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Vol. 4, No. 1, April 2009 September 2009

TECNIA INSTITUTE OF ADVANCED STUDIES

TECNIA Journal of Management Studies

Organizational Commitment of Information Technology Professionals:

Role of Transformational Leadership and Work-Related Beliefs

E-Services in Bank- Solution for Better Tomorrow

Validating Metrics on the basis of Object Oriented

A Simulation-Based Approach To Software Release And Support

Knowledge Management: Tools, Techniques and Technologies

Automatic Tuning of Oracle SGA Parameters An Overview

Measuring Return On Investment (ROI) In ERP Implementation

A Management Perspective

Book Review

Book Review

Priya Chandna and Venkat R. Krishnan

Dr. R.K. Uppal

Gurvinder Kaur and Vijay Singhal

Vikram Singh

Dr. K.P. Singh

Praveen Kumar Gupta and Hitesh Kumar Sharma

C. M. Maran

ISSN 0975 710Regn. No.: DELENG/2006/2058

(Approved by AICTE, Ministry of HRD, Govt. of India and affiliated to GGS Indraprastha University, Delhi)Institute is rated as Best Business School by Latest AIMA Business Standard Publication &

Business India survey and Rated amongst Top 100 B-Schools and IT Schools in India by Dalal Street Investor Journal

.


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TECNIA INSTITUTE OF ADVANCED STUDIES

A Centre of Excellence providing

professionally oriented quality education in

Management, Information Technology and Mass Communication.

To emerge as one of the world's leading institute through

continuing education to the highest academic standards, by developing strong

industry-academia bond and playing a pioneering role in research and development,

so as to serve society by way of shaping professionals to conquer the

present and future challenges to the socio-economic fabric of our society by

dissemination of relevant knowledge through structured learning system.

To build & nurture a new generation of well-rounded professionals who can

work as positive change agents in the new millennium by helping

the Indian industry attain and sustain global leadership. It will be our endeavour to

assimilate and disseminate practical strategies to future professionals and to encourage

their understanding of strategic perception to fulfill the mission of the organisation

in the fast changing global business environment and to make a significant contribution by

providing an opportunity to the deserving candidates of society to have world class professional

education and to inculcate among them the feeling of fraternity and patriotism

(Approved by AICTE, Ministry of HRD, Govt. of India and affiliated to GGS Indraprastha University, Delhi)Institute is rated as Best Business School by Latest AIMA Business Standard Publication &

Business India survey and Rated amongst Top 100 B-Schools and IT Schools in India by Dalal Street Investor Journal

The Vision

Mission


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Tecnia Journal of Management Studies

Vol. 4. No. 1, April 2009-September 2009

EDITORIAL ADVISORY BOARD

Prof. Christopher TurnerPro Vice-ChancellorThe University of WinchesterWest Hill, Winchester, U.K.

Prof. R.K. MittalProfessor & Dean, University School of ManagementStudiesGuru Gobind Singh Indraprastha University, Delhi

Prof. Devender K. BanwetProfessor, Department of Management StudiesIndian Institute of Technology, New Delhi.

Prof. G.R. KulkarniFormer Director,Indian Institute of Management, Ahmedabad.

Prof. K.K. UppalFormer Professor, University Business SchoolPunjab University, Chandigarh.

Prof. K.L. JoharFormer Vice Chancellor

Guru Jambheswar University, Hisar.

Prof. N.K. JainHead, Department of Management StudiesJamia Millia Islamia University, New Delhi.

Prof. M.P. GuptaFormer Dean, Faculty of Management StudiesUniversity of Delhi, Delhi.

Dr. Arun GoyalJournalist (WTO Expert)Director, Academy of Business Studies, Delhi.

Prof. P.N. GuptaFormer Executive Director,DOEACC Society, New Delhi

Published & Printed by Dr. Nirmal Singh, on Behalf of Tecnia Institute of Advanced Studies. Printed at RakmoPress Pvt. Ltd., C-59, Okhla Industrial Area, Phase-I, New Delhi-110020. Published from Tecnia Institute ofAdvanced Studies, 3 PSP, Institutional Area, Madhuban Chowk, Rohini, Delhi-85.

PATRON

Shri R.K. GuptaChairman,Tecnia Group of Institutions

Dr. Nirmal SinghChairman, Editorial Committee

EditorDr. Nirmal Singh

Editorial Committee MembersDr. A.K. Srivastava.Dr. Ajay Kr. RathoreDr. Navneet Kumar Gupta

Editorial Office &Administrative

Address

The Editor,Tecnia Institute of Advanced Studies3 PSP Institutional AreaMadhuban Chowk, Rohini,Delhi-110085.Tel: 011-27555121-124,Fax:011-27555120

E-mail: [email protected]: http://www.tecniaindia.org


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From The Editors DeskFrom The Editors DeskFrom The Editors DeskFrom The Editors DeskFrom The Editors Desk

I take this opportunity to thank all contributors and readers for making Tecnia Journal of ManagementStudies an astounding success. The interest of authors in sending their research-based articles for

publication and overwhelming response received from the readers is duly acknowledged. I owe myheartfelt gratitude to all the Universities and management institutes for sending us their journalson mutual exchange basis, and their support to serve you better.

We are happy to launch the seventh issue of our academic journal. The present issue incorporatesthe following articles:

Organizational Commitment of Information Technology Professionals: Role of TransformationalLeadership and Work-Related Beliefs


Validating Metrics On The Basis Of Object Oriented

A Simulation-Based Approach To Software Release And Support

Knowledge Management: Tool, Techniques And Technology

Automatic Tuning of Oracle SGA Parameters An Overview

Measuring Return On Investment (ROI) In ERP Implementation A Management Perspective

My thanks to the authors Priya Chandna and Venkat R. Krishnan, Dr. R.K. Uppal, Gurvinder Kaur,

Vijay Singhal, Dr. K.P Singh, Praveen Gupta, Hitesh Sharma, Vikram Singh and C.M. Maran whohave sent their manuscripts in time and extended their co-operation particularly in following theAmerican Psychological Association (APA) Style Manual in the references.

I, extend my sincere thanks to our Chairman Sh. R. K. Gupta, who has always been a guiding light,encouragement and prime inspiration to publish this journal. I am grateful to Dr. A.K. Srivastava,Director, for his continuous support to bring out the Journal in a proper form. I also appreciateEditorial Committee Members for their assistance help, advice and suggestion in shaping up theJournal. My sincere thanks to our distinguished reviewers Mr. Vijay Singhal & Mr. Praveen Guptaand all team members of Tecnia family for their untiring efforts and support in bringing out thisbi-annual Journal.

I am sure the issue will generate immense interest among corporate practitioners, policy-makers,academicians and students.

Dr. Nirmal SinghEditor


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Contents

1. Organizational Commitment of Information Technology Professionals:Role of Transformational Leadership and Work-Related Beliefs .................................1


2. E-Services in Bank- Solution for Better Tomorrow.........................................................14Dr. R.K. Uppal

3. Validating Metrics on the basis of Object Oriented ....................................................... 28Gurvinder Kaur and Vijay Singhal

4. A Simulation-Based Approach To Software Release And Support ............................ 41Vikram Singh

5. Knowledge Management: Tools, Techniques and Technologies ................................ 47Dr. K.P. Singh

6. Automatic Tuning of Oracle SGA Parameters An Overview ....................................57Praveen Kumar Gupta and Hitesh Kumar Sharma

7. Measuring Return On Investment (ROI) In ERP Implementation A Management Perspective .................................................................................................. 64

C. M. Maran

8. Book Review: Mr. Vijay Singhal .........................................................................................71

9. Book Review: Dr. Nirmal Singh .......................................................................................... 71


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General Information Tecnia Journal of Management Studies is published half-yearly. All editorial and

administrative correspondence for publication should be addressed to the Editor, TecniaInstitute of Advanced Studies, 3 PSP, Institutional Area, Madhuban Chowk, Rohini,Delhi-110085.

