Journal of Management

ISBN 1391-8230
JOURNAL OF MANAGEMENT

Volume VII No. 1 October 2011

Published by the Faculty of Management & Commerce
South Eastern University of Sri Lanka
Oluvil # 32360
Sri Lanka

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Editorial Board
Editor in Chief: Mr. AMM Mustafa
Associate Editors: Mr. MBM Ismail
Ms. Salfiya UA Jaleel
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Board : Dr. SMM Ismail
Mr. MBM Amjath
Mrs. Sareena UMA Gaffoor
Ms. Sulaiha Beevi Athambawa
Ms. FHA Rauf
Mr. MHM Hussain Ali
Mr. S Sivarajasingham
Mr. Ariff Samsudeen

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Journal of Management

The Journal of the Faculty of Management and Commerce

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JOURNAL OF MANAGEMENT
Volume VII No.1 October 2011

Contents Page No

Relationship between the Retail Shopping Behavior (RSB) of 1 - 11
Fast Moving Consumer Goods (FMCG) and Business Performance (BP)
in Ampara Coastal Belt (ACB), Eastern Province (EP) of Sri Lanka (SL)
Ismail, M. B.M.

Information Technology Change and Employees Attitude: 12 - 23
An Empirical Examination in Small & Medium Scale
Industries (SMI) in Ampara District.
MAC.SalfiyaUmmah

Gender Imbalances in University Admission in Sri Lanka 24 - 35
S.M.Ahamedlebbe

Transforming Self - Help Groups (SHGS) to Successful 36 - 54
Micro Enterprises the Prospects And Imperatives
M.Sivasubramanian and Dr.M.I.Saifil Ali

Effective Communication strategies to mobilize Human Resources 55 - 64
in Popularising Government Health Projects: A field study
Prof.NandiniLakshmikantha

Dual Career Family Life Style 65 - 73
Dr.K. Uthayasutiyan and S. Gunapalan

An Empirical Analysis Of The Twin Deficits 74 - 92
Evidence From Sri Lanka
S.Sivarajasingham** and N .Balamurali*

Assessing Business - IT Alignment Maturity : Evidence from selected 93 - 101
companies in Sri Lanka
Ilmudeen, A

A Case Study of Corporate Social Responsibility in Nashik MIDC 102 - 114
Ms. Reena Patel
Tamil Selvi J

Journal of Management Guidelines for Authors / Contributors 115 - 117
Journal of Management, Vol. VII, No.1 Relationship between.

1
Vol. VII.No.1.October 2011, pp. 1-11

Relationship between the Retail Shopping Behavior (RSB) of Fast Moving
Consumer Goods (FMCG) and Business Performance (BP) in Ampara Coastal Belt
(ACB), Eastern Province (EP) of Sri Lanka (SL)
Ismail, M. B.M.

Background of the research problem
(BORP): One retail shopper indicated unless
a particular brand is not available they buy
the same brand from other retail outlets
nearby. There are a number of retail outlets
in Oluvil. Retail outlets which are in the
similar store environmental conditions are
available road to road. Retailer shoppers
quickly visit other to other retail outlet
milieu. Further, some outlets do not have
some specific brands demanded by shoppers.
There is a symptom of unavailability of
brand. Retailers do not keep the all the brand
varieties demanded by shoppers. A varying
budget is assigned to purchase FMCGs.
Since price level is not steady retail shoppers
spend a varying amount of money on
FMCGs. Shoppers are concerned about cost
of FMCGs. Shoppers shop goods for some
reasons. They purchase willingly or
unwillingly. There are economic shoppers.
Retailers have to aware who are their
shoppers. Declining number of retail
shoppers, unavailability of some specific
brands, etc. results in dynamic sales and
profit for retail outlets. Performance of
outlets varies due to different shopping
behaviors.
Definition of the research problem (DORP)
and Research Question (RQ): Once a
particular brand is not available in a retail
shop shoppers shop the same brand nearby
other retail outlets. This statement clearly
indicates that retailers do not maintain all
sorts of product all the times. Retail
shoppers have alternative retail outlets for
their quick shopping. Retailers should know
which retail store milieu do shoppers prefer?
Further, some outlets do not have some
specific brands demanded by shoppers.
Retailers have unavailability of product line.
They should know availability of product
lines in retail store. A varying budget is
assigned to purchase FMCGs. This statement
indicates that retail shoppers like economy or
value for money. Since price level is not
steady they spend a varying amount of
money on FMCGs. Retailers should know
the reasons for retail shoppers shopping
behaviour. In other words, they should know
why shoppers shop?. Shoppers purchase
willingly or unwillingly. Although retail

2
shoppers like or dislike they shop due to
necessary items. Retail shoppers are
apathetic. Retailers should know the type of
retail shoppers. In other words, who are
retail shoppers?. Interview with retailers
reveals that number of retail shoppers is
declining during the past three years.
Discussion with wholesalers acting as
industry experts discloses there is a
reasonable chance to guess number of retail
shoppers have also increased during the last
three years. Some other retailers indicated
few more accounts than previous years. A
focus group of retail shoppers revealed
prices of daily consumed items (FMCGs)
increase. Retail shoppers are interested in
their value i.e. cheap price. However,
shoppers did not reduce the quantity
demanded by them.
Research problem lies on how is retailers
shopping behavior. In other words, is about
who are the retail shoppers?, why they
shop?, where (from which retail outlet
environment) they shop? and whether brand
is available for shopping?, Shopping
behavior results in dynamic sales and profit
(performance) for retail outlets.
Research objectives (ROs): In order to
answer to the above sub five research
questions, researcher set the following five
objectives.
- To identify type of retail shoppers
- To know motives or reasons for retail
shopping
- To find out retailers opinion about retail
outlet environment
- To identify availability of brands for
retail shoppers
- To know the relationship between
shopping behavior and business
performance

Significance of the research (SOR):
Retailing has expanded internationally
during the last decade. An unprecedented
number of retailers are exploring
opportunities for internationalizating their
operations (Feinberg, et al, 1995). The
globalization of retailing has been occurring
for many years. However, academic research
on international retailing has a relatively
short history (Burt,et al., 2003). As the
internationalization of the retail industry
continues to expand study of this trend has
increased. Retailers target markets. For
instance, age cohort consisting of 18 to 44
year old is roughly about 49 % of the
population and an obvious target market for
retail marketers (Lee, 1995). There are few
research avenues. Different researches are
found in different countries. Few researches
are found in Sri Lanka. There are few
researches in non- western contexts inclusive
Asian context specially, in Srilankan
contexts. Very specifically, It is true there
are rare or no researches in retail shoppers
beahviour in the context of Ampara District
in terms of the refereed journals referred by
the researcher. Therefore, this research fills
the gap by doing research in shopping
behavior on FMCGs and plays theoretical
and managerial (retailers) importance.
Research approach: Research is approached
in five ways such as objective evidences i.e.
relevant empirical findings of previous
studies, theories cum theoretical framewo

3
rks and analytical models i.e. graphical
models, research questions, research
hypotheses and specification of information
needed via literature reviews of journal
articles.
Shopping behaviour (SB):Consumer
Behavior (CB) consists of three distinctive
activities such as shopping, buying and
consuming (Tauber, 1972). Shopping
Behaviour (SB) is a distinct form of
consumer behavior (Assael, 1987). More
common shopping contexts or episodes are
shopping for groceries, household items,
clothing and gifts. According to Underhill
(1999), shopping is more than the simple,
dutiful acquisition of whatever is absolutely
necessary to ones life. It is more than grab
and go you need corn flakes, you find the
corn flakes, you grab corn flakes, you pay
corn flakes and go. Shopping today involves
multiple senses sight, smell, taste, touch
and hearing as the basis for choosing or
rejecting the brands, products, and more
generally, retail environments (Undelhill,
1999). This proposed research is particularly
about shopping for groceries which is termed
by several diverse names such as retail
shopping, grocery shopping, FMCG
shopping, retail store shopping. Retail chain
shopping and retail mall shopping are wider
in scope than retail shopping.
Retail shopping in Sri
Lanka:DinukaWijetunga and
RanjaniGoonatillake (2003) did a research
on Retail Banking. Ismail, M. B. M. (2010)
researched on determinants of retail
customer satisfaction in banking industry in
the Eastern Province of Sri Lanka. To the
best of knowledge with respect to the
refereed journals referred by the researcher,
there is no research paper/s published in this
topic.
Research framework: From the research
approach, constructs and indicators have
identified and the following research
framework is suggested by the researcher.

Figure 1 research framework/ model
This framework adopts some previous
model. However, Independent constructs
such as type of retail shopper and motives
for shopping differs from previous models.
Further, a new dependent construct is
derived from literatures.

Operationalization: Measures and items are
generated with citation from the identified
constructs and indicators. Measures and
items are based on indicators and constructs
derived from a lengthy literature review.
Questionnaire structure: It consisted six
components covering type of shopper,
motives for shopping, retail store
environment, product variable, and business
performance. Researcher measures type of
shopper (questions 10 to 13) using 7 point
agreement likert scale; measures motives i.e.
Business
performance
Type of retail
shopper
Motives for
shopping
Retail store
environment
Product
variables

4
reasons for shopping (questions 14 to 16)
using 7 point important likert scale;
measures retail store environment (questions
17 to 20) using 7 point good likert scale;
measures product variable (questions 21 to
22) using 7 point satisfaction scale and
measures business performance (questions
23 to 26) using 7 point high likert scale. All
these questions are closed ended questions.
In addition to these questions, demographic
profile has both open ended and closed
ended questions.
Pilot survey: Questionnaire was initially
prepared by researcher in English Language.
Researcher himself translated it into Tamil
language on his own. Then, the translated
questionnaire was checked by Tamil
Language fluent in South Eastern University.
Pilot survey was carried out in Oluvil for
easiness in few retail outlets. After pretesting
of the questionnaire, there was ambiguity in
few words in quickly capturing the idea from
the questionnaire. Enumerators highlighted
the words and they were modified in final
version of the questionnaire. Researcher
instructed to fill only 5 questionnaires per
day. Then, enumerators have to proof- read
again for the filled questionnaires. Data
collection lasted for about one month (24
days). 200 questionnaires have issued.
Response rate is 60%. Non response rate is
40%. Questionnaires were collected
cleaned; post coded and entered using a
Computer Applicant Assistant (CAA).
Research design: Research problem was
defined by analyzing research background.
In addition to that, researcher involved in
discussion with decision makers, interview
with industry experts, secondary data
analysis and qualitative research in
understanding and defining the research
problem. Researcher identified alternative
courses of actions, developed hypotheses,
isolated key variables and examined
relationship among the variables using
exploratory research design. Conclusive
research such as descriptive and causal
design was conducted. Definition of research
problem, development of hypotheses,
isolation of key variables and examination of
relationship among the variables by
exploratory design was verified
quantitatively using conclusive research
design. Only one sample of the respondents
was drawn from the target population. Data
were collected only once from this sample.
Hypotheses were tested. Relationships
between variables were also examined as a
causal research design.
Methodology: Target population
incorporates all Primary Sampling Units
(PSUs) and all Secondary Sampling Units
(SSUs). PSUs are research sites i.e. retail
stores which are located in Ampara Coastal
Belt. SSUs are the respondents i.e. retail
shoppers who shop from retail stores.
Representatively selected PSU are selected
research sites i.e. selected retail stores which
are located in Ampara Coastal Belt.
Representatively selected SSUs are selected
respondents i.e. selected retail shoppers who
shop from selected retail stores.
Sample size was selected using the following
formulae. * z
2
)/ D
2
. Sample size
was 120. Researcher faced difficulty in
getting a sampling frame for PSUs and
SSUs. Researcher tried to create a sampling
frame for data collection. Retailers helped in

5
giving the account holders names and cash
retail shoppers. Initial sampling frame i.e.
sampling list was prepared. Sampling frame
has been prepared by Undergraduates
studying in South Eastern University of Sri
Lanka (SEUSL) residing in Coastal Belt of
Ampara with the help of GramaNiladari in
each village in the Belt. Sampling procedure
is the multi- stage sampling. PSUs have been
sampled using Stratified sampling known as
geographical stratum. SSUs have been
sampled using Systematic Sampling -SS-
Every 65
th
customer has been sampled
(56209/854 = 65.8).
Data presentation and analysis procedure:
Data were presented using simple bar chart,
scatter plots and scree plots have been
plotted for univariate, bivariate and
multivariate data presentation. Frequency &
percentage have been calculated for
univariate analysis. Principal Component
Analysis (PCA) has been undertaken prior to
bivariate and multivariate analysis. Pearson r
correlation, regression analyses have been
performed as bivariate and multivariate
data analyses. Hypotheses have been tested
using Pearson r correlation and regression t
tests. F statistics has been used for
multivariate hypotheses testing. All these
were done using SPSS with the version of
16.0.
Findings and Conclusions: Of the shoppers,
75%, 71%, 71% and 65% were economic
shoppers, non- personal shoppers, non-
ethical shoppers and non- apathetic shoppers.
Shoppers ask for price when shopping. They
did not shop from relatives groceries, did not
feel about grocer and did not willfully shop
from grocer. 98% of the shoppers shopped
for convenience location (proximity). 76%
did not get courteous help from store
personnel. 100% shopped for nice dcor. 61
% of shoppers felt uninterestingly when they
entered into grocery. 67% of shoppers
opined that stores had not a wide range of
product i.e. choices. 62% expressed that
groceries did not sell goods at low price.
72% of groceries had not quality products.
76% of stores did not have available
alternative brands. 58% of shoppers were not
brand loyalist.

Correlation analysis has been carried out as
bivariate analysis after data reduction
technique of PCA. Values of Pearson r
correlation between type of shopper, motives
for shopping, retail store environment,
product variable and business performance
are 0.447, 0.153, 0.091 and 0.254. It shows
that all variable have poor relationships since
the values are below 0.5.
Hypotheses testing using correlation and
regression t test: The first set of hypothesis
indicated null is rejected and alternative one
is accepted. This indicates that types of
shopper are related to business performance.
Similarly, the fourth set of hypothesis also
indicated null is rejected and alternative one
is accepted. This indicates that product
variable is related to business performance.
Therefore, both types of shoppers and
product variables have the relationship with
business performance. The second set of
hypotheses indicated that null is accepted
and alternative one is rejected. i.e. motives
i.e. reasons for shopping is not related to
business performance. This does not mean
that there is no relationship between motives

6
i.e. reasons for shopping and business
performance. There is relationship. But,
there is no linear relationship between them.
The third set of hypotheses also indicated
null is accepted and alternative one is
rejected. i.e. retail store environment is not
related to business performance. This does
not mean that there is no relationship
between retail store environment and
business performance. There is relationship.
But, there is no linear relationship between
them.

Regression analysis has been conducted as
multivariate analysis. Regression model
equals Y0 (business performance) = 29.519
+ 10.785 x11 (type of shopper) + -.023 x21
(motives for shopping) + .013 X31 (retail
store environment) + .090 x41 (product
variable). Model summary indicates the vale
of R, R square and Adjusted R square are
0.656, 0.430 and 0.410 respectively. These
values indicate that there are relationships
between business performance, type of
shopper, motives for shopping, retail store
environment and product variable.

Multivariate hypotheses testing and F
statistics: F statistics is used to know
whether there is relationship among more
than two variables in the population. Null
hypothesis was there are no relationships
among types of shopper, motives for
shopping, retail store environment and
product variable and business performance
in toto. Alternative hypothesis was there are
relationships among types of shopper,
environment and product variable and
business performance in toto. Since the sig
(p) value is less than 0.05 we can reject the
null and accept alternative hypothesis.
Managerial implications for retail shoppers:
Retailers have to sell cheap items when
demanded by shoppers. They have to make
shoppers interested short term sales
promotions. Store shelves have to be filled
with a number of alternative options.
Retailers have to differentiate their goods
from others in terms of quality. Retailers can
arrange brand awareness programmes with
the help of the manufacturers. Values of
Pearson r correlation between types of
environment, product variable and business
performance are below 0.5 showing poor
relationships. Correlation and regression t
tests describe the same results. But, F test
proves the total relationship among all
variables. However, types of shopper,
environment, product variable and business
performance are related to business
performance. When retailers want to
improve their outlets performance such as
sales and profitability they have to
concentrate more on these two variables.
Limitations and opportunities for further
researchers: Researcher limits his research
scope into geographical area wise and field
wise. Research is carried out in Ampara
Coastal Region (ACR), Eastern Province
(EP) of Sri Lanka (SL) and in Retail
Shopping Behavior (RSB) of Fast Moving
Consumer Goods (FMCG) due to budget and
the time limitations. Number of PSUs is
taken by interviewing GN in respective

7
areas. These figures can vary. So, SSUs
depending on PSUs may sometimes be
underestimated or overestimated.
Demographic profile of the respondents has
not been analyzed since the aim of the
research is to find the relationship between
variables. Model summary indicates the vale
of R, R square and Adjusted R square are
0.656, 0.430 and 0.410 respectively. These
values indicate that there are relationships
between business performance, type of
environment and product variable. There can
be complexities in interpreting these results
which is out of the scope of the researcher.
Originality:A very few researches have been
carried out in the filed of retail shopping
behavior in groceries in ACB, Eastern
Province of Sri Lanka. This research fills the
gap for contributing to existing knowledge
and for generating new knowledge. Principal
Component Analysis -PCA- has been
applied in Ampara Coastal Belt as the
inception in this research field. Multi
regression model has been generated which
can be the key for the retail shoppers.

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11
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Journal of Management Vol. VII, No.1 Information Technology.

12

Vol.VII.No.1.October 2011.pp.12 23

Information Technology Change and Employees Attitude:
An Empirical Examination in Small & Medium Scale Industries (SMI) in Ampara District.

MAC.SalfiyaUmmah
Abstract
The environment of an organization is significantly undergoing continuous, rapid changes that have far
reaching effects on organizations and their management strategies. The significance of the study especially
to business organization in SMI sector, which are proactive to changes in Information Technology, could be
very high. SMI sector plays an important role in the economy of a country. This research focuses on two
aspects: The organizational change option - Structure, Technology, Physical setting and the people in
which the innovations in Information Technology (IT) as the most powerful change agent that create a big
challenge for SMI sector and the importance of innovations in IT in SMI that need more and more
innovative techniques in order to expand SMI sector. Many employees in developing countries such as Sri
Lanka still seem dissatisfied with the available information and they are reluctant to accept the change so
that they may leave the organization in due course. Retention of employees in SMI sector is the most
important thing in order to maintain their survival in the industry. So, this research aims to study the
employees attitude towards IT change and the association of between coping with change and the
employees intention to remain in the SMI sector. Accordingly, the findings might be immense value to
Small & Medium Scale Enterprises (SMEs) in developing countries, such as Sri Lanka, as much research
has not been conducted in this regard.

Key words: Information Technology, Coping with Change, Employees Attitude


13
Introduction
The environment of an organization is
significantly undergoing continuous, rapid
changes that have far reaching effects on
organizations and their management strategies.
Technological change is a constant phenomenon
in contemporary organizations. How to prepare
employees for technological change has
increasingly become an issue in SMEs. SMI
sector plays an important role in the economy of
a country. Accordingly, the findings might be
immense value to Small & Medium Scale
Enterprises (SMEs) in developing countries, such
as Sri Lanka, as much research has not been
conducted in this regard.
The only constant and omnipresent happening is
that of change, as change occurseverywhere and
all the time (French & Bell, 1995). No one has
the ability to resistchange and remain the same
once change occurred. Everything is subject to
change.Change will occur in organisations and
for whatever reason, organisations need tochange
in order to survive and to be effective in the ever-
changing technologicalenvironment (Durmaz,
2007: 1).
This research focuses on two aspects:
1. The organizational change option Structure,
Technology, Physical setting and the
people in which the innovations in
Information Technology (IT) as the most
powerful change agent that create a big
challenge for SMI sector.
2. The importance of innovations in IT in
SMI that need more and more innovative
techniques in order to expand SMI sector.

In creates in the processing of IT have dramatic
implications in the overall productivity of the
organizations. However many employees in
developing countries such as Sri Lanka still seem
dissatisfied with the available information and
they are reluctant to accept the change so that
they may leave the organization in due course.
Retention of employees in SMI sector is the most
important thing in order to maintain their survival
in the industry.
Technology can be classified into three types: (1)
product, (2) process, and (3) management
(Osman-Gani, 1996). Product technologies are
when ideas are incorporated in to a concrete
object. Process technologies are the sequential
steps used to produce a product or deliver a
service. Management technologies are the actions
taken to optimize resources to achieve business
goals ( Osman-Gani, 1991). It has been suggested
that the greatest impact of technology has been
on the nature of work and the abilities of
employees to meet the new requirements
(Osman-Gani& Jacobs, 2005). Responding to
information technology change places a greater
pressure on the strategic activities of SMEs in Sri
Lanka.
So, this research aims to study the employees
attitude towards IT change and the association of

14
between coping with change and the employees
intention to remain in the SMI sector.
The research problem focused here is lack of
willingness to cope with information technology
change. That is to what extend the employees
remain in the organizations in SMI sector after
coping with change programs in IT
interventions. Accordingly the research question
was Do employees in SMI organizations remain
after coping with changes in IT?
Hence, the aim of this investigation is to
study empirically the relationship of the
employees intention to remain in the
organization and coping with change.
Significance of the study
This research has less effort in the field of
organizational change. The research issue when
addressed properly and data might bring in an
answer to the question of Do employees in SMI
organizations remain after coping with changes in
IT? If the results of the statistical analysis enable
the acceptance of the hypothesis, the findings
might be of immense value for the SMI sector
intending to implement planned changes mainly
regarding IT.
Although the variables used in the conceptual
frame work are highly qualitative ones, an effort
is taken to analyze the data in a quantitative form.
This will add greater objectivity to the findings
rather than depending totally on qualitative
factors.
The significance of the study especially to
business organizations, which are proactive to
changes in IT, could be very high. Accordingly,
the findings might be of immense value to
organizations in developing countries, such as Sri
Lanka, as much research has not been conducted
in this regard.
Methodology
This research was an explanatory study. The
investigation of the study was the cross sectional
correlation examination. The study design was
the survey method using questionnaire as the
research tool and unit of analysis was done with
the individuals.
For this research the SMEs are referred as
business entities which have below 50 employees
working in the organizations. The research was
conducted among a sample of non managerial,
supervisory and functional level employees in
SMI sector. The sample was selected using
random sampling method with the following
primary business sectors, namely manufacturing,
wholesale and retail businesses, Finance, service,
construction, and others. The sampling frame of
this studywas 300 employees from 20-30 small
and medium sized organizations were selected in
Ampara district. It was possible to collect 264
questionnaires form the respondents. The SPSS
16.0 student version statistical software has been
used to analyze the data. And the correlation and
regression analysis were done mainly to test the
hypothesis.

