january-june, 2017 - ksom · 2017-07-07 · january-june, 2017. jan.-june 2017 contents l...

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PARIKALPANAKIIT Journal of Management

January-June, 2017

Jan.-June 2017CONTENTS

l Assessment of Demographic Impact on 1-16Female PsychographicsTanvi Gupta, J.K. Batra

l Performance of A Firm in the Wake of Women 17-30Employees in Key Positions: An OverviewN. Srividya, Rita Basu

l Impact of Intrinsic Motivational Factors on 31-42Employee Retention among Gen Y:A Qualitative PerspectiveSwati Mishra, Sumita Mishra

l Understanding Dynamics of KMS Adoption in 43-55Indian ITES OrganizationsAmit Vikram, Mohammad Israrul Haque,Ganesh Singh & Sathya Swaroop Debasish

l Growth, Equity and Poverty: Trends in Odisha 56-65S.N. Misra, Sanjaya Kumar Ghadai

l Export performance of spices in India: An empirical study 66-74P. Hari Babu

l Political Leaders & Parties as Brands: 75-82A Theoretical PerspectiveAmit Kumar, Somesh Dhamija

l Impact of Ad-skepticism on Consumer Cynicism 83-100Indirah Indibara

l Financial Literacy in the Unorganized Sector in 101-115Purba Medinipur District of West BengalDebabrata Jana, Abhijit Sinha & Arindam Gupta

l Success in CRM implementation projects: An empirical 116-125study from IT consultants’ perspectiveHory Sankar Mukerjee, U Devi Prasad & S.S Prasada Ra

l Partners in Crime: The Risk in Entrepreneurship 126-136Brajaballav Kar, Prasanta K Patra

Parikalpana: KIIT Journal of Management

1Parikalpana - KIIT Journal of Management (Jan.-June, 2017)

ASSESSMENT OF DEMOGRAPHIC IMPACT ONFEMALE PSYCHOGRAPHICS

Tanvi GuptaAssistant professor, Jagannath International Management School, Kalkaji, New Delhi

[email protected]

J.K. BatraDirector, Jagannath International Management School, Kalkaji, New Delhi

[email protected]

DOI: 10.23862/kiit-parikalpana/2017/v13/i1/151265Article available at: http://ksom.ac.in/faculty-and-research/research/parikalpana-the-research-journal/

ABSTRACTThe mall culture that got established since 2011 onwards was something urbanIndia had never witnessed earlier. Retail-real estate synergy had started addressingan uptrend in the metros from 2012 onwards. Even, the consumer perception towardsa mall has changed drastically over the past decade; from just considering a mall asan entertainment option to a complete shopping zone. Also, realizing thepsychologically involved nature of women in shopping in comparison to their malecounterparts, the current study aims at examining the relationship between thedemographic variables and psychographic purchase behaviour of females shoppingwomen apparels and accessories in the stores in Delhi malls. This study is based onempirical research conducted through a mall intercept survey in 6 malls in Delhichosen purposely. It followed multi-stage sampling with a sample size of 100x6=600female shoppers. The findings of this study are consistent and have been supportedby previous studies. It revealed that demographical factors have an impact on thebuying pattern of the respondents. The conclusion advocates that there exists asignificant relationship between the demographical factors and the psychographicpurchase behavior of the female shoppers. However, the relationship between ageand psychographic purchase did not reach the level of statistical significance yet,the purchase behaviour varied with age.

Keywords: demographics, psychographic purchase, mall intercept, accessories.

INTRODUCTION

FEMALE BUYING BEHAVIOUR

Modern marketing has actually relied ongender to understand and then explainconsumer behaviour (Caterall &MacLaran, 2002).And, talking about the

fairer sex, women are considered to bemore psychologically involved in shoppingand would attain more joy and wouldspend more time doing shopping (Arnold& Fischer, 1994). Some marketerssupport the sale to be done to bothgenders, yet, some prefer to target their

Parikalpana - KIIT Journal of Management2

consumers based on gender. Hence,women have been chosen as the targetgroup for the current study (Alreck &Settle, 2001).

DELHI-A PROSPECTIVE RETAILLOCATION

Delhi being a prospective market occupiedby people with high income levels is arelevant location for the study.Confederation of Indian Industry reports,CII (2006) even claimed that after Dubai,Singapore and Hong Kong, the nextprosperous retail giant was Delhi. It alsoreported Delhi with 25% of the country’srichest families living here. On average,40% of a family’s spending wasdocumented to be on food, clothing andentertainment which again implied Delhihaving a good market potential for theorganized retail sector. Also, the report byKnight-Frank Research about “ThinkIndia. Think Retail 2016”, reported thatDelhi has got the largest customer basefor retail across all the major urban centresin the country which makes it an idealtarget for retail.

WOMEN APPARELS ANDACCESSORIES

Buying clothing is like buying one’s identity(Tungate, 2008). Buying the right clothingcan enhance a person’s self-esteem andalso, the acceptance by other people(Easey, 2009). Clothes are even regardedto reflect one’s social identity andpersonality (Craik, 2009). Womenapparels and accessories have been theproducts of utmost relevance and relative

usage to a woman (Dauriz L., et al, 2013).Country Report (2016) stated that in theyear 2015, apparel accessories industrycontinued to show strong growth in India.Apparels accessories witnessed a majorretail growth of 15% in 2015 with salestouching up to Rs 23 billion. In fact, TheHindu, Special Correspondent (2013)revealed the results of a survey byASSOCHAM (The Associated Chambersof Commerce and Industry of India, 2013)about the consumption patterns of youthin Delhi. It was also documented that theyouth of Delhi spent more amount onapparels and accessories in comparisonto their counterparts in the othermetropolitans in India.

DEMOGRAPHICS ANDPSYCHOGRAPHICS

Demographics refer to the selectedpopulation features / characteristics usedin marketing or opinion research. Some ofthe commonly-used demographics may beage, race, income, disabilities, educationalqualifications, occupation, employmentstatus etc. Demographics come out to besuch independent variables which can havea substantial impact on consumer lifestyleand hence, purchase decisions .Thevariables like activities, interests, opinion,expectations, likes or dislikes,consumption and feelings, in aggregate aretermed as dependent variables (Hawkins,et al, 1989).

For this study, age, marital status, educationand income have been identified as the fourdemographic (independent) variables

3An Assessment of Demographical Impact on Female ...

along with 78 psychographic (dependent)statements defining self-evaluation, family,shopping, clothing shopping andaccessories shopping. The responses werecollected on a 5-point Likert’s scalerevealing the impact of demographics onthe purchase pattern of the femalecustomers reflected by their psychographicscore in Delhi malls for shopping of womenapparels and accessories. Higher thepsychographic score, stronger is thepurchase pattern.

REVIEW OF LITERATURE

Demographics tend to impact thepurchase patterns of the consumer. Studiesconducted in the past to evaluate theimpact of demographics on female buyingbehavior nationally and internationallyprove the relevance and significance of thecurrent study. Lakshmi N.K. & SreenivasD.L. (2016) conducted a study onbranded apparels purchase in Bangaloreto report that income of the respondentsand even, occupation had a significantlypositive association with the consumerbuying behaviour. Ahuja N. (2015)documented that brand consciousnessseemed decreasing with increasing age.Thus, age showed a relevant relationshipwith purchase of brands in the fashionindustry in India. Awan A. & Abbas N.(2015) also reported the impact of gender,age, education and income of consumerson the impulsive buying in Multan,Pakistan. It was revealed that all thementioned demographical factors hadsignificant relationship with the buyingbehaviour. Chakrapani A. (2015) stated

that Generation Y was very particularabout brands and the range of apparels.Suresh K C & Vijaya (2014) conducteda study on the youth shopping brandedclothing in malls in India. It was reportedthat different personal factors showvariations in the consumers’ buyingdecision depending upon their age andgender. Singh N. & Sarvanan R. (2013)studied female buying behaviour forapparels in Coimbatore and the studyrevealed that young generation was moreconscious about fashion trends incomparison to the older age groups. JunaidB.A., et al (2013) reported that femaleconsumers with increasing incomeincreased their spending on purchase ofcosmetics in Delhi. Sharma S. (2013)studied the impact of females buyingbehaviour in Uttarakhand district. It wasreported that 83% of the respondentsidentified income to be the most criticalfactor that affects the purchase decisionof females and majority of the women wereeven influenced by the tastes andpreferences of others while purchasing(children and family). Hence,demographical impact on purchase patternis quite relevant and undeniable for thestudy. Referring to the earlier studies, thecurrent research has been undertaken inorder to add insights into it regardingfemale shopping in Delhi malls for womenapparels and accessories. Also, it targetsat filling the research gaps of studying therelationship between the demographicsand psychographic purchase of womenapparels and accessories in the sameresearch.


RESEARCH METHODOLOGY

Objectives

The main purpose of the paper is to findout whether the change in the demographicvariable leads to any change in thepsychographic purchase pattern of femaleshoppers in Delhi malls for female apparelsand accessories. The objectives have beendefined below:

1. To evaluate the relationship betweenage and buying behavior of femalecustomers towards apparels andaccessories in Delhi malls.

2. To evaluate the relationship betweenmarital status and buying behavior offemale customers towards apparels andaccessories in Delhi malls.

3. To evaluate the relationship betweeneducation and buying behavior offemale customers towards apparels andaccessories in Delhi malls.

4. To evaluate the relationship betweenincome and buying behavior of femalecustomers towards apparels andaccessories in Delhi malls.

Hypothesis

HO 1: There is no significant relationshipbetween Age and female buying behaviortowards apparels and accessories in Delhimalls.

HO 2: There is no significant relationshipbetween marital status and female buyingbehaviour towards apparels andaccessories in Delhi malls.

HO 3: There is no significant relationshipbetween education and female buyingbehavior towards apparels andaccessories in Delhi malls.

HO 4: There is no significant relationshipbetween income and female buyingbehavior towards apparels andaccessories in Delhi malls.

Research Design and Sampling Plan

This study is based on primary research.The research design is descriptive. Femalecustomers from 18 years and above whowere found shopping in the top-ratedstores of women apparels and accessoriesin malls in Delhi were chosen as the targetpopulation. The sampling frame includedthe 6 major malls in Delhi; Select city walk(Saket), DLF (Saket), Metro walk mall(Rohini), Emporio (Vasant Kunj), DLFPromenade (Vasant Kunj) and CitySquare Mall (Rajouri Garden). Thesemalls were chosen based on 3 conditions;the year of operation being atleast fromyear 2010, area occupied accounted tobe atleast 200000 sq. feet and there wereatleast 20 brands of apparels andaccessories available in each mall. Multi-stage sampling was used as the samplingtechnique on a sample size of 600 femalerespondents via mall intercept survey.

DATA COLLECTION ANDRESEARCH TOOLS

An adapted questionnaire1 with somemodifications with respect to Indian contextwas used for data collection. A pre-testwas conducted on a sample of 100

5

respondents to check the reliability of thequestionnaire. Cronbach’s alpha came outto be 0.882 which is considered significantand hence, the questionnaire was used forfurther data collection .The response ratewas 93% as 556 questionnaires out of600 were completely filled. SPSS 20 wasused for data analysis. Analysis was donethrough one-way ANOVA (Analysis OfVariance) and post-hoc test, LSD (LeastSignificant Difference). Mean plots wereobtained to get a more comprehensiveview of the variations in the dependentvariables (psychographic purchasepattern) due to variations in theindependent variables (demographicfactors).

DATA ANALYSIS ANDINTERPRETATION

Part –A: Relationship between age andpsychographic purchase pattern.

Following is the descriptive analysisdocumented for the relationship betweenthe categorical age of respondents and thepsychographic purchase pattern shown inTable 1. The test of differences has beenapplied on a parametric scale usingAnalysis Of Variance which was found tobe significant but didn’t reach the level ofstatistical significance (F=2.09 , p=0.101> 0.05) . The psychographic score basedon means is the highest for the age group,30-40 years and lowest for 40-50 year.

Table 1: Descriptive analysis of age-groups and psychographic score

1. Jadezakonă V. (2010), “Evaluation and Analysis of Questionnaire LifestyleSegmentation”, Diploma Thesis (unpublished).

Age N Mean ±S.D. F (Significance)

18-30 years 288 252.53±55.88 2.09 ( 0.101 ) 30-40 years 152 262.63±30.69

40-50 years 58 248.18±35.40

Above 50 years 58 253.25±46.49

(Respondent Age)x

(Respondent Age) y

Mean Difference

(x-y)

Sig. 95% Confi. Interval

Lower Bound

Upper Bound

18-30 yrs 30-40 yrs -10.09* 0.03 -19.22 -0.96

40-50 yrs 4.345 0.51 -8.76 17.45

above 50 yrs -0.72 0.91 -13.82 12.38

30-40yrs 18-30 yrs 10.09 0.03 0.96 19.22

An Assessment of Demographical Impact on Female ...


40-50 yrs 14.44 0.04 0.38 28.49

above 50 yrs 9.37 0.19 -4.68 23.42

40-50 yrs 18-30 yrs -4.34 0.51 -17.45 8.76

30-40 yrs -14.44 0.04 -28.49 -0.38

above 50 yrs -5.06 0.55 -21.97 11.84

above 50 yrs 18-30 yrs 0.72 0.91 -12.38 13.82

30-40 yrs -9.37 0.19 -23.42 4.68

40-50yrs 5.06 0.55 -11.84 21.97

Table 2: Post-hoc (LSD) analysis of age groups and psychographic score

Post-hoc analysis of psychographicvariables and age groups is given in Table 2and Figure 1. It is clear that the females inthe age group 18-30 years show statisticallysignificant difference in their purchasebehavior from the females in the age groupof 30-40 years as p<0.05 but not from thefemales above 40 years (p>0.05). Also, agegroup 30-40 years behaves differently whilebuying apparels and accessories from thefemales in the age group between 40 to50years as p<0.05. Females in the agegroup above 50 years scored lesser thanthose in 20-30 years age group, yet it couldnot reach the level of statistical significance.Hence, it can be said that purchasebehaviour changes with variations in the age-group and thus, share a significantrelationship with the female buying patterns,though not statistically significant always.Referring to Table 1 again, p>0.05, hence,the null hypothesis HO1 is accepted as thereis no significant (statistically) relationshipbetween age and the purchase behaviour.

Figure 1: Mean plot of respondents’age and psychographic score

Part –B: Relationship between themarital status and purchase pattern.

Table 3 documents the descriptiveanalysis for the relationship betweenmarital status and the psychographicpurchase pattern of the female customersin Delhi malls. Applying one-wayANOVA, the test of differences isreported to be statistically significant(F=22.96, p <0.05). The highest meanscore was shown by females who weresingle followed by the married ones andthe least by widows.


Marital Status N Mean ±S.D. F (significance level)

Single 159 279.06±35.24 22.96 (0.001)

Married 391 245.54±47.22

Divorced 2 243.50±.70

Widow 4 217±15.38

Table 3: Descriptive analysis of marital status and psychographic score

(Marital Status)x

(Marital Status)y

Mean Difference (x-y)

Sig. 95% Confidence Interval

Lower Bound Upper Bound

Single Married 33.52* 0.001 25.41 41.65

Divorced 35.56 0.25 -25.87 97.01

Widow 62.06* 0.005 18.35 105.78

Married Single -33.52* 0.001 -41.64 -25.4

Divorced 2.04 0.94 -59.17 63.26

Widow 28.54 0.19 -14.85 71.94

Divorced Single -35.56 0.25 -97.01 25.87

Married -2.04 0.94 -63.25 59.17

Widow 26.5 0.48 -48.27 101.28

Widow Single -62.06* 0.005 -105.78 -18.36

Married -28.54 0.19 -71.93 14.85

Divorced -26.5 0.48 -101.27 48.28 Table 4: Post- hoc analysis of marital status and psychographic score

The post-hoc analysis through LSD hasbeen shown in Table 4 and its mean plotin Figure 2. Single or unmarried femaleshave shown statistically significantdifference in their psychographic purchasepatterns from married females and widowsas the level of significance, p<0.05. Also,the size of widows and divorced femalesis too small in the sample, therefore, it

doesn’t hold valid to consider the resultsbased upon these two categories. So, theremaining categories that are identified tobe valid are; married and unmarriedfemales. There exists statistically significantdifference in the purchase behavior of thesetwo categories. This shows that there existssignificant statistical difference in thepurchase patterns of female customers


based on their marital status. Hence, thenull hypothesis, HO2 is rejected and thealternate is accepted.

Figure 2: Mean plot of marital status andpsychographic score

Part -C: Relationship between educationand the purchase pattern.

Table 5 shows the descriptive analysis forthe relationship of education and thepsychographic purchase behavior for thefemales shopping in the top-rated storesof Delhi malls for female apparels andaccessories. The test of differencesreported using ANOVA has come out tobe statistically significant (F= 15.79, p<0.05). The highest psychographic scorewas reported by females who were post-graduates and the lowest by those withsenior secondary education.

Education N Mean ±S.D. F(significance level)

Senior secondary 21 217.66±55.77 15.79 (0.001)

Graduation 152 241.22±43.45

Post graduation 272 266.49±44.53

Others 111 252.34±44.73 Table 5: Descriptive analysis of respondents’ education and psychographic score

(Respondent Education)x

(Respondent Education)y

Mean Differ. (x-y)


Lower Bound

Upper Bound

Senior Secondary

Graduation -23.55 .02 -44.02 -3.10

Post Graduation -48.82 .001 -68.73 -28.92

Others -34.67 .001 -55.58 -13.76

Graduation

Senior Secondary 23.55 .02 3.09 44.02

Post Graduation -25.27 .001 -34.17 -16.37

Others -11.11 .05 -22.09 -0.15


Post Graduation


Graduation 25.27 .001 16.37 34.17

Others 14.15 .005 4.25 24.05

Others


Graduation 11.11 .04 .14 22.09

Post Graduation -14.15 .005 -24.05 -4.26

Table 6: Post hoc analysis of education level and psychographic scoreThe post hoc analysis ( LSD) as shown inTable 6 depicts that females with differenteducational backgrounds behavedifferently in making purchase decisions forfemale apparels and accessories which isseen to be statistically significant as p<0.05in all the cases . The mean plot shownbelow states that highest purchase patternwas shown by the females who were post-graduates and minimum by the ones withsenior secondary education. Hence, thenull hypothesis, HO3 is rejected and itsalternate is accepted as it is proven thateducation level and female buying behaviorhave a significant relationship, that too,statistically significant.

Part –D: Relationship between incomeand the purchase pattern.

Descriptive analysis for the relationshipbetween the income levels and thepsychographic purchase pattern is shownin Table 7. The test of differences has beendocumented on a parametric scale usingAnalysis of Variance which was found tobe statistically significant (F=75.85,p<0.05). The highest psychographic scorewas shown by females with an incomebetween Rs (40000-50000) per monthand the lowest by the females earningbetween Rs (20000-30000) per month.

Figure 4: Mean plot of education level and psychographic score


Income N Mean ±S.D. F (significance)

Less than Rs 20000 127 227.03±47.64 75.85 (0.000)

Rs 20000-30000 86 217.79±46.73

Rs 30000-40000 110 255.41±25.72

Rs 40000-50000 114 292.40±33.06

Above Rs 50000 119 275.12±30.03

Table 7: Descriptive analysis of income and psychographic score

(Income per month)x

(Income per month)y Mean Difference

(x-y)


Lower Bound

Upper Bound

> Rs 20000

Rs(20000-30000) 9.24 .078 -1.03 19.52

Rs(30000-40000) -28.37 .001 -37.96 -18.79

Rs(40000-50000) -65.36 .001 -74.86 -55.86

<Rs50000 -48.08 .001 -57.47 -38.69

Rs (20000-30000)

> Rs 20000 -9.24 .078 -19.52 1.03

Rs(30000-40000) -37.62 .001 -48.22 -27.03

Rs(40000-50000) -74.61 .001 -85.12 -64.09

<Rs50000 -57.33 .001 -67.75 -46.91

Rs(30000-40000)

> Rs 20000 28.37 .001 18.79 37.96

Rs(20000-30000) 37.62 .001 27.03 48.22

Rs(40000-50000) -36.98 .001 -46.82 -27.14

<Rs50000 -19.71 .001 -29.44 -9.97

Rs(40000-50000)

> Rs 20000 65.36 .001 55.86 74.86

Rs(20000-30000) 74.61 .001 64.09 85.12

Rs(30000-40000) 36.98 .001 27.14 46.82

<Rs50000 17.27 .001 7.63 26.92


<Rs50000

> Rs 20000 48.08 .001 38.69 57.47

Rs(20000-30000) 57.33 .001 46.91 67.75

Rs(30000-40000) 19.70 .001 9.97 29.44

Rs(40000-50000) -17.27 .001 -26.92 -7.63

Table 8: Post hoc analysis of income levels and psychographic score

Post hoc analysis of income levels and thepsychographic score has been shown inTable 8 and its mean plot has beendepicted in Figure 4. It is quite clear thatfemales earning between Rs 20000-Rs30000 per month had a lower scorethan the females earning below Rs 20000,yet it is not statistically significant as p>0.05.There exists statistically significantdifference in the purchase behaviorbetween all other income levels. Hence,

Figure 4: Mean plot of Income level and psychographic score

the null hypothesis HO4 is rejected and thealternate is accepted as there exists asignificant relationship between incomeand the purchase pattern of femalestowards women apparels and accessoriesin Delhi malls. The mean plot shows theresult graphically showing highest score forfemales earning Rs (40000-50000) permonth and the lowest for the ones earningRs (20000-30000) per month.


RESULTS AND DISCUSSION

It is found from the study that demographicfactors, namely, marital status, educationand income have a statistically significantrelationship with the psychographicpurchase behavior of females for womenapparels and accessories in Delhi malls. Itwas also found that age doesn’t have asignificant (statistically) relationship withpsychographic purchase behaviour, still,purchase behavior varies with varying age-groups even when it didn’t reach the levelof statistical significance. Severaldemographic studies in the past conductednationally and internationally show mostlysimilar and few dissimilar results.

The current study revealed that with thechange in the age group, the purchasepattern changes even when it is notstatistically significant over all age groups.The highest rating was reported by femalesfrom 30-40 years followed by 18-30years, then, above 50 years and lowestby 40-50 years old. Awan A. & AbbasN. (2015), found significant relationshipbetween age and purchase behavior withyoung consumers being more impulsive inpurchasing than the older ones .Also,Srinivasan, et al (2014) in his study onimpact of age on the purchase behavior ofluxury products revealed the existence ofrelationship between age and the kind ofluxury product that consumers intend tobuy. Infact, young buyers till the age of 40reported higher rating for financial andmaterialistic value of products than theolder generation. Ghani U. & Jan F.A.(2011) found that age has a significant

association with buying behavior. DilworthA. & Boswell, (2007) and Rocha et al(2005) found that the requirements forclothing and fashion products vary withvarying age groups. Saluja D. (2016) onthe contrary found that age and incomedidn’t have any impact on the purchase offashion clothing.

Marital status also showed statisticallysignificant relationship with the femalebuying behavior with unmarried femaleshaving higher psychographic score than themarried ones. The results seem consistentas several studies in the past reportedexistence of relationship between maritalstatus and the buying behaviour. SrinivasanR., et al (2015) found that married peoplespent more on luxury bags than the oneswho were single and apparels werepurchased by all luxury consumersirrespective of the marital status. However,Sharma KC & Kaur S. (2015) found thatmarital status significantly affects thepurchase score impulsiveness of theconsumers. Even, Mazloumi S., et al(2013) in his study to assess the impact ofdemographical differences on the purchasebehavior found that consumers’ maritalstatus affected their purchase behavior andit was statistically significant.

Education also has significant relationshipwith the female purchase behavior showingthe highest psychographic score for post-graduates and the lowest by those havingsenior secondary education. On the samelines, Awan A. & Abbas N. (2015) foundthat education had positive significantassociation with impulsive buying

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behaviour. Bashar A, et al (2012) in theirstudy about impact of demographics onconsumer buying in Delhi-NCR reportedthat education had significantly positiverelationship with consumer buying.

This study also reports the existence of asignificant relationship between incomeand the purchase behavior of femalerespondents. According to the study, thehighest purchase score is documented forfemales earning Rs(40000-50000)permonth followed by above Rs50000 permonth , then for Rs(30000-40000)permonth , less than Rs 20000 per month andthe least for Rs(20000-30000)per monthearnings . Rajput N.et al (2012) in thestudy about female buying regardingapparels found that rise in the income ofthe consumers (females) leads to rise inthe frequency of apparels purchase bythem. Bashar A, et al (2012) supportedthe current results as even they foundincome to have significant relationship withconsumer purchases. On the same lines, itwas documented by Schiffman & Kanuk(1997) that the consumers, especially whoare low income earners are alwayseconomical in their purchase decisions.Myers, Stanton & Haug (1971) alsoclaimed income as a major determinant forthe consumers’ propensity to spend .

Managerial Implications andRecommendations

This study has resulted in severalmanagerial implications andrecommendations. Marketing managersare recommended to lay due emphasis on

female customer demographics whiledeveloping the segmentation strategy.They should soundly segment the apparel-accessories market on the bases ofdemographic variables as these variableshave shown a significant impact on thefemale buying behaviour. Thepsychographic score for purchase ofbranded clothes by post graduates andhigher income group came out to be thehighest, so marketing managers need tostrengthen the brand image of theirproducts and spend substantially on themaintenance of their brand image.Customer relationship management shouldbe practiced by the brands through startingloyalty programs, premium membership,special offers etc. along with a highlyattentive sales force attending the shoppersin the stores.

Conclusion

It can be concluded from the currentresearch that there exists significantrelationship between the demographicvariables; marital status, education, incomeand the psychographic purchase patternof female customers for women apparelsand accessories in Delhi malls. The nullhypothesis; HO2, HO3 and HO4 except HO1have been proven void and the conclusionsare established that the changes in maritalstatus, the education level and the incomelevel of female customers brings significantvariations in their purchase behaviour.Based on age, the highest purchases wereshown by the females in the age-group of30-40 years. The reasons attributablecould be higher income during this age and



higher levels of exposure and status needs;especially with working females. Basedon marital status, highest score was shownby unmarried females. The possiblereasons could be that single females aremore independent in their decisions andthey don’t necessarily have to depend onspouse’s opinion while making purchasedecisions. Also, post graduates displayedthe highest purchase psychographics. Itcould be attributed to the higher level ofeducation that implies higher exposure andawareness propelling the purchase ofbranded female products. Even, highereducation brings about better incomeprospects as working females whichfinancially empowers them to spend more.Higher income, especially between Rs40000-50000 per month showed higherpsychographics score for purchases inDelhi malls. This could be quite possibleas higher the income, higher is the economicstrength to spend. These demographicvariables have been studied individuallywith respect to the psychographicvariables. So, there is a future scope forthe study to be further extended bystudying the clustered impact on thepurchase pattern of female respondents.Additional studies can also be conductedto examine consumer-life styles by use ofproduct brands and even more productoptions. The current study is static in natureas it examines the psychographicpurchases in one particular time period.Therefore, there is a vast scope foradditional studies that may look at this topicin a more longitudinal and cross–sectional

manner. Further studies may evaluate thelife-styles of various demographic, socio-economic and cultural groups, along withthe studies of a comparative nature cangive richer insights into this subject underthe researched area of inquiry.

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17Parikalpana - KIIT Journal of Management

PERFORMANCE OF A FIRM IN THE WAKE OF WOMENEMPLOYEES IN KEY POSITIONS: AN OVERVIEW

N. SrividyaPost-Doctoral Research Fellow, NCE Bengal, Jadavpur University, Kolkata, West Bengal

[email protected]

Rita BasuAssociate Professor, NCE Bengal, Jadavpur University, Kolkata, West Bengal,

[email protected]


ABSTRACT

It is well known that the number of women in top positions in corporateworld in India is very less or even negligible except one or two caseshere and there. We can find many women employees in lower levels andmiddle levels of the management but as we go up the corporate laddertheir number decreases exponentially. Whatever ways the governmenttrying to encourage them to boost their numbers, their number alwaysremained very low at the board levels. This paper studies the reasonsand remedies for this. It suggests few recommendations also to followto increase their number in the top positions.

This paper is based on a research conducted on the women employees inprivate sector companies about their aspirations and the preferencesbetween the family and career etc. The responses are analysed andpresented in the form this paper.

Key Words: Women at Work, Work-family Conflict, female CEOs, boarddiversity, gender diversity.

INTRODUCTION

Gender plays a major important role in thework place of corporate sector in severalways. Most of the work force is men inall levels and howmuch ever thegovernment tries to boost the number ofwomen employee giving them variousreservations, facilities etc, their number is

always low especially in top management.Even the corporate governance, humanresource management and all othermanagement fields suggest work forcediversity to enhance the quality ofdecisions take in corporate world.Recently Indian government made it legallyrequired having a female board member


in their companies. Such was theimportance of female role in the boards.

