Sinhgad Business Review ISSN : 0974-0597 www.sinhgad.edu

ISSN : 0974-0597
Sinhgad Business Review
Vol. - III, Issue - I, July 2010 - December 2010
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55
60
65
www.sinhgad.edu
SINHGAD BUSINESS REVIEW
Editorial Board
CONTENT
RESEARCH PAPERS
1.
Evaluation of Internet Banking Services Quality Based on Customer Satisfaction
and Expectation - A Study of Indian Banks - Poolad Daneshvar, H. N. Ramesh .........................................01
2.
Ethical Practices in Higher Education Sector with Special Reference to Kolhapur District
- Manisha N. Paliwal ............................................................................................................................................11
3.
The Diffusion Of Online Banking Among Indian Consumers: An Empirical Study
- Neha Dixit, Saroj Kumar Datta ..........................................................................................................................21
4.
Human Capital Development: A Study of Tourism Industry in Jammu
- Jaya Bhasin .........................................................................................................................................................28
5.
The Role of Psychological Contract in Retention Management
- Babita Agarwal, Kshama Ganjiwale ..................................................................................................................36
6.
Retail Environment: Strategic linkage of store choice influencers, customer experience touch
points and customer total retail experience at national level organized retail chain stores
- Pravin Patil..........................................................................................................................................................42
7.
Case Study- On Value Methodology for Engineering Business
- Shyamkant V. Shrigiriwar ..................................................................................................................................49
ABSTRACTS
8.
Framework for Evaluation and Selection of the Software Packages: A Hybrid Knowledge
Based System Approach - Anil Jadhav , Rajendra Sonar ...................................................................................55
9.
Implications of Future Vehicular Traffic and Its Management: A Study of Pune City for the
Next Decade - Rupali Jain , V. G. Vedak ...........................................................................................................60
BOOK REVIEW
10. Book Review of "Toyota Talent - developing your people the Toyota Way" by Jeffrey K. Liker
& David P. Meier (Tata McGraw-Hill Edition)
- S. U. Gawade , Aparna Ghaisas ..........................................................................................................................65
From The Editor's Desk
We are pleased to present Sinhgad Business Review (SBR), a peer-reviewed Research Journal of Sinhgad Institute of
Management, Pune. The journal is multidisciplinary in nature and encompasses wide range of areas such as Management,
Economics, Law, Computers and Banking. Research is a powerful driver for change and a tool-cum strategy for offering
solutions to problems and challenges.
“In God we trust; all others bring data" said Dr. J. M. Juran. This issue focuses on the offbeat areas to ensure that our research
readers are thought-provoked to create insights in learning anew what is already known. This endeavor has been set-up to
encourage authentic attempts to leverage competent work place efforts by way of quantifiable and qualitative findings
through researched contributions. Researching has no boundaries but only those conditioned by criteria which help one to
upgrade. At the very outset, we express our gratitude to all the members of the editorial board and contributors of this issue.
The editorial team will continue to bring out the relevant and application oriented research through the platform of SBR.
Issac Asimov once mentioned that “Writing to me, is simply thinking through my fingers”. We, the editorial team of SBR
strongly believe in this quote and our future issues of SBR will keep on reflecting the same.
On behalf of the editorial team, we are indebted to Prof. M. N. Navale, Founder President, Sinhgad Technical Education
Society and Dr. Mrs. Sunanda M. Navale, Founder Secretary, Sinhgad Technical Education Society for their unflinching
support.
Constructive feedback is awaited to propel continuous improvement. Wish each one of you a thoughtful reading.
-SBR Editorial Team
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© 2010 Sinhgad Institute of Management, Pune. All rights reserved.
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ISSN : 0974-0597
Sinhgad Business Review
Vol. - III, Issue - I, July 2010 - Dec 2010
Evaluation of Internet Banking Services Quality Based on Customer Satisfaction
and Expectation - A Study of Indian Banks
1
Poolad Daneshvar , Dr. H. N. Ramesh
Abstract:
This paper deals with the concept of service quality and has
demonstrated the model of service quality gaps; it aims to
measure customers' gap between satisfaction levels of
interpretation of services and their preferences of the
interpretive service in internet banking at Indian commercial
banks. The research questions are utilized to measure the gap
between expectation and satisfaction levels of customers
about quality of internet banking. For this purpose a
questionnaire with five-point Likert scale is applied to
measure customers expectation as well as satisfaction. Data
was obtained from 102 respondents and analyzed using SPSS
12 software by employing factor analysis and multiple
regressions. Results indicate that there are significant
differences between overall expectations and satisfaction
levels of customers. For practitioners, it is worth noting that
customers are exclusively concerned with the "Sufficient
menu for transaction"," Variety of services readily
accessible", "Availability for business" and "Have a userfriendly system", as important factors for them to apply
internet banking. The paper contains material relevant to the
internet banking industry, and implications are discussed and
recommendations are offered for improving internet banking
services.
Key Words: Satisfaction, Expectation, Gap model of Service
Quality
Introduction:
The digital revolution has certainly changed almost every
aspect of daily life as we step into the twenty-first century.
One of the technologies which really brought information
1. Research Scholar, B.N.Bahadur Institute of
Management Science,
DOS in Business Administration,
University of Mysore,India
E-Mail: [email protected]
2. MBA, Ph.D.
Director Kuvempu University,
PG Center, Kadur , Karnataka ,India
E-Mail: [email protected]
2
revolution in society is internet technology and it is rightly
regarded as the third wave of revolution after the agricultural
and industrial revolutions. Internet allows banks to conduct
transactions from anywhere, anytime and is used for
transactions, payments, etc. The rapid diffusion of the
Internet, in particular, has revolutionised the delivery channels
used by the financial services industry.
A major force behind these growths is technology, which is
breaching geographical, industrial and regulatory barriers,
creating new products, services and market opportunities and
developing more information- and systems-oriented business
and management processes.
Numerous factors such as competitive cost, customer service,
increase in education and income level of customers, etc.
influence banks to evaluate their technology and assess their
electronic commerce and internet banking (i-banking)
strategies. The significance of the Internet in today's
competitive and increasingly global banking environment has
been widely acknowledged (Thorton and White, 2001, 2000)
In India, commercial banks have been quick to realize the
importance of this factor to competitive advantage. The
banking industry has been a witness for the last decade to
several regulatory changes that have resulted in a heightened
level of competition among the banks. The entry of private
sector banks and foreign banks, subsequent to the
recommendation of the Narasimhan committee, has increased
the expectations of the customers in all areas relating to
customer service (Thampy and Madanmohan, 1999). Since
1990s, they have incessantly innovated, through technologysuperior products and services, such as multi-function
automatic teller machines (ATMs), electronic share
application, tele-banking, electronic transfers, electronic cash
cards, and Internet-based e-banking.
i-banking in India is a new delivery channel for banks in India.
Ravi et al (2007) declared i-banking channel as both, an
informative and a transactional medium. However, i-banking
has not become popular in India as expected. Banks with lower
market share also identify i-banking technology as a means to
increase the market share by attracting more and more
customers through this new channel of delivery of banking
services.
Applications of information technology in the service industry
2
Evaluation Gap of Internet Banking Service Quality by Using SERVQUAL Approach ?
Poolad Daneshvar ?
Dr. H. N. Ramesh
are now prevalent, and i-banking is one of the prominent
examples. For Internet users, online banking is convenient
and time-saving compared with traditional retail banking.
Nowadays, superior service quality has entered the picture as
a differentiating strategy (Zeithaml, Parasuraman and
Malhotra, 2002). The complex nature of services, attached
with the growing prominence of the services sector has also
increased the need for better service quality. Therefore, the
topic of service quality is increasingly recognized as being
one of the key strategic values of organizations in both the
manufacturing and service sectors (Lewis, 1990). Service
quality allows the companies to differentiate itself from its
competitors by increasing sales and market shares, it results in
the satisfaction and retention of customers, it leads to
enhanced post purchase behaviour and brand loyalty and
moreover, new customers are attracted through positive
word-of-mouth, (Newman, 2001; Wang et al., 2003)
On the other hand, service quality has been linked with
customer satisfaction within the banking industry (Avkiran,
1994) and has been recognised as a key strategic issue for
organizations operating in service sectors (Lewis and
Mitchell, 1990). Thus, Organisations achieving higher levels
of service quality, have high levels of customer satisfaction
and an antecedent of sustainable competitive advantage
(Lewis and Mitchell, 1990).
Literature review:
The available literatures relating to the subject under study
were scanned. These include the previous research on
customer satisfaction, customer perception, electronic
delivery of services and on the measurement of i-banking
service quality.
i-banking service quality attributes:
Over the past few decades, service organisations, including
retail banks, have been forced by such key trends as
innovation in technology and deregulation to focus greater
attention on their distribution channel strategies (Bauer et al.,
2005)
.
Liu and Arnett (2000) recognized five important dimensions
of online service quality in relation to customer satisfaction on
the website. Among these, the quality of information that is
relevant, accurate, timely, customised and complete are given
priority for the customer satisfaction in the online service.
Joseph et al. (1999) investigated the influence of the internet
on the delivery of banking services. They found six
underlying dimensions of i-banking service quality, such as
convenience and accuracy, feedback and complaint
management, efficiency, queue management, accessibility
and customisation.
Customer satisfaction and service quality:
Service quality represents the difference between customer
expectations of what a firm should provide and perceived
service performance, if expectations are greater than
performance, then perceived quality is less than satisfactory
and hence customer dissatisfaction occurs (Lewis and
Mitchell, 1990). In another word, service quality can thus be
defined as the difference between customer expectations of
service and perceived service.
Zeithaml and Bitner (2000) defined customer satisfaction as
the "customers' evaluation of a product or service in terms of
whether that product or service has met their needs and
expectations". On the other hand, Oliver (1997) defined
satisfaction as "the consumer's fulfillment response, the
degree to which the level of fulfillment is pleasant or
unpleasant".
Customer satisfaction is the leading criterion for determining
the quality that is actually delivered to customers through the
product/ service and by the accompanying servicing (Vavra,
1997). Customer satisfaction and service quality are two
distinct, though highly correlated, constructs (Bansal and
Taylor, 1997; Dabholkar et al., 2000).
Therefore understanding customer expectations is a
prerequisite for delivering superior service (Parasuraman et
al., 1991). Achieving customer satisfaction is a vital target for
most service firms today (Jones and Sasser, 1995) as it leads to
improved profits, word-of-mouth and less marketing
expenditure (Yeung et al., 2002). In case of competitive
marketplace, where businesses compete for customers,
customer satisfaction and service quality are seen as a key
differentiator and has increasingly become a key element of
business strategy and critical success factor for organisations
to build their competitive advantage and enhance their
competitiveness. Competitive advantage refers to capabilities
that differentiate an organization from its competitors and
enable it to create a defensible position over its competitors
(Porter. M.E., 1985). Competitive capabilities consist of
price/cost, quality, delivery, flexibility (Handfield.R.B, et al,
1995), and time based competition (Kessler.E et al, 1996).
Service quality based differentiation is another barrier to entry,
develops reputation for the organization and is an intangible
asset creating most of corporate growth and shareholder value.
Sureshchandar et al. (2003) looked at service quality in public,
private and foreign banks in India and Yavas et al. (1997)
studied about the relationship between service quality,
customer satisfaction, complaint behavior and commitment in
the banking industry of India. They found positive
relationships between service quality and customer
satisfaction with customer behavioral intentions (Anderson
and Sullivan, 1993; Parasuraman et al., 1988) as well as
financial performance (Yeung et al., 2002). Noel Yee-Man Siu
et al, (2005) studied about measuring service quality in ibanking in Hong Kong. They attempted to examine customers'
service quality perceptions in i-banking, as well as the impact
of these perceptions on customer satisfaction.
Rodand et al (2009) investigated about the relationships
Sinhgad Business Review ?
ISSN : 0974-0597 ?
Vol. - III, Issue - I, July 2010 - December 2010
among three dimensions of service quality that influences
overall internet banking service quality and its subsequent
effect on customer satisfaction in a New Zealand banking
context. The results showed significant relationships among
online customer service quality, online information system
quality, banking service product quality, overall internet
banking service quality and customer satisfaction.
Kirti Dutta and Anil Dutta (2009) conducted research about
expectations and perceptions of the consumers across the
three banking sectors in India. They further described the
factors affecting the quality perception of the customers in the
banking sector. They found that in the banking sector it is the
foreign banks which are perceived to be offering better quality
of services followed by the private and then public banks.
They also found that these perceptions are reflected in the
financial performances of the banks. With the increasing
competition amongst banks, the findings could act as a
strategic tool to achieve competitive advantage and customer
satisfaction.
Perceptions Vs Satisfaction:
Customer satisfaction could be satisfaction with the quality of
product/service, the nature of relationship, the
price/performance ratio of a product/service, and the ability of
the product/service to meet customer's expectations
(Brown.C,1998). While perception of service quality is
considered more long-term (Parasuraman.A et al,1988),
satisfaction is more transaction-specific and transitory, and
service quality is considered a predecessor of satisfaction
(Dick. et al,1994).
Therefore, it is clear that perceived service quality and
satisfaction are closely related. However, the difference
between the two can be seen by the fact that a consumer can be
satisfied with a specific service, but at the same time may not
feel that the range of services was of high quality. Using a
similar example, Storbacka et al (1994) explored this aspect
as: "a customer could, therefore, respond on a questionnaire
that a particular bank is of high quality, even if this did not
mean this customer was satisfied with using the bank. It might
have too high interest rates on loans or it might not fit the
customer's preferences for some other reason". Sohail.M.S et
al (2008) measured the quality of service from customers'
perspective. With an enormous growth in i-banking, they
discussed how banks can be competitive by providing quality
services. Results were based on a factor analysis identifying
three factors that influence users' evaluation of service quality
of internet banking services. These factors were labeled as
"efficiency and security", "fulfillment" and "responsiveness".
Gaps Model of Service Quality (SERVQUAL):
The widespread adoption of service quality concept and the
close attention of the service firm managers to this concept
motivate the researchers to explore more solid methods for
service quality measurements and the evaluation of it
3
(Parasuraman et al., 1988; Dabholkar et al. 1996; Brady and
Cronin, 2001). For this aim, gap theory is the most accepted
model in the service literature, although some criticisms about
its validity are also discussed by researchers (Teas 1993). Zhu
et al. (2002) explored the impact of information technology
(IT) on service quality in a large consumer bank. Their results
showed that IT based services have a direct impact on the
SERVQUAL dimensions and an indirect impact on customers'
perceived service quality and customer satisfaction.
The gaps model positions the key concepts, strategies and
decisions in services marketing in a manner that begins with
the customer and builds the organization. Tasks around what is
needed to close the gap between customer expectations and
perceptions should be identified (Zeithaml and Bitner, 1996).
Not knowing what customers expect (Gap1), not selecting the
right service designs and standards (Gap 2), not delivering to
service standards (Gap 3), and not matching performance to
promises (Gap4), are the underlying causes behind the
customer gap, etc. (see Figure 1). Among these service quality
gaps, the customer gap is the most vital point to consider. The
major aim of the gaps model in this study is to analyze the
difference between customer expectations and perceptions. To
increase customer satisfaction, firms first need appropriate
measurement techniques for measuring and evaluating the gap
between expectations and perceptions. After receiving the
service, customers compare the performance of the service
provider with their expectations which are mainly influenced
by word of mouth, personal needs and past experiences. In
most of the service settings, however, customers may not get
the service level they expected before the service experience.
The performance of the service provider falls either below
customers’ expectations or above them. When expectations
are high, service is perceived to be of exceptional quality and
also to be a pleasant surprise. When expectations are not met,
service quality is deemed unacceptable. When expectations
are confirmed by perceived service, quality is satisfactory.
However, quality, which falls short of expectations, has a
greater effect on customer satisfaction than quality which
exceeds satisfaction (Zeithaml and Bitner, 1996). In the
services sector, being different has a special advantage among
rivals who offer similar goods and services. Parasuraman et al
(1988), argue that, with minor modification, SERVQUAL can
be adapted to any service organization. They further argue that
information on service quality gaps can help managers
diagnose where performance improvement can best be
targeted. The largest negative gaps, combined with
assessment of where expectations are highest, facilitate
prioritization of performance improvement. Equally, if gap
scores in some aspects of service do turn out to be positive,
implying expectations are actually not just being met but
exceeded, then this allows managers to review whether they
may be "over-supplying" this particular feature of the service
and whether there is potential for re-deployment of resources
into features which are underperforming.
Evaluation Gap of Internet Banking Service Quality by Using SERVQUAL Approach ?
Poolad Daneshvar ?
Dr. H. N. Ramesh
4
Figure 1. Model Service Quality Gaps (Parasuraman et al., 1985; Curry, 1999; Luk and Layton 2002)
Objectives of the Study:
The main objective of this study is to evaluate customers' gap
between their perception and expectation levels of
interpreting i-banking services and predicting the key factors
of the customer perceived i-banking service quality in Indian
banks. Specifically, this study attempts to examine the
effectiveness of interpretation services and to determine if the
interpretive services provided by the Indian banks meet the
needs of the general public.
Methodology used:
Sample:
A survey was conducted to evaluate customers' gap between
their perception and expectation levels according to the
SERVQUAL model at Indian commercial banks. Out of a
total of 118 customers 102 correctly completed the
questionnaires received. They were obtained from all
categories of customers from different sectors (public, private
and foreign) who used i- banking facilities in October 2009 to
January 2010.
The survey was conducted over a 6-weeks period at different
branches and at ATMs. Distribution of questionnaires was
carried out only during the official time between 11 A.M. to 4
P.M.
In this study, judgmental sampling method was employed
from customers who represented each banking sector i.e.
public, private and foreign banks and desired range of
demographic characteristics (sex, age, profession etc.) were
considered. Data was collected by personally contacting the
respondents and explaining in detail about the survey. To
ensure that the instrument reached the target, a screening
question was asked at the beginning of the questionnaire as to
whether respondents had performed a banking transaction on
the internet.
The tools used:
The primary data used for the current study has been collected
through the survey method by using the self-structured
questionnaire, which consists of three sections: First section
deals with customers' expectations and satisfaction of ibanking attributes. In this section of the questionnaire, the
Sinhgad Business Review ?
ISSN : 0974-0597 ?
Vol. - III, Issue - I, July 2010 - December 2010
Table 1 :Respondents' Demographic Profile
Demographic
Characteristics
Percentage
Gender
Male
Female
63
37
Age
Less than 25
25-35
35-45
45-55
Above 55
10
53
22
10
5
Education
Below Graduation
Graduation
Post graduation
Others
7
39
48
6
Profession
Professional
Salaried
Business
Others
18
33
45
4
Household
Monthly
Income
Under Rs 10000
Rs 10000 -20000
Rs 20000-35000
Over Rs 35000 15
7
37
41
Internet usage
frequency
Every day
4-6 times per week
1-3 times per week
3 times in a month
or more seldom
48
19
28
5
respondents were asked to indicate the level of perceptions
based on a Likert scale from one (strongly Disagree) to five
(Strongly agree). The second section of the questionnaire
deals with frequency of customers' usage of i-banking
channel. Finally, the third section contains the questions
related to socio-demographic profiles of respondents. SPSS
12.0 for windows was employed in order to access the
particular results required for the scale measurement.
Descriptive analysis such as means, standard deviation and
frequencies were calculated. Reliability of the scale was
tested, dimensionality of the scale was confirmed through an
exploratory factor analysis and regression analysis.
Hypotheses:
1. There is no significant difference between customers'
expectations and satisfaction toward i-banking
interpretation services.
2. There is no correlation between overall customers'
satisfaction and attributes.
3. Few factors best predict overall satisfaction of the
customers' satisfaction.
Analysis, Discussion and Results:
5
Demographic Characteristics of the Respondents:
The demographic characteristics of the respondents are shown
in Table 1. The gender distribution of the respondents was
quite even, with 37% female respondents and 63% male
respondents. The dominant age group of the respondents was
25 to 35 years (53%), followed by 35 to 45 years (22%), less
than 25 years (10%), and 45 to 55 (10%), whereas above 55
years made up the smallest group, representing 5% of the
respondents.
In terms of the level of education, almost 48% of the
respondents had post graduate education, 39% of the
respondents had graduate level education; and 7% of the
respondents had secondary school education. The result
shows the relatively high educational attainment of the
respondents. With regard to occupation, the most often
mentioned occupations were "Business" (45%) followed by
"Salaried" (33%), "Professional" (18%) and "Others" (4%).
With regard to respondents' monthly income, the largest group
included those with monthly household income of Rs 20,00035,000 (41%), 37% of the respondents had monthly household
income of Rs 10,000 -20,000 , 15% of the respondents had
monthly household income of over Rs 35,000, and 7% of the
respondents had monthly household income of under Rs
10,000.
In case of internet usage frequency, almost 48% of the
respondents used internet every day, 28% of the respondents
used 1-3 times per week, 19% of the respondents used 4-6
times per week and 5% used internet 3 times in a month or
more seldom (see Table 1).
Expectation and Perception Gaps by Underlying
Dimensions:
The concept of measuring the difference between expectations
and perceptions in the form of the SERVQUAL gap score
proved very useful for assessing levels of service quality
(Shahin A, 2005). Table 2 shows that the average ratings for
expectations are higher than the average perception ratings in
almost all of the attributes. The results of the quantitative
application of the SERVQUAL model in i-banking show that
the overall expectations of customers are higher than their
perception. This proves the existence of a negative
SERVQUAL gap (-0.40).
In order to measure the gaps between the expected and
perceived service levels (Gap 5), 15 major i-banking service
dimensions were grouped. Then, to assess the significant
difference of the arithmetic means for each dimension, pair
wise t-tests were performed between expectation and
perception scores at 95 per cent confidence level. According to
the results, mean differences between the expected and
perceived service levels regarding all of the 15 dimensions, 12
dimensions were statistically significant (see Table 2). This
demonstrated to us that there were service quality gaps in 12
service categories. Further study of the paired differences in
Evaluation Gap of Internet Banking Service Quality by Using SERVQUAL Approach ?
Poolad Daneshvar ?
Dr. H. N. Ramesh
6
Table 2: Descriptive Statistics on Customer' Expectation, Perception and Gap Mean of Service Quality In internet
banking (N=102)
N Dimension
o
Expectation
Mean S.D
Perception
Mean S.D
1
2
3
4
5
6
7
4.06
4.47
4.26
3.59
4.00
4.07
3.87
3.86
4.14
4.06
3.93
4.03
3.56
3.73
have up-to-date equipment
performing the service right the first time
The speed of service delivery
Availability for business.
Wide variety of services readily accessible.
Have a user-friendly system
Easy to use
0.85
0.63
0.63
0.88
0.56
0.35
0.72
0.89
0.73
0.76
0.69
0.68
0.85
0.83
Gap
Mean
(P-E)
-0.20
-0.33
-0.20
0.34
0.03
-0.51
-0.14
t
1.36
2.59
1.62
-2.36
-0.30
4.98
1.11
Sig.
(2tailed)
Results
0.18
0.01
0.11
0.02
0.77
0.00
0.27
Accept
Reject
Accept
Reject
Accept
Reject
Accept
8 Sufficient menu for transaction
4.39
0.52
3.96
0.82
-0.43
3.44
0.00
Reject
9 Provision of accurate information
3.89
0.69
3.47
0.74
-0.41
5.17
0.00
Reject
10 Feeling safe
4.14
0.75
3.31
0.88
-0.83
5.94
0.00
Reject
11 Easy access to necessary information
4.14
0.64
3.80
0.71
-0.34
2.81
0.01
Reject
12 Availability in the understanding languages 3.66
0.80
3.91
0.74
0.26
-2.03
0.05
Reject
13 Personalization of the web site
4.39
0.60
3.44
0.96
-0.94
6.43
0.00
Reject
14 Knowledge of administration
4.14
0.67
3.89
0.79
-0.26
2.12
0.04
Reject
15 Customer service
4.24
0.71
3.60
0.79
-0.64
5.12
0.00
Reject
16 Overall
4.44
0.56
4.04
0.75
-0.40
3.45
0.00
Reject
Note:
1. Gap mean is defined as perception mean-expectation mean;
2. A negative gap indicates that guests perceived that service delivery did not meet their expectation' a positive gap indicates that
customers perceived that service delivery exceeded their expectation;
3. Denotes that there is a significant difference between (E) and (P) at 95 per cent confidence level.
Table 2 also showed that the widest negative gap was in the
"Personalizatiom of the web site", followed by the "Feeling
safe" and "Customer Feedback Service". On the other hand
there was the widest positive gap in the "Availability for
business", followed by the "Variety of services readily
accessible".
These results revealed reject of first hypothesis that there is a
difference between customers' expectation and satisfaction of
the selected i-banking services attributes.
Correlation Analysis :
A correlation coefficient measured the strength between two
variables. In the study, a correlation coefficient measured the
strength between the overall satisfaction of the respondents
and nine factors (Have up-to-date equipment, Performing the
service right the first time, Availability for business, Variety of
services readily accessible, Sufficient menu for transaction,
Easy access to necessary information, Availability in the
understanding languages, Personalization of the web site and
Knowledge of administration). The correlations between
overall satisfaction and nine factors were positive and
significant at the 0.01 and 0.05 levels. For example, the
correlation between overall satisfaction and "Have up-to-date
equipment" (Factor 1) was 0.270 (p=0.024); the correlation
between overall satisfaction and "Performing the service right
the first time" (Factor 2) was 0.307 (p=0.010); the correlation
between overall satisfaction and "Availability for business"
(Factor 3) was 0.652 (p=0.000); the correlation between
overall satisfaction and "Variety of services readily
accessible" (Factor 4) was 0.650 (p=0.000); the correlation
between overall satisfaction and "Sufficient menu for
transaction" (Factor 5) was 0.706 (p=0.000); the correlation
between overall satisfaction and "Easy access to necessary
information" (Factor 6) was 0.287 (p=0.016); the correlation
between overall satisfaction and the "Availability in the
understanding languages" (Factor 7) was 0.295 (p=0.013); the
correlation between overall satisfaction and "Personalization
of the web site" (Factor 8) was 0.417 (p=0.000); the
correlation between overall satisfaction and "Knowledge of
administration" (Factor 9) was 0.497 (p=0.000). Therefore,
the study indicated that the correlations between overall
satisfaction and "Sufficient menu for transaction" and
"Availability for business" factors were higher than that
between overall satisfaction and other factors.
7
Sinhgad Business Review ?
ISSN : 0974-0597 ?
Vol. - III, Issue - I, July 2010 - December 2010
These results indicate reject for second hypothesis that there is
correlation between overall satisfaction and the selected ibanking services attributes.
model accounts for 75.0% of variance in the friendliness of
system usage. In other words this model can predict service
quality almost 75.0% correctly.
Stepwise Multiple Regression:
As a result "Sufficient menu for transaction" factor (R=0.706)
has 49.1% contribution, further "Variety of services readily
accessible" , "Availability for business" and "Have a userfriendly system" factors along with "Sufficient menu for
transaction factor have 65.4 %, 73.4 % and 75.0% contribution
to improve the i-banking service quality of Indian bank
industry, respectively.
In Model 1 (see Table 4), when a single independent variable
(X1 = Sufficient menu for transaction) was used to calculate
the regression equation for predicting the dependent variable,
overall customers satisfaction (Y), the correlation coefficient
R was 0.706, representing 70.6% degree of association of Y
and X1. The coefficient of determination (R2) indicates the
percentage of total variation of Y explained by X1. Using the
value of X1 reduces the error of predicting the dependent
variable by 49.8%. The standard error of estimate represents
the standard deviation of the actual dependent values around
the regression lines. The standard error was 53.6.
