Vilakshan-2 1

Volume II
Issue No. 1
March, 2005
Xavier Institute of Management

Bhubaneswar - 751013
March, 2005 THE CREST OF THE XIMB The lamp on the book stands for the spread of knowledge, the chimney for industrial development, the two plants for rural development and the IHS logo for the Jesuit Society which manages the Institute.
Publisher Fr.E. Abraham, s.j., Director, Xavier Institute of Management, Bhubaneswar. Published by Xavier Institute of Management, Xavier Square, Bhubaneswar-751013
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CONTENTS
1. Stratified Users and Organisation Preparedness for Information Technology Acquisition: A Causal Model 2. Human Quality Development (HQD) for Corporate Management 3. Making Case Studies Deductive: A Sampling Method to select foreign companies for studying their FDI strategies in India 4. Resettlement and Rehabilitation: From Policy Guidelines to Practice A Case Study 5. Forecasting Time Series Data with special reference to Structural Stability-A comparison of three forecasting methods 6. Indian Management Styles: An Exploration Emotion and Intuition the Defining Factors 7. Human Resource Management Practices as Antecedents of Perceived Organizational Support: Evidence from an Indian Organization 8. Development of a Tool to Assess Organisational Culture in Indian Organisations 9. A Tested Strategy for Voluntary Retirement Scheme (VRS) Implementation 10. Comparative Study of Perception of Cement Buyers With Respect to Different Parameters in Two Cities of Uttar Pradesh 11. Design of Web Enabled Manufacturing Management System for Footwear Sector : A case study 12. Strategic Alliance As a Tool for Improving Indian Corporates Global Competitiveness 13. Book Review Drucker, Peter F., People and Performance, Elsevier Harekrishna Misra Manoranjan Satpathy Brajaraj Mohanty Subhash Sharma Amar KJR Nayak Kalyan Chakravarti Prabina Rajib Latha Ravindran P. Mishra 01
22 37
56 72
R. Parthasarathy Nivedita Kothiyal
88 98
P .K.Koteswara Rao P.T. Srinivasan S.George.J.P Suvendu Bose Toms Varghese Rajiv.R.K.Massey S. Balasubramanian
111
124 137
148
R.M. Srivastava Divya Nigam Sasmit Patra
154
161
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XIMB Journal of Management 1
Stratified Users and Organisation Preparedness for Information Technology Acquisition:

A Causal Model
Harekrishna Misra1, Manoranjan Satpathy2 and Brajaraj Mohanty3
ABSTRACT
usiness processes have been exploiting the continual growth of information technology, and as a result, these are becoming very complex with time. Without adequate IT support, a business organization can hardly survive these days. For an organization, IT acquisition involves two important process dimensions, one, suppliers capability to adequately evaluate the IT needs of the organization and two, users capability to properly assess its own IT requirements. Users role cannot be underestimated in organising an acquisition process (Gallivan and Keil, (2003))130. Any mismatch in the understanding of the IT dimension by business process owners and IT managers, IT acquisition in many cases result in failures. Research reveals that fewer attempts are made to involve the end-users in the acquisition process and their preparedness receives the least attention. Users involvement may help an organisation to prevent post adoption shocks. This paper first discusses IT acquisition process, various stakeholders in the IT adoption process and the associated phases. It further discusses a model to ascertain organisations preparedness based on preparedness of users, information system and technology in the pre-IT acquisition process. Through this research, the model is tried with thirteen sample organsaitions to examine the role of organisational preparedness to predict the health of IT acquisition process.
1 2 3
Institute of Rural Management, Anand, hkmishra@irma.ac.in Department of Computer Science, University of Reading, m.satpathy@reading.ac.uk Faculty of Business Administration, Utkal University, brajaraj _m@yahoo.com
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XIMB Journal of Management
INTRODUCTION
Business processes in any organisation are gradually becoming more complex due to inherent characteristics of the market that exist today. Information Technology (IT) plays an important role in supporting this agility to the organisation and increase productivity (Lee, 2001). IT acquisition brings in not only a change in the way process is handled (Process re-engineering) in an organisation, but brings in effects on culture, and at times effect on the overall efficiency (Lamb and Kling, 2003), (Rai, Lang and Welker, 2002), (Huang and Hu, 2004). An acquisition ideally is said to be successful if it is put to effective use and benefits are achieved as expected. Effective use depends on the users capability to use the IT infrastructure for the work. Studies reveal that despite IT attaining the status of infrastructure, many organisations fail to leverage the full potential of the technology. Before introduction of IT, information systems (IS) need to exist in an organisation and success of IT largely depends on how successfully IS planning is done in an organisation and how good the organisation is at pursuing decision making style (Miller and Toulouse 1980). Despite the technological advancements and ease of use, organisations fail to leverage the usefulness of IT infrastructure and there are many failure stories. Studies (Lycett, Macredie, Patel
and Paul, 2003) reveal that 80 to 90 percent of software does not meet performance goals, 80 percent of them are delivered late and over budget, 40 percent of developments fail or are abandoned, less than 25 percent of systems properly integrate business and technology objectives and only10 to 20 percent meet their success criteria. Thus there has been growing concern over evaluating, managing and measuring effectiveness of IT infrastructure created (Parvan, 1998). An IT acquisition process which can be treated as a process itself might involve many phases in order to term the process as complete. These phases could be Conceptualisation, Requirement determination, Organising Acquisition and Post-acquisition. IT acquisition in an organisation revolves around typical software engineering processes in order to leverage the IT infrastructure thus developed. Many factors such as understanding the process of aligning technology to the process, IT usage and usability contribute to the success of IT acquisition and these need to be understood. These factors which are not exhaustive, even if addressed properly do not necessarily lead to a successful IT acquisition scenario in an organisation (Gallivan and Keil, 2003). At the organisation level, these processes could be many and even
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iterative depending on the type of the organisation. Processes normally involve a comprehensive buyer-supplier relationship where the IT cell in the organisation assumes the buyers role and dictates the entire process of the acquisition. Quality models, though are available to understand the supplier behaviour as well as to keep control over the acquisition process, are again process specific. The model depicting the relationship is as shown in figure 1. Assessment of capabilities of the stakeholders could be organised in two broad areas: one capacity of IT service providers and second the capacity of IT users. It is supported that (Weill, 2004) most successful organisations aptly clarify business strategy and the role of IT in achieving them. They are also able to manage and monitor IT investments and return on investments. Besides, these organisations also assign accountability for the organisational
Acquisition Process
change required to benefit the new IT aligned process capabilities. IT acquisition in an organisation revolves around typical software engineering processes in order to leverage the IT infrastructure thus developed. It is a common notion that once software is in place it should be able to drive the process successfully. However, as discussed earlier, researchers time and again have found that IT acquisition success has not been as expected despite advancement in technology as well as tools. Many factors such as understanding the process itself, aligning technology to the process, IT usage and usability contribute to the success of IT acquisition. These factors which are not exhaustive, even if addressed properly do not necessarily lead to a successful IT acquisition scenario in an organisation (Gallivan and Keil, 2003). It is therefore,
Delivery Process
Quality Models
Users Capacity Building Models
Suppliers Capacity Building Models
Evaluation process
Understand own requirement Evaluate vendors Evaluate own employees
Understand Users requirement Build own expertise to handle project/build products for users satisfaction
Figure 1: An Acquisition Process Model (Misra et al.,2003)
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pertinent to understand issues that might affect the success of IT acquisition in an organisation. Software engineering generally focuses on entities and has been described as a process that involves analysis, design, construction, verification and management of technical entities including social entities (Pressman, 1997). But most software engineering principles discuss the issues related to Products and / or Processes. There are many models available as discussed already in the software engineering discipline that can be chosen depending on their suitability and applicability. At the organisation level, these processes could be many and even iterative depending on the type of the organisation. Taking control over these processes at the organisational level is perhaps the responsibility of the CIO engaged for the purpose. Processes normally engage a comprehensive buyersupplier relationship where the IT cell in the organisation assumes the buyers role and dictates the entire process of the acquisition. Quality models, though are available to understand the supplier behaviour as well as to keep control over the acquisition process, are again process specific. However, there is a debate whether IT acquisition process should be CIO-led or the CEO-led. Involvement of these two leaders with equal intensity during the IT acquisition process could perhaps be one of the
alternatives, which few researchers have observed. The model depicting the process of such involvement is as shown in figure 3. Under the process approach it is often noted that poor specifications and requirement definitions affect the usability and as well as project delivery. As can be seen form figure-36 errors creep in early in the project and it is during requirement determination phase that 56 percent of timing is lost in defining the requirement. In order to rectify these in the subsequent maintenance phase, when detected, the cost accounts for 82 percent (Flynn, 1998). It is therefore, essential that these errors are captured and rectified early and much before the coding starts. Traditional methods as discussed in earlier chapters also do not capture organisational requirements completely since the requirement is dynamic and somewhere the project needs to go to the subsequent phases for completion. User validation is one of the methods that can bring success to a project since user involvement in the process is increased and errors can be captured early. But this may increase the cycle time of the project and user may be scared to get involved so seriously in a new environment (Flynn, 1998a). Having moderate success rates and at times leading to disappointments in both the product as well as process based approaches, it is but natural to
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understand the reasons behind. It is empirically argued and verified by researchers that irrespective of the approach of the organisation to acquire systems under commercially-of-the-self (COTS) or under non-COTS, success of acquisition is influenced by organisational fit, users fit and process-fit (Hong, and Kim, 2002); (Palaniswamy, 2002). The most important factor that applies to such acquisition process is dynamism of the scenario and complexity of the processes. As regards quality in the IT acquisition process mere quality assurance of the vendor might not lead to providing a product for its qualitative use (Pressman, 1997). User involvement in all the phases i.e. definition phase, development phase and maintenance phase would probably provide some indications to the organisation about how the acquisition process is proceeding with quality as a major concern. But in actual practice it is rather absent or difficult to organise
the definition of the problems at the organisational level and then pursue each problem through a process. In the extreme case which could be User-led information system development (ISD) projects are also not free from criticism either as shown in figure-37. The advantages of user-led ISD projects are impressive. However, the organisation might run a risk since mere development of an application is not sufficient to term it successful (Davis, Olson, 2000a). Advantages and organisational risks of a user-led ISD project are as shown in table-7 below. IT-aligned systems demand a mix of both the IT-service providers and the endusers for its successful alignment. But getting the proportionate mix is a point of concern. Users normally have little scope to detail the technology related issues whereas IT-service providers know little about the organisation specific process rules and logics.
User-Led ISD User + IT people-Led ISD Involvemen t of Users
IT people-Led ISD
Involveme nt
Figure-37: Information System Development Projects
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Table 7: Advantages and Risks of User-led ISD Projects

Advantages
!
Risks
!
Make analysts and programmers more productive Use of systems would be easy
Transfer of application software development work to the users. It might reduces the problem of requirement determination Transfer of ISD projects completely to the users
! !
Loss of a technology oriented and outside of the process view fro the application Loss of an opportunity to evaluate alternate approaches and Software engineering models Loss of an opportunity to elicit complete requirement Lack of quality assurance for applications Unstable systems Risk from encouraging closed information systems
Therefore, it is a daunting task for the strategic planner to rightly time the involvement of users and IT professionals in an IT acquisition process for the organisation. Mostly an organisation develops complexity as it grows and depending on its stakeholders (internal as well as external) information systems tend to become more complex. Dynamic ambient conditions do expose limitations to the quality process attributes adopted to develop software and alignment to the business processes. On the other hand suppliers in the acquisition process who mostly are technology and service providers do not have prior exposure to the issues relevant to the organisation and might not be interested in doing so. The simple
intention might be to execute and/or comply simple SDLC phase and sign off for the next project. Capability of the service provider/supplier is of paramount importance that could have a direct bearing on the IT acquisition process. There are various models that could be deployed to understand the capability of the supplier/service provider like CMM, ISO etc as discussed in previous chapter. But the caveat is that quality process need not necessarily lead to a quality product and getting a quality certified product and service provider could be very costly proposition (Strong and Volkoff, 2004). Authors said that a successful IT acquisition must deliver business value, whether it is on project
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mode or otherwise. This business value is possible even if the IT acquisition is late, over budget and deliver expected functionality partly. A project however, delivering in time, on budget, but without any business value will be termed as ineffective and consequently a failure. Therefore, it is pertinent to understand that any IT acquisition is not simply a project, but a sizable organisational paradigm that needs to be addressed. It is invariably seen that failures in IT acquisition is not due to tools and/or technology termed as the hard issues, but the soft issues like rightly choosing the technology and/or tools, inadequacy in organisational planning and communication among the supplier and the acquirer. Technologies and/or tools can be chosen depending on the expertise of the acquirer /vendor who are actively involved in the process. However, business value remains same (Weill and Vitale, 2002). While SDLC has its advantages for a project management and other various models do provide project management techniques (Pressman, 1997); and (Mantel and Teory, 1989), it is not free from limitations in capturing organisational business value at macro level Ryan and Al-Qaimari, (2000). Another critical issue that plagues the organisation is the technology preparedness it needs to bring in. Existence of an IT cell with adequate exposure to tools and
technologies; its capability to examine and acquire the appropriate technology is a major area of concern since IT would remain as an infrastructure (Broadbent et al, 1999), (Weill and Vitale, 2002) (Hoving, 2003). It is also mentioned by researchers that despite active and high involvement of users in a development process, projects fail (Gallivan and Keil, 2003). Failure of user to educate the developer and vice versa led to this situation in a development process (Heo and Han, 2003). Eventually ultimate success of any IT infrastructure acquired depends on the way end-users use it. End-user competence and their attitude towards the IT usage have direct impact on its successful use. There is little research on this account that End-users involvement in the IT acquisition process is also a vital element in assessing organisations successful attempt to acquire IT and these end-users span across all the layers in the organisation (Torkzadeh and Lee, 2002). Therefore, it is of prime concern to find a way to understand or appropriately trace a path to organise the IT acquisition process. It is evident from the literature review that preparedness of the organisation is least addressed during IT acquisition process at macro level while each element in the organisation such as suppliers credibility assessment, understanding acquisition process on project mode and
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even assessing users involvement with respect to IT acquisition success are discussed in isolation. The problem that needs to be addressed here is to understand the following issues. 1. What are the layers of Users in the organisation need to be involved in IT acquisition? 2. How should the organisation assess its preparedness? 3. What needs to be included in acquisition preparedness exercise?
PROPOSED MODEL
The issues emerging from the models discussed so far are focussed on user preparedness that would facilitate in acquiring a sustainable IT infrastructure (better life cycle) (Irani, 2002). Preparedness of the organisation (Misra et al., (2004)) as a whole is an important step in the pre-IT acquisition scenario and should be taken up much before IT acquisition starts. Proposed model as shown in figure 2 is based on this concept. This model builds on the issues related to assessing users capability, IS preparedness, technology preparedness which in turn assesses organisational preparedness. The model depends on the concept that an organisation needs to understand the culture of the organisation, users (employee as well as management) aptitude and attitude towards IT acceptance, the change
management issues involved for the user to accept a technology as a first step. Organisation preparedness (Woodroof, 2003; Umanath, 2003; Luftman, 2003; Moody, 2003) would depend on these two aspects of pre-acquisition preparedness and climate preparedness. The next step that the organisation needs to follow is to understand the technology acquisition process. This is intended to assess suppliers capability to understand buyers business process and users capability to manage monitor the project to have the organisational fit. With these processes managed, the outcome would be assessed in the end (rather the first as well!) to understand how well the acquisition has been managed.
EXPLANATION OF THE MODEL

The model as discussed above intends to be used as a tool for the strategic user to understand its organisational preparedness while exploring the possibility of having a successful IT acquisition. It would also help the strategic user to perpetually assess the extent of success the IT acquisition in the organisation and trace through the reasons thereof. The model has many components named as constructs as shown in figure 2 (vide appendix A) and explanation of each component is provided below: User Preparedness (U) Apart from various models like that of TAM, UTAUT; DeLone and McLean (Rai,
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Lang, Welker, 2002) model also provides insight to the role of user in making the system successful. However, role of a user depends on its position in its hierarchy in the organisation and the decision making process (i.e. operational, tactical and strategic users), since degree of preparedness is dependent on the layer in which the user operates in. A layer wise link among these layer and suitably interfacing with IS strategy would be a good strategy for preparedness (Watson, Leyland, Kvan, 1988). These are explained in Table 1 (vide appendix-A). IS Preparedness (I) IS preparedness has been seen as a relation to organisations preparedness to harness IT. IS is an important component of the organisations environment (Bakopoulos, 1985) for building interfaces ( Seddon, Staples, Patnayakuni, Bowtell, 1999; Earl, 1993), integration (Braodbent et al., 1996). It is experienced that strong orientation of IS towards business processes rather than becoming IT centric would provide better results and use of IT artefacts (Alter, 2003). IS preparedness (I) is proposed to understand existence of any strategy for establishing systems orientation to information (Watson et al., 1988), a MIS framework for successful transactions (Abdulla, Kozar, 1995; Lamb and Kling, 2003; Seagars and Grover, 1998; Lee, Kozar and Larsen, 2003).
Technology Preparedness (T) This component would assess organisations strategy to organise IT and strategic IS management to carry out the acquisition process (Broadbet and Weill, 1996). Drawing up the Business maxim and deriving the IT maxim are the major deliverables of an acquiring organisation in the pre-IT acquisition scenario. IT comes with relevant components (networks, databases, applications and expertise etc.) and a strategy must be formulated for acquisition each component in order to provide a better alignment strategy to the IS (Huang and Hu, 2004). Effecting control over the IS driven IT infrastructure for meeting the business needs perpetually is an indicator of IS preparedness (Datnthanam and Hortono, 2003, Lamb and Kling, 2003, Jokela, 2001). Pre-Acquisition Preparedness (P) This preparedness is an aggregation of user preparedness (U), IS preparedness (I) and technology preparedness (T) of organisation in the IT acquisition process. Success in having the preparedness depends on organisations inclination to conduct this exercise, preparing its stakeholders to organise themselves for the technology adoption. This preparedness would lead to better systems usage, effective transactions and sustainable interface among the
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processes even if IT is acquired. Ownership of the IS would emerge because of this effort and facilitate to understand the thrust areas of IT adoption. Climate Preparedness ( C ) Here model tries to recognise the importance of the organisational climate that affects the IT-acquisition process. User perception on the organisation especially that of strategic users knowledge on decision making process, architecture of the organisation, support from all other users is captured. Besides, users knowledge at tactical and operational levels on the process and attitude of these users towards IT are measured. It is often found that managers and professional workers are averse to IT because of fear and anxiety due to this new technology (Grover, Teng, Fielder, 2003; Yaverbaum, 1988, Karahanna, Straub, Chervany, 1999). Organisational Preparedness (O) This preparedness is a measure of overall preparedness in pre-IT acquisition scenario. It depends on the tasks (assessing P and C) the organisation has well performed. The rationale behind assessment of this preparedness is to involve all the stakeholders of the process to involve themselves in the exercise and make an informed decision on the technology they would own on a sustainable basis
(Seagars and Grover, 1998, Earl, 1993, Abrahamsson and Jokela, 2000). If this preparedness is not aimed at, IT acquisition would take place based ion the mere perceptions and faith in the vendors with a gut-feeling (Huang and Hu, 2004).
RESEARCH DESIGN AND SURVEY

Research design rests on predictive features of the items constructed through goal-question-metrics (Basili, 1994) and through dependency structure of the constructs as shown below. Variables constructed for the purpose are based on the dependency table as in table 1, figure 2. U= d (U1,U2,U3); I= d (I1,I2,I3); T= d (T1,T2,T3) PA = d (U,I,T); C= d (C1,C2, C3); O= d (PA,C) ( * d denotes Predictive Dependency.) This dependency is described in table 1 and establishes the same through quantitative methods deployed and causal analyses. The research is intended to understand involvement of strategic, functional/tactical and operational users and other attributes and analyse its predictive behaviour for organisational preparedness. This analysis is done in two phases. First phase attempts to understand and elaborate independent items for predicting the constructs. The second phase explores the causal relationship
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among the constructs that predict the organisational preparedness as explained in table 1 above. Proposed model has three tiers for conducting the survey and validating it. These tiers are Items (Independent predictors),
Intermediate predictors (Latent Variables) and Dependent Items (Second Level Latent Variables). Figure3 explains these categories. Dependency of the items in the model is the centre of the study as described below.
U I
H1
PreAcquisition ( PA )
H3
User Involvement (O)
C1 C2 C3
H2
Climate Preparedness (C)
H4
Figure 2 : Attributes & Relationship for User Involvement
Tier-I U, I, T C1, C2, C3 (Exogenous)
Tier-II
PA,C, O (Endogenous)
Figure 3. Variable and Relationships of the Model
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Independent predictors are in summative scale form which is generated from the responses received from the subjects of the sample. Likert scaling Nunnally(1978); (Mcliver and Camines, (1994) is used under the premise that a group of items predict a single phenomenon through scoring in a scale adopted for the purpose. Another assumption is that these items correlate each other. While it is difficult to conclusively determine the predictability of a phenomenon, this procedure in conjunction with other methods is chosen to substantiate. Each set of questionnaire has been designed to record responses in a Likert scale with range 1-7 (Mcliver and Camines, (1994) (1: Strongly Disagree, 2: Disagree, 3: Somewhat Disagree, 4: Un-Decided, 5: Somewhat Agree, 6: Agree, 7: Strongly Agree).
among practitioners and academicians involved in IS implementation and research, in order to capture un-biased view of the respondents. The items are also mostly adapted from the research (Rai et al.,(2002); Segars & Grover,(1998); Lee et al.,(2003); Venkatesh et al. (2003); Luftman, (2003); Huff and Munro,(1985))); done in this area though have been reconstructed so as to suit the need of the model proposed. While the questionnaire was widely accepted by the subject respondents in two pilot organisations, its validation needed a quantitative treatment.
SAMPLING PLAN
One of the difficult propositions in preparing a sampling plan in order to assess the involvement is the unequal distribution of the subjects in the organisation. Layers (Strategic, Tactical, and Operational) are mostly hierarchical in nature and therefore, sampling plan also follows the pattern in the sample organisation. stratified sampling technique is adopted since it is essential to capture the subjects at all these layers in an organisation (Minieka and Kurzeja, (2001)). Actual survey based on following steps: a) choosing organisations, b) determining sample size, c) collecting responses. It has been planned to understand the applicability of the model in a heterogeneous environment. It was aimed at covering organisations with
ITEM CONSTRUCTION
Items are developed based on the GoalMetric Questions Model (GQM) (Basili,(1994)) usually followed for software engineering processes. Two pilot organisations considered for the initial study showed interest in the process. Items constructed on the basis of GQM approach were subjected to test among the respondents in these two organisations. This was intended to understand the difficulty level and also the polarity that might have occurred. Besides having questionnaires discussed
Table 2. Sample Demography

Sample Size Targeted Functional 36 50 50 50 50 50 50 50 50 50 50 50 50 636 2290 180 248 3152 180 248 180 248 180 248 6 5 6 8 74 180 248 7 180 248 6 180 248 5 18 16 11 8 14 15 12 210 180 248 5 12 180 248 6 23 180 248 4 20 180 248 5 18 25 30 21 20 19 21 17 15 18 19 31 320 180 248 7 24 45 130 176 4 19 39 Operational Total Strategic Functional Operational Total 62 76 48 54 50 37 42 43 35 29 37 40 51 604 Subjects Responded
Organisation
Strategic
10
18
18
18
18
18
18
18
18
10
18
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11
18
12
18
13
18
Total
226
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different core processes and conduct in depth study (both qualitative and quantitative studies). Twenty organisations were contacted personally where IT acquisition has been in different stages and the researcher had access. Thirteen of them responded to this exercise confirming participation. Demography of the responding organisations is described in table 2. As regards sample respondents, all the three layers in the management hierarchy have been given due importance in the process as required in the stratified sampling methodology. In most cases the sampling is stratified, sampling size is unequal. These groups as discussed earlier are strategic, tactical/ functional, operational. 0
Tier-II variables are dependent variables which are predicted by latent constructs detailed in Tier-II hypothesised through items in Tier-I as detailed table 3. Structural Equation Modelling (SEM) method which uses path analysis and quite similar to regression analysis, has been adopted to validate these latent constructs. Path diagram is used to explain hypothesised pattern of causal relations among a set of variables as explained in figure-7. In this model tierI variables are termed as exogenous and tier-II variables are termed as endogenous variables (figure 3). This model since assumes that relationships among variables are linear, additive and causal, SEM methodology is appropriate (Pedhazur (c), (1997)). Figure 4 describes the demography of sample organisations.
Figure 5. Organisation Demography IT Acquisition Status in Responding Organsiations

2 15% 1 8% 15% 2 15% 2
6 47%
Planning for major IT acquisition Major IT Applications Upgrade Planned Organsiations with ERP/ ERP based applications In-House Application development in progress/ IT infrastructure Acquired Incremental IT Acquisition in Progress
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ANALYSIS
The model is analysed to understand its applicability and to find the causal relationship among the exogenous and endogenous variables. O, P,C are considered to be the endogenous variables and U,I,T,C1,C2,C3,PP,PM,UM
are considered as exogenous variables (tier-I1 and tier-II). The model depicted in figure-4 is represented through a path analysis and postulates one-way causal flow. The confirmatory factor analyses have been done through LISREL-SEM (ver-8.7).
Figure 4. Path Analysis for the Proposed Model

U
0.20 H1
0.14
I
PA
0.27
H3
0.56
C1
0.42 0.35
H4
C2
0.26 0.23
H2
C3
Chi-Square=77.17, d.f=24; P-value=0.00000; RMSEA=0.061
Structural Equation O = 0.56* P + 0.42*C, Errorvar.= 0.20, R = 0.80 (0.17) (0.16) (0.088) 3.22** 2.56** 2.31 (Note: O-> User Involvement; PA-> Pre-Acquisition; C-> Climate Preparedness; ** indicates t-values)
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The equation above suggests that organizational preparedness does have a relationship with User Understanding at all the levels of management in an organisation (U), Information Systems availability & preparedness (IS), Preparedness to manage Information Technology (IT) besides having a dependency on the climate of the organization that involves the attributes already discussed and in table- . The direct effects of P & C on O are 0.56 and 0.42 respectively and respective t-values (for PA it is 3.22 and for C it is 2.56) are significant (Pedhazur, (1997)). While it is more
appropriate to understand the badness of fit for a model if chi-square value is considered through SEM, (in this case the chi-square value is 77.27 with df=24 at p < 0.01 and it is quite large to be significant), other indicators generated display the goodness of fit appropriately thereby confirming the applicability of the model. Table 3 indicates most of the observed values did support in favor of the fitness of the model. Path coefficients for the hypotheses H1, H2, H3, H4 and H5 are shown in Table 4 along with respective t-statistics and standard errors and it could be noted that all the hypotheses are supported.
Critical Value >= 0.90 (Bollen & Lennox (1991)) 3:1 (Klein, (1998)) >= 0.90 (value near to 1) (Hu & Bentler, (1999))
Table 3. Goodness of Fit Statistics

Sl. No. 1 2 3 Indicator CFI Relative Chi- Square (Chi-Square : df) Goodness of Fit Index (GFI) Adjusted Goodness of Fit Index (AGFI) Root Mean Square Error of Approximation (RMSEA) 4 5 6 Normed Fit Index (NFI) Non-Normed Fit Index (NNFI) Root Mean Square Residual (RMR) Standardized RMR Observed Value 0.97 3:1 0.97
0.95 0.06 >= 0.06 (Hu & Bentler, (1999))
0.95 0.95 0.014 0.038
>= 0.90 (Bentler, (1992))
Value between 0 & 1 (Near to 0) (Joreskog & Sorbom, (1989))
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Hypothesis Proposition Number H1
Path tCoefficient statistics *16.21, 17.03, 10.47 *12.39, 14.70, 15.61 3.10
Standard Error
Remarks
Users Role in U,I,T *0.20, 0.14, positively predicts 0.27 Component Preparedness ( PA ) Users Role in C1, C2, C3 positively predict Climate Preparedness (C) PA positively contributes to Organisational Preparedness ( O) C positively contributes to Organisational Preparedness ( O) *0.35, 0.26, 0.23
*0.025, Supported 0.028, 0.020
H2
*0.018, 0.014, 0.015 0.18
Supported
H3
0.56
Supported
H4
0.42
2.46
0.17
Supported
Table 4. Hypotheses for Predicting Organizational Preparedness (Tier-I & II) CONCLUSION
The model fitness not only accepts the stratified users in the hierarchy as an organisation normally displays and predicts involvement of these stratified users. User involvement is an important aspect in all the phases of IT acquisition process and ensuring this is the responsibility of the acquiring organisation. In order to assure a better and effective use of the IT acquired, user involvement is the most required in the pre-acquisition stage so that SDLC cycles can be managed professionally at a later stage. Study as above has revealed that the organisations which have displayed a poor state in IT acquisition have also shown a poor IT acquisition project performance. The proposed model has successfully attempted to understand the user involvement in those organisations. However, the sample organisations are less in number and the model needs to be applied in more sample organisations for its validation.
REFERENCES
1. Abrahamsson, P. and Jokela, T, (2001), Implementing User-Centred Design in to a Software Development Organsiation- a Subcultural Analysis, 24 th Information Systems Research Seminar, Scandinavia, Norway, August.
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Human Quality Development (HQD) for Corporate Management

Subhash Sharma1
he concept of Human Resource Development is rooted in the worldview of humans as factors of production and as assets for organizations. It is largely rooted in the skills oriented view of the organizations. Chakraborty (1990) emphasized the need for inclusion of values view along with the skills. Hence, he suggested the idea of Human Response Development by exploring the application of transformational values at the workplace. Sharma (1996) suggested the need to move beyond the narrow definition of humans as factors of production to a broader definition of humans as a set of human qualities. He suggested the need for Human Quality Development (HQD) in individual, social and organizational contexts. Thus, we
have three complementing worldviews about human beings viz. Human Resource, Human Response and Human Quality Development. In Indian thought the self is the beginning for any change effort. The scriptures, the epics and other literature have been emphasizing the need for cultivation of human qualities for overall improvement of society. Since HQD is rooted in Indian thought and Indian ethos, it can be considered as distinct Indian contribution to management thought as its application in corporate contexts opens new doors for extending the frontiers of management theory and practice. In fact, application of HQD in corporate context implies a change in mind set from viewing humans as factors of production or mere resources to
This is a revised, extended and updated version of the paper presented at the National Convention of Women Managers: Managing in 2000... Changes, Challenges, Initiatives and Responses, organized by Bangalore Management Association in association with All India Management Association, March 2-3, 2000 at Bangalore. Author appreciates and acknowledges feedback received from Profs. Kalburgi Srinivas and Malathi Bolar on an initial draft of this paper.
1
Director, Indian Institute of Plantation Management, Bangalore.
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viewing them as creators of value addition and co-partners in wealth creation (Sharma, 1999, 2003). A better human being is a better worker and a better manager leading to better productivity, better quality and thereby better performance. This is because a better human being focuses his / her energy on positive aspects of life and thereby contributes to synergy at the work place. Such a person is also selfmotivated. HQD extols us to become better human beings in addition to being good at skills. Hence, HQD is important for development of institutions and organizations. This paper is divided into three parts. In part-I we present some holistic concepts on the foundations of HQD. In part-II we provide some select HQD models that have direct relevance for corporate management. In part-III we see the implications of HQD at the society level and its importance for human and social development.
3. Inner Quality Development 4. Character Competence 5. Per Capita Happiness
CONCEPT - I DEVELOPMENT MOTIVATION

The concept of development motivation is derived from the metaphor of a tree emerging from a seed. In Indian psychophilosophy, the metaphor of seed containing the full potential of the tree has been widely used. Swami Vivekananda expressed this idea by emphasizing the proposition that the goal of human development is to manifest the divinity within. Full development of a tree depends upon the seed quality as well as the soil conditions and the quality of fertilizers and micro nutrients. Nature provides enough evidence for availability of right combinations to make a tree realize its full potential. It is the inherent quality of a tree to grow and grow in various directions and thus display its development motivation. However, growth can be hindered, facilitated or directed through external applications of fertilizers and micronutrients. Development motivation can also be nipped in the bud. In case of Bonsai trees their growth is intentionally hindered by controlled quantities of fertilizers etc. Thus, full or the holistic growth of a tree is a combination of inherent potential coupled
PART - I
CONCEPTUAL FOUNDATIONS OF HQD
In this part we present the following five ideas that form the cornerstones of the conceptual foundations of the Human Quality Development: 1. Development Motivation 2. Panchmukhi Vikas
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with care in providing the right combinations of nutrients and the environmental conditions. When this metaphor of growth of a tree is applied to the field of motivation, we get the concept of development motivation that combines both the intrinsic motivation and the extrinsic motivation. Development motivation is inherent in every individual like seed contains a wish to emerge into a tree. Development motivation implies an inner will to develop in holistic manner. When combined with extrinsic motivation this process is facilitated or hindered. Extrinsic motivation can serve as a facilitating factor or inhibiting factor just like the wrong quantities of fertilizer are harmful to a tree. Development motivation is a holistic development concept as it is indicative of the holistic growth of an individuals potentialities. Thus, it is consistent with the multidimensional growth requirements of human beings. Since, it combines both the intrinsic and extrinsic motivation concepts, it also serves as an overarching construct for human motivation. Development motivation not only captures the notion of inner desire for growth but also includes the assimilation of impulses that lead to desirable development of human potential. Inner desire for growth combined with right kinds of impulses, leads to realization of full potentiality in a person. In essence, development
motivation stands for positive channelizing of ones energies for constructive purposes. Development motivation can be seen in operation in many situations. A person making efforts to acquire new skills displays development motivation. Similarly learning a new language is an expression of development motivation. Individuals high on development motivation are likely to show greater flexibility in learning multiple skills including skills that are not merely market driven. Development motivation not only explains the urge for development but also explains the surge of creativity. Like seed wants to expand into a tree or a river starting from its origin shows its urge to flow, creativity in human beings also finds its expression through development motivation. The concept of development motivation also explains the urge to improve objective material conditions coupled with the desire to improve ones subjective psycho spiritual conditions. Thus, it combines the objective and the subjective dimensions of human urges. In essence, the concept of development motivation corrects the one-dimensional emphasis of other concepts such as Protestants ethics, McCllelands achievement motivation etc. Hence, this concept can be viewed as an overarching construct for multidimensional development. Indeed it
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is better suited to the requirements of contemporary societies that are searching for holistic development consistent with the ecological requirements.
CONCEPT - II PANCHMUKHI VIKAS

