SUMMER TRAINING PROJECT REPORT

On
“CUSTOMER SATISFACTION TOWARDS
SERVICES OF OPEN WINGS NOIDA”

Towards partial fulfillment of

Integrated Master of Business Administration (IMBA)
School of Management, Babu Banarasi Das University, Lucknow

SUBMITTED BY
VIBHANSHU SRIVASTAV
Roll No. 1200675058

Session 2023-2024

School of Management
Babu Banarasi Das University
Sector I, Dr. Akhilesh Das Nagar, Faizabad Road, Lucknow (U.P.) India.
CERTIFICATE FROM THE COMPANY
CERTIFICATE

iv
 DECLARATION

This is to declare that I, VIBHANSHU SRIVASTAV student of IMBA, have

personally worked on the project entitled “CUSTOMER SATISFACTION

TOWARDS SERVICES OF OPEN WINGS NOIDA”. The data mentioned in

this report were obtained during genuine work done and collected by me. The data

obtained from other sources have been duly acknowledged. The result embodied in

this project has not been submitted to any other University or Institute for the

award of any degree.

VIBHANSHU SRIVASTAV

v
 ACKNOWLEDGEMENT

The present work is an effort to throw some light on “CUSTOMER

SATISFACTION TOWARDS SERVICES OF OPEN WINGS NOIDA”. I

give my regards and sincere thanks to Dean Prof. Dr. Sushil Pande for his earnest

coordination and valuable efforts.

With deep sense of gratitude I acknowledge the encouragement and guidance

received by my faculty guide Ms. Shraddha Verma, She constantly encouraged

me right from the inception to final preparation of my project. She has been a

constant source of knowledge, information, help and motivation for me through her

depth knowledge and experiences. The work would not have been possible to come

to the present shape without the able guidance, supervision and help to me by

number of people.

I convey my heart full affection to all those people who helped and supported me

during the course, for completion of my Project Report.

VIBHANSHU SRIVASTAV

vi
 TABLE OF CONTENT

Sr. No Content Page No.

1. Introduction 1

2. Company Profile

3. Objectives of the Study

4. Research Methodology

5. Data Analysis & Interpretation

6. Findings

7. Recommendations

8. Limitations

9. Conclusion

10. Bibliography

11. Annexure

vii
INTRODUCTION

1
 INTRODUCTION

CUSTOMER

In sales, commerce and economics, a customer (sometimes known as a client,

buyer, or purchaser) is the recipient of a good, service, product or an idea -

obtained from a seller, vendor, or supplier via a financial transaction or exchange

for money or some other valuable consideration.

CUSTOMER SATISFACTION

MEANING

Customer satisfaction means taking complete care of customer by giving them

complete knowledge about the product and about all the feature of that particular

product.

Customer satisfaction is the end result of your interaction with the customer. By

giving the best customer service and making sure that the customer was given the

best resolution at the end of the call, then we can say that the customer is satisfied

even if it's not verbally said.

According to me customers are those who pay (salary). Satisfaction is the key to

hold the customer for future business. Complete knowledge must be given; each

and every query must be clarified by the seller. If a customer remembers you for

future business then we can say that customer is satisfied.

2
DEFINITION

According to Harold E Edmondson “Customer satisfaction” is defined as "the

number of customers, or percentage of total customers, whose reported experience

with a firm, its products, or its services (ratings) exceeds specified satisfaction

goals.".

Customer satisfaction is defined by whether the customer chooses to do business

with you or your company in the future. Many factors play a role in customer

satisfaction, including customer service, product quality and the ease of doing

business. Companies must consider customer satisfaction as an important role in

the lifetime value of a customer.

Customer satisfaction, a term frequently used in marketing, is a measure of how

products and services supplied by a company meet or surpass customer

expectation. In a survey of nearly 200 senior marketing managers, 71 percent

responded that they found a customer satisfaction metric very useful in managing

and monitoring their businesses.

It is seen as a key performance indicator within business and is often part of

a Balanced Scorecard. In a competitive marketplace where businesses compete for

customers, customer satisfaction is seen as a key differentiator and increasingly has

become a key element of business strategy.

SEVEN STEPS:

 Encourage face-to-face dealings.

 Respond to messages promptly and keep yours clients informed.

 Be friendly and approachable.

 Have a clearly-Defined customer service policy.

 Attention to details.

3
  Anticipate your client’s needs and go out of your way to help them out.

 Honor your promise

MEANING OF CUSTOMER SERVICE

Serving your customer with a smile on your face, even when things don’t go right.

DEFINITION OF CUSTOMER

 A person, company or other entity which buys goods and services

produced by another person, company or other entity.

 One who regularly or repeatedly makes purchases of a trader, a

purchase a buyer.

DEFINITION OF CUSTOMER SERVICE

According to Jack Speer “Excellent customer service is the process by which your

organization delivers its services or products is way that allows the customer to

access them in the most efficient, fair, cost effective and humanly satisfying and

pleasurable manner possible”.

Customer service is a common term we are familiar with which means one

who aids or provides helps to the purchase of goods and service.

4
SIX COMPETITIVE ADVANTAGES THROUGH CUSTOMER

SATISFACTION:
Customer
satisfaction

Repeat Higher Loyalty Word or One stops New

shopping product
buying price in crises month
innovation

Profit Corporate Growth

performance

ADVANTAGE

Customer comments, suggestions and response about a company’s products,

business practices and customer service orientation are one of the biggest

advantages of customer feedback surveys. Critical input and answer can help a

company to develop better customer relation programs.

5
DISADVANTAGE

Customer feedback surveys and questionnaires can sometimes be too scientific and

methodical to capture to humane instincts and traits of consumer. Rigorous

analysis and interpret ion of feedback and answers provided by customers might

not provide the right kind insights that business not to better serve customer.

IMPORTANCE

Since sales are the most important goal of any commercial enterprise. It become

necessary to satisfy customer for customer satisfaction it is necessary to establish

and maintain certain important characteristics like:

a) Quality

b) Fair prizes

c) Efficient delivery

d) Good customer handling skills

e) Serious consideration of consumer complaints

Satisfaction is the feeling of pleasure or disappointment attained from comparing a

product perceived performance (outcome) in relation to his or her expectations.

The customer is dissatisfied. If the performance matches the expectation, the

customer satisfied. If the performance exceeds expectations the customer is highly

satisfied.

6
BENEFITS

CUSTOMER SATISFACTION AN INSIGHT

According to Harold E Edmondson “ Customer Satisfaction” seems to appear in

print more frequently than any other catch phrase used to describe a new found

magic for industrial success. Before we proceed in to the study of the dynamics of

Customer Satisfaction it is important to know about, who a customer is and what

satisfaction really means.

Who really is a Customer?

The question of defining who your customers are seems fairly easy particularly if

you have segmented your market properly and understand who you are trying to

satisfy. However subtlety that frequently goes undetected by many firms is that is

that customer set can be divided into two parts, the apparent customer and the

user. The apparent customer is the person or group of people who decide what

product to buy and basically have control over the purse strings. The user is a

person or group who physically uses the product or is the direct recipient of a

service.

What does satisfaction really mean?

As in defining customer above, defining satisfaction also appears simple. However

as with customer there is a subtlety that needs addressing. Satisfaction by most

definitions simply means meeting the customer’s requirement.

Customer satisfaction is a concept that more and more companies are putting at the

heart of their strategy, but for this to be successful they’re needs to be clarity about,

what customer satisfaction means and what needs to happen to drive improvement.

Without this, there is a risk that customer satisfaction becomes little more than a

good intention, with confused objectives failing to address the real issues for

7
customers, one helpful way to look at the problem is to rephrase the objectives: set

the sights on helping the customers meet their goals.

Customer satisfaction can be defined in many different ways. Finding the right

way for a company depends on understanding your customer and on having a clear

vision of the role that customer satisfaction is to play in the strategy. For example,

a focus on customer satisfaction can work alongside existing segmentations to

support revenue generation from high value customers or it can be a company-

wide objective rooted in the brand values. For the former, it may be sufficient to

focus on improving customer service, but for the latter a broader definition of

customer satisfaction is necessary, closer akin to corporate reputation.

Whatever the strategy for customer satisfaction, it must at least include getting the

basics right. Failing to achieve this can destroy the reputation as well as losing

valuable customers. Every customer, regardless of their economic worth to the

business, has the power to influence – positively or negatively – a company’s

reputation. Once the objectives for the customer satisfaction strategy are defined

there are a number of steps we can take to make sure the focus on customer

satisfaction is effective.

Building a company around Customer Satisfaction -

With the increase in customer’s demands and competition it has become a lot more

important to base the entire company on customer service. When doing this one

must first realize that every member of an organization plays an active role in

customer service. This includes both external customers and internal customers

within a company.