15
Research Framework
Organizational change is a dynamic and often
chaotic process that may be characterized by a
multitude of events occurring simultaneously
(Schraeder, 2004). Models are valuable when
used as planning instruments to guide
organizational change initiatives. Employee
attitudes are important, as employers and change
managers are able to determine whether attitudes
are negative or positive and therefore the
necessary measures to steer employee attitude
towards change in a positive direction. According
to Dumaz (2007) the employees may not resist
the change but rather the way in which they are
treated in the change process.
The model developed for the present study
includes the constructs related to the attitudes
towards coping with organizational change and
intention to stay.
Thus, the conceptual model for this research is as follows;

Hence, the following hypothesis was developed.
H1: Coping with change in information
technology is positively related to intention
to stay.
Measures
This study is intended to examine the
hypothesized relationship between coping with IT
change as independent variable and intention to
stay as dependent variable.
Measuring Coping withIT change
Coping with IT change has been operationalized
as the degree to which an employee working in
SME copes to IT change. That is, to what extent
an employee in SME has a desire to cope with the
IT change. Hence, the attitude on coping with
change is a highly qualitative aspect, which has
been taken in to a scale to analyze quantitatively.
The overall attitude on coping is evaluated by a
self developed scale under the following
dimensions.
1. Receptivity to change:precursor to receptivity
to change and therefore will influence the level
receptivity to change
2. Readiness for change: will determine whether
employees in SMEs resist or accept the IT change
initiatives.
Cope with change
Intention to stay

16
3. Trust in management:refers to the extent to
which an employee may feel that trust in
management on all aspects.
4. Communication of organizational change:
refers to the extent to which an employee may
feel that an effective communication available to
access the information.
5. Training for organizational change:refers to
the extent to which an employee feel that the
availability for training for the intended change.
6. Change confidence: refers to the extent to
which an employee may have confident on
him/her to cope with the change.
7. Need for change: refers to the extent to which
an employee may feel that the need for change
8. Personal valence: refers to the extent to which
an employee may feel that they will or will not
benefit from the intended IT change process.
Personally beneficial
9. Organizational valence: refers to the extent to
which the organizations will or will not benefit
from the intended change process.
Thus, 30 question items were developed to
measure the 09 dimensions of this variable on a
five point scale that varies from strongly disagree
to strongly agree.
Measuring Intention to stay
Intention to stay being the dependent variable is
measured by a self developed scale consisting of
three items on a five point scale by the following
statement;
1. I am hesitant to leave this organization.
2. I am comfortable with the present
organization.
3. I would like to remain in the organization
throughout my working life.

Reliability Analysis of the Questionnaire
The questionnaires were originally developed by
the researcher for this particular study. A
reliability analysis was done to check the inter
item consistency reliability. The Cronbachs
Alpha was measured. Accordingly, the
Cronbachs alpha reliability coefficients of the
independent and dependent variables were
obtained. Accordingly, the alpha value for
intention to stay is 0.825 and for coping with
change is 0.952 which showed a good reliability.
Also the reliability coefficients of the dimension
of coping with change were obtained as follows:
Receptivity to change - 1.0 Readiness for change - 0.97

17
Trust in management - 1.0
Communication of organizational change - 0.903
Training for organizational change - 0.752
Change confidence - 0.727
Need for change - 0.809
Personal valence - 0.637
Organizational valence - 0.873
All constructs display good internal consistency.
Correlation of coping with IT change with
Intention to stay
Observing the correlations of independent
variable-coping with IT change with the
dependent variable- intention to stay, there is a
strong positive correlation of (r = 0.923, p
=0.000) and significant at 0.01 level.

Correlations

Coping_with_chan
ge Intention_to_Stay
Coping_with_change Pearson Correlation 1 .923
**

Sig. (2-tailed)

.000
N 264 264
Intention_to_Stay Pearson Correlation .923
**
1
Sig. (2-tailed) .000

N 264 264

18
Correlations

Coping_with_chan
ge Intention_to_Stay
Coping_with_change Pearson Correlation 1 .923
**

Sig. (2-tailed)

.000
N 264 264
Intention_to_Stay Pearson Correlation .923
**
1
Sig. (2-tailed) .000

N 264 264
**. Correlation is significant at the 0.01 level (2-tailed).

Mean time, the correlation between the dimensions of coping with change with the intention to stay derived
as follows; where p= 0.000 and significant at 0.01 level.
Receptivity to change - 0.466
Readiness for change - 0.911
Trust in management - 0.816
Communication of organizational change- 0.643
Training for organizational change - 0.833
Change confidence - 0.882
Need for change - 0.888
Personal valence - 0.896
Organizational valence - 0.881
The attitude towards readiness for change, trust
in management, training for organizational
change, change confidence, need for change,
personal valence, and organizational valence have
strong positive correlation with the intention to
stay of the employees in SMEs while the attitude

19
towards communication of organizational change
and receptivity to change showed a moderate
correlation with intention to stay of the
employees.
Regression
The overall model explains the fit for the
research. R
2
in the table given below shows this
aspect. This coefficient is a measure of how well
the regression equation fits the data. Here, we
have the R
2
is 0.852, hence, the regression
equation apparently have a perfect fit with the
data. So, we can predict our dependent variable
(intention to stay) with the independent variable
(coping with IT change). Here, P = 0.000 < 0.05.
So the model is significant and model exists.

Model Summary
Model R R Square Adjusted R Square
Std. Error of the
Estimate
1 .923
a
.852 .851 .24622
a. Predictors: (Constant), Coping_with_change

Coefficients
a

Model
Unstandardized Coefficients
Standardized
Coefficients
t Sig. B Std. Error Beta
1 (Constant) -.951 .127

-7.510 .000
Coping_with_change 1.259 .032 .923 38.827 .000
a. Dependent Variable: Intention_to_Stay


20
at first, if we consider the constant variable in the
equation. Its values; P = 0.000 < 0.05, hence,
significant to model. Coping with change is
considered; P = 0.000 < 0.05, hence, it is
significant to the model and explain the
dependent variable.
Hence, the following Model fit equation is derived.
Intention to stay = -0.951 + 1.259 coping with change
Hypotheses Testing
The most common policy in statistical hypothesis
testing is to establish a significance level, denoted
by , and to reject H
0
when the p value falls
below it. When this policy is followed, one can
be sure that the maximum probability of the type
I error is (Policy: when P-value is less than ,
reject H
0
) Here, the hypotheses are tested at 5%
confidence level ( = 0.05). P values are denoted
Sig. in the above Table.
The following table shows the rejection and acceptance of the hypothesis.
Variable Hypothesis P - Value = 5% H
0
H
A

Coping with
change
H
0
, H
1
0.000 0.05 Reject Accept
Source: Survey Data
The p value is for variable coping with change is
0.000, hence, the null hypothesis is rejected and
the alternative hypothesis is accepted as the P
value < . This means there is a positive
relationship between coping with change and
intention to stay. Also the result in correlation
table (Correlation coefficient =0.923; p=0.000)
support this hypothesis. Thus, the attitude of the
employees towards coping with change is a
predictor of the intention to stay of the employees
in small and medium scale enterprises.
Conclusion and Recommendation
Organizations continually embark on
programmes of organizational

21
change(Vakla&Nikolau, 2005). Change has
become a normal occurrence within organizations
in everywhere. In a competitive global economy,
organizations are forced to stay abreast with
technological changes in order to survive. The
small and medium scale enterprises are no
exception as global changes will ultimately result
in local changes. The change taking place is
affected by the rapid advancement in technology
and convergence of computing, communication
and information (Visagie ,2010) Therefore only
organizations that are ready for these changes
will survive.
IT innovations in organizations is to a large
extent sustainable by its own institutional forces,
irrespective of contribution to the process of
organizational change (Chrisanthi, A, 2000).
The researcher developed a conceptual model that
shows the association between employees
intention to stay in the organization and their
attitudes towards organizational change.
In order to improve the chances of success of an
organizational change initiatives, change
managers will have to provide proper change
communication pertaining to the intended change
initiatives. Poorly managed change
communication could result in rumors, resistance
to change, the exaggeration of negative aspects
of change and ultimately a crisis
(Eleving&Gravenhorst B 2009). Training will
have to be provided on an ongoing basis in order
to prepare employees for the intended IT change
as training for change may minimize the
employee fear and feeling of uncertainty.
According to the findings, it is proved that there
is a significant strong positive relationship
between the attitude towards coping with IT
change and the intention to stay of the employees
in SMEs. Accordingly, 85.2% of the variance in
intention to stay in SMEs after coping with IT
change programs was significantly explained by
coping with change in this study, still leaves
14.8% unexplained. In other words, there are
other additional variables that are important in
explaining self-employment intention that have
not been considered in this study. So, further
research might be necessary to explain more of
the variance in intention to stay after coping with
change.
It is suggested that the SMEs implementing IT
change should take into account the findings of
the present study and attempt to address the issue
of employee wellbeing by actively ensuring that
the increased demands being placed on
employees, as a consequence of the change
process are counteracted with sufficient support.
By doing
Implication for Future Research

22
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Information, Communication, and Uncertainity
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Journal of Management Vol. VII, No.1 Gender imbalances.

24

Vol.VII.No.1.October 2011.pp. 24 35

Gender Imbalances in University Admission in Sri Lanka

S.M.Ahamedlebbe
Senior Lecturer in Economics
Department of Social Sciences

Abstract
Liberalization policy has been associated with rising female labour force participation in Sri Lanka.
Despite the suggestive government of Sri Lanka from independence has been giving higher priority for
education, there could be seen gender imbalances in university entrance. This study is an attempt to
analyze the gender development in university education and to find the gap in gender in the university
admission in different fields in Sri Lanka. This is an analysis with the use of secondary data sources
collected from Department of Census and Statistics, Central Bank of Sri Lanka and University Grant
Commission. Finding shows that the qualified students numbers for university education has been
increasing year by year. As the eligible number of female students for University education is larger than
male students, university enrolment of female has significantly increased from academic year 1942 to
date in Sri Lanka. The finding further shows that the percentage share of female entrance to the total
number of qualified female students is higher than male students only for arts course. However, the
percentage share of female admission to the total number of eligible female students is lower than the
male admission for commerce and science fields. Thus, female students entrance is higher for arts course
and lesser for commerce and science courses when compared to male students.

Key words: Gender Development, Gender gap, university enrolment, students eligibility


25

Introduction
The total population of Sri Lanka is 20.6
million (2010) and the average annual
growth rate of population of the island is 1.0
per cent in 2010. Sex ratio of total
population in Sri Lanka is almost equal. The
percentage share of male and female
population to the total population is 49.6
percent and 50.4 percent, respectively, in
2008. It could be seen that gender disparities
are spread all over the world in all sectors
and divisions. This is higher in developing
countries than in the developed countries.
Global community, in general, has paid an
attention on gender issue only after 1960s.
All suggestive governments in Sri Lanka
have also concentrated on human
development from independence in order to
enhance socio economic development in the
country. Hence, Human Development Index
(HDI) of Sri Lanka has improved 0.658 in
2007 and Sri Lanka ranks 91 among 169
countries in the world. However,
Comparison with SAARC countries, Sri
Lanka achieved highest position in HDI. As
result of free education and health policies,
literacy rate, life expectancy and mortality
rate have considerably improved in Sri
Lanka. Literacy rate of male and female is
92.8 and 90.0, respectively in 2009. Infant
mortality rate per live birth was 8.5 in 2007
(Central Bank of Sri Lanka, 2010).

Understanding gender issues can help to
reduce unintended negative inputs of
development programs. Internationally Sri
Lanka ranks mid-way on the United Nation
Gender-Related development Index (80 out
of 144 countries). In 2001 life expectancy at
birth for women is 75.5 years compared to
69.6 for men. Sri Lankas gender
achievements are the dividends of extensive
social welfare programs for free education,
free health care and free food rations that
have been implemented by

successive government since political
independence in 1948 (Women in
Development-WID, IQC, 2004) There has
been a momentous change from
independence in Sri Lanka. While
government policy was inward strategy in
the early and middle part of 1970s, it has
been followed outward strategy from
liberalization policy in 1977 in Sri Lanka. It
is to be noted that in the view of all
development policies in the recent past were
related to women labourersparticipation in
Sri Lanka, in general, garment sector,
plantation sector and income from Middle

26
East countries depend on women labourers
income in particular.

The last twenty years have seen several
changes in the domestic and international
economic environments that have had a
profound impact on Sri Lankas labour
market. Sri Lanka has been a substantial
influx of women into the labour market
during the last three decades, reflecting a
strong and growing interest in labour force
participation among women. Economic
policy liberalization in Sri Lanka has been
associated with rising female labour force
participation as in many other developing
countries. New employment opportunities
for women have opened up mainly in the
manufacturing and service sectors, while
significant numbers have migrated overseas
for employment (Gunatilaka, 1999).
While womens Bureau of Sri Lanka was set
up government of Sri Lanka in 1978, the
president of Sri Lanka appointed National
Committee of Women NCW) in 1993 to be
a monitoring body for the womens
character (WID, IQC, 2004). And also
Ministry of women Affairs was started by
Sri Lankan government in 1983. The above
all activities of Sri Lankan government have
raised womens role in every sector in Sri
Lanka. Thereby, women unemployment rate
has come down from 23.4 percent in 1990 to
7.7 percent in 2010. Female employment
rate went up from 83.6 percent in 1997 to
92.3 percent in 2010 (Central Bank of Sri
Lanka, 2010).

Government of Sri Lanka takes various steps
implementing gender balance in every
sector. As a result, the role of female
participation in education, employment,
Politics and also other sectors has increased
from last three decades. However, female
participation in education is higher than that
of other sectors. Despite the government of
Sri Lanka has been giving higher priority for
education, there is also a gender inequality
in university entrance in Sri Lanka. The
share of enrolment and eligibility of female
students for university education has
increased every year than in the share of
male students. However, female students
have not received equal percentage share to
their total number of eligibility for
university education as entered male
students. Therefore, there could be
seengender differences in university
admittance in Sri Lanka. But, government of
Sri Lanka has given equal rights to enter
(male and female students) for university
education and qualified students are

27
admitted to the universities on the basis of GCE (Advanced Level) results.
Objectives of the study
- To show the trend of female and
male students enrolment for
university admission,
- To explore the gender development
in university education in Sri lanka
- To find gender gap in university
entrance in Sri Lanka.

Data Analysis
A descriptive analysis was done using
secondary data sources collected from
Department of Census and Statistics, Central
Bank of Sri Lanka, University Grant
Commission. The all island gender wise data
in regard to enrolment, eligibility and
admitted students was collected and used for
this analysis.
Results and Discussion
From free education system implemented in
1942, level of education not only male but
female education has also significantly
increased in Sri Lanka. Rapid expansion of
schools coupled with more teachers being
appointed to the primary and secondary
level of education has significantly
improved in Sri Lanka. Limited number of
universities and lack of other facilities in
universities have restricted students
admission. However, total number of
eligible students for university education
increased annually. It could be understood
that total number of eligible female students
is larger than male students. Therefore,
female university enrolment significantly
increased from 1942 to date in Sri Lanka.
Table - 1 indicates the enrolment of male
and female students for university education.
According to the table1, university
enrolment of female students from academic
year 1942/43 to date has been increasing,
while the share of male students enrolment
decreases.

Table 1 .University Enrollment in Sri Lanka, 194243-2002/03
Academic Year Gender Enrolled Percentage

1942/43
Male 813 89.9
Female 91 10.1
Total 904

1952/53
Male 1752 78.5
Female 480 21.5
Total 2232

1962/63
Male 4541 72.4
Female 1729 27.6
Total 6270

28

1972/73
Male 6907 57.3
Female 5143 42.7
Total 12050

1982/83
Male 11390 63.2
Female 6619 36.8
Total 18009

1992/93
Male 16848 54.7
Female 13916 45.23
Total 30764

2002/2003
Male 28012 46.89
Female 31728 53.67
Total 59740
Source: Statistical Abstract of the Democratic Socialist Republic of Sri Lanka

Figure 1 obviously shows that the trend of
male and female students enrolment during
last six decades. Although percentage share
of female students at the beginning was very
low, it has gradually increased. Thus, female
enrollment went up nearly four times while
male enrollment has decreased by 46 percent
during this period. In academic year 2002/03
female enrolment is larger than male
enrolment. This scenario clearly indicates
that a gender imbalance in higher education
has been reduced or gender balance has been
improved.

Figure 1.Trend of University Enrollment in Sri Lanka, 1942/43-2002/03

Source: Same as table 1.

Total Number of Eligible Students for
University Education
As the total number of Advanced Level
students' continuously increases every year,
the total number of eligibility for university
education has also increased up to now in
Sri Lanka. Table 2 shows the gender wise
total number of eligible students and
1942/43 1952/53 1962/63 1972/73 1982/83 1992/93 2002/03
Male 89.9 78.5 72.4 57.3 63.2 54.7 46.9
Female 10.1 21.5 27.6 42.7 36.8 45.2 53.6
P
e
r
c
e
n
t
a
g
e

University Enrollement

29
admission for university education in Sri
Lanka. Total number of eligible students
was 34,491 in academic year 1989/90 but it
was 119,955 in academic year 2006/07.

Table2. Total Students for University Education in Sri Lanka, 2002/03-2006/07

Academic
Year
Gender Eligible Admitted Percentage
1989/90 M 15021 3766 25
F 19470 2697 14
Total 34491 6463 19
1991/92 M 16976 4651 27
F 25478 4249 17
Total 42454 8900 21
1993/94 M 23275 4545 20
F 31869 3470 11
Total 55144 8015 15
1995/96 M 23689 4979 21
F 33014 4211 13
Total 56703 11381 16
1996/97 M 28136 5649 20
F 42246 5732 14
Total 70382 11381 16
1999/00 M 27437 5720 21
F 45985 6085 13
Total 73422 11805 16
2001/02 M 33722 5616 18
F 57954 6528 12
Total 91676 12144 14
2004/05 M 43740 6851 15.7
F 67985 7669 11.3
Total 111725 14520 13.5
2006/07 M 45310 7471 16.5
F 74645 9725 13
Total 119955 17196 14.3
Source: Statistical Abstract of the Democratic Socialist Republic of Sri Lanka

Therefore, students numbers has increased
by 85,464 or 248 percent during last two
decades. However, increasing rate of female
students is higher than the male students.
Total number of eligible male and female
students was 15021 and 19470, respectively
in academic year 1989/90. But this numbers
went up by 30,289 and 55,175 in academic
year 2006/07, respectively. So, male and
female students increased by 201 percent
and 283 percent, respectively, during this
period (see figure 2). This figure reveals that
female participation in higher education is

30
moving up than that of male students. Figure
2 also shows the gap between male and
female eligible students is continuously
widening from academic year 1989/90 to
2006/07.

Figure 2.Trend of Eligible Students for University Education in Sri Lanka, 1989/90-2006/07


It is to be noted that the government of Sri
Lanka has been increasing the degree of
total admission for university education in
order to reduce the gap between total
students eligibility and admission for
university education. Total number of
admitted students was only 6463 in
academic year 1989/90 and it increased to
17,196 in academic year 2006/07. However,
the gap between total eligibility and
admission increased from 28,028 in
academic year 1989/90 to 102,759 in
2006/07. Figure 3 shows the gap between
total number of eligibility and admitted
students for university education in Sri
Lanka. This figure clearly shows that the
total admission was not granted at least one
fifth of total numbers of eligible students for
every year. The trends of eligible number of
students are higher than the admitted
number of students during the period of last
two decades. Therefore, despite the
government of Sri Lanka increases total
university admission for every year, the
number of eligible students is also on the
rise. The percentage share of total number of
admitted students to the total eligible
numbers was 19 in academic year 1989/90
but it is only 14.3 in 2006/07. However, the
total number of admitted students has
increased between academic year 1989/90
and 2006/07.

N
u
m
b
e
r

o
f

S
t
u
d
e
n
t
s

Male
Female

31

Figure 3.Total Number of Eligible and Admitted Students for University Education in Sri
Lanka, 1989/90-2006/07


Gender Imbalances in University
Admission in Sri Lanka
According to the data, female participation
in education rapidly increases in Sri Lanka.
Figure 2 depicts that eligible number of
female students for higher education has
been noticeably moving up in compared to
male students. However, there is an
imbalance in male and female students
admittance. Table 3 shows that field wise
university admission from academic year
2002/03 to 2006/07. According to the table
the percentage share of female admission to
the eligibility of female students are higher
than male students only for arts course. In
contrast, the percentage share of admitted
male students to their total number of
eligible students is higher than the female
admission for commerce and science field.
Although female students are admitted 8.2
percent to their total eligible numbers, male
students are admitted only 7.7 percent for
arts field in academic year 2002/03. Table 3
shows that percentage of admitted female
students for Arts course are higher than male
students from 2002/03 to 2006/07.

Eligible Admitted

32
On the other hand, the percentage share of
male admission for commerce and science
division is higher for every year. The
admission for male students for commerce
and science courses is 10.6 percent and
37.1percent, respectively, in 2002/03. In
terms of female students, it is 8.1percent and
25.4 percent in the same academic year. The
percentage share of female admission to
their total number of eligibility is lesser than
the percentage of male admission.
Therefore, female students entrance is
higher for arts course and lesser for
commerce and science courses when
compared to male students. This scenario
can be seen in all academic years in Sri
Lanka.

Table 3.Eligibility and Admission of Students for University Education in Sri Lanka,
2002/03-2006/07
Arts Commerce Science
Academic
Year Gender Eligible Admitted % Eligible Admitted % Eligible Admitted %
2002/03 M 15765 1217 7.7 11932 1267 10.6 9271 3441 37.1
F 37864 3111 8.2 15070 1227 8.1 8524 2168 25.4
Total 53629 4328 8.1 27002 2494 9.2 17795 5609 31.5
2003/04 M 13620 1201 8.8 13013 1457 11.2 8558 3595 42
F 34009 3115 9.2 16414 1470 9 7828 2558 32.7
Total 47629 4316 9.1 29427 2927 9.9 16386 6153 37.6
2004/05 M 15186 1275 8.4 15444 1510 9.8 13110 4066 31
F 36576 3259 8.9 18895 1490 7.9 12514 2920 23.3
Total 51762 4534 8.7 34339 3000 8.9 25624 6986 27.2
2005/06 M 15331 1535 10 16091 1566 9.7 14080 4797 34.1
F 38245 4039 10.6 21037 1667 7.9 13986 3689 26.4
Total 53576 5568 10.4 37128 3233 8.7 28066 8486 30.2
2006/07 M 14717 1330 9 17222 1499 8.7 13371 4642 34.7
F 38865 4519 11.6 22536 1753 7.8 13244 3453 26.1
Total 53582 5849 10.9 39758 3252 8.2 26615 8095 30.4
Source: Central Bank of Sri Lanka, 2008.

