Ipsar Management Review Jan - Jun-2016

Vol-XIV, No-1, January-June 2016
IPSAR MANAGEMENT REVIEW

A Journal of Institute of Professional Studies & Research (IPSAR)
National Seminar on Emerging

Trends & Innovation in
Management
Sub Themes
Emerging trends and innovations in HR practice.

Emerging trends and innovations in Marketing and Retail sector.
Emerging trends and innovations in Financial Service sector.
Emerging trends and innovations in Information Technology.
Emerging trends and innovations in Hospitality sector.
Emerging trends and innovations in Healthcare sector.
Emerging trends and innovations in Public Administration.
Emerging trends and innovations in Operation Management & Supply Chain.
EDITOR:
C.A.(Dr.) J.K.Misra
Director, IPSAR
EDITORIAL BOARD:
Prof. A.K.Mishra
Prof. K.K.Acharya
Mr. S.S.Tripathy,
Mr.S.I.Hasnain, Mr.S.Garud
Volume XIV, No 1 (January June 2016)
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IPSAR MANAGEMENT REVIEW

A Journal of Institute of Professional Studies and Research (IPSAR)
Emerging Trends & Innovation in Management
Contents
Subject
Author
Page
Green banking practices: a study on Environmental

Strategies of banks With special reference to state
bank of India
Sunil Kumar Das Bendi

Dr. Tushar Kanta Pany
7 13
Digital Banking: A Compliment to Financial Inclusion Jagan Kumar Sur, Sakti Ranjan Dash
14 - 19
Bancassurance: An Innovation to Boost

The Indian Financial Services Sector
Roji Kanungo,
Ganesh Prasad Panda
20 - 26
Rural Retail Market: Opportunities and

Innovations
Mamatanjali Parida,
Chandrika Prasad Das
27 - 32
Measures taken by banks towards environmental Ms. Ananya Mitra,

sustainability.
Dr. Shradhanjali Panda
33 - 36
Employee Turnover a key challenge for IT Sector Mr. Shymasundar Tripathy

with Special Emphasis on Indian IT sector.
37 - 41
Growth And Performance of E-Commerce

In India
Sudhansu Sekhar Nanda
42 - 46
MSMES In Odisha: Growth And Prospects
Dr, S.K. Badatya
47 - 53
A study on economic value added (EVA) an

effective measure of profitability: complexities
and challenges in its use.
Mr. Parshuram Mishra
54 - 57
Analysis Of Liquidity Of Selected FMCG

Companies In India
Ranjit Kumar Paswan
58 - 61
Enhancing Customer Satisfaction through

Social Media and Technology In Hospitality
Sectors
P.P.Mohanty
62 - 66
Role of computer graphics in digital education:

Innovation in information technology
Sukanta Kumar Das,

Dr. Jibitesh Mishra
67 - 71
Role of HRM for innovative processes to enhance Prof. S.S.Bhusanam

Organizational business effectiveness
72 - 77
Talent Management As Innovative HRM Tool:

An Empirical Evidence From Indian It Sector
Prakash Ranjan Parida
78 - 82
Green Marketing: An Innovative Recent Trend
Ranjeeta Nayak
83 - 87
In Marketing
The Fourteen Challenges That Every Nurse
Manager Must Be Prepared To Address
Deepa M Raju
88 - 91
Role of Information Technology Cortana

Windows Phone
Deepak Ranjan Biswal
92 - 95
A Study On Financial Performance Of Central
Dr. Bimalendu Bal
96 - 105
Internet - The Biggest Threat to Humanity
Sayed Izharul Hasnain
106 - 110
Risk Management &Capital Requirement of

Indian Banks As Per Basel Norms
Debendra Kumar Ojha
111 - 124
Co-Operative Society: A Case Study
An empirical analysis of customer satisfaction in Ms. Alaka Samantray

Organized retail sector
Factors influencing the investment decision in
equity and mutual funds: an empirical study
Mrs. Krishna Kavitha Acharya

Dr. Kishore Kumar Das
125 - 131
132-143
IPSAR Management Review, Its editor, publisher, IPSAR and Governing Council disclaim
responsibility and liability for any statement of facts and opinion, originality of contents and of any
copy right violations by the authors.
From the Editors Desk

Rapid technological advancements in communications, fast changing consumer perception,
growing affluence, better transport connectivity, have led to a revolution in radical change in managing
business. Business now is something different than 10 years ago. Electronic commerce has made things
more different. Sitting at home getting connected to a Physician, taking delivery of grocery or Flat
screen TV at home, sending cash or gifts to near and dear ones are all the result of consumer focused
management approach of companies engaged in logistics, warehousing, delivery, customer help line all
wrapped up in a system to eventually cater the growing consumerism. Human resource management is
no longer confined to labor or personnel management. Finance is no longer confined to low risk or a
steady return, accountants also not asked to tally books. Sales team is now required to push sales be it a
car or a toy. Restaurants are required to deliver at home instead of looking for foodies to occupy
cushioned chairs. Changing lifestyles, increased life expectancy, starting business early, converting
ideas into commercial applications, working after retirement, have transformed commercial business
management into micro management specialization. Each economic sector is broken into sub-segments
with each asking for specialized technique, approach and business model. Success in business now
depends on how fast you adopt to change in customer tastes and preferences without losing quality yet
putting an attractive price tag. All these have opened a host of opportunities in a wide domain of
business management.
C.A.(Dr.) J.K.Misra
Editor
GREEN BANKING PRACTICES: A STUDY ON ENVIRONMENTAL STRATEGIES

OF BANKS WITH SPECIAL REFERENCE TO STATE BANK OF INDIA
MR.SUNIL KUMAR DAS BENDI
Faculty in Business Administration,
Modern Institute of Technology and Management, Bhubaneswar
Email id: bsunilxyz@gmail.com
DR. TUSHAR KANTA PANY
HOD, School of commerce,
Ravenshaw University, Cuttack
Email id: tusharpany@yahoo.co.in
Abstract
The world faces a great challenge of environmental degradation during the process of economic development.
Banking sector as responsible stakeholders in this regards can do better contribution towards the environment by
adopting various green banking practices. Green banking practices mean promoting environment-friendly
practices and reducing carbon footprint from day to day banking activities. Green banks or environmentally
responsible banks do not only improve their own standards but also affect socially responsible behavior of other
business. Banks in India especially the largest commercial bank State Bank of India has developed several green
banking initiatives. Recently the bank has introduced various paperless banking practices for their customers.
Adopting these practices the customers can contribute a lot towards the environment. This paper aims to highlight
the green banking initiatives made by SBI in Odisha and attempt has been made to discuss the environmental and
other benefits of these practices.
Keywords: Eco-friendly, GCCs, Green Banking Practices, Sustainable Development

Introduction:
Banking sector as one of the major stakeholders in the industrial sector needs to play a proactive role in
sustainability. Sustainable banking means using all of the banks resources with responsibility and care, avoiding
waste and giving priority to choices that take sustainability into account. Sustainability denotes ensuring
continuity of economic progress for the present generation without reducing the possibilities and choices for the
posterity. It requires that decisions taken today do not compromise options for the future. Banks themselves are
generally environment friendly and do not impact the environment much through their own internal operations.
However they are responsible as the major contributors of finance to industries like steel, paper, cement,
chemicals, fertilizers, power, textiles, etc. that are responsible for creating huge carbon emission. Therefore, banks
are adopting a voluntary set of guidelines for managing social and environmental issues related to the financing of
development projects.
Banks as financial institutions are environmentally neutral. They are not directly related with the environment.
They are considered to be in the non-polluting sector, and do not impact the environment much through their own
internal operations. However, they can still be held responsible because the huge carbon emitted industries are set
up with the finance provided by them. These industries harm the fragile environment, present population and the
posterity of a nation. Hence, banks have to undertake some green growth initiatives within and outside their
organizations for the creation of a strong and successful low carbon economy. However, Banks are now playing a
vital role towards the green growth through their green banking practices. The role of banks in energy saving and
cutting emissions is well established in developed economies, but it is still in the infant stage in India. Indian
banks are not taking any big initiative towards the direction of environment and they have really a big role to play
(Prasad, 2011). None of Indian banks have adopted global environmental and social guidelines at the time of
project finance which are known as Equator Principles. Till date 77 financial institutions of the world have
adopted these principles. There is certainly a lack of awareness of the Equator Principles in India. In-spite of a lot
of opportunity in green banking, Indian banks are far behind in the implementation of green banking, only some
of banks have initiated towards green banking. None of the Indian Banks have so far adopted green banking as a
business model for sustainable banking (Bahl S., 2012). There is more scope for all banks and they can not only
save our earth but can transform the whole world towards energy conscious. Banks must literate their customers
about green banking and adopt all strategies to save earth and build banks image (Verma M. K., 2012). It is time
now that India takes some major steps to gradually adhere to the equator principles-guidelines that use
environment -sensitive parameters, apart from financial, to fund projects (Biswas N., 2011).
Literature Review:
Financial Institutions having Corporate Social Responsibility (CSR) are treating sustainability as a business
strategy and opportunity not as an add-on, feel-good charitable endeavor (Strandberg C. 2005). Banks consume
natural resources which add to the pressure on the environment and also because banks enjoy the affiliation of the
majority population of any country (Srivatsa H.S., 2011). Therefore, banks should go green and play a pro-active
role to take environmental and ecological aspects as a part of their lending principle (Sahoo, P. and Nayak, B.P.,
2008). However, banks as the financial intermediaries play a vital role in the economic development of a country.
All of the banks either have or are in the process of developing a sustainable strategy; the growing environmental
concerns and credit risks are currently the primary drivers of pursuing environmental sustainability (Dlamini T.
H., 2010). In order to achieve the goal of sustainable banking, banks such as commercial banks have to adopt
proactive strategies for reducing internal operation risks from environmental issues thereby realizing long-term
profitability by external financing of environmentally friendly products and services (Guo H., 2005). Commercial
banks, governments, multilateral agencies and company managers are sensitive to environmental impacts when
making financial decisions (Pandey V.C., 2003). Sustainable development is defined as the process of
development that meets the need of the present generation without compromising the ability of the future
generations to meet their need (Panigrahi A. K. & Jena N., 2010). Triodos Bank is a bank with a difference, the
bank finances only enterprises which add social, environmental and culture value in fields such as, renewable
energy, social housing, complementary health care, fair trade, organic food and farming and social business (Dash
R. N., 2008).
Objectives of the paper:

Keeping in mind, the most important concern about corporate social responsibility, this paper is an attempt to
highlight the eco-friendly banking practices undertaken by the SBI in India. The study also aims to investigate the
awareness and adoption level of these practices in the state of Odisha. The main objectives of the paper are:
i) To highlight the green banking practices introduced by the SBI in the country.
ii) To discuss the impact of green banking practices on sustainability by evaluating their benefits.
iii) To investigate the customers awareness about green banking practices and their adoption level in Odisha.
Methodology:
The present study has incorporated with the collection of both primary and secondary data. The study has been
conducted in Odisha. For collecting primary data, structured questionnaires have been designed with the mixture
of close ended and open ended questions and 204 customers of State Bank of India have surveyed using
convenience method of sampling. Some questions have also been designed on five points Likert Scale with
Strongly Agree dictating the highest level of believe, and Strongly Disagree as the highest level of disbelieve.
Primary data have also been collected by visiting the local head offices and bank branches. The data so collected
have been processed using statistical package SPSS-20 version. Secondary information have been collected from
different relevant books, journals, newspapers and published reports of the State Bank of India and Reserve Bank
of India. Information also has been collected from different websites for the study.
Population of the study:

There are 868 numbers of SBI branches all over Odisha as on 17th September, 2015 (RBI Branch locator). The
number of customers of State bank of India in Odisha has mentioned below in tabular form.
Table 1: Number of customers of SBI of various Accounts in Odisha as on March 2013
Types of Accounts
Number of Customers
Savings Bank Accounts
1,37,21,250
Current Deposit Accounts
1,60,743
Fixed Deposit Accounts
9,86,061
Total
1,48,68,054
Source: Basic Statistical Returns of Scheduled Commercial Banks in India
Size of the Sample:

In response to our distributed questionnaires, 204 respondents have responded and all these respondents have been
included in the study. Since the green practices that are adopted by different branches of the SBI are as per the
specific directions of the authority as well as the Government, our respondents can be regarded as homogenous in
nature. So the selected sample has clearly represented the population.
Technique of analysis of data:

The collected data has been processed and analyzed by applying the SPSS (Statistical Package for Social
Sciences) Version-20. Descriptive analysis techniques like average, percentage, frequencies etc. were performed
on the data for getting an overall structure of the sample. Tabulation and creation of pictorial presentation has
been done wherever found appropriate.
Meaning of Green practices of Banks:

Green practices of banks popularly known as green banking refers to the environment-friendly initiatives taken
by the banks to reduce the carbon footprint from their day to day banking activities and also to minimize the
external carbon emission. Green practices of banks are the efforts of the banking sector to keep the environment
green and to minimize greenhouse effects through rationalizing their strategies, policy, decisions and activities
pertaining to banking service, business and in-house operational activities. It strategically promotes green
industry, including environmental pollution prevention projects and renewable energy development projects.
Green projects which produce green products are healthier for the planet and everyone living on it. Production and
use of such products help in conserving natural resources, energy etc. for future generation.
Sustainable Green Banking:

Sustainable bank is a bank concerned with the social and environmental impacts of its investments and loans. It
refers to the initiative taken by banks to encourage environment friendly investments, to give lending priority to
those industries which have already turned green or are trying to grow green and thereby help to restore the
natural environment. The green banking is rewarding! It is not only beneficial for the banks and the economy but
for the normal customers. This initiative of green banking is mutually beneficial to the banks, industries and the
economy (Harris K A and Sahitha Abdulla).
Benefits of green banking towards the Environment:

Adoption of green banking practices will benefit the environment in many ways. Banks can do much more to help
the environment by just promoting green banking. Use of green banking practices will result savings of energy,
fuel, paper as well as water. As for example, use of paperless ATMs, Online Banking, Mobile Banking and Telebanking will result savings of fuel as well as paper. For green banking operation customers need not go to the
bank physically. This will reduce the consumption of fuel and also minimize carbon emission. This will also result
less vehicles on the road. Green banking practices are paperless banking practices. Hence, it will save paper.
Benefits of green banking towards the customers:

Green banking practices are very convenient, easy, cost effective and time savvy for the bank customers.
Customers need not go to the bank for banking transaction; hence they can save time as well as money. It is a type
of anytime-anywhere banking.
Benefits of green banking towards the bankers:

Green banking can reduce the need for expensive branch banks. Green banking practices are also very convenient,
cost effecting and time savvy for the bank employees. From a banks perspective, it can reduce costs, increase the
speed of service, expand the market, and improve overall customer service (Du J. 2011). A bank can lower their
own costs that result from paper overload and bulk mailing fees as more customers use online banking.
Benefits to the merchants and traders:

Green banking practices through E-banking system also help to the merchants and traders. It ensures assured
quick payment and settlement to the various transactions made by the traders. It provides a variety of services to
the businessmen at par with the international standards with low transaction cost. Cost and risk problems involved
in handling cash which are very high in business transactions are avoided. It leads to the growth of global and
local clientele base with the development of e-Banking.
Green Banking Practices of SBI:

SBI has become the first bank in the country to venture into generation of green power by installing windmills for
captive use. As part of its green banking initiative years. The recent green banking initiatives also include
paperless banking for customers, clean energy projects and the building of windmills in rural India.
State Bank of India intends to bring down its carbon footprint and to save energy through several green banking
practices. The bank is offering more than 20 green projects throughout the country. Some of the green practices
are- Green Channel Counter, Automated Teller Machine, Cash Deposit Machine, Internet Banking, Mobile
Banking, Credit Card, Debit Card, Virtual Card, Green Self Service Kiosks, SMS Unhappy Scheme, Green Home
Loans, Solar Projects, Wind Mills, Green Projects Loan, Viswayatra Foreign Travel Card, Fruit bearing tree
plantation, Rain Water Harvesting Projects in the Bank Offices, Green Banking Practices for the employees,
Leader of the Group of Public Sector Banks for Solar Projects, etc. The most important paperless banking
introduced by the SBI is Green Channel Counters (GCCs). Three types of transactions namely withdrawal, deposit
and transfer of funds up to a limit of Rs. 40,000 per day can be performing through the Point of Sale Machines
used in GCCs., SBI has installed 10 windmills with an aggregate capacity of 15 MW in the states of Tamil Nadu,
Maharashtra and Gujarat. As stated by former Chairman O P Bhatt they have planned to install more windmills in
near future. The bank also supports the green initiatives of its clients and offers them finance on priority and at
concessionary rate of interest. The bank has launched a loan product called 'Carbon Credit Plus' to finance the
future Clean Development Mechanism (CDM) projects. The bank launched its Green Banking Policy in the
Bengal circle and decided to run 50 ATMs out of 850 ATMs on solar energy in Bengal. The bank will run more
and more ATMs by solar energy to reduce their power consumption and planned to introduce five lakh Point of
Sale (POS) terminals across the country in the coming
SBI as Leader in the Field of Green Banking Practices in India:

Almost all the banks in India are adopting various green banking practices during the present days. However,
Indias largest commercial bank the State Bank of India is taking a leading role in the field of green banking in
India. State Bank of India has become the country's first bank to venture into generation of green power by
installing windmills for captive use. As part of the SBI's ongoing 'Green Banking' initiatives, windmill project has
been successfully commissioned and power thus generated is being consumed by their branches/offices in the
States of Maharashtra, Gujarat and Tamilnadu. This reduces dependence on polluting thermal power to the extent
of renewable power generated by the Bank's windmills. The imperatives of sustainable usage of resources,
including energy and efficient disposal of wastes have been effectively propagated amongst the stakeholders, in
the form of adopting energy efficiency measures, efficient usage of paper and water, installation of Solar ATMs,
introduction of paperless Green Channel Banking and point of sale machines (POS). The bank is also
implementing thousands of Green Kiosks to reduce the need for paper. Another green initiative the bank has
introduced is Green Home Scheme. Under Green Homes Scheme the bank offers subsidy and interest rates
reduction to supports environment friendly housing projects. The recent step towards the green banking of the bank is
introduction of Cash Deposit Machines in some selected places.
Adoption level of various Green Banking Practices:

Table 2: Users of ATM
User of ATM
Respondents
Percent
User
Non-User
Total
Source: Primary Data
186
18
204
91.1
8.8
100
Table 3: Frequency to use the ATM per month by the respondents

No. of times use ATM
per month
Respondents
Percent
Cumulative
Percent
1-3 times
108
52.9
52.9
3-5 times
49
24.0
76.9
5-10 times
15
7.3
84.3
Over 10 times
3.9
88.2
Do not use
24
11.7
100
Total
204
100

The Bank has been encouraging customers by extending project loans on concessionary interest rates to reduce
Green House gases (GHGs) emissions; by adopting efficient manufacturing practices through acquisition of latest
10
technology. The Bank also arranges consultancy services by roping in the services ofempanelled CDM consultants
in CDM (Clean Development Mechanism) registration process. The Bank has also launched a loan product to
facilitate upfront finance to the project developers by way of securitization of Carbon Emission Reduction (CER)
receivables. The SBI effectively propagates and implement sustainable usage of resources including renewable
energy by adopting energy efficient measures. The bank is the largest deployer of solar ATMs in the World,
Saving more than 2000 tons of CO2 per year. The bank extends project loans on concessionary interest rates to
encourage customers to reduce Green House gases by adopting efficient manufacturing practices (SBI Directors
Table 4: Respondents heard about green practices of banks
Heard about
Percent
Yes
84
41.1
No
120
58.9
Total
204
Table 5: Level of acceptance of the respondents regarding the effect of green
banking practices on environment, cost and time
Green Banking Practices
are environment friendly
Green
Banking
Practices save time and
cost
Respondents
Percent
Respondents
Percent
Strongly
agree
94
46.1
102
49.8
Agree
71
34.6
72
35.4
No idea
34
17.3
28
14.4
Disagree
0.8
0.2
Strongly
disagree
1.2
0.2
Total
204
100
204
100
Level
of
Acceptance
100

Report 18 May, 2012).
Besides, it has a scheme (Carbon CreditPlus) for securitizing carbon credit receivables. The bank has initiated a
pilot project to determine its Carbon footprint levels, which will help in determining the banks resource
consumption pattern and enable the bank to take effective steps to implement various measures for sustainable
usage in a cost effective way. Special drive for fruit bearing tree plantation during monsoons was taken up across
all Circles, which has been very successful and sustained efforts are being made to ensure the survival of the
plants as well (SBI Annual Report 2011-12). The expanding foot prints of the SBI through alternate channels
during the last three years. It clearly indicates the increasing trend of various alternative green banking channels
namely ATM, Debit Cards, Internet Banking, Mobile Banking etc. This table also shows the increasing trend of
percentage of total transactions on alternate channels of the bank. Currently about 36 percent of the transactions
done by 200 million customers of the SBI is through non-branch alternate channels such as internet, mobile,
ATMs, PoS terminals etc.
Results and Discussion:

Adoption of various green banking practices is now up to the customers. Every small step taken today by them
will have a positive impact on the future of our planet. If they choose various alternative channels for their day to
day banking transactions instead of going to the bank branches physically, it will have positive impact on three
aspects viz. the customers themselves, the bank and the environment as a whole. However, the use of various
necessary infrastructural tools for this purpose namely internet and mobile is dramatically going up during the last
11
few years. The primary data that collected from the respondents have been processed through SPSS Virson-20 and
the following observations have been made.
It was found from the study that more than 50 percent of the respondents have not even heard about the green
banking practices of banks. However, most of them are using various green banking practices unknowingly.
Therefore, this study reveals that people are not yet fully aware about green banking practices.
The study also significantly found that as much as 95.3 percent of respondents use ATM. Out of them 68.1
percent visits the ATM maximum of five times per month. 26.9 percent respondents use to visit the ATM more
than 5 times in a month.
The newly introduced eco-friendly Green Channel Counters (GCCs) is still in their infant stage in Odisha. Only
25.1 percent of respondents use this facility. Remaining 74.9 percent respondents are either ignorant about the
facility or not willing to use this banking practice. On the other hand 84 percent of respondents use it 1 to 3 times
per month whereas remaining 16 percent respondents use it more than 3 times per month.
The study significantly observed that only 19.5 percent of the total respondents are using online banking. Out of
the remaining 80.5 percent respondents who are not user of online banking, maximum of 34.5 percent of them do
afraid of the security problem on the online banking. Remarkable 28.6 percent respondents are satisfied with the
existing facilities provided by the bank i.e. traditional banking and ATM. Notable thing is this 11.3 percent
respondents have not yet heard about online banking and 3.6 percent respondents do not see any real value on
online banking.
Concluding Remarks:
This paper concluded that green banking clearly has direct and positive impact on sustainability. Because doing
these practices customers can save energy, fuel, paper, water, time as well as money. Significantly it results
reducing the carbon footprint from their banking practices. Green banking practices are very convenient, easy and
cost effective for the bank customers. It saves the customers trips to the bank. They need not to go to the bank for
banking transaction; hence they can save time as well as money. It is a type of anytime-anywhere banking. Green
banking practices are also beneficial to the banks because they cause less postage cost and also reduce the
workload of the bank personnel.
So far as green banking is concerned Indian banks are far behind their counterparts from developed countries. The
common people are yet to come forward to adhere these practice due to lack of awareness. Therefore, banks must
literate their customers about the using procedures of green banking practices and adopt all strategies to save
earth.
Recommendations:
It is recommended that there should be sufficient publications both from the bankers side and also from the
government side to aware about the environmental impacts of various green banking practices. Seminar and
workshops regarding this aspect should be organized and public meetings are to be arranged bythe banks to make
people familiar about the using procedure of e-banking practices.
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University,
available
at
http://researcharchive.lincoln.ac.nz/dspace/bitstream
/10182/4047/4/Du_MCM.pdf accessed on 7-7-12.
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Green Financing -An Explorative Case Study of the Financing System for Corporate Customers in the
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13
DIGITAL BANKING: A COMPLIMENT TO FINANCIAL INCLUSION

JAGAN KUMAR SUR
Research Scholar, (UGC NET-JRF),
P.G. Department of Commerce, Utkal University,
Bhubaneswar-4, Odisha, Mob-07381128424,
E-mail-jagansur12@gmail.com
SAKTI RANJAN DASH
Research Scholar,
P.G. Department of Commerce, Utkal University,
Bhubaneswar-4, Odisha, Mob-09658279278,
E-mail-shaktiranjan.srd@gmail.com
Abstract:
The recent government of India has made inclusive growth a key element of the policy platform with a goal of
bringing all people under access to financial services. Banking industry is one of major role player in Indian
financial system using innovative delivery channel it is accessible to all with low cost. The term digital is
omnipresent now with the advent of ICT era. Digital banking is that technological wonders which has brought a
banking revolution in India by using the internet for delivery of banking products & services. Due to the everincreasing convenience factor, rapid technological advancements, proliferation of mobile devices and changing
social community lifestyle, digital banking is gaining popularity day by day. By 2020, it is expected that the
number of smart phone users to equal the number of total active bank accounts in the country and cover 70-80
percent of eligible population. Then it can be predicted that almost all eligible customers will be on boarded onto
the mobile phone based digital payment and saving platform in next 5 years. Digital banking also has a cost to
income ratio advantages of 10-15 percent over conventional model. This paper exclusively focuses on the major
role of digital banking in financial inclusion and the challenges towards Digital Banking in India. It also put some
light on key areas in order to make bank digital Sustainable and future steps taken in digital banking which
accelerate the financial inclusion in India. Secondary data method of data collection is adopted in this study.
Keywords: Digital Banking, Financial Inclusion, E- Wallet, KYC, Cyber Security

Introduction:
Digital Banking means more than just going paperless, which offers a new customer experience and delivering
faster & more efficient services. Ideally digital banking benefits to two worlds, both outside and inside. A new
customer experience in the outside and an efficient, effective operating model in the inside-both enabled by
digitalisation and underlying technologies, process & structure.
On the outside, customers benefit from fair prices with increased transparency and comparability. Banks meets
their needs with immediate high-quality interaction and transactions are performed quickly and securely.
Purchasing a product no longer requires 14 days. Customers are proactively informed about a rich spectrum of
personalised products and services including financial advices, new opportunities and peer comparisons. Overall
customers enjoy banking experience and they are happy to hear from their bank.
Chart no.1: Digital banking offers
14
Source: A T Kearney Analysis
Litretre Review:
Chauhan Pinal (2013) has seen that e-wallet really is emerging as a credible alternative to cash payments for point
of sale purchases. Although e-Wallet still have some disadvantages in term of interoperability and standardization
of security and formats but still e-Wallet is the best in transaction application compare to others.
Jamaluddin N. (2013) has stated that the emerging payment system in India for large value transactions is RTGS,
ECS for bulk payments and NEFT for one to one fund transfer. Among the card based payment systems debit card
is more popular than credit cards. The number of ATMs in India, particularly in rural areas, is on the rise and
customers irrespective of their profile started accepting ATM as a channel for banking transactions.
Chauhan Vikas and ChoudharyVipin (2015) has identified some challenges which are acting as hurdle in the
adoption of e-banking facilities such as security risk, privacy risk, trust factor and less awareness among
consumers about e-banking. Considering the challenges and risk related to e-banking, the Government of India
along with various government agencies is making an effort to make e-banking more safe, secure and reliable.
Objectives:
To Study the major role of digital banking in financial inclusion
To Study the challenges towards Digital Banking.
To indentify key areas in order to make bank digitally Sustainable.
To Expect the Future steps taken in digital banking which accelerate financial inclusion
Research Methodology:
The proposed study mainly is descriptive in nature. The data are mainly collected from secondary sources like
journals, magazines, publications, articles, research papers and websites.
Relevance of the study:

With rapid technological development, the focus has been shifted from conventional banking to digital banking
which is beneficial both for the banks and customers. Digital banking transaction has shown a 60 percent growth
in India in the year 2014 whereas it was only 3 percent in case of traditional banking transactions. Digital banking
also has a cost to income ratio advantages of 10-15 percent over conventional model. By analysing the current
environment it can be expected that there is a bright future of banking digitalisation in India.
Role of digital banking in financial inclusion:

Digital in India holds the potential to transform the financial inclusion landscape in the same way mobile phones
changed the face of telecom connectivity in the last decade, sidestepping five decades of slow progress using
traditional media. With its unique attributes such as low cost, ease of use, scalability and ubiquity, digital banking,
when aligned with the right business model in an enabling ecosystem, can truly accelerate the integration of the
unbanked segments into the mainstream. It contributes towards financial inclusion by the following means
Mobile Banking:
One of the most remarkable developments in terms of innovation in order to harness the full power of technology,
the banks have tied up with mobile operators to provide financial services like bill and utility payment, fund
transfer, ticket booking, shopping etc. Some examples of this model are m-Pesa by Vodafone and Airtel Money.
Kiosk / ATM based banking:

In some states, the state government has taken initiatives for providing kiosk based model for access to financial
services. Also banks have used the technology to enable their ATMs to virtually act like a 24x7 branches.
Branchless Banking:
Some of the leading banks have come up with this concept where there would be an online system with chat
facility assisting the person to make use of various electronic machines for depositing and withdrawing cash and
cheques. However this initiative is in a very initial stage and has a limitation in terms of initial Cost for banks and
literacy / knowledge for the rural population and hence this concept is currently limited to urban and semi-urban
areas.
Aadhaar Enabled payment services:

15
In this system, any Indian citizen having an Aadhaar number updates his account with the same. All accounts
having Aadhaar number updated are to be reported to RBI, which in turn reports it to various government
departments. While making payments to people for working under initiatives like MGNREGA or various subsidy
schemes, the departments use this information for directly crediting the money to the beneficiarys account. This
not only reduces the delay in the benefits being received by the end user, but also reduces the chances of
corruption in the distribution of the benefits under schemes. Also the unique biometric identification data stored in
the Aadhaar database is expected to empower a bank customer to use Aadhaar as his/her identity to access various
financial services. A pilot scheme in four districts of Jharkhand state is currently being carried out under which
MGNREGA wages to labourers are credited to their Aadhaar enabled bank accounts.
E- wallet:
It is the recent development in digital banking which provides an advanced service to customer helps in increase
financial transaction as well as boost financial inclusion. This is a new concept in India that has been surpassing
credit card usage and is slowly beginning to replace the traditional payment methods. In simple terms; it is a
virtual mobile-based wallet where one can store cash for making mobile, online or offline payments. In India
ICICI bank, Indias first digital bank on a mobile phone took the initiatives to lunch e- wallet known as Pocket.
Pockets allows any individual (account holder or not) to download and instantly activate an e-wallet.
Users can fund it from any bank account in the country and start transacting immediately. It requires no
documentation or branch visit. Users can also choose to add a zero balance Savings Account to it
The
e-wallet
of
Pockets
is
Indias
most
comprehensive
wallet
which
can
be
used to pay on all websites and mobile apps in the country.
This e-wallet allows users to instantly send/request money to/from any e-mail id, mobile number, friends on Face
book and bank account
Apart from ICICI many players also providing this facility, like PayTm, momoe, State Bank buddy, HDFC Chillr,
Axis banks lime etc.
Major challenges towards digital banking:

Security Risk:
The problem related to the security has become one of the major concerns for banks. A large group of customers
refuses to opt for e-banking facilities due to uncertainty and security concerns. According to the IAMAI Report
(2006), 43% of internet users are not using internet banking in India because of security concerns. So its a big
challenge for marketers and makes consumers satisfied regarding their security concerns, which may further
increase the online banking use.
Privacy Risk:
The risk of disclosing private information & fear of identity theft is one of the major factors that inhibit the
consumers while opting for internet banking services. Most of the consumers believe that using online banking
services make them vulnerable to identity theft. According to the study consumers worry about their privacy and
feel that bank may invade their privacy by utilizing their information for marketing and other secondary purposes
without consent of consumers.
The Trust Factor:

Trust is the biggest hurdle to online banking for most of the customers. Conventional banking is preferred by the
customers because of lack of trust on the online security. They have a perception that online transaction is risky
due to which frauds can take place. While using e-banking facilities lot of questions arises in the mind of
customers such as: Did transaction go through? Did I push the transfer button once or twice? Trust is among the
significant factors which influence the customers willingness to engage in a transaction with web merchants
Customer Awareness:
Awareness among consumers about the e-banking facilities and procedures is still at lower side in Indian
scenario. Banks are not able to disseminate proper information about the use, benefits and facility of internet
banking. Less awareness of new technologies and their benefits is among one of the most ranked barrier in the
development of e-banking
Cost Management:
Though Digital banking provides a basket of services at the door step of consumer at a large but maintenance of
these services involves substantial cost for both banker as well as customer. Hence management of cost is a great
challenge.
16
AREAS FOR MAKING BANK DIGITAL SUSTAINABLE:

Although banks and financial services companies were at the forefront of using technology to improve
productivity, service quality and reduce costs, for most existing banks, legacy platforms have become the most
significant barriers to innovation and keeping up with rapid pace of technology evolution. Often, there are a small
number of companies and professionals proficient enough to understand and figure out how to embrace new
technologies. The gap lies in the fact that the people driving technological innovations at banks have grown up on
technology that is different from what is prevalent in todays times. Banks will have to make changes to the way
they operate, including making the operating model agile so as to easily adapt to changing business dynamics.
Some of the key measures banks may need to take are as follows:
Transformation in Branch Banking

Branch banking needs to undergo significant transformation. As technology enables every aspect of banking to go
online, and as cash usage falls, traditional branches will no longer be necessary. Given their high fixed cost,
branches will need to become dramatically more productive, or significantly less costly. Banks have already
reduced staff levels, closed the most uneconomic branches and have started experimenting with new branch
concepts. These trends need to be accelerated, as customer expectations and behaviours evolve. Branches may
remain, but need to take many forms, from flagship information, advisory and engagement hubs (offering
education, financial advice, full service capabilities and community offerings) to smart kiosks (offering service,
sales, cash and video contact with a range of specialists). Leaders need to rapidly improve their footprints,
reducing branch size and costs, introducing new models and migrating transactions to low-touch digital channels.
Digital capabilities need to improve, so that branch service officers and bank customers use the same platforms,
with the same look and feel. The human touch must be available, just much more through digital channels. Banks
that will lag behind this trend will start to struggle, due to structurally uncompetitive economics.
Competitive reach by technology and advertising budgets.

When every aspect of banking can be done online, a banks target market and competitive arena will no longer be
defined by its physical footprint, but by its technology, regulatory boundaries and marketing budget. New entrants
will no longer have their pace of expansion constrained by the availability of acquisition targets and prime retail
locations. New entrants can grow rapidly, potentially creating dozens of new competitors and re-fragmenting the
landscape. Further, there will be more competition from nonbank players. Branding and marketing will thus
become more important than ever before Competition to be low-cost producer
Conventional wisdom suggests banks that engage certain customer segments holistically with targeted offerings,
advice and solutions will maintain high margins. However, leveraging digital, new entrants will able to offer
similar high-value services, unencumbered by the massive legacy cost bases of traditional banks. So, existing
banks will need to restructure their cost base, while at the same time investing in innovation around areas such as
analytics and delivery. As the pain of switching providers continues to decrease, customers will become even
more mobile, thus intensifying competition across all segments.
Every traditional bank needs to become the lowest cost producer, and (nearly) every product needs to have
acceptable returns. Moreover, the cost may drop by up to 50% on a per transaction basis in the next few years, as
banks redesign their processes and systems for the digital age, structurally changing their cost base and instituting
more aggressive ongoing cost management processes.
Innovative and smart devices alongside cards as the primary medium for consumer
payment
The customer should be able to select between account providers (e.g. credit providers, deposit accounts) or
locally stored value. Acceptance needs to be universal (with common cross-network payment protocols) and
value-transfer instant. Customers need to be able to make contact payments or send funds to any other unique
identifier (e.g. Aadhaar number, phone number, bank account, credit card number, etc.). Transfers of locally
stored value need to be traceable, removing the last powerful incentives to use cashtax avoidance. Cards will
continue remain popular, as they are quick and effective, allowing easy compartmentalization of spend and dont
run out of power.
More use of Biometrics

Biometrics (e.g. fingerprints, voice recognition) need to become commonplace in transaction authorisation, but
also remain tied to a replaceable physical device (e.g. smart phone). Biometrics is unique and unchanging, yet can
be captured and replicated, so the two-factor authentication (e.g. my fingerprint and my phone) should always be
part of the process.
17
Use of third party utilities

Industry utilities will arise in nearly every area of infrastructure (similar to the US bank in a box vendors such as
Fiserv), as cost pressures and technological advances force banks to focus on customer service and risk
management, rather than the development of undifferentiated and expensive processing and payments
infrastructures. A number of large banks with processing scale and efficiency will commercialise all or part of
their operations and technology departments and offer services to other banks. Existing technology service
providers can significantly expand their offering and enter complementaryservices for the banks. Likely examples
of processes provided by utilities could include customer authentication, fraud checking, payments processing,
basic account infrastructure and KYC processing.
Future steps taken in digital banking which accelerate financial inclusion:

Cyber security:
Cyber security is more than an IT challenge. Its a business imperative. There has been an increase in cyberattacks on financial services organisations - a result of advancement in technologies, increasing the flow of money
for such activities and a well-connected world. Critical digital assets are being targeted at an unprecedented rate
and the potential impact on business has never been greater. Banks need to develop a pro-active strategy to
counter such threats and invest heavily in next stage cyber security assets.
AML monitoring:
While creating innovative digital solutions for customers, banks will have to give equal importance to robust
client identification and transaction monitoring measures in order to prevent money laundering and terrorist
financing risks. The upside of the digital proposition is that it becomes possible to mine and analyse data, which
will not only help with regulatory obligations of verification of client identities, and monitoring of transaction
volume and value, risk rating, etc., it will also help mitigate risk in real time in an efficient and cost-effective
manner
Increased use of customer analytics:

Banks can no longer wait to embrace the power of advanced analytics to gain insights and evaluate opportunities
that will improve cross-selling, increase up-selling and enhance customer value
Quick deployment of digital:

Digital banking is getting more consumers to use online or mobile banking and is
simultaneously changing the surrounding landscape. The banking ecosystem, right from sales to back-end
processing via branch operations and product development needs to be digitised.
Emphasis on mobile:
The digital consumer wants his or her app to be simple, contextual and time-saving rather than just a mobile
version of the website. Banks will have to have a focussed delivery model for the mobile banking solution.
More online sales:

Customers will use multiple channels, research and open new accounts. Hence, the relationship between the
customer and bank will change. Banks will have to understand these changing needs and behaviour patterns of
consumers.
Increase usage of mobile payments:

Despite the slow start to mobile payments, changing demographics (who are the primary users) will be the trend in
the future and banks will need to invest in this category in order to remain competitive against new startups.
Security and authentication:

Cyber security will be extremely critical in the digital age with the increasing threat of malware and hackers.
Consequently, initiatives that incorporate biometrics such as fingerprints, iris scans, voice and other more secure
authentication options will replace passwords as a means to verify a user, simplifying enhancing the users
experience.
Incentivising the customer:

In a 24/7 connected and mobile ecosystem, all information is at the customers fingertips and hence expectations
of fast and easy access of services will be the norm. Banks will be challenged towards finding newer ideas to
engage customers. Incentivising the customer totransact and stay with the bank in the age of easy switching will
be observed.
18
Spend on innovation:
Non-finance companies such as Google, Facebook and Alibaba are looking to enter the financial services domain
and these are organisations that have a huge advantage in the digital world. Banks will have to invest heavily in
innovation in order to even stay on par with them.
CONCLUSION
India is now in the threshold of a major financial revolution with the digitalisation of banking services to provide
its customers with greater convenience and ease. Though there are many factors that accelerate the growth of
digital banking, it is not free from the challenges. It is the time for banks to match the rising expectations of its
customers with the help of digital banking as an effective and innovative tool. As a part of the ambitious vision of
Digital India, a collective action from all the banks, supports from regulators and government are required for
the development of digital banking.
Reference:
1.
BahlSarita (2012):E-Banking: Challenges & Policy Implication, International Journal of Computing &
Business Research
2.
BCG, FICCI, and IBA, (2014): Digital Banking: Opportunities for Extraordinary Gain in Reach, Service
and Productivity in the Next 5 Years, The Boston Consulting Group, FICCI, Indian Banks Association
3.
Chauhan Pinal, (2013):E-Wallet: The Trusted Partner in our Pocket, International Journal for Research
in Management and Pharmacy, Vol. 2(4)
4.
Chauhan Vikas and ChoudharyVipin (2015):Internet Banking: Challenges and Opportunities in Indian
Context, Apeejay - Journal of Management Sciences and Technology, Vol. 2 (3)
5.
Jamaluddin N. (2013):E-Banking: Challenges and Opportunities in India, Proceedings of 23rd
International Business Research Conference, Marriott Hotel, Melbourne, Australia
6.
Malhotra P and Singh B, (2009) The Impact of Internet Banking on Bank Performance and Risk: The
Indian Experience, Eurasian Journal of Business and Economics, Vol. 2, pp. 43-62.
7.
Mt Basavaraj, (2013): Electronic Banking Services in India A Case Study of Karnataka ZENITH
International Journal of Business Economics & Management Research, Vol.3 (6)
8.
RBI (2014): Report of the Technical Committee on Mobile Banking
9.
Singh P, (2013): An exploratory study on internet banking uses in semi urban areas in India,
International Journal of Scientific and Research Publications, Vol. 3, No. 8, pp. 1-5.
10.
ICICI Bank Website, (2015): ICICI bank launches Pocket by ICICI bank, Accessed January 25
19
BANCASSURANCE: AN INNOVATION TO BOOST THE INDIAN FINANCIAL

SERVICES SECTOR
ROJI KANUNGO
Research Scholar (UGC NET)
P.G. Department of Commerce, Utkal University, Bhubaneswar, 751004
Mobile- +91 9583754336
Email: rkrojisweet7@gmail.com
GANESH PRASAD PANDA
Research Scholar
P.G. Department of Commerce, Utkal University, Bhubaneswar, 751004
Mobile- +91 9090871127
Email: gpanda673@gmail.com
Abstract
Globalisation has thrown a lot of challenges to the Indian economy. To survive in the competitive financial world,
it has also brought up various reform measures in the form of innovating new product & services in the financial
services sector. Analysing the recent trends in the financial services, we find there is a tremendous change in the
banking & insurance sector which are the mainstay of Indian financial system. An unique innovation of 20th
century in the form of Bancassurance has benefited not only to the customers but also contributed to the GDP.
Bancassurance is the distribution of insurance products through banks which are beneficial not to insurance
companies but also generating income of the banks. Present study critically focuses on the needs, models,
regulations of Bancassurance in India, its benefits and challenges and the impact of Bancassurance on Indian
economy.
Keywords:Bancassurance, Financial services, GDP, Financial system

Introduction:
The era of LPG after 1991 created a competitive atmosphere in Indian economic sector. Indian economy becomes
open up to the world markets. At that time a lot of reform measures had been undertaken. As the economic
sustainability largely depends on the financial system, much more importance was given by the government to
energise the financial services which are an integral part of the entire financial system. The major innovations
came up substantially in the financial market to the economy. As banking and insurance sector are the 2 major
pillars upon which the financial structure rests on, a lot of innovations have been framed in the recent years
.Various financial services like merchant banking, lease financing, factoring ,venture capital, asset reconstruction
companies, angel investment are some of the examples. Bancassurance is a distinct financial service which
establishes a synergic effect by combining banking with insurance. Different models are there for penetrating
insurance to customers through banking by giving a fee based income to banks as well as product diversification
to insurance industries. Besides customer can get benefit from bancassurance by purchasing the product from
wide spread networks of commercial banks.
Relevance of the study:

Few years back, the bank was considered only as an intermediary between the individuals to accept deposits and
to give loans. Today the scenario has changed; after the liberalization along with the normal facilities banks
started selling insurance products through the wide network and it reaches every person in all the nook and corner
of our nation as one stop shop giving multiple services. It helps the banks to attain extra revenue which in turn
contributes to the GDP of the nation. Present study discuss about the impact of bancassurance on Indian economy,
the challenges faces and the benefits it provides to the Indian economy.
Literature review:
Scor (2003) studied on the bancassurance products origination & found that The term first appeared in France in
1980, to define the sale of insurance products through banks distribution channels.
Graham Morris (2001)opined that though Bancassurance in the Indian environment is at a very early stage of
development, it is new and untried, and the potential is undoubtedly there. Success will be likely to come more
20
easily through the strategic alliances and cross share holdings. Use of right technology and awareness and
education of the banking industry are other critical success factors for the insurance industry.
Kumar (2006) stated that The cultural difference between banks and insurance companies could pose a major
challenge to the growth of bancassurance. Large customer database and people trust on bank is the main
opportunity for banks as a distribution channel for insurance companies.
Objectives:
To study the conceptual areas including need, Models and various regulatory aspects of Bancassurance.
To analyse the present status of Bancassurance in India.
To examine the impact of Bancassurance on Indian banks by taking a case study of canara bank.
Research methodology:
The data are basically collected from secondary sources which include journals,
and newspaper articles.
magazines, various websites
Bancassurance: Integration of Banking & Insurance:

