The International Journal of Business and Management …ijbmr.org/yahoo_site_admin/assets/docs/Issue_2016... · · 2017-06-13The International Journal of Business and Management

The International Journal of

Business and Management Research

A refereed journal published by the International Journal of Business and Management

Research

2016 Issue

The International Journal of Business and Management Research (IJBMR) is published annually

on December of every year via digital media and available for viewing and/or download from

the journal’s web site at

www.ijbmr.org

ISSN: 1938-0429

The International Journal of Business and Management Research (IJBMR) is a peer reviewed

publication. All Rights Reserved

www.ijbmr.org

Volume 9, Number 1

2

Editorial Board

Dr. C. Abid Dr. F. Albayati

Dr. H. Badkoobehi Dr. A. Ben Brik

Dr. A. Caplanova Dr. I-Shuo Chen

Dr. Firend Al R. Dr. F. Castillo

Dr. J. Fanning Dr. K. Harikrishnan

Dr. Anthea Washington Dr. Ahmad Jaffar

Dr. M Al Kubaisy Dr. M. Khader

Dr. M. Lakehal-Ayat Dr. B. Makkawi

Dr. Mona Mustafa Dr. P. Moor

Dr. P. Malyadri Dr. R. Pech

Dr. N. Maruti Rao Dr. J. Ryan

Dr. K. Rekab Dr. I. Rejab

Dr. M. Shaki Dr. P. Moore

Dr. R. Singh Dr. M. Shaki

Dr. B. Swittay Dr. R. Wilhelms

Dr. Jui-Kuei Chen Dr. R. Sergio

Dr. R. Tahir Dr. D. Wattanakul

3 The International Journal of Business and Management Research “IJBMR” 2016 Volume 9, Number 1

Table of Content

The standard recovery period of significant domestic and foreign induced stock market fluctuations: The case of the

Dow Jones Industrial Average

John P. Christie, Ph.D. 6

Marketing e-solution services and cultural readiness in the KRG

Haval Sdeek Mzory, Firend Al R., Ph.D. 18

Technical analysis in practice: Exploring Lebanese stock market

Ale J. Hejase, Jihad S. El-Hokayem, Hussin J. Hejase 28

Telstra, Market-Based Management and Knowledge

Peter J.C.K. Gisbey 44

Locus of control of young Emirati professionals: The socialization process

Antiado, D. F., Castillo, F. G., Tawdrous, M. I. 50

Digital financial services-mobile money

Rajni, Arshi Zareen, Priyanka Chaddha 58

Cyberloafing and innovative work behaviour among banking sector employees

Ayşe Esmeray YOGUN 71

Study on the significance of economic planning for retirement community

M. Baskaran & R. Chandrasekaran 80


2016 Issue

The International Journal of Business and Management Research (IJBMR) is published annually

on December of every year via digital media and available for viewing and/or download from

the journal’s web site at

www.ijbmr.org

The International Journal of Business and Management Research (IJBMR) is a peer reviewed

publication. All Rights Reserved

ISSN: 1938-0429

www.ijbmr.org

Volume 9, Number 1



The standard recovery period of significant domestic and foreign

induced stock market fluctuations: The case of the Dow Jones

Industrial Average

John P. Christie, Ph.D.a1

aAssistant Professor of International Business

Department of Global Business Management & Communication

Regis College, Weston MA, USA

Abstract

This paper is an exploratory research design of over sixteen years of daily stock market activity (N = 4,152) in order to assess the

average recovery period from a significant trading day loss. This is viewed in two ways, pre and post-financial crisis generally as

well as location based in terms of the catalyst of the market selloff being foreign or domestic. The findings show that, when

accounting for outliers and the financial crisis period especially, the recovery period for significant loss trading days is shorter

post-crisis (8.77 days) than it was pre-crisis (11.31). Additionally, the recovery period for significant loss trading days is shorter

for domestic catalyst events (8.25 days) than it was for foreign catalyst events (14.17 days),

© 2016 John P. Christie

Keywords: Financial markets; stock market; market volatility; financial crisis; US economy

1. Introduction

News headlines pertaining to the daily performance of US financial markets are often alarming in nature.

“Collapse, plummet, crash, etc.”, are headlines that seem to arise more frequently when a market indicator shifts

more than a couple of hundred points. This paper is an exploratory attempt to assess if these claims are warranted or

exaggerated attempts to attract readership. This study will examine a major US financial market indicator to see how

often statistically significant market movements actually occur and further assess those movements impact over time.

