necessary, and then construct to deliver a

functioning facility or asset to their clients. An analysis

of the EPC contract is undertaken to assess the reliability

of the contractor and his ability to complete the project

effectively and efficiently.

Similarly, a power purchase agreement (PPA) which is a

contractual agreement, generally between two parties,

determines the terms and conditions of the sale of

produced power. The two parties usually involved are the

seller, who generates electricity, and the buyer who

purchases the electricity. A PPA is a principal agreement

that gives an insight into the revenues and

creditworthiness of the power project being undertaken

and is thus important from the perspective of project

financing. The form of PPA being entered into varies

according to the needs of the concerned project and the

parties involved. The qualitative appraisal process also

analyses the exposure to risk and the mitigation measures

adopted. Table 2 summarizes the risk analysis and

mitigation framework followed by the power financing

corporation.

Table 2: Risk analysis and mitigation framework followed by the power financing corporation

Risk Risk Mitigation

Pre- Construction Phase

Land procurement Land for the project has to be identified and the acquisition status. Submission of documentary evidence for legal

and valid possession of land has to be shown.

Grant of approvals/

clearances All statutory and other clearances/ agreements required by the company should be in place.

Finalization of

Contracts/ Issue of

Purchase orders

Status of the EPC contract and status of supplies and inputs required for every phase of the project.

Construction Phase

Cost/ Time Overrun The borrower will bear any excess cost without any recourse to the project.

All the details associated with the project are looked at and evaluated as

per the company’s policies and requirements. Project Details 1

An analysis of the EPC contract is undertaken to assess the reliability of the

contractor and his ability to complete the project effectively and efficiently.

EPC Contractual

Agreements 2

All the necessary clearances for the project such as project allotment, consent to

establish/operate, Environmental and Forest Clearance, change in land use, power

evacuation and connectivity approval etc, should be in place.

Clearances 3

A detailed analysis of the Power Purchase Agreements (PPAs) provides insights on

the revenues and credit worthiness of the power project being undertaken

Marketing and Selling

Arrangements 4

The exposure of the project to various risks and the mitigation measures

adopted are scrutinized against the power financing corporation’s framework.

Risk Analysis and

Mitigation Measures 5

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Forex Risk The borrower will bear any excess cost related to foreign exchange changes.

Equity Infusion Risk Amount of upfront equity asked by the lender to mitigate infusion risk.

Incidence of

Safeguard Duty

In case safeguard duty is imposed on imports of materials, and it impacts the overall cost of the project, the project

company can approach MERC for an increase in tariff to cover the cost. Also, a corporate guarantee of the promoter

company is stipulated to safeguard the company’s interest

Post- Construction Phase

Technology Risk

It is difficult to determine the performance of technology over the project life, but its performance for similar

projects can be looked at. Also, this risk is mitigated to some extent by guarantees/ warranties provided by the

supplier.

Performance Shortfall EPC contractor guarantees the performance ratio, including module degradation. Also, corporate/ bank guarantee has

been provided to the financing in case of shortfall of revenue for the first three years.

O&M Expenses The EPC contractor is responsible for the same, so the risk is low.

Offtake Risk The PPA signed between the project company and state authority.

Power Tariff The signed PPA provides for risk associated with power tariff.

Payment Risk The PPA signed between the project company, and state authority provides for payment risk.

Force Majeure Risk This risk affects the power financing company as well, although it is borne by the project company. Insurance for the

company might help mitigate the risk to some extent.

Figure 5: Qualitative aspects considered in the Project Appraisal process

Source: Primary source; Policy documents of the power financing company

The financial modelling process is similar to any capital

budgeting decision, which will include cost estimation

based on the sources of finance, cash flow projections

dependent on the assumptions and the tariff agreements.

The sources of finance for the project are looked into to

determine how much of the project cost is to be covered

by equity and how much debt should be sanctioned by

the lender. Also, the entire sanctioned loan amount is

typically withdrawn in phases by the project company for

efficient, management of the funds. The phasing of

withdrawal, which is usually linked to the construction

stage, is thus done to keep a better track of the movement

of funds. The project cost is estimated based on the

sources of financing. Commonly in project financing,

lenders ask the promoters to bring in a certain percentage

of equity, called upfront equity to ascertain their

commitment to the project. After this equity is infused in

the project, the lender disburses the loan amount over

Quantitative Aspects

Financial Modelling

Financing Plan

Cost Estimate

IDC Modelling

Debt Servicing Reserve

Account (DSRA)

Cost

Comparison

Financial

Projections

Inputs and

Assumptions

Tariff Calculation

Working Capital

Requirement

Analysis of Financials

Ratio Analysis

Sensitivity Analysis

Debt Service Scheduling

1 2 3

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subsequent months. The loan is disbursed to the project

company by the lender before the scheduled commercial

operation date (SCOD) to aid in the pre-implementation

phase of the project. After infusing equity, upfront debt is

also disbursed, and then till SCOD, the equity and debt

are matched accordingly. The project company also

needs funds in this phase for construction purposes.

Financial institutions charge interest on the loan amount

from the date of first withdrawal by the project company.

Before SCOD, there are no cash flows or revenue, but the

project company would still need to service the interest

during the implementation phase. The interest charged

during this time is called Interest During Construction

(IDC). The debt service reserve account (DSRA) is

another key component in the financial model. The

purpose of the DSRA is to protect the lender against

unexpected risks, or interruption, in the cash flow

available to service the debt (CFADS). These funds, put

aside for contingency purposes, are usually established at

the end of a construction period, once the loan becomes

repayable. The funds from DSRA are used if the cash

flows are not able to meet the debt servicing

requirements as per the schedule. The amount in the

DSRA is a part of the overall cost of the project, along

with the IDC and financing charges. While DSRAs are

not funded as part of the initial project costs, they are

created as a priority out of the CFADS in the early

operational periods. The total cost would include the

overall cost of the project, IDC, DSRA, and other

financial charges. The rate of interest for IDC is the same

as interest on the debt. The overall project cost is

compared with the project cost of similar projects that

have been previously sanctioned to avoid cost overruns.

To check the profitability of the project, its ability to

repay the debt, and determine whether it is advisable to

sanction the proposed loan amount to them, a financial

model is built based on certain assumptions to forecast

financial statements. The projections are made to

calculate the free cash flow for the entire life of the

project, which would include operating profit after tax,

depreciation, capital expenditure, and working capital

changes. The projected cash flows will depend on the

tariff, and the CERC guidelines are taken into

consideration for tariff calculation. For example, as per

the CERC Regulations, 2017, the tariff for renewable

energy technologies shall consist of the required return

on equity, interest on loan capital and working capital,

depreciation, and O&M expenses. The rate of return on

equity is taken to be 14%, which is to be grossed up by

prevailing Minimum Alternate Tax (MAT) as on 1st April

of the previous year for the entire useful life of the

project. For calculation of the interest on the loan, the

loan amount outstanding as on April 1st of every year is

calculated out by deducting the cumulative repayment up

to March 31st of the previous year from the gross

normative loan. The Working Capital requirement in

respect of Solar power projects covers O&M expenses

for one-month receivables equivalent to two months of

energy charges for the sale of electricity and maintenance

spare at 15% of operation and maintenance expenses.

O&M expenses include repair and maintenance (R&M),

establishment including employee expenses, and

administrative and general expenses. The rate of

depreciation to be considered is 5.28% per annum for the

first 13 years and the remaining depreciation is to be

spread during the remaining life of the project. The

salvage value of the project is to be considered at 10% of

project cost, and depreciation should be allowed up to a

maximum of 90% of the capital cost of the asset.

Depreciation is calculated on a straight-line method from

the first year of commercial operation. Levellised Tariff

is the measure that has been adopted to make the tariff

structure of a project comparable to another similar

project. For levellised tariff computation, the discount

factor equivalent to post-tax Weighted Average Cost of

Capital (WACC) is considered.

Levellised Tariff = Sum of Discounted Tariff/Sum of PV

Factors of all years

Also, the tariff calculated by the project company

includes the return on equity component, but in the

calculation of the cost of generation, this component is

excluded as the lender is more concerned about

repayment of its loan amount first than the return for

investors. Tariff calculation considers working capital as

per the CERC norms and guidelines. The calculation of

the same helps in projecting the working capital

requirements of the project and set the working capital

debt limit accordingly.

After projecting the financials and calculating the cash

flows, the discount rate at which the project’s Net Present

value (NPV) becomes zero is calculated. This is the

Internal Rate of Return (IRR) i.e. the time weighted rate

of return of the project from the cash flows of the project

which is used to evaluate the profitability of the project

over its lifetime. IRR can further be classified into two

categories, namely (1) Project IRR helps determine

whether the project adds value to the long-term fund

(equity and debt) suppliers. Project IRR considers only

the project cash flows and (2) Equity IRR which helps

determine whether the project adds value to the equity

investor. The financial lenders are typically interested in

project IRR to check the profitability of the project.

After projecting the cash flows a debt servicing schedule

is built based on the payments that would be needed to be

paid during the tenor of the loan and whether the cash

flows from the project would be able to cover that

amount. Simultaneously, financial ratios are calculated to

understand the stability and the debt servicing ability of

the project. The ratios typically used by the power

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financing corporation are debt service coverage ratio

(DSCR) and Loan Life Coverage Ratio (LLCR). DSCR

is an important ratio that the power financing corporation

relies on. DSCR, a measurement of the cash flow

available to pay current debt obligations, can be

calculated as:

DSCR = Debt Servicing Sources / Total Debt Service

Requirement where,

Debt servicing sources = Net cash flows + Debt servicing

debt

If the average DSCR is greater than 1, the company has

cash flows/revenues to pay its debt obligations for the

particular financial year. At no time should the DSCR be

allowed to go below one as that would suggest that the

cash flows of the project company will be insufficient to

service the debt payments. The LLCR, on the other hand,

is to measure how easily a loan can be repaid over the

full life of the loan, rather than just in one period (such as

with DSCR). LLCR is calculated as:

LLCR = Net Present Value of CFADS over loan

life/Outstanding Debt Balance

The power financing corporation also conducts

sensitivity analysis or the what-if analysis to determine

how independent variable values such as the rate of

interest, capacity utilization factor (CUF), tariff, etc.

impact a particular dependent variable under a given set

of assumptions. There is usually a high level of

uncertainty involved in project financing, which makes

sensitivity analysis all the more important to predict the

impact in various scenarios.

After the completion of the project appraisal process,

including both entity and project appraisal, an integrated

rating is assigned to the project as per the policies and

parameters of the company. The rating, based on both

qualitative and quantitative aspects, is the parameter on

which the advisable funding percentage, relaxations and

compliances to guidelines are decided upon.

Step 3: Loan Sanctioning and Disbursement

After the appraisal process and the assignment of the

integrated rating, the entity and project appraisal report is

sent forward to the concerned authority for final approval

and disbursement.

Step 4: Post Appraisal/Project Monitoring Process

The appraisal process helps asses the credibility and

viability of the project undertaken. After the appraisal

process, sanctioning, and disbursement of the loan

amount, the lender’s function of loan monitoring plays

an important role in making sure that the disbursed

amount is being used for the ascertained purpose only

thereby keeping NPAs low. As stated earlier, the NPA of

financial institutions in India has been increasing in

recent times. Hence, it becomes all the more important

for financial institutions to have an effective and efficient

loan monitoring process in place. The process could

include both physical and financial monitoring. The

physical monitoring involves visiting the site of the

project to see if actual project-related work is taking

place and whether the power generation is actually in

progress. For physical monitoring, the power financing

corporation assigns a Lenders Engineer (LE) to audit the

project from a technical standpoint and provide progress

reports on the project. As there are multiple activities in a

project, LE has to identify the critical path and find ways

to mitigate that. To safeguard the interests of all

concerned, lenders have to ensure that the appointed LE

has performed a sufficiently detailed review, provided

the correct information, and reviewed all the construction

and project risks. Financial monitoring is undertaken to

ensure that the loan disbursed to the project company is

being used for the stated purpose only. For this purpose,

a trust and retention account (TRA) is created. TRA is to

be established, and all the cash flows of the project

would be deposited in the TRA, which would specify the

priority, timing, utilization and sequence of cash flows as

per the TRA agreement and the project company would

have to maintain adequate reserves according to the

agreement.

The next section critically examines the project appraisal

process followed by the power financing corporation.

FINDINGS

According to literature, although there are commonalities

in the appraisal process of organisations, the appraisal

process is not standardised across lending companies

(Odgaard, Kelly, & Laird, 2006). From the detailed

analysis of the project appraisal process adopted by the

power financing company, it is clear that the appraisal

process follows a standard procedure with guidelines on

the acceptability of various parameters. The appraisal

process is also in line with the theoretical frameworks

available for measuring the profitability of an investment,

e.g. NPV, IRR, Ratio analysis etc. However, Chen and

Shirmeda’s analysis of 26 articles covering the credit

appraisal policies followed by financial institutions

indicates that seven financial indicators namely return on

investment (RoI), debt ratio, current ratio, cash position,

working capital turnover, inventory turnover and

accounts receivable turnover, are considered important to

identify the possibility of negative cash flows (Chen and

Shimerda, 1981). Sun and Li developed a model for

predicting financial distress of companies covering 35

financial ratios out of which the significant determinants

were net profit growth rate, liabilities to tangible net

assets, accounts receivables turnover, liabilities to cash

flow, liabilities to equity market value, total asset

turnover, and gross profit margin (Sun and Li, 2008). The

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existing model followed by the power financing

corporation relies heavily on NPV/IRR and limits its

ratio analysis to debt service coverage ratio (DSCR) and

Loan Life Coverage Ratio (LLCR). Further, the

extensive research on financial ratios indicates their

significance in taking financial decisions and also

provide insight into how sensitive the cash flows are to

changes in assumptions/projections. In the current

methodology followed by the power financing

corporation, the decision is exposed to reliability of

assumptions for which sensitivity analysis is

recommended. Further, research also indicates that a

single standardized approach is unreliable with time e.g.

based on a study of bankrupt British firms in 1973, 1977

and 1981, Ezzamel concluded that no single model can

be used in each year studied, even when the methodology

remains the same (Ezzamel et al., 1987). The power

financing company has been following a standardized

approach to credit and project appraisal for decades

which could expose the lender to changing economic

scenarios.

Further, during the course of interaction of the

researchers with the officers in charge of undertaking the

appraisal process, it was observed that the appraisal

officer has the liberty to modify the process flow and

take decisions without strictly adhering to guidelines.

Though this happens on a case to case basis, based on

experience or reliability of the project company, it could

still expose the lender to bad debts. Also, the decision to

accept or reject a particular parameter is very subjective

depending on the case. For example, in some cases, only

a DSCR above 1.5 is accepted, but for another project

with similar aspects, a DSCR of just 1.10 is also

accepted. There are no clear guidelines regarding the

same. The current structure, though flexible, increases

the possibility of misuse as is evident from recent cases

such as PNB (Sarkar, 2018).

CONCLUSION

The c redit appraisal process is an important part of the

loan sanctioning and disbursement process wherein the

reliability and bankability of the borrower are assessed to

identify the risk of any default or bad loans. According to

the study, the power financing corporation has a sound

credit appraisal process with clearly laid out requirement

for accepting/rejecting an application. However, it was

observed that the appraisal process ignores the changing

market conditions, ignores sensitivity analysis and has

limitations on the financial ratios used for evaluation, in

comparison to those recommended by the existing

literature. The process is standardized across projects

evaluated; however, the company provides flexibility to

the appraising officer to fix eligibility cut-offs based on

the experience with or reliability of the project company.

Though this improves the revenue for the company, it

also increases the exposure to misuse. Further research

could be taken up to compare the credit appraisal process

of the power financing company to the process followed

by other credit institutions operating in the Indian

context.

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TECHNOLOGY AND FINANCIAL INCLUSION

Akhil Gupta*, Kriti Aggarwal

**, Preeti Jain

***

*Assistant Professor, PG Department of Commerce & Management, Arya College, Ludhiana, Punjab,

India

**Assistant Professor, Sri Aurobindo College of Commerce & Management, Ludhiana, Punjab, India

***Assistant Professor, Shree Atam Vallabh Jain College, Ludhiana, Punjab, India

ABSTRACT

Indian banking sector has come a long way in fostering financial inclusion which helped in

providing financial assistance to all beneficiaries. Financial inclusion is an innovative way to reach

the unreached mass, to serve the un-served population. Technology has helped the banking sector to

achieve this aim with ease. Shaking hands with Technology has facilitated Indian banking sector in

reaching out to people at large providing banking products and services at lower and affordable cost

which is essential requirement of Financial Inclusion. Indian banking sector has framed policies

and programmes by taking along technology to include rural and financially excluded population in

the process of making financially independent nation.

A welldeveloped financial system puts disadvantaged individuals into the economy's mainstream, allo

wing them to actively engage in contributing to economic growth and development as a whole.

Financial inclusion is not limited to merely opening bank accounts but also includes other financial

services such as financial advisory services, insurance services, remittance services, credit facility etc.

Technology has reduced the gap between the availability of finance and accessibility of finance to the

population. Various schemes and projects have been initiated to join the nation in the process of

financial accessibility, affordability and innovative services.

Keywords: Financial Inclusion, Financial Accessibility, Financial Assistance

INTRODUCTION

The booming trend in financial inclusion has gathered the

attention of various developing economies of the world

towards its significant impact on economy accelerating

growth in financial sector. Increased rate of saving and

investment indicates extensive use of financial services

by people in urban as well as rural areas. Various

schemes has been undertaken by present government in

bringing low income groups within the boundary of

formal banking sector. The major scheme under financial

inclusion initiated by government in 2014 was 'Pradhaan

Mantri Jan Dhan Yojna' which aimed at providing

universal access to banking facilities with at least one

basic bank account to every household, credit facility,

pension and insurance facility, financial literary about

financial products etc. Through this scheme, banking

sector has been able to reach un-served masses providing

them with abundance of facilities as compared to

previous years. By connecting access to financial

services with technology has pushed the benefits of

various schemes under financial inclusion to

beneficiaries. It has helped bringing down the gap

between demand and supply of financial services among

financially excluded population especially in rural and

remote areas.

With the wide reach of financial inclusion programmes,

present government is channelizing ways and means to

extend the benefits of social security schemes directly to

beneficiaries through Direct Benefit Transfer (DBT)

scheme. The scheme has been rolled out in 43 districts

and extended to additional 78 districts across the nation.

It shows the width of financial inclusion is gaining

importance with each day passing. In this paper, the use

and impact of technology for boosting financial inclusion

and also various schemes being undertaken by the

banking industry has been discussed.

OBJECTIVE OF STUDY

The research paper has four main objectives:

To understand the concept of financial exclusion

and its extent.

To understand the concept and significance of

financial inclusion.

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To examine the role of technology in driving

financial inclusion.

To evaluate the impact of financial literacy on

financial inclusion.

FINANCIAL EXCLUSION: CONCEPT

It is important to understand the concept of financial

exclusion before knowing the meaning of financial

inclusion. Financial exclusion is a situation where people

cannot access financial products and services in the

mainstream market.

The word was first developed by Leyshon and Thrift(199

3), who were primarily worried about restricted physical

access to banking facilities as a result of bank branches b

eing closed. In broader terms, it was used then by

Kempson and Whyley (1999), which referred it to people

who have constrained access to mainstream financial

product and services. Various concepts have been given

by different analysts till date thereafter.

Financial exclusion indicates long process of

inaccessibility which certain groups of people face in

getting access to financial services. It has been linked

with social and economic exclusion. Exclusion can be

divided into two types: Active and Passive Exclusion.

Active exclusion referred to as deliberate attempt by the

host communities or system to exclude someone from

having access to what other’s enjoying in the system.

Whereas passive exclusion works through social process

where there is no deliberate attempt to exclude someone.

As per the European commission, financial exclusion is

"A process whereby people encounter difficulties

accessing or using financial services and products in the

mainstream market that are appropriate to their needs and

enable them to lead a normal social life in the society in

which they belong."

FINANCIAL EXCLUSION: EXTENT IN INDIA

SCENARIO

51.4 percent of farmer families are financially excluded f

rom both official and informal sources, according to the

NSSO 59th Round Survey report. Only 27 percent of the

complete farmer households have access to official loan s

ources and a fifth of this community also borrowed from

non-formal sources. Among financially excluded people,

disparity level is very high in regions like central region,

eastern region and north-eastern region which account

only for 64%.

Non institutional agencies across India advanced credit to

15.5% rural households and 9.4% urban households. On

the other hand, institutional agencies advanced credit to

13.4% rural households and 9.3% urban households.

The following Chart showing the Access to Formal and Informal Sources of Credit by

Rural Households

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FINANCIAL INCLUSION: CONCEPTUAL

FRAMEWORK

Financial inclusion is described by Reserve Bank of India

as" A process of ensuring access to appropriate Financial

products and services needed by vulnerable groups such

as weaker sections and low income groups at an

affordable cost in a fair and transparent manner by

mainstream Institutional players."

The word ' Financial Inclusion ' has been brought to light

since the beginning of 2000, according to World Bank, as

a consequence of defining financial exclusion.

In India, RBI first launched the idea of financial inclusio

n in 2005 and Branchless Banking through Banking Age

nts called Bank Mitra (Business Correspondent), which b

egan in 2006.

In 2011, the government undertook the "Swabhimaan" ca

mpaign to cover more than 74,000 villages, with more th

an 2,000 inhabitants (as per census 2001).

Apart from financial products, it also includes other

financial services such as credit facility, Insurance and

pension facility, loans, financial literary etc.

The Following Table showing the Household Access to Financial Services

Financial inclusion enables to develop savings culture

among the vast majority of rural homes and thus plays an

significant role in the economic development cycle. It

also enables by defending their financial wealth and other

assets to bring low-income groups into the official

banking sector.

As per the 2011 census, the nation's banking facilities are

only available to 58.7 percent of homes. Compared to th

e past census of 2001, however, the availability of bankin

g facilities has considerably risen in rural regions due to t

he rise in banking facilities.

The following Chart showing the Banking Services availed by Rural and Urbanhouseholds

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FINANCIAL INCLUSION: SIGNIFICANCE

The benefit derived from financial infusion is mainly to

those individuals living in rural areas can get access to

modern banking services like credit facilities, saving

accounts, insurance facility, investment schemes like

fixed deposit, mutual fund etc. It encourages the people

to save their earnings and invest in schemes which will

provide them better rate of return, as a result accelerate

growth in economy.

In India, Financial inclusion has significant role in

building the nation as cashless economy as more and

more people are using digital payment system. It aimed

at providing direct benefit to its beneficiaries through

direct bank transfers, eradicating corruption and

middleman and bringing transparency in the economy.

TECHNOLOGY DRIVEN FINANCIAL

INCLUSION

On the strong feet of Technology, Financial inclusion is

standing straight. The main hindrance in the process of

financial inclusion is managing large number of bank

accounts to be opened in remote areas and to reach

unbanked population. Here comes the technology into

function, by reaching out to un-served population in

effective and efficient manner. It has now become easy to

make available financial services to masses by use of

latest technology products like e-KYC, Micro-ATMs,

IMPS, Net Banking, AePS etc. Through active

participation of various agencies like

National Payments Corporation of India (NPCI), Institute

for Banking Technology Development & Research (IDR

BT), etc. in introducing fresh technology-

based goods to successfully operate the systems.

RBI has played integral part in collaborating technology

with banking service. As a part of financial inclusion,

various measures have been undertaken under Pradhan

Mantri Jan Dhan Yojna (PMJDY) to utilize technology to

the fullest so as to achieve the desired results covered in

the scheme. Some of the major developments in the area

are:

E-KYC

Electronically know your customer introduced in 2013 as

per the permission granted by RBI as per the prevention

of money laundering rules, 2005. The purpose of

introduction of e-KYC was to prevent document forgery,

identity fraud and to facilitate paperless KYC verification

for the ease of an individual.

The valid process of KYC includes explicit consent from

the customer, UIDAI after authentication of biometric of

his or her to create a database for individual basic data

which

Includes name, age, ethnicity and picture that can also be

shared with approved customers such as banks. The e-

KYC has eased the process of opening a bank account as

all the data is present electronically through Aadhaar and

all the banks at present has adopted the process.

Mobile Banking

Mobile has revolutionised the world with inclusion of

mobile technology with banking services. It has

facilitated the use of various services even in the remote

areas as mobile technology has helped to tap the remote

corners of the countries, financial sector being one of the

major industries which the mobile technology has

revolutionised. It has enabled the people to use various

baking services just by the click of the button anywhere,

anytime. The mobile banking services are available on

smart phones by use of a mobile application available on

various platforms like android, ios etc.

Banking services such as Account Access, Funds Transfe

r, Immediate Payment Services, Enquiry Services (Balan

ce Enquiry / Mini Statement), Demat Account Services,

Cheque Book Requests, Bill Payments, etc. can be obtain

ed from anywhere in the globe via portable finance platfo

rm.

Interbank Mobile Payment System (IMPS)

Imp was introduced by NPCI in 2010. IMPS enable

instant interbank electronic fund transfer services through

Mobile banking, internet banking and ATM’s. Basically,

Mobile banking service is used by sender to transfer the

money and the receiver has to get his/her mobile number

registered with the sender’s bank and the money is

transferred to receivers account immediately.

To avail this service, the remitter must get

himself/herself registered for mobile banking services

and after that for the initiation of transaction Mobile

money identifier (MMID) and mobile banking pin is

delivered to the customer.

MMID is a 7 digit number issued to the customer. The

transaction can be initiated by just sending the SMS or

accessing the service through mobile banking app.

Micro ATM

Micro ATM’s have been used in unbanked areas and

various remote areas where there people are not able to

avail the banking services, micro ATM’s are handheld

devices which can be accessed by the individual after

biometric authentication only. Bank mitra which acts like

an agent which further helps in facilitating banking and

other banking related services especially in unbanked

areas help to provide banking services through micro

ATM’s. Micro ATM’s uses mobile connection and has

been made available to every bank mitra.

Customers are only able to access these services after the

biometric authentication through customer’s UID and are

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able to withdraw and deposit money in their respective

bank accounts.

Micro ATM supports limited financial services such as d

eposit, withdrawal, and request for transfer of funds and

balance.

MicroATM provides one of the most flexible and excitin

g ways to provide the unbanked populationwith financial

services.

Rupay Debit Cards

To enable all Indian banks and other financial institutions

to participate in electronic system Rupay debit cards

were introduced as part of financial inclusion initiative

NPCI offered this newly introduced card payment

scheme to offer domestic and open loop transaction

system, across all platforms. Rupay has been derived

from two words rupee and payment.

Rupay cards have been functioning in Indian financial

system successfully and have been making efforts to

make it acceptable across various major platforms.

Aadhaar Enabled Payment System (AePS)

AePS provides Pos (Micro ATMs) or kiosk banking thro

ugh bank correspondents of any bank. AePS provides

four basic banking transactions which are balance

enquiry, cash withdrawal, cash deposit and aadhaar to

aadhaar fund transfer by using the customers UID

(Aadhaar) authentication. The customer has to provide

IIN and Aadhaar number as an input for such transaction.

Aadhaar Payments Bridge System (APBS)

It is a centralized NPCI scheme that utilizes Aadhaar

Numbers as a unique key to all electronic benefit transfer

systems. This scheme is used by government departments

and agencies to pass advantages and subsidies to the

desired beneficiary.

Key features of Aadhaar Payment Bridge:

Ensuring reliable, scalable & efficient

mechanism to provide financial benefits to

common man.

Direct Benefit Transfer

Secure and clear settlement - No middle men

required

User needs only one bank account to obtain va

rious advantages and, in the event of a shift in

bank account information, the customer does n

ot need to provide information to the Governm

ent.

NATIONAL UNIFIED USSD PLATFORM (NUUP)

Today the reach of mobile banking has increased

manifolds with easy accessibility. Mobile phone as one

of the most common devices available in every

household just needs one click to download the

application and take advantage of financial services. But,

sad part is that only 40% users in India have a J2ME

compatible mobile handset and internet connection on

their phones which is required. Now, this problem has

been resolved with the help of the USSD platform

technology, which does not require any application to be

downloaded or the use of the Internet on phones. USSD

is not only user friendly but

easy to interact and teach people, too.It offers the center

for the transfer of funds and non-financial facilities such

as mini statement of bank account, balance enquiry and

other services.

FINANCIAL INCLUSION THROUGH FINANCIAL

LITERACY

Financial literacy is a main pillar in fostering financial

inclusion. It helps people to make right financial choices,

make smart use of money and manage their investments.

lack of awareness and without adequate planning results

in wrong choices of investment decisions.

Financial inclusion and financial literacy have two main

pillars:

Demand side: Financial literacy triggers demand side

which means making people aware of what they can

demand.

Supply side: Financial inclusion acts and reacts from

supply side that provides the financial services to people

of what they demand.

Financial Literacy has three main elements:

1. Personal financial management.

2. Information about various financial products and

services.

3. Operational knowledge.

Various Initiates has been taken by banks to encourage

financial literacy among people such as 218 centers for

financial literacy and counselling have been established

in 20 states which covers around 1000 people per centre.

In this programme, around 3,00,000 people has been

covered as of now.

SUCCESS FACTOR OF FINANCIAL INCLUSION:

TECHNOLOGY

The success of financial inclusion mainly depends upon

the accessibility and affordability of financial services to

un-served masses. Technology has shown the pathway

for effective implementation of financial service reforms.

It has not only made it easy to reach unbanked population

at low cost transaction facility but also promoted

equitable, transparency and curbing the problem of

corruption. Technology has enabled Multi channel

branchless banking through e-KYC, Micro ATMs, IMPS

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services, RuPay debit cards etc. It is the potential and

effectiveness of technology that provides doorstep

services to its users.

CONCLUSION

Financial inclusion has gained its importance in present

scenario enabling the unbanked population living in

remote areas to come within its scope. Financial

inclusion in collaboration with technology has increased

its width and length across the nation. Through this

banking sector is moving towards cashless economy

boosting transparency within the system. Information

technology has helped to reduce transaction costs,

creating a win - win situation for both banks and clients.

Financial literacy is also one of the goals of financial

inclusion. It means making people aware about financial

services and financial support available to them. It aims

at providing equal opportunities to grab financial services

to each individual irrespective of class, race and status

etc. It can be concluded that information technology has

positively impacted the financial service reforms and

enabled its reach from head to toe in recent years.

REFERENCES

1. Kumar, K. (2014), Financial inclusion progress and

strategies towards future growth in India, ELK Asia Pacific

Journals,Volume 5 Issue 3, July (2014).

2. Bhatia, S.& Dr. Singh, S. (2015), Financial Inclusion – A

Path To Sustainable Growth, International Journal Of

Science Technology & Management ,Volume No.04,

Special Issue No.01, pp 388-397.

3. Khan, Harun R.: Issues and Challenges in Financial

Inclusion: Policies, Partnerships, Process and Products,

RBI monthly bulletin, LXVI (8), 1447-1457 (August, 2012)

4. Moin, Kazi Imran and Ahmed, Qazi Baseer (2011), Use of

information technology for financial inclusion in Rural

India. Internat. J. Co m.& Bus. Manag e, 4(1): 133-137

5. Bansal, S. (2014), Perspective of Technology in Achieving

Financial Inclusion in Rural India, Procedia Economics and

Finance 11, pp 472 – 480

6. Agrawal, A. (2008), The need for financial inclusion with

an Indian perspective, Committee on Financial Inclusion,

IDBI Gilts Ltd. Retrieved from:

ftp://ftp.solutionexchange.net.in/public/mf/comm_update/re

s-15-070408-20.pdf

7. Singh, D. A. (2017). Financial Inclusion & Implementation

of Jan Dhan Yojna – Information Technology as

Enabler. International Journal of Scientific Research and

Management, 5(7), 5913-

5918. https://doi.org/10.18535/ijsrm/v5i7.16

8. Garg, S. , Dr.Agarwal, P. (2014), Financial Inclusion in

India – a Review of Initiatives and Achievements, IOSR

Journal of Business and Management (IOSR-JBM) e-ISSN:

2278-487X, p-ISSN: 2319-7668. Volume 16, Issue 6. Ver. I

, PP 52-61

9. SINGH, A. (2017), ROLE OF TECHNOLOGY IN

FINANCIAL INCLUSION, International Journal of Business

and General Management (IJBGM) ISSN(P): 2319-2267;

ISSN(E): 2319-2275 Vol. 6, Issue 5, Aug- Sep 2017; 1-6

10. https://financialservices.gov.in

11. https://www.oecd.org

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TWITTER USAGE AMONG INDIAN BUSINESSES: A WEBSITE CONTENT

ANALYSIS

Rajwinder Saini*, Mandeep Kaur

**

*Research Scholar, University School of Financial Studies, Guru Nanak Dev University, Amritsar,

Punjab, India

**Professor, University School of Financial Studies, Guru Nanak Dev University, Amritsar, Punjab, India

ABSTRACT

The advancement and popularity of new technology in the time of internet has led to the new ways

in which the companies communicate with their consumers. Twitter is the popular type of social

media which is used by companies in these days as it promotes two- way communication. This

study attempts to investigate the usage of twitter among Indian business organization by using web

content analysis method. A total of 50 business organizations were investigated and it was found

that 46 of them have their presence on twitter. Finally the extent of twitter usage was examined on

the basis of 15 content. It was found that there are a higher percentage of organizations that use

the twitter for disclosure purpose.

Keywords: Stakeholders, Twitter, Investigate.

INTRODUCTION

Social media tools like facebook as well as twitter have

emerged as new channels which are frequently used by

firms to create and capture business value (fosso et. al.

2013). Nowadays organizations are starting to use social

media as a tool to develop and maintain relationships,

with customers (Greenberg, 2010; men and Tsai, 2011).

top reward of social media tools include: their capacity

to facilitate better consumer shopping experiences, by

providing buying-experience information among

friends and relatives as well as sharing of purchase

activities with friends before taking final purchasing

decisions (zhou & fisher 2011) social networking

tools not only help in attracting consumers but also in

retaining on line consumers. (wamba et.al. 2013) and

social media helps organization to communicate with

its customers, and suppliers (burke et.al 2010). P.

candace deans states, “Social media are changing the

way companies can interact and engage with their

customers, as well as the way they can interact and

collaborate internally with their employees. Social

media initiatives have resulted in a restructuring of the

marketing function, as well as the way companies

think about their relationships with customers,

business partners and internal employees” (p. 187).

Presently, Twitter is the fastest growing Web 2.0

technology when compared to other micro-blogging

platforms (saeed & suku 2011). Besides it, Twitter

offers a number of advantages when compared to other

social media tools (e.g, Facebook). Twitter can be used

to capture an emotional roller coaster in order to

predict the ups and downs of the stock market (l.

Grossman 2010). Also, it is very easy to gain

followers on Twitter, and therefore engage with them

before even becoming their friends (K.Hines 2011).

These advantages contribute to Twitter‟s popularity.

Some firms use it so innovatively that enhance its

popularity. The innovative use of twitter is examined

by one researcher (C.Sibona & S.Walczak 2012). In

which he scrutinize recruitment using Twitter

compared to other recruitment methods. The authors

found that online recruitment using Twitter is not only

a viable hiring mean, but also an important factor in

the understand of emerging Internet-based phenomena.

Even if there is so many articles on the adoption as

well as use of social media by large organizations.

(Husin & Hanisch 2011) little has been written about

Twitter adoption and use by organization in India.

Companies use facebook, twitter, instagram and other

social networking sites to interact with their current and

potential customers. Since social media provide so many

basic advantages to companies worldwide it is

worthwhile to find out do Indian businesses use twitter to

conduct their business? Then to see for what purpose

companies are using twitter. The analysis for the study

was conducted using the content analysis approach. For

the purpose to examined nature and extent of use of

twitter by Indian companies list of 15 items was framed.

It‟s revealed that maximum no. of companies used twitter

in their business to maximum extent. The study proceeds

by reviewing the relevant literature followed by

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methodology used. Subsequently, the results and analysis

of the findings are presented and the study concludes

with future research and some limitations.

LITERATURE REVIEW

Haigh et al. (2012) examined the content of „for-profit

organizations' facebook pages and how the

communication strategies impact stakeholders'

perceptions of the organization-public relationships,

corporate social responsibility, attitude and purchase

intent. They used Content analysis to achieve these

objectives. Results revealed that for-profit organization

discuss programs/services, achievements and awards on

their facebook pages. The main communication strategies

employed on facebook is corporate ability. It is also

indicated with interactive with facebook pages bolsters

stakeholder' perceptions of the organization-public

relationship corporate social responsibility and purchase

intent. The organization used a corporate social

responsibility communication strategy had the most

success bolstering these variables.

Bhanot (2012) analyzed the use of social media for

companies in their business processes that will transform

the relationships with customers. The study was based on

secondary data. The result of the study indicates that the

increasing number of Indian companies is using social

media as an effective business tool. Most of the

companies in India are already applying it and prove to

be an effective business too. 83% of firms in India

believe that Companies success cannot be imagined

without it. 64% of the Indians agreed that social media is

the best way to connect with customers. The study

revealed that 9% of the Indian Co. devote their 20%

marketing budget for these activities. It also emphasized

that 52% of the Indian companies increasing their

customer base with the help of social media.

Bhanot (2012-A) Conducted a study to investigate how

Social media has helped Indian companies to enhance

their brand image and to reach out in a better way to their

customers. The study was based on primary data. The

Descriptive statistics and Chi square test were used to

analyze data. Results of the study indicated that social

media has helped companies to reach out to more

customers and to satisfy their needs better. Further

companies saw an enhancement in their brand awareness

and brand image by use of social media.

Parveen et al. (2013) conducted the study to analyze

whether business use social media in their daily business

and to identify which social media channels do they use.

Content analysis was used. It was depicted that

Malaysian organizations use social media but the

percentage is still relatively low. Secondly Facebook was

the most popular social media used. For the level of

usage, the disclosure, information dissemination and

interactivity and involvement was used.

Tsimonis and Dimitriadis (2013) examined the reason

for creating brand pages in social media. They used

Qualitative exploratory methology for this purpose. The

findings revealed that firms are making price

competition, announcing new product/services,

interacting with fans, providing advice and useful

information and handling customer‟s issues.