The received articles for publication are screened by the Evaluation Board for approvaland only the selected articles are published. Further information on the same is availablein the Guidelines for Contributors.

Annual subscription details with the format for obtaining the journal are given separatelyand the interested persons may avail the same accordingly.

Views expressed in the articles are those of the respective authors. Tecnia Journal ofManagement Studies, its Editorial Board, Editor and Publisher (Tecnia Institute ofAdvanced Studies) disclaim the responsibility and liability for any statement of fact oropinion made by the contributors. However, effort is made to acknowledge source materialrelied upon or referred to, but Tecnia Journal of Management Studies does not acceptany responsibility for any inadvertent errors & omissions.

Copyright Tecnia Institute of Advanced Studies, Delhi. All rights reserved. No part ofthis publication may be reproduced, stored in a retrieval system or transmitted, in any

form or by any means, electronic, mechanical, photocopying, recording or otherwise,without the prior permission of the Publisher.

Registration Number : DELENG/2006/20585

International Standard Serial Number (ISSN) : 0975 7104

Printed & Published by : Tecnia Institute of Advanced Studies,Madhuban Chowk,Rohini,Delhi-110085.

Printed at: Rakmo Press Pvt.Ltd.,C-59, Okhla Industrial Area, Phase-I,New Delhi-110020.


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Tecnia Journal of Management Studies Vol. 4 No. 1, April 2009 September 2009

1

Proceedings of 40th Annual Meeting of the Eastern Academy of Management, (Technology and Information Systems Track) Baltimore,Maryland, May 2003*Priya Chandna and Venkat R. Krishnan, Xavier Labour Relations Institute, Jamshedpur, IndiaE-mail: [email protected]

ORGANIZATIONAL COMMITMENTOF INFORMATION TECHNOLOGYPROFESSIONALS: ROLEOF TRANSFORMATIONAL

LEADERSHIPAND WORK-RELATED BELIEFS

assessment of Meyer and Allens (1991) three-component model of organizational commitment byJaros (1995) showed that an employees affectivecommitment to the organization was the mostimportant component of organizational commitmentin predicting turnover intentions. Jaros (1995) claimed

that each component of commitment is significantlyand negatively correlated with turnover intentions andan employees affective commitment to theorganization is the most important component oforganizational commitment in predicting turnoverintentions. Lee and Mowday (1987) found thatorganizational commitment explained a significantproportion of incremental variance in intention toleave.

In this age of accelerating attrition rates, leadersare more important than ever. An effective leader canenhance an employees organizational commitment.

Over the last two decades, considerable literature hasaccumulated on transformational leadership (Bass,1998). The present organizational focus on revitalizingand transforming organizations to meet competitive

One of the biggest challenges that InformationTechnology (IT) organizations have been facingover recent years is the ability to attract and retainquality human resources. Several surveys have shownhigh staff turnover rates in the IT industry. The highestturnover rates were reported in India (16 percent),

China and Switzerland (14 percent), the U.S. andCanada (10 percent) (Pastore, 2000). Industry attritionrates are highest amongst employees having betweenone and five years of experience. With the fast pace oftechnological development in the sector, there are newtechnologies coming up all the time. If the current firmdoes not provide the wherewithal to learn these,employees job-hop to another firm that does. Themobility is more because higher numbers of jobs areavailable at this level of skill and experience. As aresult, the Indian IT industry, especially for employeesat the lower end of the software skill spectrum, facesan employee turnover rate of as high as 25 to 30percent.

Employee turnover is affected largely byemployees organizational commitment. An

Abstract: Impact of transformational leadership and five work-relatedbeliefs (work ethic, Marxist, organizational, leisure ethic, and humanistic)on affective, continuance, and normative commitment was studied using34 manager-subordinate pairs from information technology (IT) and 44pairs from manufacturing organizations in India. Analyses of varianceshow that normative and continuance commitment, transformationalleadership, and three beliefswork ethic, Marxist, and organizationalare less in IT than in non-IT sector. Continuance and normative

commitment continue to be lower even after controlling for beliefs.Transformational leadership appears to have no direct effect oncommitment in non-IT and no effect at all in IT sector.

Priya Chandna*Venkat R. Krishnan**


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2 Priya Chandna and Venkat R. Krishnan

challenges ahead has been accompanied by increasinginterest among researchers in studyingtransformational leadership. Such leadership isnecessary for optimal subordinate satisfaction,commitment, and performance. There exists a

relationship between transformational leadershipbehaviors and various outcomes measured at theindividual and organizational level. In addition totransformational leadership, work beliefs of anindividual could also affect his or her organizationalcommitment. Studies have shown a positiverelationship between work beliefs and commitment(Finegan, 2000; Oliver, 1990).

We report in this paper a comparative study thatlooked at individuals organizational commitment inthe IT and non-IT sectors. This study analyzed theimpact that a transformational leader has onemployees commitment to the organization and hencetheir willingness to continue to work in theorganization. In addition, it took into account the work-related beliefs typical to every individual and analyzedhow these work beliefs were related to organizationalcommitment and transformational leadership. Theimpact of transformational leadership and work beliefson the organizational commitment of employees wasanalyzed separately for the IT and non-IT sectors.

Theory and Hypotheses

With the increasing importance of knowledge asa corporate asset in todays dynamic environment, itis becoming imperative for organizations to be able toincrease the level of commitment and attachment thatemployees feel toward their organization and to beable to retain the all important human asset in theorganization. This is especially true for the IT sectorwhere the attrition rates are one of the highest.

Organizational Commitment

According to Porter, Steers, Mowday, and Boulian(1974: 604), commitment is a strong belief in andacceptance of the organizations goals and values, awillingness to exert considerable effort on behalf of

the organization, and a definite desire to maintainorganizational membership. Researchers haverecommended restricting the definition to theattachment resulting from, or based on, an employeescompliance (conformity driven by rewards andpunishments), identification (a desire for affiliation),and internalization (individuals congruence withorganizations goals and values) (Hunt & Morgan,

1994). Also important in conceptualizingorganizational commitment is the advocacy of multiplecommitments view. According to Reichers (1985: 469),organizational commitment can be accuratelyunderstood as a collection of multiple commitments

to various groups that comprise the organization.Components of commitment. Until recently,

commitment has typically been defined as a one-dimensional concept (Meyer, Allen, & Smith, 1993).OReilly, Chatman and Caldwell (1991) recognized themultidimensional nature of commitment. Meyer andAllen (1991) presented compelling evidence to suggestthat commitment comprised of three distinctcomponentsaffective, normative, and continuance.Affective commitment refers to an employeesemotional attachment to, identification with, andinvolvement in the organization.... Normativecommitment reflects a feeling of obligation to continueemployment (Meyer & Allen, 1991: 67). Continuancecommitment develops as employees recognize thatthey have accumulated investments . . . that would belost if they were to leave the organization, or as theyrecognize that the availability of comparablealternatives is limited (Meyer et al., 1993: 539).

Antecedents of organizational commitment. Finegan(2000) illustrated that the best predictor of commitmentwas the employees perception of the workenvironment. Pearson and Chong (1997) on studying286 nursing staff of a large Malaysian hospital reportedthat the task content properties of identity, significance,

and autonomy as well as the interpersonal taskattribute of dealing with others were significantcontributors of organizational commitment. Becker(1992) said that the foci of commitment (the individualsand groups to whom an employee is attached) wereimportant determinants of commitment to anorganization. Hunt and Morgan (1994) showed thatglobal organizational commitment was a keymediating concept and several constituency-specificcommitments such as commitment to top managementand commitment to supervisor have importantoutcomes for organizations because they lead to, bringabout, or result in global organizational commitment.Luthans, Baack, and Taylor (1987) showed thatdemographics, such as age, education, and tenure, hada significant impact on organizational commitment.They also found that the more a leader structured asituation, the more committed employees were to theorganization.