The idea of Panchmukhi Vikas or fivefold development is rooted in the educational ideas of Mahatma Gandhi. Adopted by Banasthali Vidyapith in 1935, it implies an integration of the physical, practical, aesthetic, moral and intellectual dimensions of learning. It stands for a holistic approach to development of individuals, society and nations. In this holistic worldview, material, aesthetic, moral, intellectual and spiritual development constitute the five aspects of development. Indeed the intellectual foundations of the concept of Panchmukhi Vikas can be traced to the Indian panch kosha (five sheaths) theory. In this theory we find a model of human beings in the form of five dimensions viz. annamaya kosha (gross physical body), pranamaya kosha (vital sheath), manomaya kosha (mental sheath), vijanamaya kosha (intellect sheath) and anandmaya kosha (bliss sheath). Correspondingly, the five aspects of development include material development, psychological / aesthetic development, moral development, intellectual development and spiritual development. It is interesting that Stephen
Covey (1990) in his book Seven Habits of Highly Effective People, also talks about similar ideas in terms of physical, intellectual and spiritual development for a holistic approach for self management. When translated in terms of corporate context, the Panchmukhi Vikas or five fold development concept can also be viewed in terms of five Es of holistic development viz. efficiency, effectiveness, equity, ethics and environment. As a notion that incorporates these five dimensions, Panchmukhi Vikas provides a new paradigm for individual, social and nations development.
CONCEPT - III INNER QUALITY DEVELOPMENT

The idea of inner qualities development is deeply rooted in Indian scriptures and also scriptures of other religions. It is at the core of the excellence motivation. The excellence motivation could be defined as intense desire to excel in ones field of action. At the popular level the idea of excellence motivation has been communicated through various characters in epics. For example, Arjuna represents the acme of excellence motivation. A large number of other examples of excellence motivation can be quoted from the epics and historical figures. During the contemporary times in the business field, J.R.D. Tata represents the essence of excellence motivation. In the fields such as art, music, cinema and other creative
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endeavour, a number of persons are embodiments of excellence motivation. The nav-ratna or the nine-jewel concept of the King Akbar was a manifestation of the recognition of the excellence motivation. In different periods of Indian history excellence motivation has manifested itself in various forms. Tulsidas had captured the essence of excellence motivation through his famous words, karat karat abhyas thi, jadmati hot sujan i.e. through repeated practice, even an unskilled person can become skilled and wise. Thus, excellence motivation can be captured through the concept of abhyas or the continuous practice. Riyaj is another Indian expression that also captures the same idea. The well-known personalities in the filed of dance and music give utmost importance to the abhyas or the riyaj to achieve the excellence. Indeed excellence motivation is a combination of the perspiration and inspiration. Since, outside is influenced by the inside excellence motivation is essentially a manifestation of the inner qualities. Three operational techniques for the development of inner qualities include the Indian Yoga, Chinese Tao and Japanese Zen. In fact the popularity and efficacy of these techniques and technologies has brought them from the realm of religion and mysticism to the realm of science and corporate management. Now, these techniques have become part of the
received knowledge on selfdevelopment, self-management and selftransformation both in the East and the West.
CONCEPT - IV CHARACTER-COMPETENCE
The essence of HQD lies in the idea of character competence. While the concept of core competence is useful at the enterprise level, the idea of charactercompetence is at the root of enlightened leadership of enterprises (Sharma, 2002). HQD implies development of the character competence. During recent years the concept of EQ i.e. emotional quotient was popularized by Goleman (1996) through his well-known book Emotional Intelligence. In addition the concept of spiritual quotient has also been emerging. The idea of charactercompetence could be expressed through character-quotient (CQ). Indeed a theory of personality could be defined by the following formula: I = IQ x EQ x CQ Wherein, I refers to Individuals personality, IQ refers to IntelligenceQuotient, EQ refers to Emotional-Quotient and CQ refers to Character-Quotient and the multiplicative symbol is a mathematical operator. This equation can also be used as a leadership model. By building character-competence in individuals, organizations, society and
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nation, degeneration of values could be controlled. Nation building demands improvement in character-competence of the leaders. Even in case of business enterprises, character-competence of the corporation and its leaders is as important as Prahlad and Hamels (1990) idea of the Core Competence of the Corporation. Using Chakrabortys framework of skills and values, it may be mentioned that while the idea of core competence is indicative of the skills of the corporation, character-competence is indicative of the values and ethical basis of the corporation. A Corporation may do good business on the basis of its core competence but may pollute environment and be socially irresponsible. Hence, the need for character-competence of the corporation in the era of Responsible Capitalism and Responsible Corporates.
CONCEPT - V PER CAPITA HAPPINESS

In economics, GDP stands for the economic measure of the Gross Domestic Product. In HQD it implies Growth, Development and Progress of an individual. The three terms are interrelated and convey subtle aspects of a holistic view of human beings. In fact it can be stated that on this GDP depends the GDP of the nation both in the economics sense as well as holistic development sense.
It may be indicated that a nations progress is usually measured through the concept of per capita income. However, equally important is the idea of per-capita happiness. If per capita income goes up and there is a reduction in per capita happiness, then such a situation is not indicative of the holistic happiness of citizens. Thus, increases in crime along with the increase in income levels is indicative of something wrong somewhere. Just like in some examinations, there is negative marking, an appropriate negative marking should be done for the crime rates and similar other problems. Thus, while ranking nations in terms of per capita income or in terms of HDI (Human Development Index), negative marking should be included for happiness reducing activities such as crime, pollution etc. Once such a marking is done, the relative ranking of many nations would change. The idea of per capita happiness is to indicate the state of a nation in terms of not just the material goods but also in terms of spiritual progress. To measure this there is a need to evolve other indices such has HQDI (Human Quality Development Index) and SQDI (Spiritual Qualities Development Index). Sharma (2003) also suggests the need to go beyond the Western models of self-development with a view to increase the per capita happiness.
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PART - II
HQD Models in Corporate Management
Rooted in the ideas of development motivation, inner quality development and character-competence presented in part-I, we present seven models of HQD having relevance for corporate development and management. These models are as follows: 1. Thought-Action Analysis 2. Negergy-Synergy Grid 3. SO-SO Window 4. Stimulus-Vivek-Response 5. G/T Ratio 6. Relationship Analysis 7. E-N-U Action Analysis A discussion on these and related models of HQD is available in this authors book Management in New Age: Western Windows Eastern Doors (1996) and related writings. In this paper, we present a brief discussion on these models.
another way of expressing the same idea. Positive thoughts lead to positive actions and negative thoughts lead to negative actions. The idea of the positive thoughts is also known as Positive Mental Attitude (PMA). As a result of day-to-day experiences in society and organizations, individuals develop T-A (Thought-Action) positive personality or T-A negative personality. Individuals with T-A positive display the Positive Mental Attitude and individuals with T-A negative display Negative Mental Attitude (NMA). If an organization is dominated with individuals with positive T-A, its performance can be expected to be at higher levels. However, if there are too many individuals with T-A negative or NMA, performance levels will be low because lot of organizational energy is wasted in handling negative energy generated by such individuals. Thus, an HQD intervention implies a shift from negative T-A to positive T-A. This helps in our evolution towards becoming better human beings. In fact, people wear two types of HATs viz. HAT1 (Hate, Anger & Tension) and HAT2 (Harmony, Amity & Tranquility). People with TA negative orientation tend to wear HAT1 while people with TA positive wear HAT2. TA analysis suggests throwing away HAT1 and wearing the HAT2.
MODEL - I THOUGHT- ACTION ANALYSIS

As you think so you are is a popular way of capturing the idea of thought action inter-linkages. Manas-vaachkarma, thought-words and deeds is
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Model - II Negergy - Synergy Grid

Negergy - Synergy Grid is an analytical framework combining the Western concept of authoritarian - democratic styles with the Eastern concepts of Divine-like and demonic-type personalities. Once these concepts are put in a grid form, we get four types of leadership styles. If X axis defines the Authoritarian-Democratic categorization and Y axis defines Divine-Demonic categorization, this grid identifies four quadrants viz. Democratic-Divine (Quadrant-I), Authoritarian-Divine (Quadrant-II), Authoritarian-Demonic (Quadrant-III), Democratic-Demonic (Quadrant-IV). While Divine-Democratic leadership creates synergy, the DemonicAuthoritarian style creates considerable amount of negative energy or negergy. HQD favours the ideal of DemocraticDivine leadership, as it leads us to synergy. This is consonance with the mini-max principle of HQD, which implies, minimize negergy and maximize synergy. This also represents the essence of enlightened leadership. Negergy-synergy grid also helps us in understanding the dynamics of workplace peace and harmony. Dialectical tensions at workplace could create negergy spirals (negergy chakra). Such tensions should be transformed into dialectical tranquility to create synergy spirals (synergy chakra). This concept could be
referred to as Dialectical Chakra theory of Organization Development (OD), wherein the focus is on synergy spirals at the workplace. This chakra theory can be applied to create harmony at workplace and also applied to social contexts to transform societies from Hate, Anger & Tension (HAT1) to Harmony, Amity & Tranquility (HAT2).
MODEL - III SO-SO WINDOW

SO-SO window is an analytical framework for analyzing inter-personal relationships. SO-SO stands for SelfOther and Self-Other. This window provides a basis of analyzing relationships in terms of the way we perceive ourselves and others. These perceptions could be in the form of positive and negative view of self and others. Once such views are put in a matrix or window format, we get an analytical framework for analyzing interpersonal relationship. A positive-positive combination in SO-SO window leads to synergy and a negative-negative combination leads to negative energy. In inter-personal relationships, we should strive for positive-positive combination to generate synergy. Readers may like to note the distinctiveness of this window from Johari window. Focus of this window is to make a shift from negative energy to synergy in interpersonal relationships.
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MODEL - IV STIMULUS-VIVEK-RESPONSE (SV-R)

Skinner gave us the Stimulus-Response model. However, human beings differ from the animals because of higher degree of intelligence endowed to them by nature. Vivek or the ability to discriminate is typical to human beings. Hence, the S-V-R (Stimulus-VivekResponse) model in contrast to the S-R model. It may be indicated that both models can be seen in operation. However, the frequency of use of each model is different in different human beings. This is what differentiates one human being from the other. People who operate on the S-V-R mode more frequently are the thinking types. People who operate more frequently on the S-R mode are like the Pavlovian dogs. In HQD emphasis is on the S-V-R model rather than S-R model i.e. to elevate one self from Pavlovian dog and Skinners rats and pigeons to thinking individuals with ability to discriminate the stimuli and responses. Some believe that Skinners S-R model is based on lower order science, while the exploration of the laws of human mind requires higher order science. Just like Newtonian physics and quantum physics deal with different levels of reality, the lower order science and higher order science deal with human behaviour at different levels, one
at the level of mechanistic responses, other at the level of consciousness and human intelligence.
MODEL - V G/T RATIO

G/T ratio stands for Give/Take. How much you give and how much you take from the family, organization or society is a widely discussed idea. When mathematicians put this idea in the form of a ratio, it becomes a conceptual model for analytical use. If G/T is greater than one, it implies that the person gives more than what he/she takes from the organization or society. This in itself is an indicator of inner motivation and the satisfaction one derives from the very act of giving more than what one takes. If G/T ratio is less than one then that person is taking more than what he / she is giving to the organization or society. This situation calls for a correction. It is natures nature to give more and take less. For example, sun gives light to all, its G/T ratio could as well be considered close to infinity. Trees display high giving orientation with high G/T ratio. No doubt the ancients were nature worshippers. Though nature in general displays high G/T ratio, human beings display varying intensities of this ratio. Using the tree metaphor we can classify people in three categories:
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Type I: Those who grow trees for their own benefit. These are selfish and self interest oriented. Type II: Those who grow trees for the benefit of self and benefit of others. They display enlightened self-interest. Type III: Those who grow trees only for the benefit of others. They display altruism and enlightened collective interest. Type I people have G/T ratio for less than 1 and they display grabbing orientation. Type II have G/T ratio slightly higher than 1. Type III have G/T ratio far far greater than 1. True corporate leaders and institution builders belong to this category. According to G.Das (2000), Vice Chancellor, Utkal University, saints, sages, prophets, mahatmas and other divine like people, display a very high igiving orientation and for avatara, the giving is infinite. This implies that G/T ratio for such persons is very high and for the avatars it is infinity. According to Indian psycho-philosophy, people possess three types of gunas viz. sattavik, rajasik and tamasik. People high on sattavik guna display a high G/ T ratio and show high giving orientation. People high on rajasik also display G/T ratio greater than 1. However, people high on tamasik guna, display G/T ratio less than 1 and show high grabbing orientation.
It may be indicated that input-output ratio is widely used in measurement of efficiency. While input-output is a mechanical measure of efficiency, the G/ T ratio is a measure of individuals contribution to the organization. As it measures the giving dimension of human beings, it also provides an inspirational meaning to life and motivates human being to move away from a lower ratio to a higher ratio. In a family, organization or society if the proportion of people with G/T ratio greater than one is high, then such an entity grows. Organizations and nations decline, once the proportion of people with G/T ratio less than one increase. This hypothesis can explain the rise and fall of institutions and nations. HQD suggests that individuals with high G/T ratio should be recruited to improve the performance of organizations. It may also be indicated that G/T ratio also provides an ideological foundation for the concept of Corporate Social Responsibility as it indicates what a corporate is giving back to the society from which it takes various resources. As a good corporate citizen, its G/T ratio would be high. In Gita, concept of G/T ratio has been articulated through the idea of loksangraha i.e. actions undertaken for the benefit of the world. This idea also provides a foundational basis for the concept of corporate social responsibility. It may be indicated that
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a Corporate Social Responsibility (CSR) index can be developed on the basis of G/T ratio of a corporate and corporates can be ranked on such an index to assess them as good corporate citizens. It may also be indicated that the concept of G/T ratio is also linked to Rights & Duties ( R & D) concept. In Indian thought, Rights and Duties are governed by Dharma, which is a guiding principle for Adhikar (Rights) and Duties (Obligations) of a person. In organizational context, both Rights and Duties (role-performance) are important for achieving goal congruence. For people with high G/T ratio, duty comes first. When the concept of Rights & Duties is applied to social contexts, we arrive at the concept of HRD as Human Rights & Duties. It may also be indicated that the concept of Rights & Duties also provides us a basis for the idea of the Duty of the fittest, which in corporate context provides an ideological foundation for the concept of Corporate Social Responsibility.
family relationships from our discussion. Hence our focus is on the following relationships: 1. Buyer-Seller Relationship 2. Organization and the Client / Customer Relationship 3. Employer-Employee Relationship 4. Principal-Agent Relationship 5. Debtor-Creditor Relationship 6. Boss-Subordinate Relationship Each type of relationship displays certain uniqueness and has some special features. In fact we can observe interplay of all the six types of relationships within an organization as well as in inter-personal contexts. It may be mentioned that each relationship is driven by a certain mind-set thereby leading to a certain mode of thinking. Each relationship imposes certain reciprocal requirements. Further, freedom and responsibilities get defined by the mutual obligations that these relationships demand. HQD suggests that these relationships should be so nurtured as to generate synergy across all dealings. This is also the essence of the harmony paradigm in relationship management.
MODEL - VI RELATIONSHIP ANALYSIS

Relationship analysis is concerned with analysis of relationships that we confront in our social and organizational / corporate existence. Since our concern is largely related to the organizational situations we can exclude the kinship /
MODEL - VII E-N-U ACTION ANALYSIS

Usually a dichotomized view of human actions is taken in the form of ethical
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and unethical actions. Ethical questions are analyzed in terms of these two categories. This black and white view of ethics in business and social contexts leads to many internal as well as social conflicts. The E-N-U model of dealing with ethical questions takes us beyond the black and white view and introduces the well-known idea of three colours viz. white, gray and black. In this model, ENU represents the three states viz., Ethical actions, Neutral actions (actions that are ethically neutral) and Unethical actions. Individuals who display the ability to differentiate between these three states, are in a real sense enlightened one. In guna theory, human actions are categorized in terms of sattava (S),
rajas (R) and tamas (T). In this theory, sattava stands for illumination, rajas for drive and tamas for darkness. When EN-U model is juxtaposed with guna theory, we get an analytical model in a matrix format, for analyzing ethical dilemmas and ethical conflicts. Fig.1 presents this model. In this figure R-S stands for Rajasik actions with Sattavik touch and R-T stands for Rajasik actions with Tamasik touch. Given the nature of the S, R, T gunas, R-S falls in the ethical area and R-T falls in the unethical area indicated in Fig.1. It may be indicated that in order to increase ethical synergy in organizations, organizations should avoid the R-T and T types of actions.
Figure 1:
The E-N-U Model of Human Actions & Ethics
Ethical (E) Sattavik(S)
Neutral (N)
Unethical (U)
Rajasik (R)
R-S
R-T
Tamasik (T)
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Part - III HQD in Social Context: HQD for Human & Social Development
There are two routes to social change, a positive route and a negative route. Therefore, in order to understand meaningfulness of HQD in social context, it may be necessary to take a view of history. In fact, a number of frameworks of history exist to get a glimpse of the past. These frameworks can be broadly classified in terms of two types, viz. positive and negative views of the past. In the positive view the romantic and glorious view of the past is metaphorically represented by the golden age and similar other expressions. In the negative view of the past, a linear evolution to a better state of things is visualized. Indeed the descriptions about past, are loaded with negative and positive metaphors depending upon the individuals cognitive orientations and the view of the history taught to the person. The expressions such as despotic rulers and benevolent rulers tend to capture the negative and positive use of power leading to a negative or positive view of the past. However, we need to take a balanced view and appreciate the positive achievements and contributions of the past generations. This is particularly important for nation building wherein positive achievements of the past have an inspirational value for the present
and future. The negatives from the past could also be useful for creating a change provided the critique of the past is used in a constructive manner. Quite often, it has been used in a destructive manner leading to loss of self-confidence and dignity of the entire nation or set of people. The positive route to social change implies highlighting the positive aspect from the past and taking a critical look at the negatives in order to change the negatives to positive. The negative route to change is based on total rejection of the past and overplaying the negatives from the past to give a jolt to people. Such a route to social change is essentially destructive as the experience shows though it may be claimed as revolutionary. History is witness to failure of many such negative revolutions. It may also be indicated that at the dawn of civilization, human beings were closer to nature. From such experience emerged a spiritual view of life with emphasis on human values. In ancient scriptures such a view of life is dominant. Hence, it has an eternal appeal in spite of the changes in nature of organizations, technology and modes of production. Now the global village has arrived along with borderless world. But what is the global vision or world vision? Is there a vision gap? If so, can it be bridged? These questions assume importance. In fact, an urge for utopia has always existed. This urge has found its expression in many forms in different societies. This can also
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be found in contemporary context in craving for a good society in the form of civic society based on human values. The idea of sacro-civic society is also indicative of this craving. In past, search for a good society led to concepts such as loksangraha, yogakshema, survival of all etc. that have been considered as guideposts for social action. The idea of good society has also been expressed through expressions such as Ram-rajya, Kingdom of God, Heaven on earth, Peace and Harmony etc. These metaphors capture the deeper urge and longing of human beings for a social vision based on the wisdom of sages. It is indeed interesting that all these metaphors and expressions have a close similarity in articulating the social vision e.g. the English translation of Ram-rajya is Gods Kingdom or the Kingdom of God. Inherent in all these expressions is a desire for the paradigm of paradise. Though there is always a gap between the eternal values and empirical reality, the desire is always for reducing the gap. Therefore, for translating paradigm of paradise into action, organizations in the society need to be run with wisdom so as to ensure good governance and good management. This world vision calls for establishing kingdoms of wisdom rooted in the ideas of HQD which urges human beings to become better human beings. For achieving this global vision, the following three ancient principles of holistic living provide us an operational
framework for creating change towards synergy generation in society and organizations: Astoma sad gamaya; Tamasoma jyotir gamaya; Mrityorma amritam gamaya; When interpreted in the context of organizations, we get the following three foundational principles of management, administration and leadership. From asat style to sat style; From negergy to synergy; From inactive state to active state; These three foundational principles provide us a theory of change from a negative state of affairs towards a positive state. Thus, a transformation from negative energy state to positive energy state is the crux of these principles. Indeed, the action plan to realize the world vision of HQD can be put in the form of following three management mantras: Kranvanto Visvam Swargam; Let there be synergy in the world Kranvanto Sansthanam Swargam; Let there be synergy in organisations Kranvanto Graham Swargam; Let there be synergy at home This action plan requires synergy generation at all levels in a society. When leaders, managers, entrepreneurs and workers turn their efforts into synergy generation, we can expect positive energy in every sphere of life. Hence, we need
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leadership, managership, entrepreneurship and workership together to move the wheel of institutions and organizations. Indeed, greater is the number of synergy generators, greater would be holistic happiness and it would be easier to achieve the dream of good society. This is the essence of HQD for human and social development and a holistic vision of development.
Sharma, Subhash (1996), Beyond HRD: Towards Human Quality Development, in Management in New Age: Western Windows Eastern Doors, New Age International Publishers, New Delhi, pp.157-205. Sharma, Subhash (1999), Quantum Rope: Science, Mysticism & Management, New Age International Publishers, New Delhi. Sharma, Subhash (2002), Character Competence of the Corporation, Journal of Human Values, Vol.8 No.2, July-December 2002, pp.107-118. Sharma, Subhash (2003), Human Quality Development (HQD) Models: Implications for Leadership and Corporate Management, in Developing Leaders, Teams and Organizations, Anup K Singh & Daisy Chauhan (eds.), Excel Books, New Delhi, pp.137-154. Sharma, Subhash (2003), Towards Increasing Per Capita Happiness: Beyond the Western Models of SelfDevelopment, in Conference Proceedings of the 14 th Shanakara Darshana Management Conference on Shaastraas for Shaanti (Scriptures for Peace), organized by Sri Sringeri Sharada Institute of Management, New Delhi, in collaboration with Meenakshi College for Women, Chennai, December 6, pp.1-12. Sharma, Subhash (2003), Towards Corporate VEDA: Indian Ethos & Corporate Development, Journal of Human Values, Vol.9, No.2, JulyDecember, pp.163-172.
REFERENCE
!
Chakraborty S K (ed) (1990), Human Response Development: Exploring Transformational Values, Wiley Eastern Ltd., New Delhi. Covey, Stephen (1990), Seven Habits of Highly Effective People: Powerful Lessons in Personnel Management, Rockefeller Centre, New York. Das G (2000), Vice Chancellors Address, in, National Seminar on Values and Ethics in Business, organized by Department of Business Administration, Utkal University, April 20-21, Bhubaneswar. Goleman, Daniel (1996), Emotional Intelligence: Why It Can Matter More Than IQ, Bloomsbury Publishing Plc, London. Prahlad C K and Gary Hamel, Core Competence of the Corporation, Harvard Business Review, 1990, 68(3), 79-91.
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Making Case Studies Deductive:
A Sampling Method to select foreign companies for studying their FDI strategies in India
AMAR KJR NAYAK1, KALYAN CHAKRAVARTI2 AND PRABINA RAJIB3
ABSTRACT
ase based research is often considered inductive in nature and hence not suitable for theory building. Paradoxically, case based research has produced some powerful theories in management, some best management practices and has become a dominant method of teaching in business
schools around the world. This paper argues that the case based research method can be a powerful tool to build theories in management provided the sampling process is unbiased, scientific and rigorous. The paper suggests a five-stage sampling process, which can be used to improve the reliability, unbiasedness and representativeness of the sample. As an illustration, the five-step sampling process has been applied, in this paper across industry, time and origin of foreign companies in India such that it can lead to development of theory on successful strategy of foreign companies in India.
This paper was submitted for the doctoral paper competition in the First International Conference of the Association of Management Scholar in India, Indian Institute of Management, Bangalore, India. December 28-30, 2003. The paper won the second prize in the competition.
1 2
Assistant Professor, Xavier Institute of Management, Bhubaneswar. India. Email: amar@ximb.ac.in Professor, Vinod Gupta School of Management, Indian Institute of Technology, Kharagpur Assistant Professor, Vinod Gupta School of Management, Indian Institute of Technology, Kharagpur
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I.
INTRODUCTION
The objective of this paper is to conceptualize a Sampling Process in Case Based Research (CBR) method such that the cases selected through this method can provide a reliable, unbiased and representative sample of the population under study. As we enter into this subject, it is important to first ascertain the guiding factor for the sample selection. It is quite logical that the research question should essentially guide the Sampling Process. As an illustration, this paper identifies a research problem, viz., what was the successful Foreign Direct Investment (FDI) Strategy in India during 1900s-2000? Now, this research question is quite complex given the number of variables that have affected the performance of FDI in India. Over the last hundred years, the patterns of direct investment of the foreign companies in India have changed from the colonial period (1900s-1947), to the development period (1947-1990), and to the corporate-dom period (1991 onwards). The foreign direct investment (FDI) strategies of companies have differed from one country to another and they have also differed from industry to industry. Foreign companies following the same strategy have succeeded in some periods and failed in other periods. And, there have also been continuities and discontinuities in the regulatory policies in India during the last hundred
years. In other words, the variables that have affected the success of foreign FDI strategies are many and varied (Nayak, 2000). The multiplicity of issues and the interrelation of these issues make the sample selection rather a complex process. The inability to select a suitable sample of cases in a scientific manner and the inability to visualize the various phenomena through a set of cases have kept most researchers away from using the CBR method of research to develop theories in management. To break this jinx of CBR for theory building, this paper proposes a five-step sampling process such that further study of the sample of cases selected can lead to building of a robust theory.
II. LITERATURE REVIEW

For many scholars, CBR is often considered inductive in nature and hence not suitable for theory building. This method is at best used for exploratory research as it is claimed to lack rigor and is not able to replicate business and management phenomena. Research articles with CBR method have not been popular in most of the journals for a long time due to the above reasoning. Paradoxically, CBR has produced some of the most powerful theories in management, the best management practices and at the same time have become the dominant pedagogy of teaching in management education.
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Strategy and Structure by Alfred Chandler, Jr., (1969) has been one of the management theories that have evolved through CBR method. The Network Theory in International Business by Axelsson & Johanson (1992) is yet another contribution of management theory through CBR method. CBR has produced some best management practices like the Toyota Manufacturing System and Target Costing of Toyota Motor Corporation. Today, Case Based teaching is the predominant method of teaching in business schools around the world. CBR has increasingly gained importance, especially in the last decade. It has been accepted and applied to understand and explain business (William and Hatt, 1981, Eisenhardt, 1989, Yin, 1994, Mintzberg, 1994, Mason, 1995, Dooley, 1997, Cooper and Pamela, 1999). CBR or Clinical research has also gained importance in functional areas of Business Management like Strategy, Finance (Tufano, 2001), Marketing (Johnston Leach and Liu, 1999) and International Business (Yeung, 1995). Yin (1994) and Hamel (1993) provide detailed process of conducting a good Case Study. However, there is not much explanation on how the Case Based Research can be used as an effective tool for discovering new theories in management. There is no systematic approach to selecting cases from a
population before the cases can be studied in-depth that may provide general theories. It is rather suggested by Yin Case Study Method by Hamel (1993) that cases should not be sampled in the Case Study Method. If the sample of cases were not selected in a systematic and scientific manner but hand-picked singly depending on convenience of the researcher, the findings of such a individual case study will remain to be inductive. This paper argues that a systematic and scientific process can be developed to select a sample of cases for detailed case studies. This Sampling Process can be used to select cases in an unbiased, scientific and rigorous method such that the sample of cases chosen represents the population characteristic under study. Further, the findings across the cases from the sample may lead to formulating a theory that is true for the population under question.
III. RESEARCH METHODOLOGY

The methodology for the sampling process was designed on two key principles. First, the sample cases must be reliable, unbiased and representative of the population of foreign companies in India. A representative sample of cases should cut across time of operation (encompassing the colonial period, the development period, and the corporatedom period), origin, industry, size and
40
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performance of foreign companies in India. Second, the sample cases must be representative of the significant issues of FDI in India. The sample cases should also represent the significant issues of past, present and future of FDI in India. The significant considerations for sampling purpose were (a) FDI should involve different types of ownership and control, (from 100% equity to reducing equity, from low (no) equity to increasing equity, and from 100% equity to a steady equity). (b) FDI should have experienced new business structures and competition. (c) FDI should have created an Export Base. (d) FDI was used to strategically shift environmentally costly production bases and, (e) FDI led to business process outsourcing and transfer-pricing. The case based research sampling method (CBRSM) consisted of five major steps. The details involved in each step are explained below. 1. Study of historical trends of foreign direct investment in India, 1900s 2000 Select the sector that is representative of the population of foreign companies Spot the individual companies in the selected sector Sort the individual companies on a three-dimensional (time, origin, & industry) matrix, and Select the companies from the above matrix that satisfy three key
parameters, (entry of company to India prior to 1991, size of company, and consistency in financial performance). 1. Study of historical trends of FDI in India, 1900s 2000
2.
3. 4.
5.
A historical trend of FDI in India during 1900s to 2000 was necessary to take stock of various trends like the amount of investments by foreign companies in India, the number of foreign companies investing in India, the nature and scope of investments during different periods of the century. As many as eighty reports, books, articles, and data bases from different parts of the world were referred to get a continuity of data, triangulate the data and thereby construct the history of FDI in India during the twentieth century (Nayak, 2000). By taking stock of the various trends, the major characteristics of FDI in India during the twentieth century were identified. The CBRSM was designed such that the sample of cases selected through this method represent these FDI characteristics in India during 1900s-2000. Such comprehensive study prior to choosing cases is usually not undertaken by researchers who adopt the CBR method (Hunter and Keir, 1969, Fieldhouse, 1978, Johri, 1983, Tomlinson, 1989, Venkataramani, 1990, Davenport, Hines and Slinn, 1992) and hence their findings are limited to the reality of only the case alone.
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2.
Select the sector that is representative of the population
in the manufacturing sector is most suitable. Dissertation (unpublished), Graduate School of Business, Kobe University, Japan 3. Spot the individual cases in the manufacturing sector
From the historical trends in Step 1, we find that FDI in manufacturing sector has steadily grown over the years and the foreign investment in the nonmanufacturing sector has steadily declined over the years (Figure I). Companies in the non-manufacturing sector show a wide variation in their trends and policies in the Indian context and they seem to lack consistency in their investments in India. For instance, whenever the Government in India incorporated some changes in macro policies of foreign investments, the foreign companies that were not in manufacturing activities preferred to move out of India. Over seventy foreign companies opted to stop their operations in India with the introduction of Foreign Exchange Regulation Act, 1973. Many companies in the manufacturing sector showed better consistency and commitment in their investment policies in India. And, because of greater consistency and commitment of the policies of the companies in the manufacturing companies, these companies are more likely to have steady pattern in their strategies. And, as this study aims to find the strategies that have led to consistent performance over the years, the selection of the companies
Having identified the manufacturing sector in Step 2, spotting all the foreign companies that have operated in the manufacturing sector in India during the hundred-year period, 1901-2000 was necessary. This step is necessary to create an exhaustive list of foreign companies that have manufacturing base in India. Referring to archival and current sources of data is necessary to build an exhaustive list in order to account for companies in this sector that have survived and that have not survived during the hundred-year period. A wide range of data sources were used to gather information of the names, their operations in India and their performance during the period of the study. Data from nearly 25 sources from various University Libraries, Public Libraries, Government Libraries and National Archives in Japan and India were searched. A wide range of sources were used to triangulate the data on foreign companies and their pattern of investments in India. The data on the number of new companies below provides the macro data on the number of foreign joint ventures in India.
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4.
Sort the individual companies on a three-dimensional matrix.
Sorting the companies identified in Step 3 was necessary to make the case selection unbiased and representative of the population. The foreign companies were segregated on each of the three key dimensions viz., time of entry, country of origin, and industry of their operation. (Refer to Table I, Table II, and Table III). These companies were then organized in a three-way matrix. Each of these dimensions may have had the bearing on the FDI strategy of the companies in India during the hundred-year period as we observed the historical trends in Step 1. The three-way classification also helps the researcher to get an overall glance of all the companies in the subpopulation, the manufacturing sector. This in turn helps the researchers to be unbiased to any of the dimensions and hence the sampling of cases is representative. Table IV in the next page shows the three-dimensional matrix. 5. Apply the three key selection parameter on the population matrix
The three parameters together provide sufficient duration for testing a strategy, reflect the ability to adopt a wide variety of investment strategies and show the consistency in performance of the companies. a. Year of entry prior to 1991
Three key parameters (a) operation of foreign companies in India prior to 1991, (b) annual sales of over INR 100 Crore, and (c) consistency in financial performance were applied on the population matrix to obtain the sample that will best represent the investment strategies of foreign companies in India.
In order to understand the strategies employed by a company and the outcome of these strategies, it is necessary that we study companies that have some appreciable history of operation in India. The outcome of a strategy employed by a company could be seen only after a few years of implementation of these strategies. Moreover, outcomes of investment strategies in manufacturing sector, which was the focus of our study, can be observed and subsequently recorded only after some appreciable period after the implementation of strategy. Therefore, in CBRSM, we chose companies that have at least a history of ten years of operation in India. That is a foreign company qualifies as a case for the sample if it had started operation in India prior to 1991. Table VI shows the companies that qualify on this parameter. b. Size of the company
Choosing sample cases from all the three categories of small, medium, and large companies, due to the large dispersion among firms of a highly heterogeneous sample, is likely to produce confusing and
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contradictory strategic choices of firms. Moreover, small and medium sized firms, due to greater resource constraints, tend to exhibit less of their characteristics as compared to large firms. The approach adopted here is different from pure science where, simpler specimens are studied to infer about larger and complex organisms. For instance, in biological sciences, simple specimens are studied to understand issues like biological cycles or memory processes. This understanding is then tested and applied to understand more complex organisms like the human beings. In understanding strategic behavior of firm, it is necessary to select sample cases that are large in size than cases that are small or medium in size. The large sized companies are better suited for the study because they are likely to exhibit their behavior explicitly (in our case the strategic investment decisions) than the small sized firms. Unlike the larger firms, the small sized firms cannot take many of the strategic decisions because of severe resource constraints. In other words, even if small and medium firms inherently want to grow in size and performance like the large firms (Edith Penrose, 1956), they cannot because of their limited resource base. Moreover, large sized companies are resource rich and they in-turn are capable of influencing the environment. Because of their size, they draw much attention
by the consumers, government, researchers and academicians. Further, large sized companies have organized data, which can be accessed, especially for studies of this kind. Hence studying large sized companies is likely to reveal better the characteristics of a firm. Knowing the FDI strategy of large companies will then help us to infer the FDI strategy of firms in general, including that of the small, medium and large firms. For this study, foreign companies with annual sales of over INR 1000 crores (INR 10,000 million) in the year 2000, the terminal years of the study-period have been considered. Table VI shows the cases that qualify on this parameter. c. Financial performance
The CBRSM considers that the consistency in financial performance of companies over a longer period of time will confirm the robustness of the strategy employed. In this study, two financial performance measures were used as the qualifying criteria for sample selection. First, profit generating ability (PBDIT) that is the profit of the company before depreciation, interest and tax. This subparameter is a good index to measure the performance of the companies across the industries. Therefore, it helps to sample cases across the industries in the manufacturing sector. Second, profits sharing ability (PAT) that is profit after
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depreciation, interests and taxes. This index can better compare companies within an industry and thus help better selection of cases from within the industry. The financial performances of the companies for the last ten years of the study that is from 1991 to 2000 were evaluated for their consistency in performances. Cases with fluctuation in the above financial indicators during the ten-year period were rejected due to inconsistency in their performance. Cases that showed steady improvements in both the profit-generating ability and profit sharing ability were chosen for the sample. Figure II to Figure VIII shows the variability in profit generating abilities (PBDIT) of foreign companies in different industries during 1991-2000.
thus selected also encompasses largely the typical characteristics of the population of foreign companies and Foreign Direct Investment in India during 1900s-2000. This fulfills the second principle as laid out in the Sampling Process of this paper. a. Cases that involve different types of ownership and control; viz., from 100% equity to reducing equity (ITC), from low equity to increasing equity (MUL), and from 100% equity to a steady equity (HLL). Cases with FDI that aims to build Export Base (MUL, ITC, & HLL) in the host country, India. MUL exports to more than 70 countries world over. Both ITC and HLL are star trading companies in India. Cases with FDI for Business Process Outsourcing (Knowledge transfer from HLL to other countries) and Transfer Pricing (common feature of most foreign companies including the three cases chosen) Cases with FDI as a means to strategically shift environmentally costly production bases (ITC has strategically shifted the production of tobacco leaves and cigarettes from USA and UK to India) Cases with FDI that create new governance structures and competition in the future (all the three cases chosen have altered the
b.
c.
IV. RESULTS
Finally, four representative companies were selected through the five-step sampling process. The sample consists of companies that have operated for different lengths of time, with different countries of origin and also from different industries. The sample of four cases and the quality of the parameters on which the cases were chosen are shown in Table V. We may choose only one of the two cases from the same industry (Personal & Health Care) for the further clinical research. Interestingly, the sample cases
d.
e.
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dimensions of competition in their respective businesses viz., HLL in personal care and food, MUL in automobile and ITC in tobacco and agro based business)
V. CONCLUSION
The CBRSM followed the five-step process to sample the cases and eventually choose the cases that are reliable, unbiased, and representative of the population. From the sub-population of the manufacturing sector, the cases that possessed all the three key selection parameter were found to qualify for further clinical research. To triangulate the characteristics of the cases chosen through the five-step process, the sample that qualified for clinical research was tested for possessing the major characteristics of FDI in India during the hundred-year period, 1901-2000.
The success of case based research to develop new theories depends on the sampling process for choosing the cases. A sampling process should essentially begin with a broad study of the whole population. The data at this stage needs to be the triangulated from different sources to validate the information obtained, spot the likely cases and make it as exhaustive as possible and then sort these cases in a manner that the cases chosen capture the majority of the characteristic of the population. A detailed clinical research that especially uses the power of triangulation of data from various sources, on such scientifically selected sample of cases can capture the various dynamics in a business phenomenon in a better manner and especially when we study the FDI strategy. The findings from such a research method would not be far from providing a robust theory.
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APPENDIX
TABLE I TIME-WISE CASES
PERIOD
Until 1920 1921-1940 1941-1960
COMPANIES
Forbes Gokak, Parry & Company, Binny & Company, Unilever, Denso, Goodlass Nerolac, ITC Ltd., Glaxo, Ludlow Jute, etc. ICI, Philips, Swedish Match, Colgate Palmolive, General Motors, Ford Motors, Alfa Laval, BOC, Dunlop, VST Industries, Metal Box, Godfrey Philips, etc. Horlicks Limited, Cadbury Industries, Bayer, Siemens, Nestle, Electrolux, Vicks Products, IBM, Caltex, Standard Oil Co, Asahi Glass, Shimada, British Leyland, Grindwell Norton, BASF, Knoll, Novartis, Parke Davis, Pfizer, Abbot Universal, Otis Elevators, Mosanto, Sandvik, Pharamcia, etc. BPL, Continental-AG, Castrol, Cummins, Gulf Oil, E Merck, Procter & Gamble, Widia(India), Precision Gears, Frick Company, etc. Bayer ABS Ltd., Castrol, ITW Signode, J&P Coats, Saint Gobain, Singer Machine, Yuken, Akzo Nobel, Daewoo Motors, Gillette India, Henkel, Honda Motors, Suzuki Motors, Hewlett Packard, Honda Motors, Toyota Motors, Nissan Motors, ABB, Watsila Oy, etc.
1961-1980 1981-2000
TABLE II ORIGIN-WISE CASES

