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Srm Digest 2010

Srm Digest 2010

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Sections

  • PARTNERSHIP E- RETAILING MODEL FOR INDIAN RURAL MARKET
  • EMERGENCE AND SPREAD OF RETAILING
  • DEVELOPING E-TAILING STRATEGIES FOR THE FUTURE
  • ROLE OF E – BANKING SERVICES IN THE BANKING SECTOR
  • CUSTOMER RELATIONSHIP MANAGEMENT IN INDIAN RETAIL
  • E-RETAILING: ATTRIBUTES AND SECURITY CONCERNS
  • A STUDY ON MEASURING SERVICE QUALITY IN SUPERMARKET
  • BUSINESS VALUE OF IT
  • KNOWLEDGE MANAGEMENT VISTA: KEY DRIVERS
  • QUALITY OF WORK LIFE (QWL) IN IT SECTOR – INDIAN SCENARIO
  • HOW TO MANAGE WORKPLACE EMOTIONS – AN EMPIRICAL STUDY
  • EMERGING TREND IN INDIAN PHARMACEUTICAL RETAIL SECTOR

SRM MANAGEMENT DIGEST - 2010

April - 2010 Editor
Prof. Dr. R. Velu
SRM School of Management SRM University Email:rvallimanalan@yahoo.co.in Mobile: 09884091724 Hello Readers, I am very happy to inform you that this present SRM Management Digest – 2010 carries intensive and inspiring research articles of the “International Conference on Retail Excellence – 2009”. This conference was conducted in SRM University from December 22 to 24, 2009 with overwhelming response from the academic community and corporate leaders. A number of research scholars, subject experts and corporate executives attended and presented thought-provoking research articles on the topic of “Retail Excellence” with different approaches from various business schools across the world. Undoubtedly, it can be observed by the modern businessmen that growth of retail business is an integral part of the growth of world business. To an extent the retail business evolves with the various factors of the micro as well as the macro environment to take –off the main business to usher in the stage of steady state economy. However, the research scholars, subject experts and corporate executives indicated that a number of cultural, social, political, economical and technological problems have emerged as barriers to the growth and development of retail business at the present moment. With well tested business strategies, policies and tactics the problems of retail business can be overcome. The research articles of the conference explored the problems of retail business and contributed sound suggestions and recommendations as well, to systematically develop the retail sector globally. With the contributions from the creative and innovative minds, the object of the conference would be fulfilled only when further research is initiated in this direction. Growth of retail business in a country would certainly accelerate the economic growth and propel the nation to higher strata of development, more specifically rewarding all the participants in the retail business. Editor

Volume: 8
EDITORIAL

ISSN 0973-6905

Associate Editor
Prof. Oliver Linton London School of Economics

SRM MANAGEMENT DIGEST
Volume: 8, April 2010 Annual Blind Referred Digest of SRM School of Management ISSN 0973-6905

Editor

Dr. Velu
© 2010 by SRM School of Management SRM Nagar, Kattankulathur - 603 203 Kancheepuram District, Tamil Nadu, India

© All right reserved

A Note to Readers: The views expressed in articles are the author’s and not necessarily those of SRM Management Digest, SRM School of Management or SRM University, Authors may have consulting or other business relationship with the companies discuss. All right reserved. No part of the publication may be reproduced or copies in any form by any means without prior written permission. The articles originally published in other magazines / journals are reprinted with permission.

Published by SRM School of Management SRM University SRM Nagar, Kattankulathur - 603 203 Kancheepuram District, Tamil Nadu, India

SRM MANAGEMENT DIGEST - 2010
April - 2010 Volume: 8 ISSN 0973-6905

Chief Editor

E D I T O R I A L B O A R D

Dr. R. Velu Economics

Associate Editor
Dr. Oliver Linton London School of Economics

Referees
Dr. Jayashree Suresh Dean, Strategic Business Management Dr. R. Krishnaraj General Management Dr. T. Ramachandran Financial Management Dr. Ravi Lochanan Operations Management Dr. A. Chandra Mohan Human Resources Management Dr. Shanthi Venkatesh Marketing Management

SRM Management Digest - 2010

4

Sheela Rani GROWTH.R. Salma Ahmed ROLE OF E – BANKING SERVICES IN THE BANKING SECTOR Ms.Prof. Rajamani.DuraiKannan.H.RETAILING MODEL FOR INDIAN RURAL MARKET Mr.Krishnan CUSTOMER RELATIONSHIP MANAGEMENT IN INDIAN RETAIL Anupama. Sampath DETERMINANTS OF CUSTOMER LOYALTY IN LEADING RETAIL SUPERMARKETS IN UNITED KINGDOM: AN EXPLORATORY STUDY Mr. Leela Prapurna E-RETAILING: ATTRIBUTES AND SECURITY CONCERNS Mr. A. Dr.Vasanthakumari. Dr.L. Salma Ahmed A STUDY ON MEASURING SERVICE QUALITY IN SUPERMARKET Ms. Balasundaram Nimalathasan RETAIL MANAGEMENT ATTITUDES AND ITS IMPACT ON INTERNEES’ PERFORMANCE: A STUDY ON SELECTED RETAIL ENTERPRISES IN BANGLADESH Ramiah Kumar Gandhi. K.5 SRM Management Digest . Rajasekaran EMERGENCE AND SPREAD OF RETAILING Mr. D. V.C. Dr. Balasundaram Nimalathasan 7 20 25 30 37 43 51 58 67 77 83 95 107 . Deepak Mittal PARTNERSHIP E. Dr. Mr.R. B. Sukanya Hegde DEVELOPING E-TAILING STRATEGIES FOR THE FUTURE Saif Sami. CHALLENGES AND TECHNOLOGY IN RETAILING –AN INDIAN PERSPECTIVE A. R. Ramachandran EMERGING TRENDS AND OPPORTUNITIES IN RETAILING SECTOR –A STUDY A. Subramaniam PROSPECTS/ PROBLEMS/EMERGING TRENDS: ORGANISED RETAILING VS UNORGANISED RETAILING Mr. Dr. Ramiah Kumar Gandhi Mr.2010 CONTENTS AN APPLICATION OF CLUSTER ANALYSIS TO IDENTIFY COUNTRIES WITH SIMILAR MEDICAL FACILITIES Dr Usha Ananthakumar. Velummailum Gobiraj Mr. Saleem Hadi . Suresh. B. Mohammed Abu Taher. S.Sairam Subramaniam.

Dr. Prof. P. Mu. Sugumaran. Mr. IMPACT OF BANK CREDIT ON RURAL POOR – WITH SPECIAL REFERENCE TO PUBLIC SECTOR BANKS Dr. V. L. M.S. Dr. Chandirakala EFFECTIVENESS OF MICROFINANCE INDUSTRY AGAINST THE BACKDROP OF GLOBAL RECESSION Mr. G. Chitra. V.Vanjikovan. Mylesh Raju.Subrahmanian. S.R. N.SRM Management Digest . Kannan HOW TO MANAGE WORKPLACE EMOTIONS – AN EMPIRICAL STUDY Ms. Mir Irfan Ul Haq. Sunil Chouhan EFFECTIVENESS OF IMPACT OF ORGANIZATIONAL CLIMATE IN THE ORGANIZATIONS Mr. R.J. D.. Arun Kumar. Hemanth kumar. 116 120 125 134 144 150 156 165 170 175 183 191 195 . Ramesh BUSINESS VALUE OF IT Dr. Dr. V. Muthu. Dr.2010 6 DYNAMISM OF RETAILING BUSINESS AND ECONOMIC DEVELOPMENT – AN INDIAN PERSPECTIVE V. Suresh Mallya ACADEMICIANS’ PERCEPTION TOWARDS LEARNING ORGANIZATION: A COMPARATIVE STUDY Dr. D. Sukumaran. Mr S. Dr.S. Mr. G.Krishnaraj AN EMPIRICAL STUDY: INFLUENCE OF SERVICE QUALITY ON ATTITUDINAL LOYALTY IN RETAIL BANKING Mr.Mahalingam & Mr M. Premchand Babu. Radha Ganeshkumar. Arivazhagan ECONOMIC SLOWDOWN: MOUNTING PRESSURES AND ANGER MANAGEMENT IN WORK PLACES-AN ANALYSIS Dr. B. Madana Mohan.Sheeja. Mahalakshmi EMERGING TREND IN INDIAN PHARMACEUTICAL RETAIL SECTOR Ms. Lakshmi Vishnu Murthy Tunuguntla KNOWLEDGE MANAGEMENT VISTA: KEY DRIVERS Dr. Dr. R. Mr.Padmini QUALITY OF WORK LIFE (QWL) IN IT SECTOR – INDIAN SCENARIO Mr. Tamil Mani. Dr. Babita Agarwal. Mr. Premchand Babu THE ROLE OF HUMAN RESOURCE ACCOUNTING IN HUMAN RESOURCE MANAGEMENT Dr. P.

new product development and selection of test markets. though not previously evident. medicine. bars. total chapati scores and overall quality characteristics. Five attributes were identified namely Screen Size. etc) into groups. marketing and many others. engineering sciences. SJMSOM. The sources of food include restaurants. events. product positioning. behavioral sciences. memory. It helps find groupings amongst different species based on the desired attributes. Market researchers use cluster analysis to partition the general population of consumers into market segments and to better understand the relationships between different groups of consumers/potential customers. price. The technique was applied to six study species within a 50-ha forest census in peninsular Malaysia. They were named home cookers. Cluster Analysis finds application in various disciplines like life sciences. M. Some of the applications that give a flavor of the usage of cluster analysis across varied fields are mentioned below. factors increasing productivity in one area as compared to other and so on. Lonial. Cluster analysis is widely used in market research when working with multivariate data from surveys and test panels. Menezes and Zaim (2000) used cluster analysis to recognize the product benefit related market segments for personal computers. Butt. things. carry outs. Cluster analysis finds prominence in the field of Horticulture/Agriculture because of the large number of plant species and also varieties of hybrid seeds.2010 AN APPLICATION OF CLUSTER ANALYSIS TO IDENTIFY COUNTRIES WITH SIMILAR MEDICAL FACILITIES Dr Usha Ananthakumar Associate Professor. office goers etc. Its objective is to sort cases (people. IIT Bombay Deepak Mittal. IIT Bombay 1. It . Anjum. Carlson. Mgt passed out student. van Zuilichem and Ahmad (2002) applied cluster analysis for classification of quality of spring wheats. It reveals associations and structure in data which. The variables were total bread scores. So the results allow for selection of different end use and classification of similar cultivars. policy sciences. Introduction Cluster analysis is an exploratory data analysis tool for solving classification problems. stores. Detailed account of Cluster analysis can be found in Anderberg (1973) and Everitt. and Lesse (2001). Plotkin. hard disk drive and processor chip. The 81 participating students were formed into clusters on the basis of the similarities in their preferences for the five product attributes. Landau. earth sciences. nevertheless are sensible and useful once found. Nine clusters were formed based on similarity of the source of food. SJMSOM.7 SRM Management Digest . However distinction exists in case of scores taken independently for bread or chapatti scores. or clusters. Chave and Ashton (2002) applied Cluster analysis to identify Spatial Patterns in Malaysian Tree Species. In agriculture it helps find the right kind of crop for the right area. Kinsey and Nadav (2002) performed cluster analysis to group consumers based on where they obtained their food from. 3 clusters were identified showing differential preference for different attributes. Density based method was used for clustering. home grown food etc. Data was taken for 5589 individuals in 2540 households in the US. technology. The broad areas where cluster analysis finds merit in marketing research are segmentation of the market and determination of target markets. In total scores most cultivars fall into the same group. so that the degree of association is strong between members of the same cluster and weak between members of different clusters. cafeterias. based on where they got their food from. Recently.

average linkage. Single linkage method was avoided due to chaining effects whereas centroid method suffered from reversals. The current study is done with the objective of identifying countries with similar medical facilities across the globe. Thus. As new techniques and methods are developed in cluster analysis. non athletic group (21%). A sample of 156 students was analyzed using Ward’s hierarchical method. Thus cluster sizes exhibited equilibrium and non equilibrium behavior depending on species life history. storms etc.int. The software used for the analysis was SAS version 9 for Windows.SRM Management Digest . the data was standardized to zero mean and unit variance using within group standard deviations. cluster analysis is a tool of statistical analysis that has applications across various fields in innumerable ways. The data for the study was finally taken for 190 countries as the data for 3 countries was not complete.2010 8 was found that the distribution of trees in clusters varied according to species because of different tree diameters. Application of clustering to psychology helps understand human behavior. 2. The data was taken from a study conducted by WHO in which 193 countries had been surveyed to obtain a measure of the medical facilities in those countries with respect to certain variables. the analysis was carried out continent wise to gain closer look at each of the continents and later were analysed as a whole for the entire world to gain overall insight of the problem.1 North America This section explains in detail the clustering procedure for the North American continent. verbal group (9%). complete linkage and Ward’s method were used to analyse the data. Cluster analysis is used to cluster diseases. who. Different methods were used as it is best to validate the consistency of the results of cluster analysis using different approaches. into genres. Cross and Adams (2001) applied cluster analysis to determine the psychological makeup of academically gifted students who are admitted to and leave home to attend a residential school. cures for diseases or symptoms of diseases and thus offers useful results in the field of medicine. Another common application is the division of documents. namely. Three different methods of hierarchical clustering methods. such as World Wide Web pages. social focus (18%). 2. it is crucial to know the health standards of a particular country in relation to other countries in order to initiate appropriate steps to improve the standards of the country. As the data comprises 190 countries. This is a means to understand the thinking of people. Data Analysis The data was obtained from http://www. the range of applications is also expected to witness a substantial increase in the future. and non spiritual/religious group (14%). The variables for the study are defined in Table 1. It is also used to cluster weather data to identify similar areas and time periods in respect to weather phenomenon. Results indicated six different cluster groups that were described as mathematics focus (21%). The total number of observations or the number of . For the development of any country. low overall self-concept group (16%). This is particularly significant in forecasting dangerous weather situations like fog. Since the variables were all measured on different scales. Dixon. The number of variables was reduced to 20 and the variables relating to demographics that were not part of the main study were left out. It helps the psychologists to analyze groups of people and understand the reasons behind their particular behavior or problem. The outputs of cluster analysis for various continents and for the entire world are discussed in the following subsections. Clustering is used for Data mining applications that involve partitioning data items into related subsets. the official website of the World Health Organization.

It The above results are used to relate the medical facilities with the socio-economic factors namely. 4 compares the clusters on 3 other factors namely. 2. However. Cluster 3 has very poor figures. The medical facilities are better with the increase in GDP. In case of average linkage there is a shift of two observations from cluster 3 to cluster 2. In Fig. cluster 1 is characterized by higher urbanization and lower values of PBPL. Fig. The plots for the same were obtained versus the number of clusters. Cluster 2 is clearly the best of the lot with facilities way above the world averages and the other clusters. 1 are for the average linkage method.3 Oceanic The total number of countries was 16 and the number of clusters formed was 3. In the first step the values for pseudo F statistic and t2 were obtained for the last 15 steps. Percentage of population below poverty line (PBPL). the inclusion of Haiti in our analysis helped identify it as a third world country with regards to medical facilities. The results obtained using the Ward method and the complete linkage method were exactly the same with the same countries falling in the same clusters. A comparison of certain facts of these clusters along with that of world data is given in Table 5. GDP. The same data when applied to complete linkage or the ward method yielded the same number of clusters i. The names of the countries and their respective clusters are shown in Table 2.9 SRM Management Digest . This is obvious with cluster 1 showing medium values and . Plot that compares the clusters on GDP is given in Fig. urbanization rate and population below poverty line. Next the dendrogram was developed and the output obtained for 3 clusters is given in Fig. They show higher urbanization and low values of PBPL for cluster 2 that are factors accounting for its better facilities.e. Cluster 3 shows very poor facilities that are much below those of the world average also and can be thus considered a third world country. It is pertinent to note here that the cluster 3 that has only one country has statistics that are way apart from the other two countries and can thus be considered as an outlier. This may not be the case with all the continents where there might be some minor variations. Although it is clear that for North America literacy is more or less constant across nations. The pseudo F statistic peaks at 3 and t2 shows a sharp drop at 3. The mortality rates are quite less for this continent as a whole considering the fact that the other figures are quite close to the world average.The results for the ward and complete linkage method are exactly the same. The exception here is that of serial no 22 i. That leaves us with two main clusters. The results shown in Fig. 2. Cluster 1 stands out in all parameters compared to the other clusters or the world average.e. 2. Hence the right numbers of clusters are 3. literacy rates. 3.2010 countries was 23. 3. Table 7 gives a comparison of these clusters with that of the world data.2 South America The results of the cluster analysis study for South America gave exactly similar results to the three methods applied. Clusters 1 and 2 are different only in terms of the mortality rates and number of medical personnel. Although literacy rates remain the same. 2. cluster 3 showing the lowest. the two important things that come from this plot are those marked in the boxes. Literacy rate and Urbanization rate. The clusters that emerge are given in Table 4. Comparing some of the facts of the clusters obtained with each other and to the whole world the figures given in Table 3 are obtained. all the countries are clustered into one single cluster as is the case with the hierarchical clustering. The dendrogram shows the clusters in the sequence of their formation. The clusters that emerge from this analysis are given in Table 6. This helped in determining the number of clusters. Cuba which despite a very low GDP figures in the top cluster. It can be inferred that a higher GDP can be the reason for the better overall facilities in cluster 1. There were no deviations for the 12 observations in the cluster formation in all the three cases and the number of clusters obtained was 2.

Cluster 2 in Asia has the best facilities. ward method that gave 4 clusters shows more well separated clusters as compared to the other methods in case of Africa.6 Africa Although average and complete method gave results. Urbanization was also very low for Niue but it still figures in the cluster with the best facilities. The output is shown in Table 10. Observations • 32 out of 39 European countries are in cluster 3 i. 2. Cluster 1 or Afghanistan shows very poor figures. Cluster 1 exhibits the best values for GDP and very low values of PBPL as compared to others. A comparison of the information of these clusters with that of the world data is given in Table 9. this can be because most of these nations are developing nations. it is clear that the entire African continent shows values that are below the world averages. Cluster 3 has lower values of literacy though the difference in urbanization is not much profound. namely Afghanistan in terms of medical facilities in Cluster 1. it is evident that Asian countries have lesser government expenses on health. It identifies one of poorest nations. With regard to GDP. Average method gave four clusters with cluster 3 and cluster 4 having just one observation each. The urbanization was slightly more for cluster 2 though the difference was miniscule. This can be understood from the fact that the general living conditions in Europe are good. 2. 2. This can be explained from the fact that Niue is the least populated country of the sample with a population of just 1000. From Table 15. However. From Table 13. From Table 11. The list of countries in various clusters is given in Table 12.7 Comparison with World data Cluster analysis applied to the entire data of 190 countries suggested 2 clusters by average and complete linkage method and 3 clusters by ward method. Further the European countries showed a uniform value for literacy and urbanization rates with above 98.4 Europe Complete and ward method gave two clusters with similar results. it follows that Cluster 1 represents the countries that are below the world average and Cluster 2 is at par with the average values of the world whereas cluster 3 is above it. cluster 1 emerges as the one with the best facilities. For Europe both the clusters have values better than the world average which shows that this continent is better than other nations even on the global level. it can be observed that the facilities of Equatorial Guinea are way below the other countries. They are USA. Cluster 2 and 3 are marked by poor values of GDP except for Equatorial Guinea in Cluster 2 that has very high GDP figure. The list of countries falling in different clusters is given in Table 8.e. Cluster 2 has slightly better figures than cluster 1. Although the overall GDP figures for Europe are quite high there is a progressive increase as one moves from cluster 1 to cluster 2. In general Asia is mostly below the world averages.2010 10 can be seen that Cluster 1 has high GDP figures with the exception of Niue. 82% of the total wEuropean continent • Only 3 countries of North America out of a total of 23 countries are in cluster 3.5 Asia Both ward and complete method gave two clusters and average method gave 3 clusters with one of the clusters having just one observation which is an outlier. Within Africa.SRM Management Digest . Cluster 4 also shows some good figures. Since it was more helpful to divide the data into 3 clusters the ward method was used and the list of countries falling into various clusters is given in Table 14. 2. . high fluctuations are seen in these countries but the median and the high values belong to cluster 2.5% literacy for most of the countries. The level of literacy and average level of urbanization is also higher for this cluster. Cluster 1 and cluster 4 have comparatively lesser number of observations as compared to cluster 2 and 3. Canada and Cuba.

No. 30% in cluster 1. 47 % of Asian countries also fall in this cluster.e.66 % of South America countries (11 out of • 12) fall in cluster 2. 91.11 SRM Management Digest .2010 • • • For cluster 1 Africa constitutes 73 % and Asia is 23 % 85% of Africa falls into cluster 1 whereas the rest of it is in cluster 2. expense immunization coverage as % 1 yr olds (measles) immunization coverage as % 1 yr olds (DTP3) immunization coverage as % 1 yr olds (HepB3) tb detection rate as % of total cases tb success rate as % of total cases tb new cases per 10000 population new borns with low weight as % of total births maternal mortality ratio per 10000 live births adult mortality rate b/w 15-60 years per 10000 population under 5 years mortality rate per 10000 live births under 28 days mortality rate per 10000 live births Life expectancy at birth in years healthy life expectancy at birth in years Births attended by skilled personnel as % of total births . expense on health as % of total Govt. 47% in cluster 2 and 23% in cluster 1. Table 1 Variable Definition S. Asia is the only continent spread uniformly across the three clusters i. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Variable P1 P2 P3 P4 P5 P6 P7 P8 P9 P10 P11 P12 P13 P14 P15 P16 P17 P18 P19 P20 Variable Definition no of physicians per 10000 of population no of nurses/midwives per 10000 of population no of health workers per 10000 of population no of hospital beds per 10000 of population total expense on health as % of GDP Govt.

2010 12 Table 2: Clusters of North American continent Cluster 1 Antigua and Barbuda Dominica Barbados Bahamas Grenada Saint Kitts and Nevis Saint Vincent and the Grenadines Trinidad and Tobago Belize EI Salvador Honduras Nicaragua Dominican Republic Guatemala Costa Rica Panama Mexico Jamaica Saint Lucia Field Survey : 2010 Cluster 2 Canada United States of America Cuba Cluster 3 Haiti Table 3: Comparison of cluster information of North America with the world data Cluster number Cluster 1 Cluster 2 Cluster 3 World Average number Average of medical government personnel / expenses beds per 10000 (%) population 21.04 68.7 74.33 Field Survey : 2010 Table 4: Clusters of South American continent Cluster 1 Argentina Uruguay Chile Venezuela Bolivia Guyana Brazil Colombia Paraguay Ecuador Peru Suriname Cluster 2 Field Survey : 2010 .6 3.73 368.25 833.4 61. HepB3) % 1 yr olds 85.6 Average mortality rates per 10000 population 542.44 50.07 Average life expectancy in years 66.66 81.8 13.91 1443.8 32 8.SRM Management Digest . DTP3.45 10.8 15.44 Immunization coverage (measles.57 92.01 48.

12 24.44 70.33 Table 6: Clusters of Oceanic countries Cluster 1 Australia New Zealand Niue Cook Islands Samoa Tonga Fiji Micronesia (Federated States of) Solomon Islands Palau Kiribati Marshall Islands Tuvalu Field Survey : 2010 Table 7: Comparison of cluster information of Oceanic countries with the world data Cluster 2 Nauru Vanuatu Papua New Guinea Cluster 3 Cluster number Average number of medical personnel / beds per 10000 population 77.33 .87 9.6 Average mortality rates per 10000 population 377.32 61.71 8.45 8. HepB3) % 1 yr olds 87.5 64 61.43 8.56 18.2010 Table 5: Comparison of cluster information of South America with the world data Cluster number Average number of medical personnel / beds per 10000 population Average government expenses (%) Immunization coverage (measles. DTP3.6 Average mortality rates per 10000 population 315.07 Average life expectancy in years Cluster 1 22.22 670.48 637.22 91.58 900.7 81.44 Immunization coverage (measles.07 Average life expectancy in years Cluster 1 Cluster 2 Cluster 3 World Field Survey : 2010 72. HepB3) % 1 yr olds 91.25 833.61 59.42 World 32 Field Survey : 2010 8.93 32 Average government expenses (%) 12.8 8.48 62.16 83. DTP3.12 Cluster 2 13.13 SRM Management Digest .5 833.4 56 81.

74 11.6 67. DTP3.95 236.44 93.31 81.84 74.28 32 Average government expenses (%) Immunization coverage (measles.66 8.SRM Management Digest .5 833.07 Average life expectancy in years Cluster 1 Cluster 2 World Field Survey : 2010 8.03 61.26 75.43 87.33 .2010 14 Table 8: Clusters of European continent Cluster 1 Albania Bosnia and Herzegovina Serbia and Montenegro Republic of Moldova Romania Belarus Russian Federation Estonia Lithuania Latvia Ukraine Bulgaria Poland Slovakia The former Yugoslav Republic of Macedonia Czech Republic Hungary Andorra Austria Belgium Croatia Denmark Slovenia Portugal Spain France Luxembourg Switzerland United Kingdom Germany Iceland Netherlands Sweden Greece Italy Malta Finland Ireland Norway Field Survey : 2010 Table 9: Comparison of cluster information of Europe with the world data Cluster 2 Cluster number Average number of medical personnel / beds per 10000 population 66. HepB3) % 1 yr olds Average mortality rates per 10000 population 521.

5 66.8 8. DTP3.5 6.78 61.33 .8 5.44 38.07 Average life expectancy in years Cluster 1 3.7 56.77 69. HepB3) % 1 yr olds 48.58 986.5 510.9 833.24 Cluster 3 10.73 81.2010 Table 10: Clusters of Asian continent Cluster 1 Afghanistan Armenia Qatar Saudi Arabia United Arab Emirates Republic of Korea Singapore Bahrain Oman Iran (Islamic Republic of) Syrian Arab Republic China Viet Nam Malaysia Sri Lanka Thailand Brunei Darussalam Field Survey : 2010 Table 11: Comparison of cluster information of Asia with the world data Cluster 2 Turkey Cyprus Israel Jordan Lebanon Kuwait Azerbaijan Uzbekistan Kazakhstan Kyrgystan Turkmenistan Mongolia Tajikistan Cluster 3 Bangladesh India Yemen Pakistan Nepal Lao People’s Democratic Republic Iraq Myanmar Indonesia Philippines Bhutan Maldives Cambodia Democratic People’s Timor-Leste Republic of Korea Georgia Japan Cluster number Average number of medical personnel / beds per 10000 population Average government expenses (%) Immunization coverage (measles.6 92.02 Cluster 2 42.52 World 32 Field Survey : 2010 15.6 Average mortality rates per 10000 population 2037.15 SRM Management Digest .

54 3.37 77.6 1578.38 833.33 .9 5.03 8.33 Table 14: Comparison of cluster information of all countries with the world data Cluster number Average number of medical personnel / beds per 10000 population 6.87 47.07 Average life expectancy in years Cluster 1 Cluster 2 Cluster 3 Cluster 4 World Field Survey : 2010 5.07 47.1 1577 2246. DTP3. HepB3) % 1 yr olds Average mortality rates per 10000 population Average life expectancy in years Cluster 1 Cluster 2 Cluster 3 World Field Survey : 2010 7.87 8.37 71.44 66. HepB3) % 1 yr olds 89. DTP3.7 833.61 61.7 61.44 65.18 44.2 8.91 25.04 407.61 3.22 38.SRM Management Digest .21 82.4 530.39 1694.29 54.37 81.23 66.46 90.35 10.24 32 Average government expenses (%) Immunization coverage (measles.6 Average mortality rates per 10000 population 500.24 70.2010 16 Table 12: Clusters of African continent Cluster 1 Algeria Tunisia Morocco Cape Verde Mauritius Egypt Libyan Arab Jamahiriya Angola Burundi Sierra Leone Burkina Faso Mali Guinea-Bissau Chad Cluster 2 Mauritania Ethiopia Guinea Cameroon Senegal Congo Equatorial Guinea Cluster 3 Benin Gambia Sao Tome and Principe Djibouti Ghana Kenya Uganda Cluster 4 Botswana Swaziland Lesotho Zimbabwe Zambia Nambia South Africa Table 13: Comparison of cluster information of Africa with the world data Cluster number Average number of medical personnel / beds per 10000 population 26.56 88.76 81.93 32 Average government expenses (%) Immunization coverage (measles.08 8.76 9.62 15.

number of clusters Name of Observation or Cluster Cluster 1 Cluster 2 Cluster 3 R-Squared Fig 2 : Dendrogram of countries in North American continent .17 SRM Management Digest .2010 Pseudo F Statistic 12 11 10 9 8 7 6 5 4 3 2 1 0 10 Number of Clusters PLOT Pseudo F Statistic Pseudo T-Squared Statistic 20 30 Fig 1 : Plot of pseudo F statistic and t2 statistic vs.

2010 18 Cluster 2 GDP per capita US $ Cluster 2 Cluster 3 3.SRM Management Digest . literacy rate and urbanization rate vs countries of North American continent . 4. Plot of GDP vs. Plot of PBPL. countries of North American Continent Fig.

Literacy rates. and Zaim.D. 160(5).. L. Academic Press New York 2.S. • 2 Countries. Cross.B. 101-106 3. S. Vol. Vol. Dixon.19 SRM Management Digest . W. USA. Oxford University Press New York 6.. Johnson. Landau. D. (2002) ‘Classification of Quality of Spring Wheats by Cluster Analysis’. there are 2 exceptions. above average.C. M. A benchmarking exercise can help governments in adopting best practices being followed in providing health care.e. M. (2001) ‘Psychological Characteristics of Academically Gifted Students in a Residential Setting: A Cluster Analysis’. Government agencies. Kinsey. (i.. 8. (2002) ‘Consumer’s Retail Source of Food: A Cluster Analysis’.M. namely Haiti and Afghanistan were identified as having the poorest facilities. that of Niue and Equatorial Guinea. 19-37. F. Urbanization rate and Population below poverty line. 14 (2).. (2000) ‘Identifying Purchase Driving Attributes and Market Segments for PCs Using Conjoint and Cluster Analysis’. Journal of Economic and Social Research. (2003) Applied Multivariate Statistical Analysis.J. and Ashton.... 11-20 4. This segmentation may further be used to draw out comparisons and identify key focus areas..J. and Nadav. pp. (1992) Applied Multivariate Statistical Analysis. average and below average medical facilities. Asia was the only continent to be spread uniformly across the three clusters. Literacy rates etc. References 1.A. 7. other international medical organizations like Red Cross etc.A.. and Adams.. Family Economics And Nutrition Review.. (1973) Cluster Analysis for Applications. pp. 2. and Wichern. Vol. World Bank.W.J. This can be used by organizations like WHO. Springer.. and Lesse.F. Anjum. they emerged as outliers) • Europe emerged as the continent with the best facilities whereas Africa was the worst. However. and Simar. The results of this study are summarized below: • The results of the cluster formation were similar for different methods used. • The medical facilities in the countries show a relation with the socio-economic factors like GDP.2010 3. Butt. Carlson. pp.M. Hardle..A. Chave. Prentice – Hall. 37.B. 9.L. The American Naturalist. pp. 433-445 5. Vol. R.J. • In general the countries can be divided into three clusters. 626-644 . pp. Plotkin.P. Everitt.C. D...S. and Ahmad. (2002) ‘Cluster Analysis of Spatial Patterns in Malaysian Tree Species’. N.J.I.S. International Journal of Food Science and Technology. Conclusions The clusters give an indication on the relative standings of the different countries/regions in terms of their medical facilties. to formulate policies regarding resource allocation. Psychology in the Schools. Fourth edition. (2001) Cluster Analysis. Lonial. This shows that there were natural clusters in the data. The study tried to relate the facilities with the socio-economic factors namely GDP.S.T.R. Vol. van Zuilichem.. Menezes.M. Anderberg. 38(5).

SRM Management Digest . 3. Different types of strategies need to be adopted. India offers a huge. etc. Rural consumers have diverse socioeconomic backwardness. It is only natural that rural markets form an important part of the total market of India.000 villages. Suresh. Rajasekaran Department of Management Studies Manonmaniam Sundaranar University. Mahamaza is leveraging technology and network marketing concepts to act as an aggregator and serve the rural markets.000 villages spread throughout the country. warehouses. B. penetration. Recent trends in rural retailing Multiple drivers leading to a consumption boom Favorable demographics Growth in income Socio economic changes Raising aspirations: Value added goods sales Food and agri. even in the rural markets.Tamil Nadu 1. Hence physical distribution becomes costly due to inadequate infrastructure facilities. 4. Rural retailing challenges The rural market of India is large and scattered in the sense that it consists of over 700 million consumers from 6. Two-thirds of countries consumers live in rural areas and almost half of the national income is generated from rural market.inputs retailing key drivers of growth ITC is experimenting with retailing through its e-Choupal and Choupal Sagar rural hyper markets. distances from nearest towns. Rural retailing Opportunities At present 85% of the organized retailing takes place in India’s urban areas. They do not prefer changes. accessibility. The infrastructure facilities like roads. Hence market coverage becomes the greatest challenge Nearly 60 % of the rural income is from agriculture.RETAILING MODEL FOR INDIAN RURAL MARKET R. Retailing is the final phase of the distribution channel and it is clear by now that it is distribution that drives growth in rural Indian markets. The paper highlights the challenges and opportunities in rural retailing and suggests a new model for rural distribution. Hence retailing will be significant and will undergo greater organization and maturity as is being witnessed in the urban markets . communication system. Innovative retail models which take into account the nuances of rural markets are the way forward. which can be sorted in different parameters such as literacy levels. 30. 2. income levels. But the good thing is that the retail focus has already shifted to the rural . HLL is using its Project Shakti initiative leveraging women self-help groups to explore the rural market. Tirunelveli. Research Scholar Department of Management Studies Manonmaniam Sundaranar University. Tamil Nadu Dr. Tirunelveli. sustainable and growing rural market which can be tapped effectively through innovative distribution channels with retailing being the most critical element of this strategy as it is the final touch point and the actual touch point with the customer which can be the most critical influence in the buying process. The demand pattern for products is mostly seasonal The rural consumer values old customs and tradition.2010 20 PARTNERSHIP E. and approximately 6. and financial facilities are inadequate in rural areas. Introduction The Indian rural market with its vast size and demand base offers great opportunities to marketers. India is classified in around 600 districts.30.

000. which helps its brands to reach the interiors of the rural market. Per square foot space is cheap in rural areas Low penetration rates in rural areas 5.This study mainly focuses on the distribution aspect in rural market. a subsidiary of Unilever. bullock-carts and even boats in the backwaters of Kerala. smaller distributors in adjoining areas. affordability. power problems. Apart from this to acquire further edge in distribution HUL started Project Shakti in partnership with Self Help groups of rural women. 6. who are based in the villages only. These distributors appoint and supply.2010 areas. To service remote village. India’s largest MNC. stockists use auto-rickshaws. Marketers must trade off the distribution cost with incremental market penetration. large number of daily wage earners. 700 million Indians may live in rural areas. Study on buying behaviour of rural consumer indicates that the rural retailers influences 35% of purchase occasions. Product availability is considered as the important challenge because of changing phase of rural demographics. LG has set up 45 area offices and 59 rural/remote area offices. The Indian rural market with its vast size and demand base offers the following opportunities to marketers: Infrastructure is improving rapidly In 50 years only. which considers rural India as a future growth driver. Percentage of BPL families declined from 46% to 27%. Rural literacy level improved from 36% to 59%. large distributors which who act as hubs. Over the years. 40% villages have been connected by road. every 1000+ pop is connected by STD. 30. once a week. Rural telephone density has gone up by 300% in the last 10 years. Some of the FMCG giants like HUL took out project streamline to significantly enhance the control on the rural supply chain through a network of rural sub-stockists. finding them is not easy. has evolved a hub and spoke distribution model to reach the villages. Therefore sheer product availability can affect decision of brand choice. seasonal consumption linked to harvests and festivals and special occasions.000 villages are spread over 3. the company depot supplies. To ensure full loads.2 million sq km. Any serious marketer must strive to reach at least 13. though only 44% rural homes have electric connections. it is an even greater challenge to regularly reach products to the far-flung villages. acute dependence on the vagaries of the monsoon. and inaccessibility to conventional advertising media. volumes and market share. The more daring MNCs are meeting the consequent challenges of availability. Existing Models of Rural Distribution HUL’s Project Shakti Project Shakti is HUL’s smart way of reaching 10 lakh homes directly in the villages where traditional distribution system cannot hope to enter through . LG Electronics defines all cities and towns other than the seven metros cities as rural and semi-urban market. More than 90% villages are electrified. However.21 SRM Management Digest . India’s 6. in next 10 years another 30% would be connected.113 villages with a population of more than 5. twice a week. has built a strong distribution system. acceptability and awareness (4 As). Challenges in Rural Distribution The rural market may be alluring but it is not without its problems: Low per capita disposable incomes that is half the urban disposable income. poor roads. Social indicators have improved a lot between 1981 and 2001 Number of “pucca” houses doubled from 22% to 41% and “kuccha” houses halved (41% to 23%). Hindustan Unilever. Coca-Cola. To tap these unexplored country markets. given the poor state of roads.

The Future Group has already acquired Godrej Aadhaar in 2008 from Godrej Agrovet. FMCG goods. The new model can be scaled up similar to ITC choupal sagar. but it should operate with lowcost. 8. three in Rajasthan and one in Haryana. pumping sets.2010 22 the use of Self Help Groups (SHGs). is a place where the rural consumer gets almost all of his requirements under one roof. Initial investment in each shopping is Rs 5crore (Rs 50 million).000 farmers live in this area.500-2. New e-business model for last mile distribution ITC Choupal sagar model can concentrate only to selected areas. warehouse space retail outlets taken on rent or lease. The company is now in the process of developing these outlets into a one-stop solution for all the needs of the rural population. each woman began serving 6 to 10 villages having population of 1000 to 2000. After three month training. 10. Each “Bazaar” operates in a catchment of about 20 km radius and approximately 15. apparel. On an average. a farmer’s Mall of ITC. the rural retail initiative of Godrej Agrovet Ltd. These SHGs were covered by three Mutually Aided Cooperative Thrift Societies (MACTS). retail banking to restaurants and much more are available in the Sagars.SRM Management Digest . grocery. multi-brand agriculture inputs. the expansion of such type of store becomes problem due to high setup cost. She would pocket different profit margin for each different sale. HUL selected a woman from an SHG as Shakti entrepreneur to start an enterprise with an initial loan from her SHG.. footwear to furniture. The project was started in 2001 in 50 villages involving women belonging to micro-credit SHG in the Nalgoda District of Andhra Pradesh. HUL delivered stocks at her door-step. low capital investment model without losing its corporate social responsibility. watches. From clothes. ITC’s Choupal Sagar Choupal Sagar. seeds to health care. assisted the women in getting micro-credit to set-up an enterprise to distribute HULs range of products. Aadhaar now functions as a retail store that provides inputs to farmers. They provide a complete range of good quality. Uttar Pradesh and Maharashtra. The Model becomes more viable due to .000 sq. The outlets can be setup as small-sized functional stores with an approximate area of 1. The Godrej Aadhaar brand has grown to a chain of 18 stores providing a host of services to farmers and their families within a year of setting up. it also sells FMCG and electronic products to the rural retail customer. kitchenware and home appliances to value-added services including banking. 7. 50 SHGs were selected. postal services pharmacy to be made available at these stores to ease the burden of the entire farmer community. Each MACTS had 14 to 15 SHGs under them. each centre is attracting 150-200 farmers a day. GODREJ Aadhaar GODREJ Aadhaar. home furnishings and consumer durables to automobiles to tractors. five in Punjab. she had to supply to village retailer as well as sell directly to consumers. access to modern retail banking and farm credit at reasonable rates of interest. Marketing & Research Team (MART). pesticides. fuel. The HUL project shakthi model can cater only at the micro level with limited product choice for the customers.ft. farm produce buyback opportunities and access to new markets. Godrej Aadhaar offers an array of services for rural house holds from the basic food. From there on. The new model can be developed by the participation of 100 to 150 Self Help Groups with the support of corporate. Each center provides help to improve the quality of agriculture in the area through 24×7 support by a team of qualified agronomists. Till now ITC is able to setup only 24 Choupal Sagars across Madhya Pradesh. 9. Hariyali Bazaar The first outlet came up at Del Pandarwa (near Shahjahanpur in Uttar Pradesh) in July 2002 and so far 15 “Hariyali Bazaars” have been set up: six in UP. HUL along with a social service organization..

education and women’s empowerment among others.000 to 25.…………. use of both the online as well as the offline channel. agriculture. many local communities have experienced that ICTs have increased bottom-up participation in the governance processes and may expand the reach and accessibility of government services and public infrastructure.2010 • Nature of the market • • • • the increase in number of SHGs in India.000. The total households covered by one distribution hub will range from 20. 12. Distribution channel: Distribution can be taken care with the participation of postal network. Moreover.(P 1 –Pn) Postal Network Distribution HUB Government Services (SHG CORPORATE PARTERNERSHIP) NGOs Services . SHG concentration. Factors need to be considered for setting the new model The new model can be formed with SHG members as equity holders.23 SRM Management Digest . The number of SHGs and e-kiosks can be decided based on the following factors. A single warehouse can concentrate on 20 to 30 rural kiosks covering an average of (each kiosk covers six villages) 150 villages. . RURAL KIOSK .. animal husbandry. The key players in the new model is given in figure 1 Financial strength of SHGs. Operational Aspects of the e-Business Model NGOs/Government SHGs Banks Modern information and communications technologies (ICTs) and web based marketing of FMCG and durables hold great promise for the development of rural market in India There are a number of ways in which ICTs may serve the development process. Postman service can be used to deliver the product to the rural households. 1: Key players in the new Model Payment options: The payment for product purchase can be made by cash or by using Kisan Credit cards or commonwealth cards at the respective kiosk operated by SHG. health and hygiene. The business uses click and brick model i.Internet and Information Kiosks exist in various kinds. . C1 (P1 –Pn) C2 (P1 –Pn) Cn Rural Homes Fig. .e. each with their respective merits.The SHG can contribute at the individual level or at the group level with the marketing support of corporate. D I S T R I B U T I O N . NGO’s /Government support Corporate requirements. For instance rural entrepreneurs can benefit because ICTs help to improve access to markets or supply chains Distribution HUB (SHG CORPORATE PARTERNERSHIP) Corporate Post Office and provide a broader base for decision-making. 11. • Scale of operation. The operational aspect of the new model is given in figure 2. These Kiosks can also operate like i-Shakti to provide information and services to meet villagers’ needs in medical. The Information Kiosks can be setup by the Government/ NGOs support with the help of local SHG Group to sell the products and services. • Nature of the product. Alternatively private network with the participation of SHG can be utilized for the product delivery mechanism.

. Several Indian and multinational firms have been making inroads into Indian rural market by setting their own distribution models.Government and NGOs support and distribution mechanism. Mckinsey Global Institute(MGI).Kiefer & Carter.2010 24 13. 25 (4). 2. Census of India Report 2001. 352360. The suggested model may cater to the rural market by increasing the socio-economic aspects of the rural households due the presence of increased rural communication infrastructure.Retrived from http://ncaer. 9. The future research in the above areas can serve as a solution to enhance the new model. India 6. SHGs entrepreneurial spirit and investment capacity.(2005). 4. Pearson Education. Conclusion Spending in the rural segment is growing rapidly and consumption patterns are closing in on those of urban India. Shyam Shiradhonkar (2009).R. New Delhi. Availability of government and NGOs services.Reterived from http:// censusindia. Lee. 19-25.The ‘bird of gold’: The rise of India’s Consumer Market Report 2007 8. Availability of the product to the rural consumers at affordable prices. Scope for further research Being a conceptual study it has its own limitations. R. 3.Oxford university press.in/ . C. 3.org/ 7.Pradeep & Raut. Do you see what I see? The future of virtual shopping. Financial viability of the new model . Burke. A Report on the Success and Failure of SHG’s in India – Impediments and Paradigm of Success. India 5. Journal of the Academy of Marketing Science.R. Census of India(2001).K. The scattered population and change in rural demographics makes an obstacle for growth. The American Salesman.gov.SRM Management Digest . Biztantra. 5. 2. Prahalad. Marketing strategies for businesses that are more “Bricks” than “Clicks”. Delhi( NCAER). Siddhartha(2009). Steve(2009). 4. J. Further research can be conducted in the areas of rural customers opinion on the new model. Kashyap. (1997). Eradication of poverty by sharing the profits by the SHG. Global Marketing Management. The basic problem in Indian rural market is accessibility. Wider acceptance due to its high level of corporate social responsibility. National council of Applied economic Research. New Delhi. 10. Choice of brands. The Rural Marketing book. 14. Possibility of adding mandi system for procurement from small farmers.(2002) The India market Demographic Report 2002. 6. Companies such as Unilever. References 1. 1. The Fortune at the Bottom of the Pyramid: Eradicating Poverty through Profits. Graham. Benefits of new e-business model Being a theoretical model the benefits can be derived based on the success elements derived from the various models under operation. product requirements. (2000). VOICE Report (2008). Rural Retail Market Report for Aadhar. Phillips and Nestle have long been known to India’s rural Markets. 16. 15. 45 (9).

In south approximately seven hours is spent on shopping per week which is the highest in the four zones of our country. There are various factors responsible for retail revolution across the globe. 3. 2. Evolution of retail sector and Current Trends in retail sector Over the years customer’s needs have changed and their expectations also have changed. D. All the mass produced products are being served to mass consumers through retail platforms allowing the customer to choose from wider assortments. Traditionally small retailers have shops in front and houses at the back of such stores.80s Mid. . This trend has brought in more Malls and super markets in the south than in other zones. Retailers decide the prices on ad hoc basis or by seeing the face of the customers. Traditional Retail Scene in India India has the most unorganized retail market even today. value for money and attractive displays and human touch plays a vital role in retailing. Also it has been observed that the powers have slowly started moving out of brands into retailer’s hands due to their proximity with customers and improvements in customer service. There are varieties in the kind of retail structures such as Kirana stores. The emergence of private labels will substantiate this fact.25 SRM Management Digest . Subramaniam. Further the trend is towards convenience and flexibility in terms of exchange/return policies. There is no separate accounting for goods consumed for self and traded.ft of area. Apart from quality and range of products.ft with wide range of products.traditional independent stores Department stores – like the ones in USA and Europe with areas in excess of 2500 sq. The demographic profile also has changed warranting a different response from the retailing sector. There has been revolution in retail industry. The evolution of the Customer expectation trend is as below: Table 1 Customer Expectation Period Customer expectation Pre. Value for money Quality and Price Quality + enjoyment + Price + time Quality + enjoyment + entertainment + price + time + energy + stress The buying patterns in India vary according to the customs and life style of a region. Research scholar Sri Chandrasekhara saraswathi Vishva maha vidyalaya university Kanchipuram 1. Introduction Retailing has come to be recognized as a discipline due to rapid growth in market coverage and investments in this sector in India and the world. accounting for over 10 per cent of the country’s GDP and around 8 per cent of the employment.2010 EMERGENCE AND SPREAD OF RETAILING Mr. Such is the growth of retail industry in our country and it is the scenario not only in rural but also in urban cities. The India Retail Industry is the largest among all the industries.80 s 1990 s 2000 s Price sensitive . including in India. Also there is emphasis on schemes and promotions while making a brand choice. The Retail Industry in India has come forth as one of the most dynamic and fast paced industries with several players entering the market. The demographic profile of the consumer has changed and due to economic development and increased income level has become affluent. More than 99% of retailers function in less than 500 sq.

The Mobile phone Retail Industry in India is already growing at over 20 per cent per year. Cosmetics. Shoes. Food and even Jewellery. greater economy of scale and they have warehousing facility as well with areas in the range of 50. Category killers . Breaking bulk. sorting. with the government policies becoming more favorable and the emerging technologies facilitating operations.SRM Management Digest . Also the other important factors contributing towards emergence of a strong retail economy in India include faster turnaround time. The Indian retail is expected to grow 25 per cent annually. Purchasing power of Indian urban consumer is growing and branded merchandise in categories like Apparels. Global retail consultants KSA Technopak have estimated that organized retailing in India is expected to touch Rs 35. The retailing does the following functions like providing assortments .2010 26 Discount stores – big stores like wall mart where discounts are dominant factors as they have a large economy of scale as they hold substantial power in the market. The Food Retail Industry in India dominates the shopping basket. The future of the India Retail Industry looks promising with the growing of the market. The emphasis here is on retail as a brand rather than retailers selling brands. and form innovative and strong supply chain that will cut through distribution and increase margins leading to retail clustering phenomenon. In their preparation to face fierce competitive pressure. Thus there is no doubt that retail links the producer and the ultimate customer for the mutual win-win status. channel of communication . The Indian retail sector is estimated at around Rs 900. rendering services. Also they have capacity technology enabling them to control more of marketing network than the manufacturers. holding inventory.dominate one area of merchandise like sports goods etc. Post liberalization Post liberalization enabled many global retail giants to enter our country as vast middle class and untapped retail industry attracted them. Indian retailers need to advantage of this growth and aiming to grow. 5. risk bearing. location. birth of an attractive market due to strong consumption cycle. of which the organized sector accounts for a mere two per cent indicating a huge potential market opportunity that is lying in the waiting for the consumer-savvy organized retailer. marketing communication. However the ratio in developed countries is higher which means small retailers come together . The ratio of customers to retail store is 150:1 in India which means that there is one store for every 150 Indians.000 crore in the year 200506. diversify and introduce new formats have to pay more attention to the brand building process.000 sq. Super stores and hyper markets – They are away from traditional shopping areas and enjoy greater accessibility by car. are slowly becoming lifestyle products that are widely accepted by the urban Indian consumer.000 crore. Beverages. 4..ft etc The recent trend is to extend e-tailers where shopping is done online. The focus should be on branding the retail business itself. As they buy huge quantities their prices are very low and competitive than general discounters. Specialty stores – They concentrate on one type of merchandise and offer in a manner that makes it special like home furnishing etc. Watches. quality and store’s ambience. There is always a trade off that takes place between price and merchandise against factors like service. transport and advertising functions. The Retail Mix Like marketing mix the retail mix also has some factors forming the vital composition for growth and success.

When it comes to development of retail space specially the malls. retailing in India is gradually inching its way toward becoming the next boom industry. . supermarkets and specialty stores. The retailing configuration in India is fast developing as shopping malls are increasingly becoming familiar in large cities. image and reputation into a coherent retail brand strategy. 6. entry of global products etc are going to be the key growth drivers of the organized retail sector in India. Many retailers have chosen to extend e-commerce applications and e-tailing has also contributed to the growth of this sector. increased personal disposable income. Economical. hypermarkets. entertainment and food under one roof. The trends that are driving the growth of the retail sector in India are • • • Low share of organized retailing Increase in disposable income and customer aspiration Increase in expenditure for luxury items Another credible factor in the prospects of the retail sector in India is the increase in the young working population. Also the future trends that will emerge in India are likely shift their gears in such a way that those who are in retail with broad varieties and shallow assortment will move towards narrow variety and deep assortments. Cosmetics and Toiletries.27 SRM Management Digest . Emerging opportunities in the services sector. the needs and tastes of the consumers have undergone a tremendous transformation. Appliances. Multi-storied malls and huge complexes offer shopping. With this the retail sector in India is witnessing rejuvenation as traditional markets make way for new formats such as departmental stores. social and technological aspects.2010 Indian retailers must come to recognize the value of building their own stores as brands to reinforce their marketing positioning. to communicate quality as well as value for money.Apparel & Accessories. This analysis does a scanning of the environment covering political. Travel and Leisure and many more. crowding several categories without looking at their core competencies. nuclear families in urban areas. or having a well thought out branding strategy. The current political environment has enabled liberalization and the consistent GDP growth has testified the soundness of policies which are favorable for the growth of the retail sector. Options Available for Retail Sector for Growth in India A PEST analysis helps strategists to evaluate the growth options available in this sector. This is based on the concept that retail change is based on cyclical fluctuations in variety and assortment. Nevertheless. The Indian retailing sector is at an inflexion point where the growth of organized retailing and growth in the consumption by the Indian population is going to take a higher growth trajectory. along with increasing working-women population and emerging opportunities in the services sector. The demographic profile of our country also is favorably positioned with younger group forming the bulk of our population. Electronics. These key factors have been the growth drivers of the organized retail sector in India which now boast of retailing almost all the preferences of life . 7. Even the global meltdown had very little impact compared to other economies. But the Indian retail scene has witnessed too many players in too short a time. Home & Office Products.. The impact of globalization and the advancements in IT also has altered the preferences of the consumer due to wide range of choices available now. Opportunities and Strategies for Retail Sector in India With more than 54 % of population in India less than 25 years of age. hefty pay packets. Thus PEST analysis reveals the favorable climate prevailing in our country fro the retail sector’s growth. In India. Sustainable competitive advantage will be dependent on translating core values combining products..

burgeoning income and favorable demographic outline. 13. Reasons range from differences in consumer buying behavior to cost of real estate and taxation laws. Rural markets emerging as a huge opportunity for retailers reflected in the share of the rural market across most categories of consumption o • • • ITC is experimenting with retailing through its e-Choupal and Choupal Sagar rural hypermarkets. • Fig 2. the country sorely lacks anything that can resemble a retailing industry in the modern sense of the term. Even though India has well over 5 million retail outlets. E-tailing slowly making its presence felt. HLL is using its Project Shakti initiative leveraging women selfhelp groups to explore the rural market. Fig 1. India�s vast middle class and its almost untapped retail industry are key attractions for global retail giants wanting to enter newer markets.SRM Management Digest . thus making NCR render to 50% of the malls in India. The organized retail sector is expected to grow stronger than GDP growth in the next five years driven by changing lifestyles.2010 28 • the Tier II cities are no longer behind in the race. At year end of 2000 the size of the Indian organized retail industry is estimated at Rs. The government of states like Delhi and National Capital Region (NCR) are very upbeat about permitting the use of land for commercial development thus increasing the availability of land for retail space. Organized retailing in India has been largely an urban Phenomenon with affluent classes and growing number of double-income households. NCR o • India is being seen as a potential goldmine for retail investors from over the world and latest research has rated India as the top destination for retailers for an attractive emerging retail market. with 139 malls in metros and the remaining 81 in the Tier II cities. More successful in cities in the south and west of India.000 crore o • IT is a tool that has been used by retailers ranging from Amazon. Mahamaza is leveraging technology and network marketing concepts to act as an aggregator and serve the rural markets. Retail Space Distribution in Delhi. Retail Sales In India . This presents international retailing specialists with a great opportunity. If development plans till 2007 is studied it shows the projection of 220 shopping malls.com to eBay to radically change buying behavior across the globe.

The last mile connect seems to be increasingly lively and experiential. manufacturers and service providers will also increasingly face a host of specialist retailers. to name a few. backed with seemingly unlimited financial resources. The employment opportunities and the investment that this sector has attracted are playing a crucial role in the country’s economic growth. Organized retail appears inevitable.29 SRM Management Digest . in Chennai CavinKare. Conclusion Thus the retail sector has facilitated producer to reach the ultimate customer and created a situation where economy of scale is achieved by the producer which is passed on to the customer. things have never looked better and brighter. For manufacturers and service providers the emerging opportunities in urban markets seem to lie in capturing and delivering better value to the customers through retail. manufacturers and service providers face an exploding rural market yet only marginally tapped due to difficulties in rural retailing. For retail industry in India. Kaya Skin Clinic and Apollo Hospital. LimeLite. For instance. who are characterized by use of modern management techniques. Only innovative concepts and models may survive the test of time and investments. As the Indian consumer evolves they expect more and more at each and every time when they steps into a store. 9. Today. No longer can a manufacturer rely on sales to take place by ensuring mere availability of his product. and forging long-lasting relationships. It’s about casting customers in a story. Also. Challenges to the manufacturers and service providers would abound when market power shifts to organized retail. Retail today has changed from selling a product or a service to selling a hope. Challenges & Opportunies Retailing has seen such a transformation over the past decade that its very definition has undergone a sea change. where manufacturers/service providers combine their own manufactured products and services with those of others to generate value hitherto unknown. Marico. retailing is about so much more than mere merchandising. . The win -win situation for producer and retailer is extended to the customer as well.2010 8. Apollo Pharmacies are examples. an aspiration and above all an experience that a consumer would like to repeat. However. reflecting their desires and aspirations.