Though the number of women employeesin increasing over years, it is not enoughto meet the requirements of corporateworld. The HRM itself is very muchknown for its feminized image and the jobrole requires mostly females. It is ofsignificance to note that despite HRMbeing a feminized profession and having acompelling feminized image, till latewomen did not have the same status,position, authority, or pay as their malecounterparts and were relegated tocarrying out stereotypical and non strategicfunctions in this domain (Brandl et al.,2007a; Brandl et al., 2008b; Brandl et al.,2008c). Legge (1987) argues that womenin HR confront a paradox, when thefunction is marginal to strategicmanagement, “women can reach the top”yet when the function is seen as acompelling contributor to the strategicdecision-making then women, if notelbowed out are politely pushed aside”(pp.34). Empirical research shows thatfemale HR managers are underrepresentedin higher level positions (Canniffe, 1985;Legge 1987; Gooch 1994; Long 1984;Mackay 1986; Monks, 1993; Roos andManley 1996).These have all lead womento remain clustered in lower level positionsin this domain and they were thus unableto occupy top management strategicpositions (Legge 1897; Pichler et al, 2008;Simpson and Lenoir 2003). EqualOpportunities legislation has had a limitedimpact in advancing women in work

generally and little has changed andemployers have embraced the legislationand not the spirit of the law (Ross andSchneider, 1992; Kandola and Fullerton,1994) and women in HRM have been noexception to this norm. Astrid et al (2010)in their latest study on the rise of womenin HRM, emphasise that there is a needfor universal standards of E.O. andorganisations will need to endorse to theseprinciples to legitimate themselves to thepublic. The study also suggests that theinherent limitations of the E.O. legislationhave evidenced the rise of diversitymanagement as the new model for equalopportunities according to which theadvancement of women into topmanagement is not only necessary forrealizing equal opportunity principles butalso to enhance organisationalperformance (Kelly& Dobbin,1998), thishas thus led organisations to re-interpretthe presence of women to top managementno longer as an act of compliance tolegislation but also as an activity thatenhances competitive advantage and isbeneficial to organisations. This studyproposes with empirical findings thatcontemporary management of diversityapproaches, accompanied by theliteratures on sexual stereotypes, enablingsocial practices such as guaranteedmaternity leave and public child-carefacilities, gender egalitarianism i.e. betterequality between males and females innational contexts, and increasing humancapital are factors responsible for the riseof women in this domain in recent times

19

(Brandl et al., 2007a; Brandl et al.,2008b; Brandl et al., 2008c; and Reichelet al.,2010). (Wajchman, 1998). “It hasfrequently been noted that personnelmanagement is a traditional stronghold offemale employment”(Marshall, 1984 pp,115). At the very beginning when HRMwas viewed as a “typical” female function,with the stereotypes used in that system, ittended to be concerned with taking careof others (Canniffe 1985; Gooch &Ledwith,1996) and bridging capital andlabour (Gooch,1994) and has beendefined as ideal job for women. Scholarsjustify these developments as therepresentation of women within HRMdepends on the appeal of the occupationto men (e.g., Legge 1987; Roos/Manley1996). A core argument for why womenget ousted is that employers tend to favormen for HRM when the occupation’sstatus is high (Reskin&Roos, 1990). Forexample, when the upcoming of scientifictesting instruments modified the image ofHRM from welfare to a professionalfunction, the share of male HR specialistsincreased (Trudinger, 2004). It is importantto note that a close relationship betweenstatus decrease and rise of women’srepresentation or vice versa could beobserved in the early stages of HRM untilthe end of the 1980 s (Roos/Manley1996), Legge (1987, pp.50) argues that“women’s position in personnelmanagement will inversely reflect thepower of the function”. The 1990 s havewitnessed a dramatic & complete reversalof this trend with fresh empirical findings

from several European countries whichindicates that the increased entry of womenis not accompanied by status deprivationof the HRM profession and that theincreased feminization in this domain isaccompanied by high status of theprofession and this essentially forms theessence of this study (Reichel et al., 2010).Gender diversity has become the top mostpriority to the companies as only 8.7 percentof top managers are women in 2011(Bureauof Labor Statistics). Nearly half of the workforce is women and the percentage ofwomen employees in top positions hasincreased from 5.8 percent in 2000.

Raising Aspirations

To increase the numbers of womenemployees in organisations first we needto inspire them to achieve the high levels.They need to raise their aspirations tobecome a part of top management. It iswell known that in academics and studies,girls outstand well the boys in the results,but when it comes to the workplace, wefind most of the employees are gents. Tosome extent we can find women who areunmarried in large numbers. But thenumber of married women decreases.Further, women who are mothers are reallyin low number in the workplace, forgetabout the top positions in corporate. Inthe junior levels the percentage of womenemployees is 69. Department heads andchief executives are 40 and 24 percentrespectively.

1.1 Strategies to improve their numbers

In fact to increase their numbers in

Performance of A Firm in The Wake of Women Employees ...


managerial positions, the effort should startearly in their life right from their education.They need to inculcate the leadershipabilities and the managerial qualities rightfrom their childhood. They need todevelop the skills and the talent from theyounger age (Lord Hesteltine, 2011).They need to have the confidence andshould be aware of the opportunities intheir field. We should recognise the talentfrom the younger age.

The barriers that exist in previous years toreach high do not exist now. But someother barriers are emerging to obstruct thegrowth of the women employees.

To maintain the number in the top positionswe need to feed the pipe line from thebottom to the top. For this we should havesufficient women talent to promote themto each level. However there is a hugegap between the aspirational levels of malecounterparts of women. Most of the menaspire to become the board members ordirectors etc. where as the aspirations ofwomen are quite low compared to them.Most of the women they concentrate ontheir family, their child’s education, studiesetc. Many women even they are wellqualified or well suited, they do not applyfor promotions fearing the greaterresponsibilities, higher or randomschedules of timings in the office etc.Women lack long term ambitions, goalsor career aspirations.

Women need to develop and expand theirnetwork for better job opportunities.They need to develop the necessary skills

and talent to bridge the gap between theirjob and their dream career. Developingtheir skills and the talent boosts theirconfidence to reach the higher levels andto realise their actual potential.

Allowing flexible timings and work fromhome can help the women to balance theirwork and family life. In fact it can befurther extended to males also to motivatethemselves. This will help the mothers totake care of their babies and the work aswell. Many fathers are also now a daysopting for the work from home due to theirparental obligations of the child birth. 72percent of women and 60 percent of menare in support for the parental leave. 22percent of women cite the work lifebalance as an obstruction to climb thecorporate ladder. The flexible timings canbring more enthusiasm and good moral inthe work environment which itself is a greatmotivator for high performance.

But for going for flexible timings, the companyhas to monitor the performance of theemployees very tightly so that theperformance should not get affected becausethe employee is not at the workplace. Childcare is the main reason that is cited by manywomen employees for not growing in theircareer. The flexible timings can address thatissue. The flexible workers should not betreated inferior as they are not quite visibleworking at the office. Because of this childcare factor only they prefer to work as parttime employee with flexible timings. Givingthem right job after their return after the childbirth and employing a mentor for them helpsthe situation.

21

Research Methodology

Research Problem

The number of women employees in theorganisations that too in the top levelmanagement is alarming. The governmentis taking action to raise the number throughvarious ways. Recently it has passed aresolution that the board should consist ofwomen atleast in single number. Due tothis reason, most of the companies adoptedtheir own wives as their board membersbypassing the very purpose of the resolution.

It is well known that in the studies andacademically also we always find girlstudents excel academically be it 10th class,graduation or any competition exams. Butwhen it comes to the corporate field theirnumber is critically low, almost negligiblein the top management.

This paper studies all these factors and triesto find out some suggestions and ways toimprove their number in the management.

Objectives of the Study

In this paper, we study the aspirationallevel of women employees in their careers,their beliefs, values etc. This paper alsosuggests various ways to improve thepresence of women employees in thecorporate world to develop the work forcediversity. However, precisely theobjectives of this research can as follows:

1. To study whether there is anyrelationship between the age of thewomen executives and their desire toaspire the top position in theirrespective companies.

2. To study the relationship of their levelin the management and their choicebetween their career and family whentheir children’s studies are at stake.

3. To understand whether the family typeof women executives really play a rolein choosing the career and family.

Scope of the Study

This study concentrates on the womenpreferences in their career and their family.This study tries to understand the reasonsfor low number of women executives inall the levels of the management especiallyin top level.

Collection of Data

This study collects the data both fromprimary and secondary resources. Theprimary source is a questionnairedeveloped and the data is collected bycirculating it. Secondary sources arevarious journal, research papers,magazines and newspapers etc.

Limitations of the Study

This study is limited to only womenexecutives in lower and middle levelmanagement. The access to womenexecutives in top level management ishighly restricted. The results of this studycannot be generalised over national leveland for everybody. There may be littleerrors or discrepancies while collecting thedata through questionnaire.

Sampling

Sample Size: 104; Sampling technique:Random Sampling



Hypotheses

1. Ho1: There is no significant relationshipbetween the age and the aspiration toreach the top in the women employeesin the organisations.

2. Ho2: There is no significant relationshipbetween the level in the organisationand their preference between theircareer and family.

3. Ho3: There is no significant relationshipbetween their family type and theirpreferences between their career andfamily.

Table I-A : Age wise Comparison of Means value of aspiration to top position

Age Mean N Std. Deviation 20 - 29 2.600 40 1.0328 30 - 39 2.250 32 1.1072 40 - 49 1.750 32 0.4399 Total 2.231 104 0.9777

Data Tools used for Analysis

Comparison of means, Oneway Anovaand t-Test are used to test the hypotheses.

Data Analysis

To verify the null hypothesis, age wisecomparison of mean values of aspirationto reach top position was calculated andshown in Table IA. Oneway Anova wasconducted to verify the significant variationof aspiration due to variation of age.

Ho: There is no significant relationshipbetween the age and the aspiration toreach the top in the women employees inthe organisations.

Interpretation:

It is showing that the Mean for the ages 20 to 29 is maximum. Means there are manypeople in that age group who aspire to reach top position in their organisations.

Table I-B : One-way Anova to identify significant variation of aspiration Top_Positiondue to variation of age

Sum of Squares df Mean Square F Sig. Between Groups 12.862 2 6.431 7.588 0.001

Within Groups 85.600 101 0.848

Total 98.462 103 One-way Anova is done because age is fallen between three groups.

23Performance of A Firm in The Wake of Women Employees ...

Interpretation:

The P value is very low (< 0.05) means the there is significant relationship between theage and their aspirations to reach top position.

3.2 To verify the null hypothesis, level wise comparison of mean values of preferencebetween career and family was calculated and shown in Table IA. Oneway Anova wasconducted to verify the significant variation of aspiration due to variation of age.

Ho: There is no significant relationship between the level in the organisation and theirpreference between their career and family.

Table II-A : Level wise comparison of means for the preference between family andcareer

Occupation Mean N Std. Deviation Middle Management 3.000 32 0.7184

Lower Management 3.000 72 0.9494

Total 3.000 104 0.8813

Interpretation:

It is shown that the Mean value for both middle and lower management is same. Thereis nobody in the top level management in the data.

This means that the preference between the career and the family that is (tendency ofleaving job due to their children studies) is equal for both the groups.

Table II-B : ONEWAY Anova to find out occupation wise differences in theirpreference to family and career

Sum of Squares df Mean Square F Sig. Between Groups 0.000 1 0.000 0.000 1.000

Within Groups 80.000 102 0.784

Total 80.000 103

Interpretation:

The P value is very low (< 0.05), which means that there is significant relationshipbetween the occupation (i.e., the level in the management) and the preference to leavetheir jobs for their children studies.


Table II-C : t-Test to find out Occupation wise variations in their preference betweenfamily and career

Occupation N Mean Std. Deviation

Std. Error Mean

JobVs Children_Studies

Middle Management 32 3.000 0.7184 0.1270

Lower Management 72 3.000 0.9494 0.1119 Interpretation:

It is shown that the Mean value for both middle and lower management is same. Thismeans that the preference between the career and the family that is (tendency of leavingjob due to their children studies) is equal for both the groups.Table II-D : Independent Samples Test to find out occupational wise variations intheir preference to family and career

Levene's Test for Equality of Variances t-test for Equality of Means

F Sig. t df Sig. (2-tailed)

Mean Difference

Std. Error Difference

95% Confidence Interval

Lower Upper

JobVs Children_ Studies

Equal variances assumed

1.569 0.213 0.000 102 1.000 0.0000 0.1882 -0.3732 0.3732

Equal variances not assumed

0.000 77.433 1.000 0.0000 0.1693 -0.3370 0.3370

Interpretation:

The P value is very low (< 0.05), which means that there is significant relationshipbetween the occupation (i.e., the level in the management) and the preference to leavetheir jobs for their children studies.

To verify the null hypothesis, family type wise comparison of mean values of preferencebetween career and family was calculated and shown in Table IIIA. t-Test was conductedto verify the significant variation of aspiration due to variation of age in Table III-B.

Ho: There is no significant relationship between their family type and their preferencesbetween their career and family.

25Performance of A Firm in The Wake of Women Employees ...

Table III-A : Family wise Comparison of Means of their preference to family andcareer

Family_Type Mean N Std. Deviation Nuclear 2.857 56 0.9987

Joint 3.167 48 0.6945

Total 3.000 104 0.8813

Interpretation:

The mean for the Joint families is more compared to that of nuclear families. Thisshows that the preference to leave job due to children’s studies is more in joint familiescompared to nuclear families.

Table III-B : t-Test to find out Family Type wise variations in their preference tocareer and family

Family_Type N Mean Std. Deviation Std. Error Mean


Nuclear 56 2.857 0.9987 0.1335

Joint 48 3.167 0.6945 0.1002

Interpretation:

The mean for the Joint families is more compared to that of nuclear families. Thisshows that the preference to leave job due to childrens’ studies is more in joint familiescompared to nuclear families.

Table III-C : Independent Samples Test to Family Type wise variations in theirpreference to career and family

Levene's Test for Equality of

Variances t-test for Equality of Means

F Sig. t df Sig. (2-tailed)

Mean Difference

Std. Error Difference

95% Confidence Interval

Lower Upper


Equal variances assumed 4.394 0.039 -1.805 102 0.074 -0.3095 0.1715 -0.6497 0.0306

Equal variances not assumed -1.854 98.044 0.067 -0.3095 0.1669 -0.6407 0.0217

Interpretation:

As there are only two categories in family type we do t-Test. The P-value (0.039 <0.05) is very low. Hence we can conclude that there is no significant relationshipbetween the family type and their choice between their career and family.


Findings, Suggestions and Conclusion

Findings

From the above analysis it can be easilyfound that whatever may be the family typeand their occupation i.e., their level in themanagement women prefer family to theirjob when it comes to their children studies.When it is joint family the tendency is muchmore and for the nuclear families thetendency is little lower. In addition to it,women employees in their younger agethey aspire more to reach top position etc.But when the age grows, that is when theirresponsibilities grows that aspiration levelcomes down. That is the main reason forthe low number of women employees inthe higher levels of the management.

Suggestions

The following suggestions can be madeafter the analysis to rectify the situation.

§ Raising aspirations of the womenemployees is a right tactic to increasetheir number in the organisations.

§ The management and leadershipdevelopment techniques should startearly so that they develop themselvesvery early.

§ The number of women employeesshould be maintained at all levelssufficiently so that the pyramid is full allthe time.

§ The women should be given morecareer oriented goals so that they staymotivated at all levels.

§ If there are any barriers in case ofwomen in promoting them orencouraging them, we should removethem.

§ Offering flexible timings of work willdefinitely increase their number atwork.

Recommendations For employers

§ Always try to maintain the sufficientnumber of women employees in yourteam at all levels.

§ Encourage both women and men tobalance their work life balance byadopting healthy environment.

§ Encourage flexible working hours forall.

§ Measure their performance by resultsnot by their mere presence at desk.

§ Encourage working flexible, remotelyand part time without compromising onthe results.

§ Create supportive networks for femalemanagers and encourage mentoringopportunities.

§ Prepare potential female managers byproviding them necessary training anddevelopment from the early stage.

§ Never give a chance to perceive thatwomen are not given fair chance at parwith men.

§ Connect with academic institutions toimprove aspirations of young girl

27

students and hire them if they havesufficient talent.

§ Design the performance appraisal sothat the parental leaves and work familybalance is neutralised for womenemployees.

§ Encourage smooth transmissionthrough before, during and afterparental leaves.

§ Encourage senior talent to nurtureyoung talent.

§ Ensure internal skills to createcompetitive advantage

§ Ensure that there is no bias inperformance appraisal and trainingprograms.

§ Encourage creche’s or baby sit outs forfemale employees in the organsiation.

§ Provide mobility support for employeeswho get transfers.

For individual female managers

§ Frame your goals what you want toachieve in your career.

§ Name them as short term, medium andlong term oriented.

§ Assess your current situation andcompare it with the vision of success.

§ Monitor your progress up to date.

§ List out the barriers you face inachieving your goal.

§ Name your efforts to reach your goals

§ If you have to improve yourqualifications, skills or talent, list outvarious avenues to do so.

§ Network with your friends andsupporters those are both internal andexternal to your organisation.

§ Explore if there is any flexible workingoptions

§ Negotiate your salary in a better way

§ Engage moderately in social media

§ Try to identify your mentor or supporterif any in the organisation to achieve yourgoals.

§ Closely monitor your progress towardsyour goal and long term needs and ifnot try to take necessary actions torectify the problem.

§ Help others achieve their goals andbalance their work and family life. Inturn they would definitely help you.

For Government

§ Take audits regularly to find out whetherthey maintain sufficient gender diversity.

§ Focus on the whole talent pipeline notonly the board rooms. Unless the talentline is full, board rooms cannot be full.

§ Maintain greater transparency andcorruption free environment.

§ Appreciate and reward the companies



who maintain sufficient gender diversityat all levels.

§ Encourage women by providing moreoptions like work from home,flexibility, more number of days formaternity leave, flexibility in workingconditions and locations etc.

§ Integrate academic and skill system sothat young talent gets nice jobs.

§ Encourage female networking andmentoring programs

§ Design skill building programs forwomen and support services andfacilities to balance their work andfamily life.

Conclusion

From the above study we can easilyconclude that to improve the number ofwomen employees is required commitmentfrom all the sides like government, topmanagement of the companies and fromthe women themselves.

The gender diversity is most sought afterin the corporate world now-a-days toimprove their performance as well.

This paper suggested various ways andtechniques that can be implemented in theirrespective levels. By adopting those, thenumber of women employees in the toplevels can be improved gradually.

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Zhang X, Bartol KM. 2010. LinkingEmpowering Leadership and EmployeeCreativity:The Influence of PsychologicalEmpowerment, Intrinsic Motivation, andCreative Process Management. Academyof Management Journal 53 (1): 107-128.

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IMPACT OF INTRINSIC MOTIVATIONAL FACTORS ONEMPLOYEE RETENTION AMONG GEN Y:

A QUALITATIVE PERSPECTIVE

Swati MishraResearch Scholar, School of Management, KIIT University, Bhubaneswar; Odisha, India.

[email protected]

Sumita MishraAssistant Professor, School of Management, KIIT University, Bhubaneswar; Odisha, India.

[email protected]


ABSTRACT

Employee commitment, high productivity and retention strategies arethe most serious human resource management challenges of the upcomingfuture. In this scenario employee turnover has a significant impact ondecline of productivity and failure of corporate plans. The significanceof motivation in retaining key employees cannot be overlooked. Extrinsicmotivation is driven by reinforcement contingencies which is notsufficient, so it should be guided by intrinsic motivation which involvesinteresting job and making it pleasurable. Today’s organizations are facingimmense challenge because of fulfilling the requirements of fourgenerational cohorts. Present workforce is dominated by generation yemployees who have different values system and requirements incomparison to previous generations. Therefore it is vital for theorganization to chalk down their needs and design an effectivemotivational system which will increase their productivity. This paperaims to focus on qualitative analysis to explore different intrinsicmotivational factors influencing generation y employees and theirpreference for motivation. Conclusion and implications for furtherresearch have been drawn from the analysis.

Key Words : Intrinsic Motivation, Extrinsic Motivation, EmployeeRetention and generation y

INTRODUCTION

Irrespective of recruitment expenditure theproblem of right people at right place at

right time is a burning topic in the corridorof human resource management. Anadverse economic situation post 2001forced companies to retrench employees.

Parikalpana - KIIT Journal of Management


This created a highly speculative workenvironment and gave rise to chaos,mistrust, confusion among workers. Inthese situations human resource managerswere given the difficult task to retainemployees who had zero faith in them(Mitchell, 2012). To cope up with this kindof aggressive situation the managers couldnot depend upon the obsolete bookishtheories rather they have to understand themarket realities, the mindset of theworkers and innovate techniques that arecreative and flexible in nature (Aamri,2010). Each employee belongs to differentenvironment with respect to culture,language, family background, economicconditions thus creating a vast workforcediversity to deal with. Their belief and valuestructure differ not only cross-sectionallybut also in time trend.

Traditional theorists support extrinsicmotivational factors that dominateemployee performance but new theoristslike that of Deci and Ryan (1985) supportthe existence of intrinsic motivationalfactors that inspires employees inremaining creative, skilled and talented.The purpose of the current paper is toexplore different intrinsic motivationalfactors perceived by Generation Yemployees which will be instrumental inretention. The analysis is being done mainlyto draw inferences and directions forfurther research.

Causes of labor turnover Agrela,et al (2008) discovered various causes oflabor turnover like lack of opportunitiesfor professional development, insufficient

Compensation, monotony/lack ofChallenge, deprived work life balance, jobStress and unreasonable treatment, lackof motivation, uncooperative workenvironment, lack of vision, lack ofemployee engagement programs, feelingundervalued, freezing of Praises andpromotions and lack of coaching andfeedback.

Review of Literature

Motivation

Daft and Noe (2001) highlight motivationas the strength either within or external toa person that energizes, directs, andmaintains behavior. Motivated employeesdo not shy back from doing somethingwhich is away from the expected traditionalbehavior in the working environment. Theirmotivation directs them to perform the taskirrespective of lack of short term rewards.Latham (2004) defined a motivatedemployee may not perform well if the othermembers in the group are not dynamic.Human behavior depends on the responsethat he gates from the society for his everyaction and accordingly carries forward thesame pattern throughout his life.Researchers have very often focused onextrinsic factors because of its easyaccessibility and simple understanding.Selecting variables to measure intrinsicmotivation has always been debatable.Anne and Barry (2005) said thatpsychologists have tried to provide ascientific reason behind why peoplebehave the way they do in various workingconditions. They have suggested that

33

motivation is the factor that energies andprovides zeal to react or proceed in anactivity. Bennet (1995) defined the theoriesof motivation can be bifurcated in tocontent theories and process theories.Content theories focuses on what ofmotivation i.e. what are needs that motivatean employee in an organization to providehigher productivity and process theoriesfocuses on how of motivation i.e. how themotivation process takes place for anindividual. Pinder (1998) defined thedegree of work motivation towardssuccessful completion of goal varies fromindividual to individual within the sameorganization because it not only dependson external environmental factors but alsois generated from within each individual.Snr Asiamah (2010) in his dissertationreport highlights some commonmotivational factors that leads to jobsatisfaction and employee retention inorganizations which results into reductionin labor turnover. Thomas (2000) furtherdiscussed that management researchersand theorists’ thought are dominated bystudies on extrinsic motivators but suchfactors fails to justify the purposecompletely. These factors needed to becomplemented by intrinsic factors as it isthe demand of today’s environment.

Intrinsic Motivation

Deci and Ryan (1985) the pioneers ofextrinsic and intrinsic motivation theory saidthat the activities that provide reward andpleasant in nature are grouped underintrinsic motivation and the activities whichgive immediate reward or avoids a

punishment grouped under extrinsicmotivation. Deci and Ryan (2008) in theirtheory which is more popularly known asSelf-Determination theory (SDT) highlightsthe key difference between motivations,whether they are autonomous ormeasured. Autonomous motivation isdefined as being volitional, which meansactions are self-directed and self-governed. Preference is the key issue inautonomous motivation. Controlledmotivation is shaped by situations wherepressure or demand on the individual isfrom forces external to the self. They alsobelieve that the vast mainstream of thefoundations of motivation are accreditedto socio-cultural conditions pertinent to theindividual. They believe that ecologicalfactors are more vital to the study ofmotivation than the actual bio-psychological devices accountable forthem. The SDT model recognizes thesubsistence of intrinsic and extrinsicmotivators. The model is based on thesupposition that people are naturallyinquisitive energetic and excited to succeedbecause these motives are sustaining andrewarding. This basically describes intrinsicmotivation where stimulating, narrativeexperiences, and opportunities for masteryof trials are answerable for behavior. Thisnatural need for growth is an importantelement of other motivation theories, suchas Maslow’s (1943) self-actualization,Herzberg’s (1987) motivation factors, andMcGregor’s (1966) Theory Y. Extrinsicmotivation is accountable for behavior forwhich the aim is to obtain a tangiblepayment or to avoid a punishment.

An Impact of Intrinsic Motivational Factors ...


Employee Retention

Zineldin (2000) defined retention is adifficult concept and there is no singleformula to retain employees in theorganization .It can be defined as anobligation to continue in the job or withthe organization on continuous basis.Logan (2000) postulated commonretention factors such as organizationalculture, communication, strategy, pay andbenefits, flexible work schedule and careerdevelopment systems. According toAgrela, et al (2008) organizations need tofocus on the retention factors as it leads togrowth and success of the organization.According to them retention strategiesshould be oriented towards satisfying needof the employees and organizationalchange as it enhances employeeproductivity and excellence. Boomer(2009) incorporated that retention factorsmust include need and wants of employeesat any age as it will leads to job satisfaction,loyalty and commitment.

Generation Y

According to Kupperschmidt (2000),Generation can be defined as employeescoming under a certain range of age,location they live and experiences they facein different developmental stages. Twengeet al., (2010) defined to generation Y,work is a means to an end; essentially theywork to live as opposed to live to work.Tay (2011) incorporated that in theprevious era senior employees did nothave the opportunity to receive specializedtraining before joining the job but the

current generation (y) has the dual benefitof pre job training as well as sophisticatededucation. This makes them moreprofessional and flexible towards changeand work force diversity. They are greatcollaborators and they are motivated byteam work and have longer retentionperiod. Generation y people are moretechnologically advanced and enjoychallenging competition which stimulatesand amuses them. Yusoff & Kian (2012)suggested that looking at thecharacteristics of generation y whichincludes focused on self career, optimistic,pro diversity approach, team player,technology savvy, fun loving , causal andvalue prompt recognition and reward, itcan be suggested that if generation y getsappropriate intrinsic motivation they willflourish in a new direction to achieveorganizational excellence.

Research Gaps and objective of thestudy

Despite the importance of the topicextrinsic work motivation has been thefocal point for researchers involved inmotivation. Intrinsic motivation researchesare mostly theoretical and have lessempirical backing in comparison toextrinsic motivation. Managers in the pastemphasized on extrinsic factors like money,company policy, and working conditionsto motivate subordinates and it is the solemotivator in all generations.

Therefore the objective of the current paperis to explore different intrinsic motivationalfactors as perceived by Generation Y

35

employees which will be instrumental inretention.

Research Method

The best way to study human behavior andbehavior changes is through Qualitativemethods (Kirk & Miller 1986). Complexhuman behavior is very difficult to becaptured by Quantitative methods(Creswell, 2007).The basic assumption ofqualitative methods is based oninterpretative paradigm which focus onsubjective experience of individuals(Morgan, 1980). Qualitative researchmainly focuses on investigation of complexphenomenon, its authenticity, subjectivityof the research and researcher,contextualization and minimization ofillusion (Fryer,1991). From the dataconceptual framework is drawn rather thanfrom the set hypothesis (Silverman, 2000).Qualitative approach is commonlypopularized as inductive and interactive(Patton, 1980). Understanding humanattitude, behaviors, value system,concerns, motivations, culture or life stylesand aspirations can be better examinedthrough effective use of qualitativemethods (Bogdan, 1975).

Exploring issues, understandingphenomena and answering questions arethe main focus of qualitative research(Creswell, 2007). How people feel/act,why they feel/act certain things can bebetter understood by qualitativeresearcher (Frankfort-Nachmias, 1992).

Case study method is best suitable for thestudy of employee motivation and retention

because of its main objective of completeunderstanding of the situation. (Mitroff &Kilman, 1978).Direct participation andgaining firsthand information aboutdifferent factors affecting employeemotivation and retention is possiblethrough effective use of case studymethod.

Research Design

Single Case & Single unit

In depth investigation and rich descriptionis only possible by single case. Knowledgeand theory building can also be contributedby this. Generalization of the entirepopulation is not possible but analyticalgeneralization to theoretical proposition ispossible through real world discovery.Single case designs can be selected on thebasis 4 factors i.e. if it is a critical case,unique case, typical case and revelatoryor longitudinal case (Yin, 2009). Thisresearch satisfies the revelatory criteria.The researcher tries to reveal differentintrinsic motivational factors influencingemployee retention. Single unit of analysisis selected because of accessibility,resources available and time available.

Data collection instrument

Proper development of an effectiveinterview protocol is critical to the datacollection procedure (Creswell,2007).One of the predominant method ofqualitative research is interview method ofdata collection.50 respondents wereselected for the interview. The reasonbehind for selection was based on the



survey methodology, objective, sampleframe, time and budgetary constraints.

There were 24 questions in the interviewand the answers to the question providedprecious approach to the researchquestions. The questions were veryrelevant towards the fundamentalclarification of the topic. The questionswere set in such a way so that it can explorethe real experiences of employees withinthe organization.

Sampling Procedure

A sample size consisting of 50 respondentswere selected from company X (in orderto maintain confidentiality as signed in theagreement) Bhubaneswar unit. The reasonbehind taking 50 as a sample size is to givea detail coverage and interpretation of theresults. Keeping the following limitationsin to consideration like time, resources andgeography the organization was selected.Selection of the organization was basedon the factors like the size of theorganization, highest number of gen yemployees, the rate of employee turnoverwithin the organization, the approach ofmotivation within the organization andcapacity of the organization to attract andretain quality people.

SAMPLING TECHNIQUE

Purposive sampling method one of the nonprobability sampling method was used toselect respondents for the interview. Thismethod is suitable in reaching therespondents because of the spread of thestudy. The sample size is constituted bydeliberate selection of employees. As per

the objective of the study, the sample wasframed to give effective results.

DATA COLLECTION

INTERVIEWS

As a part of the data gathering processfrom all the departments selected numberof gen y employees was interviewed.Structured interview guide was used forthe interview. This was used for logicalanalysis of views and for positiveresponses given by respondents.Information collected from employees willhelp to explore the motivational packagesgiven by the company to retain its coreemployees.