Gender Gap
Female admission for university education is
less secure than male Students admission.
To measure the gender gap, the percentage
of female admitted students is divided by
percentage of male admitted students in
every year. So, the ratio greater than one
indicates that female is overrepresented in
university admission. The ratio is less than
one indicates that female is
underrepresented in university admission.
Table 4 shows that gender gap for arts,
commerce and science courses from
2002/03 to 2006/07. According to the table

33
gender gap for arts course is greater than one
during last five academic years. This has
ensured that female admissions are higher
than male admission for university
education in Sri Lanka. The female to male
ratio of arts course was 1.06 and 1.28 in
academic year 2002/03 and 2006/07,
respectively. This means admission of
female students for arts division enlarged in
2006/07 than that of previous academic
years. As a result, gender gap has also widen
from -0.06 in 2002/03 to -1.28 in 2006/07.

Table 4.Gender Gap for University Admission in Sri Lanka, 2002/03-2006/07
Female to Male Ratio Gender Gap
Academic
Year Arts Commerce Science

Arts

Commerce

Science
2002/03 1.06 0.76 0.68

-0.06 0.24 0.32
2003/04 1.04 0.8 0.77

-0.04 0.20 0.23
2004/05 1.05 0.8 0.75

-0.05 0.20 0.25
2005/06 1.06 0.81 0.77

-0.06 0.19 0.23
2006/07 1,28 0.89 0.75

-0.28 0.11 0.25
Source: Computed from Secondary Data of Central Bank of Sri Lanka, 2008

Figure 4.Gender Gap in University Admission in Sri Lanka, 2002/03-2006/07


However, according to the indicator gender
gap for commerce and science fields are less
than one throughout the years. This clearly
shows that female is underrepresented in
university entrance for commerce and
science courses in Sri Lanka. Female
students get admission for commerce 76
percent as much as male students in 2002/03
and this has reduced to 89 percent in
2006/07. Hence, gender gap has declined
from 0.24 to 0.11during this period.

On the other hand, while 68 percent of
female students have received admission for
science course in 2002/03, it has uplifted 75
percent in academic year 2006/07. Thus,
gender gap also declined from 0.32 to 0.25
during this period. Despite the gender gap
F
e
m
a
l
e

t
o

m
a
l
e

R
a
t
i
o

Academic Year
Arts
Commerce
Sceince

34
for commerce and science has declined from
academic year 2002/2003 to 2006/07,
female to male ratio is still less than one.
Therefore, there is not gender balance in
admission for commerce and science
courses.

Conclusion and Recommendation
This is a study undertaken by the researcher
on gender difference in university admission
in Sri Lanka. Free education system has
considerably improved level of education
throughout the country. Although there is a
remarkable improvement in primary and
secondary level of education, it could not be
seen in tertiary education (university
education) in Sri Lanka. Lack of university
facilities in Sri Lanka has constrained
admission for university education.
However, total number of eligible students
for university education has been rising
annually. Increasing rate of qualified
number of students is higher than the
increasing number of admission for
university education. As the eligibility of
female students is larger than the male
students, the enrolment of female students to
the university significantly increased from
academic year 1942 to date in Sri Lanka.

Since the female participation in education
rapidly increases in Sri Lanka, qualified
number of female students for university
education has been noticeably moving up.
Total admission for male students was
higher until 1995/96 than in female students
admission. But, female entrance has gone up
from 1996/97 to date. However, the
percentage share of female entrance to their
total eligible number is higher than male
students only for arts field. In contrast, the
percentage share of male entrance to their
total number of eligibility is higher than the
female entrance for commerce and science
courses.
As the female to male ratio of arts field is
greater than one, female is overrepresented
in university admission for arts course. In
dissimilarity, this ratio was less than one for
commerce and science courses. Thereby,
this clearly shows that female is
underrepresented in university entrance for
commerce and science courses in Sri Lanka.
Hence, this illustrates female students have
received more chances for arts division and
less chances for commerce and science
fields. In spite of Sri Lankan government
gives equal rights for male and female
students for higher education, students are
selected to the universities on the basis of
GCE (A/L) results in every particular year.
According to the rank students whoever
male or female will be admitted to the
universities. However, this study found that
male students have competed female
students in commerce and science streams

35
rather than arts division. As a result, there is
a gender imbalance in terms of tertiary
education (university education) in Sri
Lanka in the field of Arts, Commerce and
Science.
The concept of gender has captivated the
attention of many scholars in the
contemporary world. The role of female
participation in every sector is significantly
on the rise in Sri Lanka. But, lack of higher
education facilities restricts the university
admission. Hence this scenario leads to
gender imbalance in Sri Lanka. So, it is
essential for the government to formulate a
policy to ensure the equal representation of
students to reduce the gender imbalance or
gap. This can be done only with an
expansion of university system.

References:
Central Bank of Sri Lanka (2008),
Economic and Social Statistics of Sri
Lanka, Central of Sri Lanka

Central Bank of Sri Lanka (2007),
Annual Central Bank Report, 1990-
2007, Central Bank of Sri Lanka, Sri
Lanka.
Gunatilaka, R (1999), Labour
Legislation and Female Employment in
Sri Lankas Manufacturing Sector,
Institute of Policy Studies, Colombo, Sri
Lanka.
Jayasundara, R. (2006), Entering New
Economic Period Gender Approach,

Economic Changes in Sri Lanka, Centre
for International Ethnic Studies,
Colombo.
Kabeer, N (1996), Gender, Demographic
Transition and the Economics of Family
size: Population policy for a Human-
Centered Development, United Nation
Research Institute for Social
Development, UNDP.
Journal of Management, Vol. VII, No.1 Transforming Self Help.

36
Vol. VII.No.1.October 2011, pp. 36- 54

TRANSFORMING SELF HELP GROUPS (SHGS) TO SUCCESSFUL MICRO
ENTERPRISES THE PROSPECTS AND IMPERATIVES
* M.Sivasubramanian **Dr.M.I.Saifil Ali

* Research Scholar, Department of Management Studies, SathyabamaUniversity, Chennai.
** Associate Professor, School of Management Studies, B.SAbdurRahmanUniversity,
and Research Supervisor, SathyabamaUniversity, Chennai..
ABSTRACT
The two prime objectives of the Millennium Development Goals are eradication of
poverty and attainment of equality of gender. Even though, the world has witnessed an
expeditious economic growth in the past, it was unbalanced because the gap between the
covered and uncovered primary sectors of the society. This ultimately questioned the
sustainability of the growth rate. Now, the global economy is facing recession and it has
not reached the gross root levels of the excluded sectors of the society. In India, the GDP
growth rate has almost touched double digits; whereas the agricultural sector has
recorded a growth rate of less than 3%. Therefore, there was a pragmatic shift from
farming sectors to non-farming sectors. One of the successful concepts to have emerged
in 1990s is the Self Help Groups (SHGs from now on). The emergence of self help
groups has created a positive impact with the bankers. Tamilnadu has recorded the
second highest growth in SHGs, at all India level, with the number of SHGs crossing 3.65
lakhs, of which nearly 70% are from rural areas. SHGs has helped farmers to come out
of the clutches of local moneylenders, to acquire skills such as communication,
leadership, financial literac etc. These SHGs are slowly becoming successful micro
enterprises with competition from the corporate sector.This paper, a part of the research
study undertaken by the authors attempts to analyze the prospects, problems and the
requisites of transforming SHGs to successful Micro-enterprises and suggests ways and
means for a smooth transition.
Key Words:Micro Enterprises, Self Help Groups (SHGs), Non-farming, Rural
Employment Scheme.

37
Introduction:
World is facing a global meltdown and
as a result the need for a balanced
regional growth has been realized.
Hence, the Micro and Small Enterprises
(MSEs) have been accepted as the
engines of sustained economic growth
for promoting equitable development.
The MSEs constitute over 90% of total
enterprises in most of the economies and
are credited with generating the highest
rates of employment opportunities and
account for a major share of industrial
production and exports. In India too, the
MSEs play a pivotal role in the overall
industrial economy of the country. It is
estimated that in terms of value, the
sector accounts for about 39% of the
manufacturing output and around 33%
of the total exports of the country. In the
recent years the MSE sector has
registered higher growth rate compared
to the larger industrial sector. The major
advantage of the sector is its
employment generating potential at low
capital cost. This sector employs an
estimated 31 million persons spread over
12.8 million enterprises and the labor
intensity in the MSE sector is estimated
to be almost 4 times higher than the
large enterprises.
Methodology
This paper forms part of the research
conducted with SHG members who are
running micro enterprises, either
involved in trading or producing goods
in Thiruvallur District, Tamilnadu, to
study the prospects and imperatives of
successful micro entrepreneurs formed
by women self help groups. The primary
data were gathered through a structured
schedule, from a statistically treated
sample size of 120 women respondents
from SHGs that are operational in the
district. The secondary sources of data
include published work of scholars and
experts in the field. The gathered data
were analysed to test the hypotheses
formulated, and to draw conclusions.
Micro Enterprises - The Current
Scenario
After foreseeing the development of
micro enterprises, Indian Government
merged two major ministries namely
Agro and Rural, Small Scale Industries,
into Ministry of Micro, Small and
Medium Enterprises and also
introduced a separate Act for MSME.
According to the Micro, Small and
Medium Enterprises Development Act
2006, an enterprise could be classified as
micro enterprise manufacturing, if the

38
investment in plant and machinery does
not exceed twenty five lakhs and micro
enterprise -service if the investment does
not exceed ten lakhs.
In developing nations like India, macro
economic problems such as population
explosion, poverty alleviation etc. can be
solved using production made by masses
approach than by mass production
(Ganesan N and Dr Mohammad Jaffar,
2004). Even unorganized farm sector can
become a potential tool to reduce the gap
between urban and rural
(ArjunSengupta, 2007). Further, right
environment, providing accessibility to
smart capital and skills and creating
network relationship will help to develop
rural entrepreneurship in India (Shaik
Mohamed. N, 2004).
Micro enterprises are predominantly
played by SHGs, with strengths such as
regular and compulsory savings, very
high percent of recovery performance,
excellent financial discipline with better
transparencies (Manimekalai N, 2008).
The benefits of the micro finances are
directly and usefully given to the poor,
and it is their achievement (Jivan Kumar
Chowdhary). According to
Sudalaimuthu and Senthilkumar (2008),
savings habit, income generation, social
status and standard of living have been
registered by this system. Micro
enterprises by SHGs offer better
promises when compared to earlier
system because of its structure of easy
credit, savings and peer monitoring
(Jasmine 2008).
In addition to innovation and creativity,
the requirements such as comprehensive
market dynamics are to be promoted by
the micro enterprises (Chelladurai.M and
Thirumaran 2008). As regard financial
institutions, the products and services
offered by the banks need to be
developed in such a way that they are
adapted to the needs of the majority, at
affordable prices from time to time (Dr
K SrinivasaRao, 2008).
Therefore, Micro enterprises movement
has been viewed as an important
economic development strategy. This
paradigm is based on the premise that
gender discrimination is an economic
phenomenon, and therefore, the
generation of employment and income
through micro enterprises empower the
poor. The tiny business such as an owner
who starts the business in cities, towns,
villages is defined by micro enterprises.

39
They do not require the formal
establishments of these enterprises, but
they commence with minimum
investments. The members of the same
family are employed by the Micro
enterprises.
The tasks of Micro Enterprises are:
1. Exploring the prospects of starting
new enterprises with local resources.
2. Undertaking risk and handling of
economic and non-economic
uncertainty.
3. Introduction of new innovative
products or imitation of already
successful product in the market.
4. Developing soft and managerial
skills in running an enterprise.
5. Gaining knowledge about the
financial system.

The major constrains faced by Micro
Enterprises are:
1. Availing financial assistance
from Banks/FIs at better terms
2. Providing adequate security for
the loan.
3. Over dependence on intermediate
people.
4. Intensive competition.
5. Low mobility.
6. Family ties.
7. Lack of education.
8. Adverse affect of risk bearing.
The major gains for the developing
countries are:
1. Reduce unemployment.
2. Alleviation of poverty.
3. Equalities in regional
development.
4. Utilization of unutilized or under
utilized local resources.
5. Development of Entrepreneurial
skills.
6. Self sustained growth, with out
expecting assistance from
Government.

Self Help Group (SHG) An
Introduction
Self Help Group is a small
economically homogeneous and
affinity group of the rural poor,
voluntarily coming together for the
following reasons.
- Saving small amount of money
regularly.
- Mutually agreeing to contribute
to a common fund.
- Meeting their emergency needs.

40
- Have collective decision-making.
- Solving conflict through
collective leadership and mutual
discussion.
- Providing collateral free loans
with terms decided by the group
at market given rates.
The groups undertake the responsibilities
of delivering non credit services such as
literacy, health and environmental
issues. The habit of saving paves the
way to repay loans. SHGs empower the
women and train them to take active part
in socio economic progress of the nation
and make them sensitized, self made and
self disciplined citizens.
SHGs undertake entrepreneurial
activities at smaller level with minimum
capital requirements. In future, the
inbuilt strength of the SHGs, will pave
the way to undertake mega projects,
performed by joint stock companies,
public sector enterprises etc. SHGs have
the power to create a socio-economic
revolution in the rural areas of our
country. They have proved that they
could indeed bring about a change in the
mindset of the very conservative and
tradition bound people in rural areas.
Self help groups have paved the way to
bring the rural women into the main
stream of social and economic progress
of our country.

Self Help Groups in India
The Self-Help Group - Bank Linkage
Program initiated by National Bank for
Agricultural and Rural Development
(NABARD) in 1992 is perhaps the most
successful community development
initiative ever tried in India. It has been
acknowledged as the fastest growing and
the most cost effective Micro finance
initiative in the world. The pilot project
started in 1992, with a modest target of
linking just about 500 SHGs with a few
banks across the country, had crossed
the milestone of 1 million SHGs by 31
March 2004, and rose further to over 2.5
million by 31
st
March 2007. There is
growing recognition by banks that SHG-
Banking is a new dimension of quality
lending with minimum risks and low
transaction costs, both of the banking
system and the poor, so that, the
financial relationship between the banks
and the poor become lasting.

Besides the financial implications, the
other significant gains out of the Self
Help Group movement are the massive

41
community mobilization and women
empowerment in most parts of the
country. Owing to the grand success of
the program, now SHGs are at centre
stage in almost every poverty alleviation
program and developmental program
aimed at poor. SHGs have become the
development ambassadors of villages
and they symbolize the growing face of
rural India.

Self Help Groups in Tamil Nadu.
In Tamil Nadu, Rural Development
Department Tamil Nadu Corporation for
Development of Women is the nodal
agency. The program particularly aims at
development of the women and the various
other departments contribute equally in
their endeavor to reach out to the people.
Special convergence meetings of the
various departments are held periodically
to sort out the problems and they work in
union towards development of women. In
the formation of Self Help Groups by the
NGOs also, it is predominantly women,
who are covered, since it has been found
easy to reach out to them than the men
folk. The SHG members are provided the
skill up gradation training through the
departments / NGOs, etc. in their effort to
pursue economic activities.
Tamil Nadu Government spearheaded
Self Help Group (SHG) concept in the
country by forming SHGs Dharmapuri
district with the assistance of
International Fund for Agricultural
Development (IFAD) as early as
September 1989. Later SHG scheme was
extended to Salem and South Arcot
districts in the year 1991-92 and further
expanded to include Madurai and
Ramanathapuram districts in the year
1992-93.
The overwhelming success of the IFAD
project has paved way for the now
popularly known MahalirThittam
project, which was launched during
1997-98 with TN state Government
funding. This has happened in
Villupuram ,Dharmapuri (Krishnagiri),
Namakkal, Cuddalore,
Ramanathapuram, Madurai, Theni,
Karur, Virudhunagar, Salem, Thiruvarur,
Thoothukudi, Vellore and Tiruvallur
districts.
During 1999-2000 the scheme was
further extended to the districts of
Kanyakumari, Coimbatore, Dindigul,
Kancheepuram, Perambalur (Ariyalur),

42
Thanjavur and Nagapattinam. Finally, it
was extended to the city of Chennai in
the year 2001-02 to cover the entire
Tamil Nadu. This scheme was also
extended to youths for their
development. The stake holders of this
scheme include TN. Government
Agency (TNCDW), Voluntary
Organisations (VOs), Banks,
Government Departments, Panchayat
Raj Institutions (PRI) and Urban Local
Bodies (ULB).
As on 31
st
January, the number of SHGs
in Tamilnadu touched 3.88 lakhs,
covering 62.27 lakhs of women with a
savings amount of Rs. 2062.04 crores.
This study was carried out with SHGs in
Thiruvallur district, a newly formed
district bifurcated from the erstwhile
Chengalpattu district (on 1st January
1997), is located in the North East part
of Tamil Nadu. This district is divided
into 3 revenue divisions of Thiruvallur,
Thiruthani, Ponneri. This is further
divided into 8 revenue taluks, 46
revenue firkas and 14 development
blocks. There are 824 revenue villages,
12 Municipal Councils and 13 Special
Village Panchayats. The population of
the district as per 2001 census is 27.54
lakh with a density of population at 800
persons per sq. km.

Data Analysis and Inferences
The analysis of data was done under the
following categories.
A. Social status of the respondents
B. Economic status of the respondents
C. Profile of the group
D. Product details
E. Financial Details of the group

F. Marketing details

Social Status
Majority of the SHG members are
between 31-40 years of age, which is an
indication that women takes up
additional responsibilities as they grow
up. Even though the overall educational
qualification is low, most of the
respondents have been educated up to
middle school. The average number of
family members engaged in a SHG is
four. The pressure on women to join the
group of additional wage earners is said
to be obvious by the increase in the
number of family members joining the

43
group. In 40% of the cases the number
of dependents is two and they depend on
them for finance. The three member
dependence is 33.33%. People belonging
to backward and most backward
community are the major respondents.
Married persons form the chunk of the
respondents which indicate their need to
join in a group for their financial and
other needs (Table 5.1).
Table 5.1 SOCIAL STATUS
Age group years
Particulars Number %
20-30 15 12.5
31-40 60 50.00
41-60 38 31.67
50 and above 7 5.83
Total 120 100

Educational Qualification
Primary 29 24.10
Middle 65 54.20
High School & above 26 21.70
Total 120 100
No of Family Members
Up to three 24 20.00
Four 56 46.67
Five and above 40 33.33
Total 120 100
No of dependants
One 16 13.33
Two 48 40.00
Three 40 33.33
Four and above 16 13.33
Total 120 100.00
Religion
Hindu 95 79.17
Muslim 18 15.00
Christian 7 5.83
Total 120 100.00
Community
BC & MBC 82 68.33
SC/ST 38 31.67

44
Total 120 100
Marital Status
Married 109 90.83
Unmarried 11 9.17
Total 120 100.00

Economic status of the respondents
A majority of the respondents have their
monthly family income of less than Rs
5000/-. It shows that the beneficiaries
are from economically weaker section of
the society. It is understood that the low
level of income has forced them to
borrow from local money lenders, who

normally charge high rates of interest.
After joining the group they felt that
their credit worthiness has improved and
they are also relieved from the clutches
of local money lenders. Also, it is found
that most of the respondents are not
working in any other places, hence, they
dont have alternative sources of income
(other than income from SHG) (Table
5.2).
Table 5.2 ECONOMIC STATUS
Family income per month
Up to 2000 37 30.83
2000-5000 59 49.17
5000-and above 24 20.00
Total 120 100.00
Whom they approach for financial needs
Neighbors 9 7.50
Local money lender 98 81.67
Others 13 10.83
Total 120 100.00
Based on the improvement in credit worthiness
Yes 110 91.67
No 10 8.33
Total 120 100.00
Alternative source of income. Other than from SHGs.
Yes 17 14.17
No 103 85.83
Total 120 100.00

45

Profile of the group
Mostly the groups are having members
between 11-15, which is good for
operation. A majority of the groups were
formed after 2004. Regarding the
association with NGOs, only less than
40 % is having associations with NGOs,
that has helped them in the formation
and training of the members to develop
their skills. The remaining 60% of the
groups were formed with the help of
either Government or neighboring
SHGs. Most of the respondents are
animators, who were involved in the
business as well as in motivating the
members to carry out the business and
getting access to banks. They also have
better knowledge about the functioning
of their groups. As regards the nature of
training programs, only 35.93 % of the
respondents have undergone training for
developing products. General training
was taken up by 39.17% of the
respondents. (Table 5.3)

Table 5.3 PROFILE OF THE GROUP
Number of members
11-15 66 55.00
16-20 54 45.00
Total 120 100.00
Year of establishment
Up to 2003 24 20.00
2004 and 2005 34 28.30
2006 and 2007 62 51.70
Total 120 100.00
Based on the association with NGO
Associated 47 39.17
Not Associated 73 60.83
Total 120 100.00
Role played by the respondent in the group
Animator 67 55.83
Cashier 15 12.50
Member 38 31.67
Total 120 100.00

46
Training undergone by the respondent
Product development 43 35.93
General training 47 39.17
Others 30 25.00
Total 120 100.00

Product details
Majority of the SHG respondents are
involved in manufacturing products such
as weaving of silk, cotton sarees, craft
items like jewelry (non-gold), candle,
toys and agarbathies. Nearly 25 %
depend on job order from middlemen for
the works like design works in tailoring
of bulk garments - cloths, Churidhars
etc., Only a small number of group are
trading edible products, products like
sarees, provisional items., retail sales
like flowers, Tender coconut etc. A
majority of the respondents decide the
selection of products based on their
earlier experience or imitate the
neighboring SHGs. Only few decide on
the basis of either the training given by
NGOs/ Government or the contacts of
middlemen. As regards participation in
the trade fair, only a small number of the
respondents participated in the trade
shows conducted by the Govt. or By
NGOs or themselves, mutually.
However, majority of the groups were
not aware of the trade shows or they
were lately aware of such trade shows .
Therefore, they could not find time to
prepare for the same (Table 5.4).
Table 5.4 PRODUCT DETAILS
Nature of products
Food Based 17 14.16
Job Order 26 21.67
Manufacturing 50 41.67
Retail 10 8.34
Trading 17 14.16
Total 120 100.00
Reason for selection
Personal Experience 85 70.83
Government / NGO 24 20.00
Middle man 11 29.17
Total 120 100.00