5 crore people have got jobs in the retail sector and the incomes too have increased in recent times. Concerns have been raised that the growth of organized retailing may have an adverse impact on retailers in unorganized sector . The biggest advantage in this sector is the consumer familiarity that passes on from one generation to the next.An important aspect of the current economic scenario in India is the emergence of organized retail. it is essential that an in-depth study on the possible effects of organized retailing is to be Observed. National Institute of Management Studies 1. Transnational corporations are also seeking to come to India and set up retail chains in collaboration with big Indian companies. The government today said there would be no negative impact of organised retailing on the unorganised sector. The transformation stage of the retail sector started in late 1990’s. multi storied malls and huge complexes that offer a large variety of products in terms of quality and value for money makes shopping a memorable experience.Kinds of Retailing Unorganised Traditional or Unorganized retail outlets are normally street markets. Over 12 million outlets operate in the country and only four per cent of them being larger than 500 sq ft (46 m2) in size. The Retail The word “Retail” originates from a FrenchItalian word “retailler” meaning someone who cuts off or shreds a small piece from something . 3.. which accounts for 96 per cent of retail business. “Moreover.SRM Management Digest . kiosks and vendors. Retailing includes activities of marketing and selling products or services to end consumers for their own household or personal use. where the ownership and management rest with one person only. with negligible rental costs (unregistered kiosks or traditional property). and the remaining share is contributed by the unorganized sector. However. 2. Organised Retailing Organized retailing comprises mainly of modern retailing with busy shopping malls. counter stores. In India. cheap workers (work is shared by members of family) and low taxes and overheads. the organized retail sector accounts only for about three percent share. 3. Retailing Scenario in India Most of the retail sector in India is unorganised. These are highly competitive outlets. Retailer is a Person or Agent or Company or Organization who is instrumental in reaching the Goods or Merchandise or Services to the End User or Ultimate Consumer. There has been considerable growth in organized retailing business in recent years and it is poised for much faster growth in the future. The emergence of pure retailer has started at this stage as it is been perceived as a beginner and the organised retailing is getting more attractive.2010 30 PROSPECTS/ PROBLEMS/EMERGING TRENDS: ORGANISED RETAILING VS UNORGANISED RETAILING Sukanya Hegde Director. This sector accounts for two thirds of the market and requires low skilled labor.In the context of divergent views on the impact of organized retail. the retail business contributes around 11 percent of GDP in 2005 . Of this.. Major industrial houses have entered this area and have announced very ambitious future expansion plans. The main challenge facing the organized sector is the competition from unorganized sector. opinions are divided on the impact of the growth of organized retail in the country. which were known as mom-pop stores.. Organised .” The retail industry is divided into organised and unorganised sectors.

These include the corporate-backed hypermarkets and retail chains. the retail industry has grown at a brisk pace with a Compounded Annual Growth Rate (CAGR) of 7. Despite the industry being dominated by the unorganised retailers. [4] The Retail Business in India is currently at the point of inflection. Rapid change with investments . Recently released study by the Indian Council for Research on International Economic Relations. have been driving the growth of organised retail.2010 retailing refers to trading activities undertaken by licensed retailers.2% during the period FY04-FY07. is likely to grow much more quickly. the organised retailing revenues have soared at a CAGR of 19. The growing expansion of the top global retailers has ensured globalisation of the industry. The unorganized sector stand alone shops are as robust as ever inspite of the hullabaloo they raised in the initial days of the retail chains. These stores routinely appear to be not sufficiently stocked. convenience stores. stacking is not professionally. however the opportunity for growth of organised retail is immense in countries such as India. refers to the traditional formats of low-cost retailing. The factors such as rising urbanisation. and also the privately owned large retail businesses. etc. high working capital requirements etc. etc. Vietnam etc. 4. offer home deliveries. cashiers have to be sought out and the overall appearance is really shabby. greater interest evinced by the Venture capitalists / Private equity firms in the industry etc. on the other hand. There are taxes for moving goods to states. It is primarily characterised by its hierarchical growth structure. paan/beedi shops. Regulations prevent most foreign investment in retailing. with food and grocery accounting for the major share.5% during the period FY04-FY07. Growth An increasing number of people in India are turning to the services sector for employment due to the relative low compensation offered by the traditional agriculture and manufacturing sectors. Whereas the competiting kiranas are as usual very well stocked. the local kirana shops. The Indian retail industry has witnessed a massive transition during the last few decades. lots of local products etc. for example. Globally. growing consumer class. which makes up just 4% of the total industry. and even within states. predicts that the unorganised-retail sector in India will grow each year by about 10% to hit nearly $500 billion in 2011-12. Spencers stores have yet to get their act together. hand cart and pavement vendors. where organised retailing is still at a nascent stage. Some of the large format Hypermarkets like Big Bazaar which do not have any competing unorganized sector competitors have been doing well but the corner store formats like the local Reliance Retail. from states. Korea.31 SRM Management Digest . growing per capita expenditure. and the chains themselves are to be blamed for this mess. they do not have all the essentials. Organized retail such supermarkets accounts for just 4% of the market as of 2008. Most Indian shopping takes place in open markets and millions of independent grocery shops called kirana. The Indian retail has grown at a CAGR of 11. over thirty regulations such as “signboard licences” and “anti-hoarding measures” may have to be complied before a store can open doors.77% during the period 2001-2006. The apparel and footwear segment occupies the major share in the organised retail pie. S. The organised-retail sector. the retail chain corner stores are at the risk of losing whatever credibility they have built in the last couple of years. The Indian retail industry has strong linkages with the economic growth and development of the economy. those who are registered for sales tax. The organized retail market is growing at 35 percent annually while growth of unorganized retail sector is pegged at six per cent . Moreover. owner manned general stores. that is. income tax. Unorganised retailing.

Spencer’s Super. Crossword.]India has topped the A.9%. Grand India Bazaar .etc. Fashion Station. K Raheja Corp Group-Formats: Shoppers Stop. The Tata Group-Formats: Westside. the Aditya Birla Group. Landmark. small ticket sizes. • • • • • • • • • • • • • • • • • Vivek Limited Retail Formats: Viveks. Respect India . Tanishq outlets. Spencer’s Hyper. India has highest number of outlets per person (7 per thousand) Indian retail space per capita at 2 sq ft (0. Central. Depot. Property developers are creating retail real estate at an aggressive pace and by 2010. Major Indian Retailers The low-intensity entry of the diversified Mahindra Group into retail is unique because it plans to focus on lifestyle products. 5. Viveks Service Centre. Max. E-Zone etc. or a range of products. While India presents a large market opportunity given the number and increasing purchasing power of consumers.. aLL.19 m2)/ person is lowest in the world Indian retail density of six per cent is highest in the world. Home Centre. Star India Bazaar. maintaining its position as the most attractive market for retail investment.SRM Management Digest . The Mahindra Group is the fourth large Indian business group to enter the business of retail after Reliance Industries Ltd. Pyramid Retail-Formats: Pyramid Megastore. Steeljunction. Titan Industries with World of Titans showrooms. 300 malls are estimated to be operational in the country. REI AGRO LTD Retail-Formats:6TEN Hyper & 6TEN Super RPG Retail-Formats: Music World. Hyper City. 1. limitations of mass media and existence of counterfeit goods. Kearney’s annual Global Retail Development Index (GRDI) for the third consecutive year.8 million households in India have an annual income of over 45 lakhs.Formats: Fabmall supermarket chain and Fabcity hypermarket chain Vishal Retail Group-Formats: Vishal Mega Mart BPCL-Formats: In & Out Reliance Retail-Formats: Reliance Fresh Reliance ADAG Retail-Format: Reliance World German Metro Cash & Carry Shoprite Holdings-Formats: Shoprite Hyper . and Bharti Enterprises Ltd. Books & Beyond. it is valued at about US $ 350 billion. little use of IT systems.T. Chroma.2010 32 to the tune of US $ 25 billion is being planned by several Indian and multinational companies in the next 5 years. there are significant challenges as well given that over 90% of trade is conducted through independent local stores. Food Bazaar. Fun City and International Franchise brand stores. The other three groups are focusing either on perishables and groceries. Organised retail is expected to garner about 16-18 percent of the total retail market (US $ 65-75 billion) in the next 5 years. complex distribution network. The predictions for 2008 is 7. Pantaloons. The Indian economy has registered a growth of eight per cent for 2007. Indian market has high complexities in terms of a wide geographic spread and distinct consumer preferences varying by each region necessitating a need for localization even within the geographic zones. Challenges include: Geographically dispersed population. Jainsons. Ltd. ] The enormous growth of the retail industry has created a huge demand for real estate. Daily & Fresh Pantaloon Retail-Formats: Big Bazaar. Viveks Safe Deposit Lockers PGC Retail -T-Mart India. It is a huge industry in terms of size and according to management consulting firm Technopak Advisors Pvt.. TruMart Nilgiri’s-Formats: Nilgiris’ supermarket chain Trinethra. Switcher . Brand Factory. or both. Inorbit Lifestyle International-Lifestyle.

Low skill level for retailing management. however. 1. 7. However. plans to set up shop in India with a wholesale cashand-carry business and will help Indian conglomerate Tata group to grow its hypermarket business. Organized Retailing in the last decade has emerged as one of the sunrise industries in India. retailing needs to cross the following hurdles:[19] • Automatic approval is not allowed for foreign investment in retail. studies have found that only a limited number of small vendors will be affected and that the benefits of market expansion far outweigh the impact of the new stores.33 • • • SRM Management Digest . technical services and know how to an Indian company for direct-to-consumer retail.020 unorganised small retailers across ten major cities. Lack of Retailing Courses and study options Intrinsic complexity of retailing – rapid price changes. The boom in the sector started after the liberalization measures were initiated in 1991 in the country. is slated to open in north India by the end of 2008. closely following the IT and biotechnology industry. The Indian Retail Industry is gradually inching its way towards becoming the most boom industry. does not deal with the impact of foreign direct investment (FDI) on small retailers. the world’s second largest retailer by sales. Carrefour. constant threat of product obsolescence and low margins. which favours small retail • • • businesses.. 100 intermediaries and 197 farmers. which will sell groceries.Cotton garment outlets • • 6. The study. The world’s fifth largest retailer by sales. Indian retailing has evolved over the past decade. consumer appliances and fruits and vegetables to retailers and small businesses. from largely an ‘informal’ and disorganized marketplace to an increasingly corporatised industry at least in the urban India. • Regulations restricting real estate purchases. This is the largest among all the industries. is planning to setup two business entities in the country one for its cash-and-carry business and the other a master franchisee which will lend its banner. WalMart Stores Inc and Sunil Mittal’s Bharti Enterprises have entered into a joint venture agreement and they are planning to open 10 to 15 cash-and-carry facilities over seven years.more Outlets Kapas.The findings of the study are based on survey of 2. The first of the stores. Lack of trained work force. Opposition to the retailers’ plans have argued that livelihoods of small scale and rural vendors would be threatened.318 consumers shopping from both organised and organised retail outlets. Challenges To become a truly flourishing industry. and cumbersome local laws. Tesco Plc. • Taxation. The ICRIER report says the unorganised retail business is likely to grow at 10 per cent annually from $309 billion in 2006-07 to $496 billion in 201112. The Retail Industry in India has come forth as one of the most dynamic and fast paced industries with several players entering the market. Several large chains have entered the bandwagon and achieved fair to significant success. The total concept and idea of shopping has undergone . Absence of developed supply chain and integrated IT management. Costco Wholesale Corp (Costco) known for its warehouse club model is also interested in coming to India and waiting for the right opportunity. accounting for over 10% of country’s GDP and around eight per cent of employment. Entry of MNCs The world’s largest retailer by sales. But all of them have not yet tasted success because of heavy initial investment that are required to break even with other companies and compete with them. The impact of FDI on unorganised retail is being assessed by the NCAER.2010 Paritala stores bazar: honey shine stores Aditya Birla Group .

First. The Indian retail sector is witnessing tremendous growth with the changing demographics and an improvement in the quality of life of urban people. has come to be identified with lifestyles With organized retail in India pegged at Rs 25. probably not looked at the other markets as seriously.2010 34 an attention drawing change in the format and consumer buying behavior. This report also surveys the property market and reiterates the significance of IT in organized . the modern retailing trend. despite its cost-effectiveness. nuclear families in urban areas. multi-storied malls and the huge complexes that offer shopping. Also the lack of proper metrics to measure marketing spends is a serious issue. there is not much of a choice but to find ways to win customers over and keep them permanently happy. large chunks are yet to feel the impact of organized retailing. Retailing. In today’s swiftly changing business environment.000 crore (Rs 8. the boom in retailing has been confined primarily to the urban markets in the country. But sales personnel are busy selling a product and do not have a fair idea of what retailing is about.000 crore (Rs 250 billion) -. They can instantly sense a good buy and lap it up or sniff out a bad product and dismiss it. along with increasing working women population and emerging opportunities in the services sector are going to be the key factors in the growth of organized retail sector in India.SRM Management Digest . The retail arena today is very different . the corner grocery store was the only choice available to the consumer. have tried to redefine themselves. This is slowly giving way to international formats of retailing.out of a total of Rs 800. this becomes a formidable task. The growing affluence of India’s consuming class. ushering in a revolution in shopping in India. There are two primary reasons for this. The traditional grocers. by introducing self-service formats as well as valueadded services such as credit and home delivery. So how are Indian retailers coping up and how long will it be before organized retail becomes the primary way of selling. keeping tabs on the shifting trends in the market place and maneuvering your strategy to stay on top. In India. therefore. Their expectations are tough to meet but for retailers aiming to make a big sale.000 billion -. the emergence of retail entrepreneurs and a variety of imported products particularly in the food and grocery segment. Modern retailing has entered into the retail market in India as is observed in the form of bustling shopping centre. Gone are the days when retailing meant mere availability of a product. Even there. However.and a double digit growth rate.to be constantly on the move. there is no option but to be in the know . has been one of the main drivers for the current retail boom in the domestic market. which is still restrictive in many ways and lacks adequate infrastructure. the vast middle class and its almost untapped retail industry are the key attractive forces for global retail giants wanting to enter into newer markets. The traditional food and grocery segment has seen the emergence of supermarkets/grocery chains. not only to sell a product to a consumer but to get the consumer to interact with the product. That is. Second. which in turn will help the Indian retail industry to grow faster. For a long time. the modern retailer is yet to feel the saturation’ effect in the urban market and has. especially in the urban areas. The focus is to prioritise retail. convenience stores and fast-food chains.the opportunities are incredible but exploiting them is extremely tough. one of the largest sectors in the global economy. In an environment. marketing companies are setting up shops to provide differentiated services to clients. entertainment and food all under one roof. Super smart shoppers know all the rules of the game. With competition becoming stiffer companies are looking at ‘experiential’ marketing. Till now sales people were the link between the retailer and the producer. it is going through a transition phase in India. Indian retail is expected to grow 25% annually. Large young working population with median age of 24 years.

International retail majors such as Benetton. and the geographical. This means that India per capita retailing space is about two square feet (compared to 16 square feet in the United States). As much as 96 per cent of the five millionplus outlets are smaller than 500 square feet in area.000 crore (1 crore = 10 million) which will increase to Rs. the ORGANISED retail industry will grow to Rs. 800.000 crore by 2005 (source: survey by AT Kearney) Given the size. however. In fact.000 crore by 2005. back-up power supply. Conclusion Even though India has well over five million retail outlets of all sizes and styles (or non-styles). much bigger premises. Retailing in India is thoroughly unorganised. mostly owner-operated. Lifestyles in India are changing and the concept of “value for money” is picking up.000 crore.000 crore by the year 2005 – an annual increase of 20 per cent. India’s attempt to go the international way in retailing has met with some.20.2010 retail before presenting a payback analysis to reveal the financial aspects involved.000 crore segment of the market is organised. only a Rs. 20. According to a survey by AT Kearney.000 crore retail market is UNORGANISED. Dairy Farm and Levis have already entered the market. 400.. 400. From a size of only Rs. 160. There is no data on this sector’s contribution to the GDP. has negligible real estate and labour costs and little or no taxes to pay. and yet have to keep prices low enough to be able to compete with the traditional sector. an overwhelming proportion of the Rs. The TOTAL retail market. the India operation of the US-based Kurt Salmon Associates). This presents international retailing specialists with a great opportunity. Just over 8 per cent of India’s population is engaged in retailing (compared to 20 per cent in the United States). high quality real estate. cultural and socio-economic diversity of India. taxes etc.000 crore in 2000 to Rs. Traditional retailing has established in India for some centuries. Organised retailing also has to cope with the middle class psychology that the bigger and brighter a sales outlet is. 400. India’s per capita retailing space is thus the lowest in the world (source: KSA Technopak (I) Pvt Ltd. It was only in the year 2000 that the global management consultancy AT Kearney put a figure to it: Rs. there is no role model for Indian suppliers and retailers to adapt or expand in the Indian context. High costs for the organised sector arises from higher labour costs. as indicated above will grow 20 per cent annually from Rs. social security to employees. India’s first true shopping mall – complete with food courts.. There is no supply chain management perspective. (this mall is called “Crossroads”). . It is a low cost structure. The above should not be seen as a gloomy foreboding from global retail operators. 800. recreation facilities and large car parking space – was inaugurated as lately as in 1999 in Mumbai. players in the organised sector have big expenses to meet. The first challenge facing the organised retail industry in India is competition from the unorganised sector.35 SRM Management Digest . comfort facilities such as air-conditioning. Consumer familiarity that runs from generation to generation is one big advantage for the traditional retailing sector. the more expensive it will be. In contrast. the country sorely lacks anything that can resemble a retailing industry in the modern sense of the term.

11.Technopak Advisors Pvt.articlesbase.ibef. published by Tata McGraw-Hill Publishing Company New Delhi. 10. 7. Retailing Management by Swapna Pradhan.” December 11.” July 2. November 7. Indian Branch. “Economic and financial indicators” July 3. 9. 3. 2008. 2. “Centre consulting states for setting up retail regulator. 2008. 2008. Evans published by Pearson Education(Singapore) Pte.. www. The Economist. Reference 1. http://www. Retail reality.com . “Retailing in India Unshackling the chain stores”. “Indian Retail story from Myths to Mall.com/displayStory. 2007. economist. www.SRM Management Digest .com 12. 6. Retail Management by Barry Berman and Joel R. 4. 8. “ICRIER Begins Survey of Indian Retail Sector. 5.” August 11.org 13.” March 19.Ltd.managementparadise. 2007. 8.cfm?story_ id=11465586. 2006. “India again tops global retail index. Ltd.” June 22.2010 36 Local companies and local-foreign joint ventures are expected to more advantageously position than the purely foreign ones in the fledgling organised India’s retailing industry. “Interview . 2007. 2007. www.

For the purposes of this paper. In addition to these traditional comparisonshoppers who are looking for the best prices. In addition. the provision of a range of services by the seller that seek to enhance the quality of interaction over conventional channels like in-store retailing. and are willing to pay a premium price if they find the product they are looking for. The level of service and support to the consumer classifies these basic types. this new breed of customer is: harvesting the amenities offered by the physical bookstore (like the plush sofas. Reader Aligarh Muslim University. a set of complex networked linkages between various facets of the value chain and the use of speed and content as key ingredients of competitive differentiation. Anecdotal evidence and initial qualitative research also suggest that they are less likely to have qualms about not buying from a retail outlet. and who also perhaps spends some money on a coffee at the store.2010 DEVELOPING E-TAILING STRATEGIES FOR THE FUTURE Saif Sami. the e-tail model is also attracting a growing segment of customers who are technologically competent. therefore. Aligarh Salma Ahmed. Traditional retailers have to recognise the radically different nature of e-tailing if they plan to move to selling in an online format. Research Scholar Aligarh Muslim University. the ability to browse. This suggests that there could be an ongoing migration of these ‘cash cows’ from retail shopping to e-tail. It is. Later that evening. and places an online order for the very same books at an online bookstore. Imagine a prospective book-buyer who spends an hour or two browsing the aisles of his or her favourite neighbourhood bookstore. Conversely. this same person gets home. but the prospects for retailers might be alarming. Consumers are getting smarter in using e-tailers (and online search engines and agents) for convenience and comparisonshopping. Sounds simple enough. and the discount pricing offered by the online bookstore. The main features of e-tailing include: largely virtual interactions between buyer and seller. The basic types of retail classifications are: . community interaction. and the ‘latte’) and milking the convenience. special events. necessary to reexamine the basic issues confronting e-tailers and traditional bricks-and-mortar retailers as they seek to innovate in the digital domain. e-tailing is defined as the ‘process of selling products and services through an online interface like the World Wide Web’. this prospective customer makes a mental note of interesting titles which he or she might likely buy.37 SRM Management Digest . Classification of Internet Retail Stores Internet retail stores have various types or styles of outlets. the hassle free shopping. Aligarh 1. Introduction The Internet has changed the way many consumers shop. not just in the digital domain. 2. but also in the physical world. bricks-and-mortar retailers have many strong competencies which e-tailers might find hard to imitate. In effect. place a high emphasis on convenience.

These businesses have a unique product that may . or new promotion. Directing consumers to specific sites that sell products or services generates their sales and profits. Their product line tends to be very broad. These retailers have a fixed market base with a specific customer base. These retailers focus on pricing over product.com domain is full or the name of the company may be already been purchased in that domain. 3. require service or technical expertise. If the item appeals to the masses. Web traffic control sites. Virtual Shopping The more innovative concept. A “brick and mortar” business with an Internet marketing site can utilize the site to beta test new items and serve The retailer’s intention can be determined by the focus of the Internet site. The last marketing strategy focuses attention to service and product with price being a fixed constant. and inside of “brick and mortar” places of business. such as Microsoft technical support or Hewlett Packard computer/hardware technical support. 4. A savvy computer oriented consumer may have the ability to use a search engine to find the product or company in which they are interested. on the sides of delivery vehicles.com that has retail sales but only through other Dot Com companies. whether it is a new idea. then the sales continue until the inventory is depleted or reordered. Content sites providing information and support – may sell items but their main goal is to give logistical or technical support of goods and services. Traditionally. Market Awareness Market awareness is paramount for retailers on the Internet. Marketing Strategies On The Web Some retailers wish to expand the overall market penetration to markets in which they are not currently active. Technological advances into virtual reality and alternate media have improved research techniques and opened larger cross-sections of consumers. these may or may not have a “brick and mortar” store but are tied directly to a store of another name. Service to the consumer is important but is not directly attributable to the price.2010 38 • • • • On-line store fronts – companies that have “brick and mortar” stores and may sell items similar too or the same as their physical outlets. Another market strategy stresses volume business and is heavy into discounts. the greater the risk. Microsoft is an example of unique product companies that may require a high level of expertise. Service is not their main focus. Each of these distinctive site types has the ability to either generate sales or advertising revenues. Catalogue sales – may be a company that does not have a physical store but sells by catalogue on-line and by direct mail solicitation. such as malls and search engines – example would be Yahoo. new product. The limitations on this type of marketing are dependent on the appropriate product being marketed to the consumer and the sales are limited to inventory on hand at that location. Virtual shopping has the ability to limit the distribution of products to “brick and mortar” stores before testing the marketability of a product or service. companies use marketing research to minimize the risk. Traditional marketing in a “brick and mortar” business yields a traditional purchase if it appeals to the consumer. Most consumers may use the dot com method but this may limit accessibility of newer companies entering the market as the . Many retailers wishing to improve exposure will add their Internet site location in direct mail campaigns. Finding a retailer on the Internet may be the difference between success and failure.SRM Management Digest . catalogues. 5. such as a specialty company that sells fine art or jewellery. These retailers typically do not intend to offer a broad based discount strategy but instead rely on their name recognition and status of the product.

7. Some Internet sites are very “busy” and require long periods to load. America on-line still boasts to be the largest Internet access provider with Microsoft (MSN) rapidly closing the gap between these dial-up servers. it is apparent that the integration of the Internet with a traditional “brick and mortar” business has a marked advantage over the Internet only or “brick and mortar” only businesses. Using the Internet site to promote the locations of the “brick and mortar” businesses have also shown to increase in traditional business with consumers that want a product immediately. In reviewing each of these types of businesses. A combination of these marketing techniques. This function interprets the long period required for loading as a problem and will disconnect from the site being loaded. Marketing on the WORLD WIDE WEB requires the consumer to actively seek out the site or be drawn to the site by curiosity or by interactivity. The creativity of a Web site may contribute to the long loading and make it difficult for the browser to navigate through the Web site. “Keep it simple. persuade.39 SRM Management Digest . This business will be able to take advantage of the Internet in testing products but also have a physical site for marketing of the products. reload.” The navigation throughout the web site is also a key. billboards. stop. The key to this type of marketing is to inform. Informational and the image of having an “Internet presence site” drives the new marketing paradigm and ultimately the consumer. This competition has kept the growth and viability of dial-up providers strong. “click and bricks”. will yield a superior marketing package. and television advertising. Further. An Internet only business must rely on curious consumers or piggy-back marketing with other sites for new items. they may move items around to focus on regional demand and fill in gaps in their marketing strategy. and retain the actual or potential customers and get the message across. Profitability of Internet only marketers has been a big disappointment for many start-up companies. Long periods of loading and difficulty in using common Internet computer functions. newspaper. The average Internet access provider still uses dial-up servers and the availability and affordability of cable modems and DSL access is still very limiting. Web site administrators and constructors must deal with these issues to insure a smooth transition and ease of use of the web site. New Marketing Paradigm Traditional mass marketing communications exists in the form of direct mail. Software upgrades have improved searches and chopped 10 seconds off the time it takes for some pages to appear. radio. The most important aspect of the “click and bricks” technique from a marketing perspective is the manner in which the Internet transforms these marketing functions. The “click and bricks” business has an advantage in the beta marketing of products and the ability to react to shifting market share of products. Sales are limited by exposure and the consumers’ inability to physically touch the product and may be at a disadvantage. Even . The Internet only basis of these start-ups was doomed from the beginning mainly due to the lack of exposure or heavy requirements for initial capital outlay left these types of companies with a large debt that many could not overcome. This delay may be exacerbated by the browser’s limitations and timeout function. such as the back. and refresh buttons. Internet marketers must remember the old saying. may cause fatal errors and conflicts with the consumers’ computer program. Wakeup Call To Dot Com Industry Basic marketing indicates that if the marketers cannot provide the time and place utility to customers that they may lose interest in the purchase. The goal of the new marketing paradigm is to seek out the consumer using traditional communications and blend in with the new Internet marketing tools to attract and excite the consumer.2010 as a backup to reallocate items from one sector of the country to another when products may sell better in one market or the other. 6.

Other large retailers are offering low-cost or free Internet services to attract first time online customers. The space is normally purchased by other e-tailers and that will cause the overall e-tailing market to show poor returns on investment dollars. 9. Secure credit card transactions over the Internet require cooperation between the credit card company.2010 40 for the big companies that started out with a large amount of venture capital.com. E-tailers fall into poor pricing practices such as rampant discounts. The important point. It was found that 41% of online buyers were happy with dot-com customer service. Also help in the ability of the company to . and communicates between the URL and the visitor. 10. Many e-tailers sell things below cost and try making up the difference by selling advertising space. Customer Relationship Management Use of the “click and brick” approach to customer relationships allows for the business to react to changes in consumer focus more rapidly. Success is measured in terms of sales rather than profits. Repeat customers account for 76% of some e-tailers orders. Improving service by calls to online shoppers on customer service lines has improved sales of some retailers by more than 60%.SRM Management Digest . These “cookies” can be used to compile the data and popularity of a specific sector and how in-depth the visitor checked the site. such as Amazon. though. The Internet creates a more pricesensitive shopper. by often making it necessary to separate the settlement from the informational and contracting steps in an acquisition. “In particular. and keep the information secure. The “cookie” collects data from the visitor on where in the site the visitor reviews. Straying off this course will tend to discourage the consumer and miss the opportunity for the sale. how long at that site. the road has been very rocky. Secure transactions across the Internet are a prime concern for many potential customers. the security concern is a serious obstacle to consumer-oriented E-commerce”. The use of an Internet based business sector will allow for the shopping and interest levels of a consumer to be actively measured. Encryption of data is required but the success of encryption relays on the ability of the parties to exchange information. is that this price pressure does not only have an effect online – it also affects real-world prices and margins. Attracting And Keeping The Customer Some brick and mortar companies are relying on their brand names to attract new customers. The attraction of the Internet still remains convenience and low prices. The free flow of information enables people to be more price conscience. interpret the information. and the consumer. Many of the companies were “grounded” by their own limitations and tend to have slow sales or no sales. 8. the e-tailer. Companies cannot avoid this attack by not selling their wares online. Electronic payment ability appears to be key to the success of the individual company. free shipping. An e-tailer that required payment by methods other than electronic tended to slow the sale to the point of losing the sale. and the desire to sell anything. When networking is so prevalent all profit margins will come under attack. This can be used to review the attractiveness of the items or how a beta test item is received. This can be done by the use of “cookies” which is an electronic data collector between the on-line visitor and the “site” or URL. The combination of “click and brick” business ventures has proven to be the optimal type of marketing platform. Price of a Customer All marketers must conduct a cost-benefit analysis of the cost of acquiring one customer and must be weighed against the potential for those customers’ sales.

but which are equally important when competing in a digital format. In a typical retail environment. retailers need to make a Go/ NoGo decision on whether they should have an e-tail storefront. How Should Traditional Retailers Respond? First. (b) cannibalization of in-store retail sales. would take less time than driving up to one physical store. e-tail storefronts and catalogues can be innovatively deployed to increase awareness and drive customer demand. from specialty retailers who deal exclusively in hard goods. Consumers are often willing to spend significant time in personalizing their experience. If they go ahead with establishing an online presence. These challenges are already being experienced across a range of business. The Divide: Key Elements of Online Shopping Several unique elements make online shopping different from the traditional in-store retail model. Search capabilities within e-tail stores replace physical browsing through endless aisles at a traditional retailer. As the costs of advertising on the Web increase (leading to an increase in customer acquisition and retention costs). Third. Besides offering convenience and expanded product variety. the online model also makes it easy for consumers to access and compare data from multiple sources. especially if the product is hardto find or out-of-stock. Second. It will assist the “click and brick” with strategic planning and help build the relationships and create a value with the consumer. Only time will tell if these strategies succeed in exploiting the possibilities of e-tail without losing out on the richness and inherent advantages of in-store retail. retailers can use their e-tail storefronts to capture valuable customer demand data. Through carefully managed convergence. Two such skills that can prove extremely important to e-tail success are outlined below: . Thus a lot of synergies can be achieved by combining some of the core retailer strengths with an online business channel. 12. for example. thus helping further assisting the company with discovering what the buyer wants and providing that consumer with the objectives desired. Buyer and seller focus will be enhanced to the point of mutually satisfying exchanges and yield higher sales and profits. and conduct pricing and promotional experiments. Visiting three e-tailers. such data is available but extremely hard to distill and analyze. and (c) price competition. and several leading retailers are faced with challenges in handling the data glut. 13. Initial research suggests that the addition of an e-tail channel might be relatively easy if the company also had cataloguing experience. the main challenges will be for operations and marketing.41 SRM Management Digest . 11. Such data can provide a good basis for forecasting future demand patterns and customer preferences. and this clear opportunity to ‘hear the voice’ of the customer is greatly facilitated by several off-the shelf tools that capture and analyse data from online visits.2010 enhance the site to visitors’ satisfaction and keep the “click and brick” on track with their customer. retailers can significantly enhance the in-store experience throughout the retail network to attract customers. to fullservice stock brokerages who deal mainly in infomediation and knowledge transfer. The immediate challenges of such capabilities for the retail (and e-tail) environments include: (a) the erosion of brand equity and customer loyalty. several innovative retailers have also begun to use direct marketing and traditional media channels to get their online presence across to customers. What E-Tailers Can Learn From Their Counterparts Traditional retailers have several competencies which a pure e-tailer can be hard pressed to match.

differentiation. 14. and which critically impact success at the end of the day. A “brick and mortar” company with online services. While skills like speed. Further. A leading “bricks and mortar” company would select merchandise and negotiate volume discounts with vendors then place those items in a strong technological platform that is capable of handling millions of customers. An efficient supply chain plus the ability to allocate adequate resources to merchandising needs in a timely fashion add to the ability to stay on top of competition. and catalogue sales has the greatest chance for retail survival in the emerging e-commerce. storefronts. This would expand the strong points of each company allowing for a strong partnership. Integration of businesses is the wave of the future and the e-tailer needs to consider all its options. and develop further competencies in the areas of merchandising and demand forecasting. but not necessarily easier to analyze or act upon. There are many ways to limit the use of the advertising rupee and focus on your primary audience. Every retailer can take advantage of the Internet and forming alliances can be very beneficial to all parties. . strategic partnerships between webbased businesses and “bricks and mortar” companies will benefit both entities. E-tailers are finding that the process of data collection is more dynamic in a digital environment. on the other hand. The ability of technology will allow for the 20% of each of the three types of sales strategies. the Internet. Conclusion There are several important lessons to be learnt in the transition from bricks-and-mortar retail to the digital e-tail world. Retailers need to examine the viability of such a transition. need to revisit some basic retail functions. it is the ability to transform core operations and practices to this new medium which might make the difference between success and failure.SRM Management Digest . will not be able to hold their margins and will follow the path of so many others that have come before them. The standalone e-tailer that has but one outlet. storefront. They have to address problems which have been around in retail operations for a long time. The theory that retailers should identify the 20% of customers who provide 80% of the profits and market specifically to them would have to be altered to a specific marketing focus. and catalogue sales to be identified and change the marketing strategy to focus on these customers. manage inventory and respond accurately to customer demand. only a few have succeeded in harnessing information technology to solve this problem.2010 42 a) Merchandising Skills and Assortment Planning One of the core strengths of a good retailer is the ability to plan merchandise assortments based on early detection of customer trends and to source products through a network of trusted suppliers. and using focused data mining solutions should help both retailers and e-tailers reduce stockouts. Matching supply to demand remains one of the most pressing problems for any retail organization. Harnessing the power of information technology through large and accurate data warehouses. b) Forecasting and Demand Management Although many retailers would like to get an accurate handle on future customer demand. A web-based business could market the goods online and handle customer service. bankruptcy. and branding are equally if not more important in the digital world. e-tailers.online. and look into the synergies of using the new channel of e-tail. The ability to establish your e-tailing business can only be enhanced with strong partnerships.

Professor Department of Management studies New college Institute of Management. from computerization to networking to ATMs.Royapettah. • To know how E – Banking creates values for the . Malhotra and Singh (2007) carried out a study to find the E -banking adoption by the banks in India. However. The study suggests that larger banks or banks with younger age. Internet has proved a magic wand for financial services and products. M. including the Internet. individuals or businesses. Banks with lower market share also perceive E -banking technology as a means to increase the market share by attracting more and more customers through this new channel of delivery.Phil. automated teller machine (ATM).H..Chennai – 600 014 1. or obtain information on financial products and services through a public or private network. banks have moved up the value chain. Introduction E . interactive communication channels.Com. 2. The E -banking channel is both an informative and a transactional medium. personal digital assistant (PDA).Banking. however. E -banking has not been popularly adopted in India as expected (Ravi et al.. particularly in banking sector.Banking involves consumers using the Internet to access their bank account and to undertake banking transactions. such as a personal computer (PC). S. Customers access e-banking services using an intelligent electronic device. and buying financial products or services online.Banking is a new delivery channel for banks in India. has always required an actual in-person visit to the branch to sign a signature card but now an Internet-friendly account opening procedure can expand the geographical footprint of a bank as well as improve customer convenience (Community Banker. this booklet focuses specifically on Internet-based services due to the Internet’s widely accessible public network. • To Study the development and status of E– Banking in India.banking services offered by banks. M. At the basic level. Sathyabama University Dr. E . 2007). Banks have transformed themselves and are offering services through internet.43 SRM Management Digest . At an advanced level. this booklet begins with a discussion of the two primary types of Internet websites: informational and transactional. Accordingly. Senior Lecturer Department of Management Studies. • To explore the E . 3. 2006). Definition of E-Banking E-banking is defined as the automated delivery of new and traditional banking products nd services directly to customers through electronic. 1999).2010 ROLE OF E – BANKING SERVICES IN THE BANKING SECTOR Ms. transferring funds. While the risks and controls are similar for the various e-banking access channels.Vasanthakumari. to access accounts. This is called “transactional” online banking (Sathye. it involves provision of facilities such as accessing accounts.D). Sheela Rani. Objectives • To study the role of E – Banking services in the banking sector. Banking sector has been early adopted of technology to offer the latest modes for transacting business. IT has played a crucial role in the financial services. transact business. MBA. kiosk. or Touch Tone telephone. private ownership and lower branch intensity possess high probability of adoption of this new technology. Opening an account. and now E. Internet banking can mean the setting up of a web page by a bank to give information about its products and services. (Ph. E-banking includes the systems that enable financial institution customers.

They are convenience and accuracy. SWIFT. 1994). the second Rangarajan committee constituted in 1988 drew up a detailed perspective plan for Computerization of banks and for extension of automation to other areas such as funds transfer.2010 44 banks and their customers. The process started in the early 1980s when Reserve Bank of India (RBI) set up two committees in quick succession to accelerate the pace of automation of operations in the banking sector. Joseph et al. and Poon.. 2000.g. etc. 1994. and accordingly issued guidelines on ‘internet banking in India’ for implementation by banks. to draw up a phased plan for computerisation and mechanization in the banking industry over a five-year time frame of 1985–1989. efficiency. and Gerrard and Cunningham. Perceived ease of use (Davis. 1989). RBI had accepted the recommendations of the ‘Working Group’.. 1999. Bala et al. timeliness. Jun and Cai (2001) identified to seventeen service quality dimensions of Internet banking service quality. Siriluck and Speece. The Government of India enacted the Information Technology Act. BANKNET. Perceived usefulness (Wang et al. • To suggest some remedial measures to improve E-banking services in the banking sector. to their customers to cope with the competition. ease of use. 5. reluctant to change (Simon and Victor. and helpfulness of staff. choice of access to bank (Elizabeth. and Poon. Elizabeth. understanding the customer. reliability and access . with effect from 17 October 2000 to provide legal recognition to electronic transactions and other means of electronic commerce. 1995. C. These are reliability. technology. Perceived credibility (Wang et al. ATMs. 1999). Zugelder et al. the most cited attributes that influence the use of e-banking are: convenience of usage (Venkatesh and Davis. government supports (Simon and Victor. The ‘Working Group’ has also issued a report on e-banking covering different aspects of E -banking. RBI had set up a ‘Working Group’ on e -banking to examine different aspects of e-banking. 2008). communication. The bankers are now offering innovative and attractive technology-based services and products such as ‘Anywhere Anytime Banking’. Davis. Their study identifies six underlying dimensions of electronic banking service quality. 2003. feedback and complaint management.. responsiveness. 1999. courtesy. etc. 2000. 2003. 1989. 2008). The Group had focused on three major areas of E – banking such as (1) technology and security issues. accuracy. 4. It is also suggested that both Internet-only banks and traditional banks offering Internet banking services should focus more on the following important dimensions e. Development of E -banking in India The financial reforms that were initiated in the early 1990s and the globalization and liberalization measures brought in a completely new operating environment to the banks.SRM Management Digest . accessibility and customization. Rangarajan. and banks’ reputation (Mols. competence. e-mail. (2) legal issues and (3) regulatory and supervisory issues. trust (Hoffman et al.. credibility. (1999) investigate the influence of Internet on the delivery of banking service.. 1996. The focus by this time was on customer service and two models of branch automation were developed and implemented. content. awareness.. ‘Web Banking’. 2003). 2002). responsiveness. 2000). collaboration and continuous improvement. A high-level committee was formed under the chairmanship of Dr. and Wang et al. Security (Sathye. . Gerlach. 1999). then Governor of RBI. Having gained experience in the earlier mode of computerization. 2008). ‘Internet Banking’.. 1999. 2000. 2001. 2003). and Poon. Cost reduction (Devlin. Attaran. As for Internet banking. 2000 (generally known as IT Act. aesthetics. 2003). Jun and Cai. security and divers features. access. Review of Literature In the extant literature. ‘Tele-Banking’. queue management. E -banking.

2005). Internet World Stats reported that there were 39. internet connections and telephones. Thus. e-trading and e-broking have come up. Unnithan and Swatman (2001) studied the drivers for change in the evolution of the banking sector.000 internet users in India representing 3. For online banking to reach a critical mass. funds transfer between its branches. Almost all the banks operating in India are having their websites. However. Dasgupta. and the move towards electronic banking by focusing on two economies. Even with millions of web users in its cities. Rao and Prathima (2003) provided a theoretical analysis of E -banking in India. thus offering a broader range of integrated services to the customer. it is still in its evolutionary stage. According to the Internet & Online Association of India (IOAI). Various authors have found that E -banking is fast becoming popular in India (Gupta. comparatively less number of studies has been conducted on the current status of e -banking and customer satisfaction compared to other countries. 2000. 2002). there are few online financial service providers. 1999. 2006). there has to be sufficient number of users and the sufficient infrastructure in place. the upsurge of IT professionals with growing demands is pressuring the government and bureaucracy in the country to support and develop new initiatives for a faster spread of E -banking. ICICI bank is the first one to have introduced e -banking for a limited range of services such as access to account information. the internet penetration rate for India remains well below 5%. . Pegu. 6. Commercial applications such as Electronic Bill Presentment (EBP) and Procurement systems may not be introduced in India immediately. In India. companies are setting up websites even where there are no immediate tangible benefits to them from doing so.2010 E . Status of E -banking in India In Indian context. security software and website designing and maintenance. The corporate sector is adequately computerized and has already recognized the important role of e-commerce in future. In July 2005. correspondence and. and found that as compared to the banks abroad. the Indian internet population is currently over 25 million and is expected to grow to 100 million by 2007 (Survey by New Media Review. Indian banks offering online services still have a long way to go. While there are scores of companies specializing in developing e-banking software. 7. Although many major banks have started offering E -banking services. a large sophisticated and highly competitive E -banking market will develop. The internet which was initially perceived as a communication media is now metamorphosing into a powerful business media (Sakkthivel. Across the world. Several finance portals for provision of non-banking financial services. but only a few banks provide transactional E -banking. recently.200. There are a series of papers that observe that e -banking has revolutionized the banking industry and the banking industry is under pressure to offer new products and services. Increasingly. many publications throw light over the importance of e -banking and also its prospects for the Indian banking industry. ICICI is also getting into e-trading. but are likely to have a greater impact than the retail applications.Banking in India is currently at a nascent stage. (Internet World Stats. Internet users in India The role of internet is becoming inevitable to corporate and society. A survey carried out by Malhotra and Singh (2006) shows that only 48% of the commercial banks operating in India as on March-end 2005 offers e -banking. In India. there is a lot of scope for the research to present new ideas concerning e -banking in India which may be useful to the Indian banking industry. August 2005). Australia and India. to succeed in today’s electronic markets a strategic and focused approach is required. However.6% of the population.45 SRM Management Digest . the slow pace will continue until the critical mass is achieved for PC. By the year 2006–2007. However. governments and corporate are increasingly working towards the better utilization of the internet.

manage and control financial transactions. E – Banking services are replacing traditional services and creating a new scale in transformation. Mols. (c) TVbased banking. 1999). (2) E-channels are divided into 4 sub-groups on the basis of how the channel is seen by clients. transfer of funds between accounts and cash management services for corporate. In this paper. e. 1998. convenience. net. (b) telephone banking. updated information. The potential customers and big companies are shifting their accounts from traditional banks (not fully computerized) to E banks (fully computerized and provide different e – channels). There are about 17. In the initial stage. the services are extended to online bill payment. Credit and debit cards. online –banking and Smart Cards.channels were introduced in metropolitan cities and urban areas. Role of E . but recently some banks have started focusing on rural and semi urban areas. Electronic banking can also be defined as a variety of the following platforms: (a) Internet banking (or online banking). etc. faster transaction. a research firm based in New Delhi. 8. Services are one of the primary benefits which a customer looks for while adopting a new channel.000 Indian web users about their lifestyle and their web use. retail or corporate manager. the ATM (Automated Teller Machine) channel is also added to the research. 1999. card-related (ATM – Automated Teller’s Machine and POS –payment terminal). Thus.Banking in the Banking sector Electronic banking (e-banking) is the newest delivery channel of banking services. (1) The traditional channels are defined on the basis of the type of human assistance: teller. with some exceptions based on the technological processes of transaction execution: Internet-based (online bank for corporate clients Telehansa. do not transform their business by introducing IT. New private sector banks are taking the lead in capturing rural and semi urban sector. as now-adays IT is not a matter of convenience but a survival . Sathye. The definition of e-banking varies amongst researches partially because electronic banking refers to several types of services through which a bank’s customers can request information and carry out most retail banking services via computer. for example. their survival will become difficult. A number of banks have either adopted e -banking or are on the threshold of adopting it. The channels comprise two major groups: the traditional channels and e-channels. Mobile – banking. The consumers consider the benefits and weigh them against the costs associated. are changing the face of the retail banking sector. JuxtConsult. The banks started e -banking initially with simple functions such as getting information about interest rates. the country’s internet penetration rate is low. The different e.5 million urban dwellers in India who use the internet consistently with an additional 5. online bank for private clients Hanza.2 million who use it occasionally. checking account balances and computing loan eligibility. slowly but steadily. the Indian customer is moving towards e -banking. mostly public sector banks. Then. in India. It will add to the revenues of the bank. banks have started to facilitate payment of e-commerce transactions by directly debiting bank accounts or through credit cards. If traditional banks. Tele-banking.. and (e) PC banking (or offline banking).net. describes it as an electronic connection between the bank and customer in order to prepare. Recently. mobile bank) and Automated channels (“virtual” bank core channels where direct debit and incoming payments are effected). (d) mobile phone banking. Phone channels (call center. Burr.channels such as ATMs. The Internet offers a lot of benefits to consumers. surveyed urban internet users in April 2005 by talking to 30. 1996.SRM Management Digest . like any time anywhere banking. IVR. New private sector banks and foreign banks are attracting customers in a big way. offline bank for large corporate clients Telehansa).2010 46 Despite India’s technology outsourcing power. elevision or mobile phone (Daniel.

networking and security. Fully Electronic Transactional System This system allows bidirectional capabilities. order drafts. Customer can get all the information. It has been observed that customers who adopt online banking are typically more profitable to the bank. Information-Only System General purpose information like interest rates. which is. bank products and their features. 12. Therefore. there is no possibility of any unauthorized person getting into the production systems of the bank through the Internet. loan and deposit calculations are provided on the bank’s website. 11. 13. branch location. The prime factors or reasons for using Internet banking include convenience. The group divided the internet banking products in India into the following three types based on the levels of access granted: 10.47 SRM Management Digest . How E – banking creates values for the banks and their customers The major impact of technological revolution in banking can be stated in terms of: Paradigm shift from traditional banking to customized banking as the services can be delivered via computer. Information Technology and Internet banking has bridged the information gap. There is no interaction between the customer and the bank’s application system. stay with the bank longer and use more products strengthening the bank customer relationship8. It comprises of the basic requirements in terms of technology covering computerization. Here also. In this way he can enquire balance. In this environment. security standards. Electronic Information Transfer System The system provides customer-specific information in the form of account balances. 2001). Anywhere banking”. perform funds transfers.e. Transactions can be submitted by the customer for online update. There exist facilities for downloading various types of application forms. The communication is normally done through e-mail. constituted a working group on Internet Banking. No identification of the customer is done. Classification of Internet Banking in India The Reserve Bank of India (RBI). an advantageous proposition. “Anytime. In this. the web server and the application systems are linked over secure infrastructure. and statement of accounts.2010 factor. The information is still largely in the read-only format. The recommendations cover the risks that are associated with Internet banking technology. and more information available. status of cheques. The information is fetched from the bank’s application system either in batch mode or offline. request issue of cheque books etc. Identification and authentication of the customer is through password. e – banking services are a potent factor for transformation in this e – age. Convenient banking i. better control over finances. Customer can visit these websites and can compare the services offered by a bank with that of another. transaction details. The trend thus emerging out is that . Banks can make the information of products and services available on their site. the application systems cannot directly access the production systems of the bank through the Internet. saving of time. by saving money and time. and supervisory control of (RBI. 9. the central bank in India. A customer can check balance by logging into banks website through a user name and password. which was interestingly because of human involvement. Prospective customer can gather all the information from the website and thus if he comes to the branch with queries it will be very specific and will take less time of an employee. interbank payment gateway and legal infrastructure or introduction of Internet banking. This system requires high degree of security and control.

banks have been investing to computerize their branches and in new delivery channels such as ATMs. More private players and multinational banks are establishing their base in India. any inquiry or transaction is processed online without any reference to the branch (anywhere banking) at any time. These changes in technology. Suganthi R and Balachander K G (2002). credit cards. internet banking and mobile banking. Providing internet banking is increasingly becoming a ‘need to have’ than a ‘nice to have’ services. To provide their customers greater flexibility and convenience as well as to reduce servicing costs. Conclusion E –Banking has changed the traditional patterns of bank operations. Through e – banking banks can better maintain the relationship with customers because with e – banking customers tend to interact more with provided services. “Malaysian Regulation Versus E-banking”. Journal of International Banking Regulation. pp. However. “Technology and Innovation in Retail Banking Distribution”. This sudden surge has necessitated the use of technology in offering better services competitively. Vol.” Bank und Markt 11. This has been spearheaded by the liberalization in the insurance industry.SRM Management Digest . Actually the customer had to physically visit the bank office in order to carry out banking operations. Attaran M (2000). In true E -banking. 2. Vol. Several banks have been positioning themselves as a one-stop shop financial service provider with a fairly exhaustive range of products. Information Management and Computer Security. It also increases the revenues of banks and can easily gain competitive advantage through differentiation of banking services and thereby an image improvement. debit cards. . 4. phone banking. References 1. For example with over a million customer accounts. As a result. With the introduction of e – banking customers are saving money and time since they don’t have to physically visit the bank office. It can also be accredited to the current market characteristics. Earlier nationalized bank dominated the scenario. 98-100. “Managing Legal Liability of the Net: A Ten Step Guide for IT Managers”. 2. Bala S. banks have also been entering into the business of selling third-party products such as mutual funds and insurance to the retail customers.000 ATMs across country ICICI bank leads the way10 in private bank category. 16. W. 84-95. Now after deregulation private banks have emerged as a powerful force. pp. 600 branches and a network of 2. 14. The overall banking size and structure has increased considerably. there is a fierce competition among these players for capturing the savings of individuals and current accounts of organizations. investment advice.2010 48 of virtual corporate system where the human role is minimized to maximum effect. 1996. 4. a greater understanding of the impact of this relationships is essential. Burr. depository (custody services). International Journal of Bank Marketing. 15. bill payments and various transactional services. 1. Insurance industry is giving fierce competition through their offerings on various policies. 3. Devlin J F (1995). No. No. competition and lifestyles all have an impact on how banks operate today. These apart. “Wie Informationstechnik die Bankorganisation verändern könnte. including deposit products. loans. Every bank realizes that they must provide some kind of e – banking to their customers in order to survive. 8. Most of the banks have coupled IT with their offering to add value. Practical implications Banks are encouraging internet banking to reduce service delivery costs and improve service quality for customers.

pp. Strategies.. (1999). April 16. 1. E. D. October– December) ‘the impact of internet banking on bank’s performance: the Indian experience’. 4. 3. 2. 7. Daniel.49 SRM Management Digest . “Service quality in the banking sector: the impact of technology on service delivery”. 22. Vol.21 No.22. pp. 19. No. Elizabeth D (1999). Z. 26. K.6. 16. 17. Joseph. 4. pp. Rao. No. Managing Service Quality. 21. Moriarty R. “The Management of Corporate Banking Relationships”. and Sandra. W. pp. Available online at: www. (2002) Essentials of Services Marketing: Concepts. (2001).4. (2000) “Sizing up Home Delivery” Logistics Management & Distribution Report. D. Business Week Online.. B. No. J. 13. (2003) ‘Internet . Internet Research. 10. “Internet banking”. 245-300. P. 6. P. “The Internet and the Banks’ Strategic Distribution Channel Decisions”. 12. pp. 195–201. March. International Journal of Bank Marketing.8. 2nd Ed. “Internet Opens New Vistas for Indian Banks http://www. and Singh. No. and Joseph. B. D. K. 6. 1998. P. 191199. NJ: Prentice Hall. McClure. pp. M. No. Gupta. pp. Sloan Management Review. “The key determinants of internet banking service quality: a content analysis”. “Users’ Adoption of E-Banking Services: The Malaysian Perspective”. No. Journal of Financial Services Research. Jun. 5. p 51. Dasgupta.R. 1999. D. 23. Journal of Business and Industrial Marketing. International Journal of Quality & Reliability Management.G. N. 2. “The Diffusion of Internet Banking Among Singapore Consumers”. pp. “Put Your Money Where Your Mouse Is”. 16-28.2010 5. W. “Customers’ perceptions of online retailing service quality and their satisfaction”. Vol. 17. 2004. and Cai. & Kim. 72-82. Poon W C (2008). Mols. com De R and Padmanabhan C (2002). Vol. 19-25. 95-117. 23. and Keller K. International Journal of Bank Marketing. 5969. and Nolle. No. 13. 20. R. and Singh. 1. 14. trust. Vol. 19/7. C. Vol. Vol. Issue 2. C. 2. Mols N P (1999). P. December. and loyalty on the Internet”. International Journal of Bank Marketing. (2007) ‘Determinants of internet banking adoption by banks in India’. B. 21. “The Dynamo of E-Banking”. 11.expresscomputeronline.. No. Vol. 72–82. (2006).L. (2002). pp. pp. com/20020916/indtrend1. South Asian Journal of Management. R. Issue ½. Allard. No. “Comfort your online customer: quality. Lang. (2004). Gerrard P and Cunningham J (2003). Furst. 16. Kotler. 13. 15. Kimball R and Gay J (1983). 9. Hoffman.” International Journal of Bank Marketing. Vol39. Gerlach D (2000). International Journal of Bank Marketing. 1. Malhotra. pp.14. pp. (2006. 446-456.shtml.E. Journal of Contemporary Management. 2001. Upper Saddle River.25–54. pp. 25. and Prathima. S. 17. (2004). 182-191. 17. Vol. Dina.projectshub.” International Journal of Bank Marketing. International Journal of Bank Marketing. “The Behavioral Consequences of PC banking. and Bateson. Vol. (1999) ‘Internet banking: where does India stand?’. (2002) Future of e-banking in India. Vol. Jun.17. M. Marketing Management.. Spring. pp. 24. 18. Vol. G. E. S. No. Malhotra. PC World. “Provision of electronic banking in the UK and Ireland. Harcourt College Publishers Jedd. Yang. 276291. and Cases. M. 8. M. Feb 2000. “Provision of Electronic Banking in the UK and the Republic of Ireland”. Vol.323–339. 17. K.