The banking and insurance industries have developed rapidly in the changing and competitive economic
environment all over the world. Due to the of globalization financial markets, up gradation of new
technologies, universalization of banking industries and with the expansion of non banking activities, the
insurance industry has globally brought in new channels of distribution into existence.
The growing global financial market have led the insurance & banking corporate to come together & innovate
some new range of products and service to widen their wings in the market place. The term bancassurance is a
combination of 2 words, which are bank & assurance. This term first appeared in France in
1980.Bancassurance means selling of insurance products through banks. With the help of bancassurance the
insurance products are allocated among the widely distributed network of banks, where banks act as a distribution
channel for providing varieties of banking & investment products and services. In European countries this term is
more familiar, as most of the banks there sell insurance products.
IRDA (Insurance Regulatory Development Authority of India) defines bancassurance as
Bancassurance
refers to banks acting as corporate agents fo insurers to distribute insurance products. Simply we can say that
bancassurance tries to bring synergies between both insurance companies & banks. The growth of bancassurance
depends on how well banks and insurance companies are able to manage in a best manner, the operational
challenges that are frequently thrown at them.
Need for Bancassurance:

A country can grow economically if it has a well equipped financial structure. In India the basic financial service
like banking and insurance have not reached yet to many rural people. Therefore there is a gap in the financial
structure which results in inefficient channelization of financial resources. If the resources can be channelized in
an effective manner it will increase the returns from basic financial structure of the country and it will also
improve the standard of living of people. As insurance policies as a financial instrument play a major role among
all the financial services. So RBI recognized the need of an effective method to make the insurance policies reach
people in every corner of the nation and all economic classes. The need for bancassurance in India recognized due
to the following reasons.
To improve the distribution channels of insurance policies, so as t reach to the hand of every common man.
To make available the insurance products at the basic financial point, the bank branches. Because India is a
country of 140 crore people who are diversely spread across the nation, having problem in connectivity into the
rural areas. Insurance companies in India do not have the manpower strength to reach out to such a huge customer
base. As the banks have a wide spread network across the whole nation. So its an opportunity for the insurance
companies to tie up with the banks to sell their products.
To improve the insurance services by creating a competitive atmosphere among the private insurance corporate in
the Indian market.
Models of Bancassurance:
Basically in India the bancassurance can be classified on 2 basis.
Structural classification and Product based classification
Structural classification
Referral model: Banks who intend not to take risk could adopt referral model. Under this model the actual
transaction with the clients is done by the staff of the insurance company either at the banks premises or
elsewhere. It is an arrangement where the bank having control over the clients data base, parts with only the
business leads to the agents/sales staff of insurance company for a referral fee or commission for every
21
business deal that was passed on. This model is suitable for all types of banks including the RRBs (Regional Rural
Banks) /co-operative banks and even co-operative societies.
Corporate agency: It is also another form of non-risk participatory model of bancassurance. Under this, the bank
staffs are trained to appraise and sell the products to the customers. Here the bank as an institution acts as a
corporate agent for the insurance product & in return receive a fee/commission .This model seems to be more
suitable for Indian banks & best for some major urban co-operative banks because it does not involve sharing of
risks and it also does not require huge investment in the form of infrastructure. Yet it can be a good source of
income for banks.
Joint venture: This fully integrated financial service involves much more comprehensive and complex
relationships between insurers & bankers. Here the bank functions as fully universal in its operation & sell of
insurance products are just one more function with in.With the rest of the activities being performed, banks will
also have a separate counter to sell insurance products. This includes banks which have wholly owned insurance
subsidiaries with or without foreign participation.
Product based classification

Standalone insurance products: under this bank offers the insurance products either through the referral
method or corporate agency without mixing the insurance products with any of the banks other products &
services. Insurance is marketed as an additional in the list of products offered to the banks customer.
Blend of Insurance with Bank Products
This method aims at blending of insurance products as a value addition while promoting the banks own
products. Thus, banks could sell the insurance products without any additional efforts. In most times, giving
insurance cover at a nominal premium/ fee or sometimes without explicit premium does act as an added
attraction to sell the banks own products, e.g., credit card, housing loans education loans, etc.
Regulations in India:
Bank assurance is now a buzzword in India. As banks are governed under the Reserve bank of India and Insurance
companies act under the governance of IRDA (Insurance Regulatory Development Authority) .In India it
originated in the year 2000,when government issued notification under the banking regulation act and allowed the
Indian banks to distribute insurance policies.
It was recognized to a large extent when the IRDA passed notification of corporate agency regulations in
2002.As per the concept banks can act as one life &non life insurer.
The conditions of RBI as regards bancassurance are the following
All scheduled commercial bank would be permitted to carryout insurance business as agent of insurance
companies on fee basis, without any risk participation. The subsidiaries of banks will also be allowed to undertake
distribution of insurance products on agency basis.
Banks will be permitted to form joint venture company to undertake insurance business with risk participation
subject to safeguards, if they will satisfy the following eligibility criteria.
Net worth of Rs.500 crores
At least 10% CRAR
Reasonable NPA
Performance of subsidiaries should be satisfactory
Net profit for at least 3 consecutive years
IRDA t to norms for insurance companies who want tie-up with banking companies are
Banks should have a minimum paid up capital of Rs.500 crores.
Each bank that sells insurance must have a chief insurance executive to handle all the insurance matters &
activities.
Banks can act as a corporate agent for only one life and one non life insurers and not more than that.
Present Status of Bancassurance in India:

The business of banking around the globe is changing due to integration of global financial markets, development
of new technologies, universalization of banking operations and diversification in non-banking activities. Due to
all these movements, the boundaries that have kept various financial services separate from each other have
vanished. The mixture of financial services has provided synergies in operations and development of new
concepts. One of these is bancassurance. This is a financial service generally provided by bank with some fee or
some or commission. In india , the current fianaila system has been revamped with the financial reforms proposed
by Narasimhan committee 1991 and narasimhan committee 1998. Banks have been diversified into several new
areas and broadened their horizons .Bancassurance is a new buzzword in India. It originated in India in the year
2000 when the Government issued notification under Banking Regulation Act which allowed Indian Banks to do
22
insurance distribution. It started picking up after Insurance Regulatory and Development Authority (IRDA) passed
a notification in October 2002 on 'Corporate Agency' regulations. Currently bancassurance accounts for a share of
almost 25 to 30% of the premium income amongst the private players in India. Indian insurance market quite
silent as longer period because of tradition system of sales insurance policy, therefore, the new channel of
distribution is needed, it is a Bank +Insurance company, it's also known as Bancassurance. As per March 2008,
the number of Insurance companies works in India are as given below.
Life Insurance Companies
23 Private Insurance Companies

1 Public Insurance Company (LIC)
22 Private Insurance Companies
6 Public Insurance Company
Non- life Insurance Companies
(Source: IRDA)
Certain Facts from IRDA Annual Report of 2014-15
Figure: 1
(Source: IRDA annual report 2014-15)

Figure: 2
(Source: IRDA annual report 2014-15)

Insurance company and Bank collaboration
Table no: 1
Birla Sun Life Insurance
Bank of Rajasthan ,Andhra Bank, Bank of Muscat,Development Credit
Bank,Deutsche Bank and
Catholic Syrian Bank
Aviva Life Insurance
HDFC
Standard
Insurance
ICICI Prudential
Bajaj Allianz
Canara Bank,Lakshmi Vilas Bank,American Express Bank andABN AMRO

Bank
Life
Union Bank Of India

Lord Krishna Bank,ICICI Bank,Bank of India,Citibank,Allahabad Bank,
Federal Bank,South Indian Bank, andPunjab and Maharashtra
Syndicate Bank,Centurion Bank andStandard Charted bank.
23
LIC
Corporation Bank,Overseas Bank of India,Vijaya Bank,
SBI Life
Tata AIG
SBI, BNP Paribas

HSBC, United Bank of India
(Source: www.bimaonline.com)
Benefits of Bancassurance:
To banks
The insurance company can diversify its product due to the selling of product in a wide area of branches of banks
leading to reduce the selling cost.
It increases the return on assets (ROA) by creating fee income through the sale of insurance products. This helps
the bank to cover most of their operating expenses
Banks has a strong brand name which can help to make a loyal customer base.
The products which are not feasible to sold by the insurance company due to the selling costs can be sold via
banking networks with a lesser cost. So it becomes affordable for the buyer.
To Insurance Companies
The insurance company can increase their business by taking advantage of the banking distribution channels.
Customer database like customer's financial position, spending habits, investment and purchase ability can be used
to sell the products and sell them consequently.
By reducing their expenses, insurance companies can serve better to customers by providing them with lower
premium rates and better risk coverage through product diversification.
It can build up innovative financial products more competently by collaborating with their bank partner
To Customers
It encourages customers of banks to purchase insurance policies and further helps in building better relationship
with the bank
The people who are unaware of and who are not in reach of insurance policies can take the advantage of the
widely distributed networks
Bancassurance model assists customers in terms of reduced price, diversified products, quality products, in time
and doorstep service.
Challenges of Bancassurance :
It is extremely a difficult task to expand bancassurance in the emerging markets. Globally, the insurers are
successfully persuading bancassurance to gain hold in markets with low insurance penetration and a limited
variety of distribution channels. The following are the challenges that are faced by bancassurance industry in
India:
Banks are generally used to only product packaged selling and hence selling insurance products logically do not
seem to fit in their system.
Private sector insurance firms are finding change management as a major challenge. A public sector bank
frequently gets a new chairman almost every two years from different bank. This results in an absolute change in
the distribution strategy.
The banks also fear that at some point the insurance partner may end up crossselling banking products to their
policy holders.
The change from manufacturing to pure distribution of insurance requires banks to pull together the incentives of
different suppliers with their own products in a more improved way.
Impact of Bancassurance on Indian Banks: A Case Study of Canara Bank:

The performance of both banks and insurance companies inter depend on each other. The following study shows
the impact of bancassurance on the overall financial performance of banks in India. We have taken Canara bank
for the study. The following study shows the impact of bancassuranceon ,the overall financial performance of
Canara bank. Canara Bank was founded in 1906 and nationalized in 1969. The Bank has tie-up arrangements in
both life and non-life insurance segments under its Bancassurance arm. The Bank earned a commission income
of `26.56 crore from its joint venture, viz., Canara HSBC OBC Life Insurance Company Ltd. Canara Robeco
Asset Management Company Ltd. A commission income of `15.40 crore was earned under Non-Life (General)
Insurance business from its tie-up arrangement with M/s United India Insurance Company Ltd (UIICL). A
commission income of `5.50 crore was earned by the Bank from its Corporate Agency Agreement with M/s
Apollo Munich Health Insurance Co. Ltd for marketing their health insurance products. The Bank also has
24
Corporate Agency Agreement with M/s Export Credit Guarantee Corporation of India for marketing export
policies through its branches across India.
The following table shows the financial position of Canara Bank and the income derived
from bancassurance
business.
Financial position of Canara Bank and income derived from its Bancassurance business.
(In crores)
Table no: 2
% net CanaraHSBc
Year
Net
Advances
Deposits
Divided
Net
of
OBC life ins. UIICL
worth
Profit
NPA
CompanyLtd.
2010-11
18,302
211,448
293,257
487
3877
1.11
51
11
2011-12
20,978
232,728.
2012-13
23,143
242,435
2013-14
24,678
301,326
2014-15
27,085
330,293
(Source: IRDA annual Report)
326,894
355,684
420,603
473,724
487
576
507
540
3247
2951
2589
2858
1.46
2.18
1.98
2.65
26
26
26
26
12
13
14
15
Analysis:
In this table we can see that net worth of Canara bank is in an increasing trend. It has increased 47.55% from
2010-11 to 2011-12. Similarly advance also increasing year to year. Take the case of deposit and dividend they
are also showing a positive trend. The Net profit is fluctuating since many other factors are there. And it is clear
that the overall growth rate of this bank is increasing year to year.
Canara Bank has tie up arrangements in both life and general insurance segments under bancassurance division.
So If we come to the Bancassurance then here we can see that the commission derived by Canara bank from life
insurance business is decreasing where in case of non life insurance it is increasing. The bank earned a huge
amount of income from bancassurance in 2011-12 from Canara HSBc OBC life ins. Company Ltdand the
business dropped as income earned has decreased.
We can draw the conclusion that by showing growth in the Net Profit, net worth and deposits etc. Income from
Life Insurance and General Insurance Business, Proportion of insurance income with Net Profit of Canara bank
reveal that bancassurance has paved a way for banks to grow. Although there are number of other factors which
have contributed to the growth of banks, but Bancassurance has an impact.
Suggestions:
The employees of the banks must be given appropriate training to sell insurance products so that they can respond
to any queries of the clients and can supply them with products according to their needs.
The banks management and the management of the insurance company should amicably be able to resolve any
conflicts arising between them in future.
Banks and insurance companies should improve the products frequently according to the needs of the customers
The insurance companies need to design products specifically for distributing through banks
Conclusion:
In a country like India which consists of a diverse set of people combined with problems of connectivity in rural
areas makes the insurance selling a very difficult task. So due to this reason, insurance companies require good
distribution strength and huge manpower to reach out to such a huge customer base. In this way bancassaurance
must provide security and safety to the rural as well as urban people. As a recent trend this mechanism impacts the
Indian financial sector to a greater extend and the banks are being exposed to the insurance products selling. Bank
spread all over the countries so insurance company does not have any branch section requirement. Bank and
insurance companies mange all the things shall be perform his duties well with the get a structural benefits of the
Bancassurance model available in the country.
References:
1.
2.
3.
4.
Amandeep (1991), Profits and Profitability of Indian Nationalized Banks, A Ph.D. Thesis submitted to
UBS, Punjab University, Chandigarh.
AbheekBarua, (2004), Bancassurance - New concept Catching up Fast in India, The Chartered
Accountant, Vol.23, No 8, pp.56-67.
A. Karunagaran, Bancassurance: A Feasible Strategy for Banks in India, Reserve Bank of India
Occasional Papers, Vol. 27, No. 3, Winter 2006.
Balasubramanya S. 2002,IT wave breaks over banking, THE CITY, Aug Sept 2002
25
5.
6.
7.
8.
9.
10.
Bancassurance: A new feasible strategy in banking & insurance sector moving fast in India by Shivani
Gupta, Dr. Ajay Jain &Anubha. (IJRIM Volume 2, Issue 2 (February, 2012) ISSN 2231-4334)
Insurance Regulatory and Development Authority (IRDA), Report of the Committee on
BANCASSURANCE, 7th June, 2011, p: 8, 2011.
Karunagaran A (2005), Towards Universal Banking in India Some Regulatory and Supervisory
Issues, IBA Bulletin, January, Vol. XXVII, No 1, pp.146-159
Kane, E. J. 1996. De Jure Interstate Banking: Why Only Now? Journal of Money, Credit, and Banking
28, no. 2: 141-61.
Occasional Papers, Vol. 27, No. 3, Winter 2006. Dr.NanditaMishra, Bancassurance: problem and
challenges in india, Integral Review- A Journal of Management, Volume 5, No. 1, June-2012,pp 52-63
Insurance Regulatory Development Authority, Annual Report, various volumes, New Delhi.
www.irda.org
26
RURAL RETAIL MARKET: OPPORTUNITIES AND INNOVATIONS

MAMATANJALI PARIDA
Research Scholar,
Berhampur University, Berhampur, Odisha
Email: silentjolly@gmail.com, Mobile +91 7205 803 972
CHANDRIKA PRASAD DAS
Research Scholar, (UGC NET)
P.G. Department of Commerce,
Utkal University, Bhubaneswar -4, Odisha
E-mail- chandrika.das9@gmail.com, Mobile 9439 441 941
Abstract
Rural market in India is now an attraction for marketers having a great potential. Once there were days when
rural folks identified products with their colour and value but not with their brands. In those days marketers are
also facing great difficulties to make reach their brands to rural customers. Rural markets were confined to melas
and haats. Now things are changing. There is a vast demand. Marketers are also trying hard to make aware by
adopting many strategies and retail are now become a buzz word. Companies open their retail outlets and
initiating many innovations in products, methods, prices and also in promotions. This paper is focusing on those
innovations by marketers and the way those overcoming challenges. Through their initiatives they including rural
people by providing employment opportunities, awarding people through many shows and interesting games,
availing products at discounts etc. These initiatives are also giving satisfactory returns. Now rural people is much
aware of the brands through promotional activities and retail marketing in rural areas stepping towards a great
future.
Key Words:Rural market, Retailing, Innovations, Initiatives, Demand

Introduction
Rural market now is in interest on account of its vast unexploited potential. With a population of 790 million, 50%
of Indias income contribution comes from it. It positively consists of one hundred and twenty million households,
not less than 12.2 percent of the worlds consumers. The rural market was tempting since it comprised 74 per cent
of the countrys population, 41 per cent of its middle class, 58 per cent of its disposable income and a large
consuming class. That is rural India for you.
The days are gone when a rural consumer went to a nearby city to buy branded products and services. There
were a time when only a selected household consumed branded goods, be it tea or jeans. There were days when
big companies scared to establish their brands rural markets. However, things are changing fast now. Nearly 100
million people have evolved out of poverty in the last 10 years. , According to McKinsey report rural India will be
a market worth USD 500-600 billion by 2020. It is also anticipated that rural consumption will be equal to current
urban levels by 2017. The economy is vibrant, incomes are rising and the habits, preferences and attitudes are
changing rapidly. In view of the large investments made by the government in rural infrastructure pushing income
and demand level, the prospects are seen bright for rural India. With empowerment of rural people with education,
employment, higher purchasing power, better media exposure, better connectivity with outside world, they
provide a massive unexplored pool of consumers. Today, rural markets are critical for every marketer may be it
for a branded shirt or an automobile. Time was there when marketers thought a very less effort like a van
campaign, ads in cinema and a few wall paintings would sufficient to entice rural folks. Thanks to the increasing
literacy level and media explosion, people are becoming conscious about their lifestyles and about their rights to
live a better life. Brand consciousness is on the rise. So, to be successful in the rural market, companies will have
to be innovative and sensitive while devising marketing strategies. Traditional urban marketing strategies will
have to be localized as per the demands of the rural market.
Objectives
To analyze the challenges and available opportunities in the rural market.
To identify various innovations in rural retailing.
Research Methodology
The research article is purely based on secondary data which has been collected from various research journals,
articles, various company sites and research is descriptive in nature.
27
Rural Retail Market: A Conceptual Study

In the growing market, retail marketing has become one of the major emerging trends in the entire economical
cycle. It is the retail market only which provides the consumer a basic platform to encounter with goods and a
shop keeper for the first time. Retail market consists of a fixed location like boutique, store, departmental store
etc, here in these location consumers meets the shop keeper and purchase goods in return of certain value.
Maintaining a certain profit margin, these shop keepers sell goods to their consumers. The basic motive of these
shopkeepers is to satisfy the consumers and fulfill their needs and demands.
India has the 5th largest place in the worlds retail market. The country gets fourth rank among the survey of 30
countries in terms of global retail development. India has an extensive sales and distribution network. It is
estimated that there are over 1 million market intermediaries - wholesalers, stockiest, transporters and retailers that are involved in the distribution of a variety of consumer goods. Marketers use this network to access nearly
3,800 cities and towns and over half a million villages. The rural population dominates the Indian market with
over 790 million consumers (70% of the total population) spread across villages in the country. Typically Indian
rural retail stores are in the form of haats and melas. Rural retailers are far less specialized than their urban
counterparts and carry a wider range of products. While urban areas have a range of distribution outlets from large
supermarkets and departmental stores to the smaller neighborhood retail stores, almost every village in India is
catered by small shops that are part of the local supply network.
One more thing is need to be discussed here which will put the importance of retailer in rural trade. Rural
consumers brand choices are greatly restricted and this is where the retailer comes into the picture. The rural
customer generally goes to the same retailer every time to buy goods. Naturally theres a very strong bonding in
terms of trust between the two. Also with the low education levels of rural sector the rural buying behavior is such
that the consumer doesnt ask for the things explicitly by brand but like they know all toothpastes by Colgate,
all washing powder by surf and all almirahs as Godrej. They are also calling different products with their
features i.e laalwalasabundena and also by value i.e paanchrupeywali chai dena. Now in such a scenario the
retailer pushes the brands on the customers whatever brand fetches him the greatest returns. Thus, as there is a
need to understand the rural consumer, similarly need is there to study the retailer, as he is a chief influencer in the
buying decision.
Challenges Faced By Rural Market

Rural markets, as part of any economy, have untouched potential. There are several difficulties confront by the
marketers to fully explore rural markets. The concept of rural markets in India is still in evolving shape, and the
sector poses a variety of challenges. Distribution costs and non availability of retail outlets are major problems
faced by the marketers. Pattern of income levels in rural markets is yet another differentiating factor that affects
the buying power and consumption behavior of rural consumers. The success of a brand in the Indian rural market
is as unpredictable as rain. These peculiarities of rural markets and rural consumers pose challenges to marketers
in reaching them effectively. There are a large number of small villages which are not easily accessible because of
all weather roads. The main challenges of rural marketing are discussed below:
Transportation Problems
Transportation is essential for movement of products from urban production centers to remote villages. In rural
India transportation facilities are quite poor. Nearly 80 percentages of villages in the country are not connected by
well constructed roads. Many parts of India have kuccha roads. Due to poor transportation facilities it is not
possible for a marketer to access the rural market.
Warehousing Problems
A storage function is necessary because there is a time gap between production and consumption of commodities.
Agricultural commodities are produced seasonally but they are demanded over the year so there is need to store
them. But in rural areas, there is lack of public as well as private warehousing. Marketers face problems of storage
of their goods.
Underdeveloped People and Underdeveloped Markets

Rural society in India is underdeveloped. Modern technology has tried to develop the people and markets in rural
areas. But the technology has made very less impact in rural areas.
Inadequate Media Coverage

Media have lots of problem in rural areas. Television is a good source to communicate the message to rural
people. But due to non availability of power as well as television sets, majority of rural population cannot get the
benefits of various media.
Many Languages
28
India is a country of many languages. Language becomes barrier in effective communication in the market efforts.
The number of languages vary from state to state, region to region and district to district, etc.
Low Level of Literacy

The literacy rate is low in rural areas as compared to urban areas. Marketers face communication problem due to
the lack of literacy rate. Print medium is not much effective and it is irrelevant since its reach is poor. So, low
level of literacy becomes challenge for marketers in rural areas.
Seasonal Demand
Seasonal demand is main problem of rural market. Agriculture situation plays a significant role in the demand of
commodities in the rural market because it is the main source of income. Again agriculture depends on monsoon
so buying capacity of rural consumers varies. Despite this, many rural areas are not connected by rail transport.
Kuccha roads become unserviceable during monsoon.
Opportunities Sustain In The Rural Market

With many problems there are also various opportunities to be tapped. The demand is anticipated like that the
market size for the fast moving consumer goods (FMCG) in the rural markets in India is estimated to be Rs. 6,500
billion Consumer durables at Rs. 500 billion, agricultural inputs (including tractors) at Rs. 4500 billion, and
automobiles (two wheelers and four wheelers) at Rs. 800 billion, total to Rs 12,300 billion. With this demand
other opportunities are as follows:
Income Level
The increment in household incomes made a drastic change in rural retail image. With the increased working
population, the purchasing power of the rural population has gone up.. The various government employment
schemes like MGNREGA & many more help to raise the income level of rural population.
Literacy Level
Still major population in rural is reluctant towards education. Primary level education in the rural sector is below
60%. Thus the demand for products like books, magazines, notebooks, pens/pencils, drawing instruments,
calculators, computers etc. is low. But changes are taking place due to efforts of Govt. and corporate people both
.The govt. and corporate sector (in form of CSR) is coming together for promotion of literacy in the rural sector
and effect has been shown in the form of risen percentage up to 23%. This is resulted significantly to an
improvement in the socio-economic status of the rural people. With this growth the demand for educational
products has increased positively.
Family Size
Families in rural market are joint-ones. In which a group of people lived under one roof, ate food from common
chullah, held income and property in common and were related to each other by bonds of kinship. Till now they
live in joint families. They check with the family and discuss everything before buying any product. It is
important to consider the size of the family, depending upon this they can go for the product. The family
members discussion influences the purchasing decision. Here money plays the secondary role their composite
decision matters a lot. But with rise in population and resulting pressure on land and several other socio-economic
factors, joint families are breaking apart. A new concept of individualized joint families is emerging, in which
families stay in the same house but spend separately. Thus with the increasing numbers of individualized joint and
nuclear families, the range and number of branded products coming into the family can increase.
Occupational Pattern
The shift can easily be seen from cultivator to wage earner from last few decades in rural areas. Rural people are
also moving towards jobs and retailing professions. But there is a difference in wage and salary earner
consumption/investment pattern. A daily wage earner has to account for variations in income, whereas a salary
earner brings home an assured fixed amount and therefore can plan in a better way. The cultivators income is
highly seasonal with more disposable income available immediately after the harvesting season. Many villagers
are shifting from simple cultivator to wage earner. They earn their daily livelihood by doing extra work in off
season which leads to higher demand.
Social Custom Norms

Social norms and customs play a significant role in determining individual and collective behaviour in rural India.
Village elders and individuals such as the titular head of the village, caste leaders, priests and such socially
important people have a major influence on the rural people. They frequently influence the purchase decisions of
29
others in the village, acting as credible sources of information or playing the role of opinion leader. Similarly there
are some social norms and festivals on which certain kind of products demand shoots-up instantly. Thus
Companies must have to see the rural market as potential market and must develop significant market strategies
for its growth and development.
The urban market offers great opportunities to organized retailers but they are anticipated to saturate in the near
future. Hence, most big retail companies are envisaging entering the untapped rural market where there are much
more opportunities to avail. In addition to the consumption trends, the market potential of the rural market is
considered to be the driver of the future growth by a number of companies. For instance, ITC has taken a rural
initiative through ChoupalSagar and so have DCM HariyaliKisan Bazaars and Pantaloons in a JV with Godrej
(Aadhars). Besides, several other Indian companies are mulling over launching rural retail brands to face the
current economic slowdown, as rural areas have been less affected by the slowdown.
Innovations In Rural Retailing

To tap the vast potential of rural India, the models of marketing which is for the urban markets will not fruitful.
Innovative models are required to tap the potential of the rural India. Some proved innovative models which are
being used by the corporate in the rural India are discussed below
GodrejaGrovet Ltd.(Aadhaar and Manthan)

These outlets offer rural households the basic food, grocery, apparel, footwear to furniture, kitchenware and home
appliances. Manthan focuses on supplying animal feeds for dairy and poultry. On the other hand Aadhar is a
supermarket which also providing agricultural inputs like fertilizers, pesticides and services like valuable technical
guidance, soil & water testing services.
ITCs eChoupal
E-Choupal is termed as one of the most innovative concepts of independent INDIA. e-Choupal is an initiative of
ITC Limited, , which offers the farmers all the information about products and services. It is a large multi
business conglomerate in India, to link directly with rural farmers via the Internet for procurement of agricultural
and aquaculture products. Following the success of the e-Choupal, the Company launched ChoupalSaagar, a
physical infrastructure hub that comprises collection and storage facilities and a unique rural hypermarket that
offers multiple services under one roof. Farmers can access latest local and global information on weather,
scientific farming practices as well as market prices at the village itself through this web portal all in Hindi. It also
facilitates supply of high quality farm inputs as well as purchase of commodities at their doorstep.
HULs Shakti
Shakti was initiated to reach the massive un-served and under-served markets that cannot be economically and
effectively serviced through traditional methods It seeks to empower underprivileged women of villages with
populations of 2000 or less by providing income generating opportunities, health and hygiene education through
the ShaktiVani program, and creating access to relevant information through the iShakti community portal. HUL
invests resources in training these village women to become entrepreneurs by helping them become confident and
independent. They are also a source of inspiration for the other women in the community. Started in 2001, Shakti
has already been extended to about 50,000 villages in 12 states Andhra Pradesh, Karnataka, Gujarat, Madhya
Pradesh, Tamil Nadu, Chhattisgarh, Uttar Pradesh, Orissa, Punjab, Rajasthan, Maharashtra and West Bengal
(respective state governments and several NGOs are also actively involved in the initiative). For HUL, it is
"enlightened self-interest" creating opportunities to increase the rural family income.
Maruti
It has been organizing road shows with film screenings. This is much like a travelling cinema that rural India is
already quite familiar and fascinated with. The only difference being that the film is not set up in a tent, but inside
a TATA truck fitted a Samsung LCD TV, an air conditioner and reclining seats. The film strikes a chord with the
villagers because it tells a simple story of an average villager who buys a Wagon R after being persuaded by a
friend who also bought a Wagon R.
" GaonChalo" by Tata Tea

"GaonChalo" is a distinctive rural marketing initiative started in the year 2006 in Uttar Pradesh by Tata Tea. For
penetrating the rural market, the company partnered with NGOs with wide reach among Uttar Pradesh rural
masses. The "GaonChalo project has creating employment opportunities to the youth of villages and small towns.
It has brought steady income to those who are distributors of Tata Tea. Tata Tea's consolidated market shares from
rural areas rose from 18% to 26.6%.
30
Nokia's Low Cost Handsets

According to marketers, rural India has a huge progressive customer base for mobiles. As most rural consumers
are price sensitive, Nokia has launched seven handsets in the price range of Rs. 1500 to Rs. 5500 targeting rural
customers. Further, Nokia is promoting a subscription based service called "Life Tools" which provides
information about agriculture and education that is helpful to rural people. It also provides entertainment services.
The "life Tools" service is priced between Rs.30 to Rs. 60 per month, based on the package an individual opt for.
Dabur Indian Oil Partnership

In order to tap India's rural market, Dabur India Ltd. Has tied up with Indian Oil Corporation (IOC). According to
the agreement between the two companies, IOC's retail outlets all over the country will stock and sell Dabur's
products consisting of healthcare, oral care, personal wash, skin care and home care products. The KisanSeva
Kendra is a one stop rural retail outlet of IOC, which offers fuel and nonfuel products like fertilizers, grocery,
tools used for cultivation, seeds, personal care products, auto spares, etc. There are 1600 such IOC outlets across
India.
Airtels's Telecom Revolution in Rural India

Airtel's rural start up package offers its customers a Motorola handset for just Rs. 1599. Its recharge cards come in
a minimum denomination of Rs.10, so that even daily wage earners can afford to use the service, Airtel is
spreading awareness in villages by its roadside advertisements highlighting its red and white logo. It is also
increasing its business network through commission based retailers, who can be anyone who is selling cigarette,
paan, textiles, etc. The company already has 55000 retailers in Bihar and Jharkhand, and is planning to expand the
network by approaching 5000 more cigarette and paan sellers.
Mahindra Leading Brand in Rural India

After launching its Super Turbo 595 DI Tractor, Mahindra wanted to create awareness about its new technology
and high efficiency to farmers and thereby sell the tractor. It, therefore, identified opinion leaders and progressive
farmers and organized interactive discussions between the company (Mahindra) and its target audience (farmers
and opinion leaders). It gave free test rides and thereby sold the tractor initially to opinion leaders. This marketing
activity was carried out in Maharashtra, Haryana and Punjab. After using the tractor for a reasonable time period,
the initial buyers were glad to have the product and expressed their positive word-of-mouth about the tractor to
their friends, relatives and neighbors. This initiative has helped the company to a great extent.
DSCL HARYALI Stores

HariyaliKisaan Bazaar" is a pioneering micro level effort, which is creating a far-reaching positive impact in
bringing a qualitative change and revolutionizing the farming sector in India. It is also an example of how well
meaning corporate can contribute to development of agriculture by building sustainable business models. It seeks
to empower the farmer by setting up centers, which provide all encompassing solutions to the farmers under one
roof. Each "HariyaliKisaan Bazaar" centre operates in a catchment of about 20 kms. A typical centre caters to
agricultural land of about 50000-70000 acres and impacts the life of approx. 15000 farmers.
Bharat Petroleum
Bharat Petroleum is planning to target cluster of smaller villages with a population of about 200 to 250
households. It is planning to set up the pumps for these small villages will be smaller in size and therefore will be
low priced units in terms of the cost of the infrastructure to establish these outlets. These retail outlets will serve a
radius of seven to eight such villages.
Reliance Rural Hub

It is piloting a rural-business-hub (RBH) model in a Gujarat village, which if successful and implemented could
rival that of DSCL's HariyaliKisan Bazaar and Future Group's Aadhar. RBH would offer farm input, food,
grocery, consumer durables, and financial and health services. It will also provide farmers a platform to sell their
produce, an equivalent of village haat.
Warna Bazaar
Warna Bazaar is the name of two superstores in Kolhapur and Sangli in Maharashtra, which are set up in the area
of 10,000 sq. ft. Along with that they have 30 stores of 500-1,000 sq. ft at the village level. These stores retail
products like apparel, food, grocery, agri-inputs, vehicles, consumer durables and hardware.
KisanSeva Kendra
31
Kisansevakendra is a low cost business model by Indian oil corporation of a retail outlet offering fuel & other non
value added services with penetration in rural markets generating high returns. It is a one stop center of service for
the farmers at his doorstep making available Diesel & petrol with Q & Q seeds, pesticides, fertilizers and other
agri needs Nutan stoves, Hurricane lamps, Daily needs such as grocery, Personal care stationary for children
,tools, auto spaces, Location specific value additions.
Other innovations are as follows:
Godrej & Boyce Chotu Kool Refrigerator :

It is a perfect refrigerator for rural population. It does not require regular power supply. It provides the rural/ semi
urban areas with a high end product.
Vortex Low- Cost ATM :

Allow cost ATM which provides banking solutions to people in rural areas. The machine consumes vary less
power and hasan elegant rugged & reliable cash dispense model.
Tata Chemicals Water Purifier :

Swach range of water purifiers promise pure water to the people at a very low cost of INR999 only/-. It does not
require running water of electricity to provide harmless, bacteria free drinking water.
Nestle :
It provides smaller packs of Maggie noodles & tomato ketch-ups. The initiative aimed at Indian sing Nestles
global portfolio to propel its growth in the rural markets with an aim to penetrate into rural markets, specifically
the consumers at the bottom of the pyramid.
Conclusion
Rural markets consisting of 70% of the total Indian population with thin density and inadequate infrastructure
with low per household income poses unique challenges to marketers and calls for innovative marketing solutions.
Top line or bottom-line, growths should not be the objective of getting into rural markets. For as of now, all these
markets offer is a future opportunity. One cant really make fortunes out of these markets as yet. Marketers are
also very aggressive with innovative strategies. Now they are able to grab the opportunities of vast rural markets.
Basically the small packs of different products are very effective in rural markets. So the fact remains that the
rural market in India has great potential, which is just waiting to be tapped. Progress has been made in this area by
some, but there seems to be a long way for marketers to go in order to derive and reap maximum benefits.
Moreover, rural India is not so poor as it used to be a decade or so back. Things are sure changing.
References
1.
2.
3.
4.
DeySurajit,RafatSameena,Agarwal Puja(2012),Organized Retail in the Rural markets in India, IOSR

Journal of Business and management,volume-6,pp1625,2278.487x
Dr. UpadhyayaMakaranda,Marketing in Rural India:The Innovative Selling Mantra,National Monthly
rafreed Journal of Research in Commerce &Management,volume No1,2277-1166
Kumar Pawan, DangiNeha(2003),Rural Marketing in India: Challenges &Opportunities,International
Journal of Management & Social Sciences Research,volume2,No-8,2391-4421
SikkapiyushKumar,Kar Sanjay(2008),An Insight into the Growth of new re
S.Sathyanarayana, Ganesh Ramani(2008),Rural Retail Management,Journal of Contemporary Research
in Management
32
MEASURES TAKEN BY BANKS TOWARDS ENVIRONMENTAL

SUSTAINABILITY.
MS. ANANYA MITRA
Faculty in Economics at USBM, Bhubaneswar, Odisha.
E-mail: ya.lubalu.dibya@gmail.com
DR. SHRADHANJALI PANDA
Faculty in Finance at Ravenshaw University, Cuttack, Odisha.
E-mail: shradha313@yahoo.co.in
Abstract
Sustainability is the buzzing word of this decade. The word sustainability itself has many dimensions- economic,
social, political, and environmental. This paper focuses on one of this aspect that is environment. In the same line
Indian economy can be divided into agriculture, industry and service sector. The contribution of service sector
towards GDP is the highest, 52.52% based on 2011-12 prices. So this paper focuses on service sector and more
specifically Banking Service and its measures towards environmental sustainability. Indias commitment to reduce
its carbon intensity by 20-25 percent from 2005 levels by 2020 provides tremendous opportunities for Indian
banks from funding sustainable projects to offering innovative products and services in the areas of eco-friendly
banking. The present conceptual paper aims to highlight the means to create awareness among target groups and
impart education to attain sustainable development through green banking.
Keywords: Sustainable Development, Indian Banking Sector, Green Banking

Introduction
Climate change is destroying our path to sustainability.
Ours is a world of looming challenges and increasingly limited resources.
Sustainable development offers the best chance to adjust our course.
Ban Ki Moon
The concern for environmental sustainability has given mass recognition to the concept of corporate social
responsibility. The potential benefits of the concept has gained the interest of the regulatory authorities, society,
NGOs, employees, customers as well as the international bodies to the issue. In this regard, this concern for
environmental sustainability by the banks has given rise to concept of Eco-friendly Banking. Banks consume tons
upon tons of paper in the form of loan documents, forms and statements. This consumption represents not only an
operating cost, but also a significant environmental impact .Banks large and small are addressing this reducing
paper use across their operations. The most common approach to reduce paper use is to encourage customers to
switch to electronic statements and correspondence. In 2010, for example, Bank of America sent more than 285
million correspondences digitally and eliminated 1,361 metric tons of envelopes through the implementation of
Deposit Image ATMs. Collectively, these initiatives averted the consumption of 6,724 tons of paper; this is the
equivalent of saving 151,000 trees. In an emerging economy like India, environmental management needs to be
the key focus area of the business fraternity and especially the banking industry being the major intermediary.
This would help the firms in the emerging economies utilize their limited resources in an optimum way without
harming the natural environment and face the global challenge of sustainability in successful manner
Banking Sustainability
Banking sector plays an important role in the economic growth of a nation. As the banks are among one of the
major sources of financing instrument for commercial projects so they can play a major role in promoting
environmental sustainability by funding the socially and environmentally responsible investment projects.
Organizations in the banking sector are generally adopting eco-friendly activities for the environmental
sustainability. Our planet can be compared as being a bank account: one can only withdraw so much from it
before it starts to hurt. In other words, we all need to make sure that our use does not exceed our savings. Simply
put, this is sustainability - challenge to use resources in the most efficient way including financial, social and
environmental resources. Sustainability requires innovation in all areas that bring benefits for everyone. Without
typical bank branches that consume more of the resources of traditional banks rather developing a modern
technique makes sense from a business perspective as well as an environmental one. Clients should not carry the
costs of things they don't need - plus the planet doesn't either.
33
Banks and all the financial institutions are focusing on the environmental protection with the purpose of fulfilling
the dual role. The first role is to work towards ethically and socially responsible banking and second as an
important role of their corporate social responsibility. Banks have realized the importance of triple bottom line (
i.e. people, planet and profit) in their day to day functioning and so its main motive of profit has now shifted
towards three Ps. And this theme has worked as a drive towards Eco-friendly Banking concept.
Initiatives Taken By Indian Banks

Indias growth story and commitment to cut its carbon intensity by 20/25 percent from 2005 levels by 2020
provides tremendous opportunities for Indian banks from funding sustainable projects to offering innovative
products and services in the areas of eco-friendly banking. Initially, these commitments to environmental and
social guidelines will cause a huge financial burden for Indian banks. For effective Eco-friendly banking, the RBI
and the Indian government should play a pro active role and formulate an eco-friendly policy guidelines and
financial incentives.
Initiatives taken by SBI

Launched Green channel counter facilities in the year 2010 that helps to make paperless banking.
Collaboration with Suzlon Energy Ltd. to use wind power in the place of thermal power in most offices located in
Gujarat, Tamil Nadu and Maharashtra .
Initiated the carbon disclosure.
SBI and Export- Import Bank of India (EXIM Bank) both jointly provide a long term loan (upto 14 years) to a
Spain based companies Grupo T- Solar Global SA and Astonfield Renewable Resources for building solar plant in
India. Most of the financial institutions avoid giving long term loans to such projects because of their uncertainty
and technological changes.
Initiatives taken by Punjab National Bank:

Bank has started using energy efficient appliances & conducting the electricity auditing of their offices. On the
other side the bank is also accenting on green infrastructure.
A separate green audit sheet is being employed by the bank to access the impact of various green banking
initiatives implemented in the bank.
The bank has conjointly placed guidelines for supply the term loan to the business units and commercial projects
that are producing renewable energy and special guidelines has been issued to curb the units that use
environmental depleting substances.
In the year 2010-11 the bank has sanctioned nine commercial projects of wind energy comes with total sum of Rs.
1850.81 million to push and develop the renewable supply of energy.
Initiatives taken by Bank of Baroda
Internet banking, mobile banking was added as alternate delivery channel to reduce the use of paper in banking
procedure.
As a part of green banking initiatives backup consolidation, server and desktop virtualization were adopted.
While financing the commercial projects the banks give a due weight age to green projects such as windmills and
solar power projects which helps in earning the carbon credit.
The bank insisted to implement water treatment plant and obtain NOC from central/ state government pollution
control board while lending the loan to manufacturing units which emit toxic polluting substance.
Promotion of measure of pollution control and efforts for environmental protection & conservation and cleaning
of environment.
Initiatives taken by Canara Bank

Apart from internet banking, tele-banking & mobile banking, solar power biometric ATMs has been implemented
in a few rural areas.
Bank is not extending the finance to the new units which are involved in producing and consuming Ozone
depleting substances.
The bank has also stopped extending the finance small/medium scale unit engaged in the manufacturing of
Aerosols by using CFC.
The bank insisted to manufacturing units which emit toxic polluting substance to implement water treatment plant
and obtain NOC (No Objection Certificate) from central/ state government pollution control board while lending
the loan.
The bank is providing loans for implementing solar lighting system, till the date the bank has financed 50,000
such unit lending Rs 6 lac to each unit.
Initiatives of ICICI Bank

34
Providing green banking facilities thus helping the bank in earning its carbon footprint
The bank is working with Green Business Centre in collaboration with other business organization having focused
on promoting green building, energy efficiency, recycling etc.
The bank has aided varied activities that helped in widespread of the ISO: 14000, which is associated in providing
Environment Management System Certification. Within the past they worked with industries like textiles, pulp,
cement, and paper and to encourage them for this method of certification.
Providing 50% relinquishment on the processing fee of selective car models that uses alternate mode of energy
like LPG (Liquefied petroleum Gas) & CNG (Compressed Natural Gas).
Recently the bank has given the loan fund of Rs. One billion to the companies venturing into energy economical
and environment friendly process.
Initiatives of HDFC Bank
Reduction in paper usage by issuing e-transaction advices to corporate customers & encouraging awareness
among retail customers.
Energy conservation by conventional light options by CFLs, and establishing green data centers.
Tying up with vendors for paper and plastic recycling & IT policy is strictly followed for disposing the IT assets
due for retirement.
For exploring the renewable energy 20 solar ATMs have been set up in the Bihar as the pilot test and furthermore
will be set up after it.
Focusing on green procurement by purchasing energy star rated electronic products & purchasing diesel generator
set and air conditioner that are compliant with the norms of central pollution control Board (PCCB).
Suggestions
For effective green banking, the RBI and the Indian government should play a pro active role and formulate a
green policy guidelines and financial incentives. Steps that can be adopted by Banks to Encourage Green Banking
are:
Educate through the Banks Intranet and Public Website.
Creating awareness
Participating in different events
Communicating through press
Providing CSR services related to green banking
Imparting education through e-learning programs
Making it a part of annual environments report.
Construct a Website and Spread the News.
Conclusion
Learning from their western counterparts, the banks in India are also adopting various environmental practices and
initiatives in their day to day business operations for the environmental concern and playing an important role in
maintaining the ecological balance. But the Indian banking sector is still at the initial stage of green banking
initiatives. As most of the banks are adopting and focusing only on those green initiatives which provides win-win
situation for the bank, that help to show the concern for the environment along with helping the bank in cost
savings and improved operational efficiency. So the time demands a little focus on the initiatives such as creating
awareness among society, and helping smaller firms to change their process so they can be more environmentally
friendly in nature and that will also widespread the concept of environmental sustainability. The survival of the
banking industry is inversely proportional to the level of global warming. Therefore, for sustainable banking,
Indian bank should adopt green banking as a tool for sustainable development without any further delay.
Reference
1.
2.
3.
4.
Blacconiere, Walter and Dennis Pattern, (1993), Environment Disclosure, regulatory costs and changes
in firm values, Journal of Accounting and Economics(December).
Rutherford, Michael (1994),At what Point can pollution be said to cause damage to the Environment?,
The Banker, January.
Schmidheiny, S and Federico J L Zorraquin, (1996), Financing Change: The Financial Community,
Eco-Efficiency and Sustainable development, Cambridge, MIT Press.
Starogiannis, D (2006) What is Environmental Responsibility of Banks UNEP FI Conference, June.
35
Websites
http://www.bankofbaroda.co.in/download/Annua lreport2012-13.pdf.
http://www.canarabank.com/english/downloads/Canara%20Bank%20Annual%20Report%20201213_low%20res%20- %20Option%205%20(1).pdf
http://www.financialexpress.com/news/bankingon- green-projects/811954/0.
www.foxbusiness.com
www.greenbank.com
http://www.hdfcbank.com/htdocs/common/pdf/corporate/business_responsibility_report.pdf.
http://www.icicicommunities.org/environment.html.
www.infocrystal.com
www.moneyrates.com
www.scribd.com
https://www.pnbindia.in/Upload/En/CSR%20Re ports%202010-11.pdf.
http://www.suzlon.com/images/Media_Center_n ews/163_SBI%20-%20Suzlon pdf.
www.wikipedia.org
36
EMPLOYEE TURNOVER A KEY CHALLENGE FOR IT SECTOR WITH SPECIAL

EMPHASIS ON INDIAN IT SECTOR.
MR. SHYAMASUNDAR TRIPATHY
Assistant Professor-HR
Institute of Professional Studies and Research (IPSAR)
Cuttack, Odisha, India
E-mail- shyamasundar.tripathy33@gmail.com
Abstract:
All businesses, large and small, have some way of keeping track of their finances. Businesses are constantly
looking for more ways to keep expenses low. One factor that is often overlooked, however, is the cost of employee
turnover. The biggest challenge faced by Indian IT Industry is not attracting the prospective employee but
retaining the talent as high turnover is back to a serious concern. . In India over the past few years, the ITES
sector has been growing in leaps and bounds. This has also posed certain Human Resource challenges to the
practitioners and the biggest challenge of them happens to be the retention of the ambitious and the transitory
workforce in these sectors. This paper explains some causes of high employee turnover, who it affects the most,
and ways companies can decrease employee turnover in order to cut hidden costs. Organizations in India must
give serious thought to what drives employee commitment. Employee turnover has been a never ending problem
faced in Indian organizations due to no fairness compensation, less opportunity in career growth, dissatisfaction
with superiors and so on. Hence it becomes very necessary for human resource managers to understand the
factors that prompt employees to quit an organization.
Keywords: Employee turnover, Retaining, Organization, Compensation.

