EDITORIAL BOARD - · PDF fileEDITORIAL BOARD Patron-in-Chief Rtn ... Pedagogies of Knowledge Management @ Infosys Dr. Ashish Manohar Urkude 15 ... Ashish Sharma, Dr. Vijay Pithadia

DOMAIN • VOL 1 • ISSUE 1 • JULY-DEC 2008 • 1

E D I T O R I A L B O A R D

Patron-in-ChiefPatron-in-ChiefPatron-in-ChiefPatron-in-ChiefPatron-in-Chief Rtn. PHF.T.S. Natarajan, Chairman, Jansons Foundation

PatronsPatronsPatronsPatronsPatrons Mr. T.N. Kalaimani, Vice Chairman, Jansons Foundation

Mr. T.N. Thirukumar, Vice Chairman, Jansons Foundation

Editors-in-chiefEditors-in-chiefEditors-in-chiefEditors-in-chiefEditors-in-chief Mr. R. Raghavendra Ravi, Dean, Jansons School of Business

Mr. S. Mohan, Dy.Director, Jansons School of Business

Executive EditorExecutive EditorExecutive EditorExecutive EditorExecutive Editor Prof. R. Chandrasekaran, Professor, Jansons School of Business

Advisory CommitteeAdvisory CommitteeAdvisory CommitteeAdvisory CommitteeAdvisory Committee Dr. K.V. Ramanathan, Chairman, University of Washington, USA

Dr. Bradley Barnes, Professor, Leeds University Business School, Leeds UK

Dr. Jay Kandampully, Professor, Ohio State University, U.S.A

Mr. Baskar S. Ayer, Consultant, Mind Scan Marketing, Chennai

Prof. A. Christopher, Vice President, SP Jain Center of Management, Dubai

Mr. S. Ramadoss, Vice President, Titan Industries Ltd., Hosur

Prof. Ashish Sadh, Professor, Indian Institute of Management, Indore

Mr. Sastry Pullela, Vice President, Xinthe Technologies Inc, U.S.A.

Dr. Jayavelu, Professor, IIM, Kozhikode

Mr. Babu Raj V Nair, GM-HR, Eicher Motors India, Indore

Dr. M.G. Sreekumar, Head-Library & Information Center, IIM Kozhikode

Editorial CommitteeEditorial CommitteeEditorial CommitteeEditorial CommitteeEditorial Committee Dr. S. Krishnakumar, Professor, Jansons School of Business

Prof. R. Palaniswamy, Professor, Jansons School of Business

Dr. C. Nateson, Professor, Jansons School of Business

Prof. S. Gnanaharan, Professor, Jansons School of Business

Mr. A.M. Venkatachalam, Chief Librarian, Jansons School of Business

2 • DOMAIN • VOL 1 • ISSUE 1 • JULY-DEC 2008

DOMAIN, the peer-refereed academic and research bi-annual journal of Jansons Schoolof Business features state-of-the-art management techniques, research, theories andapplications. It addresses the broad interests of the management profession, andmaintains an editorial balance of content about research, technique, theory and practice.

DOMAIN is designed to address issues of relevance to scholars as well as practitioners,especially in areas where these two communities intersect. DOMAIN’s international andmulti-disciplinary review team ensures continued standards of excellence in terms ofquality of content and reputation among the academic community. The audience for thisincludes Management practitioners, academicians, executives, business leaders and otherindividuals who seek to further their management skills and practices

What distinguishes DOMAIN is our commitment to publish works that result from therelationship between management theory and management practice in a co-productionmodel of knowledge development. We speak to practitioners at all levels and in all sectors,addressing problems which are of direct relevance to improving the competitive and socialperformance of industry and the effectiveness and quality of services.

Areas of interest to this maiden issue include but are not limited to experiential exercises,cases, problem-based learning sets, and designs. We are also interested in re-design ofthose that may include course innovations, collaborative learning with other businessdisciplines, and ways of learning about management and organizational behavior that haveescaped from orthodox boundaries of definition and publication. We are interested inradical ideas supported by experience and science. In short, we are looking for innovationwith integrity.

It would be difficult to overestimate the impacts of JSB’s leadership over the past manyyears in the field of management education especially in running the world class full timeresidential MBA program that is perceived as one of the best B-Schools in the state. Thebringing of a management journal DOMAIN itself is organized to assure useful responsesto the stakeholders and a forum to connect them all.

JSB Staff members have lent their considerable talents and energies to planning andconstructing appropriate databases, outlining work flow, and taking care of additionalneeds in releasing this journal so that we can devote appropriate time and energy toassuring JSB’s continued high quality.

Prof. R. ChandrasekaranProf. R. ChandrasekaranProf. R. ChandrasekaranProf. R. ChandrasekaranProf. R. ChandrasekaranExecutive Editor

E D I T O R ’ S D E S KE D I T O R ’ S D E S KE D I T O R ’ S D E S KE D I T O R ’ S D E S KE D I T O R ’ S D E S K


. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

TitleTitleTitleTitleTitle Author(s)Author(s)Author(s)Author(s)Author(s) Page No.Page No.Page No.Page No.Page No.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Analysis of Performance Appraisal by Collective Dr. Pratapsinh Chauhan, Prof. D.K. Shah,Action in Indian Sugar Industry Dr. Vijay Pithadia Kidevices Chair 4

A Journey of Charity to Responsibility and Sriram Kannekant, Dr. Muddu Vinay 8Fashion to Profession

Pedagogies of Knowledge Management @ Infosys Dr. Ashish Manohar Urkude 15

Product Recalls : Marketing Failure and Implications Prof. R.K. Gupta 26with Indian examples

Telecom Sector in India - Yesterday and Today Rakesh Kumar Sharma, R.K. Yadav 36

Stress among Bank employees in India Prof. Krishnan Nair 44

Balanced Scorecard - its Manifestations Prof. R.K. Gupta 51

Gender Based Perceptions of Self and Parents on M J Xavier, M Nagarani 58EI and IQ among MBA Students

Knowledge Management in SME's Ankush Sharma 63

Promotion of Brand in Rural Market of India Hitendra Bargal, Ashish Sharma, Dr. Vijay Pithadia 67

Book Reviews 70

CONTENTS

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Analysis of Performance Appraisal byCollective Action in Indian Sugar Industry

Dr. Pratapsinh Chauhan, Director and Professor, Smt. R. D. Gardi Institute of BusinessManagement, Saurashtra University, Prof. D K Shah Dean Faculty of Arts, Saurashtra University,

Dr. Vijay Pithadia Kidevices Chair

AbstractSugar co-operatives dominate the sugar economyemploying about 16,000 crores investment andengaging about 7.5% of the total rural population.This article attempts to elucidate variations in theperformance of sugar co-operatives and suggestsuitable collective action plan

Introduction

The owed goal of Indian Planning Process isnot only the economic development but alsothe rural transformation. The cooperatives

endowed with peoples' participation and govt.support thrive to achieve the basic principle laiddown in the plans. The cooperative agro-processingunit next to textile industry is one of the biggestsectors in India. Of these units, the sugarcooperatives dominate the sugar economy for aquite long time and considered as one of the mosteffective economic domains in developing the totalrural economy.

The sugar industry employed about Rs. 16000crores having a turnover of Rs. 20000 crores. Thetotal cane price paid to the growers was around Rs.12000 crores. The total contribution to central andstate exchequer was to the tune of Rs. 1600crores. Further, it provided direct employment tofive lakh people and indirectly engaged about 45million people in its operation which approximatelycovering 7.5% of the total rural population.Cooperative sector made this gigantic growth aspossible in our country. Out of total 426 factories249 were under the fold of cooperatives, producing57.7% of the total sugar production. The totalcapacity of sugar factories was 86.17 lakh tones asagainst the total industry capacity of 150.87 lakhtones. Thus, to make the sector more vibrant anddynamic one has to synchronize and harmonize theefforts of sugar cooperatives through collectiveaction.

Objective and Hypothesis

The broad objective of the study is to explain thevariations in the performance of sugar cooperativesin terms of procurement of cane, processing andmarketing through collective action. The broadhypothesis of this study was that the collectiveaction problem is not resolved satisfactorily in allthe sugar cooperatives.

Research Modus Operandi

In the study tried to explain involvement of thestakeholders in the three basic functions namely,procurement of cane, processing and marketingthrough collective action process. And concentratesonly on the role of members and employees inthese three functions and tries to explain thevariation by using regression analysis. Theregression model is applied on the spirit of coasetheorem. Even though coarse theorem may not bemuch useful to explain the variations (MancurOlson, 1995), in the absence of standard model wetry to observe the bargaining power of thestakeholders in maximizing the wealth of theinstitutions and in sharing the residual returns. Adiagnostic procedure using T- Test is carried out toidentify the significant variables. As such, therewere 24 variables were identified. To run theregression models, both the explained (Y) andintermediate (Z) variables are generated and theirbrief description is presented in the following

Construction of Explained Variables (Y)

The Explained variables (Y) are constructed asunder:

PROCAP1 (y1)= (sugar x sugar price (sugar p)-totalcost of production)/Capacity

The PROCAP1 is defined as the net income fromthe sale of sugar for per capacity (even though instrict accounting terms it may not true). Higher thePROCAP1 indicates that the mills able to generate


more net income by either increasing its averagesale price or by reducing the cost of production.

PROCAP2 (y2)= (PROCAP1+miscellaneous income)/capacity

It denotes the gross income earned by the millsafter including all the incomes. Increase in thePROCAP2 explains the ability of the mills in sugarsales and byproducts and other incomes.

PROCAP3 (y3)=(PROCAP1+additional financialbenefits provided to the employees (add cap)+canedevelopment expenditure (cdev cap)+additional caneprice (smp -sap)/capacity

PROCAP3 includes net income and the additionalfinancial benefits like, bonus, overtime, retentionallowances, leave salary and any other allowancespaid to the employees. These benefits are providedto increase the productivity of the employees thereby increasing the profitability of the mills. Further,the cane development expenditure covers basicallythe various subsidies and incentives given to themembers for the production of good quality of caneand regular supply of cane.

PROCAP4 (y4)=(PROCAP2+addcap+cdevcap+(canep- smp))/capacity

In the extended model the PROCAP4 is defined, inaddition to PROCAP3, the miscellaneous income isalso added.

PROCAP5 (y5)= PROCAP3+purchase tax (tax cap)

In this model, the purchase tax paid by the millsalso included so as to test the collective actionprocess in the increased value of the dependentvariable.

PROCAP6 (y6)= PROCAP4+taxcap

PROCAP6 is defined in addition to PROCAP4 and thetaxes to find out the collective action process in thegross income with tax paid per capacity.

PROCAP7 (y7) = PROCAP5+depreciation percapacity (dep cap)

In this expanded model, the depreciation percapacity is used to know the variations in theindependent variables along with PROCAP5

Specification of the Models

Two basic models are developed to explain thevariations in (1) net income per capacity and grossincome per capacity. These two basic models werere-estimated taking into account (1) All otherfinancial commitment except the statutory obligationper capacity, (2) Tax per capacity (3) Depreciationper capacity and (4) Interest paid per capacity.Alternative specifications of these features wereadded in stages to the dependent variables. Suchalternative specifications of the model are expectedto capture certain behavioral patterns of interestgroups in the sugar mills. While the left-hand sideof the variable is the net worth of sugar mills to bemaximized, the right hand side of the variablestries to influence their share of the net worth ofthe firms. Given the divergent interest groups inthe sugar mills, it is expected that their relativeinfluence in extracting their share depend on thedistribution of their weights in the factory. In theformulation of the model, we assume that interestgroups are on the left-hand side. The importantinterest groups are employees represented byAddcap, non-managerial labor, members representedby Pwelf and SMP, subsidy for growers, organizationas whole represented by putil.

One of the significant variables in the model is thewelfare benefit enjoyed by the members of sugarmills. Though the cost of this benefit wouldcontribute to the decline in the net income of sugarmills, the regression estimate indicated positivecontribution to the gross income of the sugar mills.One- percent increase in the proportion of peoplebenefited contributes Rs. 792.33 increase in thegross income per capacity of the sugar mills. Thevalue estimated for the second model is lower thanthe value found for model-1 at Rs.847.05

As expected, the additional financial benefits givento the employees reduce the gross income of thesugar mills by Rs.5.88, which is lower thanprevious model estimate at -7.49. It is expectedthat the varietal subsidy would contribute to theincrease in the gross income of the sugar mills interms of early crushing of cane to get high juicecontent. However, sign is contrary to theexpectation. The reason would be that higher areais already covered under early variety and as aresult late crushing takes place by the sugar mills.An increase in the area of early varietal subsidyreduces gross income of sugar mills by Rs. 7.78,

Analysis of Performance Appraisal by Collective Action in Indian Sugar Industry


which is similar to the value found for the model -1 at Rs.7.49. The overall fit of the model isreasonable as 66 percent of variation is explainedby independent variables.

Interpretation for Regression Model

The regression estimates shown in table- 3 showthat of the six independent variables, five variableswere statistically significant from zero. It is seenthat an increase in capacity utilization contributespositively to the increase in the net income of thesugar mills. The coefficient estimate showed thatone- percent increase in the capacity utilizationresults in an increase in net income of the sugarmill by Rs. 1331.67 which greater than the valuefor model -2 and model -1, which statisticallysignificant at 99% level.

The second variable showed that an increase in theproportion of non-managerial employees to themanagerial employees contributed to the reductionin the net income of the sugar mills. While it is notstatistically different from zero, the sign is expectedone. An increase in the proportion of non-managerial employees to the managerial employeesreduces the net income quite large by Rs. 162.42,which is higher than value found for the model -1and model-2. It is expected that an increase in theprice of statutory minimum price would result inthe reduction in the net income of the sugar mills.However, the estimate showed that an increase inthe SMP per ton by one unit brings about anincrease in the gross income per capacity by Rs.694.70, which is much larger than value estimatedfor model- 1, and model -2, which is statisticallyhighly significant. The inference may be drawn thatthe SMP induces farmers to supply good quality ofcane to the mills thereby enabling the mills to gethigh recovery from the cane supply.

Interpretation for Regression Model - 4

The regression estimates shown in table- 4 showthat of the six independent variables, only threevariables were statistically significant from zero. Thevariable the ratio of non-managerial employees tothe total managerial employee emerges with somesignificance though not statistically different fromzero. The variables Addcap and Varcap were notstatistically significant compared to earlier models.It is seen that an increase in capacity utilizationcontributes positively to the increase in the netincome of the sugar mills. The coefficient estimate

showed that one- percent increase in the capacityutilization results in an increase in net income ofthe sugar mill by Rs. 1340.11, which greater thanthe value for earlier models and it was highlystatistically significant at 99 percent level.

The second variable showed that an increase in theproportion of non-managerial employees to themanagerial employees contributed to the reductionin the net income of the sugar mills. While it is notstatistically different from zero, the sign is expectedone. An increase in the proportion of non-managerial employees to the managerial employeesreduces the net income quite large by Rs. 158.17,which is higher lower than value found for themodel 3 but greater than the value for model -1and model-2. It is expected that an increase in theprice of statutory minimum price would result inthe reduction in the net income of the sugar mills.However, the estimate showed that an increase inthe SMP per ton by one unit brings about anincrease in the gross income per capacity by Rs.696.04, which is much larger than value estimatedfor all earlier models, which is statistically highlysignificant. The inference may be drawn that theSMP induces farmers to supply good quality of caneto the mills thereby enabling the mills to get highrecovery from the cane supply.

One of the significant variables in the model is thewelfare benefit enjoyed by the members of sugarmills. Though the cost of this benefit wouldcontribute to the decline in the net income of sugarmills, the regression estimate indicated positivecontribution to the gross income of the sugar mills.One- percent increase in the proportion of peoplebenefited contributes Rs. 705.11 increase in thegross income per capacity of the sugar mills.

The regression estimates shows that of the sixindependent variables, only three variables werestatistically significant from zero. The variable theratio of non-managerial employees to the totalmanagerial employee emerges with somesignificance though not statistically different fromzero. The variables Addcap was not statisticallysignificant and Varcap was emerging significant notstatistically different from zero.

The second variable showed that an increase in theproportion of non-managerial employees to themanagerial employees contributed to the reductionin the net income of the sugar mills. While it is not



statistically different from zero, the sign is expectedone. An increase in the proportion of non-managerial employees to the managerial employeesreduces the net income quite large by Rs. 164.73,which is higher than the value found for theprevious modes.

It is expected that an increase in the price ofstatutory minimum price would result in thereduction in the net income of the sugar mills.However, the estimate showed that an increase inthe SMP per ton by one unit brings about anincrease in the gross income per capacity by Rs.685.33, which is lower, the value estimated for allearlier models, which is statistically highlysignificant. The inference may be drawn that theSMP induces farmers to supply good quality of caneto the mills thereby enabling the mills to get highrecovery from the cane supply.

The regression estimates show that of the sixindependent variables, only three variables werestatistically significant from zero. The variablesAddcap was not statistically significant and Varcapwas emerging significant not statistically differentfrom zero. It is seen that an increase in capacityutilization contributes positively to the increase inthe net income of the sugar mills. The coefficientestimate showed that one- percent increases in thecapacity utilization results in an increase in netincome of the sugar mill by Rs. 1385.31 and it washighly statistically significant at 99 percent level.

The second variable showed that an increase in theproportion of non-managerial employees to themanagerial employees contributed to the reductionin the net income of the sugar mills. While it is notstatistically different from zero, the sign is expectedone. An increase in the proportion of non-managerial employees to the managerial employeesreduces the net income quite large by Rs. 177.80.It is expected that an increase in the price ofstatutory minimum price would result in thereduction in the net income of the sugar mills.However, the estimate showed that an increase inthe SMP per ton by one unit brings about anincrease in the gross income per capacity by Rs.651. 90, which are, lower the value estimated forall earlier models, which is statistically highlysignificant. In the regression model, the coefficientof putil is demur compared to earlier model

Selected Bibliography

Acharyulu, A. V. R. (2000), "New Paradigms forCommons", paper presented in 8th Biennial Conferenceof IASCP, May31-June4, 2000, Indiana University,Bloomington.

Data, S.K., S. Sen and K.B. Gupta (1996)" ContractTheory and Its Application to Sugar Enterprises in India",CMA Research Study, Center for Management inAgriculture, Indian Institute of Management, Ahmedabad.

Data, S.K & K.B. Gupta (1999) "Global Competitiveness& Future of the Indian Sugar Industry," in proceedings ofa seminar on Implication of WTO Agreements: threats orChallenge for Indian Agriculture and Agro-business heldat Indian Institute of Management, Ahmedabad on Aug19, 1999.

Data, Sankar (1996), "Management of Coops: A ThirdSector Perspective", in Rajagopalan, (ed), "RediscoveringCo-operation, Vol-1, IRMA.

Hardin Garrett & John Baden (1977), "ManagingCommon", W. H. Freeman & Co., San Francisco.

Isham, Jonathan & Satu Kahkonen (1999), "InstitutionalDeterminants of the Impact of Community Based WaterServices", Working Paper No-236, Center for InstitutionalReform & the Informal Sector, University of Maryland

Johnson - Jeff Deyton (2000), "Determinants of CollectiveAction on the Local Commons: a Model with evidencefrom Mexico," Journal Development Economics, Vol.62,pp.181-208.

Meinzen - Dick, Ruth et all (1999)," What AffectsOrganization & Collective Action for Managing Resources?Evidence From Canal Irrigation System in India", EPTDDiscussion Paper No 61, International Food PolicyResearch Institute, Washington, D.C.

Milgrom, Paul & John Roberts (1 992), "EconomicOrganization & Management", Prentice Hall, EnglewoodCliffs, New Jersey.

Mueller, D.C. (1989), "Public Choice-II", CambridgeUniversity Press.

Olson, Mancur (1965) "The Logic of Collective Action:Public Goods & the Theory of Groups," Harvard UniversityPress, Cambridge.

Ostrom, Elinor (1993),"Institutional Arrangements and theCommons Dilemma", in Rethinking Institutional Analysis& Development:-Issues, Alternatives, and Choices,"International Center for Self-Governance, San Francisco

Ostrom, V. (et all, 1993)," Rethinking InstitutionalAnalysis and Development:-Issues, Alternatives, andChoices," International Center for Self-Governance, SanFrancisco

Parnell, Edgar (1995), "Reinventing Co-operative:enterprise for the 21st Century", Plunkett Foundation,Oxford

Raju, K. V. (1996),"Dairy Cooperatives & EconomicRationality" in Rajagopalan (ed), "Rediscovering co-operation, Vol. -1, IRMA.

Sandler, Todd (1995),"Collective Action: Theory &Application," The University of Michigan Press



A Journey of Charity to Responsibilityand Fashion to Profession

Sriram Kannekant and Dr. Muddu VinayTata Institute of Fundamental Science, Bombay

Abstract

This paper provides information and emergingtrends of Corporate Social Responsibility (CSR).The CSR concept was started in 20th century inEurope. Early days CSR was based on charity andfashion. End of the 20 the century after entering ofnew millennium the concept totally changed all overthe world. Developing countries like India alsobecoming a good host for CSR initiatives. Thispaper also gives the information about how CSR isbecoming profession by introducing curriculum inmanagement institutions and business schools. TheCSR in the context International, Asia and Countrylevel perspectives also discussed. The whole paperdiscussed in different dimensions like profession,management education, Research etc.

CSR roots

The concept of Corporate Social Responsibilityemerged in early years of 20th century inEuropean countries. After few changes taken

place in post industrial revolution and electronic erathe CSR came in lime line1. Earlier responsibilitypurely based on charity concept and fashion only.There was no element of responsibility in theirsocial initiatives. There was no mandatory incompanies' financial plan. In a year variousoccasions only companies used to take up thesocial initiatives on nominal basis. After the changeof face in countries financial situations allcompanies sensitized about the corporate socialresponsibility. In the United States the CSR conceptgradually developed as a mandatory in allindustries. The US government also provided fewencouragements like tax exemption, givingrecognition to trusts and charities to promote theCSR concept. After 1950 the total world equationshave changed and few countries divided based onUS & USSR. The developing and third worldcountries were needed support from bipolar world.The CSR quickly developed into a morecomprehensive list of actions and responsibilities

and in the end to a complete managementframework on how to manage the expectations ofstakeholder, change and manage the way you dobusiness more responsibly and take care of yourenvironmental impacts2.

What is CSR?

Corporate social responsibility is the continuingcommitment by business to behave ethically andcontribute to economic development while improvingthe quality of life of the workforce and theirfamilies as well as of the local community andsociety at large3. Corporate Social Responsibility(CSR) is a concept whereby organizations considerthe interests of society by taking responsibility forthe impact of their activities on customers,employees, shareholders, communities and theenvironment in all aspects of their operations. Thisobligation is seen to extend beyond the statutoryobligation to comply with legislation and seesorganizations voluntarily taking further steps toimprove the quality of life for employees and theirfamilies as well as for the local community andsociety at large. It is about how companies conducttheir business in a way that is ethical4. Thismeans taking account of their impact socially,environmentally, economically and in terms ofhumanity.

Need of CSR

Corporate Social Responsibility (CSR) is a relativelythe 20th century phenomenon both in socialdevelopment and much more so in corporatebusiness culture. In many ways, CSR advances ascounterculture to the long established idea ofprivate and free enterprise. Free enterprise wassupposed to be very private, to not have to answerto anyone about its business practices and to notbe accountable to society except for fiscal matters.The only accountability was to private shareholdersor institutional investors in the world's financialmarkets. Nevertheless, the increasingly negative andvery pervasive impact of global corporations in all


aspects of social life and in the environment hasbeen the catalyst in the emergence of a diversity ofstakeholders demanding accountability about theimpact of corporate activity in the life of the planetas a whole.

In true democracy, companies cannot ignoresocieties in any of the social spheres where theyinteract. This is because they are formed andmanaged by individual members of society, becausetheir accumulation of capital, is only possible due tothe existence of these societies, which constitutetheir markets, and, especially, because theiractivities have a tridimensional impact on societiesand their habitat. The most distinctive feature ofthe concept of CSR, that every private enterprisehas a legitimate diversity of stakeholders, is instark contrast with the traditional private sectorposition of considering shareholders their onlystakeholders.

In CSR, the stakeholders represent the differentinterests groups of society where corporationsoperate, be they workers, consumers, social justiceNGOs, environmentalists, indigenous groups and soon, all with a legitimate right to demand sociallyresponsible corporate behavior. Therefore, thestakeholders are all the members belonging to thecorporation's social environs, which contribute to, orare encroached by, the corporation's activity. In thisway, Corporate Social Responsibility is the inherentobligation of each business entity to account for theway its activity impacts the economic, social andenvironmental dimensions of its environs and toensure that this impact generates equitable andsustainable benefits -and no harm- to allstakeholders involved

Approaches to CSR

An approach for CSR that is becoming more widelyaccepted is community-based development projects,such as the international organizations' involvement.These organizations have set up many livelihoodcenters to help educate the community's children,as well as develop new skills for the adults. Andother international funding organizations, which aresupported, by Multi National Companies (MNC) andother industries are providing support toestablishment of education facilities, as well as HIV/AIDS education programs. The majority of theseCSR projects are established in Asia and Africa. Amore common approach of CSR is through thegiving of aid to local organizations and poor

communities in developing countries. Someorganizations do not like this approach as it doesnot help build on the skills of the local people,whereas community-based development generallyleads to more sustainable development.

Various definitions of CSR

The Corporate Social Responsibility (CSR) is anupcoming trend in corporate arena. There is as yet,no widely agreed definition of CSR. In normalcontext CSR is a company's commitment tooperating in an economically, socially andenvironmentally sustainable manner whilst balancingthe interests of stakeholders and targeted people.Even though there is no universally accepteddefinition of CSR but few companies givenappropriate definitions they are; corporate socialresponsibility is undertaking the role of "corporatecitizenship" and ensuring the business values andbehavior is aligned to balance between improvingand developing the wealth of the business, with theintention to improve society, people and the planet.

Corporate social responsibility is the commitment ofbusinesses to contribute to sustainable economicdevelopment by working with employees, theirfamilies, the local community and society at largeto improve their lives in ways that are good forbusiness and for development.

There is one and only one social responsibility ofbusiness-to use its resources and engage inactivities designed to increase its profits so long asit stays within the rules of the game, which is tosay, engages in open and free competition withoutdeception or fraud. Corporate Responsibility is aboutensuring that organizations manage their businessesto make a positive impact on society and theenvironment whilst maximizing value for theirshareholders.