Without the co-operation of managementsuccessful implementation and completionof the interview was impossible. Foroutlining the purpose of the research, theconfidentiality of the information collected,analyzed and reported, an initial interviewwas done with management .Managementsupport and willingness of employeesclearly visible from the initial interview.

The interviews were conducted on thecompany premises utilizing an office thatmanagement reserved for the duration ofthe interviews. The interviews lasted for 5days. In order to ensure accuracy of thequalitative data the interviews wererecorded. This facilitated easy retrieval andstorage of data.

Discussion of Results

Common intrinsic motivational factorsexplored from the interview of generationy employees are as follows

37

• Job enrichment

Respondents are of opinion that workshould be challenging, interesting, lessrepetitive and there should be assignmentof constructive responsibility. For exampledirect access to top management andgiving the scope to lead a project.

• Job involvement

Job should be accompanied withmeaningful contribution; ability to takedecision, respect to employee’s opinion,open communication and constructivediscussion must be there to enrich the job.

• Employee empowerment

Respondents talked about giving accessto social media, consult with otheremployees, freedom to take on the spotdecision and creating team structure,involvement in hiring decision and givingwork space.

• Creativity

Creativity can be achieved throughorganizational support for taking riskbecause risk is always associated with newapproach towards work, positive workenvironment, training on skill developmentand minimization of back stabbing, legpulling etc.

• Challenging work

For respondents challenging work includesfree from boredom, engagement, alwayslearning new tasks or skills, discoveringpotential and handling multi-skilledpositions.

• Curiosity

Management’s support for encouragingcuriosity, giving direction to employeecuriosity as it is the reason behindemployee creativity which is the result ofgeneration of new ideas, new possibilitiesand excitement.

• Control

Respondents opined that there should becontrol over job related decisions,independent handling of task and givingautonomy to handle problems.

• Competition

Respondent said that there should behealthy competition, immediate feedbackand reward must be given to encourageemployees.

• Co-operation

Respondents are of opinion that thereshould be Open Communication,proactive approach towards handlingemployee problems and positiveenvironment to stimulate employeecreativity.

• Recognition

Recognition involves giving award,appreciation, giving mementoes, verbalpraise and allowing employees to attendconferences, seminars etc.

• Sense of choice

Autonomy for accomplishing the work byown terms, freedom to select workactivities which are meaningful, faith on



employee’s approach towards work andgiving employees the feeling of ownership.

• Sense of competence

As per employee’s knowledge, expertiseand capability recognition must be given.Organizations should try to developemployee competencies through trainingand development and employeecounseling.

• Sense of progress

Proper feedback is a must as it gives thefeeling of accomplishment and keepingtrack of employees whether their movingin the right direction or not. If things areworking out it will generate confidenceamong employees towards the choicesmade. Giving promotion, reward, awardand opportunity to handle crucialassignments are key to employeeprogress.

• Happiness at work

Respondents are of opinion that everybodymust have role clarity, positive workenvironment, no politics, no back biting orleg pulling etc in the organization.

• Career opportunities

There should be equal employmentopportunities, growth opportunities, careerand succession planning and responsibilitymust be given to handle higher projects.

• Learning facility

Training and Development activitiesdesigned to support new employeeorientation, departmental training and

development, professional licenses andassociation memberships, tuition waivers,tuition reimbursements for job-relatedcourses, continuing education courses andjob-related workshops and seminars mustbe arranged for employees.

• Leadership opportunities

Heading a group or team, giving chargefor overseas assignment, decision makingauthority and independent handling ofchallenging work must be given to theemployees.

• Higher responsibility

Respondents said that there should berealistic targets for the employees; higherresponsibility must come with effectivesupervision and designing reward systemfor successful handling of higherresponsibilities.

• Open culture

Maximum respondents are of opinion thatthere must be scope for innovation, peopleorientation, Team work, constructivecriticism, no back stabbing, leg pulling andharassments and atmosphere ofappreciation in the organization.

• Open communication

To inform and educate people to the news,events, and realities of the organization andthe marketplace, to keep trust,collaboration and sharing of ideas throughmeetings is the most for communication.

• Work life balance

Maximum employees are of opinion that

39

there must be work from home facilities,flexible work schedule, day care facilitiesfor children, vacation, giving strictinstructions not to check e-mail or voicemail during holidays and weekends,arranging virtual meetings and givingfrequent breaks.

• Employee engagement

It can be achieved by employee’s roleclarity, giving ideas and expressing views,focused on goals, empowerment,involvement and commitment.

• Talent management

Talent can be managed by performancemanagement, 360 degree assessments,executive coaching, leadershipdevelopment, professional development,career development, recognitionprogrammes, compensation, successionmanagement, employee engagement andretention.

• Knowledge management

Respondents said that there should bescope for knowledge creation,development and sharing via technology.

• Autonomy

Respondents said that there should befreedom from external control,independence and privacy must be givento the employees, freedom to expressviews and methods to accomplish thework

Directions for further Research

The validity of findings of this research can

be tested through quantitative tools with alarge sample size to draw a holisticconclusion about intrinsic motivationalfactors influencing employee retention.

Concluding Remarks

The result shows that the intrinsic workmotivation is an important issue foremployee retention and especially amonggeneration Y employees in theorganization. Effective employeemotivation and retention of skilled andtalented employees should be the main aimof management. Huge turnover createsproblem for not only the employers butalso employees and clients. A lowerturnover means a positive attitude towardsclients. Well pleased clients in returnprovide higher satisfaction scores whichindirectly generate higher revenue. Nowthe time has arrived to think out of the boxand focus on intrinsic motivational factorswhich can also affects employee retentionif properly used by the management. Incoming years maximum employeepopulation will be dominated by generationY employees therefore employers mustdesign the motivational program keepinginto account generation y employees’preference. Extensive researches arerequired to fill the gap and provide newinsights to intrinsic motivation, its forms,applicability and measurement so that itcan also emerged as a powerful tool in thehands of the organization to retain theirgeneration y employees who are dynamic,creative and skilled.



References

Agrela, R., Carr, R., Veyra, V., Dunn, C.,Ellis, D., Gandolfi, A., Gresham, B., King,L., Sims, A., & Troutman, l. (2008).Retention issues and solutions: tools toensure university of California becomes anemployer of choice. Retrieved from http://www.ucop.edu/cucsaldocuments

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Cassell, C., and Symon, G. (1994).Qualitative research in work contexts. InC. Cassell, and G. Symon (Eds.), Qualitativemethods in organizational research (pp. 1-13). Thousand Oaks, CA: Sage.

Creswell, J., W. (2007). Qualitativeinquiry and research design: Choosingamong five approaches.Thousand Oaks:Sage.

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Deci, E.L. And R, M. Ryan. (1985).Intrinsic motivation and self determinationin human behavior. New York: PlenumPress.

Deci, E.L., R. Koestner, and R.M. Ryan1999. “A Meta-Analytic Review ofExperiments Examining the Effects ofExtrinsic Rewards on IntrinsicMotivation.” Psychological Bulletin 125:627-668.

Draft, R.L. and Noe, R.(2001).Organizational Behavior (pp.162-163, 429-430).Fortworth, USA: HarcourtCollege Publishers.

Frankfort-Nachmias, C. N. (1992).Research methods in the social sciences(4th ed. ed.). New York, New York:St.Martin’s Press.

Fryer, D. (1991). Qualitative methods inoccupational psychology: Reflections uponwhy they are so useful but so little used.The Occupational Psychologist, 3 (6),14.

Fryer, D. (1991). Qualitative methods inoccupational psychology: Reflections uponwhy they are so useful but so little used.The Occupational Psychologist, 3 (6),14.

Kian, T., & yusoff,W.(2012).Generationx and y & their work motivation. Paperpresented at international conference oftechnology management: Business and

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Entrepreneurship. Malaysia University,Malaysia, Asia.

Kirk, J., and Miller, M. L. (1986).Reliability and validity in qualitativeresearch. Thousand Oaks,California:Sage.

Latham, G., & Pinder, C. (2005). Workmotivation Theory and research at thedawn of the twenty-first Century. AnnualReview of Psychology, 56, 485-516.

Merriam, S. B. (1998). Qualitativeresearch and case study applications ineducation: Revised and expanded fromcase research in education. (2nd ed.) SanFrancisco: Jossey- Bass.

Ryan, R., & Deci, E. (2000). Intrinsic andExtrinsic Motivations: Classical definitionsand new directions. ContemporaryEducational Psychology, 25, 54-67.

Samuel snr, A. (2011).Exploring the effectsof motivation on employee retention: Acase study of internal revenue service.Master Thesis, kwame NkrumahUniversity, department of businessmanagement.

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Tay, Angeline. (2011).Managinggenerational diversity at the work place:

expectations and perceptions of differentgeneration of employees. African Journalof Business Management, 5(2):249-155.

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Appendix-1

a) What will make you stay in thisorganization for the next 5 yearswithout thinking of leaving?

b) Are you satisfied with the currentmotivational packages that you areenjoying?

c) How does your company rewardoutstanding performance?

d) Does management trust yourdecisions?

e) Has management expectation beenclearly communicated to you?

f) Have your responsibilities beencommunicated to you?

g) Can a good manager –employeerelationship cause employee to beretained?

h) What is your opinion on good workingenvironment?

i) How well is your concerns related topersonal and work life addressed bythe management?



j) What in your opinion accounts for theexit of main stream workers?

k) Are you recognized for your hardwork?

l) Does team leaders support foremployee’s development?

m) Does your company rightly useemployee’s talent?

n) Does your company focuses on goodworking condition to retain itsemployees?

o) What is your opinion about Skilldevelopment as a retention strategy?

p) Does role clarity increase yourefficiency of doing the work?

q) Does employees’ career growth

strategy play a key role towardsemployee retention?

r) Do you get support from managementfor your initiatives?

s) Does your company involve you indecision making?

t) Does your organization believe in fairCompensation?

u) What is your perception about gen y’spreference of work life balance?

v) Do you get Manageable amount ofwork in your organization?

w) Are you satisfied with yourorganization?

x) What are the Gen y preferences

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43Parikalpana - KIIT Journal of Management

UNDERSTANDING DYNAMICS OF KMS ADOPTION ININDIAN ITES ORGANIZATIONS

Amit VikramManager, Cognizant Technology Solutions

Mohammad Israrul HaqueProfessor, Department of Business Administration, Aligarh Muslim University

Ganesh SinghDirector, PhD program in Business Administration

All India Management Association- Centre for Management Education

Sathya Swaroop DebasishAssociate Professor, Dept. of Business Administration

Utkal University, Bhubaneshwar, Odisha, [email protected]

DOI: 10.23862/kiit-parikalpana/2017/v13/i1/ 151272Article available at: http://ksom.ac.in/faculty-and-research/research/parikalpana-the-research-journal/

ABSTRACT

The design of Knowledge management adoption depicts similarity tothe design proposed in 'Technology Acceptance Model (TAM)' and'Extended Technology Acceptance Model (TAM2)' holding variedadoption enablers, suggested by Davis 1989. The purpose of this paperis to identify the relationship between KM adoption enablers anddemographic variables prevalent in Indian ITES organizations withinDelhi NCR. Due to ordinal nature of data, 'multiple-ordinal regression'was applied. The demographic variables are considered independent whileKM adoption variables/ enablers are considered dependent for thisresearch.

The outcomes from of 'multiple-ordinal regression' showcase thatmaximum number of statistically significant outcomes were in case ofthe KM adoption enabler 'Perceived Usefulness' holding likelihood oflower cumulative scores in most cases with lowest scores from theindependent variables '18-28 years' age group and 'Admin' department.

This research study has proposed a knowledge management adoptionframework for Indian ITES organization that can be used as guidelinesto develop KM adoption and augmentation strategies.


Keywords : Knowledge Management, Technology Acceptance Model,Multiple-Ordinal Regression

INTRODUCTION

Knowledge is the spine of any operationrelated to business and commerce sincecenturies. The need and usage ofknowledge observed changes during pastfew decades. The advent of internetaugmented the significance of knowledgebased commerce. At present, it is acceptedthat the capability of any business concernis exceedingly dependent on managementof knowledge (Prieto & Revilla, 2004).Even in case of future, the models ofknowledge flow and its administration isdestined to play an important role inbuilding and sustaining competitiveadvantage (Keskin, 2005).Varied studieson knowledge management(Earl, 1994;Nonaka, 1994; Davenport and Prusak,1998; Tuomi, 2000; Swanson, 2000), itsprocesses(Leonard-Barton, 1995;Nonaka and Takeuchi, 1995; Grant,1996; Lee, 1999; Malhotra, 2000;Davenport and Grover, 2001; Kim andLee, 2001), design(Wiig et al., 1997) andother academic explorations(Edvinsson,1997; Roos and Roos, 1997; Sveiby,1997; Han et al., 2000)have authenticatedthe theoretical understanding.

As most of the corporates could notsuccessfully use the knowledge-basedresources, the number of failed initiativesare considerably more than successfulinitiatives (Perez &Pablos, 2003).Business organizations may get intertwined

in various efforts while implementing KM(Junnarkar, 1997). However, somecorporate organizations have endeavoredto control knowledge assets either throughconcentration of KM related tasks or byway of hefty investment in informationtechnology infrastructure (Hansen andOetinger, 2001). Majority of cases haveshowcased that the problem faced bybusiness concerns is identification ofpertinent reasons for adoption andimplementation of knowledgemanagement systems. An observation ofresearch studies showcased that thevariables were treated within limited scopethat included either single organization(Yinglei Wang, Darren B. Meister, PeterH. Gray, 2013), single sector (MichaelBrandt Jones, Bahaudin G. Mujtaba,Albert Williams and Regina A.Greenwood, 2011) or by relying on justone case study (Satyendra C. Pandey,2013). None of the previous studies tookinto account the differentiation inoperations of organizations belonging tovaried industry sectors (Anli Suresh,2013).As an example, the operations ofan IT organization may be dissimilar froman organization belonging to Telecom.Hence, research studies taking into accountvaried industry sectors would producesufficient results and insights for validationof existing results. In concurrence, thisstudy aims to focus on Indian ITES sectorwithin Delhi NCR.

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1.1. About Indian Corporate Sectors

As per the annual report of corporateaffairs ministry (2013-14), there areapproximately 1.4 million registeredorganizations from varied businesssegments in Indian corporate sector. Theseorganizations belong to sectors likemanufacturing, business services, trading,construction and finance. The 2013-14annual report from Ministry of CorporateAffairs showcases that service sectorholds 61% of total share. It is observedthat within service sector the IT and ITESforms a considerable.

Indian IT software and service companieshave generated $31 billion in 2007 withmajor clientele from United States andEuropean countries. Mostly, themanagement of information and knowledgepersists in companies that deal in back-end operations, data warehousing andconsulting services using IT tools etc.Hence, focus on ITES sector for thisresearch seems appropriate.

Inception of IT Enabled Service(ITES) sector

Extensive usage of knowledgemanagement systems has been observedin case of companies engaged in deliveringservices. They achieved overall costreduction and augmentation of customersatisfaction. The companies engaged indelivering services are categorized in threebroad groups:

• IT Service (ITS)

• IT Enabled Services (ITES)

• Non-IT Service (NITS)

The need to improve service qualitythrough the tools of ‘InformationTechnology’ resulted in the term ‘ITenabled services’ (ITI Info). Thesecompanies are involved in services likeResearch, Transaction processing, Datastorage, analytics and consulting etc. Someprominent categories identified under ITenabled services are:

• Call Centres, BPOs, KPOs, LPOs etc.

• Back Office Operations

• Data Warehousing and ManagementCentres

• Logistics Management

• HR services

• GIS (Geographical InformationSystem)

• Enterprise Resource Planning (ERP)

• Content Development, Documentation,Archiving, E-Publishing & Portals

• Business Intelligence& Consulting

The ITES sector contributes 77% towardstotal revenue while approximately 90% ofits exports are from Hyderabad, Chennai,Kolkata, Mumbai, Delhi and Bangalore.The sector has improved their contributionin India’s GDP from 1.2% to 7.5% during1998 (NASSCOM, 2012). Throughnumerous research studies and surveysconducted by research and consultingorganizations it is found that ITES willwitness massive growth in the upcomingdecade. According to Mr. Sachin Pilot

Understanding Dynamics of KMS Adoption In ...


(Union Minister of state for IT andCommunications), the need for Indian ITand IT-enabled Services (ITES) isexpected to be over $300 Billion by 2020(Economic Times, June 2012). This isbound to impact the level of informationmanagement. Hence, the need torecognize KM enablers that may triggerKM adoption is of pivotal importance.

Literature Review

Knowledge Concept and Taxonomies

The definition of knowledge includesconsciousness, awareness, data andinformation comprehension orunderstanding of anything. Gainingknowledge is the result of havingexperience of something, realization ordiscovery based on meaningfulunderstanding of any subject or conceptthrough theoretical or practical procedure(Ein-Dor, 2006).During ancient times, theconception, procurement, storage anddistribution of knowledge was done withina small section of a civilization. The arrivalof internet in 1980s triggered explosion ofknowledge with intensification of its usagein 1990s thereby making the managementof knowledge became all the moreimportant. The consulting companies wereamong the first to recognize that centralizedand unified information through databasewould serve a product with capacity togenerate good revenue source in future forall companies across industries.

Previous studies on KM adoptionOver the last decade it was observed that

KM was being viewed as an integralfunction of a business concern. Theperformance of a business concern, wasfound comprehensively reliant on processesassociated with knowledge management.Even though business strategies related toCRM, new product development, changemanagement, innovation and governanceare driven by KM processes, the effect ofKMS adoption and its utilization has notbeen completely recognized. In majority ofcases generality and guesstimate are usedfor establishing and validating theories. Thelack of common framework with respectto KM gave way for this research with focuson Indian ITES organizations. Following thesame it is important to first scrutinize priorresearch frameworks and theories.

Literature review includes understandingand identifying the enablers mentioned inprior research works and frameworksused in the earlier studies. Research workson adoption of KM during the last onedecade are being considered at presentfor this research study. The technologyacceptance model (TAM) with respect touser acceptance of any given system wasconducted using 35 respondents during2004(Money and Turner, 2004). Someimportant enablers came out of TAM thatwitnessed to have influence on the decisionpertaining to adoption of any given newtechnology. The enablers were ‘PerceivedUsefulness’, ‘Perceived Ease-of-use’,‘Intention to Use’ and ‘Attitude towardsUse’ etc. which are also shown in Figure-1.

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In concurrence, another model by thename ‘Theory of Planned Behavior (TPB)’was introduced by Icek Ajzen in 2006which supported TAM in creation of aKM adoption model. The enablers

suggested in TPB were ‘SubjectiveNorm’, ‘Attitude towards Use’ etc. Forexploring KM adoption in Indian ITESsector, this research study uses enablersfrom both TAM and TPB.



Research Framework

The framework of this research includesadaptations from prior research studies andtheories for identification of relationshipbetween dependent and independentvariables with respect to KM adoption inIndian ITES organizations. The TechnologyAcceptance Model (TAM)is perceivedtobe the most frequently used due to easeofexpandability. Forthisresearch,Technology Acceptance Model(TAM)and Theory of Planned behavior(TPB), shown in Figure-2,is used toevaluate their suitabilityin case of Indian ITESsector. The aptness of using such modelswas also validated by a similar research thatwas conducted by Luis Ernesto PradoTamez during 2014 on KM adoption inMexico. Since, KM adoption is not testedthrough the models in Indian ITES sector,it is anticipatedthat the insights generatedfromthis research will be quite worthwhilewithin various components of ITES sector.

Methodology

With primary objective to recognize therelationship between KM adoptionenablers and demographic variablesprevalent in Indian ITES organizationswithin Delhi NCR, this study may supportin identification of independent anddependent enabler sthat influenceaugmentation of KM adoption. Theoutcomes may also be used for assessingdirect or indirect influence of KM basedon the relationship of enablers on anorganization’s competitive advantagethrough appropriate investment strategies.

Data collection and sampling

Voluntary response surveys were used asthe selection of respondents were basedon non-random sampling furthercategorized into systematic, convenience,stratified and cluster sampling techniques.The population considered for this researchincludes members working in Indian ITEScompanies with minimum employee baseof 1000. Within Delhi/NCR region it isassumed that the target population sizewould be over 100,000 if the survey isrolled out in 10 ITES companies.Therefore as per Yamane’s rule theminimum sample size for guaranteeingsatisfactory coverage of nominal 95%confidence intervals will be 400.

Formula

n0 = N / [1+N (e)2]

n0 = 100,000 / [1+100,000*(0.05)2]=398.4

An online survey questionnaire wascreated on Google-Forms to convertresearch objectives into well-definedquestions alongside appropriate categoriesof responses to reassure cooperation andmotivation of participants. This researchstudy employs 5-point Likert’s scale forcollection of data with range from ‘StronglyDisagree’ as point 1, ‘Disagree’ as point2, ‘Neutral’ as point 3, ‘Agree’ as point 4and ‘Strongly Agree’ as point 5.

Variables

Data for this research was collected using5-point Likert’s scale which is ordinal innature; hence ‘Ordinal Regression’ is used.

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As a part of predictive study, ordinalregression illustrates the associationbetween one dependent variable with twoor more independent variables. In thisresearch, logit function is seems mostappropriate. Therefore, impact ondependent variables (KM adoptionenablers as well as KM utilization areas)will be evaluated based on the independentvariables (Gender, Age Group,Educational Qualification,Employment in the Organization andDepartment).

On processing the data through SPSS(Version 13), two important tables weregenerated. The first table to be used foranalysis is the one that holds parameterestimates. Major components of this tableare ‘Threshold’ and ‘Location’. The firstorder effect in ordinal regression areshowcased in ‘Thresholds’ whilecoefficients of independent variables(Gender, Age Group, EducationalQualification, Employment in theOrganization and Department, used inthis research) are depicted in ‘Location’estimates. The ‘Location’ estimates holdcoefficients for the predictor variables.

Since the ten KM adoption enablers aretreated dependent variables along witheight dependent variables of KMutilization, SPSS generated tables andcharts that are used for analysis.Conducting ordinal regression on the datacollected for this research generatedoutput as shown in Table-2, Table-3 andTable-4.

Data analysis

Descriptive Statistics

As part of descriptive statistics, the dataobtained from online survey showcase thatin most cases the median scores obtainedfrom KM adoption are either 4 (45% ofresponses are ‘Agree’) or 5 (45% ofresponses are ‘Strongly Agree’) with 2(10% of responses are ‘Disagree’), whilean observation of mode scores depict thatprominence of the option 5 (65% ofresponses are ‘Strongly Agree’) whileoption 4 (20% of responses are ‘Agree’)with few in option 1 (10% of responsesare ‘Strongly Disagree’).

KMO and Bartlett’s Test

To ensure that the factor analysis is suitablefor research data collected, Kaiser-Meyer-Olkin (KMO) measure ofsampling adequacy and Barlett’s test ofsphericitywas also calculated. The Kaiser-Meyer-Olkin (KMO) sampling adequacystatistics ranges between ‘0’ and ‘1’. Anoutcome of ‘0’ indicates that there is highnumber of inequitable correlations asagainst the sum of correlations; this meansdistribution of pattern correlations. On theother hand, if the outcome is close to ‘1’,it would mean that the correlations arepacked together thereby the analysis canprovide suitable and consistent factors. Itwas recommended by Kaiser (1974) tohave values above 0.5.

The outcome of the Kaiser-Meyer-Olkin(KMO), shown in Table-1 measure ofsampling adequacy is 0.802, while the



outcome of Barlett’s test of Sphericity ishighly significant with (p<0.001). Hence,the outcomes of both these statistical testssuggest that the factor analysis is suitableto carry out from the data collectedthrough the online survey.

Bartlett’s test is used for identifying if ‘k’samples are from populations with identicalvariances. Identical variances acrosssamples are known as homogeneity ofvariances. Statistical tests like analysis ofvariance presume that variances areidentical across samples. Here, the Bartletttest can be used to validate the supposition.To be significant, the output needs to be avalue less than 0.05 and to be highlysignificant the output value (p) should beless than 0.001 (Field, 2005).

The outcome of the Kaiser-Meyer-Olkin(KMO) measure of sampling adequacy is0.802, while the outcome of Barlett’s testof Sphericity is highly significant with(p<0.001). Hence, the outcomes of boththese statistical tests suggest that the factoranalysis is suitable to carry out from thedata collected through the online survey.

Ordinal Regression Analysis

While correlation analysis of ordinalvariables focuses on strength of theassociation between two or morevariables, the ordinal regression analysisfocuses on identifying reliance or causalassociation between a dependent variableand one or more independent variables.The correct way to conduct ordinalregression analysis is to use ordinalvariables as dependent while using

continuous, ordinal or categorical(including dichotomous variables) asindependent variables.

The ordinal regression can be classifiedinto the below categories, (1) Simple-Ordinal Regression, with one dependentvariable (ordinal in nature) and oneindependent variable (Continuous orCategorical)and (2) Multiple-OrdinalRegression, with one dependent variable(ordinal in nature) and at least twoindependent variables. In this research theLogit function is most appropriate.Therefore, impact on dependent variables(KM adoption enablers) will be evaluatedthrough SPSS (Version 13) defaultfunction based on the independentvariables (Gender, Age Group,Educational Qualification, Employmentin the Organization and Department).

Discussion

Taking all independent variables intoaccount, it was observed that maximumnumber of statistically significant outcomeswere in case of the KM adoption enabler‘Perceived Usefulness’ holding likelihoodof lower cumulative scores in most caseswith lowest scores from ‘18-28 years’ agegroup and ‘Admin’ department therebydepicting that for every one-unit increasethere are odds of ‘Perceived Usefulness’to be on the lower side as compared toother groups. Likewise, the likelihood ofhigher cumulative score, statisticallysignificant at 5%, is observed in case of‘Employment’ with less than 2 years, 2 to5 years and 5 to 10 years.

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The KM adoption enablers ‘SubjectiveNorm’ holds second highest number ofobservations holding likelihood of lowercumulative scores in most cases withrespect to ‘Department’. Likewise, withrespect to the independent enabler‘Employment’, the likelihood of highercumulative score, statistically significant at5%, is observed in case of 2-5 yearsfollowed by graduation and post-graduationwith respect to educational qualification.

The next KM adoption enabler withmaximum number of statistically significantoutcomes is ‘Job Relevance’. Here, thelikelihood of higher cumulative score,statistically significant at 5%, is observedonly in case of the independent variablecategory ‘Educational Qualification’ with‘Graduation’ holding highest odd ratio of8.47 followed by ‘Post Graduation’ withodd ratio of 7.75. The independent variablesof the category ‘Department’ showcasedmaximum number of observations withlikelihood of lower cumulative score,statistically significant at 5%.

Varied reasons like target industry sector,target location, target population of survey,time-slot of survey etc. may have affectedthe score strength. This suggests that asimilar research may not produce identicalresults if the any of the aforementionedelements are changed. The regressionscore may be totally different as comparedto this study or even if they are similar thestrength of scores may differ with changein target location, target population andtime-slot of survey etc.

Conclusion

Theoretical implications

The academic implications of this researchstudy includes understanding about thedependent variables such as ‘PerceivedUsefulness’, ‘Subjective Norm’ and ‘JobRelevance’ and the level of their reliabilityon independent variables such as Age,Gender, Employment in Organization,Education and Department. It may alsoguide organization on success enablers andkey performance indicators.

Managerial implications

This research would potentially aid indecision making process by ITESorganizations with respect to selection ofappropriate knowledge managementsystem, its implementation process and itsphases while evaluation of existingknowledge solutions keeping in view theavailability of budget and target groups.

Research Limitations

Due to size and enormity of ITES sectorat global level, this research focuses onlyon the ITES organization within DelhiNCR. A larger sample was not availabledue limited number of ITES organizationsin Delhi NCR with employee base of over1,000. Other research studies also had toface similar constraints. In the researchstudy conducted by W. Money and A.Turner during 2004 witnessed a responserate of less than 20%. However, for thisresearch 657 valid responses receivedthrough online survey are found sufficient,with respect to Yamane rule, to contribute



good outcomes with respect to KMadoption and utilization in ITESorganization within Delhi NCR.The studymay have biased opinion and inputs fromrespondents which is likely to impact theresult of the research. Therefore, thefindings may not be applicable across Indiaand even at global level. The findings maynot generalize across other sectors andindustries. With rapid change in technologytools (Mobile applications, CloudComputing etc.) the adoption and usageof KM may include other variables infuture, which could not be covered in thisresearch study.

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Table 1: Kaiser-Meyer-Olkin (KMO) Bartlett’s Test of Spherecity.

Appendix

Table 2: Parameter Estimates: Subjective Norm

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Table 3: Parameter Estimates: Job Relevance


nnn


GROWTH, EQUITY AND POVERTY: TRENDS IN ODISHA

S.N. MisraDean, School of Management

KIIT University, Bhubaneswar, Odisha, India [email protected] & [email protected]

Sanjaya Kumar GhadaiResearch Scholar, School of Management

KIIT University, Bhubaneswar Odisha, India, Pin-751024 [email protected]


ABSTRACT

Odisha has been traditionally associated with low Gross DomesticProduct (GDP) and Human Development Index (HDI) scores comparedto most states of India. However, since 2005 there has a significantturnaround in the States’ Domestic Product (SDP), due to private sectorparticipation in industrial activity in a massive way and mining activities.The paper makes an analysis of impact of growth on equity andperformance of industries and agricultural productivity. Drawingreference to the higher financial devolution to the states by the 14 th

Finance Commission, the paper brings out how major social inclusionschemes like the Integrated Child Development Services (ICDS) aregetting a short shrift due to sharp reduction in the centre’s share toCentrally Sponsored Schemes (CSS). It underscores the importance ofproviding quality primary education and health care funded by thegovernment and improving agricultural productivity through increasedpublic investment in irrigation projects. Odisha can realize the fullpotential of its rich mineral resources by making it a preferred destinationfor key technology transfer and durable partnership with OriginalEquipment Manufacturers (OEMs) and design houses of the world.