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com .SSM College of Engineering.C. Organized Retailing is the second largest industry in the United States both in terms of the number of establishments and also in terms of employment. Traditionally the retail industry in India was largely unorganized.DuraiKannan. The foremost reason for this sea of change is the burgeoning middle class with a good amount of disposable Income. hypermarkets. This in turn would drive the other sectors like infrastructure. Now the consumer wants to shop at a place where he can get food. SNR Institiute of Management Sciences.0 Source: P. www. This has given Indian organized retail market a major boost. supermarkets. The retail segment is expected to grow 12-15% in the next 5 years (i.000 billion accounting for about 10% to the country’s GDP.grocery are available.Professor & Head B. Mexico.Professor Dept of Management Studies. Kearney to rank India as the most attractive retail destination.2 6666.e.9 3123. B. 5-6th Nov. The growth in the Indian organized retail market is mainly due to the change in the consumers behavior.2 3480. Dubai and more recently China. Growth of Retail Outlets in India (‘000) Outlets Food Retailers NonFood Retailers Total Retailers 1996 1997 1998 1999 2000 2001 2769.1 8542. Today retail sector exhibits a highly fragmented market structure with more than 12 million retail outlets.G. Indian retail industry is witnessing a fast paced revamping exercise where the traditional formats are making way for modern formats like departmental stores. Most of the organized retailing in India have started recently and is concentrating mainly in metropolitan cities. and shopping all under one roof.9 5773. Introduction Organized Retailing has played a major role world over in contributing to the nation’s GDP and in providing opportunities for skilled employment.6 6040. which are appearing in metros and second-rung cities alike. and small grocery stores. This can be best seen in countries like U. 2003.6 9966. Table 1. Indian organized retail market is growing at a fast pace due to the boom in the India retail industry. employment etc. by 2010) from a base level of Rs. A.Ravi.3 7055. Komarapalayam Dr. There are about 120 lakhs retail outlets with an average size of a unit being less than 500 sq. Evolution of Food Retail Chains: The Indian Context. In terms of ownership. changing lifestyles. comprising of drug stores. Asst. Lalith Achoth.Ramachandra Reddy and P. entertainment.0 3682. it primarily consists of independent. kirana stores where the basic necessities of life -.5 7482.S. Thailand. The retail business includes a variety of traditional retail formats e. owner managed shops.A.51 SRM Management Digest . specialty stores and Western-style malls..Coimbatore 1. It has the highest retail density in the world.ficci. In India the retail industry amounted to Rs 10.2010 GROWTH. medium.0 6332. 1800 Billion (in 2002).. Asst.M..Chengappa.0 2943. “Over the next 50 years India could emerge as the world’s third largest economy. and patterns of demography which are favorable. Sri Lanka. These vital statistics have led A.6 8983. Arpita Mukherjee.T.Sairam Subramaniam.5 10534. The organized retail market in India out of this total market accounted for Rs 350 billion which is about 3. This change has come in the consumer due to increased income. Ramachandran Director.g. CHALLENGES AND TECHNOLOGY IN RETAILING –AN INDIAN PERSPECTIVE A. Brazil. U. Malaysia Hong Kong.K. ft. According to the widely discussed Goldman Sachs BRIC report of October 2003.4 11165.4 3300.5% of the total revenues.6 9455.L.

8 million households (in 2001.5% p. it is difficult to imagine the Mom and Pop shops being driven out. Young Population with high disposable Income According to KSA Technologies. India has the lowest median age of 24 for over 1000 million populations when compared with the other populous countries like China. Louis Philippe. Shift in the profile of the Indian Customer It is estimated that the consuming class and the climbers are expected to grow from a level of 120.win situation for both the investor as well as the recipient country. new products and also employment generation on lines similar to the IT sector. Provogue.2010 52 2. Van Huesen. 3. 9. L’Oreal. Availability of Brands and Merchandise Consumerism and brand proliferation has been another enabler for organized retailing in India. The benefit of allowing FDI in India can be seen through the benefits that China has reaped by allowing FDI up to 49% in this sector.US $350m. 8. etc. . E.‘Kshitij’ and foreign fund ‘Horizon’. 5. Retailers are foraying into retail property development and mall management. Inbound Tourist / Impact of Globalization. 6. In India with the per capita consumption being quite low. Most of these Mom and Pop shops satisfy the “locality” requirements rather than the convenience requirement. Another booster is entry of foreign players and provision for 100% FDI in real estate for townships for retail with floor space of over 5. Rs. Fig. 7. Again the impact of globalization has resulted in an increase in both the depth and width of a product. This young population by virtue of its mere size would drive the consumption pattern as this group has the ability and willingness to spend.g.a. USA and UK. Most of the world’s largest and leading brands are currently available in India. 4. Foreign Direct Investment (FDI) in India FDI is a concept wherein a foreign partner invests directly in a company. The presence of a foreign investor normally is a win -. Pantaloon Retail’s Rs3. Changing pattern of households by income The changing size of the population especially in the age group of 20 – 34 years is very clearly depicted in following figure. This investment would be for the purpose of getting a higher dividend or for getting managerial control in the company. There is a large vast of NRI population in the country. DLF.00.000 sq. almost 56% (~ 46 million) is expected to be concentrated in urban India. which in turn has resulted in an increase in consumerism.8 trillions is being invested in real estate in coming 5 years 19. Tommy Hilfiger etc.02) to a level of 157. World Bank Study on FDI in India has suggested that opening of FDI in the retail sector in India would be beneficial both in terms of technological inputs. Rahejas. The Drivers of Growth of the Organized Retailing Sector Providing Quality Real Estate The government is easing land regulations and releasing land for retail.5bn fund. 6 & 70 demonstrates this amply. Normally a direct investment in a retailer organization gives the foreign investor a controlling interest in the domestic company. For e. The proportion of the consuming class and the climbers in the urban markets are likely to drive the demand significantly especially for lifestyle products. The availability of international goods at comparable prices is also one of the drivers of the industry.2 million households (in 2006-07) thus registering a growth of 5. Arrow. Pantaloon. Media Proliferation The presence of a large number of media and the corresponding exposures has led to the increase in consumer spending especially on apparels.SRM Management Digest .g. Peppe. ft. will develop 51 retail properties10. The Marketing White book has estimated that out of the total consuming class and the consumer class. This class is the relevant class for the retail industry and is growing very rapidly.

The sudden speed picked up by the retail juggernaut has left the support infrastructure in a state of inertia.Indian Supply Chain problems) Farmer Additional Cost Wastage Mark -up Price 100 Grower CoOperative 10% 2% 13. This causes logistics costs to be 10-12% of the GDP. and break even is difficult to achieve. would grow from 21% to 40% by 2025. India hangs between 4-10. Urban Opportunity Indian retailers inspired by Wal-Mart’s growth in small American towns are tempted to follow suit. when the global average is less than 5% 7. Absence of efficient logistics companies forces retailers to incur huge costs to set up individual SCM & logistics infrastructure. Challenges before retail sector However. stock-out levels among Indian retailers lies from 5 to 15%. lies a mountain of challenges. government policies are becoming favorable and emerging technologies are facilitating operations. 11. Retailers should therefore focus on the top 37 towns in the next decade.53 SRM Management Digest . the market is growing. retailers would take a long time to break-even.blogspot. While global retailer 7-Eleven has a stock turn of 50.com . Also. However. 13. Unless real estate costs lower.000 crore worth of food produce is wasted in India each year due of lack of a robust supply chain infrastructure. from 10. Measures of supply chain efficiency.an illustration) Source:3. as the opportunity in rural India is smaller and fragmented. Supply Chain & Logistics infrastructure 50. 40% 2% 50% 170 Retailer 25% 2% 50% 255 (Table-How cost escalates up the supply chain. Owing to space scarcity in major metros many retailers are entering tier 2 & tier 3 cities. in India the share of 35 towns with a population of 1 mn plus grows faster than their smaller counterparts. Also. Innumerable Intermediaries Inefficiency & Wastage Reduced Quality Increase in Price through the Chain (Figure . Infrastructural problems Shortage of retail space The traditional realty players don’t have retail property development experience as reflected in their exterior focused design and improper tenant mix.2010 10. The shortage is mostly visible in the larger metros due to the mall revolution & lack of town planning.2% today to reach 14. While the share of the towns in the overall retail market.4% by 2025.bp. The economy being in a developing phase poses structural support shortage. The challenges identified are: 12.2% 113 Distribution Co. behind this rosy picture. But the future is promising. so many of the top players have not tasted success so far. heavy initial investments are required by large retailers.

Only 3% of total Indian retail is organised.800-persons per outlet. By using technology. 19.3m outlets cater to 1. Availability of skilled personnel The non-availability of trained personnel especially at the managerial level is one of the key challenges to this sector. provincial operating models. invest in the supply chain. capital and energy costs Gain management flexibility 21. especially food grains. have wealth of retail experience from developed retail markets. Wal-Mart and Metro are experimenting with Radio Frequency Identification technology. This will also aggregate demand. Retailing in rural India is a different ball game because before targeting a share of their wallet. . the Indian rural market requires an income propeller. There are various restrictions on interstate movement of goods.SRM Management Digest . India is witnessing oversupply from unorganized formats like kirana & paanwalas. the Indian retail industry faces major challenges that are affecting profitability and its overall outlook for the future. The ability to hire and retain quality manpower will be one of the most important success factors for this industry 20. introduce larger product variety & improved shopping experience. bypass the existing intermediary system. i. consumers are becoming more technology-savvy and are demanding immediate access to information and a personalized experience. bulk purchases. 18. fragmented. Untapped Rural potential “India’s greatest need is to take the benefit of retailing to the doorstep of the farmer. retailers need enterprise solutions to secure sustained growth. Uncertain about benefits of technology Most Indian retailers are still uncertain about benefits of technology. Significant IT investments are needed in merchandise planning. They need to quickly learn that enterprise solutions such as Enterprise Resource Planning (ERP) systems can enhance their business. Around 4.” ITC chairman YC Deveshwar says.70% of India lives in villages & consumes over one third of most durable and nondurable products. 17. 16. 15. In China (2004) too the Ministry of Commerce has realised the rural potential and by 2009 will build a rural retail network.2bn people. Enterprise Resource Planning (ERP) Now more than ever. high proportion of retail business taking place in the ‘unorganized’ rural areas. There is high dependency on few consultants & vendors are not IT-savvy. state and local level to set up operations because there is no single window clearance process. Retail IT budget in India is currently 1% of total spends which is lower than US spends. The Chinese & Vietnamese retail markets too suffered from small-scale. Limited FDI It is depriving India of the resultant consolidation in the sector because foreign retailers provide employment. ensure lower prices to end-customers and higher returns to farmers. As operational costs climb. retailers can gain several benefits like: • • • Implement new initiatives more quickly: Simplify management: Improve application performance and availability: • • . 280-persons per outlet as against the global average of 1.e. Inconsiderate Regulatory Framework A retailer requires around 12 to 15 clearances at the Central.Reduce operational. The provisions of ‘The Shops and Establishments Act’ also vary. advertising. distribution management and POS to capture & analyse customer data . Fragmented Indian retail industry It is greatly fragmented compared to other the developed and developing countries. spend more on marketing. Fragmented market results in high inventory levels.2010 54 14. Companies are required to stand out from the competition in order to make their business profitable. While Indian retailers are still to adopt bar coding. Technology-A Trump Card for Retail In the current business environment.

. 28. products that sell. ERP solutions reduce overstocks with correct forecasting on performance of a product or promotion. Optimising inventory management With implementation of resource systems. improve end-of-day reporting. Smart Technology Reaps Richer Rewards Connecting with customers Meeting these challenges effectively within static or shrinking budgets becomes easier through an integrated approach. the solution assists in expediting checkouts. and unauthorized discounts 29. It helps reduce instances of shrinkage. Forecasting advanced business analytics Customers are becoming much more demanding these days. pharmacy. customers can rest assured that they have the correct inventory. 22. 25. thus providing all departments with a common forecast to drive the retail enterprise. manage and maintain multiple applications and interfaces. 27. view and print journals by batch or receipt number. 26. maintain security and reduce operating costs. fast food chains. realtime data. Speeding communication Accurate business analytics helps organisations make better decisions. collaborate more effectively with employees. furniture and furnishings. which is a critical requirement for any retail forecasting and replenishment solution. supermarkets. store. This greatly enhances the ability to monitor stocks and control wastage and pilferage. 23. forcing both large and small retailers to operate more quickly and efficiently. credit card fraud. Retailers need to use the strength of the network to connect with today’s consumer. manage inventory. Many ERP systems.55 SRM Management Digest . and ensuring reductions in processing and warehousing costs. false returns. Finally. In a connected retail world. and fine dining. merchandise category. provide integrated solutions for retail companies in the fashion industry. department stores. Efficient store management An in-store system uses magnetic strips. barcodes or RFID to monitor actual versus intended product location on the floor or in the stockroom. one can convert a satisfied shopper into a loyal advocate and in turn. and run reports by SKU. 24. health food. help increase sales. The solutions are designed to deliver the breadth and depth of functionality demanded by the busiest retailer. reduce costs and create competitive differentiation by enhancing customer services. Customers can cost effectively track sales by stock-keeping unit (SKU) and calculate turnover rates for a single item. Better understanding of customer tastes The solutions help retailers gain better understanding of their customers purchase patterns. and implementing automatic discounts for frequent shoppers. The solutions help retail companies with forecasting. or region. hypermarkets. without the need to build. efficient inventory and merchandising management. Benefits of enterprise solutions for the retail industry The enterprise solutions range from the integration of shop floor (point of sale) with top floor (corporate) functions to modular applicationbased development and deployment of solutions for the retail industry. and promotions which should be run. manage marketing promotions and increase sales. books and music. Scalable in size and business The solutions have the ability to manage a growing number of SKUs or locations in a scalable manner. targeting customer preferences to offer up-sells and cross-sells.2010 offering benefits like operations integration. or the entire organisation. improve efficiencies. retail solutions for instant call connection and efficient call routing.

Other retailers have been able to quickly tune product selections. employees. Improving collaboration and performance Consumers expect to find information on demand. even in an uncertain economy. management. highly fragmented. new opportunities exist for transforming traditional retail business models. easily and cost-effectively than ever before.38. and other convenient services that help generate higher revenue per square foot of the retail store space. one can also execute new retail strategies and implement new applications far more rapidly. adjust pricing strategies and take advantage of unexpected buying opportunities by using collaborative technologies to link essential members of their global supply chains. Retailers can create innovative customer experiences by connecting customers with product experts or other specialists using in-store kiosks or a consultative meeting room. Security. customers and suppliers. 30. voice and identity services are embedded in the network. Retailers must change the way they operate by doing more through the following ways: • Creating more technology-enabled solutions for consumers • Enabling better use of data for analysis and insight • Providing customers. rich connectivity. and products and services tailored to their preferences. Retailers can dedicate space for telepresence kiosks that provide on-demand access to non-retail expertise. Increasingly. banking. suppliers. India remains an exciting and dynamic market. retailers can transform multiple networks and point solutions into an agile architecture. with consumers hungry for choice and modern retail formats. centralised applications and flexible management capabilities help satisfy customers and employees while reducing costs and delivering business capabilities faster to various stores. A powerful collaboration solution and telepresence can help retailers increase sales. Using technologies such as telepresence helps improve operational and employee efficiency while delivering capabilities that can convert satisfied shoppers into loyal advocates.2010 56 By using the right solutions. These retail architectures. By 2015. For example. retailers and consumers need to share information among and across all channels for retailers to deliver products and assortments that sell well abroad and also in the niche market segments.000 employees across several countries and improve collaboration among its product teams and external creative agency. provincial operating model to a modern. To meet these high expectations at the point of purchase. retailers can provide users with access to the information at any time and by using any device. one can easily integrate access to information to users. video. time to market and response to trends. With network-based services available to all devices. As a result. The race for space is on. Integrating information and systems By using the network as a platform. with much still to go for! Despite the challenges involved. KSA Technologies expects the Indian retail market to have evolved from a smallscale. The ability to collaborate in real time enables the company to stimulate innovation and reduce time to market for new products. much communication and collaboration is required throughout the supply chain. In addition. such as healthcare. large-scale cross-regional one. Conclusion The size of Indian retailing sector is both an opportunity and a challenge. 31. reduce costs and achieve competitive differentiation.SRM Management Digest . media. Networks play an integral role . US-based Procter & Gamble uses telepresence solutions to link 1. store management and operations. Collaboration with critical supply chain members can help accelerate product innovation. mobility. associates and merchants access to information • Focusing less on maintaining old services and more on creating new ones 32.

www.p.thehindubusinessline. 6.theindiabusinessline.com 9. “Customized IT Solutions”.retailing360. TMH publications.in 14.indiaretailforum. But. boost revenue and productivity.M. New Delhi 2. thus encouraging work life integration and allowing organizations to reduce their carbon footprints. Sonpal Avirat. 8. Going forward. Levy. as retail executives develop their strategies for the future.13 11. Jagdish Mahapatra VP.com . Cisco India www. Retail Biz.p. “Retail Innovation”. it is also becoming much easier to accomplish as stores adopt a connected retail strategy that allows them to use the strength of the network to connect their brands to today’s consumers. connecting a brand to its customers has never been more important or challenging than ever before. Marketing Mastermind. “Retailing Management”. Economic times . References 1. Retail Biz.”small to big-the retail story. 4. Ghose Atanu. 5th Indian edition 2003. Retail Biz. It also has an environmental and social impact. . Parthasarathy and vimala.retailing360.”13th march 2007.19 10. “Hi-tech returns”.2010 in improving ROI and also supporting green strategies that can reduce costs and improve the quality of life for employees.57 SRM Management Digest . Obarski A. enabling employees to minimize travel. November 2006. www.www. work quality and strategic business processes that create a competitive advantage. December 2006 7. and significantly reduce travel spending.com 12. 3. www. Retail solutions are proven to transform business models. 5. 2004. ‘Retail Business is show business!’.”the Changing face of Indian retailing” Marketing Mastermind April 2004. Marketing Manager of Tectura . pp 58-62.’ The Great Marketing Rush’.com 13. Kotler Philip “Marketing Management” Millennium Edition.Weitz. Jayanta Bhattacharya. Divekar Remona. October 2003. Enterprise Business West. Srinivasan Priya. July 18. September 2006. Business Today. pp 23-24. Hence. one thing is clear: the competition for the customer’s attention and same store growth will be fierce.

However. A large young working population with median age of 24 years. government policies are becoming more favorable and emerging technologies are facilitating operations. cost. thereby injecting much greater dynamism into the market. With differentiating strategies . however. it will be technology that will help the organized retailer score over the unorganized players. information on softer issues such as demographics and psychographics is captured. the market is growing. accounting for over 10 percent of the country’s GDP and around eight percent of employment. Following the past trends and business models . the ground is all set for the organized retailers. The Indian population is witnessing a significant change in its demographics. classification. It is widely felt that the key differentiator between the successful and not so successful retailers is primarily in the area of technology. stores or vendor are carried out online.SRM Management Digest . quality. Simultaneously.R.Krishnan Research scholar. This will see a further segregation of the international retailing brands and the domestic retailers. 3. Besides vendors. nuclear families in urban areas. that the retailing industry in India is still a `protected industry’. Technology Impact The other important aspect of retailing relates to technology.2010 58 EMERGING TRENDS AND OPPORTUNITIES IN RETAILING SECTOR – A STUDY A. It has emerged as one of the most dynamic and fast paced industries with several players entering the market. `Data Warehousing’ is an established concept in the advanced nations. giving both cost and service advantages use less than three workers. Today. Besides knowing what was purchased and by whom. the focus of the retailing sector is to develop the link with the consumer. The Indian retailing sector is at an inflexion point where the growth of organized retail and growth in the consumption by Indians is going to adopt a higher growth trajectory. Retail in India is at the crossroads.market. change in the equilibrium with manufacturers and a thorough understanding of the consumer behavior. Given the current trend in liberalization. It would be important to note. variety. The traditional retailers will always continue to exist but organized retailers are working towards revamping their business to obtain strategic advantages at various levels . 2. online systems link point-of-sales terminals to the main office where detailed analyses on sales by item. It is one of the few sectors which still have restrictions on FDI. it will not be long before the retailing sector is also thrown open to international competition. Major Retailers in India • • • India’s top retailers are largely lifestyle.value for money. SRM University School of Management 1. the future is promising. They said. clothing and apparel stores. the heavy initial investments required make break even hard to achieve and many players have not tasted success to date. Retail Industry in India Retail is India’s largest industry. With the help of `database retailing’. information on existing and potential customers is tracked. shopping experience. knowledge and customer. discounts and advanced systems and technology in the back-end. This is followed by grocery stores. along with increasing working-women population and emerging opportunities in the services sector are going to be the key growth drivers of the organized retail.

000 people. consumers are on the look-out for more information. With increase in double-income households and working women. better quality and hygiene as well as increased customer service. In this scenario. a variety of other factors also seem to fuel the retailing boom. whereby they could have better utility of time. India has the largest number in the world. however. in size. Retailing Scenario-India The retail scenario in India is unique. even in this segment. in India there are no uniform trends with respect to consumer buying behaviour. seems to be the most important driving factor behind the sustenance of the industry. However. Being more aware.ft. Based on the distribution of the more than 15 lakh households in Chennai across income segments and the average spend. However. with over 12 million retail outlets of various sizes and formats.the Prime Mover A variety of factors seem to influence the growth in the retailing industry. 4. Organized retailing has definitely made headway in the upper class. Consumer. a conservative estimate of the grocery retailing potential at Chennai will be around Rs. Shoppers’ Stop and Lifestyle are likely to target metros and small cities almost doubling their current number of stores. the per capita retail space in India is being two sq. Trends and Opportunities Trends Rapidly growing middle class consumers Increase in per capita spending by consumers Consumer Pull Opportunities Changes in social structure and consumer behavior Growth in the no of double income house holds Less time at the disposal of DI families Through media and other communication networks Preference of products and brands Rising workforce with global travel Increasing usage of credit and debit cards Growing youth population Online retailing Retailer proximity to consumers Evolution of family owned establishment Changes occurring in the retail scenario Global retailers for FDI Corporate interest In retailing Source: Researcher Point of View 4. Most of them are independent and contribute as much as 96% to total retail sales.1. They are also seeking speed and efficiency in processing. India’s per capita retailing space is thus the lowest in the world. consumers are seeking the convenience of one-stop shopping. there is an increasing pressure on time with very little time being available for leisure. items such as milk. `Consumer Pull’. An analysis of the `monthly purchase basket of the consumers surveyed indicated that the average monthly household spends on food and grocery related items varied across income segments. as a result.ft. With more than 9 outlets per1. Almost 96% of these retail outlets are less than 500 sq.59 SRM Management Digest .ft. These changes in consumer behaviour also augur well for the retailing industry. 300 crores. Compared to the US figure of 16 sq. .2010 in the west retail giants such as Pantaloon. Table 1. Much of it’s in the unorganized sector. Besides increasing purchasing power.

vegetables and a significant portion of `throughthe-month’ purchases seem to be done at traditional outlets. The middle income class prefers shopping for processed food and personal care in supermarkets and fall back on traditional outlets for bulk shopping. The most critical issue in electronic retailing. drugs and pharmacy (Health and Glow. books/music/ gifts (Archie’s. HP Speed mart) and fast-food chains (McDonalds. Globus. Discount/shopping list groceries In order to appeal to all classes of the society. Organized retail outlets seem to be associated with branded items/special purchases. More importantly. apparel/ accessories (Pantaloon. Nilgiris. modern trade) makes up 3 percent or US$ 6. Dominos). convenience stores (ConveniO. Estimated to be US$ 200 billion. Ft. Internationally. The biggest question before organized retailers therefore. In a sense. Mini supermarkets. the size of the direct market industry is too limited to deter the retailers. such as jewellery. These include lifestyle/fashion segments (Shoppers’ Stop. Music World.SRM Management Digest . 5. Westside). typically 1. relates to payments and the various security issues involved. Jainsons. Convenience stores. electronic retailing does not suit products where `look and see’ attributes are of importance. The computer-savvy individual was also a sub-segment of the `store’ frequenting traffic.). Apollo). For a long time. however that foray has been made into a variety of new sectors. And the poor financial performance of most of the companies offering virtual shopping has resulted in store-based retailing regaining the upper hand.000-2. as of consumer durables. Reebok). which threatened to take away the potential of the store. Crosswords. ft.000 sq. as in apparel. Other forms of non-store shopping including various formats such as catalogue/mail order shopping. The emergence of new sectors has been accompanied by changes in existing formats as well as the beginning of new formats: Hyper marts: Large supermarkets. 7. This is slowly giving way to international formats of retailing. or where the performance has to be tested. and Apna Bazaar). typically 3. Vasant & Co.e. Levis. especially in the urban areas.500-5. 6. ft. As per a report by KPMG the annual growth of department stores is estimated at 24%. Landmark).of which organized retailing (i.4 billion. India is rated the fifth most attractive emerging retail market: a potential goldmine. Recent Trends Include: Retailing in India is witnessing a huge revamping exercise. Organized retailing does not seem to have made an impact on the lower class. direct selling. the very nature of the customer segment being addressed was almost the same. Trends in Retailing The single most important evolution that took place along with the retailing revolution was the rise and fall of the dotcom companies. Ranked second in a Global Retail Development I n d e x of 30 developing countries drawn up by at Kearney. Lifestyle. is whether this really means a huge untapped potential for the organized retailers and whether the conversion in mindset going to be easy. retail stores would have to identify with different lifestyles. is going through a transition phase not only in India but the world over. or where the value is very high. appliances and consumer durables (Viveks. It is the non-food segment. For all the convenience that it offers. the corner grocery store was the only choice available to the consumer. except for `curiosity’ shopping.000 sq. The traditional food and grocery segment has seen the emergence of supermarkets/grocery chains (Food World. this trend is already visible with the emergence of stores with an essentially `value for . A sudden concept of `non-store’ shopping emerged. the concept of net shopping is yet to be proven. The Emerging Retail Sectors Retailing. especially in a country such as ours. one of the largest sectors in the global economy.2010 60 fruits. However. typically 750-1. and so on are growing rapidly.000sq.

6 15. has been slightly different with a growth concentration in the South. one can assume that the retailing revolution is emerging along the lines of the economic evolution of society. The need for qualified and trained manpower is of utmost importance. The benefits of organized retailing will only be felt once an equitable scale is achieved.621 448. All the factors have acted favourably in nurturing the industry.248 551.5 18. ft.4 9. Vitan.Human resources. Hence.4 18.61 SRM Management Digest .2010 money’ image.9 12. however. the walkthroughs. average bill size and the revenue earned per sq. The need for specialized skills is increasingly felt in the areas of: Strategic management . The industrial boom has led to the emergence of new residential areas with aggregation of professionals as well as a rapid increase in the number of `double-income’ households and growth of the nouveau riche/upper middle class with increased purchasing power. This has been combined with the increasing need for touch and feel shopping (especially for the large migrant population). The attractiveness of the other stores actually appeals to the existing affluent class as well as those who aspire for to be part of this class. targeting and positioning. Chennai. pricing and so on Store management . However. India Forecast February 1st 2005 .5 Source: Economist Intelligence Unit.9 9.351 502. The choice of Chennai as the `retail capital’ has surprised many. display.2 2005 2006 2007 2008 2009 16.8 9.9 27.0 9. both in the IT sector as well as outside it.Layout. one of the most critical elements for the industry. proved to be the home ground for most of the successful retail names .2. finance. etc. Administrative Management . But besides resources and bottom-line.743 394. marketing and site selection.1. among others Merchandise management . Retail Management Skills It is a fact that the retailing industry is in its starting phase in our country.7 10.8 24.Food World. conservative’ and `cost-conscious’ market.0 6. 7. Chennai has been witnessing a high industrial growth and increasing presence of the MNCs.6 21. inventory management.7 13. Spread of Organized Retailing Organized retailing is spreading and making its presence felt in different parts of the country.704 608. in spite of being a rapidly growing metropolis offers reasonable real estate prices.strategizing. Music World. but a variety of factors acted in its favour.Vendor selection. What was considered a `traditional’. marketing and so on Table 2 Forecast of Retail Marketing in India 2004 Retail trade Retail sales (Rs bn) Retail sales (US$ bn) Retail sales volume growth (%) Retail sales US$ value growth (%) 16. customer relationship. a variety of other aspects need to be in place for tasting success. Subhiksha and Viveks -to name a few. inventory management. and bills per customer per year. 7.1 8. the Mecca of retailing is undoubtedly Chennai. Health and Glow. The trend in grocery retailing.7 6. This to a large extent depends on the store size.029 331.

will support steady gains in retail sales during the forecast period.2% in 2005-09 compared with growth in private consumption of closer to 6. loyalty schemes. In the case of more expensive consumer goods such as refrigerators. other factors that will support rising sales include a strong emphasis on retail technology. 2. private labels.5% of the total food retailing sector. around US$90bn-100bn of sales take place in supermarkets. The rising number of attractive stores and foreign brands. coupled with readily available credit. and other practical considerations Q. low interest rates. we make up our mind quickly Other Total No of respondents 43 18 12 22 14 109 Percentage 43 8 12 25 12 100 .2010 62 The retail sector in India is undergoing substantial growth and development. Apart from steady income gains. The greatest opportunities for retail sales growth are likely to be in the food and groceries sector. 4. The store loyalist hypothesis: Brand choice is determined by store loyalty. Consumers limit brand choice to brands carried by their favorite outlets. Several factors suggest that retail sales growth should remain strong over the next five years. and the task of the retail sales man involves little more than order taking. of the US$180bn-200bn in retail sales cited by the CII. 3. family-oriented shops to larger. organized retail outlets. driven by the impact of rising incomes. Retailing is undergoing a structural shift in India as supply slowly shifts from small. consumer financing has become a major driver in the consumer-durables industry. The rational shopper Hypothesis: Consumers select brands after a careful appraisal of product qualities –by objective comparisons of physical characteristics. such as music and coffee. increasing urbanization.6%. Analysis and their interpretations To explain why individuals choose particular brands of durables. The rest is composed of traditional kiosks and small shops. colour televisions and personal computers. Retail sales growth in India (in volume terms) during the next five years will slightly outperform growth in real private consumption. Among department stores. retailers are joining forces with banks and finance companies to market their goods more aggressively. The pre sold Consumer Hypothesis: Consumers have already decided on specific brands prior to entering retail outlets. The pliable customer hypothesis: Brand choice is determined by in-store influence -particularly by the actions of retail sales man.No: 1 How deliberately do consumers plan and shop for durables? Table :3 Factors Like to shop around carefully Like to shop around some Prefer to make up our minds and go and buy Don’t kike to shop. at an average annual rate of 8. Yet modern retailing large shops and supermarkets constitutes only about 0. 8.SRM Management Digest . The retail outlet is simply a pickup station. greater brand competition and a youth-driven culture. washing machines. price. four alternative hypotheses may be advanced: 1. and the subletting of floor space in larger stores to smaller retailers selling a variety of products and services.

we around some make up our around minds and make up our carefully go and buy mind quickly Other SRM Management Digest . frequently purchased products is contracted.No :2 In which specific features you keep in mind when you shop? Table 4 Factors No specific features Mechanical properties Brand Size or capacity Appearance Performance Price Total No of respondents 39 21 21 19 13 9 5 126 Chart 2 Percentage 31 17 17 15 10 7 3 100 35 30 25 20 15 10 5 0 Series1 Br an d ra nc e ro pe rti es fe at ur es an ce ap ac i sp ec i ca lp ec ha ni N o 9.2010 Percentage Q.63 Chart 1 Percentage 50 45 40 35 30 25 20 15 10 5 0 Don’t kike to Prefer to Like to shop Like to shop shop. durables are also impulse items. Implications The traditional marketing theory that consumers are impulsive only when it comes to buying inexpensive. and these research findings offer less support to the rational shopper hypotheses than might have been assumed by marketing strategies. To ascertain extent. M Si ze Pe rfo rm Ap pe a or c fic P ric e ty .

No:4 How do you rate the following factors are important Table 6 Factor Reputation of brand Durability Price Size Reputation of dealer Availability Financing Inside design Discount by dealer Color Visual sound and clarity Sieve offered Refrigerator 75 75 62 57 53 53 49 48 37 12 -- Television 72 65 41 52 39 77 48 Washing machine 69 60 33 44 44 45 35 13 -30 .2010 64 Q.SRM Management Digest .No:3 How do consumers rate potential brand choice determinants? Table 5 Factors Size Availability Price and value Competent sales people Reputation for quality Brand name availability Location Services Fashion Chart 3 No of respondents 90 80 70 60 50 40 30 20 10 0 Brand Size Competent name Availability sales availability people Services No of respondents 86 85 81 68 67 65 63 56 No of respondents Q.

make the technology easy to use 2. study the effect of technology on what people buy and on how they shop coordinates all technologies that it touches the customers use technology to tailor marketing programs to individual customer’s requirements build systems that leverage existing competitive advantage 8. Q. define 3. recognize that customers response to tech varies 4. Even among respondents reporting satisfaction with their previous brand.No:6 Do consumers switch brands? 11. Shopping for durable is not particularly deliberate activity 2. Product information is more likely to be contained by store visits than by advertising . Build systems that are compatible with the way customers make decisions 5. Recommendations use technology to create to immediate and tangible benefit to the consumer 1. 7.2010 Factor Media Advertisements Magazines articles Catalogs Total No of respondents 54 22 15 09 100 Chart 4 60 50 40 30 20 10 0 Media Advertisements Magazines articles Catalogs Percentage 54 22 15 09 100 Series1 10. Findings To a large extent customers do switch brands.No:5 What source of information affects brand choice? Table 7 SRM Management Digest . other studies show considerably lower level of brand choice decisiveness prior to shopping.65 Q. only 26% purchased the same brand again. 13. Implications Advertising media support the pre sold consumer Hypotheses. 6. test. Conclusion 1. execution matters: prototype. From the reports only 22% of buyers purchased the brand owned previously. 12.

AT Kearney Report. July – august 1999. 1955). Consumer behavior.Vedamani. 2. Pearson Education. 7. retailing management. Eva Mueller. The 2004 global 6. Clark (Ed). . 3.” A study of Purchase Decisions. P.” Factors Influencing Durable goods Purchases”. retail marketing management. The life cycle and consumer behavior.62.H. 4.68. References Priya Chandrasekhar.Clark (Ed). 2003. Global Management Review. Ltd. 5th ed.SRM Management Digest . Consumer Goods and Retail Forecast June 2005 www. 82-83. Vol. Tata Mc Graw Hill Publishing Co.com © 2005 The Economist Intelligence Unit Limited David Gibert. Business Line: Catalyst Thursday. Vol. 5. I. 8. 2001 1. February 15. New Delhi 2003. Vol IX. Harvard business review. 10. Consumer Behavior. 9. 4. PP.Ferber. 14. page no 163-168 R.12-19. Vol II. P. “Marketing for Home Appliances through Cyber Retailers”. Many customers shop without specific brands in mind Store loyalty is somewhat stronger than brand loyalty Brand switching is common retail 5.eiu. Part 2 sample Survey. Retail Management. Weitz. Barton A. Gibson G. “Small Retail Stores Thrive on Customer Relations an Empirical Study” Marketing Master mind. 1.” In L.H. issue 2 Feb 2009. Indian reprint. 2003 Michel Levy. Jaico Publishing House. issue1 Nov 2006 P.2010 66 3. The Dynamics of consumer reaction (New York: New York University Press.

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CUSTOMER RELATIONSHIP MANAGEMENT IN INDIAN RETAIL
Anupama.C.R Senior Lecturer, Dept of IT, IFIM B School Leela Prapurna PGPRM Student, IFIM BSchool

1. Introduction CRM or Customer Relationship Management is a company-wide business strategy designed to reduce costs and increase profitability by solidifying customer loyalty. True CRM brings together information from all data sources within an organization (and where appropriate, from outside the organization) to give one, holistic view of each customer in real time. This paper focuses on customer relationship management in the Indian retail segment. The following are some important facts about the current state of CRM in the Indian retail Industry • 75% of retailers believe customer-centricity is a “top three success factor” for 2009 and 80% of retailers expect an increased focus on consumer centricity this year, according to IDC’s new “The State of Customer Centricity” study[1]. The study, sponsored by Demand Tec and Precima, found that retailers need help with segmenting customers, identifying most profitable customers, and overall customer quality. The study found a significant difference between “high performers” and the rest of the pack when it comes to collecting the customer data that will inform key initiatives. The high performers use consumer insights more frequently in sales/ merchandising (80%) compared to the norm (60%) [2].

these most valuable customers and to leverage 80% non structured data of about 20% of these most valuable customers[3]. These facts highlight the importance of customer relationship management in the Indian Retail Sector. But the actual reality is that very little CRM initiatives are taken by the Indian retailers especially in the supermarket segment. That will be the main point of focus of this paper. 2. Literature Review Levy and Weitz, authors of “Retailing Management”[2007] define CRM as, “A business philosophy and set of strategies, programs, and systems that focuses on identifying and building loyalty with a retailer’s profitable customers.”In words of Parvatiyar and Seth (2001), “CRM is a comprehensive strategy and process of acquiring, retaining, and partnering with selective customers to create superior value for the company and the customer.”Greenleaf and Winer (2002) have explained CRM as, “Customer Relationship Management is a business strategy to select and manage customers to optimize long-term value.”. Maninder S Gerewal, Managing Director, Religare Technova, (2007) says“The primary driver is the need to change tracks to be able to grow in the current economic environment. The growth in the previous years meant focus on increased production and enhancing services delivery. This focus has now changed to customer need and customer retention and the ability to cross-sell in an identified target customer base.” Dwivedy of Microsoft (2009) says, “Today, getting new customers is a problem. Retaining them is even harder, which is in direct proportion to the growth factor of CRM”.

It’s a proven fact that 80% of organization revenue comes form 20% of its customers; it becomes imperative to design CRM solutions keeping in mind

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3. Nature and Scope of Study The paper is organized into two main parts. The first part deals with the retail industry in India in general and also it deals with the state of CRM in the Indian retail industry. The second part of our deals with the CRM in the supermarket segment. Primary data were collected from different sources to illustrate that there are no customer relationship management initiatives taken at the supermarkets. Suggestions include two architectures for implementing CRM in the supermarket segment. 4. Analysis of Retail Industry in India The Indian retail market, which is the fifth largest retail destination globally, has been ranked the second most attractive emerging market for investment after Vietnam in the retail sector by AT Kearney’s seventh annual Global Retail Development

Index (GRDI), in 2008.[2] The share of retail trade in the country’s gross domestic product (GDP) was between 8–10 per cent in 2007. It is currently around 12 per cent, and is likely to reach 22 per cent by 2010. The Indian Retail Sector has caught the world’s imagination in the last few years, topping the list of most attractive retail destination list for the past three years in a row. It had retail giants like wal-mart, Tesco etc sizing up potential partners and waiting to enter the fray. Indian Retail Industry is the largest employer after Agriculture (around 8% of the. population) and it has the highest outlet density in the world. The organized retail sector of India will form about 10 percent of the total retailing Business in India and is expected to worth US $70 billion by the end of 2010. The graph given below shows the predicted rate of the growth of retail industry in India

3000 2500 2000 1500 1000 500

All Figs in US$
2450 1705 1161 783 8 280 18 2003 2008 Modern Retail 410 110 2013 GDP 860 615 220 2018

Retail

Chart1: Indian Retail Growth Across
Source: Technopal Estimates Go/

Fig 1: Growth of Indian Retail In the Beginning unorganized retail dominated the Indian market. But now the trend is changing and organized retail is steadily growing and this is indicated by the graph given below.

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SRM Management Digest - 2010

Projected Retail Growth ProjectedRetail Growth

2010- 11P

43.8 460.6

2006- 07P

16.5 337.3 12.9 311.7 0 50 100 150 200 250 300 350 400 450 500

2005- 06E

Total Retail
Source: Crisil Research

Organised Retail

Fig2: Projected retail Growth The following are the major players in the Indian retail industry

Table 1: Major Retail Player in India

5. Present State of CRM in Indian retail CRM in retailing mainly deals with developing a business philosophy and set of strategies, programs, and systems that focuses on identifying and building loyalty with a retailer’s profitable customers. The main goal of using CRM in retail is to develop a base of loyal customers who patronize the retailer frequently [4]. CRM is an iterative process that turns customer data into customer loyalty through four sequential activities shown in the CRM Model Fig 3:Model of CRM
Implementing CRM Strategies / Programs Action Developing CRM Strategies / Programme Collecting Customer Data Learning Analyzing Customer Data and Identifying Target Customers

CUSTOMERS

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CRM is quite a new phenomenon in retailing industry [5]. It is only big retailers who have installed CRM systems to identify and track customer purchases and take appropriate management decisions, especially on managing customer relationships. Now, organized retailers like Big Bazaar, Westside, Shoppers’ Stop, etc., have started concentrating on providing more value to their valuable customers using targeted promotions and services to increase their share of wallet, i.e., the percentage of the customers’ purchases made from these retailers with these customers. Almost all of them have started Loyalty Programs, i.e., frequent shoppers program in order to reward the existing customers. These programs help the retailers in increasing the number of footfalls as well as enhancing their sales revenues and profits. For example, Shoppers’ Stop, one of the leading apparel retailer in India, had net sales of Rs. 1.6 Billion, increasing net profits by 96% with the company’s loyalty program, First Citizen Club (a CRM program) accounting for 63% of the sales 6. Customer Loyalty card Loyalty programs are structured marketing efforts that reward, and therefore encourage, loyal buying behavior — behavior which is potentially of benefit to the firm. In marketing generally and in retailing more specifically, a loyalty card, rewards card, point’s card, advantage card, or club card is a plastic or paper card, visually similar to a credit card or debit card, which identifies the card holder as a member in a loyalty program. Loyalty cards are a system of the loyalty business model. A retail establishment or a retail group may issue a loyalty card to a consumer who can then use it as a form of identification when dealing with that retailer. By presenting the card, the purchaser is typically entitled to either a discount on the current purchase, or an allotment of points that can be used for future purchases. Hence, the card is the visible means of implementing a type of what economists call a two-part tariff.The card issuer requests or requires customers seeking the issuance of a loyalty card to provide a usually minimal amount of identifying or demographic data, such as name and address. Application forms usually entail agreements by the

store concerning customer privacy, typically nondisclosure (by the store) of non-aggregate data about customers. The store — one might expect — uses aggregate data internally (and sometimes externally) as part of its marketing research. These cards can be used to determine, for example, a given customer’s favorite brand of beer, or whether she is a vegetarian. [6] Where a customer has provided sufficient identifying information, the loyalty card may also be used to access such information to expedite verification during receipt of cheques or dispensing of medical prescription preparations, or for other membership privileges (e.g., access to a club lounge in airports, using a frequent flyer card). 7. Major Loyalty card initiatives in India I-mint is India’s largest coalition loyalty program, with approximately 5 million members. BPCL’s “Petro-Bonus,” is a pioneering program managed by “Direxions,” and also one of the largest in the country with about 2 million members for the fuel card program. It also has variants for fleets and convenience store customers. Likewise IOC’s Fleet Card Program XTRAPOWER has recently crossed 1 million marks. IOC has launched a loyalty program XTRAREWARDS for Retail Customers.[7] The Maruti Suzuki Auto Card, launched in association with Citibank and Indian Oil had 370,000 cardholders as at October 2008. But our main observation is that CRM systems and some kind of loyalty card initiatives are present only in the malls and in the hyper markets in India. But in most of the supermarkets, there is no form of customer relationship initiative and not even the concept of loyalty cards [8]. 8. Customer Relationship Management in supermarkets-An Analysis In most of the supermarkets, very traditional methods are followed today also as a part of CRM. Some of them are • Personalized attention • Good quality of products • Home delivery • No upper and lower bound on shopping using food coupons

00 0. The Essentials of Point of Sale Terminals Point of sales (POS) or checkout is both a checkout counter in a shop.00 11990. The following are the main components Checkout system A checkout system generally involves the following components: • General computer hardware • Checkout hardware • Checkout software • Miscellaneous store hardware Checkout hardware Specific to the POS industry.28 1114. it is necessary to understand the billing process at the supermarkets. a “checkout” refers to a POS terminal or more generally to the hardware and software used for checkouts.00 279772. To understand the major points where CRM can be integrated in a supermarket setup.22 10.50 30. till wise – cash counter wise.71 SRM Management Digest .58 2674. the equivalent of an electronic cash register.60 1480.00 43984.2010 Discounted prices Faster billing Monthly account system Exchange of damaged goods without any terms and conditions Observation showed that even initiatives like loyalty cards are seldom undertaken by the supermarket personnel. Colloquially.15 4.00 Field Survey : 2010 .00 Total Bills 17 528 326 242 231 100 17 1 0 Items -12.00 104696.06 1.00 171747.05 3824.65 1.44 16.73 4547. generally including: • USB Credit card reader • USB Receipt printer • Cash drawer • USB Barcode scanner • USB PIN pad with Integrated Card Swipe Checkout software Top POS soft wares are the following: • Radiant/Aloha • Internally Developed • Micros • Smart Shoppe The following are the main types of sales data that be obtained from any POS terminal.00 108717. The sales data that we get from the POS is of 3 different dimensions. The following figures gives the snapshots of the data visualized in three dimensions Value wise: Table 2 : Sales Statistics Value Wise Value FromTo <= 0 0 – 200 201 – 500 501-1000 1001-2000 2001-5000 5001-10000 10001-20000 20001>= Total Sales -1600.68 5688.91 26.87 10.00 321827. value wise – slab wise. and the location where a transaction occurs. They are time wise – sales generated for each hour. Essentially the billing process at supermarkets is done with the help of point of sale terminals also called as POS terminals. A POS terminal manages the selling process by a salesperson accessible interface.00 Per Bill Sale Value Item -94 83 334 710 1393 2798 6159 11990 0 -1 3 8 16 25 46 66 1 0 Sales Distr % -0.15 0. The same system allows the creation and printing of the voucher. The next section highlights the working of a POS terminal • • • • 9.00 0.

00 1041133.52 10.00 61312.27 8.00 31094.2010 72 Table 3 : Sale Statistics Time Wise Bill Time From-To 09 : 00 – 09 : 59 10 : 00 – 10 : 59 11 : 00 – 11 : 59 12 : 00 – 12 : 59 13 : 00 – 13 : 59 14 : 00 – 14 : 59 15 : 00 – 15 : 59 16 : 00 – 16 : 59 17 : 00 – 17 : 59 18 : 00 – 18 : 59 19 : 00 – 19 : 59 20 : 00 – 20 : 59 21 : 00 – 21 : 59 22 : 00 – 23 : 59 Total Total Total Sales 5950.00 Field Survey : 2010 .00 28985.82 424.93 1949.36 Per Bill Sale Value Item 350 676 623 704 662 774 820 657 685 12 798 720 705 1481 712 12 15 12 15 14 13 14 13 13 593 13 14 13 20 13 Sales Distr % 0.00 90600.30 8.76 1820.00 72759.54 85.34 2033.49 1458.00 Table 4 : Sales statistics bill wise Till Number 6 7 10 12 13 14 16 17 19 20 22 24 28 31 32 45 16 Total Sales 31961.51 1642.00 7206.57 2.00 53507.16 31781.36 2482.89 11.00 1041133.99 100.32 712.43 5.33 14.00 Bills 17 41 51 76 131 94 88 116 124 150 187 210 156 21 1462 Items 198.99 6.66 3.00 151134.51 589.93 7.00 86764.74 0.00 Total Bills 71 76 121 105 109 95 193 88 125 48 80 57 53 113 107 21 1462 Items 214.58 1655.00 39575.15 8.84 1691.00 107215.36 10.05 5.00 2852.00 110007.25 1205.03 1567.00 70163.36 450 49 886 864 972 954 712 697 952 1100 362 694 54 811 656 343 712 Per Bill Sale Value Item 3 2 17 16 18 18 16 17 18 15 4 3 1 15 15 4 182 Sales Distr % 3.80 6.00 137445.20 5.74 149.33 6.85 1749.SRM Management Digest .69 2035.43 1743.00 91635.69 100.00 27725.00 76159.00 52801.78 3.00 105932.00 2083.80 0.71 10.00 84903.35 19318.07 0.07 2.38 2258.00 74.16 19318.00 149156.00 119028.01 596.00 72191.70 13.00 133.00 88947.15 1461.32 8.29 1109.00 90668.14 8.95 1236.17 8.00 3755.54 14.85 319.59 3146.57 2.

2010 The following are the important analysis that we made about the sales data from the supermarket We have made the analysis using one year sales data # bills 500 400 # bills 300 200 100 0 07-08 08-09 09-10 10-11 11-12 12-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-07 AM AM AM AM PM PM PM PM PM PM PM PM PM PM PM PM PM AM Time Monday Tuesday Wednesday Thursday Friday Saturday Sunday Fig 4: Bill wise Analysis # Items per bill 25 # Items 20 15 10 5 0 07-08 08-09 09-10 10-11 11-12 12-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-07 AM AM AM AM PM PM PM PM PM PM PM PM PM PM PM PM PM AM Time Monday Tuesday Wednesday Thursday Friday Saturday Sunday Fig 5: Analysis of Number of items per bill The following are some of the important observations from the analysis: • Number of items per bill stay flat in a day • Weekends see 50% increase in the umber of items per bill • Number of bills peak during 11am-2pm and 6pm-10pm • Weekends see 100% increase in the number of bills generated • Load factor during peak hours of a weekday equate to off-peak on weekends From the above details it is very clear that though different types of analysis can be done with the help of the data collected from the POS. none of them contain even a single piece of data about the customers. .73 SRM Management Digest . The entire billing time can be divided into scanning time and trading time.

5 01-10 11-20 21-30 31-40 41-60 61+ # Items per bill Cash Coupon Credit Card Trading Time (in minutes) Fig 7: Average trading time Iy wa found that even two parameters are added to get the customers details (say for example customer name & address) while billing during trading time it may affect only 1% of billing time.0 0. coupons). We have identified that following are some of the main advantages of tracking the customer details: • Identify loyal customers • • • • • • Take steps to retain loyal customers Track buying patterns of customers Design customized promotional offers to boost sales Helps in category management (based on which combinations of products are sold together) Forecast sales of products Make efficient inventory &product planning . In the next section we propose two architectures that can be used in supermarkets to track details of loyal customers as well as track buying patterns of customers.SRM Management Digest . credit cards. Scanning Time 12 10 8 6 4 2 01-10 11-20 21-30 31-40 41-60 61+ # Ietms per bill Cash Coupon Credit Card Scanning Time (in minutes) Fig 6: Average Scanning Time Avg.0 1.2010 74 Scanning time: The time taken by the cashier to scan the items.5 2.5 3. Trading time.0 2.5 1. The time taken to complete the trading process (mode of payment . Trading Time 3.cash. The cashier can make use of the trading time to get the details so that we can track the details of the customers as well. Avg.

the customer will be charged according to the extent of usage of the software. The first architecture is given below POS TERMINAL Database Data Mining tool Customer Details Fig 8:Architecture The following are the main implications of the architecture • • • • • A DBMS is required Space in the supermarket for placing the server One/two people to maintain and manage the entire setup An initial investment of about 50.000 is needed every month as a cost towards this set up Advantages • • A secured feeling of data/information for the supermarket owners Since all the data is available within the building itself. it can be used to perform any kind of analysis at all points of time We feel the above architecture can be used at well established supermarkets with significant daily turnovers.This is a pay and use model in the sense. For start ups we are suggesting an alternative architecture using the concept of software as a service (SaaS). A memorandum of understanding is signed between the service provider and the customer based on the terms and conditions of the usage of software/service.75 SRM Management Digest . . This is how software as a service model works.000-75. allocation of space etc. employing people. As and when the customer wants to stop the usage of software /service. he is free to do that and inform the service provider about the same. But the main benefit is that the customer does not have the responsibility of maintenance.000 Rs is needed An extra amount of Rs 30. 10. Architecture for implementing customer Tracking system in supermarkets We are proposing two architectures for implementing customer tracking system in supermarkets.2010 In the next section we propose two architectures to implement customer tracking systems in supermarkets./ service. The architecture given below uses this concept.

But making them realize the importance of CRM and making them adopt measures will still take some more time. June 2008. In a place like India where there is a supermarket at a distance of every 5-10 kilometers. References 1) KPMG_Analysis_and_Retailers_Association_of_India 2) Cartesian Economic Meltdown Survey. Conclusion Customer Relationship management is very important in the present scenario when the whole world is suffering from something which is often referred to as “global meltdown”.aspx . One of the ways in which the retail industry can recover faster is by revitalizing relationships with the customer. The retailing industry in India is also affected to a great extent. 5) Indian Retail Industry by Rocsearch 6) http://www.SRM Management Digest . hence making them understand and accept this concept is difficult.com/Articles/News/Daily-News/What-Is-CRM-46033. For this purpose the concept of customer relationship management is very important. 11.destinationcrm. Dec 2008 3) KPMG Analysis.2010 76 POS Terminal SaaS CRM Customer Details Fig 9:Architecture 2 Advantages of this model • Cost effective because it is pay according to usage • • No extra space required No extra people need to be employed Challenges involved • • The supermarket owners may feel insecure about their data Most of the supermarket owners are not tech savvies. adoption of Customer centricity measures at the supermarkets is very crucial for their success or sometimes even for their survival. Prowess 4) A T Kearney’s Report.

travel. AMU Aligarh 1. and security in consumer e-satisfaction assessments. a diverse range of businesses operate in the market such as firms with Internet stores only like Amazon. Whatis. 1997 was also the year in which Auto-by-Tel reported that they had sold their millionth car over the Web and Nielsen Media reported that 10 million people had made purchases on the Web and it was predicted by Jupiter research that e-tailing would grow to $37 billion by 2002. walk-in retail. to qualify as Internet retailing. This paper aims at defining the term e-retailing and examining the role of online convenience. There has been an exponential increase in online shopping and the unprecedented rate of growth in the number of retailers selling online.77 SRM Management Digest . mail-order phone.com. E-retailing has resulted in the development of software tools termed as e-tail ware for creating online catalogs and managing the business core related to e-retailing. or purchasing incentives such as coupons. E-retailing began to work for some major corporations and smaller entrepreneurs as early as 1997 the year when Dell Computer reported multimillion dollar orders taken at its Web site. the Internet must serve as a channel for selling to consumers. As for classifications of Internet retailing. Sinha and Gvili in 2001 defined it as “Web retailing consists of transactions of products and services over the Net to final consumers. or financial service sites. Currently the most important concerns of people with respect to e-commerce and e-retailing are security. Department of Business Administration. A new trend is the price comparison site that can quickly compare prices from a number of different e-retailers and link you to them. ( Schappell 2000) . privacy and consumer protection issues.com in 2000 defined it as the selling of retail goods on the Internet. and it is being found that convenience. site design. The Web and the Internet are just one another communication medium with its own benefits and disadvantages. merchandising. nor other types of e-commerce sites such as auction. reservation. Introduction Business is done with many communication technologies today. mail-order fax etc. multi-channel retailers with Internet as well as fixed location stores like Woolworths. non-business use. and financial security are the dominant factors in consumer assessments of e-satisfaction. Today’s e-retailers promise their customers that online experiences will be satisfying ones. This definition also reaffirms that the online sale of both tangible goods and service offerings are relevant to the domain. E-retailing has made internet an extremely competitive marketplace where most e-retailers have yet to turn a profit. E-Retailing: Definition & brief history It is proposed that Internet retailing should be defined as all the activities involved in selling goods or services via the Internet directly to final consumers for their personal. site design.2004). product reviews. Salma Ahmed Reader. 2. manufacturers that sell directly to the public over the Internet like Reebok (Francis & White.” Internet retail sites consist of web sites where visitors can actually purchase product and don’t include shopping domains that provide free downloads.2010 E-RETAILING: ATTRIBUTES AND SECURITY CONCERNS Saleem Hadi Research Scholar Dr.