As indicated in the title an intended finding is to determine a ‘standard recovery period’ in that if a significant

movement in the market does occur and recovers rather quickly then perhaps an initial legitimate news story could

be deemed not as indicative of a crisis. The data will be parsed in two ways. First is in order to determine the average

recovery period pre-crisis of 2008 versus post-crisis (the “new normal”), this is to assess if there is a difference

between the two time periods. The second way the data will be assessed is in terms of the triggering event of a

significant loss being from a domestic or foreign source, again to determine if there is a difference of impact

dependent on event location.

2. Methodology

First a theoretical statement must be made to approach the exploratory problems. There are two main ideas to be

tested in this paper. The first is the recovery period pre and post 2008 financial crisis. The general theory here is that

* Corresponding author. E-mail address: [email protected]


prior to the financial crisis the recovery period will be shorter as significant loss days would be seen as short term or

one-off events and not systematic in nature. Therefore, on significant loss days post crisis, the recovery period

would take longer as the market tries to determine if the event is short term or one-off action versus the start of a

longer term issue reminiscent of the initial events leading to the crisis of 2008. To test this theory the following

hypothesis statement has been created.

Hypothesis 1:

H0: Of trading days that are determined to have experienced a statistically significant loss; trading days that

occur prior to the US financial crisis of 2008 will be shorter on average than those occurring post-crisis.

Null-hypothesis 1:

Ha: Of trading days that are determined to have experienced a statistically significant loss; trading days that

occur prior to the US financial crisis of 2008 will not be shorter on average than those occurring post-

crisis.

The second theory to be tested is related to location of catalyst events that cause a significant loss for the

trading day. This theory is based on events physically closer to the financial market, specifically within that market

(i.e. the United States), being more relevant to the companies listed in that market and therefore would have a more

significant impact on the market which will be measured in recovery period of domestic versus foreign events while

accounting for the exception of the financial crisis. Based on this theory the following hypothesis statement to be

tested has been created.

Hypothesis 2:

H0: Of trading days that are determined to have experienced a statistically significant loss; foreign catalyst

events will have a shorter recovery period on average than do domestic catalyst events.

Null-hypothesis 2:

Ha: Of trading days that are determined to have experienced a statistically significant loss; foreign catalyst

events will not have a shorter recovery period on average than do domestic catalyst events.


3. Results & Discussion

For this study the data set used is the US stock market indicator of the Dow Jones Industrial Average

(DJIA). In order to get a roughly comparable sample set on either side of the 2008 financial crisis, the time period

used is from the first trading day of the century, January 3, 2000 up through July 5, 2016 which is shortly after the

‘Brexit’ vote in the UK which had a statistically significant impact on the US market on June 24, 2016. By

collecting each trading day’s data within that time period, all 4,152 trading days were used as the sample.

In order to first determine what constitutes a statistically significant loss trading day the following

statistical table was created to determine the percentage change that is greater than two standard deviations from the

mean. The mean is the average daily movement (absolute value) of the DJIA. The first and second standard

deviations are calculated by adding µ and . By limiting the trading days to those with losses of more than two

standard deviations, the change of value of the DJIA for that day needs to be beyond the 95% of ‘normal’ volatility

for that indicator.

Statistic %

µ 0.79

0.86

1 1.65

2 2.51

Table 1: Summary Statistics

By reviewing the summary table above it can be noted that in order to qualify as a significant loss day for

the market, the value of the DJIA must drop by 2.51% or more for that day at the close of the trading day. By going

through each change of the DJIA, day over day, the following table has been created to list each qualifying trading

date, as well as other relevant information needed to conduct the analysis. Other items included are the percentage

loss for the day, how many days it took to recover from that loss, the cause of the selloff, the location source

(foreign or domestic), and the reference of the description of the catalyst.