Introduction
Employee turnover is a ratio comparison of the number of employees a company must replace in a given time
period to the average number of total employees. A huge concern to most companies, employee turnover is a
costly expense especially in lower paying job roles, for which the employee turnover rate is highest. Many factors
play a role in the employee turnover rate of any company, and these can stem from both the employer and the
employees. Wages, company benefits, employee attendance, and job performance are all factors that play a
significant role in employee turnover.
In a human resources context, turnover or labor turnover is the rate at which an employer gains and losses
employees. Simple ways to describe it are "how long employees tend to stay" or "the rate of traffic through the
revolving door." Turnover is measured for individual companies and for their industry as a whole. If an employer
is said to have a high turnover relative to its competitors, it means that employees of that company have a shorter
average tenure than those of other companies in the same industry. High turnover can be harmful to a company's
productivity if skilled workers are often leaving and the worker population contains a high percentage of novice
workers
Types of Employees Turnover

Internal vs. external turnover:- Internal turnover involves employees leaving their current position, and taking a
new position with the same organization. Both positive (such as increased morale from the change of task and
supervisor) and negative (such as project/relational disruption,) effects of internal turnover exist, and thus this
form of turnover may be as important to monitor as its external counterpart.
Skilled vs. unskilled employees:- Unskilled positions often have high turnover, and employees can generally be
replaced without the organization or business incurring any loss of performance. However, high turnover rates of
skilled professionals can pose as a risk to the business or organization, due to the human capital (such as skills,
training, and knowledge) lost.
Voluntary vs. involuntary turnover:Involuntary- In this case, the employee ceases to work for the company due to being laid off or terminated. It
could be because the company is trying to cut costs, or the employee has violated company policy. Voluntary
37
turnover is when an employee terminates employment on their own accord. There are several possible causes:relocation ,going back to school ,starting a family ,taking care of an elderly relative .
Employee Turnover is the Percentage of a companys employees who leave during a specified period. Although it
is most often expressed at annual turnover rate, the calculation can be done for shorter or longer periods.
Employees quit for many reasons but, in general, there are five important areas that motivate people to leave their
jobs.
Literature Review
Researchers have comprehensively studied on employee turnover attitudes. They give their efforts to develop and
understanding of employee attitudes. Employee leave organization with specific reason. In an attempt to clarify
the relationships among various attitudinal antecedents of turnover, Tett and Meyer (1993) they perform metaanalysis on 178 samples from 138 studies. They work on the relationships between job satisfaction, turnover
intention, organizational commitment and actual turnover (Tett and Meyer, 1993). In their research they state that
organizational commitment and employee job satisfaction both objects are perform independently in employee
turnover. In this both object employee job satisfaction is more effective then organizational commitment. Means
as per Tett and Meyer research employees job satisfaction is a major part in their job.
Lee, Holtom, Mc Daniel, Hill and Mitchell (1999), also done a research on this topic. They strongly argue that
only attitudinal findings are not sufficient to explain this issue. They do a more then 17 years research on this
topic and suggests that many employee left current organisation without any specific reason. Hom, CaranikasWalker, Prussi and Griffeth (1992) start a meta-analysis on employee turnover. As per them opinion only
employee job satisfaction is not important but some times external economical issues or employment rate are also
play important role in employee turnover. Generally as per current theory employee low job satisfaction is a major
reason for leave organisation. But as per Lee et al (1999) there are new theories are needed to explain the different
situation and reason. Some need to find out possible reason for which & why people leave the organisations.
The psychological viewpoint and goal is showing different object such as job dissatisfaction, employee
demography and organisation not full fill their commitment are the main issue in employee turnover (e.g.
Discenza& Gardner, 1992; Joseph &Ang, 2003). This research show important and insight reason for why IT
employee leave their job and change organisation frequently. Recent organizational behaviour and psychological
result show that actual reason behind employees turnover are salary package levels, Promotion, mobility, and skill
demands and jobs availability (Hom&Kinicki, 2001; Trevor, 2001).
Psychological research's show that employee turnover is individual factors. It is show that employee leave their
job due to job dissatisfaction or employee work place or organisational commitment. This research has show why
IT employees leave their current organisation.
Jing and Klein (1999), they reported that In fortune 500 firms IT employees job turnover ratio is 25 To 35%.
Moreover, Human resource management have a facing a key issue of IT employee job change ratio (e.g.
Niederman, Brancheau and Wetherbe, 1991). This research is same focus on attitudes leading to purpose to
employee turnover finding as reported by Tett and Meyer (1993).
The study of "IT Retention: The social context of turnover among information technology professional Lee
(2002)". This study was focus on social support from employee's colleagues and company's management. If they
give a support each other then company minimize employee turnover. That means social supports are also play a
important role in employee turnover. If employee got this support then they neglect other object like job
satisfaction, wedges or organisation commitment. So as per Lee, social support is a most important part in
employee turnover.
Causes of High and low employee turnover

High turnover often means that employees are unhappy with the work or compensation, but it can also indicate
unsafe or unhealthy conditions, or that too few employees give satisfactory performance (due to unrealistic
expectations or poor candidate screening). The lack of career opportunities and challenges, dissatisfaction with the
job-scope or conflict with the management has been cited as predictors of high turnover.
38
High rate of turnover may lead to decrease in:

Productivity
Service delivery
Spread of organizational knowledge
Low turnover indicates that none of the above is true: employees are satisfied, healthy and safe, and their
performance is satisfactory to the employer. However, the predictors of low turnover may sometimes differ than
those of high turnover. Aside from the fore-mentioned career opportunities, salary, corporate culture,
management's recognition, and a comfortable workplace seem to impact employees' decision to stay with their
employer.
A little rate of employee turnover may result into: Bringing in new ideas and skills from new hires, Better
employee-job matches, More staffing flexibility, Facilitate change and innovation.
Factors affecting Employee Turnover in Indian IT Industry

Push Factors / Controlled Factors: Push factors are aspects that push the employee towards the exit door. In the
literature it is also called controlled factors because these factors are internal and can be controlled by
organizations.
Pull Factors (Uncontrolled Factors):- Pull factors are those reasons that attract the employee to a new place of
work. In some papers pull factors are named as uncontrolled factors because it is out of the control of
organizations. Various pull factors derived from literature are: high salary, career advancement, new challenge
and interesting work, job security, good location of company, better culture, life-work balance, more
freedom/autonomy, well reputation of organization, vales, more benefits, good boss.
Personal Factors:- Personal factors such as health problem, family related issues, children education and social
status contributes in turnover intentions.
Turnover in India
India is likely to witness attrition rates of up to 25 per cent in 2016 Fresher-level attrition is expected to be around
12-14 per cent while at senior-level it will be in the range of 8-10 per cent, according to a survey by job portal
Wisdom Jobs.
"The survey reinforces the gut-feel in the recruitment industry that 2016 will see huge employee turnover in most
sectors. This churn can primarily be attributed to job seeker optimism arising from a stable economy leading to a
spurt in opportunities," said Wisdomjobs.com . Mid- and lateral-level attrition is pegged to grow to 15-20 per cent
and key role attrition is expected to touch 7 per cent during the year.
The sectors that are expected to get severely impacted are IT, ITES and software as these segments are expected to
witness attrition of 25 per cent or more at entry-level positions, the survey said.
Meanwhile, industries like FMCG, pharma and aviation exhibited a comparatively lower attrition rate at 18 per
cent, 12 per cent and 15 per cent, respectively. The sectors that would see the least rate of attrition are automobile
and infrastructure at 8 per cent and 10 per cent, largely due to lack of industry growth.
The causes of these high attrition rates include poor workplace engagement, unsatisfactory work environment and
poor salary structures and appraisals. Additionally, office politics and restricted career growth are also among
reasons for switching of jobs by employees.
Moreover, 65 per cent of the respondents said upbeat job market and improved economy is influencing them to
change jobs.
The survey added that the 'Make in India' campaign is gaining steam and thus affecting the traditionally less
affected manufacturing sector.
Attrition rate of top IT companies for the year 2015 Infosys
Indias second-largest technology outsourcer Infosys attrition rate is at 19.9%.
Wipro : Attrition rate is 21.1%
Causes of Employee Turnover in Wipro Tech Ltd

The economy - In exit interviews one of the most common reasons given for leaving is the availability of higher
paying jobs. In a better economy the availability of alternative jobs plays a role in turnover, but this tends to be
overstated in exit interviews.
39
The performance of the organization - an organization perceived to be in economic difficulty will also raise the
specter of impending layoffs. Workers believe that it is rational to seek other employment.
The organizational culture - much has been written about organizational culture. It is sufficient to note here that
the reward system, the strength of leadership, the ability of the organizations to elicit a sense of commitment on
the part of workers, and its development of a sense of shared goals, among other factors, will influence such
indices of job satisfaction as turnover intentions and turnover rate.
The characteristics of the job - some jobs are intrinsically more attractive than others. A job's attractiveness will be
affected by many characteristics, including its repetitiveness, challenge, danger, perceived importance, and
capacity to elicit a sense of accomplishment. A job's status is also important, as are many other factors.
Unrealistic expectations - Another factor is the unrealistic expectations and general lack of knowledge that many
job applicants has about the job at the time that they receive an offer. When these unrealistic expectations are not
realized, the worker becomes disillusioned and decides to quit.
Demographics - empirical studies have demonstrated that turnover is associated in particular situations with
demographic and biographical characteristics of workers. But to use lifestyle factors (e.g. smoking) or past
employment history (e.g. many job changes) as an explicit basis for screening applicants, it is important for
legality and fairness to job applicants to verify such biodata empirically.
Causes of Employee Turnover in Infosys

Most environmental contributors to turnover can be directly traced to management practices. Turnover tends to be
higher in environments where employees feel they are taken advantage of, where they feel undervalued or
ignored, and where they feel helpless or unimportant. Clearly, if managers are impersonal, arbitrary, and
demanding, there is greater risk of alienation and turnover. Management policies can also affect the environment
in basic ways such as whether employee benefits and incentives appear generous or stingy, or whether the
company is responsive to employees' needs and wants. Management's handling of major corporate events such as
mergers or layoffs is also an important influence on the work environment afterwards.
Some turnover is demographically specific, particularly for women who are balancing significant work and family
duties at the same time. Such women (or men) may choose to leave a company instead of sacrificing their other
interests and responsibilities in order to make the job work out. Some women elect to quit their jobs at childbirth,
rather than simply taking a maternity leave. Women's perceptions of their career paths might also be tinted by
their awareness of the glass ceiling, which may lower their level of commitment to any particular firm, since they
believe they're not in contention for top-level jobs. These factors translate into higher turnover rates for women in
many companies.
Retirement of experienced employees can cause high rates of turnover and extreme loss in productivity There are
certain Reasons for switching over to other companies. According to various surveys conducted among IT
employees, the following are the reasons for attrition.
Fairness of their compensation
No proper career objectives
Dissatisfaction with superiors
Work pressure and exhaustion
Organization climate
Emotional turmoil
Personal reasons
Ways to reduce attrition

Pay attention to develop people management skills of Managers because employees are leaving their managers
instead of Organization. Keep employees happy and productive.
Setting the right compensation and benefits is important too. Work with human resources to get current data on
industry pay packages, and get creative when necessary with benefits, flexible work schedules and bonus
structures.
Focus on Capability and creating an eco system where people development is at the fore front of leadership
mindset.
Engage employees over and beyond their day to day job and ensure that their insecurities and vulnerabilities are
addressed appropriately.
Provide growth opportunities and communicate it to the employees.
Managing expectation of employees is a key. It is essential to align employees and emphasize on the inevitability
of building competencies / capabilities rather than having a single minded focus on vertical growth.
Provide opportunities for skill up-gradation through training intervention or internal job assignment / movement.
Career Pathing plays a key role. It would serve the purpose if all employees who have spent 18-24 months in the
40
system are pro-actively spoken and asked for their career preferences to bring about a spark and end Monotony of
work.
Effectiveness of Reward & Recognition - work hard and party harder is the mantra in IT/ITES industry.
Celebrating success is a key. Strong reward & recognition framework keeping in view the context and levels also
plays a critical role in employee retention.
Hiring the right kinds of people can reduce attrition.
Effective training techniques can help reduce attrition rates.
Provide some hike for employees who are working in Onsite.
Conclusion
It was found through the analysis that most of the industries have faced the problem of turnover because of
dissatisfaction with work or working condition, the Working hours, workload and work schedules, incentives,
salaries and the facility which are provided to the worker is not up to the marks.From this study Employee
Turnover: Present scenario of Indian IT Industry reveals that most of the IT companies even the top most
companies are facing turnover due to many factors. The most important of all is Compensation, because plenty of
opportunities are there in the market for experienced, well qualified employees if they switch over to other
companies and they will pay more. There are many push, pull and personal factors are involved and initiating the
thought of turnover among employees. IT companies should be alert and frame some necessary strategies to
reduce attrition so that they can reduce the expenditure of employees for recruitment, training and development.
References
1.
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Campion, M. A., (1991). Meaning & measurement of turnover: Comparison of alternative measures and
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ACAS. (2010). Managing attendance and employee turnover. Advisory booklet. London: ACAS.
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Babaita, C., Sipos, G., A., Nagy, A. (2011). Leadership style and culture for innovation in hotel industry,
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J. (2009, November 12). What is Employee Turnover? Retrieved
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|Catherine M Gustafson (2002). Staff turnover: Retention.
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International journal of contemporary Hospital management 14 (3) : 106-110. Elanain Abu, M.H. (2010).
Testing the direct and indirect relationship between organizational justice and work outcomes in a nonwestern context of the UAE. Journal of Management Development, 29 (1), 05-27. Harris, K. J., Janes M.,
and Boonthanom, R., (2005). Perceptions of Organizational Politics and Cooperation as Moderators of
the Relationship between Job Strains and Intent to Turnover,Journal of Managerial Issues, Vol. 17, No.
1, pp. 26-42 |
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Maertz CP, Griffeth RW (2004). Eight Motivational Forces and Voluntary Turnover: A Theoretical
Synthesis with Implications for Research Journal of Management, 30(5): 667-683. Mobley, W.H. (1977).
Intermediate linkages in the relationship between job satisfaction and employee turnover. Journal of
Applied Psychology, 62, 237-240. Rankin, N. (2008). The drivers of staff retention and employee
engagement. IRS Employment Review. No 901, 1 July. 13pp. |
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Simon Booth, Kristian Hamer (2007). Labour turnover in the retail industry the Inte. J. Retail
distribution manage. 35 (4): 289-307 |
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Zhang M (2004). The positive research on the employees dynamic turnover model in IT industry of
China. Unpublished Master paper, Xi'an Jiaotong University. Zuber A (2001). "A career in food service
cons: high turnover", Nations Restaurant News, 35 (21):147-148.
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http://www.thehindubusinessline.com/industry-and-economy/india-in-the-eye-of-an-employee-turnover-stormsurvey/article4791185.ece
41
GROWTH AND PERFORMANCE OF E-COMMERCE IN INDIA

SUDHANSU SEKHAR NANDA
Doctoral Research Scholar
Department of Business Administration
Sambalpur University
Odisha-768019
Mail - nandasudhansusekhar.87@gmail.com
Contact 09439299659
Abstract:
In the era of post 2000, Indian retail market has perceived a revolution with the launch of e-commerce. Now-adays, India is the second largest mobile phone user base and third largest internet connections base in the world.
With the expansion of internet, the simulated retailers new retail layout has developed and indebted the existing
retailers to reflect the e-tailing model. The growth story of e-commerce is enlarged by an equitably young
population, rising income levels, advent to modern technology, early entrepreneurs and a vast market prospective.
This paper is an attempt to analyze and interpret the current market position, growth potential and the future
prospects of e-commerce in India.
Keywords: B2C, Consumer, E-commerce, Internet, Trends
Introduction:
The Internet explosion in India in 1999-2000, concreted the approach for a new technological period with the
progress and prospect of businesses. The Information Technology insurgence further placed the base stone for a
new digital phase. It has redesigned the retail sector from a traditional store to an online e-commerce setup.
Although, the online retail format had been around for last 15 years, but a positive environment has now
underway to proceed. The Indian e-commerce market looks quite favorable with its mass media character and
being an extremely essential part of recent time. In 2015, there are over 875 million online shoppers in the world,
with a global market expectedly awarding at $1.4 trillion.
A latest ASSOCHAM-PwC study believed that in the last 12 months about 40 million customers purchased online
and with larger structure in terms of 4G, broadband services and logistics. Presently, the e-commerce business is
attached with the total market revenues of over $17 billion. In the next 5 years, it is projected to develop at a
CAGR of about 35% each year clocking $100 billion in revenues. According to a study by the Internet & Mobile
Association of India and KPMG, by 2020, it is estimated to contribute around 4 per cent to GDP. At present, the
Indian online retail market has thousands of individual e-commerce sites which include the well-known online
retail companies such as Jabong, Snapdeal, Myntra, Makemytrip and Flipkart.com.
Table 1: Top E-Commerce Companies in India

Top E-commerce Companies in India
India Traffic Rank
Company
Flipkart
160
Craftsvilla
Amazon
189
Freekaamaal
13
Snapdeal
204
Groupon
19
Ebay
210
Fashionandyou
25
Jabong
254
Infibeam
40
ShopClues
273
Homeshop18
57
IRCTC
309
Junglee
66
Makemytrip
327
Limeroad
67
Bookmyshow
339
Firstcry
84
Mysmartprice
404
Yepme
423
Americanswan
99
Mydala
Source: Alexa India Rankings -10 Sep, 2015
India Traffic Rank
42
Company
Review of literature:
Einav, Liran, Levin, Popov and Sundaresan (2014) on their study Growth, Adoption, and Use of Mobile ECommerce have identified the early effects how mobile devices change Internet and retail commerce by
analyzing eBay's mobile shopping application and core Internet platform. The authors found that early adopters of
mobile e-commerce applications appear to be people who were relatively heavy Internet commerce users and
adoption of the mobile shopping application is associated with an immediate and sustained increase in total
platform purchasing, with little evidence of substitution from the core platform.
Prasad Bingi, Ali Mir and Joseph Khamalah (2004) on their study The challenges facing global e-commerce: A
multidimensional perspective have discussed the challenges that have been faced by the organizations. The
authors examined some of the issues that stand in the way of successful implementation of global electronic
commerce.
PwC (2014) on its study E-Commerce in India Accelerating growth examined the current state of e-commerce
landscape in India and industry concern. The authors found that there is humongous potential for e-Commerce
companies owing to the growing internet user base and advancements in technology.
Ernst & Young (2014) on their report Rebirth of e-commerce in India provided an insight into Indias eCommerce market. The report focuses on the various sub-segments of the e-Commerce market and highlights
factors driving growth across these segments. The authors have also elaborated on challenges faced by
stakeholders.
Objectives Of The Study:

To study the trends of e-commerce in India.
To analyze the market growth potential of e-commerce industry in India.
To identify the future growth prospects in e-commerce market.
Methodology:
The present study is descriptive and empirical in nature. The data used in this study is secondary in nature and has
been collected from several websites, textbooks, industry reports and reputed journals to get an insight into the
topic under study.
E-commerce trends in india:

As per KPMG, India has about one million online traders (both small & large) that are selling online through
varied e-commerce websites. Online travel accounts for nearly 76% of e-commerce business in India, with as
much as 75 % of the total industry having migrated to online commerce and generating nearly 25 % of its sales
digitally.
Figure 1: Sector Wise share of users in India
E-Commerce: Sector Wise Share

2%
6%
Travel
8%
E-Tailing
8%
Financial Services
Downloads
76%
Others
Source:-Internet and Mobile association of India Research

The highest revenue contributors in the sector include apparel, along with the computer and consumer electronics.
It is expected that by the end of 2016, 42 % of the total retail e-commerce sales will have major contributions
from product categories such as computers, consumer electronics, clothing and accessories.
Figure 2: Product categories of E-Commerce in India
43
Product Categories
3% 2%
Electronics
6%
Apparels & Accessories
10%
34%
Books
Beauty/Personal care
15%
Home/furnishings
Healthcare
30%
Baby Products
Source:-Internet and Mobile association of India Research

The e-commerce business has originated the financial funding from a new group of venture capitalists, angel
investors, private equity firms and seed funds with several high valued and strategic fund raising events. At
present, 15-20 percent of the total revenues stream for a number of big logistics companies is contributed by ecommerce business. The development position looks favorable, as it is projected to produce multiple by 70 times.
Currently, about 10,000 pin codes are already provided across India for delivery by e-commerce companies. This
sector will also appear as a major employment generator, as it is expected to generate direct jobs of 1 million. At
present, about 40,000 people are directly employed by this industry alone.
Market Growth Potential:

India has superior viewpoint of market possibilities with E-Commerce business. The sector has developed in ETravel which accounts for 70% of total commerce. E-commerce provides the necessity of young population which
is under the age of 34. The statistics specify that the household income is expected to reach $6790 in 2020.India's
E-Commerce market is on the way to become largest market in world.
Figure 3: Gender distribution of users in India
31%
Men
Women
69%
Source: Statistica 2015

Figure 4: Percentage distribution in Age in India
9%
16%
15-27
37%
28-34
35-44
38%
Other

Figure 5: B2C sales in India from 2011-2016 (In US $)
44
40
31.31
25.65
30
20
10
8.68
12.2
16.32
20.74
0
2011
2012
2013
2014
2015
2016

It is observed that most of the buyers are from the age between 15 to 27years. The young population is interested
in gadgets, fashion and travel etc. In the next figure it has seen that B2C sales have advanced since 2013 and it is
expected to become $31 billion US dollars in the year 2016.
As more people are buying smart phone, tablets and they have easy access to internet and 4G.The use of smart
phones and tablets growth will continue to grow every year .India has more than 100 million users and its
shipment from US has doubled since last year. Indian e-commerce is maturing, international interest of DST,
Global Soft bank have invested in commerce platform. In February 2014 online fashion retailer Myntra raised $50
million from Investment Company of Azim Premji chairman of Wipro. Flipkart acquired Myntra for a whopping
200 crore.
The Future Growth Scenarios:

The mobile commerce is resulting improved access in e-commerce marketplace. The industry is growing every
year, the worth of the transactions are projected to be Rs 36,000 crore according to Forester research. According
to Google India managing director, India enhances 5 million internet users a month which are the mobile users.
Recently, Myntra confirmed to close its website and relocated all the processes to its mobile app. Gartner said that
digital business means the concerns interface with contenders with limited equivalence of interest. They cooperate with each other to work in the same market to obtain global reach. In upcoming times, more eminence
mergers and acquisitions are estimated to come off in e-commerce sector. A prospect of e-commerce looks
favorable as more companies will be financing in small business start-ups. The E-Commerce deal list was
enormous in India last year, more investment are anticipated in coming years. Social media has become the
promotion for traders where they can publicize and endorse their product easily. The enlargement of mobile
networks and social media will take e-commerce to new possibilities that will change online retail markets in
future.
Conclusion:
The digital consumerism has a positive prospect and possibility for support in India. The online shopping position
in India is shifting very quickly with the initiation of big brands, global challengers, improved investments and
development of role type of e-commerce companies. Similarly, the amount of online shoppers will fire up
significantly with moving up in physical arrangement facilities such as internet broadband connectivity, broader
acceptance of internet-ready policies and connected logistics services. On the whole, e-commerce jointly with
online retail establishes a small part of total sales in India, but is set to develop to a considerable volume. There is
vast capacity for future growth backed by the equilibrium of the e-commerce business surroundings and
significance establishment by various Venture Capitalists players including domestic & international, pooled with
backing from the Government of India. For a continuous improvement, operational viability and sustainability
will be imperative for the e-commerce players; this seems promising in a billion strong economies.
45
Reference:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10
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Rags Gopalan, SmithaSarmaRanganathan India Retail Trends 2014 whitepaper.

Prasad Bingi, Ali Mir, and Joseph Khamalah, The Challenges facing global E-Commerce, Department of
Management, Indiana-Purdue University, Fort Wayne, IN 46805
JiteshBijlan, Sangeeta Singh, Ecommerce in India accelerating growth PwC India
Rebirth of e-Commerce in India, 2011 E&Y 2015 Nishith Desai Associates, E-Commerce in India,
Legal, Tax and Regulatory Analysis, March
LiranEinav, Jonathan Levin, Igor Popov, and Neel Sundaresan, Growth, Adoption, and Use of Mobile ECommerce, Economic Review: Papers & Proceedings 2014, 104(5): 489494
Paresh Parekh, Deepak V, Krishna Kumar and Sudarshan Chaudhary, Rebirth of e-commerce in India,
Ernst and Young.
Ecommerce in India https://en.wikipedia.org/wiki/E-commerce_in_India
Dyanya and Thoppil, Alibaba to invest about $575 Million in India Online Shopping Service, Patym
Gartner Says India e-commerce Market to reach $6 Billion in 2015 Press release October 6 2014,
http://www.gartner.com/newsroom/id/2876517
Pritha Bose, Ecommerce in India worth $13.5 billion in India will cross $16 billion in 2015
Saptarish Dutta, EN ROUTE In three years, Jeff Bezos big bet on India will deliver the goods for
Amazon
James Crabtree, India ecommerce VC investment tops $1bn mark Oct 3 2014
India Post collects over Rs. 280 crore via Cash-on-Delivery courtesy Flipkart, Amazon, PTI Nov 30,
2014 http:/ /timesofindia.indiatimes.com/business/india-business/India-Post-collects-over-Rs-280-crorevia-cash-on-delivery-courtesy-Flipkart-Amazon/articleshow/45326530.cms
MaliniBhupta, India set to become world's fastest growing e-commerce market Feb 2015
Indian E-Commerce Growth Shakes Up Retail Industry in 2014, Indo-Asian News Service, and 25
December 2014
Catherin Shu, Indian E-commerce Logistics Startup Delivery Raises $85M Series D, May 6 2015
Jai Vardhan ,Paytm secures funding from Ratan Tata, plans to have 100M wallet users by year end
March 13 ,2015
Kerala government slaps Rs 54 crore fine on 4 online traders including Flipkart, Jabong, PTIJan 2015
46
MSMES IN ODISHA: GROWTH AND PROSPECTS

DR. S. K. BADATYA
Asst. Prof in Finance
PGCMS, SMIT, Berhampur. Odisha
Abstract
This paper is an attempt has been made to study the growth of MSME in Odisha during the study period from
2000-01 to 2013-14. Micro, Small and Medium Enterprises (MSMEs) play a significant role in the economic
growth of the country owing to their contribution to production, exports and employment. The sector contributes 8
per cent to the countrys GDP, 45 per cent to the manufactured output and 40 per cent to the countrys exports. It
provides employment to 60 million people through 28.5 million enterprises. They are the largest employment
provider in India next to agriculture. They are sometimes the only source of employment in poor regions and rural
areas and thus help in removing regional imbalances in the country. The Government of India passed Micro,
Small and Medium Enterprises Development (MSMED) Act in 2006 to facilitate the development of this sector
and also enhance their competitiveness.
The study is based on secondary data collected from the various magazine, journal, news papers and Odisha
Economic Survey, articles and some web-sites.. The indicator chosen for studying the growth of MSME through
the establishment of MSME, investment made and employment generated in Odisha during the study period. For
evaluation of the performance, the ratios, percentages have been computed by using data collected from the
secondary sources from annual reports of MSME.
Key Words: Growth of MSME, Employment generation, Sector-wise growth of MSME

1. Introduction:
Industrialization is viewed as a most suitable weapon for rapid economic growth of a nation. So, industrialization
has a major role in playing the economic development for underdevelopment economy. Small and Medium
Enterprises (SME) constitute the backbone of state economy. Those industrial units with a capital investment of
not more than Rs.5 crores are treated as small scale sector (SSI). Those sectors hold tremendous potential of
employment opportunities and economic growth due to their low capital base, gestation period, high value
addition and high export potential. The growth of SSI seems to be higher than large and medium scale industry in
recent years.
The small Scale industries occupies a prominent position in the Indian economy. It contributes around 45% of
manufacturing output, 40% of exports and employs more than 40 million people. Since, independence, the
government has formulated various policies and schemes to promote the growth and development of small scale
industries. The Micro, Small and Medium Enterprises (MSME) Act 2006 is a recent legislation that seeks to
facilitate the development of small enterprises and enhance their competitiveness. The Ministry of MSME is the
nodal ministry for implementation of this Act through various measures, including development of specific
schemes programmers for promotion and development of small enterprises.
Small scale industries may sound small but actually plays a very important part in the overall growth of an
economy. SSI can be characterized the unique feature of labor intensiveness. The total numbers of people
employed in these industries have been calculated to be near about one crore and nimiety lakhs in India, the main
proponents of Small Scale industries. The importance of this industry increases manifold due to the immense
employment generating potentials. The countries, which are characterized by acute unemployment problems
especially, put emphasis on the model of small scale industries. An industrial undertaking is defined as a smallscale unit if the investment in fixed assets in plant and machinery does not exceed Rs. 10 million. The Small Scale
units can get registered with the Directorate of Industries/District Industries Center in the state Government
concerned. The Directorate of Industry, Odisha is the nodal agency for promotion of MSMEs industries and plays
a very vital role in identification of entrepreneur and assessing them to set up industrial unit by end of 2007-08.,
there are about 97127 numbers of SSI set up in the state with an investment of Rs. 3120 crores providing
employment opportunities from 5.80 lakhs person.
Odisha, in spite of her vast natural resources, continuous to be the most backward states of the Indian union. The
state ranks fourth in the country. The state has not only forest resources but also other resources like mineral
marine and manpower. Truly speaking Odisha is the stone house of India though its population is about 4 per cent
of the nation; its contribution to the industrial production of the country is only 2 per cent. The economy backward
of Odisha is indicated by symptom like excessive dependents on agriculture leading to high incidence of rural
unemployments absence large urbanization, low industrial productivity, low level of infrastructural development,
47
high percentage of population lies below the poverty line etc. The per capita income of the people in Odisha is
very low as a result of which they are unable to provide capital for the industrial development of the state.
Micro, Small and Medium Enterprises (MSMEs) play a significant role in the economic growth of the country
owing to their contribution to production, exports and employment. The sector contributes 8 per cent to the
countrys GDP, 45 per cent to the manufactured output and 40 per cent to the countrys exports. It provides
employment to 60 million people through 28.5 million enterprises. Significantly, the MSME sector has maintained
a higher growth rate vis--vis the overall industrial sector during the past decade. According to a survey, exports
from these enterprises have been on the rise, despite increased cost of raw materials, sluggish global demand and
stiff international competition. Today, the sector produces a wide range of products, from simple consumer goods
to high-precision, sophisticated finished products. It has emerged as a major supplier of mass consumption goods
as well as a producer of electronic and electrical equipment and drugs and pharmaceuticals. An impetus to the
sector is likely to have a multiplier impact on economic growth.
According to the MSMED Act, MSMEs are defined on the basis of their investment in plant and machinery and
equipment for enterprise rendering services.
Table No-01
Classification of Enterprises:
Classification
Micro
Manufacturing Enterprises
Rs. 2.5 Million/ Rs.25 lakhs
(US$ 50,000)
Small
Rs. 50 Million/ Rs. 5 Crore
(US$ 1 million)
Medium
Rs. 100 Million/Rs.10 Crore
(US$ 2 million)
Sources: Annual Report of Ministry of MSME, 2010-11.
Service Enterprises
Rs. 1 Million/Rs.10 lkhs
(US$ 20,000)
Rs. 20 Million/Rs 2 Crore
(US$ 0.4 million)
Rs.50 Million/Rs 5 Crore
(US$ 1 million)
2. Objective of the Study:

The main objective of the present study is as follows:
1. To analyze the growth and development of MSME in Odisha during the study period.
2. To analyze the growth of investment in Odisha during study period.
3. To analyze the potentiality of employment in MSME in Odisha during study period.
3. Limitation of the Study:

The main objective of the study is to highlight the growth of SSI sector in Odisha after globalization. For
the purpose of the study only secondary data are taken from Journal, newspapers, magazine etc. So the limitation
of secondary data is found in the study. After globalization, how the SSI sector grow significantly are given due
importance in the various tables, ratios, percentage are taken to make the study more clearly. Due to short span of
time I have taken only 14 years as the study period from 2000-01 periods 2013-14. So it has its own limitations.
For evaluation of performance, the ratios, percentage have been computed by using the data available in various
sources
4. Methodology of the Study:

The study is based on secondary data collected from the various magazine, journal, news papers and Odisha
Economic Survey, articles and some web-sites. The period of study covers from 2000-01 to 2013-14. The
indicators selected for the studying are growth of MSME, growth of investment and employment potentiality of
MSME during the study period. For analysis and evaluate the objective of the present study, the statistical tools
and techniques like coefficient of correlation, mean, ratios, percentages have been computed by using data
collected from the secondary sources.
5. Micro, Small and Medium Enterprises (MSMEs):

Small and medium scale enterprises grouped together are called Micro, Small and Medium Enterprises (MSME).
The Directorate of Industries, Odisha is the nodal agency for promoting MSME, ancillary and downstream
industries in the State. The growth of the MSME sub-sector is being emphasized not only because of its potential
for generation of employment opportunities but also for its contribution to industrial output in the State. This subsector is the second largest employment generating sector after agriculture. During 2013-14, Sundargarh district
reported the maximum number of industries followed by Khurda, Cuttack and Ganjam districts which reveals that
the maximum numbers of MSME belong to the repairing and services sub sector (33.1 Percent). In manufacturing,
it is the food and allied sectors that have the highest number of MSMEs (21.9 Percen31t) and investment (26.53
Percent). In employment generation, it is the second highest employme31nt generating sub-sector (20.14 Percent),
48
6. Analysis and Discussion:

The growth of small-sector sector is being emphasized not only for the potentialities of employment generation
but also for its contribution to the out-put of the state. The government of India has enacted Micro, Small,
Medium and Enterprises (MSME) Act 2006 for development of this sector. The year wise growth of SSI/MSME
sector, investment made and employment generated since 2000-2001 to 2013-14 is explained in the table no-02
Table No-02
The year wise growth of SSI/MSMEs sector, investment made and employment generated since 2000-2001 to
2013-14 is illustrated in the table no-02
Year
SSI/MSME
Annual
SSI/MSME Set up Invest
% growth
Employ
% Growth
Set up during Growth
(Unit
wise) ment
of Invest
ment Gene
of Employ
the year
( in %)
Cummulative
Made
ment
ration
ment
(In Cr)
(In Person)
2000-01
3676
--66206
153.18
---18115
--2001-02
3919
6.61
70125
165.23
7.86
16582
-8.46
2002-03
4008
2.27
74133
155.14
-6.11
16320
-1.58
2003-04
4435
10.65
78568
170.13
9.66
20574
26.07
2004-05
4507
1.62
83075
245.50
44.35
21898
06.43
2005-06
4786
6.19
87861
270.44
10.19
25142
14.81
2006-07
4556
-4.81
92417
271.14
0.26
20839
-17.11
2007-08
4710
3.38
97127
295.51
8.99
23301
11.81
2008-09
4806
2.03
101933
227.92
-22.87
20996
-09.89
2009-10
4907
2.10
106840
292.34
28.26
23195
10.47
2010-11
5016
2.22
111856
395.02
35.12
24451
05.41
2011-12
5505
9.74
117361
500.73
26.76
30387
24.27
2012-13
5931
7.74
123292
432.90
-13.55
27104
-10.80
2013-14
7009
18.17
130301
669.41
54.63
32136
18.56
Source: Economic Survey Odisha2014-15, Directorate of Economics and Statistics, BBSR
6.1. Growth of SSI/MSME:

The table no-02 shows us the details of the SSI/MSME established and investment made for the period from
2000-01 to 2013-14 in Odisha. During 2013-14, 7009 MSME went into production with an investment of
Rs.669.41 crores and 32,136 persons were provided employment opportunities. It is encouraging to note that the
number of MSME units and total investments therein, have been increasing over the years, as may be seen from
table no -02. It is encouraging to note that the number of SSI units have been increasing over the year. The table
shows us that, the total no of SSI increased from 66206 to 130301 from the year 2000-01 to 2013-14 which is
more than 96.81 per cent growth. It has been seen that except the year 2006-07 the growth of SSI is positive
during the study period. The maximum growth of SSI established in the year 2013-14 i.e 18.17% which fallowed
by 10.65 % in 2003-04.
6.2. Investment in SSI/MSME:

The investment made for establishment of SSI/MSME is in increasing trend and positive during the study period
except the three year 2003-04,2008-09 & 2012-13 is negative is -6.11 , -22.87,13.55 respectively. The investment
was made only Rs. 153.18 cr in 2001 but it has grown to level of Rs. 669.41 cr in 2013-14., The maximum
amount invested in this sector in the year 2013-14 is of Rs.669.41 crores from 432.90 crores from previous year
which is more than 54.63 Per cent. It signifies that the growth rate of investment is 337 % in the year 2013-14
from the year 2000-01. Expect the year 2012-13 in last four year, the investment made in this sector is satisfactory
and it is more than 24% from previous year of 2011-12.
6.3. Employment Generation:

The growth of MSMEs can also be measured by employment generation potentiality. It has been seen from the
table no 01 that out of 14 years study period, only 5 years is negative growth i.e less people are employed then
previous year. In the year 2011-12 the maximum people employed (i.e. 32136) in this sector during the study
period. All round growth has been made in employment, investment and growth in set up during the year 2013-14.
Thus the overall percentage employment is growing along the years with a few exceptions during the study
period. It is observed that the employment generation of the MSME is satisfactory and is improving in recent
years.
49
It is obvious from the above table no-2, that the number of small scale industries during the period of 2000-01
was 3676 units, investment and employment during the same period 153.18crores and 18115 respectively.
However, the total units of 7009 were established in the year 2013-14. The employment and investment has gone
up to 32136 and 669.41 crores respectively during the same period. The total units have increased from 3676 to
7009units during the study which could shows 190.66% more in over the 14 years. The employment also
increased from 18115 to 32136 which marked 177.40% more in employment.
Table no-3
Calculation of coefficient of Correlation
Year
Total
X-Mean
Employment
Y-Mean
Units(X)
x
X2
(In Thous.)
y
y2
xy
(In Thous)
Y
2000-01
3.68
-1.16
1.35
18.12
-4.81
23.41
5.58
2001-02
3.92
-0.92
0.85
16.58
-6.35
40.32
5.84
2002-03
4.01
-0.83
0.69
16.32
-6.61
43.69
5.49
2003-04
4.44
-0..04
0.16
20.57
-2.36
5.57
0.10
2004-05
4.51
-0.33
0.11
21.90
-1.03
1.06
0.34
2005-06
4.79
-0.05
-25.14
2.21
4.88
-0.11
2006-07
4.56
-0.28
0.08
20.84
-2.09
4.37
0.58
2007-08
4.71
-0.13
0.02
23.30
0.37
0.14
-0.05
2008-09
4.81
-0.03
-21.00
-1.93
3.72
0.06
2009-10
4.91
0.07
-23.20
0.27
0.07
0.02
2010-11
5.02
0.18
0.30
24.45
1.52
2.31
0.27
2011-12
5.51
0.67
0.45
30.39
7.46
55.65
5.00
2012-13
5.93
1.09
1.19
27.10
4.17
17.39
4.55
2013-14
7.01
2.17
4.71
32.14
9.21
84.82
19.99
Total
67.81
---9.01
321.05
--287.13
47.66
Mean(X) = X N = 67.81 14 = 4.84
Mean(Y) = Y N = 321.05 14 = 22.93
r = xy (x2y2 )= 47.66 (9.01287.13) = 47.66 2587.04 = 47.66 50.86 = (+) 0.92
There is close relationship between total units, investment and employment which an ingredient of national
economic development. Whenever there is increase in total units that is reflected on investment and employment
also. To measure the quantum of correlation, the following calculation of correlation co-efficient is required.
Therefore, the calculated value of the co-efficient of correlation(r) is (+) 0.92 and further the value signifies that
there is a highly positive correlation in between the number of units and employment. It can interpret in such a
way that whenever increases in total units, it can also lead to increase in employment too which can facilitate the
development of Indian economy.
7. District-Wise Break-up of MSMEs:

The District wise growth and development of MSME units in the state
illustrated in the table no-04.
Table No-04
District-Wise growth of MSME during the year 2013-14.
Districts
No. of MSME Units Investment (Rs. In
Set-up
Crores)
Bargarh
191
51.58
Jharsuguda
133
15.07
Sambalpur
201
21.07
Deogarh
38
1.52
Sundergarh
720
84.53
Keonjhar
281
10.99
Mayurbhan
333
15.80
Balasore
Bhadrak
Kendrapara
Jagatsinghpur
Cuttack
Jajpur
Dhenkanal
423
264
160
158
474
409
249
20.31
17.73
13.91
14.34
71.97
26.13
22.53
50
of Odisha during the period 2013-14 is
Employment
Generated
931
576
715
197
3710
1093
1328
Employment
Women
98
13
133
9
246
113
179
1635
1021
702
1005
2371
1844
1122
204
10
88
194
330
46
0
of
Angul
Nayagarh
Khordha
Puri
Ganjam
Gajapati
Kandhamal
Baudh
Sonepur
Bolangir
Nuapada
Kalahandi
Rayagada
Nabarangpur
270
126
521
290
457
80
121
35
69
293
46
194
165
82
11.97
07.98
116.00
11.94
17.25
2.15
4.05
3.88
1.75
32.94
3.55
30.60
5.31
13.29
949
565
2711
1368
1626
224
373
148
267
1350
192
1010
499
657
157
68
383
300
287
59
23
6
7
4
23
80
27
216
Koraput
195
17.79
1805
1022
Malkangiri
31
1.48
142
0
Total
7009
669.41
32136
4325
of
Thetable no-04 shows us the data relating to growth and development of MSME in district wise during the period
2000-01 to 2013-14 in Odisha. During 2013-14, 7009 MSME went into production with an investment of
Rs.669.41 crores and 32,136 persons were provided employment opportunities. It is encouraging to note that the
number of MSME units and total investments therein, have been increasing over the years, as may be seen from
table no-04, lists the data on these entities as well as employment generated by them. As above table shows,
during 2013-14, Sundargarh district reported the maximum number of industries followed by Khurda, Cuttack and
Ganjam where as Malkangiri district is the lowest in the establishment of MSME i.e only 31. Regarding womens
employment Koraput districts occupy more than 50% of total employment and followed by Puri.
8. TheSector-wise Growth of MSME Units in Odisha:

The sector-wise growth of MSME units in the state of Odisha which have been illustrated in the table no-05 by
the end of 2013-14.
Table No-05
Sector-wise MSME Units in Odisha by the end of 2013-14
Category
No. of Units
Share
in Investment (Rs.In Employment
Set-up
Percentage
Crores)
Generated
Food & Allied
27284
21.88
1557.86
147543
Chemical & Allied
3038
02.48
259.67
23684
Electrical & Electronics
1204
0.98
72.31
7655
Engineering & Metal Based
13887
11.01
1021.99
101281
Forest & Wood based
7572
05.99
99.79
46749
Glass & Ceramics
9257
07.28
660.15
143320
Livestock & Leather
465
0.38
07.89
2605
Paper & Paper Products
3187
02.54
140.16
17537
Rubber & Plastics
1858
01.53
238.78
11570
Textiles
9162
07.33
200.45
53411
Misc. Manufacturing
6946
05.50
219.59
33310
Repairing & Services
46441
33.10
1160.36
149813
Total
130301
100.00
5639.00
738478
It is reveals from the table no-05 that the maximum numbers of MSME belong to the repairing and services sub
sector (33.1 Percent). In manufacturing, it is the food and allied sectors that have the highest number of MSMEs
(21.9 Percent) and investment (26.53 Percent). In employment generation, it is the second highest employment
generating sub-sector (20.14 Percent), followed by the glass and ceramics sub-sector (20.10%). Industrial sickness
among MSMEs remains a major problem. There were 1,690 units identified as sick by the end of 2009-10.
However, it is encouraging to note that no new 667 units have been revived by Odisha State Financial
Corporation.
51
9. Suggestions:
Most of the schemes are related to investment subsidy/ reimbursement of expenses. Some new scheme should be
drafted and also linked with performance in terms of the turnover domestic as well export, energy conservations,
employment, new innovation etc, So that it helps in growing organizational units.
. There is a need to establish a facilitating agency in order to implement the government schemes.
MSMEs should be provided with free circulars or newsletters giving details of various schemes undertaken by
the government, as well as details of procedure to be followed.
Easy Finance should be made available to the entrepreneur by financial institutions.
Schemes for Startups need to be designed and manufacturers associations should be
consulted while
formulating these schemes.
Proper and a direct channel should be established between the Government bodies and entrepreneurs in order to
spread awareness on promotional schemes.
. Supply of raw materials to MSMEs units at concessional rate by Govt.
. Some items should be reserved for production MSMEs units.
. Proper education and training should be provided to increase efficiency of employees.
10. Conclusion:
From the analysis, it is found that Odisha industry structure has hardly shown any improvement as compared to
other states. In most cases, the presence of highly capital intensive industries with cost disadvantages in fuel,
interest payment, depression has resulted in heavy losses. Moreover, the privileges low wages in many industries
causes low productivity of labor. The persistently disadvantages position of the state raises basic questions of
neglects and misdirected policy of the center as well as states. Firstly, Lack of proper infrastructure especially,
transport and power has severely impaired both growth and diversification of industry in the state. So a serious
thinking on the issue of greater use of power for the states industrialization rather than more selling it is essential.
In order activate industry sector, development of railway and civil aviations is very much essential. Secondly, to
generate income in the rural sector and promote a viable industrial base, larger investment in agriculture
development need to be made. Thirdly, further industrial development a dynamic small enterprise promotion
policy for the state is needed. Fourthly, the state is endowed with arrange of high grade minerals but these are not
exploited properly. Mining activities should be upgraded to the status of manufacturing industries where in
mineral processing up to certain states could be undertaken in the region. Fifthly, modern agro and forest-based
industries need to be encouraged in the state. Final preference should be given to the new areas of industrial
activities with special employers on location is undeveloped district.
It has been seen from the table no-02 that the backward districts Malkangiri, Sonepur, Boudh, Deogarh, Gajapati
etc. are in backward in establishment of MSME units due to lack of infrastructure facilities, communication, Govt.
support and unawareness of localities. The coastal districts like Ganjam,Puri, Khurda, Balasore, Bhadark are
always leading in establishment of SSI units due to development of infrastructure facilities, communication, Govt.
support and awareness for establishing SSI units in backward districts of Odisha by proper utilizing the resources
in rural areas and which will create more employment opportunities. The present study revealed that there is a
continuous growth of number of MSME units. The growth story of these sectors enhances production,
employment and exports of the state as well as in our country. According to Economic Survey of Odisha, 201112, the anticipated growth rate of Odisha is estimated at 7.18% as against all India anticipated growth of 6.9% in
2011-12.
The future will see the growth of MSMEs and SMEs as a result of the growing economy. If these small fledging
businesses need to survive alongside the big giants they will need to retain their key people and ensure that they
are shown a clear vision, goal and career prospect in order to keep contributing to the organization for a long time.
Entrepreneurship development is considered as a key factor to fight against unemployment, poverty and achieve
overall socio-economic growth in our state. Last but not the least, growth rate of MSMEs is very good and healthy
sign towards progress and prosperity of Odisha.
52
References
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
Nayak, Dr. SudhansuSekhar, (2006) Industrial Problems and its Solution in Orissa, Yojana(O), Issue-1,
PP.15.
Panda, Akhaya.,Swain.K, Anil. K.,(Dec2012), MSME Sector in India: A WayForward to Sustainability
and Inclusive Growth, The Orissa Journal of Commerce,Vol.33, No.1&2,.PP. 58-63.
Sahoo,(Dr) Rashmita, (Sept 2012), MSME In Odisha: Overview , Odisha Review,PP.19-22.
Singh, N.Tejamani, (2009),Small Scale Industries: A Boom of EconomicDevelopment(A Satisfied
Prospective),The Orissa Journal of Commerce,Vol.30, No-1, PP.1-8.
Das, (Dr.)Suratha Kumar, (Feb-Mar2014),Growth and Prospect of MSME in Odisha: An Analytical
Approach, Odisha Review, , 101-110.
Kulkarni, P R (2008), A New Deal for Small and Medium Enterprises in India, TheICFAI.
Katia Vikas, (August, 2014) ,MSMEs in india: Growth and Challenges Journal of Radix
International Educational and Research Consortium, Volume 3, Issue 8.
Kannan. A.S and Dr. S. Sudalaimuthu,(October,2014), Indian MSMES: Initiativesand Financing
Trends International Journal of Management (IJM),Volume 5, Issue 10, pp. 58-70
Dash, M, Sahu.D.,(July2009). Knowledge Management and ICT in SMEs forSustainable Economic
Development, Orissa Journal of Commerce, Vol.30, Issue.2, pp.81- 91.
Economic Survey of Orissa 2013-14, 2012-13 etc., Directorate of Economics andStatistics,
Bhubaneswar.
Annual Report of MSME,( 2013-14). Government of India, Ministry of MSMEs,UdyogBhavan, New
Delhi.
53
A STUDY ON ECONOMIC VALUE ADDED (EVA) AN EFFECTIVE MEASURE OF

PROFITABILITY: COMPLEXITIES AND CHALLENGES IN ITS USE.
MR. PARSHURAM MISHRA,
Asst. Prof Finance, Srusti Academy of Management,
E-Mail pm.mbafinance@gmail.com,
Mobile No.:9237135088
Abstract:
Shareholders value creation and maximization has become an increasingly challenging task for corporate. The
importance of shareholder value for financial strategy and management is well recognized. At the same time there
has been a growing concern that the traditional accounting measures of performance have serious inherent
limitations that may lead to poor financial decision making. Economic value added (EVA), which is currently
regarded as an important indicators of shareholder value and financial performance has emerged recently as one
of the best instrument in this regard.
The present study finds issues around the concepts of economic value added (EVA) as indicators of shareholder
value and financial performance. It presents empirical research data from different sources which have proved
the effectiveness of EVA as an indicator of shareholders value and financial performance. The second part of the
study focuses on method of computation of EVA and various complexities and challenges involved in it.
The study is conducted exploring various issues and importance of EVA. The data for the study is collected mostly
from different secondary sources. An analytical attempt is made to provide an insight to an entrepreneur to use
EVA as a measure of performance analysis.
Key Words: Economic value added, Share holders value, Profitability

1.1: Introduction:
Shareholders value creation and maximization has become an increasingly challenging task for corporate. The
importance of shareholder value for financial strategy and management is well recognized. At the same time there
has been a growing concern that the traditional accounting measures of performance have serious inherent
limitations that may lead to poor financial decision making. Economic value added (EVA), which is currently
regarded as an important indicators of shareholder value and financial performance has emerged recently as one of
the best instrument in this regard.
1.2: Literatue review:

Stewart (1990, P.137): EVA measures whether the operating profit is enough compared to the total costs of capital
employed. Stewart defined EVA as Net operating profit after taxes (NOPAT) subtracted with a capital charge.
Dr. R. Satish & M.D. Rajkumar(2011): The concept of EVA can hold its grounds in a sustainable manner
especially in the context of Indian environment if the concept is accepted among shareholders , employees,
owners, management etc.
Pro. Angela Skubovius, Prof. S.C. Mavrinac and Prof. H. Fiorillo (1998) EVA is a particularly useful tool for
divisionalized companies which often have a difficult time estimating the profitability of individual business.
EsaMakelainen (1998): With implementation it is important to understand the EVA-concept thoroughly and tailor
the concept to the unique situation of each company or business unit. EVA is at its best as an overall measure and
organizational approach with strong link to payroll of managers and other employees.
Wallace (1997): One of EVA's most powerful features is its suitability to management bonus systems. This have
been empirically proofed to be good way to increase shareholder value
Dr A.K. Sharma & Satish Kumar (2010): More and more companies in India should disclose EVA figures in their
financial statements as it is a reliable predicator of firms performance.
1.3: Objective
The present study finds issues around the concepts of economic value added (EVA) as indicators of shareholder
value and financial performance. It presents empirical research data from different sources which have proved the
effectiveness of EVA as an indicator of shareholders value and financial performance. The second part of the
study focuses on method of computation of EVA and various complexities and challenges involved in it.
54
1.4: Methodology
The study is conducted exploring various issues and importance of EVA. The data for the study is collected
mostly from different secondary sources. An analytical attempt is made to provide an insight to an entrepreneur to
use EVA as a measure of performance analysis.
1.5: Concepts of economic value added (EVA)

Corporate performance measurement is one of the emerging areas of research in finance among the researchers all
over the world. Corporate performance measurement systems were developed as a tool of monitoring and
maintaining control, which is the process of ensuring that company aims at strategies that lead to the achievement
of its overall objectives. Improperly selected performance measures communicate wrong signals to the managers
leading to poor decisions and undesirable results for various stakeholders.
Various traditional accounting methods of corporate performance evaluations like net operating profit after tax
(NOPAT), return on equity(ROI), return on capital employed(ROCE), Earnings per share(EPS), Dividend per
share Etc. uses different parameters such as earnings , market capitalization, discounting cash flows etc. have been
criticixed due to their inability to incorporate full cost of capital. extensive equity research has now established
that it is not earnings per se. but value that is important.( annual report, HUL,2009).According to
Rappaport(1986), within business, there are seven drivers like sales growth rate, operating profit margin , income
tax rate , working capital investment , fixed capital investment , cost of capital and forecast duration; that can be
managed to create value. The theory suggests that improvement in these value drivers leads to an increase in
shareholders value. An effective value based performance measures considers all the above seven value drivers
and summarises them into a single measure.one such innovation in the field of internal and external performance
measurement is economic value added(EVA). EVA is calculated by deducting the total cost of capital from
economic profit . this concept was developed and popularized by newyork based management consultancy firm
stern stewart& co. in 1991
Some of the leading corporates in india and abroad who started disclosing EVA statements are: Coca Cola, AT
&T, CSX, HUL, GCPL, Dr. Reddys, BHEL, Dabur, Hero Honda, Pidilite, Infosys etc.
EVA is a particularly useful tool for divisionalized companies which often have a difficult time estimating the
profitability of individual business. (A. Skubovius, S. C. Mavrinac and. H. Fiorillo, 1998). EVA becomes handy in
divisionalized companies because it encourages managers to continually assess and maximize the use of divisional
assets. EVA can also be a useful vehicle for individual performance measurement and motivation. Any incentive
scheme which encourages managers to maximize their EVA will enhance the probability that managers are
working in the best interest of shareholders.
1.6: How does an EVA Increases shareholder value:

Eva analyses can be used not only to assess the performance of the organization or individual but also to identify
opportunities for performance improvement. There are four general ways to increase EVA Performace:
1. Increase profitability by increasing sales or by minimizing variable costs
2. Improve operating efficiency and use of assets
3. Rationalize and eliminate unrewarding business
4. Reduce the cost of capital
1.7: Data analysis to show Effectiveness of EVA as an indicator of shareholders value and
financial performance
Table-1: EVA OF SAMPLE BANKS
S.No
Banks
2008-09
1
Allahabad Bank
713
2
Andhra Bank
607
3
Bank of Baroda
2369
4
Bank of India
2966
5
BOM
382
6
CAN
2133
7
CBI
351
8
CORP
915
9
DENA
389
10
IB
1156
11
IOB
1312
12
IDBI
837
13
OBC
924
2007-08
-178
-221
-1016
-152
109
-1153
-743
-168
7.8
17
253
-97
-510
55
2006--07
-191
-192
-864
35
61
-1133
-206
-66
276
-3
-697
2005-06
-55
-153
-943
-170
-135
-330
-200
-161
232
175
-594
2004-05
130
266
-536
-91
-28
158
23
-75
250
75
78
2003-04
259
305
-115
598
NA
320
134
-137
250
146
91
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
PNB
3219
-257
-279
-118
204
349
SBBJ
434
SBI
9757
-2446
-865
58
1472
1391
SBT
374
SBM
643
SYND
905
-45
-6
-31
-24
94
UCO
464
66
25
-45
38
211
UBI
1775
210
91
38
312
317
VJYA
102
-127
-10
-144
133
226
AXIS
1949
-103
296
228
124
218
BOR
89
-109
15
-53
-7
34
CUB
130
-21
2
2
8
29
DCB
-94
DHA
53
5
3
-1
-30
FED
502
-557
-13
-3
-3
66
HDFC
2524
-334
267
183
318
420
ICICI
4211
-2474
449
586
1782
1682
IND
124
-144
-87
88
-75
160
INGVY
215
-24
-17
-66
-74
-56
JKB
432
-89
-78
-109
-117
201
KAR
238
-295
-289
-217
4
22
KVB
245
-35
-32
-2
21
64
KOTAK
230
-125
-18
53
41
40
LVB
52
-62
-60
-31
-24
26
SIB
180
-128
-59
-88
-67
43
YES
300
70
25
15
SOURCE: AMJR-JAN-11
TABLE-2: SECTOR WISE AGGREGATE EVA
YEAR
PUBLIC SECTOR
PRIVATE SECTOR
2008-09
1501
690
2007-08
1174
583
2006-07
868
422
2005-06
720
328
2004-05
662
259
2003-04
681
312
SECTOR WISE STATISTICAL ANALYSIS
MEAN
767
359
STANDARD DEVIATION
1061
738
CO EFFICIENT OF STANDARD 1.38
2.05
DEVIATION
1125721
544644
TABLE-3: EMPLOYEE PRODUCTIVITY
ALL BANKS
PUBLIC SECTOR
PRIVATE SECTOR
2003-04
2008-09
2003-04
2008-09
2003-04
2008-09
NO. of employee
823065
908730
741480
734661
81585
174069
Business
per 335.63
744.86
308.92
744.93
578.48
744.27
employee(lakh)
Profit
per 2.24
5.01
2.07
4.72
3.82
6.16
employee(lakh)
Interpretation of the Table: Table -1 brings out the bank wise EVA. The Above table shows that public sector
banks EVA performance is better than private sector bank.
Table -2 along with the statistical data substantiate the above fact. But in table -3 It is found that initially
productivity of public sector employees were less in comparison to private sector employees whereas in 2008-09,
it is found that the public sector bank employees productivity has become more competitive than the private
sector banks thereby per employee business addition in lakhs came out to be744.93 in comparison to 744.27 of
56
private sector banks. But the profitability per employee is more in private sector employees, .may be this is
because of higher amount of charges and penalties and other fees charged by private sector banks.
Table-4: Comparison of EVA with ROCE, ROE, EPS of Dr. Reddys Laboratories Ltd.
Year
EVA
EVACE
ROE
ROCE
EPS
2001-02
945
4.48
29.23
42.06
59.56
2002-03
2699
34.81
24.02
26.44
50.6
2003-04
1307
13.85
14.70
15.61
36.37
2004-05
80
0.75
2.77
2.19
7.85
2005-06
-2400
-22.88
8.57
9.24
26.82
2006-07
-1229
-11.02
35.47
35.94
69.45
2007-08
2570
8.14
10.35
12.01
27.62
2008-09
-1367
4.27
11.14
13.55
32.25
SOURCE: Capitaline
Interpretation: From the above table it is found that all the traditional ratios like ROCE, ROE and EPS are
showing positive results all through the years reflecting a positive notion in the minds of the investor about its
profitability and shareholders wealth but when the EVA AND EVACE were considered it was found that three
years out of ten years the result is negative.
1.8: Methods of Computation of EVA and Various Complexities and Challenges involved
in it:
The concept of EVA was introduced in 1991 by Stern Stewart and co, a new york based consultancy firm. In an in
house research conducted by Stewart provided evidences about superiority of EVA in reflection of market value
of company. According to him EVA measures the profitability of the company after taking into consideration the
overall cost of capital.
EVA is calculated by using following
1.9: Conclusion
With implementation it is important to understand the EVA-concept thoroughly and tailor the concept to the
unique situation of each company or business unit. EVA is at its best as an overall measure and organizational
approach with strong link to payroll of managers and other employees. That kind utilization cannot succeed
without deep understanding and commitment achieved with proper training. Substantial shareholder value
increases and true success stories arise always from outstanding strategy, quick response, great ideas and good
predicting of future.
EVA helps in quantitative assessing of different strategies but that is all. Wealth does not arise from EVA alone.
EVA only measures changes of wealth. It is also as short-term as all other periodic performance measures.
Therefore all companies should rely also on other performance measures. Especially important this is e.g. for new
growth phase companies. However we have to bear in mind that the success or failure of any given company is
measured ultimately as created shareholder value. Therefore EVA is important measure also for those companies
that use primarily other tools in assessing the achievement of their strategic goals.
References:
1.
2.
3.
4.
5.
Dr. R. Satish and m. Daniel Rajkumar, (1991) Value creation in Indian banking industry: An analysis,
AMJR Journal, Jan-Jun, 2011
Anil K. Sharma and Satish Kumar, (2010), Effectiveness of economic value added (EVA) and
conventional performance measures Evidences from India, IIMS Journal of Management Science,Vol1, Jan Jun, 2010
Angela Skubovius and Mavrinac and Henry Fiorillo,(1998): EVA at Adult foods Ltd., Journal of
Richard Ivey School of Business.
R. Satish and Dr. S. S. Rao,( 2009) A study on awareness and adaptability of economic value added
concept in Indian Banking Sector, Journal of contemporary research in management, July September.
Stern Stewart & Co. [1997], The Stern Stewart Performance 1000: Introduction and Documentation,
Stern Stewart Management Services Inc.
57
ANALYSIS OF LIQUIDITY OF SELECTED FMCG COMPANIES IN INDIA

RANJIT KUMAR PASWAN
Assistant Professor of Commerce
Asansol Girls College, Asansol, Burdwan, WB
Email- ranjit.paswan@yahoo.co.in
Abstract
FMCG companies have played an important role in the development of countrys economy as well as the society
over a number of years. It is of great importance that today we need such goods for our daily use. It is growing
day by day not only in the urban areas but also in the rural areas. They satisfy the needs of variety of customer.
The aim of the paper is to ascertain the liquidity position of the selected FMCG companies operating in India.
Keywords: FMCG Companies, Liquidity, Efficiency, Performance

Introduction
Liquidity refers to the ability of the firm to meet its current obligations. In other words liquidity is defined as the
ability to realize value in money, the most liquid of assets. It refers to the ability to pay in cash, the obligation that
are due. Liquidity is pre-requisite for the very survival of a firm. It is very much essential for a firm to be able to
meet its obligation as they become due. Short term creditors of the firm are primarily interested in the liquidity
ratios of the firm, as they want to know how promptly or readily the firm can meet its current liabilities. Liquidity
ratios measure the ability of the firm to meet its current obligations. Therefore, it is very much important for a
firm to know how the firm manages it cash and fund flow statement. It establishes the relationship between cash
and current assets to current liabilities, to provide the measure of liquidity. The failure of a company to meet its
current obligation due to lack of sufficient liquidity, will result in a poor creditworthiness, loss of confidence
among creditors. As the creditor, probable investors, debenture holders and other outside parties get interested to
know the fate of their investments in the firm. For this purpose they try to assess the loan repayment capacity of
the firm with the help of ratio analysis.
Liquidity or solvency position of a firm may be analyzed on the basis of time frame i.e. short term liquidity or
solvency and long-term liquidity or solvency. Short term solvency ratios are used to judge the capacity of the firm
of repaying the debts of short-term creditor and trade payables. Short term solvency ratios are often identified by
the term liquidity ratios. The liquidity position of a firm is largely affected by the composition of current assets.
Therefore, it is necessary to make proper balance between current assets and current liabilities. The present study
aims at analyzing the short-term solvency position of selected FMCG companies.
Objective of the study

The main objective of the paper is to analyze the managerial efficiency in relation to maintenance of liquidity
position of selected FMCG companies. In addition, it also aims at understanding the trend of performance during
the period of study.
Methodology and Data Collection

The study has been conducted for a period of five years from 2007-08 to 2011-12. For the purpose of the study
fiuve FMCG companies namely Britannia Industries Limited, ITC Limited, Dabur India Limited, Hindustan
Unilever Limited and Nestle India Limited have been selected. The data was collected from the annual reports and
accounts of the selected companies. Various accounting ratios like Current Ratio, Liquid Ratio, Debtors
Turnover, and Creditors Turnover have been used. For analyzing the data statistical tools like average and
ANOVA test have been applied.
Formulation of Hypotheses
4.1 Hypothesis 1
H0: There is no significant difference in Current Ratio of selected FMCG companies
H1: There is significant difference in Current Ration of selected FMCG companies
4.2 Hypothesis 2
H0: There is no significant difference in Liquid Ratio of selected FMCG companies
H1: There is significant difference in Liquid Ration of selected FMCG companies
4.3 Hypothesis 3
H0: There is no significant difference in Debtors Turnover Ratio of selected FMCG companies
H1: There is significant difference in Debtors Turnover Ration of selected FMCG companies
58
4.4 Hypothesis 4
H0: There is no significant difference in Creditors Turnover Ratio of selected FMCG companies
H1: There is significant difference in Creditors Turnover Ration of selected FMCG companies
Analysis and Findings

5.1 Table 1
Current Ratio (CR) of Selected FMCG Companies for the period of 2007-08 to 2011-12
C
u
r
r
e
n
t
R
a
t
i
o
Company
N e s t l e D a b u r I T C Britanni a H U L
Year
2 0 0 7 - 0 8 0 . 6 6 5 9 8 1 0.948818 1.583663 1.589081 0.641247
2008-09
0.673967
1.117873
1.734557
1.435685
0.968386
2009-10
0.602195
1.052502
1.009795
1.073141
0.797207
2010-11
0.626473
1.512513
1.18933
1.544623
0.823691
2011-12
0.602339
1.513449
1.586886
0.876151
1.209332
A v e r a g e 0 . 6 3 4 1 9 1 1.229031 1.420846 1.303736 0.887973

Source: Annual Reports and Accounts
Current Ratio is used to measure short-term liquidity and satisfactory debt repayment capacity of the firm. A
comparatively higher current ratio indicates a good liquidity. In this study the average current ratio of all the
selected companies is below the standard norm of 2:1, though ITC (1.42) among them is at the better position
followed by Britannia (1.30).
5.2 Table 2
LiquidityRatio (LR) of Selected FMCG Companies for the period of 2007-08 to 2011-12
L
i
q
u
i
d
R
a
t
i
o
Company
Year
2 0 0 7 - 0 8 0.247077 0.603591 0.669799 0.726849 0.260312
2 0 0 8 - 0 9
0.306842
0.725198
0.756936
0.82542
0.533521
2 0 0 9 - 1 0
0.251669
0.710317
0.444628
0.523886
0.473449
2 0 1 0 - 1 1
0.282987
1.013953
0.574164
0.920815
0.443783
2 0 1 1 - 1 2
0.255028
1.02286
0.967469
0.485775
0.819075
A v e r a g e 0.268721 0.815184 0.682599 0.696549 0.506028

Liquid Ratio is used for measuring short term liquidity or solvency. Liquid ratio is useful to verify the trend
indicated by the current ratio. The authentication of decision taken on the basis of current ratio can be verified
through quick ratio. The study shows that Dabur India Ltd has favorable condition in terms of liquid ratio as its
average liquid ratio is 0.81 which is nearest to the ideal norm of 1:1. Nestle India ltd. has very low average liquid
ratio, which shows inefficiency in maintaining liquidity position.
5.3 Table 3
Debtors Turnover Ratio (DTR) of Selected FMCG Companies for the period of 2007-08 to 2011-12
D e b t o r s
T u r n o v e r
R a t i o
Company
Year
2 0 0 7 - 0 8 64.15873 25.81168 2 0 . 3 0 7 7 69.00107 30.94899
2008-09
87.28785
22.51818
21.89543
64.88502
41.29422
2009-10
93.45668
23.52883
23.78033
76.35874
29.00139
2010-11
98.14436
19.70691
23.97655
86.79595
24.02912
2011-12
83.83682
17.62337
26.19128
90.43949
27.26713
A v e r a g e 85.37689 21.83779
23.23026
77.49605
30.50817
59
Debtors Turnover ratio is also used to measure short term liquidity position of a firm. A high DTR indicates
quick collection from debtors whereas a low DTR reveals long-credit period. During the period of the study it was
observed that average DTR of Nestle India is 85.37 followed by Britannia (77.49), that shows a quick recycling
of working capital in both the companies.
5.4 Table 4
Creditors Turnover Ratio (CTR) of Selected FMCG Companies for the period of 2007-08 to 2011-12
C r e d i t o r s
T u r n o v e r
R a t i o
Company
Year
2 0 0 7 - 0 8 0.083999 2.561038 2.009168 18.20001 0.614761
2008-09
0.104914
2.856861
1.778282
20.45701
0.805546
2009-10
0.108832
2.726836
2.831313
19.80195
0.537463
2010-11
0.144219
0.790289
2.666524
5.997369
0.501843
2011-12
0.131704
0.743191
0.700985
63.83725
0.627935
A v e r a g e 0.114734 1.935643 1.997254 25.65872 0 . 6 1 7 5 1

It is a tool used in the analysis of general activity, short-term solvency, and efficiency in working capital
management. The higher the creditors turnover, the shorter is the credit period. It was observed that Britannia has
the capacity to repay the short term loan when it is becoming due.
Test of Hypotheses
6.1 Table 5
Analysis of Variance (ANOVA) test on Current Ratio among the selected Companies
S o ur c e of V a r i a t i o n S
S d . f . M
S F - R a t i o 5% F Limit
B e t we e n S a m p l e
31.15
5-1=4
31.15/4=7.7 9
Within Sample
1.23
25-5=20
1.23/20=0.0 6
32.38
7.79/0.06=2.92
F(4,20)=2.8 7
The above table shows that the calculated value of F in 2.92, which is more than the table value of 2.87
at 5% level of significance with d.f. being (4, 20). This analysis does not support null hypothesis. It can
be concluded that there is significant difference in the current ratio of all the selected companies during
the study period.
6.2 Table 6
Analysis of Variance (ANOVA) test on Liquid Ratio among the selected Companies
S d . f . M
9.89
5-1=4
9 .8 9 /4 = 2 .4 7
Within Sample
0.61
25-5=20
0. 61/ 20= 0. 3 1
10.5
2. 47 /0 . 31 = 7. 9 7
F(4,20)=2.87
The test reveals that there is significant difference in the liquid ratio of all the selected companies as the calculated
value (7.97) is more than the table value and thus does not support the null hypothesis.
6.3 Table 7
Analysis of Variance (ANOVA) test on Debtors Turnover Ratio among the selected Companies
60
S o ur c e of V a r i a t i o n
d . f .
46866.18
5-1=4
46866.18/4= 11716.54
Within Sample
1403.69
25-5=20
1403.69/20= 70.18
48269.87
F -
Ra ti o
5% F Limit
11716.54/70.18= 167.38
F(4,20)=2.8 7
The above table shows that the calculated value of F is 167.38 which is much higher than the table value and
hence reject the null hypothesis and it was concluded that there is significant difference in the DTR of the selected
companies.
6.4 Table 8
Analysis of Variance (ANOVA) test on Creditors Turnover Ratio among the selected Companies
S d . f . M
3509.45
5-1=4
3509.45/4= 877.36
Within Sample
1968.69
25-5=20
1968.69/20= 98.43
5478.14
877.36/98.43= 8.91
F(4,20)=2.8 7
This test also rejects the null hypothesis as the calculated value (8.91) is more than the table value and hence it can
be concluded that there is significant difference in the CTR of selected companies during the period of study.
Conclusion
From the above study it is concluded that Britannia Industries is more able to maintain the liquidity
position during the study period. The study also revealed that Nestle India ltd requires more attention towards the
working capital management. Except Nestle and Britannia, other companies have a tendency of slow realization
from debtors. Britannia has short term loan repayment capacity in comparison to the other companies under study.
References
Banerjeee, B. (2002). Financil Policy and Management Accounting. Calcutta: The World Press Private Limited.
Brigham, E. F., & Ehrhardt, M. C. (2013). Financial Management. Delhi: Cengage Learning India Private
Limited.
Chandra, P. (2008). Financial Management. New Delhi: Tata McGraw-Hill.
Dhagat, A. K. (2012). Financial Management. New Delhi: Dreamtech Press.
Khan, M. Y., & Jain, P. K. (2001). Financial Management. New Delhi: Tata McGraw Hill Publishing Company
Limited.
Kishore, R. M. (2002). Financial Management. New Delhi: Taxmann Allied Services (P.) Ltd.
Pandey, I. M. (2014). Financial Management. New Delhi: Vikas Publishing House Pvt Ltd.
Penman, S. H. (2014). Financial Statement Analysis and Security Valuation. New Dewlhi: McGraw Hill
Education (India) Pvt Ltd.
Sinha, G. (2012). Financial Statement Analysis. New Delhi: PHI Learning Private Limited.
Subramanyam, K. R., & Wild, J. J. (2014). Financial Statement Analysis. New Delhi: McGraw Hill Education
(India) Private Limited.
61
ENHANCING CUSTOMER SATISFACTION THROUGH SOCIAL MEDIA AND

TECHNOLOGY IN HOSPITALITY SECTORS
P.P.MOHANTY*
Asst. Professor
School of Hotel Management
Faculty of Hospitality & Tourism Management
Siksha OAnusandhan University
India,Odisha, Bhubaneswar,751030
Email:richhmohanty@gmail.com
Abstract
In todays competitive era, the service industry occupies a pivotal position in the economy of developing nations.
The hospitality sector is one of the major service sectors which are rapidly growing and most buzzword of the
recent times. In India, the hospitality sector is soaring high surpassing all other sectors due to the Incredible
India campaign and influence of recent campaign Make in India initiated by Honble prime minister of India
Mr Narendra Modi. Even in the global scenario, the hospitality industry is one of the largest service sector
contributing a lot in revenue generation and foreign exchange earnings, providing 9% to the global GDP. Since
time immemorial, Indias rich tradition and culture has been showcased in hospitality sectors by putting
customers or guests first, customer or guest is king, or guest is god (Atithi Devo Bhaba) creating a philosophy of
customer satisfaction which has a become a major success indicator for this sector. The business philosophy of
every hospitality industry is customer satisfaction which entails the value creation, meeting their expectations and
fulfilling the perception level. To achieve the customer satisfaction, the hospitality industry offers personalized
service, quality and delicious food, an aesthetic accommodation, and other amenities, but the satisfaction level of
customers are not limited to these above parameters. In the age of globalization the guests or customers are
discerned and the product or services are more augmented, which compels them to expect beyond their usual
satisfaction. So to meet this high end satisfaction, the hospitality sectors have a quantum leap into the techno
savvy world and penetrated to a maximum into the social network. Apart from the food, accommodation and
pleasure, the satisfaction of the customers can be derived by hospitality sectors being techno centric and
socializing. Hence in this paper a theoretical review is conducted to find out how the customer satisfaction can be
enhanced through the use of technology and social media.
Keywords: Customer Satisfaction, Hospitality, Technology, Social Media

Introduction
Customer satisfaction is the most central theme of the every hospitality sectors. The existence and survival of the
hospitality industry largely depends on the retention and attraction of new and existing customers. This can be
achieved by providing outstanding customer satisfaction and enhancing it in regular interval with the help of
personalized service and products. Customer satisfaction is the result of fulfilling the customers perception level
by exceeding the customers expectation level. So customer satisfaction is the critical factor for the success of any
hospitality business. Hospitality industry being the customer centric industry, the organization exists only on the
achievement of the customer satisfaction. In order to achieve the sustainable competitive advantage which results
in deriving the ultimate customer satisfaction, the hospitality industry are constantly thriving on providing quality
product and service. Hotels quality product and service both are tangible and intangible by nature which
comprises of food, beverages, accommodation ,service, ambience , and other amenities which are now slowly
drifting away from the customers mind and in the age of globalization the hospitality industry has identified and
understood the needs and wants of the customers from technological angle .To fulfill this technological
satisfaction , the hospitality industry has imbibed and implemented the path of social media and technology which
is now the most indispensable criteria for every customers.
Technology has discovered a huge platform for
everyone in this world for sharing and communicating the most valid and trustworthy information. Hence
technology is the father of modern day information and communication which has become the most essential
needs of the human being on day to day basis. Social media and ICT, these two are one of the latest explorations
of the technology which has conquered mankind by offering immense benefits in every second. As the customer
satisfaction is the centre stage of hospitality industry, it is the concern of the managers to provide and sustain
customer satisfaction. The technology has penetrated to a larger extent to the hotel product and services and the
same has facilitated the obtaining of customer satisfaction by linking the customers with the technology in the
form of social media and ICT. Guest relationships are a strategic asset of the organization (Gruen et al., 2000) and
62
customer satisfaction is the starting point to define business objectives. In this context the social media has
cemented the guest-hotel relationship into a strong bondage by the help of this social media. Hotels are increasing
their investments to improve service quality and the perceived value for guests so as to achieve better customer
satisfaction and loyalty, thus resulting in better relationships with each customer (jones et al., 2007). The service
quality is the measurement tool for customer satisfaction in hotel, but now days this SERVQUAL is governed and
administered by the technology. Hence the hotel organization at present investing more capital on social media
and technology.
Statement of Problem
One of the most prolific natures of the hospitality industry is very customer centric and people to people
interactive .The hotel always try to reach out to its customer and provides personalized service in order to achieve
the customer satisfaction at its best. And in the traditional way it was really happened when a customer physically
landed up in the hotel premises. And all these are strategically marketed in a traditional way with the help of radio
and television and other print media. But it has high cost and a one way communication. But at present the
scenario has changed drastically, due to very less time, customer has inclination towards to the faster two way
communication in order to gain the accurate information, and the technology has enabled it by implementing the
social media and ICT. Ultimately the satisfaction level of the customers has enhanced by keeping in touch with
the latest technological inventions within and outside of the hotels.
Statement of Objective
The main objective of this study is to investigate the impacts of social media networks and latest modern
technology in achieving the customer satisfaction compare to the tradional way of providing service to the
customer. Another objective of this study is also, though the hotels provide personalized service to their guests,
but those services are at present mostly administered and governed by the social media and technology.
Justification
To reach out to the every customer or to have a smart linkage with customers, todays hospitality industry have
relied extensively on the social media and use of technology. The industry has realized the essence of social media
and technology and has adapted and implemented quickly for the marketing and communication purposes, which
ultimately has lead to the enhancement of customer satisfaction. Even the study can be justified on the background
of new age smart hotel managers and customers who largely share the benefits of social media and up dated
technology that flourish the industry.
Literature Review
Literally social media has changed the whole faade of the global communication and information. The
communication and information has some new names in the form of social media. Though the social networking
is existing since the time immemorial, but its usability and popularity has started two decades ago. Social media is
one of the greatest inventions in the field of communication and information. Hence the concept of social
networking has evolved, much like other innovations, and is becoming increasingly sophisticated with
advancements in technology (Edosomwan, Prakasan, Kouame, Watson, & Seymour, 2011). According to the
(Noone, Mcguire, &Rohlfs, 2011),social media can be easily defined as the combination of various internet tools
that enable users to generate, exchange and modify content continuously So in the 21 st century , social media is
the greatest boon to the mankind in the form of networking which takes the internet as the medium of reaching
and linking with customers. Since social media reaches huge numbers of people far and wide (Hartshorn, 2010), it
has emerged as a very effective business tool to engage with consumers and thereby build a brand name by
continuous and prompt correspondence. At present social networking is a global phenomenon due to its immense
popularity. According to (Milano, Baggio &Piattelli, 2011),due the easy accessibility of internet to many
countries, it has influenced the social and economical lives of many people.Later on, in the era of Web 2.0, as
social networking advanced, an increasing number of users on the Internet began to participate in social
networking websites and this has resulted in the system of social networking to change (Milano, Baggio
&Piattelli, 2011; Seth, 2012).According to Clark and Robert (2010), social networking sites are now mainly used
for job networking, targeted marketing, and entertainment. (p. 507).Social media refers to a set of online tools
that supports social interaction between users (Hansen et al. 2011, pp.12). Social media has many subsystems
which really enhanced the guest satisfaction level in the hotel industry indirectly and directly. Hansen et al. (2011,
pp.12) also define that social media is a catchall phrase intended to describe the many novel online socio technical systems that have emerged in recent years, including services like email, discussion forums, blogs, micro
blogs, texting, chat, social networking sites, wikis, photo and video sharing sites, review sites, and multiplayer
gaming communities. Compare to the traditional media, social media has been evolved as cheap marketing
63
instruments that help in the two way communication between hotel and customers. In the platform of social media
customers put up their views and comments which are easily solved by the hospitality end users. Similarly hotel
employees promote their product and services in the social media which attracts the potential customers. It has
become a channel that allows interaction and gives companies an opportunity to address the problems and
concerns of their customers, which if done effectively, contributes in building the brand (Carraher, Buchanan,
&Puia, 2010). The popularity index of social media shows the involvements of gen X and gen Y category of
people who are already the potential user of this networking path. Hence Social media today is being embraced
not only by teenagers but also members of generation X who will soon become the biggest chunk of the spending
population, as well as by members of Generation Y who are on the brink of joining the workforce (Kaplan
&Haenlein, 2010).
For this study an exploratory kind of research has been adopted and it does not include primary data collection.
Data has been collected from several sources like journals, article, books, internet, periodicals, and online social
sites.
Hospitality industry, Social media &Technology

21st centuries are the age of information and communication technology which have a tremendous impact on every
sectors and hospitality industry is no exception to it. It is the endeavor of the hospitality industry which has
integrated the social media to optimize the force of social interaction to have a wider link with the customers.
From the technological point of view, social media has linked the industry and customers for a common goal and
objectives. The business strategy of hospitality industry is to enhance the customer satisfaction and loyalty by
affording more options and personalized service through the social media marketing. Social media has
personalized the each and every individual customers need and expectations and has provided exclusive products
and services. Hospitality businesses are proactively interacting with their customers by coming up with innovative
customized solutions and much responsive and prompt customer service (kasavana, nusair, &teodosic, 2010). ICT
trends in the hotel industry are improving on a daily basis. The development of information communication
technology has dramatically changed the way customers interact and seek information, as well as the way of
purchasing services (Ip, Leung, & Law, 2010). The main motto of acquiring the social media for hospitality
industry is to achieve maximum revenue and profitability, enhanced guest satisfaction, to ease the operation and
lower down the cost and quick decision making process. Many hotels are aware that social networking sites are
important for them to gain popularity in order to create brand awareness (Assenov&Khurana, 2012). . Therefore
hotels are working on investing more in social media in terms of personnel and time as currently for them it is
not a very high investment (Assenov&Khurana, 2012, p. 331). The investment made by hospitality industry on
social media is inexpensive but acts as an efficient marketing tool. To listen to the customers reply, social media
are very convenient and have good accessibility. Besides that, using better Communication technologies brings
more efficiencies, teamwork and flexibility to suppliers of a company (Lange-Faria& Elliot, 2012). Another tool
that is provided by social networking sites is the communication tool. Hvass and Munar (2012) mentioned that the
development of information communication technology (ICT) has improved consumer communication. With an
easier access to social networking sites through mobile apps, it has brought numerous benefits for the industry like
building relationships, creating brand awareness and maintaining loyalty with consumers (Bredican&Vigar-Ellis,
2014).In the age of competitive environment, hospitality sectors striving hard to reach out the new customers and
existing customers to retain them through the internet, smart phones and PDA technology which are combined
called as e-CRM. It provides the organization for well defined interactive, personalized service and accurate
communication to the customer.
Imbibing Social media in Hospitality and its Application

Though there is a stupendous growth and development of hospitality sectors in last decades, and social media is
the new buzz word of this modern age, still the sector has gained a slow momentum towards to the social media
and even indifferent to adopt this technology. But in this competitive environment to be survived, the hospitality
industry has realized the significance of the social media and technology to meet the expectations of new age
guests. Because todays customers have a laidback attitude to the traditional communication and advertisement
channels. The change in consumer behavior is majorly affected by the social networking sites which provide
platforms for consumers to connect with the company and other consumers (Bilgihan, Peng &Kandampully,
2014). By considering the expectation level of the customers and the availability of resources, the hospitality
industry has integrated the social media to a greater extent. To reach out the target customers the industry has
imbibed the various social media sites like face book, Linked in and Twitter etc. Social media are used for many
64
purposes and its scopes are manifold depending, upon the users. For hospitality industry it may be like marketing,
job haunting and entertainment. According to Clark and Robert (2010), social networking sites are now mainly
used for job networking, targeted marketing, and entertainment. (p. 507). It not only satisfies consumers but also
strengthens the relationship with customers to ensure they make a comeback. For hospitality industry social media
is one of the strategic tools for connecting with the guest and host and communicating the relevant information.
According to Mowat (2010) the adoption of social media such as Twitter, Face book and LinkedIn has opened up
a variety of avenues and opportunities to listen to the (hotel) guest. Owning a website is a form of marketing
strategy; there has been a significant increase in marketing over the Internet these days. Some websites like Yelp,
Trip Advisor, and My Space has influenced considerably on the potential customers and has changed the whole
scenario of information and communication. Social media plays a significant role in the hospitality industry in the
form of hotel website and todays hotel managers are much more professional in attracting the perspective clients
by spreading the awareness of different product and services available in their hotel. The hotel websites if
managed effectively and efficiently will be the best platform for creating a healthy relationaship with customers
that enhance their satisfaction, also creating a brand value and retains the guest and encourages the repeat visits as
well.
Social media has changed the whole faade of the hospitality industry and also have positive impacts on the
perception level of the customers. It has made the ease of reservation process compare to the traditional hotel
reservation and virtual tour of the hotel website explores and convinces the customer about various facilities and
services , room tariffs, benefits and promotions thus creates a sati factional mind set of the costumer by saving the
valuable time. Another most important task performed by the help of social media is collecting the customer
information, so the hotel organization could have able to prepare the guest history card. Many hotel web sites
invite customers to register and identify their interests, from which hotel managers can create personalized
services and products and increase customer satisfaction (Ip, Leung, & Law, 2010). Even the social media has
revolutionized into the smart phone and android providing an ample of opportunities to avail the hotel services. It
has enabled the guest to make their table reservation and bill payment through online system which have saves the
time for them .Corporate blogging is also another boon of social media where hotel organization blog to post
information, various attractions, shopping, dinning and night life of city as well as of the hotel. The hospitality
industry also extensively uses the email messaging to connect to the potential customer ultimately enhances their
hotel experience. Being hospitality industry is the customer centric industry, for its promotion and brand image;
the word of mouth is most powerful engine which takes the help of social media. According to Dichter (1996),
word-of-mouth is one of the most powerful tools used by advertisers to market their brand. And social media is
the perfect arena where the customer testimonials about the hotel convinces and creates the confidence in another
new customer.
Conclusion
Due to rapid growth and development of the technology social media has engrossed completely into the
hospitality sectors. It has now become an indispensable tool for marketing, dissemination of information and
communication , enhancing customer satisfaction by providing the personalized services , creating the brand
awareness and reputation through the networking technology. Also it has minimized the cost, saved the time,
increases the quality of service, and strengths the customer relationship, due to the embracing of social media in
hospitality sectors , customer satisfaction has got a new name as compared to the traditional concept of customer
satisfaction. To derive the satisfaction a customer waits for a longer period of time for service to be performed, but
in the age of technology, the social media has proved its mettle by doing it within the click of a button. As the
customers behavior have changed and they are more discerned so as the social media has shaped accordingly, and
the hospitality industry has embraced the same in the right time to provide better satisfaction in a digital way. Its
the blending of both human touches of hotel organization and technology which has enhanced the customer
satisfaction level to a greater height.
65
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ROLE OF COMPUTER GRAPHICS IN DIGITAL EDUCATION:

INNOVATION IN INFORMATION TECHNOLOGY
SUKANTA KUMAR DAS1 AND PROF (DR) JIBITESH MISHRA2
Kushagra Institute of Information & Management Science. Cuttack, India
2
College of Engineering & Technology
Bhubaneswar, India
Abstract
1
The world of education is currently undergoing a massive transformation as a result of the digital revolution.
Todays digital technologies are, once again, revolutionizing the way people communicate and learn, causing
many education experts to re-examine the role of print content in the classroom. Nowadays, the area of computer
graphics is widely used in a variety of applications for specific purposes. We can find information about virtual
simulators for training in driving vehicles, like cars, buses or trains; 3D representations of future buildings or
houses most of the times only with the objective of visualization; computer and console games with high-quality
graphics, where the player can live a different experience inside the virtual world; or film scenes and characters
that are generated using computer graphics. This paper describes the use of real time graphic applications as
educational tools in the innovation of digital education.
Keywords: Transformation, Computer Graphics, 3D, Virtual World, Digital Education

Introduction
The term computer graphics refers to several different things [7], the representation and manipulation of image
data by a computer, the various technologies used to create and manipulate images and the sub-field of computer
science which studies methods for digitally synthesizing and manipulating visual content. Digital India is a
programme by Dept. of Electronics and Information Technology, Govt. of India, to transform India into a digitally
empowered society and knowledge economy. In order to transform todays classrooms into appropriate 21st
century learning environments [5], we need to provide students with rich digital content that goes far beyond
digitized print textbooks delivered over scaled-down devices. In making the move to digital content, it is
important for institutions to consider two factors: the ideal platform and the form in which the content is
delivered. In selecting a mobile device for classroom use, it is important to view it as a total learning platform and
look for a device that supports all three Cs consumption, collaboration and creation and a variety of curriculum
uses, not just one of them. Graphic designers use visual methods to communicate messages in a wide range of
publications and on websites. The possibilities of using computer graphics applications for education are opening
an important research area [1].
Computer Graphics in Education

Over the years, attempts have been made to supply visual models which might make the job of drawing visuals
easier for project workers with limited training. Another problem often encountered is the difficulty in finding
experienced personnel to prepare the materials in a camera read form quickly and easily. It has also proven
difficult to adapt materials which have been successful in on region or country to another ethnically or culturally
different one because the models do not lend themselves to change: instead, project workers make use of not
always the most appropriate of materials or have to start from scratch.
Computer graphics are found in almost every industry; individuals in all demographic, geographic, racial,
political, and religious groups benefit from them [2]. When picking up a magazine or newspaper, watching
television, going to the movies, or taking a drive down the street, images produced by computer graphics are seen.
Practically every aspect of engineering and science, computer-based tools are being developed to aid students and
professionals in learning through modeling, visualization, simulation and inter-action [3]. The Internet has been
utilized as the ideal medium to create platforms for students to use for its wide availability but also computer
graphics based software are developed in order to enhance the teaching process.
With the increasing numbers of computers now being used in the field there has grown a demand for simpler and
more direct system. Traditional graphics and desk top producing programs available to most projects tend to
become a bit to complicated for the average users to make much use of the capabilities. The image bank is
available to several organizations. People were trained on the computer to simplify the design, graphic layout, and
production of other images.
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The computer graphics images are as followings [7] :