Wamba et al. (2013) examined the role of characteristics

of SME in the adoption of twitter. He consider the

organizational, managerial as well as environmental

features of SME. For this purpose, he survey 453 SME,

managers from the United States, the United Kingdom,

Australia and India. Logistic hierarchical regression was

used to test the model. It was found that firm

innovativeness, age and geographic location had a

significant impact on Twitter adoption by SME.

Schivinski and Dabrowski (2014) identified the effects

of firm-created and user-generated social media brand

communication on the matrix of consumer based brand

equity. The study examined the impact of social media

on the consumer waste brand equity across non-alcoholic

beverages, clothing and mobile networks provider

industry. Structural equation modeling technique (SEM)

and critical ratio difference was used for data analysis.

The results indicated that consumers of non-alcoholic

beverages brands are stimulated by social media brand

communication from both firms & peers. Firm- created

social media brand communication generate brand

awareness. However it was further reported that in the

clothing industry social media brand communication had

no impact on CBBE metrics. Further positive impact on

brand awareness was found for mobile network provider

industry. The results also concluded that user generated

social media brand communication influenced both brand

loyalty & perceived quality.

Malhotra and Singh (2015) examined the impact of

Facebook usage on the financial performance of banks in

India. Univariate analysis and ols regression tools of

research methodology were used. It was found that

facebook user banks are more profitable as compare to

non user of facebook. Further it revealed no significant

association between use of facebook pages and their

financial performance.

OBJECTIVES OF THE STUDY

To analyze whether Indian businesses use twitter

in their business

To identify the nature of usages of twitter by

Indian companies

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RESEARCH METHODOLOGY

This study has been confined to all the companies that

are included in BSE 500 index for the year 2018.Web

content analysis was used to gather data from Indian

business organizations website and their twitter pages.

Listed below are 15 contents of twitter page which are

used for purpose of uses.Logo of the company,

description, location of the company, web link, joined

date of the company, photo, video, and no. of tweets, no

of likes, tweets, followings, followers, re tweet, list, and

establishment year of the company Web content analysis

was used to gather data from websites of Indian business

organizations and their twitter pages. The analysis was

carried out in different steps .the first step involves

collecting the list of Indian business organizations. The

main source was BSE 500 index listed companies. After

getting the list of companies the second step was to

identify whether the organization has twitter page. For

this purpose website homepage of every organization

were searched and screened. Each of the organization‟s

homepages were screened for the twitter. The presences

of twitter was identified from their symbol or tagline

“find us on twitter”. For the purpose of analysis a table

was constructed in the Microsoft excel worksheet with

the following headings: name of the organization, Logo

of the company, description, location of the company,

web link, joined date of the company, photo, video, no.

of tweets, no of likes, tweets, no. of following, no. of

followers, re tweet, list establishment year of the

company. Data is entered in the excel sheet if the

organization has any of these contents on their twitter

page. It is coded as1 otherwise as 0.subsequently, the

frequencies and percentages were calculated to identify

the purpose of using twitter by business organizations.

FINDING AND RESULTS

After collecting the list of business organizations, their

websites were browsed to search for their social media

presence. A total of 50 business organizations‟ websites

were browsed. It was found that 46 business organization

has their twitter page.

Table 1: Averages of Numerous Social Platforms used by Different Companies

Social Media Facebook Twitter LinkedIn G-Plus

You

Tube Instagram RSS Pinterest Blog

N Valid 50 50 50 50 50 50 50 50 50

Missing 0 0 0 0 0 0 0 0 0

Mean .84 .92 .76 .26 .74 .14 .06 .06 .04

Table 2. Twitter

Variables Frequency Percent Valid Percent Cumulative Percent

Not presence

Presence

Total

4 8.0 8.0 8.0

46 92.0 92.0 100.0

50 100.0 100.0

Based on above results it can be seen that in general

(Table1), twitter was one of the most popular type of

social media used by Indian organizations. In table 2, out

of 50 organizations 46 has their presence on twitter.

After it the organizations‟ uses of twitter was examined

on the basis of 15 contents of twitter in table 3. It was

found that the frequencies of certain contents were higher

than the other. Logo of the company, joined date, no. of

following ,no of followers, no of likes, no of tweets,

retweet were commonly used by most of the

organization. Merely 98% of the organization had the

company description, photo, video on their twitter page.

About 96% of the organization had the web link and

no.of following given on twitter page and about 90% of

the organization had the location content on their twitter

page. In terms of the list and establishment year only

20% and 4% respectively of the organization had these

content on their twitter page.

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Table 3: Content of Twitter Used by Indian Organizations

Contents Frequencies Percentage

Logo 46 100

Description 45 98

Location 41 90

Web-link 44 96

Joined Date 46 100

No of Photo 45 98

No of Video 45 98

No of Tweets 46 100

No of Following 44 96

No of Followers 46 100

No of Likes 46 100

Tweet 46 100

Retweet 46 100

List 10 20

Establishment Year 2 4

CONCLUSION

Not many studies have been conducted on organizational

usage of twitter in India. Thus this study contributes to

the field of knowledge in Indian context. Despite of the

growing importance of twitter for business purpose in

India the organizational usage of twitter is still in its

growing stage. Furthermore the results shows that most

of the organizations that have a twitter page still have not

completely disclosed more information about their

organization to public as these organizations might not

realize the complete benefit from twitter usage. Its usage

helps to reach new customers interactive communication.

Therefore, efforts must be taken to increase the

awareness about the benefits of twitter. Proper staff

should be employed by the organizations to monitor the

functions of twitter and update the page in a smart and

timely manner.

This study also has certain limitations. Firstly, research

method used in the study is content analysis which

provides only overview of the twitter usage but to

investigate in detail future studies should be used other

methods to get complete insight of the twitter usage and

its impact on organizational performance. Secondly this

study does not take into consideration the size of the

organization. Future studies might investigate the

differences between the usage of twitter among large

medium and small organizations.

REFERENCES

1. Bhanot (2012),”Use of social media by companies to reach

their customers”.

2. Bruno Schivinski Dariusz Dabrowski (2015),”The impact of

brand communication on brand equity through facebook”.

3. C. Sibona and S. Walczak, "Purposive Sampling on

Twitter: A Case Study," in 45th Hawaii International

Conference on System Sciences, Maui, Hawaii USA,

2012, pp. 3510-3519.

4. F. Sandsmark. (2011). From Social Media to Social

Commerce.

5. Farzana Parveen,Noor ismawati jaafar and sulaiman

Ainin(2013),”social media usage among business:A

Website Content analysis”.

6. Georgios Tsimonis and Sergios Dimitriadis (2013),”Brand

strategies in social media”.

7. J. Gallaugher and S. Ransbotham, "Social Media and

Customer Dialog Management at Starbucks," MIS

Quarterly Executive, vol. 4, pp. 197-212, 2011.

8. L. Zhou, P. Zhang, and H.-D. Zimmerman, "Call for

Papers for a Series of Special Issues: Social Commerce,"

Electronic Commerce Research and Applications, 2011.

9. M. H. Husin and J. Hanisch, "Utilising the social media

and organisation policy (someop) framework: an

example of organisational policy development within a

public sector entity," in 19th European Conference on

Information Systems Helsinki, Finland, 2011, pp. 3096-

3107.

10. M. J. Culnan, P. J. McHugh, and J. I. Zubillaga, "How

largeU.S. companies can use twitter and other social

media to gain business value," MIS Quarterly Executive,

vol. 9, pp. 243-259, 2010.

11. Michel M. Haigh Pamela Brubaker Erin

Whiteside(2013),”Facebook:examining the information

presented and its impact on stakeholders”.

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12. N. Michaelidou, N. T. Siamagka, and G. Christodoulides,

"Usage, barriers and measurement of social media

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education: a pilot study," presented at the 28th Annual

Conference of the Australasian Society for Computers in

Learning in Tertiary Education, Hobart, Tasmania,

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level,"MIS Quarterly Executive, vol. 10, pp. 187-200,

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Gonzalez Romo and Ruth S.contreras-Espinosa

(2014),”The importance of facebook as an online social

networking tool for companies”

16. Pooja malhotra and Balwinder singh(2015),”Social

networking sites and financial performance: A case study of

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17. S. Marko, P. Nathaniel, A. Palakorn, L. Ee-Peng, and J.

Jing, "Tweets and Votes: A Study of the 2011 Singapore

General Election," in 45th Hawaii International

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18. Samuel fosso wamba, lemuria carter(2013) ,”Twitter

adoption and used by SMEs:An empirical study”.

19. Sandeep Bhanot (2012),” A study on impact of social media

on company performance”.

20. Smits,Martin and Mogo,Serben(2013),”The impact of social

media on business performance”.

21. Sulaiman Ainin,Farzana Parveen,Sedigheh Moghavvemi

and Noor Ismawati jaafar(2015),”Factors influencing the

use of social media by SMEs and its performance

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22. W. Q. Burke, D. A. Fields, and Y. B. Kafai. (2010, 2010

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analysis”.

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MEDIA PREFERENCES AMONG CONSUMERS: EMPIRICAL EVIDENCE FROM

INDIA

Roopali Batra*,

Varun Nayyar

**

*Assistant Professor, Department of Management, IKGPTU Main Campus, Kapurthala, Punjab, India

**Assistant Professor, Apeejay Institute of Management Technical Campus, Jalandhar, Punjab, India

ABSTRACT

Corporate survival and sustainability in an era of cut throat competition and changing customer needs and

patterns is indeed challenging. Nowadays, media has emerged as not only a source of customer information

and brand awareness but also its ability in shaping consumer trends and tastes and influencing consumer

purchases is believed to be profound. The prime aim of this research is to determine the types of media

preferred by Indian consumers. It further endeavors to determine which factors determine the impact of media

on Indian consumers while purchasing different packaged products (with special reference to Household,

Personal Care and Food & Beverages). To attain the aforesaid objective, multi stage area sampling was

applied and data was collected from 500 consumers in Punjab (covering 3 districts Jalandhar, Amritsar and

Ludhiana) through a well-structured questionnaire. A full and final data of 477 consumers was obtained,

which was later analyzed using statistical tools like mean rank, percentages and Factor Analysis.The findings

and inferences drawn from this research strive to stimulate an understanding of consumer media preferences

with regards to packaged products and the factors affecting the same. The results highlighted that vast majority

of Indian consumer attributed high reliability on media and ‘Print, Television and Broadcast’ media were the

most preferred type of media while purchasing packaged products by Indian consumers. Principal Component

Analysis exposed three prime factors pertaining to Media influence on purchase of packaged products namely

Motivational’, ‘Informational’ and 'Attitudinal’ impact. The research has certain specific implications for

corporate and marketers wherein it reinforces the strong media impact in acting as a catalyst for boosting

corporate sales.

Keywords: Media, Packaged Products, Reliability, Indian Consumers, Punjab, Factors.

INTRODUCTION

The ability of media in shaping consumer trends and

tastes is believed to be profound. Media not only creates

product and brand information and awareness, but also

has a deep impact on customer purchase decision.

Several empirical studies have tried to model the impact

of media on consumers‟ choices and market outcomes

(Fenton and Sinclair, 1996; Basuroy, Chatterjee, and

Ravid 2003; Chevalier and Mayzlin 2006; Eliashberg and

Shugan 1997; Hennig-Thurau, Houston, and Sridhar

2006; Holbrook and Addis 2007). Increasing awareness

and knowledge on different products and brands

accelerate the demand of that product. Media also plays a

pivotal role in the penetration of goods like packaged

products, cosmetics, mobile phones, and other FMCG

products etc. Also in India with this rising popularity and

the ease in accessing multi-media content by consumers

there is an increasing awareness for various types of

packaged products. Consumer preferences for different

media types and the impact media creates on them is an

interesting and pertinent research area keeping in view

the escalating media influence in business world.

REVIEW OF LITERATURE

Howard and Seth (1969) explained the processes and

variables which affect the individual‟s behaviour prior to

and during the purchase due to media.. According to

(Zaltman and Moorman 1989), certain paradoxes like the

attitudinal changes and preferences should be taken into

consideration while evaluating media research.

(Balderjahn ,1988) in a study on German consumer

developed a causal model of ecologically conscious

consumer behavior in which personality variables and

environment altitudes were used to predict five

ecologically responsible consumption patterns. A study

on “New Media Interactive Advertising vs. Traditional

Advertising” was conducted by Alexra, et.al. (1998), in

which an attempt was made to identify those situations

for which interactivity may be highly desirable and those

in which Traditional advertising may be more effective.

Social media offer different values to firms, such as

enhanced brand popularity (de Vries, Gensler &c

Leeflang 2012), facilitating word-of-mouth

communication (Cader et al. 1998), increasing sales

(Agnihotri et al.2012), sharing information in a business

context (Lu & Hsiao 2010) and generating social support

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for consumers (Diamantopoulos and Schlegelmilch

1996). A study on “New Media Interactive Advertising

vs. Traditional Advertising” was conducted by Kivimaa

(2008), in which an attempt was made to identify those

situations for which interactivity may be highly desirable

and those in which Traditional advertising may be more

effective. Today‟s consumers have access to many

different sources of information and experiences, which

have been facilitated by other customers‟ information and

recommendations (St-Onge, Senecal, Fredette and Nantel

2017).

RESEARCH OBJECTIVES OF THE STUDY

The research has been conducted to achieve the

following objectives:

1. To investigate the consumer reliability towards

media and their preferences for different types of

media while purchasing packaged products.

2. To explore the factors determining media impact

on purchase of packaged products.

RESEARCH METHODOLOGY

The present research is based on a survey of 500 Indian

consumers. The universe selected for this study

comprises of consumers residing in Doaba, Malwa and

Majha region of Punjab. Further, using multi stage area

sampling, ‘Jalandhar (Doaba),Amritsar (Majha) and

Ludhiana (Malwa)’ districts of these regions were

chosen. The data was collected through a well-structured

questionnaire. The questionnaire was mailed and

personally administered to these consumers using

packaged products. A full and final of 477 consumers

was obtained, which was later analyzed to obtain the

results.Descriptive analysis was conducted by taking

average mean. Further factor analysis was applied to

explore the different factors (with regard to media)

affecting purchase decision towards different packaged

products (Household, Personal Care and Food &

Beverages).

RESULTS AND DISCUSSIONS

Reliability attached to Media by Indian Consumers

The research explored the degree of reliability attached to

media by consumers while purchasing packaged goods in

their routine purchase action.

Table 1. Degree of Reliability attached to Media by Sampled Consumers

S. No Degree of Reliability Total

1 Very High 190 (39.8)

2 Moderately High 137(28.7)

3 Neither High nor Low 107 (22.4)

4 Moderately Low 28 (5.8)

5 Very Low 15 (3.1)

Total 477 (100)

Source : Author's calculation based on Primary data

Note: Figures in parentheses shows percentage w.r.t the total

A perusal of Table 1 exhibits that vast majority of 68.5

percent of sampled Indian consumers attach higher

degree (‘very high’ and ‘Moderately high’) of

‘Reliability’ to media while making purchase of

packaged products. Another 22.5 percent are neutral

(‘neither high nor low’) in their reliability quotient. It is

interesting to observe that a very less 9 percent approx of

respondents attach low reliability to media. The results

indicate the high trust placed by Indian consumers on

media. It also reinforces the need by media agency to be

socially and ethically responsible so as to live up to

Indian consumer‟s high reliability and trust.

Roles Played by Indian Consumers while Purchasing

Packaged Product

On a daily basis Consumers are being bombarded with

thousands of media advertisement of various brands and

products which influences their purchase behaviour.

Watching this scenario, our study explored the roles

preferred to be played by an individual while making

purchase decision. Although one consumer may

simultaneously exhibit different roles at same time, but

their prime role was inquired about.

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Table 2. Prime Roles Preferred by Indian Consumers while Purchasing Packaged Product

S. No Roles Categories Total

1 Initiator 26 (5.4)

2 Influencer 64 (13.4)

3 Decider 115 (24.1)

4 Buyer 136 (28.5)

5 User 136 (28.5)

Total 477 (100)

Source : Author's compilation and calculation based on primary data

Note: Figures in parentheses shows percentage w.r.t the total

Table 2 shows that an equal proportion of Indian

consumers (28.5 percent each) prefer to play the main

role of ‘Buyer and User’ while purchasing packaged

products followed, subsequently by (24.1 percent) of

consumer preferring ‘Decider ‘role. Consumers acting as

„Influencer’ and ‘Initiator’ were the less preferred roles.

Results indicate that Indian consumers like to play a

stronger and prime role of Buyer, User, Decider in

contrast to comparatively neutral roles of just „Influencer

or Initiator‟ of a purchase.

Consumer Preference of Media While Purchasing

Packaged Products

Media now days can create or destroy any brand as it has

become lifeline for every product which wants to

compete in this competitive era. The Indian consumers

were asked their media preferences while purchasing

packaged products.

Table 3. Consumer Preference of Media while Purchasing Packaged Products

S. No Media Types Rank I Rank II Rank III Rank IV Rank V Total Mean

Rank

1 Print Media 310

(64.9)

40

(8.3)

20

(4.1)

47

(9.8)

60

(12.5)

477

(100)

1.96

2 Hoardings and

Banners

17

(3.5)

79

(16.5)

51

(10.6)

163

(34.1)

147

(30.8)

477

(100)

3.6

3 Online media 97

(20.3)

76

(15.9)

75

(15.7)

119

(24.9)

110

(23.1)

477

(100) 3.14

4 Television 191

(40.0)

57

(11.9)

81

(16.9)

87

(18.2)

61

(12.7)

477

(100) 2.5

5 Broadcast Media 146

(30.6)

126

(26.4)

67

(14.1)

58

(12.1)

80

(16.7)

477

(100) 2.57

Source : Author's compilation and calculation based on primary data

Note: Figures in parentheses shows percentage w.r.t the total

A perusal of table 3 shows that the „Print Media’ with

average (mean score 1.96) is preferred by vast majority

of Indian consumer (73 percent).This is followed by

„Television‟ (mean score 2.5) and „Broadcast Media’

(mean score 2.57) which is preferred by good majority of

consumers (52 percent). It is interesting to observe that

„Online Media’ with 4th rank having (mean score 3.1) is

preferred by 36 percent of Indian consumers which can

be considered as good majority as compared to

„Hoardings and Banners’ preferred by meagre (19

percent) of consumers. „Print, Television and Broadcast’

types of media have been given higher preference by

Indian consumers which highlight the fact that awareness

and information about packaged products among Indian

consumers is gained primarily through these media.

Hence marketers should increasingly make use of these

three media types for packaged product promotion.

However it is also interesting to observe that Online

media/Social media is also gaining momentum among

Indian Consumers due to advent of socialisation.

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Factors Considered In Buying Packaged Products

with Respect to Media

To gain insightful knowledge of the factors showing

media impact on consumers while purchasing packaged

goods, Factor Analysis technique has been used.

Reliability analysis reveals that the value of cronbach

alpha is 0.881 which confirms the high reliability. Kaiser

Meyer Olkin (KMO) test shows the suitability of factor

analysis. In our study KMO measure is 0.871 which

confirms the appropriateness of Factor Analysis.

Barlett‟s test of sphericity is significant then it indicates a

probably significant relation among variables. In our

study the significance level is 0.000 which is less than

0.05 (Table 4). Hence the given variables are highly

correlated. The empirical estimates of KMO value and

Barlett‟s test indicate that factor analysis is feasible.

Table 4. Reliability Testing

Cronbach's Alpha, KMO and Bartlett's Test

Cronbach's Alpha 0.881

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. 0.871

Bartlett's Test of Sphericity Approx. Chi-Square 3446.191

Significance .000

Number of Variables 15

Source : Author's compilation and calculation based on primary data

Table 5. Total Variance

Component

Initial Eigen values Extraction Sum of Squared Loadings

Total %of Variance Cumulative % Total % of Variance Cumulative %

1 6.402 42.683 42.683 6.402 42.683 42.683

2 1.651 11.006 53.689 1.651 11.006 53.689

3 1.030 6.867 60.556 1.030 6.867 60.556

4 .861 5.741 66.297

5 .789 5.262 71.559

6 .692 4.612 76.171

7 .663 4.421 80.592

8 .596 3.974 84.566

9 .495 3.301 87.867

10 .396 2.643 90.509

11 .384 2.563 93.072

12 .317 2.114 95.187

13 .297 1.982 97.169

14 .228 1.520 98.689

15 .197 1.311 100.000

Source : Author's compilation and calculation based on primary data

To extract factors from the existing data of 15 items,

Principal Component Analysis (PCA) along with

Varimax rotation was used and the factors were

extracted. The factors having Eigen value >1 were

retained. Our study extracted three critical factors (which

cumulatively explained to 60.556 % percent of the total

variance) which were suitably named (table 5).

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Table 6. Varimax Rotated Matrix

Components

Variables 1 2 3 Communality

V1 .167 .102 -.004 .554

V 2 .286 .002 .032 .794

V 3 .767 .373 .099 .110

V 4 .114 -.080 .175 .268

V 5 -.006 .318 .245 0.357

V 6 .714 -.045 -.106 .010

V 7 .054 .015 .031 .431

V 8 .722 .019 .078 -.388

V 9 -.037 .238 .799 .112

V 10 .065 .258 .015 .299

V 11 .065 -.515 -.006 .610

V 12 .054 .719 .031 .431

V 13 .132 .019 .298 .588

V 14 .616 .138 .011 .119

V 15 .577 .058 .066 .340

Eigen Values 6.402 1.651 1.030 ---

Percent of Variation 42.683 11.006 6.867 60.556

Cumulative Variation 42.683 53.689 60.556 ___

Source : Author's compilation and calculation based on primary data

Table 6 reveals that the number of variables having

loadings above 0.5 has been considered in for factor

solution and other were discarded. Hence the variables

V3, V8, V10, V6, V14, V15 are considered in factor 1,

V12 and V11 are considered in factor 2 and variables V9

are considered in factor 3 (Table 6).

Factors Interpretation: A perusal of Table 7, depict the

three factors which are named as follows:

Motivational Impact (F1): The most substantial factor

showing media impact is „Motivational Impact‟ with

42.683% of variance explained which constitutes six

variables having higher loading values. This factor

discloses that in an era of competition, where companies

are struggling for sales and market share, media is a

motivating force that stimulates buying and influences

consumer‟s trust and brand building for packaged

products.

Informational Impact (F2): The second factor with

11.006 % variance explained is „Informational Impact‟.

It reveals the informational value of media in educating

consumers while choosing packaged products from the

market as well as creating convenience in comparing the

packaged products of same category.

Table 7. Media Influential Factors in Consumer Buying Behavior towards Packaged Products

Factor Loadings Statements included in the Factor

Motivational Impact

.767 It creates stimuli to buy the product. (V3)

.722 Purchase behavior is directly linked with celebrity endorsing that media. (V8)

.714 Media advertisement saves time in final buying behavior.(V6)

.665 It is responsible in building long term brand image of packaged products.(V10)

.616 It is necessary for the consumers and the economy as a whole. (V14)

.577 Media is always ethical in providing information of packaged products. (V15)

Informational Impact

.719 It is a source of convenience while choosing the packaged product.V12)

.515 Tool to compare different packaging of the same product category. (V11)

Attitudinal Impact

.799 Repeated advertisement brings an attitudinal change in buying behavior. (V9)

Source : Author's compilation and calculation based on primary data

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Attitudinal Impact (F3): Attitudinal Impact emerges as

the third factor which explains 6.867 % variance,

conveys that media plays an important role in shaping the

attitude of consumers towards packaged products.

CONCLUSION

The present research based on a study of 477 consumers

across different districts of Punjab brings to light certain

interesting observations about media impact on consumer

purchases of packaged products. Majority of Indian

consumers give higher weight age to ‘reliability of

media’ while making purchase of packaged products.

Further, Indian consumers primarily plays the role of

either ‘user’ or ‘buyer’ followed closely by ‘decider’

while purchasing packaged products. The research

highlights a distinctive media preference pattern as

evident from the results, where majority of Indian

consumers have exceedingly preferred ‘Print Media’

over all other types of media followed by ‘Television’

and ‘Broadcast Media’. Factor analysis identified three

factors namely ‘Motivational Impact, ‘Informational

Impact’ and ‘Attitudinal Impact’ highlighting the media

impact on purchase of packaged products among Indian

consumer.

The findings and inferences drawn from this research

strive to stimulate an understanding of consumer

preferences towards different types of media and the

impact media creates on consumers .The research has

certain specific implications for corporate and marketers

wherein it reinforces the strong media impact

(motivational, informational and attitudinal impact) in

acting as a catalyst for boosting company sales by

motivating, creating awareness and building customer

trust in a scenario where consumers attach high reliability

to it. It also emphasises on the special role of print,

Television and broadcast media on customer purchase

these being most preferred ones.

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DEMOGRAPHIC CHARACTERISTICS AND CONSUMER PURCHASE

BEHAVIOUR TOWARDS COUNTERFEIT COSMETIC BRANDS

Sonia Bajwa*, Simranjit Singh

**

*Research Scholar, IK Gujral Punjab Technical University, Kapurthala, Punjab, India

**Principal, DIPS Institute of Management and Technology, Department of Business Administration,

Jalandhar, Punjab, India

ABSTRACT

Counterfeit cosmetic products pose a serious threat to the economy and various sections of the society. Many

consumers of different ages and cultures have been affected by the use of counterfeit cosmetics. The objective of

the paper is to study the awareness level of consumers about purchase of counterfeit cosmetic brands and effect of

various demographic variables on purchase behaviour of consumers towards counterfeit cosmetic brands. The

study has been conducted in the three socio cultural regions of Punjab i.e. Malwa, Majha and Doaba. The study

found the significant effect of four significant demographic characteristics such as self education, marital status,

family size and self income on purchase behavior. The study also revealed that increase in self income and

education can contribute towards purchase of real brand cosmetics, while married ladies were less inclined to

purchase counterfeit cosmetic brands as compared to the unmarried ladies. It was also found by the study that

larger family size was responsible for purchasing counterfeit cosmetic brands.

Keywords: Counterfeit, Demographic, Cosmetics, Awareness, Behaviour, Brand

INTRODUCTION

Brands can be said to be the indispensible entity of the

life these days. We are habitual of using brands

throughout the day like computers, soaps, mobiles,

perfumes, clothes, socks & shoes, etc. To be precise, we

start our day with a brand and end with one too. In

today‟s date, we use brands rather than products. For

example we don‟t use toothpaste anymore, we use

Colgate or Pepsodent; we don‟t drink a soft drink, we

drink Coke or Pepsi; we don‟t wear clothes, we wear

Levis, Wills, Esprit, etc. Everybody wishes to have

attached with good or popular brand. That is why the

consumers use to demand for popular brands. This

demand for popular brands is huge not in India only but

world over also.

Counterfeiting is meant illegal activities attached to

violation of intellectual property rights (IPRs). The

meaning of „counterfeit‟ in dictionary is to forge

currency documents. But now a days counterfeiting

includes non-legal use of popular brands, logos and

designs for sale of local brand for a cheaper price in

comparison to the real brand. Mostly three kinds of

consumer goods are highly prone to counterfeiting i.e.

those which are very expensive, those which are in high

demand and those which can be easily copied.

“Counterfeiting” refers to the illegally reproducing the

goods secured by the intellectual property right.

Counterfeiting entails the copy of label, trade-mark or

any other important feature attached with the product, as

well as copyright infringement (House of Commons

Canada, 2007).

REVIEW OF LITERATURE

House of Commons, Canada (2007) defined counterfeit

products as the „unauthorized reproduction of goods

protected by an Intellectual Property Right‟. According

to them counterfeiting of brand and products is not

restricted to one type of product. There are four parts of

the report as the first part defines counterfeits and piracy

of copyright material. Second section provides the full

vision of counterfeiting spread among the whole world,

third part describes the resources available to the public

authorities and intellectual property owners in Canada

and forth part deals with the flaws of the Canadian

attitude to end counterfeit products. The report closes that

they should put efforts to make aware the people about

the health and safety aspects of counterfeits.

Kevin Lewis (2007) in his study discussed about the fake

and the fatal, as per him intellectual property is as

important as physical property. For many companies,

their intangible assets such as brands and trademarks

have attained more important place than their tangible

assets. Big business houses invest lots of time, energy

and resources to shield their ideas, brands and uniqueness

from counterfeiters. In spite of the attempts to defend

intellectual property rights, counterfeiting persist there in

the market. The paper focused on the global

counterfeiting problem and described its negative effects

on people and on governments.

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OECD (2008) investigated about the unauthorised and

illegal markets of counterfeit and pirated products. There

are many customers who knowingly purchase counterfeit

products from persons in disguise and this study

highlighted the significance of side lining those

consumers. The report studied in detail the main factors

which are responsible for manufacture and consumption

of counterfeit and pirated products. Trading in

counterfeiting product is an illegal business and its

network has spread world-wide. The study bring in light

that the products which are being manufactured and sold

by the counterfeiters are mostly of low standard and

many times they can be dangerous for the health too.

And it is up to the governments to make policies and

strategies so as to supress the illegal trade of counterfeit

products, governments have to strengthening the legal

system against counterfeit and pirate market.

Norashikin Nordin (2009) investigated the social and

personality factors which have influence on the attitude

of consumer while purchasing counterfeit products. The

main aim is to figure out those influential factors and also

to study the relationship between consumers‟ attitude and

their purchase intention towards counterfeit products.

The study came to know that there are some independent

factors which have impact on the consumers‟ attitude

towards counterfeit products and the factors are

perceived risk, price consciousness, novelty seeking and

normative susceptibility. It is important to understand the

consumer attitude towards buying counterfeit products

and it will be helpful for the manufacturer of genuine

products to develop some strategies to attract the

consumer to buy genuine products.

Swami, Chamorro-Premuzic and Furnham (2009) analysed about the consumer‟s last buying experience

and about their social status which have influence their

intention to buy counterfeit products. The study

discussed about the level of impact has felt on the

purchase intentions by their previous buying and their

social status. The advantage they get to buy counterfeit

product made them to purchase counterfeit product again

and restricting them to buy genuine product. Past

purchase experience motivates them to buy counterfeit

products one more time. The consumers belonging to low

social status but wishing to move to high social status

strongly influence their intention to buy counterfeit

products. There is a huge difference in the price of both

genuine and counterfeit products and this difference

encourage them to buy counterfeit product.

Seung-Lee, Boonghee Uoo (2010) investigated about

previous circumstances of consumers‟ attitude towards

counterfeits of luxury brands. Nine per cent of the total

world trade is of counterfeit good. So along with

manufacturing of counterfeit products, demand of these

products is also the main problem faced by the world

economies. They study consumer‟s wrong behaviour

towards genuine products and their liking towards

counterfeit products. They study the elements which

affect their behaviour to buy counterfeit goods. They

examine about difference between behaviour of common

people and high class people. The aim of the study was to

study the factors that influence consumer to purchase of

counterfeits of branded goods and deals with the main

previous circumstances of consumer behaviour towards

counterfeit purchase.

Kalliopi Tympanidou (2014) said that owning a luxury

branded product is a desire of every one and with that

they can show off their higher status to others. The study

is based on Greek market which is facing a counterfeit of

luxury products. The main aim of this study is to

underlining the real motive of the consumers who are

interested in purchasing of non-deceptive counterfeit

products. Consumers were asked about their need and

their intention behind their buying of counterfeit

products.

Kameswara Rao Poranki and Asif Perwej (2015) in

their study concentrated on different factors such as age,

occupation, their status related to marital have positive

impact on buying intentions of consumers towards

cosmetic products. In Soudi Arabia income does not have

any impact on the buying behaviour of consumers

towards cosmetic products. Consumers‟ beliefs, feelings

and intentions towards buying particular products are

discussed in this study.

Gokhan Tekin, Sercan Yiltay and Esra Ayaz (2016)

discussed about the psychological, social and personal

factors which have influence the perception of

consumers‟ regarding branded products. A brand is

enough to attract the customer to buy the particular

product. The main objective and aim of this study is to

analysis the role of brand image on consumers‟

behaviour and also discuss form the view point of

consumer that how a brand image influence the

consumers‟ behaviour regarding particular brand. There

should be a connection among that what we buy and why

we buy that particular product.

OBJECTIVES AND AIMS OF THE STUDY

1. To examine the awareness level of consumers

about purchase of counterfeit cosmetic brands;

and

2. To study the effect of various demographic

variables on purchase behaviour of consumers

towards counterfeit cosmetic brands.

RESEARCH METHODOLOGY

The sample of the study was based on area stratified

multi-stage random sampling technique keeping three

socio-cultural regions of the Punjab i.e. Malwa, Majha

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and Doaba as the first stage. These socio-cultural regions

provided the 1st stage of sampling unit, while at the 2

nd

stage, one city from each region was randomly selected

from the above list. The sample population included the

females of the three selected cities from the age group of

18 to 50 years. The respondents who had purchase

experience of both counterfeit as well as original brand

cosmetics became the sample of the study. As much as

150 female respondents were selected from each selected

district, thus totaling 450 female respondents for the

study. Primary data were collected on a specially

structured questionnaire through personal interview

method. The collected data were analyzed by using

suitable statistical techniques. Both simple as well as

advance statistical techniques were used. Simple tools

like frequencies, percentages, averages, etc. and advance

statistical techniques like Chi-Square Test, Analysis of

Variance (ANOVA) and Multiple Regression Analysis

were employed to analyze the data.

RESULTS AND DISCUSSION

Awareness level of consumers about counterfeit

cosmetic brand

Table 1 showed the level of awareness among

respondents about the counterfeit cosmetic products. In

Malwa region, level of awareness was highest of the

order of 52.00 percent (fully aware about the counterfeit

cosmetic brands), followed by 48.00 percent somewhat

aware and there was no respondent in Malwa region that

was not at all aware about the counterfeit cosmetic

brands.

Table 1: Level of awareness among respondents about counterfeit brands

Level of Awareness Malwa Majha Doaba

No. %age No. %age No. %age

Fully Aware 78 52.00 69 46.00 87 58.00

Somewhat Aware 72 48.00 81 54.00 63 42.00

Not Aware 0 0.00 0 0.00 0 0.00

chi-square value 4.33

In Majha region, the level of awareness was highest of

the order of 54.00 percent (somewhat `aware about the

counterfeit cosmetic brands), followed by 46.00 percent

(fully aware) and there was no respondent in Majha

region that was not at all aware about the counterfeit

cosmetic brands.

In Doaba region, the level of awareness was highest of

the order of 58.00 percent (fully aware), followed by

42.00 percent (somewhat aware) and there was no

respondent in Doaba region that was not at all aware

about the counterfeit cosmetic brands.

Chi-square value of 4.33 showed that there was no

significant difference among the respondents of all the

three regions regarding level of awareness about

counterfeit cosmetic brands.

Demographic Characteristics

Residential Location: As per the information given in

table 2, in Malwa region, the highest proportion i.e. 45.33

percent respondents belonged to central areas, followed

by 40.00 percent outer of the city and the remaining

14.67 person belonged to the societies of the city.

Similarly in Majha region, the highest proportion i.e.

43.33 percent respondents belonged to the central areas,

followed by 34.67 percent outer areas and the remaining

22.00 percent lived in societies of the city.

Table 2: Distribution of respondents according to the residential location

Residential Location Malwa Majha Doaba

No. %age No. %age No. %age

Centre of the City 68 45.33 65 43.33 56 37.33

Outer of the City 60 40.00 52 34.67 76 50.67

Societies of the City 22 14.67 33 22.00 18 12.00

chi-square value 10.96*

In Doaba region, the highest proportion i.e. 50.67 percent

respondents lived in the outer areas, followed by 37.33

percent central areas and the remaining 12.00 percent

belonged to the societies of the city. The chi-square value

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of 10.96 showed that there was significantly different

pattern of location of residence in Malwa, Majha and

Doaba region.

Age: The information contained in Table 3 showed that

the highest proportion i.e. 40.00 percent respondents

from Malwa region was from the age group of 26-35

years followed by 32.00 percent from 36-45 years of age

group and 15.33 percent was up to 25 years of age, while

the lowest proportion i.e. 4.00 percent of them was from

the age group of 55-65 years followed by 8.67 percent

from 46-55 years. The analysis further indicated that the

highest proportion i.e. 34.00 percent respondents from

Majha region was from the age group of 26-35 years

followed by 32.00 percent from 36-45 years of age group

and 19.33 percent was up to 25 years of age, while the

lowest proportion i.e. 4.67 percent of them was from the

age group of 56-65 years of age, followed by 10.00

percent was from 46-55 years of age.

Table 3: Distribution of respondents according to their age

Age (years) Malwa Majha Doaba

No. %age No. %age No. %age

Up to 25 23 15.33 29 19.33 16 10.67

26-35 60 40.00 51 34.00 89 59.33

36-45 48 32.00 48 32.00 31 20.67

46-55 13 8.67 15 10.00 12 8.00

56-65 6 4.00 7 4.67 2 1.33

Mean 35.70

35.31

33.04

SD 9.74

10.03

7.48

F-ratio 2.46

In Doaba region, the highest proportion i.e. 59.33 percent

respondents was from the age group of 26-35 years

followed by 20.67 percent from 36-45 years of age and

10.67 percent was up to 25 years of age. The lowest

proportion i.e. 1.33 percent respondent was from the age

group of 56-65 years of age followed by 8.00 percent

belonged to the age group of 46-55 years. The results

showed that the average age of respondents under study

was 35.70 years in Malwa region, 35.31 years in Majha

region and 33.04 years in Doaba region. F-ratio of 2.46

showed that the highest proportion of respondents in all

the three regions belonged to the age group of 26-35

years.

Marital Status: A perusal of Table 4 showed that

majority i.e. 90.67, 92.00 and 94.00 percent respondents

in all the three regions i.e. Malwa, Majha and Doaba

region was married and the remaining respective

proportion of 9.33, 8.00 and 6.00 percent was unmarried.

Table 4: Distribution of respondents according to their marital status

Marital Status Malwa Majha Doaba

No. %age No. %age No. %age

Married 136 90.67 138 92.00 141 94.00

Unmarried 14 9.33 12 8.00 9 6.00

chi-square value 1.18

The results showed that there was no significant

difference among respondents of all the three regions

according the marital status. The results were also

confirmed by the chi-square value of 1.18.