Difference between Social Responsibility andCorporate Social Responsibility

There is no much difference in social responsibilityand corporate social responsibility. The primaryobjective of these two is same i.e. helping thesociety in different modes. The term socialresponsibility will applicable to individuals (citizens).As a citizen they have to perform fewresponsibilities be as an ideal citizen. That is alsocomes under responsibility. The same thing comesinto the company context its become corporatesocial responsibility. The way of serving the

A Journey of Charity to Responsibility and Fashion to Profession


community helping the poor is different from eachother. CSR since then has grown continuously intoa-must-have for organizations around the globe. Nomatter whether they have a complete managementframework for CSR in place or a policy of somekind, CSR is different from one company to theother and needs to be a tailored approach tomanaging the responsibility within our society ofthis particular organization. There are obviouslygood and bad examples in the world but overallone can say that CSR been promoting responsiblesocial practice in the world. And this is a goodthing.

CSR: International Context

In the post globalization scenario the CSR concepthas been changed and emerged rapidly in all overthe world. The bilateral and multilateral financialinstitutions like World Bank, Asian DevelopmentBank, International Monitory Fund, DFID andUNICEF etc… are entered into developing countriesto initiate the social development activities. Theseinstitutions are providing the financial supportthrough grants and loans basis. Simultaneouslyforeign MNCs are also coming forward to set uptheir industries and CSR units. The term CSR wasin common use in the early 1970s (althoughseldom abbreviated), and the term "stakeholders"was used to describe corporate owners beyondshareholders at least as long ago as 19899. Moregenerally, the social/environmental report is asecond-phase report and the third phase of CSRreports is by far the most interesting for reasonsthat we shall suggest. The first phase of CSRreporting was composed of advertisements andannual-report sections in the 1970s and 1980s thatpaid homage to the environment the way a personmight throw a coin into a fountain along with awish. The reports were not linked to corporateperformance10.

Asian Context

Asia is one of the big pockets to do potential socialdevelopmental activities through Corporate SocialResponsibility activities. According to CSR Asia asthe leading provider of information, training,research and consultancy services on sustainablebusiness practices in Asia, few key things have toaddress still. They are; Potential promotion of CSRin the Asia Pacific Region on development issuespecific. Lack of guidance and support services CSRactivities are not taking place satisfactorily. Themajor drawback in Asia's CSR is there is no

network kind of initiative in the region. Due to thisdeficiency there is much duplication in many CSRinitiatives in Asia region. CSR in Asian perspectiveis not professional due to lack coordination betweenthe companies. The business competition of twocompanies is showing impact on their CSR units. Inthe Asia-Pacific context, it would be wrong toassume that all CSR practices are developed thanin the West. Nevertheless at CSR Asia we haveidentified a significant need for knowledge and skillsdevelopment and broader capacity building.However, we can believe the emphasis at presenthas to be on the need for more knowledge,education and training in the region. Starting withan awareness of the issues, moving on todeveloping strategies for stakeholder dialogue andthen implementing and evaluating CSR initiativesare all areas in need of much more attention.Clarity regarding the costs and benefits of CSR isclearly needed.

Indian Context

CSR is a globally applicable concept but itsinterpretation will vary from country to country,industry to industry and company to companybecause of differing local situations and differingdemands of stakeholders in different locations andindustries. It is clear that for many people CSR isvery much part of a Western agenda item. In thepost liberalization scenario India is emerging as aneconomic super power in the third world. After theending of 10th five year plan the growth rate is 8.5to 9 percent 11. This is a significant change incountry's economic scenario. Many companies havestarted their operations from India. All top 10012companies have set up their units. Simultaneouslytheir CSR initiatives also have been taken up. Inthe recent trend top 10 public sector undertakingsalso started their CSR activities in the country. Thisis an indication of strengthening of PSUs in postglobalization.

To learn the full impact of the standards in the CSRFrame of Reference for India based companies ingeneral, it was necessary to look at companies ofdifferent sizes, business sectors and with differenttype of activities. These companies either had directCSR activities in India, by means of a subsidiary,joint venture or partner, or had an indirect link withIndia by means of a supply chain or investments.The group of 40 companies operated in differentbusiness sectors, among others agriculture, energy,ICT, automobile industry, tourism, financial services,



leather and chemicals. These companies were askedabout their CSR performance with respect to thesocial, environmental, economic and operationalprinciples incorporated in the CSR Frame ofReference. 13

CSR in Management Education Institutions

After entering into the new millennium drasticchanges have taken place in corporate sector. Thatimpact resulted in their CSR initiatives towardstargeted goals. The United Nations (UN) formulatedMillennium Development Goals14 (MDGs). Thesegoals have provided new dimension to developmentsector. The community priority areas have givennew indication to focus the issues. After MDGsformulation all MNCs and other industries arestarted their CSR activities on large basis. Manytrusts and foundation came into force on behalf ofinstitutions. Then the charity became theresponsibility and the fashion changed to profession.

Whenever the CSR started on big basis there is alot of requirement of qualified professionals. Theseprofessionals need to mould from managementinstitutions particularly from Business Schools. Nowthese days many institutions or business schoolshave started CSR focused curriculum. Thecurriculum designing and teaching again become anew task. In these situations CSR curriculumneeded much focused. Moreover many managementeducation institutions started their own CSR units orfoundations.

Curriculum

The CSR curriculum is designed in different ways ineach institution. The programme may consist ofclassroom work, which includes lectures,discussions, student presentations, seminardiscussions with subject matter specialists,observation study of social and relatedorganizations, etc., Concurrent and block field workunder supervision provides opportunities to developpractical skills in corporate social responsibility.Thus, at the end of the two years, the MBA inManagement with CSR specialization will be armedwith a range of competencies to work in the fieldsof social work, social welfare and socialdevelopment processes in corporate companiesinitiatives The nature of work covers a continuum ofinterventions from service delivery to organizingpeople for change to program development andinfluencing policy.

CSR Practices

In a developing country like India the governmentand Non government (including CSR) activists areimplementing in all over the country. However thegovernment is the major service provider incarrying out development activities. Less than10%15 activities of social development activities areperforming by the NGOs/CSRs in governmentdevelopment work16. The implementation partbecomes a practice in CSR units. If say broadly wecan define the development activities likeCommunity issues cover a broad range of activities,including community assistance programs;supporting educational needs; fostering a sharedvision of a corporation's role in the community;ensuring community health and safety; sponsorship;enabling employees to do voluntary work in thecommunity; philanthropic giving etc…. There is agrowing belief that MBAs are well placed to manageeffectively and to lead corporations today. They arediscerned to bring not only expertise in traditionalmanagement and financial skills to their employers,but also a sensitivity to all forms of CSR and theways in which corporations need to interact withgovernments. European business schools areactively taking a lead in fostering good CSRmanagement practices.

The CSR as a legal entity Governments haveresponded by spearheading the implementation ofbinding legal requirements relating to CSR in locallaws. U.S. Congress recently enacted legislationmandating CSR systems within public corporations,with increased disclosure requirements and penaltiesfor malpractice by corporate officers. The EuropeanCommission has been slower to respond. The EChas issued a Green Paper on CSR and has createda European Multi-Stakeholder Forum on the topic,though legislation has yet to result. It is apparentthat in today's business practice, CSR is entwinedin many multinational organizations strategicplanning process. The reasons or drive behind socialresponsibility towards human and environmentalresponsibility is still questionable whether based ongenuine interest or have underlining ulteriormotives. Corporations are fundamentally entitiesthat are responsible for generating a product and orservice to gain profits to satisfy shareholders.However a business still comprises people thoseposses both the humanistic and naturalistic viewpoints. The humanistic view is that a deterioratingenvironment and planet is of no relevance in



sustaining human life let alone a business. There ishighly visible change in behaviour among corporatestakeholders as a result of high publicity onenvironmental and human right movements inpresent times. With global warming, and corporatebehaviour so publicly available to broadcast, thereappears to be a trend in social behaviour slowlychanging from an individualistic mindset to a moreholistic and collective reasoning. The Kyoto Protocolis an example of societies coming together andseeing the need for change on a global level.

Need of CSR curriculum and research inBusiness Schools

Introducing corporate social responsibility activity wecan broadly divided into two dimensions in businessschool, they are; i) theory and ii) practice. In firsttype at business school level conducting classes,offering electives as compulsory and optionalsubjects. Initially the CSR focus will be started withunderstanding society social work, social welfare.Community Development, Planning etc…In thesecond type few activities can be taken up likeinvolvement of students in various kinds ofdevelopment activities, organizing events like blooddonation camps and other related activities17.

In the end of the semester -III students can betaken up the block placement in any rural or urbanlocality. It will give an exposure about how to workand mingle with community in developmentprocess. Few students can be engaged any NGO asshort term intern to learn NGO working style anddynamics. The Corporate Social Responsibilityactivity may lead to pioneer in helping marginalizedand under privileged sections of people. Till nowthe social work education and practice and has overthe years responded to the needs of the poor. Thesocial work curriculum has been dynamic andchanging with the emerging concerns in the era ofglobalization.

The MBA curriculum in business schools need to beredesigned to equip the management students withsound theoretical knowledge about social work,social welfare and development concerns of thepoor, and help the students to develop skills andinsights into working with people at the individual,group and community levels, and theirrepresentatives, and network with other groups andprofessionals working on similar issues. Theelectives include: Business Law, Corporate FinancialManagement, Corporate Reputation andCompetitiveness, Corporate Social Responsibility andBusiness Ethics may be taught in business schools.

The scale and nature of the benefits of CSR for anorganization can vary depending on the nature ofthe enterprise, and are difficult to quantify, thoughthere is a large body of literature exhortingbusiness to adopt measures beyond financial ones(e.g., Deming's Fourteen Points, balancedscorecards). Orlizty, Schmidt, and Rynes[10] founda correlation between social/environmentalperformance and financial performance. However,businesses may not be looking at short-run financialreturns when developing their CSR strategy.

The definition of CSR used within an organizationcan vary from the strict "stakeholder impacts"definition used by many CSR advocates and willoften include charitable efforts and volunteering.CSR may be based within the human resources,business development or public relationsdepartments of an organization[11], or may begiven a separate unit reporting to the CEO or insome cases directly to the board. Some companiesmay implement CSR-type values without a clearlydefined team or programme.

The business case for CSR within a company willlikely rest on one or more of these arguments:

There is a lot scope in business schools to initiateinnovative teaching methods and research works.Many international organizations and fewgovernment welfare departments are offeringresearch projects on development of community.Based on research findings only the Governmentand international organizations are providing fundingor support to implement various programs at grassroot level.

Protection of Environment and prevention of HIV/AIDS are present burring issues. Majority of thefunding agencies are focusing on these two issuesonly. There is a big scope to do research in HIVepidemic. Frequent surveys, social dynamics andlatest findings are changing the dynamics inimplementation strategy. In the context ofglobalization the Corporate Social Responsibilityturned as fashion to profession. Whenever it istreating as profession automatically it will comeunder management course. So there is a need ofinvolvement of management institutes especiallybusiness schools to make good corporate socialresponsibility managers in future.

CSR as mandate for MBAs

The CSR curriculum as mandate in MBA course willlead to a positive impact in corporate sector in a



long run. Due lack of efficiency many companieslost their image and moreover targeted communitywas neglected. There have been a great manyinstances of poor corporate social responsibility(CSR) in recent years in businesses around theworld. The most widely reported cases have beenthe World Com and Enron collapses18. Directors ofpublic companies were actively hiding losses inoffshore accounts to boost their reportedprofitability19. The Geneva InternationalOrganizations MBA programme specializes in CSR,providing an opportunity for students to integratetheir MBA studies with internships in internationalgovernmental and non-governmental organizationsin Geneva. To address this public demand forgreater accountability, many corporations,particularly those with famous brands, have adoptedvoluntary codes of conduct.

Emergence and Future of CSR

Now a day many of the national and multinationalcorporate companies are imitating some socialdevelopment activities in different ways. Almost allcorporate companies have started their separatewings to perform their 'Corporate SocialResponsibility (CSR)' activities. They are engagingseparate professionals from development sector andNGOs to do some sort of social activity on behalf ofrespective company. Few companies have started inthe name of the foundation to identify theircompany's name also. Many CSR activities areperforming in collaboration with local level actiongroups, Non - Governmental Organizations (NGOs)and few government departments. Few CSR unitslimited to advocacy type of activities in an identifiedlocalities only. Many CSR units are doing theiractivity through designed projects. Especially MultiNational Software Companies are involving activitieslike supplying free software and providingcomputers to schools and colleges. According toobservations majority of CSR activities areimplementing in urban pockets. Only few companiesCSR units are doing interventions in rural areasonly. This is treating it as Social and Human Faceof the company. Few corporate banks started microfinance and entrepreneurship development as partof their regular operations and claming it as socialresponsibility.

Corporate Social Responsibility concept is graduallyemerging in developing countries. This process hasbeen rapidly occupying key position in corporatesectors in India. Many industries and corporate

companies are opening their CSR units andpositioned few staff. Now a day every company isdoing some interventions either directly or indirectly.Many CSR units are collaborating with similaragencies to do activities for marginalized. Thedebate about CSR has been said to have begun inthe early 20th century, amid growing concernsabout large corporations and their power. The ideasof charity helped to shape the early thinking aboutCSR in the developed nations. The term CSR itselfcame in to common use in the early 1970salthough it was seldom abbreviated. The termstakeholder, meaning those impacted by anorganization's activities, was used to describecorporate owners beyond shareholders from around1989. Many large companies and institutions nowissue a corporate social responsibility report alongwith their annual report. The CSR reportconcentrates on their non-financial societal activities(usually positive contributions in nature).

The increased awareness of CSR has also comeabout as a result of the United Nations MillenniumDevelopment Goals, in which a major goal is theincreased contribution of assistance from largeorganizations, especially Multi-National Corporations,to help alleviate poverty and hunger, and forbusinesses to be more aware of their impact onsociety. There is a lot of potential for CSR to helpwith development in poor countries, especiallycommunity-based initiatives.

Future of CSR

The Corporate Social Responsibility has increased inimportance around the world. The world becomes aglobal village in the information technology era.Sharing and accessing of information become veryeasy. All big companies are expanding theirbusiness opportunities all over the world.Simultaneously the CSR activities also expandingspeedily where company initiatives started. Nowthese days every company feels CSR is unavoidableand responsible thing. Moreover companiesallocating separate budget and deployingprofessionals for CSR initiatives. It shows that it isemerging as a powerful thing in social developmentsector.

The Corporate Social Responsibility (CSR) is high onevery corporate's agenda. Social commitment is anessential part of every company. Corporate socialresponsibility involves the aspiration to make apositive contribution to the progress of the company



and society. If a company initiates CSR wing thecompany concerned need to work hard consequentlyon a formal, coherent and transparent policy in thisfield. Then only the CSR will become a potentialarea for development of the society.

Conclusion

The rapid information technology innovations arechanging the face of Corporate Social Responsibility.The concept of CSR is still debatable in democraticcountries. There is a major criticism in all over theworld is corporate companies are utilizing thisconcept to build their business expansion. Throughthis concept corporate companies are liaison andlobbying with higher bureaucracy in the governmentto get permissions/licenses to their companieseasily. Many companies age getting tax exemptionsby carrying out these social development activities.

After the new millennium there was a huge cryover globalization impacts all over the world. CivilSociety activists, philanthropists, humanists wereconducted World Social Forum and Asian SocialForum Meetings to fight against the globalizationand corporatization. These forum meetingsorganized all over the world focusing globalizationimpacts. There was big criticism conducting theseforums in large level with the financial support ofMultinational and Corporate companies. To organizeand sponsor such anti globalization campaigns theCSS units of the companies are using as theircushions. However there is a need of participationof all in the developing process to mainstream themarginalized community. These CSR initiativescertainly help to develop them socially andeconomically.

The increased awareness of CSR has also comeabout as a result of the United Nations MillenniumDevelopment Goals, in which a major goal is theincreased contribution of assistance from largeorganizations, especially Multi-National Corporations,to help alleviate poverty and hunger, and forbusinesses to be more aware of their impact onsociety. There is a lot of potential for CSR to helpwith development in poor countries, especiallycommunity-based initiatives.

References

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Grace, D, Cohen, S.2005. Business Ethics; Problems andCases. Australia. Oxford University Press. Roux, M, 2007.Climate conducive to corporate action; 1 All-roundCountry Edition The Australian. Canberra, A.C.T. pg. 14

Sacconi, L. 2004. A Social Contract Account for CSR asan…..Journal of Business Ethics, No.11, pg 77-96.

Sullivan, N. Schiafo, R. 2005. Talking Green, Acting Dirty;[Op-Ed]. New York Times. (Late Edition (East Coast)),pg.14WC.23.

Thilmany, J. 2007. Is Ethical Behaviour Shaping CSR.Supporting Ethical Employees. HR Magazine Alexandria.Vol. 52, iss.9, pg 105 -110.

Tullberg, S. Tullberg, J. 1996. On Human Altruism: TheDiscrepancy between Normative and Factual Conclusions.Oikos, Vol.75, No.2,pg 327-329.

CSR Network. ICJ. International court of Justice, CatalystConsortium 2002. What is Corporate Social Responsibility?

Brand Strategy 2007.CSR FOCUS: 10 key things to knowabout CSR London. pg. 47.

Malloy, D.C,Prof. Understanding the Nature of Ethics, andPurposes of Business Health Care and Law: Faculty ofKinesiology and Health Studies

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Eells, R.S.F. (1960), The Meaning of Modern Business: AnIntroduction to the Philosophy of Large CorporateEnterprise (Columbia University Press, NY).

University of New Mexico Management Presentation, VanBuren 2006

A brief history of social reporting, Business Respect 2003

An overview of Corporate Responsibility - Institute ofChartered Accountants in England & Wales.

WBCSD (2000). Corporate Social Responsibility: Makinggood business sense. World Business Council forSustainable Development. ISBN 2-94-024007-8.

Useful links:www.csrwire.comwww.csr-asia.orgwww.worldbank.orgwww.dfid.gov.uk.



Pedagogies of Knowledge Management @ Infosys

Dr. Ashish Manohar Urkude, Professor, Alliance Business School, Bangalore 560 068

AbstractToday almost every organisation in the world istrying to become a learning organisation. There arefew organisations which have started upgradingand evolving since their inceptions. Take example ofGE, it has become a melting pot of many countries,civilisations, languages, contrast and cultures,through continuous learning. Also, lot oforganisations have implemented CMM, PCMM, ISO9000, ISO 14000, TL 9000, AS 9100, ISO 20000,ISO 27000, OHSAS, TS, IEEE, Six Sigma, TQM,Kaizen, HR Score Card, Balance Score Card,Intangible Assets Monitor Framework, and suchdifferent benchmark to keep themselves up datedand on the performing peaks at all the times.Infosys, India is one among them. Infoscions haveunderstood the 'Perform or perish' approach in themulti-polar, and multi-dimensional globalcompetitions. This continuous up gradation, human

resource development, technology acquisition andtechnology up-gradation 24 X 7 X 365/366, at allthe levels has lead to multidimensional developmentof Knowledge Management Maturity Model.

Thus, Indian ICT giant Infosys has become such anorganisation which is trying to implement all thesebest practises around the globe to fetch thebusinesses from the best organisations around theworld.

This research concentrates mainly on the pedagogiesthat are followed in the Infosys. Further, it suggeststhe obvious expectations of the young generation.

To make research to the point and crisp, everythingis put/ fitted in the tabular format

Key words: Knowledge Management (KM),Knowledge Management Maturity Model, LearningOrganisation, Learn once use anywhere, and WiseInfoscions.

Table 1: Pedagogies of Knowledge Management @ Infosys in Tabular Crisp Form:

SN KM Characteristics Description with respect to KM in Infosys

1 Aim To move towards a "Learn Once, Use Anywhere" paradigm.

2 Objectives i. To minimise the efforts dissipated in redoing learning that hasalready happened elsewhere, and

ii. Ensuring that Infosys employees (Infoscions) in contact with thecustomer have the collective and organised knowledge of the Infosyswith them.

3 Goal Delivering all organisational learning to benefit the customer.

4 Strategy Knowledge Management Maturity Model.

5 Vision To be an organisation where every action is fully enabled by the powerof knowledge:

a. Which truly believes in leveraging knowledge for innovation,

b. Where every employee is empowered by knowledge of every otheremployee, and

c. Which is globally respected knowledge leader.



6 Mission To ensure that all the organisational learning is leveraged in deliveringbusiness advantage to the customer.

7 Challenge a. External Customer benefited through KM, and

b. Empowerment through knowledge.

8. Overall remark Achieving supremacy through knowledge of Infosys personnel andassociates.

9 Paradigm shift Learn Once- Use Anywhere.

10 Body of Knowledge a. It enshrines, preserves, and protects essential learning gained(BoK) through previous projects.

b. Prizes are given to meritorious contributors.

11 Process Assets a. In the busy job profile very few contribute to KM.

b. There are very few can write their experience in few words.

c. Very few can contribute/ capture the project deliverables and distilit in the form organisation requirements.

d. Process Asset is system. It captures intranet based system.

e. It is a focused search system.

f. Project Leader fills in a brief description of the project, the targetaudience and others details while uploading into system.

12 Practise Unit Several Process and Practise unit exists

13 Knowledge Capital a. Infosys essentially is in knowledge intensive business.

b. In the environment where every software and hardware observesobsolescence; up gradation of knowledge and history of evolution offurther versions has its own importance.

c. Global market place has diversities dissimilar in every function, placeand systems. Key determinants of Success are ability to leverage knowhow, innovation and reputation of the organisation as well as theemployees. E.g. Infosys has become crucible of melting pot ofboundaries of various countries, civilisations and cultures; hence it isimportant to balance acts to achieve productivity and profitability.

d. Traditional Balance Sheet, Profit and Loss Account, IncomeStatement, have no values left in this world. Instead, 'Balance ScoreCard' kinds of approaches have gained importance. Thus, Human valuein the organisation, Market valuation, Quality, Customer delight, havegained significant importance. Infosys has started using "Dr. Karl-ErikSveiby's Intangible Assets Monitor Framework in 1998", which wasdeveloped in 1997. In this KM initiation process there are:

i. External structure initiatives from customers, competitors, suppliers,

ii. Internal structure initiatives: Depends on the leadership qualities ofCKO and KM Mentor,

iii. Competence initiatives: Individual Tacit knowledge must bestimulated and tapped.




Company believes that such a presentation of its knowledge assetswould provide a tool to its investors/ customers for evaluating themarket-worthiness of the company.

14 People Knowledge Map a. It is a Knowledge Directory, providing a pointer to expertise available(PKM) within the organisation has been developed and deployed.

b. PKM provides intranet based interface via which people can registeror locate expertise.

15 PKM System System is designed to be driven off a proprietary knowledge hierarchyconsists of multi-level taxonomy of topics represent knowledge in theInfosys context.

16 PKM Hierarchy At the Top of PKM Hierarchy is Technology consisting 800 nodes. Levelsare:

a.Technology, b. Process, c. Project Management, d. Applicationdomain, and e. Culture

Further deeper levels representing a finer grain of topics.

17 Sparsh- The Intranet - i. Sparsh is the companywide intranet.(CIP) The Central ii. It forms the central information portal.Information Portal iii. It consists of 5000 nodes:

a. Spread across India-Based Development Centres/DCs

b. USA based marketing office.

iv. Home page:

a. Official policies, and documentation,

b. Press Releases and Articles,

c. Web Based In house information system.

v. It also has knowledge shop that provides access to several intranet-based knowledge systems.

vi. It has links with:

a. Projects,

b. Practise Units (PU)

c. Departmental and Personal Web Pages,

d. Access is governed by (Indian Patent Regulation-IPR) guidelines.

vii. Security is provided through firewalls, to avoid external intrusion.

viii. Email:

a. Every Infoscions has access to, support bulletin, boards for officialannouncements as well as technical and personal queries.

b. An email protocol has been defined and is adhered to.

ix. Virtual Classroom:

a. It is developed and deployed on the intranet.



b. It has access to various courses whose contents have also beendeveloped by the Infoscions.

c. Discussion Forum: For Questions and Answers related to variouscourses.

d. Several tutorials are there online, purchased legally.

x. Systems for Supporting Training Management which are developedinternally by Infoscions are also available for:

a. Course Announcement,

b. Nomination,

c. Reporting, and

d. Participant evaluations.

18 Best Practises Practises that have worked well around the world are also propagatedthrough regular seminars and best-practice sessions, held both withinunits and organisation wide.

19 Odyssey A system that provides an umbrella for websites maintained byIndividual projects, Marketing intranet, which provides information andreusable artefacts useful at the sales and project initiation stage.

20 An integrated KM i. KM related activities have in past proceeded in an un-strategy orchestrated fashion, being carried out in various organisation

pockets like:

a. Quality Department,

b. Information System (IS) Group,

c. Marketing Group,

d. Various Practise Units (PU),

e. Education and Research (E & R), etc.

ii. In 1999, a move towards KM strategy was initiated.

iii. A coherent KM effort is being developed continuously.

iv. Ownership: Ownership of KM strategy vests with E & R, whosemotto is "We help Infoscions make learning a way of life".

v. Key constituents of KM Strategy:

a. People,

b. Process, and

c. Technology.

It aims to address the challenges recounted in every aspect of KM,through multitude of initiatives, conceptually underpinned by Infosys'proprietary KMM Model.

21 Knowledge i. KMM- Knowledge Management Maturity Model is based on theManagement Maturity realisation that path to achieve KM success involves significantModel (KMM) changes:





a. In the working culture,

b. In the Processes of the organisation, and

c. System in the organisation.

ii. Instead of taking one giant leap a staged frame work is done underprogressive development. The most well established model availabletoday to/ for managing changes in phased manner is SoftwareEngineering Institute's (SEI Carnegie Mellon Institute) CapabilityMaturity Model (CMM).

iii. Further the purpose of KMM Model is two fold:

a. To provide framework, this can be used to assess current level ofKM maturity,

b. To act as a mechanism to focus, and help prioritize, efforts to raisethe level of KM maturity.

22 CMM and KMM Analogy In analogy with CMM, the KMM model:

A. Consists of 5 maturity levels:

i. Initial: It is the juvenile level where everyone contributes and triesto develop the organisation.

ii. Repeatable: At this level, the systems and processes are welllearned and adopted by all,

iii. Defined: At this level of maturity, 5Wand 1H are well defined andthus all the actions have reasons and structured patterns,

iv. Managed: People learn how to manage the work according to set upprocedures and standards.

v. Optimised: The best practices around the world get absorbed in theeveryday work and life of individuals and almost all the stake holders,thus benefiting individual employee, teams, groups, and the wholeorganisation and all other stake holders.