Two-dimensional
2D computer graphics are the computer-based generation of digital images. 2D computer graphics are mainly
used in applications that were originally developed upon traditional printing and drawing technologies such as
typography. In those applications, the two-dimensional image is not just a representation of a real-world object,
but an independent artifact with added semantic value; two-dimensional models are therefore preferred.
Pixel art
A large form of digital art being pixel art is created through the use of raster graphics software, where images are
edited on the pixel level. Graphics in most old computer and video games and many mobile phone games are
mostly pixel art.
Sprite graphics
A sprite is a two-dimensional image or animation that is integrated into a larger scene. Sprites were a method of
integrating unrelated bitmaps so that they appeared to be part of the normal bitmap on a screen, such as creating
an animated character that can be moved on a screen without altering the data defining the overall screen. Such
sprites can be created by either electronic circuitry or software. The software can simulate this through specialized
rendering methods.
Vector graphics
Vector graphics formats are complementary to raster graphics. Raster graphics is the representation of images as
an array of pixels and is typically used for the representation of photographic images. Vector graphics consists in
encoding information about shapes and colors that comprise the image, which can allow for more flexibility in
rendering.
Three-dimensional
3D graphics compared to 2D graphics are graphics that use a three-dimensional representation of geometric data.
This includes images for real-time viewing. 3D computer graphics rely on similar algorithms as 2D computer
graphics do in the frame and raster graphics in the final rendered display. In computer graphics software 2D
applications may use 3D techniques to achieve effects such as lighting and primarily 3D may use 2D rendering
techniques.
Computer animation
Computer animation is the art of creating moving images via the use of computers. It is a subfield of computer
graphics and animation. Increasingly it is created by means of 3D computer graphics, though 2D computer
graphics are still widely used for stylistic, low bandwidth, and faster real-time rendering needs. Virtual entities
may contain and be controlled by assorted attributes, such as transform values stored in an object's transformation
matrix. Animation is the change of an attribute over time. The 2D/3D graphics software will change with each key
frame, creating an editable curve of a value mapped over time, in which results in animation. To create the illusion
of movement, an image is displayed on the computer screen then quickly replaced by a new image that is similar
to the previous image, but shifted slightly.
3. Traditional Classroom Vs Digital Classroom

Traditional classroom
Board and Marker
Personal presentation
Use some sample pictures
Digital classroom
Teacher use the Internet to initiate and measure learning
E Mail is a focal educational exchange medium
Students are able to manage and produce digitally edited movies
Multimedia visual literacy is a valued learning focus
Teachers can comfortably use computer graphics & multimedia to enhance learning
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Fig 1: Impact of Digital Education
4. Incompatibilities between Schooling and Technology

There are deep incompatibilities between schooling and the new technologies [6]:
Uniform learning vs. Customization. Deeply ingrained in the structure of schooling is a mass-production notion
of uniform learning. This belief stipulates that everyone should learn the same things at the same time. But one of
the great advantages of technology is customization. Computers can respond to the particular interests and
difficulties that learners have and provide content on any topic of interest.
Teacher as expert vs. Diverse knowledge sources. Schooling is built on the notion that the teacher is an expert,
whose job is to pass on their expertise to students. Teachers do not like to see their authority challenged by
students who find contradictory information or who ask questions beyond the teachers expertise. In contrast,
video and computers provide many different sources of expertise.
Standardized assessment vs. Specialization. The assessment technology employed in evaluating students uses
multiple-choice and short answer items, in order to provide objective scoring. But this form of testing requires that
every student learn the same things. To the degree technology encourages students to go in their own direction.
Knowledge in the head vs. Reliance on outside resources. There is a deep belief among teachers and parents
that to truly learn something, it is critical to internalize it without any reliance on outside resources. Therefore, on
tests students are usually not allowed to use books or calculators, much less computers or the web. The opposite is
true of adult life, where technology supports peoples use of outside resources.
Coverage vs. The knowledge explosion. School pursues the goal of covering all the important knowledge people
might need in the rest of their life. As knowledge has grown exponentially, textbooks have grown fatter and fatter.
It has become difficult to cover all the important material, and so curricula have become a mile wide and an inch
deep. Given the explosion of knowledge, people cannot learn in school all they will need to know in later life.
Learning by acquisition vs. Learning by doing. Deeply embedded in the culture of schooling is the notion that
students should learn a large body of facts, concepts, procedures, theories, and works of art and science that have
accumulated over time. In contrast, technology fosters a more hands-on, activity-based education. Computers are
highly interactive and provide a variety of tools to accomplish meaningful tasks.
:
5. Digital Learning Environments

Multimedia elements such as still images and graphics, video,
The most effective digital learning environments bring together the three Cs of consumption, collaboration and
creation by [5]:
Engaging students through a rich and varied array of innovative media and learning experiences;
Being flexible and adaptable, allowing students to learn at their own pace, and in their own style;
Offering teachers and administrators the power to select and modify content as desired;
Connecting students with outside resources as well as experts and mentors to support their learning;
Providing a seamless continuum of instruction and assessment thus providing data to inform teacher practice and
improve student performance;
Offering opportunities for students to share ideas and collaborate with one another through such tools as wikis or
social/academic networks;
Challenging and motivating students to create their own meaning in the form of blogs, multimedia presentations
or other original content that builds on what they have learned and is delivered to an authentic audience.
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6. Digital Content Management

Most of the digital content that is being managed includes [4]:
Human Language, in various forms character-coded electronic text, scanned images, printed or handwritten text
or human speech.
Language technology helps in managing digital content
Management through learning from past experience also adds to manage content
7. Digital Preservation of Data

The steps a project follows to create visual materials:
The program decided on the form, context, and use of the visuals based on an understanding of the audience and
the development of strategies aimed at changing behavior in line with the established goals.
Collect images. The easiest would be to copy images already existing, from other materials with their permission
or we could photograph the scenes and props needed. Existing materials could also be adapted to make it
culturally appropriate for their needs, interest and conditions.
These images were scanned on the computer--this operates something like a copy machine, except the images are
converted into electronic codes which appear on the computer screen. On screen, afterwards, the images can be
changed or adapted as needed. The printed images can be turned into line drawings or half tones to be used by the
printer.
Arrange the images as wished and add any written text. The whole is printed out and then sent to the printer for
multiple copies.
The models would then be pre tested and adapted as needed.
The revised materials would then be printed on the laser printer which makes a very detailed image and this would
be sent to the printer as the camera ready. With the use of the laser printer half tones images could also be
produced for the printer.
Fig 2 : Digital preservation of data
8. Conclusion
Technology is changing what is important to learn in a variety of ways. There are new literacys that are becoming
important, such as creating videos, animations, and web sites. Computers can carry out all the algorithms taught
through various institutions. Hence we should spend time teaching students to solve sophisticated problems using
70
computers rather than executing algorithms that computers do well. Memorizing information is becoming less
important with the web available, but people do need to learn how to find information, recognize when they need
more information, and evaluate what they find. The development of graphic applications in real time, specifically
addressed to people with special needs, constitutes an emerging field of work inside the area of computer graphics
applied to educational processes.
References:
1.
2.
3.
4.
Lucia Vera, Ruben Campos, Gerardo Herrera, Cristina Romero (2007), Computer graphics applications
in the education process of people with learning difficulties, Elsevier
http://www.encyclopedia.com/topic/computer_graphics.aspx
Computer Graphics in Environmental Education, Oscar Anson, Adolfo Munoz, Jorge Lopez-Moreno,
Jorge Jimenez, Belen Masia, Diego Gutierrezk
V.N. Shukla , Digitization Practices in India: Issues and Challenges
Intell, Making the Move to Digital Content, 2011
Allan Collins and Richard Halverson, Rethinking Education in the age of Technology: The Digital
Revolution and the Schools
Computer Graphics, https://en.wikipedia.org/wiki/Computer_graphics
71
ROLE OF HRM FOR INNOVATIVE PROCESSES TO ENHANCE

ORGANIZATIONAL BUSINESS EFFECTIVENESS
PROF. S. S. BHUSHANAM,
BE, PG-DIIT, MBA, M.Phil, (PhD)
Email: ssbhushanam@gmail.com; Phone 098482 64134
Abstract
Human resource management (HRM) in its effort to contribute to innovative organizational processes has to
adopt innovative practices for itself. HRM needs to play a role of catalyst to enhance organizational business
effectiveness.
This is a conceptual paper, based on the related published literature and research works, along with the authors
experiential learning. In this paper attempt is made to discuss the essential ingredients of innovation with the
contextual importance for sustaining the growth of a business organization and the role of HRM as a catalyst to
promote innovation practices across the organization. Discussion is presented on the HRM practices that
influence and contribute to the organizational performance and also to influence innovation performance
effectively. The HRM systems which are conducive to innovation are related to the ability of HRM to innovate and
the systems that are affecting, firminternal and firmexternal factors and their adaptation. A shift in focus from
traditional production companies to knowledge management firms are the challenges for business organizations.
In particular, effective management of an organizations human resources has become a critical issue for
ensuring sustained innovation capacity. The objective of this paper is to discuss these aspects and the relationship
in an effort to identify HRM practices that support innovation. To this end, the paper includes discussions on
aspects relevant to HRM and innovation in knowledge management.
Key Words:Business Effectiveness, Human Resource Management, Innovation, Knowledge Management,

Sustainability
1.0 Introduction
This paper aims to investigate the innovative human resource management (HRM) practices that significantly
contribute to organizational effectiveness in its endeavor of the business pursuits. Human Resource Management
(HRM) needs to be more distinctly embedded in organizational strategy in order to facilitate innovation. The four
dimensions of staffing, structure, strategy and system support are central to successful innovation, and that
ensuring the organization had the right kind of people who were effectively managed were critical staffing issues.
Human Resource Management (HRM) may be defined broadly in terms of all management activities impacting
relationships between organization and employee; or more specifically as a system of operational functions such
as staffing, selection, job design, training and career development, performance appraisal and compensation
Further, there is an increasing tendency to also consider more strategic level functions such as human resource
planning and forecasting Although there is considerable discussion regarding the relative importance of specific
HRM practices and how they should be configured, there is general agreement concerning the importance of
alignment between HRM practices and organizational strategy.
Innovation is the creation of better or more effective products, processes, services, technologies, or ideas that are
accepted by markets, governments, and society. Innovation differs from invention in that innovation refers to the
use of a new idea or method, whereas invention refers more directly to the creation of the idea or method itself.
The human resources within a company are the single most important ingredient in the innovation success
formula. It follows quite naturally that the HRM function must have an impact on the companys innovation
capacity. The role of HRM in innovation is twofold: looking inwardly at HRM function innovation and role as a
catalyst in the organizations overall innovations. HRM can best support the innovation agenda by sticking to its
knitting and focusing on the key themes: recruitment, rewards, retention.
2.0 Sustainable Innovation through HRM

Innovation necessitates commitment of resources to an uncertain future. People need to think differently and will
be rewarded for doing those important things Thus innovation is all about the innovator. It is the human brain
which innovates. One approach for success at innovation can be that the company to do what many others does
not, building innovation into job descriptions and budgets for it in employee time
72
Innovative Recruitment Process

The need is to identify people who can think outside the box and recruit people for their innovation capabilities,
who are inquisitive, open to new ideas and new concepts.HRM must work diligently to make sure that right
systems are in place to attract, identify, and capture the best talent to drive innovation. HRM must train managers
on the best practices for creating employee and job profiles that can be used to properly screen
candidates. Managers need help in constructing the process of interviewing and vetting candidates. HRM should
provide coach to hiring managers in the basics of situation-based interview techniques and candidate evaluation
around the metrics of aptitude, attitude, and achievement. Sources of external idea-generators for the HRM
innovation recruitment process are: customer feedback on service, customer preferences, customer expectations,
market future growth, required skills and knowledge requirements related to products / services / technology
suppliers as a source.
Innovative Strategies
Organizations need to develop innovative strategies for how they recruit, develop, and retain their employees. The
most effective organizations will be those with the capacity and systems to build teams of the best and brightest
young talent. To effectively recruit, develop, and retain these individuals, organizations need develop innovative
approaches to win against competing employers. The rewards system provides for reinforcing commitment,
directing employee professional growth, and shaping the corporate culture. This should include compensation
strategies, performance management tools, and other targeted recognition and reward programs. The cost of losing
a key employee is very high. So, it must be a primary objective to retain the top performers in the
organization. HRM needs to work with managers to have a system that identifies who are the key people in the
organization and where are the risks.
\HRM and Culture

Culture is an important force in business. The people are hired, trained with cultural imperatives and placed on the
business through HRM. HRM has to identify: - the roles people play; - the risk or encouragement of innovation; the ability of the people to think about innovation; - to be creative; -the ability to impact or influence the culture.
HRM need to enable to realize that innovation is a sustainable competitive advantage for that business. In the
process, has to attract and retain creative, innovative people and implement a culture that sustains innovation.
Thus HRM has a huge impact on that company and its culture. Innovation springs from the minds of creative
individuals working in an environment that encourages innovation. Attracting and keeping the most innovative
people, and constantly improving their skills, and creating a culture that supports innovation will enable the firm
in the long run to differentiate itself. These are all roles for HRM.
Social Frame of Mind

Innovation is also a social mind frame. Innovation is started by an innovator and followed by the masses.
Innovation leads to further innovation. Thus innovation is all about the innovator. It is the human brain which
innovates. Finding such brains is the real job of our HRM department. A successful HRM professional is always
an innovator who identifies the resource who can do trendsetting innovation. An ideal HRM professional should
have a sensibility to understand the processes one practice to understand and implement business techniques. One
should delve in detail to understand the outlook of an interviewee when it comes to innovation.
3.0 Innovation and Human Capital Management

Human capital management practices which can contribute towards the company's success are discussed below.
Innovative Job Descriptions

New ideas are often generated by employees, from the bottom up, in a prescribed system of time allocation. The
plan can be that employees are required to spend 80% of their time on the core functions businesses, and 20% on
technical projects of their own choosing. Employees' work structure to be designed to follow a '70/20/10' model,
an arrangement which has to be applied to all employees. This refers to a breakdown of the working time as: 70
percent of the employee's time should be spent on the business, fulfilling the job role; here, providing absolute
clarity about the job description is essential, as good people only fail if they do not know their role. 10 percent of
the schedule is time to do 'whatever the employee wants time for innovation and creativity, freedom to think. 20
percent of the time employee is to be for personal work, a period spent on personal development which will
ultimately benefit the company. The approach to innovation is to be planned in an improvisational manner. Any
employee in the company can have a chance to create a new product or feature. The individuals can have such an
influence that allows the organization not only to attract high-quality employees but also to create a large volume
of new ideas and products.
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Market to Choose
Market to choose, is customer sourcing product strategy. The emphasis in this process is not on identifying the
perfect offering, but rather on creating multiple potentially useful offerings and letting the market decide which
are best.
Train to handle Failure

Employees should be trained to handle failure and try again; need to take enough risk. Error and innovation go
hand in hand.
Fact-Based Approach
It is important to support inspiration with data; making extensive use of data and testing to support ideas. The
approach suggested, is to be an analytical and fact-based approach to use not only to its core business but also to
making any change and deciding what new services to offer.
Align Strategy, Practices, People
Recruitment processes has to be continually modified; the hiring approach is to be based on an ongoing analysis
of which employees perform best and most embody the qualities of the companys strategies and objectives. The
approach is: First, to survey current employees on a variety of characteristics and traits, including teamwork,
biographical information, past experiences and accomplishments. Next, to statistically determine which of these
many traits the top performers and most impactful employees' exhibit, that differentiates them from average
employees. Another form of analysis involves the use of prediction markets consisting of panels of employees. It
uses
the
panels
to
assess
customer
demand
for
new
products.
Its all about getting the alignment between strategy, practices and people.
Talent
Changes in the nature of labor and talent need to be far more thoughtful in future. The shift to knowledgeintensive industries highlights the importance and scarcity of well trained talent. Companies need to understand
the implications of these trends. Those that align their strategies to them will be best placed to succeed.
Organizations need to apply performance indicators.
4.0 Performance Indicators

Key performance indicator (KPI) is an industry terminology for a type of performance measurement. KPIs are
used by an organization to evaluate its success or the success of a particular activity in which it is engaged.
Sometimes success is defined in terms of making progress toward strategic goals, but often, success is the
repeated achievement of some level of operational goal. According to the balanced scorecard the KPIs are divided
into the following four perspectives: - Financial Customer Process - HRM and Innovation
5.0 HRM as Channel For Innovation

HRM leaders should assume a more vital, strategic role inside their companies. HRM professionals should be
striving to build and strengthen the unique set of organizational capabilities that give a company its competitive
advantage. In essence, that means developing a selected mix of resources, processes and values that makes it hard
for rivals to match what the company does.
Sustainable Competitive Advantage
Most traditional forms of competitiveness cost, service, technology, distribution, manufacturing, product design,
may still provide a company with a temporary head start, but over time they no longer offer the basis for a
sustainable competitive advantage. So what do we have left? The answer, in a word, is radical innovation. In a
world where strategy life cycles are shrinking, innovation is the only way a company can create success. In
todays value-based economy, radical, game-changing innovation is literally the only strategic weapon we have
left, in the sense that its the only capability that can create value for customers in a way that is difficult for
competitors to imitate.
The Challenge
The challenge is to turn innovation to a core competence top-to-bottom enterprise capability; capability-building
process. It is about making innovation a systemic organizational capability is a complex and multi-faceted
challenge. It requires deep and enduring changes to leadership focus, performance metrics, organization charts,
and management processes, IT systems, training programs, incentive / reward structures, cultural environment and
values. All of these elements need to come together and mutually reinforce each other as a system in order to
institutionalize innovation. What companies need is about making innovation a new organizational way of life;
something that permeates everything a company does, in every corner of its business, every single day. Its about
infusing the entire lifeblood of an organization with the tools, skills, methods and processes of radical innovation.
HRM as Driver
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HRM has to move to center stage. HRM leaders have to become capable of turning a companys strategic intent
with regard to innovation into tangible everyday action; to make the necessary changes to executive roles and
goals, political infrastructures, recruitment strategy, broad-based training, performance appraisals, awards and
incentives, employee contribution and commitment, value systems, and so on. HRM have to build and foster the
cultural and constitutional conditions such as a discretionary time allowance for innovation projects, maximum
diversity in the composition of innovation teams, and rampant connection and conversation across the
organization that serves as catalysts for breakthrough innovation. HRM has to ensure that each employee
understands the link between his or her own performance (as well as compensation) and the attainment of the
companys innovation strategy. HRM leaders have to create a company where everyone, everywhere, is
responsible for innovation every daywhether as an innovator, mentor, manager, or team member.
Innovation for Business Initiatives
It is critical for businesses to understand the distinction between creativity and innovation before attempting to
institute new organization-wide innovation initiatives. Creativity is the mental ability to conceptualize new,
unusual or unique ideas. Innovation is a process that transforms such visionary ideas into practical products or
processes that deliver greater value. Creativity is thinking up new things. Innovation is doing new things. It is
impossible to develop a truly innovative organization if creativity is ignored or stifled. And likewise, without
effective processes in place to transform creative ideas into practical, value added application, creativity is of no
commercial value. When you truly understand the difference between creativity and innovation, you can start your
process for success - by freeing and inspiring the creative ability lying dormant in your organization. When
creativity is liberated, innovation flows. The innovation point is the pivotal moment when talented and motivated
people seek the opportunity to act on their ideas and dreams
6.0 Knowledge Management and Innovation

The essence of knowledge management (KM) with respect to innovation is that it provides a framework for
management in their attempt to develop and enhance their organizational capability to innovate. It defines the
ability of an organization to recognize the value of new external information and knowledge, assimilate, and apply
them, and this ability is critical in determining an innovative result. Knowledge breadth and depth are two distinct
dimensions of a knowledge base that reveal both the structure and content of the knowledge a firm holds.
Knowledge breadth refers to the extent to which the firms knowledge repository contains distinct and multiple
domains. Knowledge depth refers to the level of sophistication and complexity of knowledge in key fields
Cultural Perspective of KM
Cultural perspective of knowledge management and innovation Literature on knowledge management and
organizational innovation emphasizes the importance of culture as a major determinant in innovation outcomes.
As innovation is essentially about converting ideas into something profitable, encouragement to supply ideas
needs to be substantial in order to channel the creative ability of the employees to convert ideas into innovations.
Therefore, organizations need to facilitate innovation by creating and maintaining an environment that supports
idea generation and creativity. Such enabling conditions include the provision of resources and opportunities as
well as minimizing constraints that could impede individual creativity
Knowledge Worker
In a knowledge-worker organization, people - the only repository of knowledge - are the main resource. In the
current climate of rapid change, it is becoming necessary for knowledge workers to be in a continuous learning
mode. Learning and growth constitute the essential foundation for success of any knowledge-worker organization.
This perspective includes employee training and corporate cultural attitudes; this is related to both individual and
corporate self-improvement. Innovation has been demonstrated to be a key value creator for organizations, in both
times of cost cutting and in times of growth. As such, it stands out as one important objective of knowledge
management.
Managing Knowledge for Innovation
Techniques of Managing Knowledge: Various techniques of managing knowledge for innovation include the
following: - Capturing and Reusing Knowledge - Sharing Lessons Learned - Documenting Expertise - Structuring
and Mapping Knowledge - Measuring and Managing the Economic Value of Knowledge - Synthesizing and
Distributing External Knowledge - Using a Technical Infrastructure for Knowledge Exchange - Embedding
Knowledge in Products and Services
Creation of New Idea: Innovation learning and knowledge driven; the whole innovation process is a series of
learning cycles. Peter Drucker noted that the path towards innovation is primarily found through asking the right
thought-provoking questions about the issues at hand. However, these questions usually lie outside of standard
mental models, making them difficult to uncover. Organizations need creativity-promoting culture to truly jumpstart the idea generation which undergirds innovation. In general, two cultural perspectives that inhibit creativity
are: risk aversion, where a fear of failure leads to a stifling level of caution; bias in favor of newness, at the
expense of ideas based on existing know-how.
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Development of Process: Once ideas have been identified and either explicitly selected or worked on privately,
they need to be developed into an actual product or process if they are to have value. Companies need to have a
process in place to develop new ideas, and further process development. Many organizations find that customer
involvement in the development process produces better results and increases customer buy-in to the products.
Implementation: Implementation occurs when a idea is brought to the market or when a new process is put in
place in an organization. Knowledge management plays two important roles during the implementation stage. The
first comes through the pre-work and preparation; this is to determine the fit of the idea with existing elements of
the organization and knowledge of the users. The second way is to provide support during implementation in how
the knowledge about the product is disseminated.
Feedback -The Key to Learning: Feedback on processes and products is often collected, and just as often ignored.
A key element of knowledge management is learning through the ongoing integration of experience into the
existing base of knowledge.
Human Knowledge Capabilities and Innovation
In Todays knowledge economy, information and human capability are as much required raw capital resources as
land and machinery were during the agricultural and industrial ages. The most decisive and essential factors for
business are: the art of continuous innovation: the ability to constantly discover, create, capture, and exploit.
Knowledge management activities are adding value to organizations by enhancing innovation and innovativeness.
It provides numerous ways in which knowledge could be, leveraged to add value to the creation, development,
and implementation of new product and process ideas.
Managements role: Managements role appears to be to carefully combine activities which enable and encourage
ideas to be generated and grow, support their diffusion, and harvest the value for the organization. Knowledge
management is one set of approaches to doing this which seems to meet with some success.
Knowledge Management and Value Creation
Value Creation Approaches: Various creation approaches for value creation to the organizations are as follows: A)
Value Creation via Knowledge of Management context for the knowledge process: - Data- InformationObservations-Connectivity B) Value Creation via Improved Performance & Training context for the learning
process: - Relevance- Emotion- Situation-Experience- Collaboration- Community C) Value Creation via peer
review, adoption & diffusion of innovations context for the innovation process: - Idea capture- RecombinationFeedback
Innovation - Key Driver of Efficiency: Through process innovations, companies have been able to drive down
costs, reduce cycle time, and create tighter links to their customers and other business partners. There is always a
need for greater innovation in this area as most organizations will strive to develop their process efficiencies in
new and unique ways, whether in an expansion or cost-reduction mode. Effective process innovations can provide
benefits over time, which far exceed their initial efficiency boosts.
Innovation - Knowledge Process Model
The environment in which new ideas are created can be seen as a garden and management has the ability to
influence certain factors such as resources, surroundings, and employee skill levels which incubate the ideas. The
soil and the food for growth of idea is composed primarily of: - disseminated organizational knowledge - personal
knowledge and experience resources. The absorptive capacity of the people involved determines a teams ability
to apply knowledge, resources, etc. to a given problem. Learning is the process by which people absorb these
resources. After an idea has been developed, it can be taken to market and implemented. The market can be an
internal one where value is expressed through better operations, higher efficiencies, improved quality, or increased
profitability. The final element of this model is feedback. This is not actually a stage, but a continuous cycle by
which lessons learned from experience enter back into the innovation process
7.0 Conclusions
In global environment, both innovation and strategic human resource management are essential parts of business
organization. These are the two sides of the same coin. Strategy is the long term planning and innovation is
inseparable part of it, because change is the law of nature. New methods of performing work, new technologies
and techniques take place from time to time. An important aspect of strategic human resource management is
employee development by using innovative techniques. In present scenario, innovation is necessity for global
competitiveness. This process begins when a company is recruiting and interviewing prospective employees.
Ideally HR department & top management work together to formulate the company's overall business strategy;
that strategy then provides the framework within which HR activities such as recruiting and appraising must be
crafted that result in the employee competencies & behavior that in turn should help the business implement its
strategies and realize its goals.
The human resources management system must be tailored to the demands of business strategy. The employees
should be developed to create competitive advantage, with HRM being the partner in the formulation and the
76
implementation of the corporate competitive strategies. Knowledge and its retention are the key important factors
for their organizations competitive advantage.
8.0 References
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
Competitive Advantage Through HR Innovation - http://www.europeanbusinessreview.com/?p=1079

Effects of Human Resource Management Activities to Improve Innovation in Enterprises http://www.academia.edu/907367/Effects_of_Human_Resource_Management_Activities_to_Improve_In
novation_in_Enterprises
Google Human Capital (HCM) strategic- HR for innovation 2008
https://www0.gsb.columbia.edu/faculty/abartel/papers/human_resource_management.pdf
http://www.balas.org/BALAS_2013_proceedings_data/data/documents/p639758.pdf
Innovations
in
Human
Resource
and
Economic
Development
http://hrd.apec.org/index.php/Innovations_in_Human_Resource_and_Economic_Development
Knowledge
Management
and
the
Effectiveness
of
Innovation
Outcomes
file:///C:/Users/admin/Downloads/ejkm-volume11-issue1-article384.pdf
Measuring
the
impact
of
HRM
on
organizational
performance
http://www.jiem.org/index.php/jiem/article/view/13
Rowan Gibson - Rethinking the role of HR as the catalyst for sustainable innovation
Rudy Ruggles and Ross Little - Knowledge Management and Innovation an Initial Exploration - May
1997, Ernst & Young
Rowan
Gibson
Radical
innovation
http://www.rowangibson.com/site/index.php/component/tags/tag/32-business
Rowan Gibson - Rethinking the Future,
Rowan Gibson -Innovation to the core March 2008, Harvard Business School Press.
Role of Innovation and Strategic Human Resource Management In Business Development - ZENITH
International Journal of Business Economics & Management Research Vol.2 Issue 1, January 2012,
ISSN 2249 8826
The Impact Of Strategic Human Resource Management On Organizational Performance - Journal Of
Naval Science And Engineering 2010, Vol. 6 , No.2, Pp. 100-116
77
TALENT MANAGEMENT AS INNOVATIVE HRM TOOL: AN EMPIRICAL

EVIDENCE FROM INDIAN IT SECTOR
PRAKASH RANJAN PARIDA
Lecturer,School of commerce
Ravenshaw University, Cuttack, pin: 753001, Odisha, India
Email:paridaprakash79@gmail.com
Abstract
In todays scenario more and more companies are trying to add something extra to their core competencies which
will give them competitive edge .In trying to achieve their goal they have to focus on their human capital and
especially it needs a proactive direction to talent management. Talent Management has now become the topic
everybody talking about seriously and purposefully in corporate world. A high performing organization is that
which is utilizing its human capital optimally. This task of optimum utilization of talent an organization can
achieve only through Talent management process. It is a fact that every organization possesses talent, only thing
it needs nurture, develop and utilize that talent. Job enrichment and job enlargement are two techniques in HRM
which helps in development of talent. Talent management in IT sector particularly is Challenging as it involves
the functions like attracting, selecting, placing, appraising, rewarding and retaining talent. Different companies
adopt different approaches for this such as Career Succession planning, career mapping etc. This paper
highlights the different approaches adopted by companies for managing talent .
Key Words:Talent Management, Career Succession, Career mapping, Job enrichment, Human capital
Introduction
A major challenge faced by todays companies is maintaining and retaining strong talent in organization. With
changing demographics of work force ,more and more women workers and knowledge workers have thrown a
challenge to the organizations to build on their core competencies. Business executives especially hr managers
now have to shift from their traditional talent retention strategies to talent management strategies like engaged
employee and optimal employee. It is imperative for an organization which wants to be successful to have the best
people. It is virtually a war to find, hire, and retain best people for your organization. This war will be won by that
organization which has the right kind of tools in its hands. The sole objective of this paper is to find out the factors
that contributes for improvement of employee performance through talent management.
In the words of Derek Stockley Talent management can be defined as A conscious, deliberate approach
undertaken to attract, develop and retain people with the aptitude and abilities to meet current and future
organisational needs.
Talent Management is a science of improving organizational value system and making organizational system
capable of achieving the predetermined goals. Be it recruitment, selection ,placement, maintenance, reward,
development, retaining people, making them perform, all these activities are coming under the folder of talent
management. A talent management strategy needs to link business to make sense
Figure-1 Talent Management Process
78
Figure-1 describes the entire tlent management process as a whole. In the first step it aligns business strategy with
the talent management process. As always Recruitment is the first and most important step, after recruitment
performance has to be measured. For improving the employees performance training must be provided, then
succession plan must be ready to fill in the positions to be vacant, to fill the skill gaps company must undertake
gap analysis.
Talent management is now an indispensable activity of management, which once upon a time was the
prerogative of HR dept. and attached to recruitment but it now covers many areas. Investing in building talent and
culture is long term thing and it needs commitment from the top management which is the real issue.
Purpose
The purpose of the present study is to find out the various methods adopted by companies for talent management
Research Design
As the present study is exploratory in nature, it was conducted with the help of secondary data which included
journals, research papers, and information
Talent Management In Indian It Industry

Globalization of world economies has greatly enhanced the values of information to business organizations and
has offered new business opportunities. As workforce demographics shift and average employee tenure shrinks,
the competition for hiring the best job candidates is fierce and getting more so every day. Information technology
in India is an industry consisting of two major components: IT Services and business process outsourcing (BPO)
Table-1: The Big five IT Services companies in India
Firm
Tata Consultancy
Services
Cognizant
Technology
Solutions
Infosys
Wipro
HCL
Market Capitalisation in cr.as

on 31.03.2015
5,10,248
Employees
Fiscal Year
Headquarters
319000
2015
Mumbai
2,45,000
217000
2015
Teaneck,NewJersy
2,54,610
1,58,635
1,42,186
176187
158217
105000
2015
2015
2015
Bangalore
Bangalore
Noida
As figures indicate, the market capitalization by the companies is high. This sector has also led to massive
employment generation. The industry continues to be a massive employment generator. The contribution of
India's IT industry to economic progress has been quite significant. The rapidly expanding socio-economic
infrastructure has proved to be of great use in supporting the growth of Indian information technology industry.
The growth and prosperity of India's IT industry depends on some crucial factors. These factors are as follows:
India is having third largest number of technically qualified people in the world.
The cost of skilled Indian workforce is reasonably low compared to the First world countries.
India has a huge pool of English-speaking IT professionals.
The IT sector of India offers a host of opportunities for employment. With IT giants like Infosys, Cognizant,
Wipro, TCS, Accenture and many others IT firms operates in some of the major Indian cities.
All these have improved the gross production of goods and services in the Indian economy. According to the
NASSCOM report, by 2020, the IT-BPO industry is expected to account for 10 percent of Indias GDP and total
14 percent of total services sector revenues.
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Now the HR dept. is under immense pressure due to this tremendous growth, and the biggest of them is to attract
and retain the talent as there is lot of job opportunities for them and hence job hopping is a common phenomenon
with the employees. As world class companies develop within emerging economies and begin to compete with
MNCs, the competition for best talent intensifies. In recent years so many companies have conducted research in
managing talent. Few of them are IBM, Deloitte, TCS and Infosys. Few consultancy organizations like CIPD,
HAY group, McKinsey etc. also have conducted in depth study to find out the key elements of talent management.
The literature review comprises of the main findings of these reports.
Talent Management at IBM:

A joint study conducted by IBM and Human Capital Institute, IBM and the Human Capital Institute surveyed
1,900 individuals from more than 1,000 public and private sector organizations around the world about their
organizations talent management and identified few elements of talent management they include:
Develop strategy: Establishing the optimal long-term strategy for attracting, developing, connecting and deploying
the workforce.
Attract and Retain: Sourcing, recruiting and holding onto the appropriate skills and capabilities, according to
business needs.
Motivate and Develop: Verifying that people's capabilities are understood and developed to match business
requirements, while also meeting people's needs for motivation, development and job satisfaction.
Deploy and Manage: Providing effective resource deployment, scheduling and work management that match
skills and experience with organizational needs.
Connect and Enable: Identifying individuals with relevant skills, collaborating and sharing knowledge, and
working effectively in virtual settings.
Transform and Sustain: Achieving clear, measurable and sustainable change within the organization, while
maintaining the day-to-day continuity of operations.
Knowledge-intensive industries tend to focus on developing and connecting their employees. In the research
Telecom, Electronics Technology and Professional Services are being considered as knowledge-intensive
industries. These companies are driven by people sometimes they also face shortage of skilled people. The
research shows that
Knowledge-intensive organizations focus on motivating and developing talent at the individual level, as well as
connecting and enabling those individuals across the enterprise.
Another goal for many organizations is to make the sum of all talent greater than the individual parts.
Companies look at better ways to engage and utilize internal talent. High performers have to be engaged .and
given quality work.
Organizations manage talent by sharing knowledge among individuals and across the enterprise.
Talent Management at Infosys:

Infosys Technologies is an Indian global technology services company headquartered in Bangalore .Infosys is
ranked 27 in the list of top companies of India in Fortune India 500 list in 2011. It has offices in29 countries and
development centers in many countries. It provides business consulting, technology, engineering and outsourcing
services to help clients in over 30 countries. Lot of studies have been done about the company for its HR practices
, one such being done by Elisa Tucker and Rachel Williams , they wrote an article the May 2011 issue of
workspan . It states that the high performing companies like Infosys pay lot of attention on talent management.
One such practice is Employee Engagement which is a part of the talent management process. The process
includes following
Create a formal employment brand and communicate it to employees.
Create a good brand image for company in external environment. (e.g., awards as best place to work or best place
for leaders)
Tap good talent locally. (where applicable)
Allow employees the opportunity to be heard informally via social media channels and formally via grievance
redressing programs.
Employee Selection: Leverage high potential or high value talent to recruit and select new hire candidates.
Use like talent to recruit like -talent (e.g., technical talent to recruit technical talent).
80
Training and Development: train managers and leaders on principles of employee engagement.
Teach new managers and supervisors the fundamental concepts of talent management.
Provide meaningful and customizable career paths for employees that allow for a sense of purpose and direction in
the organization and provide an element of challenge to employees
Recently the company also appointed a global head for talent fulfillment the idea was to have a person who can
see everything transparently. With this the entire chain, starting from recruitment, enablement and fulfillment
(including training) and mobility the ability of the people to move across the globe are being consolidated
under one single function. The sole purpose is to create agility and increase pace of execution,
Talent management at TCS:

Tata Consultancy Services (TCS), established in the year 1968, is the largest provider of information technology
(IT) and business process outsourcing (BPO) services in India TCS is an equal-opportunity employer For
knowledge services companies such as TCS, people are their most valuable asset. Talent management teams know
the skills and competencies of all their employees so that they can make more informed decisions in planning,
training and delivery management.
TCS changed its hiring strategy and started focusing on just-in-time hiring or real-time talent management. To
build a quality talent pool,
TCS started a programme called Academic Interface Programme (AIP). Also, various kinds of training
programmes were conducted at TCS: Learning and Development, Initial Learning Programmme, Continuous
Learning Programme, Leadership Development Programme, Foreign Language Initiative, Workplace Learning
and Ignite.
Compensation management system at TCS is based on the economic value added (EVA) model.
TCS conducts appraisal of its regular employees twice in a year, and also at the end of the project in case of
employees hired specifically for various projects. In order to identify its outstanding talent, TCS has been
recognizing the contribution of its people in many ways. .
To maintain data base for bio data, company developed Rsum Information Extractor (RINX), a tool that uses
text-mining, automation, natural language processing, data-mining and information retrieval technologies to
deliver high-quality skill-related information to update the organizations skill repository in real time.
Talent management at cognizant:

Cognizant (NASDAQ: CTSH) is a leading provider of information technology, consulting, and business process
outsourcing services, dedicated to helping the worlds leading companies build stronger businesses. It is
headquartered in Teaneck, New Jersey (U.S.). A paper published at the website of company written by ,James
(Jimmy) Livingston Vice President in Cognizant Business Consulting, guiding strategy and
Arlene DeMita Cognizants Senior Practice Director, offers a prescription for modernizing key talent acquisition
processes, including pre-assessment surveying,
candidate sourcing, candidate assessment, pre-hiring and onboarding. Key elements of paper are:
Talent management comprises three areas: talent acquisition; talent development and deployment; and workforce
engagement and retention. While challenges exist in all three phases, many companies struggle at the very
beginning of the cycle. The paper identifies that companies in order to succeed should leverage solutions based on
social, mobile, analytics and cloud technologies (the SMAC Stack).
Techniques that leading companies are incorporating into their talent acquisition strategies include
Increasing job flexibility,
Leveraging analytics tools to predict staffing needs and validate employment plans
Enabling virtual teams with technology, conducting candidate assessments via video and recruiting where
candidates are located.
Findings:
After doing the thorough study of the literature, we can conclude that Talent Management plays a vital role in the
success of any organization and in a broader perspective we can say that if we want to tap and retain the talent in
company following things must be done.
Ensuring that the talent strategy is clearly aligned with the corporate strategy must be a priority.
Create Highly-Skilled Internal Talent Pools: critical element of a successful talent management program is the
generation of "talent pools" a consistent and talented pool also helps a lot in succession planning.
81
Create a Pay-for-Performance Culture: Companies must try to give rewards and compensation according to the
performance. It will motivate employees to perform to their fullest.
Deploy existing talent more effectively and recruit selectively. Companies must know who their top performers
are.
Develop a plan for technology and process integration.
Define a clear vision for talent management.
Prepare the Workforce for adapting Change.
Branding of Organization is must , create a positive image of organization to attract best talent.
Scarcity of skilled people is also becoming a problem, to handle this train and effectively use the talent available.
Frequently conduct research and try to find out the problem areas in organization.
Limitations of the Study

The research is based on secondary data , hence it just provides with the overview of the practices adopted by the
firms, however these practices may change from organization to organization because of change in size, financial
clout, and different organization structure and Culture.
Implication of the Study

The paper provides managers and academicians with useful guidance on the wider implications on how to
improve the performance at workplace by managing talent.
Conclusion
An organization's talent management strategy and investments must align with broader business goals and
realities. A deep understanding of business issues must include howworkforce can best be managed. Companies
must create the culture and programs that will best engage and motivate talent in organization. Successful
organizations have a deep understanding of their employees and their evolving needs. They use that information to
drive the practice of workforce segmentation and the creation of meaningful employee value propositions that
align with talent management strategy.
Strategic talent management is essential in building the right workforce. HR Managers must have the ability to
rapidly train and retrain employees according to business need, create opportunities for new talent, there are
several benefits of a strategic talent management process. It gives organization a committed workforce, Trained
employees, Lower attrition rate, It helps in improving HR policies of the company.
References:
1.
2.
3.
4.
5.
6.
7.
Talent Management retrieved from .: http://www.wikipedia.

