19 Societal Perception Towards Juvenile ...

Vol. 6-7

June 2015

ISSN 2278-5671

International Journal of Management & Behavioural Sciences (IJMBS) Editor - IN - CHIEF Dr. Sunil Kumar Editor & Director, SMBS Canada

EDITORIAL ADVISORY BOARD Dr. Rupali Kumar Associate Professor Bharati Vidyapeeth Deemed University Institute of Management and Research New Delhi

Dr. Shweta Anand Associate Professor, School of Management Gautam Buddha University Greater Noida, India

Prof. Wali Mondal Dean, School of Business and Management National University, La Jolla, CA (USA)

Prof. H.K. Manjhi Bangalore City College & SMSG Jain College Bangalore

Prof. Uma Kumar Professor of Management Science, and Technology Management, Director, Research Center for Technology Management, Eric Sprott School of Business, Carleton University, Ottawa, ON, CANADA Prof. Vinod Kumar Technology and Operations Director, Manufacturing Systems Centre, Former Director, Sprott School of Business Sprott School of Business, Carleton University, Ottawa, ON, Canada Prof. Rajesh S. Pyngavil Gitarattan International Business School GGSIP University, Delhi Prof. Rahul Mishra Professor, Indian Institute of Planning and Management, Lucknow Prof. P. Sinha JNV University, Jodhpur

Prof. C.R. Darolia Department of Psychology, Kurukshetra University, Kurukshetra Dr. V.K. Shanwal Associate Professor, Dept. of Psychology Fiji National University, Fiji Dr. Sudhir Agarwal Assistant Professor, Department of Management, Fiji National University, Suva Fiji Dr. Shyam Lata Juyal Professor and Head, Department of Psychology, Gurukul Kangri University, Haridwar Dr. Shahidul Islam Grant MacEwan University, Edmonton, Alberta, Canada Dr. S.B. Yadav Professor of Psychology, JNV University, Jodhpur Dr. Ruchi Tewari Associate Professor Shanti Communication Schook, Ahmedabad

Dr. Prashant P. Deshpande S.N.D.T. University, Mumbai, Maharashtra Dr. Ozgur Cengel Associate Professor, Istanbul Commerce University, Turkey Dr. N. George Mathew Asst. Professor, Aljouf University, Aljouf Province, SAKAKA, Saudi Arabia Dr. Lovy Sarikwal Assistant Professor, Gautam Buddha University, Greater Noida Dr. Kirti Sharma Management Development Institute (MDI), Gurgaon, Haryana Dr. Gagan Kukreja Assistant Professor, (Accounting), Ahlia University, Manama, Kingdom of Bahrain

Dr. Figen Yildirim Assistant Professor, Istanbul Commerce University, Turkey Dr. Devinder Sharma Associate Professor, BCIPS, GGSIP University, Delhi Dr. Dan Baugher Professor of Management, Associate Dean, Graduate Programs, Lubin School of Business, Peace University, One Pace Plaza, New York, N.Y. 10038 Dr. C.P. Shaheed Ramzan Govt. College Kodanchery, Calicut, Kerala Dr. Amol Singh Assistant Professor, Indian Institute of Management (IIM), Rohtak Dr. Ajay Suneja Associate Professor, Department of Commerce, Kurukshetra University, Kurukshetra

About the Journal The International Journal of Management and Computing Sciences (IJMCS) is a Quarterly research journal, which is committed to publish scholarly empirical and theoretical research articles that have a high impact on the management and computing science field as a whole. The journal encourages new ideas or new perspectives on existing research. The journal covers such areas as: Organizational behavior Psychology

Marketing Operations

Human Resource Management

Economics

Organizational Development and Theory

Mathematics

Entrepreneurship

Social Science

Strategic Management

Artificial Intelligence

Finance

Computing Science

International Journal of Management and Behavioural Sciences (IJMBS) Vol. 6-7

June 2015

ISSN 2278-5671

CONTENTS 1. Preference of Private Label Brands Over Company Brands in Sanitary Sector (Toiletries) Prof. JemsonVaz & Prof. Tenzing J Anto 2. Consumer Protection Act, 1986 vis-à-vis Legal Profession: An Analysis Prof. Tenzing J. A. & Prof. Jemson Vaz

1-7

8-17

3. Buying Behavior of Financial Credits and its Impact on Jaggery Productivity in Rural Karnataka Sanjeev Ingalagi & Dr. Rajeshkumar. K

18-26

4. Ethnopharmacognostical Analysis of Euphorbiahirta (Asthma Plant) Shrimant V. Rathod & Sandip D. Maind

27-33

5. An Interplay of Gender and Caste: A Study of Khap Panchayats Manjusha Patwardhan

34-38

6. Role of Brain Function Therapy in Neurorehabilitation of Alcoholics: An Exposition & Benefaction Menezes, R, Kacker, P & Mukundan, C.R

39-47

7. Fast-Food Consumption Behavior of Students in Manipal University, Manipal Narayan B. Prabhu M.

48-52

8. Subaltern Social Movement: India and Canada Dr. Gitanjali Singh

53-56

9. Employee Perceived Leadership Style and their Engagement: An Empirical Study of Private Sector Commercial Bank of Nepal Dr. Gangaram Biswakarma & Pradeep Kumar Khanal

57-69

10. Living Practices, Hazards of Life and Balancing Work Life of Women: A Case Study of Women Police in Ranchi, Jharkhand Swati Minz & Dr Pradeep Munda

70-75

11. Study on Generational Diversity at Workplace and Mitigating the Conflicts Arising on Account of Generational Differences Amongst them Krupa Dalal Kapadia

76-83

12. A Case Study on “Narayana Murthy Joins Back Infosys-Masterstroke or Strategic Gaffe” (2011-13) Shraddha Manohar Kulkarni, Manmohan Vyas & Girija Shirurkar

84-92

13. Employee Grievances of Service and Manufacturing Organizations: A Study of Pokhara Valley, Nepal Daya Raj Dhakal

93-98

14. A Study on Institutional Influence on Effectiveness of Entrepreneurial Development Programme with Reference to Engineering Professional Students Dr. Maran Kaliyamoorthy, Dr. C.V. Jayakumar & Lawrence Thomas

99-105

15. The Role of Social Enterprises and Partnerships to Participate in Better Governance: A Case Study of Project Deriya H N Lakshmi, Shashikanth Subramanya & Gnanaskandan Velu

106-111

16. Paryawaran Mitra Shikshakon Ka Nirman: Ek Prayas Ms. Usha Sharma

112-119

17. Opening up the Minds of Vernacular Medium English Language Teachers with ICT Tools Ms. Rupal Thakkar

120-121

18. Emotional Intelligence and Perception of Politics Predicting Resistance to Change in Research Organisations in India Vidushi Pathak & Ari Sudan Tiwari

125-138

19. Societal Perception Towards Juvenile Delinquency and Law: A Study with Reference to Indian Perspective Dr. V. Hemanthkumar & Dr. P. Premchand Babu

139-146

20. Working Capital Management and Profitability of Food and Beverages Companies in Nigeria Kabiru Abdu Ibrahim

147-154

21. A Study of Attitude and Perception of Millennium City Investors for ULIPs Monika Bhatia & Dr. Narinder Kaur

155-160

22. Global Trends in HR: Changes and Challenges in 21st Century Dr. H. Nagaraj & Madhu Sudhan. S

161-168

23. Learning Management System Adoption in Universities-Perception about Moodle as a Pedagogical Tool in a Private University in India Kumar, D & Samalia, H.V

169-176

24. BRICS-Africa Relationship: How Ideal is this South-South Co-operation? Dr. Shailly Nigam

177-184

25. Capital Market Liberalization in the Light of Behavioural Finance Parag Chandra

185-190

26. Behavioral Bias in the Indian Secondary Market Niveditha K Venugopalan & Madhumathi R

191-200

27. Depression and Self Esteem in Schizophernia and Obsessive Compulsive Disorder Patients Tanvi Anil Patel

201-204

28. HR Outsourcing: A Competitive Strategy Shambhavi Pandey

205-207

29. The New Rule of Online Business: A Critical Review and Theoretical Framework for Further Study R Ruma Agnes

208-217

30. Virtual Intimidation Choudhary. A, Hararwala. T & Kacker.P

218-225

31. Substance Dependence and Mental Health: A Case Study Prof. Shyamlata Juyal & Rashi Bhatnagar

226-231

32. Cartoons: A Proven Tool for Health Communication Ann Maria Rozario & Dr. Arulchelvan Sriram

232-243

33. Global Destination Branding through Indian Cinema: Evaluating the Brand Relevance Dr. Tripti Dhote

244-252

34. Workplace Flexibility: HR Strategy for Handling Contemporary Workforce Dr. Azra Ishrat & Dr. Seema Wali

253-259

35. Sexual Harassment at Workplace: A Study on Impacts of Policy Failure Richa Vijayraj & Imran Rao

260-266

36. Workplace Spirituality and Work-Life Balance: A Study among Women Executives of IT Sector Companies Moitreyee Paul, Dr. A. Dutta & Dr. P. Saha

267-277

37. Understanding the Pursuit of Happiness in Children Dr. Sowmya. Puttaraju, Akila Murthy, Chindu Mary Mathew, Joemy Alexander, Niyantha Mittal & Sushmitha.S

278-281

38. Academic Motivation, Dispositional Mindfulness, Emotional Maturity and Academic Achievement of College Students Batul Sukhsarwala, Dr. Priyanka Kacker, Dr. C.R. Mukundan

282-296

39. Job Satisfaction and Marital Satisfaction as Predictors of Well Being Among Married Professionals Akanksha Rathee & Anjali Rana

297-302

40. Do Learning Styles Differ among Individuals of Varying Generations and would it be Influenced by their Professional Upbringing and Careers Chosen?: A Study with Special Reference to Generation X and Generation Y Abirami K & Priyadarshini, R G

303-310

41. Is Organizational Culture an Antecedent to Emotional Intelligence? With Special Reference to Banking and Healthcare Industry in India Flourisha Khattar Priyadarshini, R G

311-320

42. Implementing Kaizen in the Workplace: A Case Study Joshua Haun, William M. Mothersell & Jaideep Motwani

321-325

43. Performance Evaluation of Select Leading Public Sector Banks in India Dr. S.Sankar & Dr. K.Maran

326-332

44. Impact of Information & Communication Technology (ICT) Integration in School Education Shashidhar M. Sugur & Dr. K. Nirmala

333-337

45. Consumer Opinion on Various Brands of Milk: A Study with Reference to Chennai Dr. K. Sentamilselvan & Dr. S. Pragadeeswaran

338-342

46. Behavioural and Soft Skills Training in Preparing Soldiers for Psychological Warfare Dr. Anurakti Mathur & Dr. Priyanka Tiwari

343-348

47. A Study on Consumer Perception Towards Online Shopping with Refernce to Chennai Dr. K. Soundarapandiyan & Dr. M. Ganesh

349-360

48. Employee Satisfaction Among the Teaching and Non Teaching Employess of Educational Institute in Jhunjhunu: A Comparitive Analysis Sukanya Roy

361-366

49. A Comparative Study of Holistic Growth amongst StudentCentered and Teacher Centered Learning Institutions Sonakshi Singh & Anchal Garg

367-371

50. A Synthesis of Literature on Ethics Program for Political Behaviour in Organization Anchal Garg & Dr. Priyanka Tiwari

372-381

51. Nurturant Task Leadership in Relation to Positive Emotions Pranija Bohara & Dr. Priyanka Tiwari

382-393

52. Martial Rape and Intimate Partner Violence: Their Effect on Psychological Well-being and Psychological Morbidity Decency Rajput

394-403

53. Occupational Stress and Coping Strategies Sunita Rani & Babita Saroha

404-412

54. Running Head: Increased Student Learning Through the Halo-Effect Student Attention and Learning Increases with Facial Attractiveness of the Teacher through the Halo-Effect Aaditya Thakar

413-417

55. Frog Culture-Why Not? Dr. Rodney D’Silva

418-426

56. Impact of Sales Promotion on Online Buying Behavior in India: A Study Covering Employees of MNCs who are Frequent Online Buyers Kaushik Kumar Patel & Dr. Tejas Shah

427-439

57. Correlating Internalized Homophobia, Depression, Anxiety, Stress and Spirituality in Homosexuals (Lesbians and Gays) Dr. Dweep Chand Singh, Ms. Manpreet Ola and Tarun Verma

440-450

58. A Study of Consumption Based Capital Asset Pricing Model (CCAPM) on Indian Stock Market Abhishek Sachan

451-457

59. A Study of Relationship between Demographics and Emotional Biases of Individual Investors Abhishek Sachan

458-472

60. Managerial Perceptions and Change Readiness towards Organizational Change: A Perspective from the Financial Services Industry in India Debjani R Dass

473-481

61. Managerial Perceptions towards Organizational Change: A Focus Group Study on Indian Managers Debjani R Dass

482-495

62. Faculty (without Ph.D and NET) in Private NBA Accredited MBA Institutes: A Question against the Quality Management Education Prabjot Kaur & Ashutosh Priya Awasthi

496-503

63. Influence of Psychological Capital on Employees’ Outcomes: The Moderating Role of Perceived Organizational Support Musarrat Shaheen & Arun Tiwari

504-510

64. Low Cost Carriers (LCC) in the Indian Aviation Space: A Contemporary Indian Perspective Anupama Ghoshal & Dr. Soney Mathews

511-515

65. Gender, Self-Efficacy and Locus of Control as Predictors of Psychological Well-Being Amongst the Adolescents with Hearing Impairment in Southwest Nigeria Bakare, Aveez Oluwatoyin

516-526

66. World of Information with a Free Mind & Free Soul Jayanti Srivastava & Syed Zainul Haque

527-531

67. Ideational Fluency, Cognitive-Emotional Regulation Strategies and Occupational Self-Efficacy Among Scientists in Research Institutions Ankitha. U & Gnanaprakashc

532-540

68. Creation of Perceived Customer Value to Edge Past the Competition: A Study of Competing Major Cement Brands at Raipur

541-548

Vibhuti Jha & Sharmila Sharan

1

Preference of Private Label Brands Over Company Brands in Sanitary Sector (Toiletries)

1 Preference of Private Label Brands Over Company Brands in Sanitary Sector (Toiletries) Prof. JemsonVaz* & Prof. Tenzing J Anto*

ABSTRACT

This paper attempts to highlight the emergence of private label brands in comparison to company brands in the sanitary sector. The consumer segment is rising at an alarming rate in the FMCG retail sector where in one finds varieties of products with different sizes, prices packaging and benefits. With the retailers growing strong on the back hand manufacturing process (outsourced), they are competing equally with the private label brands in specific categories, be it eatables or cleaning agents. As these private label brands are packed and priced with quality instated in them, they are gaining customer preference of which the momentum is slow but steady.Also the customers are satisfied by having purchased more by paying less.More for Less concept. The ability to generate more revenue, gain greater market share and to beat off the competition, the private label brands are emerging as a trustworthy product category where in new products are getting added to its product line. The main findings of this paper are: The private label brands are gaining more customer preference over the company brands. The quality offered by these private label brands is quiet accepted by these customers. Without any marketing awareness, these private label brands are able to penetrate more households. Customers are getting More for Less. Key words: Private label, mind set, preference, More for Less.

Introduction The history of retailing is not so very new to the Indian consumer. Way back in olden times, traders used to flock certain market places for specific days to sell their goods and also trade for the goods which they had purchased from other manufacturers. The customers had limited choices and had to do away with whatever that was availablewith a compromise with respect to quality and even price.With *

the passage of time, as the customer base expanded and the customers started experiencing more and wider varieties in the products, traders started buying more and making the same available to the customers. The same traders performed more of retailing activity as compared with their past.The quality factor started getting associated with these traders for providing good and better products. These traders were reaching the

Jain College of MBA, Belgaun (Karnataka).

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International Journal of Management & Behavioural Sciences (IJMBS)

customers with personal touch, likewise it was also important for the manufacturers to convey their message in terms of quality and offering to these customers. So advertising became a part of the retail industry. Initially the traders used to price tag the products according to their wish and will. But with the advertising, the manufacturers started showing transparency in all terms but had to increase the product prices due to heavy advertising spending. Hence there was a noticeable gap between the cost price and offered price of the products. Hence competition started building up among the manufacturers which were increasing in number as the market was expanding and customers with diversified choices were seeking their way. These manufacturers so called the company brands, started reaching the traders (retailers) with the view of making their products available at the prominent places which had developed into shops and maximizing their market share. With the increase in consumer spending and the consumers getting more quality and price conscious, every consumer looks for some advantage like more for less, less for much less and so on. As the advertising alone was not enough, the manufacturers started gaining customers attention by positioning their product in the retail outlets which also included products which were time specific and season specific. As a result, the companies have to also spend for their product display which the retail stores earn as royalty.Hence this again makes the product costlier. With the display space in the aisle being at the retailers wish and will, it started finding its use in a more better and smarter way. The process of integrating the space with a product which best suits the customers in all the ways, started gainingmomentum which gave rise to private label brands and these brands started making their way to the shelves and eventually to the consumers house.The concept of Backward Vertical integration was perfectly integrated in the retailing environment. The organized retail store (More and Big Bazaarwith reference to the study) started positioning their own private labeled brands on their shelves in close consideration with the company brands which showed the difference in price Vol. 6-7

and quantity. This very strategy started working out quite finewhen the impulse customer(s), bought them as a try out and were satisfied with the results.

Background The retail industry is getting much hotter in India and this organized retail has grown at an burgeoning rate of almost 15% over the last 5 years(CAGR) (source – KPMG report on Retailing in India, 2014). Private label brand definition “Brand owned not by a manufacturer or a producer but by a retailer or a supplier who gets its goods made by a contract manufacturer under its own label”. In the due course various names such as Corporate brands, Store brands, Own brands and Retailer brands get associated as Private label brands. When the retailing industry started getting organized, every company was trying to push its brand on the shelves of every retail store. The retailers, who had grown in gigantic size by now, started looking for more profitable ventures looked at the shelf as an option and integrated backwards to perform as a manufacturer.

Fact Retail classification Retail industry (India) can be broadly classified into two categories namely- organized and unorganized retail.

 Organized retail - Organized traders/ retailers, who are licensed for trading activities and registered to pay taxes to the government.  Unorganized retail – It consists of unauthorized small shops - conventional Kirana shops, general stores, corner shops among various other small retail outlets - but remain as the radiating force of Indian retail industry. Market Dynamics In the past few years, Indian Retail sector has seen tremendous growth in the organized segment. Major domestic players have stepped into the retail arena with long term, ambitious

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plans to expand their business across verticals, cities and formats. Companies like Tata, Reliance,Aditya Birla, Future group, Adani Enterprise and Bharti have been investing considerably in the booming Indian Retail market. Along with these giant retailers, a number of transnational brands have also entered into the market in close association with the company brands which has also given rise private brands or the retail brands. The retailing battle ground in India has never been so exciting for both, the consumers and the marketers. Today’s consumer (India) is spoilt for choice and has a problem to deal with, and that’s the problem of Plenty. With the organized retailing growing at a frantic pace of 15%annually (compounded ‘Yes Bank - Assocham’ study) and is expected to grow at a CAGR of 24%, the retailers are rushing to expand their presence in the market which is making their size grow and also position their product – Private brands. With the retail houses like the Future Group and Aditya Birla democratizing the scene,the private labels are getting more space as well as presence. Today the private label brands constitute about 13%-14% of the organized retail in India (source: E&Y 2012). In terms of sheer space, the organized retail supply in 2013 was about 4.7 million square feet (sqft) and is expected to grow three folds each year. A number of growth drivers may be related to this kind of retail expansion - High consumer spending over the years by the young population (more than 31% of the country is below 14 years) and sharp rise in disposable income are driving the Indian organized retail sector’s growth.Consumer preferences and lifestyles,are gaining a major shift, which are forming attractive markets especially in Tire II and Tire III cities for these retailers to expand their presence.(http:// in fo. sh ine .co m/ ind ust ry /re tai lB y An as ua Chakraborty) As the market is getting dynamic, retailers who have grown stronger and larger, have innovated and manufactured their own brands and customized to suit the local needs. These brands can be seen in various categories like food and beverages, packaged foods, apparels, house cleaning agents etc. Vol. 6-7

Here we will be looking into the sanitary category – house hold cleaning, which is a very effective and fast growing sector in the private brands category. Now a days, when we walk through the aisle of any retail outlet (Big Bazaar or More), we see their own brands stocked in the prominent places with fairly beautiful packaging and attractive colors and design.And this has become quite prominent with the retail gaining momentum in major cities and small towns. How did this happen, how did these products which have become brands, gain their way into the market and ultimately the customers home? What boosted their existence? Is it price, value or quality? Many of such questions arise and the exact answers to these questions may be traced by looking at the past and present economic scenario along with the customer’s preference or comments.

Objectives of this Study To examine the various factors influencing the private label brands – sanitary sector. To evaluate brand preference of the customers. To analyse the brand efficiency in the future.

Goal of this Report  Explore the change drivers.  Identify the critical success factors of retailers w.r.t the private label brands. Literature Review Retailers Purview The retailers charge the manufacturers an upfront fee to stock the productsin their stores. As a result, the retailers decide the fees for the shelf with respect to the display and direction which forms a mark of prominence. The manufacturers pay a high fees in advertising and to the retailers go gain more customers and more market share. But here the retailers decide the aisle position for the manufacturer’s products which is a mark of concern. As the slotting feediffers, the manufacturers may have to be happy with what they can. These retailers also play an effective role in the distribution channel of goods and services.

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Hence the supplier/manufacturer has to do away with “take-it-or leave-it” policy from the retailers. The next important thing is that, the retailers have started integrating backwards and are positioning their own brands in most of the categories. Be it food, grocery, clothing, packaged food, canned foods, beverages, disinfectants, toiletries and laundry products.Likewise this has given rise to private label brands or products to acquire their own shelf space and importance. The private label brands are making their own way in this fierceful battlefield. The home grown brands are the private label brands which I will be including in my further study in comparison with the company brands. These private brands have been finding much of their use and gaining more and more market with penetration in most of the households.

The Success of Private Label Brands History The emergence of private label brands, then generic brands can be traced down to small shops or mom and pop stores when these stores started selling their home made products in form of items which could be fried and those which could be eaten directly. The same is done today by these organized retailers where in their home grown brands, acquire shelf space and are in competition with the manufactured brands. The difference is that these giant retailers have galvanized well with the customer needs and the market dynamics. In recent years, retailers have been liberating themselves from the traditional definition of private label marketing as being the poor relative of national brand consumer goods, and, in doing so, opening up huge opportunities for private label branding. These opportunities require the adoption of a different set of marketing and branding practices to support and propel the retailer’s business and marketing ideals for its private label brands. Very often, if we could remember the old days, in-house brands were supposed to be of low quality, lower priced, less trust worthy etc. Eatables were believed to be stale. Vol. 6-7

But now the things seem to be different. These in-house products have acquired the name ‘Private label’ and are in comparison with the company brands when it comes to quality and performance.

Approaching for today So what made these private label brands gain momentum in today’s dynamic market? With the market gearing for changes and to gain more customer insights by offering varieties of products and to tout certain categories, cues from the company brands provided a leveraged platform for the retailers. The company brands had already identified the need of the customers to be satisfied through their offerings in many categories. But these highlighted the premium section of products more than those which could serve the lower categories for the consumers. As majority of the households in India have an income in the range of Rs.20,000-Rs.50,000 per month, slight difference in price, or promotion offer of bundle offering, makes a huge impact especially in the sanitary section and grocery section of products. Next, the customers do not remain loyal to such products and tend to try out or experiment with other variant just for a change or get influenced due to some factors.Retailers are beginning to recognize that they cannot simply rely on national branded products to draw consumers into their stores and sustain loyalty. This is due to the fact that manufacturers’ product and brands often have the ability to transcend geographic location, distribution channel or retailer. Also, these products are found almost in every mom and pop store, medical stores, super markets as the manufacturers have made their presence everywhere.Eg: Paper towels, Liquid hand wash, Room fresheners etc.Due to this pervasive presence of national brands, consumers need not have a strong relationship with a particular product or brand. It is only the proprietary brands, exclusively available at a specific retailer that can be a magnet to draw people into its store versus others. To draw the customers, manifestation of the company products labeling, packaging and appearance was very well done which was then carefully positioned along with the company

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brands carefully stating the attributes and benefits through the colours, packaging and shelf advertising strategy. The message displayed by these private brands was “metoo”, which meant that it also had the same benefits.