B. CMM and KMM follow the similar methodologies at all these levelsbut CMM is applicable to ICT while KMM has much wider perspectiveand depth in almost all the aspects of the business.

C. Set of Key Result Areas (KRA) defined at each level,

a. Each KRA defines a particular capability in terms of People, Process,or Technology and effectively serves as unit of KM capability.

b. Each maturity level can be characterised by certain observablecapabilities again in terms of people, process or technology, withsuccessive levels exhibiting higher capabilities.

c. There are 15 KRA in all, each being specific to one of people,process or technology.

23 Infosys Advantage and i. Infosys has achieved Capability Maturity Model (CMM) level 5 andResults Knowledge Management Maturity Model (KMM) level 5.




ii. Adjudged the best recruiter in 2005 in India, in terms of employeesatisfaction. It could happen only due to the contribution in/ from/ to/ for the KM and their implementations.

iii. Infoscions have developed their own way of working, upgrading theirknowledge base, keeping themselves fit at multiple levels, and haveestablished their campuses in many major cities in India. In fact it isthe most sought after job destination in the private sector in India.

iv. Infoscions are able to reduce the attrition rate, the biggest problemfaced by the Information Technology industry in the world market.

v. Infosys have become the most sought out Indian Brand name in theInformation and Computer Technology (ICT) world market. Hence,almost all the Fortune 500 companies have their business link withInfosys.

vi. Infoscions have established their base in almost all parts of globebeing the most trusted, versatile and value adding organisation.

vii. Infoscions have put idols and icons before the world. Its CEO, Mr.Narayana Murthy has ideally retired from his post and is not active indaily business, that too, at the age of exactly 60 years. However, beingthe chief founder of Infosys Mr. Narayana Murthy is still chief patronof Infosys and trying to devote most of life for higher causes like socialservices. Most important contribution by him to Infosys is; he treatedhimself at par with any Infoscions when he was at the job. He usedto take lunch with his all other employees/ colleagues in the commonboarding hall. He used to stand in queue with other Infoscions like anycommon employee. Thus, he improved the organisation belongingnessand interpersonal excellence among all the Infoscions. It could happenthrough Knowledge Management as he followed the path/ the legacyof Honourable Mr. J.R.D. Tata of the Tata Empire, India, who used totake lunch with his common employees during everyday lunch break.Henry Ford of Ford Motors, USA also used to work on shop floor withhis employees.

viii. Today Infosys is attracting global talent pool without much biggeradvertisement. Most of the marketing as well as businessadvertisements occur through word of mouth. Infosys started 'Findinga buddy' method in which employee can locate the best candidate andsuggest to management. It built trust among all.

ix. With KM Infosys has became the most alert organisation in Indiawhich really understands, works synergistically and bring desired resultsin the five basic factors of Knowledge Management:

a. Limitations of Existing Initiatives,

b. Value of Knowledge,

c. Minimising Effort Duplication,

d. Sharing Best Practises, and

e. Enhanced Innovations.




x. In India it has become dream organisation for many youngsters.Almost 1,302,363 applied in 2006-07 out of which only 14,000 peoplewere selected to become Infoscions. Thus, improved work force to50,831 in 2007 from 44,658 in 2006.

xi. World over all Fortune 500 organisations has some business withInfosys. Even Olympics and other sports software are developed byInfosys thus making it one of the most sought after organisation worldover in the field of ICT.

24 Financial Growth Founded 1981: Starting Asset Rs. 10,000/=

Latest figures 2007: Net Market Capital- Rs. 1,153,070,000,000/=(Rupees One Lakh Fifteen Thousand Three Hundred and seventy Croreor Indian Rupees One Trillion @ 1 USD = 40 INR) i.e. almost USD ($)25 Billion.

25 Employee Contribution Infosys is built on ideas and contribution of its each and everyemployee. Right from Honourable Mr. Narayan Murthy, Honourable Ms.Sudha Murthy, Honourable Nandan Nilekani, to the latest Infosysemployee. It recognises the contribution of each employee and thusbelieving in the human values.

26 Increase in Share values Over the years, Infosys has improved its stock market-share value. Inthe Indian National Stock Exchange, on July 15, 2007, its INR 10 shareis valued almost at INR 2000. It's ADR in USA, has improved to almostUSD 52, as on July 15, 2007.

27 Tangible Benefits i. Profit improvement and making money through information.

ii. Increase in share value in India and abroad/ ADR.

iii. Business Development through organic growth and also throughinorganic growth,

iv. Asset and infrastructure enhancement,

v. Wiser Infoscions through continuous Human Resource Development,

vi. Lean Production through enrichment in system, process andtechnological standardisation,

vii. Achievement of CMM, KMM, ISO, PCMM, IIIE technology and humanresources benchmarks.

28 Intangible Benefits i. Standardised knowledge acquisition procedure,

ii. Standardised knowledge development process,

iii. Infosys has knowledge encyclopaedia on all the relevant subjects,

iv. High amount of knowledge sharing,

v. Knowledgeable and Wise Infoscions are long term asset for Infosys,Wise Infoscions is the term used for the individual and commonwisdom of Infosys employees and employers,

vi. Improved Infosys brand name, as it provides end-to-end solutionsto its clients,




vii. Employee involvement and organisation belongingness among them,

viii. Better interpersonal excellence among all Infoscions/ Infosysstakeholders.

ix. Talent retentions through employee job satisfaction.

x. Continuous improvement in the customer satisfaction.

xi. Infosys is able to beat the competitors with riding high on the KMinstead of business intelligence.

xii. In the field of Consultancy Infosys is giving their customersoperational advantages over competitors through this KM sharing, andhave entered into Aerospace and Defence, Banking and Capital Markets,Communication Service Providers, High Tech and Discrete Manufacturing

Insurance, Healthcare and Life Sciences, Media and Entertainment,Resources, Energy and Utilities Retail, Distribution and ConsumerPackaged Goods Transportation Services.

xiii. Increase in customer loyalty through knowledge sharing.

xiv. Faster Innovation is made possible.

xv. Infosys has fuelled growth in their clients.

xvi. KM has provided seamless information flow among all the stakeholders increasing the productivity.

xvii. Infosys has set up collaborations with many institutes to upgradetheir employees in different domains. It also has set up many in houseprograms too. KM allows positive discussions among employees andthus further takes. Many centres of excellence have come up benefitingalmost every Infoscions.

xviii. Infosys corporate governance with global presence in eightycountries on the globe, has improved through 24 X 7 X 365 upgradation and use of KM.

xix. Infosys has developed alliances at global level to enhance supplychain management and risk management solutions with its clients.

xx. Infosys Foundation has set up 5500 libraries in villages with Indianand Provincial Government collaborations as a part of Corporate SocialResponsibility (CSR).

29 MAKE 2003 Awards to Won the prestigious Global Most Admired Knowledge EnterprisesInfosys for KM (MAKE) Award, for the year 2003. Acknowledging the award, Mr.

Kris Gopalakrishnan, Chief Operating Officer and Deputy ManagingDirector, Infosys Technologies said, "We are delighted to be rankedamong the world's Most Admired Knowledge Enterprises in the 2003Global MAKE study. At Infosys, Knowledge Management has helpedus connect people, bring together geographically dispersed work-groups, and create an enduring culture of sharing and caring. Ithas also provided us a platform for creative and collaborativeproblem solving, and the means for creating a symbioticrelationship between the individual and organizational objectives for




development." Reacting to the award, Dr. J.K. Suresh, PrincipalKnowledge Manager, Infosys Technologies said, "It is with pleasurethat we acknowledge the singular honor of being ranked as one ofthe world's Most Admired Knowledge Enterprises in the 2003 GlobalMAKE study, and bracketed with the best of breed knowledgeorganizations in the world. Infosys' effort to provide genuinecustomer value is based on our commitment to innovation andexcellence in execution centered on Knowledge Management in itsmany flavors. Given that our customer provides the basic directionto these attributes, the primary benefits of leveraging KnowledgeManagement have been in ensuring that our customer's businessdoes better in smaller time frames and with a lower cost ofownership."

30 KM Human Relationship For this purpose KM in Infosys operates at three process levels:Management i. Project level,

ii. Account level and

iii. Organisational level.

31 What stalwarts say i. Dr. Rory Chase, Managing Director of Teleos, said: "Organizationsabout Advantage of like Infosys have been recognized as global leaders in effectivelyInfosys from KM transforming enterprise knowledge into wealth-creating ideas,

products and solutions. They are building portfolios of intellectualcapital and intangible assets which will enable them to out-performtheir competitors in the future."

ii. The Committee Key Findings of the Global MAKE Study for the year2003 were as follows:

a. The 2003 Global MAKE Winners and Finalists trading on the NYSE/NASDAQ showed a Total Return to Investors (TRS) for the period 1992-2002 of 19.6% - a staggering 2.2 times the Fortune 500 companymedian.

b. 2003 Global MAKE Winners and Finalists showed an average Returnon Capital Employed (ROCE) of 30.4.

c. Profits as a percentage of assets for the publicly traded 2003 GlobalMAKE Winners and Finalists was 5.4 - over five times that of theGlobal Fortune 500 company median. Investors believe that the 2003Global MAKE Winners and Finalists offer long-term potential due totheir capability for intellectual capital-driven wealth creation.

d. Twenty Global MAKE Winners and Finalists (57% of the for-profitcompanies in this year's list) rank in the world's top 100 companies bymarket capitalization.

Thus showing achievement of Infosys through KM. Infosys is the firstIndian organization to achieve this feat.




Table 2: Future Challenges/ Needs, Expectations and Suggestions:

1 Future Needs/ Knowledge Preservation in the fast technology obsolescence era hasChallenges become a major challenge. The reason may be the technology over

which knowledge is stored may or may not remain compatible tofuture technologies hence constant up gradation of knowledge aswell as its storage devices and technologies has to be up datedfrom time to time. It is need of the day and a challenge as well.This is the future need of the whole human civilisation, forsustenance and survival.

2 Future Expectations Knowledge Utilisation for humanity at large through Corporate SocialResponsibility (CSR) in fact Infosys may be even able to go beyondCSR through its own social foundations.

3 Major Suggestions i. Infosys may start consultancy with top class human resourcesand supporting Knowledge Management Repository in multiple fields,to benefit Micro, Small, Medium, and Large Scale Industry, Publicsectors, Non Governmental Organizations (NGO), Self Help Groups(SHG), and other organisations without boundary and barriers.

ii. Infosys has the top talent pool next only to UNO, WB, NASA andFortune 500 organisations like Microsoft, GE, and Oracle. Hence itis anticipation of many that it can develop its own operatingsystem/ medium like Windows and Linux, which could beubiquitous, user friendly, easy to install, interactive, multi-dimensionally perfect and viable, and can benefit a common manhaving cheaper prices than other operating systems/ mediums. Itcould revolutionise and trigger the computing world, could triggerthe faster growth in technological world, and could activate growthin science and technologies and could generate growth in thebusiness world and could set off growth in development of humancapabilities through total paradigm shift. Thus, human civilisationwould be benefited and could grow beyond our Earth's moon, planetMars and beyond. Thus, that which is science fiction today wouldbe made reality if Infosys could bring this revolution of ownmultiple-advantage operating system/s as soon as possible.

4 Other suggestions Infosys can help other organisations of any kind in the form of:

i. Knowledge Creation

ii. Innovation,

iii. Curriculum development, distance learning, custom-tailoredcourses from Infoscions University or helping other Universities,

iv. Knowledge Dissemination and Skill development,

v. Knowledge Adaptation,

vi. Knowledge Usage, and

vii. Knowledge Value Chaining.



Conclusion

In the knowledge explosion era, Infosys hasachieved excellence in its ICT and allied fields onlythrough continuous learning and knowledgemanagement. Hence, the next expected step fromInfosys could be to evolve its aim, objective,mission, goal, strategy, and vision. Thus, it couldput a real challenge before the competitors. In fact,it must think and beyond competition/s. Also, it canaccept the multiple challenges in the world throughwise and knowledgeable Infoscions. Infoscions thuscould bring a complete paradigm shift in the worldthrough Knowledge Management motto of Infosys'learn once and use anywhere'. There by the worldwill have only one way to go-Futuristic andForward.

References

1. "Mobility of Universally best-fit engineers in theinterstellar era", Dr. Ashish Manohar Urkude, in the

UNESCO's 5th UICEE-Global Congress on EngineeringEducation, held in Polytechnic University, USA, July 17-21, 2006, particular page numbers 229 to 235.

2. "Virtual Reality, Artificial Intelligence, Robotics andProject Management", chapter 11, pp 386 to 403,Computer and I.T. Competency Made Easy, AshishUchchakule (Urkude), Himalaya Publication, 2004, Nagpur,India.

3. www.infosys.com,

4. Annual Report of Infosys 2006.

5. Recruiting Advertisements, of Infosys, Bengalooru invarious Dailies in India.

6. Post-Doctorate/ D. Litt. Thesis of Dr. Ashish ManoharUrkude, Introduction, pp 1 to 122.

7. "Indian Agricultural Plans: Require 24 / 7/ 365approach of implementations", Dr. Ashish ManoharUrkude, et. al., published in the conference proceedingsof the Institution of Engineers (India), InternationalConference COGEN-2008.



Product Recalls : Marketing Failure andImplications with Indian examples

Prof. R.K.Gupta, Senior Consultant & Professor, American University in Dubai

AbstractThis paper examines the virulence of marketfailures with regards to product recalls in theIndian context. The questions asked during thecourse of these investigations are whether theproduct recalls relate to the negligence on the partof the makers. What are the role of serviceproviders like lawyers, doctors and others in thiscase?. This paper also examines the logistics ofrecall and finally concludes that more than manytimes product recalls are spread over variousindustries and often indicating poor quality ordesign and not related to the warranty processes

A product recall is a request to return to themaker, a batch or an entire production runof a product, usually over safety concerns or

design defects or labeling errors that we will see inbelow list of cases compiled for diverse companiesand product categories.

The issues:

Product recalls are not uncommon phenomenon asevident from below given compilation and best ofthe companies and brand leaders are involved inthis from time to time. When there is too muchoutsourcing to lower costs so that US CEOs canplay golf and show company efficiency toshareholders, it gets worse.

1. Do product recalls relate to negligence on part ofmanufacturers in supply of goods? Do theydamage Brand image or enforce it by effectiveand quick replacement of defective product/repair? We may also call it damage control.

2. The decisions have to be taken fast on receivinga significant number of initial complaints aboutsafety concerned defects common to all users oraccidents that might have taken place or there isserious design or component problem in productwhich may create problem for image of companyand drag them into litigations for costlysettlements. Consumers' life may be at risk.

3. What about failure of service provider likelawyers, doctors and others (Called service failureand service recovery processes), because in thiscase recall is not possible.

4. What local governments do about this issue andwhat are laws in various parts of world -(Weshall take only USA and India in this article)about these issues of product defects and safetyconcerns-specially for drugs, children products,automobiles, home gadgets and food items. Ofcourse in any product, safety concern may existlike clothing or even bibs used for children.

5. What are consequences of defective productsupplies and its cost of calling back?

6. WTO agreement has a chapter relating toSanitary and Phyto-Sanitary (related to plantmaterial sources) conditions for imported foodand other related items, which is being criticizedby India and many other developing countries asnon-tariff barriers. But recent incidents seem tojustify such controls especially in food products,drugs and electric goods and even textiles(inflammable skirts scandal that took place a fewyears back exported from India to USA buyer)and those that come in body contact like Toypaints or decorative items and cosmetics, ofcourse.

7. How the product recalls can be handled and is itpossible to build in a system for possible productrecalls like that for disaster management systemsand Information system crashes in companies?How companies can ensure quick and safe recallsand ensure traceability of goods down thechannel of distribution, the response time torecall and the reverse logistics for customersreturning goods and getting refund orreplacement . Customers may ask for damagesin courts (USA). The delay may be fatal forconsumers in certain products like electricappliances, automobiles and food items/medicines.


The recalls do have financial implications forcompanies and some may get doomed even.

8. Why these product quality failures (technical,functional or ingredients quality) occur and arethese avoidable by process control models andadvances quality control systems? Many failuresare accounted for by poor design and ignoringsafety aspects, like sharp corners in toys or looseparts or buttons on children garments which canbe swallowed by kids.

Generally speaking Companies recall products whendefects seem to have safety concerns for customersand affect large number of customers. Otherwisenormal warranty procedures are adequate as part ofstandard marketing practice. Thus recalls are moreof preventive in nature and to pre-empt costlylitigations and financial and goodwill losses.

The story of Product recalls:

My first encounter with product recall in marketwas when I was undergoing my MBA summertraining at Glaxo Laboratories, now Glaxo SmithklineBeecham (GSK), Mumbai at their Worli, plant. Glaxohad a unit at Aligarh (U.P) to make Baby powder/foods like Farex (Remember the then famous 'bonybony baby -Farex baby' radio jingle? Later AftabShivdasani, now film star, had modeled as farexbaby).This brand is now with Wochardt. Wockhardtacquired Dumex India; Protinex & Farex (News itemdated July 1, 2006). Before that Heinz (USA foodGiant) bought it from Glaxo 11 years back whenGlaxo globally moved out from food business.

Due to some problem in composition of powderthen in some batches , the product was recalledfrom market and I witnessed a flurry of activitiesby Glaxo staff , the effort being colossal even inthose times (1977) of smaller sales volumes tocontact various drug stores and other stores thatmarketed baby food and allied items. There wereno faxes, TVs in small cities and emails (internet);phones were only in D.O.T monopoly and sluggish.

This process of recalling products from saleschannel partners or consumers may be calledReverse logistics (read my paper on this onindianmba.com) and costs are enormous. To callback widely distributed consumer products likebattery cells, toys, and baby powder is quitecumbersome and expensive with time shortage (One can't wait for disaster to happen).

Frankly speaking I was wondering if there was noimmediate threat to life of babies, why Glaxo hadgone to such a length and did all efforts to callback product from markets and of course it had noalternate use except for making a bonfire, may be.But the Glaxo brand made deep impression on meas a socially responsible, ethical and professionallymanaged company. Remember there were noConsumer Protection laws then and concept ofCorporate Social Responsibility and CorporateGovernance did not exist in India, at least. It wasLicense Raj in full swing and most of goods were inshort supply.

Things have not improved since then and productrecalls continue unabated across a cross section ofindustry and products by best of companies.

Let us have close look at some past and currentcases of product recalls. These recalls are either forreplacement or refund (return) or simply for repairor replacement of defective part(s) from productthat is not meeting standards or is unsafe. Veryrecently following product recalls have taken place(at the time of writing this article):

USA/Globally-

Mattel Inc. toys, manufactured for them by aFoshan based Chinese company (the owner, ZhangShuhong has already committed suicide (August 14,2007 news item) for small detachable and swallow-able magnet in toys and lead (in paint) healthhazards allegedly in some other toys. The recallruns into millions of toys.

The U.S. Consumer Product Safety Commission hasissued more warnings, this time recalling thousandsof SpongeBob SquarePants journals, variousspinning tops and children's jewelry, following Mattelepisode.

A class-action lawsuit has already been filed againstMattel related to its recent recall of more than 1million lead-tainted toys.

Nokia- Mobile phone batteries BL-5C (manufacturedin China but for Matsushita, Japan) have beenrecalled for getting overheated and bursting duringcharging- Although most of mobile sets heat upwhile in use for a longer period continuously-this isyet to be addressed by mobile manufacturers whoare busy reducing instrument size. Another issuerelated to safety in Mobile hand sets is micro/radio

Product Recalls : Marketing Failure and Implications with Indian examples


wave emissions that emanate from handsets andbeing doubted as health hazard (no conclusivestudies are yet available). In perhaps the largestproduct recall in India, mobile giant Nokia recalled46 million batteries pursuant to customercomplaints across the globe.

A couple of days ago, Nokia issued a 'productadvisory' (the company does not call it a recall) forthese BL-5C batteries having certain period ofmanufacturing. On the first day of the opening ofits centre (August 16) for advice on the faultybatteries, Nokia India answered 20,000 calls andreceived 1.45 lakh SMSes , according to DevinderKishore, Director- Marketing.

Other product recall cases in recent past:

In another case Toyota (Japanese) had to recall 500thousand Tundra light trucks for some steeringsystem defect that caused serious accidents. (Canone imagine the gigantic task?)

Robert Bosch Tool Corp. and the Consumer ProductSafety Commission (CPSC) USA recently announceda recall of more than 800,000 Skil-brand powercircular saws due to laceration risk.

For the second time this year, toymaker 'Hasbro'has issued a recall for about 1 million Easy-BakeOvens (children's Gizmo)after receiving complaintsthat young children were getting their hands orfingers stuck in the oven's opening, causing seriousburns.

The U.S. Consumer Product Safety Commission andHasbro received about 249 complaints of childrengetting their hands stuck, 77 of them reportingburns.

Cadbury was recently fined $2 Million in Salmonellacase (a Typhoid bacterium and potential bioweapon)

Atico International (USA) recalled about 392,000coffeemakers sold exclusively at Walgreen becausethey pose a fire hazard. The manufacturer said ithas received 14 reports of electrical failure and sixreports in which the coffeemaker ignited. So far, noinjuries have been reported. Signature Gourmet andKitchen Gourmet coffeemakers can ignite due to anelectrical failure and may cause a fire.

IBM and computer maker Lenovo announced inSeptember 2006, a recall of 526,000 laptop

batteries worldwide made by Sony Corp. because ofa fire risk. The recall affects the lithium-ionbatteries found on the ThinkPad Notebook line oflaptops, which were sold by both IBM and Lenovo.Sony Corporation also announced it would initiate aglobal replacement program of the company'slithium-ion batteries but did not provide any detailsof the program.

In 2006, Dell recalled 4.1 million notebookcomputer batteries made by Sony because ofoverheating and fire risks. It was the largest recallin the company's history.

Then, Apple recalled 1.8 million iBook andPowerBook laptop batteries that were also made bySony.

Maytag Corp. has recalled 636,000 Hoover Self-Propelled Upright Vacuums due to a defective on-offswitch , according to the US Consumer ProductSafety Commission. The CPSC said Maytag(Research) has received 249 reports of vacuumsoverheating -- which caused the handle area tosmoke, melt or catch fire -- due to the switchproblem. One minor burn injury requiring nomedical attention was reported.

April 2007: Nestle voluntarily recalled it's CaramelKit Kat Chunky bars and KitKat Cookie DoughChocolate bars due to some bits of hard plasticbeing found in it.

Merck & Co. reported its worst annual profit since1998 after pulling Vioxx off the market late lastyear and boosted the amount it set aside forlawsuits over the recall of the once popularpainkiller (this is sold in India too). Merck added$604 million in the fourth quarter to the $71million it had previously set aside to cover litigationrelated to Vioxx, the company said. Merck officialsalso said they believe that losses related to thedrug are behind it, news that ignited a rally in thedrug maker's beaten-up stock (shares).

Old Navy has agreed to voluntarily recall about666,000 children's coats and fleece pulloversbecause the zipper pull could present a chokinghazard, the Consumer Product Safety Commissionannounced Tuesday. The company received 13reports of the zipper pull detaching. No childrenhave been injured, although there has been onereport of the zipper pull being found in a child'smouth, the agency said. The recall involves seven



different styles of outerwear tops, including a fur-trimmed coat, pullover fleece wear and fleecejumpers with a hood. The garments being recalledhave a clear, oval-shaped zipper pull and were soldin sizes 6 months to 4T.

Clover is a popular brand of dairy spread in theUnited Kingdom, produced by the Dairy Crestgroup. It resembles butterfat but is easier to spreadwhen cold. The brand was launched in 1983 andthe company claims that it is used in over 5 millionhouseholds. It is made near Telford.

Over 2 million tubs of Clover spread were recalledby Dairy Crest in a recall announced on Saturday,26 May 2007. All Clover spread products of all sizeshave been recalled by Dairy Crest and refunds toconsumers have been offered on all products witha lid date of 10 August 2007. The recall asannounced by Dairy Crest. The cause is theoccurrence of an unknown sourced mold (a kind offungus) in product.

Pfizer recalled Benadryl products to correct labelingerror. Pfizer initiated a voluntary recall from storeshelves of Benadryl Allergy & Sinus Fastmeltä andBenadryl Children's Allergy/Cold Fastmelt tablets onjune 02, 2001.

The Automobile Industry Safety issues are one bigreason of product recalls:

FORD cars recalled finally: Two years after his wifeof 34 years died in a fire, an Iowa man continuesto maintain that the blaze was started by a faultycruise control switch under the hood of her 1996Ford F-150 pickup truck -- while it was parked inthe garage attached to his home.

Although Ford had denied -- and continues to deny-- the switch started the fire that killed 74-year-oldDolly Mohlis in 2005, The Company settled alawsuit brought against it by Earl Mohlis. And itissued a recall of an estimated 3.6 million vehicles-- bringing the total recalled over the past decadeto more than 10 million -- every single car andtruck built with a similar cruise control switch.

The famous General Motors Controversy:

General Motor's model Chevrolet 'Corvair' wasnicknamed 'unsafe at any speed' after RalphNader's publication in 1965, the author who foughtdangerous battle with GM but ultimately won. Hewas intimidated to remain silent. Automobiles infact is one industry that had and has several safetyconcerns like Tire and suspension designs, gear

shifting system pattern, air bags ( introduced in90s in USA finally), front bumper and crashresistance of its body and chassis. Large numbersof people die in defective design cars, equally poormaintenance and negligence in India and othercountries, even USA. The automobile industry beingpowerful giant have successfully managed to scuttleseveral such issues for decades. Ralph Nader'scontribution in his even named book cannot beundermined.

Peltzman Effect

The impact of the safety regulations that spawnedbecause of the book became the basis of a paperby economist Sam Peltzman. The conclusions of thispaper-that the regulations actually caused additionaldeaths-became known as the Peltzman Effect.Peltzman argued that because regulation made carssafer, getting into an accident became cheaper (itwas less risky) and so it happened more. Driverand passenger deaths changed little after theregulations were in place, but pedestrian deathsincreased, probably because there was noimprovement to car safety with respect to thoseoutside the vehicle.

Peltzman also argued that car safety was alreadyimproving, though at a slow rate, since theinvention of the car. These improvements tended tobe minor but had a huge impact in improvingsafety (such as a rearview mirror mounted on theoutside of the car and automatically canceling turnsignals) (Courtesy CNN.com)

Indian Scenario

1. As far as India is concerned , In 1994 MarutiUdyog recalled Maruti 800 cars due to someproblem in front axle components whichendangered customer safety on road ( for axlereplacement only, of course). In case of cars it isrelatively easy to do that as customers are infinite numbers and their database is availablewith dealers/company. Maruti incidentally was ina collaborative sector with Suzuki Japan, whichnow fully owns the company.