Self-Education: Table 5 contained the information

regarding the self education of the respondents in all the

three regions i.e. Malwa, Majha and Doaba. In Malwa

region, the highest proportion i.e. 69.33 percent

respondents studied from 10+1 to graduation, followed

by 20.00 were postgraduates and the lowest proportion

i.e. 10.67 percent studied up to 10th standard. In Majha

region the highest proportion i.e. 66.67 percent studied

from 10+1 to graduation, followed by 23.33 were

postgraduates and the lowest proportion i.e. 10.00

percent studied up to 10th standard.

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Table 5: Distribution of respondents according to the self education

Self-Education Malwa Majha Doaba

No. %age No. %age No. %age

Up to 10th 16 10.67 15 10.00 5 3.33

10+1 to Graduation 104 69.33 100 66.67 102 68.00

Post-graduation 30 20.00 35 23.33 43 28.67

chi-square value 8.63

In Doaba region the highest proportion i.e. 68.00 percent

studied from 10+1 to graduation, followed by 28.67 were

postgraduates and the lowest proportion i.e. 3.33 percent

studied up to 10th standard. The chi-square value of 8.63

showed that according to the self education, respondents

in all the three regions were statistically at par.

Highest Education in the Family: Information given in

Table 6 showed the distribution of respondents according

to the highest education in the family. As per the given

information, the highest level of education in family, in

Malwa region was post graduation (52.00%), followed

by 10+1 to graduation (48.00%). No respondent in the

family studied up to 10th standard. In Majha region, the

highest level of education in family was post graduation

(52.67%), followed by 10+1 to graduation (46.00%) and

up to 10th standard 1.33 percent.

Table 6: Distribution of respondents according to the highest education in the family

Highest Education Malwa Majha Doaba

No. %age No. %age No. %age

Up to 10th 0 0.00 2 1.33 0 0.00

10+1 to Graduation 72 48.00 69 46.00 46 30.67

Post-graduation 78 52.00 79 52.67 104 69.33

chi-square value 11.88*

The highest level of education in family in Doaba region

was post graduation (69.33%), followed by 10+1 to

graduation (30.67%). No respondent in the family

studied up to 10th standard. The results showed that level

of education was significantly higher in Doaba region as

compared to the Malwa and Majha region. The result was

also shown by the chi-square value of 11.88.

Family Structure: Table 7 contained the information

regarding the family structure of respondents in all the

three regions. Among respondents of Malwa region, the

family structure consists of the highest proportion i.e.

39.61 percent (2.04) adult male, followed by 36.89

percent (1.90) adult female and 23.50 percent (1.21)

children. In Malwa region, the highest proportion i.e.

54.56 percent was dependents whereas the remaining

45.44 percent was earner members of the family.

Dependency ratio in Malwa region came to be 1.20.

Similarly in Majha region, the family structure consists

of the highest proportion i.e. 40.78 percent (2.10) adult

male, followed by 35.53 percent (1.83) adult female and

23.69 percent (1.22) children. There are 50.68 percent

(2.61) earners in the family and the 49.32 (2.54) percent

dependents. The dependency ratio in Majha region came

to be 0.97.

Table 7: Family structure of respondents in different regions

Family Composition

Malwa Majha Doaba F-ratio

Average %age Average %age Average %age

Adult Male 2.04 39.61 2.10 40.78 1.85 33.88 3.29*

Adult Female 1.90 36.89 1.83 35.53 1.73 31.68 1.38

Children 1.21 23.50 1.22 23.69 1.88 34.43 23.23**

Family Size 5.15 100.00 5.15 100.00 5.46 100.00 1.38

No. of Earners 2.34 45.44 2.61 50.68 2.38 43.59 4.39*

No. of Dependents 2.81 54.56 2.54 49.32 3.08 56.41

Dependency Ratio 1.20

0.97

1.29

4.86**

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Family structure in Doaba region consists of highest

proportion i.e. 34.43 percent (1.88) children, followed by

33.38 percent (1.85) adult male and 31.68 percent (1.73)

percent adult female. Dependency ratio in Doaba region

came to be 1.29 as in Doaba region; there were 43.59

percent (2.38) earners and 56.41 percent (3.08)

dependents.

The analysis further showed that number of adult males

were significantly higher in Majha region as compared to

Malwa and Doaba region, whereas number of children

were significantly higher in Doaba region . The fact was

also confirmed by the f-ratio of 3.29 and 23.23

respectively. While comparing the dependency ratio, it

was found that dependency ratio was significantly higher

in Doaba region as compared to Malwa and Majha

region. This was also shown by the F-ratio of 4.86.

Type of Family: It is clear from Table 8 that in Malwa

region majority i.e. 75.33 percent of respondents‟ lives in

nuclear family and the remaining 24.67 percent lives in

joint family. Similarly in Majha and Doaba region

majority i.e. 78.00 percent and 66.00 percent respondents

lives in nuclear families, while the remaining respective

proportions of 22.00 and 34.00 percent lives in joint

families.

Table 8: Distribution of respondents according to the type of family

Type of Family Malwa Majha Doaba

No. %age No. %age No. %age

Nuclear 113 75.33 117 78.00 99 66.00

Joint 37 24.67 33 22.00 51 34.00

chi-square value 6.06*

The chi-square value of 6.06 showed that there was

significant difference among the respondents of all the

three regions as far as the type of family was concerned.

Self-Income: As per the information given in Table 9, in

Malwa region, the self income of highest proportion i.e.

40.67 percent of respondents was nil, followed by 29.33

percent Rs. 1 lac to Rs. 2 lac per annum and 16.67

percent Rs. 2 lac to Rs. 3 lac. The self income of lowest

proportion i.e. 2.67 percent of respondents was Rs. 4 lac

to Rs. 5 lac and 3.33 percent of respondents was having

self income of Rs. 3 lac to Rs. 4 lac, followed by 7.33

percent was earning up to Rs. 1 lac.

In Majha region, the self income of highest proportion

i.e. 40.00 percent of respondents was nil, followed by

28.00 percent Rs. 2 lac to Rs. 3 lac per annum and 24.00

percent Rs. 1 lac to Rs. 2 lac. The self income of lowest

proportion i.e. 1.33 percent of respondents was up to Rs.

1 lac, followed by 2.67 percent Rs. 3 lac to Rs. 4 lac and

4.00 percent was having self income of Rs. 4 lac to Rs. 5

lac.

Table 9: Distribution of respondents according to their self-income

Self-Income

(Rs./Annum)

Malwa Majha Doaba

No. %age No. %age No. %age

Nil 61 40.67 60 40.00 57 38.00

Up to 1 lac 11 7.33 2 1.33 4 2.67

l lac to 2 lac 44 29.33 36 24.00 33 22.00

2 lac to 3 lac 25 16.67 42 28.00 36 24.00

3 lac to 4 lac 5 3.33 4 2.67 9 6.00

4 lac to 5 lac 4 2.67 6 4.00 11 7.33

Mean 116880

135000

147360

SD 122372

128662

143981

F-ratio 1.35

In Doaba region, the self income of highest proportion

i.e. 38.00 percent of respondents was nil, followed by

24.00 percent Rs. 2 lac to Rs. 3 lac per annum and 22.00

percent Rs. 1 lac to Rs. 2 lac. The self income of lowest

proportion i.e. 2.67 percent of respondents was up to Rs.

1 lac, followed by 6.00 percent Rs. 3 lac to Rs. 4 lac and

7.33 percent was having self income of Rs. 4 lac to Rs. 5

lac. Average self income came to be Rs. 116880 in

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Malwa region, Rs. 135000 in Majha region and Rs.

147360 in Doaba region. The average self income of

respondents in all the three regions was in the income

slab of Rs. 1 lac to Rs. 2 lac. F-ratio of 1.35 also showed

that there was no significant difference in the self income

of respondents in all the three regions.

Family Income: Information given in Table 10 showed

the family income of respondents in all the three regions.

In Malwa region the family income of highest proportion

i.e. 44.67 percent respondents was Rs. 5.01 lac to Rs.

7.50 lac, followed by 30.67 percent Rs. 7.51 lac to Rs.

10.00 lac and 18.00 percent Rs. 10.01 lac to Rs. 12.5 lac.

The family income of lowest proportion i.e. 0.67 percent

respondents was less than Rs. 2.5 lac, followed by 2.00

percent earning more than Rs. 12.5 lac and 4.00 percent

Rs. 2.51 lac to Rs. 5.00 lac.

In Majha region the family income of highest proportion

i.e. 36.00 percent respondents was Rs. 7.51 lac to Rs.

10.00 lac, followed by 28.00 percent Rs. 5.01 lac to Rs.

7.50 lac and 18.00 percent Rs. 10.01 lac to Rs. 12.5 lac.

The family income of lowest proportion i.e. 1.33 percent

respondents was less than Rs. 2.5 lac, followed by 6.67

percent earning more than Rs. 12.5 lac and 10.00 percent

Rs. 2.51 lac to Rs. 5.00 lac.

Table 10: Distribution of respondents according to the family income

Family Income (Rs./Annum) Malwa Majha Doaba

No. %age No. %age No. %age

<2.5 lac 1 0.67 2 1.33 2 1.33

2.51 lac to 5.0 lac 6 4.00 15 10.00 15 10.00

5.0 l lac to 7.5 lac 67 44.67 42 28.00 49 32.67

7.51 lac to 10.0 lac 46 30.66 54 36.00 60 40.00

10.01 lac to 12.5 lac 27 18.00 27 18.00 21 14.00

>12.5 lac 3 2.00 10 6.67 3 2.00

Mean 802872

839370

797650

SD 233910

272229

228280

F-ratio 0.86

In Doaba region the family income of highest proportion

i.e. 40.00 percent respondents was Rs. 7.51 lac to Rs.

10.00 lac, followed by 32.67 percent Rs. 5.01 lac to Rs.

7.50 lac and 14.00 percent Rs. 10.01 lac to Rs. 12.5 lac.

The family income of lowest proportion i.e. 1.33 percent

respondents was less than Rs. 2.5 lac, followed by 2.00

percent earning more than Rs. 12.5 lac and 10.00 percent

Rs. 2.51 lac to Rs. 5.00 lac.

Average family income of respondents came to be Rs.

802872 in Malwa region, Rs. 839370 in Majha region

and Rs. 797650 in Doaba region. The average family

income of respondents in all the three regions was in the

income slab of Rs. 7.51lac to Rs. 10.00 lac. F-ratio of

0.86 also showed that there was no significant difference

in the family income of respondents in all the three

regions.

PURCHASE BEHAVIOR TOWARDS

COUNTERFEIT COSMETIC BRANDS

A perusal of Table 11 showed the comparative analysis

of various statements related to purchase behavior

towards counterfeit cosmetic products. The respondents

were asked to register their level of agreement on

different statements. They responded in terms of

„strongly agree‟, „agree‟, „neutral‟, „disagree‟ and

„strongly disagree‟. These attributes were assigned

weights in the respective order of 5, 4, 3, 2 and 1. The

weighted mean scores for each dimension were

calculated and compared with the help of F-ratio among

respondents of Majha, Malwa and Doaba regions. The

results so obtained have been discussed on the following

pages.

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Statements related to the consumer purchase behaviour

S. No. Statement

1 I always consider quality of the counterfeit cosmetic product before making purchase

2 Price of the counterfeit cosmetic product is an important criterion for making purchase

3 Attractive packaging is necessary for making purchase

4 The ingredients of the counterfeit cosmetic product play decisive role for making purchase

5 Size and shape of counterfeit cosmetic product always influence my purchase

6 I use to make repeated purchase if the counterfeit cosmetic product is satisfactory

7 Advertisement of the real brand affect my purchase decisions for counterfeit brand

8 I shall switch over to other counterfeit cosmetic brand if the present counterfeit brand fails to satisfy

9 Reputation of the store instigates me to purchase the counterfeit cosmetic brands

10 Location of the store instigates me to purchase the counterfeit cosmetic brands

11 Behavior of the store employees and manager attract to buy counterfeit cosmetic brands

12 Offers/discounts/incentive on counterfeit brands pull the customers to buy these brands

13 Exchange/return option is a good parameter of buying counterfeit cosmetic brands

14 Shelf display attract the customers to buy counterfeit cosmetic brands

15 Style and color are decisive factors for purchase of counterfeit cosmetic brands

The analysis showed that in Malwa region the extent of

agreement was highest of the order of 4.10 (agree) on „I

use to make repeated purchases if the counterfeit

cosmetic product is satisfactory‟, followed by 3.81

(agree) on „behavior of the store employee and manager

attract to buy counterfeit cosmetic brands‟, 3.58 (agree)

on „shelf display attract the customer to buy counterfeit

cosmetic brands‟, 3.49 (neutral) on „the ingredients of a

counterfeit cosmetic product play decisive role for

making purchase‟, 3.42 (neutral) on „I always consider

quality of the counterfeit cosmetic product before making

purchase‟, 3.37 (neutral) on „reputation of a store

instigates me to purchase counterfeit cosmetic brands‟

and 3.29 (neutral) on „price of the counterfeit cosmetic

product is an important criterion for making purchase‟.

The lowest extent of agreement was 1.84 (disagree) on

„attractive packaging is necessary for making purchases‟,

followed by 2.16 (disagree) on „size and shape of

counterfeit cosmetic product always influence my

purchase‟, 2.53 (neutral) on „location of the store

instigate me to purchase counterfeit cosmetic brands‟,

2.60 (neutral) on both „offers/discounts/incentives on

counterfeit brands pull the customers to buy these

brands‟ and „exchange/return option is a good parameter

to buy counterfeit cosmetic brands‟, 2.95 (neutral) on „I

shall switch over to other counterfeit cosmetic brands if

the present counterfeit fails to satisfy‟, 3.17 (neutral) on

„style and color are the decisive factors for purchase of

counterfeit brands‟ and 3.18 (neutral) on „advertisement

of the real brand affect my purchase decision for

counterfeit brand‟.

In Majha region the extent of agreement was highest of

the order of 4.04 (agree) on „I use to make repeated

purchases if the counterfeit cosmetic product is

satisfactory‟, followed by 3.80 (agree) on „style and color

are decisive factors for purchase of counterfeit cosmetic

brands‟, 3.72 (agree) on both „the ingredients of the

counterfeit cosmetic product play decisive role for

making purchase‟ and „behavior of the store employees

and manager attract to buy counterfeit cosmetic brands‟,

3.62 (agree) on „reputation of the store instigates me to

purchase the counterfeit cosmetic brands‟, 3.60 (agree)

on „I always consider quality of the counterfeit cosmetic

product before making purchase‟, 3.51 (agree) on „shelf

display attract the customers to buy counterfeit cosmetic

brands and 3.22 (neutral) on location of the store

instigates me to purchase the counterfeit cosmetic

brands‟.

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Table 11: Extent of agreement on statements related to purchase behavior towards counterfeit cosmetic

products

Statement No. Malwa Majha Doaba

F-ratio Mean Overall Mean Overall Mean Overall

1 3.42 N 3.60 A 4.46 A 47.01**

2 3.29 N 3.10 N 3.98 A 30.44**

3 1.84 DA 2.41 DA 3.23 N 80.86**

4 3.49 N 3.72 A 4.16 A 19.72**

5 2.16 DA 2.30 DA 2.96 N 38.10**

6 4.10 A 4.04 A 4.55 SA 0.90

7 3.18 N 3.03 N 3.40 N 4.09*

8 2.95 N 2.68 N 3.71 A 62.71**

9 3.37 N 3.62 A 3.48 N 2.88

10 2.53 N 3.22 N 3.00 N 16.77**

11 3.81 A 3.72 A 3.40 N 9.88**

12 2.60 N 2.57 N 3.04 N 11.03**

13 2.60 N 2.52 N 2.76 N 3.23*

14 3.58 A 3.51 A 3.25 N 7.01**

15 3.17 N 3.80 A 3.41 N 25.38**

Overall 46.09 N 47.81 N 52.79 A 67.49**

The lowest extent of agreement was 2.30 (disagree) on

„size and shape of counterfeit cosmetic product always

influence my purchase‟, followed by 2.41 (disagree) on

„attractive packaging is necessary for making purchase‟,

2.52 (neutral) on „exchange/return option is a good

parameter of buying counterfeit cosmetic brands‟, 2.57

(neutral) on „offers/discounts/incentive on counterfeit

brands pull the customers to buy these brands‟, 2.68

(neutral) on „I shall switch over to other counterfeit

cosmetic brand if the present counterfeit brand fails to

satisfy‟, 3.03 (neutral) on „advertisement of the real

brand affect my purchase decisions for counterfeit brand‟

and 3.10 (neutral) on „price of the counterfeit cosmetic

product is an important criterion for making purchase‟.

In Doaba region, the extent of agreement was highest of

the order of 4.55 (strongly agree) on „I use to make

repeated purchase if the counterfeit cosmetic product is

satisfactory‟, followed by 4.46 (agree) on „I always

consider quality of the counterfeit cosmetic product

before making purchase‟, 4.16 (agree) on „the ingredients

of the counterfeit cosmetic product play decisive role for

making purchase‟, 3.98 (agree) on „price of the

counterfeit cosmetic product is an important criterion for

making purchase‟, 3.71 (agree) on „I shall switch over to

other counterfeit cosmetic brand if the present counterfeit

brand fails to satisfy‟, 3.48 (neutral) on „reputation of the

store instigates me to purchase the counterfeit cosmetic

brands, 3.40 (neutral) on both „advertisement of the real

brand affect my purchase decisions for counterfeit brand‟

and „behavior of the store employees and manager attract

to buy counterfeit cosmetic brands‟. The lowest extent of

agreement was 2.76 (neutral) on „exchange/return option

is a good parameter of buying counterfeit cosmetic

brands‟, followed by 2.96 (neutral) on „size and shape of

counterfeit cosmetic product always influence my

purchase‟, 3.00 (neutral) on „location of the store

instigates me to purchase the counterfeit cosmetic

brands‟, 3.04 (neutral) on „offers/discounts/incentive on

counterfeit brands pull the customers to buy these

brands‟, 3.23 (neutral) on „attractive packaging is

necessary for making purchase‟ and 3.25 (neutral) on

„shelf display attract the customers to buy counterfeit

cosmetic brands‟.

Significantly higher extent of agreement was found in

Doaba region on the statements „I always consider

quality of the counterfeit cosmetic product before making

purchase‟, „price of the counterfeit cosmetic product is an

important criterion for making purchase‟, „attractive

packaging is necessary for making purchase‟, „the

ingredients of the counterfeit cosmetic product play

decisive role for making purchase‟, „size and shape of

counterfeit cosmetic product always influence my

purchase‟, „advertisement of the real brand affect my

purchase decisions for counterfeit brand‟, „I shall switch

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over to other counterfeit cosmetic brand if the present

counterfeit brand fails to satisfy‟,

„offers/discounts/incentive on counterfeit brands pull the

customers to buy these brands‟, „exchange/return option

is a good parameter of buying counterfeit cosmetic

brands‟. The fact was also confirmed by the F-ratio of

47.01, 30.44, 80.86, 19.72, 38.10, 4.09, 62.71, 11.03 and

3.23 respectively. The extent of agreement was

significantly higher in Majha region on the statements

„location of the store instigates me to purchase the

counterfeit cosmetic brands‟, and „style and color are

decisive factors for purchase of counterfeit cosmetic

brands‟ as confirmed by the F-ratio of 16.77 and 25.38

respectively. In Malwa region the extent of agreement

was significantly higher on the statements „behavior of

the store employees and manager attract to buy

counterfeit cosmetic brands‟ and „shelf display attract the

customers to buy counterfeit cosmetic brands‟. The

respective F-ratios of 9.88 and 7.01 confirmed the same.

On all other dimension, all the three regions were

statistically at par.

Effect of demographic characteristics on purchase

behavior

The influence of demographic characteristics on purchase

behaviour of consumers towards counterfeit cosmetic

brands was identified through the application of multiple

backward step regression model. The results of the

regression analysis have been presented in Table 12.

Table 12: Effect of various demographic variables on consumer purchase behaviour: Regression Analysis

Variable 1st run model Final run model

β t-value Β t-value

Constant 4.285 2.39* 4.311 2.22*

Residential Location -0.123 1.28

Age -0.021 1.47

Education-Self -0.058 2.48* -0.630 4.31**

Education –Highest -0.031 1.23

Marital Status 0.168 1.89 0.174 2.21*

Family Size 0.480 2.48* 0.497 2.58**

No. of Earners -0.089 1.50

Self-Income 0.183 2.12* -0.201 2.34*

Family Income 0.001 0.08

Family Type 0.670 0.73

R-square 0.214

0.194

F-ratio 11.95**

26.78**

In the 1st run model, the magnitude of multiple

determination came to be 0.214, which reduced to 0.194

in the final run model. This showed that 19.4 percent of

the variation in purchase behaviour towards counterfeit

cosmetic brands was explained by the 4 significant

demographic characteristics such as self-education,

marital status, family size and self income. Therefore the

remaining 6 non-significant characteristics could

contribute only 2.0 percent.

The regression coefficient of self-education was

significantly negative (-0.630), which indicated that an

increase in self education would lead to a decline in

purchase behaviour towards counterfeit cosmetic brands.

This means that ladies with higher education are less

inclined towards purchase of counter cosmetic brands as

compared to those with lower level of education.

Similarly, the regression coefficient of self income

worked to be significantly negative (-0.201). This

revealed that an increase in self-income would lead to a

decline the purchase behaviour towards counterfeit

cosmetic brands. This showed that ladies with higher

self-income were found to be less inclined towards

purchasing counterfeit cosmetic brands as compared to

those with lower level of self-income.

On the other hand, the regression coefficient of marital

status (0.174) and family size (0.497) were significantly

positive. This indicated that married ladies are less

inclined towards purchasing counterfeit cosmetic brands

as compared to unmarried or single ladies. It also had

been conveyed by the analysis that an increase in family

size would lead to an increase in purchase behaviour

towards counterfeit cosmetic brands.

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CONCLUSION

Overall, it can be said that ladies having higher self-

education and self-income are less inclined towards

purchasing counterfeit cosmetic brands as compared to

those having lower level of self-education and self-

income. This revealed that education and income can

play a significantly positive role to purchase behaviour

towards real cosmetic brands. This highlights that

purchase bevaiour towards counterfeit cosmetic brands

can be reduced by raising the level of ladies education as

well as income. It can also be achieved by controlling the

family size.

REFERENCES

1. Gokhan Tekin, Sercan Yiltay and Esra Ayaz (2016). The

effect of brand image on consumer behaviour: a case study

of louiss vuitton-moet hennessy, International Journal of

Academic Value Studies, Vol. 2, Issue 2, Pp. 1-24

2. House of Commons, Canada (2007). Counterfeit goods in

Canada – A threat to public safety, Report of Standing

Committee on Public Safety and National Security, May

2007, 39th Parliament, 1st Session.

3. Kalliopi Tympanidou (2014). The allure of fake luxury

goods, M. Sc. Thesis at International Hellenic University,

Pp. 1-43

4. Kameswara Rao Poranki and Asif Perwej (2015). The

buying attitude of consumers of cosmetic products in Saudi

Arabia, Research Journal of Social Science and

Management, Vol. 04, Issue 08, Pp. 138-147

5. Kevin Lewis (2007). The fake and the fatal: the

consequences of counterfeits, The Park Palace Economist,

Vol. 17, Issue 47

6. Norashikin Nordin (2009). A study on consumers‟ attitude

towards counterfeit products in Malaysia, Thesis of Master

of Business Administrationsubmitted to University of

Malaya pp. 1-98

7. OECD (2008). Magnitude and effects of counterfeiting and

piracy necessitate strong action, The Economic Impact of

Counterfeiting and Piracy ISBN 978-92-64-04551-4 ©

OECD 2008

8. Swami, V., Chamorro-Premuzic and Furnham, A.

(2009). Faking it: personality and individual predictors of

willingness to buy counterfeit goods, Journal of Socio-

Economics, Vol. 38, Pp. 820-825

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GENDER INCLUSION AT WORKPLACE: A THRUST TO TALENT

MANAGEMENT

Moon Moon Lahiri*, Deepti Sharma

**

*Research Scholar, TAPMI, Manipal University Jaipur, Rajasthan, India

**Assistant Professor, TAPMI, Manipal University Jaipur, Rajasthan, India

ABSTRACT

Organization’s growth generate from diversity of views and decisions. Gender is one of the significant factors

of diversity. Gender inclusion helps the organization in managing talent in a better way by utilizing untapped

female potential thus overcoming the challenge of talent shortages in the organization. Despite the enormous

benefits of gender inclusion in hiring, retaining and in mapping career & succession planning strategies of

talent management practices at workplace, organizations have made only little progress in this direction.

Women still encounter challenges when it comes to deploy their untapped potential and advancing their career

to managerial and leadership positions at workplace. Out of several challenges and issues for the female at

their workplace which hinders their growth of career advancement, the present study is a conceptual analysis

based on existing literature aims at pointing out the ‘Gender Inclusion’ issues in Talent Management.

Keywords: Gender Inclusion, Talent Management, Gender Diversity, Untapped Female Potential, Women

Career advancement.

INTRODUCTION

In today’s corporate world, managing diversity at

workplace has become one of the most significant

paradigms for growth and development of any

organization. Companies which accept multiculturalism,

and a balance between men and women working

professional faces less of group think, than those work

with a homogeneous work group. The term ‘Groupthink’

was originally derived by Irving Janis. He defined this

term as,

“a mode of thinking that people engage in when

they are deeply involved in a cohesive in-groups, when

the member’s strivings for unanimity override their

motivation to realistically appraise alternative course of

actions” (Janis, 1991).

Members in groupthink share a strong feeling of unity

and harmony and at any cost, they want to preserve their

workplace relationship within the group (Janis, 1991).

Groupthink not only results in loosing creative decision

making but organizational decisions may also liable to

suffer from cognitive biases. In accordance with race,

education, tenure, professional background, etc. gender

diversity may help in overcoming groupthink and thus it

has been referred as an antidote to groupthink

(Kamalnath, 2017). Diversity management plays a vital

role in making most of company’s diverse workforce by

reducing employee turnover and absenteeism. Also, by

managing a diverse manpower, organizational marketing

efforts increase by attracting skillful and talented

employees. Diversity management improves

organizational decision making by enhancing creativity

and innovation among workgroups (Ng & Burke, 2005).

Gender is certainly one important factor of diversity and

talent management practices. To compete with global

economy, organizations can not prevail with

homogeneous workforces. Talent need to be managed

with equilibrium of male and female contribution at

organizational decision making roles. Moreover, Gender

inclusion helps the organization in managing talent in a

better way by utilizing untapped female potential thus

overcoming the challenge of talent shortages in the

organization. Out of several challenges and issues for the

female at their workplace which hinders their growth of

career advancement, the present study is a conceptual

analysis based on exiting literature aims at pointing out

the ‘Gender Inclusion’ issues in Talent Management.

The facts presented in this paper have been investigated

through secondary research by citing and reviewing

various research papers related to Gender Inclusion and

Talent Management.

MANAGING TALENT: A Critical Component Part

of Organization

It was the inception of the term ‘war for talent’ by

McKinsey Quarterly 1998 for ‘Talent Management’,

which published that it is highly difficult to deal with

organizational changes, adaptability and decision

making skill in critical situations by key positions of

management. Also, it is difficult for organizations to

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attract, develop and retain skilled employees at

leadership and decision making positions (Chambers et

all., 1998). Talent Management as a key component of

strategic Human Resource Management, although

deliberate a push to employee performance and

leadership succession, but the lack of clarity in

employee task and job talent management may not come

up with expected goals (King K.A. 2015). KPMG’s HR

Centre of Excellence Survey 2014 report clearly points

out the criticality of skill shortages; this report addresses

a ‘new war for talent’ unlike the previous one

(Michaels, Handfield-jones, & Axelrod, 2014). KPMG

believed that the prime reasons of talent shortages are:

(i) Generational – lack of management

response to the young skilled employees

who are less interested in traditional job

roles, paucity of skilled and talented

workforce for new and emerging job

roles.

(ii) Holistic strategies – organization’s

indifference towards talent needs of the

employees may put business at risk.

However, literatures states that in many countries,

managing talent scarcity is greatly influenced by gender

specific differences where female talent, although being

the half of world’s total population; has been deprived of

their career advancement (Bohmer and Schinnenburg,

2015; Festing et al., 2014). Gender differences at

workplace have been one of the significant reasons for

talent shortages where skilled and talented female

employees are not fully utilized for enhancing

organizational effectiveness (Tatli, A., et al., 2012).

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TALENT MANAGEMENT & GENDER

INCLUSION: A CONCERN

In order to create a sustainable talent management

strategy, organizations must develop a more gender

inclusive environment at workplace. Participation and

rendition of female employees shall lead an organization

towards a more successful and productive workplace

(Bilimoria et al., 2008). A research from the Grant

Thornton International Ltd. (2015) on ‘women in

business’ states that out of 1050 companies in India, the

UK and US, just 127 of them employ women as

executives. This report analyzed that in UK and US,

moving to gender diversified boards on S&P 500 and

FTSE 350 may hike GDP by around 3 percent. (Grant

Thornton, 2015). Along with research and reports,

organizations have also started acknowledging the fact

that percentage of women at senior positions and on

boards is the need of the hour. Despite of all, ‘gender

inclusion’ at all levels of the organization is critical

(Mckinsey Quarterly, 2017 ). Survey stated that many of

the working female who made it to senior positions has a

strong desire to lead, some of them think that they get

proper support for it and few of them feel that they are in

the queue for moving ahead (McKinsey & Company,

2011). In the purview of organizational talent

management practices, challenges to female

professionals seeking leadership positions are due to lack

of mentoring, male dominated workplace environment

and existence of old boy networks. (Ariss, A. A., et al.,

2013; Festing et al., 2014). Catalyst Reports indicate

three major findings; first, organization with diverse

managerial personnel and on their board secure better

financial outcome. Secondly, organization with more

female executives on board as directors, outshine those

who have less female strength on corporate boards. And

thirdly, report also states that there is a positive

association between the numbers of women on boards as

directors in past and number of women at managerial

positions in future (Catalyst, 2013). A report on gender

diversity and talent management in companies in

Switzerland presents the fact on women being

underrepresented in top positions of companies due to the

clear preference of promoting male over female talent by

the organization (Walters R., 2016). The issue of

underrepresentation of female talent at higher-level

positions can be managed by controlling the bulk of male

managers who are authorized to decide the recruitment

and selection criteria, compensation management and the

performance appraisal system in the organization (Ng &

Burke, 2005). Talent management would said to be

inclusive when it will serve all the talented and skilled

employees of an organization in its most impartial and

optimum mode, regardless of their gender (Festing et al.,

2015). Recruiting, developing and cultivating female

talent on board and help them in realizing their full

potential; supporting female talent in organization by

creating a merit based culture for promotions will build a

more diverse work group leading towards high caliber

leaders in organizations overcoming the challenge of

talent shortages (Boatman, Wellins, & Neal, 2011).

CONCLUSION

Considering gender inclusion in the span of managing

talent is a matter of immediate concern. Despite the

enormous benefits of gender inclusion in hiring, retaining

and in mapping career & succession planning strategies

of talent management practices at workplace,

organizations have made only little progress in this

direction. Women still encounter challenges when it

comes to deploy their untapped potential and advancing

their career to managerial and leadership positions at

workplace. Whereas study shows that companies with

more share of female in their top management teams

outperformed those companies with no female posted in

their senior levels. Talent Management may only be

considered as gender inclusive when talented and skilled

workforce will be managed effectively, efficiently and

treated equally regardless of their sex and/or gender in

the organization.

REFERENCES

1. Bilimoria, D., Joy, S., & Liang, X. (2008). Breaking barriers

and creating inclusiveness: Lessons of organizational

transformation to advance women faculty in academic

science and engineering. Human Resource

Management, 47(3), 423-441.

2. Boatman J., Wellins R., & Neal S. (20111). Global

Leadership Forecast 2011. Women Work: The Business

Benefits of Closing the Gender Gap. Pittsburg. DDI.

3. Cannon, J. A., & McGee, R. (2011). Talent Management

and Succession Planning. London: Chartered Institute of

Personnel and Development,151 The Broadway, London.

4. Center, C. I. (2012). India: The Case for Gender Diversity.

Mumbai, India: Catalyst India WRC, 1-8.

5. Center, C. I. (2013).Why Diversity Matters: Catalyst, 1-15

6. Chambers, E. G., Foulon, M., Handfield-Jones, H., Hankin,

S. M., & Michaels III, E. G. (1998). The war for talent. The

McKinsey Quarterly, 1(3), 44-58.

7. Deery, M., & Jago, L. (2015). Revisiting talent

management, work-life balance and retention

strategies. International Journal of Contemporary

Hospitality Management, 27(3), 453-472.

8. Festing, M., Kornau, A., & Schäfer, L. (2015). Think

talent–think male? A comparative case study analysis of

gender inclusion in talent management practices in the

German media industry. The International Journal of

Human Resource Management, 26(6), 707-732.

9. Foster, C. L. (2015). Managing the flow of talent through

organizations–a boundary-less model. Development and

learning in organizations: an international journal, 29(1),

15-19

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10. Janis, I. (1991). Groupthink, In E. Griffin (ED.) A First

Look at Communication Theory, 235-246.

11. King K. A. (2015), Global talent management Introducing a

strategic framework and multiple actors model, Journal of

Global Mobility, 3(3), 273 - 288

12. Kamalnath, A. (2017). Gender Diversity as the Antidote to

Groupthink on Corporate Boards. Deakin L. Rev., 22, 85

13. Michaels, E., Handfield-Jones, H., & Axelrod, B. (2014).

War for talent-time to change direction. KPMG

International, 1-2.

14. Ng, E. S., & Burke, R. J. (2005). Person–organization fit

and the war for talent: does diversity management make a

difference? The International Journal of Human Resource

Management, 16(7), 1195-1210

15. Quarterly, M. K. (2011). Changing Companies’ mind about

women. USA: Mc Kinsey & Company.

16. Quarterly, M. K. (2017). How to Accelerate Gender

Diversity On Boards. USA: Mc Kinsey & Company.

17. Tatli, A., Vassilopoulou, J., & Ozbilgin, M. (2012). An

unrequited affinity between talent shortages and untapped

female potential: The relevance of gender quotas for talent

management in high growth potential economies of the Asia

Pacific region. International Business Review, 22(3), 539-

553.

18. Thornton, G. (2015). Women in business: the path to

leadership. Grant Thornton International Business Report.

19. Thornton, G. (2016). Women in Business: Turning promise

into practice. London: Grant Thornton International

Business Report.

20. Walters R. Whitepaper (2016). Gender Diversity and Talent

Management in Companies in Switzerland. Zurich, Robert

Walters Switzerland AG.

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DEFENCE INDUSTRIAL BASE AND CORPORATE PROFESSIONAL

RESPONSIBILITY

LT Gen Anil Kapoor*, VSM, DGIS

*Research Scholar, School of Management Studies, Punjabi University, Patiala, Punjab, India

ABSTRACT

The paper examines how two different objective oriented tasks performed by two different organisationscan

be amalgamated to obtain an end goal that satisfies National Security. The study is a review regarding India,

which is emerging as a major producer of defence technologies and equipment. It evaluates the dire need for

a major drive for capacity building through a consortium approach.Corporate sector which plays anessential

role in the economic development of a country whose potential is leveraged through assistance in various

Social Welfare Schemes through Corporate Social Responsibility. The potential of the Technological

advancements in the corporate sector that can be harnessed to meet National Security requirements is known

as Corporate Professional Responsibility. The establishment of bases/ corridors to tap into talent and

resources of Corporate Sectors and Government Enterprises/ Industries to further defence manufacturing is

called Defence Industrial Base.

Keywords: National Security, Corporate Social Responsibility, Defence, Corporate Professional

Responsibility, Defence Industrial Base.

INTRODUCTION

1. Global competitiveness for any Nation has

always been a challenge. Speaking of defence

technologies and equipment, the competition gets

tremendously accentuated due to the common

competing space between developed and

developing countries. The need to remain

competitive in emerging global market is

contingent upon three critical requirements -

quality of product, cost effectiveness and

timeliness. For India, which is emerging as a

major producer of defence technologies and

equipment there is a dire need for a major drive

for capacity building through a consortium

approach. This calls for availability of

unhindered budgets to meet the multifaceted

challenges of developing infrastructure,

capacities, capabilities, skills and a continuous

development-operationcycle for timely delivery

and regularupgradation.

2. Corporate sector plays a vital role in the

economic development of a country, to the extent

that the economy of the Nation depends largely

on the achievement of corporate sector. ‘Make

in India’1 initiative of the Government, coupled

with opening up of Defence Industrial

Corridors2, has provided a new dimension and

paved the way for both indigenisation and self-

1'Make In India' http://www.makeinindia.com/policy/new-initiatives 2NirmalaSitharaman inaugurates Defence Industrial Corridor, Economic Times, 20 Jan 2019

reliance. In the last two decades, the private

sector in Defence has expanded immensely with

even the DPSUs outsourcing more than 30% and

Ordnance Factories (OFs) outsourcing

approximately 60% of their production

inventories. Defence Industriesare doing direct

investment in large and hi-tech projects through

theprovisions of Defence Procurement

Procedures (DPP)to include strategic

partnerships, make projects and innovative

developments in defence technology.

3. World over, the Defence system have been an

enabler for innovations and a driving force for

new technologies.Indian Defence Forces have

been closely associated with the growth of Indian

Defence Industry by way of incubating and

developing technologies and equipment, with

dual military and civil usage. However, with the

fast paced flow in technology development,

coupled with the need to fast track product

development to beat obsolescence, support by the

industry is no longer a choice, it is a compulsion.

While Research and Development has its own

time cycles from inception of an idea to delivery

of the technology demonstrator, it is also at a

huge cost. Consortium approach to developing

technologies and technology demonstrators is the

best way forward. The moot question is „How

can we fund development of technology

demonstrators for defence in an optimum

manner?‟ There is a case for considering

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Corporate Professional Responsibility as a sequel

to Corporate Social Responsibility.

