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Banking Development and Poverty1

CHAPTER 1: INTRODUCTION

1.1. Overview

Poverty in Pakistan has almost always been a major macroeconomic issue and it has

attracted many scholars for their researches. In the recent years, there is a substantial body of

relationship between financial development and poverty reduction is established. nd the

literature found is !uite conclusive for poverty reduction in improving the banking sector. "ome

former studies have given a certain threshold to this argument of economic development, while

others have studied the dynamics of poverty reduction. #o study the banking sector development

for poverty reduction, a huge amount of data is used like cross$section data analysis %&u

'o()dhiambo, *+11, p.1+-.

ccording to ddin et al., *+1, p./+0-, the influence of improvement in finance sector

has ambiguous and uncertain results on poverty reduction in developing countries %Pradhan,

*+1+, p.11/-. hile comparing poverty reduction with growth model, poverty reduction has

more leverage and significance in economic growth. #he standpoint that economic progress can

lead to poverty reduction is not necessary. It implies that the economic growth result in

improving poor lives !uality, but it does not.

1.2. Problem Statement

lthough there have been an e2tensive researches, studies and models that discussed the

impact of banking sector development on poverty reduction, but the results were not certain.

'owever, the topic needs modifications. #he banking sector has been playing a vital role in

encouraging the economic growth which in turn leads to poverty reduction in Pakistan. Poverty



Banking Development and Poverty*

in Pakistan is one of the most researched areas after education and health. #here are theories and

models to study the impact of baking sector development on Poverty reduction. In late 3+4s the

reforms of financial sector initiated which eventually developed a feasible and satisfactory

environment for poor and middle class had options in getting credits %&u$'o()dhiambo, *+11,

p.1+5-.

1.3. Background of the Research

hile e2amining the banking sector development, it is essential to understand the phases

of financial sector development. s financial sector development is an effective tool for economy

growth of a country. 6any studies have provided that a well$functioning financial system that

allocates resources mobili7es savings and calculates risk management is a contribution to

economic progression. In addition to economic growth, the financial services are more in

demand for the financial advancement. "ome suggests an indirect bi$directional formal

relationship between economic growth and banking sector development. )n the contrary, it is not

argued to that the financial development would have an impact on poverty reduction

%Inoune('amori, *+1+, p.1-.

Poverty reduction, on the contrary, has been the subject of many researchers4 area of

study. In Pakistan it has been a foremost and a major issue, as Pakistan is also included in the list

third world countries. It has been a serious problem as it affects the global economy as well.

8overnment of Pakistan has taken some robust initiatives to struggle with poverty and the

officials are concerned about the poverty reduction in Pakistan %"hafi! et al., *+1*, p.00-. "ome

researchers have studied the impact of financial development on poverty reduction by applying



Banking Development and Poverty

the autoregressive lag model %9D:- for a longer period to control the variables like agricultural

growth, inflation and manufacturing %Inoue ('amori, *+1*; <llahi, *+11; ddin et al., *+1-.

1.3.1. Significance of the Research

#his research is significant is e2amining the financial deepening for poverty reduction.

#here is an interrelation between banking sector development and poverty reduction that can by

analy7ed. )ther studies have been providing the relationship and impact of financial

development on poverty reduction, while this study specifically signifies the relationship of

banking sector development, which is a biggest component of financial development, with

poverty reduction %=han et al., *+11-. >urthermore, there is a significant effect of income

ine!uality on the poverty rate which is verified. 'ere, this research e2amines the relationship

between the banking sector development and poverty reduction. 8rowth is directly dependent on

the financial sector development and poverty depends on growth, here we check the direct

relationship of banking sector development with poverty reduction. >or Banking sector, different

components are applied as variables, deposits money banks assets to 8DP, central bank assets to

8DP, bank deposits and concentration %=han et al., *+11-. #o reduce poverty, it is important to

improve banking sector development and increase financial development in Pakistan which

directly leads to economic growth. >inancial sector contain the institutions in economy, retail,

formal and informal outlets, and wholesales that offer financial institutes %=han et al., *+11,

p.53-.



Banking Development and Poverty/

1.3.2. Objective of the Research

• #o study the relationship of financial development on economic growth

• #o study the significance of banking sector development on financial development

• #o study the relationship of financial development with poverty reduction

• #o study the interrelation of Banking sector development with poverty reduction

1.4. Outline of the Research

?hapter 1 is the conte2tual background of the research led by aims and objectives of the

research, along with problem statement and significance. #his chapter provides general

understanding of the subject, what the research was projected at, what evaluates the need of

research on the issue and how the research can be used as a source in future, etc.

?hapter * is a comprehensive review of the former literature and recent research on the

topic. #he basic themes, models, theories and issues are discussed here coupled with essential

research findings to shed light on what is already known about the issue and what are the

portions to take up future research and investigation. #his chapter also includes the conceptual

framework for the study which strongly emphasi7es its base whereas the hypothesis has also

been created supported by literature review.

?hapter is a research methodology i.e. research philosophy, research design, approach,

sampling techni!ues, type of investigation, data collection and analysis techni!ue, etc. #his

chapter moreover comprises the limitations, hypothesis and variables in the study. #he chapter

broadens the generali7ability of the study by offering a brief review of the research procedure

and by recogni7ing the limitations.




?hapter / is a data analysis including tabular and graphical representation of the data for

simplifying and understanding the research while discussing the results and its e2planations as in

the literature review and hypothesis. @uantitative and !ualitative analysis of the results have

been developed under this chapter to provide the reader with highlights of the research, its

findings and the significance of its findings.

:astly, ?hapter 5 concludes the research with sole findings and provides the

recommendations and suggestions for the research. #his chapter is the core of the complete

research and sums up the main factors of the research.




CHAPTER 2: LITERATURE REVIEW

2.1. ntroduction

#he relationship of Banking sector development and poverty reduction in Pakistan has an

e2tensive and inconclusive empirical and theoretical literature %ddin et al., *+1, p.+5-.

hamada and ?oulibaly %*+11- instigated as how financial development is beneficial for

economic growth volatility. #he impact of increasing the rate of volatility in emerging economies

is reducing the rate of poverty. lthough the augment in economies increases the demand of

financial services but influences the financial growth. >urthermore, a recipient account might

make them reasonable for bank loan and hence it e2pands the credit market si7e %"ami, *+1,

p.5+-. >inancial sector is an essential growth aspect and it plays role in the form of fast payment

services, improved remittance services and many other branches in several fields like business

that dwindle transaction cost and goods between household, hence it can help to promote

economic growth %=han et al., *+11, p.0+-.

2.2. !conomic "rowth

#he increase of per capita gross domestic product %8DP- or other measurements of

aggregate income is referred as economic growth. #o evaluate economic growth, the rate of

change in real 8DP is calculated. <conomic growth is only considered to be the production of

goods and services. <conomic growth is both; positive and negative. Aegative economic growth

is when the economy is shrinking. It is the economic recession or depression %:ewis, *+1, p.*-.

Domestic resources are considered to be the significant component for economic growth

and reduce poverty. #here are no second thoughts on the role that financial development and




banking sector are playing in improvement of economy. ?onse!uently a well$functioning and

influential banking sector is effective on economic growth. ccording to %"hahba7,

f7a("habbir, *+1, p.0+-, Pakistan4s financial sector has changed its dynamics after grasping

the importance of strong banking and effective financial markets. <conomic growth is optimi7ed

by financial development through mobili7ation and investment activities and this positive

relationship amongst financial development and economic growth reduces poverty through

growth improving impact.

s "hahba7(9ehman %*+1- research concludes that economic growth and poverty

reduction are present in Pakistan. #he increase in financial development is because of the high

demand in financial services and it is said to have a demand$side impact. #he utili7ation of

domestic resources is dynamic for economic growth through the financial development. Due to

low economy in Pakistan, Income ine!uality and poverty were elated in the decades of 13C+4s

and 133+4s. hereas; Pakistan is recorded to be have the second highest economic growth rate in

*++5, in "outh sia. ccording to ddin, =yophilavong("ydee %*+1*, p. +0-, financial

development has an indirect impact on the living standards of poor. ccording to orld Bank

%*++/-, the average economic growth Pakistan made was in 13C+4s and 1.* in 133+4s. #he

sluggish growth steadied in the later 133+4s that led to an increase in poverty incident.

2.3. #inancial $evelo%ment

>inancial sector development established because of an important mechanism as that is

beneficial for economic growth. #he financial development has a crucial part to play with in

alleviation of poverty for developing countries like Pakistan %<llahi, *+11-. >inancial

development is associated with the financial instability where poor are not benefitted from the



Banking Development and PovertyC

greater availability of credit. 6any researches have outlined the direct relation of financial

growth with poverty while the indirect relationship with economic growth %Inoue ('amori,

*+1+, p.1-.

>inancial development is a huge and multidimensional concept and consists of a

potentially significant phenomenon for a long$run economic growth. Aumerous studies have

bolstered the interrelationship between financial advancement and poverty e2perimentally and

theoretically %"ami, *+1; "hahba7(9ahman, *+1; <llahi *+11-. #he empirical evidence

received from these studies varying from country to country, includes industry$level analysis,

each country analysis and broad cross$country comparison. It highlights that there is a vital role

that financial development is playing in economic growth. )n the contrary, financial

development is essential and basic re!uirement for economic growth. Due to the implications

that are not accurate, it affects the other factors of socio$economic development in the economy

%Pradhan, *+1+, p.115-. By e2perimenting and evaluating, the financial institutes and e2erting

corporate control can stimulate growth and increase the capital accumulation that would result in

ultimate poverty reduction %=han et al., *+11, p.0+-.

#he financial institutes are basically the organi7ations that are in$charge of investment,

savings, loans, assets, pensions, deposits, salaries etc. In Pakistan, the instances of which are

publicEprivate sector banks, foreign banks, development financial institutes %D>Is-, investment

banks, microfinance banks, speciali7ed banks and Islamic banks %Ibrar, *+1-.

2.4. Banking Sector $evelo%ment

#he banking sector in Pakistan is continually emerging from sliding interest rate reign to

skin spreads while pressuri7ing profits. longside healthy transactions and increased non$




markup revenue has stabili7ed production. #he division4s related pricing compared to ="< is

over$playing the fears of spreads. It has been noticed that the current development that provides

the perfect current interest rate %-.

Pakistan has implemented successful financial reforms with the help of banking sector in

the last decade and the banking sector has gone through some e2perimental and fundamental

changes in three phases. #he first reform was a orld Bank initiative and supported by Banking

"ector djustment :oan %B":-. #he reforms are reported to have attained a complete new

environment for the banking sector.

6ore investment, more production and more production first increase the growth level

then decrease the poverty level; it is indirect impact of banking sector on poverty reduction

%Inuoe('amori, *+1+, p.1-. s Aoman and ddin %*+11- investigated the casual ne2us between

remittances, banking sector development and 8DP in four "outh sian of countries %Pakistan,

India, Bangladesh, and "ri :anka- depending on individual country time series analysis and

studied that the banking sector 8ranger remittances inflow in Pakistan and India.

Banking sector development program is implemented in Pakistan on terms of 5$year

maturity. ccording to orld Bank %*++/-, Pakistan has achieved progress in in banking sector

reform, after its own program launch in 133. #he overall program assessment and its findings

were effective in order to stabili7e the macro economy while providing the essential financial

sector recovery. ccording to Imran ( =halil %*+1*, 50C-, apart from the conventional banking,

microfinance is another network with which the financial sector provide loans for low$level

businesses or to micro organi7ations that end up destroying firms4 growth.



Banking Development and Poverty1+

2.&. Povert' Reduction

Poverty is referred as the capacity to buy the product or services depending on

consumption and income on assets or material possessions. In 133+4s poverty reduction and the

poorest have been the purpose of attraction at international summit according to ?anadian

International Development gency %?ID-. 9eduction of poverty can be determined in order to

provide credit to businesses of financial intermediaries by creating more jobs through industry

growth %Imran ( =halil, *+1*, p.50C-.

Pakistan has been a developing economy considering the poverty trends based on cross$

sectional datasets. Poverty dynamics can be classified as chronic poverty and transitory

%rif(>aroo!, *+11, p.1-. ccording to "hafi! et al. %*+1*-, Poverty has been the biggest of

issues in Pakistan. 'is study is about the relation between poverty alleviation and economic

growth where the time period of 13C to *+1+ was analy7ed. 'is research suggested that there is

a negative impact on poverty but it contributes to poverty reduction in a long$run. #here is a

close relationship between finance and growth and that ne2us is contributing as an emerging

body that analyses the effects of financial development on both; poverty conditions and income

distribution. few researches have e2plored the association between financial growth embedded

in poverty ratio using cross country data and private credit e2ist for more than + developing

countries. #he findings resulted in negative association with the poverty ratio after optimi7ing

the income, inflation rate and the income share of top 1+ %Inoue ('amori, *+1+, p.*-.

2.(. Relationshi% between Banking Sector develo%ment and Povert' Reduction

In the last decade, there are a number of researches that established an indirect ne2us

between financial development and poverty with the help of government intervention.




8overnment intervention in order to advance financial policies especially credit market policies

that are in favor of appropriate on subsidi7ed rates of interest, which implies that financial

liberation, needs to be adjusted. Because of the economic benefits, we can trickle down the to a

lesser income group and eventually reduce poverty %=han et al., *+11, p.0+-.

#he economic literature speciali7ing in the casual ne2us between the poverty reduction

and financial system establishes the belief that most of the researchers are actually worried about

poverty and so and so that they study the impact of financial development on poverty reduction.

#he direct effect is essay to understand and study but the indirect change is not that easy to go

through for instance different channels might be affecting poverty reduction like credit, savings,

income ine!uality and insurance services %Dhrifi, *+1/, p.1-.

#he relationship has been widely researched and discussed as there is a lot of discussion

available about the relationship of financial liberation and economic growth. ccording to the

literature, a robust relationship has been observed. It is also evident due to the financial policies;

countries with open financial policies have the potential to grow faster than that of restricted

financial policies %6unir, ?haudhry(khtar, *+1, p.**-.

2.). Research *'%othesis

• '1F Banking development has direct relation with poverty reduction

• '*F #here is long term e!uilibrium between banking sector development and poverty

reduction in Pakistan.



Banking Development and Poverty1*

CHAPTER 3: METHODOLOGY

3.1. +ethods of $ata ,ollection

In general there are two different types of data collection method i.e. %1- Primary Data

collection and %*- "econdary Data ?ollection. #he primary data collection method is referred as

the collection of first$hand information which has not been collected before by any researcher or

publications. "ome important tools for primary data collection are %a- Interviews, %b- "urveys, %c-

>ocus group and %d- )bservations. )n the other hand, secondary data collection refers to that

information which has already been researched and is known as second hand information. "ome

techni!ues of collecting secondary data collection are through research publications, research

papers, company4s annual reports, economic survey reports and newsletters %8alvao et.al, *+1,

p. +-.

#he current research has adapted secondary data collection method because of the nature

of the study being conducted. #he data will be collected from orld Bank and economic survey

website of Pakistan. #he basic advantage of secondary data is that it allows the researcher in

collecting meaningful information which can be large thus providing authentic and reliable data

for carrying out the analysis.

3.2. Sam%ling -echniue

#ime series is defined as an arrangement of data points, particularly involving successive

measurement developed through different time intervals. #he time series analysis includes

different methods and processes for the purpose of e2amining time series data to get meaningful

statistical data and other attributes of the data. 6oreover, time series forecasting is the utili7ation




of a specific model in order to assume future values that are dependent on previously observed

values. 'owever, regression analysis is usually used to test different theories pertaining to the

fact that present values of independent time series has a direct impact on the present value of a

different time series. #his is not known as time series analysis, as time series aims on comparing

single time series values and multiple dependent time series at various different points%?have7

and Davison, *+1*, p.111-.

3.3. Sam%le Si/e

#he sample collected was from orld Bank and <conomic survey of Pakistan. Data was

collected annually from 13C+$*+1+, thus having + observations in total.

3.4. Statistical -echniue

In a situation where the research variable in long term relation of interest are assumed

stationary, the usual practice is to de$trend the series and then to de$trend the series to a specific

model as autoregressive distributed lag %9D:- or stationary distributed lag. #he regressors may

incorporate lagged values pertaining to dependent variable and lagged and current values of

more than two e2planatory variables. #he 9D: model enables the researcher in measure the

effect due to the change in policy variable %9itchie, *+1, p. 0-.

3.&. Research +odel

#he research model is based on utoregressive Distributed :ag %9D:- or "tationary

Distributed :ag. #he e!uation for 9D: isF



Banking Development and Poverty1/

t

p

i

it iit

p

i

it t t u LDCP LPOV LDCP LPOV trend c LPOV 1

11

1*1111 +∆+∆++++=∆ ∑∑

=

−−

=

−− φ θ π π δ

t

p

iit iit

p

iit t t

u LPOV LDCP LPOV LDCP trend c LDCP *

11

1*11** +∆+∆++++=∆

∑∑ =−−

=−−

φ θ π π δ

here,

∆ G >irst difference operator

:D?PG domestic credit to private sector

:P)HG poverty reduction

*1 ,cc

G constant

*1 ,δ δ

G coefficient on trend term

*1,π π

G coefficient on the lagged level of the dependent and independent variable

iθ

G coefficient on the lagged dependent variable

iφ

Gcoefficient on the lagged independent variable

*1 ,uu

G error term

P G signifies the ma2imum lag length




CHAPTER FOUR: ANALYSIS AND DISCUSSION

4.1. Overview

?hapter four of this study comprises of analysis and findings from secondary data

collected. #he data is collected from orld Bank and economic survey website of Pakistan. #he

researcher has utili7ed meaningful information for the purpose of research. #he study aimed to

understand and evaluate the impact of banking sector development on poverty reduction.

4.2. -ime Series 0nal'sis

>or the purpose of this research data from 13C+$*+1+ was collected annually from orld

Bank and <conomic "urvey of Pakistan. Data was analysed using statistical software <$views

that was used to test various variables. #hese tests were useful in forecasting future values based

on the past data. s research variable in long term relation are stationary, autoregressive

distributed lag %9D:-, model is used after de$trending of variables.

4.3. Out%ut from !views

Aull 'ypothesisF P=P<9 has a unit root<2ogenousF ?onstant:ag :engthF + %utomatic $ based on "I?, ma2lagG5-

t$"tatistic Prob.J

ugmented Dickey$>uller test statistic $+.5/355 +.C05

#est critical valuesF 1 level $.C55 level $*.331CC1+ level $*.055/*

J6ac=innon %1330- one$sided p$values.




ugmented Dickey$>uller #est <!uationDependent HariableF D%P=P<9-6ethodF :east "!uaresDateF +/E1E1/ #imeF 10F+

"ample %adjusted-F 13C *+1+Included observationsF */ after adjustments

Hariable ?oefficient "td. <rror t$"tatistic Prob.

P=P<9%$1- $+.+C+/ +.+10+ $+.5/355 +.53C+? *+.300 *.+1C3 +.0CC +.//5C

9$s!uared +.+1*C/1 6ean dependent var 0.0/310djusted 9$s!uared $+.+*++ ".D. dependent var 1.10C/1".<. of regression 1.//113 kaike info criterion C.05*+*"um s!uared resid 003*.*3/ "chwar7 criterion C.

:og likelihood $1+1.0**/ 'annan$@uinn criter. C.001*/>$statistic +.*C01 Durbin$atson stat *.515/50Prob%>$statistic- +.53C+/

u!! "#pothesis$ 'oF G +ϴ

%I.e. the needs to be different to make it stationary-

%!ternative "#pothesis$ '1F K +ϴ

%I.e. the data is stationary and does not need to be differenced-

>rom the results of <$views regression analysis, it can be observed that null is coefficient

on P=P<9 %$1- is negative or appro2imately 7ero, which mean that there is a unit root.

lternative hypothesis is less than 7ero, which means no unit root.




4.4. nter%retation 1

>rom the above table obtained from <$views, represent the results obtained from

augmented Dickey$>uller "tatistics. #o test the hypothesis, level of significance L G +.+5 is

considered. 9esults from ugmented Dickey >uller "tatistics are $+.5/3, which is greater than

critical value $*.331C, at 5 level of significance. #herefore, we cannot reject the presence of

unit root, confirmed by appro2imate p$value for 7 %t- G +.C05. #o reject the null at 1+ ,

pKG+.1+ %test statistic should be less than $*.055-, to reject the null at 5 %test statistic should

be less than$*.331C- pKG+.+5, and to reject the null at 1 ,% test statistic should be less than$

.C- pKG+.+1.

Aull 'ypothesisF D%P=P<9- has a unit root<2ogenousF ?onstant

:ag :engthF + %utomatic $ based on "I?, ma2lagG5-

t$"tatistic Prob.J

ugmented Dickey$>uller test statistic $0.33C0 +.++++

#est critical valuesF 1 level $.5*3/05 level $*.33C+0/1+ level $*.0C5*

J6ac=innon %1330- one$sided p$values.

ugmented Dickey$>uller #est <!uationDependent HariableF D%P=P<9,*-6ethodF :east "!uaresDateF +/E1E1/ #imeF 10F+"ample %adjusted-F 13CC *+1+Included observationsF * after adjustments

Hariable ?oefficient "td. <rror t$"tatistic Prob.



Banking Development and Poverty1C

D%P=P<9%$1-- $1.0*C53 +.*1*30 $0.33C0 +.++++? 3.03/+C3 .C0*00C *.5+30C +.+*+

9$s!uared +.001+*3 6ean dependent var $+./+/djusted 9$s!uared +.0//CC ".D. dependent var *C.13*

".<. of regression 10.3*C kaike info criterion C.50*003"um s!uared resid 53*1.00 "chwar7 criterion C.001/+C:og likelihood $30./++ 'annan$@uinn criter. C.5C5+*>$statistic /+.35*1/ Durbin$atson stat 1.3+310Prob%>$statistic- +.+++++*

u!! "#pothesis$ 'oF G +ϴ

%I.e. the needs to be different to make it stationary-

%!ternative "#pothesis$ '1F K +ϴ

%I.e. the data is stationary and does not need to be differenced-

'ypothesis is tested using the results obtained from <$views regression analysis; it can be

observed that null is coefficient should be 7ero, which means that there is a unit root. lternative

hypothesis is less than 7ero, which means no unit root.

4.&. nter%retation 2

>rom the above table obtained from <$views, represent the results obtained from

augmented Dickey$>uller "tatistics. #o test the hypothesis, level of significance L G +.+5 is

considered. 9esults from ugmented Dickey >uller "tatistics are $0.33, which is lower than

critical value $*.33C+, at 5 level of significance. #herefore, we cannot accept the presence of

unit root, confirmed by appro2imate p$value for 7 %t- G +.+++. #o reject the null at 1+ ,




pKG+.1+ %test statistic should be less than $*.0C-, to reject the null at 5 %test statistic should

be less than$*.33C+- pKG+.+5, and to reject the null at 1 ,% test statistic should be less than$

.5*3- pKG+.+1.

Hector utoregression <stimates DateF +/E1E1/ #imeF 10F1 "ample %adjusted-F 13CC *+1+ Included observationsF * after adjustments "tandard errors in % - ( t$statistics in M N

P=P<9 P=BA=

P=P<9%$1- +.5C/+* +.+1**0 %+.13C0*- %+.+**+-

M *.3/+/1N M +.5*3*/N

P=P<9%$*- +.+130 $+.++3/3 %+.*+03+- %+.+*/10-M 1.C3**N M$+.3*C0N

P=BA=%$1- 5.+03*C 1.+C++ %1.C511- %+.*1/1-M *.//5N M /.C//3/N

P=BA=%$*- $*.3C* $+.51*13

%1./C+1- %+.*+/1-M$1.+00N M$*.5110N

? $*/.1+5 1+.//++ %.0CC- %/.03-M$+.0/5+N M *./013CN

9$s!uared +.3*/353 +.0+*53 dj. 9$s!uared +.3+C*C +.5133C "um s!. resids /1*.0*+ 50.3+5 ".<. e!uation 15.**5C 1.C+5

>$statistic 55./0* 0.353*5 :og likelihood $3*.///C5 $/.+5C kaike I? C.//05 /.1C555 "chwar7 "? C.*+11 /./*5/+* 6ean dependent C.3C1 *5.+1505 ".D. dependent 5+.*/+C *.500*

Determinant resid covariance %dof *.0/



Banking Development and Poverty*+

adj.- Determinant resid covariance //C.C++ :og likelihood $15./30C kaike information criterion 1*.0513+ "chwar7 criterion 1.1/553

?onsidering the fact that longer lags were utili7ed in Dickey$>uller regression, likelihood

of vector auto regression having longer lags is higher. #he results obtained from auto regression

estimates, describes that the coefficients on Ost1 and f pt1 in both e!uations are statistically

significant at the 1+ level and that the fit for the fp t e!uation is much better than the fit for the

Ost e!uation. )utput obtained from <$views for auto regression estimates also mentions the

coefficient standard errors and t$statistics, summary also displays 9$s!uared measures for each

e!uation %which are valid because each e!uation estimates are obtained from least s!uare-.