Customer focused organizations focus both on customer satisfaction and

profit. Achieving customer satisfaction generates the profit. In these organizations

8
top management has frequent contacts with external customers. The top

management uses consultative, participative, and supportive management styles to

get through to the customer. The staff focuses all of its attention on satisfying the

customer’s needs. However, the management’s job is to provide the staff with

support necessary to achieve these goals. The other department and staff in the

organization that do not have direct contact with the external customers deal

exclusively with internal customer satisfaction.

Satisfaction is consumer’s fulfilment response. It is a judgment that a product or a

service feature or the product or service itself provides pleasurable level of

consumption related fulfilment.

Customer’s satisfaction influenced by specific product are service features and by

perceptions of quality. It is also influenced by specific service attributions, and

their perceptions

MARKETING ORGANIZATION

Satisfaction is consumer’s fulfillment response. It is a judgment that a product or a

service feature or the product or service itself provides pleasurable level of

consumption related fulfillment.

Customer’s satisfaction influenced by specific product are service features and by

perceptions of quality. It is also influenced by specific service attributions, and

their perceptions

The telling factor in the company’s long run fortunes will be the amount of

customer satisfaction that it managers to generate. But it doesn’t not mean the

company’s sole aim is to maximize Customer Satisfaction. If that where the case, it

should simply put out the best product and service in the world and price is below

cost. There by it would be creating substantial customer satisfaction. But in the

9
long run it would be also be out of business. Customer Satisfaction like happiness

bet achieved by rendering substantial forma of assistance to others rather than by

direct pursuit.

Companies that move towards adopting the market concept benefit themselves and

The society. It leads the society’s recourse to move in the direction of social needs,

there by bringing the interests of business firms and the interest of society in to

harmonious relationship. Thus the third pillory of the marketing concept aims to

achieve good profits by giving the customer genuine values in the satisfaction.

Customer satisfaction, a business term, is a measure of how products and services

supplied by a company meet or surpass customer expectation. It is seen as a key

performance indicator within business and is part of the four perspectives of a

Balanced Scorecard.

In a competitive marketplace where businesses compete for customers, customer

satisfaction is seen as a key differentiator and increasingly has become a key

element of business strategy. Increasing competition (whether for-profit or

nonprofit) is forcing businesses to pay much more attention to satisfying

customers. (It may help the reader to notice the role of customer satisfaction in the

overall context of product or service development and management.

Measuring customer satisfaction

Organizations are increasingly interested in retaining existing customers while

targeting non-customers; measuring customer satisfaction provides an indication of

how successful the organization is at providing products and/or services to the

marketplace.

10
Customer satisfaction is an ambiguous and abstract concept and the actual

manifestation of the state of satisfaction will vary from person to person and

product/service to product/service. The state of satisfaction depends on a number

of both psychological and physical variables which correlate with satisfaction

behaviors such as return and recommend rate. The level of satisfaction can also

vary depending on other options the customer may have and other products against

which the customer can compare the organization's products.

Because satisfaction is basically a psychological state, care should be taken in the

effort of quantitative measurement, although a large quantity of research in this

area has recently been developed. Work done by Berry, Brooder between 1990 and

1998 defined ten 'Quality Values' which influence satisfaction behavior, further

expanded by Berry in 2002 and known as the ten domains of satisfaction. These

ten domains of satisfaction include: Quality, Value, Timeliness, Efficiency, Ease of

Access, Environment, Inter-departmental Teamwork, Front line Service Behaviors,

Commitment to the Customer and Innovation. These factors are emphasized for

continuous improvement and organizational change measurement and are most

often utilized to develop the architecture for satisfaction measurement as an

integrated model. Work done by Parasuraman, Zeithaml and Berry between 1985

and 1988 provides the basis for the measurement of customer satisfaction with a

service by using the gap between the customer's expectation of performance and

their perceived experience of performance. This provides the measurer with a

satisfaction "gap" which is objective and quantitative in nature. Work done by

Cronin and Taylor propose the "confirmation/disconfirmation" theory of

combining the "gap" described by Parasuraman, Zeithaml and Berry as two

different measures (perception and expectation of performance) into a single

11
measurement of performance according to expectation. According to Garbrand,

customer satisfaction equals perception of performance divided by expectation of

performance.

The usual measures of customer satisfaction involve a survey with a set of

statements using a Likert Technique or scale. The customer is asked to evaluate

each statement and in term of their perception and expectation of the performance

of the organization being measured.

Customer Loyalty

"It takes a lot less money to increase your retention of current customers than to

find new ones-but I know I don't give it as much effort as I should because it does

take a lot of energy and effort!"

Strategize And Plan For Loyalty!

 Do you even have a specific plan for building customer loyalty?

 I bet you haven't given it as much thought as you should- because to tell the

truth I need to give it more effort also.

 If you currently retain 70 percent of your customers and you start a

program to improve that to 80 percent, you'll add an additional 10 percent

to your growth rate.

 Particularly because of the high cost of landing new customers versus the

high profitability of a loyal customer base, you might want to reflect upon

your current business strategy.

12
These four factors will greatly affect your ability to build a loyal customer

base:

1. Products that are highly differentiated from those of the

competition.

2. Higher-end products where price is not the primary buying factor.

3. Products with a high service component.

4. Multiple products for the same customer.

Market to Your Own Customers!

Giving a lot of thought to your marketing programs aimed at current customers is

one aspect of building customer loyalty.

When you buy a new car, many dealers will within minutes try to sell you an

extended warranty, an alarm system, and maybe rust proofing. It's often a very

easy sale and costs the dealer almost nothing to make. Are there additional

products or services you can sell your customers.

Three years ago my house was painted, and it's now due for another coat. Why

hasn't the painter called or at least sent a card? It would be a lot less expensive than

getting new customers through his newspaper ad, and since I was happy with his

work I won't get four competing bids this time. Keep all the information you can

on your customers and don't hesitate to ask for the next sale.

Use Complaints To Build Business!

When customers aren't happy with your business they usually won't complain to

you - instead, they'll probably complain to just about everyone else they know -

and take their business to your competition next time. That's why an increasing

number of businesses are making follow-up calls or mailing satisfaction

questionnaires after the sale is made. They find that if they promptly follow up and

13
resolve a customer's complaint, the customer might be even more likely to do

business than the average customer who didn't have a complaint.

hIn many business situations, the customer will have many more interactions after

the sale with technical, service, or customer support people than they did with the

sales people. So if you're serious about retaining customers or getting referrals,

these interactions are the ones that are really going to matter. They really should be

handled with the same attention and focus that sales calls get because in a way they

are sales calls for repeat business.

Reach Out To Your Customers!

Contact . . . contact . . . contact with current customers is a good way to build their

loyalty. The more the customer sees someone from your firm, the more likely

you'll get the next order. Send Christmas cards, see them at trade shows, stop by to

make sure everything's okay.

Send a simple newsletter to your customers-tell them about the great things that are

happening at your firm and include some useful information for them. Send them

copies of any media clippings about your firm. Invite them to free seminars. The

more they know about you, the more they see you as someone out to help them, the

more they know about your accomplishments-the more loyal a customer they will

be.

Loyal Customers and Loyal Workforces

Building customer loyalty will be a lot easier if you have a loyal workforce-not at

all a given these days. It is especially important for you to retain those employees

who interact with customers such as sales people, technical support, and customer-

service people. Many companies give a lot of attention to retaining sales people but

14
little to support people. I've been fortunate to have the same great people in

customer service for years-and the compliments from customers make it clear that

they really appreciate specific people in our service function. The increasing trend

today is to send customer-service and technical-support calls into queue for the

next available person. This builds no personal loyalty and probably less loyalty for

the firm. Before you go this route, be sure this is what your customers prefer.

Otherwise I'd assign a specific support person to every significant customer.

“MARKETTING JOB IS TO CONVERT SOCIETAL NEEDS IN TO

PROFITABLE OPPORTUNITIES”.

Definition of marketing as follows

“Marketing is a social managerial process by which individuals and group obtain

what the need and want through creating. Offering and exchanging products of

value with others”.

This definition of marketing rests on the following core concepts needs, wants and

elements, products (goods, services and ideas); value cost and satisfaction

exchange and transactions, relationships and networks, markets and marketers and

prospects.

THE MAKETING CONCEPT

“ The marketing concept hold that key to achieving organizations goals consists of

being more effective than competitor in integrating more effective then

competitive in integrating marketing activities towards determining and satisfying

the needs and wants of target markets”.

15
 CHAPTER 2
COMPANY PROFILE

16
 COMPANY PROFILE

OPEN WINGS FOUNDATION is an Indian company incorporated on

05/05/2017 and its registered office address is WARD NO 7, JANKI STHAN,

CHAKMAHILA SITAMARHI BAZAR SITAMARHI

,Sitamarhi,Bihar,India,843302. The LLP Identification Number (LLPIN) of the

company is AAJ-3466 and its total obligation of contribution is Rs. 10000. The

current age of the company as per the available official records is 5 Years 3

Months 24 Days years. OPEN WINGS FOUNDATION is registered at Registrar

of Companies, Patna (RoC-Patna) Its authorized share capital is INR 0 and its paid

up capital is INR 0The directors of this company are GUPTA INDRA and

PRASAD YUGAL KISHORE.

