issn 0974-8903 journal of ipem - ipem ghaziabad · pravanshi yadav & anuj sharma 10. gender...

Vo

l. 11 Ju

ly 20

17

The UGC Approved Listed Annual Refereed Journal of the Institute of Professional Excellence & Management

C O N T E N T S

ISSN 0974-8903

Estd. 1996 OF IPEM JOURNAL

Vol. 11 July 2017

OF IPEM JOURNAL

Published by :

Institute of Professional Excellence & Management

A-13/1, South Side G.T. Road Industrial Area, NH-24 By-PassGhaziabad, U.P. - 201 010Ph.: 0120-4174500, Fax : 0120-4174500E-mail : [email protected] : www.ipemgzb.ac.in

(ISO 9001:2015 Certified, NAAC Accredited)

Rs. 350 (Annual Subscription)

Role of Business Ethics Education in Shaping Student’s Ethical

AttitudesDr. Mamta Pankaj Jain

Entrepreneurship Development with Special Reference to Digital

VentureDr. Poonam Kain

The Potential Impact of Internet of Things (IOT) in FinancialServices Industry: An Overview Dr. Sandeep Garg

Logistics & Supply Chain Management : A Preliminary Outlook in

Indian ContextRaghwendra Kumar

Culture-Sensitive Global StrategyNisha Sharma

Impact of Information Technology on the HR Function -

TransformationDr. Isha Chaudhary & Dr. Pradeep Bhardwaj

Rural Entrepreneurship in Himalayas : A Case StudyAshutosh Singh

Comparative Analysis of Impact of Digital Marketing andTraditional Marketing with Special Reference to Delhi-NCRDr Mukesh S Tomar & Dr Praveen Kumar

Factors Influencing Women Managers’ Success in IndiaPravanshi Yadav & Anuj Sharma

Gender Diversity in the Boardroom and CompanyFinancial Performance: A Review of Research & PerspectivesVijay Lakshmi & Shikha Mittal Shrivastav

E-entrepreneurship in Indian Education Sector – ‘The Next Big

Thing’Comparative Study on Business in India and USAAkanksha Garg

• Volume 11 • July 2017

EDITORIAL BOARD

EDITOR - Dr. Alpana Gupta

ASSOCIATE EDITOR - Dr. Dolly Phillips

ASSISTANT EDITORS - Dr. Sandeep Garg, Dr. Isha Chaudhary & Mr. Deepanshu Paliwal

EDITORIAL REVIEW BOARD

Mr. Bimal Jain (Director, A2Z TAXCORP LLP, Tax and Law Practitioners)

Dr. Rishi Raj Singh, Director and Training Officer, NIESBUD

Dr. V.K. Garg, Ex-Senior Reader (Economics), Delhi University

Dr. Shalini Srivastava, Asst. Dean, Jaipuria Institute of Management, NOIDA

Dr. Bhavna Adhikary, Dean Academics, Amity Business School, Manesar

Dr. Kavita Srivastava, Adjunct Professor (Economics), ICFAI Business School, Bangalore

Printed and Published by Mr. Anupam Goel on behalf of Laksh Educational Society and Printed at Ghaziabad Offset Press, 133, East Model Town Tehasil Road, Ghaziabad and Published at Institute of Professional Excellence and Management, A-13/1, South Side G.T. Road Industrial Area, NH-24 Bypass Ghaziabad (U.P.) 201010 -INDIA.Editor: Dr. Alpana Gupta

JOURNAL OF IPEM The UGC Approved Listed Annual Refereed Journal of the Institute of Professional Excellence & Management

Best AcademicExcellence

Institution in NCR

presented to Dr. B.S. Goel

Executive Director

All rights reserved. No part of this publication may be reproduced in any form or by any means, electronic, photocopying or otherwise, without written permission of Managing Editor, Journal of IPEM.

Founder, IPEM Group of Institutions

Dr. B.S. Goel(04.08.1937-10.01.2017)

A Visionary, Educationist & Philanthropist with Values

From the Editorial Board

It is our privilege to present the Journal of IPEM, Vol. 11, July - 2017. It is with great

pride and enthusiasm we report that the Journal is experiencing steady and healthy

growth.

Publishing a Journal puts a great responsibility on the shoulders of Editorial Team. We

have always made our efforts in the direction to promote quality research in the

unexplored areas of Management and extend it further to the interaction of other

disciplines with Management Studies. Our objective is to reach all management

practitioners who find it difficult to record their experiences but working in the

direction to improve their knowledge with right spirit.

This issue covers variety of topics covering various dimensions of organisation growth

such as Culture Sensitive Global Strategy, Factors influencing success of Women

Manager, Logistics and Supply Chain Management, Role of Business Ethics Education

in shaping students’ Ethical Attitude, Derivative Impact of IoT on Financial Service

Industry Earnings, Rural Entrepreneurship in Himalayas, Entrepreneurship

Development with reference to Digital ventures, Impact of IT on HR functions, E-

Entrepreneurship in Indian Education Sector, Comparative Impact of Digital and

Traditional Marketing, and Gender Diversity in Board Room and Company’s Financial

Performance. All the papers we have included in this issue of Journal of IPEM are peer-

reviewed.

We welcome your suggestions and comments on the published articles. We are

greatly indebted to the authors who took keen interest and submitted their

research articles on time. The sincere efforts of all the contributors have made it

possible for us to come out with the issue of Journal of IPEM on time. We

thank our Editorial Review Board for their valuable input and guidance

from time to time.

We are grateful to Mr. Anupam Goel , Secretary , who provided all

the moral and financial support to publish the Journal of IPEM.

Contents

1. Role of Business Ethics Education in Shaping Student’s Ethical Attitudes 01

Dr. Mamta Pankaj Jain

2. Entrepreneurship Development with Special Reference to Digital Venture 05

Dr. Poonam Kain

3. The Potential Impact of Internet of Things (IOT) in Financial

Services Industry: An Overview 09

Dr. Sandeep Garg

4. Logistics & Supply Chain Management : A Preliminary Outlook in Indian Context 15

Raghwendra Kumar

5. Culture-Sensitive Global Strategy 21

Nisha Sharma

6. Impact of Information Technology on the HR Function -Transformation 29

Dr. Isha Chaudhary & Dr. Pradeep Bhardwaj

7. Rural Entrepreneurship in Himalayas : A Case Study 38

Ashutosh Singh

8. Comparative Analysis of Impact of Digital Marketing and

Traditional Marketing with Special Reference to Delhi-NCR 45

Dr Mukesh S Tomar & Dr Praveen Kumar

9. Factors Influencing Women Managers’ Success in India 51

Pravanshi Yadav & Anuj Sharma

10. Gender Diversity in the Boardroom and Company

Financial Performance: A Review of Research & Perspectives 59

Vijay Lakshmi & Shikha Mittal Shrivastav

11. E-entrepreneurship in Indian Education Sector – ‘The Next Big Thing’

Comparative Study on Business in India and USA 70

Akanksha Garg

• Volume 11 • July 2017

JOURNAL OF IPEM The UGC Approved Listed Annual Refereed Journal of the Institute of Professional Excellence & Management

The present study aims to analyze if the students’ ethical attitude have been influenced at the time of taking

business ethics education and that change in attitude and behavior may have been more prominent for those

students who were able to retain more specific knowledge about ethical concepts and who were aware of ethical

issues being discussed in the real business world. Seventy students were chosen from a under graduate program

of business school. A questionnaire was administered at the end of the semester in which the course on business

ethics was completed. The present study does not support the role of ethics education in influencing students’

attitude towards ethics, however, it suggests continuing research in this area emphasizing the strongly held

belief that ethics should play a central role in everyone’s professional life.

Key words: Business Ethics, Ethics Education, Ethical Attitude

Abstract

Introduction

The Association to Advance Collegiate Schools of Business’s (AACSB) Education Task Force (2004), acknowledges that the only source to influence ethical education of students pursuing undergraduate or post graduate management programs is the business schools. The AACSB mentions that it, “support and encourage a renaissance in ethics education and exercise its leadership role to ensure the commitment of business schools.” Another important imitative in this regard, highlighting the importance of business ethics education, is the launch of “Principles for Responsible Management Education (PRME)” resulted from the collaboration between the United Nations (UN) & a consortium of deans of major b-school. This PRME initiative emphasizes on making students to be “future generators of sustainable social, environmental, and economic value for business and society.”

Although there is a prevalence of opinions that business ethics should be taught in business schools as part of graduate and post graduate education, there is little agreement on the contents, assessment and effectiveness of such education. Some studies in this regard have reported positive influence, however, the degree to which these learning experiences have actually had long term effects on students’ attitude and behavior is largely unknown (Ford & Richardson, 1994; Payne, 2006). Arlow and Ulrich (1988) report that b-school students and executives consider family training as the most significant, and b-school training as the least significant influence on their ethical attitude and behavior. Their study also report that the business executives, graduated from b-schools, believe that university training in ethical education became less relevant in influencing their ethical behavior. This may be because of that students learn new and more relevant information regarding ethical behavior from the colleagues

*Assistant Professor – Amity Business School, Amity University Rajasthan, Email-id: [email protected]

01

Role of Business Ethics Education inShaping Student’s Ethical Attitudes

Dr. Mamta Pankaj Jain*

JOURNAL OF IPEM * Vol. 11, July 2017

02

and culture of the organization they work for and thus university education becomes less relevant for them. This has implications for the assessment of effectiveness of ethical education in that whatever positive influence is made on business students may fade away in long run without efforts to reinforce the newly learned ethical attitudes and behaviors. Arlow and Ulrich (1989) suggest that the depth of change in students is required to be increased, may be by making students aware to business ethics earlier in their education.

Vendemia and Kos (2013) also indicate the apparent failure of business ethics education to have a lasting effect on students’ ethical attitudes and behavior. The present study is undertaken to analyze if the attitude have been influenced at the time of taking business ethics education and that change in attitude and behavior may have been more prominent for those students who were able to retain more specific knowledge about ethical concepts and who were aware of ethical issues being discussed in the real business world.Literature Review

Alsop (2006) comments, “... most 27-year olds are unlikely to change their moral compass very much. But they can certainly learn about the kinds of ethical challenges they are sure to face in their business careers and strategies for coping with them in a responsible manner.” May be the expectations of learning outcomes of business ethical education should also be changed. Rest (1986) opines that business ethics education has been reported to have little influence in long term because the assessment was focused on learning outcomes (for e.g., ethical decisions) rather than the process. A four stage model of ethical behavior is proposed consisting of perception, judgment, formation of intent, and actions taken guiding to ethical conduct. Jones (1991) agrees with the basic model proposed by Rest’s (1986) and further explains how the perceived intensiveness of an ethical issue can influence whether people believe it is their responsibility to take action, an apparent precursor to one’s ethical

action, or lack thereof. Rest (1986) also suggests that business ethics educators should create dissonance between what students personally believe and their perceived social realities. Students will be motivated to change their attitudes to align with the proper ethical choice, only after such dissonance has been created.

Further, Jones (1989) asserting persuasively for the value of business ethics education at early stage of students, suggests that teaching students recognizing ethical issues is the beginning stage of such educational efforts. Thereafter, they can “legitimize ethical concerns in their minds, be exposed to ethical theories, and be given practice in informed moral discourse.” King (1983) argues that business ethics education can enhance student’s moral inspection and the “buttressing of their moral courage”. Shenkir (1990) supports this by stating that, “Ethics education may not make people act ethically who want to act unethically. However, ethics education can help people act ethically who want to do so”. Meisel & Fearon (2006) suggests that decision makers often perceive that they are functioning in business environment which is characterized by low certainty. However, this may not be the case always. Facione (2004) mentions that traditional business ethics education do not allow students for a complete analysis of potential unethical outcomes of decisions made under such conditions and necessitates developing critical thinking skills before making ethical decisions which requires development of cognitive skills and affective dispositions.

Research Methodology

Seventy students were chosen from a under graduate program of business school. All students have studied a course on “Business Ethics” in the first year of their undergraduate program. Ethical behavior survey developed by (Ruch & Newstrom, 1975) was administered at the end of the semester in which the course on business ethics was completed. Furthermore, the students also responded to a quiz which had two

03

Role of Business Ethics Education in Shaping Student’s Ethical Attitudes

sections. First section measured their knowledge on common terminology of business ethics, such as price fixing, fair trade etc. using 10 items. And second section measure their knowledge regarding real business cases related to course content on business ethics they completed in last semester. Data related with students’ GPA and grade in the “Business Ethics” course were collected from the department office. Students were informed about this. There were 41 males and 29 female students and the average GPA of students was 6.15.

Findings and Results

The assessments of students’ knowledge regarding ethical terms (mean = 5.75) and ethical cases (mean = 5.82) were relatively better. Their ethical attitude was also found on the positive

side. Students were required to indicate how unethical they perceive seventeen potentially unethical statements on a five point likert scale ranging from 1 (Not at all ethical) to 5 (very much ethical). The low score would reflect the strength of their ethical attitude which may influence their capability to take ethical decision. The seventeen statements were categorized in six broader categories and students mean scores on these six categories were as follows: Using organization resources for personal benefits (2.55), Passing blame (1.69), Bribery (2.17), Falsifying information (2.01), Padding expenses (1.67), and Deception (2.23).

A correlation analysis was carried thereafter. Table 1 exhibits the results of correlation analysis. From the results, it appears that business ethics education was somewhat effective. A significant positive correlation was found between students

Personal Use

Pass Blame Bribery Falsify

Pad Expenses Deception GPA

Ethics Grade

Ethics Events

Ethics Terms

Personal Use

Pass Blame 0.531***

Bribery 0.496*** 0.502***

Falsify 0.559*** 0.668*** 0.388**

Pad Expenses 0.289* 0.309* 0.251* 0.21

Deception 0.581*** 0.588*** 0.418*** 0.539*** 0.21

GPA 0.011 -0.113 -0.015 0.011 -0.221 -0.111

Ethics Grade 0.019 -0.061 0.116 -0.101 -0.311* 0 .441***

Ethics Events 0.171 0.041 -0.111 0.101 -0.062 0.173 0.112 0.091

Ethics Terms 0.021 -0.062 -0.132 -0.012 -0.183 -0.032 .503*** .292* .492***

*P<.05; **P<.01; ***P<.001

Table1: Correlation Analysis


04

GPA and their knowledge score on ethical terms (r = .292). Nonetheless, this did not influence in their awareness of ethical cases being talked about in real business world as the correlation was not found significant between GPA and ethical events (r = .112). However, the results also indicate that there is little role of ethics education and subsequent knowledge in influencing the ethical attitude of the students as there is lack of significant correlations between GPA and measures of attitude towards unethical acts.

In this regard, the only significant correlation was found between GPA and attitude towards “padding expenses” (r = - .311) indicating higher the students grade in business ethics course, more likely they were to perceive these kind of actions as unethical. Though, no other correlations were found significant indicating relationship between business ethics education and attitude towards unethical activities , yet they were in indicating in right direction.

Conclusions

Although, the present study does not support the role of ethics education in influencing students’ attitude towards ethics, however, there were sufficient indications to continue research in this area. The lack of evidence in this regard can be attributed to the weakness of the knowledge measures. The instrument measuring knowledge regarding ethical events and ethical terms could yield better results if respondents are provided a little more detailed descriptions. Despite the lack of strong evidences supporting the role of education in influencing students’ attitude towards ethics, this study strongly suggests to incorporate business ethics education and related topics throughout the curriculum to emphasize the strongly held belief that ethics should play a central role in everyone’s professional life (Payne, 1993).

References

• AACSB Ethics Education Task Force. (2004). Ethics education in business schools. AACSB, Tampa, FL.

• Alsop, R.J. (2006). Business ethics education in business schools: A commentary. Journal o f Management Education, 30,11-14.

• Arlow, P. & Ulrich, T. (1988). A longitudinal survey of business school graduates’ assessments of business ethics. Journal of Business Ethics 1295-302.

• Facione, P.A. (2004). Critical thinking: What is and why it counts [Electronic version], Millbrae, CA: California Academic Press. Retrieved September 5, 2015, from: https://spu.edu/depts/ health-sciences/ grad/documents /Ctby Facione.pdf

• Ford, R.C., & Richardson, W.D. (1994). Ethical decision making: A review of the empirical literature. Journal o f Business Ethics, 13, 205-221.

• Jones, T.M. ( 1989). Ethics education in business: theoretical considerations. The Organizational Behavior Teaching Review, 13 (4), 1-18.

• Jones, T.M. (1991) Ethical decision making by individuals in organizations: An issue-contingent model. Academy o f Management Review 16, 366-395.

• King, J.B. (1983). Teaching business ethics. Exchange: The Organizational Behavior Teaching Journa,18, 25-32.

• Meisel, S.I. &Fearon, D.S. (2006). “Choose the future wisely”: supporting better ethics through critical thinking. Journal o f Management Education, 30, 149-176.

• Payne, S.L. (1993). Ethics integration: The management / o rgan iza t i ona l b ehav i o r fundamentals course and broader concerns. Journal o fManagement Education, 17,472-484.

• Principles for Responsible Management Education. (2014). www.unprme.org/about-prme/ the-six-principles.php Accessed September 9,2015.

• Rest, J.R. (1986) Moral development: Advances in research and theory. New York: Praeger.

• Ruch, W.A., & Newstrom, J.W. (1975). How unethical are we? Supervisory Management, 20,18.

• Shenkir, W.G. (1990). A perspective from education. Management Accounting, 71, 30-33.

• Vendemia, W.G. & Kos, A.J. (2013). Impact of undergraduate business curriculum on ethical judgment. Business Education Innovation Journal, 5, 95-99.

Introduction

Digital venture is a beautiful word for entrepreneurial growth in any economy. It has potential to double the wealth created by the entrepreneurs. Entrepreneurship is the process to start an enterprise by the entrepreneurs. Entrepreneurship development has been emerged as a need for economic development in India. Since 40 percent of natural resources in our country are under utilization process or badly ignored. This figure may rise if proper acknowledgment and effective process implement ion done in the economy. Manufacturing sector still not able to provide 50 percent of total employment in the economy that's why its contribution to the GDP is still not upto the mark. Recently government of India has taken very good initiative to start Digital India campaign....which has shown tremendous recognition worldwide. Although digitization is much talked topic nowadays but it really required to have much more barnstorming s e s s i o n a m o n g t h e k n o w l e d g e a b l e p e o p l e ( M c M u l l a n a n d S h e p h e r d 2006).Technological transformation will enable system to work more promptly and accurately with smart functioning. Digital India program is government initiative for making India digitally empowered. Government has also prepared a platform for entrepreneurs as Make in India program but Digital India Program has significant challenges among thee entrepreneur for example technical skills, technical knowledge,

market acceptance for digitization process, consumer awareness and consumer acceptance financial requirements.

Linkages between Entrepreneurship and Economic Development: Entrepreneurship has been playing very important role in the economic development Entrepreneurship is the dynamic process of creating incremental wealth. This wealth is created by individuals who assume the major risks in terms of equity, time and career commitment of providing value for some product or service.Entrepreneurship is an important factor of industrial development of a c o u n t r y . T h e d e g r e e a n d q u a l i t y o f entrepreneurship differ from entrepreneur to entrepreneurs. This figure depicting how the Entrepreneurship contributing the development of economy.

Governmental Role In Providing The Digital Platform For Entrepreneurial Development: The Government of India hopes to achieve growth on multiple fronts with the Digital India Programme. Specifically, the government aims to target nine 'Pillars of Digital India' that they identify as being:1. Broadband Highways2. Universal Access to Mobile Connectivity3. Public Internet Access Programme4. e-Governance – Reforming Government

through Technology5. eKranti - Electronic delivery of services6. Information for All

*Assistant Professor , Apeejay Institute of Technology, School of Management, Greater Noida, E-mail : [email protected]

05

Entrepreneurship Development with SpecialReference to Digital Venture

Dr. Poonam Kain*

06

7. Electronics Manufacturing8. IT for Jobs9. Early Harvest ProgrammesImpact of Digital India Programe on Entrepreneurial growth : Digitization for job creation has become the keyword nowadays. Policy makers and strategy makers must

consider that in past period role of technology has accelerated the economic growth in every sector of the economy. In digital India there is provision of getting every citizen a public cloud space.Above mentioned pillars of Digital India can be a boon for entrepreneurship development. Entrepreneurs prepare the seed for economic

Expansion

Growth

Expansion

Entrepreneurship

Leading to

economic

Development

Scientific

Temper

Innovation Technological Development

Figure 1: Entrepreneurship and Economic development

development. In times to come focus of the coming generation will increase towards the IT enabled services.

ü Transparent System can be developedü Documentation shall be made available to

the citizensü Access of all Necessary Information for the

citizen.ü Digit izat ion can provide Eff ic ient

monitoring system which can improve transparency in business management.

ü W i t h t h e h e l p o f T e c h n o l o g i c a l Advancement Adoption of a transparent process of appointment at board and management levels.

ü Digitatization can provide Proper checks

and balance system over managerial rights. ü A c c u r a t e i n f o r m a t i o n r e g a r d i n g

developments, threats and risks related to financial and economic matters in annual reports and on the company websites.

ü Proper and transparent auditing system to check financial irregularities and frauds.

ü Codes of conduct are ensured to be understood and adhered to by all members of organization.

ü Ethical behavior of organization or of any member at board or management level should be rewarded.

ü There should be an independent and transparent process of evaluation of performance of boar


07

ProfitabilityPreservation by creating mirror imagesMulti Location Storage Indexing & Traceablity Security & Safety of dataLower cost of maintenanceLesser Impact on Environment TransparencyRedundancyClassification and Access control

Figure No. 2 : Advantages of Digitization

Digital Platform for the Entrepreneurship Development: National E-Governance Plan’ 27 model has misson and vision towards improving the entire working of good governance. Maas and Herrington (2006) defined push factors as the more negative factors, such as unemployment and retrenchment, which force people to become entrepreneurial in order to survive. They regard pull factors to be the more positive factors, such as government support and role models, which m i g h t i n f l u e n c e p e o p l e t o c h o o s e entrepreneurship as a career option.In order to meet the global demand and the new challenges thrown to the Indian industry and also to generate employment, entrepreneurship development has to be given a priority. The entrepreneurs should possess required skills, ability to grasp opportunities which offer economic advantages, orientation towards applying knowledge to maximize gains, business skills, and leadership qualities and above all confidence that one can make things happen. In this context a trained entrepreneur has a number of advantages. In order to accelerate the growth of industries generate employment and utilities the national human potential there is a need to channelize the youth and women of the country for useful and productive purpose. There is also a need to motivate the guide the youth to enable them to take a step forward and take up a carrier of self employment and setup a small or micro enterprise as an entrepreneur. There is very few formal college degree programs specifically geared towards the budding entrepreneur. Like

all other things in life, the entrepreneur may have to put together his or her own savvy education, which is not necessarily a bad thing. Entrepreneurship education should build confidence, motivate progress, strengthen the entrepreneurial mindset, foster a desire to achieve and inspire action.

Conclusions

To conclude the article it must be revealed that boosting digitization by creating digital venture can yields significant economic benefits and leads to sustainable development of the economy. Digitization has potentiality to boost productivity and quality at large. If policy maker and strategy makers want good results in coming years then they need to adequately build digital market by creating more and more digital venture. For example, if emerging markets could double the Digitization Index score for their poorest citizens over the next 10 years . Socially and economically most countries have shown the result with the help of completed digitization in entrepreneurial growth

References

1. Amabile, T. (1988), “A model of creativity and innovation in organizations”, In: Research in Organizational Behaviour, (Eds.) Staw, B.M. and Cummings, L.L., USA, Greenwich, CT, JAI Press, pp.123-167

2. Bilton, C. (2007). Management and Creativity: From Creative Industries to Creative Management, Blackwell Publishing, Oxford.

3. Fillis, I. (2006). “Art for art’s sake or art for business sake: an exploration of artistic product orientation’, The Marketing Review, Vol.6, No.1, pp.29-40.

4. Ford, D.V. and Harris, J.J. (1992). “The elusive definition of creativity”, Journal of Creative Behavior, Vol. 26, No. 3, pp. 186-198.

5. Hunter, S.T., Bedell, K.E. and Mumford, M.D. (2007). “Climate for creativity: a quantitative review”, Creativity Research Journal, Vol.19, No.1, pp.69-90.

Entrepreneurship Development with Special Reference to Digital Venture

08

6. McMullan, J.S. and Shepherd, D.A. (2006). “Entrepreneurial action and the role of uncertainty the theory o f the entrepreneur”, Academy of Management Review, Vol.31, No.1, pp.132-152.

7. M.K. Coulter, „Entrepreneurship in Action“, Prentice Hall, London, 2001, pp. 3-4.

8. P.F. Drucker, Innovation and Entrepreneurship: Practice and Principles, 1st ed., New York: Harper & Row, 1985.

9. Van Den Broeck, H, Cools, E. and Maenhout, T. (2008). “A case study of arteconomy:– building bridges between art and enterprise: Belgian businesses stimulate creativity and Innovation through art”, Journal of Management and Organization, Vol.14, pp.573-587.

10. Young, J.G. (1985). “What is creativity?”, Journal of Creative Behavior, Vol. 19, No. 2, pp.

77-87.


The internet of things (IOT) is shaping up to be among the early part of this century’s most prolific & ubiquitous

technological revolutions. We are seeing a rapid progression of IOT devices that can be seen across all walks of

life. In less than three years, nearly everything we do on digital devices could be interconnected to other digital

devices, giving rise to one of the most rapid IOT advances matched by adoption from customers. The IOT’s

impact on daily lives will be significant and financial services organizations should start planning for these

changes- sooner the better. Increasingly, digital devices- a car, appliances, computing device or wearable- will

communicate directly with each other and potentially with other external entities. These interactions add value

to the experience for the customers by correlating information. With the explosion of these devices and

connections, capital markets, investment and wealth management, banks and insurance companies, etc. will

need to create valuable interactions by handling enormous amount of data in real time.

Keywords: IoT, Internet of Things, FSIs, Tangible,

Abstract

Introduction

The rapid development of information technology (IT) has brought forward a hyper connected society in which objects are connected to mobile devices and the Internet and communicate with one another. In the 21st century, we want to be connected with anything anytime and anywhere, which is already happening in various places around the world. The core component of this hyper connected society is IoT, which is also referred to as Machine to Machine communication or Internet of Everything.

The Internet of things (IoT) is the inter- networking of physical devices, vehicles (also referred to as “connected devices” and “smart devices”) buildings, and other items— embedded with electronics, software, sensors,

actuators and network connectivity-that enables these objects to collect and exchange data. In 2013 the Global Standards Initiative on Internet of Things defined the IoT as "the infrastructure of the information society." The IoT allows objects to be sensed or controlled remotely across existing network infrastructure, creating opportunities for more direct integration of the physical world into computer-based systems, and resulting in improved efficiency, accuracy and economic benefit in addition to reduced human intervention.