KEYWORDS: GDP, HDI, SDP, ICDS, CSS, OEMs

INTRODUCTION

The State of Odisha is characterized bya vicious cycle of poverty, high levels

of unemployment and large swathes ofMaoist activism in the tribal pockets.Besides, the social indicators in termsof HDI, Infant Mortality Rate (IMR),

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Maternal Mortality Rate (MMR),malnutrition of children, SocialDevelopment Index (SDI) aredeplorably low compared to developedstates. This has confounded critics asthe mineral resource base in terms ofiron ore and bauxite is highest in thecountry and the seeds ofindustrialization and sea transportationthrough the Paradip Port were plantedin the 1960s by Sri Biju Patnaik, thedynamic Chief Minister of Odisha.Fortui tously, post economicliberalization in the 1990s, there hasbeen a significant spurt in the growthof SDP, compared to the four decadesthat preceded it. Besides, Odisha hasalso been at the vanguard of executingmany of the socially inclusive schemeslike National Rural Livelihoods Mission(NRLM), MNREGA which hasimmensely benefited large number ofST, SC and women from the quagmireof unemployment and hunger. Growthwith equity seems to have worked intandem to mit igate magicallyunacceptably high levels of poverty thatafflict particularly the rural landscapeand KBK (tribal belt) of Odisha.

This paper attempts to (a) analyze thetrends of SDP, major sectors, and theircontribution to high growth and povertyreduction, post 1994 (b) position withreference to industrial growth, agriculturalproductivity and social sectorparameters, (c) exact impact of rhetoric

like cooperative federalism and higherdevolution to the states and (d) bring upa road map for inclusive economicresurgence of Odisha. It also underscoresthe perils of unfettered free marketoperation that contributes to the wideningchasm between affluent few and largechunk of population, who teeter inpoverty.

ODISHA’S OVERALL PROFILE

Odisha has a total population of 419lakhapproximately, with STs constituting 95.9lakhs (23%) located in 12 districts. TheState runs its budget prudently, with arevenue surplus of Rs.4256 crores and afiscal deficit of 1.38%, compared to thenational fiscal deficit of 3.2%. It has veryrich mineral reserves and both the publicand private sector players are engaged inproduction of steel, aluminum in asignificant manner. Industry contributes38% of the GDP growth as against astagnant national average of 32%. It is alsowitnessing substantial growth in privatesector participation in opening up ofcolleges and universities in the engineeringand MBA streams, making it aneducational hub for students coming fromWest Bengal, Chhattisgarh, Bihar,Rajasthan and Jharkhand. There has alsobeen significant improvement in terms ofnational highways and connectivity ofroads to the villages. Private hospitals havebeen dotting the city of Bhubaneswar,which is being groomed now as a smartcity, with its vibrant IT hub in the outskirts.

Growth, Equity and Poverty: Trends in Odisha


The new IIT, IIM and AIIMS sanctionedfor Odisha has mainstreamed the state tothe best of educational and health care.There has been a significant reduction inthe scale of poverty and the growth of SDPsince 2005 has made it a “Break OutState”.

GROWTH OF SDP AND POVERTYREDUCTION

The trends of SDP growth show widelyvarying fluctuations in the period 1994-2003, before settling down to a very highgrowth trajectory since then. As againstan average growth of 3.2% (1993-2003),the average SDP growth rate since thenhas been of the order of 8%. The undermentioned table with bring out the trends.

Year Growth Rate

1994-95 4.9

1996-97 - 6.9

1997-98 14.4

2000-01 - 2.6

2002-03 - 0.7

2003-04 14.6

2006-07 12.5

2009-10 8.5

2014-15 8.7

2015-16 7.94

The trends in real growth rate of Odisha& India since 2012-13 to 2016-17 isbrought out below.

Figure 1: Trends in Real Growth Rate

Table 1: SDP Growth Rates

Source: Odisha Economic Survey Report 2016-17

It would show that the all India trends is marginally better than Odisha.

Sectoral Share: India & OrissaThe sectoral share for India and share show interesting divergence as under:

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Table 2: Sectoral Share at Current Prices (2011-12 base year)

Sector Orissa India

2011-12 2015-16 2015-16

Agriculture 17.96 18.68 17.5

Industries 42.94 38.38 31.8

Services 39 42.9 50.7

Source: Economic Survey & Odisha Economic Survey Report 2015-16

It would be seen from the above that whilecontribution of agricultural sector is roughlysimilar for India and Orissa, it issignificantly more in case of industries forOdisha, where the service sector is laggingbehind all India trend. There is also a dipof 4% in mining activity in 2015-16 ascompared to 2011-12; reducing the shareof industries.

Social Development Indicator (SDI)& Policy Effectiveness Index (PEI)

In terms of Social Development Indicator(SDI), Odisha scores very poorly comparedto other states, when we take parameterslike health, education, basic amenities andeconomic deprivation. The following tablebrings out the interstate position.

Table 3: Social Development Indicators: Ranking

State Health Education Basic Amenities Economic Deprivation

Andhra Pradesh 7 18 10 14

Gujarat 12 11 11 11

Himachal Pradesh 10 2 5 4

Kerala 1 1 6 9

Odisha 16 19 21 23

Source: Social Development Report 2012

Prof. Rajiv Malhotra has made apioneering study on Policy EffectivenessIndex (PEI) of various states, based onparameters like Rule of Law Index

(ROLI), Public InfrastructureDevelopment Index (PIDI). Thecomparative position of a few states is asunder.



Figure 2: Policy Effectiveness Index

Source: India Public Policy Report 2014

It would thus be seen that in terms ofinfrastructure development, both Gujarat,Andhra Pradesh and Tamil Nadu havemade significant strides, compared toOdisha.

However, Odisha’s consistent high growth

combined with effective implementation ofmega schemes like MNREGA, NRLM,NULM and PMGSY have helpedsignificantly in generating employment andthe position on poverty reduction for ruraland urban India is summarized below.

Figure 3: Poverty Reduction after Liberalization


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EMPLOYMENT PROGRAMMESIN ODISHA

Since its inception, till the end of March2015 64.7 lakh households including 12lakh SC, 18 lakh ST have been issued jobcards, women labourers constituted 34%of work created under MNREGA. Thefund utilization was around 99.6% underMNREGA. The National RuralLivelihoods Mission (NRLM) launched in2012 tries to enable the rural poorhousehold access to gainful selfemployment and skilled wage employmentopportunities. Around 70% of the fundswas utilized in this programme. The AamAdmi Bima Yojana (AABY), a centralsector scheme is administered by LifeInsurance Corporation of India (LIC) forthe benefit of landless agricultural labourhouseholds. It is proposed to cover 2 lakhhouseholds of MGNREGS workers.Urban poor is a preaching challenge inOdisha due to unrelenting migration to thecities. National Urban Livelihoods Mission(NULM) seeks to provide employmentthrough skill training capacity buildingtraining centre to urban homeless andsupport to urban street vendors. The stateemployment mission plans to enable youthto become employed through market linkvocational training and enterprise training.Under this programme women are alsobrought in the ambit of opportunities

through self help groups (SHGs). A totalof 5.66 lakh women self help groups havebeen formed covering 68 lakh membersout of which 5.2 lakh SHGs have beencredit link.

INDUSTRIAL GROWTH &AGRICULTURAL PRODUCTIVITY

Odisha has been fortunately endowed withrich mineral resources like iron ore,bauxite and coal. It has thus spurredgrowth of steel plants both in the publicsector, Rourkela and in the private sectorlike Bhushan steel. NALCO has beenanother major feather in the cap of Odisha,besides BALCO. Ironically states likeChhattisgarh and Jharkhand, who are alsoin the top of the pecking order of thesemineral resources, continue to languish inpoverty like Odisha.

What is particularly distressing is themismatch between Odisha’s resources andproduction; particularly in steel. WhileOdisha has 40% of iron ore deposits, itproduces only 10% of steel production ofIndia, in bauxite also, the resourceproduction gap is around 25%. Theposition of employment in organizedmanufacturing shows a discouraging trend,with private sector accounting for only13% of the employment. The industrialprofile is placed below.



Table 4: Industrial and Mining ProfileType of Industry

Number Capital Investment (Rs. Crore)

Employment (Lakh)

Large 252 92786 1.18

MSMEs 214087 6549 3.63

Mines 250 54511 0.49


It is, therefore, redeeming to learn that theOdisha government plans to invest around28.7 billion dollars by 2027 so as to createemployment opportunity for 3 lakh inmanufacturing. The other initiative is tointegrate and develop coastal areas andfreight corridors as part of Sagarmalaproject.100 startups, handicraft trainingcentres are also on the anvil.

TRICKLE DOWN THEORY & THEREALITY

It was Robert Solow (1956) whoadvocated the trickledown theory basedon the assumption that “A rising tide willlift all the boats”. Adam Smith, the apostleof free market believed that free marketforces as if by an invisible hand will promotewelfare of all. Sadly, the global financialcrisis in 2007-08 brought out how an

unfettered market, bereft of properregulation by the government, canaccentuate income inequality, publicdiscontentment, high unemployment,forcing the government to resort to bail outpackages for the banking sector. To quoteProf. Joseph Stieglitz “A rising tide,followed by a storm would smash weakboats into smithereens”. Indeed, the weakand the vulnerable need the guiding handsof the government to promote welfare ofall, as Smith had rightly underscored asthe legitimate remit of a welfare state.

A major concern for a poor state likeOdisha where large no of people stay inthe village is the low level of agriculturalproductivity. The following table wouldbring out that comparative productivity atall India level with Odisha for major crops.

Table 5: Yield Rate of Principal Crops (2014-15)

Crop All India Productivity (KG per hectare)

Odisha Difference %

Rice 2390 1491 -37.61

Wheat 2872 1347 -53.09

Gram 875 775 -11.43


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It would be seen that in major cereal crops,the difference in productivity is as high as(38% -53%). The rural landscape ofOdisha is also severely distressed due to

high levels of landless population, casualworkers and a large number earning lessthan the minimum wage as the followingtable would show.

Table 6: Rural Landscape: All India & Odisha

Parameter All India Odisha

Casual Employment 38.3 39.4

Government Jobs 5 4.3

Monthly Income <5000 74.5 87.9

Kisan Credit Card 3.6 1.5

Irrigated Land 25.5 9.9

Unirrigated Land 29.6 37.5 Source: Socio Economic & Caste Census Report, 2011

COOPERATIVE FEDERALISM &HIGHER DEVOLUTION OF FUNDS

One of the spin offs of the 14th FinanceCommission report has been the significant

increase in the share of taxable resources(42%) of the centre to the states as against32% by the earlier commission. Theadditional benefit to different states isenumerated below.

Table 7: Additional Fourteenth Finance Commission Transfers(in 2015-16 over 2014-15)

State Benefits from FFC (in Crore)

Andhra Pradesh (United) 14620

Bihar 13279

Chhattisgarh 7227

Gujarat 4551

Kerala 9508

Odisha 6752

Tamil Nadu 5973

Uttar Pradesh 24608

West Bengal 16714

Source: Fourteenth Finance Commission Report, GOI

However, what this higher devolutionmasks is decrease in the share of Centre’s

share in the centrally sponsored schemeslike the ICDS & Anganwadi workers. As



Table 8: Anganwadi Program: Allocation, Wage and Resource Sharing

Parameter 2008-09 2011-12 2014-15 2015-16 2016-17 2017-18

Centres (in lakhs) 9.32 14 14 14 14 14

Workers (in lakhs) 18 22 22 22 22 22

Allocation (in Rs. Cr.) 6300 10000 16253 15433 14560 15245

Wage of Workers (in Rs.) 1500 3000 3000 3000 3000 3000

Number of Children Covered (in lakh) 629 700 700 700 700 700

Number of Pregnant & Lactating Mothers (in lakh)

132 150 150 150 150 150

Central Plan Responsibility (in Rs. Cr.) 5670 9000 14627 7716 7280 7622

State Plan Responsibility (in Rs. Cr.) 630 1000 1625.3 7716 7280 7622

Source-Budget Document, 2017-18, Government of India

It would clearly demonstrate that the wageof anganwadi workers is less than minimumwage and the share of states has increasedsignificantly.

THE WAY FORWARD

Odisha is on a high growth path; and ithas rightly embarked upon a mix of highgrowth and sensible social inclusionschemes. But it has to invest more increating irrigation potential, ramp-up itsmanufacturing activity and improveagricultural productivity. The quality ofgovernment schools remains abysmallypoor, in terms of both basic infrastructureand teaching, The Annual Status ofEducation Report (ASER) 2015 brings out

the poor outcomes in terms of reading,writing and numeracy ability, enticing 30%students to opt for very costly privateschools. The picture is equally grim incollege and university education where theprivate sector has become the pipedpipers. Odisha has become the educationalhub of the east. However, there are verylittle yen for academic excellence orpursuing frontline research. The skillinginitiatives remain rudimentary, yetsignificant for a larger number of schooldrop outs. The private sector is alsoinvesting handsomely in private hospitalswhich remain beyond the financial reachof the poor. The goal of quality health care

against the earlier central share of 80% insuch schemes, post 2015-16, it has beenreduced to 50%. Since there is no caveatto the states that the increased devolutionof 14th Finance Commission award shouldnot stifle allocation to such welfareschemes for children and lactating mothers,

many states like Odisha have denied eventhe modest salary paid to these workers,forcing them to go on a strike.

The following table would bring out thedynamics of the change in resource sharefor anganwadi workers.

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at affordable cost remain a pious platitude,just as quality, value based primaryeducation, a goal set by the Oslo summit.Odisha is still not an attractive destinationfor investment or for inflow of ForeignDirect Investment (FDI), due to the fiascoover investment by many Multi-NationalCorporations (MNCs) and largemanufacturing houses. Despite politicalstability, lack of dynamism seems to denyOdisha to reap its true potential in termsof quality education, skilling, productivityand a manufacturing hub of India. Just asChennai has become the automobile hubof India, Ludhiana the epicenter forgarment, Odisha has all the potential tobecome the steel hub of India.

Reference:

14th Finance Commission Report: Ministryof Finance, Government of India.Retrieved from http://www.finmin.nic.in/14fincomm/14thFinanceCommission.htm

Annual Status of Education Report (ASER)2015. Retrieved from http://www.asercentre.org/Keywords/p/289.html

Directorate of Economics & Statistics,Odisha, Planning & ConvergenceDepartment, Government of Odisha.Retrieved from http://desOdisha.nic.in/

Economic Survey, 2015-2016,Government of India. Retrieved from http://indiabudget.nic.in/survey.asp

Government of India, Ministry of Finance.http://www.finmin.nic.in/

Hasan, Z. & Hasan, H (2013). India:Social Development Report 2012-

Minorities at the margins. India: OxfordUniversity Press, 6th Edition.

India Union Budget 2017-18. http://indiabudget.gov.in/

KBK districts of Odisha. Retrieved fromhttp://www.kbk.nic.in/

Keynes, J.M. (2008). General Theory ofEmployment, Interest and Money. Atlantic

Malhotra, R. (2014). India public policyreport 2014: Tackling poverty, hungerand malnutrition. India: OxfordUniversity Press

_______(2012). A critical decade:policies for India’s development. NewDelhi: Oxford University Press

Odisha Economic Survey 2015-16. http://www.odisha.gov.in/pc/ http://www.odisha.gov.in/pc/Download/Economic_Survey_2015-16.pdf

Odisha Economic Survey 2016-17. http://www.odisha.gov.in/pc/

Smith, A. (1937). The wealth of nations.New York: The Modern Library,

Socio Economic & Caste Census (SECC)Report, 2011. Retrieved from http://rural.nic.in/sites/downloads/general/SECC_15JAN.pdf

Solow, R.M. (1956). A contribution tothe theory of economic growth. TheQuarterly Journal of Economics, Vol. 70,No. 1. (Feb., 1956), pp. 65-94. Retrievedfrom https://www.econ.nyu.edu/user/debraj/Courses/Readings/Solow.pdf

Stiglitz, J. E. (2013). The price ofinequality.UK: Penguin



EXPORT PERFORMANCE OF SPICES IN INDIA:AN EMPIRICAL STUDY

P. Hari BabuFaculty, Commerce and Business AdministrationAcharya Nagarjuna University Ongole Campus

haribabu.pokuri@ gmail.com


ABSTRACT

Spices has been a prime source of livelihood for millions of people andabove 3 million farmers are engaged directly or indirectly in spicescultivation, processing, manufacturing grading, marketing and otherallied activities. So the spices industry is a prominent place over thepast seven decades. India is being a world largest producer and exporter.The sustainability of Indian spices industry is mainly depends on exports.India is now facing stiff competition from many developing countries.The Indian spices processing industry have the various problems likeavailability of raw material, unscientific production methods, Marketingproblems etc. The world exports of spices fluctuated during the periodunder study. Indian spices exports have more than doubled in between2008 to 2015. Thus many reasons can be attributed to the fluctuation ofexports during this period, such as increase in food prices, inflation,world recession etc. However the actual exports gained momentum after2011. The present paper reviews the export performance of Indian spices

Key words: Spices, Exports, Gross Value Added, Gross Domestic Product,Tariff barrier

INTRODUCTION

Agriculture plays a vital role in India’seconomy. Over 58 per cent of the ruralhouseholds depend on agriculture as theirprincipal means of livelihood. Agriculture,along with fisheries and forestry, is one ofthe largest contributors to the GrossDomestic Product (GDP). Spices enteredin to human history around 5000 yearsbefore Christ and spice trade has a legacy

of 5000 years. Spices is one of theeconomically and commercially significantagriculture crops in the world. Today,Indian spices are the most sought-afterglobally, given their exquisite aroma,texture, taste and medicinal value.Traditionally, spices in India have beengrown in small land holdings, with organicfarming gaining prominence in recent times.

Spices may be dried fruits, roots, seeds

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or barks of vegetable substance primarilyused to flavour, colour or preserve food.“Spices and Herbs are dried parts ofvarious plants cultivated for their aromaticpungent or otherwise desirablesubstances, the dominant spices of tradeincluding cardamom, chilli , cinnamon,cloves, ginger and pepper.

In India, different states are known asdifferent spices. They are produced in allthe states and union territories. AndhraPradesh and Telangana is known for ginger,turmeric, chilli, and Mustard, Gujarat forCumin, Dill seeds, fenugreek, fennel, Chilliand garlic. Himachal Pradesh fir ginger,Haryana is known for garlic, Karnataka forpepper, ginger,cardmon (small) , ginger ,chilli , turmeric and garlic, Orissa for ginger, chilli, turmeric and garlic. Kerala is knownfor pepper, ginger, chilli, turmeric, nutmegand mace, Clove. The majority of Indianspices production is undertaken in verysmall holdings, often on hilly tracts of land.It is that 2.5 to 3.0 million small holderscultivate one or more spices

As per estimates by the Central StatisticsOffice (CSO), the share of agriculture andallied sectors (including agriculture,livestock, forestry and fishery) was 15.35per cent of the Gross Value Added (GVA)during 2015–16 at 2011–12 prices. Indiais the largest producer, consumer andexporter of spices and spice products.India’s fruit production has grown fasterthan vegetables making it the second.

Review of literature

Basu, P.K. suggests in his research thesis

“Foreign Trade Policy in India Since ThePlan Period (1951-85)”, formulation of anational export policy incorporating termstrategy and an appropriate organisationalset up. Further the researcher suggests that,to achieve the export goal, planning productmix for country’s export, prioritisingcommodities and markets for promotion ofexports, strengthening marketing efforts,liberalising exchange control system andpolicy towards channelization of foreigntrade, negotiation for reduction of tariff andnon tariff barrier, economic co-operationamong developing countries to secure betterterms of exports of primary commoditiesare essential and necessary.

Major technological developments inelectronics, computer science andsynthetic material have had substantialadverse effects on the consumption ofnatural raw material. This trend maycontinue and future technologicalinnovations could well lead to the virtualcollapse of a number of traditional rawmaterials markets. As a result of thisdeclining trend in commodity exports, thereis bitter competition among developingcountries to earn much needed foreignexchange either by underselling orsubsiding their commodity exports. If anydeveloping country is reluctant to do so,the importing developed countries or theirTNCs take counter measures like countrysubstitution, commodity substitution,releasing previous stocks, recycling andocean bed exploration so as to bring downprices of commodities and raw materialsexported by developing countries.

Export Performance of Spices in India ...


Raffer, (1987) The emerging unfavourableconditions, for the commodity exports ofdeveloping countries, have a mixed impacton their economies. In general, thecommodity export sector became aninstrument for transmitting recession formindustrial centers to peripheral economiesand thus becoming a major source of itsstability (Maizels,1987) But the shocks arebeing absorbed and some of thedeveloping countries are slowly shiftingfrom exports of raw commodities toprocess and semi processed commoditiesand intermediate manufactured goods.Maizels aptly observed that the previousclose linkage between commodity exportsand balance of payments has beendeclining and the traditional role ofcommodity exports as an “engine ofgrowth “ for developing countries in generalis marginalizing ( Maizels 1987) .Forexample ,for all developing countries ,theshare of agricultural commodity trade intotal exports was 50percent in 1965 andit declined to 23percent by 1980 .Thesame trend is also observed in the Indianexports mix as 68.4percent of Indianexports consisted of food products andraw materials in 1938-1939 , decreasedto 33.0percent by 1980 and the share ofmanufactured items increased significantlyover the same period from 30.0 to58.8percent .But the share of tobaccoexports remained more or less constant(Gill and Ghuman ,1982)

According to Bhagwati and Srinivasan(1983), trade liberalization leads to tradediversification by altering the product

composition for existing productiontowards higher value-added products.There is a strong connection between tradeliberalization and trade diversification. Theexport promotion strategy promotes intra-industry specialization and as a result, intra-industry trade in manufactures amongdeveloping countries, and between themand the industrial countries developsignificantly. Sen (2000) has made a criticalappraisal of the import substitution andexport promotion strategies adopted bythe governments.

Morrissey and Filatotchev (2001) haveanalyzed implications of globalization andtrade for exports from marginalizedeconomies. If producers in developingeconomies are brought in to thecommodity chain merely as contractsuppliers, they may continue to bemarginalized by globalization. Accordingto Mansoob (1997 protectionism in thedeveloped economies directed towardsthe goods of the developing economies isnot going to promote the interests ofunskilled workers of the former.

Research problem

Research studies on export performanceof various products of generalconsumption across the world have beensuperfluous. These are considered to beof mutual benefit for the producers and theconsumers countries across the world.Such category includes Foods, beveragesand utilities of household consumption.However, there is one particular producewhich has a greater monetary value even

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though it is not known for common good.Export has assumed an important place inthe development process of any economy.For achieving rapid growth, a minimum offoreign exchange is necessary for adeveloping country like India. Spice exportsfrom India are expected to reach US$ 3billion by 2016–17 (Spices Board -2016)due to creative marketing strategies,innovative packaging, strength in quality andstrong distribution networks. The spicesmarket in India is valued at Rs 40,000crore (US$ 5.87 billion) annually, of whichthe branded segment accounts for 15 percent India is the largest producer, consumerand exporter of spices, with a 46 per centshare by volume and 23 per cent share byvalue, in the world market. The Indian spiceexport basket consists of around 50 spicesin whole form and more than 80 productsin value added form largest fruit producerin the world (Spices Board -2016). Thesustainability of Indian Spices industry ismainly depends on exports. India is nowfacing stiff competition from manydeveloping countries.

Need for the study

There have been several regulations indifferent countries to export of agriculturecommodities. These regulations havecaused the reduction of spices exports.This results welfare loses in spicesexporting countries, as a result of decreasespices production. Welfare losses includea decrease foreign revenue, incaseunemployment unfavorable terms of tradeand loss of revenue to the Government. Inaddition, this situation increases poverty

levels, and a reduction in social welfareservices, which may calls unrest amongthey people, it is therefore very necessaryto know the trends in the Exportperformance of spices, that can help inunderstanding the kind of impact it willhave and its social political consequences,this study therefore attempted to find outthe trends in export performance of spicesfrom 2001-02 to 2015-16.

Objective

The main purpose of the study is to findout whether they have been an increaseor decrease in the export of spices. Thesecond purpose is to inter possible causesfor variations in spices exports from 2001-02 to 2015-16.

Performance evaluation

To analyse the Export performance ofIndian spices has to collect the secondarydata from the Spices Board, AnnualReports from 2001-02 to 2016. In thissection we consider the followingobjectives:

Ø To examine the average growth of thequantity of spices

Ø To find out the average growth of valueof spices

Ø To examine the functional relationshipbetween the Value and quantity ofexports

Hypothesis

In view of the proposed objectives, theresearcher has formulated the followinghypothesis (for the study.



Null Hypothesis (H0): There is nofunctional relationship between value andQuantity of exports

Alternative Hypothesis (H1): There isa functional relationship between value andQuantity of Exports.

Research Methodology

Research design is the framework of theresearch study. It lays out the structure,procedures and data analysis of theresearch. In this study descriptive andanalytic research design has been foundto be most suitable type of researchdesign. In this way, the trends in Exportperformance of Spices are described withthe help of statistical tools.

Data Collection Method

The data used for present data is basedon secondary sources. The secondarydata have been collected from thepublications of Indian spices BoardMinistry of Commerce Government ofIndia viz, Annual reports Brochures andWebsites.

Data Analysis Technique

The researcher has used the statistical toolslike Ordinary Least Squares (OLS),Regression analysis to find out region wisegrowth rates, and worked out find thebehavior of the trade variables under thestudy. In addition routine descriptivestatistics, like frequency, mean, StandardDeviation (SD), Shapiro-Wilk normalitytest were used. The computer software’sused are R 3.2.1 version and MS-Excelhas been used for computation. Analysis

of growth rates are worked out by usingthe linear function and worked out find thebehavior of trade variables under the study.The following sections discuss the resultanalysis of three objectives respectively.

Results and Discussion

To achieve the above objectives, thefollowing statistical techniques have beenused:

To establish the functional relationshipvalue and quantity of the exports of spices,here fitted a linear function Y (value ofspecies) = A+ B (Quantity of spices) asshown below table-1 and 2.

In order to assess trend of the exportperformance of spices, the average growthof Quantity in spices is 4,68,437.7 tonesand the average growth value of spices is5,932.97 crores. Initially, beforeestablishing the relationship between thevalue and Quantity of spices, let us findout the normality of two variables to applya parametric or a non-parametriccorrelation tool.

The theory states that both the variablesin correlation should be normallydistributed. If any one of them is notnormally distributed the Karl-pearsoncorrelation is not appropriate (Gerrish &Lathlean, 2015). So it is better to applynonparametric test of correlation i.e.,spearman rank correlation for betterresults. It is observed that both thespearman’s rho and Kendall’s tau are thebest tools for examining the coefficient ofcorrelation in the absence of normality inthe analyzing data. They best suit when the

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data is ordinal in nature (Snyder &Mangrum, 2005).

The data has tested the normality of twovariables using Shapiro-wilks test. Fromthe p-values i.e., 0.1151, value of Quantityof Spices and 0.009881, value of species,it is clear that, one of the variables ie.Quantity of spices is normally distributedand the other ie., value of species is not.By this, it is concluded that a parametriccorrelation tool named Karl PearsonCoefficient of Correlation cannot beapplied. Thereby, an equivalent non-

parametric test named Spearman’s RankCorrelation is used. From the results, it isobserved that the Spearman’s Rankcorrelation (rho) between Quantity ofSpecies and Value of Spices is 0.974 at1% of level of significance. This valuesstates that there is a strong correlationbetween the two variables. From this, wecan state that our results do not acceptthe null hypothesis (H0). Therefore, it statesthat there is a significant functionalrelationship between Quantity and Valueof Spices.

Table 1: CorrelationsTest Quantity/value Correlation Coefficient Quantity Value Kendall’s tau_b Spearman’s rho

quantity value quantity value

Correlation Coefficient Sig. (2-tailed) N Correlation Coefficient Sig. (2-tailed) N Correlation Coefficient Sig. (2-tailed) N Correlation Coefficient Sig. (2-tailed) N

1.000 . 13 .974**

.000 13 1.000 . 13 .995**

.000 13

.974**

.000 13 1.000 . 13 .995**

.000 13 1.000 . 13

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

Even, Kendall’s tau is also used by thepaper to establish the results obtained bySpearman’s Rank Correlation, as statedin the above Table 1.

As there is a correlation, we can applyregression in order to examine the impactof Quantity and the value of Spices. Afterrunning the data in R 3..1 version, the



Table 2: India Spices exports from 2001-02 to 2015-16

Year Quantity Value y hat(V) =

(-4082.99+0.021382(Q) Actual Q Expected Q Residuals

2001-02 235916 1833.53 961.37 2001-02 1833.53 961.3659 872.1641

2002-03 243203 1940.55 1117.18 2002-03 1940.55 1117.177 823.3735

2003-04 264106 2086.71 1564.12 2003-03 2086.71 1564.124 522.5855

2004-05 254382 1911.6 1356.21 2004-05 1911.6 1356.206 555.3941

2005-06 348524 2350.52 3369.15 2005-06 2350.52 3369.15 -1018.63

2006-07 350363 2627.63 3408.47 2006-07 2627.63 3408.472 -780.842

2007-08 373750 3575.75 3908.53 2007-08 3575.75 3908.533 -332.783

2008-09 444250 4435.5 5415.96 2008-09 4435.5 5415.964 -980.464

2009-10 470520 5300.26 5977.67 2009-10 5300.26 5977.669 -677.409

2010-11 502750 5560.5 6666.81 2010-11 5560.5 6666.811 -1106.31 min

2011-12 525749 6840.7 7158.58 2011-12 6840.7 7158.575 -317.875

2012-13 575270 9783.42 8217.43 2012-13 9783.42 8217.433 1565.987 max

2013-14 726613 12112.76 11453.45 2013-14 12112.76 11453.45 659.3108

2014-15 817250 13735.39 13391.45 2014-15 13735.39 13391.45 343.9405

2015-16 893920 14899.68 15030.81 2015-16 14899.68 15030.81 -131.127

SOURCE: SPICES BOARD COCHIN, 2016

results have come up with the followingregression equation, used for finding theexpected values as well as for predictingthe future value of species based on our

exports of quantity of spices. The followingtable -2 exhibits the results in detail.y hat(V) = (-4082.99+0.021382(Q) —

— Regression Equation

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From the above chart it has been clearlyobserved that the actual export of Indianspices declined as against expected during2004 to 2011. As per the report of, theworld economic situation and prospectsUnited Nations 2011, global marketunderwent many trails. Thus many reasonscan be attributed to the decline of exportsduring this period, such as increase in foodprices, inflation, world recession etc.However the actual exports gainedmomentum after 2011, with worldeconomy stabilizing and increase in theproduction.