With the addition of another dependent variable into the
model, "Variety of services readily accessible" (X2) increased
R, and R2 (0.815 and 0.664), respectively. Model 3 further
added another variable called "Availability for business" (X3)
into the equation which further improved the capability of the
model to explain the variation in Y, "Availability for business"
(X3) increased R, and R2 (0.863 and 0.745), respectively. In
addition, model 4 further added another variable called "Have
a user-friendly system" (X4) into the equation which further
improved the capability of the model to explain the variation
in Y, "Have a user-friendly system" (X4) increased R, and R2
(0.874 and 0.764), respectively.
The adjusted R-square (0.750) in Table 4 tells us that the
In addition, 25.0 % of improving factors are unaccounted and
unexplained for recognition of customer satisfaction
dimensions. These factors can relate to other banking policies,
in terms of, interest rate of deposit, interest rate of loan,
penalty rates, amount of minimum balance for saving account,
several types of charges, employee's manner and marketing
strategy.
These results revealed support for the third hypothesis that
there are few factors best predict overall satisfaction of the
customers' satisfaction.
A four-dimension model using regression analysis is
developed for measuring the overall service quality of ibanking. For this purpose, in case of i- banking, Indian
commercial banks should pay attention to four factors Sufficient menu for transaction, Variety of services readily
accessible, Availability for business and Have a user-friendly
system - to enhance the internet service quality in banking
industry in India. Concerning Table 4, the mentioned factors
Table 3 : Correlations Between E-banking Attributes and Overall customers' Satisfaction
Dimension
have up-to-date equipment
Overall Satisfaction
Pearson Correlation
0.270*
Significant Level
0.024
performing the service right the first time
Pearson Correlation
0.307**
Significant Level
0.010
Availability for business.
Pearson Correlation
0.652**
Personalization of the web site
Significant Level
Pearson Correlation
Significant Level
Pearson Correlation
Significant Level
Pearson Correlation
Significant Level
Pearson Correlation
Significant Level
Pearson Correlation
0.000
0.650**
0.000
0.706**
0.000
0.287*
0.016
0.295*
0.013
0.417**
Significant Level
0.000
Knowledge of administration
Pearson Correlation
0.497**
Significant Level
0.000
Variety of services readily accessible.
Sufficient menu for transaction
Easy access to necessary information
Availability in the understanding languages
Result
Reject
Reject
Reject
Reject
Reject
Reject
Reject
Reject
Reject
Evaluation Gap of Internet Banking Service Quality by Using SERVQUAL Approach ?
Poolad Daneshvar ?
Dr. H. N. Ramesh
8
Table 4 : Regression Analysis of the Factors Affecting the Existence of Service Quality in i-banking industry in
India
Model Dimension
R
R Square
Adjusted R
Std. Error of
Square
the Estimate
1
Sufficient menu for transaction
0.706a
0.498
0.491
0.536
2
Variety of services readily accessible.
0.815b
0.664
0.654
0.441
3
Availability for business.
0.863c
0.745
0.734
0.387
4
Have a user-friendly system
0.874d
0.764
0.750
0.376
a.
Predictors: (Constant), Sufficient menu for transaction
b.
Predictors: (Constant), Sufficient menu for transaction, Wide variety of services readily accessible.
c.
Predictors: (Constant), Sufficient menu for transaction, Wide variety of services readily accessible,
Availability for business.
d.
Predictors: (Constant), Sufficient menu for transaction, Wide variety of services readily accessible,
Availability for business., Have a user-friendly system
contribute 75.0% to improvement of quality of i-banking
service; on the other hand banks should conduct research to
know about customer's expectation level about i-banking
services and establish a proper feedback system to evaluate
the customer's expectation and perception regarding ibanking services.
Conclusions:
Success in i-banking business depends on understanding the
key factors in determining customer satisfaction as well as
service quality. This has become even more critical in view of
the increasingly global nature of competition in the banking
and financial services sector, and the increasing presence of
powerful foreign players in the domestic banking markets. On
the other hand, in the competition within the corporate
banking market, banks are increasingly aware of the
importance of service quality in contributing to the
development of good bank-corporate relationships.
Improving such relationships should increase bank
profitability and accrue other benefits such as: commitment
(Perrien and Ricard, 1995) and co-operation (Zineldin, 1995).
This paper develops a measure of service quality gap in ibanking market through the SERVQUAL model and
contributes towards understanding the relationship among
overall customer satisfaction, and service quality attributes.
The statistical analysis shows that there exists a gap between
the overall customer expectations and perceptions in the
banking sector. The largest discrepancy between the
customers' expectations and perceptions is in terms of
"Personalization of the web site" and "Feeling safe" factors
which include bank's website design and i-banking security.
The insight gained in this study may offer a foundation for
future research on self-service technology, and provide useful
recommendations for improving i-banking services at Indian
commercial banks.
The results of the present study have a number of practical
implications for the Indian commercial banks' managers who
are seeking to identify the customers' satisfaction level of
international as well as domestic customers. First, banks
should provide reliable services in order to achieve high levels
of customer satisfaction, an antecedent of sustainable
competitive advantage. In the present competitive banking
environment, most of the banks offer the same or similar
products around the world and service quality is a vital means
to differentiate them in the market place.
Second, meeting customer expectations alone is no longer
enough. So, bank managers should delight their customers by
exceeding their expectations to improve customer
satisfaction.
It is observed that customers are satisfied with the reliability of
the services provided by the banks but are not very much
satisfied with the dimension of 'Feeling safe'. So, they could be
applied to technology-based service encounters such as those
in i-banking. Security has long been considered one of the
most essential issues for i-banking users (Black et al. 2001). In
this case, which involves guarding users from the risk of fraud
and financial loss; it has been another important issue in safe
use of the internet when conducting financial transactions.
This obviously requires commitment to invest in relevant
emerging technologies, particularly those with significant
prospects for enhancing the convenience and accuracy of ibanking service delivery. Furthermore, to enhance
"Availability for business" factor, banks can meet customer's
Sinhgad Business Review ?
ISSN : 0974-0597 ?
Vol. - III, Issue - I, July 2010 - December 2010
9
satisfaction through increasing and extending i-banking
network centric terms like delay and bandwidth through
investment to establish electronic infrastructures.
investigation of critical conceptual and measurement
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On the other hand, Indian bank managers should ensure that
employees are well trained and understand the level of service
in case of solving customers' technical problems. In another
word, employees should be able to show adequate personal
attention to customers. Ensuring that employees are well
trained, and giving attention to other factors that are required
for the provision of a high level of service quality, it might
incur increased costs, but will provide improved customer
satisfaction. They also should give customers the opportunity
to talk about both their positive as well as negative
experiences by improving Electronic Customer Relationship
Management (e-CRM).The allocation of financial resources
for the human resource applications will equip employees
with a better understanding of excellence. As a result, the
findings of this study show that we can reduce the service
quality gap up to 75.0% percent (see table 4).Importantly,
there are also unknown factors that are affecting customer
satisfaction, which we suggest may relate to the absence of
human interaction, interest rate of deposit and loan, penalty
rates, amount of minimum balance for saving accounts,
several types of charges, and marketing strategy of Indian
commercial banks. This approach will assist banks in
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service quality, and provide a basis for researchers to further
investigate alternative methods of customer interaction that
will assist in improving customer satisfaction, loyalty and
retention on banking.
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ISSN : 0974-0597
Sinhgad Business Review
Vol. - III, Issue - I, July 2010 - Dec 2010
Ethical Practices in Higher Education Sector with Special Reference
to Kolhapur District
Mrs. Manisha N. Paliwal
Abstract:
The higher education system is seen to make a fundamental
contribution to the future of any Country and plays a vital role
in Country's intellectual, economic, cultural and social
development. Ethics is a set of values and principles that we
strongly believe and follow. It is learning what is right or
wrong, and then doing the right thing.
The present study has been undertaken in two phases. The
first phase includes review of relevant literature and experts'
opinion to evaluate the role of ethics in Higher Education
Sector, whereas the second phase involved primary data
collection from the various stakeholders of Higher Education
Institutions (broadly Governing Body Members, Teachers,
Administrative Staff, and students). Forty-one
ethical/unethical dimensions were identified and the elicited
opinion of the respondents were analyzed. The model was
tested with KS test for the relationship between Higher
Education Management and Ethical Practices and found to be
dependent on each other. The present study explores few
unethical practices being followed in the Higher Education
Sector. The author has suggested measures which would help
resolving ethical dilemmas and which ultimately would help
in minimizing the unethical practices in the Higher Education
Sector.
Key Words: Ethics, Education, Management Education,
Codes of Ethics.
Introduction:
Recently, there has been an increasing awareness, and more
importantly increasing interest in the field of Business Ethics.
This is indeed a very welcome trend! Ethics in Latin language
is called 'Ethicus' and in Greek, it is called 'Ethicos'. In fact,
this word has originated from "ethos" meaning character or
manners. Ethics is thus said to be the source of morals. The
character of a man is expressed in terms of his conduct. Ethics
thus can be considered as the source of character of a person
expressed as right or wrong conduct or action.
Associate Professor
Sinhgad Institute of Management, Pune-41
E-mail:[email protected]
Business ethics defines how a company integrates core values
- such as honesty, trust, respect, and fairness into its policies,
practices and decision-making. Business ethics also involves a
company's compliance with legal standards and adherence to
internal rules and regulations. Business ethics has come to be
considered a management discipline, especially since the birth
of the social responsibility movement in the 1960s. An
increasing number of people asserted that because businesses
were making a profit from using our country's resources, these
businesses owe it to our country to work to improve society.
All businesses exist and operate within society therefore they
should contribute to welfare of society.
Review of Literature:
Fenner(1999) suggested that though teachers may not teach
ethics or values as a part of the curriculum, they do so through
daily modeling, helping students make choices, helping
children learn to socialize and reinforcing those behaviors that
are successful and those that should be avoided. David
Carr(2000) emphasizes on Philosophy of education and its
ethics. With the help of a case study Deni Elliott (1995)
explores the role of ethics in education. Carlton Mitchell
(1989) contributed towards ethical education with various
terms such as medical ethics, Hippocratic Oath, ethics in
management , legal ethics, critical legal studies, normative
ethics,& metaethics. Kevin Coupe (2006) recalls the era
when executives at Enron and Worldcom have defined on the
front pages of the US' newspapers the essence of greed and
mismanagement, and how ethical lapses can have far-ranging
implications that destroy not just companies, but the lives of
thousands of people.
A Research paper by Samuel V Bruton (2004) describes a way
of teaching the golden rule through a series of businessoriented examples intended to bring out its strengths and
weaknesses. The method described also introduces students to
some basic moral reasoning skills and acquaints them with a
wide range of moral issues that arise in business. Kant's
formula of humanity is discussed in the final section as a
principle that overcomes at least some of the golden rule's
defects. The Research conducted by Marilynn P Fleckenstein
(1997) suggests that the traditional way of integrating ethics in
education into required functional courses actually results in a
decline in moral reasoning. It is suggested that ethics in
education needs to be personalized based on the individual
12
Ethical Practices in Higher Education Sector with Special Reference to Kolhapur District ?
Mrs. Manisha N. Paliwal
student. An appropriate goal for business ethics courses
would be to make students aware of the ethical and social
dimensions of the business decision-making process. A
Research paper Sarah Pitts & Rob Kamery (2002) examines
the growing emphasis colleges and business firms are placing
on business ethics, as well as how it informs the lives of those
who practice it. Current views and legislation have only
enhanced the significance of ethics codes, making them a
crucial part of the corporate landscape. The increasing
relevance of the costs of disregarding ethics in business is
noted. Emphasis is placed on the importance of stressing
business ethics in society, and on effective methods of
teaching the concepts to students so that they will carry a
strong ethical sense into the business world.
the ethical positions and choices of both the individual and the
institution. The distinctive nature of the institutional ethos
affects the values and interests manifested in the campus
climate and the overall effect of the college experience on the
student.
Issues facing higher education, such as racism, sexism,
homophobia, substance abuse, and academic dishonesty,
argue for the pursuit of an ethical environment that
consistently asserts the importance of human dignity,
nourishes growth and achievement, and insists on respect in
interpersonal communication and relations.
Research Methodology:
Colleges and universities are custodians of knowledge. The
possession of knowledge is the source of power. Colleges and
Universities create and disseminate knowledge within a
particular society. They are institutions with moral
responsibilities to maintain the well-being of the Society.
The study was carried in two different phases; the first phase
has involved identifying the various dimensions of ethical
practices in Higher Education Sector. These parameters were
derived based on literature available on ethical practices in
Education Sector and were further shown to academic experts.
The researchers also took the viewpoints of the stakeholders
on the selected dimensions through unstructured discussions.
The higher education system is seen to make a fundamental
contribution to the future of any country and plays a vital role
in country's intellectual, economic, cultural and social
development. The higher education sector educates our future
professional workforce, creates future leaders, provides jobs,
drives much of our economic and regional success, and
facilitates cultural and trade links with other countries. The
sector plays a key role in the growing knowledge and
innovation based economic health. It enriches our social and
environmental landscape and promotes tolerance debates
which underpin society.
The second phase of the study has been completed using Field
Survey at Institute of Higher Education in Kolhapur. There are
around total 103 Institute of Higher Education in Kolhapur
District. In the field survey method the researchers had
approached directly to the governing body members, teachers,
administrative staff and students of all the selected institutes
and relevant data had been solicited from such respondents.
Prior to this field survey a pilot survey was carried out. Based
on the feedback of the pilot survey, the questionnaire was
suitably amended and administered. The typology of research
here is an exploratory research.
Work in academic life, like any other kind of work, is laden
with values and has a moral dimension that emerges from the
ethical reflection characteristic of institutional self-scrutiny.
Ultimately professorial knowledge is not proprietary but
communal, dedicated to the welfare of society through the
transmission and extension of knowledge. The role of the
scholar can be conceived in four phases: teaching, discovery,
application, and integration, each of which has its own ethical
assumptions and problems. Often the competing needs of
these roles cause conflicts for the scholar teacher/researcher.
Leadership in higher education continues to be under intense
pressure to respond to societal issues resulting from trends in
demographics and enrollment and economic and social forces
that bring both possible disruption and/or opportunity. The
use of values expressed by the mission statement and ethical
reflection as resources in decision making can positively
affect the institution's ability to respond to complex decisions
about funding and budget. Students on today's campuses
encounter a variety of complex situations for which they are
often ill-prepared by experience or individual development.
The relationship between students' attitudes and values and
the environment that supports or challenges them stands as a
dynamic dialectic of confirmation and rejection that affects
Objectives:
Ethics in Higher Education:
In order to comply with present research endeavor entitled
above, the following objectives have been considered1. To explore various ethical practices followed by Higher
Education Services.
2. To examine the Education services provided by the
educational institutes, faculty members, & administrative
staff from ethical point of view.
3. To evaluate the ethics of the students.
4. To suggest ethical measures in order to minimize the
unethical practices in Higher Education sector.
Hypothesis:
Considering the nature of the study the author has laid down
statement of hypothesis to start with research inquiry as"Higher Education Management and ethical practices are
independent of each other."
The study is based on Primary data collected from various
stakeholders of Higher Education services. The primary data
13
Sinhgad Business Review ?
ISSN : 0974-0597 ?
Vol. - III, Issue - I, July 2010 - December 2010
constituted of information gathered through formal and
informal discussions, structured and unstructured interviews,
and administration of questionnaire, which had been
amended and modified after a pilot test. The data has been
collected from four stakeholders of the educational institutes
such as:
Part A - Ethical Practices of Institutions of Higher Learning:
To assess & identify the ethical/unethical practices carried out
by the Institutes opinion of Teachers Administrative staff and
students of the same institute was elicited.
Part B - Ethical Practices of Teachers of Institutions of
Higher Learning: To assess & identify the ethical/unethical
practices carried out by teachers' opinion of Governing body
members, administrative staff, and students of the same
Institute was elicited.
Part C- Ethical Practices of Administrative Staff of
Institutions of Higher Learning: To assess & identify the
ethical/unethical practices carried out by Administrative staff,
opinion of Governing body members, teachers, and students
of the same Institute was elicited.
Part D - Ethical Practices of students of Institutions of Higher
Learning: To assess & identify the ethical/unethical practices
carried out by students, opinion of Governing body members,
teachers, and administrative staff of the same Institute was
elicited.
The researchers have formulated four different set of
questionnaires for the above mentioned four phases. Each
questionnaire has consisted of ten, different Likert - type
items and the last statement common in each questionnaire.
Each of the Likert-type statement consisted of a declarative
statement and a seven- category "strongly agree to "strongly
disagree" rating scale; only the end points of the rating scale
were labeled. Scale categories were labeled numerically from
1 to 7. As mentioned above broadly four stakeholders of
Education sector have been considered such as - Governing
body members, Teachers, Administrative Staff, and Students.
A cross-examining method was followed. For example to
assess & identify the ethical/unethical practices carried out by
Administrative staff, opinion of Governing body members,
teachers, and students of the same Institute was elicited.
Sample: The Stratified Quota Convenience Sampling
method was used. A wide variety of higher education units are
in existence in Kolhapur district. Here, the researcher
identified two strata such as - Conventional colleges and
professional institutes. Again, in professional institutes
further, there are segments like-Engineering college,
Management Institute, Law College, Medical College. In all
20 Institutes have been selected: 4 conventional colleges, and
16 professional institutes (4 institute from each segment).
Here in Education sector about 40% faculty, 75% of
administration staff and 15% students were approached to
investigate the Ethical /Unethical practices in Higher
Education sector. A cross-examining method was followed.
For example to assess & identify the ethical/unethical
practices carried out by administration staff, opinion of
principal, faculty and students of the same institute were
elicited. The researcher had investigated 280 respondents and
as each respondent filled up three questionnaires, therefore in
total the researcher administered 840 questionnaires. The
detailed structure is displayed in the table below:
Table 1 (Sample Design)
Type of the Respondent
Number
of the
Respondents
No. of
Questionnaires
Filled in
a) Governing Body
Members
20
20*3=60
b) Faculty Members
60
60*3=180
c) Administrative Staff
100
100*3=300
d) Students
100
100*3=300
Total
280
840
The present study was confined to the ethical/unethical
practices in the Education industry and only Higher Education
Sector was taken into consideration. The geographical scope
of the study was Kolhapur district. The periodical scope
extends to the existing situation when the empirical data was
collected.
The statistical methods adopted for the present are as follows?
The data has been processed with SPSS software.
?
The Kolmogorov- Smirnov (K-S) test has been applied to
test the hypotheses( K-S test it is non-parametric and
distribution free, Test of the goodness of fit between the
observed distribution and the expected distribution using
ordinal data).
Data Analysis:
The researcher has elicited opinions of respondents by
offering various statements in the form of questionnaire
consisted of Likert-type items. Each of the items consisted of a
declarative statement and a seven- category "strongly agree to
"strongly disagree" rating scale; only the end points of the
rating scale was labeled. Scale categories were labeled
numerically from 1 to 7. The 7 points rating scale reduces
ambiguity and minimizes prejudices and gives a wider scope
for expression of opinions.
The data analysis has been divided into four sections as
explained in the research methodology:
1. Ethical Practices of Institutions of Higher Learning.
2. Ethical Practices of Teachers in Institutions of Higher
Learning.
3. Ethical Practices of Administrative Staff in Institutions of
Ethical Practices in Higher Education Sector with Special Reference to Kolhapur District ?
Mrs. Manisha N. Paliwal
14
Higher Learning.
The following four tables present the various ethical
dimension on which the opinion of the various stake holder
have been taken-
4. Ethical Practices of Students in Institutions of Higher
Learning.
Table 2 -Part A: Ethical Practices of Institutions of Higher Learning
Item Statement about Ethical Practices
No.
Agreement Level
Strongly 2
Disagree 1
1 The transparency is maintained
in the admission process.
Mean
Score
3
4
5
6
Strongly
Agree 7
2
21
33
25
42
57
80
5.21
2 Education is considered as more or
less money making services.
28
31
25
36
30
59
51
4.5
3 Colleges maintain the quality of
education.
12
43
37
34
50
35
49
4.41
4 The concept of support services,
including professional counseling of
Students is very Uncommon in higher
Education Institutions
7
19
27
48
36
65
58
4.97
5 Recruitment of teaching & non
teaching staff is purely as per norms.
6
14
42
52
34
71
41
4.81
6 Colleges are much influenced
by Politics.
18
54
40
49
22
47
30
4.01
7 Promotional activities of the various
courses offered by the colleges
are quite unethical.
10
13
62
55
39
43
38
4.46
8 Teachers are paid as per norms.
36
32
16
31
65
38
42
4.30
9 The management allows more
candidates for admissions than
capacity to accommodate.
28
28
49
65
26
30
34
3.99
10 Colleges are quite insensitive
towards the social responsibility.
26
40
36
41
22
38
57
4.28
Source: Survey Data
The following observations are made from the table 2
regarding ethical practices in Institutions of Higher Learning:
The statement 1 showing the transparency is maintained in the
admission process has elicited mean score of 5.21. Around
25% of the respondents are showing some negative attitude
regarding the admission procedures. The statement 2 refers
that Education is considered as moneymaking services, which
has evoked positive responses of 64% of the respondents.
This commercialization of Education sector is reducing the
importance of the higher education degrees. The statement 3
about quality of education shows 63% agreement level of the
respondents. The statement 4 talks about the support services,
including professional counseling of Students in higher
Education Institutions has returned into a mean sore of 4.97,
with 71% of respondent's agreement level. The statement 5
speaks of a very crucial and sensitive issue related to
Recruitment of the teaching & non-teaching staff as per norms
which returned with a positive remark of around 66% from
respondents. The statement 6 explains about the impact of
politics on education - 52% of respondents are agreeing that
higher education sector is very much influenced by Politics.
Whether the promotional campaign carried out for the
educational institutions are ethical - 69% of the respondents
are strongly agreeing with the same. Statement 8 about the fair
remuneration paid to the teachers has evoked a mean score of
4.30, with 67% of respondents positively agreeing that
teachers are fairly paid. The statement 9 explores a very
unethical aspects regarding the actual admissions occurred in
15
Sinhgad Business Review ?
ISSN : 0974-0597 ?
Vol. - III, Issue - I, July 2010 - December 2010
the colleges with comparisons to the capacity to
accommodate. It has elicited a mean score of 3.99 with more
than half of the respondent's agreement level. Statement 10
states about the sensitive attitude of institutes towards Social
Responsibility, has evoked a mean score of 4.28, with 67% of
respondents feels that Colleges are quite insensitive towards
Social responsibility.
Table 3 - Ethical Practices of Teachers of Institutions of Higher Learning
Item Statement about Ethical Practices
No.
Agreement Level
Strongly 2
Disagree 1
Mean
Score
3
4
5
6
Strongly
Agree 7
1 Teachers seek to make professional
growth continuous through study
and research.
4
7
16
15
71
62
45
5.30
2 Teachers perform their duties in the
form of teaching, tutorial, practical
and seminar work with full dedication.
0
12
21
32
66
48
41
5.09
3 Teachers maintain active
membership of professional
organizations and strive to improve
education and profession through them.
4
6
35
54
47
39
35
4.77
4 Teachers deal partially with the
students regardless of their religion,
caste, political, economic, social and
physical characteristics.
20
39
34
32
23
44
28
4.10
5 Teachers occasionally make
themselves available to the students
even beyond their class hours and
help & guide the students without
any monetary rewards.
5
27
26
59
25
40
38
4.56
6 Teachers hesitate in discharging
their professional responsibilities
according to the existing rules and
adhere to the procedures consistent
with their profession.
4
24
46
41
54
32
19
4.31
7 Teachers involve themselves in
undertaking other employment and
commitment including private
tuitions and coaching classes.
22
20
28
16
38
41
55
4.68
Teachers adhere to the conditions
of the job contract.
9
26
46
29
26
46
38
4.48
9 Teachers show less cooperation
with the authorities for the betterment
of the institutions keeping in view
the interest & conformity with
dignity of the profession.
21
22
36
32
45
49
15
4.20
0
38
15
38
48
36
45
4.74
8
10 Teachers try to keep public
informed of the educational
programmes which are being
provided.
Source: Survey Data
16
Ethical Practices in Higher Education Sector with Special Reference to Kolhapur District ?
Mrs. Manisha N. Paliwal
The following observations are made from the table 3
regarding ethical practices of Teachers in Institutions of
Higher Learning :Statement 1 explores that teachers seek to
make professional growth continuous through study and
research which has elicited mean score of 5.30 with a positive
response from three quarters of the respondents. The
dedications of teachers as well as their attitude towards
quality education (statement 2 & statement 3) have elicited
positive response from the respondents. Statement 4 Teachers
deal partially with the students regardless of their religion,
caste, political, economic, social and physical characteristics
returned into an average mean score of 4.10. As it is seen that
teachers occasionally make themselves available to help &
guide the students without any monetary rewards. Statement 5
is exploring the same with the mean score of 4.56. Statement 6
has explored that teachers hesitate in discharging their
professional responsibilities according to the existing rules
and adhere to the procedures consistent with their profession.
Statement 7 focuses on teachers' involvement in undertaking
other employment and commitment including private tuitions
and coaching classes, rendered a mean score of 4.68. Probably
the unethical and unfair salary structure of many institute lead
to this behavior of teachers. The goodwill of the institute
depends more on the quality of the teachers and their services.
The last two statements 9 and 10 have explored the
information about the commitments of teachers and their role
in the publicity of the institute. Both the statements end up
with the mean score of 4.20 and 4.74 respectively.
Table 4: Ethical Practices of Administrative Staff of Institutions of Higher Learning
Item Statement about Ethical Practices
No.
Agreement Level
Strongly 2
Disagree 1
Mean
Score
3
4
5
6
Strongly
Agree 7
1 Administrative Staff have
required qualification.
53
52
13
24
12
10
16
2.91
2 Administrative Staff show lethargic
attitude towards work.
0
0
8
37
53
44
38
5.04
3 Administrative Staff expect from
teaching staff to complete their
assigned work.
6
5
13
36
18
54
48
5.27
4 Administrative Staff take less
responsibility of their job.
10
6
6
19
38
56
45
5.316
5 Administrative Staff never
cooperate with teaching staff and
students.
11
26
40
22
24
25
32
4.25
6 Administrative Staff purposely
delay the work.
12
26
20
24
41
31
26
4.40
7 Administrative Staff keep the
records up to date.
34
25
39
35
18
15
14
3.43
8 Administrative Staff generally
have conflicts with teaching staff.
12
24
57
33
30
12
12
3.716
9 Dedication & commitment to work
are less seen in Administrative Staff.
16
10
4
14
49
45
42
5.07
8
6
41
29
46
10 Administrative Staff expect bribe
from the students at the completion
of work (eg. T.C., Migration
certificate etc.)
18
32
4.78
Source: Survey Data
17
Sinhgad Business Review ?
ISSN : 0974-0597 ?
Vol. - III, Issue - I, July 2010 - December 2010
proper records. Statement 8 has elicited a mean score of 3.716
with 53% of respondents strongly saying that administrative
staff generally has conflicts with teaching staff.