2. The MDH (Mahashian Di Hatti Limited) brandname is very well known throughout India. It isan exporter too.The products sold under thebrand name include single spices (such as chilli,coriander and turmeric) as well as blended spicemixtures.The Food Standards Agency of UKrecently announced withdrawal of MDH Sambar



Masala due to its contamination with Sudan I(an diazo-conjugate dye with a chemical formulaof 1-phenylazo-2-naphthol. Sudan I is apowdered substance with an orange-redappearance. The additive is mainly used to colourwaxes, oils, petrol, solvents and polishes. SudanI has also been adopted for colouring variousfoodstuffs, including particular brands of currypowder and chili powder, although the use ofSudan I in foods is now banned in manycountries due to inconclusive reports on itspossible health risks. But it still is used as acoloring for cotton refuse used in chemistryexperiments.

3. Soft drinks & Pesticides Controversy

A couple of years back there was tremendous ragein India generated due to a Delhi based researchlab's report that all MNC and Indian company madesoft drinks had pesticides contents far more thaninternationally accepted standards. The basic causewas contaminated water in India with pesticidesused indiscriminately. But that could not giveexcuse to producers to pass off contaminateddrinks.

4. At almost same time came controvertial reportabout worms being found in Cadbury chocolatesin Mumbai.It is not known finally what thesecompanies in india ( MNCs) did to react to thesituation but storm had settled down, but notwithout long term effects on credibility of softdrinks as safe products, these being banned inmost of educational institutes canteens and lacsof bottles were smashed by enraged protestantsin various parts of country and debate took anasty turn for MNCs, their role in Local marketsand business ethics. Of course MNCs (foreignMNcs) having big tag brands and internationalstandards are expected to offer better qualityproducts in countries like India and reaction isbound to be more serious when such defectspass on into consumers' hands.

5. Now compare above with our good old Bajaj orVespa scooters in 1970s that had auto- lockingproblem of the handle bar steering lock, whichcaused several accidents. Company kept sellingthese products for long time before it could solvethe problem; forget about recalling product orstopping sales. The same scooter had problem ofunbalanced engine mounted on one side from

centre and the poor carburetor design forcingusers to tilt the scooter to kick start successfully.In fact this became butt of many jokes andactually a familiar feature to recognize Vespa/Bajaj scooter. Later, the company attempted tointroduce a centrally mounted engine after LML,Kanpur (Lohia Machines Ltd) launched latestscooter in India in collaboration with samecompany in Italy. Bajaj Auto could jolly well takeexcuse of technology not available or blaming onits collaborator but matter of business ethics andsocial responsibility do figure in such cases.

This case is illustrated to clarify meaning of productrecall. While locking of steering handlebar lock iscertainly a case for recall and repair or refund, theother defects were product's poor design qualities,but not case for a recall.

6. The Jodhpur Bar Association has, according to arecent report, disposed only less than 50 casesout of more than 600 complaints receivedagainst lawyers for malpractices but let off mostof even those who were proceeded against.Same is scene every where be it Delhi,Chandigarh or Chennai. This is case of serviceproduct failure and ethical and legal issuesinvolved as far as conduct of noble profession asof a lawyer is concerned and sure needshandling with firm hand. The credibility oflawyers anyway ranks almost to bottom justabove salesmen and below advertisingprofessionals (according to a recent survey inUSA). But here service defect is issue andcontrol on legal profession. Same applies tofleecing of patients by hospitals (Medicalinsurance policy has gone costly in India fromthis month August 2007 by almost 100%). Butthese are not cases for recall (Source: RajasthanPatrika 25th august 2007)

Recall have some definite situations whereunknowingly or by process failure faulty product orpackaging and labeling goes to market or thesafety related aspect is known only after product issold off to consumers and put to use.

Imported goods Issues and laws:The Food and Drug Administration (USA) says itwill, for the first time, test ingredients imported foruse in the human food supply in connection withthe nationwide pet food recall (Chinese made) thathas killed, by some estimates, thousands of pets.



In addition, the FDA announced plans to expandtesting of the animal food supply after hogs onfarms in three States were quarantined after testingpositive for the substance at the center of therecall, the toxic agent melamine. Wheat gluten,corn gluten, corn meal, rice bran and rice proteinare among the imported products being tested inboth the animal and human food supply.

Several incidents of Chinese made goods in USAmay give serious beating to leadership position toChina as manufacturing hub. A Chinese delgation ison way to USA to discuss food and product safetyissues.

So, Do all countries need some police orinvestigating agency to watch imported goods? Butwhat about out plethora of inspecting agencies inIndia about product and health safety and severalActs enacted nationally and internationally? We willjust see below what legal actions GOI has taken forimports.

The logistics of recalls

Whatever the term one may use, replacing aproduct highlights one aspect of the supply chaincalled "reverse logistics", which simply means theproduct distribution process is traced backward fromthe consumer to the manufacturer and obviouslymore painful then normal distribution forward.

In Nokia's case, Kishore says: "Our networkinglogistics is good, as Nokia has a good penetrationin India. However, we have tied up with severalcourier services so that customers get products intime. The maximum time taken for delivery will be10 days."

In India, players like DHL India use 'reverselogistics' solutions for returns and partsmanagement. AFL Chief Executive (Logistics), V VRao, said Indian companies are increasingly lookingat the reverse logistics business, though it isn'tconsidered profitable. Indian players are now settingup distribution centers and warehouses for thispurpose. For instance, AFL, which handlestransportation for Ericsson, is taking the help of itsservice centre.

In the US alone, the cost is an annual $100 billion.Third Party Logistics (3PL) providers (firms thatprovide outsourced or 'third party' logistics servicesto companies) see that up to 7 per cent of an

enterprise's gross sales are captured by returncosts.

Almost all reverse logistics contracts arecustomized. The 3PLs realize anywhere between 12-15 per cent of the profits on this business.

Another technology that helps with traceability isradio frequency identification (RFID) chips. Underimplementation by Wal-Mart but being a disputedaction whether it will benefit them at suchexorbitant cost.

Role of media is very important besides NGOs andconsumer safety organizations; and of courseConsumer Forums set up under COPRA.

"With consumer safety and brand perception on theline, timely action and customer convenience are ofthe utmost importance," says Bill Razzouk, CEO ofNewgistics.

Once a company has developed the product recallmessage in conjunction with the Consumer ProductsSafety Commission (CPSC), Newgistics works closelywith the company to deliver customized recallinformation to impacted consumers via email orpostcard communication.

Developers at Infosys' .NET Centre of Excellence(COE) have developed two proof-of-conceptapplications for the Retailing and Financial serviceindustries. These are the Order processing andProduct Recall application and the 'Straight-Through-Processing' product.

The Order processing and Product Recall applicationleverages Web services, mobile devices andseamless multi-channel integration. It showcasesthe benefits of data synchronization, automation ofkey business processes and perishable foods retailvalue chain integration in driving businessefficiencies and customer satisfaction.

Plan for avoiding recall in Pharma products-anexample:

Pharmaceutical giant GlaxoSmithKline is all set tointroduce its new drug across multiple geographies.For a company with significant product lineproliferation like GSK, the regulatory complianceaspect of packaging and labeling for specificgeography can become a significant cost as well asa potential liability. Even an insignificant artworkerror could easily force a product recall. For the



statistically minded, each recall typically costsbetween $1 million and $4 million, and it is saidthat in large pharmaceutical companies there maybe 20,000 artwork changes per year on packages.At Nipuna Services' artwork facility in Hyderabad, abunch of employees elaborate on dosage, schedule,composition and other information on GSK'smedicine packs.

Product recall and Product Liability:Insurance cover is one such action for companiesfor product liabilities. Here is an example of apolicy offered by ICICI Lombard (India).

ICICI Lombard-Product liability Insurance-What ithas to say?

Safety and reliability of products are an importantconcern to consumers, sellers & manufacturers.Faulty products can be hazardous for theconsumers' health & property. The manufacturer/seller of faulty product could be held liable for suchdamages, exposing themselves to financial losses.

Product liability insurance protects the companiesexposed to above risk by financially assistingpolicyholders in such situations. (Code: Misc 15).

Scope of cover:

This Policy broadly covers:

Legal liability of the Insured towards damages tothe third party arising due to faulty productsmanufactured / sold by the insured, liability withrespect to:

* Accidental death

* Bodily injury or disease

* Loss or damage to property

Legal costs and expenses incurred with the priorconsent of the Insurer and within the limit ofindemnity.

Significant Exclusions:

This Policy does not cover liability arising out of orin connection with:

* Product efficacy * Product recall * Productguarantee * Pure financial loss

* Terrorism, war & SRCC * Any professionalservices deficiency

* Personal injuries such as libel, slander * Fines,penalties and punitive or exemplary damages.

(Tata-AIG has also come out with productcontamination liability policy).

Indian Laws: Food Safety and Standards Act:

Let's look at some hazards stories in food andmedicines:

Food-borne illnesses are present in all parts of theworld, and extract an enormous toll in terms ofhuman suffering. Contaminated food contributes 1.5billion cases of diarrhea in children each year, whichmeans more than 3 million premature deaths,according to the World Health Organization(WHO).Accidental or intentional adulteration of foodby toxic substances can also result in serious publichealth incidents. In 1981-82, in Spain,contaminated rapeseed oil killed more than 2000people and caused disabling injuries to another20,000.In China, in 2002 more than 200 childrenwere sickened and 38 died when rat poison wasused to intentionally contaminate bakery products.Mustard oil contamination killed 60 and sickened300 people in India in 1998.

Therefore legislation providing for food safetyassumes great national importance and must beframed with due care. Constitution principles,especially those protecting the right to life, mustnot be contravened.

The health hazard aspect of food legislation shouldnot eclipse other rationale behind it. Significantly, itaffects livelihoods.

More than 70% of Indians depend on agriculture(which also accounts for 35% of India's GDP.

The small scale operators or the 'unorganizedsector' which is directly affected by it accounts for48% of the Indian food processing industry by oneestimate.

The Confederation of Indian Industry (CII) hasestimated that the food processing sector employs9 million persons.

Food Safety legislation has the power to destroythe livelihood of these persons, who are most oftenpart of the weakest sections of society.

On at least two counts, the Food Safety andStandards Act deserve serious consideration. TheAct needs to be examined in relation to theConstitutional spirit, but for that brief introductionabout what it seeks to do and how the black letterwill find implementation, is necessary.



The new legislation: salient featuresThe Food Safety and Standards Act is an'integrated food law,' designed to avoid thepreviously existing multiplicity of legislation. Itreplaces all previous laws relating to food.

It creates a specialized bureaucracy to administerits provisions headed by the Food Safety andStandards Authority.

The Act defines food in a broad manner, as "anysubstance whether processed, partially processed orunprocessed".

The Act applies to both large and small operatorsdefining a food business as "any undertaking,whether for profit or not and whether public orprivate, carrying out any of the activities related toany stage of manufacture, processing, packaging,storage, transportation, distribution of food orimport" of food.

The penalties provided are mostly in the nature offines and trial by special courts in case of seriousoffences.

The Act contains a provision under Section 69(power to compound offences), which empowersDesignated Officers to impose a fine of up to Rs 1lakh on petty manufacturers, hawkers, retailers etc.if they have a "reasonable belief" that an offencehas been committed.

There is provision for compulsory registration forevery food retailer, hawker, itinerant vendor andtemporary stallholder under regulations made bythe Act.

Country has been divided under 5 Zones with HOat Delhi.

Consumer Protection Act India (COPRA) enacted in1986 -provides faster relief to customer byenvisaging summary presentations before theForum, deficiency in service clause, defectiveproduct return or refund, right to information andcustomer education on consumer rights.

The three tier system is at District level, Stateappeal level and then National Commission.

It is fast legislation in separate courts establishedand has empowered customers quite a lot. Recentamendments have given powers to Forum Presidentto arrest the defaulting supplier to its award.Several NGOs are active in India as also consumerwebsites.

On Imports safety: Government has amended lawsto enforce discipline in liberalized import regimeunder IMPEX policy and also to keep a check vis avis other legislating countries

An excerpt from one such notification:MINISTRY OF COMMERCE & INDUSTRY

DEPARTMENT OF COMMERCENOTIFICATION NO.-44, (RE-2000)/1997-2002NEW DELHI: 24TH NOVEMBER, 2000

2. The following shall be added after paragraph 4of Chapter 1A: General notes regarding importpolicy, of ITC (HS) Classifications of Export andImport Items, 1997-2002:

4. All such packaged products, which are subject toprovisions of the Standards of Weights andMeasures (Packaged Commodities) Rules, 1977when produced/packed/sold in domestic market,shall be subject to compliance of all the provisionsof the said rules, when imported into India. Thecompliance of these shall be ensured before theimport consignment of such commodities is clearedby Customs for home consumption. Allprepackaged commodities, imported into India, shallin particular carry the following declarations:

(a) Name and address of the importer;

(b) Generic or common name of the commoditypacked;

(c) Net quantity in terms of standard unit ofweights and measures. If the net quantity inthe imported package is given in any otherunit, its equivalent in terms of standard unitsshall be declared by the importer;

(d) Month and year of packing in which thecommodity is manufactured or packed orimported;

(e) Maximum retail sale price at which thecommodity in packaged form may be sold tothe ultimate consumer. This price shallinclude all taxes local or otherwise, freight,transport charges, commission payable todealers and all charges towards advertising,delivery, packing, forwarding and the like asthe case may be.

5. A new Appendix V to Schedule 1 of ITC (HS)Classifications of Export and Import Items, 1997-2002, shall annexed as per annexure 'A' of thisNotification. ( 131 items existed as on date ofnotification)



6. Import of all the products as per Appendix V toSchedule 1 of the ITC (IIS) Classifications ofExport and Import Items 1997-2002, shall besubject to compliance of the mandatory IndianQuality Standards as mentioned in column 2 ofthe said Annexure, which are also applicable todomestic goods. For compliance of thisrequirement, all manufacturers/exporters ofthese products to India shall be required toregister themselves with Bureau of IndianStandards (BIS)."

This is issued in Public Interest.

RFID technology : For traceability and better handling of products in stores and supply chain

Pantaloon's experiment with RFID

Pantaloon's RFID pilot project is helping thecompany save time and improve the accuracy ofmerchandise movement, writes Vinutha V.

Pantaloon went in for RFID for its simplicity oftagging, efficacy of use, product buffering, ability tokeep track of over-produced items, and ability tomonitor product-line lead time at the warehouseand fast-moving product-lines. The companyselected a few lines of apparel, primarily shirts andtrousers, for its RFID pilot. The RFID applicationdeveloped by Wipro Infotech was tailored to theoverall solution in line with Pantaloon's businessprocesses and IT landscape (from the factoryoutward to the warehouse inward and from thewarehouse outward) in order to capture real-timedata. The application is integrated with Oracledatabase 10g and middleware along with animplementation of the RFID hardware. It integrateswith the existing IT infrastructure, the in-housedeveloped Retail Enterprise Manager (a specialvariety of ERP package). The main objective was tosmoothen the entire product lifecycle, introduceitem-level tagging for identification, and track theentire RFID roadmap with Pantaloon. The pilotingwas also to do an RFID feasibility study foradditional uses.

At the factory outlet, RFID tags were attached tothe merchandise and the data written to them.When the RFID-tagged merchandise comes throughthe inward gate, all related information such aspurchase and delivery orders will be fed in theinward terminals in real-time. After correlating therequirements of specific outlets with the

merchandise in the warehouse, the items allocatedfor different outlets will be transported. The tagsare removed once the RFID-tagged goods passthrough the outward terminal.

Efficiency and accuracy: After the RFIDimplementation, the time saved on the same isabout 80 percent in inward warehouse processingand 12 percent in outward. Real-time visibility ofitems during all stages of the supply chainimproved to 98 percent.

Pantaloon now aims to extend the application toproduction routing and scheduling, product recalland returns, and real-time data for categorymanagers for effective forecasting. "We expect thatthe RFID application will further help us to improvethe shopping experience, store layout and anyinventory situation. Going forward, we see the useof RFID technology to improve collaboration acrossour supply chain right up to the point of sale,"remarks Deshpande.

National Accreditation Board for CertificationBodiesClause 4.39: Where certification is suspended ratherthan withdrawn; the certification body shall requirethat, during the period of suspension, the suppliermakes no misleading claims as to the status ofcertification, and ceases to use the certificationmark on the products manufactured since the dateof notification of suspension. If relevant, thecertification body may require in addition: -

That no certified product is placed upon themarket; that potentially defective certified productis subject to corrective action, including productrecall where appropriate.

Traceability: Key issueTraceability has been defined by the InternationalOrganization for Standardization (ISO 8402) as the"ability to trace the history, application or locationof any entity by means of recorded identification".

Traceability is closely linked with productidentification. It may relate to:

the origin of materials and parts (food products andingredients); the product processing history; thedistribution and location of the product afterdelivery.

The matter of traceability has been raised invarious Codex Committees and Task Forces,including Codex Committee on Food Import and



Export Certification Systems, Food Hygiene, FoodLabeling, Food Additives and Contaminants,Committee on Fish and Fishery Products, TaskForces on Animal Feeding and Foods Derived fromBiotechnology.

The concept of "traceability" has already beenincluded in many Codex texts and is linked toproduct identification and recall procedures. Codextexts do not currently apply traceability to theorigin of foods and ingredients with the exception ofthe Country of Origin provisions of the GeneralStandard for the Labelling of Pre-packaged Foodsand the Guidelines for the Production, Processing,Labelling and Marketing of Organically ProducedFoods: Source: Codex India ( Ministry of health andFamily welfare)

ConclusionsProduct recalls are widely spread across variousindustries from medicines to food products toautomobile to household gadgets. The recalls oftenindicate poor product design and quality assurancefailure in company when processes are gooccasionally out of control or in some situationrecalls can take place when some outsourcedvendor makes mistakes or product was not testedenough by company and launched in market.Product recall does not have anything to do withnormal manufacturers warranty processes. Recallstake place when large number of consumer's safetyis at risk in any manner or major flaw takes placein product contents or labels.

The strong government participation, consumermovement and tough legislations are driving forcesbehind several product recalls by famous companiesand brands who can't afford to risk serious financialbeating in costly litigations and awards and loss ofgoodwill in market. Faster and low-profile is therecall, the better for company and cheaper. Reverse

logistics have to be built in distribution plans forpossible recalls. Product identification andtraceability concerns are being tackled bycompanies with latest technologies and also byState and quality enforcement bodies as describedabove.

Like Disaster management-Companies should haveexpress plan for possible product recall. Forautomobiles the exercise is quite expensive andcumbersome besides drugs and food products.

Insufficient supply chain visibility effects planningreliability in the automotive industry. According toA.T. Kearney, supply chain inefficiencies can wasteup to 25 percent of a company's operating costs.

A well-known example is the recall of 14.4 millionFirestone tires in 2000. The recall caused Ford aloss of approx. $ 2.6 billion. Being able to sayexactly on what cars the tires are used would havemade the recall faster, more precise and more"silent". Most recall actions are less spectacular, butthe cumulative effect is still significant. In 2000, forexample, 94 recalls were registered in Germany(Source: Auto-Id).

References

Toyota Tundra Recall Information - Toyota Recalls &Problems

Jeffrey Gold, Importer told to recall Chinese tires, AP,June 25, 2007

Topps Meat Co. folds after beef recall.", New York Times,Friday October 5, 2007. Retrieved on 2007-09-25.

"Topps Meat Co. of Elizabeth, which is involved in thesecond-largest beef recall in U.S. history, said today it isgoing out of business after more than six decades"

Australia bans China-made toy on toxic drug risk |International | Reuters



Telecom Sector in India - Yesterday and Today

Rakesh Kumar Sharma, Senior Lecturer of ManagementR.K. Yadav, Senior Lecturer of Management, Ansal Institute of Technology, Gurgaon

AbstractThis paper examines the growth Pattern oftelecommunication sector in India from prederegulated economy times to the current in thelight of technical and infra structural growth inthis segment and also envisages the future platformo which this industry is poised for.

T he telegraph act of 1885 governed thetelecommunications sector. Under this act,the government was in-charge of

policymaking and provision of services . Majorchanges in telecommunications in India began inthe 1980s. Under the Seventh Plan (1985-90), 3.6percent of total outlay set aside for communicationsand since 1991, more than 5.5 percent is spent onit (Figure 1). The initial phase of telecom reformsbegan in 1984 with the creation of Center forDepartment of Telematics (C-DOT) for developingindigenous technologies and private manufacturingof customer premise equipment. Soon after, theMahanagar Telephone Nigam Limited (MTNL) andVidesh Sanchar Nigam Limited (VSNL) were set upin 1986. The Telecom Commission was establishedin 1989.

When telecom reforms were initiated in 1994, therewere three incumbents in the fixed service sector,namely DoT (Department of Telecom), MTNL andVSNL. Of these, DoT operated in all parts of thecountry except Delhi and Mumbai. MTNL operatedin Delhi and Mumbai and VSNL providedinternational telephony.

Given its all-India presence and policy-makingpowers, the DoT enjoyed a monopoly in thetelecom sector prior to the major telecom reforms.However, subsequent to the second phase ofreforms in 1999, which included restructuring theDoT to ensure a level playing field among privateoperators and the incumbent, the service-providingsector of DoT was split up and called Departmentof Telecom Services (DTS). DTS was later

corporatized and renamed Bharat Sanchar NigamLimited (BSNL). This meant separation of theincumbent service provider from the policy-maker.Broadly, DoT is now responsible for policy-making,licensing and promotion of private investments inboth telecom equipment and manufacture andprovision of telecom services. BSNL, a corporatebody, is responsible for the provision of services.

A crucial aspect of the institutional reform of theIndian telecom sector was setting up of anindependent regulatory body in 1997 - the TelecomRegulatory Authority of India (TRAI), to assureinvestors that the sector would be regulated in abalanced and fair manner. TRAI has been vestedwith powers to ensure its independence from thegovernment. The government has retained thelicensing function with itself. The main issue withrespect to licensing has not been whether it shouldbe with the regulator but that the terms andconditions of licensing should involve consultationswith TRAI to ensure transparency in the biddingprocess Some of the main functions of TRAI includefixing tariffs for telecom services, dispute-settlementbetween service providers, protecting consumersthrough monitoring of service quality and ensuringcompliance to license conditions, setting servicetargets and pricing policy for all operators andservice providers.

Further changes in the regulatory system took placewith the TRAI Act of 2000 that aimed at restoringfunctional clarity and improving regulatory quality.TRAI can frame regulations and can levy fees andcharges for telecom services as deemed necessary.The regulatory body also has a separate fund(called the TRAI General Fund) to facilitate itsfunctioning. To fairly adjudicate any disputebetween licensor and licensee, between serviceprovider, between service provider and a group ofconsumers, a separate disputes settlement bodywas set up called Telecom Disputes Settlement andAppellate Tribunal (TDSAT).


Telecommunications is the transmission of data andinformation between computers using acommunications link such as a standard telephoneline. Typically, a basic telecommunications systemwould consist of a computer or terminal on eachend, communication equipment for sending andreceiving data, and a communication channelconnecting the two users. Appropriatecommunications software is also necessary tomanage the transmission of data betweencomputers. Some applications that rely on thiscommunications technology include the following:

Electronic mail (e-mail) is a message transmittedfrom one person to another through computerizedchannels. Both the sender and receiver must haveaccess to on-line services if they are not connectedto the same network. E-mail is now one of themost frequently used types of telecommunication.

Facsimile (fax) equipment transmits a digitizedexact image of a document over telephone lines. Atthe receiving end, the fax machine converts thedigitized data back into its original form.

Voice mail is similar to an answering machine inthat it permits a caller to leave a voice message ina voice mailbox. Messages are digitized so thecaller's message can be stored on a disk.

Videoconferencing involves the use of computers,television cameras, and communications softwareand equipment. This equipment makes it possible toconduct electronic meetings while the participantsare at different locations.

The Internet is a continuously evolving globalnetwork of computer networks that facilitates accessto information on thousands of topics. The Internetis utilized by millions of people daily.

Actually, telecommunications is not a new concept.It began in the mid-1800s with the telegraph,whereby sounds were translated manually intowords; then the telephone, developed in 1876,transmitted voices; and then the teletypewriter,developed in the early 1900s, was able to transmitthe written word.

Since the 1960s, telecommunications developmenthas been rapid and wide reaching. The developmentof dial modem technology accelerated the rate

during the 1980s. Facsimile transmission alsoenjoyed rapid growth during this time. The 1990shave seen the greatest advancement intelecommunications. It is predicted that computingperformance will double every eighteen months. Inaddition, it has been estimated that the power ofthe computer has doubled thirty-two times sinceWorld War II (With row, 1997). The rate ofadvancement in computer technology shows nosigns of slowing. To illustrate the computer's rapidgrowth, Ronald Brown, former U.S. secretary ofcommerce, reported that only fifty thousandcomputers existed in the world in 1975, whereas,by 1995, it was estimated that more than fiftythousand computers were sold every ten hours(U.S. Department of Commerce, 1995).

Deregulation and new technology have createdincreased competition and widened the range ofnetwork services available throughout the world.This increase in telecommunication capabilitiesallows businesses to benefit from the informationrevolution in numerous ways, such as streamliningtheir inventories, increasing productivity, andidentifying new markets. In the following sections,the technology of modern telecommunications willbe discussed.

Progress of reforms

a. Private Participation in Telecom - For theprovision of basic services, the entire country wasdivided into 21 telecom circles, excluding Delhi andMumbai (Singh et. al. 1999). With telecom marketsopened to competition, DoT and MTNL were joinedby private operators but not in all parts of thecountry. By mid-2001, all six of the privateoperators in the basic segment had startedoperating (Table 1). Table 2 shows the number ofvillage public telephones issued by private licenseesby 2002.