Effects of organizational commitment. According to


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33Organizational Commitment of Information Technology Professionals:


Meyer et al. (1993: 67), employees with a strongaffective commitment remain with the organizationbecause they want to, those with a strong continuancecommitment remain because they need to, and thosewith a strong normative commitment remain because

they feel they ought to do so. Finegan (2000) claimedthat with all three types of commitment, the employeeis committed to the organization but for differentreasons, and accordingly, each type of commitmentproduces different effects. Affective commitment isassociated with more positive work attitudes (Allen& Meyer, 1996) and a greater likelihood of engagingin organizational citizenship (Meyer & Allen, 1991).In contrast, studies have found either no relationshipbetween continuance commitment and performance,or a negative one (e.g., Konovsky & Cropanzano, 1991).Siders, George, and Dharwadkar (2001) found thatcommitment to an organization was positively related

to objective job performance that is rewarded by theorganization, more specifically to sales volume. Wong,Hui, and Law (1995) found that commitment predictedboth sa ti sf action and turnov er in tent ion.Organizational commitment has a direct bearing onthe employees intention to leave the organization.Keeping in mind the high attrition rates in the IT sector,we hypothesized:

Hypothesis 1. Organizational commitment wouldbe lower in the IT sector than in the non-IT sector.

Transformational Leadership

Burns (1978: 20) defined transformationalleadership as occurring when one or more personsengage with others in such a way that leaders andfollowers raise one another to higher levels ofmotivation and morality. Transformational leadersthus serve as an independent force in changing themakeup of followers motive base through gratifyingtheir motives. Bass (1985) built on Burns (1978) workand described transformational leadership in terms ofthe impact that it had on followers; followers felt trust,admiration, and loyalty towards the leader.Transformational leaders motivated followers to domore than the latter originally expected to do.Transformational leaders also changed theorganizational culture (Bass, 1985).

Factors of transformational leadership.Transformational leadership consists of fourinterrelated factorscharismatic leadership,inspirational leadership, intellectual stimulation, andindividualized consideration (Bass, 1998). Charismatic

leadership could be further divided into two factorsattributed charisma and idealized influence behavior.Charismatic leaders provide subordinates with moremeaning for their work and arouse enthusiasm,excitement, emotional involvement, and commitment

to the groups objectives. Inspirational leader behaviorsinclude action-orientation, confidence building, andinspiring belief in the cause, which often leadsfollowers to be committed, involved, loyal, and readyto exert extra effort. Intellectual stimulation helpsemployees emphasize rational considerations andchallenge old assumptions. Individualizedconsideration implies developing employees andcoaching them.

Authors have been using the termstransformational leadership and charismaticleadership as synonyms or as identical twins (Conger,1999). According to Conger and Kanungo (1998),charismatic leaders critically evaluate the existingsituation or status quo and keeping in mind theenvironment, they formulate a strategic vision andthen articulate it such that it motivates the followers.Shamir, House, and Arthur (1993) theorized thatcharismatic leadership transforms followers self-concepts and thereby motivates them. Shamir, Zakay,Breinin and Popper (1998) found that a leadersemphasis on collective identity was related tosubordinates level of identification with the leader.

According to Hater and Bass (1988),transformational leadership factors added to the

prediction of work group performance (theperformance of the group of subordinates directlyreporting to the manager) beyond that of transactionalleadership factors. Kuhnert and Lewis (1987) claimedthat transformational leaders held a sense of moralobligation to the organization as an end value, whichin turn was also adopted by subordinates. Pillai,Schriesheim, and Williams (1999) found that leadersfoster organizational commitment through the fairnessof procedures they employ.

Context and transformational leadership. Whiletransformational leadership is potentially applicable

to most organizational situations, the emergence andeffectiveness of such leadership may be facilitated bysome contexts and inhibited by others (Pawar &Eastman, 1997). Waldman, Ramirez, House, andPuranam (2001) found that CEO charismaticleadership enhanced performance only underconditions of perceived environmental uncertainty.Shamir and Howell (1999) argued that charismatic


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leaders are more likely to emerge and be effective whenthe tasks of organizational members are challengingand complex and require individual and groupinitiative, responsibility, creativity, and intense effort;and when performance goals are ambiguous and

extrinsic rewards cannot be strongly linked toperformance.

In the IT sector, telecommunication technologiesprovide managers with easy means of monitoring andcontrolling their subordinates behaviors. Thus, theymay strengthen the organizational situation, andreduce the scope for the emergence of transformationalleaders. Furthermore, the IT sector uses technologieswhich may be seen as introducing more distant andcold means of communication between leaders andpotential followers, thereby hindering theidentification, trust-building, and emotional processesinvolved in charismatic leadership (Shamir & Howell,1999). Hence, we hypothesized:

Hypothesis 2. Transformational leadership wouldbe lower in the IT sector than in the non-IT sector.

Transformational leadership and organizationalcommitment. Bycio, Hackett, and Allen (1995) studied4000 registered nurses and found that transformationalscales had positive relationships with affectivecommitment that were significantly larger than thoseinvolving continuance commitment or normativecommitment. Moreover, inspirational aspects oftransformational leadership enhanced affective

commitment but not the other facets of commitment.They showed that higher levels of transformationalleadership were associated with subordinatesorganizational commitment, irrespective of thecommitment measure used. Barling, Weber, andKelloway (1996) used a pretest-posttest control-groupdesign and found that training managers intransformational leadership enhanced theorganizational commitment of their subordinates. Wetherefore hypothesized:

Hypothesis 3. Transformational leadership wouldbe positively related to organizational commitment.

Work-Related Beliefs

Authors have used the two terms work values andwork beliefs interchangeably. Work values, accordingto Dose (1997: 227-228), are evaluative standardsrelating to work or the work environment by whichindividuals discern what is right or assess theimportance of references. Zytowski (1970: 176)

defined work values as a set of concepts whichmediate between the persons affective orientation andclasses of external objects offering similar satisfaction.Work values are goals that one seeks to attain to satisfya need; the needs may be satisfied by more than one

kind of activity or occupation. Organizationalresearchers use the term work values to encompass avariety of notions ranging from business ethics to workpreferences. Dose (1997) proposed that work valuesvary along two dimensions: (a) whether the value heldexhibits a moral element, and (b) the degree of socialconsensus regarding the importance or desirability ofthe particular value. Elizur (1984) used smallest spaceanalysis to analyze work values, and argued that twobasic facets were needed to describe the domain ofwork values: modality of outcome (the importance ofvarious work outcomes to the individual) and systemperformance contingencies (the importance of

performance-reward contingencies and systemrewards to the individual). Work values have beeninvestigated as preferences for the type of work orwork environment individuals would like or considerimportant in job decisions (Dose, 1997).

Work belief systems. Buchholz (1997: 571-572)stressed on the existence of five belief systemsworkethic, organizational, Marxist, humanistic, and leisureethic. First, work ethic is considering work as beinggood in itself and as bestowing dignity upon a person.Second, organizational belief system is where worktakes on meaning only as it affects the group or

organization for which one works and as it contributesto ones status and rise in the organizationalhierarchy. Third, Marxist-related beliefs implied thatproductive activity or work is basic to humanfulfillment. Fourth, humanistic belief is that workshould be taken seriously as the way in whichindividuals discover themselves and fulfill themselvesas human beings. Lastly, leisure ethic is consideringwork to have no meaning in itself and claiming thatmeaning could only be found in leisure.

Antecedents of work beliefs. Niles (1999) conducteda study to examine the structure and relativeimportance of work-related beliefs in contrastingcultural and religious settings. The results showed thatmost religions and most cultures had a commonconcept of a work ethic when it was defined as acommitment to hard work and to excellence. Hardwork was seen as an end in itself and even as morallyright. However, what did not appear to be universalseemed to be a belief that there was a directrelationship between hard work and success.



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According to Shome, Ratan, and Bhardwaj (1997), thestrength of the organizational belief system alsodepended on the individuals understanding of theorganizational ethos.