COUNTRY OF ORIGIN
United Kingdom
NAMES OF COMPANIES
Forbes Gokak, Parry & Company, Binny & Company, Glaxo, ICI, BOC, Metal Box, Dunlop, Godfrey Philips, British Leyland, Cadbury, VST Industries, Goodlass Nerolac, Unilever, ITC Limited, BPL, J&P Coats, Horlicks, etc. Ludlow Jute, Colgate Palmolive, General Motors, Ford Motors, Vicks Products, IBM, Caltex, Standard Oil Co, Parke Davis, Pfizer, Otis Elevators, Mosanto, Castrol, Cummins, Gulf Oil, E Merck, Procter & Gamble, Singer Machine, Gillette India, Hewlett Packard, Cummins, Frick Company, ITW Signode, etc. Asahi Glass, Shimada, Denso, Yuken, Honda Motors, Suzuki Motors, Honda Motors, Toyota Motors, Nissan Motors, etc. Philips, Swedish Match, Alfa Laval, Electrolux, Bayer, Siemens, Nestle, BASF, Grindwell Norton, Pharamcia, Watsila Oy, Continental-AG, Knoll, Novartis, Sandvik, Precision Gears, Saint Gobain, Akzo Nobel, Henkel, etc.
USA
Japan E.U.
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TABLE III INDUSTRY-WISE CASES

INDUSTRY
Automobile Health Care & Food Tobacco Pharmaceuticals Electronic & Machinery Paints & Chemicals Others
COMPANIES
General Motors, Ford Motors, British Leyland, Toyota Motors, Nissan Motors, Honda Motors, Suzuki Motors, Daewoo Motors, Asahi Glass, Denso, etc. Unilever, Colgate Palmolive, Procter & Gamble, Nestle, Cadbury India, Parry & Co., Vicks Products, etc. ITC Limited, Godfrey Philips, VST Industries, etc Glaxo, BASF, Bayer, Knoll, Abbot Universal, Parke Davis, Pfizer, E Merck, Novartis, Pharmacia, etc. Forbes Gokak, Philips, Swedish Match, Electrolux, Alfa Laval, IBM, Hewlett Packard, BPL, ABB, Watsila Oy, Singer Machine, Cummins, Precision Gears, Sandvik Asia, Frick Company, Siemens, etc. ICI, Goodlass Nerolac, BOC, Caltex, Standard Oil, Castrol, Gulf Oil, Mosanto, Akzo Nobel, Henkel, etc. Ludlow Jute, Dunlop India, Metal Box, Continental-AG, Otis Elevators, Yuken, Gillette India, Grindwell Norton, ITW Signode, Binny& Co., Saint Gobain, etc.
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TABLE IV
TIME-ORIGIN-INDUSTRY MATRIX
Time / Origin U.K. INDUSTRY Automobile Health Care Tobacco Pharmac- Electronic & Food eutical Unilever Imperial Glaxo Forbes Parry & Co. Tobacco Co Gokak BAT. Peninsular. Tobacco (ATC) Denso Godfrey Phillips VST Ind. ILTD Paints Goodlass Nerolac Others Binny & Co.
Until 1920
U.S.A.
Japan E.U. U.K.
Until 1921-1940
ICI BOC
Dunlop VST Metal Box
U.S.A.
General MotorsFord Motors
Colgate Palmolive
Japan E.U.
Philips Swedish Match Alfa Laval British Leyland Horlicks Cadbury Vicks Product
U.K.
Until 1941-1960
U.S.A.
Parke Davis Abbot Labs Pfizer
IBM
Caltex, Otis Elevator Mosanto Standard Oil
Japan E.U.
Asahi Glass Shimada Nestle Pharmacia Bayer, BASFKnoll, Novartis E Merck Siemens Electrolux Sandvik BPL Cummins, Frick Co. Widia(India) Precision Gears Castrol General Motors Ford Motors Suzuki, Nissan, Honda, Toyota Singer, Gillette HP, IBM Grindwell Norton
Until 1961-1980
U.K. U.S.A. Japan E.U.
Procter & Gamble
Gulf Oil
Continental A.G J & P Coats ITW Signode Yuken
Until 1981-2000
U.K. U.S.A.
Japan
E.U.
ABB, Watsila Punjab Anand
Akzo Henkel
Saint Gobain
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TABLE V
COMPANY ORIGIN INDUSTRY YEAR OF ANNUAL SALES IN ENTRY YEAR 2000 >INR 1000 CRORE (INR 10,000 MILLION) 1932 1959 1982 CONSISTENT PERFORMANCE (1991-2000)
HLL (UNILEVER) NESTLE INDIA (NESTLE) MUL(SUZUKI MOTORS) ITC LTD(BAT)
UK SWISS JAPAN
HEALTH CARE & FOOD HEALTH CARE & FOOD AUTOMOBILE
UK / USA
TOBACCO
1906
TABLE VI ENTRY-SIZE-PERFORMANCE MEASURES

INDUSTRY NAME OF THE COMPANY General Motors Ford Motors British Leyland Daewoo Motors Toyota Motors Nissan Motors Honda Motors Suzuki Motors Vicks Product Proctor & Gamble Colgate Palmolive Pepsi Coke Parry & Company Unilever Cadbury Nestle Godfrey Philips BAT VST Industries Parke Davis Pfizer Abbot Universals E Merck Glaxo Bayer ENTRY PRIOR TO 1991 SALES ANNUAL> RS. 1000 CRORES FINANCIAL PERFORMANCE AS IN YEAR 2002 (PBDIT, & PAT)
AUTOMOBILE
PERSONAL CARE & FOOD
TOBACCO
PHARMACEUTICALS
50
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INDUSTRY
NAME OF THE COMPANY

Knoll BASF Novartis Pharmacia IBM Hewlett Packard Singer Machine Cummins Frick Company ABB Siemens Philips Swedish Match Electrolux Alfa Laval Sandvik Asia Precision Gears Watsila Oy Forbes Gokak BPL Caltex Standard Oil Castrol Gulf Oil Mosanto ICI Goodlass Nerolac BOC Akzo Nobel Henkel Ludlow Jute Otis Elevator Gillet India ITW Signode Binny & Company Dunlop India Metal Box Continental AG Grindwell Norton Saint Gobain Yuken Bata
ENTRY PRIOR

SALES FINANCIAL PERFORMANCE ANNUAL > RS. AS IN YEAR 2002 TO 1991 1000 CRORES (PBDIT, & PAT)

ELECTRONICS & MACHINERY
LUBE OILS, CHEMICALS & PAINTS
OTHERS
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FIGURE I
Sectoral Shift in Foreign Investments in India, 1921- 2000
10 0 9 0 Non Manufacturing 8 0 7 0 6 0 5 0 4 0 3 0 2 0 1 Manufacturing 0 0 12 91 13 98
14 98
15 95
16 90
19 91
20 00
SOURCE: NAYAK, AMAR KJR (2000), PATTERNS OF FDI IN INDIA, 1900S-2000, MASTERS
FIGURE II AUTOMOBILE INDUSTRY PROFIT GENERATING ABILITY (PBDIT)
2500 2000 10 Million INR 1500 1000 500 0 -500 Years: 1991-2000 Ashok Leyland Ford Motor MUL Honda Siel Daewoo Motors
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FIGURE III PERSONAL CARE & FOOD INDUSTRY Profit Generating Ability (PBDIT)
2000 1500 10 Million INR 1000 500 0 -500 Years: 1991-2000
Parry
HLL
Cadbury
C-P
P&G
Nestle
Source: Center for Monitoring Indian Economy
FIGURE IV TOBACCO INDUSTRY Profit Generating Ability (PBDIT)

1800 1600 1400 1200 1000 800 600 400 200 0 -200 Years: 1991-2000 Godfrey Philip ITC Ltd. VST Industries
10 Million INR
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FIGURE V ELECTRONIC & MACHINERY INDUSTRY Profit Generating Ability (PBDIT)

250 200 10 Million INR 150 100 50 0 -50 Years: 1991-2000 Philips ABB Sandvik BPL Siemens Cummins Wartsila Widia Alfa Laval Electrolux-K
FIGURE VI
PHARMACEUTICAL INDUSTRY Profit Generating Ability (PBDIT)
900 800 700 10 million INR 600 500 400 300 200 100 0 Years: 1991-2000
Bayer. Pfizer Pharmacia GS Abbott Novartis SB E Merck BASF Parke Davis Knoll
54
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FIGURE VII LUBE OILS, PAINTS & CHEMICALS INDUSTRY Profit Generating Ability (PBDIT)
300 250 200 10 Million INR 150 100 50 0 -50 -100 Year: 1991-2000 ICI Goodlass Metal Box Dunlop BOC Castrol Gulf Oil
FIGURE VIII
OTHER INDUSTRIES Profit Generating Ability (PBDIT)
80 70 60 50 40 30 20 10 0 -10 -20 Years: 1991-2000
10 Million INR
Akzo Nobel ITW Signode Otis Elevator
Henkel Spic Grindwell Singer India
Bata India Gillette Yuken India
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REFERENCES
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Chandler, Alfred Jr. (1969), Strategy& Structure: Chapters in the History of the American Industrial Revolution, MIT Press Cooper Donald R. & Schindler, Pamela S. (1999), Business Research Methods, Tata McGraw Hill, New Delhi Davenport R.P.T.-Hines and Judy Slinn (1992) Glaxo: A History to 1962, Cambridge University Press. Dooley, David (1997), Social Research Methods, Prentice hall of India Private Limited, New Delhi Eisenhardt, Kathleen M. (1989), Building Theories from Case Study Research, Academy of Management Review, Vol. 14 Eisenhardt, Kathleen M. (1991), Better Stories and better Constructs: The Case for Rigor and Comparative Logic, Academy of Management Review, Vol. 16:3 Fieldhouse, D.K. (1978) Unilever Overseas, The Anatomy of a Multinational 1895-1965, London: The Hoover Institution Press. Hamel, Jacques, Dufuor, S. & Fortin D. (1993) Case Study Methods, Qualitative Research Methods Series 32, Sage Publication, Newbury Park , London, New Delhi. Hunter, J.B.K & Keir, D., (unpublished, 1969) Manuscript of the Coats History Johnston, Westley J., Leach, Mark P & . Liu Annie H. (1999), Testing Theory using Case Studies in Business-to-Business Research, Industrial Marketing Management, Vol. 28, Issue 3
Johri, Lalit M. (1983), Business Strategies of Multinational Corporations in India: Case study of Drug and Pharmaceutical Industry, Vision Books Pvt. Limited, New Delhi Mason, Robert. (1995), Qualitative Researching, Sage Publication, Thousand Oaks, CA. Mintzberg, Henry (1994), The Rise and Fall of Strategic Planning, Free Press, New York. Nayak, Amar KJR (2000), Patterns of FDI in India, 1900s-2000, Masters Dissertation (unpublished), Graduate School of Business, Kobe University, Japan Tufano, Peter (2001), HBS-JEE Conference Volume: Complementary Research Methods, Journal of Financial Economics, Vol. 60, Issues 2-3 Venkataramani, Raja (1990), Japan enters Indian Industry: the Maruti-Suzuki Joint Venture, Radiant Publication, New Delhi Welch, C., Piekkari, R.M., Pettinen H., Tahvanainen, M. (2002), Corporate Elites as Informants in Qualitative International Business Research, International Business Review Vol. 11, Issue 5 William J. Goode & Hatt Paul K. (1981), Methods in Social Research, McGraw Hill, London Yeung, Henry Wai-Chung (1995), Qualitative Personal Interview in International Business Research: Some Lessons from a study of Hong Kong Transnational Corporation, International Business Review, Vol. 4, No.3, p: 313-339 Yin, Robert K. (1994), Case Study Research: Design and Methods, Sage Publications, Thousand Oaks, CA.
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RESETTLEMENT AND REHABILITATION:
From Policy Guidelines to Practice A Case Study

LATHA RAVINDRAN1
ABSTRACT
n India, several development projects have been initiated and implemented to
fight against poverty and economic stagnation. Projects such as creation and upgradation of infrastructure such as power, transport, mines and industries are needed for economic development of a country, but such induced
development runs several risks, one among which is involuntary displacement of people and loss of economic and other assets owned by them. Policies are being framed at the aggregate as well as at the sectoral levels with an objective of improving the living standards of the affected population, through various resettlement and rehabilitation plans. The efforts on resettlement and rehabilitation, which until recently used to be more a knee-jerk reaction, is currently undergoing a change, trying to become a more planned and participatory one. During research study one of the objectives was to find out and analyse whether there was any deviations between the policy on resettlement and rehabilitation and the manner in which such policies were translated into practice. The research work was undertaken in a hydroelectric power project in Orissa, called the Upper Indravati Project. At the time of the study, since the policy itself was in its initial stages of formulation, the implementation process went through a lot of trial and error. Some of the decisions and strategies were successful, while others were not. The best possible outcome of resettlement and rehabilitation in this project was the kind of education and learning it offered to the funding agency, namely the World Bank, the implementing agency, namely the Water Resources Department of the Govt. of Orissa, social activists, academicians, policy makers and above all, the displaced themselves.
Professor, Xavier Institute of Management, Bhubaneswar. India. Email: lata@ximb.ac.in
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INTRODUCTION
It is rightly said that by the turn of this century and millennium, the world will be more crowded, more polluted, less stable, more vulnerable and will see the widening of disparity between the haves and havenots. Over-exploitation and dwindling of resources coupled with ever increasing human demands pose great challenges for the policy-makers who are planning to induce the process of development. In India, after independence, many major development projects have been initiated and implemented by the central and the state government to fight against poverty and economic stagnation. Some of the major areas of intervention have been development of infrastructure by way of power (mostly hydroelectric and thermal power) transport, communication and large scale mining operations. Such an induced development runs a risk of causing social disruption while attempting to bring benefits to people. Rob Peter to pay Paul? One type of profound social disruption that occurs is the forced or involuntary displacement of populations. The most visible negative externalities of development are the acquisition of land and other immovable properties and displacement of people by uprooting them from their original places of habitats. While the activists are against the principle of Rob Peter to pay Paul,
those in charge of implementing such projects defend that sometimes few have to make sacrifices in the interests of the larger populations. And the debate continues. However, there is little disagreement about the fact that displacement is a sacrifice made of the displaced and eventually causing sufferings and hardships him. In the words of Michael M. Cernea, (1991) Research has shown that compulsory dislocation causes special cultural, economic and technical problems that are not only largely different from, but usually more severe than, those entailed by voluntary migration and relocation. A feeling of alienation, helplessness and powerlessness is instilled in those uprooted, social cohesion is weakened, and increased psychological and sociological stress diminish the initiative and capacity for collective action of those affected.
POLICY INTERVENTION
Considering the human rights perspective, the World Bank (1990) has framed a basic policy on Resettlement and Rehabilitation. The Banks policy is to provide people displaced by a project with the means to improve or at least restore their former living standards, earning capacity and production levels through their own social and cultural institutions.
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The strategy for R&R, which used to be only as a knee-Jerk welfarist reaction is currently undergoing a change towards a more planned and participatory one. Since 1990, lot of focus is being laid on planning for Rehabilitation of the displaced population. Since 1985, until recently, there were two or three versions of a draft National Rehabilitation Policy in the country. It is quite surprising that none of the policies was made available for public. In fact, the most important of them, the ministry of Rural Developments National Policy (MRD-NP), was marked Secret on every page. One got to know of the existence of a draft policy from a few articles (1994-95) published in journals. The Govt. of India has finally promulgated a rehabilitation policy for the project displace persons in the year 2003, called National Policy on Resettlement and Rehabilitation for Project Affected Families (NPRR 2003) and brought it out as a resolution on 17th February 2004. Prior to this, in the absence of any National level policies for Rehabilitation, it is left for the concerned project authorities to prepare the plan for Rehabilitation and implement them in accordance with various circulars issued by the concerned State Government, as it has happened in resolutions and executive instructions, dating from 1977 to 1993 which have guided the project authorities in implementation of R&R
activities.(1996) For instance, in the state of Orissa, today there are as many as eleven R&R policies. While three among them are operational in irrigation, industry and mining projects, the remaining eight are under promulgation for different private sectors. The resettlement and rehabilitation of the people who got displaced by the Upper Indravati Hydro electric Project which came up during the 80s and 90s, was governed by the R&R policy for the irrigation sector.
UPPER INDRAVATI PROJECT

The Upper Indravati hydro-electric Project of Orissa is a development intervention of the Government of Orissa initiated with the financial assistance from the World Bank, which wanted the Resettlement and Rehabilitation unit of the project to formulate a systematic and feasible Rehabilitation Action Plan to focus on improving or at least restoring the standard of living of the persons displaces by the Project. In order to provide a comprehensive data-base on the socio-economic profile or the people displaced by the project, Xavier Institute of Management carriedout a base-line census survey in 1994 and submitted report to the Government of Orissa and World Bank. This paper attempts to provide in a nutshell, various strategies adopted by the R&R Unit to implement resettlement and
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rehabilitation activities for the displaced persons. This is a project where by, attempts have been made to have the process of resettlement and rehabilitation in the participative lines.
Project Affected Area

The Upper Indravati Hydro-electric Project, situated in the districts of Kalahandi and Koraput of Orissa, is expected to irrigate 1.28 lakh hectares of agricultural land and generate 600 MW of electricity every year. Due to construction of the dam and Reservoir, 97 villages from erstwhile undivided Koraput district and 53 from Kalahandi district have been affected, Of these, 31 villages and 34 villages, respectively, are directly affected due to submergence after the reservoir gets impounded. A total of 32,530.87 acres of land i.e., private, forest and revenue land have been acquired. Besides land, other types of social infrastructure such as drinking water sources, schools, health centers, markets, credit sources etc., existing in these villages also would go under submergence. (6)
proportion of the displaced. (7) While the male literacy is about 38%, that among women is abysmally low at around 1%, (1994). While agriculture was the primary source of livelihood, livestock provided secondary source of income to these families before they were displaced.
Approach and Strategies for Resettlement

For resettling the displaces families, the R&R Unit initially identified Government land s for forming a Rehabilitation Colony at Sashahandi in Jeypore subdivision and at Taljaring in Kalahandi district. But the displaced families rejected the idea of resettling in Government sponsored colonies and wanted to choose the places on their own for resettlement. The R&R Unit provided absolute freedom to choose their places for resettlement. Since the process of evacuation and resettlement for the displaces families in this project has been most orderly and successful one, it can be considered one of the models for emulation for resettlement. Hence, it is worthwhile to elaborate on various stages in which the resettlement process has taken place.
Project Affected People

According to the R&R Unit, there are 5344 families displaced from 65 villages, covering a population of 17,000 (1981 census). Of these 5344 families, 792 (14.82%) belong to the schedules caste and 2260 (42.29%) are from various tribal communities, which is quite a significant
Enumeration
In India, even now, a complete survey of submergence area, enumerations of all affected households and persons are not considered as an integral part of project appraisal. The definitional limitations
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leave a number of households out of enumeration. (9) During enumeration, the name and age of the people should be exhibited in the list. The census date should be taken as the guide for enumeration. In the absence of census data, voters list and school certificate may be taken as a guide for enumeration. In the absence of all these documentary evidences, the cases can be disposed off through a local enquiry. As a precautionary measure, a provision was made whereby, on local enquiry, decision could be taken by a committee constituted by the Special Land Acquisition Officer and the R&R Officials. In accordance with the liberalized policy of the Government of Orissa,(1993) the families enumerated earlier (once in 1978 considering the date of laying foundation stone to be the cut-off date and later in 1987-88 after the reference date was modified to be the date of publication of the notification under Section 4 (1) of Land Acquisition ct of 1894) were once again updated based on 1st January of the year in which actual displacement has taken place. By this process, so far, 5344 families have been identified, evacuated and resettled in about 560 different locations of their own choice. All these families are entitled to receive and have received resettlement and rehabilitation assistance. The base line socio economic survey conducted by XIM covered 4400 displaces families, of whom 4119 heads of the
families are alive According to the findings of the survey, (i) 3922 DPs (displaced persons) i.e. 95.22% of the DPs were contacted personally during enumeration and the remaining 197 DPs (4.78%) who were left out were later considered on various grounds. (ii)The Amins, Revenue Inspectors, Zone Officers and the Assistant Resettlement and Rehabilitation Officers have played a vital role during enumeration, for ensuring physical presence of people during enumeration and in the age assessment of all major sons.
Eligibility Criteria for R&R Assistance

(As on 1994 during when the base line socio-economic survey was conducted) According to the Irrigation and Power Department, a Displaced Person (DP) means: A person who on account of the Acquisition of his lands for the purpose of the major and medium irrigation projects, has been displaced from such lands, including any landless and homeless persons, who is dependent for his livelihood, by manual labour, on agricultural land immediately before the area comprising such land is taken up for acquisition by the project and who is being deprived of such livelihood on account of acquisition of the lands. (20.4.77) In the year 1990, two clauses were incorporated I the definition viz., (i) a son who is more than 18 years of age
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irrespective of his marital status and (ii) physically and mentally retarded persons, irrespective of their age and sex. (21.08.90) Later, in 1992, two more additions were made viz., (i) minor orphans who have lost both the parents and have no one to fall back upon (20.04.92) and (ii) divorcees with dependent child/children and divorcees without children but having no source of livelihood. (14.07.92) Windows of the displaces persons have also been considered eligible for R&R assistance.
of land for the previous three years. A solarium cost of 30% was added to it. An annual interest of 12% was given for the period of delay in payment of compensation commencing from the date of publication of notification under section (1). And an additional interest of 6% per annum was paid for further delay after the Land Acquisition Officer had taken possession of land. Besides agricultural land, acquisition of homestead land, house, trees, wells and tube wells have also been compensated. In addition to private land and other immovable properties, revenue land, forest land and village common land were also acquired by the Government by principle of Alienation of Government Land. (16)
Land Acquisition
The Land Acquisition Act of 1894, amended in 1984 and 1985 forms the basis for acquiring land and other immovable properties required by the State for a public cause. This have aroused significant amount of public debate, the opponents of which question the verosity of the eminent domain. (1996) As per Section 4 (1) of this Act, notification was published in official Gazette and in two of the local daily newspapers. Concerned villages were also notified by attaching notices in public places. The procedures adhered to were as stipulated in the LA Act. The Act stipulate payment of all compensation by cash only and hence the same were followed in UIP. The land value as assessed on the basis of value
Evacuation
According to the Policy guidelines, at least six months prior to evacuation, wide publicity should be given in the village so that people should be fully aware about their evacuation. (1993). The survey was found that majority of the displaced families, i.e., 97.47% of them were aware of the forthcoming evacuation more than four to five years prior to evacuation. (18) The survey conducted by the Land Acquisition and Rehabilitation organization during 198788 made many people aware about the project and inevitable evacuation in future.
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Evacuation notice was served to the villages at least three months in advance. According to the findings of the study, (19) 95.1% of the displaces families were served with a general notice. The study also found that nearly 70% of the people evacuated within three months of being served the notice. (20) According to the policy guidelines, about one or two months prior to shifting, a meeting should be held by the Revenues Divisional Commissioner (RDC). Other participants are the DIG of police, SPs, Collectors, Chief District Medical Officers, and the Inspector of Schools of concerned districts, the additional Chief Engineer, the Superintending Engineer of Rehabilitation, the Deputy Commissioner of Rehabilitation, the Resettlement and Rehabilitation Officer and the Special Land Acquisition Officer. Meeting were held in different submergible villages to plan evacuation and about 95% of the displaces persons could recall the substance of what was discussed in the meetings. (21) The social-economic survey has also highlighted the following aspects of evacuation:
!
facilities. Some families could even carry more than 20 truckload full of articles (including cow dung, hay, etc.) as there were no restrictions on the number of truckloads to be transported.
!
Nearly 80% of the displaces persons evacuated with R&R staff assistance conveyed that food packets were provided to them. Although policy guidelines stipulate that medical facilities should be made available to the DPs at least for 15 days after evacuation is completed, only few could get such facilities. Planning for evacuation and resettlement assumes considerable importance in terms of sequencing of various events and activities. Selection of site/homestead land, construction of houses must proceed actual evacuation. Planning and sequencing of activities must be done meticulously enumeration, conveying information to people about evacuation, frequent visits to the submergible villages by the R&R staff to motivate people to evacuate, issuing official notice to villages, and village meeting for planning to evacuate. Setting-up deadlines, implementing such activities, proper coordination by the R&R staff and cooperation by the people are extremely important in order to make
Nearly 61% of the evacuees have been provided with transport facilities by the R&R Unit and the remaining selfevacuees were given the selfevacuation allowance. Most of the displaced conveyed that they have availed adequate transport
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the process of evacuation less painful to the people.