Banking Development and Poverty*1

1. Introduction(300 words)

1.1 Scope of Report

1.2 Overview of Tesco Plc in UK

#he company selected for this task is #esco is the largest food retailers in the world with revenue

in e2cess of Q5/ billion in *++3 and employing over /+,+++ people. #hey operate

appro2imately /,1 stores in 1/ countries around the world. #he company operates primarily in

the ", <urope and sia and their 'ead )ffice is based in 'ertfordshire, =.

6arket "hare of 8rocery "tores in =



Banking Development and Poverty**

%"ourceF "tatista, *+15-.

#he strategies that have been adopted by the company involve introducing the C!ub Cards and

applying customer centric approach for the purpose of attracting and retaining the customers.

1.3 Supermarket industry UK

brief overview of the overall supermarket of =

1.4 Key Requirements

It will define the scope of report through discussing main re!uirements of the below tasks




2. Task A%1+++-

*.1 6arket <nvironment nalysisF

2.1.1 Mic! E"#i!"$%"& 'P!&%(s)

n analysis of the structure of the industry should be undertaken in order to find effective

sources of competitive advantage %Porter, 13C5- i.e. #esco is include threat of substitute products

and services, threat of entry of new competitors, intensity of competitive rivalry, bargaining

power of buyers, bargaining power of suppliers.

2.1.2 Mac! E"#i!"$%"&: 'P%s&*%)

#he macro environment for #esco can be analy7ed with the help of certain ade!uate tools such as

P<"#:< analysis and Porter4s five forces .#he P<"#<: framework below analyses the dynamic and

unpredictable environment in which #esco operates by identifying the forces that have the most impact on

#esco4s performanceF

P!*i&ica*: The politically growth of Tesco’s international business of country.

E"#i!"$%"&a*:Greener Living Schee on environental issues.

S!cia*:!onsuers’ attitude and behavior towards food.

T%c+"!*!,ica*:advance technology "nline retail shopping.

L%,a*:Product packaging ct.

Ec!"!$ica*:#conoic factors ipact directly on the buying behavior of

custoers.

2.2 Critical Success Factors for esco

#hese factors will be determined through the analysis conducted above.



Banking Development and Poverty*/

3. Task -%1+++-

3.1 Internal !nalysis

3.1.1 Identi"cation of !ppropriate ools

It will involve the selection of two or three tools related to 6arketing objectives ( strategy R 8eneric

"trategies, 8rowth strategies, ?ompetitive "trategies, 6arketing mi2 Hision, 6ission ( Halue

Proposition $ Halue chain analysis $ ="> and ?"> analysis, ")#

3.1.2 Internal !nalysis of esco

#he most appropriate tools will be ")#, Halue ?hain nalysis, 8eneric "trategies and the

discussion on the marketing mi2, vision, and mission and value proposition of the company.

SO- 0nal'sis

S&%",&+s:very strong brand name and financially powerful .

W%ak"%ss%s:high dependency on = domestic market.

O!&/"i&i%s:market e2tension and joint venture.

T+%a&s:increasing the number of competitors like "ainsburySs, 6arks ( "pencer and

6orrisons, "D

alue ,hain 0nal'sis

"eneric Strategies

+arketing mi ision +ission 5 alue Pro%osition

3.2 Resources and Capa#ilities !nalysis of esco




0. Task C%++-

4.1 $e"nin% Strate%ic Fit !nalysis

It will involve the theory and definition of strategic fit analysis

0.2 S&a&%,ic Fi& ! T%sc! %on the basis of ")#-

It will be done on the basis of the information collected and evaluation done above.







&. 'iterature Sources($ iportant)

. R%%%"c%s

"tatista.%*+15-. 6arket share of grocery stores in 8reat Britain for the 1* weeks ending 6arch

*3, *+15.M)nlineN. vailable at KhttpFEEwww.statista.comEstatisticsE*33++Egrocery$market$share$

in$the$united$kingdom$ukET Mccessed on 1th Uuly, *+15N.

Task 1

1.1 C!$a" O#%#i%4 The copany selected for this assignent is %icrosoft that is an &erican

ultinational that is engaged in developing' licensing and supporting a range

of software products and services. The !opany also designs and sells

hardware' and delivers online advertising to the custoers.

1.2 Marketing Issue and its Implications

The areting issue that the copany faced was with the launch of its

product cellphone laia window’s phone or Luia&nroid phone oth the

products were two di*erent odels and were aied to target two di*erent



Banking Development and Poverty*C

aret segents. Lie all the other products of the copany' its custoers

were waiting for these products as well very e2citedly

1.3 Market Analysis

1.3.1 STEEPLE Analysis

S!cia*: #echnology is on the boost all around the world and, therefore, all the companies

associated with it.

T%c+"!*!,: #he ?ompany is operating in an industry that is continuously changing and the

company4s success in its industry is also highly depended upon the change

Ec!"!$ic: #he ?ompany is operating worldwide and, therefore, the economic situation all

around the world impacts the company.E&+ica*: :ike all other industries, the technological industry also needs to be ethical. #he ratio of

cyber crime is increasing.

P!*i&ica*: #here are effects of politics on technology companies especially those operating

globally.

L%,a*: #he companies operating in the technology sector along with 6icrosoft had to face legal

issues at a time from the government or the competitors depending upon the situation.

.E"#i!"$%"&a*: Aowadays, the focus of all the companies operating in any industry is on the

environment.

1.3.2 Porter6s #ive #orces

-/%s+%icrosoft has had deals with alost every a,or -! copany (buyers

in this instance) to include a copy of the latest indows version as part of

the cost of a pre/built -!

S/*i%s:%icrosoft by outside suppliers are available fro a large nuber of

rs.




S/5s&i&/&%s:%icrosoft’s gaing division has a oderately high threat of substitute.

N%4 E"&a"&s: They have also been producing these systes long enough to

understand how to inii1e their costs with the coponents they choose'

leaving little chance for cost advantage.

C!$%&i&i!":%icrosoft !orporation’s (%S2T) priary copetitors include soe

of the ost proinent technology copanies in the industry. The list

includes well/nown brands such as &pple (&&-L)' Google (G""G)' S&-' %

(%) and "racle ("4!L)' aong others. ecause %icrosoft is a diversied

corporation that o*ers any types of products and services' the copany

faces sti* copetition in several ey areas of the technology sector.

S() Analysis

S&%",&+:

1. Brand loyalty

*. Brand reputation

. <asy to use software

/. "trong distribution channels

5. 9obust financial performance

0. c!uisition of "kype

W%ak"%ss:

1. Poor ac!uisitions and investments

http://www.investopedia.com/markets/stocks/msft/

http://www.investopedia.com/markets/stocks/aapl

http://www.investopedia.com/markets/stocks/goog

http://www.investopedia.com/markets/stocks/ibm

http://www.investopedia.com/markets/stocks/orcl

http://www.investopedia.com/terms/t/technology_sector.asp

http://www.investopedia.com/markets/stocks/aapl

http://www.investopedia.com/markets/stocks/goog

http://www.investopedia.com/markets/stocks/ibm

http://www.investopedia.com/markets/stocks/orcl

http://www.investopedia.com/terms/t/technology_sector.asp

http://www.investopedia.com/markets/stocks/msft/



Banking Development and Poverty+

*. Dependence on hardware manufacturers

. ?riticism over security flaws

/. 6ature P? markets

5. "low to innovate

O!&/"i&:

1. ?loud based services

*. 6obile advertising

. 6obile device industry

/. 8rowth through ac!uisitions

T+%a&:

5.ntense copetition in software products6.!hanging consuer needs and habits3."pen source pro,ects

7.-otential lawsuits

1.3.4 +c7inse' )s

o

S&a&%,: #he main strategy adopted by the company is regarding product innovation

o S&/c&/%: #he ?ompany follows a flatter structure

o Ss&%$: #here are very well defined systems of the company




o S+a%6 Va*/%s: #he values of the overall organi7ation have been communicated very

well

o S&*%: #he leadership style at pple is in transformational

o S&a: #he employees are hired based on the organi7ational and cultural fit.

o Ski**s: #he employees hired are basedupon the skills

Task 2

SMART O57%c&i#%s




Improving awareness about the companySs products.

#he company needs to improve its market segmentation strategy.

S&a&%,i%s ! C!$a"

installation' aintenance' training' and pro,ect anageent. %icro Strategies8

custoers coe fro elds %icro Strategies doesn8t thin sall when it coes to

optii1ing your technology operations and always has a plan in ind. The copany

provides a variety of inforation technology (T) services such as consulting'

systes integration' networ design' including telecounications' life sciences'

health care' anufacturing' and nancial services. The copany8s roster of

strategic partners includes %' !isco' and %icrosoft. %icro Strategies was founded

in 59:3.

Cas+ F*!4s

#his will be developed according to the strategies adopted and their budget

C+a&% 1: I"&!6/c&i!"

1.1 I"&!6/c&i!"

#he first chapter of the research facilitates researchers by providing fundamental details

regarding the present study. #he chapter introduces the topic and issues on which the study is

based. >or this reason, this chapter is symboli7ed as an introductory chapter which delineate the




significant features which the researcher aspires to undertake while accomplishing the following

research. In the conte2t of the present study the researcher aspires to investigate the perceptions

possessed by parents and communities regarding the importance of <nglish language in primary

and middle schools within the vicinity of >aisalabad, Pakistan. #his particular study will serve as

a base for investigation of school development in >aisalabad, Pakistan because no prior study up

till now has attempted to e2plore the school$based issues. #his particular research will be the first

study that in!uires about the Perception of Parents and ?ommunities about the importance of

<nglish :anguage in Primary and 6iddle schools of >aisalabad, Pakistan. In order to achieve the

schema of the present study, this chapter amalgamates the research objectives, the scope of the

study and other important details which would enable the researcher to develop the fruitful study.

1.2 C!"&%8& ! &+% S&/6

:anguage is considered as one of the important instrument that plays a significant role in the

development of an individual. In the view of 6c?aleb %*+1 pp. +-, the proficiency in terms of

language empowers an individual to establish effective communication. #he clarity within

communication enables an individual to share the thoughts with other people residing within the

certain vicinity. ccording to :eung, Davison and 6ohan %*+1/ pp. /50-, language is correlated

with the culture of the person, along with this language refers to the tool which stimulates the

process of communication that ultimately leads towards the sharing of the ideas and thoughts. In

the view of Ba!uedano$:ope7, le2ander, and 'ernande7 %*+1 pp. 1/3$1C*-, the importance of

learning foreign languages in developing countries has increased with the passage of time; this is

because of the transformation of the world into global village. s mentioned by 6c?aleb %*+1

pp. +-, <nglish is one of such language which is used as a universal language, which is spoken

and understood across the globe. #herefore, it is believed that learning of foreign language is




stimulated with the help of class room support which enables the students to learn a certain

language in the conte2t of its social relationship. In the view of ?hen, 'ua, Vhou, #ao, :ee, :y

and 6ain %*+1/ pp. 1C3-, the emergence of globali7ation has made the multilingual approach of

an individual mandatory, which ultimately leads an individual to become more competitive in the

fiercely competitive business world.

:earning the second language in class rooms allows an individual to communicate with the

fellow students and teachers, this intra$classroom interactions adds a substantial amount of value

in the development of confidence within the students %<vans and ?leghorn, *+1/ pp. +1$13-.

#his means that interactive sessions conducted within the class rooms enable an individual to

incorporate the aspect of proficiency and fluency within the learned language. ccording to

6c?aleb %*+1 pp. +-, the management of the schools and colleges plays a significant role in

the success of such second language learning programs as it is their responsibility to encourage

students to the speak <nglish language in the classrooms.

s mentioned by :eung, Davison and 6ohan %*+1/ pp. /50-, the environment in which an

individual resides also plays a significant role in making children learn a particular language; this

is because facilitative environment motivates an individual to speak second language rather than

the native language. In addition to this, the methods employed by the management of the schools

also plays an important role in making a child learn a particular language other than native

language. s mentioned by Pennycook %*+1/ pp. /5-, the establishment of <nglish medium

culture across the schools enables the management of the primary and middle schools to deploy

healthy working environment. #herefore, it can be analy7ed that unplanned learning is better

than planned learning. s the unplanned learning encompasses the development of certain skills

without any conscious awareness of the learner, this unplanned learning facilitates the learner to




ac!uire certain skill without making an e2tra effort. s mentioned by Ba!uedano$:ope7,

le2ander, and 'ernande7 %*+1 pp. 1/3$1C*-, the development of an individual greatly depends

upon the ability possessed by a person regarding grasping of the particular knowledge. 'owever,

the interest level of the learner works as a stimulator which inclines an individual towards certain

domain or subject.

s mentioned by #ollefson, and #sui %*+1/ pp. 1C3$*1/-, parents and societal beliefs also

influence the academic performance of a child. #his motivation derived from parents adds a

substantial value in the development of confidence within the learner. #he world is transforming

into the highly diversified region, therefore learning the second language has turned out to be one

of the necessities of the present day world. In the view of Pennycook %*+1/ pp. /5-, parent

engagement within child academics allows the children to learn more effectively, as the creation

of facilitative environment at homes provides an additional opportunity for the students in a

conte2t of learning. s stated by <ngestrom %*+1/ pp. 0$30-, the theory of learning represents

the framework which emphasi7es the process through which certain knowledge is absorbed by

an individual. #he behaviourism theory focuses on the learning carried forward by an individual

through observable behaviour. In the view of "imonson and Vvacek %*+1/ pp. 1*-, the

behaviourism approach of learning primarily beliefs that people learn more in a system in which

certain response is e2erted by an individual upon some stimulus. s far as learning of the second

language is concerned the unplanned learning encompasses the behaviouristic approach. )n the

other hand, the cognitive perspective represents that learning ac!uired by an individual refers to

the mental process which entails the involvement of individual perceptions, decision$making

ability along with the !uality of memory. #his theory reflects that the entire process of

communication and learning encompasses the neurological process in which the efficiency of




decoding the encoded message enhances the !uality of learning. In the view of Ba!uedano$

:ope7, le2ander, and 'ernande7 %*+1 pp. 1/3$1C*- the societal learning model represents that

ma2imum knowledge is ac!uired by an individual when learning takes place in small groups.

#he social constructivism approach portrays that an individual is able to grasp ma2imum

knowledge when taught in groups. #herefore, through the analysis of the above$mentioned

discussion it is !uite evident that perception of the parents and the community are significant in

making an individual to learn the second language effectively. In addition to this, the learning

models also represent various schools of thoughts regarding the ac!uisition and utili7ation of

knowledge by an individual. In the conte2t of the present study the utili7ation of the above$

mentioned learning models would enable the researcher to e2tract ma2imum the insights

regarding the perceptions of parents and the society upon the adoption of <nglish language

within the primary and middle schools.

1.3 Ai$ ! &+% R%s%ac+

ccording to 'air Ur, olfinbarger, 6oney, "amouel and Page %*+15 pp. 1*-, the aim of the

research refers to the foundation of the study upon which the entire research is based upon. #he

aim and objectives of provides delineate to the researcher regarding the areas of core

significance. #he aim of the research plays a significant role in the successful development of the

business as it facilitates the researcher to highlight the areas of core importance. In a conte2t of

the present study the researcher aspires to investigate the perceptions of the parents and the

society upon the adoption of the <nglish language within primary and middle schools. #herefore,

the current study aspires to focus upon the importance of adopting <nglish language within the

schooling systems and its impacts upon the progressive development of the student4s careers.

1./ )bjectives of 9esearch




#he objectives of the research enable the researcher to highlight various aspects of the study

which ultimately leads the researcher to accomplish successful completion of the research.

6oreover, the research objectives allow the researcher to develop a well$defined map of the

study which has to be employed by the researcher in order to complete the study successfully. s

far as the present research is concerned the research objectives are mentioned as under,

1. #o study the perspective of parents about the <nglish :anguage skills development of

child

*. #o evaluate the perception of communities about the <nglish :anguage skill development

of child

. #o study the perceptions of parents and communities about the importance of the <nglish

language culture for the primary and middle schools of >aisalabad, Pakistan

1. 9/%s&i!"s ! S&/6

s the present study aspires to articulate the impact of the perceptions possessed by parents and

society upon the adoption of <nglish language within primary and middle schools the !uestions

of the research are mentioned in this section. #he main research !uestion for this dissertation isF

hat is the Perception of Parents and ?ommunities about importance of the <nglish :anguage in

Primary and 6iddle "chools of >aisalabadW

#he au2iliary research !uestions areF

1. hat is the role of parents in <nglish :anguage development of the childW

*. hat is the role of communities in <nglish :anguage development of the childW

.'ow the ne2us of parents and communities can improve the <nglish language culture of the

primary and middle schools of >aisalabad specifically in D 8round, 6otorway ?ity, 6illat town

and AishatabadW




1. Sc!% ! S&/6

#he purpose of this research is to e2plore the perceptions of Parents and ?ommunities about

importance of the<nglish :anguage in Primary and 6iddle schools. #herefore, this research

aspires to articulate the !ualified command over languages which empower children with the

confidence to e2press their feelings and ideas to their parents, teachers, friends and community

members. 'ence, this research will enable the policy makers to formulate such strategies which

empower them to develop a competitive academic system within the vicinity of >aisalabad.

1.; Si,"iica"c% ! &+% S&/6

s the present study aspires to articulate upon the perceptions of parents and the society

regarding the adoption of <nglish language in primary and middle schools, this study is to

facilitate the academic policy makers of Pakistan to formulate such strategies that corresponds

with the cultural values of the people residing within the particular vicinity. In addition to this,

the current study will also contribute in the progressive development of schools in Pakistan as it

enables the management of the schools to implement effective change. )verall, this study would

contribute a substantial value in the progressive development of the s

In order to complete the study and to attain the aims of the research the dissertation comprises of

five chapters, therefore the outline of the present study is mentioned as under;

X C+a&% 1: I"&!6/c&i!"F #he first chapter of the research constitutes of the line of

action adopted by the researcher in order to accomplish the particular study. #his includes the

research objectivesociety as a whole. #herefore, this research will contribute a substantial

amount of value within the field of academics within the vicinity of >aisalabad.




X C+a&% 2: Li&%a&/% R%#i%4F #he second chapter integrates the analysis, assessments

and the inspections of the work carried forward by the prior researchers in the specific field.

X C+a&% 3: M%&+!6!*!,: #he third chapter of the research signifies the procedures and

process employed by the researcher which enables the researcher to satisfy the predefined goals

and objectives.

X C+a&% 0: Da&a A"a*sisF #he chapter of data analysis entails the procedures adopted

by the researcher to analy7e the gathered data. #his chapter enables the researcher to compute

results ac!uired through the collected data.

X C+a&% <: C!"c*/si!"s a"6 R%c!$$%"6a&i!"s: #he final chapter of the research

includes the overall findings of the research. 'owever, this chapter also includes the

recommendations proposed by the researcher in according to the findings accumulated through

data analysis.

1.1= C+a&% S/$$a

#he analysis of the entire chapter reveals that this study aspires to articulate upon the impacts of

the perceptions of the parents and the society regarding the adoption of <nglish language within

primary and middle schools of >aisalabad. >urthermore, this chapter highlights the step by step

approach the employed by the researcher in order to accomplish this study. In addition to this, the

chapter also includes research objectives and !uestions which enables the researcher to develop

an organi7ed study. 'owever, the outline of the entire dissertation is also portrayed in this

chapter which highlights the line of action utili7ed by the researcher for the successful

completion of the study. In addition to this, the chapter also includes the background of the study

which enables the researcher to provide brief theoretical foundations regarding the chosen topic.

ccording to the research outline mentioned above, literature review chapter will be added after



Banking Development and Poverty/+

completing the introduction section of the dissertation. #he ne2t chapter will e2plore the

theoretical and academic relevance of research objectives developed earlier through assessing

them under the light of past studies.

C+a&% 2: Li&%a&/% R%#i%4

2.1 I"&!6/c&i!"

#he literature review is second chapter in the process of a particular dissertation or research

project. #he literature review involves analysis and evaluation of findings related to past research

studies. #herefore, this study has taken into account the concepts and theories that have included

in past studies to understand the between variable of study. #he concept of parent involvement

has been thoroughly discussed in this literature review. >urthermore, there are different types of

parental perceptions regarding <nglish language education that have been covered in this

chapter. It has been e2amined during process of literature review that community makes a major

contribution in childrenSs efforts to learn <nglish language. dditionally, this literature review

has highlighted the importance of <nglish language in primary and middle schools. 6oreover, it

has covered the significance to learn <nglish language. >inally the perceptions and views of

parents and communities have been evaluated to ac!uire <nglish language skills by children.

2.1 Pa%"&a* I"#!*#%$%"&



Banking Development and Poverty/1

s described by 'afi7, #ehsin, 6alik, 6uhammad and 6uhammad %*+1 pp. *+3$**-, the

involvement of parents varies on the basis of culture of a particular society. It has been said that

the parental involvement fall into different categories that has major impact on performance and

development of their children. #he e2pectations of parents from their children influence

performance of their children. #he parental involvement involves a variety of activities such as to

support children in reading and writing. >urthermore, it includes motivating and encouraging

children to achieve their academic tasks without any dependency on others. #he parents monitor

and supervise various activities of their children that includes in$house and outhouse tasks. #he

parents teach their children to enhance their knowledge and skills on a wide range of subjects.

s stated by Ueynes %*++ pp. C*$11+- the perception of parents regarding child education has

become an indispensible part in learning and development of child. It is e2amined in a research

study that positive relationship e2ists between the involvement of parents and childrenSs

educational success. #he relationship is found to possess highly strong during the years of

secondary school. It is evaluated in another research that parental involvement and childrenSs

performance is inconsistent with each other. Parents4 perception is effective in creating an

environment for children at home as well as at school. #he parental involvement is highly

associated to children achievement in terms of learning language. #he involvement of parents

can be classified into different major categories; these are parent4s responsibilities in home

activities, parent4s responsibilities in academic tasks either direct or indirect.

s described by Driessen, "mit, and "leegers %*++5 pp. 5+3$5*-; 6elhuish, Phan, "ylva,

"ammons, "iraj;Blatchford and #aggart, %*++C pp. 35$11/-, the involvement of parents has a

major role in the tasks of children in school. #herefore parents engage in the communication

with teachers to analy7e performance of their children. >urthermore, they evaluate attendance of



Banking Development and Poverty/*

regulatory of children in a school. #he parents check academic reports of their children and

e2amine reason behind their good and bad performance. #here are parents who are worried about

e2tracurricular activities of their children. ccording to the view of parents, e2tracurricular

activities play a major role in the learning of their children. #he parents have become highly

active related to the performance of their children due to the high competition in schools.

2.2 T+%!i%s ! Pa%"&a* I"#!*#%$%"&

s described by 8reen, alker, 'oover$Dempsey and "andler %*++ pp. 5*-, the <pstein4s

theory of framework has described the involvement of parents in different areas. #he framework

is beneficial in understanding and developing a relationship between parents and schools. #he

parent involvement is divided into different categories that include parenting, volunteering,

communicating, 'ome learning, decision making, and community collaboration.

2.2.1 Pa%"&i",

s ascertained by 'ill and #yson %*++3 pp. /+-, the concept of parenting suggests creating a co$

operation between parents and schools. It helps parents to gather information related to their

children in terms of their academic means. >urthermore, teachers also need to understand and

analy7e the different aspects of children in terms of family life. #he administration and teachers

has to ensure that parents get appropriate and accurate information with respect to their children

academic performance. 'ence it leads towards the development of good behavior in children. It

helps to enhance confidence of children in a particular school. #he co$operation between parents

and schools increase awareness and enables children to meet challenges. dditionally, the

development in the perception of parents facilitates in integrating innovative learning programs

that later e2pands the effectiveness of students4 performance.

2.2.2 C!$$/"ica&i",




ccording to 8riffin and "teen %*+1+ pp. *1C$**0-, there are schools that have developed the

practice to arrange meetings and engage in e2tensive communication to parents with respect to

children educational development. #he communication helps to resolve problems that create

hurdles in performance of children. #he communication involves activities such as parents$

teachers meeting, school conferences etc. #herefore parents get to know the weaknesses of

children that need to be focused to improve. #he communication channels being used by the

schools should be improved as the e2isting era is known to be of advancements. 6ost of the

schools these days, focus on updating parents regarding child4s progress through electronic

channels.