47
Participation in trade exhibition
Yes 49 40.83
No 71 59.17
Total 120 100.00

Financial Details of the group
Regarding loan assistance from banks,
only 50% of the respondents have
availed loan from banks. As far as Govt.
assistance is concerned, most of the
groups are yet to avail loan from banks.
It is also found that most of the groups
are not covered with any group
insurance, and they are not aware of the
procedure to be followed, as well as the
benefits they derive from it. Many of
the respondents have invested less than
Rs 10,000 in their business, followed by
the range of investments between Rs
10,000 and Rs 50,000. This is mainly
because of the fact that the banks are
extending loan to the groups, and they
divide among themselves, according to
their needs. Hence the amount availed
by them is not adequate to produce any
product (Table 5.5).
Table 5.5 FINANCIAL DETAILS OF THE GROUP
Loan assistance from Bank
Yes 56 46.67
No 64 53.33
Total 120 100.00
Financial assistance from Govt.
Yes 20 16.67
No 100 83.33
Total 120 120.00
Insurance coverage
Yes 28 23.31
No 92 76.79
Total 120 100.00
Capital invested
< 10,000 68 56.67
10,000-50,000 41 34.17
50,000 and above 11 9.17
Total 120 100.00

48

Marketing details
As regards area of focus, majority of the
respondents are selling their products
within the town, and nearly 30 % of the
respondents sell their products out side
the town limits, mostly on job order
basis. They use mostly local resources.
Regarding the method of pricing,
mostly, the members prefer referring to
the price of the competitors products.
For job order, the buyer decides the
price. Most of the respondents are not
following any professional system. They
deliver the products to customers in an
unprofessional way, either in loose or
folded manner. It is found that they are
not aware of the significance of
professional packing. As far as
marketing is concerned, majority of
them depend on middlemen or Govt. co-
operative societies or NGOs. Many of
respondents have felt local competition
followed by lack of adequate
advertisement for their products as major
challenges. This has led them to improve
their marketing performance. It is also
found that 95 % are not using SHG
labels on their products.(Table 5.6)

Table 5.6 MARKETING DETAILS
Based on the marketing range
With in town 68 56.67
Neighboring town 17 14.17
Outside 35 29.17
Total 120 100.00
Pricing
Cost plus 24 20.00
Referring market price 53 44.17
Discretion of the buyer 43 35.83
Total 120 100.00
Type of packing
Professional 25 20.83
Occasional 12 10.00
Not professional 83 69.17
Total 120 100.00

49
Marketing system
Personal canvas 42 35.00
Govt. / NGO/ Middle
man
57 47.50
Others 21 17.50
Total 120 100.00
Based on the nature of difficulty
Transport 7 5.83
Advertising 42 35.00
Competition 53 44.17
Others 18 15.00
Total 120 100.00
Labeling as Product by SHGs
Yes 6 5.00
No 114 95.00
Total 120 100.00

Inferential Analysis
The level education of members of
SHGs is generally low. It is widely felt
that basic education is required for the
members to run an enterprise. Chi-
square test conducted with education as
a parameter for certain aspects of
running enterprises has successfully
revealed the following.
Hypothesis 1:-Null hypothesis: There is
no relationship between Educational
Qualification of the SHG members and
the difficulties faced in marketing their
Product.
Table 5.7
Qualification Transporting Advertising Competition Others Total
Primary 3 ( 10.30) 6 ( 20.70) 20 (69.0) 29
Middle 4 ( 6.20 ) 23 ( 35.40) 20 (30.80) 18 (27.7) 65
High School 13 (50.0) 13 (50.0) 26
Total 7 42 53 18 120
* Source: primary data, Figures in parentheses denote the percentage to total
Chi-Square Value 28.02161, (b) df. 6 and Table value 12.592

50
The calculated value of Chi-square is
greater than the table value of Chi
square, at 5 % level of significance.
Therefore the null hypothesis is rejected.
Hence, it is concluded that there is
relationship between educational
qualification and the difficulties faced by
the members in marketing their products.

Hypothesis 2:- Null Hypothesis: There
is no relationship between selection of
product and the system of marketing.
Table 5.9
Reason Personal canvas Govt. / NGO Others Total
Field Experience 25 (29.40) 42 (49.40) 18 (21.20) 85
Govt. / NGO 15 (62.50) 6 (25.0) 3 (12.50) 24
Middle man 2 (18.20) 9 (81.80) 11
Total 42 57 21 120
Source: primary data, Figures in parentheses denote the percentage to total
Chi-Square Value 15.10814 (b) df. 4, Table value 9.488

Therefore null hypothesis is rejected.
Therefore, it is concluded that there is an
association between selection of product
and system of marketing.
Hypothesis 3: - Null Hypothesis: There
is no association between year of
establishment and loan availed from
banks.
Table 5.10
Year of Establishment. Yes No Total
Up to 2003 16 ( 66.7) 8 (33.30) 24
2004 &2005 19 (55.90) 15 (44.10) 34
2006&2007 21 (33.90) 41 (66.10) 62
Total 56 64 120
*Source: primary data, Figures in parentheses denote the Percentage to total
Chi-Square Value 9.09596 (b) df. 2 Table value 5.991

51

Therefore null hypothesis is rejected.
Therefore it is concluded that there is
an association between the reasons for
selecting the product and participated in
the trade exhibitions.
Hypothesis 4:- Null Hypothesis: There
is no association between basis of
selecting the product and participation in
the trade fairs.
Table 5.11
Year of Establishment Yes No Total
Up to 2003 16 8 24
2004 & 2005 19 15 34
2006 & 2007 21 41 62
Total 56 64 120
* Source Primary Data, Figures in parentheses denote the Percentage to total
Chi-Square Value 6.50989 (b) df.2 Table value 5.991
The table reflects the distribution of
respondents by reason for selecting the
product and whether participated in the
trade fair.

Therefore the null hypothesis is rejected.
Hence it is concluded that there is
association between the reasons for
selecting the product and participated in
the trade exhibitions.
SUGGESTIONS
In order to convert the existing SHGs to
micro enterprises that can successfully
compete in the competitive environment,
the following suggestions are made.
1. In the present system, the registration
of SHGs is not mandatory. This leads to
migration of members between groups
or discontinuing the activity of a
particular group after availing assistance.
To arrest such activities, it is suggested
that registration of group with its

52
members may be made mandatory, at
least, before availing any financial
assistance either from banks or
government.
2. Similarly, coverage of group
insurance to the members of SHG may
also be made mandatory before availing
any loan assistance from Banks/ Govt./
Institutions. This will help in building
group cohesiveness and members would
like to work as a team for longer period.
3. Product, Place, Price and Promotion
are the four pieces of marketing. At
present most of the groups are not
showing their identity by labeling A
PRODUCT OF SHG, with a common
logo, on their products. If the SHGs
implement this practice, it will create an
awareness among the public that the
product is manufactured by a SHG,
which is capable of manufacturing
quality goods that will meet the
customer requirements.
4. Whenever members / group decided
to manufacture or trade a product, at
present majority of the SHGs depends on
their earlier experience, without
conducting a preliminary survey about
the existing competitors in the market.
Due to this, they find it difficult to
compete with the competitors. The
existing market conditions of various
products that can be manufactured by
them may be made available to them
through training centers. This will help
them in selection of the best available
products for manufacturing.
5. The SHGs may exploit the possibility
of selling their products mutually to each
other or through other SHGs. This will
not only strengthen their relationship
between them but also increase the turn
over.
6. The SHGs are not having any sign
boards mentioning their name and other
details in any of their places. These
boards in the long run will help them to
have identity and will enable them to
avail financial assistance from banks/
Institutions.
7. Packaging is another area in which
SHGs are lacking, which needs
improvement and attention to attract
customers as well as to protect products
like toys, readymade cloths etc..
8. Sharing of good practices / reasons for
success among SHGs on periodical basis
in group meetings would help them to
develop their competencies.

53
9. SHGs may also explore the possibility
of getting bulk orders or tie ups with
near by companies for their products.
10. SHGs may subscribe for the monthly
magazine Murram, published by
TNCDW. This will help them to know
the existing trends in the market and the
success stories of other SHGs.
CONCLUSION
It is noticed that the system of SHGs
saved its members, who mostly belong
to the economically weaker sections
from the clutches of local money
lenders. Besides, it also provides an
alternative source of income to their
family by becoming owners of micro
enterprises. However, women members
basically require training to develop
their skills in the areas such as product
identification, pre-testing activities, and
other marketing related skills like 4Ps.
The related institutions like Govt./
NGOs may provide adequate financial
supports for training through educational
institutions, systematically, on a regular
and continuous basis, according to their
requirement, intensively covering both
rural and urban. The growth of SHGs
may be graphed in such a way that they
become a potential micro small and
medium entrepreneurs to overcome the
macro problems like unemployment,
poverty and inequality in development
of the nation. This micro revolution in
all the parts of the nation will help in
achieving sustained balanced industrial
growth.

References:
Abdul Raheem.A and Prabhu C, Women
entrepreneurs: Problems and prospects,
2008.
ArjunSengupta, Article on Enterprises in
the unorganized sector, Business Line,
article dated November, 2007.

Ganesan N and Dr Mohammad Jaffar,
Rural Entrepreneurism, Discovery
Publishing House, New Delhi, 2004.

Jaysheree Suresh, Entrepreneurial
Development, Margham Publications,
Chennai -17. Manimekalai. N, Micro
financing for promoting women
entrepreneurship, 2008.

54
Jasmine A. (2008) Micro Finance and
Poverty alleviation, Pondichery
University, 2008.Chelladurai.M and
Thirumaran, Promoting Micro
Entrepreneurship among Women, 2008.
Jivan Kumar Chowdhary, Micro
Finance revolution and micro finance
services in Indian Prospective, Banking
Finance, June 2008
Khanka.,S.S. Entrepreneur
Development, S.Chand& Company,
New Delhi 2006.
ShaikMohamed.N , Rural
Entrepreneurism, Discovery Publishing
House, New Delhi, 2004.

SrinivasaRao, K Financial Inclusion,
Banking Finance, December, 2008
Sudalaimuthu.S and Senthilkumar.P,
Micro Finance and Poverty alleviation,
Pondichery University, 2008).

Journal of Management, Vol. VII, No.1 Effective Communication.

55
Vol. VII.No.1.October 2011, pp. 55- 64

Effective Communication strategies to mobilize Human Resources in Popularising Government
Health Projects: A field study

Prof.NandiniLakshmikantha, Ph.D, Director, Post Graduate Studies, Acharya Institute of Graduate
Studies, Soldevanahalli, Bangalore- 90

Introduction
Government of India, which since
independence emphasizing has been the need for
the health and hygiene, of the village has been
spending huge amounts on primary health care
under the umbrella of National Rural Health
Mission(NRHM). The state health departments
take the projects further and reach the
beneficiaries with the help of primary health
centers and workers attached to social welfare
department. Despite all the efforts, as Kiran
Prasad notes(2004), during the last six decades
of independence, India has a dismal human
development status(HDI of 127 among the 178
countries). With a majority of its population
experiencing persisting poverty, illiteracy and
unemployment the projects of the government
appear to have failed to reach the beneficiaries.

Experience has shown that the extent of
utilization of the institutional facilities or
deriving benefits from the programs in the rural
areas is not up to the desired levels. This could
be consequent of some gaps in communication as
any project to be put in place needs a strong
network, particularly that of health and hygiene.

Communicating health has been a major area of
concern for the health administrators and also
practitioners. On the one hand it is said that
health is wealth while on the other hand there is
high mortality and morbidity particularly among
the people who live in villages and those who
live in poverty. This is because since
independence, a number of health schemes
started and closed by the government went
without leaving any marked changes in the lives
of rural women (Indira Bishnoi, Vibha
Singha;2007). The necessity to overcome the
impediments and to put things in place,
becomes obligatory as the proposed strong
communication network of the mission
intended for the improvement of health of the
community-appears to be failing.

India being a country with more illiterates than
literates, an effective communication strategy is
imperative. The question that arises here is what
should be the fabric of this communication
strategy, apart from the communication web
woven by the government, i.e implementing
agency or by the media, which is the vehicle of
dissemination of information? There appears a
strong need for tapping alternative human

56
resources apart from strategizing new methods of
communication.
The present study is taken up not only for
improving the existing communication and
human resource network which is imperative but
also to rediscover the gaps in the systemic
network. The study tries to explore developing
alternative communication methods and also
developing alternative human resources,
effective in popularizing government health
projects.

Research methodology and outcomes
This project was carried out in two phases.
The first phase involved a focused group
discussion in three villages to assess the
level of awareness of health and hygiene
issues keeping an authentic state
government publication as reference.
The respondents were grouped into three
small groups comprising five members in
each group. The discussion with the
respondents which comprised of either
gender concentrated on topics such as the
formation and working of health and hygiene
committees, auxiliary nurse midwives,
availability of community and Primary
Health Centers, hospitals at District and
Taluq Centers, prenatal and postnatal care
provided to women by the health department
of the Government, projects undertaken by
the government for the beneficiaries
belonging to different age groups and
gender, health camps and availability of tests
and treatments for diseases like TB and
HIV/AIDS and emergency services.
The two villages selected for the experiment
are situated nearly 20-25 KM in the northern
part of Bangalore, Karnataka. The villages
are part of Kasaghattapura Gram Panchyati.
Of the two villages, Soldevanahalli, is well
connected to Bangalore city both by road
and railway. The village has proper water
and electricity provision. There is also a
police station. A majority of the villagers
are either employed or cultivate lands. With
new layouts being established in the areas
surrounding the village, this village enjoys
all the facilities which are missing in any
other village. Kempapura has no gram
panchayat member of its own and is a bit
interior. The roads and transport towards
the village need to be developed. The
village is provided with electricity and water
is supplied through bore wells. A majority
of the villagers practice agriculture. A
separate colony for the SC/STs within the
villages, speaks about the prevalence of
social hierarchy.
The two villages have a Public Health
Center (PHC) within their vicinity. This
PHC, situated at Chikkabanavara is at a
range of 2K.M. has a doctor, auxiliary nurse
midwife and medical officers are attached to
it. However to avail in-patient facility the
villagers should approach a PHC situated at
Mallasandra, some 6 K.M from here and for
emergencies they have to go to K.C.General
Hospital or Vani Vilas Hospital in Bangalore
City( 18 KMs).
The snowball method was adopted while
contacting the respondents of
Soladevanahalli andKempapura and the
focused group discussion was held at the
Anganwadi center of the respective villages.
The talk which began informally gradually
delved into the desired topics without
providing time for preparation. The
participants were encouraged to express
freely and to exchange information. The
discussions were recorded using both
cassette recorder and photographs. The
participants were advised after the elaborate
discussion to observe the activities that are
happening in the village and to talk about
them with their neighbors. The respondents

57
belonged to a cross section of the population
and were in the age groups of 18 to 30 years.
Care was taken to see at least one
government beneficiary or one having
knowledge about the government projects
participated in each group.
During the second phase of meeting, which
happened after a gap of 15 days, the
villagers(participants) of Soldevanahalli and
Kempapura were invited to assemble at the
center on different dates. The respondents
were personally met and invited. Here the
villagers were provided with information
about the various projects undertaken by the
Health Department of the state. A street play
was also organized by the National Service
Scheme volunteers. The research was based
on qualitative approach and not quantitative
approach.

The research period : Feb 2009 to April
2009. The participants are in the age groups
18 to 45 years.

Observations of Phase I
The entire discussion concentrated on
four core issues related to health. They
are: village health and hygiene
committees; anganwadi workers, hospital
facilities and health schemes for various
age groups; and emergency services.
Group I (Soldevanhalli): The group
comprised four women and one man.
Incidentally the man happened to be a
powerful member of thegram panchayat. It
is needless to say that the member was aware
of the majority of projects implemented by
the department. The female respondents
were shy initially and were just listening to
the explanations provided by the member.
The fear of discussion being one sided
vanished as the discussion progressed.
Village health and hygiene committees:
Barring the male member the other four female
members were not aware of the formation of any
such committee. The male member who was
aware of the fact that the funds were not coming
regularly and also the amount received was not
sufficient, did not have full knowledge about the
funds sanctioned by the government and the date
of last meeting held. When the male member
explained the working of the committee the
female members, expressed their eagerness to
learn more and one member could not control her
curiosity and openly expressed her willingness to
be part of one committee and demanded the
knowledge of procedure. The female members
recollected instances of water tank and roads
being cleaned, but were unaware of the
periodicity. They did not remember that
bleaching powder was used by the panchayatin
public places. They were not even aware of the
waste disposal procedure.
Anganwadi worker:Every one was aware
of the existence of an anganwadi center and
anganwadi worker in the village. They were
also aware of food being provided to the
children and dispersion of the stipulated
ingredients to a pregnant beneficiary during
her pre- and post-pregnancy. In the
adjoining hall of the anganwadi center the
tailoring classes were initiated of which the
female members were aware. They were all
appreciative of the work being done by
anganwadi worker.

58
Hospital services and Health schemes for
various age groups :The group was aware
of the existence of the
PrimaryHealthCenter and it being situated
near Chikkabanavara. They were aware of
the doctor and ANM in position. The
respondents were also aware of a full
fledgedPHC situated at Mallasandra . One
of the female members was a beneficiary of
JananiSurakashaYojane(JSS) and remembers
the help provided by an anganwadi worker
during the period. Another woman though
not under the umbrella of JSS recollected the
support received by the anganwadi worker
during the routine check ups. However, the
lady went to her mothers place for delivery.
Whenever there is a health check-up camp
the anganwadi worker mobilizes villagers
during doctors or other officials visit or at
the time of health camps. The group
expressed awareness of lectures and visits
but was not aware of health camps. As a
matter of fact the women were excited to
learn about such camps. Except the pulse
polio program and JSS no other health
scheme of the government was known to the
respondents, including the treatment benefits
available for children.
Emergency services : The nurses keep
emergency medicines with them but this aspect
was not known to the group members. Except the
male respondent women were not aware of
emergency services.
Group I (Kempapura): The group
comprised three men and two women. The
men practiced agriculture and involved
themselves in all activities pertaining to the
development of the village. It is needless to
say that male members are aware of the
majority of the projects implemented by the
department. The female respondents are
housewives and members of Stree Shakti
groups.
Village health and hygiene committees: The
male members were aware of the formation of
committees related to health and hygiene and
community development. These members, who
were also aware of the funds received by the
government, were of the view that the funds
received was neither regular nor enough. They
asserted that the committees met regularly but
interestingly they did not remember the date of
the last meeting. The female members plunged
into the discussion when the cleaning of the
water tank of the village was raised. The female
members said that the village had a borewell and
in summer they faced water problem. Here it was
observed that no member was either ready to
discuss the cleaning of the water tank or its
surrounding area. Keeping the surroundings
clean appeared to be the responsibility of the
housewives. Regarding collection of garbage
and clearing the debris members preferred to
remain silent.
Anganwadi worker:Every one was aware
of the anganwadi center and its worker.
They were also aware of food being provided
at the anganwadi to the children.
HerigeBhatye, as they recognize JSS,
seems to have brought popularity to the
worker. They were all appreciative of the
work being done by anganwadi workers.
Hospital services and health schemes for
of the existence of the
PrimaryHealthCenter and its situation near
Chikkabanavara. They were also aware of
the doctor and ANM in position. The
respondents were also aware of another PHC
nearMallasandra, which they felt was neither
equipped nor had proper connectivity at the
time of emergencies. One of the female
members who was presently under the
umbrella of JananiSurakashaYojane
preferred to go to a private hospital for her
delivery. Another woman explained that she

59
was aware of the help offered to a young girl
staying in the neighborhood. Pulse Polio is
another project which the members were
familiar with. The participants however were
not aware of any health camps being
conducted in the surrounding villages in the
recent past. The participants were inquisitive
about the schemes for various age groups
and gender.
Emergency services Only the male
participants were aware of the emergency
telephone numbers, but termed the
knowledge as useless as the nearby PHCs
were neither equipped nor have the facility
to attend the emergencies. The members felt
that the phone number of private
ambulance service is more useful when the
patients need to rush to either KC
GeneralHospital or
VaniVilasHospitalhospital.