The current status of this company is Active. and the contact details of the

company as per the official records are mentioned in the contact section. Please

visit the contact section or the contact form below for contacting this company

It is known that LLP is primarily designed to meet the needs of professionals,

especially Chartered Accountants, Cost and Management Accountants, Company

Secretaries, etc. But it is essential on the part of the law-makers and researchers to

analyse whether LLP can be treated as a general purpose business vehicle meeting

the needs of all businesses. In that case, one needs to move down further to

evaluate whether it should be a general structure available to all businesses or a

structure that can be tailored to suit the peculiarities, interests of each business.

Moreover, one also has to understand what safeguards must be available to the

general public who deal with such limited liability entities like LLP.

The first section of this chapter will give a brief overview of different types of

major hybrid entities available. The second section will outline a description of

17
some key legal concepts and doctrines. The third section will uphold the major

issues forwarded by the professionals in respect of their liability and the rationale

for allowing or not allowing them to practise in limited liability entities. The fourth

section will concentrate on the arguments and the case for allowing professionals

to practise in limited liability entities.

SECTION A: TYPES OF MAJOR HYBRID ENTITIES

AROUND THE WORLD

The term „hybrid entity‟ signifies a type of business organisation that combines

and blends corporate characteristics with the characteristics of a partnership firm to

meet the needs of certain groups of people who cannot fully utilise the advantages

of the corporate form or the partnership form. In this section, an overview has been

given of the major hybrid entities available around the world, namely, Limited

Partnership (LP), Business Trust, Limited Liability Company (LLC) and LLP.

LP is a type of partnership which has general partners like in ordinary partnership

along with one or more limited partners. It is a partnership which requires, at least,

one partner as a general partner. The role played by the general partners is the

same as in ordinary partnership. This indicates that general partners in an LP have

the control in the management of the affairs of the LP, share the right to use the

partnership property, share the profits of the firm in certain pre-defined

proportions, and have joint and several liability for the debts of the LP. Like in

ordinary partnerships, general partners are the agents of the LP to bind all the other

partners of the firm in contracts with the third parties in the ordinary course of the

business of the LP. The limited partners play a role similar to the shareholders of a

company. They have limited liability to the extent of their registered investments in

the LP for the debts incurred by the firm. They do not have any right to participate

18
in the management of the LP. The LP members sometimes have to face the

formalities of piercing the corporate veil like in the case of a company. This is

done to differentiate truly the identities of general partners from limited partners.

But such piercing of corporate veil is more difficult for an LP than in case of a

company as an LP does not have many procedural formalities to maintain

(http://en.wikipedia.org/wiki/Limited_partnership). The limited partners do not

enjoy the powers of the general partners till the time they do not step into the shoes

of the general partners. A limited partner who has paid the amount of money or has

agreed to contribute to the LP will not have any further liability for the LP‟s

obligations. In other words, the amount the limited partners have agreed to

contribute indicates the maximum exposure as limited partners (Alberta Law

Reform Institute, 1998).

A limited partner who actively participates in the business of an LP also runs the

same risk of incurring unlimited liability as a general partner. This is in conformity

with Section 63 of the Partnership Act of Alberta which depicts that a limited

partner does not incur any liability of a general partner unless he/she participates in

the control and in the management of the business. In the case of Haughton

Graphic Ltd. vs. Zivot (1986), direct consideration was made of Section 63 of the

Partnership Act of Alberta. The general partner in this case was a corporation and

the two limited partners were employees and officers of the corporate general

partner. However, the court of law did not determine the role or title of the limited

partners in the corporate general partner. The two limited partners were the ones

who were occupying the managerial positions in the LP and took all the managerial

decisions. This attracted direct application of Section 63 of the Partnership Act of

Alberta and the court held them liable as general partners. The decision in the case

19
of Haughton Graphic Ltd. vs. Zivot (1986) is contrasted to the decision in the case

of Nordile Holdings Ltd. vs. Breckenridge (1992) of the British Columbia Court of

Appeal. The British Columbia Court of Appeal referred to the corresponding

section of British Columbia‟s Partnership Act. The facts of the case Nordile

Holdings Ltd. vs. Breckenridge (1992) had similarity with that of the case of

Haughton Graphic Ltd. vs. Zivot (1986). In this case, the insolvent LP had one

corporate general partner and two limited partners who were the directors and

officers of the corporate general partner. These two limited partners took part in

the management of the LP. The British Columbia Court of Appeal held that the

two partners participated in the management of the LP not in the capacity of

limited partners but in the capacity of directors and officers of the corporate

general partner. Thus, the two limited partners could not be held liable as general

partners. The Court of Appeal also held in the favour of the defendant limited

partners on a second ground. The second ground was that the provision of

mortgage, upon which they were sued, specifically provided that the plaintiffs

could lay their hands only on the assets of the LP. The British Columbia Court of

Appeal interpreted the provision as that the limited partners could be held

personally liable as general partners only if they participate in the management of

the LP in the capacity of limited partners. On the contrary, the Court of Ontario

held that the limited partners would always be personally liable if they participate

in the management of the LP in any capacity whatsoever. According to the

Partnership Act of Alberta, limited partners would be eligible to receive their

shares of profit, if, after such payment, there lies sufficient assets in the LP to meet

the external liabilities other than the liabilities towards the other partners. Similar

restrictions are also applicable to the returns on the limited partners‟ contribution.

20
Moreover, though limited partners are allowed to extend loans to the LP, they are

not allowed to take security interest in the assets of the LP on account of the loan

provided. This restriction is usually not applicable for shareholders of companies

(ibid.). As far as trusts are concerned, the Canadian courts got the idea of trusts

from the courts of England. An arrangement of trust arises when one person,

named as trustee, holds the legal title of a property for the benefit of some other

persons or a group of persons, named as beneficiaries. The concept of trust is very

flexible in nature and can be formed for many purposes like investment or

commercial purposes as well. In the case of a unit trust, it is known that the trustee

holds marketable securities on trust for the benefit of the investors who have

acquired units of the trust. Sometimes, the trust concept is used for the commercial

purpose of carrying on an active business rather than simply investing in securities.

The trustee in case of business trusts holds title to assets and utilises them for the

benefit of beneficiaries. The business trusts are well within the basic trust laws and

concepts. The difference between the business trust and any other trust is basically

on functional ground than on legal ground (Flannigan, 1983). Conventionally, in

case of business trusts, the trust agreement gives greater autonomy to the trustee to

make aggressive investment and to conduct an active business. The usual family

trusts generally create successive and contingent interests, i.e., the interests may

not be confined within a group of identifiable persons. But, in case of business

trusts, the beneficial interest is confined within a group of investors who have

invested in such business trusts. Generally, groups of individuals or groups of

corporations or groups of corporations and individuals may establish a business

trust by drafting a trust agreement whereby they would appoint a trustee and define

the rights, powers and responsibilities of the trustee. Thereafter, they would

21
transfer the property to the trustee so that the trustee may utilise them for the

purpose of business as decided in the trust agreement. Generally, the beneficiaries

do not possess the power to remove the trustee or to interfere in his/her conduct of

business but all these clauses may be modified by the terms in the trust agreement

(Alberta Law Reform Institute, 1998). A business trust generally does not have a

separate legal entity. Since the trustee is the legal owner of the property, he/she has

absolute rights to deal with the trust‟s property but this right must be exercised in

accordance with the trustee‟s fiduciary duties. Third parties, who want to either

purchase the trust‟s property or want to sell any property or service to the trust,

deal with the trustee not as an agent of the beneficiaries but as the principal of the

properties (ibid.). The trusts do not incur any liability or obligation and the

beneficiaries too do not incur any liabilities for the actions undertaken by the

trustee in the ordinary course of the business of the trust. As far as the general

principles of the trust are concerned, the beneficiaries may be liable to indemnify

the trustee for the liabilities incurred by him/her in carrying out the duties.

However, this indemnification clause may also be removed from the trust

agreement (Flannigan, 1984; Cullity, 1996). If the trustee of a business trust is a

corporation, then some say that the beneficiaries may limit their liabilities to the

assets of the trustee and the assets of the trust held by the trustee for the benefit of

the beneficiaries. Just because the trustee possesses the legal title to the property of

the trust, it cannot be concluded that the beneficiaries should enjoy limited

liability. If one takes a logical view, he/she may argue that, when two or more

persons have contributed funds to reap some profit out of that in a venture, the

arrangement resembles very much an ordinary partnership irrespective of the facts

that the ownership of the fund is vested in the trustee and the beneficiaries may not

22
participate in the management of the trust. However, Anglo-Canadian courts have

argued that in situations, where the beneficiaries are simply acting as passive

investors, it is better to treat them as beneficiaries only rather than partners of

ordinary partnership (Flannigan, 1984). But in circumstances, where the trustee

does not exercise independent authority and merely carries out the orders at the

discretion of the beneficiaries, then the beneficiaries may be held liable as

principals as held in the case of Trident Holdings Ltd. vs. Danand Investments Ltd.