The Shift in the Private Label Paradigm Retailers in UK have been known to be innovators in private labels. The same is replicates in India and with the trade getting organized with the customers increasing their choices, the show is clicking. A particular consumer buys a significant proportion of his weekly purchases from one store, the competitive focus is at the store level and this is where it has been imperative for retailers to create a persuasive consumer connection. Buying weekly items is quite noticeable and prevalent among many of us. And these items of purchases cannot be differentiated among each other with regard to their appearance and function. Hence this helps the retailers to grow their private label brands in accordance with the industry approach. Great price offers and up to mark performance of the private labels, played like the magnetic forces in attracting the customerstowards the stores. The retail industry is growing at an alarming rate and the private labels form a minimum 22% of the total sales which is also increasing (Marketing Whitebook 2011-12). Some of the factor for the growth of the private labels may be attributed as below:

• Consumer Value –Private labels offer high quality products at retail prices that are often 10-30% less than national brand varieties.Eg: Handwash refill pouch is priced

at Rs.32 for company brand and Rs.28 for private label. • Retailer Profitability - On the average, retailer’s profit margins on private brand products are 10% higher than the profit margins on national brands. • Consumer Confidence - Educated consumers recognize the value of private brand products and are unwilling to pay premium prices for national brand products. • Reduced R&D - They imitate Company brands in coloring and packaging, which reduces their R & D expenses. Methodology of Study Survey method has been adopted to elicit the views of the Private label brands. The preference towards Private labels were administered and studied through structured interview of 100 customers in Belgaum city. Primary data has been collected with the help of a well structured interview session with the 100 respondents of Belgaum city who regularly visit the retail sites i.e. Big Bazaar and More stores.The respondents were carefully selected in clusters with respect to Age, Gender, Occupation and Income status. Secondary data has been collected from the Websites, Standard text books, Articles, Researches and Newspapers etc.,

Results and Discussion Regarding the personal profile of the customers, Table 1 shows 50% were between the age group of 20-40 years, 68% were married, 30% were private job holders and 40% respondents were earning below Rs 1,00,000 per annum.

Table 1: General Profile of the Respondents Factors

Classification

No. of Respondents

Percentage

Age below

25 years 25 – 40 years above 40 years

30 50 20

30 50 20

Marital Status

Married Unmarried

68 32

68 32

Occupation

Student Private concern Govt. Employees

15 30 20

15 30 20

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Income status

Business owners Profession

20 15

20 15

No income Below Rs.2,00,000 Rs.2,00,000 – 3,50,000 Above Rs.3,50,000

15 40 25 20

15 40 25 20

Table 2: Purchase of Private Label brands – Sanitary products Attributes

No. of Respondents

Yes No Total

Percentage

76 24

76 24

100

100

The observation of Table 2revels that 76% respondents prefer to purchase private label brands.

Table 3: Source of information for buying the Private label brands Sources

No. of Respondents

Self Display Close Acquaintances Total

Percentage

13 69 18

13 69 18

100

100

Table 3 reveals that majority of the information about the products happen through display i.e, 69%.

Table 4: Media Effort or Advertisement for purchase– Sanitary products Particulars

No. of Respondents

Self Television Newspapers SMS Announcements while shopping No effort Total

Percentage

13 00 09 14 00 77

13 00 09 14 00 77

100

100

Table 4 expresses that there are very few marketing efforts taken up by the Private labels as marketing forms the costliest segment when it comes to getting awareness about the product.

Out of 100 respondents, 77% of the purchases were made due to product Display or Self or Word of mouth.

Table 5: Reasons for Buying Private label brands– Sanitary products Particulars

No. of Respondents

Percentage

Self

13

13

Good Quality

20

20

Less price

39

39

More quantity

17

17

Availability

08

08

Bundle offers

16

16

100

100

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From Tabel 5 it is clear that 39% respondents prefer lessprice for these products as they are not differentiable.28% prefer because of the same quality that of the Company brands and 16% because of the offers with these products.

Findings People with age group from 25-40 years visit the stores(Big Bazaar and More) often. Many of them are married and income level is less than 2 lakh per annum mainly to purchase grocery items and daily utilities products. Almost 75 percent of the visitors purchase the private labels in sanitary sector. Most of the customers agreed to the fact that their purchase decision was enhanced by the display of the private label brands in the same aisle along with the company brands and that their close acquaintances influenced their buy. The private labels are successful with no advertisement and their sale is increasing with the number of walk-ins. Also the figures show that the customers are happy when they get More quantity for Less price and also about the optimum quality. Though the availability is not a problem, customers have not considered this parameter important. But its availability and non availability would make a lot of difference. Bundle offers seem to attract the customers. The offers are bundled with other sanitary products of the private labels. Retailers have differentiated successfully in various product segments. They have better margin and better control in deliveries. Independent pricing strategy is very well adopted by the retailers. The private labels also speak about the brand equity and loyalty. Recommendations Most of the customers purchase grocery and daily use sanitizers from these retail stores and hence the management can keep the income level in mind and divert their efforts towards moderately prices private label brands which forms an important section of the customers purchase. Display of the private brands on the shelf along with the company brands, lures the customers to buy and try atleast once.Display of the private labels is working as the effective advertising strategy. Visibility of the product Vol. 6-7

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can be dealt in a better way by the management. The packaging imitates the colors, style, shape and design of the company brands which makes the customers feel equally good while buying. Hence the retailers should maintain the package design and colors suitable for the customers along with the essential details. Bundle offers force the customers to compare the quantity and price and get More for Less. Better differentiation and R & D may help give the retailers a better profit margin. Failure of the product will create a negative image about the retailer.

Conclusion Lower and lower middle segments of the society, prefer private labels and have accepted its quality and affordable price. Private labels are slowly becoming the protagonist in the big Indian retail growth story. The retailer has to steadily increase the market share as a slight change in quality may hamper the image of his business which may have a cascading effect on the other products under him. Visibility and shelf space are playing a prominent role in attracting the customers and making them compare with the company brands. The retailer has to steadily increase the market share as a slight change in quality may hamper the image of his business which may have a cumulative effect on the other products under him. References Book references 1. 2. 3. 4.

Levy Weitz, Retailing Management, 6 th Edition (2010). K. Suresh Retailing Management, Emerging Global Trends 1 st Edition (2007) Pradhan Retailing Management, Indian Retailing Cases 4th Edition (2012) Berman EvasRetailing Management 1 st Edition (2010)

Journal references 1.

International Journal of Management and Marketing, Volume 4 (Dec 2014)

Websites

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http://tata-bss.com

2.

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2 Consumer Protection Act, 1986 vis-à-vis Legal Profession: An Analysis Prof. Tenzing J. A.* & Prof. Jemson Vaz*

Whether a Lawyer can be held liable for ‘deficiency in service’? (Under the provisions of Consumer Protection Act, 1986)

ABSTRACT

After the enactment of the Consumer Protection Act, 1986 (CPA 1986),the question of its applicability to the legal profession became a debatable issue as is the case with respect to the medical profession. The question with respect to the legal profession is more complex in the view of the unique position, a legal professional occupies. A Lawyer is not a mere agent of the client but has a tripartite relationship, one with the public, another with the Court and third with his client. This is unique feature of the legal profession. In India as in UK the legal practitioner may in one sense be considered as an officer of the court as he is a part of the justice system and does not act as a mere mouthpiece or agent of his client. Till recently in England Barristers enjoyed immunity from being sued for professional negligence which was reasoned on the basis of public policy and in public interest. But now even they are covered. In India, Hon’ble Supreme Court stated that not only lawyers but all the professionals like Engineers, Architects, etcare very much within the ambit of this Act. While a Lawyer cannot be forced to take a brief from any person, he has certain responsibilities for those whom he accepts as client. A reasonable man entering into a profession of advocacy which requires a particular level of learning and skill shall be exercised with reasonable degree of care and caution. And therefore, a Lawyer may be held liable for ‘deficiency in service’ under Consumer Protection Act, 1986. This paper attempts to highlight consumer awareness, the ‘beware’ clause in Consumer Protection Act. It is not only about the price or fees paid but also the impact of the inferior quality goods and services have on the consumers, clients and on the business. Many a times the consumer and client are unaware about his rights for what he pays. Key Words: Lawyer, Barrister, Tripartite, Immunity.

*

Jain College of MBA, Belgaun, (Karnataka).

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Consumer Protection Act, 1986 vis-à-vis Legal Profession: An Analysis

Introduction After the enactment of the Consumer Protection Act, 1986 (CPA 1986),the question of its applicability to the legal profession became a debatable issue as is the case with respect to the medical profession. The question with respect to the legal profession is more complex in the view of the unique position, a legal professional occupies. A counsel is not a mere agent of the client but has a tripartite relationship, one with the public, another with the Court and third with his client. This is a unique feature of the legal profession. In India as in UK the legal practitioner may in one sense be considered as an officer of the court as he is a part of the justice system and does not act as a mere mouthpiece or agent of his client. Till recently in England Barristers enjoyed immunity from being sued for professional negligence which was reasoned on the basis of public policy and in public interest. The engagement of a barrister was considered to be a purely honorary one, conferring on him no legal right to remuneration and there was mutual incapacity of the counsel and the client from suing each other. The House of Lords, however in Arthur J Hall & Co. Vs Simpson has changed this view and has held that now neither public policy nor public interest justifies the continuance of that immunity. Thus barristers and solicitor advocates are now liable in England for negligence like other professions. Hon’ble Supreme Court of India, after adverting to the “Legal Practitioners (Fees) Act, 1926” in M Veerappa VsEvelyneSqueira,held that an advocate who has been engaged to act is clearly liable for negligence to his client. In view of this unequivocal pronouncement of the Hon’ble Supreme Court it is established legal position that a client can file a case against his lawyer complaining of negligence of the lawyer. The ruling of Hon’ble Supreme Court in Indian Medical Association Vs. V. P. Shantha and Others, it has been held by the Hon’ble Supreme Court that not only lawyers but all the professionals like Engineers, Architects are very much within the ambit of this Act. Vol. 6-7

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While a Lawyer cannot be forced to take a brief from any person/client, he has certain responsibilities for those whom he accepts as client. A reasonable man entering into a profession of advocacy which requires a particular level of learning and skill shall be exercised with reasonable degree of care and caution. And therefore, a Lawyer may be held liable for ‘deficiency in service’ under CPA, 1986.

Whether Lawyers liable for deficiency in service? In this commercial era, all services have a price. Thus even though the Bar Council of India may prescribe that law is a noble profession and intended to be maintained that way, there are no second thoughts that law profession is inevitably a service. So was also the conclusion of the National Consumer Disputes Redressal Commission. In its judgment dated 06.08.2007 passed in D.K. Gandhi Vs M. Mathias a Bench of National Commission, headed by Justice M.B. Shah (a former Judge of the Supreme Court) had inter alia held as under; In our view, the reasoning given by the State Commission is totally erroneous. The ambit and scope of Section 2(1)(o) of the Consumer Protection Act which defines ‘service’ is very wide and by this time well established. It covers all services except rendering of services free of charge or a contract of personal service. Undisputedly, lawyers are rendering service. They are charging fees. It is not a contract of personal service. Therefore, there is no reason to hold that they are not covered by the provisions of the Consumer Protection Act, 1986. The State Commission approached the question totally in an erroneous manner by holding that by executing power of attorney the client authorizes the Lawyer to do certain acts on his behalf and there is no term of contract as to the liability of the lawyer in case he fails to do such act. It is to be stated that a Lawyer may not be responsible for the favourable outcome of a case as the result or outcome does not depend upon only on lawyers’ work. But, if there is deficiency in rendering services promised, for which consideration in the form of fee is received by him, then the lawyers can

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be proceeded against under the Consumer Protection Act. Further, it is totally erroneous to hold that it is a unilateral contract executed by the client by giving authority to the lawyer to appear and represent the matter. Apparently, it is a bilateral contract between the client and the lawyer, and, that too, on receipt of fees; lawyer would appear and represent the matter on behalf of his client. To hold that contract is unilateral is to ignore the fact that even after discussion the client may not engage the Advocate or the Advocate may refuse to accept the brief. Hence, such a contract can never be said to be unilateral. A petition for special leave to appeal was filed against this decision by an association in the name of Bar of India Lawyers where the Supreme Court, allowing the leave to appeal (and thus paving way for a decision to be given on the issue on merits) stayed the judgment of the National Commission by its order dated 13.04.2009 in Bar of Indian Lawyers v. D.K. Gandhi. Thus as of now, given the operation of stay, no final opinion can be given as to the status of lawyers as service providers under the Consumer Protection Act. However one thing can definitely be said with certainty that the outcome, whichever way it may be, will be interesting. Hence, the present paper is undertaken to analyze the CPA, 1986 including the Consumer Protection (Amendment) Act, 2002 and verdicts of consumer courts with reference to legal profession, and the impact of the Act on Legal Profession and society.

Review of literature under CPA, 1986 Background The best way to come directly to the issue would be to know about therights of the consumer. The International Organization of Consumer’s Union has defined eight basic rights of the consumer.

Consumer Rights 1. Right to Safety: This means the right to be protected against products, production processes and services which are hazardous to health or life. The right to safety has been broadened to include the concern for consumer’s long-term Vol. 6-7

interests, not only their immediate desires. 2. Right to be Informed: This means the right to be given the facts needed to make an informed choice or decision. The right to be informed now goes advertising, labeling or other practices. Consumers should be provided with adequate information 3. Right to Choose: This means the right to have access to a variety of products and services at competitive prices and in the case of monopolies, to have an assurance of satisfactory quality and service at a fair price. The right to choose has been reformulated to read: the right to basic goods and services. This is because the unrestrained right of a minority to choose can mean for the majority a denial of its fair share. 4. Right to be Heard: This means the right to be represented so that consumer’s interest receives full and sympathetic consideration in the formulation and execution of economic policy. This right is being broadened to include the right to be heard and represented in the development of products and services before they are produced or set up; it also implies a representation, not only in government policies, but also in those of other economic powers. 5. Right to Redress: This means the right to a fair settlement of just claims. This right has been generally accepted since the early 1970s. It involves the right to receive compensation for misrepresentation or shoddy goods or services, and where needed, free legal aid or an accepted form of redress for small claims should be available. 6. Right to Consumer Education: This means the right to acquire the knowledge and skills to be an informed consumer throughout life. The right to consumer education incorporates the right to the knowledge and skills needed for taking action to influence factors which affect consumer decisions.

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7. Right to a Healthy Environment: This means the right to a physical environment that will enhance the quality of life. This right involves protection against environmental problems over which the individual consumer has control. It acknowledges the need to protect and improve the environment for present and future generations. 8. Right to Basic Needs: The right to basic needs means availability of articles which are the basic need of every consumer must be ensured. Enactment and Purpose of Consumer Protection Act, 1986 The Consumer Protection Act, 1986 which came into force on 15-04-1987 is a welfare legislation mainly tilting towards the consumer. The aims and objects of the Act inter alia are better protection of the interests of the consumer and for the settlement of consumer disputes. It provides for speedy and inexpensive settlement of disputes within a limited time frame, as against civil actions which are costly and take years in coming to a settlement. Provisions of the Act are in addition to and not in derogation of any other law for the time being in force and are compensatory in nature. The Consumer Protection Act envisages threetier quasi-judicial machinery,

a. District Consumer Disputes Redressal Forum at the District level b. State Consumer Disputes Redressal Commission at the State level. c. National Consumer Disputes Redressal Commission at the National level. District Consumer Disputes Redressal Forum A District Forum has been established for every district and is empowered to entertain complaints claiming compensation up to Rs.20 lakhs. It has three members: the President (a judicial member, who is a sitting, retired or person qualified to be a District Judge) and two non - judicial members, one of whom is a woman.

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State Consumer Commission

Disputes

Redressal

There is a State Consumer Disputes RedressalCommission for every State or Union territory. It is empowered to entertain claims for compensation more than Rs.20 lakhs and up to Rs.1 crore. A State Commission can also entertain appeals or revision application from the respective District Forum. The State Commission also has three members: a President (who is a sitting or retired High Court Judge) and two nonjudicial members, one of whom is a woman.

National Consumer Disputes Redressal Commission The National Consumer Disputes RedressalCommission sits in New Delhi. It can entertain claims for compensation above Rs.1 crore. It also entertains appeals and revision applications from the State Commissions. The National Commission has five members including the President, who is a sitting or retired Supreme Court Judge. Appeals from the NationalCommission lie before the Supreme Court of India. These consumer disputes redressal agencies are quasi judicial agencies which means that in the true sense they are not courts) which have powers to award compensation for any loss or injury suffered by the patient due to the attending doctor ’s negligence or deficiency of service. The purpose of compensation is not to punish the doctor, but to put the patient or his legal representatives (in case the patient is dead) in the financial position in which they were prior to the loss or injury. The Act has been amended by the Consumer Protection (Amendment) Act, 2002.

Few Important Meanings Consumer Any ‘person’ who hires or avails of the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person.

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A person who receives legal service Aid by the Govt. free of cost is not a consumer under the Act. In case of death of Client who is a consumer, legal heirs (representatives) of the deceased will be considered as ‘consumer’. If the payment has been made by any person who is not a legal heir of the deceased he too will be considered as ‘consumer’.

Complainant i. a consumer ; or ii. any voluntary consumer association registered under the Companies Act, 1956 or under any other law for the time being in force; or iii. the Central Government or any State Government; or iv. one or more consumers; where there are numerous consumers having the same interests, who make a complaint. v. in case of death of a consumer, his legal heir or representative. Complaint Any allegation, in writing made by a complainant that the services hired or availed of or agreed to be hired or availed of by him suffer from deficiency in any respect.

Charge It is the fee/ payments with element of profit making motive involved. But legal Aid Given by Legal service authority do not charge fees,hence such services rendered are exempted from this Act, and such services do not have any element of profit motive.Hence the persons availing of these services are not consumers. And, theservices rendered do not fall under the Act, as there is no consideration paid for hiring of such services. Person includes,

i. a firm whether registered or not

Service of any description which is made available to potential users and includes the provision of facilities in connection with banking, financing, insurance, transport, processing, supply of electrical or other energy, board of lodging or both, housing construction, entertainment, amusement or the purveying of news or other information but does not include the rendering of any service free of charge or under a contract of personal service.

Deficiency of Service Any fault, imperfection, shortcoming or inadequacy in the quality, nature, and manner of the performance which is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service.

Consumer Court Judgments in Relation To Legal Profession M. Veerappa Vs EvelyneSqueira (AIR 1988 SC 506 P 514) Hon’ble Supreme Court of India, after adverting to the “Legal Practitioners (Fees) Act, 1926” held that an advocate who has been engaged to act is clearly liable for negligence to his client. In view of this unequivocal pronouncement of the Hon’ble Supreme Court it is established legal position that a client can file a case against his lawyer complaining of negligence of the lawyer.

Indian Medical Association Vs. V. P. Shantha (AIR 1996 SC 550) In this the Hon’ble Supreme Court has been held that not only lawyers but all the professionals like Engineers, Architects are very much within the ambit of this Act.

Srimathi Vs Union of India (AIR 1996 Mad 427)

ii. a Hindu undivided family iii. a Co-operative society iv. every other association of persons whether registered under the Societies Registration Act, 1860 or not.

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Service

In this case it has been held that the advocates are governed by the statutory enactments and the rules framed thereunder.But in our view they are not out of the net of the Consumer Protection Act. There is no provisions to enable the Bar Council to deal with the dispute between the client and the advocate in an

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action for the damages or refund of money paid.

D.K.Gandhi Vs M Mathias (2007) 3 Consumer Protection Judgment 337 (NC) The National Consumer Dispute Redressal Commission has made clear that all the professions including lawyers should come under the Consumer Protection Act. The National Commission has stated that the scope of Section 2(1)(o) of the Consumer Protection Act which defines service was very wide and well established. It covered all services except rendering services free of charges or a contract of personal service. Undisputedly, lawyers were rendering service. They were charging fees. It was not a contract of a personal service. Therefore there was no reason to hold that they were not covered up the provisions of Consumer Protection Act, 1986.

Virendra Kumar Gupta Vs Anil Kumar Jain (2011(3)CPR 48 In this case the Hon’ble National Consumer Disputes Redressal Commission held that Professionals like doctors and lawyers are expected to serve their client’s interest to the best of their professional competence and ability and failure to do so is clearly deficiency of service. The Commission in this case asked to pay Rs.1 lakh to the respondent who was lawyer for deficiency of service.

Statement of the Problem Legal (Advocacy) profession has been brought under the Consumer Protection Act, 1986, for the better protection of the interests of the Client and to assist in claiming redressal for the suffering caused due to deficiency of service rendered to their client. On the other hand, the Act has given rise to a situation of great distrust and fear among the advocates, ensuring protection from unnecessary and arbitrary complaints, is the need of the hour.But at the same time, justice must be done to the victims and a punitive sting must be adopted in deserving cases.

Guiding Principle On inclusion of Advocacy Profession under the purview of Consumer Protection Act, 1986, the Act, Vol. 6-7

1. Protects the client’s interest 2. Provides for speedy settlement of clients disputes against the lawyer Research Objectives The present doctrinal research is undertaken with the following objectives,

1. Analysis of Consumer Protection Act, 1986 with reference to advocate profession. 2. Analysis of case laws under Consumer Protection Act, 1986 related to legal services. 3. Analysis of impact of Consumer Protection Act, 1986 on legal profession. Consumer protection consists of laws and organizations designed to ensure the rights of consumers as well as fair trade competition and the free flow of truthful information in the marketplace. The laws are designed to prevent businesses that engage in fraud or specified unfair practices from gaining an advantage over competitors and may provide additional protection for the weak and those unable to take care of themselves. Consumer protection laws are a form of government regulation which aim to protect the rights of consumers. For example, a government may require businesses to disclose detailed information about products—particularly in areas where safety or public health is an issue, such as food. Consumer protection is linked to the idea of “consumer rights” (that consumers have various rights as consumers), and to the formation of consumer organizations, which help consumers make better choices in the marketplace and get help with consumer complaints.

Consumer Law Consumer protection law or consumer law is considered an area of law that regulates private law relationships between individual consumers and the businesses that sell those goods and services. Consumer protection covers a wide range of topics, including but not necessarily limited to product liability, privacy rights, unfair business practices, fraud, misrepresentation, and other consumer/ business interactions.

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Consumer protection laws deal with a wide range of issues including credit repair, debt repair, product safety, service and sales contracts, bill collector regulation, pricing, utility turnoffs, consolidation, personal loans that may lead to bankruptcy.

Methodology The present research titled “Consumer Protection Act, 1986 vis-à-visLegal Profession – An Analysis” is a Doctrinal Research. Studymaterial comprised of,

1. Consumer Protection Act, 1986 2. Consumer Protection (Amendment) Act, 2002 3. Legal Rules: i. ii.

Supreme Court and High Court Judgments National Commission Judgments

iii.

Consumer Court Judgments

iv.

Legal Journals

Extensive analysis of all the published data is done to find out the impact of Consumer Protection Act on legal Profession and protection of the interests and rights of the patients. Also, to know whether, inclusion of legal profession under the purview of Consumer Protection Act is a positive or negative step towards the wellbeing of theclient/Society. The data are collected from all the possible sources viz. Books, Bare Acts, Journals, Websites, etc.

Results The critical analysis of Hon’ble Supreme Court, Hon’ble National Commision Judgments point out that inclusion of legal profession will bring remarkable improvement in the legal Profession. Though as compared to the medical service there are not many cases on deficiency of legal service but if legal service is included in future the matter on legal deficiency of service may increase. This has given rise to a situation of great distrust and fear among the legal profession and, ensuring protection from unnecessary and arbitrary complaints. Consequence of this, inclusion of legal profession under the Consumer Protection Act, Vol. 6-7

legal professionals may act in the form of “Defensive practice.” in order to protect themselves against overzealous client’s complaint, and in doing so they may not concentrate more on his client’s case. But those who are practicing genuinely and sincerely they may be affected by this inclusion of legal profession under the Consumer Protection Act.

Discussion The events, which have been taking place in recent times, have raised doubts in the minds of members of society on the sincerity and commitment of those in the profession. In fact, deficiency of service in legal profession is a matter of major concern today not only in India but all over the world. The lawyer and client relationship is one of the most unique and privileged relationship based on mutual trust and faith. And lawyers are expected to serve their client’s interest to the best of their professional competence and ability. Consumer Protection Act, 1986, aims at simplification of procedures for seeking redressal of grievances of client. The process can be initiated without any cost and with nominal court fee.

The Legal Profession in India India has the world’s second largest legal profession with more than 1.3 million lawyers in the year 2011. The predominant service providers are individual lawyers, small or family based firms. Most of the firms are involved in the issues of domestic law and majority work under country’s adversarial litigation system. The conception of legal services as a ‘noble profession’ rather than services resulted in formulation of stringent and restrictive regulatory machinery. These regulations have been justified on the grounds of public policy and ‘dignity of profession’. The judiciary has reinforced these principles, which can be reflected in words of Justice Krishna Iyer, when he noted, Law is not a trade, not briefs, not merchandise, and so the heaven of commercial competition should not vulgarize the legal profession. However over the years courts have recognized ‘Legal Service’ as a ‘service’ rendered to the consumers and have held that lawyers are accountable to the clients in the cases of deficiency of services.

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In the case of Srimathi&Others V. Union of India (AIR 1996 Mad 427) Madras High Court held that, in view of Sec. 3 of Consumer Protection Act, 1986. Consumer redressal forums have jurisdiction to deal with claims against advocates.

Legal Service Sector The legal services sector is completely different type of services as compared to software programming, medical practice or other professional services. Though it is more or less protected from intrusion due to the fact that its traditional base is derived not only from statutes and the existence of statutory bodies but also from conservative and traditional mind set that inhibit development of cross border services supply. Even globally the legal services sector is necessarily shackled by jurisdictional constraints such of the requirement for a degree from the country where the service is to be imparted. Some local considerations apply only to certain aspects of legal services and not to others. Where the local considerations are important they must be preserved and exceptions made, must only for global market access. Thus on the one hand there is the need to be part of a global fraternity and to make beneficial commitments that promote trade in services and on the other hand there is need to preserve national interest.