Group II (Soldevanhalli): The group
comprised three women and two men. The
men introduced themselves as employees
working on daily wages. One was a driver
and the other was a mechanic in a workshop.
The female respondents are housewives.
The female respondents preferred to remain
silent throughout. The young men said they
go out in the morning and come back only
by late evening and hence more than
participating in the discussion they were
interested in the explanations provided by
the researcher. As the discussion progressed
the respondents, particularly the female,
were able to provide some inputs.
Village health and hygiene committees: Both
male and female members were not aware of
formation of any committee nor about the funds.
The members were not even curious to know
about the functions of this committee. The
participants, however, knew that the water tank
was being cleaned occasionally but did not know
the periodicity. About clearing the debris and
waste they expressed their displeasure. They
were not aware of any hygiene related to work
undertaken by the panchayat.
Anganwadi worker: Women respondents
were aware of the existence of an anganwadi
center and anganwadi worker in the village.
by the anganwadi to the children. They were
in general all appreciative of the work being
done by an anganwadi worker. One of the
respondents child comes to the anganwadi
center and has learnt some songs.
Hospital services and Health schemes for
of the existence of PrimaryHealthCenter
and it being situated near Chikkabanavara,
nearly two KMs from Soldevanahalli. They
were aware of the doctor and ANM in
position. The respondents were also aware
of a full fledged government hospital
situated at Hesaraghatta some 20 KM from
the village. Male respondents express their
inability to understand the functioning of the
hospitals. Men are not aware of the medical
support provided by the hospitals in treating
TB and HIV. A woman respondent who is
under the umbrella of JSS, remarked about
these hospitals being unclean and smelly.
They were not aware of any other projects
or schemes offered by the health department.
Emergency services : There is a total lack
of awareness of emergency services among
the participants
Group II (Kempapura) : This was an all
women group. It is needless to mention here
that the members were all housewives. The
group also consisted of a member residing in
a colony. The respondents preferred to

60
listen to the explanations than to comment
on anything. After persistent probing the
respondents were able to disclose certain
details.
Village health and hygiene committees: The
members were neither aware of the formation of
any committee nor about the funds. Interestingly
they were not even curious about the functioning
of these committees. The participants, however
asked if these committees can undertake some
projects which can financially empower them.
When the purpose of the formation of the
committees was explained the participants
expressed their dis-interest in the subject.
center and anganwadi worker in the village.
by the anganwadi to the children. They
were in general all appreciative of the work
being done by an anganwadiworker. One of
the respondents expressed happiness about
her child which attends classes at
anganwadi center.
and being situated near Chikkabanavara
were aware of doctor and the ANM in
position. However they were not happy
about the condition of the hospital. One
respondent even recalled an incident which
highlighted the lack of basic medical
facilities. It was shocking when the
respondent who lives in the colony
disclosed that there were one or two
deliveries in the recent past without any
medical assistance. The participants
expressed their inability to understand the
functioning of the hospitals and are not
aware of the medical support provided by the
hospitals in treating TB and HIV. They are
also not aware of any other projects or
schemes offered by the health department.
Emergency services: There is total lack of
awareness of emergency services among the
participants.
Group III (Soldevanhalli): The group
comprised only women respondents. This
was an intentional formation. It was
interesting to note out of the five, four
respondents were attached to the
anganwadicentre for various reasons. Two
women sent their children to the center,the
third learnt tailoring and the fourth, being a
pregnant, is under the umbrella of JSS.
Village health and hygiene committees: Out of
the five members four members were not aware
of the formation of any committee nor about the
funds. The fifth expressed her awareness related
to the existence of some committee on which
her brother is a member. The members instantly
expressed curiosity and wanted to know more
about the working of the committees. The third
member was eager to know about the benefits
and the procedure to become a member. The
participants, though did not know the regularity,
were aware of the water tank being cleaned.
About the usage of cleaning agents and spray of
anti-infectants the participants could not arrive
at a concrete record. They were not sure if the
debris cleaning task was undertaken by the
village panchayator through some agency.
center and an anganwadi worker in the
village. They were aware of food being
provided to the children, the help extended
towards the pregnant, the tailoring
initiatives, the monthly check-ups, etc.
However, they were not aware of the
schemes by their project names. They

61
being done by an anganwadi worker. The
women were very particular that they should
be able to achieve some kind of economic
independence by earning through skilled
work like tailoring.
and it being situated in Chikkabanavara,
were aware of the doctor and ANM, in
position, and were also aware of a better
equipped PHC at Mallasandra. They were
not aware of the medical support provided
by the hospitals in treating TB and HIV. A
woman respondent recollects the lack of
basic provisions in the hospital when she
went for woman related problem.
of awareness related to the emergency
services among the participants
Group III (Kempapura) : The constitution
of this group revealed hard core realities of
village life. This group comprising three
young women and two men were all in the
age groups of 18 to 25. Out of the three
female participants two were below 21 and
were already in the second para. The third
woman was being coxed by her family
members for the third child. The men in the
age group 24 to 28 years worked as
agricultural laborers and had no regular
income. It was interesting to note out of the
five, four respondents were attached to the
anganwadicentre through their children. The
fifth just looked blank.
Village health and hygiene committees: None
of the members were aware of the formation of
any committee nor about the funds. The
members repeatedly said they did not receive any
support from the government and insisted on
something being done. The participants were
neither aware of the regularity of the water
source being cleaned nor about the usage of the
cleaning agents. The female participants knew
that they have to clean their house and their
surroundings. They said the waste was thrown in
the open drainage which runs in front of their
houses.
Anganwadi worker: Women respondents,
in particular, were aware of the activities of
the anganwadi worker. They were aware of
food being provided to the children, the help
extended towards pregnant. They were also
aware of the cases where young girls were
being provided with some kind of grocery.
However they were not able to recognize the
schemes by their project names. They
being done by the anganwadi worker.
various age groups: The group was aware
of the existence of the Primary Health
Centerand it being situated in
Chikkabanavara. Though they were aware
of the existence of the doctor they could not
recognize the existence of any ANMs or
medical officer. They were frank enough to
accept their ignorance related to the various
health projects offered by the government.
Though they were aware of PHC at
Mallasandra, they preferred to go to KC
GeneralHospital in Bangalore. They were
not aware of any medical camps being held
in the village. It was rather satisfactory to
note that young men were aware of the
medical support provided by the PHCs in
treating TB and HIV. A woman respondent
recollects the way hospital wastes are being
disposed of.
of awareness related to the emergency
services among the participants


62
Observations and conclusion:
The content of discussions provide a glaring
examples for weak-links in communication
network within the village.

Committees: It is evident from the discussion
that the committees definitely exists on records
but there appears neither regularity nor sincerity
while mobilizing the village people in health and
hygiene issues. It is very essential to recollect
Gandhiji who strongly advocated for the people
to come together foregoing their differences
while striving for the health and hygiene aspects
in village( D.G.Tendulkar; 1981). It is rather
very sad that except those who are members
others are not aware of the functioning of the
committee. It, indicates that people who are
politically and economically powerful are in the
committees and are the decision makers.

Each rural health and hygiene committee is
entitled for an imprest fund of Rs 10 thousand
which can be spent on the purchase of cleaning
materials and medicines for emergency
purposes. Apart from that the sub center is also
entitled to get an imprest fund from the
government which is intended to be spent in
shifting the patients to referral hospitals for
buying fist aid materials and also for maintaining
the cleanliness of the hospital. Considering the
circumstances in which ordinary people live, it
was not surprising that men and women were
ignorant about the funds.

Anganwadi worker:Aanganwadi worker
appears to be the nerve center of activities.
Particularly in Soldevanahalli where the
anganwadi worker is also a member of health
and hygiene committee it is expected of her to
educate the village women in a better way.
However, the interaction with both anganwadi
workers revealed that even their knowledge
regarding the health schemes needed to be
updated. Another glaring fact that the
investigator observed during the visit to the
village was a total lack of display material on the
ongoing projects of the government, in the
anganwadi centers. If the officials are able to
provide colorful display materials they may
attract the mothers or the curious onlookers. The
placards displayed during the street plays were
able to grab the attention of the localities and
some could even recognize the projects.

One of the key components of the National Rural
Health Mission is to provide every village in the
country with a trained female community health
activist ASHA or Accredited Social Health
Activist. Selected from the village itself and
accountable to it, the ASHA will be trained to
work as an interface between the community and
the public health
system(http://mohfw.nic.in/NRHM/asha.). This
program which has tasted success in a majority
of the northern states where its been
implemented, is yet take its initiative here. That
the brochure published by the Health Department
of the Karnataka State and the repeated
advertisements on television in the regional
language, provides enough publicity to the
concept but people do not see ASHA in reality
there appears some confusion amongst the
villagers. This point was clarified during the
lecture which was delivered during the second
leg of the experiment.

Apart from this a part of village population,
which is nomadic in nature and is below
poverty line, neither the anganwadi worker nor
the panchayat member is aware of their powers

63
to cover these families under the umbrella of
government projects. A certifying letter from the
chairman of gram panchayat or the doctor from
the PHC will hold good to avail the facilities.
When this issue was also addressed in the lecture
followed by the street play performed by the
NSS volunteers there were some spontaneous
queries.

various age groups: The villages are connected
to two PHCs. However there appears
disaffection amongst the villagers about the
facilities and cleanliness of these hospitals. The
villagers also do not recollect any health camps
being conducted in the recent past. The villagers
in general are aware of much publicized anti-
polio drive and JSS.

Another glaring fact that the investigator
observed during the visit to the village was total
lack communication between the members with
respect to the benefits earned by the government.
The beneficiaries preferred to remain silent than
talk about it. During the group discussion it was
observed that a beneficiary herself/himself can
be strong tool of communication, as she/he
provided first hand information. During the
meetings the beneficiaries should be encouraged
to address the gathering.
Despite of the display at the prominent place on
causes and treatment for TB, a majority of the
participants expressed their ignorance related to
the treatment. This is primarily because there is
lack of display material or wall writing or
effective inter personal communication related
to the issue. The same could be applicable to
HIV/AIDS. When it was explained to villagers
about the necessities for treating TB or
HIV/AIDS, though there was no sudden change
the reactions received from the audience reveal
that such subsequent efforts either through
lecturers or street plays the message will reach
the target group.

It is interesting to note that a few of the
respondents were able to correlate and recognize
the government projects under its project name
after the lecture and particularly after the street
play and this proves that there is scope and need
for strengthening interpersonal communication.
It is suggested that the government and the
officials concerned should take some initiatives
in mobilizing the community of beneficiaries to
come out of their selfish and caste based cocoon
in making the issues known to the public in
general. Apart from this there is a need to
discover and tap potential alternative
communication medium.


64
Acknowledgements:
Sri.A.S.Chandramouli; Deputy
Director(Audience); Doordarshan
Kendra Bangalore

Brochure released by Health and Family
Welfare Department; Government of
Karnataka;2008.

Indira Bishnoi, VibhaSingha; Awareness
of DWCRA programme

among rural women;International
Journal of Rural Studies; Vol.14;No.1;
2007. source: (www.ivcs.org.uk/ijrs)

D.G.Tendulkar; Mahatma;( Kannada
version edited by
Dr.A.L.Shivarudrappa);
GandhiBhavana; ManasaGangotri;
Mysore; P.p 6; 1981.

india.gov.in/spotlight/spotlight_archive.p
hp?id

http://mohfw.nic.in/NRHM/asha.

Journal of ManagementVol. VII.No.1 Dual Career.

65

Vol. VII.No.1.October 2011, pp. 65 - 73

DUAL CAREER FAMILY LIFE STYLE

Dr.K. Uthayasutiyan
S. Gunapalan
suriyankmc@yahoo.co.in

ABSTRACT
Dual-career couples are individuals who, rather than being simply employed, have "jobs
which require a high degree of commitment and which have a continuous developmental
character." A dual-career family is "one in which both heads of household pursue careers and
at the same time maintain a family life together." The need for gainful employment of women
has arisen for better management of the family and fulfilling its needs. More and more
women are entering the working class to satisfy the familys needs. As the number of women
entering the work force continues to rise, it becomes increasingly difficult to mange families.
Because of their dual responsibilities, working couples are particularly vulnerable to the
problems of work-family spillover, conflict, and crossover. Work-family spillover, which can
be negative or positive and bidirectional, involves the transfer of mood and behavior from one
domain (home or workplace) to the other. This paper is a modest attempt to highlight the
lifestyle principles, the challenges and benefits and to suggest some of the recipe for
successful dual career family.


66
INTRODUCTION
The need for gainful employment of
women has arisen for better management of
the family and fulfilling its needs. More and
more women are entering the working class
to satisfy the familys needs. As the number
of women entering the work force continues
to rise, it becomes increasingly difficult to
mange families. Some of these women are
part of a relatively new lifestyle, the dual-
career couple. Resulting primarily from
expanded educational opportunities for
women and increasing job opportunities for
these educated, aspiring women, dual-career
lifestyle has evolved during the last decade.

Dual career families have created a unique
set of challenges, many of which relate to
socialization and role expectations, work role
conflicts, and family role conflicts. Many
couples have difficulty resolving role
expectations because the likelihood is great
that the individuals involved have been
socialized for roles very different from those
they are likely to experience as part of this
lifestyle.

Dual-earner couples negotiate housework,
childcare, and emotionally support their
partners to maintain and develop their
relationships. Dual-earner couples also
engage in status-enhancement work to
support their partner in their employment.
Dual-earner couples face special challenges
as they try to balance work and family
responsibilities. Long work hours, inflexible
work hours, an unsupportive supervisor, and
a less than positive work environment are
some of the factors that can contribute to
work-family conflict. In other words, work
conditions can have a negative impact on
family life. Similarly, family problems can
lead to unsatisfactory work experiences. An
unsupportive spouse, inequities in the
division of housework and child care,
significant health problems of family
members, and changing child-care
arrangements are some of the family
problems that can contribute to work-family
conflict.


67
DUAL CAREER COUPLE
Dual-career couples are individuals who,
rather than being simply employed, have
"jobs which require a high degree of
commitment and which have a continuous
developmental character." A dual-career
family is "one in which both heads of
household pursue careers and at the same
time maintain a family life together."

FACTORS AFFECTING DUAL
CAREER COUPLES
- Money management (Who handles the
family budget and how much money
does each working individual keep for
his or her own personal expenses?)
- Cleaning, shopping, cooking,
responsibilities, etc. (Who does what,
and when?)
- Health and energy level (Do you both
have similar drives to do a lot of
activities in the evening, weekend?)
- Hours in a day (How do you plan a meal
when you are both working until 9:00
PM)
- Children (When do you have them and
who will care for them?)
- Job/study pressures (How do you handle
stress?)
- Friends (Do you share mutual friends?
How often do you see them? Do you
keep contacts with friends of the opposite
sex?)
- Family relations (Do you come from
similar family backgrounds? How much
time do you spend with each others
relations?)
- Employment prospects and career
mobility (Who seeks an advanced
position first and when? What is the
availability of positions in each persons
career area - in and out of the geographic
area?)
- Intimacy and communications (How do
you handle disagreements and grow
together when your time together may be
limited?)

These factors are critical for dual career
couples to the extent that they serve to
facilitate or thwart growth in their
relationship. Some factors may be
growth producing for some couples and
may serve as points of serious conflict
for others.


68
ADVANTAGES OF DUAL CAREER
Couples have experienced several
advantages in dual-career lifestyle.
According to a recently released Catalyst
study, A two-career marriage offers couples
the benefits of economic independence and
career control. The study also cited other
advantages including: an increase in
household income, the flexibility to change
jobs or switch to a new industry, and the
option to start a business.
These challenges and advantages can be
viewed and evaluated using the four LIFE
principles: L - Lifestyle, I - Identity, F -
Financial and E - Experiences.
The LIFE principles are briefly described
below:
- The first principle, Lifestyle, includes all
of those elements that improve ones
current lifestyle-- such as cultural
enrichment, purchasing a better home,
sending the children to better schools, and
purchasing more expensive vehicles -- or
decrease the quality of ones lifestyle
such as juggling too many activities,
keeping up with the Joneses living in the
fast lane and more.
- The second principle focuses on the
Identity needs of each partner. It explores
the growth and personal feelings and
emotions that each partner receives or
gives as a result of the dual-career
lifestyle. It encompasses individual
aspiration and goal-setting as well as
feelings of independence, freedom,
control, anger, resentment, and stress.

- The third principle, Finance, relates to the
positive and negative effects of having a
dual-career income, such as having
additional monetary funds to live a better
lifestyle and to experience a better life. It
incorporates the individual and joint goals
for financial planning and spending.

- The fourth principle, Experiences,
highlights all of the positive and
negative experiences that will be
encountered in the home and at work
as a result of two partners dedicating
themselves to their work. It touches
on the relationships that we have with
our husband, wife, mother, child,
father, friends, co-worker, boss, and
more.
CHALLENGES CONFRONTED
New challenges are emerging and
dual-career partners must learn to face them
together. Some of the issues that dual

69
couples confront include the balance of
personal development with professional
career advancement, balancing personal
needs and career satisfaction, and finding
happiness and meaning as individuals, as
couples and as parents.
Professor David Rice lists four challenges
confronted by dual careerfamilies. They are
included:
- balancing career and familial
responsibilities;
- attempting to provide mutual support
while at the same time managing
competitive feelings;
- dealing with a finite amount of time in
the light of multiple role demands; and,
- Preserving ones identity as a person,
as distinct from spouse.
These challenges will continue to have a
rippling effect on dual-career couples.
WORK FAMILY SPILLOVER
Because of their dual responsibilities,
working couples are particularly
vulnerable to the problems of work-
family spillover, conflict, and crossover.
Work-family spillover, which can be
negative or positive and bidirectional,
involves the transfer of mood and
behavior from one domain (home or
workplace) to the other. For example,
negative work-to-family spillover occurs
when an employee is distracted and
irritable at home because of pressures at
work.
Showing Work-Family Spillover

Type of Spillover

Example

Negative

Family-to-work
Disagreement with spouse leads to poor
performance at work

Work-to-family
Heavy workload leads to distraction and
irritability at home

70

Positive

Family-to-work
Positive relationships at home energize and
improve ability to cope with work
Work-to-family Experience at work makes one more
cheerful at home

Work-family conflict occurs when
the responsibilities of work and family
interfere with one another. For example,
work-family conflict occurs when a parent
must leave work to attend to a sick child, or
when an employee brings work home to
complete during family time.
BALANCING FAMILY AND WORK
Family-work balance is a complex
issue that involves financial values, gender
roles, career paths, time management and
many other factors. Hidden values and
models from our cultures, original families
and other sources influence our choices in
ways that we often dont anticipate or
understand. They have far-reaching
consequences for our lives.
Like so many of the challenges and
dilemmas of marriage, balancing family and
work has no easy solution-no one-size-fits-
all approach. Every person and couple will
have specific preferences and needs.

Preparation, intentionality and joint decision-
making are the key to creating and
maintaining the right family-work balance.
Many couples experience extremely strong
forces pulling them away from the priority
that they would like their family to have. If
you dont aggressively plan and maintain
your balance, these other forces will prevail.
Without a clear plan and commitment to
maintaining balance, time and energy
earmarked for family erodes and evaporate.
Family-work balance is a process, not a
static achievement. It is important to make
the big decisions selecting careers and
jobs, timing children, allocating roles and
responsibilities, etc. that will provide the
opportunity for balance. The real task of
balance takes place on a weekly and daily
basis, even from hour to hour. This is where
couples hold the line to protect family time
or allow it to evaporate where they opt to

71
take advantage of a family opportunity or
allow other priorities to interfere.
The nature of balance is that you can
and must adjust as required. No decision,
plan or approach need be permanent. If it
does not work or satisfy, you can reconsider
and make changes. In fact, constant tactical
adjustment and flexibility to keep on target
toward your goals and priorities (but not to
accommodate outside demands where limit-
setting is usually more in order) is a hallmark
of couples who are satisfied with their
balance.
But how can you tell when you have found
the right family-work balance for you and
when you need to adjust and make a
different plan? Good balance, while different
for everyone, is characterized by

- having enough time for both work and
family without expending great effort, so
that your life feels relatively comfortable
- having enough back-up, so that you can
cope with minor emergencies like sick
baby sitting, car breakdowns, etc. and
- Being on the right personal and
professional path.
RECIPE
Following are the recipe for a successful
dual career marriage:
- Begin each day with some discussion of
that day's agenda. Difficult as it may be
for some of us to talk (let alone breathe!)
in the morning, it is critical to
communicate with your spouse about the
day's coming events. The day may be
special or routine...but touching base
before the day begins fosters a sense of
companionship even as you go your
separate ways.
- At day's end, recount your experiences
together. Asking your spouse, "How did
it go?" and listening to the details invites
a sharing of our jobs. It is important to
discuss our jobs, unload our burdens, and
give each other support for our hard
efforts. Being a best friend to your
spouse means providing empathy and a
"sounding board," as well as expressing
appreciation for each other's toil.
- Decide your plans for the evening
together. Time spent after hours should
be planned too. There are always
household tasks that need to be done and
responsibilities for the children. But each
evening should include some "couple"
time as well. Often, however, one spouse
relaxes while the other does chores, and

72
by the end of the evening, we have one
spouse who is bored and another who is
resentful...neither of whom has shared
these feelings with the other.
- Every week deserves at least one date
night. Regardless of how long you have
been married, how old the children are,
how pitiful our finances or how active
our social obligations, there is nothing
sexier than a couple's date night. Date
nights are defined as time out from the
house and all of its encumbrances and
time spent alone as a couple. NO ONE
ELSE ALLOWED! It is essential to
schedule this time. What you do doesn't
matter. The important thing is to have
fun!
- At day's end, relax together... go to sleep
together. Work schedules often rob us of
the most intimate time of the day; but
nothing can take the place of this
important time to relax and be loving
together. Sleep is a time for renewal of
strength and energy. Sharing this time
brings a couple closer together and not
sharing this time often drives them apart.
It is often said that it takes a lot of effort
to make a good friendship. The same is
true of marriage. But in a dual-career
marriage there is the two-fold need for
understanding, encouragement, sharing,
and communication...in order to make
this multi-faceted business and personal
endeavor a success.


73
REFERENCES:
Suswagata Day Paul and Gorachand Kahn.
Prof, Working wives in Malda: Bearing a
Dual Burden, Social welfare, Dec 1999, P.no
17.

The foundation of Humanity, St.Josephs
College, tiruchirapalli, june 2002, P.no.67

Marie Mignon Mascarenhas. Dr, Women in
mulptiple roles, Social welfare, August
1988. P.no.13

Dr. Marie Mignon Mascarenhas, Womwn
in multiple Roles, Social welfare, Augest
1988, P.no.18

LipiMukhopanddhyay, Stress in the lives
of working women and coping mechanics,
Social welfare, July 1999, P.no 28

VimalRanadive, Trade Unionism and
working womwn, Social Welfare, Oct 1997,
P.no.27

Susan B. Hester, Kitty G. Dikerson, Serving
Dual career Families: Problems or
opportunity, www.joe.org, March 1984.

The Ginac Group, Traiblazing Couples:
Ten Rules forLiving a successful Dual
Career Life Stile, www.ginacgroup.com,
2001, Linda M. Ginac, P.no.12-16.

www.bc.edu/bc_org/avp/wfnetwork/rft/wfpe
ia/wfpDECrec.html

Janes Dr, Dual Career Marriage,
www.goolesearch.com P.no1.

www.joe.org / joe / 1984july/a4.html

www.lifepositive.com

Journal of ManagementVol. VII.No.1 An Empirical Analysis.

74


AN EMPIRICAL ANALYSIS OF THE TWIN DEFICITS
EVIDENCE FROM SRI LANKA

S.Sivarajasingham** and N .Balamurali*

** Dept of Economics & Statistics,
University of Peradeniya,
Peradeniya, Sri Lanka

* VavuniyaStudy Centre,
The Open University of Sri Lanka

ABSTRACT
This paper explores the empirical relationship between budget and current account deficits in the case
of a small developing country, Sri Lanka for the period of 1960-2010. The data are collected from
annual reports, Central Bank, Sri Lanka. The econometric methods used in this study are co-integration
technique, Error correction modeling and Granger causality analysis. The empirical results are
consistent with conventional view. Our empirical results clearly suggest that there exist statistically
significant longrun positive relationship between the trade deficit and the budget deficit in Sri Lanka.
The Granger causality test shows that the direction of causality runs from the budget deficit to the trade
deficit and the relationship is positive and statistically significant. The empirical analysis in this study
partially supports the Keynesian view that there is a linkage between the trade deficit and the budget
deficit and the direction of causality is correct but the Ricardian equivalence hypothesis is not valid
for Sri Lankan economy during the study period .