After a recent licensing exercise in 2002, thereexists competition in most service areas. However,the market is still dominated by the incumbent. InDecember 2002, the private sector providedapproximately 10 million telephones in fixed, WLL(Wireless Local Loop) and cellular lines compared to0.88 million cellular lines in March 1998 (DoTAnnual Report, 2002). 72 per cent of the totalprivate investment in telecom has been in cellularmobile services followed by 22 per cent in basic



services. After the recent changes, the stage is nowset for greater competition in most service areasfor cellular mobile Over time, the rise in coverageof cellular mobile will imply increased competitioneven for the basic service market because ofcompetition among basic and cellular mobileservices.

b. Teledensity and Village Public Phones (VPTs) -India's rapid population increase coupled with itsprogress in telecom provision has landed India'stelephone network in the sixth position in the worldand second in Asia (ITU). The much publicizedstatistic about telecom development in India is thatin the last five years, the lines added for basicservices is 1.5 times those added in the last fivedecades! The annual growth rate for basic serviceshas been 22 percent and over 100 percent forinternet and cellular services. As Dossani (2002)argues, the comparison of teledensity of India withother regions of the world should be made keepingin mind the affordability issues. Assuminghouseholds have a per capita income of $350 andare willing to spend 7 percent of that total incomeon communications, then only about 1.6 percent ofhouseholds will be able to afford $30 (for a $1000investment per line).

Teledensity has risen to 4.9 phones per 100persons in India compared to the average 7.3mainlines per 100 people around the world. Figure2 shows the growth rate of fixed and cellularmobile subscription between 1998 and 2002.Although, the coverage is still much higher in urbanareas - 13.7 in urban areas compared to1.4 in ruralareas, the government has made efforts to connectvillages through village public telephones (VPT) andDirect Exchange Lines (DEL). This coverageincreased from 4.6 lakhs in March 2002 to 5.10lakhs in December 2002 for VPT and from 90.1lakhs in March to 106.6 lakhs in December 2002for DELs. BSNL has been mainly responsible forproviding VPTs; more than 84 percent of thevillages were connected by 503610 VPTs withprivate sector also providing 7123 VPTs .

The overall telecom growth rate is likely to be highfor some years, given the increase in demand asincome levels rise and as the share of services inoverall GDP increases. The growth rate will be evenhigher due to the price decrease resulting from areduction in cost of providing telecom services. A

noteworthy feature of the growth rate is the rapidrate at which the subscriber base for cellular mobilehas increased in the last few years of the 1990s,which is not surprising in view of the relativelylower subscriber base for cellular mobile.

c. Foreign Participation - India has opened itstelecom sector to foreign investors up to 100percent holding in manufacturing of telecomequipment, internet services, and infrastructureproviders (e-mail and voice mail), 74 percent inradio-paging services, internet (internationalgateways) and 49 percent in national long distance,basic telephone, cellular mobile, and other valueadded services (FICCI, 2003). Since 1991, foreigndirect investment (FDI) in the telecom sector issecond only to power and oil - 858 FDI proposalswere received during 1991-2002 totaling Rs. 56,279crores (Figure 4) (DoT Annual Report, 2002).Foreign investors have been active participants intelecom reforms even though there was somefrustration due to initial dithering by thegovernment. Until now, most of the FDI has comein the cellular mobile sector partly due to the factthat there have been more cellular mobile operatorsthan fixed service operators. For instance, duringthe period 1991-2001, about 44 percent of the FDIwas in cellular mobile and about 8 percent in basicservice segment. This total FDI includes thecategories of manufacturing and consultancy andholding companies

d. Tariff-setting - An essential ingredient of thetransition from a protected market to competition isthe alignment of tariffs to cost-recovery prices. Inbasic telecom for example, pricing of the kind thatprevailed in India prior to the reforms, led to ahigh degree of cross-subsidization and introducedinefficient decision-making by both consumers andservice-providers. Traditionally, DoT tariffs cross-subsidized the costs of access (as reflected byrentals) with domestic and international longdistance usage charges (Singh et. al. 1999).Therefore, re-balancing of tariffs - reducing tariffsthat are above costs and increasing those belowcosts - was an essential pre-condition to promotingcompetition among different service providers andefficiency in general.

TRAI issued its first directive regarding tariff-settingfollowing NTP 99 aimed at re-balancing tariffs and



to usher in an era of competitive service provision.Subsequently, it conducted periodic reviews andmade changes in the tariff levels, if necessary.Table 4 shows the current level of telephonecharges in India effective from January, 2003. Re-balancing led to a reduction in cross-subsidizationin the fixed service sector. Cost based pricing, amajor departure from the pre-reform scenario, alsoprovides a basis for making subsidies moretransparent and better targeted to specific socialobjectives, e.g. achieving the USO.

e. Service Quality - One of the main reasons forencouraging private participation in the provision ofinfrastructure rests on its ability to provide superiorquality of service. In India, as in many developingcountries, low teledensity resulted in great emphasisbeing laid on rapid expansion often at the cost ofquality of service. One of the benefits expectedfrom the private sector's entry into telecom is animprovement in the quality of service tointernational standards. Armed with financial andtechnical resources, and greater incentive to makeprofits, private operators are expected to provideconsumers value for their money. Telephone faultsper 100 main lines came down to 10.32 and 19.14in Mumbai and Delhi respectively in 2002-03compared to 11.72 and 26.6 in 1997-98 (Figures 6and 7). Quality of service was identified as animportant reform agenda and TRAI has devisedQOS (Quality of Service) norms that are applicableacross the board to all operators (Singh et. al.1999).

Pre reform period and Telecommunication inIndia

Before 1990's Telecommunication services in Indiawere complete government Monopoly - theDepartment of Telecommunication (DoT).Government also retained the rights formanufacturing of Telecommunication equipments.MTNL and VSNL were created in the year1986.Early 1990's saw initial attempts to attractprivate investment. Telecommunication equipmentmanufacturing was deli censed in the year 1991.

A notable revolution has occurred in the telecomsector. In the pre reforms era, this was entirely inthe hands of the central government and due tolack of competition, the call charges were quitehigh. Further, due to lack of funds with the

government, the government could never meet thedemand for telephones. In fact, a person seeking atelephone connection had to wait for years beforehe could get a telephone connection. The servicerendered by the government monopoly was alsovery poor. Wrong billing, telephones lying dead formany days continuously due to slackness on thepart of the telecom staff to attend to complaints,cross connections due to faulty / ill maintainedtelephone lines, obsolete instruments and machineryin the telephone department were the order of theday in the pre reforms era.

Today, there are many players in the telecomsector. The ultimate beneficiary has been theconsumer. Prices of services in this sector havefallen drastically.

Telephone connections are today affordable toeveryone and are also easily available. Gone arethe days, when one had to wait for years to get atelephone connection. The number of telephoneconnections which was only 2.15 million (fixedlines) in 1981 increased to 5.07 million(fixed lines)in 1991. Today (as in 2003), there are 54.62million telephone connections of which 41.33 millionare fixed line telephone connections, 12.69 millionare cellular mobiles and the remaining 0.60 millionare WLL telephones1. Wireless in Local Loop (WLL)telephones and cellular mobile telephones wereunknown in India a few years ago. Cell phonescharges have come down so much that today onecan see even a common man going around with acell phone in his hand. The private companies aregiving various incentives to attract customers, asituation which is entirely opposite to the conditionsprevailing in the pre reforms era when one had towait for years to get a telephone connection.

The first step toward deregulation and beginning ofliberalization and private sector participation wasthe announcement of National Telecom Policy1994.NTP 1994 , for the first time, allowed private/foreign players to enter the 'basic' and the 'newcellular mobile section. FDI up to 49% of totalequity was also allowed in these sectors. The policyallowed one private service provider to compete inbasic services with the incumbent DoT in each DoTinternal circle. It allowed duopoly in cellular mobileservices in each circle. As part of theimplementation of the NTP 94, licenses were issued



against license fees through a bidding process. Thispolicy initiated the setting up of an independentregulator-the Telecom Regulatory Authority of India(TRAI), which was established in 1997. The mainobjective of TRAI is to provide an effectiveregulatory framework to ensure fair competitionwhile, at the same time, protect the interest of theconsumers.

Liberalization and reforms in Telecom sector sinceearly 1990's till date are briefed below:

1991-92:

1. On 24th July 1991, Government announced theNew Economic Policy.

2. Telecom Manufacturing Equipment license wasdelicensed in 1991.

3. Automatic foreign collaboration was permittedwith 51 per cent equity by the collaborator.

1992-93:

Value added services were opened for private andforeign players on franchise or license basis. Theseincluded cellular mobile phones, radio paging,electronic mail, voice mail, audiotex services,videotex services, data services using VSAT's, andvideo conferencing.

1994-95:

1. The Government announced a National TelecomPolicy 1994 in September 1994. It opened basictelecom services to private participationincluding foreign investments.

2. Foreign equity participation up to 49 per centwas allowed in basic telecom services, radiopaging and cellular mobile. For value addedservices the foreign equity cap was fixed at 51per cent.

3. Eight cellular licensees for four metros werefinalized.

1996-97:

1. TRAI was set up as an autonomous body toseparate the regulatory functions from policyformulations and operational functions.

2. Coverage of the term "infrastructure" expandedto include telecom to enable the sector to availof fiscal incentives such as tax holiday andconcessional duties.

3. An agreement between Department ofTelecommunication (DoT) and financialinstitutions to facilitate funding of cellular andbasic telecom projects.

4. External Commercial Borrowing (ECB) limits ontelecom projects made flexible with anincreased share from 35 per cent to 50 percent of total project cost.

5. Internet Policy was finalized.

1998-99:

FDI up to 49 per cent of total equity, subject tolicense, permitted in companies providing GlobalMobile Personal Communication (GMPC) by satelliteservices.

1999-00

1. National Telecom Policy 1999 was announcedwhich allowed multiple fixed Services operatorsand opened long distance services to privateoperators.

2. TRAI reconstituted: clear distinction was madebetween the recommendatory and regulatoryfunctions of the Authority.

3. DOT/MTNL was permitted to start cellularmobile telephone service.

4. To separate service providing functions frompolicy and licensing functions, Department ofTelecom Services was set up.

5. A package for migration from fixed license feeto revenue sharing offered to existing cellularand basic service providers.

6. First phase of re-balancing of tariff structurestarted. STD and ISD charges were reduced by23 per cent on an average.

7. Voice and data segment was opened to fullcompetition and foreign ownership increased to100 per cent from 49 per cent previously.

2000-01:

1. TRAI Act was amended. The Amendmentclarified and strengthened the recommendatorypower of TRAI, especially with respect to theneed and timing of introduction of new servicesprovider, and in terms of licenses to a servicesprovider.



2. Department of Telecom Services andDepartment of Telecom operations corporatizedby creating Bharat Sanchar Nigam Limited.

3. Domestic long distance services opened upwithout any restriction on the number ofoperators.

4. Second phase of tariff rationalization startedwith further reductions in the long distance STDrates by an average of 13 per cent for differentdistance slabs and ISD rates by 17 per cent.

5. Internet Service Providers were given approvalfor setting up of International Gateways forInternet using satellite as a medium in March2000.

6. In August 2000, private players were allowed toset up international gateways via the submarinecable route.

7. The termination of monopoly of VSNL inInternational Long Distance services wasantedated to March 31, 2002 from March 31,2004.

2001-02:

1. Communication Convergence Bill, 2001 wasintroduced in August 2001.

2. Competition was introduced in all servicessegments. TRAI recommended opening up ofmarket to full competition and introduction ofnew services in the telecom sector. Thelicensing terms and conditions for CellularMobile were simplified to encourage entry foroperators in areas without effective competition.

3. Usage of Voice over Internet Protocol permittedfor international telephony service.

4. The five-year tax holiday and 30 per centdeduction for the next five years available tothe telecommunication sector till 31st March2000 was reintroduced for the unitscommencing their operations on or before 31stMarch 2003. These concessions were alsoextended to internet services providers andbroadband networks.

5. Thirteen ISP's were given clearance forcommissioning of international gateways forInternet using satellite medium for 29

gateways.

6. License conditions for Global Mobile PersonalCommunications by Satellite finalized inNovember 2001.

7. National Long Distance Service was opened upfor unrestricted entry with the announcement ofguidelines for licensing NLD operators. Fourcompanies were issued Letter of Intent (LOI)for National Long Distance Service of whichthree licenses have been signed.

8. The basic services were also opened up forcompetition. 33 Basic Service licenses (31private and one each to MTNL and BSNL) wereissued up to 31stDecember 2001.

9. Four cellular operators, one each in four metrosand thirteen were permitted with 17 freshlicenses issued to private companies inSeptember/October 2001. The cell phoneproviders were given freedom to provide, withintheir area of operation, all types of mobileservices equipment, including circuit and/orpackage switches that meet the relevantInternational Telecommunication Union (ITU)/Telecom Engineering Centre (TEC) standards.

10. Wireless in Local Loop (WLL) was introduced forproviding telephone connection in urban, semi-urban and rural areas.

11. Disinvestment of PSU's in the telecom sectorwas also undertaken during the year. InFebruary 2002, the disinvestment of VSNL wascompleted by bringing down the governmentequity to 26 per cent and the management ofthe company was transferred to Tata Group, astrategic partner. During the year, HTL was alsodisinvested.

12. Government allowed CDMA technology to enterthe Indian market.

13. Reliance, MTNL and Tata were issued licenses toprovide the CDMA based services in thecountry.

14. TRAI recommended deregulating regulatoryintervention in cellular tariffs, which meant thatoperators need no longer have prior approval ofthe regulator for implementing tariff plansexcept under certain conditions.



2002-03

1. International long distance business opened forunrestricted entry.

2. Telephony on internet permitted in April 2002.

3. TRAI finalized the System of AccountingSeparation (SAS) providing detailed accountingand financial system to be maintained bytelecom service providers.

2003-04

1. Unified Access Service Licenses regime for basicand cellular services was introduced in October2003. This regime enabled services providers tooffer fixed and mobile services under onelicense. Consequently 27 licenses out of 31licenses converted to Unified Access ServiceLicenses.

2. Interconnection Usage Charge regime wasintroduced with the view of providingtermination charge for cellular services andenable introduction of Calling Party Pays regimein voice telephony segment.

3. The Telecommunication Interconnection UsageCharges Regulation 2003 was introduced on29th October 2003 which covered arrangementsamong service providers for payment ofInterconnection Usage Charges forTelecommunication Services and covered BasicService that includes WLL (M) services, CellularMobile Services, and Long Distance Services(STD/ISD) throughout the territory of India

4. The Universal Service Obligation fund wasintroduced as a mechanism for transparentcross subsidization of universal access intelecom sector. The fund was to be collectedthrough a 5 per cent levy on the adjustedgross revenue of all telecom operators.

5. Broadcasting notified as Telecommunicationservices under Section 2(i)(k) of TRAI Act.

2004-05:

1. Budget 2004-05 proposed to lift the ceilingfrom the existing 49 per cent to 74 per cent asan incentive to the cellular operators to fall inline with the new unified licensing norm.

2. 'Last Mile' linkages permitted in April 2004within the local area for ISP's for establishingtheir own last mile to their customers.

3. Indoor use of low power equipments in 2.4 GHzband de-licensed from August 2004.

4. Broadband Policy announced on 14th October2004. In this policy, broadband had beendefined as an "always-on" data connectionsupporting interactive services including internetaccess with minimum download speed of 256kbps per subscriber.

5. The Telecommunications (Broadcasting andCable Services) Interconnection Regulation 2004was introduced on 10th December 2004.

6. BSNL and MTNL launched broadband serviceson 14th January 2005.

7. TRAI announced the reduction of Access DeficitCharge (ADC) by 41 per cent on ISD calls andby 61 per cent on STD calls which wereapplicable from 1st February 2005.

2005-2006

1. Budget 2005-2006 cleared a hike in FDI ceilingto 74 per cent from the earlier limit of 49 percent. 100 per cent FDI was permitted in thearea of telecom equipment manufacturing andprovision of IT enabled services.

2. Annual license fee for National Long Distance(NLD) as well as International Long Distance(ILD) licenses reduced to 6 per cent of AdjustedGross Revenue (AGR) with effect from 1stJanuary 2006.

3. BSNL and MTNL launched the 'One-India Plan'with effect from 1st March 2006 which enablethe customers of BSNL and MTNL to call fromone end of India to other at the cost of Rs. 1per minute, any time of the day to phone.

4. TRAI fixed Ceiling Tariff for InternationalBandwidth, Ceiling Tariff for higher capacitiesreduced by about 70 per cent and for lowercapacity by 35 per cent.

5. Regulation on Quality of Service of Basic andCellular Mobile Telephone Services 2005introduced on 1st July 2005.

6. BSNL announced 33 per cent reduction in callcharges for all the countries for internationalcalls.

7. Quality of Service (Code of Practice for Meteringand Billing Accuracy) Regulation 2006introduced on 21st March 2006.



11th plan (2007-20012)

FDI in Telecom sector has increased in recent yearswith value of 81.62 billion with share of 10% intotal inflow during January 2000 to June 2005. Thisis mainly in telecom services and not in telecommanufacturing sector. Therefore, it is essential toenhance the prospect for inflow of increased funds.The NTP 1999 sought to promote exports oftelecom equipments and services. But till dateexport of telecom equipment remains minimal. Mostof the state-of-the-art telecom equipments includingmobile phones are imported from abroad. There isthus immense potential for indigenousmanufacturing in India. Certain measures likefinancial packages, formation of a telecom exportpromotion council, creation of integrated facilitiesfor telecom equipment through SEZ andencouraging overseas vendors to set up facilities inIndia, are required for making India a hub fortelecom equipment manufacturing and attract FDI.The telecom sector has shown robust growth duringthe past few years. It has also undergone asubstantial change in terms of mobile versus fixedphones and public versus private participation. Thefollowing table and discussions from the report ofthe working report on the telecom sector for the11th plan (2007-2012)will show the growth oftelecom sector since 2003:

CONCLUSION

Telecommunications is one of the fastest-growingareas of technology in the world. Because of its

rapid growth, businesses and individuals can accessinformation at electronic speed from almostanywhere in the world. By includingtelecommunications in their operations, businessescan provide better services and products to theircustomers. For individuals, telecommunicationsprovides access to worldwide information andservices.

REFERENCES

TRAI (March 20, 2006), Recommendations on Issuesrelating to Broadcasting and Distribution of TV channels.

Economic Survey, Annual Reports of the Department ofTelecommunications, Ministry of Communications andTechnology and the Telecom Regulatory Authority of India(TRAI)-various issues.

Business Standard: August 22, 2007

Panagariya, Arvind (2004). "India in the 1980s and1990s: A Triumph of Reforms".

"That old Gandhi magic", The Economist, November 27,1997.

Ahluwalia, MS. 2001, "State level performance undereconomic reforms in India" Working Paper No. 96, Centerfor Research on Economic Development and PolicyReform, Stanford University

Department of Telecommunications, Annual Report 2002-2003, Ministry of Communication and InformationTechnology, New Delhi

Department of Telecommunications "IndianTelecommunication Statistics: Policy Framework, Statusand Trends", Economic Research Unit (Statistics Wing),Ministry of Communications, New Delhi.

Dossani, R. (Ed.) 2002, Telecommunications reform inIndia. Quorom Books.



Stress among Bank Employees in India

Prof. Krishnan Nair, S.P. Jain Center of Management Dubai

AbstractThe advent of technological revolution coupled withglobalization, privatization policies havedramatically changed the patterns in all sectorsespecially the banking sector and that has resultedin stress among employees. This study wasconducted I Kollam and Ernakulam districts ofKerala and the findings are that there is significantlevel of stress between the banks in the nationalizedsector and the private sector. The stress is foundmore in nationalized sector and among other thingsthe stress factors are role conflicts, lack os seniorlevel support and role over loads

Introduction

Hans Selye first introduced the concept ofstress in to the life science in 1936. Hedefined stress as "The force, pressure, or

strain exerted upon a material object or personwhich resist these forces and attempt to maintainits original state." Stress is ubiquitous in oursociety. It has become an integral part of everydayliving. Researchers on stress make it clear that, toenter in to the complex area of stress, especially into the area of occupational stress, is very difficult.Stress is an unavoidable consequence of modernliving. With the growth of industries, pressure inthe urban areas, quantitative growth in populationand various problems in day to day life are someof the reasons for increase in stress. Stress is acondition of strain that has a direct bearing onemotions, thought process and physical conditionsof a person. Steers (1981) indicate that,"Occupational stress has become an important topicfor study of organisational behaviour for severalreasons." 1. Stress has harmful psychological andphysiological effects on employees, 2. Stress is amajor cause of employee turn over andabsenteeism, 3. Stress experienced by oneemployee can affect the safety of other employees,4. By controlling dysfunctional stress, individual andorganisation can be managed more effectively.

During the past decade, the banking sector hadunder gone rapid and striking changes like policy

changes due to globalisation and liberalisation,increased competition due to the entrance of moreprivate (corporate) sector banks, downsizing,introduction of new technologies, etc. Due to thesechanges, the employees in the banking sector isexperiencing a high level of stress. The advent oftechnological revolution in all walks of life coupledwith globalisation, privatisation policies hasdrastically changed conventional patterns in allsectors. The banking sector is of no exemption. The1990s saw radical policy changes with regarding tofiscal deficit and structural changes in India so asto prepare her to cope with the new economicworld order. Globalisation and privatisation ledpolicies compelled the banking sector to reform andadjust to have a competitive edge to cope withmultinationals led environment. The advent oftechnological changes, especially extensive use ofcomputers in the sector has changed the workpatterns of the bank employees and has made itinevitable to downsize the work force in the sector.The implications of the above said transformationshave affected the social, economical andpsychological domains of the bank employees andtheir relations. Evidence from existing literaturestates that more than 60% of the bank employeeshave one or other problem directly or indirectlyrelated to these drastic changes. Along with othersectors the banking sector also leaning towards thepolicy of appointing contract labours while variouscompulsive as well as rewarding options such asVRS, etc. All the factors discussed above areprospective attributes to cause occupational stressand related disorders among the employees.Although a lot of studies have been conducted onthe psychosocial side of the new policy regime inmany sectors, there are only few studies, as far asthe banking sector is concerned, while the samesector has been drastically influenced by the newpolicies.

In this juncture, the present study is undertaken toaddress specific problems of bank employeesrelated to occupational stress. This throw light in tothe pathogenesis of various problems related to


occupational stress among bank employees. Thestudy will be helpful to drawn up further policy onthe related fields and act as a secondary data forfurther research.

Review of Literature

Beehr and Newman (1978) define occupationalstress as "A condition arising from the interaction ofpeople and their jobs and characterised by changeswithin people that force them to deviate from theirnormal functioning."

Cobb (1975) has the opinion that, "Theresponsibility load creates severe stress amongworkers and managers." If the individual managercannot cope with the increased responsibilities itmay lead to several physical and psychologicaldisorders among them. Brook (1973) reported thatqualitative changes in the job create adjustmentalproblem among employees. The interpersonalrelationships within the department and betweenthe departments create qualitative difficulties withinthe organisation to a great extent.

Miles and Perreault (1976) identify four differenttypes of role conflict: 1. Intra-sender role conflict 2.Inter sender role conflict. 3. Person- role conflict; 4.Role over load. The use of role concepts suggeststhat job related stress is associated with individual,interpersonal, and structural variables (Katz andKahn, 1978; Whetten, 1978). The presence ofsupportive peer groups and supportive relationshipswith super visors are negatively correlated with R.C.(Caplan et al., 1964).

There is evidence that role incumbents with highlevels of role ambiguity also respond to theirsituation with anxiety, depression, physicalsymptoms, a sense of futility or lower self esteem,lower levels of job involvement and organisationalcommitment, and perceptions of lower performanceon the part of the organisation, of supervisors,and of themselves (Brief and Aldag, 1976;Greene, 1972).

Ivancevich and Matteson (1950) indicate, "Lack ofgroup cohesiveness may explain variousphysiological and behavioural outcomes in anemploy desiring such sticks together." Workplaceinterpersonal conflicts and negative interpersonalrelations are prevalent sources of stress (Dewe,1993; Lang, 1984; Long et al., 1992), and are

existed with negative mood depression, andsymptoms of ill health (Israel et al., 1989; Karasek,Gardell and Lindell, 1987; Snap, 1992).

Lack of participation in the decision making process,lack of effective consultation and communication,unjustified restrictions on behaviour, office politicsand no sense of belonging are identified aspotential sources of stressors. Lack of participationin work activity is associated with negativepsychological mood and behavioural responses,including escapist drinking and heavy smoking(Caplan et al., 1975).

According to French and Caplan (1975), "Pressureof both qualitative and quantitative overload canresult in the need to work excessive hours, whichis an additional source of stress." Having to workunder time pressure in order to meet deadlines isan independent source of stress. Studies shownthat stress levels increase as difficult deadlines drawnear.

Stress is often developed when an individual isassigned a major responsibility without properauthority and delegation of power. Interpersonalfactors such as group cohesiveness, functionaldependence, communication frequency, relativeauthority and organisational distance between therole sender and the focal persons are importanttopics in organisational behavior (Vansell, Brief, andSchuler).

Stress develops when an individual feels he is notcompetent to undertake the role assigned to himeffectively. The individual feels that he lacksknowledge, skill and training on performing the role(stress, conflict management and counseling,p.283).

Occupational stress is an increasingly importantoccupational health problem and a significant causeof economic loss. Occupational stress may produceboth overt psychological and physiologic disabilities.However it may also cause subtle manifestation ofmorbidity that can affect personal well-being andproductivity (Quick, Murphy, Harrell and Roman,1992). A job stressed individual is likely to havegreater job dissatisfaction, increased absenteeism,increased frequency of drinking and smoking,increase in negative psychological symptoms andreduced aspirations and self esteem (Jack and

Stress among Bank employees in India


Payne, 1980). The use of role concepts suggeststhat occupational stress is associated withindividual, interpersonal and structural variables(Kutz and Kahn, 1978; Whetten, 1978).

Studies on burnout found that, it is related toexhaustion and work over load factors in variousorganisations (Green and Walkey, 1988; Chermiss,1980; Freudenberger, 1977, 1980). Stress on thejob is costly for employers, reflected in lowerproductivity, reduced motivation and job skills, andincreased and accidents.

Because employees spend roughly one third of theirlives working in an organisational goal setting,employee mental health is of particular importance.Two people exposed to the same threateningsituation may differ substantially in the magnitudeand duration of stress responses and stress relatedhealth problems might emerge in severalcontrasting ways both physically and mentally.Some of these variations result from differences intemperament, social resources and the effectivenessof the coping responses that the individual brings tobear on the stressful transaction.

The present study is an attempt to investigate andto compare the level of stress experienced by theemployees of the Nationalised and Non-Nationalised banks in the Kottayam and Eranakulamdistrict of Kerala. The study aims to ascertain thelevel of stress and coping strategies adopted by thebank employees (both Nationalised and NonNationalised) in the Kottayam district.