The following observations are made from the table 4
regarding ethical practices of Administrative Staff in
Institutions of Higher Learning. Statement 1 "Administrative
Staff have required qualification" has elicited a mean score of
2.91 and positive agreement of approx 41% of respondent.
Really, it is a common observation that the clerical staff is
poor in the required knowledge and hence accuracy &
efficiency is not found in the institutional work.
Statement 9 explains about dedication & commitment in
administrative staff. It has returned with a mean score of 5.07,
and agreement level of 72% of the respondents. Statement 10
explores the very unethical & sensitive issue about the
expectation of bribe from the students at the completion of
work by administrative staff, which has elicited a mean score
of 4.78 and agreement level 68% of the respondent.
Statement 2 & 3 explain about how Administrative Staff,
because of their lethargic attitude expect from teaching staff
to complete their assigned work. Almost ¾ th of the
respondent are agreeing with this attitude of staff.
Administrative Staff take less responsibility of their job. The
statement 4 has secured a mean score of 5.31, explores that the
administrative staff sometimes do not cooperate with the
teaching staff- 62% of the respondents are admitting they
often purposely delay the work.
The following observations are made from the table 5
regarding ethical practices of Students in Higher Education.
The statement 1 "The Students are very conscious about their
career" has a mean score of 3.25 and 46% of the respondents
agreement level related to the same. Nowadays, it is common
remark that students are taking higher educational degrees
very casually. When things come to the rules, regulations,
code of conduct, ethics, and respect followed by today's
students, only 50-60% of respondents have shown their
agreement towards it.
Statement 7 explores the record keeping updation of the staff,
which has returned into a mean score of 3.43. It is difficult to
relay on the administrative staff, looking at the qualifications
and attitudes towards their work, they would keep timely and
Table-5 Ethical Practices of Students of Higher Education
Item Statement about Ethical Practices
No.
Agreement Level
Strongly 2
Disagree 1
Mean
Score
3
4
5
6
Strongly
Agree 7
1 Students are very conscious
about their career.
34
36
45
12
26
23
4
3.25
2 Students follow rules, regulations
& codes of conduct.
12
13
37
30
43
21
24
4.32
3 Students give due respect to teachers.
31
39
8
45
26
19
12
3.56
4 Students adopt some unethical
practices to get through the exams.
4
20
17
26
48
30
35
4.8
5 Students never think about their
teachers' convenience.
1
18
42
34
29
35
21
4.45
6 Students never give correct picture
of their performance to their parents.
0
7
19
18
29
65
42
5.4
7 Poor attendance is common factor
in all colleges.
0
2
6
17
48
56
51
5.68
8 College is considered as a place
of outing for some students.
0
5
17
54
18
45
41
5.13
9 Dedication & commitment to
studies are less seen in students.
10
22
19
40
35
25
29
4.43
10 Students involve politics into
education.
5
11
22
42
36
29
35
4.77
Source: Survey Data
Ethical Practices in Higher Education Sector with Special Reference to Kolhapur District ?
Mrs. Manisha N. Paliwal
18
Statement 4 explains about students adopting some unethical
practices to get through the exams. This has mean score of 4.8,
with 68% of respondent's level of agreement. It seems to be
pathetic, in today's education scenario, with money, Degrees
can be bought. Teacher-student relationship is considered to
be the most pure and holy relationship, but the survey reveals
that 63% of the respondents are positively agreeing, saying
that students are not concerned about teachers convenience as
shown in statement 5. It is the prime responsibility of the
students to be fully transparent as far as their performance is
concerned with their parents, but Statement 6 talks " Students
never give correct picture of their performance to their parents
" and has brought a mean score of 5.4, with a very high score
of 77% level of agreement. Statement 7 "Poor attendance is
common factor in all colleges" has secured the highest level of
agreement (81%) of respondent with a mean score of 5.68.
Some drastic regulatory reforms are required to change this
scenario of poor attendance. Statement 8 has elicited that
college is considered as a place of outing for some students
with a mean score of 5.31. Looking at the overall behavior of
the students, it was found that the dedication & commitment
of the students towards studies is also poor. Statement 10 has a
mean score of 4.77 with 68% level of agreement of
respondents, saying that students involve politics into
education.
Hypotheses Testing: The last question was kept same in each
type of questionnaire stating as - General opinion about the
ethical practices being adopted in higher education services is:
Highly
Unethical
1
Highly
Ethical
2
3
4
5
6
7
The responses for the above-mentioned statement are as
follows:
From the table it is found that the largest absolute different is
0.3107 which is the value of Kolmogorov- Smirnov2 D value.
Here the critical value for a sample of 280 at an alpha of 0.05 is
1.36/ n that is, D= 1.36/ 280 =0.08127. As the calculated D
exceeds the critical value of 0.3107, the null hypothesis that
Higher Education Management and ethical practices are
independent of each other is rejected and hence we establish
an alternative hypothesis such as Higher Education
Management and ethical practices are dependent of each
other.
Table 6 Opinions regarding Ethics of Education
Agreement Level
Highly
Ethical
Highly Unethical
Total
Institutions
7
6
5
4
3
2
1
Teachers
43
51
60
69
18
11
8
260
Adm. staff
Students
19
36
45
48
15
3
14
180
2
12
18
47
35
36
30
180
22
39
75
28
34
12
10
220
Total
86
138
198
192
102
62
62
840
Source: Survey Data
Hypothesis testing using KS test:
Ho: Higher Education Management and ethical practices are independent of each other.
Table 7: Hypothesis testing using KS test
Opinion
Highly
Ethical
Highly
Unethical
Observed
Number
Observed
Proportion
Observed
Cumulative
Proportion
Null
Proportion
Null
Cumulative
Proportion
7
6
5
4
3
2
86
138
198
192
102
62
0.1023
0.1642
0.2357
0.2285
0.1214
0.0738
0.1023
0.2665
0.5022
0.7307
0.8521
0.9259
0.413
0.413
0.413
0.413
0.413
0.413
0.413
0.286
0.429
0.572
0.715
0.858
1
62
0.0738
0.9997
0.413
1.001
Absolute
Difference
observed and null
0.3107
0.0195
0.0732
0.1587
0.1371
0.0679
0.0013
Source: Survey Data
Sinhgad Business Review ?
ISSN : 0974-0597 ?
Vol. - III, Issue - I, July 2010 - December 2010
Recommendations and Conclusion:
The study on ethical practices in higher education sector helps
us to know the various ethical issues and unethical practices
which exist in education sector. It is noted that service
provider as well as service consumers both were involved in
some of the unethical practices. Therefore, to establish ethical
practices in institutions of higher learning, joint
responsibilities from both sides have to be discharged.
Ethics should be a main concern when a teacher is deciding
how to teach and what he/she plans on teaching. Ethical
aspects of education should be strengthening. Indian
academia needs to think outside the box and learn from the
experience of other countries. Massive expansion of
institutions of higher learning, equity and excellence, better
governance, greater autonomy is urgently required. There
must be an independent Regulatory Authority for Higher
Education, which would work to end licence-permit in higher
education. Expansion of education with ethics and quality can
expand India's global opportunity. As education should give
the learners not only intellectual simulation, but a purpose and
this would happen only if ethics would be incorporated into
education. Therefore, our education system must find the
guiding principles, codes of ethics in the aims of the social
order for which it prepares and which, in the nature of
civilization, it hopes to build.
19
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Web References:
http://www.businessweek.com/bschools/content/oct2007/bs
20071025_096141.htm A speech :(Business Roundtable
Institute for Corporate Ethics,institute's recent report, Shaping
Tomorrows Business Leaders: Principles and Practices for a
Model Business Ethics Program.
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Carr D. (2000), "Professionalism and Ethics in Teaching",
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www.iimb.ernet.in
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Ethical Practices in Higher Education Sector with Special Reference to Kolhapur District ?
Mrs. Manisha N. Paliwal
www.iimcal.ac.in
www.iiml.ac.in
www.indianbschools.com
www.mdi.ac.in
www.nitie.edu
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http://education.stateuniversity.com/pages/1962/Ethics.html
#ixzz0S6GZi8N4
ISSN : 0974-0597
Sinhgad Business Review
Vol. - III, Issue - I, July 2010 - Dec 2010
The Diffusion Of Online Banking Among Indian Consumers
: An Empirical Study
Neha Dixit1, Prof. Saroj Kumar Datta2
Abstract:
Online banking is a form of self-service technology in the
recent past. This paper analyzes characteristics which
influence the rate of adoption of online banking in India; two
of these characteristics, namely Accuracy & Security are new
in the literature. The results in the paper shows that adopters of
online banking perceive the service as more suited to those
customers who are comfortable with PC and internet;
Adopters were also found to be more financially innovative.
The analysis of data shows that whether consumers are
adopter or non-adopter, they are very much concerned about
security and accuracy regarding online banking in India.
Throughout this paper the importance of user's attitude and
their characteristics towards online banking has been shown.
Keywords: Diffusion of innovation, Online banking, User
attitude, Innovation characteristics, India.
Introduction :
The infusion of technology into consumer's daily lives has
become remarkably visible (Bitner et. al., 2000). Today's
banking takes place increasingly online, financial institutions
deliver their services via various electronic channels and the
importance of a traditional branch network has declined
(Suoranta and Mattila, 2003). The rapid growth of high-tech
communication media has pushed many service providers
including financial institution to explore new ways of
delivering services to their customers. Online banking is
among the newest electronic delivery channels to be offered
by banks. Electronic banking is a high-order construct
1. Junior Research Fellow
Faculty of Management Studies
Mody Institute of Technology and Science
Lakshmangarh (District: Sikar), Rajasthan - 332311
E-mail: [email protected],
[email protected]
2. Professor and Dean
Faculty of Management Studies
Mody Institute of Technology and Science
Lakshmangarh-332311,Rajasthan,India
E-mail: [email protected]
consisting of several distribution channels: internet, mobile
phone, telephone & ATM banking (Daniel, 1999). Hence
online banking is a subset of electronic banking which utilizes
internet technology. Innovative technology saves cost,
improve customer experiences at service encounters (Bitner
et. al., 2000; Keeney, 1999) and enable effective customer
relationship management for service providers (Ghose and
Dou, 1998; Kopf, 2000). On the other hand, service
experiences delivered using the internet are quite unique,
often raising public concerns about privacy and security.
Consumers' adoption rate of online banking warrants special
research attention (Retail Delivery News, 2000). In his
seminal categorization, Rogers (1995) suggested that
adoption of new products/services takes place over time and
that adopters can be categorized into early adopters, early
majority, late majority and laggards. For a new technology
based product or service at an early stage of diffusion, it is
likely that only a small subset of consumers have adopted it
and non adopters still comprise the majority of target
population. The relative success of online banking to date can
be gauged by identifying the number of current and
anticipated registered users (Barto, 1999). Academics are
keen, amongst other things, to model the adoption process by
identifying all relevant characteristics and by determining
where and to what extent adopter view these characteristics in
a different way to non-adopters. Most of the research, which
has investigated the diffusion of self-service technologies in
banking, has been conducted in developed countries. Far less
is known about the same subject matter in those countries
which have not been given developed status (Gerrard and
Chnningham, 2003). While India is such a country, and its
people do not possess many features of developed countries.
The Purpose of this paper is to gain an understanding of the
diffusion of online banking in an Indian market. The
characteristics of innovations, as found in past adoption
research, are initially identified and appraised and feedback
from questionnaires, which sought to identify other
characteristics are identified. Few studies, to date have sought
to develop characteristics which are specific to measuring the
adoption of Internet banking. This study aims to address this
relative vacuum and, in so doing, adds to the more traditional
characteristics, as identified by Rogers (1962) and Ostlund
(1974). The perceptions of those consumers who have adopted
online banking are more innovative than non-adopters. To
enable readers to view the findings of this study in the context
22
The Diffusion Of Online Banking Among Indian Consumers : An Empirical Study ?
Neha Dixit ?
Prof. Saroj Kumar Datta
of Indian retail market, a brief overview of this market is
provided immediately below.
Literature Review :
Diffusion of innovation:
The theoretical framework of this paper is based on the
traditional innovation diffusion research. Scott Frame White
(2009) reviewed the literature on technological change,
financial innovation and diffusion in banking since 1980. This
quarter century has been a period of substantial change in
terms of bank services and production technologies, but much
less so with respect to organizational form. Diffusion as the
adoption of innovation 'overtime by the given social system';
as a consequence diffusion processes result in the acceptance
or penetration of a new idea, behaviour, or physical
innovation (Rogers, 1995). Diffusion research mainly focuses
on describing and explaining the adoption process as a
process of innovation diffusion at the aggregate level. In
marketing, Diffusion research is the Bass model which
focuses on how information is communicated in media and
interpersonally and how the two mechanisms of
communication result in an S-shaped aggregate adoption rate
often observed in studies of innovation diffusion (Bass et. al.,
1980). The study conducted on South Korean e-finance
customers concludes that the factors of e-finance i.e.,
perceived efficiency, system reliability, customer service, and
personal characteristics have a significant positive
explanation towards the degree of e-finance usage. But the
technical aspect and user interface factors of the e-finance
system are not considered important by the customers when
they try to intensify the e-finance usages (Cha et. al., 2005).
International delphi study on diffusion of online banking has
considered key factors that are driving banks to adopt online
banking are the adoption by other banks, competitive forces,
consumer demand and the availability of technology. This
study identified the drivers and inhibitors of banks' adoption
and innovation of online banking (Bradley and Stewart,
2003). This paper is concerned with the identification of the
acceptance and usage factors for users and non-users of
internet banking. The paper focuses on the educated
consumers (high school and above), who have access to the
internet on regular basis.
Online banking adaptation:
Marketing literature has studied the phenomenon of online
banking from various perspectives. Some studies, have
analyzed the adoption and growth of online banking, while
others, describe the benefits to be gained from the internet, as
far as the organization is concerned. In India, private and
foreign banks have been early adopters, while the public
banks are the followers. De and Padmanabhan, (2002)
According to that late 1995: ICICI Bank adopted online
banking and after that in 1999: Citibank, Indus Ind Bank and
HDFC Bank adopt online banking. As in all forms of
technology innovations, PSU banks have remained laggards
in the race for adopting internet practices. Nationalized banks
like State Bank of India, Bank of Baroda, Allahabad Bank,
Syndicate Bank and Bank of India, were the pioneering PSU
banks to offer internet banking. Some other like Union Bank
of India, Canara Bank and Punjab National Bank had followed
these banks. SBI's Internet Banking initiative, launched in
July 2001, is in fact doing quite well. But despite such positive
news, PSU banks will still have a lot of catching up to do on the
internet banking services front. Internet is not only a
distribution channel but also a "driver of comprehensive
industrial change" (Hensmans et. al., 2001). Internet provides
to banks more opportunity to increase their market coverage
and to better track the target customers. It also provides the
possibility of the information and price transparency as well as
'24/7' accessibility to the customers (Mols et. al., 1999).
The limited number of adoption studies, which have been
conducted on self-service technology (namely ATMs,
telephone banking, mobile banking, internet banking) made
available by banks, is summarized as follows. Marr and
Prendergast (1993); Rugimbana and Iversen (1994) and
Rugimbana (1995) investigated the adoption of ATMs, while
Al-Ashban and Burney (2001); and Locket and Litter (1997)
studied the adoption of telephone banking and Souranta and
Mattlla (2003); Laukkanen and Pasanen (2007) studied
adoption pattern of mobile banking. Some studies investigated
various issues relating to adoption of online banking. Tan and
Teo (2000) found that the influence of social norms on an
individual's intention to adopt internet banking was
insignificant. Polatoglu and Ekin (2001) measured the relative
satisfaction and loyalty towards online banking. Black et al.,
(2001) describe the characteristics appropriate for measuring
the adoption of online banking. Howcraft et. al., (2002),
studied the principle factors that inhibit online banking
adaptation. After that Rexha et. al., (2003), conclude that trust
and satisfaction influence online banking adaptation. Lee et.
al., (2005), segments the non-adopter category and explains
the diffusion process of online banking. Flavian et. al., (2006)
consider demographic factors that influence the customers
adoption behaviour to work with the same bank via internet.
Laukkanen and Pasanen (2007) studied that mobile banking
adopters are more different from online banking adopters.
The characteristics of Innovation:
Rogers (1995) identified four main characteristics of
innovations: relative advantages compatibility, complexity,
and risk. Researchers have found different perception about
these characteristics in between adopters and non adopters.
The given four characteristics should not be considered as
creating an exhaustive list (Gerrard and Cunningham, 2003)
but ones which have commonly been found in a wide range of
studies (Rogers, 1995). Let us, with this point in mind,
appraise the five main characteristics of innovations.
Relative advantages:
Barnett (1953) and Rogers (1995) noted that the
Sinhgad Business Review ?
ISSN : 0974-0597 ?
Vol. - III, Issue - I, July 2010 - December 2010
characteristics of new idea, as opposed to an old idea, are
important determinants of individuals' acceptance or
rejection of new idea. In other words, if a consumer perceives
relative advantages of an innovation compared to old ways of
doing business, he/she is more likely to adopt the innovation
(Rogers, 1995). Convenience has also been found to be a
measure of relative advantage in some innovation studies.
Consumers' perception of the relative advantages in service
attributes of online banking is therefore, the major
determinant of their intention of using the self-service
technology (Polatoglu and Ekin (2001). Internet bank users,
at all times, remain in full control of what they are doing
through the commands they enter via their PC's keywords
(Black et. al., 2001).
Compatibility:
Compatibility is defined as "the degree to which an
innovation is perceived as being consistent with existing
values, past experiences and the needs of potential adopters"
(Gerrard and Cunningham, 2003). Black et. al., (2001)
conclude that past experience and values of consumers in the
UK appear to have a significant impact on their willingness to
adopt online banking. Those who indicated they were
comfortable with the Internet were more positive about online
banking. In Turkey, due to low levels of e-mail usage and a
preference for using over-the-counter delivery at bank
branch, respondents viewed online banking as being far less
compatible (Polatoglu and Ekin ,2001).
Complexity:
Complexity is the "the degree to which an innovation is
perceived as difficult to understand and use". Complexity has
been measured in relation to perception about the purpose of
the respective innovation, its intended use and the ease with
which it can be used (Gerrard and Cunningham, 2003). Those
people who are well familiar and educated with the internet
and e-mail, should not find online banking complex
(Polatoglu and Ekin, 2001). E-banking requires a certain
minimum level of technical experience and competence,
irrespective of whether this relates to the use of a computer or
internet (Hewer and Howcroft, 1999). Black et. al., (2001)
found that complexity in conducting financial transactions
over the internet was inversely related to a consumer's
experience with computers.
Risk :
Ostlund (1974), in a non-banking context, appears to have
been the first to identify that perception about risk was a
characteristic which influences the rate of adoption.
Perceived risk was one of the major factors affecting
consumer adoption, as well as customer satisfaction, of online
banking services (Polatoglu and Ekin, 2001). Perceived risk
usually arises from uncertainty. Howcroft et. al., (2002) the
principal characteristics that inhibit online banking adoption
are security and accuracy. Furthermore, Thorton Consulting
23
(1996), which concludes that perceived lack of security, is one
of the main obstacles of growth in the number of online
banking users.
Research Methodology :
The key intention of this paper is to evaluate those factors that
manipulate the diffusion of online banking and their growing
tendency towards the online financial institutions. We
constructed several questions in the questionnaire based on
the objectives of the research. A total of 20 questions were
used to measure the characteristics relating to the adoption of
online banking and one question was used to measure nonadopter. From this study, respondents were considered to be
adopters if they had applied to become an online banking
customer and their bank had accepted the application. To be an
adopter in this study, a respondent did not have to have a
minimum usage pattern.
Sample :
Convenience sampling method was used. It is a type of nonprobability sampling which involves the sample being drawn
from that part of the population which is close to hand. That is,
a sample population selected because it is readily available
and convenient. The reasons of using this sampling type are
twofold. First, it offers an easy way to obtain the raw data for
the further analysis. Second, it saves times and costs. The
survey instrument used in this study was a structured
questionnaire for the empirical study. The questionnaire was
made up the dimension which measures the rate the adoption
of e-banking. The variables were measures using multiple
items. All of the scale items represented in the survey
instrument utilizing a five-point categorical rating scale. The
anchors used included: a) 1= strongly disagree, b) 2= disagree,
c) 3= neither agree nor disagree, d) 4= agree, e) 5= strongly
agree. The data was collected from adults employed in the
town area. The total number of usable responses was 127. Out
of 127 responses - 52 were from adopters and 75 from nonadopters.
Formulation of hypothesis:
Past research suggests that there is generally a positive
relationship between adoption and the various characteristics
of innovations, except those characteristics relating to security
and accuracy issues, where the expected relationship is
negative. The following hypotheses were formulated:
H1. Adopters and non-adopters differ on the basis of their
perception on accuracy in online banking.
H2. Adopters and non-adopters differ on the basis of their
perception on innovativeness in online banking.
H3. Adopters and non-adopters differ on the basis of their
perception on economic benefits in online banking.
The Diffusion Of Online Banking Among Indian Consumers : An Empirical Study ?
Neha Dixit ?
Prof. Saroj Kumar Datta
24
H4. Adopters and non-adopters differ on the basis of their
perception on security in online banking.
Findings and Discussion :
Development of the adoption characteristics:
We first perform the factor analysis for the four multi-item
measures by utilizing principal component extraction process
with varimax rotation. A suggested measure of the factor
loading of 0.5 or greater is adopted as a criterion to examine
the item reliabilities of all measures (Hair et. al., 1995). As
shown in Table 1, the measurement items are classified into
four factors. These factors were labelled accuracy, social
benefits, innovativeness, security.
There is also a need to comment about what has previously
been labelled as risk (Ostland, 1974). In this study, risk
decomposed into security and accuracy. These measures of
risk appear to be characteristics not identified in prior research
which has investigated the adoption of online banking.
Security arises because consumers feel that, by being an
internet bank customer, somehow, details of their financial
statement and financial make up may not remain private. In
regard to accuracy, it is true to say that Suganthi et. al., (2001)
labelled one of their characteristics with the same name but
they viewed accuracy in terms of financial transaction. This
study viewed accuracy in relation to the more to date
information and error free transaction. The characteristics of
security and accuracy, as defined above, is considered to be
new to the literature.
Internal consistency tests were conducted using Cronbach
alpha tests (Cronbach, 1946), with the alpha values ranging
from 0.86 to 0.73. The four statement used to measure
innovativeness were subject to a Cronbach alpha test for
which a figure of 0.86 resulted. These alphas are considered to
be reasonable or better (Sekaran, 1992) and the groupings
were retained for further analysis. Furthermore, the KMO and
Bartlett's sphericity were used to test the sample
appropriateness. This reveals that the variables load properly
on these four factors.
Table 1. Dimensions which influence the adoption of e-banking and the attributes which represents them
F1
Accuracy
All communications with my main bank's website are restricted to the web site and me.
Online financial transaction does not deduct any extra amount from my personal a/c.
Online bank provides me more upto date and useful information.
Online banking more secure in comparison to offline banking.
All my online financial transactions are free from error.
Inadequate PC skills discourage e-bank usage.
I do all my financial transaction through internet.
I am much friendly with online banking.
F2
F3
.844
.842
.836
.817
.805
.726
.716
.612
Innovativeness
I expect my use of e-banking to increase in near future.
I intend to use e-banking in near future.
I like to use e-banking in case of financial transaction.
I always recommend to others that they use e-banking
.829
.804
.756
.755
Economic Benefit
Online bank charge lower transaction fees.
I can easily perform all transaction through internet.
Online bank charge lower rate of commission.
Online banking services are too easy to use comfortably.
.710
.677
.669
.477
Security
Online bank provide insufficient protection of my account details.
Third parties may track my bank usage patterns.
Much time is required to complete an online transaction.
Online bank pay higher interest.
Eigenvalues
% of variance
Cumulative variance
68.94
Cronbach Alphas
F4
.817
.788
.659
.548
6.55
32.75
32.75
4.36
21.82
54.58
1.64
8.21
62.79
1.23
6.15
0.81
0.86
0.73
0.77
25
Sinhgad Business Review ?
ISSN : 0974-0597 ?
Vol. - III, Issue - I, July 2010 - December 2010
Extraction Method: Principal Component Analysis.
Rotation Method: Varimax with Kaiser Normalization.
Table 2. The Dimensions which influence the adoption of online banking: a comparison of adopters and non adopters.
AN n= 127
Adopters n= 52
Non-adopters n= 75
Adoption
Mean
Sd
Mean
Sd
Mean
Sd
t
Accuracy
2.88
1.19
0.35
0.90
0.24
0.99
3.46*
Economic benefits
3.45
0.92
0.01
0.92
0.01
1.05
0.19
Security
3.51
1.16
0.13
0.82
0.09
1.10
0.06
Innovativeness
3.53
0.93
0.02
0.83
0.01
1.11
-1.23
*Significant at p<0.01 and p<0.05
Accuracy:
It was hypothesized that adopters and non-adopters differ on
the basis of their perception on accuracy in online banking.
Data was subjected to the Independent Sample t-test. The
Levene's Test for Equality of Variances was applied to test if
the spread of the group differed (F-Statistic). If the observed
significance level for this test is less than 0.05, The separate
variance t-test is used. A review of the results in the Table 2
indicated that resulting t-statistic was 3.46 (P<.05 & .01).
Mean value of the adopter was higher (0.35) than the nonadopter (0.24). As far as these constructs are concerned, that
adopters and non-adopters differ on the basis of their
perception on accuracy in online banking. So H1 was
accepted.
Respondents finding seemed more positive about accuracy
because they perceived that online banking provides more
accurate and to date information to the users and it also give
error free transaction.
Economic Benefits:
It was hypothesized that adopters and non-adopters differ on
the basis of their perception on economic benefits in online
banking. The results in the Table 2 indicates that resulting tstatistic was 0.19 (P<.05 & .01). Mean value of the economic
benefits factor was same for adopters (.01) and non-adopters
(.01) in the online banking, as far as these constructs are
concerned, that adopters and non-adopters differ on the basis
of their perception on economic benefits in online banking. So
H3 was rejected. This finding may have arisen because many
customers pay no fees to their banks. By becoming online
banking adopters they do not feel that they will benefit
financially.
results in the Table 2 indicated that resulting t-statistic was
0.06 (P<.05 & .01). Mean value of the economic benefits
factor for adopters was higher (.13) than non-adopters (.09) in
the online banking, as far as these constructs are concerned,
that the responses were different as between adopters and nonadopters on security. Hence H4 was rejected. Customers were
of the opinion that banks may be tracking the type of banking
service they use and their frequency of usage. Non-adopters of
online banking are very much concerned about security
because they fear that some third party may track their
account, financial statement etc.
Innovativeness:
It was hypothesized that adopters and non-adopters differ on
the basis of their perception on innovativeness in online
banking. A review of the results in the Table 2 indicated that
resulting t-statistic was 1.23 (P<.05 & .01). Mean value of the
innovativeness factor was same for adopters (.02) and nonadopters (.01) in the online banking, as far as these constructs
are concerned, that the responses were different as between
adopters and non-adopters on innovativeness. Hence H2 was
rejected. This finding is consistent with many other adoption
studies. It suggests that those customers who are strongly
innovative are more likely to adopt a new financial product
after its launch.
Implications:
There are mainly four characteristics that come out i.e.
accuracy, innovativeness, security and economic benefits. The
empirical findings of the current study and the findings of
Suganthi et. al., (2001) suggest that further research need to be
conducted in a variety of settings in order to determine an
appropriate range of characteristics which model the adoption
of online banking.