Keywords: Twin deficit, Ricardian equivalence, co-integration error correction models, Granger
Causality test.


75
Introduction
The current account deficits and the
budget deficits have been an important feature of
the Sri Lankan economy. Central bank reports
provide that current account deficits and the
budget deficits have been more than three
decades in Sri Lanka. The budget deficit was
growing exponentially along with a current
account deficit since in the late 1950s. These
deficits occurred concurrently with acute
macroeconomic imbalances and indebtedness.
Indeed, national income accounting identities
guarantee that budget deficits must create either
an excess of private saving over investment or
an excess of imports over exports. These two
deficits are closely and perhaps even causally
related. The correlation coefficient between
these two variables is about 0.6 and it is also
statistically significant (p=0.00) Twin-Deficit
hypothesisthehypothesis suggests that a larger
fiscal deficits through its effect on national
saving and consumption, leads to an expanded
current account deficit. The identity will be a
misnomer in many circumstances since there is
no reason that "twin" deficits need always
appear together on these two national accounts.
In fact, some countries will, at times, experience
a deficit on one account and a surplus on the
other. (Japan in 2000). Also, at times, a country
will experience a surplus on both accounts.

These continuous deficits in a country like Sri
Lanka motivated the researchers to examine the
relationship between these twin deficits. These
persistent deficits become a major cause of
concern to researchers, policy makers in Sri
Lanka. These twin deficits are related to the
internal and external economic stability of the
economy, interest rate, exchange rate
The close correlation observed between these
two deficits does not imply any causal
relation between the two. Therefore , identifying
the causal relation between these deficits is
important and would have different policy
implications . Theoretically , there are four
possibilities about the relationship between
budget deficit and trade deficit The first one
is called the Twin Deficit Hypothesis .
According to this , budget deficit has positive
and significant effect on trade deficit or the
main cause of trade deficit is the excessive
budget deficit. Even though theoretically not
very well explained reverse of this relationship
is also possible i.e trade deficits might also be
mutually interdependent Finally, the alternative
to all these three possibilities is that there
exists no relationship between the two deficits :
They are independent. Issues relating to fiscal
deficits, public debt and trade deficit have
been an intense area of research among
economist for the last five decades. The
dramatic increases in both the budget and
trade deficits , widely known as the twin
deficits phenomenon have led many scholars
to examine the possibility of a relation
between the two ( Feldstein 1992, Virmani
2001).
Like many other development countries, Sri
Lanka has been experiencing both trade deficits

76
and budget deficits since the fifties. Successive
budget deficits and the accompanying trade
deficits during the period 1957-1960 resulted
in a rabid depletion of foreign exchange
reserves causing a serious foreign exchange
problem for the country , which lasted till the
1977 economic reforms. However, since then
budget deficits have once again begun to
exert pressure on the external payment
position, It is worth noting here that a part of
the trade deficits in the post -1977 period were
also the outcomes of the country s attempt to
absorb large doses of foreign capital . It is also
worth noting that there have been few studies
on the subject of budget deficits and related
issues in Sri Lanka ( such as Colombage 1991:
Premaratne 1983) and this issue has received
some attention from IMF and the World Bank in
their analysis of Sri Lankas economic
problems over much of the post- independence
period. However , since most of the empirical
studies on the twin deficits have focused on
the developed countries there have been very
few empirical studies on developing countries
examining such an issue (such as Akbostanci
and Tunc 2002; Alkswani 2000:Islam 1998).
Akbostanci and Tunc (2002) used the error
correction model and the co integration
methodology to examine the linkages between
budget deficit and trade deficit for Turkey
during the period 1987-2001. The study
concludes that the twin deficits hypothesis holds,
and the Ricardian equivalence hypothesis is not
valid in the case of Turkey. Therefore, the
objective of this study is to test the validity of
the Keynesian proposition and the Ricardian
equivalence in the case of Sri Lanka using time
series data for the period 1977-2007. This study
also attempts to determine the causal and long
run relationship between budget deficits and
trade deficits as well as the direction of such a
causality. Therefore, it is worth examining Sri
Lankans budget deficit and trade deficit. The
empirical results from such a country enables us
to better understand whether there is a longrun
relationship and causal relationship between
the two variables.
Review of Literature

Empirical research has led to ambiguous results.
Some empirical studies find that higher budget
deficits lead to higher current account deficits,
others show no significant impact at all.
Although many studies examine the relationship
between budget deficits and current account
deficits, no consensus does now days exist about
the exact nature of the link between the two
deficits.
Darrat (1988) has shown the causality
relationship between the trade deficit and
budget deficit of the U.S. using the Granger
causality test. Abell (1990),Alkswani
(2000),Akbostanci and Tunc (2002), Bahmani-
Oskooee (1995), Darrat (1988), Egwaikhide
(1999) , Piersanti (2000), Akbostanci and
Tunc(2002), Tallman and Rosensweig
(1993),Khalid and Guan (1999) Hutchison and
Pigott (1984), Piesanti(2000) among others
support the Keynesian hypothysis that these
twin deficits are positively linked and that
budget deficit causes trade deficits .

77
In Contrast, other studies conducted by
Evans(1998), Enders and Bong-Soo Lee (1900),
Kim (1995) and Miller and Russek (1989)
support the Ricardian equivalence that budget
deficit does not affect trade deficit.
Most empirical studies mentioned above
examined the relationship between the twin
deficits for developed countries. However, there
have been very few empirical studies on
developing countries. Among them are
Islam(1998), which examines the causal
relationship between budget deficits and trade
deficits empirically for Brazil from 1973 through
1991. Using the Granger - Causality test, the
study shows a presences of bilateral causality
between trade deficits and budget deficits.
In summary, there have been numerous
empirical studies examining the twin deficits
problems in developed countries. However, the
number of empirical studies examining the
longrun relationship between budget deficit
and trade deficit in developing countries are
scarce, in spite of the importance of such topic in
the case of many developing countries. Our
study is an attempt to find further evidence of
the relationship between the budget deficit and
the trade deficit by applying the co integration
and the Granger causality tests.
Research problem:
This study explores two empirical issues. (i) Are
these two deficits (twin deficits) statistically
persistent? (ii) Do the budget deficits affect the
trade deficits in Sri Lanka? If so what extent,
what direction? These issues have important
policy implications.
Objectives:
The main objective of this study isto empirically
investigate linkage between the trade deficit and
the budget deficit for Sri Lankan economy
during the period from 1960- 2010. In order to
achieve the main objective the following sub
objectives are investigated
The sub objectives:
i. To investigate the time series
properties of the data series
ii. To study the long run and short
run relationship between these
two deficits
iii. To estimate the speed of the
adjustments
iv. To examine the causality
relationship between these two
deficits
Hypothesis: Four alternative hypothesis are
tested in this study. Namely, (i) Budget deficit
cause trade deficits, (ii) Trade deficits cause
budget deficits, (iii) Two deficits are
independent, (iv) Two deficits are mutually
causal
Theoretical foundations of the "Twin deficits
phenomenon"
The twin deficits phenomenon has been one of
the most controversial subject in modern macro
economy since the Barro(1974). The
conventional view is shown as follows. Twin
deficits are defined as a long run (positive)

78
relationship between the current account and
fiscal balance. National accounts provide for a
clear relationship between budget deficits and
the current account trade deficits. To show the
relationship between these two deficits, we can
use national income accounting identities.
Y = C + I + G + (X- M)--------------------------(1)
Y is Gross Nation Product, C is consumption, I
is the private investment, G is government
expenditure, X is exports, M is imports. Exports
and imports are defined broadly, including
merchandise, services, and investment income,
factor services. T are the direct taxes collected
from households and firms.Current account
deficit, CA=X-M. One can easily rewrite this
identity by using after tax , T, equals
Y=C+G+I+CA------------------------------------(2)
(Y-T-C)-(G-T)-I=CA, where Y
d
=Y-T---------(3)
Sp-Sg-I=CA, Sg= government saving,
Sp=private saving, S-I=CA, this means that the
current account balance has to equal the
difference of national savings( S=Sp+Sg) and
investment in the economy. National savings is
defined as income less private and public
consumption (S=Y-C-G) , We can write this
equation in other form
Sp+Sg-I=CA
Sp-(G-T)-I=CA
(Sp-I)-(G-T)=CA ---------------------------------(4)
Public savings, S
G
, correspond to the fiscal
budget position, defined as the difference
between tax income, T, and expenditure
similarly, private savings Sp, are defined as
disposable income, that is , income less tax (Y-
T) and private consumption. It is important to
note that this relationship is an accounting
identity. This identity rarely adds up, however,
because the variables are not typically measured
accurately. These two deficits are related to each
other according to this accounting identity. If the
difference between private saving and
investment (S
p
-I) is constant , an increase of
budget deficit will influence positively the
current account deficit. This equation indicates
that a worsening budget deficit will lead to a fall
in the current account balance while other
variables are constant. If other variables change,
they can also cause current account deficits as
well.
In this case, the trade balance simply equals
to the saving investment gap minus the
budget deficits . Thus assuming a stable
saving investment gap , an increase in public
sector deficit will directly increase the trade
deficit ,which is the conventional view of twin
deficit relationship .
According to the Mundell-Fleming model,
changes in the budget deficits trigger changes in
the real interest rate, the real exchange rate, and
the level of real income, which in turn alter the
trade balance. An increase in the budget
deficit will cause an increase in the aggregate
demand and domestic real interest rates. High
interest rates will cause net capital inflow from
abroad and results in appreciation of the
domestic currency. This in turn will adversely
affect net exports due to higher value of the

79
domestic currency and thus there will be
deterioration in the current account.
The Ricardian Equivalence Proposition
(REP)
The Ricardian Equivalence Proposition
stipulates that budget and current account
deficits are independent. Under some restrictive
assumptions, the budget deficit does not affect
the current account. REP claims that there is no
causal link between public sector deficit and
external sector deficit; therefore the deficits are
not twins. According to this hypothesis, the
equilibrium levels of current account, interest
rates, investment and consumption will not be
affected by the changes in the level of budget
deficit. The validity of the Equivalence
hypothesis depends on some powerful
assumptions such as public purchases remain
unchanged.
Data and Methodology
Data and Variables:
This study used annual data from 1960 to 2010.
The data were collected from 2010 Annual
report of Central Bank of Sri Lanka. The
variables used in this study are budget deficits
(BD), Balance of payments current account
deficits (TD), GDP deflator(GDPD).
Data were transformed into Absolute form then
log transformation is done.

The empirical relationship between budget and
current account deficits in Sri Lanka is
investigated using the following three steps
approach. Firstly, graphical methods and unit
root test: line graphs, Correlogram,
autocorrelation function, confidence ellipse,
Histogram, Kernal density graphs, summary
statistics are used to explore and describe the
time series properties of the BD, TD series. The
correlogram is a visual approach to check serial
correlation at the empirical pattern of correlation
between the series, TD ,BD, and their own past
values. Confidence ellipse helps us understand
the joint distributions of BD and TD. The
Newey-West method is used to correct the OLS
standard errors for heteroscedasticity and
autocorrelation. The Eviews software is used for
the model estimation in this study.

Unit root test: In order to test the unit roots of
concerned time series variable, two most popular
techniques have been used: the Augmented
DickeyFuller ( ADF,1981) test and the
PhillipsPerron (PP,1988) test. These tests have
been performed in the levels as well as in the
first differences. To determine the non-
stationary property of these two time series
variables both in the levels and in the first
difference, at first, the relevant ADF test has
been employed with time trend. The ADF test is
a modification over the DF test and lagged
values of the dependent variables are added in
the estimation of equation (i) which is formed
as follows :

t 1 1 t 1 t t
u Y X Y ) 1 ( Y + A o + + + o = A

(i)

80
Where = autocorrelation coefficient. Since it is
widely believed that ADF test does not consider
the case of heteroscedasticity and non-normality
frequently revealed in raw data of economic
time series variables, the PP test for unit root has
been used in the empirical analysis. Moreover,
it has an advantage over the ADF test when the
concerned time series has serial correlation and
there is a structural break. Therefore, the PP test
provides robust estimates over the ADF test and
is based on the following form of equation:

t t t t
u Y
T
t Y Y
2 1 1
)
2
( ) 1 ( + A + + + u = A

(ii)
The appropriate critical values of the
Statistics t for the null hypothesis of non
stationary are given by Mackinnon (1991).
Secondly, cointegration technique and Error
correction model are employed to study the long
run and short run relationship between trade
deficits and budget deficits. Engle and Granger
(1987) and Phillips and Ouliaris (1990) single
equation residual based test is performed to
analyse the cointegration relationship.
Residual-based Tests :
Consider the following regression
t t 1 0 t
u x y + | + | = . For the estimated model,
the sample regression function would be written
t t 1 0 t
u x

y + | + | = . This can be rearranged as
follows
t 1 0 t t
x

y u | | = . This ( u ) is a linear
combination of the variables y and x. Typically,
the linear combination of I(1) variables will be
itself be I(1). But, if the x and Y are
cointegrated, u , the linear combination x and y
would be stationary, I(0).
The Engle-Granger(EG), and Phillips-Ouliaris
residual-based tests for co-integration are simply
unit root tests applied to the residuals obtained
from OLS estimation of the regression equation,
t t 1 0 t
u x y + | + | = .
) 0 ( I ~ u : H
) 1 ( I ~ u : H
1
0

The null hypothesis of no co-integration against
thealternative of co-integration corresponds to a
unit root test of the null of non-stationarity
against the alternative of stationarity. If this null
hypothesis is not rejected, there is no co-
integration. If the null of a unit root in the
potentially co-integrating regressions residuals
is rejected, the linear combination of the non-
stationary variables, u would be stationary which
implies that x and y are co-integrated.
The EngleGranger(1987) two stage co
integration procedure and the associated Error
Correction Model (ECM) employed to examine
the short-run and longrun relationship between
trade deficit and budget deficit. Co-integration of
two or more time series suggests that there is a
long-run, or equilibrium relationship between
them. If the two time series are integrated of the
same order then the estimation of the following
co integration regression has been considered :

81

t
t
*
2 1
t
*
U BD TD + | + | = --------------(i)
Where,
*
TD = log of trade deficit ,
*
BD = log of budget deficit , and u is a random error terms. The
estimated residuals series is
*
t 2 1
*
t
BD TD U
. . .
| | = ---------(ii)

The ADF and PP unit root tests have been
employed for residuals of equations (ii) i.e t u
.
.
When residuals are found to be integrated of
order zero, ) 0 ( I , then it can be concluded that

the two series,
*
t
TD and
*
t
BD are co-
integrated. This implies the existence of a stable
long-run relationship between trade deficit and
budget deficit. If ) 0 ( I ~ U
t
.
then the
t
TD and
t
BD variables are said to be co-integrated. The
Granger representation theorem states that if
two variables are X, Y are co-integrated, then
the relationship between the two variables can be
expressed as ECM. To examine the long run and
short run linkage between trade deficit and
budget deficit, we further employ error-
correction model. The basic structure of an Error
Correction Model( ECM)can be written as
t
1 t
*
1 0
1 t
*
2
t
*
1 0
t
*
) BD

TD ( BD TD c + | | o + A o + o = A
,
t 1 t 2
t
*
1 0
t
*
) EC ( BD TD c + o + A o + o = A

where EC is the error correction component of
the model and measures the speed at which prior
deviations from long run equilibrium are
corrected. This model can be used to estimate
short term effects, long term effects (long run
multiplier), and the speed at which TD*
t
returns
to equilibrium after a change in BD*
t
. Therefore
this method is used to search the relationship
between the internal and external deficit both in
the shortrun and longrun. This model
expresses error correction mechanism using
combination of first differenced and lagged
levels of co-integrated variables. The difference
between TD*
t-1
and 1 t
*
2
BD | in the ECM
measures the extent disequilibrium. This error
term is used study the short run behavior of the
BD*
t.
to its long run equilibrium value.
1
o is the
short run multiplier, determining the immediate
impact of a change in BD*
t
on TD*
t
.
2
o
describes the speed of adjustment back to
equilibrium. ECM shows that there are two
systematic effects on the changes t
*
TD A of the
dependent variable. t
*
1
BD | is the instantaneous
multiplier effects due to changes in the BD*.
2
|
concerns deviations from the long run
equilibrium relation 1 t
*
2 0
1 t
*
BD TD | + | = .
Third, Granger causality test is employed.
Granger causality test states that if TD and
BD are two time series variables and if past
values of a variable TD significantly contribute
to forecast the value of another variable BD,
then TD is said to Granger cause BD and vice
versa. The test involves with the following :

82

Where TD and BD the trade deficit and budget
deficit and U
1t
and U
2t
are mutually
uncorrelated white noise errors, and t denote the
time period. Equation(1) postulates that current
TD is related to past values of TD as well as to
past values of BD. Similarly, equation (2)
postulates that BD is related to past values of BD
as well as related to past values of TD. The null
hypothesis for equation (1) is that there is no
causation from BD to TD, thus the coefficient
on the lagged BD not significant,
=
= o
n
1 i
i
0 .
Similarly, the null hypothesis for equation (2) is
that there is no causation from TD to BD , thus
the coefficients of lagged TD are not
significant ,
=
= o
n
1 j
j
0 . Three possible conclusion
that can be addressed from such an analysis
include unidirectional causality, bi-directional
causality, and are independent to each other.

Empirical Analysis.
Looking at the raw data may tell us considerable
things. Graphs reveal a large amount of
information about the data series. Graphical
analysis is used to get a preliminary and
informal idea of the nature of the
trend,seasonality, cycles, as well as the nature
and location of any unusual observations.The
basic Eviews tools are used to examine the data
series in a variety of ways.

Figure 1 : Time path of BD and TD behavior
u
t 1
j t
n
1 j
j i t
n
1 i
i 0 t
TD BD TD + | + o + =
=

u
t 2
j t
n
1 j
j i t
n
1 i
i 1 t
TD BD BD + o + + =

=
=


83
Figure 1 shows that both deficits are increasing
with downward trend. Budget deficits are higher
than trade deficits along the all sample period
except 2008. The difference is also increasing
with time. The following histograms and
summary statistics show the characteristics of
the BD, TD series.

Figure 2: Histogram and summary statistics of BD and TD series-level form
The histogramsof both series display the
frequency distribution that are negatively
skewed. Skewness statistics indicate the negative
skewness of the series. Negative skewness
implies that the distribution has a long left tail.
TD series has higher negative skewness (-2.0)
than that of the BD series (-0.7). Variability is
high in size and TD has relatively high
variability than that of BD. Kurtosis statistic (k)
shows the thickness and peakedness of the TD
and BD distributions The TD distribution has fat
tail (k=9.5) than that of BD distribution (k=3.1).

Figure 3 highlights the volatility fluctuations of TD and BD growth rates. This graph provides the time
path of the TD and BD growth rate behavior.

Figure 3: growth rate of BD and TD
There have been greater fluctuations in trade
deficits growth rate than budget deficit growth
rate. TD distribution volatility is more
(CV=23.8) than the volatility of BD distribution
0
4
8
12
16
20
-120000 -80000 -40000 0
Series: TD
Sample 1960 2010
Observations 51
Mean -24596.73
Median -17919.89
Maximum 9984.375
Minimum -141112.3
Std. Dev. 25572.06
Skewness -2.004387
Kurtosis 9.513017
Jarque-Bera 124.2905
Probability 0.000000
0
2
4
6
8
10
12
-160000 -120000 -80000 -40000 0
Series: BD
Sample 1960 2010
Observations 51
Mean -48325.30
Median -46131.58
Maximum -7397.541
Minimum -150842.6
Std. Dev. 34931.80
Skewness -0.735987
Kurtosis 3.100231
-3
-2
-1
0
1
2
3
4
1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
GRBD GRTD

84
(CV=5.5) . Both series tend to converge towards the balance position.

Figure 4: Histogram and summary statistics of TD and BD

The kernel density function is an alternative tool
to the histogram. Density estimates can give
valuable indication of such features as
skewnessand multimodality in the data. Kernel
density distributions for BD and TD series are
given below.

Figure 2: Kernel density of the distributions
The simple scatter diagram does not explicitly
show the direction of relationship between these
variables. Therefore, the relationship between
TD and BD variables was checked and identified
by using confidence ellipse, Nearest Neighbour
fit, kernel fit and ols regression fit.
Confidence Ellipse Regression line

0
4
8
12
16
20
-3 -2 -1 0 1 2 3
Series: GRTD
Sample 1960 2010
Observations 50
Mean 0.047353
Median -0.044065
Maximum 3.091332
Minimum -2.895002
Std. Dev. 1.119298
Skewness -0.129769
Kurtosis 4.368684
0
2
4
6
8
10
12
-0.6 -0.4 -0.2 0.0 0.2 0.4 0.6 0.8 1.0 1.2
Series: GRBD
Sample 1960 2010
Observations 50
Mean 0.055415
Median 0.064486
Maximum 1.113692
Minimum -0.618692
Std. Dev. 0.305093
Skewness 0.718954
Kurtosis 4.873381
.000000
.000004
.000008
.000012
.000016
.000020
-180,000 -140,000 -100,000 -60,000 -20,000 0 20,000
D
e
n
s
i
t
y
TD
.000000
.000002
.000004
.000006
.000008
.000010
.000012
-200,000 -160,000 -120,000 -80,000 -40,000 0 20,000
D
e
n
s
i
t
y
BD
-150,000
-125,000
-100,000
-75,000
-50,000
-25,000
0
25,000
50,000
-160,000 -80,000 -40,000 0 40,000 80,000
BD
T
D
-3
-2
-1
0
1
2
3
-0.8 -0.4 0.0 0.4 0.8 1.2
GRBD
G
R
T
D

85
Kernel Fit Nearest Neighbor Fit

Figure 3: the relationship between TD and BD
Kernel fit displays the local polynomial kernel
regression fit of the TD series on the BD series.
The nearest Neighbour fit displays local
polynomial regressions for the series with
bandwith based nearest neighbours. The results
show that kernel fit and nearest and neighbor fit
are broadly similar. Confidence ellipse displays
the confidence region around the means. Except
the first three points, these graphs clearly show
that the relationship between BD and TD is
positive and nonlinear.