Methodology

Population

The population selected for this particular study isemployees of Nationalised and Non-Nationalisedbanks in Kottayam and Ernakulam district of Kerala.

Sampling

The sampling population of this research includes200 employees of nationalised and non-nationalisedbank in Kottayam and Eranakulam district, ofKerala. Out of which, 100 employees fromNationalised and remaining 100 from Non-Nationalised bank. This research followed thesystematic random sampling method representativepopulation. The population belongs to an age groupof 30-40. Only male population considered in thisresearch.

Tool of data collection

A multi dimensional analysis of job stress andcoping patterns of employees is the primary focusof this research. A methodology adopted for thisresearch is given below.

The variables selected for the study are: -

1. Role Conflict

2. Role Overload

3. Role Ambiguity

4. Lack of Group Cohesiveness

5. Feeling of Inequality

6. Lack of Supervisory Support

7. Constraints of Changes, Rules and Regulations

8. Job Difficulty

9. Inadequacy of Role Authority

10. Job Requirements Capability Mismatch

Objective

1. To analyse the level of occupational stressamong the Nationalised and Non-nationalised bankemployees.

Hypothesis

1. Stress will be higher among Non-nationalise bankemployees compared to nationalised bankemployees

MAJOR FINDINGS

1. There is significant difference in the level ofoccupational stress between Nationalised and Non-Nationalised bank employees.

2. Occupational stress is found higher among Non-Nationalized employees compared to Nationalisedemployees.

3. Among different occupational stress variablesRole over load, Role authority Role conflict and Lackof Senior level Support contribute more to theoccupational stress among Non-Nationalizedemployees compared to Nationalised employees.

Discussion

This section incorporates a short discussion, only onthe first major four stress factors, widely recognisedin this research finding, that in tune with thehypothesis; even though the study found significantdifference at all variable selected for the study.



The findings of present research are in line with thehypothesis stated above. The hypothesis stated thatStress will be higher among non nationalized bankscompared to nationalized banks. The findings of thepresent research accept the research hypothesis, asit observed significant difference between the twosectors, in the level of organisational stress. Thefindings clearly indicate that stress is higher amongnon-nationalised bank employees compared tonationalise bank employees. The analysis of stressamong nationalised and non nationalised bankemployees indicates that the in both sectors theRole over load, Role authority, Role conflict andLack of Senior level Support are the majorstressors in this research. The discussion here is inline with the significant variable selected for thestudy.

The study indicates that the non-nationalisedemployees have high workload compared tonationalise bank employees. The members feel thatthe work allotted is taxing to the employees and itis beyond their expertise and limit. Cobb (1975)has the rightly pointed out in the context that "Theresponsibility load creates severe stress amongworkers and managers." Member's confidence on hisor her own performance expectations andcontributions at work are affected because of hurrynature of work. A feeling of incongruity betweenthe skills they have the workload given to them isthe factor behind high stress among members innon-nationalised bank.

The study indicates that the non-nationalised bankemployees have high role conflict compared tonationalise bank employees. This indicates that aset of expectations applied to the incumbent by theorganisation and the role they perform within theorganisation is not in congruence with each other.Lower the levels of role clarity members feel atwork higher the level of stress. Cooper and Marshall(1978) rightly indicates in this context thatindicated that "role conflict exists when anindividual in a particular work role is torn byconflicting demands or doing things he or she reallydoes not want to-do or does not think our part ofjob satisfaction". In the turbulent competition statusof in banking sector existence is the factor thanmaintenance. Members have to work under

pressure, to compete with other non-nationalisedbanks. Member having different work skill andexpertise also have to tune their work inaccordance with the demand. Here the chances ofrole conflict and its impact will be higher. McGrath(1970), rightfully pointed out that " stress is asubstantial imbalance between the environmentaldemand and the response capability of the focalorganism." The finding of Lazarus and Folkman(1980), also substantiate the discussion that stresswill generate among human beings where aparticular relationship between the person and theenvironment, that is appraised by the person astaxing or exceeding his her resources andendangering his/her well being." The situation ofnon-nationalised bank employees is similar to theabove-mentioned findings of eminent researchers.Where there is high uncertainty about their natureof work, develop high job stress among members.

The study indicates that the non-nationalized bankemployees have high ambiguity compared tonationalize bank employees. Higher the ambiguityrelated to the work and work schedule higher theoccupational stress. The role ambiguity results whenthere low congruity between the expectations of thework behaviour and the scheduled task. There islack of clarity about what to do, when to do, whereto do and how to do. Experimental and longitudinalstudies of the effects of role ambiguity reveal thatlack of clarity about behavioural expectations causesa great concern with own performance, lower actualand perceived group productivity, less concern orinvolvement with the group, lower job satisfaction,unfavourable attitudes towards role senders, andincreased tension, anxiety, depression, andresentment (Caplan and Jones, 1975). The presentresearch is in line with the above finding that themembers of non-nationalised members are facinghigh role ambiguity at work because of lack ofclarity about behavioural expectations on work.Higher the level of ambiguity, higher the level ofstress experienced by members at work. Lack offree flow information all across the hierarchicallevel, is the problem lead to role ambiguity atwork. Role ambiguity exists when an individual hasinadequate information about his work role.



The study indicates that the non-nationalized bankemployees have high feeling towards lack ofsupervisory support compared to nationalize bankemployees. This indicates that the non-nationalizedbank employees are not getting adequate supportfrom the superiors in their work accomplishmentsand dissemination of functional duties. Lower thelevel of support employees obtained from theorganisation higher the level of stress experiencedby the employees at work. The superior'scontribution to buffer the effect of work stress isfound less in this research. Anoopsingh et al.(1991) rightly indicates that "Greater support fromsupervisors and co-workers in the workplace isstrongly associated with greater feeling of well-being and any undermining from their part put theemployee under irritability, anxiety, depression, andsomatic disorders." Inadequate support given by thesuperiors and their subordinates contributeconsiderable stress for employees in non-nationalized bank in this research.

Implications

1. Physical problems and health problems like heartdiseases, ulcers, arthritis, increased frequency ofdrinking and smoking, cardiovascular,gastrointestinal, endocrine and other stress relateddisorders

2. Psychological and behavioural problems:psychological problems like change of moods,inferiority complex, widespread resentment, reducedaspirations and self esteem, reduced motivation andjob skills,

3. Organisational: job dissatisfaction, behaviouralproblems, production turn over, increasedabsenteeism, increased accidents, lower productivity,

Recommendations

To alleviate the negative consequences of stressmore effort on the part of policy makers,practitioners, and organizational managementenvisaged. The author, there by making a few effortto suggest some effective measures, that canalleviate the stress of bank employees and leads totheir better adjustment within the organisation.They can be detailed as follows:

Program

Stress Management Program

Objective

Organize a Stress Management Program thatfocuses on different leave categories of employeesat all hierarchical level.

Many situational observations of employee employerinteraction identified within the organization canlead to stress at work. These include:

Relationships with co-workers

An unsupportive supervisor

Fear towards management

Lack of consultation and communication

Too much interference with employees private,social or family life

Too much or too little to do

Too much pressure, unrealistic deadlines

Work that is too difficult or not demanding enough

Lack of control over the way the work is done

Poor working conditions

Being in the wrong job

Feeling undervalued

Feeling Job difficulty

Insecurity and the threat of unemployment

Organize Stress Management training programs'with specific human resource development goals inconsultation with Senior Management.

Prerequisites

A successful Stress Management training programs'requires the involvement and support of top officialsand the cooperation from employees. It dependsupon a clear plan, ongoing evaluations of progress,and clear goals for measuring success.

Stress management Strategies

1. Take adequate steps to redesign jobs, which aretaxing to employees' abilities and capacities.

2. To reduce the workload role slimming and roleadjustment process should be resorted to.

3. Encourage the cross-functional andinterdepartmental work arrangements to reducework related stress among low performers andlow achievers.



4. Facilitate role enlargement, role linkage and roleenrichment to manage role isolation, self-roledistance and role erosion.

5. Adequate role clarification to be made whenevernecessary to eliminate role ambiguity.

6. Introduce more job oriented training programs,which improve employees skill and theirconfidence to work effectively.

7. Do concentrate on career planning to managerole stagnation.

8. Encourage open channel of communication todeal work related stress.

9. Let the employee clear about hard work relatedreward and smart work related reward.

10. Adequate resources i.e., material, technical andhuman, should be extended to make employeefeel safe and secure to perform their workeffectively.

11. Undertake stress audit at all levels in theorganization to identify stress area improvingconditions of job and alleviating job stress.

12. Ensure justified use of grievance handlingprocedures to win trust and confidence ofemployees and reduce their anxiety and tensionrelated to job related problems.

13. Encourage involvement of leaders and personnelat various levels in all phases of strategicinterventions to ensure successful and long-standing interventions.

14. Formulate HRD interventions and individualstress alleviation program.

15. Introduce 'Pranayam' (Brain Stilling and controlof Vital Force) as a holistic managerial strategyto deal with occupational strategy.

16. Provide counseling on work related andpersonnel problems and support from a team ofwelfare health and counseling staff.

17. Attractive system of reward and recognition ofgood work.

18. Ensure an organizational climate with careerplanning and career growth to ensure furtherthe retention of talented employees.

19. Extent the counseling practices at employeefamily level including dependents and relatives.

20. Effective follow up should be made to differentleave category absentee employees.

21. Organization should organize regular check upand those found suffering from very high stressshould be subjected to stress managementprocess.

22. Cut back excessive hours, which directly affectthe employee's physical fitness.

23. Develop realistic self-concept among employeesthat is neither inflated nor deflated.

24. Encourage management to practice proactiveapproaches rather than reactive approaches asa strategic step.

CONCLUSION

The productivity of the work force is the mostdecisive factor as far as the success of anorganisation is concerned. The productivity in turnis dependant on the psychosocial well being of theemployees. In an age of highly dynamic andcompetitive world, man is exposed to all kinds ofstressors that can affect him on all realms of life.The growing importance of interventional strategiesis felt more at organisational level. This particularresearch was intended to study the impact ofoccupational stress on Nationalized and Non -Nationalized Bank employees. Although certainlimitations were met with the study, every efforthas been made to make it much comprehensive.The author expects to draw attention from policymakers and men of eminence in the related fieldsto resume further research.

References and Bibliography

Beehr, T.A.& Newman, J.E. (1978). "Job Stress, employHealth and Organisational Effectiveness- A fact analysismodel and literature reviews." Personal Psychology, 31,pp.665-669.

Caplan, R.D., & Jones, K.W. (1975). "Effects of workload, role ambiguity, and type A personality on anxiety,Depression, and heart rate." Journal of AppliedPsychology, 60,713-719.

Chermiss, C. (1980). "Staff burnout: "Job stress inhuman service." Beverly Hills: Sage.



Dewe, P.J. (1989). "Examining the nature of work stress:Individual evaluations of stressful experiences andcoping." Journal of Human relations, Vol.42, No.11,pp.993-1013.

Ivancevich, J.M.& Matteson, M.T. (1980). "Stress andWork: A Managerial Perspective." Scottforesman & Co.,Glen view Illinois.

Ivancevich, J.M., Matteson, M.T. and Preston. (1982)."Occupational Stress: Type A behaviour and physical wellbeing." A.M.J., 25,2, 373-391.

Kahn et.al. (1964). "Organisational Stress: Studies in roleconflict and ambiguity." Wiley, New York.

Portello, J.Y. and Long, B.C. (2000). "Appraisals andCoping with work place interpersonal Stress: A model forwomen managers." Journal of Counseling Psychology,Vol.48, No.2, pp.144-56.

Selye, H. (1974). "Stress without Distress." Harper andRow Publications, U.S.A.

Selye, H. (1936). "A syndrome produced by diversenoxious agents." Nature, 138:32.

Selye, Hans. (1978). "The general adaptation syndromeand the disease of adaptation." Journal of clinicalendocrinology.

Shailendra Singh. (1990). "Organisational Stress and

Executive Behaviour." Sreeram Centre for IndustrialRelation and Human Resources, New Delhi.

Shailendra Singh, (1990). "Executive under stress-Exploration in the Structure and Dynamics." ClassicalPublishing Co., New Delhi.

Vansell, M., Brief, A.P. and Schuler, R.S. (1981). "Roleconflict and Role ambiguity: Integration of the literatureand directions for future research." Journal of Humanrelations, Vol.34, No.1, pp.43-66.

Additional Readings

Ahmed, S. Nurala, B.S. (1985). "A Study of Stressamong executives." Journal of personality and clinicalstudies,Vol.1, No (2), pp.47-50.

Bajpai, B.L. (1992). "Stress management." FinancialExpress, Bombay, June.

Halt, R.R. "Occupational Stress." (1982). In Handbook ofStress: Theoretical & Clinical Aspects. Leo Golberger &Shlome Breznats (Eds.), Free Press, London.

Pestonjee D.M. (1992). "Stress and Coping the IndianExperience." Sage Publications, New Delhi.

Sreelatha, P. (1991). "Stress: A Theoretical Perspective."Stress: Sources, Effects, and Resolution Strategies andStress Research Indian Perspective in OrganisationalStress. V.S.P.Rao Eda. Sage Publishing House, New-Delhi,pp6-163.



Balanced Scorecard - its Manifestations

Prof. R.K. Gupta, Professor of Management & Senior Business Consultant, ICFAI Business school

AbstractThis paper discusses the measurement design ofbalanced scorecard in terms of stakeholdersatisfaction, strategies, process, capabilities andstakeholder contributions. The author concludesthat the approach has to be varied and redesignedon situations concerned and markets where onefocuses to operate.

Keywords: Business Environment changes in India,Balanced scorecards, Performance Prism, CriticalSuccess Factors, Indian babus (officials).

India's Business Environment- A quick retake/recapitulation

Indians as usual are very fond of Western theories(The assumption being that whatever is developed,taught and published in West is the best .It ispartly true also) and any word from a whiteacademician and now even almond eyed yellowguys is taken as a historical event and gospel.Deep seated inferiority in our professionals andentrepreneurs is deeply rooted in following :>

* Our forgetting the glorious historical past ofIndian arts and crafts and how internationaltrade was conducted by Indian merchants,successfully and impressively (Our global tradeshare has gone down to 0.8%)

* Profiteering even up to point of cheating (Somecountries like china are no exceptions to this) ismain stay of most Indian businessmen, whateverthey talk.

* Bone-less entrepreneurs and employees arehighly risk shy and depend on governmentsupport for ready-to-eat meal like technology,licenses, permits and subsidies and support(Crutches in fact). We clamor for Level playingfield ( I never understood the real meaning ofthis), now whatever that means to Indianbusinessmen like those big guys callingthemselves Bombay club, and FICCI and FIEOand IMC etc.

* Complete disrespect for knowledge and forservice people like professors, technicians,researchers and consultants as everything hasonly one metric -Profits-cash and surplus andtangibility of goods. Fat returns on investmenteven if ethics are put aside (A typical Marwariwould want Pay- back period of 1.5 to 2 years).No reinvestment as entrepreneurs are very quickin India to divert business funds for personalassets creation and same tendency is seen inrampantly corrupt and arrogant, mafia networkedcivil servants. They take bribes, steal publicmoney from projects and purchases and misuseeverything including cars and office trips to takespouse and family along. Make fraudulent foreignvisit of national importance.

* Corruption alone is costing nation more than20% in costs AND productivity lost at variousstages. India's 30% GNP is being pumped out bythis corrupt nexus of businessman-babus andpoliticians. Thus concentration of wealth in fewhands, impoverishment of urban and ruralconsumers is creating big problem in purchasingpower and this is attempted to be met byincreasing taxation and free distribution oflargesse ( Like in USA they have started feelingheat). One of main reason of Indian textileindustry going down the drain was this tradingmentality of top industrialist of country exceptionbeing a few.

* No interest of Indian industry in Research andcreating new things on their own. Copying iseasy, less costly and even free. But they areoutdone by Chinese, Taiwanese and Koreans inthat too.

Now against this backdrop, in 1991 promises wasshown to Indians that Liberalization (A newpanacea is being imported from west-(Post Uruguayround and Washington Consensus) is a newimported funda (idea) from UK and USA and theirallied lobby. This will alleviate all social andeconomic problems of India. People will becomerich, fountains of money will start sprouting from


below the ground in every village and India willturn into heaven and proverbial old Sone Ki Chiriya.So L.P.G process was started. First, the Indianentrepreneurs cried, howled and protested and thenquickly learnt the tricks and fell in line once theynoticed , there is good and easy money in it.Several clauses of WTO made it easy for MNCentries in India.

MNCs, to operate in India, also needed localpartners, particularly in complex and corruptcountry like ours. So at high salaries watchdogemployees (basically their job is to wag tails fortheir masters at MNC HQs and keep their moneyand interests safe in India) were hired at hugesalaries as a still cheaper substitute to deputationof their own native experienced executives whowould have cost much more and even could havefailed in India, where even a police officer hashearing problem unless the disease is treated withcolor of green back before the eyes.

Thus we as Indians forgot over last 5 centuries ofsubjugation- our arts, craftsmanship, our businessacumen; the way international businesses were runand the Principle of good Public administration('Arthashastra' by Kautilya) and also forgot toinnovate new products and models like inmathematics and other sciences (even powerlessplanes were created once in India) > Known for itsintellectual capital in past history, modern Indianbusinessmen and government have together failedto take advantage of this genetic treasure ofIndians focusing on bribery, exploitation and quickmoney.

So then Liberalisation process started and consumerhoped that "happy days are here again' and peoplewill get international quality goods, mass producedand delivered in a license Raj free competitiveenvironment. But just opposite has happened.Where is competition in India really? Is consumerable to have access for redress? How complex areconsumer forum proceedings? How much time, theywould take? The corrupt people in Indian Parliamentpassed a RTI Act to show people that theGovernment seriously means business. Actually it isso complex and toothless Act with impotentInformation Commissioners in Centre and State thatnothing comes out of RTI application except forharassment and indignation. No officer is afraid of

this Act as adequate penalties are not included andwhat if an officer simply tears off paper from files?In any case there was never any need to enactsuch an act as Constitution and very model ofdemocracy needs transparency and accountability tocitizens of all elected or appointed public servantright up to President of India. They are anywaybound to act and inform on disposal of a grievance.We have separate Ministry also for publicgrievances. So we passed many Acts includingcontroversial SEZ Act, but left as always all ofthese loose for poor implementation. Same appliesto modern management practices in Indiancompanies and quality models like Scorecard, EVA,and ISO 9000 and so on. To be framed andshowcased in reception hall of CMD office or evenPMO.

India is one of few countries where a law abidingconsumer cum citizen suffers daily life ofindignation, unfairness, cheating and oppression. IfLPG (Liberalization, Privatization-which never reallyhappened seriously, and globalization) were amechanism to bring competition, capacityinstallation and creativity in country, why priceshave not fallen and quality has not gone up in last15 years except for electronics where Moore's lawis operating. As far as customer service attitude isconcerned , like typical old British time barkingclerks, the service executives and officers ingovernment and private sector both still keepbarking on citizens ,show their supremacy wantingbest perks and salaries and ignoring complaints andduty . Even in industry they either don't reply at allor give auto-reply and then go to a long sleep tillbuyer forgets about his or her grievances.

So in this setting, India is undergoing economic andsocial transformation where 80 % people claim tobe called downtrodden and backwards and fight onstreets for same. Is not that a national shame?They keep clamoring for government help like ourboneless industrialists and businessmen asexplained above. As we were always dependent onSarkar ( government) -To design projects for us,provide cheaper (even looted and snatched arableand fertile land from farmers), low cost loans,rescheduling of loan defaults, subsidized rawmaterials and so on and on and on. Indianentrepreneurs normally are not any better thancollecting abnormal profits whatever way these can



be managed. Rest work is to be done bygovernment who foolishly try to run economy andindustry fortunes by largesse distribution and taxrate and interest rate manipulation (which are atbest short term Quick fixes in economics theory)

So in such an unbalanced economy (where there isno consumer surplus really) and businessenvironment we are going to talk about innovationand balanced score card system.

The prerequisite for any system to succeed is firsta balanced mind and balanced character which weas Indians mostly lack right up to the top mostindustrialists of India (with due apologies)

Western theories Vs Indian systems:

A close scrutiny of some famous managementgurus' present and past theories including that fromUSA and Japan simply show pure commonsenseand such many practices were already used inIndia by spirited entrepreneurs in long past andeven today. Take example of Kan Ban and Leanmanufacturing- Marwari entrepreneurs have beenusing this trick indirectly by keeping the feed linea little starved which worked like a good 'fasting'works on human body. The toxins are thrown out.So most of unwanted material and stocked itemsare hunted out by employees and utilized forproduction. It also gives them time to experimentfor producing good item from bad inputs orintermediary goods and for improving qualitysystems. Production order was released againstconfirmed or in-pipeline orders only (except formass produced commodities like cement).

The Marwari Perta system is one of world's bestmethods to ensure productivity expressed in termsof finance figures. That is where it lacked ascompared to balanced scorecard and Performancepyramid 2 views. But I myself have combinedseveral such methods to produce daily progressreports that gave overview of all critical points ofproduction and operations for productivity metricsand finally the profit in terms of money.

The minute study and short listing of criticalprocesses in business operations and critical factorsof success is must for balanced working of anorganization.

The ' core competence' model of C K Prehlad andhis 'bottom of pyramid' (though an Indian professor

-but now settled in West ) are nothing but old winein new bottle for western economist's consumptionas they never saw need for this and with increasedindustrialization diversification was a temptingalternative . Hindustan Levers and ITC typecompanies long back attempted penetration in ruraluntapped markets. They were also involved insocietal marketing like distribution of condomsthrough their network which they did not ostensiblyliked much and abandoned.

A large number of Indian entrepreneurs have beenusing these core competence strategies and havebeen successful since ages. Many units later died asthey diversified frittering away resources and failingto build diversely capable organizations. Thuscreating a competent and committed workforce (Notby theory X or Y) and competent organization workforce is as crucial as financial projections andplanning. But in India most planners are basicallyaccounting clerks influenced by Charteredaccountants and Tax avoidance (read planning)advisors. How to manipulate tariffs and governmentfavors.

Western economist never needed to identify potentialof lower rung of consumers in society because it didnot much existed, simply as the society thoughcapitalist, has to its credit fairly satisfactorydistribution of wealth across the citizens, unlike inIndia or Pakistan. So what Prehlad talks about issimply in context of badly managed developingcountries. Anyone knows that with 70 crores peopleeven though spending less than Rs 1000 per yearper head make it a market of Rs 700,000 millionsor INR 70 Bn which is still just peanuts vis a vis anymajor country and in global context. So what 'bottomof pyramid' he is talking about and for where? Worldclass facilities cannot be conceived and logistics soeasily set up to distribute more than 1000 frequentlyused commodities and products scattered around in4000 kms by 3500 km length and breadth of acountry with bad roads and railways network, potholes, road blockades, dust in across over 600,000villages. It is gigantic task. Talking of pyramid is veryeasy. Both Indian governments and industrial lobbieshave failed to invest in this with, as an indicator, 30-40% fruit and vegetable go waste in India.

It is simple theory of economics that when needarises either buyer finds the seller, or vice versa.Once rural incomes have started rising thanks to



unproductive largesse distributed by our foolishplanners and pseudo economic experts, the ruralmarkets have started developing on their own. Hereis where huge micro level employment potential liesbut is being neglected.

I as marketing executive having traveled from onebackward area to other backward areas and Metrosall over the country in 70s and 80s realized thispower of lower part of pyramid. The point is howsincere are we to tap it and do we need that andcan we do it? When even after 16 years of LPG,we are still having suppliers' cartels, suppliermonopoly, shortages of basic commodities andunfair trade practices, adulterated goods, with risingprices across the board @ 15-20-% per annum onaverage. It is alarming and shameful situation.Probably it points to lack of national character.

Indians having not even 2% of indigenoustechnology content in their manufactured andservice sector outputs claim to become superpower,fooling the people (Vote banks) and showing daydreams.

The only advantage India has is poor regulationsthat allows Multi national companies (Union carbidefor example) to spread pollution in the country andthe cheap & greedy illiterate labor that is still quitecheap (Even technically qualified skilled labor) andless demanding despite low productivity ( ½ to 1/10th of other countries in various areas). It is alsoa test laboratory for dangerous and new chemicalsand drugs. India has surplus labor market withlarge number of people not even earning $1 perday. There are hardly any welfare laws in Indiaexisting, in reality, in majority of organized privateand almost 100% of unorganized sector; whereasPublic sector is full of corruption, low productivity,politicization, and huge expenditures making themunproductive and in competitive.

Huge salaries given by a few MNCs and theentrenched rich IIT and IIM alumni network to theirjuniors are used as a cover up for lack ofemployment, exploitation of majority of labor, lackof any protection and welfare laws for labor anddismal condition of unorganized sector labor.Without building infrastructure and preparatory workwe move fast and jump queues in areas thatbenefit like CEOs fixing Rs 10 to 100 Million annualsalaries and perks in a country for themselves

where decent living costs only just Rs 50,000 PM inDelhi or Mumbai.

Even, Quality controlling agencies like BIS, AICTE,for example, have miserably failed to monitorquality and prevent exploitation of Employees;exploitation of professionals and teachers, alike. Canyou imagine a management Professor getting Rs20,000 per year- much lesser than starting salaryof a fresh MBA pass out and a physics teacher inschool getting Rs 4000 PM as against Rs 1.2 croressalary fixed for MD of Maruti Udyog , as anexample? And we talk of Great Indian economy,super power and Indian talent? Brain drain is wherethe Indian talent is going. Indian industry is stillnot understanding the big mistakes westerneconomies did; trying to exploit and not empowerconsumers and employees. Capital formation inIndia is in private domain only and not in nationaland productive assets. Most of it is in surreptitiousform unavailable for productive employment.

So what an organization in India has to face? Theyneed to balance their prejudices and mind sets ofprofiteering, exploitation and tax evasion first,before balancing of strategic goals?

The unbalanced -Balanced score card:

The Balanced Scorecard is a strategic management(Strategy is a much abused word since last 20years) and measurement system that links strategicobjectives to comprehensive indicators or metrics/performance criteria).

It recognizes that companies have a tendency tofixate on only a few measurements1 (In Indiamainly the figures below the bottom line) - and thisblinkers their assessment of how the business isperforming overall (With still high protection,political corruption and nexus and cartel formingand short capacities for almost all commodities,does it really matter?). The Balanced Scorecardfocuses management attention on a set of otherkey performance indicators (metrics) to provide anoverall view.