Trading

Date

%

Loss

Days to

Recover Catalyst

Foreign or

Domestic Source

1/4/2000 3.20 3 FED rate increase speculation Domestic Bebar (2000a)

1/28/2000 2.66 2 FED rate increase speculation Domestic Ulick (2000a)

2/18/2000 2.89 18 FED rate increase speculation Domestic Bebar (2000b)

3/7/2000 4.1 7 Dow component (P&G) report Domestic Isidore & Slud (2000)

4/14/2000 5.99 6 FED rate increase speculation & tech stock

concerns

Domestic &

Domestic Tymkiw (2000a) &

Perkins (2000)

6/16/2000 2.57 16 Dow component reports Domestic Tymkiw (2000b)

10/12/2000 3.88 8 Oil price increase Foreign Ulick (2000b)

12/20/2000 2.54 2 Tech stock concerns & FED rate increase Domestic Tymkiw (2000c)

3/12/2001 4.21 26 Tech stock concerns Domestic Futia (2009)

3/14/2001 3.07 24 Tech stock concerns Domestic Futia (2009)


4/3/2001 3.05 2 Profit warnings & tech job cuts Domestic CNN Money (2001a)

9/17/2001 7.39 29 9/11 Domestic Ulick (2001)

9/20/2001 4.45 6 11-Sep Domestic CNN Money (2001b)

10/29/2001 2.95 6 GDP data concerns Domestic Twin (2001)

1/29/2002 2.57 2 TYCO accounting concerns Domestic Ulick (2002)

7/10/2002 3.23 231 Broad sell off, accounting scandals Domestic Twin (2002a)

7/19/2002 4.82 6 Johnson & Johnson / WorldCom concern Domestic CNN Money (2002)

7/22/2002 2.96 2 Citigroup Enron connection concern Domestic Twin (2002b)

8/1/2002 2.66 6 Exxon and poor economic reports Domestic Twin (2002c)

8/5/2002 3.35 1 Poor economic reports Domestic Bhatnagar (2002a)

9/3/2002 4.23 6 Poor economic reports Domestic Bhatnagar (2002b)

9/19/2002 2.87 18 Electronic Data Systems warning Domestic Bhatnagar (2002c)

9/27/2002 3.82 12 Philip Morris, GE, and SBC concerns Domestic Twin (2002d)

10/4/2002 2.54 5 Corporate profit warnings Domestic Bhatnagar (2002d)

10/9/2002 2.93 1 GE, Automakers, & HP concerns Domestic Twin (2002e)

1/24/2003 2.91 38 US war potential with Iraq Foreign Twin (2003a)

3/24/2003 3.65 10 US war with Iraq Foreign Twin (2003b)

2/27/2007 3.38 33 China economic reports Foreign Twin (2007a)

8/9/2007 2.88 27 Credit fears Domestic Ellis & Twin (2007)

10/19/2007 2.71 6 Credit and Housing sector fears Domestic Twin (2007b)

11/1/2007 2.63 1262 Credit market fears Domestic Ellis (2007)

11/7/2007 2.61 21 Weak dollar, GM concerns Domestic The Economist (2007)

1/17/2008 2.53 5 Manufacturing report & Merrill Lynch

losses Domestic

Planes (2013)

2/5/2008 2.99 14 FED and Economic reports Domestic Twin (2008)

2/29/2008 2.55 15 AIG losses Domestic Planes (2013)

6/6/2008 3.22 723 Unemployment report Domestic Planes (2013)

6/26/2008 3.1 31 DOW component downgrades & oil prices Domestic & Foreign Clifford (2008)

9/4/2008 3.08 2 Various events "The financial crisis" Domestic Planes (2013)


























1/7/2009 2.59 136 Weak job reports, corporate profit warnings Domestic Twin (2009a)

1/14/2009 3 76 Weak retail sales, dismal banking news Domestic Twin (2009b)

1/20/2009 4.16 6 Poor corporate earnings Domestic Twin (2009c)

1/29/2009 2.75 65 Poor economic reports Domestic Twin (2009d)

2/10/2009 4.82 55 TARP announcement Domestic Twin (2009e)

2/17/2009 3.88 26 Obama signs stimulus bill Domestic Twin (2009f)

2/23/2009 3.53 1 Continued stimulus concerns Domestic Twin (2009g)

3/2/2009 4.34 8 Government bailout of AIG Domestic Wenning (2009)

3/5/2009 4.24 3 GM and Citigroup reports Domestic Twin (2009h)

3/30/2009 3.34 2 Auto and bank concerns Domestic Twin (2009i)

4/20/2009 3.66 7 Bank earnings concerns Domestic Twin (2009j)

7/2/2009 2.68 8 Employment reports Domestic Twin (2009k)