(1988) (Alberta Law Reform Institute, 1998). The liability position of the

beneficiaries is less clear when they participate in the management of the trust to

some extent but the actual-decision making power is vested in the trustee only.

However, one way of resolving this issue may be to observe the clauses of the trust

deed. This is to evaluate whether the trust deed gives the beneficiaries any direct

right to exercise control over the management of the trust‟s property or whether

they possess ultimate controlling authority as far as the trust‟s assets are

concerned. In these two cases, the beneficiaries will acquire the same status as the

partners in a partnership firm and the trustee would simply be acting as their agent.

The tests that are carried out to determine whether limited partners should be held

liable or not should also be applicable to determine the liability of the beneficiaries

of a trust (Flannigan, 1984). The beneficiaries may exercise ultimate controlling

power, if they have the power to influence the decision of the trustee by

discharging the power to remove or replace him/her (Alberta Law Reform

Institute, 1998). A contrary view is taken by the Anglo-Canadian courts where the

main issue is not to observe the controlling power enjoyed by the beneficiaries but

to judge whether the trustee exercises independent discretion with respect to the

management of the trust‟s assets. If the trustee can use discretion over the

23
management of the trust‟s assets, he/she will not be regarded as a mere agent of

the beneficiaries. In such circumstances, the beneficiaries will not be held liable for

the obligations incurred by the trustee in carrying out the trust‟s operations

(Cullity, 1985, 1988, 1996). As far as the evolution of LLC is concerned, much of

its development is attributed to the initiative for elimination of the incidence of

double taxation of dividend paid out of corporate income. In Canada, when a

corporation pays dividend to its shareholders out of the income on which tax has

already been paid, the shareholders are entitled to some form of credit for the tax

that has already been paid. In this way, the impact of double taxation of corporate

income is eliminated to some extent but not fully. But in the USA, the shareholders

do not receive any credit for the tax paid by the corporation. So there is a higher

element of double taxation in the USA (Klein and Zolt, 1995). It was this motive

of removing the impact of double taxation that led the US firms to create an

organisational form that would not have the impact of double taxation. Over long

years, the American courts and the Internal Revenue Service treated many

organisations that are not corporations generally but treated as corporations for tax

purposes. Such treatment is based on the existence of four characteristics, namely,

continuity of life, centralised management, limited liability and free transferability

of interest. The regulations and the laws stipulate that an unincorporated

corporation will not be treated as a corporation for tax purposes, if it possesses

more non-corporate characteristics than corporate features (ibid.). Thus, since the

investors are interested in forming an organisational vehicle that would have the

non-corporate form of taxation along with limited liability, such organisation

should have maximum of one corporate characteristic out of the remaining three as

stated above to fulfil the investors‟ need (Alberta Law Reform Institute, 1998).

24
During the mid-seventies, an oil company persuaded the state of Wyoming to pass

the first LLC statute. The oil company thought that an LLC would not be regarded

as a corporation for tax purposes. But since that did not happen initially, the idea of

LLC was not accepted by the entrepreneurs. It was in 1988 that the Internal

Revenue Service recognised the Wyoming LLC as a non-corporate form or

partnership form for tax purposes (Carney, 1995). After the passing of this ruling,

almost all the states enacted LLC statutes within a few years. Since there was

considerable variation in the LLC statutes of different states, the National

Conference of Commissioners on Uniform State Laws (NCCUSL) enacted the

Uniform Limited Liability Company Act (ULLCA), 1995, to bring uniformity

among the state laws (Alberta Law Reform Institute, 1998). However, the pursuit

of the US enterprises to mix and blend idiosyncratic features to avail of the tax

advantage of a partnership firm reduced to some extent due to the introduction of

“check-the-box” regulation (Heller and Carnevale, 1997). The essence of this

regulation is that an entity is able to exercise just an option to be treated either as a

partnership or as a corporation for tax purposes. This regulation, however, could

not reduce the demand and attractiveness of the LLC to a large extent since many

American commentators have agreed that, other than the tax advantages, the

benefit of flexibility to organise its affairs in a limited liability concern is better in

an LLC than in an LP form or a corporate form of organisation (Alberta Law

Reform Institute, 1998).

Another area where one finds the application of vicarious liability is partnership. It

is known that, according to Section 25 of the Indian Partnership Act, 1932, a

partner is jointly and severally liable for the acts of the firm, while he/she is a

partner of the firm. Moreover, section 26 of the said Act has stated explicitly that

25
where (by the wrongful act or omission of a partner acting in the ordinary course of

the business of a firm or with the authority of his partners) loss or injury is caused

to any third party or any penalty is incurred, the firm is liable to the same extent as

the partner. According to Section 27 of the said Act, when a partner, acting within

his/her apparent authority, receives money or property from a third party and

misapplies it or a firm, in the course of its business, receives money or property

from a third party, and the money or property is misapplied by any of the partners,

while it is in the custody of the firm, the firm is liable to make good the loss. Thus,

from the above sections, it is clear that the firm‟s liability is equivalent to the joint

and several liabilities of all the partners of the firm. These sections impose

vicarious liability on the partnership firm. Thus, it is needless to mention that an

employee of a partnership firm is the employee of all the partners. If any employee

breaches a duty of care, then the partners will be liable for the employee‟s actions

following the principle of vicarious liability. In certain situations, it has been

observed that a person is not vicariously but directly liable for the loss or damage

caused to another person for the action of a third person with whom he/she has a

relationship (Alberta Law Reform Institute, 1998). For example one allows his/her

drunk driver to drive the car that his/her office has provided to him/her. Now, that

drunk driver causes an accident in the road injuring a person. In that case, he/she

will not be vicariously liable for his/her driver‟s action. But he/she will be directly

liable since he/she should not have allowed the driver to drive the car in that state.

The employer, who has provided the car to him/her, will be vicariously liable for

his/her negligence. This case is different from the case mentioned earlier as, in this

instance, his/her driver was drunk and by allowing him/her to drive, the person was

causing probable danger for the general public. It is interesting to note that in a

26
situation, where contractual liability exists, vicarious liability will not find any

place (ibid.). For example, a firm had a contractual liability to provide a type of

good of a certain quality to its customer. But its employee did not provide it to the

customer as he/she was not following the instructions. In this case, the firm will

not incur vicarious liability for its employee‟s actions but will incur contractual

liability towards the customer. Now, if the law imposes duty of care on the

employee, then the employee will incur tort liability. Moreover, in such a situation,

the firm will incur both contractual and vicarious liability for the same action

caused by its employee. Sometimes, it is found that two or more persons may be

liable for the same loss. There may be different situations leading to this

consequence. Sometimes, one person becomes directly liable for the loss and

another person incurs vicarious liability on account of his/her relationship with the

person who has become directly liable. Sometimes, two or more independent

actors incur direct liability for the same loss and in these cases, there is no

existence of vicarious liability but there is the existence of multiple direct liabilities

(ibid.). A simple illustration can explain the above point. For example, A and B

dump garbage in front of C‟s house. As a result of this, C suffers from a disease

due to that garbage and he/she is admitted to the hospital for its treatment. In this

case, both A and B will be directly liable for the damage caused to C. Now, if this

point is extended a bit further and one assumes that A and B are servants of E and

F and they are dumping garbage in front of C‟s house with the consent of their

employers. In this kind of a situation, E and F will be vicariously liable for the loss

suffered by C in this regard.But in the above example it is not clear what will be

the amount of liability of each actor. Such a matter may be resolved with the help

of the Doctrine of Joint and Several Liability.

27
If parties have joint liability for an obligation, each one of them is liable for the

whole amount of the obligation. If husband and wife take a loan from the bank and

if one of them dies, then the other party will be liable for the entire amount of loan

outstanding. But in implementing this principle, it must be remembered that the

creditor has only one course of action, i.e., he/she can sue for the same obligation

only once. For example, three partners are jointly liable for the debt and the

creditor sues all of them for the outstanding amount and one of the partners pays

the entire amount. Then the creditor cannot recover anything for the same debt

from the other partners. The converse to the above doctrine is that of several or

proportionate liability where each party is liable for his/her own share of

obligation. This can be found in case of syndicated loan arrangements where each

bank is liable for its own share of loan advanced to its customers. If a bank fails to

advance its share of loan, only it will be held liable and the other banks in the

syndicate will not share its liability.