4. Corporate Social Responsibility (CSR)3 is a

concept wherein it is the responsibility of the

corporatesector to contribute towards social,

economic and environmental development,

which creates positive impact on society, at

large. The concept revolves around the fact that

the corporations need to focus beyond earning

profits and participate in social development. As

part of Corporate Social Responsibility, the

companies are required to annually spend at least

two percent of their total net profit for social,

economic and environmental causes such as

public health, education, sanitation, livelihoods,

water conservation and natural resource

management.In the same run, the industry also

owes „Corporate Professional Responsibility‟

towards the National security and technology

development thereby promoting two way

cooperation for self-reliance in Defence

Technologies.

THE CHALLENGE

„Fighting Indian Wars with Indian Equipment‟, is the

mission enunciated by the COAS. This calls for a cogent

technology strategy for „womb to tomb‟ management of

defence technologies and equipment4. The conventional

threats with inimical Northern & Western Borders, the

ever increasing air space threats and the blue water

Navyvision, the cyber and space dimensions call for

along term perspective of not only indigenous technology

infusion but also a sustainable financial strategy.

Corporate social responsibility has been a near success

story in funding a large number of social upliftment

programs, as a Nation building venture. National

security against both internal and external threats calls

for enhancing the social securities of the populace. The

challenge, therefore, lies in meeting the National security

objectives through induction and propagation of

indigenous defence technologies and equipment through

a Corporate Professional Responsibilityprograms as a

subset or concurrent with Corporate Social

Responsibility.The opportunity for corporateDefence

Industry by 2023 is expected to beof $95.1 billion5. The

aim of this article is to progress and implement an idea

ofCorporate Professional Responsibility for defence

technology and equipment development with

anindigenous flavour.

3Para 4, Pg 2, Handbook on CSR, PWC Ltd 4What ails India's Defence Industrial Complex? By Lt Gen PC Katoch (Retd) 5Making 'Make In India' a Reality in Defence and Aerospace Sector by Lt Gen BalliPawar (Retd)

CONCEPT

Growth of Industry in India. There has been an ever

increasing pace of industrialisation coupled with

continuous drive for infrastructuredevelopment and

creation of conducive climate for industrial collaboration.

This is likely to result in rapid growth and expansion of

the corporate business organisations in India. The

corporate sector in India today is not only making

significant contributions to the country's economic

development but also is playing a pioneering role in

business diplomacy by extending their outreach

abroad.India is at the cusp of becoming one of the largest

growth engines in the world. Even though there is an

overall growth of Indian Industries, at the core of this

growth is the development made by Indian ICT Industry

which grewwith annual growth rates of nearly 30% in the

last decade. Apart from the Multinationals like IBM and

HP, Information TechnologyIndustry alsohas seen

growth of successful Indian companies like TCS,

Infosys, Wipro, HCL, to name a few,not only in India but

also internationally. In recent past, Information

Technology Companies like TCS and Infosys have

emerged to be one of the fastest growing Information

Technology service brands in the world with annual

growth rates of upto 14%. Infosys has grown

incrementally from being a United States of America $

250 worth company in 1981 to whooping United States

of America $ 11.12 billion in 2018. The young

entrepreneurs and startups have added to the exponential

growth of the Information TechnologyIndustry.

Industry – Defence Forces Synergy Defence Industrial

Bases/Corridors have been a huge enabler in all Nations

producing defence equipment due to the huge potential in

their development for self-reliance, both for internal and

external security threats, proliferation through exports

and dual civil-military usage6. It is well known fact that

all best practices of management being embraced by the

Corporate World emanated from Defence. Internet and

its world wide web visage has been developed by

DARPA7 in United Nations of America, based on a need

to network defence forces with operating bases beyond

the frontiers of United Nations of America, popularly

called as Out of Area Contingency.

The conventional and hybrid security threat faced by

security forces in India make it a ready test bed for

defence technologies, and the defence industry the world

over evinces huge interest in collaborating strategic

partnerships with India. Defence Forces, therefore, need

to support the Industry by helping them understand

specific user requirements which until now were not

6Pg 3, Indian Defence Industrial Base; Lessons from Developed Industry by

KavitaNagpal 7Pg 7, Defence Industrial Base – Sector Specific Plan,US Homeland Security

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clearly available in open domain. There is also a need to

cater for military facilities and trained manpower for

trials and testing of technologies under field conditions.

Today‟s Defence Industry being in nascent stages of

development needs hand holding and support from the

defence forces to be able to establish itself not only in

India, but across the world. The cost of seeding,

incubating, prototyping and

productioningdefencetechnologies, in general, and

defenceequipment in particular, is multifaceted

technology and a huge cost centre. It is for this reason of

system engineering complexities that a consortium

comprising big industrial houses, MSME, SMEs

andstartups have to form a defence industrial base for

effectiveness and productivity8.Add to this the life cycle

upgrades, maintenance and sustenance which will need

skills and spares.This relationship of the defence forces

with the Industry calls for an arrangement on the lines

ofor a subset of‘Corporate Social Responsibility’

promulgated by the Ministry of Corporate Affairs, as

„Corporate Professional Responsibility‟. The moot

question of course is, “ShouldNation building and

security apparatus form part ofCorporate Social

Responsibility?”. To my mind the answer is yes.

Corporate Social Responsibility (CSR).The concept of

„Corporate Social Responsibilityrevolves around the

‘Give and Take’ kind of relationship of the Industry with

its environment and society.As mentioned by United

Nations Industrial Development Organisation (UNIDO),

Corporate Social Responsibility is generally understood

as being the way through which a company achieves a

balance of social, economic and environmental

imperatives, while at the same time addressing the

expectations of shareholders and stakeholders. It is a

corporate initiative to assess and take responsible for the

company's effects on the environment and impact on

social welfare.Corporate Social Responsibility is not a

new concept in India. However, the Ministry of

Corporate Affairs, Government of India has notified the

Section 135 of the Companies Act, 2013 along with

Companies (Corporate Social Responsibility Policy)

Rules2014 and other notifications related thereto which

makes it mandatory (with effect from1stApril, 2014).As

part of Corporate Social Responsibility the companies

are required to annually spend at least two percent of

their total net profit for social, economic and

environmental cause such as public health, education,

sanitation, livelihoods, water conservation, gender

equality, vocational skill development and natural

resource management. There is a case to include defence

technology development, as a stated policy for Corporate

Social Responsibility.

8Para 2, Reimagining India's Defence Industrial Base by Ashish Puntambekar

CORPORATE PROFESSIONAL

RESPONSIBILITY (CPR)

The Idea.Indian Defence Forces have been partnering

the growth of Indian Defence Industry by means of

providing support and technical assistance for

understanding the user requirements and conduct of

trials.On the lines of Corporate Social Responsibility

concept, it is proposed to introduce concept of „Corporate

Professional Responsibility‟ for Indian Defence Industry.

The Defence Procurement Procedure allows, under the

Make-II, provisions to include Strategic Partnership and

Suo Moto proposals by industry/individuals, to leverage

industry participation in design development, trials and

production of defence equipment. As part of Corporate

Social Responsibility, Defence Industries would be

mandated to spend atleastonepercent of their Corporate

Social Responsibility Kitty for undertaking Research and

Development Projects, development of Proof of

Concepts (PoC), Skill Development within Defence

Forces or any other associated activity aimed at

technological advancement (dual use technologies

included) and capability development of Defence Forces.

Contours of Corporate Professional Responsibility.

Contours recommended for implementation of Corporate

Professional Responsibility, are as given below.

However, these are only suggested options, which

maybeappropriately be re-visited.

a) Applicability. The provisions of the Corporate

Professional Responsibility shall be applicable to

companies involved in or seeking to invest in

Defenceproduction having Net worth of INR 500

Croreor more;or turnover of INR 1000 Croreor

more; or Net Profit of INR 5 Croreor more

during any financial year.

b) Minimum Expenditure on Corporate

Professional Responsibility. All applicable

companies shall spend, in every financial year, at

least one percent on Corporate Professional

Responsibility, of the average net profits of the

company made during the three immediately

preceding financial years, in pursuance of its

Corporate Professional Responsibility (as a

subset of Corporate Social Responsibility which

is 2 %).

c) Corporate Professional Responsibility

Activities. In order to achieve the desired growth

in Defence sector, synergy of Industry and

Defence Forces is inevitable. Corporate

Professional Responsibility will further

strengthen this Industry - Defence association as

both the stakeholders will be the benefactors of

the overall growth of the sector. The following

road map would need to be prepared and

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accomplished as part of Corporate Professional

Responsibility activity:-

(i) Identifying thelong, medium to short term for

defence technologies.

(ii) Development of Proof on Conceptsand

Minimum Viable Projects for identified high

technology Projects.

(iii) Development of Pilot Projects for identified

Projects by Defence Forces including Suo Moto

proposals.

(iv) Invest in Joint Research & Development

Projects identified by Defence Forces.

(v) Provide consultancy support to Defence forces

on tech issues.

(vi) Project oriented MoUs and strategic

partnershipfor technology.

(vii) Special Technical Assistance like Customised

Secure Application Software Development

and Information Communication Technology

Support.

(viii) Skill Development within Defence Forces in

hi tech fields.

(ix) Establishment and running of Centre of

Excellence in Contemporary technology Fields.

(d) Implementation.

(i) The investment in Corporate Professional

Responsibility should be technology/ project

based.

(ii) Technologies/project activities identified under

Corporate Professional Responsibilitywill be

implemented by specialized designated

agencies, companies industry, academia and

startups.

(iii) Specialized Agencies may work singly or in

tandem with other agencies based of MOUs.

(iv) For every project, time framed periodic

milestones should be finalised at the outset and

have a joint project management structure

comprising defence subject matter experts

(champion) of industry representives.

CONCLUSION

India has a great opportunity to change the status quo and

become a key player in the global Defence Industry.

The implementation of the announced policy changes

coupled with a mind-set shift toward the private sector

from only DPSUs will go a long way in setting the tone

for the growth trajectory. To make this happen, it is

important that there is aclose collaboration between the

Defence Force and the Industry.

As discussed, Industries are expecting huge amount of

support from Defence Forces to assist them in

establishing in the field of indigenous Defence

production. As part of Corporate Professional

Responsibility, Industry could support Defence Forces in

capabilities development, ingesting new technologies

and promote defence technologies self-reliance within

defence forces. In times to come, CPR will prove to be

the corner stone of Industry - Defence synergy and is

the „Way Forward‟ for sustained inclusive growth of

Industry and Defences Forces of India.

REFEFRENCES

1. 'Make In India' http://www.makeinindia.com/policy/new-

initiatives

2. Methodology of Corporate Social Responsibility by

Dezan Shira https://www.indiabriefing.com/news/corporate-

social-responsibility-india-5511.html/

3. Para 4, Pg 2, Handbook on CSR, PWC Ltd, https ://

www.pwc.in /assets/pdfs /publications/ 2013/ handbook -

on-corporate-social-responsibility-in-india .pdf

4. Pg 7, Defence Industrial Base – Sector Specific Plan,US

Homeland Security

https://www.dhs.gov/sites/default/files/publications/nipp-

ssp-defense-industrial-base-2010-508.pdf

5. What ails India's Defence Industrial Complex? By Lt

Gen PC Katoch (Retd)

http://www.indiandefencereview.com/news/what-ails-

indias-defence-industrial-complex/

6. Need for Indian Industrial Complex by Radhakrishna Rao,

http://www.ipcs.org/focusthemsel.php?articleNo=3100

7. Making 'Make In India' a Reality in Defence and

Aerospace Sector by Lt Gen Balli Pawar (Retd),

https://www.geospatialworld.net/article/making-make-in-

india-a-reality-in-defence-and-aerospace-sector/

8. Para 1, Pg 3, Indian Defence Industrial Base; Lessons

from Developed Industry by Kavita Nagpal http:

//www.defproac.com/?p=3033

9. Nirmala Sitharaman inaugurates Defence Industrial

Corridoreconomictimes.indiatimes.com/articleshow/67609

598.cmsutm_source=contentofinterest&utm_medium=text&

utm_campaign=cppst

10. Para 2, Reimagining India's Defence Industrial Base by

Ashish Puntambekar http://indiafoundation.in/re-imagining-

indias-defence-industry-base/

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SATISFACTION LEVEL OF THE EMPLOYEES WITH REFRENCE TO KUBER

CASTING PRIVATE LIMITED (147301)

Rajni Bala*, Veeni

**

*Assistant Professor, PIMT, Alour Khanna, Punjab, India

**Student, A.S. College, Khanna, Punjab, India

ABSTRACT

In the modern era, we know that the employees are the king of the organisation, because if they work hard only

then the organisation can achieve their mission or vision. So that satisfaction level the employees are plays a

significance role in the growth of the organisation. This study was conducted to know about the satisfaction

level of the employees in the steel industries. For this purpose the researcher were choose kuber casting private

limited which is located in mandi gobindgarh (Punjab) deals in casting of metal. In this study, the researcher

tries to find the various factors which affects the satisfaction level of the employees. This study also describes

the hurdles faced by the employees in the work place. Stratified sampling technique is used to gather the data

from the respondents at kuber casting private limited. A sample of 60 employees is taken as sample respondents

for the purpose of the study. In this paper, the researchers, applied chi-square test as well as f-test to check the

validity of the data.

Keywords: employees, satisfaction, allowances, working environment.

INTRODUCTION

Satisfaction level of the employees plays a vital role in

the growth of the organisation. In layman’s words, “A

happy employee is a productive employee.” An

employee who is highly satisfied with his job becomes a

happy employee. Therefore, satisfaction level can be

influenced by the ability of a person to do the required

tasks efficiently as well as effectively, the top-middle-

lower level communication in the organization and the

way of management treats their employees. When a

person says that he is highly satisfied, it means that he

really enjoys his job, feels good about job and values his

job faithfully. So, satisfaction level of employees is the

collection of feelings and principles that people have

about their current work place. A highly satisfied

employee has better physical and mentally sound.

FACTORS INFLUENCING SATISFACTION

LEVEL OF THE EMPLOYEES:

Mainly there are four factors which influencing the level

of satisfaction of employees.

These are as follows:

ORGANIZATIONAL FACTORS

• Salaries and wags

• promotion chances

• company policies

WORK ENVIRONMENT

• supervision

• work group

• working conditions

WORK ITSELF

• job scope

• autonomy and freedom

• status

PERSONAL FACTORS

• age

• length of service

• personality

• education/ intelligence

FACTORS INFLUENICING SATISFACTION LEVEL

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INTRODUCTION TO THE INDUSTRY

Kuber Casting Private Limited has been constituted in

the year 2005 by Mr. Rakesh Singhi (managing

director), it is based in Mandi Gobindgarh, Punjab, India.

They have a large team of 60 employees, who are very

hardworking. The team is divided into several divisions

as per the requirement of proper functioning of the

organization. The organization provides after sale

services to its clients.

Share capital & number of employed

Authorized capital 1,00,00,000

Paid up capital 59,80,000

Nature of business

Manufacturer and Supplier

GST number 03AACCK4810D1Z8

Corporate identification number U27310PB2004PTC027579

Current status Active

Registration no. 27579

Company category Limited by shares

Company sub category Non-govt. company

Class of company Private

Deals in Casting of metals

(casting of finished or semi finished products)

Listing status Unlisted

STATEMENT OF THE PROBLEM

Employees are the central forces of an industry and only

with their efficiency, an organization can move into

success. Only when all the employees of the organization

are satisfied it can lead to success. For employee

satisfaction the organization must provide adequate

welfare measures. By conducting this study, the

researcher can analyse whether the employees are

satisfied by the organization.

REVIEW OF LITERATURE

The present literature review is used to briefly summarize

the past researches’ studies.

Sophie Rowan (2008) reveals how to create a happier

work life, without changing career. She provides

practical and realistic guidance on how one can achieve

optimal job satisfaction and overcome the obstacles that

make so many of us unhappy at work.

Chris Stride, Toby D. Wall, Nick Catley (2008)

presented widely used measurement scales of Job

Satisfaction, Mental Health, Job-related Well-being and

Organizational Commitment, along with benchmarking

data for comparison. The benchmarking data is based on

a sample of almost 60,000 respondents from 115

different organizations across a wide spectrum of

industries and occupations. Information is given by

occupational group, and is further broken down by age

and gender.

Evren Esen (2007) examined in terms of industry and

staff size as well as employee age and gender more than

20 indicators of job satisfaction including career-

advancement opportunities, benefits, the flexibility to

balance life and work, and compensation.

Joanna Penn (2008) teaches how to improve your

position in your current employment, gaining more from

your job, discovering more about yourself and what it is

you would be happy doing, stress management and

people management.

Patricia Buhler, Jason Scott (2009) present an

academic argument for building an employee-centered

culture. They also examined a real-world case study of a

company that has experienced the economic benefits of

this practice, making it abundantly clear that modern

businesses can't afford not to make employee satisfaction

a top priority.

Zial (2011) concluded that, the team building has long

term positive relationship between employee morale and

employee retention. Team performance, individual

contribution, team evaluation and coordination have long

term positive relationship between employee morale and

employee retention. Team unity has no significant effect

on employee morale and employee retention. Employee

morale within an organization has a direct impact on the

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satisfaction level of its customers and the company's

ultimate success.

OBJECTIVES OF THE STUDY

1. To study the satisfaction level of employees with

respect to experience.

2. To study the Qualification level of the employees

and satisfaction level with job.

3. To study the significance difference between

marital status of the employees.

RESEARCH METHODOLOGY:

Research Empirical

Primary data collection Through structured questionnaire

Secondary data collection From the website of the company and E-journals.

Sampling method Stratified sampling

Sample area Kuber casting private limited

Respondents Employees of Kuber casting private limited

Sample size 60

Scaling technique 5 point likert scale

Hypothesis testing F-test, Chi-square test, ANOVA

TESTING OF HYPOTHESIS

Qualification level of the employees and satisfaction level with job

Qualification/

satisfaction

H.satisfied

Satisfied

Neutral

Dissatisfied

H.dissatisfied

Total

10+2 1 1 3 0 1 6

Diploma 2 2 5 0 1 10

Under graduate 2 9 16 5 0 32

Post graduate 4 2 6 0 0 12

Total 9 14 30 5 2 60

Hypothesis-1:

Let us take the null hypothesis that there is no significant

difference between the Qualification level of the

employees and Satisfaction level of the employees with

the job.

By applying chi-square test:

x2 =15.586 , d.f.= (4-1)(5-1) = 12, at d.f. = 12, x

2 0.05=

21.026

Since, calculated x2 value is less than the table value,

therefore hypothesis is accepted. We conclude that there

is no significant difference between the Qualification

level of the employees and Satisfaction level of the

employees with the job.

Marital statuses of employees

Employment status/ marital status Married Unmarried

Top level employees 11 0

Middle level employees 17 2

Lower level employees 23 7

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Hypothesis – 2

Let us take the null hypothesis that there is no

significant difference between the marital statuses of

the employees.

Applying F-test

Calculated value: 1.56 for V1= 2, V2 = 2

F0.05 = 19.00

INTREPRETATION:

For V1= 2, V2= 2, the table value of F at 5% level of

significant is 19.00. Since the calculated value of F is less

than table value. So, we accept the null hypothesis and

conclude that there is no significant difference between

the marital statuses of the employees.

Experience and job satisfaction

Hypothesis – 3

Let us take the null hypothesis that there is no significant difference between the experience of the employees and

Satisfaction with job.

ANOVA TABLE

Sources of variations Sum of squares Degree of freedom Mean sum of square F-ratio

SSB 32.5 4 8.125 1.53

SSW 79.5 15 5.3

TOTAL 112 19

INTREPRETATION

For V1= 4, V2= 15, the table value of F at 5% level of

significant is 3.06. Since the calculated value of F is less

than table value. So, we accept the null hypothesis and

conclude that there is no significant difference between

the Experiences of the employees Satisfaction with job

security level.

House allowance provided by the industry

Yes No Total

Top level 10 1 11

Middle level 8 11 19

Lower level 10 20 30

Total 28 32 60

Hypothesis - 4

Let us take the null hypothesis that there is no

significant difference between the house allowances

provided by the industry to its employees.

By applying chi-square test

x2 =10.9658 , d.f.= (3-1)(2-1) = 2

at d.f. =2, x2

0.05= 5.99

Since, calculated x2 value is higher than the table value,

therefore hypothesis is rejected. We conclude that there is

Experience/

satisfaction level

H.satisfied

Satisfied

Neutral

Dissatisfied

H.dissatisfied

Below 1year 0 1 5 6 3

1-5 years 3 10 7 2 0

5-10 years 3 3 4 1 1

More than 10

years

4 3 2 2 0

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significant difference between the house allowances

provided by the industry to its employees.

FINDINGS

Employees are satisfied with the experience in

the job.

No significance difference between the marital

statuses.

Almost the employees are satisfied with house

allowances provided by the industry.

They are satisfied with their job in respect of

their qualification level.

SUGGESTIONS

Company should improve their reward system.

Improve their work environment in the favour of

employees,

Improve the relation between mgt. and

employees.

Reduce the gap between the levels of mgt.

CONCLUSION

Findings and suggestions are based on the survey

conducted and these points are to be looked into and

steps are to be taken in this regard for higher growth.

From this analysis, I conclude that the job provides the

opportunity to the employees to exercise his or her skills

at workplace. Number of the employees accepted at times

there is a considerable flexibility in coordinating with

work and they are satisfied with the exciting inter

personal communication. The company follows the

systematic planning and review process to evaluate the

performance of employees. From the analysis, it was also

observed that there is a scope for the improvement of

working conditions in KUBER CASTING PRIVATE

LIMITED.

Finally, I would like to conclude that the employees of

this company are satisfied with their work and the

organization.

REFERENCES

1. ASWATHAPPA (2005),”HUMAN RESOURCE

MANAGEMENT”,TATA Mcgraw Hill Publishing New

Delhi

2. S.P.GUPTA (2002), “STATISTICAL METHOD”, Sultan

Chand & Co, New Delhi.

3. C.R.KOTHARI (2004), “RESEAERCH

METHHODLOGY”, (Method & Techniques), New Age

International (P) LTD, New Delhi.

4. Chopade Pallavi (2012): An Impact of Rightsizing on

Existing Employees’ Commitmentand Morale: Study of

Indian IT Companies. International Journal of Management

and Social Sciences Research (IJMSSR). Vol.1 (2) pp.6-10.

5. Huang, Y. H., Robertson, M. M., and Chang, K. I. (2004).

The role of environmental control on environmental

satisfaction, communication, and psychological stress:

effects of office ergonomics training. Environment and

Behavior, 36(1), 617-638.

6. Islam J.N., Mahajan H.K. and Datta R. (2012) : A study on

Job Satisfaction and Morale of Commercial Banks in

Bangladesh. International Journal of Economics and

Research Jul-Aug. pp. 152-172.

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THE EFFECT OF DEMOGRAPHICS ON THE USAGE OF DIGITAL PAYMENT

METHODS

Baljinder Kaur*, Sunayna Khurana

**

*Research Scholar, IK Gujral Punjab Techinal University, Jalandhar, Punjab, India

**Professor & HOD-MBA Department, Chandigarh Business School of Administration,

Chandigarh Group of Colleges, Landran, Punjab, India

ABSTRACT

Today, the customers have the advantage of alternative digital payment methods for banking and making

payments except for cash. This research is an attempt to investigate the effect of user’s demographics on

regular use and usage patterns of different modes of digital payments in Jalandhar, Punjab. The hypothesis

was tested on the influence of demographic variables of users on different digital payment methods. Further,

the descriptive analysis for presenting the patterns of usage of the different modes of digital payments. Results

explicated that a significant effect of demographics of users on the use and usage of various modes of digital

payments change through different demographic groups.

Keywords: Digital Payments, Demographic Variables, Modes of Usage

INTRODUCTION

The literature review recommended that the preceding

researches were more orientated towards the acceptance

of digital payment methods. But as per RBI Bulletin,

August 2019 as presented in Table I displays a

significant rise in the usage of the different modes of

digital payments in volumes. There are different modes

of digital payments offered by the Indian Government to

cater all the segment of the population such as banking

cards (debit and credit cards), banking pre-paid cards,

unified payment interface, mobile and Internet banking,

mobile wallets, micro ATMs, Adhaar Enabled Payment

System (AEPS) and unstructured supplementary service

data (USSD). The present research has taken into

consideration age, gender, education and occupation as

demographic variables and six prevalent digital payment

methods such as credit and debit cards, UPI, Mobile

wallets, mobile banking and internet banking used by the

urban population.

REVIEW OF LITERATURE

Liebana-Cabanillas F.et al., (2014) the authors confirmed

that there was a strong inclination to accept mobile

payments among young users aged 35, whereas older

users aged above 35 impacted by their own social

influence and ease of use of technology. Roy S. & Sinha

I. (2014) in Kolkata identified that the respondents (age

of above 40 or above 60 years) aware of the technical

aspect of the payment services, but the conservation

habit of using cash or cheque was dominant. Singh S.

(2014) presented that demographic variables such as

gender, age, occupation and income had no significance

in using digital payments except for the education. Sinha

M. et al., (2015), concluded that technology eagerness in

young, educated male with high-income consumers

inclined to be far more at ease with the use of

technology. Ali Alalwan (2015), identified that users

aged between 25 to 30 and 31 to 40 years old exhibited a

high level of mobile banking adoption in Jordan found

that the level of education to be significant. Musa A., et

al. (2015), logically used the UTAUT model concluded

that the demographic factor’s gender and age

substantially linked with social influence and perceived

security. Saha A. (2016), examined that in the rural area

Kamrup, Assam most of the respondents who accepted

e-payments were males with regular income levels.

Singh N. et al., (2016) concluded that demographic

variables such as age and gender affect users’

satisfaction and usage frequency. Work u et al., (2016)

showed a significant association between demographic

features as age, gender, education, occupation and

marital status with users’ satisfaction. Abdinoor A. et al.,

(2017) identified that respondents aged 18 to 30 years

considered perceived benefits of mobile banking. Singh

N. et al., (2017) concluded in their work based on the

unified theory of acceptance and use of a technology

model that age played a major influential role in

preference, satisfaction and perception except for gender.

Sumathy M. et al. (2017), in the survey performed on

100 urban respondents showed that gender and education

had no substantial impact on the level of awareness for

digital payments systems in the Malappuram District,

Kerala, mainly because of the 100% level of literacy in

the state. Yaokumah et al. (2017) investigated that

solitary demographic factor specially education

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influenced the adoption of the varied modes of digital

payments in Delhi Ncr and other factors found to be non-

significant. Kalra A. & Jain R. (2018) concluded that

gender, occupation, age had a significant role in the

frequency of usage of online banking services. Sobti N.

(2019) recognised that age as a leading factor in using

mobile payment in younger users.

OBJECTIVES OF THE RESEARCH

1. To investigate the effect of demographics of

respondents on regular use of digital payment

methods.

2. To analyse the patterns of usage of the different

digital payment methods.

RESEARCH METHODOLOGY

The data collected via a structured questionnaire from

179 users of different digital payment methods from

Jalandhar using the judgemental sampling technique.

The Kolmogorov Smirnov and the Shapiro-Wilk test

(IBM SPSS 20) used for testing the normal distribution

of demographic variables as shown in table II. The

results of Kolmogorov Smirnov and Shapiro-Wilk test

showed that the significance value is below p<0.05

hence that the data deviates from the normal distribution.

Therefore, non-parametric statistical tests, namely the

Mann-Whitney and The Kruskal-Wallis tests used for

testing the hypothesis.

H0: There is no significant association towards using

digital payment methods on the demographics of the

user. The null hypothesis further divided into the

following sub-hypothesis as per different demographic

variables.

H0 a: There is no significant association towards using

digital payment methods on the age of the user.

H0 b: There is no significant association towards using

digital payment methods on the gender of the user.

H0 c: There is no significance association towards using

digital payment methods on the education of the user.

H0 d: There is no significance association towards using

digital payment methods on the occupation of the user.

DATA ANALYSIS AND RESULT

H0 a: There is no significant association towards using

digital payment methods on the age of the user: To test

the hypothesis HO a, the Mann-Whitney U used. The test

results exhibited in Tables IV that there was a significant

association with the use of gender in varied methods of

digital payments. This result also supported by the

conclusion of Singh N., et al, (2017). Therefore, the HO

a is rejected.

H0 b: There was no significant difference in the usage of

digital payment methods relating to the age of the

respondent: Kruskal-Wallis test used to test HO b, the

Table V exhibit that there was a significant difference in

usage of the different methods of digital payments in

association with various age groups. Hence, the null

hypothesis is discarded. The results also support the

findings of Sobti N., (2019).

H0 c: There is no significant difference in the usage of

digital payment methods relating to the education of the

respondent: to test the HO c, Kruskal-Wallis test

conducted. Table VI shows that there was a statistically

significant association of the use of different digital

payment modes with reference to the level of education

of the users. The results support the conclusions of Singh

S. and Rana (2017).

H0 d: There is no significant difference in the usage of

digital payment methods relating to the occupation of the

respondent: The Kruskal-Wallis test statistics confirmed

that there was a significant association with the use of

the varied modes of digital payments vis-a-vis

occupation as presented in Table VII. Therefore, HO d is

not confirmed.

The Usage pattern of Digital Payment Methods: The

cross-tabulated data presented interesting facts that the

use of cash transactions pertaining to gender with

significant usage on daily and a few times in a week as

presented in Table VIII.

CONCLUSION

The users’ preferences for the different digital payment

methods shows variation with demographic

characteristics such as age, gender, education and

occupation. The results showed that the influence of

demographic variables on the use of varied modes of

digital payments were not uniform. The results of

hypotheses testing corroborates the findings by Jain R.

(2018) and Worku et al. (2016) as demographic factors

gender, age, education and occupation, significantly

affect the usage of the different digital payment methods.

The analysis of patterns of usage relating to gender and

age group wise described based on the frequency of the

use of different payment methods. The finding of this

research work strongly recommends the banks and other

financial institutions responsible for offering digital

payment methods must consider the demographic factors

while devising digital payment methods to achieve

desired objectives.

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1. Ali Alalwan, NripendraRana, YogeshDwivedi, BanitaLal,

Michael Williams. Adoption of mobile bankingin Jordan:

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Abdinoor&Ulingeta O.L. Mbamba / Lorenzo Ardito

(Reviewing Editor) (2017) factors influencing consumers’

adoption of mobile financial services in Tanzania, Cogent

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Business & Management, 4:1, DOI:

10.1080/23311975.2017.1392273

2. AsthaKalra & Rajiv Jain (2018), “Digitalisation”, Maharaja

Agrasen University Publications New Delhi

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VType=8&IType=11

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india

6. L.-C. Francisco et al. (2014),”Antecedents of the adoption

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Banking Sector-A Study”, International Journal of

Scientific & Engineering Research, Volume 5, Issue 1,

January-2014-ISSN 2229-5518

13. Saha A. (2016), “Transition to Cashless Economy in North

East India: A study on Kamrup (Rural) District of Assam”,

IRJMST Vol 7 Issue 11 [Year 2016] ISSN 2250-1959

(Online) 2348-9367 (Print)

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Factors on Satisfaction of Users for various Digital

Payment Methods, International Journal of Innovative

Technology and Exploring Engineering (IJITEE) ISSN:

2278-3075, Volume-8, Issue-9S, July 2019

15. Singh, S. (2014), “Customer perception of mobile banking:

an empirical study in National Capital Region Delhi”,

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pp. 2-23. (Sn 3)

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payments in India: drivers and inhibitors”, available at:

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New England Economic Review.

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DP03062019

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Payments Services”, International Journal of E-Business

Research Volume 13 Issue 1 January-March 2017.

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Table I Source: RBI Bulletin, August 2019

Table II Tests of Normality

Kolmogorov-Smimov Shapiro-Wilk

Statistic Df Sig Statistic Df Sig

Age group .224 179 .001 .869 179 .001

Education .251 179 .001 .855 179 .001

Occupation .322 179 .001 .794 179 .001

Gender .368 179 .001 .632 179 .001

Table III Demographic Profile of users’ of different methods of digital payments

Demographics Group Freq. % Cumulative%

Age-Group 18-25 41 22.9 22.9

26-35 57 31.8 31.8

36-50 65 36.3 36.3

50&above 16 8.9 8.9

Total 179 100.0 100.0

Gender Male 99 55.3 55.3

Female 80 44.7 44.7

Total 179 100.0 100.0

Education High Class 23 12.8 12.8

Graduate 80 44.7 44.7

Post Graduate 66 36.9 36.9

Other 10 5.6 5.6

Total 179 100.0 100.0

Occupation Student 8 4.5 4.5

Service Class 98 54.7 54.7

Business Class 41 22.9 22.9

Housewife 27 15.1 15.1

Others 5 2.8 2.8

Total 179 100.0 100.0

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Table IV Mann-Whitney U-Test Statistics (Grouping Variable: Gender)

Debit card Credit Card Mobile Banking Internet

Banking

Mobile Wallets UPI

Mann-Whitney U 3797.000 2428.500 3551.000 3927.500 3346.500 3708.00

Wilcoxon W 7037.000 7279.500 8501.000 8877.500 7717.500 6868.00

Z -.562 -4.482 -1.254 -.105 -.942 -.647

Asymp. Sig. (2-

tailed)

.574 .001 .210 .916 .346 .518

Table VIII Patterns of Usage * Gender Cross tabulation

Types of digital payment

methods

Frequency of usage of digital payment

methods

Gender

Male % Female%

Debit Card Daily 72.2 27.8

Few times in a week 48.7 51.3

Few times in a month 66.7 33.3

Credit Card Daily 100.0 0.0

Few times in a week 71.4 28.6

Few times in a month 71.4 28.6

Once a month 60.0 40.0

Mobile Banking Daily 81.0 19.0

Few times in a week 50.0 50.0

Few times in a month 53.4 46.6

Once a month 50.0 50.0

Internet Banking Daily 85.7 14.3

Few times in a week 51.5 48.5

Few times in a month 66.7 33.3

Once a month 55.0 45.0

Mobile Wallets Daily 65.8 34.2

Few times in a week 50.0 50.0

Few times in a month 50.0 50.0

UPI Daily 100.0 0.0

Few times in a week 44.7 55.3

Few times in a month 63.6 36.4

Once a month 63.6 36.4

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Table V Kruskal-Wallis test (Grouping Variable-age)

Debit Card Credit Card Mobile

Banking

Internet

Banking

Mobile Wallets UPI

Chi-Square 40.992 10.147 41.607 28.915 27.727 17.139

Df 3 3 3 3 3 3

Asymp.Sig. .000 .017 .001 .001 .001 .001

Table VI Test Statistic – Kruskal-Wallis Test (Grouping Variable: Education)

Debit Card Credit Card Mobile

Banking

Internet

Banking

Mobile Wallets UPI

Chi-Square 23.006 14.992 19.167 4.538 14.900 7.473

Df 3 3 3 3 3 3

Asymp.Sig. .001 .002 .001 .209 .002 .058

Table VII Test Statistics-Kruskal-Wallis test (Grouping Variable: Occupation)

Debit Card Credit card Mobile

Banking

Internet

Banking

Mobile Wallets UPI

Chi-Square 10.324 39.778 18.893 18.756 7.944 4.591

Df 4 4 4 4 4 4

Asymp.Sig. .035 .001 .001 .001 .094 .332

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PROFITABILITY AND PRODUCTIVITY IN BANKING SECTOR: A CASE STUDY

OF PUBLIC SECTOR BANKS IN INDIA

Surjit Singh*

*Assistant Professor, SGGS College, Sector-26, Chandigarh, India

ABSTRACT

The banking sector in India has undergone substantial structural change since the liberalization of the

banking sector in1991.Profitability and productivity is the most commonly used criteria for determining the

performance of the banks. The process of globalization and liberalization has thrown competition among the

various bank groups. Now all the banks are working under the same environment and are forced by the

competitive environment to earned sufficient profits to remain in the market. In this paper profitability and

productivity of the public sector banks pre and post liberalized era has been compared by applying Mann

Whitney u test. The study revealed that profitability and productivity of public sector banks has improved

significantly in post liberalisation period. To test the relationship between profitability and productivity

regression analysis has been applied and results revealed that there is significant relationship between

profitability and productivity

INTRODUCTION

During the last two decades the Indian banking industry

has experienced major transformations under the impact

of technological advances, deregulation, and

globalization. The banking sector in India has undergone

substantial structural change since the liberalization of

the banking sector in 1991.Both external and internal

factors in one or another have affected the performance

of banking industry. The efficient and profitable banking

industry is required to absorb negative shocks and

contribute to the stability of the financial sector of a

country. Hence, the determinants of bank financial

performance have attracted the interest of academic

research as well as regulators, policy makers, bankers

and analyst. Although the monetary authorities have

taken those measures to stabilize the banking system and

build confidence in the banking industry, it is interesting

to know what factors affect banks profitability.

PROFITABILITY

Profitability is the most commonly used criteria for

determining the performance of the banks. It is a rate

expressing profit as a percentage of total assets or sales

or any other variable to represent the relationship. The

Indian banking system had gone through a series of

crises and consequent bank failures and thus its growth

was quiet slow during the first half of the century. But

even after the nationalization Indian Banking system

failed to achieve the desired results due to their socialistic

approach. Profit is the main requirement for the

continued existence of every commercial organization.

The rate of profitability and volume of profits earned are

not only the indicators of earning capacity of the banks

but also show the efficiency of the banks in the

deployment of resources. The process of globalization

and liberalization has thrown competition among the

various bank groups. Now all the banks are working

under the same environment and are forced by the

competitive environment to earned sufficient profits to

remain in the market. In the light of the above, there is

need for comparing the performance of the banks in pre

and post liberalized era and to see the impact of

liberalization on the Indian banking sector.

PRODUCTIVITY

Productivity means the output per unit of input

employed. In other words, it is the Total output/Total

input ratio. i.e. the volume of goods and services

produced in terms of the quantities of inputs required to

produce them. Productivity is the relationship between

physical output and one or more of the physical inputs

used in production. The measurement of productivity

involves measuring output and inputs. The measurement

of output does not present any difficulty so long as output

is homogeneous, as in the case of extractive industries.

But banking, being a service industry, it provides a wide

range of services like acceptance of deposits, extension

of credit, fund remittance, agency functions, money

changer, providing safe custody etc. So due to variety of

services it is difficult to identify the output.