The concept was originally created by RobertKaplan, the Marvin Bower Professor of LeadershipDevelopment at Harvard Business School, and DavidNorton, co-founder of the consulting companyRenaissance Solutions. They have written abestseller The Balanced Scorecard: Translating



Strategy into Action (1996). (The problem withIndians is translation and implementation and notconceiving ideas. We are very fertile planners andday dreamers, otherwise)

(There is very interesting phenomenon going onsince last 50 years- Publish or Perish in academicworld globally. So same product is edited cut,modified and repacked and new and new jargonsare coined by so called academicians and professorsof eminence, to prevent from getting perished).Balanced score card is also one such jargon andnew concept coming out of competitive researchand publishing, though with due regards to itsoriginators.

Kaplan and Norton compared running a company toflying a plane 1. The pilot who relies on a singledial is unlikely to be safe. Pilots must utilize all theinformation contained in the cockpit. "Thecomplexity of managing an organization todayrequires that managers be able to viewperformance in several areas simultaneously," wroteKaplan and Norton (is that great as findingelectrons first time in atomic particles?). "Moreover,by forcing senior managers to consider all theimportant operational measures together, theBalanced Scorecard can let them see whetherimprovement in one area may be achieved at theexpense of another," they added ( Greatobservations ?).

Kaplan and Norton suggested there are fourimportant elements that need to be balanced.

First, is the "customer perspective". Companiesmust ask how customers perceive them (Forget thisin India). In India seller is the king, a typicalgovernment Babu (IAS and such guys) is the king.India has not commissioned consumers and citizen'ssurveys in various matters including police andother important social and economic organizations.

The second element is "internal perspective."Companies must ask what it is at which they mustexcel.( How companies will excel when they exploitemployees, ill treat them hire an fire, are shy tospend money on training and research-A typicalexample is technical education in private sectorwhere there is mass scale exploitations of faculty inevery respect and almost nil efforts for Research,training and development besides not even half

salaries paid as recommended by UGC/AICTEwhich itself are not even half as good as theyshould be- So Indian technical education systemincluding MBAs is collecting junk and demoralizedcustodians of knowledge- The Professors ). Industryinstitute interaction and focused research is totallymissing unlike in west Sham research is going inmajority of national organizations and universitywithout any purpose, direction and accountability.

Third is the "innovation and learning perspective".Companies must ask whether they can continue toimprove and create value. ( This concept ofLearning organization and Fifth Principle areunknown and hated words for Indian profit seekingCEOs/Secretaries and top pseudo scientists , exceptfor their own training trips abroad)

Finally, there is the "financial perspective".Companies must ask how they view shareholders.(Most Indian companies view Indian shareholders asoutsiders, irritation and only a cost free source ofmilk (money) like cows are. Keep extracting milkfrom them. This money is almost free except forpublic issue expenses- Now a new funda (idea) ofprice band and liberalization has been started socompanies are laughing all the way to bank whilenew shareholder is robbed (even before he or shebecome part owner of company) paying up even asmuch as 25 to 50 times the face value of a newcompany share which is several times more than itsreal economic value and profit potential.

By focusing on all four of these dimensions ofBalance score Card; companies become driven bytheir mission rather than by only short-termfinancial performance. (Unfortunately most ofcompanies, it has been seen have 'missions' thatare vague or for mere public consumption or arewrongly exchanged with Vision or both are mixedbadly)

These points are not quite enough for a balancedscore card success:

Many things more are needed to be measured:Ethics, respect and adequate compensation foremployees and their hard work and contribution,social responsibility, Economic value of Assets (asthese are not free like promoters view it in India)and environmental degradation and sustainedglobal competitiveness ( Michael porter/ JagdishSeth ).



Some academic authors have claimed that over 64%of US companies (Kurtzman, 1997) are using someform of scorecard that uses both financial and non-financial metrics. Over the last many years, largeIndian corporate (like TATA Motors) too has startedusing the Balanced Scorecard. Many more have madea bee line for it and other models like like TQM, PokaYoke, ISO 9000, and HACCP and so on.

While all this is fine in theory what should beimportant is for me as a CEO is:

1. To minutely breakdown and simulate businessprocesses (BPA) and isolate the ones which arecritical success factors and focus to improve theseon regular basis by involving people in my company( This is nothing but 'kaizen' concept of Japanese).I have successfully attempted dramatizing and aurabuilding by rejuvenating the drab and boringroutine work atmosphere in some companies Iworked bringing in startling improvements inrejection rate reduction and productivity increase.This is also a foundation for Total ProductiveMaintenance or its variants ( TPM). Surprisinglyresistance came from owners of business and notemployees.

2. Identify Critical Ratio/Norms for measurementsto ensure productivity and profitability both : Forexample a Daily Progress Report (now ERP modulesare installed) going to CEO can have followingcompilations:

2.1 Production targets for month/year-Achievedvalue and its percentage-Conforming /Nonconforming

2.2 Daily production of various key items of outputas against agreed capacity for the product mix

2.3 Ratios of key inputs and services like (steamconsumption for tire vulcanizing in a tier factory) asagainst agreed norms of productivity.

2.4 Dispatches for the day against daily andmonthly goals set and percentage achieved

2.5 Total logistics costs as percentage of agreedmonthly cost

2.6 New customer added during the month

2.7 Orders lost during the month from regularcustomer

2.8 No of customer complaints received anddisposed till date in the month and satisfactorily

closed as percentage

2.9 Total Cost of production or gross margin (Perta) on daily and cumulative basis in the week/month

2.10 Interest costs up to the day and percent ofagreed monthly cost

2.11 Previous closing average share price and lastprice and highest in last one year period.

2.12 No. of workers on role in senior, middle,supervisory (frontline) and labor employed as onday and beginning of month

2.13 Cost of employment per unit of production

2.14 Cost of R & D work incurred till last monthend.

2.15 Employee turnover at Managerial and nonmanagerial level till last month end ( surprisingly inmany companies these ratios are widely differentfor two categories and pint to different HR policiesof companies)

2.16 ROI till close of last month (pro rata) agreedvalue and ROI of first 2 nearest competitors.

2.17 Total outstanding credit in market , percentageof revenue and age (less than 30 and more than30 days)

2.18 Total raw material, work-in-transit, and supplychain inventory (Finished goods/ SKUs) on theprevious day as against agreed targets and industryaverage. This needs huge involvement of sales forceand distributors.

2.19 New products/designs added by the companyup to end of previous month.

2.20 Product development projects in hand

I don't see any reason why any good companycan't compile these data on daily and if not dailyon weekly and monthly basis with all the ERP, MISand computerized systems in place. If Companiesare not geared up for such analyses regularly, theyare certainly not mature enough to implementSCORECARD system and will not benefit an iota bydoing that. In India, particularly economic structuralreforms, improvement of labor laws andderegulation measures and greater accountability ofboth CEOs of companies as well as Secretaries to



various Governments is necessary. Reckless taxcollection like done by Present Finance Minister is togain a quick step jumping process and will and hasalready resulted in huge inflation and consequentfailure of economy.

In other words and to summarize:

There is need for evolving country specific systemsand for making sustainable growth oriented andcompetitive corporations, the business environment,ethics and business practices identifying criticalsuccess factors and critical business process have tobe put in place, nurtured and constantly, a greatwork team is to be developed and then onlyimplementation of concepts like scorecards will yielddesired and expected results. You can't make out achampion of a diseased person living in unhealthyenvironment. So many management theories andformulae have already created a confusing jungle ofmanagement literature. Balanced Scorecard is aperformance measurement tool although it helpsfocus managers' attention on strategic issues andthe management of the implementation of strategy,it is important to remember that BalancedScorecard itself has no role in the formation ofstrategy. Several senior managers, working closelytogether can have radically different perspectives onbusiness performance.

The Performance Prism 2 theory has five facets likeof a Prism surfaces: - The top and bottom facetsare Stakeholder Satisfaction and StakeholderContribution, respectively. The three other sidefacets are Strategies, Processes and Capabilities.APPLYING THE PERFORMANCE PRISM TO MEASURESDESIGN:

Five distinct, but logically interlinked, perspectiveson performance have been identified together withfive key questions for measurement design:

1. Stakeholder Satisfaction - who are the keystakeholders and what do they want and need?

2. Strategies - what strategies (Business policiesand action plans) do we have to put in place tosatisfy the wants and needs of these keystakeholders?

3. Processes - what critical processes do we requireif we are to execute these strategies?

4. Capabilities - what capabilities do we need tooperate and enhance these processes?

5. Stakeholder Contribution - what contributions dowe require from our stakeholders if we are tomaintain and develop these capabilities?

It is thus no accident that the balanced scorecardstarts by asking, "What do the shareholders want"(Of course if I care for them). A key reason forstrategic failure is that the organization's processesare not aligned with its strategies. Many times noneof them is understood or clear to top managementor second rung managers and they may differentviews pointing to poor vertical and horizontalcommunication in organization. Another importantexample of stake-holders interest in scorecarddesign and implementation is aptly explained bythis example. Today, Boeing manufactures onlythree components on a 777. Its reliance onsuppliers for components and spares is immenseand its exposure, should its suppliers fail toperform, cannot be underestimated.

According to author of this article these conceptsare tough to implement and even identify and canwork only in specific business environment enablingor disenabling factors like for the growth of asapling in right soil and climatic conditions. Theapproach has to be varied and redesigned onsituation concerned and markets where you focus tooperate. But one thing is sure, the customer serviceof even world class organizations even today is notup to mark and hence implementation of conceptslike 'performance prism' and balance scorecardsseem to be doubtful and ineffective.

References and acknowledgements:

The Balanced Scorecard: Translating Strategy into Action.Boston, MA: Harvard Business School Press, 1996

The Performance Prism: Andy Neely, & Chris Adams MikeKennerley, 2002, Prentice Hall

Journal Articles:

"The Balanced Scorecard: Measures That DrivePerformance." Harvard Business Review, Jan./Feb .1992

"Putting the Balanced Scorecard to Work: HarvardBusiness School, Sept./Oct.1993

Internet: MBAUniverse.com 1, Wikipedia.com 2



Gender Based Perceptions of Self and Parentson EI and IQ among MBA Students

M J Xavier, Dean - TRP School of Management SRM University KattankulathurM Nagarani, Professor of OB &HR, SRM University, Kattankulathur, Tamilnadu

AbstractThe authors examined participants' estimates ofown and parental psychometric intelligence (IQ)and emotional intelligence (EI). The authors asked148 participants (112 men, and 33 women) toestimate their own and their parents' IQ and EIscores on a normal distribution ranging from 55 to145 points. Data was also obtained on a 30 itemtrait EI scale developed by Petrides and Furnham(2004) about self and parents. The authorshypothesized that men would give higher IQ butlower EI self-estimates than women and thatparticipants, regardless of gender, would rate theirfathers as higher on IQ but lower on EI than theirmothers. The results were inconclusive with regardto rating of self on EQ and IQ. However the parentwere ratde as predicted by the hypothesissupporting the view that people perceivepsychometric intelligence as a primarily masculineattribute in contrast with emotional intelligence,which they perceive as a primarily feminineattribute.

Introduction

M any studies on self-estimates ofintelligence have been sparked, mainly bythe research of Hogan (1978) and Beloff

(1992). The researchers of these studies havefocused primarily on gender differences in self-estimated intelligence and, with few exceptions(e.g., Byrd & Stacey, 1993), have shown that mengive higher overall IQ self-estimates than do women(Furnham & Fong, 2000; Furnham & Rawles, 1999).These researchers have also shown that this genderdifference can be replicated cross-culturally. Studiescarried out in Africa (Uganda), the United States(Hawaii), East Asia (China, Japan, and Singapore),and Europe (Belgium, Britain, and Slovakia) havenearly all shown male hubris and/or female humilityeffects (Furnham, Fong, & Martin, 1999; Furnham,

Rakow, Sarmany-Schiller, & De Fruyt, 1999; Zhang& Gong, 2001).

Researchers have also found that gender differencesin estimated IQ are often a function of the methodof derivation of the overall score. Male-favoringdifferences tend to occur when researchers askparticipants to give a direct self-estimate of overallIQ, but not when researchers derive an overallscore through summing up (or averaging) separateestimates on constituent IQ facets (e.g., verbal,mathematical, and similar factors; Furnham, 2000;Furnham, Clark, et al., 1999).

Petrides et al (2004) have extended their study togender differences in Emotional Intelligence (EI) tovalidate the general perception that women wouldmake higher EI self-estimates than would men, incontrast to the expectation of the male-favoringdifference observed on IQ self-estimates. Theyexamined participants' estimates of own andparental psychometric intelligence (IQ) andemotional intelligence (EI). The authorshypothesized that men would give higher IQ butlower EI self-estimates than women and thatparticipants, regardless of gender, would rate theirfathers as higher on IQ but lower on EI than theirmothers. The results confirmed the hypotheses,supporting the view that people perceivepsychometric intelligence as a primarily masculineattribute in contrast with emotional intelligence,which they perceive as a primarily feminineattribute. The results also showed that the intensityof the stereotypical perception of EI as a feminineattribute diminished when the authors askedparticipants to estimate their scores on a range ofspecific EI facets instead of providing a directoverall self-estimate.

In the Indian context Singh (2007) has carried outa study linking emotional intelligence to leadership


in software. Katyal and Awasthi (2005) conducted astudy among school students and found that thegirls scored marginally higher than boys in terms ofemotional intelligence. To the best of the knowledgeof the researchers, no study in India has addressedthe issue of perceptual differences in EQ and IQbased on genders. The current research attemptsto fill this gap.

Hypothesis:

We evaluated the following six hypotheses in thisstudy.

Hypothesis 1: Men would have higher IQ self-estimates than women.

But we also hypothesized the following:

Hypothesis 2: Men would have lower EI self-estimates than women.

Thus, results fulfilling Hypothesis 1 and Hypothesis2 would provide evidence for the view that people'sperceptions of intelligence (IQ in a limited sense)tend to be male normative, whereas theirperceptions of EI tend to be female normative.

In the present study, we looked not only at self-estimates but also at estimates of the IQ and EI ofparticipants' parents. The investigation of estimatesof parents' abilities and traits is important,especially in relation to gender differences, for tworeasons. First, people's estimates of their parents'intelligence enable researchers to determine whetherthe gender differences are limited to self-estimatesof intelligence or whether one can generalize thedifferences to include others. IQ estimates suggeststhat the male-favoring difference extends to

estimates of relatives, with fathers and sons beingperceived as more intelligent than mothers anddaughters, respectively (Furnham, 2001). For EI,the direction of the difference should be opposite,with mothers perceived as more emotionallyintelligent than fathers. We hypothesized thefollowing:

Hypothesis 3: Irrespective of gender, participantswould rate their fathers as more intelligent thantheir mothers.

Conversely, we also hypothesized the following:

Hypothesis 4: Irrespective of gender, participantswould rate their mothers as more emotionallyintelligent than their fathers.

Additionally, in the Indian context, women tend toadore their fathers and consequently are likely togive higher IQ ratings for them. Similarly men tendto see their mothers as an embodiment of love andconsequently give higher rating for their mothers onEmotional Intelligence. These lead to the followingtwo hypothesis.

Hypothesis 5: Women would give higher IQ ratingsto their fathers than men.

In the case of IQ the roles would get reversed.

Hypothesis 6: Men would give higher EI rating totheir mothers than women.

Results:

The participants were from 148 postgraduatestudents from SRM University (112 male and 33female students). Their mean age was 22.6 years(SD = 1.3 years). The sample had a good mix of

IQ Psychometric Intelligence EI (Emotional Intelligence)

Self Father Mother Self Father Mother

Male Mean 102.6 106.8 103.3 104.9 102.9 110.1

SD 14.8 19.8 16.2 10.1 10.2 10.9

Female Mean 104.4 116.1 107.3 106.4 109.4 115.8

SD 11.8 17.6 16.0 10.8 11.4 9.5

Total Mean 103.0 109.0 104.2 105.2 104.2 111.2

SD 14.1 19.6 16.2 10.2 10.7 10.9

Table 1

Gender Based Perceptions of Self and Parents on EI and IQ among MBA Students


students with representations from large city(28.9%), towns (43.6%) and villages (24.8%). 85%of the respondents were Hindus, 10% Christiansand the balance Muslims. More than 60% of therespondents reported a household income of lessthan Rs. 20,000 per month, 20% reported Rs.20,000 to Rs. 30,000 per month and the remaining10% had a household income of more than Rs.30,000 per month.

We asked the participants to complete a 2-pagequestionnaire that had been based on previousstudies of estimated IQ. The questionnaire requireda total of 95 ratings. The first part contained adescription of the normal distribution of IQ scores.This included a copy of a bell curve spanning sixstandard deviations (-3 to +3) and briefdescriptions of the anchor scores (e.g., 55 = mildretardation, 100 = average, 145 = gifted). Belowthat part of the questionnaire, we askedparticipants to give direct estimates of their ownand their parents' overall IQ scores. Subsequently,we asked them to make 30 additional estimates ofvarious statements measuring the trait emotionalintelligence, which we had taken from Petrides &Furnham,. (2001). We summed up these estimatesto derive a second, indirect, overall EI estimate forthe participants' self, mother, and father. Weallotted participants class time to complete thequestionnaire. The response rate approached 100%.

Table 1 shows the male and female means andstandard deviations for the direct overall EIestimates for the participants' self, father andmother. Interestingly women rate themselves(104.4) to be marginally better than men (102.6)though the difference is not statistically significant(t= -.619, df=137, sig=0.268). As hypothesized,the self rating of women on EI (106.4) ismarginally higher than that for men (104.9).However this difference is also not statisticallysignificant (t = 0.746, df = 137, sig=0.228).Consequently hypothesis 1 and 2 do not appear tohold good in the Indian context.

Means and Standard Deviations for the DirectOverall IQ and EI Estimates

As regards Hypothesis 3, we can see that theparticipants have given a higher IQ rating (109.0)to their fathers than mothers (103.3) and thedifference is statistically significant (t = 3.44, df =133, sig=0.0005). The difference in the estimated

average EI for mothers (111.2) and fathers (104.2)is statistically significant as assessed using pairedsample t-test (t=8.490, df=120, sig=0.000). Hencehypothesis 3 and 4 stand proved.

As stated in Hypothesis 5, women have given ahigher IQ rating of 116.1 as compared to the ratingof 106.8 given by male participants. The differenceis also statistically significant (t=2..384, df=132,sig=0.009), thus proving Hypothesis 5. However,the expectation that men would give higher EIrating for their mothers has not been established.On the contrary women have given higher EI ratingfor their mothers too.

We indirectly derived a total score on self-estimatedEI by summing up self-estimates on the 30statements. Similar scores were obtained for theirparents are shown in Table - 2

..................................................................... Derived EI Scores

Self Father Mother.....................................................................

Male Mean 135.7 133.3 134.1SD 17.4 17.8 16.2

Female Mean 141.5 147.4 146.1SD 21.2 22.1 20.0

Total Mean 137.0 136.1 136.5SD 18.4 19.6 17.6

.....................................................................

Table - 2Derived EI Scores for Self and Parents

The overall rating for self and parent do notsignificantly differ from each other. This is in linewith the findings of Petrides, Furnhams and Martin(2004). The difference in the average self ratingfor male and female participants is not statisticallysignificant. The interesting differences are in theway the males and females rate their parents.Ratings of parents by female participants aresignificantly higher than that by male participants.The differences are statistically significant too.

Table 3 shows the male and female means andstandard deviations for the 4 EI factors derived byPetrides (2006) from the 30 item scale used in thisstudy. The four factors identified were well-being,self-control, emotionality and sociability. Theaverage ratings given for statements that go intoeach one of the factors are shown in the table.



Since a 7-point rating scale was used to rate theitems, the average rating too falls in the 1 to 7range.

The differences in ratings are seen with regard tothe factors well-being and sociability. On the well-being factor female participants give higher ratingto their fathers than the male participants. On thesociability factor female participants rate theirparents (both father and mother) higher than themale participants. On the overall scores, the ratingfor self is significantly higher than father or motheron the well being dimension. On the sociabilitydimension, fathers get better rating than self ormother.

Discussion:

As opposed to previous studies (Bennet, 1996;Furnham, Fong, et al., 1999; Furnham, Rakow, etal., 1999, Petrides, Furnhams and Martin, 2004),results of the present study does not supportgender differences in directly self-estimated overallIQ and EQ. Current study did not find anystatistically significant difference in the selfestimated IQ or EI scores of the male and femaleparticipants. Indian women, particularly students, donot see them as any different from men in termsof Intelligence and competencies. Both gendersrated their fathers as more intelligent than theirmothers. Similarly mothers received better EI scoresthan their fathers. This is in line with the finding inwestern countries.

In contrast, researchers do not observe a similardifference in overall estimates obtained throughsumming up (or, equivalently, averaging) constituentitems, because these include EI facets in whichwomen are of equal or superior ability. Becauseresearchers give neutral, male-favoring, and female-favoring items equal weights in the summated totalscore, any differences tend either to cancel out orto be obscure among a number of roughlyequivalent estimates. In this context, male hubrisand/or female humility effects could operate in adual fashion: (a) at the overall level by biasing theestimation process towards placingdisproportionately high weights on male-favoring EIfacets, thus leading to a significant genderdifference in overall estimated EI and (b) at thefacet level by biasing the process so that anyactual female-favoring differences do not fully affectestimated scores.

We also need to enlarge this study to includeparticipants from various walks of life. Additionallywe plan to see if gender biases exist between maleand female bosses.

References

Beloff, H. (1992). Mother, father, and me: Our IQ. ThePsychologist, 5, 309-311.

Byrd, M., & Stacey, B. (1993). Bias in IQ perception. ThePsychologist, 6, 16.

Furnham, A. (2000). Thinking about intelligence. ThePsychologist, 13, 510-515.


Factors Male Female Total

Self Father Mother Self Father Mother Self Father Mother

Well being Mean 4.98 4.77 0.89 5.27 5.27‡ 5.16 5.05± 4.87 4.84

SD 0.81 0.86 0.89 0.92 0.85 0.83 0.84 0.88 0.89

Self-control Mean 4.30 4.29 0.70 4.21 4.60 4.42 4.28 4.36 4.33

SD 0.73 0.79 0.70 0.82 0.95 0.79 0.75 0.83 0.72

Emotionality Mean 4.37 4.25 0.78 4.60 4.53 4.63 4.42 4.31 4.43

SD 0.82 0.81 0.78 0.91 0.98 0.84 0.84 0.86 0.80

Sociability Mean 4.37 4.53 0.77 4.47 4.88‡ 4.80‡ 4.39 4.61± 4.48

SD 0.84 0.77 0.77 0.82 1.05 0.90 0.83 0.84 0.82

‡ - significant difference observed using independent sample t-test at 95% or more confidence level.± - significant difference observed using paired sample t-test at 95% or more confidence level

Table 3 : EI Factor Scores


Furnham, A., Clark, K., & Bailey, K. (1999). Sexdifferences in estimates of multiple intelligences.European Journal of Personality, 13, 247-259.

Furnham, A., & Fong, G. (2000). Self-estimated andpsychometrically measured intelligence: A cross-culturaland sex difference study. North American Journal ofPsychology, 2, 1-10.

Furnham, A., Fong, G., & Martin, N. (1999). Sex andcross-cultural differences in the estimated multifacetedintelligence quotient score for self, parents and siblings.Personality and Individual Differences, 26, 1025-1034.

Furnham, A., Rakow, T., Sarmany-Schiller, I., & De Fruyt,F. (1999). European differences in self-perceived multipleintelligences. European Psychologist, 4, 131-138.

Furnham, A., & Rawles, R. (1999). Correlations betweenself-estimated and psychometrically measured IQ. TheJournal of Social Psychology, 139, 405-410

Hogan, W. H. (1978). IQ self-estimates of males andfemales. The Journal of Social Psychology, 106, 137-138.

Katyal, S. and Awasthi, E. (2005), "Gender Differencesin Emotional Intelligence Among Adolescents ofChandigarh," J. Hum. Ecol., 17(2): 153-155.

Petrides, K. V. (Summer, 2006). Deriving Factor Scoresfrom the TEIQue-SF. Webnote #2.

http://www.ioe.ac.uk/schools/phd/kpetrides/teique1.htm

Petrides, K. V., Furnham, Adrian and Martin, G. Neil(2004), "Estimates of Emotional and PsychometricIntelligence", Journal of Social Psychology; April, Vol.144 Issue 2, p149-162, 14p

Petrides, K. V., & Furnham, A. (2001). Trait emotionalintelligence: Psychometric investigation with reference toestablished trait taxonomies. European Journal ofPersonality, 15, 425-448.

Singh, Sanjay Kumar (2007), "Emotional intelligence andorganizational leadership: a gender study in Indiancontext", Int. J. Indian Culture and BusinessManagement, Vol. 1, Nos. 1/2, pp., 48-63.

Zhang, Y., & Gong, Y (2001). Self-estimated intelligenceand its related factors. Chinese Journal of ClinicalPsychology, 9, 193-195.



Knowledge Management in SME's

Ankush Sharma, Academic Associate Indian Institute of Management Ahmedabad

AbstractKnowledge Management provides huge businessopportunities that should not be missed and thesame is at the infancy level in India and especiallyat the SME level. In SMEs there is a need forcertain customized knowledge Managementpackages as every enterprises as a thrust area inone or two modules of Knowledge Management.Therefore, a better understanding of the key areaswhere Knowledge Management should beimplemented is a major driving force forimplementation of knowledge Management vis a viscompanies internal and external environmentalanalysis

"Life Is Lived Forward But Understood Backwards"Is a well Known saying, But the Implication of thisadage will be more prudent In today's competitiveworld. Organizations are giving more emphasis oneach and every type of initiatives which can lead toIncrease in productivity vis a vis increase in theremarket share or in nutshell we can say todifferentiate themselves from other. There are tonesof data in the organization, The Effective Datamanagement Can lead to More information basedfor the industry or to be more specific to theknowledge.

Lets Discuss Some thing related to This Specificterm. What does one understand aboutknowledge??? What is knowledge?

Every person can give his own definition Aboutknowledge May Be based On His Or herunderstanding of knowledge. We will talk in verygeneral term about knowledge.

The Under Standing Of the Subject Or about theconcept which an individual have is what knowledgemeans, Or we can say that right interpretation ofinformation is what knowledge is. But where doesthis knowledge stay???????? The Answer to thisquestion is a straight forward opinion that is

(MIND …)……… And from here the concept ofknowledge management has come to the picture.Knowledge resides in mind and to tap or todocument this knowledge is one the most

Herculean task which an organization is facing intoday's competitive world. The Text book definitionOf knowledge management goes like this "Knowledge management is a systematic process forcreating, acquiring, synthesizing, learning, sharingand using knowledge and experience to achieveorganizational goals"

Knowledge management can be explained in onesentence "That is To Tapped the Tacit Knowledge"(Most unspoken Knowledge).