2.2.3 V!*/"&%%i",

s stated by <pstein and "anders %*++0 pp. C1$1*+-, the relation with families can be strong by

providing options or chances to parents to participate as volunteer in the events and activities of

school. Parents, who participate in school events becomes highly comfortable in communication

with children. #he volunteer activities are more encouraged in primary schools as compared to

secondary schools. #he volunteering has major contribution in the development of skills among

children. Parents are likely to appreciate efforts of children and teachers in volunteering type.

dditionally, teachers get able to identify children weakness and provide attention to get over

those hurdles. #his monitoring practice contributes for the child4s progress and performance. #he

teachers are able to e2plore the practices that will help in reducing child4s weaknesses. It is

essential for the schools to promote the volunteering practice among children because it will

benefit in increasing the students effectiveness and performance which motivate them to e2cel in

academics and education.

2.2.0 H!$% L%a"i",



Banking Development and Poverty//

#he parent4s involvements in the educational development of children highly occur at home. #he

teachers need to identify about the learning of children that takes place at home strives to

capitali7e upon it. #he teachers are re!uired to enhance understanding of parents in terms of c

their children academic curriculum. >urthermore, teachers need to aware children with respect to

practices and systems that are followed in children. #his type of parent4s involvement enables to

reduce gap that e2ist between schools and families due to the different cultures. #herefore, it is

necessary that teachers provide detail to parents related to learning process and activities in

schools that help parents to positively contribute in educational growth of their children.

6oreover, the learning errands proposed for the students should be reviewed at home as well

since it helps in smoothing children4s concept regarding the tasks. >or this concern, parent4s

perception re!uires to be increased as they are responsible for their children4s learning interest

and performance.

2.2.< D%cisi!" Maki",

s e2plained by Domina %*++5 pp. $*/3-, the parents take major decision with respect to the

activities and education of children. #he decisions are aim to enhance skills and performance of

their children. #he benefits from this type of parental involvement are increased awareness in

families. >urthermore, it develops ownership and connection feelings between parents and

teachers. In addition, the perception of parents is also essential because they are the decision

makers of student4s educations. It is their responsibility to shape the educational strategies for

their children. #he selection of an appropriate school helps in reducing the parental stress

regarding the decision making process of their child4s progress.

2.2. C!$$/"i& C!**a5!a&i!"




ccording to <pstein %*++5 pp. 151$1+-, teachers and parents put efforts to organi7e resources

that are supportive in the education of children. #he co$operation among parents, teachers and

society has a major positive contribution in development and learning of children. #here are high

learning opportunities for children by maintaining collaboration among community, families and

schools. #he children increase their interaction with communication that enhances their social

skills.

2.3 E6/ca&i!" a"6 I&s I$!&a"c%

s described by bdal, =han, 7har, "hah7ad and mir %*+1 pp. 05-; 6emon %*++ pp. /$55-

education is considered as one of the activities to interact and sociali7e with society. It is

e2amined as one of the obligation of families in a particular society. <ducation contributes in the

!uality and growth of a specific economy and makes a positive contribution in the achievement

and career development of an individual person. It has been reali7ed that success of an economy

is related to the level of education of society. #he investment in education sector of Pakistan is

very adversely affects educational development of children. #he education is one of factors that

are included in millennium development goals. #he basic level of education in Pakistan is very

low that is not considered as good for a particular society.

s ascertained by =halid and =han %*++0 pp. +5$**-; =a7mi and @uran %*++5 pp. 3+$1+-,

there are various factors that affect the development and growth of children education in

provinces of Pakistan. #he dropout or failure rate of children in the province of Baluchistan is

high because parents are not educated. >urthermore, there are inade!uate facilities for children

in schools in the province of Baluchistan. 6oreover, there is no training that has been provided

to teachers in terms of providing education to children. #he traditions, values and customs of

community creates hurdle in education of children and the income of their children, therefore




they cannot facilitate education. #he developing countries such as Pakistan, India, etc are

re!uired to efficiently utili7e resources that help to provide education in primary and secondary

schools. A<"?) has emphasi7ed the importance of education in the development of children.

2.0 I$!&a"c% ! E",*is+ La",/a,%

ccording to li, hmad, 6an7oor and Aaseer %*+1/ pp. *1$-, <nglish language has become

necessary since the inception of <nglish imperialism. #he <nglish language is officially spoken

in merica, ustralia, Indian sub$continent etc. #he <nglish language has become a common

platform of communication in the world. #here are some countries that do not adopt <nglish

language and are stick to their native language. #he perception of <nglish language significance

varies from country to country. #he <nglish language is identified and spoken in every corner of

the world that provides convenience to individuals during travelling in different countries

%?oleman, *+11 pp. 3$*1; Aorton, *++0 pp. **$-. #he trade agreements, newspaper, journal

articles are published in <nglish language in various countries.

ccording to 'ashwani %*++C pp. *+$*/-; ?ummins, Bismilla, ?how, ?ohen, 8iampapa, :eoni

and "astri %*++5 pp. C-; Aorton %*++0 pp. **$-, the <nglish language is commonly used in

different and industries over the world. #he <nglish language helps an individual to stand and

compete in a society. <nglish has become the international language for communication with

individuals and business. #he <nglish language has enabled a person to share and communicate

their ideas and opinions with others in a society. #he <nglish has become the compulsory subject

in higher education of Pakistan. #herefore, <nglish language in necessary is primary as well as

secondary schools. It is identified in a research that opinions of parents, teachers and

communities are important with respect to the learning of <nglish language in primary and

secondary schools.




2.< Pa%"&s P%c%&i!" R%,a6i", E",*is+ L%a"i", ! C+i*6

ccording to 9owe, )7caaliYkan and 8oldin$6eadow %*++C pp. 1C*$133-, the parents

accelerates the learning and development of <nglish language of a child. If the parents are well

educated then it helps their children to learn and adopt <nglish language easily. In contrast to

this, if parents have low educational background then they cannot support their language in

education and <nglish language learning. #he literate parents need to identify level of learning of

their children. #herefore, it helps them to incorporate the skills of <nglish language in their

children. #he parents with low educational level can hand over this responsibility to teachers

and mentors to help their children in learning of <nglish language. #he parents need to

encourage their children to learn <nglish language as it positively contributes in educational

development. #he parents need to motivate their children with respect to the learning of <nglish

language %?si7er and =ormos, *++3 pp. 3C$113-. >urthermore, parents need to aware with

respect to the performance of their children. It help parent to assess abilities of children with

respect to the learning of a particular skill.

s stated by ugust, ?arlo, Dressler and "now %*++5 pp. 5+$5-, parents have to spend ample

time with children to ade!uately guide them in learning <nglish language. #he parents that

provide positive feedback to children in learning lead towards building confidence in them. #he

parents have to keep realistic e2pectation from their children to enhance their language skills.

#he parents need to emphasi7e or appreciate the efforts of their children that positively affect

perception of children to learn <nglish language. #he parents need to put efforts to enhance

vocabulary of children and helps them to understand its uses in different conte2ts. #he

development of good interpersonal relations between parents and children positively helps to

learn <nglish language. #he parents make proper planning that consist of different to enable a



Banking Development and Poverty/C

child to learn <nglish language over time %Proctor, ?arlo, ugust and "now, *++5 pp. */0-. #he

opportunities need to be given to children by parents to learn <nglish language independently as

well.

2. P%c%&i!" ! C!$$/"i&i%s i" E",*is+ L%a"i", ! C+i*6

s e2plained by Uanagarajah %*++ pp. 3*$33-, the community is defined as boundaries where

child and individual grow up; therefore it affects their learning process. #he language that is used

in a particular community affects the process of <nglish language learning of a child. #he

communities consist of the relatives, friends, and other members of a society that has consistent

interaction with children. If <nglish language in fre!uently used in particular society then if

affects development of a child. <very individual and child has a need to be associated with other

members; therefore they adopt rules and practice that is followed in a particular society.

#herefore, if <nglish language is commonly used by members of community then it encourages

children to learn a particular language. #he community is effective in enhancing motivational

level of students. If community discourages children efforts to learn <nglish language then, they

will not be able to get proficiency in it. #he community provides opportunities to children of real

world to learn any language or skills. #he community helps to provide necessary tools to

children to be easily to easily learn an <nglish language %8eva and &aghoubVadeh, *++0 pp. 1$

5-. #he members of society transfer their ac!uired information to children to build their skills in

<nglish language.

s described by Aystrand %*++0 pp. 3*$/1*-, the !uality of learning <nglish language is

dependent on the nature of interaction with society. #he community helps children to make a

clear goal with regard to learning and development of <nglish language. #here are different types

of people who e2ist in a society and they play a different role in the learning of child. #here are




some members that motivate and facilitate children to enhance their <nglish language learning

skills. In contrast to this, there are individuals of community that negatively affects the growth

of a child to learn particular language skills. #herefore, it is considered as the responsibility of

parents to enhance their relations with members that help children in their learning and growth

%right, *++ pp. 1$*0-. >urthermore, parents need to reduce interaction with those individuals

who discourage children to learn a skill.

2. Pa%"&s a"6 C!$$/"i&i%s P%c%&i!" %,a6i", &+% D%#%*!$%"& E",*is+ La",/a,%

C/*&/% ! &+% Pi$a a"6 Mi66*% Sc+!!*s

s e2plained by mbreen and 6ohyuddin %*+1 pp.1/+$1/-, the children of primary and

secondary schools have huge interaction with teachers as well as parents. #herefore, their

behavior and perception with respect to learning <nglish language has a contribution in childSs

development. #he parent4s perception regarding <nglish education motivated them to identify

and choose schools that encourage <nglish language learning in primary and secondary schools.

#he perception of parents regarding the development of <nglish language culture in schools in

dependent on the important that is given by them. If parents that <nglish language does not play

any significant role in childrenSs life then it adversely affects children to learn this skill. )n the

other hand, parents who are aware with respect to the importance and role of <nglish language at

international level emphasi7e children to learn this skill.

#he honesty and sincerity of principle and teachers are re!uired to develop the culture to learn

<nglish language in schools. If the schools take <nglish language learning as unnecessary

activity then it negatively affects the learning of <nglish language in schools. It is identified in

one research that communities and parents4 optimistic perceptions are vital for the educational

success of children %6unir and r 9ehman, *+15 pp. 0$05+-. #he parents and individuals of




society who provides help and support to children leads towers an easily adoption of <nglish

language.

2.; R%s%ac+ Gas

#he research gap e2amines areas that have not covered by past studies related to the parents and

communities perception about the importance of <nglish language in primary and secondary

schools. #he past research studies has developed an understanding with respect o parental role

and learning of <nglish language by children. #he past studies have identified the significance of

parents and communities perception about the importance of <nglish language of a child but they

have not involved evaluation of a particular area or city. #here are few studies in past that have

covered areas of with respect to the perception of parents and communities to understand to

develop skill of <nglish language among children. #herefore, this study has been taken into

consideration to e2plore aspects with regard to parents and community perception in the growth

of skills among children.

2.> C+a&% S/$$a

#he motivation as well as support of parents enables children to learn <nglish language

fre!uently during their primary and secondary schools. #here are different types or theories

related to parental involvement. #he types of parental involvement that have been discussed in

this study are parenting, communicating, volunteering, home learning, decision making, and

community collaboration. #he behavior and actions of members of community either make a

positive or negative contribution in learning of <nglish language among children. #he education

is considered as important because it positively contributes in achievements of children. #he

education is important because it helps to enhance confidence among individuals. #he education

has become like basic necessity to survive and live in a society. >urthermore, it is discussed in




literature that <nglish language has also become an indispensible part of a particular individual

or society. #he significance of <nglish language is analy7ed in a way that, it is used as a common

language over the world. It is evaluated that both parents and communities can encourage or

discourage children to learn a particular during the stages of primary and secondary schools. #he

third chapter will determine the research methodology adopted for the completion of present

study.




C+a&% 3: R%s%ac+ M%&+!6!*!,

3.1 I"&!6/c&i!"

#he third chapter of the research encompasses the process and procedures utili7ed by the

researcher while accomplishing the particular study. #his chapter undertakes the philosophy,

approach and strategy along with data analysis procedures employed by the researcher in order to

satisfy the predefined objectives of the study. s the present study aspires to evaluate the

perceptions possessed by parents and the society regarding the adoption of <nglish language in

primary and middle schools within the vicinity of >aisalabad the methodology of the current

research is mentioned as under

3.2 R%s%ac+ P+i*!s!+

In conte2t of the present study the researcher has utili7ed positivism as the research paradigm.

#he reason behind using this philosophy for the study refers to the nature of the study which

reflects the study being !uantitative. In addition to this, the positivism enabled the researcher to

relay the analysis of the gathered !uantitative data on the basis of mathematical findings.

#herefore, the utili7ation of this philosophy empowers the researcher to develop such fruitful

study and satisfy the predefined objectives of the study. "aunders, "aunders, :ewis and #hornhill

%*+11 pp. 5- stated that selection of an appropriate research philosophy represents the mindset of

the researcher while analy7ing the gathered data. #hereby, using positivism philosophy permits

the researcher to analy7e the data without any personal prejudices and biasness

3.3 R%s%ac+ A!ac+




s the present study aspires to evaluate the perceptions of parents and society regarding the

adoption of <nglish language in primary and middle schools, the researcher has chosen inductive

approach as research approach for the present study. #he inductive research approach facilitates

the researcher to focus upon the areas of core importance in reference to predefined research

objectives and !uestions. #he theory formulated in this approach is based upon the analysis and

evaluations carried forward with the help of primary and secondary data. "aunders, "aunders,

:ewis and #hornhill %*+11 pp. 5- justified that the adoption of the inductive research approach

enables the researcher to test the gathered data after the formulation of theory.

3.0 R%s%ac+ D%si,"

In conte2t of present study, the e2planatory and descriptive research designs have been adopted

by the researcher, this is because both the research designs enabled the researcher to investigate

regarding the identified research problem in detail. >urthermore, the chosen research design also

facilitates the researcher by providing a multi dimensional picture relating to the issue as it also

undertakes the usage of secondary information. #he study of 'air Ur, olfinbarger, 6oney,

"amouel and Page %*+15 pp. 1*- e2plained that the chosen research design empowers the

researcher to identify the effects of the variables chosen within a research.

3.< R%s%ac+ S&a&%,

s far as the present research is concerned, survey strategy is used by the researcher in order to

gather the re!uired data. s the present study aspires to investigate the perceptions possessed by

parents and society regarding the adoption of <nglish language in primary and middle schools

the survey strategy re!uires the circulation of the !uestionnaires amongst the respondents of the

study. In addition to this, the survey strategy also empowered the researcher to analy7e the

gathered data with an ease, as this strategy !uantifies the responses gathered from the




respondents upon the established ranking scale. )n the other hand, the adoption of other research

strategies would have made the present study more comple2 and time consuming. s e2pressed

by Bryman and Bell %*+15 pp. 50- survey strategy refers to the time effective approach deployed

by the researcher in order to collect the data.

3. S!/c%s ! Da&a C!**%c&i!"

#he source of data collection refers to all the resources through which the data has been e2tracted

by the researcher in order to satisfy the predefined goals and objectives of the study. In conte2t of

present research development of this research undertook the data from the primary sources and

well as from the secondary sources. #he secondary sources of data include all the information

collected from the books, journal articles and certain online sources. #he secondary sources of

data entail the refined information processed by the prior researcher in the common domain. )n

the other hand, the primary data utili7ed in this research is accumulated with the help of the

respondents of the study. #he adoption of both the data sources enabled the researcher to get the

multi dimensional picture of the issue as the secondary data reflects the point of view possessed

by the prior researchers, whereas the primary data portrays the perceptions of the respondents.

ccording to 'air Ur, olfinbarger, 6oney, "amouel and Page %*+15 pp. 1*-, the sources of

data collections adds a substantial value in reliability of the research, as it supports the research

with the opinions e2pressed by the previous researchers.

3. Da&a C!**%c&i!" M%&+!6

#he data collection method plays a significant role in the progressive development of the

research. s the present study is concerned, the secondary data have been gathered with the help




of prior researches and books. 'owever, the primary data is collected with the help of the

!uestionnaires comprising of close$ended structured !uestions. #hese !uestions were evaluated

on the basis of likert scale ranked from one being strongly agreed to five which demonstrates the

notion of strong disagreements. #he utili7ation of !uestions for data collection enabled the

researcher to gather the data relevant to the present study.

3.; Sa$*%

#he subset of the entire population is called the sample. In conte2t of present study, the sample

si7e comprises of appro2imately /+ respondents from the population of such areas specifically

having two public primary and two public middle schools in the vicinity of >aisalabad Pakistan.

In addition to this, the sample constitutes of such individuals whose children are studying in the

chosen primary and middle schools. #hose respondents involve the parents and communities as

they will give their perceptions regarding the current research issue. #he estimated sample is

chosen with the help of non$probability sampling techni!ue called convenience sampling as it

has enabled the researcher to collect data with an easy approach. #herefore, the names of the

schools and the area from where the population and by e2tension the sample is randomly derived

as follows.

1. 8overnment 8irls Primary "chool in D 8round

*. 8overnment Boys Primary "chool motorway colony

. 8overnment Boys <lementary "chool, 6illat #own

/. 8overnment 8irls <lementary "chool, Aishatabad

E&+ica* C!"si6%a&i!"s

<thical considerations refer to the essential part of the study. It is mandatory for the researchers

to consider all the ethical concerns while accomplishing the research. #here are three types of




ethical considerations which include autonomy, anonymity and confidentiality %"aunders,

"aunders, :ewis and #hornhill, *+11 pp. 5-. =eeping their importance in mind, the researcher

has assured that none of the ethical values are desecrated. #herefore the secrecy of the private

information of the respondents along with the freedom of speech refers to the one of the concerns

assured by the researcher.

3.> Da&a A"a*sis

fter the collection of data, data analysis is carried forward by the researcher. In conte2t of

present study, the researcher has utili7ed the statistical software called "P"" in order to evaluate

the responses gathered from the respondents. #he adoption of the statistical instrument enabled

the researcher to pursue sound analysis of the accumulated results. It has involved the reliability

statistics and graphical representation of the data with the help of descriptive statistics. 'air Ur,

olfinbarger, 6oney, "amouel and Page %*+15 pp. 1*- stated that selection of an appropriate

data analy7ing tool facilitates in e2tracting relevant research findings and results.

3.1= C+a&% S/$$a

#he analysis of the chapter reveals the entire methodology used by the researcher in order to

satisfy the predefined goals and objectives of the study. Initially, it has been observed that author

has adopted a systematic research methodology for the assortment of relevant research data and

information. It has been identified that the researcher has used positivism as the philosophy of

the research, whereas the inductive research approach has also been applied by the researcher.

:ikewise, the author has implemented the survey strategy as the action plan and e2planatory as

research design. In addition to this, !uestionnaires refer to the data collection instrument

formulated by the researcher whereas the analysis of the gathered is carried forward with the

help of "P"". #he upcoming section is named as data analysis chapter in which collected




information and data is analy7ed and findings are interpreted. #he ne2t chapter will e2plore the

research results and findings.

C+a&% 1: I"&!6/c&i!"

1.1. *e !rea under In+esti%ation

In this study the area under investigation is the analysis and evaluation of the effective

business management policies on the performance of the British 9ed ?ross. British 9ed ?ross is

a non$profitable organisation, which is highly recognised because of its swift disaster based

planning and controlling, disaster management and most importantly its management of the

overall organisational operations and functions %?ouncil, *+1*-. "ince the British 9ed ?ross is a

non$profitable organisation, its major aim is to administer the workforce and budgeting in a

highly proficient manner in order to ensure that the organisation is capable of tackling disasters

in an effective manner.

It is essential for organisations like British 9ed ?ross to design, develop, and implement

effective business management policies in order to ensure that the various functions like,

operations, finance and human resources are managed effectively %"ingleton, *+1*-. #his would

ensure competent performance of the business as a whole, since all departments will work in a

highly synchronised environment. ith pre$defined policies all the departments will have pre$

defined boundaries and goals and will work towards the achievement of those goals, which in

turn will result in enhancing the organisations performance %Bryson, *+11-.

1.2. *e )r%anisational Conte,t




British 9ed ?ross is among the leading charitableorganisation of nited =ingdom. #he

organisation works internationally and domestically and provides health and social care services

to the vulnerable individuals of the society with the aim of the building resilience. British 9ed

?ross has strong global presence, as it is part of the world4s largest humanitarian organisation,

the international 9ed ?rescent and the international 9ed ?ross movement, comprising of more

than 1C+ national societies %'anlon, *+11-. British 9ed ?ross is a prominent and dynamic

member of the movement and it is strongly committed for strengthening the I>9? "ecretariat,

with the aim of building the capacity of the various national societies included in the movement

and providing resilient support to the various projects, tasks and policies of I?9? %International

?ommittee of the 9ed ?ross-.#he *+1+$*+15 corporate strategy of British 9ed ?ross supports the I?9? movement

with the aim of improving the effectiveness of the humanitarian response to natural disaster or

conflicts and wars. long with that, it also aims towards the reduction of the risks of global

warming all over the world and providing care to the e2tremely vulnerable groups and

individuals of the society %"ingleton, *+1*-. #hese aims are achieved through the provision

material and financial resources, along with human and technical e2pertise. >urthermore, the

British 9ed ?ross also provides support while working in close coordination with other societies,

which in turn helps in shaping the movement strategy, along with humanitarian and policy

diplomacy %?hristopher et.al, *+1/-.In the international 9ed ?rescent and the international 9ed ?ross movement, the British

9ed ?ross is acknowledged as one of the leading Aational societies possessing the capacity,

e2perience and the technical e2pertise, which are essential for the effective management of a

disastrous situation %aikayiet.al, *+1*-. British 9ed ?ross is working on the development of its

regional as well as global response system in order to ensure pertinent response to the disastrous




situation. #he aim is to establish a strong link between the disaster preparedness, disaster

response, and more importantly recovery efforts %Blaikie et.al, *+1/-. British 9ed ?rosshas also

played a crucial role in the development of the resilience approach of the movement, which is

aimed towards the reduction of risks and taking precautionary measures before the disaster

strikes. #his aim is achieved by British 9ed ?ross through working in close coordination with

the Aational "ocieties and ensuring the successful delivery of the programs that strengthen the

resilience of the communities towards crises %aikayiet.al, *+1*-.British 9ed ?ross provides technical support and funding in areas such as sanitation, first

aid, water and community based health, security and shelter, with a major focus over the

addressing of the fundamental causes of vulnerability to humanitarian crisis. s one of the active

participants of humanitarian policy field and leading player of the Aational "ociety in

International 'umanitarian :aw %I':-, British 9ed ?ross plays a significant role in the

promotion, development and dissemination of I':, both internationally and nationally %?arlos

et.al, *+1/, p. /-. British 9ed ?ross is dedicated towards the improvement of the environment

for the vulnerable groups and individuals residing within the society through the promotion of

the humanitarian principles and through influencing people with the help of an on$going

research, analysis and negotiation. British 9ed ?ross also works as a humanitarian support for

the public authorities of nited =ingdom under which it provides training, support and legal

advice to the national and the international stakeholders %'anlon, *+11-. #he humanitarian

policiesand activities of the British 9ed ?ross include development of civil military relations and

principles for the development of humanitarian resilience under disastrous circumstances.

1.3. Strate%ic Si%ni"cance of t*e !rea under In+esti%ation




"trategic significance is the method of evaluating the importance of the particular part of

the plan, which is being implemented by the organisation for ensuring efficient management.