!
The project authorities should keep in mind various seasons such as occupational, religious and cultural practices while recognizing and respecting the sentiments of the tobe-displaced population. For the R&R staff of UIP, the transportation become a stupendous task because the displaces, who were given the freedom to choose the place for resettlement, had actually chosen interior and inaccessible areas spreading across 560 different locations. It is worth mentioning that the process of evacuation and settlement was an extremely smooth operation
in UIP. Not a single law and problem was created during evacuation. Credit should go to the displaced for not creating any law and order problem for the authorities.
Resettlement
While giving the reasons for choosing the place for resettlement, people have very clearly exhibited their priorities. Amongst various reasons, the majority looked for availability of resource base such as land and forest, and presence of friends and relatives in the host areas. This finding tends to confirm that people would like to have economic resources base as well as ecological and social environment. Proximity to schools and health centres have assumed back seat in their priorities.
Policy Guidelines for Resettlement and Rehabilitation Packages (i) The R&R benefit package has been extended to the displaces families in four phases as presented in the following:
Phase & Year I & II 1989 & 90 2. Homestead Land 3. House Building III & IV 1991 & 92 1. Agriculture Land of irrigated land 2. Homestead Land 3. House Building 0.2 Ac House on Government land Rs.3,200 Rs.17,000 Item 1. Agriculture Land Land-based programme 5 Ac. of un-irrigated or 2.5 Ac of irrigated land 0.5 Ac House on Government land 2.5 Ac. of un-irrigated or 1.25 Ac Rs.1,825 Rs.9,500 Rs.20,00 Cash-based programme Rs.18,250
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ii)
Moreover, all the displaces families have received maintenance allowances at Rs.500 per month for one year after being evacuated from the submergible villages.
ix) Where the number of displaces families exceeds 30 based on the necessity, a tank and two-roomed school building have to be provided. x) Link road have to be provided to resettlement clusters.
iii) Registration fees and stamp duty admissible during the time of registration of land has been reimbursed by the R&R Unit since December 1992. iv) The R&R unit provided free transport facilities with loading and unloading charges provided for the evacuation with no limit on the number of trucks availed or distance covered. v) In case a family opts for selfevacuation, an allowance of Rs.300 was paid towards the same.
No such civic amenities however, are provided in location where less than ten displaces families are resettled in scattered manner. (22)
Land Ownership Pattern

The socio-economic survey has found that nearly 73% of the rehabilitation assistance has been spent in purchasing agricultural lands. More than 91% of the displaced families are possessing land. The number of landed persons are much more after displacement because, most of the landless persons got an opportunity to possess land from the rehabilitation assistance. According to the latest statistics provided by the R&R unit, 5128 families out of 5344 displaces families (nearly 96%) have purchased agricultural land. The survey has found that after displacement, there is a sharp decline in the average size of the holdings from 4.36 acres to 1.50 acres of irrigated land and from 5.32 acres to 1.97 acres of unirrigated land. At the same time, 1062 displaces families who were totally landless before displacement, have become owners of agricultural land a move towards more egalitarian
vi) Dry Food packets were provided during the transit. vii) The families displaced during the first two phases who failed to utilise the R&R package assistance for the afore mentioned purposes were provided later on with an additional rehabilitation assistance with a maximum of Rs.20,000 per family. viii) The R&R policy provides for installation of one tube well/open well in resettlement clusters having at least ten displaced families. If the number of families in a cluster is more, more number of tube wells/ open wells are to be installed depending upon the location of the houses and requirement.
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distribution of land holdings. This could be a piece of information for the socialists to cherish upon. The latest information brochure prepared by the R&R Units reveals that, the 5128 families displaced, own on the whole 4734.59 acres of irrigated land and 8030.73 acres of unirrigated land. Due to this sudden spend in the demand of land, its price has escalated drastically. One of the vital findings of the study is related to the quality of land purchased by the people. On ranking the 27 different types of agricultural land owned by the people before and after displacement, a weighted average index for the land quality was developed. Student T-test was applied to look for difference in the quality of land purchased by the people after displacement. The T-value is not significant at all. There are projects where land-to-land policy is adopted, the major discontent ion among the displaces in regarding very poor quality of land being provided to them. In contrast to such projects, in UIP the displaces have been given the liberty to select and purchase land; and the people have not bought land that is poorer in quality in comparison to what has been acquired from them. The socio-economic survey has provided empirical evidence to this fact. A displaced person comes to the R&R Unit with a willing seller of the land of the buyers choice. On negotiation with the
willing seller of the proposed land, money is released and paid at the time of registration. Until such time, the money is deposited in the DPs Saving Bank Account and the passbook is maintained by the R&R Unit. This strategy was adopted only from the third phase onwards after realizing that the displaced people on the initial two phases were not utilizing properly the rehabilitation assistance. (23) Another important inference drawn from the study is the reduction in the area brought under podu cultivation. Nevertheless, forest land continues to get exploited after displacement also, calling for attention on two aspects. Firstly, to promote social forestry in the resettlement areas and secondly, to findout and implement suitable farm and non-farm viable alternatives to shifting cultivation. The dependence on forest produce in general, has undergone a reduction to collect firewood, fodder, timber, and other items for commercial proposes The number of people collecting various items from forests has come down not because many people do not need such items, but mainly because most of these forests produce are scarce. This inference only further strengthens the argument for introducing various afforestation programmes in the resettlement locations.
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House Ownership Pattern

According to the study, 12.61% of the rehabilitation assistance is spend on construction of houses. Many people have saved the money ear marked for house building to buy agricultural land. They could save from this money because of unlimited transport facilities provided to them from submergible villages from where, they could carry most of the salvaged building materials. As a result of liberalized rehabilitation policy of Government of Orissa to consider all the major sons for provision of rehabilitation package, the numbers of nuclear families have increased. The number of DPs owning houses has registered a sharp increase from 2147 (52,12%) before displacement to 3753 (91.11%) after displacement. The quality of the houses constructed by the displaced persons are by far much superior to those found in the host villages.
be made for two-roomed school structure to facilitate education for the children in the displaces families. All the clusters must be connected to the respective Panchayat Samiti or Gram panchyat roads through link roads. The R&R Unit has so far provided 194 tube wells, 42 open wells, 38 tanks, 28 school buildings and 71 link roads. (24) Much more activities need to be carriedout in order to strengthen facilities such a education, healthier, extension of ICDS, public distribution system, identification and inclusion of the displaced families under various private alleviation programmes implemented by the Government, such activities, need to be incorporated as development package into the Rehabilitation Action Plan to be implemented by the project in the near future.
Provision of Opportunities
Employment
Prov ision Infrastructure
of
Social
As mentioned earlier, as per the R&R policy guidelines formulated by the Government of Orissa, drinking water facilities by means of the tube wells/open wells must be provided to a cluster where ten or more number of DPs have resettled. In clusters where the number of families resettled exceed thirty, a tank must be constructed and provision should
The base line Socio-economic survey has revealed that after displacement, more numbers of people have started working as wage earners in both farm and nonfarm activities. To quote the statistics it was found that 5248 persons from 2814 families are employed as wage earners. Apart from this, quite a few displaced persons are found to be selfemployed as artisans, civil contractors, and so on. The project itself has provided employment to 248 displaced persons. (25)
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Various income-generating programmes have been planned by the R&R Unit after consulting the people themselves regarding the trades they would like to practice. People themselves have been asked to choose the trades keeping in mind locally available raw materials and skills and marketability of the products. The R&R Unit expects that this would ensure more self-employment to the displaced families in the resettlement areas.
services and housing are provided to the settlers. If possible, education, water, health and other services should be made available for both groups and a suitable social climate generated for their integration Equitable treatment should be accorded as far as possible to both hosts and settlers. (1988) While conducting the base-line socioeconomic study, the team visited 158 among the (families) of 163 clusters (with ten or more displaced families) formed. In many of the clusters visited, resettlers hosts hostility was not found. In ten clusters where such conflicts are prevent, the host villagers are least willing to share some of the resources and services. (ii) Improvement in the status of displaced women: In a traditional rural and ethnic society, women are conditioned to a life of dependency. They have no access to property such as land and house, although they contribute quite significantly to family labour, in addition to shouldering the household responsibilities. At the time when the socio-economic survey was conducted, R & R policy guidelines did not provide for any entitlement of R & R benefits to displaced women, except when they are either widows of divorcees. When several women expressed their dissatisfaction about the gender-discriminatory R & R Policy, it was decided to conduct a sample survey
OTHER CRUCIAL ISSUES IN R&R

(i) Integration community: with the host
If the relationship between the host population and resettles does not turnout to be conducive, no matter how good the efforts are taken by the R&R authorities in any project, they would not yield the desired results. There are two factors that can cause very severe hostility between hosts and resettlers firstly resettlement creates sudden spurt in the demand on common property resources, such as water, forest, space for crematorium and so no; secondly, if the hosts have been neglected by the administration in provision of certain public goods and services, they can become jealous to find the resettlers taken care of by the R&R authorities. As Michael Cernea rightly points out, The resettlement agency should anticipate that feelings of jealousy will likely be aroused among the hosts if superior
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among displaced women to elicit their opinion regarding various issues that affect displaced women. Amongst several other issues, one of the major issues of focus was need-identification through income generation programmes. Women could spell-out the availability of resources, traditional skills they practice, need for up gradation of technical skills, willingness to organise themselves and take-up various activities to generate income and savings. Such findings have provided valuable insights for designing several activity plans for women in the resettlement clusters. (iii) Promotion of Social Forestry: The demand for forest resources is quite enormous to meet the basic energy requirements besides for fodder and other commercial purposes, whereas the forest resources have denuded faster due to over-exploitation by both the needy and the greedy population. Although there were mixed responses from the resettlers regarding their willingness to take-up social forestry programmes, by and large, the responses showed that the resettlers are willing to participate in such activities, with adequate support from the Government. As mentioned earlier, although majority of displaces people have chosen their areas of resettlement considering the availability of natural resources like forests, the study team could visibly find the forests resources
dwindling faster in and around the resettlement clusters. Considering these aspects, the R&R Unit proposes, to take-up social forestry programme in selected clusters covering 500 hectares each. (27) Resides the R &R Unit is providing fuel efficient cooking stoves (chullahs) to the displaces families which is expected to reduce the use of firewood by about fifty percent. iv) Revamping Public Distribution System: One of the impoverishments caused by the process of forced displacement has been food insecurity. (28) According to Michael Cernea, Sudden drop in food crops availability and/or incomes are certain during physical relocation, and hunger or undernourishment tend to be lingering long-term effects. (1995) Taking care of this risk food insecurity by means of public distribution system (PDS) is usually, never, in the agenda of any R&R activities (30) In Upper Indravati resettlement clusters, problems relating to PDS are more acute and expressed by large number of resettlers. Considering the severity of this problem, a voluntary organization has made some innovative efforts in few resettlement clusters by making PDS participatory, wherein people themselves take care to lift the quota from Government warehouses and make essential commodities available to all the villagers. In this system, a dealer who is selected
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by the people from amongst themselves remains accountable to all the villagers. This voluntary organization has also introduced Grain Banks as a household food security programme. According to the R&R Unit, Saplings of fruit trees were distributed to the Displaces persons for developing kitchen gardens. These trees in many houses have already reached a fruiting stage, gaining added benefit to the displaced Development Induced Displacement at the National Level: persons. Other measure like supply of essential commodities through the public distribution system, starting of participatory PDS, mid-day meal in school, nutritious food supplement through ICDS programme have added to the minimization of food insecurity problem. The maintenance allowance of Rs. 500 per month for one year has taken care of immediate food problems after displacement. (31) v) Ensuring Community Participation:
been preparing the Community Based and Family oriented Rehabilitation Action Plan (CBFORAP). Formation of peoples organizations could have the way for people taking care of their own development which should be the ultimate output expected from the project. One of the major negative impacts of the developmental efforts taken up by the Government over the last four decades is the increasing dependence of people on the administration. Forming cluster level peoples organization is one way of safeguarding against too much dependence. In order to bring about better integration between the resettlers and the host population, certain development programmes such a social forestry, womens groups in DWCRA, etc. can be initiated while are common to both the communities so that the host community does not feel left out. The CBFORAP envisages formation of womens groups (Udyogi Mahila Sangha) and youth groups (Yuvak Mandals) to help them to articulate their views effectively (32). Several such measures have been planned in order to strengthen and stimulate the process of rehabilitation. vi) Supervision, Follow-up, Escorting, Monitoring and Evaluation: This is left for future. The database created about the displaces families
A beginning towards participation has already been made by providing the choice to the displaces people (i) choose on their own, the places for resettlement and (ii) to opt for either land-based rehabilitation or cash-based rehabilitation. (Incidentally, all displaced families opted for cash-based rehabilitation package only). Keeping in view the participatory rehabilitation process, the R&R Unit has
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have been voluminous and provides comprehensive information about the status of each of the 4400 displaces families covered during the survey. The bench-mark/ base-year taken to be 1994, periodic monitoring and concurrent evaluation can be carried out at regular intervals. For objectively measuring the progress of the rehabilitation activities, suitable indicators should be identified and listed out. The indicators can be social, cultural, economic, technical, financial and managerial. Continuous follow-up, supervision and monitoring of R&R activities would ensure the reversal of flow of information form the people back to the implementing authorities. Such information gathered from the people should be updated and documented meticulously and this process should be institutionalized. Attempts should also be made to motivate peoples groups/organizations for maintaining the vast amount of social infrastructure and other facilities created in the clusters. This would ensure community involvement in the rehabilitation process.
state level are used as basis for following certain approaches and strategies for resettlement and rehabilitation. In the context of Upper Indravati Project in Orissa, all the displaces person identified have been relocated and provided with package of rehabilitation assistance spread over four different phases. In the process, several policy changes have been made and implementation strategies have also undergone several changes. There has been a process of trial and error. Some of the decisions and strategies have been very successful, some are not. This process has educated the funding agency, namely the World Bank, the project implementing authorities, the social activities, the academia, the NGOs and none the less, the displaced themselves. More than what is to be done, the project has taught everyone what is not to be done. And that is more important. This learning should be useful for all rehabilitation activities that need to be carried out in future so that, the displaced need not remain losers, but can emerge as winners.
REFERENCES
1. Cernea, Michael, M. Putting People First Sociological Variables in Rural Development World Bank Publication, Washington, D.C. (1991) The World Bank Operation Directives 4.30, Paragraph 29, (1990) . Kotari, Smitu, Whose Nation Is it? The State of Indias Economy 1994-95, Public Interest Research Group.
CONCLUSION
In the absence of a uniform Rehabilitation Policy at the national level and with the existing complexity and diversity of issues involved across different types of projects that cause involuntary resettlement, only projectwise policy guidelines prepared at the
2. 3.
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4.
5.
6.
7. 8.
9.
10.
11.
12.
13. 14. 15.
Sen, Jai, National Rehabilitation Policy-A Critique, Economic Political Weekly, February 4, 1995. Agnihotri, Anita, The Orissa Resettlement and Rehabilitation of Project Affected Persons Policy, 1994 An Analysis of its Robustness with reference to the Impoverishment Risk Model paper presented in the Workshop on Impoverishment Risks in Involuntary Resettlement, held in the World Bank, New Delhi, 12 14, March, 1996. Resettlement and Rehabilitation Unit, Upper Indravati Project, Govrnment of Orissa. Ibid. Socio-Economic Survey, Xavier Institute of Management, Bhubaneswar, 1994. (Unpublished). Parasuraman, S., Methodological issues in studies on Resettlement and Rehabilitation of Project Displaces People. WALMI, Department of Irrigation Resolution No. 58334, dt. 23.12.89. and letter No. 30845, dt. 19.11.91 to SIP/ UIP, Circulars and orders on Rehabilitation Policy for major and medium Irrigation Projects of the State (1993) Government of Orissa, Irrigation and Power Department, Resolution No. 13169 dt. 20.4.77. Government of Orissa, Department of Irrigation Resolution No.31888 dt. 21.8.90 Ibid, Resolution No. 13446, dt. 20.4.92. Ibid, Resolution No. 25101. dt. 14.7.92. Fernandez, Walter, Displacement and Rehabilitation Principles of the NGO Alternative. Workshop on Impoverishment Risks in Involuntary Resettlement, conducted by the World Bank in New Delhi, 12-14 March, 1996.
16. The Resettlement and Rehabilitation Unit, Upper Indravati Project, Orissa. 17. WALMI, Guidelines for the Evacuation of villages to be submerged (1993). 18. XIM, op. cit (unpublished). 19. Ibid. 20. Ibid. 21. Ibid. 22. Resettlement and Rehabilitation Unit, Upper Indravati Project, Orissa. 23. Ibid. 24. Garg, Saurabh and Mohanty, S.K., Participatory Resettlement and Rehabilitation in Upper Indravati Project, A Case Study paper presented in the workshop on Impoverishment Risks op. cit. 25. Ibid. 26. Cernea, Michael M., Involuntary Resettlement in Development Projects, Policy Guidelines in World Bank-Finances Projects. (1988) 27. Garg, Saurabh and Mohanty, S.K., op. cit. 28. Cernea, Saurabh and Mohanty, S.K. op. cit. 29. Cernea, Michael, M., Understanding and Preventing Impoverishment from Displacement-Reflections on the State of Knowledge Keynote opening address. International Conference on Development Induced Displacement, University of Oxford, January 1995. 30. However, in Upper Indravati Project, a provision was made in the R & R package for maintenance allowance at Rs. 500 per month for one year, to take care of certain immediate essential needs such as food security. 31. Garg, Saurabh and Mohanty, S.K. op.cit. 32. Garg, Saurabh and Mohanty, S.K. op. cit.
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Forecasting Time Series Data with special reference to Structural Stability-A comparison of three forecasting methods
P. Mishra1
ABSTRACT
ime series data often exhibit differential trends in different sub periods when they are examined either as a function of time or as a function of one or more determinants. This may be due to the differences in the socio economic condition in these periods, which in turn may be due to major policy changes in the economy. In such cases the researcher is faced with large forecast errors when he attempts to forecast a time series variable using the pooled data for the entire period. Test of structural stability of functions in different sub periods and addressing it while forecasting becomes a necessary condition in such a situation. Structural Stability is often tested with a chow test and in the presence of instability in the two or more period the latest periods data is used for forecasting. But in such cases the researcher is faced with a problem of loss degree of freedom. Alternatively one may use a dummy variable method to address the differences in the sub periods and attempt forecasting the variable using the entire data set and forecasts the values with out any loss of the degree of frredom. The present study addresses this aspect and uses time series data on three macro economic variables for estimating/ forecasting using three different methods viz exponential smoothing method, simple regression method and an explanatory method using dummy variable. It has been observed that forecast errors are less when structural instability in the time series data is addressed.
Professor, Economics and GM Area, Xavier Institute of Management,Bhubaneswar
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1. INTRODUCTION
One of the primary needs of management in recent years is to deal with the market related variables both an micro and macro level due to the increasingly uncertain and competitive business environment It may be emphasized that forecasting of these variables is necessary in several activities relating to decision making on the part of the manager and the top management. Forecasting is not just a technical or statistical area, but it covers varied domain of psychology, sociology, politics, management science, economics and other related disciplines. For the last few decades the forecasting techniques have been used extensively Recently, progress in the field of forecasting has been impressive and the consequences for organizational decision making are significant to managers and forecasts alike. Moreover, forecasting is necessary so that persons and organizations can make both plans for the future and those decisions that must be faced in an atmosphere of uncertainly. Forecasting of management related variable has always been an integral part of virtually all types of management decision-making. However, as a discipline it has only existed for a few decades only. In the recent years forecasting has become a fully-fledged academic exercise and useful in the
practical field. Its importance to planning and decision-making has become apparent in such diverse areas as business, government & non-profit institutions.
2. NEED FOR FORECASTING

Needless to mention that all organizations, both government and non-government, operate in an atmosphere of uncertainty. However, decisions must be made that affect the future of the organization. It is said that educated guesses about the future are more valuable to organization and managers than are uneducated guesses or estimation in the utter darkness. A decision maker is better off while understanding quantitative forecasting techniques and using them wisely with a priori reasoning, than being forced to plan for the future without the benefit of valuable information. Researchers observe that at the one extreme one can find the executive who, through ignorance and fear of quantitative techniques and computers, relies solely on intuition and gut feeling. At the other extreme is the technically sound forecaster skilled in the latest sophisticated data manipulation techniques who is unable or unwilling to relate the forecasting process to the needs of the organization and its decision maker. Therefore it is often said that the effective forecaster is able to
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formulate a skillful mix of quantitative forecasting techniques and good judgment. As has already been mentioned earlier, the economy/market in the present world in which organization operate, has always been changing, forecasts have always been relevant and necessary. However, recent years have brought about increased reliance on techniques, which involve sophisticated data manipulation techniques. With the present changes in the world economies due to policy changes in different countries and other technological innovations new technology and new discipline have sprung up overnight; government activity at all level has intensified; competition in many areas has become more keen; international trade has stepped up in many industrial and service agencies have been created and have grown tremendously. These factors have combined to create an organizational climate that is more complex, more fast-paced, and more competitive than even before. Therefore, organizations that cannot react quickly to changing economic environment/conditions and that cannot foresee the future with any degree of accuracy are doomed to extinction. Here lies the importance of an educated guess of forecasting both at micro as well as macro level.
3. A BRIEF HISTORICAL REVIEW OF FORECASTING APPROACHES

Before 1950s there was little or no systematic business forecasting. Although a handful of methodologies such as regression , averaging methods and time series decomposition were available, their applications were limited to leading economic departments in academia and government agencies. In the mid 1950s two major breakthroughs viz, introduction of computers and the introduction of exponential smoothing techniques changed the forecasting fields. As computer power become cheaper particularly in the western countries and more widely available in 1960s the door opened for more statistically sophisticated forecasting methods. Such techniques as multiple regressions and econometric explanatory models became practical and were used to quantify and test economic theories with quantitative data. During the next decade the field of econometric based forecasting had developed as a widely used technique in the field of business and economic variables However, academicians were searching for an unifying theory of forecasting to deal with the time series data which was provided by the work of Box and Jenkins (1976). The Box-Jenkins methodology as it became known provided a systematic procedure for the analysis of time series that was sufficiently general to handle
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virtually all empirically observed time series data patterns. The popularity of this method was boosted significantly when several comparative study of forecasting methods done in the 1970s showed the Box-Jenkins approach to be at least as accurate as economic approaches (See Armstrong, 1978). On the qualitative side, technological forecasting methods also gained popularity during 1960s and 1970s. Methods such as Delphi approach and that of cross - impact matrices were used in a number of organizations. These approaches attempted to deal with long term trends where the historical data and patterns necessary to apply statistical forecasting approaches were not available or did not apply. Consequently considerable efforts was expended in the marketing field on the topics of new products and new market forecasting, areas where the lack of historical data was also a problem. In such situations researchers particularly the market researchers used the Delphi method for short run forecast.
available in the literature (See Georgoff and Murdick,1986) A question comes to the mind of the researcher is that which type of the forecasting technique will be suitable for a decision making process. Needless to mention that a forecasting technique to used has to be chosen on the basis of several factors. Therefore a broad classification of the forecasts along with the objectives of the forecaster have been summarized in the following which might lead to the researcher to choose a forecasting method. Forecasting procedures might first be classified with respect to time as a) longterm orb) shot-term forecasting. Longterm predictions are necessary to set the general course of an organization for the long run; they thus become the particular focus of top management. Short-term forecasts are used to design immediate strategies and are used by midmanagement and first-line management to meet the needs of the immediate future. Forecasts might also be classified as a) micro level forecast or b)macro level forecast which means whether they involve small details segmented market demand vs. large summary values. For example, a plant manager might be interested in forecasting the number of workers needed of the next several months (a micro-forecast) or a area marketing manager may need to know
4. TYPES OF FORECASTS
As mentioned earlier with the growth of the computation facilities with the introduction of the high-speed computers forecasting of both macro and micro variables in the economy/market has become relatively easier. There are a variety of forecasting methods
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his expected sale volume in his market, while the government may forecast the total number of employed people in the entire country ( a macro-forecast) in the next few years or the revenue from a particular tax. Again different levels of management in an organization tend to focus on different levels of the micromacro hierarchy. Top management would be interested in forecasting the sales of the entire company, for example, while the individual salesperson would be much more interested in forecasting his own sales volumes. Forecasting procedures can also be classified according to whether they tend to be more qualitative (on the basis of the nature of data). At one extreme, a purely qualitative technique is such (as the Delphi technique) that it requires no manipulation of data. Only the judgment is actually a result of the mental manipulation of past historical data and the feeling of the market. At the other extreme, purely quantitative techniques need no input of judgment; they are mechanical procedures that produce quantitative results. Some quantitative procedures require a much more sophisticated manipulation of data than do others. However, we must emphasize again that judgment and common senses in other words, a priori reasoning must be used along with the mechanical and data manipulative procedures. Only in this way one can
have an intelligent and relevant and practical forecast. To summarize the foregoing explanation the forecasting methods could be different with respect to time, position and nature of data. Forecasting methods with respect to time could be a) Short run b) Long run Forecasting methods with respect to position could be a) Micro level forecasts b) Macro level forecasts and Forecasting methods with respect to nature of data could be a) Qualitative forecasts b) Quantitative forecasts All the methods could be recasted to form two main categories viz.. Qualitative Method and Quantitative Method 1. Qualitative Methods These methods of forecasting are also known as judgmental methods. These methods are most commonly used in business and government organizations. Such forecasts are most often made as individual judgment or by committee agreements or decisions. While many large organizations do use some qualitative methods and few technological methods are also used on a continuing basis. The following methods of forecasting come under this category.
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! ! ! ! ! !
Naive extrapolation Sales force composite Opinion of the Jury of Executive Historical analogy Delphi method Scenario method
! ! ! ! ! !
Moving averages Exponential smoothing Adaptive Filtering Time Series Extrapolation Time Series Decomposition Box- Jenkins (ARIMA)
2. Quantitative Methods The second category, quantitative methods, is the type on which the majority of the forecasting literatures have been focused. There are three subcategories of these methods. a) Extrapolative or Time Series and b) Explanatory
!
b) Explanatory method. The first task of forecasting is this method is to find relationship between the variable. For example one might seek to determine the relationships in an economy in order to predict output such as gross national product, company sales or household expenses. Such a process, if carried out correctly, will make it possible to estimate the type and extent of relationship between the variable and a number of explanatory variables. This relationship can be used to predict future values of the forecast variable, provided the values of the explanatory variables are known . Basically, the explanatory method assumes that the value of a certain variable (the output) is a function of one or more other variables the (inputs). In a very narrow sense the time series model could be called an explanatory model since the actual values are assumed to be a function of time period alone. The term explanatory model however is generally reserved for models with variables other than time, an example could be an equation for predicting sales that bases its forecast
Time -series methods seek to identify historical patterns (using some as reference) and then forecast using a time based extrapolation of those pattern where as. Explanatory methods seek to identify the relationships that led to (caused) observed outcomes in the past and then forecast by applying those relationships to the future.
a) Time Series or Extrapolative Method: The first type of quantitative forecasting method & the most commonly used one is the time series method i.e. by identifying the pattern & extrapolating that pattern forecasts for subsequent time periods can be developed. Under this method the following are the most commonly used ones.
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on the values of price and advertising within the company and the industry i.e., the equation would state that sales are a function of more than one. The real strength of explanatory model as a forecasting method is that it can develop a range of forecast corresponding to a range of values of the different input variables. However, a drawback of these methods is that they require information on several variables in an addition to the variables that is being forecast. As a result their data requirement are much larger than those of a time series method. In addition, since explanatory models generally relate several factors, they usually take longer to develop and are more sensitive to changes in the underlying relationships than would be in a timeseries model. The following are under the explanatory method of forecasting. 1. Correlation Method 2. Regression models using one or more than one explanatory variable. 3. Regression models using structural stability and dummy variable.
5. THE PRESENT STUDY

The present study does not attempt to give a theoretical or empirical analysis of the above types of forecasting methods. Rather, the study is limited to the examination of the relative efficiency of a few time series forecasting methods used to forecast
the macro variables with the help of forecast errors. The study analyses three macro economic variables viz net national product, total tax revenues of the government of India and total industrial output in India. The problems of forecasting of macro-economic variable have mainly been addressed by researchers using explanatory and extrapolative methods (Ascher 1978). Quite a few researchers have used explanatory method of forecasting macroeconomic variables using econometric models (Ashley 1983, George et.al 1994). The limitations of using the explanatory method where a number of explanatory variables may be needed, posed serious problems, although a remedial measures were highlighted by some researchers. Keeping this in view ,researchers have advocated time series models for forecasting where the variable is used against time only ( Pindyk et.al 1991, Ahlburg et.al 1992 etc.). It may be mentioned that a forecast would be less useful unless its forecast errors are examined. Researchers have, therefore, examined the applicability and relevance of different errors concepts in forecasting exercises (Makridakis 1987, Hanke 1986, Armstrong 1995). However, relatively less importance has been given to forecast of macroeconomic variables taking the structural instability with respect to policy changes in different countries.
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In the Indian context forecasting of macro economic variable such as revenue, expenditure, GDP etc. are being done either through a) behavioral assumptions and estimating such a relationship with past observations and then forecasting on the basis of the estimated parameters or b) on the basis of statistically determined pattern (i.e. extrapolative method) in the time series of revenue, expenditure etc. (Shome p., 1997)..However, a little attempt has been made to incorporate the structural instability of the models with respect to policy changes. Therefore, in the present study forecasting of macro economic variable in the Indian context will be examined with reference to policy changes. The errors of estimates using different models such as extrapolative method using time as the independent variable, simple two variable explanatory model using one explanatory variable and using structural stability in the time series will be calculated and compared.
in the study. The structural stability could be captured either by using a Chow Test of by using a Dummy Variable technique with reference to policy changes. Secondary data collected from different published sources relating to macroeconomic variables such as Net National Product, Total Tax Revenue of the Government of India and Total Industrial Output in India have been used for forecasting. Capital expenditure, gross national product and employment have been used as the independent variables to forecast the above macro variable in the explanatory models and using dummy variables to address structural stability. The data has been divided into two parts while forecasting the variables viz., the initialisation and the test part. Considering the above periods, forecasting errors has been calculated. The efficiency of a model has been judged on the basis of forecast errors. Mean absolute percentage error (MAPE) has been used to compare the forecast error. Out of the different extrapolative methods of forecasting mentioned earlier, we have used the exponential smoothing methods adjusted for trend since this method is used when the time series data exhibit a trend over time. This method Smoothens the level and slope directly by using different smoothing constant. This aspect has been taken care of while
6. METHODOLOGY AND DATA REQUIREMENT

The study has basically used single equation models viz. exponential smoothing model adjusted for trend (Holts Model). two variable regression model with one explanatory variable and explanatory model with reference to the structural instability in the time series (using dummy variables) has been used
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arriving at the forecast for the test period. For the explanatory methods we have used the regression method with one independent variable and have arrived at the forecast values of the dependent variable for the said period. Structural stability in time series data is often addressed when the scatter plot exhibits two sub periods with either differences in the intercepts or slopes or in both in the intercepts and the slopes for the sub periods. Using these three methods we have compared the forecast errors with the help of mean absolute percentage error. The data on the macro variables have been presented vide Table 1,2 and 3. Constant prices have been used for the financial data to eliminate the inflationary effect.
The scatter plots for the data may be seen vide Fig 1,Fig 2 and Fig 3.To subdivide the time period the cut of point has been fixed at 90-91 when there was a policy change at the central government level in India i.e. when the liberalization process started in the Indian economy. It may also be seen from the scatter plots that after the year 1990-91 there has been a change in the rate of growth. The estimates for the years from 92-93 to 99-00 have been presented using the above mentioned three methods. The findings relating to the estimates/forecast of the abovementioned variables are as follows: Table 1 summarizes the results of forecast relating to the net national product using the above mentioned three methods. In the exponential smoothing method adjusted for trend (Holts model) the forecasts have been arrived at by using only time where as the explanatory variable whereas in the dummy variable method capital expenditure has been used as the explanatory variable. It is observed that Holts method gives the lowest error. Similarly, in Table 2 forecast for the total tax revenue of the Government of India has been arrived at by using time and gross national product as the explanatory variables. Interestingly, in this case the dummy variable method gives the lowest error. In Table 3 we have forecasted the value of total industrial output using time and
7. FINDINGS
The time series data on macro variables viz: net national product, gross tax revenue of the Government of India and industrial output in money terms have been used for forecasting. For the explanatory method as well as for the dummy variable approach to address structural stability variables such as capital expenditure, gross national product and employment respectively have been used as explanatory variable in three different equations. The data have been presented vide Table 1.1,2.1 and 3.1. All the financial data are in constant prices to eliminate the price effect.
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employment as the independent variables. Here also we get lowest error when the dummy variable method is used.
8. CONCLUSION
The findings summarized above suggest that for choosing a forecasting model the most important consideration is the examination of the scatter plot and a priori reasoning for the use of a particular forecasting method. This is corroborated with our scatter plots for the three variables. It may be observed that graph for the growth of NNP overtime suggests an exponential relationship with a positive trend from 1970-71 onwards and there was no clearcut (observed) difference between two sub periods. Therefore, the forecaster should use a exponential smoothing method adjusted for trend (Holts method). However the other two
variables when plotted on the graph clearly show a break after the starting of the liberalization process in the Indian Economy. And therefore, they exhibit structural instability in the two subperiods. This can be tested with a Chow Test. After the confirmation of the instability on can either use the second periods data for forecasting or use slope and intercept dummies for the pooled data. The relative advantage of using a dummy variable technique in such cases is that the researcher does not loose the required degrees of freedom in the statistical analysis. The effective forecaster, therefore, should use his/her judgment to select a forecasting model without using a thumb rule of using a particular method for a particular set of data. He should be able to formulate a skillful mix of quantitative forecasting techniques and good judgment.
TABLE 1
Forecast for NNP at factor cost using different models and MAPE obtained.
Year NNP at factor cost at 1993-94 prices (Y) 648182 685912 734358 787809 852085 890890 948305 1007743 . Double exponential model (Holts method) 637637 668789 707661 757896 813463 880404 920383 979560 2.8 Dummy variable Simple Regression
1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-2000 MAPE %
644904 688144 753336 745196 787669 891787 1011480 873048 4.4
787596 778141 760572 797454 789875 733369 678478 801330 14.6
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TABLE 2
Time Actual values Holts model Simple Regression 1993 94 1994 95 1995 96 1996 97 1997 98 1998 99 1999 00 2000 01 2001 02 MAPE 76750 84208 93086 108546 105053 116170 122611 122781 142413 86913 84117 86457 92729 105176 109641 118085 125980 129693 6.22% 82998 89543 96864 105394 110882 118520 126303 132124 140465 4.35% Dummy variable 78336 85149 92770 101649 107362 115312 123414 129473 138155 2.43%
TABLE 3
Holts Method Actual 64031 75146 77875 95712 114741 124662 131200 136759 142687 MAPE Forecast 53593 64195 70834 83840 85921 105231 128858 139725 143844 APE 7.15% 1.26% 5.74% 7.66% 10.23% 8.29% 3.37% 6.50% 5.18% 6.15% Simple Regression Forecast 68395 79783 87754 98041 95640 116899 110368 128077 128860 APE 7% 6% 13% 2% 17% 6% 16% 6% 10% 9% Regression with dummy Variable Forecast 64566 78583 88394 101056 98100 124268 116229 138027 138990 APE 0.83% 4.57% 13.51% 5.58% 14.50% 0.32% 11.41% 0.93% 2.59% 6.03%
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TABLE 1.1
YEAR 1970 71 1971 72 1972 73 1973 74 1974 75 1975 76 1976 77 1977 78 1978 79 1979 80 1980 81 1981 82 1982 83 1983 84 1984 85 1985 86 1986 87 1987 88 1988 89 1989 90 1990 91 1991 92 1992 93 1993 94 1994 95 1995 96 1996 97 1997 98 1998 99 1999 00 NNP at factor cost at 1993-94 prices (Y) 270597 272252 270061 283061 286417 313643 316358 340751 359732 338124 363417 384392 393274 423265 240119 459185 477158 493312 545572 582518 614206 617372 648182 685912 734358 787809 852085 890890 948305 1007743 CAPEX(x) 2494 2924 3319 3441 4259 5401 5387 6392 8084 7159 8358 9857 12049 13283 15941 18742 22056 22087 25005 28698 31782 29122 29916 33684 38627 38414 42074 51718 62879 48975
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TABLE 2.1
YEAR Total Tax Revenue (93 94 prices) 11,373 13,086 15,227 17,796 18,252 19,003 18,911 17,723 18,398 20,030 22,470 25,745 27,129 26,089 28,008 34,607 35,388 35,707 41,642 41,125 40,587 GNP (93 94 prices) 205,196 211,287 215,601 226,577 243,472 234,394 236,846 255,843 262,687 279,791 293,933 296,688 295,752 309,950 314,509 343,173 347,530 373,464 394,335 374,640 401,970 YEAR GTR (93 94 prices) 44,299 45,744 49,190 51,889 59,055 63,193 66,277 72,207 77,415 78,194 80,406 81,946 76,750 84,208 93,086 108,546 105,053 116,170 122,611 122,781 142,413 GNP (93 94 prices) 425,168 436,577 469,293 489,206 511,058 532,021 551,409 607,207 648,108 683,670 691,143 726,375 769,265 824,816 886,961 959,360 1,005,945 1,070,774 1,136,840 1,186,246 1,257,043
60 61 61 62 62 63 63 64 64 65 65 66 66 67 67 68 68 69 69 70 70 71 71 72 72 73 73 74 74 75 75 76 76 77 77 78 78 79 79 80 80 81
81 82 82 83 83 84 84 85 85 86 86 87 87 88 88 89 89 90 90 91 91 92 92 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02
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TABLE 3.1
YEAR 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 INDUSTRIAL OUTPUT RUPEES CRORE 3246 3455 4009 4532 5053 6196 7560 8358 8716 10310 11914 13586 16544 18737 20866 22810 28444 32919 38350 43076 48159 57720 64031 75146 77875 95712 114741 124662 121200 136759 142687 EMPLOYMENT (MN) 132654 121356 118123 111476 120869 117539 134224 126061 141837 144664 125334 143431 151477 150686 166195 168593 169749 168707 166355 194316 195756 204421 200634 213105 221834 233099 230469 253750 246598 265991 266848
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NOTES AND REFERENCES NOTE