Trade in Legal Services: Benefits to Consumers The emerging legal service sector is equally beneficial to all consumers of legal services, without discrimination. In the age of consumerism and competition law, consumer’s right to free and fair competition is paramount and cannot be denied by any other consideration. Trade in legal services focuses on benefits accruing to consumers from legal service sector, particularly the quality of service available with respect to particular fields. In the case of In Re SanjivDatta, Secretary, Ministry of Information and Broadcasting,the Supreme Court observed, some of the members of the profession have been adopting prospectively casual approach to the practice of the profession. They not only amount to contempt of court but to the positive disservice to the litigants. In our country often consumers are at the mercy of advocates and the system Vol. 6-7

and they resort to other service provider only in absence of choice. Secondly, the services available to consumers of India are only domestic legal service providers. Corporate legal activities are recent phenomenon in India and solution of some complicated legal issues can only be granted by professional International Law firms hence allowing them shall be beneficial for satisfaction of consumers in India. Many countries across the globe resort to Legal Process Outsourcing (LPO) and gain best of the legal services and solutions at competitive prices. Existing regulations deprive consumers to derive benefit, which ultimately effects development.

Regulations on Legal Services Trade Further it is submitted that there exists various restrictions on trade oriented legal service sector, which heavily hampers interest of consumers of legal services. Hence following points need reconsideration and fundamental charge of mindset.

1. In India there is an absolute bar on advocates advertising and soliciting for any purpose and indicating area of specialization. Restrictions on advertising by lawyers in India have resulted in a situation where consumers cannot make an informed choice from the competitive market since the information relating to service is not available to them. 2. The Bar Council of India Rules, 1975, prohibits advocates from entering into partnership or any other arrangement for sharing remuneration with any person who is not an advocate. 3. In India only natural person can practice law, as is evidenced by combined reading of Sec. 24, 29, and 33 of Advocates Act and artificial body cannot act as a lawyer. Justification for such restriction is on public policy grounds and in particular to ensure professional responsibilities and liabilities. Thus a legal service provider cannot be incorporated as a company and still continue in practice the profession of law in India, as per the provisions of Advocates Act, 1961. 4. The Requirement that Advocates enter

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into partnerships only with other Advocates has the effect of prohibiting partnerships with foreign firms. The effect to the provision is that partnerships cannot be entered into between Indian Lawyers and those of other countries. This has limited the size and growth of the profession as well as professionals and prevents them from being globally competitive. The professional regulations are in all likely hood protecting the weak producers of professional services at the cost of information being made available to consumers opening up to legal service sector to foreign law firms and its interaction with growing arena of international trade shall be beneficial for development of the sector. The Apex Court has warned that if the present trend is not checked it is likely to lead to a state where the system is found wreaked from within before it is wreaked from outside.

legal services would develop the profession qualitatively. The Raghavan Committee has summed up the effect of the existing regulatory system in professional services. The legislative restrictions in terms of law and self regulation have the combined effect of denying opportunities and growth of professional firms, restricting their desire and ability to compete globally, preventing the country from obtaining advantage of India’s considerable expertise and precluding consumers from opportunity on free and informed choice.

References 1.

Barowalia, D. J. (2012). Commentary on the Consumer Protection Act. Delhi: Universal Law Publishing Company.

2.

Universal’s. (2014). Consumer Protection Act, 1986. Delhi: Universal Law Publishing Company.

Cases Referred Conclusion Indian society is experiencing a growing awareness regarding deficiency of legal service. This trend is clearly discernible from the recent spurt in litigation concerning legal professional or establishment of liability, claiming redressal for the suffering caused due to legal deficiency.We have to be thankful of Hon’ble Supreme Court and Hon’ble National Consumer Disputes Redressal Commission as it held that even if disciplinary action is dismissed by a State Bar Committee against a lawyer, even then a complaint is maintainable before consumer forum against the same lawyer.

M. Veerappa Vs.EvelyneSqueira (AIR 1988 SC 506 P 514)

2.

Indian Medical Association Vs. V. P. Shantha (AIR 1996 SC 550)

3.

Srimathi Vs. Union of India (AIR 1996 Mad 427)

4.

D.K.Gandhi Vs. M. Mathias (2007) 3 CP J 337 (NC)

5.

Bar of Indian Lawyers Vs. D.K. Gandhi passed on 13.04.2009 by SC

6.

Virendra Kumar Gupta Vs. Anil Kumar Jain (2011(3)CPR 48

Websites

Consumer Protection Act, 1986, aims at simplification of procedures for seeking redressal of grievances of client. The process can be initiated without any cost and with nominal court fee. Opening up of legal services sector is going to lead to a flow of expertise in sectors where local firms and lawyers are deficiently delivering services. Accepting ‘trade’ facet of

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1.

June 2015

1.

http://ncdrc.nic.in/1_1_2.html

2.

http://chdconsumercourt.gov.in/ consumerprotectionact.pdf

3.

http://legalperspectives.blogspot.in/2010/05/ lawyers-liable-for-deficiency-in.html

4.

http://www.legallyindia.com/Bar-BenchLitigation/stop-press-katju-speaks-sense-callsfor-accountability-of-lawyers-via-consumerprotection-act

5.

http://blogs.consumerawakening.com/lawabout-lawyers-liability-to-consumers/

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APPENDIX

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3 Buying Behavior of Financial Credits and its Impact on Jaggery Productivity in Rural Karnataka Sanjeev Ingalagi* & Dr. Rajeshkumar. K*

ABSTRACT

Financial credit service accessibility has been an important option for alleviating poverty and economic development. Recently, Indian government has been actively pursuing various policy options to increase credit service accessibility. Financial credit accessibility minimizes the social omission and enhances the economic growth. In this article, the impact of credit on jaggery productivity was assessed in rural villages of Karnataka state. Multi-stage sampling method was used to select 140 respondents. Data used in this study were gathered from traditional jaggery producers that have access and no access to credit with the aid of interview schedule; the analytical techniques used were descriptive statistics, Logistic and multiple regression models. It was revealed that about 20% of the jiggery producers used loans from co-operative societies while 55% sourced their funds from personal savings. The model has a sigma square (ó2) value of 42.741 P 60 Mean age = 46

Frequency

Percentage (%)

23 34 58 18 7

16.7 24.3 41.4 12.9 5

77 28 15 14 6

55 20 10.7 10 4.29

32 94 19 5

22.9 67.1 13.6 3.6

124 16

88.6 11.4

21 29 84 4 2

15 20.7 60 2.9 1.4

14 81 36 9

10 57.9 25.6 6.79

Source of credit Personal savings Cooperatives Banks Friends and relatives Money lenders Household size 1—4 5—9 10—14 >=15 Marital status Married Single Educational status (years) No formal education 1—6 7—9 10—12 >=13 Mean =7 Experience (years) 1—5 6—10 11—15 >=15 Source: Field Survey, (2014) Vol. 6-7

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Buying Behavior of Financial Credits and its Impact on Jaggery Productivity in Rural Karnataka

characterized with a large family size. This creates an opportunity for the producers to have access to cheap family labour. On the contrary, family might incur high expenses on consumption hence have negative effect on the business which can bring about abruption in the business if the producer could no longer provide the required funds for the smooth running of the business. Table-3 showed that Jaggery producers that sourced their finance internally from personal savings accounted for fifty-five (55) percent while 20% obtained loans from co-operative societies. About 10.7 percent of the jaggery producers were able to obtain bank loans as due to their lack or limited possession of collateral securities. Meanwhile, some of the jaggery producing farmers were able to secure loan from a combination of bank loans, personal savings and co-operative societies’ loans. Due to a weak financial base, most of the jaggery producing farm operators is constrained in obtaining internal source of finance from owners’ equity (personal saving). In other to solidify their financial base with assured increased output level additional sources of funds are therefore required for the jaggery producers.

23

Factors of Credit use on Jaggery Productivity The effect of credit used by the jaggery producers was analysed by the Logistic regression model. It was used to determine the parameters of the conditional probability of those that have access to the required level of loans and the marginal changes in explanatory variables on the financial status of the jaggery units. The jaggery producers were classified into to groups of those with loan and those without loan. Table 4 presents the distribution of the estimated regression parameters and diagnostic statistics by using the Maximum Likelihood Estimation (MLE) technique. From the results, it was shown that coefficients of seven variables had significant influence on the jaggery productivity. The value for the sigma square (ó2) was 53.384, with a p-value of less than 0.01 and log likelihood function of -47.384. The model displays a good fit and the test link correctly specified since the sigma square was statistically significant. In addition, the model was suitable for parallelism assumption since the parameters in the subsequent equations are the same. The following variables with significant co-

Table 4: Factors that Determine Credit Access on Jaggery Productivity: Logit Model Variables

Marginal probability coefficients

Standard error

0.068 6.281* 7.164*** 3.423** 1.065 2.327 6.317** 5.473*

0.718 0.054 0.006 0.031 0.437 0.054 0.077 0.063

Age (X1) Gender (X2) Household size (X3) Educational level (X4) Experience (X5) Extension Agent (X6) Sources of credit (X7) Amount borrowed (X8)

Source: Field Survey (2014) Chi square value ó2 = 42.741 P0

Hypothesis 3: There are factors other than consumption which can measure risk Null hypothesis: Consumption beta is a complete measure of systematic risk of an asset 0:

2

=0

Alternate hypothesis: Consumption beta is not a complete measure of systematic risk of an asset 1:

2

≠0

index (Urban Industrial Workers) averaged to a quarterly series. All the rates are annualised and deflated using CPI (IW). Marshall and Parekh (1999) suggest that predictions of consumption-based models for the short-run movements of asset returns are non-robust to extremely small perturbations. Parker and Julliard (2005) with Fama-French portfolios and using GMM have shown that the long-term measure (horizon of 9 to 11 quarters) provides a better accounting of the equilibrium risk of different stocks than the contemporaneous measure does. However we faced a problem in data availability, the highest frequency available for consumption data was quarterly since 1996-97, and annual figures were available since 1950s. For the annual data based study, the corresponding stock prices were unavailable. Stock price availability is since 1991, hence an annual data based time series regression would have earned 20 data points and the results could have been less robust, instead we have opted for quarterly dataset which yields us 65 time series data points. Use of individual stocks is to avoid data snooping biases arising due to portfolio formation, but there are certain disadvantages as well. Moreover we have been following the methodology suggested in Cochrane (2005), which promotes the use of individual stocks. We have selected stocks which are frequently traded and represent the major volume in total stock trade, our selection criteria was to study stocks of BSE 100 list which have been trading since 1996. We thus studied 56 such stocks. The expected returns of the stock are based on averages of daily prices for the quarter. The returns were deflated and annualized and then converted to risk premium for the study.

Results

Data Treatment Consumption growth is calculated by quarterly reported private final consumption figures since 1996-97. Per capita figures are obtained using annual population projections of census of India, interpolated for quarterly data. Risk free rate of return is calculated by reported rates of T-bills on monthly frequency by RBI. Inflation rate is calculated using monthly CPI Vol. 6-7

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We have reported two pass regression estimates for consumption betas with variance of time series regression errors. As suggested by theory which says that the constant or zerobeta excess return should be zero, we can run the cross-sectional regression with or without an intercept. However we may have efficient estimates but it’s a trade off with robustness; hence we have reported both kinds of results.

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Table1 rejects hypothesis

0:

0

= 0 , and

rejects the possibility of zero beta asset or suggests that model is not correctly specified, but this condition does not qualify to reject relationship of consumption beta with risk premium of a stock. We also have that

0:

1

≤ 0 , is rejected at

significance level of 0.001 or we can say consumption beta is a significant measure of risk.

We also have that consumption beta is not the sole measure of the risk as 0 : 2 = 0 , is strongly rejected. The overall model is statistically significant as suggested by F statistic with explanatory power of 62.9%, but this explanatory power is not solely contributed by consumption beta. When we force the intercept to be zero in the above model, as this supports the theory, by Table-2 we can report that explanatory power of model improves with the F statistic, and hypothesis Hbo and H co are also rejected.

Table 1: Cross-sectional Regression of the average risk premium with constant, consumption beta and variance of residuals of time series regression Regression Statistics Multiple R

0.793261

R Square

0.629263

Adjusted R Square

0.615273

Standard Error

9.650763

Observations

56

ANOVA df Regression

SS

MS

F 44.97919

2

8378.474

4189.237

Residual

53

4936.273

93.13722

Total

55

13314.75

Coefficients

Standard Error

Intercept

12.46618

Beta Time Series Variance

t Stat

P-value

1.798907

6.929865

5.85E-09

15.69257

4.73004

3.317641

0.001645

0.000334

3.86E-05

8.650718

1.04E-11

Significance F 3.8E-12

Table 2: Cross-sectional Regression of the average risk premium with constant, consumption beta and variance of residuals of time series regression, when intercept (zero beta risk premium) is forced to be zero Regression Statistics

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Multiple R

0.862977

R Square

0.74473

Adjusted R Square

0.721484

Standard Error

13.20003

Observations

56

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455

ANOVA df

SS

MS

F

Significance F

Regression

2

27449.98

13724.99

78.77022

1.33E-16

Residual

54

9409.004

174.2408

Total

56

36858.98

Coefficients

Standard Error

t Stat

P-value

Intercept

0

Beta

36.87519

4.937213

7.468827

7.14E-10

Time Series Variance

0.000505

4.06E-05

12.45955

1.63E-17

These results need to be cautiously analyzed, as there is a strong possibility that introduction of might have induced a relationship between

consumption beta and risk premium, though truth may be opposite. Hence we look at the correlation matrix to investigate further.

Table 3: Correlation Matrix Average Risk Premium

Beta

Average Risk Premium

1

Beta

-0.325252669

1

0.74314877

-0.703154126

Time Series Variance (

)

The above matrix shows negative relationship between Average risk premium and Beta, negative correlation of beta and time series error variance could be the reason for spurious results in table 1 and 2, to be able to conclude correctly, we shall now produce simple two

Time Series Variance

1

pass regression estimates without using time series regression residual variances. Presently our focus is to test only hypothesis 1 and hypothesis 2. We ignore our propositions in hypothesis 3. Table-4 has detailed results.

Table 4: Cross-sectional Regression of the average risk premium with constant and consumption beta Regression Statistics Multiple R

0.325253

R Square Adjusted R Square

0.105789

Standard Error

14.84874

Observations

56

0.08923

ANOVA

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df

SS

MS

F

Significance F

Regression

1

1408.558

1408.558

6.388452

0.014446

Residual

54

11906.19

220.485

Total

55

13314.75

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Coefficients

Standard Error

t Stat

P-value

Intercept

22.43214

2.125771

10.55247

9.85E-15

Beta

-13.0793

5.174699

-2.52754

0.014446

As we proceeded in previous case, we would force the intercept (zero beta risk premium) to be zero and run the regression again. We

expect to have improvements in the model as it is forced to follow the theory. Table-5 summarizes the results.

Table 5: Cross-sectional Regression of the average risk premium with constant and consumption beta, when intercept or constant (zero beta risk premium) is forced to be zero Regression Statistics Multiple R

0.104272

R Square Adjusted R Square

0.010873

Standard Error

-0.00731 25.7464

Observations

56

ANOVA df

Regression

SS

1

400.7517

400.7517

Residual

55

36458.23

662.8769

Total

56

36858.98

Coefficients

Standard Error

Intercept Beta

F

0.604564

t Stat

P-value

0.777537

0.440174

Significance F

0.440235

0 6.511969

8.375121

Table 4 and 5 are evident to reject the logical and significant relationship of CCAPM beta with average risk premium when hypothesis 3 is ignored. Table 4 presents a significant relationship of CCAPM beta but the direction of relationship rejects the applicability of CCAPM in Indian context, the hypothesis of model specification is also rejected by Table-4.

Conclusion The purpose of this study was to examine CCAPM for stocks listed since 1996 and belonging to BSE 100 index. We conclude that CCAPM fails in Indian scenario; the reasons may be high inflation, seasonal consumption Vol. 6-7

MS

patterns and high volatility of stock markets. Further studies with longer horizon low frequency data, with various improved versions of CCAPM could lead different results and it is definitely a matter of further research for Indian context. This paper rejects CCAPM for Indian context and suggests investors to avoid prediction of expected returns based on plain consumption betas.

References Abel, Andrew B., 1990. “Asset prices under habit formation and catching up with the Joneses”, American Economic Review Papers and Proceedings 80, pp.38-42.

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A Study of Consumption Based Capital Asset Pricing Model (CCAPM) on Indian Stock Market Bin Li, 2010, “Consumption and Stock Returns in Australia: A Revisit”,International Research Journal of Finance and Economics ISSN 14502887 Issue 50. Bin Li, 2010, “Testing world consumption asset pricing models”, European Journal of Economics, Finance and Administrative Sciences, ISSN 1450-2887 Issue 22. Bin Li, Benjamin Liu, 2010, “Return Predictability and State Variables in Consumption-Based CAPMs: International Perspectives”, International Research Journal of Finance and Economics ISSN 1450-2887 Issue 51. Breeden, Douglas t., Michael r. Gibbons, and Robert h. Lichtenberger, 1989, “Empirical tests of the consumption-oriented CAPM”, The journal of finance 46, 231-262. Campbell J., A. Lo and MacKinlay A.C., 1997, The Econometrics of Financial Markets (Princeton University Press, Princeton NJ) Cochrane, john h., 2005, Asset Pricing: Revised Edition (Princeton University Press, Princeton NJ) Engsted Tom, 1998, “Evaluating the Consumption-Capital Asset Pricing Model using Hansen-Jagannathan Bounds: Evidence from the UK”, International Journal of Finance and Economics 3: 291-302 Epstein, L. and Zin, S., 1991, “Substitution, Risk Aversion and the Temporal Behavior of Consumption and Asset Returns: An Empirical Analysis”,Journal of Political Economy, Vol. 99, pp. 263–286. Faff, R.W. and B.R. Oliver, 1998.”Consumption versus market betas of Australian industry portfolios”, Applied Economic Letters 5, pp.513-517.

regime shifts, and the Japanese economy”, Studies In Economics And Finance, Vol. 20 iss: 1 pp. 35 - 50 Hansen, L.P. and Jagannathan, R., ‘Implications of Security Market Data for Models of Dynamic Economies’, Journalof Political Economy, 99 (1991), 225-62 Hansen, Lars Peter, 1982. “Large sample properties of generalized method of moments estimators”, Econometrica 50, pp.1029-1054. Hyde Stuart, Cuthbertson KfithAndNitzsche Dirk, “Resuscitating the CCAPM: empirical evidence from France and Germany”, International Journal Of Finance And Economics, 10: 337-357. Hyde Stuart, Sherif Mohamed, 2005, “Consumption asset pricing models: evidence from the UK”, The Manchester School Vol 73 No. 3. Kirch, G.; Soares-Terra, P.R.; Wickstrom-Alves, T. (2009), “An empirical test of the consumption-based asset pricing model (CCAPM) in Latin America”,EsicMarket, 132, pp. 137-168. Marshall David A. and .Parekh Nayan G, 1999, “Can Costs of Consumption Adjustment Explain Asset Pricing Puzzles?”, The Journal of Finance, Vol. 54, No. 2, pp. 623-654. Parker Jonathan A., Julliard Christian, 2005, “Consumption Risk and the Cross Section of Expected Returns”, Journal of Political Economy, Vol. 113, No. 1, pp. 185-222. Samih Azar, (2011),”Retesting the CCAPM Euler equations”, International Journal of Managerial Finance, Vol. 7 Iss: 4 pp. 324 – 346. V.

Fama, Eugene F., and James D. MacBeth. 1973. “Risk, Return, and Equilibrium: Empirical Tests.”J.P.E. 81 (May/June): 607–36. Fama, Eugene F., and Kenneth R. French. 1992. “The Cross-Section of Expected Stock Returns.”J. Finance 47 (June): 427–65. Greene, William H., 1997, Econometric Analysis (Prentice Hall, New Jersey). H.J. Smoluk, E. Tylor Claggett, Jr., 2002, “The consumption based capital asset pricing model,

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Reddy Dondeti, Bidhu B. Mohanty, WoldZemedkun, 2011 “Empirical estimation of the parameters of the consumption-based capital asset pricing model with 20 different market indices”, Journal Of Academy Of Business And Economics, volume 11, number 4.

Virk Nader Shahzad, 2012, “Equity Premium Puzzle: A Finnish Review”, International Journal of Economics and Finance Vol. 4, No. 2. YogoMotohiro, 2006, “A Consumption-Based Explanation of Expected Stock Returns”, The Journal of Finance, Vol. 61, No. 2, pp. 539-580.

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59 A Study of Relationship between Demographics and Emotional Biases of Individual Investors Abhishek Sachan*

ABSTRACT

Investors are not rational they have emotional biases which limit their ability to take optimal investment decisions. This paper investigates association of emotional biases like endowment, self-control, optimism, regret aversion, loss aversion and status quo, with demographic factors like age, marital status, gender, profession, income, education and rural/urban residence. Test of independence using Chi Square is applied on a sample of 321 responses and results with p-value less than 10% are reported.

1. Introduction Behavioral finance challenges traditional finance and presents a newer dimension to world of investments. It recognizes the fact that investors are not always rational and have limitations in taking investment decisions due to emotional biases and cognitive errors. Keynes (1936) proposes that no human can be fully informed of all circumstances and maximize his expected utility by determining his complete, reflexive, transitive, and continuous preferences over alternative bundles of consumption goods at all times.Statman (1999) suggests, “Standard finance is the body of knowledge built on the pillars of the arbitrage principles of Miller and Modigliani, the portfolio principles of Markowitz, the capital asset pricing theory of Sharpe, Lintner, and Black, and the option pricing theory of Black, Scholes, and Merton.” Pompian (2006) shares that the traditional idea of rational economic man was on the bases of these three underlying assumptions –

 Perfect Rationality –Humans have ability to reason and make beneficial judgments *

 Perfect Self-Interest – Individuals maximize their own interest, philanthropy need not exist.  Perfect Information – Individuals have perfect information/knowledge to make decisions As the assumptions deviated from reality, Statman (1999) comments that standard finance people are modelled as “rational,” whereas behavioral finance people are modelled as “normal”. To this concept, Raiffa (1997) adds that behavioral finance tries to understand a “real” person’s thought process in decision making. Raiffa discusses three approaches to the analysis of investment decisions:

 Normative Analysis – It is concerned with the rational and ideal solutions  Descriptive Analysis – Concerned with the manner in which real people actually make decisions  Prescriptive Analysis – Concerned with Practical advice and tools that might help people achieve results approximating to normative analysis

PhD Fellow at Institute of Management, Nirma University.

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Traditional finance may be considered more of normative, Behavioral finance as more of descriptive and efforts to use behavioral finance in practice as prescriptive. Simon (1957) introduced the terms bounded rationality and satisfice to describe the phenomenon where people gather some (but not all) available information, use heuristics to make the process of analyzing the information tractable, and stop when they have arrived at a satisfactory, not necessarily optimal, decision.Simon (1996) introduced the term ‘satisfice’ that combines “satisfy” and “suffice” and describes decisions, actions, and outcomes that may not be optimal, but they are adequate. Simon (1991) - In contrast to rational economic man making decisions according to expected utility theory, Simon describes individuals who are satisfied to gather what they deem to be enough information, who will process the information in ways they deem adequate, who are prone to identify with sub-goals and limited objectives rather than try to achieve an optimum, and who will stop when they have a decision that fits within parameters they deem satisfactory. Adding to how investors chose their investments, Kahneman, Daniel and Amos Tversky (1979) proposed Prospect Theory -In prospect theory, there are two phases to making a choice: an early phase in which prospects are framed (or edited) and a subsequent phase in which prospects are evaluated and chosen.

 The framing (editing phase) consists of using heuristics to do a preliminary analysis of the prospects. More specifically, people decide which outcomes they see as economically identical and then establish a reference point to consider where these prospects rate. Outcomes below the reference point are viewed as losses, and those above the reference point are gains.  In the second phase, the edited prospects are evaluated and the prospect of highest perceived value is chosen. During the editing or framing stage, alternatives are ranked according to a basic heuristic that was identified and chosen by the decision maker. Vol. 6-7

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 Depending on the number of prospects, there may be up to six operations in the editing process: codification, combination, segregation, cancellation, simplification, and detection of dominance. In the process, individuals identify their options, and choice can be affected by how that identification is done. The ultimate purpose behind editing is to simplify the evaluation of choices available by reducing the choices to be more thoroughly evaluated. People use editing when making choices because of cognitive constraints. The above theories and framework suggest that it is practically nearly impossible to have perfect decisions by human beings due to their limited ability to gather and process information, also due to the way an individual thinks and develops his heuristics. Literature suggests various investor biases which affect investment decisions, and some literature also connects biases with investor profile. This paper targets to study relationship of individual’s emotional biases and demographics. The proposed study is supposed to help portfolio managers in client consultation. Investor’s demographic profile isknown easily as compared to behavioral biases. If the study produces significant and strong relationship, the ability to counsel particular client by a portfolio manager may increase as now he may address behavioral biases via quick knowledge of investor demographics.