10/30/2009 2.56 4 Broad sell off Domestic Twin (2009l)

2/4/2010 2.71 7 European debt concerns Foreign Twin (2010a)

5/6/2010 3.25 3 Trading error Domestic Bleeker et al. (2010)

5/20/2010 3.7 19 European debt concerns Foreign Twin (2010b)

6/4/2010 3.2 6 Weak jobs report & Euro value drop Domestic & Foreign Twin (2010c)

6/29/2010 2.69 6 Consumer confidence concerns Domestic Twin (2010d)

7/16/2010 2.56 4 Corporate profit & consumer concerns Domestic Twin (2010e)

8/4/2011 4.48 56 Japan & EU concerns Foreign Censky (2011)

8/8/2011 5.77 5 U.S. credit rating downgraded Domestic Sweet (2011)

8/10/2011 4.74 1 Europe debt concerns (France) Foreign Yousef & Sweet

(2011)

8/18/2011 3.78 5 U.S. credit rating downgraded Domestic Housel (2011)

9/9/2011 2.75 3 EU Concerns (Greece) Foreign Hauser (2011)


9/21/2011 2.55 13 global economic reports Foreign CNN Money (2011)

9/22/2011 3.62 3 FED concerns Domestic Duprey (2011)

11/1/2011 2.52 2 EU Concerns (Greece) Foreign Granitsas et al. (2011)

11/9/2011 3.27 2 EU Concerns (Greece) Foreign Williamson (2011)

8/21/2015 3.23 33 China economic reports Foreign Eavis (2015)

8/24/2015 3.71 3 China economic reports Foreign Ro & Udland (2015)

9/1/2015 2.92 2 China economic reports Foreign Allen (2015)

6/24/2016 3.14 5 Brexit Foreign Bray (2016)

Table 2: Summary Table - Statistically Significant Trading Dates

After creating the summary event table, the first observation is the number of significant loss trading days.

There were 94 loss days of the total 4,152 trading days. This provides an initial finding that significant trading loss

days occurred 2.26% of the time for this period, in other words very infrequently since nearly 98% of the time over

more than 16 years the market movements were within the normal range.

The second observation of note is that of the 16 full year periods in the set, on a yearly basis only 5.8 days

on average are significant loss days, and with more than a third of the years having no significant loss trading days

at all.

Full Year # of Significant Days

2000 8

2001 6

2002 11

2003 2

2004 0

2005 0

2006 0

2007 5

2008 30

2009 13

2010 6

2011 9

2012 0

2013 0

2014 0

2015 3


Table 3: Yearly Summary

To focus in on the hypothesis testing, the tabulation of average recovery period is conducted on the days leading

up to November 1, 2007 which is assumed to be an initial trading day of the overall financial crisis as indicated by

its prolonged recovery period that extends beyond the entire time period constituting the crisis itself. For the pre-

crisis trading dates there are 30 in total with an average recovery period of 18.63 days (559/30). If the outlier date of

July 10, 2002 is removed as an anomaly then the average recovery period pre-crisis adjusts to 11.31 (328/29). The

prolonged crisis lasted through all of 2008 and for purposes of this study it will be considered ended upon the

announcement of the Toxic Asset Relief Plan (TARP) which occurred on February, 10, 2009. Following the TARP

announcement there were 27 significant trading loss dates. By factoring out the outlier in the pre-crisis set of dates

this puts the number of significant loss day’s pre and post crisis at very similar standing of 29 to 27. For the post-

crisis trading dates there is an average recovery period of 8.77 (237/27). As a result, hypothesis 1 is not supported.

To test the second hypothesis the data is looked at in terms of location of the catalyst event that caused the selloff

for the day. For all event dates that involved an event from outside the United States, excluding dates within the

crisis window, there was an average recovery period of 14.17 days (241/17). For all event dates that involved an

event from within the United States, excluding dates within the crisis window and the pre-crisis outlier, there was an

average recovery period of 8.25 days (330/40). As a result, hypothesis 2 is not supported.

4. Conclusion

The finding of the very low average number of significant loss trading days of 5.8 days a year on average

with many years having no such trading days, as well as the overall statistic of significant days only occurring

2.26% of the time would indicate that these types of trading days are very rare occurrences. It would appear that

alarmist headlines that occur often are perhaps not quite warranted, especially if the percentage moved in a day is

less than 2.51%.