Effects of work beliefs. Pryor and Davies (1989)

claimed that there existed a moderate relationshipbetween work beliefs and general work preferences.In addition, Shome et al. (1997) found that people witha stronger work ethic were more willing tocompromise and hence this denoted a positive andhealthy environment in the organization. Studying 90managers from a public sector undertaking, they foundthat middle level managers showed a strongerorganizational belief system as compared to juniormanagers. Saks, Mudrack, and Ashforth (1996) foundthat work ethic was indirectly related to intentions toquit and turnover in the case of temporary serviceemployees.

Organizational commitment and work beliefs. Oliver(1990) conducted a study in an employee-owned firmin the United Kingdom, and found that bothorganizational rewards and work values showedsignificant relationships to commitment. The studyrevealed a direct impact of work values on the level ofcommitment. Participatory and instrumental valuesmade the most impact on the commitment index.According to Finegan (2000), affective, normative, andcontinuance commitment were each predicted bydifferent clusters of values. It was found that thegreater the similarity between personal values and

organizational values, the greater the affectivecommitment. Individuals who valued adherence toconvention were more likely to score high onnormative commitment. Given that normativecommitment describes the feelings of obligation aperson has to remain with an organization, it is perhapsnot surprising that people who value obedience,cautiousness, and formality are more likely to benormatively committed. Shome et al. (1997), whileexamining the relation between conflict resolutionstyle and belief about work, found that people with astronger work ethic had a stronger commitment totheir organizational goals. Saks et al. (1996) showedthat work ethic was directly related to organizationalcommitment. Hence, we had:

Hypothesis 4. The intensity of work ethic would bepositively related to organizational commitment.

Transformational leadership and work beliefs. Burns(1978) said that the first task of leadership was to bringconsciousness to the followers sense of their own

needs and values. He said that a transformationalleader has the capacity to transcend the claims of themultiplicity of everyday wants and needs andexpectations, to respond to the higher levels of moraldevelopment, and to relate leadership behavior to a

set of reasoned, relatively explicit, conscious values.A transforming leader appeals to the higher moregeneral values that express followers morefundamental and enduring needs. Shamir et al. (1993)argued that charismatic leadership would makefollowers see work as intrinsically valuable, since workprovides an opportunity for them to expressthemselves. It is by first affecting work ethic thattransformational leadership would enhancecommitment indirectly. Hence, we hypothesized:

Hypothesis 5. Transformational leadership wouldbe positively related to the work ethic of follower.

Hypothes is 6. The relationship betweentransformational leadership and organizationalcommitment would cease to exist after controlling forwork beliefs.

Method

Questionnaires were distributed to employees oftwo organizations in the IT sector and one organizationin the manufacturing sector. One of the organizationsin the IT sector specializes in delivering high-quality,cost-effective solutions for businesses with intensiveinformation processing needs and employs over 3,900

IT professionals at ten development centers in Indiaand multiple customer locations in the U.S. andEurope. The second IT sector organization is thesoftware division of one of the leading iron and steelcompanies of India. The organization surveyed in themanufacturing sector is located in a major industrialtown in Eastern India. The organization is a 50:50 jointventure between an automobile manufacturer, and aU.S.-based company that manufactures fuel-efficient,low emission, environment-friendly diesel engines. Ithas over 900 employees consisting of around 125managers and over 750 associates.

To minimize the risk of relationship inflation dueto common source biases, data about leader behaviorwas obtained from a different source than that for dataabout subordinates beliefs and attitudes. Hence, aleader-follower dyad was used where the superiorcompleted the questionnaire on transformationalleadership and his or her immediate subordinatecompleted the questionnaires on work beliefs andorganizational commitment. The respondents from the

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IT sector were project leaders and their immediatesubordinates. In the manufacturing sector, managersand their immediate subordinates, the associates, werechosen as respondents. Respondents were not askedto give any form of identification. It was made clear to

the respondents that all responses will be anonymous.The questionnaires measured transformationalleadership of the leaders, work beliefs of the followersand the followers commitment to the organization.

Demographic Details of Sample

The final sample for the study comprised 78 pairsof leaders and followers34 from the IT sector, and44 from the manufacturing sector. The median age ofthe respondents in the superior category was 31 yearsand they had on an average 11 years of workexperience. On the other hand, the median age of thesubordinates was 26 years and their tenure in theorganization was 3 years on an average. More than50% of the superiors were graduates. Out of the 55subordinates who provided data related to academicqualifications, 36 were graduates and 12 hadcompleted their post graduation and the remaininghad professional diplomas. Most of the subordinateshad been working under the same superior for twoyears.

Measures

Organizational commitment. Affective, normative,and continuance commitment were measured using

Meyer, Allen, and Smiths (1993) 18-item commitmentscale. This scale has been widely used in the field andhas median reliabilities (assessed using coefficientalphas) across many studies of .85 for affectivecommitment, .73 for normative commitment, and .79for continuance commitment (Allen & Meyer, 1996).A detailed discussion of the construct validity of thisscale is found in Allen and Meyer (1996).

Work beliefs. The belief system questionnaire asdeveloped by Buchholz (1977) was used to measurethe intensity of five types of work-related beliefs heldby the follower. The five types of work beliefs are work

ethic, organizational belief system, Marxist-relatedbeliefs, humanistic belief system, and the leisure ethic.The respondents were asked to judge how stronglythey agreed or disagreed with each statement in thequestionnaire, using a seven-point scale (1=Stronglydisagree; 2=Disagree; 3= Somewhat disagree;4=Neither disagree nor agree; 5= Somewhat agree;6=Agree; 7=Strongly agree). The leisure ethic scale was

not found to be reliable and hence an item (the trendtowards more leisure is not a good thing) was deleted,which led to an increase in reliability and a resultantalpha of 0.51.

Transformational leadership. The most widely used

scale to measure factors in transformational leadershipis Multifactor Leadership Questionnaire (MLQ). TheBass and Avolio (1991) version of the MLQ was usedto measure transformational leadership of thesupervisor. Five factors of transformationalleadershipattributed charisma, idealized influencebehavior , inspirat ional leadersh ip , in te llec tualstimulation, and individualized consideration weremeasured. Respondents were asked to answer theMLQ by judging how frequently they displayed thebehaviors described in the questionnaire, using a five-point scale (0=Not at all; 1=Once in a while;2=Sometimes; 3=Fairly often; 4=Frequently, if notalways). There was a significant positive correlationbetween the five transformational leadership factors,the correlation being not less than 0.70 (p < 0.001). Themean of the five factors was taken as the score fortransformational leadership.

Results

Table 1 presents descriptive statistics (means andstandard deviations) for and correlations between allvariables in the studythree types of organizationalcommitment, five types of work beliefs, andtransformational leadership. It also presents reliabilitycoefficients for all the variables. Each variable wasconstructed by computing the mean of the itemscomprising the scale. The table also presents thecorrelations between transformational leadership andthe three dimensions of commitment after controllingfor all the five work beliefs.

Analysis of variance was done to test if means ofthe variables are different across IT and non-IT sectors.The results are given in table 2. Normative andcontinuance commitment were significantly less in theIT sector as compared to the non-IT sector. There wasno significant difference in affective commitment

across the two sectors. Hence, our hypothesis 1 waspartly supported. The mean of transformationalleadership in the IT sector was 4.05 as compared tothe non-IT sector where it was 4.39 (F=10.65, p < .01,from table 2). Hypothesis 2 which said thattransformational leadership would be lower in the ITsector as compared to the non-IT sector was hencesupported.



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We did an analysis of covariance to see ifcontinuance commitment and normative commitmentvaried across the IT and non-IT sectors after controllingfor transformational leadership and the five types ofbeliefs, taking one at a time. Analysis of covarianceassumes that the slope of the covariate by independentvariable is the same for all levels of the independentvariable (Scheffe, 1959). We tested for heterogeneityof slopes by modeling continuance commitment andnormative commitment separately against each of thesix covariates (transformational leadership and the fivebeliefs), sector, and the product of sector and covariate.