2. Literature Review Behavioural Finance Micro deals with biases of market participants, as in this research, the focus of study are individuals, we refer to Pompian, Michael (2006) It is provided in his work that behavioural biases fall into two broad categories, cognitive and emotional. Cognitive biases stem from faulty reasoning and limited ability to collect and process informationwhile emotional biases originate from impulse or intuition rather than conscious calculations. Below is the brief review providing definition and base researches on emotional biases:

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Bias

Definition

Author

Findings

Endowment

People tend to state minimum selling prices for a good that exceed maximum purchase prices that they are willing to pay for the same good

Samuelson, William, and Richard Zeckhauser. (1988)

Investor are susceptible to endowment bias which results to status quo bias

Self-Control

People fail to act in pursuit of their long-term, overarching goals because of a lack of self-discipline

Shefrin, Hersh, and Richard Thaler. (1998)

Self-control plays a key role in the descriptive model of households savings as per behaviorally explained life cycle hypothesis

Optimism

People are overly optimistic for markets, economy and positive performance of investments

Lütje, Torben; Menkhoff, Lukas. (2007)

Equity managers invest disproportionately close to home as they are unduly optimistic about market prospects in their own geographic areas

Loss Aversion

people tend to strongly prefer avoiding losses as opposed to achieving gains

Kahneman, Daniel, and Amos Tversky. (1979)

Individuals show risk seeking behavior in the domain of losses and risk avoidance during gains

Regret Aversion

People tend to avoid making decisions as they fear that the decision may turn out poor

Koening, J. (1999) lead to herding beha-

Regret aversion may vior, in order to avoid responsibility of loss, people may invest in similar fashion as others

Status Quo

People are generally more comfortable keeping things the same than with change and thus do not necessarily look for opportunities

Further is the literature that relates various demographic parameters to investors biases or which hints for a connection between Author

Year

Cohn, Richard A., et al.

1975

Lewellen, Wilbur G., Ronald C. Lease, and Gary G. Schlarbaum

1977

Warren, William E.,

1990

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Samuelson, William, and Richard Zeckhauser. (1988)

Status quo effects account for diverse economic phenomena: the difficulty of changing public policies, preferred types of marketing techniques, and the nature of competition in markets

demographics and investor behavior. The literature has been summarized and arranged chronologically in the below table:

Related Conclusions of Study

Sample Size

Suggests a strong pattern of decreasing relative risk aversion; as wealth increases, a higher proportion of the total is committed by the individual involved to risky assets Strong indications of systematic changes in investment objectives and risk preferences across age brackets, income classes.

588

Investor in the same age or

152

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Statistical tools and Methodology Descriptive Statistics and Regression analysis

Cross Classification contingency table, preliminary regression Multiple

Country US

US

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Warren, William E., Robert E. Stevens, and C. William McConkey

1990

Gupta, L. C., Jain, N. and Kulshreshtha, Y.

1994

Koreto, Richard J.

2001

Rajarajan.V

2002 2003

NASD Investor Education Foundation

2006

Feng, Lei, and Mark S. Seasholes.

2008

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Investor in the same age or income categories may have totally different investment needs, which can be fully analyzed with the help of lifestyle analysis. Not only lifestyle dimension help differentiate active/passive investor behavior and light and heavy investors in particular investment. Share ownership is largely an Urban phenomenon.

Religious values affect investing, religious investors may be more self-disciplined Demographic profile is strongly associated with risk bearing capacity Locus of Control had positive relationship with expected rate of return, risk bearing capacity, loss avoidance behavior and inverse relationship with the portfolio choice Women prefer less risk than men when it comes to money matters, A majority of the women reviewed performance of their investments over the previous twelve months, Women are less confident than men about their financial futures, Women find investing more stressful and less exciting than men. Males and females exhibit similar behavior along three key dimensions: (1) The degree of home bias is similar across genders – both men and women over-weight local stocks by 9% relative to the market portfolio. (2) The portfolio performances of males and females are not statistically different. (3) Men appear to trade more intensively than women before controlling for factors such as number of stocks held and number of trading rights. After controlling for these factors, there is no significant difference in trading intensity.

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Multiple Discriminant Analysis

US

165819 sharehol ders and 63157 debentur e holders 1000

Descriptive Statistics

India


US

405

Chi Square Test Multiple regression analysis

India

911


US

51218

Survival Analysis

China

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Mittal, Manish, and R. K. Vyas

2009

Mittal, Manish

2010

Parashar, Neha

2010

Hood, Matthew and Nofsinger, John R. and Varma, Abhishek

2013

Shalini Kalra Sahi

2013

P.Bhanu, Sireesha, and Ch. Sree Laxmi

2013

Income was found to be a significant factor impacting the overconfidence level, tendency to overreact and loss/regret avoidance, but has no significant effect on self-attribution bias, framing effect, and tendency to use purchase price as reference point The study indicates that business class investors are more prone to cognitive biases while salaried class investors are more prone to biases which are outgrowth of framing effect and prospects theory The investment choice depends on and is affected by the demographic variables such as gender, age, income, education, occupation as well as various personality types such as conservative and medium conservative,moderate, medium aggressive and aggressive Women, younger investors and democrats, tilt their portfolios towards stocks with progressive labor policies for women and minorities, while gays/lesbians are less likely to own sin stocks. Christians invest less in stocks with progressive labor policies for gays and lesbians, Catholics are more likely while Mormons are less likely to own a sin stock, social characteristics that are important to one investor may not be important to another socially conscious investor. Factors such as age, marital status, occupation, workexperience, income, saving rate, nature of household accommodation and investment tenure, impact the individual’s financial satisfaction levels Gender, age and friends are mostly influencing the investment decisions of the respondents

428

ANOVA

India

428

ANOVA

India

100

Descriptive Statistics and Factor Analysis

India

1700

Linear Regression with clustered standard error approach

US

374

ANOVA

India

165

Regression Analysis

India

3. Research Methodology

a. Age

Based on above literature review, following demographic variables have been studied in this study:

b. Income

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c. Gender d. Rural/Urban

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f. Education

response indicated bias then it was marked as 1else it was marked as 0.

g. Profession

4. Results and Findings

e. Marital Status

Structured Data Collection i.e. formal questionnaire was prepared where questions were asked in a prearranged order. The purpose of research was disclosed to the respondents so the approach is direct. Most of the questions are fixed alternative questions as the respondents are required to select from predetermined set of responses. Such a design has following disadvantages:

1. Respondents may not be willing to disclose sensitive information 2. Fixed response alternatives may cause loss of validity for certain types of data such as beliefs and feelings The questionnaire was pretested in three rounds with 15 respondents in each round. At every stage improvements were made based upon the feedback of respondents. The set of 20 question items obtained from literature for identifying emotional biases were reduced to 7. These question items were adapted for Indian scenario and the language was simplified for the local respondents. Final questionnaire was then addressed personally as well as through google forms. The questionnaire was addressed to individuals who had earning source(s); the sample size was calculated using general guideline of 10:1 subject item ratio. As the questionnaire had 14 items, so the sample size was taken to be 140. Based upon response rate of 30% in pretesting round three, the questionnaire was sent to 467 respondents. Respondents were selected based on convenience; a regular follow up was taken with respondents and 355 responses were received. After checks, 321 responses were considered for analysis. The respondents belonged to Ahmedabad and near areas. The relationships between the variables were tested using Chi Square test of independence, as variables were measured on nominal and ordinal scales. Age and Income have been converted into categories and measured in ordinal scale, rest all variables were on nominal scale. Based upon the responses, if a particular

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Using Chi Square test of independence, significant relationships have been investigated. A summary of results with pvalue less than or equal to 10% has been reported in the end. Table 1: Relationship of Demographic variables with Endowment Bias 1.1 Endowment Bias with Age Age

Bias Yes

Bias No

Total

Upto 25

59

57

116

25-35

53

52

105

35-45

24

23

47

45 and above

35

18

53

Total

171

150

321

chi-sq

p-value

x-crit

Pearson’s

4.162095

0.24448

7.81473

Max likelihood

4.240879

0.2366

7.81473

CHI-SQUARE

1.2 Endowment Bias with Gender Row Labels

Bias Yes

Bias No

Total

Female

19

18

37

Male

152

132

284

Total

171

150

321

chi-sq

p-value

x-crit

Pearson’s

0.061911

0.8035

3.84146

Max likelihood

0.061834

0.80362

3.84146

CHI-SQUARE

1.3 Endowment Bias with Rural/Urban Row Labels

Bias Yes

Bias No

Total

Rural

41

34

75

Urban

130

116

246

Total

171

150

321

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International Journal of Management & Behavioural Sciences (IJMBS) CHI-SQUARE

CHI-SQUARE chi-sq

p-value

x-crit

Pearson’s

0.076577

0.78199

3.84146

Max likelihood

0.07665

0.78189

3.84146

chi-sq

p-value

x-crit

Pearson’s

2.621008

0.26968

5.99146

Max likelihood

2.628381

0.26869

5.99146

1.4 Endowment Bias with Income

1.7 Endowment Bias with Profession

Row Labels (Rs/Annum)

Bias Yes

Bias No

Total

Below 2 Lac

58

40

98

Between 2 Lac and 4 Lac

60

61

121


38

39

77

7 Lacs and Above

15

10

25

Total

171

150

321

Row Labels

Bias Yes

Bias No

Total

Agriculturist

17

6

23

Owner of Business

43

44

87

Private Sector Employee

88

79

167

Public Sector Employee

23

21

44

Total

171

150

321

chi-sq

p-value

x-crit

Pearson’s

4.493703

0.21285

7.81473

Max likelihood

4.69529

0.19552

7.81473

CHI-SQUARE

CHI-SQUARE chi-sq

p-value

x-crit

Pearson’s

2.966237

0.39686

7.81473

Max likelihood

2.978181

0.395

7.81473

Table 2: Relationship of Demographic variables with Self Control Bias

1.5 Endowment Bias with Marital Status Row Labels

2.1 Self-Control Bias with Age

Bias Yes

Bias No

Total

Married

118

81

199

Age

Unmarried

53

69

122

Total

171

150

321

CHI-SQUARE chi-sq

p-value

x-crit

Pearson’s

7.636609

0.00572

3.84146

Max likelihood

7.649196

0.00568

3.84146

1.6 Endowment Bias with Education Row Labels

Bias Yes

Bias No

Total

Schooling and Diploma

46

31

77

Graduation

Bias Yes

Bias No

Total

Upto 25

55

61

116

25-35

60

45

105

35-45

23

24

47

45 and above

19

34

53

Total

157

164

321

chi-sq

p-value

x-crit

Pearson’s

6.57024

0.0869

7.81473

Max likelihood

6.63316

0.0846

7.81473

CHI-SQUARE

2.2 Self-Control Bias with Gender Row Labels

Bias Yes

Bias No

Total

83

72

155

Female

17

20

37

PG + CA + Doctorate 42

47

89

Male

140

144

284

Total

150

321

Total

157

164

321

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A Study of Relationship between Demographics and Emotional Biases of Individual Investors CHI-SQUARE

Pearson’s Max likelihood

CHI-SQUARE chi-sq

p-value

x-crit

0.147

0.7014

3.84146

0.14719

0.7012

3.84146

chi-sq

p-value

x-crit

Pearson’s

1.70095

0.1922

3.84146

Max likelihood

1.70372

0.1918

3.84146

2.3 Self-Control Bias with Rural/Urban Row Labels

Bias Yes

2.6 Self-Control Bias with Education

Bias No

Total

Rural

37

38

75

Urban

120

126

246

Total

157

164

321

CHI-SQUARE chi-sq

p-value

x-crit

Pearson’s

0.00703

0.9332

3.84146

Max likelihood

0.00703

0.9332

3.84146

2.4 Self-Control Bias with Income

Row Labels

Bias Yes

Bias No

Total


29

48

77

Graduation

83

72

155

PG + CA + Doctorate

45

44

89

Total

157

164

321

chi-sq

p-value

x-crit

Pearson’s

5.33008

0.0696

5.99146

Max likelihood

5.37696

0.068

5.99146

CHI-SQUARE

Row Labels (Rs/Annum)

Bias Yes

Bias No

Total

Below 2 Lac

41

57

98

Row Labels


60

61

121

Agriculturist


40

37

77

Owner of Business

7 Lacs and Above

16

9

25

Total

157

164

321

chi-sq

p-value

x-crit

Pearson’s

4.54691

0.2081

7.81473

Max likelihood

4.58294

0.205

7.81473

2.7 Self-Control Bias with Profession Bias Yes

Bias No

Total

15

8

23

44

43

87


80

87

167


18

26

44

Total

157

164

321

chi-sq

p-value

x-crit

Pearson’s

3.73902

0.2911

7.81473

Max likelihood

3.77961

0.2863

7.81473

CHI-SQUARE CHI-SQUARE

Bias Yes

Bias No

Total

Table 3: Relationship of Demographic variables with Self Control Bias

Married

103

96

199

3.1 Optimism Bias with Age

Unmarried

54

68

122

Age

Total

157

164

321

2.5 Self-Control Bias with Marital Status Row Labels

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Bias Yes

Bias No

Total

Upto 25 25-35 35-45 45 and above

71 63 36 36

45 42 11 17

116 105 47 53

Total

206

115

321

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CHI-SQUARE

3.5 Optimism Bias with Marital Status


chi-sq

p-value

x-crit

4.71848 4.92548

0.1936 0.1773

7.81473 7.81473

Row Labels

Bias Yes

Bias No

Total

Married

130

69

199

Unmarried

76

46

122

Total

206

115

321

chi-sq

p-value

x-crit

Pearson’s

0.30233

0.5824

3.84146

Max likelihood

0.30151

0.5829

3.84146

3.2 Optimism Bias with Gender Row Labels

Bias Yes

Bias No

Total

Female

14

23

37

Male

192

92

284

Total

206

115

321

CHI-SQUARE

CHI-SQUARE chi-sq

p-value

x-crit

Pearson’s

12.6169

0.0004

3.84146

Max likelihood

12.0342

0.0005

3.84146

3.3 Optimism Bias with Rural/Urban Row Labels

Bias Yes

Bias No

Total

Rural

59

16

75

Urban

147

99

246

Total

206

115

321

3.6 Optimism Bias with Education Row Labels

Bias Yes

Bias No

Total


59

18

77

Graduation

92

63

155

PG + CA + Doctorate

55

34

89

Total

206

115

321

chi-sq

p-value

x-crit

Pearson’s

6.97508

0.0306

5.99146

Max likelihood

7.30678

0.0259

5.99146

CHI-SQUARE

CHI-SQUARE chi-sq

p-value

x-crit

Pearson’s

8.94017

0.0028

3.84146

Max likelihood

9.49267

0.0021

3.84146

3.7 Optimism Bias with Profession

3.4 Optimism Bias with Income Row Labels (Rs/Annum)

Bias Yes

Bias No

Total

Row Labels

Bias Yes

Bias No

Total

Agriculturist

20

3

23

Owner of Business

53

34

87

Below 2 Lac

61

37

98


78

43

121


103

64

167


47

30

77

30

14

44

7 Lacs and Above

20

5

25


Total

206

115

321

Total

206

115

321

chi-sq

p-value

x-crit

Pearson’s

6.35373

0.0956

7.81473

Max likelihood

7.24754

0.0644

7.81473

CHI-SQUARE CHI-SQUARE chi-sq

p-value

x-crit

Pearson’s

3.21569

0.3596

7.81473

Max likelihood

3.47478

0.324

7.81473

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Table 4: Relationship of Demographic variables with Loss Aversion Bias 4.1 Loss Aversion Bias with Age Age

Bias Yes

Bias No

Total

4.4 Loss Aversion Bias with Income Row Labels (Rs/Annum)

Bias Yes

Bias No

Total

Below 2 Lac

29

69

98


40

81

121

Upto 25

39

77

116

25-35

32

73

105

35-45

12

35

47


29

48

77

45 and above

21

32

53

7 Lacs and Above

6

19

25

Total

104

217

321

Total

104

217

321

chi-sq

p-value

x-crit

Pearson’s

2.53096

0.4697

7.81473

chi-sq

p-value

x-crit

Max likelihood

2.53421

0.4691

7.81473

Pearson’s

2.15573

0.5407

7.81473

Max likelihood

2.1809

0.5357

7.81473

CHI-SQUARE

CHI-SQUARE

4.2 Loss Aversion Bias with Gender Row Labels

Bias Yes

Bias No

Total

Female

22

15

37

Male

82

202

284

Total

104

217

321

chi-sq

p-value

x-crit

Pearson’s

13.9825

0.0002

3.84146

Max likelihood

13.0206

0.0003

3.84146

CHI-SQUARE

4.5 Loss Aversion Bias with Marital Status Row Labels

Bias Yes

Bias No

Total

Married

65

134

199

Unmarried

39

83

122

Total

104

217

321

chi-sq

p-value

x-crit

Pearson’s

0.01673

0.8971

3.84146

Max likelihood

0.01675

0.897

3.84146

CHI-SQUARE

4.6 Loss Aversion Bias with Education

4.3 Loss Aversion Bias with Rural/Urban Row Labels

Bias Yes

Bias No

Total

Rural

25

50

75

Urban

79

167

246

Total

104

217

321

Row Labels

Bias Yes

Bias No

Total


25

52

77

Graduation

54

101

155

PG + CA + Doctorate

25

64

89

Total

104

217

321

chi-sq

p-value

x-crit

Pearson’s

1.17594

0.5555

5.99146

Max likelihood

1.18993

0.5516

5.99146

CHI-SQUARE chi-sq

p-value

x-crit

Pearson’s

0.03903

0.8434

3.84146

Max likelihood

0.0389

0.8437

3.84146

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CHI-SQUARE

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International Journal of Management & Behavioural Sciences (IJMBS) 4.7 Loss Aversion Bias with Profession

Row Labels

5.3 Regret Aversion Bias with Rural/Urban Bias Yes

Bias No

Total

Rural

44

31

75

87

Urban

182

64

246

112

167

Total

226

95

321

29

44

chi-sq

p-value

x-crit

6.47174

0.011

3.84146

6.2118

0.0127

3.84146

Bias Yes

Bias No

Total

Agriculturist

7

16

23

Owner of Business

27

60


55


15

Total

104

Row Labels

CHI-SQUARE 217

321 Pearson’s Max likelihood

CHI-SQUARE chi-sq

p-value

x-crit

Pearson’s

0.19382

0.9786

7.81473

Max likelihood

0.19426

0.9785

7.81473

Table 5: Relationship of Demographic variables with Regret Aversion Bias 5.1 Regret Aversion Bias with Age Age

Bias Yes

Bias No

Total

Upto 25

85

31

116

25-35

74

31

105

35-45

31

16

47

45 and above

36

17

53

Total

226

95

321

CHI-SQUARE chi-sq

p-value

x-crit

Pearson’s

1.06179

0.7863

7.81473

Max likelihood

1.05678

0.7875

7.81473

5.2 Regret Aversion Bias with Gender Row Labels

Bias Yes

Bias No

Total

Female

30

7

37

Male

196

88

284

Total

226

95

321

CHI-SQUARE chi-sq

p-value

x-crit

Pearson’s

2.28766

0.1304

3.84146

Max likelihood

2.46829

0.1162

3.84146

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5.4 Regret Aversion Bias with Income Row Labels (Rs/Annum)

Bias Yes

Bias No

Total

Below 2 Lac

74

24

98


89

32

121


47

30

77

7 Lacs and Above

16

9

25

Total

226

95

321

chi-sq

p-value

x-crit

Pearson’s

5.53555

0.1365

7.81473

Max likelihood

5.4132

0.1439

7.81473

CHI-SQUARE

5.5 Regret Aversion Bias with Marital Status Row Labels

Bias Yes

Bias No

Total

Married

136

63

199

Unmarried

90

32

122

Total

226

95

321

chi-sq

p-value

x-crit

Pearson’s

1.06977

0.301

3.84146

Max likelihood

1.08026

0.2986

3.84146

CHI-SQUARE

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A Study of Relationship between Demographics and Emotional Biases of Individual Investors 5.6 Regret Aversion Bias with Education Row Labels

Bias Yes

Bias No

Total


54

23

77

Graduation

107

48

155

PG + CA + Doctorate

65

24

89

Total

226

95

6.2 Status Quo Bias with Gender Row Labels

Bias Yes

Bias No

Total

Female

26

11

37

Male

140

144

284

Total

166

155

321

chi-sq

p-value

x-crit

5.76724

0.0163

3.84146

5.939

0.0148

3.84146

321 CHI-SQUARE

CHI-SQUARE chi-sq

p-value

x-crit

Pearson’s

0.43813

0.8033

5.99146

Max likelihood

0.44228

0.8016

5.99146


6.3 Status Quo Bias with Rural/Urban Row Labels

5.7 Regret Aversion Bias with Profession

Bias Yes

Bias No

Total

Bias Yes

Bias No

Total

Rural

39

36

75

12

11

23

Urban

127

119

246

Owner of Business

59

28

87

Total

166

155

321


123

44

167


32

12

44

chi-sq

p-value

x-crit

Total

226

95

321

Pearson’s

0.00322

0.9548

3.84146

Max likelihood

0.00322

0.9548

3.84146

Row Labels Agriculturist

CHI-SQUARE

CHI-SQUARE chi-sq

p-value

x-crit

Pearson’s

4.90796

0.1787

7.81473

Max likelihood

4.62263

0.2016

7.81473

Table 6: Relationship of Demographic variables with Status Quo Bias 6.1 Status Quo Bias with Age Age

Bias Yes

Bias No

Total

Upto 25

58

58

116

25-35

57

48

105

35-45

23

24

47

45 and above

28

25

53

Total

166

155

321

CHI-SQUARE chi-sq

p-value

x-crit

Pearson’s

0.58626

0.8996

7.81473

Max likelihood

0.58654

0.8995

7.81473

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6.4 Status Quo Bias with Income Row Labels (Rs/Annum)

Bias Yes

Bias No

Total

Below 2 Lac

45

53

98


66

55

121


43

34

77

7 Lacs and Above

12

13

25

Total

166

155

321

chi-sq

p-value

x-crit

Pearson’s

2.37085

0.4991

7.81473

Max likelihood

2.37252

0.4988

7.81473

CHI-SQUARE

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International Journal of Management & Behavioural Sciences (IJMBS) 6.5 Status Quo Bias with Marital Status

Row Labels

Bias Yes

Bias No

Total

Married

105

94

199

Unmarried

61

61

122

Total

166

155

321

chi-sq

p-value

x-crit

Pearson’s

2.13768

0.3434

5.99146

Max likelihood

2.13973

0.3431

5.99146

6.7 Status Quo Bias with Profession Row Labels

CHI-SQUARE chi-sq

p-value

x-crit

Pearson’s

0.23136

0.6305

3.84146

Max likelihood

0.23133

0.6305

3.84146

6.6 Status Quo Bias with Education Row Labels

Bias Yes

Bias No

Total


35

42

77

Graduation

86

69

155

PG + CA + Doctorate

45

44

89

Total

166

155

321

Bias Yes

Bias No

Total

Agriculturist

11

12

23

Owner of Business

43

44

87


87

80

167


25

19

44

Total

166

155

321

chi-sq

p-value

x-crit

Pearson’s

0.79055

0.8517

7.81473

Max likelihood

0.7922

0.8513

7.81473

CHI-SQUARE

Summary of Results Above results can be summarised based upon statistical significance, all relationships with p-value below 10% are reported in the below table:

CHI-SQUARE

Table 7: Summary of Results Relationship

pvalue for Pearson’s Chi Square

Endowment Bias with Marital Status

0.006

Self-Control Bias with Age

0.087

Self-Control Bias with Education

0.070

Optimism Bias with Gender

0.000

Optimism Bias with Rural/Urban

0.003

Optimism Bias with Education

0.031

Optimism Bias with Profession

0.096

Loss Aversion Bias with Gender

0.000

Regret Aversion Bias with Rural/Urban

0.011

Status Quo Bias with Gender

0.016

The above table needs to be inferred with caution. The sample had lower percentage of rural and female data, hence it is suggested that the significant relationships with gender and rural/urban residence be investigated further with a larger sample size. During the survey it was noticed that respondents were hesitant to provide correct income information, Vol. 6-7

had the information been exact, the results could have been different.

5. Conclusions Marital status, gender, age, education, profession and residence (rural/urban) have been found to have statistically significant relationship with emotional biases. In broad

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sense, data also suggests that 30-70% of respondents had various emotional biases. For portfolio managers, who counsel their clients, the importance of demographic factors has been statistically proved. Given the high proportion of emotional bias in individual investors, for a continued relationship and rational decisions by investors, portfolio managers must provide regular financial education and necessary counselling.