Fi,/% 1: S&a&%,ic Si,"iica"c% ! -i&is+ R%6 C!ss

Planning holds high strategic significance for a non$profit organisation like British 9ed

?ross. #he importance of planning is high, specifically because, it enables the organisation to

develop effective plans for tackling with disastrous circumstances and taking precautionary

measures even before the disaster occurs %Bryson, *+11-. British 9ed ?ross has a well$developed

planning structure, through which they ensure that various operations and functions of the

organisations are performed in an appropriate manner to provide care to the vulnerable group of

the societies %Bryson, *+11-.British 9ed ?ross understands the strategic significance of planning and they devised and

developed their strategies around the disaster, poverty and healthcare issues. t British 9ed

?ross, the organisational plans are developed by keeping the needs of the organisation and its

human resources under strict consideration. #hus, the plans of the British 9ed ?ross works in

close coordination with their mission and vision %aikayi et.al, *+1*-. #he visions and mission

of British 9ed ?ross involves working for the benefit of the humanity, ensuring their safety and




providing the vulnerable group of the society with an environment in which their basic needs are

addressed %'anlon, *+11-.:ike planning, programing also holds strategic significance for British 9ed ?ross. >or

non$profit organisations, programing is closely linked with mission and vision of the

organisation. It is essential that programing and planning works in close coordination within the

company %'ead ( lford, *+1-. British 9ed ?ross has a strong hierarchy and they perform their

planning and programing activities based on teams. #hus, in order to ensure effective programing

and planning activities, possible clients are associated in the preliminary planning and

programing process %)bel, *+1/-. #his helps in building the ac!uaintances for the fundraising

and donation programs. Programing is also significantly important for British 9ed ?ross as it

adds value to the business management policy. It is a crucial method that serves as an essential

tool for the management of the various features of the organisation %aikayi et.al, *+1*-."imilarly, budgeting for various projects also holds strategic significance for British 9ed

?ross. "ince the British 9ed ?ross is a non$profit organisation, it is completely dependent on

donations by the public and the private sectors %?unningham et.al, *+1/-. >urthermore, for non$

profit organisations, like British 9ed ?ross, the budgeting engrossed within the crisis and the

charitable management activities can result in lifting the overall monitory resources of

theorganisation. =a7iliZnas%*+11- concluded that the non$profit organisations like the British

9ed ?ross have proved to be proficient and successful in performing various societal activities;

thus, enabling them to generate financial resources in the form of fundraisers and charities.:astly, performance management and management control also plays a significant role in

the British 9ed ?ross. "ince the management is responsible for the measuring of the

performance of the organisation, its employees and take counter$measures forremedial actions

%?henhall et.al, *+1*-, this ensures that the performance of the organisation remains in

coordination with its goals and objectives. #hus, the strategic significance of performance




management and management control is very high for an organisation like British 9ed ?ross,

specifically because the overall performance of the organisation is dependent on it.

1.4. Researc* -uestions and )#ecti+es

research !uestion could simply be e2plained as the statement that is used for the

identification of the phenomenon that is to be studied. ppropriate answer to the research

!uestion helps in addressing the research problem in an ade!uate manner %?reswell, *+1-.

>ollowing are the research !uestions, which are addressed by the researcher in this studyF

• hat are the impacts of effective business management policies on performance of

British 9ed ?rossW

• hat are the different methods through which British 9ed ?ross ?ompany can

implement its effective policiesW

#he objectives of the study are designed by the researcher for answering the research

!uestions. #hey emphasise on how the aims of the research are to be accomplished. )bjectives

must be highly feasible and focused and appropriately address the overall outcomes of the

project %?reswell, *+1-. >ollowing are the objectives of this researcher studyF

• #o identify the influences of effective business management policies on performance of

British 9ed ?ross.

• #o determine the efficiency of the British 9ed ?ross business management policies.

• #o assess and presentthe unconventional business management policies on the

performance of British 9ed ?ross.




C+a&% 2: Li&%a&/% R%#i%4

2.1. Introduction

Business Policy characterises the degree or e2tent to which employees within

anorganisation can take decisions %Daft, *+15-. It allows the lower management level to manage

the issues and problems without counselling top management level for making decisions each

time. Business procedures andpolicies are the rules created by a company to supervise its

activities %Daft, *++3-.'ead ( lford %*+1- describes the boundaries of decision making, which

must be followed. :ikewise, business policy manages the attainment of organisational resources,

which are essential for achieving organisational objectives. Business policies are the e2ploration

of the top management level responsibilities, the substantial issues influencing success and

achievement of the organisation and the decisions that may influence the organisation in long$

term %Daft, *+15-.9egardless of the sector anorganisation operates in, i.e. public or private

sector,management of business policy is crucial and turning out to be the most significant factor

%'itt et.al, *+1*-. n investigation led by #he <conomistSs Intelligence nit regarding *11 public

sector as well as private sectorcompanies found that C3 of the government participants and C1

of the private participants have e2perienced a negative effect due to the absence of effective

management of business policy %'itt et.al, *+1*-.

2.2. /usiness 0ana%ement olicy




6anaging a business is an administrative approach, which is utilised to ensuresimple

managerial practices by means of building up different policies and strategies to handle the

uncertainconditions that will eventuallyoccur. Business management policies are the operative

guidelines that could be forwarded on with the intention to support the order, security, stability or

future objectives of both profit based and non$profitbasedorganisations. >or e2ample, acompany

may have management policies against hiring the relatives of e2istingemployees for higher level

position. <ach time when the situationascends, the workers may make reference to the

management policies, rather than making their own decisions %?henhall et.al, *+1+-.In todays4 competitive business environment, the management policies of companies are

utilised as amanagement techni!ue and procedure throughout the system or functions that

comprises of numerous users. 6anagement policies of companies involves policy$based

administration and control of the enterprise, which controls the system, the application of the

defined policies and strategies forcontrolling and managing the access for the engagement of the

resources %6c:ean ( "mits, *+1*-.6anagement policies of multiple user companies actually includedeveloping procedures

for such activitiesso as to get accessibility to the document or delete particulardocument, the

e2terior and foundations of single desktops users etc. #here are different softwarepackages

available forautomation of a feworganisational processes. )verall, the way these software

packages perform are management policies of business, which are contributes towards the

products or services %Beautement et.al, *++3-.Business management policy serves as an efficient managerial approach, which is

integrated within the management, operational and the functional aspect of the organisation

%heelen('unger, *+11-. #hese policies are the functioning rules that perform the task of

sustaining the direction, maintenance of operations, and continuity of processes within the

organisation. #oday, the business management policies are employed by organisations as a




management techni!ue and tool throughout the organisation %heelen( 'unger, *+11-.

ccording to #ripathi(grawal %*+1/-, the business management policies captivate policy

based management that is responsible for controlling the network, implementation of the

described policies for effective management and controlling the access for the employment of

resources.)rganisations, like British 9ed ?ross, can enjoy various benefits through the successful

implementation of Business 6anagement Policies, the benefits includeF

Fi,/% 2: Fac&!s ! E%c&i#% -/si"%ss Ma"a,%$%"& P!*ic

2.1.1. &'p!o#ee Retention

Implementation of effective business management policies results in decreasing the

employee turnover rate for organisations %8anesan, (Badrinath, *+1*-. ith well$defined

policies and procedures in place, the employees work towards the achievement of vision of the

organisation. ccording to "hen et.al %*++3-, good organisations know the value of their human

resources and determine their management policies keeping the human resources under




consideration. #hus, they ensure that the human resources working within the organisation are

well aware of the organisation4s vision and mission %"wayne et.al, *+1*-. "ince, employees are

well aware of their organisation4s vision and mission, they work in accordance with their defined

policies, which results in the successful achievement of the organisational goals in the longer run

%"wayne et.al, *+1*-.

2.1.2. (ncreased Co'petenc#

ith ade!uate business management policies in place,organisations can develop training

and development program for the managers in order to ensure a high level of competency %De

Hos et.al, *+11-. It is crucial for organisations to possess managers that are competent and

proficient, because they are the decisions makers of the organisations %#ripathi, (grawal,

*+1/-. >or organisations, like British 9ed ?ross, it is essential to possess a team of highly

competent managers, because its A8) centres are located all around the world and they need to

ensure that the high level of !uality, care and management of disastrous situation is guaranteed in

all the countries.

2.1.3. )raining and Deve!op'ent

#he organisations with strong business management policies in place are capable of

designing and developing various training and development programs for the employees at

various levels %Aoe, *+1/, p. 1+1-.#he organisations, like British 9ed ?ross,emphasise over the

training and development programs for the non$managerial and the managerial employees. It is

essential to provide training to the non$managerial employees because they are the ones who

have to work in the field with the vulnerable population. Herma %*+1- stated that it is crucial

that these employees are capable of identifying and addressing the needs of the individuals in an




ade!uate manner on humanitarian grounds. dditionally, training and development of managers

is also highly crucial, as managers are the ones responsible for making the strategic decisions

associated with the various functional operations of the organisation %#ripathi(grawal, *+1/-.

It is essential to develop the skills and e2pertise of the employees in the organisation as this helps

the organisation in attaining the strategic priorities of the society."enyucel %*++3- e2plained that it is essential for the management of organisations to

manage their employees, volunteers and the fundraising and charity programs in an effective

manner. A8)sraise funds through various resources, which is possible due to the highly

motivated individuals working within the organisation, who are dedicated towards ensuring that

the organisation achieves a stable flow of financial remittances from various individuals,

government funds and organisations %"hen et.al, *++3-. ?urrently, the overall fundraising

activities carried out by British 9ed ?ross are ade!uate enough and have enabled the

organisation to provide healthcare services to people all over the world in an effective manner.

#hey are ensuring that the organisation fulfils the standards of the International ?ommittee of the

9ed ?ross %I?9"- movement.

2.3. *e Frame (ork of 0ana%ement

#he management framework involves the British 9ed ?ross management policy. It

additionally clarifies that the e2pectations of managers with respect to society %Daft, *+15-.

>ramework of the British 9ed ?ross management practices and activities are re!uired for the

effectiveand efficient organisational performance. It demonstrates the dedication of the British

9ed ?ross towards the development ofmanagers throughout the community. t last, it

encourages the senior management to take the responsibility asapositive role model for other

managers and employees as well %Daft, *+15-.




2.4. /ene"ts of Successful Implementation of /usiness

0ana%ement olicies

dvantages of effective application of organisational management policies includeF

• 6ore skilled managers and competent decision makers at each organisational level at

British 9ed ?ross %David, *+1+-.

• Improved abilities for achieving the strategically selected targets of the society.

• Increased development improvement prospects and more accentuated training and

development opportunities for employees at management and non$management level.

• Improved retention management and non$management level volunteers and employees.

• Promotion of culture thatcomprises ofindividual as well asorganisational learning and

development %David, *+1+-.• )rganisational management policies simply do notbenefit the management, but the

effective management framework implementation helpsin guaranteeing training and

development opportunities for everyone in order to achieve the improvement they

desirefor their occupation. "uch opportunitiese2ist in their personal development and

growth in the long$run %David, *+1+-.:eaders of the British 9ed ?ross mustappropriately manage their workers, volunteers,

philanthropy projects and donations, if they are to achieve the uni!ue sense of individualism

%"nell et.al, *+15-. #he British 9ed ?ross uses a combined method of funding that is desirable by

majority of the philanthropy projects. s indicated by the higher management levelmember of

the British 9ed ?ross, they are satisfied with the charitable amount that they are able to generate

as revenue; however,the higher management level member additionally e2pressed that it entails

having a decent contract for a few elements of its work %"nell et.al,*+15-.

2.&. /ritis* Red Cross /usiness 0ana%ement olicies




Aumerous authors have elaborated on the importance of effective business management

policies for the organisation. British 9ed ?ross has worldwide operations in various countries

and they are looking to e2pand even further; hence, it is necessary for them to have effective and

efficient business management policies%'anlon, *+11-. <ven though, the organisation is not

involved in selling services and products for generating revenues, but the organisation certainly

re!uires proper management efforts to manage their large workforce and to tackle emergency

and disaster based situations like floods and hurricanes etc. >urthermore, the current global

economic situation creates a much stronger impact on non$governmental organisations like

British 9ed ?ross %"ingleton, *+1*-.

British 9ed ?ross is a non$profit organisation that needs to have effective management

policies. #he organisation needs to have ma2imum capacity in reaching out to all those issues

where there are problems%'anlon, *+11-. #he e2perts have conducted very clear identification

that at present all those non$profit organisations, which deal in disaster management, must be

more dynamic and even active as well. #his is especially the case for some very difficult regions

like frica, where there is a need to be more dynamic in order to meet the needs of the citi7ens as

well %aikayiet.al. *+1*-.

p till now, British 9ed ?ross has been able to e2pand itself as an association having an

effectual policy of business management in order to remain more dynamic and successful in their

disaster management activities globally %"ingleton, *+1*-. It is certainly observed that British

9ed ?ross seems to consider the decentralised structure of the organisation with their offices and

divisions. #his has helped them in maintaining proper business management policies for their

organisations %'anlon, *+11-. #hough, a detailed review of the literature related to the business

management policies for British 9ed ?ross will be conducted throughout the research study.



Banking Development and Poverty+

2.. 0ana%ement of Uncertain Conditions

#he contemporary approach of management in all non$governmental organisations and

even profit oriented companies has changed significantly. )rganisations are even working in

conditions where there are high probability and uncertainty and steps are taken in order to meet

the sudden situation%Dennis, *++3-. #here are several e2perts who have e2plained the concept of

risk management for conditions in which the organisations are now involved in uncertain

activities occurring in the e2ternal environment %'ead ( lford, *+1-.

2.. erformance 0ana%ement and /usiness 0ana%ement

#he significance of the performance management matters considerably for many

organisations. In the modern world, where both the profit$earning companies and more

specifically, non$profit companies are operating, performance management is certainly a vital

feature that is associated with risk management and advancement of information technology%'itt

et.al, *+1*-. t present, most of the non$profit organisations actually consider their volunteers as

their assets and well$wishers as well. It is usually seen that the performance associated with the

volunteer is measured in several ways. ccording to [avier %*+1-, the factors, such as

teamwork, dedication, production, communication mechanism and overall attitudes towards

welfare of the humanity,are associated with performance management and business management.

"uch kind of contemporary e2ercises of management policy has completely changed the

management practices %=aplan et.al, *+1+-.

#he success of the non$profit companies is usually measured by both efficacy and

efficiency with which they are able to address the needs of different stakeholders. <ven all the




profit oriented companies have acknowledge the fact that depending on financial measures only

is simply not enough for carrying out the performance measurement and management. 'owever,

financial reports prove to be very useful in measuring the past performance and providing very

little amount of information on value creation in the long$run%[avier, *+1-. ccording to

6c:ean ( "mits %*+1*-, performance measurement for the non$profit companies is very much

e2tensive but is certainly not very much conclusive in totality. #he main reason is that

organisations usually lacks the elegance and simplicity of financial measures like profitability or

returns for stakeholders, which profit making organisations normally use for making evaluation

of the performance %[avier, *+1-.

2.. Si%ni"cance of lannin% for 5on6ro"t or%anisations

>or every kind of welfare program that are there in the non$profit organisation, like the

British 9ed ?ross, it started with the suitable level of planning. Planning is vital both the non$

profit companies and profit making organisations4 as well. >or e2ample, there was one incident

in which British 9ed ?ross had strong high alert that the 'urricane "andy is going to come and

hit and its4 conse!uences will be disastrous for many families. #his is the reason why

organisation has started planning e2act by starting with their welfare programs and management

policies in order to create donations4 and then generate charities as well %9ahim, *+15-.

6oreover, the 'urricane "andy program has been appropriately separate from the

mission, goals and overall vision of the organisation as well. #here were large numbers of

volunteers who had earlier enrolled and were even offered training in order to help the societies




that were affected because of the natural disaster. #he company was then able to manage large

number of volunteers %in thousands- in affective manner because of the effective management

policy of the organisation. #he counteractive steps had been taken throughout during this

situation and large amount had been spent on the hurricane victims and after this welfare

program in order to remain successful in the future welfare programs4 as well %"enyucel, *++3-.

In addition, budgeting had been planned by the 9ed ?ross with the help of donations.

#here was large amount collected in this regard and then were spent on several kind of sub$

programs below the program of 'urricane "tudy. Performance management programs4 had been

started by the management teams that belonged to 9ed ?ross so that it can help in demonstrating

to both stakeholders4 and investors4 as well. It is vital in observing the managerial resemblance

that has occurred between the non$profit oriented and profit making companies %Podsiadlowski

et.al, *+1-.

>urthermore, there are large number of differences among all the non$profit oriented and

profit making companies from revenue generation, target market, selling etc.; but in terms of the

internal management, there are usually similar kinds of management policy making decisions

that includes training, development, hiring, planning, decision making, measurement of both

performance and assessment. non$profit oriented company usually has a very strong vision and

mission statement as well that assists in directing them for their projects and welfare programs4

as well. British 9ed ?ross has the main mission in serving the mankind and therefore they are

usually very active in participating in the charity programs. #he managerial aspects of the non$

profit oriented companies usually have very little difference from other similar companies

%:unenburg, *+1+-.




#o start with, the vital support obtained from emergency assistance and organisations4 for

human service during and later than the disaster has been somehow vital for the organisations4

since several years. #he non$profit companies try to assist the individuals, society and the entire

country as well that have got affected from the natural disaster with the help of essential services

like medical assistance, food supplies, clothing etc. In the following paragraphs, all the vital

factors4 will be highlighted that is going to assist in conducting an insight of the management4s

policy of the famous company, British 9ed ?ross. #heir vital business management policy

factors comprises of the followingF

2.*.1. +ora!e and +otivation of the Staff

positive morale and also the motivation of the volunteers along with the employees are

supposed to be vital intrinsic keenness of both volunteers4 and workers4 in order to enable

e2ecution of the tasks at the workplace. #he motivation and morale of the employees4 certainly

matters in all those situations4 where there is a need to work effectively during natural disasters

%Daft, *++3-.

2.*.2. "iring of the Vo!unteers

#he recruitment policy usually provides strong reference towards hiring of new

volunteers4 for available vacancy in British 9ed ?ross organisation. #hough, at present, there is

an implementation of various kinds of methods for ensuring hiring of prospective candidates.

#he problem is that not all of them are considered suitable for every non$profit company. #his is

the reason why a non$profit company can work on assuming methods of recruitment in




considering need of the organisation through effective management policies %6c:ean ( "mits,

*+1*-.

2.*.3. &ffective +anage'ent ,ra'e-or

#he effective and suitable management framework comprises of the management policy

of the British 9ed ?ross. It is even useful in e2plaining about the manager4s e2pectations related

to the society. #he framework of the British 9ed ?ross management activities and tasks has the

need for the effectual performance of the organisation. It certainly shows the commitment level

of the British 9ed ?ross for the developing managers all through the society. >inally, it will

prove very effective in providing motivation to the senior managers in having a constructive role

model for all other managerial staff working in the organisation %Daft, *+15-.

2.7. Importance of C*an%e 0ana%ementin )r%anisations

?hange management plays a crucial role in the success of the organisation. ?hanges

within the organisation are usually initiated by the higher management and they are the ones

responsible for the successful integration of new set of policies and procedures within the

organisations %'ayes, *+1/-. It is their responsibility to ensure that change is accepted by all the

employees working within the organisation, because they are the ones who will work for the

achievement of organisational goals. ccording to ?ameron, ( 8reen %*+15- organisational

culture plays an essential in the implementation of change within the organisation. )rganisations

with traditional cultures are rigid towards change, whereas organisations with contemporary

culture are fle2ible and they adapt and change their culture as per the circumstances. British 9ed




?ross is an organisation with traditional culture, thus, there culture is not fle2ible towards the

changing circumstances, and as a result the organisation is struggling to achieve its goals of

ensuring the provision of !uality health and care facilities to humanity. It has now become

essential for the top management of British 9ed ?ross to devise certain improvement decisions

keeping the changing environmental conditions under considerations in order to continue its

successful run in the I?9" movement.In past few years British 9ed ?ross has struggled to change its traditional structure;

however they have failed to develop and implement the new welfare services and programs due

to the reduction in donations and funding4s due to the high rate of inflation, and global financial

crisis. #hus, development and implementation of effective change management policies within

organisations like British 9ed ?ross could serve as the key towards the achievement of success

%"wayne et.al, *+1*-. British 9ed ?ross is re!uired to adapt to the environment and keep on

making changes in their business management policies in order to cope$up with the changing

needs of the people, specifically the vulnerable population. British 9ed ?ross and its employees

are dedicated to ensure that high level of care, and services are provided to the people suffering

from disasters or other issues such as poverty, increasing inflation, and healthcare costs. British

9ed ?ross is trying its level best to utilise the available resources in an ade!uate manner to

reduce the sufferings of the people all over the world.




C+a&% 3: M%&+!6!*!,

3.1. Researc* rocess

#his section of the study provides an overview of the research process that was adopted

by the researcher while conducting this study. It begins with the introduction and e2planation of

the research philosophy that was utilised by the researcher for the study. #his section also

provides a brief illustration of the research approach taken by the researcher is order to conduct

the study. fter this the researcher briefly describes the research strategy and the design adopted

by the researcher in order to collect and analyse the data for achieving the desired outcomes.

:astly, in this chapter, the researcher has provided a brief overview of the data collection and

analysis methods, along with the relevance of the selected methodology for this study.

3.2. Researc* *ilosop*y

9esearch philosophy could simple be e2plained as the belief about the manner in which

data regarding a specific phenomenon should be gathered, analysed and then utilised for the

study %#olman, *+1*-. #here are different research philosophies that are used by researchers and

a few of which are post$positivism, positivism, pragmatism, realism, post$structuralism,

interpretivism, critical theory and constructivism.

3.1.1. (nterpretivis'

>or this research study the researcher has selected interpretivismapproach. Interpretive

philosophy helps the researcher in comprehending the human e2periences of the respondents. It

views that the reality is socially$constructed and is fluid in nature. Influenced by cultural and

social relationships between people, this reality seeks to adopt a change that is why it is




considered fluid or alterable.#he researcher used the interpretivism methodology approach and

the rationale for selection of this philosophy is that it provides a rich data on construction of

social reality from participants on the effectiveness and vulnerabilities present in the business

development policies of British 9ed ?ross.

3.3. Researc* !pproac*

8ioia et.al, %*+1- e2plained thatthe research approaches are classifiedinto two different

categories. #hese categories were inductive and deductive approach. In the inductive approach,

the research is initiated through the collection of relevant data that is related to the selected

phenomenon and research problem identified by the researcher.)nce the data is collected, the

ne2t phase is data analyses to evaluate the overall results of the study %8ioia et.al, *+1-.

hereas, on the other hand in deductive approach the research usually begins with a social

generalised theory linked with the selected phenomenon and then its implications are evaluated

through the collection of data.In this study, the researcher adopted inductive approach, since the researcher has

collectedinformation from the management and the employees of British 9ed ?ross and after

that the researcher concludes the research by developing a general theory, which focuses on the

main aims of the study. #hus, this approach enables the researcher to move from specific

phenomenon to a much more general one. #he analysis conducted through inductive approach is

purely based on the data collected from the respondents.

3.4. Researc* Strate%y

In simple words research strategy is the approach that is utilised by the researchers in

order to conduct the research. "ome of the fre!uently used research strategies include surveys,




interviews, e2periments and case studies etc. >or this study, the researcher has selected

!uestionnaire survey and interviews %?reswell, *+1-. tilising the survey and interviews

strategy, the researcher has developed survey and interviews keeping the research topic under

consideration, since the !uestions provide the essential information that could be used for

achieving the results of the research study.

3.&. Researc* $esi%n

>or this study, the researcher has utilised a mi2 of both !ualitative and !uantitative

research methodology. @uantitative research could simply be e2plained as the phenomenon of

collecting numerical data, which is analysed by the researcher through mathematical based

methods, particularly statistical tests %=ing, *+1*-. @ualitative design aims on subjective

evaluation of opinions, attitudes and behaviours of the research participants and respondents. In

this study, the researcher collected that data from the management and the employees in order to

analyse the effectiveness and vulnerabilities present in the current business development policies

of British 9ed ?ross. #he researcher collected the data through survey !uestionnaire and

analysed the data using statistical tool "P""1.+ to determine the results of the study. #he data

collected from interviews was analysed using thematic analysis.

3.. $ata Collection

Data collection is regarded as one of the most essential elements of the research study,

specifically, because data collection has a direct impact over the results of the study. In this study

the data was collected using survey !uestionnaires and interviews.

3./.1. Surve#s




#he reason behind the selection of survey !uestionnaires is that they are easy to attempt,

low$cost, accurate and can be analysed by the researcher swiftly and easily. "urvey

!uestionnaire is one of the most effective tools of collecting large amount of data in a time

efficient manner. s the main aim of the study is to analyse the importance of effective

management policies; therefore,data from large number of respondents need tobe collected,

which can only be gathered through survey !uestionnaire.

3./.2. (ntervie-s

dditionally, interviews were also conducted for this research because it helps to understand

the perception and opinion of the participants and stresses on a certain point in order to maintain

the focus over the central theme of the research. 6anagement of British 9ed ?ross were

interviewed for the purpose of ac!uiring the inside news of the organisation and how these

managers implement different business policies within the company.

3./.3. Re!evance

#he selected research design is relevant to the current research phenomenon, as

!uantitative researchvalidates the answers for a larger sample. #he mi2ed method research was

conducted in order to obtain precise and !uantifiable dataalong with !ualitative data to generate

broad themes based on the responses of the participants. "ince !uantitative research is a

structured process, it enabled the researcher to obtain highly objective and reliable data for the

researcher. #he !uestions of the survey were close ended; thus, they ensured that the researcher is

provided with definite answers to the !uestions, which were asked from the participants.

@ualitative research helped in gathering the opinions and provides the researcher with details

about human behaviours of the participants.