Bank productivity can be studied with inputs identified as

capital, labour, number of branches and other inputs. The

ratio of various business parameters and operating results

with identified inputs will measure productivity. For

example deposit, credit, business, total expenditure,

spread per employee may be calculated to measure

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labour productivity. In the same way branch productivity

can be calculated by calculating the various ratios like,

credit per branch, business per branch, total expenditure

per branch and, spread per branch etc. Presently banking

sector is passing through the global challenges like

enhancement of customers’ services, computerization,

implementation of capital adequacy norms like Basel II

III , improvement of risk management system and

implementation of internationally accepted accounting

standards. To face the Global challenge Banks have to

increase their profitability and productivity.

REVIEW OF LITERATURE

Ramamoorthy(1998)in his technical paper analyzed the

profitability and productivity of Indian commercial banks

for the period 1991-96. The study concluded that there

was an increasing trend in interest income, non-interest

income, operating expenditure, operating profits and

spread. He suggested that to increase the profitability

and productivity of the banks the costing system in banks

should be strengthened and scientific methods of product

pricing and costing of bank's products and services

should be evolved. ;Padamasai(2000) evaluated the

profitability, productivity and efficiency of top five

public sector banks. The study concluded that

profitability and productivity had increased after the

reforms period. Chandan and Rajput (2002) analyzed

the performance of banks on the basis of profitability.

The researchers analyzed the factors which determine

the profitability of the banks In India with the help of

multi regression technique. The study revealed that

difference of interest and non-interest income (spread)

or net interest income was the main source of income

for the banks . Aggarawal (2005)measured the relative

productivity of Public sector banks. Productivity of all

the public sector banks for the year 2003 has been

calculated. The researcher used the data envelopment

technique, the researcher concluded that five out of

eight bank from State Bank group and from the other

nationalised nineteen banks eight banks were efficient,

and the cause of inefficiency of banks was due to

excessive borrowing and less income from commission,

and income from exchange. Bansal (2005), in his thesis

on the impact of liberalization on productivity and

profitability of public sector banks in India evaluated

the productivity and profitability of 27 PSBs in the post-

liberalization period, over the period of 1991-02.

García-Herrero, Gavilá and Santabárbara (2009) analyze empirically the reasons for the low profitability

in Chinese banks during 1997-2004.Kumar and,

Malathy (2010) in their study entitled “Productivity

growth and efficiency change in Indian banking :

Technology effect Vs catch-up effect”, evaluated the

influence of technological changes in Indian banking

sector over a period of 1995to 2006. The study revealed

that total factor productivity (TFP) growth over the

period of study is due to technical changes and not due

to efficiency change, it shows that technology and

innovation in the various products and services have

greater impact than efficiency change. Dietrich and

Wanzenried (2011) analyze the profitability of 372

commercial banks in Switzerland for a period from 1999

to 2009 By using the GMM estimator technique.

NEED OF THE STUDY

Profitability is a technique to evaluate overall efficiency

of an organization. Profitability of the banking sector is

considered as the good parameter of performance.

Among various parameters employee productivity

indicators like business per employee and profit per

employee are most commonly used. In addition, business

per branch and profit per branch are also used to judge

the branch level productivity, which ultimately

contributes to the profitability and overall performance of

the organisation. Since the profitability of banks is one

of the driving forces of capital, it is desirable to identify

the factor which factors contributes in it significantly.

Academicians and regulatory authorities have always

been interested in bank profitability and productivity

studies so that they can take necessary steps to assess and

manage risk for ensuring stability in the financial

system.in this paper attempt has been made to establish

the relationship between profitability and productivity of

public sector banks.

OBJECTIVES OF THE STUDY

The following are the objectives of the study:

1) To compare the profitability of public sector

banks in pre and post liberalization period.

2) To compare the productivity of public sector

banks in pre and post liberalization period.

3) To find the relationship between Profitability

and productivity of the public sector banks.

RESEARCH METHODOLOGY

Research methodology states sample size, sources of

data collection, sample period, parameters and

techniques of data analysis.

SAMPLE AND PERIOD OF STUDY

The data employed in the study relates to the Public

sector banks in India. The data considered for the study

pertains to the period 1980-81 to 2011-12 which has been

further divided into pre liberalization period 1980-81 to

1991-92 and post liberalization period 1992-93 to 2011-

12.

SOURCES OF DATA COLLECTION

The data relating to the Public sector banks has been

taken from the various issues of Statistical tables

relating to banks, Report on Trend and progress of

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banks in India, published by RBI, Mumbai , reports of

IBA, and other financial Periodicals.

PARAMETERS OF THE STUDY

Profitability indicators

To find out the profitability and productivity of the

selected banks following indicators were selected for the

purpose of study:

Three sets of ratios have been employed for assessing the

profitability of commercial banks, viz. spread ratios,

burden ratios and profitability ratios.

Spread Ratios

Spread is the difference between interest earned (on loans

and advances) and interest paid (on deposits and

borrowing) by the banks, it is very useful in determining

the profitability of banks. It is the net amount available to

the banks for meeting their expenses. In order to analyse

the profitability performance of commercial banks, it

becomes imperative to study the magnitude of this spread

and its components i.e. interest and interest paid in

relation to total Assets of the banks. The spread ratios

which have been employed are as under:

1 Interest Earned as percentage of Total Assets.

2 Interest paid as percentage of Total Assets.

3 Spread as percentage of Total Assets

Burden Ratios

Burden is the difference between non-interest

expenditure and non-interest income of the banks. It

represents non-interest expenditure not covered by non-

interest income and is an important factor in determining

the profitability of banks. The burden ratios which have

been employed are as under:

1 Non-Interest Expenditure as percentage Total

Assets

2 Non-Interest Income as percentage of Total

Assets.

3 Burden as percentage of Total Assets.

Profitability Ratios

Profitability is the ratio of earnings to the funds used. It

indicates the efficiency with which a bank deploys its

total resources to maximize its profits. The profitability

ratios which have been employed are as under:

1 Net Profit as percentage of total income.

2 Net Profit as percentage of total deposits.

3 Net Profit as percentage of Total Assets.

Productivity Indicators

1) Business per employee

2) Profit per employee.

3) Burden per employee.

4) Business per branch

Apart from these ratios, other ratios have also been used,

wherever necessary. To have a better view of the

performance of banks, these ratios have been analyzed

and interpreted by calculating Mean (X), Standard

Deviation (S.D.) and Co-efficient of variation (C.V.).

TECHNIQUES OF DATA ANALYSIS

To analyse data multiple regression analysis has been

used in the study. The regression analysis is concerned

with the study of dependence of one variable, the

dependent variable on one or more variables. To

calculate all the statistical results, SPSS software package

(version 16.0) has been used.

RESULTS AND INTERPRETATION

The findings of the study indicate the results of the

regression analysis.

Multiple Regression Analysis

To test relationship between profitability and

productivity of Public Sector Banks, variables has been

selected as follows:

Dependent variable

Net Profit as percentage of Total Assets

(Y)

Independent Variables: Determinants of

profitability(X)

1) Business per employee

2) Profit per employee.

3) Burden per employee.

4) Business per branch

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Table:1 Comparison of Profitability of All Public sector banks (P1 1980-81 to 1991-92, and P2 1992-93 to

2011-12)

Ratios Mean (P1)

n=12

SD Mean (P2)

n=20

SD

Mann-Whitney

u test value

p -value

Spread as percentage of Total

Assets

1.884 .489 2.681 .322 20.00 .000**

Burden to Total Assets 1.769 .474 2.157 .660 65.00 .032*

Net Profit to Total income 1.340 .480 6.000 6.750 36.00 0.001**

NP to Total Deposits .155 .075 .625 .771 37.00 0.001**

NP to Total Assets .115 .059 .519 .625 37.00 0.001**

**significant at (0.01) level of significance. *Significant at (0.05)level of significance

Table 1 shows the results of Mann-Whitney u test on the

profitability of Public sector banks, it shows that there is

significant difference for all the parameters of study . It

shows that in post liberalization period a big change has

taken place in the public sector banks.

Table: 2 – Comparison of Productivity of All Public sector banks( P1 1980-81 to 1991-92, and P2 1992-93 to

2011-12)

Productivity Ratios Mean

(P1)

N=12

SD

Mean

(P2)

N=20

SD

Mann-Whitney

U

test value

P -value

Business per employee 25.11 10.337 347.634 345.905 0.0001 .000**

Profit per employee .0275 .0241 1.957 2.110 36.000 .001**

Spread per employee .414 .267 6.359 5.554 2.000 .000**

Business per Branch 528.09 197.41 4701.70 3777.39 .0001 .000**

**significant at ( 0.01) level of significance. *Significant

at ( 0.05 )level of significance Table 2 shows the results

of independent Mann-Whitney-u value on the

productivity of public sector banks, it shows that there is

highly significant difference for all the employee

productivity indicators (p<0.01). Branch productivity has

also improved in the post liberalization period as the

difference is highly significant (P<.01) . It shows that in

post liberalization period a big change has taken place in

the employee productivity and branch productivity of

public sector banks.

Relationship Model Between Profitability and

Parameters of Productivity of Public Sector Banks

To test relationship between profitability and other

parameters of productivity of Public Sector Banks, Net

Profit as percentage of Total Assets (Y) has been taken as

dependent variable and business per employee, profit per

employee, spread per employee business per branch as

independent variables.

Table3 :Regression Analysis of Net Profit as percentage of Total Assets on Business per Employee

Coefficients

Unstandardized Coefficients Standardized Coefficients

t Sig. B Std. Error Beta

Business per Employee (X) .006 .002 3.421 3.504 .002**

Business per Employee (X2) -8.936E-006 .000 -5.439 -2.226 .034*

Business per Employee (X3) 4.090E-009 .000 2.622 . .

(Constant) -.148 .121 -1.225 .231ns

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Model Summary

R R Square Adjusted R Square Std. Error of the Estimate F-value Sig.

.737 .543 .494 .376 11.081 .000**

Table 3 revealed that cubic regression equation for

prediction of net profit as percentage of total assets from

independent variable business per employee using enter

method, the data fits well to the model and has been

tested using the annova test which indicates a good fit

since its p-value is < 0.01. Cubic regression equation,

were obtained for the same . The value of Y can be

written as:

Y=-.148+.006X-X2+X

3

Where, Y is the dependent variable (net profit as

percentage of total assets), X is independent variables

(business per employee) and cubic relationship has also

been shown in scatter plot. (Figure 1).

Figure 1

Table4 :Regression Analysis of Net Profit as percentage of Total Assets on Profit per Employee

Coefficients

Unstandardized Coefficients Standardized Coefficients

t Sig. B Std. Error Beta

Profit per employee (X) 1.178 .110 4.247 10.744 .000**

Profit per employee (X2) -.384 .053 -7.497 -7.270 .000**

Profit per employee (X3) .035 .006 3.981 5.664 .000**

(Constant) -.008 .044 -.178 .860ns

Model Summary

R R Square Adjusted R Square Std. Error of the Estimate F-value Sig.

.938 .880 .867 .193 68.416 .000**

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Table 4 revealed that cubic regression equation for

prediction of net profit as percentage of total assets from

independent variable profit per employee using enter

method, the data fits well to the model and has been

tested using the annova test which indicates a good fit

since its p-value is < 0.01. Cubic regression equation,

were obtained for the same . The value of Y can be

written as:

Y=-.008+1.178X-.384X2+.035X

3

Where, Y is the dependent variable (net profit as

percentage of total assets), X is independent variables

(profit per employee) and cubic relationship has also

been shown in scatter plot. (Figure 4.15).

Figure 2

Table 5 Regression Analysis of Net Profit as percentage of Total Assets on Spread per Employee

Coefficients

Unstandardized Coefficients Standardized Coefficients

t Sig. B Std. Error Beta

spread per employee (X) .180 .038 1.789 4.711 .000**

spread per employee (X2) -.007 .002 -1.254 -3.303 .003**

(Constant) -.068 .101 -.678 .503ns

Model Summary

R R Square Adjusted R Square Std. Error of the Estimate F-value Sig.

.735 .540 .508 .371 17.002 .000**

Table 5 revealed that quadratic regression equation for

prediction of net profit as percentage of total assets from

independent variable spread per employee using enter

method, the data fits well to the model and has been

tested using the annova test which indicates a good fit

since its p-value is < 0.01. Quadratic regression equation,

were obtained for the same . The value of Y can be

written as:

Y=-.068+.180X-.007X2

Where, Y is the dependent variable (net profit as

percentage of total assets), X is independent variables

(spread per employee) and quadratic relationship has also

been shown in scatter plot. (Figure 4.16).

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Figure 3

Table6 :Regression Analysis of Net Profit as percentage of Total Assets on Business per Branch

Coefficients

Unstandardized Coefficients Standardized Coefficients

t Sig. B Std. Error Beta

Business per branch .0001 .00001 1.999 4.267 .000**

Business per branch ** 2 -1.799E-008 .00001 -1.434 . .

(Constant) -.151 .116 -1.293 .206ns

Model Summary

R R Square Adjusted R Square Std. Error of the Estimate F-value Sig.

.730 .533 .501 .374 16.572 .000**

Table 6revealed that quadratic regression equation for

prediction of net profit as percentage of total assets from

independent variable business per branchusing enter

method, the data fits well to the model and has been

tested using the annova test which indicates a good fit

since its p-value is < 0.01. Quadratic regression equation,

were obtained for the same. The value of Y can be

written as:

Y=-.151+.0001X-X2

Where, Y is the dependent variable (net profit as

percentage of total assets), X is independent variables

(business per branch) and quadratic relationship has also

been shown in scatter plot. (Figure 4.17).

Figure 4

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CONCLUSION

There is no doubt that India’s banking sector has been

transformed since 1992 i.e. after liberalization. Thus, the

restructuring of public sector banks and entry of new

private sector banks and foreign banks have improved the

professionalism in the banking sector. The banking sector

has responded positively to the reforms, as a results

productivity of the banks have seen significant change in

the post reform era due this profitability of the public

sector banks has improved significantly.

The implication of this paper is that profitability

employee and branch productivity has direct relationship.

After the liberalisation business per employee, profit per

employee, and business per branch has increased which

in turn contributed in the profitability of the banks. The

Indian banking sector is still improving, as India is a vast

country with a lot of potential for the banking sector.

Banking will further progress in the coming years by

adopting policies suitable for the Indian financial

environment like financial Inclusion, financial literacy in

rural areas, technological innovations, which will helps

the banks to enhance their profitability and productivity.

REFERENCES

1. Aggarwal, M. (2005)“Relative Productivity of Public

Sector Banks: An Application of DEA.” Indian

Management Studies Journal 9.2.

2. Bansal, S.(2005) “Impact of Liberalization on Productivity

and Profitability of Public Sector Banks in India” PhD

thesis. Panjab University, Chandigarh, India.

3. Benson, K. (2008). Commercial Banks in India Growth

Chllenges and strategies. New Delhi: New centuary

Publication.

4. Bhole, L.M. (2003). Financial Institution and Market. New

Delhi: Tata McGraw-Hill Publishing Company Ltd.

5. Bastana, K. (2012). Post 1991 Banking Reforms in India:

Policies and Impacts. English. accessed from

www.ssrn.com.

6. Chakrabarti, R. (2014). Banking in India:Reforms annd

Reorganisation.accessed from www.ssrn.com.

7. Chandan, C. and P.K. Rajput (2002)“Profitability Analysis

of Banks in India-A Multi regression Approach.” Indian

Management Studies Journal.

8. Datt, M. and Mahajan, A. (2012). Indian Economy. New

Delhi: S.Chand & Company.

9. Dietrich, A., & Wanzenried, G. (2011). Determinants of

bank profitability before and during the crisis: Evidence

from Switzerland. Journal of International Financial

Markets, Institutions & Money, 21, 307-327.

http://dx.doi.org/10.1016/j.intfin.2010.11.002

10. Government of India. Economic Survey of India: 1947-48 to

2008-09.

11. García-Herrero, A., Gavilá, S., & Santabárbara, D. (2009).

What explains the low profitability of Chinese banks?

Journal of Banking & Finance, 33.

12. Kaur, R. and Uppal, R.K. (2008) Banking in the New

Millennium: Issues, Chhallenges and Strategies. New

Delhi: Mahamaya publishing House.

13. Kumar, H. (2003). Productivity of Banks A comparison of

Public and Private Sector Banks in India. Doctoral thesis.

Patiala: Punjabi University.

14. Kumar, Lakshmi, D. Malathy and L.S. Ganesh(2010)

“Productivity Growth and Efficiency Change in Indian

Banking : Technology Effect Vs Catch-Up Effect. ” Journal

of Advances in Management Research

15. T. Padamsai.(2000)” Profitability, Efficiency and

Productivity of Big Five Public Sector Banks in India”

M.Phil Thesis. Uni, Of Delhi, Delhi, (2000).

16. Ramamoorthy, K.R. (1998)“Profitability and Productivity

in Indian Banking.” Chartered Financial Analyst.

17. Reserve Bank of India (2012). Stastical Tables Relating to

Banks In India. Mumbai: RBI.

18. Tannan, M.Ls.(2006). Banking Law and Pratice in India.

New Delhi: Wadhwa Publishers.

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EMPLOYEE SATISFACTION: A CONCEPTUAL FRAMEWORK

Monika Chopra*

*Assistant Professor, DAV College, Chandigarh, India

ABSTRACT

In dynamic work environment and ever increasing competitive markets, it becomes the foremost priority of

organisations to keep their employees satisfied by providing them a healthy, safe and secure work culture.

Happy and satisfied workers contribute towards increased production levels, building brand name and sound

foundation. The concept of employee or job satisfaction has gained importance after the conduct of Hawthorne

experiments. Employee satisfaction is the different feelings that an employee holds towards his or her job

whether it may be positive or negative. The paper outlines the different factors responsible for employee

satisfaction in organisations and models of employee satisfaction.

Keywords:Employee satisfaction, environment, employees, productively commitment.

INTRODUCTION

Employees are the greatest assets of any business

organisation as they help in building a strong base, brand

name and an important place in the market. If the

organisation is concerned regarding the satisfaction of

employees on the job, it will not result only in the

customer satisfaction rather expanding their customer

base also. Employees who are satisfied and happy at their

workplace are supposed to work more and contribute

towards increased production levels. Happy and satisfied

employees are more loyal to the organisations, take pride

in doing work for their teams and keep themselves

engaged to do extra efforts to achieve the goals. In

today’s environment, employees want more challenging

and interesting jobs otherwise they don’t mind joining

other organisations. Employee satisfaction also known as

the job satisfaction is the employee’s feelings and

emotions towards their jobs and various other factors

affecting jobs. In 1930’s Elton Mayo’s Hawthorne

experiments highlighted the correlation between

employee satisfaction and work environment. Since then,

a lot of progress has been made on the employee

satisfaction levels on the jobs. In 1950’s, organisations

started conducting employee satisfaction reviews. In

1970’s, researches developed standardized employee

satisfaction questionnaires. Employee satisfaction was

considered a key area of concern as it influenced

productivity, turnover, absenteeism, efficiency and

retention. In 1980’s, in science sector, the influence of

employee satisfaction on customer satisfaction was

considered. In 1990’s, employee satisfaction was

regarded as the sum total of reactions to the different

perceptions of what he or she wants to receive and what

he or she actually receives. In 2000 period, employee

satisfaction is considered as an opportunity for fair

treatment, respect, promotions, relationship with

colleagues, supervisors and work environment.

Employee satisfaction may be defined as all the feelings

that a given individual has about his or her job and its

various aspects.

According to Spector (1997) “Employee satisfaction

may be described as how pleased or happy an employee

is with his or her position of an employment.”

According to Mayo’s, Shoo and Newsome (2008)

“Employee satisfaction means to what extent employees

are contented with their job designs, positions, treatment

of management towards employees and overall work

environment.”

REVIEW OF LITERATURE

Balgir (1991) study shows that Herzberg’s

hygiene motivational factors based on need

priorities of the employees dominated them in

performing their jobs. Job satisfaction,

opportunities for promotion, satisfied personal

life, high status, social circles, pay structure, job

security etc. Are the motivational factors that

influenced employees on their job.

Sarri and Judges (2004) in their article,

highlighted on employee’s attitudes and job

satisfaction:The article has identified gaps

between the scientific research in the field of

employee attitudes in general and in particular-

job satisfaction ,the causes of employee attitudes,

the result of positive or negative job satisfaction,

methods of measuring attitudes and human

practices. Suggestions were also given how to

close gaps in knowledge and for implemented

practices in organisations.

Castro and Martin (2010), explored the

relationship between organisational climate and

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job satisfaction. Employee’s perceptions of work

environment also influenced the job satisfaction

levels. There was a positive relationship between

organisational climate and job satisfaction. To

engage employees in workplace job satisfaction

is a vital factor to be considered by the

organisations. If employees are not satisfied with

their jobs or work environment, no doubt,

performance of the organisation suffers a lot.

This paper is theoretical in nature and based on

secondary data (websites, journals, books)

FACTORS AFFECTING EMPLOYEE

SATISFACTION

Organisational success and productivity depends to a

large extent on the commitment of employees and job

satisfaction. For the growth of any organisation, it

becomes important to recognize the factors that aims at

improving employee’s performance, effectiveness and

productivity. There are a number of factors that affect

employee satisfaction levels in their workplace. Some

factors are discussed below:

Workplace Environment: Some friendly,

supportive, healthy, safe and attractive

surroundings result in the overall department of

employees and become a source of job

satisfaction. Working hours, cleanliness,

ventilation, temperature, lighting, spacious

rooms, cooperative colleagues and positive

attitude of superiors/seniors, proper training

facilities etc. Make the employees to carry out

their jobs in much easier way. A favourable and

optimal working condition in any organisation

contributes to job satisfaction of employees.

Breaking a monotonous work routine,

organisations can also introduce, fun day, picnic

or other get- togethers to make environment

more cool and less burdened.

Interpersonal Relations: Relationships or

communication levels among employees,

supervisors, employers and work groups play a

significant role in employee’s satisfaction.

Similar attitudes, values, mutual trust,

understanding and assistance also serve as a

major source of job satisfaction. Participation of

employees in decision making process also adds

to the conducive work environment. Supervisors

who listen to employee’s needs also improve

satisfaction levels on the jobs. Employees should

be motivated not to do their jobs or achieve

specific targets rather they should be given

opportunities to learn and for overall

developments.

Job Content: Interesting, challenging, role

clarity, freedom, autonomy, moderate workplace,

adequate responsibility, feedback etc. are the

factors that determine the level of the job

satisfaction, Comprehensive work environment

helps in maintaining a healthy communication

levels. Inviting fruitful ideas to make the jobs

more enriched, also brings a sense of

belongingness among employees.

Company Policies and Practices: To avoid

dissatisfaction and frustration among employees,

a liberal and fair job practices should be adopted.

A simple, fair and equal wage and salary policy

brings utmost satisfaction among employees.

Handsome salary packages bring more

contribution towards organisation effectiveness.

Open and democratic work environment, career

advancement opportunities and structural

policies also affect the job satisfaction of

employees. If the employees recognize the worth

of their employees, it will improve their

efficiency levels and boost the morale also.

Encouragement and appreciation from

supervisors, peer members, boss etc. leads to

higher job satisfaction levels and productivity. A

balanced approach to the monetary and non-

monetary incentives also proves to be

instrumental in achieving higher job satisfaction

levels. A caring organisation taking actions for

improving the standards of living and workplace

also creates higher satisfaction levels.

Age and Personality Traits: It is the presumed

on the basis of various research studies that job

satisfaction increases with the increase in age.

With age, people accept more challenging and

responsible jobs without any fear of insecurities

of future. Employees feel more empowered as

compared to younger employees. Maturity,

autonomous environment, self-confidence,

positive outlook, experience etc. personality

traits also lead to higher job satisfaction levels.

Sense of Belongingness, Leadership Styles and

Talent Improvement: Opportunities for

improving talent, skills and promotions are other

factors that bring job satisfaction. Making special

efforts to make employees to believe that they

are a part of the team of the organisation, there

are increased chances of job satisfaction.

Motivating employees, giving chances to take a

lead or initiate a challenging task, inviting

suggestions from every employee, brings more

loyalty and commitment from employees.

Keeping office politics and other malpractices

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out of work environment also results in good

bonding with superiors and colleagues.

Assurance of Safety and Security: Various

kinds of health, medical, insurance, safe

infrastructural facilities provided to the

employees by organisations also bring more

satisfaction levels in jobs. This also shows the

care taken by the organisations, bringing a sense

of safety and security on the jobs.

Complex and Challenging Jobs: Assignment of

more challenging tasks to the able and competent

employees raises the satisfaction levels and

develops more trust in their superiors. If the

employees are not given any kind of complex or

responsible tasks, they may feel less worthy or

doubt themselves about their efficiency levels.

Job enrichment, creativity at work, opportunities

for pursuing the hobbies etc. are other important

factors that bring happiness among employees.

Disciplined Workplace: Respect from peer

group, supervisors, superiors and management

creates a pleasant and harmonious work

environment leading to higher job satisfaction

levels. Conflict management, disciplinary and

caring work environment, rewards and incentives

for accomplishments, participative culture and

value system result in higher job satisfaction

levels.

Flexible Working Hours: Working hour

schedules as per the needs and desires of the

employees help in increasing the efficiency and

productivity of work. It leads to decrease in

stress levels among employees.

Effective Feedback Reports: Feedback on the

performance, behaviour and attitudes of

employees also helps in improving the job

satisfaction levels. Employees can also give

feedback about their co-workers, seniors and

work environments. Proper feedback system

helps in improving the skills and performance of

the employees.

APPROACHES TO EMPLOYEE SATISFACTION

Affect Theory: Edwin A Locke’s range of

Affect theory (1976), explains that job

satisfaction is the balance between what one

expects in a job and what one actually has in a

job. The theory also states that how much an

employee values certain factors of a job such as

autonomy, participation in decision making etc.

If expectations are not being met, to what extent

employee feels satisfied/dissatisfied.

Expectations and satisfaction levels vary from

one employee to another. This theory is also

known as discrepancy theory. An employee’s

satisfaction is the result from what they feel is

important rather than fulfilment of their needs.

Discrepancy occurs when employee receives less

than expectations.

The Fulfilment Theory: Robert H. Schaffer

(1953) gave a conceptual framework to job

satisfaction stating that fulfilment of the needs of

an employee in a job determines the

satisfaction/dissatisfaction levels. Job satisfaction

will vary directly to the extent, to which the

needs are actually satisfied.

Job Characteristics Model: Two organisational

psychologists Greg R. Oldham and J. Richard

Hackman in 1970’s developed and finalized in

1980’s- The Job Characteristic model.

Systematized and simplified jobs to maximise

productivity has not been materialized due to

increased employee dissatisfaction. Work design

or job design is aimed at satisfying the needs of

both the organisation and the employees. This

model helps to improve employee satisfaction

levels by adjusting jobs- that is how the attributes

of a particular job contributes to improve the

motivational levels of an employee. Skill variety,

task identity, task significance, autonomy and

feedback are the basic job characteristics leading

to different psychological states and outcomes.

Dispositional Approach: This theory states that

satisfaction levels on a job are also related to

some extent on individual’s traits. As research

has shown that identical twins brought up apart

have similar levels of job satisfaction. In 1997,

Timothy A. Judge, Edwin A. Locke and Cathy C.

Durham have proposed a core self-evaluation

model that determines one’s disposition towards

job satisfaction. Self-esteem, general self-

efficacy, locus of control, neuroticism are the

four core self-evaluation responsibility,

possibility of growth.

Two factor Herzberg Hygiene Theory:

Frederick Herzberg (1959) has explained that

motivational and hygiene factors are responsible

for satisfaction and dissatisfaction among

employees. If an organisation takes steps to

improve the motivational factors, then it will lead

to increase in job satisfaction. Whereas

improving the hygiene factors will result in

decreasing job dissatisfaction levels among

employees. Herzberg explained that these two

factors exist side by side. Only implementing one

factor may not bring satisfaction among

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employees. Encouraging employees really do

work, when the dissatisfactory factors-the

employees complain about, disappears. Extrinsic

factors also known as dissatisfiers or hygiene

factors are company policy and administration,

supervision, salary, interpersonal relations, job

security, working conditions and status whereas

Intrinsic factors or satisfiers or motivators are

achievement, recognition, advancement, work

itself.

CONCLUSION

Employee satisfaction is extremely important for any

organisation, as it directly impacts the performance,

productivity and retention levels. Management should

frame policies and strategies to strengthen the work

environment so that employees can give their best

performance to improve organisation’s status.

REFERENCES

1. Sarri, Lise M and Judge, Timothy A (2004), Employee

attitude and job satisfaction, Human resource management,

Vol.43, No.4, PP. 395-407, www.interscience.willey.com

2. Castro, M. And Martins, N(2010), The relationship between

organisational climate and employee satisfaction in a south

African information and technology organisation, SA

journal of industrial psychology, 36(1) http://www.sajip.za

3. Review of literature- Shodhganga

shodganga.inflibnet.ac.in>bitstre

4. Article: Why employee satisfaction is as important as

customer

satisfaction.......https://www.peoplematter.in>article>emplo

yee-relations>why-employees........March 27,2018.

5. Spector, P.E.,(1997) Job satisfaction: Application,

Assessment, causes and consequences. Thousand oaks, CA:

Sage

6. Moyes, G., Shao, L., & Newsome, M.(2008): Comparative

analysis of employee job satisfaction in the accounting

profession. Journal of business and economic research,

Vol.6(2), 65-81

7. Balgir, A S (1991) “ Factors for continued doing service of

Indian managers”, Indian Management, Vol.30

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ISSUE OF GENDER EQUALITY IN THE ERA OF GLOBALIZATION

Gurpreet Singh Uppal*, Gopal Krishan

**

*Assistant Professor, P. G. Dept. of Political Science, Khalsa College, Garhdiwala, Hoshiarpur, Punjab,

India

**Assistant Professor of Pol Sc., Gobindgarh Public College,Alour, Khanna, Punjab, India

ABSTRACT

This paper analyses the very crucial issue of gender equality in the era of globalization. Infact gender equality

debates have always remained at centre stage throughout the world This paper firstly conceptualizes the issue

of gender equality in general and thereafter in Indian perspective. Then discusses about impact of globalization

over Indian women in various perspectives.

Key Words- Globalization, Impact, Policies ,Women ,Religion

Social justice means that every individual is given full

opportunities to develop his capacities and the

opportunity is given to maximum number of person in

society. The creation of social justice means the creation

of an environment in which every individual has got

unreserved and unhindered opportunity for physical and

intellectual development. In removing disabilities arising

from sex, race, coloure, creed, religion or nationality, and

providing opportunities in a positive way with a view to

developing individual faculties lies the essence of social

justice.

India is plural society, multi-ethnic, multi-religious and

multi-linguistic for which democracy is most for

balanced social and regional development. However,

democracy cannot survive without social justice.

Unfortunately, new economic policy or globalization is

bereft of human face, where man is treated as commodity

and a person has to compete for the bread and business

equally on the ―Darwinian socio-economic order‖ i.e.

struggle for existence and survival of fittest. Whereas

democracy thrives on the co-operative spirit so that

strong and weak could survive and co-exist together like

tall trees small bushes and grasses growing in the same

socio-ecological plain. Therefore, before implementing

the new economic reform policies, it was essential for the

government to provide ―social security net . with the

passage of time the force of globalization and

marketisation have intruded into every sphere of human

life: to be urban or rural, poor or rich, literate or illiterate,

male or female etc. but when it comes to women, the

impact goes deeper and it touch our heart. Double

standard causes women in developing nations to develop

a double role of survival.

Globalization is like a tide that not lifted all women

equally. It is the process has brought prosperity for

women ,who are small in number educated, skilled ,elite ,

wealthy,socially,political and economic privileged have

access to capital, education,productive assets and

resources, but those who are already cash poor, socially

and political disadvantaged, before since they compelled

to operate in a more aggressive competitive environment

without any government support. It is clear that during

the process of globalization has not affected all the

women groups in the same way.

OBJECTIVE

Its aims to understanding changing status of marganlisied

women in globalization era. It tries to explore some of

the ways in which directly or indirectly, it impacts

everyday life of Indian women. One must keep in mind

that women are not a homogeneous category. While

united as a gender, they are also divided by class,

ethnicity, religion, age sexual preference and ideology.

Therefore the impacts of globalization on women need to

be analyzed in the light of these differences. Because of

these difference, the impact of globalization are felt quite

differently on women .

RESEARCH QUESTION

Keeping these things in mind, the present paper tries to

access What are the socio-economic, commercial,

environmental and cultural effects of globalization on

poor women in India ?

RESEARCH METHODOLOGY

The present article has been prepared on the basis of

reliable secondary data. The research used various books,

journals, documents and other available written

materials.

IMPACT OF GLOBALISATION ON POOR

WOMEN

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Gender equality is critical to the development process.

The process of globalization may have resulted in new

avenues of growth, but due to unequal distribution of its

benefits women have been adversely affected in many

cases. It calls for creating opportunities for women to be

part of this development process. Merely enacting

legislation will not help. What is required is its proper

implementation. Despite the positive effects of

globalization through increased employment

opportunities for women, globalization has a darker,

more sinister side. Out of the total 397 million workers

in India, 123.9 million are women and of these women

96% of female workers are in the unorganized sector.

Accordingly, although more women are now seeking

paid employment, a vast majority of them obtain only

poorly paid, unskilled jobs in the informal sector, without

any job security or social security. Additionally working

women in India are more likely to be subjected to intense

exploitation; they are exposed to more and more risks

that cause health hazards and are forced to endure greater

levels of physical and mental stress. Thus it would

appear, that globalization has made many international

corporations richer by the billions at the expense of

women who are suffering enormously due to this

expansion of corporate empires. Among the workers in

the informal sector a large number of them are women,

who have no job security. They are often unskilled

workers who receive low wages. Availability of work is

irregular; and when work is available, women must work

long hours. It is not only in the unorganized sector or in

small enterprises, but also in the modern sectors like the

Information Technology and the automobile sectors

where working women are forced to work for 12 hours

while the local governments ignore this open flouting of

the labor laws.5 The uncertainties of obtaining work and

the dire need to retain a position in the midst of intense

competition cause mental tension, strained social

relationships, psychological problems and chronic

fatigue, all of which are difficult to prove as work-

related.

The advent of assembly line jobs and the increased use of

machinery has resulted in a degradation of working

conditions for women in India. For example, piece rated

work, where assembly line workers are paid per piece

produced, contributes significantly to the level of fatigue

felt by the workers. The wages of piece rated workers

depend on the speed with which they work. When a

person‘s compensation is tied to increased physical

output, negative health consequences will almost

inevitably ensue. While women working in piece meal

industries have seen machines negatively impact their

health, women in other sectors have lost their jobs as a

result of technological advances. For example, several

traditional industries where women work in large

numbers like handloom and food processing have

undergone changes in the forms of production with the

introduction of machines, power looms etc, which have

result in the loss of employment for large number of

women.

Unemployment, underemployment and temporary work

are more common among women than among men. This

subset of workers does not have any social security or

health care benefits. As a result, the work-related

illnesses, which they suffer from, remain

hidden. Furthermore, long-term unemployment

constitutes a serious risk for the worker‘s emotional

stability, because it leads to poverty and deteriorates self-

image and self-esteem.

Though more and more women seek paid employment,

the stereotypical attitude towards women and their

perceived role in the familial hierarchy has not

undergone much change. Women continue to be

perceived as weak, inferior, second-class citizens. For

working women, this discrimination is extended to the

workplace also. The improper and insufficient dietary

intake along with the heavy workload results in

nutritional disorders. In addition, this perception that

they alone are responsible for the domestic work, leads to

a feeling of guilt when they are not able to look after the

children or family members due to their official work,

often resulting in emotional disorders. Women are

suffering two fold. As women in developing countries

move into the work force, their domestic responsibilities

are not alleviated. Women work two full time jobs. One

in a factory, where they are paid next to nothing, the

second is in the home where they are paid nothing. In the

rural sectors, women have been independent and strong-

headed. They have been the primary breadwinners in

several cases. The society does want to accept this truth

where women can be self-sufficient and need not rely on

men for their survival. However, the traditional roles

continue to influence our worldview and we continue to

believe that women are oppressed. They are in ways that

are characteristic of patriarchal societies. It is not

asserting that women are free and empowered but

certainly offering a fresh perspective that conveys to the

western reader that women in the rural dwellings are

more capable of taking care of themselves than in urban

cities.

Globalisation has had adverse effects on women

especially in the developing countries. As consumers,

women are increasingly facing a consumer culture which

reduces them to commodities and as producers; women

are exposed to work exploitation and occupational

hazards. Owing to their many roles, as would-be

mothers, as mothers responsible for the health of their

children and families, as working women at home and

outside they are major consumers of healthcare products.

In recent years a serious issue has come to light where

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many products related to women‘s health, found to be

dangerous and banned or restricted in the developed

countries, were marketed in the developing countries.

Agriculture is the main employer of women informal

workers. 75% of the total female workforce and 85%

of rural women are employed in agriculture as

wage workers or workers on own/contracted

household farms. But, even with increasing feminization

of agriculture, few women have direct access to

agricultural land affecting their ability . The traditional

role of women in agriculture, livestock and animal

husbandry, khadi and village industries including

handicrafts, handlooms fisheries, etc. is being

undermined because mechanization and automation is

becoming prevalent in the market based economy which

will adversely affect the village-based traditional

economy. With male migration on the increase from the

rural to urban sectors, the women have to bear the triple

burden of caring, farming and paid employment in the

rural sector. Migration of women especially for economic

reasons often gives rise to exploitation and trafficking in

women at the local, regional and global levels. Basically,

Liberalization and Globalization of the Economy will

marginalize majority of women in India due to reduction

of employment opportunities, reduction of wages,

casualisation of jobs and women workers, execution from

the modernized production process due to lack of

education and training.