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Koreto, Richard J. “Survey: Values Affect Investing.” Financial Planning 31.10 (2001): 31. Lewellen, Wilbur G., Ronald C. Lease, and Gary G. Schlarbaum. “Patterns Of Investment Strategy And Behavior Among Individual Investors.” Journal Of Business 50.3 (1977): 296-333. Lütje, Torben; Menkhoff, Lukas.2007. “What drives home bias? Evidence from fund managers’ views.” International Journal of Finance & Economics. Jan, Vol. 12 Issue 1, p21-35. Malhotra, N. K. (1996). “Marketing research: An applied orientation.” Upper Saddle River, N.J: Prentice Hall. Markowitz, Harry. 1952. “Portfolio Selection.” Journal of Finance, vol. 7, no. 1:77–91. Mathi, K. Malar, and A. Kungumapriya. “Review of Literature on Investment Behavior of Rural Investors.” Mittal, Manish, and R. K. Vyas. “Does Irrationality In Investment Decisions Vary With Income?” ICFAI Journal of Behavioral Finance 6.1 (2009): 26-42 Mittal, Manish. “Study of Differences in Behavioral Biases in Investment Decision-Making between the Salaried and Business Class Investors.” IUP Journal of Behavioral Finance 7.4 (2010): 2034. NASD Investor Education Foundation. 2006. “Gender Differences in Investment Behavior.” Milestone 3 Report P. Bhanu, Sireesha, and Ch. Sree Laxmi. 2013. “Impact of Demographics on Select Investment Avenues: a Case Study of Twin Cities of Hyderabad and Secunderabad, India.” International Journal of Marketing, Financial Services & Management Research, [S.l.], p. 4755. Parashar, Neha. “An Empirical Study on Personality Variation and Investment Choice of Retail Investors.” Journal of Management and Information Technology (2010): 33. Pompian, Michael, and John Longo. 2005. “Incorporating Behavioral Finance into Your Practice.” Journal of Financial Planning, vol. 18, no. 3:58–63. Pompian, Michael. 2006. Behavioral Finance and Wealth Management. Hoboken, NJ: John Wiley & Sons. Pompian, Michael. 2008. “Using Behavioral Investor Types to Build Better Relationships with Your

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Warren, William E., Robert E. Stevens, and C. William McConkey. “Using Demographic And Lifestyle Analysis To Segment Individual Investors.” Financial Analysts Journal 46.2 (1990): 74-77. Wood, Arnold. 2006. “Behavioral Finance and Investment Committee Decision Making.” CFA Institute Conference Proceedings Quarterly, vol. 23, no. 4 (December):29–37.

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Managerial Perceptions and Change Readiness towards Organizational Change: A Perspective . . .

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60 Managerial Perceptions and Change Readiness towards Organizational Change: A Perspective from the Financial Services Industry in India Debjani R Dass*

ABSTRACT

Change is a part of continuous existence for organizations globally. Although the sources for change drivers for firms may vary, but how the decision makers perceive such change drivers would possibly have a deeper meaning in the ways that an organization reacts to such change drivers, how an organization reacts to change and also what outcomes it is able to achieve after going through such a process. Managing organizational change has been a focus for academic research since many decades now being reflected by the existing literature. However, there has been a dearth of any in-depth understanding about managerial perceptions towards organizational change in emerging markets, like that of India. In this paper, we have aimed to find out various facets related to organizational change that are dependent on managerial perceptions. After conducting in-depth interviews across many organizations representing the financial services industries in India, the paper postulates findings that may become critical for managing change in such emerging arenas.

Introduction “There isnothing permanent except change” -Heraclitus of Ephesus Change is an essential part of existence and sustenance for organizations worldwide. Although the sources for change drivers for firms may vary, but how the decision makers perceive such change drivers would possibly have a deeper meaning in the ways that an organization reacts to such change drivers, how an organization reacts to change and also what outcomes it is able to achieve after going through such a process. One of the industries that has recently undergone rapid and unprecedented change is that of the financial service sector. Financial *

services industry is going through a neverbefore seen extraordinaryperiod of change latest entrants, mergers and acquisitions, downsizing, innovative products, and now recently, the introduction of different delivery channel: the Internet. In such a dynamic situation, when managing change becomes a matter of unavoidability, it is vital to find out what are the ways an organization can look into the acceptability and ability to adapt to the change, with respect to the major change drivers, the managers. This paper focuses on the change readiness of senior and middle level managers from the financial service sector in India, major focus of the study being the ability and adaptability

Doctoral Scholar, Institute of Management, Nirma University, E-mail: [email protected]

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to change in their working environment. The findings indicate that the cultural context and external environmental factors play a major role in shaping the change readiness of the managers, who will ultimately be the change agents on-the-ground to implement the dynamicity for organizational sustainability. In the Indian context, change readiness is being influenced by several factors in managers who act as change agents such as adaptability, adventurousness and tolerance for ambiguity, whereas the factors that need considerable handholding from the top management for enabling the managerial level change agents to be more equipped for change are resourcefulness, optimism, drive and confidence.

Literature Survey Greenbaum, S. I., & Haywood, C. F. (1971) identified the primary activity of the financial services industry as financial intermediation. Since then, the financial services sector has continuously undergone various changes, be it in the external or the internal environment, and the speed of evolution to facilitate adaptation has been incredible to say the least. According to a case study conducted by Scarbrough, H., &Lannon, R. (1989) , “the traditional demarcations between financial institutions are being increasingly blurred by a combination of regulatory changes and increasing competition.” Their study was in the context of the UK financial sector, and scrutinized the circumstances that privileged the development of strategic innovations. Markley, D. M. (1984), in his paper, described the evolution of institutions in the financial services industry and established the linkages of the impact of these changes at the institutional level with the varying avatar of the financial services industry. Gonzalez, M., &Mintzberg, H. (1991) came up with a framework which provides a visual illustration of the progression of the financial services industry. They also throw the intriguing question about the existence of a financial services industry. Ockenden, M. (1995), has recognized the mammoth potential makeover for the industry and opined that effective change management is the only way to sustainability of the same. He focuses on the commitment from top management, the middle level management in terms of Vol. 6-7

operational process, people and technology as main components to look for and fortify for managing change successfully. Wilkinson, A., McCabe, D., & Knights, D. (1995) looked at the quality of the services in financial services industry and inferred that improvement of quality was a continuous initiative taken up by the institutions, with the maximum resistance coming from the organizations’ cultural set up and the managerial and staff level. Knights, D., & McCabe, D. (1997) found that the financial services industry was facing a common problem at the managerial level. They present that the managers in the industry find it challenging to move from a traditionalist mindset to a team-player one, though the industry quality ascendancies demand teambased approach for sustainability and overcoming competition. Ian, B., & Jillian, D. (1999) recognized the challenges in mergers and Acquisitions for retail financial services sector and provided a model and also identified a number of cultural tools that managers can use to make the change initiative successful. With the ever-changing external environmental forces and the advancement of technology, specifically the disruptiveness and accessibility of the Internet, major delivery changes took place and Jayawardhena, C., & Foley, P. (2000) analyses the impact of these issues on Internet banking providers serving personal account holders. Neagle, J. (2001) argues that change initiatives in financial services sector is a continuous process and the focus of these initiatives are more towards “managing the structural, technological and product implications of these changes, yet often neglect to sufficiently address the cultural and motivational issues to the same extent”, although research shows that these seemingly intangibles are the decisivesponsors of change, and the focus of the transformational initiatives should be more towards aspects of the psychological contract and the fortification of trust among the employees and the organization. La Croix, K., Stone, M., &Komolafe, F. (2002) focused their approach towards how change should be managed in the financial services industry, and they have provided a detailed list of the do’s and don’ts deriving from their experiences and also by taking some examples. Few significant of this list are the top management commitment,

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understanding the reason and approach to change and clarity about the core competencies of the organization. Kshirsagar, S. D. (2003) has given a perspective of the financial services industry in the context of India, and has described the evolution of the industry in the cultural context of the country and has suggested a framework for the future success of change initiatives keeping in mind the external critical factors of influence. The framework incorporates market resources, organization structure and process. Bradley, L., & Stewart, K. (2003) in their research has identified the significance and impact of internet in triggering changes in the financial services industry, influencing the dispersion of online banking in recent years. Decker, O. S. (2004) has linked the changes of financial service industry to the structural changes in organizations as an aftereffect of corporate social responsibilities. Leybourne, S. (2006) selects the context of UK based financial services sector and the study brings up the insight that though organizations had strategically selected project management as the tool to bring about the changes, extemporization tactics were taken up more ardently when the change process was originally in shape. Also, the commitment from the strategic level was significantly stout in order to bring about the changes successfully. Carnaghan, C., &Gunz, S. P. (2007) have studies the changes in financial sector in Canadian context and have concluded that there are two major type of changes, the positives and the negatives, and their interrelation and impact on change initiatives. Jagodick, J., Courvisanos, J., & Yearwood, J. (2011) have looked into the change agent role in financial service industry where the dominating influencer of change has been Information and Communication Technology. They have discussed the same in the context of German and Australian financial service industries and have mentioned the prevalent ways that the ICT change agents tend to facilitate the change, one of them being the project management technique. The literature, thus, stresses on two major factors on which the success of the change management for financial services industry lies: one is the technical and implicit factor,

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and the other is the people management skills or the tacit factor. This paper tends to look into the tacit factors, the perceptions of managers and their readiness to change in the dynamic context of the financial services industry, India being the context in question.

Methodology This is an exploratory study, using semistructured in-depth Interviews followed by administration of a questionnaire to 23 practicing managers in the financial service sector in India. The instrument used is the “Change Readiness” questionnaire. The respondents came from 13 different organizations offering services such as banking, insurance, corporate advisory, and capital asset management. The semi-structured In-depth Interviews were used to get an idea of the major perceptions of the managers who act as change agents in the financial services industry in India, and the change readiness questionnaire is the best fit for this study as it is a pre-validated questionnaire and is near-exact fit for the study in question, which tends to find out the readiness to change in the given context. The questionnaire had been administered in hard copies, the significance of the questions and any confusion from the respondents being discussed as and when required.

Results and Findings The questionnaire defines seven particular traits in the respondents with respect to their readiness to change. The traits are Resourcefulness, Optimism, Adventurousness, Drive, Adaptability, Confidence and Tolerance to Ambiguity. The desired score for each trait is specified between 22 and 26, and the table below shows the results obtained from the study. Observations are there is a considerable standard deviation both in the desired minimum and desired maximum ranges in all the traits. The resultswere traced back to the in-depth interviews and the responses were justified by individual responses to the subjective questions.

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Table I: Collated report of responses to Change Readiness Questionnaire Resourcefulness Average

Optimism

Adventurousness

Drive

Adaptability

Confidence Tolerance to Ambiguity

24

17

14

20

14

19

13

Observed Max

34.14

25.71

20.12

28.28

21.67

28.46

20.33

Observed Min

13.05

7.72

7.58

11.35

6.60

10.010

6.25

26

26

26

26

26

26

26

22

22

22

22

22

22

22

10.54

9

6.27

8.46

7.54

9.18

7.04

Ideal Max Ideal Min Standard Deviation

The individual traits were taken for each of the dimensions and a spider chart was

formulated for the same. The results are as follows:

Chart I: Scores for Resourcefulness

Chart II: Scores for Adventurousness

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Chart III: Scores for Optimism

Chart IV: Scores for Drive

Chart V: Scores for Adaptability

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Chart VI: Scores for Confidence

Chart VII: Scores for Tolerance for Ambiguity

Chart VIII: Scores for Collated Outcome of all the Seven Traits

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Discussion According to the questionnaire, the trait Resourcefulness is defined as “Being effective at making the most of any situation and utilizing whatever resources are available to develop plans and contingencies. Seeing more than one way to achieve goals and looking in less obvious places to find help.” Research shows managers scoring low in resourcefulness (less than 22) tend to get baffled when faced by hindrances, whereas those scoring high (above 26) have a tendency to generate unnecessary work as they incline to oversee apparent solutions. In this study, 26.08 percent of the respondents fall into the normal scoring range (22 to 26) whereas 8.69 percent of the respondents fall in the low scoring range and 65.23 of the respondents fall in the high scoring range of resourcefulness.

Fig I: Percentage scores in Resourcefulness Optimism is defined as “Thepessimist observes only problems and obstacles while the optimist recognizes opportunities and possibilities. Optimists tend to be more enthusiastic and positive about change.” Managers who score very high in Optimistic scores have shown a lack in Critical-thinking Skills. In this study, 13.04 percent of the respondents were in the normal scoring range, while 82.61 percent exhibited low scores and 4.35 percent of the managerial candidates had a high score in optimism.

Nevertheless, it should be kept in mind that Very high scorers in this trait exhibit a tendency regarding unruliness. The study shows 13.04 percent of the respondents in the desired range, with 86.96 respondents as low scorers and none in the high scoring(above 26) range.

Fig II: Percentage scores in Resourcefulness

Fig III: Percentage scores in Adventurousness “Drive combines physical energy and mental desire to create passion. It’s the fuel that maximizes all the other traits.” Existence of drive facilitates the change initiatives, while a low drive signifies increased resistance towards change. The study shows a equal percentage of 47.83 falling in the normal range as well as the low scoring category, and 4.34 percent falls in the high scoring category.

Adventurousness, according to the Change Readiness Questionnaire, can be described as “The inclination to take risks and the desire to pursue the unknown, to walk the path less taken.”Managers scoring in the desired range (22 to 26), usually accomplishnew height when organizations undergo makeovers. Vol. 6-7

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Fig IV: Percentage scores in Drive

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Adaptability is defined in the questionnaire as “Flexibility and resilience. Flexibility involves ease of shifting expectations. Resilience is the capacity to rebound from adversity quickly with a minimum of trauma.” A high score in this category will signify lack of commitment. The study shows 4.35 percent normal response, 95.65 percent low scores and no high scores.

same time, it is also true that a high tolerance would make it difficult to end job undertakings and take decisions. The study reveals a 4.35 percent desired scores, 95.65 percent low scores and no high scores in this respect.

Fig VII: Percentage scores in Ambiguity

Fig V: Percentage scores in Adaptability “If optimism is the view that a situation will work out, confidence is the belief in your own ability to handle it. There is a direct correlation between levels of confidence and receptivity to change. If people feel confident in their ability to handle a new task, they’ll be more receptive to it and more positive about it.” High scores in this respect, however, may prove to be demeaning. These indicate a “know-it-all” attitude and a deficiency of openness to feedback. The study reveals a 27.22 percent normal range scores, a 39.13 percent low score and 33.65 percent high scoring pattern.

Thus, we see that in the given sample of managers who take the role of change agents in the financial service industry in India, the seven traits needs to be developed and requires a handholding effort from the top management are resourcefulness, optimism, adventurousness, drive, adaptability, confidence and tolerance for ambiguity. It is observed that scores of all the traits have a significant standard deviation range, indicating the fact that the spread in the given context and scenario of India is varying widely. Though very little scores are in the perilous category that would hinder sustainability through change, organizations need to take care that the change agents’ perceptions are managed in order to bring about a sustainable change to enable them to overcome the mammoth and fierce competition faced by the financial service industry in the present day.

Conclusion and Future Research

Fig VI: Percentage scores in Confidence Tolerance for Ambiguity talks about the uncertainty that accompanies change. Irrespective of all the meticulous planning, there is bound to be some indefiniteness in the whole scenario. “Without a healthy tolerance for ambiguity, change is not only uncomfortable, it’s downright scary.” At the Vol. 6-7

As suggested by the literature, the managerial perceptions and readiness to change among managers who act as change agents in the specific context of the financial services industry depends on the external environmental factors to a large extent. The questionnaire administered was framed in the context of the United States and hence, the results show a significant deviation in the managerial traits when it is put into action in the context of the Indian subcontinent. Thus, one needs to look into the factors and their desired scores from the cultural and

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demographic conditions of the subcontinent and there is also a need to identify the right desired range of scores for the same. Moreover, the in-depth interview carried out to the participants also validates the same, and future researchers needs to address this issue of perception of the managers and also find out what will be the effective ways to manage the changes needed for sustainability of organizations in the financial services industry in the Indian context. One needs to find out whether there are other attitudinal traits such as trust generation, timeliness, etc. that trigger the managerial perceptions and hence their actions for the change initiatives to roll out successfully.

References Bradley, L., & Stewart, K. (2003). The diffusion of online banking.Journal of Marketing Management, 19(910), 1087-1109. Carnaghan, C., &Gunz, S. P. (2007). Recent Changes in the Regulation of Financial Markets and Reporting in Canada*.Accounting Perspectives, 6(1), 55-94. Decker, O. S. (2004).Corporate social responsibility and structural change in financial services.Managerial Auditing Journal, 19(6), 712728. Gonzalez, M., &Mintzberg, H. (1991). Visualizing strategies for financial services. McKinsey Quarterly, 2, 125-134. Greenbaum, S. I., & Haywood, C. F. (1971). Secular change in the financial services industry. Journal of Money, Credit and Banking, 3(2), 571-589. Ian, B., & Jillian, D. (1999). Merger as a trigger for cultural change in the retail financial services sector.Service Industries Journal, 19(1), 194-206.

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Services Technology Projects. Asia Pacific Management Review, 16(2). Jayawardhena, C., & Foley, P. (2000). Changes in the banking sector–the case of Internet banking in the UK. Internet Research, 10(1), 19-31. Kriegel, R. J., & Brandt, D. (1996). Sacred cows make the best burgers. HarperBusiness. Knights, D., & McCabe, D. (1997). Can a leopard change its spots?-seeking quality in financial services. Managing Service Quality, 7(2), 102105. Kshirsagar, S. D. (2003). Financial services in India: a new perspective. IIMB Management Review, 15(2), 37-44. La Croix, K., Stone, M., &Komolafe, F. (2002). Managing change in the financial services industry. Journal of Change Management, 3(1), 81-95. Leybourne, S. (2006). Improvisation within the project management of change: some observations from UK financial services. Journal of Change Management, 6(4), 365-381. Markley, D. M. (1984). The impact of institutional change in the financial services industry on capital markets in rural Virginia. American journal of agricultural economics, 66(5), 686-693. Neagle, J. (2001). Financial change: who is benefiting?.Balance Sheet, 9(4), 40-42. Ockenden, M. (1995). Practical change management in financial services.Executive Development, 8(5), 3-5. Scarbrough, H., &Lannon, R. (1989). The management of innovation in the financial services sector: a case study. Journal of Marketing Management, 5(1), 51-62. Wilkinson, A., McCabe, D., & Knights, D. (1995). What is happening in “quality” in the financial services?.The TQM Magazine, 7(4), 9-12.

Jagodick, J., Courvisanos, J., & Yearwood, J. (2011). ICT Change Agents: Global Actors in Financial

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61 Managerial Perceptions towards Organizational Change: A Focus Group Study on Indian Managers Debjani R Dass*

ABSTRACT

Change is a part of continuous existence for organizations globally. Although the sources for change drivers for firms may vary, how the decision makers perceive such change drivers would possibly have a deeper meaning in the ways that an organization reacts to change, change drivers and also what outcomes it is able to achieve after going through such a process. Managing organizational change has been a focus for academic research since many decades now being reflected by the existing literature. However, there has been a dearth of any in-depth understanding about managerial perceptions towards organizational change in emerging markets, like that of India. In this paper, we have aimed to find out various facets related to organizational change that are dependent on managerial perceptions, based on three focus group interviews. The FGDs have been conducted on 31 managers using a semi-structured questionnaire guide, covering a spectrum of industry verticals such as Financial Services, Pharmaceutical, BPO services, Real Estate, Government Services across the Indian subcontinent. The FGDs throw light upon various factors influencing resistance towards change initiatives, as narrated by the managers, which have been mapped according to the frequency and intensity of their occurrence in the study.

Introduction “There isnothing permanent except change” -Heraclitus of Ephesus Change is an essential part of existence and sustenance for organizations worldwide. Although the sources for change drivers for firms may vary, but how the decision makers perceive such change drivers would possibly have a deeper meaning in the ways that an organization reacts to such change drivers, how an organization reacts to change and also what outcomes it is able to achieve after going through such a process. Majority of the industries are recently undergoing rapid and unprecedented change, *

especially in developing economies such as India. In such a dynamic situation, when managing change becomes a matter of unavoidability, it is vital to find out what are the ways an organization can look into the acceptability and ability to adapt to the change, with respect to the major change drivers, the managers. This paper focuses on the perceptions on change and related resistances of senior and middle level managers from different industry verticals in India, major focus of the study being the ability and adaptability to change in their working environment. The findings indicate that the cultural context and external environmental factors play a major role in

Doctoral Scholar, Institute of Management, Nirma University, Ahmedabad.

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Managerial Perceptions towards Organizational Change: A Focus Group Study on Indian Managers

shaping the change readiness of the managers, who will ultimately be the change agents onthe-ground to implement the dynamicity for organizational sustainability. Managers, irrespective of their industry and designation, shared their experiences and were keen on identifying the factors that lead to increased resistance towards change. Focus Group Interviews were conducted to churn out various factors influencing the managerial perceptions towards change and the associated resistances. The Factors were categorized into Low, Medium and High according to their intensity and frequency.

Literature Survey An in-depth study of the literature over the past 67 years has brought out the following studies and expert opinions. This also conveys a message of how organizational change has been observed, studied, and commented on in a longitudinal fashion with respect to the evolving market scenario across the globe. A total of 71 papers have been reviewed, dating from 1947 to 2013. The highlights are mentioned hereafter. Change processes were theoretically formulated in different phases, ranging from three stages (Lewin, 1947) to eight stages (Kotter, 1996)The fundamental research works related to managing change dates back to 1947 when Kurt Lewin, in his Empirical study “Frontiers in Group Dynamics: Concept, method and reality in Social Science; social equilibria and social change” , introduced the theoretical formulation of three phases of change: Unfreeze, Move, Refreeze. Later, GW Allport (1947), reviewed the paper on Review Paper on Kurt Lewin’s theory and reviewed the theoritical formulation of three phases of change: Unfreeze, Move, Refreeze and concluded the success of the theory in the applicative aspect. Noel M Trichy (1974), in hie exploratory research “Agents of Planned Social Change- congruence of values, cognitions and actions”, identified four category schemes of types of change agents : (1) outside pressure, (2) people change technology, (3) organization development, and (4) analysis for the top. A comparison was done to find out the degree to which their general change models were congruent along two Vol. 6-7

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dimensions: (1) the congruence of values and actions and(2) the congruence of cognitions and actions. It was found that the outside pressure type was most congruent along both dimensions, while the people change technology type was moderately congruent along both dimensions. In his paper “Reacting to what?” John Sinclair (1994), highlights, while considering reactions to organizational change, what is it that we should be diagnosing and assessing? What is important in considering individual and group reactions to change in the workplace? All too often, in looking at organizational change and its management, we are presented with stereotypes and prescriptions: both for diagnosing the ways people will react to change and for remedies to overcome resistance. While these may aid a basic understanding of some of the issues to be faced when dealing with change, there is a danger in applying them a contextually and expecting them to work. John Kotter (1996), in his book “Leading Change”, generates the eight step model of leading change:

1. Establishing the sense of urgency 2. Creating the Guiding Coalition 3. Developing the change vision 4. Communicating the Vision for buy-in 5. Empowering Broad-based action 6. Generating Short term wins 7. Never letting up, and 8. Incorporating changes into the culture As time passed by, researchers now began to focus on a new dimension of managing change in organizations. The importance of leadership to the change management process is underscored by the fact that change, by definition, requires creating a new system and then institutionalizing the new approaches. While change management depends on leadership to be enacted, to date there has been little integration of these two bodies of literature. Thus, the purpose of this article is to draw parallels between the change literature and the leadership literature; specifically, the transformational leadership literature that is primarily concerned with the capabilities

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required to enact change successfully. This is done by describing areas of convergence between the two literatures that point to the appropriateness of transformational leadership in enacting change. This is highlighted by authors Regina Eisenbach, Kathleen Watson and Rajnandini Pillai (2000). Battilana and Casciaro (2012) state that low levels of structural closure (i.e., “structural holes”) in a change agent’s network aid the initiation and adoption of changes that diverge from the institutional status quo but hinder the adoption of less divergent changes. Waddell and Sohal (2012) found out that this notion of utility in resistance has been largely disregarded by present day prescriptions for the management of change, and perhaps this is contributing to the lack of success organizations have in securing successful change. Manuela Pardo-Del-Val, Clara Martinez-Fuentes and Salvador RoigDobo’n(2012) were of the opinion that participative management might be giving the members of the organization the necessary tools to question aspects that could endanger changes, thus considering participation as a knowledge broker that sheds light along the change process through the increase of resistance to change sources. Pekka Aula, SakuMantere (2013) built a framework for analyzing reputation change as dialogical interaction between an organization and active stakeholders. Leclercq and Vandelannoitte (2013) concluded that the Foucauldian framework deepens understanding of organizational change and its underlying dynamics by highlighting contradictions and paradoxes as both the medium and the outcome of the organizing process over time. The organizing process evolves through power-knowledge relations, which are forces that provide the energy to make change possible. Research limitations/ implications – The findings indicate the need for further research to develop insight into Foucauldian concepts, such as by replicating the proposed methodology in other companies or with other types of organizational change. Chidiac (2013), in his paper emphasizes the need to attend in change management efforts to three interrelated capabilities: Sensing, Supporting and Sustaining. Together these Vol. 6-7

emphasize the need to track and stay responsive to the organizational environment; to ensure the right amount of support and challenge is present in the change effort and finally, to provide a focus on experimentation and the embedding of learning for sustainable change.

Research Gaps and Objectives On studying the literature in depth, few gaps in the research area have been identified. Though previous researches have studied and tried to identify the types, approaches, challenges, effects of organizational change and how it has evolved over time, adding to it the ways in which organizations have tried to manage systematic as well as radical changes at a strategic level, very few studies have focused on the members of the organization who are responsible for “making the change happen” at a ground level, that is, the managers and leaders who act as change agents to ensure the successful implementation of the change and also the retention of the change. The change agents have been identified, categorized, their roles defined, their contributions mapped by the researches, but what was not touched upon was the factors that impact the perception of the change agents towards implementing the change. Identifying the factors that affect the change agents’ perception and measuring the impact of the factors on the execution of the change, and finding any existing relationship within the factors that affect managerial perception towards execution of change is what this research focuses on. The probable impact of the same would be in strategizing the change, which could be designed to affect the perceptions of the change agents positively, thus bringing down the resistance towards change, and hence making the implementation successful.