Banking Development and PovertyC+

3.. Samplin%

"ampling is the method, which involves the selection of elements from an ordered

sampling frame. #here are two types of sampling methods probability and non$probability used

for research purposes. >or this study, the researcher selected non$probability sampling techni!ue,

which is further classified into availability or convenience sampling. #he reason behind choosing

convenience sampling is that it allows the researcher to save cost and time for conducting the

process while provides a facilitative choice in selecting relevant participants for the study. #he

target population for the study consists of the management and the employees working within the

British 9ed ?ross.

3.. $ata !nalysis

Data analysis is another crucial element of the research methodology. It is a plan, which

guides the researcher in the process of analysing the collected data for the research through

different methods and techni!ues. "ince in this study the researcher has collected primary data

through !uestionnaire survey as well as interviews, the researcher applied different analysis

methods for both designs. #he analysisfor !uantitative data included fre!uency distribution and

regression, which were performed using "P"". hile, the !ualitative data collected from

interviews was analysed using thematic analysis.



Banking Development and PovertyC1

C+a&% 0: A"a*sis

4.1. )+er+ie8

?hapter four of this study comprises of analysis and findings from !uestionnaire survey

as well as interviews. #he researcher analysed surveys by conducting regression analysis to test

the research hypothesis and the interview responses were analysed using thematic analysis. #he

study aimed to understand and evaluate the effective business management policies on the

performance of the British 9ed ?ross.

4.2. -uestionnaire !nalysis

#he survey data for this research was gathered from + employees of British 9ed ?ross

using :ikert scale !uestionnaire. #he aim was to understand the impact of effective business

management policies on the performance British 9ed ?ross. #he researcher chose to test the

hypothesis using 9egression nalysis on "P"".

0.1.1. ,reuenc# Distribution

#he fre!uency distribution chart generated on "P"" is presented below.

Ta5*% 1: F%?/%"c R%s!"s%s ! 9/%s&i!" 1



Banking Development and PovertyC*

9egarding the !uestion related to employee reaction , \6anagement has introduced

employee empowerment strategies in the company to increase retention4, .1 percent of

employees strongly disagreed to the statement, *.3 percent of employees disagreed, **.3

percent of employees replied neutral, 1.1 percent of employees agreed, and the remaining *+.++

percent respondents strongly agreed. #his means that employees believe empowerment and

delegation of authority helps in satisfaction towards work, which eventually results in retention.

Ta5*% 2: F%?/%"c R%s!"s%s ! 9/%s&i!" 2

>or the !uestion \6anagement is concerned about the needs of employees in order to

increase retention4, 11./ percent of employee strongly disagreed to the statement, /+ percent of

employees disagreed, 15.1 percent of employees replied neutral, *+ percent of employees

agreed, and the remaining 1*.C0 percent respondents strongly agreed. 'ence, majority of

employees believe that their managers are concerned about their employees and develop various

strategies to retain them.

Ta5*% 3: F%?/%"c R%s!"s%s ! 9/%s&i!" 3




>or the !uestion \'as there been an e2cessive turnover of the supervisory personnel4,

.1/ percent of employee strongly disagree, *.1/ percent disagreed to the statement, *5.1

percent of employee replied neutral, *5.1 percent of employees agreed, and the remaining 1/.*3

percent respondents strongly agreed.

Ta5*% 0: F%?/%"c R%s!"s%s ! 9/%s&i!" 0

>or the !uestion \#he job descriptions of the employees are clearly established and

communicated to the employees4, 5.1 percent of employees strongly disagreed to the statement,

*C.5 percent of employees disagreed, *.1/ percent of employees replied neutral, */.*3 percent

of employees agreed, and the remaining 1/.*3 percent respondents strongly agreed.'ence,

majority of employees believe that in British 9ed ?ross the employees have well$defined job

descriptions that are clearly communicated.



Banking Development and PovertyC/

Ta5*% <: F%?/%"c R%s!"s%s ! 9/%s&i!" <

9egarding the !uestion \Does it appear that management, accounting, and information

technology personnel are sufficiently competent to perform their assigned responsibilities4, *.C

percent of employees strongly disagreed to the statement, /+ percent of employees disagreed,

*1./ percent of employees replied neutral, *5.1 percent of employees agreed, and the

remaining 1+ percent respondents strongly agreed.'ence, majority of employees believe thatin

British 9ed ?ross the employees in the management, accounting, and information technology

departments are well !ualified and highly competent and help in achieving better performance.

Ta5*% : F%?/%"c R%s!"s%s ! 9/%s&i!"

bout the !uestion \Is there an effective employee performance evaluation system

present for identifying incompetent or employeesW4, 1./ percent of employees strongly disagreed




to the statement, /. percent of employees disagreed, + percent of employees replied neutral,

*+ percent of employees agreed, and the remaining 1/. percent respondents strongly agreed.#he

fre!uency distribution chart generated on "P"" is presented above. 'ence, majority of

employees believe thatdespite company4s efforts, the performance evaluation system at British

9ed ?ross is still not efficient and streamlined.

Ta5*% : F%?/%"c R%s!"s%s ! 9/%s&i!"

bout the !uestion \6anagement provides ade!uate training opportunities for

employees4, 11./ percent of employees strongly disagreed to the statement, 15. percent of

employees disagreed, 1/. percent of employees replied neutral, 5C.0 percent of employees

agreed.'ence, majority of employees believe that the training programs at British 9ed ?ross are

ade!uate for employees.

Ta5*% ;: F%?/%"c R%s!"s%s ! 9/%s&i!" ;




>or the !uestion \Professional development is given high value in this organisation4,

*1./ percent of employees disagreed to the statement, **.C0 percent of employees replied

neutral, /1. percent of employees agreed, and the remaining 1/.*3 percent respondents strongly

agreed.'ence, majority of employees believe that theBritish 9ed ?ross gives high value to

professional development and for this they provide necessary training and development

programs.

Ta5*% >: F%?/%"c R%s!"s%s ! 9/%s&i!" >

>or the !uestion \Does the organisation link training and development with the business

strategy of the company4, .1/ percent of employees strongly disagreed to the statement, 1.1/

percent of employees disagreed, *1./ percent of employees replied neutral, /+ percent of

employees agreed, and the remaining 1/.*3 percent respondents strongly agreed.'ence, majority

of employees believe that the British 9ed ?ross has incorporated training and development of

employees as part of their organisational strategy in order to ensure operational efficiency.

Ta5*% 1=: F%?/%"c R%s!"s%s ! 9/%s&i!" 1=




>or the !uestion \)rganisational performance is dependent on the performance outcomes

of the human resources which includes; such skills, attitudes and behaviour4, *.3 percent of

employees strongly disagreed to the statement, *5.1 percent of employees disagreed, 1/.*3

percent of employees replied neutral, .1/ percent of employees agreed, and the remaining *+

percent respondents strongly agreed.

Ta5*% 11: F%?/%"c R%s!"s%s ! 9/%s&i!" 11

>or the !uestion \'96 policies are developed in line with the business management

policies are developed4, 11./ percent of employees strongly disagreed to the statement, 11./

percent of employees disagreed, 1C.5 percent of employees replied neutral, /1.5 percent of

employees agreed, and the remaining 1.5/ percent respondents strongly agreed.'ence, majority

of employees believe that the British 9ed ?ross human resource policies are in synergy with

business strategies of the company.



Banking Development and PovertyCC

Ta5*% 12: F%?/%"c R%s!"s%s ! 9/%s&i!" 12

>or the !uestion \Participation, compensation, incentives, training and development are

kept in consideration while developing the business management policy4, 11./ percent of

employees strongly disagreed to the statement, *+ percent of employees disagreed, 1+ percent of

employees replied neutral, /.1/ percent of employees agreed, and the remaining 11./ percent

respondents strongly agreed.

0.1.2. Regression %na!#sis

>or testing the hypothesis of the study, the researcher applied regression analysis using

"P"" software. #he aim was to understand the impact of business policies on performance of

British 9ed ?ross. #he regression analysis was used based on the following e!uation of linear

regressionF

y = a + bx

'ypothesisF Business Policies impact on performance of employees

#he following table presents the regression analysis showing the impact of business

policies on the performance of employees.




Ta5*% 13: R%,%ssi!" A"a*sis

#he above table e2plains that relationship between training ( development and employee

empowerment strategies. "ince the p value is +.+++, which is greater than +.+5 %pT+.+5-, it can be

concluded that the relationship between training ( development and employee empowerment

strategies is highly significant. #hus, the regression e!uation isF

y = a + bx

#herefore,

!ployee Perfor!ance = ".2#$+ ".%&1 'x(

4.3. Inter+ie8 !nalysis

#he interview analysis is based on the !ualitative information obtained from different

employees of other organisations. #hese responses are evaluated by thematic analysis and are

discussed below.

0.2.1. ritish Red Cross usiness +anage'ent Po!icies Success of Organisation

s mentioned above in the literature review and analysis, skill development and business

decision policies are important aspect for an organisation success and enhance the e2pertise of




the employees. In the interview, the participants responded that organisations need to invest more

time and money in carrying out different training programs for the employees, which will benefit

them in the long run. )ther participants responded that strong business policies are valuable to

secure human capital and gain competitive edge in the market. )ther participants also responded

that strong business policies will develop a favourable perception among employees about the

organisation and this will result in better work performance.

0.2.2. &ffective usiness +anage'ent Po!icies ritish Red Cross Perfor'ance

9esearchers e2plain that effective business management policies are directly related to

the work abilities and productivity of the employees. In the case of British 9ed ?ross, one of the

participants responded that effectiveness of business management policies are based on the

employees training, which should be dependent on the current need of employees. #hese

activities must be interlinked with the job of the employee and organisation4s e2pectations and

goals. nother participant responded that '96 policies are also an important aspect in the

motivation of employees, which impacts the performance. #herefore, '96 policies should be

designed with active participation and contribution of the employees. British 9ed ?ross is more

interested in achieving their e2pectations instead of analysing the employees need.

British 9ed ?ross needs to train the employee as per their skills and area of knowledge so

that different needs of employees are met. ?onventional modes of training are only related to the

imposition of a single package of activities over all the employees of an organisation.

0.2.3. +easure'ent of&ffectiveof usiness +anage'ent Po!ic# of ritish Red Cross




<mployees and researcher mentioned the importance of internal communication system

to analyse the effectiveness of business management policy. #he interview also revealed

important opportunities for improvement in the current business management policy. Internal

communication is of significant importance as it connects the enterprise e2ecutive level

leadership and employees to promote new business management policy. >ew respondents

mentioned the importance of conducting periodical internal audits for the assurance of policy

compliance. Internal audit committee should be assigned to uncover any difficulties in

compliance of business management policy. :ikewise an integrated policy management plan

should be implemented in order to achieve effective compliance program. )ne of the participants

mentioned the importance of measuring the volume of regulations impacting the current business

operations and to modify or merge the old policies to form new regulations. )rganisations that

are more connected according to the compliance framework are prepared to minimise any

systematic risk and perform better in every situation.

0.2.0. ('p!e'entation of usiness +anage'ent Po!icies at ritish Red Cross

>rom the responses of employees it can be concluded that British 9ed ?ross needs to

manage itshuman resources effectively and enhance its management policies in order to add

value to the organisation. 'owever, the employees are overall satisfied with the management

policies. #he ultimate aim of the management policies is to make sure that organisation deliver to

its business strategy. It is the main focus of '9 to achieve the goals in alignment with the

business strategy. '9 policies need to be aligned with the organisation structure and employees

for better management and development.

0.2./. ('prove'ents in usiness +anage'ent Po!ic# of ritish Red Cross




ccording to the responses recorded from the participants, employees were unified about

the concept of better training and development process,as this increases the productivity level

and increases the prospects of future growth for employees. )ne of the participant e2plained that

personal and professional training will enable them for better productivity level and provides

them with career growth based on their performance and enhance e2pertise. >ew employees

were more concerned about incentives and reimbursements rather than training and development,

since, better incentives will provide them with chances of engaging in off job educational

activities, which will led to their career and personal development.




C+a&% <: C!"c*/si!"

&.1. Conclusion

#he main focus of the research is to analyse and evaluate the impact of effective business

management policies on the performance of the British 9ed ?ross. ccording to ?henhall et.al

%*+1*-, effective business policies act as boundary between the relationships of managerial layer

with lower level employees. It is regarded as the pre$determined guideline that aims on

successfully achieving the business aims and objectives. It has been researched that effective

business policies have become an integral part for many organisations including British 9ed

?ross. )rganisation are findings new ways to design, develop and implement effective business

policies for the purpose of integrating effective integration between various departments of the

company such as human resources, finance and operations. s per the survey conducted with the

employees of British 9ed ?ross, it can be concluded that the company has introduced new

employment empowerment strategies, whichnot only aims on increasing employee satisfaction

but also improves employee retention. 'owever, it was also reported that the management of

British 9ed ?ross has introduced effective policies but its implementation has not been effective.

6ajority of the employees are of the opinion that the management does not care about their

needs and development. s per the interview findings and survey analysis, it can be concluded

that majority of the employees are in the favour of having internal audit surveys in each

departments for the purpose of ensuring proper compliance and !uality. ccording to Bryson

%*+11-, organisations that are more prone towards compliance framework are more likely to

minimise and reduce all types of systematic risks; thus, having an opportunity to perform better

in different situations.




6oreover, it has also been found that the employees of British 9ed ?ross has

recommended to introduce new intrinsic and e2trinsic rewards for their performance, which

would automatically enhance job performance and satisfaction; thus, benefiting the company for

long$run. #hrough interviews and !uestionnaire it was also concluded that the employees of

British 9ed ?ross demanded for more training and development opportunities to be offered by

the company. ccording to the respondents of the study it can be concluded that employees at

British 9ed ?ross were unified regarding better training and development process as it would

enhance the productivity level and also provide high chances for future growth of the employees.

>urthermore, professional and personal training allows employees to perform better productivity

and assist them in achieving high career growth.ccording to ?henhall et.al %*+1*-, there is a highly significant relationship between

training and development and employee empowerment strategies. hen organisations are able

to offer effective training and development policies, it automatically increases employee

satisfaction and employees can better perform their work related tasks; thus, benefiting the

organisation in return. 6oreover, it has also been found that effective business policies help in

training future managers through which organisation members can be connected with one

another in order to improve business efficiency. It can be concluded that British 9ed ?ross

?ompany has drastically e2panded its operation by having effective business management

policies for the purpose of developing dynamic strategies of disaster management worldwide.

'owever, it has also been researched that company should consider the decentralised

organisational structure of their head office and different operational divisions. #his would assist

them in developing appropriate policies for organisational growth.

&.2. Recommendations




>ollowing are some of the important recommendations for British 9ed ?ross ?ompany

for the purpose of implementing effective business policies and ensuringorganisational

performance.

• &'p!o#ee )raining and Deve!op'ent F )ne of the most important recommendations for

the company is to develop effective training and development sessions for its employees.

British 9ed ?ross should design training sessions that would not only ensure !uality

work performance but would also motivate the employees to develop new skills and

techni!ues. ccording to Bryson %*+11-, in today4s modern and competitive market,

employees are not only looking for high paid salary but are also aiming to improve their

skills through effective training and development opportunities.

• "R+ Po!iciesF 'uman resource management is one of the most vital departments of the

organisation. Due to this reason, '96 needs to be managed through an effective manner

in order to ensure high organisational growth. British 9ed ?ross ?ompany should design

effective '96 policies that would not only benefit the organisation but also the current

employees including new recruits. n effective '96 policy does not only motivate

employees but also helps in retaining them.

• &'p!o#ee (nvo!ve'ent Po!iciesF nother important recommendation for British 9ed

?ross company is to ensure high employee involvement in their decision making process.

#hrough employee involvement, an organisation does not only obtain new ideas but also

helps in creating employee ownership; thus, enhancing performance and employee

satisfaction.

• 4orforce Diversit# Po!iciesF #he ?ompany is recommended to promote workplace

diversity within the organisation. n accurate implementation of diversity policies




improves human and organisational capital and assets, which can act as a competitive

edge for the organisation to generate more capital. n effective workforce diversity

policy would enhance British 9ed ?ross reputation. #his would also assist the company

in attracting and retaining talented employees within the organisation.

&.3. Implications for future Researc*

#he implications for future researches are as followsF

• #he future research should be covering the different business policies e2cept for training,

development, '96 and "tandardisation. "ome new factors that have a direct impact on

business policies should be analysed on an in$depth level.

• #he current research has focused on a charity organisation to conduct the research. >uture

researches can analyse the same point of view by focusing on different profit$based

companies that aims on generating higherrevenue for the company and shareholders. By

analysing the different nature of the firms, future researches can fill the gap that has been

left unaddressed in the current research or the elements that were beyond the scope of this

research.

study of :loyds Bank

ntroduction

In past few years internet banking has gained a wider level of acceptance as compared to

other forms of banking %8eorge, ( =umar, *+1/, p. 5-. In nited =ingdom all the banks are

now offering its customer internet banking facility in order to provide them convenience through

online banking with the aim of achieving high level of customer satisfaction and loyalty.

9amboca and rjoon, %*+1*- conducted a study in which they founded that emergence of




information technology has significantly influenced the banking industry. :loyds Bank is among

the few banks that have successfully forecasted and implemented this technology within their

business model, in order to achieve a high level of customer satisfaction and loyalty.

Background of the Stud'

Predominantly, evolution of internet, and the increasing popularity of personal computers

have resulted in the creation of opportunity and challenge at the same time for the banks in

nited =ingdom. Internet baking has e2perienced a rapid growth in only a decade %8anguli, (

9oy, *+11, p. 103-. ccording to a report published by the "tatistics Portal %*+15- the total

percentage of internet banking users in nited =ingdom has raised to 50, which in *+1* was

/+. #he results of the study revealed that the number of people utili7ing internet banking has

been increasing at a steady pace, and it is e2pected to grow in the coming years.9apid growth of internet in recent years provides a clear indication of the high level of

acceptance towards this technology. 'owever, the influence of internet banking on the level of

customer satisfaction, and loyalty in :loyds Bank is e2tremely high. &et not many studies have

studied the correlation between internet banking and customer satisfaction and loyalty.

ccording to %&oon, ( "teege, *+1, 11C- it was concluded that mobile and internet

technologies are changing he behaviour of the customers, which in turn is leading towards the

changes in the banking model. :loyds Bank continuously keeps on developing and amending its

business model, and they e2pect that in past few years some major changes are e2pected to occur

in the payment systems.

Ob8ectives of the Stud'

#he objectives of this study are to determineF




• #o investigate the concept and significance of internet banking and its role in satisfying

customers and improving loyalty.

• #o e2amine the impact of internet banking on customer satisfaction of :loyds Bank.

• #o evaluate the impact of internet banking on customer loyalty of :loyds Bank.

• #o identify a set of recommendations for :loyds Bank for improving customer

satisfaction and loyalty in of internet banking.

Research 9uestions

#he research !uestions that will be addressed in this study areF

• hat is the impact of internet banking on the level of customer satisfaction of :loyds

Bank =W

• hat role has internet banking played in increasing customer loyalty and satisfaction

among the customer of :loyds BankW

•

hat are the strategies that can be induced in in internet banking for improving customer

loyalty and satisfactionW

+ethodolog'

>or this study the researcher will utili7e !uantitative research methodology. It is a

systematic empirical investigation method, which is conducted through the utili7ation statistical

or computational techni!ues. @uantitative research aims to develop and employ various theories,

and mathematical models along with hypothesis pertaining to phenomena %?reswell, *+1, p.

1*5-. #he purpose of this deductive study is to create an enhanced understanding of the impact of

internet banking on customer loyalty and satisfaction. #he researcher will conduct an online




survey of the customers of :loyd Bank in order to determine loyalty and satisfaction in the

conte2t of internet banking.

T%ac+% ask%6:

1- ?heck spelling errors

*- hat is the time scale for doing surveyW

- 'ow to contact the customers of different banks

/- 'ow the survey !uestionnaire designW

5- "ubmit Li&%a&/% R%#i%4 and S/#% 9/%s&i!"ai% by beginning of

December

'ow to measure customer satisfactionW %research the general theory, coule be in

different industry than banking industry- 'ow to measure customer loyaltyW %research the general theory, coule be in

different industry than banking industry-

#hen evaluate the empirical research applying to banking industry %put in

Li&%a&/% %#i%4-

1. ,ontetual Background

#echnological evolution has significantly affected the banking sectors across the globe.

Increasing competition in the banking sector has forced the banks to look for new markets to

enter, which is why financial institutions are increasingly offering e$banking %electronic banking-

products and services %l$"madi, *+1*, p.*3/-. In the banking sector, development of

Information #echnology has resulted in more fle2ible payment options and more accessible and



Banking Development and Poverty1++

user$friendly financial services. Internet or e$banking allows customers to use Internet to access

their accounts and make transactions online, transfer funds, check their account balances even

when banks are closed, pay their bills online, saving time and money %'assanuddin, bdullah,

6ansor and 'assan, *+1*, p.10-. #hey are also able to compare services that different banks

offer %p.10-.

'owever, along with the various benefits that e$banking provides, there are various risks

associated with it, for e2ample, security and privacy issues %Di2it and Datta, *+1+, p.*-. #he

major challenge for banks with respect to internet or e$banking is customer4s acceptance towards

e$banking technology and building their trust towards security and privacy issues associated with

e$banking. )ther issues involve awareness of e$banking technology, products and services,

accessibility i.e. convenience and ease of use, usefulness of technology, stability and !uality of

Internet, etc. %'assanuddin et al., *+1*, p.1-.

n initial review of literature has revealed that there are hardly any studies investigating

consumer acceptance of e$banking technology in the conte2t of the =. #herefore, the aim of

this research is to address this research gap by analysing the level of acceptance of e$banking

technology among consumers in the = banking sector as well as factors enabling and inhibiting

consumer acceptance of e$banking technology.

2. Ob8ectives of the Stud'

• #o study the use of e$banking technology in the =

•#o investigate the factors contributing to consumer acceptance towards e$banking

technology in the =

• #o determine the level of acceptance of e$banking technology among the consumers of

the = banking sector



Banking Development and Poverty1+1

• #o provide recommendations to the banking sector for developing effective strategies to

increase acceptance of e$banking technology among the consumers

3. Research 9uestions

hat are the enablers and inhibitors of consumer acceptance towards e$banking

technologyW

• 'ow do consumers4 perceived usefulness, ease of use and security and privacy affect

their use of e$banking technologyW

• 'ow accepting are the = consumers towards e$banking technologyW

4. +ethodolog'

#his study will take the form of an e2planatory, deductive and !uantitative research based

on the post$positivist paradigm. Primary data for this study will be collected through online

surveys, using close$ended !uestionnaires as the research instrument. "ample si7e will be nG*++

consumers of various banks in the =, selected through non$probability sampling method and

purposive sampling techni!ue. "ample will include consumers of = banks who are over 1C

years of age, are residents of the = and have access to a computer and Internet. Data will be

analysed using "P"" %"tatistical Package for "ocial "cientists-.

&. -heoretical +odel



Banking Development and Poverty1+*

,igure 1$ )echno!og# %cceptance +ode!

Source$ Legris5 (ngha' and Co!!erette 627735 p.1839

#echnology cceptance 6odel will be used as a theoretical and conceptual framework to

analyse how e2ternal variables, i.e. perceived usefulness and perceived ease of use affect the

attitude of consumers towards e$banking technology, how their attitude determines their

behaviour intentions to use e$banking technology and how behavioural intentions in turn

determine the actual use of that technology. #he impact of one additional factor i.e. perceived

security and privacy will be determined on the consumer acceptance of e$banking technology.

6icro$<conomics

9/%s&i!" 1:

#he importance of higher education is very high for any student. #he reason is that higher

education not only provides an opportunity to the student in getting knowledge but also to be in a

position to ac!uire valuable learning. In this way, the student is then able to progress in their

respective field of education and achieve success once their professional career starts. #he

enrolment in higher education has witnessed a strong growth, for instance in sia, over the last

*+ years period %A<"?), *+1/-. #hough, the fundamental !uestion in this regard is whether




the ]Participation in 'igher <ducation isan Investment or a ?onsumption^. #his is an important

!uestion but its answer re!uires critical analysis of several aspects.

In the first case, it is necessary to understand some essential aspects related to higher

education. #here is no doubt that participation in higher education is an investment. #he

reasonsare that from financial point of view, whatever the investment is carried out in education,

for instance, _1++,+++ in bachelorette education; its 9eturn on Investment will be higher. #he

salaries and the overall compensation packages received over the years by the student after

getting a job will certainly help in e2plaining this phenomenon in the best possible way. It is

understandable that the initial pay will not be very high but gradually, depending on the overall

effort of the employee, the salary will increase. #hough, from financial point of view, this

investment is justified. 'owever, it is not just the financial view that matters. #he biggest

investment is the knowledge of the student, overall learning, communication and interpersonal

skills and development of critical thinking ability. ll these elements certainly increase the value

of higher education. 6oreover, there are many other things that the student is able to learn such

as time management skills, decision making skills, personal skills etc. #he participation in the

e2tra$curricular activities can further enhance the overall personality of the student, which is will

not onlybenefit individuals in professional life but also in their personal life.