Except in the cases of continuance commitmentmodeled against leisure ethic, continuancecommitment modeled against transformationalleadership, and normative commitment modeledagainst work ethic, there was no significant differencein the covariate by sector relationship as a function ofsector. We therefore did the analysis of covarianceexcluding those three cases. Least squares means ofcontinuance commitment were significantly lower forIT professionals than for non-IT employees, aftercontrolling for work ethic, Marxist-related beliefs,organizational belief system, and humanistic belief


Table 1Descriptive Statistics and Correlations a

Variable Mean s.d. 1 2 3 4 5 6 7 8 9

1. Affective commitment 4.80 .92 (.54)

2. Continuance commitment 4.59 1.29 -.07 (.82)3. Normative commitment 4.99 .84 ***.42 ***.56 (.56)

4. Work ethic 5.57 .92 *-.24 ***.54 ***.43 (.61)

5. Marxist-related beliefs 4.55 .82 ***-.44 ***.71 **.33 ***.58 (.67)

6. Organizational belief system 5.85 .63 .15 ***.52 ***.61 ***.42 ***.39 (.66)

7. Leisure ethic 4.10 1.09 ***-.37 **.34 .12 **.35 ***.52 *.28 (.51)

8. Humanistic belief system 6.05 .54 -.05 .14 .09 **.31 .18 ***.51 *.28 (.79)

9. Transformational leadership 4.24 .48 -.21 ***.42 **.32 ***.43 ***.44 **.29 **.32 ***.37 (.96)

10. Transformational leadership - - -.01 .18 .24 - - - - - -after controlling for workbeliefs

a n=78. Alphas are in parentheses along the diagonal. p < .10. * p < .05. ** p < .01. *** p < .001.

Table 2Analysis of Variance across IT and Non-IT Sectors

IT Sector (N = 34) Non-IT Sector (N = 44) F

Variable Mean s.d. Mean s.d.

Affective commitment 4.84 1.11 4.76 .76 .16

Continuance commitment 3.74 1.19 5.25 .94 ***39.51

Normative commitment 4.62 .95 5.28 .62 ***13.88

Work ethic 5.00 .84 6.01 .72 ***32.44

Marxist-related beliefs 4.00 .63 4.97 .71 ***40.20

Organizational belief system 5.50 .63 6.12 .50 ***24.29

Leisure ethic 3.75 .92 4.36 1.15 6.46

Humanistic belief system 5.97 .55 6.12 .53 1.40

Transformational leadership 4.05 .43 4.39 .47 **10.65

p < .10. * p < .05. ** p < .01. *** p < .001.


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system one at a time. Similarly, normative commitmentwas significantly lower for IT professionals than fornon-IT employees, after controlling for Marxist-relatedbe li efs, le isur e ethic, humanist ic be lief , andtransformational leadership one at a time.

Transformational leadership was significantlypositively related to continuance commitment and tonormative commitment (from table 1). However, it didnot show a significant relationship with affectivecommitment. Separate correlations by sector werecalculated and the results are reported in table 3.Transformational leadership did not show anysignificant relationship with organizationalcommitment in the IT sector. In the non-IT sector,transformational leadership was related negatively toaffective commitment and positively to continuancecommitment and normative commitment. Therefore,hypothesis 3 was supported only in the case ofnormative and continuance commitment, and only innon-IT sector.

and only in non-IT sector. Though not hypothesized,some correlations were also seen between the otherwork beliefs and commitment. In the IT sector,affective commitment was related negatively toMarxist belief and positively to organizational belief.

Continuance commitment was positively related toMarxist belief and organizational belief. Normativecommitment was positively related to organizationalbelief. In the non-IT sector, affective commitment wasnegatively related to Marxist belief and leisure ethic.Continuance commitment was positively related towork ethic, Marxist belief, and leisure ethic. Normativecommitment was positively related to work ethic,Marxist belief, and organizational belief.

There was a significant positive correlationbetween transformational leadership and all the fivework beliefs for both sectors together (from table 1).Looking at each sector separately, transformationalleadership did not show any significant relationshipwith any of the work beliefs in IT sector (from table 3).


Table 3Correlations in the IT and Non-IT sectors

(N=78) Affective Continuance Normative Transformationalcommitment commitment commitment leadership

IT Non-IT IT Non-IT IT Non-IT IT Non-IT

Work ethic -.32 -.20 .14 ***.54 .03 ***.62 -.02 ***.57

Marxist related beliefs *-.42 ***-.64 *. 38 ***.73 -.10 *.38 .06 **.46

Organizational belief system **.44 .12 *.36 . 29 **.51 ***.53 -.12 **.39

Leisure ethic -.22 ***-.53 -.14 ***.52 -.19 .21 -.17 ***.48

Humanistic belief system .06 -.17 -.07 .22 -.02 .11 .19 **.46

Transformational leadership -.09 *-.34 -.01 ***.56 .07 **.38

Transformational leadership -.01 -.13 .07 . 31 .29 .10after controlling for work beliefs

p < .10. * p < .05. ** p < .01. *** p < .001.

Work ethic was significantly negatively related toaffective commitment and significantly positivelyrelated to normative and continuance commitment forboth sectors together (from table 1). Looking at eachsector separately, work ethic did not show anysignificant relationship with organizationalcommitment in the IT sector (from table 3). In the non-IT sector, work ethic was significantly positivelyrelated to continuance and normative commitment,but not to affective commitment. Therefore, likehypothesis 3, hypothesis 4 was also supported only inthe case of normative and continuance commitment,

In the non-IT sector, transformational leadership wassignificantly positively related to all the five workbeliefs. This showed that hypothesis 5, which relatedtransformational leadership and work ethic, wassupported only in the non-IT sector.

For testing our hypothesis 6, we controlled for thefive work beliefs and looked at the relationshipbetween transf ormational leadership andorganizational commitment. The results of the partialcorrelation are also included in table 1 (for both sectorstogether) and table 3 (for each sector separately).


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Analyzing sector-wise, it was found that in the non-ITsector, the zero order correlations betweentransformational leadership and commitments thatwere significant ceased to be significant aftercontrolling for all the five work beliefs. In the IT sector,

the relationship between transformational leadershipand organizational commitment remained non-significant before and after controlling for work beliefs.Hence, hypothesis 6 was supported in the case of onlythe non-IT sector.

We used regression analysis with forward optionwith the three types of organizational commitment asthe dependent variables, and the five work beliefs andtransformational leadership as the independentvariables. This was done separately for the two sectors.Regression analysis with the forward-selectiontechnique (Judge, Griffiths, Hill, Lutkepohl, & Lee,1985) begins with no variables in the model. For eachindependent variable, it calculates F statistics thatreflect the variables contribution to the model if it isincluded. The variable that would produce the largestF statistic is added to the model. The evaluation processis repeated with the variables remaining outside themodel. Once a variable is entered into the model, itstays. Thus, variables are added one by one to themodel until no remaining variable produces asignificant F statistic.

The regression analysis with forward optionrevealed that in the IT sector, increasing the intensityof organizational belief system would best predict

affective commitment. Affective commitment wouldbe further enhanced if Marxist-related beliefs weredecreased. Continuance commitment on the otherhand would be best predicted by Marxist relatedbeliefs and could be further increased by increasingorganizational belief system. For normativecommitment, organizational belief system was the bestpredictor. In the non-IT sector, affective commitmentcould be increased by reducing Marxist-related beliefs.Increasing Marxist-related beliefs as well astransformational leadership would result in increasedcontinuance commitment. For increasing normativecommitment, one would have to enhance work ethic.Increasing organizational belief system and reducinghumanistic belief system would also enhancenormative commitment in the non-IT sector.

Discussion

The results of this study reveal that employeescommitment to the organization varies across sectors.