Security:
It was hypothesized that adopters and non-adopters differ on
the basis of their perception on security in online banking.
Adopters and non-adopters indicated that they were
concerned about matters pertaining to security. Data was
subjected to the Independent Sample t-test. A review of the
Bank managers, based on the results of the current study,
would see that the respondents appeared to be more positive
about internet banking than neutral/negative irrespective of
whether they were adopters or non-adopters.
Banks need to reconsider what they have said and done to date
26
The Diffusion Of Online Banking Among Indian Consumers : An Empirical Study ?
Neha Dixit ?
Prof. Saroj Kumar Datta
in explaining the level of security which support the bank's
computer system and that third party instructions into an
internet account are impossible. Bank need to emphasize that
customers, when creating their PIN/password, should use one
which is easy for them to remember, and thus make it
unnecessary for it to be recorded anywhere.
The result about innovativeness suggests that banks should
maintain records of those who are amongst the first to use a
new product or services and then specifically target them
when other products are introduced. If such campaign is
successful, the take off point on the typical "S"-shaped
adoption curve (see Rogers, 1995, p. 106) could be
accelerated and banks would be able to quickly recover the
costs they have incurred in developing and introducing online
banking.
Conclusion, Limitation and Future studies:
Conclusion:
In this paper, we study Indian customers who are adopters and
non-adopters of online banking. The Knowledge about
diffusion of online banking is somewhat in a nascent stage, in
concurrence with comment made by Black et. al., (2001), The
diffusion model of Rogers (1962) is seen as a good starting
point in any study which investigates the adoption of internet
banking. The results of the present study and similar study of
Suganthi et. al., (2001) suggest that the findings of empirical
research may not be consistent in the number of ways with the
concepts proposed by Rogers (1962) and Ostlund (1974). The
way respondents rated the various characteristics can be
viewed both on a comparative basis and on an absolute basis.
In comparative terms, accuracy, security, innovativeness and
economic benefits were viewed differently by adopters and
non-adopters. In absolute terms, respondents perceived that
online banking offered high level of accuracy as defined in the
study, was a major concern. The result suggests that, whether
consumers are adopters or non-adopters, both are very much
concerned about security and accuracy issues related to online
banking. This study adds to the growing knowledge about the
adoption of the self-service technology used in the banking
sector.
various types of self-service technology. Such studies would
also show the extent to which the various forms are likely to
influence the way consumers will source specific bank service
in future.
The result showed that advantages did not remain single
characteristics but split into separate measures, all of which
appeared in the text of Rogers (1962). Relative advantages
were found to split into economic benefits and innovativeness.
Risk also split into security and accuracy. Further research
may confirm, or otherwise, that these dimensions are distinct
as opposed to being generically labelled as relative advantage
or risk.
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ISSN : 0974-0597
Sinhgad Business Review
Vol. - III, Issue - I, July 2010 - Dec 2010
Human Capital Development: A Study of Tourism Industry in Jammu
Dr. Jaya Bhasin
Abstract:
The concept of Human Resource Development deals with the
improvement of human quality in general and development of
human skills, standards, comprehension and application in
the production and service enterprise in particular. Tourism
Industry, which is one of the largest service industry, plays a
key role in achieving the socio-economic goals of the
development plans of any nation. It is an important service
industry which has made rapid strides globally in terms of
gross revenue and foreign exchange earnings.
The present study has been conducted for J&K State. The
study is conducted on the senior, middle and the lower level of
management of the Tourism Department i.e. the Directorate
and the Tourism Development Corporation. The data has been
collected by using a structured and validated questionnaire,
from 60 participants, taken randomly from all the levels of the
employees from the Tourism department in J&K during the
workshop conducted by the J&K Institute of Management,
Public Administration and Rural Development. The analysis
of the primary data collected shows the need for human
capital development and need based training programmes for
all the three levels. Also, the participants have strongly
recommended conduct of familiarization tours for all the
employees and special regular training programmes for the
operational staff in specific areas at premier hospitality
institutes. The paper suggests an integrated model with
strategic human development interventions for Tourism
Industry.
Human Capital Development:
Human Resource is the most valuable asset to the
organization and its contribution is cardinal to the successful
achievement of organizational objectives. The development
of human resources is necessary for its efficient and effective
working. The concept of Human Resource Development
deals with the improvement of human quality in general and
development of human skills, standards, comprehension and
application in the production and service enterprise in
particular. Human Capital or Resource theory is a recent
Assistant Professor, The Business School,
University of Jammu, Jammu
E-mail: [email protected]
addition to economic thought. Human Capital theory implies
that human beings also posses the same traits as that of
structures, equipments and inventories. The main inputs of
human capital revolution are knowledge and education. The
output in this system is the organizational effectiveness. The
earlier thought states that the people working in the
organizations can be motivated by comforts and salary, and so
attention was focused on rationalizing these. But, now, human
capital is recognized as different to other resources of the
organization. This is due to the fact that the contribution of
"People" to the organization is much more than that of any
other resources being used.
It is "People" in the organizations who strive for optimum
utilization of other resources. The right attitude of human
beings decides the future growth and stability of the
organization. This right attitude can be developed if human
capital is considered as a resource and not just an item of
income. The theory of Human Resource Development
involves two sub concepts. First, people are resource and so
are valuable to the organization and second, they to be treated
as human beings and not like other material resources. This
resource has to be recognized and appreciated as it is a great
asset for the organizations progress towards reaching its
unlimited potential. Managing human resources in a human
way is the key to success of any organization. It is now a firm
belief that enterprises can improve their effectiveness and
their productivity provided their human resources are
developed. (Pareek and Rao, 1988)
The research studies show that human resource development
is about creating an environment or more specifically a
culture, where people can develop their full potential, lead
productive and creative life in accordance with their
individual and institutional needs and interests.
Human Resource Development is a process through which
employees in an organization are assisted to realize their full
potential for their present and future jobs. It is primarily
concerned with the development of employees through
mechanisms like training, feedback, counseling, career
planning, performance and potential appraisal, organizational
development techniques, employee welfare schemes and
rewards.
Colbert, B. (2004) has proposed an integrated framework for
Strategic Human Resource Management (Fig. 1) by
demonstrating the concepts from complexity align well with
29
Sinhgad Business Review ?
ISSN : 0974-0597 ?
Vol. - III, Issue - I, July 2010 - December 2010
Key Features
RBV
Complexity
Creativity/adaptivity
Competitive advantage grows from latent
Creative potential embedded in a firm's
resources
Complex adaptive Systems learn and create
new responses to their contextual
environment
Complexity and ambiguity
Inability arises from social complexity and
causal ambiguity
Living systems are composed of complex
interrelationships that are nonlinear non
deterministic and unpredictable
Disequilibrium, dynamism
and path dependence
Complex relationships build over time and
are historically dependent; disequilibrium is
creative state; dynamism and process issues
are paramount
Systems thrive and create at far and
equilibrium leads to stagnation, decline and
death. Path unfold irreversibly through time
System level resources
Some key strategic resources are intangible
and exist only at the system level, in
relationships
Some elements only exist at the system level,
in the dynamic relationships between things
Figure 1: Complex RBV: Critical but difficult Features of the RBV and the Key Features of Complex System
Source: The Complex Resource Based View: Implications for Theory and Practice In Strategic Human Resource Management,
Colbert, B., Academy of Management Review, 2004, Vol.29, No.3, 341-358.
the Resource Based-View (RBV). Several aspects like causal
ambiguity, social complexity and system level resources
explicitly invite a more complex, less reductive view of
organizations. This allows reframing the RBV in a way that
admits some of its more important strategic aspects.
Schuler and Jackson developed a set of "needed role
behaviors" for each strategy. Sparrow and Hiltrop (1994)
stipulated a set of hypotheses about the personnel and
industrial relations practices and identified the most
important Human Resource Management practices about
which strategic decisions had to be made. They have
suggested logical alternatives that could be applied in
competitive environment. According to HRD/ Organizational
Alignment Model, "Human Resource Management could be
seen as a menu of strategic choices to be made by Human
Resource executives intended to promote the most effective
role behaviors that are consistent with the organization
strategy and are aligned with each other.”
Human Capital Development: A Study of Tourism Industry in Jammu ?
Dr. Jaya Bhasin
30
Organization Mission/
Goals
Organizational Level Function
Human Resources
Function
HR Level Function
HRD Philosophy
HRD Policy
HRD Goals
HRD Level Function
Figure 2: Organization Alignment Model
Source: Marjorie L. Budd, "U.S. Office of Personnel
Management, Training Needs Assessment Handbook: A
Guide for conducting a Multilevel Needs Assessment,
HRDG Document 024( Washington, DC,1994).
The Organization Alignment Model as shown in figure 2 is
based on a "top-down" approach. This approach facilitates the
following outcomes:
?
Linkage of HRD to a broader HR and Organization
Framework.
?
A framework in which to plan and manage agency HRD
activities
?
Awareness of HRD as a key management tool
?
Assessment of the effectiveness of HRD within the
context of organizational effectiveness.
Human Capital Development in Tourism Industry:
Tourism is motivated by the natural urge of every human
being for new experiences, adventures, education, knowledge
and entertainment. Tourism has resulted in development of
many tourist and infrastructure facilities, in order to
understand each other's cultures and values as well as to cater
several other social, religious and business interests. This,
along with the capital formation taking place globally,
especially of airways and waterways, has encouraged people
to venture out to foreign lands. It has facilitated trade and
commerce, exchange of human resources, between different
regions of a country and between the different countries. As a
result, over the years, it has acquired the status of a service
industry.
Tourism can be called as one of the largest industry. This
service industry plays a key role in achieving the socioeconomic goals of the development plans of any nation. It is
an important service industry which has made rapid strides
globally in terms of gross revenue and foreign exchange
earnings. It is a composite of human resources, both public
and private, including travel agents and tour operators; air, rail
and sea transportation operators; tour guides; entrepreneurs:
owners of hotels, guest houses and inns, restaurants and
shops; etc. They are involved in meeting the diverse interests
and requirements of the domestic and international tourists.
Tourism industry provides incentives to foster the economic
growth of a nation, by generating more employment
opportunities (particularly in remote and backward areas, for
less technical and less educated human resource) as well as
helps in capital formation in the form of infrastructural
development.
Human Resource Development acquires special meaning in
the Hospitality Industry due to a variety of factors such as
Hospitality Industry is a labor intensive industry, labor
turnover of the employees is high, job security is low, and the
compensation patterns are low. Besides this, the quality of
services and the objective in achieving its socio economic
goals are highly dependant on the employees who deliver the
services. Also, the service delivery mechanism is based on the
satisfaction of the external customer. Thus, the task of HRD, is
central in Hospitality Industry and any neglect of human
resource development will destroy the very fabric of the
hospitality industry.
The importance of Hospitality and Tourism Industry in a
developing country like India can be clearly outlined.
Liberalization, Privatization and Globalization have made
Indian economy vibrant. Economic liberalization in India has
given a big push to Indian Tourism. Tourism is today
projected as an engine of economic growth and an instrument
for eliminating poverty, curbing unemployment problems,
opening up new fields of activity and upliftment of the
downtrodden sections of society.
The Tourism industry has a great potential of growth (see
Table 1) as the number of world travelers would go up to 1600
million by the year 2010 (WTTC).
Table 1: WTTC Report (World Travel and Tourism
Council)
Travel and Tourism Demand, 2005-14
Rank
1.
2.
3.
4.
5.
Country
Montenegro
India
China
Vietnam
Angola
% Annualized Real Growth
10.3
8.8
8.7
8.3
8.2
According to the WTTC, growth in the Americas and Europe
are expected to fall below the world average of 2.1 percent, but
Asia Pacific and other emerging markets including the Middle
East can look forward to an increased business and leisure
travel. The WTTC added that even in countries where
economic growth slows, there is likely to be a demand and
switch from international to greater interest in domestic,
regional tourism.(Sulaiman, Yusof, World Travel and Tourism
Council, Apr 07, 2008.)
In this line tourism and hospitality industry in J&K can bring a
boost to the state's economy as it has been hit by militancy for a
long period and the revival of economy can be brought about
by developing tourism industry. J&K is endowed with the
scenic beauty of Snow clad Mountains, bubbling streams,
sparkling lakes and rare fauna and number of historic sites of
Sinhgad Business Review ?
ISSN : 0974-0597 ?
Vol. - III, Issue - I, July 2010 - December 2010
pilgrimage. The secondary data from India Statistics on the
domestic and foreign tourist inflow in J&K shows that there
had been a decline in the tourist flow in the state till 2003. The
main factor responsible for this decline can be attributed to
militancy. The figures show an alarming decline of foreign
tourist in J&K. India achieved a significant growth in terms
of foreign tourist arrival in the last two years. A record growth
of 26.8% foreign tourist arrivals was achieved in 2004 while
the growth was 13.2% in 2005. Taking India's tourist arrivals
from 2.73 million in 2003 to 3.92 million in 2005 indicate a
robust growth of 43.6% in the period 2003-2005. Tourism has
increased the foreign exchange earnings from US$ 3.5 billion
in 2003 to US$ 5.7 billion in 2005.The domestic flow of
tourists to Vaishno Devi and Amar Nath Cave has increased in
the last five years. After revival of tourism and increase in the
religious tourism in the state, especially in the Jammu
province shows the importance of developing the human
capital in the tourism and hospitality industry in the state. As
the Human Resource Development would lead to the
exploration of new tourism areas and also help in advertising
the tourism industry in a way to give a boost to the industry
and help in the overall development of the economy.
The Tourism Department in the State, Civil Secretariat,
comprises of Secretary, Additional Secretary and Director at
the Higher Level of Management, Deputy Director, Under
Secretary and Law Officer at the Middle Level and Section
Officers and Ministerial Staff at the Lower Level. The
Directorate of Tourism for the promotion of tourism in the
State is set up at Jammu and Kashmir regions separately,
which comprises of the Director, Joint Director, and service
specific Deputy Directors, Assistant Deputy Directors,
Tourist Officers and Receptionists. The Jammu and Kashmir
Tourism Development Corporation has been set up for further
promotion and development of tourism in the State, which is
headed by the Managing Director to whom Area & Service
specific General Managers, Deputy General Managers and
Senior Managers, Managers , Deputy Mangers, Assistant
Strengths:
?
Splendid natural attractions
?
Religious attraction
?
Distinct and Unique Culture
?
Diverse colourful festivals, fairs
?
Quality handicrafts and handloom
?
Easy communication and approach
Opportunities :
?
Growth of domestic tourism
?
Expansion of regional tourism (Punjab, Himachal Pradesh)
?
New trends of educational, religious & medical tourism
?
Growth of international tourism
?
Improvement of Transportation (Rail Network in valley
and remote areas of Jammu)
?
Improvement in Infrastructure
?
Prevalence of Peace
?
Community recognition of tourism
?
Higher Central Assistance
31
Managers and the Operational Staff report.
The Directorate Head Office in J&K also works in
coordination with the Tourist Reception Centres established at
Railway Station, Airport, Lakhanpur, Mansar, Rajouri,
Shivkhori, Kud ,Patnitop, Batote, Sanasar, Ramban, Banihal,
Kishtwar, Doda, Bhaderwah and Udhampur. Tourism
Development Authorities have been constituted as a major
initiative to ensure speedy development of the areas of
importance. The nineteen tourism development authority
(TDA) have been constituted and headed by the Chief
Executive Officer at Patnitop, Kishtwar, Bhaderwah, Poonch,
Rajouri,Lakhanpur- Sarthal, Mansar- Sunisar. The Seven
Development Authorities (Jammu Division) have been
strengthened by the staff of Executive engineer, Accounts
Officer, Landscape Architect, and other ministerial Staff, in all
twenty one personnel for each Development Authority.
The analysis of the Central and State sponsored schemes for
the State shows that there has been no dearth of economic
resources for the development of tourism in the State. Human
capital development is the only requirement for the Tourism
Industry in Jammu province. The primary data has been
collected from 60 participants from all the three levels during
the Workshops conducted by the J&K Institute of
Management, Public Administration and Rural Development,
Jammu for understanding the Human Capital Development in
The Tourism Industry in Jammu region. The sample is
proportionately representative of all the three levels of
management. The SWOT analysis for the tourism
development in the State has been conducted along with the
preparation of the road map for the development of human
capital for the tourism industry of the state. The Strength,
Weakness, Opportunity and Threat facing Jammu and
Kashmir Tourism which came out as an outcome of the
workshops conducted for the higher and middle level
management levels of the Directorate of Tourism, Jammu can
be outlined as:
Weaknesses :
Negative image of security and safety
?
?
Militancy
?
Inadequate information and publicity
?
Poor accessibility to some areas
?
Poor infrastructure in remote areas
?
Poor quality of tourism services
?
Non availability of trained manpower
?
Weak land use, planning and environment
protection
Threats :
?
Militancy
?
Negative Media Reports
?
Cheating and extortions
Figure3: SWOT Analysis of Tourism Industry in J & K
Human Capital Development: A Case of Tourism Industry in Jammu ?
Dr. Jaya Bhasin
32
Figure 3 clearly shows that the natural and religious
attractions of the State are unparallel and make the destination
relatively an important destination. Equally important
strength of the State is the handloom and handicraft industry.
The distinctive culture need to be projected and publicized.
The new opportunities which are emerging before the State to
take the advantage of the tourism economy primarily include
the growth of domestic tourism and expansion of regional
tourism. At present, militancy is under control and the State's
economy is now growing. This is a welcome change and
needs to be supported by community integration and for the
development of tourism. The main weakness is non
development of the potential tourist destinations and the
major threat is militancy.
It is essential to publicize the tourist destinations in Jammu
region as Kashmir is a well known name, but the potential
tourist destinations in Jammu have still not been developed
and publicized. Also, the infrastructural development in the
Jammu region is not as per the government policy. Therefore,
further measures have to be evolved to improve capacity
utilization and services of the existing tourism destinations
and to promote the potential tourist destinations in the Jammu
region. It is necessary to ensure that the future selection and
implementation of the tourism development projects have to
be based on well defined criteria and guidelines and the
capacity enhancement of the manpower needs to be done on
priority basis.
Findings:
The present study has been carried out in Jammu Province
with an assumption that the Tourism and Hospitality industry
in a region can grow with the development of the human
resources. The main objective of the study therefore can be
stated as to determine the training needs of the human
resources working in the hospitality and tourism industry in
Jammu Province. Keeping this objective in mind a series of
workshop were conducted by the Apex Training Institute at
Jammu. The sample for data collection was taken randomly
representing all the three i.e. upper, middle and lower level of
management, from the Directorate of Tourism, Jammu. The
data has been collected by administering a self designed
questionnaire with high reliability (Chronbach alpha= 0.726)
Table 2 provides description statistics of collected data The
analysis of the primary data shows that more than 50% of the
participants have outlined various shortcomings in the human
capital development efforts of the Directorate of tourism in
J&K. The main shortcomings are lack of proper knowledge
dissemination at the reception desks, no internet facilities, lack
of pre paid mobiles (due to security reasons), defective billing
method and inadequate information services. The participants
also agree that the general maintenance of the tourist huts and
hotels is not up to mark. The fittings and fixtures of the hotels
are also not of international standard. The personnel also agree
to the point that the rates and tariffs of the government huts and
hotels are higher and not competitive with the private hotels.
At the same time, the facilities are also not competitive to the
international standards. Regarding the F&B Services and food
production also, the service standards of most of the
restaurants are not satisfactory. 98% of the participants have
mentioned in other comments that the meals provided are dull
and the menu is of limited range. They agree to the statement
that proper hygiene conditions are lacking in the food
production areas.
The test results (see Table 3) show a significant difference and
thus determine the need of human capital development for the
Tourism Industry in J&K .The J&K Tourism Department is
making efforts for promoting tourism in the State and a
number of innovative steps have been taken for its revival. The
State Government has created fifteen new Tourism
Development Authorities besides four old authorities, to cover
more areas with tourist potential. Eight of the new
development authorities are being funded under Prime
Minister's Reconstruction Plan with the financial assistance of
Rs.20 crores each over a period of five years and the remaining
Table 2: Descriptive Statistics
S. No.
Variables
1
Self Knowledge and Skills
2
% below average
Mean
Std. Deviation
Variance
43%
2.2500
.93201
.869
Other Employees Knowledge and Skills
52%
1.8167
.70089
.491
3
Satisfied with Training
57%
1.0667
.93640
.877
4
Requisite Knowledge about Destinations
38%
2.3667
.75838
.575
5
Adequate Govt. Policies
0%
4.0000
.71307
.508
6
Human Capital Lacks required capacities
51%
1.8833
.64022
.410
7
Operational Staff requires training
50%
1.4333
.96316
.928
8
Satisfied with HRD efforts taken by govt.
55%
1.6667
1.12997
1.277
9
Training will help in better utilization of potential
60%
1.1667
.37582
.141
10
Sensitization programmes for local population
55%
1.6500
.95358
.909
33
Sinhgad Business Review ?
ISSN : 0974-0597 ?
Vol. - III, Issue - I, July 2010 - December 2010
Table 3: T Test
95% Confidence Interval of the
Difference
VAR00001
t
dt
Sig. (2-tailed)
Mean Differnce
Lower
Upper
7.286
9
.000
1.93001
1.3308
2.5293
seven under the State Plan. The four old development
authorities are also being funded under Prime Minister
Reconstruction Plan. The Ministry of Tourism has sanctioned
twenty-eight Tourism Development Projects (TDP) and
released Rs.51.81 crores in the last two years (Directorate of
Tourism, 2006-07).
The Directorate of Tourism has taken many steps to revive
adventure tourism in the State. Special emphasis has been laid
on aquatic sports such as White Water Rafting, Kayaking,
Water Skiing, Canoeing, Ice Skating, Ice Hockey, and Revival
of Trekking and Mountaineering Expedition. The Directorate
of Tourism has also laid emphasis on the development of
special events like fairs, car rallies, paragliding and other
sports activities. The Ministry of Tourism has also identified
areas for development as Tourist Villages (Directorate of
Tourism, 2006).
Conclusion and Suggestions:
The efforts of the Centre and the State government to boost
tourism call for the development of the human resources. The
Directorate of tourism has identified the following functions
for the development of tourism industry in the State:
?
Preparing an action plan for the overall development of
the tourist destinations.
?
Marketing of the Tourist destinations of the State at the
National and international level by publicity, fairs,
festivals, exhibitions, advertisements, travel marts,
conferences, seminars, etc.
?
Registration and enforcement of Tourist Trade Acts in the
tourism industry
?
Implementation of the government policies to promote
tourism.
The J&K State Tourism Policy deals with the various facets of
activities for the promotion of tourism, but it does not specify
the development of the manpower. The outcome of the
workshops clearly reflects specific training needs for the
Higher, middle and lower level of management. The
participants have clearly identified the need for both short
term and long term training programmes and have envisaged
the need to conduct tour for the staff members. The J&K
Institute of Management, Public Administration and Rural
Development conduct area specific training programmes for
the middle management. But the specialized training
programmes are not conducted in the State and only a few
employees are sent for training in specialized institutes. The
frequency of such participants as calculated from the
questionnaire for the middle level management is below 30%.
The development of human resources is of crucial importance
in a service industry like tourism, as it is an activity dealing
with people and catering to their specific needs. It is essential
to create a special experience for every tourist and this can be
done by the well developed human capital, who can create a
ambience that would not only satisfy the customer but also
would attract them. Knowledge is not enough in such industry,
skills and attitude makes a big difference. This can be done by
Capacity enhancement of Human Capital.
It is interesting to note that although the State Government is
actively pursuing the concept of tourism promotion, but still
the State does not have any specialized Training Institute.
Although, manpower is selected with the required
qualifications, but the state government needs to initiate
measures to set up a Crafts Institute and start conducting
refresher courses in areas like front office, food and beverage,
housekeeping, tour assistants, information assistants, etc. It is
also very important to conduct special communication
training packages for the taxi drivers and conductors who
come in direct contact with the tourists.
The suggested Integrated Framework for Human Capital
Development includes identified capacity enhancement at
each level of management. The participants have identified
that there is a need to provide knowledge of legislation in J&K
tourism, SRO and financial code. The participants agree to the
statement that the apex training institute of the State should
prepare a training module with latest information on SRO,
Legislation and Financial Code. Also, familiarization tours
can help the participants in selling the tourist destinations in a
proper way.
The Integrated framework (see Figure 4) shows that the
objectives of the training programme need to be set for the
institutional arrangement for growth and development of
human resource in the hospitality industry. The thrust should
be on increasing professional standards, improving services,
increase visitor satisfaction and making a career in tourism
more satisfying and acceptable. These objectives could be
achieved only through training of the people related to the
sector - current and potential officers and staff in the
Directorate of Tourism. The following types of trainings can
be recommended:
?
Tourism Awareness Programmes for creating a
favourable view of the general public, students and the
local population for developing Tourism Industry
Human Capital Development: A Study of Tourism Industry in Jammu ?
Dr. Jaya Bhasin
34
Training Programmes for Lower
Levels
Training Programmes for Middle
Level
Training Programmes for Senior
Level
Personality Development
?
Tourism Marketing Techniques
?
?
Information Technology
?
Effective Communication
?
Use of Information Technology
in Tourism Organization
?
Public Private Partnership
?
Tourism in J&K
?
Contemporary Issues in Tourism
Development and Promotion
?
Office Procedures and
Management
?
Human Resource Management
in Tourism
?
Hospitality Administration
?
Managerial and Behavioral Skills
?
Contemporary Issues in Tourism
Development and Promotion
?
Project Management and
Logistics Planning for Tourism
Development in J&K State.
?
Communication and Behavioral
Skills for Organizations
?
Public Private Partnership in
Tourism
?
Managing Environmental Impact
of Tourism
?
E Tourism
?
Eco tourism and Sustainable
development
Training Interventions
Professional Training
?
?
Promotion of existing circuits and development of new circuits
?
Infrastructural up gradation and knowledge to use these
?
Private Participation.
Critical Success Factors- Developing Core Competencies
Organisational Objectives
Figure 4: Suggested Integrated Framework for Human Capital Development
Entrepreneurship Development Programmes to create
?
awareness among the local population to start a tourism
enterprise by delivering a set of attitudes, skills and
behaviors. Encourage a set of people having high
motivation to become entrepreneurs in tourism
?
Tourism facilitation programmes to generate awareness
among the employees to develop tourism destinations
?
Management Development Programmes for the Senior
and Middle Level Managers on the Issues Identified
Skill development programmes for the operational Staff
?
for improving the service delivery
?
Regular Training in different tourism related trades to
provide trained manpower for the tourism industry
The Human Capital Development entails community
involvement and participation at each stage. Attaining
effectiveness in Tourism Industry requires a development of
an integrated framework for human capital development from need identification to implementation; and taking
Sinhgad Business Review ?
ISSN : 0974-0597 ?
Vol. - III, Issue - I, July 2010 - December 2010
feedback at each stage. This would not only enhance human
capital but also help in the revival of the economy of the State.
References:
Colbert, B. (2004) The Complex Resource Based View:
Implications for theory and Practice in Strategic Human
Resource Management, Academy of Management
Review, Vol.29, No.3, pp 341-358
Rohmetra, Neelu (19980, HRD in Commercial Banks in
India, Ashgate Publishing, England,pp. 6-8
Pareek, U. and Rao, T. V. (1988), Designing and Managing
Human Resource System, Oxford and IBH Publishing
Co., New Delhi; pp 1-12.