Conclusion

It can be concluded from the abovediscussion, an attempt was made topresent the importance of the study,various research studies conducted onexport performance Indian spices acrossthe world. Further, the findings of the studyobserved that the previous close linkagebetween commodity exports and balanceof payments has been declining and thetraditional role of commodity exports andalso the emerging unfavourable conditions,for the commodity exports of developingcountries, have a mixed impact on theireconomies. Some of the developingcountries are slowly shifting from exportsof raw commodities to process and semiprocessed commodities and intermediatemanufactured goods. The abovediscussion is that India is performing wellas far as exports of spices are concerned..It seems that various factors appear toplay a larger role determining theperformance of exports. Still it has the

potential to perform better under suchcircumstances the GOVT should designsupportive polices and development ofstrategies for spices exports.

References

Basu, P.K. “Foreign Trade Policy in IndiaSince the Plan Period (1951-85), FinanceIndia, Vol. XII, No.4, December 1998.

Beck, M. L., Bryman, A. E., & Liao, T.F. (2003). SHAPIRO-WILK TEST. InM. L. Beck, A. E. Bryman, & T. F. Liao,The SAGE Encyclopedia of SocialScience Research Methods (Vol. 3, pp.1031-1032). New Delhi: SAGEPublishers.

Burns. (2007). Rules of Thumb forCorrelation Strength. In Burns, MarketingResearch (5th Edition ed., pp. 541-542).India: Pearson Education India.

Gerrish, K., & Lathlean, J. (2015). TheRealtionship between two variables. In K.Gerrish, & J.

Gill, S.S. and Ghuman R.S “India’sagriculture exports, Performance andsome policy issues,” Indian journal ofagriculture economics, vol.XXXVII no.3p.294., 1982

Lathlean, The Research Process inNursing (7th Edition ed., p. 517). JohnWiley & Sons.

Maizels, A..” A commodity in crisis; An overview of main issues “ World developmentVol.15, no.5 p.537.19871987

Mansoob, S.”does trade with the southdis advantage unskilled workers in the



north”In guptha satya dev(ed.)’ Thepolitical Economy of globalisation”KulwerAcademic publishers, Massachussets,p.129.1997

Morrissey and Filatotchev , Globalisationand Trade; The Implications for exportsfrom marginalized economies,Macmillianpress Ltd.,London.2001

Raffer,K.” Un Favourable Specialization

and dependence; The case of peripheralraw material exporters “Worlddevelopment vol.15, No.5,p.701.

Snyder, D. K., & Mangrum, L. F. (2005).Approaches to Prediction. In D. H.Sprenkle, & F. P. Piency, ResearchMethods in Family Theraphy (2ndEdition ed., pp. 368-375). New York,London: Guilford Press.

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POLITICAL LEADERS & PARTIES AS BRANDS :A THEORETICAL PERSPECTIVE

Amit KumarAssistant Professor, Institute of Business Management

GLA University Mathura, Uttar [email protected]

Somesh DhamijaHead-Management (UG), Institute of Business Management

GLA University Mathura, Uttar [email protected]


ABSTRACT

Universally, there doesn't exist a predominant perception as to whetherpolitical parties or political leaders could be treated as brands on lineswith commodities. This paper attempts to theoretically establish arelationship between these two terms, namely brand and political partiesor leaders. Further it details the various bases on which consumer-citizens develop an understanding about political brands. It builds uponthis to talk about the formation of political brand images in the eyes ofconsumer-citizens which results from the interactions between the leaders,their parties and the ideologies or policies. Following this, the papertalks about the tentative benefits for the consumer-citizen which mightresult because of the political branding phenomenon. The consumer-citizen, swayed by the benefits arising out of political brands, getsmotivated to know more about it, getting in touch in the process andeventually makes the decision with regard to the same. The modernconsumer is at the focal point of this research paper and the choiceswhich s/he has with regard to vouching for a particular political party orleader makes for a compelling case for them being considered on lineswith a brand.

Key words: political brand, political marketing, consumer-citizen, leader,party.

INTRODUCTION

Politics is one area which traditionally hasnot been much associated with the field of

marketing and its related concept branding.This is because of many reasons whichwould be mentioned later in the paper. At



the same time, there are thinkers who findmerit in the analogy of politics andmarketing and by extension branding.

Newman & Seth (1985) talk about howpolitical marketing educates the votersabout the various political parties andleaders thus leading them to making aninformed choice. O’Cass and Pecotich(2003) are of the of the view that votingdecisions being made by the consumer-citizens are much influenced by theirlearning of the contestants and theiraffiliates which in turn depends on theirunderstanding of political marketing.

When one talks about branding (a part ofthe overall marketing concept), politics isone field which doesn’t instantaneouslycomes to mind. This is so becausetraditionally politics has not beenassociated with the domains of marketingand branding. However, with time,branding has been increasingly associatedwith such phenomena which are societalin nature. One such non-traditional fieldhas been that of politics.

Some more non-traditional fields whichhave been considered as brands in thewestern nations have been the RomanCatholic Church (Zinkin, 2004) as well asthe popular universities (Jevons, 2006).This is so because the concept of brandingis increasingly being associated with allsuch phenomena which involve some sortof consumerism and choices on the partof the consumer.

Thus, it ought to be a logical assumptionthat politics be associated with branding

as it involves choice on the part of theconsumer-citizen and politicians tend togarner support for their electoral cause byengaging in exchange of ideas. This sortof development is akin to the one found inthe case of marketing where the marketerengages the consumer in such a way thatthe product on offer is considered.

On the other hand are those who don’tconsider politics as a natural extension ofthe phenomenon of marketing and itssubset branding. Thinkers like Henneberg(2006) and O’Shaughnessy (2007) are ofthe view that the principles which drive acommercial marketplace could not appliedto the field of politics. This is so becauseleaders, on the virtue of being humanbeings, could not be treated akin toproducts.

Scammell (1999) and Needham (2005)opine that treating politics on the lines ofmarketing could lead to heightenedconfrontation, a tendency to disengagefrom the founding principles of practicingpolitics, extreme commercialization of apure activity like an election, expectationof conformity to set-standards on line withcommercial marketing which undoes thevery purpose of politics which is based onthe concept of differing views amongst theparties and leaders.

Further, Lilleker and Negrine (2003) areof the view that treating politics on par witha commercial concept like marketingwould lead to the narrowing of the politicalagenda as a certain level of congruencywould be expected on lines with target-

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driven principles of marketing which woulddo injustice to the golden rule of politics,‘Agree to Disagree’.

Moreover, as per Needham (2005),considering politics similar to marketingmight lead to disenchantment on variouslevels as far as the hierarchy of a politicaloutfit goes. This is so because politicsbeing an arena where every individualmember has got the right to disagree andexpress their views. However, the scopeof dissent doesn’t find much relevance andacceptance when it comes to the field ofmarketing. In politics, having an oppositionis necessary to keep the ruling party incheck. Such a concept is not required inmarketing and even if so, the extent andrelevance of it is no match to that found inpolitics.

What is to be understood here from theabove discussion is the aspect that manythinkers consider politics and marketing astwo compatible concepts. They come upwith their reasons whereby they justify howpolitical marketing is a realistic propositionand has come to influence the arena ofpolitics. Then there are the detractors ofthis notion who denounce the alliance ofpolitics and marketing based on theirreservations on the same owing to suchfactors which don’t go hand-in-hand in thetwo said domains.

The point of interest here is the fact thatbranding as such exists in two formats,namely brand management and aconsumer-centric approach. It is the firstschool of thought which has come under

criticism by those who are not convincedby the idea of political marketing orpolitical branding. This is because brandmanagement talks about developing theidentity of a specific brand by applying thepractices of branding in a marketplace thustesting its efficacy. It goes without sayingthat if one transfers the practices from onemarket to the other without giving muchthought to it, would lead to obviousproblems the consequences of which couldbe far-reaching.

On the other hand, there is the consumer-centric approach of marketing which talksabout the experiential learning whichconsumers engage in when they come incontact with a particular brand and in theprocess are motivated to show theirallegiance to the same. It is this approachwhich advocates the coming together ofpolitics and branding thereby resulting inpolitical branding. This holds significancebecause this aspect of branding has much todo with the preferences formed in the mindsof the consumers owing to their experiencewith that brand. They take help of mentalshortcuts to arrive at a decision with regardto that brand, developing an emotionalconnect in the process. The field of politicalbranding functions in similar fashion and theadvocates of the same vouch for thisapproach towards political branding.

Purpose

This paper deals with the aspect of politicalbranding and provides inputs on it therebyhighlighting the various characteristicsrelated to it and how understanding the

Political Leaders & Parties As Brands ...


same could help the party, leader and thevoter in developing a rapport which wouldeventually lead to a favorable perspectivefor all of them.

Further, the purpose of writing this researchpaper is to delve into the notion whetherpolitical parties and leaders could beequated with products (though puristshave not been in the favour of the samesince the concept was introduced in the1970s). As highlighted above, the realproblem lies in how you go about definingbrands, from the perspective of brandmanagement, wherein you tryunsuccessfully to replicate the learning ofone marketplace on another or with aconsumer-centric approach, where a lotof thought goes into identifying what all tickthe right boxes in the ready reference ofconsumer-citizens as far as their votingpreferences are concerned.

This paper aims to develop anunderstanding as to what prompts thevoters to decide in a particular fashion asto which political brand they prefer overothers. It would highlight theconnectedness which reportedly existsamong the leader, party, policies and thevoter and how the phenomenon of politicalbranding helps to interlink them better.

Approach

This paper goes about defining politicalbranding and how it has came to reshapethe realms of politics. To reach to such anexplanation first we need to understandwhat makes a brand.

A brand is defined as ‘A name, term, sign,

symbol, or design, or a combination ofthem which is intended to identify the goodsor services of one seller or a group ofsellers and to differentiate them from thoseof competitors’ (AMA, 1960).

Keeping the above definition inconsideration, political parties and leadersclearly fit the bill. These entities have highrecall value. Even when we talk about ademocracy like India where a substantialnumber of electorate resides in rural areas,the party symbol and leader’s face helpthem in deciding whom they would votefor. The recall value of a political partysymbol is as good as the party manifestoas far as the rural electorate is concerned.What is of significance here is tounderstand the fact that with time and overthe course of voting in different elections,voters develop some sort of bonding andaffiliation with a certain political brandwhich gets reinforced in their minds therebydifferentiating themselves from the rivalbrands hence giving them the edge overthe competitors.

Schneider (2004) is of the view that thevalue which political brands bring withthemselves leads to accuracy andconsistency among the voters therebymaking the respective brands morebankable and trustworthy. This becomespossible due to the awareness of the votersabout that specific political brand.

French and Smith (2008) are of a similarview but at the same time they are also ofthe opinion that it is not necessary that theelectorate would have a uniform

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knowledge about the political brands infray. This leads to an uneven situationwhere one political brand might be betterknown than its rival brands.

As has been observed by many and isevident from the current trends beingformed and surveyed in the build-up to thePresidential election in US of A, despitethe billion-dollar campaigns on the part ofboth the nominees, the average electorateis losing interest in the election process andis increasingly being disengaged to it. Thisis so because the choice of nominees onthe part of both the principal parties,namely the Republicans and theDemocrats, has been far from convincing.For many of them, it is like choosingbetween lesser of the two evils.

Those who have traditionally supported theRepublicans are not convinced that DonaldTrump is the best which the party couldhave came up with given the self-contradictory nature of his speeches, thecontroversies surrounding his personalityand the non-seriousness which he evokes.The case of Hillary Clinton is not muchbetter either. The recent e-mail scandal hasmassively eroded the trust of her followers,not that they had much trust on her in thefirst place. Both these brands areconsidered to be weak political brandsespecially keeping in the mind the charismaof brand Obama who for two straightterms dominated the political landscape ofthat nation.

On the other hand, there are the partisanvoters, those who throw their weight

behind the political brands which theyfollow (French and Smith, 2008). Forthem, the political brand followed by themis the one which is the better one over theother. Often in such a scenario, logic takesa back seat and blind-following comes tothe fore. The die-hard believers turn a blindeye to the shortcomings of their favouredpolitical brand and even if they criticize it,they do it in milder terms. They are highlyunforgiving of the rival political brands.Similar is the scenario for the supportersof a particular political brand in the Indiancontext as well. They would highlight themisdeeds of the rival political brandswithout saying anything about theshortcomings of the political brand whosecause they espouse.

John et al (2006) are of the view that theways in which consumers respond tobrands on various occasions characterizesthe phenomenon of political branding as itvery well captures the variations which areto be found in the domain of consumerbehavior.

As per Keller and Lehmann (2006), theexisting literature on branding, over thecourse of past two decades or so, hasdone well in terms of adopting aconsumer-centric approach as it hasbrought to the fore the human elementwhich goes into the making of a brand.The anvil of the phenomenon of politicalbranding has assumed significance thanksto the coming together of consumerism tothe field of branding. In other words,political branding talks about how thehuman element of the choosing of



representatives bears resemblance to thephenomenon of consumerism.

Further, it came to the attention of thecontributors to the field of political brandingthat human beings, when behaving asconsumers, have an in-built mechanism ofgetting to know the benefits which ariseout of the preference for one brand overthe other. Also, they are to accustomthemselves as they become inundated withhoards of information and complex mazeof communication. Likewise, theconsumer-citizen is faced with the choiceto be made, to buy or not to buy (read tovote or not to vote). The increasinglymeddling nature of technology in the formof social networking has made the task allthe more difficult for the voters as they arebombarded with content flashing non-stopfrom myriad sources.

An experiential-learning approach hasbeen dealt with in this paper whereby thevoters are treated on lines with consumers.This approach has been consideredbecause it opens up the horizon fordiscussion by bringing into considerationsuch widely-used concepts as consumerbehavior and branding together. Ashighlighted above, this paper takes intoreckoning the appropriateness of politicalparties and leaders as brands.

The paper highlights a significant trait ofpolitical activities which is the learning ofconsumers about the political brands in frayand more importantly how they use thatlearning in making informed choices withregard to the political brands. A consumer-

oriented approach has been taken in thisregard which builds upon the consumerbehavior aspect related to political brand.

The paper also highlights the relevance ofjustifying political parties and leaders asbrands. Next, the paper goes aboutexplaining the notion of consideringpolitical parties and leaders as brands fromthe perspective of consumer theory, as wasthe case earlier in the discussion. Further,the interface among the party, its policiesand the leader have been considered asto how they together lead to the idea ofpolitical brands.

From there, the paper has delved uponthe benefits which the phenomenon ofbeing a political brand accrues upon theconsumer-citizen owing to its consumer-centric approach which in turn encouragesthe electorate to vote in a certain fashionthus endorsing the political brand. Finally,the paper talks about the futureimplications as related to the field ofpolitical branding and how the currentpolitical parties and leaders could benefitfrom the same.

Findings

The implications of the concept of politicalbranding are far-reaching and have beenbrought to the fore, to a certain extent,during the course of this research paper.The paper highlighted the various aspectsrelated to the phenomenon of politicalbranding and how it has both supportersand detractors who have their separateviews on the relevance and logic ofconsidering politics and branding together.

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During the length of the paper, it wasdiscovered that voters look for mentalshort-cuts (known as heuristics) wherebythey could decide which political brandthey would prefer over others. Also, it wasunderstood that informed voter is in aposition to make better choices as theyare able to differentiate among the brands.

Further, it came to light that in the westerndemocracies, voters are losing interest inthe overall electoral process due to weakpolitical brands as is evident in the ongoingPresidential election in US. This is sobecause they are listless owing to thehopelessness surrounding the choice ofnominees of either party. At the same time,the paper also highlighted the concept ofpartisan voters who stick to their respectivepolitical brands even if they know that theyare not up to the mark. They choose toignore the imperfections for the die-hardbelievers that they are.

Next, the paper showed that politicalbranding helps the voters to decide on theirchoices because they become aware of thealternatives and reinforce their beliefstowards a particular political brand. This isso because political branding enables thevoters to learn the benefits which accrueby following a particular brand over others.

Another aspect which was the outcomeof the discussion undertaken in thisresearch paper was the dependabilitywhich results owing to the phenomenonof political branding. This is so becauseonce the voters start preferring one politicalbrand over its competitors, the recall value

and winning ability improves.

Value

This research paper would prove to be ofvalue in the area of studying politicalbrands and the various aspects related toit. A reader who intends to develop anunderstanding with regard to how politicsand branding are related to each other andmore importantly how thinkers agree aswell as disagree with the two phenomenagoing together, would find this researchpaper of value.

Also, the research paper would be of valueto those who are of the view that politicalleaders and parties could be treated asproducts or not and what is the underlyingmerit of the same. They would come tothe understanding as to what goes into themaking of a political brand and how itbenefits the party or the leader who is apart of the same.

The paper would add to the existingknowledge base of those who intend tosee politics in the contemporary times andhow it has been shaped by the consumer-centric approach to it thereby resulting inthe phenomenon of political branding.They would come to realize that essentially,political branding comes into the pictureowing to a consumer-oriented approachwhereby the voters are treated asconsumer-citizens who buy into thephilosophies of their respective politicalbrands.

Further, the paper would be valuable in thecontext that it explains how having a



branding approach towards politics bringsa certain level of certainty, bankability andassuredness to it thus making it easier forconsumer-citizens in terms of makingchoices as they are better placed to makeinformed decisions due to the betterpositioning of competing political brands.Also, because of the heightened interest andinformation levels, the consumer-citizens feelmotivated to exercise their franchise.

References

American Marketing Association (AMA)(1960) Marketing Definitions: AGlossary of Marketing Terms. Chicago,IL: American Marketing Association.

French, A. and Smith, I.G. (2008)‘Measuring Political Brand Equity: AConsumer Approach.’ Proceedings of the5th International Conference on PoliticalMarketing, Manchester Business School,March.

Henneberg, S.C. (2006) ‘The Views ofan Advocatus Dei: Political Marketing andits Critics’, Journal of Public Affairs4(3): 225–43.

Jevons, C. (2006) ‘Universities: a PrimeExample of Branding Going Wrong’,Journal of Product and BrandManagement 15(7): 466–7.

John, D.R., Loken, B., Kim, K. andMonga, A.B. (2006) ‘Brand ConceptMaps: A Methodology for IdentifyingBrand Association Networks’, Journal ofMarketing Research 43(4): 549–63.

Keller, K.L. and Lehmann, D.R. (2006)‘Brands and Branding: Research Findings

and Future Priorities’, Marketing Science25(6): 740–59.

Lilleker, D. and Negrine, R. (2003) ‘NotBig Brand Names but Corner Shop:Marketing Politics to a DisengagedElectorate’, Journal of PoliticalMarketing 2(1): 55–75.

Needham, C. (2005) ‘Brand Leaders:Clinton, Blair and the Limitations of thePermanent Campaign’, Political Studies53: 343–61.

Newman, B.I. and Sheth, J.N. (1985) ‘AModel of Primary Voter Behaviour’,Journal of Consumer Research 12(2):178–87.

O’Cass, A. and Pecotich, A. (2003) ‘TheDynamics of Voter Behaviour and InfluenceProcesses in Electoral Markets: AConsumer Behaviour Perspective’, Journalof Business Research 58: 406–13.

O’Shaughnessy, N.J. and Henneberg,S.C. (2007) ‘The Selling of the President2004: A Marketing Perspective’, Journalof Public Affairs 7: 249–68.

Scammell, M. (1999) ‘Political Marketing:Lessons for Political Science’, PoliticalStudies 47(4): 718–39.

Schneider, H. (2004) ‘Branding inPolitics – Manifestations, Relevanceand Identity-oriented Management’,Journal of Political Marketing 3(3):41–67.

Zinkin, J. (2004) ‘The Roman CatholicChurch as a Case Study in GlobalBranding’, International Journal ofApplied Marketing 3(1): 145–67.

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IMPACT OF AD-SKEPTICISM ONCONSUMER CYNICISM

Indirah IndibaraAssistant Professor (Marketing), KIIT School of Management, Bhubaneswar

Executive FPM (Continuing), XLRI [email protected]


ABSTRACT

With the focus of the companies shifting more towards an advertisingdominated promotion strategy, the importance of the research efforts inthis field cannot be overstated. Whether this hyper-advertising is reallyneeded by the companies today or not needs to be studied. Similarly, howdo we define the negative feeling toward advertising based on itsantecedents like dimensions of personality and an individual’s consumptionexperience; and its effect on the trust or distrust towards the marketplaceshould be analyzed in detail. Drawing on the concepts from relevant areas,a model of the impact of consumer’s personality and consumptionexperience on his skepticism toward advertising, and subsequently its effecton his cynical behaviour has been theoretically developed.

INTRODUCTION

Advertising has become the backbone oftoday’s marketplace communication. Noproduct promotion is considered to becomplete in today’s world without itsadvertising component. But is too muchadvertising not creating a clutter in theconsumer’s mind and life? Can advertisingtruly always be beneficial to the companyor the brand that it’s trying to cater to, ormight it actually result in having adeteriorating effect on the sales of theproduct because of the negativeconnotation that is attached to it. Not everyindividual is bound to like theadvertisements being bombarded at him


all through the day, and not every consumeris going to believe the claims that are beingmade by the products in theseadvertisements. As all individuals have theirown personality traits, they are bound toreact differently to any situation they facein life, including their reactions towardadvertising in general. Similarly, eachconsumer has a different consumptionexperience over a series of transactionsthat he has made in his entire lifetime. Andthese consumption experiences, whetherpositive or negative, whether in tandemwith the advertisement claims, or inreverse, will also have an effect on howhe perceives the advertising world. Onsimilar lines, every person is expected to


have a varying opinion about themarketplace in general, as to whether thecompanies are honest or do they believeonly in making profits, even at the cost oftheir consumers. In the present study weare trying to analyze the impact of anindividual’s personality and consumptionexperience on the way he perceivesadvertising, and whether this perceptionabout advertising in general is influencinghis thoughts and feelings about the wholemarketplace.

Literature Review

AMA defines advertising as “anyannouncement or persuasive messageplaced in the mass media in paid ordonated time or space by an identifiedindividual, company, or organization”.According to Kotler and Keller (2011),advertising is “any paid form of non-personal presentation and promotion ofideas, goods, or services by an identifiedsponsor”. Advertising is the most visibleand the most frequently used tool ofpromotion adopted by any company orfirm (Coulter, Zaltman and Coulter, 2001).Barksdale and Darden (1972) concludedfrom their study that many respondentsfound advertising to be unbelievable andunreliable source of information, and feltthat it projected an unreal picture ofproducts advertised. As the consumers arebombarded with a continuous flux ofadvertisements, they are bound to formsome attitude toward them, and asexpected these attitudes can be bothpositive or negative. Swanson (1975)found that there had been an increase in

the cynicism towards advertising, and areduced credibility ascribed to it. Pollayand Mittal (1993), in their research, haveidentified seven factors, three personalutility factors and four socio-economicfactors, that can shape a consumer’sattitude. Based on these seven factors, theyhave classified the consumers into variouscategories based on the attitudes that theconsumers can display toward advertising,such as contended consumers,compromised concerned, conflictedCalvinists, deceptiveness wary,degeneracy wary and critical cynics (Pollayand Mittal, 1993). According to them,critical cynics are those who disagree thatadvertisements fulfil any of the threepersonal uses, and who have nocompensating perceptions about theireconomic benefits too (Pollay and Mittal,1993). Coulter, Zaltman and Coulter(2001) used Zaltman Metaphor ElicitationTechnique to again study the consumerattitudes toward advertising. According tothem, these “attitudes are a function of theconsumer’s perceptions about the variousaspects of advertising” (Coulter, Zaltmanand Coulter, 2001). Deriving from Pollayand Mittal (1993), they studied theseattitudes related to economic effects,personal uses and societal effects ofadvertising. In their study, they alsoclassified the consumers into three groupson the basis of these attitudes shown -ambivalents, skeptics and hostiles. Thehostiles had very negative impressionsabout advertising, and did not see anypositive value attached to it, neither inpersonal uses, nor in economic or societal

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values fulfilled (Coulter, Zaltman andCoulter, 2001). This third group of hostileswas found to be quite similar as the criticalcynics group discovered by Pollay andMittal (1993). This negative attitudetowards advertising, once developed, isbound to impact a consumer’s futureassessments too. Darke and Ritchie(2007) have found that deception throughadvertisements make consumers distrustfulof other future advertisements also, notnecessarily only for that same brand. Thus,it becomes quite imperative to study theimpact of advertising on consumercynicism. Obermiller and Spangenberg(1998) define ad-skepticism as disbelieftoward advertising claims; however, theiruse of the word ‘skepticism’ was limitedonly to the sense of disbelief, and theydidn’t take the motives of advertisers, valueof information provided by advertising,appropriateness and intrusiveness ofadvertising into account while constructingtheir scale (Obermiller and Spangenberg,1998). According to them, ad-skepticismis a belief about advertising, and it is boundto affect a consumer’s attitude toward thegeneral marketing and business practices(Obermiller and Spangenberg, 1998).

H1: A consumer’s skepticism towardsadvertising will have an effect on hiscynicism towards the marketplace.

Dean, Brandes and Dharwadkar (1998)have defined cynicism as an attitudecomposed of beliefs, affect andbehavioural tendencies. The organizationalcynics believe that their workplace lacks

rectitude, and they show contempt, anger,distress etc. toward the organization, andfinally their behaviour takes a negative anddisparaging route (Dean, Brandes andDharwadkar, 1998). Andersson andBateman (1997) have assumed implicitlyin their hypothesis that employees who arecynical at their workplace, generally showcynicism toward life experiences. Applyingsimilar considerations in the consumercynicism research field, Chylinski and Chu(2010) have summarized cynicism as aprocess which relates the threecomponents - cognitive, affective andbehavioural reactions. Odou andPechpeyrou (2011) have considered fourdifferent types of consumer cynicism -defensive, offensive, subversive andethical, and have tried to integrate thesefour types and relate them to resistanceand anti-consumption behaviour. For thepresent study, the defensive cynicism isbeing taken into consideration which isproposed to be a coping psychologicalstrategy against the firm’s persuasionattempts, where the consumers interpretadvertising as being deceiving anddistrustful (Odou and Pechpeyrou, 2011).This defensive cynicism is evident in theindividual purchase actions of a consumerwhen he starts distancing himself from thebrand or the product. According toChylinski and Chu (2010), consumersdevelop cynicism towards a particular firmwhen they interpret the firm’s actions tobe incongruent with their own goals andvalues, and this cynicism rises withrepeated goal or value incongruence.

Impact of Ad-skepticism on Consumer Cynicism


Helm, Moulard and Richins (2015) whiledeveloping their scale to measure aconsumer’s cynicism toward the wholemarketplace, defined consumer cynicismas an attitude, which perceives firms to beopportunists, and believes that thisopportunism leads to the creation of aharmful marketplace. While the scaledeveloped by Chylinski and Chu (2010)measured consumer cynicism behavioursdirected at a particular firm, Helm, Moulardand Richins (2015) developed a scalewhich measured the cynicism attitudetowards the marketplace (Helm, Moulardand Richins, 2015). The three facets ofconsumer cynicism that were identified bythem during scale development weregeneral opportunism displayed by firms,opportunism displayed by the firms thatwere specifically directed at theconsumers, and the deceptive marketingpractices adopted by the firms (Helm,Moulard and Richins, 2015). While tryingto prove the convergent validity of theirscale, they found a positive correlationbetween consumer cynicism and the SKEPscale developed by Obermiller andSpangenberg (1998).

As numerous studies predict consumercynicism arising as a result of a company’sadvertising strategies, one importantobservation that ensues is - all consumersare not equally likely to become cynicstowards advertising. There must be somefactors that must be impacting aconsumers’ beliefs about advertising andare consequential in shaping their attitude.Obermiller and Spangenberg (1998),

while developing their scale for measuringad-skepticism, considered twoantecedents that affect ad-skepticism -personality traits and consumptionexperiences. While age and education(intelligence) were proposed as the factorsthat determine consumption experiences,cynicism and self-esteem were consideredas the personality traits that would affectskepticism toward advertising. Accordingto their findings, there was an increase inad-skepticism with the age of therespondents, as age was used as asurrogate to measure the quality ofaccumulated customer experiences. Whilethe impact of cynicism trait was notvalidated, the self-esteem trait showed apositive correlation with ad-skepticism,proving that people with higher self-esteemshow more skepticism (Obermiller andSpangenberg, 1998). As personality playsan important role in determining a person’sattitude toward a target, and sinceconsumer cynicism is considered as anattitude, it is logical to hypothesize that anindividual’s personality traits will be amajor factor that will impact his cynicismtowards advertising.

H2: A consumer’s personality traits willimpact his skepticism towardadvertising.

H3: A consumer’s consumptionexperience will have an impact on hisad-skepticism.