To conclude, the hypothesis findings were not as expected in either case. The theories presented did not end

up having supporting evidence as a result of this study. The findings above show that, when accounting for outliers

and the financial crisis period especially, the recovery period for significant loss trading days is shorter post-crisis

(8.77 days) than it was pre-crisis (11.31). This result is contrary to the theory presented that the market may take

longer in a post-crisis trading environment to adjust for significant loss days out of over caution. Additionally, the

second hypothesis pertaining to location was also not supported as a result of this study. The data presented showed

that, when accounting for outliers and the financial crisis period especially, the recovery period for significant loss

trading days is shorter for domestic catalyst events (8.25 days) than it was for foreign catalyst events (14.17 days),

this is contrary to the theory presented that domestic events would be more impactful and therefore have a longer

lasting effect.

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Marketing e-solution services and cultural readiness in the KRG

Haval Sdeek Mzory, Firend Al. R., PhD

Haval, Mzory; DBA Candidate, HELP University

Firend Al. R., PhD; Bournemouth University

Abstract

This research examines factors influenced the adoption e-government by Kurdistan Regional Government (KRG) of Iraq’s Ministries of Transportation and Communication, on how technological, organizational, and cultural factors influence the

ministry’s e-system implementation and services efficiency. Research methodology consisted of quantitative and qualitative

analyses. The sampled population consisted of government employees working at the Ministry of Transportation and

Communication and common citizens as users of government services. Research findings are as following; the implementation of e-government services should be treated as a long-term process of reform and restructuring, and not simply the computerization

of government operations. It is also the finding of this study that interactions among technological, organizational, and cultural

factors must be determined prior to any e-government system implementation. Employees at the Ministry of Transportation and

Communications were found dissatisfied towards each other because of the varying degrees in knowledge, information sharing, attitude towards work, knowledge decimation, willingness to use new e-government system and willingness in general to help the

public (citizens) during work hours. Such findings are highly related to educational level, training, but a lso representative of

government employees’ general attitude towards the workplace. Such outlook towards one’s job highly impacts the quality of

services provided and the level of e-government initiatives success. This study also concludes that the intent to deploy e-government systems in developing countries has increased the adoption and use of technology, as well as cultural challenges

being faced. It is the finding of this research that the interaction between organizational and technological challenges is

intertwined and is sociocultural in nature. This is to say that social and cultural factors impact the level of readiness, ut ilization,

and acceptance of e-governmental systems implementation, and technology acceptances can be highly influenced by socio-

cultural, inter-organizational and technological challenges.

Keywords: E-government, systems, implementation, culture, acceptance, KRG,

5. Introduction & literature

This paper is a partial effort of lengthier research conducted by the principle researcher in the fulfilment of

a DBA dissertation. While the entire research consisted of both qualitative and quantitative approach to data

collection, this paper deals with the qualitative aspects of the research because of the comprehensive nature of the

entire research undertaking. During the last decade, the public sector has experienced a number of reforms leading to

increased implementation of e-government practices (Asogwa, 2013). The major reason behind this change is

attributed to governments’ desire to improve services provided to citizens. An example of such implementation is

provided by Shareef et. al. (2010), which asserts that majority of the governments, will provide and support

electronic delivery of public services to the extent allowed by the technological capability of their existing system.

Market competition and the ever changing business environment have prompted various organizations to

adopt technologies that better perform their business operations (Sultan, 2010). Global competition is driving

organizations to reduce costs and increase productivity to enhance profitability (Schwab, 2016; Misra & Mondal,

2011). For example, numerous information technology (IT) organizations are transcending geographic boundaries


and are offering services across the globe (Luthria & Rabhi, 2009). As a result, organisations using IT are rapidly

forced to adopt emerging technologies to reduce costs, whilst ensuring that the organisation is still competitive

(Saha, 2012).

Information and communication technology (ICT) is a vital enabler of progress to any culture (Al-Raisi &

Firend 2012). As more countries today embrace the Internet, more national and local authorities consider using it to

improve their service delivery to citizens (Firend, 2007). Some service providers improve their service delivery

methods and effectiveness by communicating and connecting with their consumers, and by deploying their

technology assets in a value-enhanced method that generates saving.