Employees in the manufacturing sector, which wasused to represent the non-IT sector, exhibit a higherorganizational commitment as compared to employeesin the IT sector. Another interesting finding is thattransformational leadership also varies sector-wise. A

transformational leader appears to have aninsignificant role to play in the present IT scenario. Inaddition, the results demonstrate that, in both thesectors, organizational commitment is best explainedby the work beliefs. Hence, by targeting work beliefsone can change the organizational commitment of theemployees. Transformational leadership does notdirectly enhance organizational commitment in eitherof the two sectors and can do so only by suitablymodifying the work beliefs. The relationship betweenorganizational commitment and work beliefs istherefore, of paramount importance.

This study has direct implications for todaysindustrial world. Turnover rates are skyrocketing, andemployees are moving from one organization toanother in rapid succession taking with them the entireorganizational learning. To curtail this huge loss ofhuman capital, it is necessary for an organization toknow which work beliefs to tap to increase employeesattachment to the organization and the motivation towork for the organization. The human resourcemanagement professionals have a daunting task aheadof them.

In the IT sector, the organizational belief systemplays a significant role in predicting an employees

organizational commitment. Enhancing theorganizational belief system can increase affectivecommitment. Employees feel more emotionallyattached to and involved in the organization if stepsare taken to ensure that they perceive that their workaffects the organization. Increasing their sense ofownership and empowering them can therefore helpin this case. In addition, they should feel that if theirwork serves the groups interest it will result in theirown success. Hence, a reward system with atransparent performance-reward relationship shouldbe put in place, such that the employees work wouldcontribute to their status in the organization and risein the organizational hierarchy. Moreover, to increasethe feeling that working in a group is best,organizations can make use of symbols. In addition, asense of identification with the organization can becultivated if employees are given stock options. Thesemeasures will increase the intensity of affectivecommitment that employees feel towards the



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organization. Affective commitment can also beimpacted positively by modifying Marxist-relatedbeliefs such that employees feel that they are beingable to fulfill themselves as creative and socialindividuals and are not being exploited.

Increasing Marxist-related beliefs can enhancecontinuance commitment. Employees need to be madeto feel that they would have a lot to lose if they leavethe organization. Moreover they should feel that alltheir past investment and time would be wasted if theyleft the organization. Charting out an attractive careerpath for them can do this. The amount of control thatthey exert in decision-making should be increased andmore participative management should be put in place.Employees should have a greater say in designing theircareer paths. Organizing work in groups and teamscan further enhance organizational belief system,which will increase continuance commitment.

Normative commitment reflects a feeling ofobligation to continue employment on the part of theemployee. Increasing the intensity of organizationalbelief system can help in developing normativecommitment. Organizational belief system implies thatthe employees believe that their success in theorganization depends on the degree to which theyconform to the norms of the organization. Therefore,they attempt to assimilate the critical norms and valuesof the organization and are more committed to it. Asense of obligation towards the employer can beinstituted by putting in place group norms that

emphasize that the employee owes a great deal to theorganization and leaving the organization is not a rightthing to do. The organization could establish a culturewhereby employees would experience a deep senseof guilt at the prospect of leaving the organization.Moreover, mechanisms to alienate people who are notcommitted and do not exert effort in the organizationcan be put in place. Strong group norms and a culturewhich compels employees to exert maximum effortand to feel that it is wrong to desert the organizationand its people is a means of impacting organizationalbe li ef system such that it increases normat ivecommitment.

A transformational leader goes beyond thetransactional needs and responds to the moraldevelopment of the follower and as such appeals toand also effectively influences the more general valuesof the follower. However, in the present scenario,transformational leadership does not seem to play animportant role in influencing work beliefs or

organizational commitment of followers in the ITsector. This could be because in the IT sector, thechannels of communication are impersonal and thereis not much interaction between the leader and thefollower. Communication channels such as emails

abound which do not help a leader much in inspiringthe followers. On the other hand, they hinder theidentification, trust building, and emotional processesinvolved in charismatic leadership. The lack ofpersonal interaction might have the same effects asbeing geographically distant. Howell and Hall-Merenda (1999) found that transformational leadershipproduced higher follower performance in close versusdistant situations.

The role of a transformational leader if developedin the IT sector such that the leader enhances theemployees work beliefs, would increaseorganizational commitment. Kirkpatrick and Locke(1996) conducted experiments that showed that aleaders vision was most strongly related to attitudesand these attitudes played an important role, inducingoutcomes such as organizational commitment. One canincrease effectiveness of transformational leadershipin the IT sector by increasing leader-followerinteraction. This can be done by means of mentorshipprograms. Gatherings of project teams with theirleaders could also be organized, which the leaders canuse to generate enthusiasm and involvement with theorganization or the project teams cause. In addition,study circles can be arranged. This carries much value

in a sector like IT that depends on constant updatingof skills and wherein it is necessary for the employeesto keep abreast with the current happenings.Therefore, these study circles can be forums used byleaders to encourage employees to challenge oldassumptions and drive them to learn more and henceintellectually stimulate them.

The absence of relationships between humanisticbeliefs and commitment in the IT sector perhapssuggests that the importance of humanistic beliefsmight be more evident at higher levels in theorganization. The followers in the sample surveyedfor the purpose of this study consisted primarily ofemployees at levels lower than that of the executivecadre and as such, humanistic beliefs may not be ofmuch importance to them. For those not belonging tosenior levels, fulfillment of lower needs and wants ispossibly of greater significance as compared to beinggiven the opportunity to discover and fulfillthemselves as human beings.



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Limitations and Suggestions for Future Research

There exist limitations stemming from the size aswell as the nature of the sample. Since the sample ofrespondents is relatively small, this study needs to bereplicated across a larger database of respondents to

confirm the findings. A study that includes firms acrossdifferent sectors like service or banking instead ofbeing limited to only the IT and manufacturing sectorscould shed more light on the variance in work beliefsand transformational leadership as a consequence ofthe nature of the industry. In addition,transformational leadership that can be observed at agiven point of time should set in motion effects forsome time in the future. In this case however, being across-sectional study, both transformational leadershipand commitment were measured at the same time. Alongitudinal study wherein commitment is measuredsubsequent to measuring transformational leadershipcould throw more light. Future research could alsostudy the effect of specific organizational variablessuch as structure, environmental characteristics of thatparticular industry, etc., and quantify how muchvariance amongst the work beliefs and the effects oftransformational leadership in the different sectors iscaused as a result of differences in each of theseorganizational variables. Moreover, the belief systemsused in this study might have undergone somemodifications with other belief systems such aseducational belief system, where work is seen asproviding a continuous learning experience, coming

into the picture. Hence, an attempt could be made todevelop a theoretical framework incorporating anychanges in belief systems concerning work.

Conclusion

Despite some limitations, this study makes someimportant contributions and has significantorganizational implications. In summary, this studyprovides the link between commitment to anorganization and work beliefs and the role of atransformational leader in changing work beliefs aswell as enhancing organizational commitment. It

brings out the fact that work beliefs are the immediateantecedents of organizational commitment. Moreimportantly, this study brings out the differences inwork beliefs, organizational commitment, andtransformational leadership across IT and non-ITsectors. Results of the current investigation point tothe importance of realizing the differences resultingfrom the nature of the organization so that these canbe taken into account while formulating policies

related to human resource management. It alsodemonstrates that the role of a transformational leaderin the IT industries should be made more effective tomodify work beliefs such that they enhanceorganizational commitment. Hence, it highlights the

untapped potential of transformational leadership inthe IT sector and its importance in enhancingorganizational commitment and eventually reducingemployee turnover.