Human Development Report (2001, Oxford University Press,
New York; pp 8-9.
Sparrow, P. and Hiltrop J.-M. (1994) European Human
Resource Management in Transition, Prentice Hall.
Tichy, N.M., Fomburn, C.J. and Devanna, M.A. (1982)
"Strategic human resource management", Sloan
Management Review, 23(2), pp 47-61.
Schuler, R.S. and S. E. Jackson (1987) (1999) Linking
competitive strategies with human resource management
practices, Academy of Management Executive, 1(3), pp
209-13
Marjorie L. Budd, (1994) "U.S. Office of Personnel
Management, Training Needs Assessment Handbook: A
Guide for conducting a Multilevel Needs Assessment,
HRDG Document 024 Washington, DC.
Sulaiman, Yusof, (2008) World Travel and Tourism Council
Report, Apr 07, 2008.
35
ISSN : 0974-0597
Sinhgad Business Review
Vol. - III, Issue - I, July 2010 - Dec 2010
The Role of Psychological Contract in Retention Management
1
2
Dr. Babita Agarwal , Prof. Kshama Ganjiwale
Abstract:
Today's growing "war for talent" is making it more and more
difficult for organizations to keep current employees and to
find qualified replacements. This study examines the
challenges that organizations face with employee retention in
an increasingly competitive labor market.
This article examines employees' views on the factors
affecting employee retention. This is done by integrating
findings from literature on retention management with the
theoretical framework of the psychological contract. In this
study, respondents from a diverse group of private
organizations described the factors they believed affected
employee retention and the retention practices set up in their
organization. Employees were asked to report on the
importance attached to four types of employer inducements
commonly regarded as retention factors. They also evaluated
their employers' delivery of these inducements and provided
information on their loyalty; intentions to stay and job search
behaviors. The results of the study are discussed and
implications for HR managers are highlighted.
Introduction :
Both researchers and human resource (HR) practitioners
agree that the employment relationship is undergoing
fundamental changes that have implications for the attraction,
motivation and retention of talented employees (Horwitz,
Heng, & Quazi, 2003: Roehling, Cavanaugh, Moyhihan &
Boswell, 2000; Turnley & Feldman, 2000). Over the past
decades, the economic environment
has changed
dramatically. Due to on-going evolutions towards
international competition and globalization of markets,
organizations are required to be more flexible and increase
their productivity. This has reduced the job security of
employees at all levels in the organization (King, 2000) but at
1. Reader, Shri Vaishnav Institute of Management,
Scheme No. 71, Gumasta Nagar, Indore, India
Email : [email protected]
2. Lecturer, Shri Vaishnav Institute of Management,
Scheme No.71, Gumasta Nagar, Indore, India
Email: [email protected]
the same time HR managers are pressed to attract and retain
talented employees who have competencies that are critical
for organizational survival (Horwitz et al., 2003; Mitchell,
Holtom & Lee, 2001; Roehling et al., 2000; Steel, Griffeth &
Hom, 2002). Often, however, exactly these employees are
difficult to retain due to their tendency to attach more
importance to making out their own career path, than to
organizational loyalty; a tendency which results in increased
rates of voluntary turnover (Cappelli, 2001). Within the HRM
literature, retention management
has become a popular
concept to examine the portfolio of HR practices put into place
by organizations in order to reduce voluntary turnover rates
(e.g. Cappelli, 2001; Mitchell et al., 2001; Steel et al., 2002).
Another concept that has gained interest as a construct
relevant for understanding and managing contemporary
employment relationships is the psychological contract,
which refers to employees' subjective interpretations and
evaluations of their deal with the organization (Rousseau,
1996; 2001; Turnley & Feldman, 1998). Researchers in this
field argue that in order for retention management to be
effective, the creation of an optimal portfolio of HR practices
is not sufficient and that it is important to manage employees'
expectations relating to these practices. Only in this way HR
managers can be confident to create a deal that is mutually
understood by both the organization and its employees
(Rousseau, 1996).
Review of Literature :
In view of the large costs associated with employee turnover,
even in a Global Economic Downturn, characterized by
downsizing and layoffs, HR managers still need to work out
HR practices that enable them to retain their talented
employees (Horwitz et al., 2003; Steel et al., 2002). These
practices are often bundled under the term "retention
management". Retention management is defined as "the
ability to hold onto those employees you want to keep, for
longer than your competitors" (Johnson, 2000). In the
literature numerous factors are put forward as important in
affecting employee retention, varying from purely financial
inducements to so-called "new-age" benefits. These
inducements can be grouped into four major categories of
retention factors, namely (1) financial incentives, (2) career
development opportunities, (3) job content, (4) social
atmosphere, and work-life balance (e.g. Horwich et al., 2003;
Roehling et al., 2000; Ulrich, 1998).
Sinhgad Business Review ?
ISSN : 0974-0597 ?
Vol. - III, Issue - I, July 2010 - December 2010
First, financial rewards, or the provision of an attractive
remuneration package, are one of the most widely discussed
retention factors, since they not only fulfill financial and
material needs, but also have a social meaning. Salary level
provides an indication of the employee's relative position of
power and status within the organization. However, research
shows that there is much inter-individual variability in the
importance of financial rewards for employee retention
(Pfeffer, 1998; Woodruffe, 1999). For instance, a study
conducted by the "Institute for Employment Studies" (Bevan,
1997) reveals that only ten percent of people who had left their
employer gave dissatisfaction with pay as the main reason for
leaving. However, despite the fact that many studies show
financial rewards to be a poor motivating factor, it remains a
tactic used by many organizations to commit their employees
to the organization by means of remuneration packages
(Cappelli, 2001; Mitchell et al., 2001; Woodruffe, 1999). For
instance, in a recent study Horwitz et al. (2003) found that the
most popular retention strategies reported by HR managers of
knowledge firms still related to compensation.
Second, opportunities for career development are considered
as one of the most important factors affecting employee
retention. It is suggested that a company that wants to
strengthen its bond with its employees must invest in the
development of these employees (Hall & Moss, 1998; Hsu,
Jiang, Klein & Tang, 2003; Steel et al., 2002; Woodruffe,
1999). Other factors relating to career development are the
provision of mentoring or coaching to employees , the
organization of career management workshops and the set up
of competency management programs (Roehling et al.,
2000). For instance, in a recent study Allen, Shore & Griffeth
(2003) found that employees 'perceptions of growth
opportunities offered by their employer reduced turnover
intentions. Steel et al. (2002) also report empirical data
showing that lack of training and promotional opportunities
were the most frequently cited reason for high-performers to
leave the company.
The third category of retention factors relates to employees'
job content, more specifically the provision of challenging
and meaningful work. It builds on the assumption that people
do not just work for the money but also to create purpose and
satisfaction in their life (Mitchell et al., 2001; Pfeffer, 1998).
According to Woodruffe (1999) employees, in addition to a
strong need to deliver excellent results, also want to take on
difficult challenges that are relevant for the organization.
However, when their work mainly consists of the routinebased performance of tasks, the likelihood of de-motivation
and turnover is relatively high. By thinking carefully about
which tasks to include in which jobs, companies can affect
their retention rates (Steel et al., 2002). The social
atmosphere, i.e. the work environment and the social ties
within this environment, is the fourth retention factor
considered by many researchers. Cappelli (2001) states that
loyalty to the organization is a thing of the past, but loyalty to
one's colleagues acts as an effective means of retention. When
an employee decides to leave the organization, this also
means the loss of a social network. Some research suggests
37
that social contacts between colleagues and department are an
important factor for retaining talent. Organizations can
contribute to the creation of a positive social atmosphere by
stimulating interaction and mutual cooperation among
colleagues and through open and honest communication
between management and employees (Roehling et al., 2000).
The conflict between work and career on the one hand and
private life on the other is currently assuming large
proportions in our society. There is an increasing demand for
more flexible forms of work, which would positively affect the
reduction of the work-family conflict and employee
satisfaction in general (Anderson et al., 2002; Kossek &
Ozeki, 1998). HR policies addressing work-life balance are
assumed to be important because the current generation of
employees attaches much importance to quality of life, as a
result of the ever increasing work pressure (Cappelli, 2001;
Mitchell et al., 2001). Research suggests that policies aimed at
improving the work-life balance are successful if they are
implemented in a supportive context that truly allows
employees to make meaningful and useful choices (Anderson
et al., 2002: Kossek & Ozeki, 1998).
Many researchers argue that the psychological contract plays
an important role in helping to define and understand the
contemporary employment relationship (Rousseau, 2001;
Shore & Coyle-Shapiro, 2003; Turnley & Feldman, 1998).
Psychological contracts consist of individuals' beliefs
regarding the terms and conditions of the exchange agreement
between themselves and their organizations (Rousseau,
1996).
They emerge when individuals believe that their organization
has promised to provide them with certain inducements in
return for the contributions they make to the organization
(Turnley & Feldman, 2000). The growing body of literature on
the psychological contract reflects accumulating evidence for
its influence on diverse work-related outcomes. These studies
show that employees evaluate the inducements they receive
from their organization in view of previously made promises
and that this evaluation leads to a feeling of psychological
contract fulfillment or breach (Turnley & Feldman, 1998). In
turn, a feeling of contract breach has a negative impact on
employees' willingness to contribute to the organization and
on their intentions to stay with the organization (e.g. CoyleShapiro, 2002; Robinson, 1996; Robinson, Kraatz &
Rousseau; Turnley & Feldman, 1998; 2000). Other studies
have found a positive correlation with actual turnover (e.g.
Guzzo, Noonan & Elron, 1994; Robinson, 1996). Together
these results suggest that the psychological contract is a
construct of both scientific and practical importance and that it
is especially relevant for HR managers concerned with the
retention of their employees.
Existing research indicates that employees are rather
pessimistic about the extent to which their organization lives
up to its promises. For example, Turnley & Feldman (1998)
found that approximately twenty-five percent of their sample
of employees felt that they had received less (or much less)
than they had been promised. This was most strongly the case
The Role of Psychological Contract in Retention Management ?
Dr. Babita Agarwal ?
Prof. Kshama Ganjiwale
38
for promises relating to job security, amount of input into
important decisions, opportunities for advancement, health
care benefits, and responsibility and power. Robinson et al.
(1994) found that fifty-five percent of their sample reported
contract violations by their employer two years after
organizational entry. Together, this empirical work
demonstrates that psychological contract violation is
relatively common and that this could explain the difficulties
organizations are currently experiencing in retaining their
employees. Since the psychological contract encompasses
employees' subjective interpretations and evaluations of their
employment deal, the retention factors discussed in the
practitioner and scientific literature will only turn out to be
effective for employee retention if they are in line with
employees' subjective views and expectations.
Objectives of the Study:
?
To suggest ways to retain talents for development of the
organization
?
To provide tools to create a positive social atmosphere by
stimulating interaction and mutual cooperation among
the employees
?
To measure the factors of retaining the employees
?
To devise the ways and means to enhance the employee
skills and competencies
opinion for the questions given in the questionnaire. This
evaluation was related to employees' loyalty, their intentions
to leave the company and their job search behaviors.
The 25 variables of the questionnaire, refer to five retention
factors discussed in the theoretical part of this paper: financial
rewards (e.g. "an attractive pay and benefits package"), career
development (e.g. "opportunities for promotion"), job content
(e.g. "a job with responsibilities"), social atmosphere (e.g.
"good mutual cooperation") and work-life balance (e.g.
"respect for your personal situation"). Each dimension was
assessed by five items.
Analysis, Results and Discussion:
After reliability checks and the construction of scales, mean
scores and intercorrelations for all variables in the study were
calculated. Hierarchical regression analysis was done to
examine the relationship between psychological contract
evaluations and intention to leave, job search behaviors and
loyalty.
Reasons for voluntary turnover versus retention. As can be
seen from Table 1, the two most frequently cited reasons for
voluntary turnover are remuneration (62%), and a lack of
career opportunities (46%). Concerning the most important
reasons to stay with the company, work atmosphere and a good
relationship with colleagues (50%), job content (42%),
remuneration (42%), and career opportunities (42%) were
cited most frequently.
Research Methodology:
Design and Sample of the Present Study:
The sample of the present study consists of 80 employees
from Private Organizations. Simple random technique was
used for data collection. The research was carried out through
survey method with the help of self-developed structured,
non-disguised questionnaire. It consists of statements based
on 5 point Likert scale. Employees were asked to give their
It has been also mentioned in the same table the reasons for
leaving versus staying do not fully overlap one another. For
instance, while social atmosphere is mentioned as the most
important reason why employees stay, it is not considered as a
major reason for leaving the organization. Inversely, while
work-life balance appears in the left column (reason for
leaving), it does not occur among the ten most frequently cited
reasons for staying.
Table 1: Ranking of Most Frequently Cited Reasons for Leaving, Reasons for Staying, and Retention Practices by
HR managers (n = 80) (First Research Phase)*.
Reasons for leaving
Reasons for staying
Retention practices
1. Remuneration (62%)
1. Work atmosphere / colleagues (50%)
1. Training (59%)
2. Career opportunities (46%)
2. Job content (42%)
2. Career management (48%)
3. Work pressure / stress (19%)
3. Remuneration (42%)
3. High potential management (41%)
4. Job content (19%)
4. Career opportunities (42%)
4. Internal mobility (38%)
5. Mobility (19%)
5. Job security (22%)
5 . Remuneration (27%)
6. Headhunting (17%)
6. Training (17%)
6. Benchmarking promotions (24%)
7. The management (16%)
7. Company image (16%)
7. Bonus system (18%)
8. Work-life balance (14%)
8. Company culture (14%)
8. Performance management (18%)
9. Labor shortage (11%)
9. The management (8%)
9. Benefits (14%)
10. Opportunities elsewhere (9%) 10. International opportunities (9%)
10. Communication (11%)
39
Sinhgad Business Review ?
ISSN : 0974-0597 ?
Vol. - III, Issue - I, July 2010 - December 2010
* These are the ten most frequently cited reasons or practices
based on the number of responses. Between brackets the
proportion of respondents citing this item in their "top 3" is
given.
included in the study. Given the large sample size, correlations
of .03 or more are already statistically significant at the 5%
level. Therefore, we consider only those correlations
exceeding .10 as being of practical significance.
Table 2 contains the inter correlations between all variables
Table 2: Correlations and Reliabilities for Scales Included in the Study (Second Research Phase)
1
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
Importance career development
Importance job content
Importance social atmosphere
Importance financial rewards
Importance work-life balance
Fulfillment career development
Fulfillment job content
Fulfillment social atmosphere
Fulfillment financial reward
Fulfillment work life balance
Intentions to leave
Job search behavior
Loyalty
2
3
4
5
6
7
8
9
10
11
12
13
(.79)
0.54 (.71)
0.19 0.30 (.87)
0.38 0.31 0.18 (.80)
0.13 0.23 0.34 0.40 (.76)
0.03 0.06 -0.04 -0.02 -0.02 (.89)
0.00 0.14 -0.03 -0.01 -0.02 0.71 (.85)
0.00 0.00 0.13 -0.02 0.00 0.44 0.47 (.91)
-0.01 0.00 -0.01 0.04 0.01 0.62 0.52 0.37 (.87)
0.00 0.00 0.01 -0.03 0.12 0.45 0.45 0.44 0.50 (.83)
0.08 -0.01 0.03 0.00 -0.01 -0.34 -0.30 -0.22 -0.19 -0.19 (.91)
0.14 0.22 0.01 0.03 0.00 -0.24 -0.21-0.15 -0.14 -0.12 0.49(.84)
0.08 0.13 0.03 -0.00 -0.08 0.39 0.38 0.32 0.29 0.25 -0.39 -0.28(.81)
Alpha reliabilities are represented between brackets
Correlations > .03, p < .05, correlations > .04, p < .01, correlations > 05, p < .001
Table 3 presents respondents' mean scores on each of the five
dimensions of the psychological contract. As can be seen from
the table, the employees in our sample attach most importance
to employer inducements relating to the social atmosphere
and work life balance (mean score 3.9, standard deviation
5.2), followed by career development (mean score 2.9,
standard deviation 7.2), and job content (mean score 2.7 ,
standard deviation 3.8). They attach relatively less
importance to financial rewards (mean score 2.2, standard
deviation 4.2). With respect to the fulfillment of employer
promises relating to each of these inducements, employees
are most positive about the fulfillment of promises to their job
content and the social atmosphere and about financial rewards
are perceived to be least fulfilled.
inducements with their evaluation of promise fulfillment, the
results are positive for those two inducements that are most
important for employees, i.e. social atmosphere and work life
balance (3.07) and career development(2.04). These two types
of inducements are considered as the most important by the
employees and they also obtain the highest scores in terms of
their fulfillment. Even though promises about job content are
not considered to be very important, they obtain the most
negative evaluation (2.01) but the largest gap exists for
financial rewards (1.09), as this is a very important
inducement to the respondents, they make up a negative
evaluation of the fulfillment of the promises their employer
has made to them .
Managerial Implications :
Table-3 Mean scores for importance and evaluation of
employer inducements
Variables
Mean score S. D Fulfillment
Social atmosphere &
work life balance
3.9
5.2
3.07
Career development
2.9
7.2
2.04
Job content
2.7
3.8
2.01
Financial rewards
2.2
4.2
1.09
Comparing the importance employees attach five types of
Why an employee stays with the organization is a strategic
issue for HR managers as well as a major concern for the
individual. Having insight into those factors most important in
determining employee retention is important for HR managers
in order to work out retention policies and practices that are
effective both at the individual and the organizational level.
Taken together, the results of our employee survey indicate
that career development is the most important retention factor
since offering good opportunities for career development not
only prevents employees from leaving the company, but it also
contributes in a positive way to their loyalty to the firm. If we
assume that the aim of retention policies is not only to retain
employees but also to retain employees who are loyal and
committed, then HR managers must also put more efforts in
40
The Role of Psychological Contract in Retention Management ?
Dr. Babita Agarwal ?
Prof. Kshama Ganjiwale
retention policies relating to the social atmosphere and job
content. Both factors are important predictors of employee
loyalty and they also significantly prevent employees from
leaving their organization. On the other hand, the results
relating to work-life balance and financial rewards, two
factors that can be considered more as extrinsic rather than
intrinsic rewards, suggest that retention policies focusing
only on these factors might be less effective. Employees'
evaluations of organizational inducements about work-life
balance consistently have no significant impact on their
loyalty, intentions to stay or job search behaviors and thus
should not be considered as important retention factors.
The main message we derive from this study is that HR
managers should take into account what their employees
value and how they evaluate their organization's efforts
towards retention management, if they are to contribute in a
cost-efficient way to the strategic objectives of the
organization. The psychological contract hereby provides a
practical and useful framework to manage employees'
expectations and to engage in an open process of
communication and negotiation about the employment deal
(Herriot & Pemberton, 1996). If HR managers are to be
effective in their retention management this means that they
should take into account this subjectivity instead of departing
from generally agreed-upon views on what's important to
employees in general. This, in turn, should contribute to their
role in the company as a strategic partner given that the
attraction and retention of talented employees will stay an
important factor of competitive advantage for organizations,
both in terms of economic downturn and upheaval.
Conclusions:
Earlier studies have depicted that both practitioners and
researchers in the field of retention management agree that
creating a retention policy that works is not an easy task. One
of the first and necessary steps in working out a retention
policy for HR is to assess the retention factors which are
important to their workforce (Steel et al., 2002). The
collection of targeted data on reasons for quitting and staying,
segmented by employee groups (e.g. male versus female, blue
collar versus white collar) is an important means for obtaining
this information. For example, while social atmosphere is
mentioned as a major reason for staying, it is not considered to
be an important reason for voluntary turnover. Inversely,
inducements relating to work-life balance are cited as a reason
for voluntary turnover but not as a reason for staying.
In general, it appears that retention practices are more focused
on the factors which are believed to cause employee turnover
rather than on those believed to affect employee retention.
Although compensation matters, employees are more
concerned with the level of fulfillment they get from their
jobs. They also feel that working with an understanding
supervisor or manager in a cooperative and trusting work
environment is important. Organizations should focus on
making sure that the people they hire are a good match for the
job and the work culture.
The evaluation of promises about career opportunities appears
to be most predictive of employees' intentions to leave and of
their job search behaviors and they are also strongly predictive
of employee loyalty. This finding is in line with HR managers'
views that career development is an important factor affecting
both voluntary employee turnover and retention and it
supports their efforts to work out retention policies focusing
on career development.
An employee's relationship with his or her supervisor or
manager and work-life balance are the most important
determinants for staying with an organization. Senior leaders
should be encouraged to have succession plan which is
another tool to motivate employees to keep developing.
Management teams need to be educated in succession
planning concepts and can be motivated by having a
succession planning included as a performance criterion.
Failure to develop successors may prevent them achieving
higher career objectives themselves.
Employers need to anticipate what will be the expectations of
the employees in the future to ensure that they create a realistic
job description. Organizations must also focus on employee
engagement to ensure that their workforce is committed to the
long-term success of their organization and want to stay with
the organization to honor this commitment.
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ISSN : 0974-0597
Sinhgad Business Review
Vol. - III, Issue - I, July 2010 - Dec 2010
Retail Environment: Strategic linkage of Store Choice Influencers, Customer
Experience Touch Points and Customer Total Retail Experience at National Level
organized Retail Chain Stores
Pravin Patil
Abstract:
This paper deals with customers total retail experience.
Organized retailing is a sun rise industry in India. Retailers
need to plan carefully positioning strategy to create favorable
store image in the target market. Store image attracts
customers and increases traffic flow to store. This paper
primarily focuses on impact of factors such as store choice
influencers, retail marketing mix factors, customers' touchpoint experiences, and customer total retail experience and
customer relationship management. Research paper covers
store choice influencing factors linkage with visit to a
particular store. Retailer's objective is to increase time spent
by customers inside the store. Impact of atmospherics and
visual merchandise on customers shopping experience and in
turn their preference to a particular retailer is assessed.
Various factors such as store design, layout, store exterior and
interior, atmospherics i.e. light, temperature, colors, music,
and fragrance all effect together plays significant role in
developing store ambience. Store ambience enhances
customer's mood. Thus, store ambience influences shopping
pattern. Retailers have started successfully promoting various
themes and festive specials to get pull effect. Shoptainment
i.e. "Providing entertainment while shopping' concept needs
to be brought in by retailers, in order to increase sales volume
and to sustain relationship with customers. This paper also
focuses on understanding the difference in customer total
retail experience and customer relationship management
practices implemented across national level organized food
and grocery retail chain stores of Pune city.
Key words: Store image, Store Choice Influencers, Customer
Experience Touch Points, Customer Total Retail Experience
and Customer Relationship Management
Introduction:
Organized retail is a sun rise sector in India. This paper studies
differences in customer total retail experience and customer
relationship management across national level organized
food and grocery retail chain stores of Pune city. Store choice
influencers, retail marketing mix factors, customer
experience touch points have strategic linkage with customer's
total retail experience. Review of literature shows that store
image and traffic flow is linked. Customers shopping pattern is
influenced due to store exterior, interior, store layout design,
atmospherics and visual merchandise. It enables retailers to
achieve high sales volume objective. In modern retail,
concepts like visual audit and visual communication strategy
plays a significant role in positioning retail store in customers
mind. Understanding culture, local tastes and capturing price
sensitiveness of the target market proves beneficial to
retailers. Environment created by visual merchandise,
atmospherics and customer touch points service achieve its
critical function i.e. to make shopping a fun and excitement
activity. Store ambience creates participatory environment.
Thus involves customer in shopping process.
Review of Literature:
Mehrabian and Russel (1974) affect model suggests the
linkage between atmospherics and its impact on the retail
patronage decision, specially the effects of two retail
atmosphere factors namely ambient cues ( lighting and music)
and social cues ( number/friendliness of employees) on
respondents pleasure, arousal and willingness to buy.
Music is capable of evoking affective and behavioral response
in consumers (Bruner1990). Background music tends to be
soothing, which creates a pleasurable atmosphere (Milliman
1982, 1983). The relationship between designed
environments and their desired effect upon users is extremely
complex to understand. Kotler (1973) coined the term
atmospheres to describe ´the conscious planning of
atmospheres to contribute to the buyers' purchasing
propensity. Donaram and Rossiter (1982) subsequently tested
in retail settings the 'Mehrabian-Russel model', which had
been developed within the discipline of environmental
psychology. They found two emotional states, namely
pleasure and arousal, to be significant mediators between
environmental stimuli and consumer responses. Research
shows three reasons regarding why it is especially difficult to
measure effects of store atmosphere.
-
Faculty-IBS Pune,
Email- [email protected]
-
Such effects are basically emotional states and thus
difficult to verbalize
They are transient and therefore difficult to recall
They influence behavior within the store, rather than
external behavior, such as store choice
Sinhgad Business Review ?
ISSN : 0974-0597 ?
Vol. - III, Issue - I, July 2010 - December 2010
43
acknowledged the need to entertain consumers. We are all still
kids needing a sandbox to play in, but as we get bigger our
sandboxes need to get bigger as well, and Wal-Mart makes the
biggest 'sandbox' round" (Soderquist 2000). Atmospheric
elements which can be used to entertain consumers include
music, in-store televisions, interactive displays and kiosks,
live performances by a variety of artists, product use
demonstrations and seminars and in-store restaurants. Most of
these attempts at entertaining customers recognize that
keeping shoppers in stores longer is likely to result in
increased browsing behavior, which in turn is likely to cause
increased impulse purchasing (Beatty and Ferrell 1998). Also,
keeping customers in one's store longer may also decrease the
time available to shop in a competitor's store making this good
defensive weapon for retailers.
Source: L.W. Turley and Jean- Charles Chebat, 2002
The atmosphere, through the use of atmospheric variables
such as colors, layout, music, floorings, and lighting and
merchandise arrangements creates a package surrounding the
merchandise which can create a unique shopping experience.
The merchandise carried by competitive retailers, is
perceived as similar by consumers. Then probably it becomes
even more important and creating a unique environment even
more necessary. Therefore, finding a unique and effective
atmosphere design should be a primary concern for retailers in
this type of competitive situation. According to Turley and
Milliman (2000), this complex environment can be divided
into five categories of atmospheric cues. The exterior includes
cues such as the building size and shape, the marquee, exterior
windows, parking availability and the surrounding area. The
general interior includes atmospheric variables like lighting,
music, interior colors, ambiance, temperature and general
cleanliness of the store. Layout and design variables are
comprised of variables such as merchandise groupings, traffic
flow and aisle placements, department locations, racks and
fixtures, and placements of cash registers. Point-of-purchase
and decoration variables are composed of atmospheric
elements like point-of-purchase displays, signs and cards,
product displays and interactive displays and kiosks. Human
variables in the environment include dimensions such as
employee characteristics, employee uniforms and retail
crowding and density. The elements associated with these five
categories of the retail environment should not be developed
separately but rather to accomplish the goals associated with a
chosen retail strategy.