#he second !uestion that needs to be addressed is that whether the participation in higher

education is a form of consumption. #he participation in higher education can also be considered

as consumption because the student is able to ac!uire several benefits associated with the

investment made in education. It can be said that the investment that has been made, for instance,

the _1++,+++ in bachelorette education has made it possible for the student, in return to obtain all

the important education content along with the overall positive e2perience achieved during the



Banking Development and Poverty1+/

academic life. #hough, it all depends on the student in the end, whether they are able to take

advantage of the investment in higher education or not. >urthermore, it also depends on whether

the students have effectively ac!uired the knowledge and learning. In many cases, students are

only able to ac!uire a degree, but they lack necessary skills and knowledge, which are re!uired

for successful career. In such a situation, theparticipation in higher education is neither

consumption nor an investment.

#he main purpose of education is to ac!uire knowledge. degree without knowledge is

just a piece of paper. lthough gaining high academic credentials and a degree is necessaryfor a

successful career but knowledge and skills are necessary for transforming the overall personality

of the students. 'ence, it can be said that the participation in education is both an investment and

consumption, but it is dependent on the overall skills and competencies demonstrated by the

students. Parents make a lot of sacrifices while providing higher education to their children and

they make very difficult financial decisions in this regard. #herefore, students need to respect

and acknowledge sacrifices of their parents and admire their hard work by taking approaching

higher education not only for the degree but for the actual knowledge and learning.

9/%s&i!" 2:

#his particular !uestion re!uires an analysis by the student regarding his decision related

to ac!uiring a / years$bachelorette degree. #his analysis is crucial for all those studentswho need

to consider whether or not they must go for bachelorette degree. It will also help in determining

the opportunity cost for the student in this regard.In the first case, it is necessary to assess the

6ean <arnings by 'ighest Degree <arned. #he table in this regard is mentioned belowF

Y%as M%a" Ea"i",s '@)

*++5 0,3C+




*++0 03,C1C

*++ +,C3C

*++C *,C0C

*++3 03,/3

"ourceF nited "tates ?ensus Bureau %*+15-

It can be seen from this table that the mean earnings has gone through several variations

over the five years period, from *++5 to *++3.)n the other hand, it is important to determine

theverage )ut$of$Pocket Aet Price of ttendance associated with the total cost of bachelorette

degree. #he table is mentioned below in this regardF

Y%as N%& Pic% ! A&&%"6a"c% '@)*++1 C,C5*

*++* C,C5*

*++ 0,5++

*++/ 0,5++

*++5 0,5++

"ourceF nited "tates ?ensus Bureau%*+15-

fter the illustration of these tables, it is now important to determine the average

financial rate of return associated a /$year bachelorette degree. >irst of all the return values for

both 6ean <arnings and Aet Price of ttendance over the five years period, from *++5 to *++3,

is calculated belowF

Y%a M%a" Ea"i",s N%& Pic% !

A&&%"6a"c%

R%&/"

*++5 0,3C+ C,C5* 1.+*

*++0 03,C1C C,C5* 1*.0C

*++ +,C3C 0,5++ 3.1

*++C *,C0C 0,5++ C.3**++3 03,/3 0,5++ 1+./C


#herefore, the average financial rate of returns4 associated with a / year bachelorette

degree is mentioned with the help of a table belowF




Y%a R%&/"

*++5 1.+*

*++0 1*.0C

*++ 3.1

*++C C.3*

*++3 1+./CT!&a* 1+.C5

"ourceF nited "tates ?ensus Bureau %*+15-

#herefore, the average rate of return associated a /$year bachelorette degree is 1+. #his

has been the overall opportunity cost analysis for the students, who need to decide whether to

obtain a /$years bachelorette degree or not.

9/%s&i!" 3:

#he table below presents the average cost of obtaining a /$year bachelorette degreeF

Y%as T!&a* C!s&s ! 0Y%a

-ac+%*!s( D%,%%1333$*++* C,C5*

*++$*++0 0,5++

*++$*+1+ C.+01

T!&a* ,C+/


#he average cost of /$years bachelorette degree since last 11 years has been _,C+/.

6oreover, the net$present value of the four$year bachelorette degree is calculated in the

following table. In order to simplify the calculation, the four year period on which the net present

value is calculated is *++5$*++3.

Va*/%s 2==< 2== 2== 2==; 2==>

?ash 0,3C+ 03,C1C /C,*50 *,C0C 03,/3




>lows

D>

9ates

G0,3C+E1.+5`1 G03,C1CE1.+5`* G/C,*50E1.+5`

G*,C0CE1.+5`

/

G03,/E1.+5`

5

Discoun

ted ?ash

>lows

%D?>-

0// 0* 01*// 533/3 5//3


Aet Present HalueG Discounted ?ash >lows$ Initial Investment

Aet Present HalueG _+,+1$_C,C5*

Aet Present HalueG _*3/,C/3

#he total Aet Present value that has been calculated is _*3/,C/3. #he assumption used for

this particular calculation was that an investment of _C,C5* made in *++1 for financing of /$

bachelorette degree will result in gaining the mean earnings value from the period between *++5

and *++3. #he net cash inflows will start from the period of graduation when the individual will

be able to get a job during this time. #herefore, the net present value was positive related to the

/$yearbachelorette degree, suggesting that the student can certainly opt for a / year$bachelorette

degree, which will provide him long$term benefits in the form of high amount of earnings.

9/%s&i!" 0:

#he concept of 8iffen goods is very important from the economics point of view. 8iffen

good is considered as a product whose higher price actually causes its demand increase. #his is a

very unusual concept in the field of economics. lfred 6arshall attributed the name 8iffen good

after "cottish economist "ir 9obert 8iffenduring the development of the Principles of



Banking Development and Poverty1+C

<conomics. 6arshall e2plained the conventional principle that when the price of good increases,

the !uantity demanded of that good falls. >or instance, it was pointed out that when an increase

of the price of bread occurs, it leads to a drain of resources for the poor labour families; thus,

makes them to reduce their consumption of meat and many other e2pensive food items. #his also

leads to an increase of marginal utility for them. 'ence, the poor family would depend largely on

bread as it still remains the cheapest of the food items. #his helps in e2plaining the overall

significance of the 8iffen good because the consumer tries to purchase cheap item because they

cannot afford to purchase substitute products %?onversable <conomist, *+1*-.

#he important logic, which "ir 9obert 8iffendescribed based on the modern day

conditions that every price change leads to two kinds of effects on the peopleF 1- itcauses them to

switch to other kinds of goods, which are not e2pensive and are affordable. *- It will also

produce a change in the buying power of the income of the people. In majority of the situations,

these two effects try to reinforce each other. #he higher price associated with any particular good

will encourage the user to consume less of that good because it does not have the same price

asbefore. 6oreover, the higher price also causes a reduction in the buying power of the income

of the consumer %?onversable <conomist, *+1*-.

In economics, 8iffengoodsare considered as inferior goods. In order to determine the

price elasticities for these goods, it is vital to first understand the income and substitution effect

for these goods. >or instance, since 8iffengoods are considered as inferior goods, there is an

inverse relationship between real income and the good that is in demand %#ejvan, *+11-. If real

income will decrease, then the demand for the inferior good is going to increase. "ome of the

basic e2amples in this regard will beF




• P!&a&! a"6 S&%ak C!"s/$&i!"F Aormally, people would consume * steaks of price *+

dollar and *+ potatoes of price 1+ dollars in their budget. 'owever, if the price of potato

increases by 1 dollar each, the consumer would still purchase * steaks but could reduce

the potato consumption by 1+ units. 'owever, reduction in potato consumption may

cause insufficient food for the consumer. 'ence, the consumer may choose to decrease

the purchase ofsteaks by 1 unit and increase the purchase of potatoes to *+units once

again.Aow if the prices of potato are increase up to 1.5 dollar, the consumer will further

reduce the consumption of steak to 7ero and consume more units of the potato. 'ence,

potato is a great e2ample of 8iffen good. #his e2ample can be illustrated with the

following graph.

Cas:nother e2ample of 8iffen good is in semi$lu2ury goods like cars. Increase in

income of the consumer cause a perceived decline in the price of cheap car. 'owever,

since the income of the buyer has increased, he would opt for an e2pensive car rather

than the cheap car. 'ence, in this case cheap car is an inferior good not based on its

!uality but rather on the perception and affordability of the consumer.

#herefore, in the end, it can be said that price elasticity of inferior goods is going to have

a negative income elasticity of demand.It can be said that the concept of ]:aw of Demand^ will

not be invalidated with the help of income and substitution effects because the basic principle




related to the affordability of the product will be there. >or instance, the ]:aw of Demand^ states

that when the increase in the price of the product occurs, the !uantity demand decreases, and the

case is opposite during the decrease in price. #hus, in the case of 8iffengoods, the increase in

product demand is highly dependent on the increase in income. #he substitution effect also has

the same impact on the consumption of the product. #he decrease in the price of the substitution

effect will certainly make the consumer to switch to another product. ll these aspects

demonstrate the overall buying behaviour associated with8iffengoods %"ingh, *+1/-.

9/%s&i!" <:

#he risk return trade$off is known as a trade$off in which the investor e2periences

between risk and return during their investment decisions. #he high amount of risk has strong

association with greater probability level of higher return and lower risk has a strong association

with a greater probability level of smaller return. #his whole concept can be best e2plained with

the help of a scenario when an investor is e2periencing a risk return trade off while considering

the decision to invest. nder such a scenario, if the investor is going to deposit all money in a

saving bank account, he is going to earn a very low amount of return, i.e. interest rate being paid

by the bank, but his entire money will be under high insurance protection. )n the other hand, if

the investor is going to make an investment in e!uities, then the risk of losing a big portion of

this capital will be there, but there will also be an opportunity of receiving a much higher return

in comparison with saving the deposit in a bank %Uoe, *+1/-. #he concept of risk return trade$off

can be e2plained with the help of a following diagram as wellF




#hree reasons because of which risk is important in understanding the consumer and

producer decision making areF

i. In the first case, the identification of the risks associated with consumer decision making

will help to eliminate any kind of issue or threats that might hinder the consumer

purchase decision.

ii. In the second case, when the producer will conduct the risk identification assessment, it

will help them to manufacture their products accordingly.

iii. In the third case, the organisation will be able to manage their tasks in accordance with

the overall criteria of the risk defined. hether it will be a project management risk,

financial risk or organisational risks, the organisation is going to be in a good position to

manage them in the best possible way %9eady 9atios, *+1/-.

#he concept of 9isk Premium is even very important for the organisations to understand.

It is also known as market risk premium, which is basically referred as a variance between the

two concepts known as predictable return on a market portfolio and risk$free rate. 6arket

Premium provides an opportunity to the investor in assessing the investments, which are given a

lot of value. #he formula, which is utilised in calculating the 6arket 9isk Premium, isF




+arket Risk Premium : !%ected market return ; Risk<free rate

#his is the reason why it is necessary for the investors to have a strong understanding of

the concepts of 6arket 9isk Premium. hen the demand and supply are in e!uilibrium, there is

no need at all in paying the premium. #hough, if the demand is going to increase, the supply can

also meet the demand and price of the asset. #he difference in the price that occurs is then

referred as 6arket 9isk Premium %9eady 9atios, *+1/-.




CHAPTER 1: INTRODUCTION

1.1 ntroduction

#he tourism industry in outgrown e2tensively serving many small and sub industries

including hotels, logistics, travelling and therefore create many new business opportunities.

ccording to Vhong et.al %*+11, p. /C-, the growth rate of tourism in ?hina has increased after

significant reforms were introduced by the government. fter the emergence of rich middle class

incomes and less restrictions on movement by the 8overnment of ?hina, the travel and tourism

industry has witnessed an unprecedented period of growth. 6oreover, ?hina is one those

countries that has a large outbound and inbound tourist market. ccording to "ala7ar %*+15, p.

C5-, ?hina is regarded as the third most visited region of the world. #he total number of foreign

tourists that came to ?hina in *+1+ was around 50 million. #his resulted in the foreign e2change

income to rise to _/5.3 billion which was also regarded as the fourth largest foreign e2change

income to a specific country. )n the other hand, the total number of local tourist were found out

to be 1.0 billion and resulted in a total income of _.C billion.

s per the survey conducted by #) %orld #rade )rgani7ation-, by *+*+, ?hina would

become the largest tourist destination in the world. ith regards to net outbound travel spending,

the country is assumed to be fastest growing economy of the world and has been able to maintain

the second position in world ranking. It has also been researched that the growing economy of

?hina has resulted in the increase in overall business travel. ith regard to ?hina, the total

percentage of sales based on business travel is more %C- as compared to = %*C- and "

%*1-. 6oreover, as per the report of orld #ravel and #ourism council %*+1-, the tourism

revenue of ?hina in *++3 was _1C5 billion %:ijuan, *+1, p.10-.







1.2 ,ontetual Background

During the era of 13/3 to 135, ?hina only allowed selected foreign visitors to visit

?hina and closed its gate to other foreigners. During 13+, the paramount leader of ?hina, Deng

[iaoping made a decision to promote and encourage tourism for the purpose of earning high$

value foreign e2change. fter this decision, the ?hinese government started developing its

tourism industry. hotel construction program increased the number of guest houses and hotels

in ?hina and more scenic sports and historical places were renovated and were offered to tourists

including professional guides. Due to increase in international and airline traffic including other

tourist transportation facilities assisted travel to be more convenient and less time consuming.

ccording to [ie %*+15, p. 11-, at least *5+ counties and cities were opened up for foreigners

and local tourists during the year 13C+. t that time, travellers were only re!uired to show their

residence permit %for local citi7ens- and valid visas %for foreigners- through which they could

visit at least 1++ nationwide locations in ?hina. During 13C5, appro2imately 1.5 million

foreigners were reported to have arrived in ?hina which resulted in total earning of _1. billion

from tourism sector.

ccording to all et.al, %*+1/, p. 13+-, development of tourism especially in rural areas

has resulted in enormous challenges for the government, particularly related to the issue of

involvement and recognition of local people and other stakeholders of the society. 'eung and

=ucukusta %*+1, p. 1- stated that tourism is mainly dependent on two significant factors i.e. %1-

the local community and its population and %*- tourists and their activities. 6oreover, @in and

6in %*+1*, p. 1**-, conducted a study in identifying the importance of ecotourism based on

community in #hailand. ccording to the researcher, the community people or local people are

the actual stakeholders and are regarded as the heart of tourism management.




#ourism researchers have researched and concluded that local community people usually

accept and support tourism activities only if it provides socio$economic and sociocultural

benefits along with protection of the environment. #hus, in developing tourism, the involvement

of community and local members in the decision making process and its implementation is said

to be critical. ccording to :ijuan %*+1, p. 10-, rural tourism has become important in

developing national tourism policies and has also been highlighted in the ?hina4s #ourism

development and management master plan %13C+$*+++-. s the main focus of the tourist is to

have a friendly e2perience, therefore the locals living around the locality has a strong impact on

the tourist destination. #herefore, the involvement of local and community people towards

tourism development is of utmost important as they act as the main stakeholders and have a

direct impact on the overall !uality being delivered by the tourism industry.

1.3 Research 0ims and Ob8ectives

#he aim of this study is to analyse the impact of culture and history of ?hina in relation

to the benefits of locals in promoting the tourism industry.

1.3.1 Research Objectives

• #o understand how ?hinese culture and history is impacting the tourism in ?hina.

• #o analyse the role played by the government and locals in promotion of cultural tourism

and the overall tourism industry

• #o recommend future initiatives to promote the role of local government in the

promotion of tourism in ?hina




1.4 Research 9uestions

#he research !uestions selected for this research are as followF

1. hat is the relationship between history and culture of ?hina on tourism industryW

*. hat is the role played by government and locals in the promotion of ?hinese tourismW

. hat is the impact of culture and history of ?hina for the benefits of locals in promoting

tourism industryW

/. hat future initiatives can be taken by the government for promoting local government

for increasing tourism activities in ?hinaW

#he research !uestions mentioned above will be used to analyse the research studies. s

the study is based on secondary research, therefore online articles and journals pertaining to the

above research !uestions will be selected.

1.& Rationale of the Stud'

#he tourism industry in ?hina is growing at very high pace. #he revenue that was

generated in *++3 from the tourism industry of ?hina was _1C5 billion %"ala7ar ( Vhang, *+1,

p.C1-. #he total contribution of the tourism industry in total 8DP was *.0 in *+1/, which also

helps in identifying the potential opportunities for local and government with to tourism

promotion. :ocals living in many rural areas earn their living by selling local piece of art,

artefacts etc. %#ao, *+1*, p. 1-. 9eforms carried out in 13+ catered to growing tourism industry

of ?hina. 'otel industry provides many opportunities providing jobs and services.

"ocioeconomic development is induced with increased tourism as government invests more on

heritage and recreational sites %"u, *+11, p. 1//1-. #his on the whole improves the infrastructure

development of the region. rt and culture has been one of the foremost reasons that attract




tourists in ?hina %"ala7ar ( Vhang, *+1; alle, *+1+; Ayri, *+11-. #herefore, the rich culture

and history of ?hina has been one of the important reasons to attract tourists. #here is a need

investigate the relationship between history and culture of ?hina and tourism industry and the

impact it has made on locals of ?hina. nother important reason for conducting this research can

be analysed from the fact that the local people4s involvement in tourism activities has a direct

and positive impact on the overall tourism industry. ccording to 8himire %*+1, p. 1-, tourism

is now considered as the most effective strategies to promote economic development in the

country. It has been researched that tourism develops high employment and also results in high

income. 6oreover Vhong et.al %*+11, p. /5- stated that community based tourism development

generates significant advantages to the local community members of the society.

#he current research has not only focused on the benefits of local towards tourism

promotion but also has focused on the benefits which the local would attain through tourism

activities. #herefore, there is not much discussion on the fact that whether local should be a part

of tourism development or not. 'owever, there is much debate on how the community should be

involved. s local involvement is usually considered as an important factor in achieving success

of development projects, it is now being included in various policies pertaining to government

and A8)4s

1.( Problem Statement

ccording to the authorities of ?hinese 8overnment, the numbers of foreign tourists have

been declining since *++ till *+1/. 'owever, there are number of reasons behind such decline.

#he first reason is the e2change rate fluctuation as the cost of visiting ?hina increases due to

which many potential visitors are visiting other destinations other than china. "econdly, the




economic recession of <urope and merican counties have resulted in less spending in tourism

and travelling industry. #hirdly the old travel route lacks competitiveness and novelty.

6oreover, another big reason for low tourism in ?hina is because of the less investment and

focus of ?hinese authorities towards the promotion of tourism.

>igure 1F Inbound #ourist rrival and 8rowth 9ate

"ourceF www.travelchinaguide.com

)n the whole, ?hinese culture and history has a strong influence in the tourism in ?hina for the

purpose of attracting tourists. #he changing trends in tourism in ?hina has played a vital role

therefore, locals needs to be involved in promotion of cultural tourism and the overall tourism

industry. >or the purpose of channeli7ing and development of cultural tourism, it is important for

the government to induce effective tourism policies. #herefore, this study identifies impact of

culture and history in china and the benefits of locals in promoting tourism

http://www.travelchinaguide.com/

http://www.travelchinaguide.com/



Banking Development and Poverty1*+

1.) Structure of the $issertation

#he structure of study is based on five chapters. >ollowing is the main structure of the

study.

C+a&% 1F #his section is based on introduction to the research including research aims

and objectives, research !uestions, rationale and significance of the research, background of the

study together with problem statement and issue of research.

C+a&% 2F #his chapter of the study will include theoretical underpinning and literature

review based on past studies and researches. It will help in understanding the researches that has

been conducted in the past.

C+a&%3F ?hapter three of the study identifies the research plan and will be based on

research methodology. 9esearch methodology will include research philosophy, research design,

methods of data collection, research approach and nature of the study. >urther, the study will also

incorporate research plan and limitations of research.

C+a&% 0F #he collected data for the research will be analysed in this chapter and the

e2tracted findings from the results will be discussed under the objectives. #his chapter will

evaluate how successful the research has attained its objectives.

C+a&% <F #his section or chapter of the dissertation is based on conclusion and will also

discuss recommendations, future implications and summary of findings.



Banking Development and Poverty1*1

CHAPTER 2: LITERATURE REVIEW

#ourism is one of the most important aspects that influence the economy both directly

and indirectly in most countries. #ravel and tourism has become a strategic industry in ?hina4s

development towards the socialist market economy. ?hina is still penetrating new and better

channels through which the tourism industry can strive in local and international markets

successfully %#ourism 6arket in ?hina, *+1/, p. 5-. ?hina is facing the new opportunities and

challenges for the growth in the tourism market as compared to the opportunities and challenges

they faced decades before.

?hina is one of those regions of the world, which is rich in culture and historical heritage.

People around the world take interest in the historical places, like the >orbidden ?ity, 6ount #ai

and #he great all, to visit. #he locals are interested in cultural and historical heritage of the

?hina as well. #his rising attention in ?hina4s cultural diversity is encouraging an emergent

fragment of tourism industry %alle, *+11, p. 53-.

2.1 ,ulture of ,hina and -ourism

alle %*+11- e2amined the 6arketing <!uitable <thnic ?ultural #ourism in ?hina. In this

study, researcher has focused on the ethnic cultural tourism of ?hina and the market e!uitability

%p. 0-. ith a modest start in 13+, ethnic cultural tourism in ?hina has become an influential

force and governing bodies and private agencies use it to revive economic activity. 'ence, as an

outcome, cultural tourism strategies, planning and encouraging is more considerable than

elsewhere. 'istorically, ample amount of this activity was led through ]micro$marketing^ sights

%alle, *+11, p. 0-. #his notion focuses mainly on the benefits that integrate a company and its



Banking Development and Poverty1**

consumers, whenever they interrelate with each other. blind promotion of this method is that

the wants, desires and vulnerabilities of providers of products and services of cultural tourism

can be ignored. substitute of this ]micro^ outlook is offered by the ]macro$marketing^, a

perspective that is dedicated to probing the overall influence of marketing actions and suggesting

replacements that are impartial and feasible %alle, *+11, p. 0-.

8radually, macro$marketing outlooks are applied when the planning of marketing

strategies are intended. #hese methods have a significant part to perform whenever cultural

tourism approaches are established and e2ecuted. ?hina is a land of an e2tensive range of ethnic

locals and the tourists have been attracted towards them %ang ( all, *++5, p. 3-. 6osou is

one of these localities that have established as a sophisticated cultural development association,

which works to assure that the tourism policies and plans are not controlled merely from top

authorities and that they are e!ual and mirror the needs and desires of the people. #he study

appreciated these efforts as a great corporate strategy and an ethical way that can directly

influence stakeholders %ang ( all, *++5, p. 3-.

#ourism, on a positive note, encourages relations and insights of perspectives between

cultures. )n the other hand, on an adverse note, it is simply a bottleneck between cultures.

nfortunately, it seems like the worst part is common in case of #ibet currently. ccording to a

report ?ulture ?lashF #ourism in #ibet %*+1/, p. */-, #ibet4s mesmerising sites attracted tourists

for centuries. &et today, the actual tradition of #ibet is commerciali7ed and sold by the non$

inherited occupying ?hinese regime. #ibet4s local are no longer in position of taking part in

controlling or even consulting in any manner in their own towns and cities or the renovation of

their holy pilgrimage places into tourist attractions %?ulture ?lashF #ourism in #ibet, *+1/, p.

*/-.




@ingming, 'onggang ( all %*+1*- stated that numerous #ibetan do not even get any

kind of economic advantage from the local tourism. @ingming, 'onggang ( all %*+1*-

notified that, most of the jobs generated by tourism growth go to non$resident employees from

?hina. >urthermore, numerous tourists visiting each year need the e2pansion and advancement in

infrastructure and services on an e2tent that generally foreign or local government ?hinese firms

can fund or invest %@ingming, 'onggang ( all, *+1*, p. *-. #he views seen on the #ibetan

blog and social media sites reveal that several tourists favour ?hinese tourist service providers

and tour guides.

ang and all %*++5- analysed cultural tourismF an assessment of marketing strategies in

Dalian, Aanjing and 'ainan, ?hina. #he essence of the research is that the ?hinese locals have

more chances to travel in big cities arranged by the local travel agencies and the number of

tourists is gradually increasing yearly in ?hina %ang ( all, *++5, p. 3-. ?ultural tourism

theme is evolving the modern tourism in ?hina. #he research employed a modest theoretical

outline to cultural tourism based on high culture, popular culture, festivals and special events.