For a detailed list of several forecasting methods and classification of the forecasting methods in to a few broad categories see Georgoff,D.M and Murdick,R.B;(1986) Managers Guide to Forecasting in Accurate Business Forecasting:Harvard Business Review (1992).
Box, G.E.P. and G.M. Jenkins, 1976; Time Series Analysis: Forecasting and Control; rev. ed. Holden-Day, San Franscisco. George,T.C et al;Some advances in nonlinear and adaptive modeling in time series; Journal of Forecasting Vol 13 1994 Hanke,J E; Wichern D W; Reitsch, A G, 2002, Business Forecasting, PrenticeHall of India Pvt Ltd., Seventh Edition, ch-9, pp 346-419 Makridakis,S&Wheelright,S;Handbook of Forecasting; Wiley Interscience Publications;1987 Pindyk,R.S &Rubinfield,DLEconometric Model and Economic Forecast; McgrawHill.Inc 1991 William,Ascher;Forecasting:An Appraisal for Policy Makers and Planners;The John Hopkins Press, London,1978
REFERENCES
!
Ahlburg,D.A.;Population Forecasting: Guest Editors Introduction; International Journal of Forecasting Vol 8,1992 Armstrong J.S., 1978, Forecasting with Econometric methods Folklore Vs. Facts; Journal of Business, Sl. pp 549 600
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Indian Management Styles: An Exploration
Emotion and Intuition the Defining Factors

R. Parthasarathy1
ndian economy needs the support of good management to achieve national objectives, for example 8% annual growth, at this juncture. People also realise that techniques developed overseas, themselves under scrutiny for continued usage, are sometimes unsuitable for Indian conditions. A general view is that the prime need is for recognition of emotional factors in developmental projects and of intuition as an essential tool. Many Indian philosophers and management experts have mooted the idea that a management style rooted in Indian traditions might fill this gap and serve national objectives best. This paper recapitulates some elements of this movement and briefly describes a practical method which has had a measure of success. Exploration requires bold lateral thinking and a futuristic outlook based on deep knowledge of literature and empathy with the Indian ethos. We recapitulate two (among several) instances of bold lateral thinking which have made significant contributions in this area. We shall take note of a practical system applying, with a degree of success, the linkages implicit in these approaches. Similar ideas have also emerged overseas, albeit in other contexts, illustrating the recognition of the scope for application of these ideas. Paper presented at the National Conference Indian Management Styles: An Exploration, organized by Canara Bank School of Management Studies, Bangalore University, December 20-21, 2003, held at Bangalore.
ABSTRACT
Advisor, Chinmaya Institute of Management, Bangalore.
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MANAGEMENT STYLES
A style of management can never be precisely defined because any distinctiveness about a set of practices is a function of local and regional culture and traditions. Even the famous oftmentioned Japanese style of management is no exception. This is the reason why management practices and strategies cannot be imported and implemented without adaptations. This paper traces instances of exploration of a management style which capitalises on characteristics embedded in the Indian ethos. It spotlights approaches which suggest that the Indian ethos has emotional and spiritual elements whose incorporation into a management philosophy would assist national developmental processes.
people draw upon intuitive assessments in addition to quantifiable benefits and costs. An overarching genuine concern for long term sustainability of business is also felt. Particularly in the context of project management, these factors could be a source of strength in ensuring development with a human face. Several philosophers and scholars in the consultancy field and in academia have recognised this potential and developed programmes to generate a mindset that taps this potential. Their efforts have followed a diversity of paths which may eventually merge into a basic approach. This approach is not a new discovery or formulation. Some field experience has been gained but it has not yet been integrated into the mainstream.
VISTAS TO EXPLORE
Business management must be redefined in terms of sustainability, and with due regard to measurable and nonmeasurable costs and benefits. Individual effort must focus not only on acquisition of technical skills but also on self-development. Emotion and intuition acquire important roles in this approach. This search amounts to a new paradigm to evolve out of the Indian way of life. There is nothing inherently superior in the Indian psyche but the in-built respect for both material and non-material elements in human life offers a foundation for the exploration of a
THE INDIAN ETHOS

The evolution of a management style for Indian businesses is related to a number of economic factors, culture and living styles in the diversity of groups in Indian society. Swami Someswaranada has offered a definition of the Indian ethos in Management - Management is not getting things done by others but helping ordinary people to produce extraordinary results. subtle, subjective, intangible factors are equally important s concrete objective factors. Emotional attitudes and intuitive responses are powerful components of the Indian psyche and
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management style. The potential to develop a holistic attitude to management issues exists in the philosophical underpinnings in subliminal consciousness.
SPIRITUALITY IN DAILY LIFE

To modern science-educated graduates and professionals the term spirituality may mean either a negation of the so-called scientific outlook, reliance on elaborate rituals and a tendency to deride the value of modern facilities (out of latest technology) or appear to be an impractical element in modern competitive business. Both these points of view ignore subjective nonquantifiable values. To understand the role of spirituality in daily life, involvement in a formal discipline of philosophy is not necessary. It is facilitated by positive introspection by every individual to chalk out a path of self-development. It creates a deep sensitivity to the universal principle transcending the externally oriented sensory tools of the body, mind and intellect. Spirituality provides the glue to communities dedicated to common patterns of behaviour and outlook. It sustains long-lasting relationships that lead to social consciousness and intuitive respect for subjective values. Developmental objectives such as economics with a human face, tapping the potential of people as the core
resource, environmental impact consciousness, and evolution of charismatic leadership are almost automatic by-products. The following list of definitions from Jack Hawley in Reawakening the Spirit at Work is appropriate: Vision comes from dipping into the vastness of universal truth. Vision will create organisational bonding without the use of coercion Quality improvement programmes that really work are almost mystical True leadership is spiritual because the leader seeks to liberate the best in people
EXPLORATORY VISTAS
Several philosophers and experts in academia have established strikingly individualistic pathways for an exploration of ideas to stimulate thought on Indian management styles. We shall describe the pathways of two (among several) persons, in tune with the depth of feeling and spirituality of the Indian psyche. Dr Subhash Sharma, Director of the Indian Institute of Plantation Management in Bangalore is a unique academic - with background in physics and with post graduate attainments in management field, deeply immersed in Indian philosophical literature. His creative intellect has offered a management trilogy commencing with an
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interpretation of Indian philosophy for purposes of integration into management and then bridging the chasm between science, religion and philosophy through the medium of poetry. The other person - a pioneer in this field - is Prof S K Chakraborty whose deep understanding of vedanta and dedication to vedantic value systems has led him to formulate a powerful theme of ethico-moral management technique. These savants of literature share a common view of the distortions created in the minds of Indian managers and professionals by a lop-sided view, devoid of a sense of value systems, of scientific developments and of the benefits of technology. Their writings have influenced the evolution of a practical matrix of relationships between values and management activities by this author. Incidentally, matrix-type valuemanagement relationships have also been represented in Ethical Orientation Models by John DallaCosta and the Virtue Matrix (HBR, March 2002).
DEVELOPMENT INDIVIDUAL
OF
THE
The first of Dr Subhash Sharmas management trilogy is Western Windows, Eastern Doors which presents innovative ways of applying principles of Indian philosophy to the assessment of human personality and defining a new approach to motivation. The application is centered around the potential in every
individual for development of personality. The book exposes the manager to practical ways of ensuring justice and equity in transactions. A central element in the theme is the development of character and the creation of an ambience for an equitable assessment of people and for supporting them in their chosen path of selfdevelopment. The book stresses the importance of development of a mindset that would knead human values and respect for human dignity into business strategies. The book contains a good deal of lateral thinking for professionals to ponder over; take for example the chapter on the The Subaltern View of the Organisation, there is probably no other book or article where the lopsidedness of top-down management is brought home so powerfully. The second and the third publications in this trilogy, Quantum Rope and Arrows of Time, are a poetic representation of the synergy between conceptual science, creativity and spirituality. There are several ways of interpreting these concepts and relating them to practical management. Since modern business of any kind is dependent upon technology as a prime tool, managers and other professionals have to ensure that scientific development satisfies legitimate human aspirations. Many serious thinkers have written extensively on the need for a reassessment of the benefits of high
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technology. Dr Sharma offers an emotion-bound recapitulation of linkages between scientific concepts and mysticism. Poetry brings out the convergence of scientific genius and philosophy, and the complementarity of facts and values. This is part of an attempt to counter the distortion in interpretation of natural selection in biological evolution which has affected management attitudes deeply. Dr Sharma finds it more fruitful to explore the convergence of thought on the sources of creativity (in science or any other domain) and spirituality than dwell on the apparent confrontation between science and the humanities. Quantum Rope draws upon the similarities of intuitive experience between modern physics, spiritual myths and symbolism. The Arrows of Time uses folklore and poetic formations to make the point. The power of poetic imagination to create an awareness of universal values may be seen in two samples: When we see through times vision We see new cosmic regions Through the window we see horizon We see fission and fusion (p.8) Time encircles itself Like the serpents coil It gets unfolded In the farmers soil
between the macrocosmic features and the microcosmic detail of reality. These are part of the Indian ethos which these philosophers draw upon to propagate a value-based management style. Time as a metaphor in management will appeal to people at different levels of personal development. Managers, administrators and planners may have professional horizons with different measures of TIME. Dr Sharmas poetry highlights the interplay of content, time element and imagery between scientific, social, religious, and spiritual divisions and touches upon the underlying unity that he perceives in them; the impact of his poetic imagery is scaled to the emotive and intellectual effort put in by a motivated reader.
SACRO-SECULAR SYMBIOSIS
The concept of symbiosis of secularism and sacred traditions is the central theme of a powerful paradigm built on vedantic principles by Prof. S.K. Chakraborty. Prof. S.K. Chakrabortys elaboration of his expression sacrosecular symbiosis stresses the philosophical basis in Indian heritage literature for holistic management. The Professor has a unique way of expressing the invariance of universal value systems. The transcendent and the eternal are two sides of the same coin, says Prof. Chakraborty, Unless the decision-maker improves the capacity to
(p.36)
The purpose here is to show that the genius of India understands the linkages
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transcend a given situation, to perceive it holistically, his/her choice will tend to suffer from ethico-moral contamination. the core of all religions involves transcending the contaminating lower self or ego where self-interest is the principal motivating force (pp.78-79) Prof Chakraborty concludes his chapter on corporate Ethico-Morality with: ..it takes time for most of usto recognise that our intellectual knowledge and reasoning power do not necessarily translate into noble will, pure motive. .It is the Divine Consciousness that may make us realise the sacred link which is the true empowerment for ethico-moral management of our secular roles. Another quote directly addresses a point which is the central idea in this paper. He writes leadership transformation is a process comprising entirely of the use of inner vision and training of the heart and not in the sharpening of the intellect
ideas into a four-level hierarchy of values ranging from pure self-interest to sublimated concern for others. This hierarchy of values corresponds to work ethics constituting a full range, from mere compliance to sublimated concern for the common good. (Figure 1, first published in Chinmaya Management Review, December 1997) This Figure is one manner of representation of the linkage (crosspoint indicators are marked) between time-invariant core values and management techniques and actions. It is a ready reckoner for identifying primary values involved in specific management actions. Recent publications report studies that come close to this perspective on management. The book Managing values and beliefs in organisations by Tom McEwan provides summaries of two studies- by Kolhberg and Carol Gilligan. Kolhberg speaks of the preconventional, conventional and post-conventional levels which describe motivation in terms very similar to the four-level motivational hierarchy. Carol Gilligan alludes to a three-level motivation but she differs in the characteristics of people at these levels. Kolhberg relies on fairness and the good of all as universal principles whereas Carol Gilligan focuses on concern for others and human relationships.
VALUES IN MANAGEMENT
These views do not constitute a radical concept but they show that emotion and intuition have a large part to sustain equity and respect for human values. Some critics dismiss these approaches as obscure philosophy of no relevance to practical business. This author has some experience in translating these
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VALUE-BASED MANAGEMENT AND INDIVIDUAL SELF-DEVELOPMENT The ultimate purpose is to promote values in management and to examine how the natural subliminal mindset can be the centre of Indian management styles. Dr. Sharmas trilogy and the writings of Prof. S.K.Chakraborty show that the Indian ethos has a subliminal understanding of the symbiosis of rationality and spirituality. A matrix of correspondence between moral values and managerial actions can be established on this basis. Most of the management techniques are designed to motivate the employees to achieve their objectives efficiently or optimally. The techniques however are external forces acting upon the employees. In order to establish enduring and mutually profitable business relationships, employees have to undertake positive introspection and determine their paths to develop skills, attitudes and supportive culture. This is a conscious effort at selfdevelopment from self-centeredness to true altruism. External incentives such as ESOPs, bonuses etc will be effective only if the employees are motivated through self-development. Ethical attitudes are a product of this process; this is an evolutionary approach to ethics in terms of TIME. Figure 2 represents measurable and non-measurable values in value-management relationships with
transparency and equity as the foundation for individual selfdevelopment. It is one version of the matrix in four levels in the path of progress of an individual from selfinterest to various degrees of others orientation. The basic concept is that organisational culture firmly embedded in equity (without which nothing will work) provides the best impetus for motivation because it is based on positive introspection with the inner self. The strategy is firmly based on values. Culture and Vision are the creations of the entrepreneur and other leaders. These quantitative as well as non-quantitative values constitute the four levels with corresponding effort and responses from the people in the organisation. Value-based management through conscious effort by the personnel is not a radical thought but it focuses full attention on emotion and intuition to sustain true equity and respect for human values. Some critics dismiss these approaches as obscure philosophy not of much help in practical business. This author has some experience in management with the values and motivation implicit in the four-level hierarchy of values. It was possible to achieve results corresponding to the range from mere compliance to enthusiastic concern for the common good.
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Recent studies have provided some answers which come close to this perspective of management. In his book Managing values and beliefs in organisations Tom McEwan provides summaries of two studies-by Kolhberg and Carol Gilligan. Kolhberg speaks of the preconventional, conventional and post-conventional levels which describe motivation in terms very similar to the four-level motivational hierarchy originally described in a 1996 paper. Carol Gilligan also alludes to a threelevel motivation but she differs in the characteristics of people at these levels. Kolhberg relies on fairness and the good of all as universal principles whereas Carol Gilligan is said to focus on concern for others and relationships. Far below the apparent conflicts that exist in Indian society these attributes exist and they need to be tapped and brought to surface in management styles. G Zhukav, a scientist, says it all in these words in The Seat of the Soul: [pp 164 - 168] When an individual invokes the energy ofspiritual partnership, not only
the partnership that it forms with another individual is affected, but also its community, nation and the global village. ..within our species there are degrees of soul consciousness. The significance of the evolution of responsibility is that each human being moves through levels of responsibility on its way to wholeness.
CONCLUSION
Many philosophers and managers have written about Indian management styles. This article draws attention to the contributions of two scholars and has spotlighted the nature of their explorations into the Indian mindset with its potential to form the essence of Indian management styles and has mentioned an example of translating these ideas into a practical valuemanagement matrix. Attributes in the mindset have to be brought to surface and nurtured. Obviously further exploratory work could provide multiple approaches.
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Fig.2: Value-Based Management: Values & Individual SelfDevelopment

VALUES
Spiritual Leadership
Inspirational Intuitive Learning / Creativity
Discipline
Work Ethic
Teamwork Long Term / Short Term concerns Quality / Service conscious
Leadership by example Mind as source of action Shared objectives Customer orientation Inter-personal relations Result-orientation strong
Compliance
Legal mandates Organizational regulations
Self-interest
Enlightened selfinterest: Others orientation
Mission-oriented Strong sense of human values
Sublimation of self-interest Visionary
I n d i v i d u a l M O T I V A
S e l f - d e v e l o p m e n t T I O N E Q U I T Y
REFERENCES
!
! !
Swami Someswarananda, Indian Wisdom for Management, Vivekananda Centre for Indian Management. S.K.Chakraborty, Ethics in Management, Oxford University Press. Subhash Sharma, Management in New Age: Western Windows Eastern Doors, New Age International Publishers, New Delhi. Subhash Sharma, Quantum Rope: Science, Mysticism & Management, New Age International Publishers, New Delhi. Subhash Sharma, Arrows of Time: From The Blackholes To The Nirvana Point,
! ! ! ! !
New Age International Publishers, New Delhi. Jack Hawley, Re-Awakening the Spirit at Work, Tata McGraw Hill. Gary Zukav, The Seat of the Soul, Simon & Schuster. M.R.Pai, The Legend of Palkhivala, Popular Prakashan. John DallaCosta, Ethical Imperative, Perseus Books. R.Parthasarathy, Values & Management, Chinmaya Management Review, Vol.1. No.1, December 1997.
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Human Resource Management Practices as Antecedents of Perceived Organizational Support:

Evidence from an Indian Organization
NIVEDITA KOTHIYAL1
ABSTRACT
model investigating Human Resource Management (HRM) practices as antecedents of Perceived Organizational Support (POS) was developed and tested with the help of responses received from a sample of 277 executives from an Indian pharmaceutical organization. The perceptions on Realistic Job Preview, Fairness of Performance Appraisal, Career Development, Training, and Satisfaction with Benefits were measured. Results suggest that perceptions of these practices have significant correlations in the positive direction with POS. Also, except for perceptions on training, all the other variables contributed significantly to the development of POS. Tenure with the organization was the only demographic variable that contributed significantly to the development of POS. The stastistical method used was regression.
1. INTRODUCTION
For many years, researchers have sought to identify factors that account for performance of organizations. Despite this, why some organizations attain higher performance than other organizations remains an intrie, and only
partially answered question (Lenz, 1980). More recently, efforts have been made by human resource management (HRM) theorists to establish a causal link between HRM and performance (Cooke, 2001). The reasons for this intense interest in the causal link between HRM
Assistant Professor, Institute of Rural Management, Anand
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and performance are not hard to find. Organizations across the globe are facing the challenges of increased competition as a result of globalization, deregulation and privatization, increased concentration and rapidly changing technology. In such an uncertain, turbulent and competitive environment, organizations have to ensure high performance in order to survive. The current emphasis on HRM-performance relationship has also stemmed from the thinking that investments made on human resources should reflect on the bottom line of the organization. This has led to growing number of studies which examine the potential contribution that good human resource policy can make to improve organizational performance so much so that the impact of human resource management on performance has become the dominant research issue in the field (Guest, 1999). But, this new development is not without the accompanying debates. A closer scrutiny of all the contributions taken together reveal the conceptual and methodological issues involved in the debate, and point to the gaps in our understanding of the phenomenon (Kothiyal, N., 2004). The most important conceptual issue in HRM-performance relationship is the level involved in the relationship wherein it is recognized that it is a multi-level question and requires application of a multi-level perspective
(Wood 1999; Ostroff et al 2000). To overcome this apparent gap in the understanding of the topic, researchers have called for empirical research that tests the full range of antecedent, intermediate linkage, and outcome variables (Ferris et al 1998). Organizational commitment has been considered as an important employee attitude that has salience for individual as well as organizational performance (Mowday, 1998). There is an important stream of research that examines the antecedents of organizational commitment (Meyer et al 2002). Recently, many research studies have examined the role of perceived organizational support as a proximal antecedent of organizational commitment (Rhoades et al 2001). The objective of this paper is to provide evidence on HR practices as antecedents of perceived organizational support. The paper is organized as follows. Section II gives a brief review of literature on the concept of perceived organizational support and develops a model specifying HR practices as antecedents of perceived organizational support. Section III discusses methodology employed for the study. Section IV describes the results. The last section discusses the implications of findings and direction for future research.
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2. REVIEW OF LITERATURE
The concept of perceived organizational support is rooted in social exchange theory. Blau (1964) posited that relationship formation is one of the basic problems of social interaction that must be resolved for society to remain stable. He contrasted economic exchange with social exchange as the basis for relationships. Social exchange refers to relationships that entail unsuspected future obligations. Like economic exchange, social exchange generates an expectation of future return for contributions; however, unlike economic exchange, the exact nature of that exchange is unspecified. According to Levinson (1965, cf. Eisenberger et al 1986), employees tend to view actions by agents of the organization as actions of the organization itself. Thus, there is a kind of personification attributed to the organization. Eisenberger et al (2001) have argued that reciprocity norm that operates in a social-exchange situation, when one person treats another well, the other person is obliged to return the favourable treatment (Gouldner, 1960) may also apply to employee-employer relationships, obliging employees to recompense advantageous treatment that they receive from their work organizations.
Following the logic of social exchange mechanism operating in organizational context, Eisenberger et al (1986) developed the Survey of Perceived Organizational Support originally consisting of 36 statements representing various possible evaluative judgments of the employees by the organization and discretionary actions the organization might take in diverse situations to benefit or harm the employee. The researchers, in a series of studies, tested the hypotheses (a) employees form global beliefs concerning the extent to which the organization values their contributions and cares about their well being (b) such perceived organizational support reduces absenteeism (c) the strength of the relation between perceived organizational support is greater for employees with a strong exchange ideology than those with a weak exchange ideology. The results supported the three hypotheses. Eisenberger et al (1990), in another series of studies, examined the relationship of perceived organization support with job attendance and performance. They also argued that perceived organizational support is positively related to both affective commitment and calculative involvements of an employee. According to them, perceived organizational support would also enhance calculative involvement by creating trust in the
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employees that the organization will take care to fulfill its exchange obligations of noticing and rewarding efforts made by employee on its behalf. Results supported the positive relationship of perceived organizational support with attendance and job performance. Similarly, perceived organizational support was found to be positively related to affective commitment as well as calculative involvement in terms of performance-rewards expectancies, which were related to pay and promotion, and also to approval, recognition and influence. But in contrast, Shore et al. (1991), in a study found that perceived organizational support is strongly correlated with affective commitment but not related to continuance commitment. Eisenberger et al (1997) in a study tested the hypotheses that when favorable job conditions are a result of discretionary action by the organization, they are going to contribute to perceived organizational support as felt by employees. But, favourable job conditions on which an organization has little control will not enhance the perceived organizational support felt by employees. The results supported their hypotheses. In a subsequent development in the field, Rhoades et al (2001), conducted a series of studies and found that perceived organizational support is a mediator in the association between
favorable work experiences and affective commitment. They included organizational rewards, procedural justice and supervisor support as the favorable work experiences. Eisenberger et al (2001), tested the hypotheses that felt obligation on the part of the employee is the reason why perceived organizational support is positively associated with affective commitment. Their results supported the hypotheses under test. In a metaanalysis, Rhoades et al (2002) identified 73 studies on perceived organizational support that examined the antecedents of perceived organizational support, consequences of perceived organizational support, or both the antecedents and consequences. The antecedents identified in the metaanalysis were categorized in five categories: fairness, supervisor support, organizational rewards and job conditions (Recognition, Pay, and Promotion; Job security; Autonomy; Role stressors; Training; and organizational size), personality characteristics (Positive affectivity, Conscientiousness) and demographic characteristics. The consequences of perceived organizational support identified in the meta-analysis are organizational commitment, over-all job satisfaction, job involvement, performance, strains, desire to remain, and withdrawal behaviour (absenteeism and tardiness). The results suggested that fairness,
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supervisor support, organizational rewards and job conditions had strong relationship with perceived organizational support whereas personality characteristics and demographic characteristics were weakly related to it. Allen et al (2003), in a study examined the role of supportive HR practices as being an antecedent to development of perceived organizational support. They also examined the influence of perceived organizational support on turnover intentions and actual turnover rates in two samples, one cross-sectional and other longitudinal, mediated by affective organizational commitment (measured by OCQ) and global job-satisfaction. Perceived organizational support was conceived to be an important mediator in the relationship of supportive HR practices with organizational commitment and global job satisfaction. The model proposed by the researchers had supportive HR practices as the most distal antecedents to turnover rates, mediated by perceived organizational support, organizational commitment and global job satisfaction, and turnover intentions in each subsequent step of a causal model. The supportive HR practices that they included in this study were participation in decision making, fairness of rewards and growth opportunity, taking them as suggestion of an organizations investment in
employees and recognition of employees contribution. The empirical results supported their model. Supportive HR practices were positively related to perceived organizational support, which in turn was positively related to organizational commitment and global job satisfaction, which in turn were negatively related to turnover intentions and actual turnover rates. Building on the previous work (Allen et al 1997, Eisenberger et al 1997) we focused on HR practices that may be perceived by an employee as discretionary action by the organization, and thus may result in a favorable evaluation of the organization by the employee. In this regard, realistic job preview, fairness of performance appraisal, career development, training, and satisfaction with the benefits offered by the organization are HR practices which may signal that the organization cares about the employees and is concerned about their wellbeing, can be trusted and should be reciprocated with equal care and concern by the employees. Thus, these HR practices should act as antecedents for development of perceived organizational support in employees which in turn should facilitate development and exhibition of positive and favourable attitudes and behaviours. This casual sequence should be an explanation to the missing mediating hypothesis as
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argued by Gardner et al (2000) that theoretical models in strategic human resource management research commonly include employee attitudes and behaviours as key mediating links between human resource practices and firm performance. However, almost all empirical SHRM work to date has ignored the mediating hypothesis and merely examined the direct relationship between HR practices and firm outcomes.
Sample and procedure The sample for the study being reported was drawn from population of executive employees of an Indian Pharmaceutical Company, as part of a larger study (Kothiyal, N., 2004). The corporate office of the organization is located in Western India. The organization is a dominant national player with significant presence in the global markets. It is the fourth largest group in the Indian Pharmaceutical Industry. Data was collected from the manufacturing plant, research centre, various marketing divisions and the corporate office in the organization in phases as these units are located at different premises. In the first phase, data was collected from the research centre. In the targeted population, there were 100 regular employees and 40 trainees. The difference between the two groups was regular employment status for the regular employee and probationary status for the trainees. Questionnaires were circulated to the whole population at the research centre. 68 regular employees and 30 trainees responded leading to a response rate of 68% and 75%. The total response rate from the research centre was 70%. In the next phase, data was collected from the manufacturing plant. The eligible population in the manufacturing plant was approximately 250. With the help of HR department at the manufacturing
3. METHOD
For data collection a structured selfadministered survey questionnaire was used. The important variables for the survey questionnaire were identified through literature review and the items in the survey questionnaire were constructed using the scales, used in previous research work Other than the demographic variables, all the other variables were measured by multi-item five point Likert-type scales. It is always recommended to have multi-item scales, as a single item scale cannot fully represent a complex theoretical concept, and is likely to be less reliable than its multi-item counterpart (McIver et al 1994). All multi-item scales were summed and averaged to create a scale score. All the multi-item scales were scored such that a high score reflects a favourable perception/evaluation of that variable.
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plant, 150 respondents were randomly selected and given the questionnaire out of which 91 responses leading to a response rate of 60.66%. 150 questionnaires were distributed to the product management team, and field staff i.e. regional business managers and area business managers of the different marketing divisions. 72 responses came back leading to a response rate of 48%. In the corporate office, 40 questionnaires were circulated with the help of the corporate HR department. 17 responses came back leading to a response rate of 42.5%. The total number of responses received was 278. One response had missing demographic information, which reduced
the effective sample size to 277. the demographic profile is given in table 1. Measures Perceived Organizational Support:It measured perception of employee on how committed the organization is to him/ her on 4-item Likert-type scale (1 = strongly disagree to 5 = strongly agree). The items were adapted from Eisenberger et al (1986). Example item is The organization values my contribution to its well being and Cronbachs alpha is 0.79. Realistic Job Preview: It measured perceptions of employees on whether they were given a realistic preview of the job during selection on 2-item
Table 1: Demographic profile (n = 277)

Gender 253 Males Age 7.2% (20-24 years) 24.8% (24-28 years) 23.1% (28-32 years) 19.9% (32-36 years) 9.7% (36-40 years) 15.2% (More than 40 years) Education 2.9% (Diploma Holder) 39% (Graduate) 54.2% (Post Graduate) 4% (Doctorate) Total experience 19.1% (Less than 2 years) 9.7% (2-4 years) 9.0% (4-6 years) 11.6 % (6-8 years) 9.7% (8-10 years) 40.8% (More than 10 years) 42.2% (Less than 2 years) 14.1% (2-4 years) 8.3% (4-6 years) 7.9% (6-8 years) 4.3% (8-10 years) 23.1% (More than 10 years) Tenure
24 Females
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Likert-type scale (1 = strongly disagree to 5 = strongly agree). Example item is I was given an accurate understanding of the job content during the selection procedure and Cronbachs alpha is 0.79. Fairness of Performance Appraisal: It measured employees perception on whether performance appraisal is fair on 8-item Likert-type scale (1 = strongly disagree to 5 = strongly agree). The items were adapted from Smith (1995). Example item is My supervisor knows what is involved in my job well enough to assess my performance fairly and Cronbachs alpha is 0.83. Career Development: It measured perceptions of employees on whether the employee is aware of his/her career path in the organization, and whether the organization takes interest in his/her development on a 4-item Likert-type scale (1 = strongly disagree to 5 = strongly agree). The items were adapted from Gaertner et al (1989). Example item is My organization takes an interest in my development or advancement and Cronbachs alpha is 0.77. Training: It measured employees perception on whether he/she is satisfied and happy with the training opportunities provided on a 4-item Likert-type scale (1 = strongly disagree to 5 = strongly agree). The items were adapted from Gaertner et al (1989). Example item is I am satisfied with the
training I have received so far and Cronbachs alpha is 0.94. Satisfaction with Benefits: It measured employees satisfaction with benefits provided by the organization on a 4-item Likert-type scale (1 = strongly disagree to 5 = strongly agree). The items were adapted from Heneman et al (1985). Example item is I am satisfied with the number of benefits that I receive and Cronbachs alpha is 0.86. Gender: It was coded as 0 for female and 1 for male Age: It was coded as 1 for 20-24 years, 2 for 24-28 years, 3 for 28-32 years, 4 for 32-36 years, 5 for 36-40 years, 6 for more than 40 years Education: It was coded 0 for diploma holders, 1 for graduates, 2 for post graduates, 3 for PhDs Total Work Experience: It was coded 1 for less than 2 years, 2 for 2-4 years, 3 for 4-6 years, 4 for 6-8 years, 5 for 8-10 years, 6 for more than 10 years Tenure: It was coded 1 for less than 2 years, 2 for 2-4 years, 3 for 4-6 years, 4 for 6-8 years, 5 for 8-10 years, 6 for more than 10 years Analyses For data analyses, all multi-item scales were summed and averaged to create a scale score. All the multi-item scales were scored such that a high score
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reflects a favourable perception of that variable. The data were analyzed in three steps. In the first step, descriptive statistics were obtained for the sample. In the second step, zero-order correlations were computed to examine the pattern of relations among the variables. In the third step, multiple regression was performed to test the model. Data analysis packages such as SPSS version 10 and Systat version 8.0 were used for data analysis.
modest and in the range of 0.385 to 0.451. Each of the antecedents was also significantly related to POS. Regression Analysis Hierarchical multiple regression analysis was performed to test the hypothesized model. In the first step demographic variables: gender, age, education, experience and tenure were entered as control variables. In the next step, employee perceptions of HR practices variables were introduced into the regression equation. Regression results show that in the first step, none of the five variables entered: gender, age, education, experience and tenure were significant predictors, though the direction of the relationship of these variables except for education
4. RESULTS
Descriptive Statistic and Correlations The means, standard deviations, and correlations among study variables are given in table 1. The antecedent HRM practices were all significantly correlated with each other. The correlations are
Table 2:
Sample means, standard deviations and correlations (n = 277)

Mean S.D. .67131 1 2 3 4 5 6 3.5529
Perceived Organizational Support Realistic Job Preview Fairness of Performance Appraisal Training Satisfaction with Benefits Career Development
3.6300 3.5678
.89750 .64421
.498** .596** .451**
3.7598 3.1441 3.7090
.87887 .70157 .71090
.474** .385** .484** .387** .697** .439**
.358** .460** .617** .391** .536** .487**
** Correlation is significant at the 0.01 level (2-tailed).
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with the dependent variable perceived organizational support was positive. The explained variance in the first step was 7.2%. In the next step, tenure (p< 0.10), realistic job preview (p< 0.05), fairness of performance appraisal (p<0.001), and career development (p< 0.001) were the significant predictors of perceived organizational support. The increment in explained variance at the second step was 52.3%, which was highly significant (p<0.001). The over all explanatory
power of the final model was 59.6%. Adjusted R 2 -value was 58%. The coefficient of Determination R2 was highly significant as indicated by the F statistics (p<0.001).
5. DISCUSSION & CONCLUSION

This study contributes to both the POS literature and also to literature focusing on theory development that attempts to explain how Human Resource Management may impact firm
Table 3:
Variables
Regression Analysis with Perceived Organizational Support as Dependent Variable (n = 277)