Fast. we expect more extensive and higher quality information available online to lead to better buying decisions and higher levels of satisfaction. According to Manes (1997) a good Web-site design is about good organization and easy search. Buying better quality items.SRM Management Digest . intuitive and user friendly it is accepted that a convenient website provides a short response time. they are less likely to come back. and fast presentations. uncluttered. (Szymanski & Hise) Potential ecommerce customers will typically scan a number . Finally.2010 78 3. This includes offering consumers uncluttered screens. in turn. (Chung and Shin 2008) Site Design and Usability In addition to possible convenience and merchandising effects.000 titles but an Amazon. Convenience also includes but is not limited to the extent which a customer feels that the website is simple. The probability of locating any one title would be higher at the online store. 1997). Merchandising Perceptions of online merchandising represent another set of elements that positively impacts e-retailing. find items. a traditional book superstore may carry 150. Consumers do not have to leave their home or travel to find and obtain merchandise online and also have the luxury of browsing items by category. E-Retailing attributes Shopping Convenience E-retailing is promoted widely as a convenient avenue for shopping. the ambience associated with the site itself and how it functions could play a role in whether consumers are satisfied with their online shopping experiences. This is especially likely when consumers’ desire items not widely distributed example specialty goods which are produced in limited quantities. Merchandising is defined here as factors associated with selling offerings online separate from site design and shopping convenience.com carries millions of titles. and procure offerings (Balasubramanian. can improve satisfaction by delimiting the costs of failed products. If customers are stymied and frustrated in their efforts to seek information or consummate transactions. however. refers to the selection available on the Internet in general. and easy-to-navigate sites economize on shopping time. facilitates fast completion of a transaction. This includes the product offerings and product information available online. Because of the nature of the medium itself. Each of these elements of site design could impact customer satisfaction levels. online customers have come to expect fast and efficient processing of their transactions. Shopping online can economize on time and effort by making it easy to locate merchants. uncluttered. or which are unavailable at brickand-mortar stores because shelf space is limited. Secondly. It seems reasonable to expect that customer satisfaction would be more positive when consumers perceive online stores to offer superior product selections. simple search paths. which is often perceived as limited as compared to the retailer’s offline stores and even catalogs. the wider assortment of products can include items of better quality that may be attractive to consumers. The probability of consumers satisfying needs online would also be higher. These time and browsing benefits of online shopping join to make e-retailing a more positive experience. rather than the selection on individual sites. It seems reasonable to expect that satisfaction would be higher when consumers perceive online stores to offer superior product assortments as superior assortments can increase the probability and the consumer needs will be better met. Importantly. online buyers’ perceptions that e-retailing offers them better selection. Shopping is thought to be pleasurable and satisfying to consumers when the retailing sites are fast. and minimizes customer effort. The lower search costs traditionally associated with online shopping are thought to result in consumers buying better quality items. For example. and easy-to-navigate.

The reasons are not exclusive to these systems.com/articles/usability- tips-for-ecommerce-web-design.2010 of web sites before deciding on one to buy from. Follow up to make sure questions have been answered satisfactorily. A measurement of usability consists of several different factors.html • User Friendliness Many sites are abandoned on the forms page it should be made sure that not too much information is being asked for from customers. Anywhere from 30 to 60 percent of customers abandon their shopping carts at the last moment due to usability problems. viruses being the most common of those. description or price. These programs allow data integrity and fraud attacks to originate from a seemingly valid client system and can be extremely difficult to resolve. • Avoid a cluttered layout The web design should make it clear to visitors what it is that they will find on the e-retailing web site. using only one or two pages and requesting the necessary information. so it is important that your web design be structured for usability. As a result. Surveys and other data collecting methods that people may find intrusive must be used. by name and by the date added. won’t give the visitor a clear idea of what they can or should do on the site. • Make it easy for customers to find Products in different ways This becomes especially true if there are a large number of products on the site. There are a number of reasons why security vulnerabilities arise in shopping cart and online payment systems. Threats to E-retailing E-retailing or broadly e-commerce systems have to cope with many threats and nuisances. Fix what needs fixing. • Make the Checkout Process Very Simple The one place you will lose ecommerce customers with bad web design is in the checkout process. they disrupt e-commerce operations and have been termed as a Denial of Service (DoS) tool.impliedbydesign. encrypted client-server communication. but their impact becomes much greater simply because of the wide exposure that an online website has. and because of the financial nature of the transactions. publicprivate key encryption schemes are all negated by the simple fact that the Trojan horse program allows the hacker to see all clear text before it gets encrypted. A hacker can initiate fraudulent orders from a victim system and the e-commerce server wouldn’t know the order was fake or real. (Marchany & Tront 2002). they should be given the option of searching it by name. • Add search capability If customers have something specific in mind. 2008). Make sure to use clean web design layouts for the forms and the confirmation pages. (Wehr. ask your friends to test the system. Search should be made simple and straightforward. . and provide options for them to reach you. A design layout. http://www. but boils down to how well a web site gives its visitors what they a really looking for. so that customers don’t inadvertently get lost in overly helpful web design. Below are some of the features that make a website usable and provide the customer with a satisfactory stay and use. And make sure email links and phone numbers reach people who can actually help. Password protection. You can avoid this by keeping the checkout process simple. There are bigger threats than viruses and it comes from The Trojan horse remote control programs and their commercial equivalents. Check the time it takes for a real person to respond to an inquiry. Invite Feedback from the customers.79 SRM Management Digest . 4. Some customers might be looking for something inexpensive while others will want to browse the newest products. Once again. cluttered with too many options. Room should be made on the web design layout for navigation in product categories it should allow a potential customer to browse products by price. The customers should be given shortest route from their entry point to what they’re looking for. One of the main reasons for such vulnerabilities is the fact that web application developers are often not very well versed with secure programming techniques.

this has always been the case but on the web where business is conducted at a distance and risks and uncertainties are magnified it becomes truer than ever. The attacker can automate to go against multiple sites at one time. Nowadays. We’ve typically found this in cases where e-commerce sites need to add functionality rapidly to deal with a sudden change in the business environment or simply to stay ahead of the competition.g. . For example. or that attack popular user ID/password combinations. E-commerce security strategies deal with two issues i. Automated attacks have a higher likelihood of success. and only successful if the attacker knows something about the shopper. and this requires complex designs and programming logic. such as SATAN. Online customers can’t look a sales clerk in the eye.K. This style of attack is manual or automated. Tools exist that use all the words in the dictionary to test user ID/password combinations. 5. trust does. 2000). A firewall is a hardware and software system that allows only those external users with specific characteristics to access a protected network. 2004). The main tool businesses use to protect their internal network is the firewall. Transaction privacy can be threatened by unauthorized network monitoring by software devices called sniffer programs. In such a scenario. integrity.2010 80 security of the application is not necessarily one of the design goals. web access) between the Internet and the internal network. can’t see and touch products. Another reason why security vulnerabilities appear is because of the inherent complexity in most online systems.SRM Management Digest . availability and the blocking of unwanted intrusions. because the probability of guessing a user ID/password becomes more significant as the number of tries increases. Popular technique for gaining entry into the shopper’s system is to use a tool. The firewall has now become the main point of defense in the business security architecture. and also accomplishing transaction security between the customer and the business as it is most critical to bolstering consumer confidence in a particular e-retailing site. Manual attacks are laborious. One attribute that e-shoppers name as most important is trust. The security of online transactions continues to dominate discussions on Internet commerce and perhaps with good reason. email. authenticity. ( Marchany & Tront 2002) Another common attack is to guess a user’s password. the attitude is to get the functionality online. The original design was supposed to allow only specific services (e. protecting the integrity of the business network and its internal systems. Security issue of E-Retailing To gain the loyalty of customers their trust must be gained first.e. Transaction integrity requires methods that prevent the transactions from being modified in any way while it is in transit to or from the customer. Transaction security depends on the organization’s ability to ensure privacy. (Reichheld & Schefter. This is exacerbated by the rush to meet deadlines in the fast-moving e-commerce world. Even one day’s delay in publishing a brand new feature on your website could allow a competitor to steal a march over you. users are placing very demanding requirements on their e-commerce providers. if the shopper uses their child’s name as the password. According to certain surveys 75% of Internet shoppers emphasize credit-card security as a major consideration when deciding whether or not to buy items. K. (Mokhey. they have to rely on images and promises and if they don’t trust the company presenting those they will shop elsewhere. Price does not rule the web. Encryption is the most common method of ensuring confidentiality and Error checking codes are an example of such a method. In view of the above scenario it becomes imperative for e-retailers to put emphasis on security of the data collected from the customers and also employ ways for protecting the integrity of their network. security can always be taken care of later..

Upon entry. Protection of Transactional Information: Sensitive information has to be protected through at least three stages. The intruder can also scan the hard drive to detect any stored passwords. Now. 6. Defenses Despite the existence of hackers and crackers. the system is only as secure as the people who use it. the attacker can use various techniques to gain entry into the user’s system. SET uses PKI for privacy. A PCI (peripheral component interconnect: hardware) card is often added for protection. 7. customer and bank. they scan your file system for personal information. (Khusail & McKegney. and routine external security audits. the browser identifies the server as a trusted entity and initiates a handshake to pass encryption key information back and forth. such as passwords. and is not kept on the merchant’s server. they are not silver bullets. The companies will pursue every legal route to protect their customers but at the end of the day. or another approach altogether is adopted: SET (Secure Electronic Transaction) which is developed by Visa and MasterCard. the user disables enough capabilities to render the firewall software useless. Based on the opened ports found. Equally important is protection from malice or carelessness within the system. but once stored on the server they are vulnerable to outsiders hacking into the server and accompanying network. To resolve the conflict. and digital certificates to authenticate the three parties: merchant. Peripheral Component Interconnect (PCI). While software and hardware security solutions available protect the public’s systems. e-retailing remains a safe and secure activity. A personal firewall helps protect computer by limiting the types of traffic initiated by and directed to it. he can snoop onto the Network connection between shopper and Web site’s server or even attack the Web site’s server. The attacker can target the shopper’s computer and scan it for useful information. Appropriate Passwords: Use appropriate password policies. sensitive information is not seen by the merchant. following are few of those Installing personal firewalls: A computer is connected to the network it becomes vulnerable to attack. A user that purchases firewall software to protect his computer may find there are conflicts with other software on his system. Credit card details are supplied . on subsequent requests to the server. Vulnerable Points that the attacker can target Vulnerability of a system exists at the entry and exit points within the system. Encryption: Confidential information should be stored in encrypted form. Secure Electronic Transaction (SET) and Kerberos: Credit card details can be safely sent with SSL.2010 to perform port scans on a computer that detect entry points into the machine. firewalls. and many companies use the Kerberos protocol. Rogue programs can also be produced targeting the software vendor or even the shopper can be tricked into false transactions or even into giving his sensitive passwords. Education is the best way to ensure customers take appropriate precautions. which uses symmetric secret key cryptography to restrict access to authorized employees. More importantly. The resources available to large companies involved in e-Commerce are enormous. Secure Socket Layer (SSL): Secure Socket Layer (SSL) is a protocol that encrypts data between the shopper’s computer and the site’s server. 2005).81 SRM Management Digest . the information flowing back and forth is encrypted so that a hacker sniffing the network cannot read the contents. When an SSL-protected page is requested.

(2001). In some cases.’ Informationweek. ‘Web Sites: Slow by Design?.html 8. Dissertation. K. H.impliedbydesign.’ Ph. Szymanski. when these details are passed to the bank for processing they go through complex security measures of the payment gateway and when customers order and details are with the merchant it is handled by SSL. Chung. Fox School 2. Mookhey. Wehr. What is at stake is not only a direct loss of revenues. Sridar. ‘Two Essays in Direct Marketing. Stephen.SRM Management Digest . http:// www. G. ‘Common Security Vulnerabilities in e-commerce Systems’. and Tront. Schappell. (2004) ‘Internet Retailing: Back to the Future’ Macquarie Graduate School of Management http://74.html Accessed: 27/11/09 9. To counter this trend. Y.com/ecommercesecurity-issues. (2008) ‘The Relationship among e-Retailing Attributes. as the vulnerabilities acquire a graver dimension due to the financial nature of transactions on these sites. Yale University. D. practicalecommerce. References 1. J. 4): 124. techtarget. D.com/articles/730-Five-FastSteps-to-Improve-Website-Usability Accessed: 27/11/09 10. s i d 1 8 2 _ gci212079. 7. pdf+E-retailing.securityfocus.+convenience&cd=10&hl=en &ct=clnk&gl=in Accessed 26/11/09 6. R. E. M. (2008) ‘Usability’ http://www.132/sc holar?q=cache:NHSocH5uO9kJ:scholar.com/ D e f i n i t i o n / 0 .132/ search?q=cache:F78zVHC75MgJ:www. (1997).00.153. It is of paramount importance for designers and developers of web applications to consider security as a primary design goal and to follow secure coding guidelines in order to provide the highest possible degree of assurance to their customers. it becomes highly essential for businesses to pay due attention towards the modalities of the online business and issues of network security at the ecommerce sites. http://www. (1997). R. ‘A Cross-Regional Study of Consumer Perceptions of Shopping on the Internet’.D.com/infocus/1775 Accessed 27/11/09 11.2010 82 to the merchant or the payment gateway is handled by the server’s SSL and the merchant/server’s digital certificates. (2004). com/++E-retailing+definition.org/index. kinforms. Sinha. Conclusion Without trust. (2002) ‘E-Commerce Security Issues’ Proceedings of the 35th Hawaii International Conference on System Sciences – 2002 . . most prudent business operators and clients may decide to forgo use of the Internet and revert back to traditional methods of doing business. & Shin. K. (October 2000 http://searchcio. J. Manes. J.google.+advantag es&hl=en&as_sdt=2000 Accessed: 26/11/2009 3.125. T. Francis.155. but companies may face a serious loss to their reputations as well. server security and digital certificate.html 4. C. New Haven.CT 5. Volume 3 Number 1 Summer 2008 http://74. Usability Tips for Ecommerce Web Design http://www. L. Marchany. & Hise. (August. K. and White L.+scope. Balasubramanian.com/articles/ usability-tips-for-ecommerce-web-design. & Gvili. ‘e-Satisfaction:An Initial Examination’ Texas A&M University 8. they may be faced with legal penalties for violating customer privacy or trust. I. I. 9. Temple University.eSatisfaction and e-Loyalty’ Management Review: An International Journal.125.files/MRIJ3(1)2008(2).ecommerce-digest. EBI Working paper (number EBI-2001-03).

it is noteworthy to point out that problem solving did not record strong positive correlations as compared with the other dimensions when it came to intention to visit and purchase although it was significantly related to those two intentions. Retail Service Quality Retail service quality is also highly associated with future consumption behaviour in terms of the customers’ intention to visit. building relationships and emphasizing the quality of services in meeting the changing needs of the consumer. Nevertheless. Chennai Dr. V. retailers had to change their marketing strategies in order to bring consumers into their store. independent retailers. 1995). Lewison (1998) describes service quality as the difference between customers’ expectation and perception of the service actually received. the larger national chains are continuously fighting for market share and continue to apply pressure on smaller. Driven by highly competitive management. chain store supermarkets have progressed exponentially in the retailing field in the two decades (Farquhar. Indians have come to accept this as some sort of a shopping norm which does not very much affect their intentions to continue visiting and purchasing in the stores. The functional quality answers the question. identified various dimensions of service quality. the appearance. Introuction In India. Corporate image refers to the consumer’s general perception of the supplier of the service. Yadava College. From an almost exclusive focus on satisfying the needs of the more affluent white consumer. Evident from these definitions is that service quality is a subjective concept and many factors both internal and external influence a customer’s expectations of a service. Measuring service quality poses difficulties for service providers because of its unique characteristics: intangibility. Zeithaml & Berry.2010 A STUDY ON MEASURING SERVICE QUALITY IN SUPERMARKET Ms. namely technical and functional quality and corporate image. what they say and how they say it. also impacts on the customer’s view of the service. how the customer gets the service. in their attempt to define service quality. The authors define service quality as a global judgement of an attitude relating to the superiority of a service. Sampath Reader in Commerce. Therefore. behaviour. it is still worthwhile for the retailers to apply prompt and professional problem-solving methods including having a proper system of returns and exchanges . Madurai 1. 2. Velammal Engineering College. purchase and recommend the store to family and friends. Carman. Survival will depend on astute marketing.1990). A possible explanation could be that Indians have become accustomed to the fact that most clothing stores in India generally do not accept returned or exchanged goods through their “goods sold are not returnable or exchangeable policy” or even to expect the employees of the store to handle their complaints professionally (Ramayah & Jasmine. 2003). 2002).1988. The customer will also be influenced by the way in which the technical quality is transferred functionally. K. All the underlying dimensions of service quality play a role in stimulating repeated store patronage and the spread of good word-of-mouth. Parasuraman et al. Service quality is an elusive and abstract construct that is difficult to define and measure (Parasuraman. inseperability and perishability (Bateson.83 SRM Management Digest . The technical quality of an outcome refers to the actual outcome of the service encounter. heterogeneity. Gronroos (1984) maintains that service quality comprise three dimensions. Rajamani Lecturer in Management Sciences. The accessibility of the store personnel. However.

returning merchandise. in-depth interviews with six customers and a qualitative study that monitored the thought process of three customers during an actual shopping experience. refunds and exchanges. (1996). payment of utility bills vary between supermarkets. The need for a measurement instrument that can accurately assess service quality in a retail environment was answered by Dabholkar et al. by subtracting the expectations from perceptions and report that it can create problems with regard to validity. Whilst the measure of service quality for pure service and retail environments are likely to share some common dimensions of service quality. These three differing methods combined with a review of service quality related literature and some modification to the original SERVQUAL scale produced a hierarchical factor structure scale which Dabholkar et al. Virtually all grocery retailers may offer services for sale. According to Dabholkar et al. measures of retail service quality must capture additional dimensions (Siu & Cheng. 3. interacting with store personnel. therefore. returns. i.SRM Management Digest .2010 84 (Christo & Terblanche. friendliness of staff. store appearance. Grocery retailers frequently sell identical goods. Del Bostique. credit. 1996. Mehta et al. Further criticism was levelled by Teas (1993). retail service quality had a hierarchical factor structure which comprised of five basic dimensions. convenient operating hours.. in apparel specialty stores. His studies examined the operational and conceptual issues associated with perceptions minus expectations (P-E) and developed alternative models of perceived service quality based on evaluated performance. 2000) and also more specifically.. service becomes a means of differentiation (Berry. In developing the instrument. Ignacio. Diaz & Ruiz. includes a service . 1997) as this can certainly delight the customers while positioning a favourable impression of the store in the customers’ minds. 1994). or offer services that facilitate the sale of goods. all of which influence consumers’ evaluation of service quality. Teas (1993) concluded that the evaluated performance model could overcome some of the problems associated with the P-E gap conceptualisation of service quality. 2001:90). Measuring service quality. A retail store experience involves more than a non-retail store experience in terms of consumers negotiating their way through the store.e. can be rather complicated and difficult especially in apparel specialty retailing where it combines the selling of goods and services to the customers as well as the customers’ expectations of knowledgeable. Churchill and Brown (1993) also caution on the use of difference in scores (Gap Model). finding the merchandise they want. it may well be that consumers use different criteria to evaluate competing goods retailers who sell a mix of goods and services than they use to evaluate retailers that are primarily or exclusively service firms (Vazquez. 2001). Peter. 1986). it has not been proven to be successfully applied in a retail setting (Dabholkar at al. (1996) who developed and empirically validated a scale to measure retail service quality distinctively. helpful staff to assist them during their shopping experience (Gagliano & Hathcote. Services such as short waiting time at till-points. Servqual Instrument Despite the fact that SERVQUAL has been empirically tested in various studies involving “pure” service settings. safe customer parking. Therefore it stands to reason that every item purchased in a supermarket. Furthermore. merchandise assortment. the researchers conducted a triangulation of research techniques involving interviews with several retail customers. Service quality in “pure” service settings and retail settings differ in the sense that quality is seen from the perspective of not only services but goods as well. (1996) aptly named as the Retail Service Quality Scale (RSQS).

1994. Further item reduction as suggested by Aldlaigan and Buttle (2002) was undertaken by examining low item correlations. Five factors with eigenvalues greater than one were retained. Empirical studies were undertaken in two phases. The response data was first analysed for reliability using Cronbach alpha. The rationale for such a data collection method is based on the theory that respondents will be more attentive to the task of completing the questionnaire and will provide meaningful responses when they are contextualised in the environment that they are evaluating (Dabholkar et al. 1993. This resulted in an eduction of three items. Demographic information was collected which included marital status. 1979. Upon making the adjustments. Teas.41. A six point Likert scale ranging from strongly agree to strongly disagree with a category “not applicable” in the end was used.78 to 0. 1999. Firstly. Babber. Kalra. The main purpose of this study is to develop a multi-dimensional scale that can be used to measure consumers’ perception of service quality in supermarkets.70 as recommended by Nunnally (1978). Multivariate statistics. consumers would be more likely to focus on issues important to them for evaluating the quality of service at the supermarket. Kim & Jin. The questionnaires were administered at three supermarkets in a mall intercept type situation. 1993. Item reduction was then undertaken due to the low reliability values on certain dimensions.63. Five factors were extracted. one also buys convenience in the form of store hours. being in a relevant environment. This resulted in a reduction of four items from the scale.85 SRM Management Digest . 2002) served as a framework in developing the customer service quality instrument. Pilot Study Arising out of focus group interviews a structured questionnaire comprising forty items was administered to seventy-five supermarket consumers. namely factor analysis was utilised to reduce the variables into identifiable factors. Avkiran. age and income levels. et al. Loadings of 0. The reliability of the factors ranged from 0... Sureshchander. 1990. 1992.91 to 0. Research objectives The survey method was used to obtain relevant data to evaluate the scale and the factor structure. Boulding. 2001. Vasquez et al. short-pay point queues. Furthermore. When one buys groceries. . In addition the questionnaire contained a statement on overall service quality. ease of returns and exchanges. a further seventy questionnaires using a thirty-seven item scale were administered. convenient operating hours etc. 1992.2010 component. Items with low factor loading and low item to total correlations were investigated. 5. intentions to shop.. qualitative research was undertaken in the form of focus group interviews. The responses were then paraphrased and condensed into themes. At the dimension level the Cronbach alpha ranged from 0. Phillip & Stewart. The questionnaire made use of a perceptionsbased measure of service quality in the light of the suggestions put forward by various researchers (Cronin & Taylor. merchandise selection. The standardised alpha for the scale was recorded at 0..94. Factor analysis (varimax rotation) was then performed on the forty latent variables. Carman.87. multiple loadings and unstable variables and interitem correlations. Secondly. 1996. 4. 1996). 1988.. exceeding the suggested level of 0. Dabholkar. et al. which were then utilised in the scale construction. Standardised alpha was recorded at 0. Parasuraman et al.30 and above according to Churchill and Iacobucci (2002) were retained. two pilot studies with sample sizes of seventy-five and seventy respectively were undertaken to purify the measuring instrument. The general procedure used by various researchers (Churchill. Staelin & Zeithaml. intentions to recommend the supermarket to a friend and complaints about poor service. 2002) that consumers evaluate service quality mainly on perceptions.

77 0.95 which is considered “marvelous” by Kaiser (1974:35). It was hypothesised that the a values would not be significantly different from both groups (split samples) of responses. A further two variables were removed as it showed instability and in doing so resulted in the improvement of the reliability values.61 0. validity and robustness of the factor structure on a larger sample size. Table 1 Reliability Values DIMENSIONS Cronbach alpha (40 variables) 0.94 70 Cronbach alpha (33 variables) 0.2010 86 The iterative process was re-run with thirtythree variables in the calculation of Cronbach alpha.88 0.78 demonstrating good internal consistency and reliability.94 and at the dimension level.78 0.94 respectively.94 70 Cronbach alpha (30 variables) 0.91 0. In addition the testing for response bias in the data collection procedure required the computation of separate coefficient a values for the first two thirds and second one third of the completed responses.78 0.00 rejecting the hypothesis that the population correlation matrix is an identity matrix.94 and 0.88 0.94 70 Cronbach alpha (31 variables) 0.63 0.85 0. Pr ior to factor analysis the appropriateness of factorability on the data set was established.94. i. The standardised a emerged as 0. At a dimension level Cronbach alpha ranged from 0. Cronbach alpha and factor analysis (principal components-varimax rotation) were computed to establish reliability and a factor structure. The computation of the Cronbach alpha and final factor structure is reflected in table I.78. inferring that the difference is small to indicate that there were any significant differences in the data sets.87 75 Cronbach alpha (37 variables) 0.88 0.41 0. Factor analysis (varimax rotation) showed greater clarity in terms of loading onto appropriate dimensions.74 0. which resulted in the extraction of three factors with 30 variables. A thirty one-item scale comprising five dimensions. with zero correlations.80 at an observed significance level of 0.84 0.83 0.81 0.86 0. In the final sample a clearer factor structure emerged as a result of several iterations. the reliability ranged from 0.90 0.34 indicating strong correlations amongst variables and data stability.94 607 Factor 1 Factor 2 Factor 3 Factor 4 Factor 5 Over all Factor N .83 0.e.90 to 0.82 0. The standardised alpha for the scale was recorded at 0.90 0. The Bartletts Test of Spericity was 8246. Analysis Against the background of the pilot study. 6.84 0. the study was then extended to a sample of 500 supermarket consumers to establish the scales reliability. Standardised alpha was recorded at 0. The Kaiser-Meyer Olkin (KMO) measure of sampling adequacy (MSA) was 0.SRM Management Digest . Average inter item correlation was 0.90 to 0.78 0. However some variables still required closer scrutiny. A complete factor structure and loading within each factor is reflected in Table VI. were established through several iterations.87 0.

like “To date nobody telephoned me back. i. I stopped shopping at this particular supermarket” and “Many times I had to wait in long queues at the cashier”. The Cronbach alpha values (refer to table I) for the three dimensions are high in the study. The second factor labelled atmospherics. influences the customers’ decision to visit the store and also guides the consumers’ inferences about service quality. the assistants working with food did not wear hats.05. This factor incorporates the reliability and personal interaction aspects of the retail service quality scale of Dabholkar et al. I found the shelfpackers are busy packing products on the shelves.1988). namely reliability.2010 Factor one labelled reliability. This factor captures aspects of service quality that are influenced by the supermarket’s responsiveness to the needs of the customer. Combining the conclusions obtained from literature review. The scale’s convergent validity was assessed for statistical significance by using Pearson’s correlation coefficients. the reliability of a scale as measured by coefficient alpha reflects the degree of cohesiveness among scale items and is also an indirect indicator of convergent validity (Parasuraman et al. a factor structure with three basic dimensions is proposed. Marcoolyn & Nesdale. These findings are in congruency with the qualitative studies undertaken. short waiting time at cashiers. Rossitter. 7. The items that loaded onto this factor relate mainly to the human element aspects of service delivery. Some excerpts from the focus group interviews were: “In the fruit and vegetable section. . Further insight and evidence from environmental psychology support the notion that atmospherics induced by store environment influence the attitude as well as the behaviour of the consumers (Donovan. Kotler (2000) is of the view that the environment offered by the store has an impact. I find it quite disturbing because we need space to move around with our trolleys”. Validity Content validity was also ascertained by pre-testing the questionnaire and a review of the questionnaire by academics and practitioners in the field. comprised ten variables and accounted for 4. The third factor labelled policy. Participants in the focus groups.89% of the variance. Consistent with the literature on atmospherics Bitner (1993) reaffirms that store atmosphere and appearance are important in global evaluations of a retailer’s service. personal interaction and merchandise availability as important in improving services. you find leaves all over the floor and they do not even care to pick it up” and “in the prepared food section of this supermarket. overall.87 SRM Management Digest . referred to the following: “You cannot shop freely if you know that your car is not safe in the parking”and “Whilst shopping. inter-alia. The three dimensions of service quality. 1994). staff friendliness.41% of the variance. atmospherics and policy were correlated with the overall measure of service quality (B1) of the questionnaire. comprised ten variables and accounted for 40. courtesy. This notion is also supported by the findings of focus group interviews.9% of the variance. Furthermore. Comments from participants. This implies that the three dimensions of service quality do in fact converge with the measure of overall service quality. The above conclusions were supported by comments from focus group interviews where participants viewed proper complaints handling. I found it dirty because hair can fall into the food served to customers”. how would you rate the quality of service at the supermarket? Table II reflects that the marked correlations are all significant at p< 0.. The instrument was further purified during the various pilot-testing stages during which changes were made to the questionnaire. reiterates the view that customers place reliability as one of the key determinants in evaluating services. Since then. comprised ten variables and accounted for 5. (1996).e. exploratory research and the main survey. This factor combines the tangible aspects of the SERVQUAL scale and the physical aspects of the retail service quality scale.

53* Policy -0.3069 BETA 0.level 0. The marked correlation in Table III depicts negative correlations between complaints about service offered by the supermarket and overall service quality.5024 -0. Table 2 & 3 Regression Analysis DIMENSIONS * Reliability Atmospherics Policy B 0.8337 p .3103 *p< 0.603 .00 0.2010 88 Table 2 Correlation of Overall Service Quality And Service Quality Dimensions Variable B4 Reliability B4 1.49* Reliability Atmospherics Policy 1.05 Discriminant validity was measured by including an item in the study (B4) relating to complaints about poor services offered by the supermarket.1142 T 5.SRM Management Digest .3945 0.2980 0.3092 0.level 0. thus providing evidence of discriminant validity.73* 1.00 Atmospherics -0.6181 -0.0000* 0.7417 5.0000* 0.0000 Adjusted R2 = 0.2949 0.1024 BETA 0.0000 DIMENSIONS * B Reliability Atmospherics Policy 0.23056 0.2067 0.67* 1.5570 R2 = 0.69* 0.603 p .00 -0.1866 Adjusted R2 = 0 .0687 T 4.4432 -0.3573 R = 0.0000* 0.9210 F= 3.8090 -1.0558 R2 = 0.0000* 0.39* * Marked correlations are significant at p< 0.00 0.1826 F= 3.0719 R = 0.4127 7.4320 *p< 0.

atmospherics makes the largest impact across the three equations and reliability is the second largest predictor of service quality. The study reveals that income levels are significantly related to reliability and policy aspects in shaping consumers’ perceptions of the quality of services offered by supermarkets. The three service quality dimensions were regressed with the following opinion data: overall service quality (B1).2168 0. Table V reflects the socio-demographic variables in relation to the identified factors. However. it is evident that gender is not significantly related to reliability.0000* 0.4656 *p< 0. store patronage and recommendation of the store to a friend.0000* 0.4901 -0. According to the beta coefficients.Analysis of Customer Profile & Service Quality Perception The socio demographic data was used to examine their association with the identified factors. Age.0336 3. atmospheric and policy variables. store patronage (B2) and recommendation of the supermarket to a friend (B3).0000 Adjusted R2 = 0.0305 R2 = 0. is significantly related to all the three dimensions implying that age plays a role in establishing service quality perceptions. These findings are also in line with the results of some earlier studies that have highlighted the importance of soft issues (for example. . From the table. politeness) in improving service quality (Sureshchander. 2002. the physical aspects of the store.1776 0.0599 6.3505 0. Policy turned out to be poor predictor in this regard. 1995).5304 0. complaints handling.89 SRM Management Digest .. 8. reliability and atmospherics seem to have greater impact on overall service quality. trust. Powell.1971 0.5959 R = 0.level Reliability Atmospherics Policy 0. et al.2129 F= 3. marital status is significantly related to the reliability factor implying that married and single consumers view the various reliability aspects of service quality differently. This implies that the three factors that emerged from the study are not in any way influenced by the gender categories. Amongst the three dimensions.2010 DIMENSIONS * B BETA T p . on the other hand.5115 -0.603 * Service quality dimensions regressed with overall rating of service ** Service quality dimensions regressed with store patronage *** Service quality dimensions regressed with store recommendations Table IV reports on the results of the multiple regression analysis computed in order to establish the predictive power of the three service quality dimensions in assessing predictive validity.

0408 1.0035 * significant at p< 0.027 0. 6.532962 0. 4.656227 0.0500 Table 5 Factor Loading Q.4024 Gender 1:605 Marital status 4:602 1.510 * 0.502843 0.2400 Age 5:601 6.694613 0.4009 0.087 2.2010 90 Table 4 Analysis Of Variance: Demographic Variables And Service Quality VARIABLES Df RELIABILITY F P 0. 9.555 * 0.0054 4.3008 POLICY F 0.702 P 0.614 0.696923 FACTOR 2 FACTOR 3 .072 P 0.406 * 3.378 0.No.0000 3. VARIABLES DESCRIPTION 1.SRM Management Digest .1691 1. 5.667524 0 .351 * 0. Handling of customer complaints Waiting time at cashiers Provision for customer suggests and comments Contact staff are polite to customers Safety in transacting with the store Willingness to help customers Knowledge to answer customer questions Respond to customer requests Employees give you personal attention FACTOR 1 0.2975 ATMOSPHERICS F 1. 8. 2.674576 0. 3.0006 Income 5:580 6.964 * 0. 7.600444 0.708557 0.0000 1.579 * 0.

10.597551 0 .620241 0. 29.615037 0. 14. 27. 12. 17.518990 0.659225 0.415771 0. 26. 16.599847 0.2010 21.608552 0.721088 0.91 SRM Management Digest .494265 0. 23. Error free sales transactions Employees are appropriately dressed The fresh food display is always fresh The store uses time saving technology The store h as modern looking fittings and equipment The physical facilities are appealing Clearly specified sales slips are given to customers The brands sold at this store are trustworthy A broad variety of brands are offered The retailer’s own brands are of a high quality The store has convenient operating hours Adequate till packers are availab le Convenient Cash withdrawal facilities are available Merchandise is always available Safe customer parking Store layout enables customers to move around The store is characterized by its pleasant aroma Prices of products are clearly visible 0. 31.573046 0. 30.718639 0.635372 0 .669626 0. 28. 25. 11.547363 0.541063 . 22.680132 0.644694 0. 24. 13.

There would be value in additional work to analyse these incidents further to try to establish a more detailed perspective on key influencing factors impacting on service quality perceptions. 10. 1994. For supermarkets to establish or enhance service quality. the sampling procedure and particularly its focus on supermarkets. freeing employees to deal with more important customer requests and problems. The interpersonal category (human element) recorded a number of incidents in the focus group interviews. The results of this study cannot be accepted as being completely relevant and applicable to all retailers who offer a mix of goods and services. 1997) states that the relationship between quality and price appears to be product specific and generally weak. adds to the growing literature. Routine and repetitious tasks can be handled by a system. Layout makes it easy for customers to find products needed The retailer leads as a corporate citizen The store provides good service at a reasonable cost 0.600439 19. 1977. store patronage and recommendation of the supermarket to friends. 0. because of the limited sample size.2010 92 18. it appears that and that future research . 1988.465614 9. Recommendations The study demonstrated that customers attach great importance on the atmospheric variable (physical aspects). which calls for the re-examination of how to measure and manage service quality. There is a possibility that perceptions may vary from customers from other developed countries. Store policies must be responsive to the needs of the customer. Yoon & Kijewski. they have to ensure that staff is polite and courteous to customers. Managements of supermarkets should place greater emphasis on the atmospheric and reliability variables in order to enhance service quality perception among consumers. the reliability and the policies of the retailer. Stafford & Enis. 1969. 20.SRM Management Digest . store patronage and recommendations of the store to friends. safe customer parking are essential ingredients of enhanced service quality and customer satisfaction. Atmospherics and reliability seems to be strong predictor of overall service quality. Limitations This study undertaken within the supermarket setting. Store policies such as in-house cash withdrawal facilities. Based on this study and other studies cited. Injazz et al. Should supermarkets continue to emphasise low prices in their competitive strategies or should they accept the risk of asking customers to pay a premium for enhanced services? The development and testing of the supermarket service quality instrument has implications for other goods retailers as well. Retailers can use technology to simplify and improve the services offered to customers.. New technology and interactive marketing can create new opportunities for supermarkets.581341 0. The instrument has been validated by collecting data from customers of a supermarket chain in a developing country. Sproles. The role of technology should not be underestimated. its value should not be underscored. Previous research (Zeithaml. While the retailer’s policy may not seem to be a strong predictor of overall service quality. have the knowledge to answer customer questions and handle complaints effectively and promptly. payment of utility bills.

9. Babber.A. Thorpe. namely. focus and passion at every level of the organization “.H. E & Boller. (2001:04) aptly sums up service quality in the competitive retail environment as. research agenda. reliability. Boulding. 7. G. 1996. Journal of Retailing. R. A study of price and quality in service operations. February. Spring. References 1. efforts will have to be continuously focused on service excellence. it comes from leadership. SERVQUAL: review. L. A service quality model and its marketing implications. The five dimensions conceptualized at the beginning of the study with forty variables were empirically reduced to thirty variables and emerged as three distinct and interpretable factors. Developing an Instrument to Measure Customer Service Quality in Branch Banking. Retail Businesses are Service Businesses. 3. Journal of Marketing Research. W. 1993. Dabholkar. A paradigm for Developing Better Measures of Marketing Constructs. J. 12. 12(6):10--8. I.30:7--27. Atul. Avkiran. 12. Industrial Journal of Service Industry Management. A Dynamic process model of service quality:from expectations to behavioural intentions.A. 8 Carman.J. 13(3):362--381.C. atmospherics and policy. C. adds to the growing literature. 1996. A Measure of Service Quality for Retail Stores: scale development and validation. the sampling procedure and particularly its focus on supermarkets. European Journal of Marketing. & Zeithaml.G. Journal of Retailing. 5. Journal of the Academy of Marketing Science. International Journal of Service Quality . Schiff. which calls for the re-examination of how to measure and manage service quality. & Rentz.L.A.2010 on Service Quality should involve the development of industry-specific measure of service quality. V. The results of this study cannot be accepted as being completely relevant and applicable to all retailers who offer a mix of goods and services. 6. 2002. F. “being best in class in service quality is not the result of any one person’s effort. Conclusion The findings of this preliminary study do provide basic support for a three-factor structure for supermarket service quality in terms of reliability and validity. Staelin. 1992. 24:253:268. O. A. because of the limited sample size. 62: 3--6. 2. 10.. critique. Babakus. 11. 1993. Journal of Marketing Research. S. A. F.M. 1986. Implications For Future Research This study undertaken within the supermarket setting. SYSTRA-SQ: a new measure of bank service quality. International Journal of Operations and Production Management. 1984. A dynamic model for continuous improvement in the management of service quality.D. European Journal of Marketing. Berry. Churchill. & Walters. Buttle. 24(1):3--16. N. Kalra. A.93 SRM Management Digest . Jr. Consumer Perceptions of Service Quality: An Assessment of the SERVQUAL dimensions. W. An empirical assessment of the SERVQUAL Scale. G. with increasing competition. 11. J. 4. 1979.. Although managements of supermarkets can pride themselves on many success areas on service quality. 66:33--55. 1994. Journal of Business Research. 16:64--73. Gronroos. February. Aldlaigan. & Buttle. 1990. 12(2):38--48.K.. 18(4):36-44. 1992. 13. Injazz. International Journal of Bank Marketing. 3030(1):8--32. R.

& Cheung. Journal of Retailing. K. 14. Powell. Zeithaml. H. Del-Bostique. V. Performances Evaluation and Consumers’ Perceptions of Quality. Diaz. Siu. R. 1997. A measure of retail service quality.V. 2001. 15. & Berry. 22. Service Quality in supermarket retailing: identifying critical service experiences. Journal of Retailing and Consumer Services. 57:18--34. quality and value: A means-end model and synthesis of evidence. L. Strategic Management Journal. E & Kijewski. quality evaluation and pricing. 17. Teas.. Total quality management as competitive advantage: a review and empirical study.F. Yoon.M. Refinement and Reassessment of the SERVQUAL Scale.. L.R. 16:15-37. Expectations. 1993. A. (2):23-33. 67(4):420--450. N. 20. 16. Parasuraman..T. 21. 5(2):45-60. Vazquez. C. Ignacio. 1988. Consumer perceptions of price. 20(2):3-- 18. 1991. Dynamics of the relationship between product features. Journal of Retailing. Journal of Marketing.M. Spring. 19.Y. 19(2): 88--96.. An index of factorial simplicity. 2001. A. L. Schiff. Winter. Zeithaml. J.H. Kaiser.. V.SRM Management Digest . V. A. R. 52:2-22 . & Ruiz. Zeithaml. Parasuraman. Marketing Intelligence & Planning. 1995. 13.2010 94 Management. How customer satisfaction improvement works to fuel business recovery. 2001. & Berry. A. Psychometrika.A. Journal of Marketing. (8):1--14.T. 39(1):31--36. V. 1988. 1974. Pricing Strategy and Practice. A. SERVQUAL: a multiple-item scale for measuring consumer perceptions of service quality. 64(1):12--35. Journal of Organisational Excellence.

retail supermarket sector in UK is one of most competitive segments and also pointed out that this competition will create more challenging environment in maintaining their market share. Customers are more challenging component for any organisation rather than their competitors. Most of the retailers try to achieve competitive advantage by taking the responses of the customers beyond the level of ‘just satisfied’ towards ‘exceeding their expectations’. Because. Kattankulathur Velummailum Gobiraj Balasundaram Nimalathasan 1. For any organisation. As a result. Thus. According to Verdict consulting research (2007). This encouraged the researchers to do this research. wordloyalty or loyal customers captures the predominant place. their needs and wants. Consequently. Every organisation is ready to pay any means to identify and understand the customers and their needs.95 SRM Management Digest . 2. Since. their expectations on price and quality of goods and services increase the potential to succeed.What are the main factors determining customer satisfaction in retail supermarkets? 2. every organisation must pay their attention in complete satisfaction of their customers. satisfaction could be interpreted as just meeting the expectations of the customers. Their buying behaviours are fickle. highly satisfied customers more likely become loyal customers and potentially buy the new products introducing by the company and shows the word of mouth and also pay less attention about competitors and other brands as well. Statement of the Problems Factors determining customer satisfaction and customer loyalty have been brought to light by marketing research. good understanding of customers. some retailers are very successful than their competitors even during the period of European economic downturn. this information still is far away for some producers engaging in the productions and services. cost for retaining existing customers are very less than acquiring the new customers and also existing customers are much more profitable in many ways for instance. In the context of a retail supermarket. But. Consumers’ reaction will be in favour of an organisation when their desires and expectations have been either met or exceeded in the course of experiencing the service.How can an organization in retail supermarkets improve their customer loyalty so that. word of mouth. the worst thing is ninety percent of dissatisfied customers just switched to another supplier without complaining to former supplier (Kotler. Above to all. not any sort of exceeding or falling short of the expectations. producers are unable to exploit this information for their success. almost every organisation pays most attention to the customers ever than before. considering cost related to customers.2010 DETERMINANTS OF CUSTOMER LOYALTY IN LEADING RETAIL SUPERMARKETS IN UNITED KINGDOM: AN EXPLORATORY STUDY Ramiah Kumar Gandhi SRM University. at least three times a year expecting the best deal from the suppliers. We hope that this research will answer the following question regarding customer loyalty effectively. customer centred marketing has occupied the top place in modern marketing concept. Pleasing customers are very harder today (Kotler. existing and future customers’ switching can be kept at . 2003). Here. However. 2003). Hill & Alexander (2006) pointed out that only through the loyalty. 1. customer retention can be secured. A marketing strategy which is considered today as the best one may not produce same results in future. Background and Significance In the ever-changing business world. Besides the above.

Customer satisfied with the present service of organisation will likely dissatisfy if the firm does the same service later. we can say that there are some studies in different countries. Furthermore. Literature Review Managing customer loyalty is the one of major element of customer relationship management. To suggest some measures in order to improve the customer loyalty in leading 4. 2000). beliefs. Kotler (2008) said that delighted customers become loyal to the organisation and customer relationship management (CRM) plays an important role in making customers loyal. needs immense afford to change). Hill & Allexander (2006) categorised loyalty into four types such as (1) Monopoly loyalty (where customers have little or no choice and they are completely dissatisfied and far away from devoted).SRM Management Digest . Based on the previous studies. Hill & Alexander (2006) defined these degrees as suspects. (3) Incentivized loyalty(this is the type of loyalty created by mass advertisement and targeted the customers who are not spending their own money for instance frequent business fliers). clients’ advocates and partners in a pyramid. To examine necessary factors of customer loyalty in leading super markets of UK. completely satisfied customers only can be a delighted one. This paper is focus on this Habitual loyalty. desires and so on” (Stone. solid profit and feasibility for steady expansion. So every organisation has struck with the question how they can increase their loyalty level by adopting the right approaches. Stone (2000) pointed out in his book that “using information on the customer data base. Realty is that in the twenty first century. both not only customers and but also suppliers have to true. 2006). a set of attitudes. competing in present world.(4) Habitual loyalty(this can be viewed most commonly due to the time constraints and familiar routines. competitive price plays a significant role. Objectives The present study has the following objectives 1. Thus CRM has to focus on customer delight rather than satisfaction. Further. Here. Loyalty is defined as “a state of mind. size of supermarket. among the satisfied customers. it is obvious that it would damage the corporate performance by 25 to 50 percent and possibly more (Shajathan. and 2. there is no reason for a customer loyalty programme other than finely tuned to meeting customers ‘relationships needs”.2010 96 minimum level? 3. customers. 3. degrees of loyalty can differ from one customer to another for instance one customer is more loyal than other. convenient location. However. customer loyalty has to be earned by the suppliers and customer retention can be achieved when the suppliers satisfy the requirements raised by the customers better than their rivals. Less loyal customer is likely to switch the supplier. Moreover. Loyalty becomes a winning factor for any organisation facilitating with high productivity. faithful and firm in meeting the customers’ needs. When considering the present states of disloyalty. variety of goods. Instead. To determine the key factors of customer loyalty in leading super markets of UK. . According to them. convenient location and little afford for instance filling up petrol on the way to work). degrees of positive commitment increases along pyramid from suspects to partners and also distinguishes the truly loyal customers. Hill and Alexander (2006) argue that misunderstanding of customer loyalty by the senior manages and marketing executives have mislead strategies for securing the customer loyalty and also criticised that many of them take afford to attract the customers by giving some bribe to customers. (2) Cost of change loyalty (where customers have choice of alternative suppliers and reluctant to change their current due to the cost and other bothering factors. prospects.

Research Design Exploratory studies are a valuable means of finding out ‘what is happening. 5. 5. For the study. Hence. 5.3 Sampling strategy Five leading (i. to seek new insights. to ask questions and to assess phenomena in a new light’ (Robson.97 SRM Management Digest . Robson. it has a characteristic of positivist and interpretivist and also involves in deductive approach (Hussey & Hussey.. It describes research approach.897 for variables of customer loyalty. the desk study covered various published and unpublished materials on this field. The experts also judged the face and content validity of the questionnaires as adequate. Iceland. a seven point Likert summated rating scale from strongly disagree (-3) to strongly agree (+3) was adopted to identify the variables of customer satisfaction and loyalty. data sources.2 Period of Study This research was conducted from September to October. Its great advantage is that it is flexible and adaptable to change (Naipul. Primary data were collected through mailed questionnaire. Hence the present study is made on determinants of customer loyalty in leading supermarket in United Kingdom (UK). researchers satisfied content and construct validity. sampling procedure.2010 but detailed and comprehensive studies has not yet been conducted in UK especially in supermarket through exploratory study. instrumentation.7 advocated by Cronbach (1951). If we compare our reliability value with the standard value alpha of 0. Based on the literatures and experts’ advice questionnaire is to be designed. Somerfield and Tesco) retail supermarkets involved in food stall around the city of London are selected as cluster sampling due to time constraints. some contents and words were revised to make the meaning clear. 5.6 Reliability and Validity The reliability value of our surveyed data was 0.4 Data Sources The study was complied with the help of primary data. 5. entire analysis is done by personal computer. 2009. A well known . we analyse our data by employing factor analysis. 2002). Thrope & Lowe (2002). Sainsbury.6 as recommendated by Bagozzi & Yi’s (1988). reliability. 5.5 Measures The questionnaire will be administrated to five leading retail supermarkets in the city of London and ten customers for each supermarket. validity and mode of analysis.7 Statistical Tools Used In the present study. 5. and other costs related to the data collections. It can be linked to the activities of the traveller or explore (Adams & Schvaneveldt.e. ten customers with age of 18 years and above for each sampling supermarket are considered as purposive and random sample for the study. 5. 1997. 1991). In the case of customer respondents. The study has an idea of pre-test the questionnaire in order to receive optimal outcomes from the study. 1994) or with the standard value of 0. Combining these two research approaches in same piece of research is perfectly possible and advantageous for a research. Moreover. Researchers find that the scales used by us are highly reliable for data analysis.1 Research Approach As this paper is a business and management research. 1989). a more accurate recommendation (Nunnally & Bernstein’s. In the questionnaire. the travel. 1993) as well as inductive approach (Easterby-Smith. Based on their comments.Asda. The sample procedure paid more attention on selection of appropriate samples so that samples can cover different background of people as London is mostly multicultural city in UK. Validation procedures involved initial consultation with expert researchers.

as communalities become lower the importance of sample size increases. The appropriateness of factor analysis is dependent upon the sample size. Analysis and Findings To identify potential underlying dimensions of the customer loyalty of the respondents are used in the present section.000 1. After checking the reliability of scale.827 0.762 0. Before applying factor analysis. we tested whether the data so collected is appropriate for factor analysis or not. Table-1: Communalities of the Customer Loyalty’s Variables Sl.000 1. MacCallum. testing of the reliability of the scale is very much important as it shows the extent to which a scale produces consistent result if measurements are made repeatedly. L18 with L7. But no correlation comes out as damaging as to cause multicolinerity (Hague & Taher.No 1 2 3 4 5 6 7 8 9 Customer Satisfaction’s Variables L1 L2 L4 L5 L6 L7 L8 L9 L10 Initial 1. Windaman. L14 with L3 and L4. These are L3 with L8.2010 98 statistical package like ‘Statistical Package for Social Sciences’ (SPSS) 13.000 Extraction 0.000 1.896 . L16 with L3. In this connection. L23. Zhang & Hong (1999) have shown that the minimum sample size depends upon other aspects of the design of the study.000 1. L8 with L3. If we compare our reliability value with the standard value alpha of 0.0 Version was used in order to analyze the data. a more accurate recommendation Nunnally & Bernstein (1994) or with the standard value of 0.000 1.000 1. researchers. L20 with L23.754 0. 6. They have advocated that if all communalities are above 0. 2007) and so the matrix is suitable for factoring. According to them. and L27.6 relatively small samples (less than 100) may be perfectly adequate.6 advocated by Cronbach (1951).726 0.6 as recommendated by Bagozzi & Yi’s (1988) researchers find that the scales used by us are highly reliable for factor analysis.731 0.SRM Management Digest . L7 with L18. responses of the variables are subjected to factor analysis method.000 1.741 0. Further. therefore.000 1. an examination of the correlation matrix (for details please see Vide appendix-Table-1) reveals moderately significant correlations between some of the variables.774 0. In this regard communalities of customer loyalty been shown in table-1. In the present section. L11 with L2. and L23 with L20 and L21. used Cronbach’s Alpha scale as a measure of reliability. L4 with L14. Its value is estimated to be 0. L9 with L23.897 for total customer loyalty variables.792 0.

2010 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Source: Survey Data L11 L12 L13 L14 L15 L16 L17 L18 L19 L19 L20 L21 L22 L23 L24 L25 L26 L27 1.5 are acceptable. Kaiser –Meyer.823 0. In the present study.8 are good.646 0.000 1.000 1. This means that the correlation matrix is not an identity matrix.000 1.825 0.7 are mediocre.827 0. test value of chi-square 768. In this study.8 and 0.613 0.000 1.811 Extraction Method: Principal Component Analysis From table-1.644 (For details please see table-2).726 (P=0.000 1.000 1. there by indicating that the sample taken to process the factor analysis is statistically significant. .764 0.838 0.000 1.. Kasier (1974) recommends that values greater than 0.7 and 0.99 SRM Management Digest .826 0. Between 0.811 0.000 1.6 and above.827 0.000 1.000 0. Bartlett’s test of sphericity (Barlett.714 0. the value of KMO for overall matrix is 0.000 1.05. This test should be significant i.000 1.000 1.000 1. 2000).000 1. having a significance value less than 0.e.000) is highly significance (as also given in table-2) indicating that the data is appropriate for the factor analysis.803 0. it is clear that a sample size of fifty as used in the present study is good for a suitable factor solution because all communalities are 0.000 1. The KMO statistics varies between 0 and 1. between 0. 684 0.842 0.780 0.5 and 0.000 1.000 1.Olkin (KMO) measure of sampling adequacy is still another useful method to show the appropriateness of data for factor analysis. between 0.9 are superb (Field.814 0. 1950) is the final statistical test applied in the study for verifying its appropriateness.783 0.

896 7.812 74.132 1.980 1.428 7.792 46. researchers’ recommend as varimax.161 1.Square df 351 df 351 Significance 0.022 59.000 and testing appropriateness of data as above.2010 100 Table-2: KMO and Bartlett’s test Kaiser – Meyer. For this.416 Cumulative Percent 29.475 1.SRM Management Digest .726 768.583 1.863 5.299 3.205 1. & Nimalathasan (2009)] When the original customer loyalty variables are analysed by the PCA in this regard has been revealed table-3.021 0.348 69. details please see Taher.464 4. Rahman.463 4.363 38.922 Initial Eigen Val ues Percent of Variance 29.334 5.307 . we next carried out factor analysis to indentify the key factors of customer loyalty.111 77.780 3.884 65.000 Source: Survey Data After examining the reliability of the scale 0.622 0.546 2.(1993) and Ather.726 Chi.891 81.622 Bartlett’s Test of Sphericity Approx.928 2.687 54. we employed principal component analysis (PCA) followed by the varimax rotation [Generally.Olkin Measures of Sampling Adequacy 0. & Ferdausy. 768.363 9. Table-3: Total Variance Explained Component Total 1 2 3 4 5 6 7 8 9 10 7.

The rotated (varimax) component loadings for the three components are presented in table-4.251 94.896 Cumulative Percentage of Variance Explained 29.695 97.349 88.147 84.30 are considered significant.101 SRM Management Digest .671 0.40 are considered more important and 0.102 0.891 percent of the total variance.50 or greater are considered very significant (Hair.563 0.432 90.363 38.377 0.731 0.319 0.120 0.181 0.333 2.2010 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Source: Survey Data 0..546 2. ‘rule of thumb’ (Tabachnick & Fidell.253 91.387 0.316 0. Table-4: Total Variance Explained Component 1 2 3 Eigen value 7. Further.853 100.491 0.040 2.445 0. it can be seen that nine components extracted from the analysis with an eigen value of greater than one i.e.951 98.224 1.000 Extraction Method: Principal Component Analysis From the table-3.287 99.068 0.687 .818 93.566 1.514 0.433 1.182 1. 0.158 0.910 99.363 9. Tatham & Black.1996) which explained 77.928 2.016 86.085 0.585 0.331 0. Anderson.280 0.250 0.709 2. 2003).820 1.132 Percentage of Variance Explained 29.428 7. it is worth mentioning out here that factor loading greater than 0.084 1.139 0.465 98.658 96.423 0.366 97.603 99.476 95.792 46.038 0.630 0.

891 Source: Survey Data Extraction Method: Principle Component Analysis For parsimony.463 4.022 59.111 77.724 0.812 74.776 0.707 0. Table -5: Rotated Component Matrix for Customer Loyalty Customer Loyalty Customer Loyalty Variables Group I Group II Group III Group IV Group V Group VI Group VII Group VIII Group IX Provision of information Clarity of information or advice provided Respond to written or postal enquires Consistence in quality of brand Easy access to employees Management Good employees Problem solving Public relations Rate the overall quality of your relationship with supermarket Easy access to information Recommendation of the Product or Service Recommendation of the Supermarket Doing repeat purchase Consistency of the Brand Sales promotion Coupons and Premiums Overall satisfaction of the loyalty schemes 0.579 0.205 1. Pal.863 5..980 1.694 0.554 0. Pal & Bagi. and Hair. 1986.788 0.780 54.334 5.161 1.021 7.464 4.704 0.553 0. 1997. 1987.592 0.583 1.544 .766 0.299 3.722 0.801 0.al.475 1. 2003).743 0.SRM Management Digest .706 0. et.763 .50 were considered significant (Pal. only those factors with loadings above 0.2010 102 4 5 6 7 8 9 1.519 0.884 65.645 0. In this regard rotated component analysis has been shown in table-5.348 69.