In the earlier times, there was no concreteconvergence on the particular definitionand dimensions of personality as a

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construct, but over the years a clearerpicture has emerged with most of thepersonality psychologists conforming tofive broad dimensions that can be includedin structure and concepts of personality.Researchers have agreed upon these fiverobust factors, even though there is somevariability in the taxonomy that has beenused in representing these factors.McDougall (1932), in his pioneering workon the categorization of personality traits,has identified five discernible yetinextricable factors comprising thepersonality construct - intellect, character,temperament, disposition and temper.According to him, all individualpersonalities are disparate and compound,yet the basic elemental factors consistingof all these personalities are same(McDougall, 1932). The most noteworthyand doctrinal contribution to this taxonomyis credited to Norman (1963), whoselabels of the five factors - “Extraversion”,“Emotional Stability”, “Agreeableness”,“Conscientiousness” and “Culture” havebeen cited as, in due course, as the “BigFive” (Barrick and Mount, 1991). Thereason for selecting this taxonomy for ourpresent study is that it is a universallyaccepted framework (Judge and Zapata,2015). There are many well establishedscales for measuring the Big-fivepersonality dimensions; however, all ofthese are time-consuming and not practicalfor the present study’s scope. Accordingto prior research, when situation is not idealfor surveying using long instruments,shorter scales have their own advantages

even though they are not as accurate astheir longer versions (Gosling, Rentfrowand Swann Jr., 2003). They help ineliminating the redundancy and itsassociated distress and weariness whileanswering the questionnaire as stated byRobins et al. (2001) (Gosling, Rentfrowand Swann Jr., 2003). Based on theirresearch, Gosling, Rentfrow and SwannJr. (2003) came up with a ten-pointpersonality scale which was tested forconvergent and discriminant validity andtest-retest reliability, in which they adopteda similar terminology as used by Norman(1963), where the five personalitydimensions considered were coined as“Extraversion”, “Emotional stability”,“Agreeableness”, “Conscientiousness”and “Openness to experience” (Gosling,Rentfrow and Swann Jr., 2003).

Even though the word ‘cynicism’ has beenfrequently associated with a consumer’sattitude towards advertising, not muchwork has gone into the study of this termin the advertising and consumer behaviourspace, especially not much empirical studyhas been done to quantify the impact ofadvertising on consumer cynicism. As allconsumers are not expected to showuniform cynicism, the effect of variousmoderating factors on the impact of beliefsabout advertising on consumer cynicismhave to be taken into account. AsObermiller and Spangenberg (1998) haveproposed, these factors can either besituational or dependent on the particularconsumer. The individual factors that arebeing taken into consideration are



knowledge or perception of the consumerof what the advertiser is trying to achievethrough its advertisements (consumerperception knowledge), and themotivation or involvement level of aconsumer while experiencing theadvertisement (Obermiller andSpangenberg, 1998). If a person has abetter knowledge about an advertiser’sintention, he is expected to be more cynicalabout a particular advertisement. Similarly,higher involvement with an advertisementis going to increase the cynicism of aconsumer if his consumption experienceis negative. In addition to these individualmoderators, the situational moderators thatwill determine the impact of advertising onconsumer cynicism are the product orclaim type and the medium of theadvertisement. While studying themoderating effect of product/claim type,it is suggested that the three types ofproduct - search, experience andcredence, will trigger different levels ofcynicism in a consumer (Obermiller andSpangenberg, 1998). Consumers wouldbe most cynical about credence goodsclaims, moderately cynical of experiencegoods, and the least cynical about thesearch goods claims (Obermiller andSpangenberg, 1998). Similarly, thedifferent mediums of advertising willimpact consumer cynicism to differentextents. While a less intrusive medium likeprint media might generate a lesser degreeof consumer cynicism, a more intrusivemedium like television advertisement willaffect a consumer to a higher extent.

H4: Knowledge/expertise of a consumerwill act as a moderator on the effect ofadvertising on his cynicism.

H5: Motivation/involvement of aconsumer will have a moderating effecton his cynicism.

H6: Product/claim type will moderatethe impact of advertising on consumercynicism.

H7: Medium of advertisement will actas a moderator on consumer cynicism.

Method

The current study aims at verifying theimpact of advertising skepticism on aconsumer’s cynicism, and the moderatorsas proposed in the hypothesized modelhave not being pursued in the presentresearch.

Sample:The questionnaire was distributed to 528employees of a particular organization, outof which 302 were returned, signalling aresponse rate of 57%, and 255 responseswere finally considered for our study aftereliminating incomplete and erroneousentries. The sampling method used wasconvenience sampling as the organizationunder consideration was easily accessiblefor data collection.

Measure:

The questionnaire for the study wasdesigned based on literature review done.The questionnaire had 2 sections. The firstsection dealt with capturing demographicdetails of the respondents like gender, age

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and education level, which will capture thevariable - consumption experience. Thesubsequent section had 27 items meant foroperationalizing the 3 constructs which arepart of the research model. All statementswere presented on a 7-point extendedLikert scale with 1 being “StronglyDisagree” to 7 being “Strongly Agree”.This section consisted of questionsgenerated from 3 different scales - Ten-Item Personality Inventory (TIPI) scale(Gosling, Rentfrow, Swann Jr., 2003) formeasuring the personality traits of anemployee; SKEP scale (Obermiller andSpangenberg, 1998) for measuring thecustomer’s skepticism toward advertising;and the items included in the ConsumerCynicism scale as developed by Helm,Moulard and Richins (2015) to measurea consumer’s general cynicism toward themarketplace.

Analytical Techniques:Descriptive research design was employedto study the impact of customer’spersonality dimensions and hisconsumption experience on his skepticismtoward advertising, and subsequently onhis cynicism toward the marketplace. Afactor analysis was done for SKEP andConsumer Cynicism constructs, but not forPersonality construct as it consists of twoitems per sub-component. Internalconsistency reliability of the items wastested using Cronbach alpha value. Boxplots were generated to analyze thedescriptive statistics of the data collected.Normality of the data was tested by usingShapiro-Wilk’s test, and plotting the

probability density function. Therelationship between personality traits andadvertising skepticism was analyzed usingPearson’s correlation coefficient to ensurethat the constructs do not show multi-collinearity with a correlation of more than0.9 magnitude. Linear regression analysiswas done between various constructs tofind out the strength and significance of therelationships between them. The modelvalidity was tested, and its goodness of fitanalyzed.

Data Analysis

The general characteristics of the 255respondents are given in Table 1. Factoranalysis using principal component analysisand varimax rotation was done for ad-skepticism and consumer cynicismconstructs after data was gathered. The 9item SKEP data was submitted to PCA.A single factor was extracted with EigenValue of 5.862, and consisted of all the 9items (SKEP 1, 2, 3, 4, 5, 6, 7, 8 and 9).The factor explained 65.136% of variancewhich is above the minimum acceptablevalue of 50%. The factor analysis (PCA)of the 8 item Consumer Cynicism dataresulted in the extraction of two factorsconsisting of 4 items from the scale. Aftertwo iterations, deleting the items for cross-loading, two factors were extracted withEigen Values of 2.350 and 1.047. The firstfactor with items (CYN 7 and 8)comprises of the components which showthat companies are willing to do anythingto improve their profit margins; and thesecond factor consisting 2 items (CYN 1and 3) reflects the capability of the



company deceiving the consumers andgoing against law. The 2 factors explained84.919% of variance which is again abovethe minimum acceptable value of 50%.

A reliability test was done on the reducedscales of the constructs. The CronbachAlpha score for the personality, ad-skepticism and consumer cynicismconstructs was found to be 0.772, 0.931and 0.762 respectively. The Cronbachalpha scores of the factors comprising thethree constructs which are given in Table2 were found to have a value > 0.7 for allthe factors, thus, guarantying that the scalesused for the research are reliable andinternally consistent. However, theCronbach Alpha score for age andeducation factors was found to be belowthe desired level. This might be becauseof the reason that these two parametersare not an appropriate indicators of aconsumer’s experience. Henceforth, thesetwo parameters are dropped from the dataanalysis and some other variables capturingthe consumption experience will beconsidered in any future research.

The descriptives of the various variabledata are mentioned below in Table 3. Theanalysis of the box plots of these constructsas shown in Figures 2, 3 and 4 establishthat there are no outliers present in thedata. The density functions of theconstructs were also plotted in Figures 5,6 and 7 to gather an idea about how theirprobabilities are distributed.

To ensure that the model doesn’t getimpacted from multi-collinearity, the

Kendall rank correlation coefficient wascalculated between gender, age andeducation of the respondents, as these aredummy variables, and the scores werefound to be less than 0.9 in all the cases.Similarly, the correlation coefficientsbetween personality, ad-skepticism andconsumer cynicism were also found to belower than 0.9 in every case as given inTable 4, thus, no further handling ofvariables was needed.

Shapiro-Wilk’s test was conducted forvarious data sets, and it was found thatnone of the variables satisfied therequirements to be classified as normaldistribution. The personality Shapiro testresulted in a p-value of 0.0043; for ad-skepticism, it was 5.434e-07; and forconsumer cynicism, the p-value came outto be 0.00015. As all the three p-valuesare below the desired level, thus parametrictests cannot be applied for them, andinstead, non-parametric tests wereconducted for the same.

The Wilcoxon rank sum test with continuitycorrection for consumer cynicism basedon the gender of the respondent resultedin W = 4570 with a p-value of 0.7299.As this p-value > 0.5, we do not rejectthe null hypothesis, and thus, no significantdifference was found in the consumercynicism level between the two genders.Similarly, as we have dropped age andeducation as variables which canaccurately measure a consumer’sexperience due to poor reliability scores,they were used only to compare theconsumer cynicism based on the groups

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according to them. To compare the groupmedians, we used Kruskal-Wallis test, asthe group samples are independent of eachother. The p-value for the Kruskal-Wallistest of consumer cynicism based on thegroups created according to the age andeducation of the respondents was 0.5227and 0.2476. Fligner-Killeen test ofhomogeneity of variances for consumercynicism based on age, resulted in p-valueof 0.4538 and based on education, gavea p-value of 0.664. As both the p-valuesare more than 0.05, we can validate theresults of the Kruskal-Wallis test, and thus,the medians of the various groupsaccording to age and education areassumed to be equal.

While plotting the regression line betweenconsumer cynicism and ad-skepticismthrough the origin represented in Figure 8,the estimate value of β , i.e., ad-skepticismcoefficient estimate was found to be0.407490, and the other findings aresummarized as adjusted R-squared =0.971, F-statistic is 8543 on 1 and 254DF with a p-value < 2.2e-16. The p-valueof the Shapiro-Wilk’s test on the residualswas found to be 0.99087, which is > 0.05.To predict the stability and usability of theregression equation, regression diagnosticswere run on the model. There was no fixedpattern found in the residual values plot,thus, confirming that the model does notsuffer from any heteroscedastic variance.The points in the Normal Q-Q plot werefound to be more or less lying on thepredicted line, and thus, we can safelyclaim that the residuals form a normal

distribution in this case. The same was alsoconfirmed by the Shapiro-Wilk’s test onthe residuals, as already mentioned in theprevious paragraph. No fixed pattern wasfound in the scale location plot too, thus,further strengthening the viability of themodel. Finally, no overtly detectableoutliers were found to be there in theleverage plot. All these findings are shownin Figures 9, 10, 11 and 12. A cross-validation test was run on the linear modelbetween consumer cynicism and ad-skepticism using both 3-fold and 10-foldcross-validation techniques as shown inFigure 13. The model was found to besignificant with F value of 8543 and p-value < 2e-16. The overall mean squarewas 8.93 (for 3-fold validation) and 8.94(for 10-fold validation).

As an appropriate linear regression modelcould not be fitted to explain therelationship between personality and ad-skepticism, a non-linear regression wascarried out to find the desired relationship.An exponential non-linear least squaresmodel (ad-skepticism ~ a * personality ̂b) was fitted to the data, and the resultsare summarized as - estimate of ‘a’ =0.99525, estimate of ‘b’ = 0.76464, bothwith significant p-value of 5.37e-08 andless than 2e-16 respectively. The residualstandard error was found to be 2.869 on253 degrees of freedom, and the achievedconvergence tolerance was 8.883e-06.The regression is shown in Figure 14.When the regression diagnostics were runand the residuals were plotted as given inFigure 15, they were found to be



approximately normally plotted (Q-Qplot), without any evidence ofautocorrelation or heteroscedasticvariance. Both the Shapiro-Wilk test andRuns test resulted in p-value greater than0.05, further proving the normality and no-autocorrelation of the residuals. Thepredicted non-linear least squares modelwas cross-validated using leave-one-outcross validation technique and the plot wasfitted to the data points. The leave-one-out mean square error was found to be8.29957, whereas the mean square errorvalue was 8.16644. The cross-validationplot is given in Figure 16.

Findings and Discussions

The objective of the current study was toanalyze the impact of a consumer’spersonality traits and his consumptionexperience on the skepticism that he showstoward advertising in total, and in turn itsimpact on his general cynicism toward themarketplace. A model was developed byusing the big-five personality dimensions,the SKEP scale for measuring ad-skepticism, and the consumer cynicismscale. Results from the empirical researchprovide support for the followinghypotheses that were being tested.

Employee’s personality was found to havea correlational impact on his skepticismtoward advertising, but instead of findinga linear regression between personality andad-skepticism, a non-linear effect waspredicted between the two. Therelationship followed a non-linear curve,in which ad-skepticism was found to be

dependent on an exponential function ofpersonality.

Though, personality was found to have aneffect on ad-skepticism, same could notbe concluded with respect to hisconsumption experience, which was beingmeasured with the help of his age andeducation levels. This might be becauseof the variables - age and education level,may not be appropriate for capturing aconsumer’s experience. A person ofconsiderable lesser age and still in hisearlier stages of education might havegained significantly more consumerexperience than his older and moreeducated counterpart due to changes inthe buying scenario.

Till date research has proposed the factthat a consumer’s skepticism toward hasan effect on his cynicism level.Substantiating this concept, it was foundthat a person’s ad-skepticism has acorrelational effect on his consumercynicism. There exists a linear regressionbetween the ad-skepticism and consumercynicism constructs according to thefindings of present research.

Even though age and education were notfound to have any correlational impact ona consumer’s ad-skepticism, still whilestudying the effect of the demographicvariables of a consumer on his cynicismlevels, it was concluded that an employee’sgender, age and education level didn’t havea significant differentiating impact on hisconsumer cynicism among the variousgroups.

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Conclusion

The study investigated the impact of aconsumer’s personality and hisconsumption experience on his skepticismtoward advertising, and in turn, its impacton his cynicism toward the marketplace.It was found that the personality of aperson affects his ad-skepticism in asignificant way, though not in a linearrelationship, but rather in a non-linearmanner. The consumption experience ofthe individual as measured by his age andeducation, was however found to have noimpact on his skepticism towardadvertising in general. Similarly, theskepticism of a consumer towardadvertising was also found to impact hiscynicism levels toward the generalmarketplace linearly. If these relationshipscan be understood perfectly by acompany, then it can definitely improve itsmarket position by coming up withappropriate advertising strategies, and alsomaking sure that it doesn’t over-burdenthe audience with its marketing campaignand communications.

References

Andersson, L. M., and Bateman, T. S.,1997. Cynicism in the Workplace: SomeCauses and Effects. Journal ofOrganizational Behavior, Vol. 18, No. 5,449-469.

Barksdale, H. C., and Darden, W. R.,1972. Consumer Attitudes TowardMarketing and Consumerism. Journal ofMarketing. Vol. 36, 28-35.

Barrick, M. R., and Mount, M. K., 1991.The Big Five Personality Dimensions andJob Performance: a Meta-Analysis.Personnel Psychology, 44, 1-26.

Chylinski, M., and Chu, A., 2010.Consumer Cynicism: Antecedents andConsequences. European Journal ofMarketing, Vol. 44 No. 6, 796-837.

Coulter, R. A., Zaltman, G., and Coulter,K. S., 2001. Interpreting ConsumerPerceptions of Advertising: An applicationof the Zaltman Metaphor ElicitationTechnique. Journal of Advertising, 30, 4,1-21.

Darke, P. R., and Ritchie, R. J. B., 2007.The Defensive Consumer: AdvertisingDeception, Defensive Processing, andDistrust. Journal of Marketing Research,Vol. XLIV, 114–127.

Dean, J. W. Jr., Brandes, P, andDharwadkar, R., 1998. OrganizationalCynicism. The Academy of ManagementReview, Vol. 23, No. 2, 341-352.

Gosling, S. D., Rentfrow, P. J., and SwannJr., W. B., 2003. A Very Brief Measure ofthe Big-Five Personality Domains. Journalof Research in Personality, 37, 504–528.

Helm, A. E., Moulard, J. G., and Richins,M., 2015. Consumer Cynicism:Developing a Scale to Measure UnderlyingAttitudes Influencing Marketplace Shapingand Withdrawal Behaviours. InternationalJournal Of Consumer Studies, 39, 515–524.

Judge, T. A., and Zapata, C. P., 2015. ThePerson-Situation Debate Revisited: Effect



of Situation Strength and Trait Activationon the Validity of the Big Five PersonalityTraits in Predicting Job Performance.Academy of Management Journal, Vol.58, No. 4, 1149–1179.

Kotler, P., and Keller, K.,2011. Marketing Management, 14thedition, Prentice Hall.

McDougall, W., 1932. Of the WordsCharacter and Personality. Character andPersonality, 1, 3-16.

Norman, W. T., 1963. Toward anAdequate Taxonomy of PersonalityAttributes: Replicated Factor Structure inPeer Nomination Personality Ratings.Journal of Abnormal and SocialPsychology, Vol. 66, No. 6, 574-583.

Obermiller, C., and Spangenberg, E. R.,1998. Development of a Scale to MeasureConsumer Skepticism TowardAdvertising. Journal Of ConsumerPsychology, 7(2), 159-186.

Odou, P., and Pechpeyrou, P., 2011.Consumer Cynicism: From Resistance toAnti-Consumption in a DisenchantedWorld. European Journal of Marketing,Vol. 45 No. 11/12, 1799-1808.

Pollay, R. W., and Mittal, B., 1993. Here’sthe Beef: Factors, Determinants, andSegments in Consumer Criticism ofAdvertising. Journal of Marketing, Vol. 57,No. 3, 99-114.

Swanson, L., 1975. Doceatur Emptor.Journal of Advertising, 4(1), 23-28.

Appendix

I. Questionnaire:A. Demographic data

1. What is your gender?

(a) Male (b) Female

2. Which of the following categoriesdescribe your age?

(a) 21-30 (b) 31-40 (c) 41-50 (d) 51-60

3. What is your education level?

(a) Below 10th (b) 10th pass (c) 12th pass(d) Graduate (e) Post graduate (f)Doctorate

B. Personality dimensions (TIPI Scaleby Gosling, Rentfrow and Swann Jr.,2003)

(Rate on a scale from 1 to 7 where “1 -disagree strongly, 2 - disagree, 3 - disagreesomewhat, 4 - undecided, 5 - agreesomewhat, 6 - agree, 7 - agree strongly”)

I see myself as:

4. Extraverted or enthusiastic.

5. Critical or quarrelsome.

6. Dependable or self-disciplined.

7. Anxious or easily upset.

8. Open to new experiences orcomplex.

9. Reserved or quiet.

10. Sympathetic or warm.

11. Disorganized or careless.

12. Calm or emotionally stable.

95

13. Conventional or uncreative.

C. Advertising skepticism (SKEP Scaleby Obermiller and Spangenberg,1998)


14. We can depend on getting the truthin most advertising.

15. Advertising’s aim is to inform theconsumer.

16. I believe advertising is informative.

17. Advertising is generally truthful.

18. Advertising is a reliable source ofinformation about the quality andperformance of products.

19. Advertising is truth well told.

20. In general, advertising presents a truepicture of the product beingadvertised.

21. I feel I have been accurately informedafter viewing most advertisements.

22. Most advertising provides consumerswith essential information.

D. Consumer Cynicism (Consumercynicism scale by Helm, Moulard andRichins, 2015)


23. Most companies do not mindbreaking the law; they just see finesand lawsuits as a cost of doingbusiness.

24. Most businesses are more interestedin making profits than in servingconsumers.

25. Companies see consumers aspuppets to manipulate.

26. Manufacturers do not care whathappens once I have bought theproduct.

27. If I want to get my money’s worth, Icannot believe what a company tellsme.

28. Most companies will sacrificeanything to make a profit.

29. To make a profit, companies arewilling to do whatever they can getaway with.

30. Most businesses will cut any cornerthey can to improve profit margins.

II. Tables:1. Descriptive of the Respondents



VARIABLES CATEGORIES NUMBER OF RESPONDENTS

Gender Male Female

45 210

Age

21-30 31-40 41-50 51-60

52 82 59 62

Education

Below 10th 10th pass 12th pass Graduate Post Graduate Doctorate

17 158 36 38 5 1

2. Reliability Analysis

CONSTRUCT FACTORS CRONBACH ALPHA

Personality Extraversion 0.883 Emotional Stability 0.913 Agreeableness 0.797 Conscientiousness 0.805 Openness to experience 0.728 Ad-skepticism SKEP 0.931 Consumer Cynicism CYN Factor 1 0.902 CYN Factor 2 0.726

3. Descriptive StatisticsCONSTRUCT MINIMUM MEDIAN MEAN MAXIMUM SD VARIANCE IQR Personality 24 44 45.28 67 9.597 92.109 14 Ad-skepticism 16 42 41.17 59 10.107 102.143 15 Consumer Cynicism 7 17 17 26 4.296 18.453 6

4. Correlation Matrix

PERSONALITY AD-SKEPTICISM CONSUMER CYNICISM

PERSONALITY 1 0.669 0.569 AD-SKEPTICISM 0.669 1 0.751 CONSUMER CYNICISM 0.569 0.751 1

97

III. Figures:1. Hypothesized Model

Situational Factors

Product/ Claim type Medium of advertising

Individual Factors

Knowledge/ Expertise

Motivation/ Involvement

Consumer Cynicism

Ad-skepticism

Consumption Experience

Personality Traits

2. Personality Box Plot

3. Ad-skepticism Box Plot

4. Consumer Cynicism Box Plot

5. Personality Density Function

6. Ad-Skepticism Density Function



7. Consumer Cynicism Density Function

8. Consumer Cynicism - Ad-skepticismRegression Line

9. Consumer Cynicism - Ad-skepticismResidual vs. Fitted Plot

10. Consumer Cynicism - Ad-skepticismResidual Normal Q-Q Plot

99

11. Consumer Cynicism - Ad-skepticismResidual Scale Location Plot

12. Consumer Cynicism - Ad-skepticismResidual vs. Leverage Plot

13. Cross-validation of ConsumerCynicism - Ad-skepticism LinearModel



14. Ad-skepticism - Personality Non-Linear Regression

15. Ad-skepticism - Personality Residual Analysis

16. Cross-validation of Ad-skepticism -Personality Model

nnn

101

FINANCIAL LITERACY IN THE UNORGANIZEDSECTOR IN PURBA MEDINIPUR DISTRICT OF

WEST BENGAL

Debabrata JanaResearch Scholar, Department of Commerce with Farm Management, Vidyasagar University,

Midnapore, [email protected]

Abhijit SinhaAssistant Professor (Corresponding author): Department of Commerce with Farm

Management, Vidyasagar University, Midnapore, [email protected]

Arindam GuptaProfessor, Department of Commerce with Farm Management, Vidyasagar University, Midnapore

[email protected]


ABSTRACT

The study attempts to look into the status of financial literacy in theunorganized sector of Purba Medinipur district of West Bengal. The focusis to identify any degree of association between the different variablesthat represent demographic factors and the level of financial literacy.For having a heterogeneous sample representing different parts of thedistrict, multistage sampling method has been applied. First, five blocksof Purba Medinipur district have been chosen, following which onevillage has been chosen from each of them. Then, ten respondents fromeach village have been interviewed with the help of a questionnaire.Fisher’s Exact Test is used to examine the significance of the associationbetween the two kinds of classification as the sample sizes are small.

Key words: Financial Inclusion, Demographic Factor, UnorganizedSector, Fischer’s Exact Test.

INTRODUCTION

Financial literacy is the ability to understandfinance. It refers to the ability to makeinformed judgments and to take effectivedecisions regarding the use andmanagement of money. A combination ofawareness, knowledge, skills, attitude and


behaviour is necessary to arrive at soundfinancial decisions and ultimately achieveindividual financial well-being. It pertainsto that literacy that allows an individual tomake informed and effective decisionsafter understanding their financialimplications. Financial literacy is mainly


used in connection with decision-makingat the personal level. It often covers theknowledge of properly making decisionspertaining to personal finance areas likereal estate, insurance, investing, saving, taxplanning and retirement and involvesintimate knowledge of financial conceptslike compound interest, financial planning,investment schemes, consumer rights, timevalue of money etc.

OECD (2005) defines financial educationas “the process by which financialconsumers/investors improve theirunderstanding of financial products andconcepts and, through information,instruction and/or objective advice,develop the skills and confidence tobecome more aware of financial risks andopportunities, to make informed choices,to know where to go for help, and to takeother effective actions to improve theirfinancial well-being.” This concept is notrestricted to the investors only. Rather, itis the requirement for anybody. It isbecoming even more essential for anyfamily trying to decide how to balance itsbudget, buy a home, fund the children’seducation and ensure an income when theearning member retires. Now-a-days,consumers are not just choosing betweeninterest rates on two different bank loansor savings plans, but are rather beingoffered a variety of complex financialinstruments for borrowing and saving, witha large range of options. Hence, withoutfinancial education, the best choice cannotbe made. Moreover, as life expectancy isincreasing, the requirement of pension is

becoming important. It will not only bepossible for individuals to choose the rightsavings or investments for themselveswithout financial literacy but also they maybe at the risk of being cheated. But, ifindividuals become financially educated,they will be able to do better financialplanning and will maintain a balancebetween savings and expenditure. Theterm ‘financial education’ is extremelyrelevant for the informal sector of thecountry since they are the most vulnerableclass and require the most prudentdecisions so that their limited wealth cangenerate returns that will help to manageall aspects of life satisfactorily. Hence, fromthe basic concept of financial education,there is no doubt in saying that it isimportant for all classes but is extremelyvital for the unorganized class of the society.

Small, informal enterprises play animportant role in shaping the growth of adeveloping economy undergoing a processof structural reforms. The informal sectoras defined in the resolution of the 15thInternational Conference of LabourStatisticians (ICLS), January 1993,consists of unincorporated householdenterprises which differ from formalenterprises in terms of technology,economies of scale, use of labor intensiveprocesses, and virtual absence of wellmaintained accounts. Although the informalsector has been characterized as above,no clear-cut operational definition ofinformal sector is available for the purposeof data collection. In India and in otherdeveloping countries in Asia and the

103

Pacific, however, the “unorganized”segment of the economy closelyapproximates the ICLS concept of theinformal sector. The unorganized segmentis labour intensive and providesemployment to a sizable section of thepopulation. The size of the informal sectoris examined in terms of the employment itgenerates and its contribution to valueadded. Looking into the huge percentageof workers in this informal sector, (83%employment) as per Srija and Shirke,2014, the role of financial education isextremely important. The absence offinancial literacy will lead to making poorfinancial decisions which will ultimatelyhamper them at not only at present but alsoin the future. Thus, this study aims to lookinto the aspect of financial literacy of theunorganized sector that will help to assessthe risk it is exposed to.

Literature review

A brief of a few studies already done inthis area in the last few years is givenbelow. A chronological sequence of theworks done is stated under.

Aggarwal and Gupta (2014) explain thefinancial literacy of college students. Thestudy reveals that the level of educationand discipline (commerce or non-commerce) influences financial literacyamong youths. The researchers commentthat different courses on finance forstudents, website launches for free financialinformation and role of the central bank ininvolving commercial banks, governmentmachinery, NGO’s, schools, colleges etc.

will help to reduce financial literacy in thecountry.

Attarwala (2014) explains the concept offinancial literacy and initiatives taken by theSEBI in rural areas. To promote financialinclusion, the researcher suggests differentprogrammes related to financial education,financial literacy programs in rural areas etc.

Bhatia (2012) focuses on thecircumstances that increase the importanceof financial literacy. He finds that financialliteracy is needed for Indian householdssince inspite of more than 50% peoplehaving savings account, more than one thirdkeep their money in their home and a fewsaves money at post offices. Moreover,majority of the rural people borrow moneyfrom money lenders for meeting recurringexpenditure such as health, medicaltreatment and routine householdexpenditure.

Bhattacharjee (2014) examines thefinancial literacy level of the individuals andits influencing factors. The researcherreveals that around 50% showedmoderate level of financial literacy withawareness about common terms but lowawareness about advanced financialinstruments. The study reveals theinfluence of age, education, income andnature of employment on financial literacybut no effect of gender.

Gupta and Kaur (2014) examine howfinancial literacy program helps to achievefinancial inclusion among the microentrepreneurs of district Kangra ofHimachal Pradesh. They reveal that of the

Financial Literacy in the Unorganized Sector in ...


cent percent account-holding respondents,64% of the people keep proper record ofincome but had no specific idea aboutdifferent savings schemes. The lowfinancial skills get reflected by the poorrecord keeping practices, poor cashmanagement, improper saving habits, andless awareness regarding different financialproducts and instruments.

Hung et al. (2009) show that financialliteracy can be measured using statisticaltools like mean, median, standard deviation,correlation and regression with gender, age,education, and household income. Thestudy reveals that there is a strong correlationbetween stability of financial literacy andmeasurement strategies.

Mathivathani and Velumani (2014)examine the factors that influence lowfinancial literacy of marginalized women inrural areas of Tamil Nadu. Theinvestigation points to the influencingfactors of low income, communicationgap, inability to read or write in Hindi orEnglish, lack of computer knowledgebecause of their understanding of locallanguage only and majority not beingearning members of the family.

Ravikumar et al. (2013) examine thefinancial literacy of jasmine growers inErode and Madurai. The researchersreveal a drastic difference in the literacylevel with Erode farmers having highfinancial literacy which is evident from theirbetter utilization of different financialschemes of financial institutions. Age,education, experience, farm income, years

of relationship with the bank, size oflandholding, frequency of bank visit andbank account significantly influencesfinancial literacy.