Model 1 Beta Model 2 Beta 0.039 -.075 -.024 0.096 0.111*
DemographicVariables Gender Age Education Experience Tenure Human Resource Practices Variables Realistic Job Preview Fairness of Performance Appraisal Training Satisfaction with Benefits Career Development Constant/Intercept F-value (d.f) R2-value Adjusted R -value
2
.087 .112 -.109 .029 .046
0.128*** 0.204**** 0.074 0.108** 0.411**** 3.297*** 4.229 (5,271)**** .072 0.055 0.072*** 0.306 39.170 (10,266) **** 0.596 0.580 0.523****
R2 Change Durbin-Watson = 2.054 * p<0.10 **p<.0.05
***p<0.01
****p<0.001
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performance by providing evidence on HRM contribution to development of POS which has been suggested to be an important intermediate link in the missing mediating hypotheses in Strategic Human Resource Management research. Results in a sample of executives from an Indian Pharmaceutical organization indicated that employee perceptions of HR practices such as realistic job preview, fairness in performance appraisal, training, satisfaction with benefits and career development were positively and significantly related to POS, adding to our understanding of the factors leading to development of POS. This is consistent with the earlier findings by Meyer et al (2000) wherein the correlation coefficients between HR practices and perceived organizational support were in the range of 0.48 to 0.79. Though, Allen et al (1997) have reached to a similar conclusion about role of supportive HR practices (participation in decision making, growth opportunities, and fairness of rewards/recognitions) to development of POS, the present study has taken more specific HR practices such as realistic job preview, fairness of performance appraisal, training, satisfaction with benefits and career development, thus providing more refinement in explanation of factors contributing to development of POS.
The results of the study further suggest that fairness of performance appraisal, and career development are highly significant predictors of POS. Realistic job preview, and satisfaction with benefits are also significant predictors of POS. The findings are not surprising as these practices are more a part of the discretionary action taken by the organization in the form of organizational policy and procedures, and also the actions taken by the supervisors as agents of the organization. Thereby, these practices cause reciprocity norm that operates in a social-exchange situation to manifest itself in organizational setting also, resulting in a favourable evaluation of the organization in form of perceived organizational support. Training has no significant explanatory influence on POS. This result is consistent with the result of the metaanalysis by Rhoades et al (2002) wherein the relationship between training and perceived organizational support is moderate. A reason for this finding could be that training conducted in the organization, particularly in the manufacturing unit was more a part of good manufacturing practices (GMP) as required by external accreditation agencies. Therefore, employees may not have perceived it as a discretionary action taken up by the organization.
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Tenure is only demographic variable that has significant explanatory power on POS. This finding is not surprising given the social exchange theoretical underpinning of POS. The results of the present study are also significant in the light that previous evidences on role of HRM practices in development of POS have come from West, mainly from United States of America.
Cooke, F. L., (2001), Human Resource Strategy to Improve Organizational Performance: A Route for Firms in Britain? International Journal of Management Reviews, Vol. 3, No. 4, 321339. Eisenberger, R., Armeli, S., Rexwinkel, B., Lynch, P D., & Rhoades, L. (2001), . Reciprocation of Perceived Organizational Support, Journal of Applied Psychology, Vol. 86, No. 1, 42-51. Eisenberger, R., Cummings, J., Armeli, S., & Lynch, P., (1997), Perceived Organizational Support, Discretionary Treatment, and Job Satisfaction, Journal of Applied Psychology, Vol. 82, 812-820. Eisenberger, R., Fasolo, P., & DavisLaMastro, V., (1990), Perceived Organizational Support and Employee Diligence, Commitment, and Innovation, Journal of Applied Psychology, Vol. 75, No. 1, 51-59. Eisenberger, R., Huntington, S., & Sowa, D. (1986), Perceived Organizational Support Journal of Applied Psychology, Vol. 71, No. 3, 500-507. Ferris, G. R., Arthur, M. M., Berskson, H. M., Kalpan, D. M., Harrell-Cook, G., Frink, D. D., (1998), Social Context and HRM, Human Resource Management Review, Vol. 8, No.3, 235-264. Gaertner, Karen. N., & Nollen, Stanley. D., (1989), Career Experiences, Perceptions of Employment Practices , and Psychological Commitment to the Organization, Human Relations, Vol. 42, No. 11, 975-991. Gardner, T. M., Moynihan, L. M., Park, H. J., & Wright, P. M. (2000), Beginning to Unlock the Black Box in HR Firm Performance Relationship: The Impact of HR practices on Employee Attitudes and Employee Outcomes, Working paper 01-12, Center for Advanced
6. LIMITATIONS
The present study has several limitations. Use of self-report questionnaires to collect data is one of them. Secondly, the study being crosssectional in nature, causal nature of the relationships cannot be firmly established. Moreover, the study was conducted on the executive population of one particular organization. Thus, the results cannot be generalized across hierarchical levels and other organizations. In future, longitudinal research with a diverse sample of organizations and diverse sample of employees may to some extent help in overcoming same of these weaknesses.
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Allen, D. G., Shore, L. M., & Griffeth, R. W., (2003), The Role of Perceived Organizational Support and Supportive Human Resource Practices in the Turnover Process, Journal of Management, Vol. 29, No. 1, 99-118. Blau, P. M. (1964). Exchange and power in social life. New York: Wiley.
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Guest, D. E., (1997), Human Resource Management and Performance: A Review and Research Agenda, The International Journal of Human Resource Management, Vol. 8, No.3, 26376. Heneman, H. G. III, Schwab, D. P., (1985), Pay satisfaction :Its multidimensional nature and measurement, International Journal of Psychology, 20, 129-141. Kothiyal, N. (2004), Impact of Human Resource Practices on Firm Performance, Unpublished doctoral dissertation, Institute of Management, Nirma University of Science and Technology, Ahmedabad. Lenz, R. T., (1980), Antecedents of Organizational Performance: An Interdisciplinary Review, Academy of Management Proceedings, p2. Mcgrath, J., (1982), Dilemmatics: The Study of Research Choices and Dilemmas, In J. E. McGrath, J. Martin, & R. A., Kulka (Eds.): Judgement Calls in Research, Newbury Park, CA: Sage. Meyer, J. P., & Smith, C. A., (2000), HRM Practices and Organizational Commitment: Test of a Mediation Model, Canadian Journal of Administrative Sciences, Vol. 17, No.4, 319-331. Meyer, J. P., Stanley, D. J, Herscovitch L., and Topolnytsky L., (2002), Affective, Continuance, and Normative Commitment to the Organization: A Meta-analysis of Antecedents, Correlates, and Consequences, Journal of Vocational Behavior, Vol. 61, 2052 (2002). Mowday, R. T., (1998), Reflections on the Study and Relevance of
Organizational commitment, Human Resource Management Review, Vol. 8, No. 4, 387-401.

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ODriscoll, M. P & Randall D. M., (1999), ., Perceived Organisational Support, Satisfaction with Rewards, and Employee Job Involvement and Organisational Commitment, Applied Psychology: An International Review, Vol. 48, No.2, 197-209. Ostroff, C. & Bowen, D. E., (2000), Moving HR to a Higher Level, In K. J. Klein & S. W. J. Kozlowski (Eds.), Multilevel theory, research, and methods in organizations. San Francisco:Jossey-Bass. Rhoades, L., & Eisenberger, R., (2002), Perceived Organizational Support: A Review of the Literature, Journal of Applied Psychology, Vol. 87, No.4, 698714. Rhoades, Linda, Eisenberger, Robert & Armeli, Stephen ,(2001), Affective Commitment to the Organization: The Contribution of Perceived Organizational support, Journal of Applied Psychology, Vol. 86, No. 5, 825836. Shore, L. M., & Tetrick, L. E., (1991), A Construct Validity Study of the Survey of Perceived Organizational Support, Journal of Applied Psychology, Vol. 75, 487-499. Smith, C. A. (1995), Human resource practices and policies as antecedents of organizational commitment, Unpublished doctoral dissertation, Department of Psychology, The University of Western, Ontario, London, Ontario, Canada. Wood, S., (1999), Human Resource Management and Performance, Internal Journal of Management Reviews, Vol. 1, No. 4, 367-413.
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Development of a Tool to Assess Organisational Culture in Indian Organisations

P.K.KOTESWARA RAO1, P.T. SRINIVASAN2 AND S.GEORGE.J.P3
ABSTRACT
rganisational culture has a significant effect on how employees view their organisational roles and responsibilities. With increasing globalization, a greater knowledge of organisational culture and its effect in non-western cultures can be beneficial for practicing leaders and decision makers in managing their business and in making effective decisions. Therefore, it is essential to capture culture and track it. This study is an attempt to develop a questionnaire which would be suitable for capturing culture in organisations particularly in the Indian context. relations in controlling organizational performance. Though the researchers aimed to study the relationship between the physical environment and productivity, the studies revealed that work performance depends not on the individuals alone, but on the network of social relationships developed and maintained at work place (Schein, 1983). Hawthorne studies that uncovered an
INTRODUCTION
A series of studies was conducted between 1927 and 1932 at Western Electrics Hawthorne Works in Illinois by a group of researchers led by Elton Mayo, a Harvard psychologist who was actively assisted by W.L.Warner, a noted anthropologist. The studies became popular as Hawthorne studies that introduced the new variable, people
1 2 3
Senior Executive in Southern Railway Professor, Department of Management Studies, University of Madras Doctoral Research Scholar in Management, University of Madras
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informal social system and an associated body of shared assumptions and beliefs among the group of workers who participated in the study first revealed the presence of organizational culture even though it was not termed so (Baba, 1996). According to Hawkins (1997), the 1970s saw the gradual development of the academic field of organizational culture, but it was in the 1980s that the field became popular and the concepts related to culture entered the language and constructs of organizational managers. The pinnacle event in this movement was the publication of best seller, In search of Excellence by Peters and Waterman (1982). Hofstede (1985) conducted pioneering research in the area of culture by collecting the data from subsidiaries of a multi national company in 40 countries. The study identified four dimensions namely, Power Distance, Uncertainty Avoidance, Individualism and Masculinity on which the culture of a country differs. It concludes that organizations are culture-bound and the culture affects not only the behaviour of people within organizations but also the functioning of organizations as a whole. Deal & Kennedy (1982) say that a strong organizational culture has almost always been the driving force behind continuing success in American business. 71% of International Organizational Behaviour /
Human Resource Management articles published during the period 1970-1990), included the concept of culture and of these almost all (94%) conclude that culture makes a difference in Organizational Behaviour and Human Resource Management issues (Joynt and Warner, 1996).
ORGANISATIONAL CULTURE IN THE INDIAN CONTEXT

Employees are influenced by multiple cultural institutions such as family, community, nation, state, church, educational system, and other work organizations, and these associations shape their attitudes, behavior, and identity. Employees bring these influences with them when they join an organization, so it is difficult to separate an organizational culture from the larger cultural processes in .. (Hatch, 1997). This view is supported by the extensive empirical work of Hofstede (1980) on differences between national groups. He holds that there are fundamentally different ways of seeing work organizations depending on ones geographical, ethnic and religious origins and experiences. In India, people with different linguistic, geographic, caste and religious background join organizations. Thus, Indian organizations have provided settings for interaction of familial forces, interest groups, caste conflicts, regional
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and linguistic groups, class conflicts, and political and religious forces (Sinha and Sinha, 1994). In the context of organizational culture, Sinha and Sinha (1994) observe that Indians are disposed to structural relationships hierarchically. Many authors (Dumont, 1970; Kakar, 1978) have observed that the Indian social systems are steeply hierarchical and that Indians are highly status conscious. They feel easier to work in superior-subordinate roles than with equals (Kothari, 1970). Once a hierarchy is established, juniors are always obedient to their seniors and decision making process is never complete without the involvement of the bosses (Dayal, 1987). Juniors exhibit respect towards their seniors by way of standing up when they see them in the office, avoiding smoking and drinking in their presence, speaking gently, and avoiding disagreements with them during arguments at work (Roland, 1984; Sinha, 1988). The senior is expected to protect, help and provide patronage and affection to his juniors and in return, he expects loyalty, compliance and total submission by the subordinates (Sinha and Sinha, 1994). Kakar (1971) observes that a highly controlling superior has a positive effect on subordinate performance and job satisfaction. Chakraborty (1991) has identified several values that are predominant in Indian culture. These are
: respect for individuals, cooperation and trust, purification of mind, top quality product and services, work is worship, containment of greed, ethical-moral boundaries, self-discipline and restraint, need to give, renunciation and detachment. It is natural that these values get reflected in the culture of organizations that are operating in India because there is a link between the societal culture and organizational culture (Moore, 1961).
MEANING AND ASSESSMENT

Organizational culture is assessed by researchers in different manifestations. Some concentrate on its manifestations through myths, stories, and language (Martin, Feldman, Hatch and Sitkin, 1983; Martin, 1992) and others in the form of rites and rituals (Trice and Beyer, 1984), symbolic interactions (Glaser and Strauss, 1967; Hatch, 1993), and shared values and beliefs (Cooke and Rousseau, 1988). The study conducted by Hofstede, Neuijen, Ohayv and Sanders (1990) empirically shows that shared perceptions of daily practices from the core of an organizations culture and their findings provide support to the view that culture can be measured in quantitative terms. In their research study, Chatman and Jehn (1994) conceptualized and quantified organizational culture in terms of values and beliefs. They examined the effects
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of industry characteristics on organizational culture by assessing the similarities and differences in firm cultures within and across industries. Values typically act as the defining elements of a culture, and norms, symbols, rituals, and other cultural activities revolve around them (Enz, 1988). Realizing its importance given in the literature, it was decided to develop an instrument to measure organizational culture in terms of values and beliefs.
to synthesize these dimensions in a phased manner to develop an instrument to measure culture in organisations. Phase 1 Scanning and segregation: Hundred and twenty three blank cards were taken and the dimensions were written one on each card. With theoretical understanding of the subject and with the help of a small panel of experts, the cards were grouped in such a way that the dimensions which are similar both name wise and meaning wise fall into one group. There were 16 dimensions identified in this phase. Phase 2 Referring to a panel: Another panel of five experienced people from the areas of Training, HRD, Academics, Business consulting and Psychology was formed. The list of all the dimensions was given to them individually and the members asked to go through the same to check for repetitions and overlapping. Separate discussions were held with each of them duly explaining intended meaning and the context of each dimension selected in the first phase. In the light of the intended utility of the instrument for research in the Indian context, twelve dimensions emerged as a result of convergent view and the careful scrutiny by the panel. The dimensions were: Unity in diversity, Code of conduct, Quality consciousness, Customer care, Creativity-adaptability, Culture nurturing, Empowerment, Collaboration, Open communication,
DIMENSIONS IDENTIFIED IN LITERATURE

Literature review revealed that organisational culture is measured by various authors in terms of various dimensions. This research after an exhaustive review of literature has identified a total number of 123 dimensions (table 1). There is a possibility that there may be some more which have not fallen into the purview of this survey. There is no unique set of dimensions available universally. It appears that researchers have selected different set of dimensions based on their perceptions and business environment.
METHODOLOGY
Selection of dimensions The 123 cultural dimensions which were identified during literature review are not unique and most of them get repeated and overlapped. Hence, it is attempted
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Conflict management, Role clarity and Employee concern. Phase 3 Preliminary questionnaire: Based on the field experience of the authors and the discussions held with the subject experts, there were totally 109 items developed, ranging from eight to twelve items per dimension. The group of items meant to measure each of the twelve dimensions was identified clearly. The list of these items along with the dimensions was handed over to a panel comprising three HRD trainers and two HR managers and they were requested to evaluate the list against repetitions and overlapping in meaning and context, clarity and understandability. Detailed discussions were held with them individually and as a result, the size of the questionnaire was reduced to ninety six items, i.e. eight items per dimension. Thirty were negative statement out of the ninety six. The instrument was named as Organisational Culture Measuring Instrument (OCMI).
and Finance executives, and Software developers. A group discussion was held with the respondents immediately after collecting the filled-in questionnaires to check weather there were any doubts regarding the questions and their contextual meaning. None of them expressed any difficulty in filling up the questionnaire. The pilot study was conducted in a nonthreatened atmosphere and every participant was encouraged to express his views and opinions freely without any inhibition. Everyone expressed satisfaction regarding the filling up of questionnaire. Having been assured of the clarity of items of the questionnaire, the next step undertaken was to verify construct validity and reliability of the instrument OCMI.
MAIN STUDY
The sample population for the study was the executives who were doing part time management course in Chennai. There were totally 300 questionnaires distributed and 247 respondents duly filled up the same thus making the rate of return as 83%. The data thus collected were fed into the computer and analyzed statistically by using SPSS package. Choosing the items OCMI Guion(1965) suggested that to determine the extent to which items were able to discriminate among themselves in terms of some criterion that was usually the
PILOT STUDY
The purpose of any pilot study is to examine the reliability and validity of an instrument on a limited number of people from the population of interest before a full scale survey is undertaken. A sample of 30 middle level executives working in an organization in Chennai was selected after their willingness to participate was obtained. The sample was a mix of Trainers, HRD, Production, Marketing
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total score. According to Nuannally (1978), the items that correlate highly with total scores are the best items. So, Pearsons Correlation Coefficients were calculated for all the 96 items and for the total of each dimensions score of the items. Based on the correlations between items and their dimensions scores, 48 items were selected and the rest were discarded. Construct validity OCMI Forty eight items, which resulted from item analysis, were factor analyzed to identify the underlying dimensions, using Principal components method with orthogonal varimax rotation and the degree to which the items discriminated among themselves by way of factor loading. Eleven factors were extracted with Eigenvalue more than 1.00 and 65.8% of the total variance was explained in the process. It has become customary in factor analysis literature for loading of 0.33 to be the minimum absolute value to be interpreted (Kothari, 1992). However, items that showed o.4 or more factor loadings were retained for clarity and purity of sub-scales (Parida et al. 1990, Hofstede, 1998). By applying the above criteria, eleven factors were selected and these comprised 48 items. Reliability OCMI According to Kline (1986), Cronbach coefficient alpha is the most efficient
measure of reliability and should always be computed and it should always be greater than 0.7 when items are selected for a test. So, Cronbach Alpha Reliability analysis was conducted for the constituents of each dimension that was selected earlier from the results of factor analysis. Out of eleven factors, 10 factors have met the criteria of minimum alpha value greater than 0.7 and one factor did not meet this criterion since its alpha value was less than 0.6. Hence, 10 dimensions were selected and one factor due to low alpha value was dropped. Final version of OCMI Since one factor was dropped in the reliability analysis, the number of factors was reduced to ten and the total items got reduced to 46 from 48. so, the items were once again factor analyzed and results were tabulated. Table 2 shows the factor loading pattern together with Eigenvalues and the total variance. It is revealed that the analysis yielded ten factors and the number of items that belonged to each dimension got loaded together similar to the dimensions that were originally constituted with the same items. The Eigenvalues for all the ten factors were more than 1.00, all the factor loadings were more than 0.4 and they together explained 66.32% of the total variance. Hence, OCMI was constructed finally with ten dimensions that were constituted by forty six items including
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seven items that were negative statements. The scores of negative statements are to be reversed while computing dimensional scores. The details of the items along with their construct dimensions and labels together with alpha values are shown in table 3. The entire set of 46 items which make up the OCMI is presented in table 4.
CONCLUSION
The literature review had pointed out the number of studies and questionnaires on organisational culture. It is felt that though every questionnaire was developed to study a particular aspect and impact of the culture, a questionnaire which is holistic and Indian culture sensitive was conspicuous by its absence. In this study a questionnaire has been developed which covers all the aspects of the previous studies as well as specific aspects relevant to the culturally diversified countries like India. The limitation of the study is that the sample for pilot as well as final study and further study are selected from Chennai based executives. The questionnaire needs to be tested in other parts of the country which possibly could have unique and different in regional culture.
FURTHER VALIDATION
The final version of OCMI was further administered on a total of 461 executives drawn from four manufacturing firms (n = 279) and four IT sector organizations (n = 182) in Chennai. Factor analysis sector wise as well as for the entire sample unequivocally confirmed the ten factor structure with the corresponding item loadings envisaged for the OCMI. The analysis using Cronbach Co efficient alpha for these samples reiterated the reliability of the dimensions
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TABLE 1
Name of the author Dimensions proposed Lkert (1967) Leadership, Motivational Forces, Communication Processes, Interaction Processes, Decision Making Processes, Goal Setting Processes, Performance Processes, Control Processes, Training Individual Initiative, Risk Tolerance, Direction, Integration, Management Support, Control, Identity, Reward System, Conflict Tolerance, Communication Patterns Clarity Of Direction, Organizational Reach, Integration, Top Management Contact, Encouragement Of Individual Initiative, Conflict Resolution, Performance Clarity, Performance Emphasis, Action Orientation, Compensation, Human Resource Development Attitude Towards Change, Strategic Organization Focus, Performance Standards And Values, Rituals, Concern For People, Reward And Punishments, Openness In Communication, Conflict Resolution, Market And Customer Orientation, Sense Of Pride, Commitment, Team Work Organization Of Work, Communication Flow, Emphasis On People, Decision Making Practices, Influence And Control, Absence Of Bureaucracy, Co-Ordination, Job Challenge, Job Reward, Job Clarity, Supervisory Support, Supervisory Team Building, Supervisory Goal Emphasis, Peer Work Facilitation, Group Functioning, Satisfaction, Goal Integration. Internal, Ambiguity, Tolerant, Context Sensitive, Narcissistic, Future Oriented, Individualistic, Inner Directed, Universal, Role Bound, Androgynous, Power Parity, Expressive, Conserving, Assertive Support, Structure, Conflict Tolerance, Performance Reward, Individual Responsibility, Risk Tolerance, Individual Autonomy, Beliefs, Group Norms, Exercise Of Authority And Identity. Humanistic/Helpful, Affiliation, Achievement, Self-Actualization, Approval, Conventionality, Dependence, Avoidance, Oppositional, Power, Competitive, Perfectionism Work Should Be Fun, Being The Best, Innovation, Attention To Detail, Worth And Value Of People, Quality, Communicating To Get The Job Done, Growth/Profit/Other Indicators Of Success, HandsOn Management, Importance Of A Shared Philosophy
Robbins (1990)
Gordon ( 1988)
Bettinger (1989)
Dension (1990)
Pareek (1996)
Parida, Mathur Khurana(1990) Cooke, Lafferty (1989)
Kilan , Saxton (1983) Task Support, Task Innovation, Social Relations, Personal Freedom Sashkin (1984)
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TABLE 2
Rotated item-factor loadings with Eigenvalues and total variance for OCMI
Item No. 1 9 14 24 30 2 13 18 33 44 15 19 26 34 11 22 38 6 7 32 42 4 12 20 28 35 40 46 16 23 29 39 5 21 25 36 41 3 10 17 27 37 45 8 31 43
Eigen Value % of ariance
Factor 0.20 0.25 0.20 0.20 0.19 0.17 0.03 0.26 0.26 0.16 0.10 0.10 0.04 0.06 0.17 0.17 0.24 0.14 0.11 0.17 0.28 0.79 0.70 0.65 0.71 0.60 0.53 0.64 0.25 0.26 0.05 0.20 0.13 0.25 0.37 0.12 0.03 0.19 0.05 0.33 0.19 0.33 0.08 0.14 0.32 0.11 16.19 35.19 35.12
Factor -0.08 0.02 0.21 0.31 0.28 0.14 -0.08 0.07 0.16 0.25 0.19 0.19 0.11 0.10 0.15 0.20 0.19 0.21 0.16 0.16 0.25 0.11 0.16 0.07 0.03 0.17 0.41 0.21 0.22 0.24 0.17 0.01 0.15 0.24 0.10 0.11 0.25 0.75 0.69 0.56 0.52 0.53 0.65 0.11 0.15 0.12 2.34 5.08 40.27
Factor 0.12 0.18 0.11 0.13 0.16 0.12 -0.01 0.10 0.17 0.13 0.15 0.22 0.26 0.10 0.31 0.01 0.02 0.22 0.09 0.18 0.25 0.15 0.08 0.07 0.29 -0.03 0.16 0.19 0.11 0.08 0.23 0.08 0.74 0.59 0.67 0.74 0.67 0.22 0.08 0.12 0.11 0.06 0.20 0.20 0.09 0.10 2.25 4.89 45.16
Factor -0.05 -0.02 0.11 0.16 0.22 0.74 0.70 0.59 0.66 0.56 0.05 0.23 0.05 0.12 0.18 -0.03 0.35 0.19 0.01 0.32 0.29 0.13 0.08 0.21 0.13 0.26 0.09 -0.02 0.12 0.15 0.09 0.06 0.14 0.07 0.14 0.02 0.13 0.20 0.03 0.13 -0.04 0.15 0.09 0.13 0.07 -0.03 1.80 3.91 49.06
Factor 0.75 0.68 0.60 0.61 0.62 0.02 -0.01 0.15 0.04 0.16 0.26 0.13 0.00 -0.22 0.11 0.19 0.21 0.13 0.12 0.13 0.22 0.12 0.18 0.21 0.11 0.15 0.17 0.19 0.13 0.14 0.15 0.07 0.02 0.23 0.18 0.19 0.12 0.09 0.05 0.12 0.07 0.14 0.08 0.21 0.00 0.15 1.61 3.50 52.56
Factor 0.20 0.16 0.23 0.15 -0.04 0.17 -0.02 0.21 0.11 0.09 0.76 0.71 0.68 0.68 0.09 0.22 0.12 0.13 0.11 0.30 0.10 0.05 0.06 0.10 -0.02 0.05 0.04 0.20 0.16 0.06 0.09 0.12 0.20 0.21 0.08 0.18 0.22 0.14 0.08 0.32 0.10 0.25 0.09 0.13 0.01 0.10 1.56 3.39 55.95
Factor 0.10 0.03 0.27 0.05 0.22 0.02 0.16 0.21 0.07 -0.01 0.10 -0.06 0.23 0.16 0.11 0.33 0.08 0.11 0.08 0.08 0.04 0.21 0.23 0.05 0.17 0.14 -0.07 0.00 0.72 0.58 0.68 0.65 0.22 0.22 0.10 0.00 0.17 0.11 0.21 0.07 0.09 0.27 0.10 0.21 0.23 0.10 1.33 2.89 58.84
Factor 0.13 0.04 0.20 0.07 0.14 0.24 -0.18 0.26 0.33 0.08 0.07 0.10 0.18 0.08 0.25 0.12 0.16 0.71 0.79 0.49 0.54 0.19 0.10 0.21 0.05 0.02 0.03 0.06 0.07 -0.01 -0.04 0.01 0.17 0.12 0.17 0.07 0.12 0.10 0.18 0.01 0.07 0.20 0.20 0.85 0.02 0.13 1.25 2.72 61.56
Factor -0.01 0.17 0.18 0.13 0.10 0.04 0.00 0.18 0.06 -0.04 0.08 0.11 -0.11 0.31 0.17 0.13 0.17 0.06 0.13 0.04 0.08 0.06 0.05 0.20 -0.03 0.15 0.17 0.25 0.23 0.27 0.13 0.02 0.06 0.05 0.10 0.11 0.24 0.13 0.01 0.08 0.00 0.18 0.26 0.69 0.65 0.72 1.12 2.43 63.99
Factor 0.12 0.10 -0.02 0.28 0.04 0.16 -0.20 0.23 0.11 0.37 0.11 0.22 0.00 0.07 0.60 0.57 0.53 0.19 0.03 0.35 0.14 0.12 0.14 -0.01 0.10 0.15 0.14 0.06 0.14 0.16 -0.04 0.17 0.21 -0.09 -0.06 0.13 0.28 0.21 0.05 0.10 0.40 -0.11 0.08 0.18 0.24 -0.05 1.07 2.33 66.32
Cumm %
120 Vilakshan,
TABLE-3 Cronbachs Co-Efficient Alpha of Reliability for OCMI

Name of the factor/ dimension OCMI unity in diversity creativity- adaptability culture nurturing customer care quality consciousness collaboration open communication code of conduct role clarity Employee concern No. of Items 46 5 5 4 3 4 7 4 5 6 3 Item Nos. as per FQ all 46 items 1,9,14,24,30 2,13,18,33,44 15,19,26,34 11,22,38 6,7,32,42 4,12,20,28,35, 40,46 16,23,29,39 5,21,25,36,41 3,10,17,27, 37,45 8,31,43 5 4 6 10 8 1 7 3 2 9 Factor No. Alpha Value 0.957 0.835 0.796 0.822 0.747 0.838 0.877 0.794 0.869 0.844 0.737
Table 4 Items of OCMI

1. Employees feel that they are held together by an invisible force in this organization The management does not hesitate to change old traditions for its survival and progress Every employee knows the role and responsibilities of every other employee in this organization It is strongly believed here that employees should forget their personal difference and work for achieving organizational goals and targets Elderly employees are highly respected in this organization Employees in this organization perform their work tasks as per laid down procedures and standards Here, employees believe that quality products/services can be produced by implementing Quality standards like ISO 9000/CMM Employees in this organization feel that the management is interested in exploiting them* the employees in this organization have common values and beliefs Employees here are very clear about the work expectations of their bosses In this organization, customer complaints are immediately attended to Here, employees working in one department/group dont like employees in other department/ group* Employees believe that there is always a better way of doing things here
8.
2.
9. 10. 11.
3.
4.
5. 6.
12.
13.
7.
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14. The unity among employees can easily be broken in this organization* 15. New comers are taught how to behave with elders and superiors in this organization 16. Clear communication channels are available to pass information to any level in this organization 17. Employees are often confused about their roles to be played in this organization* 18. Employees who come out with new ideas are encouraged in this organization 19. The employees are aware of dos and donts in this organization 20. Employees here strongly believe that working together is important to achieve goals and targets 21. Strict discipline is in built in this organization and the employees are used to it 22. Everyone in this organization believes that customers are very important 23. Employees feel free to convey their views to any one at any level in this organization 24. Employees in this organization practice secularism (belief that morality, education etc should not be based on religion) 25. If the employees miss from work spot without valid reasons, it is not taken very seriously by their bosses here* 26. The incidents of how some employees suffered by not following widely accepted practices in day to day working- are talked about frequently in this organization 27. Employees know whom they have to approach incase they have problems/
28.
29.
30.
31.
32.
33. 34.
35.
36. 37.
38.
39.
doubts in their day to day working here Here, employees from one department/group are well received in another department/group Employees in this organization get the relevant information pertaining to them without asking for it Employees are loyal and trust each other irrespective of their caste background here Prompt attention is given to employees grievances in this organization This organization doesnt have clear work instructions and standard to perform work* While experimenting with new ideas, if output drops it is not questioned Wide publicity is given among employees by the management regarding its values, beliefs and philosophy While working, the employees who dont co-operate with fellow employees are encouraged here* Opinions given by seniors are valued very much in this organization Employees are having clear understanding about their roles and responsibilities in this organization Employees in this organization are very serious about implementing remedial measures to bring down the number of customer complaints Whenever employees come to hear any rumour here, they try to get clarified before acting on the same
40. An employee can seek help and get the same from anyone in this organization irrespective of department and work group
122 Vilakshan,
41. Employees come to work on time in this organization 42. Employees strongly believe here that it is very important to produce quality work for the survival of the organization 43. Employees believe here that management shows genuine interest in solving their problems 44. Changes are not resisted here if they are good for the organization 45. Job responsibilities are clearly defined for all the jobs in this organization 46. Generally, nobody refuses to work with anybody in this organization = reversed scores 9. 6.
Rites And Rituals Of Corporate Life, Reading, Massachusetts: AddisonWesley Dumont,L (1970), Homo Herarchus: The Caste System And Its Implications, Chicago, Chicago University Press Enz, C (1988), the role of value congruity in intra organisational power, administrative science quarterly, 33, pp.284-304 Glaser, B.G. and Strauss, A (1967), The Discovery Of Grounded Theory: Strategies For Qualitative Research, Chicago: Aldine. Hatch, M. J 1993), The Dynamics Of Organizational Culture, Academy Of Management Review, 18,Pp.657-693
7.
8.
REFERENCES
1. Baba Marietta, (1996), Organizational Culture In: David Levinson And Melvin Ember (Eds) Encyclopedia Of Cultural Anthropology, Vol.3, New York, Henry Holt And Company Chatman, Jennifer A and Karen A Jehn (1994), Assessing The Relationship Between Industry Characteristics And Organizational Culture: How Different Can You Be? Academy Of Management Journal, 37 (3), Pp. 522-553 Cooke R.A and Rousseau, D.M (1988), Behaviral norms and expectations:a quanitiative approach to the assessment of organisational culture, gruoup and organisational studies, 13, pp.245-273 Dayal, (1987), Work Culture In India , Inaugural Address, Patna: Seminar At A.N.S. Institute Of Social Studies Deal, Terrance. E and Kennedy Allan(1982), Corporate Cultures: The
10. Hatch, Mary Jo,(1997), Organization Theory: Modern Symbolic And Postmodern Perspectives, New York: Oxford University Press 11. Hawkins Peter,(1997), Organizational Culture: Sailing Between Evangelism And Complexity, Human Relations, 50(4), Pp. 417-440 12. Hofstede Geert (1980), Cultures Consequences: International Differences In Work Related Values, California: Sage Publications 13. Hofstede, Geert (1998), attitudes, values and organisational culture:disentangling the concepts, organisational studies, 19(3),pp.447-493 14. Hofstede, Neuijen, Ohayv and Sanders (1990), Measuring Organizational Cultures: A Methodological Treatise On Levels Of Analysis, Organization Studies, 14(4), Pp.483-503 15. Hofstede, Neujen, Ohayv and Sanders (1990), measuring organisational cultures: a qualitative and
2.
3.
4.
5.
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quantitative study across twenty cases, administrative science quarterly, 35, pp.286-316 16. Hofstede,Geert(1998), Attitudes, Values and Organizational Culture: Disentangling The Concepts, Organizational Studies, 19(3), Pp. 447493 17. Joynt Pat and Warner Malcolm,(1996), Managing Across Cultures: Issues and Perspectives, London, Thomson Business Press 18. Kakar Sudhir(1971), Authority Pattern And Subordinate Behaviour In Indian Organizations, Administrative Science Quarterly, 16(3), Pp. 298-314 19. Kakar, Sudhir(1978), The Inner Experience: A Psychoanalytic Study Of Childhood And Society In India, New Delhi: Oxford University Press 20. Kline P(1986), A Handbook Of Test Construction, New York: Methuen And Company 21. Koteswara Rao P.K (2002), Organizational culture and Knowledge Management: A study conducted in selected organizations from manufacturing and information technology sectors, Unpublished Ph.D thesis, Dep. Of Management Studies, University of Madras, Chennai. 22. Kothari, C R(1992), Research Methodology: Methods And Techniques, New Delhi, Wiley Eastern Limited 23. Kothari, C.R (1992). Politics in india, New Delhi: Orient Longman 24. Kothari, R(1970), Politics In India, New Delhi, Orient Longman 25. Lkert. M.R(1967), the human organization, New York: McGraw-Hill
26. Martin, Feldman, Sitkin,(1983)
Hatch
and
27. Martin,J (1992), cultures in organizations: three perspectives, New York:Oxford 28. Moore, W.E(1961), The social framework of economic development in : R.Braibanti and J.J Spenglers(Eds), the traditional values and socioeconomic development, Durham:Duke University 29. Nuannally J.C(1978), psychometric theory, New York: Mcgraw-Hill 30. Parida Prataprudra; Mathur, Purnima and Khurana, Amulya (1990), development of theorganisational culture questionnaire, Indian journal of industrial relations, 26(2).Pp 144158 31. Peters, T and Waterman, R 1982) In search of Excellence, New York: Harper &Row. 32. Roland, A(1984), The Self In India And America: In V. Kavolis (Es), Design Of Selfhood, New Jersey, Associated University Press 33. Schein, Edgar H(1983), Organizational Psychology, New Delhi, Prentice Hall Of India Private Ltd 34. Sinha, Jai B.P and and Sinha Durganand(1994), Role of social values in indian organizations, in: Henry S.R.Kao, Durganand sinha and Ng Hong (Eds), effective organizations and social values, pp- 164-173, New Delhi:Sage Publications 35. Sinha,J.B.P(1988), Work Culture In Indian Organisatins, New Delhi: ICSSR 36. Trice H And Beyer J,(1984), Studying Organizational Cultures Through Rites And Ceremonials, Academy Of Management Review, 9, Pp. 653-669
124 Vilakshan,
A Tested Strategy for Voluntary Retirement Scheme (VRS) Implementation