Although not often discussed in the academic literature
associated with retail atmospherics, modern consumers often
expect shopping to be more than simply the purchase of
products. For many consumers, particularly those who are
state directed (Babin and Darden 1995), shopping is an
experience which should be a "fun" activity. These consumers
seek excitement and arousal from the environment of a retail
store and spend more money in these types of environments
(Babin and Darden 1995). At least some retail chains are
responding to this desire to be entertained while shopping. In
a recent newsletter senior vice chairman of Wal-Mart,
The accumulated studies of the retail environment pertaining
to atmospherics can best be described as being both eclectic
and diverse. The most impressive from Turley and Milliman
article was that each of the 60 studies they reviewed found
some significant relationship between atmospheric
manipulation and shopping behavior indicating that
consumers do, in fact respond to stimuli found in these
environments. The basic method of displaying goods is to use
shelving, whether on walls or gondolas. Product shelving has
an important influence on consumer behavior. Height at which
the products are displayed and number of rows in the store can
influence the sales of products. A product needs to be given
enough shelf space to attract buyer's attention. It is said that
more than 50% of purchases by supermarket shoppers are preplanned and the remainder largely stimulated by the display in
the store. Product should be accessible to the customer: there is
frequently quoted saying that "the merchandise handled is
merchandising half sold". Review of literature shows that
music element such as tempo, volume, type of music impacts
consumer preferences and consumer spending patterns.
Research provides evidence that the background music not
only induces positive feeling in shoppers, but also plays an
important role as an intrinsic element of the store atmospherics
and retail branding.
Retail Environment key factors:
I) Store Choice Influencers (SCI):
Retailers need to understand factors, those influences
customers for visiting particular retail store. SCI factors such
as media, informativeness of advertising, location and
distance from home, recommendations from friends, relatives
influence customers to visit particular store. Retailer's
strategies on SCI factors would impact customers and may
help retailers to optimize on their resources. SCI factors such
as retailer's name and image in the market are also crucial.
Positive image and goodwill of retailer would likely to impact
more footfalls in store. Retailers can have distinct competitive
advantage due to its positive market image and goodwill.
Retailers focus on these areas would prove beneficial to
improve their business in this competitive market.
44
Retail Environment ?
Pravin Patil
II) Retail Marketing Mix Factors (RMMF):
customers' total retail experience, higher will be store loyalty.
With the advancement of organized retail and technology,
researchers and practitioners suggests new areas of inclusion
in marketing mix, coined as RMMF. RMMF encompasses
critical areas such as merchandise assortment, store
atmospheric, pricing. Atmospheric variables include areas
such as color, layout, music, floorings, and lighting areas.
Exterior and interior design alongwith visual merchandise,
RMMF creates store ambience. Store ambience affects
customer shopping process.
Research Objectives, Key Pointers, Hypothesis and Study
under Objective and Hypothesis
Objective 1: To understand the linkage of store choice
influencing factors on visit to the particular retail store.
Hypothesis H1: There is association between store choice
influencing factors and visit to particular organized retail store
Key Pointers:
III) Customer Experience Touch Points (CETP):
CETP are critial in entire customer retail experience and
relationship process. Typically retail store has touch points
like courteous and knowledgeable staff, customer care desk,
billing counters, entry/exit points, home delivery, web site
and parking facility. Retailer need to ensure higher service
quality standards at these touch points. Customers expect
speedy and accurate billing process, knowledgeable and
courteous employees providing information and help to
customers. Warm greetings at store entry, trolley handling
service till parking lot especially for senior citizens will
enhance store image. Presently retailers provide normal
service quality at Customer Touch Points. However, retailers
need to improve service quality at these touch points.
a) Media choice and Impact
b) Convenience Factor
c) Retailers Image and Spread of goodwill
Study areas under key pointers:
1.
a.
b.
c.
The type of media, selection and adoption
Media such as Internet, Newspaper, TV
Frequency of media
Usefulness of media in conveying message to target
audience
2. Significance of time to reach and distance aspect
a. Whether store is convenient
b. Distance of store from home
3. Reputation in market and referral/recommendation angle
a. Retailers name and image
b. Reference by another customer/friend/neighbor/relative
Objective 2: To assess and understand the difference in
customer total retail experience across national level
organized food and grocery (F & G) retail chain stores.
Hypothesis H2: There is significant difference in total
customer retail experience across various national level
organized food and grocery retail chain stores
Key Pointers:
a. Store Management
b. Service Quality
Study areas under key pointers
IV) Customer Total Retail Experience (CTRE):
1. The store ambience and facilities
a. Visual appeal of store exterior, interior and layout of store
b. Ease of navigation within store, music and shelf
arrangement
c. Store color/light, drinking water and toilet facility
Retail marketing mix factors (RMMF) and customer touch
points experience (CTPE) conceptually equals to customer
total retail experince. Retailer need to focus on RMMF and
CTPE in order to provide overall better experience to
shoppers. Retailers need to understand that, better the
2.
a.
b.
c.
d.
Fig 2: Customer Experience Touch Points at Retail Store
Merchandising and Pricing aspects
Variety /range and display of merchandise
Quality and availability of loose merchandise
Facility of refrigeration
Merchandise pricing
45
Sinhgad Business Review ?
ISSN : 0974-0597 ?
Vol. - III, Issue - I, July 2010 - December 2010
3.
a.
b.
c.
d.
Ease of Payment and customer orientation
Major credit/debit card and coupon acceptance
Customer care desk, baggage keeping facility
Facility of parking
Welcome at entry, exit, billing counter
4.
a.
b.
c.
d.
Service quality and processes at touch-points
Friendly service and knowledgeable staff
Billing counters - Speed and Accuracy
Handling of complaints
Returning of goods
b. Community/Participatory activities for women
c. Social/Charitable events/programs
Research design:
The Research was conducted in the months of October and
November 2009. Questionnaire is designed keeping the urban
customers profile in mind; those visit organized food and
grocery retail stores. National level organized chain retail
stores like Big Bazar, More, Reliance Fresh and Spencers are
taken as a source of sample.
Key Pointers:
The survey questionnaire is scrutinized by research guide and
expert statisticians. Interaction with few customers was made
to make the questionnaire to date and relevant. The sample
size is of 40 customers. The selection of customers is done on
purposive convenience sampling basis. The statistical
measures such as Chi-Square tests, ANOVA, Fisher test are
used for testing the hypotheses.
Service Level Gap :
Data analysis and hypothesis testing:
Study areas under key pointers
1. Financial Rewards
a) Money saving due to reward point scheme
b) Attractive prices,schemes
Testing of Hypothesis 1: There is association between store
choice influencer and visit to the particular organized retail
store.
Objective 3: To understand the differences in CRM practices
implementation across retail stores.
Hypothesis H3: There is a significant difference between
CRM practices implementation across retail stores.
To check whether there is any association between store
choice influencers and visit to the particular organized retail
store .Researcher applied chi square test. But as sample size is
small (40) and there are more than 94% cells have expected
count less than 5 therefore chi square test becomes invalid. To
overcome this problem researcher further applied Fisher
Exact test and Monte Carlo Simulation methods to yield
trustworthy result. p value for Fisher exact test (0.591) and
Monte Carlo simulation methods (0.685) are greater than 0.05.
Table no 1 & 2 shows statistical test results.
2. Loyalty Programs
a. Loyalty card
b. Reward points
3.
a.
b.
c.
d.
Relationship development programs
Newsletter, Special letters
Anniversary/Birthday greeting card
Special promotion scheme- Email/SMS
Customer feedback form response
4.
a.
b.
c.
d.
Value Added Service (VAS)
Phone/Web shopping facility
Gift wrapping facility
Free home delivery
Call center/Toll free helpline
We accept the null hypothesis "there is no association between
store choice influencer and visit to the particular organized
retail store "at 5% level of significance. Therefore the
hypothesis" "there is association between store choice
influencer and visit to the particular organized retail store" is
rejected. Researcher concludes that test shows no evidence
that there is association between store choice influence and
visit to the particular organized retail format.
5. Social/Community development programs
a. Community/Participatory activities for kids
Table 1: Chi- Square Tests - Store Choice Influencers
Value
df
Asymp. Sig (2- sided)
Pearson Chi-Square
35.191
39
.644
.689
Likelihood Ratio
33.338
39
.725
.684
Fisher's Exact Test
40.750
N of Valid cases
40
.591
Exact Sig. (2 sided)
46
Retail Environment ?
Pravin Patil
Table 2: Chi- Square Tests - Store Choice Influencers
Value
df
Asymp. Sig (2- sided)
Monte Carlo Sig. (2-sided)
99% Confidence level
Sig
Lower Bound
Upper Bound
Pearson Chi-Square
35.191a
39
.644
.685b
.673
.697
Likelihood Ratio
33.338
39
.725
.678b
.666
.690
Fisher's Exact Test
40.750
.585b
.573
.598
N of Valid cases
40
Testing of Hypothesis 2: There is significance difference in
total customer retail experience in various national level
organized food and grocery retail chain.
To check the mean score of total customer retail experience in
between various retail stores (food bazaar, more, reliance
fresh, spencers), researcher applied one way analysis of
variance. There is no significant difference at 5% level of
significance in total customer retail experience (As p value is
greater than 0.05). Table 3 shows mean scores and standard
deviations of retail marketing mix factors (RMMF) and
customer touch point expereince (CTPE). Table 4 shows the
results of one way ANOVA test.
Statistics infer that Total retail experience is same in all retail
stores. On the other hand it has been observed that there is
significant difference in customer touch point experience as p
value is less than 0.05. Researcher wants to conclude that
customer touch point experience is differenent in various retail
stores. Further it is observed that in a hierchary Food Bazar is
at first position followed by Spencer, More and Reliance
Fresh.
Table 3 : Mean Scores and Std.Deviations of Retail Marketing Mix Factors and Customer Touch Points Experience
N
Mean
Std. Deviation
Food Bazar
18
78.89
7.435
More
6
77.00
2.966
Reliance Fresh
7
81.00
4.041
Spencers
9
79.44
4.035
Mix Factors (RMMF)
Total
40
79.10
5.697
Customer
Food Bazar
18
32.22
3.639
More
6
27.67
3.615
Reliance Fresh
7
25.71
5.707
Spencers
9
30.33
5.657
Total
40
29.98
5.046
Customer Total Retail Experience Food Bazar
18
127.44
7.801
(CTRE) = Retail Marketing Mix
More
6
120.67
5.125
factors + Customer Touch
Reliance Fresh
7
123.00
7.439
Points Expereince
Spencers
9
125.89
8.085
Total Score
Total
40
125.30
7.633
Retail
Marketing
Touch
Point
47
Sinhgad Business Review ?
ISSN : 0974-0597 ?
Vol. - III, Issue - I, July 2010 - December 2010
Table 4 : Results of One way ANOVA Analysis - Retail Marketing Mix Factors and Customer Touch Points
Experience
Sum of Squares df
Mean Square
Retail
Between Groups
53.6000
3
17.867
Marketing
Within Groups
1212.000
36
33.667
Score
Total
1265.600
39
Customer
Between Groups
251.102
3
83.701
Points Experience (CTPE)
Within Groups
741.873
36
20.608
Score
Total
992.975
39
Customer Total Retail
Between Groups
251.733
3
83.911
Within Groups
2020.667
36
56.130
Total
2272.400
39
F
Sig.
.531
.664
4.062
.014
1.495
.232
Mix Factors (RMMF)
Touch
Experience (CTRE) =
Retail Marketing Mix
factors + Customer
Touch Points
Experience
Testing of hypothesis 3 : Similar CRM practices get
implemented at various national levels organized food and
grocery retail chain.
To check the mean score of CRM practices in between various
retail stores (Food Bazaar, More, Reliance Fresh, Spencers),
researcher has applied one way analysis of variance. There is
no significant difference in CRM practices at 5% level of
significance. Table 5 shows mean scores and standard
deviations. Table 6 shows the results of one way ANOVA test.
Since p value is 0.182 (greater than 0.05) there is no
significant difference in CRM practices at various organized
retail stores. Researcher concludes that similar CRM
practices get implemented at various organized retail stores.
Table 5: Mean Scores and Std.Deviations - Customer
Relationship Management Practices
Retailers
N
Mean
Std. Deviation
Food Bazar
18
35.94
3.386
More
6
35.67
1.966
Reliance Fresh
7
36.57
3.047
Spencers
9
38.56
2.789
Total
40
36.60
3.120
Table 6: Results of One way ANOVA Analysis - Customer
Relationship Management Practices
Sum of Df Mean Square F
Squares
.
Between Groups 47.386
3
Within Groups
332.214 36
Total
379.600 39
15.795
Sig
1.712 .182
9.228
Conclusion and Implications for Retailers:
The study shows that there is no linkage between store choice
influencers (SCI) and visit to particular retail store. Review of
literature clearly shows that location and distance influence
and impacts visit to a particular retail store. However,
researcher view that sample size of 40 customers is inadequate
to draw conclusion on SCI and visit to a particular store. The
data analysis reveals that there is no difference in retail
marketing mix factors (RMMF) across retailers. Retailers
need to improve RMMF in order to differentiate themselves
from the competitors. Customer experience touch points
(CETP) reflects service quality. The better the service quality,
higher the customer total retail experience. Another objective
of this study was to understand the difference in CRM
implementation across retail stores. This study shows that
similar CRM practices are implemented across retail stores. In
this competitive era, better relationship with customers makes
48
sense.
In near future, giant retailers like Wal-Mart, Carrefore and
Tesco would enter Indian market. Their entry would pose a
threat to Indian retailers. Well planned and executed CRM
practices would help Indian retailers to retain their existing
customer base. The research shows that the retail marketing
mix factors influence customer's mind and their shopping
pattern. Easy access to each merchandise item proves
frequently said quote that "the merchandise handled is
merchandising half sold" is absolutely true. Retailers must
bring Indianess in retail by implementation of think global,
act local strategy successfully. Thrust on visual
communication coupled with right grouping of merchandise
would work well. Study shows customer experience at touch
point makes it crucial for deciding customer's preference
towards particular store. Customers total retail experience
will impact intangible factors like store image and retailers
brand name. Due to growing competition in organized retail,
especially in food and grocery segment, retailers should be
more focused in improving quality of service especially at
Customer Touch points. In general retailer needs to adapt and
implement strategies especially shoptainment i.e. providing
entertainment for shoppers with greater vigour. Benefits of
such strategies include more footfalls and growing loyal
customer base. With growing competition, retailers need to
differentiate themselves. Therefore, retailers need to improve
customer's service quality expereince and implement better
CRM practices in order to attract new set of customers and
retain existing customer base.
References:
Brune, 1990 - Cited in Julie Baker, Michael Levy, Dhruv
Grewal, 2000, ´An experimental approach to making
retail store environmental decisions, Journal of Retailing,
Vol.68, No.4, winter 1992, pp.445-460
Babin and Darden 1995 - cited in L.W.Turley, Jean-Charles
chebat, ´Linking Retail Strategy, atmospheric design and
shopping behavior, ?Journal of Marketing Management,
2002, 18, pp.125-144
Beatty and Ferrell 1998 - cited in L.W.Turley, Jean-Charles
chebat, ´Linking Retail Strategy, atmospheric design and
shopping behavior, ?Journal of Marketing Management,
2002, 18, pp.125-144
Donaram and Rossiter, 1982 - cited in Julie Baker, Michael
Levy, Dhruv Grewal, 2000, ´An experimental approach to
making retail store environmental decisions, Journal of
Retailing, Vol.68, No.4, winter 1992, pp.445-460
Irena vida, claude obadia, michelle kunz, ´The effects of
background music on consumer responses in a high end
supermarket, ?Int.Rev.of Retail, Distribution and
Consumer Research, Vol.17, No.5, pp 469-482, Dec.2007
Julie Baker, Michael Levy, Dhruv Grewal, 2000, ´An
Retail Environment ?
Pravin Patil
experimental approach to making retail store
environmental decisions, Journal of Retailing, Vol.68,
No.4, winter 1992, pp.445-460
K.Douglas Hoffman, L.W.Turley, 2002, ´Atmospherics,
service encounters and consumer decision making:
integrative perspectives, Journal of Marketing, summer
2002, pp.33-47
Kotler, 1973 -cited in L.W.Turley, Jean-Charles chebat,
´Linking Retail Strategy, atmospheric design and shopping
behavior, ?Journal of Marketing Management, 2002, 18,
pp.125-144
L.W.Turley, Jean-Charles chebat, ´Linking Retail Strategy,
atmospheric design and shopping behavior, ?Journal of
Marketing Management, 2002, 18, pp.125- 144
Mehrabian and Russel, 1974 - cited in Donaram and Rossiter,
1982 (Julie Baker, Michael Levy, Dhruv Grewal, 2000,
´An experimental approach to making retail store
environmental decisions, Journal of Retailing, Vol.68,
No.4, winter 1992, pp.445-460
Milliman 1982, 1983 - cited in Donaram and Rossiter, 1982
(Julie Baker, Michael Levy, Dhruv Grewal, 2000, ´An
experimental approach to making retail Store
environmental decisions, Journal of Retailing, Vol.68,
No.4, winter 1992,pp.445-460
Sorderquist 2000 -cited in L.W.Turley, Jean-Charles chebat,
´Linking Retail Strategy, atmospheric design and shopping
behavior, Journal of Marketing Management, 2002, 18,
pp.125-144
Turley and Milliman, 2000 -cited in K.Douglas Hoffman,
L.W.Turley, 2002, ´Atmospherics, service encounters and
consumer decision making: an integrative perspective,
Journal of Marketing, summer 2002, pp.33-47
Turley and Milliman, 2000 -cited inL.W.Turley, Jean-Charles
chebat, ´Linking Retail Strategy, atmospheric design and
shopping behavior, ?Journal of Marketing Management,
2002, 18, pp.125-144
ISSN : 0974-0597
Sinhgad Business Review
Vol. - III, Issue - I, July 2010 - Dec 2010
Case Study- On Value Methodology for Engineering Business
Dr. Shyamkant V. Shrigiriwar
Abstract:
A driver of Globalization has sharpened competition,
Powerful factors are driving globalization: falling trade
barriers; fast-paced technological advances; declining
communications and transport costs; international migration;
and highly mobile investment. The main challenge firms
facing are how to take advantage of new resources and
markets while dealing with intense and growing global
competition. This paper addresses how Value Methodology
(VM) can help in achieving an edge over competitors.
In today's market, Value Methodology (VM) is important
improvement tool to improve quality and reduce cost.
Application of VM resulted in typically by 15 to 25 percent
reduction of manufacturing cost, investment cost, customer
warranty cost, and procurement costs. Value Methodology is
practiced by some Industries to its Customer and for Business
promotion. However, Value Methodology is not immune to
Globalization and increasing competitive pressures,
technology up gradation or obsolescence.
Introduction:
To keep pace with intensifying global competition, business
organizations are always looking for new management
techniques and best practices to enhance their product
/service quality and profitability. But some times an old
technique proves to be the best; one of such technique is Value
Methodology. Value Methodology has emerged as highly
effective and practical management techniques of the world.
It can be defined that Value Methodology technique is a
combination of Value Analysis and Value Engineering. Value
Analysis is used for the existing products or services and
value engineering applied for new product or service
development. Most successful organization of the world uses
VM technique for continuous improvement of its product and
service quality, market share, innovation and profitability.
Value methodology facilitates in enhancing customer value
by reducing cost, making use of various improvement tools
like lean technology which in turn facilitates in enhancing
customer value by reducing cost and improving delivery
Sinhgad Institute of Management, Pune
E-mail: [email protected]
speed by eliminating non-value added activities (waste).
This paper describes how the VM technique is used for
gaining customer satisfaction by suggesting improvements in
products or services.
Conceptual Framework:
During the design stage of product / service, a significant
amount of information is gathered and analyzed in order to
support the decision making process that leads to successful
products. Various techniques have been used to collect,
organize, analyze, synthesize, and display the information
used in the design process. In this study following techniques
were used to achieve the result.
Quality Function Deployment (QFD) is a "method to
transform user demands into design quality, to deploy the
functions forming quality”
Value Analysis / Value Engineering (VE) - is a systematic
method to improve the "value" of goods or products and
services. Value is defined as the ratio of function to cost.
8D Analysis, 5W 2H analysis, Failure Mode Effect Analysis
(FMEA) and Design for Manufacture and Assembly (DFMA)
are some of the aspects of these techniques. Each one of them
represents a formal methodology aimed at accomplishing
particular objectives. For Successful application of these tools
needs an administrative system to ensure proper deployment.
To introduce these tools as a part of a business philosophy that
requires extensive training, multidisciplinary team
collaboration, expert guidance and long work sessions.. The
lack of any of these elements, or an attitude, can significantly
affect the effectiveness of these tools. Experience shows that
each tool presents particular strengths and weaknesses.
In the following case study we consider the problems of
customer about sunroof provided to cars. Problems and
reasons are as shown in below the table
50
Customer's Problems
Case Study- On Value Methodology for Engineering Business ?
Dr. Shyamkant V. Shrigiriwar
Description
Reasons
Project originated in sales
department based on
customer feedback
Drain Holes and Tubes
Factory fitted sunroof the 'seal' is not to meant
to be a perfect seal and the gutter should carry
away the water to the four sunroof drains at the
front and rear corners of the sunroof pan. If
these do not drain, chances are the drain is
blocked or the hose is kinked.
Case -1
1) I have just taken my Car back to the dealers
due to a leaking sunroof. There is obviously
a design problem.
2) The owner said that the sunroof only leaked
when washed with a high pressure spray
3) In trying to trace a significant water leak
from my sunroof, I saw that the water
appeared to be getting into the greased
'tracks' that guide the sunroof backwards
and forwards and then into the 'guttering'
that runs around the outside of the
mechanism, hence to the bottom of the
plastic corner pieces of the gutter. It seemed
a little odd as it was leaking from both sides
Worn Sunroof Seal Guard
Over the period the sealing ring around the
sunroof's edge becomes worn and frayed,
allowing water to leak in regardless of how the
roof is seated. The seal can also slip off the
edge of the sunroof panel, allowing a path for
water to flood i
Case - 2
Owner finds that aluminium section broken
(Estuation section)
Project originated in
Engineering Dept
Leakage trough estuation section due to
vibration and through the cracks
Project originated in
Engineering Dept.
Defective sliding systemDue to Sliding wear and tear were higher
Project originated in
Engineering Dept.
Due to rubbing action, rattling effect
generated. Noise is on Higher side.
Case - 3
Sliding mechanism get jam (not operate
properly
Case - 4
That sounds pretty bad and quite worrying,
hope you get it sorted
To solve the problems sequence of techniques is used in which
QFD, VE and DFMA were applied to the different cases in
this work. This sequence was established based on an analysis
of the characteristics of each tool and experience in their
application. The researcher tried to identify the gaps and
overlaps through information at design stage. A brief
description of each of these tools is as follows.
Design for Manufacture and Assembly (DFMA) methodology
is a technique that focuses on product redesign for minimizing
manufacturing and assembly costs. The technique provides a
ranking system that allows comparison of competing designs
in terms of their ease of assembly and the component's
manufacturing costs.
Methodology used for case studies:
The Quality Function Deployment methodology (QFD) is
designed to drive a product development process from
conception to manufacture. The House of Quality (HOQ) is a
graphic tool that is closely associated with QFD and is used to
display the outcome of the analysis at the design stage:
Value Methodology (VM) is a process in which a product is
analyzed in terms of functions it performs. Costs are also
analyzed function wise. Functions are analyzed in order of
their importance.
Functions are classified as basic (what the product must do)
and support functions. Function importance vs. function cost
graphs can be used to display disparity of value.
The proposed methodology was applied in different degrees to
four cases.
For case no -1, Only QFD and DFMA were applied.
Case no 2, 3 4-, only VE and DFMA were applied.
It is essential to form a team of experts. Accordingly
Multidisciplinary teams made up of 3-5 members were
formed to analyze and recommend modifications. Test cases
were selected from a list of candidate products that were
proposed by the team. All necessary information, including
cost data, engineering information, and market conditions
were made available by the companies that owned the
products. All of these companies are transnational, and their
51
Sinhgad Business Review ?
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Vol. - III, Issue - I, July 2010 - December 2010
names have been omitted for obvious reasons. As part of their
competency development, teams were trained to use the tools
that are particular to each technique: Quality function
deployment (QFD), Function Analysis System Technique
(FAST) diagram and Disparity Charts; and the Design for
Manufacture and Assembly (DFMA.)
Throughout the project the following factors were
monitored:
Picture-02.
?
team member attitudes towards the use of each tool
?
flow of the information generated and sorted through the
process
?
results of the analysis at each step
Projects were conducted over a number of weeks period. Each
team member worked approximately 40 hours per week in the
project. Basic information of product is as follows.
Sunroof Assembly:
Picture-03.
An automotive sunroof is a fixed or operable (venting or
sliding) opening in an automobile roof which allows light
and/or fresh air to enter the passenger compartment. Sunroofs
may be manually operated or motor driven, and are available
in many shapes, sizes and styles. Sunroof systems may be
manual or electric, manual sunroofs may be lever actuated.
A sunroof has become a popular automotive option simply
because it's so good at triggering our emotions.. The question
is which type of sunroof to choose.
There are the simple, economical pop-up designs. They
feature a glass panel that can be tilted open to vent some hot air
or removed for even more airflow.
Most factory sunroofs are designed for the driver and front
passenger. But it is possible to install one of these stylish air
fresheners for back seat passengers in a van or CAR. Since
they feature a glass panel, sunroofs will even provide
additional light for passengers who want to read or play games
while someone else does the driving.
The sunroofs on car top are raised and lowered by two lifting
arms at the rear edge of the roof the lifting arms are operated
by plastic gears (one for each lifting arm mechanism). The
plastic gears have a small set of teeth which operate the lifting
arms. They also have a large set of teeth which are driven by a
flexible cable. The cable is driven by the sunroof motor.
Operation of sunroof shown in below pictures.
Analysis and solutions of the Cases :
Case -1 (Glass Panel Assembly with Rubber Beading)
This case is originated from a sales department. To analyze
this case QFD & DFMA techniques are used.
First we checked drawings of components along with
specifications. It is observed that components were as per
specification.
Secondly, we checked fitment of glass panel assembly with
rubber beading, it is observed that due to joint at corners of
panel fitment is not proper and that developed a gap, through
this gap water leakage observed.
Solution- To overcome this problem thin plastic covers/seal
should be introduced which will cover the gap as well as fill
the gap.
Result- It is essential to clarify and justify the analysis. After
discussion with management, a modification that met the
customer's request was prepared. A few prototypes were built
and tested in the field. The new design was well accepted by
the users. No customers complained about failure of the
product after modifications.
Case 2 - Owner finds that aluminium section broken
(Estuation section).
This case originated from engineering department
Picture-01.
First, Value Methodology (VM) team checked functions of the
components. It is observed that functions are not properly
operated because estuation section used for making a frame
have a collar. At the time of fitment extra part has to be
removed due to uneven level components arenot function
Case Study- On Value Methodology for Engineering Business ?
Dr. Shyamkant V. Shrigiriwar
52
Modified Design
QFD VM
Project Name
Description
Objective
Glass Panel Assembly
with Rubber Beading
Project originated in
sales department
based on customer
feedback
Increased market share
by adding
distinguishing design
characteristic ,product
acceptance
properly,
Results
Design was
implemented.
Cost was slightly
increased. as new
components added
reduction were also possible. Proposal was approved by the
management.
Secondly under the DFMA (design for Manufacturing and
Assembling) Techniques, six inch collar should be considered
for fitment.
Solution - To overcome this problem it is suggested that to
modify the drawing of exstuation section. In the modified
drawing, collar should be illuminated and required size
bracket should be fitted to the section (as required length as
per modified drawing). Due to illumination of unwanted
portion, weight and cost can be reduced as well as time for
cutting work can be saved hence level can be maintained &
Leakage problem can be sorted out.