Methodology Research Design In accordance with the objective of the study, the exploratory qualitative research methodology of Focus Group Discussions (FGDs) was carried out to collect relevant data. The FGDs included three sessions. This qualitative technique was adopted as they are

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most beneficial and appropriate when the objective is to probe a problem that demands a detailed and systematic investigation.Focus group interviews are semi-structured discussions that are carried on in groups of 8-12 individuals, focusing on a common topic. These discussions are facilitated and recorded by researchers (Bloor & Wood, 2006).The focus group is an effective research strategy used in interview method and finding out various views and reinforcing interaction (Walden, 2009). In other words, focus groups are a discussion endeavor planned and designed seriously to determine group members’ perceptions of issues that are lucidly defined and of their interest.(Langford &McDonagh, 2001).They are interviews held to collect data on group norms that reflect a specific issue or a series of issues and group beliefs (through ensuring in-group interaction) (Bloor & Wood, 2006)and to determine participants’ similar and different views related to issues. The most practical aim of focus group interviews is to have a face-to- face meeting with a large group

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in a limited time (Guler, & Pinar, 2013). The data collected through the focus group interview were subject to verbatim transcription and subsequently it was put through content analysis.

Participants Homogenous sampling method, one of the purposive sampling methods was used to determine the study group (Büyüköztürk et al., 2008) as it was believed that this sampling method would provide the researcher with the opportunity to observe the factors related to the issues focused on in the study group.

Participants’ Demographic Characteristics There were a total of 31participants in the three FGDs conducted, FGD I, II and III constituting of 12, 10 and 9 participants respectively. The participants all worked in the managerial positions, with a minimum experience of 5 years and hailed from various industries, experience level, designations. The demographic characteristics are tabulated as follows:

Table 1: Participant Demographics: FGD I Sl No.

Industry

Designation

Experience (Yrs)

Span of Control

1 2 3 4 5 6 7 8 9 10 11 12

BPO Pharmaceuticals FMCG Pharmaceuticals FMCG IT Healthcare Real Estate Financial Services Power Engineering Power

Associate Officer Territory Business Manager Sr Executive Executive QC Sales Manager (BD) BDM Senior Manager Asst Sales Manager Assistant Vice President Assistant Manager BD Head Manager-Purchase

13 yrs 7 months 12 yrs 10 yrs 5 yrs 9 yrs 10 yrs 12 yrs 7 yrs 15 yrs 6 yrs 5 yrs 10 yrs

3 7 3 2 9 14 2 1 5

Table 2: Participant Demographics: FGD II Sl No. Industry

Designation

1 2 3 4 5 6 7 8 9

Legal Government services (Telecom) Central Government Service (Customs and Excise) Enterpreneur (manufacturing) Government Services (Research and Development) Primary education Government services (Telecom) Media (Print) Pharmaceutical

10

Real Estate

Lawyer SDE Superintendant MD Engineer Trustee, Director TTA General Manager Regional Manager, Central Zone HO-Operations

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Experience (Yrs)

Span of Control

20 yrs 10 yrs 20 yrs 17 yrs 7 yrs 23 yrs 8 yrs 23 yrs 12 yrs

2 8 4 6 5 50 5 17 25

10 yrs

20

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Table 3: Participant Demographics: FGD III Sl No. Industry

Designation

Experience (Yrs)

Span of Control

1

Academics

2

Pharmaceuticals

Doctoral Fellow

5

2

Project Executive

8

3

1

Government Services (Shipping)

Asst Mechanical Engineer

20

2

4

Academics

Officer, Director Office

25

5

5

Engineering

Product Head

18

3

6

Entrepreneur

Director

10

10

7

Tele Communications

Sr. Manager

10

4

8

Pharmaceuticals

Project Manager

9

7

9

Pharmaceuticals

Territory Business Manager

11

situations of implementing change management?

Procedure and Data Collection Instrument The author conducted the Focus Group Discussion and formulated eight semistructured questions for data collection. The process is described as follows. The problem was defined, mainly from the related literature and expert in-depth interviews. Afterwards, the draft version of the questions were created and submitted for analysis by three expert academicians. The form was evaluated by the academicians and scored in a scale “appropriate”, “needs modification” and “not appropriate”, and was remodeled based on the feedback. In addition, the questionnaire included a section where the experts were invited to provide their suggestions and comments. Based on the comments regarding the content validity and problem coverage, the questions were concluded.The expert views were calculated using a formula [Agree- ment/ (Agreement+ Disagreement) x 100], and the reliability coefficient was determined as 0.96. In this formula, the value, which is above 0.90, is generally defined as satisfactory (Miles & Huberman, 1994). In this context, the following questions were abridged and steered:

1. To what extent do you think change is necessary in an organization? Can you recollect any significant change initiatives in the organization you have/had been working for? 2. As managers, how would you ensure the direction of change/rate of change for a planned change 3. To what extent does HR play a strategic role in implementing and managing change? 4. Do you think coercion works for certain Vol. 6-7

5. To what extent have you observed any anxiety/stress related issues while implementing organizational changes? 6. Does the reaction to change vary according to varied demographics(age, sex, cultural variation, race, caste, etc)? 7.

What are the characteristics of various types of change agents? Do you think they are linked to various personality types

8.

What according to you are the main sources of resistance in any change process

9. Any other comments you would like to make in this context? The place and technology for the study was planned beforehand. The FGDs were conducted in a clean, airy and quiet room where there was enough space for seating of 12 adults. The participants were made to sit in a circular position, along with the facilitator. The whole event was recorded in a video recorder, with the consent of the participants. The FGDs were carried in three sessions and the number of participants in FGD I, II and III were 12, 10 and 9 respectively. Lastly, the data was processed and probed. The recorded data were transcribed verbatim to text, and was subjected to content analysis. The analysis showed various factors, which occurred in different levels of frequency and intensity. These factors were identified from the three FGDs and were then graphically represented according two three categories, Low, Medium and High, depending on their frequency and intensity of occurrence. The

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three FGD data was then collated and the factors were then analyzed and clubbed to get the desired factors, along with their sub-factors.

that were distinctive from the estimates were reassessed and amended.

The Reliability if the Study

The FGDs conducted in three parts (termed as FGD I, II and III respectively) helped in yielding factors that the managers or change agents perceive as contributors to any change process in an organization. The respondents represented a variety of industries, and hence, the generalizability of the factors can be accepted to certain extent.

The results were shared with the contributors as a way of increasing the reliability of the study, The results of the study were shared with three of the participants (one participant from each focus group) and they were asked to endorse theoutcomes. Moreover, in order to upsurge the generalizability of the study, all the details about the study (data collection instrument, study group, the process of focus group interviews, data collection and analysis, and reports) were specified. Lastly, the data collected throughout the study were shared with an independent researcher academician. The outcomes of the study were matched and discriminated with the evaluations provided by the independent researcher. The factors that were in association with the autonomous researchers’ assessments were used as they were; however, the results FGD I

Freq.

FGD II

Succession planning

H

Communication

and training top

Results and Findings

According to the responses, the factors identified were categorized into three main divisions depending on the frequency of their occurance in the Focus Group Discussions. The factors were rated as High(H), Medium(M) and Low(L), and are represented as Bold arrow lines, Slim Arrow lines and Dotted arrow lines in the figures (i), (ii) and (iii) respectively and by the letters H, O, L in figure (iv). According to the responses collated, as shown in figure (iv), the factors with different intensities are listed as below: Freq.

FGD III

Freq.

brings

H

change is inevitable.

H

unplanned radical changes

H

resistance is high at first, goes down

H

down resistance

management

M

confidence

increses resistance.

with time

Learniing outcomes brings

H

down resistance Transparency brings down

H

resistance Time decreases resistance

H

Pilot

H

projects

will

help

bringing down resistance Coersion is not applicable

H

everywhere. validity

of

the

H

changed initiative

Research

oriented

M

organization, the resistance

successful models in other industries

L

or competitors may initiate change

to change is low.

initiatives.

Senior employees are also

M

open to change. (R&D) Culture of low resistance to

M

change is maintained to bring

down

resistance.(R&D) Recruitment of people is

M

done to get peoplewho are ready to change.(R&D) unplanned

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radical

L

Family

rum

business

M

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change

agents

have

to

play

a

M

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unplanned changes,

radical

L

learning

outcomes,

Family

rum

believes

career

business

M

change

timeismoney,so

agents

have

to

play

a

M

mentoring or counselling role to

they will enforce change.

handle high attrition rates that comes

enhancement

with changes in the system.

Learning outcomes

L

Change

is

M

implemented(family business), but employees are dissatisfied. Resistance is very high. Career

M

enhancements

Radical change leads to

H

attrition. Overall, people are more

H

or less ready to change, as they

understand

that

change is inevitable. business diversification

H and

Govt

sector

has

high

H

Govt

resistance to change, as

re-engineering

interventions

are

change

H

inducing.

there is high job security.

Majority of employees are

H

senior(Govt sector), so they provide high resistance to change. Holistic approach will help

H

implement the change. external

legal

H

stress is a direct effect of

H

employees are more resistant to How govt much the employee will

HM

resist the change is affected by his/her personality. timing

of

the

implementation

change is

L

also

crucial. For instance, stress is very

high

for

representatives

at

sales the

last

quarter of the financial year. This is not a strategically good

time

to

initiate/implement

any

change. An

Effective

leadership

H

brings down resistance . Vol. 6-7

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An understanding boss, helps

H

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An

understanding

boss, H

helps in bringing down resistance to change. females tend to show lower H resistance to change, if they are convinced. coersion never works

H

personal preferences and L tendencies

of

management

top

affects

the

strategic change decision. their

overall

personality L

affects the strategic change decision. globalization and cultural diversities

influence

M

the

extent of resistance . holistic approach should be M understood and utilised to manage

change

successfully. female employees as less M resistant to change Female

employees

are

confused on the clarity of the concepts, and tend to confuse their superiors. female superiors can be M more

convincing and are

better agents of change.

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The same data points have been represented in figures after applying text mining techniques on the FGD data , and is represented in the figures below. The Focus Group Discussions had been video recorded and then transcribed verbatim , after

which the data had been put through text mining techniques to come up with the following pattern. The Focus Group Discussions has come up with 47 Factors that is represented by High intensity, 29 factors with Medium intensity and 12 factors with Low intensity.

Open communication with employees

Unplanned radical changes

Learning outcomes External legal confirmatory factors System dependency Succession planning & training HR & process orientation Resistance to change

Validity of the changed initiative

HR & policy formulation Business diversification & reengineering Gender

Age/seniority in company

Organizational loyalty Top management confidence

Career enhancements

Figure 1: Factors from FGD I

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Family run business, with the belief of time is money Research-oriented organization

491

Dissatisfied employees of family businesses

Start-ups

Recruitment of people

Technological changes

Culture of low resistance to change

Transparency

Learning outcomes

Communication

Pilot projects Indian nationals Time

Coercion

High Job security of government sector

Understanding of inevitability of change

Organizational, national culture

Resistance to change Threat of redundancy

Senior employees in government sector

Value proposition Unplanned radical changes

Concern for security & legal issues for women employees Holistic approach

Training programs

Lack of formal management training in unorganized sectors

Gap in leadership ability in unorganized sectors

Surety of strategic role of HR in the change process

Government sector employees

Figure (ii): Factors from FGD II

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Role of change agents as mentors/ counsellors

Personality of top management Employees/Human resources

Personality of middle level/junior employees Holistic approach

Power dynamics

Globalization & cultural diversities

Win-win situation for organization & employee

Female superiors – better agents of change

Strategic, long-term level of vision of change

Government interventions

Coercion Age seniority of Government employees

Sense of job security Transparency

Resistance to change

Job security of government employees

Understanding boss

Traditional mindset of government employees

Communication Convinced females

Effective leadership Timing of the change implementation

Successful models in other industries/ competitors Personal preference and tendencies of top management

Putting employees in the shoes of top management Overall personality of top management

Figure (iii): Factors from FGD III

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Gap in leadership Culture of low ability in unorganized resistance to change sectors (0,M,0) Start-ups Role of change agents as mentors/ Personality of middle counsellors (0,M,0) level/junior employees ,0)

(0,M

0,M (0 ,

(0,0,M)

(0,M,0)

0 (0, ) ,M

,M ) (0,0

(0,M,0)

(0,0, H)

Traditional mindset of government employees

Coercion ) (0,H ,H

(0,0,H)

(0,H,H)

Resistance to change

H) (0,0,

Transparency

)

(H ,0 ,0 )

Convinced females

Learning outcomes

(0,H,0)

) H,0 ( 0,

0)

(L,H,0)

HR & process orientation

Career enhancements

( 0, H,

(M,0,0)

(H,0,0)

(H,0,0)

,0)

(H,0

H ,0 )

Age/seniority in company (L,

0, 0 )

System dependency

) (0 ,H,0

Successful models in other industries / competitors

) ,L ,0

Gender

(M ,

Putting employees in the shoes of top management

Overall personality of top management

(0

External legal confirmatory factors

) ,L ) ,0 ,L ,0 (0

) ,L ,0 (0

(H ,0,0

)

(0

(H ,0 (H ,0 ) ,0 , 0 (H ) ,0 ,0 )

Communication Indian nationals

Business diversification & reengineering

Top management confidence

(0,0,H )

,0 )

Succession planning & training

Timing of the change implementation

,H H (0,

Validity of the changed initiative

Pilot Projects

(0,H , L)

,H (M

) ,0,0 (H

,0 ,0 )

Sense of job security

(0,H,0)

Effective leadership

(M

Strategic, long-term level of vision of change

(0 ,0 ,M ) )

) ,0 ,0 ) , H (0, H (0

) ,H ,H (0

(0 ,0,H

Understanding boss

Training programs

Win-win situation for organization & employee

(0 ,0,M )

M) (0,0,

Government interventions

Holistic approach

(0,0,M )

Power dynamics

Globalization & cultural diversities

High Job security of government sector

Organizational loyalty

(0,0,M)

)

Employees/Human resources

Female superiors – better agents of change

(0,M ,0 )

(0,M,0)

H) H, (0,

Surety of strategic role of HR in the change process

(0,M,0)

(0,M,0)

Family run business, with the belief of time is money

Personality of top management

Recruitment of people

(0 ,H ,M )

(0,M,0) Technological changes Senior employees in (0,M,0) government sector

Organizational, national culture

Dissatisfied employees of family businesses

Lack of formal management training in unorganized sectors

Research-oriented organization

493

Personal preference and tendencies of top management

Concern for security & legal issues for Threat of women employees redundancy Understanding of inevitability of Value proposition change

Unplanned radical changes

HR & policy formulation

Figure (iv): Collated factors from FGD I, II and III Vol. 6-7

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Discussion and Conclusions The Focus Group Discussionshas come up with 47 Factors that is represented by High intensity, 29 factors with Medium intensity and 12 factors with Low intensity. All these 88 factors can be clubbed into five broad factors, which may encompass the Managerial Perceptions and change readiness towards organizational change management. The factors are as follows:

Chidiac, M. A. (2013). An organisational change approach based on Gestalt psychotherapy theory and practice. Journal of Organizational Change Management, 26(3), 458-474. Eisenbach, R., Watson, K., & Pillai, R. (1999). Transformational leadership in the context of organizational change. Journal of Organizational Change Management, 12(2), 8089.

1. Factors Initiating Change 2. Change Agent Characteristics 3. Factors Driving Change 4. Factors Inhibiting Change 5. Aftereffects of Change Scope for Future Research The Focus Group Discussion forms a part of the exploratory study that can be used to identify the Managerial perceptions towards managing organizational change. This study can be used combined with the Literature Survey and other qualitative methods such as In-depth Interviews to identify the factors and statistically validate them by conducting surveys on practicing managers. The identification of the factors may lead to effective policy formulations from the organizational point of view, thus helping to bring down resistance for change and hence, the staggering amount of failures to implement change initiatives in organizations can be dealt with. Success in organizational change implementations will not only ensure proficiency, but will also lead to effective and optimum use of organizational resources towards the development, growth and enhanced sustainability.

References Aula, P., &Mantere, S. (2013). Making and breaking sense: an inquiry into the reputation change. Journal of Organizational Change Management, 26(2), 340-352. Battilana, J., & Casciaro, T. (2012). Change agents, networks, and institutions: a contingency theory of organizational change. Academy of Management Journal, 55(2), 381-398. Bloor, M., & Wood, F. (2006).Keywords in qualitative methods: A vocabulary of research concepts. Sage.

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Büyüköztürk, S’., Çakmak, E. K., Akgün, Ö. E., Karadeniz, S’., &Demirel, F. (2008). BilimselAras’týrmaYöntemleri[Scientific ( research methods]. Ankara: PegemAkademiYayýnlarý.(

Guler, D., & Pinar, M. (2013). SUCCESS AND FAILURE IN SCIENCE EDUCATION: A FOCUS GROUP STUDY ON TURKISH STUDENTS. Journal of Baltic Science Education, (6). Kotter, J. P. (1996). Leading change. Harvard Business Press. Linstead, S., & Chan, A. (1994). The sting of organization: command, reciprocity and change management. Journal of Organizational Change Management, 7(5), 4-19. Langford, J., &McDonagh-Philp, D. (Eds.). (2001). In focus groups: Supporting effective product development. London & New York, NY: Taylor and Francis. Leclercq-Vandelannoitte, A. (2013). Contradiction as a medium and outcome of organizational change: a Foucauldian reading. Journal of Organizational Change Management, 26(3), 556-572. Miles, M. B., & Huberman, A. M. (1994). Qualitative data analysis: An expanded sourcebook. Sage. Pardo-del-Val, M., Martínez-Fuentes, C., & RoigDobón, S. (2012). Participative management and its influence on organizational change. Management Decision, 50(10), 1843-1860. Waddell, D., &Sohal, A. S. (1998). Resistance: a constructive tool for change management. Management Decision, 36(8), 543-548. Walden, G. R. (2009). Focus groups: a selective annotated bibliography (Vol. 2). Scarecrow Press.

Indicative Bibliography Andrews, D. A. &Stalick, S. K. (1994), Business Reengineering: The Survival Guide, Englewood Cliffs, NJ: Prentice-Hall Bandura, A. (1977), Social Learning Theory, Englewood Cliffs, NJ: Prentice-Hall

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Managerial Perceptions towards Organizational Change: A Focus Group Study on Indian Managers Beer, M., Eisenstat, R. A., & Spector, B. (1993), “Why Change Programs Don’t Produce Change”, In: Maybe, C. &Mayon-White, B. (eds.), Managing Change (2nd ed), London: Paul Chapman, pp99107 Blanchard, K. H., Waghorn, T., Ballard, J., & Murphy, E. C. (1996).Mission possible (Vol. 19997). McGraw-Hill. Burke, W. W. (2010). Organization change: Theory and practice. Sage. Coghlan, D. (1993), “In Defence of Process Consultation”, In: Maybe, C. &Mayon-White, B. (eds.), Managing Change (2nd ed), London: Paul Chapman, pp117-124 Drucker, P. F. (2009). Managing in a time of great change. Harvard Business Press. Ghoshal, S., Piramal, G., & Bartlett, C. A. (2002).Managing radical change. Penguin Books India.

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Goodstein, L. D. & Burke, W. W. (1993), “Creating Successful Organizational Change” In: Maybe, C. &Mayon-White, B. (eds.), Managing Change (2 ed.), London: Paul Chapman, pp164-172 Greene, R. (1993), “Revenge of the Nerds”, Journal of Business Strategy, 14(6) November/ December 1993 pp46-47 Hahn, D. (1991), “Strategic Management - Tasks and Challenges in the 1990s”, Long Range Planning, 24(1) pp26-39 Kaul, A., &Chaudhri, V. (2012). Partnering for business transformation: the Wipro Consulting Services story. Katz, D & Kahn, R L (1966), The social psychology of organizations (1st ed.), New York: Wiley Tichy, N. M. (1983). Managing strategic change: Technical, political, and cultural dynamics (Vol. 3). New York: Wiley.

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62 Faculty (without Ph.D and NET) in Private NBA Accredited MBA Institutes: A Question against the Quality Management Education Prabjot Kaur* & Ashutosh Priya Awasthi**

ABSTRACT

Doctoral education enrolment in varied areas is utmost important for the consistent growth of higher education to any country. If the country fails in producing the Ph.Ds as per the requirement, it becomes really difficult to have the smooth functioning of higher education in terms offaculty recruitment as per norms and research productivity. The purpose of the study is to highlight the fact that India is facing the shortage of Ph.D and NET qualified candidate which is the question against the quality management education. On the counterpart, existing study has investigated the faculty percentage which is NET qualified, Ph.D pursuing or Ph.Dand are working in the private MBA institutes. The data is collected through a self-designedresearchsurvey instrument from (N=385) faculty members working in the NBA accredited Business Schools in Northern India.The results of the study shows only 24% Ph.D holders, 19% NET qualified and 32% Ph.D pursuing is the percentage which are serving their services as faculty in the accredited Business Schools in India.The percentage reflects the future management education in dark. The study can stimulate and motivate the faculty (without Ph.D and NET) towards their career development and Ph.Denrollment. The study may also help in generating more sponsored fellowship, funded projects,and research grants for the faculty development in higher education. Keywords: Doctoral and NET shortage, Facultyrecruitment, Research productivity, Quality Management Education, Private MBA institutes, Higher Education.

Introduction The key issue that is plaguing India’s education system is methods to improve quality of education that is delivered. It’s no secret that the quality of teaching is one of the most important determinants of student * **

performance. A country can have the best of policies, infrastructure, curriculum, high enrolment and low dropout rates, passing percentages etc, but the responsibility of imparting quality education ultimately rests on competent and good academicians. India

Academic Associate (OB & HR), Indian Institute of Management Kashipur, India, Research Scholar (Management),Uttarakhand Technical University Dehradun, India. Professor, Uttkarsh Business School, Bareilly.

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Faculty (without Ph.D and NET) in Private NBA Accredited MBA Institutes: A Question . . .

is facing the acute shortage of faculty members in the higher education especially technical education institutions and central universities.According to a recent analysis done by Technopark, it was found that India requires 1.16 million teachers for all universities in the country. At present, India’s total faculty strength is 8, 10,000.The country has a shortage of 3, 50, 000 teachers. In 2020, the shortage will rise to 1.38 million [1]. The latest data published online in minglebox dated March 2,2015 reports 32% average faculty crunch at IITs,22% at IIMs,31% at IIITs and 25% at NITs [2] .A major shortfall Indian education system experiences on this front is inability of institutions of higher learning to attract and retain qualified and trained faculty.And on the other front shortage of Ph.Ds and NET qualified candidates who wishes to pursue their career in academics.The shortage of qualified and competent faculty is adversely affecting the quality and standard of teaching programs in colleges and universities with many colleges employing underqualified teachers to which K Sankaranarayanan,governor and chancellor of state universities, Maharashtra makes his concern at the 65th foundation day celebration ceremony of the University of Pune (UoP) on 10 February 2014,Monday.He addressed faculty of the universities and colleges by saying , “ I will ask the UoP to prepare candidates for exams like the National and State Eligibility Tests (NET /SET) to improve the availability of teachers in our colleges and universities to some extent. Achieving a decent quality across – the – board for institutions offering higher education in the university and the state at large is a major concern”.It was being advisedby him to the universities to prepare and train the willing students for NET /SET for producing more and more qualified and competent candidates against positions vacant in the universities and colleges [3].This will help in bridging the demand – supply gap in academic labour market and also developing quality education. India today is doing miracles in the world of business. The world of business is conceptually and fundamentally based on the teaching excellence of the competent faculty members and their orientation towards research and expertise. Business schools today are considered to be the learning and training Vol. 6-7

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centres where the student and executives not only develop the conceptual and theoretical understanding but also knows the managerial implications of the same with the skills and competency inherited from the teaching excellence of a faculty. Faculty in the business schools make learn the students varied effective management strategies to handle different types of situations and problems. There are no equipments or machines available in the business schools like engineering, medical and other areas of technical education. Rather it also do not have any standard thumb rule in terms of measurement present that helps to conclude the efficacy of the situation or case and get the standard solution. In management education student learns only and only through the teaching style and intelligence of the faculty that develops the mind sets of students in having effective decision-making [4] .The field of management education is utmost important for the development of an economy. Management education is the nodal point for the development in other areas like engineering, medical, architecture, hotel; etc. The entire commercial activities of the nation depends on the theories and research implications in the area of business education, may it be business environment, international business ,banking and finance, business strategy, marketing , human resource or operations and production management .Every company needs to have effective management style for its growth and making profits. The income out of the commercial activities of the companies makes a big national income. Therefore, it is really essential to give a due concern towards the quality management education. But the scenario reflects a very sad picture on the front of management education .The major percentage of the faculty members are expected to retire in couple of coming years ahead. Those towards retirement is the major percentage of Ph.Ds in humanities.In the changing times, today Business schools expect a Ph.D or a NET qualified candidate in management for faculty position. And there emerges a gap when demand donot meets the supply. The big demand supply gap leads to the stage of ‘Faculty Shortage’. Today, the biggest challenge being faced by the technical educational institutions is the immense crunch of competent and qualified faculty. The

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observation being reported by the AACSB highlights that the reduced rate of enrolment in doctoral education and increasing the retirement of faculty members on the one hand and rapidly increasing rate in the enrolment of students in management education on the other hand altogether can pen picture the management education at risk reflecting the high rate of faculty shortage in the foreseeable future years [5] .There are about 4,000 business schools in India today, with estimated faculty strength of 30,000 .These schools have the approved capacity to offer post graduate degrees in management to about 3, 50,000 students every year .If the AICTE mandates to maintain a student to faculty ratio of 15:1 is taken seriously, and assuming a two year programme, then the Business Schools of India are already looking at a shortfall of 16,000 faculty members [6] .

doctoral and NET qualified candidates with competencies and teaching skills available for the teaching appointments.The Doctoral shortage and lack of NET qualified candidates directly or indirectly has become one of the reasons for faculty shortage because the scholars who are already very few in numbers after completion of research rarely go for academic career as they have the probability to get higher income from non-academic career; which is really a problem to be addressed.