The term "Internet of things" was coined by Peter T. Lewis in a 1985 "The Internet of Things, or IoT, is the integration of people, processes and technology with connectable devices and sensors to enable remote monitor ing, s tatus , manipulation and evaluation of trends of such devices."

*Associate Professor, IPEM Group of Institutions, Ghaziabad, Email Id: [email protected], Contact No.: 9911133391

09

The Potential Impact of Internet of Things(IOT) in Financial Services Industry: An Overview

Dr. Sandeep Garg*


10

"Things," in the IoT sense, can refer to a wide variety of devices such as heart monitoring implants, biochip transponders on farm animals, electric clams in coastal waters, automobiles with built-in sensors, DNA analysis devices for environmental/food/pathogen monitoring or field operation devices that assist firefighters in search and rescue operations. Legal scholars suggest looking at "Things" as an "inextricable mixture of hardware, software, data and service". These devices collect useful data with the help of various existing technologies and then autonomously flow the data between other devices

Financial services have long trafficked in the intangible, from counterparty risk and online bill payment to things that used to be tangible but increasingly are not any longer, such as stock certificates and even money itself. So all the talk about the Internet of Things (IoT)—a suite of technologies and applications that provide information about, well, things—might not seem directly relevant to the way financial services institutions (FSIs) do business. But the IoT may be as broadly transformational to the financial services industry as the Internet itself, and leaders should make an effort to recognize the opportunities and challenges it presents for the financial sector as well as for industries with which FSIs work closely.

Setting the context

For the financial services industry, how does the flow of IoT-generated information create value for companies and consumers? Many firms are already using sensor data to improve operational performance, customer experience, and product pricing. Perhaps the most mature example involves the development of usage-based insurance, in which sensors in automobiles or, increasingly, smartphone apps automatically provide insurance carriers with information on vehicles’ driving history and therefore their drivers’ performance.

Another example is in commercial real estate, where sensors within commercial buildings of all types can help better manage energy usage, environmental comfort, and security. For example, motion detectors can control lighting and temperature usage, while smoke and heat sensors can detect the presence of fire and not only set off alarms but also communicate with elevator control systems to prevent usage—a much more effective deterrent than traditional take-the-stairs-during-a-fire signs. Mall operators are currently experimenting with IoT-like applications, such as using cellphone Wi-Fi data to track and analyze foot-traffic flow around and within the mall, that suggest ways to increase certain properties’ attractiveness and thus drive increased rental income and investment activity. For the technology to make a direct impact, a business’s value chain must have a thing that can be measured and enabled to communicate. But for most financial services businesses, the IoT’s impacts could be characterized as having a “derivative effect”: While the IoT is fundamentally about gathering, processing, and creating value from information about tangible physical objects, many financial transactions are based on information from intangible sources that may ultimately have roots in the physical world but that are one level removed from it. No tech startup has yet figured out how to strap a sensor to a company’s profit-to-earnings ratio. But many, even most, pieces of information have roots in the physical world—for instance; a logistics firm’s stock price

Challenges & Opportunities for financial services firm: Banking:

The IoT applications might help banks improve underwriting processes and reach new markets. It is expected that physical, performance, and behavioral data generated from biometric and positional sensors for individuals, and shipping and manufacturing control sensors for businesses, could provide new opportunities for credit underwriting, especially for those

11

The Potential Impact of Internet of Things (IOT) in Financial Services Industry: An Overview

underserved customer segments lacking a credit history. The challenges here involved developing an understanding of which kinds of data are best predictive of creditworthiness, as well as the potential risk of new forms of redlining based on so-called “pattern of life” (POL) analyses.

Given that banks finance the lease or purchase of many physical items, we found opportunities for banks to tap into data from sensors monitoring these goods’ condition to offer customized solutions. For example, lenders could partner w i t h e l e c t r o n i c s a n d “ w h i t e g o o d s ” manufacturers to proactively make credit offers to individuals if their purchased items begin to show noticeable wear or face imminent failure. Leasing companies, too, could monitor the condition of leased assets in order to determine a more precise residual value of the asset at lease expiration, or determine with greater accuracy any discounts or penalties for preferred or unacceptable use.

Capital Markets:

IoT-enabled opportunities to further automate trading and investing activities, driven by continued acceleration in algorithmic trading and the enhancement of this approach through the application of IoT sensor data. The group considered the possibility that, with the removal of the human element in combination with more comprehensive real-time data flows, firms could develop analytics that might better evaluate suspected market bubbles. Others were less sure: While efficiencies would certainly be gained, intelligent agents might be unable to account for shifts in consumer demand or geopolitical events, and thus faulty conclusions could in turn actually create a bubble. There was consensus, however, on the need for firms on both the buy and sell sides to help improve their capacity and capability to gather, store, and analyze huge amounts of real-time, IoT-generated data.

Insurance:

The longer-term impact of the adoption of automotive sensors emerged as one of the more

interesting scenarios for insurance carriers. Already, the industry is grappling with the strategic implications of self-driving cars, suggesting a shift from automobile casualty insurance, where the driver is at fault, to product liability insurance, where the manufacturer may be held liable. Insurers may gain better information on product-design defects to more accurately price coverage but face the potential evaporation of significant amounts of premium income as accident rates drop and traditional coverage’s fade away.

A more interesting implication concerns augmented behavior: Usage-based insurance itself may lead to policyholders demanding more on-demand coverage to reduce their costs. For example, in personal life and injury insurance, all manner of risks are covered under a single policy, but with the development of more fine-grained data about personal behaviors, firms could fine-tune coverage’s to potentially add or eliminate certain risks. In essence, insurance coverage could be unbundled and “decommoditized” to create differentiation from other products in the marketplace. This would make underwriting and pricing a more complex undertaking, but could yield improved customer satisfaction.

On the commercial side, deployment of sensors on shipping containers and transport vehicles may provide insurers with the opportunity to enhance shipping insurance coverage. The ability to better detect and model risks due to theft or damage could move the pricing of these products from an actuarial exercise to one that better assesses risks and losses in real time, while at the same time enabling insurers to more accurately determine responsible parties. In essence, IoT technology could go a long way toward eliminating “proxies” in the risk-assessment process much more broadly than the initial forays seen in telematics today.

Investment & Wealth Management:

The investment managers could benefit from modeling the “enthusiastic crowd.” Firms could utilize information from a client’s IoT “ecosystem” to tailor investment decisions and


12

asset allocation based on behaviors, preferences, and location. For example, a more intimate understanding of a client’s interests and purchasing patterns could enhance wealth management. Investment offerings could be tailored based on these data, leading to the extension of concepts similar to socially responsible investing.

We also explored the possibilities associated with automating portfolio management. Assuming that firms can address existing constraints around data availability, they could combine real-time data flows from a variety of sensors with cognitive technologies and M2M communication to automate fund management far beyond what is seen today, as with index funds . This could lead to increased differentiation between types of investment management firms, funds, and pricing strategies. Active managers may be forced to specialize in a particular strategy or sector, while automated managers leverage an ability to synthesize huge amounts of data, combined with high-frequency trading technologies, to act faster than any human can today.

Commercial Real Estate:

The emergence of real-time bidding markets in commercial real estate was another scenario for envisioned. With IoT technology, firms could combine data from sensors used to manage building energy and security with activity sensors that monitor the level of human interaction within common areas, on elevators, and in the surrounding neighborhood. In this way, analysts could value properties even more accurately. These data flows, if exposed to a public marketplace, could in turn create a kind of trading market, reducing friction in the leasing or buying processes as well as giving investors greater transparency as to property values.

Design and construction of commercial and residential properties could benefit from behavioral analysis as well as the monitoring of construction equipment and materials, some panelists believed. Developers could take

advantage of the increasing interest in combined “live/work/play” developments by analyzing foot traffic and other POL indicators to fine-tune their building plans. And engineering and construction firms might be better able to manage projects’ safety and efficiency based on wider deployment of connected construction vehicles and smart asset tags.

Risk Management in Financial Service Institutions (FSIs):

Finally, we envisioned “quantified self” concepts as a way to potentially reduce risk and improve performance. For example, companies might better manage conduct risk by monitoring FSI employees’ stress levels, patterns of movement, and other factors as a way of predicting the potential for internal fraud. Multi-factor authentication in both virtual and real environments could better flag identity theft. For example, retailers could authenticate online chip-enabled payment-card transactions by matching the presence of the card to other physical objects (such as a mobile phone, or even wearable) that are known typically to be within close proximity to the payment device.

Portfolio managers could also improve their performance by understanding how they react during times of stress. Clearly, employees may resist being monitored so closely, but for those in positions of particular importance, such data gathering, kept private and secure, may become a requirement of employment.

Firms should start exploring potential impacts and opportunities related to the deployment of IoT technologies, and begin strategizing on how to capitalize on these developments, using the Information Value Loop as a guide. Developing strategic partnerships with IoT innovators across the spectrum, including related technologies such as cognitive computing, will aid understanding of where the market may be headed.

Early experimentation, building off of existing deployments, will help firms with a test-and-

13

The Potential Impact of Internet of Things (IOT) in Financial Services Industry: An Overview

learn approach. Certainly, insurance carriers and firms in the commercial real estate industry have a leg up here, but banks may be able to capitalize on the connections between mobile payments, wearable, and sensing devices. Beyond that, firms could start with the assumption that every single object in the day-to-day lives of both customers and employees will soon be able to share data. From that starting point, take an art-of-the-possible approach by identifying the potential opportunities these new data streams could create for them. Indeed, they could consider going beyond test-and-learn, and instead take an approach that embraces the notion of “learn fast, fail fast.”

References:

1. Gil Press, “Internet of Things by the numbers: Market estimates and forecasts,” Forbes, August 2 2 , 2 0 1 4 , w w w . f o r b e s . c o m / s i t e s / gilpress/2014/08/22/internet-of-thingsby-the-

numbers-market-estimates-andforecasts/, accessed September 24, 2015.

2. Deloitte University Press, “Collection: Internet of Things,” http://dupress.com /collection/ internet-of-things/

3. Kevin Ashton, “That ‘Internet of Things’ thing,” RFID Journal, June 22, 2009, www.rfidjournal. com/articles/view?4986, accessed September 24, 2015.

4. https://www.efma.com/article/detail/210405. https://www.xcubelabs.com/our-blogs/5-

benefits-iot-financial-services-26. https: /www. finextra. com/blogposting /12707/

how-the-internet-of-things-will-change-banking7. https://thefinancialbrand.com/54845/internet-

of-things-iot-opportunity-banking/8. https://www.in.capgemini.com/resource-file-

access/resource/pdf

Source : Deloitte Center for Financial Services analysis.

Potential use cases by FSI sector


14

Full list of scenarios by FSI sector

International marketing is becoming more important to companies as the world shifts from distinct national

markets to linked global markets. In modern era of Globalisation a healthy economic growth in India is

increasingly supported by robust industrial growth. One of the relatively lesser known but significant sectors

that support almost all industrial activity - the logistics sector - is also witnessing this growth as a follow

through. However, notwithstanding its importance and size [`4 trillion ≈ ̀ 40 Kharab], it has traditionally not

been accorded the attention it deserves as a separate sector in itself.

Key words: Globalisation, Supply Chain, Logistics, Warehousing, Shipping, Freight.

Abstract

Introduction

Globalization brings homogenization of consumer needs, liberalization of trade, and competitive advantages of operating in global markets. (Hugos, 2003) Furthermore, another significant change concerns the customers since they are more demanding in term of quality, lead time and order fulfilment. In this context, firms must be more and more flexible and reactive to anticipate and to adapt to such changes.

This quest for flexibility and reactivity affects the conception and the management of firms and more generally their logistic systems and contributes to the development of partnership relations, to the emergence of mergers or strategic alliances between companies. As a result, a firm can no longer be considered as an isolated entity but as a component of a wider supply network. (Chopra & Meindl, 2012)


The research is based on secondary data, which includes articles, excerpt of the experts in the field and reflection of the various online sources like digital articles and books on Supply Chain Management and Logistics Management.

A. Research Design

The approach is exploratory in nature. It has been tried to find out the need and gap between existing and requirement in the field of Logistics in India.

1. Research Objectives a. Study the concept and role of Supply Chain

Management in the globalised business. b. Study the concept and role of Logistics

Management within SCM. c. Study the field of wastage in Indian Logistics

Management.

*Research Associate, Dr. APJ Abdul Kalam Technical University, Lucknow, E-Mail: [email protected], [email protected]

15

Logistics & Supply Chain Management A Preliminary Outlook in Indian Context

Raghwendra Kumar*


16

Literature Survey

The size of the Indian logistics market was estimated as US$ 14.31 billion in 2004, US$19.54 billion in 2009. (REDDY & RAJU, 2013) It is expected to grow at a CAGR of 12.17% by 2020 driven by the growth in the manufacturing, retail , FMCG and e-commerce sectors (Netscribes (India), 2015) and achieve to the revenue level of about $190-200 billion by 2020. (Goel, 2014)

The Indian logistics industry spends around 10-20% of the GDP on different types of cost incurred. There are few logistic firms with fleet size larger than 100 trucks and very few fitted with GPS devices, thereby preventing real time tracking of shipments. At the same time organizations lag in supply chain performance. For example pantaloon, after improvements made in 2010, had their inventory levels fell only to about 77 days of sales, much higher than the leading retailers in developed economies. Wal-Mart, for example, has an inventory equivalent of only 29 days of sales in 2010. It is vital to understand the supply chain gaps and challenges. (Jayaram & Avittathur, 2012).

Additionally many supply chain activities such as transportation, warehousing, and retail store replenishments remain very fragmented in India.To improve the overall performance of SCM the members may behave as a part of a unified system and coordinate with each other. Some Indian companies are moving towards making their supply chain and logistics more efficient. (REDDY & RAJU, 2013) They are looking for ways to reduce expenditures of their suppliers and channel partners, logistics or distribution partners. This reduction in cost will lead the revamping of supply chains and significant investment in its components like Infrastructure, IT, 3PL, VRM and others.

Supply Chain Management

A Supply Chain is that network of organisations that are involved, through upstream and downstream linkages, in the different processes and activities that produce value in the form of products and services in the hands of the ultimate customer or consumer. (Lysons & Farrington, 2005)

Figure 1: The first model of SCM (Source: Author)

A. A glance in the Evolution

The practice of supply chain management is guided by some basic underlying concepts that have not changed much over the centuries. Several hundred years ago, Napoleon made the remark, “An army marches on its stomach” (Oxford University Press, 2006). Napoleon Bonaparte, a master strategist and a skilful general, clearly understood the importance of what we now call an efficient supply chain. Unless the soldiers are fed, the army cannot move. Along these same lines, there is another saying that goes, “Amateurs talk strategy and professionals talk logistics.” (Hugos, 2003). All discussion of grand strategies and manoeuvres will be possible by first figuring out how to meet the day-to-day demands of providing an army with fuel, spare parts, food, shelter, and ammunition that often determine an army’s victory.

This has many analogies in business too. Supply Chains (SC) encompass the companies and the business activities needed to design, make, deliver, and use a product or service. Businesses depend on their supply chains to provide them with what they need to survive and thrive. Every

17

Logistics & Supply Chain Management : A Preliminary Outlook in Indian Context

business fits into one or more supply chains and has a role to play in each of them.

B. SCM Defined

The term “Supply Chain Management” (SCM) arose in the late 1980s and came into widespread use in the 1990s. Prior to which, businesses used terms as “ logist ics” and “operat ions management” instead. Some of the definitions are as:

“The systemic, strategic coordination of the traditional business functions and the tactics across these business functions within a particular company and across businesses within the supply chain, for the purposes of improving the long-term performance of the individual companies and the supply chain as a whole.” (Mentezer, et al., 2001)

“A supply chain consists of all stages involved, directly or indirectly, in fulfilling a customer request. The supply chain not only includes the manufacturer and suppliers, but also transporters, warehouses, retailers, and customers themselves.” (Chopra & Meindl, 2012) “Supply chain management is the coordination of production, inventory, location, and transportation among the participants in a supply chain to achieve the best mix of responsiveness and efficiency for the market being served.” (Hugos, 2003)

On July 15, 2004 – The Council of Logistics Management’s (CLM) Executive Committee voted to become the Council of Supply Chain Management Professionals (CSCMP), effective January 1, 2005 (MHL, 2004) and the council redefined the SCM and its boundaries & relationships as:

1. CSCMP’s Definition of SCM “Supply chain management encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management

activities. Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third party service providers, and customers. In essence, supply chain management integrates supply and demand management within and across companies.” (CSCMP, 2005)

2. SCM – Boundaries and Relationships Supply chain management is an integrating function with primary responsibility for linking major business functions and business processes within and across companies into a cohesive and high-performing business model. It includes all of the logistics management activities, as well as manufacturing operations, and it drives coordination of processes and activities with and across marketing, sales, product design, finance, and information technology. — (CSCMP, 2005)SCM has evolved very rapidly since 1990s. Generally it consists of different functions: Logis t ics , inventory , purchas ing and procurement, production, planning, intra-and inter-organizational relat ionships and performance measures.

Figure 2: SCM Process (Lysons & Farrington, 2005)

Logistics

In trade Logistics has been performed since the beginning of civilization: it’s hardly new. However, implementing best practice of logistics has become one of the most exciting and challenging operational areas of business and public sector management. Logistics is unique, it never stops!


18

Logistics is the process of strategically managing the procurement, movement and storage of materials, parts and finished inventory (and the related information flows) through the organization and its marketing channels in such a way that current and future profitability are maximized through the cost-effective fulfilment of orders. (Christopher, 2005)

A. CSCMP’s Definition:

Logistics management is that part of supply chain management that plans, implements, and controls the efficient, effective forward and reverses flow and storage of goods, services and related information between the point of origin and the point of consumption in order to meet customers' requirements. (CSCMP, 2005)

1. Boundaries and Relationships: Logistics management activities typically include inbound and outbound transportation management, fleet management, warehousing, materials handling, order fulfilment, logistics network design, inventory management, supply/demand planning, and management of third party logistics services providers. To varying degrees, the logistics function also includes sourcing and procurement, production planning and scheduling, packaging and assembly, and customer service. It is involved in all levels of planning and execution--strategic, operational and tactical. Logistics management is an integrating function, which coordinates and optimizes all logistics activities, as well as integrates logistics activities with other functions including marketing, sales manufacturing, finance, and information technology. (CSCMP, 2005)

Logistics services also include import/export management, customs clearance, freight forwarding, customer service, rate negotiation, order processing, assembly/installation, distribution, order fulfilment, reverse logistics, consulting services that include distribution network planning, site selection for facility

location, fleet management, freight consolidation and logistics audit amongst others

B. Indian Logistics Sector

This area is ripe with potential and yet the resources are far from complete utilizations. However, there is a huge demand for logistic services in India especially with the growth of the Indian economy. The warehouse market in India is expected to grow at a CAGR of 10% whereas freight forwarding market is expected to grow at a CAGR of 12% till 2020.

1. Industry Snapshot a. The Indian Logistics Industry was estimated

at US$ 125 billion in 2010 b. Generated employment for 45 million

peoplec. The industry is expected to grow annually at

the rate of 15- 20 per cent, reaching revenues of approximately $ 385bn by 2015.

d. Highly Unorganized with organized sector responsible only for 6%

e. The share of 3PL services was expected to increase from 6% in FY06 to 13% in FY11, at a CAGR of 25%

f. Logistics costs are 10-20% of GDPg. Indian Infrastructure is rated 54th among the

59 countries -- Road : 56/59, Rail: 25/59, Seaport: 51/59, Airport: 40/59

Several factors helped the growth of logistics industry in India over the decade that includes changing tax system, rapid growth in industries such as automobile, pharmaceuticals, FMCG and

Figure 3: Logistics sector primarily deals in transportation andstorage operations and is aided by logistics services.(Netscribes (India), 2015)

19

Logistics & Supply Chain Management : A Preliminary Outlook in Indian Context

retail. However, major sectors that are investing huge amounts in logistics industry are aviation, metal & mining and consumer durables. With increasing competition and cost, focus on outsourcing, entry of foreign players is having positive impact on the industry. Three major contributors for the growth of the logistic industry are: emergence of organized retail, increase in foreign trade and India becoming soon the manufacturing hub.

As per the World Bank’s Logistics Performance Index 2010, India is placed at 47th position out of 155 countries. (Biznews, India, 2012)

Higher logistic costs are mainly due to poor infrastructural facilities, shortage in electricity and skilled labour, road, port congestion etc in the country. The higher logistic costs represent high products /service costs in the international market.

Indian road shipments takes thrice the time taken in US. Ships in India wait for five days to dock an Indian port, compared to little or no wait time in Europe.

Conclusion

India being one of the fastest growing economies has great potential for growth in every sector. Logistics industry is the backbone of development and a strong and growing logistic sector indicates healthy trend of growing economy. Further, the impetus provided by the Government of India is expected to boost the economic growth. Special focus on infrastructure will help Logistics Industry to gain efficiency. Indian Logistics Industry is at developing stage with technology usage at its minimum level. With large multinationals players entering Indian market with introduction of technology, face of logistics sector is also changing fast. India today is looking at developments in Warehousing, Cold Storage, Agriculture Storage, Shipping and Ports where huge investment are expected. (CII, 2015)

This growth rate is based on the expectation that the new government will soon implement the GST regime and the logistics companies can optimize their operations to reduce cost and increase their margins. With the implementation of GST, the logistics companies, which are currently forced to set up many small warehouses across multiple cities can set up just a few, big warehouses region wise and can follow the hub and-spoke model for freight movement from the warehouses to the different manufacturing plants, wholesale outlets, retail outlets and the various points of sales (POS). This growth is also backed by the boom in the ecommerce sector and expansionary policies of the FMCG firms. This has increased the service geography of the logistics firms but they also have to meet the demands of quick delivery and tight service level agreements.

Bibliography

• Biznews, India. (2012, Jan 8). Indian Logistics Industry – Overview. Retrieved Oct 2015, from http://www.indiabiznews.com/corporate: http://www.indiabiznews.com/?q=node/2283

• Chopra, S., & Meindl, P. (2012). Supply Chain Management: Strategy, Planning, and Operations. New Delhi: Tata McGraw Hill. Retrieved 2015

• Christopher, M. (2005). LOGISTICS AND SUPPLY CHAIN MANAGEMENT Creating Value-Adding Networks (3 ed.). Great Britain, England: Pearson Education. Retrieved November 2015

• CII. (2015, Oct 31). Logistics 2015. Retrieved from Confederation of Indian Industries: http://www.ciilogistics.in/logistics2015.php

• CSCMP. (2005, Jan 1). Supply Chain Management Definitions. Retrieved Nov 2015, from Council of Supply Chain Management Professionals: https://cscmp.org/about-us/supply-chain-management-definitions

• Goel, S. (2014, Feb 20). Indian logistics market moving up-stairs. Retrieved Oct 2015, from Project Vendor: http:// projectvendor. com/ indian-logistics-market-moving-stairs/


20

• Hugos, M. (2003). Essential of Supply Chain Management. New Jersey: John Wiley & Sons, Inc. Retrieved Nov. 2015

• Jayaram, J., & Avittathur, B. (2012, July/August 02). Supply Chain Insights into India. Supply Chain Management Review, 16(4), 34-41. Retrieved Nov 2015

• Lysons, K., & Farrington, B. (2005). Purchasing and Supply Chain Management (7 ed.). Great Britain, United Kingdom: Pearson Education Limited.

• Mentezer, J. T., William, D., James, S. K., Min, S., Nancy, W. N., Smith, C. D., & Zacharia, Z. G. (2001). Defining Supply Chain Management. Journal of Business Logistics, 22(No. 2), 18.

• MHL. (2004). Home > Global Supply Chain > Council of Logistics Management to become Council of Supply Chain Management Professionals. Retrieved from Material Handling & Logistics: http://mhlnews.com/global-supply-

chain/council-logistics-management-become-council-supply-chain-management-professional

• Netscribes (India). (2015, Feb 10). Logistics Services Market in India 2015. (N. (. Ltd., Producer) Retrieved from market research.com: http://www.marketresearch.com/Netscribes-India-Pvt-Ltd-v3676/Logistics-Services-India-8801616/

• Oxford University Press. (2006). Napolean Bonapart. (E. Knowles, Editor, & Oxford University Press) Retrieved November 2015, from Oxford University: http://www. oxfordreference.com/view/10.1093/oi/authority.20110803095425331

• REDDY, M. R., & RAJU, N. (2013). ISSUES AND CHALLENGES OF SUPPLY CHAIN MANAGEMENT IN INDIA. International Journal of Mechanical and Production Engineering (IJMPE), Vol-2,(Iss-1), 113-117. Retrieved 2015

This research-paper summarizes theoretical developments that bridge the gap between business policy and

cross-cultural studies and creates a basis for sound culture-sensitive strategies. First, it traces the emergence of

the global component in strategy theory and raises awareness of the cultural dimension of international

business expansion. Second, it illustrates recent developments in the behavioral sciences in response to

internationalization, namely the growing interest in cross-cultural studies and comparative instruments.

Third, the research-paper explores implications for multinational companies (MNCs) that stem from these

streams of research and attempt to bridge the gap between policy and culture. This research-paper also

emphasizes contributions to culture-sensitive global strategies by strategy scholars such as Howard

Perlmutter, Michael Porter, Yves Doz, as well as by behavioral scholars such as Geert Hofstede, Robert House,

and Robert Donaldson. This paper also suggest practical examples of multinational corporations such as

Honda, Rover, Unilever, Johnson & Johnson, Nike, and Motorola that successfully capitalize on cultural

differences.

Abstract

Introduction

In this era of globalization, more companies than ever engage in multinational transactions, cross-border trade, international joint ventures, and mergers and acquisitions. They seek competitive advantage by accessing locations, facilities, and customers in different countries and by coordinating activities in the value chain across national borders. While economic considerations create a basis for strategic decision making when determining where, in which countries to locate research, manufacturing, supply chains, or distribution, they are not sufficient for sustainable international growth of a firm. The nature of globalization dictates additional c o n s i d e r a t i o n s w h e n d e s i g n i n g a n d implementing corporate strategies, namely the cultural environments in different countries. If a

company understands national cultures, it can increase local responsiveness to customer needs, strengthen relations with stakeholders in host countries, and develop the most effective leadership behaviors in those cultures. However, this practical approach in turn depends on the ways in which a firm perceives cultures—from an ethnocentric to a polycentric perspective—in other words, according to its cultural predisposition. Hence, international managers seek concepts and instruments that

(a) incorporate cultural environments into global strategy making in addition to comparative advantage arguments and (b) imbed cultural sensitivity in the values and decisions of a multinational firm.