Result - Before discussion to management, proposed
modifications done by the team was shown to the designers
and quality engineers, for the scrutiny after getting ok remarks
. Then Modified design was presented to the management, for
approval. In the simplified design 150gms component Wt.
reduction was possible .Due to weight reduction, cost
Component weight
reduction.
DFMA
Project originated in
Engineering Dept.
Cases 3 and 4- lifting arms retract to the "released" position for
removal but will not rise to the "locked" position (Components
from Sliding Arm of Opening Mechanism & Components
from Sliding Mechanism)
Case is originated in engineering section primarily with the
purpose of reducing noise, reducing costs.
Under VM and DFMA technique, team first checked
specification and drawing, it is observed that specification and
drawing are correct.
Secondly it is observed that at the time of operation
smoothness was not observed. Due to friction wear and tear is
more, particularly alunimium materials get faster wear
generates a gap between two sliding components, at the time
of sliding noise observed.
Reduce cost
Reduce weight
Design was simplified
150gms component
Wt. reduction.
Machining Operation
time reduced.
Cost was reduced.
Under study for
implementation
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Sinhgad Business Review ?
ISSN : 0974-0597 ?
Vol. - III, Issue - I, July 2010 - December 2010
Solution -To avoid above problem design was simplified the
number of parts was reduced, resulting in reduced assembly
and service costs. However, proposals were halted as
manufacturing costs would be increase due to the need to buy
new tooling. But both products are readily available in the
market and the costs of tooling are virtually zero at this stage
of their life cycle.
focused on improving performance of specific features which
may be relevant to specific populations. Solutions were
designed and implemented without any further filtering and as
a result, to meet the costumer's expectations. VE is an
engineering driven process, as shown in Cases 2, 3 and 4.
During the construction of the FAST diagrams, basic functions
were easily identified by each team.
Design was simplified. Due to simplification and reduction in
numbers of components contradicting characteristics
achieved. Due to reduction in weight as well as reduction in
number of components gives smooth operation. Also due to
less wear and tear noise reduced.
One of the strengths of the VE process is that modifications
that are not constrained by the product's original composition,
which is a more natural course of action in the QFD. The
DFMA methodology is straightforward, and the modifications
that it recommends are very specific. In principle, the
methodology is not constrained by the particular
characteristics of the product, other than the obvious fact that
the product needs.
Result- For to check the performance of modified
components, prototype model were prepared and taken a
trials and it is observed that performance found up to the mark
the proposal was submitted to management after discussion
and replying the queries , proposal were approved
Findings about the Integration Method:
Conclusions
This Value Methodology (the integration of QFD, VE and
DFMA) in a design process shows that:
The study showed that some of the elements that was difficult
to account for in other VE processes, as seen in Cases 2, 3 and
4. After the QFD stage in Case- 1, The analysis could then
focus on a specific component as opposed to the whole
product.
Another outcome of the QFD process was that relevant
information was readily available: requests were ranked in
order of importance and measurable characteristics of
product, In these cases, information was sought and displayed
just in case it might be needed, and there was no particular
procedure or format for organizing or displaying this
information. The study also showed that the results of the
QFD process were not necessarily balanced, because requests
?
QFD is capable of identifying functions that need
improvement in a given product.
?
Relevant data about the product/function or component is
immediately required for further processing in the VE
stage.
?
Information from the QFD makes the VE process more
focused and manageable.
?
Regarding the identification of potential projects is
reached more easily.
QFD VM
DFMA
Project Name
Description
Objective
Results
Components from
Sliding Arm of
Opening Mechanism
Project originated in
Engineering Dept.
Reducing Noise
Reducing assembly
cost
Design was simplified.
Contradicting
characteristics
achieved
Cost were reduced.
Mechanism operating
noise reduced
Components from
Sliding Mechanism
Project originated in
Engineering Dept.
Reducing Noise
Reducing assembly
cost
Design was simplified.
Contradicting
characteristics
achieved
Cost were reduced.
Mechanism operating
noise reduced
54
Case Study- On Value Methodology for Engineering Business ?
Dr. Shyamkant V. Shrigiriwar
VE allows for more solutions than the QFD alone. They
?
are also more balanced.
?
DFMA can be used to optimize the design proposals and
the information from the QFD/VE processes can be used
to evaluate the impact.
?
The case study shows that the methodology is better suited
to products that are still in early stages of their life cycle. A
benefit of the integrated methodology is the fact that after
each step, the information is summarized, classified and
displayed clearly. This allows the teams to have evidence
of the project's evolution. Communication is greatly
enhanced and information flow is streamlined.
References :
Miles, Lawrence D. (1972) Techniques of Value Analysis and
Engineering - 2nd Editions, McGraw Hill, New York
Fallon, Carlos (1965) Practical Use of Decision Theory in
Value Engineering, pgs. 45-49, Journal of Value
Engineering
Fallon, Carlos (1965) Value and Decision, RCA Monograph
De Marle, David (1992) Value - Its Measurement, Design &
Management, Wiley, New York
Saaty, T.L. (1980) The Analytical Hierarchical Process,
McGraw Hill, New York
Von Winterfeldt, D. and Edwards, W. (1986), Decision
Analysis and Behavioral Research, Cambridge University
Press, New York
U.S. Dept. of Transportation, FHWA (1990), Memorandum Purpose and Need in Environmental Documents
Fowler, Theodore C. (1990), Value Analysis in Design,
Nostrand Reinhold, New York
Stewart, Robert B. & Hunter, George (2001), Moving Beyond
the Cost Savings Paradigm - The Evaluation and
Measurement of Project Performance, AASHTO Value
Engineering Conference Proceedings
Kaufman, J. J. (1994) The Principles and Applications of
FAST, J.J. Kaufman & Associates, Inc.
Stewart, Robert B., Fundamentals of Value Methodology,
Xlibris, 2005, pp. 153
Kaufman, J. Jerry; Value Management, Crisp Publications,
Inc., 1998, pp. 77
L. Delbecq and A. H Van de Ven, "A Group Process Model for
Problem Identification and Program Planning, Journal Of
Applied Behavioral Science VII (July/August, 1971), pp.
466-91
A. L. Delbecq, A. H. Van deVen,and D. H. Gustafson, Group
Techniques for Program Planners (Glenview, Illinois,
Scott Foresman and Company, 1975).
ISSN : 0974-0597
Sinhgad Business Review
Vol. - III, Issue - I, July 2010 - Dec 2010
Framework for Evaluation and Selection of the Software Packages:
A Hybrid Knowledge Based System Approach
Dr. Anil Jadhav1 , Dr. Rajendra Sonar2
Introduction:
Information technology (IT) is changing at an unprecedented
rate. This change is increasing number of IT products and
services, especially software packages, entering in the
marketplace. Accessing applicably of such a wide array of IT
products and services to the business needs of the
organization becomes complex task. Evaluation and selection
of the software packages involves simultaneous consideration
of multiple, usually conflicting factors, to rank the available
alternatives and select the best one. Multi criteria decision
making (MCDM) problem refers to making preference
decision over the available alternatives by considering
multiple factors [Triantaphyllou, 2000]. Therefore,
evaluation and selection of the software packages can be
considered as MCDM problem. Inappropriate selection of the
software package can turn out to be costly and adversely
affects business processes and functioning of the
organization. For example, there are number of solutions in an
ERP market and every solution has different features. As ERP
costs hundreds of thousands and even millions of dollars,
purchasing an ERP solution is a high expenditure activity that
consumes significant portion of companies' capital budget
[Verville & Hallingten, 2002]. Therefore, selecting a software
package that meets organization requirements needs careful
examination of many conflicting factors.
Research motivation:
Decision making in software selection has become more
complex due to: large number of software products available
in the market; continual advancements and improvements in
information technology; existence of incompatibilities
between various hardware and software; difficulty in
accessing functional dissimilarities of various software
packages; lack of structured description of features of the
software package and user requirements of that package;
consideration of several factors while choosing the best
option; user requirement of the software package keeps on
changing [Lin et al., 2006] [Mohamed et al. 2004]. The task of
software selection is often assigned under schedules pressure
and decision makers may not have time or experience to plan
1. Sinhgad Institute of Management, Pune.
2. IIT Bombay, Mumbai.
the selection process in detail. Therefore they may not use the
most appropriate method or criteria for evaluation and
selection of the software packages [Kontio, 1996].
Review of the literature on evaluation and selection of the
software packages shows that analytics hierarchy process
(AHP) has widely been used for evaluation of the software
packages. Another common approach used for evaluation of
the software packages is weighted scoring method (WSM).
Both AHP and WSM technique has its own strengths and
weaknesses. AHP assists decision makers to structure a
decision making problem into hierarchy, helping them to
understand and simplify the problem. However, AHP
technique has some weaknesses such as (i) it is difficult to use
as its calculation model involves very large number of pairwise comparisons (ii) decision makers need to re-evaluate
alternatives when user needs of the software package changes
or the number of alternatives to be evaluated
increases/decreases or evaluation criteria changes (iii) adding
an alternative may cause a rank reversal (reversal in ranking)
problem.
WSM is easy to use and understand but this method works
only with the numeric scale. Another problem with WSM is
that it produces real numbers as results; these results can easily
be interpreted as if they represent true differences between the
alternatives. In actual fact, the resulting scores only represents
relative ranking of the alternatives and differences in their
value but does not give any indication of their relative
superiority [Kontio, 1996].
Both AHP and WSM produce relative ranking of the
alternatives but lack in indicating how well each alternative
meets user requirements of that software package. Another
problem with both AHP and WSM is that these techniques do
not adopt requirement-driven approach and are inadequate for
software selection [Ncube & Dean, 2002]. Therefore, there is a
need of new technique for evaluation and selection of the
software packages that overcomes the problems of AHP and
WSM. The review of Literature [Jadhav & Sonar, 2009] also
shows that (i) there is a little work done on developing generic
methodology describing issues and factors that needs to be
taken into consideration during the process of software
selection (ii) many literature provides criteria for evaluation of
specific software package such as ERP, CRM. However, there
is lack of research on developing a generic list (taxonomy) of
evaluation criteria along with its meaning and associated
measures that could be used for evaluation of any software
56
Framework for Evaluation and Selection of the Software Packages ?
Dr. Anil Jadhav ?
Dr. Rajendra Sonar
package.
Formal and precise description of the software packages is
usually not available. A reasonable approach is to augment the
available documentation with the knowledge derived from
the literature, practices and experience of the expert.
Knowledge based system (KBS) provides a way to organize
the knowledge and deliver a tool that assists decision makers
in evaluation and selection of the software packages [Bandini
et al., 2001]. Evaluation and selection of the software
packages is knowledge intensive process [Mohamed et al.,
2004]. The decision makers lack the technical expertise in
establishing software evaluation criteria, defining its meaning
and associated measures, and testing procedures for
performance assessment and to conduct actual evaluation
[Ncube and Dean, 2002]. Therefore, selecting right software
package requires robust decision support system/tool
supported by well established knowledge base. KBS has a
potential to play significant role in evaluation and selection of
the software packages. Existing systems/tools provides a little
support in various software evaluation activities such as
flexibility in changing evaluation criteria and user needs of
the package, collecting online vendor responses to the RFP,
determining the fit between software package and user needs
of that package, reusing knowledge/ experience.
associated with the evaluation and selection of the software
packages were reviewed thoroughly to (i) develop a generic
methodology for selection of the software packages, and (ii)
investigate generic criteria along with its meaning and
associated measures that could be used for evaluation of any
software package. The literatures associated with the
knowledge based systems were also reviewed to understand
KBS and its applicability, especially, for evaluation and
selection of the software packages.
After developing framework next step was to illustrate the
applicability of HKBS for evaluation and selection of the
software packages. The applicability of HKBS for software
selection has been illustrated by developing and using HKBS
for evaluation and selection of the i) customer relationship
management (CRM) packages ii) enterprise resource planning
(ERP) packages iii) business intelligence (BI) software
packages and iv) campus management system (CMS)
software for educational institutes. Evaluation criteria
investigated on the basis of thorough literature review have
been used for evaluation of these packages. For the functional
criteria and data (software features and feature values) about
the software packages to be evaluated, we rely on the
secondary data collected from various websites, products
leaflets & brochures. A real-world data provided by one of the
engineering company has been used in the CRM case study.
Objectives of the study:
The objective of this study is to provide a basis to improve the
process software selection and propose a generic framework
to assist decision makers in evaluation and selection of any
software package. This can be further refined into following
sub-objectives:
?
propose a generic methodology for selection of the
software packages
?
propose a generic list (taxonomy) of software evaluation
criteria along with its meaning and associated measures
that are essential for assessment of the candidate software
packages
?
propose a hybrid knowledge based system (HKBS)
having inbuilt knowledge of software evaluation criteria
and evaluation technique to assist decision makers not
only in evaluation and selection but also reduce the time
and efforts required for evaluation and selection of the
software packages
Research approach:
Keeping objectives of the research study in mind, initially
framework for evaluation and selection of the software
packages has been developed on the basis of thorough
literature review. The framework comprises of (i) generic
methodology for software selection, (ii) taxonomy of
software evaluation criteria along with its meaning and
associated measures (iii) HKBS to assist decision makers in
evaluation and selection of the software packages. Literature
After illustrating applicability of HKBS for evaluation and
selection of the software packages, next step was to perform
usability test to verify functionality, efficiency, effectiveness
and convenience of the HKBS approach for software
selection. To conduct this experiment questionnaire was
designed to take feedback from experts having
knowledge/experience of evaluating and selecting software
packages. Experts were first given training on how to make
use of the system for software selection and then they were
asked to make use of the system. Feedback was then taken
from the experts to test functionality, efficiency, effectiveness
and convenience of the HKBS approach for evaluation and
selection of the software packages.
After performing usability test the next step was to compare
AHP, WSM and HKBS. The comparison has been done by
using each of these techniques for evaluation and selection of
the software component.
Framework for evaluation and selection of the software
packages:
The framework proposed for evaluation and selection of the
software packages comprises of (1) Methodology for
selection of the software package (2) taxonomy of software
evaluation criteria along with its meaning and associated
measures that are essential for assessment of the candidate
software packages (3) HKBS to assist decision makers for
evaluation and selection of the software packages.
Methodology for software selection:
Sinhgad Business Review ?
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Vol. - III, Issue - I, July 2010 - December 2010
The methodology for selection of the software packages
consists of various stages describing issues and factors that
need to be taken into consideration during the process of
software selection and deliverable at each stage.
Methodology is not intended as rigid structure, it is intended
as guideline and aid that can be adapted according to
requirements of the individual organization. A generic
methodology for selection of the software packages is
developed on the basis of thorough literature review and
stages in the methodology are: Requirement definition;
preliminary investigation; creating shortlist of packages;
establishing evaluation criteria; evaluation, and final
selection.
Taxonomy of software evaluation criteria:
Many literature concerning evaluation and selection of the
software packages provides software evaluation criteria to
evaluate specific software package such as Data Mining,
CRM, ERP, etc. However, focus of these literatures is not on
providing a generic list of criteria that could be used for
evaluation of any software package. It has also been observed
that meaning of evaluation criteria is not clearly defined and it
is open to evaluators own interpretation. Sometimes
terminology used by one author for a criterion in one literature
is different than terminology used by another author for the
same criterion, which might confuse evaluator. Some
literature describes only functional and quality criteria but do
not focus on the important criteria related to the vendor, cost
and benefits, technical (hardware and software) requirements,
opinion and output related characteristics of the software
package.
The taxonomy of software evaluation criteria along with its
meaning and associated measures is developed on the basis of
thorough literature review. The evaluation criteria are broadly
categorized into seven different groups namely: functional,
technical, quality, vendor, output, cost and benefits, and
opinion related characteristics.
HKBS approach for evaluation and selection of the
software packages:
The HKBS for evaluation and selection of the software
packages employs an integrated rule based and case based
reasoning techniques. So far, HKBS approach for evaluation
and selection of the software packages has not been used in
any of the reviewed literature. Rule based system, a deductive
reasoning approach, is reasoning system which mimics the
problem solving behavior of the human experts. Case based
reasoning, an inductive reasoning approach, is problem
solving approach that solves problem by adapting solution of
more similar cases that has been solved in the past. A new
problem is matched against cases in the case base and one or
more similar cases are retrieved. Solution suggested by
matching cases is then reused and tested for the success
[Aamodt and Plaza, 1994]. A HKBS approach eliminates
drawbacks of both pure inductive and deductive reasoning
and solves problem in more intelligent way.
57
HKBS has been developed using an enterprise intelligent
system development and solution framework described by
Sonar [2004]. The solution framework supports to develop,
deploy, and run web based applications and decision support
systems backed by an integrated architecture of rule based
reasoning, case based reasoning, neural network, and genetic
algorithm. Only rule based reasoning and case based
reasoning components of the solution framework have been
used for development of the HKBS. Rule based reasoning
component of the HKBS stores domain knowledge i.e.
knowledge about the software evaluation criteria. It assists
decision makers to: (1) choose criteria which he/she wish to
consider for evaluation of the software packages (2) capture
users requirements of the software package through a simple
or knowledge driven sequence of form (3) formulate a
problem case. Rule based expert system also helps in
controlling execution of the CBR.
Once user needs of the software package are captured, next
step is submitting these requirements as input to the CBR
system. CBR system is then used to: (1) retrieve candidate
software packages stored as cases in case base of the system
(2) compare user requirements of the software package with
description of the candidate software packages (3) rank the
candidate software packages in descending order of the
similarity score. Similarity score indicates how well each
candidate software package meets user requirements of that
package. Case base of the system is made up of detailed
description of the candidate software packages. Each software
package is described using well defined set of features and
feature values. Features used to describe candidate software
packages have same vocabulary as that of criteria used for
evaluation of the software packages.
HKBS produce results in the form of ranking of candidate
software packages. The ranking is done in descending order of
the similarity score which indicates how well each candidate
package meets user requirements of that package. In addition
to evaluation and ranking of the candidate software packages,
HKBS also facilitates to set weight and cutoff for each criteria
category. Weight represents importance of each criteria
category in software selection process, and cutoff represents
user requirement of minimum similarity score for each criteria
category. HKBS also facilitates to collect vendor responses to
the request for proposal (RFP) online. It assists vendors of the
software packages to describe their software packages in
predefined format using the forms generated by the system.
The form consists of predefined set of features and feature
values of the software package. The forms used to collect
vendor responses are similar to the forms used to gather user
requirements of the software package during the process of
software selection. The advantages of using online approach
for collecting vendor responses are: it brings uniformity in
describing software packages of the different vendors; it
brings not only standardization but also transparency in the
process of software selection.
The applicability of HKBS for software selection has been
illustrated by developing and using HKBS for evaluation and
58
Framework for Evaluation and Selection of the Software Packages ?
Dr. Anil Jadhav ?
Dr. Rajendra Sonar
selection of the (1) CRM packages (2) BI packages (2) ERP
packages and (4) Campus Management System (CMS)
software for educational institute. Only functional criteria for
evaluation of these software packages are different whereas
criteria related to the quality, cost and benefits, technical,
vendor, opinion, and output related characteristics of the
software package are common and can be used for evaluation
of any software package.
Evaluation of HKBS approach:
Usability test is performed to verify functionality, efficiency,
effectiveness and convenience of the HKBS approach for
evaluation and selection of the software packages. The
experts (testers) having knowledge/experience of evaluation
and selection of the software packages were involved in the
experiment. Testers found that HKBS is easy to use and
specify user needs of the software package. It assists decision
makers to determine the fit between software package and
user needs of that package. They also mentioned that the
results (ranking of candidate software packages) produced by
the system in the form of percentage case matching (similarity
between capabilities of software package and user needs of
that package) are impressive. Overall, testers were satisfied
with the system developed for evaluation and selection of the
software packages.
Comparison of AHP, WSM and HKBS:
As HKBS is new approach proposed in this study for
evaluation and selection of the software packages there was
need to compare AHP, WSM and HKBS. The comparison is
done on the basis of the following parameters by applying
each of these techniques for evaluation and selection of the
software component.
?
Does evaluation technique supports qualitative criteria?
?
Does evaluation technique supports quantitative criteria?
Contribution of the study:
Academic perspective: This study carried out an extensive
literature review. The classification and contribution of the
reviewed literature in the field of evaluation and selection of
the software packages should be of value both to the
academicians and researchers those who are interested in
state-of-the-art of the software package evaluation and
selection. This study also provides conceptual understanding
of every aspect related to the software selection such as i) stage
based methodology describing issues and factors that needs to
be taken into consideration during the process of software
selection ii) deliverables at each stage ii) evaluation criteria
along with its meaning and associated measures that are
essential for assessment of the candidate software packages.
Practitioner's perspective: Decision makers need to follow
certain procedure during the process of software selection.
This study proposed a stage-based methodology describing
tasks to be performed at each stage and deliverables at each
stage. Decision makers can use the methodology as a
guideline or an aid for software selection. Identifying criteria
for evaluation of the software packages is tedious and time
consuming job for the decision makers. This study proposed a
comprehensive list (taxonomy) of software evaluation criteria
that are common and can be used for evaluation of any
software package. Meaning of each evaluation criteria is also
defined along with its associated measures (metrics) that are
essential for assessment of the candidate software packages.
HKBS as a tool:
HKBS proposed in this study can be used by decision makers
as a tool for software selection as it supports various software
evaluation activities such as specifying and changing user
requirements of the software package, choosing criteria for
evaluation, determining the fit between software package and
user requirements of that package, reusing knowledge /
experience.
?
Is evaluation technique simple and easy to use when (i)
number of alternatives to be evaluated and number of
criteria considered for evaluation are large in number (ii)
number of alternatives to be evaluated changes (iii)
number of evaluation criteria changes (iv) user needs of
the software package changes
The methodology for selection of the software packages and
criteria for evaluation of the software packages proposed in
the study are investigated only on the basis of thorough
literature review.
?
Does evaluation technique support knowledge/experience
reuse?
Views of limited number of experts/ practitioners have been
taken into consideration for evaluation of HKBS approach
?
Does evaluation technique support to capture/change user
requirements of the software package?
Future work:
?
Does evaluation technique cause rank reversal (reversal in
ranking) problem, if new alternative is added?
?
Does evaluation technique produce result indicating how
well each package meet user requirements?
Limitations of the study:
As information technology advances different user needs in
terms of quality characteristics of the software package will
emerge that needs to be addressed by enhancing the decision
making framework. The framework can be enhanced further
by adding new evaluation criteria along with its meaning and
associated measures/metrics.
Sinhgad Business Review ?
ISSN : 0974-0597 ?
Vol. - III, Issue - I, July 2010 - December 2010
More case studies with the larger scope can also be conducted
to further test the functionality, efficiency, effectiveness and
convenience of the HKBS approach.
Extend functionality of the HKBS to assist decision makers in
finding the best solution when system is to be developed by
integrating components from different vendors.
References:
Aamodt, E. Plaza, Case based reasoning foundational issues,
methodical variations and system approaches, AI
communications, vol-7 No.1, 1994, pp. 39-59.
S. Bandini, F. Paoli, S. Manzoni, P. Mereghetti, A support
system to COTS-based software development for
business services, SEKE'02 ACM 2001, pp. 307-314.
S. Jadhav, R. M. Sonar, Evaluating and selecting software
packages: A review, Information and software technology
51 (2009), pp. 555-563.
J. Kontio, A case study in applying systematic method for
COTS selection, Proceedings of ICSE-18, IEEE, 1996,
pp. 201-209.
H.-Y. Lin, P.-Y. Hsu, G.-J. Sheen, A fuzzy-based decision
making procedure for data warehouse system selection,
Expert systems with applications, 2006.
Mohamed, T. Wanyama, G. Ruhe, A. Eberlein, B. Far, COTS
evaluation supported by knowledge bases, SpringerVerlag, LSO 2004, LNCS 3096, pp. 43-54.
Ncube, J. C. Dean, The limitations of current decision making
techniques in the procurement of COTS software
components, proceedings of the first international
conference on COTS-based software system, Orlando,
pp. 176-187, Feb 2002.
R. M. Sonar, A web-based hybrid intelligent system
framework, Proceedings of sixth IASTED international
conference on intelligent systems and control, ISC 2004,
Aug. 2004, Honolulu, USA.
E. Triantaphyllou, Multi-Criteria Decision making Methods:
A Comparative Study, Springer, 2000.
J. Verville, A. Hallingten, An investigation of the decision
process for selecting an ERP software: the case of ESC,
Management Decision, Vol. 40 No.3, 2002, pp.206-216.
59
ISSN : 0974-0597
Sinhgad Business Review
Vol. - III, Issue - I, July 2010 - Dec 2010
Implications of Future Vehicular Traffic and Its Management:
A Study of Pune city for the next decade
Dr. Rupali Jain1 , Dr. V. G. Vedak2
Abstract:
8. To forecast the population of Pune city in order to estimate
the requirement of buses (public transport) for Pune city
for the next decade.
Objectives of this study were to analyse trends in vehicle
population, road accidents and air pollution in Pune city. This
is studied by using secondary data of vehicle population, road
accidents and air pollution. A Trend was studied for personal
vehicles (two-wheelers, four-wheelers) as well as for autos
and buses. Similarly, roadwise, time-slot-wise, vehicle-wise,
month-wise accident patterns were also analysed. Also
problems faced while travelling by bus as well as by personal
vehicle were found out by a primary survey. Expectations of
the people to shift from personal vehicles to public transport
was carried out, based on which, suggestions for
improvement are given. The relationship between vehicle
population and number of accidents has been worked out. The
expected human population and the number of buses required
for them is also worked out.
4. By encouraging the use of public transport (buses) road
accidents and air pollution can be minimized.
Objectives of the Study:
Background of the Study:
1. To study the trends in motor vehicle population in Pune
city.
In the twenty-first century, a large number of rural people
migrated to the cities. These ever expanding cities have
generated a tremendous demand for transportation. Between
1951 and 2001 the number of vehicles has increased 158
times. Much of the growth is in personalized modes like twowheelers, cars and jeeps. Such a rapid growth threatens the
sustainability of city by creating local, national and global
problems: rising congestion, increased air pollution, increased
oil consumption and high rates of road accidents are some of
the challenges associated with motorization.
2. To study the trends in road accidents in Pune city.
3. To study the air pollution scenario in Pune city.
4. To identify travel patterns and problems encountered
while availing public transport services in Pune City.
5. To study the problems faced by two-wheeler and fourwheeler users while travelling daily (to their work/study
place) and their expectations from Pune's public transport
for availing it.
6. To study the relationship between vehicle population and
number of road accidents.
7. To estimate the number of two-wheelers, four-wheelers
and total vehicle population for the next decade in Pune
city.
Hypothesis of the Study:
1. Safe and separate cycle routes will increase the use of the
cycle.
2. If reliable bus services are provided, people will use public
transport.
3. For good services bus travelers are ready for an increase in
bus fare.
Pune city is an important urban center in Maharashtra. It is one
of the rapidly growing metropolitan cities of the country. Over
a period of time, the city has started experiencing problems in
safe and easy movement of people and goods. Pune city on an
average registers about 8 accidents every day. The worsening
traffic situation and increasing travel demand in Pune city has
propelled the need to study the transport scenario and its
effects in detail.
Research Design:
This study has adopted the following design to study the above
cited objectives and test the hypothesis.