879.519 belong to management. Customer Loyalty group.873 .al. The higher a factor loading. Rotation Method: Varimax with Kaiser Normalization.624 respectively. 7. provision of information.e.VII: The value of brand . Customer Loyalty group. consistency in quality of brand and easy access to employees.VIII: Environmental friendly organization – This customer loyalty group consists only one variable i. Customer Loyalty group-V: New brand – Three variables ranging from 0.723 and 0. Public relations loaded fairly highly on customer loyalty group VIII as well. Customer Loyalty group. comparisons with other supermarkets brand..810 to 0. Customer Loyalty group. good employees.2010 0.795.795 0. overall satisfaction of the loyalty schemes and loyalty card with loadings 0.IX: Bench marking – Only bench marking variable consists in this group with loadings 0. 2005. Customer Loyalty Group .616 0.579 respectively.616 belong to new brand. recommendation of the supermarket. Customer Loyalty Group -IV: Sales promotionThis customer loyalty group encompasses sales promotion. public relations.730 respectively.103 Loyalty card New brand Comparison with Manufacturer’s brand Comparison with other supermarket’s brand Innovative The value of brand Satisfaction with brand Environmentally friendly organization Benchmarking with their experience 0. .730 0.710 SRM Management Digest . because of its higher loading and greater relevance it is also included in this group. The variables getting highest loading becomes the title of each group of customer loyalty e. respond to written or postal enquires.624 . problem solving. et.776 and 0.VI: Innovative – Only an innovative variable consists in this group with loadings 0.788 and 0.title of customer loyalty group I and the like. Rotation converged in 5iterations Each of nine customer loyalty group listed in table-5 is labelled according to the name of the value that loaded most highly for those variables..554 They are provision of information. rate the overall quality and easy access of information. Customer Loyalty Group -II: Management – Three variables ranging from 0. clarity of information or advice needed. comparison with manufacturer’s brand.724 to 0.g.810 0. Hema.801 to 0. Customer Loyalty Group -III: Recommendation of the Product or Service – This group comprises recommendation of the product or service. environmental friendly organization with loadings 0.723 0.This group contains the value of brand and satisfaction with brand with loadings 0.879 Source: Survey Data Extraction Method: Principal Component Analysis.I: Provision of information– These group are represented by seven variables with factor loadings ranging from 0.873. coupons and premiums. 2000). the more would its test reflect or measure as loyalty group (Pallant. doing repeat purchase and consistency of the brand with loadings 0.

Policy Implications In this context.SRM Management Digest . Some respondents worried about online delivery. free . of. Some employees don’t worry about customers’ needs when that is beyond his/her duty.862 0. Satisfaction of the local different ethnic groups The super markets should satisfy the local different ethnic group of customers. they could find any one nearby in the shop floor. when customers need the employee.567 0. Variables 5 6 4 4 3 1 2 1 1 Factor Score 0.734 0. ‘Management’. to nine respectively and constitute the key factors of customer loyalty in leading retail supermarkets in UK. For example. 8.878 0. ‘Innovative’.043 0. these groups are considered for further analyses as dependent variables. They have a very little time to shopping these routine items. Employees Training As these are big super markets. 9.951 0. Thus. This frustrates customers. ‘New brand’. some respondents are worried about the product lines that don’t include the Asian products. the following policy actions may be considered worthwhile. time is very important issues almost for all. 11. In most cases. Customer Care Customer care should be improved further by enhancing the service quality to make dissatisfied customer to satisfied customers.884 0.055 Rank 2 3 4 1 5 7 6 9 8 10. ‘Provision of information’. most of employees worried about the job allotted them. the customer loyalty group ‘Sales promotion.2010 104 Table -6: Ranking of Variables according to their importance Key Customer Satisfaction Factors Customer Loyalty group-1: Provision of information Customer Loyalty group-2: Management Customer Loyalty group -3: Recommendation o f the Product or Service Customer Loyalty group-4: Sales promotion Customer Loyalty group-5: New brand Customer Loyalty group -6: Innovative Customer Loyalty group -7: The value of brand Customer Loyalty group -8: Environmentally friendly organization Customer Loyalty group -9: Bench marking Source: Survey Data As depicted in table-6.’ ‘The value of brand’. In addition. No. ‘Bench Marking’ and ‘Environmental friendly organization’ got the ranks of first.423 0. Because. satisfied customers to loyal customers and loyal customers to more loyal. more staff with good training about customer care is needed to improve the customer satisfaction and to overcome these issues. It is rare to find out an employee who knows the products very well. ‘Recommendation of the Product or Service’.

5. 6(3). F.F. Moreover. W. 74-95. 110-130.M. fair price. 5(1&2).M. 14.(2000).G.S. Hema. Haque. In Search of Latent Relationship among Some Selected Variables Affecting Job Satisfaction: Bangladesh Perspective. A. J. family offer. who are involved in the concerned area. these factors were ranked (1)‘Sales promotion’. (2) ‘Provision of information’.3rd ed. (7)‘Innovative’. R. Management Research: An Introduction. (3)‘Management’. 27-39. Tests of Significance in Factor Analysis. 2. Bagozzi.edu/ eisb/papers/full/paperEISB52. A. R.J. R. more advertisement. 9. Hema. (2007).R. A Factor Analytic Study of the Determinants of Success inManufacturingSMEs. (1988).& Lowe. Buy one get one free and half price. Anura. Mechanism & Uses in Social and Management Researches. New York. L. Ather.W.105 SRM Management Digest .2010 delivery to home for the customers buying more than a certain limits.J. Multivariate Behavioural Research 1. Factors Contributing to the Success of Manufacturing Enterprises in Sri Lanka: An Empirical Investigation. 12. Y. D. B. (2006). Tilak.2nd ed.. RetrivedAugust.L. planners.B. Psychometrika. Coefficient Alpha and the Internal Structure of Tests.(1966).91997). Cattell. Journal of the Academy of Marketing Science. 8. 4. Factor Analysis: Nature. P. .891 percent of the total variance. Sri Lankan Journal of Management.C. 11.iese. 3. 14. Australia. more branded products.Z. Multivariate Data 6.2008. D. Adams. The Hand book of Customer Satisfaction and Loyalty Measuremen.UniversityofWollongong.28.’ (6) ‘The value of brand’. Easterby-Smith.Z. N. (4)‘Recommendation of the Product or Service’. 15. 12. Field. The Scree Test for the Number of Factors.fromwww.J. Bartellet. & Alexander. & Anura. Finally. (2003). & Basil. Infrastructure facilities The convenient location of super markets. 13. & Taher. Thrope. Cronbach. 245-276. XXXVII (2).A. 2nd ed.doc. friendly atmosphere. policy makers and academicians.M. & Black. on the basis of factor score. 77-85. choices of products are the best things they enjoy when shopping the super markets. outcome of the research would be helpful to the practitioners. Concluding Remarks The results show that nine factors extracted from the analysis that together accounted 77. (8) ‘Bench Marking’ and (9) ‘Environmental friendly organization’ got the ranks of first to nine respectively and constitute the key factors of customer loyalty in leading retail supermarket in UK.S. British Journal of Statistical Psychology.Longman.(2002). J.. Analysis.for instance. London. Understanding Research Methods. parking facilities. Business Research: 3. 297-334. M. R.. 16(1).. researchers. 10. Hussey. & Yi.M. London: Sage Publications. (5)‘New brand’. Journal of the Institute of Cost of Management Accountant of Bangladesh..Discovering Statistics Using SPSS for Windows. and sales promotion. Tatham. 7.(1991).(2000). 12-17.SchoolofAccountingan dFinance. W.&Schvaneveldt. Sage.R. (2009). References 1. P. Hill. On the Evaluation of Structural Equation Models. Anderson.& Hussey. 1(1). 13. (1950). Hair. & Nimalathasan.M.app. Hampshire: Gower Publishing Limited.E.(1993). New Delhi: Pearson Education. (1951).

S.. (2000) Customer Relationship Marketing: Get to Know Your Customers and Win their Loyalty. Verdict Consulting Research (2007). 22. 2nd ed. Kotler.Y.(1996).K. Rahman. Market Watch Journal. 27. & Bagai. Principle of Marketing.Pal. M. Hcorper Collins.F. SPSS survival Manual.. (2005). Windaman. Marketing Research: An Applied Orientation (3rd ed. 28. 5th ed..G & Fidell. UK Grocery Market: more competitive than ever. Psychological Methods. 21.S.. A Theoretical Study of Some Factor Analysis Problems and Pal. Penguin. J. 2nd ed. N. a paper presented at the IX Annual Conference of the Indian Society for Probability and Statistics held at Delhi.(1997).S. Pallant. J. Tata McGraw–Hill Publishing Company Ltd. 55-63. & Bernstein. Taher. 25. South Asian Journal of Management. Real World Research. 48(3). (1986). 23. S. 20. London: Library of Congress. Robson. Y.(2006). 16.C. . A Common Factor Better Reliability Approach to Determine the Number of Interpretable Factors”. A. N. Blackwell. K.(2002). Wong. India.. Tabachnick. 12-13. New Delhi. Naipaul. 30. & Saunders.2010 106 A Practical Guide for Undergraduate and Postgraduate Students. H. Pal. Ira Psychometrics Theory. 31-36. Basingstoke. 84-99. S.. MacCallum. 24. Shajanthan. Indian Psycological Review. C. Nunnally. Oxford. (1994).. London. G. 187-200. Zhang. 6(12). (1999).. 18. An Index of Factorial Simplicity. P. L. Real World Research: A Resource for Social Scientists and Practitionerresearchers. Psycometrica. (2005) Loyalty-What can it really tells you? Journal of Database Marketing & Customer Strategy Management.Blackwell. 13(1). & Hong.V. (2002). (1974). Stone. M. Sample Size and Factor Analysis.Y. University of Delhi.S. 39. S. (2008). Knowledge Management in Small and MediumSized Enterprises: Issues and Challenges in Bangladesh Perspective. (1987). Robson.C.F.).. Using Multivariate Statistics. Macmillan Business. Kasier. 31. 26. 19. with some well known Factoring Criteria.(1989). Oxford. India: Pearson Education Asia. & Ferdausy. J.SRM Management Digest . R. V. (---). M . 9(4): 28-35 29. & Machtynger. New York: McGraw-Hill. Relationship Marketing. Armstrong. Woodcock. 17. New Delhi.B. O. Malhotra. Wood. 4.P. New York.L. A Turn in the South.R.A. C.. London: Kogan Page Ltd. Sydney: Allen and Unwin.(1993). A New Factoring Criterion Based on Principal Factor Reliability Coefficient’s and its Comparison.

Balasundaram Nimalathasan. including a better understanding and knowledge of the tasks and practices performed by industry professionals. Bangladesh. Ellis & Rothbery. improved self-confidence. 1987) outline the value and variety of the benefits enjoyed by those internee participating in internships. Sathyabama University. autonomous and governments’ enterprises. enhanced employment and professional growth opportunities. 2. Samenfink (1995) noted that internships are outlets that should be used to invigorate faculty and bring excitement back to the classroom as well as stimulate new research interests. Chennai Mohammed Abu Taher. seek outside experiences for the students. Internships provide real world industry demands and hands. The value of internships is well documented in research literature (Kok. Prof. exposure to management activities. Internship Programme: An Overview Every year Department of Management Studies (DMS) University of Chittagong.SAARC Scholar. 1998. in which students apply their skills and knowledge in a professional setting. competencies. of Chittagong. 2000). 1988). Research Fellow.on learning needed to rekindle skills and update their knowledge. they can widen knowledge. the ability to network within the industry by creating personal contacts. Univ. Boyle & Crosby (1997) said that internships for both faculty and students should be required to adequately evaluate the quality of educational programmes. It provides a supervised pre-professional learning experience. multinational companies (MNCs) and other research bodies or development projects where the students get an opportunity for translating theoretical conception into real life situation. Department of Management Studies University of Chittagong. . Department or faculty internships were important for those who teach courses that are vocationally-oriented (Baha & Glon. and experience related to their career. Various studies (Petrilose & Montgomery. After completion of MBA written exam. Bangladesh 1. 1993).2010 RETAIL MANAGEMENT ATTITUDES AND ITS IMPACT ON INTERNEES’ PERFORMANCE: A STUDY ON SELECTED RETAIL ENTERPRISES IN BANGLADESH Ramiah Kumar Gandhi. As an intern. The basic objective of internship is to provide practical exposure to the students in a working environment. Internship can be really helpful to any MBA graduates. The internship experience enables internee to apply classroom theory within the actual world of work thus bridging the gap between theory and practice. an internship is viewed as a short-term practical work experience in which internees receive training and gain experience in a specific field or career area of their interest. Dept of Management Studies. DMS provides internship program to help students to assimilate information and bridge gap between academics and career. and contributes to little or no interest in researching the issues facing the industry. Bangladesh is allowed internship training program with live practical exposure for Master of Business Administration (MBA) graduates. and the development of skills relevant to their particular Failure to create and support opportunities for faculty to re-enter the industry squelches the overall over all motivation for these individuals to perform in the classroom. Gabris & Mitchell. the internees are required to undergo internship program with business organizations. This is helpful for the student as pre-work experience that employers are looking out for in a candidate. This idea is mirrored by other researchers that believe vocationally-oriented faulty tend and starve for the excitement of guest service and fast-paced production missing in their teaching careers (Chesser.107 SRM Management Digest .Theoretical Background In general terms. 1989. who are looking for hands-on expertise. Downey & DeVeau.

During data collection. It has been prepared based on five Likert scale (1= Excellent. 4 = Average and 5= Unsatisfactory) to identify variables of the RMA and IP.e. Validation procedures involved initial consultation with experts (i. To attain the main objectives.1 Sampling Strategy These retail enterprises have been selected through random and purposive sampling.6 as recommendated by Bagozzi & Yi’s (1988). journals. 5. Hence ultimate sample is seventy five retail enterprises in Bangladesh.Hypotheses The following hypotheses are taken for the study 1. 5. 1994) or with the standard value of 0. If we compare our reliability value with the standard value alpha of 0. we analysed the collected data by inferential statistics (i.2 Data Sources Given the nature of the present study.900 for RMA and IP variables. planners. RMA and IP are positively correlated.SRM Management Digest . 2.4 Reliability and Validity The reliability value of our surveyed data was 0. The collected data may be processed and analysed in order to make the study useful to the practitioners. Research methodology describes sampling strategy. Primary data were collected through the questionnaire. it is essential to describe the methods to be used in collection of data and to analyse the data as well. 4. When only anyone does the research in systematic way with clear purpose. data sources. A well known statistical package for social sciences (SPSS) 13.. The experts also judged the face and content validity of the questionnaires as adequate. the authors were always careful of the objectives and hypotheses of the study. Therefore. academic committee) from DMS.For the study. 2 = Very Good. 4.Research Methodology Methodology is vital part of any research as it facilitates any research with systematic way to collect data and interpret them. 5. In this way. it can be a real research and can achieve the defined objectives for the research. a more accurate recommendation (Nunnally & Bernstein’s. books. the specific objectives are: 1. Researchers find that the scales used by us are highly reliable for data analysis.. researchers. career choice. correlation and regression). To recognize the factors that determining RMA. 5. entire analysis is done by personal computer.factor analysis.e. the present study is initiated to identify dimensions of retail management attitudes towards internees’ performance in some selected retail enterprises in Bangladesh 3. Hence. measures. newspapers and ongoing academic working papers. .3 Measures The questionnaire was administrated managers in different retail enterprises which were attached the internees in Bangladesh. To identify the relationship between RMA and IP.0 version was used in order to analyze the data. 2. RMA has impact on IP. University of Chittagong. To suggest some measures to enhance the IP. 3= Good. To identify the factors that determining RMA. and 3. Secondary data were collected from research studies. researchers satisfied content and construct validity.2010 108 sources.7 advocated by Cronbach (1951).5 Statistical Tools Used 5. reliability & validity and statistical tool used 5. it was required to collect data from the primary and secondary In the present study.Objectives The main objective of the present study is to find out the impact of RMA towards IP in selected retail enterprises in Bangladesh. policy makers and academicians.

Its value is estimated to be 0. In this connection.423 0.569 0. Before applying factor analysis.511 0.337 0. collected is appropriate for factor analysis or not.288 0. The appropriateness of factor analysis is dependent upon the sample size. This is done by determining the association in between scores obtained from different administrations of the scale. Windaman.520 1 RE JI AC AOUP T AWI 1 SRM Management Digest .900 . RE with T. AWI with EFF and CRE. thus is reliable.449 0.550 0. the scale yields consistent result.428 0. underlying dimensions of the RMA of the respondents.327 1 0.450 0.499 0.443 1 0. EFF: Efficiency.600 0.341 1 0. These are IN with JI. MacCallum.449 0. JI: Job interest. CRE: Creativity MA EFF CRE 0. In this regard communalities of characteristics have been shown in table-2.477 0.365 1 0.6 for the scale to be reliable (Malhotra.386 0. 2002.417 0. Zhang & Hong (1999) have shown that the minimum sample size depends upon other aspects of the design of the study. Efficiency. AOUP: Ability to Operate Under Pressure. Results and Discussion This section focuses on the identification of potential.2010 recommendation Nunnally & Bernstein (1994) or with the standard value of 0. In the present study.349 0. RE: Resourcefulness. so.495 0.500 1 Source: Survey data After checking the reliability of scale and correlation matrix.6 advocated by Cronbach (1951). T: Time. If the association is high.453 0. After checking the reliability of scale.386 0.590 0. therefore. CRE: Creativity . we tested whether the data.6 relatively small samples (less than 100) may be perfectly adequate.253 1 0.427 0. AOUP with AWI and MA.496 0. 1951). Cronbach.293 0.6 as recommendated by Bagozzi and Yi’s (1988) we find that the scales used by us are highly reliable for factor analysis.457 0.362 0. T with EFF and CRE.294 0. IN: Initiative.524 0.642 0. as communalities become lower the importance of sample size increases. AC: Ability to Communicate.405 0.445 0. Cronbach’s alpha is most widely used method.416 0. a more accurate Table-1: Correlation Matrix IN IN RE JI AC AOUP T AWI MA EFF CRE 1 0. MA: Maturity. The responses for the variables are subjected to factor analysis method. According to them.430 0.516 1 0. testing of the reliability of the scale is very much important as it shows the extent to which a scale produces consistent result if measurements are made repeatedly. They have advocated that if all communalities are above 0. the matrix is suitable for factoring.368 0. It may be mentioned that its value varies from 0 to 1 but.109 6. we.381 1 0.420 0. MA.1 But no correlation comes out as damaging as to cause multicolinerity and so. satisfactory value is required to be more than 0. If we compare our reliability value with the standard value alpha of 0.460 0. AWI: Ability to Work Independently. MA with EFF and EFF with CRE. used Cronbach’s alpha scale as a measure of reliability. an examination of the correlation matrix (For details please see table-1) reveals moderately significant correlations between some of the variables.562 0.

.000 1. researchers’ recommend as varimax).000 1..000 1.8 and 0.59 45 .Olkin (KMO) measure of sampling adequacy is still another useful method to show the appropriateness of data for factor analysis.0) was used for this purpose.SRM Management Digest . Between 0. ‘rule of . 2000). In this connection.608 0.879 (For details please see table-3). Kaiser – Meyer. In this study.879 310.000 1. Statistical Package for Social Science (SPSS) software (version 13. having a significance value less than 0.000 1.000 Extraction 0.8 are good.000 Bartlett’s test of sphericity (Barlett. test value of ChiSquare 310. The KMO statistics varies between o and 1. thereby indicating that the sample taken to process the factor analysis is statistically significant.000 1.516 0.7 and 0. between 0.5. Extraction Method: Principal Component Analysis The appropriateness of factor analysis is dependent upon the sample size.e. Kasier (1974) recommends that values greater than 0.2010 110 Table-2: Communalities Management Attitudes 1 2 3 4 5 6 7 8 9 10 Initiative Resourcefulness Job interest Ability to Communicate Ability to Operate Under Pressure Timeliness Ability to Work Independently Maturity Efficiency Creativity Initial 1.5 are acceptable. Bartlett’s Test of Sphericity Approx.000 1.605 0. After examining the reliabity of the scale and testing appropriateness of data as above.e. 1950) is the third statistical test applied in the study for verifying its appropriateness.9 are superb (Field.701 0. between 0. In the present study. Table-3: KMO and Bartlett’s Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy. Two variables extracted from the analysis with an Eigen value of greater than 1 (i.560 Source: Survey Data.572 0.5 and 0. the value of KMO for overall matrix is 0. Chi-Square df Sig.587 0. For this. This test should be significant i. When the original ten variables were analysed by the PCA. (Generally.567 0.000 1.594 is significant (as also given in table-3) indicating that the data is appropriate for the factor analysis.774 0.7 are mediocre. we employed principal component analysis (PCA) followed by the varimax rotation. we next carried out factor analysis to indentify the variables for management attitudes. Source: Survey data .000 1.556 0.

The remaining variance.602 2 0.031 35. Hair.612 0.50 were considered significant (Pal.699 0.804 0. 2000).726 0.452 1 2 4.968 1.30 are considered significant. which explained 60. The rotated (Varimax) component loadings for the two components (factors) are presented in Table-5. Tilak. Table-5: Rotated Component Matrix for MA Components Variables AWI CRE RE EFF T MA AOUP JI IN AC Source: Survey data Each of two management attitudes listed in table-5 is labelled according to the name of the value that loaded most highly for those attitudes. The first component explains the most and about 35. Table-4: Total Variance Explained Component Extraction Sums of Squared Loadings Total % of Variance 49. Tatham.772 Rotation Sums of Squared Loadings Cumulative Cumulative % Total % of Variance % 3. Anderson. For parsimony.703 0. Hema. as we know. & Black.452 percent of the total variance (For details please see Table-4).031 percent.40 are considered more important and 0.421 60. Descriptions Ability to Work Independently Creativity Resourcefulness Efficiency Timeliness Maturity Ability to Operate Under Pressure Job interest Initiative Ability to Communicate 1 0. 2003).865 0. only those factors with loadings above 0.452 Source: Survey Data The PCA are further Orthogonally Rotated using Varimax with Kaiser Normalization algorithm.680 60. 2005. The higher a factor loading.739 0.759 0. the more would its test reflect or measure as characteristics (Pallant. It is worth mentioning out here that factor loading greater than 0. is explained by other components.680 10.503 35. 1986. & Basil.111 SRM Management Digest . Anura. 0.2010 thumb’).542 2. 1987.421 25.077 49.652 .421 percent and second component explains 25. Pal & Bagi.50 or greater are considered very significant.

In addition.000) AWI 0.606** (0.899** (0. maturity and ability to operate under pressure. IP=f (AWI.865 to 0.624** (0. the findings are in line with those of Boyle & Crosby (1997). AWI and JI are also positively correlated with IP. analysis of variance (ANOVA) and the t statistic are used. JI) IP = ßO + ß1(AWI) + ß2 (JI) + e Where ß0 .652 belong to job interest.602. resourcefulness. . R. e. Correlation analysis is performed to find out the pairwise relationship between variables. these groups are considered as independent variables and internee’s performance are considered dependent variables as well for further analyses. Ability to Work Independently . From these. Analyses presented in the above sections produced the following list of two management attitudes groups suitable for representing management attitudes of the selected organizations. Further the following. timeliness. RMA and IP are positively correlated with the value of 0. and ß2 are the regression co-efficient AWI = Ability to Work Independently. model was formulated to examine the impact of management attitudes towards internee’s performance. AWI. Hence hypothesis one is accepted. ß1.705** (0. Management attitudes group-I: Ability to Work Independently-These attitudes are represented by seven variables with factor loadings ranging from 0.g. correlation (r).2010 112 The management attitudes getting highest loading becomes the title of each group of management attitudes. Table-6: Retail Management Attitudes and Internees’ Performance Variables IP MA AWI MA 0. They are ability to work independently. the results are summarised in table-6. In addition.759 to 0. JI and IP. efficiency.000) 0.741** (0. correlations analysis was carried out to find out the relationship among the variables.894** (0.741 which is highly significant at 1 percent level of significance.01 level (2-tailed) Table-6 shows that the correlation values between the variables. variance. R2 (Coefficient of determination). JI e = Job Interest = error term IP = Internees’ performance To test how well the model fit the data and findings.000) ** Correlation is significant at the 0. creativity.000) JI 0.000) 0.SRM Management Digest . Thus. Hence. Management attitudes group-II: Job interest-Three management attitudes’ variables ranging from 0.000) 0.title of characteristics group I and the like. initiative and ability to communicate.

696 .8 percent of the observed variability in IP can be explained by the different in retail management attitudes namely AWI and JI. Table-7: Predictors of Internees’ performance . Table -8: Coefficients for predictors of Internees’ Performance Source: Survey data In the above model.Model summary Model 1 Predictors: (Constant). Therefore the structure should be decentralized with participative decision-making and upward communication flows. In this model value of R2 denotes that 55.368 .680 Sig 0. JI R 0.517 .154 .Effor .000) and an examination of the model summary in conjunction with ANOVA indicates that the model explains the most possible combination of predictor variables that could contribute to the relationship with the dependent variable. A enter wise variable selection is used in the regression analysis and table-7 provides the summary measure of the model. Unfortunately the organizations today continue to be highly formalized with accompanying inflexible.113 SRM Management Digest . hypothesis two is also accepted.431 and P = 0.219 .747 R2 0. Organizational Climate The organization should create a supportive organizational climate. the following policy actions may be considered worthwhile.558).477 The management attitude (AWI and JI) in the above model revealed the ability to predict IP (R2 = 0.002 . impersonal climate. JI is also highly significant at 1 percent level which clarifies that with the increasing a unit of JI. ¡   Models 1 AWI JI Constant Unstandardized Coefficients ß -. Policy implications Although the present study was confined to RMA and Its impact on IP. AWI. 7.000 0.154. it may be appropriate to state briefly the policy implications for the study. IP will be increased 5.130 Standardized Coefficients Beta t -1.133 .2 percent is not explained which means that the rest 44. t value for AWI is highly significant at 1 percent level. It indicates that with increasing level of AWI.558 Adjusted R2 0. The remaining 44. IP will be increased 3. Furthermore.2 percent of the variation in IP is related to other variables which are not depicted in the model.2010 Further a multiple regression analysis is performed to identify the predictors of IP as conceptualized in the model. 8.097 0.409 Std.244 levels. In this context.244 3. Therefore.311 5. This variance is highly significant as indicated by the F value (F=45.

New York: McGrawHill. Malhotra. Arrangement of Rountine Training Facilities Training to internees has become an essential factor at this moment. (2002). 9. 9.. Kasier. 5. Windaman. An Index of Factorial Simplicit.SRM Management Digest . L. M. it is apparent that the perceived management attitudes have a significant impact on IP. 4. 74-95. For better assessment of training needs. Sri Lankan Journal of Management. A Theoretical study of Some Factor Analysis Problems and Pal.(2000). Personal Relationship Develop and maintain personal relationship social support at work and away from work can help alleviate the internees’ performance. SPSS survival Manual. Cronbach. (1950). R.the retail managers and internees is indispensable. Marketing Research: An Applied Orientation. 6... Y. Hema. Direction for the Future Researches Researches usually stem from the need of the society. F. Pal. Psychometrika. 297-334. 5e. & Bernstein. A Common Factor Better Reliability Approach to Determine the Number . Anderson. P. 10. Factors Contributing to the Success of Manufacturing Enterprises in Sri Lanka: An Empirical Investigation.Z. Psycometrica. medium and large industrial enterprises of Bangladesh to identify RMA on IP. 8. Sydney: Allen and Unwin. 5(1&2). New Technology New technologies should be used to enhance the internees’ performance... MacCallum. Sample Size and Factor Analysis. (1994).. 2.2010 114 14 Concluding Remarks From the results obtained by the study. and Bagai. P. Hair. 4. 6(3). The comparative study of RMA and IP among SAARC countries and Bangladesh can be made. K. Further the study found that the RMA and IP performance are highly correlated. S. Y. Bartellet. 12. 3. W.F. Bagozzi.S. Coefficient Alpha and the Internal Structure of Tests. 16 (1). Efficient Retail management Efficient retail management. J. & Yi. (1999). (1951). (1986). W. J..Y. R. Psychological Methods. Tilak.).F. J. 77-85. Multivariate Data Analysis.F. (2005). A few suggestions for further researches based on the experience of the present study are given below. A Specific in-depth study may be undertaken on the small. Anura.C. New Delhi: Pearson Education Asia. 3. 13. (1987). a research raises more problems and issues than it proposes to solve. R. stimulate and even provoke future researches in the area of retail management in Bangladesh. Journal of the Academy of Marketing Science. & Basil. British Journal of Statistical Psychology. & Black. (2003). D.C. capable of performing its duties professionally and thereby satisfying both the parties.P..E. retail management should arrange routine task to internees. N. 39: 31-36. & Hong.. 12.. 4:84-99. (3rded. The comparative study of RMA and IP between the enterprises with in Bangladesh may be made. 1. 2. 7. New Delhi: Pearson Education.L. Generally. A separate study may be done between executive position and RMA on IP. 11. S. Tatham. On the Evaluation of Structural Equation Models. R.K. 3. To fulfil the existing need and to identify problems. Pallant. Zhang. 11. H. O. (1974). 10. Nunnally. C. Text and References 1. Tests of Significance in Factor Analysis.J. (1988). 110-130. Ira Psychometrics Theory. it is naturally expected that the present study will encourage.

php . Factoring SRM Management Digest . 2009. India. with some well knew 14. Retrieved August 18. A Paper presented at the IX Annual Conference of the Indian Society for Probability and Statistics held at Delhi. 48(3):187-200.(1997). University of Delhi. igurutraining. 13.115 of Interpretable Factors”.2010 Criteria. A New Factoring Criterion Based on Principal Factor Reliability Coefficient’s and its Comparison. Pal.com/internship-training. from http://www. Y. Indian Psychological Review.

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DYNAMISM OF RETAILING BUSINESS AND ECONOMIC DEVELOPMENT – AN INDIAN PERSPECTIVE
V. Sugumaran, MBA., MCS., M.Phil., PGDCA, Assistant Professor Karunya School of Management, Karunya University, Coimbatore R. Arivazhagan, B. Tech., MBA, Assistant Professor SRM School of Management, SRM University, Chennai

1. Introduction Retailing involves a direct interface with the customer and the coordination of business activities from end to end- right from the concept or design stage of a product or offering, to its delivery and post-delivery service to the customer. The industry has contributed to the economic growth of many countries and is undoubtedly one of the fastest changing and dynamic industries in the world today. Retailing can be defined as the buying and selling of goods and services. It can also be defined as the timely delivery of goods and services demanded by consumers at prices that are competitive and affordable. 2. Retailing Scenario In India The retail scenario in India is unique. Much of its in the unorganized sector, with over 12 million retail outlets of various sizes and formats. Almost 96% of these retail outlets are less than 500 sq. ft in size, the per capita retail space in India being 2 sq. ft. compared to the US figure of 16 sq. ft. India’s per capita retailing space is thus the lowest in the world. With more than 9 outlets per 1,000 people, India has the largest number in the world. Most of them are independent and contribute as much as 96% to total retail sales. The growth and development of organized retailed in India is driven by two main factors – lower prices and benefits the consumers can’t resist. The retail business in India in the year 2000 was Rs.400000 crore and is estimated to go to Rs.800000 crore by the years 2005, an annual increase of 20%. The contribution of the organized retail industry in

the year 2000 was Rs.20,000 crore and is likely to increase to Rs.160000 crore by 2005. 3. Retail Industry In India Retail is India’s largest industry, accounting for over 10 percent of the country’s GDP and around eight percent of employment. Retail in India is at the crossroads. It has emerged as one of the most dynamic and fast paced industries with several players entering the market. That said, the heavy initial investments required make break even hard to achieve and many players have not tasted success to date. However, the future is promising; the market is growing, government policies are becoming more favorable and emerging technologies are facilitating operations. Retailing in India is gradually inching its way to becoming the next boom industry. The whole concept of shopping has altered in terms of format and consumer buying behavior, ushering in a revolution in shopping. Modern retail has entered India as seen in sprawling shopping centers, multi-storied malls and huge complexes offer shopping, entertainment and food all under one roof. 4. The Emerging Sectors In Retailing Retailing, one of the largest sectors in the global economy, is going through a transition phase not only in India but the world over. For a long time, the corner grocery store was the only choice available to the consumer, especially in the urban areas. This is slowly giving way to international formats of retailing. The traditional food and grocery segment has seen the emergence of supermarkets/

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SRM Management Digest - 2010

grocery chains (Food World, Nilgiris, Apna Bazaar), convenience stores (Convenio, HP Speed mart) and fast-food chains. It is the non-food segment; however that foray has been made into a variety of new sectors. These include lifestyle/fashion segments (Shoppers’ Stop, Globus, Life Style, Westside), apparel/accessories (Pantaloon, Levis, Reebok), books/music/gifts (Archies, Music World, Crosswords, Landmark), appliances and consumer durables (Viveks, Jainsons, Vasant & Co.), drugs and pharmacy (Health and Glow, Apollo). The emergence of new sectors has been accompanied by changes in existing formats as well as the beginning of new formats. 5. Retailing Scenario- Global View Retailing in more developed countries is a big business and better organized than what in India. According to a report published by McKinsey & Co.

along with the Confederation of the Indian Industry the global retail business is a worth a staggering US$ 6.6 trillion. In the developed world, most of it is accounted for by the organized retail sector. The service sector accounts for a large share of GDP in most developed economies. And the retail sector forms a very strong component of the service sector. In short, as long as people need to buy, retail will generate employment. Globally, retailing is a customer-centric with a emphasis on innovation in products, processes and services. With total sales of US$ 6.6 trillion, retailing is the world’s largest private industry, ahead of finance and engineering. Some of the world’s largest companies are in this sector: over 50 Fortune, 500 companies and around 25 of the Asian Top 200 firms and retailers. Wal-Mart, the world’s second largest retailer, has a turnover of US$ 260 billion, almost one-third of India’s GDP.

Fig -1 Retail Sales in 2000

As many as 10% of the world’s billionaires are retailers. The industry accounts for over 8% of GDP in western countries, and is one of the largest employers. According to the U.S.Department of Labor, more than 22 million Americans are employed in the retailing industry in over 2 million retail stores.

SRM Management Digest - 2010

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6. The Indian Economic Survey for 2007 has set the target growth rate of GDP to be 9% for the period from 2007-2012

other aspects of business. The combination of these factors has created a situation that is unique in India’s history as an independent country. Business growth has lead to individual prosperity which is, in turn, leading to explosive growth of further business opportunities. Although India’s per capita income still laces it in the list of “developing countries”, a significant population segment has emerged that is truly middle-class.

India has had one of the consistently highest GDP growth rates of the last few years. Further successive Indian governments have steadily liberalised policies related to investments (domestic and foreign), banking, trading and all

2008 2007 2006 2005 2004 2003 0.00% 2.00% 4.00% 6.00% 8.00% 10.00%
Fig 2

Growth Rate of Real GDP

Almost half of India shopping centre space existed by the end of 2007 in the contributions of Mumbai and Delhi. This “over-shopping” is likely to lead to the failure of a significant number of these malls. Paradoxically, despite the proliferation of malls, for retailers and brands, high real estate rental costs are possibly the biggest headache. In many instances, brands have signed on high-rent shops with the aim of balancing their portfolio over time, and fully expect these shops not to make money in the foreseeable future. 7. Government Policy Towards Retail There has been vigorous opposition to foreign direct investment (FDI) in retailing from small traders who fear that foreign retailing companies would take away their business, lead to the closure of many small trading businesses and result in considerable unemployment. Given the political clout of the small trading community,

because of their enormous numbers, the government has barred FDI in retailing since 1997. Hence, at present, foreign retailers can only enter the retailing sector through franchising agreements. 8. Growth of Retailing In India Indian retailing industry has seen phenomenal growth in the last five years (2001-2006). Organized retailing has finally emerged from the shadows of unorganized retailing and is contributing significantly to the growth of Indian retail sector. RNCOS India Retail Sector Analysis (2006-2007) report helps clients to analyze the opportunities and factors critical to the success of retail industry in India. Organized retail will form 10% of total retailing by the end of this decade (2010). From 2006 to 2010, the organized sector will grow at the CAGR of around 49.53% per annum. Cultural and regional differences in India are the biggest challenges in front of retailers. This factor deters the retailers in India from adopting a single retail format. Hypermarket is emerging as the most favorable format

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for the time being in India. The arrival of multinationals will further push the growth of hypermarket format, as it is the best way to compete with unorganized retailing in India. 9. Growth of Retail Outlets In India India is rapidly evolving into a competitive marketplace with potential target consumers in the niche and middle class segments. The market trends indicate tremendous growth opportunities. Global majors too are showing a keen interest in the Indian retail market. Over the years, international brands like Marks & Spencer, Samsonite, Lacoste, McDonalds, Swarovski, Dominos among a host of others have come into India through the franchise route following the relaxation of FDI (foreign direct investment) restrictions. Large Indian companies among them the Tata, Goenka and the Piramal groups are investing heavily in this industry. 10. Suggestions 1. Merger and buy-out of weak retailers by a stronger one, especially in metros and big cities may be another step towards this direction. This would give the new retailer the desired leverage to be world class. 2. Use of technology to the greatest extent possible may also help strengthening the retailer’s position in the marketing channel. First step may be taken with setting up of a network of independent firms believing in use of technology for business excellence. 3. Then a collection of strong retail organizations may pressurize the suppliers and other channel members to use compatible technology. This may open the door for implementation of QR or ECR or other relevant concepts for the retailers.

11. Conclusion According to this year’s Global Retail Development Index India is positioned as the leading destination for retail investment. This followed from the saturation in western retail markets and we find big western retailers like Wal-mart and Tesco entering into Indian market. India’s retail industry accounts for 10 percent of its GDP and 8 percent of the employment to reach $17 billion by 2010. There are about 300 new malls, 1,500 supermarkets and 325 departmental stores being built in the cities very soon. This market research report “The Indian Retail Sector – An Outlook (2005-2010)” analyzes the greatly divided Indian retail market and the trends in its business. Issues such as foreign investment restrictions, modern merchandizing in India, logistics and payment terms for distribution, role of channel members and growth trends in different regions are discussed. The market research report further analyzes the sustainability of the Indian retail sector and on the basis of 25 domestic and international companies the report has given a suitable business model. 12. References 1. Barry Berman&Joel R.Evans (2009), “Retail management a strategic approach”, PHI, Delhi. 2. Gibson G.Vedamani (2007), “Retail Management functional principles and practices”, Jaico Publishing House, Mumbai. 3. Business line 4. www.inretail.in 5. www.fibre2fashion.com

Drucker in his book Management Challenges for the 21st century. anger is a common human emotion felt by people more often than they would like to admit. It is like death and taxes – it should be postponed as long as possible’ quoted Peter F. Some individuals are always angry with others and few are capable of controlling their emotions. There is a constant insecurity and stress and tempers fly easy in such situations. structure and content of work have changed tremendously making it more cognitively complex and more time pressured. It weakens the body and mind of the people. At the moment of anger. anger is especially on the rise. the instrincally faulty person or thing which caused the anger does not really exist. Tamil Nadu-603 203 1. Introduction Faced with a dramatically altered business landscape in the last few years. Declining job security is making more and more employees despise their jobs. As the recent economic breakdown woes adversely affect employee morale and motivation. In such a situation employees need to learn how to control anger and anger management methods need to be given prominence. irritable and frustrated feeling of individuals. at one point or another in their careers. They feel hurt. it creates and increases the pressure of employees. Ignoring the existence and the seriousness of anger can result into serious complications and even long-term ailments. When a person becomes angry with others. Present organizations are certainly different from earlier group by becoming more agile and focused on identifying value from the customer . ‘Every body has accepted by now that change is unavoidable. Hence there is a desperate need to minimize such ailments. It is the outcome of emotional hurt when people feel mistreated or faced with serious problems in achieving personal targets. When organizations are responding more rapidly to market pressures by developing mass customization processes. In many cases. It is the result of tense. Nowadays. physically lashed out and fear being out of control. In the modern corporate world. Work pressure results in anger which affects their professional as well as personal lives. It is a negative state of mind and bad condition of physique. What anger really means …… Anger is momentary temptation and madness that focus attention on animate or inanimate object. They are more hassled by the increase in their work due to the recent changes. displeasure and hostility.2010 120 ECONOMIC SLOWDOWN: MOUNTING PRESSURES AND ANGER MANAGEMENT IN WORK PLACES-AN ANALYSIS Dr. Employees are hurt by the sudden recession and layoffs. they appear to be unpleasant and faulty persons by exaggeration of their negative behavior. Hence. 3. It is a strong feeling of extreme annoyance. duration and frequency. anger is experienced by all. G.SRM Management Digest . Causes of anger In a work place. the anger level of people varies in its intensity. other’s good qualities are easily ignored. employees are working for organisation which faces tough competition and fast technological break through. In the present complex work environment. Ramesh Senior Lecturer in Commerce. keep damages at low and pave way for overall well being and productivity of the employees. employees are expected to adapt quickly to the demands of radical developments in the industry and the organisations. SRM University Kattankulathur. Corporates are hardly realizing the problems of employees and unlikely to provide life long careers even to the best of the best in the field. 2.

This is due to the fact that a large part of anger is a matter of perception of situation. increased heart problems and heart attack. Unreasonable attack on employees and their ideas. constant feeling of failure and agitation mindset among the employees. Consequences of Anger Anger a normal human behaviour. Perceived job insecurity. Aggressive and retaliatory nature of employees. “For every minute you are angry. “Racing has always been more of a mental than a physical problem to me” said Roger Banister. Job insecurity and continuously changing nature and contents of job. 7. Lack of outside support. when gets out of control. Mistreatment and humiliation by the superior. mistreatment by the superiors. Anger is generally resulting from both internal things and external events.121 SRM Management Digest . drug abuse and alcoholic behaviour. When every enterprise aspires to be leader of the market. Continuous pressures and constant monitoring of employees’ performance results in tension to them which in turn leads their anger. it results in violent rage or . Betrayal of others and threatening to take employees genuine needs. it leads to problems of work and personal relationship outside the job. A study on the internal things (personal factors) which causes anger among employees (50) of a private firm in Chennai city exhibits the following: 5. External Factors Contributing Employees’ Anger: Uncomfortable surrounding causing frustration and stress. Chronical problems – angry with themselves. Extreme fear or stress and spiritual void. Intimidation and injustice by the management. Hurtful criticisms and conflict between employees. Inability to cope up with the change and its speed. The causes of anger are many and varied in nature. Poor judgmental capabilities of staff over others’ intention and behavior. In rare cases. This creates serious problems for the employees of the enterprise by constantly checking and improving their performances over a period of time. it makes both physical and mental effects on him. When an individual is angry. stress and anger on the work. Personal factors causing employees’ anger: Physical and mental problems in adjusting to the demands and constraints of the work. It can also cause depression. irritations and unfairness. What causes a lot of anger for one person may not cause anger for someone else. Long hours of frustration and stress. anger is the outcome of perception of threat on future. Anger is an extremely destructive emotion that harms people who store it than others to whom it is meant. Memories of past traumatic and enraging events like intimidation by others. high blood pressure. However. It may cause to other life threatening coronary heart diseases. many struggle in the race for reaching the top. Disturbing situations like abuse. Anger can lead to injury.2010 perspective. Unreasonable expectations Emotional reasoning of small and normal events. They are: 6. Absence of optimistic mind set. Health problems. In these cases. you lose sixty seconds of happiness” quoted Ralph Waldo Emerson. It develops pressures. The study has also disclosed some of the external factors contributing the anger of employees in the work place. Procrastination of work till deadline for completion.

Successful employees who are smarter and more thorough about dealing with anger are capable of achieving top things by exploiting opportunities and making the best use of available resources. “When anger rises. anger affects the reputation of employees and takes a heavy toll on the personality of people. “The greatest remedy for anger is Delay” said Seneca. This anger afflicts the employees mind almost everyday. When anger is suppressed and not allowed as outward expression it can turn inward to a person who stores it. They react to negative situations in their own style. Osho said. People who feel angry about social injustice often achieve positive results. It is really natural that a comment. approaching things with cool head can lead to achieving desired results in an orderly manner. Delaying the process of retaliation and practicing the art of patience can result in better expression of anger. The best answer for a difficult condition is sterling performance in time rather than blaming others for their angry outbursts. expectations and emotions.SRM Management Digest . it is definitely blameworthy. Patience is a powerful prerequisite which can solve the inner problems of employees and their . Anger management is best done when it is started with the understanding of potential negative consequences of anger and possible rewards to the people who practices patience in angry moments. loss of jobs and added troubles to employees’ personal lives.out. An employee can respond to anger in three major ways suppressing. Calming is a direct approach aimed at getting out of angry feelings earlier with the help of relaxation tools. Depending on how it is managed effectively and expressed appropriately. As human beings. ‘One out of every four employees is rather angry at work’. is directed at the organisation or at the worker’s direct seniors. he / she tends to become angry because the work not done or slow phase in which it is progressing. Suppressing is an act of hiding anger. every employee has his/her own beliefs. When a person is under stress. anger can also help to energise people at work and motivate them for a better performance. expressing and calming. “Anger is a temporary madness”. Some people use verbal abusing and others physically express the anger in uncontrollable situations. When anger level is beyond the control of employee. Becoming angry in these situations is the spontaneous and normal response but the limits of the anger should be in control. Actually. As per the research studies of Yale Scholar Signal Barsade and Donald Gibson of Fairfield University. Whether justified or not. high blood pressure and even heart attack. This will yield expected results in many cases by getting best out of the situations. a criticism or a mistreat can cause employee’s anger. Anger is best recognized and well controlled if it is properly understood.2010 122 possible suicide. Some people learned the art of patience as a response to this momentary behaviour. When situations are becoming tough. said Alfred Montapert. They treat it as a sign of strength over others. using humour and taking time. When expressed in a constructive manner. they added. If anger is not expressed it can create great harm to people developing it by causing hyper tension. High and uncontrolled anger at work places ends up with physical attack on others. Hence angry employees should know how to control anger instead of trying to suppress it. it is an expression of madness in a strange way which never produces any fruitful results. This anger. Expressing anger in an orderly and assertive manner is a clever approach. think of the consequences” said Confucius. in most cases. It damages the relationship with other employees and builds an attitude of resentment. Management of Anger Anger is a common emotion of a human being. 8. The managers have to publicly state the disapproval of outbursts when their magnitude is of high decibel levels. it leads to positive changes in the work place. “Every time you get angry you poison your own system”.

Anger management activities are many and there is a chance of trying one by one. Anger Management for 21st century suggested a set of eight key anger management tools. it is more effective to find the causes of anger and tackle the problem. may not help others. Ari Novick in their most acclaimed book. They have to apply practical methods in the daily life to reduce anger and finally prevent it from arising at all. They are listed below: ‘Recognize stress’ before it turns into anger. Due to sudden lay-offs and increased pressures for retaining the jobs. Getting angry hardly solves anything. Tony Fiore and Dr. disgruntled attitude and snapping at other staffs are some of the symptoms of building anger. Efforts must be made to identify the angry workers at an early stage before it escalates and reaches out others. Rather than blaming the employee for his/her angry outbursts. Negative and cynical comments about others. adequately recognized and carefully addressed. The current economic downturn has heavily impacted the job structure and heightened the chances of job insecurity to many of the employees. All these steps are interactive in nature and very useful in releasing the tension in the present cut throat work environment. What is effective and useful to one. Controlling the anger of employees at work place is not an easy task. ‘Respond to the anger’ (through appropriate method) rather than reacting to it. There are a number of anger management strategies available. relaxation books and others ‘Problem solving’ by finding ways to face the problem instead of avoiding it. an angry worker is not only unproductive but also spread the behaviour to other people making their work lives difficult. 9. However in the heat of the moment. Employees having difficulty in controlling anger are not bad people. they have to select a best method for feeling least possible damage to the self and others. Leaders can address the employee’s problems and seek solutions in the following manner: . Dr. employees’ anger level is always on rise. Learn to ‘adjust expectations’ according to reality ‘Do not forget things’ but forgive others.2010 problems with others. honesty and tremendous inner strength of people. it can be hard for employees to remember and adapt to these copying strategies and skills. Anger Management: Responsibility of the Managers In a workplace. Depending upon the level of anger and the frequency in which it arises. It may take some time and require few intense efforts to put these techniques into practice.123 SRM Management Digest . In order to keep the anger under control and mange it properly the following other strategies are also recommended: ‘Relaxation’ by deep breathing. Depending upon the anger patterns of employees. There are a lot of strategies and techniques available for people who try it to discover their true interest in official and personal lives. ‘Recognize and modify the inner conversation’ to determine how to express anger. ‘Cognitive Restructuring’ by changing the way people think ‘Humour and Joy’ by motivating a sense of happiness to lighten angry feelings. It requires determined commitment. These signs are to be properly noticed. ‘Communicate others assertively’ without getting hostile to anybody or anything. Effectiveness of many of them has not been proved. ‘Develop Empathy’ by seeing things from other are perspective and willing to listen. In the management of anger let the management not receives a shock through complacency. Retreat and ‘think anger things are over’ by taking temporary time-out form the situation. employees will have to select a model that best suits them.

2010 124 ‘Identify the anger’ in time. www. 7. NewDelhi.free. Conclusion Recently.google. Why not they do something to make jobs anger . 10. Noise is a major source of distraction and anger. Show that sheer bad behavior serves no purpose and not to be tolerated. Disapprove too excessive outbursts. Listen and recognize the ‘real problem’. Anger is the outcome of a feeling of being uncared for. anger continues to be a major problem in many workplaces. They have to accept that the price for winning is very high in tough times.com . December 17. 8. However. They should not struggle to achieve perfectionism in all the tasks: after all no one is perfect in this world. Although anger management is under looked in many places. conditions start reverting to normalcy and business starts picking up again. Discuss the past achievements of the employees and motivate them to achieve high. Darwin’s ‘Survival of the fittest’ theory rings true in today’s corporate context. Stephen P.. Anger Explodes. 2006. April 2009. Besides the employees must understand that ‘winning is not every thing’ in the life. the worst of the downturn appears to be over at least in India. Hence the task is not to eliminate anger but to manage it through innovation. 2. Ramiya Bhas. Elsevier. Hence. It is worth assessing the responsiveness of the organisation to this problem. Employees are incharge of their careers. Draw the ‘anger limits’.org/ www. Create a common ground and make employees feel that everyone face the problem situation. Quite obviously. Decide and Conquer. Understanding Change.SRM Management Digest . The Journal of All India Management Association. New Delhi. the characteristic of future winning organisations would be to adopt a proactive approach within the firm among its employees to deal with the changing circumstances and increasing pressures. There is plenty. Complexity and contradictions are inherent in any enterprise due to the multiple objectives of people in it. Standing Tall. ensure that noise levels are kept to a minimum. anger is the perfect time when employees come to know how much strong they are and how fast they respond to the difficult situations.anger-management-techniques. organisation becomes enemy of the employees. it becomes a lot easier to them. When they know how to fix their job. the management can do to convert the depressing situation into a positive and energetic one. All India Management Association. 4. When Optimism Erodes. Linder Hobeche. a systematic approach is always considered as the best solution to protect human resources. Show that the employee’s problems are recognized and will be addressed. 2009 6. In the end. Organisations with anger management programmes adapt more quickly in times of rapid changes. Chennai: The Times of India. Chennai. 3. interesting and enjoyable? 11. The recent slowdown has bad a domino effect across the globe and has not been favorable for the employees. References 1. 2008. 5. Corporates can stretch a lot and offer more attention to health care of employees and ease emotional burden of people. Executive Health Stress Management..Robbins. New Delhi: Prentice Hall. Uzma Hyder. It is time to look at some of the strategic imperatives that business managers should focus on for the future.angermanagementresource. The Hindu. Times Ascent. In many of the anger situations.com www. July 8. They have to look into other dimensions of life by appreciating and enjoying things beyond work.

competitiveness. Mu. the ideal IT staff won’t consist of narrow technology specialists. people are the most critical problem. Professor Department of Management Sciences. At the same time. India 1 Introduction The IT’s role is changing.Subrahmanian. they are now generally considered table stakes and are often delivered through outsourcing. and performance. This is the bottom line of a recent global study of IT capability a study performed across hundreds of companies: IT is critical to firm growth because it enables firms to scale -. o IT-related problems persist. the main focus for effective IT functions is to increase collaboration with the business—using information and technology to help drive business improvement. The few non-IT people in the sample have a much more positive view of IT than do the IT professionals themselves. SRM University . in daily practice IT governance is still very much a CIO/IT director issue. o The importance of IT continues to increase. So the business value is defined as follows: Business value is the benefit for business units and the enterprise as a whole. and user support. Velammal Engineering College. and communication skills who can work hand-in-hand with the company to achieve its strategic objectives. but of people with business savvy and strong analytic. India Lakshmi Vishnu Murthy Tunuguntla. but slowly. such as application development. While security/ compliance is an issue. • Direct Contribution to the corporation’s market position or revenue Deliverables and results that solving customer business needs or challenges Customer cost savings or financial benefits Also IT enables profitable business growth.2010 BUSINESS VALUE OF IT Dr. Research Scholar School of Management. we believe that going forward. o Self-assessment regarding IT governance has increased and is quite positive o Communication between IT and users is improving. or shared services. data center operations. b) In 2008. are still important. CA labs have sponsored a Research Program to Cranefiled University UK for to study the business value of IT management and develop an approach to understand and assess the value of their IT management investments. In the future. off-shoring. but not universally. organization. becoming increasingly strategic and business-focused. . CA says In the current challenging economic climate.Chennai. Chennai. represented in dollar terms that is a result of IT solutions or services as evidenced by one or more of the following. o Good IT governance practices are known and applied. o There is still substantial room for improvement in alignment between IT governance and corporate governance—as well as for IT strategy and business strategy. and business model. we are finding IT is being asked to support the company in new and more strategic ways. interpersonal. Consequently. While traditional IT activities. The new face of IT requires new skills and capabilities.125 SRM Management Digest . 2 Review of Literature a) In 2008 IT Governance Institute (ITGI) USA conducted a survey and the Key Findings of the Survey are as follows : o Although championship for IT governance within the enterprise comes from the C-level.an ability to manage increases in the complexity of their business processes.