21

Culture-Sensitive Global Strategy

Nisha Sharma*

*Assistant Professor, Morden College of Professional Studies, Mohan Nagar


22

Global Dimensions of Strategy

The concept of strategy has evolved from military-based frameworks to modern business concepts that interpret the direction of firms—their formation, survival, and continuing success. In ancient China and ancient Greece, political and military leaders relied on their knowledge of strategy to gain victories, understand their enemies and the conditions of warfare, evaluate their own strengths and weaknesses, and frame plans to succeed beyond the battle to win the whole war.

The concepts of business and corporate strategy provided logical and structured interpretation of decision-making patterns in the national economic environment. However, these concepts could not serve as the sole source of wisdom when interpreting entries into international territories and competition in political, economic, and cultural landscapes that could be quite different from home practices. Hence, the late 20th century generated valuable contributions to the concept of global strategies.

In terms of global environmental scanning, the impact of social capital on national industry structure and implications for businesses were also successfully explored by social historian Francis Fukuyama (1995). He emphasized that since law, contract, and economic rationality provide a necessary but not sufficient basis for economic success, they must also be supplemented with reciprocity, moral obligation, duty toward community, and trust, which are based on habit rather than on rational calculation. This research separated “low-trust” societies with preference for family-based business networks such as China, Italy, and South Korea, from “high-trust” societies with well-developed networks beyond family or government-based networks such as Germany and Japan.

Modern interpretations of global strategy combine global efficiencies (i.e., scale, scope, and

location), multinational flexibility, and worldwide learning. These strategic pillars rest on the interplay of competitive advantage of firms with the comparative advantage of countries. Uncertainty over these advantages is the outstanding feature of these advantages in global competition. To overcome uncertainties when building advantage on a worldwide basis, a multinational company must strategically balance several imperatives: economic, political, and cultural.

The economic imperative involves key strategic choices about configurations of activities internationally (where and in how many nations each activity of the value chain is performed) and about coordination (how to coordinate dispersed activities in different nations). The advantage rests on the ability to access more effective sources and effectively organize interactions among overseas operations. However, centralized coordination entails significant fixed costs and central authorities may miss important local trends and opportunities. Hence, realization of global benefits depends on integrative systems that provide decentralization of certain responsibilities to exploit these opportunities (for example, in human-resource management). In other words, the structural configuration of investment in different foreign locations and international market penetration are necessary but not sufficient preconditions for creating additional opportunities and exercising competitive leverage. Organizational flexibility is no less important in responding to local challenges and changes in the international business environment. Hence the firm seeks a balance between global integration and national responsiveness to different tastes, standards, and segmentation of local markets.

The political imperative involves balancing the bargaining power of a multinational company with the host political framework. Political risk in international operations traditionally has been associated with the host government’s i n t e r f e r e n c e i n b u s i n e s s o p e r a t i o n s .

23


A multinational firm may experience loss because of the actions of legitimate government authorities, including involuntary loss of control over specific assets without adequate compensation such as in cases of expropriation, forced divestiture, confiscation, and the calling off of performance bonds. A reduction in the value of a stream of benefits expected from foreign operations such as non-applicability of “national treatment,” restrictions in access to markets, control on prices, outputs, or activities, and currency restrictions may add to this list. However, certain events that create political risks derive from actions outside direct government control such as war, revolution, terrorism, strikes, extortion, and nationalistic buyers and suppliers. Hence, the political imperative is critical in making strategic decisions about entry and future presence in a particular country or group of countries.

The cultural imperative is the third critical component in building global strategy. Firms and other stakeholders from different cultures or cultural c lusters may display vis ible asymmetries. The gaps in interests, ethical orientations, core values, and beliefs between home and host parties might be crucial to making s o u n d d e c i s i o n s a b o u t i n t e r n a t i o n a l development and resource allocation. However, we should not assume that “different is wrong,” associating the cultural imperative with additional problems and extra costs. In many cases, multinational companies are willing and able to turn asymmetries into new opportunities and capitalize on cultural differences.

Focus on Cross-Cultural Comparisons

In general, the term “culture” is used by social scientists to refer to a set of parameters that differentiate collectives from one another in meaningful ways. Culture is what is shared by most members of a social group, what is transferred from older (more experienced) generations to younger, and what prescribes the

ways members perceive, think, and evaluate the world, self, and others. Culture may be observed at the levels of civilizations, nations, or organizations, as well as in social entities such as families, professional associations, and communities.

Civilizations are the highest cultural groupings of people. According to modern studies such as Samuel Huntington’s research, it is far more meaningful now to group countries, not in terms of their political or economic systems or in terms of their level of economic development, but rather in terms of their culture and civilization (Huntington, 1993). The most important conflicts of the future will occur along the fault lines separating civilizations from one another. Western, Confucian, Japanese, Hindu, Slavic-Orthodox, Latin American, and African civilizations are differentiated from each other by history, language, tradition, and religion. The people of different civilizations have different views on the relations between God and man, the individual and the group, husband and wife, parent and child, and the relative importance of rights and responsibilities, liberty and authority, equality, and hierarchy.

Cultural differences at the nation/country level are most critical to international business. Historically, people were separated by national boundaries and absorbed values, beliefs, and artifacts of a particular environment. In a broad sense, national (societal) culture is primarily the values and practices that characterize a particular country. Culture can be manifested in dress, food, gestures, manners, practices, beliefs, norms, standards, perceptions, attitudes, priorities, folktales, proverbs, idioms, and so on. It allows people to communicate with others through a common language, makes it possible to anticipate how others in society are likely to respond to one’s actions, and provides standards for distinguishing among what is right or wrong, beautiful or ugly, reasonable or unreasonable, tragic or humorous, and safe or dangerous.


24

Multinational companies analyze cultures, identify cultural differences, and incorporate this information into policy decisions. However, it was not until the 1970s that social scientists responded to multinational companies’ demands for such measuring instruments. For example, information giant IBM contracted the team of scholars led by Dutch sociologist Geert Hofstede to analyze matched populations of employees in its foreign subsidiaries and recommend a comprehensive-yet-simple set of cultural dimensions. The IBM data was complied from answers to 116,000 survey questionnaires about employee values and perceptions of work situations. This team revealed a structure consisting of four largely independent dimensions of differences among national value systems labeled power distance (large vs. small), uncertainty avoidance (strong versus weak), individualism versus collectivism, and masculinity versus femininity.

This four-dimensional model of national culture differences has served as a useful framework for comparing and clustering cultures and applying results to managerial decisions. For example, follow-up research conducted by Nikolai Rogovsky and Randall Schuler (Rogovsky& Schuler, 1997) found that variations in work values related to desirability of high income and job security were explained by cross-cultural differences. This suggested that multinational companies use different compensation and benefit packages in different countries: higher level pay-for-performance compensation and limited benefit packages in low-uncertainty-avoidance cultures versus lower level skill-based or seniority-based compensation and generous benefit packages (including substantial severance pay and easy procedures to withdraw money from pension plans) in high-uncertainty-avoidance cultures. Following the same logic, since the variance in the importance of flexible working hours was largely explained by the dimensions of uncertainty avoidance and masculinity, one could suggest using flextime more widely in low-uncertainty-avoidance

countries or in highly masculine countries. The findings also suggested that autonomy was significantly more highly valued and, therefore, a better motivator in low-uncertainty-avoidance, low-power-distance, low-masculine, and highly individualistic cultures.

C u l t u r e P r e d i s p o s i t i o n o f A Multinational firm-

Cultural predisposition stems from a multinational company’s perspective on home culture relative to foreign subsidiaries’ host countries’ cultures. Classical typology reflecting a company’s cultural configuration was developed in the 1980s by scholars such as Howard Perlmutter and BalajaiChakrawarthy. They defined the distinct ethnocentric-poly-centric-regiocentric-geocentric (EPRG) profile of a multinational company indicating whether, in international operations, it is primarily driven by home country, host country, regional, or global cultural perspectives (Chakravarthy & Perlmutter, 1985). When strategic decisions worldwide are guided by the values and interests of the parent company (headquarters), assuming that “what works at home will work abroad,” such a multinational company follows e t h n o c e n t r i c o r i e n t a t i o n . S t r a t e g i c manufacturing, marketing, and personnel decisions in such a company are typically made at headquarters with little influence from country subsidiaries. When decisions in foreign subsidiaries are clearly tailored to suit the cultures of the countries where the company competed and managers “run a subsidiary as an independent company,” such a multinational follows a polycentric orientation. In strategic decisions about manufacturing, marketing, or personnel at the country level, these managers definitely consider local cultural configuration.

The typology of culture-sensitive, ethical behaviors includes corporate strategic orientations such as imperialist, chameleon, nationalist, and opportunist. The corporate imperialist derives its own values internally from

25


its history and organizational culture and relies on an integrated, centralized, and unified corporate code of conduct. These norms are widely accepted by all global subsidiaries and emphasized in training and development of company employees. Multinationals of this type, such as Citicorp, have strong ethics programs, committed personnel, transparent reputations, and integrated organizational culture but face problems in overriding local cultural practices, often losing competition to more flexible rivals. For example, Motorola’s values and norms of global corporate behavior were traditionally based on “constant respect for people” and “uncompromising integrity”—principles rooted in the personal code of company founder Paul Galvin and extended to a global code of conduct. But these principles ignored global cultural diversity and created conflicts between Motorola’s traditional ethical expectations and acceptable business practices and ethical standards (such as gift giving, paying agent’s fees, or group rewards) in the countries in which they operated.

The corporate chameleon adopts customs, rules, and values from host environments, uses decentralized codes for foreign subsidiaries, and bases its standards on local practices and customs. Shell and United Technologies may serve as examples. While this type is highly adaptable to and respectful of local diversity, it may follow problematic local practices such as nepotism, animal testing, or software copying. This type of company lacks a global ethical core and connections to the firm’s implicit corporate values and beliefs. For example, in some post-Communist countries, “chameleonic” South Korean electronic, Indian trade, or Turkish construction firms are more successful than their Western competitors, because in an ethically d y s f u n c t i o n a l a n d r e l a t i o n s - o r i e n t e d environment, they simply follow the principle “When in Rome, do as the Romans do.”

Cultural Senstivity in multinational Companies Policies

Cultural Consideration in MNCs’ Subisidiaries

A growing number of international firms go far beyond economic and financial sources to succeed in foreign markets. They seek ways to capitalize on cultural differences in other countries and find new sources for strategic success. Many are serious about adding the parameters of global versus local cultural configuration to their pattern of strategic decisions.

For example , managers f rom several multinational companies doing business in Russia such as Shell, 3M Company, J. P. Morgan, Unilever, and Motorola were asked,

• if the Russian GLOBE score on selected dimensions reflected strategic advantage or strategic disadvantage to their companies; and

• if this was perceived as an advantage, did the company capitalize on this or not? And if it was perceived as a disadvantage, did the company try to correct this or not?

International Strategic Alliances and mergers

The strategic role of culture is shown in the interaction of companies from different countries—in strategic alliances, mergers, and acquisitions. Cultural frictions may increase transaction costs while the ability to overcome cultural distance may translate into valuable advantages such as quick access to a partner’s competencies, joint manufacturing, global marketing, shared client base, accelerating innovations, and fostering industry standards.


26

Strategic alliances are trustful, long-term, and mutually beneficial relations between the firms that permit each partner to more effectively accomplish strategic goals, coordinate shared resources, and optimize transaction costs. These relations may take different forms such as joint ventures, long-term licensing agreements, joint marketing or manufacturing reciprocal dedicated assets, or combinations of these forms. An analysis of major international alliances shows that their effectiveness depends on appropriately selecting partners with alliance experience but that are not direct competitors; preserving symmetry (win-win); controlling obligations; resolving conflicts; making decisions quickly; and—last but not least—understanding cultural differences.

When in the late 1970s, Honda and Rover agreed on a strategic alliance in car manufacturing, both parties clearly realized their technological and cultural differences and did not expect quick results. Both participants emphasized mutual trust and commitment as key success factors of the partnership. That is why additional efforts a n d r e s o u r c e s w e r e c h a n n e l e d i n t o understanding each other’s culture and core values, creating mechanisms for conflict resolution, intense training, and exchange of ideas. This process took about 7 years, or nearly half of the alliance lifetime.

Once the partners created a higher cultural cohesion with substantial “Japanization” of British production facilities and a smooth cross-border know-how transfer, they decided to move to an equity-based form (swap shares) and further strengthen their cooperation in manufacturing new models, streamlining shared supply systems, new market development initiatives, and technology transfer (design and process technologies).

In international mergers and acquisitions, cultural factors may play an even more critical role. When companies buy companies for access to markets, products, technology, resources, and

management talent (less risky and faster than through internal efforts), they face transition from strategic fit to organizational fit. In effective mergers, top executives take an active role in the ex post process; they involve operating managers and internal consultants in the change process and rely on professional integrators.

Leadership Core Companies

The resource-based view of the firm suggests that multinational companies build competitive advantage by utilizing their tangible and intangible resources, including those directly related to human behavior in the organization. Core competencies—combined skills/ behaviors developed through organizational learning, which are valued by customers and are difficult to imitate by competitors—are viewed among the major strategic success factors, for example, 3M’s innovation, Kodak’s digital imaging, and Boeing’s large complex integrated systems.

In the 2000s, top multinational companies have been seriously considering behavioral resources as a source of competitive advantage and sustainable strategic development. They viewed leader effectiveness as a function of the i n t e r a c t i n g s t r a t e g i c o r g a n i z a t i o n a l contingences, leadership competencies, and leader attributes and behaviors.

Johnson & Johnson, one of the most competitive global health-care corporations, relies on leadership core competency worldwide. Among the six basic tools to achieve the company strategic goals, “leadership” was named number one. At the same time, lack of leadership competency throughout a global company was viewed as the biggest single constraint to growth. Developed by American experts, but adjusted to multicultural operations, “The Standards of Leadership” framework was launched in 1996 and applied to operating divisions and franchises everywhere in the world. This model showed the relationship between Johnson & Johnson’s “Credo” values, business results, and the

27


companywide leadership competencies required to achieve these results. Because this model was unique to Johnson & Johnson, its leaders had not previously compared themselves to this special set of standards. Among its criteria were considerations of the individual as a role model for “living” Johnson & Johnson values, ensuring that his or her organization seizes the advantage of leadership in its field or market, and fostering o p e n , c a n d i d c o m m u n i c a t i o n a c r o s s organizational geographic boundaries. Worldwide implementation of these “Standards of Leadership” pro-vides a coherent managerial behavior through all Johnson & Johnson companies.

Another example of reliance on leadership core competency in strategic development is the Anglo-Dutch company Unilever, known for worldwide brands such as Lipton, Dove, Surf, and Rexona. In 2001, the company announced its new strategy “Path to Growth.” It aimed to encourage employees in all countries to display winning behavior in the marketplace through their mind-set, passion, and motivation. Most important in this strategic redirection was Unilever’s new competency model, the Leadership for Growth Profile (LGP), which combine the following components. First, everyone in the company was expected to create growth vision. Growth was considered the key criterion for employees’ behavior at Unilever. Second, everyone had to drive growth through implementation and to energize others for growth. Third, it was important to secure commitment to growth. By defining a new set of LGP competencies/factors and using it for management development and recruitment, Unilever tried to change managers’ behaviors and increase behaviors that were directly linked to achieving strategic growth. The corporate Purpose Statement described what Unilever aspired to be, as well as expressed its values and beliefs and pointed out Unilever’s focus on local culture. In this multilocal, multinational company, local operating subsidiaries were able to draw on the resources of a global corporation

and bring together global scale and local relevance.

The Ethical Dimension of strategy

Among the latest trends in sound multinational companies’ strategies is the response to ethical challenges and the stakeholder model in the global economy. Leading companies redefine their attitude to new ethical challenges rooted in national cultures. They revisit their strategic goals to incorporate an ethical dimension into their long-term milestones and performance management, assign new ethical responsibilities to senior managers in headquarters and foreign subsidiaries, provide resources for sustaining corporate-wide ethics, and transfer ethical principles to global supply chains. The most recent trend is cooperation among industry leaders in computer manufacturing, software development, apparel, and even banking in creating industrywide ethical standards. These standards may consider elimination of child labor in the supply chain, rejection of loans to those damaging the environment, and collective enforcement of intellectual property rights worldwide. It is important to underline that these new ethical policies do not necessarily incur additional costs. They may actively generate new competitive advantage by responding to the customers’ ethical awareness and by creating higher industry entry barriers to less ethical firms.

Nike is an example of a company with a proactive ethical global strategy. Driven by a search for cheap labor, it accessed Asian contractors. However, in the late 1990s, it was accused of child labor, sweatshops, harassment, and wage problems in its supply chain with over 600,000 employees. The company proactively responded to these accusations and raised ethical sensitivity of its global strategy, appointed a social responsibility vice president, issued social responsibility reports, conducted an open-door policy, outlined compliance areas, and facilitated


28

respectful treatment of workers in all countries. In the other words, Nike tried to form a positive cross-cultural connection and a clear communication channel between headquarters and its foreign-owned manufacturing facilities. Other companies such as Adidas and Reebok followed the same type of policy and engaged in an industry leaders’ dialogue about shared ethical standards and cultural sensitivity.

Conclusions

Multinational firms’ seek professional tools to make sound and effective strategic decisions about doing business internationally and consider the growing economic role of culture in the life of a business organization. This idea is recognized by intellectual champions of the business community who take into consideration cultural dimensions in determining their choice of organizational practices in foreign operations and product positioning and respond to globalization by incorporating noneconomic parameters into their strategy making.This research-paper addressed this complex culture-sensitive perspective on global strategy and discussed corporate responses to globalization with an emphasis on culture. The research-paper bridged the gap between traditional policy interpretation and the emerging behavioral component of global strategic management and summarized major scholarly contributions to this field with practical examples of culture-based sources for competitive advantage.

References:

• Barkema, H., & Vermeulen, F. (1997). What differences in the cultural backgrounds of partners are detrimental for international joint ventures? Journal of International Business Studies, 28(4), 845-864.

• Bartlett, C., & Ghoshal, S. (1998). Managing across borders: The transnational solution. Boston: Harvard Business School Press.

• Chakravarthy, B., & Perlmutter, H. (1985, Summer). Strategic planning for a global business. Columbia Journal of World Business, 20(2), 3-10.

• Cheng, J., & Hitt, M. (Eds.). (2004). Managing multinationals in a knowledge economy: Economics, culture, and human resources. Amsterdam: Elsevier.

• Chhokar, J., Brodbeck, F., & House, R. (Eds.). (2004). Culture and leadership across the world. The GLOBE book of in-depth studies of 25 societies. Mahwah, NJ: Lawrence Erlbaum.

• Donaldson, T. (1996, September/October). Values in tension: Ethics away from home. Harvard Business Review, 74(5), 48-56.

• Dunfee, T., & Fort, T. (2003). Corporate hypergoals, sustainable peace, and the adapted firm. Vanderbilt Journal of Transnational Law, 36, 563-617.

• Doz, Y., & Hamel, G. (1998). Alliance advantage: The art of creating value through partnering. Boston: Harvard Business School Press.

• Fukuyama, F. (1995). Trust: The social virtues and the creation of prosperity. New York: The Free Press.

• Garten J. (Ed.). (2000). World view: Global strategies for the new economy. Boston: Harvard Business School Press.

• Ghemawat, P. (2007). Managing differences: The central challenge of global strategy. Harvard Business Review, 85(3), 58-68.

• Gomes-Casseres, B. (1996). The alliance revolution. Cambridge, MA: Harvard University Press.

• Grachev, M. (2001, October). Making the most of cultural differences. Harvard Business Review, 79(9), 28-30.

• Grachev, M., Rogovsky, N., & Bobina, M. (2006, November/ December). 3M: Role model for emerging markets. Thunder-bird International Business Review, 48(6), 803-821.

• Hofstede, G. (1980). Culture’s consequences: International differences in work-related values. Beverly Hills, CA: Sage Publications.

Information technology is projected to enhance the performance of Human Resource Management (HRM) by

shifting its focus from administration or personnel management to strategic HRM. It is a part of strategic

planning. This study examines HR function, HR function transformation and Human Resource Information

Technology (HRIT), by investigating the role of HRIT playing in HR function transformation process, and the

interrelationship between them. The empirical evidence shows that the devolution and decentralization of HR

function is leading to role dissonance between HR professionals and line managers, and the HR professionals do

not always focus on strategic issue but still put attention to daily managerial and operational tasks. In

conclusion, this research reveals that HRIT not only is considered to support HR professionals to be strategy

partner of business but also boosts a wide level of participation into HR practices. Academic researches consider

the usage of HRIT focuses on supporting strategic HRM, but the analysis of practical evidences shows that most

companies are still in middle of the transformation process where HRIT is shifting HR function from

transaction activities to strategic ones.

Abstract

Introduction

A company, as a profit-pursuing organization, is always under the pressure of delivering new products to win market share. Without high quality human resources and its effective functioning, a company can hardly endure the profit pressure and pursue its long term business strategy. The past decades has witnessed the transition of employee becoming the most precious capital in the company and the ascent of Human Resource Management (HRM) (Schuler, 1990). The strengthened management of human resources is now the very essence of a successful business story.

Nowadays, business world is undergoing a substantial change: the employee turn-over rate becomes high, and both the organization structure and management pattern change as

well. The traditional HRM style fails to catch up with such rapid changes: the traditional style mainly focuses on supportive personnel activities for a company, for example, collecting employee i n f o r m a t i o n , m o n i t o r i n g i n d i v i d u a l performance, and implementing organization policies. It is a passive, submissive execution, without self-motivated participation into strategic issue to foresee the challenges of tomorrow. Therefore, there comes a demand for the new HRM that should understand the business strategy, formulate the corresponding management strategy on human resources to improve delivered service, and act as a strategy partner with top management team.

T h e H R p r o f e s s i o n a l s p a r t i c i p a t e i n transformative activities to uphold the transformation (Appelbaum & Wohl, 2000), such as redesigning the work processes and HRM

29

Impact of Information Technology on the HRFunction -Transformation

Dr. Isha Chaudhary*Dr. Pradeep Bhardwaj**

*Assistant Professor, IPEM Group of Institutions, Ghaziabad, Email Id : [email protected]**Assistant Professor, IMS College (UC) Campus Dasna, Gzb.

30

system, restructuring service delivery process, and managing cultural change. To be competent for such challenging activities, they should improve management skills to promote the transformation by appropriate strategy (Svoboda & Schroder, 2001), develop leadership to control it, and overcome any barriers to ensure right direction (Knapp, 2004). Only then transformative activities can bring positive effect and improve the performance of the organization.On the other hand, companies nowadays are thirsty for the IT to reduce cost, improve service, and achieve effectiveness (Yeung, Brockband & Ulrich, 1994). With appropriate information tools, managers, employees and customers can quickly response to market change, and control risk cost. To reveal the adding value of IT application in HRM, it is necessary to clarify how IT can advocate the HR function, for example, in strategic task or administrative task, and how IT can advocate its transformation. Therefore, this

thesis originates from following research goal: to investigate how HRIT advocates the HR function transformation.

Sketch of the Study

In order to depict a clear image of this study, a roadmap is developed to understand the study procedure and how it is organized. The study involves three stages. First, literature about HR function, HRIT and HR function transformation are searched and studied in detail to give an exploratory description of the HR function. The main task is to find out how scholars defined HR function in the past and which new concepts have appeared in HR department today. Especially, an additional analysis is given to the HR function described from the Ulrich’s Model (1997). The second step is to investigate the transformation process of HR function, and the final step is to find out how the HRIT affects HR function and impacts its transformation.

OLD HR

FUNCTIONS

TRANSFORMATION

OF HR FUNCTION

NEW HR

FUNCTION

Application of IT to

HR Function

Transformation

The Definition of HR

The Definition of Hr Function

According to Valverde et al. (2006), HR function is “all managerial actions carried out at any level regarding the organization of work and the entry, development and exit of people in the organization so that their competencies are used at their best in order to achieve corporate objectives”. It includes the actors, as well as their relevant responsibilities and tasks.

The Actorsof Hr Function

The actors, who participate in HR function, do not limit to HR departments, but involving all the people at any level: HR professionals, line managers, the employees, etc. (Hales, 2005; Andolsek & Stebe, 2005; Francis & Keegan, 2006; Valverde, Ryan & Soler, 2006; McConville, 2006). The following picture depicts the different levels of people as the major actors involved in HR function, which is based on the literature.


31

The Actvities of HR Function

The concept HR function can also be deconstructed into three components – the factors reflecting who perform the function (role), why they perform (responsibilities), and what activities are taken to carry the responsibilities (process) (Gutierrez, 1995;

Svoboda & Schroder, 2001; Caldwell , 2003;McConville, 2006). Each actor (HR professional, for example) can play one or a few roles, and each role participates in certain process to fulfill its responsibilities. Based on above interpretation, the following picture is developed to give an impression of it.

Major actors involved in HR functions, at different level of company

Roles (HRM professionals

different

management levels

Responsibilities

(employee

performance, HRM

outcome)

Processes

(tasks, activities)

HRM

Function

Components of HR Function

Impact of Information Technology on the HR Function -Transformation

32

Objectives of the Sudy1. To know what is HR function.2. To know what has been changed in HR

function, and why it is considered as a “transformation”?

3. To know what is expected from a theoretical point of view on the impact of HRIT on the changing HR function?

Resarch Methodology

The paper is a conceptual and descriptive in nature. The study is based on secondary data collected from different books, articles published in different journals, research papers and websites.

The Traditional HR Function

In the past, the HR function was recognized as the personnel management that focuses on

administration (selection, appraisal, reward, and development) , welfare and industrial relationship. The HR department was treated less important than financial and marketing departments, because it did not create direct value, nor have any decision power on strategic issue (Fombrun, Tichy,& Devanna, 1984; Hall & Goodale, 1986). The traditional personnel managers paid attention to labor management, but did not participate into a company’s planning and strategy decision. They paid great attention to control their employees, including carefully designing the contracts and rules for monitoring the employees (Storey, 1995). The line managers at this moment played passive roles on the personnel management (Storey, 1995). The line managers were the transactor of the decisions made by the personnel managers, and they were the industrial relationship builders through the negotiation with employees and employers.

Schemes showing the traditional HR Function

Since early 1980s, the personnel management s tar ted to sh i f t to “human resource management”, due to the fact that HR professionals were considered to involve in strategic business decisions (Fombrun, Tichy, & Devanna, 1984; Hall & Goodale, 1986). The main tasks of HR professionals still focused on the da i ly adminis t ra t ion , but broadened management activities are involved in the HR function, which reflected that the HRM began to

pay its attention to the relationship with strategic business issue.

At this time, the HR function was still considered as the exclusive performance done mostly by HR department, and it spread its main activities onto three levels. The lowest level was the operational level, which managed the daily personnel issue of the organization. The second was the managerial level which mainly concerned how to


33

manage the capable workforce by acquisition, retention and development. The highest level was the strategy level. HR function paid attention to the future development of business. The main responsibility was to get the qualified people, and set the policies and programs for long-term human resources demand.