Globalization has a wide role to play worldwide. It has

left back its footprints at every sphere of life. Not only in

India, but the interchange of world views and ideas has

resulted in a major transformation of the lifestyle and

living standard of people globally. Indian culture is no

bar to this transformation process. Our deep rooted

traditions and customs have loosened up their hold with

the emergence of globalization. The joint families have

become a strange surprise to the Indians especially to

those residing in the metropolitan cities in the small flat

culture with the nuclear families blooming up like

mushrooms in the rain. We have lost the patience to get

adjusted into the joint family, imbibing the values of the

elders and getting the young ones brought up under the

shadow of their grandparents. Children have started

treating grandparents like guests or visitors, and such an

upbringing is one of the main reasons of increasing old

age homes, as those children consider their own parents

as burden in their state of adulthood. In such situation

women feel insecure and double burden of family work.

Similarly, marriages have also lost their values. It is very

much evident from the increasing number of divorce

cases and the extra-marital affairs reported every now

and then. Marriage used to be considered as bonding of

the souls which will be linked even after the death; but

today marriage is like a professional bond or a so-called

commitment to share life without compromising their

self-interests. The ego factor into the Indian youth is

again a product of globalization.

Market driven globalization process has also affected

women respect ,which is increasingly being

commercialized and commoditized. The woman as an

object of desire is so promoted by media and culture that

women have to go to extreme lengths to look like the

prescribed ―body‖. The cosmetic industry thrives on this

insecurity. It promotes notions of ideal body

shape. Women and their body parts sell everything from

food to cars. Popular film and television actresses are

becoming younger, taller and thinner. The adjectives

used are taken to be metonymies‘ – saying one is to

imply all the others, by the logic of this sign system that

groups itself around the figure of woman. This serves to

confine feminism into a single seamless totality, an

adjective rather than a form of praxis, Women have

always received contradictory messages about their

bodies. Trafficking of women and children for

sexual exploitation therefore needs to be understood

within the processes of gendered labor and migration

patterns that have arisen under conditions of

globalization. State does not own any major social

responsibility primarily of health care and Old age it is

the family which takes care of the individuals in times of

crisis. Today there is a disintegration of traditional family

ties and the support structure provided by the family and

hence with this break up and migration to urban areas

many young women fall into the hands of traffickers with

a rosy picture of a secure livelihood for future. The

growing casualization of female labor in recent years is

in fact one major factor that is seen to have increased the

vulnerability of women to trafficking. With the erosion

of traditional livelihood options and increasing

feminization of poverty, and accompanying changes in

social and cultural relations, including the pursuit of

alternative livelihood options by women themselves, they

become prime targets of traffickers who offer them an

escape from their situation with promises of

opportunities for a better life elsewhere. The worst

victims have been those with less status, less education

and skills and limited work options — particularly

women and girls from among landless and small farmer

families or a lower caste background

CONCLUSION

Globalization has‖ reduced the ability of women… [in

developing nations]…to find paid work that offers

security and dignity‖. Although women‘s roles in the

labor force have changed from traditional agricultural

and domestic roles, to manufacturing and assembly

production, the overall effect of globalization (based on

the literature used in this analysis) has proven to be

negative. There are empirical claims of women gaining

more autonomy over their own wages and a feeling of

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independence from traditional gender roles in society-

especially in marriage and childrearing. Women are also

becoming the breadwinners in most households because

of the lack of male responsibility in the household.

Young daughters are financially supporting their parents

and fellow siblings, while mothers (married or single) are

seeking informal work to provide for their children.

Globalization has changed the intrahousehold

responsibilities for males and females, where females are

given more responsibility over the survival of the family.

Males are no longer the providers- yet they have more

opportunities for financial and social advancement in

society. Female labor is not rewarded in relation to the

impact they have on society. Therefore, women‘s work

continues to be stigmatized as inferior, in comparison to

males work, regardless of their increased responsibilities

in society. The establishment of various NGOs around

the globe and the collaborative efforts of these

organizations have improved the lives of women in

developing nations. The U.N. Decade recognized the

importance of female labor in developing nations and the

fact that economic policies fail to address the needs of

females. Representatives from NGOs agreed that global

feminism should be established to reduce the inequality

facing women in these nations and to improve the

advancement of women in society. The economic

policies and structural adjustments associated with

globalization create the most negative impact on women

in the developing world. The denial of social and

economic rights is the most inhumane aspect associated

with the formal and informal sectors. Economists and

policy makers who implement these adjustments need to

consider the impact of the current policies on women‘s

lives and the inequalities that exist between men and

women. Without these changes, women will continue to

suffer in their subordinate positions within the economic

market.

REFERENCES

1. Yerankar,shiram,‖Social Justice in Indian

Context‖,Yojana,April, 2011

2. Bhasin,Kamla,‘‘Women Empowerment in Indian Context

‗‘,Yojana,September,2016,pp.7-11.

3. Singh ,Nirmala & Rohil Ahmed ,‖Muslim Women and

Human Rights, The Indian Journal of Political

Science,Vol.LXXIII,No.1,Jan-March,2012,pp.73-84.

4. Beniwal,Anju,‖ Gender discrimination and Empowerment

of Women in India: A View‘‘, Indian Journal of Social

Science,Vol.LXXIV,No.1,January-March,2013,pp.27-38.

5. Lata,Prem&Balbir Singh, ―Empowerment Tribal Women in

Himachal Pradesh,‘‘ Third Concept,Vol.28,No.332

,October,2014,pp-57-58.

6. Bansude, Chadreshekhar, ―Women and Human Rights,

Third Concept,Vol.29,No.344,October,2015,pp-34-37.

7. .Dalawai,Ravi S.,‖Changing Status of Women in India,

Third Concept,Vol.29,No.345,November,2015,pp.16-19.

8. Ketaki,Kalinga,‖Women Empowerment-A Global

Comparison, Third

Concept,Vol.29,No.345,November,2015,pp.30-32.

9. .Mall,Sangeeta,Women World: Women‘s Civil and Political

Rights‖,Mainstream,December,27,2003,pp.95-99.

10. .Singh,Pragya,‘‘Crossing The Ravana Rekha, Outlook,

Vol.LVII,No.43,October,2017,pp 42-46.

11. .Pankajam,G.,‖Empowerment of Women: A Realistic

Approach‖, in Eelected Women Representative And

Empowerment ‖,G.Palanithurai(ed.),Concept Publishing,

New Delhi,2012.pp.111-116.

12. Parida,Jayanta,‖GlobalisationAand Its Impact on Women-

An Assessment‖, The Indian Journal of Political

Science,Vol.LXXII,No.2,April-june,2011,pp-429-435.

13. Kaur,Manvinder & Ameer Sultana, Gender Realities,

Abhishek Publications, Chandigarh, 2005.

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CUSTOMER SATISFACTION TOWARDS DEMAT ACCOUNT IN REAL VALUE

RELIANCE MONEY PVT. LTD

Shalini Sharma*

*Student, A.S. College, Khanna, Punjab, India

ABSTRACT

Customer satisfation is an important factor used to motivate the company to work harder.Every organization is

ready to pay any means to identify and understand the customers and their needs. It is a good reaction of the

shoppers once their needs and expectations are either met or exceeded within the course of experiencing the

service. A highly satisfied customer has better feebacker of your company. The study tries to evaluate how the

services factors affect the satisfaction level of custome towards demat account in Real Value Reliance Money

Pvt. Ltd. It also assesses how various factors affect the satisfaction level of customer. It will happen whether or

not or not a company's management is proactive, reactive or passive regarding the on-going method of

evolving a grip. But a company can positively influence the perceptions through enlightened strategic

actions.The study also attempts to finding the challenges faced by customer among demat account and provide

some suggestions to the company regarding this.

Keywords: Customer satisfaction, expectation, motivate, promotion, services.

INTRODUCTION ABOUT CUSTOMER

SATISFACTION

It is no doubt that human beings are important assets of

an organization. Whether the customer is satisfied after

investing depend on the expectation. In general

satisfaction could be a person's feelings of enjoyment or

disappointment ensuing from examination the services

perceived performance regard to his/her expectations.If

the performance falls in want of expectation, the

customer is dissatisfied. If the performance matches the

expectation client is glad. If the performance exceeds the

expectation the client is extremely glad. Customer

satisfaction cannot be very difficult. After all you either

glad with the services you receive otherwise you don't

seem to be. If you don’t you are not. If it's that simple,

then obtaining people's opinion about how satisfied they

are with relatively straight forward matter- or is it?.

Customer satisfaction is a marketing tool and a definite

value addad benefit. It is usually perceived by customers

as necessary because the primary productor service your

organisation offers. Finally it considers the problem from

the angle of customers World Health Organization

participate in surveys, together with each

businesscustomers and members of general public.

INTRODUCTION ABOUT REAL VALUE RELIANCE MONEY PVT. LTD.

Company name Real value reliance money Private Limited

Company status Active

RoC RoC- Mumbai, India

Area served India

Class of company private

Date of incorporation 17-june-2005

Company sub category non- government company

Activity Asset management, insurance, broking and distribution, commercial

finance.

MEANING OF CUSTOMER SATISFACTION

Customer satisfaction could be a business term, could be

a live of however product and services equipped by an

organization meet or surpass client expectation. It is seen

as a key performance indicator inside business and a part

of the four prospective of balancedscore card. In a

competitive market place were businesses compete for

customers, customer satisfaction is seen as a key

differentiator and increasingly has become a key element

of business strategy. customer satisfaction drives in non-

public sector business.High performing arts businesses

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have developed principles and methods for achieving

client satisfaction.

This paper presents a framework or set of ideas for

victimization client satisfaction principles and methods to

boost the standard responsiveness,and chance of public

sector in private provided services in vulnerable

communities.

FACTORS INFLUENCING JOB SATISFACTION

IN SHREE GANESH EDIBLE PVT. LTD.

Price

Sevice quality

Brand/image

Customer expectations

Customer relationship

Trustwotheness

Quick services

Situational factors

Personal factors

REVIEW OF LITERATURE

Walia Nidhi (2007): Found Indian investors are more

conservative: they do not adopt any change easily. Till

now just few investores can be recognized who are using

technology for online stock trading. Traditional traders

still perfect to choose broker online trading empowers

educated investores to make own decisions with close

watch on market sensitivity by browsing through various

sites.

Kumar Ajay (2008): Through this analysis finds that

workplace folks like and to figer out what folks like

whereas investment available market. Main purpose of

investment is returns and liquidity , commodity market is

less preferred by investors due to lack of awareness. The

major findings of this study are that people are intersted

to invest in stock market but they lack knowledge.

Walia Nidhi (2009): Explores that IT fueling economy,

internet is adopted as effective tool in catalyzing the

business activities. As financial system is becoming more

complex it has become need of hour, where investor

should comprehend the data and understand recent

intricacies of online trading.In Indian context, e-trading is

relatively new construct, which has yet to gain some

significant meaning. In the past, capitalist had no choice

to get market data except to contact native broker.But net

mercantilism available mercantilism is changing into

medium of exchange whereby capitalist will order stock

market on easy click sitting at his place.

RESEARCH METHODOLOGY

OBJECTIVES

1. To study the satisfaction level of customers with

respect to gender.

2. To study the satisfaction level of customer with

respect to income.

3. To study the satisfaction level of customers

among trading/demat account.

Research design Descriptive

Primary data collection Through structured questionnaire, interview and discussion method

Secondary data collection Through text books, journals, record of Real Value , academic reports,

internet

Sampling method Convenience sampling

Sampling size 50

Scaling technique 5 point Likert scale, percentage method

Statistical tools Chi- Square test

DATA ANALYSIS AND INTERPRETATION

Table 1

Showing data on the basis of gender

SEX NUMBER OF RESPONDENTS PERCENTAGE (%)

Male 35 70%

Female 15 30%

TOTAL 50 100%

Table 1 depicts that out of 50 employees in the company, there are 70% male and 30% females are to be taken for the

study.

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HYPOTHESIS 1:

H0: Let us take null hypothesis that there is no significance difference between gender and overall satisfaction

level of customsers.

Highly

Satisfied

Satisfied Neutral Dis- Satisfied Highly

Dis-Satisfied

Rows Total

Male (observed) 5 10 5 7 3 30

Female (observed) 5 5 0 3 7 20

Column total 10 15 5 10 10 50

MALE CHI- STATS

Highly satisfied Satisfied Neutral Dis- satisfied Highly dis-

satisfied

Males

(expected)

6 9 3 6 6

(O-E) -1 1 2 1 -3

(O-E)² 1 1 4 1 9

(O-E)²/E 0.1666667 0.1111111 1.333333 0.1666667 0.1666667 1.944444

FEMALE CHI- STATS

Highly

satisfied

Satisfied Neutral Dis- satisfied Highly dis- satisfied

Female (expected) 4 6 2 3 4

(O-E) 1 -1 -2 -1 3

(O-E)² 1 1 4 1 9

(O-E)²/E 0.2 0.2 1.333333 0.1666667 1.285714 2.015714

Chi- squared statistic 3.960158

Degree of freedom 4

Level of significance 0.05

Critical value 9.488

As the chi- statistics (3.960158) is smaller than the

critical value (9.488) at degree of freedom= 4 and level

of significance= 0.05, hence our hypothesis is accepted.

Therefore, gender and overall satisfaction level are

independent.

Table 2

Showing Income level

INCOME NO. OF RESPONDENTS TOTAL

<10,000 17 34%

10,000-50,000 21 42%

50,000-1,00,000 12 24%

TOTAL 50 100%

Table 2 shows that out of 50 respondents, 34% customers

getting income <10,000. 42% customers are those who

are getting income between 10,000-50,000 and 24%

customers getting income between 50,000-1, 00,000.

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HYPOTHESIS 2:

H0: Let us take null hypothesis that there is no significance difference between income and overall satisfaction

level of customers.

INCOME HIGHLY

SATISFIED

SATISFIED NEUTRAL DIS SATISFIED HIGHLY DIS

SATISFIED

TOTAL

<10,000 4 8 2 3 0 17

10,000-50,000 3 7 5 4 2 21

50,000-1,00,000 1 3 2 6 0 12

TOTAL 8 18 9 13 2 50

WHEN INCOME IS <1O, OOO

Highly satisfied Satisfied Neutral Dis- satisfied Highly dis-satisfied

Income

(expected)

2.72 6.12 3.06 4.42 0.68

(O-E) 1.28 1.88 -1.06 -1.42 -0.68

(O-E)² 1.6384 3.5344 1.1236 2.0164 0.4624

(O-E)²/E 0.60235 0.5775 0.36718 0.456199 0.68 2.683229

WHEN INCOME IS 1O, OOO-50,000

Highly satisfied Satisfied Neutral Dis- satisfied Highly dis-

satisfied

Income

(expected)

3.36 7.56 3.78 5.46 0.84

(O-E) -0.36 -0.56 1.22 -1.46 1.16

(O-E)² 0.1296 0.3136 1.4884 2.1316 1.3456

(O-E)²/E 0.03857 0.04148 0.39375 0.39040 1.60190 2.4661

WHEN INCOME IS 50,000-1, 00,000

Highly satisfied Satisfied Neutral Dis- satisfied Highly dis-

satisfied

Income

(expected)

1.96 4.32 2.16 3.12 0.48

(O-E) -0.96 -1.32 -0.16 2.88 0.48

(O-E)² 0.9216 1.7424 0.0256 8.2944 0.2304

(O-E)²/E 0.47020 0.40333 0.011851 2.6584 0.48 4.01193

Chi- squared statistic 9.461259

Degree of freedom 8

Level of significance 0.05

Critical value 15.51

As the chi- statistics (9.461259) is smaller than the

critical value (15.51) at degree of freedom= 8 and level

of significance= 0.05, hence our hypothesis is accepted.

Therefore, income and overall satisfaction level are

independent.

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Table 3 Showing level of Satisfaction towards demats account

Table 3 Showing level of Satisfaction towards demats

account.

LIKERT SCALE VALUE=3.36

According to likert scale, the mean rate is 3.36. So, the

respondents are highly satisfied with customer demat

account.

Table 3 shows that from 50 respondents 22% are highly

satisfied, 26% are satisfied, 30% are neutral, 10% dis-

satisfied and 12% are highly dis satisfied.

FINDINGS

Customers are satisfied with their income pattern.

Almost all the customers are satisfied with the demat

account of the company.

Equal participation of males and females in opening

demat account of the company.

SUGGESTIONS

Proper guidelines and information about demat account

must be provided by the company to their customers.

Build relationship with the customer to keep them

retained.

Customer Care Service should have to make more

sensible and efficient.

CONCLUSION

Findings and suggestions are based on the survey

conducted and these points are to be looked into and

steps are to be taken in this regards for higher growth.

From this analysis, I conclude that the expectations of

cutomers are increasing becuase of the increasing

competetion and emergence of global market. In such

conditions it becomes very necessary for a company to

fulfill all the expectations of cutomers and give them a

delightfull experience. Reliance money aim to provided

better services consistently improvement. That analysis,

it was also observed that there is a scope for the

improvement of to aware customers about demat account

in REAL VALUE RELIANCE MONEY COMPANY.

Finally, I would like to conclude that the customers of

this company are satisfied with the services provided by

company.

REFERENCES

1. Ravinder Kumar and Nidhi Walia, Online Stock Trading

in India an empirical investigation ", Indian Journal of

marketing. April 2007, page 34 - 39.

2. Mr. Ajay Kumar," Comparison of slock brokers in India,

Indian Journal of Business, Julie 1999, page 93 - 96.

3. Nidhi Walia, Online Stock Trading in India on the road of

progress, Applied finance, March 2004. Page 21 - 26,

LEVEL OF SATISFACTION TOWARDS

DEMAT ACCOUNT

NO. OF RESPONDENTS PERCENTAGE (%) WEIGHTED MEAN

Highly satisfied 11 22% 5*22=110

Satisfied 13 26% 4*26=104

Neutral 15 30% 3*30=90

Dis – satisfied 5 10% 2*10=20

Highly dis - satisfied 6 12% 1*12=12

TOTAL 50 100 336/100=3.36

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CONSUMER PURCHASE BEHAVIOR REGARDING PERSONAL CARE

PRODUCTS: A COMPARATIVE STUDY AMONG RURAL AND URBAN

CONSUMERS OF PUNJAB

K K Sharma* , Monika Jindal

**

*Associate Professor, A S College Khanna, Punjab, India

**Assistant Professor,A.S.College for Women, Khanna, Punjab, India

ABSTRACT

Consumer behavior is a very complex process as there is presence of different determinants of human

behavior. Consumer behavior is the study of different processes which takes place between individuals or

groups while selecting, purchasing, using or disposing of the product in order to satisfy their needs. The

objective of the study is to make comparison of consumer purchase behavior regarding deceptive

advertisements among rural and urban consumers. For achieving this objective 305 respondents each from

rural and urban areas were interviewed for the study. The data were collected on a specially structured pre-

tested questionnaire from the respondents through personal interview method. The data were analyzed by using

chi-square test, t-test.

Key Words: Advertising, Consumer behavior.

INTRODUCTION

Consumer behavior is defined as "study of the processes

involved when people select, purchase, use, or dispose of

products, ideas, or experiences to satisfy needs and

desires"(Boveé, Arens, 1989). Customers are people who

buy or use product or adopt ideas that satisfy their needs

and wants..Consumer behavior is a very complex process

as there is presence of different determinants of human

behavior. Consumer behavior is the study of different

processes which takes place between individuals or

groups while selecting, purchasing, using or disposing of

the product in order to satisfy their needs. As a marketing

concept the term consumer refers to not an act of

purchase for itself but refers to different patterns of

aggregate buying including pre purchase and post

purchase activities. Pre-purchase activities involve

motivation, perception etc. which has significant impact

on purchase behavior. It also includes search of various

alternatives and their evaluation in light of some

subjective or objective factors. Post-purchase activities

include an evaluation of the product used by the

consumer and the analysis of state of cognitive

dissonance. So purchase and repurchase activities affect

differently in varying degrees to marketer. Engel, et al.

(1986) define consumer behavior as “those acts of

individuals directly involved in obtaining, using, and

disposing of economic goods and services, including the

decision processes that precede and determine these

acts”. Complexity of consumer behavior cannot be

understood by simple observation, there is a need to learn

their instincts in advance and behave accordingly for

better implications of results. So Behavioral researchers

are providing with more reliable concepts and modified

methods of investigation in order to fully understand and

predict their behavior more effectively.

REVIEW OF LITERATURE

Jaspal, Namrata, (2011)have explored the impact of

television commercials on the social and moral behavior

of viewers. The study focuses on the sample size of 520

respondents from India and used survey technique. The

study analyzed multiple factors by using regression

method. The results of the study show that

advertisements easily influence many viewers against

their cultures and manipulate individual‟s behavior. The

implications of future study show that there is a need of

involvement of greater law.

John, Rosemary, Matthew, (2011) have revealed that the

weight loss advertisements affect the consumers

negatively due to its product‟s consumption. The area of

study confined to America and sample size of sample

size of 50 respondents were used. The research carried

out on females. The study has taken multiple factors, and

applied correlation and regression method. The results

show that there is great impact of advertisements on less

educated females than better educated females.

Muhammad Wasim,Wajahat, (2011)studied about

presence of unethical material in advertisements and

there may be creation of greater disorder in society. The

research carried out on respondents of Pakistan and

focused upon qualitative research approach. The study

finds that there should not be single motive that is to earn

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money and having no right to mislead consumers. The

implications for future study show that there is a greater

need to follow code of ethics and no exaggerations about

the product should be followed.

Ajay Vasanthi, (2014)has examined the perception of

consumers towards advertising. The study focuses on

adolescents and focuses upon FMCG sector. The

research carried out in India and used qualitative

approach. The survey method was used on 20-25 families

of middle aged group. The study depicted that near about

half of the advertisements are using unethical ways of

promoting the product and adolescents are easily misled

by the advertisers.

Imran, (2014)has presented that deceptive advertising

performs persuasive function and binds the consumers to

purchase their products, there is a greater use of false

strategies for selling their products. The study focuses on

the sample size of 100 respondents from India. The study

tests multiple factors by using chi-square test. The

findings of the study show that females make their

purchasing decisions by relying upon TV advertisements

and word of mouth. Whereas youngsters age group more

prefer impulsive purchase.

Heru, (2015) has analyzed that there is an impact of

customer‟s affected behavior on customer‟s attitude

towards organic food. The research carried out in

Indonesia with a sample size of 200 respondents and

used qualitative approach. The study focuses on the

sample size of 200 respondents from Indonesia. The

study tests multiple factors by using regression method.

The results find that there is a positive relationship

between consumer‟s attitude and purchasing of organic

food. The respondents who are conscious about health

show that there is difference in male and female

purchasing organic food. The implications for future

study show that marketers should come forward to

motivate the customers to purchase organic food by

putting more stress upon pros of organic food for their

health.

RESEARH QUESTION

1. To find out the Influence of Different Attributes

of Product on Purchase of Personal Care

Products.

2. To find out the decision-Maker in family for

Purchase of Personal Care Products.

3. To examine the reasons for delay between

purchase decision and the actual purchase.

RESEARCH METHODOLOGY

Punjab has been divided into 3 socio-cultural regions i.e.

Malwa, Majha and Doaba region. Out of 22 districts in

the state, 14 districts fall in Malwa region, 4 districts

each in Majha and Doaba region. Keeping in view the

variation in number of districts in the three regions, 2

districts from Malwa region and 1 district each from

Majha and Doaba region were selected having highest

population in the respective region. One block from each

selected district and 2 villages from each selected block

were selected randomly. The district cities also became

the part of the study sample. A sample of 300

respondents from rural areas and an equal number from

urban areas was planned to be selected. However, 305

respondents each from rural and urban areas were

interviewed for the study. The data were collected on a

specially structured pre-tested questionnaire from the

respondents through personal interview method. The data

were analyzed by using Kendall‟s Coefficient of

Concordance (K-W), chi-square test, Z-test, t-test and

factor analysis.

ANALYSIS OF DATA

The consumer behavior towards personal care product

was examined by observing the opinion of consumers

about their preference for different attributes of products,

decision-maker in the family, their level of agreement on

different statements related to the consumer behavior,

factor analysis of statements related to the consumer

behavior and comparison of factors between rural and

urban consumers..

Influence of Different Attributes of Product on

Purchase of Personal Care Products

The respondents were asked to rank different attributes of

product as per the influence of attributes on consumer

purchase behavior for personal care products. The mean

rank score for each attribute was worked out and on the

basis of mean rank scores, overall ranking pattern was

determined. The overall ranking pattern for different

product attributes was tested for its concordance between

rural and urban customers with the help of Kendall‟s

coefficient of Concordance i.e. K-W. The results so

obtained have been presented in Table 1

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Table 1: Mean rank score assigned to different attributes of the product as per their influence

Attribute of Product Rural Urban

Mean Overall Mean Overall

Brand Name 3.23 4 3.18 4

Features 2.56 2 2.53 1

Price 2.93 3 2.95 3

Store Layout 5.33 6 5.46 6

TV advertisements 2.51 1 2.55 2

Packaging 4.54 5 4.34 5

K-W 0.971 chi-sq. 9.71**

It is clear from Table 1 that in rural areas the mean rank

score was lowest to the tune of 2.51 for TV

advertisements, followed by 2.56 for product features,

2.93 for product price and 3.23 for brand name. The

highest mean rank score came to be 5.33 for store layout,

followed by 4.54 for packaging. In urban areas, the

lowest mean rank score was 2.53 for product features,

followed by 2.55 for TV advertisements, 2.95 for price of

the product and 3.18 for brand name. The highest mean

rank score was 5.46 for store layout, followed by 4.34 for

packaging.On the basis of mean rank scores, in rural

areas, 1st rank was secured by TV advertisements, 2

nd by

product features, 3rd

by product price, 4th by brand name,

5th by packaging and 6

th by store layout. This indicated

that first two influencing attributes emerged as TV

advertisements and product features, while store layout

and packaging emerged as the least influencing attributes

for the rural consumers. In case of urban consumers, 1st

rank was secured byproduct features, 2nd

by TV

advertisements, 3rd

by product price, 4th by brand name,

5th by packaging and 6

th by store layout. This indicated

that first two influencing attributes emerged as product

features and TV advertisements, while store layout and

packaging emerged as the least influencing attributes for

the urban consumers.It can be observed that, by and

large, the overall ranking pattern was similar in rural and

urban areas. This finding was also confirmed by the

significant value of K-W, which indicated that there was

significant concordance regarding influence of different

attributes on purchase behavior of rural and urban

consumers.

2 Decision-Maker for Purchase of Personal Care

Products

The distribution of respondents according to the

decision-maker in the family for purchase of personal

care products has been shown in Table 5.2.

Table 2: Decision-maker in the family for purchase of personal care products

Decision-Maker Rural Urban

No. %age No. %age

Self 168 55.08 188 61.64

Family Members 127 41.64 117 38.36

Children 3 0.98 0 0.00

Others 7 2.30 0 0.00

chi-square value

12.58** d.f.=2 YC

A perusal of Table 2 showed that in highest proportion

i.e. 55.08 percent of the families of rural customers, the

respondent itself was the decision-maker for purchase of

personal care products, followed by family members

(41.64%). In 0.98 percent of rural families, children were

found to be decision makers for purchase of personal care

products, while the other persons were the decision-

makers in 2.30 percent of rural families. The Table

further showed that in urban families the respondent,

itself, was the decision-maker in 61.64 percent of

families, while in the remaining 38.36 percent, family

members were the decision-maker for purchase of

personal care products. Children and other persons were

nowhere to make decisions for purchase of personal care

products.The pattern of decision-maker significantly

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differed in rural and urban families as indicated by the

chi-square value of 12.58.

3 Reasons for Delay between Purchase Decision and

Actual Purchase

It often comes to the notice that consumers make

purchase decision for personal care products, but they do

not purchase the products at the same time. There occurs

a delay between the purchase decision and actual

purchase. The reasons working behind this delay have

been given in Table 4.3.

Table 3: Reasons for delay between purchase decision and the actual purchase

(Multiple Response)

Reason Rural Urban

Z-value No. %age No. %age

Financial Constraints 235 77.05 124 40.66 9.13**

Waiting for more innovative product 111 36.39 103 33.77 0.68

Waiting for market response 164 53.77 155 50.82 0.73

The Table clearly showed that in rural families, the main

reason for delay between purchase decision for personal

care products and actual purchase was financial

constraints as reported by 77.05 percent of the

respondents, followed by their wait for the market

response (53.77%) and their wait for more innovative

product (36.39%). In urban families, the main reason for

delay between purchase decision for personal care

products and actual purchase was their wait for the

market response as reported by 50.82 percent of the

respondents, followed by financial constraints (40.66%)

and their wait for more innovative product (33.77%). The

analysis revealed that financial constraints were

significantly higher among rural consumers as compared

to that among urban consumers of personal care products

as indicated by the Z-value of 9.13.

FINDINGS

In rural areas the mean rank score was lowest to

the tune of 2.51 for TV advertisements, followed

by 2.56 for product features, 2.93 for product

price and 3.23 for brand name. The highest mean

rank score came to be 5.33 for store layout,

followed by 4.54 for packaging.

In urban areas, the lowest mean rank score was

2.53 for product features, followed by 2.55 for

TV advertisements, 2.95 for price of the product

and 3.18 for brand name. The highest mean rank

score was 5.46 for store layout, followed by 4.34

for packaging.

On the basis of mean rank scores, in rural areas,

1st rank was secured by TV advertisements, 2

nd

by product features, 3rd

by product price, 4th by

brand name, 5th by packaging and 6

th by store

layout. This indicated that first two influencing

attributes emerged as TV advertisements and

product features, while store layout and

packaging emerged as the least influencing

attributes for the rural consumers.

In case of urban consumers, 1st rank was secured

byproduct features, 2nd

by TV advertisements, 3rd

by product price, 4th by brand name, 5

th by

packaging and 6th by store layout. This indicated

that first two influencing attributes emerged as

product features and TV advertisements, while

store layout and packaging emerged as the least

influencing attributes for the urban consumers.

The highest proportion i.e. 55.08 percent of the

families of rural customers, the respondent itself

was the decision-maker for purchase of personal

care products, followed by family members

(41.64%).

In urban families the respondent, itself, was the

decision-maker in 61.64 percent of families,

while in the remaining 38.36 percent, family

members were the decision-maker for purchase

of personal care products.

In rural families, the main reason for delay

between purchase decision for personal care

products and actual purchase was financial

constraints as reported by 77.05 percent of the

respondents, followed by their wait for the

market response (53.77%) and their wait for

more innovative product (36.39%).

In urban families, the main reason for delay

between purchase decision for personal care

products and actual purchase was their wait for

the market response as reported by 50.82 percent

of the respondents, followed by financial

constraints (40.66%) and their wait for more

innovative product (33.77%).

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CONCLUSION

It can be observed that, by and large, the overall ranking

pattern was similar in rural and urban areas. This finding

was also confirmed by the significant value of K-W,

which indicated that there was significant concordance

regarding influence of different attributes on purchase

behavior of rural and urban consumers. The pattern of

decision-maker significantly differed in rural and urban

families as indicated by the chi-square value of 12.58.

The analysis revealed that financial constraints were

significantly higher among rural consumers as compared

to that among urban consumers of personal care products

as indicated by the Z-value of 9.13.

BIBLIOGRAPHY

1. Ajay, V. (2014). Perception of Indian consumers regarding

Indian advertisements.International Journal of Humanities,

Arts and Management,89-114.

2. Aaker, D.A. (1974) „Deceptive advertising,‟ in Aaker, D.

and Day, G.S. 2nd (eds), Consumerism, New York, Free

Press, pp. 137-157.

3. Aditya, R. N. (2001). “The Psychology of Deception in

Marketing: A Conceptual Framework for Research and

Practice,” Psychology & Marketing, Vol. 18, Iss. 7, Pg. 735.

4. Anderson, C.A. (1983) „Abstract and concrete data in the

perseverance of social theories: when weak data lead to

unshakable beliefs‟, Journal of Experimental Social

Psychology, 19, 93-108.

5. John, D.R. (1999). “Consumer socialization of children: A

retrospective look at twentyfive years of research”. Journal

of Consumer Research, p183-213.

6. John, D.R., & Cole, C.A. (1986). “Age differences in

information processing: Understanding deficits in young

and elderly consumers” Journal of Consumer Research,

p297-315.

7. Imran. (2014). An Empirical Research on Misleading

Advertisements and Its Impact onConsumer Buying

Behavior. Proceedings of the Second International

Conference onGlobal Business, Economics, Finance and

Social Sciences, 1-6.

8. Jaspal, N. (2011). Impact of television commercials on the

social and moral behavior ofIndian viewers– Empirical

Evidence. International Journal of Humanities and

SocialSciences, 178-187.

9. John, R. M. (2011). The Effect of Advertising and

Deceptive Advertising onConsumption: The Case of Over-

the-Counter Weight Loss Products. Working Paper. 2011,

1-70.

10. Muhammad Wasim, W. (2011). The influence and

techniques of modern advertising.Gomal University Journal

of Research, 91-99.

11. Heru. (2015). Consumers‟ attitude and intention towards

organic food purchase: An Extension of Theory of Planned

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Management, Economics and Social Sciences, 17-31.

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A STUDY OF RISING NON PERFORMING ASSETS (NPAS) IN THE BANKING

SECTOR OF INDIA AND ITS IMPLICATIONS

Mankaj Mehta*, Gaurav Gupta

**

*Assistant Professor, Multani Mal Modi College, Patiala, Punjab, India

**Assistant Professor, Multani Mal Modi College, Patiala, Punjab, India

ABSTRACT

Recent news of increasing non-performing assets (NPAs) and instances of bribery and corruption have put the

banking and financial services sector in a distress situation. The Public Sector Banks (PSBs) continue to be

under stress, on account of aggressive lending in the past. NPA is one of the major concerns for the banking

system around the globe and the Indian banking system is not an exception to this universal phenomenon. The

problem which was largely hidden earlier has now come to the forefront in recent years. The bad loan crisis at

Indian Public Sector banks continues to worsen with 26 banks together reporting gross non-performing assets

of more than Rs 7.31lakh crore. India's bad loans are fifth highest in the world and surged dramatically after

March 2015. In the following research paper the author has tried to explain the causes, impact and measures

to tackle the menace of NPAs through descriptive analysis.

Keywords: Non Profitable Assets (NPA), Public Sector Banks (PSBs), Reserve Bank of India (RBI)

INTRODUCTION

The rise in Non-Performing Assets (NPAs) of the Indian

banking sector is a cause of concern for the economy.

The Economic Survey also devoted considerable

attention to India’s Twin Balance Sheet problem i.e.,

distressed companies and the rising NPAs in Indian

Public Sector Banks (PSBs). NPAs in public sector banks

increased by about Rs 6.2 lakh crore from March 2015-

2018. According to the Reserve Bank of India (RBI),

banks will continue to face deterioration in their non-

performing assets (NPAs) or bad loans. Non-performing

assets (NPAs) in the Indian banking system, specifically

in the public sector banks (PSBs), have adverse effects

on credit disbursement and money supply. Now, an

increasing amount of bad loans have prompted the banks

to be extra cautious, which has dried the credit channel.

According to the – “Reserve Bank of India’s Financial

Stability Report of December 2017, NPAs currently

stand at 10.2 per cent of all assets, while stressed assets,

which are believed to be NPAs in effect, stand at 12.8 per

cent”.

Increasing cases of wilful defaults and frauds have

recently been in the news. These cases are often

perceived as the primary reason behind the accumulation

of bad loans in the Indian banking sector. However, the

principal factor is the over-expectation of economic

growth, which makes the banking system disburse credit

more during the boom period of the business cycle. If the

high expectation of growth does not materialise, bad

loans accumulate as borrowers are unable to repay due to

stalling or closure of the big development projects. The

aggregate gross NPAs of SCBs increased primarily as a

result of this transparent recognition of stressed assets as

NPAs, from Rs 3,23,464 crore, as on March 31, 2015, to

Rs 10,35,528 crore, as on March 31, 2018.

OBJECTIVES

The major objectives of the study are –

To understand the meaning of Non Profitable

Assets (NPAs) and quantum of NPAs in Indian

banking sector.

To bring forward the reasons for mounting NPAs

in Indian banking sector.

To analyze the impact of NPAs on Indian

economy

To suggest ways and measures to reduce the

level of NPAs in banks in India.

RESEARCH METHODOLOGY

The research paper on the title “A study of rising Non

Performing Assets (NPAs) in the Indian banking sector

and its adverse effects” is done on the basis of

Descriptive method based on secondary sources,

describing the situation of rising NPAs of the Indian

banking sector. For this study, various articles and

research papers on the relevant topics are

comprehensively studied. Since it is a current issue of the

Indian economy, more emphasis is given on Articles

published in Newspaper, Editorials, online learning

sources, debate and discussions conducted in news

channels. These sources have helped the author in

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bringing the latest data and facts about the study, and

also produce the research paper in an authentic manner.

Non-Performing Assets (NPAs) In the balance sheet of a

bank, loans made to customers are listed as assets. The

biggest risk to a bank is when customers who take out

loans stop making their payments, causing the value of

the loan assets to decline. Credit provided by the banks

as loans sometimes remain unpaid by borrowers. So an

asset, which was supposed to generate income for bank

has stopped not only generating additional income for the

bank but also its principle amount. This late or non-

payment of loans is defined as Non-Performing Assets

(NPA) or bad assets. It is a credit facility (i.e. term loan,

cash credit, and overdraft, bills purchased and discounted

and other loans) where no payment is received even after

90 days, either towards principal or interest.

In India, the RBI monitors the entire banking system and,

as defined by the country’s central bank, if for a period of

more than 90 days, the interest or instalment amount is

overdue then that loan account can be termed as a Non-

Performing Asset. However, in terms of Agriculture /

Farm Loans; the NPA is defined as- if the loan

(instalment / interest) is not paid for two crop seasons for

short duration crops, agriculture loans such as paddy,

Jowar, Bajra etc. it would be termed as a NPA. And the

instalment of principal or interest remains overdue for

single crop seasons for long duration crops. Public sector

banks account for less than 70% of India’s banking

assets, but when it comes to bad loans, they contribute

about 87%. The NPA problem in perspective, stressed

assets now stand at 9.6% of our GDP, or about half of

Budget 2018. According to the RBI, the Gross NPA ratio

of scheduled commercial banks may increase further in

2018-19.

Table No. - 1. NPAs in various sectors of the economy.