Sarva (2014) discusses the necessity andimportance of financial literacy for promotingfinancial inclusion. The researchers revealspoor financial planning for future, lowknowledge of financial products, low or noinsurability, poor way of managing domesticfinance etc. Only a few understood risk andreturn, diversification, compound interest,time value of money, inflation, online banking,online broking, mediclaim policy, pensionplans etc.

Sekar and Gowri (2015) examine thefinancial knowledge, money managementskills, challenges, goals and the level offinancial literacy of the young employeesbelonging to Coimbatore. The studyreveals the influence of age, region,income, number of dependents, mother’seducation, financial advice etc. on financialliteracy.

Sing (2014) examines the impact offinancial literacy among the low andmoderate income individuals and the roleof RBI for developing financial literacy formacro economic advantage of theeconomy. The researcher reveals that lowfinancial literacy is linked to lowerhousehold savings. Financial illiteracy ismore in the case of women, less educated,low income groups, ethnic minorities andalso older respondents. Reserve Bank ofIndia attempt to build a formal structureof financial literacy by introducing financial

105

literacy and credit counseling centre’s insemi-urban and rural areas wherefinancially excluded population resides.

Thilakam (2012) examines the socio-economic condition of the rural people. Theresearcher observes poor correlationbetween the saving/investment andexpenses met by the rural householdsagainst a strong association between ruralinvestor awareness level and their socio-economic status is revealed.

Trivedi and Trivedi (2014) examine thestatus of financial literacy among theconsumers in Lucknow, Barabanki andMohanlalganj districts. The researchersreveal that males, urban people and higherincome groups are more aware aboutfinancial knowledge. Marital status has noeffect on financial literacy.

On the basis of the literature surveyed, itis evident that there are several studiesrelating to financial literacy. Numerousresearch papers have been published thatcover different aspects like strategicinitiatives to improve financial literacy,factors influencing literacy and the statusof financial literacy among differentsegments of the society.

Objectives of the Study

The objectives of the study are:

• To assess the extent of financial literacyamong the unorganized sector workersin Purba Medinipur district, and

• To identify the degree of association,if any, between different demographicfactors like gender, level of income,

literacy level etc. with financialliteracy.

Hypotheses tested

(i) H01: There is no association betweenfinancial literacy and gender.

(ii) H02: There is no association betweenfinancial literacy and education level.

(iii) H03: There is no association betweenawareness about different kinds ofaccount and gender.

(iv) H04: There is no association betweenawareness about different kinds ofaccount and education level.

(v) H05: There is no association betweenfinancial literacy (relating to regulatorybodies) and education level.

(vi) H06: There is no association betweencapability to fill up forms andeducation level.

Research design

In order to have a sample representing thepopulation, multistage sampling methodhas been applied. First, five blocks ofPurba Medinipur district have beenchosen, following which one village hasbeen chosen from each of them. Then, tenrespondents from each village have beeninterviewed with the help of aquestionnaire. The names of the block areContai-I, Deshpran, Contai-III,Bhagwanpur-I, Chandipur. The villageschosen from the blocks are Natdighi,Sarada, Olma, Fatepur and Babuiarespectively. Therefore, based on oursampling design, for the study, the number



of respondents is 50. Data are collectedon the basis of a primary survey using aclose-ended questionnaire.

Generally, chi-squared test is good forexamining the association between thevariables but in our study, since some ofthe cells have a value less than five in thecontingency table, it could not be applied.Thus, the researchers had to take resortto the Fisher’s exact test. This is astatistical test which is used to examine thesignificance of the association between thetwo kinds of classification when the samplesizes are small. It is valid for large samplesizes also. This test is relevant when in anycontingency table some cell values are lessthan five, i.e., upto five sample size isobserved.

Analysis and findings

The analysis and findings of the study areclassified into three heads, a general studyof the profile of the respondents, followedby their socio-economic profile and endingwith the status of their financial literacy level.

(a)General profile of the respondents(i) Gender break-up

Table No-1: Male & Female Ratio

Gender % of Respondents

Male 86

Female 14

Total 100

Source: Primary data

(ii) Age profile

Table No -2: Age Bands


Age Bands % of Respondents

Young generation 34

Middle aged 34

Upper middle aged / senior citizens 32

Total 100

The table shows that the respondents havebeen classified into three groups. Thebreak-up of the respondents is as follows:young generation, i.e., up to 35 years(34%), middle aged, 36-55 years (34%)and senior citizen, more than 55 years(32%).

(b)Socio-economic profile of therespondents

In terms of the socio-economic profile ofthe respondents, various aspects likeoccupation, income and educationalqualifications are looked into which areelaborated below.

(i) Occupational aspect

Table No -3: Occupation

Occupation % of Respondents Unemployed 4 Agriculture 28

Labour 20 Business 24 Others 24 Total 100 In the above table, it is observed that out

of total respondents, 86% are males,whereas the remaining are females. Source: Primary data

107

In table no 3, the occupational structureof the respondents is presented. In oursurvey, 4% respondents have a 'noemployment' status, 28% respondents areinvolved in agriculture, 20% respondentsare labourers, 24% have a business andthe remaining ones are involved in someother informal sectors.

(ii) Economic aspect

Table No-4: Income profile

Monthly Income (Rs.) % of Respondents

Less than 5000 18 5001 to 10,000 30 10001 to 15000 26 15001 to 20000 22 Above 20000 4

Total 100


(iii) Educational aspect

Table No -5: Educational Qualification

Educational Qualification % of Respondents

Up to Primary education 40

Up to Secondary education 50

Beyond secondary education 10

Total 100


In table no-4, the different incomecategories considered for our survey andthe percentage of respondents falling indifferent strata have been shown.

In table no-5, the education level of therespondents is depicted which is put intothree levels, viz., up to primary, up tosecondary and higher secondary level andbeyond. From the survey, it is observedthat out of total respondents, 40% haseducation till primary, 50% covered hasstudied till the secondary level and only10% studied beyond the secondary level.

(c)Financial literacy status of thesample respondents

(i) Awareness about different financialterms and Gender: Relationship

Table No-6: Awareness about different financial terms

Awareness Gender (in %age) Total (in %age) Male Female

Low Awareness 12 4 16

Moderately Aware 56 8 64

Highly Aware 18 2 20

Total 86 14 100


In the above table, the relationshipbetween gender and awareness aboutdifferent financial terms like mortgage,share, debenture, LIC, health insurance,

postal life insurance, general insurance etc.is presented. Out of seven terms, if anyrespondent knows about less than orequal to three terms, then he/she belongs



to the first group (low awareness). If anyrespondent knows about more than threeterms but up to five terms, then therespondent belongs to the second group(i.e., moderately aware). Therefore, therespondent having knowledge of morethan five falls into the third category, i.e.,‘highly aware’. From the test results, it isfound that out of total male respondents,12%, 56% and 18% fall in the lowawareness, moderately aware and highlyaware groups respectively. On the otherhand, out of total female respondents, 4%,8% and 2% fall in the low awareness,moderately aware and highly aware groupsrespectively. So, it may be concluded thatmale respondents are slightly morefinancially aware compared to the femalerespondents.

For understanding the association betweenthe above two variables, an appropriatestatistical test is used. Generally, chi squaretest is used to find out the degree ofassociation between two attributes. But,in our case, since there are some cellshaving a value of less than five, this testcould not be run. Hence, as an alternative,as suggested by some statisticians, theFischer’s exact test has been used (http://udel.edu/~mcdonald/statfishers.html).The p-value (0.00002) shows that thereis a very strong association betweengender and awareness which is significantat 1%.

(ii) Awareness about different financialterms and Educational level:Relationship

Table No-7: Awareness about different financial terms

Awareness Educational level (in %age)

Total (in %age)

Up to Primary education

Up to Secondary education

Beyond secondary education

Low Awareness 8 8 2 18

Moderate Awareness

28 30 4 62

High Awareness 4 12 4 20

Total 40 50 10 100 Source: Primary data

In the above table, the relationshipbetween education level and awareness ofpeople about different financial terms (asin the above case) is presented. Out oftotal respondents belonging to the firstgroup, 8%, 28% and 4% have low,moderate and high awareness level

respectively. Of the second category, 8%,30% and 12% has low, moderate and highawareness levels. In the last category of‘beyond secondary education’, 4% eachis in the moderately aware and highlyaware level. Thus, overall, the respondentsshow moderate level of awareness about

109

some basic financial securities andinvestment avenues.

To test whether there is any relationshipbetween awareness and education level,here also the Fischer’s exact test isrequired to be applied. A high p-value

accepts the null hypothesis therebypointing to no association betweenawareness about different financial termsand education level.

(iii)Awareness about different types ofaccount and Gender: Relationship

Table No-8: Awareness about different types of account

Awareness Gender (in %age) Total (in %age) Male Female

Low Awareness 26 8 34

Moderately Aware 26 4 30

Highly Aware 34 2 36

Total 86 14 100 Source: Primary data

In the above table, the relationshipbetween gender and awareness aboutdifferent types of accounts like savings,current, recurring, fixed deposit and loanaccount is presented. A similar approach,as used before, is taken here as well. Outof five terms, if any respondent knows upto two terms, s/he belongs to the first group(low awareness). If any respondent knowsany of the three terms, the respondentbelongs to the second group (i.e.,moderately aware). Therefore, therespondent knowing more than three termsfalls in the third category, i.e. 'highly aware'.From the test results, it is found that out oftotal male respondents 26%, 26% and34% fall in the low awareness, moderatelyaware and highly aware groupsrespectively. On the other hand, out of total

female respondents, 8%, 4% and 2% fallin the low aware, moderately aware andhighly aware groups respectively. It isapparent that the awareness level is loweramong the female respondents.

For statistical analysis of the associationbetween the above two variables, againthe Fischer's exact test had to be applied( h t t p : / / u d e l . e d u / ~ m c d o n a l d /statfishers.html). The p-value (0.0835)result shows that the degree of associationis comparatively low, but is significant at10%. In statistical terms, there is anassociation between awareness aboutdifferent types of account and gender.

(iv) Awareness about different types ofaccount and Educational level:Relationship



Table No-9: Awareness about different types of account Awareness

Educational level (in %age) Total (in

%age) Up to Primary

education Up to

Secondary education

Beyond secondary education


Moderately Aware 12 20 2 34

Highly Aware 8 18 6 32

Total 40 50 10 100


In the above table, relationship betweeneducation level and awareness of peopleabout different financial terms like savingsaccount, current account, recurringaccount, fixed deposit account and loanaccount is presented. A look at the tableshows that in the third category, theawareness level is quite high in comparisonto the other two.

Out of 40 percent respondents in the firstgroup, 20% has low awareness with only8% having high awareness level. In thesecond category, the maximum number isin the moderately aware level. In the lastcategory of 'beyond secondary education',2%, 2% and 6% of the respondents have

low, moderate and high awareness levelrespectively. Hence, there exists aninfluence of education level on awarenessabout different types of account.

For a statistical check of the results, theFischer's exact test is applied which givesa p-value of 0.283, thereby leading to theacceptance of the null hypothesis.Therefore, we can say that there is noassociation between awareness of peopleabout different types of account andeducation level.

(v) Awareness about different types ofregulatory bodies and Educationallevel: Relationship

Table No-10: Awareness about different types of regulatory body

Awareness

Educational level (in %age) Total (in %age) Up to

Primary education

Secondary education

Higher secondary education and

beyond


Moderately Aware 2 6 4 12

Highly Aware 2 6 2 10

Total 40 50 10 100 Source: Primary data

111

In the above table, the relationshipbetween gender and awareness of peopleabout different types of regulatory bodieslike RBI, SEBI and IRDA is presented.Out of three terms, if any respondentknows either none or any of them, then s/he belongs to the first group (lowawareness); if s/he knows about any twoof them, then the respondent belongs tothe second group (i.e., moderately aware)and else in the third category. From thetable, the low awareness is evident across

all categories, especially in the first twocategories.

For statistical inference, the application ofFischer's exact test reveals a p-value of0.1395 thereby leading to the acceptanceof the null hypothesis. Hence, in statisticalterms, there is no association betweenregulatory awareness and education level.

(vi) Ability to fill up forms and Educationallevel: Relationship

Table No-12: Ability to fill up fill up forms

Awareness

Educational level (in %age) Total (in %age) Up to Primary

education Up to

Secondary education

Higher secondary education and

beyond

Self 2 18 6 26

Required Help 38 32 4 74

Total 40 50 10 100


In the above table, the relationshipbetween 'ability to fill up forms' andeducation level is presented. Out of totalrespondents, 40% belongs to 'up toprimary education' (of which, 38% is notliterate enough to fill the form themselves),50% belongs to the 'up to secondaryeducation' group (of which 32% requiredhelp) and in the last category, 6% couldfill up the forms themselves. Hence, there

exists an influence of education level onfilling up capability.

To test it statistically, the Fischer's exact testis applied that gave a p-value of 0.0053thereby pointing towards a significantassociation between the two variables.

Table no. 13 gives a snapshot of the testresults relating to association between thevariables.



Table No-13: Summary of association test results

Sl. No.

Variables considered Whether H0 is

rejected?

Significance level

Comment

1. Awareness about different financial terms and Gender

Yes 1% Strong association between the variables

2. Awareness about different financial terms and Educational level

No Not applicable

Insignificant association between

the variables 3. Awareness about different

types of account and Gender Yes 10% Significant

association between the variables

4. Awareness about different types of account and Educational level

No Not applicable



types of regulatory body and Educational level

No Not applicable



form fill up in bank, P.O. and Educational level

Yes 1% Strong association between the variables

Source: Authors' calculations

(vii) Awareness about future savings plan for emergency needs, education and anymajor purchase and Income Level: Relationship

Table No-14: Awareness about future savings plan for emergency needs,education and any major purchase

Plan

Level of income Total (%)

Below 5000

5001 -10,000

10001 -15000

15001 -20000

Above 20000

Yes No Yes No Yes No Yes No Yes No Yes No

Emergencies 12 6 24 6 24 2 22 0 4 0 96 4

Education 4 14 16 14 12 14 10 12 2 2 44 56

Major purchase 2 16 4 26 4 22 8 14 2 2 20 80

Total (%) 18 30 26 22 4 100


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From the above table, one point is quitevisible. The most vulnerable class has thepoorest planning with respect to meetingthe future requirements, be it foremergency, education or for the purposeof any major purchase. This percentage is

quite less in the higher income category.Thus, when the level of income increases,tendency for savings habits also increases.

(viii) Awareness about time value of moneyand Education level: Relationship

Table No -15: Awareness about time value of money

Awareness

Educational level Total

(%) Up to Primary

education Secondary education

Higher secondary education and beyond

Yes 36 50 10 96

No 4 0 0 4

Total (%) 40 50 10 100


From the above table, it is observed thatmaximum respondents are aware about theconcept of time value of money, only 4%respondents in the first category did notknow the concept of time value of money.

(ix) Awareness about calculation ofsimple and compound interest andEducational level: Relationship

Table No-16: Awareness about interest calculationAwareness Educational level Total

(%) Up to Primary education

Secondary education

Higher secondary education and beyond

Yes 0 12 8 20

No 40 38 2 80

Total (%) 40 50 10 100


In the above table, it is observed that whenthe literacy level increases, the level ofcalculation of interest also increased.

Summary of the findings

The points below give an appropriatesummary of findings of the present study.

i) Male respondents are moreacquainted with different financialterms than the female respondents.

ii) There is strong association betweenawareness about different financialterms and gender.



iii) There is no significant relationshipbetween awareness about differentfinancial terms and educational level.

iv) There is significant relationshipbetween awareness about differentaccount types and gender.

v) There is insignificant relationshipbetween awareness about differenttypes of account and education level.

vi) There is insignificant relationshipbetween awareness about differenttypes of regulatory body andeducation level.

vii) There is strong association betweenawareness about different types formfill up and education level.

viii)When the level of income increases,financial planning for the futureimproves.

ix) When the literacy level increases, theunderstanding about interestcalculation also increases.

Conclusion

The study reveals that across the genderwomen are generally less financiallyknowledgeable than men. Majority of therural people have low awareness aboutdifferent banking and financial terms. Thisfinding is in conformity with earlier researchfindings even in the other parts of the worldlike United States (Lusardi, A. et al.,2008, 2011). Thus, it is felt that thoughinitiatives are being rightly taken by thepolicy makers and the banks, problems atthe root level have to be seriously analyzed

in order to reap the benefits of the financialliteracy drive being given in the country.From the above analysis, it can beconcluded that overall financial literacylevel among all the respondents is not atall encouraging. Demographic factors, suchas education level has been found to havea moderate impact on general financialawareness. Financial literacy level getsaffected by education, income, age, etc..The results suggest that level of financialliteracy varies significantly amongrespondents based on variousdemographic and socio-economic factors.This shows that the respondents are stillnot much aware about their finance relatedissues though the selected district has firstrank in the general literacy level in WestBengal (Source: Govt. of India, Census,2011). Overall, it can be concluded thatfinancial literacy level is low in our studyarea and necessary measures should betaken by government to increaseawareness about financial related matters.

References

Aggarwal, M. and Gupta, M. (2014),“Awareness of Financial Literacy amongCollege Students”, Journal ofManagement Sciences and Technology,Volume-2, Issue-1, pp.1-13.

Attarwala, A.A. (2014), “Role of SEBI inFinancial Literacy”, AbhinavInternational Monthly Refereed Journalof Research in Management &Technology, Volume-3, Issue-3, pp.52-56.

Bhatia (2012), “Financial Literacy-Concept and its Importance in India”,

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e n . w i k i p e d i a . o r g / w i k i /Financial_Planning_Standards_Board_India,pp.1-12.

Bhattacharjee, B.J. (2014), “Financialliteracy and its’ influencing factors: anempirical study of Indian Investors”,International Journal of Research inCommerce, IT & Management, Volume-4, Issue-1, pp.43-47.

Gupta, K. and Kaur, J.(2014), “A Studyof Financial Literacy among MicroEntrepreneurs in District Kangra”,International Journal of Research inBusiness Management, Volume-2, Issue-2, pp. 63-70.

Hung, A.A., Parker, A.M. and Yoong, J.K.(2009), “Defining and Measuring FinancialLiteracy”, RAND Corporation, WorkingPaper-708, pp. 1-28.

Lusardi, A. and Mitchell, O.S. (2008).“Planning and financial literacy: How dowomen fare?” American EconomicReview, American Economic Association,Vol. 98(2), May, pp. 413-17.

Lusardi, A. and Mitchell, O.S. (2011).“Financial literacy around the world: Anoverview,” Journal of PensionEconomics and Finance, CambridgeUniversity Press, Vol. 10(04), pp. 497-508.

Mathivathani, V. and Velumani, M. (2014),“A Study on Financial Literacy amongRural Women in Tamilnadu”, IndianJournal of Applied Research, Volume-4, Issue-12, pp.556-557.

Ravikumar, R., Sivakumar, S.D.,Jawaharlala, M., Palanichamy, N. V. andSureshkumar, D. (2013), “Assessment ofFarm Financial Literacy among JasmineGrowers in Tamilnadu, India”,International Institute for Science,Technology and Education Volume-3,Issue-3, pp.67-76.

Sarva, M. (2014), “Financial Literacy:Important For Growth and Inclusion”,International Journal Of InnovativeResearch & Development, Volume-3,Issue - 4, pp. 214-221.

Sekar. M and Gowri. M (2015), “A Studyon Financial Literacy and its Determinantsamong Gen Y Employees in CoimbatoreCity”, http://www.greatlakes.edu.in/herald/pdfs/march-2015/Article_3.pdf,accessed on September 20, 2015

Singh, U. (2014), “Financial Literacy andFinancial Stability are two aspects ofEfficient Economy”, Journal of Finance,Accounting and Management, Volume-5, Issue-2, pp.59-76.

Thiklam, C. (2012), “Financial Literacyamong Rural Masses in India”, The 2012International Conference on Businessand Management, Phuket –Thailand,pp.204-217.

Trivedi, P. and Trivedi, S. (2014),“Financial Literacy an EssentialPrerequisite for Financial Inclusion”,Global Journal for Research Analysis,Volume-3, Issue-3, pp.28-30.

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DEFINING SUCCESS IN CRM IMPLEMENTATIONPROJECTS: AN EMPIRICAL STUDY FROM THE IT

CONSULTANTS PERSPECTIVEHory Sankar Mukerjee

Principal-Education Training and Assessment, Infosys Limited,[email protected]

U Devi PrasadAssociate Professor, Hyderabad Business School,

GITAM University [email protected]

S.S Prasada RaoFaculty of Management, Director, Academic Affairs, GITAM University Gandhinagar

Campus, [email protected]


ABSTRACT

One of the key stakeholders in CRM implementations is the IT consultant,whose job is not only restricted to selecting the right package, but alsoensure that the organisation implementing CRM is able to benefit fromthe same. For the IT consultant, CRM implementation is a technologyproject which enables resources for implementation. However ‘success’per se has different meanings for various stakeholders and this articletries to analyse the definition of project success from a CRM projectmanagement perspective of an IT consultant. The article tries to look atthe various factors that define success for CRM projects.

Introduction:

The relationship between a customer andthe enterprise is strengthening and has beenthe center of all discussion in business andmanagement literature. The need to havethe customers at the center of the businessis well justified and universally acceptedas they form the reason of ‘being inbusiness’ for every corporation. Along withthis, today’s hypercompetitive

marketplace, with plethora of product andservice choices available makes theofferings often indistinguishable to acustomer.1 This have in turn pulled downthe margins, put pressure on the top andbottom lines with companies leaving nostone unturned to get their margins,profitability and cost mix right.

A key aspect of this relationship buildingis therefore implementation of the right

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technology in the right spirit. Two questionsthat grip businesses looking in for an ITsolution are: First: Which software solutionwill fit into my requirements in case wechoose to buy a CRM solution from avendor? Two: In case we procure thesolution from a CRM vendor, can this beoutsourced for implementation,maintenance and upkeep of the solutionto a third party (IT consultant)?

Companies often are not willing to investin information technology personnel forissues pertaining to infrastructure, upgradeand maintenance of the required facility orsoftware and is also often an overhead tothe organisation in the long run. The ITfunction may not be a core part of theirbusiness and therefore it does not makesense for them to invest on personnel fora longer time.

Implementation of a CRM solution isextremely complex, lengthy, timeconsuming, and costly. It requires specificexpertise which most implementingorganisations cannot provide. Therefore anideal way to bridge this gap is to hire ateam of information technology consultantwho would help with the process and drivethis. The consultants provide their advicein selecting the right CRM software.Unfortunately the failure rates of suchimplementations are very high. 2

Research Gap and Research Problem:

An important aspect of a successfulCRM implementation comes from the

successful deployment of the IT solution.However the definition of ‘projectsuccess’ in management research aredifferent. There is a lack of research onthe definition of ‘successes’ in CRMpackage implementations from the ITproject managers view. It is thereforecritical to look at what ‘success’ wouldmean to a project manager who hasfinished implementing a packaged CRMsolution.

Objectives of the Study:

There are over 900 registered CRMvendors. An organization trying toimplement a CRM solution has a plethoraof choices with him. Not being able toidentify the right implementation objectiveor having a weak vision of CRM may meana wrong choice. CRM products essentiallyare of two types: On-demand (SaaS) oran on premise solution. While an on-demand solution means a light weight, lowmaintenance and low cost product, it maysacrifice the data security. An on premisesolution however is costly, but more secureand scalable. Also integration with othersystems like the ERP is also easier with anon premise solution. So weighing thechoices before implementation can be atough choice.

The specific objectives that we intend tomeet is to understand the factors thatconstitute ‘project successes for a CRMIT solution implementation.

Blount, J. (2013). People Love You. People Love You, 1-8.2 http://www.what-is-crm.com/crm-failures.php; Accessed on 5 th January 2016


Literature Review:

Researchers also noted that for a projectmanager, a project is considered closedwhen they are handed over to thecustomer, which means a CRMimplementation is done. However one ofthe important thing that is missed out inthis understanding is the ‘effect’ it will haveon end users of the system.3

Projects essentially have a start and enddate which is a must, however theimportance of the dates are very important.So for the project manager the cost andthe time matters the most.

The impact a project could have onbusinesses have also been studied. Forexample, customer satisfaction has beenstudied as an important dimension inproject success. The time, budget and thescope for the project (referred as the ‘irontriangle’) is also critical. Ignoring the biggerpicture of the project, lack ofunderstanding the environment underwhich the client operates cannot be

avoided. Just getting the job done or theimplementation done is no measure ofsuccess.4

Another researcher, Cooke-Davies,mentions that there is a difference in theterm ‘project success’ and ‘projectmanagement success’. The former is aboutthe outcome of the project and if that meetsthe vision of the organization investing init. The later however according to theresearcher meant a traditional way oflooking at success, especially when theproject is complete and based primarilyon cost, functionality and time objectives.56 The overall project success thereforemeans a lot in terms of implementation.

Researchers have cited many exampleswhere the projects are near perfect, doneon time, well planned, executed, achievethe goals originally set, but fail on accountof providing benefits to the customer. Thecustomer often does not realize any valuefrom the project implementation. 7 Thereverse of this has also been noted by

3 Munns, A. K., & Bjeirmi, B. F. (1996). The role of project management in achieving projectsuccess. International journal of project management, 14(2), 81-87.4 Shrnhur, A. J., Levy, O., & Dvir, D. (1997). Mapping the dimensions of project success. Projectmanagement journal, 28(2), 5-13.5 Cooke-Davies, T. (2002). The “real” success factors on projects. International journal of projectmanagement, 20(3), 185-190.6 Atkinson, R. (1999). Project management: cost, time and quality, two best guesses and aphenomenon, its time to accept other success criteria. International journal of project management,17(6), 337-342.7 Dvir, D., Raz, T., & Shenhar, A. J. (2003). An empirical analysis of the relationship betweenproject planning and project success. International Journal of Project Management, 21(2), 89-95.8 Thomas, M., Jacques, P. H., Adams, J. R., & Kihneman-Wooten, J. (2008). Developing an effectiveproject: Planning and team building combined. Project Management Journal, 39(4), 105-113.

119

researchers. Projects in which the originalobjectives have not been met, but the clientwas happy with the final outcome. 8

For this study, we will be looking at sevenimportant parameters for defining projectsuccess, as identified across variousliterature. They are: 9101112

1. Meeting the costs: Was the projectprofitable?

2. Time: Was the project successful inmeeting the timelines?

3. Budgets: Was the project successfulin meeting the project budgets?

4. The scope of the project: Was theproject successful in meeting the scopeand changes?

5. Bigger picture (organizational goalsas to why to implement CRM): Wasthe final objective met or how was theoverall success of the project?

6. The client assessment impact: Wasthe client satisfied with the final outcomeof the project?

7. End user satisfaction: Were the endusers satisfied with the final outcome?

Researchers also agree that projectcompletions on time and budget are oftenincorrect measures for success, but areimportant and cannot be ignored. Qualityfor example is linked with the technicalperformance of the system, thespecifications and achieving the endobjectives and can be subject to differentset of interpretations by differentstakeholders.

There is very little empirical evidence forIT CRM implementation projects on thefactors that contribute to the projectsuccess. Is it merely the ‘iron triangle’ ofcosts, time and scope, or is it somethingmore than that? This needs to beinvestigated.1

Hypothesis for the study:

For the purpose of this study, the researchhypothesis are:

HaD1: There is significant differenceproject managers have on thedefinition of project success.

Research Methodology:

The research design employed for the

9 Dvir, D., Raz, T., & Shenhar, A. J. (2003). An empirical analysis of the relationship betweenproject planning and project success. International Journal of Project Management, 21(2), 89-95.10 Serrador, P., & Turner, R. (2015). The relationship between project success and project efficiency.Project Management Journal, 46(1), 30-39.11 Baccarini, D. (1999). The logical framework method for defining project success. Projectmanagement journal, 30(4), 25-32.12 Shrnhur, A. J., Levy, O., & Dvir, D. (1997). Mapping the dimensions of project success. Projectmanagement journal, 28(2), 5-13.13 Schwalbe, K. (2015). Information technology project management. Cengage Learning, pp 6


present study is empirical in nature. Aquestionnaire was be executed for thispurpose. The respondents be projectmanagers, consultants and seniorconsultants who have worked on thetechnology implementation of CRM. Theresearch cut across both on-demand andon-premise solutions.

• The pilot questionnaire wasadministered to a panel comprising ofseven experts from the Informationtechnology consultants to check itsadaptability to Indian conditions.

• A pilot study was conducted initially toexamine the reliability and validity of thequestionnaire.

• A total of 105 samples was includedfrom the big five IT consultingcompanies based on simple randomsampling.

Methodology

Part 1: The opinion of the projectmanagers were collected on a 5 point LikertScale. (1= Disagree and 5= Agree). Thisdata was collected on 10 parameters ofproject success.

Part 2: A Cronbach’s Alpha (to test thereliability) followed by a factor analysiswas conducted to find out the criticalfactors that were creating the maximumvariance.

Part 3: A Pearson’s Chi Square test wasdone, within on demand and on premiseprojects for successful and unsuccessfulimplementations to find if there is differencein the project manager’s opinion of projectsuccess factors.

Analysis and Results

The study would provide essential insightsto project managers and researchers onwhat constitutes success in CRMtechnology implementations. This wouldalso provide a building block for otherresearchers to look at the phenomenon oftechnology implementations in CRM,which is a missing link.

Part 1: The opinion of the projectmanagers were collected on a 5 pointLikert Scale. (1= Disagree and 5=Agree). This data was collected on 10parameters of project success. Theproject managers were also asked torank them from 1 to 10.