However, the lacks of the integration with the line management level, and the lack of the power were the two major obstacles affecting the effectiveness of HR function. The elaborate routine tasks and overloaded paper work also made the HR function inefficient. To be more effective on service delivery, HR function needed to be strategic on operational and managerial level, and to become more mission-oriented (Hall & Goodale, 1986).

The New HR Function

Human resource management has developed for almost twenty years; and the HR function has changed a lot from the activities to management level. It makes the traditional structure of HR function different that the line managers and employees involve in HR issue. But HR professionals are still considered as the core of workforce management, especially towards the strategy aspect. Thus, Ulrich has defined the “four roles of HR professional model” in 1997, and later develops the model in 2005 to examine the changing of HR professionals.

The Role of the HR Professionals

In 1997, Ulrich defines four roles of HR professionals involved in the HR function performance According to Ulrich (1997), “strategic partners” are the HR professionals, who work together with top executives to make competitive business strategies and to figure appropriate HR strategies, policies, practices and tasks to support the business strategies. And they should also make sure the implementation of the strategies. At the same time, they should develop

certain evaluation method to estimate business results.

The second role of HR professional is “administrative experts”, who should make HRM works more effective and efficient. This can b e a c h i e v e d t h r o u g h r e e n g i n e e r i n g organizational processes, improving the capacity of organizations to gain competitive advantages, reducing cost, adding value, and determining in sourcing and outsourcing strategies for better HR services delivery. “Employee champions” is the deputation of employees. That means, at this position, the first thing HR professionals should do is to understand and find out the demand of employees, by taking friendly and useful communication with them frequently. At the same time, they should provide necessary resources to employees. The HR professionals should motivate their employees, and provide certain training and learning programs to help employees realize their potential. Employee champion also means that HR professionals represent the voice of employees in the organization, and they are responsible for enhancing employee commitment, developing employees’ competence, and enhancing the capability of employees for the competitiveness of organization. “Change agents” are the HR professionals that support and manage the organization transformation and the changes. In the changing process, “change agents” need to create new culture to help organization members get enough motivation to participate in the new situation.

The HR function has adapted and changed, since the theoretical framework of HR four roles model is launched by Ulrich in 1997. According to the changing situation, Ulrich and Brock bank (2005) have made some changes on the model of 1997, to make it suitable to the actual HR function in the organizations. In 1997, Ulrich’s model divides HR professionals to four roles: strategy partner, administrative expert, employee champion, and change agent. In 2005, these four roles are


34

expanding to five: strategy partner, functional expert, employee advocate, human capital developer and HR leader. At the same time, the responsibilities are also specified to each role.

Conclusion & Summary

As put forward the main research question for this study is as following:What is the role of HRIT in the transformation of HR function?According to the statements from previous chapters, to some extent, the HRIT have effective influence on HR function transformation. For the HR function transformation, it needs such information technology to help the management activities to be more efficient and effective. From the HRIT side, it affords the possibility for HR to realize more valuable function for an organization. The influence of HRIT is not only within the HR department, but at any level that part ic ipates into the HRM act ivi t ies . Furthermore, there should be different roles played by HRIT in the transformation process according to different management levels: from employee to line manager to HR professional. In a word, the HRIT is playing an important role to realize the HR function in a more competitive and efficient way to achieve the organization objective.

HRIT in transformation of HR professional

In traditional HRM, the HR professionals put huge energy on time-consuming and tedious daily administration processes, but pay less attention to the consultation work and strategy formulating which should be the main tasks of higher management level in organization. Under the HRIT management environment, the task of advisory service of HR professionals is increasing, which provides for both higher management level and the lower line management, and employment level. Thus, the HRM process is an optimization, which dose not only release the HR professionals from the

numerous and diverse work, but completely changes their working style and working focus as well. HR professionals gradually become the strategy partner of the organizat ion, demonstrating the abilities on strategic formulation, work flow management, employee motivation and so on, and realize the HR function transformation.

The function of HRIT includes the human resource planning, recruitment, and in-office m a n a g e m e n t ( p e r s o n n e l i n f o r m a t i o n management, attendance and absence m a n a g e m e n t , t r a i n i n g m a n a g e m e n t , p e r f o r m a n c e m a n a g e m e n t , w e l f a r e management, and relationship management), from entering till leaving the work position. A number of activities, like the HRM system establishment, activity planning, management process monitoring, results compiling and analysis, still need the HR professionals to accomplish with HRIT. Only some activities are authorized for line managers and employees to finish. Therefore, besides being responsible for the HRIT management, HR professionals pay more attention to HR function through the platform of HRIT, but not carry on the massive data maintenance, which function is gradually shared by line managers and employees.

With the utilization of HRIT, HR professionals become the core of the HR service net. The HR professionals can be considered as both the service provider and service buyer according to different objectives of business. From the aspect of line managers and employees, they are the customers of HR professionals. The related business processing can be completed through the on-line interaction: the line managers and employees can obtain the “product” and “service” from HR professionals via internet. The HR professionals can “purchase” various kinds of human resource management service and expertise information from external providers, for instance, Consultant Company, e-learning service provider and so on. The issue with common Service provider is also changing from


35

paper work to on-line management, such as insurance management.

HRIT management comes after the application of HRIT. The extensive use of HRIT asks managers and employees to acquire new skills and knowledge, in order to make use of the new systems and technologies. HR professionals partially turn attention from personnel and strategic issue to HRIT related performance, such as the training on using of HRIT, and maintaining the HRIT applications. Thus, these HRIT-related functions are the new responsibility of the HR professionals. Therefore, the extensive use of HRIT can make HR professionals spend more time and energy on the strategic issue, thus accelerating the transformation of HR function (Gardner, Lepak & Bartol, 2003).

HRIT in transformation of line manager

Based on the function of HRIT, line managers can obtain the latest HRM policy, work procedure information, market data and so on, which can be used as the reference to instruct and manage their employees. HRIT provides the platform for line managers to participate in the HRM work. HRIT can provide all the information with which the line managers supervise their employees; under authorization, line managers can deal with HR activities such as recruitment, training, absence, vacation, appraisal, leaving, etc.

Because the line managers are the direct connections between their higher and underling management levels, they know more about their employees and understand better the policy of organization. When the daily supervisor function can be accomplished thought HRIT by line managers, it not only saves the time and energy, but gives line managers more freedom on using people. They can get the latest information about their employees, and make their staff catch up with the development of organization. When the line managers are responsible for making policy of own department, they can also make

good judgments on both internal and external situations and make the right decisions. They can consult with HR professionals through HRIT, submit the recruitment or training program, and, in return, get direct and effective assistant from HR professionals.

HRIT in Transformation of Employee

The increasing consciousness of information and independency of employees have asked for transparent and clear human resource information. They pay attention to personalized human resource development project, realize s e l f - m a n a g e m e n t , a n d m a s t e r c a r e e r development on own initiative, and they are also eager to choose suitable studying program. HRIT provides opportunity to every individual in the organization to participate in HRM works, and decentralizes some responsibilities of HR function to them. The employees can choose the HR information and service on their own. Therefore, they can get the information at any moment and take the action to get result.

To some extent, the employees no longer need to wait for any other people coming to solve their problems or to reply their questions, because those can be easily dealt through HRIT, such as on-line communication, or getting answer from knowledge database. Through the interactive and dynamic HRIT, HR department can carry on the working arrangement, training and motivation according to various individual demands, and let the employees implement the self-control and, master their own future. In addition, based on the HRIT, employees may obtain and maintain their individual information such as attendance, salary, training record and so on. Moreover, the communication between employees and managers is also different with the traditional one. The feedback of employee can directly transmit to related manager or department via the HRIT platform, which ensure that any problem can be handled accurately and expeditiously. Thus, the HRIT enables the


36

employees to realize the self-control and self-service, provides more opportunities to involve low level into management issue, and fosters the whole organization to accept this new kind of management style. Therefore, the HRIT brings the independency to employees when they face HR issue. In the recruitment process, the applicant can manage their applications through web-site, update personnel information on-time to hold comparative advantage; when they are accepted by the organization, they can also design their own career, and make plan for various training program provided by employer which may be helpful for their future. In short, employees can choose the way they want to develop and realize the value creation for whole organization.

As conclusion, HRIT plays a major role in strategic HR tasks. It changes the management way of traditional HRM, enables such management activities can carry out at any level without further hindrance – top management, line management, employee self-management and external agency. Besides dealing with the information transaction, the strategy HR activities such as workplace learning, career management, business process reengineering, etc. can be better developed and supported with the HRIT application, which helps HR function on a more valuable position.

Reference

• Andolsek, D. M. & Stebe, J. (2005). Devolution or (de)centralization of HRM functions in European organizations. International Journal of Human Resource Management, 16(3), 311-329.

• Appelbaum, S. H. & Wohl, L. (2000). Transformation or change: some prescriptions for health care organizations. Managing Service Quality, 10(5), 279-298.

• Ashbaugh, S. & Miranda, R. (2002). Technology for human sources management: Seven questions and answers. Public Personnel Management, 31(1), 7-20.

• Beatty, R. W., Ewing, J. R., & Tharp, C. G. (2003). HR's role in corporate governance: Present and prospective. Human Resource Management, 42(3), 257-269.

• Beer, M. (1997). The transformation of the human resource function: Resolving the tension between a traditional administrative and a new strategic role. Human Resource Management, 36(1), 49-56.

• Caldwell, R. (2003). The Changing Roles of Personnel Managers: Old Ambiguities, New Uncertainties. Journal of Management Studies, 40(4), 983-1004.

• Farley Cheryl (2005). HR's role in talent management and driving business results. Employment Relations Today, 32(1), 55-61.

• Florkowski, G. W. & Olivas-Lujan, M. R. (2006). The diffusion of human-resource information technology innovations in US and non-US firms. Personnel Review, 35(6), 684-710.

• Francis, H. & Keegan, A. (2006). The changing face of HRM: in search of balance. Human Resource Management Journal, 16(3), 231-249.

• Hales, C. (2005). Rooted in Supervision, Branching into Management: Continuity and Change in the Role of First-Line Manager. Journal of Management Studies, 42(3), 471-506.

• Hall, D. T. & Goodale, J. G. (1986). Human Resource Management: Strategy, Design, and Implementation (Scott, Foresman Series in Organizational Behavior and Human Resources). Glenview: Scott

• Foresman/Addison-Wesley. Hempel, P. S. (2004). Preparing the HR profession for technology and

• in f o rmat i on work . Human Resource Management, 43(2-3), 163-177.

• Hussain, Z., Wallace, J., & Cornelius, N. E. (2007). The use and impact of human resource information systems on human resource management professionals. Information & Management, 44(1), 74-89.

• Lengnick-Hall, M. L. & Lengnick-Hall, C. A. (2003). HR's role in building relationship networks. Academy of Management Executive, 17(4), 53-63.


37

• Lepak, D. P., Bartol, K. M., & Erhardt, N. L. (2005). A contingency framework for the delivery of HR practices. Human Resource Management Review, 15(2), 139-159.

• McConville, T. (2006). Devolved HRM responsibilities, middle-managers and role dissonance. Personnel Review, 35(6), 637-653.

• Mohrman, S. A. & Lawler, E. E. (1997). Transforming the human resource function. Human Resource Management, 36(1), 157-162.

• Neary, D. B. (2002). Creating a company-wide, on-line, performance management system: A case study at TRW Inc. Human Resource Management, 41(4), 491-498.

• Nehles, A. C., van Riemsdijk, M., Kok, I., & Looise, J. K. (2006). Implementing Human Resource Management Successfully: A First-Line Management Challenge. Management Revue.The International Review of Management Studies, 17(3), 256-273.

• Reiter-Palmon, R., Brown, M., Sandall, D. L., Buboltz, C., & Nimps, T. (2006). Development of an O*NET web-based job analysis and its implementation in the U. S. Navy: Lessons learned. Human Resource Management Review, 16(3), 294-309.

• Robertson, K. (2000). Work transformation: integrating people, space and technology. Facilities, 18(10/11/12), 376-382.

• Rowley, C. & Bae, J. (2002). Globalization and transformation of human resource management in South Korea. International Jssournal of Human Resource Management, 13(3), 522-549.

• Sagie, A. & Weisberg, J. (2001). The transformation in human resource management in Israel. International Journal of Manpower, 22(3), 226-234.

• Saunders, M., Lewis, P., & Thornhill, A. (2003). Research Methods for Business Students. (Third edition ed.) Prentice Hall.

• Schein, E. H. (1996). Kurt Lewin's change theory in the field and in the classroom: Notes toward a

model of managed learning. Systems Practice, 9(1), 27-47.

• Schuler, R. S. (1990). Repositioning the Human Resource Function: Transformation or Demise? Academy of Management Executive, 4(3), 49-60.

• Selmer, J. (2001). Human resource management in Japan - Adjustment or transformation? International Journal of Manpower, 22(3), 235-243.

• Shrivastava, S. & Shaw, J. B. (2004). Liberating HR through technology. Human Resource Management, 42(3), 201-222.

• Som, A. (2003). Redesigning the human resources function at Lafarge. Human Resource Management, 42(3), 271-288.

• Stockport, G. J. (2000). Developing skills in strategic transformation. European Journal of Innovation Management, 3(1), 45-52.

• Stone, D. L., Stone-Romero, E. F., & Lukaszewski, K. (2006). Factors affecting the acceptance and effectiveness of electronic human r e s o u r c e s y s t e m s . H u m a n R e s o u r c e Management Review, 16(2), 229-244.

• Storey, J. (1995). Human resource management: still marching on, or marching out? In J.Storey (Ed.), Human Resource Management: A Critical Text (pp. 3-32). London: Routledge.

• Strohmeier, S. (2007). Research in e-HRM: Review and implications. Human Resource Management Review, 17, 19-37.

• Tansley, C., Newell, S., & Williams, H. (2001). Effecting HRM-style practices through an integrated human resource information system – An e-greenfield site? Personnel Review, 30(3), 351-370.

• Truss, C., Gratton, L., Hope-Hailey, V., Stiles, P., & Zaleska, J. (2002). Paying the piper: choice and constraint in changing HR functional roles. Human Resource Management Journal, 12(2), 39-63.


India was known as country of villages. At present we are witnessing migration from villages towards cities and

pressure on infrastructure on metro and urban areas. This pleasure is leading us towards numerous socio-

economic problems. Energy is one of the primary requirements in current context as it is not available easily for

many people in India whether its electricity of cooking fuel. In India when it comes to energy for cooking fuel.

Rural India is dependent on animal dung, wood and coal. All of them are major pollutants for the environment

on the other hand due increase in environmental issues cutting wood and coal are not acceptable now. And when

we talk about villages in Himalayas, arranging fuel is a hard nut to crack.

This research work discuss about an entrepreneurial effort started by an NGO Avni-Kumaon which not just try

to ensure availability of fuel but also encourage them to sell the excess in the market.

Keywords: Entrepreneur, fuel, NGO

Abstract

Introduction

Let not him who is houseless pull down the house of another, but let him work diligently and build one for himself, thus by example assuring that his own shall be safe from violence when built. Abraham Lincoln

Yes, it not a solution to give pain to those who made them self successful but we should provoke the economically disabled so that people will help them self in the economic aspects of life.

Kumaon and Gharwal are the two regions in Uttrakhand state. These regions are culturally rich but poor economically. The constraints of these economically backward hills are lack of basic infrastructure and options to earn livelihood for the people. Yes tourism is changing the face of Uttrakhand but the hotels and the

resorts are established by those people who are not resident of this place. Only hands full of people are getting jobs in these resorts and hotels. There are villages in remote areas where a healthy person needs to walk for 1-2 day to reach there. Yes, life in hills is too hard to live in. From arranging water to drink, food to eat to arrange fuel to cook food the hills test the residents. Every year many women dies because of falling from trees, dangerous hills and eaten by tigers and other wild animals while collecting wood for fuel. Lack of access to energy affects women and girls in the rural areas disproportionately they carry tens of kilos of fuel wood over long distances; indoor air pollution, girls are kept from school for collecting the fuel.

Economic backwardness and transportation are the causes due to which LPG, coal and kerosene is not in the access of these people. On the other

*Assistant Professor, IILM-AHL-CET, Greater Noida

38

Rural Entrepreneurship in Himalayas:A Case Study

Ashutosh Singh*

39

hand deforestation due to gathering of fuel wood is increasing environmental challenges in the country. The areas are facing the serious energy crisis and due to traditional energy sources it is not just polluting the environment but it is also making people sick due to various diseases. Chir Pine can be found easily across northern India in the states of Jammu and Kashmir, Punjab, Himachal Pradesh, Uttarakhand and Sikkim. Chir Pine rosin is principally used in paper, soap, cosmetics, paint, varnish, rubber and polish industries. Besides these, other uses include, manufacture of linoleum, explosives, insecticides and disinfectants, as a flux in soldering, in brewing and in mineral beneficiation as a frothing agent. When this species of pine tree reaches a large girth, the bark forms flat patches which can be broken off in chunks (of about 8 inches square by 2 inches thick). It has a layered structure like plywood, but the individual layers have no grain. The locals use this easily carvable bark to make useful items like lids for vessels. Blacksmiths of that region also use this bark exclusively as the fuel for their furnaces. These trees also produce pine oil which is highly flammable. The dry leaves and flowers create a kind of carpet on the ground which stops the sun rays. This works as a barrier for the other plants to grow.

On the other hand the forest fire is one of the biggest problems in the summer season. Here dry leaves and flowers of pine tree play an important role as there are also have same highly flammable in nature. The forest fire devastates the precious forest wealth every year and it also pollutes the environment as well. And it also damages the remote areas near by these forests.

From a long time scientists are giving various revolutionary sources of energy to protect the environment and helping the needy. But the hills of Uttarakhand are far from these solutions. The rural electrification is still not completely successful in this Himalayan state. The Indian Institute of Technology, Roorkee is one of the pioneer institutions in the India. It always gives

new innovations to the country for making life of country men easy and happy. They have developed the technology to produce coal from the dry leaves and flowers of Pine tree. Which can be an energy solution and for poverty as well.

The coal produced by these small entrepreneurs is in demand in the near by areas and they are also using it for there domestic purposes. After China and USA, India is the third biggest coal producer in the world and the production capacity is increasing with the rate of 7% per year. Indian coal production capacity in the year 2009 was 194.3 metric tones on the other hand the consumption is 231.4 metric tones.

The research primarily focuses over the issue of poverty eradication. As we found there in the hilly areas arrangement of fuel for cooking or warming the home in winters is a major problem. And on the other hand a short fall in the area of forests makes the fuel a scarce resource. Economic backwardness don’t allow to buy them expensive LPG or other options. The recent innovation of IIT, Roorkee of making coal from the dry pine products not just can reduce poverty but also can solve the energy requirements of the area. An NGO “Avani- Kumaon” is also searching the energy options in the dried pine needles; the Massachusetts Institute of Technology (MIT) has developed Spiral Pine Needle Cookstove to solve the problem of cooking fuel in the region. This research work will provide the strategies to uneducated rural people to sell there produce to market and expand their consumer base.

1. Objectives of the study: The primary objectives of this research are: a) To explore the prospects in the forest

based industry. b) To explore the energy options in

renewable energy resources. c) T o e x p l o r e t h e e m p l o y m e n t

opportunities in rural energy sector. 2. Uttrakhand: In the hills of Kumaon and Gharwal various

Rural Entrepreneurship in Himalayas : A Case Study

40

NGOs and the government machinery is active. This is due the highly sensitive environment of this hilly state. Himalayas affect the ecosystem of the whole country. Due to various changes in the global climate drastic changes are occurring in the various parts of this mountain range. Uttarakhand covers the area of 53,483 square km. in which very dense forest covers the area of 4,002 square km, moderately dense forest covers 14,420 square km., open forest 6,043 square km. and the total area is 24,465 square km. In the year 1999

due to forest fire forest were burned Rs. 600 Crore. In the year 2008 22.64% (5,086.6sq km.) forest was destroyed .There are 917 glaciers in Uttarakhand which covers 3550 square km. after J&K it have 17.80% of the total glaciers in the country. The climate conditions in the state are becoming worst day by day. The dry season is becoming longer. Last year very less snowfall was recorded in the state. Just opposite to that there was a very heavy rainfall recorded in the year 2010.

Figure 1: Dry pine Needles

Figure 2: Forest cover in Uttarakhand State Source: Uttarakahand Forest Departmentwebsite: http://www.uttarakhandforest.org/hindi/maps/maps-forestcover-ua.htm


41

3.1. Pine Needles the boon and bane: Pine needles are better known as “Peerul” in Uttrakhand. Peerul are the dried leaves of Chir Pine, the forests of chir pine are available in the ample of amount. The estimated area of the Chir forest in India is approx 8,90,000 hectares in which Uttarakhand have the forest land of 1,00,000 hectares. So the production of pine needles is also very high. In the rural areas of this state there it has a limited. It is used for protecting animals from flies and mosquitoes by its smoke; it is also used as carpet for animals so they don’t come directly in the contact of floor. There is no other use of peerul in these hills. The problems which arise due to dried pine needles are- a) It take a lot of time in putrefy due to

which less nutritious reach to earth and become a barrier in the reproduction process.

b) Because they are very flammable so this is one of the main causes of forest fire. In summer season all 13 districts of Uttarakhand get affected from the forest fire.

c) In rainy season the carpet of dried pine needles make the forest floor slippery which cause as accidents for animals and citizens.

Despite of all these problems pine needles are still very useful fuel option and an option for employment as well. World is facing serious problems like food shortage, energy shortage, climate change, population, terrorism etc. There is huge volume of people who are living at the bottom of the pyramid. Lot more has to be done for the people who can’t afford the expensive technology. In the hills because of various purposes the fuel is very important for lighting, for cooking, for keeping houses warm.

Here a question arises that if the Pine Needles are highly flammable and easily available why villagers don’t use them as a fuel option in day to day life. The problems with them are that as they are highly flammable it burns very fast. While the

process of cooking and warming takes a lot of time. So one problem is that this fuel is uncontrollable. Another problem is that it produces smoke which is igneous for health.

In India there is a very famous word which Indian use often that is “JUGAD”. In the base is about the searching the option for a problem in the as less time as possible. In India cooking gas is not available to everyone because it is not affordable. As the fuel prices are increasing day by day, population is increasing, pollution is becoming a great problem, and forests are shrinking so it is very important to find out a “Jugad”. Yes, the alarms are ringing everywhere as unexpected natural calamities. And “Jugad” for pollution and fuel is available with us.

3.2. Avani-Kumaon initiative for pine-needle gasification energy busi¬nessAvani is a voluntary organization which is working in the hills of Kumaon region of Uttarakhand state since 1997. It work in 40 villages in two districts of Bageshwar and Pithoragarh. This organization addresses the issues of the remote villages of the state. The life in hills is highly dependent on the on the other parts of the state and country. From food to health the people from the hills do a lot of struggle. These problems convince them to leave the native places and migrate to the metros and other cities for livelihood and other facilities.

The Avani-Kumaon is using new age revolutionary technology which is inaccessible to the people in the remote hills. Avani provide cooking gas to the villagers, it is made up of pine needles. Pine needles are available in the local areas. As per the NGO in India 595 million people need the low cost and convenient option for the fuel in Uttarakahnd the number is 4.8 million.

Possibilities with cooking fuel with pine wood- A big population is dependent on traditional biomass (firewood, crop residue, dung) for fuel needs. As the pine needles are available in access


42

in the hills and they can be the ideal fuel. But due to various other short comings the pine needles need to get processed. Avani-Kumaon use gasification system to process the pine needles for fuel purposes. The pine needles generate the gas which is used for the cooking purposes and to operate generators for electricity. For the cooking purposes the gas directly provided to the villagers by the pipelines which are connected to their homes. Avani has developed 9 kW gasifier at Pithoragarh which is in operation from the last three years. Out of the 9 kW, 1.5 kW get consumed for running the system and a continuous output of 7.5 kW is available for productive use. The primary benefits of this system is that- a) The energy solutions for cooking and

electrification will be available with the villagers in villages itself.

b) Less dependency on the traditional system.

c) Clean and green energy resources.

3.3. Coal Production by Pine Needle- In the year 2008 at I.I.T. Roorkee, Uttarakhand a project was started. The objective of project is employment generation through making value added product from pine needles fibers in the hills of Uttarakhand. This project will provide employment opportunities for rural women and economically weak section. This project also includes training of self help groups. After research and innovation for processing coal I.I.T Roorkee as developed machines. These small plants were distributed among the self-help groups of women in the hills. As per the test cost and profit from the project was as follows:

Pine Needles used 3 Quintals

Wages 5 labor * Rs.78/- = Rs.390/-

Electricity and other expenses Rs.50/-

Coal Produced 80 Kg

Price Rs.10/Kg. = 80*10=Rs.800/-

Source: Gramya Darpan, News letter by Watershed Management Department Uttarakhand, Year 3, Issue 9, January-March 2009 ,Pg.11

In the demonstration to the villagers they have taken a lot of interest in the project. Specially women because the it produce less smoke and making coal is less time consuming activity than collecting wood from forest.

3.4. Pine Needle Stove- Once again Avani, the NGO came into light when it starts working on the Pine Needles with Massachusetts Institute Of Technology (M.I.T.). Both of these institutions have tried and developed a stove in which pine needles can get burn directly. As discussed it is difficult to control the burning process of pine needles and on the other hand it produces a lot of smoke.

This stove use pine needles as only source of fuel which is unprocessed. Pine needles are stored into an insulated firebox, where a primary burn occurs. The needles gasify as they burn, and the gases travel up into the spiral via a central hole. The draft from the chimney pulls the gases into and around the spiral, and because the spiral is heated by the firebox underneath, the gases ignite and create a secondary burn. By elongating the burn path of the fuel, we are able to use the energy in the gases to get a clean, efficient burn.


43

Figure 3: Pine Needle Stove developed by MIT.

3. Efforts made by Government: Pine needles are one of the renewal sources of energy. The government of Uttarakhand is viewing it as employment opportunity in the rural area. Agri Business Management can develop these small businesses as a big industry. Collection of pine needles and maintenance of electricity and coal production plants running on pine needles need a huge man power. This requirement can get fulfilled by the local rural people it will generate employment. Pine needles can generate electricity for 1.4 crore families and cooking fuel for 7 lakhs families. In Uttarakhand migration of youth is one of the serious problems in front of

state. The electricity production and cal product ion can reduce this problem. Government has planned a program in which it is giving contracts for collection of pine needles and uses them for productive use.

Generating energy from Pine Needles and giving employment to the people who need it is an example of social entrepreneurship. Here many social and economic problems are getting solved with one natural resource. In this issue a joint venture of public private and voluntary sector is needed it can be done in a following way:

Figure 4: Work model to develop Entrepreneurial culture by Public, Private and Voluntary sectors. Source: Singh Ashutosh and Shah Pankaj, Developing Social Entrepreneurial Culture: A Strategic Orentation. How to Stratregy, Edited by Rajiv R. Thakur and Sanjay Kumar Singh, Macmillan Publishers India Ltd. Pg.230.