Motivated by KRG’s Ministry of Transportation urgent need to examine and implement the most cost

efficient and effective e-government solution, this study came about to identify several distinct variables that

influence the implementation and utilization of e-government services such as: availability; trustworthiness;

security; electronic divide; public understanding; mainstreaming; level of education; public acceptance; legal

framework; politics; culture; attitude; and privacy. The initiative of the Kurdistan Regional Government (KRG) is

discussed in this Chapter. Iraqi Kurdistan has been surviving through a tumultuous period of war driven by political,

social and economic challenges. This segment of the chapter discusses the philosophical foundation for the

implementation and creation of workable e-solutions for the Iraqi region of Kurdistan. The link between government

services providers and citizens was investigated by observing variables suspected of causing failure of e-government

systems implementation in the KRG. This study also examined the effectiveness of plans in the promotion of

citizens’ involvement in the advancement of e-government systems (Shafi and Vishant, 2010).

E-government initiatives ideally promote the connection between authorities and stakeholders (Fang, 2002)

through the use of financial resources for the successful delivery of services. The worldwide development of e-

governments has been an inspiration for many individuals to study this Internet based phenomenon. Traditional

means of communication, such as: telephony; mail; and face-to-face interactions, may become less relied upon, or

obsolete because of the emergence of web-based services. Nevertheless, the traditional communication channels

continue to exist, and their processes are unhindered by the Internet. The use of web-based services complements

other communication media (Shareef et al., 2010a; Pieterson & Dijk, 2007).

6. Problem statement

The transformation in the way governments in the Middle-East interact with citizens and businesses brings

numerous benefits such as efficiency gains and effectiveness in service delivery (Gil-Garcia, 2012). However, the

development or adoption of an electronic solution through which government interacts with citizens and business

entities does have its challenges. One of the main challenges is the concept of the digital divide (Dokhtesmati,

Saberi & Moradi, 2011). This gap between those citizens in the Middle East who know how to use the Internet and

other technology platforms, and those who do not is wide. This has far-reaching implications in that governments

are not able to reach all its citizens through information and communication technology platforms alone. From this

perspective, the implementation of e-government in the Middle East as a culturally coherent entity may create

inequality in citizens’ ability to access government services (Abazajian et. al., 2004; Andersson & Djeflat, 2012).

7. Research questions

1) What are the technological, organizational, cultural challenges faced by the KRG’s ministry of

transportation and communication when implementing e-government service?

2) What are the interactions between technological, organizational, and cultural challenges?

8. Significance of the study

Since offering governmental services electronically can enrich government functions and lessen the physical

burdens on citizens, the significance of this study rests in the ability to examine and identify the influencing factors

and determining the adequate level needed for cost-effective adoption of e-government solutions at ministerial level


at the KRG, whilst fostering an effective and direct connection between the government and its citizens.

Determining the diversity of citizens’ capabilities and their need is considered crucial elements for increasing the

viability of this study and the significance of its contribution to both, Ministry of Transportation and communication

at KRG and to available relevant literature.

4. Research methodology

The research method of this study is mixed-model, consisting of quantitative and qualitative approach in

gathering the information. This paper will focus on the qualitative findings, while quantitative findings will be

published in a subsequent and separate paper. A survey questionnaire was developed and distributed to the public

randomly in Arbil region of the KRG, Iraq to gauge their attitude and readiness towards e-government services. Additional survey questionnaire was distributed to the employees of public sector companies in Kurdistan to gather

qualitative data. It should be mentioned that, the quantitative method is to find answers to the research questions.

This study comprehensively reviewed related literature whilst simultaneously identified the strengths and

weaknesses of prior studies. The literature review covered five primary areas. Here, the current situation in the Iraqi

region of Kurdistan, as illustrated in terms of: demographics; computerization; access to the Internet; availability of

online services; ICT infrastructure; and e-readiness. Literature review also investigated the advantages and primary

drawbacks of the present systems used by the KRG, and analyzed the social, technological, economic, and political

challenges that affected the implementation of e-government systems. Open coding system was used as effective

method of classifying respondents’ findings into themes. All participants were fluent in English language and had no

problem understanding or comprehending the questions of the survey. All Survey were in English language, citizens

were chosen randomly at public areas and were ask for their fluency in English language prior to participation. 150

survey filled by citizens were useful and fully answered, and were used in the qualitative analysis.