Unit root test: the first step of theco-
integration analysis is to examine the time series
properties of the series. ADF and PP tests are
done to examine the stationarity of the series.
The results of ADF and PP tests are given in the
following table.
Table 1: Results of unit roots for the variables.
Series ADF PP Order
Levels 1
st
differences

Levels

1
st
Differences order

TD
-0.7831
(0.8130)
-3.9565
(0.0040)
-1.9288
(0.0521)
-12.3797
(0.000)
I(1)

BD
0.7537
(0.9922)
-10.36352
(0.000)
-0.058237
(0.9481)

-10.43433
(0.000)
I(1)
Note * denotes 5% level of significance based on the MacKinnon critical values.
-160,000
-120,000
-80,000
-40,000
0
40,000
-160,000 -120,000 -80,000 -40,000 0
BD
T
D
-160,000
-120,000
-80,000
-40,000
0
40,000
-160,000 -120,000 -80,000 -40,000 0
BD
T
D

86

In the unit root test procedure, for both series lag
length in the ADF test procedure was selected
based on automatic based on AIC with
maxlag=10. In the PP test procedure, lag length
was selected based on spectral OLSde-trended
AR based on SIC, maxlag-10. Bandwidth is
selected using BarlettKernel(Newey West
automatic). Empirical results (Table 1) shows
that all variables are stationary in first
difference.It implies that BD and TD are
stochastic non-stationary series and are
distributed as ~I(1).
Results of Co-integration analysis
ADF test and PP test from table 1 showed that
these variables are non-stationary series in level
form. Therefore we use Engle and Granger
cointegration methodology. The coefficient
covariance estimators were estimated using
HAC(heteroscedasticity and autocorrelation
consistent) when the model exists with both
serial correlation and heteroscedasticitys of
unknown form. The cointegration regression was
estimated with the following option:

HAC standard errors & covariance (Prewhitening with lags = 1 from AIC ,
maxlags = 3, Bartlett kernel, Newey-West fixed bandwidth = 4.0000)
Cointegration regression is estimated in two ways. One is TD aa dependent variable. Other one is BD as a
dependent variable.
The estimated cointegration regression of BD is as follows
(0.000) (0.0000) value p
LTD 525887 . 0 435015 . 5 D
LB + =

Then, the cointegrating regression residuals were tested using ADF and PP tests. The results are given in
table 3.
Table 2: Unit Root Test for the Residuals of the cointegrating regression model of BD
Error term ADF PP Decision
t
u
-4.794693
(0.0003)
-4.85999
(0.0002)
) 0 ( I


87
The above results show that the estimated
residuals are mean reverting and stationary,
hence, TD and BD series are co-integrated. The
estimated cointegrated behavior is shown below.
The adequacy of the model is assessed by
plotting and examining the actual data , the fitted
values and the residuals. The fitted values track
the actual values fairly well except in the latter
part (2008s). there is a pattern of
heteroscedasticity.
(0.0018) (0.7667) value p
LBD 004500 . 1 954659 . 0 D
LT + =

Table 2: Unit Root Test for the Residuals of the cointegrating regression model of TD
Error term ADF PP Decision
t
u
-6.707016
(0.000)
-6.707016
(0.000)
) 0 ( I

Equilibrium correction model estimation.
Granger representation theorem states that if two
variables, BD,TD are cointegrated, then the
relationship between the two can be expressed as
error correction model. The model is estimated
using OLS method and the standard errors for
OLS estimators are corrected for autocorrelation
and heteroscedasticity by Newey and West
procedure. Thecorrected standard errors are
heteroscedasticity and autocorrelation consistent.
Lag selection was done by auto AIC method.
Error correction model results are given below.

Table 3: The estimates of Error Correction Model
ECM Dependent variable Adjustment Coefficient
EC term ( o ) LBD -0.2193(0.044)
EC term( )
LTD -0.9094(0.000)*
Short run dynamic relationship between budget
deficit and trade deficit is explained by the error
correction model. Estimated error correction
model shows that changes in TD
t
( TD A )
depends on changes in BD ( BD A ) and also on
the equilibrium error terms. Results shows that
short run changes in BD have a statistically
significant positive impact on short run changes
in trade deficit. The impact multiplier, short run
marginal impact of BD is 0.368078 which is the

88
immediate impact of a change in BD on a
change in TD
t
.
The coefficient of the error correction
term,feedback effect, , adjustment coefficient,
shows how much of the disequilibrium is being
corrected. The estimates, , measures the
proportion of last periods equilibrium
error(disequilibrium) that is corrected for and
also describes the speed of the adjustment back
to equilibrium. The estimated adjustment
coefficient is negative and statistically
significant ( -0. 9094)at 5 % level.It indicates
that 91% adjustment take place in every year.
That is 0.9094 of the deviation of the actual
trade deficit from its long run equilibrium level
is corrected each year. The negative value of (
<0)indicates that
1 t 1 t
BD
TD

| > . This leads
to a downward adjustment of TD
t
in the
direction of equilibrium. The error correction
term works to push TD back towards
equilibrium. The long run marginal impact is
0.2972 which is estimated from cointegration
equation. In the error correction model of BD,
short run marginal impact of A TD is not
statistically significant. However, Adjustment
coefficient is -0.2193 (0,04) is statistically
significant. 21 % adjustment take place in every
year.
We used the EngelGranger method as
alternative techniques to see the direction of
causality as the last step. Results of the causality
test are reported in the table 4. These results
suggest that the causality ran in both direction
for lag 1. The estimated F value is significant the
5% percent level.

Table 4: Granger causality test
Lags: 1

Null Hypothesis: Obs F-Statistic Prob.

TD does not Granger Cause BD 50 8.76565 0.0048
BD does not Granger Cause TD 9.78034 0.0030

these results suggest that the both variables are causal relationship in both direction.

Conclusion
This study investigates the long run relationship
between the budget deficit and trade deficit for
Sri Lankan economy during the period of 1960-
2010 by using the co-integration, error
correction model, and Granger causality test.
This enabled us to search the relationship

89
between the internal and external deficits both in
the shortrun and in the longrun.
The empirical results from this study shows that
the deficits could be twins as stated under
Mundell-Fleming analysis: government budget
deficits cause trade deficits as well as trade
deficit cause budget deficits. Our analysis
showed that there exist statistically significant
longrun positive relationship between the trade
deficit and the budget deficit. The Granger
causality test shows that causality runs from the
budget deficit to the trade deficit as well as from
trade deficits to budget deficits. This study
supports the Keynesian view that there is a
linkage between the trade deficit and the budget
deficit and the two way Granger causality
between BD and TD is observed in Sri Lanka.
Since the two deficits are co-integrated, the
Ricardian equivalence hypothesis is not valid in
Sri Lankan economy during the study period.
Therefore, the results suggest that both deficits
are important policy measures in Sri Lanka. Sri
Lanka needs to implement policies to raise the
level of domestic savings. These policies could
include an efficient tax reforms in line with more
efficient tax administration and

tax collection. Further, Sri Lanka needs some
policies including improving the terms of trade,
a sustained effort to promote private saving and
fiscal consolidation to raise public saving.
Measures focusing on productivity and
efficiency improvement, exchange rate and
monetary stance will complement the budget cut
policy. Moreover, improving the government
delivery system using new technology such as
the information and communication technology
(ICT) can improve the budget deficit problem.
Policies to attract foreign direct investment in
key sectors of the economy should be
encouraged. Opening key sectors such as
information and communication technology
(ICT), education, healthcare, financial service,
insurance and tourism sectors will reduce the
burden on the government to develop these
sectors.
The future study will investigate whether
there is any linkage between the interest rates
and exchange rates and how they are related
to the twin deficits.

90

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Approach to Balance of Payments and
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the Current Accounit?, American Economist,
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Journal of Management, Vol. VII No.1 Assessing Business-IT Alignment.....

93

Assessing Business - IT Alignment Maturity : Evidence from selected
companies in Sri Lanka

Ilmudeen, A.
Faculty of Management and Commerce
South Eastern University of Sri Lanka, Oluvil
ilmudeen16@gmail.com

Abstract
Identifying an organizations alignment maturity provides an excellent vehicle for understanding
and improving the business-IT relationship. Alignment addresses both how IT is in harmony with
the business, and how the business should, or could be in harmony with IT. Alignment evolves
into a relationship where the function of IT and other business functions adapt their strategies
together. This research discusses an approach for assessing the maturity of the business-IT
alignment. Once maturity is understood, an organization can identify opportunities for
enhancing the harmonious relationship of business and IT. This research provides a
comprehensive vehicle for organizations to evaluate business-IT alignment in terms of where
they are and what they can do to improve alignment. A survey research method was applied to
gather data. The structured questionnaire consists 39 questions to measure business - IT
alignment. The selected companies' alignment measured by focusing six IT- business alignment
maturity criteria. This research shows that Hirdaramani group score highest business - IT
alignment maturity that is 3.972. Daya group score second Business- IT alignment maturity
that is 3.028 and the company EAM Maliban textile score 2.766 as the lowest business - IT
alignment maturity.

Keywords - Assessing, Alignment, Maturity, IT

Introduction
Business-IT alignment refers to applying
Information Technology (IT) in an suitable
and timely way, in harmony with business
strategies, goals and needs. This definition
of alignment addresses: how IT is aligned

with the business? and how the business
should or could be aligned with IT?.
Maturing alignment evolves into a

relationship where IT and other business
functions adapt their strategies together. The
purpose of this research is to present an
approach for assessing the maturity of a

94
firms business-IT alignment. Achieving and
sustaining IT-business alignment continues
to be a key issue in this global era. There is
no single activity will enable a business firm
to achieve and sustain alignment because
there are too many dynamic variables.
Alignment seems to grow in importance as
companies attempt to link technology and
business in light of dynamic business
strategies and continuously evolving
technologies (Papp, 1995; Luftman, 1996). I
have selected 3 companies namely
Hirdaramani Group, Daya group and EAM
Maliban Textiles (Pvt) Ltd. These three
companies are in the apparel industry in Sri
Lanka. Hirdaramani has 120 year heritage
and one of the leading garments
manufacturer in Sri Lanka. Today they have
over 30,000 employees spread across six
countries and six industries. Their
production facilities across Sri Lanka,
Bangladesh and Vietnam are capable of an
output of approximately 13 million articles
of clothing each month. Daya Apparel
started in 1992 and has become one of the
top 5 garment manufacturers in Sri Lanka
employed with 10, 000 workers. From an
initial concept to final product, Daya
apparels state of the art facilities help to
create outstanding end products. EAM
Maliban Group was established in 1974 and
is now recognized as a top manufacturing
giant for garment manufacturing and wet
processing in Sri Lanka. It is the leading
apparel manufacturing icons in Sri Lanka
which employees over 8000 skilled labor,
equipped with over 10 state of the art
manufacturing facilities in Sri Lanka and
Jordan. EAM Maliban produces around 18
million woven garments a year together with
another 2 million wet processing pieces.

Why Alignment is Important ?
Alignment seems to grow in importance as
companies struggle to link technology and
business in light of dynamic business
strategies and continuously evolving
technologies (Papp, 1995; Luftman, 1996).
Alignment addresses both doing the right
things (effectiveness), and doing things right
(efficiency). In recent years, a great deal of
research and analysis focused on the
linkages between Business and IT (Luftman,
Papp, & Brier 1995; Luftman & Brier 1999;
Luftman, 1996; Earl, 1993; Henderson,
Thomas & Venkatraman, 1992,), Firms need
to change not only their business scope, but
also their infrastructure as a result of IT

innovation (Keen, 1991; Foster, 1986; Weill
& Broadbent, 1998). Alignment maturity
develops into a relationship where the
function of IT and other business functions
adapt their strategies together. Achieving
alignment is evolutionary and dynamic. IT
requires strong support from senior
management, good working relationships,
strong leadership, appropriate prioritization,
trust, and effective communication, as well
as a thorough understanding of the business
and technical environments. Achieving and
sustaining alignment demands focusing on
maximizing the enablers and minimizing the
inhibitors that cultivate the integration of IT
and business.

95

The Six Strategic Alignment
Maturity Criteria
1. Communications Maturity: How well
do the technical and business individuals
understand each other? Do they connect
easily and frequently? Does the company
communicate effectively with
consultants, vendors and partners? Does
it disseminate organizational learning
internally?.

2. Competency/Value-Measurement
Maturity: How well does the company
measure its own performance and the
value of its projects? After projects are
completed, do they evaluate what went
right and what went wrong? Do they
improve their internal processes so the
next project will be better?

3. Governance Maturity: How well the
company connect its business strategy to
IT priorities, technical planning and
budgeting? Do the projects they
undertake flow from an understanding of
the business strategy? Do they support
that strategy? Simply put IT governance
is about who makes the decisions
(power)?, why they make
them(alignment)? and how they make
them (decision process)?.

4. Partnership Maturity: To what extent
have business and IT departments forged
true partnerships based on mutual trust
and sharing risks and rewards? Its not
enough to have excellent IT strategies
and implementation plans on paper. CIOs
must convince peer executives of the

corporate value of their strategies. CIOs
should have an intimate knowledge of the
business and industry theyre working in,
thereby improving their interactions with
business executives, and they should have
personal relationships with other
executives in their companies.

5. Scope and Architecture Maturity: To
what extent has technology evolved to
become more than just business support?
How has it helped the business to grow,
compete and profit? This concept is
critical as corporations grow and the need
for integration across the enterprise and
its external partners increases. Integration
is a business need, and the technology
mechanisms wont help without the
proper organizational structures, goals
and incentives. Business processes are the
vital link between the technical and
organizational infrastructures of a
company.

6. Skills Maturity: Does the staff have the
skills needed to be effective? How well
does the technical staff understand
business drivers and speak the language
of business? How well does the business
staff understand relevant technology
concepts? IT is becoming less expensive,
while IT labor is becoming more
expensive, especially as a portion of the
total IT budget. But if IT is to rise to the

96
challenge of being an enabler and indeed
a shaper of overall business strategy, the
role of skilled IT professionals becomes
even more critical than in the past.

Objective of the research
The purpose of this research is to find out
the business - IT alignment maturity for the
selected companies in Sri Lanka. Researcher
referred some research article which
addresses the above issue in different
context and which were encouraged the
researcher to explore further on this aspect.
This research has the following objectives:
1. Assess the business IT - alignment
maturity for the selected companies.
2. Find the possible ways to get better
business - IT alignment maturity.

Literature Review
The alignment maturity assessment
approach described in this research provides
a complete vehicle for organizations to
assess business-IT alignment in terms of
where they are and what they can do to
improve alignment. The researcher referred
a few articles which are related context in
different countries. For example Jerry
Luftman in 2000 "Assessing Business-IT
Alignment Maturity" and Steven De Haes,
Roaier Haest and Wim Van Grembergen in
2010 did a survey on "IT Governance and
Business-IT Alignment in SMEs" in

Netherlands. They concluded that, SME's in
Netherlands were on average not very IT-
intensive and score low in the field of
business and IT alignment. further Ivor
Jonathan Farrell in 2003 did a research in
Australia for his Doctorate thesis on
"Aligning IT to Corporate Objectives:
Organizational Factors in Use". He
concluded that, to align IT with an
organization's corporate objectives, It
requires an organization to be aware of
twenty-one factors that can affect IT
alignment, and for the organization to ensure
they are present or used not only according
to a set of characteristics, but also according
to inter-relationships and dependencies
between certain factors. finally Luftman,
Papp, & Brier, 1995; Luftman & Brier,
1999, did a research and identified the
enablers/inhibitors to achieving alignment
and the authors consulting experience that
applied the methodology that influences the
most important enablers and inhibitors as
building blocks for the evaluation. However
this research focuses measuring business -
IT alignment maturity status with respect to
3 selected companies in Sri Lanka.

Methodology
Interview with structured questionnaire
method was applied to gather data from the
selected companies. Questionnaires includes
Likert scale questions to find the answers for
the question. Data were obtained from head
of IT or IT manager by directly visiting their
company. The head of IT or IT manager
(one person from each company) was

interviewed with the structured
questionnaire to collect the data. Six

97
business - IT alignment maturity
criteria/domains (Appendix1:
Communications, Competency, Governance,
Partnership, Scope & Architecture and
Skills) consist 39 sub criteria (questions).
Each of the criteria and levels are described
by a set of attributes that allow a particular
dimension to be assessed using a 1 to 5
Likert scale questionnaire. where:
1 = This does not fit the organization, or the
organization is very ineffective
2 = Low level of fit for the organization
3 = Moderate fit for the organization, or the
organization is moderately effective
4 = This fits most of the organization
5 = Strong level of fit throughout the
organization, or the organization is very
effective
Above 39 sub criteria (questions) were
divided among the six business - IT
alignment maturity domains. Then the each
domain's average was calculated to measure
the each domain status in terms of business-
alignment. After assessing each of the six
criteria from level 1 to 5, results were used
to get an overall assessment level of the
maturity for each firm. Collected data were
entered to excel sheets and derived the
relevant charts.

Results and Discussion of Findings
Success of the organization depends on the
effective implementation and alignment of
the Information Technology product and
services. Business-IT alignment maturity
refers to applying IT in an appropriate and
timely way, in harmony with business
strategies, goals and needs. Alignment
addresses both how IT is aligned with the
business, and how the business should or
could be aligned with IT. Identifying an
organizations alignment maturity status
provides an excellent vehicle for
understanding and improving the business-
IT relationship. It requires strong support
from senior management, good working
relationships, strong leadership, appropriate
prioritization, trust, and effective
communication, as well as a thorough
understanding of the business and technical
environments. Alignment seems to grow in
importance as companies attempt to link
technology and business in light of dynamic
business strategies and continuously
evolving technologies. Nowadays IT
investment has been increasing for years as
managers are looking for ways to manage IT
successfully and to integrate it into the
organizations strategies. The below chart
shows the overall business-IT alignment
maturity status for the 3 selected companies.

Figure 1. Business - IT Maturity Status of 3
Companies
3.972
2.766
3.028
1.000
1.500
2.000
2.500
3.000
3.500
4.000
4.500
5.000
Hirdaramani
Group
EAM Maliban
Group
Thaya Group
M
a
t
u
r
i
t
y

S
c
a
l
e

Companies
Overall Business - IT Maturity Status

98
The following charts show the business-IT
alignment maturity status for each company
individually by focusing the six strategic
alignment maturity criteria. The average
maturity status of each company represented
in the above chart as a overall business- IT
Maturity status.

Figure 2. Business - IT Maturity Status of
Hirdaramani Group

Figure 3. Business - IT Maturity Status of Daya
Group

Figure 4. Business - IT Maturity Status of EAM
Maliban Group
It shows that, the organization with the
lower business - IT alignment results clearly
had a lower business - IT alignment maturity
status compared to the organization with the
highest business - IT alignment. It is proved
that, Hirdaramani Group Score the highest
3.972 business - IT alignment maturity and
the company EAM Maliban Group Score the
lowest 2.766 business - IT alignment
maturity and Daya group it has 3.028 score
for Business- IT alignment maturity.

The reason for Hirdaramani Group's status
is, they have implemented whole systems in
a well established way. They implemented
their system and IT service in a fully
structured way and now they are in a
position to taste the benefits. further
Hirdaramani Group possess better IT
governance, sophisticated IT infrastructure,
better steering committee, well structured IT
architecture, strategic IT plan, trained and
skilled labor force, excellent IT risk
management, better business continuity and
disaster recovery plan, secured IT systems,
and good help desk. During the data
collection the Hirdaramani IT manager
3.833
4.143
3.714
4.167
3.833
4.143
1.000
2.000
3.000
4.000
5.000
Hirdaramani Group
Hirdaramani Group Maturity
3.167
3.286
2.286
2.500
3.500
3.429
1.000
2.000
3.000
4.000
5.000
Daya group
Daya group Maturity
2.667
3.429
2.714
2.500
3.000
2.286
1.000
2.000
3.000
4.000
5.000
EAM Maliban Group
EAM Maliban Group Maturity

99
indicated that, their systems are successfully
implemented and they have the good IT help
desk support for the IT issues. Further he
mentioned, they have implemented
Microsoft Dynamics AX ERP system and
getting solution from the developer on
demand.

In case of Daya group, it possess the
average status on their IT infrastructure and
architecture, strategic IT plan, securing IT
systems, business continuity and disaster
recovery plan. It means the Daya group not
that much succeeded on their business IT
alignment. They need a good IT practices to
get better business - IT Alignment status.
Further the company EAM Maliban Textiles
they have the lowest status of maturity on
business-IT alignment. comparatively they
are poor in IT infrastructure, steering
committee, IT architecture, strategic IT plan,
skilled labor force, business continuity and
disaster recovery plan, IT risk management
and securing IT systems. The good business
IT alignment maturity is determined by the
well structured and managed business-IT
alignment maturity criteria. So, this
company needs a better maturity in the
following domains such as Communications
Maturity, Competency/Value-Measurement
Maturity, Governance Maturity, Partnership
Maturity, Scope and Architecture Maturity,
and Skills Maturity.

Suggestions for Better Business - IT
Alignment Maturity
Improving better business IT Alignment
maturity will increase operational
efficiencies, greater resource utilization,
uplift the return from IT investments, and
reduce risk. To get better business IT
alignment maturity status organizations
should do IT governance maturity
assessments in line with industry best
practice frameworks such as COBIT and
ValIT, implementing standardized IT
governance structures and processes, IT
demand and portfolio management to
facilitate stronger business and IT alignment
through an IT demand and portfolio
management, investment governance to
assess the current investment structure and
processes, and establish an IT project
portfolio performance management
framework, IT performance management
services in line with strategic objectives and
our performance management framework, to
secure business - IT alignment keep eye on
the role of IT, the business environment, IT
management intensity, and IT metrics,
understand the business priorities and
proactively formulate business IT
initiatives, Ensures that IT support the
business and development toward
organizational needs, not individual desires,
improve communication and develop an
understanding of our organization's core
vision and objectives.

Conclusion
Achieving and sustaining IT-business
alignment maturity continues to be a key
issue. There is no single activity will enable
a business firm to achieve and sustain

100
alignment because there are too many
variables. The technology and business
environments are too dynamic in this global
era. The strategic alignment maturity
assessment provides a vehicle to evaluate
where an organization is and where it needs
to go to achieve and sustain business-IT
alignment. Alignment addresses both doing
the right things (effectiveness) and doing
things right (efficiency). Business firms
need to change not only their business
scope, but also their infrastructure as a result
of IT innovation. The vigilant assessment of
a firms alignment maturity is a significant
step in identifying the specific actions
necessary to ensure IT is being used to
appropriately enable or drive the business
strategy. Aligning and governing IT product
and services with business goals ensures that
IT product and services utilized at optimum
level. Alignment of business and IT is
essential for a successful organization.