S.No. Sectors NPA % of gross advances

1 Industry 6.09 Trillion 20.41

2 Service 696 Billion 6.53

3 Agriculture 149 Billion 2.35

Public Sector banks provide around 80% of the credit to

industries and it is this part of the credit distribution that

forms a great chunk of NPA. The Industry accounts for

highest NPA, RS. 6.09 trillion or 20.41% of the gross

advances given by scheduled commercial banks. The

situation became serious with the substantial delay in

environmental permits, volatility in prices of raw

materials and a shortage of supply, affecting the

infrastructure sector – power, iron, and steel.

NPAs in the corporate sector are higher than those in the

priority or agriculture sector. It is believed that with

economic growth slowing down and rate of interest going

up sharply, corporate’s have been finding it difficult to

repay loans, and it has added up to rising NPAs.

PSBs are required to lend 40 per cent of their assets to

“Priority sectors” but due to various natural hazards

agriculture sector is facing unstable growth. Thus,

Priority Sector Lending (PSL) is deemed unprofitable for

several banks leading to a “PSL drag”.

MAJOR CAUSES FOR INCREASE IN NON

PERFORMING ASSETS (NPAS) OF BANKS

The banking sector has been facing the severe problems

of the rising NPAs. But the problem of NPAs is more in

public sector banks when compared to private sector

banks and foreign banks.

Wilful Defaulters: we have seen an upsurge in

mal-administration by the corporates in the

country in terms of wilful defaults by showing

lack of morale to repay loans. There are

borrowers who are competent to pay back loans

but are intentionally or unintentionally refrain

from repayment.

“We do not punish the defaulters and wrong-

doers unless he is small and weak.. No one wants

to go after the rich and well-connected wrong-

doer, which means they get away with even

more.”

-Raghuram Rajan, Former RBI Governor and

Indian Economist.

Bad lending practices: A non transparent way

of providing loans has led to increase in NPAs of

the banks. The diversification of funds to

business frauds, due to poor credit appraisal

system, the bank gives advances to those who are

not able to repay it back. Thus, unplanned

expansion of credit during the boom period led to

enormous rise in NPAs.

Over-expectation of economic growth: Due to

over-expectation of economic growth in future,

made the Indian banking sector to disburse more

credit during the boom period of the business

cycle. But the economy is unable to achieve its

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specified targets because of implementation of

demonetization and GST. The high expectation

of growth does not materialise and bad loans

accumulate as borrowers are unable to repay.

Natural hazards: Every year India is hit by

major natural calamities in one or other part of

the country. Thus, making the borrowers unable

to pay back there loans. Irregularities of rain fall

and other event reduces production, the farmers

are not able to repay the loans. The bank has to

make large amount of provisions in order to pay

damages to those loans, hence they end up with a

reduced profit.

Severe Competition: Severe competition in any

particular market segment leads to rise in NPAs.

In the anxiety to attain business targets the rules

and procedures for prudent banking were

conveniently forgotten. For example the Indian

Telecom sector is facing this situation.

Mis-governance: Mis-governance and policy

paralysis hampers the timeline and working of

the banks. Political interference in the

functioning of the public sector banks and

providing huge loans to their known has major

impact on rising NPAs. Political pressure in

selection of Chairman and heads of the banks by

the Government is also a cause of concern.

General slowdown of Industrial sector: After

2011 there was a slowdown in the Indian

economy which resulted in faster growth of

NPAs. The banks that finance those industries

ultimately end up with a low recovery of their

loans reducing their profit and liquidity.

Ineffective recovery tribunal: Although

vigilance mechanisms exist, but lack of penalties

enforcement means that wrongdoing is

neglected. The Govt. has set recovery tribunals,

which works for recovery of loans and advances,

due to their carelessness and ineffectiveness in

their work and the perception of „wait and

watch‟ makes the bank suffers the consequence

of non-recovery, their by reducing profitability.

Financial Burden: The execution of any

government’s scheme fall over public sector

banks. Banks continued to be the primary source

of long-term big-ticket investment projects in

India, from roads and ports to power and steel.

This increases the financial burden on banks. The

Infrastructure sector is facing this problem.

Lack of Management information system: There seems to be lack of Management

information system (MIS), which makes the

decisions on real time basis poor. Proper MIS

and financial accounting system is not

implemented in the banks, which leads to poor

credit collection and allocation.

Table No. - 2. Total Gross NPAs of Schedule Commercial Banks (SCBs)

S.No Year Gross NPAs Growth in Gross NPAs ( in %)

1 2009 68,216 cr 22.5

2 2010 81,808 cr 19.9

3 2011 94,121 cr 15.1

4 2012 1.37 lakh cr 45.7

5 2014 2.16 lakh cr 4.72

6 2015 3.23 lakh cr 5.43

7 2016 6.37 lakh cr 11.8

8 2017 8.86 lakh cr 12.5

9 2018 10.35 lakh cr 12.9

Source: Reserve Bank of India (RBI)

From 2000-2008, the Indian economy was in a boom

phase and banks, especially public sector banks, started

lending extensively to companies. Indiscriminate lending

by banks during the high growth period is one of the

main reasons for the deterioration in asset quality.

Another reason is the relaxed lending norms adapted by

banks, especially to the big corporate houses, foregoing

analysis of their financials and their credit ratings.

The accumulation of bad loans happened over an

extended period of time, and today it threatens to hamper

both the banking sector and Indian economy.

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a. Lower growth rates: All of this will lead to a

situation of low off-take of funds from the security

market. This will hurt the overall demand in the Indian

economy. Finally, it will lead to lower growth rates and

of course higher inflation because of the higher cost of

capital. This trend may continue in a vicious circle and

deepen the crisis.

b. Impact the Profitability of the Bank: Non

Performing Assets not reduces the profit of the Bank and

also increases the loss due to the presence of NPAs, the

banks follow low interest policy on deposits and high

interest policy on advances provided. Thus, this act puts

a pressure on recycling of funds and directly impacts the

Profitability of the Bank.

c. Interest rates will rise: The price of loans, i.e. the

interest rates will shoot up. The shooting of interest rates

will directly impact the investors who wish to take loans

for setting up infrastructural, industrial projects etc. It

will also impact the retail consumers like us, who will

have to shell out a higher interest rate for a loan.

d. Increase in Current account deficit: NPA plays an

important role in every economic condition and also the

main cause of the increase in the current account deficit.

Interest rates, Loan, Housing Loans, CRR, SLR all are

directly affected by the system.

e. Scarcity of funds: As the NPA of the banks rises, it

will bring a scarcity of funds in the Indian security

markets. Few banks will be willing to lend. The

shareholders of the banks will lose a lot of money as

banks themselves will find it tough to survive in the

market. This will lead to a crisis of confidence in the

market.

f. Fall in Public Confidence: The poor performance of

the Bank due to increases in Non Performing Assets not

only lower the sentiments of the investor but the bank

also lose the faith of public, this directly affects the

deposits into the bank. Higher NPA impact the revenue

strength of the banks. The banks will recover their losses

by levies charges on those operations which were free of

cost like

Withdrawal limit from ATM

Withdrawal number of times

Cash deposits in other branches

Internet transaction charges

g. Liability Management: Shareholders are interested in

the enhancement of investment and market capitalization.

But due to high Non Performing Assets, bank for forced

to lower the interest rates of the deposit and likely to pay

Higher interest rates on advances. This is a difficult

situation and hampers the banking business.

h. Reduces the confidence level of the investor: High

Non Performing Assets reduces the confidence level of

the investor which significantly impacts the Share price

of the Bank in this situation, banks stop payout of

dividend to the shareholders, which was not in the

interest of the investor.

Table No. – 3. Details of Gross Non Performing Assets (NPAs) of major banks in India

Sr. No. Banks Net Loss ( FY 2017-18) Gross NPAs (In %)

1 Punjab National Bank 12,283 crores 18.4

2 IDBI Bank 8,238 crores 28

3 SBI 7,718 crores 10.9

4 Bank of India 6,043.7 crores 16.6

5 IOB 6,300 crores 25.3

6 United Bank of India 1,454 crores 24.1

7 Central Bank of India 5,104.9 crores 21.5

8 Syndicate Bank 3,223 crores 11.5

9 Canara Bank 4,222 crores 11.8

Source: Press Information Bureau, Ministery of Finance, GOI

The public sector banks (banks owned by Central/State

govt.) are facing huge NPAs. The Nirav Modi scam-hit

Punjab National Bank (PNB) has reported the maximum

rise of Rs 29,100 crore in gross NPAs to Rs 86,620 crore

in the March quarter. Most PSBs also recorded a rise in

bad loans. Among private banks, the gross NPAs of

ICICI Bank and Axis Bank have risen significantly. The

lowest NPA ratio was reported by the Karnataka- based

Vijaya Bank at 6.3 %, followed by Indian Bank at 7.4%.

The only good news of the latest quarter is that six public

sector banks have reported profits i.e. Bank of Baroda,

Canara Bank, Indian Bank, Vijaya Bank, and Union

Bank. Private sector banks to have NPAs but they are

fairly low when compared to public sector banks.

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RECENT INITIATIVES BY THE GOVERNMENT

OF INDIA

The Government of India is also striving to come out of

the clutches of stressed asset of banking sector in order to

show its corruption free and transparent growth agenda.

a) The government, last year announced Rs 2.11

lakh crore bank recapitalization plan to pull out

state-run banks from various challenges. Six new

Debts Recovery Tribunal have been established

to expedite recovery.

b) Union Finance Minister Piyush Goyalon July 2,

2018 approved the suggestions of Sunil Mehta

Committee for a 5- prolonged strategy to tackle

the Non- Performing Assets (NPA). The report

of the committee is titled as „Project Sashakt‟3

to tackle stress in the banking sector.

c) To avoid recurrence and for stringent recovery,

the Insolvency and Bankruptcy Code, 2016

(IBC) has been enacted. Insolvency and

Bankruptcy Code (IBC), a platform for time

bound recovery of bad loans. It will create a

Unified Framework for resolving insolvency and

bankruptcy matters. The Banking Regulation

Act, 1949 was amended, to provide for

authorization to RBI to issue directions to banks

to initiate the insolvency resolution process

under IBC.

d) To reduce incidence of default on account of and

to effect recovery from wilful defaulters, as per

RBI‟s instructions, willful defaulters are not

sanctioned any additional facilities by banks or

financial institutions, their unit is debarred from

floating new ventures for five years, and lenders

may initiate criminal proceedings against them,

wherever necessary. The wilful defaulters are

debarred from taking initiatives as

promoters/directors from accessing capital

markets to raise funds.

e) The Securitization and Reconstruction of

Financial Assets and Enforcement of Security

Interest Act, 2002 (SARFAESI Act) has been

amended for faster recovery with a provision for

three months imprisonment in case the borrower

does not provide asset details and for the lender

to get possession of mortgaged property within

30 days.

f) The government has launched „Mission

Indradhanush‟ to make the working of public

sector bank more transparent and professional in

order to curb the menace of NPA in future.

g) Under the PSB Reforms Agenda announced by

the Government, PSBs have committed to

strengthen recovery mechanism by setting-up

Stressed Asset Management Verticals for

focused recovery, clean and effective post-

sanction follow-up.

MEASURES PROPOSED BY THE RESERVE

BANK OF INDIA

RBI had proposed various measures to tackle the NPA

problem.

a) Restructured standard account provisioning has

been increased to 5% making it easier for banks

to go for restructuring. This has the potential to

enhance the tendency of evergreening of loans.

b) RBI has directed banks to report to Central

Repository of Information on Large Credit

(CRILC) when principle/interest payment not

paid within 61-90 days.

c) RBI has asked banks to conduct sector

wise/activity wise analysis of NPAs and eased

norms for banks to convert debt of distressed

borrowers into equity.

d) 5/25 scheme: For existing and new projects

greater than 500 crores and also for existing

projects which have been classified as bad debt

or stressed asset, the bank can provide longer

amortization periods of 25 years with the option

of restructuring loans every 5 or 7 years.

e) Strategic Debt Restructuring Scheme: This

scheme provides for an alternative to

restructuring. Wherever restructuring has not

helped, banks can convert existing loans into

equity.

SUGGESTIONS - MEASURES TO TACKLE

The problem of NPAs in the Indian banking sector has

become a major cause of worry for the policymakers.

There is a much-needed step that will help revive

stranded assets and resume credit flow to industry.

Implementation of Basel III norms: RBI‟s internal

governance as well as its regulation of NPAs needs

improvement. Extending the time frame for full

implementation of Basel III norms from the current

deadline of March 2019. The Basel III norms are

international standards that lay strict requirements on

banks‟ equity and capital ratios.

STRENGTHENING RBI GOVERNANCE AND

REGULATION

a. RBI lacks supervisory capacity to conduct

forensic audits and this must be strengthened

with human as well as technological resources.

The public sector banks, need to come up with

proper guidance and framework for appointments

to senior level positions.

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b. The credit sanctioning process of banks needs to

be strengthened. All banks will need to maintain

strict vigilance during pre- and post-sanction of

credit. They must fortify their internal processes

to effectively monitor funds.

c. The capital market was expected to emerge as a

substitute of these institutions. Capital market

can also be tapped to source funds. Project-

specific bonds can be floated in capital markets.

The banks should also consider “raising capital”

to address the problem of NPAs.

d. The money being pumped into start-ups should

be in the form of a share in the stake, rather than

a loan. Bank convert debt to equity and instead

of acting as lenders, become the shareholders of

these companies, appoint boards, govern these

companies and bring them back to profit.

e. The government should back the

recommendations of the P. J. Nayak Committee

(Governance in Bank Boards, 2014). Presently,

substantive governance reforms have not been

implemented. For example, all the governance

functions including selection of bank

chairpersons continue to be controlled by the

Ministry of Finance.

f. Banks should examine the balance sheet which

shows the true picture of business. When banks

give loan, they should examine the purpose of

the loan. To make sure safety and liquidity,

banks should grant loan for productive purposes.

Bank should examine the profitability, viability,

long term acceptability of the project while

financing.

g. Banks continued to be the primary source of

long-term big-ticket investment projects in India,

from roads and ports to power and steel. Any

form of public investment and involvement of

public-sector banks in financing big development

projects should be reduced.

h. New avenues of finance such as sovereign wealth

funds, private equity funds and entrepreneur‟s

risk capital should be developed. A sovereign

wealth fund could be created which is

professionally managed. This could help “trickle

down” good governance practices to PSBs.

i. A proper and effective Management Information

System (MIS) needs to be implemented to

monitor warnings. The MIS should ideally detect

issues and set off timely alerts to management so

that necessary actions can be taken. The use of

Artificial Intelligence for the supervision of

financial transactions could prevent financial

fraud.

j. The terms of bank chairpersons must be

elongated in order to effect meaningful changes

and to hold them accountable. The Punjab

National Bank fraud demonstrates the extent of

operational and risk management failures in

PSBs. Improvements to HR practices can help

mitigate behaviour like frauds.

k. The banks should follow the principle of

diversification of risk based on the famous

maxim “do not keep all the eggs in one basket”,

which means that the banks should not grant

advances to a few big farms only or to

concentrate them in few industries or in a few

cities. If a latest big customer meets misfortune

or certain traders or industries affected adversely,

the overall position of the bank will be affected

l. Indian law treats an individual and his company

as two different entities. So if company has

borrowed loan and defaults, at best bank can

seize properties of the company, but cannot seize

property of individual. There are many

companies which have defaulted but their

promoters/owners have properties worth billions

of dollars. In such cases, govt. can pass laws and

see if it is feasible to make the owners pay for the

default. Wilful defaulters will have to be dealt

with a heavy hand, but political interference is a

huge issue.

CONCLUSION

In today‟s era of globalization, the role of banking sector

is not limited to providing financial resources to the

needy sectors but the banks act as agents of financial

intermediation and also plays a major role in the

fulfillment of social agendas of the Government.

However, a steady rise in the NPA‟s of banks affects not

only the banking sector but the country‟s economy as a

whole. Some experts have suggested creating a single

„bad loan‟ bank, under which all bad loans will be

consolidated, so that they can be resolved with simpler

and faster decision-making while keeping in mind

sectoral complexities and multiplicity of lenders.

However, creating a bad bank remains a politically

volatile idea and is difficult to implement. Privatization

of PSBs is not the solution. In the recent past we have

seen many private banks such as Global Trust Bank and

other private banks run in the co-operative sector going

bust and thereafter either being wound up or merged with

some other bank.

REFERENCES

1. Dramatic rise in NPAs in India after 2015 in one chart, and

it‟s not Modi‟s fault By: Pragya Srivastava | Updated: April

23, 2018 12:43 PM

2. (PDF) The Problem of Rising Non-performing Assets in

Banking Sector in India: Comparative Analysis of Public

and Private Sector Banks.

3. www.researchgate.net

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4. B. Ravi Kumar1,B.V.S.S. Subba Rao2,G.D.V.

Kusuma3(2018) Genesis for Increase of NPAs in Indian

Banks An Empirical Analysis Journal of Banking and

Finance Management, Vol:1

5. www.orfonline.org › Research › Development › Indian

Economy by A Mukhopadhyay, Jul 3, 2018

6. www.moneymindz.com

7. www.economictimes.indiatimes.com › Markets › Stocks ›

News › May 24, 2018 May 24, 2018

8. www.economictimes.indiatimes.com

9. www.quora.com

10. www.taxguru.in

11. www.firstpost.com › rising NPAs in Indian banks

12. www.bloombergquint.com › Challenges of Indian Banking ›

NPAs

13. www.brookings.edu

14. www.iasscore.in

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FACTORS OF STORE ATTRIBUTES AND IMAGE AND ITS IMPACT ON

CONSUMER PURCHASE INTENTION IN ORGANIZED GROCERY RETAIL

STORES IN THE CITY OF BANGALORE

A.S.Suresh*, V.Ramanathan

**

*Ph.d Scholar SCSVMV, Kanchipuram and Associate Professor Christ University

**Associate Professor, Department of Management Studies, HR and Commerce, SCSVMV, Kanchipuram

ABSTRACT

The Indian modern retail market is still in its nascent stage. Food and grocery accounts for the biggest share in

revenue in India. India is the second largest producer of food across the globe. Large hypermarkets, Compact

Hyper market supermarkets are increasing, in organised retail but it is still not dominant at 1.8 % of the

organized retail stores,even though approximately 30% of the Population in Metro cities have shifted to

organized retail. Hence it is crucial to understand of multiple factors of store attributes that influence

consumer purchase intention in organized retail grocery stores.

This study offers and validates a comprehensive approach to explain factors influencing consumer purchase

intention. An in depth analysis was done as to how various store attributes influence the purchase intention of

the consumer. Study revealed that factors such as Range of products, Sales Promotion, Private Label,

Location, Home delivery, Billing Counter, Aisle, Fragrance/music are having the maximum impact on

consumer purchase intention

Keywords: Consumer Behavior, Grocery, promotion, Compact hypermarket, store attributes, purchase

intention

INTRODUCTION

Food retail is going to be one of the key drivers of

growth in organised retail as about 65% of retail is

skewed towards food, grocery and fruits and vegetables.

At present though large hypermarkets, Compact Hyper

market supermarkets are growing, organised retail is still

not dominant at 1.8 %.I is expected that 63.2% will be

distributed through Compact hyper market convenience

stores in Metro cities and Approximately 30% of the

Population in Metro cities have shifted to organized

retail. Hence it is crucial to understand the factors factors

of store image and its impact on consumer buying

behaviour in grocery retailing.

LITERATURE REVIEW

Shamsher, R. (2015)opines that the retailing practice is

going through a thorough transition due to the

introduction of new formats for which organized retail is

gaining great importance in the recent times. On top of

that with the changing behavioural phenomenon,

retailers need to worry regarding the lifestyle, preference

and demands of consumers as these are playing a vital

role in the ever changing purchasing outlook of

consumers.

Zemguliene, J. (2014)found a path model of retail store

image, perceived value of the merchandise and

willingness to pay a premium price. The proposed

hypothetical framework requires insights on the

differences in retail image – customer attitude

relationship according to customer characteristics –

gender and income.

Fall Diallo, Chandon, J. L, Cliquet, G, & Philippe, J.

(2013)state that the store image perceptions, Store

Brand(SB) price, image, value consciousness, and SB

attitude have significant and positive influence on SB

purchase behaviour.

De Morais Watanabe, E. A. de Oliveira Lima-Filho,

D, & Torres, C. V. (2013)opine that Proper

management of image attributes of supermarkets is

considered a major challenge in relation to consumer

satisfaction. There are at least two managerial

implications for supermarkets: The use of a set of image

attributes as a way of gaining competitive advantage

over competitors and The need to give greater attention

to the attributes “personnel”, “product” and “price”.

Glanz, K., Bader, M. D., & Iyer, S. (2012)suggest

several strategies for in-store marketing to promote

healthful eating by increasing availability, affordability,

prominence, and promotion of healthful foods and/or

restricting or de-marketing unhealthy foods.

Wu, P. C., Yeh, G. Y., & Hsiao, C. R. (2011) defined

that purchase purpose signifies consumer‟s prospect and

willingness to purchase a certain product or service and

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this represents an integral indicator for measuring the

behaviour of consumer by influencing consumer

purchase possibility.

Beneke, Adams, and Solomons (2011)ascertain positive

and direct statistically significant relationships between

store image and store satisfaction for South African

super market shoppers. The study also showed how

customer buying decision has changed from unorganized

retail outlet towards organized retailing for having store

image attributes alike self-service, product price, home

delivery , visual merchandising, and fast checkout

services for influencing customer satisfaction.

Nesset, E., Nervik, B., & Helgesen, (2011)found that

the role of satisfaction and image as intermediaries of

four store loyalty drivers i.e. store location, assortment,

price and service quality within a comprehensive cause

effect model is most important. But image will also serve

as an important mediator between satisfaction and

loyalty, and this is not a common result in a retailing

context. Another significant finding is, a customer's

perception of store assortment only influences perception

of image.

Hsu, M. K., Huang, Y., & Swanson, S. (2010)state that

grocery store image is found to be the second most

important factor amongst order construct reflected by

the three key components viz. merchandise attributes

(MEA), store ambience and service (SAS), and lastly

marketing attractiveness (MGA).

Theodoridis and Chatzipanagiotou (2009) relate the

store image vertices with customer satisfaction and

showed that price has the strongest impact on satisfaction

and product was the second most important on the scale

of satisfaction. The study also identified the effect of

store image on customers‟ satisfaction level by

employing seven store image factors like assortment,

convenience, reputation, price, atmosphere, layout and

service.

Collins-Dodd, C., & Lindley, T. (2003)have inferred

brand image of the store can provide crucial

opportunities for retail differentiation and to compete if

they are considered by consumers to be solely associated

with store image.

(Alves, H. and Raposo, M. (2007)revealed that store

image has an indirect positive effect on store loyalty

through store satisfaction. The study also said that there

are three store image attributes of a service provider has

an direct effect on service satisfaction. Intangible store

image factors such as food, service and adaptation to

Locality were more important compared to tangible store

image factors like the quality of food, facilities and

Promotion for the growth of customer satisfaction in

Greek fast food market.

McGoldrick, P. J. & Andre, E. (1997)found that from

past many years customer loyalty schemes have been a

focal point of retail marketing activity reason being

established retailers have struggled to stem the flow of

„defections‟ to various discount formats. Many of these

schemes are nothing but expensive and short-term

tactics. A more integrated and longer-term approach

needs a clear depth of the concept and determinants of

loyalty.

RESEARCH GAP

Though there are many empirical studies related to store

attributes, brand image, no study has combined multiple

factors of store attributes and image to understand the

consumer buying behaviour in grocery stores particularly

in India context.

STATEMENT OF THE PROBLEM

Consumers are experimenting across various organized

retail formats. It is therefore crucial to understand the

factors that influence their buying behaviour to enable

organized retail players in grocery and staples format

like Hypermarket, compact hypermarket and

convenience stores market to align their marketing

strategy to consumer preferences.

OBJECTIVES:

To identify the factors of store attributes and store image

that influence consumer buying behaviour in grocery

stores.

To analyze the impact of factors of store attributes and

store image on consumer purchase intention..

HYPOTHESES

H1: A positive and significant relationship exists

between the Products & promotional tool and consumer

Behaviour towards store image in grocery store (Range

of products, Price tag, private label, promotional tools)

H2: There is a significant association between the

services offered in respect of store image on Consumer

buying intention (Location, aisle, cleanliness, parking

area, billing counter, store format, fragrance/music,

layout, home delivery, AC)

CONCEPTUAL FRAMEWORK:

Based on literature review conceptual framework for

deriving the hypotheses was constructed in which

independent variables considered were,Location, Private

label, Aisle,Cleanliness,Parking area,Billing

counter,Product range,Sales promotion,Store

format,Fragrance and music,Price tag,Layout,Home

delivery,Ac and dependent variable considered was

Consumer buying Intention.

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RESEARCH DESIGN

The tools employed for generating the responses in the

study was based on a structured questionnaire survey

which was developed in the light of the purpose of this

study and consulting the academic literature. The

questionnaire included statements and questions that

explained the purpose of the study to the

respondents.The study was conducted mainly in

Bangalore. Simple Random Sampling was done to obtain

data.The number of samples collected was 150.The

questionnaire used for this study included the following

types of scales and questions: Likert Scale [Strongly

Agree/Agree/Neutral/Disagree/Strongly Disagree].For

analysis of the data, SPSS 21 and advanced Excel

applications were used.

DATA ANALYSIS AND INTERPRETATION

FACTOR ANALYSIS

Table 4.1 KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .790

Bartlett's Test of Sphericity Approx. Chi-Square 1761.706

Df 253

Sig. .000

The KMO measures the sampling adequacy (which

determines if the responses given with the sample are

adequate or not) which should be close than 0.5 for a

satisfactory factor analysis to proceed. Kaiser (1974)

recommend 0.5 (value for KMO) as minimum (barely

accepted) and values greater than 0.5 as acceptable,

furthermore values between 0.5 and 0.7 are mediocre.

The between 0.7-0.8 acceptable, and values above 0.9

are exceptionally good. In this table KMO measure is

0.790 which is an acceptable measure.Similarly Bartlett's

Test is significant and appropriate.

Table of communalities was generated and only values

which were more than 0.5 were considered for further

analysis. Based on the same total variance data was

generated and the most significant component was

considered for further analysis and factor loadings which

is depicted in the below rotated component matrix

Table 4.2 Rotated Component Matrixa

Component

1 2 3 4 5 6

My purchase is influenced

by location of the store

-

.168

.060 .367 -

.067

.826

I prefer store providing more

private label products

.768 .200 -

.127

.097 .085

Store with wider aisle space helps in spending more time

in the

.652

.079

.189

.449

.098

.231

Cleanliness in store helps set

image

.349 .422 .275 .510 .134 .155

Store with adequate parking

area is preferred

.185 .590 -

.041

.067 .497 .277

Store within sufficient

billing counter leads to

.275 .413 .208 .093 .507

dissatisfaction

Store offering sufficient

product variants and SKUs influences m

.784

.251

.174

.104

.205

Better sales promotions like discount enhances my

purchase

.079

.853

-

.072

Fragrance and music in the

store have influence on my purchase

.654

.446

.048

-

.163

-

.280

Store with home delivery

and order on call services influences m

191

-

.300

.690

-

.225

Extraction Method: Principal Component Analysis.

Rotation Method: Varimax with Kaiser Normalization.

a. Rotation converged in 9 iterations.

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The rotated component matrix is also known as the

rotated factor matrix which is a matrix of the factor

loadings for each variable onto each factor. The idea of

rotation is to reduce the number of factors on which the

variables under investigation have high loadings. Based

on the same factors like location, private label products,

wider aisle, Cleanliness , product variants, parking

area, billing counter, sales promotions and discounts,

Fragrance and music, and home delivery are

significant and hence validates both hypotheses.

However sub variables such as price tag and store

format is proven to be less significant.

FINDINGS

Consumer gets attracted towards wide range of products,

sales promotion such as discount and private label which

is validated by the fact that 88% of the respondents

agreed that product variant influences their purchase and

83% of the respondents agreed that sales promotion

influences their purchase.Convenient Location of the

store emerged to be another key influence on purchase

intention which is validated by 48,7% of the

respondents.. Similarly wider aisle as averred by 60% of

the respondents makes the consumer pick products

freely, or move around the store with any hassle. Parking

is another important factor which influences the

consumer behaviour in grocery store which is validated

by 63% of the respondents.Having fresh products and

wide number of products but less number of billing

counter is going to spoil the experience of the consumer

due to long waiting period as averred by 61% and 81%

respondents respectively.Subconsciously, consumers get

attracted towards to the fragrance are music as validated

by 39% of the respondents.68% of the respondents

vouched for home delivery as an important aspect that

influences purchase..

REFERENCES

1. Alves, H. and Raposo, M. (2007). The influence of

university image in students‟ expectations, satisfaction and

loyalty. Paper presented to the 29th Annual Eair Forum,

Innsbruck, Austria.

2. Beneke, J. Adams, O. D. and Solomons, R. (2011). An

exploratory study of the relationship between store image,

trust, satisfaction and loyalty in a franchise setting.

Southern African Business Review, 15(2), 5974

3. Collins-Dodd, C., & Lindley, T. (2003). Store brands and

retail differentiation: the influence of store image and store

brand attitude on store own brand perceptions. Journal of

Retailing and consumer services, 10(6), 345-352.

4. De Morais Watanabe, E. A., de Oliveira Lima-Filho, D

& Torres, C. V. (2013). Store Image Attributes and

Customer Satisfaction in Supermarkets in Campo Grande-

MS. Revista Brasileira de Marketing, 12(4), 85-107.

5. Fall Diallo, M Chandon, J. L, Cliquet, G., & Philippe, J.

(2013). Factors influencing consumer behaviour towards

store brands: evidence from the French market.

International Journal of Retail & Distribution

Management, 41(6), 422-441.

6. Glanz, K., Bader, M. D., & Iyer, S. (2012). Retail grocery

store marketing strategies and obesity: an integrative

review. American journal of preventive medicine, 42(5),

503-512

7. Hsu, M. K., Huang, Y., & Swanson, S. (2010). Grocery

store image, travel distance, satisfaction and behavioral

intentions: Evidence from a Midwest college town.

International Journal of Retail & Distribution

Management, 38(2), 115-132.

8. McGoldrick, P. J., & Andre, E. (1997). Consumer

misbehaviour: promiscuity or loyalty in grocery shopping.

Journal of Retailing and Consumer Services, 4(2), 73-81.

9. Nesset, E., Nervik, B., & Helgesen. (2011). Satisfaction

and image as mediators of store loyalty drivers in grocery

retailing. The International Review of Retail, Distribution

and Consumer Research, 21(3), 267-292.

10. Shamsher, R. (2015). Store image and its impact on

consumer behaviour. Elk Asia Pacific Journal of Marketing

and Retail Management, 7(2), 1-27.

11. Theodoridis, P.K. &Chatzipanagiotou, K.C. (2009).

Store image features and customer satisfaction all across

different customer profiles within the supermarket sector in

Greece. European Journal of Marketing, 43(5/6), 708-734

12. Wu, P. C., Yeh, G. Y., & Hsiao, C. R. (2011). Impact of

store image and service quality on Brand Image and

Purchase Intention for Private Label Brands. Australasian

Marketing Journal, 19(1), 30- 39.

13. Zemgulienė, J. (2014). Relative importance of retail store

image and consumers characteristics on the perception of

value and willingness to pay a premium price. Regional

Formation and Development Studies, 9(1), 157-165.

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ENVIRONMENTAL REPORTING OF TOP INDIAN HOTEL COMPANIES – A

CONTENT ANALYSIS OF WEBSITE AND ANNUAL/CSR REPORT DISCLOSURE

Baljit Kaur*, Dheeraj Nim

**

*Research Scholar, Mittal School of Business, Lovely Professional University, Phagwara, Punjab, India

**Associate Professor, Mittal School of Business, Lovely Professional University, Phagwara, Punjab,

India **

Present Address: Oriental School of Business Management & Commerce, Oriental University, Indore,

Madhya Pradesh, India

ABSTRACT

Purpose- This study explored the environmental sustainable policies and actions of the top 12 Indian hotel

companies as revealed on their concerned websites and in the Annual/CSR Reports.

Research Methodology/Approach- The empirical findings are drawn from the review of literature, analysis of

Annual/Corporate Social Responsibility (CSR) Reports and content analysis of the websites of sample hotels.

Findings- Only 58 percent of the selected hotels revealed green practices through websites or reports. The

Indian Tobacco Company (ITC) hotels Ltd. disclosed maximum information about the green practices. Green

actions are getting lesser place on websites and in the Annual/CSR reports in comparison to other facilities.

The majority of hotels focus reporting on water conservation, energy conservation and waste management

practices. The areas of lack reporting were carbon footprint decrease, biodiversity and organic food.

Practical implications- This result of this study provides foundation for the hotels that would like to incorporate

environmental sustainable practices in their organizations and want to develop environmental friendly websites

to disseminate such actions to the concerned patrons.

Originality/Value-This study presents a primary overview of the environmental initiatives of top Indian hotel

companies. It provides practical implication for the research scholars and stakeholders of hospitality industry.

Key words: Hotels; Websites; Environmental Sustainable Practices; India; Content Analysis.

INTRODUCTION

According to (Nazli Nik Ahmad, 2004) a company

should reveal its environmental sustainable actions to

stakeholders in order to build the image of environmental

friendly establishment. As in recent times, stakeholders

are not only concerned about the quality of products and

financial position of the company but also about the

company’s initiatives towards social responsibilities.

They access company’s websites for the same

information (Villagra, 2016). Adding to this (Courtland,

2010) reported that hotel organizations are disclosing

their environmental sustainable actions on their websites

due to the pressure established from the environmentally

aware patrons and society.

At present there is lack of academic research studies in

relation to exploring the public reporting of

environmental sustainability on the websites and

Annual/CSR Reports by the top hotel companies in India.

Hence, the purpose of this study is to find out the level to

which top Indian hotel companies disclose the

environmental sustainable actions to the public by means

of websites and other reports.

This section of introduction provides an overview of the

study. Second section is about literature review that

briefly explains green hotels; the impact of hotels on

environment; agencies involved in green certification of

hotels; benefits of pro-environmental actions and

advantage of disclosing environmental sustainable

actions publicly through websites or reports. Third

section describes the research methodology for the study.

The fourth section is about research findings. Fifth

section presents the discussions and practical

implications of study. Sixth section completes the study

with limitations and recommended suggestions for future

research.

LITERATURE REVIEW

Green/Environmental-friendly Hotels

The term green or environmental friendly hotels are used

interchangeably. The concept of green hotels came into

existence in 1980 and has gained immense popularity

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worldwide in recent years. Various nations are adopting

creative strategies for the promotion of this concept.

Research scholars have been pressing on the importance

of going green.

Green/Environmental-friendly hotels have minimum

negative effect on environment with no compromise on

quality of product and services related to guest

satisfaction. According to (Min, 2011) green hotels

ensures to provide organic and non-smoking environment

in hotel organization.

(Association, n.d.) defines green hotels as

environmentally friendly organizations whose managers

are eager to institute programs that save water, save

energy and reduce solid waste while saving money to

protect our one and only earth.

(Clem, 2013) adds that working green reflects a social

awareness around saving and progressing the Earth’s

natural resources, preserving and protecting them for the

sake of civilisation. According to (J.Blake, 2007) eco-

tourism, eco-friendly, responsible travel and sustainable

tourism share the same principle.

Hotels and the Environmental

The tourism industry is generally resource based and

depends upon environment resulting in disturbing eco

system and leaving significant carbon footprints on host

destination. Initially hotels were considered as smokeless

industry. These organizations were thought to be not

harmful to the environment because of their unique

characteristics of Intangibility, inseparability and

heterogeneity (Hays, 2014). But in 1960s with the

emergence of mass tourism, its negative impact on

environment had become the issue of concern like,

increased human activities linked to hike in prices of

daily need items, scarcity of water and electricity, traffic

jams etc. According to (Sunlu, 2003) tourism effects the

destination negatively and gradually, due to the

construction of infrastructure, roads, hotels, airports etc.

(Lundberg, 2011) Stated that the impact of tourism has

become more visible with the growth of tourism and now

researchers are stressing to examine the whole impact

rather than studying economic impact only. Initially

researchers were more focused on studying the impact of

commercial business houses on environment.

(Bohdanowicz P. , 2005; A.Kasim, 2009) in their studies

written about hotel organizations whose activities effect

the environment negatively in many ways. According to

(Kumar, 2011) luxury 4 & 5 star hotels with 19136 meter

sq. floor area consume electricity up to 279 kwh/meter

sq. /year or 24110 kwh/room/year. (Sunlu, 2003) stated

that due to hot weather conditions and the habit of

tourists to consume more water during holidays the

amount of water used by per guest/per day goes up to

440 liters.

Hotels have two fold relation with the environment; first,

many of them are based on natural resources that helps to

attracts tourists and secondly all of them effects its

surrounding environment by the way of different tourism

activities like construction of basic infrastructure for rail,

road and air connectivity, construction of hotels, resorts,

shops and other recreational activities without taking

consideration of the degradation part of environment.

Some other negative impacts are air and noise pollution,

land degradation, solid waste and littering, sewage toxic

waste etc. (Chan, 2009) has associated air pollution,

energy encouraged emission and waste generation with

human activities and boost up of the tourism industry

would subsequently increases human activities at the

destination and carbon footprints too.

Hotel industry leaves many negative impacts on the

environment so it has become foremost important that we

should take action upon this issue instantaneously. Some

of famous tourist destinations have faced decreased

tourist advent just because of environmental degradation.

Even the localities who are not involved in tourism

business, does not like the government initiative to

develop the area in a manner to attract the tourist to the

place as this leads to insufficiency of basic amenities of

local people. The quality of environment is important for

Tourist destinations. According to (J.Blake, 2007) resorts

and hotels should return back to their environment that

has been taken away. Adding to this (Zaiton Samdin,

2012) stated that it has become vital for the hotel industry

to start practices that preserve the environment. Hotel

industry globally is getting more and more anxious about

environmental problems so that environment could be

saved for future generations.