SUVENDU BOSE1
their redundant manpower. Consequently, the retirement schemes offered by the companies in most of the cases become enforced upon the redundant employees. That is why, some of the organization prefer to designate it as Early Retirement Scheme (ERS) or Early Separation Scheme (ESS) rather than VRS. Whatever may be the nomenclature, the biggest drawback of the system can be seen from two angles (a) from the employees point of view, that he is losing his livelihood at a premature date (though sufficiently compensated by one time payment). (b) from the organizations point of view, since sometimes it is difficult to retain good employees. The important and sensitive steps in this regard are developing the scheme, communicating the scheme to the employees, peaceful acceptance, successful implementation and effective fund management. The whole paper is discussing all the key steps to be taken for implementing a VRS based on the hands-on experience of the author of implementing VRS in the Central Bank of a neighboring country of India. The paper is also discussing about some of the VRS offered by different multinational banks and companies, which are worth mentioning in this regard.
1
ABSTRACT
RS has become a key word for the organizations taking initiative for
restructuring their activities to focus on core activities and to reduce its excess manpower. In this process certain activities in the non-core areas are identified for outsourcing and organizations are getting rid of
Assistant Professor, The ICFAI Business School, Plot J-3, Block GP, Sector V, Salt Lake City , Kolkata 700091, Phone 033- 23577124/25, Mobile 09830035040, sbose@ibsindia.org, suvendu_bose@rediffmail.com, sb260168@yahoo.co.in
Vilakshan,
1. INTRODUCTION
Is the Voluntary Retirement Scheme (VRS) really voluntary in real sense to the employees? The answer is no. VRS has become a key word for the organizations taking initiative for restructuring its activities to focus on core functions and to reduce its excess manpower. In this process certain functions in the non-core areas are identified for outsourcing or redundant and organizations are getting rid of their redundant manpower. Therefore, the retirement schemes offered by the companies in most of the cases become enforced upon the redundant employees. That is why, some of the organizations prefer to designate it as Early Retirement Scheme (ERS) or Early Separation Scheme (ESS) rather than VRS. Whatever may be the nomenclature, the biggest drawback of the system can be seen from two angles (a) from the employees point of view, that he is losing his livelihood at a premature date (though sufficiently compensated by one time payment). (b) from the organizations point of view, since sometimes it is difficult to retain good employees. The most important and sensitive steps in this regard are developing the scheme, communicating the scheme to the employees, peaceful acceptance,
successful implementation and effective fund management. In this paper, an outcome of the authors action research on VRS implementation in one of the central bank of Indias neighbouring country has been summarised. Due to contractual agreement the actual name of the organisation which implemented the VRS has been camouflaged and in this paper it will be called as Co. X for further reference.
2. BACKGROUND OF THE STUDY

The major drawbacks of the conventional system of VRS across the globe are lack of employee support, calculation of actual financial implication, which ultimately leads to enormous financial loss (e.g., State Bank of India) and losing of good performers. The critical effort should be to retain the good performers in the organisation; otherwise, VRSs main objective of getting rid of Non-Performing Assets (Human Capital) will be vitiated. Co. X initially developed a Voluntary Retirement Scheme (VRS) for its employees. However, they were not sure about its success. That is why, Co. X hired international management consultants to do the due diligence on their VR Scheme and develop a constructive VRS for the company as well as for developing strategy for its successful implementation.
126 Vilakshan,
Therefore the study was aimed at addressing the following issues and challenges:
!
- Co. Xs Annual Reports - Co.Xs Budget, 2001 - Report of Focus Group on Organisational Structure, January, 2001 - Report of Focus Group on Human Resource Management Final Report, December, 2001 - Report of Focus Group on Management Processes, October, 2001 - Strategic Planning Workshop Report (Steering Committee on Transformation Management), July 2000 - HR Manual, July 1992 as well as Co. Xs guidelines and circulars on Performance evaluation - Establishment Department Manual of Operations, 2000 and Manual of Operations, 1981 - Establishment Policy Paper for Discussion - Applicable Tax Laws - Establishment Policy Paper for Discussion - Recommendations of Bullamula and Perera Committees - Study of the proposed VRS scheme prepared by Co. X - Draft Minutes of Cadre Review Committee, December 2000. This methodology section has been divided into three parts: Part I : Existing Scenario
The VRS must balance employee aspirations with the cost of the plan to Co. X. The cost of the VRS should include both actual cost of the compensation package and the implications of the scheme on the organisation Co. X must make concerted effort to retain top performers.
3. METHODOLOGY FOLLOWED TO UNDERTAKE THE STUDY

For undertaking the study an interactive approach had been employed for having a feel on VRS as well as for data / information collection from primary sources with special focus on:
!
Interviews/Face to Face discussion with Departmental Heads Limited interviews with additional employees Meetings with the Establishment Committee Meetings with the Human Resource (HR) Focus Group.
In addition to the above, the consultants team reviewed a range of data from secondary sources provided by Co. X as listed below:
!
Review of a range of documents, including:
Vilakshan,
Part II Part III
: The Proposed Voluntary Retirement Scheme : Proposed Strategy for VRS Implementation
Ic. Analysis of Employee Data Staff Class

! !
Average age is 47 years Desired number for VRS in this category is 100 (18%) 323 (59%) are aged 46 years and above, and 105 (19%) have reached the optional retirement age (55 years old) Scheme to be aimed at age group 46 years and above.
Part I. Existing Scenario

Ia. Background Co. X is reorganising and restructuring its activities to focus on core functions and in this process certain functions in the Non Core Areas may be outsourced. Restructuring will require new skills. This will result in redundancy of about 800 employees in different categories as under: Staff Class 100 Non Staff Class 400 Minor Employees 300
Non-Staff Class
! !
Average age is 47 years Desired number for VR in this category is 400 (37%) 661 (61%) are in aged 46 and above, and 60 (5%) have reached the optional retirement age Desired target of 400 out of 661 in the age group 46 years and above seems difficult to attain Scheme may have to include next age group of 41 to 45 years in this category to make another 271 employees eligible to seek VR.
As set by the company, the target for the VRS was 50% of the total employees. Ib. Objectives of VRS Developed by the Company To design a VRS Scheme following aspects have been taken into consideration:
!
Minor Employees
! !
Addresses the concerns and aspirations of the employee It is cost effective for Co. X Takes into account the impact of the package on working population Establishing fine balance between employees aspirations and the companys needs
Average age is 43 years Desired number for VRS in this category is 309 (100%) Most minor employee are not eligible for getting pension benefits (Criterion: Age 55 years + 10 years service. For those that are not eligible, a special package may have to be worked out.
! !
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A unique scheme design required covering all Minor employees. Id. Analysis of Data by Age Staff Class
!
- Annual Payments (Bonus + Leave Salary) - 20% - Retirement benefits - 30% b. Average Annual Total Cost to the Company per employee for the different categories is as under - Minor Employees - Rs. 3, 98,534/- Non Staff Class - Rs. 6, 08,060/- Staff Class - Rs. 9, 94,130/c. Annual Total Salary Bill (Cost To Company) for all categories of employees is Rs. 1353 million (for 1953 employees) The salary structure is biased towards future needs of the employees than the current needs
In the age group of 46 years and above, all the employees have put in 20 years of service or more Average service period in this group is 29.6 years and average balance years of service is 7.6 years
All the employees in the Target Group will be eligible for pension if the 55 years age provision for pension rights is revised to 45 years.
Non-Staff Class
!
d.
In the age group of 46 years and above, almost all employees have put in more than 20 years of service Average service period in this group is 24.8 and Average Balance years of service is 10.1 years All the employees in the Target Group will be eligible for pension if the 55 years age provision for pension rights is revised to 45 years.
The Salary and benefits being offered by the Company is quite high but the benefits are not visible to the employees. If. Review of Co. Xs Proposed VR Scheme Main Features of the proposed scheme were as under:
!
Ie. Analysis of Salary Structure a. The components of the Total Cost to the Company (CTC) and the approximate percentage distribution is as under - Basic Salary + Allowances (Monthly Gross) - 50%
!
Pension to all who have completed 10 years service Commencement of pension from 55 years of age in case of employees retiring prior to attaining this age The Company to offer buy back option of pension calculated at the present value of pension payments payable up to the age of 72
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Pension to be calculated at adjusted salary which is the salary that the employee opting for VR would have drawn at the time of his normal retirement age Employees with less than 10 years of service to be offered (lump sum payment of five lakh Rupees or 10% of foregone pay up to age 55 years) + Gratuity payment of 24 months salary + Statutory Gratuity @ half months salary for every year of completed service Employees opting for pension will be eligible for medical benefits after retirement and repayment of house loan can be made up to 70 years of age.
Only pension may not evoke the desired response especially in view of higher target.
Ig. Comments on Co. Xs Proposed VR Scheme

!
Payment of pension to employees having completed 10 years of service meets the aspirations of the employees Linking payment with adjusted salary does not appear to be sound in principle and may lead to future litigation Option of buy back of pension at a predetermined rate of interest may result in future litigation in the event of interest rate fluctuations For employees who have put in less than 10 years of service, lump-sum payment seems to be a good solution
Ih. Voluntary Retirement Schemes Offered by Other Companies ! Hatton National Bank - Offered a pension equal to (Number of years of service + 5 years subject to this sum being maximum 40 years) / 55 X Last Salary Drawn. The scheme did not involve any lump sum payment. ! Grindlays Bank - Offered one and half months salary for each year of service. ! Chartered Bank - Offered 2 months salary for each year of service for those who left the bank voluntarily. ! Steel Corporation - At the time of privatisation, it offered 100 months salary upto maximum of 5 lakh Rupees. ! Bullumula Report - Suggested half month salary for each year of service and one month salary for future service through projected age of retirement. ! B. C. Perera Report - Recommended one month salary for every 12 months of past service and one and half month salary for every12 months balance service. ! Government Scheme - Introduced in 1990, it offered Public Servants the following scheme: Public officer having completed 10 years of pensionable service but
130 Vilakshan,
with less than 20 years service was eligible to receive pension calculated on the basis of 90% of salary that included the commuted pension on retirement and 80% of salary at retirement after 20 years from the date of appointment or attain 55 years age, whichever occurred first. Public officer having completed 20 years of pensionable service but with less than 30 years service was eligible to receive pension calculated on the basis of 90% of salary that included the commuted pension and 80% of last drawn salary at the time of retirement. Public officer having completed 30 years of service was eligible to receive pension calculated on the basis of 90% of salary that included the commuted pension on retirement and 90% of salary as pension, notwithstanding the fact that commuted pension was given.
! !
Changing skill requirements Responding to technological advances that have made certain skills redundant Eliminating opportunities for free riding, and replacing less productive employees with more productive employees
Some of these objectives can be achieved by other methods and not necessarily by VRS alone; for example through retraining and development. VR schemes should meet the needs of the company and the aspirations of the employees. The number of persons to be offered VR has to be provided by the company as a part of business decision of the company. II.b Designing the VR Scheme Normally four types of VR schemes are considered, depending upon the needs of the organisation. They are: Compensation linked to Balance years of service Compensation scheme linked to Past service Combination of the above two schemes Pension Scheme in addition to compensation linked to any of the above variations.
Part II: The Proposed Voluntary Retirement Scheme

II. Voluntary Retirement Scheme Development Processes
IIa. The Purpose of a Voluntary Retirement Scheme (VRS)

! !
Reducing personnel cost Increasing productivity
Vilakshan,
IIc. Issues and Challenges in Designing the VR Scheme

!
- how long the scheme should be left open - possibility of repetitive/iterative offers after reviewing the first response
! !
How to retain good performers and get VRS accepted by poor performers How do we develop a uniform and transparent VR policy for all categories of employees, which would result in a win - win situation for all the parties concerned? How can it ensure that good performers are not lost through the VRS while poor-performers accept the VRS? The decision on the percentage target for VR has to be made business based and a transition plan developed to ensure that the VRS does not affect the smooth functioning of the Company and succession planning.
Buy back of pension option Repayment of Housing Loan/ continuation of Medical benefits after retirement Linkages of lump-sum payment with future years of service How to develop uniform VR policy for all categories of personnel to gain acceptability How to develop a simple and transparent VR policy for win-win situation for all parties concerned Should the pension commence immediately or after attainment of current retirement age For Minor Employees category, only 43% qualify for the pension criterion of over 45 years of age and more than 10 years of service Legal position on Gratuity payment to employees
IId. Key Considerations for Developing VRS

!
Decision on percentage target for VR has to be made business based by Co. X. Accordingly, a transition plan should be prepared by Co. X. in advance and the period of transition should be determined Based on the understanding given by Co. X., that 50% is excess personnel, the points to be considered
IIe. Critical Factors for designing the VR scheme

! !
Buy Back of pension option Time of commencement of pension - immediate or after retirement age Repayment of housing loans/ continuation of medical benefits after retirement
132 Vilakshan,
! ! !
Legal position on gratuity payment Tax liability of VR compensation Compensation - whether lumpsum or pension?
Willingness of Work
Linkages of lumpsum payment with future years of service not rendered
Type II Type III Willingness High Willingness Low Ability High Ability Low Type IV Type I Willingness Low Willingness High Ability High Ability Low Ability to Work
IIf. Consideration of the Employee Concerns Regarding VRS

! ! !
Non-portability of pension Loss of medical benefits after VR Facility of repayment of house loan up to the age of 70 years may be lost Fear of the unknown - job with the Co. A carries a status Alternate occupation after VRS Concern for family needs in the event of some misfortune after VR Fear of inflation
Willingness to work represents sum total of attitudinal qualities that affect performance e.g. cooperation, team work, attitude towards work - positive/ negative, initiative etc. Ability to work represents sum total of job knowledge required that affect performance e.g. academic background, job knowledge commensurate with the level of job etc. B. Priority in accepting requests for VRS and releasing employees should be as given below: Employees in Category I (willingness low, ability low) should be released first Next priority should be accorded to Category II (willingness low, ability high) Category III (willingness high, ability low) should be the next in priority for release Category IV (willingness high, ability high) should be persuaded to stay back. They should be informed that they will have good prospects for career growth in the changed
! !
Part III: Proposed Strategy For VRS Implementation

IIIa. VRS Implementation Steps STEP 1: Plan for release of employees in the Staff and Non Staff Class opting for VRS without jeopardising the smooth functioning of the Company. A. All Head of Departments may be asked to classify the eligible employees in the Staff and Non Staff Class as per the matrix given below:
!
Vilakshan,
working environment, which will focus on performance. Inspite of the best efforts to retain good employees, experience shows that whenever organisations announce a VR scheme, they do lose some good performers. In such a situation, the Company may resort to:
!
STEP 2: Announcement of the scheme A. Separate notice should be drafted for each category of employee, i.e. Staff Class, Non Staff Class and Minor Employees The Notice must contain: Complete details of the scheme Objectives of the scheme such as: - The Company is reorganising and restructuring its activities to focus on the core functions. This will require new skills, outsourcing of functions in the non-core area - To have balanced age profile for mobility, training, development of skills and succession plan for higher level positions - To have an overall reduction in manpower to improve productivity.
!
B.
! !
deciding the date of release that is convenient to the Company not accepting the request for VR in very exceptional cases hire experienced persons from outside in senior positions, in exceptional cases Other things being equal, employees in the higher age group should be released first for the following reasons: Least social problems Least cost of VRS Provide growth opportunities to young upcoming managers Opportunity to bring in new skills Based on the above considerations, the Company must prepare a back up plan for its functions to be carried out smoothly in the scenario of the employees being released on account of VRS. Possible solutions may be redeployment of excess staff from other departments, changing work processes etc.
C.
! ! !
Other administrative details such as duration of the scheme, Management reserving the right not to accept any application for VR for exigencies of work etc. Female employees who have joined the Company prior to November, 1970 are eligible to retire at age 50 years with full retirement benefits i.e. pension equal to 90% of consolidated monthly salary commuted pension The spouse of an employee who takes VR and is eligible for pension
D.
134 Vilakshan,
would receive pension in the event of death of the employee as per rules applicable to normal pensioners C. Where an application for VR is not accepted, reasons for the same should be recorded and signed by the Management. Right to reject an application should be exercised bonafide and should be able to stand scrutiny of the courts of law, if challenged. Employees who are offered VR should not be re-employed by the Company in any capacity including on temporary basis/ on contract/ advisor/ consultant etc. This will not apply to Minor Employees who may form cooperative society/s and offer to provide services on contract basis for running canteen etc. Such cooperative societies should be encouraged and helped. Employees opting for VR, especially Minor Employees, should be helped in finding alternative jobs through the Outplacement Services in the HR Department. Income Tax on VR compensation. The company should show the scheme to appropriate officials in the Inland Revenue Department for their approval in order to claim exemption from Income Tax.
STEP 3: Communication A. The Company must set up an Information Desk for VRS for the time the scheme remains open. The Information Desk must be able to inform the employees of all the benefits and compensation that they will be eligible for, if they opt for VR. In addition, they should also be informed what other legal dues they are eligible for such as PF, ETF, Leave Encashment etc. and their loans/advances that would be recovered while settling their accounts. Blank application forms and other documents required to be filled in by the employee should be kept ready at the Information Desk. The Information Desk must be under an officer who has a fair and impartial image among the employees and with good communication skills. The employees contemplating VR must have confidence in this person so that they can discuss with him/her their concerns and personal problems.
D.
B.
E.
F.
STEP 4: Counseling A. The Company must arrange for Financial Counseling of the employees opting for VR. For this purpose, the Company should invite senior personnel from very reliable banks, finance and insurance
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companies to provide advice and information on investment opportunities available. B. The Company must also arrange for Emotional Counseling of the employees opting for VR. Organizations specializing in such activities may be invited to counsel the employees on alternate occupations after retirement to keep themselves occupied post retirement. The Company may arrange for some training of the employees opting for VR to make them more able to seek alternate employment.
The Company will need to depute personnel for the administration of the scheme. The Company will need personnel for settlement of accounts for the employees opting for voluntary retirement.
Counselor:
!
C.
Outside specialists to advise on financial/ investment planning for the employees opting for voluntary retirement. Specialists for emotional counseling and counseling on alternate vocations of the employees opting for voluntary retirement.
IIIb. Resource Requirement Funds:

!
The Company will need to arrange for funds for payment of lumpsum compensation. The Company will have to transfer lumpsum amount to Pension Fund to discharge pension liabilities arising out of early pension payment (as per Model I). The Company will have to nominate a senior official of the level of Assistant/ Deputy Governor, who will be responsible for smooth implementation of the scheme. He/ she will provide clarification and quick decisions in the implementation of the scheme.
4. CONCLUSION
Considering the importance of VRS for any organization, it has to be given a special emphasis. Voluntary retirement is not only important from the organizational point of view; it has tremendous impact on the employees concerned. After having rigorous organizational study and several rounds of discussions with employees at different levels, it may be possible to develop a sound VR scheme which can bring a win-win situation for both the employers and employees. However, success of any VR scheme is not only depending upon the design of the scheme on paper, rather
Personnel:
!
136 Vilakshan,
the success will be dictated by the effectiveness of its implementation. Therefore, voluntary retirement being a sensitive issue, if the organization wants to implement it, it has to put a lot of emphasis on the development of VRS implementation strategy including fund management.
- Shop and Office Employees Act No 19 of 1954. - Employment of Women, Young Persons and Children Act No 47 of 1956 as amended. - Termination of Employment Special Provisions Act of 1971. - Payment of Gratuity Act of 1983. - Employees Provident Fund Act of 1969. - Employees Trust Fund Act of 1980. - Wages Board Ordinance of 1940. - Trade Union Ordinance of 1935. - Factories Ordinance No. 45 of 1942. - The Maternity Benefits Ordinance No. 32 of 1939. Authors Note: The above opinions are solely of the author, and not of the organization he belongs to.
REFERENCE
!
VR schemes offered by other organizations International best practices in performance evaluation systems through database of an international management consultants Labour policies of the country in which Co. X operates as set forth in legislation including: - Industrial Disputes Act No 43 of 1950 Amended in No. 32 of 1990 & No 46 of 1999.
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Comparative Study of Perception of Cement Buyers With Respect to Different Parameters

in Two Cities of Uttar Pradesh
TOMS VARGHESE1 AND RAJIV.R.K.MASSEY2
the cement type, grade, quantity and the brand to be bought. The cement market has a wide base, segregated into corporate, commercial and domestic buyers. The study was undertaken with the objective of finding out the perception of the cement buyers in two cities, namely Varanasi and Ghaziabad in Uttar Pradesh. The study has provided some interesting data which would be of great help to the cement industry, academicians, scholars and researchers to undertake more indepth studies using the findings from this study as a comparative benchmark and thereby help understand and explore the Cement Sector better.
1
ABSTRACT
ith infrastructure development in India, there is a parallel growth in demand for cement. With cement being an important ingredient of the entire process of development, the perception of the buyers purchasing cement has considerable significance for demand for
Assistant Professor- Marketing, College of Business Studies, Allahabad Agricultural InstituteDeemeed University, Allahabad- 211007 Dean, College of Business Studies, Allahabad Agricultural Institute- Deemeed University, Allahabad- 211007
138 Vilakshan,
1. INTRODUCTION
Individuals act and react on the basis of their perceptions, not necessarily on the basis of objective reality. Thus, to the marketer, consumers perceptions are more important than their knowledge of objective reality. For if one thinks about it, its not what actually is, but what the consumers think, that effects their actions, their buying habits, their leisure habits, and so forth, because individuals make decisions and take actions based on what they perceive to be reality. It is therefore important that marketers understand the whole notion of perception and its related concepts, so that they can readily determine as to what factors influence consumers.
two people may perceive the same thing differently. Geographic variability also plays a very important role in developing a perception in the minds of customers, especially in cement purchasing. As it can be seen that in some geographical areas, people prefer dark colour cement (PPC) whereas in others, people prefer gray colour cement. Reasons for such a perception may vary from experiences of older generation to experts view. Considering these facts, the need was felt to study the Consumer Behavior in cement marketing. An effort has been made through this study to check, whether people from different geographical areas differ in their choice of brand and perception of various parameters of cement like setting time, colour of cement, price, curing and strength. For the study, two cities in Uttar Pradesh namely, Varanasi in eastern U.P. and Ghaziabad in Western U.P have been selected. . Objective of the Study a) To find out whether the grade perceived to be the best is the one purchased. To check and compare the knowledge level of consumers about various parameters of the cement purchased like setting time, colour, price, curing required and comprehensive strength.
2. DYNAMICS OF PERCEPTION
Perception by an individual is developed on the basis of physical stimuli, which he receives from the outside environment. Secondly, based on previous experiences, he may have some predisposition, which would create in his mind expectations, motives and learning. The combination of these two very different kind of inputs produces a very private and very personal picture of the world. As it is believed that each individual is unique, with unique experiences, wants, needs, wishes and expectations, each individuals perception also becomes also unique, as
b)
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3. IMPLICATION OF THE STUDY

Individuals act and react on the basis of their perception. It is very important for the marketers to understand the perception of the customers, so that they can readily determine as to what factors influence consumers. An attempt has been made to study the perception of cement customers in two cities of Uttar Pradesh namely Ghaziabad in Western Uttar Pradesh and Varanasi in Eastern Uttar Pradesh. The reason for selecting these two cities was their natural choice of brand, which differs significantly. In Ghaziabad, a customer usually prefers grey cement or Ordinary Portland Cement (OPC), whereas in Varanasi, they prefer dark cement or Pozzolona Portland cement (PPC). Such kind of preference is unique and cannot be found in any other part of the country. Through this study, an effort has been made to understand the best grade sold in the market and perception of customers in both cities about various parameters of cement namely, setting time, color, price, curing and strength for various grades of cement. This study will help in the following ways:
!
understanding of the market and planning the marketing activities by taking into account such preferences.
RESEARCH METHODOLOGY
For the purpose of the study, two cities namely, Varanasi and Ghaziabad were selected in view of their geographical variability. Varanasi being situated in Eastern Uttar Pradesh and close to eastern India and Ghaziabad situated in Western Uttar Pradesh and close to northern India also provided locational variation. For the two cities, sample sizes were 145 respondents in Ghaziabad and 245 in Varanasi who were selected from the cities on the basis of simple random sampling. The tools used for analysis and interpretation of data were mean and percentages. Both parameters and grades were rated on a 10-point scale.
4. RESULT & DISCUSSION

Cement is one of the important raw materials required for the construction purpose. An effort has been made through this study to determine the relationship between the grade of cement actually purchased and the one perceived as best, and to compare the knowledge level about various parameters of cement like, setting time, colour, price, curing time and
To design indepth study of Consumer Behaviour of Cement customers in other markets also. To study such type of behaviour in other products. To help the companies involved in cement marketing in having a better
140 Vilakshan,
compressive strength of the brand purchased. For easy understanding of perception, cement was categorized on the basis of grades, like 33 grade, 43 grade, 53 grade, PPC (Pozzolona Portland Cement) and blended cement. The parameters of the five grades of cement compared to the characteristics of 43 grade cement as per IS 8112:1989 are shown in Table 1. The first objective was to find out whether the grade actually purchased by the respondents was the one they perceived to be the best (Table 2). The result shows that, in Ghaziabad, all (100%) respondents, who had actually purchased 43 grade cement had also perceived 43 grade Cement as the best grade of cement. But, for respondents who had purchased 53 grade and PPC, 100% of the respondents had the opinion that the 43 grade cement is the best cement. The reason attributed for this by many of the respondents was timely availability of cement (grade as well as brand). Blended cement, inspite of being the largest selling grade in Ghaziabad was preferred by none of the respondents, where 94% of the respondents perceived 43 grade as the best grade and the rest preferred 53 grade cement. Although blended cement is an improved form of PPC, newly introduced by the cement companies, with most of the brands having a compressive strength of 53 mpa (mega
pascal), customers have less awareness of its improved characteristics. In Varanasi, of the respondents who had purchased 43 grade cement, 50% of them had preferred the same grade, whereas, 25% had perceived PPC as the best grade while the rest had no idea about the same. For the respondents, who had purchased 53 grade cement, only 28% preferred the same grade as the best grade, whereas 11% of the respondents each perceived 43 grade and PPC as best and 50% had no idea. 59% of the respondents who had purchased blended cement had no idea about the best grade of cement and it may be noted that the like the respondents of Ghaziabad, they too had low awareness about this improved grade. Overall, when we compare two cities in terms of perception of grades among the consumers, it was found that in Ghaziabad, almost all the consumers (99%) who had purchased different grades of cement had a preference for 43 grade, whereas in Varanasi 55% of the respondents had no idea about the grades. In Varanasi, maximum respondents (19%) perceived 43 grade and PPC as best. It is noteworthy to mention that inspite of their preference for 43 grade cement, the majority of the respondents purchased blended cement because it was being promoted by the cement companies, due to its comparatively cheaper manufacturing
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cost. Respondents also attributed the reason for purchase of blended cement to easily availability of the grade in the retailers counter and their influence. The second objective was to study the knowledge level among consumers about different parameters of cement like setting time, colour, price, curing required and compressive strength. In Ghaziabad City (graph 1) the respondents who had 43 grade had maximum knowledge about the grade purchased; compressive strength (100%), 75% each for curing and price, 50% for colour and 25% in the case of setting time. The other grade for which respondents had correct knowledge about the grade purchased was 53 grade followed by blended cement while the knowledge level of respondents who had purchased PPC was zero in the city. In Varanasi city (graph 2), it was the parameter strength, for which respondents, who had purchased different grades, had correct knowledge 100% for PPC, 76% for 43 grade, 50% for 53 grade cement and 25% for blended cement. In the case of setting time, 50% of respondents for 43 grade and 53 grade and 10% of respondents who had purchased blended cement had correct knowledge about the brand purchased. As regarding price parameter, respondents showed wide range of knowledge for different brands like 94% of respondents who had purchased 43
grade had correct knowledge, only 4% of respondents for blended cement whereas zero for PPC and 53 grades. For setting time, knowledge level ranged from 59% for 43 grade to 10% for blended cement. When, compared for combined knowledge level for different parameters (Table 4), highest knowledge in Ghaziabad was for Price with score of 3.2 on a 10 point scale, whereas lowest knowledge level was for setting time with 1.0 point. In Varanasi, among different grades of cement, compressive strength had scored highest on the scale with 6.3, whereas curing scored as low as 0.4 point. For overall knowledge level in the two cities, it was compressive strength which scored the highest with 4.4 on 10 point scale, whereas, price scored 2.9, curing 2.4 and setting time scored 2.0 on 10 point scale. It was observed that the consumers, who had purchased 43 grade cement, had the highest knowledge about different parameters of the grades purchased (6.8 on 10 point scale) whereas, consumers of the other three grades had very low correct knowledge level about the product (1.7 for 53 grade cement, 1.3 for PPC & 1.2 for blended cement; see Table 5).
5. CONCLUSION
Through the survey, it was found that, both in Ghaziabad and Varanasi,
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majority of the consumers had purchased blended cement, but perceived 43 grade cement as the best grade. The sale of blended cement can be attributed to the marketing push strategy of the various cement companies. To change the perception of the consumers towards blended cement, cement companies should take steps to impart more information on blended cement and its usefulness to the consumers. The knowledge level, when compared with respect to both parameters and grades purchased showed that although parameter of price had the highest rating in Ghaziabad and strength in Varanasi, it was strength which scored the overall highest point of 4.4. When the cement grades were considered, it was the consumers of 43 grade with the highest knowledge level in both Ghaziabad and Varanasi with an overall of 6.8 on 10 point scale. It was found that, although consumers were purchasing different brands, they had very less knowledge about its parameters. This leads us to the conclusion that cement companies should take steps to create awareness about various grades and its usefulness. A new trend is coming in both cement production and marketing in India, through a shift in focus from OPC to PPC based cement. Many of the companies had introduced blended cement, which is an improved form of PPC. Since, the
companies had started to promote blended cement, they should take steps to promote blended cement in the market. In the past, consumers had less knowledge about the technical aspects of the cement, its different grades and its uses, as they believed that, it was too technical for their understanding and they relied on the person who was responsible for construction like builder or mason. But, situation has changed since, today the consumers are more aware of the cement grades and their specifications. But, the apathy is that most of the consumers get this kind of knowledge either from masons, retailers or through their own experience. In addition to this, cement companies had also not taken any step in imparting the knowledge about cement to its consumers mainly due to levy raj and monopolistic situation. But situation has changed, especially, since late nineties with many cement companies introducing brand name for their brands, which were unheard of till early eighties. But still today, cement companies do not target end consumers, but retailers for marketing its product by introducing retailer oriented schemes. Cement companies should take steps to promote the cement and its uses to end consumers also. Like, many companies organize mason meets and architect
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meet, they should also introduce consumer meet, where they can impart correct knowledge not only about different grades of cement and correct usage but also protect them against duplicate brands. According to
researchers view, companies should collectively launch such type of awareness and promotional activities as done for steel alliance, tea, and egg coordination committee.
Table 1:
Grade PPC 33 Gr 43 Gr 53 Gr
Various grades of Cement vis-a-vis 43 Grade Cement

Setting Time Normal Normal Normal Faster Faster Colour Dark Grey Grey Grey Grey Price Less Less Normal More More Curing Strength Less Less Normal High Normal Compressive Strength Less Less Normal High High
Blended Cement
Note (Standard calculated for OPC 43 Grade Cement as per IS: 8112-1989): 1. 2. 3. 4. Setting time calculated as per IS: 8112-1989 Colour of OPC 43 Grade is Grey Current Price of 43 Grade Cement in Ghaziabaad & Varanasi market range from Rs 144-146 Curing required for OPC 43 Grade is 4 times a day, which is treated as Normal
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Table 2:
Grade Purchased 43 Grade No 17 2 4 122 145 4 18 1 222 245 100 47 20 20 91 43 19 15 7 9 0 0 0 0 0 0 42 45 7 2 11 5 28 2 11 0 19 14 2 2 50 0 0 1 25 0 0 0 0 0 100 138 99 7 1 0 0 0 0 0 0 0 0 0 84 115 94 7 6 0 0 0 0 0 0 1 9 1 122 133 3 4 100 0 0 0 0 0 0 0 0 0 0 25 50 100 55 57 1 2 100 0 0 0 0 0 0 0 0 12 17 100 0 0 0 0 0 0 0 0 17 2 4 122 145 4 18 1 222 245 % No % No % No % No % No % 53 Grade PPC Blended No Idea Total Grade Perceived as best
Comparative Chart of Consumers in Ghaziabad & Varanasi Cities with respect to Cement Grade Purchased & Grade Perceived
City
Ghaziabad 43 Grade
53 Grade
PPC
Blended Cement
Varanasi
43 Grade
53 Grade
PPC
Blended Cement
Note: 1.
Above figures are mentioned both in numbers & percentage
2.
Coloured coloumn depicts same grade preffered.
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Table 4:
City
Rating of Different Grades of Cement for Knowledge level on 10 point scale