IT value should be related to a company’s worth. Wessels and others observe. d) In 2006 a paper published at Knowledge@ Wharton says “Traditionally. “First. c) In 2007. value-based metric for future investment. “A comprehensive IT-Finance effort means more than just integrating a series of systems. a research conducted by Paul Williams and John Spangenberg has found the following factors for maximizing the share holder value from IT investments.2010 126 it’s more important than ever for CIO’s to measure the value of their IT assets: after all. According to a survey released by CFO magazine in December 2005. including the cancellation or rationalisation of non-value-adding projects. In reality.. . and give an accurate. thus reducing individual project duration. accordingly. o Be prepared to use innovative funding models. the underlying business processes must be examined -otherwise you may be simply taking a bad way of doing things and making it twice as fast. information technology simply involved gathering data for Finance and then pushing it out in a series e) f) g) h) of reports. is an important first step. “But today. increasingly being looked upon as chief performance officers. 77% of CFOs say they regard IT as a strategic function instead of as a utility and. enabling them to engage in more analytical functions that force them to rethink the way in which their business operates. o Focus IT investments on properly aligned business objectives. o Achieve appropriate maturity (CMMI) of all key processes— usually level 3 and above— to reduce risk and achieve economies of scale in the delivery and value management of automated solutions. it gives CFOs timely access to critical parts of a business. technology is a key enabler of business success and constitutes a major portion of an organization’s capital investment. Wessels says that it’s not unusual for companies to focus on activity that is easy to measure. “CFOs are .” observes Wessels. instead of focusing on strategic indicators that relate to the complete activity and long-term health of the enterprise.g.including those dependent on technology.” he says. o Ensure active IT investment portfolio management.” The result. strategic change vs. 65% plan to spend more on IT this year compared to last year.” The roadblocks for getting adequate returns on IT investment are two-fold. Typically however. however. such as customer satisfaction. . o Monitor the investment portfolio mix among investment categories (e. o Be prepared to innovate and not just ‘follow the pack’.SRM Management Digest . Determining just what those KPIs are. is that IT/Finance alignment has become a key catalyst for business strategy. notes James . including government/state grants and risk sharing with credible development partners. a CFO can utilize them to identify weak or inefficient business processes -. o Seek early returns from IT investments through stepped phases. current metrics for new IT projects and existing IT management and assets are all cost-based. like total sales or market share. ‘keeping the lights on’). Once the KPIs have been identified. IT is no longer just about information gathering. Instead.and that is where technology can be applied or augmented usefully. charged with developing and upgrading key performance indicators (KPIs) that measure the effectiveness of a business’s operations” -. o Reduce risk through robust and properly applied and monitored internal controls.

” Blyth said. and funding has to be defended at each step. o A standard measurement methodology to determine the impact of IT solutions o A Common valuation process with Finance acting as independent auditors. “One. o Intensive examination of our data and indepth case studies sheds further light on how firms use IT to accelerate business growth. This integration allows companies to achieve business processes scalability. This is a fundamentally different view of scalability than is traditionally used in IT. performance milestones are set at each stage. j) In 2006. such as the reduction of back office support activities and the addition of a technology-driven shared service center.” i) Speaking at the 2005 Wharton Globalization Forum. which allowed for integration and was also a catalyst for deeper changes in the organization. and David Sarnoff from Harvard Business school conducted a research in the midsized firms and found the following. Here. Blyth noted. k) In 2005 Marco Iansiti.127 SRM Management Digest . IT scalability focuses on things such as the scalability of electronic transactions processing. Diageo became the world’s leading premium drinks company by 2002. Investments are phased in. o The amount a company spends on IT is a poor indicator of IT functionality and business impact. the corporations focused on using IT to improve the scalability of critical business processes.” The solution: Diageo invested in a SAP solution. companies often lack the management discipline they need when evaluating technology proposals. it’s difficult to sustain a technology-based competitive advantage. o A business value portfolio of the forecasted and delivered results determined by customer generated critical success indicators o A set of ground rules used to define the program’s operation and to drive accountability for the business value realized by our customers. Blyth said that “approval of IT spending [at Diageo] is subject to enormous evaluation and scrutiny. The business scenario approach to measuring IT capability gives us a good window into process scalability as it was designed to measure exactly this impact of IT within the firm. The best firms couple the design of their information technology system with the design of the firm. two. o A standard set of financial measurements of Business value. Companies that score higher on our business scenario-based measurement of .2010 Blyth. the Intel Corporation conducted a program to meet the challenge of business value. “It’s an example of creating value from a broader business change. the design and implementation of critical business processes is tightly integrated with the design and implementation of IT capabilities needed to manage these processes. chairman of Diageo -. o In each of the case study firms. It is easy to spend a considerable amount of money on technology with very little improvement in the functional capability of the Business. “but we could not operate efficiently as a single global business because our systems and processes [were fragmented].the world’s leading premium drinks company.” Through a series of key acquisitions and divestments. which are called business value dials that serve as a common language throughout the company and are based on customer business objectives. Classically. o Research shows that firms achieve higher growth through the use of information technology to scale their business processes more effectively than their competitors.

2010 128 IT capability have automated their business processes. Good at w orking local and virtual teams.SRM Management Digest . benefits realization data was available for only 31 percent of those interviewed in a recent IBM study. few firms actually reserve funds as a contingency for projects that exceed their budgets. Deep technical expertise. a firm’s core business processes must be enabled by integrated IT capabilities. Though financial institutions are doing well at planning the initial business expense of IT projects. Each iterative expansion or modification of this core business process must be made with an intimate knowledge of how IT can be used to enhance or simplify the process In December 2004 there was another survey conducted by IBM business consulting services. and thus enjoy the benefit of relatively higher business process scalability. outsourced Globally dispersed . inward focus Programming languages Software revision management System flow Specialty. outside focus Requirements Translation Business Change Management Process flow Commodity. To be in alignment. they are still falling short in several ways : o A lack of structured risk evaluation on a portfolio level o Insufficient transparency in managing projects that go over budget o Scarcity of systematic methods to track project performance. With so much at stake. This shift has tremendous implications for the IT workforce OLD IT Internal focus Write the application Design systems Manage Systems Probable requirements for New IT External focus Integrate the application Design Process Manage Business and Vendor relationships Back office/code/geeks Front office/communication/empathize IT context. Compounding the problem. . Value Collocate with Peers and company Business context. on average. o Better visibility into critical business parameters to guide important management decisions. o Using IT to achieve business process scalability provides: o Improved process knowledge and process standardization. Strong communication and people skills. l) 3 Talent Management Business-driven IT requires skills and capabilities that are very different from traditional IT. In fact. o Streamlined operations that can grow without significant additions to headcount. though there is a compelling need to do so. ran more than 60 percent over budget. financial services CIOs need a more effective way to manage IT investments. as evidenced by one study participant whose projects. Virtual teams Now Hiring People with Business savvy. o Flexibility to take advantage of new opportunities and respond quickly to exogenous changes. The repercussions can be considerable. Comfortable moving effectively between business requirement sand IT requirements. which enables the firm to more easily manage the complexity involved in growth. Able to adapt to constantly changing processes.

business side.2010 People with this broad mix of skills are difficult to find. Telecom Business organization IT Function IT system integrators Pharmaceutical Business organization IT Function IT Product development organizations Banking Business organization IT Function Hardware /software suppliers . But to keep up with the changing needs of the company. IT leaders must be brutally honest about their staffs’ current skills and capabilities “While IT is becoming increasingly business-centric and execution is largely employing a distributed delivery model. There appears to be very little alignment between the skills needed to be effective in this new model versus what they are actually hiring or developing within the IT function. The internal IT department catering to the 2. The interactions among various levels of IT are depicted pictorially in the diagram given below. 3. For eg. 4.” 4. A telecom organization like Sprint (A US telecom organization) is supported by Amdocs – A telecom billing product development organization) There is system integrating IT organization like Satyam supporting the Insurance businesses in USA through maintenance contracts There is a hardware manufacturing organization that supplies computers and other components to different organizations. Analysis of the data collected from Literature Review There are three scenarios that are emerging from the analysis 1. Many IT functions in our experience don’t know – or won’t admit – that they have a talent problem.129 SRM Management Digest . For eg. And it’s likely the search will become even more difficult. A pharmaceutical Industry having its own internal IT department There is IT product development organization that provides Products and maintenance services to the business. most IT functions are still hiring for the old era.

There is very limited relationship between t he Metrics and the business goals.Portfolio management Talent management . Appropriate metrics are not used to assess the business value The approved business case is not monitored throughout the lifecycle and the value generated is not monitored Very limited communication about the value generated between the IT and end users IT investment portfolio management does not include the cancellation or rationalisation of non -value-adding projects The new IT paradigm demands new skills that are radically different from the old skills IT Project investment management Availability of operational level agreements (OLA) to meet SLAs Metrics program Business case monitoring and reporting Communication between IT and end users IT Project . The following table describes the major elements of the Business value planning and the issues in these areas. Business value planning Strategic alignment Selection of core business process areas for IT implementation Business case related issues Risk assessment of the IT initiatives Service level agreements between the Business and the IT Accountability issues Agreed approach for Value assessment of IT IT Governance Issues Focus of IT is mostly not based on cus tomer related objectives and business priorities Right business processes that are critical for the success of the organizatio n are not mapped with the IT implementation In many cases the business cases that are approved are not monitored on a periodic basis and is not shared with the business side Proper risk management mechanism at a portfolio level is not in place Service level agreements between the business and IT are existing but does not talk about appropriate metrics that are to be shared on a periodic basis The accountability for the per formance is not linked to the performance There is no agreed approach for value assessment between the business and IT IT projects are managed from a technical p erspective rather than business perspective.SRM Management Digest . However we are trying to present a generics model that describes the elements that need to be present in business value assessment for any type of organization. The customization of this model needs to take place depending on the business context. Insufficient transparency in managing projects that go over budget Scarcity of systematic methods to monitor and control the project In the IT org anizations there are no Operational level agreements among the groups that collectively support the business which results in SLA satisfaction The metrics programs are either tedious are meager. For the sake of simplicity only limited interactions are shown in the diagram. The approach towards the assessment of the Business value of IT is different in each case. Product development organizations and hardware/soft ware suppliers is possible.2010 130 In the figure above the interaction among Telecom Business organization Vis-à-vis IT system integrators.

Project management Project management capabilities are key contributors to successful projects. Value realization The purpose of value realization is to measure and communicate how well the projected benefits of key initiatives are achieved. Customized dashboard . encouraging certification and establishing professional development programs. accountability is combined for business and IT. To accurately measure benefit attainment. What’s more. tactical and operational levels) and issue resolution are established and synchronized. Well-designed systems and processes enable the collection of reliable. Meetings.2010 5. 7.131 SRM Management Digest . 8. Post-project evaluations and other means are used to share knowledge and lessons learned among project teams. performance measurement and compensation are aligned at each level of the pyramid. account managers and closely cooperating project leads support ongoing coordination between business and IT groups. Key to successful alignment is joint portfolio management of transformational projects – considering the business value. risks and changes in organization. timely data. Clear and uniform roles and responsibilities are defined and in effect for project management and portfolio management practices. Through regular (monthly) tracking of project progress. Accountability Accountability is established through contracts with the business that assigns clear portfolio management responsibility through the use of welldefined roles. 7. delivery cost model and agreed-upon key performance indicators (KPIs). allowing quick action and monitoring. review boards. Leading practices: What market leaders are doing We highlight below some of the leading IT investment practices that are currently under way at companies participating in the study. 9. For better management of projects on a regular basis. processes and IT. An accountability pyramid is defined to link each project to the strategic initiatives. IT projects are viewed holistically. Service level management (at the strategic. 6. One project manager may be responsible for the whole or two project managers may be jointly accountable – one for the business and one for IT. And measuring doesn’t end as soon as the project does. reporting is defined and differentiated for various management levels – revealing deviations early. Initial project planning needs to include benefit assessment after the project has been delivered. individual and team targets. Effective program control also helps define necessary organizational changes and start relevant communication to implement those changes. A key aspect of value realization is post-implementation evaluation to assess the actual benefit realization at future points in time. As important as the capability to measure IT project performance is the capability to communicate those results. Wherever possible. Alignment Alignment entails close cooperation between business and IT through the widespread establishment of coordination mechanisms. Budget. financial services firms can uncover any deviations from expected performance early on. Program control Program control centers on the consistent use of standard process measures to manage and determine effectiveness of the overall program. CFO involvement and commitment helps define the approach. as part of a larger business project. Leading firms stress compliance to standard project management methodology. priorities and planning cycles are combined and aligned to enable joint ownership and decision making.

2010 132 tools are increasingly being used to communicate the realized value of an IT investment in business terms. 10. o Understanding the impact of this paradigm on the Talent management o HR Practices needed to develop resources for “Value Delivery” o A generic model that consists of the Critical elements for assessing the Business value of IT based on the study . Scope for Research in this area o To understand the reasons for challenges involved in “Value delivery” by IT to the business and Business value assessment.SRM Management Digest . o Strategy Level • Reason for Limited Business alignment between IT and Business Strategy • Accountability Issues • Communication Plans • Lack of IT Governance o Methodology • Method to assess the value of the Business • Lack of Structured Risk evaluation on a portfolio level • Focus on financial and non financial benefits o Operational 11. Model for assessing the Business Value • Limited communication between the IT and End users • Limited visibility on managing the projects that go over the budget • Mapping between the Business indicators agreed upon at business case stage and measurements collected during the delivery cycle • Value realization capture and reporting o To understand the impact of the Human resources on the “Value delivery” by IT o Understanding of the Business-driven IT skills and capabilities that are very different from traditional IT.

John Spangenberg. Ph. Senior Manager Deloitte Consulting LLP f . Latimore. ITGI USA K. ITGI . References a .Putting Business First Steven Hatfield. Deloitte Consulting LLP Aaron Eisenberg. d – IT Governance global status report – 2008 ITGI.CA Labs Sponsors Major Research Program to Study the Business Value of IT Management h .IT/Finance Alignment: A Boon for Strategy. IBM Business Consulting Services. Financial Services Sector.D. Ph. James Utzschneider. IBM Institute for Business Value. Peter Wiggers.D. VAL IT frame work. CFA.133 12.. Sward g . CA(SA) Managing Consultant. Principal. Inc.Measuring the Business value of Information technology – Practical strategies for IT and Business managers David S. senior Manager. Koos Quak. Financial Services Sector. IBM Business Consulting Services SRM Management Digest . USA e.Reaching efficient frontiers in IT investment management. Boston. but Will the Trend Continue? By Knowledge @Wharton I.2010 Cormac Petit dit de la Roche.Why IT Matters in Midsized Firms Marco Iansiti. Paul Williams. Corporate Governance and IT Governance: exploring the board’s perspective Professor Ernest Jordan David Musson Macquarie Graduate School of Management J. and Sonja Kovaleva. Keystone Strategy. FCA. Microsoft Corporation Greg Richards. Senior Consultant. Daniel W. Principal. David Sarnoff Professor of Business Administration. Inc. Measuring and Demonstrating the Value of IT. Keystone Strategy. USA c – IT and Shareholder Return: Creating Value in the Insurance Industry. MA 02163. Harvard Business School George Favaloro. IBM Business Consulting Services b . Deloitte Consulting LLP Bhushan Shethi.

Radha Ganeshkumar Dr. T.”The New Knowledge Management is the name for the body of issues. N. 3. 1933) and had a considerable influence in the emerging consultancy companies after the Second World War.J. collectively knowledge integration. These information assets may include databases. 2. the human relations school emerged out of research between 1927 and 1932 at the Western Electric Hawthorne Works in Chicago (Mayo. and practices representing the broadening of scope of knowledge management from a concern with knowledge sharing.SRM Management Digest . The growth of knowledge management as a strategy of consultancy companies is one of a series of such strategies dating from Taylor’s (1911) scientific management of the early part of the last century. When knowledge is shared and used. you are competing based on the knowledge of your employees. Time and motion study developed directly out of scientific management and continued till the 1970s as a widespread industrial engineering technique. & Nodine. Muthu Dr. or simply remembered. SRM Valliammai Engineering College. or knowledge production. Definition of Knowledge Management According to Petrides. and Kattankulathur-603 203 1. Knowledge Cycle Gartner defines Knowledge management as an integrated and collaborative approach to the Creation.A. This takes us back to knowledge creation. managing and sharing all of an enterprise’s information. models.” -Cindy Johnson Knowing ignorance is strength. Knowledge is created and captured. ignoring knowledge is sickness. In the second half of the last century. (2003) “Knowledge management is a discipline that promotes an integrated approach to identifying. entered into a computer system of some kind. Knowledge is organized. the pace of new techniques quickened considerably. policies and procedures as well as previously unarticulated expertise and experience resident in individual workers. In the late 1930s. it’s modified by the resources that use it. It is put on paper in a report. Organization. Introduction “Knowledge management is really about recognizing that regardless of what business you are in. Capture.Padmini Dept of Management Studies. where it is classified and modified. L. retrieval. Knowledge is shared and used. to a concern with these things. broadcasting.2010 134 KNOWLEDGE MANAGEMENT VISTA: KEY DRIVERS Dr. documents. and teaching. The Knowledge Management Cycle in the institutional context is described below: Figure No: 1 The Knowledge Management Cycle . as well as knowledge making. Access and Use of Information Assets.R.

But these are scattered in isolated pockets and the awareness on these is inadequate. ) .).). a new society is emerging where knowledge is the primary production resource instead of capital and labor. India is a nation endowed with natural and competitive advantages as also certain distinctive competencies. The acquisition of knowledge has therefore been the thrust area throughout the world and . capital and labor provided the competitive advantage. During the last few centuries the world has undergone a change from agriculture society. g . where natural labor was the critical factor. KM focuses on processes such as acquiring.S. 6. infrastructure etc. Workforce mobility. The key aspects involved are: sharing the experience of knowledge is a unique culture of our country. Volume.g.).g. Aging population. In the 21st century. for improving the quality of Work life (QWL). Efficient utilization of existing knowledge can create comprehensive wealth for the nation in the form of better health.). Order 5. Quality Increase in information (e. National Knowledge Commission (NKC) in India Figure No: 2 Chart Showing National Knowledge Commission (NKC) in India • People –How do you increase the ability of an individual in the organisation to influence others with their knowledge Processes –Its approach varies from organization to organization. Whether a nation has emerged as a knowledge society or not is judged by the way the country effectively deals with knowledge creation and knowledge deployment. P. Where Does KM Come From? • Te c h n o l o g y ( e . growth and use of new knowledge will be the key factors in deciding the prosperity of this Knowledge Society. Interface • Globalization (e. Specialization. Diversity Economics (e. Database. education.g. Web. Core Competence For Knowledge Society A knowledge society is one of the basic foundations for the development of any nation. & Duguid.2010 Brown J. to industrial society where the management of technology.g. Knowledge economy Customer relations (e. I n f r a s t r u c t u r e .). • • • Culture –The biggest enabler of successful knowledge-driven organizations is the establishment of a knowledge-focused culture Structure –The business processes and organizational structures that facilitate knowledge sharing • 4. creating and sharing knowledge and the cultural and technical foundations that support them. There is no limit on the number of processes Technology –It needs to be chosen only after all the requirements of a knowledge management initiative have been established. develop knowledge workers and enhance their productivity through creation. World wide markets.g. Ability to create and maintain the knowledge infrastructure.135 SRM Management Digest . • • • • North American integration Demographics (e. (1991).

Initiating the implementation of the recommendations under the aegis of the PMO. The essence of managing knowledge is concerned with deciding with whom to share. considered the knowledge most is increasingly asset of • Identification of key focus areas and Identification of diverse stakeholders and understanding major issues in the area. Consistent value occurs when there is an atmosphere of trust and motivation for people to share and use knowledge. since the most developed and mature knowledge management projects we studied were unfinished works in progress” (Davenport and Prusak. when there are systematic processes to find and create knowledge. there is technology to store and make knowledge relatively simple to find and share. manage and share information throughout important organizations [Carneiro. This does not apply only to specific parts like programming code but also means that any knowledge can be reused by others. sometimes saving or earning them literally billions” [O’Dell and Grayson 1998]. managing. when needed. Managing knowledge produces value when shared knowledge is used and reused. And finalizing the recommendations based on stakeholder feedback and coordinating/ following up the implementations of proposals. The focus is on: their organizations. (CIO Council. In tandem with this there is a thrusting . how it is to be shared. The letter will be supported by the relevant explanatory documents and widespread dissemination of NKC recommendations to state governments. NKC. The Planning Commission is the nodal agency for the NKC for planning and budgeting purposes as well as for handling Parliament related responses.SRM Management Digest .2010 136 National Knowledge Commission (NKC) consists of six Members.(Source: National Knowledge Commission {NKC}) 7. what is to be shared. But “Knowledge management is an evolving practice. A new emphasis is on an economy based on services. 1998). and. and ultimately sharing and using it. organization of workshops. This Knowledge Management solution provider enables workers to capture. and transferring knowledge and best practices has worked for some companies. extensive formal and informal consultations with concerned entities and stakeholders • Consultation with administrative Ministries and the Planning Commission and Discussion in NKC to finalize recommendations in the form of letter to the PM from the Chairman. ideas and intangibles rather than physical product and process is emerging. Constitution of Working Groups of experts and specialists. 2000] and it is assumed that every experience is reusable [Basili and Rombach. Managing Organizational Knowledge The idea of KM arises from McElroy’s (1999) analysis of two fundamental types of KM concerns. civil society and other stakeholders. “Identifying. Today. 2001). 1991].…ensuring that the right information is available in an easily digestible format to employees across the organization at the point of need so they can leverage experiences and make more effective business decisions. also using the NKC website.

collect. Build positive organisation culture and improve communication and cooperation 3. Turn implicit into explicit knowledge and improve education.2010 imperative to manage organisational knowledge. Figure No: 3 Knowledge management process and the Key Drivers The factors influencing the selection of a KM Strategy are with the appropriate examples in the organisational context illustrated in the Table No. The objectives of knowledge management in an organisation should be as follows: 1.137 SRM Management Digest . 1 below . 1983). To bring about transparency of knowledge and improve documentation of knowledge 2. disseminate. Improve sharing of knowledge and improve management of innovations The Knowledge management process in an organisation is to create. Intelligence and Leadership. The Key KM drivers are Technology. that is now prone to radical reform (Deighton. Improve access to existing knowledge and improve acquisition of external knowledge 6. For fifty years there has been a settled business equilibrium. managers can no longer afford to be complacent about knowledge (Nonaka & Takeuchi. Competition. Culture. training & team work among employees 4. Promote individual development and improve retention of knowledge 5. Karl Wiig (1997) and the American Productivity and Quality Center identified six emerging KM strategies in a study of organizations considered to be leading the way in this area. 1997). In a world of dynamic change. dominated by established firms. 1995). organize. More organizations fall prey to their own inertia than those which learn to change and adapt (Starbuck. refine. maintain.

Aims to understand customers and their needs and so provide them with exactly what they want. Globalization. Manasco. etc. Innovative. Product Leadership or Customer Intimacy Organisational Structure Hierarchical Organisational Culture Nature of Knowledge Team spirit. Attributes of an Effective KM Program • Improve customer service by streamlining response time and Boost revenues by getting products and services to market faster and enhance employee retention rates by recognizing the value of employees’ knowledge and rewarding them for it Streamline operations and reduce costs by 6.Encourage and support individual employees to develop their skills and knowledge as well as to share their knowledge with each other.SRM Management Digest . Personal Knowledge Asset Responsibility Strategy. Adopted by market leaders who shape the future direction of their sector. 2. Learning Explicit. Risk factors. Implicit or Tacit. Knowledge Management analytic/synthetic approach Strategy Business Sector Characteristics Strengths. through R&D. Changing regulations. 5. enterprise-wide approach to KM. Competitive ness. 4. Symbolic/Numeric/Geometric/Perceptual The strategies states below reflect the different natures and strengths of the organisations involved (Wiig. 1997.A comprehensive. Knowledge Transfer Strategy. Knowledge Creation Strategy-Emphasises the innovation and creation of new knowledge • 8. where frequently knowledge is seen as the product. Individualistic. Sharing. Highly regulated. .2010 138 Table No: 1 Factors influencing the selection of a KM Strategy Factor Current/Planned Examples Goals. Opportunities and Threats (SWOT) Value Focus Operational Excellence. Task Type. Leading product. 1996): 1. etc. Weaknesses. Reputation. Knowledge Strategy as a Business Strategy. desired applications. Customer-Focused Knowledge Strategy. Acquisitions and Mergers. 3. Globalization.Transfer of knowledge and best practices in order to improve operational quality and efficiency. technology capabilities. Intellectual Asset Management StrategyFocuses on assets already within the company that can be exploited more fully or enhanced.

KM is systematic leveraging of information and expertise to improve organizational innovation. Peter Senge . and to continuously create new opportunities for employees to upgrade their capabilities and channelize their potential for growth leading to ‘TOTAL KNOWLEDGE WORKERS’.Cost Reduction. and use knowledge intensity to achieve sustainable growth.” improve productivity. Product Branding and Energy Conservation. productivity and competence. Maximize utilization of Men and Machines 1960’s. diffusing and developing knowledge by individuals and groups in pursuit of organizational goals. combining. Market Planning.” In summary. KM “embodies organizational processes that seek synergistic combination of data and informationprocessing capacity of information technologies. Tracing The History of KM in the Organisational Context 1950’s. retrieving. It is better to recall the words of Peter Drucker. “A knowledge society requires literacy -because of the vastly expanding corpus of knowledge we will also be required to learn how to learn. 10. Knowledge Management Vision Create a strategy and managing process for accelerating knowledge management that will introduce a culture change as well as effective tools and processes to further enable employees as “knowledge workers. 1992.139 SRM Management Digest . Maximize utilization of Materials 1970’s. creating. Quality Circles. storing.2010 eliminating redundant or unnecessary processes • Foster innovation by encouraging the free flow of ideas and Improve decision making 9. KM strategy and architecture must synchronize with organization’s mission and strategy. It involves coordination of organization– wide activities of acquiring. responsiveness. and the creative and innovative capacity of human beings. sharing.” Yogesh Malhotra (1998). Managing for the Future.Working Hard. Statistical Quality Control.Strategic Management. Figure No: 3 Knowledge Management Vision To acquire and maintain highly talented and motivated reservoir of multi-disciplinary human resources to meet the needs of the organisation. Shop-floor management. Peter Drucker contributed his thought that Information and knowledge are organizational resources.

Computerization of data. and by division 3. The International Knowledge Management Network (IKMN) went online in 1994. A number of management consulting firms had begun in-house knowledge management programs and Knowledge management was introduced in the popular press. by employee. customers. Organizations are realizing that intellectual capital or corporate knowledge is a valuable asset that can be managed as effectively as physical assets in order to improve performance. Information systems will evolve into artificial intelligence systems that use intelligent agents to customize and filter relevant information. a company having KM strategy 1980’s -Total Quality Management. and other constituents and shortens the learning curve. Arthur Andersen. and acted on 4. New methods and tools will be developed for KM driven E-intelligence and innovation. information. The corporate sector faces great challenge as how to attract. develop and retain talent and as to how to improve productivity of knowledge workers to achieve organizational goals and as to how to utilize their potential measures of performance and also to reward individual and team performance. and they will play an integral role in making these connections possible. 11. KM becomes big business for such major international consulting firms as Ernst & Young. processes and technology for the purpose of leveraging corporate knowledge. by department. KM and E-learning will converge into knowledge collaboration portals that will efficiently transfer knowledge in an interdisciplinary and cross functional environment. and BoozAllen & Hamilton The Future: In the next several years ad-hoc software will develop into comprehensive. Explaining what KM is and how it can benefit a corporate environment 2. KM related articles began appearing in journals and books 90’s until now: Information Technology. The focus of knowledge management is connecting people. The real success of KM lies on understanding the following aspects: 1. Evaluating the firm’s core knowledge. Quality Circles Movement and focus on human element in quality management and International quality system standard.SRM Management Digest . 12. Dealing with tacit knowledge A knowledge sharing culture is an environment . processed. systems & procedures and International standards on quality and environment systems. Continue researching KM to improve and expand its current capabilities 6. Key Challenges of KM For Indian Corporate Sector The Key challenge in the corporate environment is to manage wild birds in captivity without clipping their wings. the most widely read work to date is Ikujiro Nonaka’s and Hirotaka Takeuchi’s The Knowledge-Creating Company: How Japanese Companies Create the Dynamics of Innovation (1995). Knowledge (and its expression in professional competence) as a competitive asset was apparent and Managing knowledge that relied on works done in artificial intelligence and expert systems.2010 140 introduced the concept of “learning organization” and Leonard-Barton came up with the well-known case study of “Chaparral Steel “. The database professionals of today are the Knowledge Managers of the future. vendors. Addressing the still neglected area of collaboration 5. Reacting instantly to new business opportunities and ensuring successful partnering and core competencies with suppliers. Learning how knowledge can be captured. knowledge aware enterprise management systems.

real time access to knowledge. For governments. KM is a multi-disciplinary and cross-functional approach which aims to facilitate organizations in maximizing their corporate intellectual assets for business excellence. Anywhere and Anything for organizational performance. Furthermore. The implementation and practice of KM are often faced with many difficulties and challenges. what elements do KM practices comprise and entail exactly how KM can contribute to business growth and developments.141 SRM Management Digest . The current lack of a deeper empirical insight of the subject and industrial perceptions have motivated this study of KM-related issues. total quality management (TQM). To this end. individuals must adhere to the norms. organizational learning (OL) and knowledge management (KM). putting in place the appropriate networks (human and technical) and above all recognizing that they must “compete” with private sector organizations in the quality of services rendered to customers/ citizens. organizational learning and management. several management philosophies have emerged. governments must understand that the stakeholders in any KM initiative include: management. the increasing importance of the concepts and practices from the emerging field of KM is evident. artificial intelligence and computer science. among researchers and practitioners. Global Most Admired Knowledge Enterprises (MAKE) studies have been announced by Telco and TATA Group (primarily due to Tata Steel & TCS) . and their roles are to participate. KM initiatives would be beneficial for many. It is still generally unclear. values. and the organisational hurdles related to the adoption of KM. As India moves rapidly into a knowledgebased economy. employees. Despite the increasing KM awareness and interest among organizations. efficiency and competitive advantage. Many KM issues and challenges have surfaced which impede KM adoption but have yet to be adequately addressed. In order to improve a knowledge-sharing culture. customers and even other governments. partners. These include the definition and conceptualization of what knowledge really is in their respective work contexts. KM draws on principles. The organization’s slogan in KM should be: Anyone. The business needs are to reduce support and training costs. manage. These are the components of an effective knowledge management system. The purpose of KM. practices and technologies from a wide spectrum of disciplines including information systems management. In order to do so. with the looming retirement of a large number of civil servants. and maintain valuable knowledge across the organization. attitudes and beliefs established by the organization. how an organization initiates and implements KM projects. information will not reach the intended audience and will thus cause a knowledge-transfer bottleneck. and domain background and knowledge in different application contexts and settings. Anytime. a structured plan should be followed. research and training. to empower end users with tools that help them solve common and repetitive issues and to provide consistent and repeatable knowledge transfer within your organization. Among these include business process reengineering (BPR). Over the past decade. there exists a wide range of views and perceptions on KM. General KM approaches prescribed in the literature or recommended by consulting companies may not necessarily be successful in various organizations due to different business and cultural contexts as well as the presence of other organizational barriers. this requires a radical change in mindset – stripping away unnecessary bureaucratic procedures that cause delays and hamper information and knowledge flow. to capture. in the “new economy” is to provide on line. collaborate and learn in all stages of KM. information and data throughout the organization and to its customers in that order. When these aspects of the knowledge sharing are breached.2010 where individuals are willing to disseminate information regardless of the size of the organization or company.

2. Boston. information technology infrastructure and underlying principles of entrepreneurial success tells about the following KM lines.” 15. Drucker. P. developing knowledge workers through senior management leadership (8th place) and creating an environment for collaborative knowledge sharing (13th place). Davenport. Harvard Business School Press.H. Don’t be afraid of failure or mistakes. but keep a balance. Weinheim 6. 8. Working Knowledge: How Organizations Manage What They Know.brint. and the need for a generic KM framework to be developed must be taken into account. Harvard Business School Press.. and Prusak. C. Massachusetts. Davenport. As per the summary report available Tata Group was rated high in two of the following knowledge dimensions. Knowledge Management Case Book. and Völpel. Vol. Probst. Yogesh Malhotra. .htm. Thomas H. (1998).. Sven C. (2002) The Wealth of Knowledge. Creating a learning organization 7. Work your butt off. Stewart.J. . Issue 3. Prusak. Deciphering the Knowledge Management Hype”. Toyota is the overall Global MAKE Winner”. Harvard Business School Press. T. 2001. Boston..: The rise of knowledge towards attention management. (1998) If only we knew what we know. 5. and Prusak. 4. Laurence: Working Knowledge – How Organizations Manage What They Know. www. pp. Brown J. Thomas H. evidenced by little discussion in the current literature. G. To succeed in the attempt. “A KM strategy that furthers organizational dialogue is more relevant today.2010 142 has been named as one of the winners of this coveted award. and responsibilities. P. H. 1998. Vol.. 3. 4. 5. 2000. Public sectors have to face these by taking a proactive attitude and make it happen in order to reap the benefits.S. The 2006 Global MAKE Winners have been recognized as leaders in: 1. Transforming enterprise knowledge into shareholder value 14.B. roles. T. Governments are realizing its importance for running the public sector and starting to practice it. O’Dell.. References 1. public and private sector difference. especially in the public sector.J. Creating an environment for collaborative knowledge sharing 6. Carneiro. T. (2002). (1991) Organisational learning and communitiesof-practice. & Grayson Jr. L. 1998.SRM Management Digest . Working Knowl-edge. Write goals down & follow up monthly. Journal of Knowledge Management. 212–221. Maximizing enterprise intellectual capital 5. Critical success factors can be categorized into primary categories such as leadership. Davenport. culture. Delivering knowledge-based products/ solutions 4. C. And know why you’re doing it. 7. com/km/whatis. Alberto: How does knowledge management influence innovation and competitiveness? Journal of Knowledge Management. Davenport. Developing knowledge workers through senior management leadership 3. Creating a corporate knowledge-driven culture 2. structure. John Wiley & Sons.1998. Delivering value based on customer knowledge 8. & Duguid. special considerations to lack of awareness. 87– 98. 9. Closing Thought KM as a discipline is still in its infancy. Organisational Science. pp. Issue 2. 13. Cambridge. Dr. L. Davenport.The Post-Capitalist Executive. T.

D.3. The Learning organization Vol. pp. Organization Science. 16. 6 No. Y. Nonaka. (1994). 19.” Knowledge Management October 1999 pp. I. Strategic Management Journal (21). Mc creedy. Vol. New York. Issue 11. 14. . Kevin: Rapid Emerging Knowledge Deployment. Vol.3 pp 91-100.Hi-Tech Hidebound. National Knowledge Commission{NKC 17. pp. (1998). 15. 1995. BRINT Research Institute. 11. Marler.143 SRM Management Digest . “The knowledge-creating company”. . “A critical review of KM models”. Vol. Nonaka. 12. and Govindarajan. California Management Review.Working Paper. London. . I.2010 10. 40 No. pp. McElroy.W. 13. “The concept of building a foundation for knowledge creation”. pp. 2000. “The Second Generation of KM. Penguin. 5 No. November-December. Mc Adam. Gupta. Qualitative Researching. 473-496. (1999). 86–88. 18. J. “A dynamic theory of organizational knowledge creation”. Sage Publications. (1997).96-104.Knowledge Flows within Multinational Corporations. 1999. V. Malhotra. N. R. A. No.14-37. pp. I Konno. 1999. 12..Beyond . M.1. 14–16. (1991).100 Mason. Harvard Business Review.41-53. (1999). Crosstalk: The Journal of Defense Software Engineering. Knowledge Management: Strategic Information Systems for the New World of Business. Nonaka. Managing in a Time of Great Change.

reduce the attrition rate in the corporate sector. 2. but the question is that. They are given adequate time and space to spend quality time and effort towards fulfilling both work and personal objectives. 1 Factors affecting Employees Work Life Communication channels. but in general it refers to a conducive environment.. S. Policies and Procedures. Job Security 8. Policies and Procedures. Compensation & Benefits 5. Career growth. Training & Development. 1. Job Security. The term ‘Quality of work life’ is perceived in different ways as per their convenience. Career Growth PERCENTAGE 12% 11% 15% 15% 8% 10% 14% 15% Cultural discrepancies. Career growth. where in the employees feel a home away from home. whether is it the myth or reality? The concept of multitasking is a widespread factor and the employees are getting sandwiched between the two great tasks. Lecturer – Dept.K. P. Training & Development 6. and if managed effectively. Table 1 Factors affecting Employees Work Life: FACTORS 1.2010 144 QUALITY OF WORK LIFE (QWL) IN IT SECTOR – INDIAN SCENARIO V. College. Cultural discrepancies 2.e.” Indian IT firms are in an increasingly competitive environment with aspirations for greater heights. etc. Fig. Inst. the structure and process of the organization and the socio-culture milieu. and as the result the quality of work is also affected directly or indirectly. Studies. Communication channels 3.K. Health related issues because of stress / burnout. A. but also the development of the company as a whole. Work life in Indian IT companies The IT industry has just started to take a few concrete steps in this direction. Bangalore & Kerala) from different concerns are like Cultural discrepancies. i.SRM Management Digest . Communication channels. Training & Development. Health related issues because of stress / burnout. Premchand Babu Professor – S. Anantapur. Health related issues because of stress/ burnout 4. It seeks to create a culture of work commitment in organization . “Organisations in this sector are aiming at driving a culture whereby an employee is not looked down upon or ridiculed when he/she has a personal commitment to fulfill. Job Security. work life and personal life. The instances encountered during the survey conducted among the 280 IT professionals in South India (Chennai. Dr. Employees find it difficult to maintain a balance between work and life. The remedial measures are possible through the conduction of effective and customized Quality of Work-Life programs according to their organizations.Sri Sairam Engg. University. of Mgmt. TN. The common challenges in the corporate world are about Talent Management. Policies and Procedures 7. Chennai. of Management. The necessity of maintaining a good QWL and its benefits are discussed ahead. these factors affect not only the employee’s work life and personal life. Hemanth kumar Sr.. Need for QWL The Quality of Work Life programs aims at integrating the socio-psychological needs of employees the unique requirements of a particular technology. Compensation & Benefits.P. Compensation & Benefits.

in the long run it’s not the question of spending time at work or at home. “Supporting the employees as they balance home and work responsibilities leads to a highly engaged workforce thereby becoming a large contributor to employee loyalty. Robert Owen. Quality of Work-life programs are essential if an organisation wants to be known as an ‘employer of choice’. A supportive and fun environment is must for any organisation to maintain the work-life balance in the lives of its employees. so infrastructure management software and services are evolving to meet these needs. it becomes even more important for organisations to seek out constructive ways to help its employees understand and identify the need for having an improved quality of work life which shall be achieved by maintaining a balance in their personal as well as professional life. “Without a good Quality of work-life. The reason is obvious. we may leave our energy and resources and lose focus on the objective. “Though people who have been successful in the longer term have used the strategy of spending more time at the workplace.” 3. Benefits: Improved productivity Improved quality of production Offering better customer service Highly engaged workforce Reduced absenteeism Improved employee morale and commitment Reduced attrition rates Attraction of best talent Greater flexibility in staff attitudes and ability to deal with changes HR departments of organisations play an important role in designing the QWL. IT services companies are insisting on a higher performance from their staff. So. Factors affecting the QWL The IT companies and their employees operate in an environment that has seen many changes in recent years. The focus is on the problem of creating a human work environment where employees work co-operatively and contribute to organisation’s objectives. pioneered ideas about better treatment of workers. In such a situation. High Package – Higher the expectation Even as staff salaries are increasing in India. Matrix . they have been able to balance this with adequate time with their families. Tall. Organizational Structure: Organisations are increasingly dependent upon their IT infrastructure to deliver 24/7 availability. The different type of organizational structure are like Flat. British entrepreneur. Quality of working life is the degree to which members of the organization are able to satisfy their personal needs through their experience in the organization.2010 and society at large so as to ensure higher productivity and greater job satisfaction of the employees. a cotton mill owner in Scotland in the early 19th century. but spending quality time at both places matters a lot”. energy of employees is lost to unimportant activities or unconscious commitments. As the both are interdependent aspects. 4. Spending quality time is always more important than just spending time. Owen argued that improving working conditions would not only improve worker’s quality of work life but lead to a 50 to 100 percent increase in productivity. The appreciation of the India rupee against the US dollar has also meant that staff salaries in India have got more expensive. As a result of not having focused intentions and considered choices.145 SRM Management Digest . The planned and effective QWL programs shall fetch the organization with the following.

salary calculators. which is one of the frequent reasons for quitting. salary comparisons. Culture and climate The development of your organization and. they leave their bosses.SRM Management Digest . Suitability of Working hours The working hours in the organization are normally eight to twelve hours in the corporate scenario. work culture and climate. An inefficient boss creates poor work culture. could achieve a lot in their mutually beneficial dialogue. Given the shifts occurring in attitudes and practices about salary and compensation. According to a popular saying—employees never leave the company. They left organizations with too small of a budget to adequately reward their top performers. 8. and maintain an excited. The employer and employee. Communication Face-to-face or person-to-person interpersonal communication is the most frequent . salary surveys. Compensation & Benefits The research salary. and organization design to increase their effectiveness using a variety of applied behavioral sciences. forward thinking organizations are thinking about salary and compensation in a very different way. 10. how you manage change impacts the success of your business. Work represents such a role in life which has been designated to it by the person himself. retain key employees. These salary increases. There were days long back. all things salary. Experts also believe that organisational culture has a great impact on who stays and who goes. This makes sense when you consider the importance of salary to attract talented people. online. This has a got a vital impact in the determining the working environment. but if considered shall contribute to a good working environment. the structure also includes the hierarchy and the channels involved in the relating the crew and taking decisions and passing on the bottom of the pyramid. basically. employees take that as a strong reason to stay on. If a company respects them and their skills. Policies and Procedures An organisation is viewed as a place where employees meet their aspirations of growth and development. Many feel convenient with the minimal levels of managerial hierarchy to gather or pass the information. Organizations are struggling to keep up with changes in salary and compensation thinking. this is not surprising. On the one hand work is an earning of one’s living for the family. values of trust. 9. particularly.2010 146 and the like. While many companies still use this as their salary criteria. aware of their risks and rights. realize their potential and provide them with a healthy environment to learn and grow with flexible compensation. in the one percent to five percent range. The flexi time is prevailing in the Indian software concerns but even then its not followed to the fullest as per the views given by the employees. and that concept of flexi-time if adopted shall be much ease for the employees in the software development activities. And the culture of an organisation is determined by the quality of the relationship between bosses and their subordinates. sent the wrong message to under performers. The work should not pose a health hazard for the person. Occupational Health care The safe work environment provides the basis for the person to enjoy working. when organizations gave equivalent increases to all organization members. motivated workforce. 6. on the other hand it could be a selfrealisation providing enjoyment and satisfaction 7. Organization development activities intervene in the interactions of your people systems such as formal and informal groups. teamwork and transparency. 5. is one of the most frequent requests for information received by the Society for Human Resource Management (SHRM).

rewards and recognition are explored in these resources. Study assistance . is not the only one which makes employees quit. “It is important to keep an eye on fast track people who are intelligent and excellent performers. Performance is a primary requirement. hence the study assistance to be provided in monetary . “Attrition also happens when people hate their working conditions. though a key factor. To train employees in new skills. and new ways of performing work? These tips and tools about training design for employees will help you design training to facilitate employee’s interest in the training. Also they are expected to form the club-membership and a get together among the employees and their family members for a movie or for an outing. Training and development The relevant training and development is very essential for the young professionals. Motivational Techniques Employee motivation. The organisation’s reward strategy reflects its power to drive quality employees. Maintaining transparency in communication and following the channels accordingly shall create a good and effective communication system in the organization. hence it is quite obvious that it lacks security and becomes the major factor that affects the employee’s attitude and in turn reflects the performance in a negative manner. There are also cases when people leave their job for family reasons or when they wish to migrate. Poetry. attracting and retaining employees will become a challenge. Apart from salary. and creates an effective work force in the organizational setup. 15. Job security The IT jobs are highly paid profession and the stability is not sure in this sector.147 SRM Management Digest . recognizes and appreciates their skills and work.2010 communication method most people use at work. The right training design will ensure your ability to help learners adopt the new ideas received in the training. recognition of work is a healthy retention strategy. phone messages. nurtured and provided growth opportunity. Retaining strategies As competition for employees increases. contributing people? It is the reward and recognition system contribute to or deflate employee motivation. which will directly reflect in their performance in a notable way. which reflects in poor quality output in their results. 12. To ensure that your organization remains a desirable place to work by providing opportunities for learning. people communicate via email.time off for study Employees and the organisation are very keen in talent acquisition and talent retention. They should be identified. 14.” HR experts believe that money. new ideas. excellent performers should be valued. In-order to cope up with this situation. for whichthe employees are asked to update their knowledge base through training and upgrade their qualification so as to suit the client requirements to serve them better. competitions among the workers during leisure and boost them up. Art etc. Celebrations at Work The corporate life style is very tedious and materialistic now-a-days. presentations and meetings. Additionally.. 13. therefore. the HR should introduce some new activities Music. positive employee morale. as the type of work is monotonous and the employees get bored and stressed often. 11. 16. Poor communication is the most frequently cited problem in organizations. The employees gain confidence and feel comfortable in the work lace only if they are given some sort of assurance for their job. it pays. etc. positive morale and retention is possible through enhanced quality of work life. do not like their team-mates or perhaps do not like what they are doing. What creates motivated. newsletters. If the organisation values its employees.

18. and perform an effective Internal Marketing strategy through enhancing the Quality of Work life. It is believed that satisfied employees contribute to greater business benefits for the employer. Recognizing the contribution of outstanding achievers also inspires others to try hard and put in their best. .2010 148 and non-monetary aspects. Like the managers are sposored for their executive programms at leading institutes to enhance their potentials. improved retention and better customer service. Flexible working hours for employees is a widely used strategy. career development and believe in equipping workforce better on the professional aspect. they in turn respect the time they spend at the workplace. reduced absenteeism. According to experts. good culture. Quality of worklife programs also brings in a remarkable difference in improved quality. as it is a health related aspect. “In a culture where an organisation understands the personal needs of the employee. training and career growth with adequate salary are some provisions that contributes for a good QWL. The strategies that forms part in improving the quality of work life are like. Opportunities for advancement / Career Growth Employers often fail to understand the importance of providing opportunities for development of their employees or their career growth. Results Discussion and Strategies The research reveals that the major requirements that are expected form the employees end from their management and work place is good Compensation & Benefits. and the like… These requirements are to considered with utmost care by the employers. HR managers must use the combination of growth. resulting in Quality outputs. transparency and a clear mission and vision for employees to achieve their tasks in a smarter way than before. IT sector can strengthen their employee commitment and loyalty. a working environment that does not harm their health. By implementing proactive programmes and initiatives that support employees. Individual development plans for employees by employers or mentoring by colleagues in order to monitor progress and satisfaction in the workforce are ways to improve the quality of work-life. It is also suggested that employees should be given a flexible window time period during which they can report to office. it might slowly affect the business and may incur a heavy loss in manpower resources and also in their financial turnover & profit. Quality of Work-life program is about creating a conducive and healthy work environment for employees who are striving to better integrate their work and personal responsibilities. Organisations should keep reviewing their QWL strategy. A conducive working atmosphere. HR’s role An efficient HR focuses on creating a good work culture and work out different strategies in line with organisational philosophy. keeping in mind the requirements and expectations form the employees. security for their job. This in turn leads to productive employees which ultimately reflects in the profit of the organisation. Adequate leave options provided to the employees is also viewed as a healthy HR practice to help them spend adequate time with their families. The needs of the employees should be regularly gauged through open communication. 17. improved customer satisfaction and healthier bottom lines. learning opportunity and pay attention to employees’ personal needs and active participation in both work life and personal life.”.SRM Management Digest . Apart from increase in productivity. 19. A good organisational behaviour also focuses on areas like training. polls and feedback mechanisms to maintain consistency in performance and high motivation levels. good prospects for career growth. If failed to give immediate attention to these facts. Happy employees perform better than disgruntled and stressed ones because enhancements in the Quality of work-life brings about clarity.

.: American Psychological Association Frank Torney. 21.). Dhanpatrai & Sons.. R. worship their workplace. 2004. ICFAI university press. “Global competency”. & Krone. 2001 Raju PVL. (2002) “The policy exists but you can’t really use it”: Communication and the structuration of work-family policies. L. References Chabbra T. “Human Resource Management”. and the management should fasten the implementation process which shall contribute to success of the individual and the organization as a whole. D. Tata McGrahill Publications. . B. E. & DeMarr.. R. A. (2003) Work-family balance. J. Tetrick (Eds. In an ideal organization where there is a good QWL. In J. 143-162) Washington. “Organisation Theory and Behaviour”. The factors discussed above are not in practice to the fullest. feel like a family and would never leave.. J.N. Frone. Prasad L. “Performance Management”.2010 20. “Trainers way of C Edition 3rd Gupta C. K. E. Noe. (1999) Work-family role synthesis: Individual and organizational determinants. Conclusion The absolute fact that prevails in the corporate life is prolonging the implementation of plans. “Human resource Management”. J.. C. 3rd Edition. E. Haar.B. E. related to enhancing the Quality of Work Life. M. “Competency Based HRM”. International Journal of Conflict Management.M. the employees work hard. Atlantic publications. 2nd Edition Ganesh Sheroms.149 SRM Management Digest . Handbook of Occupational Health Psychology (pp.C.. 2005 Gerald Devon’s. Quick & L. New Zealand Journal of Psychology Kirby. 2001. 2003. Sultanchand &Sons. (2004) Work-Family Conflict and Turnover Intention: Exploring the Moderation Effects of Perceived WorkFamily Support. Journal of Applied Communication Research. love their job. M. 6th Edition. Kossek..

Human Resource Accounting for Human Resource Management HRA system consists of two aspects namely. P.. In the management terminology this is called Human Resource Accounting. Madana Mohan. Professor. In India. or which potentially can be applied to the production of goods or rendering useful services. Associate Professor.K. are some of the organizations which have started disclosing some valuable information regarding human resources in their financial statements. Of these. The Indian Companies Act does not provide any scope for furnishing any significant information about human resources in financial statements. 2. of Management Studies. the future earnings of the human resources of the organization until their retirement is aggregated and discounted at the cost of capital to arrive at the present value. Lev and Schwartz present value of future earnings Model Flameout’s stochastic rewards valuation Model etc. Such investment in human resources refers to all forms of investments directed to raise knowledge. Measurement of the investments in human resources will help to evaluate the charges in human resource investment over a period of time. (b) The value human resource... Ananthapur. University. Engineers India Ltd. Basically it is an information system that tells the management what changes over time are occurring to the human resources of the organization. Human Resources Accounting (HRA) is the process of identifying and measuring data about human resources and communicating this information to interested parties. different models have been developed. particularly in the public sector is noticeable during the past few years. Premchand Babu. Cochin Refineries Ltd. Standard cost Approach current purchasing power Approach. Oil India Ltd.SRM Management Digest . In this changing perspective the accountants were also called upon to play there role by assigning monetary value to the human resources deployed in the organization. S. SPIC. The importance of human resources in business organization as productive resources was by and large ignored by the accountants until two decades ago. Human Resources are the energies skills talents and knowledge of people which are. Basically it is an information system that tells the management what charges overtime are occurring to the human resources of the organization.P. Hyderabad 1. Some of them are opportunity cost Approach. etc. A. Introduction Human Resources Accounting (HRA) is the process of identifying and measuring data about human resources and communicating this information to interested parties. National Thermal Power Corporation. Minerals and Metals Trading Corporation. Cement Corporation of India. But a growing trend towards the measurement and reporting of human resources. Vishwa Vishwani Institute of Systems and Management. skills and aptitudes of the organizations workforce. HRA has not been introduced so far as a system.2010 150 THE ROLE OF HUMAN RESOURCE ACCOUNTING IN HUMAN RESOURCE MANAGEMENT Dr. Associated Cement Companies. Madras Refineries. Professor M. 3. ONGC. Metallurgical and Engineering Consultants India Ltd. the model suggested by Lev and Schwartz have become popular. Mir Irfan Ul Haq. The information generated . BHEL. During the early and mid 1960’s Behavioral scientists attacked the conventional accounting system for its failure to value the human resources of the organization along with its other material resources. 4. Human Resource valuation Models: For valuing human resources. (a) The investment made in human resources. Dept. Under this method. Human Resources Accounting in India: The concept of HRA in India is of recent origin and is struggling for acceptance.

special pay and personal pay. Year THRC 2003-04 2004-05 2005-06 2006-07 2007-08 175. The same relationship is also applicable to the areas of managerial applications in relation to the human resource planning and control.82 315.0920 0.28 353. Investment pattern in human resources: The human resource investment usually consists of the following items:(1) Expenditure on advertisement for recruitment.0898 0. Dearness allowance. bonus. the productivity of the 7.8116 0. Investment in human resources can be studied under two heads.1117 THRC Staff Labour THRC CoCoefficient efficient 0.0995 0. First of all Total Human Resource cost (THRC) can be ascertained. For this purpose. It also helps in guiding the management to frame policies for human resource management.72 0.8038 220.151 SRM Management Digest .99 2167. 5. The following Table shows the Total cost and cost coefficient of Chennai Port Trust for 5 years ending on 31. All these items influence directly or indirectly the human resources and organization.8020 0.1060 0.0889 0. 8. Human Resource cost coefficient is computed by taking the share of each class of human resources in the total human resource cost.1017 0.8175 0. (2) Cost of selection (3) Training cost (4) On the job training cost (5) Subsistence allowance (6) Contribution to provident Fund (7) Educational tour expenses (8) Medical expenses (9) Ex-gratia payments (10) Employee’s Welfare Fund.1140 0.82 2765.3. house rent allowance. The organizational and human performance can be evaluated with the help of such an analysis. THRC = Human Resource Investment plus human resource current costs. overtime wages. Investment in current costs: After analyzing the investment pattern in the human resources of an organization the current cost of human resources can be ascertained. (See Table) The co-efficient will give idea to the management regarding how the investment in human resources is spread among various classes of human resources.45 240. These are the costs which have little bearing on future costs. For this purpose.0808 0.0845 Total 1772.66 2544.04 1964. (1) Investment pattern (2) Investment in current costs.2010 by the analysis of investment in human resources has many applications for managerial purposes.31 267.34 289. The present performance results will act as input for future planning and the present planning will have its impact on future results.56 2201.2008.51 Officers Coefficient 0.44 248.5 2420.08 215.75 251.64 2192.15 3166.73 2733.22 . Thus the expenses incurred for the maintenance of human resources are termed as current costs. current cost is defined as the cost incurred with which the organization derives benefit of current nature. Human Resource cost coefficient After ascertaining the human resource investment and the current costs on human resources for a few years the human resource cost coefficient can be estimated.7962 0. 6. Current costs consist of salary and wages.

778 2.81. the model suggested by Lev and Schwartz with slight modifications is widely used by organizations for valuation of their human resources. The value of human resources using productivity Linked Human Resource valuation Model of Chennai Port Trust as on 31. Table showing human resource value Category Class I.2010 152 9. This operating income is apportioned among different classes of human resources in the ratio of human resource cost co-efficient.98.SRM Management Digest . the number of human resource in different categories is compared with the investment made in human resources and operating income. For this purpose.520 1.Officers Class I. The Times Rate of Return is computed by dividing the net operating income by the net investment in human resources.700 3.Officers Class I. For this purpose the total operating income of the organization is taken as the contribution made by human resources. A high Times Rate of Return is an indicator of high efficiency of the human resources. The share of operating income is reduced by current costs on human resources and the resultant is the value of output that can be attributed to the investment made in human resources. The ratios are:(1) Human Resources to Total Resources (2) Human Resources to Capital Assets (3) Human Resources to Salaries & Allowances (4) Human Resources to Operating Income . While a higher percapita investment shows the concern of the management for the human resources a higher percapita operating income shows the efficiency of the human resources in contributing towards the income of the organization. Times Rate or Return Another technique that can be employed for measuring the efficiency of human resource of organization is Times Rate of Returns. 2008 is given below.13. Percapita Investment and percapita operating Income The efficiency of human resources can also be studied by making an analysis of the percapita investment and percapita operating income. 11. Times Rate of Return is a direct indicator of the production performance of the human resource.Officers Shore Labourers Total Amount(in lakhs) 852 291 8320 3472 465 13400 Average 6.823 HRA Ratios : -To analyze HRA information and to relate to other variables ratio analysis can be used.50. All the commonly suggested valuation models are not free from limitations.042 1. However.24. 10.730 2.Officers Class I. Value of Human Resources The value of human resources of an organization is useful information to the top level management for its planning and control purposes.20.3.