Implementing environmental sustainable practices by the

Hotels are the key to minimize the negative effects on

surroundings. According to (Bhupinder Bhatt, 2015)

Green practices refer to make business green by adopting

environmental friendly practices. Such businesses have

fewer or no adverse impact on global environment.

Effectively implemented environmental sustainable

practices can decrease the harmful impact on

environmental and are cost effective too.

(Houdre, 2008) states that the sustainability idea was

originated in 1970.The first international meeting that

started the talks on effect of human actions on

environment was the 1972 UN Stockholm conference on

the Human Environment.

While the concept of going green is widely accepted in

developed countries but it is still crawling in many

developing Asian nations like India and China. There are

many benefits associated with application of

environmental sustainable practices in hospitality

industry but unfortunately many hotels have not

implemented these practices for many reasons.

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This study is to investigate the environmental sustainable

practices of large hotels companies in India. There is

limited information available about the environmental

sustainable practices in the hotel industry of India. At

present there are fragmented policies, implementation

and guidelines regarding green management in country.

Agencies involved in Certification of Green Hotels

The trend of going green has attracted increasing figure

of green certification agencies in the hospitality industry.

The following agencies are main players which provide

green accreditation for hotel industry.

1. Green Globe/Green Globe 21-This agency is

based in California and formed by WTTC

(World Travel & Tourism Council) in 1998.It

provide framework through which environmental

sustainability could be implemented, evaluated,

improved and certification achieved.

2. LEED (Leadership in Energy and

Environmental Design) - LEED was established

in 1990 in Washington D.C. and administrated

by US Green Building Council (USGBC). It is a

non-profitable organisation that supports green

construction of buildings, enhancing profitability

and minimizing the negative environmental

effects.

3. Indian Green Building Council (IGBC) -

According to an understanding between IGBC

and USGBC, projects in India that require LEED

rating are directed to register with IGBC first

(since 1st July 2014) (Council, n.d.) .The 'LEED

India' Projects which are already registered with

USGBC up to 30 June 2014 will remain to be

certified by IGBC till June 2018.

4. Green Seal- This agency was established in

1995 in Washington D.C. It provides

certification to hotels as well as the products that

are more environmental friendly in comparison

to others.

5. Green Hotels Association –This agency was

Established in1993 in Houston. It does not

provide certification. Hotels who want to solve

the negative environmental impact can become

the member. Agency provides guidelines to deal

with different environmental issues.

6. Ecotel-It was developed in 1994 and promoted

by HVS (Hospitality Valuation Services).

Certification is based on five main areas;

Environmental Commitment

Energy Efficiency

Water Conservation

Employees’ Education

Water Conservation & Prevention

7. International Standard Organization (ISO)

14000- This is well recognized organization

which provide guidelines on standards of

environmental management operations. It helps

hotels to effectively implement the

environmental management systems, earn

profitability, reducing negative environmental

effect.

Current Environmental Sustainable Practices in Hotel

Industry & Benefits Associated

Many hotels in India are voluntary implementing

environmental sustainable practices in their daily

operations. Green hotels with environmental friendly

services showed improved revenue, reduced costs, low

negative impact on environment, increased brand image

etc. According to (Verma, 2014) Green practices have

resulted in 15-20% cost reduction without any extra

effort. Several hotels round the world have implemented

environmental sustainable practices in their organisations

to decrease their negative impact on surrounding

environment and to attract other benefits discussed

above. According to (Scanlon, 2007) the cost related

issues are one of the most mentioned benefits of

environmental sustainable practices, this statement is

based on the study of InterContinental & Fairmount

hotels, which are enjoying financial saving and increased

profits by implementing environmental sustainable

practices. (Fukey, 2014) In their study focused on other

benefits like enhanced reputation, more loyal customers,

employees’ stability, word of mouth advertisement etc.

Many researchers have studied these environmental

sustainable practices and categorized them into three

main domains: energy conservation, water conservation

and waste management (UNEP; H.A., 2005; Chan, 2009;

B.H.Ustad, 2010).

Environmental Communication on Companies Web Sites

Companies can be benefitted from communicating their

environmental initiatives to the patrons, improving their

image by establishing environmental initiatives and

attracting potential customers and employees who are

environmental conscious (Jose, 2007).Many studies have

reported a growth in the figure of organizations that

communicate environmental initiatives through websites

(Kolk, 2003; KPMG, 2008).According to (Jones, 1998)

companies have used many channels to communicate

their environmental action like

posters,brouchures,newspapers,annual reports etc.

Internet is becoming popular because of speed and

approach to larger number of diverse audience at low

(Jones, 1998; Jose, 2007). Companies’ websites have

become an important platform to distribute the corporate

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information to public like annual reports, policies,

mission statements and consumer information (Hynes,

2007; Clark Williams, 2008; Gröschl, 2011).

Research Methods

Sample

This study explored the websites of the eleven Indian

hotel companies as listed in (Kansara, 2019).These

leading hotel organizations have collective global

existence of 634 hotel divisions.

These selected hotel groups have large impact on the

surrounding environment. Many previous research

studies have reported the more pro-environmental

behaviour of large multinational hotel organizations to

ensure positive trademark image (Kasima, 2004;

Bohdanowicz P. , 2005).This study adopted content

analysis method to study the CSR reports, annual reports

and web pages of the selected hotel organizations. Table

1 on page 8 report the details of these hotel companies

like; names, location, number of rooms etc.

Table 1: Top 12 Indian Hotel Companies by Headquarters Locations & Number of Hotel Units

S.No. Hotel Company Headquarter Location Number of Hotel Units

1 Bharat Hotels Ltd. / Lalit Hotels Ltd. New Delhi 14

2 EIH Ltd. / Oberoi Group Ltd. New Delhi 30

3 Hotel Leela venture Ltd. Mumbai 09

4 IHCL/Taj Hotels Mumbai 165

5 ITC Ltd. Kolkata, West Bengal

100

6 Neesa Leisure Ltd. Ahmedabad, Gujrat 08

7

Park Hotels

Kolkata, West Bengal

15

8 Pride Hotels

Mumbai 16

9 Lemon Tree Hotels

New Delhi 57

10 Sarovar Hotels & Resorts

Gurugram,Haryana 80

11 Royal Orchid Hotels

Banglore,Karnataka 50

12 Concept Hospitality

Mumbai 90

13 Starwood Hotels/Marriot Hotels* NA NA

Source: Care rating as cited by (Kansara, 2019).

*Not included in this study as the Starwood Hotels have

been taken over by Marriot Hotels an International hotel

chain and we are including only Indian Top Hotels

Chains/Group in this study.

Data Collection

To find out the zones of environmental efforts of the top

hotel organization, the conceptual framework was

developed considering the framework proposed by

(Hsieh, 2012). The environmental components consist of:

Energy Conservation;

Water Conservation;

Waste Management;

Green Buying;

Air Quality;

Carbon Footprint Decrease;

Green Building Design & Construction;

Bio-Diversity/Eco System;

Noise Pollution Decrease;

Organic Food;

Environmentally Friendly Education to

Customers & Employees;

Environmental Partnership.

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This study also focused on the above mentioned

categories of environmental practices. The sample

represents the top twelve hotel companies as listed in

care list (Kansara, 2019). Care Rating Ltd. was

established in 1993 and the second largest credit rating

agency in India. This company provide rating and

grading to corporations based on analytical expertise and

methodological support.

This list is shown in Table 1. To measure the

environmental sustainable practices of these hotels a

through content analysis of websites, CSR reports and

annual reports was done. All the companies that were

selected for this study maintained websites. In some

cases, both the websites and electronic media reports

were explored to identify environmental initiatives. All

the selected hotels companies do not provide complete

information regarding their environmental sustainable

practices online. After identifying the environmental

initiatives mentioned in websites, CSR reports and

annual reports, the information was organised into

identified categories by following table 2. Each hotel

company was coded for the presence of environmental

initiatives. It should be noted that each category is

marked for the presence of environmental initiatives and

not for the quality of initiatives.

FINDINGS

Out of 12 selected hotel organizations, 4 are based in

Mumbai, 3 are based in New Delhi, and 2 are based in

Kolkata, West Bengal, 1 each in Ahmedabad Gujarat,

Bangalore Karnataka and Gurugram, Haryana. The

results show that only seven organizations (58 percent)

disclosed environmental initiative such as environmental

sustainable policies and actions on their websites.

In respect to size of the hotel, 71 percent of companies

that posted about their pro-environmental behaviour on

the websites have more than 25 units of hotels. This

results are in consistent to previous research studies that

reported that large companies behave in more pro-

environmental manner and likely to communicate same

information to stakeholders to build a positive brand

image.However,small organizations have low supposed

effect on environment and expected to overlook the

spreading of communication related to environmental

sustainable initiatives (Revell, 2007; Vazquez, 2008).

Table 2: Environmental Sustainable Initiatives of Top Indian Hotel Companies

Ho

te

l Co

m

pa

ni

es

En

er

gy

con

s

erv

a

tio

n

Wa

t

er

Co

ns

erv

a

tio

n

Wa

s

te

Ma

n

ag

e

men

t

Gre

e

n

bu

yi

ng

Air

Qu

al

ity

Ca

r

bo

n

Fo

ot

pri

nt

Dec

r

ease

Gre

e

n

bu

il

din

g

des

ig

n

an

d

con

s

tru

ct

ion

Bio

-

div

e

rsit

y

/eco

syst

e

m

No

is

e po

llu

tio

n

Dec

r

ease

Org

an

ic

foo

d

Eco

Fri

e

nd

ly

Ed

u

cati

o

n

En

vi

ron

men

t

al

pa

rt

ner

s

hip

Bharat Hotels Ltd./ Lalit

Hotels*

No Information Provided

EIH Ltd./Oberoi Group

Y Y Y Y Y Y Y

Hotel Leela venture Ltd.**

Y Y

IHCL/Taj Hotels

Y Y Y

ITC Ltd.

Y Y Y Y Y Y Y Y Y

Neesa Leisure Ltd.*

No Information Provided

Park Hotels

Y Y Y Y Y Y Y

Pride Hotels*

No Information Provided

Lemon Tree Hotels

Y Y Y Y Y Y Y

Sarovar Hotels & Resorts*

No Information Provided

Royal Orchid Hotels*

Y

Concept Hospitality Y Y Y Y Y Y Y

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Note: * Hotel Companies did not provide any

environmental related information on websites/annual

reports.

** Hotel Company provides very little environmental

related information on websites/annual reports.

This study found many interesting facts about disclosing

of environmental initiatives of the top large companies in

the India. Findings are presented in Table 2 above.

The practices that are followed by sample hotels are

noted by “Y”. Content analysis revealed that websites

and annual reports do not provide complete details of

green initiatives of concerned hotels.

ITC Limited-Of the entire sample hotel India Tobacco

Company (ITC) provided most elaborated detail report of

environmental initiatives. On the website, ITC provided a

PDF file of 223 pages reporting sustainable actions of the

company. Under the label of environmental performance

this report contained areas like, management approach,

energy and climate change, air emission, water

management, waste management, raw material &

biodiversity (ITC, 2018). In addition to this ITC also

provide Responsible Luxury Handbook of 18 pages

online on the website of hotels to mention the green

practices of its chain of hotels. This handbook provides

the information of sustainable action of the company and

also makes a request to customers for their cooperation

for the initiatives.

The findings of this study suggest that ITC hotel

Company is disclosing the maximum information online.

ITC is having 10 LEED certified hotels in India. ITC

provides sustainable reports annually on websites. It also

provides separate detail of sustainable practices on the

website of its’ hotels. This clearly indicates their

commitment to sustainable practices above other sample

hotels.

EIH/ Oberoi/Trident Hotel Group -Although, EIH/

Oberoi/Trident hotel group does not provide a separate

CSR/Environmental sustainability report but enough

information regarding environmental sustainable actions

is provided in their annual report. The Principle 6 on

page number 65 demonstrates the environmental

sustainable actions of company. This section contains the

six major subsections of energy efficient building and

architectural design; use of energy efficient design and

equipment; sustainable landscape and water use; use of

sustainable material; waste reduction, recycle and reuse;

indoor environmental quality. Company has appointed

Corporate Social Responsibility committee with four

board members. This committee is responsible for

making CSR policies and to take CSR actions in

harmony to Section 135 Schedule VII of the companies

act, 2013 and the Companies (corporate Social

Responsibility Policies) Rules, 2014 (EIH, 2018).

The Leela venture Ltd. - This Company does not

provide any detail regarding environmental sustainable

initiatives on website or in any other report. In the annual

report 2017-18 under the heading of Director Report

page number 11 it was stated that company does not meet

the criteria of turnover/profit due to continuous losses in

the previous years so company is not liable to form CSR

committee and to contribute for the CSR activities (under

the clause of section 135 of the Companies Act

2013).However, company has provided little details

about the energy conservation practices on page number

12 under the disclosure of sub section (3) of section 134

of the Companies Act 2013 (Limited H. L., 2018).On the

website under the heading of company information a

brief description of CSR initiatives is disclosed regarding

waste management and education to stakeholders.

Indian Hotels Company Limited (IHCL) / Taj Hotels- Company provide separate CSR report annually.

Environmental initiatives are disclosed under the heading

of Embracing Environmental Stewardship page number

28-35 (IHCL, 2017-18).This report provides complete

details regarding the water conservation, energy

conservation, emission and waste management initiatives

of the company with a comparison of past performance.

However, report does not provide details for all the

identified categories of this study. Company has

developed Sustainability teams and Sustainability

Advisory Committee under Global Head of Human

Resouce.These teams and committees are responsible for

proper implementation and monitoring of sustainable

policies. Overall power of suitability actions rests with

CSR Boards and Sustainability Committee.

Apeejay Surrendra Park Hotels Limited (ASPHL) /

Park Hotels- Park hotels have provided a roadmap for

Sustainability and CSR for the period 2015-2020.This

road map provides small description of environmental

actions of the company under the heading of

Environment and Sustainability on page number 3 like

rainwater harvesting, recycling waste, eco design, solar

energy, conservation of energy etc. However, in

Annexure 2, the initiatives taken in last five years are

explained that demonstrate the company commitment

towards society and environmental sustainability (Hotels

T. P., 2015-2020).

In addition to above mentioned roadmap The Park Hotels

have published their annual CSR online. In this report

environmental policy link is also provided. All the CSR

activities are looked after by the Chairman itself with the

help of professionals (Resorts, 2018).This company is

actively involves in CSR actives including environmental

sustainability and disclosing the same information

through reports only. There is no such information

available on the websites of Park hotels.

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Lemon Tree hotels- Company have published their

environmental sustainable actions on the official websites

under the heading of eco-friendly practices (Hotels L.

T.).This section provides the detail of company’s

environmental initiatives under the heading of water

conservation, energy conservation, green fuels and green

material, waste management, noise pollution

management and operational practices. Websites has

disclosed that exiting and upcoming hotel projects are

designed to meet the requirement of Leadership in

Energy and Environment Design (LEED) Gold

certification. The CSR report of the company does not

provide any information on pro-environmental actions.

Annual report of the company provide data about the

initiatives taken for the conservation of energy under the

provision of Company Act 2013 Section 134 (3) (m)

(Limited L. T., 2016-17) .

Royal Orchid Hotels-This Company neither disclosed

environmental sustainable initiatives on websites nor in

annual reports. Only brief information about energy

conservation practices is provided in annual report 2016-

17 under the heading of Company Act 2013 Section 134

(3) (m) on page number 25 (Hotels R. O., 2016-

17).Although, the company has constituted the CSR

Committee but the formulation of policies and actual

actions has not been described.

Concept Hospitality-The profile of the company provide

a brief detail about the environmental initiatives under

the heading Sensitive to the Environment on page

number 7 (Limited C. H.).This company runs hotels

under different brand names like The Fern; The Zinc;

Beacon Hotels. Concept Hospitality also runs some

Independent hotels under the management contract like

The Rodas (Ecotel Hotel) Mumbai; The Wall Street

hotel, Jaipur; The Uppal Hotel (Ecotel Hotel), New Delhi

etc. Concept Hospitality has a tie up with HVS Eco-

Services to accelerate the growth of Ecotel hotels (Eco-

friendly Hotels). Although, the website of the company

does not provide enough information on the

environmental sustainable initiative, but different

associated brands disclosed their environmental

initiatives on their concerned websites. The fern has

provided detailed information under the heading of Eco

Commitment covering water conservation, energy

conservation, waste management, education and

information to employees and customers, green teams,

green designs etc. (Hotels T. F.).

However, Bharat Hotels Limited/ Lalit Hotels, Neesa

Leisure Limited, Pride Hotels and Sarovar Hotels &

Resorts did not reveal any information on websites and

in the Annual/CSR Reports.

DISCUSSIONS AND PRACTICAL IMPLICATIONS

The selected 12 hotel companies have 634 units of hotels

worldwide. These companies have large influence on

passing down the environmental sustainable strategies to

their chain hotels. This study has identified 12 areas

related to environmental sustainable actions of leading

hotel chains: (1) energy conservation (2) water

conservation (3) waste management (4) green buying (5)

air quality (6) carbon foot print decrease (7) green

building design and construction (8) Bio-diversity/eco

system (9) noise pollution decrease (10) organic food

(11) eco-friendly education programs (12) environmental

partnership.

The research findings suggest that ITC Limited reported

the highest frequency of environmental sustainable

initiatives. This company manage large units of hotels in

India. Most of its luxury properties are LEED certified.

Of the eight hotel companies (that disclosed

environmental initiatives on websites or in the

Annual/CSR reports), 75 percent reported environmental

sustainable initiative relating to energy efficiency, water

conservation and waste management. In addition to these

results, 62 percent reported initiative regarding green

purchasing and green building design and construction,

50 percent of the companies were involved in

environmental education programs while 37.5 percent

companies reported involvement in maintaining

guestroom air quality and green partnership

There are some categories that were hardly reported by

any company like carbon foot print reduction and

biodiversity/eco system, ecological food and noise

pollution reduction.

Referring to Table 2, large organizations having more

units of hotels are more committed in maintaining

sustainability in comparison to smaller organizations. It

is believed that to attract more customers and to develop

an edge over competitors larger organizations grasp new

concepts more quickly to maintain niche in the market.

The results of this study are consistent to the findings of

(Meek, 1995) who reported the great impact of company

characteristics, such as industry type, company size and

geographical location on voluntary environmental

reporting. However, as the environmental sustainability

is a global concept, it is not the responsibility of large

companies only to disclose the environment related

information to stakeholders; medium and small sized

companies should also participate in this process

(Isenmann, 2007).

This study was aimed to explore the level of

environmental sustainable initiatives through the review

of website and Annual/CSR report of top eleven hotel

companies of India as listed in Care List. The results

indicate that some companies need to improve their

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public disclosure about environmental sustainable

initiatives. ITC have disclosed enough information for

the stakeholders. With the increased use of internet

among the customers, this information is useful to build

the positive brand image. (Park, 2008) also reported the

potential of corporate websites in development of

relationship with the public.

It is time for hotel industry to behave proactive and

show that they are not only “hospitable “to their guests

but towards the society also. This study shows that hotel

industry has to show their environmental sustainable

initiatives like other manufacturing industries.

This study has contributed to the literature related to

hotel environmental sustainable actions in many

ways.First,this study presented a primary view of the

environmental information disclosed by the top leading

hotel chains of India through the websites.Second,this

study reported the broad categories of environmental

actions in which the top hotel companies are engaged.

This information provides the basic guidelines for hotels

that would like to go on the way of environmental

sustainability. Third, this study provides content

information for the hotels that would like to develop

environmental friendly websites. Altogether, this study

provides good information to the hotel companies to start

actions for environmental sustainability and to disclose

those initiatives effectively to concerned stakeholders

and general public.

STUDY LIMITATION AND FUTURE

SUGGESTIONS

This study has some limitation. First, this study only

analysed the information that was available through

annual reports and on the websites of the sample hotels

and does not confirm the environmental initiatives that

might have been practiced but due to some reasons were

not disclosed publically. According to (Esrock, 1998)

there is difference between web reporting of CSR and

actual practices. Secondly, the websites are constantly

keep updating, this analysis was performed in second

quarter of 2019 and the webpages might have changed

since that time.Third,this study is limited to secondary

data of top twelve Indian hotel companies only, which is

not the true representation of environmental sustainable

practices of all the existing hotel companies in India.

To overcome the first limitation and to collect the wider

information related to environmental initiatives of top

Indian hotel companies, future researcher can collect the

data by different means like by interviewing the

managers of hotel companies, studying their press release

and related information in concerned magazines and

journals.

To address the second limitation, a longitudinal study of

websites could help to determine the changes in contents

related to reporting of environmental sustainable action.

To overcome the third limitation, it is suggested to

increase the sample size of the hotel companies including

medium sized hotels also that have more restricted

resources.

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A STUDY ON MOBILE NUMBER PORTABILITY IN PANJAB

Raja Narayanan*, Sandhir Sharma

**

*Professor, Chitkara Business School, Chitkara University, Panjab, India

**Professor and Dean, Chitkara Business School, Chitkara University, Punjab, India

ABSTRACT

This article is going to talk about Mobile Number Portability (MNP) in Panjab. The Indian telecommunication

market is most competitive in the world and has the second-largest telephone user base. As of February 28,

2019, India had 1.18 billion mobile phone users and 21.72 Million landline users. The wireline market segment

comprises of 1.80 percent of the total subscriber base, as of February 2019. Even though, in excellent services

provided by telecom industry every year, nearly 5 – 6 percent of the subscriber are changing their service

provider. Three hundred customers were chosen by non-probability convince sampling. The respondents who

have either availed the service of mobile portability or submitted their request for MNP considered for the

study.

Keywords: MNP. Indian Telcom, Mobile Market, Services

INTRODUCTION

The telecommunication services sector in India has

undergone a high pace of growth since the 1990s.

Further, the Indian telecommunication market is most

competitive in the world and has the second-largest

telephone user base. As of February 28, 2019, India had

1.18 billion mobile phone users (wireless users) and

21.72 Million landline users (wireline). The wireline

market segment comprises of 1.80 percent of the total

subscriber base, as of February 2019. Over the last

decade, the Wireline subscriber base has shown a

decreasing trend and has reduced from 37.73 million in

February 2009 to 21.72 million in February 2019.

However, the wireless subscriber base has shown a

healthy growth and has increased from 376.12 million in

February 2009 to 1.18 billion in February 2019. The

Central Government has notified the National Digital

Communication Policy (NDCP) 2018 to ensure the

harmonious growth of the telecom sector and also to

attract additional investment in the sector. Meanwhile,

the Government has taken steps to update the present

market. Currently, the telecom industry doing excellent

services; however, every year, nearly 5 – 6 percent of the

subscriber are changing their service provider. Hence,

researcher identified need to study in this area.

REVIEW OF LITERATURE

The effect of customer retention is considered to be more

profitable than the effect of acquiring a new customer or

market share (Reichheld, 1996). Thus making a sense for

focusing on customer retention and minimizing customer

switching. The customer–relationship dynamics could

better be understood with the help of studying complaint

patterns and triggers for switching the service provider.

Therefore, in a study by using the critical incident

method. The attempt was made to classify the

determinants of relationship dissolution with service

provider in three ways as one which push customers to

switch service provider, that is, switchers, another which

keep them loyal, that is, pullers and also a third one

which after switching bring them back to the old service

provider, that is, sawyers (Roos, 1999). To retain

customers and to ensure their great loyalty, memorable

and positive service experience plays an important role

which could be generated with the help of three essential

service elements: functional, mechanical and human

(Haeckel, Carbone & Berry, 2003; Berry, Wall &

Carbone, 2006). Therefore, factors which could trigger

switching would be the deficiency in any of these

elements. The change in the service provider could

triggered by many reasons ranging from better offers

from competitors to dissatisfaction experienced by the

customer (Roos & Gustafsson, 2007). Surabhi Jain

(2010) with the current scenario, if a customer is

dissatisfied with the service by the mobile operator either

he has to reluctantly accept the service or switch to

another service provider that he wishes. This paper

highlights the importance of mobile number portability

(MNP), which enables mobile telephone users to retain

their mobile telephone numbers when changing from one

mobile network operator to another. Also, requirements

and compatibility for switching the network as the

mobile number used for all business and family

correspondence. This paper provides an in-depth

description of how it affects the switching cost for the

consumer, and it also includes various flavors of call

routing implementation, mobile messages (SMS, MMS)

to a number once it has ported. Despite so many

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networks why the user wants to switch to other networks

will be discussed in this paper. The research paper

addressed various arguments related to the pros and cons

of mobile number portability such as How Could MNP

Disrupt Mobile Service Providers, and how can Mobile

Service Providers Benefit from MNP? A more

pronounced effect of MNP is likely to be an increased

focus on improving the customer experience. The

research papers also give an insight into the disruptive

effect of MNP on the Indian Telecom Industry. Beatrix

Gruber (2012) adds that retained customers are known to

be less price/cost-sensitive because the more loyal the

customer, the more he is ready to accept the price than a

customer without loyalty. Researches show that the cost

of customer acquisition is 5 to 10 times more than the

cost of customer retention, which indicates that customer

retention enhances the profitability of the organization.

Laura Lake (2008) proposes that 80% of the sales come

from 20% of the customers and hence customer retention

is not only a cost-effective and profitable strategy but

also the necessity of today's business world.

RESEARCH OBJECTIVE

The main objective is to study the antecedents of Mobile

Number Portability in the Panjab Telecommunication

sector. However, the following is specific objective

To identify proportion level hold, performance,

and new Schemes introduced by services

provider

To Classify the average expenses, challenges,

and customer preference on the mobile phone

services.

To categorize the reason for the select service

provider, and suitable is suggestions to improve

the MNP services.

THE APPROACH

Following a pilot study was done to identify and refine

the measurement items used in the present study, a

survey conducted. Primary data for the research collected

with the help of a self–an administered questionnaire that

was primarily designed to achieve the study goals as

outlined. Data collected through “personal contact," the

sample was identified randomly catching those who are

coming to market in Chandigarh, Sector 9, 18, 17, 37,

and 19. The study also covered in Rajpura, and Ludiyana,

after approaching the respondents personally and

explaining in detail about the survey objectives and the

purpose of the study. Three hundred customers were

chosen by non-probability convince sampling. The

respondents who have either availed the service of

mobile portability or submitted their request for MNP

considered for the study. Data collection was done over

two months and 12 days, from Feb 2019 to April 12.

Finally, Appropriate statistical techniques have been

used, The accurate Chi-square test (2), Simple

percentage analysis, Mean, Standard deviation,

Coefficient of Variation have used to analyze various

categories of primary and secondary data collected.

DISCUSSION

In general, all mobile operator provides two different

types of service to the customer, and one is pre-paid and

second Post-paid. 81.6 percent of the male customers are

pre-paid customers, and 18.4 are post-paid, similarly

female customers also shown more percentage in the pre-

paid customer. On the other hand, the female customers

again 42.7 percent by Reliance and followed by Airtel.

The SD for service operator is 1.13693, which is a bit

away from the mean value; hence, the service operator

widely spared out the services. Regarding the customer

opinion about network coverage both male and female

55.7, 54.9 percent of customers say only on average level

1.9 percent from males, and 1.2 percent from females

accept it coverage of network is excellent. Hence,

unanimously, all service providers could make some

steps to improve their services or try to satisfy the

customer. The SD in opinion about network coverage by

the service provider has .73694, which is closer than the

mean value; hence, opinion about the network by the

service provider is closer than services. The researcher

has identified nearly 80 percent of the customers not

satisfied with their SMS services because it is a passion

to send many business SMS has disturbed customers.

Only 1.9 percent of male customers and 1.2 percent of

female customers have enjoyed their services. The SD of

SMS services by the operator has .74649, which is

nearby their mean, hence SMS services provided by the

operator have a close relationship between services.

Regarding the call rate, most of the customers seem to

not agree with their service provider, even though the

free call offered by the operator, this is the joke of the

finding. Forty-five percent of males and 25 percent of the

female strongly disagree with their call rate. As a

researcher, the researcher noticed and compare with

some other country India provides a good deal for call

rate, however in this study shows the most of the

customers are disagree with their call rate. The SD for the

call rate of the service provider is .73634, which is closer

to mean value, hence the call rate offered by service

provider closer than the services. The researcher also

tries to find out the average monthly spending expenses

to the mobile phone 25 percent of females spend more

than 500 per month, and 51.6 percent of male customers

spend only 101 – 200 per month, females spend more

money show that they do not realize the money value.

The SD of average monthly spending expenses is

1.55297, which is away from the mean value; hence,

average monthly spending expenses not associated with

services. The detailed figure is available in table 1.

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Table 1: General opinion about the service provider

Services Factor Mean SD

Services Pre- Paid

1.1583

.36582 Post -Paid

Operator Vodafone

2.9333

1.13693

Airtel

Idea

Reliance

BSNL

Others

Opinion about Network Excellent

2.9292

.73694

Good

Average

Poor

Opinion about SMS Excellent

3.1917

.74649

Good

Average

Poor

Opinion about New Scheme Excellent

2.9792

.83063

Good

Average

Poor

Opinion about Call Rate Excellent

3.2083

.73634

Good

Average

Poor

Opinion about VAD Excellent

2.9000

.82228

Good

Average

Poor

Average Monthly Expenses Less than 100

101 – 200

201 – 300

301 – 400 3.3000 1.55297

401 – 500

More than 500

Source: Primary

The hypothesis has framed as there is no significance

between the service Operator, opinion about network,

SMS, new Schemes, Call rate, VAD, and average

monthly expenses. However, table 2 has shone the

comparison between several factors with services. Except

for opinion about VAD and call rate offered to customer

P-value is higher than the chosen significance .138, .560,

.982, .013, .556 and .132 for Services offered, operator,

opinion about network coverage, opinion about SMS,

opinion about new schemes, and average monthly

expenses, so, the hypotheses are rejected and concluded

that there is an association between network of the

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service provider. The other opinion about the call rate

and opinion about VAD, the P-value is less than we

chose our significance level 0.05. Hence there will be an

association between call rate offered by service

providers. The detailed figures are available in table 2.

Table: 2 Result Comparison

No Chi-Square Degree of freedom Significance

Services 2.206 1 .138

Operator 2.988 2 .560

Opinion about Network .171 3 .982

Opinion about SMS 10.861 3 .013

Opinion about New Schemes 2.081 3 .556

Opinion about Call rate 13.060 3 .005

Opinion about VAD 13.905 3 .003

Average Monthly expenses 8.483 5 .132

Source: Primary

Table 3 shows the MNP availed customers opinion and

its impact. The study shows that Airtel has a monopoly

for MNP customers. Fifty-four percent of males and 51

percent of females they availed from Airtel. Reliance

occupies 26 percent of the male customer and 25.8

percent of the female which is coming in second place.

The researcher tries to find out the satisfaction level 72

percent of male and females’ customers really, they are

enjoyed. The SD of satisfaction level is .56377, which is

closer to mean value; hence, satisfaction levels associated

with services. After making the 7th amendment of MNP

act, make it easy to mobilize, so more than 70 percent of

male as well as female agreed there is no challenge in

MNP. More than 50 percent of customers changed their

service provider because of network coverage, 35 percent

of male and 25 percent of female customers firmly

accepted because of network coverage as a reason and

followed by better serve as the second reason for MNP

availed customers. Thirty-three percent of males and 28

percent of the females agreed on they anvil MNP because

of better services provided by a service provider. SD of

reason to change service provider is 1.52036, which is

away from the mean value, hence there is no association

between the reason to change service providers with

services. Since most of the customer is satisfied with

their new service provider, the researcher asked about

insists to their friends and relatives. Ninety percent of the

customers strongly agreed to do that, which is no wonder

because already they are happy with the service provider.

However, 10 percent of customers do not accept this and

seem to be not happy with their service provider. The SD

is .95589, which is closer to mean value; hence, there

will be a strong association between services with

recommended with friends and relatives. Finally, the

researcher identified 70 percent of a customer request to

increase the validate period and 25 percent of customers

annoyed by unnecessary SMS by the service provider.

Table: 3 impacts of MNP service and their opinion

Services Factor Mean SD

New Service Provider

Vodafone

2.5062

1.09685

Airtel

Idea

Reliance

BSNL

Satisfactions Yes 1.8875 .56377

No

Challenges in MNP Yes

1.7222

.45105 No

Marks in New SP Up to 50 %

7.1974

2.000 More than 50 %

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Reason for the change service provider

Reference

2.8675

1.52036

Network

Service

Availability

Price

Prior Experience

Customer Support

Interaction

Could recommend friends and relatives

Yes

2.8675

.95589 No

May be

How can improve the service

Reduce unnecessary SMS - -

Increase mobile data

Increase validate period

Reduce unnecessary call

Source: Primary

The hypothesis has framed as there is no significance

between the availed MNP customers like, their services,

satisfaction level, challenges while MNP, the reason to

change service provider, and suggestion to the service

provider. However, table 5 has shone the comparison

between several factors with services. The P-value is

greater than the chosen significance .593, .437. .592,

.073, .009, .420, .018 for the new service provider,

Satisfaction level, challenges in MNP, Marks to the

service provider, reason for change their service provider,

the recommendation to friends and relatives, and

suggestion to the service provider. So, the hypotheses are

rejected and concluded that there is an association

between network of the service provider. The detailed

figures are available in table 4.

Table 4: Result for availed MNP customers

No Chi-Square Degree of freedom Significance

New Service 2.792 3 .593

Satisfaction 1.654 2 .437

Challenges .001 1 .592

Marks to the new service provider 14.363 8 .073

Reason for change 17.160 6 .009

Recommend friends 1.736 2 .420

Improve the services 10.057 3 .018

Source: Primary

CONCLUSION

Thus, after all the above meaningful discussion, it can be

concluded that it is important to know customers opinion

towards mobile number portability. From the survey

found that some of the respondents are averagely

satisfied and overall, the respondents are well satisfied

with the current service provider, but there is enormous

competition in this industry. In this competitive

environment, customers well aware of number portability

and its procedure. Which shows popularly of number

portability information in the minds of customers. So, the

service provider should try to convert this threat into an

opportunity by providing excellent service to their

customers.

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12. Copy right of all accepted papers for publication and use in any form/format/way, in text or image, other

electronic format or such other format or such other media as may now exist or hereafter be discovered, will

vest with PIMT Journal of Research, Alour, Khanna (Punjab). Permission to make digital/hardcopy of

published work may be granted without fee for personal or classroom use.

13. All manuscripts should be addressed to

Chief Editor

PIMT Journal of Research

Vill. Alour, Khanna-141401 (PB)

Distt. Ludhiana

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Views expressed in the articles are those of the respective authors. PIMT Journal of Research, its Editorial Board,

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liability for any statement of fact or opinion made by the contributors. However, effort is made acknowledge source

material relied upon or referred to, but PIMT Journal of Research does not accept any responsibility for any

inadvertent errors & omissions.

In case of any dispute jurisdiction of Khanna will be considered.

Punjab Institute of Management & Technology (Estd. In 1997, Approved by AICTE, New Delhi, Affiliated to IKG PTU, Jalandhar)

(Near GPS, Mandi Gobindgarh) Vill. Alour, Khanna -141401, Distt, Ludhiana, Punjab, India

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PUNJAB INSTITUTE OF MANAGEMENT & TECHNOLOGY

Punjab Institute of Management & Technology, Vill. Alour, Khanna, established in 1997 –“the oldest Management &

IT Institute of this region.” It is one of the top B-school of excellence in India and it is the first AICTE approved

institute. It is divulging Quality Technology Education and running courses like MBA, MCA, BBA, BCA, and

B.Com. (Hons.), B.Sc. Agri ( Hons), BTTM, & Lateral entry for MCA. The institute houses state of the art academic

infrastructure sprawled over 5 acres of land, Fully Wi-Fi campus is now vibrant with large number of students trying

to attain excellence in technical skills and indoctrinate human and social values making them a true professional ready

to face global challenges.

PIMT is centrally located in Vill. Alour, Khanna on busy National Highway NH-1, an hour drive from Chandigarh

Airport which is the nearest airport or from Ambala Cantt Railway Junction. The city is well connected by road, rail

and air to almost any destination in India.

Gobindgarh Educational amd Social Welfare Trust is a non –profit, non-proprietary educational body managed by

professionals from various walks of life. Along with PIMT, they are also running the chain of institute like GPC

(Gobindgarh Public College), GPS (Gobindgarh Public School) with CBSE & CIE (Cambridge Internationals

Examination).

PIMT provides a platform to hi-tech professionals in the field of Management & Information Technology by

comparing with those expected by corporate dynamics. The institute is striving to impart the education which is, by all

means, market oriented and with a purpose to foster the needs of global industries.

Philosophy of PIMT provides a framework that makes students fully competitive and ready to face current challenges

with the body of business & professional ethics. The institute has created a unique learning experience that focuses on

all round student development.

Institute’s focus on core competence gives way to extensive use of modern teaching aids, easy availability of

international journals and e-journals, state of the art computer centre, e-resources with large number of terminals and

free access to internet is virtually grooming these students to create knowledge based society.

The intellectual stimulating environment enhances the value of education through its well-articulated mentoring

programme where in students are continually evaluated throughout the tenure of course through class tests,

assignments, projects, presentations and training in industries. Students are not only assessed in knowledge and skills

but also on their professional attitudes.

With PIMT legacy of innovation in teaching learning process, various studies at PIMT take on dimensions unknown

to conventional educationist. At the forefront of this effort, institute has academic excellence programme with the aim

nurturing outstanding managers and maintains higher domains of professional ethos.

In the direction of aligning the vision of institute with emerging needs of corporate world, institute creates cutting

edges research that students are privy to and respect the close connection.

Students are provided a framework to work on cutting edge technology & management style. They are nourished to

the goal oriented skill set & learn Business & Professional ethics by heart.

Pride of institute is the most modern digitized library which houses of large volume books in the areas of Management

and Information Technology. Library is fully air conditioned and is a hub around where all academic activities of the

institute revolve. It has seating capacity of more than 100 students. It also houses reprographics facilities. The library

subscribes to national and international journals. The library also subscribes for e-journals through the consortium &

more than 500 journals and e- books are accessible through the consortium to the students and faculty alike.

Subscription to e-journals through consortium provides easy access to international journals in the fields of

management and technology. This journal bears an ISSN No. 2278-7925 and this is UGC Care Listed Journal.