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Introduction

Modern technology has transformed thefunctioning of business. It has bridged the gapsin terms of the reach and the coverage of systems andenabled better decision-making based on latest andaccurate information, reduced cost and overallimprovement in efficiency. In the Indian context, the

financial sector, especially the banking sector has beena major beneficiary from the inroads made by IT. Manynew processes, products and services offered by banksand other financial intermediaries are now IT centered.E-delivery channels are also a gift of IT. Now-a-daysmany banks are providing the services of e-channelslike ATMs, I-banking, M-banking, Tele-banking, Debitcards, Credit cards etc. Most of the initiatives regardinge-channels are aimed at providing better and moreefficient customer service by offering multiple optionsto the customers. These e-channels have positiveimpact on the profitability of the bank groups. Withthe rapid improvements in technology and faster

growth of e-channels society has become moresophisticated than in olden days. We have a bettereducated, better informed, better organized and betterpaid workforce than existed in olden days. With thehelp of e-channels, banking system has become moreefficient with efficient e-payment system. Thissituation has resulted in more competition among

banks and st imulated more technologica ldevelopments. Customers are getting many benefitsfrom e-services like balance enquiry, request forservices, issuing instruction etc from anywhere in theworld are possible, any time banking, convenience actsas a tremendous psychological benefit all the time,cash/card free banking through PC banking, bringsdown cost of banking to the customer over a period

of time, cash withdraw from any branch, on-linepurchase of goods and services including on-linepayment for the same. With so many benefits from e-services, it is a need of an hour to study the satisfactionlevel of customers from these e-services. This paperstudies the satisfaction of customers from different e-services.

ATM

ATM is a device that allows customers who havean ATM card to perform routine banking transactionswithout interacting with a human teller. ATMs are

currently becoming popular in India that enables thecustomers to withdraw their money 24 hours, 9 days,7 days a week. ATM sharing system through properconnectivity and switching technology provides thefirst real opportunity to serve the customers on a nationwide basis. International ATM sharing already a realityin North America and Europe seems likely to add a

E-SERVICESIN BANK- SOLUTIONFOR BETTER TOMORROW

Abstract: The present paper analyzes the perceptions of the bank customersregarding e-banking services in Punjab. The survey was conducted in Ludhianadistrict of Punjab in September, 2008. The perceptions of almost all the bankgroups exhibit their perceptions in favour of e-delivery channels. Among allthe e-delivery channels ATM is the most preferred e-delivery channel. Age-wise, upto 25 and 35-45 age groups more preferred e-delivery channels.Similarly professionals more preferred e-services. Chi-sq test reveals mostlysignificant difference in the opinion of the three bank groups customers at1% LOS. The paper concludes suggesting strategies to enhance the e-banking

services.

*Dr. R.K. Uppal, Director ICSSR Financed Major Research Project, D.A.V. College, Malout (Punjab)

R.K. Uppal*


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whole new dimension of convenience for bothbusinessman and tourist traveling abroad. The ATMsharing in India across banks started withSWADHAN-Shared Payment Network System inMumbai.

Benefits to Customers

24 hours access availability

Less time for transactions

Acceptability of card across multiple bank ATMs,even foreign tourists can access Maestro/VISAATMs.

Plethora of services available in addition to cashdispensing.

Benefits to Banks

Cost of setting up ATMs much lower than thebranch.

Migration of the routine transactions to the ATMsfrees the banks staff for more productive work

ATMs serve as the crucial touch points for crossselling of banks products

Enables the bank to display products on the screenand serves as a media for publicity for the bank.

Less hassle in handling cash

Internet BankingInternet bank to mean a bank offering its

customers, the ability to transact business with thebank over the internet. Internet banking refers to theuse of the internet as a remote delivery channel forbanking services. Subsequently, dial-up connections,personal computers, Tele-banking and automatedteller machines (ATMs) became the order of the dayin most of the developed countries. It is a web-basedservice that allows the banks authorized customers toaccess their account information. In the system,customers are allowed to log on the banks website withthe help of identification issued by the bank andpersonal identification number (PIN). Banks replies theuser and enables customers to access the desiredservices.


Convenience

Tailored products and services

Ease of access

Ease of changing supplier

Low cost

Financial planning capability

Benefits to Banks

Cost saving

Reaching new segment of the population

Bring efficiency

Enhancement of banks reputation

Better customer service

Mobile Banking

Mobile banking is a system of providing servicesto the customer to carry out banking transactions onthe Mobile Phone through a cellular service provider.It is a service of banks to make available, the facility ofbanking wherever the customer is and whenever heneeds. We can rather call this facility as Anywhereand Any Moment Banking but it is restricted to onlyinformation about his account and not cash services.


Customers need not stand in the bank counters/front offices for various enquiries about his account

Customer can save his valuable time in bankingtransaction

Give information at anytime and anywhere

Customers can pay his utility bills in time and savepaying penalties

Plan funding his accounts for the cheques issuedto various customers

Cheque book request can be made sitting in hiswork place

Benefits to Banks

Bank can utilized the time saved for expenses ofbusiness, marketing and sales activities by channelmigration of customers to mobile banking

Bank can take advantage of profits by way ofcommission for cellular companies by sellingprepaid talk time through ATMs

Banks providing mobile banking service can have



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competitive advantage on those banks, which arenot providing this service

Mobile banking enables banks to reduce costs ofcourier, communication and paper works etc.

Smart Cards

It is a plastic cards with chips embedded on themhave been globally accepted as the most effective andsecure data storage and payment mechanisms. Thesecards have the capability to store data and transactusing this data. Since data is stored in the card, it canwork in an offline mode and does not rely on a back-end or networking for transaction.


Portable data, anywhere, anytime

Time saving Large storage capacity

Minimize the risk associated with fraud/theft

Benefits to Banks

Secure data storage

Reduce cash

Data digitization without large scale investment

Increased productivity of bank staff

Remote access Increased customer base

Tele Banking

Tele-banking is only a relatively new electronicbanking product. However, it is a fast becoming oneof the most popular products. Customers can performa number of transactions from the convenience of theirown home or office, infact from anywhere they haveaccess to a phone. Customers can check balances andstatement information, transfer funds from oneaccount to another, and pay certain bills and other

statement or Cheque books.

Credit Card

Credit card can be called as and equivalent of aloan sanctioned by the banks to its customer. Creditcard facilitates and makes it possible to Use First andPay Later the specified amount of credit as per theagreed terms of sanction. Before issuing a credit card

to a customer, the bank would like to know and besure about the identification, age, level and source ofincome and repaying capacity. A person intending toget a credit card issued from a bank will have to fill ina prescribed application form for the purpose.

Indentification documents required to be enclosedwith the application.

Debit Card

Debit card is a deposit access product where thecard holder uses his own money in his bank accounton the principal of Pay First and Use Later.

Scheme of the Paper

This paper has been divided into five sections.After the brief introduction, second section deals with

review of related study. Third section deals withobjectives and research methodology. Fourth sectiondeals with findings and last part conclude the paper.

Review of Related Study

Previous studies have shown that quality indeedhas a significant effect on market share and return oninvestment (e.g., Anderson and Zeithaml, 1984; Phillips,Chang and Buzzell, 1983). Positive consumersperceptions of service quality also contribute toenhance customer satisfaction (Durvasual and Mehta,

1998) and

Durvashula, et al (2004) examined the servicequality in one particular type of retailing, namely,departmental stores. The dimensionality of servicequality was assessed using perception scores,expectations scores, as well as gap scores in Singapore.The results of the study showed that while theperceptions of retailers about service quality actuallyprovided by the department stores was above the scaleneutral point; significant gaps existed between theactual and expected service ratings.

Evans and Lindsey (1999) proposed the view thatcustomer satisfaction results from the provision ofgoods and services that meet or exceed customerneeds. To retain customers and stay competitive in thecurrent competitive environment, organization in theservice sector especially banks need to make customerperception of service quality on priority (Reichheld andSasser, 1990). Scheneider, et al (1998) belive that thecustomer who holds positive perception regarding the

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organization quality is likely to remain a customer ofthat organization. Some researchers like Rust andZahorik (1993) and Nazir (2000) say that for theorganizations, current customers provide a potentialbase for cross-selling and are less expensive for them

to keep a current customer than to gain a new one.Rust and Zahorik (1993) contended that service

quality makes a significant contribution to profitability.Service quality has also been recognized as a driver ofcorporate marketing and financial performance (Buttle,1996). Assessment of customer perceptions has thus,become an important research topic as it has significantrelationship to costs, return on investment,profitability, customer satisfaction, customer retention,service guarantee and marketing performance.