For going ahead on knowledge management let usSort out the key dimensions of knowledgemanagement which can help us in solving themajor challenge ahead of us

Key Dimensions of knowledge Management

Let look On Hay /Mcber iceberg model for giving usinsight into this

Managing employee competencies is a keydimension of this, as well as linking corporateknowledge assets that are both codified (written)and personalized (unwritten, social). Hay/McBer, aleading UK management consultancy firm andinventors of competency management, define amanagerial competency as an "underlyingcharacteristic of a person that enables them todeliver superior performance in a given job, role orsituation."

Their iceberg model (see Figure 1, following page)of managerial competencies places knowledge andskills at the tip, with the underlying yet consciouselements being social role and self-image; traitsand motives are at a subconscious level. The social


role reflects values (what you see as important)while the self-image reflects identity (whether yousee yourself as an expert). The traits are thehabitual behaviors that we recognize in each otherwhile the motives are the thoughts and preferencesthat drive behavior and satisfaction.

Much theory has been written about knowledgemanagement but there has been limited discussionabout its practical benefits and how to implement itand deliver business benefits.

PGS Data Processing has used knowledge as a focalpoint to give a new perspective and understandingof what is driving the organization forward.

There are two key issues for any knowledgemanagement strategy:

1. Management of explicit information andprocesses

2. Management of people and the environment inwhich they work so that tacit knowledge isexchanged more naturally and systematically.

One of the primary reasons why many knowledgemanagement initiatives fail is because too muchemphasis has been placed on explicit knowledgeand IT solutions.

There are seven levers of knowledge strategy, theseare:

1 Customer Knowledge: - To survive anyorganization needs to be a customer focusedwith a customer relationship that requires aconsistent and co-ordinated approach to themarket.

2 Knowledge in products and services: - Value-added, new state of the art products should bebeneficial to clients and command premiumprices. Knowledge needs to be developed andcaptured through the innovation process andthen transferred to the wider sales andproduction processors.

3 Knowledge in people: - A culture must bedeveloped where Knowledge is valued andshared. Knowledge must also be Managed sothat the right people have the right knowledgein time to support the business by having thecompetences to use, market and sell theproducts developed by an in-house R&D division

4 Knowledge in processes: - Consistency of qualityto global customers requires that differentgroups perform the same process that the sameconsistent quality is achieved worldwide. This isa key Objective of the company's current globalquality management system.

5 Organizational memory: - Retention of lessonslearnt: problems solved become more difficult inan organization that has restructured. Theorganization and systematic storage of practicesand project histories is required to avoidresources being wasted to reinvent the wheel.

6 Knowledge in relationships: - Boundaryspanning across Internal and externalrelationships must be overcome in a Globallydispersed organization with global customers.

7 Knowledge as an asset: - Development ofintellectual Capital with KM will requireresources which have to be Justified. Bymeasuring intellectual capital and managing

Its development through the KM process, it ispossible to Identify the leverage and benefits, andso attract and retain Resources.

There are six dimensions to KM organization:

(a) Leadership

(b) Technology

(c) Culture

(d) Measurement and process

(e) Behavior

(f) Conceptualization

This theoretical paper adopts a conceptual, multi-disciplinary approach. First, knowledge can bestored and transmitted via institutions. Second,knowledge "sub networks" or smaller groupingswithin larger networks can become key repositoriesof knowledge. The concept of knowledge "subnetworks" needs to be tested against empiricalevidence, which should include a cross-nationalcomparison of knowledge-based cities.

Perception Regarding Knowledge Management

There is various perceptions regardingimplementation of knowledge management indifferent organization. We had find out thepossibilities of perception of different small andmedium enterprise and try to analyse theseperception regarding knowledge management andthen latter on compared this perceptions withperceptions prevailing in large scale enterprise.



SMALL AND MEDIUM LARGE SCALE ENTREPRISE • NOT EFFECTIVE VALUE FOR MONEY • CHANGE IN ORGANIZATION CULTURE • DOWNSIZING • HUGE INFRASTRUCTURE NEEDED • INVERSTMENT COST HIGH • LESS IMPACT ON PRODUCTIVITY

• VALUE FOR MONEY • ENHANCE ORGANIZATION CULTURE • LEARNING ENVIRONMENT FOR EMPLOYEES • DATA RETRIEVAL EASY • ROI VERY SOON • PRODUCTIVITY ENHANCEMENT EVEN IN SMALL SHOP FLOOR

On the basis of focus group discussion and detailunderstanding of knowledge management followingreference can be drawn as comparision to largeorganization

To extract insights from in-depth discussions onissues related to implementation of KM in SME's.

As We had used qualitative research techniques asfocus group discussion with respect toimplementation of knowledge management in smalland medium enterprise vis a vis to implementationin large enterprise

Our focus group discussion was based on somesmall and medium enterprise in region (Bhopal)

1) Mandideep2) Govindpura industrial area

For this study we have done focus group discussionwith twelve people and having one as moderator,discussions have different questions

And we had covered people from different type ofindustry like foundry, casting, fabrication, machiningand processing industry.

The Discussion Where Based on Key managementinitiatives with emphasis on knowledge managementas such.

Discussion where carried out for 15- 20 Minutes onfollowing questions

* What are the bottlenecks for small and mediumenterprise?

* How companies can improve productivity ingeneral term?

* Tacit knowledge can be correlated toproductivity?

* How precious knowledge can be lost inorganization if the do not have proper system?

* Did knowledge management can play a key rolein industrial growth?

* What are the different perception aboutknowledge management in organization (SME)?

* What are the road blocks in successfulimplementation of knowledge management insmall and medium enterprise?

* Do Management initiative provide a long termROI to small and medium enterprise?

* What are the key parameters which differ smalland medium enterprise other than turn over?With Emphasis on Employee Approach towardsa specific task?

* What are the key sources of knowledge in smalland medium enterprise?

* Where are the different area where loss ofknowledge leads to effect on productivity forthe company?

* Is Return on investment can be justified forimplementation of knowledge management forthe organization?

* What are the preconceived notion for knowledgemanagement not fit for small and mediumenterprise?

On the basis of discussion the key findings whichcan be highlighted are can be as follows

Management should look upon the key areas wherethere are huge data loss for the company

What are the key problems which are faced bysmall and medium enterprise, according to thediscussion which can be listed as follows



* To Compete on Price ( For your cost cuttingparameter knowledge management can help)

* Employee attrition rate are very high whichleads to lot of loss of valuable data whichneeds to be tapped and are directly propotionalfor loss on productivity

* Tacit knowledge need to be tapped for largeextent

BARRIERS OF KNOWLEDGE MANAGEMENTIMPLEMENTATION

Knowledge management can really help in providingsystematic approach to the knowledge loss of theparticular company.

According to the discussion there are somehindrances for not implementation of knowledgemanagement Huge Infrastructure

* Not Directly propotional to return on investmentwith respect to SMES

* Huge network need to be set up forimplementing knowledge management

* Employee attitude towards radical change in theongoing system is also a problem to be dealtfor

To make conclusions and recommendations forfurther developments of KM in the SME sector.

Knowledge management as a concept is veryattractive and provides huge business opportunitiesthat should not be missed. It is an engine thattransforms knowledge into business value. However,implementation of knowledge management is noteasy for small and medium enterprise. Orgnizationshave to grabble various issues and challenges suchas organizational culture, strategy, informationtechnology, knowledge organization. Despite allthese issues and challenges Companies world widehave shown keen interest in knowledgemanagement.

As far as India is concern knowledge Managementis still infancy stage. It has to cover a lot ofground to come up the level of knowledgemanagement implementation In India there is needof national knowledge management concept tocreate and harness the knowledge of our ownpeople and start creating and using our ownsoftware packages. The core competency definitelyexist in our R& d laboratories, academics,institutions, software houses and industries. Insmall and medium enterprise there is a need ofcustomized knowledge management packages asevery enterprise as a thrust area in one or twomodule of knowledge management so a betterunderstanding of key area where knowledgemanagement should be implemented is a majordriving force for implementation of knowledgemanagement vis a vis companies internal andexternal environment analysis.

Further scope of research can be stated as anempirical study need to be done with setting somekey hypothesis based on productivity and effect ofknowledge management in enhancing that.

"Learning from past mistake, time has come toamend and takes knowledge management as theconcept in the right direction and reap its benefit tothe fullest".

REFERENCESAiavi, M. and Leidner, D. (2001),"Knowledge Managementand Knowledge Management system": Conceptual Frameworkand Research Issue.

Muruthy, C.S.V (2002), "E- Commerce: Concepts, Models,Strategies", Himalya Publishing House, pp.778-808.

see, "Knowledge Management Mart set to boom: Frost andSullivan", at http://www.zdnetindia.com/print.htm?elements.id_92020.

see, "Knowledge Management in India", at http://www.hindubusinessline.com/bline/mentor/2003/06/30/stories/200306300094100.htm.

See, Barclay, O. Robecca and Murray C. Philip "What isKnowledge Mangement?" at http://www.media-access.com/whatis.html.

See, Hildebrand, Carol, "Does KM=IT?, at http://www.cio.com/archive/enterprise/091599_ic.html.

see, Surmacz, Jon and Santosus, Megan, "The ABCs ofKnowledge Management" at http://www.cio.com/research/knowledge/edit/kmabcs.html.

Selvarag, A (2003), "Knowledge Management: Imperativesfor Business ", the Management Accountant, Oct.2003pp.731-32.

Vakharia, Bharat ((2000), "Knowledge Management forOrganisational Excellence (Global Managers )", HimalyaPublishing House, pp.210-240

Vorbeck, Jens; Heisig, Peter and Mertins, Kai ((2001),"Knowledge Management: Best Practices in Europe"' Springer



Promotion of Brand in Rural Market of India

Hitendra Bargal, Research Associate, Indian Institute of Management Indore (IIM-I)Ashish Sharma, Lecturer, University Institute of Management, Jabalpur MP

Dr. Vijay Pithadia, Assistant Professor, School of Management Studies,Shri Leuva Patel Trust College For Women

AbstractPromotion of brands in rural markets requires thespecial measures. Due to the social and backwardcondition the personal selling efforts have a challengingrole to play in this regard. The word of mouth is animportant message carrier in rural areas. Infect theopinion leaders are the most influencing part ofpromotion strategy of rural promotion efforts. Theexperience of agricultural input industry can act as aguideline for the marketing efforts of consumer durableand non-durable companies. Relevance of Mass Media isalso a very important factor.

The Indian established Industries have the advantages,which MNC don't enjoy in this regard. The strongIndian brands have strong brand equity, consumerdemand-pull and efficient and dedicated dealer networkwhich have been created over a period of time. Therural market has a grip of strong country shops, whichaffect the sale of various products in rural market. Thecompanies are trying to trigger growth in rural areas.They are identifying the fact that rural people are nowin the better position with disposable income. The lowrate finance availability has also increased theaffordability of purchasing the costly products by therural people. Marketer should understand the pricesensitivity of a consumer in a rural area. This paper istherefore an attempt to promote the brand image inthe rural market.

Introduction

Indian Marketers on rural marketing have twounderstanding (I) The urban metro products andmarketing products can be implemented in ruralmarkets with some or no change. (ii) The ruralmarketing required the separate skills andtechniques from its urban counter part. TheMarketers have following facilities to make thembelieve in accepting the truth that rural markets aredifferent in so many terms.(i) The rural market has the opportunity for.(ii) Low priced products can be more successful in

rural markets because the low purchasing,purchasing powers in rural markets.

(iii) Rural consumers have mostly homogeneousgroup with similar needs, economic conditionsand problems.

(iv) The rural markets can be worked with thedifferent media environment as opposed topress, film, radio and other urban centricmedia exposure.

How does reality affects the planning of marketers?Do villagers have same attitude like urbanconsumers? The question arises for themanagement of rural marketing effects in asignificant manner so than companies can enter inthe rural market with the definite goals and targetsbut not for a short term period but for longerduration. The Research paper will discuss the roleof regard. The strategy, which will be presented inthe paper, can be either specific or universallyapplicable.

Realities before the Marketers

70% of India's population lives in 627000 villagesin rural areas. 90% of the rural population usconcentrated in villages with a population of lessthan 2000, with agriculture being the mainbusiness. This simply shows the great potentialityrural India has to bring the much - needed volume-driven growth. This brings a boon in disguise forthe FMCG Company who has already reached theplateau of their business urban India.

As per the National Council for Applied EconomicResearch (NCAER) study, there are as many 'middleincome and above' households in the rural areas asthere are in the urban areas. There are almost twiceas many' lower middle income' households in ruralareas as in the urban areas. At the highest incomelevel there are 2.3 million urban households asagainst 1.6 million households in rural areas.According to the NCAER projections, the number ofmiddle and high-income households in rural India isexpected to grow from 80 million to 111 million by2007. In urban India, the same is expected to grow


from 46 million to 59 million. Thus, the absolute sizeIndia is expected to be doubles that of urban India.

HLL chairman MS Banga Says, "This exercise maynot pay in the immediate future, but will definitelygive long-term dividends. Incidentally, over 50percent of the sales of HLL's fabric wash, personalwash and beverages are in rural areas. And we seea future in going rural in a major way".

The improved agricultural growth is expected toboost rural demand, through not at too sizzling arate. Moreover, the price drop in personal products,after the recent excise duty reductions, in alsoexpected to drive consumption. "Better agriculturalyields will give farmers more spending power,making the rural markets bullish," says an analyst.

As a result, HLL has planned a rural marketingprogram that is expected to result in a markedgrowth in the consumption of the company'sproducts in the rural market. HLL will adopt three-pronged marketing strategy- new price points, sizesand awareness campaigns for its detergents andsoaps segment to augment rural growth.

The Indian established Industries have theadvantages, which MNC don't enjoy in this regard.The strong Indian brands have strong brand equity,consumer demand-pull and efficient and dedicateddealer network which have been created over aperiod of time. The rural market has a grip ofstrong country shops, which affect the sale ofvarious products in rural market.

The companies are trying to trigger growth in ruralareas. They are identifying the fact that ruralpeople are now in the better position withdisposable income. The low rate finance availabilityhas also increased the affordability of purchasingthe costly products by the rural people. Marketershould understand the price sensitivity of aconsumer in a rural area. The small sachet packsare the examples of price sensitivity. Colgate hasdone this experiment with launching of sachetpacks for rural markets.

Research Objectives

The research paper consist of following objectives:

(i) To analyze the present promotion strategy offew brands in rural markets.

(ii) To measure the success of rural marketingcampaign of few brands in Terms of consumerappreciation.

(iii) To study the determinants of specificationfactors which can decide the success the ruralpromotion strategy.

(iv) To evaluate the effects of adopting the specific

brand ambassadors in the rural marketingcontext.

(v) To present suffocate on above-mentionedobjectives.

Review of Literature

The Marketing Mastermind (2003), Hindustan Leverrural marketing Initiatives by "A Mukund" MarketingMastermind has given the perspectives in which HLLhas approached towards rural markets.

The Economic Times (2003), "The rural market likesit strong" the strength of rural markets for Indiancompanies. Financial express, June 19, 2000 haspublished the strategy about FMCG majors, HLL,Marico Industries, Colgate Palmolive have formulahad for rural markets.

Research Modus Operandi and Design

The research methodology for this research work isbased on the survey technique. Few brands likeCoca-Cola, BPL, Asian Paints have been chosen toconduct the research work.The Gram Panchayat areas have been selected onrandom basis from the list of available GramPanchayat. The four-Gram Panchayat have beenshort-listed and 60 respondents have been selectedin each Gram Panchayat so the total sample size N= 240.The respondents were organized in a group andasked about their views on following advertisementactions and theme.1) In case of Coca-Cola how does the role of AamirKhan affect the rural consumers?2) In case of BPL Television how does AmitabhBachchan give the impression about BPL Brand3) How does the advertisement of Asian Paints withthe Slogan "Sunil Babu" influence the ruralconsumersThe research design applied for this purpose isexperimental with descriptive. The experimentaldesign was suitable as the rural consumers fellinterest about it and descriptive design depends onthe explanation past about the campaign of theseBrands.

Conceptual Framework

Given the Literacy scenario in to consideration thepromotion of Brands in rural markets requires thespecial measures. Due to the social and backwardcondition the personal selling efforts have achallenging role to play in this regard. The word ofmouth is an important message carrier in ruralareas. Infect the opinion leaders are the mostinfluencing part of promotion strategy of ruralpromotion efforts. The experience of agriculturalinput industry can act as a guideline for the



marketing efforts of consumer durable and non-durable companies. Relevance of Mass Media is alsoa very important factor. Door Darshan had alreadyacquired high penetration in rural households.

Now the cable and other Channels have alsopenetrated in rural households. The newspapers andother printed Media are also gaining strategy buttheir role is still secondary in this regard.

Results and Discussions

The field exercise has given the various inputsabout the rural consumers. This experience wasunique from a marketer's point of view that thecompanies must have a proper understanding ofrural marketing environment at a region wise basis.The data has tabulated in following manner.Advertisement of Coca-Cola (Acceptability pattern)

-------------------------------------------------------------------------Contents Favor Non-Favor No Comment-------------------------------------------------------------------------

Language and content of Ad. 72% 20% 8%

Back ground effect of Ad. 50% 20% 30%Expressions andcommunication styles ofAamir Khan 85% 15% --------------------------------------------------------------------------

The Ad plays an important role for giving boost torural consumers feeling. The feeling plays veryimportant role. The Language and content (72%)and expression style of Aamir Khan (85%) playsignificant role.

BPL advertisement-------------------------------------------------------------------------Contents Favor Non-Favor No Comment

-------------------------------------------------------------------------Amitabh Bachchan as abrand Ambassador 75% 20% 5%

The Action style ofAmitabh Bachchan 65% 30% 5%

The language of Ad. 62% 20% 18%-------------------------------------------------------------------------

Amitabh Bachchan as a brand Ambassador

-------------------------------------------------------------------------Modes Favor Non-Favor No Comment-------------------------------------------------------------------------Hats 65% 30% 5%Wall Paintings 40% 53% 7%Melas 65% 20% 15%-------------------------------------------------------------------------Amitabh Bachchan is a leading player in the adfeature. The Action style of Amitabh Bachchan is avery delighted factor for rural Consumers.

-------------------------------------------------------------------------Contents Favor Non-Favor No Comment

-------------------------------------------------------------------------Style of Presentation 77% 20% 3%

The concept of ad. 65% 20% 15%

Interesting and delightful Ad. 63% 17% 20%

-------------------------------------------------------------------------Style of presentation plays an important role. 77%is a high figure as this affects the whole creativityaspect of any ad. The total concept and delightfulness is a strong factor for this ad. DifferentModes of promotions in rural market.

Hats and Melas play a very important role in thisregard. The 65% response in favor of this is anindicator of this.

Suggestions1) Rural consumer environment must be

understood before the creation of ad.2) Rural mindset accepts the brands easily, which

are close to their culture. This point must bereflected in ad for rural markets.

3) Sponsorships to the Melas and Hats must beconsidered in a significant manner.

4) Selection of brand ambassadors, lyrics must notbe ignored in this regard.

They have a special liking for folk culture so thiscan be taken in an effective utilization of brandpromotions.

ConclusionsThe following conclusions could be drawn:1) The Language and content must be according

to the suitability of rural environment.2) Background figures are also a deterministic

factor.3) Admissibility of brand ambassadors plays an

important role in this regard.4) Special promotion measures are the strong

applicable factors in this regard.

Bibliography

Monish Bali, "The rural market likes it strong", TheEconomic Times, [Interview by An Awasthi], August 23,2000.

Neeraj Jha, "Gung-ho on rural marketing", The FinancialExpress, June 19, 2000.

T. P. Gopal Swamy," Rural Marketing, Environment-Problems and strategies, Wheeler Publishing, 1997.

www.hill.com

www.indiainfoline.com

The Marketing Mastermind Case study HLL- RuralMarketing Initiatives ICFAI Press, PP. 62, Feb 2003.



An author of mass appeal; Deepak Chopra portrays the essence of Buddha's teachings and his quest for

enlightenment in his book 'Buddha: A Story of Enlightenment'. With a few adept strokes of his pen, he has

recreated the life of Buddha, one of the most renowned figures of the world. The book reveals how a prince

turned into an ascetic, and how this iconic journey changed the world forever. It also recounts how Buddha's

teachings still pervade the universe and touch some of the deepest cords of life. This persuasive narrative

by Chopra is indeed a masterpiece, which has a lot to offer to his legion of fan-followers. Embark on a short

spiritual journey by reading this synopsis of the book.

The Book

With a story that regresses back in time, the narrative divulges the life of 'Prince Siddhartha', who was born

in Ancient Asia. His destiny is prophesized during the time of his birth and it is foretold that he would either

be a warrior-king, like his father, or would become the greatest spiritual teacher of all times. But,

Siddhartha's father (Suddhodana) wants the boy to be a ruling monarch like him and not a monk. So, the

King traps his son at the palace and keeps him away from sights of sufferings, miseries and distress, to

prevent any sort of spiritual awakening in him. The King even builds a pleasure-palace for his son, where

the boy is provided with all the palatial pleasures and luxuries.

As the story unfolds, Siddhartha's inner turmoil and distress increases and he yearns for the outside world.

With constant clarion call for his real duties; the prince finally abandons his affluent life and eschews

pleasures of princedom. He adopts the garb of a monk and embarks on an enlightening journey that changes

his life and touches a universal cord. The narrative also shows how the life of this great saint was a

tumultuous affair and was engulfed with murder, sex, suffering, struggle and surrender. The way Siddhartha

transcends all these commonplace aspects and emerges as the enlightened one (Buddha) makes the book

a spellbinding read. Without being didactic, it helps the readers have an insight into the real meaning of

life and understand the true nature of human existence.

The Author

Authors of international bestsellers like Ageless Body, Timeless Mind, Creating Affluence, The Return of Merlin,

The Path to Love and The Seven Spiritual Laws of Success; Deepak Chopra is a doctor and a literary genius

of New Age spirituality and holistic health. An international author, whose work of art are published and read

across the globe; his writings have revolutionized the concept of the wisdom of the East. More than a dozen

of his books are credited with the best-seller status on the New York Times. With his literary grip

encompassing fiction and non-fiction genres, more than fifty books of this poet-prophet have been translated

to over 35 different languages.

Book Reviews

Buddha: A Story of Enlightenment

Dr. K. Venkatraman, Director Technical GlaxoSmithKline plc. ChennaiBuddha: A Story of Enlightenment (Hardcover) By Deepak Chopra HarperCollins India ISBN-878 81-7223-679-3


"Don't Compete with Rivals - Make Them Irrelevant"

L. Krihnamachari Associate Professor Jamnalal Bajaj Institute of Management Studies Mumbai

Companies have long engaged in head-to-head competition in

search of sustained, profitable growth. They have fought for

competitive advantage, battled over market share, and struggled

for differentiation.

Yet in today's overcrowded industries, competing head-on results

in nothing but a bloody "red ocean" of rivals fighting over a

shrinking profit pool. In a book that challenges everything you

thought you knew about the requirements for strategic success,

W. Chan Kim and Renée Mauborgne contend that while most

companies compete within such red oceans, this strategy is

increasingly unlikely to create profitable growth in the future.

Based on a study of 150 strategic moves spanning more than a hundred years and

thirty industries, Kim and Mauborgne argue that tomorrow's leading companies will

succeed not by battling competitors, but by creating "blue oceans" of uncontested

market space ripe for growth . Such strategic moves - termed "value innovation" -

create powerful leaps in value for both the firm and its buyers, rendering rivals

obsolete and unleashing new demand.

BLUE OCEAN STRATEGY provides a systematic approach to making the competition

irrelevant. In this frame-changing book, Kim and Mauborgne present a proven analytical

framework and the tools for successfully creating and capturing blue oceans. Examining

a wide range of strategic moves across a host of industries, BLUE OCEAN STRATEGY

highlights the six principles that every company can use to successfully formulate and

execute blue ocean strategies. The six principles show how to reconstruct market

boundaries, focus on the big picture, reach beyond existing demand, get the strategic

sequence right, overcome organizational hurdles, and build execution into strategy.

Upending traditional thinking about strategy, this landmark book charts a bold new path

to winning the future.

About W. Kim Chan

W. Chan Kim is The Boston Consulting Group Bruce D. Henderson Chair Professor of

Strategy and International Management at INSEAD, France (the world's second largest

business school). Prior to joining INSEAD, he was a professor at the University of

Michigan Business School, USA.


Team building

How to build teams that lead, innovate, and succeed(By Deborah Ancona and Henrik Bresman, Harvard Business School Press,)

Jane Bozarth Associate Professor University of Lincolnshire

"Evidence now exists suggesting that team success at

leading, innovating, and getting things done means

managing both inside and outside the team.

Wait a minute! No team charters? No mascot? No group

hugs/baseball outings/sleepovers? No singing Kum Ba

Yah? What kind of team are you running, anyway? Well,

for starters, maybe one that gets results.

I have been waiting years for someone to say something

new about teams, and authors Ancona and Bresman

finally have done it. Even better, they found out the real

reason many teams fail, and identified the traits that make successful teams work.

They begin by describing the typical dysfunctional team, doing everything "right" yet

managing to get no results. You've seen this team, with members so tightly bonded

the team essentially has thrown up a wall between itself and the organization, allowing

no interlopers-such as, oh, customers or critical new information-to get in. Ancona and

Bresman define this common cause of team failure as a result of the team working

from too strong an inward focus. The successful "X-Team" will learn to see beyond

itself, scouting for critical external resources.

And the "X-Team" is not made up of static, team-y bunch of members, but is a fluid

organism with members moving in and out according to talents, knowledge, and

changing project needs.

The authors offer plenty of in-depth examples from industry, such as the team success

behind Motorola's Razr phone, shored up by references to supporting research (Ancona

is the Seley Distinguished Professor of Management at MIT's Sloan School of Business

Management). There are extensive chapters on the factors supporting X-Teams, and

excellent guidelines for choosing team members.

A useful as well as interesting read, this is the only "team" book I have ever

recommended.

Documents

EDITORIAL BOARD - · PDF fileEDITORIAL BOARD Patron-in-Chief Rtn ... Pedagogies of Knowledge Management @ Infosys Dr. Ashish Manohar Urkude 15 ... Ashish Sharma, Dr. Vijay Pithadia