Parameters of Cement Setting Time Colour 2.7 1.5 2.1 Price 3.2 2.5 2.8 Curing 2.2 0.4 1.3 Strength 2.6 6.3 4.4 1.0 3.0 2.0
Ghaziabad Varanasi
Table 5:
City
Rating of Different Grades of Cement for Knowledge level on 10 point scale

Grades 43 grade 53 grade 1.7 2.0 1.9 PPC 0.0 2.5 1.3 Blended Cement 1.1 1.1 1.2 6.5 7.1 6.8
Ghaziabad Varanasi
Graph 1: Comparing the knowledge level of consumers for various parameters of cement in Ghaziabad city
120
1 00
knowledge Level
100 80 60 40 20 0 Setting Time Colour Price Curing Strength

P aram eters o f C em ent
25 1 8 1 1 4 50 39 31 22 1 1 3 0 2 75 75
43 Grade 53 Grade PPC Blended Cement
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Graph 2: Comparing the knowledge level of consumers for various parameters of cement in Varanasi City
120 Knowledge Level 100 80 60 40 20
0 10 0 59 50 24 25 12 00 4 10 00 5 94 76 50 25 100
0 Setting Time Colour Price Curing Strength

43 Grade 53 Grade PPC Blended Cement
Parameters of Cement
REFERENCE
!
Patricia. B.Seybold Get Inside the Lives of your Consumers, Harvard Business Review (May 2001): 81-89. Chris Janiszewski and Stiju. M.J.Osselar, A Connectionist Model of Brand Quality Association, Journal of Marketing Research, August 2000, pp. 331-51. Carries.M.Heilman, Douglas Bowman, and Gordon.P.wright, The Evolution of Brand Preferences and Choice Behaviors of Consumers New to a Market, Journal of Marketing Research (May 2000) pp. 139-55. Joshua Macht, The New Market Research, Inc., July 1998, pp. 87-94. William.P.Putsis Jr and Narasimhan Srinivasan, Buying or Just Browsing? The Duration of Purchase Deliberation, Journal of Marketing Research, August 1994, pp 393-402.
K.L.Keller, Conceptualizing and Measuring Customer Based Brand Equity, Journal of Marketing 57, January 1993, 1-22. Pegging Buyers by Their Gender, The New York Times, September 13, 1992, F10. Rudy Schrocer, Maslows Hierarchy of Needs as a Framework for Identifying Emotional Triggers, Marketing Review 46(5), February 1991, 26,28. Jagdish.N.Seth, An Investigation of Relationships Among Evaluative Beliefs, Affect, Behavioral Intention & Behaviour, in Consumer Behaviour: Theory and application, Eds. John.V. Farley, John.A.Howard and L.Winston Ring (Boston: Allyn and Bacon, 1974), pp.89-114.
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Design of Web Enabled Manufacturing Management System for Footwear Sector

A CASE STUDY
S. BALASUBRAMANIAN1
ABSTRACT
The manufacturing management system is a closed loop system that integrates and coordinates all the major functions of the business to produce the right products at the right time. Web enabled manufacturing management system is a computer based system for planning, scheduling and controlling the materials, resources and supporting activities needed to meet the Master production schedule. In the system implemented in Web environment, users can inset, access, update, edit and delete the data. KEYWORDS: Master production schedule (MPS), Material Requirements Planning (MRP), Manufacturing Resource Planning (MRP-II), Bill of Material (BOM), Capacity Requirements Planning (CRP), Vendor Requirements Planning (VRP).
1. INTRODUCTION
The major modules of manufacturing management systems are MRP and MRPII. The MRP-II developed in the 1970s from MRP (material requirements planning), has been defined as a
1
computerized information system for integrating all business functions and for planning and controlling of all company resources(Duchessi. P, 1989). Recent empirical research suggests that companies in general are able to
Assistant Professor, Department of Management Studies, Hindustan College of Engineering, Old Mahabalipuram Road, Padur, Kancheepuram 603 103, Tamil Nadu, India, E-mail: s_balasubramanian@rediffmail.com
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implement MRP-II successfully (Andrew D. Brown, 1994). Material requirements planning (MRP) systems help manufacturers determine precisely when and how much material to purchase and process based upon a time-phased analysis of sales orders, production orders, current inventory and forecasts. Many factors characterize todays manufacturing environment such as: increased product variety, intensifying global competition, changing social expectations and rapid advancement of manufacturing technology (Ang et al., 1995; Browne et al., 1996). There are a variety of information systems to support production control such as MRP which has been identified to replace the
traditional reorder point-based information systems. Materials requirements planning (MRP I) and its extension manufacturing resource planning (MRP II), have gained the acceptance from both academics and practitioners as an important factor for improving these manufacturing processes. The production management departments within manufacturing companies are responsible for achieving the successful implementation of such systems, but the implementation of MRP systems is not easy (Ang et al., 1995). The relevant literature reveals that many problems are still occurring with the MRP implementation process (Browne et al., 1996; Plossl, 1995).
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2. THE CASE STUDY

The present case study involves a case of web-based manufacturing using a footwear manufacturing company. The task was to develop manufacturing management software package. The following activities are carried out to develop the software package (Roger Pressman, 2002).
!
spiral model for this system development is shown in figure 1. Figure 1. Spiral SDLC Model The following different kinds of analysis are done for the development of the webenabled system. Content Analysis: The full spectrum of content to be provided by the Web Application is identified, including text, graphics and images, video, and audio data. Data modeling was done to identify and describe each of the data objects. Figure shows the ER model of BOM database. Interaction Analysis: The manner in which the user interacts with the Web Application. Use-cases are developed to provide detailed descriptions of this interaction. Functional Analysis: The usage scenarios (use-cases) are created as part of interaction analysis. Configuration Analysis: The environment and infrastructure in which the Web Application resides are identified.
Requirements definition and analysis Design and Database analysis Database Design and Specification Coding, testing and implementation Validation and refinement
! ! ! !
3. WEB ENABLED APPLICATION DEVELOPMENT

The following sub-modules are developed using ASP, HTML, VBScript, IIS and MSAccess database.
! ! ! !
Demand Management system Master Production Schedule system Bill of Material system Material Requirements Planning system Vendor Requirements Planning system Capacity Requirements Planning system Shop Floor management system
4. MAIN MENU OF MANUFACTURING MANAGEMENT SYSTEM

Figure 2 shows the Main Menu of the manufacturing management system. The following four levels of users are identified in this system.
For this web application development, we used both spiral SDLC and Prototyping model (Jawadekar 2002). The developed
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Login
Main Screen
CRP
BOM
MRP
VRP
MPS
Shop floor management
Help
Figure 2. Main Menu of Manufacturing Management software
! ! !
Full Control (Administrator) Read/Write/Modify All (Manager) Read/Write/Modify Own (Supervisor, Vendor and Customer) Read Only (General Public)
5. SYSTEM ARCHITECTURE OF WEB-ENABLED MANUFACTURING MANAGEMENT SOFTWARE

Figure 3 shows the system architecture of manufacturing management software in web environment. Customer, vendor and employee can access the data from the system through Internet. According to the access level given to the users, they can edit, manipulate and access the information through Internet and Intranet environment.
must be applied to describe information requirement (Carlo Ghezz et al, 1991). Entity-relationship (ER) diagrams use basic graphical symbols to show the relationships between data (James A. OBrien, 1999). Figure 4 illustrates the ER model of BOM database.
CONCLUSIONS
The development of WWW technology based Manufacturing management system provides an efficient and revolutionary tool to help a manufacturing company to change their way of managing and integrating information flows in an enterprise. The system has been developed and implemented in a Chennai based footwear manufacturing company to support their manufacturing activities. The research analysis results are in the Table 1. It indicates dramatic improvement in performance after implementation of the system. Web based manufacturing techniques allow easy access and distribution of
6. ENTITY RELATIONSHIP(ER) MODEL OF BOM DATABASE

The ER approach is based on graphical notation technique, and it focuses on how the concepts of entities and relationships
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C u stom e r In te rn et
V e nd or Firew all Se cu rity Em p loye e
M PS
CRP
M RP
VRP
B ack en d syste m s M R P -II system O p e rations and d ata m anagem e nt system s
Figure 3. System Architecture of manufacturing management software in web environment
production related data among customers and partners over the Internet. Dynamically maintained WebPages allow customers to participate to some degree in the manufacturing processes. After implementation of the system, production cost, lead times and inventory cost are obviously decreased. It enhances communication between customers and manufacturing company. The manufacturing management system integrates Internet technologies throughout production, from plant floor devices to corporate business systems.
REFERENCES
1. Andrew D. Brown,(1994) Implementing MRP-II: Leadership, Rites and Cognitive Change, Logistics Information Management, Vol. 7 No. 2, pp. 6-11 Ang, J., Sum, C. and Chung, W. (1995), Critical success factors in implementing MRP and government assistance: a Singapore context, Information Management, Vol. 29, pp. 63-70. Browne, J., Harhen, J. and Shivnan, J. (1996), Production Management
2.
3.
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Systems: An Integrated Perspective, Addison-Wesley, Harlow, England. 4. Burns, O. and Turnipseed, D. (1991), Critical success factors in manufacturing resource planning implementation, International Journal of Operations Management, Vol. 11, pp. 5-19. Carlo Ghezz, Mehdi Jazayeri and Dino Manadrioci (1991) Fundamentals of Software Engineering - Prentice Hall of India pp380-381 Cooper, R. and Zmud, R. (1989), Information technology implementation research: a technological diffusion approach, Management Science, Vol. 36, pp. 12339. Duchessi P., Schaninger, C.M. and Hobbs, D.R.(1989) Implementing a Manufacturing Planning and Control Information System, California 8.
Management Review, Vol. 31 No. 3, pp. 75-90. Elkhouly, S. (1994), Advanced Concepts of Management, Ain Shams Library, Egypt. James A. OBrien. (1999) Management Information System Tata McGraw-Hill publishing company pp. 362-413
9.
5.
10. Plossl, G. (1995), Orlickys Material Requirements Planning, McGraw-Hill, New York, NY. 11. Roger Pressman (2002) Software Engineering Practitioner Approach - Tata Mc Graw-Hill Publishing pp 100-145. 12. Sum, C., Yang, K., Ang, J. and Quek, S. (1995), An analysis of material requirements planning (MRP) benefits using alternating conditional expectation (ACE), Operations Management, Vol. 13, pp. 35-58.
6.
7.
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Strategic Alliance As a Tool for Improving Indian Corporates Global Competitiveness

R.M. SRIVASTAVA1, DIVYA NIGAM2
ABSTRACT
t has become inevitable in this competitive corporate environment to constantly evolveand upgrade strategies in order to stay ahead of the competition. While this has been constantly practiced globally, Indian corporate world has started to focus on forging strategic alliances in order to beat foreign competition with better quality products, value for money and enhanced productivity. The researchers argue that there is a need for proper planning of these alliances.
Introduction: Corporate organizations the world over, in their bid to cope with increased business complexity, evangelize fairly competitive challenges stemming from recent tectonic changes in macro economic policies of governments across the world. This leads to liberalization and privatization of economic systems and
1 2
economic interdependencies, globalization of markets, free flow of capital and knowledge, interaction among different financial systems of different countries, and proliferation and convergence of technologies. It also leads to fast changing demographies of the workforce, cataclysmic changes in personal, social, familial values of people
Director General, JD Institute of Management & Technology, Varanasi, Former Head & Dean, Faculty of Management Studies, B.H.U., Varanasi Asst.Professor, International College for Girls, Jaipur
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and rapidly moving customers penchants and predictions. It goes on to become globally competitive in terms of cost, quality and services, begins pursing the option of strategic partnering and forging alliances with suitable partners during the past decade or so. Indian Corporates too began jumping on to the bandwagon of alliances in recent years in order to enhance their global competitiveness. Thus, the business world has witnessed flurry of strategic alliances in recent few years sweeping through nearly every industry. More than 5000 joint ventures and many more contractual alliances have been launched worldwide during the past five years. As many as 1656 alliances were formed in India during this period. As a matter of fact, formation of alliances for robust product innovation and development, high quality service, deep market penetration, global infrastructure network and thus creating conditions for value addition, has become novelty for corporate chieftains across the globe. Even large scale failures (seven out of 10 companies) could not deter them from pursuing unswervingly collaborative approach to meeting competitive challenges and achieving ultimate objective of value maximization. Ergo, post 2005 is expected to witness more strategic alliances, co-marketing and codevelopment agreements or even joint
ventures with different patterns of equity participation. The pertinent issue thus emanating from the above is whether strategic alliances can really enhance competitiveness of Indian corporates which stand at 57 out of 84 countries and catapult them to the global marquee. Strategic Alliances representing cooperative arrangements between two or more organizations belonging to the same country or different parts of the world or different ends of supply chain are unique partnering relationships formed to serve a specific objective of minimizing business risk and maximizing corporate value through product innovation and development, market penetration, market development or through diversification. Strategic Alliances, as a matter of fact, are a specific type of partnering arrangements where organizations come together to form a new joint organization for manufacturing, marketing and distribution, design collaboration, technology license and research and development, and range widely in scope from an informal business relationships based on a simple contract such as networks, subcontracting, licensing and franchising to formalized interorganizational relationships such as joint venture agreements as also a fully integrated merger of two companies.
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POTENTIALITY OF STRATEGIC ALLIANCE

Strategic Alliances with their immanent attributes of specificity, complementarily and minimum business risk propelled by synergies can indeed improve financial, technological, operational and organizational efficiencies of partnering organizations and thereby pep up their global competitive position. These alliances have the potentiality to enable the partners to achieve excellence in their operations and become global players by rationalizing their existing operations, melding complementary skills, creating innovative ideas and their exploitation, selecting integrated suppliers and appropriate sharing and allocating risk. Through partnering arrangements, companies can gain access to new technologies, new distribution channels, and penetrate global markets and capitalize on new market opportunities at relatively less cost and risk but with greater speed and lesser risks. A successful alliance pools and preserves each partners distinct expertise, knowledge and other cosmic competitive knowledge and allows them to grow. The best partnerships indeed are, pragmatic enterprises that provide critical resources, competencies and positioning that each partner cannot achieve on its own. Collaborating is, of late, being acknowledged as a logical response to the globalization of markets, increasing
ferocity of competition, the need for turbulent innovation and the growing complexity of technology. As many as 753 Japanese firms entered into joint venture agreements with the U.S. firms in 1990, especially for the purpose of reducing competitive pressures in the market. Recent strategic tie-ups between Maruti and Suzuki, Caltax and IBP, Max and Gist Procades, Tata Telecom and AT&T were intended to gain access to latest product technology. Recent collaborations between HCL and Hewlett-Packard Ltd., Tata-IBM, Ranbaxy Laboratories and Eily Lilly, Parle and Coca Cola, Tata Tea and Tettely of USA, Arvind Mills and Cluet Peadbody of USA, Raffels International and Taj Hotels, Ranbaxy Laboratories and an Israel firm, Teva Ericsson and BPL Telecom, Bayer Group in India and Pfizer India are vignettes of partnering relationships to penetrate domestic as well as global markets and exploit emerging business opportunities. In finance sector too, strategic alliance of Indian Bank known for excellent customer service with HDFC Standard Life Insurance Company Ltd. was formed in 2001 with prime objective of distributing the latters life insurance products.
MANAGING ALLIANCE
STRATEGIC
However, Karnel of strategic alliance success is how dexterously long-term
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partnering relationships are managed. Strategy making in regard to alliance demands sketching of a basic business plan of what the firm aspires to achieve. The management has to identify on the basis of environmental scanning which products, activities or services are suitable for initiation or development, which of existing activities are suitable for this kind of development or where there are good opportunities for initiating new ventures that are suitable for a partnering approach and will meet the firms vision and mission and which markets are capable and suitable for development or penetrations. Further, the management has to ascertain if this new initiative will allow the firm to diversify products, services or markets and is in tandem with the firms existing product-market strategies. While choosing a market, project or product, the management should make dispassionate winnowing of the firms existing strengths and competencies so as to asses their adequacy in capturing new business, developing existing markets or products and ascertaining competencies that will be needed to seize emerging business opportunities, protecting the firm against foray of competitors and fulfilling its aspirations and achieving sustained competitive edge. Another strategic aspect of alliance planning is to identify and choose the
most potent partner. While doing so, due consideration needs to be accorded to the partners expectations, business processes, financial, technological, managerial and marketing strengths, and its behaviour so as to ensure that the partners aspirations are in synchronisation with that of the firm and his business strengths complement and supplement the firms existing competencies leading to synergistic benefits to the alliance venture. Such an analysis will result in evolution of commonly agreed vision, mission, corporate objectives and strategies for the realization of which alliance partners would be striving relentlessly. Alliance among BPL, Birla, AT&T and Tata, for example, have had shared vision of creating mobile giants. Likewise, alliance of ONGC with BPCL, aims at consolidating the formers position as Indias first integrated oil firm both in the domestic and overseas markets. Partnering organizations succeed when they establish clear expectation and articulate measurement process. By addressing joint expectations early and often, partners can minimize surprises down that may bring grisly results. Once the firm finds the suitable partner, it is ineluctable to hammer out meticulously the details of the alliance directly with the partnering organization. The deal should focus on specific venture to be taken, commitment to deploy
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resource and continuing autonomy for all the partners. Alliance becomes reality only when the partnering organizations agree to set up a venture or project. This project provides opportunity to the partners to work together and learn from each other and furnishes basis for measuring performance. There should be an agreement between the partners regarding the resources - financial and physical to be deployed by each partner in the venture. Issues like ownership and management should be settled so as to avoid any possibility of break out of the alliance in future. Specific agreement has also to be made about the continuing independence for the alliance partners. This will maintain and deepen the relations. These details alongwith others should be gingerly discussed and finalized otherwise alliance may soon be found in deep trouble. So as to ensure that the alliance works successfully, the management should evolve suitable structure, develop effective communication system, design appropriate incentives system and secure commitment of the organizational people. So as to effectuate alliance strategies and realize the vision, an agile structure, that meets the needs of the alliance and not the needs of individual partners, needs to be developed. It would be germane to organize self-empowered team comprising of talented persons who are
gravid with skills and experiences and are committed to the job. The team members must have full-time job, a part-time assignment is a recipe for failure. It would also be pertinent to define and communicate required roles and associated responsibilities of employees of the alliance partners. It is imperative to evolve an objective system to communicate the why and what of the alliance to all the functionaries and solicit their support. Developing a measurement framework to generate a realistic progress report is equally useful. Creating performance metrics and communication processes, which can be used to benchmark the alliance, will be significantly meaningful. Alliance success also depends on how the people are motivated to perform their work and how they are inebriated differently. Establishing a set of incentives and penalties tied to alliance activities will help align the organizational thinking. In order to expand the dimensions of collaborative ventures successfully, it is inevitable to empower the managers and other employees engaged in decision-making to review and revise their companies current procedures to make venture specific decisions. However, the staff involved in alliance activities often needs more knowledge and negotiating skills to work effectively with one another.
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Unflinching commitment and support of managers and employees at all levels to the project are the hallmarks of longterm partnering relationships. This needs active involvement of all those expected to manage alliance project. Overarching element of a strong partnership is mutual understanding, trust and respect for each companys organization. This includes executive commitment to one another, trust in each others capabilities and the willingness to work together intimately on multiple fronts. Many alliances have failed because of lack of mutual respect and trust. Alliances between Apple and IBM and HLL and Godrej were doomed from the beginning because the partners entered into the deal surreptiously and suspiciously. Cultural compatibility between the partnering firms is sine qua non for successful relationships. If they hold different perceptions, values and beliefs towards critical issues, alliance is sure to boomerang soon. Numerous promising deals have failed because people ignored underestimated the powerful differences in processes across cultures. This is why, prospering organizations have to encourage a high degree of cultural cohesiveness by focusing on common ground to nurture a spirit of collaborative activity. Above all, transparency is an important ingredient of alliance success. To avoid
and avert chances of paranoia and misunderstandings, the partnering firms have to share all relevant information, involve and inform those who have to make the alliance work at the operation. So as to avoid occurrence of events leading to spat between the alliance partners and the employees getting out of control, comprehensive mechanism pertaining to structures, processes and skills for bridging organizational and interpersonal differences should be devised. Establishing multiple ties at different levels helps in proper communication, integration and control. Finally, constant monitoring by the top executives of the alliance firms of external and internal developments and frequent interactions among themselves will not only provide searing insights into the incipient problems which need to be addressed immediately but also throws lurid light on the adequacy of the current vision, objectives and strategies of the venture in the changed environment. Constituting high powered monitoring team representing senior executives of both the organizations to monitor and review will go a long way in strengthening the performance of the project and the robustness of alliance.
CONCLUSION
To encapsulate, strategic alliances have tremendous potentiality to enhance competitive advantage of the partners
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and pitchfork them on to the global scene by offering them the benefits of product innovation and development, access to latest technology, new distribution channels, and new markets at relatively low cost and low risks but with high speed. However, this is possible only if long-term partnering relationships are planned and managed dexterously and deftly.
2.
R.M.Srivastava, Management Policy and Strategic Management, Himalaya Publishing Housing, 2005, p328. Arthur Bert, Business Standard, Nov.26, 2002. Advantage India- Editorial, express Pharma Pulse, December 11, 2003 Rosabeth Moss Kanter, collaborative Advantage, Harvard Business Review, July-August, 1994, p.98. Bill Robinson, Why Strategic Alliances Dont Work, Forbes, January, 2002. James K.Sebenius, Cross-Border Negotiations, HBR, March 2002, p.76.
3. 4. 5.
REFERENCES
1. James Bamford, David Ernst and David G.Fubini, Launching a World Class Joint Venture, Harvard Business Review, Feb.2004, p.91.
6.
7.
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Book Review
Title: People and Performance Author: Peter F. Drucker Publisher: Elsevier, a division of Reed Elsevier India Pvt. Ltd., Price: Rs. 295 Indian Reprint ISBN 81-8147-385-X Reviewer: SASMIT PATRA
he words of Peter F. Drucker are awaited with great anticipation. This is perhaps one of the reasons that heighten ones expectations about this book People and Performance, which showcases some of the best writings of Peter Drucker. This is a book not only for business executives, managers, professionals and academicians, but also for to the common man, provides a deeper as it insight into the concept of management, managers and organizational performance and holistic. People and Performance has been divided into six parts. Each part is further sub-divided into a few chapters with a distinct flavour. The six parts are: 1. What is Management? 2. What is a Manager? 3. What is a Business? 4. Organizing and Managing for Performance 5. How can managers use the strengths of people? 6. Management in Society and Culture
The first part of the book provides valuable insights into the roots and early history of management. The thrust is on understanding the role of management and the innovations that have been brought about by using live cases of Ford and General Motors. It takes the readers forward into the themes, contemporary problems, challenges and dimensions of management. The second part provides a comprehensive view of the managers. It deliberates on defining a manager, his functions and relevant job description and provides a platform for envisaging the manager with the help of concepts of management by objectives and self-control. It highlights the need for the managers to turn the organization into knowledge-based institutions, striving for excellence through staffing. The depiction of concept, creation, purpose and changing elements of business welcomes the readers into the third part of the book. Peter Drucker takes
Assistant Professor (Management), AAIDU (on leave),Executive Officer (Academic & Administration),Xavier Institute of Management, Bhubaneswar.
162 Vilakshan,
the readers into the realities of business and presents them with the remarkable case of Sears, Roebuck and Company and how this retailing giant with sales in excess of $10 billion dollars has managed its business and taken the business from strength to strength. This wonderfully illustrates the essence of managing a business using managers and management solutions. This part offers solutions to managing capital productivity and public service institutions. The fourth part of this book by Peter Drucker emphasizes the importance of innovation and innovative methods in the institution building process. This part has a tremendous utility for present day management systems as it attempts to provide new models and outlines for todays business. It provides a brief on early models and how the General Motors model is not compatible with radically changing present realities. This section describes the various activities undertaken within the organization, which helps the organization to build and grow, and then describes how they come together in order to keep the organization growing. The modern day organization is able to develop itself primarily on the basis of human resource that it has, and this actually differentiates a world-class organization from a run of the mill organization. This thought is accentuated in the fifth part of the book. In this part, Drucker stresses that despite various areas of insolvency, personnel management continues to help the organization harness its personnel resources and improve productivity. It provides a concise picture of the different dimensions, theories and
practices of the workers and the working environment in the institutions. It provides some guidelines on how an individual can be an effective employee and how the managers can manage the knowledge workers as well as the information systems effectively. The last part of this book deals with the organizations, their activities and their interface with the society at large. While the concept of corporate social responsibility at times seems to dominate the text, Peter F. Drucker keeps the realms of deliberations to the changing leadership paradigms between the organization and the society. It further elaborates the effects of pollution that organizations like Union Carbide have left behind for the society to suffer from. There is a need for monitoring such impacts and the need for proper regulations in order to keep the society and the organizations in harmony with each other. This part also outlines the ethics and limits of social responsibility and differentiates between the myths and realities that exist with respect to multinationals and the developing countries. This book would really help an individual understand the nuances of business, management and organizations. It breaks down complex issues and simplifies them for better understanding. This book can immensely benefit the managers, academicians, students as well as public institutions. In this book, Peter Drucker writes, Management in todays society of organizations is both a liberal art and professional preparation. This book attempts to showcase just that.
Vilakshan,
EXCELLENCE & PERFECTION: XIMB

INTRODUCTION
Xavier Institute of Management, Bhubaneswar was established on the 6th of March, 1987. The Xavier Institute of Management, Bhubaneswar was formed through collaboration between the Government of Orissa and the Orissa Jesuit Society. The State Government of Orissa wanted to establish a premier business management educational institution in the State on the lines of the IIMs. The Government of Orissa approached the XLRI, Jamshedpur for support in this matter. With the help of the XLRI, Jamshedpur, which is run by the Jesuit Society, this institution was established. The Management of the Institute is in the hands of a Board of Governors, consisting of Jesuit Fathers, senior representatives of the Government of India and Orissa State Government, eminent industrialists and educationists. XIMB has established an identity of its own, and a consistent position among the best B-schools in the country. XIMB is known not only for its Post-Graduate Programmes but also for developmental projects. In 2004, XIMB has been ranked 10th best Business School by Business WorldCosmode Survey, placed in the Super League of AIMA- Indian Management survey and ranked 12th in the Outlook survey.
MISSION
The mission of XIMB is to develop professional managers for the corporate and public sectors. We also offer programmes, which develop managerial talent for other socio-economic institutions, which serve the people of India and thereby foster the progress of the nation towards a more prosperous, just and humane society. The target groups of our educational/training programmes extend beyond the organised sector of the economy to NGOs, small enterprises and entrepreneurs. XIMB aims to develop in its students technical, professional and managerial excellence, social and cultural sensitivity, ethical responsibility, and concern for the environment. The training programmes strive to equip the participants with latest techniques, and develop their decision making abilities as well as to instil in them a resolute approach to productivity, excellence, innovation and concern for others. This objective is to enable the students to be successful in
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their career and also keep pace with the changing scenario of the corporate world and its environs.
ACADEMIC PROGRAMMES
Xavier Institute of management, Bhubaneswar, offers four academic programmes. They are: 1. Two-year full-time (residential) programme for Post-Graduate Diploma in Business Management.(PGP) 2. Two-year full-time (residential) programme for Post-Graduate Diploma in Rural Management.(PGPRM) 3. Three-year part-time programme for Post-Graduate Diploma in Business Management, (EX - PGP) 4. Doctoral-Level Fellow Programme in Management. (FPM)
over the country. Each classroom has a state-of-the-art LAN facility with LCD Projectors, Online System Supports and cutting edge technology has been used in constantly upgrading and updating the classroom facilities with respect to the present day requirements. The XIMB Library has an extensive infrastructure which is unmatched in quality and grandeur with many top business schools in India. There are a approximately 30625 Books, 5500 electronic journals and 160 hard copy journals available at the library in XIMB. The type of facilities provided by Xavier Institute of Management, Bhubaneswar to its students is absolutely amazing. Each room in the Hostels has Local Area Network (LAN) connectivity, students personal computer, 24 hours internet access and also access to the electronic library resources.
CAMPUS & FACILITIES

The XIMB campus is very well maintained and is has well laid out gardens, Sports Complex and well-planned flora. It was recently awarded the first prize for the Best Garden by the Flower Society of Orissa. The Classrooms are wellventilated and facilitate constructive teaching-learning processes. The amphitheatres are one of the finest classrooms seen anywhere in India which has been highly praised and admired all
CII-XIMB CENTER OF EXCELLENCE

XIMB has signed an MOU with the Confederation of Indian Industry (CII) to set up the CII-XIMB Center of Excellence. The CII-XIMB Center of Excellence has been set up to strengthen research, training, consultancy and to bring a focus on entrepreneurial development, in the work of both XIMB and CII.
GUIDELINES FOR CONTRIBUTORS

Vilakshan invites original, research-based papers, articles, communications and management cases on topics of current concern in all areas of Management. A general guideline for contributors is listed below. 1. Manuscripts should be of approximately 10,000 words (20 to 40 A-4 size pages, typed in double space). Manuscripts should be submitted in duplicate with the cover page bearing only the title of the paper and authors names, designations, official address, e-mail and phone/fax numbers. 2. Abstracts. Submit an abstract of about 150 words. 3. Tables and Figures : Their location in the text should be indicated as follows: Table-1 about here If the tables & figures are imported into the text from Excel, Powerpoint etc., the original files from those software should also be attached. 4. Endnotes : All notes should be indicated by serial numbers in the text and literature cited should be detailed under reference in alphabetical order of the surnames followed by year of publications at the end of the paper. 5. References : The list should mention only those sources actually cited in the text or notes. Authors name should be the same as in the original source. a) In the text, the references should appear as follows : Dayal (2002) has shown .... or Recent studies (Ramnarayan 2002; Murthy, 2001) indicate ... b) Journal references should be listed as follows : Khandwalla, P N (2001). Creative Restructuring, Vikalpa, 26(4),3-18 c) Books should be referred to as follows : Sugandhi, R K (2002). Business to Business Marketing, New Delhi : New Age International. d) References from Internet should be referred to as follows : Hesterbrink, C., E-Business and ERP : Bringing two paradigms together, October 1999; PricewaterhouseCoopers., www.pwc.com For more than one publication by the same author, list them in chronological order, with the older item first. For more than one publication in one year by the same author, use small (lower case) letters to distinguish them (e.g., 1980a, 1980b). 6. Follow British spellings (Programme, not program). throughout
7. Use of numerals: One to twelve in words, thirteen and above in figures, unless the reference is to percentages (5 percent), distance (5 km), or age (10 years old). Use 1990s and 19th century. 8. No stops after abbreviations (UK, MBA). Use stops after initials (K. S. Singh) 9. Use double quotes throughout. The use of single quotes to be restricted for use within double quotes, e.g., In the words of Szell, the economic question is today.... Quotations in excess of 45 words should be separated from the text with a line space above and below and indented on the left. Quotes should be cited accurately from the original source, should not be edited, and should give the page numbers of the original publication. 10. Capitalisation should be kept to the minimum and should be consistent. 11. An author will receive 10 offprints and a complimentary copy of the issue in which his/her paper appears. 12. Manuscripts which do not conform to these guidelines will not be considered for publication. 13. Manuscripts not considered for publication will not be sent back. Those submitting papers should also certify that the paper has not been published or submitted for publication elsewhere. 14. Manuscripts and all correspondence should be addressed to : Assistant Editor, Vilakshan, Xavier Institute of Management, Xavier Square, Bhubaneswar - 751013, India, Ph.: 91 674 2300007 (20 lines) Extn. 233, Fax: 91 674 2300995, E-mail: vilakshan@ximb.ac.in / sasmit@ximb.ac.in.

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Volume II

Xavier Institute of Management

Subscriptions Vilakshan is published twice a year. Annual subscription : Rs. 150/-

R. Parthasarathy Nivedita Kothiyal

R.M. Srivastava Divya Nigam Sasmit Patra

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Stratified Users and Organisation Preparedness for Information Technology Acquisition:

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Users Capacity Building Models

Suppliers Capacity Building Models

Understand own requirement Evaluate vendors Evaluate own employees

Figure 1: An Acquisition Process Model (Misra et al.,2003)

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User-Led ISD User + IT people-Led ISD Involvemen t of Users

Figure-37: Information System Development Projects

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Table 7: Advantages and Risks of User-led ISD Projects

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EXPLANATION OF THE MODEL

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RESEARCH DESIGN AND SURVEY

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User Involvement (O)

Climate Preparedness (C)

Figure 2 : Attributes & Relationship for User Involvement

Tier-I U, I, T C1, C2, C3 (Exogenous)

Figure 3. Variable and Relationships of the Model

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Table 2. Sample Demography

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Figure 5. Organisation Demography IT Acquisition Status in Responding Organsiations

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Figure 4. Path Analysis for the Proposed Model

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Table 3. Goodness of Fit Statistics

0.95 0.06 >= 0.06 (Hu & Bentler, (1999))

0.95 0.95 0.014 0.038

>= 0.90 (Bentler, (1992))

Value between 0 & 1 (Near to 0) (Joreskog & Sorbom, (1989))

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Hypothesis Proposition Number H1

*0.025, Supported 0.028, 0.020

*0.018, 0.014, 0.015 0.18

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Human Quality Development (HQD) for Corporate Management

Director, Indian Institute of Plantation Management, Bangalore.

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3. Inner Quality Development 4. Character Competence 5. Per Capita Happiness

CONCEPT - I DEVELOPMENT MOTIVATION

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CONCEPT - II PANCHMUKHI VIKAS

CONCEPT - III INNER QUALITY DEVELOPMENT