Tim Ringo.,AllanSchweyer.,Michael De Marco.,Ross Jones Eric Lesser. Turning Talent Management
into a competitive advantage: An industry view. retrieved from: http://ibm.com.
Driving Successful HR Leadership: Talent Managements Role in Core Business
Strategy retrieved from : http://www.hr.com
Dr.Usha Tiwari, Devanshi Sharma. Strategies and Practices of talent management and their Impact On
Employee Retention And Effectiveness , The International Journal of Management Vol 2 Issue 4
(October, 2013)
Susan
M.
Heathfield
.,What
is
Talent
Management
actually
retrieved
from:
http://humanresources.about.com.
James (Jimmy) Livingston., Arlene DeMita . SMACking : Talent Acquisition by Future of work
2013retrieved from htttp://www.hr.com .
Dr.John.Suvllivan., Top 10 predictions for 2012 retreived from http://.ere.net.
82
GREEN MARKETING: AN INNOVATIVE RECENT TREND IN MARKETING

RANJEETA NAYAK1
Research Scholar (UGC NET), PG Department of Commerce,
Utkal University, Vani Vihar, Bhubaneswar,
Contact No.-8895171032,
E-mail ID- ranjeetanayak25@gmail.com
Abstract
Growth alone is valueless without the consistent trend of growing. Like this marketing of products for the purpose
of sale only is valueless unless it is for the benefits of the society as a whole. The holistic marketing concept is
based on an integrated approach including sales of products, customers relationship management, protection of
environment, contribution to society etc. In the era of competitive business, the focus is not upon what marketers
do rather the innovative approaches they adopt to do. One of these innovative approaches for marketing is green
marketing. When the whole world is in the run of green-greener-greenest, marketers can give it a boost through
their innovative marketing strategies. This paper highlights the evolution of green marketing along with the
reasons for adoption of the same. Green marketing mix including product, price, place and promotion has been
discussed with the focus upon strategies for green marketing. It also throws some lights upon the green initiatives
by Indian firms. There are several challenges ahead though green marketing has lots of benefits. This paper
makes an attempt to suggest some measures for solving the issues in green marketing.
Key Words: Holistic marketing concept, Green marketing, Customers relationship management, Green-greenergreenest
Introduction
Businesses owe lots of responsibilities to the society as they live in and for the society. Marketers gain lots of
benefits from the society. So, they have some obligations. Understanding these obligations and contributing
towards the protection of environment, green marketing strategy has been evolved as a new step towards
sustainable future growth. Green marketing has emerged as an important concept in India as in other developing
and developed countries. It involves not only production and distribution of green products but also eco-friendly
business actions. Under the production, marketing, consumption and distribution of products and services take
place in such a manner that is less detrimental to the environment.
Relevance Of The Study

Going green has become the focus today as the environment is getting polluted day after day. Government is
taking many steps for the protection of the environment. So, it is the prior responsibility of individuals as well as
business organisations to take initiatives for reduction of harmful impact on the environment. As the focus is on
protection of environment, green marketing can be appreciated as a new approach towards doing business and
marketing products and services. This paper discusses in details about the strategies to be followed under green
marketing and also suggests some measure for solving various problems of green marketing.
Objectives Of The Study

To study the conceptual framework of green marketing
To discuss the green initiatives taken by Indian companies
To analyse the challenges involved in green marketing and suggest some measures for solving the issues
The entire study is based on secondary data from journals, magazines, internet etc. Various green marketing
initiatives have been illustrated of Indian companies only.
The term Green Marketing, although, is widely popular these days but it doesnt have a single accepted
definition. In general, green marketing is concerned with all the activities of an organization that may have shortand the long-term influence on the environment. It is a holistic marketing concept in which production and
marketing of products take place in a manner that is less detrimental to the environment. It not only includes the
development of physical characteristics of products that do not harm the natural environment, but also the
83
processes, promotions, and related claims. Therefore it ensures that the interests of the organization and all its
stakeholders are protected including environment and society at large. Human activities by its very nature are
destructive to the natural environment. So, products making green claims are "less environmental harmful" rather
than "Environmental Friendly.") Thus green marketing should look at minimizing environmental harm, not
necessarily eliminating it. Growth of business with consistent negative impact on environment is the main
objective of green marketing.
The evolution of green marketing took place through three phrases1. Ecological green marketing phrase- during this the focus was on environmental protection. Companies went on
marketing those products which werent harmful for environment.
2. Environmental green marketing phrase-during this focus was on innovation of new and environmental-friendly
products. Companies gave more stress on marketing of environmental-friendly products even though they are less
profitable.
3. Sustainable green marketing phrase- It is the recent trend in marketing, in which marketers are more concerned
about long-term sustainable growth of business through responsible corporate behaviour towards customers,
environment and society at large.
Adoption Of Green Marketing

There are basically five reasons for which a marketer should go for the adoption of green marketing. That are-
1. Opportunities or competitive advantage

In India, around 25% of the consumers prefer environmental-friendly products, and around 28% may be
considered healthy conscious. Therefore, green marketers have diverse and fairly sizeable segments to cater to.
The Surf Excel detergent which saves water (advertised with the message"do bucket paanirozbachana") and the
energy-saving LG consumers durables are examples of green marketing. We also have green buildings which are
efficient in their use of energy, water and construction materials, and which reduce the impact on human health
and the environment through better design, construction, operation, maintenance and waste disposal.
2. Social Responsibility
As corporate get lots of benefits from society, they have certain responsibilities towards the society. Many
companies have started realizing that they must behave in an environment-friendly manner. They believe both in
achieving environmental objectives as well as profit related objectives. The HSBC became the world's first bank
to go carbon-neutral. Other examples include Coca-Cola, which has invested in various recycling activities.
3. Governmental Pressure
When government make rules every business organisations need to follow those. Various regulations are framed
by the government to protect consumers and the society at large. The Indian government too has developed a
framework of legislations to reduce the production of harmful goods and by products. These reduce the industry's
production and consumers' consumption of harmful goods, including those detrimental to the environment; for
example, the ban of plastic bags in Mumbai, prohibition of smoking in public areas, etc.
4. Competitive Pressure
Many companies take up green marketing to maintain their competitive edge. When competitors follow a strategy,
organisations also follow it to sustain in market.
5. Cost Reduction
Reduction of harmful waste may lead to substantial cost savings. Sometimes, many firms develop mutual
relationship whereby the waste generated by one company is used by another as raw materials. For example, the
fly ash generated by thermal power plants, which would otherwise contributed to a gigantic quantum of solid
waste, is used to manufacture fly ash bricks for construction purposes. When attempting to minimize wastes, firms
are forced to examine their production process. These critical experiments result in new and less costly
production process.
Green marketing mix

1. Product
The products have to be developed depending on the needs of the customers who prefer environment friendly
products. It is the first responsibility of marketers to convince customers about the usefulness of green products.
84
Products can be made from recycled materials or from used goods. Green products are typically durable, nontoxic, made from recycled materials, or minimally packaged. Green products are produced using sustainable
source of raw materials, making more durable products; designing products that are repairable, making products
that are safe for disposal. Efficient products not only save water, energy and money, but also reduce harmful
effects on the environment. Green chemistry forms the growing focus of product development. The marketer's role
in product management includes providing product designers with market-driven trends along with green product
attributes such as energy saving, organic, green chemicals, local sourcing, etc.
2. Price
Green pricing takes into consideration the people, planet and profit at a par taking care of the health of employees
and communities, protection of environment. Value can be added to the green products by changing its
appearance, functionality and through customization, etc. Accordingly reasonable prices must be charged which
are suitable both for customers and marketers.
3. Place
Green place is about managing logistics to cut down transportation emissions, thereby reducing the carbon
footprint. Suitable places must be selected where there is easy availability of raw materials from renewable
sources and recycled items for production of green products. Suitable distribution method must also be selected to
reduce negative environmental impact by cutting down harmful transportation emissions. For example, instead of
marketing an imported product in India it can be licensed for local production. This avoids shipping of the product
from far away, thus reducing shipping cost and more importantly, the consequent carbon emission by the ships
and other modes of transport.
4. Promotion
It means educating customers about the use and benefits of green products. It involves initiatives like- educating
consumers about the problems that can be solved by green products, convincing customers regarding the benefits
of green products for protecting health, preserving environment for future generation, Assuring them regarding the
performance of green based products s compared to conventional products.
Strategies For Green Marketing

Know your customers and educate your customers
Green marketers should try to identify customers requirements first. According to the requirements of customers
they should produce environment friendly products. They also need to educate customers about the uses and
benefits of different environment-friendly products.
Develop a marketing strategy with regards to 7 Ps
Green marketers are required to develop a marketing strategy including 7 Ps- Product, Price, Place, Promotion,
People, Planet and Profit. Environmental friendly products should be developed with suitable prices and targeted
market place. Suitable promotion strategies should be developed to educate the customers about the benefits of
green products. Satisfaction of customers needs should be main focus of marketing strategy. With due importance
to environment protection, profit making should be the objective of the strategies.
Implement marketing strategies

After development of marketing strategies focus should be on implementation. Marketers should plan in a proper
manner to implement the strategies formulated regarding product, place, price and promotion as implementation is
the most important aspect of achieving objective.
Marketing Audit (including internal and external situation analysis)
Regular marketing audit should be a part of green marketing strategy. Internal and external situations must be
analysed properly and their impact on marketing performance must be accessed to avoid unfavourable
contingencies.
Being genuine and transparent

Green marketers must be genuine and transparent to their customers providing quality goods at right prices and
following the correct and ethical marketing strategies.
Benefits Of Green Marketing

Enhanced environmental protection
It is the main objective of green marketing to protect the environment. Green marketing helps in reduction of
environment detrimental through the use of environment-friendly products which helps not only in environment
protection but also in consumer health protection.
Efficient use of resources
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Green marketing involves techniques for use of renewable resources, solid waste management, efficient use of byproducts and wastes etc. All these techniques helps in efficient and effective utilisation of resources.
Sustainable future growth
Green marketing results in sustainable future growth of business by indicating responsible corporate behaviour
and by creating a good corporate image.
Enhanced stakeholders satisfaction
Green marketing satisfies not only consumers by providing quality goods but also all the stakeholders including
employees, creditors, suppliers, business partners etc. Employees feel proud and responsible working for an
environment-friendly company. Suppliers, creditors get a sense of satisfaction being part of such a company.
Reduction of cost
Under green marketing, companies focus on producing and distributing products with less energy consumption
which results in cost reduction. Even tie-ups can be made between companies to utilise the wastes of one company
as raw material of other company, which can benefit both companies.
Green Initiatives By Indian Firms

ITC- New range of green products is introduced like multipurpose paper that is less polluting than traditional
papers through the introduction of ozone-treated elemental chlorine free bleaching technology.
Tamil Nadu Newsprint and Papers Limited (TNPL) - TNPL was awarded the Green Business Leadership Award
in the Pulp and Paper Sector 2009-10. Major initiatives undertaken by it includes two Clean Development
Mechanism projects and a wind farm project that helped in 2, 30,323 Carbon Emission Reductions.
State Bank of India- SBI entered into green service known as Green Channel Counter. SBI is providing banking
services which are paper less, no deposit slips, no withdrawal forms, no money transactions forms. All these
transaction are done through SBI shopping & ATM cards.
Oil and Natural Gas Company (ONGC) - Indias largest oil producer, ONGC, is in the list of top 10 green Indian
companies with energy-efficient, green crematoriums that will soon replace the traditional wooden pyre across the
country. ONGCs initiative will save 60 to 70% of wood and a fourth of the burning time per cremation.
HCL- The Company has launched eco-friendly notebooks, HCL ME 40. This notebook is completely free from
polyvinyl chloride (PVC) material and other harmful chemicals.
Tata group of companies-Tata Motors ltd. has developed their showroom by using green items and elements in its
design. It shows eco-friendly atmosphere that attracts people towards itself. They are also going to launch a low
cost water purifier which is made of pure and natural ingredients.
Infosys Technologies Ltd- It has Focused on green buildings, water harvesting and Conservation, better transport
management by encouraging car pool for its employees and increasing bio-diversity in its campuses. It also
Focuses on green engineering. The unit works on new products as well as on refurbishing existing products to
make them more energy efficient.
Wipro- Wipro has 17 e-waste collection centres in India where products are collected and recycled. Also, 12
Wipro campuses in the country have been certified as green buildings. The company has lunched wide range of
eco-friendly desktops. These products aim to cut down e-waste in environment.
ACC Ltd. - India-based cement manufacturer ACC has recently launched its eco-friendly brand, 'Concrete+'. This
brand uses fly ash (a hazardous industrial waste) to help conserve natural resources, thus making it an eco-friendly
product. The new product has been designed exclusively to ensure high durability and resistance of structures
under extreme climate.
MRF Tyres- The premium eco-friendly tubeless tyres MRF ZSLK are made from unique silica-based rubber
compounds and the company promises to offer fuel efficiency for vehicle owners. The tyres had been tested
extensively on Indian road conditions to ensure their efficiency.
Digital tickets by Indian Railways- IRCTC has allowed its customers to carry PNR no. of their E-Tickets on their
laptop and mobiles. Customers do not need to carry the printed version of their ticket anymore. This is an
initiative to go paperless.
Indian Oil Corporation- Indian Oil has invested about Rs. 7,000 crore so far in green fuel projects at its refineries;
ongoing projects account for a further Rs. 5,000 crore. Diesel quality improvement facilities in place at all seven
Indian Oil refineries, several more green fuel projects are under implementation. The R&D Centre of Indian Oil is
engaged in the formulations of eco-friendly biodegradable lube formulations.
Challenges Ahead
Green products require renewable and recyclable material, which is costly even difficult to have.
It requires a technology to develop green products, which requires huge investment in R & D.
Majority of the people are not aware of green products and their uses. So, it creates a promotion expense for the
green marketers.
Majority of the consumers are not willing to pay a premium for green products.
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Marketers need to justify comparative differences.

There is a need for standardisation of rules by government to cover all environmental issues, which is quite
difficult to do.
Suggestions For Improvement Of Green Marketing Practice

Educate the customers
Customers are the king for every business. So, it is the first and foremost duty of green marketers to educate the
customers about the uses and benefits of green products. When customers are convinced about the additional
benefits, they can co-operate with the marketers.
Give an opportunity to the customers to participate
Customers should be given an opportunity to participate in the green marketing initiative by personalising the
environment friendly actions.
Mutual co-operation between marketers

Green marketers are required to co-operate with each other to have mutual benefits. The waste or by-products of
one can be used by other as raw material, which can be an initiative for green marketing along with cost reduction.
Under green marketing initiatives, products can be produced by one and can be marketed by other which will
result in less cost burden on both.
Approach to government for support
Green marketers can approach government for tax relaxation on sales or some subsidies on raw material purchase
or support for research and development expenses etc. This government support will definitely be of great help to
the green marketers.
Consider the pricing
The premium charged for green products should not be very high. Marketers must be very careful while setting
the prices for their products. Price for a product should be reasonable for buyers as well as it should be satisfactory
for the marketers.
Seek for suggestions from environmentalists
Green marketers should try to understand the needs of the buyers first. After this they should direct product
designers for designing appropriate products by seeking suggestions from environmentalists. This will help them
not only in designing appropriate products but also in convincing customers about the quality and performance of
the products.
Conclusion
Growing from time to time business has now reached a stage where the focus is not upon growth only but also
sustainable future development. Green marketing is one of the methods of sustainable future development of
business along with significant contribution towards the society in the form of environment protection. It can
achieve its targets only through the support of all including government, business, customers and public at large.
Reference
Sara, G. Madhumita (2014) GREEN MARKETING COMPANIES URGING TOWARDS GREEN
REVOLUTION, Asia Pacific Journal of Research, Vol.1, issue XIII, pp:132-138
2.
Manjunath. G (2013) GREEN MARKETING AND ITS IMPLEMENTATION IN INDIANBUSINESS
ORGANIZATIONS, Asia Pacific Journal of Marketing and Management Review, Vol. 2(7), pp: 75-86
3.
Mishra Pavan, Sharma Payal (2010) GREEN MARKETING IN INDIA: EMERGING
OPPORTUNITIES AND CHALLENGES, Journal of Engineering, Science and
Management Education, Vol. 3, pp: 9-14
4.
Singh P.B, Pandey, Kamal K. ( 2012) GREEN MARKETING: POLICIES AND PRACTICES FOR
SUSTAINABLE DEVELOPMENT A Journal of Management, Vol. 5, No. 1, PP: 22-30
5.
Shruti P. Maheswari (2014) AWARENESS OF GREEN MARKETING AND ITS INFLUENCE ON
BUYING BEHAVIOR OF CONSUMERS AIMA Journal of Management and Research, Vol. 8, Issue 4
www.greenmarketing.net/stratergic.html
www.google.com
1.
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THE FOURTEEN CHALLENGES THAT EVERY NURSE MANAGER MUST BE

PREPARED TO ADDRESS
PROF. DEEPA M RAJU, KINS,
KIIT University, Bhubaneswar
Abstract:Nursing has always been a physically demanding profession. Today the physical demand is as great as ever with
the added challenge of highly technical and increasingly complex treatment modalities. The nurse is an analyst,
a communicator, a facilitator, a problem solver, a decision maker, and above all a clinical expert and a
manager. Nursing requires a broad theoretical base and a new and ever changing clinical skill set, along with
the ability to integrate theory with clinical practice.
KEYWORDS:-Nurse managers, nursing management, healthcare management, challenges in nursing

management
Introduction:
The Nurse Manager plays an essential role in healthcare. She sets the tone of any Healthcare System. The
Manager is the backbone of the organization. The quality of patient care, as well as staff recruitment and retention
success, rests with this key role.
And yet it is rare that Nurse Managers are given the opportunity to acquire the operational, financial, and
management skills essential to their success and the success of their organization.
Hence, it is important to explore many challenges that the Nurse Manager faces in his/her role.
Following are fourteen challenges that Nurse Managers must be prepared to address:
Challenge 1: The broader context of the healthcare industry and its ongoing crisis
The healthcare industry is in crisis, and the Nurse Manager has to be proactive in dealing with this crisis every
shift, every day. Among the challenges in healthcare, especially in the inpatient arena:
A budget crisis in Medicare and Medicaid which will continue to put pressure on
hospitals to
cut costs.
Overflowing emergency rooms without adequate staff to care for patients awaiting transfer to overcrowded in-patient beds.
In an effort to mollify reductions in reimbursement, physicians join entrepreneurs in launching

specialized, highly profitable start-ups (i.e. outpatient surgical centers, imaging centers, and free
standing treatment facilities) that drain patients and profits away from the hospital, and threaten the nonprofit mission of many hospitals.
A highly litigious society whose members are increasingly skeptical and suspicious of the care they
receive.
For the Nurse Manager, these trends mean that she must continue to provide the highest quality of patient care
despite severe budget pressure to keep costs in line.
While the Nurse Manager cant be expected to achieve miracles, she will be expected now more than ever -- to
run an incredibly efficient, productive, and high-quality unit.
Challenge 2: Changes in nursing and negative perceptions about the profession

The nursing profession has faced enormous strains over the past decade, resulting in the current shortage of nurses
we have today. Nursing as a profession is in crisis, a crisis that Nurse Managers must attempt to mitigate every
day. The long standing perception that Nursing is a rewarding and privileged profession has been diluted in the
last decade, for the following reasons:
Nursing has always been a physically demanding profession. Today the physical demand is as great as ever with
the added challenge of highly technical and increasingly complex treatment modalities. The nurse is an analyst, a
communicator, a facilitator, a problem solver, a decision maker, and above all a clinical expert. Nursing requires
a broad theoretical base and a new and ever changing clinical skill set, along with the ability to integrate theory
with clinical practice. Without the necessary educational preparation and on-going in-service training the nurse
will feel overwhelmed, stressed, and unsupported. And to the Nurse Manager falls the task of assuring that her
staff doesnt lag behind and that high quality patient care is sustained regardless of newly imposed expectations.
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Nursing leadership should work hard at promoting nursing as the rewarding, privileged profession that it is. As a
result, Nurse Managers have a challenging time creating a positive, productive, high-morale climate on their units.
Nursing staff comes to its work already feeling underappreciated and negative. The Nurse Managers have to cope
with these attitudes and create a positive tone.
Challenge 3: Communication issues within the hospital

Hospitals are enormously complex entities. Communication is sometimes less effective than it could be at the top
of the organization, and this problem trickles down to the nursing units. Once again, the Nurse Manager has to
deal with these issues.
At the same time, ups and downs in the organization may hinder smooth communication across it. The Nurse
Managers may experience difficulty getting good information or response from people outside their chain of
command.
It takes a politically-sensitive manager who can build strong alliances and relationships to manage this challenge.
Challenge 4: The variability of resource requirements on the unit

Patient care presents a radically different picture. And it is a radically different picture today than was presented
on nursing units in the past. The complex world of manufacturing looks simple by comparison. There is little
long-term predictability about patient acuity or demand for in-patient beds. Shift-by-shift resource requirements
are often impossible to anticipate accurately, yet require very specific and timely staffing adjustments. The
hospital census may have a one hundred patient census variation from day to day. On one shift a twenty-six bed
nursing unit could have thirteen empty beds, while an influx of patients eight hours later may fill the unit to an
overflow status. The introduction of thirteen additional patients will require four or five additional nurses per shift.
Challenge 5: Making the transition from staff to management

The new Nurse Manager, most often promoted from within, has to make a complicated transition. One day she is
a peer with her colleagues on the nursing unit, seeing them socially, sharing unit stories. The next day she is a
Nurse Manager with entirely new responsibilities and accountability for outcomes on the nursing unit. Major
adjustments are requisite and the learning curve is steep. These adjustments include:
Recognizing, understanding, and dealing with envious staff .
Being scrupulously fair and equitable, regardless of previous relationships, in scheduling time,
allocating holidays.
Demonstrating a commitment to twenty-four hour accountability and availability by regularly visiting

all shifts, giving employees on each shift annual performance appraisals on time, and working closely
with off-shift supervisors to assure that patient care standards are being maintained around the clock.
Doing what it takes to get results, regardless of the start or end of a shift or the assigned tasks.
Challenge 6: 100% responsibility without 100% authority

The success of a Nurse Manager will be measured in large part by her alliances with other departments and her
ability to make things happen in order to move patients seamlessly through the system. Managing unpredictable
variability in all of the areas mentioned is clearly the Nurse Managers responsibility and one of her greatest
challenges.
The new Nurse Manager may be uncomfortable or frustrated when she realizes that she has 100% responsibility
for everything that happens on her unit, without 100% authority. Thats because she has to rely partially on other
departments (e.g. housekeeping, food services, pharmacy, etc.) for her success. The successful seasoned manager
has developed interpersonal skills, interdepartmental relationships, and the skill to apply effective influence, even
lacking formal authority.
Challenge 7: Labor
Nurse Managers have staff members who go to the union with labor relations complaints day after day. The nurse
executive, the union attorney and the hospital attorney may have to be involved.
A Nurse Manager may have to work with a union representative who is inexperienced, has a hidden agenda, or is
trying to prove that she is representing her members well by challenging management. In this case, the manager
needs to collaborate with nursing leadership and human resources to devise a strategy that addresses the issues
being raised, doesnt conflict with the contract, but maintains control in the hands of management.
One of the most sensitive issues that a manager will face is a staff complaint of harassment. The complaint may be
that someone used inappropriate language or displayed a threatening demeanor when tensions were high. Or a
nurse may complain about unwanted attention from a physician or other member of the hospital team. Typically
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the nurse will go to the union representative if the manager is ineffective in assuring the unwarranted and
uninvited behavior will stop. It is essential that the manager sort out the facts and take action if appropriate.
Harassment in the work place can not be tolerated. However damaging accusations must be investigated carefully.
Challenge 8: Staff management, recruitment and retention

Nursing remains primarily a womens profession with less than ten percent male nurses. Unlike twenty or thirty
years ago, women today have many career options and, as they make choices in law, business, industry, medicine,
or whatever, the pool of nurses diminishes. In addition the nursing workforce is aging. Thirty years ago the
average age of the nurse was twenty-four. Today the average age of the nurse is forty-eight. Looking ahead just a
very few years we will be faced with the retirement of numbers of nurses now staffing our hospitals. And the
demand for talented, committed, and well educated nurses has never been greater than it is today. Hospitals are
aggressively competing for registered nurses, particularly those with specialty high tech experience.
As in countless situations the managers ability to build an alliance with staff, convince nurses that she will always
treat them fairly with dignity and respect will have a true impact on her ability to recruit and, as importantly,
retain qualified nursing staff.
The well-prepared manager learns to cope with this crucial challenge. She understands what is needed, remains
resilient, and does what the patient, her staff, and the hospital need. She identifies, recruits, and retains talent for
her organization, while screening out less qualified candidates. And she serves as a positive mentor, role model,
and leader of her staff despite the intricacies of unanswered questions plaguing the healthcare industry and the
nursing profession today.
Challenge 9: Many stakeholders

As noted earlier, the Nurse Manager has to forge alliances with a large number of stakeholders: her own
managers, her staff, unions, physicians, and managers of other departments. Some of these stakeholders are
particularly difficult, demanding, and even abusive.
The successful Nurse Manager builds advocates up, down, and across the organization with or without formal
authority. She learns how to influence people in ways that balance results and relationships, without sidestepping
conflict or being inappropriately assertive.
Challenge 10: Quality

The reason we go into nursing is to provide quality patient care. This mandate becomes harder all the time,
especially given the financial and staffing issues that healthcare organizations are facing.
Nevertheless, the Nurse Managers is the person responsible for maintaining quality on the unit. She must define
what quality means on her unit, set standards for quality, develop consistent processes, eliminate errors, measure
results, and constantly improve performance.
Challenge 11: Budget and financial management

In an inpatient unit, with lives at stake, nothing is purely financial. For this and other reasons, the Nurse Manager
may find it difficult to make balancing the budget a priority:
The Nurse Manager has to work with averages, perhaps going over budget on a particularly high-acuity
day, and then staying under budget on more reasonable days. It can be difficult to see the forest for the
trees in this situation. But the manager who has facts and figures available and confidence in her own
judgment can make this work.
Many Nurse Managers have never received training in building and meeting a budget, or in analyzing
financial reports about their units.
The variability of patient care requirements, as discussed previously, can easily skew the budget
process.
The Nurse Managers budget may depend on factors outside her control, such as assumptions about
average patient acuity or overall demand for beds.
At the end of the day, finances are measurable and specific and leave no doubt about whether a Nurse
Manager is performing or not. To be successful, Nurse Managers must become adept at understanding
and meeting a budget.
Challenge 12: Time management

There are more demands on the Nurse Managers time than there are hours to fill the day. If she is not careful, the
Nurse Manager may become mired in administrative meetings and be away from her unit too much of the day.
Staff will feel neglected, morale will suffer, and outcomes may deteriorate. Physicians also expect to spend quality
time with Nurse Managers, reviewing patient progress and explaining changes in treatment modalities.
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It is up to the Nurse Manager to set priorities for her time and find creative ways to handle both the demands of
her unit and the organization at large. There is also an opportunity for the Nurse Manager group to work together
sharing some of the meeting burden and keeping colleagues, not in attendance, informed and up to date.
Challenge13: The inner game and resilience

In light of all of the above, it makes perfect sense that the Nurse Managers role sometimes seems impossible,
overwhelming, even frightening.
Sometimes the challenges seem insurmountable.
Still successful Nurse Managers are able to bounce back in the face of adversity, take responsibility for their units,
and do what it takes to persevere. They see that the bigger picture is all about caring for the patient, and they make
what can accurately be called a heroic effort to keep moving forward.
Challenge 14: Self-development

The final challenge for the Nurse Manager often gets left behind given all of the immediate fires that need
extinguishing on the unit. This is the challenge of ongoing self-development, career development, and
improvement. Personal and professional development is both a responsibility and a right.
It is too easy for the Nurse Manager to get lost in daily activities and neglect her longer term aspirations and
career path. Nurse Managers should be constantly answering these questions:
What kinds of continuing education will be serve me?
What is the appropriate time line for me to learn what I need to know and advance?
Should I work in a community or academic medical center setting?
Which leaders can I seek out as mentors?
What is my 3-year and 5-year development plan?
Conclusion:The well-prepared nurse manager learns to cope with this crucial challenge. She understands what is needed,
remains resilient, and does what the patient, her staff, and the hospital need. She identifies, recruits, and retains
talent for her organization, while screening out less qualified candidates. And she serves as a positive mentor, role
model, and leader of her staff despite the intricacies of unanswered questions plaguing the healthcare industry and
the nursing profession.
References:Leadership & Nursing Care Management, 5th edition, Elsevier Publication.

Leadership Roles and Management Functions in Nursing, 6 th edition, Lipincott Publication.
Journal of Nursing Administration, September 2003, Volume-33.
Journal of Nursing Management, May 2010, Volume 18.
www.healthcareperformanceinstitute.com
www.google.com
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ROLE OF INFORMATION TECHNOLOGY CORTANA WINDOWS PHONE

MR. DEEPAK RANJAN BISWAL
Lecturer-IPSAR Business School,CDA,Cuttack
E-mail:-deepaka.biswal@gmail.com
Abstract
Windows phone 8.1 and windows 10 mobile cortana will allow users to set how they want to be addressed by the
voice-activated assistant. Cortana can call users by their name or nick names like Master chief after the
function is enabled in the settings.
Microsoft's assistant is based of the character of the same name from Microsoft's Halo video game franchise.
Cortana asks a series of getting-to-know-you, multiple-choice questions, such as, "How do you like to spend your
evenings?" and "What do you read first in the newspaper?" She also asks you for your name and double-checks
her pronunciation. The setup process is a bit long, but once it's complete, Cortana will know who your favorite
contacts are, if you want it to set up reminders, what hours not to bother you, what you're interested in, where you
work versus where you live, and how to present your news. Cortana files all these personal details in its
Notebook. In some cases, you'll receive your results with a computer-generated voice that is, admittedly, a lot less
interesting than Taylor's.
Keywords:Natural language processing capabilities of Cortana are derived from Tellme Networks, Semantic search,
cloud computing resources.
Introduction:
Cortana is your truly personal digital assistant working across all your Windows 10 devices to help you get things
done. Users can interact with Cortana using the most natural input methods for the device they are on. That means
users can either type or speak (provided those inputs are available e.g. speech interaction requires a
microphone).
Cortana/Search is the first place to go for any information. Cortana/Search uses Bing to search the web, and also
search your PC. You can find help, apps, files, settings - so much information in one place. The information in the
Get Started app, content on Windows Online, and additional Instant Answers will be available through
Cortana/Search.
Cortana is Microsofts new digital personal assistant for Windows Phone 8.1 and Windows 10 Mobile.
Cortana referred to as She, was named after her fictional counterpart in the video game series Halo,
takes notes, dictates messages and offers up calendar alerts and reminders.
But her real standout characteristic, and the one Microsoft's betting heavily on, is the ability to strike up
casual conversations with users; what Microsoft calls "chitchat."
Next to Apple's Siri, Cortana is the only other smartphone assistant to come with a baked-in personality.
She has voice search features which are built by creating an interactive Artificial Intelligence (AI) with
human-like qualities.
Cortana has a personality. She has witty responses for certain questions, such as "Who is your father?" to
which she replies, "Technically speaking, that'd be Bill Gates. No big deal.
Displayed as a circle on a phone screen, she's also able to express 16 different emotions.
Cortana was first available for Windows Phone customers. On January 21, Microsoft shared that for the
first time, Cortana will come to PC and tablets later in 2015 with the release of Windows 10, so your
personal assistant is there for you across all your Windows 10 devices.
By learning more about you over time, Cortana becomes increasingly useful every day. She will learn
your preferences, provide quick access to information, and make recommendations personalized for you.
With Windows 10, Cortanas natural language ability helps avoid misunderstandings and lets you interact
easily by talking or typing
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User interface on Windows Phone..
Objectives of the study:
To find out the role of cortana technology in windows and android phone.
To study cortana information technology implementation in modern days .
To under and analysis cortana information technology application in artificial intelligence of advanced
work can be done in a windows operating system.
History behind cortana

Cortana is a fictional artificially intelligent(AI)character in the halo video game series. The origin of cortana is not
explained in the video games, but in the Halo novels. Her first chronological appearance in the story is in Halo:
the fall of reach, a 2001 prequel to the first Halo game.
Cortana is constructed from the cloned brain of Dr. Catherine Elizabeth Halsey, the creater of the SPARTAN
project. According to the halo novels, cortana is classified as a smart AI, meaning that her creative matrix is
allowed to expand, in contrast to the limited matrix of other dump AI characters in the stories.
Application oscortana
Cortana Makes Phone Calls and Places Texts
One of the nice things about virtual personal assistants is that they take the heavy lifting out of simple tasks, like
placing calls and texting. Cortana is no different. When users boot up Cortana, they can simply ask her to call a
person and specify a number. Plus, users can choose to send a text message and dictate exactly what it should say.
It's a convenient feature for the busy professional.
It's a Personal Assistant in the Purest Sense

One of the core elements of any personal assistant app is calendar integration. And Cortana includes several
features on that front, including the ability to quickly add events to a calendar, as well as change times by saying,
for example, "change my 3 p.m. event to 4." In addition, Cortana can be asked what's up next or what's going on
during the weekend and will automatically share details on future appointments, if set to do so.
Cortana Keeps Track of You

Cortana does a good job at keeping track of users. As users employ Cortana over time, she learns habits and
provides all kinds of useful information. For instance, she may remind users to perform a task or immediately
take action based on where the person is. Cortana is supposed to be the "smart" virtual personal assistant that tends
to get smarter over time.
Cortana Knows Who's Important to You

One of the core features built into Cortana is "Inner Circle." The feature allows users to input the names and
information of people who are important to them, giving them special privileges. So, for instance, users who don't
want to be disturbed can tell Cortana to turn off all calls and texts. But people within the Inner Circle may still be
allowed to get through. Inner Circle is a great way to weed out those who may not require the same level of
attention as friends and family.
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Look for All Kinds of Useful Suggestions

One of the nice things about Cortana is that she comes with useful suggestions like info about traffic and weather.
So, if a person needs to get to an appointment, Cortana can automatically seek out traffic information to see
whether the standard route is really best. Cortana may also provide some suggestions on places to go around town.
Cortana Works With Bluetooth-Equipped Vehicles

Cortana can be a handy in-car personal assistant. Once the handset is paired with a Bluetooth-enabled car, users
can talk to Cortana through the vehicle, asking for directions, information on traffic and more. All of the features
built into Cortana are immediately switched to hands-free in a car so users won't need to press a button or even
interact with their phones to get the app up and running.
Bing Plays a Central Role

At the center of the Cortana experience is Microsoft's Bing search platform. If a user asks for information on a
particular topic that requires some Web help, Cortana typically goes out to Bing to find an answer.
Reminders that Travel with You:

Set a location-based reminder on one device and have it pop up on your smart phone when you arrive at the
location. This time of year means keeping track of holiday gift lists and to-dos.You can set a reminder on your PC
to pick up a bottle of wine the next time you are near the grocery store and Cortana will remind you on your
phone the next time you are at that location.
Never Miss a Phone Call:

In a meeting and cant answer your phone? With the Cortana app, get a missed call alert on your Windows 10 PC
and let Cortana send a text back letting them know youll call them later all without leaving your PC.*
Convenient Tracking:
This holiday season, youll be able to track flights, packages and more using Cortana on both your phone and your
PC, and get the updates on the device that youre on so you dont miss a thing. Of course, the Cortana app comes
with the same intelligence as Cortana on your PC,with the ability to look up information and give helpful
suggestions. The information stored in Cortanas Notebook on your PC such as interests, weather and more, will
travel with you across devices and any changes you make on one will be reflected on your other devices.
While the Cortana app is fully-featured, there are some things Cortana can do on Windows phones that arent
currently possible with iOS or Android*. This includes toggling settings or opening apps, and the ability to invoke
Cortana hands-free by saying Hey Cortana. The Phone Companion app on your Windows 10 PC will help you
install the Cortana app from the Google Play or Apple App Store onto your phone so youll be able to take the
intelligence of Cortana with you, wherever you go.
In addition, as a result of our close partnership with Cyanogen, we created a more integrated experience to enable
Cortanas voice activation Hey Cortana on Cyanogen devices so you can call on her while on any screen or
when youre immersed in an app. The custom integration includes the ability to ask Cortana to toggle network
modes, power down your phone, and turn on Quiet Mode amongst other features. With Quiet Mode enabled, all
notifications, calls and alarms will be silenced.
SPEECH RECOGNITION!
->
->
->
->
->
->
speech recognition- YOUR APP

voice commands-TEXT-TO-SPEECH
(tts)-SPEECH RECOGNITION
natural interaction with your application
grammar-based
requires internet connection
1,1,1Background scrolling
Ever notice how when you however your mouse cursor over a window and try and scroll, you still cant, because
the window wasnt active? Turn this feature on in Settings | Devices | Mouse and Touchpad and youll be able to
do just that.
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1.1.2.Keyboard shortcuts
Here are some keyboard shortcuts you may want to be aware of ones that will really help your daily workflow:
Windows Key-Tab (Task View)
Windows Key-Right-Up (Moves app to top right quadrant)
Windows Key-Ctrl-Left or Right (virtual desktop)
Windows Key-Ctrl-D (new virtual desktop)
Windows Key-Ctrl-C (Cortana listening)
Windows Key-S (Daily Glance for weather, news, sports)
Windows Key-Ctrl-F4 (closes virtual desktop)
Some major advantages.
Differentiates your apps with voice commands

Delights you with natural interactions
Increases user engagement
Increases productivity
Increases discovery
1.1.3 Conclusion
Windows is a huge improvement on Phone 8.1 version. It fixes nearly every problem we had with the previous
operating system and finally makes Windows Phones almost as easy to use as IOS and Android devices. Cortana
and the Windows Phone is a huge range of improved on-board apps and a greater focus on personal customisation,
this is the best version of Microsoft's mobile OS .
References
1.
2.
3.
4.
5.
6.
7.
8.
9.
Google now:- A guide to worlds most powerful personal digital assistant by Darren nelson(Jan
31, 2014).
Foundations of statistical natural language processing by Christopher D. manning and
HinrichSchutze(June 18, 1999).
AI agents in virtual reality worlds, J. wiley 1996 (c++ framework for AI in games).
The software society cultural and economic impact by William meisel.
Karan, Rekhi (June 26, 2015). "What programming language(s) was/were used to program
Microsoft's personal assistant Cortana?".Quora. Retrieved June 26, 2015.
Callaham, John (December 9, 2015). "Microsoft's Cortana digital assistant officially launches
on Android and iPhone". Windows Central. Retrieved December 9, 2015.
Foley, Mary Jo (March 4, 2014). "Microsoft's 'Cortana' alternative to Siri makes a video
debut". ZDNet.
Martin, Julia (October 30, 2014). "Microsoft brings Cortana to wrists with $199 Microsoft
Band". Inferse.
Griffiths, Sarah (October 30, 2014). "Microsoft joins the world of wearables: New Band
monitors your fitness levels and sleep quality for $199". Daily Mail.
95
A STUDY ON FINANCIAL PERFORMANCE OF CENTRAL CO-OPERATIVE

SOCITY: A CASE STUDY
DR BIMALENDUBAL
Abstract
Angul United Central Cooperative Bank operates in the district of Angul and Dhenkanal having its head office at
Angul Town. The main function of the Bank being is to provide loan to farmers for agriculture and small scale
industries. The financial performance of the bank during the period of post liberalization, is the focus of this
study The base area being on the deposit mobilization, borrowing and loans and advances. From 1991-92 to
2008-09 the deposits and borrowings of the bank has shown a tremendous growth i.e. almost 25 times with
compounding growth rate of 20% P.A. In respect of Loans and advances made by the Bank during the period of
post liberalization study shows also an encouraging picture for the bank. The compounding growth rate is also
more less equal to the growth rate of deposits. Similarly attempts have also been made to study ratio of loan
advance to deposit mobilization of the bank.
AUCCB Ltd. -A Brief history

The Angul United Central Cooperative Bank Ltd., Angul came into existence on
8th October 1956. Prior to the set two Central Cooperative Banks namely Athmallik Central Co-operative Bank
and Angul Central Co-operative Bank were functioning in undivided Dhenkanal District. As per there
commendation All India Rural Credit Survey Committee boththeBankswere merged and the Angul United Central
Cooperative Bank Ltd. Came into existence with its Head Office at Angul. The Bank has spread its network to 16
Blocks through 17Branches .
The Bank has completed 55 years of its functioning by 2011 and from its inception it has been making sincere
attempt and striving hard to fulfil its objective. The Bank has made all out effort to cater the needs of members
and for socioeconomic upliftment of agriculturist, labourers, artisans, weavers, etc. Through its primary societies
by providing loans and advances and tapping of deposits. It plays a vital role in augmentationoffundskeeping
close liaison with State Cooperative Bank, State Government and Central Government and takes effective
measures for implementation of various scheme formulated by the State and Central Government from time to
time. The Bank also provides financial assistance by way of consumer durable loans, SRTO loans, cash credit,
non-agricultural loans through salary earners SGSY, group finance, SHG finance etc. To increase the thrift habit
of the member as well as non-member, the bank undertakes deposit mobilization scheme by approaching the
deposit or sat their doorstep through relationship marketing.
Financial Performance of Ccbs In Odisha

Performance and financial position of bank is judged from its deposits and borrowings. More the public
confidence on the bank more will be the inflow of public deposits. When bank decides to advance more, it has to
borrow from other sources along with deposits to match the advances. During the period of 10years from 19992000,itis seen there is a record of increasing in these two areas.
96
In the year 1999-2000, the borrowings of the banks was`62837.19 lakhs and has gone upto`153555.84 lakhs in the
year2005-06, with an increase of 2.5 times
Table -1
BORROWINGS, DEPOSITSAND WORKINGCAPITALOFCCBSIN ODISHA
DURING1999-00 TO 2008-09
Year
Borrowing
Deposits
Working Capital
(ìnlakhs)
(ìnlakhs)
(ìnlakhs)
1999-2000
62837.19
95,511.00
186751.00
2000-2001
65842.32
118,838.00
219,447.00
2001-2002
73347.7
140,368.00
255,665.00
2002-2003
80693.23
156,925.54
289,744.01
2003-2004
89819.13
174,714.00
325,584.00
2004-2005
107999.98
183,315.28
357,752.72
2005-2006
153555.84
194,034.53
424,159.88
2006-2007
166172.58
205,122.56
4,60,434.75
2007-2008
157159.82
243,781.58
495,010.40
2008-2009
146971
294,951.00
546,536.00
Total
1104398.79
1807561.49
356,1084.96
Mean
110439.88
180756.14
356108.49
Source: Compiled from annual report of O.S.C.B and C.C.Bs in Orissa.(1999-00to2008-09)

In the subsequent year i.e.2006-07 the borrowings was the highest which is 1,66,172.58 lakhs. In the year 200809, it is seen that borrowing has decreased marginally and has come down to`146971 lakhs. The total borrowing
of the banks during the ten year period is`1,10,439.8 lakhs. On the other hand, the deposit position of banks gives
a different picture. The deposit of the banks was`1,18,838 lakhs during 2000-01 and resulted a sharp increase by
nearly 23,000 lakhs which is 24% of the year 1999-2000. In subsequent years the deposit position also improved.
In the year 2004-05 i.e. after 5 year, the deposits position simply becomes double. In the year 2008-09, it
becomes`2,94,951 lakhs which is almost thrice of the deposits during the year 1999- 2000. The mean deposits
during this period of 10 years is calculated to be`1,80,756 lakhs.
From the table it is clear that the working capital of the bank shows arising trend. With increase in deposit,
borrowing and also loan and advance, there will be pressure of working capital. Work capital is the life of an
organization. When business of bank goes on increasing, there will be requirement of more working capital. The
same thing is seen in case of CCBs. In the year 1999-2000, the working capital was `1,86,751 lakhs and it has
gone upto `2,19,447 lakhs in the very next year, thus by recording an increase over `33 thousand lakhs. Again in
the year 2005-06 it goes upto `424,159.88 lakhs. This amount is 2.5 times of the working capital of the year 19992000. Maximum amount of working capital is seen in the year 2008-09 which is `5,46,536 lakhs. Average
working capital for the period is worked out to be`3,56,108 lakhs.
97
Demand, Collection And Overdue Of Ccbs

No doubt the deposit mobilization and advancing of loan are the primary functions of a District Central Cooperative Bank, but at the same time demand and its collection of overdue can not be neglected. The loan
advanced by the bank if not collected in time results in overdue and in turn may become, non-performing asset
(NPA).
Table-2
DEMAND, COLLECTION AND OVERDUE OF LOANS AND ADVANCES
Year
Demand
Collection
Overdue
Collection
Amount
Amount
Amount
(ìnlakhs)
(ìnlakhs)
(ìnlakhs)
1999-2000
68,027.00
33,940.00
34,087.00
49.89
2000-2001
121,633.00
610,516.00
61,117.00
79.30
49.75
2001-2002
13,072.00
63,837.00
59,235.00
-3.08
51.87
2002-2003
106,103.83
51,704.88
54,398.95
-8.16
48.73
2003-2004
164, 498.00
98,444.00
66,504.00
22.25
59.68
2004-2005
159,728.34
104,256.87
55,471.47
-16.59
65.27
2005-2006
197,119.38
137,098.19
60,021.19
8.20
69.55
2006-2007
230,777.11
152,986.81
77,790.30
29.60
66.29
2007-2008
288,306.19
163,567.40
124,738.79
60.35
56.73
2008-2009
301,450.00
204,037.00
97,413.00
-21.91
67.69
Total
1,761.164.85
1,070,388.15
690,776.70
149.96
585.46
Mean
176,116.49
107,038.82
69,077.67
15.00
58.55
Growth
as
%to
demand
Source: Compiled from Annual report of OSCB and CCBs in Odisha.

The more the NPA, the more will be the loss to the bank which may create a situation of closure of the
business.Table-2 portrays the data of demand, collection, overdue and its collection of all DCCBs in the state of
Odisha from 1999-2000to 2008-09.The table also states that the percentage of collection to demand varies from
48.73to69.55. The lowest percentage of recovery is marked in the year 2002-03 while the maximum recovery
percentage is seen in the concluding year of study i.e. 2008-09. The average percent of collection is worked out to
be 58.55, meaning thereby that 41.45 percentage of the demand have not been collected by the DCCBs. The
situation has improved from 2004-05 barring the year 2007-08. The table also reveals that as demand increases,
collection also increases but the increase in collection is not proportionateto the increase in demand.
Growth of deposits and Borrowings Of The Bank

The third phase of our analysis covers the period from the year1991-92 to 2008-09. During this period, both the
deposits and borrowings have increased at an alarming speed. In the year 1991-92, the deposit status was`844.14
lakh and the nin each and every year, it increased in an eyecatching manner. In the year1993-94, it
became`1522.84 i.e. about 100% more in comparison to 1991-92. In the year 1996-97, it became 3539.13 lakh
i.e. four times of the deposits of 1991-92.
98
Table-3
GROWTH OF DEPOSITS AND BORROWINGS DURING POST-LIBERALIZATION
PERIOD
Deposits
Borrowing
Total
Trend
(ìnlakhs)
(ìnlakhs)
(ìnlakhs)
1991-1992
844.14
610.48
1454.62
100
1992-1993
1141.19
683.04
1824.23
125.45
1993-1994
1522.84
760.05
2282.89
156.95
1994-1995
2118.90
925.59
3044.49
209.42
1995-1996
2687.70
1048.48
3736.18
256.95
1996-1997
3539.13
1304.53
4843.66
333.15
1997-1998
4528.60
1952.70
6481.3
308.25
1998-1999
5682.12
2387.41
8069.53
554.95
1999-2000
7517.33
2925.83
10443.16
718.23
2000-2001
9453.82
2814.00
12267.82
843.74
2001-2002
11184.03
3688.68
14872.71
1022.90
2002-2003
11596.84
5288.52
16885.36
1161.35
2003-2004
13480.70
7184.20
20664.90
1421.25
2004-2005
14698.44
8923.69
23622.13
1624.62
2005-2006
16448.20
10826.98
27275.18
1875.86
2006-2007
18485.05
10232.45
28717.50
1975.03
2007-2008
19729.40
10880.12
30609.52
2105.16
2008-2009
24934.21
11894.52
36828.73
2532.87
9310.61
4685.06
13995.67
962.56
Average
CGR
19.67
Source-Annual reportsofAngul United CentralCo-operativeBankLtd.
Year
Growth
25.45
25.11
33.44
22.69
29.66
-7.47
80.03
29.42
17.48
21.23
13.53
22.38
14.31
15.46
5.29
6.59
20.32
The amount of deposits continuously increased and reached `24934.21 lakhs during 2008-09 i.e. almost thirty
times in comparison to the 1991-92. In the beginning of the third phase of our analysis, borrowings was`610.48
lakhs and within five years it touched the figure `1304.53 lakhs, that was double the amount of the year 1991-92
and it continuously ncreased till 2008-09 except a marginal fall during 20062007. In the year 2008-09, it
was`11894.52 lakhs that was twenty times more than the amount of 1991-92. Growth rate of both deposits and
borrowings has been steady and uniform. In the year 1997-98, a negative growth is marked but after that it again
increased in the same manner as it was increasing. The annualized compounding growth rate was marked out to
be19.67% which was double as compared to the second phase of our study.
Ratio of borrowings To deposits During postLiberalization Period

In last phase of our analysis, there was something interesting thing which happened. Particularly in this phase i.e.
from the year 1991-92 to 2008-09, deposits increased so fast, which was not seen in previous two phases of our
analysis. In the year 1991-92, it was`844.14 lakhs; it touched `24934.2 1lakhs which happened within seventeen
years. Ultimately it showed that bank became trust worthy among the people daybyday, by which deposits came
to such a state. Average of deposits also showed a better picture which was`9440.06 lakhs. Average of deposits
was near about twelve times from the starting year (1991-92) of this phase of our analysis. Simultaneously,
borrowings increased but not in same manner as deposits. It was`610.48 lakhs in 1991-92 and`11894.52 lakhs in
2008-09.It increased in a constant manner. Average of borrowings was`4685.06 lakhs, which was almost nine
times more than second phase of average borrowings. It gave a bad remark as far as bank is concerned.
99
Table-4
RATIO OF BORROWINGS TO DEPOSITS DURING POST-LIBERALIZATION
PERIOD
Year
Borrowings(ìnlakhs)
Deposits(ìnlakhs)
Ratio
1991-1992
610.48
844.14
0.72
1992-1993
683.04
1141.19
0.60
1993-1994
760.05
1522.84
0.50
1994-1995
925.59
2118.90
0.44
1995-1996
1048.48
2687.70
0.39
1996-1997
1304.53
3539.13
0.37
1997-1998
1952.70
4528.60
0.43
1998-1999
2387.41
5682.12
0.42
1999-2000
2925.83
7517.33
0.39
2000-2001
2814.00
9453.82
0.30
2001-2002
3688.68
11184.03
0.33
2002-2003
5288.52
11596.84
0.46
2003-2004
7184.20
13480.70
0.53
2004-2005
8923.69
14698.44
0.61
2005-2006
10826.98
16448.20
0.65
2006-2007
10232.45
18485.05
0.55
2007-2008
10880.12
19729.40
0.55
2008-2009
11894.52
24934.21
0.48
Average
4685.06
9440.06
0.48
COR
0.97
Source Annual reportsofAngul United CentralCo-operativeBank ltd.