44

Step 1: The step one in the project of Pine Needles is already completed. That is identification of problem.

Step 2: The step 2 consists of two sub steps- A) Under this sub step Government has

changed its policies as inviting private players for the collection process of pine needles.

B) In the second sub step as various innovations have been made to use pine needles for energy purposes this process is also completed.

Step 3: For running any project infrastructure is an important requirement. These minimum requirements can be only fulfilled by the government on the recommendations of private and the VOs. The minimum requirements refers to- those basic amenities by which a flame can be ignited. Here the minimum infrastructure will be the ware houses to store the dried leaves. Coal and electricity production plants etc.

Step 4: The project will be implemented on the voluntary basis either by public, private or VOs. This is because in the globalised economy and society there are various ups and downs at time to time so some time it might not be possible to give a direct support to the project. But the primary motive should be “The Show Must Go On” so any one has to take initiative in the absence of the rest two and one sector has to take initiative it will be mandatory. Because this is one of biggest problem in our country that we make mammoth sized plans but they never get executed because of lack of inciation. The rest two will give the indirect support. Another of major aspects of these projects is to make them “pubic acceptable” and removal of political hindrances. Step 5: Last step of project review will be done by the VO. Why only by VOs? VOs are indentifying the problems, so they can review easily that the problem is solved or not. They will give the end report to the all three sectors. And the final project will be reviewed by representatives of all three sectors on the site. To stop corruption it is essential that there should be a strict monitoring of the project.

Conclusion

This research clearly says that there are ample opportunities in forest based industries in India and in Uttarakhand. The forest area around the world is shrinking. Employment based on the forest will give motivation to the people to preserve the forests. Due to increasing population it is usual that pollution will increase and employment rate will go down and the infrastructure facilities will reduce. But on the same time if there will be proper management of all resources we would be able to build a prosperous society. As Mahatma Gandhi said that there is enough to satisfy our need on earth but there is less to satisfy our greed. So here we need to check our needs and the needs of our society and satisfy them with available resources. The things that seem of no use can fulfill our essential needs. But we have to see them rationally.

Key References

1. Prahalad, C.K., The Fortune At The Bottom Of The Pyramid, Wharton School Publishing, 2009.

2. Statistical review of world energy. www. bp. com/.../bp...energy.../statistical_review_of_world_energy_full_report_2009.pdf

3. http://www.avani-kumaon.org/4. www.socialedge.org/features/.../83-High-Avani-

Kumaon-Jain.doc5. Gramya Darpan, News letter by Watershed

Management Department Uttarakhand, Year 3, Issue 9, January-March 2009.

6. Access to Clean Energy A Glims of Offgrid Projects in India,http: //www. winrockindia. org/pdf/01_ACE_Case_Study_Final_Cover_15-10-2010.pdf

7. http:// www.stovepyromania.blogspot.com /p/about-stove.html

8. Singh Ashutosh and Shah Pankaj, Developing Social Entrepreneurial Culture: A Strategic Orentation. How to Stratregy, Edited by Thakur Rajiv R. and Singh Sanjay Kumar, Macmillan Publishers India Ltd. Pg.230.


Introduction

Traditional marketing is not convinced to interact product and services which perceived as an interferers manner. Similarly, traditional marketers have to products onto potential targets customers. For marketers, the old way of doing business is unsustainable.

However, this major flaw of traditional marketing is currently corrected by digital marketing. The ever evolving internet has caused many changes in marketing. Now, there is search

engine marketing, email marketing, blog marketing, content marketing, social media marketing etc. These, however, can be consider under one concept – digital marketing.

This marketing development and evolution of this business area is mainly focused on attracting p e o p l e i n a m a n n e r t h a t s h o w c a s e s understanding of people’s problems and provision of timely solutions with a influencing way of communication. In this sense, relationship marketing tactics are mostly implemented by using technology. For examplify, this new

The new era of business through digital marketing in recent year has meant rethinking of the marketing

strategies and particularly business communication strategies that influence online communication that

undergone major charges both in terms of means but especially on content. Online business can no longer rely

on traditional marketing tactics and campaigns to attract retain and expand consumers because there is a

transformation in how people interact with brands and companies, how they shop and buy in online settings.

Traditional marketing is no longer a viable option because it focuses on pushing a message out. In online

business framework, a new marketing development has arisen, which is based on various factors. These factors

focused on attracting valuable consumers that choose to interact with a particular company that provides them

something extra benefits as compare by traditional marketing.

The main objective of this research paper is to enhance academic understanding of factors that influence digital

marketing comm., strategy that explores the implications for management practice. Quantitative data collected

via a self-completion survey are used to test a hypothesis in the context of digital marketing communication. The

empirical setting is Delhi NCR, which has an increasingly competitive environment. In this paper, we propose

a definition for digital marketing communication and examine the online strategies associated with

communication based concept.

Keywords: Digital marketing, online brands, communication strategy

Abstract

45

Comparative Analysis of Impact of Digital Marketingand Traditional Marketing with SpecialReference to Delhi-NCR

*Asso. Professor, IIMT College of Engg., Gr Noida,UP, [email protected]**Professor, IIMT College of Engg., Gr Noida, UP , [email protected]

Dr Mukesh S Tomar*Dr Praveen Kumar**

46

approach of marketing is prioritizing the attraction of potential customers with quality, search-friendly content, such as videos, still images, and stories that get grip if they fulfill the need and expectation of emotional criteria. Moreover, this content is syndicated on various social media outlets that have to be relevant to the b r a n d a n d i t s o v e r a l l i n t e g r a t e d communications.

Edelman (2010) focused on the main aspects of digital marketing special reference for marketers in creating and sustaining value through their marketing strategies. He identified four sources of value. Firstly, digital marketers focus on coordinating their activities to create consumer engagement throughout the digital purchase channel. Secondly, they use brands in online settings to create consumer empowerment in the co-creation of products, services, and strategies and in supporting the brand as an advocate. Thirdly, marketers act like publishers of different forms of content to support products, segments, channels, and promotions. Fourthly, they gather, establish and use a excess of digital data to learn more about consumers and the next directions of their marketing efforts.

Thus, digital marketing is one of the most advanced fields today when it comes to big data. Major ad space sellers leverage highly convinced and comfortable algorithms to process customer profiles and identify the most suitable type of banner advertising. In addition, automated Retrun On Investment data is available for search engine keywords, making it possible to optimize marketing budget in real time.

Therefore, it is significantly important to understand the concept of digital marketing. In this regard, Digital Marketing (DM) refers the process of using digital technology for integrating, targeting, and measuring in-depth communication with customers to retain and acquire customers on the bases of emotional criteria.

B r a n d - F o c u s e d M a r k e t i n g Communications

Brand-focused marketing communications in the digital environment have a special impact on the capitalization of the company. Marketing communications are the means by which companies try to inform consumers, to convince them and remind them - directly or indirectly - about the products and brands they sell. In a sense, marketing communications represent the "voice" of the brand and represent tools that can start a involvement and can build relationships with consumers (Kotler, 2012). Although marketing communications play several crucial roles for any brand in a business context, they must deal with increasingly more difficult situations. Technology and other factors have profoundly changed the way consumers process information and even if they reach the stage of information processing. Therefore, marketing communications should be integrated to deliver a consistent message and to achieve strategic positioning in all relevant communications tools.

Measuring Digital Marketing

Measurement considered as a science inplace of simple tools. To measure the effectiveness of a campaign of digital marketing (DM), an organization needs to monitor different types of web analytics. For a successful online marketing campaign, it is necessary to study which strategy work and which need adjustments in order to create relevant content that is syndicated on various outlets, including the organization’s website. The main objective is to yield results of attracting more leads or converting leads into customers.

However, DM strategy have a long term perspective and results may not always occur overnight. Nonetheless, any strategy needs to be measured to examine opportunities of improvement or establish the programs to drive business growth.


47

Methods

In a first stage, research variables, it was tried to identify most important factors affecting development of digi ta l market ing of communication industry in Delhi NCR. Also, a conceptual frame was presented for relationships among variables. For this purpose, the questionnaire which was based on digital marketing, used to identify the most important factors in digital marketing of communications industry.

This questionnaire was distributed among experts through online and off line to various subject experts. They were asked to express their opinion about existence of such factors in digital marketing process and mention other factors, if any. From presented factors, finally, the experts stated that seven digital marketing factors have the highest importance: communication principles, interaction with customer, predicting future, integration of marketing skills, research, technical knowledge, and monitoring measurement and refinement.

Then, it was tired to identify the most important factors affecting digital marketing creation in communications industry in India.

The identified factors were used as input. From the perspective of interviewees, finally, the

factors affecting digital marketing development in communications industry companies included operational strategic, marketing, environmental, and education level factors. They were presented in conceptual model. Accordingly, the research hypotheses are as follows:

• H1: The operational strategic factors impact on digital marketing.• H2: The customer education level impact on digital marketing.• H3: The marketing factors impact on digital marketing.• H4: The environmental factors impact digital marketing.In the second stage, a questionnaire with 16 questions which included operational indicators of research variables was used to assess the relationship among variables. It was distributed among samples. Totally, 113 questionnaires were returned.

The Alpha Cronbach was used to determine the reliability of questionnaire. For this purpose, 16 questionnaires were distributed among specialists. The reliability of variables is represented in Table 1. Considering the coefficients higher than 0.7 for all variables, this indicates acceptable reliability of data collection tool.

Sr No.

Variable No. of Questions Alpha Cronbach Coefficient

1 Operational Stra. Factors

3 0/895

2 Education level factor 3 0/878

3 Marketing factor 3 0/875

4 Environment factor 3 0/827

5 Digital marketing factors

4 0/906

Total Question 16 0/927

Table 2: Alpha Cronbach coefficient (reliability of questionnaire)

Comparative Analysis of Impact of Digital Marketing and

Traditional Marketing with Special Reference to Delhi-NCR

48

The data were analyzed using Spss 22 software to describe demographic information, assess normal distribution of sample, and determine the average of variables and software to test the hypotheses using structural equation modeling method. Based on correlation coefficient and multiple regression equations, the relationships between variables were measured. Then, the findings were analyzed according to results of testing research hypotheses by structural equation modeling method and their outputs including fitness indices and regression coefficients of structural model.

Findings

The sample (n=226) included 106 men (46.9%) and 120 women (53.09%). Also, most of the participants were in age range 31 to 40 years (38.9%), had bachelor degree (70.4%), and were employed as unit specialist (83.1%).Data Normal Distribution Findings

The results of Kolmogorov-Smirnov test which evaluated distribution normality of data are presented in Table 3.

Structure Number

of data

Mean Z

Value

(sig) level Result

Operational strategic factors 226 3/181 1.165 0.094 Normal Dist.

Education level factor 226 3/437 1.256 0.084 Normal distribution

Marketing factor 226 3/309 0.867 0.179 Normal distribution

Environmental factor 226 3/642 1.213 0.089 Normal distribution

Skill gap in digital marketing 226 3/214 0.653 0.196 Normal distribution

Table 3: Results of Kolmogorov-Smirnov test

The results showed that since the significance level of test is above 0.05% and Z value is less than 1.96, the normality of data distribution is confirmed. The parametric tests and the maximum likelihood method may be used in structural equation modeling.

The Results of Research Hypotheses

The structural equation modeling was used to test the research hypotheses. For this purpose,

the structural model of relationships among variables was designed using Amos 21 software. The designed structural model of sample was tested. In this regard, the questionnaires data was used in model. In the following, the final structural equation model of research is presented.


49

The results of testing first hypothesis (considering the regression coefficient (0.494) of relationship among variables) shows that the strategic operational factors play an important role in reducing and eliminating skill gap in digital marketing of communication companies. In other words, the strategic thinking in organization will provide proper understanding of internal and external environment, suitable targeting for short and long-term, proper budgeting and allocation of corporate resources, and other strategic actions.

Conclusion

The study of communication industry in terms of using digital marketing mechanisms in marketing and goods and services selling process showed that the companies had failures in different areas and this led to factors in goods and services digital marketing.

The identification of factors affecting in digital marketing of studied will be crucial to improve digital marketing comm. This will provide better conditions for selling goods and services and more success. Considering the results, it seems that among the factors affecting in digital marketing, the operational strategic and environmental factors are more effective. Therefore, the following suggestions are presented:

1) The implementation of operational strategic actions is one of the important factors which influence in digital marketing. In this regard, the implementation of actions such as considering customer demands and dynamic understanding of target market, proper planning for digital marketing processes, allocation of funding for each stage of planning digital marketing, considering project management skills in marketing as one of the important of all organizational layers in digital marketing programs, setting the main objectives of marketing activities, attempt to achieve objectives with maximum efficiency, considering the current and future benefits of advertising costs in digital marketing, and etc. play an important role in reducing the skill gap in digital marketing and lead to company's success in products and services digital marketing.

2) Given the role of environmental factors as an effective indicator in reducing skill gap in digital marketing, some points in this context should be considered. First, the religion of people should certainly be considered in advertisements in virtual environment. Second, due to differences in business and trade in different cultures, this should be considered in e-commerce of companies, especially marketing. Third, the taxes,

Result Critical value

Sig.level Regression

coefficient

Hypotheses

High direct, significant,

and positive effect

5/504 0/000 0/494 skill gap in <--- Operational strategic factors

digital marketing

Low direct, significant,and positive effect

3/843 0/000 0/219 skill gap <--- Education level of customers in digital marketing

Low direct, significant, and positive effect

4/240 0/000 0/278 skill gap in digital <--- Marketing factors marketing

High direct, significant, and positive effect

6/196 0/000 0/582 skill gap in digital <--- Environmental factors marketing

Table 5: The evaluation of research hypotheses



50

duties, divisions, and prohibition of some products or dealing with some countries should be considered in e-commerce, especially marketing. Fourth, the technological factors are one of the important factors which shorten products life and lead to constant innovation. Therefore, it should be considered in planning of company for advertisement. Finally, the domestic and foreign competition with companies having similar products and attitude towards e-marketing activities should be considered in planning of company.

Although this study tried to localize skill gap in digital marketing of communication industry and match them with organizational realities of companies, it seems that it is necessary to conduct a study which uses a more comprehensive approach to identify factors in digital marketing. Therefore, it is suggested that future researchers provide a comprehensive model for needed skills in digital marketing of communications industry using qualitative approaches.

References

1. EPW NOV to June 2017 edition.2. Bughin, j., 2015. Brand success in an era of

digital darwinism. Mckinsey quarterly, f e b r u a r y , a v a i l a b l e a t : www.mckinsey.com/insights/high_tech_telecoms_internet/brand_success_in_an_era_of_digital_dar winism [accessed 12 may 2015]

3. Content marketing institute, 2015. What is content marketing?. [online] available at:

4. Http://contentmarketinginstitute.com /what-is-content-marketing/[accessed 19 march, 2015] edelman, d.c., (2010), branding in the digital age: you’re spending your money in all the wrong places,

5. Boston: harvard business review, December issue

6. Flanagan, k., 2015. The essential guide to creating a successful content marketing strategy. [online]

7. B log .hubspot . com. Ava i lab le a t : http://blog.hubspot.com/marketing/content-marketing-blueprint-ht

8. [accessed 19 march, 2015]9. Hubspot.com, 2015. Hubspot – internet

marketing company [online] available at:Http://www.hubspot.com/internet-marketing-company [accessed on 13 may, 2015]

10. Kotler, p., kartajaya, h., setiawan, i., 2010. Marketing 3.0. From products to customers to human spirit, hoboken, new jersey: john wiley&sons

11. Deiser, roland; sylvian newton (2013). Six social-media skills every leader needs. Mckinsey quarterly.

12. Hamill, j.; tagg, s.; stevenson, a.; vescovi, t. (2010). Special edition – new developments in online marketing. Journal of marketing management, v. 26, n. 3, p. 181–186.

13. Jarvenin, j.; tollinen, a.; karajlotou, h.; jayawardhena, c. (2012).

14. Digital and social media marketing usage in n2n industrial section. Marketing management journal, v. 22, n.2, p.102–117.

15. Jerzy, grobelny; rafalł, michalski. (2015). The role of background color, inter letter spacing, and font size on preferences in the digital presentation of a product. Computers in human behavior, v. 43,p. 85-100.

16. Miller, j.; gllansser, b. (2011). The “inside” and the “outside”: finding realities in interviews. In d. Silverman (ed.), qualitative research. London: sage.

17. Michaelidou, n.; siamagka, n.; christo doulides, g. (2011). Usage, barriers and measurement of social media marketing: an exploratory investigation of small and medium b2b brands. Industrial marketing management, v. 40,n. 7, p. 1153-1159.


This Research-Paper starts with an overview of the factors that have been identified to have an important impact

on women managers’ success. We thereby define success as advancing up the corporate ladder. Our overview of

the relevant factors distinguishes between individual level, organizational, and societal factors. In the next

section of this research-paper, we focus on the business case for granting women equal opportunities for

advancing to managerial positions and rising through the levels of organizational hierarchies. The discussion of

the benefits associated with granting equal opportunities to men and women make it clear why organizations

should make serious efforts to address the issue, especially since there is a shortage of skilled labor in the United

States and in many other industrialized countries. In addition, it becomes evident why students of management

should know and care about the topic. Finally, we make suggestions as to what organizations can do to redress

women’s underrepresentation in management.

Key words: Factors for Individuals, Organizational Factors, Gender Stereotypes, Suggestions, Conclusion

Abstract

Introduction

Although the number of women in management has doubled over the last 30 years, women are still underrepresented in managerial positions worldwide. For example, despite holding 37% of all management positions in the United States, women make up only 5% of CEOs in Fortune 500 companies. A comparison with recent data from India reveals a similar situation, with women holding about 20% of managerial positions and accounting for only 3% of CEOs in the top 50 publicly quoted companies. The situation worldwide can be characterized as follows: the higher the managerial level, the lower the proportion of women.

Factors influences women managers’ success:

The vast majority of empirical studies on woman managers has focused on the question why women do not advance in management as much as men. However, more recent studies in fields such as management, sociology, psychology, and women’s studies, among others, have also examined which factors are beneficial to women managers’ success. This research-paper gives an overview of both the barriers and success factors for women managers’ success. Thereby we have divided the relevant factors into three major categories: individual level, organizational, and societal factors.

*Asst. Prof.of BBA Department**HOD of BBA Department, (Modern College of Professional Studies, Mohan Nagar, Ghaziabad)

51

Factors InfluencingWomen Managers’ Success in India

Pravanshi Yadav*Anuj Sharma**


52

Individual Level Factors

The individual level factors, also referred to as person-centered factors in the literature, focus on the characteristics of female managers. They include general individual-level factors, such as female managers’ human capital, perception of themselves and their abilities, personality traits, and the inclination to systematically plan a career. In addition, individual-level factors also comprise aspects of a woman manager that are essential for her interaction with others such as her linguistic style, assertion of self-interests, and leadership style. At first, we present the general individual-level factors, before discussing how female managers’ interaction with others may impact their career advancement.

Human Capital

A popular explanation for the gender gap in workplace leadership is that women’s human capital investment is lower than men’s. This argument is based on Becker’s3 logic that investing in human capital (i.e., education, training, and work experience) leads to knowledge, skills, and abilities, which then increase an employee’s productivity. This, in turn, is rewarded by an increase in pay and job status, resulting in upward mobility. However, a closer examination of empirical data shows that the simple explanation that women invest less in their human capital and thus do not advance to higher managerial levels to the same degree as men does not hold true. In the United States and many other industrialized countries, women now attain university degrees at higher rates than men do.

The difference in gains between comparable men and women include both opportunities for managerial advancement and pay. With regard to work experience, studies show that men generally need to work fewer years for the same company to advance to higher levels of management than women do. In addition, men gain more advantages such as increased training

and development opportunities. In contrast, neither women’s tenure with the same organization nor their international experience brings the same benefits as is true for men. Along the same lines, studies have revealed that although female managers do not quit their jobs more often than male managers do, when they do quit and then obtain a new position, they are penalized more than their male counterparts are in terms of lost wages.

Self Confidence

A number of empirical studies have reported that women tend to underestimate their actual performance in situations in which they are evaluated. Overall, male managers have been found to not only rate their overall performance higher than comparable female managers, but also to evaluate their skills and their intelligence higher than their female counterparts. This tendency to underestimate their own capability and performance may have a negative impact on women managers’ advancement in the long run. In concordance with this assumption, interview studies have revealed that a high percentage of female mangers (up to 50%) regarded lack of self-confidence as a barrier to their career advancement. Now one is inclined to ask what causes female managers to have lower levels of self-confidence than their male counterparts. Empirical evidence from the field of social psychology shows that men and women differ with regard to their dominant attribution style. In particular, men tend to attribute successes internally—they believe that their successes are caused by their abilities. In contrast, women are more inclined to attribute their successes to factors outside their person such as properties of the situation or mere luck. Overall, the typical attribution style of men facilitates their self-confidence since successes are explained by their abilities, and each success is therefore likely to increase self-confidence. However, this is not true for women, since successes are often attributed to causes the woman does not have control over.

53

Factors Influencing Women Managers’ Success in India

Personality

Although their number is limited, there are some studies that examine gender differences in the links between personality and advancement in management. Overall, they found that the personality traits that are positively related with advancement are the same for men and women— although men may be more likely to possess these traits. In particular, masculinity (i.e., self-rated dominance, forcefulness, independence, and aggressiveness) is positively related to women’s managerial levels, as is the case for men. Recent studies show that both male and female managers prefer work cultures that emphasize traditional male values such as competition, effort, and work pressure over feminine work cultures. However, these studies leave unclear whether mainly women with a masculine orientation choose to pursue managerial careers (self-selection), if only women with this kind of orientation advance to managerial ranks, or if individual women’s orientations change toward a more masculine orientation as a function of their job as a manager.

Career Planning

Since women have historically been and in many cases still are faced with the decision between pursuing a managerial career and having a family, they have been found to plan their careers less carefully than their male counterparts, especially in the early years. Often, women do not focus as much on building up a career portfolio and a curriculum vitae that will prepare them for advancement to higher positions several years later. However, it seems that with higher proportions of women enrolled in MBA programs and other types of business education, this factor may be becoming less important.Beyond these general individual-level factors, there also are differences between men and women with regard to their typical interactive style that are important for women managers’ success.

Organizational Factors

In addition to the individual-level factors just discussed, a number of organizational factors, also referred to as situation-centered factors in the literature, influence the likelihood of women being hired and promoted into managerial positions. Among these are personnel selection systems, the lack of female role models and mentors, the different access to networks, and several characteristics of the organization, including the number of female employees.

Personnel Selection

Empirical analyses show that the hiring of managers is commonly based on informal networks, not systematic personnel selection procedures. In addition, many organizations treat cases on an ad hoc basis—especially for top management positions—and do not keep records of the promotional process. However, studies show that formalized, open selection methods increase the number of women in managerial positions. In addition, preliminary evidence suggests that including more elements in the selection process that systematically assess performance, such as work sample tests, helps in diminishing bias against women.

Furthermore, empirical evidence suggests that the degree to which a firm’s human resources practices are formalized correlates with the number of women in managerial positions. Overall, it can be summarized that personnel selection and evaluation methods that follow formalized procedures allowing people to be judged on their (past) performance and not relying solely on others’ impressions and subjective evaluations of potential decrease biases against women. In concordance with this body of evidence, preliminary empirical results suggest that women are more likely to be promoted into managerial positions than to be hired into these jobs. Again, this may be because promotions depend on past performance and are


54

based not only on an evaluation of management potential.

Organizational Culture

According to some studies, the majority of female managers regard the values, politics, and culture of the organization they work for as a barrier to their career development. For example, many female managers tend to think that if they are good at their jobs, others should notice and promote them. Thus, they should not have to make themselves visible, promote themselves or network with senior managers to build sponsorship. However, these behaviors are necessary for advancement in many organizations. In addition, many female managers report that they are in favor of an open culture that allows for teamwork and collaboration, instead of power games—which many perceive as dominating the culture of their organizations. Since more often than not female managers perceive a lack of opportunities to change their organizational culture, which can sometimes be characterized as a “macho culture,” they feel frustrated and discouraged from pursuing a managerial career. Overall, an organizational culture that faci l i tates cooperation, and an open exchange of information and merit should not only be beneficial for female employees, but also for the organization as a whole.

Social Factors

The third category of factors influencing women managers’ success is societal factors, also referred to as systems-centered factors in the literature. In some ways, these factors are the most influential ones, since they not only impact women’s success directly, but also influence the previously stated individual and organizational factors, and thus have additional indirect effects. The most prominent societal factor is gender-role stereotypes, which are discussed here at greater length, because they have been found to be prevalent worldwide and influence women

managers’ success directly and by means of organizational systems and practices. Other factors presented in this section (that are different from but still influenced by gender-role stereotypes) include management education and combining a managerial career with having a family.

Gender Role Stereotype

Many empirical studies note that gender-role stereotypes are prevalent and have a substantial influence on how women managers are perceived. Scholars distinguish between prescriptive and descriptive gender-role stereotypes. Descriptive gender-role stereotypes are defined as the beliefs that there are differences between how men and women actually behave and what they are really like. For example, men are generally seen as achievement oriented or argentic (i.e., independent, decisive, forceful, rational), whereas women are perceived as socially oriented or communal (i.e., kind, caring, emotional). In contrast, prescriptive gender-role stereotypes are norms about how women and men should behave or not behave. Worldwide, women are expected to be concerned with the welfare of other people (nurturing, affectionate), whereas men are expected to have argentic or masculine characteristics concerned with being assertive, controlling, and confident. According to Heilman, descriptive gender-role stereotypes promote gender bias because there is a discrepancy between the stereotype of what women are like overall and the characteristics managerial jobs require. The discrepancy results in expectations that women will not be able to perform in managerial jobs or to a lesser degree than men. These expectations lead to negative evaluations of women’s competence, either t h r o u g h d e v a l u i n g w o m e n ’ s w o r k accomplishments or through attributing responsibil i ty for women’s successful performance to causes other than their abilities. Studies have shown that the bias in the perception of women’s competence prevails even when explicit evidence for their leadership

55


success is available. Generally, the gender bias described is increased when there is ambiguity about the nature of performance outcomes or the source of performance success.

Prescriptive gender stereotypes also have a negative impact on women managers’ success: when women prove to be competent and have succeeded at “male” work, they violate the normative prescriptions for women. This is followed by negative sanctions, in particular dislike of these women, which again decreases their chance of advancing in management.

While a woman who projects her competence in a purely stereotypically masculine manner runs a higher risk of social resistance than a similarly self-presented man, women can effectively convey their competence if they soften their stereotypically masculine competence with feminine niceness (e.g., smiling, nodding, and leaning toward listeners).