#he key aim of the research was to analyse the scope of the different cultures and the highlighted

cultural theme in Dalian, Aanjing and 'ainan in perspective of tourism and to assess the

significance of regional culture in tourism marketing %ang ( all, *++5, p. 3-. !uestion

arose by %ang ( all, *++5, p. 3- is ]'ow and what features of culture is being promoted

contrarily in Dalian, Aanjing and 'ainanW^ #he outcomes of the study propose that high culture,

particularly historical inheritance, is substantial in Aanjing tourism, popular culture is vigorous

in tourism within the 'ainan, and festivals and special events are major features in Dalian

tourism %ang ( all, *++5, p. 3-. 9egional culture is e2tremely vital in tourism and is

highlighted and showed by vibrant images of people, events and buildings by words and images



Banking Development and Poverty1*/

for tourism marketing. #hough, it is tough to reach to a conclusion that the prime emphasis of the

trips is undergoing culture %ang ( all, *++5, p. 3-.

hile analysing ?ultural Perspective on ildlife #ourism in ?hina @ingming,

'onggang ( all %*+1*, p. /- stated that ?hina4s residents have a specific opinion concerning

relation of tourists and nature or wildlife. #he ?hinese are intended to think that animals will not

be influenced much in attracting tourist from around the world. 9esearchers debate through

scientific studies that tourism has damaging impacts on wildlife, but ?hinese tourism managers

and the mass media as well, have a perception that being close to wildlife shows a pleasant state

amongst humans and animals %@ingming, 'onggang ( all, *+1*, p. *-.

2.2 *istor' of ,hina and -ourism

"ince the ?hinese history is very rich and very old and dates as back as /++ years.

"hefard, &u and 'imin %*+11, p. 1/- e2amined #ourism, heritage and sacred space in their study.

#hey focused on the influence that tourism has had on localities and the kinds of tourists4 world

heritage prestige appeals. #he study pointed out the outcome that A4s <ducational, "cientific

and ?ultural ssociation world heritage status can direct to spatial conflicts among nations,

which results in division of cultural sites, business events and local life. It also does not include

the fact that most of the tourists that visit these heritage sites are actually local tourists with

religious intents %&an ( 6c=ercher, *+1, p. *+-.

#he result of the study reveals that heritage protection is not the main concern for both

local people and authorities. 'owever, it is the tourists that are concerned about the local heritage

of utai "han. >urthermore, monastic establishments, active monks, and local population are




concerned about money because commerce, religious practice, tourists pilgrims have been part of

the local landscape for centuries %Vhong et al. *+11, p. /5-.

>urthermore, the ?hinese authorities are e2erting to restore this place as an open air

museum for the tourists to e2perience. #hough, it is not the mere issue between heritage and

tourism. 'owever, heritage conservancy conflicts with religious activities and views as well. #he

!uestion arises that can a current religious site be declared as a heritage siteW

&amamura, Vhang ( >ujiki %*++0, p. 11- analysed the social and cultural impact of

tourism development on world heritage sites, particularly the )ld #own of :ijiang, ?hina. #he

study is aimed to clarify the associated social impact on the city caused by being registered as a

orld 'eritage :ocation and its conversion as a tourist destination. s a part of an analysis of

the issue regarding the rapid growth of tourism and its pressure on orld 'eritage Places, this

research tried to elucidate the problems faced by the tourism industry at the )ld #own of :ijiang,

&unnan, ?hina by focusing on local tourism providers %&amamura, Vhang ( >ujiki, *++0, p.

11-. "ala7ar %*+15- revealed that in recent times the usage of historic buildings has significantly

transformed. Aow, over the 3+ of the shops are tourist$based souvenir shops and restaurants.

dditionally, more than 5+ of traders are temporary citi7ens, primarily 'an ?hinese, and a

majority of them rent out accommodations from indigenous proprietors. #hese outcomes e2plain

that the society of local minorities and their culture are !uickly changing as tourism increases

%"ala7ar, *+15, p. C5-.




2.3 -ourism !nvironment of ,hina

2.3.1 Chinese &nviron'ent of ui!ding 6(n Conte:t of the Current ui!ding oo'9

In *1st century, ?hina has taken urbani7ation it to an unparalleled e2tent in human history.

6c=insey 8lobal Institute report indicates that by *+*5, ?hina will have **1, tier * and tier

cities of over one million residents, * of more than 5 million and eight mega cities of 1+

million. )ver the ne2t *+ years, ?hina will build a space e!uivalent of 5+,+++ new skyscrapers

%#ourism 6arket in ?hina, *+1/, p. 5-.

pper class standards in ?hina caused increase in energy demand such as hot water,

lightening, heating and cooling, increased usage of computers, office electronic e!uipment and

appliances. #his means that with the growth in tourism and hospitality sector, ?hinese

government and hospitality industry has to consider these issues for providing better

opportunities to the tourism industry for development with the eco$friendly options

%<nvironmental 6anagement of #ourist 8rowth in ?hina *+11, p. 10-.

2.3.2 asic &nviron'enta! Cha!!enges for the "ospita!it# (ndustr#

?hina4s hospitality industry can anticipate that energy and resources scarcity will

influence the growth policies in hotels and travel and tourism sector. 'otel industry have a

chance to react proactively to challenges regarding the environment by managing the demand

and supply re!uirements, ecological building structures, training of employees in green

construction procedures, and technological improvement %"u, *+11, p. 1/C-. #hese sustainable

options can take hospitality on the frontline of ?hina4s current building boom. >ollowing are the

key issues that have concerned the tourism and the hospitality industry of ?hinaF




*..*.1 ater "carcity

?hina possesses nearly *+ of world4s population, while it has merely of the world4s

water resources. 10 of the ?hinese water resources are devoted to the construction sector.

"tandard ways for saving the water can be attained by a reformed water distribution systems,

effective observing and monitoring, water metering and visible efforts of spreading awareness in

citi7en %@i, [uegang ( [iaodong, *+1/, p. 55-.

*..*.* Indoor ir @uality 6anagement

)ne of the key distractions for the tourists in ?hina is the poor !uality of indoor air

!uality. "9" declare ?hina the epicentre or environmental diseases in mid *+++s, a negative

image, which the country tried to manage %8himire, *+1, p. 1-. substantial drawback for the

hospitality sector is conse!uently the poor air purity provision %<nvironmental 6anagement of

#ourist 8rowth in ?hina *+11, p. 13-.

2.4 -ourism ndustr' and benefits for =ocals

?hi$:yi, 9ong and @inbin %*++- analysed ?hina4s International #ourism under

<conomic #ransitionF Aational #rends and 9egional Disparities and analysed the domestic trends

of ?hina4s international tourism from 13C*. It also e2amines the variations in local ine!ualities

since 1335. #hough, the e2ploration of trends proposes that International tourism in ?hina is

e2pected to keep growth with the substantial pace, the study of local disparities focused on 8ini

inde2 specifies that the regional discrimination in international visitors and revenue has e2posed

a descending trend as of 1335. )utcomes of this research proposed that economic



Banking Development and Poverty1*C

transformations of ?hina has encouraged the development in global tourism and the influence of

international tourism on the economic and business development.

:ocal market is also growing with the growth of tourism industry on the international

level. ith developments, the opportunities for local residents of ?hina for employment are

getting higher. "imilarly, the local business community is getting more chances for the growth as

well as more opportunities are now available to them. #he recreational activities for the localities

are promoting by these e2pansions as well. ccording to ?hina hotel market overview %*+1/-,

the local sector has made a huge progress amid regional ?hinese tourists. >or e2ample, S8olden

eekS is a seven day national holiday attracting many tourists each year which creates business

opportunities or the locals.

2.0.1 )rends in "ospita!it# and )ouris' +aret in China

#here are five core trends in the hospitality and tourism market in ?hina which create

opportunities for ?hinese locals in terms of business opportunitiesF

*./.1.1 Development will Diversify in 6ultiple Business "egments

#here are many other sectors that are associated with tourism industry and will e2pand up

to ne2t decade. #he changing trends in this industry reveal that many business small business

opportunities have opened their doors for middle class as well.

*./.1.* ?onsolidation in 'igh and 6id$"cale Divisions

During the past few years, significant amount of investment has occurred in many sectors

of hospitality industry but the past few decades were accompanied by dominance of higher

income group in the business activities but the current trends and business opportunities have




opened doors for middle class in terms of growth %?hina4s hospitality industry$9ooms for growth

*+1, p. *-.

*./.1. ?hange in the :ifestyle

Developing economy of ?hina has created a huge mid$class which is seeking the higher

!uality of lifestyle services. #he percentage of tourism carries out for recreation raised from +

to /0 from 1333 to *+1+ and the trend is predicted to sustain in future %?hina4s hospitality

industry$9ooms for growth *+1, p. /-.

*./.1./ Innovations in 6odels and >ormats

#o catch with the rising demand of recreational travellers, major hospitality business

chains like "tarwood and 6ariott and bouti!ues and ?lub 6ed and Banyan #ree are e2panding

their recreational resorts footsteps all over ?hina. #he trend is not restricted to high$end

lodgings, local budgets operatives, but on the other hand touches high$class accommodation

including resorts, lu2ury facilities, complete tourist packages etc. %?hina4s hospitality industry$

9ooms for growth *+1, p. 0-.

*./.1.5 ?ontinuous "haping of the 6arket by 8overnment

>ive year plan for ?hina identifies the tourism as the core growth area to gain an

advantage for improving economic and social growth. 6any provincial government authorities

plan to further promote tourism by encouraging in direct investment in tourism real estate and

tourism industry %?hina4s hospitality industry$9ooms for growth *+1, p. -.




2.0.2 Loca! )ouris' and &vo!ving usiness Opportunities

s defined in the <nvironmental 6anagement of #ourist 8rowth in ?hina %*+11, p. -,

the advantages for the local tourism business agencies and recreational travellers are as followsF

• Increase in demand of ?hinese vehicles and earnings of ?hinese locals raise opportunities

for rich logistics and transportation sector in the hotel industry as an advantage for hotel

chains.

• :ocal tourism in ?hina follows many new trends including adventure tourism that

provide opportunities to those living far away from urban region. adventure venues I

?hina are usually located in the suburbs or rural areas and the tourism, therefore provides

many small businesses and professions like travel guides, accommodation in form of

small motels and hotel, lodging services to the tourists. #he average percentage of profits

in budget hotels in ?hina is around + to /+ today.

• 9ecreational resorts generally associated with the activities like scuba diving, growing in

southern ?hina in terms of popularity. 'ainan4s five$star hotels, ?hina4s e!uivalent to

'awaii, provide mostly to rich tourists of ?hina.

• #echnology has opened doors for many online businesses as it promotes online booking

and travel plan for new destinations to be e2plored. 6oreover, technology has also

improved many areas of tourism like construction, interior of the restaurants and hotels,

interaction and modes of interaction with the user and safety ( security for the tourist.

ll these areas open opportunities for the locals to invest in the tourism sector.

By the above discussion, it is revealed by the study that the rising opportunities for locals

in the tourism market in ?hina. s the development in tourism and hospitality industry is

progressing, the opportunities lies within multiple sectors and new sectors emerge for the




advancements and growth of locals in terms of business. 6oreover, it is also adding to the

facilities for easing and comforting the lives of the societies. Aot only for the business

community but the individuals will be benefited by these opportunities as the rising business in

tourism industry will raise the rate of employment opportunities for the residents.

2.& "overnment6s Role in Promoting -ourism in ,hina

#he notion of policy has been reflected in various manners. 8lobal business corporations

bring their competencies and e2ertions to the ?hina4s sustainability efforts towards the

promotion of tourism.

#he functions of the government for promotion of tourism as described by the ?ameron,

6emon, "immons and >lairweather %*++1- e2plained that at the level of local government, the

role of government officials is to describe the norm of sustainable tourism promotion into

activities. :ocal bodies %District and ?ity ?ouncils- perform two prime operations regarding the

tourismF

2./.1 &nab!ing )ouris' Deve!op'ent

1. ssist economic growth initiatives, like financing for local #ourism agencies, carry out

and improve business viability analysis.

*. "upport development of local recreational activities and destinations, like as 7oos, art

galleries, parks and reserves that contribute to the historical picture of ?hina.

. Indorse events like traditional or sporting carnivals for attracting more tourist and

]branding ?hina^ as a sustainable option or tourism.




2./.2 +anaging egative Socia! and &nviron'enta! (nf!uences

1. ?ontrol tourism progress; for instance, standardi7e environment, health and safety

measures.

*. Planning facilities like transportation systems, wastage management, and sewerage or

drainage.

. )bserve tourism growth and trends like feedback surveys from visitors and ecological

look after.

2./.3 ;overn'ent (nitiatives in Pro'oting )ouris' in China

;overn'ent to ;overn'ent (nitiatives$ these involve voluntarily promotion, market

centred prospects to energy efficacy in building sectors. "$?hina ecological construction

sponsored by "$ID and shared venture the 9BA hotel groups to develop the green

environment friendly hotel in ?hina are its e2ample %#ourism 6arket in ?hina, *+1/, p. 5-.

Scientific &:pertise$ ?hina energy group at " department of <nergy4s :awrence Berkely

Aational lab led an analytical research on ?hinese building energy and supports the ?hinese

government in developing technical standards for governing building energy use %Ayri, *+11, p.

05-.

;!oba! %!!iances Partnerships$ the alliance initiated and applied several programs such as

8lobal ?limate and <nergy Policy, ?linton ?limate Initiative, the <nergy >oundation, ?hina

Business ?ouncil for "ustainable Development, ?hina cademy of Building 9esearch %?hen,

:ehto ( ?ai, *+1, p. *C/-.

Research and )hin<)ans$ #he world resources institute assists the "$?hina clean

energy research centre for developing and building energy efficiency improvements. #he ?hina




building program and ?hina sustainable energy program widely contributes and supports for the

development of sustainable building sectors %'eung ( =ucukusta, *+1, p. /0-.

China ;reen ui!ding Counci!$ ?8B? gets assistance from " 8reen Building ?ouncil,

the " Department of <nergy and its founders and members. ?8B? issues an annual 8reen

Building 9eport and has helped in organi7ing the si2th annual international building energy

efficiency and 8reen Building "ymposium hosted in Beijing %<nvironmental 6anagement of

#ourist 8rowth in ?hina *+11, p. +-.

2.( -ourism and !conomic $evelo%ment in ,hina

?hina is heading with a long demonstrative economic transformation causing in record

development. During *+++ to *+1+, economy of ?hina got triplicated in si7e, eventually e2iling

Uapan for being the second biggest economy after the nited "tates of the world. 9egardless of

global recession, 8DP of ?hina is e2pected to e2pand at a yearly rate of .3 over the period of

ne2t 1+ years as compare to *.C of ." and 1. of 8ermany. )n the basis of estimations by

both )<?D and the International 6onetary >und %I6>-, ?hina is e2pected to e2ceed the ." in

a few years by *+1, for being the leading economy in the world %9eview of ?hina4s )utbound

#ravel 6arket *+1, p. 15-.

fter the implementation of the open$gate policy in 133+s, ?hina4s international and

national tourism have developed rapidly, causing in its being labelled as one of the country4s

national keystone sectors in *++3. #he growth speed and historical background of ?hina, caused

in a somewhat e2clusive patterns of tourism growth in ?hina. >or instance, contrasting to other

rising countries which depend on international tourism, ?hina4s local tourism surpassed




international tourism and has had the most substantial influence on ?hinese social, economic and

environment aspects within a very short period of time %[o, Vhang and :ew *+1/, p. 11-.

Pedrana %*+1, p. 31- studied local economic development and tourism policies with

respect to sustainability and culture. :ike every economic activity, which affects the growth of an

industry, tourism has to be managed in a certain way and in some particular framework. #he

primary part that tourism performs in economic development is very significant. Public

organi7ations have to be aware about the dimensions of the areas and attempt to support its

e2pansion and growth %#ourism 6arket in ?hina, *+1/, p. 5-. 'owever, if it is not managed

effectively the local resources may be damaged by tourist. 9egional policies of tourism for

sustainability are crucial for the development and improvement of local areas in future.

8overnment interference has to proclaim developments for the local economic progress,

particularly with respect to sustainability %@i, [uegang ( [iaodong, *+1/, p. 55-.

"onghong %*++*- investigated the economic impact of tourism in ?hina. During the last

few decades, inbound and local tourism have attained sustainable development in ?hina.

#ourism has progressed and its contributions are very considerable towards the economy and

social upgradation. #he contributions are based on direct and indirect rise in production, labour

wages, employment, imports and indirect ta2 etc. Past trends in many researches revealed that

the local tourist spending has a huge influence on economy in terms of overall 8DP of ?hina.

2.=.1 )ouris'>s Contribution to the &cono'ic Deve!op'ent

ccording to ##? #ravel ( #ourism <conomic Impact %*+15-, the direct contribution

of tourism to economic development %i.e. 8DP- shows that internal investment on tourism %i.e.

total spending by the citi7ens and foreigners on tourism- and the government4s spending money




on tourism facilities are directly related to tourist attractions, like cultural heritage sites,

museums or recreational sites like national parks etc. %"ala7ar, *+15, p. C5-

In *+1/ the travel and tourism industry of ?hina contributed directly to the economy up

to *.0 of the total 8DP and it is anticipated to rise by 0. by the end of *+15 and an increase

of 0 annually in direct contribution of tourism industry to 8DP from *+15 to *+*5 %"ala7ar,

*+15, p. C5-. #he total contribution of tourism comprises of e2tensive effects like the secondary

and induced effects on the economy. #he indirect contribution includes, travel and tourism

investment and spending in activities like buying planes and building of new hotels for usage in

tourism, government and tourism sectors shared spending on on larger aspects of the society, like

tourism marketing and promotion, aviation, administrations etc., and domestic procurements of

products and services by the businesses, which are involved in the tourism sector %"ala7ar (

Vhang, *+1, p. C1-. #he total contribution of tourism and travel industry in the 8DP of a

country in *+1/ was 3./ of total 8DP and forecast to increase by .5 in *+15 and 0.* by

*+*5 %"ala7ar, *+15, p. C5-.

2.=.2 ?e# )rends in Outbound )ouris' of China

?hina Aational #ourism dministration %?A#- reported that 'ong =ong is a favourite

site among ?hinese outbound tourists, i.e. *+ of ?hinese citi7en prefer 'ong =ong for tourism,

followed by the #hailand, which is 15 and 6acao, which is at 1+ %[ie, *+15, p. 11-.

'owever, nited "tates and "outh frica are also benefited most in terms of outbound tourism

from ?hina in *+1* %#ourism market in ?hina *+1/, p. 0-.




2.=.3 ?e# )rends in (nbound )ouris' of China

By the end of *+1*, vast number of inbound tourists visited ?hina for recreational

purposes; however, business travellers generally dropped by 1. In terms of regions of inbound

tourism of ?hina, Beijing, "hanghai and 8uang7hou received the most tourists from the world

%#ourism 6arket in ?hina, *+1/, p. 5-. #he popularity of "hen7hen and 8uang7hou can be seen

by their closeness with 'ong =ong. 8uilin also noted the fastest development in international

arrivals throughout the same duration %:ijuan et al. *+1, p. 10-.

2.) ,ommunit' Partici%ation in -ourism $evelo%ment

recent research conducted by "tone and "tone %*+1+, p. 3- lay great emphasi7e on the

significance of local people involvement in developing tourism industry. #he author stated that

the success of tourism is highly dependent on the cooperation and goodwill of the local

community people as they constitute as one of the most important part of tourism. 6oreover, the

author also argues that if tourism planning and development are not aligned with local

capabilities and aspirations, it can damage the potential of the industry. In the end the author

concluded that there are different methods in which local people of a community can be indulged

in tourism activities. #herefore, it is crucial that whether local should be a part of tourism

development or not. 'owever, there is crucial aspect that relates that the community gains an

immense advantage when involved in development process. s local involvement is usually

considered as an important factor in achieving success of development projects, it is now being

included in various policies pertaining to government and A8)4s.

ccording "ebele %*+1+, p. 10-, majority of the organi7ations have focused on attaining

local participation in their specific programs which eventually results in the project being better




and effective. 'owever, in reality there is no single form of local participation, thus the term may

often be used inappropriately. 6urphy %*+1, p. 1+/- asserted that there is an uncritical method

in which local participation is practiced and conceptuali7ed which attains increasing attention.

Different authors have analysed the various methods through which local people and

communities can be incorporated in tourism activities. >or instance <shliki and =aboudi %*+1*,

p. -, made a clear difference between involvement in the benefits of tourism and participation

in decision making process.

6oreover, Pretty %1335- has developed a clearer typology of local participation in

development projects, primarily focusing on the agricultural sector. #his typology was beneficial

in many developmental projects. #his similar concept was later implemented by >rance %133C- to

analyse the conte2t of tourism industry development.




#able 1F )verview typologies of participation

#he above table gives overview of different typologies of community and local

participation. Both the authors have focused on the passive form of participation through which

the community does not have any opinion in the project planning and are also not subjected to

any benefits. #hrough different steps such as consultation and other types of participation, the

highest stage of community participation is regarded as self$mobili7ation. During this phase, the

local communities and local people have fill authority in the decision making process including

its e2ecuting and benefits.

6oreover, there are various constraints to community and local participation in tourism

industry. Beaumont and Dredge %*+1+, p. - stated two different opinions regarding the




difficulties in the involvement of local people in tourism development. #he first opinion revolves

around the fact that all communities are heterogeneous in nature. specific community

incorporates various types of people, usually with different aspirations and une!ual positions.

#his usually results in an une!ual opportunity of community people to involve in tourism

activities. It has also been researched that community members possessing high status have

greater chances to participate and involve in tourism development. 'owever, they would not act

in the best interest of other members of the community %:ee, *+1, p. -. #he major !uestion

remains unaddressed as how and who should be involved in the local community.

)n the other hand, second opinion that was identified by the author revolves around the

fact that different communities usually possess low amount of information, power and resources.

#his often results in difficulties in reaching out the market. #herefore, community is largely

dependent on other various stakeholders, thus making them vulnerable. Based on the research of

"outh frican tourism industry, ang et.al %*+1+, p. 53- highlighted the same opinions as

presented above and in addition of two more constraints of involvement which can be

implemented in multiple settings.

It has also been noted that the local communities do not own the natural resources and

land, thus when these resources are possessed by outsiders, the locals have limited access

provided by the owners. nother major constraint that was identified was that majority of the

poor communities have issues in attracting resources and capital to develop infrastructure and

facilities which are necessary for tourism development.

more in$depth analysis regarding the difficulty of community participation was

presented by "ebele %*+1+, p. 10-. #he author differentiated between three primary categories

of limitations. #he first limitation is categori7ed under operational level. #his involves the



Banking Development and Poverty1/+

centrali7ation of tourism administration which results in high difficulty for the local community

to get involved including lack of coordination because of the fragmented tourism industry. #he

second type of limitation is known as structural limitations in local participation with regards

tourism development. )ne of the categories of structural limitations is the attitude of professional

individuals who are usually not focused on developing negotiation with locals. nother structural

limitation is there is an absence of a specific legal system in majority of the developing countries

in order to safeguard the rights of local people and communities. )ther types of structural

limitations includes; dominance of the elite class in tourism development and lack of financial

and human resources in tourism development.

6oreover, it has also been researched that community participation is time consuming

process and re!uires high amount of cost in the form of investments. #he other constraints as

highlighted by Beaumont and Dredge %*+1+, p. - includes %1- cultural limitations, which focuses

on less awareness of the local community with respect to social culture, %*- Political and %-

<conomic conse!uences of tourism development. Due to these reasons, the benefit of

participation is relatively low. ccording to 6urphy %*+1, p. 1+/-, majority of the individuals in

&ogyakarta, Indonesia did not considered the involvement in tourism planning as a significant

phenomenon.

2.*.1 enefits of !oca! Co''unit# on )ouris' (ndustr#

'owever, there are various advantages and benefits of local community on tourism

industry. )ne of the main focuses of sustainable tourism is that the industry %tourism- considers

the aspirations, views and opinions of the host community. #he support of local community for

tourism promotion and development is important and trustworthy community involvement and



Banking Development and Poverty1/1

participation can improvise the tourist4s e2perience. ccording to "ebele %*+1+, p. 10-, when a

particular community participates in decision making process of tourism development, it

automatically becomes a proactive member and takes special ownership of the particular tourism

development. 6oreover, the economic benefits of tourism industry are constantly being

appreciated by local individuals and local communities. #here are many advantages of tourism

business in developing a valued and respected partner of local economy and communityF

• Positive contributions towards community development assist in improvising relationship

with local communities and simultaneously minimi7e the risk of future conflicts and

issues.

• ?onstant support to community development can improvise reputation and develops

effective publicity.

• Positive contributions to community development can improvise approval from guest and

other individuals who are worried regarding local community welfare.