Ratio between deposits and borrowings in each and every year was less than one. Ratio between these two was
also not constant in this phase, initially it decreased then increased. In all phases of our analysis, bank more or less
depends on borrowings but in these phase, the bank status was something different as deposits were double the
borrowings.
Toreachina conclusion we made a correlation analysis and it was 0.97and also a positive one. It means they are
positively correlated.
Ratio Of cash and bank balance To Deposits During Post-Liberalization period
100
The figure of cash and bank balance along with the amount of deposits outstanding of the AUCCB during the
post-liberalization period are presented in Table-5 here under. A glance at the cash and bank balance column
indicates that the cash and bank balance of the bank was `99.38 lakhs during 1991-92 and `1,716.27 lakhs during
the concluding year of the study. It is interesting to note that the cash and bank balance of the bank under study
has increased substantially during the concluding three years of study. The amount of deposits outstanding of the
bank has gone upto `24,934.32 lakhs during 2008-09 from`844.14 lakhs during 1991-92 and has recorded an
increase of 29.5 times.
Table-5
RATIO OF CASH AND BANK BALANCE TO DEPOSITS DURING POSTLIBERALIZATION PERIOD
Cashand Bank Balance
Year
(ìnlakhs)
Deposits Outstanding
(ìnlakhs)
Ratio
1991-1992
99.38
844.14
0.12
1992-1993
118.97
1141.19
0.10
1993-1994
188.77
1521.84
0.12
1994-1995
200.09
2118.9
0.09
1995-1996
366.55
2687.7
0.14
1996-1997
259.94
3539.13
0.07
1997-1998
389.42
4528.6
0.09
1998-1999
454.59
5682.12
0.08
1999-2000
477.91
7517.33
0.06
2000-2001
495.03
9453.82
0.05
2001-2002
791.48
11184.03
0.07
2002-2003
684.23
11596.84
0.06
2003-2004
722.81
13480.7
0.05
2004-2005
804.87
14698.44
0.05
2005-2006
666.12
16448.2
0.04
2006-2007
1132.92
18485.07
0.06
2007-2008
1375.51
19729.4
0.07
2008-2009
1716.27
24934.32
0.07
Average
608.06
9440.06
0.08
COR
0.96
Source-Annual reports of Angul United CentralCo-operativeBankLtd.

The ratio of cash and bank balance to deposits tells a different story. This ratio varies from 0.04 to 0.14, the
average being 0.08. Thus, we may assume that the bank has kept only 8% of the amount of deposits outstanding in
liquid form, thus utilizing the deposits in productive manner. The co-efficient of correlation between cash balance
101
and deposits is found to be 0.96. The relationship of cash and bank balance with deposits during the three periods
covered under study are presented below in summaryform.
Growth of loans and advances During Post-Liberalization Period

The data relating to loans and advances given during post-liberalization period(1991-92 to 2008-09) has
been presented in TableNo-6.
TREND AND GROWTH OF

LIBERALIZATION PERIOD
Year
Table-6
LOAN AND
Loans andAdvances
(ìnlakhs)
ADVANCES
DURING
Trend
Growth
1991-1992
605.59
100
1992-1993
604.22
99.67
-0.33
1993-1994
1044.18
172.28
72.85
1994-1995
1669.93
275.58
59.96
1995-1996
2200.10
363.04
31.74
1996-1997
2645.32
436.47
20.23
1997-1998
3343.02
551.65
26.39
1998-1999
5049.23
833.17
51.03
1999-2000
6061.45
1000.17
20.04
2000-2001
5689.00
938.78
-6.14
2001-2002
6996.74
1154.62
22.99
2002-2003
6837.47
1128.22
-2.29
2003-2004
13117.08
2164.52
91.85
2004-2005
19438.03
3207.59
48.19
2005-2006
21575.14
3560.23
10.99
2006-2007
21382.12
3528.38
-0.89
2007-2008
16822.00
2775.91
-21.33
2008-2009
14351.50
2368.15
-14.69
Average
8301.7
CGR
19.22
POST-
Source Annual reports of Angul United CentralCo-operativeBankLtd.

A perusal of the data shows that the amount of loans and advance has gone upto `14,351.50 lakhs during 2008-09
from`605.59 lakhs during 1991-92 thereby recording a 23 fold rise. But the increase is not uniform. The maximum
growth rate is observed in the year 2003-04 while negative growth rate is found in six year. It is interesting to note
that the growth rate of loans and advances is negative during the concluding three years of the study. The annual
compounding growth rate of loan and advances is found to be 19.22.
102
Ratio of Loan and Advances To Deposits And Borrowings To During Post- Liberalization
Period
In the last phase of our analysis from the year1991-92 to 2008-09 both deposits and borrowings was increasing
year after year. In theyear 1991-92 deposits were `844.14 lakhs and in the year 2000-01 it amounted to `9453.82
lakhs that is almost more than 11 times. In the 2008-09 the deposits became `24934.30 lakhs i.e. near about 30
times of the amount of year 1991-92 deposits. Average of deposits was `9310.61 lakhs which is 3.5 times (approx)
more than the average of previous phase analysis.
Table-7
Ratio Loan And Advances To Deposits and Borrowings During Post-Liberalization
Period
Year
Deposits
(ìnlakhs)
Borrowing
(ìnlakhs)
Total
(ìnlakhs)
Loans and
Advances
(ìnlakhs)
Ratio
1991-1992
844.14
610.48
1454.62
1052.86
0.72
1992-1993
1141.19
683.04
1824.23
1162.39
0.64
1993-1994
1521.84
760.05
2282.89
1430.05
0.63
1994-1995
2118.90
925.59
3044.49
2005.91
0.66
1995-1996
2687.70
1048.48
3736.18
2364.55
0.63
1996-1997
3539.13
1304.53
4843.66
3207.74
0.66
1997-1998
4528.60
1952.70
6481.3
4581.12
1.02
1998-1999
5682.12
2387.41
8069.53
5953.04
0.74
1999-2000
7517.33
2925.83
10443.16
7850.84
0.75
2000-2001
9453.82
2814.00
12267.82
9024.54
0.74
2001-2002
11184.03
3688.68
14872.71
9639.13
0.65
2002-2003
11596.84
5288.52
16885.36
12092.02
0.72
2003-2004
13480.70
7184.20
20664.90
14771.59
0.71
2004-2005
14698.44
8923.69
23622.13
19174.88
0.81
2005-2006
16448.20
10826.98
27275.18
23335.22
0.86
2006-2007
18485.07
10231.66
28717.50
26037.33
0.91
2007-2008
19729.40
10880.12
30609.52
25963.49
0.85
2008-2009
24934.30
11894.49
36828.73
24774.23
0.67
9310.61
4685.06
13995.67
10801.17
0.74
Average
Source Annual reports of Angul United Central Co-operative Bank ltd.
Borrowing was in 1991-92 `610.48 lakhs, it becomes`2814.00 lakhs in the year 2000-01 i.e. more than
four times than the borrowing of the year 1991-92 and it reached to `11894.49 lakhs just within 18 years, which is
more than 19 times of the amount of borrowing of 1991-92. Average borrowing is `4685.06 lakhs which is a
significant figure in comparison to pervious phase of our analysis. Total of both deposits and borrowings shows
the same result as they show individually and average total of both was `13995.67 lakhs, which is more than 17
times of average of deposits and borrowings of previous phase of analysis. Loan outstanding has increased in a
103
constant manner. It is `1052.86 lakhs in the year 1991-92 and it becomes 24774 in the year 2008-09. Average of
loan outstanding is 10801.17, which shows a better result.
Growth Of Business Per Branch And Per Employee During Post Liberalization
Period
Business per branch as well as per employee during the post-liberalization period cover a period of 18
years since 1991-92 (Table-8). During the period of post liberalization, per branch business increased significantly
i.e. from `91.64 lakh in the year 1991-92 to `2924 lakh in the year 2008-09 thereby recording an increase of
almost 32 times over1991-92. So during this period, bank has done more business as compared to theprevious two
periods.
Table-8
BUSINESS PER BRANCH AND PER EMPLOYEE BUSINESS DURING POSTLIBERALIZATION PERIOD
Year
Businessperbranch
(ìnlakhs)
Businessperemployee
(ìnlakhs)
1991-1992
91.64
9.62
1992-1993
115.18
12.45
1993-1994
147.60
16.13
1994-1995
208.24
22.66
1995-1996
232.61
28.06
1996-1997
235.34
38.12
1997-1998
455.49
53.27
1998-1999
446.40
68.85
1999-2000
608.85
91.49
2000-2001
1016.65
86.34
2001-2002
1156.84
129.34
2002-2003
1316.04
153.82
2003-2004
1661.90
187.10
2004-2005
1992.55
236.88
2005-2006
2340.20
296.89
2006-2007
2618.96
347.83
2007-2008
2687.82
368.49
2008-2009
2924
432.24
Average
1125.35
143.31
COR
0.99
Source-Annual reports of Angul United Central Co-operative Bank

So far as per employee business is concerned, the situation is also similar. In 1991-92, per employee business is
found to be `9.62 lakhs and 2001-02 it became `129.34 lakhs i.e. almost 13 times more and 2008-09, it is found to
be `432.24 lakh which is almost 45 times over1991-92. The average per branch business is calculated as `1125.35
lakh while average of per employee business to be `143.31 lakh. The co-efficient of correlation of these two
variables is found as 0.99 which suggests that these two variables are highly positively correlated.
104
Conclusion:
Deposits mobilization is regarded as the main source of finance of a bank to advance loan to the
borrowers. In case of CCBs of Odisha, deposit mobilization has shown an increasing trend. Similarly if loan and
advance of the bank do not match to its deposit, then there will be idle resources in the bank leading to loss. There
is also increase in the loan and advance by CCBs of Odisha. In case of the Angul United Central Cooperative
Bank the deposit mobilization and borrowing during the period of 1991-92 to 2008-09 shows a very encouraging
position. In the year 1991-92, its position was Rs. 1454.62 lakhs and in the year 2008-09 it has gone up to Rs.
36828.73 lakhs which is around 25 times and with a compounding growth rate of 19.67%. During that period the
loans and advances has shown the increase rate of 24 times with compounding growth rate of 19.22%. That shows
that both deposits mobilization and loans and advance has grown significantly to the benefit of the bank.
The ratio of loans and advances to the deposits mobilization during the period on average remains 75%.
If bank maintains 25% margin on deposits. From the above analysis it can be safely concluded that
performance of the bank is satisfactory.
105
INTERNET - THE BIGGEST THREAT TO HUMANITY

SAYED IZHARUL HASNAIN
Lecturer : IPSAR College, CDA, Cuttack
Mobile 9337455231 :
email izharul2004@gmail.com
Abstract
Technology doesnt make men rather men make technology. How many of us can actually remember the last time
we went to the library in search of a book to do a particular assignment? Or the last time we had to pick up
a newspaper to refer to some news? Or had to buy a Rs.2 postal stamp to send a letter to a near or dear one?
Frankly speaking I do not remember any such incident at least in the past decade or so and expect the same from
you people also.
Since the last 20 years India has seen a tremendous amount of change or should I say advancement on the
technological front, but is it a boon or a bane? Internet offers many advantages. It has made our lives easier and
one can do anything and everything by sitting at home and not moving at all. The question about internet being a
boon or a bane can be answered in different ways by different people depending on the use they imply these
technologies to. Nuclear energy though considered to be destructive can easily be put to a constructive use; same
is the case with internet. But as far as technology being related to the laziness of people is concerned, it is, to a
very large extent, true. People today do not have any reason to come out of their houses or even their beds
because every single thing is available at their finger tips.
It also makes people vulnerable to lots of threats like cyber crimes, Dark web and artificial intelligence. In the
article we will analyze how internet can negatively impact the economy and lives of common people.
Key words technological advancement, Internet, Cyber Crimes, Dark web, Artificial intelligence.
Introduction
One of the biggest innovations in the modern world is the internet. Internet has changed many things. The web has
democratised information and learning, brought families and loved ones together as well as helped businesses
connect and compete in a global economy.
But the internet has a dark side - it hosts underhand dealings, has its very own criminal underbelly, not to mention
a rising mob culture.
The threat such technological advances pose to society is so serious that universities and government agencies are
forming research groups for studying the existential risks.
The Centre for the Study of Existential Risk (CSER) project has been set up in Cambridge to monitor artificial
intelligence and technological advances. The web was cited as a catalyst in the Egyptian coup in 2011, for
example, while global cyber attacks have the potential to bring down governments
Different other projects have also started to study threats posed by technological advances, artificial intelligence,
biotechnology, nanotechnology and climate change.
Modern science is well-acquainted with the idea of natural risks, such as asteroid impacts or extreme volcanic
events, that might threaten our species as a whole, explained Mr Price.
It is also a familiar idea that we ourselves may threaten our own existence, as a consequence of our technology
and science.
How the Internet Could Threaten Life

1. Political uprising:
The web has been cited as a catalyst for recent government coups and it has the potential to lead to uprisings
around the globe.
2. Cyber attacks:
Attacks on the infrastructure of governments and global businesses could bring chaos to countries and economies.
This in turn could lead to poverty and famine.
106
3. Control and propaganda:

Researchers from the Cambridge Centre for the Study of Existential Risk claim that the capabilities of advanced
technology place control in dangerously few human hands'.
If governments, or even criminals, wanted to, they could control their citizens by restricting information.
4. Dark web:
Criminals and terrorists operate on the so-called Deep Web, and this could lead to global wars, spread of terrorism
and crime, and could culminate in World War III.
5. Artificial Intelligence:
The rise of the web and internet capabilities has also made the prospect of Artificial Intelligence much more
prominent.
Success in creating AI would be the biggest event in human history.
Unfortunately, it might also be the last, unless we learn how to avoid the risks.
Such home-grown existential risk - the threat of global nuclear war, and of possible extreme effects of
anthropogenic climate change - has been with us for several decades.
However, it is a comparatively new idea that developing technologies might lead - perhaps accidentally, and
perhaps very rapidly, once a certain point is reached - to direct, extinction-level threats to our species.
The researchers explain that the capabilities of advanced technology place control in dangerously few human
hands'.
During the 2011 Egyptian revolution, many people took to Facebook and Twitter to spread the word and discuss
the coup.
A number of people were reportedly recruited to join the movement online.
The president was then removed by a coalition, led by the Egyptian army chief General Abdel Fattah el-Sisi.
File photo of protest in Egypt
107
In October 2010, Malcolm Gladwell wrote that activism has changed with the introduction of social media,
because it is now easier for the powerless to collaborate, coordinate and give voice to their concerns.
And although the internet didnt directly bring down the countrys government, it was cited as being a major
contributor and catalyst for the action.
If this was seen on a global scale, it has the potential to bring down governments, infrastructure and challenge life
as we know it.
Online cyber attacks could also put global infrastructure under threat.
The costs associated with cyber attacks are increasing as the volume of data stolen rises, and the attacks
themselves become more destructive.
Businesses that suffer a cyber attack have increased costs.
+5
This could have a major impact on global economies, food supplies and energy companies - creating widespread
poverty, food shortages, poor health and an increase in crime.
108
Joe Hancock, Cyber Security Specialist at AEGIS London said: These attacks are now increasingly destructive as
we have seen with the recent attack on Sony Entertainment.
'This trend is going to continue, with affected businesses squeezed between a shrinking top-line and rising costs.
'In 2016 we fully expect a business to fail due to the financial consequences of a cyber attack.
Cyber attacks are the 'new normal' and it is no longer enough to say 'it wont affect us', 'it wasnt patchable' or that
an attack just wasnt detected.
The wider cyber security community is also concerned about attacks that may cause real-world impacts on health,
safety and the environment, possibly linked to cyber terrorism or on-going conflicts.
Cyber attacks perpetrated by groups linked with areas of geopolitical tension, such as the former USSR or
contested regions, including the South China Sea, may mean organisations will be caught-up in the fallout of
hybrid warfare - facing both physical and cyber attacks.
In the extreme, the web could lead to a third world war, and this could ultimately threaten our existence.
Elsewhere, The Worldwatch Institutes State of the World 2014 report, recently discussed how the web and
digitisation not only play a role on politics and governance, but that it can be used to legislate behaviour more
than laws can.
Consider the controversy caused in late 2013 by a poorly functioning website created to help citizens sign up for
health insurance in the US, explained the report.
Despite the available of other means of accessing the new insurance program (telephone, post and government
offices), the website mentioned only the online option on its home page.
This meant that information was withheld, whether accidentally or on purpose, from citizens about something that
was fundamental to themselves, and policy reform.
Tesla founder Elon Musk took to Twitter earlier this year to warn against the development of intelligent machines.
He seems to have been influenced by a book that argues humans are living in a simulation and not the real world
Mr Musk also previously claimed that a horrific Terminator-like scenario could be created from research into
artificial intelligence. He is so worried, he is investing in AI companies, not to make money, but to keep an eye on
the technology in case it gets out of hand.
It inadvertently forced people to behave a certain way, and this power was in the hands of the people who
controlled the website and the media.
A technological mind-set legislates behaviour by constraining virtually everyones consideration of the tools
available for accomplishing an important task to the most sophisticated of them, even when the tool is not
working.
Laws rarely exact such compliance.
The part of the internet the public are able to access and view makes up only about 20 per cent of the total web.
The rest is what is known as the dark side that accounts for some 80 per cent of the internet.
Also known as the Deep Web, it has existed for more than a decade but came under the spotlight in 2013 after
police shutdown the Silk Road website - the online marketplace dubbed the 'eBay of drugs' - and arrested its
creator.
But experts warn this has done next to nothing to stem the rising tide of such illicit online exchanges, which are
already jostling to fill the gap now left in this unregulated virtual world.
This dark side, sometimes known as Silk Road 2, is accessed via the Tor browser and allows anonymous access
into sites.
It can be a platform for freedom of information and flow of data, particularly for suppressed individuals in
politically unstable countries but, equally, has been hijacked by terrorist organisations and other illegal operations
such as paedophiles, gun runners and drug lords.
Earlier this month, the government announced plans to work with law enforcement agencies under the new
government initiative to crack down on illegal and inappropriate activity on these sites.
The National Crime Agency and the Government Communications Headquarters (GCHQ) will use the latest
technology to crackdown on users of the so called dark net, or deep web.
This dark side has the potential to organise groups, bring down business and governments and cause havoc.
The rise of the web and internet capabilities has also made the prospect of Artificial Intelligence much more
prominent.
This is one topic that the Cambridge risk centre is going to be looking at specifically, but is also being monitored
by the likes of Tesla boss Elon Musk.
The field of artificial intelligence is advancing rapidly along a range of fronts,
Recent years have seen dramatic improvements in AI applications like image and speech recognition,
autonomous robotics, and game playing; these applications have been driven in turn by advances in areas such as
neural networks, search, and the scaling of existing techniques to modern computers and clusters.
While the field promises tremendous benefits, a growing body of experts within and outside the field of Artificial
Intelligence has raised concerns that future developments may represent a major technological risk.
109
A long-held goal has been the development of human-level general problem-solving ability.
While this has yet to be achieved, many researchers believe it could happen within the next 50 years.
As Artificial Intelligence algorithms become both more powerful and more general - able to function in a wider
variety of ways in different environments - their potential benefits and their potential for harm will increase
rapidly.
Google has set up an ethics board to oversee its work in artificial intelligence.
The search giant has recently bought several robotics companies, along with Deep Mind, a British firm creating
software that tries to help computers think like humans.
One of its founders warned artificial intelligence is 'number one risk for this century,' and believes it could play a
part in human extinction
'Eventually, I think human extinction will probably occur, and technology will likely play a part in this,'
DeepMinds Shane Legg said in a recent interview.
Among all forms of technology that could wipe out the human species, he singled out artificial intelligence, or AI,
as the 'number 1 risk for this century.'
The ethics board, revealed by web site The Information, is to ensure the projects are not abused.
Neuroscientist Demis Hassabis, 37, founded DeepMind two years ago with the aim of trying to help computers
think like humans.
Even very simple algorithms, such as those implicated in the 2010 financial flash crash, demonstrate the
difficulty in designing safe goals and controls for AI; goals and controls that prevent unexpected catastrophic
behaviours and interactions from occurring.
With the level of power, autonomy, and generality of AI expected to increase in coming years and decades,
forward planning and research to avoid unexpected catastrophic consequences is essential.
In the short and medium-term, militaries throughout the world are working to develop autonomous weapon
systems, with the UN simultaneously working to ban them.
Looking further ahead, there are no fundamental limits to what can be achieved, said Professor Hawking.
There is no physical law precluding particles from being organised in ways that perform even more advanced
computations than the arrangements of particles in human brains.
We should be very careful about artificial intelligence. If I had to guess at what our biggest existential threat is,
its probably that. So we need to be very careful with artificial intelligence.
There should be some regulatory oversight, maybe at the national and international level, just to make sure that we
dont do something very foolish.
With artificial intelligence were summoning the demon. You know those stories where theres the guy with the
pentagram, and the holy water, and...hes sure he can control the demon? Doesnt work out.
AI could to do more harm than nuclear weapons.
We need to be super careful with AI. Potentially more dangerous than nukes.
Conclusion
The benefits of internet are many but if it is not monitored and controlled then it may create havoc. Internet has
also become a threat to brick and mortar retail industry, hotel industry, transport industry and many other
industries, directly or indirectly. The Artificial Intelligence should be controlled otherwise our world will go to the
machines, the only difference between man and machine is intelligence, if that gap is also bridged then machines
will be superior to humans. These risks are not ignorable. Every innovation is accompanied by some side effects.
References
http://www.dailymail.co.uk/sciencetech/article-2870199/The-biggest-threat-humanityINTERNET-Experts-raise-concerns-web-s-potential-incite-violence-bring-governments-wipeout.html#ixzz457ZAaXUl
https://prezi.com/6a6mlqqha71w/does-the-internet-pose-a-threat-to-society/
http://www.theguardian.com/society/2013/aug/06/internet-trolls-real-threat-vulnerable-people
http://www.debate.org/debates/Modern-communication-pose-a-threat-to-society/1/
110
RISK MANAGEMENT &CAPITAL REQUIREMENT OF INDIAN BANKS AS PER

BASEL NORMS
DEBENDRA KUMAR OJHA
Research scholar, School of Commerce and Management Studies,
Ravenshaw University, Cuttack, India.
Email: debendraojhacuttack@gmail.com
Abstract
Risk refers to the uncertainty that surrounds future events and outcomes. It is the expression of the likelihood and
impact of an event with the potential to influence the achievement of an objective. In relation to a banking
institution, examples of uncertainties are political climate and socio-economic factors that contribute to the
profitability of the bank. Hence, risk is therefore defined as the possibility of suffering financial losses. Financial
loss may hamper the integrity, profitability and operation of the bank and may also cause unfavorable economic
effects. Unfortunately, due to the dynamic nature of the operation of a banking institution, risk cannot be totally
eliminated. And therefore, they are becoming even more vulnerable to a wide array of risks, especially when it
comes to financial risk such as Market Risk; Credit Risk and Liquidity Risk; risks influenced by economic factors.
Thus, forecasting and managing risk, or Risk Management (RM), is very essential to any financial institution. Risk
Management is a technical discipline with goals to protect the assets and income of an organization by
eliminating, reducing, or transferring potential for loss. To eliminate or mitigate loss, it is important to forecast
risk.
In the recent global financial crisis, the risk of insolvency and lack of sufficient capital was an important issue
confronting several important banks. Therefore, this paper focuses on measuring and managing the risk weighted
assets of the bank under different portfolio and Capital requirements to compute the Capital to Risk weighted
Asset Ratio (CRAR).
Key words: CRAR, basel-III, Risk management and Capital requirements

Nature and types of risk in banks
Risk:Banks for International Settlement (BIS) has defined it as- Risk is the threat that an event or action will
adversely affect an organizations ability to achieve its objectives and successfully execute its strategies.
Types of risks:
The type of risks can be fundamentally subdivided in primarily two types, i.e. Financial and Non-Financial Risk.
Financial risks would involve all those aspects which deal mainly with financial aspects of the bank. These can be
further subdivided into Credit Risk and Market Risk. Both Credit and Market Risk may be further subdivided.
Non-Financial risks would entail all the risk faced by the bank in its regular workings, i.e. Operational
Risk, Strategic Risk, Funding Risk, Political Risk, and Legal Risk.
A brief introduction to Basel Committee on Banking Supervision

The Basel Committee on Banking Supervision (BCBS) has played a leading role in standardizing bank regulations
across jurisdictions. This has also contributed to Risk Management and its origin can be traced to 1974. The
primary objective of the committee is to improve banking regulations and supervisory system and reduce the gap
between systems in different countries,
The committees proposal did not have legal force. But these are accepted international standards of best practices
in Banking Supervision. The committee formulates broad supervisory standards and guidelines and recommends
statements of best practices in expectation that individual authorities will take steps to implement them through
detailed arrangements-statutory or otherwise which are best suited to their own national system.
History of Basel Accord
111
The Basel Accords refer to the banking supervision Accords (recommendations on banking laws and regulations)
namely Basel I, Basel II and Basel III by the Basel Committee on Banking Supervision (BCBS). They are called
the Basel Accords as the BCBS maintains its secretariat at The Bank of International Settlements (BIS) in Basel,
Switzerland and the committee normally meets there. The other standing committees are: Committee on Global
Financial System; Committee on Payment & Settlement Systems.
The Basel Accord(Basel I)

The Basel Committee on Banking Supervision decided to introduce a document titled: International Convergence
of Capital Measurement and Capital Standards., a capital measurement system in banks, which was commonly
referred to as the Basel Capital Framework or the Basel I Accord. This framework provided for the
implementation of a credit risk framework with a minimum capital standard. As far as our country is concerned,
banks have complied with all elements of Basel-I with the introduction of capital charge for market risks effective
from the year ended March 2005. The major drawback of Basel-I was that it did not consider allocation of capital
to take care of substantial and real operational risks of banks. Responding to the criticism and deficiencies
experienced in implementation of the 1988 Accord, the Basel Committee issued a proposal in June 1999 for a new
capital adequacy framework to replace the 1988 framework. Market Risk was introduced in the new framework.
Basel II Accord
The Basel II was introduced by BCBS in 2004 and revised in 2006. In India its implementation started in 2008
and is still ongoing. It is an updated document of Basel I and seeks to Improve risk calculation in capital
measurement by introducing three prominent pillars:
Pillar I: Risk based capital.

PillarII: Risk based supervision.
Pillar III: Risk disclosure to enforce market discipline.
Basel III Accord

The Basel III is an evolution rather than revolution in the area of Banking Regulation in 2010.Its implementation
in India started from 1st April 2013. Drawing largely from the already existing Basel II framework, Basel III aims
to build robust capital and ensure sound Basel III document.
Pillars of Basel III:

The basic structure of Basel III remains unchanged with three mutually reinforcing pillars.
Pillar I: Capital Adequacy:-Enhanced Minimum Regulatory Capital Requirements based on Risk

Weighted Assets (RWAs) calculated through Credit, Market and Operational Risk areas.
Pillar II: Supervisory Review Process:-Enhanced regulating tools and frameworks for dealing with
peripheral risks that bank face.
Pillar III: Market Discipline: -Enhanced disclosures that banks must provide to increase the transparency
of banks.
Major Features of Basel III:

Basel III will be phased in over a period commencing in 2013, with Basel III in full effect by 2019, as follows:
Better Capital Quality: One of the key elements of Basel III is the introduction of much stricter definition
of capital. Better quality capital means the higher loss-absorbing capacity. This in turn will mean that
banks will be stronger, allowing them to better withstand periods of stress.
Capital Conservation Buffer: Another key feature of Basel III is that now banks will be required to hold a
capital conservation buffer of 2.5% from 31st March 2016. The aim of asking to build conservation buffer
is to ensure that banks maintain a cushion of capital that can be used to absorb losses during periods of
financial and economic stress.
Counter-cyclical Buffer: This is also one of the key elements of Basel III. The countercyclical buffer has
been introduced with the objective to increase capital requirements in good times and decrease the
same in bad times. The buffer will slow banking activity when it overheats and will encourage lending
112
when times are tough i.e. in bad times. The buffer will range from 0%-2.5%, consisting of common
equity or other fully loss-absorbing capital.
Minimum Common Equity and Tier 1 Capital Requirements: The minimum requirement for common
equity, the highest form of loss-absorbing capital, has been raised under Basel III from 2% to 5% of
total risk-weighted assets. The overall Tier 1 capital requirement, consisting of not only common equity
but also other qualifying financial instruments, will also increase from the current minimum of 4% to
6.5%. Although the minimum total capital requirement will remain at the current 9% level, yet the
required total capital will increase to 11.5% when combined with the conservation buffer.
Leverage Ratio: A review of the financial crisis of 2008 has indicted that the value of many assets fell
quicker than assumed from historical experience. Thus, now Basel III rules include a leverage ratio to
serve as a safety net. A leverage ratio is the relative amount of capital to total assets (not riskweighted).This aims to put a cap-on swelling of leverage in the banking sector on a global
basis. 4.5% leverage ratio of Tier 1 will be tested before a mandatory leverage ratio is introduced in
January 2018.
Capital Structure under Basel III

Tier 1 Capital
Common Equity :
Tier 2 Capital
Revaluation Reserves
Equity capital
Statutory & other disclosed free Reserves
General Provisions and Loss Reserves

Tier 2 Subordinated Debt / Bondshaving Loss
absorbing capacity
Share Premium
Capital Reserves
Revenue Reserves
Deductions
Deductions
Investments in Own Shares (Treasury Stock)
Investments in the Capital of Banking, Financial and
Insurance Entities
Goodwill
Deferred tax assets
Cash flow hedge reserve
Gain-on-Sale Related to Securitisation Transactions
Cumulative Gains and Losses due to Changes in
Own Credit Risk on Fair Valued Financial Liabilities
Defined Benefit Pension Fund Assets and Liabilities
Insurance Entities
Additional Tier 1 capital

PNCPS
IPDI
Stock surplus
Deductions
Insurance Entities
Basel III Transitional Arrangements

In terms of Basel III Capital Regulations issued by the Reserve Bank of India, the Capital Conservation
Buffer(CCB) is scheduled to be implemented as on March 31, 2016. Consequently,Basel III Capital
Regulations will be fully implemented as on March 31, 2019. TheTransitional Arrangements is
tabularized as under:
113
Transitional Arrangements-Scheduled Commercial Banks

(Excluding LABs and RRBs)
April
1,
2013
March
31,
2014
March
31,
2015
March
31,
2016
March
31,
2017
March
31,
2018
March
31,
2019
Minimum Common
Equity Tier 1 (CET1)
4.5
5.5
5.5
5.5
5.5
5.5
Capital conservation
buffer (CCB)
.625
1.25
1.875
2.5
4.5
5.5
6.125
6.75
7.375
6.5
9.625
10.25
10.875
11.5
20
40
60
100
100
100
Minimum capital ratios
Minimum CET1+ CCB
Minimum Tier 1 capital
Minimum Total Capital*

Minimum Total Capital
+CCB
Phase-in of all
deductions from CET1
(In %) #
80
The difference between the minimum total capital requirement of 9% and the Tier
requirementcan be met with Tier 2 and higher forms of capital.
the same transition approach will apply to deductions from Additional Tier 1 and Tier 2 capital
Difference between Basel II and Basel III
i.
Basel II
Tier 1 capital is the Core Capital.
i.
Basel III
Common Equity Tier 1 Capital
Tier 1 Capital
Additional Tier 1 Capital
ii.
iii.
ier 1 Capital ratio = 6%

Core Tier 1 capital ratio (common equity) = 2%
Common Equity Capital is the Core Capital

ii.
Tier 1 Capital Ratio = 7%
iii.
Common Equity Tier 1 (CET1) = 5.5%
1st April 2013 = 4.5%,
31st March 2014 = 5%,
iv.
v.
Total Capital Ratio = 9%

No Capital Conservation Buffer (CCB)
iv.
v.
vi.
No Countercyclical Capital Buffer
vi.
vii.
No Leverage Raito
vii.
114
31st March 2015 = 5.5%

Total Capital Ratio = 9%
Capital Conservation Buffer of 2.5% in the form of
CET-1by 31-03-2019.
A countercyclical buffer within a range of 0%
2.5% of common equity
Introduction of Leverage Ratio @4.5%
Calculation of Credit Risk Weighted Assets (RWA) of U.B.I. as on 31-03-2014:

RWA as % of
Total Credit
Risk RWA
Type of Exposure
Exposure
RWA
Total Std Advance
90120.53
41491.32
80%
Agriculture&SME Loan
12318.80
2860.17
6%
3616.81
219.42
0%
30969.23
26165.03
51%
Housing Loan
3729.37
3726.98
7%
Commercial Real Estate
1064.92
454.54
1%
Restructured for all categories
4856.40
6032.37
12%
33565.00
2032.82
4%
Off Balance Sheet
9327.58
1494.76
3%
Bank Guarantee
6282.82
1357.21
3%
Letter of Credit
3044.76
137.55
0%
Undrawn
3056.42
562.38
1%
13975.35
2622.25
5%
7118.01
5481.95
11%
123597.89
51652.67
100%
13852.16
4058.17
5296.20
5296.20
CGTMSE/Central Govt/State Govt/ECGC

Corporates/PSE/NBFC
Other Loan
Other Assets
NPA
Credit Risk
Other RiskMarket Risk
Operational Risk
Total Credit Risk RWA includes:

Particulars
RWA (%)
Standard Advance
Off balance sheet
Undrawn
Other Assets
NPA
Total Credit Risk RWA
80%
3%
1%
5%
11%
100%
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RWA of Standard Advanceis 80% out of which Corporates Loans and Restructured accounts
have high RWA of 51% and 12% respectively. Therefore, the bank should limit their exposures
in high risk assets like Unrated, BB & below rated accounts and keep monitoring their
accounts.
Also, RWA of NPA accounts is 11% due to high rise in Bad Debt. It could be reduced if post
monitoring of loans are done on continuous basis.
Calculation of Regulatory Capital & Computation of CRAR as on 31.03.2014:

Sl No
1
Particulars
Amount(Rs.cr)
Risk-Weighted Assets
1.1
Credit-RWA
51653
1.2
Market-RWA
4058
1.3
Operational-RWA
5296
1.4
Total Risk-Weighted Assets
61007
Capital funds
2
Unadjusted Common Equity Tier -1 (CET 1) Capital
Amount
2.1
Paid -up Equity Capital
555
2.2
Share premium
1264
2.3
Statutory Reserve
714
2.4
Revenue Reserve
1047
2.5
Capital Reserve
1508
2.6
Surplus in the Profit & Loss Account brought forward
2.7
Total Unadjusted Common Equity Tier -1 (CET 1)Capital
0
5087
Total Regulatory Adjustments/ Deductions
3.1
Deferred Tax Asset (DTA) associated with accumulated losses
379
3.2
Deferred Tax Asset (DTA) net of DTL
10
3.3
Total DTA
390
116
3.4
Intangible Assets
24
3.5
Unamortized Expenses for Pension Fund Liability
89
3.6
Operating Loss in the current period
1213
3.7
Total Regulatory Adjustments/ Deductions
1717
Reciprocal Cross Holdings
4.1
Reciprocal of CET1 Capital
4.2
Reciprocal of AT1 Capital
15
4.3
Reciprocal of Tier 2 Capital
4.4
Total Reciprocal Cross Holdings
30
Regulatory Adjustments/ Deductions from CET1 @ 40%
5.1
Deferred Tax Asset (DTA)
156
5.2
Intangible Assets
10
5.3
36
5.4
485
5.5
Reciprocal of CET-1 Capital
5.6
Excess deductions from CET1 due to shortfall of AT1
411
5.7
Total Regulatory Adjustments /Deductions from CET1
1100
5.8
Total Common Equity Tier 1 Capital (CET1)
3987
5.9
Common Equity Tier 1 Capital(CET1)%
6.54%
Additional Tier 1 Capital(AT1)
6.1
PNCPS
6.2
PDI
800
0
117
6.3
Total Unadjusted Additional Tier 1 Capital
800
Regulatory Adjustments /Deductions from AT 1 @ 60%
7.1
Deferred Tax Asset (DTA)
234
7.2
Intangible Assets
14
7.3
54
7.4
Operating Profit/Loss in the current period
728
7.5
Reciprocal of AT1 Capital
7.6
Phase out of PNCP @20%
160
7.7
Phase out of PDIS @20%
7.8
Investment in Non common Equity Capital instrument of RRBs@

40% Rs. 369700
15
7.9
Total Regulatory Adjustments / Deductions from AT1
7.1
Total Adjusted AT1
7.11
Permissible "Additional Tier 1 capital (AT1)%
1.96%
7.12
Permissible "Additional Tier 1 capital (AT1)
1196
7.13
Eligible "Additional Tier 1 capital (AT1)
7.14
AT1 ratio
0.00%
Tier 1 Capital
3987
Tier 1 CRAR %
6.54%
1211
0
Tier 2 Capital
10
Unadjusted Tier 2 Capital
10.1
Revaluation Reserves discounted at 55% of Rs.6088937
274
10.2
General Provisions and loss Reserves
371
118
10.3
Upper Tier 2 Bonds (Amortized)
575
10.4
Lower Tier 2 instrument (Amortized)
640
10.5
Basel-III Tier 2 Bonds
500
10.6
Total unadjusted Tier 2 capital
2360
11
Regulatory Adjustments/Deductions from Tier2 Capital
11.1
Reciprocal of Tier 2 Capital
11.2
Phase out of Upper Tier 2 Bond @ 20%
115
11.3
Phase out of Lower Tier 2 Bond @ 20%
40
11.4
Total Regulatory Adjustments/Deductions
158
11.5
Total Adjusted Tier 2 Capital
2202
11.6
Permissible Tier 2 capital (AT1)%
3.27%
11.7
Permissible Tier 2 capital (AT1)
1994
12
Eligible Tier 2 Capital
1994
13
Tier 2 CRAR%
14
Total Eligible regulatory Capital
15
CRAR (%)
3.27%
5981
9.81%
Observation:
The Credit Risk RWA has been calculated by using Standardized based approach .While the Market Risk
RWA and Operational Risk RWA has been taken from their respective departments.
The CRAR of the Bank under Basel-III norms is above the regulatory limit of 9% while the Common
Equity Tier-1 (CET-1) CRAR is just above the threshold limit of 6.54% and Tier 2 CRAR is 3.27%.
The Bank is having Additional Tier-1 (AT1) Capital of `800.00 Cr. However due to higher regulatory
adjustment/ deductions the Bank is not able to utilize the full amount and the eligible AT1 Capital has
come to 0.The excess deductions of Rs. 411 crore is subtracted from the Common Equity Tier 1(CET1)
Capital as per Basel III norms.
The Bank is having total adjusted Tier 2 Capital of `2202 Cr, but due to permissible Tier2 limit of 2.5%
of Risk Weighted Assets Bank is eligible to utilize only `1994 Cr. Bank is losing Capital to a tune of `208
Cr.
As on 31-03-2014, the bank had operating loss of Rs.1213 crore in its accounts due to excessive
provisions in respect of bad debts.
The outstanding lower Tier 2 bond was of Rs. 1150 crore, which has been amortized to Rs640 crore.
As per Transitional Arrangements in Basel III norms ,PNCPs, Non- Common Equity, Upper & Lowe
Tier 2 bonds has been phased out, which has reduced the CRAR to 9.81% as on 31-03-2014 from
10.58% on 31-03-13.This phase outs will help the bank to make their capital more stringent.
119
Findings
The position of CRAR computed as per Basel III as on 31.03.2014 with two year projection taking 20%
growth in RWA is furnished below:
Capital Requirement under Basel-III Norms

Particulars
March-14
March15
March-16
Actual
Estimated
Growth @20%
Basel-III
Credit Risk RWA
51653
61984
74380
Market Risk RWA
4058
4870
5844
Operational Risk RWA
5296
6355
7626
61007
73208
87850
555
555
555
1264
1264
1264
713
713
713
Revenue Reserve
1047
1047
1047
Capital Reserves
1508
1508
1508
Surplus in the P/L (Retained Profit)
100
300
Fresh Equity Infusion with Premium
5087
5187
5387
Total Risk RWA
Composition of Capital
Common Equity Tier 1 Capital (CET1)
Paid up Capital
Share Premium Reserves
Statutory and other disclosed free Reserves
Total unadjusted Common Equity Tier 1

Capital (CET1)
120
Regulatory Adjustments
Intangible Assets
24
24
24
390
390
390
1213
90
1717
414
414
Reciprocal Cross holding of CET 1 Capital
Reciprocal Cross holding of AT 1 Capital
15
15
15
30
30
30
10
14
19
156
234
312
485
36
Investment in Own shares
Reciprocal Cross holding in CET1
411
Total Deduction from CET1
1101
253
331
Total Adjusted Common Equity Tier 1 Capital

(CET1)
3986
4934
5056
6.54%
6.74%
5.76%

Investment in Associates
Total
Reciprocals
Reciprocal Cross of Tier 2 Capital

Total
Adjustments/ Deductions from CET1

Intangible Assets
Unamortized Expense for Pension Fund Liability
Excess deductions from CET1 due to shortfall of

AT1
Common Equity Tier 1 Capital (CET1) %
121
"Additional Tier 1" Capital (AT1)

PNCPS
800
800
800
PDI
Fresh AT1 Bonds
800
800
800
14
10
234
156
78
728
Unamortized Expense for Pension Fund Liability
54
Investment in
instruments
15
15
15
12
160
240
320
1211
429
430
371
370
1.96%
1.84%
1.57%
1198
1346
1379
371
370
0.00%
0.51%
0.42%
3986
5305
5426
6.54%
7.25%
6.18%
Total Unadjusted AT1
Adjustments/ Deductions from AT1

Intangible Assets
non
common
equity capital
Reciprocal Cross holding AT 1 Capital@ 40%

Phase out of PNCPS @ 10% each year
Phase out of PDIS @ 10% each year
Total Deduction from AT1
Adjusted "Additional Tier 1" Capital (AT1)
Permissible "Add. Tier 1" Capital (AT1) %
Permissible Add. Tier 1" Capital (AT1)
Eligible "Add. Tier 1" Capital (AT1)
AT1%
Tier 1 Capital
Tier 1 CRAR %
122
Tier 2 Capital
Revaluation Reserves discounted at 55%
274
274
274
General Provisions and loss Reserves
371
371
371
Upper Tier II Bonds (Amortized)
575
575
575
Lower Tier II instrument (Amortized)
640
500
360
Tier 2 Bonds- Basel-III eligible
500
500
500
2360
2220
2080
Phase out of Upper T2 Bonds@ 10% each year
115
173
230
Phase out of Lower T2 Bonds@ 10% each year
40
85
130
158
262
366
2202
1958
1714
3.27%
2.45%
2.09%
Permissible Tier 2 Capital
1996
1794
1838
Eligible Tier 2 Capital
1996
1794
1714
3.27%
2.45%
1.95%
5983
7099
7140
9.81%
9.70%
8.13%
Total unadjusted Tier 2 capital
Adjustments/ Deductions from Tier 2

Reciprocal Cross holding
Investment in Associates
Total Deduction from Tier 2
Adjusted Tier 2 Capital
Permissible Tier 2 Capital %
Tier 2 CRAR %
Total Capital
CRAR %
Interpretation
As on 31-03-2014, the Total CRAR of the Bank under Basel-III norms is 9.81% while the Common
Equity Tier-1 (CET-1) CRAR is computed at 6.54%, just above the threshold limit of 6.50% and Tier 2
CRAR is3.27%.Thus, the bank is able to maintain the minimum regulatory requirements as per Basel III
norms.
Keeping 2014 as base year,CRAR projection has been done for year ended 31 st march 2015 &2016.
The Capitalhas been keptconstant, and a 20% growth in Risk Weighted Assets has been projected.
123
Internal accruals in form of profit is assumed to beRs100 crore as on 31-03-2015 &Rs300 crore as on 3103-2016.
The projected CRAR as on 31-03-2015 is 9.70%,out of which Tier 1 CRAR is 7.25% and Tier 2 CRAR
is 2.45%.Thus, the bank would be able to maintain the minimum regulatory requirements as per Basel III
norms.
The projected CRAR as on 31-03-2016 is 8.13%, out of which Tier 1 CRAR is 6.18% and Tier 2 CRAR
is 1.95%. Thus, the bank would fail to maintain the minimum regulatory requirements as per Basel III
norms.
Conclusion
As on 31st march 2014, CRAR position of the Bank under Basel-III norms is 9.81% which is above the
regulatory limit of 9%.
The projected CRAR position of the bank as on 31 st March 2015 is 9.70% which implies that the bank
would be able to meet its regulatory limit.
The projected CRAR position of the bank as on 31 st March 2016 is 8.19% which implies that the bank
would not be able to meet its regulatory limit.
RBI guidelines on New Capital Adequacy Framework (NCAF) and Basel-III capital Regulation in India.
References
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
AnandSinha : Indian Banking Journey into the Future , RBI monthly Bulletin February 2012
Anette Mikes :Counting Risk to Making Risk Count Harvard Business School Working Paper March
2011
Bank for International Settlements (BIS): Basel III Accord: the New Basel III Framework, BIS,
December 2010.
K.C.Chakrabarty: Indian Banking Sector: Towards the next orbit, RBI Monthly Bulletin,March 2012.
ICRA Comment : Proposed Basel III guidelines : A Credit positive for Indian BanksICRA Limited ,2010
K.C. Shekhar and LekshmyShekhar : Banking :Theory and Practice (20th Edition )Vikas Publishing
House Pvt.Ltd. 2011
B.Mahapatra: Implications for Basel III for Capital, Liquidity and Profitability of Banks,RBI Monthly
Bulletin, April 2012.
Mandeep Kaur and SamritiKapoor : Basel II in India :Compliance and ChallengesManagement and
Labour Studies, Vol.36, No.4, November 2011
Dr.K.Revathi : Basel III :Toning up the Banks Strength , Facts for you , April 2012
www.bis.org
www.rbi.org.in
www.unitedbankofindia.co.in
www.icai.org
124
AN EMPIRICAL ANALYSIS OF CUSTOMER SATISFACTION IN ORGANISED