Numerous studies have provided evidence that the stereotype of a manager is very similar to the male stereotype (“think manager think male”) since both are seen as independent, ambitious, competent, and competitive. Schein’s (2001) research shows that this concordance of the male and the managerial stereotype was evident in the descriptions given by business students (male and female) in all of the five countries she examined. The only group that did not show this “think manager think male” phenomenon was American female students: they saw successful middle managers and women in general as similar.

A relatively new approach toward studying gender-role stereotypes and their effects on individual’s behavior uses the paradigm of “stereotype threat.” In this type of study, the female stereotype is made especially accessible to students by having them view female-stereotypic (vs. neutral) television commercials.

Then in a subsequent procedure portrayed as an unrelated experiment, it is assessed how likely women versus men are to express their preference for a leadership role versus a no leadership role. As would be expected, women but not men expressed less preference for a leadership role when stereotype threat had been induced (i.e., women had been portrayed in stereotypical roles in the commercials). These findings not only point to the powerful effects gender-role stereotypes can have on individuals’ behaviors, but also stress that the way women and men are portrayed in the media and in materials used for educational purposes should be under scrutiny.

Management Education

As the studies on stereotype threat have shown, the way men and women are portrayed can impact the roles and responsibilities women choose. In the light of these results, it seems necessary to examine this aspect of management education. Several surveys of MBA students and female managers show that management education is still largely dominated by a male approach. For example, female students often remark that the examples used in class and the speakers invited hardly include women. In addition, female professors are still a minority. In general, it should be examined to what degree management education pro-grams meet the needs of all students, including women and minorities.

Combined Managerial Carrier having with Family

Several empirical studies have shown that women take on the majority of household responsibilities and demands of children, no matter how many hours they work outside the home. Many authors have thus argued that the multiple roles of work and home women occupy lead to time limitations and interrole conflict,


56

which has a negative impact on women’s advancement in management. The predominant patterns of marriage and children among men and women seem to confirm such propositions: Statistical evidence shows that most male managers are married fathers, whereas female managers are more likely to be single or, if married, childless. However, summaries of empirical findings have shown that most evidence does not support the view that women’s multiple family roles cause them to advance less in management than men. Reviews of the literature show that marriage and/or children were either not related to, or were relatively unimportant for, advancement in management for men or women compared to other factors. Furthermore, empirical evidence reveals that when male or female managers were single, they reached lower managerial levels and were paid less than when they were married, controlling for many other factors including age. In fact, some studies suggest that childless single men and women and single fathers advanced less than other family types. The results may be because employers allocate pay and promotions based on an individual’s perceived conformity. In line with this assumption, studies have reported that in the private for-profit sector, traditional fathers (i.e., those married with a spouse not employed outside the home) may advance in management more than other men, whereas mothers with an employed spouse advanced in management as much as other women.

Other evidence also does not support women’s multiple roles as the reason they do not advance in management. A review of the literature shows that the number, or care, of children is not related empirically either to women managers’ advancement in management or to men’s (at least in the United States). However, interview studies consistently reveal that women report lack of adequate child care as a career barrier and problems with child-caring responsibilities as damaging their career. This issue should therefore be addressed by organizations that seek to increase their number of female managers.

There are many business reasons why organizations should do so, as discussed in the next section.

The Business Case

Proponents of equal-opportunities approaches usually argue that giving men and women (as well as other minorities) the same chances to advance in management is dictated by the laws of social justice. While that is true, we argue that there is also a clear business case for providing equal chances for men and women in organizations. The business case focuses on the benefits that employers accrue through making the most of the skills and potential of women employees. The basic argument is that the loss or lack of recognition of these skills and potential is very costly. Consequently, the business case is fundamentally linked to the principles of strategic human resource management, meaning that the full utilization of human resources is regarded as essential for a company’s long-term success. Furthermore, it is crucial that the initiatives designed to create equal opportunities are in concordance with the overall strategic direction of the company. Since achieving equal opportunities is essential to attaining organizational goals, equal-opportunities initiatives have to pervade every aspect of business policy.

The business case for equal opportunities is based on arguments that can be summarized under the phrase “Benefits of Equality”; it includes the following -

Larger and More Diverse Talent Pool

If organizations are truly open to hiring and promoting women (as well as other minorities) into managerial positions, the talent pool potential candidates can be recruited/ promoted from is significantly increased. Following the argument that talent and ability are equally spread throughout all groups, including men and women as well as all ethnic groups, selecting

57


from this larger pool should increase the likelihood of finding a truly excellent candidate for the job. Furthermore, if hiring and promotion practices are based on qualifications and merit alone (and not on networks), this should automatically increase employee diversity which, in turn, increases a firm’s adaptability to new demands. In the face of rapidly changing new technologies and globalization, flexibility is essential for long-term business success. In addition, the United States and many other industrialized countries are facing a shortage of skilled labor or are predicted to do so in the near future. This development makes it even more important to be able to recruit and retain the best talent—regardless of gender.

Best Use of Human Resources in Organization

Organizational systems and practices that ensure bias-free promotion and compensation decisions also allow for optimal use of the human resources that are available in any particular organization. When men and women are given the same rewards for the same performance, they are likely to be equally motivated. Frustration or turnover that results from unequal treatment is avoided, to the benefit of the organization. Women who may have left the organization because they did not perceive opportunities for advancement are now likely to stay and work hard toward the organization’s goals. This is an important aspect considering how high the costs of low productivity and rehiring are, especially for highly skilled employees.

Work Force More Representative for Customer

Another reason why organizations should be open to recruiting and promoting women into managerial positions that has been brought up frequently is the following: According to recent statistics, approximately 70% of all decisions to buy something are made by women. It is

therefore important to understand how women think and feel if an organization wants to meet customer needs. The logical step therefore is to increase the number of women in the organization, especially in higher positions that are involved in strategic decisions.

Higher Creative Potential

Another benefit from increasing the number of women employees, as well as diversity in the organization in general, comes from the improvement in decision-making processes and innovation. As research shows, homogeneous groups are more likely to fall into the “groupthink” trap (i.e., all individuals think in the same way, wherefore risks are not carefully analyzed and often underestimated). In addition, the potential for creativity and innovation is increased when groups are diverse; admittedly the costs of communication and coordination are likely to increase as well. To ensure optimal group functioning and performance, it is advisable to compose groups of people who are diverse with regard to gender, talent, and background but who are committed to the same standards and follow the same procedures. Since sustained innovation is a major competitive advantage, not to say a necessity for survival in today’s rapidly changing world, the gain in innovative potential stemming from more gender diversity in management should be highly valued by organizations.

Suggestions for interventions

Organizations can use numerous interventions to increase the number of women in managerial positions, which are as follows

• Use structured, open selection methods;• Place women in or advise them to take high

skill-level occupations and line jobs;• Provide starting opportunities for women

(e.g., through initial placement on faster tracks);


58

• Give opportunities for challenging assignments and management of others early in career;

• Provide objectively structured processes to identify employees for training and development;

• Provide structured and, as much as possible, objective selection and promotion processes to reduce no meritorious influences on advancement in management;

• Provide women with career support (sponsor, coach, challenging work, visibility, male mentors, and career encouragement from senior staff) not merely emotional support; and

• Use predefined, ideally objective measures of performance

Conclusion

Despite the large increase in the number of women in management over the last 30 years, women are still underrepresented in managerial positions, especially at higher levels. As empirical studies on this phenomenon show, there are still numerous barriers to women manager’s success.

The individual-level barriers include women not receiving the same rewards for investments in their human capital as men, women often being perceived as less self-confident than men based on their linguistic style, and women being less likely to assert their self-interests. However, contrary to the frequent assumptions that women are less natural and thus more ineffective leaders, studies have revealed that female managers in fact show very effective leadership styles.

Why should organizations care about all this? There is a clear business case why organizations should aim at increasing their number of women managers. A larger talentpool, better use of the human resources in the organization, better understanding of customer needs, greater

creative potential, and increase in the firm’s corporate image should be compelling reasons for increasing the number of female managers. Interventions such as implementing structured objective selection and promotion processes and measuring performance objectively should be of benefit to all high-performing individuals in an organization and thus should increase organizational effectiveness. Providing equal opportunities for advancement to men and women is imperative, not only because this is fair, but also because it is based on calculating business logic.

References:

• Burke, R. J., &Mattis, M. C. (2005). Supporting women’s career advancement. Northampton, MA: Edward Elgar Publishing.

• Carli, L. L. (1990). Gender, language, and influence. Journal of Personality and Social Psychology, 59(5), 941-951.

• Carli, L. L., LaFleur, S. J., &Loeber, C. C. (1995). Nonverbal behavior, gender, and influence. Journal of Personality and Social Psychology, 68(6), 1030-1041.

• Eagly, A. H., Karau, S. J., &Makhijani, M. G. (1995). Gender and the effectiveness of leaders: A meta-analysis. Psychological Bulletin, 117(1), 125-145.

• Powell, G. N., & Graves, L. M. (2003). Women and men in management (3rd ed.). Thousand Oaks, CA: Sage.

• Schein, V. E. (2001). A global look at psychological barriers to women’s progress in management. Journal of Social Issues, 57, 675-688.

• Schein, V. E., Mueller, R., Lituchy, T., & Liu, J. (1996). Think manager—Think male: A global phenomenon? Journal of Organizational Behavior, 17, 33-11.

• Stewart, L. P., &Gudykunst, W. B. (1982). Differential factors influencing the hierarchical level and number of promotions of males and females within an organization. Academy of Management Journal, 25, 586-597.

Introduction

Gender diversity is essential to any business by allowing in hiring from vast pool of talent. Diversity brings in with it a richness and variety of experiences and perspectives that benefit companies and stakeholders. Having women on boards encourages more creativity and innovation and encourages board members to consider a broad range of ideas and possibilities whereby they serve as role models, and therefore, improve female employees’ performance and boost company’s images. Diversity, broadly defined, is “any significant difference that distinguishes one individual from another” (Kreitz, 2008). According to Dutta and Bose (2006), the definition of gender diversity in the boardroom refers to the presence of women as the board of directors which is an important aspect of board diversity. Gender diversity could bring board functioning that eventually could influence firm performance. Carter, Simskins and

Simpson (2003) suggest that greater diversity may increase the independence of the board as women have more tendencies to ask questions that would not be asked by male directors. Board gender diversity has become a widely debated corporate governance topic over the last decade. Heterogeneity in decision-making and problem-solving styles produces better decisions through the operation of a wider range of perspectives and a more thorough, critical analysis of issues. The case for greater female board representation commonly rests on four criteria: improving performance, gaining access to a wider talent pool, increasing responsiveness to the market and strengthening corporate governance (Doldor et al., 2012). Moreover, as Asia's strong growth propels it to play a central role in the global economy, the most effective boards are said to be the ones that are “international” and empowered with “functional, sector and gender diversity” (Yi, 2012). Numerous statistics have been produced to promote gender diversity on

The Purpose of the paper is to critically analyse the existing literature on relationship between Gender Diversity

and Company Financial Performances on the basis of current research. Companies are under immense

encumbrance to assure diversity in the management of their company. Many studies are being conducted for

analysing the correlation between gender diversity and financial performance. Although research are

inconclusive whether gender diversity results in improved performance but credible studies by McKinsey &

Company, Catalyst, Credit Suisse Research Institute, PwC indicate that gender diversity leads to improved

financial performance.

Keywords: Gender Diversity, Company Financial Performance, Agency Theory, Resource Dependency

Theory.

Abstract

59

Gender Diversity in the Boardroom andCompany Financial Performance: A Review ofResearch & Perspectives

**Doctoral Scholar, Department of Commerce, Delhi School of Economics, University of Delhi, Email id – [email protected]**Assistant Professor, IILM College of Engineering & Technology, Greater Noida, Email: [email protected]

Vijay Lakshmi*Shikha Mittal Shrivastav**

60

company boards. For example, a survey by Catalyst (2011) shows that Fortune 500 firms from the top quartile of female director representation significantly outperformed those from the bottom quartile in return on invested capital over the period 2004–2008. Matsa and Miller (2011) found that women may have specific skills that are more valuable in some environments, such as the marketing of packaged consumer goods.

An issue may arise on the reasons that lead to the lack of women involvement in the board of directors. One of the reasons is due to the cultural and social attitudes towards what job is suitable for women and men. Women might be stereotyped in some industry. The ability of women to manage the organization is questioned due to the perception of their characteristics that are believed to be emotional, meticulous and fussy. Even, the glass ceiling factor is said to be o n e o f t h e c o n c e r n o f w o m a n underrepresentation at decision making level. Furthermore, some argued that women may recede from competition for promotions (Niederle and Vesterlund, 2007) or choose to stay away from the stress and work-life imbalance associated with occupying the executive office suite (Matsa and Miller, 2011) that lead to the problem in supply. Another reason lies on the limitation of women expertise in a particular field of business that consequently limit women’s opportunity to move the ladder. The study on PLCs (Public Listed Companies) of five ASEAN countries namely Malaysia, Singapore, Indonesia, Thailand, Philippines and together with Hong Kong, which discovers that the company that involved women in the board of directors had better returns on equity (ROE) or stock prices versus their respective market indices (Muhiudeen, 2010). The finding of Julizaerm and Zulkarnain (2012) shows the positive association exists between gender diversity and ROA, which suggests women, could give impact to a better financial condition of the company. Women also tend to take their roles very seriously in boardrooms, which can

lead to “more civilised behaviour” and better governance (Singh and Vinnicombe, 2004). Supporting this view, Adams and Ferreira (2009) argue that women directors introduce tougher monitoring as they do not belong to the “old boys club”. More notably, they document improved attendance behaviour amongst male directors and higher sensitivity of CEO turnover to stock performance with more gender-diverse boards.

Advantages of Diversity

1. Diversity enables diversity of thoughts thereby different viewpoints, ideas, and market insights, which enables better problem solving providing wider perspectives and diverse alternatives, ultimately leading to superior performance at the business unit level and enhance creativity and innovation.

2. A gender-diverse workforce provides easier access to resources, such as various sources of credit, multiple sources of information, and wider industry knowledge.

3. A gender-diverse workforce allows the company to serve an increasingly diverse customer base.

4. Gender diversity helps companies attract and retain talented women. This is especially relevant as more women join the labor force around the world. Companies cannot afford to ignore 50% of the potential workforce and expect to be competitive in the global economy.

5. Diversity enables Competitive Advantage and the pace of change in today's global economy is rapidly increasing. Having diversity of thought at all levels, and especially in senior leadership positions, can help organizations effectively deal with the swiftly changing economic realities that this entails.

6. Having a gender diverse workforce will make the company to attract greater talents from around the world and it will be seen as having fair employment practices.


61

7. G r e a t e r g e n d e r d i v e r s i t y d r i v e s performance, global competitiveness and team spirit.

Theoretical Background and Gender Diversity

In order to evaluate the casual relationship between gender diversity and company financial performance theoretical foundations based on the theories of corporate governance is required. The three Corporate Governance theories namely Agency Theory, Resource Dependency Theory and Social Psychological Theory have gained much of the attention of the academicians and practitioners in evaluating the relationship between Gender Diversity in the Boardroom and the corporate financial performance. However, these three theories together could not explicitly explain the impact of gender diversity on financial performance. Agency Theory favours gender diversity to improve financial performance based on the argument that that women boardroom members tend to bring a fresh perspective on complex issues which can help correct informational biases in strategy formulation and problem solving. Also it was found that women tend to pursue their roles more seriously which leads to civilized behaviour and hereby improved governance. In a similar line, Resource Dependency Theory also supports the notion that greater gender diversity leads to increased performance. It has been described in this theory that board plays an important role in linking organization with the external organizations and this was evident from the McKinsey report that gender diversity helps in sustaining good relationships with female clients and gaining female insight into consumer buying patterns and also women directors tend to have close ties with the women directors in the other organizations of the same or different industry. However, against the aforementioned two theories, Social Psychological Theory postulates that increased gender diversity leads to poor performance. The Social Psychological theory

suggests that the members of homogeneous groups share the same opinion and thus tends to communicate more frequently. It has also been found that homogeneous group in board room tend to experience fewer emotional conflicts.

Objective

The Objective of this paper is to review the literature on Board of Directors Gender Diversity and Financial Performance of the Company.

Review of Research & Perspectives

Several studies have been conducted to provide insight on gender diversity in boards of directors and its relation on company performance. However, it can be said that the results obtained are varied. Carter, Simskins and Simpson (2007) found that gender diversity has positive effects on financial performance primarily through audit function and firm financial performance. Erhardt, Werbel and Shrader (2003) discovered that the board of director’s diversity was positively associated with both ROA and ROI. In contrast, the results gained by Wang and Clift (2009) found that there is no strong relationship between gender diversity on the board and financial performance and they assumed it is due to very few female directors in the sample.

Having diversity and managing it adequately helps organizations make better decisions, produce better results, achieve unexpected financial performances and maintain key competitive advantages on the market. More diversity illustrates a synergistic combination of resources, enables trust, cohesion and professional bonding. And, yes, there are situations in which men and women oppose conflicting agendas, but that’s where diversity management comes in. Aligning perspectives and encouraging cohesion adds value to group functioning and cooperation, thus enabling decision calibration. Gender diversity is just a needle in the haystack, when it comes to the reconciliation of human differences. There are,

Gender Diversity in the Boardroom and Company Financial Performance: A Review of Research & Perspectives

62

and always will be, organizational concerns in levelling not only gender criterion, but also, age, tenure, cultural background and education. It is important for organizations to know that managing gender diversity must not be treated lightly. Positive effects may take a long time to emerge, and that occurs when the process is not completely overtaken by negative consequences. Aligning goals and objectives within a gender diverse team can be a measure that unites different mind sets in a common effort to achieve desired performance. Moreover, organizations must find ways to foster similarities within both men and women. Companies that invest in gender diversity at high levels are less likely to fall prey to fraud, corruption, and other scandalous episodes and fewer governance-related controversies, according to a 2015 analysis by MSCI Inc. Catalyst, Credit Suisse Research Institute, Goldman Sachs JBWere, McKinsey & Company and PwC have all issued studies indicating return on equity, return on sales, and return on invested capital are higher when gender diversity exists on the board of directors. In 2015, Aaron A. Dhir, an associate professor at York University’s Osgoode Hall Law School wrote “Challenging Boardroom Homogeneity: Corporate Law, Governance and Diversity.” He found a number of positive results of gender-based diversity for boardroom work including: enhanced dialogue; better decision making (especially around the value of dissent); more effective risk mitigation and crisis management; higher quality monitoring of and guidance to management; positive changes to the boardroom environment and culture; more orderly and systematic board work.

In PwC’s 2014 Annual Corporate Directors Survey - The gender edition, their findings show that male and female directors clearly do have different perspectives on some important corporate governance issues. And in some areas, practices differ for boards that have female director representation. In particular-

• Women are more likely to consider board diversity important.

• Women are more than twice as likely as their male peers to say they are not satisfied with the explanations they do get.

• Women want to spend more time on IT despite higher levels of engagement, and are more concerned about the digital skills of today’s boards.

• Women see more obstacles to replacing an underperforming director and are more likely to believe their board evaluation process could be enhanced.

McKinsey has been examining diversity in the workplace for several years. Our latest report, Diversity Matters, examined proprietary data sets for 366 public companies across a range of industries in Canada, Latin America, the United Kingdom, and the United States. In this research, we looked at metrics such as financial results and the composition of top management and boards. The findings were clear:

• Companies in the top quartile for racial and ethnic diversity are 35 percent more likely to have financial returns above their respective national industry medians.

• Companies in the top quartile for gender diversity are 15 percent more likely to have financial returns above their respective national industry medians.

• Companies in the bottom quartile both for gender and for ethnicity and race are statistically less likely to achieve above-average financial returns than the average companies in the data set (that is, bottom-quartile companies are lagging rather than merely not leading).

In the United States, there is a linear relationship between racial and ethnic diversity and better financial performance: for every 10 percent increase in racial and ethnic diversity on the senior-executive team, earnings before interest and taxes (EBIT) rise 0.8 percent. Racial and ethnic diversity has a stronger impact on


63

financial performance in the United States than gender diversity, perhaps because earlier efforts to increase women’s representation in the top levels of business have already yielded positive results.

In the United Kingdom, greater gender diversity on the senior-executive team corresponded to the highest performance uplift in our data set: for every 10 percent increase in gender diversity, EBIT rose by 3.5 percent.

While certain industries perform better on gender diversity and other industries on ethnic and racial diversity, no industry or company is in the top quartile on both dimensions. The unequal performance of companies in the same industry and the same country implies that diversity is a competitive differentiator shifting market share toward more diverse companies.

Credit Suisse’s “Gender Diversity and Corporate Performance” report in 2012 have identified seven key reasons why greater gender diversity could be correlated with stronger corporate performance:

• A signal of a better company.• Greater effort across the board.• A better mix of leadership skills.• Access to a wider pool of talent.• A better reflection of the consumer decision-

maker.• Improved corporate governance.• Risk aversion.

Having women on boards encourages more creativity and innovation and encourages board members to consider a broad range of ideas and possibilities. Moreover, research shows companies with female directors are better than others at identifying and capitalising on innovative opportunities. This is perhaps explained by the fact that women directors are more likely to be in sync with women’s needs than men are, which in turn helps to develop successful products and services. Additionally

Torchia, Calabrò and Huse (2011) found that innovation is enhanced when at least three women are on their boards as they form what the researchers call a ‘critical mass’ that changes board dynamics which fosters creativity and encourages new ideas. In fact, an analysis of FTSE-listed boards found that operational performance and share prices were both higher in the case of companies where women made up over 20% of board members than those with lower female representation. Women directors have also been found to deal more effectively with risk. Studies by Bart & McQueen (2013) and Adams & Ferreira (2009) concluded this is because not only do women better address the concerns of customers, employees, shareholders, and the local community, but they also have a tendency to focus on long-term priorities.

Gulamhussen & Santa, 2010 finds that gender diversity in boardrooms can add value to the firm by creating better client relationships, risk and audit management. Francoeur, Labelle and Sinclair Desgagne (2008) document a positive relation between gender diversity and financial performance in the case of firms operating in riskier environments. The presence of women on boards appears to help deal with more complex strategic issues. Adams and Ferreira (2009) show that female directors have a significant impact on board inputs and governance. More specifically, gender diverse boards allocate more effort to monitoring management, but the true relation between gender diversity and firm performance is complex. For instance, these authors find that the relation between gender diversity and firm performance is contingent upon the quality of governance. Amar, Francoeur, Hafsi, Labelle find that diversity has a positive impact on performance in firms that otherwise have weak governance, as measured by their abilities to resist takeovers. Enforcing gender quotas in the boardroom of the firms with strong governance could ultimately decrease shareholders’ value (Adams and Ferreira, 2009, p. 308). Overall, empirically, gender diversity is found to be either positive or neutral vis-a-vis performance. A


64

growing literature (McKinsey & Company, 2010) indicates the potential benefits of women at the board level. However, women still hold few board seats. According to a recent report by Board Watch, only 15 percent of directors in the United Kingdom’s FTSE 100 companies are women, and there were just 9.4 percent in the FTSE 250 in 2011 (News Alert, 2012). In the United States, women constitute 16 percent of the directors of S&P 500 companies (Spencer Stuart, 2010) and in most other countries that figure ranges between 0.1 percent and 15 percent (Catalyst, 2011). When a woman joins a firm’s top management team, the team becomes more diverse, both in terms of social categorization and information (Van Knippenberg, De Dreu, and Homan, 2004).Where women do occupy senior managerial positions, they have been found to focus more than men on the development and mentoring of their subordinates, encouraging them to reach their full potential and rewarding them for good performance (Eagly,et al., 2003). Research has shown that increased gender diversity on boards is associated with better financial performance, and that improved workforce participation at all levels positively impacts on the economy (ASX 2010).In Norway, since 2006, all listed companies must have 40 percent women directors on their board; otherwise, the stock exchange will delist those (Clarke & Branson, 2010). As theEuropean champion, Norway jumped from having 22 percent of women on boards in 2004 to28.8 percent in 2006, to 44.2 percent in 2010, as a result of quota legislation. Norway’s impressive growth path is followed by that of Sweden (26.9 percent), Finland (25.7 percent), and Denmark (18.1 percent).

Christiansen et al., 2016 by using a sample of more than 2 million companies across 34 European countries in 2013 find a strong positive association between the share of women in senior positions and firms’ ROAs. Substituting one male for one female person in senior management or on the corporate board is associated with

between 8 and 13 basis points higher ROAs. And their findings suggest that increased female representation in senior positions could play an important role in boosting Europe’s potential output. To the extent that higher involvement by women in senior positions improves firm profitability, it may also help support corporate investment and productivity, mitigating the slowdown in potential growth. Sarkar, J., & Selarka, E. (2015), study contributed that there is no significant difference between Women directors affiliated to the family and firm value but on the other hand, a significance difference was found if women on boards are independent directors. Test results in the case of market value were somewhat different. Women directors affiliated to the family positively impact the profitability while no significance difference was found in case of appointing independent directors. Asian Women are still largely under-represented on corporate boards, despite continued efforts to improve boardroom gender diversity, according to the fifth edition of Deloitte Global’s Women in the Boardroom: A Global Perspective publication. At 8 percent, gender diversity in some of Asia’s leading economies is the lowest compared to other parts of the world. Only a few countries in the region have quotas or other approaches to address the issue. “Organizations with women in the top leadership positions have almost double the number of board seats held by women. The inverse is true as well, with gender diverse boards more likely to appoint a female CEO and board chair,” said Dan Konigsburg, senior managing director of Deloitte’s Global Center for Corporate Governance (Retrieved from https://www.enterpriseinnovation.net/article/gender-diversity-boards-doubled-companies-female-leadership-report-1743690406?lipi =urn%3Ali%3Apage%3Ad_flagship3_search_srp_content%3B2tZXpmC4QN%2BS7rM60R676A%3D%3D). According to BoardEx, a relationship mapping service of TheStreet, women make up approximately 22.2% of S&P 500 boards, which is an increase from 20.5% as of September 2016. The S&P 500 is an index composed of 500 large-cap


65

stocks whereas the Fortune 500 is a list of the 500 largest public and private companies in the U.S. ranked by total revenue. A February 2017 study by PricewaterhouseCoopers found that 91% of directors say diversity enhances board effectiveness and 84% of directors said diversity leads to enhanced company performance."We strongly believe in the business case that, intuitively, greater diversity leads to more perspective, less group think, better decision making and better financial outcomes," Lynn Blake, chief investment officer of global data equity solutions at State Street Global Advisors (SSGA), the investment management business of Boston-based asset manager State Street, said in a s t a t e m e n t . ( R e t r i e v e d f r o m https://finance.yahoo.com/news/five-p-500-b o a r d s - n o - s 1 6 1 7 0 0 1 4 3 . h t m l ? . t s r c = applewf&lipi=urn%3Ali%3Apage%3Ad_flagship3_search_srp_content%3BniPOMC75TX2CYZQu5ghizA%3D%3D). A recent IMF study has found that firms with a larger share of women in senior positions have significantly higher return on assets (ROAs). The study further goes on to state that replacing one man by a woman in senior management or on the corporate board is associated with 8–13 basis points higher ROAs. This is corroborated by a 2015 MSCI study, which concluded that companies in the MSCI World Index with strong female leadership (at least three women directors or female representation higher than country average) generated a return on equity (ROE) of 10.1% versus 7.4% for those without. These are key differentiators and calls for a more concerted push on gender diversity.