Port dues and income from pollution control unit. In this approach. An analysis of the two major heads of operating income viz.The above approach has a major limitation that it divides the total operating income in the ratio of human asset and capital asset on the assumption that the contribution of both these factors towards the operating income of the Port Trust is on the basis of their value. the human contribution is compared with value of Human Resources. The total of such income during the year 2007-08 amounted to Rs. hire on equipment for container handling. The total operating income of the Trust was 6194 lakhs during 2007-08. it is tried to ascertain the operating income contributed by Human Resources by analyzing each income of the Port Trust. Such items are Demurrage on general Cargo. This income is earned by Human Resources. estate rentals are non . If the rate of return is less than the cost of capital of the organization. The value of Human Resources and capital assets are 13400 1akhs and 24. the Human Resources contribution can be arrived at which amounts to Rs. The remaining income is Rs. These are (i) Cargo handling and storage charges (ii) Port and Dock charges (including pilot age fees) (iii) Estate rentals.5316 lakhs.828 lakhs.834 Lakhs. Because of this limitation another approach can be attempted. it means that the Human Resources of the organization remain under utilized.1905.74 (in Lakhs) . If the rates of return are above the cut off rate. oil and Lubricants handling charges 841. The income of Chennai Port Trust consists of three items. storage charges:Handling and storage Charges on general Cargo Storage of goods in bonded warehouse Handling and storage Charges on general Cargo Storage of goods in bonded warehouse Crainage Petroleum. the following methodology is adopted.153 SRM Management Digest .61 lakhs. Of these.79 0. Such incomes during the year are:Cargo handling and Rs. The interest on capital during the year is Rs. The rate of return on Human Resources can be ascertained at 14.5366 lakhs is divided in the ratio of Human Resources and capital assets. then it can be concluded that the Human Resources are properly utilized for generating income for the organization.22%. Rate of Return on Human Resources: In order to study the efficiency of the management of an organization in utilizing its Human Resources for generating income. When the above income of Rs.333 lakhs respectively. As part of my study in Chennai Port Trust for the purpose of calculating the Human Resources contribution.25 2950. The remaining income is the result of the combined effort of Human Resources and capital assets. Cargo handling and storage charges and Port and Dock charges reveals that there are certain incomes which are earned without any human effort. miscellaneous charges. This income is generated by Human Resources and capital assets.2010 (5) Human Resources to Profit before tax (6) Human Resources to Value Added 12.operating and hence excluded from this study.11 46. Capital assets and capital contribution. When this figure is compared with the value of Human Resources.

6. Prabhakara Rao D. the income generated by Human Resources by Cochin Port Trust during 2008 can be estimated at to 643. 1986 2.18 determine how far the investment in Human Resources is utilized by the management in producing income for the organization. Dasgupta.400 lakhs and hence the return on Human Resources investment is only 4. E.13.62 0. 13.85 779.75 445. Conclusion The HRA system tries to evaluate the worth of Human Resources of an organization is a systematic manner as a whole to the organization and the society and record them for presenting the information in a significant manner in the financial statement to communicate their worth with changes over the period and results obtained from their utilization to the uses of financial statements. The amount of investment made in the Human Resources and its value can be utilized by the Human Resources management personnel to 139. 71-84.85 63.8%. The value of Human Resources as on 31st March 2008 is Rs. Thus the Human Resources management becomes easy and more effective.G. 1979. (April): 253-67.P.22 lakhs. A Model for Human Resource Valuation: A Stochastic Process With Service Rewards. MA: Kluwer . Towards a psycho-technical systems paradigm of organizational measurement. In a business organization the above approach can be adopted very easily. Publications New Delhi.N.G. 3. Decision Sciences.98 19.2010 154 Wharfage of containerized cargo Import cargo on stream landing Export Cargo on stream landing Port and Dock charges:Towage and mooring fees Berth hire charges Pilotage fees Dry Docking charges Water supply to shipping Total Study conducted by the planning and Research Cell of the Cochin Port Trust during 2008 has revealed that nearly 12% of the operating income is contributed by Human Resources and the remaining 88% by other factors.SRM Management Digest . Following the above findings. Anmol Publication New Delhi 1990. Under both these approaches the return on Human Resources is less than 18%. The Accounting Review. Flamholtz. Bhargava. “Human Resources Accounting” Sultan Chand & Sons New Delhi 1980 4. “Human Resources Accounting” A tool for control and management ofassets”.an indispensable but often neglected element is thus to be fore grounded into the industrial arena for the betterment of the economy. References 1. E. E. The Human Resources .84 5360. Flamholtz. Hence it is concluded that the Human Resources of Chennai Port Trust is not properly utilized by the management. Such an analysis will give an idea about the utilization of human resources in an organization. 1971. Concepts. Boston. Methods and Applications. (January).57 779.33 56. Flamholtz. 5. Such information will be in the best interest of the Management Human Resources and the Society. Human Resource Accounting: Advances. “Human Resources Accounting” Inter-India. 14. P.

E. 947954. Moore. W.E. Measuring the ROI of management development: stochastic An application of the valuation model. 1999 7. 103-112. Spring). G. The personnel economics institute after ten years : What has been achieved and where we are we 1998. and Schwartz.. B.1-2. Johanson. Sandervang. M. W. 29. Ryan. Journal of Human Resource Costing and Accounting. 21-40. and rewards 10. P. Capital Budgeting Practices of the Fortune 1000:How Have Things Changed? Journal of Business and Management. and Hua.From learning to practical use and visible results: A case in competence development from a Norwegian business firm.G. 1 (2). . Bullen. 65-76 13. 61 (4). 8.. Flamholtz. 3 (No.” Accounting Review. Bullen. Flamholtz..2. Human Resource Accounting: A Historical Perspective and Future Implications. . going?” Journal of Human Resource Costing and Accounting.L. 2007. 40 (10).P. U.. Plant Engineering.. 2000. On the Use of the Economic Concept of Human Capital in Financial Statements. Measuring how human capital appreciates in value over time. 87-100. 7 (No. Lev. M.. A. Management Decision. 2002. Journal of Human Resource Costing Accounting.2010 Academic Publishers. and Mabon. 12. 1971 (January). R. H. Autumn). 11. and Ryan. A. 2003. Winter.G. and Hua.155 SRM Management Digest .L. 2002. 9. 355-364.

A major step taken since nationalisation for achieving the rural upliftment was the expansion of branches in rural areas and priority sector lending. The key to programming for rural credit lies in recognising their problems and constraints and formulate the programmes that are more suitable for their specific needs. distribution and consumption. As per this the credit policy was implemented to encourage the flow of credit to priority sectors like agriculture. However the various schemes introduced for the upliftment of the rural masses by the government have not resulted in substantial improvement in the conditions of the poor. P. The planned economic growth. The social responsibilities of the commercial banks towards rural development lies in elimination of poverty.2010 156 IMPACT OF BANK CREDIT ON RURAL POOR – WITH SPECIAL REFERENCE TO PUBLIC SECTOR BANKS Dr. cottage and small scale industries. Introduction The speedy economic development of a country depends on the developmental role of the commercial banks to a greater extent as they play a significant role in poverty alleviation.10% during 2000-01. Importance of Rural Credit In India. etc. Thus various regulatory measures have been taken in order to enable the banking sector to play a vital role in the economic development of the rural and backward areas. Chandirakala. Lecturer. The Service Area Approach (SAA) introduced in April 1989 caters to the overall credit needs of villages that were allocated to the various branches of commercial banks. 2. development of small scale entrepreneurs. increased money supply and banking habits. rural poverty continuous to be significant over the past few decades. To realise the same the government both at the centre and the state modified gradually a variety of schemes for the upliftment of the rural areas for providing the necessary financial support through community development programmes and integrated rural development programmes. The banking industry is entrusted with the responsibility of the financial requirements of all the sections in the country. But due to the poverty alleviation programmes introduced by the government in successive years. . S. This scheme was introduced in order to facilitate the rural borrowers to have an easy access to institutional credit.G.G. 1. D. Majority of the rural credit should be focussed on short term and long term loans for working capital and investment purposes relating to agricultural and other inter related activities. Chennai – 600 106. the poverty levels reduced from 56. in spite of various efforts taken by the government. active guidance by RBI led to the rapid progress of banking industry after independence. The Indian banking sector has aided the economic growth of the nation on a continuous basis by facilitating the economic activities of production. Vaishnav College. This is mainly due to the fact that 75% of the Indian population still lives in rural areas and out of that 80% depends purely on agricultural activities.44% of Indian population in 197374 to 26.SRM Management Digest . The development of the rural areas depends mainly on agriculture and its allied activities as that accounts for about 37% of the total national income. equal employment opportunities. providing health care facilities. and Research Department of Commerce.

To the social developments in the rural areas through bank’s participation. Research Design of The Study The study is conducted using both analytical and descriptive type of methodology. The commercial banks play a vital role in improving the living conditions of the poor through various poverty alleviation schemes by ensuring greater access and sustainable flow of credit. despite the various developmental activities towards rural development since independence. To assess the level of improvement in the standard of living of the rural folk. 4. Apart from this large scale corruption at the lower level bank officials lead to administrative problems in which rich borrowers are certified for subsidy schemes.2010 The development of the neglected rural sector depends much on the removal of poverty and unemployment. This can be achieved by providing career opportunities and managerial training to small entrepreneurs. In order to achieve the same banks play a key role through rural credit. Hypothesis • The extent of financial assistance provided by banks is not significant in rural areas. 6. small-scale industries and cottage industries. • • The bank loans do not improve the standard of living of the beneficiaries. storage and transportation facilities never reaches the rural poor. proper planning but poor implementation to development schemes and mismatch between bankers and poor borrower’s views on rural credit also leads to the total lack of rural development. During hardships they need money for survival and operating needs too. The banks while investigating the purposes of loan should give special consideration to the special requirements of the poor. 2. Fewer branches with lesser number of small loans and shorter repayment schemes add to the problems of rural credit. In some incidences. 3. Statement of The Problem The rural development is the back bone of the national development. Poor infrastructural facilities. 7. due to lack of information government benefits like free power. inadequate credit appraisal leads to poor recovery rate and high rate of defaulters. rigidity of rules. In short all the poor require is instant finance at a cheaper rate of interest without stringent procedures. To analyse the extent of financial assistance provided by banks in rural areas. There is an urge for special programmes for the direct improvement of the conditions the poor to achieve economic growth and hence the active role of banks in providing credit in eradicating poverty in rural areas has assumed greater importance. 5.157 SRM Management Digest . any study which focuses its attention to ascertain the factors rural development has a fascinating and wide scope. The study is based . There is no relationship between the social development of rural poor and the bank’s contribution. Hence. nonparticipation in selection of activities and weekly integrated plans with inadequate marketing facilities posses as another important huddle. lack of education. Problems of Rural Credit The condition of the rural poor has not improved significantly. The rural people are in need of loans for improving productivity and for socio-cultural commitments. 3. Objectives 1. Thus it is highly important in studying the success of commercial banks in implementing such schemes to achieve the poverty alleviation. In some cases. High transaction costs. subsidised interest rate. The Indian economy consists mainly of agriculture.

96 3. Table 1 .125 0. details of extent of financial assistance provided by banks.074 0. Periyapalayam and Mathur based on simple random sampling method. Error Deviation Mean 1.24 2. Std.Opinion of rural borrowers on extent of financial assistance N Normal time lag in sanctioning loan Sufficient loan for business expansion No delay in obtaining loan Easy Interaction with bankers Non Requirement of surety 200 200 200 200 200 Mean 3.63 1. It is inferred that 60% of them had savings habits prior obtaining loan.078 0.63 with consistent standard deviation for 1 variable and more variability for 5 variables.28 2.84 S t d . The primary data was collected from 200 samples from 4 villages in Tiruvallur district namely Attarampakkam.054 0.2010 158 on both the primary data and secondary data. The study is based on survey method.076 From the above table it is found that the mean value ranges from 2. one sample t-test and descriptive analysis. Analysis of Data And Intrepretations: Influence of Demographic Variable on Rural credit: The percentage analysis revealed that more than three fifth (60%) of the respondents were of the age group 31 – 40 in which the minimum age was 25 and the maximum age was 45. The primary data collected were analysed with the help of percentage analysis. Thandalam. The occupation of more than 60% of the respondents was agriculture as the sample is mostly taken in rural areas. 8. level of improvement in the standard of living of the beneficiaries and the bank’s contribution for their social development.32 3. One-Sample t test for Extent of Financial Assistance in Rural Areas: Hypothesis I: The extent of financial assistance provided by banks is not significant in rural areas. Among the respondents 72% have taken loan in public sector banks and 63% of them have opted short term loans for agricultural purposes for a period of 1 – 6 months. Among the respondents 31% passed their higher secondary followed by high school pass out of 30%.767 1.099 1.080 0. The standard error mean are also found to be consistent for all the 6 variables .077 0. The primary data is obtained through properly framed questions covering the personal details.118 0.Opinion of rural borrowers on extent of financial assistance Table 1 .079 Normal Rate of interest 200 3.053 1.84 to 3. The questionnaire comprises both optional type and statements in Likert’s 5-point scale ranging from strongly agree to strongly disagree.SRM Management Digest .

One sample t test for extent of financial assistance t df 95% Confidence S i g .159 SRM Management Digest .687 are statistically significant.000 .000 . Table 3 .80 3.09 2. Error Mean 0.267 1.687 199 199 199 199 199 199 .914.682 35.315 3. M e a n Interval of the (2-tailed) Difference Difference Lower Upper 3.00 3.100 41.000 .000 3.223.68 3.88 Std. More over they find it easy to interact with the bank officials.223 61.2010 Table 2 .42 3.630 3.43 3.254 1.78 Normal time lag in sanctioning loan Sufficient loan for business expansion No delay in obtaining loan Easy Interaction with bankers Non Requirement of surety Normal Rate of interest 44. The banks charge nominal rate of interest and the amount of loan sanctioned is sufficient for expansion of business activities.240 2. The standard error mean are also consistent for all the 5 variables.933 Std.48 From the above table it is found that the t values 44.Opinion of rural borrowers on improvement in their standard of living N Creation of permanent employment Amortisation based on income Bank loan clears prior debts Increased business income thro’ loan Marketing assistance by banks 200 200 200 200 200 Mean 2.090 0.75 3.092 0.065 1.000 .914 47.100.282 2.39 3.21 3.87 2.304 0.840 3. 35.11 3. Therefore the null hypothesis is rejected at 5% level of significance.07 2. 41.108 37. . One-Sample t test for Improvement in the Standard of Living of the Rural Poor: Hypothesis II: The bank loans do not improve the standard of living of the beneficiaries. Thus the extent of financial assistance provided by banks in the rural areas is significant.089 0.108.075 0. 61. Deviation 1.960 3.14 2.11 with consistent standard deviation for 1 variable and more variability for 4 variables.12 3. This shows that the borrowers strongly agreed with nominal time lag in sanctioning and no delay in obtaining the loan.066 The mean values of these 5 variables range from 2. and 47.682. 37.75 to 3.000 .

093 N Banks motivate best use of schemes Improved standard of living Banks pass subsidy to needy Technical assistance to borrowers Existing schemes needs improvement 200 200 200 200 200 Mean 3.750 3.067 1.90 3.05 3.63 3.077 0.01 t df The t values are statistically significant at 5% level of significance.46 2.2010 160 Table 4 . . M e a n Interval of the (2-tailed) Difference Difference Lower Creation of permanent employment Amortisation based on income Bank loan clears prior debts Increased business income thro’ loan Marketing assistance by banks 36. Moreover the banks also help to a certain extent in marketing their products.345 1.079 0.000 .47 From the table it is substantiated that the mean values of 5 variables if social development of rural poor due to banks participation range from 2.75 Upper 2. Std. As the significant value is 0.24 3.000 2. Error Mean Deviation 1.69 2.60 3.00 and it is less than 0. One Sample t test for social development of respondents: Hypothesis III: There is no relationship between the social development of rural poor and the bank’s contribution.095 0.60 2.80 to 3.05.63.111 1.115 43.084 1.000 .311 0.110 3.707 34.000 . there is significant difference between the test value and actual calculated mean.One sample t test for improvement in the standard of living of rural poor 95% Confidence S i g . It has resulted in their increased income and the amortization of the bank loan is also based on such income.617 31.880 2.90 2.Opinion of rural borrowers on social development S t d .668 199 199 199 199 199 . Table 5 .870 2.93 2. Therefore the conclusions are interpreted from the rural borrowers as the bank loans led to the creation of permanent employment by clearing their prior debts.070 2.000 .075 0.SRM Management Digest . Hence the null hypothesis is rejected and concluded that there exists a significant improvement in the standard of living of the respondents due to the bank credit.29 3.534 34.80 3.

48 3.000 3.039 29.42 1.Descriptive Analysis of variable on rural credit N Age Education Occupation Saving prior taking a loan Amount of Saving Bank – loan taken Loan Scheme 200 200 200 200 200 200 200 Minimum 1 1 1 1 1 1 1 Maximum 3 5 3 2 3 3 2 Mean 2. Descriptive Analysis Table 7 .000 .000 .61 2. They also offer guidance and technical assistance to the beneficiaries. banks motivate the borrowers for better usage of the various financial assistance provided by them thereby improving their standard of living.45 3. Banks pass on the benefits of subsidy offered by the government to the needy people.67 .29 The t values display high significance at 5% level.One sample t test for social development t df Sig.470 3.99 3.000 .10 2.460 2. Hence the third hypothesis is rejected and concluded that banks play a vital role in the social development of rural masses.2010 Table 6 .443 199 199 199 199 199 .48 .600 3.44 1.000 . Deviation . Thus to upshot.800 3.33 .630 3. 9.40 1. However the respondents strongly feel that the existing schemes need further improvement for the betterment of the rural areas.441 37.950 48.63 1.106 44.65 Banks motivate best use of schemes Improved standard of living Banks pass subsidy to needy Technical assistance to borrowers Existing schemes needs improvement 46.75 3.161 SRM Management Digest .37 S t d .51 1.78 3.88 .65 1.49 .31 2.61 3. Mean (2-tailed) Difference 95% Confidence Interval of the Difference Lower Upper 3.84 .

27 1.75 3.28 2.60 and standard deviation 1.11 3.80 3.30 .24 2.31 From the above table it is clear that the rural credit has direct implications on the major factors.77 1.63 2.08 1. Suggesstion For Futher Improvement The following are the suggestions given for improving the active participation of the banks for the overall development of rural poor. Higher the rural credit moiré will be the mean values.12 .07 followed by banks motivation mean 3.88 3. The banks should provide expert advice .47 1.08 1.06 1.46 2.2010 162 Normal time lag in sanctioning loan Sufficient loan for business expansion No delay in obtaining loan Easy Interaction with bankers Non Requirement of surety Normal Rate of interest Creation of permanent employment Amortisation based on income Bank loan clears prior debts Increased business income thro’ loan Marketing assistance by banks Banks motivate best use of schemes Improved standard of living Banks pass subsidy to needy Technical assistance to borrowers Existing schemes needs improvement Valid N (list wise) 200 200 200 200 200 200 200 200 200 200 200 200 200 200 200 200 200 1 1 2 1 1 1 1 1 1 1 1 1 1 1 1 1 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 3.60 3.35 1.87 2.63 3.25 1.07 2. 10.10 1. The banks should consider modifications in the terms and conditions of the credit supply.08. 1.96 3.93 1.63 and standard deviation 1.05 1.SRM Management Digest . The main indices that affect rural credit are standard of living with mean value of 3.84 3.63 and standard deviation 1.07 1.08 and rate of interest mean 3.12 1.11 1. These variables with maximum mean value rely directly on the rural credit. This signifies the active participation of banks in the rural areas. 2. The banks should have a sustainable relationship with the borrowers as recovery of the previous loans and sanctioning of fresh loans should take place simultaneously.32 3.

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and practical training to the borrowers in selecting income generating activities based more on practicability and profitability. Sufficient freedom should be given to the borrower in selecting the activities in diversified utilisation of the loan amount. 3. Difficult procedures connected with obtaining loan should be easy. Banks should be more of user-friendly to the rural poor. The restriction on the list of ‘approved’ activities for lending loan should be redefined on the basis of demand based activities. Moreover banks should concentrate on solving the problems of borrowers in continuing smooth running of the existing business. 4. This can be done in a better way by proper training, awareness on savings and credit discipline, inculcating self confidence based on mutual support system, flexibility in utilisation of funds etc. Banks should ensure providing adequate amount of loan to credit worthy people to enable them to expand their business activities. 5. In order to cater to the needs of highly dispersed population in the rural areas, opening satellite branches on weekly market days at various places can link the production and consumption credit needs of the poor and application of credit schemes of the banks in a better way. For repayment of such loans banks can depend on agents like NGOs to have cost effectiveness and good recovery rate. 6. Group based lending like SHGs and lending on the security of common property should be adopted completely. Credit for women should be encouraged more in tribal areas. 7. Though the money lenders charge exorbitant interest, their timely assistance and zero

formalities are far more superior to banks. Thus cooperation or a combination of banks and traditional money lenders can ensure solving all rural credit problems, to great extent. 11. Conclusion The existing credit policy needs a lot of modifications to suit the exact requirement of the rural poor. Flexibility in lending, supply of timely and adequate credit at minimum interest to the needy persons and proper supervision over the end-use of credit are the need of the hour in order to make the assistance of commercial banks a successful one. Thus properly designed and effectively implemented bank assistance can be a means not only to alleviate poverty and empower the rural poor but also be a viable economic and financial proportion. 12. References 1. http://www.nabard.org/fileupload/DataBank/ Speeches/MD_speech_Shri%20Y.S.P.%20 Thorat_241105.pdf http://rbidocs.rbi.org.in/rdocs/content/ PDFs/90024.pdf http://en.wikipedia.org/wiki/Rural_credit_cooperative http://www.jstor.org/pss/4399896 h t t p : / / w w w 3 . i n t e r s c i e n c e . w i l e y. c o m / journal/113451427/ abstract?CRETRY=1&SRETRY=0 6. 7. h t t p : / / w w w. r b i . o r g . i n / s c r i p t s / B S _ SpeechesView.aspx?Id=318 SHARMA N.K., “Social Responsibility and Profit Motive of Commercial Banks”,Yojana, July 2002, pp.13-16 VASANTH DESAI, Indian Banking – Nature and Problems, Himalaya Publishing House, New Delhi 1987, p.160.

2. 3. 4. 5.

8.

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9.

LAL NIGAM B.M., Banking Law and Practice, 5
th

11. SGSY

Guidelines

Ministry

of

Rural

Revised

Edition,

Konark

Development, Government of India, New Delhi, June 2006. 12. URVASHI GULATI, “Women’s Development in India with special reference to Rural Women”, Kurukshetra, Vol.XLIII, No.11, Aug 1995.

Publishers, Delhi 1997, pp.154-165. 10. The Director, Association of State Bank Officers, A Guide of Banks’ Finance in Poverty Alleviation Programmes, ASBO Publications, Chennai, 1996, pp199-205.

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EFFECTIVENESS OF MICROFINANCE INDUSTRY AGAINST THE BACKDROP OF GLOBAL RECESSION
D. Mylesh Raju L. Suresh Mallya Valliammai Engineering College, Kattankulathur 1. Introduction Microfinance Earlier the word microfinance referred only to the monetary assistance that was offered to poor people who otherwise would not have got such financial aids from banks. The major reasons for denial by the banks to these kinds of offerings to such people range from seeking of securities to repayment defaults. No sooner did Mr. Yunus khan plunged into this activity, the unbankables got access to banks assistances in various forms which included micro credits, savings and other financial services. 2. Paradigm shift The word Microcredit referred only to the assistance in the form of money whereas Microfinance included other related aspects such as insurance facilities, technical assistances etc... 3. Recession The downtrend in the performance level of almost all major sectors of an economy could be one of the factors that indicate the onset of recessionary environment in that economy. No matters whether it stabs only a certain province or the entire world, the word recession could possibly mean: Credit crunch Reducing disposable income Symptom of economic depression Industrial performance at malaise. 4. Recession and Microfinance The type of businesses covered, i.e. the loan extension and other facilities provided by the MFIs are normally given to the following businesses: • • • • • • • • • • • • • • • • • Cattle rearing Curd processing Building material shop Dry and wet grinding Candle making Coir unit Dry fish Fish and Fish products Idly making Tailoring Lace and embroidery Honey processing Coconut shell products Tea and snacks Milk booth Sari and garment selling General and departmental stores

The following issues are deemed to be Achilles heel for microfinance institutions under recessionary conditions. • • • • • • • • Increase in operating cost Procrastination in payments Decrease in morale among employees Lack of Interest among borrowers Decline in source of funds Increase in default rates Intervention by money lenders Decrease in liquidity

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5. The major objectives of this research include • Whether recession 2008-really had an impact on the microfinance lenders. Difficulties faced by micro creditors and the extent of difficulties

risks a lot better. Indian MFIs and banks survived because India’s comfortable position allowed the RBI to meet dollar liquidity needs ( Jayanth R Varma, 2008). The sources of fund are limited for MFI either due to regulations or due to lack of initiatives on the part of MFIs. Though some MFIs have moved from their complete dependence on banks, they still are single largest fund providers for bank credit. (Icfaian journal of management research, 2008-09). 7. Methodology Qualitative study: It is a qualitative type of work and does not include any numerical information and quantitative analysis. Research tool used: A thoroughly refined

6. Literature review As mentioned in the introduction, there exist a lot of differences between the concepts of Micro credit and Microfinance. Microfinance refers to small-scale financial services – primarily credit and savings and also to all types of financial services provided to low-income households and enterprises - Robinson (2001). It is presumed that microfinance activity has had an incredible growth in India. But it was found that even in the normal economic scenario there prevail a lot of difficulties regarding their effective survival. Despite the success of microfinance institutions; only about 2% of world’s roughly 500 million small entrepreneurs are estimated to have access to financial services (Barry et al. 1996).Indian Microfinance has continued growing rapidly with the main objective of financial inclusion extending outreach to a growth share of poor households to approve 80% of population that is yet to be reached directly to the formal institutions (Ghate, 2007). Regarding the various problems faced by the microfinance institutions there were many researches that had been done and various findings were also elucidated with evidences by many researchers. The present system with regard to this microfinance area needs to reduce the cost of lending by improving or innovating the delivery mechanism. The interest rates charged by them should cover the cost of delivering these loans (Y.C.Nanda). Some banks and non bank finances companies with large exposure to consumer credit faced mounting losses and the markets become uneasy about their financial health (Jayanth R Varma, 2008). The global crisis has been a wake up call for Indian banks to manage their liquidity risks and credit

questionnaire which consists of closed ended questions those are intended to obtain the matters of fact that have high pertinence to the subject being investigated and the details sought in the questionnaire orbit around the following: • Type of business covered by the microfinance institutions under investigation. Businesses affected during recession. List and the encountered. extent of problems

• •

8. Mode of administration of the questionnaire: Telephone Samples: Five microfinance institutions were selected and they were administered the questionnaire through telephonic mode and the appropriate responses were noted down with full care in order to ensure credibility of the results. The respondents include the authority concerned from the following microfinance lending institutions: • Dhan foundation. • Equitas foundation.

e if these participants had contributed to working of MFIs. It was affirmed by all respondents • • • . from Banks. to a large extent. Indian bank. then the recession would have been a difficult period for MFIs’ effective survival during the global economic meltdown. None of the individuals and foreign lenders was found to involve in providing source of funds to these MFIs. Canara bank. due to earlier predictions made by researchers and economists that US recession would have an adverse impact on India. If it had been the case. i.2010 • • • 9. The only one sector that had evidenced the impact of recession was building material shop. Hardly there were identifiable effects of recession in other businesses. the problems pertained to liquidity and supply of money to these organizations were made recession proof by pursuance of appropriate and necessary steps. Findings Problems Annai Indhra Gandhi trust. Increase in Procrastination in operating cost payments Institutions Dhan Very high Medium Medium Medium High High Very low Very low Very low Low Decrease in morale of the employees High Very low Low Medium Medium Lack of interest among borrowers Low Low Low Medium Medium Equitas Annai Indhra Gandhi Trust Canara Bank Indian Bank Problems Decrease in Increase in default source of funds rates Institutions Dhan Low Low Low Low Very low Medium Low Low Low Low Intervention from Decrease in liquidity money lenders Low Low Low High Medium Medium Medium Low Low Low Equitas Annai Indhra Gandhi Trust Canara Bank Indian Bank • It was found from the reply of respondents that most of the microfinance institutions in the area under investigation have had their source of funds.167 SRM Management Digest . Though government also funded them to carry out operations of MFIs.

The Impact of Global Financial Crisis on the Serbian Economy and Responses from the Economic Policy. 10. only one default case was reported in one of these institutions during the period of one year (2008-2009).. employment. unambiguously would lead to default at least to one of the MFI. 4. Discussions • It is found that though recession has not hit the microfinance institutions that much badly . denying access to multiple borrowings etc. Djuricin D. One such area is hike in operation cost. B . Gandhi Subramanian. 3. • The operation cost was also found to have shown a slight increase because the managers of these institutions had to be motivated all the while and counseling had to be given to the beneficiaries regarding regular payments as an action of caution to avoid delayed payments and other potential recessionary problems. Kopaonik Business Forum.. Results and discussions Results • Give a man a fish and you feed him for a day. garments due to recession. during this recession. (2009). • 12. For instance. has had almost negligible impact on the microfinance. September and November 2009. Vol III. For instance. Global financial crisis of 2008-2009 –Triggers. It is apparent from above discussion that Microfinance activity will be on the right track towards its throne by passing through the adverse conditions such as recession even in a much better way if the above suggestions are considered and implemented. • The common problem of delayed collection can be solved by employing simplest measures such as introduction of penalty amount. there are some minute pitfalls in their operations and pursuance of normal activities during recession .2010 168 that all other businesses except building material had a large bearing on humans’ routine and normal life.These are all paramount to be done. Travails and treatments. It is unlikely that an individual would stop his consumption with regard to food. It can be concluded that though there were major slumps in the performance of hi-tech industries and decrease in major economic factors like GDP. R u r a l W o m e n Microentrepreneurs: An empirical study • 11. 2. Naveen K Shetty and Veerashekharappa: The microfinance promise in financial inclusions-Evidence from India. This premise can be considered as a basic concept behind the success of microfinance industry. disposable income etc. References • 1. albeit in reality no such considerable problems were reported. The Icfai journal of Applied Economics.. September 2009. the recession in fact. T a m i l m a n i . March 2009. It was also found from the study that the government is poised to plunge into this field to have a regulatory control and to magnify the role and reach of microfinance activity in a wider scope.But those problems can be fully eliminated if MFIs give due considerations to those areas. The Icfai journal of applied economics.SRM Management Digest . rewarding on-time payers. multiple borrowings. otherwise the situation during adverse situations would not be in a manageable state as these factors stoke the adversity further. Instead it is better to teach a man to fish and you feed him for his life time.

themix.com/ 2. h t t p : / / w w w . crisis-hurt-microfinance/2008/10/ http://www. .wordpress. 6.mykro. September 2009. c g a p .microfinanceinsights. Ghate prabhu. 2007.1305/ FN_52%20ENG.1. 5. Sage publications.org/will-the-globalfinancial6.htm 5.financial-crisis-microfinanceinstitutions Websites 1.2010 on their social profile. New Delhi. High cost of finance in micro credit business in Andhra Pradesh (INDIA): problems and solutions.169 SRM Management Digest . https://www. The Icfaian journal of Applied Economics.asp 3.org/publications/ i mpact.eu/europeaid/infopoint/ onferences/2009/04_20_microfinance_ en. Anand. o r g / g m / document-1. pdf 4.europa. business aspects and economic impact. http://mostlyeconomics. http://ec. The Icfai journal of Applied Economics. http://www. June 2009.com/ index. Indian Microfinance: The challenges of rapid growth.

companies may differentiate themselves on the basis of the knowledge they possess which are from their employees (Black and Synan. non-substitutable and costly to imitate (Hanson et al. an organization needs to ensure that knowledge is being created. With the learning culture. university should also be a place where continuous learning occurs among academics and students. focuses on the learning process. Therefore. Indore . they have become a learning organization (Patterson. inquiry and dialogue. the organization’s environment plays an important role.2010 170 ACADEMICIANS’ PERCEPTION TOWARDS LEARNING ORGANIZATION: A COMPARATIVE STUDY Dr. In order to get smarter. etc. Each institution has its own capabilities and core competencies. controllers. University is the place where teaching and learning activities are performed. Shri Vaishnav Institute of Management Sch. Stata (1989) stressed the point that “the rate at which individuals and organizations learn may become the only sustainable competitive advantage”. 1993). In order to stay competitive in business.SRM Management Digest . The dimensions are continuous learning . the organization needs to capture its organizational knowledge. rapid change of technology and higher consumers demands have prompted companies to look for competitive advantage for survival. Prahalad and Hamel (1990) have described the following criteria of how organizations learn.Sc {Stats} Pursuing Ph. 1997). mental models. 1. Reader Shri Vaishnav Institute of Management School. many universities are now applying new ideas and changing to new ways of operating. and where people are continually learning how to learn together’ (Peter. Learning Organizations . where new and expansive patterns of thinking are nurtured. 71. Besides providing knowledge in academic areas to the learners or students. and General Electric have pledged to build a Learning Organization where ‘people continually expand their capacity to create the results they truly desire. customers. Gumasta Nagar.D. Watskins and Marsick (1996) further developed the seven dimensions of learning organization to measure its existence in an organization. The educational institution is considered as service industry where it provides knowledge to students through the expertise of academic staffs. one of the best competitive advantage that should be created is through its human resources. transferred and shared in the organization. rare. 1990. team work. Sunil Chouhan ( M. No. 2005). embedded systems. Many organizations like Xerox. where collective aspiration is set free. it is believed that creation and transmission of knowledge would be able to take place effectively.) and an overall attitude of openness. shared vision. Garvin. Babita Agarwal. Lecturer. In a strategic response to the changing environmental situations and pressure. empowerment. A key ingredient of this criterion is in how banks process their managerial experiences. Introduction The intense global competition. which implies listening to different opinions (from peers. It provides a meeting place for the learners to meet with the teachers in pursuit of knowledge. Ph.D {English} MBA {HR}. To promote this. In order to create a sustainable competitive advantage in this highly competitive industry. The most discussed model on learning organization comes from Senge’s (1990) five disciplines of learning organization encompassing personal mastery. D.Litt. Prof. and identify the outcomes of the process as the development of core competencies: 1) Adopt a learning approach to strategy. systems connections and provision of leadership. it has to ensure that its competencies fulfilled the criteria of valuable. Under these circumstances. team learning and system thinking.

In the same time. Formative approaches should be shared on an organizational level and become part of the overall procedural schemes. which is strictly linked to the capacity to successfully adapt to changes and to generate innovation. focuses on the possibility to access learning opportunities and to start personalized .expect greater reward. In other words. A learning climate is also necessary. focuses on the horizontal processes taking place among units. the following indicators could be proposed: investigations of the company’s climate. as it requires strategic processes in place to support the acquisition of information and its transformation into knowledge. by using information systems to help employees to understand the content of the data. 7) Inter-company learning . Management practices should therefore encourage. representative. the ability of an organization/manager is not measured by what it knows (that is the product of learning )but rather by how it learns the process of learning . It is important to see if reward and recognition systems are in place . The accounting. updated. 3) Access and transparency of information. focuses on the mechanisms which generate participation and support empowerment within an organization. The criterion basically focuses on informing and empowering. systemic thinking. 5) Internal exchange and dialogue. 6) Reward flexibility. increase in pay) or intrinsic (greater fulfillment through a more demanding or higherstatus job). The assessment of flexibility goes beyond the assessment of individual productivity in traditional terms and poses interesting questions concerning what the company considers reward able or to be rewarded. sharing of self-development plans with the “boss”.171 SRM Management Digest . Participative policymaking focuses on the actors/stakeholders who are involved in organizational policy-making processes and on the nature of the relationships characterizing such a process. which may eventually make employees behave in a Pavlov-like way. The movement has to come from the bottom-up with understanding and shared purpose. teamwork as well as individual effort. focuses on a special kind of flexibility. recognize and reward: openness. use of “suggestion boxes”. become more skilled . which must be accurate. celebrate successes and accomplishments.2010 /Managers learn from their experiences rather than being bound by their past experiences. complete. with the aim to generate improvement and learning. In other words. Within this criterion. 2) In Generative Learning Organizations. it is relevant to see what is the organizational culture affecting the internal reward system. a sense of efficacy and empathy. The employees expect reward for their training or developments they have put effort in. allowing knowledge sharing and the access to knowledge bases and to information. This reward might be either extrinsic (promotion.processes and systems that recognize acquisition of new skills. use of tools and methodologies to “socialize” knowledge. it must be highlighted that there is a risk in linking reward systems with opportunities for learning and personal development. detection of employees’ perception of autonomy. and encourages continuous personal development. focuses on the fact that organizations start a praxis in creating opportunities of dialogue with other organizations. responsibility and empowerment 8) Self-development. it focuses on the functions and responsibilities as they are articulated within the organization and on the relevant communication flows. set up of an “Exchange forum”. 4) Formative accounting focuses on the formative processes through which control procedures take place and their results are then discussed between the controlling actor and the controlled one. budgeting and reporting systems have to be set up so they assist learning and give added value. creativity. These can be done by making information as widely available as possible.

2010 172 development processes. while devoting time and attention to the transformation. Provision of leadership and continuous learning dimensions received the highest score of mean in this research. Geroy and Wright’s (2000) study focus on current practices. learning from their own experience and past history. 3. learning on-the job. empowerment. The problem here consists in who owns the learning . Chang and Lee (2007) further explained that learning organization covers individual. learning from the experiences and best practices of others. Johnson’s (2002) study examines the actions that a leader can take in order to transform an organization into a learning organization and studies four leaders of widely diverse organizations. According to him. and the uses to which the new learning will be put. Ortenbald (2004) proposes an integrated model of a learning organization that includes organizational learning. team work. The study finds that appropriate rewards and recognition are vital learning organizations and that an environment of knowledge sharing and learning systems is an indication of a learning organization. The Objectives of This Study • • • To examine the influence of the academician’s perception of learning organization To recognize the need for individual learning for all levels of Faculty. To encourage faculty to accept responsibility . Griego. Dymock and McCarthy (2006) have conducted a research to explore employee perception of the development of a learning culture in a medium-sized manufacturing industry that inspires to become a learning organization. Selden (1998) evaluated the relationship between the seven dimensions and knowledge performance and it was found that all dimensions except inquiry and dialogue were significantly correlated with knowledge performance. 1996) have proposed seven dimensions to measure the learning organization characteristics. inquiry and dialogue. 2. The objective of their research was to determine the practices of learning organizations that lead them to success. which predictably lead to learning organizations . and transferring knowledge quickly and efficiently throughout the organization. experimentation with new approaches. learning organizations are skilled at five main activities: systematic problem solving. It is a type of collective activity to reach organization shared vision. He has shown that learning organization can be measured and manifested through series of activities. The dimensions are: continuous learning . the employees or the employers. and at modifying its behavior to reflect new knowledge and insights. embedded system and provision of leadership possess strong relationship with knowledge performance. acquiring and transferring knowledge. Review of Literature Kumar and Idris (2006) found that team learning . The result suggests that a firm’s competitive advantage can be increased as a result of competencies that are established from a learning culture. system connections and provision of leadership. Many studies have attempted to link the seven dimensions with knowledge performance. a climate of learning and an organizational structure that is flexible and organic. Garvin (1993) has defined Learning Organization as an organization skilled at creating.SRM Management Digest . This criterion could be related to Senge’s discipline of personal mastery and with Stewart’s requirement of individuals committed to self-development. Murray and Donegan ( 2003) explore the links between firm competencies and organizational learning. Based on previous findings. embedded system. The research indicates that leaders who were successful in implementing the learning organization concepts used it as the solution to a business problem. grouping and organizational learning with the simultaneous proceeding effort for organizational and individual learning. Watkins and Marsick (1993.

Stata. T. R. more effort on the part of the management is required in granting encouraging incentives for staff who take the initiative to learn. Nohria. Hansen. development opportunities and training programs. we could investigate into the particular mechanisms of learning practices at different levels. 4. 106.173 SRM Management Digest . References • Black. M. July-August 1993. (1999) What’s your strategy for managing knowledge? Harvard Business Review. The practical implication of the study is that the Government Institutes need to pay conscious attention to encourage learning practices at the organizational level. C D (1997) The learning organization: the sixth discipline? Management Accounting British. Research Methadology H0:There is no significant difference regarding the perceptions of organizational level learning between the government and private education Institutions. Sloan Management Review. To summarize. 63-74. to merit the trademark of a true learning organization. 78-91. 70-72. 30(3). and culture to encourage an ongoing learning process as the concept of learning organization is an idealized model of coping with organizational change as a shift from traditional organization. and Tierney.2010 • for their own careers and their personal growth. The management should encourage their employees to participate in a range of educational activities apart from their routine tasks. D H & Synan. 5. and to examine the correlation of learning and performance outcomes .5).. Moreover. Most importantly. This difference is statistically significant. The findings of the study will enable the management of universities/colleges to understand the factors motivating their employees share knowledge and thus provide suitable motivational programs. (1989) Organizational learning -the key to management innovation. facilitate individual and team learning and encourage the employees to share their knowledge as these attempts will help the organizations attain the best out of their employees. This study will contribute towards the literature of learning behavior and knowledge sharing willingness of faculty members of the private higher education industry in terms of understanding ‘what determines the faculty member’s level of knowledge sharing toward their organizations’. 77 (2). all institutions under study need to exercise great efforts to establish a structure system. The management will be able to create learning and sharing workforce that are able to deliver high service quality and get good return on investment on major decisions. In future. 6. N. To examine the influence of reward and incentives on stretching the abilities of individuals. Result and Discussion ( Tables 1 and 2 are attached at the end of the references) The mean score for private Institutes (56. • • • .55) is higher than that for Government Institutes(50. implying that the private Institutes of management have a more positive perception on the existence of organizational level learning in their organizations than the Government Institutes does. 75 (10). H1: There is significant difference regarding the perceptions of organizational level learning between the government and private education Institutions. D A (1993) Building a Learning Organization. it would produce meaningful research output for the private higher education industry that will lead to future training and consultancy activities. Harvard Business Review. Garvin.

University of Georgia. Senge. K. 13 (1). G. (1990). The Learning Organization. (1998) Dimensions of the learning organization in family-run businesses. P. (2000). Senge. Leadership & Organization Development Journal. (2004) The learning organization: towards an integrated model. P. Unpublished doctoral dissertation. J. Leading the learning organization: Portrait of four leaders. GA. P. New York: Doubleday. (2000). and Marsick. The Fifth Discipline. American Society for Training and Development. 51-62.M. (1990). 10(1). V. & Wright. VA: Alexandria Griego. G. implications and outlines for future research. 96-116. V. & Donegan. Ortenbald. A. The Learning Organization 7(1).SRM Management Digest . D. K (2006) An Examination of Educational Institutions’ Knowledge Performance: Analysis. 5-12. N & Idris. 23. New York: Currency Doubleday. (2003). Athens... 241-9. Predictors of learning organizations : A human resource development practitioner’s perspective.2010 174 • Kumar. Geroy. P. 129 Watskins. Johnson. • • • • • • • .(Eds) (1996) Creating the Learning Organization. C. R.. O. • The Learning Organization. The fifth discipline: The art and practice of the learning organization. Selden. K. 11 (2/3). Empirical linkages between firm competencies and organizational learning . S Murray. The Learning Organization.

It is now a firm belief that the organizations can improve their effectiveness and productivity through the development of human beings. stress and obsolescence of skills and the need to innovate solutions related to these problems. 7. These needs are related to work benefits. Kulkarni observed that “HRD is an aid to the efficient running of the enterprise”.N. efficiency and effectiveness of its human resources. 4. Managers of these organizations need a higher level of managerial skills. Changing needs of people Due to various sociological changes. competence and responsibility among the employees of a concern. 1988: 13-14). many organizations face the problem of getting suitably trained and skilled people at various levels. Sukumaran. Lack of suitable manpower Due to lack of sufficient industrialization. Perambalur 1. Such competition also makes it difficult to recruit the right kind of people. Introduction Set of factors which draw attention of HRD in organizations stem from changing organizational environment and organizational necessities to adapt and innovate in response to these changes (Gupta. Thus. As such the organizations require more sophisticated systems for optimum utilization of its large human resource pool. Kilabi. Associate Professor Kanchi Krishna Arts College.2010 EFFECTIVENESS OF IMPACT OF ORGANIZATIONAL CLIMATE IN THE ORGANIZATIONS G.175 SRM Management Digest . Organizations need to develop ever – new response to these changing needs through more suitable human resource management policies and systems. Geary Rummler thus observed in this connection after having gained experience in . It increases the capabilities and efficiency of an individual which is likely to reflect itself in the long run in the well-being of the individual good reputation of the institution and ultimately the wellbeing of the society. Organizational climate and organizational goals Climate is helpful in the fulfillment of committed goals of an individual. Kannan. Some of these factors are: 2. M. This necessitates the organization to develop its own human resources. Rapid Technological change Rapid change in technology demands frequent changes in organizational structure and systems as well as change in the required skills. no organization is immune to the need of HRD to acquire and increase its capabilities for stability and renewal 8. 6. career growth etc. Management Studies Srinivasan Artis and Science College. The HRD system is an essential tool for management in order to develop a strong capability. competence. Director. HRD is the core of existence and strength of an organization. 3. 5. Organizational climate change The success of an organization depends to a large extent upon the capabilities. Expansion and Growth Organizational growth and expansion leads to increased complexity of operation. Increasing competition Increasing competition requires higher efficiencies as well as better human resources to meet the challenges. All these changes create conflict. R. increasing competition and changing technologies. Kancheepuram Dr. organization and society. the needs and aspirations of the employees change from time to time.

Every senior sees developing subordinates as his responsibility. Although any systematic or formal method which facilitates in increasing employee competency or helps in employee motivations and organization’s HRD aims at developing such a climate through periodic diagnosis and appropriate intervention to reach the organizational objectives. Every incident is treated opportunity. 2. 7. 2. as a learning The organizational climate is built if the following variables are attributed to practice in the organization 1. 9. People feel that they are cared for and have a sense of belonging.SRM Management Digest . job enrichment programmes etc. therefore should be a continuous process in the organizations. However the nature of efforts and investments in developing human resources may vary from organization to organization depending on its need. Climate Mechanism In the field of management sciences. Problems. Management’s Policy on HRD Potential Appraisal Organizational development (OD) Goal-setting Role Analysis Performance appraisal Career planning Executive Development Training 7. 10. Participation is encouraged. teams and departments. 8. There is promotion of collaboration among various individuals. there can be various other HRD sub-systems including review discussions. nature of capabilities the organization wants to build up. rewards. HRD Climate A healthy organizational climate is required for utilizing and enchanting employee competencies and to develop employee motivation. size of the organization etc. so what they say. 4. opinions and suggestions (openness) is encouraged. communication policies job rotation. feedback and counseling. The present decade is likely to continue to be a decade of new technologies in every field including human resources. A healthy climate is one where: 1.2010 176 his organization. The free expression of ideas. HRD climate is grouped into OCTAPACE culture . Climate variables climate development can be considered as HRD instrument or sub-system. 11. 6. People say what they mean. the change process. People have a sense of satisfaction in their work. Climate. 3. 10. 9. confronted and solved collectively or individually. It is now well recognized that human competency development is an essential pre-requisite for the development of any organization. 6. 11. 1980 can be called decade of computers and HRD. mistakes and difficult situations are handled with a learning orientation. HRD also aims at climate development. 8. 9. 12. climate developed a clear idea for what it wanted to accomplish and then waited and watched for just the right opportunity”. 5. Seniors support their subordinates and juniors respect their seniors. Initiate pro-activity and creativity. 5. and where people can be trusted. Accordingly. Problems are diagnosed. “I have seen real success in last four years when the HRD function was managed in opportunities fashion in our organization. 4. 3.

The elements of HRD climate and their effectiveness are independent of personal profiles of executives. The statements in the each questionnaire are checked for reliability using Cronbach’s Alpha Criterion to include in the questionnaire and the samples obtained in a random way in those two organizations satisfy the probability normal distribution using Kolmogrov – Smirrov Test. 138 employees only 136 returned the filled in questionnaires and of them 134 only were found useful for the analysis. Statistical tools used 1) One sample t-test is applied to obtain the predominant factors of climate and significant difference among them in the study. Totally 220 employees are selected on proportionate random sampling method. 5 . career advancement. 1 – Strongly Disagree. working 2. 2) One-way analysis of variance is used to find the influence of demographic variables on consumer behaviour. training and development. 14. 2. These climate statements are posed according to the nature of executives. practice of HRD elements in the organization and their determination about organizational goals.Strongly Agree. 3. There is no significant impact of elements of HRD on the HRD climate. Besides these questions certain personal demographic variables. 16. Level of satisfaction of various determinants of Organizational climate In this study the various determinants like recruitment and selection. Sample size Sample that is chosen for the study covers all parts management of IT companies in Chennai. The opinions of these above mentioned executives are sort through the questionnaire comprising 5 point scales. So three questionnaires are formed for top. 3) Factor analysis and cluster analysis are applied to obtain the factors of HRD climate and classification of employees. They are : 1. needs.. and Total Experience are introduced in the questionnaire. These personal interviews gave useful and perfect information for further statistical analysis. 4 – Agree. Middle and Lower. Hypotheses 1. questions are asked to the executives according to their limitations. For all the three executives are asked to express their opinions about elements of HRD climate. middle and lower level executives. Methodology The objectives of the study are based on three level executives Top. 12. wages and allowances. Educational Qualification. To study the existence of different objectives of organizational climate in IT industry. This information got through questionnaire and also interacting personally with all levels of executives in IT companies. To analyze organizational climate suitable for the HRD objectives. The demographic variables Age. 13. 15.177 SRM Management Digest . The data collected from the executives are subjected to statistical analysis to give torrent of results regarding HRD practices in IT companies. 17. are given to the respective executives. Objectives of the Study The following are the core objectives of the study. welfare and social security. Out of the sample. Salary. Different levels of management are independent of different HRD climate. Hence. the exact sample of the study was 134.2010 through above mentioned HRD mechanisms. promotion. 3 – Medium Agree nor Disagree 2 – Disagree. In order to determine the HRD climate the HRD climate statements. and practices of HRD in IT companies. They are also asked to express their views on the effect of .

4000 3. The respondents are requested to express their opinion in 5-point scale ranging from 1-stronglydisagree.1 One-Sample Statistics for various determinants of Organizational climate Mean LOS1 LOS2 LOS3 LOS4 LOS5 LOS6 LOS7 LOS8 LOS9 LOS10 LOS11 LOS12 LOS13 LOS14 LOS15 LOS16 LOS17 LOS18 3. 2.07429 .05096 . grievances handling as such in the questionnaire have been considered.7700 3.80428 . human relations. standard of safety. Error Mean . Deviation .44256 .58422 .07833 .disagree and 3-neutral.07870 . style of leadership.06423 . performance appraisal.06887 .07521 .05842 .74291 .05599 .6600 3.77434 .04426 .1400 3.4500 3.4400 3.78335 .4200 Std. level of workers participation.05946 .78695 .08043 .75210 . The significance with the test value 2 is presented in the table.3500 3.57516 .5400 3.7000 3.6400 3.44256 .SRM Management Digest . recognition of merit.06995 . collective bargaining.68873 . So a one-sample t-test is applied and following results are obtained.05168 .2010 178 condition.8100 3.0800 3.04426 .05752 .3700 3.64228 .6100 3.8100 3.50960 .59459 .4800 3.55994 .07132 It is observed from one-sample statistics table that the mean values of determinants of Organizational climate are greater than 2. . Table 4.69949 . communication facilities.3400 3.51679 .07743 . authority and responsibilities. 4-agree and 5-strongly agree. work load.71322 Std.

08000 .77000 .61000 . So it is inferred that the employees in Orchid chemicals are agreed with wages.4126 .2139 .5054 .441 18.000 .2508 . In this study factor analysis has been applied on eighteen variables to determinants of Organizational .3433 .000 .66000 . human relations.81000 .4941 .923 5.5874 .000 . career advancement.7259 .5820 .318 12.40000 .304 .824 11. authority and responsibilities.8180 .14000 .64000 .110 5.7222 .000 .48000 .2336 .45000 .468 1.000 .303 11. welfare and social security.42000 .2 One-Sample Test for various determinants of Organizational climate t Sig.861 15.000 .000 .6689 .7511 .000 .000 .000 .37000 .7222 .889 .5492 . The employees are satisfied with recruitment and selection.70000 .5641 .702 6.000 . Pre-dominant factors of Organizational climate Factor analysis is a multivariate tool generally used to reduce enormous number of variables into major factors. allowances and promotion transfer policies are in significant and remaining values are highly significant.033 1.2012 .179 SRM Management Digest .2926 .4788 .2996 .430 7.8978 .34000 .408 18.000 .0736 -. (2-tailed) Mean Difference 95% Confidence Interval of the Difference Lower Upper .741 10.000 .6674 .2785 From the above table it is found that mean values of wages.771 8. 18.773 5.000 .3359 .969 4. grievances handling. performance appraisal. promotion. collective bargaining.1946 -. work load. recognition of merit.35000 . style of leadership. wages and allowances.44000 . allowances and promotion transfer.5289 . level of workers participation.8978 . working condition.7625 .8711 .6167 . training and development.2010 Table 4.303 4.000 .0196 .5615 LOS1 LOS2 LOS3 LOS4 LOS5 LOS6 LOS7 LOS8 LOS9 LOS10 LOS11 LOS12 LOS13 LOS14 LOS15 LOS16 LOS17 LOS18 4.81000 .000 . communication facilities. standard of safety.5261 .54000 .5575 .085 .

351 .101 .564 .950 1.699 88.708 2.996 4.130 .470 .739 35.493 94.583 .767 100.282 95.239 2.514 .392 .543 92. The variables loading in each factor is established in the table. .527 74.2010 180 climate and the results are displayed in the table.720 .365 90.318 1.292 1.014 98.413 4. which is statistically significant.734 99.933 % of Variance Cumulative % 35.460 85.771 .085 .115 69.527 percent of total variance.SRM Management Digest .829 10. Table 4.297 99.527 Extraction Method: Principal Component Analysis.695 97.666 2.413 1.013 98.735 8.180 .380 61.658 .042 Initial Eigenvalues % of Variance 48.899 . From the above table it is found that the eighteen variables explain 69.178 1.789 69.480 .322 .380 12.109 1.789 1.000 Rotation Sums of Squared Loadings Total 6.473 4.3 Total Variance Explained Pre-dominant factors of Organizational climate Component Total 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 8.233 Cumulative % 48.237 .000 .959 58.523 78.655 3.282 3.254 .805 82.959 22.