(http://en.wikipedia.org/wiki/Joint_and_several_liability). Finally, in case of joint

and several liability, each actor is liable for the whole amount of loss since each

one of them has been the contributor of the entire loss (Alberta Law Reform

Institute, 1998). But, if each actor‟s action is distinct and can be distinguished

from one another, then each one of them is liable only for his/her own share of

loss. If theoretically, the tortfeasors‟ loss is divisible but, in reality, that is

indivisible, then the court will take that to be indivisible as it becomes difficult to

ascertain whose action has caused what part of damage (Fleming, 1992). In the

above example, both A and B will be liable for entire loss, that is, the cost of the

treatment of C. If A pays for the entire loss suffered by C, then he/she may recover

B‟s share of loss from B himself/herself but this is of no concern to C. Thus, in

28
this form of liability, a claimant may recover the damages from a defendant who

may, in turn, recover respective shares of damage from the other defendants

(http://en.wikipedia.org/wiki/Joint_and_several_liability).

The above discussion indicates that there is a significant matter that requires

attention and analysis. The professionals, especially the auditors, do not encourage

the idea of joint and several liability in recent years. There are two reasons that

may be cited for this discouragement. According to the Canadian Institute of

Chartered Accountants (CICA) and the ICAA, the audit firms become soft targets

of huge claims due to the principle of joint and several liability, when their audit

clients fail. Both the institutes claim that the managers of such failed companies

are principally responsible for the companies‟ failure but their assets and liability

insurance fall short to meet the investors‟ losses (Alberta Law Reform Institute,

1998). Secondly, these two bodies also claim that the audit firms eventually end up

paying for higher proportion of claimants‟ losses than they are responsible for. The

CICA has stated that, in majority of the occasions, the audit firms end up paying

for hundred per cent. of the losses, whereas their responsibility is only to the extent

of one per cent. The remaining ninety-nine per cent. of the damage is caused due to

the action of other defendants who may be declared bankrupt during the process or

whose asset or liability insurance coverage becomes inadequate (CICA, 1996).

Due to the above cited reasons, the professional bodies, especially the auditing

professionals, demand a shift from joint and several liability to a regime of

proportional liability. The essence of proportional liability is that each defendant

will be liable only for that proportion of loss to the extent he/she is responsible for

as determined by the court (ibid.). In a situation where it is estimated that the

investors have suffered a total loss of Rs. 100 lakh of which the managers of the

29
company are responsible for eighty per cent. of the loss and the auditors

responsible for remaining twenty per cent. of the loss, then the auditors will be

liable to pay only Rs.20 lakh. Now, if, in this situation, the managers become

bankrupt and turn out to be incapable to pay for the investors‟ losses, then it is the

claimants‟ responsibility and such burden will not be shared by the other

defendants (Alberta Law Reform Institute, 1998). The question that may arise here

is, if replacement of joint and several liability with proportional liability is justified

from the viewpoint of the auditors, whether such replacement will be justified from

the viewpoint of the innocent investors. This argument is limited not only to one

place or the audit profession only. In the USA, many states have replaced the joint

and several liability with proportionate liability. In 1995, the Congress enacted a

law for settlement of private litigation, involving a complicated scheme of

proportionate liability under the Private Securities Litigation Reform Act, 1995

(ibid.). In the UK, the Common Law Team conducted a feasibility study to

examine the appropriateness of the shift from joint and several liability to

proportionate liability and it concluded that such a shift is not justified. But the

Institute of Chartered Accountants of England and Wales (ICAEW) was not

satisfied with that team‟s responses of and it published its own viewpoint on the

issue (ICAEW, 1996). In New South Wales as well, the New South Wales Law

Reform Commission, after examining the arguments of both the sides, also decided

that joint and several liability should prevail over proportionate liability. But its

discussion clearly indicates that other bodies in Australia have taken a different

view (NSWLRC, 1997).

Looking at the issue of providing maximum protection to the auditors, it may be

said that the joint and several liability coupled with the restricted duty of care, as

30
pronounced in the case of Hercules Managements Ltd. vs. Ernst & Young [1997],

will be more beneficial than the proportionate liability. This is because the joint

and several liability coupled with restricted duty of care would imply that the

auditors need not have any duty of care towards the investors but they owe duty of

care to the company only. So, even when the auditors would be responsible for

causing losses to the investors partially, they would be relieved from such

proportionate amount of liability (Alberta Law Reform Institute, 1998). But again

the question remains whether this form of an arrangement would be ethical and

justified in relation to the innocent investors who have not committed any fault.

The point is whether there is any difference between joint and several liability that

arises in a situation of vicarious liability and joint and several liability that arises in

a situation of direct liability. In the former case, the relationship of one party with

another is considered to justify or not the imposition of someone‟s liability on

some other person who does not have direct causal connection or link with the

claimant‟s loss. But in the latter case, any such relationship need not be

considered. As long as each one of them is directly responsible for the same loss,

each one of them is held liable. The former one may be termed as internal joint and

several liability and the latter may be termed as external joint and several liability

(ibid.).

Section C: Rationale for Allowing and Not Allowing Persons to Practise in

Limited Liability Entities It is well known that the joint stock company form of an

organisation is the most popular form of organization because of its various

attributes like separate legal entity, perpetual succession, transferability of shares,

separation of ownership from management, limited liability, etc. It is also known

that this limited liability feature or liability shield prevents the shareholders from

31
incurring personal liability for the liabilities of the company. However, this

liability shield is a theoretical concept for closely-held companies as the

shareholders would be liable to provide personal guarantees to the bank. It is this

immunity from unlimited liability or liability shield that attracts many people who

are not allowed to practise in limited liability entities. Among those people, it is

observed that certain professionals like Chartered Accountants, Company

Secretaries, Cost and Management Accountants, lawyers, etc., are included. In all

the forthcoming discussions, this group will be referred to as the „professionals‟. It

is found that the professionals want to practise in a limited liability entity in the

form of LLP due to the liability shield. According to the LLP Act, 2008, every

partner of the LLP is an agent of the LLP but he/she is not acting as the agent of

another partner. The LLP, being a separate legal entity shall be liable to the full

extent of its assets but the liability of the partners will be limited to their respective

contributions only. An LLP is liable for the wrongful act or omission on the part of

a partner in the ordinary course of business of the LLP. The liability of the LLP,

whether contractual or otherwise, will be met out of the properties of the LLP only.

A partner will not be liable only because he/she is the partner of the LLP.

Moreover a liability shield is extended to the partners whereby a partner is not

liable for the wrongful act or omission of any other partner but would be liable for

his/her own wrongful act or omission (http://wirc-

icai.org/wirc_referencer/Other%20Law/LLP.htm). The question that arises is that,

if other enterprises can have the choice of practising in limited liability enterprises,

then why the professionals cannot be allowed to do so. This leads to the next

logical question of whether there is any difference between these groups of

professionals and other enterprises.

32
Generally the legal rules around the world require the persons to pay damages for

the harm caused to other persons. There can be two justifications for imposing civil

liability for harm caused to some other person, namely, deterrence and

compensation. The deterrence factor will induce an individual to evaluate the risk

of incurring civil liability when thinking about the possible courses of action. Thus,

the objective of any civil liability rule should be to induce the actors to undertake

actions that maximise social welfare (Alberta Law Reform Institute, 1998) and

minimise harm to the society. But the question is how such maximisation of

welfare can take place.

One way may be to frame liability rules in such a way that the actors entering into

contracts have the incentive to honour the contracts. Another possible way may be

to induce the actors to adopt socially optimal level of care if their activities are

likely to cause harm to the members of the public. But this socially optimal level of

care is not the maximum level of care that the actors can take. This is because the

law of diminishing returns applies to the action of „taking care‟ (ibid.). At one

point of time, the actor may realise that the reduction of risk that arises from

additional care does not justify the cost of taking more care (Shavell, 1987).

Based on the above discussion, the question that arises is that if professionals are

allowed to practise in limited liability entities, then whether this would impact the

quality of their services. The question can also be reframed as whether such move

would reduce their incentive to take due care. Now, logically speaking, a probable

impact on the quality of service would take place. But then it becomes necessary to

gauge whether such impact would cast positive or negative influence on the society

as a whole. From an economist‟s point of view, it is not always bad if the

modification in liability rules would reduce the incentive to take care. This may

33
happen in a situation when the professionals actually take care that is higher than

the socially optimal level of care. This is because the savings that would be

generated from the reduction of care would exceed the incremental cost of

accidents or harm resulting from such reduction of care. Thus, the benefit flowing

in from the reduction of care would surpass the cost that arises from the reduction

of care. Such net benefit can be passed on by the professionals to their customers

in the form of reduced prices for their services. However, generally it is presumed

that the professionals would not actually adopt a level of care that is higher than

the acceptable level and, in that case, any further reduction in the level of care

would definitely be undesirable from the social point of view (Alberta Law Reform

Institute, 1998).

Till now, the deterrence factor is considered as the justification for imposing civil

liability. Though it is well known that civil liability rules are designed in a manner

that they may modify the behaviour of the actors and induce them to take care,

another factor that plays a crucial role in real life situations is the compensation to

be paid to the victims of professional misconduct. It is, therefore, extremely

important to consider whether the practice by the professionals as limited liability

entities would reduce the compensation to be paid to the innocent victims of

professional misconduct (ibid.).