Conversely, Wang and Clift (2009) report a tendency towards more female board members for larger Australian companies but find that board gender diversity does not significantly influence accounting measures of financial performance, such as return on assets (ROA) and return on equity (ROE). Carter et al. (2010) also fail to find a significant relationship between gender and ethnic diversity of boards and financial performance using S&P 500 index firms.Also weakening the case for greater gender

diversity, Darmadi (2011) shows that the presence of women in boardrooms has a negative impact on ROA and Tobin's Q using a sample of firms listed on the Indonesia Stock Exchange. He speculates that female director appointment to Indonesian boards may be driven more by familial relationships rather than occupational expertise and experiences, thus leading to a decline in firm performance. Gregory-Smith et al. (2012) analyzed UK firms from 1996 to 2010 and found no significant effect on both the profitability measures i.e. ROA and ROE. Minguez-Vera & Martin (2011) found a significant negative relationship between female directors and firm performance measured by ROE using sample of small and medium Spanish enterprises from1998 to 2003. Alvarez et al.,(2010) selected Spanish corporations that were listed on the Madrid Stock Exchange over the period 2004-2006 as an objective population. Corporate governance information on these companies is available from the CNMV database. Our findings show that companies with higher levels of gender diversity do not obviously outperform other companies with lower levels, in terms of several market and accounting measures. Therefore, gender diversity may not influence corporate performance.

Siantar founds that the presence of women on the board has no significant effect on firm outcomes as measured by Return on Assets. This paper also conducts a difference-in-difference analysis using the Companies Act of 2013 as a source of exogenous variation. Other measures of firm performance such as using Tobin’s Q and measures of firm risks such as Leverage, Current and Solvency ratios also yielded insignificant results. This paper also examined pay inequality among directors and finds a clear pay discrepancy between male and female directors. In UK, Haslam et al (2010) investigated the relationship between the presence of women on company boards and both accountancy-based and stock-based measures of company performance. The study used multiple regression analysis and data between the years 2001 and


66

2005 for all financial time stock index 100 companies (100 companies listed on the London Stock Exchange with the highest market capitalization). Analysing gender diversity of boards in Malaysian companies Abdullah et al. (2015) found that female directors bring economic value, however this is moderated by significant negative market perceptions, leading the market to discount their impact.

The complexity of board heterogeneity effects may explain that results of extant research on the re la t ionship be tween board and top management gender diversity and financial performance are mixed and inconclusive (Adams, Gupta and Leeth, 2009; Carter, Simkins and Simpson, 2003; Daily, Trevis and Dalton, 1999; Erhardt, Werbel and Shrader, 2003; Haslam et al., 2010; Shrader, Blackburn and Iles, 1997). For instance, Adams, Gupta and Leeth (2009) find no difference in firms’ financial performance around the appointment of a woman or a man as a CEO in the USA. Haslam et al. (2010) also report that there is no association between women’s board representation and accounting based performance measures but they find a negative correlation with stock-based performance measures. Judge(2003) argues that although having more women on boards is generally regarded as positive, in fact, women leaders can also have a negative impact on performance (Haslam & Ryan, 2008). Examining FTSE 100 companies during the period 2001–2005, Haslam, Ryan, Kulich, Trojanowski, and Atkins, (2010) conclude that companies with male-only boards achieve higher valuation than those with a woman on their board due to the perception that poorly performing women may lead to a firm’s negative valuation. Furthermore, despite the positive initiative for Norwegian public companies to include women on boards, a recent study found that such firms had a decrease in profitability (Matsa & Miller, 2011) and value (Ahern & Dittmar, 2011).Adams and Ferreira (2009) find some evidence of a negative relation between gender diversity and company performance, measured as both the ratio of the

firm’s market-to-book value (as a proxy for Tobin’s Q) and ROA.

Despite numerous studies on gender issues and corporate performance (Dobbin & Jung, 2011), the real effects of women directors on corporate governance are still not clearly understood. The corporate governance literature suggests the benefits of board diversity, but relevant studies remain inconclusive on whether increased gender diversity results in improved performance. As Adams and Ferreira (2009,) assert: ‘‘The literature on diversity also has ambiguous predictions for the effect of diversity on performance.” Although various studies are conducted to analyse the impact of gender diversity on company performance but results are contradictory as in some research finds a positive impact, others at the same time found negative or neutral impact but the recent credible studies found that gender diversity leads improved company performance. And also as per section 149(1) of Indian Companies Act, 2013 every company must have at least one woman director in its Company Board. Gender diversity in Asian boardrooms is among the lowest in the world. These are the results of a new study by Deloitte, which shows that women represent 7.8% of board directors in Asia, higher only than Latin and South America at 7.2%. Europe had the most diverse boardrooms at 22.6%. India made the biggest improvement in boardroom diversity in Asia (Retrieved from http://www.business-standard.com/article/international/asia-s-b o a r d r o o m s - s t i l l - d o m i n a t e d - b y - m e n -117061400103_1.html).

Scope for Further Research

There is a rich body of research in the area of gender diversity and financial performance, inclusion, however, has emerged as a fairly recent area of exploration. Inclusion of female directors on the board has varied meanings and interpretations of the terms. There is a need to examine not only the diversity but inclusion to offer a deeper understanding of the impact of


67

diversity and inclusion of the women on the corporate boards. Also, further research in this area can also be done in measuring the impact of gender diversity on directors’ compensation by clearly identifying the determinants of director’s compensation structure. There is also a need to evaluate that whether there exists a gender pay gap for directors in the companies.

Conclusion

Diversity should be in culture of the company so that it looks natural and not just as imposed upon as it is clear that, boards perform better when they include the best people with a diverse range of perspectives and approaches, and where individuals feel included. Promoting gender diversity will enhance the monitoring vigil of the board and company as a whole thereby sending a positive cue to the society about being ethical nature of the Organisation. However, the potential impact of gender diversity on the financial performance of companies can only be ascertained in long run or with greater representation of women on the corporate boards.

Gender diversity is becoming one of the important issues in corporate governance literature. The introduction of legislative mandate is a welcoming step but much lies in its actual implementation. Matters such as diversity must extend beyond regulation and must permeate into the culture and genetic code of the organizations. It must be accepted in spirit and not just as a matter of compliance for tick box mechanism for mere tokenism. Mere fulfilling the criteria will not serve the purpose and also there is need to bring more competent women on boards otherwise it will be difficult to analyze the real impact on the financial performance.

References

• Abdullah, S. N., Ismail, K. N. I. K., & Nachum, L. (2016). Does having women on

boards create value? The impact of societal perceptions and corporate governance in emerging markets. Strategic Management Journal, 37(3), 466-476.

• Adams, R., & Ferreira, D. (2009). Women in the boardroom and their impact on governance and performance. Journal of Financial Economics, 94(2), 291–309.

• Bart, C., & McQueen, G. (2013). Why Women Make Better Directors. International Journal of Business Governance and Ethics, 8 (1), 93-99.

• Carter, D. A., Simskins, B. J., & Simpson, W. G. (2003). Corporate Governance, Board Diversity and Firm Performance. Financial Review. 35, 371-390

• Carter, D. A., Simskins, B. J., & Simpson, W. G. (2007). The Gender and Ethnic Diversity of US Boards and Board Committees and Firm Financial Performance. Corporate Governance: An InternationalReview.

• Christiansen, L., Lin, H., Pereira, J., Topalova, P. B., & Turk, R. (2016). Gender diversity in senior positions and firm performance: Evidence from Europe.

• Do gender differences persist? An examination of gender diversity on firm per formance , r i sk , and execut ive compensation (2015). Journal of Business Research.

• Doldor, E., Vinnicombe, S., Gaughan, M., Sealy, R., 2012. Gender Diversity on Boards: The Appointment Process and the Role of Executive Search Firms. Equality and Human Rights Commission.

• Dutta, P., & Bose, S. (2006). Gender Diversity in the Boardroom and Financial Performance of Commercial Banks: Evidence from Bangladesh. The Cost and Management. 34(6), 70-74.

• Erhardt, N. L., Werbel, J. D., & Shrader, C. B. (2003), Board of Director Diversity and Firm F inanc ia l Per formance . Corporate Governance: An International Review, 11, 102-111.

• Gallego-Álvarez, I., García-Sánchez, I. M., & Rodríguez-Dominguez, L. (2010). The


68

influence of gender diversity on corporate performance. Revista de contabilidad, 13(1), 53-88.

• Gregory Smith, I., Main, B. G., & O'Reilly, C. A. (2014). Appointments, pay and performance in UK boardrooms by gender. The Economic Journal, 124(574).

• Julizaerma M.K., & Zulkarnain Mohamad Sori. (2012). Gender Diversity in the Boardroom and Firm Performance of Malaysian Public Listed Companies. International Congress on Interdisciplinary Business and Social Science

• Kreitz, P.A. (2008). Best practices for managing organizational diversity. Journal ofAcademic Librarianship, 34, 101–120.

• Larelle Chapple, J. E. (2013). Does Board Gender Diversity Have a Financial Impact? E v i d e n c e U s i n g S t o c k P o r t f o l i o Performance. Journal of business Ethics, 709-723.

• Low, D. C., Roberts, H., & R. H. (2015). Board gender diversity and firm performance: Empirical evidence from Hong Kong, South Korea.,Pacific-Basin Finance Journal.

• Manescu, C., 2011. Stock returns in relation to environmental, social and governance performance: mispricing or compensation for risk?

• Marimuthu, M., Kolandaisamy, I., 2009. Ethnic and gender diversity in boards of directors and their relevance to financial performance ofMalaysian companies. J. Sustain. Dev. 2, 139–148.

• Matsa, D. A., & Miller, A. R. (2011). Chipping Away at the Glass Ceiling. Gender Spillovers in Corporate Leadership. (Working paper WR-842). Retrieved from RAND Labor and Populat ion. Working Paper Series websitehttp://www.rand.org/

• Mínguez-Vera, A., & Martin, A. (2011). Gender and management on Spanish SMEs: an empirical analysis. The International Journal of Human Resource Management, 22(14), 2852-2873.

• Muhiudeen, S. (2010, November 20). Board of Men: Governance Matters. The Star. Retrieved November 22, 2010 from http://biz.thestar.com.my/

• Niederle, M., & Vesterlund, L. (2007). Do Women Shy away from Competition? Do Men Compete too much? Quarterly Journal of Economics, 122(3), 1067-1101.

• Sarkar, J., & Selarka, E. (2015). Women on board and performance of family firms: Evidence from India. Retrieved from http://www.igidr.ac.in/pdf/publication/WP-2015- 026.pdf

• Siantar, C. S. D. Effects of Board Gender Diversity on Firm Performance and Director Compensation in India.

• Torchia, M., Calabrò, A., and Huse, M. (2011). Women Directors on Corporate Boards: From Tokenism to Critical Mass. Journal of Business Ethics, 102 (2), 299-317.

• Yi, A., 2012. The Diversity Scorecard: Measuring Board Composition in Asia Pacific. Korn/Ferry Institute.


69

Appendix

Global Mandates Summary

Source: Women on Boards- MSCI-November-2015


E-entrepreneurship is gaining momentum in the business world. In recent years ecommerce sector has been

flooded with huge funds and aspiration for prospective growth in near future. This has brought attention of

investors on education sector as well. The much needed government initiative to digitize India and the

increasing progress that is being experienced in the Information and Communication Technology sector have

brought about a lot of changes in almost all facets of life. Today, classrooms are not just confined to chalk and

duster but are growing along with advancement in ICT and turning into smart classrooms. E-learning has

become the next lucrative market for start-ups which is on the onset of effusive growth. A comparative study on

business in India and USA gives the holistic understanding about how business in India can harness on

untapped market efficiently to generate higher returns as expected in the presence of challenges.

Keywords: E-entrepreneurship, ICT, Opportunities, Challenges, Comparative Study

Abstract

Introduction

Today, learning is not just confined to old classroom lectures. Thanks to new start-ups, higher internet and mobile phone penetration, the online learning market is growing manifolds in India. Indian is counted amongst providing one of the largest education systems network in the world, with more than 1 million schools and 36000higher education institutions. This accounts to more than half of the country’s population falls in the target market for education sector.

Young, innovative, aspirant and futuristic are often defined as the ecosystem of Start-ups. India, which is known as the youngest country in the

world, has become the fourth largest base of technology start-ups in the world. There has been a significant upsurge in creation of new star-ups due to evolving Indian Technology Start-ups landscape and this number is expected to cross 11,500 start-ups by the end of 2020. This turns-out to be hyper growth inflections point for the Indian startup ecosystem. Flooding Indian markets with huge capital and opportunities that brings only Riches to Indian business. This paper discusses in detail the emergence of e-entrepreneurship in Education industry.

In the first section of the paper we will give a detailed view on education and digital start up sector, which at the brink of massive growth

70

E-entrepreneurship in Indian Education Sector –‘The Next Big Thing’ Comparative Study onBusiness in India and USA

*Assistant Professor, DCAC, Delhi University, E-mail Id – [email protected]

Akanksha Garg*

1. E-entrepreneurship will be interchangeably used as e-start-up or e-business or e-biz in this research paper.2. http://www.ibef.org/industry/education-sector-india.aspx

71

E-entrepreneurship in Indian Education Sector – ‘The Next Big Thing’

Comparative Study on Business in India and USA

explosion due to evolving technological and infrastructure base in India. Followed by the Opportunities available, to be harnessed by start-ups in the second section. The third section of the paper covers the Issues and challenges faced in e-education industry that describes how the start ups in India can overcome with competition and other hindrances. Fourth section will discuss the comparative study on India and US e-business in online education industry and finally will give the outlook on growth prospects. The paper is then summarized as under conclusion with necessary recommendations based on the research.

Objective of the Paper

1. T o h i g h l i g h t t h e e m e r g i n g e -entrepreneurship trends in education sector

2. To study available opportunities and challenges to entrepreneurs.

3. To study the comparative view on India and USA e-business.


The source of the information in this research paper is the secondary data. The information has been extensively collected from internet and various other reports to complete this research paper. All the available print as well as online Journals, Articles, papers, corporate reports provided necessary information to finalize the research study.

Education Sector in India

Indian education holds an important place in the global education industry. The country has more than 1.4 million schools with over 227 million students enrolled and more than 36,000 higher education institutes. Being one of the largest

higher education systems in the world, there is a lot more potential for further development in the Indian education system.

The online education market size in India is expected to touch US$ 40 billion by 2017. An Ambient Insight report titled – The Worldwide Market for Self-paced e-learning products and services: Forecast and Analysis ‘expects the e-learning market in India to grow at a compound annual growth rate (CAGR) of around 55percent during 2013-14 to 2017-18.’(Refer Figure 1) This is projected to be the highest growing rate in e-learning market in the world. Moreover, government aims to raise expenditure in education sector to boost the current enrollment ratio to 30 per cent by 2020. This will also boost the growth of the online education in India.

India has population of over 1.2 billion, with a median age of 25years about half of the population of India falls under the target market of education sector. According to Census figures, over 32percent of population is between the age group 0-14. This makes the size of primary and secondary market in India alone exceeds USA’s entire Population which estimated at 320million by Worldometers. According to a PWC report on India- Higher Education Sector –‘presently about11 million students are in the Higher Education system. This represents just 11% of the of the 17-23 year old population. The government hopes to increase this to at least 21% by 2017- a target which still falls short of the world average.’ (Figure 2 depicts the expected CAGR of E-learning in 2012-2017). India has evolved as a knowledge-based economy and human capital is the major strength. This has put severe inadequacies of India’s infrastructure for delivery of education under reform, particularly higher and vocational education.

From April 2000 to June 2015, the total amount of foreign direct investments (FDI) inflow into the

3. http://www.ibef.org/industry/education-sector-india.aspx


72

education sector in India stood at US$ 1,171.10 million, according to a data released by Department of Industrial Policy and Promotion (DIPP).

Some of the ma jor inves tments and developments in the recent past in Indian education sector are:

Ø The two Hyderabad-based education start-ups- Ignis Careers and SEED; working in the low-cost school education venture were funded with US$ 250,000 and US$ 650,000 respectively by a Venture capital fund Acumen.

Ø India Educational Investment Fund (IEIF), an investment fund focused on the educational sector funded by Dell Foundation, made its first two investments in education-based startups: Report Bee and Guru G.

Ø Anuna Education partnering with National Skills Development Corporation (NSDC) has announced the eEntrepreneurship Program in collaboration with eBay India. Anuna Education will train entrepreneur to sell their products on eBay globally in collaboration with eBay India along with a practical training on how to sell the products to global buyers.

Ø The Central Government came up with National Policy for Skill Development and Entrepreneurship in 2015, which is India’s first integrated program to develop skill and promote entrepreneurship simultaneously. This programme was inaugurated to skill the Indian youth rapidly with high standards a n d a t t h e s a m e t i m e p r o m o t e s entrepreneurship. Thus, creating host of employment opportunities in India.

Ø The launch of digital employment exchange by GOI will enable industrial entrepreneurs

and job seekers a direct interface for employment.

Ø In 12th Five Year Plan (2012-2017), GOI projected an expenditure of USD 37.13 billion to achieve the proposed objectives.

The allocation of funds by government to meet their targets of 30% Gross Enrollment Ratio (GER) by 2020 is inadequate that leaves enough scope for private participation. In collaboration with IIT’s and IIM’s the Government of India has allocated educational grants for research scholars in most government institutions. Furthermore online education at its up springing will bring major developments in the higher education sector in India.

Digital Start-up Sector

Start-ups play significant role in the growth, development and industrialization of many economies the world over. Globally, there are more in number technology based start-up companies registration than non-hightech companies due to effusive advancement in knowledge and technology. The rate of innovation and obsolescence of technology goes in tandem, the faster is the generation the more rapid is the mortality of start-ups. It is important to formulate appropriate strategies for long term survival of start-ups. E-commerce comes second only after IT services which benefits from ICT sector. (Refer Figure 3 )

The Indian middleclass is becoming a voracious consumer of digital solutions. E-commerce, marketplaces and mobile apps are increasingly driving people online. Many start-ups are incorporating emerging technologies in their solutions and building global digital solutions from India. Start-up funding is maturing significantly in deal value and in diversity of focus areas, and start-ups today have access to multiple sources of funding.

4. Nasscom report – Tech start-ups in India – A Bright Future5. Nasscom report – Tech start-ups in India – A Bright Future

73

India currently boasts of over 3,100 start-ups with an addition of 800+ new start-ups in 2014 alone. If the landscape continues to evolve at this pace then by 2020 more than 11,500 start-ups would get established in India, generating employment opportunities for over 250,000 people.

Large domestic market, huge amount of capitals flooding in the sector, whitespace opportunities and increased mergers and acquisition activity are picking up the start-ups growth. Indian startups witnesses growing whitespace opportunities like smart hardware, data analytics, cloud computing etc. In this Era, Digital star-ups in India is just not limited to retail sector but expanding its grasp to healthcare, agriculture and Education sector as well.

Expansion and growth are key priorities for start-ups. Start-ups hire top-notch talent from the industry to enhance their prospects for growth. Start-ups are infusing funds from multiple sources like VC/PE, angel investors, banks and financial institutions as well as incubators. Flipkart an e-tailing start-up has risen close to USD 3 billion in 2014.

The innovation imperative is leading to a rise in collaboration and partnerships due to which the Merger and Acquisition (M&A) activity is on the rise in India. While continued flow of funds and better growth prospects, there is constant need to nurture this ecosystem. A revival in government policies are the need. While the new government has come up with new programmes, policies and initiatives, there implementation on the directed efforts is the necessity.

Future of products – devices at the edge, logic at the core, fusion of IOT, SaaS, mobile solutions, and data analytics are leapfrog opportunities for India.

E-Entrepreneurship in Education sector

Indian Education Industry is transforming gradually from conventional brick-and-mortar to digital education trends. For past 5 years, innovation is the mantra common amongst the start-ups succeeding in the education sector. India’s online education is set to grow to $40billion by 2017, which is just double the size of current market. The key factors leading to growth of E-learning market in India include low education coverage, rising demand from various segments, government participation and growing internet penetration. This is coupled with demand from corporate sector for employee training and learning is also the key drivers for growth in e-learning market. According to Ambient Insight Asia is expected to outgrow in E-learning sector from rest of the world.(Refer Figure 4)

Young India is technology driven and e-learning market harvest on such trends. Young professionals who are driven to enrich their knowledge to adapt changing business environment are seeking self-paced Online learning that supports Live Virtual Classrooms (LVC).The evolution of technologies such as the Cloud, Data Centers & Virtualization, and the digital education ecosystem is evolving to grow rapidly. The growing affinity by Indian youth for new technologies and products such as tablets, notebooks, LMS and IWB, educational institutes, and schools has integrated technology into education industry. Even at the elementary education level –the K-12 segment are embracing ‘self-learning’ teaching models that serves as a notable communication bridge between students and teachers.

The following are the e-start-ups in India in education sector:

6. Nasscom report – Tech start-ups in India – A Bright Future




74

Eckovation

It’s a mobile-based social learning platform that aims at bridging the communication amongst teacher student and parents across metros, Tier II and III cities. It was co-founded by two Indian Institute of Technology (IIT)-Delhi graduates Ritesh Singh and Akshat Goel in 2014. The application allows users to create extensions and expand network quickly. According to Inc42 magazine, Eckovation was one of the top-five start-ups in North India in 2014.

Flygrade

This seamless solution provides a platform to children enrolled in CBSE or ICSE board to practice mathematics together with parents. It attempts to make learning maths as fun by providing learning through interactive games along with prizes for clearing various stages.

Seasame Workshop in India

It’s a non-profit educational organization for children under the age of eight. ‘Galli Galli Sim Sim’, a television programme, is a multi-platform initiative by SWI which entertain children with lessons.

UEducation

The company was started in 2015 by Ronnie Screwvala and his partners with an aim to provide content solution through innovation and technology. The curriculum course content are sourced firm both academicians and industries. UEducation is expected to provide online coursed co-branded with Universities whose curriculum will be crafted by the respective faculties.

Opportunities in E-learning Market

Asia has the world’s highest regional growth rate for E-Learning, of 17.3%.Focusing specifically on the Indian Market, the E-Learning industry in India was valued at INR 18.41 trillion in 2010/2011.Increasing Internet penetration, low-cost existing coverage and rising demand are expected to help this market develop strongly in the near future. The Ken Research Group report, ‘India’s E-Learning Market Outlook to FY2018 – Increasing Technology Adoption to Drive Future Growth’, estimates that the market should grow at a Compound Annual Growth Rate (CAGR) of 17.4% over the period FY2013 to FY2018. (Refer figure 4)The key drivers for this market are:

Increasing Government initiatives to promote Entrepreneurship in India

• The much ambitious Startup India Movement will boost digital entrepreneurship at the grassroots level. The government is likely to invest Rs 10,000 crore for the initiative.According to start-up India movement the e-biz that are working towards innovation, development and commercialization of new products, process or services driven by technology or intellectual property are exempt for 3yrs Income-Tax, if incorporated between April 2016 and march 2019.

Start-ups will have no labour law inspection for the first 3 years and can easily get Self-certification via compliance app with 0 labour and environmental laws. Government also provides a mobile app for start-up registration in one day without going through the hassles of delayed licensing procedure.

7. A report by Docebo, March 2014 – E-learning Market trends and Forecast 2014-2016 Report

75

Government has earmarked another 2000crores to enhance institutional credit structure that reach out to under-served sector like SC/ST and women entrepreneurs. These will be secured loans backed by credit guarantee schemes wherein department of Financial Services would be the settler and National Credit Guarantee Trustee Company Ltd. (NCGTC) would be the operating agency. ‘Transparent tax regime, easier registration norms and simple exit policy will be provided to give a boost to start-ups,’ commented by Commerce and Industry Minister Nirmala Sitharaman.

• Ministry of Finance under Public Private Partnership (PPP) with The National Skill Development Corporation of India (NSDC) signed a Memorandum of Understanding (MOU) with Centre for research & Industrial Staff Performance (CRISP) to strengthen skill development in India.

• Another (MoU) has been signed between Foundation for Innovation and Technology Transfer (FITT) and Security Printing and Minting Corporation of India Ltd (SPMCIL). Envisioning to foster collaboration on research, training and professional development and exchange of technical expertise in areas like; material sciences and testing capabilities.

• MHRD in collaboration with US department of State will soon be coming up with a programme – Study Webs of Active Learning for Young Aspiring Minds (SWAYAM), for online education in the field of higher education. The SWAYAM platform will offer PG course programmes with certification from US universities. This initiative will be offered using edX, which partners with IIT-bombay, IIM-bangalore and BITS Pilani.

The growing adoption of technology

A report released by Statistia, the Indian Information and Communication Technology (ICT) industry contributed to about 9.5% of the national Gross Domestic Product (GDP), which is about six times its contribution in 2000.The Internet economy alone is expected to reach US$ 161 billion by 2018, accounting for around 5% of the national Gross Domestic Product (GDP). A large part of this is attributed to India’s demographic situation. Overall, the Indian ICT industry registered a double-digit growth and clocked aggregate revenue of US$ 130billion in the year 2014. India is experiencing boom in smartphone usage according to Swissnex. (Refer Figure 5)

• Cloud computingIn a survey done by Information Week, 81% of organizations expect cloud services are effective means to compete. Not only education, Healthcare sector are increasingly deploying management solutions to efficiently run business processes. Within Cloud solutions, the Software as a Service (SaaS) model is also playing a significant role in increasing the size of the E-Learning market. Start-ups, Small and Medium-sized Enterprises (SMEs), as well as large Corporations are adopting SaaS LMS as key priority. In particular, large Corporations are using SaaS LMS for special training purposes.

• Telecom and MobilityAccording to independent regulatory body Telecom Regulatory Authority of India TRAI, India has 930 million mobile phone connections. Low handset prices are paving the way for India to become one of the fastest growing smartphone markets in the world: India will have more than 200 million smartphones by 2016. (Refure Figure 5)

8. Swissnex India Consulate general of Switzerland report titled- India’s Booming digital Industry.




76

By 2017, mobile data traffic in India is expected to reach a whopping 900 peta bytes per month, up from 15petabytes per month in 2012 (projected by Cisco’s Visual Networking Index). Figure 10 depicts list of next Top buyers on mobile phones in the world.