Ph.D& NET Shortagein Management Education The decades had shown the rapid growth in the number of universities/colleges and enrollment of students in higher education but there is no such significant increase as the faculty strength, research related activities, and number of Ph.D holders/scholars is concerned. As per the Annual Report, MHRD 2011-2012 the number of research degrees (PhDs) awarded by various universitiesdecreased from 13,768in 2008-2009 to 11,161 in 2009-2010, thusregistering a decrease of 18.9%.Out of the total number awarded in 2009-2010, the Faculty of Arts had the highest number with 3490

The question arises that why India is facing the huge faculty crunch? The faculty crisis in India has raised a big question against the standards of quality education.It is of prime importance to investigate the major cause behind such scenario. The scenario in context to India has underpinned the shortage of

Figure 11: Faculty wise Doctorate Degrees (Ph.D.) awarded during 2009-2010* Discipline

Number of students

Percentage (%)

3490 3742 1007 337 573 767 469 150 123 503

31% 34% 9% 3% 5% 7% 4% 1% 1% 5%

Arts Science Engineering and Technology Medicine Agriculture Commerce and Management Education Veterinary Science Law Others

Source : UGC (2012) – ‘Higher Education in India at glance’

degrees, followed by the faculty of Science with 3742 research degrees. These two faculties together accounted for 65% of the total number of the total number of research degrees awarded. In the technical education, the faculty of Engineering and Technology had topped with as many as 1007 Ph.D degrees, followed by Agriculture faculty with 573 degrees, Education faculty with 469 degrees, Medicine faculty with 337 degrees, etc. Commerce & management had 767 degrees awarded [7] .The Vol. 6-7

poor count to the degrees awarded in the area of commerce & management is a big question against the quality and future of management education.It is observed that there is decreasing trend in academia research in terms of number of research degrees awarded by the Universities during 2009-2010 as compared to the figures for 2008-2009 which is evident from the figure. That directly or indirectly also becomes one of the reasons for faculty shortage in Indian higher education system.

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Stumpfet. al (2002) in his study on academic change and leadership explored the fact that deans of 273 US business schools have found that the biggest challenge being faced by the future business schools is imminent shortage of faculty members holding Ph.D degrees [8]. Similarly, (AACSB, 2003) reported the shortage of doctorates in business education expecting to be 1,142 in the coming next few years which would rapidly climb up to the shortage of 2,419 in 2013.The report indicated that in the United States, the country with the largest production of doctoral programmes in business, the number of business doctorates declined from 1,327 in 1995 to 1,071 in 2000 with the trend expected to continue in the future. By 2015, the US shortage of business Ph.Ds is anticipated to reach 2,500 [9]. The same phenomenon is affecting and will surely affect the other countries in the future, too. The findings of the report forecasted a decade ago had actually taken the real shape in the emerging scenario of management education in context to the strength of faculty. India is also expected to face a continued shortfall in faculties with PhD & NET Degree, which will affect the quality of education. Consequently, the level of education will also continue to fall short of industry expectations. On the one side recruitment process of central universities and esteemed national institutions has become so rigorous as per UGC norms for academic teaching jobs and on the other hand India is declining in the doctoral education year by year. The shortage of Ph.D holders and research scholars pursuing Ph.D in varied domains is one of the most possible reasons for the faculty shortage scenario in Higher education system of India. The study undertaken by some researchers tried to understand the reasons behind the shortage of business doctorates and thereby they explored that MBA students are more likely than doctoral students towards higher income .The beginning salaries of many MBA students exceed that of all but the senior most business faculty. The lower salaries of the business faculty also discourages the individuals to pursue their career in academics. Because of the low pay and association with in depth research, MBA students are not likely to find an academic career interesting and thus are not likely to enter a doctoral program [10]. If the people would not get enrol into the Ph.D Vol. 6-7

programs so how India could ever think for having good research productivity and publication of research papers in top tier journals.If the researchers would not exist so how come a country could attain the innovations in the research work.And that is what today India is facing the heat of poor research productivity in the varied domains.The study would specifically focus to management research only due to the nature of the study.

Faculty Shortage & Management Research

Poor

Count

to

The literal meaning of ‘Research’ is ‘Re-search’ that is searching again and again the concept in depth in order to gain knowledge of the multidimensional aspects of the subject. Research work leads to the innovation and innovation lies in exhaustive search for something. Examples are the mobile phones, laptops, technology, products; etc. These were some of the examples of fundamental researches where the scientists of India have achieved the good name. But what about the researchers in social sciences? The study would majorly emphasize on business schools as the present study is confined to management education. The premium business schools of India have been found with a very poor count in the research publications in comparison to other universities. The article entitled ‘Why Indian B-schools lag in publishing research papers’ published online dated December 6, 2013 in Business Today highlighted the fact with his finding that between 2009 to 2012 four thousand plus business schools altogether could only publish only 36 research papers in journals which are tracked by University of Texas Dallas (UT Dallas).On the other hand in the same period Harvard Business School,Boston, US has published 182 research papers and the highest amongst three i.e. the faculty members of Wharton Business School, Philadelphia, US gave contribution of 276 research papers in top tier journals [11]. The shocking figure is that reported is already clear from the figure..IIMLucknow could publish 1, IIM Ahemdabad 1, University of Hyderabad, IIT Bombay 1, IIM Calcutta 4, IIM Bangalore 6, and ISB 22 research papers. Seeing the mentioned figure, number of questions

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arises that IITs and IIMs were not even able to give the half of research papers published by ISB all alone. In the last 10 years ISB has made a good name in the field of management education lagging behind the IIMs and IITs in the area of research work and publications which is quiet evident from the figure. NirmalyaKumar and PhanishPuranam of the London Business School (LBS) in one of the study between 1990 and 2009 found that there were only 108 articles published by India based authors in 40 journals tracked by the Financial Times. Only 108 articles in 19 years that is 9 articles published per year by the entire faculty

of Business schools of India. If the Thinkers50 – a listing of the most influential business thinkers, compiled every two years – is an indication, Indians are almost cut out for the research in the field of management. The 2011 listing has as many as seven management gurus of Indian origin teaching in esteemed business schools abroad. They include LBS’s Kumar and Vijay Govindarajan, who teaches at the Tuck School of Management in Darmouth,NewHamsphire.India also appears to be afertile ground for some path breaking management theories.C.K.Prahalad’s ‘Bottom of the Pyramid’ and Govindarajan’s ‘Reverse

POOR COUNT Number of papers published between 2009 and 2012 IIM Lucknow: 276

1

Wharton Business IIM Ahemdabad: 1

School , US INDIAN CONTEXT

182

22

ISB:

Harvard Business

IIM Bangalore:

6

School ,US

IIM Calcutta:

4

IIT Bombay:

1

University of Hyderabad:

1

Source : Business Today (2012)-Why Indian B-Schools lag in publishing research papers Figure 2: Status of management research productivity in India Innovation’have their origins here. These Indians are doing so well in abroad but why not in India. To this Kumar of London Business School blames the business schools of India stating them teaching institutions which are not research oriented. He further adds by saying “Academic research can lay foundations for concepts that eventually influence practice. Concepts such as core competence, the capital asset pricing model and brand equity, are all originated in academic researches”. Signifying the importance of academic research he states that it would be really impossible for the business schools to attract best and competitive faculty without having a research orientation to which India has failed to, otherwise why Vol. 6-7

would India based management gurus would migrate to abroad. There are number of reasons like the attitude of B-schools not towards research orientation, Lack of adequate fund for research work and limited data available in Indian context; etc can be the roadblocks to management research in India. But major factor for such poor count of research publication in management research in India is faculty shortage, lack of potential in faculty members to conduct research and obsolete performance appraisal system where research work is not yet incentivize.Realizing the need of an hour, now the premium business schools like IIMs, IITs and ISB has designed the new performance management system

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incentivizing research, training and consultancies. The initiative taken by the institutions to this concern would really bring difference to business education.

Objectives of the Study • To discuss the shortage of NET and Ph.Ds in the area of Management Education and its impact on the quality management education • To highlight the crunch NBA accredited B-Schools are facing in terms of Ph.Ds ,Ph.D pursuing and NET qualified faculty members those working with them in numbers. Research Methodology The Study The study was exploratory in nature with survey being used as a method to complete the study.

Sampling Design • Population : Faculty members of accredited Business Schools in Northern India • Sample Size : 385 Faculty members • Sample Element : Individual respondent of various accredited Business Schools were the part of my study

Figure 1: Faculty members holding Ph.D degree Table 1: Ph.D holders Ph.D

Frequency

Percent

Yes

93

24.0

No

292

76.0

Total

385

100.0

Table 1 depicts the number of faculty members holding Ph.D degree in their respective area of specialization, working with the accredited business schools of Northern India. The table shows that 93 (24%) faculty members are holding Ph.D degree whereas majority of the faculty members i.e. 292 (76%) are not holding Ph.D degrees.

• Sampling Technique : Non Probability sampling Tools used for Data Collection • Self – designed questionnaire was used to solicit the response from respondents Results & Discussion The self-designed questionnaire was distributed among the faculty members of the accredited business schools in northern India and thereby data collected by them was analyzed using SPSS.

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Figure 2: Faculty members NET qualified

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Table 2: NET qualified NET qualified

Implications of the Study

Frequency

Percent

Yes

74

19.0

No

311

81.0

Total

385

100.0

Table 4 shows the number of faculty members as NET qualified. The amazing thing that came into notice was that only 74 (19%) of the faculty members working in the accredited business schools of Northern India are NET qualified. Whereas 311 (81%) of the faculty members were found not NET qualified.

Figure 3: Faculty members pursuing Ph.D Table 3: Ph.D pursuing NET qualified

Frequency

Percent

Ph.D pursuing

Frequency

Percent

Yes

123

32.0

No

262

68.0

Total

385

100.0

Table 3 shows the number of faculty members pursuing Ph.D in their respective area of specialization. The finding which cannot be negligible in any concern is that although there is a very low %age of the faculty members holding Ph.D degree. And on the other hand, which cannot be avoided is only 32% of the faculty members are pursuing Ph.D degree and 68% of the faculty members are not pursuing Ph.D degree or rather it would be right to say that majority of the faculty members, those associated with accredited business schools are not concerned for their career planning and development.

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The study is useful for the All India Council of Technical Education (AICTE) as the study limits to the NBA accredited Business Schools. The study is also helpful for the administrators and academic leaders of the private and public owned institutions in higher education .The findings of the study portray the real scenario of the said business schools which are having Ph.D and NET qualified faculty abysmally low in numbers.. The developing shortage of doctoral education and NET shortage is a serious concern to which programme administrators, authorities and academic leaders of the NBA accredited Institutions , AICTE and institutions of other streams need to give a due importance.The adverse impact of shortage in doctoral education on the research and publication productivity is discussed detail in the existingstudy.The study has a wider scope in the area of management education to work on.Multi-dimensional aspects of the management education can be discussed under Total Quality Management approach in Higher Education

Conclusion The Findings of the study highlights the future management education colleges at risk. The acute shortage of the doctorals and NET qualified faculty offering their services in the accredited business schools are found to be abysmally low which is really a question against the quality management education. After ‘n’ number of benchmarks and parameters, an institution gets accredited in which the qualification and research contribution of a faculty member plays a major role. But if such accredited institutions will not only stimulate their faculty members towards doctoral education enrolment (part time) and qualifying UGC NET. So, how could the business faculty could give the practical exposure and deep knowledge to the students in terms of live projects?. Today, India is facing Industry-Academia gapand thereby the placements of the students are not touching the sky due to the lack of practical implication of the theory and subject .Liveprojects always make the students understand the multidimensional aspects of the subject as well as managerial implications. If the faculty

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members themselves would not be versed in research methodology so how would they give their best of inputs? Today, India requires not only academicians but also the researchers. Therefore, It becomes the prime responsibility of every institute and individual to support their faculty members towards their career advancement and stimulate them towards doctoral education enrolment and qualifying NET as well as incentivize them for the research activities and which will directly add value and quality to their institution.Promoting research activities in terms of publication in ‘A’ star journals ,producing Ph.D& increase in the number of UGC NET in the area of management education can add quality to business education.

qualified-teachers Governor /articleshow/ 3021 621 1. cms ) on 24-02-2014 at 11:25 AM. [4]

Kaur, P. &Awasthi,A.P.(2013).An empirical study on management education at risk :Talent (faculty) crisis. Global Journal of Business Management, Volume 7 ,No. 2, pg 1-9.

[5]

AACSB (2002). Management education at risk.Report of the Doctoral Faculty Commission.

[6]

Puranam, P. (2013).PhD Training in Management in India: Is there a Doctor in the House?. ISB Insight, Volume 10,Issue 5,pg 511.

[7]

University Grants Commission (2012, March 21).Higher Education in India at glance. [Brochure], New Delhi, India: Ved Prakash. Retrieved from the UGC website: (http:// www.ugc.ac.in/ugcpdf/208844_HEglance 2012.pdf) on 18-03-2014 at 1:57 PM.

[8]

Stumpf, S., M. Najdawi and J.Doh (2002).Drivers of change in business schools.Bized, March/April,6-7.

[9]

AACSB (2003).Sustaining scholarship in business schools.Report of the Doctoral Faculty Commission.

[10]

Evans, D.J. & Fuller, J.A. (2011).Understanding the shortage of business doctorates. The Journal of Applied Business Research, Volume 4, No.1, pg.37-45.

[11]

Business Today (2012, October 28). Why Indian B-Schools lag in publishing research papers(Onlineedition).Retrieved from the Business Today website: (businesstoday. intoday.in/story/best-b-school-research-lag/ 1/188766.html) on 6th December 2013 at 3:48 PM.

References [1]

[2]

[3]

Education Insider (2013, November 12). India facing faculty famine. Retrieved from the Education Insider website: (http:// www.education insider.net/ detail news. php?id =643) on 24-02-2014 at 11:23 AM. Minglebox( 2015, March 2 ). Faculty crunch at IITs reaches 32%;IIMs witness 22% shortage.Retrieved from the Minglebox website: ( h tt p : / / w w w . m i n g l e b o x . c o m / a r t i c l e / engineering/faculty-crunch-at-iits-reaches-32percent-iims-witness-22-percent-shortage) on 23-05-2015 at 12:28 PM. Times of India (2014, February 11). Colleges in dire need of qualified teachers: Governor (Online edition).Retrieved from The Times of India website: (http://timesof india. Indiatimes .c om / city/pune/Colleges-in-dire-need-of-

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63 Influence of Psychological Capital on Employees’ Outcomes: The Moderating Role of Perceived Organizational Support Musarrat Shaheen* & Arun Tiwari **

ABSTRACT

The current paper develops a conceptual framework to investigate the moderating effect of Perceived Organizational Support (POS)in the relationship between Psychological capital (PsyCap) and employees’ outcome such as Job satisfaction, Job involvement and Organizationalcitizenship behavior. Structural equation method (SEM) will be used to test this conceptual framework. Data is collected from the sales force of insurance company in major metro cities of India. It isproposed that perceived support in management will enhance the impact of PsyCap on employees’ outcomes. This study will not only add to the body of literature on the significant influence of PsyCap, but will also bring forth the crucial effect POS on the perception of employees in today’s turbulent work environment. Further, the implications and directions for future research have also been discussed. Keywords: Psychological Capital (PsyCap), Perceived Organizational Support (POS), Job Involvement, Job Satisfaction, Organizational Citizenship Behavior (OCB), SEM, Insurance.

Introduction The working environment is chaotic and full of turbulence owing to economic uncertainty, heightened geo-political unrest and threats, globalization, 24/7 competition, and never ending advanced technology (Luthans, 2002). To face these challenges we need to initiate a proactive positive behavior as recommended by Seligman &Csikszentmihalyi (2000). Several scholars have acknowledged that positive behaviors bring favorable outcomes at workplace (Staw, Sutton, &Pelled, 1994). Till date great deal of attention had been given to value the constructs of positive reinforcement, positive affect and emotion, and even humor * **

(Luthans, 2002). Fred Luthans and his colleagues (2004) conceptualized a concept called Psychological Capital (PsyCap), which has its foundation in positive organization behavior. PsyCap is a higher-order core construct of state-like psychological resource capacities of self-efficacy, hope, optimism and resilience.In a meta-analysis PsyCap has been proved to have significant positive impact on employees’ attitude, behavior and performance (Avey et. al., 2011). Similar to this, in another meta-analysis on previous literatures on performance and workplace activities Rhoades and Eisenberger (2002) proposed that Perceived Organizational Support (POS) enhances the

Research Scholar, IFHE University, IBS Hyderabad. Operation Manager, Jamshedpur Transport Co Ltd.

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Influence of Psychological Capital on Employees’ Outcomes: The Moderating Role of . . .

well-being and positivity in employees and this leads to desired performance and efficiency. Both PsyCap and POS produce a conducive environment for higher level of performance and productivity, but till date limited study has captured the effect of POS on the relationship between PsyCap and favorable outcomesat workplace. Whether POS facilitate, enhance or reduces the influence of PsyCap on these outcomes needs more exploration. Further scant literature have tried to explored the influence of PsyCap on job involvement, as the studies of PsyCap is in its infant stage (Luthans, 2002). Thus keeping these gaps in literature this research proposed to examine the following research questions.

Research questions The purpose of this study is to explore following questions:

1. What influence does Psychological Capital will have on the employee’s positive outcomes such as job involvement, job satisfaction and extrarole behavior? 2. Whether perceived organizational support (POS) will moderate the relationship between PsyCap and employees’ outcomes. Literature Review This section provides an overview of the all the variables used and the evidence for the relatedhypotheses in the proposed model.

Psychological Capital Scholars have raised concern for the lack of development of core concepts in organization behavior Seligman &Csikszentmihalyi (2000). They have also suggested for a rigorous study on the positivity of the employees at workplace. Positive psychology advised that one should focus on what is right with the people and promote it rather than just fixing what is wrong with people. Fred Luthans along with his colleague (2004) contribute to this need and defined a psychological state called Psychological Capital (PsyCap), which focuses on the inner abilities such as self-efficacy, hope, optimism and resiliency. These abilities seed a positive attitude towards job and a capacity Vol. 6-7

505

to bounce back in adverse situations at workplace(Luthans& Youssef,2004). PsyCap is found to foster higher & improved performance such as higher productivity, better customer service, less absenteeismand more employee retention (Luthans et. al., 2004). The four dimensions of PsyCap are: 1) Self-efficacy/ confidence; 2) hope; 3) optimism; and 4) resilience. Stajkovic and Luthans (1998) define confidence (or self-efficacy) as the “individual’s conviction… about his or her abilities to mobilize the motivation, cognitive resources, and courses of action” at the workplace. Snyder and his colleagues define Hope as “a positive motivational state” of an individual(Synder, Sympson, Ybasco, Borders, Babyak, Higgins,1996). Optimism is found to be more closely linked with overall positive psychology than the other constructs. Seligman (2002) explains optimism on the basis of one’s explanatory style of good or bad events in permanence and pervasiveness. Optimists interpret bad events as being only temporal while pessimists interpret bad events as being permanent. Resilience has received scarce attention in organizational behavior research. It means a capacity to “bounce back” in adverse situation (Wagnild& Young, 1993). Resilience is found to have profound implications for promoting competence among individuals (Masten, 2001).

Perceived Organizational Support (POS) Another concept which gained momentum just parallel to this POB among researcher and scholars is perceived organizational support (POS). Perceived organizational support (POS) delineates that employees have a “general belief that their work organization values their contributions and cares about their well-being” (Rhoades &Eisenberger, 2002, p. 68). Previous studies suggested that employees use POS as an indicator of the organization’s benevolent or malevolent intent, as an exchange towards employee effort for reward and recognition” (Lynch, Eisenberger, &Armeli, 1999).

Positive Employee Outcomes Out of the several organizational outcomes we will be focusing on three outcomes: 1) Job Involvement; 2) Job satisfaction; and 3) Extrarole behavior. Job involvement states that how

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an individual identify with and shows interest in his work (Cropanzano,Howes, Grandey, &Toth, 1997). Job satisfaction refers to employee’s overall affect laden attitude toward his job (Islam, Ahmad, & Ahmed, 2014). Extrarole is the voluntary behaviors, which are found to be directly linked to job descriptions, and contribute to the overall performance of the organization. It is called organizational citizenship behavior (OCB), which has sufficient empirical evidence of predicting high performance, satisfaction, commitment and involvementamong employees (Organ, 1997; Podsakoff, &MacKenzie, 1997; Zhang, 2014; Islam, Ahmad, & Ahmed, 2014).

The Conceptual Model and Formulation of Hypotheses The model in Figure: 1 links Psychological Capital to the employees’ three positive workplace outcomes, such as Job Involvement, Job Satisfaction and Organization Citizenship behavior. Perceived Organizational Support is proposed that will moderate this relationship. The hypotheses related to the model are formulated and explained below: Empirical studies have suggested that selfefficacy, hope, optimism and resilience produces a positive state-like capacity (PsyCap) to an individual (Luthans, 2002, 2004; Nelson & Cooper, 2007;Wright, 2003). This capacity makes the employees more efficacious, optimistic and resilient in times of adversity and unfavorable situations (Luthans et. al., 2004). Bandura’s social cognitive theory has well asserted that an efficacious employee will perform well even in challenges work environment because they can accept significant challenges and put forward the necessary effort to achieve the set goals (Bandura, 1997). Hope is the motivational state of individuals (Synder et al., 1996) which enable individuals to remain persistence toward goals and if needed it aids in redirecting alternative paths to achieve the goals to succeed. An efficacious and hopeful employee who not only accept challenges but also if needed redirect paths to achieve success and have contingency plans to overcome obstacles should perform better and will have higher satisfaction (Luthans et al.,2007). Based on the above arguments we can propose following Vol. 6-7

hypothesis.

H-1: Psychological Capital will have positive impact on employees’ Job satisfaction. Job involvement is the degree by which an individual is engaged and involved in his present job (Paullay,Alliger, & StoneRomero,1994). Job involvement predicts organizational effectiveness and employees’ motivation to perform his work (Diefendorff, Brown, Kamin, & Lord, 2002). These links stem from the notion that being engrossed in work enhances motivation to work which in turn impacts the job performance and other workplace outcomes. In the job demand model (JD-R) employees’ personal resources such as self-efficacy, hope, optimism, and resiliency are found to make employee more engaged and engrossed in his work (Bakker & Leiter, 2010). Efficacy makes an individual more confident and competence which brings satisfaction when one can complete his task on time (Bandura, 1997). The completion of work on time makes one more interested and absorbed in his work. Another dimension of PsyCap is optimism which makes an individual more optimistic about his success. Success at work will foster positive belief in his work and a person will find himself identify with his work (Avey et al., 2008b). Hope the third dimension empowers one to look for all the channels which lead to success at work. This hopeaids in generating alternative pathways to complete the work and achieve success thus making one more confidence and capable to complete work (Synder et al., 1991). The individual possessing resilience will thrive through all adversities and will be at ease even in uncomfortable zone.The change and challenges at work will not put them down and they will perform without any difficulty (Masten& Reed, 2002). Thus on the basis of above argument we can propose following hypothesis:

H-2: Psychological Capital will have positive influence on employees’ Job Involvement. Fredricksongave broaden and build theory of positive emotion. It postulates that positive emotions broaden the individual’s “momentary thought-action repertoires and build their enduring personal resources, ranging from physical and intellectual

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resources to social and psychological resources” (Fredrickson, 2001).Psychological Capital is the personal resources which foster positivity among employees. In a meta-analysis (Avey et al., 2011) suggest that an employee who have high level of positivity will display more extra-role behavior (OCB) than employees who are negative.OCB is the extrarole behavior which is discretionary in nature. If we examine this behavior deeply from a broader and holistic perspective than we will found that it is an outcome of positivity. Broaden-build theory states that people broaden their thought-actionsrepertoires which increasethe positive thought process and individual get more engaged in proactive extrarole behaviors such as making suggestions for improvement and sharing creative ideas. On the basis of above argument we propose following hypothesis:

H-3: Psychological Capital will have positive influence on employees’ organizational citizenship behavior. At the organizational level, similar to human and social capital, PsyCapprovides leverage, return on investment, and competitive advantage through the improved performance. The Job and personal resources predict higher satisfaction, involvement and performance (Bakker & Leiter, 2010; Luthans et al., 2007). But perception of employees about the support

system of their organization plays a crucial role in these outcomes. These desired outcomes get more pertinent if employees’ perceive that their organization will recognize their efforts and will recipocrates in the same degree. Perceived organizational support (POS)is the perception of employees about the support and aid from their organization. Itis suggested that individuals with higher level of POS have more positive attitude towards their job and they get more attached to their work and exhibits voluntary extra-role behavior towards organization (Eisenberger, Fasolo,& DavisLaMastro, 1990). POS also contribute to overall job satisfaction and involvement by meeting socio-emotional desires, increasing performance and reward expectancies, and indicating the availability of aid when needed (Rhoades &Eisenberger, 2002). Thus we can say that POS do enhances the relationship between PsyCap and employees positive outcomes. In absence of support and fairness perception employees will not be able to perform and display any citizenship behavior. Hence we can propose the following hypothesis:

H-4: Perceived organizational support will moderate the relationship between psychological capital and employees positive outcomes such as job satisfaction, job involvement and organizational citizenship behavior.