It has been observed that the professionals claim that they are affected by the

liability crisis which is the outcome of joint and several liability. They say that the

blending or merging of the social factors along with the legal doctrines has

aggravated the crisis. So they want a reform in this aspect but not through

practising in LLPs. They think that such a move will not be a solution to the crisis

but a move to alleviate the crisis. What they really want is the replacement of joint

34
and several liability with proportionate liability (ibid.). Proportionate liability

refers to a situation where parties are only liable for their respective obligations

(http://en.wikipedia.org/wiki/Joint_and_several_liability). In order to have an idea

of the arguments and the claims put forward by the professionals, the arguments of

certain professional bodies like the CICA, the Institute of Chartered Accountants

of Alberta (ICAA) and the Certified General Accountants Association of Ontario

(CGAAO) have been referred to. Their arguments relating to certain factors,

namely, importance and significance of their services, grounds of liability crisis,

reasons of such liability crisis and possible outcomes of such crisis, have been

summarised.

The significance of the audit function in the modern economy is well known.

Companies generally should submit audited financial statements to the various

authorities, investors and members of the general public. According to the CICA,

subject to certain exceptions, the law of the land in Canada requires the

incorporated businesses to appoint auditors for auditing the financial statements

which can be placed before the shareholders, securities commission, regulatory

authorities and the general public. The CICA has also clarified that the banks,

financial institutions and the general suppliers of goods to the company consider

the audited financial statements and the auditor‟s report for evaluating the credit

worthiness, solvency, profitability position, etc., of the company. This is because

the audited financial statements, along with the auditor‟s report, provide them the

assurance and the support for the decision they would be taking with respect to the

company. So the CICA thinks that the legislators should take some active role if

problems continue to threaten their survival and existence (CICA, 1996). The

CICA and the ICAA have put forward two grounds in support of their claim for

35
audit liability crisis. They state that the number of claims against the auditors has

been on the increase and liability insurance coverage is both scarce and costly

(Alberta Law Reform Institute, 1998).

There has been a rise in the number of claims of substantial amounts against

auditors of failed companies (CICA, 1996; ICAA, 1994) and sometimes the

amount of settlement and the amount determined by the judgement(s) have

exceeded the firm‟s liability insurance coverage. This has, in turn, paved the way

for the firm‟s and the partner‟s bankruptcy (ICAA, 1994). It is generally found

that the actual burden of claim is far higher than the amounts paid to the plaintiffs

since there are associated direct and indirect costs in defending the firms

themselves. However, the CICA‟s and the ICAA‟s lists of claims against the firms

have surpassed the actual number of judgements and settlements especially in

Canada. But the large numbers of settlements that are referred to are routed to the

litigations in the USA (Alberta Law Reform Institute, 1998).

According to the CICA and the ICAA, premium for liability insurance coverage

have increased dramatically and this has made procurement of liability insurance

coverage difficult for the auditing and accounting firms. The situation is worse for

the largesized firms than for the small-sized and medium-sized firms (CICA, 1996;

ICAA, 1994). This is because large-sized firms require huge amounts of coverage

which are generally not available. The CGAAO also agrees with the CICA and the

ICAA on the above-mentioned issues of high cost and scarcity of liability

insurance coverage (Alberta Law Reform Institute, 1998). The reasons for audit

liability crisis may be summed up under three factors, namely, magnitude of claims

against the accountants and auditors, structure of the audit industry, and a mix of

different legal doctrines (ibid.). According to the CICA, due to the influence of

36
these factors, auditors are regarded as insurers of the entities they audit and the

general public does not understand that their basic role is to express an opinion on

the financial statements only (CICA, 1996). It may happen that the audited

companies fail in due course or the prices of their securities drop substantially. In

such a case, the shareholders, creditors, investors, etc., who have suffered losses

will definitely look for compensation. But the assets of such failed companies may

fall short of the claims raised by the various parties for the losses they have

suffered. Then their attention will be diverted towards the auditors as they have

expressed the opinion that the financial statements fairly represent the financial

position of the company, which in reality, is proved wrong due to the failure of the

company. If this is proved to the satisfaction of the court of law, then some persons

who have suffered damages, by relying on the inaccurate financial statements, will

have claim against the auditors. This will make the auditors‟ position very much

vulnerable as they will be faced with huge claims from different groups of people.

It is this concern of the professionals or more specifically the auditors that have led

to the demand for practising in limited liability entities. In New South Wales, there

is a practice of limiting or capping the professionals‟ liability to a specific amount.

One basic argument against the scheme of professionals‟ liability is that it benefits

the defendants at the cost of plaintiffs who have suffered damages due to the

actions of the former group. The implications of such capping of professionals‟

liability will be discussed in the succeeding sections in detail (Alberta Law Reform

Institute, 1998). The structure of the accounting and auditing industry also

contributes to the liability crisis faced by the professionals. It is found that the

industry is dominated by few accounting and audit firms who control the

accounting and audit work of the major companies. The consolidations or mergers

37
in the accounting and auditing industry have led to the growth of market

dominance by few firms. According to the CGAAO, on the one hand, it has met

the needs of multinational companies who expect crossjurisdictional expertise from

the accounting and audit firms, thereby increasing the firms‟ market advantage.

But, on the other hand, it has also increased the exposure of such firms to huge

claims due to the failure of the audited companies (CGAAO, 1997). Lastly, the

collage of legal doctrines in the form of tort liability, joint and several liability and

unlimited liability aggravates the problem of liability crisis of the professionals.

The professionals think that potential tort liability to the non-clients adds to their

problem of liability crisis. The highest courts of Canada, the UK, Australia, etc.,

have taken significant steps to reduce the chance of the professionals to incur tort

liability to the non-clients in connection with their routine work. The professionals

also consider that the existence of joint and several liability compels them to bear

huge losses than their fair share of the losses suffered by the investors, creditors,

etc., of the said company. Unlimited personal liability does not affect the firm‟s

liability but it increases the risk faced by the individual partners of the firm

(Alberta Law Reform Institute, 1998). In a situation, the partner of a particular

state in a national firm may turn bankrupt due to the claims placed against the firm

on account of negligence of another partner based in another state. This particular

partner who has turned bankrupt may not even know the faulty partner but will

have to bear the loss due to the faulty partner‟s negligence on account of the

presence of unlimited personal liability (ICAA, 1994). Thus, it can be observed

that the presence of unlimited liability increases the effect of the other factors like

the magnitude of huge claims, scarcity and huge cost of liability insurance

38
coverage, tort liability, joint and several liability, etc. (Alberta Law Reform

Institute, 1998).

The existence of the ongoing liability crisis threatening the professionals may have

an impact on the economy as a whole. Firstly, professionals especially the auditors,

will resort to various self-defensive measures that will restrict the quality of service

that they deliver (CICA, 1996; ICAA, 1994). They will also be less inclined to

accept engagements in risky areas like initial public offerings (IPOs), high

technology-based companies, financial institutions, etc., as claimed by the ICAA

(ICAA, 1994). Secondly, according to the ICAA and the CICA, this crisis may

give less incentive to the students to enter into this profession and may also result

in the change of profession among the existing professionals (CICA, 1996; ICAA,

1994).

Moreover, according to the CICA, the auditors may decline to provide services in

the areas like forward-looking data, additional financial disclosures, etc., for which

there is an increasing demand (CICA, 1996). As a result of all the above outcomes

of liability crisis, the professionals may raise the fees for their service. This is

because the threat of liability crisis will definitely increase the direct and indirect

costs of their liability burden in the form of cost of defending law suits, high

insurance premia paid, damages paid in excess of the insurance coverage, etc. All

these costs will be ultimately recovered by the professionals in the form of high

fees from the concerned company, investors and finally from the consumers of the

product. At the end of all discussion, it is observed that eventually it is the ordinary

people who are the victims of liability crisis faced by the professionals (Alberta

Law Reform Institute, 1998).

39
Till now, it has been discussed that crisis faced by the professionals or more

specifically by the auditors is threatening their existence and this threat is

compelling them to make demands for a limited liability entity. In support of the

above idea, the claims placed by the ICAA, CICA and CGAAO have been put

forward. But it is also necessary to consider the the other side of the argument as

well. It is necessary to evaluate whether there is at all any crisis threatening the

survival of the professionals or whether such crises are somewhat created by them.

In order to have a glimpse of the other side of the argument, two factors have been

identified by Professor Abraham Briloff, a senior member and a critic of the

American accounting profession. He has cited two factors for explaining the crisis

faced by the professionals, namely, auditors‟ dependence and flexible accounting

standards (ibid.). It is well known that, since in joint stock companies there is a

separation of ownership from management, it is necessary to check management‟s

stewardship of the investors‟ funds. It is for this reason that auditors are appointed

to express opinion on the truth and fairness of the financial statements. It is also

known that the statutory auditors are generally appointed by the shareholders in the

annual general meetings by passing ordinary resolution. Theoretically speaking,

the management does not have any influence in the appointment of the auditors

but, in reality, management does cast an influence on the appointment. Moreover,

auditors are also appointed by the management for other services to the companies

(ibid.).