• IT Security

PwC estimates that the average Indian firm spends around $4 million on cyber security. The overall increase in enterprises investment in cyber security is due to the demanding factors such as:

ü Hacker targeted attacks in the political arenaü Financially motivated cyber attacksü Increase in security incidents in recent yearsWith the advent of Internet of Things (IoT), there is an ever-increasing concern for security due to large chunks of data being stored, transferred and analyzed.

Incubators-The supportive system

Incubators and accelerators play a pivotal role in nourishing the small business. At the outset, they provide assistance by screening and rectifying the business plan and make it more appealing to the investor community. They utilize their network and help the business to get recognized among their business community. They also help the start-ups with marketing assistance, accounting activities; provide access to loans, strategic partnership with angel investors or VCs, Intellectual Property management and mentoring.

Incubators and investors play an important role in seeding the e-start-ups in innovation. In absences of this support system the e-biz will face harsh phase to strive forward.

Limited access to quality education

Despite India being one of the largest education network providers, the access to quality education is limited. The e-biz have unlimited opportunity to bridge this gap via e-learning module in collaboration with the universities and colleges. E-biz will also enable higher enrollment of students without worrying about the capacity.

Convenience and affordability factors

Due to the changing lifestyle professional and students wants the convenience of learning anywhere, anytime. The rapid adoption of mobile technology has played a major role the way entire digital experience is valued and consumed. The increasing sales numbers suggest that the growth of smartphones in India allows people greater access to the Internet via mobile devices rather than computers. This is an education portal that people can take with them wherever they go.

India’s Demographic situation

India’s Demographic structure is one of the main reason that experts prospects India to generate $40 billion revenue through e-biz. Over half of the population of India falls under the age group of 0-34years brackets which exceeds the entire population of USA. K-12 sector contributes 50percent of E-learning revenue market. (Refer Figure 6)

Corporate Training Market

The corporate-training market is among the most cyclical within the education industry. However, the corporate market related to outsourced services (net of all ancillary costs) has grown to reach 42% of total expenditure. Within the

9. http://trak.in/tags/business/2014/12/23/smartphone-users-india-global-growth-chart/10. Swissnex India Consulate general of Switzerland report titled- India’s Booming digital Industry.11. http://articles.economictimes.indiatimes.com/2014-10-20/news/55236829_1_security-professionals-information-security-survey-cyber-security

77

training industry, the E-Learning sector has grown consistently in recent years. All its subsectors (Packaged Content, Platform, and Authoring tools) show positive annual growth.

Elementary Education Sector

K-12 and post-secondary are major contributors of the educational market. A key characteristic is the large number of customer base in India. Importantly, users of K-12 and secondary market are prospective users of vocational training programs as well. Their involvement in E-Learning projects at the K-12 and post secondary stages will build a large base of users already accustomed to using such technologies in order to learn. (Refer Figure 2)

Issues and Challenges

Government and Private Sector quality education divide

K-12 education sees a large gap in government and private education sector. With privatization quality of education comes with investment of hefty sums as tuition fees. This gap is further widened due to socio-economic gaps between deprived and privilege section of the society. Indian education sector lacks in proper democratization of the system. These factors lead to consistent gap in quality of education between government and private sector.

Lack of awareness

E-start-ups in education sector see difficulties in selling their product or services due to lack of understanding and awareness about the use of new models of education. Most start-ups are based on ICT technology and this platform has not yet became a common trait in Indian schools and colleges.

Difficulty in Raising Funds

It’s evident that India is flooding with investments in e-commerce business but e-start-ups face tough phase to raise funds. Till now, investments in education sector have not yet reaped fruits for investors. From the investors’ view point, education as a sector has had a negative bias from the investment community driven by most of the investors having lost money in education sector over the last 3 years.

Range of Choices

The range of choice is actually a barrier in itself, because students are reluctant to invest a significant amount of time in learning how to use a new platform or tool. So students focus their efforts on the leaders, which make it even harder for innovative upstarts to gain market share.

Digital Divide

Digital divide means the differences between families that are equipped with internet service and those who have no connectivity of the internet. If classrooms are technology-enabled but have no technology at home, the kid will be at an educational disadvantage compared to peers who do have a home environment supportive of innovation and investment. Those of us who grow up with such privileges don’t realize the divide. If Technology is not accessible at home then technology in classroom isn’t worth much. This divide is even greater between urban and rural areas. (Refer figure 7)

Bandwidth and Infrastructure

Usage of E-learning tools requires bandwidth and proper infrastructure. In India the infrastructure is still underdeveloped this makes the speed of bandwidth vulnerable. Methods like

12. Swissnex India Consulate general of Switzerland report titled- India’s Booming digital Industry.13. http://www.franchiseindia.com/entrepreneur/article/features/start-up/After-eCommerce-healthcare-EdTech-to-emerge-as-the-next-sunrise-sector-623/




78

one to one initiatives, Bring Your Own Device, online assignments, and other initiatives that involve technology, becomes difficult to operate.

Community Support

Teachers think they are under constant pressure that technology in education will jeopardize their job. Universities and colleges also show little interest in changing their education model as it requires investment and they have least resources to adopt innovative models which are not yet prevalent in the market.

Changing Mindsets

One of the biggest challenges faced by the school or the educators is to keep focus of the students in the learning from the device rather than on the device. Technology experts must learn how to see different things from a teacher’s point of view and should work closely with educators.

Security

Though a lot of tech leaders believe in having easy open access of the digital tools in schools to all users, they need to create a balance as it is also essential to conform the legal necessities and keep students safe and secure, and protect their technologies from viruses, hackers, and breaches.

Obsolescence of Technology

Due to rapid advancement in technology world till the time e-entrepreneur establishes its share in the market, the technology gets outdated. This becomes huge cost for the entrepreneurs to adapt to new advancement.


Under this comparative study we will discuss what s imi lar i t i e s and d i f fe rences e -entrepreneurship in India and USA face in education sector. This study will give a comprehensive outlook over the strengths and weakness of e-learning business in Indian compared to USA.

Similarities

There are some parameters over which India and USA business share similar characteristics. These are:

Faster Understanding and Adoption of Technology

Due to huge population base and highest number of engineers in the country understanding of advancement in technological environment is easy. Massive number of usage of mobile phone by the teen age group also makes the early and faster adoption of technology in India.

In USA, kids are taught lessons based on e-learning model is schools and also at home. The understanding and adoption of technology is faster and uniform for all the age groups while in India the concentration is high in teen age group.

Well-Structured Syllabuses and Curriculum

Indian syllabuses and curriculum are well-crafted and structured that makes easier for e-biz to provide content packages, pre-recorded video on some topics and also live video classroom (LVC) sessions for students pursuing different but similar stream courses.

14. A report by Docebo, March 2014 – E-learning Market trends and Forecast 2014-2016 Report15. A report by Docebo, March 2014 – E-learning Market trends and Forecast 2014-2016 Report

79

USA has world’s best education system. Learning Management System (LMS), LVC and online content are part of curriculum, teaching and assessment methodology. It becomes easier for e-biz in USA to collaborate with universities and disseminate quality education more efficiently.

Qualified Teachers

India is the host of qualified and popular teachers and professors who are known worldwide. E-biz are tie-up with the professors form renowned colleges and universities to impart lessons online. This makes easier for the customer base get access to same level of education; those were unable to get admission.

Similarly in USA e-learning is very much prevalent but at much higher responsiveness than India.

Number of Investors

Due to higher prospects for growth in India the funds are flowing in the country from all over the world. Though less but many Indian investors are now heavily investing in e-biz and education industry.

USA is the hub of Investors. It’s far easier to get access to funding in USA than in India. Normally for bigger investments Indian e-entrepreneurs flock to USA for funding.

Difference

Despite of above mentioned similarities e-biz in Indian and USA face different opportunities and challenges in e-education sector. These are:

Flexible education system

In US the education system is quite flexible. The adoption of e-learning models is easier as most of the elementary level education is imparted through technology based learning mechanism.

While in India, there is a rigid education system. Majority of schools and universities follow traditional model of education devoid of technology. This makes difficult for e-biz to establish its market in education sector at faster pace.

Infrastructure developments

USA has better infrastructure that enable wide span market easily and effectively. E-biz in USA does not have to face the brunt of delays and limitation to access due infrastructure inefficiencies.

In India, the infrastructure is underdeveloped but is now on the road of faster development. E-entrepreneurs will face bottlenecks in providing uninterrupted LVC and pre-recorded Videos due to low bandwidth and network issues. While the infrastructure is well developed in USA, e-biz does not face such elementary challenges.

Access to Technology

Around 87% of the USA population has internet penetration. This makes much easier for USA e-biz in accessing wider span of customer base.

India is still at its growing stage in term of access to technology. There is merely 19percent of Indian population have access to internet. (Refer Figure 8) Although on absolute numbers India exceeds USA coverage of customer base but India also loses a major share of customer base which is inaccessible due to infrastructure anomalies.

16. http://www.franchiseindia.com/entrepreneur/article/features/start-up/After-eCommerce-healthcare-EdTech-to-emerge-as-the-next-sunrise-sector-623/17. http://edtechreview.in/trends-insights/insights/1230-what-educational-technology-challenges-do-schools-face




80

Demographics factor

USA bears a brunt on the size of the market. Due to expected rising older population in USA, the scope for growth is limited. E-biz will seek tougher competition on yearly basis due smaller market size.

While India has the huge base of young population, makes it to be the most lucrative sector in the world. There are greater and growing opportunities for e-start-ups in education sector to flourish.

Growth prospects

Growth prospects in USA are very limited. USA is already at its mature stage in e-learning business. With decline young generation makes the market narrower for e-biz to survive. The e-biz is expected to grow but at a slower growth rate.

India that enjoys huge base of young population and prospects for development in infrastructure makes the growth prospects very high. The market is so wider for the e-start-ups in India and this makes the chances of innovation in technology to access untapped market also rises.

Government Expenditure

USA Government spent 6.9percent of the GDP in education sector. In real terms USA’s GDP is highest in world of which they invest almost 7percent of their GDP in the growth of education sector. This enables the e-biz in education sector to easily raise funds and access the market.

While in India it’s merely 3.85percent of GDP, this alone is invested by USA in elementary and secondary education sector. (Refer Figure 9) In real terms of GDP this amount comes to even lesser as India stand 7th in front of the world’s

largest economy. This low level of expenditure from government makes difficult for e-biz in education sector to grow at faster pace.

Revenue Generation

USA generates huge revenue from education sector. It’s the hub for foreign education in almost each field of knowledge. Education is expensive in USA which makes e-biz to come up with innovative models and technology that can be easily adopted at desired cost and revenue.

In India revenue generation is much lesser in comparison. In higher education public universities are very slow to adopt e-learning model while private sector universities and colleges are not very popular for education like those are in USA. Another challenge e-biz face in generating revenue is the mindset of investors. They see investment as cost if returns are not generated in short-term span of 3-5 yrs. Education sector is slow paced and requires long-term perspective to generate constant and higher revenues.

Conclusion and Recommendations

E-Learning is subjected to the influences of sales trends related to smart connected devices and the Internet megatrend (that is, the spread of the Internet in the world).According to IDC, the number of PCs will fall from 28.7% of the device market in 2013 to 13% in 2017. Tablets will increase from 11.8% in 2013 to 16.5% by 2017, and smartphones will increase from 59.5% to 70.5%. E-biz in India have host of opportunities to prosper in education sector given such a rapid pace of advancement in technology and its adoption. The growing initiatives taken by Indian government to make Digital India has opened growth opportunities in e-learning sector for start ups and large companies as well.

18. http://edtechreview.in/trends-insights/insights/1230-what-educational-technology-challenges-do-schools-face19. http://edtechreview.in/trends-insights/insights/1230-what-educational-technology-challenges-do-schools-face

81

It’s evident that with opportunities come challenges like infrastructure lacunae, limited technology coverage area, digital divide issues and cyber security, which pose higher hurdles for e-entrepreneurs in education industry to meet the expected growth.

Thus it’s recommended that -• E-biz in India needs to use holistic view in

designing their sales models that enables them to compete with traditional education model.

• Adoption of Mobile Learning model will give greater access to customer base to E-biz in India, which is expected to grow globally at around 18.2 percent on annually aggregate basis. Growth at such a pace will make India one of the top buyers of Mobile Learning product and services in the world.

• Early adoption of SaaS will also keep the E-biz industry in pace with competition and in tandem with ever changing environment of technology environment.

• Demographical situation in India make wider market for e-biz only if they use more user friendly e-learning model that are easy to operate in presence of infrastructural inadequacies.

• E-entrepreneurs in education sector have to enable universities and colleges to adopt e-leaning model faster so as to generate profits. As faster generation of revenue can only keep the interest of investors intact.

Growth is evident but how fast and adequately the e-entrepreneurs in India can tap the market will decide how beneficial this market ought to be. Comparative study between USA and Indian business highlights the standards Indian e-biz need to follow to make its mark in global market.

Bibliography

1. http://ictpost.com/e-learning-market-in-india-rearing-to-grow/

2. http://www.ibef.org/industry/education-sector-india.aspx

3. Nasscom report – Tech start-ups in India – A Bright Future

4. h t t p : / / w w w . f r a n c h i s e i n d i a . c o m / entrepreneur/article/features/start-up/After-eCommerce-healthcare-EdTech-to-emerge-as-the-next-sunrise-sector-623/

5. h t t p : / / w w w . b u s i n e s s - s t a n d a r d . c o m / article/management/online-education-gains-traction-114100200299_1.html

6. http://www.indianweb2.com/2015/08/ 10/how-technology-trends-impacting-the-education-industry-in-india-770/

7. h t t p : / / w w w . b u s i n e s s - s t a n d a r d . c o m / article/companies/some-start-ups-that-are-c h a n g i n g - e d u c a t i o n - a s - w e - k n o w - i t -115090700467_1.html


9. http://indianexpress.com/article/india/ india-news-india/pm-modi-to-unveil-startup-india-movement/

10. Swissnex India Consulate general of Switzerland report titled- India’s Booming digital Industry

11. http://trak.in/tags/business/2014/12 /23 /smartphone-users-india-global-growth-chart/

12. http://articles.economictimes.indiatimes. com/2014-10-20/news/55236829_1_ security-professionals-information-security-survey-cyber-security

13. h t tp : / / ed techrev i ew. in / t r ends- ins ights /insights/1230-what-educational-technology-challenges-do-schools-face





82

Annexure

FIGURE 1

83

FIGURE 2




84

FIGURE 3

FIGURE 4

85

FIGURE 5

FIGURE 6




86

FIGURE 7

FIGURE 8

87

FIGURE 9

FIGURE 10



GUIDELINES FOR AUTHORS

1. Contributions should not exceed 5000 words exclusive of charts, tables & other graphics.

2. The research papers should be preceded by an Abstract, not exceeding 150 words.

3. Tables and charts should be in black & white only. They should be serially numbered,

sequentially, following references to them in the text and presented on separate sheets.

4. Two good prints of the article, in A-4 size stationary are required to be submitted.

Material should be formatted in Times New-Roman, font size 12, font style normal. The

main headings should be in upper case with font size 14 and sub headings should be

formatted in l/u case with font size 13. The manuscript should be clearly typed in double

space with 1 and 1/2" wide margin on the left and 1/2" on the right. The authors may note

that the hard copy will be considered final and authentic.

Additionally, the material should be sent either as an e-mail attachment or on a CD

formatted in Word for Windows.

5. Introduction and Conclusion must be added. It should be brief and state the relation to

the present status of knowledge in the field.

6. All the articles should be duly signed at the end.

7. Citation in the text should simply give the name of the author and the year of publication

quoted. For example :

Agarwal (1970)

8. References should be given separately at the end of the paper and arranged

alphabetically. The list should include only work the author/s has cited. References

should include full details of the name(s) of the author(s), title of the article or book, name

of the journal, details of the publishers, year & month of publication including page

numbers, as appropriate. The following style should be strictly followed:

For periodicals :

The author/s name, year of publication, title of the article, journal name, volume and issue

number and the page numbers of the article should be provided. For example :

Mishra, K.M, 2002 Role of IT in business management. Indian J. of Commerce, 18 (2) : 56-57

For books :

Award, E.M. 2003 Knowledge Management, New Delhi : Pearson Education

Srivastava, P.K. and Ray, A.R. (Eds.) 2001 Financial Management. New Delhi, McGraw Hill

For chapters in books :

Mathur, J.P. 2005 Organizational Learning. In Bansal, A.K. and R.S. Yadav (Eds.),

Organizational Behaviour. New Delhi, Excell Publications.

If an article has no author, the periodical or newspaper is referenced as follows :

The Hindustan Times 2008 RIL finds new gas basin, November 27 : 2010

For unpublished works such as working papers, dissertations and papers presented at

meetings, seminars, conferences etc. :

Tyagi, R.M, and Malik, S.P 2007 Job Satisfaction Working Paper No 46, Indian Institute of

Travel Management, Gwalior

Thakur, Reema, 2001 Effectiveness of different leadership styles on job satisfaction of factory

workers. Unpublished doctoral dissertation. Jawaher Lal Nehru University, New Delhi

Shishodia, B.K. and Rawat, KM 2007 Emerging issues in brand management. Paper presented

at the National Seminar on Rural Marketing held at IIM, Indore on September 7-9.

For electronic documents :

Give the author’s name, if known and year of publication; or give the periodical/newspaper’s

name or the organization’s name as author. This should be followed by the full title of the

document; the http, or other addresses; and the date the document was posted or accessed.

Gupta, K; 2009 Knowledge Management, Asia Times March 17.

http: // www.atimes.com/atimes/South_Asia/FE28Dfo3.html

Accessed on August 22, 2009.

Financial Express. Kingfisher: rated the best airline.

http: //www.expressinidia.com/fe/daily/19980129/02955144.html

Accessed on December 24, 2009.

The Manuscript should be accompanied by :

1. A cover page containing article title, author’s name & affiliation, mailing address, phone,

fax numbers and e-mail address.

2. A second page containing the title, abstract/summary (in about 150 words). In case of

multiple authors, the cover page should indicate the author to whom correspondence

should be addressed to.

3. A declaration that the paper is original and has not been submitted/published elsewhere

or presented.

4. Two passport size photographs should be sent with brief resume.

Note :- IPEM does not accept any responsibility for the views expressed in the articles by the

authors or for any inadvertent omissions. No part of the articles published in this JOURNAL

should be reproduced without written permission from the Editor.

FEEDBACK FORMYour valuable comments will help us to shape the future issues better.

Comments / Suggestions (if any) :

Name : Mr. / Ms.

Designation : Organization / Institution :

Address:

Phone : E-mail :

SUBSCRIPTION FORM

I wish to subscribe to / renew my subscription to "JOURNAL OF IPEM" for 1 / 2 / 3 year(s). A bank draft

/ cheque* bearing no..............................dated.......................for Rs. .....................drawn in favour of

INSTITUTE OF PROFESSIONAL EXCELLENCE & MANAGEMENT, payable at GHAZIABAD /

DELHI towards subscription for ..........years, is enclosed.

Name :......................................................................................................................

Org./ Inst.:..............................................................................................................

Address:..................................................................................................................

City:........................................................................................Pin:...........................

Phone:......................................................................................................................

Fax:...........................................................................................................................

Mobile:.....................................................................................................................

E-mail:......................................................................................................................

Category (1/2/3):...................................................................................................

Year:.........................................................................................................................

1 yr.

Indian (in Rs.)1. Institutions2. Individual3. IPEM Student / Alumni

Subscription RatesCategory 2 yr. 3 yr.

350250200

600425325

850550450

Signature with Date

Highly Appreciable

SomewhatAppreciable

NotAppreciable

Did Not Read

Role of Business Ethics Education in Shaping Student’s Ethical Attitudes

Entrepreneurship Development with Special Reference to Digital Venture

The Potential Impact of Internet of Things (IOT) in Financial

Services Industry: An Overview

Logistics & Supply Chain Management : A Preliminary Outlook

in Indian Context







Gender Diversity in the Boardroom and Company Financial Performance:

A Review of Research & Perspectives



The EditorTHE JOURNAL OF IPEMInstitute of Professional Excellence & ManagementA-13/1, S.S. G.T. Road,Industrial Area, NH-24 By PassGhaziabad-201010.Tel.: 0120-4174500

AffixPostalStamp

The EditorTHE JOURNAL OF IPEMInstitute of Professional Excellence & ManagementA-13/1, S.S. G.T. Road,Industrial Area, NH-24 By PassGhaziabad-201010.Tel.: 0120-4174500

AffixPostalStamp

We realize the importance of Soft Skills and Communication Skills in the current Business scenario. IPEM makes its students Industry ready through the listed programme which runs extensively all around the year. • Soft Skills Sessions• Personality Development Modules• Communication Lab Sessions to enhance the

Verbal Communication• Mock Interview Drills• Group Discussions• Aptitude Development Sessions• Online Technical Assistance• Mini Projects

Class Room Lectures using LCD and OHP System

Real Life Case Studies/Analysis

Group Discussions

Presentations

Assignments

Quizzes / Situational Exercises

Seminars & Workshops

Industrial Visits

Eminent Invited Speakers

Personality Development Programmes by Professional Experts

Teaching Pedagogy

Estd. 1996

G H A Z I A B A Dwhere your future comes first...

Our Pride Recruiters

A22 Years of

Academic Excellence

CATEGORYInstitution

Estd. 1996

G H A Z I A B A D

COURSES OFFERED

PGDM

M.Ed.

MBACollege Code : 114

MCA(Lateral Entry)

College Code : 114

LL.B.

BBACollege Code : 910

BCACollege Code : 910

College Code : 409

B.A., LL.B.College Code : 409

BTC

B.EdCollege Code : 910

(ISO 9001:2015 Certified, NAAC Accredited)

IPEM Salient Features

• Founded by an Academician with 55+ years of teaching & research experience.

• Excellent & Outstanding Results in all Courses and near 100% Placements during the past 19 years.

• Scholarships/ Concessions for Meritorious & Deserving Students.

• Teaching / Learning in Class/ Tutorial Rooms through Case Studies, Panel Discussions/ Analysis, Simulation Games, Role Plays & Presentations.

• Value Added Courses on Communication Skills through Language Lab, Personality / Self Development and Corporate Etiquettes.

• Strong Industry /Corporate Interface through Industrial Visits, Workshops/ Seminars & Guest / Invited Lectures.

• Regular Social, Cultural & Sports / Adventure/ Yoga Activities and Scouts & Guides/ Literacy / Legal Aid Camps.

• State-of–the-Art Infrastructure with LCD equipped Class/ Tutorial Rooms; Air-Conditioned Auditorium & Conference Rooms; Computer Labs & Language (Communication) Lab with latest Hard/Software besides many other Labs.

• Separate Boys & Girls Hostels, Medical Facility, Cafeteria & Stationary Shop within the Campus.

• Located at NH-24 Bypass (Near Vijay Nagar, Ghaziabad) adjoining East Delhi, NOIDA & Greater Noida (West) and well connected by all modes of public transport also.

About the InstituteIPEM made a modest beginning in the year 1996, with few Management and Computer Application Programmes. Today the IPEM Group of Institutions are in the forefront of imparting knowledge in the fields of Education, Law, Management and Information Technology. The Computer & IT Department was started in 1996 with Bachelor of Computer (BCA), affiliated to the Chaudhary Charan Singh University, Meerut with 120 seats. From 2001 the Dept. introduced the Master in Computer Application(MCA) with 60 seats. This journey of Computer & IT Dept. is going on successfully with excellence in both academics and administration. At Computer & IT Department students are exposed to emerging trends in the areas of Information Technology by value additions through Workshops, Live Projects and a regular interaction with Experts from Industry. This is reflected in the performance of the students as we have 100% result with maximum 1st division. We provide best placement to the students.

The Computer & IT Department is running two courses successfully: Master of Computer Application (MCA) is approved by all India Council for Technical Education (AICTE) and affiliated to Dr. A.P.J. Abdul Kalam Technical University (APJAKTU) Lucknow and Bachelor of Computer Application(BCA) is affiliated to the Chaudhary Charan Singh University, Meerut.

The other courses are running under IPEM group of Institution are Master of Business Administration (MBA) approved by all India Council for Technical Education (AICTE) and affiliated to Dr. A.P.J. Abdul Kalam Technical University (APJAKTU) Lucknow. The Post Graduate Diploma in Management (PGDM) is approved by All India Council of Technical Education (AICTE) Govt. of India, Ministry of HRD. The Bachelor of Business Administration (BBA), Bachelor of Law(LLB)(3 years) BALLB(5Years) approved by Bar Council of India and affiliated to the Chaudhary Charan Singh University, Meerut, Bachelor of Education (B.Ed.) and Basic Teacher Certificate (BTC) approved by National Council for Teacher Education (NCTE). Bachelor of Education (B.Ed.) is affiliated to the Chaudhary Charan Singh University, Meerut and Basic Teacher Certificate (BTC) is affiliated to the State Council of Educational Research and Training (SCERT) Lucknow.

The focus of IPEM has always been to be at the forefront of optimum utilization of IT resources and leverage the power of IT in making the learning process, informative and engaging. The students are provided with hands on experience and learning with the state-of-the-art technology.

The Computer & IT Department has enriched with well equipped labs in Aryabhatta Block i.e. Programming Lab for the specialization in Database, JAVA, .Net etc (Aryabhatta Lab-1),Internet Lab (Aryabhatta Lab-2) and for UNIX, LINUX, Android etc (Aryabhatta Lab-3). The Computer & IT Department of IPEM group of Institutions prepare the students who would be able to lead the future Industry and chase the world-wide mega trends. The Department has shined covered out for itself a commanding position with best results and placement.

The Communication Lab aims is to develop English Language Communication Skills. This gives a detail knowledge of Communication like English vowels, diphthongs & consonant phonetic sound, telephonic conversation. It also cultivate the habit of reading passages from computer monitor.

Students at IPEM Ghaziabad are privy to a unique Wi-Fi Campus. The Wi-Fi Campus enables the students to get on-line anywhere on campus without the hassle of wires and plug-ins. The Campus truly is the high tech face of the new-age IPEM.

Spacious Lecture Theatres are thoughtfully designed to induce high quality learning and are equipped with high end teaching aids such as LCD and OHP projectors. Priority is attached to achieve optimal convergence of stimulating pedagogy & enabling environment. The latest audio-visual aids and multimedia technology enables the Faculty members to have interactive sessions. Classroom learning is meant primarily for theoretical and conceptual input & consolidated by combining lectures with Case Methods and Group Discussions for group learning. Extensive use of laptops is made by students in the well networked class rooms.

issn 0974-8903 journal of ipem - ipem ghaziabad · pravanshi yadav & anuj sharma 10. gender...

Documents