181 SRM Management Digest .581 .787 .876 .842 .4 Rotated Component Matrix for Pre-dominant factors of Organizational climate Component 1 LOS3 LOS1 LOS11 LOS17 LOS6 LOS18 LOS15 LOS4 LOS2 LOS5 LOS8 LOS12 LOS13 LOS16 LOS7 LOS14 LOS10 LOS9 .746 . Factor one consists of the variables: Career advancement avenue (.753 .747 .793 .885 .728 .793) Welfare social security (. Rotation Method: Varimax with Kaiser Normalization.759 .729 .753) Recognition of merit (.729 .699 2 3 Extraction Method: Principal Component Analysis.517 .759) Grievances Handling Procedure (.838) Performance appraisal process (. Rotation converged in 4 iterations.828) Human relation (.2010 Table 4.728) .885) Recruitment and selection process (.828 .746) Wages and allowances (.828 .838 .729) Training and development (.

career advancement. It is inferred that the employees are satisfied with recognition and facilities and they are highly satisfied with work place. 19. Factor three comprises the variables Standard of safety (. Findings The employees in IT industry are agreed with wages. So it is concluded that on the whole the employees possess good organizational climate in Orchid chemicals. collective bargaining. working condition. style of leadership. safety and negotiation and strongly agree with encouraging development.It is concluded that the main objectives of organizational climate of IT industry are encouraging developments and facilities and relationships.2010 182 Promotion transfer policy (. performance appraisal. recognition. standard of safety. work load. Safety and negotiation.787) Authority and responsibilities (. promotion. Conclusions The organizational climate in IT companies It is found that the demographic variables like education. training and development. and encouragement. 21. They demand safety and negotiable settlements to their problems. The employees expect a conducive climate to offer refined culture. They demand safety and negotiable settlements to their problems. level of workers participation. performance appraisal and organizational development for the smooth conduct of organization. allowances and promotion transfer. work environment.747) Working condition (. It is concluded that the Organizational climate of employees in IT industry depends upon .699) Therefore it is suitably called as Safety and negotiation So it is concluded that the Organizational climate of employees in Orchid chemicals depends upon the major factors organizational culture. age. human relations.517) So this factor is identified as work environment. salary and experience for all level executives in the IT sector organizations are satisfactory and especially the experience of the employees force the executives to practice HRD to avoid unnecessary impediments to developmental activities. Factor two has been formed through these variables Level of workers participation (. with pleasant work atmosphere. The top-level executives are very much enthusiastic in implementing the HRD elements. work environment. communication facilities. wages and allowances. interpersonal relationship opportunities and team spirit in the organization. with pleasant work atmosphere. work environment and safe negotiation and just agree with encouraging development and facilities and relationship. welfare and social security.876) Collective Bargaining Process (.828) Work load (. grievances handling. The employees expect a conducive climate to offer refined culture.581) So this factor is named as organizational culture. the major factors organizational culture. Remaining 39 percent are poorly satisfied with organizational culture.SRM Management Digest . . It is found that 61 percent of the employees are highly satisfied with organizational culture. authority and responsibilities. Safety and negotiation.729) Communication facilities (. facilities and relationship in the organization. work environment. recognition of merit. management policy in favour of HRD.842) Style of leadership (. sharing of opinions. The employees are satisfied with recruitment and selection. 20. organizational objectives.

culture. Sr. citizenship. these factors are beyond the scope of this study. experience. reducing stress. they are more energized and motivate.. • People often decide if they can trust someone by examining the emotions they feel toward that person. it was observed that employees who experience greater trust report less stress and burnout.. emotional exhaustion. Humor plays an important role in reducing the potentially negative impact of jobrelated stress and emotional labour . College.. occupation. The trust in the supervisor and trust in coworkers can have a significant positive impact on organizational outcomes including greater productivity.. behavior commitment. they will be more likely to trust others. Lecturer Panimalar Engg.g. Chennai Dr. managers have become increasingly concerned with finding ways to increase the likelihood that employees will display appropriate emotions as well as to reduce the negative consequences of emotional labour (i. Mahalakshmi. • By building trust and • Creating opportunities for employees to have happiness at work.. however. perceived team performance. There are three reasons why emotions are a fundamental aspect of the experience of trust. There are undoubtedly individual (e.183 SRM Management Digest . person-job fit) and organizational (e. . Variables The model includes two variables (job satisfaction and emotional exhaustion) and three antecedents: • emotional labour • experienced fun. Chennai 1.The experiencing positive emotions has positive health consequence. College. get along together better. • The emotional people experience during • interpersonal interactions may colour their experience of trust such that if they are experiencing positive emotions.g. At least one third of the workers experienced emotionally laden job situations. and turnover). employees are continually faced with emotionally charged encounters requiring specific emotional display. Introduction In an organization. a core component of burnout has in fact found to be a strong predictor of turnover. social support) factors that • may influence trust. Proponents of happiness at work claim that when people have fun doing their jobs.e. and team satisfaction . personality. Chitra. From the findings.The employees who have greater trust in their manager have less stress and burnout. V. Thus. fun (happiness). provide better customer service experience less stress. The emotional labour or displaying organizationally sanctioned emotions to customers and is directly related to customer evaluations. The workplace happiness is an essential characteristic for enhancing employee motivation and productivity. and • Trust.2010 HOW TO MANAGE WORKPLACE EMOTIONS – AN EMPIRICAL STUDY D. There are two ways that managers may address these concerns. Individuals typically experience strong negative emotions when violations of trust occur. and increasing customer satisfaction. 2. team member cooperation. emotional labour and emotional exhaustion. Emotional exhaustion. Demands for emotional labour have also been found to have a negative impact on emotional exhaustion and wellbeing. age. employee health problems. HOD & Dean Panimalar Engg. gender.

H2: Respondents who express greater negative emotions on the job will report greater emotional exhaustion. Job satisfaction Job satisfaction has been found to be adversely affected by job-related stress and burnout . in turn. The resultant improvement in the quality of social interactions. Emotional exhaustion has been found to be a common phenomenon in helping and caring workers. whereas displaying or amplifying pleasant emotions increased job satisfaction. the lower their job satisfaction. make regulation of emotional expression labor-intensive.SRM Management Digest . it is found that the suppression of unpleasant emotions led to decreases in job satisfaction. The greater the expression of positive emotions by respondents. However. H4: H5: 6. the higher their job satisfaction. high emotional labour was positively related to job satisfaction. but one’s perceptions of the emotions as being inauthentic. the lower their job satisfaction. intensity. 5. H1: Respondents who report greater emotional dissonance will also report greater emotional exhaustion. 4.2010 184 3. Emotional Exhaustion Emotional exhaustion is regarded as the core component of job burnout. as well as the emotional dissonance experienced by the human service provider. In contrast. There is a negative relationship between emotional labour and job satisfaction. and only emotional dissonance was related to job dissatisfaction. The suppressing and faking either positive or negative emotions was significantly related to emotional exhaustion. While emotional labour has been conceptualized as having multiple dimensions including dissonance. Emotional dissonance or the conflict between genuinely felt emotions and organizationally or professionally sanctioned emotions. variety.It involves the experience of joy or amusement it follows that employees who experience more fun on their job will also feel more positively . It is proposed that both the intensity of emotion and the range or varieties of emotions are important dimensions of emotional labour. It is determined by both the frequency and duration of interaction between the human service provider and the recipient. It is concluded that the display of pleasant emotions by customer service providers begets agreeable behavior among customers. whereas the genuine experience of negative emotions was significantly related to emotional exhaustion. places more burden on an individual to display organizationally or professionally sanctioned emotion. Emotional Labour Emotional labour has been defined as a process of emotion management whereby individuals control their true emotions by displaying what they perceive as “acceptable” workplace behaviors and emotions. The greater the expression of negative emotions by respondents. It is characterized by feelings of tiredness and fatigue. a lack of energy and the depletion of an individual’s emotional resources. has a positive effect on job satisfaction H3: The greater the emotional dissonance experienced by respondents.It is found that workload was negatively related to burnout and job satisfaction. duration. Experienced Fun (happiness) Experienced fun (happiness) is the extent to which a person perceives the existence of fun in their workplace . The emotional labour is a multidimensional construct. the genuine experience of positive emotions was not significantly related to emotional exhaustion. particularly external stakeholders. and frequency it is found that only one component of emotional labour--emotional dissonance--was associated with higher emotional exhaustion and lower job satisfaction. It is not emotional labour itself that is distressing. Frequency of contact with others.

provide help on the job).185 SRM Management Digest . be sympathetic) and instrumentally supportive (i. In the presence of untrustworthy coworkers or supervisors. truthful. intent to quit). favorable.e. employees are likely to experience negative emotions. Similarly. it is likely that the relationship between trust and fun is reciprocal such that a certain level of trust is necessary in order to experience fun. 7. H8: There will be a negative relationship between trust in one’s manager and emotional exhaustion. employees should experience fewer overloads and less anxiety when they have trustworthy coworkers. That is. . The trust in leadership was most strongly related to attitudinal variables (e. followed by citizenship behavior.e.. job satisfaction. or at least not detrimental to one’s interests” When trust is high. and have good intentions . H9: There will be a negative relationship between trust in one’s coworkers and emotional exhaustion. H6: There will be a positive relationship between experienced fun and job satisfaction. however.It is possible. fair. consistent. honest. Trust and Experienced Fun (happiness) The level of trust that individuals have in their manager and co-workers is likely to influence the extent to which they experience fun in the workplace. organizational commitment. The workplace experiences which are accompanied by positive emotions will lead to positive interpersonal exchanges and the building of greater trust. H7: There will be a negative relationship between experienced fun and emotional exhaustion. assumptions. The humor plays an important role in reducing the potentially negative impact of jobrelated stress and emotional labour. The individuals who experience more fun at work will be less likely to experience emotional exhaustion. The employees who have greater trust in their manager report have less stress and burnout. In sum.. Trust Trust involves a person’s “expectations. that the level of trust that one has in his or her manager and co-workers may not be the same.g. When two or more people share in an amusing experience. individuals who have greater trust in their co-workers should experience lower emotional exhaustion. Those with higher trust in their manager and in their co-workers would be happier in their job. and finally job performance: H10: There will be a positive relationship between trust in one’s manager and job satisfaction. H11: There will be a positive relationship between trust in one’s coworkers and job satisfaction. they experience less stress. Thus. or beliefs about the likelihood that another’s future actions will be beneficial. H13: There will be a positive relationship between experienced fun and trust in the peers. The proponents of happiness claim that when people have fun doing their jobs. they will experience greater job satisfaction. The reason for this is that employees who have a high degree of trust in management may be less likely to fear punitive repercussions and more likely to feel that management will be both emotionally supportive (i.. the more they will trust those with whom they are having fun: H12: There will be a positive relationship between experienced fun and trust in one’s supervisor. employees believe their supervisor and coworkers are open. The emotions people experience during interpersonal interactions may color their experience of trust such that if they are experiencing positive emotions. and the more employees experience fun. 8. they will be more likely to trust others. there is a commonality or bond created among them.2010 about their job.

7= 5 times a week or more). marital status. job tenure. 1=strongly Disagree. age.. The emotional labour measure consisted of three parts: • Requirement to display positive emotions. Using a 7. making small talk). respondents were instructed to indicate the frequency with which they felt a particular emotion. Examples of items from the positive scale include: • “I frequently reassure people who are distressed or upset” and • “I usually have to express friendly emotions (e. 2=less than 12 times a year.2010 186 9. . The Emotion Work Requirements Scale (EWRS) was used to measure work requirements to express positive and negative emotions. the mean age was 30 years. • requirement to display negative emotions. Work-related emotions The work-related emotions included measures of emotional labour and emotional exhaustion. • Demographic information was tapped through single item questions. 5= strongly Agree).80 for this three-item scale was used. The alpha of . 5=once a week. • work-related beliefs and attitudes. and • Demographics. Methodology Census Survey was used to collect data from 142 employees. with the remaining portion holding various administrative positions.SRM Management Digest . giving compliments. smiling. and type of employer. • About 40% of the sample consisted of managers. including gender.89 for this six item measure was used. The mean number of years in the current position was 3 years. • Although respondents ranged in age from 20 to 59. The co-efficient alpha of . 10. The major findings can be summarized as follows: • Most of the respondents (72%) were female and 54% were married.07). A non-disguised structured questionnaire was designed and distributed among 142 employees. 6=2 to 4 times a week. and • Emotional dissonance. education. Emotional exhaustion was measured using six items. Two items were added that assess the frequency of emotional dissonance experienced by respondents: • “I spend most of my work day hiding my true emotions” and • “I spend most of my work day faking positive emotions.point scale (1=never. 3= once a month.” Each item was rated on a 6-point scale (0=Not Applicable. 5= strongly Agree). job title.” For each item.g. 4=more than once a month but less than once a week. respondents were asked to indicate their level of agreement using a 6-point scale (0=Not Applicable.” The two items adapted from the negative scale of the EWRS were: • “I frequently have to hide my anger or disapproval about something someone has said or done” and • “I often hide my disgust over something someone has said or done.” : • “I usually have to tell people things they don’t want to hear” and • “I ordinarily have to attempt to get people to do things they don’t want to do. with 7 years (SD = 7. The survey consisted of three sections: • Work-related emotions. 1=strongly Disagree. Four items measured requirement to display positive emotions and four items measured requirement to display negative emotions.

66) . SD=.87) -.88) -.87 (second administration).82 (first administration) and . (2) Job satisfaction.00 .20 . experienced fun.2010 11.70) and respondents did not experience high levels of emotional dissonance (M=2. SD=.00 . Sample items include: • “At my workplace.52*** (. (3) Trust in one’s supervisor.24** -.38*** -. “In general. • “Managers encourage employees to have fun at work” and • “We laugh a lot at my workplace.62 on a 5-point scale) and did not experience high levels of emotional exhaustion (M=3.62 3.63). and Correlations for Variables Measuring Work-related Emotions and Attitudes. although there was a considerable amount of variation in emotional exhaustion (SD = 1. 18. Positive Emotion Requirements 2.15 3.77 on a 7-point scale).01 . standard deviations.46*** (.35*** -. Sample items include: • • • “I can expect my supervisor to treat me in a consistent and predictable fashion”.16.86 .72) .83.57*** (.62 .30*** . Trust in Supervisor 6. SD=. Positive emotional work requirements were experienced (M=3.46*** (. Work-related beliefs and attitudes The work-related beliefs and attitudes section consisted of four measures: (1) Level of fun experienced at work. Emotional Exhaustion 8. Coefficient alpha of . and job satisfaction.24** . Standard Deviation. Trust in Coworkers 7.187 SRM Management Digest .76 3.” The same 7 items were used to measure trust in one’s coworkers with the word “coworkers” substituted for “supervisor”.14 -. Sample items include: • “I feel fairly satisfied with my present job.26** (.30*** -.56 3.10 .61 1. and (4) Trust in one’s coworkers.” and • “Each day at work seems like it will never end.87) -.58 .” Trust in one’s supervisor was measured using a 7-item measured. Job Satisfaction Mean 3.24** -. The mean scores indicate that respondents were generally satisfied with their jobs (M=3.95.70 . “My supervisor is not always honest and truthful (R)”. Experienced Fun 5.75).30*** .12 .86) 2 3 4 5 6 7 8 .58) more than negative emotional work requirements (M=2.7. SD=.63 1 (.79) .78 3. SD=.96 2. correlations.00 (. Variables 1.24** (. and reliability coefficients for the variables measuring work-related emotions. we try to have fun whenever we can”.88 was reported for this reduced 5-item measure. I believe my supervisor’s motives and intentions are good. Respondents experienced a moderate level of fun in their workplaces (M=3.46*** -. Mean. Table 1.83 2. Reliability Estimates. Negative Emotion Requirements 3. Emotional Dissonance 4. It reported a coefficient alpha for this measure of .78 .28** -.51.21** . The level of fun experienced at work was measured using 5 items.19* .50*** .” Job satisfaction was measured using 5 items job satisfaction index.34*** . Results Table 1 contains the mean scores.36*** -.2).69 SD .91) .

001. p<. However. thereby supporting both hypotheses 3 and 4. respectively).19. Consistent with study a significant positive relationship between emotional dissonance and emotional exhaustion (r = .35.62. respectively).001. p< . The positive and negative emotional dissonance displays on emotional exhaustion and job satisfaction. positive emotional work requirements were not found to be significantly related to job satisfaction. providing support for both hypotheses 12 and 13. For these analyses.46.It is found that trust in one’s supervisor and one’s co-workers were positively related to job satisfaction (r = . 10 and 11 were supported. trust in one’s supervisor and trust in one’s coworkers were both related to experienced fun (r = . Beta = . Beta = .001.05. p<.001.36. respondents modestly agreed that they could trust their coworkers (M=3. The regression results showed that both experienced fun and emotional labour made unique and significant contributions to the explained variance in emotional exhaustion (Beta = -. As predicted. Similarly. Thus. The composite score consisted of the average of the ratings for 13 items: • The five emotional dissonance items and the eight items used to measure positive and negative emotional work requirements. p<. These findings provide support for hypotheses 1 and 2. r = . those participants who experienced greater work requirements to express negative emotions had greater emotional exhaustion (r = .01.36. these correlations were significant (r = -. Beta = . The amount of additional variance explained by either the positive or negative emotional work requirements was not significant.05.01. SD=.2010 188 In general.89.26. The multiple regression analysis showed that only emotional dissonance was a significant predictor of job satisfaction and emotional exhaustion (Beta = -.57. a composite measure of emotional labour has been created.01.21. p<.24.000). As predicted.001.001.01). It is predicted that respondents who experience greater levels of happiness would report higher levels of job satisfaction (hypothesis 6) and lower levels of emotional exhaustion (hypothesis 7). Emotional dissonance and negative emotional work requirements were hypothesized to be negatively related to job satisfaction.001. and r = -. • Respondents who reported higher levels of trust in their coworkers and their supervisor reported lower levels of emotional exhaustion and higher levels of job satisfaction. respectively). Beta = .22. The coefficient alpha for this composite measure was .78).40.24. r = . trust in supervisor and trust in coworkers made unique and significant contributions to the explained variance (Beta = . those who .24.50. p< .52.001 and r = -. In order to examine the combined effects of antecedent variables on the outcome variables. 9.46. p<.61) and their supervisors (M=3. The amount of additional variance explained by trust in supervisor and trust in coworkers was not significant. Correlations were used to test all hypotheses.05.21. p<. The results show both trust and workplace fun may have beneficial effects in the management of workplace emotions. As predicted.29. two step-wise multiple regression analyses are conducted. p<. failing to provide support for hypothesis 5. p< .34. Both of these hypotheses were supported (r = . respectively). p<. respectively). all three variables of experienced fun (happiness).001. p<. When job satisfaction was the dependent variable. p<. p< . The amount of additional variance explained by emotional labour was not significant. p< . respectively . p< . p<.SRM Management Digest .A significant negative correlation between trust in one’s supervisor and emotional exhaustion (r = -. respectively).56. hypotheses 8. p< . SD=. p< .05) and trust in one’s coworkers and emotional exhaustion (r = -.001.

) and demonstration of concern . C. trust may be a precondition for fun. That is. celebrating birthdays. 57-62.. Journal of Applied Biobehavioral Research. It follows that certain types of fun activities may be more successful than others depending on the level of trust in the organization. Chan. Brotheridge. sharing and delegation of control. K. R. Roe.As the employees are satisfied they work effectively and they will be empowered in the organisation 20. parties. European Journal of Work & Organizational Psychology. C. These findings represent an important preliminary step in understanding the value of workplace fun(happiness) and trust in reducing emotional exhaustion . (2003). Trust within teams: The relation with performance effectiveness. Thus. .. A. D. (2000). R. Thus. with cake and ice cream. C.g. & Steiner. C. References 1.It has also been suggested that HR policies and practices (e. Clearly. A key concern for managers involves finding ways to build trust in the workplace. Costa. The experienced fun is significantly related to trust in one’s supervisor and trust in one’s coworkers. moods and emotions that are necessary for building trust. 24 (2). Employee happiness and corporate financial performance. Brennan. 19. The Journal for Quality & Participation. 10 (3). fair performance appraisals) have a positive impact on trust The development of trust is a function of an organization’s ability to create a setting within which trust can develop over time. these are two important elements for maintaining a positive work environment. 5.. 3. providing gifts during festivals. organizations with low levels of trust may find that the introduction of fun activities in the workplace results in resistance and cynicism.. T. 365-379. K.. when organizations provide opportunities for employees to have fun at work (e. Development and validation of the Emotional Labour Scale. R. It is suggested that workplace fun maybe an effective means of creating the positive attitudes. T. 225-244. Moreover. communication (e. For example. (2001).2010 experienced higher levels of fun in the workplace reported lower levels of emotional exhaustion and higher levels of job satisfaction. 76 (3). Journal of Occupational & Organizational Psychology. Gareis.. The. T. employees will perceive those organizations as committed to and supportive of them and they will reciprocate by providing their own commitment to the organization. 4(2). taking them for a tour along with their families may be effective in both high trust and low trust workplaces because these are perceived by most people as comfort foods. equitable reward systems. Berg... A. explanations. 10(2). R. awards. behavioral integrity. 65-78. T.g. 4.189 SRM Management Digest . games. accuracy. Another explanation for the positive relationship between experienced fun and trust--a certain level of trust may be necessary in order for employees to experience fun.. 47-53. high levels of trust were associated with higher levels of experienced fun. the power of a playful spirit at work. Those celebrations may help to promote the positive moods and emotions and social interactions and exchanges that are necessary for building trust. (2001). . & Taillieu. managerial trustworthiness can be influenced through behavioral consistency. M. 2. (1999). Financial Practice & Education. Gee. The employees give general perceptions about the intentions and attitudes of the organization towards them from the policies and procedures enacted by individuals and agents of the organization.g. & Lee. special events).M. Barnett. Conclusion It is found that both experienced fun and trust were associated with lower levels of emotional exhaustion. H.

Antecedents of workplace emotional labor dimensions and moderators of their effects on physical. 27(5): 515-535. Do high commitment human resource practices affect employee commitment? A cross-level analysis using hierarchical linear modeling. A. Journal of Social Work Practice. 335-49. 77(9). McGhee. A.. Academy of Management Journal. Waldrop. 21. 13. Journal of Management. J. 149-159. (2000). Brodt. Emotion regulation in the workplace: A new way to conceptualize emotional labor. 7.Why is this happening? A causal attribution approach to work exhaustion consequences. A. S. & Cropanzano. M. Trust in the face of conflict: The role of managerial trustworthy behavior and organizational context. Grandey. E. (2000).M. C.. antecedents. 14. 17. Whitener. 15. 11(6). Moore. 2. retention. (2002). M. J. Feldman. 14 (1). 8. The key to stress management. (1993). (1996). 5-6. Morris. Journal of Applied Psychology. R. 9. 989-1010. 18 (3). 457-486.M.. 14(2). 87(2). 10. Managing emotions on the job and at home: Understanding the consequences of multiple emotional. and consequences of emotional labor. Gorman. Schaubroeck. A. 9 (3). & Jones. J. E. Weiss. Affective events theory: A theoretical discussion of the structure. Academy of Management Review. & Erickson. Managing emotions in the workplace. & Whitener.2010 190 6. Feldman. Journal of Managerial Issues. S.SRM Management Digest . Exploring the dimensions of emotional labor. 18. (1996). 21(2). 312-319. D. Journal of Organizational Behavior.. R. 257-274. Management Communication Quarterly. HR Focus. A. Kruml. J. 95-100. S. S. (2000). 163-183. causes and consequences of affective experiences at work. Journal of Occupational Health Psychology. E. . (2000). H. . 18. E. H. Winning hearts and minds? Emotional labour and learning for care management work. (2003). P. 16. J. J. 25. R. C. Research in Organizational Behavior. Academy of Management Review. (2001). Wharton. D. 1–79. D.. (1997).. 11. 12. & Geddes. (2000). Physical Therapy. 5. and profitability? More workplace fun. The dimensions. A. Korsgaard. Morris. (2000). Battling burnout: Maintaining enthusiasm in a challenging environment. 8-49.. 38-46.

2010 EMERGING TREND IN INDIAN PHARMACEUTICAL RETAIL SECTOR V. Most of the Tulsi outlets are located in Big Bazaar.Importance of branded pharmaceuticals -Revolution of packing of products. with over 720 outlets in 17 states. Twelve to fifteen. Apollo will have 1000 pharmacies by the end of financial year 2008-09.. Alterations in people’s lifestyle. The relaxation by the government on regulatory controls on foreign direct investments has added to the process of the growth of the Indian organized retail sector. The emerging trend in the Indian pharmaceutical retail sector is also adding up to the development of the Indian organized retail sector. Med Plus Health Services: Hyderabad based pharmacy chain. Life Ken: promoted by Lifetime Healthcare Pvt Ltd . It operates under two models . MedPlus was launched in 2006 currently operates more than 500 stores in Andhra Pradesh. and encouraging conventions of demography are proving favorable for the new emerging trends in the Indian organized retail sector. Indian Pharmaceutical Retail Market The current pharmacy retail market size is estimated to be of US$ 5 billion and it is expected to grow to US$ 8.2 mn in Med Plus. There are more than 3500 organized retail pharmacy outlets in India and it is expected to grow to 10. Karnataka.S.Sheeja Dr. Apollo Pharmacy: A division of Apollo Hospitals Enterprises Ltd.International Quality Certification and is open for 24 hours.R. Currently Fortis has around 40 stores and planning to expand its presence to over 100 cities.livemint. 6000 in a year.Krishnaraj SRM School of Management SRM University. Mauritius based iLabs Management LLC has invested $5. Apollo pharmacy is accredited with . It is giving free health insurance on purchase of above Rs. Tamil Nadu.000 by the end of 2010. Kattankulathur 1. is India’s first and largest branded network.7 billion by 2010. Fortis Health world: Pharmacy chain promoted by the Singh family of Ranbaxy. Tulsi: Tulsi is a pharmacy retail chain of Future Group.Company owned and operated stores and Franchisee owned stores.com). Introduction Pharmaceutical retailing has been spreading its roots in the Indian market for the past one decade. Gujarat and Rajasthan and plans to increase it to 1000 by March 2009. The Pharmaceutical retailing is becoming highly mechanized and organized day by day due to following factors: -Concept of franchising -Increase role of information technology in retail marketing. -Trends like collaborating with the manufacturer -Increase utilization of multiple sourcing -Visual merchandising and its role in retailing -Attractive post purchase Service 2. Pharmacy retail is growing at the rate of 20-25 per cent annually. (www. . big players dominate the organized pharmacy retail chain. The growth of the Indian organized retail sector is anticipated to be heavier than the growth of the gross domestic product. Future Group currently has over 35 Tulsi outlets across the country. growth in income levels.191 SRM Management Digest . Maharashtra.

Hyderabad and Kochi and is also set to expand to other cities in the South and West and then to North and East. Modes of Operation Company Managed Stores . A pharmacy chain operating in Delhi and NCR is a brand of Global Health line. New-u. 4.They catered mainly to the requirements of patients admitted in the hospital. of having in-store outlets at supermarkets or departmental stores is the fact that popularity of either brand rubs off on the other. Pune and Chennai. There are more than 30 CRS Health stores in India. is located in Malls. The CRS Health stores have representation in all major centres in India to include Delhi. Foreign Player Medicine Shoppe. Medicine Shoppe operates through the model of franchisee stores in India. Guardian pharmacy recently signed an agreement to open outlets at Spencer’s stores in east India and is negotiating rights for northern India too.the Wellbeing Place. 98. Apollo. Life Ken operates in total 82 Stores in Bangalore.Many pharmacy chains are planning to set up their pharmacy chain in townships. Ltd is North India’s largest retail chain of Pharmacy. Townships . CRS Health. The average size of such stores is 150-200 sq. The target customers of the store were the educated middle and upper class households Malls/Shop-in-shops . Its store brand.100 crore to fund our expansion. They were housed in the hospital building and dispense a limited number of medicines. Spencer’s has tie-up with Life Ken Medicines for store-instores at its Daily stores in the South. Pune. Major pharmacy chains in India like Fortis. Noida. Alchemist. 3. 11 Pill and Powder Stores and 7 stores in Spencer’s Stores in Bangalore. 5. Wellness. SAK Industries. Guardian Life care Pvt.Company owned pharmacy outlets are owned and manage by company itself. the Indian arm of global chain Medicine Shoppe International started its operations in India in February 1999. Some of these stores offered home delivery. Life Ken is planning to open new retail pharmaceutical chain in the cities of Mumbai. The list comprises 37 Life Ken Stores. 98. Chennai and Mumbai. SAK CRS: SAK Consumer Retail Services Ltd is a subsidiary of Delhi based business group. near the residential areas. Apollo is planning to set up Medicity near Pune.SRM Management Digest . Guardian Life care plans to open another 150 new stores across India by March 2009 and Guardian chain will grow to 400 stores by March 2010 and will be investing Rs.The second category of stores. It has 27 stores in India and is expected to ramp up the count to 300 by 2011.4 has 27 stores in India and is expected to ramp up the count to 300 by 2011. Med Plus. retail outlet of H&B Stores Ltd. most retailers’ say. Pharmacy Chain Formats Hospital Pharmacies .The biggest advantage.Medicine Shoppe.2010 192 is a leading Pharmacy Retail chain in Bangalore and Chennai. is one of India’s premier Retail Pharmacy brands. Apollo has . Franchisee . The company has 149 outlets in 16 cities. Medicine Shoppe follows the model of franchisee stores in India. Parent company has presence in Europe and the Middle East.4: a pharmacy chain operating in Delhi and NCR is a brand of Global Health line. Parent company has presence in Europe and the Middle East. Gurgaon. Subhiksha and Dial for Health have their own pharmacy chains. provide the benefits of proximity to consumers. Health and Beauty Retail outlets. ft Retail Stores/Standalone stores .

Hence. Any pharmaceutical company would like to know which of its medicines and in what quantity are being sold on any given day. The potential is huge and the scenario is similar to what happened in traditional retail. Conclusion The ambience. things are slowly changing in the pharma retail space. effective retail outlet positioning HR training and retention strategies along with reduced shrinkage and pilferage 5. This is because the unorganized retail segment is not capable of capturing and sending back real time data to the pharmaceutical company like their organized counterparts.com). 6. There is clearly a consumer-driven requirement for pharmacy chains. process and services. where consumers typically go and get medicines from the same neighborhood shop. such as good bargains. To ensure quality effectiveness and success of retail practices. value added services such as diagnostics and lab facilities will . Today.retail. eventually the economics at the end of the day would drive the decision for a large MNC or domestic player in favor of an organized retail chain. how it can manage its inventory.2010 signed an agreement with Hindustan Construction Co (HCC) to set up the Medicity inside the upcoming project named Lavasa near Pune. discounts.Genuine medicines -Competent professional staff . chemists or pharmacists have adopted a neighborhood centric model. The regulatory and the union-driven issues will always be there. like the ability to provide real time data that will probably give them an edge over the unorganized sector. convenience of location will be an important success factor for retail pharmacy chains. (www.Emergency services . what should be its pricing and which regions are doing better than the others. In addition to counterfeiting. This data will be effectively captured and transmitted by the organized players once they have a national presence and considerable investments in IT. Pantaloons and Shoppers Stop. Nobody thought that people would want to go and buy everything from one place like Big Bazaar. and Guardian and Trust pharmacy chain are phenomenal as they are adding three-four outlets every month. Opportunities in Retail Sector Retail pharmacies are waiting to take off. retail chains like Apollo have an all-India presence through 300 odd outlets. Consumers want to ensure that the medicines that they buy are not fake or spurious. ready availability of drugs. But I guess. ensuring the quality of medicines and avoiding retail substitution will also ensure the growth of retail chains. reliability. increasing brand awareness. Other factors.Advanced biogeneric products -Customer care via patient counseling -Prescription reminder services -Refilling prescription on phone call/e-mail -Cash facility -Computer generated receipts -Cold chain maintenance Pharmaceutical companies will prefer large organized retail outlets since it will make distribution easier for them &better networking for getting feedback. The growth rates of other chains like Medicine Shoppe. Similarly. Coming days will see a number of players emerging and a lot of consolidation happening. adequate capital investment. Organized Pharma retailing is customer centric activity with due stress on innovation on products. and more importantly price discounts based on economies of sale in procurement that they enjoy. the emphasis should laid on a reliable supply chain management. it is also the location that is an important issue. The advantages of the organized players. Traditionally.193 SRM Management Digest . The innovative & globally accepted trends that are attracting customers towards organized Vs unorganized fragmented retail sector are . quality consciousness that chains can offer.

Accessed on 2nd December. Accessed 5th December.businessinsights.SRM Management Digest . 7.livemint.retail.com. Accessed on 5th December.2010 194 ensure the pharmaceutical retail chains to spur customer migration to organized retailers. 2009 www.com.com. Organized retail sector have transformed the concept of a medical store in to a professionally structured and managed organization and will further highlight the trends shaping the future of organized pharmaceutical retail scenario in India. 2009 . 2009 www. Reference www.

researcher on customer satisfaction and attitudinal loyalty is often closely associated with measurement of service quality. Reader. The Narasimhan Committee report suggested wide ranging reforms for the Indian banking sector in 1992 to introduce internationally accepted banking practices and enable Indian banks (which were hitherto resisting liberalization and opening of their markets) to achieve service excellence.195 SRM Management Digest .. About private banks in retail banking Initially all the banks in India were private banks. The quality of services offered will determine customer satisfaction and attitudinal loyalty. S. These parameters have been used in the context of three of the largest private retail banks in India (ICICI. and Bank of Madras. HDFC &AXIS) to identify the underlying dimensions of service quality which determine customer satisfaction and attitudinal loyalty. which were founded in the pre-independence era to cater to the banking needs of the people. Banks of Bengal. drawn from customers’ perceptions about service quality as well as the bank marketing and service quality literature have been drawn up. al 1985) and (Zeithmal et. The financial sector reform in India was designed to infuse “greater competitive vitality in the system”. Dindugul 1. customers perceive very little difference in the banking products offered by private banks dealing in services as any new offering is quickly matched by competitors. As globalization and liberalization of financial institutions accelerate competition among banks in offering products and services becomes more intense. merged to form Imperial Bank of India.Vanjikovan Department of Management Studies. 2. Private Banks dealing in Retail banking is pursuing this strategy.Mahalingam & Mr M. Finally. Introduction Financial liberalization has led to intense competitive pressures and private banks dealing in retail banking are consequently directing their strategies towards increasing service quality level which fosters customer satisfaction and loyalty through improved service quality. Saranathan College of Engineering. Gandhigram University. three major banks i. the Reserve Bank of India (RBI) was established and it took over the . A set of service quality variables. al 1990) noted that the key strategy for the success and survival of any business institution is the deliverance of quality services to customers. Typically. because of the difficulty in differentiating based on the service offering. the paper has drawn upon the findings of the service quality dimensions and its correlation with attitudinal loyalty to contend the initiatives that banks’ managers can take to enhance employees’ skills and attitudes and instill a customer-service culture. To achieve this objective. Studies by (Parasuraman et.2010 AN EMPIRICAL STUDY: INFLUENCE OF SERVICE QUALITY ON ATTITUDINAL LOYALTY IN RETAIL BANKING Asst. Arun Kumar Mr S.e. In 1921. Customers in India become more educated better informed. In 1935. in part. the “Narasimhan Committee” was formed. the demand for high quality services expands with increases in customers’ buying power. Trichy Dr. This paper endeavors’ to fill the gap in the service quality which determine customer satisfaction and attitudinal loyalty literature by exploring the dimensions of customer perceived service quality in the context of the Indian retail banking industry. Tamil Mani. how these dimensions of customer perceived service quality determine customer satisfaction and attitudinal loyalty . For this reason. and as Indian economy becomes more and more knowledge based. Prof. more internalized. Bank of Bombay..B.

ING Vysya Bank. 1993). tangibles. Zeithaml. suggesting that measuring perceptions alone might be a better indicator of service quality. mortgages.2010 196 central banking responsibilities from the Imperial Bank of India.g. Private Banks in India includes leading banks like ICICI Banks. thus. Global Trust Bank was. SBI Commercial and International Bank. such as facilities. transferring commercial banking functions completely to IBI. etc. public sector banks revived to take up leading role in the banking structure. it is not always easy to . etc. which came to be known as New Generation tech-savvy banks. empathy. Then Housing Development Finance Corporation Limited (HDFC) became the first (still existing) to receive an ‘in principle’ approval from the Reserve Bank of India (RBI) to set up a bank in the private sector. Teas. the first private bank after liberalization. “Retail banking is typical massmarket banking where individual customers use local branches of larger commercial banks. Following this. Reliability refers to an organization’s ability to perform the promised service dependably and accurately. and responsiveness.SRM Management Digest . and finally responsiveness refers to employees’ willingness to help customers and to provide prompt services. 2001. Jammu & Kashmir Bank. Karnataka Bank. expectations has been a disputable issue in the literature. empathy refers to employees’ willingness to provide individualized attention to customers. In 1994. Imperial Bank of India was subsequently transformed into State Bank Of India(SBI). Central Bank of India. there have been some researchers (e. Zeithaml et al. who questioned the gap model. Allahabad Bank. One of the most widely used models is the SERVQUAL. Thus. and communication materials. Each dimension is measured with four to five items. In 1980. Services offered include: savings and checking accounts. The measurement of perceptions vs. In the process they have jolted public sector banks out of complacency and forced them to become more competitive. Canara Bank. personal loans. than measuring the differences between expectations and perceptions (Robledo. after the declaration of first-five year plan. The model proposed that service quality is measured by five dimensions: reliability. it was later amalgamated with Oriental Bank of Commerce (OBC). At present. From a methodological point of view. There have been a wide variety of service quality models in the literature. and so” 3. the GOI nationalized 6 more commercial banks.. Kotak Mahindra Bank. credit cards. assurance refers to employees’ knowledge and their ability to convey trust and confidence. identify possible problems. equipment. Review of Literature Zeithaml and Bitner (2003) defined perceived service quality as a global judgment or attitude relating to the superiority of a service. and predict loyalty. Cronin & Taylor. with control over 91% of banking business of India.. assurance. including Punjab National Bank (PNB). which was developed by Parasuraman. debit cards. While it seems logical that identifying the gaps is the best way to define quality. tangibles refers to an organization’s physical environment. In 1955. It is widely accepted today that service quality is a multidimensional concept. (1988). 1996). private banks have played a major role in the development of Indian banking industry. the Reserve Bank of India issued a policy of liberalization to license limited number of private banks. being tech-savvy and full of expertise. and Berry. They have made banking more efficient and customer friendly. Undoubtedly. The model is a useful management tool since it aims to identify the gaps between customers’ expectations and customers’ perceptions of the services. 1992. occurred the nationalization of major banks in India on 19 July 1969. The Government of India issued an ordinance and nationalized the 14 largest commercial banks of India.

Caruana. since strategies can be designed in order to close these gaps. interest rate and Customer complain handling system suggested by the researcher like (Bahia and Nantel.197 SRM Management Digest . . the perceived service quality was hypothesized to have a direct effect on attitudinal loyalty .g. Woodside et al. and attitudinal Loyalty. An application of the SERVQUAL model been suggested that satisfaction is a broader concept than service quality. The importance of measuring service quality evaluations has been well justified in the literature. and compare their answers.2010 adopt the gap approach. 4.Sureshchander 2003) after careful validation by academicians and industry experts and in the case of the Attitudinal measurement domain five variables namely 1)Say positive things about your bank 2)Recommend your bank to someone who seeks your advice 3)Encourage friends and relatives to do business with your bank 4)Consider your bank as your first choice to buy / Transact services and 5)Do more business with your bank in next few years which is explicitly extracted from the Behavioral Intention Battery proposed by (Zeithaml. 2000. provides a pleasurable level of consumption-related fulfillment”. However. It is a judgment that a product or service feature. increasing customers’ retention rates is an important task for service organizations. “Satisfaction is the consumer fulfillment response. while service quality evaluations are mainly a cognitive procedure (Oliver. Berry and Parasuraman (1996).. Service quality & attitudinal loyalty Measurement scale used for this study In this research study additional three extra variables has been added to the original SERVQUAL scale . from a management point of view. Zeithaml et al. In the research model the perceived service quality of private banks dealing with retail banking was measured by using five dimensional SERVQUAL with three additional variable added to it. Studies have showed that service quality evaluations are closely related to positive behavioral intentions and customer loyalty (Backman & Veldkamp. 1992. Spreng & McKoy. 5. 2002. A number of studies in the services marketing literature have reported that these two constructs are strongly related (e. As previously noted.the variables are Service charge charged by the bank. 1996. Research Model In accordance with the literature. Baker & Crompton. 1999. since they might mean that these customers will soon quit. In the present study. and use these gaps in order to predict satisfaction. Only attitudinal loyalty dimension is taken for this research study rather taking the entire behavioral intention dimensions. Cronin & Taylor. we adopted the gap approach aiming to identify service quality gaps. It includes both cognitive and affective evaluations.1..2000 . a hypothesis was tested to find the relationship between Overall service quality and Overall attitudinal loyalty. because it is usually associated with financial benefits for the organizations. the developed research model is shown in fig. or the product or service itself. a comprehensive multidimensional framework of customer behavioral and attitudinal intentions for use within a service industry.. 2003). Tian-Cole & Crompton. 1997. 1989). 1995. Alexandris et al. 1996). Our decision is justified by the value of this approach for managerial implications. 2002. since in a real life setting it requires to collect data twice (before and after using the service) from the same customers. Negative scores in the gap model are worrying signs for organizations. 2001.. identifying the gaps in customers’ evaluations is always a very useful task. Bloemer et al. The Relationship between Service Quality and Customer Satisfaction According to Zeithmal and Bitner (2003). if actions are not taken. 6. Spreng & Chiou..

The sample size used was 100 respondents. To find out the correlation and relationship between overall service quality which determine customer satisfaction (Latent) and attitudinal loyalty. The respondents were selected on the basis of convenience sampling. about monthly income 10001-25000 (62%) followed by 2500140000 (18%). self employed(17%). Analysis And Findings Profile of the respondent: As the data indicate that the large group of respondents belong to age groups between 36-45 age (64%) followed by 26-35 age (29%). Type of account –Saving A/C(64%) followed by Current A/C (22%). 8. occupation of respondents with government (27%). was used for the research. private (35%). unmarried (41%). Number of dependents –Three dependents (38%) followed by two dependents (29%). 9. Tamilnadu . 2 November 2009).The population from which our sample was selected is from the Tamil speaking customers of the two private banks in Tirchirappalli.SRM Management Digest . 7. Methodology A descriptive research was used to gain an insight into consumer’s perceived service quality offered by private banks with respect to five dimensions of SERVQUAL scale. SERVQUAL by Parusuraman. Research Objective To understand the Socio-demographic profile of private retail banking consumers. The two banks were selected as per the business world Real 500 finance companies ranking statistics (Source: Business World. et al (1985).India. marital status proportion with married (59%). The respondents were asked to provide belief rating for services offered by private banks dealing with retailing. Frequency of visit -1-2 times fortnightly (33%) followed by 1-2 times per month (32%). To identify the key dimensions of perceived service quality as well as to investigate prevailing service quality level in the private retail banking consumers. Service quality H1 Attitudinal loyalty . An undisguised structured questionnaire. As Nunnaly (1978) as cited by Devellis(1991) mentioned that a sample of 100-300 sample of respondents is sufficient to test measurement scales . gender proportion with male (52%) female(48%).2010 198 Tangibility Reliability Responsivenes s Assurance Empathy Price/CHS Figure 1 Hypotheses: Perceived overall service quality of private banks dealing with retail banking has a positive effect on customer overall attitudinal loyalty. The questionnaire is personally administered to the valued customers both in English and also in their respective vernacular language for better understanding. using five point rating scale ranging from 1 (strongly disagree) to 5 (strongly agree). educational qualification with majority PG qualification with (48%) and followed by (30%) of UG qualification. Primary data were collected for the research.

113 .992 300 .682 .05) so we reject H0. excellent banks will show sincere interest in solving it Employees in a bank should give prompt service. After the literature review synthesis. Loading . Such a scale has to be tested for validity and reliability. . Proper validity and reliability testing can be done using CFA. However. Employees should always be willing to help customers Employees never too busy to respond to customers request Employees of a bank should give their customers personal attention Bank has excellent complaint handling system Factor 2(Assurance .702 .000 The hypotheses are: Ho: The factor analysis is not valid H1: The factor analysis valid The significance (0.868 1505.941) which is above 0. A high value of the Cronbach’s Alpha coefficient suggests that the item that make up the scale “hang together” and measure the same underlying construct.Empathy and Responsiveness) Tell customers when exactly the services will be performed Behavior of employees should instill confidence in customers Employees should have the knowledge to answer customers questions Bank employees should understand the specific needs of their customers .868) the value is more than 0. Sphericity Chi-Square df Sig.532 .606 . This means that the factor analysis is valid.579 . The Cronbach’s Alpha coefficient is an indicator of internal consistency of the scale.941 N of Items 25 industry experts. Measurement instrument also satisfy the requirement of content validity which refers to the extent to which a measurement reflects the specific intended domain of content by getting validation from academicians and Table3:Dimensions or Factors Kaiser-Meyer-Olkin Measure of Sampling Adequacy. A value of Cronbach’s Alpha (. Bartlett’s Test of Approx.2010 Table1:Reliability statistics Cronbach's Alpha .05. Factor Analysis Table2: KMO and Bartlett’s Test After identifying the dimension underlying a factor.000) is less than assumed value (0.7 can be used as a reasonable test of scale reliability.585 17. Inferring the KMO coefficient (0.884 .671 % of variance Cronbach’s alpha Factor 1(Reliability.751 .605 . Responsiveness and Empathy) Customer have a problem. construct validity observed after the establishment of agreement between the measuring instrument and theoretical concepts through which theoretical relationship and empirical relationship is examined in this study as per the requirements. this implies that the factor analysis for data reduction is effective.855 . research study commonly uses the Cronbach’s alpha coefficient for establishing scale reliability. 10. a researcher may prepare a scale of those dimensions to measure the factor.582 22.751 . So.199 SRM Management Digest .

Responsiveness and Empathy). Empathy and Price). 1988).747 . With reference to the reliability of the scale measurement in relation to the variables composing each factor.729 .. Coefficient alpha higher than . FACTOR 5.316 . 1988. Multiple Regression Analysis Model 1 Table4 Model Summary Adjusted R R Square R Square .981 .7 is considered to be good (Nunnaly.743 200 From the above Table 3.998 Std.684 besides the fifth dimensions were alpha = . zeithmal. it is clearly elucidated that in order to test the validity of the five factor structure of service quality of retail banking.828 . 1991b). FACTOR 3.g.680 10. 1978).And for each factor their corresponding percentage of variance denoted and from the factor analysis. Brochures and Statements) visually Appealing . it is inferred that only five factors have Eigen values over one. they will do so The services of a bank should be performed right the first time Factor 5(Tangible and Empathy) Have State of the Art Technology/Modern Equipment.733 .538 .5). the Cronbach Alpha coefficient were calculated and were judged to be satisfactory (between .SRM Management Digest .998 .03004 a Predictors: (Constant). 1988).780 8. Factor 4(Reliability) and Factor 5(Tangible and Empathy). The table clearly indicates that the gaps score between the perceptions and expectations do not support the original five dimensions of the retail banking service quality scale as suggested by (Parusuraman. an exploratory factor analysis on gap scores for respondents was performed. Hence.999(a) . Other rotation methods such as Equamax rotation with Kaiser Normalization also failed to improve the factors loading and factor structure as suggested by them since the south Indian consumers preferences.884 to . Empathy and Price) Customer of a bank should feel safe in all the transaction A bank should give customers individual attention Bank charge reasonable service charge Factor 4(Reliability) Promises to do so by a certain time. This was performed for gap score (Perception minus Expectation) for checking the applicability of gap analysis for the factor structure using the principal component factoring method and Varimax rotation with Kaiser normalization. FACTOR 1.406) the loading of the majority of the items was deemed satisfactory (>. culture and demographic setup will vary.406 9. these results indicate potential problems in using the gap model to measure service quality at the factor level using the same factor structure proposed by (Zeithmal. so the result has five factors namely Factor 1(Reliability.9 percent of the total variance. FACTOR 2 . Empathy and Responsiveness). Parusuraman.873 . FACTOR 4.548 . Factor 3(Assurance. Factor 2(Assurance. The Rotated Component Matrix during the analysis indicates that the 25 items (22 original items+3 additional validated items added) do not match with the five factor structure as described by (Parasuraman et al. Error of the Estimate . The operating hours of the bank should be convenient Materials(E. berry.2010 Factor 3(Assurance.615 . 11. berry. the sample was identified with five dimensions that explain 68.

945 df 5 94 99 Mean Square 9.322 . FACTOR 5. 12. The t and sig (p) values gives a rough indication of the impact of each predictor variable.867 9.144 a Dependent Variable: OVER ALL SERVICE QUALITY The overall average of all the variables pertaining to each dimension extracted using factor analysis is fed into multiple regression analysis.005 .860 .000 .650(a) 262.199 .821 100 df 253 253 1 Asymp.our model is significant.905 26.005 .004 .040 66.162 Std. .085 47.114 .007 Standardized Coefficients Beta . the standardized beta coefficients give a measure of the contributions of each variable to the model. FACTOR 4.001 F 10606.000 . (2-sided) . . FACTOR 2 b Dependent Variable: OVER ALL SERVICE QUALITY Table 6 Coefficients (a) Model Unstandardized Coefficients B 1 (Constant) FACTOR 1 FACTOR 2 FACTOR 3 FACTOR 4 FACTOR 5 .572 .215 . factor 1 and factor 2 got large beta value which predicts the overall service quality to a greater extent. Sig.000 . FACTOR 1.000 .333 .000 . The adjusted R square value tells us that our model accounts for 99% of variance in the SERVQUAL scores which seems to be a very good model and also the ANOVA Table 5 reports that the overall significance of our model as p<0. A large value indicates that a unit change in this predictor variable has a large effect on the criterion variable.976 Sig.005 . H0: There is no significant relationship between Overall Perceived service quality and overall attitudinal loyalty.000(a) a Predictors: (Constant). Error .759 . Table 7 Chi-Square Tests Value Pearson Chi-Square Likelihood Ratio Linear-by-Linear Association N of Valid Cases 407.000 .802 22.201 SRM Management Digest . From the coefficient Table 6.000 t Sig. FACTOR 3.2010 Table 5 ANOVA (b) Model 1 Regression Residual Total Sum of Squares 47.002 . Testing the relationship between Service quality and Attitudinal Loyalty Hypotheses: Overall Perceived service quality of private banks has a positive effect on customer overall attitudinal loyalty. H1: There is a significant relationship between Overall Perceived service quality and overall attitudinal loyalty.749 41. We can conclude from the table. In multiple regressions we have taken ENTER method since all our predictor variables were entered simultaneously and from the model summary Table 4.968 .575 34.282 .05 .175 .005 .152 .433 .

01 level (2-tailed). Since r = -. Limitations of the Study and suggestions for The correlation coefficient gives a mathematical future research value for measuring the strength of linear relationship between two variables. It can have values from -1 to 1 with: a. so there is a significant relationship between Overall Perceived service quality and Overall attitudinal loyalty. (2-tailed) N 100 ** Correlation is significant at the 0..SRM Management Digest . most of the items did not merge according to the dimensions proposed by (Parasuram et al. -1 representing absolute inverse relationship (as x increases . y increase). The reason for this inconsistency is because of generalized wording of the statements and a lack of specificity. Further both the construct namely overall service quality and overall attitudinal loyalty were checked for their positive correlation using correlation technique which is illustrated in Table8. Tamil Nadu of south India and therefore the results obtained may not be applicable to the country as a whole. Since the calculated P value (. c.315(**) . Hence the null hypothesis (Ho is rejected). since the banking consumers differ in their preference. to test the correlation between overall service quality and overall attitudinal loyalty bivariate correlation technique is used to conform the Correlation between these two constructs.y decrease) In this study. The real problem was found to be in the factor structure as compared to the proposed structure. Hypotheses were framed. +1 representing absolute positive linear relationship (as x increase.2010 202 In order to test the causal relationship between perceived service quality and attitudinal loyalty.05).” is too general and needs modification and addition of three more statements namely banks will give competitive Interest rates. Table 8 Correlations OVER ALL SERVICE QUALITY OVER ALL SERVICE QUALITY ATTITUDINAL LOYALTY Pearson Correlation Sig.000) is smaller than level of significance (. the variables namely overall service quality and attitudinal loyalty are positively correlated. 1988). Hence. their hypotheses were tested in this study.001 100 100 1 ATTITUDINAL LOYALTY Sig.315(**) . The small sample size of 100 may also be error-prone. The linkage between service quality and .culture and demographics in various parts of the country. 0 representing no linear relationship (x and y have no pattern). to check whether the overall service quality has any significant relationship with overall attitudinal loyalty and the same was tested using Chi-Square analysis. has good complaint handling system to resolve our problems.315 and +1 denotes . Factor analysis with such a small sample would have questionable applicability. it is concluded that respondents who give positive opinion about overall service quality will develop attitudinal loyalty towards their private banks. For example the statement. (2-tailed) N Pearson Correlation 1 -. will charge reasonable service charge. It is reported that the correlation is significant at the 0. “This bank has modern looking equipment. This study was carried out mainly in Tiruchirappalli. b.001 100 -.01 level.

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attitudinal loyalty is only studied here, rather it is advisable to find the linkage between service quality, mediated through customer satisfaction and all the dimensions of behavioral intention dimensions battery proposed by (Zeithaml, Berry and Parasuraman (1996 ) .Therefore, it would be suggested to redefine the factors according to the results obtained under the Indian conditions and then carry out the gap analysis for accurate response from the respondents and also for more pertinent suggestions for improvements. Also, similar studies with relatively large sample rigorously derived across all the states of India, which would measure the validity and reliability of the proposed instrument by (Parasuram et al., 1988) could be more effective. 13. Conclusion To gain and sustain competitive advantages in the fast changing retail banking industry in India, it is crucial for private banks to understand in-depth what customers perceive to be the key dimensions of service quality and what impacts the identified dimensions have on customers’ attitudinal loyalty. The statistical analyses of survey responses in this study reveal interesting findings. The study suggests that customers distinguish five dimensions of service quality in the case of the private retail banking. These five dimensions of customer-perceived service quality are: namely Factor 1(Reliability, Responsiveness and Empathy), Factor 2(Assurance, Empathy and Responsiveness), Factor 3(Assurance, Empathy and Price), Factor 4(Reliability) and Factor 5(Tangible and Empathy). . The first Factor is primarily related to the sincere interest bank show towards customer, prompt service, employee willingness to help customers, employees never busy to respond to customer request and has a good complaint handling system. The second factor is primarily associated with employees instill confidence in customers, knowledge to answer customer questions, understand the specific needs of their customers. The third factor is primarily associated with the bank showing individual attention to customers, bank charging reasonable service charge

and customer should feel safe in their transaction .Finally; the fifth Factor encompasses items related to the banks performing the service right the first time and provide their services at the time they promise to do so. Finally, fifth factor encompasses modern looking equipment bank should posses to enhance service facilitation, convenient operating hours and bank should carry visually appealing materials like brochures or statements or pay-in-slips/withdrawal slips etc. Identifying the underlying dimensions of the service quality construct in the Indian retail banking industry is the first step in the definition and provision of quality service (Zeithaml, Berry and Parasuraman (1996). The results of this study also offer strong support for the intuitive notion that improving service quality can increase favorable behavioral intentions (Attitudinal Loyalty) namely, customer saying positive things about their bank to other people, recommending their bank to someone who seeks their advice ,encouraging friends and relatives to do business with their banks ,considering their bank ass your first choice to transact services and doing more business with their bank in next few years. Furthermore, the results yielded an intricate pattern of service quality-attitudinal loyalty relationship at the level of the overall dimensions. Hence, these issues should be a central concern for retail bank managers as well as service management academics and practitioners to explore the specific component and train their employees in those areas and to delight the customers in the needed domain to enhance service quality and build attitudinal loyalty to retain the valued customers who is the most profitable customers for the banks as proposed by (Backman & Veldkamp, 1995; Baker &Crompton, 2000; Bloemer et al., 1999; Zeithaml et al., 1996). 14. References 1. Alexandris, K., Dimitriadis, D., & Kasiara, A. (2001). Behavioural consequences of perceived service quality: An exploratory study in the context of private fitness clubs in Greece. European Sport Management

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