This kind of a situation is likely to create some conflict between the auditors‟ duty

towards the shareholders and investors and the self-interest of the auditors. But it is

not necessary that such conflict will lead to the subordination of the auditor‟s

statutory duty to his/her self-interest. This is because, if the auditor chooses

40
selfinterest over statutory duty, it may jeopardise his/her credibility in the long run.

Other deterrents that may prohibit the auditor from doing so are the possibility of

civil liabilities and proceedings of the professional bodies (Lee, 1993). The

auditors are not only concerned about losing their audit engagements and fees

associated with that but also the fees generated from non-audit work of the client

companies (Alberta Law Reform Institute, 1998). The revenue potential of

management advisory services, even narrowly defined, has been increasing. Within

a few years, management advisory services may begin to play the pivotal role in

income generation of audit firms (Fogarty, Heian and Knutson 1991). One school

of thought suggests that simultaneous audit and management advisory services

should not be allowed in the same company. Another school of thought suggests

that such an arrangement will lead to cost savings by the company, thus, benefiting

the company (Lee, 1993). It is known that, in India, the National Advisory

Committee on Accounting Standards (NACAS), with the advice of the Institute of

Chartered Accountants of India (ICAI), frames the accounting standards from time

to time. Thus, although the professionals individually do not frame the accounting

standards, it is the professional bodies that play the role of framing such flexible

standards. Some critics contend that the inherently difficult task of the auditors is

made more difficult by the presence of alternative or flexible accounting standards

(Briloff, 1976 and Fogarty, Heian and Knutson 1991). Such flexible accounting

standards pave the way for creative accounting. It has also been observed that the

professional bodies are not interested to reduce the alternative accounting

standards even though that may reduce the complexity of the auditor‟s task

(Fogarty, Heian and Knutson 1991). Hence, after a discussion on the rationale of

whether to allow professionals to practise in limited liability entities or not, it is

41
necessary to judge the impact of that on the quality and the price of the services

rendered by the professionals.

42
OBJECTIVES
OF THE STUDY

43
 OBJECTIVES OF THE STUDY

1. To study the level of customer satisfaction towards Open Wings Foundation in

Lucknow City.

2. To Study the customers requirement from the Open Wings Foundation.

3. To Study customer opinion about services of Open Wings Foundation.

4. To study the factors those satisfy and delight the customer.

44
 RESEARCH
METHODOLOGY

45
 RESEARCH METHODOLOGY

Research is a common parlance which refers to search for knowledge. It is a

procedure of logical and systematic application of the fundamentals of science to

the general and overall questions of a study and scientific technique, which provide

precise tools, specific procedures, and technical rather philosophical means for

getting and ordering the data prior to their logical analysis and manipulating

different type of research designs is available depending upon the nature of

research project, availability of manpower and circumstances.

RESEARCH DESIGN

A research design is the arrangement of conditions for collection and analysis of

data in a manner that aims to combine relevance to the research purpose with

economy in procedure. In fact, the research design is the conceptual structure

within which research is conducted. This research was descriptive in nature

DESCRIPTIVE RESEARCH:

The research undertaken was a descriptive research as it was concerned with

specific predictions, with narration of facts and characteristics concerning a study

on customer satisfaction of Open Wings Foundation Services in Noida.

a. Methods of Data Collection. There are several methods of collecting primary

data, particularly in surveys and descriptive researches. In descriptive research,

we obtain primary data either through observation or through direct

communication with respondents in one form or another or through personal

interviews. I have used questionnaires(Primary) and Internet source

(Secondary) for data Collection

b. DATA SOURCE

46
 There were two types of data sources used in this research. These were

PRIMARY DATA

Primary data is the data collected for the first time from the source and never

have been used earlier. The data can be collected through interviews,

observations and questionnaires.

SECONDARY DATA

Secondary data is the data collected from already been use or published

information like journals, diaries, books, etc .In this research project, secondary

source used were various journals, and website of various online journals.

c. SAMPLE DESIGN

A sample design is made up of two elements. Sampling method. Sampling

method refers to the rules and procedures by which some elements of the

population are included in the sample. Some common sampling methods are

simple random sampling, stratified sampling, and cluster sampling.

I have used simple random sampling for study.

d. UNIVERSE OF STUDY: Universe of the study means all the Customers

of Open Wings Foundation in Noida.

Sample Area: Noida

e. SAMPLE TYPE

I have used Random sample for study.

f. SAMPLE SIZE: A sample of minimum respondents will be selected from

customers of Open Wings Foundation Services in Noida. An effort was made

to select respondents evenly. The survey was carried out on100

respondents.

47
g. SAMPLE UNIT: customers of Open Wings Foundation Services in Noida

h. STATISTICAL TOOLS TO BE USED: A structured questionnaires is used

to collect the data and data will be analyzed with the help of percentage table,

respective graph, bar graph and pie charts.

i. TOOLS OF PRESENTATION:

It means what all tools are used to present the data in a meaningful way so that

it becomes easily understandable. In this research tables and graphs were used

for presenting the data.

48
 DATA
ANALYSIS AND

INTERPRETATION

49
 DATA ANALYSIS AND INTERPRETATION

1. Are you satisfied with services before purchasing Services in Open Wings
Foundation office?

% OF RESPONDENT

6% Excellent
14% Good
Average
Below average
54%
26%

INTERPRETATION –

It is observed that, 54% of the customers are highly satisfied with the Pre-purchase

services and 6% are dissatisfied with the Pre purchase services.

50
2. What is your opinion about the Open Wings Foundation Services for Value
for Money?

VALUE FOR MONEY

Above Expectatiom As per Expectation Below Expectation

20%

38%

42%

INTERPRETATION –

42% of the respondents are of opinion that Open Wings Foundation Services are as
per expectation & 20% are of the opinion that the Open Wings Foundation
Services are below expectation.

51
3. Are you satisfied with the after sales services of Open Wings Foundation?

POST PURCHASE SATISFACTION OF THE

CUSTOMER
Excellent Good Avverage Below average

5%

20% 30%

45%

INTERPRETATION –

It is observed that, 45% of the customers are highly satisfied with the Post-

purchase services And 5% are dissatisfied with the Post purchase services.

52
4) Rank the following Parameters on Your purchase Preference?

PERCENTAGE

10% 15% Price

Quality
15% Availability
Involvement
Recommendation

35%
25%

INTERPRETATION

Most of the respondents prefer quality followed by price and availability. This

response shows that customers are ready to pay of quality.

53
Q5) Does Purchase of Services is directly related to income level?

PERCENTAGE

10%

YES
NO

90%

INTERPRETATION

The result was totally skewed to one side and respondents agree that Purchase of

Services is totally related to the Income level of an Individual which is 90%.

54
Q6) Why does one person purchase a Open Wings Foundation?

PERCENTAGE

10%
Quality
Exclusivity
15% Interested in Art
50% Flaunt Value

25%

INTERPRETATION

In opinion of respondents, majority of people buy Services because they want to

flaunt their superiority over others.

55
Q7) Does quality of Open Wings Foundation is more superior then others?

PERCENTAGE

10%
Strongly Agree
10%
Agree
Neutral
Disagree

20% 60%

INTERPRETATION

On the basis of Analysis 80% of the respondents believe in the superior quality of

Services.

56
Q8) What is the factor that effect most while purchasing a Open Wings
Foundation?

PERCENTAGE

10%
Price
Quality of Services
Good quality of
40% 20% manpower
Staffing
LMS

5%

25%

INTERPRETATION

On the basis of the Analysis, we found that majorly people tend to see as brand of

the Services as the major factor that affects the buying decision of a customer and

other factors that are too taken into considerations.

57
9. What is your remark about services of Open Wings Foundation?

NO. OF RESPONDENT

3%

15%
32% Excellent
Good
Average
Below average

50%

INTERPRETATION –

It is observed that, 55% of the customers are satisfied with the services, and 3% are

not satisfied.

58
10. What is your expectation for improvement in Open Wings Foundation?

14% 16%
Price

24% Quality

Service
46%
Other

INTERPRETATION –

46% of the customers are of opinion that Open Wings Foundation should improve

in quality, 24% of the customers feel that they should improve their services, Rest

opted for the quality.

59
11. What is your repurchase intention?

NO. OF RESPONDENT

26%

Yes
No

74%

INTERPRETATION –

It is observed that, 74% of the customers are ready to repurchase the Open Wings

Foundation’s service, 26% are not ready to purchase the service.

60
12. Will you recommend Open Wings Foundation Services to others?

RECOMMANDATION TO FRIENDS/RELATIVES

28%
Yes
72% No

INTERPRETATION –

It is observed that, 72% of the customers are ready to recommend the service to the

friends and relative, 28% are not ready to recommend the service to the friends and

relatives.

61
13. What is your preference about Open Wings Foundation?