Data and Data Sources:
1. Sinhgad Institute of Management, Pune
2. Dr. D. Y. Patil Institute of MCA, Akurdi, Pune
The study was based on primary data as well as secondary
data. Secondary data has been used to understand the past, that
Sinhgad Business Review ?
ISSN : 0974-0597 ?
Vol. - III, Issue - I, July 2010 - December 2010
is, to know the trends in road accidents, air pollution
measures, human population etc. while primary data has been
used to understand problems faced by bus travelers, personal
vehicle users and to know their expectations from public
transport.
Secondary Data:
1. Motor vehicle population: Data of motor vehicle
population has been collected from the Road Transport
Office, Pune for 1993 to 2007.
2. Road accident data: Road accident data for Pune city has
been collected from the Pune Traffic Police Department
for the period 1997 to 2007.
3. Air pollution data : Air quality status, has been collected
from Pune Municipal Corporation, Environment
Department, Air Quality Management cell, as well as from
Maharashtra Pollution Control Board (MPCB).
Primary Data:
Primary data has been collected for two purposes.
1. To know the travel patterns as well as problems
encountered by travelers while travelling by public
transport. Data has been collected from bus commuters for
this purpose. Sample size - 561 bus travelers, Sampling
method - Purposive sampling
2. To understand the travel experience of two-wheeler and
four-wheeler users and what their expectations are in
order to shift to public transport. Data has been collected
from two-wheeler users and four-wheeler users for this
purpose. Sample size - 585 personal vehicle users ,
Sampling method - Purposive sampling
Methods and Instrument of Data Collection:
The survey method was chosen for collecting data from the
respondents. Two sets of structured and comprehensive
questionnaires, one for bus users and one for two-wheeler and
four-wheeler users were designed.
Statistical Tools:
The secondary data and primary data was analyzed with the
help of software like Microsoft Excel, SPSS version 14 and
Curve Expert software for fitting trends. Percentages, graphs,
averages, cross tabulation, correlation and regression, trend
analysis and hypothesis testing techniques were used.
61
percent increase causing 3 fold increase in number of total
vehicles. (Total number of vehicles in Pune city has
increased from 3,13,327 to 9,29,825 during 1993 to 2007)
2. The major growth is in personalized vehicles. Twowheelers and four-wheelers together constitute to 85
percent of total vehicles while buses constitute only 1
percent of total vehicles. Share of Auto and Goods vehicles
is around 7 percent.
Objective 2: To Study the trends in road accidents in Pune
city.
Motor accidents in Pune City :
1. Number of fatal accidents and serious accidents are
increasing every year. Proportion of fatal accident in total
accidents have consistently increased from 11 percent in
1997 to 17 percent in 2007.
2. Maximum number of serious accidents has taken place in
2007 which is as high as 406.
3. Number of minor accidents more or less remained constant
throughout the years.
Victims in road accidents in Pune city and accident
severity index:
1. Number of deaths in fatal accidents shows 50 percent
increase from 282 in 2001 to 412 in 2007.
2. Accident severity index has reached to 17.64 in 2007 from
11.91 in 1997. That is 48 percent increase in 10 years.
Vehicle wise fatal accidents, serious accidents and minor
accidents:
1. Vehicle wise accident analysis shows that fatal accidents
by trucks and other heavy vehicles is highest followed by
two-wheelers and cars and jeeps, that is personalized
vehicles.
2. Share of personalized vehicle is highest in serious
accidents (55 to 60 percent) and serious accidents by
motorcycle and car and jeep shows two fold and four fold
increases from 2003 to 2007 respectively.
Classification of accidents by way of victim's vehicle:
1. It is seen that maximum victims of fatalities are pedestrian
(38percent) and cyclist (11percent). Pedestrian and cyclist
are the most vulnerable for accident.
Findings and Suggestions:
Objective 1: To study the trends in motor vehicles population
in Pune city.
2. Share of two-wheelers users in fatalities and in serious
accidents is 44percent and 48 percent respectively in 2007,
which is equally high.
1. In the last decade, population of Pune city shows 47
Road-wise, Time-slot-wise, Month-wise fatal accidents,
62
Implications of Future Vehicular Traffic and Its Management ?
Dr. Rupali Jain ?
Dr. V. G. Vedak
serious accidents, minor accidents (2004-2007):
1. It is observed that fatal and serious accidents are highest
on Pune-Mumbai road followed by Solapur road and
Satara Road.
2. Severity of road accident shows Solapur road is most
badly affected.
Time-slot wise as road accidents :
1. Time slot wise analysis shows that one third of the
accident, take place at night during 9 pm to 7 am, 10 to 15
percent accident take place in the evening rush hours 7 pm.
to 9 pm. and around 10 percent in the morning 9 am. to 11
am.
2. It is observed that during 11 to 1 in the morning and 5 to 7
in the evening accident number is quite high (on an
average 9 to 10 percent.) in the last 4 years.
Month wise road accidents:
Month wise analysis was done to find out whether accident
follows certain pattern according to season, (that is more
accidents on rainy season etc.) but no such pattern was
observed.
Objective 3: To study air pollution scenario in Pune city:
1. From 2007 - 2008 air pollution data it can be inferred that
with respect to SO2 and NOx and SPM at all testing areas
(Navi Peth, Mandai, Oasis, Nalstop and Swargate) no
pollution problem exists.
2. Annual RSPM level in 2007 was within acceptable limits
but in 2008 at Navipeth and Mandai the measure was more
than the prescribed limit.
3. Concentration of air pollutants (at Swargate & Nalstop)
shows a declining trend from 2003 to 2007. NOx level has
reduced in every month (due to replacement of old buses)
RSPM levels have reduced below those of 2005-2006.
Objective 4: To identify travel patterns and problems
encountered while availing public transport services in
Pune city.
1. 75 % people use buses to commute to the office or for
education purposes either daily or 3 to 4 days in a week
2. 30, 58 and 12 % travelers are in the age group of 11 - 20,
21-40 and above 40 respectively.
3. While commuting 57 percent people need to change 1 or 2
buses to reach their destination.
5. Waiting time at bus stops is high (60 percent of the time it is
more than 15 minutes).
6. On an average 12 minutes is the walking time taken to
reach a bus stop.
7. Crowded buses, not keeping to time table and a lot of
waiting time on bus stop are major problems. Less
frequency of buses, cleanliness, safety, discipline by
travellers are some another problems bus travelers face.
Objective 5: To study problems faced by two-wheeler and
four-wheeler users while traveling daily for work/study
place and their expectations from Pune's public transport
for availing it.
1. The average distance travelled - 12 km. (by two-wheelers)
and 18 km. (by four-wheelers).
2. No sharing of vehicle (car pooling) -76 % two-wheeler
users travel alone. 13 %, 20% four-wheeler and twowheeler users use it to full capacity.
3. 30%, 39%, 31% possess one vehicle, two vehicles, and
more than two vehicles respectively.
4. A traffic jam is a daily affair in Pune city. (75 percent
people get stuck in a traffic jam daily either 1 to 3 times or
more than 3 times)
5. 60 % people spend more than 15 minutes daily in a traffic
jam.
6. Reliability, good and clean condition of buses, place for
sitting and comfortable entry exit.
7. Nonstop, luxury or air conditioned buses have the last
priority in the list of expectations
Objective 6: To Study relationship between vehicle
population and road accidents.
1. There is a very high (more than 0.9) correlation between
the population of total vehicles and fatal accidents as well
as the population of total vehicles and serious accidents. (
0.7)
2. There is a very high relationship between the two-wheeler
population and fatal, serious accidents (0.933, 0.689), as
well as four-wheeler population and fatal, serious
accidents, (0.924, 0.58)
Objective 7: To estimate total two - wheelers, fourwheelers and total vehicle population in Pune city for
next decade.
1. In 2020 Two-wheelers -11 lakh to 14 lakh
4. For short distances people prefer not to use buses (21% for
less than 5 kms).
2. Four-wheelers - 2 to 2.3 lakhs,
Sinhgad Business Review ?
ISSN : 0974-0597 ?
Vol. - III, Issue - I, July 2010 - December 2010
3. Total number of vehicles - 15 to 18 lakhs
Objective 8: To forecast population of Pune city in order to
estimate requirement of buses (public transport) for Pune
city for the next decade.
1. It can be seen that the expected population of Pune city in
2020 will be almost 50,00,000. It can be worked out that a
minimum of 2200 buses are essential for Pune city's
population. An optimistic approach (that is people will
shift to buses) suggests approximately 3300 buses will be
needed.
63
reasonable improvement in the current bus system following
which both approaches should be adopted simultaneously.
Pedestrian friendly paths together with separate lanes for
bicycles must be designed. Limitations of the Study:
For forecasting of two-wheeler, four-wheeler and total vehicle
population, past data has been used and the assumption made
is that current trends will continue.
Scope for Future Research:
More research can be done on current traffic control system, as
well as on road design.
Hypothesis Testing:
Hypothesis1: Safe and separate cycle routes will increase use
of cycles.
By using one proportion z-test hypothesis is tested and
accepted.
Hypothesis 2: If Reliable bus services are provided, people
will use public transport.
References :
Black, A., (1995), "Urban Mass Transportation Planning",
Published by Tata McGraw-Hill.
Moavenzadeh, F., Markov, M., (2007), "Moving Millions,
Transport strategies for sustainable development in mega
cities", Published by Springer.
Hypothesis 3: For good services people are ready for an
increase in bus fair.
Paul Barter, Tamim Raad, (2000), "Taking Steps: A
Community Action Guide to People-Centered, Equitable
and Sustainable Urban Transport", Published by the
Sustainable Transport Action Network for Asia and the
Pacific (the SUSTRAN Network).
By using one proportion z test hypothesis is tested and
rejected.
EMBARQ, (2006), A Solution for Mexico, Sustainable
Mobility, Washington DC, USA.
Hypothesis 4: By Encouraging Use of Public transport Road
accidents and Air pollution can be minimized.:
Gijre, V., (2002), Public transport and road safety a case of
Pune city, IJTM, Vol. 26, No. 4.
By using t test hypothesis is tested and accepted :
Gupta, S., (2001), Economic approaches for addressing
vehicular pollution : Issues and prospects for India,
Proceedings of research papers presented at a workshop on
Transportation, Land use and Environment, CIRT, Pune.
By using one proportion z-test hypothesis is tested and
accepted.
Suggestions:
Efficient and reliable public transport is the key solution :
1. Reduce overcrowding in a bus by increasing frequency of
buses. Strict monitoring and controlling by a higher
authority combined with disciplinary action for not
sticking to the time.
2. Separate and segregated bus lanes, policies like one-way
roads and no personal vehicles can be useful.
Joglekar, A., (2006), Pune caught in a whirlpool: Can a
modern public transport system rescue it - A review.
Litman, T., (2005), Land use impact on Transport -How Land
use Factors affect Travel Behaviour , Victoria transport
policy Institute, British Colombia.
Litman, T., (2006), Transportation Market Distortions,
Berkeley Planning Journal, Volume 19.
Demand Management Strategies:
Increase parking charges, Increase road taxes for personal
vehicles ,'No personal vehicle zone' area, Bus priority lanes,
Multiple taxes for possession of an extra vehicle, A policy of
even numbered vehicles on even days and odd numbered
vehicles on odd days can help to reduce vehicles on the road.
These strategies can be implemented only after there is a
Luc Nadal, (2007), Bike Sharing at Paris -Bike sharing sweeps
Paris off its fleet, Sustainable Transport, No.19.
Mohan, D., (2001), Planning for public transport : Integrating
safety, environment and economic issues, Proceedings of
research papers presented at workshop on transportation,
Land use and Environment, CIRT, Pune.
64
Implications of Future Vehicular Traffic and Its Management ?
Dr. Rupali Jain ?
Dr. V. G. Vedak
OECD Conference on Environmentally Sustainable
Transport, (2000), EST futures, strategies and best
practices. Vienna, Austria.
Padam, S., (2000), Public Transport: The case of defending
the obvious, IJTM, Vol. 24, No.10.
PSUTA Studies, (2005), Partnership for Sustainable Urban
Transport in Asia. Sustainable Urban Transport in AsiaMaking the Vision a Reality A CAI- Asia Program.
Pucher, J., et al, (2005), Urban transport crisis in India,
Transport Policy 12, Elsevier Publication.
Sustainable Transport, (2007), Sustainable Transport Award
Winner: London.
Tiwari, G., (2007), Urban Transportation Planning, TRIPP,
Indian Institute of Technology, Delhi.
ISSN : 0974-0597
Sinhgad Business Review
Vol. - III, Issue - I, July 2010 - Dec 2010
Book Review of "Toyota Talent - developing your people the Toyota Way"
by Jeffrey K. Liker & David P. Meier (Tata McGraw-Hill Edition)
Dr. S. U. Gawade1 , Prof. Aparna Ghaisas2
The book starts with a Chinese proverb "If you want one year
prosperity, grow seeds. If you want 10 years prosperity grow
trees. But if you want 100 years of prosperity grow people.”
(1) Defining critical knowledge
(2) Transferring it &
(3) Follow up.
The Toyota Production Systems is available for 30 years now.
We find a host of companies trying to follow the footsteps of
Toyota, but still nobody is able to duplicate the results that
Toyota is getting.
In chapter 2 , the authors have further explained about Toyota
training like how Toyota believed in developing capable
masses of multiskilled labors, (a) how Toyota selects people
who have capacity & desire to learn, (b) have problem solving
capacity, teamwork ability, & those who are suitable to
Toyota's learning environment & (c)how Toyota uses equal
balance between reward & punishment to encourage desired
behavior.
The secret of Toyota success is great people supported by
system that mandates need for talented people. Others are just
imitating Toyota, but the fact remains that one can copy
system, but talent needs to be cultivated & developed. Toyota
rose from a small rural based company to a global powerhouse
because of exceptional talent. Toyota believes that only 10%
of the talent is inborn & 90% can be developed.
Authors have effectively explained with examples, the
Toyota's philosophy of developing people, in total 16
chapters. The philosophy can be briefly summarized as
a. Base management decisions on long term philosophy
even at the expense of short term goals.
Toyota has three regional training centers called 'Global
Production Centers' one in Thailand, one in England & one in
Kentucky.
It focuses on development of human value system by (a)
Attracting potential employees & selecting most appropriate
ones (b) Properly orienting them & familiarizing them with
job roles (c) on the job development & training & encouraging
individual team initiative, work simplification & caring
supervision (d) Focusing on career development & inclusion
of family, community also.
b. Standardize processes for continuous improvements.
c. Grow leaders who thoroughly understand work, live
philosophy & teach to others.
d. Develop exceptional people & team who will follow your
company's philosophy.
e. Respect your suppliers by challenging them & helping
them to improve.
f. Become a learning organization, through relentless
reflection & continuous improvement.
Toyota believes development is about learning & then
teaching others. Few fundamental skills accounts for major
activities of shop. These job elements are broken down into
small portions so that they can be easily learned. Crucial
movements are practiced relentlessly to master them.
The authors further highlight that the secret of Toyota lies in
getting extraordinary results from ordinary people. Toyota's
technology for developing people is not extraordinary but it's
commitment of doing it everyday, consistently at high level, is
rare & remarkable.
Chapter 3 - deals with 'training within industry’
The authors have noticed that many organizations get trapped
in a vicious cycle as they overlook the long term aspect of
training & rather emphasize on short term matters.
To break this cycle authors have suggested the Toyota way of
1. Sinhgad Institute of Management, Pune
2. Sinhgad Institute of Management, Pune
Toyota training originated from US programme called
'Training within Industry'. This technique was developed by
Charles Allen in World War I, in ship building.TWI technique
contains primary modules like
1. Job Instruction step by step breakup & teaching any
process.
2. Job methods eliminate unnecessary activities, steps,
66
Book Review of "Toyota Talent - developing your people the Toyota Way" ?
Dr. S. U. Gawade ?
Prof. Aparna Ghaisas
wastes & overcomes resistance to change
3. Job relation - handles employee motivation
4. Programme development - for specific training needs.
Here Deming's PDCA cycle is closely followed
First three modules are rigorously followed by Toyota.
their jobs.
For developing talented people the following processes are
repeated continuously in Toyota
a. Identify critical knowledge - i.e. identify 20% of total
content that makes up 60% of the work content but for this
the work needs to be standardized.
1. People learn gradually in small chunks & step by step.
b. Transfer knowledge using job instruction- i.e. trainer will
tell, show & illustrate with the use of gestures, voice
inflection etc.
2. Beyond learning pieces, learning whole takes additional
time & requires ongoing coaching.
c. Verifying learning & success - here studies are related with
work.
3. Pieces should be standardized processes for easy &
effective training.
Chapter 5 - deals with defining critical requirements of work,
in detail. Work can be & need to be standardized, may it be
manufacturing or services, production or planning. But at the
same time care should be taken to avoid overgeneralization.
Charles Parrow had classified work into four categories on the
basis of task variety & task analyzability. The categories are
routine work, technical work, craftwork & non-routine work.
Authors have suggested different types of staff development
for above four types, for example for routine work, skill of
vigilance, intuitive ability & ability to detect deviations need
to be developed but for non-routine work staff development
becomes a tough job & needs to be done on the job & with the
help of mentors.
TWI is based on following assumptions
4. Training & development is ongoing process & requires
harmonious relationship between the coach & the worker.
5. Key role of supervisor is to be a teacher & a coach.
6. Due to long term training & development the resultant is
quality & productivity.
Toyota Talent Development Process comprises:
1.
2.
3.
4.
Preparing the organization
Identifying critical knowledge
Transferring knowledge by Job Instruction method
Verifying learning & success
Chapter 4- deals with how to prepare the organization
Authors have made it clear that the key concept in any training
is to begin with simple & then to advance to more complicated
jobs.
Chapter 6 - deals with standardization of work & job
evaluation methods.
1. First step is to define where you are i.e. current situation &
then one can decide where & how one can reach. Toyota
spends major time in planning so as to avoid hardship in
correcting mistakes later.
Toyota people believe that one can standardize & go on
improving anything. In-depth understanding about job is the
remarkable feature of Toyota.
2. After accessing the need, one has to determine the
resources necessary to accomplish objectives, like one
qualified person is required to do job instruction for ten
people. The trainee should have inborn qualities like
intuitive abilities, willingness to teach & learn,
adaptability & flexibility, caring nature, concern for
others, patience & persistence, confidence, leadership
qualities along with learnable qualities like observation,
job analysis ability, effective communication skills,
knowledge of job etc.
Toyota practices standardization which is intentional
mindfulness & 'monozukuri' i.e. art of making things & not a
mindless conformity. Toyota people, like an artist,
continuously challenge current methods & then go on
improving the standard methods. According to 'Teruyuki
Minoura' Sr M.D., Toyota, Toyota doesn't follow 'Toyota
Production System (TPS) but it is essentially a 'Thinking
Production System'. They manage the challenging job of
allowing creativity, change, but at the same time being
consistent.
The authors have specifically mentioned here that the coach
should not take undue advantage of the weak area of the
students. They have quoted that in the book "Break all the
rules", Marcus Buckingham & Curt Ciffmon have
emphasized that instead of indentifying weak points in
employees & attacking them, a good training programme
should identify strong points of employees & link them with
Toyota people believe in identifying most critical &
commonly repeated aspects of every job, learning how to
perform them flawlessly, documenting the practices &
diligently training people to follow standard procedures.
Both standardization of work & Job Instruction go hand
in hand.
Sinhgad Business Review ?
ISSN : 0974-0597 ?
Vol. - I, Issue - I, July 2009 - June 2010
67
Standardization of work includes various tools & documents
like standardized worksheets, work compilation sheet,
process capability sheet, operation work instruction etc. But
authors have emphasized that while preparing these, main
focus is always on what is the purpose behind all this task,
otherwise people get trapped in only standardization.
Chapter 13 - the authors have explained the important step in
training i.e. 'try out the performance'. If the student performs
the job correctly, the training is effective, if not, then the
trainer should reflect, make adjustments & correct problems.
Chapter 7 - deals with how to analyze job like separating core
consistent elements from inconsistent ancillary tasks, then
preparing standard worksheets, breaking down each category
further & then defining how to do processes. Job Instruction
method is used to transfer the knowledge.
Chapter 14 - explains how to handle challenging situation
like what if work needs to be completed along with learning &
earning proficiency, when the time is limited, when job
requires specific skills, when the task to be taught is
infrequently performed etc.
Toyota emphasizes on total system efficiency rather than
individual efficiency, in detailed craftsmanship & on critical
elements rather than total task.
Chapter 15 - the authors have explained how to verify
learning & success. Authors have quoted Samual Smiles view
that 'we often learn wisdom from failures much more than the
success. We often discover what will do by finding out what
will not do & probably he who never made a mistake, never
made a discovery.’
Chapter 8 - deals with breaking the job down in such a way
that it will be easy to teach. This is done through slicing the job
into individual tasks, grouping them according to
characteristics & then dicing it into definable standard
methods suitable for training.
Chapter 9 - deals with identifying key points & reasons
thereof. The points which are critical to the success of job are
key points. Key points can be ensuring safety to workers,
quality of product, productivity rate, and control of costs.
Here the authors have emphasized on explaining the trainees
why things are important, rather than telling them just to do a
thing in a particular way.
Chapter 10 - Authors have explained nicely with the
examples of bumper modeling job, health care, the most
commonly committed errors in job breakdown & then how to
rectify them.
Chapter 11 - deals with 'preparation for training i.e. creating
'Multifunctional Worker Training Plan'.
In MFWTT, job tasks in work area are identified, people in
the work area are listed, each person's capability for each area
are identified, the gaps in capabilities are found out & then
how to bridge the gaps is planned out.
Here trainer should meet each person & determine any
specific need, create overall development plan & review it
with the candidate, prepare work area, allow adequate time for
training & then prepare job breakdown.
Chapter 12 - the authors have elaborated how to present the
operations in training sessions. Here the trainer has to first
worm up the students, put them at ease, and tell them the job
name in order to develop sense of ownership, find out what the
students know about the job, get them interested in the job &
put the situation in correct position to avoid errors like
mirroring.
While presenting the operation, the trainer must tell, show &
demonstrate the job.
The authors have mentioned here that the trainer should
always motivate the students to be self-reliant but at the same
time, it is always the trainer, who is ultimately responsible. He
should always support the student, check the progress
frequently, encourage questions & then gradually reduce
coaching & followup.
Authors have stated that Toyota uses cascading audit methods
for verification i.e. each one evaluates the situation one level
below a specific leader. Each team-leader is expected to audit
standard work of at least one employee daily, the group leader
is expected to audit one job weekly & assistant manager one
operation, per group weekly.
Chapter 16 - authors have beautifully explained how to
develop structure for implementation. No one size fits all. The
steps to be followed here are, to develop initial focus area with
the help of external master trainers, then improve upon what
you did in first area & select additional work area & repeat the
process, develop internal JI instructors & trainers, further
develop internal trainer resources in parallel deployment areas
& continue to develop workplace trainers & leaders.
The authors have specifically noted two main reasons for
Toyota's success. They are (a) 'developing ability to do 'hensui'
i.e. reflection to become independent learner',' & (b)
developing resources by going deep & then wide i.e. acquiring
deep knowledge & then practicing it across.
The book will definitely be a guidepost for shop floor, routine
activities. But at the same time, Toyota training techniques
could be thoughtfully applied across the organization, be it the
shop floor or any service department, be it repetitive routine
activity or critical non-repetitive process. There is lot to learn
from how Toyota is been able to yield fantastic results, year
after year, by aiming at repeated improvements, strengthening
the organization by developing full capability of every
member. Toyota has truely proved that investment in people
yields much more than the cost of investment.
ISSN No. : 0974-0597
Sinhgad Business Review
Vol. - I, Issue - I, July 2009 - June 2010
Guidelines for Authors
SBR- Sinhgad Business Review is a peer-reviewed journal
with an ISSN No. 0974 - 0597. SBR welcomes original papers
on management, business, and organization issues from both
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Book Reviews covers reviews of current books on
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Abstracts includes summaries of significant articles of
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international journals particularly those focusing on
emerging economies.
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Manuscript Parameters:
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References cited in the manuscript only must appear in the
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(Benni,2007). References should be listed alphabetically on a
separate page at the end of the manuscript. The SBR adopts
American Psychological Association, (APA) reference style.
APA References style should appear as follow:
Book by single author:
1. Arnes, W. (2008). "Contemporary Advertising", UK :
McGraw Hill International Edition, 10th ed.
Book by more than one author:
1. Krishnaswamy, K. N., Appa, Iyer, Sivakumar, &
Mathirajan. M., (2006), Management Research
Methodology: Integration of Principles, Methods and
Techniques, Pearson Education, New Delhi, pp.
More than one Book by the same author:
1. Roy, A., (1998a) Chaos theory, McMillan Publishing
Enterprise, New York, pp.
69
Roy, A., (1998b) Classic Chaos, McMillan Publishing
Enterprise, New York, pp.
attachment to the editor at [email protected] or
[email protected].
Edited Book:
1. Pennathur, A., Leong, F. T., & Schuster, K (Eds), (1998),
Style and substance of thinking, Paradise Publishers,
New York, pp.
Blind Review Process:
The author's name should not appear anywhere in the body of
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review process usually takes about three months to one year.
The editor of SBR reserves the right of making editorial
amendments in the final draft of the manuscript to suit the
journal's requirements.
2.
Chapter in the edited book:
1. Kumar, S. (2004),"CRM in Retail Banking", Edited book
- CRM in Banking - Concepts and Cases, edited by V V
Gopal, The ICFAI University Press, 2004, ed 1, ISBN 81-7881-383-1
Journal Article:
1. Baker, M. and Gilbert, A. (1977). "The impact of
Physically Attractive Models on Advertising
Evaluations", Journal of Marketing Research, 14(4),538555
Conference Proceedings Publication:
1. James, W. and Ryan, M. (2001). "Attitude Towards
Female Sports Stars as Endorsers", Proceedings of
ANZMAC Conference, Massey University, Auckland,
1-8
Paper presentation reference:
1. Darrat, F Ali and Zhong, Maosen (2001), "Equity Market
Integration and Multinational Trade Agreements: The
case of NAFTA", Presentation to the 2001 Annual
Meeting of Financila Management Associaiton
Internaitonal Toronto, Cnada, October 17, 2001.
Government Publication:
1. Ministry of Law, Government of India, (1960), The
Copyright Act, 14 of 1957, Delhi, pp.
Unpublished Manuscript:
1. Pringle, P.S., (1991), Training and Development in 90s,
unpublished manuscript, Southern Illinos University,
Diamondale, IL, pp.
Newspaper Article:
1. The new GM pact, (1998, July 28), Concord Tribune, p-1
Websites:
NCAA Committee on Sportsmanship and Ethical Conduct,
Retrieved February 9, 2004, from
http://www1.ncaa.org/membership/governance/assoc-wide/
sportsmanship_ethics /index.html
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Correspondence and proofs for correction will be sent to the
first author unless otherwise indicated.
Copyright:
Articles published in SBR should not be reproduced or
reprinted in any form, either in full or in part, without prior
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Accepted Papers and Reprints:
The Editor of SBR will inform the author(s) of the acceptance
of paper for publication in SBR. A Copy of SBR journal and 20
reprints of your paper will be sent to you at free of charge by
Editor, SINHGAD BUSINESS REVIEW (SBR), The
Research Journal of Sinhgad institute of Management, Pune.
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SINHGAD BUSINESS REVIEW (SBR)
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