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1 2 3 4 5 Total Meeting the internal project margins

3 15 17 32 38 105

On time completion of a project 0 4 18 18 65 105 On budget completion 2 14 13 37 39 105 Meeting the scope of the project 0 1 5 28 71 105 Meeting the bigger picture for implementing CRM

1 5 25 26 48 105

Ratings of the project sponsor 5 2 27 34 37 105 Satisfaction of the project team members

12 4 28 29 32 105

Customer satisfaction 1 6 4 15 79 105 Satisfaction of end users 1 4 5 16 79 105 Future revenues from customer 0 2 5 35 63 105

Opinion of project managers on a Likert Scale of 1-5 on project success parameters

Ranks from 1 to 10 on components of project success Ranks 1 to 10: (1=Highest and 10=Lowest)

1 2 3 4 5 6 7 8 9 10

Meeting the internal project margins 12 5 5 13 5 5 19 12 14 15 On time completion of a project 11 18 14 12 12 9 8 5 13 3 On budget completion 2 14 16 9 6 16 4 12 11 15

Meeting the scope of the project 19 19 6 21 13 9 8 4 3 3 Meeting the bigger picture for implementing CRM

8 5 16 13 5 12 7 15 15 9

Ratings of the project sponsor 5 2 6 8 29 19 6 9 17 4 Satisfaction of the project team members

5 0 2 9 6 8 9 15 9 42

Customer satisfaction 9 12 22 11 7 10 16 5 11 2 Satisfaction of end users 23 20 9 8 1 12 10 12 5 5 Future revenues from customer 11 10 9 1 21 5 18 16 7 7

Part 2: A Cronbach’s Alpha (to test thereliability) followed by factor analysiswas conducted to find out the criticalfactors that were creating themaximum variance.

Reliability Statistics Cronbach's Alpha N of Items

.743 10

The results from the Cronbach’s Alphawas found to be more than the requiredvalue of 0.7, which implies that the internalconsistency reliability for Likert scalesused for the study was high.Factor AnalysisKMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .544

Bartlett's Test of Sphericity

Approx. Chi-Square 282.421

df 45 Sig. .000


Communalities Initial Extraction Meeting the internal project margins 1.000 .698 On time completion of a project 1.000 .772 On budget completion 1.000 .654 Meeting the scope of the project 1.000 .730 Meeting the bigger picture for implementing CRM 1.000 .695 Ratings of the project sponsor 1.000 .709 Satisfaction of the project team members 1.000 .760 Customer satisfaction 1.000 .774 Satisfaction of end users 1.000 .728 Future revenues from customer 1.000 .596 Extraction Method: Principal Component Analysis.

Total Variance Explained Component

Initial Eigenvalues Extraction Sums of Squared Loadings

Rotation Sums of Squared Loadings

Total % of Variance

Cumulative %

Total % of Variance

Cumulative %

Total % of Variance

Cumulative %

1 2.605 26.046 26.046 2.605 26.046 26.046 2.293 22.930 22.930 2 1.948 19.480 45.526 1.948 19.480 45.526 1.780 17.797 40.727 3 1.354 13.540 59.065 1.354 13.540 59.065 1.672 16.718 57.445 4 1.210 12.105 71.170 1.210 12.105 71.170 1.372 13.725 71.170 5 .815 8.151 79.321 6 .645 6.448 85.769 7 .440 4.397 90.166 8 .425 4.251 94.416 9 .354 3.541 97.958 10 .204 2.042 100.000 Extraction Method: Principal Component Analysis.

Initially, the factorability of the 10 projectsuccess items was examined under thestudy. Several well recognized criteria forthe factorability of a correlation were used.Firstly, it was observed that 7 of the 10items correlated at least .4 with at leastone other item, suggesting reasonablefactorability (see correlation table).Secondly, the Kaiser-Meyer-Olkin

measure of sampling adequacy was .54,above the commonly recommended valueof .5, and Bartlett’s test of sphericity wassignificant. The communalities were allabove .5 (see Table on commonalities),further confirming that each item sharedsome common variance with other items.Given these overall indicators, factoranalysis was deemed to be suitable with

123

all 10 items. Principal components analysiswas used because the primary purpose wasto identify and compute composite scoresfor the factors underlying the short versionof the ACS. Initial Eigen values indicatedthat the first four factors explained 70%of the total variance.

For the final stage, a principal componentsfactor analysis of the remaining 4 items,using Varimax rotations, was conducted.The table containing the rotated factorloadings (factor pattern matrix), whichrepresent both how the variables areweighted for each factor but also the

correlation between the variables and thefactor. In each of the four factorsextracted, we identified the two topfactors. The component 1 are thetraditional measures of success,component 2 is the team for CRMimplementation, component 3 is thesatisfaction matrix and component 4 is thefuture outlook of the project.

Part 3: A Pearson’s Chi Square test wasdone for successful and unsuccessfulimplementations to find if there is differencein the project manager’s opinion of projectsuccess factors.

Cross tabulation analysis by Chi-Square test pro1 Total

Successful Unsuccessful

pro1 On demand

Count 136 2 138 % of Total 52.9% 0.8% 53.7%

On premise Count 111 8 119 % of Total 43.2% 3.1% 46.3%

Total Count 247 10 257 % of Total 96.1% 3.9% 100.0%

Pearson Chi-Square = 4.752 (.029*SIGNIFICANT).Therefore the alternate hypothesis isaccepted.Limitations:The study was limited only to the top Indianinformation technology consultants andtheir choice. The sample size though 105,may still remain a small size of consultantscompared to the large number ofinformation technology consultantpopulation available. The projects withCMMI level 5 process maturity werechosen. It may not be in lines with the

results for projects with lesser maturity.Consultants were chosen primarily fromIndia, however consultants overseas maysee the factors from a differentperspective.Managerial implications andconclusions:Here are the managerial implications.1. There is a significant difference that

project managers have on projectsuccess. This also essentially means fororganisations implementing CRM aswell as the steering committee theguidelines given to project managers


and their KPI’s should either bestandardized or should be tailored foreach project. Standardized KPI’s forprojects does not work.

2. Project managers significantly vary onthe definition of the project success.

3. The components of success as foundout in this research adds a fourthdimension of success and that is futureoutlook. For an IT consultant the ‘icing’on the cake would be a situation whenthe client is happy with the work doneand assigns the consultant the nextphase of the CRM implementation.Even if the client agrees to serve as areference for any other prospectivecustomer of the consultant and is willingto vouch for him, must definitely beconsidered as a parameter for successin CRM projects.

Scope for future studies:

Further studies on the topic can beconducted for each of the dimensions ofsuccess. This will give a better view to theprojects. Also managerial motivation andproject success, especially in Indianscenarios can be studied. The impactproject team members can have on theoverall project success can also bestudied. Another important aspect ofproject success that needs to be studiedis the difference that may exist in differenttypes of IT projects.

References:

Atkinson, R. (1999). Project management:cost, time and quality, two best guesses

and a phenomenon, its time to accept othersuccess criteria. International journal ofproject management, 17(6), 337-342.

Baccarini, D. (1999). The logicalframework method for deûning projectsuccess. Project management journal,30(4), 25-32.

Blount, J. (2013). People Love You.People Love You, 1-8.

Cooke-Davies, T. (2002). The “real”success factors on projects. Internationaljournal of project management, 20(3),185-190.

DIDRAGA, O. (2013). The Role and theEffects of Risk Management in IT ProjectsSuccess. Informatica Economica, 17(1),86-98.

Dvir, D., Raz, T., & Shenhar, A. J. (2003).An empirical analysis of the relationshipbetween project planning and projectsuccess. International Journal of ProjectManagement, 21(2), 89-95.

http://www.what-is-crm.com/crm-failures.php ; Accessed on 5th January2016

Munns, A. K., & Bjeirmi, B. F. (1996).The role of project management inachieving project success. Internationaljournal of project management, 14(2), 81-87.

Schwalbe, K. (2015). Informationtechnology project management. CengageLearning, pp 6

Serrador, P., & Turner, R. (2015). Therelationship between project success and

125

project efficiency. Project ManagementJournal, 46(1), 30-39.

Shrnhur, A. J., Levy, O., & Dvir, D.(1997). Mapping the dimensions ofproject success. Project managementjournal, 28(2), 5-13.

Thomas, M., Jacques, P. H., Adams, J.R., & Kihneman-Wooten, J. (2008).Developing an effective project: Planningand team building combined. ProjectManagement Journal, 39(4), 105-113.

Turner, R., & Zolin, R. (2012). Forecastingsuccess on large projects: developingreliable scales to predict multipleperspectives by multiple stakeholders overmultiple time frames. Project ManagementJournal, 43(5), 87-99.

Zwikael, O., & Globerson, S. (2006).From Critical Success Factors toCritical Success Processes. InternationalJournal Of Production Research,44(17), 3433-3449

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PARTNERS IN CRIME:THE RISK IN ENTREPRENEURSHIP

Brajaballav KarSchool of Management, KIIT University

[email protected]

Prasanta K PatraResearch Scholar, Dept. of I&TT, FM University Balasore

[email protected]


ABSTRACT

This case study presents a unique case of spectacular growth and dramaticfailure of entrepreneurial endeavour. Often the entrepreneurship is agroup dynamics rather than a pure individual play. Each individual inthe team is not sufficient to fructify a new venture formation alone. Atthe same time having an organic team from the beginning is difficult.The team formation process would have its own challenges; it woulddepend more on level of trust between the partners. However, trust can'tbe taken for granted in a formal organization setting, so there is needfor adequate reporting and control mechanism. The entrepreneurialorganization can't have byzantine reporting, control and audit procedure,and thus has to depend on the level of trust. Considering this aspect theentrepreneurial organization has to transform itself into a professionallymanaged organization, but the exact time and context can't bepredetermined. If the transformation is not appropriate there is inherentrisk to survival. During the start up phase promoters would have roleoverlap and unclear hierarchy, their actions and motives regarding wealthand power would determine the fate of new venture.

This ethnographic research was the result of interview process of one ofthe promoters of the company. It is divided into two parts, the first partdescribes the events that unfolded during the entrepreneurship processand the second part describes teaching note with applicable theories.

Key Words: Team Entrepreneurship, Intention, conflicts, Risks, HorizontalAccountability,

Case Study:

127

Family and Early Career:

Ashis graduated in engineering in the year1986, and started working with the StateElectronics Development Corporation.Later on he also completed MBA in theyear 1993. His engineering and MBA werefrom premier institutes of the country. Hequit the first job and joined a privatecompany manufacturing printed circuitboard. In 1996, he joined his thirdcompany FireProof, which was givingconsulting on fire safety designs.

He got married in 1994, and has twodaughters. His father was a seasonedbureaucrat, who joined State Civilservices, got promoted to IndianAdministrative Services and got retired in1995. His younger brother was studying.Ashish is the first one to venture intoentrepreneurship among his family andrelatives.

Getting Exposed

Ashis was working in a Norwegiancompany in 1998. The company used togive fire system design, consulting andcreation of master plan for fire safety. Thecompany had client all across the globe, buttheir major client base was USA andEurope. The services ranged fromdesigning, planning and verification aroundfire safety measures taken by companies.The activities used to get executed fromBhubaneswar, India. The nature of serviceswas almost similar to off-shoring and Ashishwas the director of operations. Alex a nonresident Indian, was one of the partners ofthis Norwegian company, settled in USA.

Since most of the clients were abroad,Ashish had to frequently travel abroad a lotto meet and find out actual requirement.FireProof was started in 1996 and hadcompleted 2 years of operation.

During one such visit to USA, duringSeptember 1998, Asish met Mathew, thebrother of one of the promoters ofFireProof (Alex). Mathew was workingin jewellery industry in USA and had morethan 20 years of experience in it. He wasworking as the manager for productionand outsourcing in a jewellery company.Over few meetings and couple of drinks,Mathew shared about the fashion industryand the general economic boom.Economic growth had made labor veryexpensive and as a result, the laborintensive jobs are getting outsourced todifferent countries. The jobs are movingto countries like Haiti, Vietnam,Cambodia, Bangladesh and Pakistan.Mathew also had tried to get some out-sourcing to be done in India; in fact he hadtried for two three years and at almosteleven to twelve locations across India. Buthis experience had been bad. The qualityis not up to the mark, and conformance todelivery schedule is very poor. Hecomplained that Indians don’t seemunderstand the American requirement ofconformance to specification. The Indianthinking is that there is no problem if thelength of necklace is little long or little short.The outsourced job did not involve anymanufacturing, the materials andspecifications are given by the parentcompany in US and it needs only to be

Partners in Crime: The Risk in Entrepreneurship


assembled. Mathew also narrated atlength how previous attempts with veryskilled craftsman from Meerut, Lucknowand elsewhere have failed.

It sounded little amusing to Ashis and hedid not have the faintest idea about fashionjewelry industry. It somehow soundedchallenging to him and he wanted to help.

Taking the Chance:

Ashis wanted to take up the challenge andhe thought that if there had been so manyfailures, let there be another failure. Heasked Mathew to give me some materialsfor assembling at Odisha. Mathew was notsure if workers at Odisha can deliver thequality where good craftsman from Meerutand Lucknow have failed.

Ashish returned to India and spoke withhis family members and relatives. Hisbrother-in-law became very enthusiasticand also wanted to try at a differentlocation. The family wanted to do theirbest; it was an opportunity without risk. Itwas not their regular income.

Back in his hometown, Ashis, went to thepeople in nearest slum. Slum dwellers wereusually rural migrants in search of lively-hood, the idea of getting work was boonfor them. Women in slum used to manuallymake incense sticks for the temple ofInternational Society For KrishnaConsciousness (ISKON), for a paltry sumof Rs 12 a day and they were told to do itfor God. They all worked hard to deliverthe first sample within 7 days! When thecompany received the material, its

president, Ronald, called up to confirm thatthe quality is exceptional good. He neverdid think that the turnaround time wouldbe so fast and asked Ashis “When are youstarting a company”? The rationale wasvery apparent. India’s labour force is largeand cheap; the capacity can be scaled upquickly. US Company would send thematerial to a legal entity, rather than anindividual. There is assured jobbing orsubcontracting work reducing the revenuerisk of the company drastically. It seemedwin-win for all.

Ashis discussed with Mathew and Alex,they were all excited and wanted to bepartners. Mathew could see the jobbingpossibility beyond his own company.

Registering the company

Any Indian company intending to export-import has to get importer-exporter codefrom Directorate General of ForeignTrade. Also since this company is to beinvolved in Jobbing (Material to beassembled manually and exported back)it has to be registered with Central Exciseand customs. A custom bonded warehousewas to be created, where in the specificwork to be carried out and inspected. Thiswould enable free import of raw materials.In addition to these, there has to beregistration for commercial tax andmunicipality in which it is located.

They registered the company FashionJewellery Private Limited (FJPL) within 2months, compared to usual 3 moths timeperiod required. Ashis became themanaging director of the company. The

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company received its first air consignmentfrom New York to its premises duringChristmas of 1998.

Taking the Challenges head on

Indian economy was not opened up thattime. It was not free from license raj. Thebiggest challenge was having a custombonded warehouse, a separate area,wherein the imported materials arereceived separately. Each incoming andoutgoing material has to be accounted forand documented for audit by differentgovernment agencies. That time fashionjewellery items were not under opengeneral license, it was under restricted listfor import. Customs department will checkand seal the material from the airport, notedin their register, transported to thewarehouse under their security. Thematerials have to be issued to variousassembly areas under their supervision.Once it is assembled customs departmentwill inspect it and have to be satisfied thatthere are no pilferages and all the issuedmaterials are used for the purpose. Therewere other teething problems as well.However, by April 199, there were morethan 200 persons working in different partsof Odisha.

To minimise the risk of fluctuation injobbing work, the employees were not onpay roll. Secondly, the pay was linked toproductivity and quality. Quality inspectorswere on payroll only. A well acceptedformula was created for calculating theremuneration. Women employees couldearn 5000 to 6000 rupees per month,

much above the wage available elsewhere.The remuneration was attractive enoughto get more and more people with rightskill and attitude.

Ashis visited his clients in US regularly tounderstand their impression about qualityand timely delivery. US based partnerswere following up with the customer forprompt payment realization. To reduce thedependency on single company, Ashisvisited US frequently to be a vendor formore companies. He visited more than 30companies in one year, in the cluster ofjewelry industries in Manhattan. Thecompany started doing business for 5/6principals. He also visited Europe, thevolume of work was less but payment wasattractive (almost 3 to 4 times). Thecompany started making good profit. Thefirst year revenue was more than 10 millionINR. The company got jobbing work fromcountries like UK, Australia, Spain, andFrance. Good days never seemed ending.

Riding the wave

During 2001 celebrated artist Madonnastarted performing her shows with Indiantraditional costumes and jewelry. It createda huge demand for Indian fashionproducts. FJPL in turn started developingits own products and sent samples forapproval. These were instant hits. Theproducts were not having importcomponents thus the margin was muchhigher. In one of the Miss Universecompetitions, the first runner up waswearing fashion jewellery made by FJPLwhich was the official supplier. The firm



started developing its own vendors forsourcing of components, set up office inNew Delhi. The firm was all set to growexponentially.

Ashis used to travel for almost 20 days ina month to different locations of India todevelop vendors. The company operationwas getting reported to all the partners, itwas all open and transparent. The supplychain was in firm footing. Mathewseparately tried to develop some items inCuttack and get it exported. Howeverthere were issues regarding quality anddelivery, and it used to get rejected. Finallythese orders were getting routed to FJPL.

Process innovation to gain trust

Due to failed and low quality delivery, therewas a perception that most of thebusinessmen in India are liars. They alwayslie about delivery and quality. Whilesending samples for approval the metalparts would be nickel and lead free, butafter few transactions the goods used tocontain nickel. To make items nickel andlead free is very expensive; the costbecomes almost 2 times. Many times,Indian suppliers would not have not startedthe work but would confirm the client thatthe goods are in packing stage, ultimatelyfailing the delivery due date. FJPL wantedto create trust among its customers. During2000-01, when the internet and ICT hadnot spread much, it installed IP enabledcameras in assembly locations, to actuallyshow the progress of the work. Thecompany website had specific clientregistration, through which they can check

the progress of their orders as well asstages of shipment. The clients also couldactually see that no child labour is usedfor production. The equipment and processwere very costly nevertheless it was doneto build trust and confidence.

By 2003 FJPL had about 30 million INRturn over. The company commissioned ametal finishing line for electroplating ofmetal parts. The finishing line hadelectroplating, polishing, soldering units. Italso had hydraulic epoxy coating andrhinestone gluing units. Earlier these workswere getting done in Noida, Delhi;required skills were created to have themanufacturing in-house. Advanced effluenttreatment plant was commissioned tominimise pollution. complete and a lot ofequipment were purchased for metalfinishing. By 2003 the company TheCompany acquired an industrial land inexport processing zone. The future couldnot be rosier than this, for the promoters.

Beginning of the end

The expansion and meteoric growthbrought in its own challenges. Now it wasmore difficult for the three promoters toagree on different issues. Now more datawas required, more questions were raised,solutions seemed to be debated endless.It was becoming tougher to decide andexecute. The relationship seemed strainedto the degree of suspicion. Reinvesting theprofits or taking dividend was majordiscussion and disagreement.

During 2005-06, FJPL found a disturbingtrend debtor realization. The wire transfer

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to the company’s bank account startedgetting delayed. Initially it was about 20%of the total but gradually increased till itwas almost nil for the last quarter. As anormal practice, the invoice copy was sentto US based partners, each time an invoicewas raised. The practice was to make sureabout the follow up and transparency.Ashish realised that for most of the ordersdelivered, the company had not receivedpayment in time. The company keptsending reminders to customers but rarelywas replied. Few were replied to as theaccounts department had been asked tofollow up. But payments were not realizedeven after 90 days. The industry practicewas a 30 day credit period. TypicallyAmerican customers pay within the creditperiod and FJPL had 80 percent of thebusiness from American firms. This wasquite perplexing for Asish. Cash flowsituation was getting worse; vendors andlabours were to be paid. The trustgenerated because of regular and in timepayment was getting eroded. Finally Ashiswent to US and met few customers. Theysaid that they had paid invoices in time.This was a shock to Ashis, he insisted onseeing the details. He found that thepayment has been done to an US bankaccount of the company. Ashis did nothave any idea about an US bank accountof the company. Secondly the accountmentioned in the invoice was found to beforged from the original invoice. Ashisdecided to confront both his partners. TheUS partners actually registered a LLC firmin the same name and had the US bank

account for the firm. Mathew was knownto most of the customers and they paid onthe changed invoice. Alex and Mathew toldthat because of repatriation issues theyopened a US bank account for thecompany. They needed money to buy theirhouse and thought of returning the moneylater. Since FJPL was registered underRBI, dollar repatriation was not an issue.The money siphoned off was not profit butthe revenue of the company.

Since FJPL was exporting the items andhad the bonded warehouse, it was legallysupposed to get the foreign exchange.Ashis was under legal scrutiny, now thatthe company has not received thepayments it can’t further export and ifexports are not done, further revenue isblocked. Ashis went to Mumbai to speakto Reserve Bank of India, and wasinformed that FJPL can still send materialsas sample piece where there is noobligation to account for exports, but thevalue has to be below INR 50000. Butexports earlier was to be accounted for,being the managing director of thecompany he is responsible. It was a catch22 situation for Ashis.

The last attempt

Ashis tried to trade in stone craft. Artistscreate sculptors which can sell for 5 millionINR, but it was not exported. Ashis thoughtit to be a good opportunity. He managedto send a container load of stone craft toFrance, which was covered by the localpress. Stone craft being a cultural item,there are a lot of respected artists in this



craft. Ashis did this though FJPL, hethought the situation could be saved. Butthe legal entity had same three partners.Also he realized that export of stone craftwas much more troublesome than jewelrybusiness. The stone crafts have to get theclearance from the archaeological surveyof India. The clearance is necessary tomake sure that heritage sculptor or figuresare not getting smuggled out of the country.At the same time it gave them the discretionto delay causing late delivery. The tests areconducted at the expense of exporter.Getting stone from the stone query forcarving was still more difficult. Mafias hadcontrol over the repository, it wasdangerous and unprofessional. HoweverFJPL continued to work on stone craftexport for about a year.

The business could not run any longer,Ashis decided to liquidate the assets; payoff the debt and formally dissolve thecompany. The company was finallydissolved in 2008.

Reminiscence

Since then Ashis has not move out of hishometown, he considers himself homesickand his family did not want him to moveout. He still has the urge to go back toentrepreneurship. He enjoyed those yearswhere he was completely engrossed in thenitty-gritty of work. He was responsiblefor everything in the business; metdesigners; help people earn; went to manyexhibitions around the world; learnt a lotof things and gathered knowledge aboutindustry. He claims to be more confident

now and feels that he could do better if hestarts anything fresh. He wished ifeverything had been going well, FJPLwould have become INR 100 million inrevenue. FJPL had the capacity to growand there was market potential. Marketingwas not an issue. Ashis’s academics andprofessional training provided theconfidence to execute. He did not get anyhelp during the process, he spoke to familyand friends, but they had little idea. Hesighs and philosophises “Trust and greedare the factors that kills business”

Case analysis/ Teaching notes

The case points to many facets ofentrepreneurship and raises manyquestions. Why did Ashis decide to takeup entrepreneurship? Between Ashis andMathew, who was the entrepreneur? Washe little rash in seizing the opportunity?Was the selection of partners appropriate?To what extent education and priorexperience helped Ashis in stabilizing theproduction quality and delivery time?Which factor is more responsible forgrowth; the market, personal relationshipor the process innovation? Was the supernormal growth responsible for conflict?What could have been done to protect theorganization as a legal entity from thefraud? What else could have been doneto save the growing organization?

The following section discusses in briefabout the various facets identified in thecase study.

I. Dimensions of entrepreneur

Ajzen’s theory of planned behavior (TPB)

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and Shapero’s model of the entrepreneurialevent (SEE) are pioneering works aboutentrepreneurial intentions. Establishedliterature indicates risk tolerance,perceived feasibility and desirabilitysignificantly predicts self employmentintentions (Segal, Borgia and Schoenfeld,2005). However entrepreneur may not bea single individual, since shouldering all thefunctional responsibilities of an organizationis difficult. Cooney (2005) in his editorialcomments highlighted the importance ofteam in new venture. In this case, Mathewactually was the person who was awareof the opportunity and tried to fructify itearlier, without success (Shane, 2003,Individual-opportunity nexus). On thecontrary it can be questioned if Ashis tookrisk, as is the case with entrepreneurs? Therisk perception of the project was very lowfor Ashis and his family, their logic was thatwe don’t depend on the outcome of theeffort. Research indicates that risk takingpropensity may not be a distinguishingcharacteristic of entrepreneurs (Brockhaus,1980). As a person, Ashis was hardworking and meticulous in executing theidea. His experience did help in executingthe production process and ensuring aneffective supply chain. Exiting researchpoints that prior experience andentrepreneurial self efficacy are related(Krueger, 1993; Boyd and Vozikis, 1994).In this case also Ashis has demonstratedself-efficacy. Ambition has been pointedas one of the characteristics ofentrepreneurs. Ashis switched from agovernment job to private job indicates

opportunity seeking and ambitious trait. Healso did MBA after 6-7 years of doing ajob. It indicates the ambitioncharacteristics. Effective networking is alsoan important ability of an entrepreneur.Ashis was well networked. His career wasin the same place all throughout. Hisfather’s link in bureaucracy helped him toget an industrial land and necessarysupport. Entrepreneurial network has beenfound to have multidimensional influence(Pesqueux, 2013; Hoang, & Antoncic,2003; O’Donnell, Gilmore, Cummins, &Carson, 2001). Considering his father’sposition, Ashis was also from a uppermiddle class background

II. The Opportunity

From the case study, there was noentrepreneurial challenge with regard tobuilding market or product innovation (forfashion jewelry). The market was wellestablished and customers were identified,thus giving the initial and crucial advantagefor the new venture. The opportunityneeded very low investment, being onlymanual assembly work at the beginning,the business expanded later. However itis to be noted that Ashis failed insubsequent attempt of exporting stonecrafts, though he felt a perceived demand.It was a new market and product that wasventured into. The success could not bereplicated.

III. The organization structure andpartnership

The partners were from same ethnicity, soa degree of natural bonding or trust was



there. Partners were having same stake.Ashis had to spend a lot of time and effortto establish the plant and supply chain,there was lack of touch with customers inbetween. He depended on and trusted hispartners. Early sign of reduction in cashflow was taken up later because of trust(on partners, customers). The issue relatesto the dual role of owner and managerwhich created conflict and accentuated theconflict of interest. Professional could havebeen hired to look after customer followup rather than promoters doing the role.

Entrepreneurship is commonly thought ofas an individual act. However, groupdynamics plays a vital role in a newventure. Team brings social network,virtual team, heterogenous skills, diversity.Morris, Avila and Alien (1993) indicatedthat entrepreneurship is highest underconditions of balanced individualism-collectivism poles, but declines at theextreme ends. The venture performancealso depends on the friendship within theteam (Francis and Sandberg, 2000). It isindicated that social interaction in the teamand venture performance is related;however, conflict as a measure of socialinteraction is questionable (Lechler, 2001).

IV. Innovation

Innovation is associated with entrepreneursand Schumpeter (1934) identifiedinnovation in the following areas; Newproduct, New method of production, NewMarket, New source of supply of rawmaterial, New Organization of any industry.Each new venture has some degree of

innovation that attracts the customers inthe form of value proposition. Thoughcontract manufacturing may have lessdegree of innovation, in this case,establishing a production process andsupply chain to give quality product wasinnovative. The entrepreneur tried to giveservice visibility to the customers byimplementing technology solutions andgained customer’s trust.

V. Managing growth and conflict

Growth of the organization and individualneeds of the entrepreneur may haveconflicting demands on organization.Principal-Agent or moral hazards are wellknown conflicts and these conflicts arecaused by information asymmetry(Wikiepedia). Research proposes conceptof horizontal accountability (Kenney,2003) among the members ofentrepreneurial team for conflict resolution.

Reference

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Brockhaus, R. H. (1980). Risk takingpropensity of entrepreneurs. Academy ofmanagement Journal, 23(3), 509-520.

Cooney, T. M. (2005). Editorial: what isan entrepreneurial team?

Carland, H., Carland, J. W., & Hoy, F.(2002). Who is an entrepreneur? Is aquestion worth asking. Entrepreneurship:

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Gartner, W. B. 1990. What are we talkingabout when we talk aboutentrepreneurship? Journal of BusinessVenturing, 5, 15-28.

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Kenney, C. D. (2003). Horizontalaccountability: concepts andconûicts. Mainwaring, Scott, & Welma,Christopher. Democratic Accountabilityin Latin America, Oxford: OxfordUniversity Press (Oxford Studies inDemocratization), 165, 55.

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Morris, M. H., Avila, R. A., & Alien, J.(1993). Individualism and the moderncorporation: Implications for innovationand entrepreneurship. Journal ofmanagement, 19(3), 595-612.

O’Donnell, A., Gilmore, A., Cummins, D.,& Carson, D. (2001). The networkconstruct in entrepreneurship research: areview and critique. ManagementDecision, 39(9), 749-760.

Pesqueux, Y. (2013). Network andEntrepreneurship. Encyclopedia ofCreativity, Invention, Innovation andEntrepreneurship, 1354-1358.

Ruef, M. (2010). The entrepreneurialgroup: Social identities, relations, andcollective action. Princeton UniversityPress.

Shane, S. A. (2003). A general theoryof entrepreneurship: The individual-opportunity nexus. Edward ElgarPublishing.

Sequeira, J., Mueller, S.L., and Mcgee,J. E. (2007). The Influence of Social Tiesand Self-Efficacy, in FormingEntrepreneurial Intentions and MotivatingNascent Behavior. Journal of



Developmental Entrepreneurship, 12,275 (2007). DOI: http://dx.doi.org/10.1142/ S108494670700068X. http://www.worldscientific.com/doi/abs/10.1142/ S108494670700068X

Slotte Kock, S., & Coviello, N. (2010).Entrepreneurship research on networkprocesses: A review and waysforward. Entrepreneurship Theory andPractice, 34(1), 31-57.

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