38%
Yes
62% No

INTERPRETATION –

It is observed that, 62% of the customers are ready to prefer Open Wings

Foundation Services, 38% are not ready to prefer Open Wings Foundation

Services.

62
14 ) Are you satisfy with the Manpower of Open Wings Foundation?

Source: Questionnaire

CUSTOMER OPINIONS TOWARDS MANPOWER

7%
27%
17%

More Satisfied
Satisfied
Not Satisfied & Dissatisfied
Dissatisfied

49%

Source - Questionnaire

INTERPRETATION :

100% of the respondents 49% of the respondents approached were satisfied with

the Manpower of the Open Wings Foundation. Followed by 27% was extremely

satisfied, 17% are neutral and rest of the 7% is more dissatisfied with Manpower of

Open Wings Foundation.

63
15 ) Are you satisfied with the Recruitment of Open Wings Foundation?

CUSTOMER OPINIONS TOWARD

RECRUITMENT SERVICES

10%
23%

20%
Extremely Satisfied
Satisfied
Neutral
Dissatisfied

47%

INTERPRETATION :

100% of the respondents 47% of the respondents approached were satisfied with

the recruitment feature of the Open Wings Foundation. Followed by 27% was

extremely satisfied, 17% are neutral and rest of the 7% was dissatisfied with

recruitment feature of Open Wings Foundation.

64
16) Are you satisfied with the Training Services?

CUSTOMER OPINIONS TOWARD TRAINING

SERVICES

13%
20%

Extremely Satisfied
27% Satisfied
Neutral
Dissatisfied

40%

INTERPRETATION :

100% of respondents 40% of the respondents approached were satisfied with the

Training SERVICES of the Open Wings Foundation. 20% were more satisfied,

27% of them neutral and 13% are dissatisfied with the Training SERVICES of the

Open Wings Foundation.

65
17 ) Are you satisfied with E-Learning Services cost?

E-Learning Services

5%
23%
21%
Extremely Satisfied
Satisfied
Neutral
Dissatisfied

51%

INTERPRETATION :

The sample drawn on the probability basis shows that out of 100% of respondents

51% of the respondents approached were satisfied with the E-Learning Services of

the Open Wings Foundation. 23% were extremely satisfied, 21% of neutral and 5%

are dissatisfied with the E-Learning Services.

66
18)Are you a satisfied with Open Wings Foundation?

22%

Satisfied
Dissatisfied

78%

INTERPRETATION :

The sample drawn on probability basis shows that 78% of the customers were

satisfied with Open Wings Foundation and only 22% were not satisfied with Open

Wings Foundation.

67
FINDINGS

68
 FINDINGS
1. Open Wings Foundation has excellent percentage of customer satisfaction

according to the data analysis and Interpretation.

2. Most of the people are satisfied with its low E-Learning Services and

Training service provided by Open Wings Foundation

3. Based on the Manpower, most of the people are satisfied with it.

4. Based on Recruitment, Training services, E-Learning Services most of the

people are satisfied with it.

5. If we took the satisfaction level of people toward Open Wings Foundation,

it becomes good.

6. Open Wings Foundation should continue to maintain the standard of the

service.

7. Customer are highly satisfied with the service which help in customer

retention

69
RECOMMENDATIONS

70
 RECOMMENDATIONS

 Open Wings Foundation has to implement good customer relationship

management strategy that enhances customer satisfaction level.

 The company can undertake R&D to improve the existing feature which helps

to increase the customer satisfaction.

 As majority of the respondents are satisfied with the recruitment feature of

Open Wings Foundation, the company should maintain the same standard and

it is suggested to come up with suitable measure to reduce the negative opinion

among the consumer who are of the opinion that the Manpower is a

dissatisfying factor.

 As such, Open Wings Foundation should focus on the aspects, which will

enhance the customer satisfaction and thus the market share.

71
 LIMITATIONS
.

72
 LIMITATIONS OF STUDY

 The scope of study is limited to the respondents are selected from in and

around Noida,

 Measurement of customer satisfaction is complex subjects, which uses non-

objectives method, which is not reliable.

 The sample unit was also 100 respondents.

 There may be some biased response from the respondents.

 Some respondents did not provide the full data.

73
CONCLUSION

74
 CONCLUSION

Open Wings Foundation is the best job board. The Open Wings Foundation have

best ATS resume software as per needs of job researcher. The Open Wings

Foundation also help customers to clear the interview with of expert, experts will

conduct webinar for customers. The staff of the Open Wings Foundation also

helpful for the customers and employee’s problem related to the management

system or for customers provide the resume in 24 hours. The Open Wings

Foundation also part of officially Samsung India partner and google education

partner. They provide more powerful ATS RESUME which designed by AI and

for webinar send mail to customers. The Open Wings Foundation also provide

proper guidance to the employers. Open Wings Foundation need to work more

precisely on their promotional strategy as because this could allow them to invite

the customer at a vide extent and would give the Open Wings Foundation an

opportunity to expand themselves. The Open Wings Foundation have unlimited

resume for customers. The Open Wings Foundation provides best facilities to the

trainers because the Open Wings Foundation employers doing hard work.Divide

Only 10 interns in single batch so the easily gives training them and solve the

query easily how to do work. The Open Wings Foundation directly contact with

their customer. Open Wings Foundation have branches in various part of the city.

Open Wings Foundation need to make themselves introduced to the market

through various forms of advertisements. Open Wings Foundation also change

their techniques according to the current update. The training should be sufficient

as the satisfaction of the learners

It becomes quite clear there is no their alternative of short cut to the development

of marketing mix for HR business used in a planned purposeful manner the

75
effective tool for management which help to increase knowledge and skill and also

to increase the productivity and wealth of the organization.

76
BIBLIOGRAPHY

77
 BIBLIOGRAPHY

 Kotler, P (2002),”Marketing Management”, Millennium Edition, Tenth

Edition, Prentice Hall, Inc, A Pearson Education Company, Upper Saddle

River, New Jersey ,pp.

 Hair, Joseph, F., Anderson, Rolph, E. and Tatham Ronald, L. (1987),

Multivariate Data Analysis, New 'fork: MacMillan Publishing Company.

 Helen Woodniffe (1997), "Financial Sewices Marketing", Services Marketing,

Macmillion, Delhi.

 Hill, N., (1996), Handbook of Customer Satisfaction Measurement, Gower

Press, Alders hot, UK.

 Jay ram, N. and Sandhog, R.S. (1998), Housing in India - Problems, Policy and

perspectives, B.R. Publishing Corporation, Delhi.

 Jeffrey Gitomer (1998), Customer satisfaction is worthless: Customer loyalty is

priceless: How to make customers love you, keep them coming back and tell

everyone they know, Austin TX: Board Press.

78
ANNEXURE

79
 QUESTIONNAIRE

Name: - Gender:-

Address: -

1. Are you satisfied with services before purchasing Services in Open Wings
Foundation office?
a) Excellent
b) Good
c) Average
d) Below average

2. What is your opinion about the Open Wings Foundation Services for
Value for Money?
a) Above Expectation
b) As per Expectation
c) Below Expectation

3. Are you satisfied with the after sales services of Open Wings Foundation?
a) Excellent
b) Good
c) Average
d) Below average

4) Rank the following Parameters on Your purchase Preference?

a) Price
b) Quality
c) Availability
d) Involvement
e) Recommendation

5) Does Purchase of Services is directly related to income level?

a) Yes
b) No

80
6) Why does one person purchase a Services?

a) Quality

b) Flaunt value

c) Interested in art

d) Exclusivity

7) Does quality of Open Wings Foundation Service is more superior then

others?

a) Strongly agree

b) Agree

c) Neutral

d) Disagree

e) Strongly disagree

8) What is the factor that effect most while purchasing a Open Wings
Foundation?

a) Price
b) Quality of Services
c) Good quality of manpower
d) Staffing
e) LMS
9. What is your remark about services of Open Wings Foundation?
a) Excellent
b) Good
c) Average
d) Below average

10. What is your expectation for improvement in Open Wings Foundation?

a) Price
b) Quality
c) Service
d) Other

11. What is your repurchase intention?

a) Yes
81
b) No

12. Will you recommend Open Wings Foundation Services to others?

a) Yes
b) No

13. What is your preference about Open Wings Foundation?

a) Yes
b) No

14 ) Are you satisfy with the Manpower of Open Wings Foundation?

a. Extremely Satisfied
b. Satisfied
c. Neutral
d. Dissatisfied

15 ) Are you satisfied with the Recruitment of Open Wings Foundation?

a. Extremely Satisfied
b. Satisfied
c. Neutral
d. Dissatisfied

16)Are you satisfied with the Training Services?

a. Extremely Satisfied
b. Satisfied
c. Neutral
d. Dissatisfied

17) Are you satisfied with E-Learning Services cost?

a. Extremely Satisfied
b. Satisfied
c. Neutral
d. Dissatisfied

82
18) Are you a satisfied with Open Wings Foundation?

a. Yes
a. No

83