In India some practitioners and researchers havehighlighted the need for better service quality in banks

(Narnayana and Brahmanandam, 1990; Nageswar 1987;Elias, 1982; Srivastva, 1994; Malhotra and Arora, 1999;Sesha, 1999; Harsh, 2001; Nazir, 2000; Kumar & Mittal,2002; Mushtaq, 2003; Debasish, 2003 and Krishnaveni &Prabha, 2004-05). These studies also express the worriesof the researchers regarding the present trend ofcustomer dissatisfaction among public sector banks.On account of the rising importance of the concept ofservice quality, several researchers have tried to defineand conceptualize the dimensions of service quality(Lehtinen and Lehtinen, 1982 & 1991; Gronroos, 1984;Kotler, 1999; and Lewis and Booms, 1983). But the mostwidely reported set of definition of service quality is

that of Berry and his colleagues (Parasuraman, Zeithamland Berry, 1985, 1988).

Objectives

To study and analyze the perceptions of the bankcustomers regarding e-delivery channels.

Strategies to enhance the e-banking services.

Hypothesis

There is no significant difference in the opinion ofthe three bank groups customers regarding e-bankingservices.

Research Methodology and Database

Research Methodology

The study is based on a survey conducted in

Ludhiana (Punjab) in September, 2008. Public sectorbanks, Indian private sector banks and foreign banksoperating in Ludhiana district of Punjab form theuniverse of the study. We have selected Ludhianadistrict of Punjab because all the bank groups branches

are working in this district and it is known as industrialdistrict of Punjab and it is also thickly populated. Wehave selected the three banks, one from each bankgroup. Further we selected three branches one fromeach bank group which are providing e-bankingservices. Total sample size is 768 which is equallydivided among the three bank branches. The customersof only three banks have been taken which hasexperience of at least three years.

Data was analyzed with the help of percentage,ranking, weightage average score (WAS) method. Therespondents were asked to respond on five-point

likerts scale i.e. highly dissatisfied, dissatisfied,undecided, satisfied, highly satisfied regarding variousstatements. Weights of 2, 1, 0,-1,-2 were assigned tothese levels of scale respectively for calculating theweightage average score. On the other hand, for thepurpose of ranking, the following step-by-step methodhas been followed.

First Step: Firstly, in respect of some comparativeissues, the number of times factor occupied the 1st,2nd nth rank were computed in terms offrequency.

Second Step: Weights are assigned to each rank in the

descending order. Weightage pattern was as: ISTrank-3, 2nd rank-2 and 3rd rank-1.

Third Step: The sum of the above given weights, forall the ranks were calculated which is denoted in theabove step.

Fourth Step: Overall ranks were assigned on the basisof total score values for each factor calculated in theabove step.

Database

Field Survey Results

Findings

Socio-Economic Profile of the Bank Customers

In table 1 total sample of customers 768 is equallydivided into public, private and foreign banks. Amongcustomers the maximum are male. The maximum



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Now-a-days customers prefers e-deliverychannels because these channels are very cheap, timesaving and easy available. Table 2 also exhibits that

the most preferred e-delivery channel by customers isATM because it is easily available and very convenient.Second preference is given to credit cards. Leastpreferred e-channels by customers are Tele-banking,smart cards, M-banking, I-banking and debit cards.

ATM-Customers Perception

ATM is the most popular e-delivery channel in thebanking indust ry. In the present sc enario ofinformation technology satisfaction or delightednessis the prime aim of the banking industry. Table 3 showsthe customers perception about the use of ATM.

Survey shows that overall, 62.24 pc customers arehighly satisfied and 36.20 pc are satisfied among allthe three bank groups. The maximum customers ofIndian private sector banks are highly satisfied. Chi-sq test highlights that there is a significant differenceat 1% LOS in the responses of respondents from threebank groups. WAS of all the three bank groups is above1 which shows that customers of these bank groupsare satisfied from the service of ATM. Sex wise, femalesare more satisfied. Occupation wise, professionals andagriculturalist are highly satisfied. Age wise, youngpeople are more satisfied.

Overall, there is a significant difference in theopinion of the customers of private and foreign bankgroups and statistically this difference is alsosignificant at 5% LOS.

Dr. R.K. Uppal

Table 1Socio-Economic Profile of Customers

Group Number %

1. Public 256 33.33

2. Private 256 33.33

3. Foriegn 256 33.33

1. Male 516 67.19

2. Female 252 32.81

1. High School 48 6.25

2. Graduate 294 38.28

3. Post-Grad 372 48.44

4. Doctrate 54 7.03

1. Service 414 53.91

2. Business 138 17.97

3. Industry 52 6.77

4. Agriculture 18 2.34

5. Professional 82 10.68

6. Others 64 8.33

1. Upto 1 lac 178 23.18

2. 1-2 lac 270 35.16

3. Above 2 lac 320 41.66

1. Upto 25 314 40.89

2. 26-35 244 31.77

3. 36-45 138 17.97

4. Above 45 72 9.37

Total 768 100.00

Table 2Ranking

e-channels Total Score Rank

ATM 5024 1

Credit Card 3564 2Debit Card 3284 3

M-banking 2790 5

I-banking 3140 4

Tele-banking 1778 7

Smart Card 1902 6

Source: Field Survey Results

customers are post-graduates and belong to serviceclass. 40.89 pc customers are under 25 years. The levelof income affects the thinking of the customers. In thepresent survey, 41.66 pc customers have income above2 laces.


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Credit Cards-Customers Perception

The customers need not carry any cash andempowered to spend wherever and whenever he

wants with his credit. Whenever a person uses the card,the merchant who in turn can get the moneytransferred to his account from the banks to buyer.Table 4 depicts the opinion of customers about theperformance of credit card. Overall, 30.73 pc are highlysatisfied and 48.96 pc are satisfied from the use of creditcard among all the three bank groups. Majority ofcustomers are from private sector banks. Chi-sq test

shows the significant difference in the opinion of thecustomers among all the three bank groups at 5% LOS.WAS of public and private sector banks are above 1which indicates that customers of these bank groupsare satisfied from the service of credit card. Sex wise,females are highly satisfied i.e. 36.51 pc. Occupationwise, highly satisfied customers are the maximumfrom business class. On the basis of age, old age personare more satisfied.

Overall, there is a insignificant difference in theopinion of the customers of all the three bank groups.


Table 3ATM-Customers Perceptions

Group HDS% DS% UDC% SFD% HS% WAS Chi-test

Bank Type

1. Public 0.78 35.94 63.28 1.62 Chi^2=30.10**2. Private 28.91 71.09 1.713. Foreign 0.78 2.34 0.78 43.75 52.34 1.45

Gender1. Male 1.16 0.39 39.53 58.91 1.56 Chi^2=12.92*2. Female 0.79 0.79 29.37 69.05 1.65

Occupation1. Service 0.48 0.97 0.48 42.03 56.04 1.52 Chi^2=31.58*2. Business 1.45 26.09 72.46 1.703. Industry 30.77 69.23 1.694. Agriculture 22.22 77.78 1.785. Professional 21.95 75.61 1.71

6. Others 46.88 53.12 1.53Present Age (yrs)1. Upto 25 1.27 34.39 64.33 1.62 Chi^2=24.03*2. 26-35 0.82 36.07 63.11 1.613. 36-45 2.90 1.45 36.23 59.42 1.524. Above 45 44.44 55.56 1.56

Total 0.26 1.04 0.26 36.20 62.24 1.59

Significance of difference of proportions:

1. Public Banks 2. Private Banks 3. Foreign Banks

Comparison P1 P2 Stat. Signi.

1 vs. 2 0.99 1.00 1.42

1 vs. 3 0.99 0.96 2.34 *

2 vs. 3 1.00 0.96 3.19 **

Source: Field Sur

technia journal april sept 09

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