References :
Bruce Campbell, Robert Kay and David
Avison " Strategic alignment: a
practitioners perspective" Journal of
Enterprise Information Management, Vol.
18 No. 6, 2005 pp. 653-664 q Emerald
Group Publishing Limited , 1741-0398, DOI
10.1108/17410390510628364

Cobit Quickstart, 2nd Edition , It
Governance Institute, 2007

Ivor Jonathan Farrell , May 2003 " Aligning
IT to Corporate Objectives: Organizational
Factors in Use" , thesis in Doctorate of
Business Administration, Macquarie
Graduate School of Management,
Macquarie University, Sydney

Jerry Luftman " Assessing Business-IT
Alignment Maturity" Communications Of
Association For Information System,
Volume 4, Article 14, December 2000

John O. Burdett " The Magic of Alignment ",
Management Decision, Vol. 32 No. 2, 1994,

pp. 59-63, MCB University Press Limited,
0025-1747

Luftman, J. and Brier, T., (1999) Achieving
and Sustaining Business-IT Alignment,
California Management Review, No. 1, Fall
1999, pp 109-122.

Ravi Kathuri, Maheshkumar P. Joshi and
Stephen J. Porth "Organizational alignment
and performance: past, present and future"
Management Decision, Vol. 45 No. 3, 2007,
pp. 503-517,q Emerald Group Publishing
Limited, 0025-1747, DOI
10.1108/00251740710745106

Steve De Haes, Roaier Haest, Wim Van
Grembergen " IT Governance and Business
- IT Alignment in SMEs", ISACA Journal
Volume 6 , 2010.

A Trestle Group Research Publication
"Measure Your Business-IT Alignment",
Executive Briefing


101

Appendix 1: Six IT Business Alignment Criteria

Source : J.Luftman, Assessing Business Alignment Maturity, Communications of the
Association for Information Systems, Volume 4, Article 14, December 2000, Page 12
Journal of Management, Vol. VII No.1 A Case Study of.........

102
Vol. VII.No.1.October 2011, pp.102- 114

A Case Study of Corporate Social Responsibility in Nashik MIDC

Ms. Reena Patel
Lecturer,
K. K. Wagh Institute of Engineering
Education and Research, Nashik
E-mail: reenarpatel84@yahoo.com
Mobile No: 09960225559

Tamil Selvi J
Lecturer, Dept. of Business Admn.,Annamalai University

Abstract:
This paper analyses the awareness of corporate social responsibility in Nashik MIDC. It also helps to
identify the awareness and effectiveness of existing environmental protection programs like Carbon
emissions and treading among these companies.The study analyses the corporate responsibility with
respect to Customers, Employees, Government, Environment and Society. The study involves opinions of
corporate about, problems to implement corporate social responsibility. The study also involves case lets
of major corporate in India like J K Tyres, Infosys, Siemens, Tata group, Godrej Group, Mahindra And
Mahindra and many more that are already implementing such programs. The result of the study indicates
that in Nashik MIDC, there are few companies that are doing programs periodically. However, there are
few companies, which feel that they cannot do these activities individually but there can be collective
efforts. The study concludes that in addition to government agencies some management institutes should
also take initiatives collectively to motivate and run such programs with these companies. It is found that
Nashik Industrial Manufacturing Association (NIMA) are taking lead and arranging social programs for
society.Though big Indian companies have started practicing corporate citizenship, the degree to which it
is belong done is inadequate. Growing awareness among the academic institutions towards CSR as a
subject, to sensitize the future managers of this nation to the societal needs besides generating profits for
their organizations with increased efficiency, will need a greater deal from the managers to do the
balancing act.

103
Keywords:Corporate Social Responsibility, Financial Performance, Corporate and Marketing
Communication, Corporate citizens.
Introduction:
Corporate engagement with society, also termed
corporate social responsibility (CSR), refers to
one process by which an organization expresses
and develops its corporate culture and social
consciousness. With advent of global economic
environment, corporates plays a very important
role in shaping the quality of life of the society.
CSR aims at supplementing the government
endeavors to help the citizens of the country to
lead a healthier, happier & more meaningful life.
Governments alone are not able to do the needful
to the extent needed. That is where corporates
role as good corporate citizens comes in. More
so, when corporates both inputs and outputs
come from society and go back to the society. In
fact, in the long run this way corporates are also
helping them.
Objectives:
1. To identify how CSR is helping to
improve the environment and well being
of people in the city.
2. To identify CSR as a way of corporate
sectors contribution towards branding of
city.
3. To identify how corporate sector can
contribute to the well being of people.
4. To identify the present activities done by
Nashik MIDCs small and middle scale
companies.
5. To identify the reasons for not
implementing CSR by some companies.
Motivation:
CSR is a buzzword now; every corporate citizen
is realizing the benefits of CSR. There is a
general consensus that the health of the economy
depends on the health of the earths
Socio-ecological system. Empirical evidence
reveals that the factors causing the biodiversity
to be lost and earths atmosphere to warm are in
continuous rise. An understanding of the
interdependence and relationship between the
environmental, economic and social systems will
enable organizations to think strategically and act
proactively in order to mitigate their negative
impacts on the environment and society through
devising new organizational models and
alternative solutions for the fulfillment of human
needs and the renewal of the biosphere.

The emerging change requires finding new ways
and forging new patterns of conducting business
operations and increasing financial and social
capital. It has been suggested that to maximize
value, companies should not only focus on their
financial capital, but should also consider ethical
and social capital.

104
Particularly, large scale companies are
implementing CSR. They understand the benefits
of corporate and marketing communication
process in order to communicate wisely with
their stakeholders and customers.
It has been observed that small and middle scale
companies are still not implementing CSR. So in
order to find out reasons for not implementing
CSR, this study can help us effectively.
CSR: Different Perspectives:
A Strategic Perspective:-Business organizations
are beginning to realize that corporate
sustainability requires the strong support of
community. Hence organizations need to make
deliberate efforts to align CSR with corporate
strategy, thus enabling the firms to strike a
balance among the interests of all its
stakeholders, employees, customers, suppliers
and the government.
The following are few companies that have
aligned their CSR initiatives with their corporate
strategies:
Hindustan Lever Limited (HLL): To integrate
HLLs business interest with national interest, It
has launched Project Shakti in the year
2001.HLLs strategy was to explore the unexplored
rural markets in India. Thus it came with a strategy
to recruit women from those rural areas for direct
sales operations. This enabled the company to sell
to consumers whom it previously could not reach
and improved the status of women in their families
by providing them employment.
IBM: The Reinventing Education program
sponsored by International Business Machines
(IBM) maximized the benefits to the society and
created new business opportunities. IBM has
developed a teaching model in Philadelphia
school system that uses voice recognition
technology to instruct non-English-speaking
children in their native languages. Computers act
as personal instructor for these children.
2) A Symbiotic Perspective:
Many eminent personalities have argued the
concept of CSR. One of the strongest arguments
is that business organizations have the expertise
to deal with economic problems but not social
problems. They lack the competency in this area
and hence corporate social responsibility should
not be accepted by the business organizations.
This argument can be overdriven because
companies can discharge this obligation taking
the help of Non-Government Organizations
(NGO). This has created a symbiotic relationship
between companies and NGOs from which they
are mutually benefited yet meeting the
requirement of the society.
Mahindra & Mahindra (M & M):
Health Initiative: Mahindra & Mahindra in
association with Aas Center for Hope will
conduct road shows, hold seminars and spread
awareness about AIDS and its prevention. This
program will commence with specific camps being
held for mass awareness. The occasion saw the

105
formation of a core CSR team comprising of
Mahindra employees and social workers from Aas
Center for Hope to take forward this initiative in
a focused manner.
HDFC: HDFC has partnered with Smile
Foundation under CSR Program. Under this,
HDFC has joined Smile Foundation to work for
the welfare of orphans by promoting education
and rendering health services to a few selected
remote areas in the Western part of Orissa.
A Corporate Innovation Perspective:
Some corporate leaders presume CSR as a source
of innovation. History shows that many
inventions and discoveries have been accidental.
Thus, in the pursuit of CSR activities many
organizations enjoyed the fruits of such
innovations. This is quit evident in the case of
Delaware based DuPont. In the early 1990s the
production of Chlorofluorocarbons (CFCs) were
plying a major role in depleting the ozone layer
around the planet. Under such conditions,
DuPont came up with a technology to reduce
these CFCs, which attracted the attention of the
world. Thus, DuPont has been identified as one
of the best socially responsive companies.
An Entrepreneurial Perspective:
Beautician Dr. Urjeeta Jain who started herbal
clinic, rejected the existing beauty parlors
treatment and adopted the principal of care &
cure, based on Ayurvedic system. Her idea was
to provide natural beauty care. She started
inventing her own herb-based products and
methods of treatments thus avoiding the dangers
of synthetic and chemical treatments.

An Ethical Perspective: The Bosch
Limited: - Bosch has undertaken numerous
initiatives towards the betterment of society
across medical, educational, social and
vocational programmes. Some of the key
initiatives have been; the donation of a
distribution vehicle to the AkshayaPatra
Foundation a nonprofit organization that
provides unlimited, wholesome and
nutritious mid day meals to students across
India. An outreach programme called Manasi
founded by the female employees of the
organization to serve the underprivileged, by
addressing many issues in and around the
neighborhood. An orphanage,
'AnathaShishuSevaAshrama, was taken up
as one of their significant projects. Manasi is
also active in various other social initiatives
like blood donation camps, health awareness
programmes, etc. An active part in the
Nashik Run initiative to promote
awareness, health and fitness in and around
the city of Nashik for the underprivileged.
Relief during the Kargil War and earthquake
ravaged Gujarat. Monetary help every
employee came forward with an offering of a

106
days wage in the aftermath of the Tsunami
in South India
Infosys: - The founder of Infosys N R
Narayan Murthy belies that one should give
to society more than what it gave him.
Murthy believes that corporations should
ensure transparent disclosures to investors to
attract global capital; show fairness in
dealing with employees to retain them;
ensure customer satisfaction to win
confidence and loyalty; ensure fair dealing
with their supply chains and should be
ethical to government by paying all the
taxes.
The Infosys Foundation was formed to focus
on healthcare, primary education, societal
rehabilitation and rural uplift, art and culture.
Sudha Murthy-Narayan Murthys wife,
chairperson of the foundation, is taking a
leadership role in influencing corporate India
to discharge their social responsibilities
besides focusing on profit generation. The
foundations began its activities in Karnataka
in 1996. The activities have extended to
Tamil Nadu, Andhra Pradesh, Maharashtra,
Orissa and Punjab. According to a recent
report, Infosys spends about Rs. 50mn on
social activities.
Potential business benefits of CSR:
However,businesses may not be looking at
short-run financial returns when
developing their CSR strategy.
1) Human resources:-
1. A CSR programme can be seen as an
aid to recruitment and retention,
particularly within the competitive
graduate student market. Potential
recruits often ask about a firm's CSR
policy during an interview, and
having a comprehensive policy can
give an advantage.
2. CSR can also help to improve the
perception of a company among its
staff, particularly when staff can
become involved through payroll
giving, fundraising activities or
community volunteering.
Risk management:-
1. Managing risk is a central part of many
corporate strategies. Reputations that
take decades to build up can be ruined in
hours through incidents such as
corruption scandals or environmental
accidents. E.g. Satyam
2. These events can also draw unwanted
attention from regulators, courts,
governments and media. Building a
genuine culture of 'doing the right thing'

107
within a corporation can offset these
risks.

Brand differentiation:-
1. In crowded marketplaces, companies
strive for a unique selling proposition
which can separate them from the
competition in the minds of consumers.

CSR can play a role in building customer
loyalty based on distinctive ethical
values.
2. Business service organizations can
benefit too from building a reputation for
integrity and best practice.
License to operate: -
1. Corporations are keen to avoid
interference in their business through
taxation or regulations. By taking
substantive voluntary steps, they can
persuade governments and the wider
public that they are taking issues such as
health and safety, diversity or the
environment seriously, and so avoid
intervention.
2. This also applies to firms seeking to
justify eye-catching profits and high
levels of boardroom pay. Those
operating away from their home country
can make sure they stay welcome by
being good corporate citizens with
respect to labor standards and impacts on
the environment.
Criticisms:
Critics of CSR as well as proponents debate a
number of concerns related to it.
1. Corporations are only responsible to
their shareholders and not to society:-
Some critics argued that a corporation's
purpose is to maximize returns to its
shareholders, and hence, only people can
have social responsibilities, corporations
are only responsible to their shareholders
and not to society as a whole. Although
they accept that corporations should
obey the laws of the countries within
which they work, they assert that
corporations have no other obligation to
society.
2. CSR as incongruent with the nature and
purpose of business: Critics perceive
CSR as incongruent with the nature and
purpose of business, and create
hindrance to free trade. Some people
argue that improvements in health,

longevity and/or infant mortality have
been created by economic growth
attributed to free enterprise.
3. CSR is only for developing countries:-
Critics claim that the type of capitalism
practiced in many developing countries

108
is a form of economic and cultural
imperialism, noting that these countries
usually have fewer labor protections, and
thus their citizens are at a higher risk of
exploitation by multinational
corporations.

4. CSR and questionable motives:
a) British American Tobacco (BAT): -
Some critics believe that CSR programs
are undertaken by companies such as
British American Tobacco (BAT), the
petroleum giant BP (well-known for its
high-profile advertising campaigns on
environmental aspects of its
operations), to distract the public from
ethical questions posed by their core
operations. They argue that some
corporations start CSR programs for the
commercial benefit they enjoy through
raising their reputation with the public or
with government. They suggest that
corporations which exist solely to
maximize profits are unable to advance
the interests of society as a whole.

b) McDonald's: - AS CSR has
become mainstream, the company has
pushed up its CSR programs related to
its labor, environmental and other
practices. But it was fair comment to say
that McDonald's employees worldwide
'do badly in terms of pay and conditions'
and true that 'if one eats enough
McDonald's food, one's diet may well
become high in fat etc., with the very
real risk of heart disease.

A study Report /Analysis of Nasik Industrial Zone
Methodology: The study covers both the
primary and secondary data analysis.
Sources of data collection:
- The primary data was collected by
interview method by using structured
questionnaire. For the purpose of the
study, the data has been collected in
Nashik MIDC. 25 Small and Middle
scale entrepreneurs were selected for
study as sample. This survey was
conducted in the month of December
2008.
- The secondary data was collected
through published records, journals,
business magazines and web portals.


109

Data Analysis: (1) General know-how of
respondents: [Graph No.1]

Interpretation: The respondents were asked to
give sources of information of CSR. From the
analysis, it can be concluded that 40% of
respondents got information about CSR from
Newspapers and Internet. Only 16% information
is collected from TV, Business magazines &
Business conferences.
Conclusion:
1) From analysis, it can be seen that only
16% of respondents got information
about CSR from TV. As TV media is
accessible to all people, it has more
potential comparative to other media of
advertising. TV is very efficient way to
communicate with every market
segment. It has not been used as
effectively as could have been used.
2) Also in case of TV, no one has to take
extra efforts to obtain information about
CSR. However, in case of other media
they have to spare time and voluntarily
read the information about CSR.
3) From the analysis, it can be concluded
that, all the other media like Business
magazines, Newspapers & Internet,
Business conferences can also be used in
a better way in order to increase
awareness of CSR.
4) Companies that are already
implementing CSR can give
advertisement on TV, so others can get
motivation out of that. E.g. TATA Tea is
doing in their Jagore advertisement
campaigns, they are doing voting
awareness along with TATA Tea.


110

(2) Organizations awareness about CSR: [Graph No.2]

Organization's awareness about CSR
96%
72%
80%
60%
0%
20%
40%
60%
80%
100%
120%
CSR is
important
Know -How
CSR benef its
Self belief of
CSR
Organizations
imlementation
CSR
Parameters
P
e
r
c
e
n
t
a
g
e

111
Interpretation: From the above analysis, it can
be concluded that 96% of respondents feels that
CSR is important, 80% feel that CSR should be
implemented because of self-belief. Out of that,
only 60% of organizations are active in CSR
implementation, 72% of respondents are aware
about long term and short term benefits.
Conclusion:
1) It shows that 60% out of 96% are
implementing CSR, balance 26% know
about CSR but are not implementing
because of limited financial resources,
not having experience as well as they
dont have exposure.
2) As CSR is not only doing things at large
scale, special training can be given on
small CSR activities which they can do
at small scale like blood donation camps,
educating to small village, etc.
3) Collective efforts can also make a good
initiative to CSR programs. An
association can be formed of members
who are already implementing CSR and
who want to implement it, but facing
some problems.
(3) Internal activities about CSR: [Graph
No.3]

Interpretation: The above study [Graph no. 2]
shows that 60% of organizations are
implementing CSR but out of that (Considering
Benchmark of 60% as a 100% for further
consideration) each company have CSR Policies
and CSR management system. It also shows that
there should be significant improvement in
objective measurement, objective tracking and
training to staff.
Conclusion:
1) It is suggested that more emphasize
should be given on measuring and
tracking the CSR objectives than only
implementation.
2) The trained staff can contributes more
out, if polices are well drafted and
tracked.
3) There should be regular internal as well
as external audit for CSR. This
mechanism will evaluate periodical
Internal activities about CSR
100% 100%
73%
27%
0%
20%
40%
60%
80%
100%
120%
CSR policy
supported by
procedures
Structured CSR
management
system
CSR objectives
measured and
tracked
Fully trained CSR
Staf f
Parameters
P
e
r
c
e
n
t
a
g
e

112
progress and easy to measure CSR
objectives.

(4) Organizations present CSR activities:
[Graph No.4]

Interpretation: From the analysis, it can be
concluded that, out of 60% respondents who are
implementing CSR activities, all are
implementing Environmental policies (like
energy conservation, waste minimization and
recycling, pollution preservation and protection
of the natural environment). As well as, all are
implementing Marketplace policies (like
displaying clear and accurate information and
labeling about products including its after sale
obligation) and only 52% are implementing
Community Policies (like giving financial
support and employee time to local communal
activities).
Conclusion:
1) Market polices are implementing
because these are directly related with
companys profit. On the other hand
environment policies are mandatory by
government laws. There is no such
mandatory obligation for social policies.
2) So, there is a need of improved laws
with respect to CSR.
3) Moral responsibility of companies
towards society should be boosted at
least at local level.
4) Initiatives should be taken from
Industrial Corporation.
5) The above study demand more on team
work than individual work for CSR.
Many of small industries are ready for
implementation but they have lots of
constraint, still the survey shows all
companies are ready to come under one
umbrella and ready for major task for
society.

Reasons for not implementing CSR: [Graph No.5]
Organization's present activities of CSR
100% 100%
86%
75%
80%
85%
90%
95%
100%
105%
Environmentral policies Marketplace policies Community Policies
Parameters
P
e
r
c
e
n
t
a
g
e

113

Interpretation: Respondents were asked to give
reasons for not implementing CSR. From the
analysis it can be conclude that 36% of the
respondents have told that they have not relevant
experience, 32% have told that they dont
considered it as a priority,
Conclusion:
1) As respondents are small-scale industries
entrepreneurs, they are fighting for
survival rather than CSR. Hence, they
are not implementing CSR.
2) In addition, they also have limited
finance, so, they are not implementing
CSR.
3) In addition, most of the respondents
respond that they do not have relevant
experience, so their industrial
associations can conduct training
programme, workshops, and seminars on
CSR.
4) Conferences can be organized to
communicate global CSR activities with
Corporate.
5) As discussed above [Graph no.4], if any
Association will take lead, other
companies can take part into that. The
respective Municipal Corporation can
also organized invents and request for
participation.
Ex. Nashik Run: It was born out of a
desire to serve the underprivileged in and
around Nashik and to spread the, message of
healthy living among the Nashikites. It
involves the funding of various long lasting
and productive projects undertaken by NGOs
and charitable organizations in order to
enable them to become fully independent.
The first Nashik Run was held on 11th
January 2003. Synergizing of the efforts and
resources of the corporate in and around
Nashik for a single common social cause.
Reasons for not implementing CSR
Not invited; 10%
Don't considered
priority; 30%
No experience;
40%
Limited f inance;
20%
Any other; 0%
Not invited Don't considered priority No experience Limited f inance Any other

114

References:
Philip Kotler, Kevin Lane Keller, Abraham
Koshy, MithileshwarJha, Marketing
Management 13the edition, Corporate social
responsibility, P.623

Tapan K Panda, Marketing Management,
Environmental Marketing, P.687

Dr. Sailaja, Emerging Models of Corporate
Social Responsibility, Corporate social
responsibility, HRM Review Theicfai University
Press, January 2008, P.10
Kinjal Shah, An Indian Perspective of Corporate
Social Responsibility, Corporate social
responsibility, HRM Review Theicfai University
Press, January 2008, P.10

www.hll.com

http://www.consumerpsychologist.com/internatio
nal_marketing.html

www.ibm.com

www.infosysys.com

http://www.indiamart.com/drjainforestsherbals/p
rofile.html

115
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117
Bender, K.A. & Sloane, P.J.(1998) Job satisfaction, trade unions, and exit-voice revisited;
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proofs are not delayed in the mail. Please note that alterations in the text cannot be permitted
during the proof reading.

4.2.8. Off prints :Authors receive 05 complimentary off-prints for each article.

4.2.9. Copyright: Once the paper is accepted a copyright-transfer form will be sent along with
the proofs. The duly filled and signed form should be sent to the editor along with the proofs as
mentioned above.

4.3. Submission :On the cover, authors should indicate the number of words, the inclusion of
any diagrams. The first page of the typescript should bear the title of the paper, together
with the name(s) and affiliation(s) of the author(s). the second page of the typescript
should repeat the title, followed by the main body of the text, which should conform
strictly to these guidelines.

Address of the corresponding author :It should be given in a separate page as an attachment. It
is important to keep the editor informed of any change in your address.

Address for submissions :

Editor in Chief
Faculty of Management & Commerce
University park
Oluvil#32360, Sri Lanka.
Tele : 094672255192 / 84
Fax : 094 672255069
E-mail : amustafa@seu.ac.lk

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ISBN 1391-8230

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