• )ffers many benefits to local individual including sources of livelihood.

• Improvising economic association with local individuals, communities and businesses

supports the sustainability of tourism industry.



Banking Development and Poverty1/*

2.> -heoretical and ,once%tual #ramework

>igure 1F ?onceptual >ramework

#he above conceptual framework has categori7ed the independent and dependent variable

of the research and also highlights the different factors that have an impact on tourism industry

of ?hina. #he independent variables are classified under %1- ?ommunity involvement in tourism

activities and %*- 9elationship !uality with the stakeholders. #he community involvement

includes different significant factors such as knowledge sharing, empowerment, participation in

decision making and level of knowledge regarding tourism industry. 6oreover, relationship

!uality with stakeholders includes the factors such as trust, commitment and satisfaction. )n the

other hand, the dependent variable of the study is the tourism industry of ?hina which includes

the impact of social, economic, environmental and cultural impacts on tourism.




CHAPTER 3: METHODOLOGY

3.1 ntroduction

#his chapter presents methodological considerations of this study. #he chapter begins

with philosophical assumptions undertaken in this study followed by research approach and

research strategy employed. #his is followed by inclusion and e2clusion criteria used to gather

literature from various electronic databases. #his chapter then continues to e2plain data analysis

techni!ue and sampling for secondary data collection. >inally, the chapter presents ethical

considerations adopted by the researcher of this study and the chapter ends with discussion of

reliability and validity of this study.

3.2 !%istemological ,onsiderations

9esearch is conducted under the aim to gain knowledge therefore it is essential to

establish principles and assumptions regarding acceptable knowledge. #he fundamental parado2

presides in the choice of applying principles and procedures of natural sciences in social

research. <pistemological considerations of a research study deals with these assumptions. #here

are two contradicting schools of thought. >irst known as the positivism epistemological position

assumes and argues that in order for knowledge to be acceptable it must be validated by natural

sciences methods and techni!ues. #hus positivism posits that natural sciences methods are

applicable in social science research. )n the contrary interpretivism school of thought assumes

and argues that there must be a separate research strategy with different principles and methods



Banking Development and Poverty1//

for social research. #his is because the nature and subject matter of social phenomena is different

as compared to the subject matter of natural sciences %Bryman, *+1*, p.*-.

In this study the social phenomena under consideration are history and culture of ?hina

and tourism industry in ?hina. #he aim is to analyse the impact of culture and history of ?hina in

relation to the benefits of locals in promoting the tourism industry. "ince the subject matter of

phenomena under consideration, i.e. relationship between both phenomena to understand impact

of the former on later, is !ualitative in nature upon which methods and techni!ues of natural

sciences are not applicable therefore the underlying epistemological consideration undertaken in

this study is interpretivism.

3.3 Ontological ,onsiderations

)ntological considerations of social research deal with the nature of relationship between

the social phenomena under consideration and related social actors. #he parado2 is whether

social realities are e2ternal to social actors or social realities are social constructions developed

by actions and behaviours of social actors. )bjectivism is an ontological position that states that

social phenomena are e2ternal realities to social actors and they are independent from the

influence of social actors and related meanings. )n the other hand and in contrast to objectivism,

constructionism is an ontological position that states that social phenomena are social

constructions that develop and are in a constant state of change due to the influence of social

actors. "ocial phenomena are no independent from social actors and their related meanings

%"omekh and :ewin, *+11-.

#he social phenomena under consideration of this study are history and culture of ?hina

and tourism industry of ?hina and related social actors are locals and government involved in




cultural tourism industry which include government agencies and authorities and the locals that

reside in cultural tourism locations in ?hina. #he researcher assumes that the relationship

between the social actors and social phenomena is not independent and that social phenomena

under consideration is developed and faces continuous changes in relation to the actions and

behaviour of social actors and their related meaning. #hus, the chosen ontological assumption in

this research is constructionism because it matches the e2isting relationship.

3.4 Research 0%%roach

9esearch approach refers to the way a researcher approaches social phenomena and

determines the scope of the research. Important aspects of research approach are to understand

and make choices about staring from general observations to make specific conclusions or

starting from specific observations and make general conclusions. #here are two types of

research approaches. If the research begins with collection general information and works his

way to make specific observations and conclusions; it is called inductive approach. #his

approach is also known as top$down approach. #his approach is typically used to test e2isting

theories. #he other research approach is called deductive reasoning or deductive approach in

which the researcher begins with making specific observations and works his way to draw

general conclusions. It is also called bottoms$up approach. #his approach is typically used to

develop theories %Pasian, *+15, p.1-.

In this research the aim is to e2plore the impact of culture and history of ?hina on

tourism industry by studying the relationship between the two. #he researcher aims to draw

specific observations by analysing e2isting studies focusing the same and then draw general

conclusions about what e2isting research literature indicates about this relationship. #his implies




that the better research approach for this study between two opposing reasoning is deductive

reasoning or the bottoms$up approach.

3.& Research Strateg' Secondar'

9esearch strategy refers to the choices made by researcher with respect to nature of data

to be collected for the research and the nature of methods and techni!ues to be used in the

research. >undamentally there are two types of research strategies primary and secondary. In

primary research the researcher collects first$hand information by using research instruments or

data collection methods and then applies suitable data analysis techni!ues to derive meaningful

information. In secondary researcher the researcher analyses e2isting research studies and

critically analyses their results and findings to draw results and conclusions for current study.

#he results of secondary research are derived from results of already e2isting studies and thus it

is often and justifiably called review of e2isting literature %Bryman, *+1*, p.1*-.

In this study in order to e2plore the impact of history and culture of ?hina on tourism

industry of ?hinas in relation to benefits of local people the researcher aims to conduct

secondary research. #he researcher chose secondary research because due to limited budget and

time available for this study the researcher cannot afford e2tensive travelling to ?hina and collect

first information from related social actors. #hus the research approach of this study is secondary

research or review of e2isting literature.

3.( Sam%ling Strateg'

#he researcher will use electronic databases to retrieve relevant research studies. #hese

databases are <B"?), "cienceDirect, <merald and Pro!uest. In order to retrieve research articles




keywords and combinations of keywords are searched in the libraries. >or this study the

researcher chose following research keywords selected from research aims and objectives.

Databases

<B"?)

"cienceDirect

<merald

Pro@uest

=eywords

?ulture of ?hina

'istory of ?hina

#ourism industry in ?hina

?ultural #ourism benefits

9elationshipEimpact

hen researcher searched aforementioned keywords in databases the search !ueries

retrieved huge number of articles many of which were not relevant to research aim. Due to

budget and time constraints the researcher decided to filter down research articles on the basis of

following criteriaF

Inclusion ?riteriaF are used to ensure that search !ueries retrieve research articles while

maintaining specificity and sensitivity. "pecificity refers to the ability of search !uery to retrieve

comprehensive results %<mmel, *+1, p.*-. #his means that search !uery retrieves all articles

that have important information for review and ensure that this important information is not

missed. "ensitivity refers to the ability of search !uery to retrieve relevant articles with respect to

the aim of the review. #his is done to make sure that irrelevant information and articles are not

reviewed and presented in results of the review. In order to maintain high level of specificity and

sensitivity in search strategy inclusion criteria are used %=ara, *+15, p.111-. >ollowing inclusion

criteria were used in this research



Banking Development and Poverty1/C

• 9esearch articles published from year *+++ to current year *+15 are included and studies

published prior to *+++ were rejected

• "tudies focusing on impact of history and culture of china on tourism industry of china in

the perspective of benefits to the locals are included in the study

• "tudies in <nglish language are included in this review

• "tudies that are available free of cost are included in this review

fter applying these criteria the researcher was able to filter down huge search results

into viable number of studies while ensuring specificity and sensitivity in the results and findings

of this review.

3.) $ata 0nal'sis techniue? ,ontent 0nal'sis

#here are various !ualitative data analysis techni!ues among which most popular are

thematic analysis, content analysis, and grounded theory. ?ontent analysis is a techni!ue that is

used to analyse certain concepts in a te2t or set of te2ts. It is used for making valid and replicable

inferences from data into their conte2ts. It is a method that enables researchers to evaluate

research findings systematically with respect to the symbolic and actual content of te2ts %9itchie,

Burns, and Palmer, *++5, p.131-. 9itchie, Burns, and Palmer also gave e2ample for content

analysis being used for studying effects of impact on readers4 perception by newspaper coverage.

#hus content analysis is a useful techni!ue to analyse results and findings of research articles to

derive meaningful results for literature review. "ince the aim of this study is to study the impact

of history and culture of china on tourism industry in ?hina therefore the researcher chose to

employ content analysis to evaluate the research articles retrieved from search in the databases

and derive meaningful findings for research.




3.> !thical ,onsideration

<thics in research field, using data, and interpreting results as well as analytical methods

conducted by researchers have gained increasing significance in !ualitative research discourse.

Aovel issue emerge and researchers continuously develop new tools to produce acceptable

knowledge with high reliability and validity. #his means that researchers are increasingly

becoming responsible for knowledge they produce and how they produce it. <thical

considerations refer to principles and moral values that researchers undertake throughout the

research process to show integrity with research community and research participants %6iller,

et.al, *+1*, p.5/-. #here has been a rapid increase in the governance and regulations pertaining to

research ethics and conse!uently it has become highly important for researchers to e2plain and

discuss all ethical considerations that they undertake during their research processes.

In this review in order to show integrity with fellow researchers the foremost ethical

consideration undertaken is paying respect and proper credit to the work of other authors through

'arvard referencing system. sing results and findings of other researchers and presenting as

their own is known as plagiarism which is considered to be a serious academic offense. "ince

this is a literature review therefore referencing is critical to the reliability and validity of the

results and findings of this study. "ince there are no human participants in this study therefore

various other ethical considerations such as no harm principle, confidentiality, and anonymity are

not applicable.




3.@ Reliabilit' and alidit'

9eliability and validity of research is critical aspect to be established by researchers.

9eliability and validity of secondary research are as important as they are in primary research

studies therefore researchers must discuss and establish these aspects in their results and findings

so that they can justify their research. 9eliability of a !ualitative research can be defined as the

e2tent to which methods and techni!ues applied in the research can be replicated by other

researchers at another point of time. Halidity of the results and findings of a !ualitative research

can be defined as the e2tent to which methods and techni!ues applied by the researcher would

produce similar results if conducted by other researchers at another point of time. #he definitions

show that reliability and validity are highly dependent upon the methods and techni!ues i.e. data

collection methods and data analysis techni!ues applied in the study. #hus they are also highly

dependent upon the ability of the researcher to choose methods and techni!ues %#hyer, *++3,

p.50-.

In this study the reliability of the results and findings can be reflected by the fact that

reviewer has fully defined databases, keywords, and inclusion and e2clusion criteria so that other

researchers can use them to conduct similar methods of data collection or in other words to

retrieve research articles for the literature review. >urthermore, the data analysis techni!ue used

in this review is content analysis which is a well$established techni!ue with e2plicit procedures

that are followed to derive meaningful results. #hus it is assumed that there reasonably high

degree of reliability and validity in the results and findings of this review. 'owever, if keywords,

inclusion criteria, or any other feature is changed then it is highly likely that validity will be

compromised.




3.1A ,onclusion

#his chapter presented philosophical assumptions and concludes that interpretivism is

best epistemological position for this study; in addition this chapter concluded that

constructionism is more suitable ontological position for this study. #he research approach

undertaken by this study is deductive reasoning or top$down approach. #he research strategy

chosen for this study is the secondary research based on review of research articles retrieved

form electronic databases. "earch !ueries, keywords, and inclusion criteria have been fully

e2plained. #he chapter also concluded that most suitable data analysis techni!ue for this review

is content analysis. #he chapter also presented discussion on ethical considerations undertaken

by the researcher and highlighted that 'arvard referencing style has been adopted to reflect

integrity with research community. >inally the chapter presented discussion of validity and

reliability in the results and findings of this review and concluded that there is a fair degree of

reliability and validity.

Task 1

1. Introduction

1.1 Context and Overview of the Company

%areting trends and strategies are increasingly dened by product

innovation and design. -roduct design has been ignored as a ey coponent of

areting strategies' but it has now becoe a critical success factor for any rs

who stand out fro others' even in ties of crisis' owing to their distinction in

design and di*erentiation in areting' rs lie &pple for instance. <esign is the

for characteristics of a product that provides any ind of benet to its users.

(loch' 6055' p. 3=:). "rgani1ations now respond to these changing trends by




investing in design and innovation and areting these aspects of their products

(#uropean >nion' 6057).

Toyota is a ultinational autootive corporation engaged in the production

and sales of vehicles. ?ead@uartered in Toyota' &ichi' Aapan' the copany was

founded in 593= by Biichiro Toyoda and eploys around 370'000 people. &part fro

the autootive business' Toyota %otor !orporation also provides nancial services'

design and sale of houses' biotechnology' robotics' and a nuber of diversied

business activities. The copany is a host of around C00 subsidiaries' including the

well/nown autootive copanies lie LeDus' Scion' <iahatsu' and ?ino. Toyota has

its production facilities in a nuber of countries and eDports its products to over

570 countries around the world (Toyota Global' 605$). The Toyota !orolla is one of

the copact and subcopact category of cars anufactured by Toyota. 2irst

introduced in 59CC' !orolla has been one of the best selling and well/nown cars

worldwide' and has gone through various redesigns in its long lineage. The chosen

product for this study is the 605C Toyota !orolla. The ey rivals of the !orolla series

are the ?onda !ivic and Eissan Sunny odels. Toyota reported an operating incoe

of 6'=$0bn Fens in 605$ (2inancial ?ighlights' 605$).

1.2 Problem Statement

The ob,ect of this study is to understand the evolution of design in the Toyota

!orolla with respect to the changing needs of its aret. 2or this purpose' the

investigation sees to highlight what changes in design and innovation are ade

over the tie' how these changes were received by the custoers' and how it

enabled the product to copete with its copetitors.




1.3 Objectives of the Study

The following ob,ectives are proposed for this study+

• To assess the value and benets derived by the custoers fro Toyota

!orolla

• To investigate the uni@ueness of Toyota !orolla in ter of design and

innovation

• To eDaine the brand appeal of Toyota !orolla in relation to other

copetitors.

2. Corolla’s Benefits & alue !eri"ed #y t$e Customers

2.1 Product escription ! Corolla

& product is an o*ering that satises a need or want. The current odel of

!orolla (605$/5C) addresses the various needs of the consuers and provides new

design solutions' innovation and eciency. &part fro the ainstrea features lie

L#< lights' power irrors' autoatic transission' C/way ad,ustable seat' the new

!orolla provides full ultiedia and audio copatibility through !<' >S'

luetooth' wireless' and other technologies' audio' luetooth' and hands free

controls on steering' 56H power outlet' cup holders' bac caera' cliate control

features' centre console for storage' rear spoiler' reote eyless entry' integrated

caera' button start' #!" drive ode' advanced safety controls' and a host of

other features (Toyota !orolla' 605$). The product presents a uni@ue and elegant

design with plenty of stylistic features and internal controls' coupled with advanced

technology' easy accessibility and navigation. The new 55 th generation !orolla

particularly targets %illennials and iddle/aged groups of people with a sealess




atch of a car with other essential features lie phone and usic' wireless

connectivity and integrated navigation.

Source+ & rief ?istory of The Toyota !orolla (e 2orward' 605$)

2.2 Customer Perception

The success of !orolla can be attributed to Toyota’s approach of custoer/

oriented thining about its products. & successful faily car ust satisfy the

custoers in cofort' feel' and perforance' as eDpressed by one of the chief

engineers involved in the developent of !orolla (e 2orward' 605$). The Bai1en

philosophy of continuous iproveent infors the design and innovation at Toyota'

which helps the stay current and conscious of the prevailing trends' eDpectations'

and deands of consuers.

%oreover' consuers top/rated the brand in its fuel econoy' perceived

@uality' and value in coparison to brands lie 2ord' Tesla' %ercedes' Sabaru'

?onda' and others (Fahoo &utos' 6057). The report eDpressed that consuers are

driven by perception' which is inIuenced by areting' eDperience' edia' and

word of outh. &round =0J of consuers rate design and style as the decisive




factor in their buying decisions' C:J side with technology and innovation' while the

top rated aspects are @uality (90J)' safety (::J)' and perforance (:3J). Halue

and fuel econoy closely follows at :6J and :5J' respectively (rindusescu'

6057).

2.3 Product and Service "alue

The core copetency of Toyota has been its reliable @uality' product benets

with attractive prices copared with the copetitors' which aDii1es the value

for the custoer and puts the brand in a preferred 1one.

ith copetency in @uality and reliability' !orolla has been able to attract

higher perceived value which provides the r leverage on prices against the rivals

because its consuers value it ore than others. hen Toyota and General %otors

produced an identical car in a venture' the one with the !orolla naeplate sold for

K5000 higher than the one with G% naeplate because of the higher perceived

value of Toyota. %any custoers even claied superior @uality in !orolla even

though it was identical with G% (Beegan and hargava' 6055' p. 5=7).

hile Toyota has other luDury brands that focus on @uality in eDchange of

preiu prices' such as LeDus' !orolla en,oys a uni@ue position with its eDcellent

iD of reliability' design and innovation' and features with a coparatively lower

price with respect to both copetitors and its other preiu brands. "nce again'

perceived value and @uality of the copany puts !orolla in a favourable position

(?ill and Aones' 6055' p. ::). t perfectly addresses the consuer needs for a

cofortable' reliable' technologically advanced' safe' and fuel ecient faily car in

an a*ordable and reasonable price. The proinent benets which the evolution of

!orolla now o*ers to the custoers includes latest car technologies' especially' the




ultiedia' connectivity' and phone features' along with increased safety systes'

eco/friendly design' and enhanced autoation and fuel eciency.

3. Corolla’s %niueness in !esign 'lements

3.1 esi#n$ Colour$ and Shape

The evolution of !orolla since its inception to its current odel shows a

transition in design fro sipler to stylistic shape and for The new 605C !orolla

presents a copact' elegant' and aerodynaic design' which is at once stylish and

siple. ith a well/designed curved architecture the eDterior of the car pro,ects an

outloo of a luDury sedan' which is totally copliented by its stylish and spacious

interior with a great deal of IeDibility. The car retains its aerodynaic style and

sooth lines of the eDterior with a Iuid and siple dashboard' which is crafted to

host cutting/edge technology' including' aong other features' the G-S' wireless

connectivity' ultiedia and applications interface' usic and call functions. This

eDterior also iproves eciency and perforance in ters of fuel consuption and

ileage. The design also incorporates : airbags to iprove and ensure safety.

Toyota is also engaged in reducing its carbon footprint and utili1ing the recycled

aterial in its production. These innovative features of the design iproved the

environental eciency of !orolla.




Source+ 605C !orolla (Toyota !orolla' 605$)

3.2 %enefits and &tility for Customers

The new !orolla is available in 50 colours with di*erent odels to suit the

needs of di*erent custoers' odels lie sports' #co plus' base and preiu L#. t

also coes with certain internal custoi1ation features. ts internal space allows

any ad,ustents to ae roo for ore cargo and to accoodate ore people.

The rear seats of 605C !orolla can be copletely folded down to ae roo for a

lifestyle. Liewise' there’s a storage copartent for the front seats' which can be

ad,usted in 7/C di*erent ways. The autoated cliate control syste aintains the

internal environent and variable transission aids the driver in stop and go trac.

The design of the car enables a good degree of ad,ustents and IeDibility.

The shape of its interior also reIects a pleasant view' with ecient ergonoics and

design optii1ation facilitating accessibility and navigation of controls. 2eatures lie

usic and ultiedia integration through >S' !<' 2%' and luetooth are useful

features which are re@uired by any custoers. %oreover' access to aps and




applications also facilitate the driving eDperience' with options lie aing online

and obile reservations' restaurant orders' and aing phone calls to people are

also one of the coonly used features which custoers now re@uire on the ove

and within their cars. acup caera and voice recognition are also soe of the

helpful aids' enhancing the driving eDperience (605C !orolla' 605$).

3.3 'volution of esi#n

The transforation in !orolla’s design reIects the changing consuer

perception of style' which is oulded by social and cultural trends and a gradual

need for transforation. "bserving the local copanies and culture' Toyota

engaged in a nuber of innovations in its design' body style' and integrated

technologically advanced systes and features in its cars to ae its products

conteporary or' better' future (always staying ahead of the tiesM). Such an

approach was an apt identication and fullent of a consuer need (Toyota log'

6053). This evolutionary trend continued to respond to the aret trends and

consuer needs to for !orolla to stay ahead of its rivals.

(. Brand appeal in )elation to t$e Competitors

(.1 Corolla)s %rand *ppeal

ith respect to consuer perception and brand appeal' as discussed earlier'

the !orolla is strongly associated with reliability' @uality' and perceived value. The

case of !orolla and G% illustrated that earlier and it is also supported by consuer

choice survey' and other studies (Beegan and hargava' 6055' p. 5=7N ?ill and

Aones' 6055' p. ::N rindusescu' 6057). !orolla is distinguished for its design and




innovation' cofort' reliability' and value. ts brand appeal with respect to perceived

@uality' fuel eciency' and value is strongest copared with the rivals lie 2ord'

?onda' Sabaru' and !hevrolet (Fahoo &utos' 6053). %oreover' the !orolla en,oys a

favourable consuer perception with connects its reliability with a reasonable price.

?ence' a sense of luDury' elegance' cofort' and @uality coes at a lower price

copared to the copetition. This aes for a powerful cobination that drives the

sales and the overall brand value of !orolla (?ill and Aones' 6055' p. ::).

(.2 Comparison with the Competitors

n ters of innovation and design' the !orolla has iproved uch over the

years and stands in strong rivalry with its copetitors' including even soe

preiu luDury brands with its eDotic outloo. n coparison with %a1da3 GS

sedan' !orolla provides greater interior space and is ore fuel ecient. %oreover'

the %a1da does not o*er the autoatic cliate control and the autoatic

transission control (!HTi/S technology) (%c&leer' 6053). The coparative odels

of 2ord' !hevrolet' and ?onda provide arginally greater horsepower' but it does

not ae a practical di*erence in ters of perforance. 2urtherore' aong these

rivals' !HT is only built/in in the !orolla' which provides better eciency and driving

control (2ord 2leet' 605$). ith respect to price' the coparison between !orolla

and ?onda !ivic shows that the forer is over a K5000 cheaper. The !orolla is ore

spacious' cofortable' and provides value for oney while the ?onda is a little

soother in drive and less noisy (The !ar !onnection' 605$). !opared to ?yundai

#lantra' the new !orolla is @uieter' spacious' and fuel ecient while the #lantra ay

be ore eDotic and stylish (?alvorson' 605$). ?ence' consuers get the value for




oney in !orolla and a lot of useful features' better interior space and ileage'

aing it the preferred faily car or even a luDury sedan.

(.3 Competitive *dvanta#e

The ey advantages the !orolla brand has secured for Toyota over its rivals is

the strong brand appeal and perception in ters of @uality and a*ordability. t has

led to an increase in the perceived value of the brand and has created a positive

iage of the brand as well as the copany. This ipact is deep because the !orolla

is probably the ost popular and one of the best selling cars of any autootive

copanies in its own category. ?ence' the !orolla represents Toyota as such and

adds to the overall value of the copany. !orolla represents a striing evolution of

innovation and design' which are the ey forces that have ept Toyota ahead of its

copetition and appealing to diverse global arets. The new !orolla has liewise

aintained the copany’s reputation for design and innovation' @uality and value.

ith the use of recyclable aterial and ecient design and processes' the new

!orolla is able to live up to the eDpectations without coproising on @uality and

prices. ?ence' Toyota has ac@uired and huge custoer base with this strategy and

has earned custoer loyalty by understanding and eeting their re@uireents.

Toyota now en,oys aret leadership in any regions and has a sustainable brand

nae (Eoo' 6056). The brand value and success of the !orolla has in turn

increased the perceived value of other brands of Toyota as well.




*. Conclusion

The 605C !orolla' or !orolla in general' pro,ects an iproveent in design

and innovation with an e*ective integration of consuer needs and wants. &lthough

the car is surrounded by its rivals with coparable and challenging features and

design' the !orolla’s brand appeal' custoer orientation' cost leadership' reliability'

and overall value provide it an edge over the copetition. Living up to the

eDpectations and adapting to the new technologies has enabled the !orolla to stay

ahead of tie' and it continues to be its ground of distinction and di*erentiation.

The recent focus on fuel ecient and eco/friendly production processes and car

perforance has also iproved the position of Toyota in the aret in ters of cost

reduction' brand perception' and sustainability. %oreover' a potential reains to be

tapped in the eerging arets where the presence of the !orolla is inial or

non/eDistent. The copany could utili1e its process eciency and cost leadership

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