Perceived Organizational Support

Job Satisfaction

Job Involvement

Psychological Capital

Organizational Citizenship Behavior Figure 1: Conceptual model

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Methodology To empirically test the model (refer Figure 1) and the related hypotheses we employed a survey methodand analyzed the same

byStructural Equation Method.The measurement instruments for all the construct were taken from the existingliterature (see Table 1).

Constructs

Sources of Measurement items.

PsyCap

12 Items from Luthans, Avolio, Avey, & Norman (2007) 12

POS

17 items from Eisenberger, Hungtington, Hutchison, & Sowa, (1986)

Job involvement

20 items from Kanungo, (1982).

Job satisfaction

Job Description Survey (JDS) scale of Hackman, & Oldham (1975)

Extra-role behavior (OCB)

20 items from Moorman & Blakely (1995).

Sample and data collection Data will becollected through both online and offline questionnaire survey in majormetro cities. Previous studies have confirmed that offline and online surveys producesimilar and equivalent results (Deutskens, de Ruyter, &Wetzels, 2006).The soft copy of the questionnaire is converted into online survey form and will be used to collect data online. The online questionnairelink will be sent with an invitation letter to the email IDs of the sales force of majorgeneral insurance companies in metro cities.These sales forces have to face a lot of challenges like threat from new entrants, competitors like banks are providing solutions to every insurance needs, and the dynamic premium rates to retain the customer (IRDA Annual Report-13-14). The offline survey will be administered in person face to face where respondents will be asked to fill up the questionnaire on a seven-point Likert scaleranging from ‘strongly disagree’ to ‘strongly agree’.

Analysis The research model (Fig. 1) will be tested through Structural Equation Model(SEM). It is a technique which facilitates both CFA and regression under one roof.There are many benefits of using SEM, first It allows one to examine simultaneously all of the proposed hypotheses, rather than separateregression analyses for each hypothesis. Second, the testing of the fully specified model allows us toexamine which dimensions of the PsyCap construct are driving therelationship with the employee outcomes variables. Third, in SEM the overall model fit indices provide the validity of the proposed conceptual model. Vol. 6-7

Finally, SEM is a natural extension of the confirmatory factor analysis (CFA) that we conductto assess the validity of the instruments (Milliman, Czaplewski, & Ferguson,2003).

Discussion We are in the process of data collection. Hence,I will add this part once the data is collected.

Conclusion and Implications Managerial Implications Today’s market place is unpredictable and dynamic in nature. Organizations are facing stiff competition, product life cycle has reduced, their shelf life is nomorelonger, customer’s demands are increasing they want to be delighted. In this scenario organizations want employees who could provide sustenance to them through their intellectual and social capital(Luthans et al., 2004). To enhance the productivity and efficiency organizations want to have best fit for work (Kristof, 1996). Many companies have acknowledgeda shortage of talent which gave rise to a “War for Talent’ (Michaels, Handfield-Jones, & Axelrod, 2001). Thedimensions of PsyCapnot only boost confidence but also instill optimism and hope in the employees. With these dimensions employees are more resilient and positive and ready to face the changing needs of the market (Luthans et. al., 2007). These dimensions are not fixed traits and state like which can be developed even with small interventions. Further all the dimensions of PsyCap have been empirically tested and validated and found to have significance effect on performance, productivity, customer service, and retention (Luthans, Avey,Avolio, Norman, & Combs,

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2006). Hence developing these dimensions will prove beneficial. This study will give a solid platform to the need of PsyCap in today’s turbulent working environment. HRD managers can design interventions to develop these dimensions to make their work force more satisfied, involved and engaged in voluntary behaviors.

509

References 1.

Avey, J. B., Reichard, R. J., Luthans, F., &Mhatre, K. H. (2011). Meta-analysis of the impact of positive psychological capital on employee attitudes, behaviors, and performance. Human resource development quarterly, 22(2), 127-152.

2.

Avey, J. B., Wernsing, T. S., &Luthans, F. (2008). Can positive employees help positive organizational change? Impact of psychological capital and emotions on relevant attitudes and behaviors. The Journal of Applied Behavioral Science, 44(1), 48-70.

3.

Bakker, A. B., & Leiter, M. P. (Eds.). (2010). Work engagement: A handbook of essential theory and research. Psychology Press.

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Bandura A. 1997. Self-Efficacy: The Exercise of Control. New York: Freeman

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Cropanzano, R., Howes, J. C., Grandey, A. A., &Toth, P. (1997). The relationship of organizational politics and support to work behaviors, attitudes, and stress. Journal of Organizational Behavior, 22, 159–180.

6.

Deutskens, E., de Ruyter, K., &Wetzels, M. (2006). An assessment of equivalence between online and mail surveys in service research. Journal of Service Research, 8, 346–355.

Future Direction

7.

The study paves way for future research needed to explore the significant role of POS on several other employees’ outcomessuch as commitment, trust, turnover intention, absenteeism etc. Further the above model can be tested in other context with different sample set to have a more generalability.Other intervening factors like job characteristics and job demand can be tested in the relationship between PsyCap and employees’ outcomes.

Diefendorff, J. M., Brown, D. J., Kamin, A. M., & Lord, R. G. (2002). Examining the roles of job involvement and work centrality in predicting organizational citizenship behaviors and job performance. Journal of Organizational Behavior, 23(1), 93-108.

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Eisenberg, R., Fasolo, P., & Davis-LaMastro, V. (1990). Perceived organizational support and employee diligence, commitment, and innovation. Journal of Applied Psychology, 75(1), 51-59.

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Eisenberger, R., Hungtington, R., Hutchison, S., & Sowa, D. (1986). Perceived Organizational Support. Journal of Applied Psychology, 71, 500507.

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Fredrickson, B. L. (2001). The role of positive emotions in positive psychology: The broadenand-build theory of positive emotions. American psychologist, 56(3), 218.

11.

Hackman, J. R., & Oldham, G. R. (1975). Development of the job diagnostic survey. Journal of applied psychology, 60(2), 159.

The recruitment department can also explore these dimensions in the new incumbents to select the best fit for the organization, to have a tailor made ready workforce who can face the challenges of the external markets (Kristof, 1996).

Theoretical Implications This study will contribute to the existing literature of PsyCap which is still in its infant stage (Fred Luthans, 2002). Limited studies have shown the impact of PsyCap on Job Involvement. The moderating effect of POS on the relationship between PsyCap and employees outcomes is also not explored till date. The role of POS shown in this study will bring awareness among the policy makers and the need for the proper support systemwill be acknowledged.

To conclude we should inculcate more positive feelings in our employees to make them more robust from inside rather than just correcting their problems situation to situation. If the internal psychological state of employees are stronger than they will not need external remedies for the hindrances in their work. Further organizations need to be more transparent and fair in their approach to facilitate a conducive working environment.

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12.

https://www.irda.gov.in/ADMINCMS/cms/ frmGeneral_NoYearList.aspx?DF=AR&mid=11.1 assessed on 19.04.2015

13.

Islam, T., Ahmad, U. N. U., & Ahmed, I. (2014). Exploring the Relationship Between POS, OLC, Job Satisfaction and OCB. Procedia-Social and Behavioral Sciences, 114, 164-169. doi:10.1016/j.sbspro.2013.12.678

14.

Kristof, A. L. (1996). Person organization fit: An integrative review of its conceptualizations, measurement, and implications. Personnel psychology, 49(1), 1-49.

15.

Luthans, F. (2002). The need for and meaning of positive organizational behavior. Journal of Organizational Behavior, 23(6), 695-706.

16.

Luthans, F., & Youssef, C. M. (2004). Human, Social, and Now Positive Psychological Capital Management: Investing in People for Competitive Advantage. Organizational dynamics, 33(2), 143-160.

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Luthans, F., Avey, J. B., Avolio, B. J., Norman, S. M., & Combs, G. M. (2006). Psychological capital development: toward a micro intervention. Journal of Organizational Behavior, 27(3), 387-393. Luthans, F., Avolio, B. J., Avey, J. B., & Norman, S. M. (2007). Positive psychological capital: Measurement and relationship with performance and satisfaction. Personnel psychology, 60(3), 541-572. Lynch, P., Eisenberger, R. and Armeli, R. (1999), “Perceived organizational support: inferior versus superior performance by wary employees”, Journal of Applied Psychology, Vol. 84, pp. 467-83. Masten, Ann S. 2001. Ordinary magic: Resilience process in development. American Psychologist 56/3 (March): 227-239.

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Michaels, E., Handfield-Jones, H., & Axelrod, B. (2001). The war for talent. Harvard Business Press.

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Milliman, J., Czaplewski, A. J., & Ferguson, J. (2003). Workplace spirituality and employee work attitudes: An exploratory empirical assessment. Journal of organizational change management, 16(4), 426-447.

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Moorman, R. H., & Blakely, G. L. (1995). Individualism collectivism as an individual difference predictor of organizational citizenship behavior. Journal of organizational behavior, 16(2), 127-142.

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Nelson, D., & Cooper, C. L. (Eds.). (2007). Positive organizational behavior. Sage.

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Organ, D. W. (1997). Organizational citizenship behavior: It’s construct cleanup time. Human performance, 10(2), 85-97.

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Low Cost Carriers (LCC) in the Indian Aviation Space: A Contemporary Indian Perspective

64 Low Cost Carriers (LCC) in the Indian Aviation Space: A Contemporary Indian Perspective Anupama Ghoshal* & Dr. Soney Mathews**

ABSTRACT

The paper discusses in case study format the present struggle in the low cost airlines market with players like Indigo, SpiceJet, Jet Airways, and GoAir etc. The case describes the contemporary events, challenges and opportunities prevailing in the Indian aviation sector with special focus on the low cost carriers (LCC). The case also outlines the implications of the factors affecting LCC operations for the contemporary Indian consumer. The present case study can be used for classroom discussions in marketing, strategic marketing and consumer behavior to describe the strategies of the LCC players in contemporary Indian market. The content of the case study can also be used to further develop detailed cases on the individual airline companies competing in the LCC space. Keywords: Low cost carriers, aviation, and consumer behavior.

Introduction Aviation is believed to be great catalyst for the economic growth, social development and tourism across communities, societies and economies. Air transport provides about 56.6 million jobs and contributes to more than USD 2.2 trillion in the global gross domestic product (GDP). It enhances connectivity and provides access to foreign markets (http:// www.ibef.org). Air passenger traffic in India is increasing on a tremendous pace. The sub-continent’s airport infrastructure is undergoing modernization with the induction of most advanced facilities. It includes setting up of new Greenfield airports and installation of security, surveillance and air traffic navigation systems. According to the Minister for Civil Aviation, the Indian aviation sector contributes to approximately about 1.5 per cent of the GDP, * **

and can be considered to contribute to the economic development of the country. The country is estimated to have a huge air travel potential leading to a lot of growth prospects for the aviation sector.

The Indian Civil Aviation Space The Indian civil aviation industry facilitates connectivity and access to international markets. Indian aviation attracts manufacturers, tourism boards, airlines, global businesses, individual travellers, shippers and businessmen both nationally and internationally. The sector currently supports 56.6 million jobs and accounts for over US$ 2.2 trillion of the global gross domestic product (GDP). Air passenger traffic in India is increasing on a tremendous pace. The subcontinent’s airport infrastructure is undergoing modernization with the induction of some of

Research Scholar (Ph.D), Department of Management, JAIN University, Bengaluru, India. Associate Professor, Faculty of Business Communication and Law, INTI International University & Colleges, Malaysia and Research Guide, Jain University, India.

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the most advanced facilities. It includes setting up of new Greenfield airports and installation of security, surveillance and air traffic navigation systems. The civil aviation sector of the country has ambitious growth plans. The country envisions becoming the third largest aviation market globally, by 2020 from its present position of being the tenth largest market in the world. By 2030, the Indian is expected to become the largest aviation market globally. The vision looks possible based on the presence of a large consumer base that seeks value offerings in the transportation space, developments occurring to aid the aviation infrastructure requirements and government policies that looks promising not only to ‘Make in India’ but also stimulate sustainable market operations for both operators and the customers.

The Indian Market By 2030, India is expected to have a working population that would be three times that of the United States of America (USA). The working population, comprising of people aged between 15 and 64 years is estimated to increase from 780 million in 2011, to about 900 million by 2030. The middle income class of the country is also expected to grow from 160 million in 2011, to become 267 million by 2016, thus becoming almost three times that of the German population. The civil aviation industry in India has been characterized by growth and developments of low-cost carriers (LCC), modern airports, foreign direct investments (FDI) in domestic airlines, cutting edge information technology (IT) interventions and a growing emphasis on regional connectivity. Market size estimates put the Indian civil aviation industry to be amongst the top ten in the world with a size of around USD 16 billion (http://www.ibef.org).

Developments in the Aviation Sector The aviation job market is expected to improve in FY15 with Air Asia’s joint venture with the Tata group, a low-cost carrier (LCC) that began in June, 2014 (http://www.ibef.org). The foreign direct investment (FDI) inflows in air transport (including air freight) during April Vol. 6-7

2000 to July 2014 stood at Rs 2,348.12 crore (US$ 383.63 million), as per data released by Department of Industrial Policy and Promotion (DIPP). The following are some of the major investments and developments in the Indian aviation sector (http://www.ibef.org):

 IndiGo has signed a US$ 2.6 billion agreement with the Industrial and Commercial Bank of China (ICBC) to purchase 30 aircrafts.  SpiceJet Airlines had signed a contract with GE aviation to use GE’s Flight Efficiency Services (FES) to support its fleet of 52 Boeing 737 and Bombardier Q400 aircraft.  Air Costa has made capital expenditure plan for about Rs 600 crore (US$ 98.04 million) to acquire new aircraft to strengthen its fleet and expand its network.  Boeing has plans of installing an aircraft manufacturing base in India. The initiative would be a part of the ‘Make in India’ programme,  Vistara has signed inter-line agreements with Singapore Airlines and SilkAir.  Tata Group launched its full-service Vistara airline on January 9, 2015.Vistara began with the Mumbai-Ahmedabad route and plans to expand to other cities later. India’s aviation sector has been expanding capacity. According to the insight generated by Centre for Asia Pacific Aviation (CAPA) India Aviation Outlook report, the last seven years have been very difficult for the Indian aviation sector with a cumulative loss of about USD 10.6 billion. In the FY 2013-2014, the combined loss of the industry stood at approximately USD 1.7 billion and the situation that is in line with the loss expectation of the industry at around Rs USD 1.3-1.4 billion of FY 2014-2015 (http://www.businessinsider.in). SpiceJet, an LCC player, faced an accrued net loss of Rs 1003 crore in FY 2013-2014, that was approximately five times more than its annual net loss of Rs 191 crore in FY 2012-2013 (http://www.ibef.org). The only two airlines that have posted profits over the last couple of years are low cost carrier

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GoAir and Indigo. GoAir has posted approximately Rs 100 crore profit in both financial years. Indigo Airlines posted whopping profits of Rs 787 crore in FY 20122013, its current fiscal profits are not available yet experts claim that it had stayed profitable this year too. Clearly, so far, the low cost carriers look to be in a better position over the full service ones. The market shares and passenger load traffic of some of the leading LCC players in the aviation sector feature Indigo, Go Air, Spicejet and Jetlite. Some of the other airlines that operate in the aviation sector are Jet Airways, Air Costa, Air Asia and the public sector undertaking (PSU) airline, Air India. Passenger load factor measure the average occupancy rate of flights. The LCC players Indigo, GoAir, Spicejet and Jetlite have substantial passenger load traffic. Indigo has a market share of 29.5 per cent with passenger load traffic of 89.6 per cent while GoAir has about 9 per cent market share with about 85.8 per cent passenger load traffic. Jetlite on the other hand, has 5.4 per cent of the market share with 77.2 per cent of passenger load traffic. Spicejet has a market share of 19.8 per cent with 80.9 per cent of passenger load traffic. Jet Airways has 17.1 per cent market share with about 75 per cent of passenger load traffic. The public sector aviation player, Air India has about 19 per cent of the market share with about 82 per cent of passenger load traffic. The total aircraft movement recorded a CAGR of 8.4 per cent over FY2006-2013 as shown in Figure 1 below (http://www.ibef.org). Figure 1: Aircraft movement in India

Source: http://www.ibef.org

The total passenger traffic in the country reached 159.3 million during FY2013 as illustrated in Figure 2 below. Vol. 6-7

Figure 2: Passenger traffic in India.

Source: http://www.ibef.org

Figure 3: Yearly comparison of the market Share of the airlines in the Indian market.

Source: http://articles.economictimes.indiatimes.com

IndiGo, one of the leading players in the low cost carrier (LCC) space of the country achieved the leadership in the domestic passenger aviation market in April 2014, garnering 31.6 per cent of the market share carrying almost one-third of domestic air travelers during the month. The airline gained from the sales promotion that was initiated with the discount schemes prevailing in February spanning for travels done till travels done in April. The airline carried 16.8 lakh passengers in April that was 11 per cent more passengers than 15.1 lakh passengers that was carried by the airline during the same month of the previous year. The Gurgaon-based IndiGo airlines had increased its capacity that helped it increase its passenger numbers. Indigo added around one aeroplane monthly, having around 13,777 departures in April as compared to 11,426 departures of the same month of the previous year. Inspite of the positives, there was a reduction in the load factor of Indigo in April that was at 76.9 per cent as compared to 83.3 per cent of the previous year. IndiGo contributed to the increase of air travellers to

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about 53.2 lakh as compared to 50.8 lakh passengers reported for the same month of the previous year. SpiceJet, on the other hand, cut their capacity in April 2014 and had 9,190 departures during the month as compared with 9,438. The airline carried about 9.5 lakh passengers, a 4 per cent reduction as compared to the passenger traffic carried by the airline in the previous year. The airline had set off five discount windows between January and March but managed to achieve a market share of only 17.9 per cent as compared to 19.6 per cent of the same month a year earlier. The lower capacity did not help in Spice-Jet’s occupancy rate or load factors, which fell marginally to 73 per cent in April as compared to 75 per cent of the same period of the previous year. The Jet Airways group (including Jet Airways and JetLite) took the second spot in terms of market share for April with Jet Airways securing a market share of 17.5 per cent, while JetLite achieved a share of 4.3 per cent, thus making the Jet Airways group achieve a combined market share of 21.8 per cent that was of course marginally lower than the 22.6 per cent that was achieved by the group a year earlier. The LCC player, JetLite, which operates under the Jet-Konnect brand, managed to fill up its flights more with a 76 per cent load factor in April compared with Jet Airways, which had a load factor of 70.9 per cent. Air India also saw a reduction in its market share erode from 19.2 per cent of the same month of the previous year to 18.3 per cent in April 2014. Air India carried about 9.74 lakh passengers during the month with an average load factor of 73.3 per cent. The Mumbai-based low-cost carrier GoAir increased its market share in April to 9.5 per cent.

Conclusion Indian consumers look for value for money as one of the important aspects of choosing service providers. Almost forty per cent of the large Indian population is estimated to the upwardly mobile middle class who seek cheapest options that could be available for air travel. There is large untapped potential for growth in the Indian aviation industry due to the fact that access to aviation is still a dream for nearly 99.5 per cent of the Indian population. Vol. 6-7

Developing appropriate policies blended with focus on quality, optimizing cost and stimulating passenger interest, could lead India to be in a favorable position to becoming the third largest aviation market by the year 2020 and the largest aviation market by the year 2030. The case traces the developments in the Indian civil aviation sector especially the low cost carriers of the industry who are expected to play a major role in the development of the air travel market of the country. As the late Prof. Theodore Levitt pointed out way back in the seventies, marketers have to avoid their own ‘myopia’ (Levitt, 1975) in order to stay out of trouble. He illustrated how the myopic view of the railroads business stagnated its growth, as they failed to perceive that they were actually in the ‘transportation space’, instead of just being in the ‘railroad business’. A product oriented definition of the business led to a situation where the railroads saw ‘cars, trucks, airplanes, even telephones!’ fulfilled the needs of customers. Prof. Levitt also goes on to illustrate how Hollywood managed to ‘barely escape’ the onslaught of television. He highlights how Hollywood had made the cardinal mistake of defining itself as being in the ‘movie’ business, instead of understanding that it was in the ‘entertainment business’. Prof. Levitt claims that Hollywood thus suffered from a ‘fatuous contentment’ with its productcentric view that led it to view the television sector as its competitor instead of looking at it as a source of opportunity to extend its entertainment business. Hollywood later embraced television and thus sustained itself rather than fade into obsolescence. The classic five forces of strategy enunciated by Michael Porter (1996) are relevant as marketing strategy will have to formulate relevant tactics to ‘neutralize’ supplier power, ‘counter’ customer power to ensure loyalty by providing value, handle established players in the sector, and stave off threats from potential entrants while limiting the threat of substitutes. Thus marketers are advised to avoid marketing ‘myopia’, understand the contemporary nuances of their business and formulate strategies to ensure their success and sustainability. At the micro level the ‘core competence’ (Prahalad & Hamel, 1990) will have to be managed by organizations that seek to succeed. Widening the horizon within a

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corporation will be about the need to seek out opportunities from core competence instead of just having an ‘SBU’ perspective. Marketers will need to be clear of their strategic intent and identify their core competencies. There is a need to invest in suitable technologies that would leverage the core competencies that have been identified and also invest ‘resources through business units’ and strike strategic alliances (Prahalad & Hamel, 1990). Finally the authors highlight the importance of cultivating a ‘core-competency mind-set’ within organizations that can be facilitated across organizational boundaries with a long term perspective.

to realize its vision of becoming the third largest civil aviation market by 2020 and become the largest market by 2030, the road to that effect will have to be charted out by planning with utmost precision based on sound management principles and executed with an unrelenting focus on the needs of the contemporary customer.

References

Every marketer will need to make the effort to seek out their ‘blue ocean strategy’ (Kim & Mauborgne, 2004) in order to break out of the clutter of competitive intensity. Kim and Mauborgne advices that creating ‘blue oceans of uncontested market space’, will be where the real opportunity will have to be sought as competing in overcrowded industries is unlikely to sustain high performance. They provide a lot of examples from the automobile, computers, and movie theatre space where marketers sought out their ‘blue ocean’ created either by a new entrant or an incumbent. Most of the blue oceans that have been created in the global marketing space mostly emanated out of ‘value pioneering’ instead of the expected ‘technology pioneering’. Thus deciphering customer value is the golden compass for success. The Indian civil aviation operators would hence need to infuse the best of their customercentric knowledge capital, leverage their technical and operational competencies in order to sustain and build on the market potential of the country. If the country aims

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Kim, W. Chan.Mauborgne, Renée. (2005). ‘Blue ocean strategy: how to create uncontested market space and make the competition irrelevant’, Harvard Business School Press, Boston, Mass, accessed from https://hbr.org/2004/10/blueocean-strategy in Jan 2015.

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Porter, Michael E. ”The Five Competitive Forces That Shape Strategy.” Special Issue on HBS Centennial. Harvard Business Review 86, no. 1 (January 2008): 78–93.

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Prahalad, C. K. and Hamel, Gary, The Core Competence of the Corporation (1990). Harvard Business Review, Vol. 68, Issue 3, p. 79-91.

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h ttp: / /w w w. bu s in e ss in s ide r. in / Is - Fu ll Service-The-Way-To-Go-In-Indian-AirlineIndustry/articleshow/40682958.cms accessed on 30th September 2014

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http://www.business-standard.com/article/ companies/full-service-airlines-alliance-woosindian-low-cost-carriers-112122900069_1.html accessed on 2nd October 2014

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h ttp : / / w w w . i b e f . o r g / i n du s tr y / i n di a n aviation.aspx accessed on 2nd October 2014

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http://articles.economictimes.indiatimes.com/ 2014-05-21/news/50001960_1_market-shareload-factor-jet-airways accessed on 3rd October 2014.

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65 Gender, Self-Efficacy and Locus of Control as Predictors of Psychological Well-Being Amongst the Adolescents with Hearing Impairment in Southwest Nigeria Bakare, Aveez Oluwatoyin*

ABSTRACT

This investigation stemmed out of the concern to provide constructive social, physical and emotional support to people living with diverse forms of disabilities especially, hearing impairment since they are confronted with some challenges which could affect their psychological well-being. This study, therefore, examined influence of three psycho-sociological variables on the psychological well-being of adolescents with hearing impairment in South-West, Nigeria. The study adopted survey research design of ex-post facto type. Purposive sampling was used to select eight senior secondary schools and 491 adolescents with hearing impairment using a battery operated audiometer. Four validated instruments were used to gather data for the study. Three research questions were answered. Data were analysed using multiple regression analysis. Two (Locus of Control - B= 2.002; t = 7.090; p