RETAIL SECTOR
MS. ALAKA SAMANTARAY
Lecturer, Institute Of Business and computer studies
Siksha O Anusandhan University
Kalinga Nagar,Ghatikia
Bhubaneswar 751003
Orissa
alka.sray_2007@yahoo.com
Abstract
In recent years possess witnessed rapid innovation along with vigorous earnings with Indian native stores
throughout different types. This really is considered caused by the particular adjusting perspective regarding
Indian native customers along with his or her overwhelming acclaim to be able to modern-day list formats. In the
greatly aggressive list marketplace it is very important and keep the customers can use content. Satisfaction is the
key factor with deciding the particular achievement regarding virtually any organization. More content shoppers
result in the particular twice achievement of the organization. So to find the achievement a corporation really
should attempt to attain optimum client satisfaction. Merchants ought to understand how to gratify his or her
shoppers in order to increase his or her attractiveness along with raise customer loyalty. This paper will give the
birds eye view on the customer satisfaction towards the organized retail sector.
Key words: Retail, Customer satisfaction

Introduction
Retailing is the concept of marketing in which retailer supply the goods and services produced by the producers to
the final consumers. Retailer not only offers the solution for the last purchaser however its really the only chain
which in turn interacts while using the purchaser and the many companies relevant to the product or service.
Retail store service is really a thorough period that has hundreds of actions which in turn bring about the particular
achievement of a purchaser so that you can establish a long-term partnership along with him or her. The quality of
the particular list companies because of the merchant impact the particular customers wisdom concerning the
merchant consequently merchant must fork out specific focus on the particular list companies presented for the
purchaser. Retail store companies is really a hugely very subjective principle since it is difficult to set the
particular overall level of companies for all the purchaser as each purchaser may possibly settle for various level
of companies.
organised retail is an critical feature from the existing financial predicament in India. The particular organized
going company has become increasing considerably inside the modern times and is around the advantage
regarding much quicker growth in foreseeable future. Important manufacturing houses just like Reliance Group,
Bharti Group, Pantaloon Store Asia Minimal, RPG Group, Tata Group along with Raheja Group and so forth.
previously moved into that place and are increasing day by day. Transnational businesses just like Wal-Mart,
Carrefour, Neighborhood AG and so forth. in addition have hopped into the below wholesale room to have a
toehold in Indias $400 million yearly retail industry thats increasing with 25%-35% 1 year (Bailay, 2010).
Todays businesses run within a hugely dynamic company wording, and that is compounded through intricacy &
skepticism through the entire community, the particular intricacy regarding working within a swiftly altering
international setting has overcome many businesses around the world. The real key to ecological cut-throat edge
lies in offering top quality services that will in turn end in pleased consumers. While competition involving retail
setting increases & the downtown area places underneath head out revitalization, stores are usually consistently
seeking ways of insulate & boost revenue in reply to the particular progressively more cut-throat marketplace. The
matter regarding analyzing customer care regarding retail store has emerged to be a topic in need of investigation.
Dealer today ought to differentiate themselves through assembly the needs of these consumers superior to the
competition.
Review of Literature
Right after comprehensive analysis, Kotler as well as Armstrong (1997) described Customer Achievement will
be the scope to which usually any products recognized functionality meets any buyers objectives. Should the
125
products functionality drops lacking objectives, the customer will be disappointed. In the event functionality
meets or perhaps meets objectives, the customer will be happy. Assisting this specific meaning Tasks et 's (2011)
agrees with in which customer happiness is observed to occur when shoppers review their own perceptions
associated with product/service functionality because of their objectives. In contrast to the original meanings
associated with customer happiness Compromise, Scharitzer&Zuba (2000) discovered customer happiness will be
troubled by about three variables. The very first factor contains psychological determinants like friendliness from
the staff, display associated with items, richness of preference, and many others. as well as second factor will be
price-performance relation as well as finally factor refers to the analysis associated with the buyer alignment such
as store opening timings, accessibility to items, and many others. There's no strong major result associated with
purchaser hope with customer happiness as well as recognized excellent carries a greater result when compared
with psychological variables with customer happiness. Reemphasizing purchaser hope as well as post acquire
perceptions which usually induces customer happiness Kristensen, Martensen&Gronholdt (2000) opined that the
determinants associated with Customer care are generally recognized business image, purchaser objectives,
recognized excellent as well as recognized value. Understood excellent separated directly into two aspects hardware which usually consists of product/service capabilities as well as human-ware that's associated with
purchaser interactive aspects operate.
Objective of the study

The objective of this paper is to find out the gap between the customer expectation and performance towards
organized retail.
Hypothesis
H0: There is no significant relationship between customer expectation and performance towards organized retail
shopping.
The sampling procedure used for this study is stratified random sampling. The stratification done on the basis of
geographic locations. The instrument which is used for the collection of primary data is a questionnaire, which is
coded in order to analyze. Data has been collected using the personal approach. Respondents were given a list of
attributes which they were asked to score which are important for choosing skin care products on a scale of 1-5
where 1=unimportant and 5=very important. The sample size taken for the study is 250. the software package
SPSS has been used to carry out the analysis based on Paired -T Test
Analysis & Findings

Paired Samples Test
Paired Differences
95% Confidence
Interval of the
Mean
Std.
Std. Error
Deviation
Mean
Difference
Lower
Upper
df
Sig. (2-tailed)
Pair 1
c1e - c1a
-.724
1.391
.088
-.897
-.551
-8.228
249
.000
Pair 2
c2e - c2a
-.452
1.206
.076
-.602
-.302
-5.928
249
.000
Pair 3
c3e - c3a
-.664
1.151
.073
-.807
-.521
-9.123
249
.000
Pair 4
c4e - c4a
-.696
1.243
.079
-.851
-.541
-8.851
249
.000
Pair 5
c5e - c5a
-.640
1.254
.079
-.796
-.484
-8.069
249
.000
Pair 6
c6e - c6a
-.432
1.188
.075
-.580
-.284
-5.750
249
.000
Pair 7
c7e - c7a
-.376
1.339
.085
-.543
-.209
-4.439
249
.000
Pair 8
c8e - c8a
-.480
1.159
.073
-.624
-.336
-6.549
249
.000
Pair 9
c9e - c9a
-.572
1.234
.078
-.726
-.418
-7.329
249
.000
Pair 10
c10e - c10a
-.612
1.334
.084
-.778
-.446
-7.252
249
.000
126
Pair 11
c11e - c11a
-.576
1.231
.078
-.729
-.423
-7.401
249
.000
Pair 12
c12e - c12a
-.620
1.256
.079
-.776
-.464
-7.804
249
.000
Pair 13
c13e - c13a
-.336
1.270
.080
-.494
-.178
-4.182
249
.000
Pair 14
c14e - c14a
-.480
1.072
.068
-.614
-.346
-7.077
249
.000
Pair 15
c15e - c15a
-.484
1.271
.080
-.642
-.326
-6.020
249
.000
Pair 16
c16e - c16a
-.504
1.306
.083
-.667
-.341
-6.103
249
.000
Pair 17
c17e - c17a
-.424
1.211
.077
-.575
-.273
-5.537
249
.000
Pair 18
c18e - c18a
-.696
1.250
.079
-.852
-.540
-8.806
249
.000
Pair 19
c19e - c19a
-.488
1.327
.084
-.653
-.323
-5.815
249
.000
Pair 20
c20e - c20a
-.612
1.322
.084
-.777
-.447
-7.318
249
.000
Pair 21
c21e - c21a
-.404
1.098
.069
-.541
-.267
-5.818
249
.000
Pair 22
c22e - c22a
-.700
1.220
.077
-.852
-.548
-9.073
249
.000
Pair 23
c23e - c23a
-.620
1.190
.075
-.768
-.472
-8.234
249
.000
Pair 24
c24e - c24a
-.568
1.118
.071
-.707
-.429
-8.032
249
.000
Pair 25
c25e - c25a
-.544
1.179
.075
-.691
-.397
-7.297
249
.000
Pair 26
c26e - c26a
-.572
1.260
.080
-.729
-.415
-7.179
249
.000
Pair 27
c27e - c27a
-.596
1.120
.071
-.735
-.457
-8.416
249
.000
Pair 28
c28e - c28a
-.632
1.287
.081
-.792
-.472
-7.767
249
.000
Pair 29
c29e - c29a
-.672
1.319
.083
-.836
-.508
-8.056
249
.000
Pair 30
c30e - c30a
-.548
1.155
.073
-.692
-.404
-7.505
249
.000
Pair 31
c31e - c31a
-.524
1.268
.080
-.682
-.366
-6.534
249
.000
Pair 32
c32e - c32a
-.560
1.270
.080
-.718
-.402
-6.972
249
.000
Pair 33
c33e - c33a
-.588
1.110
.070
-.726
-.450
-8.379
249
.000
Pair 34
c34e - c34a
-.472
1.342
.085
-.639
-.305
-5.562
249
.000
Pair 35
c35e - c35a
-.644
1.157
.073
-.788
-.500
-8.801
249
.000
Pair 36
c36e - c36a
-.616
1.157
.073
-.760
-.472
-8.421
249
.000
Pair 37
c37e - c37a
-.440
1.157
.073
-.584
-.296
-6.010
249
.000
Pair 38
c38e - c38a
-.652
1.259
.080
-.809
-.495
-8.188
249
.000
Pair 39
c39e - c39a
-.608
1.307
.083
-.771
-.445
-7.353
249
.000
Pair 40
c40e - c40a
-.816
1.175
.074
-.962
-.670 -10.984
249
.000
Pair 41
c41e - c41a
-.740
1.151
.073
-.883
-.597 -10.162
249
.000
Pair 42
c42e - c42a
-.564
1.228
.078
-.717
-.411
-7.262
249
.000
Pair 43
c43e - c43a
-.672
1.297
.082
-.834
-.510
-8.190
249
.000
Pair 44
c44e - c44a
-.564
1.185
.075
-.712
-.416
-7.527
249
.000
Pair 45
c45e - c45a
-.632
1.209
.076
-.783
-.481
-8.263
249
.000
Pair 46
c46e - c46a
-.660
1.222
.077
-.812
-.508
-8.537
249
.000
Pair 47
c47e - c47a
-.572
1.310
.083
-.735
-.409
-6.905
249
.000
Pair 48
c48e - c48a
-.556
1.228
.078
-.709
-.403
-7.157
249
.000
Pair 49
c49e - c49a
-.492
1.169
.074
-.638
-.346
-6.653
249
.000
The above table shows that the gap between expectation and actual performance towards organized retail
shopping is highly significant.
127
variables
Mean expectation
Mean performance
The opinions of my family or friends

created positive perceptions of Shopping
Malls products and services.
2.692
3.592
My most recent shopping experience at

Shopping Malls was more enjoyable
than my past shopping experiences.
3.204
3.776
It was easy to communicate whilst

shopping at Shopping Malls.
3.224
3.884
The service quality level at Shopping

Malls is at the level that I required.
3.248
3.808
Shopping Malls advertising material

was easy to access.
3.176
3.744
The product offerings at Shopping Malls

meets my needs.
3.296
3.84
There are always adequate parking

facilities available at Shopping malls.
3.092
3.496
I experience positive feelings when

purchasing quality products at shopping
Malls
Shopping at Shopping Malls has been a
pleasant experience for me
3.228
3.712
3.28
3.86
Word of mouth communication is useful

to evaluate Shopping Malls products .
3.32
3.316
My shopping experience at Shopping

Malls influenced my perception.
3.344
3.792
My religious beliefs were respected

while shopping at Shopping Malls.
3.204
3.612
I received accurate promises from

Shopping Malls pertaining to service
quality delivery.
3.256
3.58
I was exposed to a high variety of

products whilst shopping at Shopping
Malls .
The merchandise found at Shopping
Malls is of a high quality.
3.436
3.936
3.528
3.968
I am able to quickly identify and select

the desired products.
3.424
3.84
I shop at Shopping Malls because of its

credible market reputation.
3.408
3.924
My decision to shop at Shopping Malls

was wise.
3.36
3.768
128
Word of mouth communication reveals

potential problems in the products and
services of Shopping Malls.
3.452
3.424
My shopping experiences contributed to

problem-solving when visiting Shopping
Malls.
3.496
3.864
Shopping Malls are knowledgeable

concerning various Indian ethnical
traditions and cultures .
3.308
3.736
The equipment of Shopping Malls

adequately addresses the type and level
of the promised services.
3.124
3.68
Shopping Malls make use of relevant

media channels to promote or advertise
their products and services.
3.248
3.776
Shopping Malls offer a wide selection of

different brands
3.328
4.064
Shopping Malls are easily accessible to

me.
3.456
3.896
The merchandise found at Shopping

Malls are consistently of a high quality.
3.488
3.924
My needs were fulfilled when shopping

at Shopping Malls.
3.352
3.784
Word of mouth communication has

created certain perceptions regarding
Indian retailers (e.g. BigBazar,
Pantaloon, The World, Reliance Fresh,
etc.)
3.344
3.324
My last shopping experience at

Shopping Malls contributed to the
enjoyment of my most recent shopping
experience.
3.264
3.756
3.24
3.76
As a customer, I was aware of the range

of services Shopping Malls offer.
3.472
3.824
Shopping Malls create good images via

media communication.
3.3
3.808
The packaging of merchandise is of a

high quality and is easily recognizable
3.6
4.028
3.084
3.448
Shopping Malls did not discriminate

against me in any way (e.g. mode of
dress, ethnicity, etc)
The speed of checkout at Shopping

Malls is satisfactory .
129
The brand name of Shopping Malls are

strong .
3.388
3.836
I am satisfied with the quality of

products provided by Shopping Malls.
3.232
3.776
It is easy to navigate all purchased items

through Shopping Malls.
3.248
3.776
All merchandise offered at Shopping

Malls meet the standard quality
requirements
Word of mouth information contributed
towards my feelings of Shopping Malls
products and services
3.4
3.9
3.46
3.584
3.12
3.868
Shopping Malls understand the attitudes,

likes and dislikes of consumers
3.276
3.832
The price of Shopping Malls products

reflects the quality of service.
3.208
3.916
The communications material provided

by Shopping Malls convey the correct
information.
3.224
3.836
Products at Shopping Malls are always

readily available on the shelves.
3.352
3.9
The hours of operation at Shopping

Malls suit me well.
3.264
3.8
Shopping at Shopping Malls resulted in

good product quality experiences by me.
3.448
3.964
Based on my levels of satisfaction, I will

revisit the preferred Shopping Malls.
3.38
3.924
Shopping Malls offer extremely efficient

selling-buying transactions
3.52
3.984
The layout and design of Shopping

Malls is user-friendly.
3.18
3.912
My shopping experience at Shopping

Malls ended in positive feelings.
The result of the demographic factors such as majority of the respondents are female and their age belongs to 2025(41%) are preferred to purchase products from retail stores. Education and income also plays a vital role in
taking the decision to purchase from the organised retail store. From this survey it was observed that the gap
between expectation and actual performance towards organized retail shopping is highly significant. So Null
hypothesis is rejected. It means the relationship between customer expectation and performance towards
organized retail shopping is significant.
Conclusion
Customer satisfaction relates to individual action directed at gratifying individual wishes via goods in addition to
solutions. Client satisfaction plays a significant & crucial part the way it relates to purchaser in addition to their
own desires. The actual significant process of your corporation is to satisfy purchaser simply by getting together
with their own desires in addition to wishes. The analysis unveils of which most the client wants to order the
merchandise coming from list go shopping upon dollars transaction mode which signifies the higher setting to the
list market to build with future. The actual examination additionally signifies of which assistance component
proposed by shop had been thought to be very first while making invest in selection with the respondents
130
associated with Odisha State. It was then merchandise component, convenience component, promotional
component in addition to extravagance component. So it's recommended of which suppliers ought to target
enhancing their own solutions so as to strengthen their own purchaser bottom.
References
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Customer Relationship, Journal of Marketing, Vol.63, pp.70-87.
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Hallowell, R. (1996). The relationships of customer satisfaction, customer loyalty and profitability: An
empirical study. International Journal of Service Industry Management, Vol. 7 No. 4, pp. 27-42.
Joshi Sandhya (2011), A study of service quality and customer satisfaction across various service
providers in the Telecom Sector, Indian Journal of Marketing, September 2011, pp. 55-61.
Kalpana Singh, (2014). Retail Sector in India: Present scenario, Emerging Opportunities and
Challenges, IOSR Journal of Business & Management, Vol. 16, issue 4, ver 1(Apr.2014), pp72-81.
K.C Mittal, Mahesh Arora and AnupamaParashar(2011), An Empirical Study on factors affecting
consumer preferences of shopping at organized retail stores in Punjab, KAIM journal of management
and research Vol.3 No. 2 November-April 2011 pp. 38-40
Meyer-Waarden, L., Benavent, C. (2006), The Impact of Loyalty Programs on Repeat Purchase
Behaviour, Journal of Marketing Management, Feb.2006, Vol. 22 Issue 1/2, pp. 61-88.
FICCI,Sector profile the Indian Retail Industry, Accessed from www.ficci.com/sector - 33/projectdocs/sector-prof.pdf on October 22, 2014.
Corporate Catalyst India, A Report on Indian Retail Industry, 2006.
IBEF.(2014) Retail Industry in India, Accessed from www.ibef.org/Industry/retail-India.aspx on October

21, 2014.
**********
131
FACTORS INFLUENCING THE INVESTMENT DECISION IN EQUITY AND

MUTUAL FUNDS: AN EMPIRICAL STUDY
Mrs. Krishna Kavitha Acharya, Research Scholar,
Ravenshaw University,
email: kavitha3acharya@gmail.com
Dr. Kishore Kumar Das,
Reader& Head Of the Department,
Dept. of Commerce & Management, Ravenshaw University.
Cuttack,ODISHA, INDIA
email: drkkdasru@gmail.com
Abstract:
The Indian capital markets have witnessed a major transformation and structural change during the past one and
half decades, since the early 1990s. The Financial Sector Reforms in general and the Capital Market Reforms in
particular were initiated in India in a big way since 1991 1992. Mutual funds play an important role in pooling
the savings of the investors and channelizing them into the productive purposes which leads to the economic
development of the country. They play a crucial role in resource mobilization, its allocation, and development of
corporate sector, growth of financial markets. The mutual fund industry in India started in 1963 with the
formation of Unit Trust of India, at the initiative of the Government of India and Reserve Bank of India. The
Securities and Exchange Board of India (SEBI) was set up in 1988 and acquired the statutory status in 1992.
Since 1992, SEBI has emerged as an autonomous and independent statutory body with definite mandate such as:
(a) to protect the interests of investors in securities, (b) to promote the development of securities market and (c) to
regulate the securities market and mutual funds. The present study is an attempt to analyze the investment
behavior, pattern and trend of individuals who belong to diverse origins and occupations and the problems of the
investors. It studies the investment awareness among people, their preferences of investment products , their
inclination towards investment and attitude towards risk. The study has been conducted by taking a sample study
of 224 respondents from Cuttack and Bhubaneswar in Odisha. The use of KMO and Bartletts test of Sphericity is
used to measure the sample adequacy for using the factor analysis. There are mainly 5 factors identified for
defining investors perception towards equity and mutual funds. They are saving plan /investment pattern,
investment in equity, preference of equity over mutual funds, preference of mutual funds over equity and investors
problems. The study also attempted to focus on the relationship between demographic profile and the investment
decisions of the investors by using ANOVA test. If the problems of the investors are properly addressed and the
recent reforms in the capital market (aimed at improving market efficiency, enhancing transparency, checking
unfair trade practices) are properly implemented, which leads to bringing the Indian capital market up to the
International Standards .
Keywords: Investment pattern, Investors problems, Investors perception, financial assets, unfair trade
practices, market efficiency
Introduction
In the present dynamic global environment, exploring investment avenues are of great relevance. The success of
an investment activity depends upon the knowledge and ability of the investors to invest, the right amount, in the
right type of investment, at the right time. Financial assets available to the individual investors are so many with
different degrees of risk and return. The knowledge of financial investment and the art of its management are the
basic requirement for a successful investor. The various financial assets available for investment are postal
savings, bank deposits, IPOs, mutual funds, equity shares, bonds and debentures etc. investment in equity is also
involves risk and return. The return on the equity investment is in the form of dividends and capital gains. A
Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal
.Anybody with an investible surplus of as little as a few hundred rupees can invest in Mutual Funds.. Thus a
Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a
diversified, professionally managed basket of securities at a relatively low cost.
132
Literature Review
Vidhyashankar S (1990) identified a shift from bank or company deposits to mutual funds due to its
superiority by way of ensuring a healthy and orderly development of capital market with adequate
investor protection through SEBI interference. The study identified that mutual funds in the Indian
capital market have a bright future as one of the predominant instruments of savings by the end of the
century
Gupta L C (1992) attempted a household survey of investors with the objective of identifying investors
preferences for mutual funds so as to help policy makers and mutual funds in designing mutual fund
products and in shaping the mutual fund industry
Sahu R K and Panda J (1993) identified that, the savings of the Indian public in mutual funds was 5 to
6 percent of total financial savings, 11 to 12 percent of bank deposits and less than 15 percent of equity
market capitalization. The study suggested that, mutual funds should develop suitable strategies keeping
in view the savings potentials, growth prospects of investment outlets, national policies and priorities.
The Delhi-based Value Research India Pvt. Ltd (1996) conducted a survey covering the bearish phase
of Indian stock markets from 30th June 1994 to 31st December 1995. The survey examined 83 mutual
fund Shah Ajay and Thomas Susan, Performance Evaluation of Professional Portfolio Management In
India, paper presented, CMIE, (10 April 1994). Kale and Uma, A Study On The Evaluation Of The
Performance Of Mutual Funds In India, National Insurance Academy, Pune, India (1995). Value
Research India Pvt. Ltd, Mutual Fund Delhi, India. (1996). schemes. The study revealed that, 15
schemes provided negative returns, of which, 13 were growth schemes. Returns from income schemes
and income-cum-growth schemes were more than 20 percent. From the point of risk-adjusted monthly
returns, of the 53 growth schemes, 28 (52.8 percent) could beat the index even in a bear phase.
Sahadevan S and Thiripalraju M (1997) stated that, mutual funds provided opportunity for the middle
and lower income groups to acquire shares. The savings of household sector constituted more than 75
percent of the GDS along with a shift in the preference from physical assets to financial assets and also
identified that, savings pattern of households shifted from bank deposits to shares, debentures, and
mutual funds.
Venkateshwarlu M (2004) had analysed investors from the twin cities of Hyderabad and Secunderabad.
Investors preferred to invest in Elango R, Which fund yields more returns? The Management
Accountant, Vol. 39(4), (2004), p283-290.
Venkateshwarlu M (2004), Investors Perceptions of Mutual Funds, Southern Economist, (January 15,
2004), pp.14-16. open-end schemes with growth objectives. Chi-squared value revealed that, the size of
income class is independent of preference pattern, and dependent on the choice of fund floating
institution. Reasonable returns and long-term strategy adopted by the scheme were the criteria of scheme
selection. Investors perceived that too many restrictions led to the average performance of mutual funds
in India.
Sanjay Kant Khare (2007) opined that investors could purchase stocks or bonds with much lower
trading costs through mutual funds and enjoy the advantages of diversification and lower risk. The
researcher identified that, with a higher savings rate of 23 percent, channeling savings into mutual funds
sector has been growing rapidly as retail Muthappan P K & Damodharan E , Risk-Adjusted
Performance Evaluation of Indian Mutual Funds Schemes, Finance India, Vol. XX(3), (September
2006), pp.965-983. Sanjay Kant Khare 2007, Mutual Funds: A Refuge for Small Investors, Southern
Economist, (January 15, 2007), pp.21-24.
investors were gradually keeping out of the primary and secondary market. Mutual funds have to
penetrate into rural areas with diversified products, better corporate governance and through introduction
of financial planners.
Fieldstein and Yitzhaki, (2011), in their study entitled, Are High Income Individuals Better Stock
Market Investors? have presented evidence to suggest that the corporate stock owned by high-income
investors appreciate substantially faster than stock owned by investors with lower incomes. They have
indicated that high-income individuals have larger portfolios and can therefore denote more time or
resources to their investments, thus resulting in higher returns.
Panda. K, Tapan N.P and Tripathi, (2011), in their study entitled, Recent Trends in Marketing of Public
Issues: An Empirical Study of Investors Perception, attempted to identify the investors awareness and
attitude towards public issues. One hundred and twenty five investors covering the salaried and business
class, from the city of Bhuvaneshwar were selected at random. The data was collected by administering a
questionnaire and was analysed using simple percentage and weighted average analysis. The study
revealed that majority of the investors relied on newspapers as the source of information. Financial
journals and business magazines were ranked next to newspapers. A large number of investors were of
133
the opinion that they were not in a position to get the required information from the company in time. A
sizable number of investors were found to face problems while selling securities. Safety and Regular
Return stood first and second with regard to the factors associated with investment activities. Equity
shares were preferred for their higher rate of return by the investors.
Objectives:
To identify the factors defining investors perception towards equity and mutual funds.
To identify whether the investment decisions of the investors in equity and mutual funds are influenced
by the demographic profile of the investors.
To identify various problems of the investors in investing the equity and mutual funds.
Hypothesis:
Hypothesis 1: Investment decisions

age of the of investors.
qualification of the of investors.
occupation of the of investors
income of the of investors
in equity and mutual funds are not significantly influenced by the

Research Design & methodology:

Sample Size:The sample size consists of 224 respondents from Cuttack and Bhubaneswar. The respondents are
segregated on the basis of different variables such as income, age, occupation gender, academic qualification and
occupation. .
The tool of Data Collection: The basic design of survey instrument consists of structured questionnaires. It is so
designed to collect all required information from investors of mutual funds and equity.
Data Source: The source of data would be primary and secondary, primary data has collected through the
structured questionnaire and the secondary data will be collected from related research works, published books,
journals, and reports of Securities and Exchange Board of India (SEBI), Association of Mutual Fund of India
(AMFI), Reserve Bank of India (RBI) and other authorized sources.
Tools of Data Analysis: The data and information collected have been classified, tabulated and processed and its
findings presented in a systematic manner. The use of KMO and Bartlettas test of Sphericity is used to measure
the sample adequacy for using the factor analysis. To know the influence of demographic profile of the investors
on their investment decision in equity and mutual funds ANOVA test is used.
Data Analysis:
Table I. Demographic Profiles of Respondents
Demographic Group
Age Group
Gender
Qualification
Demographic Sub-Group
Number
20-30Years
54
31-40 Years
88
41-60 years
63
Above 60
19
Male
126
Female
98
Under Graduate
69
Graduation
102
134
Occupation
Annual Income
PG
41
Professionals
12
Govt. service
41
Private service
79
Professional
38
Business
44
Student(others)
22
Rs 1,00,001-Rs3,00,000
60
Rs 3,00,001-Rs5,00,000
101
Rs. 5,00,001-Rs. 10,00,000
41
More than Rs.10,00,000
22
Out of the total 224 respondents, 88 respondents falls under the age group of 31-40, 63 respondents falls under the
age group of 41-60 and a19 respondents are senior citizens. The sample consists of male of 126 and female of
98.out of the total sample 98 are undergraduates 102 are graduates and post graduates are 41.out of the total
sample 41 are government servants and 79 privately employed. Out of the total respondents 22 respondents
income is above 10 lakh where as 101 respondents falls under the income group of 3 to 5 lakhs.
Factor Analysis
Factor analysis denotes a class of procedures primarily used for data reduction and summarization. It is an
advanced method to reduce a large number of variables to a manageable level for logical interpretation and
inference. Relationship among sets of many interrelated variables is examined and represented in terms of the key
underlying factors. The co-variation among the variables is described in terms of a small number of common
factors along with a unique factor for each variable. The factor loadings are intended to explain the substantive
importance of a particular indicator to one factor with which indicators are closely associated. A factor loading is
a simple correlation coefficient or regression coefficient. Typically, a loading of an absolute value of more than
.50 was taken as an indicator. Out of a total of 37 items used in the study only 19 indicators remained for final
analysis. Principal Component Analysis (PCA) with a varimax rotation was performed on these remaining 19
indicators to outline the determinants of mall management and these indicators are silently loaded within seven
domains of the factors.
Test of KMO and Bartletts Test of Sphericity

The use of KMO and Bartletts test of Sphericity is primarily essential to measure the sample adequacy for using
the factor analysis. The small values of the KMO and Bartletts test indicate that the correlation between pairs
of variables cant be explained by other variables and the factor analysis may not be appropriate.
Table 2
KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy.
Bartlett's Test of Sphericity Approx. Chi-Square
.885
5.065E3
Df
630
Sig.
.000
135
The null hypothesis states that the population correlation matrix is an identity matrix. The hypotheses is
rejected by the Bartletts test of sphericity (.500).In this analysis, the value of KMO statistics is .871 that is also
large. Thus, factor analysis may be considered as an appropriate technique for analysing the data pertaining to the
determinants of mall management.
Overall Reliability of Coefficient

Reliability provides a scale that should consistently reflect the construct when it is measured. A value
between .7 and .8 is acceptable for test of Cronbachs Alpha for social science and management related research
(Bland and Altman, 1997). The lower values substantially indicate an unreliable scale. This test was done for
internal consistency by using Cronbachs Alpha Score. It indicates how far indicators are related in a particular
construct. The consolidated Cronbach Alpha on 19 indicators and five factors is given in Table 3..
Table-3 Reliability Statistics
Cronbachs Aplha
Sample Size
No of Items
.901
224
19
Reliability of research scale is essential to identify the consistency of data to do further analysis. This coefficient
of reliability varies from 0 to 1. Value of 0.6 and above is good (Nunally, 1978). The overall scale reliability
coefficient is .901 which is a very good indicator for internal consistency across the indicators.
Communalities
The amount of variance that a variable shares with all other variables included in the analysis is referred to as
communalities. The proportion of common variance presents a variable that is known as the communalities. A
variance that shares none of its variance (or random variance) would have communality of 1. Variance that shares
none of its variance with any other variables would have a communality of 0.In factor analysis, efforts are made to
find common underlying determinants of mall management and common variance within the data.Table 3 presents
the output of communalities to find out the common relationship among variables.
136
Table 4 Communalities
Initial
VAR00012
VAR00013
VAR00014
VAR00015
VAR00018
VAR00022
VAR00023
VAR00029
VAR00031
VAR00032
VAR00033
VAR00034
VAR00035
VAR00036
VAR00037
VAR00008
VAR00009
VAR00026
VAR00030
Extraction
1.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000
.758
.760
.770
.657
.611
.671
.637
.661
.709
.727
.712
.763
.791
.777
.793
.617
.570
.590
.547
Extraction Method: Principal Component Analysis (PCA)

While making factor analysis, it is fundamental to find out as to how much common variance exists in
the current primary data or it may be called as common variance. To do the factor analysis, the researcher
intended to find out the proportion of common variance executing a PCA and Alpha factoring. These estimates
have extracted little communality which can be calculated to represent the multiple correlations between each
variance and the factors extracted. It is shown that a wide range of communalities exist between.547 to .791.Since
each variable share with other variables is significant. It is clearly understood that all the indicators relating to the
variables of mall determinants are commonly associated and there is a strong interrationship among the variables.
Factor Analysis, Eigen values, Variance

Table 4.4 represents the output related to the factor loadings, Eigen values, and variance percentage. Any
individual indicator with factor loadings of more than .6 was accepted to make interpretation of the results easier
and simple. The five factors are classified as Investment pattern, equity investment, preference of equity over
mutual funds, preference of mutual funds over equity, and investors problems. All the five factors with Eigen
values equal to or greater than 1 explained almost 69 per cent of variance in the dataset.
Factor 1(Saving plan/Investment Pattern ): A total of four indicators were loaded in the first factor to represent
the issue of Saving plan/ Investment Pattern. Factor 1, saving plan/ Investment Pattern included items such as
insurance as an investment, investment in gold, silver, real estate, investors satisfaction on his investment,
awareness regarding scheme of investment. With an Eigen value of 5.900(Table-4.4) that is accounted 21.07 per
cent of total variance. There are various saving option to the investors like investment in bank deposits, postal
savings, equity, mutual funds, insurance, gold , silver and real estate. This factor considers the pattern of their
investment and the satisfaction level of the investor in his return. It also considers whether the investors are aware
of the scheme/fund/type in which their money is invested.
Factor 2(Investment in equity): A total of five indicators were loaded in the second factor to represent the issue
of Investment in equity . Factor 2, Investment in equity included items such brokers guidance, confidence on
137
brokers advice, preference of the investor in investing in equity shares, investment in equity due to its high return
and growth and mode of trading (off line and on-line) in shares. with an Eigen value of 4.305(Table-5),the
accounted for 36.44 per cent of cumulative variance.
This factor considers the preference of the investor in investing in equity, are they really rely on the borkers
advice, they should have confidence on brokers advice. The reason for investment in equity. As equity
investment involves a lot of risk. This entirely depends upon the risk bearing capacity of the investors. Both
online and off line mode of trading facilities are available to the investors.
Factor 3 (Preference of equity over mutual funds): This factor analysis extracted two important indicators
under the name Preference of equity over mutual funds . Factor 3, Preference of equity over mutual funds
included items such as preference of equity over mutual funds due to its high return and due to the freedom in
constructing the portfolio. As it is seen in the results of factor analysis (Table-5) the factor accounted 5.4 per
cent of total variance, with an Eigen value of 1.516. This factor makes a comparison of direct equity over mutual
funds. Equity/growth schemes of mutual funds invest in equity shares of different companies under their
diversified portfolio. This factor tries to identify the reasons for direct investment in equity than through mutual
funds. Generally investors feel mutual funds are less risky than equity.
Factor 4 (Preference of mutual funds over equity) : The factor analysis extracted four important indicators
under the name Preference of mutual funds over equity Factor 4, Preference of mutual funds over equity
included items such a investors preference over equity due to its less risk, due to its convenience and due to its
diversification. Mutual fund is established in the form of a trust which pools the savings of the investors and
invests from a diversified portfolio with an objective of high risk and less return.
Factor 5(Investors problems): Investors problems include four indicators. Factor 5, Investors problems
included items such as facing problems of not receiving the monthly, quarterly statement, problem of poor
customer service in equity investment, problem of high brokerage, problem of hidden charges in equity
investment.
Table 5 Initial Eigen values
Initial Eigenvalues
Component Total % of Variance Cumulative %
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
7.354
1.843
1.498
1.390
1.036
.951
.726
.655
.522
.482
.429
.379
.357
.309
.284
.254
.237
.192
.104
38.704
9.698
7.882
7.316
5.453
5.007
3.821
3.448
2.747
2.538
2.257
1.994
1.880
1.625
1.493
1.337
1.246
1.009
.545
138
38.704
48.402
56.284
63.600
69.053
74.060
77.881
81.329
84.076
86.615
88.871
90.866
92.746
94.371
95.863
97.200
98.446
99.455
100.000
Hypothesis testing:
Hypothesis 1: Investment decisions in equity and mutual funds are not significantly influenced by the
age of the investors.
Table 6: ANOVA Between Age Groups
Sum of Squares
Factor1
Factor2
Between Groups
Factor4
Factor5
Mean Square
87.449
29.150
Within Groups
108.989
220
.495
Total
196.438
223
Between Groups
61.106
20.369
Within Groups
71.586
220
.325
132.692
223
Between Groups
44.106
14.702
Within Groups
45.895
220
.209
Total
90.000
223
Between Groups
36.180
12.060
Within Groups
41.930
220
.191
Total
78.110
223
Between Groups
14.136
4.712
Within Groups
91.109
220
.414
105.246
223
Total
Factor3
Df
Total
Sig.
58.840
.000
62.598
.000
70.474
.000
63.278
.000
11.378
.000
The above table gives, the study relationship of 5 different factors and age of the respondents. In determining
the relationship, a one way ANOVA was used. An attempt has been made to find out whether the observed
differences are statistically significant or not.
The first factor saving and investment pattern of investment as a determinant across the various age groups
F(3,220)=58.840, p = .000 . Therefore the relationship between age and investment pattern is insignificant at
5 per cent significance level. The second factor investment in equity determinant across the various age
groups F(3,220)=58.840, p = .000 . Therefore the relationship between equity investment and age is
insignificant at 5 per cent significance level. The third factor preference of equity over mutual funds as a
determinant across the various age groups F(3,220)=70.474, p = .000 . Therefore the relationship is
insignificant at 5 per cent significance level. The fourth preference of mutual funds over equity as a
determinant across the various age groups F(3,220)= 63.278, p = .000 . Therefore the relationship is
insignificant at 5 per cent significance level. The last factor investors problems as a determinant across the
various age groups F(3,220)=11.378, p = .000 . Therefore the relationship is insignificant at 5 per cent
significance level
qualification of the of investors.
Table 7: ANOVA (Qualification)
Sum of Squares
Factor1
Between Groups
Df
Mean Square
89.780
44.890
Within Groups
106.658
221
.483
Total
196.438
223
139
F
93.014
Sig.
.000
Factor2
Between Groups
52.936
26.468
Within Groups
79.756
221
.361
132.692
223
Between Groups
42.563
21.282
Within Groups
47.437
221
.215
Total
90.000
223
Between Groups
32.874
16.437
Within Groups
45.235
221
.205
Total
78.110
223
2.492
1.246
Within Groups
102.753
221
.465
Total
105.246
223
Total
Factor3
Factor4
Factor5
Between Groups
73.342
.000
99.147
.000
80.305
.000
2.680
.071
The first factor saving and investment pattern of investment as a determinant across the educational
qualification F(2,221)=93.014, p = .000 . Therefore the relationship between education and investment
pattern is insignificant at 5 per cent significance level. The second factor investment in equity determinant
across the various educated groups F(2,221)=73.342, p = .000 . Therefore the relationship between equity
investment and education is insignificant at 5 per cent significance level. The third factor preference of
equity over mutual funds as a determinant across the various educated groups F(2,221)=99.147, p = .000 .
Therefore the relationship is insignificant at 5 per cent significance level. The fourth preference of mutual
funds over equity as a determinant across the various educated groups F(2,221)= 83.305, p = .000 .
Therefore the relationship is insignificant at 5 per cent significance level. The last factor investors problems
as a determinant across the various educated groups F(2,221)=2.680, p = .071 . Therefore the relationship is
insignificant at 5 per cent significance level
occupation of the of investors
Table 8: ANOVA (Occupation)

Sum of Squares
Factor1
Between Groups
Within Groups
Total
Factor2
Factor4
Factor5
Mean Square
105.095
26.274
91.343
219
.417
196.438
223
Between Groups
65.961
16.490
Within Groups
66.731
219
.305
132.692
223
Between Groups
47.630
11.908
Within Groups
42.370
219
.193
Total
90.000
223
Between Groups
39.695
9.924
Within Groups
38.415
219
.175
Total
78.110
223
Between Groups
19.303
4.826
Within Groups
85.942
219
.392
105.246
223
Total
Factor3
Df
Total
140
Sig.
62.993
.000
54.118
.000
61.548
.000
56.573
.000
12.297
.000
The first factor saving and investment pattern of investment as a determinant across the various income
groups F(4,219)=62.993, p = .000 . Therefore the relationship between occupation and investment pattern is
insignificant at 5 per cent significance level. The second factor investment in equity determinant across the
various occupations F(4,219)=54.118, p = .000 . Therefore the relationship between equity investment and
occupation tion is insignificant at 5 per cent significance level. The third factor preference of equity over
mutual funds as a determinant across the various occupations F(4,219)=61.548, p = .000 . Therefore the
relationship is insignificant at 5 per cent significance level. The fourth preference of mutual funds over
equity as a determinant across the various occupations F(4,219)=56.573, p = .000 . Therefore the relationship
is insignificant at 5 per cent significance level. The last factor investors problems as a determinant across the
various occupations F(4,219)=12.297, p = .000 . Therefore the relationship is significant at 5 per cent
significance level
income of the of investors
Table 9: ANOVA (Income)
Sum of Squares
Factor1
Factor2
Between Groups
Factor4
Factor5
Mean Square
78.382
26.127
Within Groups
118.057
220
.537
Total
196.438
223
Between Groups
49.492
16.497
Within Groups
83.200
220
.378
132.692
223
Between Groups
38.024
12.675
Within Groups
51.977
220
.236
Total
90.000
223
Between Groups
29.611
9.870
Within Groups
48.498
220
.220
Total
78.110
223
Between Groups
18.695
6.232
Within Groups
86.550
220
.393
105.246
223
Total
Factor3
Df
Total
Sig.
48.688
.000
43.622
.000
53.648
.000
44.775
.000
15.840
.000
The first factor saving and investment pattern of investment as a determinant across the various income
groups F(3,220)=48.688, p = .000 . Therefore the relationship between income and investment pattern is
significant at 5 per cent significance level. The second factor investment in equity determinant across the
various income groups F(3,220)=43.622, p = .000 . Therefore the relationship between equity investment
and income is significant at 5 per cent significance level. The third factor preference of equity over mutual
funds as a determinant across the various income groups F(3,220)=53.648, p = .000 . Therefore the
relationship is significant at 5 per cent significance level. The fourth preference of mutual funds over equity
as a determinant across the various income groups F(3,220)= 44.775 p = .000 . Therefore the relationship is
significant at 5 per cent significance level. The last factor investors problems as a determinant across the
various income groups F(3,220)=15.840, p = .000 . Therefore the relationship is significant at 5 per cent
significance level
Findings:
From the analysis of total of 37 items used in the study only 19 indicators remained for final analysis.
These 19 indicators are grouped under 5 factors. They are saving plan /investment pattern, investment in
equity, preference of equity over mutual funds, preference of mutual funds over equity and investors
problems. Majority investors feel that equity investment is riskier than other investment avenues. The
reason due to this is the return on equity investment is highly influenced by many the macroeconomic
141
risks--such as inflation, oil prices, real estate prices, employment and consumers spending capacity. The
recent sovereign debt crisis in Europe has hurt investors confidence.
The new investors dont understand the concept, operations and advantages of investment in mutual
funds before investing. The researcher had undertaken surveys of individual investors to analyze the
awareness of investors about the mutual fund schemes .It was observed that investors investing in mutual
funds but not aware about the mutual funds
Investors preferring equity over mutual funds by expecting high returns and can construct their portfolio
freely.
From the survey it was inferred that hidden charges charged by the broking firms in equity investment is
the major problem to the investors.
The survey reveals that most of the respondents receiving the contract notes, and consolidated statements
of their investment in mutual funds through e-mails.
Both online and offline are the modes of investment in share trading. Even though investors having
online trading accounts they order though offline mode by placing orders over phone to their broker.
It was found that Brokers advice and brokers guidance sometimes gave negative returns to the
investors. Brokers advices prompt the investors to speculation rather than investment.
From the ANOVA test the researcher found that, there is a significant relationship among the
demographic profile of the investors(age, income, education, occupation) and the identified 5 factors i.e.,
the investment pattern, investment in equity, preference of equity over mutual funds, preference of
mutual funds over equity, and investors problems. But one aspect the researcher found that there is no
significant relationship between qualification and investors problems.
Suggestions:
The agents and marketing distributions system of the mutual funds should not give promise for high
returns in equity schemes because mutual funds are subject to market risks.
Brokers of various broking firms should take care while providing their recommendations to the investors
their motive should not to earn brokerage but to give sufficient return to the investors.
Major problem in equity investment is hidden charges. Although the broking firms send contract notes to
the investors but some charges are imposed by the broking firms. There should be transparency of
information to the investors, which rebuild the confidence of the investors.
Financial illiteracy is one of the major hurdles in expanding the markets for financial investment products
in India in general and in rural segments in particular, in our view. Therefore, the financial institutions
should come forward to set up literacy centers in various places and guide the investors about the
features, benefits and risk of various financial products to promote the penetration at higher levels.
Conclusions:
One of the most important aspects as far as the financial savings is concerned is that, the sector is highly
vulnerable to many macroeconomic risks--such as inflation, oil prices, real estate prices, employment and
consumers spending capacity. These risks are not only restricted to domestic economy but are related to
international economies as well. These developments have hurt investors confidence. At this juncture, the
economy needs a push to induce investments in key areas like core industries and infrastructure to revive the
growth momentum. Since it is savings which when mobilized into proper channels, culminates into gross
investment, increased savings has the potential to generate higher funds with the government to invest in
infrastructure, going forward. Hence, the greater transparency, increased innovations, better services to the
investors, liquidity and higher returns will make mutual funds, capital market more popular and investors
friendly.
142
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143

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