4.1. Measurement

Measurements are utilized to help interpret and conclude the quantitative data collected. There are four

basic scales including ratio, interval, ordinal, and nominal. This study utilized the interval and nominal scales in the

quantitative analysis of collected data. A classification method of qualitative answers was applied to classify the

varying answers in the qualitative data collected to help interpret and conclude information obtained. Yellow

stickers in part of the open coded system was used to classify each finding provided by participants. The

classification system helped in narrowing down opinions and emerging themes. Thus, the varying attitudes towards

government services and e-government solution are easily measured and understood. The classification method of

qualitative data was recommended as an effective approach by Cresswell & Clark (2007). This approach helped the

research tremendously in achieving its objectives by comparing users (ordinary citizens) opinions with that of

service providers (government employees).

4.2. Nominal scale

The nominal scale is the most elementary type of scale that is used to measure variables when the

respondents of a survey are classified as being mutually exclusive and exhaustive. The nominal scale is utilized in

this research to calculate variables including gender, educational levels, and race.


9. Analysis and findings

The first independent variable analyzed was the multi-dimensional constructs factor. A primary part

evaluation technique with varimax rotation, as developed by Hair et al. (2010), was used to ascertain the

fundamental aspects of every concept. A consequence of factor analysis is the creation of an advice matrix, which

empowers the identification of significant constructs (Covin, Dess & Lumpkin, 1997). Likewise, Hair et al. (2010)

found that such a strategy could enable good separation of variables. However, the principle component evaluation

method still remains the most common factor extraction procedure use (Cooper & Schindler, 2003).

The dependability of the variables was also analysed. Cooper & Schindler (2003) state that reliability

signifies the internal consistency of a variable, and reveals homogeneity with the scale used to compute the latent

variable. Dependability analyses determine how much the variables can be trusted to quantify the abstraction style

(Hair et al., 2010). Cronbach's Alpha is widely used as a measure for the reliability coefficient (Coakes & Steed,

2003; Sekaran & Bougie, 2010). A reliability evaluation of the variables was done to assess the applicability of the

instrument. A Cronbach’s Alpha value of 0.7 is considered acceptable (Nunnally, 1978).

9.1. Illustrative Evaluation

Illustrative statistics are able to provide a synopsis to enable comparisons between components (Trochim &

Donnelly, 2008). This study used illustrative statistics to analyse demographic data such as age, sex, academic

background, tenure, and other significant background information. This study did not ask for religious affiliations.

9.2. Frequency Distribution

Descriptive statistics were used to examine the frequency distribution of the demographical dimensions of

the respondents specifically factors involving gender, age and educational levels. Demographical factors are

important examining the factors of perceived usefulness, perceived ease of use, organizational readiness, top

management, firm size, perceived capabilities, relative advantages, cultural influences, government support and the

adoption of e-government.

9.3. Bivariate Correlation Coefficient and Multiple Regressions

Sekaran & Bougie (2010) explain that the correlation coefficient investigation output signal illustrates the

direction, relevance, and potency of the association of the variables. Hence, bivariate correlation coefficients were

calculated in this study to find out more about the association among the variables. A multiple regression analysis

was also conducted for this study. Based on the work by Sekaran &Bougie (2010) several regression evaluations

were conducted to show the variance present in the dependent variable relative to the hypothesised variance. In

addition, multiple regressions allowed the connection between both variants to be better understood so that the top

predictor could be identified (Sounderpandian & Aczel, 2006).

9.4. Hierarchical Multiple Regression

Hierarchical multiple regression analysis was used to examine whether there was a relationship between the

adoption of e-government and its perceived usefulness. Baron & Kenny (1986) state that multiple regressions are the

most acceptable evaluation method. Meanwhile, Hair et al. (2010) state that the moderating effect can be determined

based on the probability value suggested in the model summary, along with the p-value as shown in the coefficient

table, A values < 0.05 is considered significant.

9.5. Scale reliability

Reliability is regarded as an important component of conducting a perfect research. In addition to having an

acceptable research strategy, measuring the scale’s reliability can help in managing the research and in verifying that

the results are consistent, perfect, and compatible. Gay and Airasian (2000) proposed that reliability is the level of an

instrument’s capability to calculate what is intended to be measured to measure at a constant level. A higher

reliability level gives confidence to the researcher that the findings gained in the research is constantly similar if the


respondents were to re-do the questionnaires. In the field of empirical research, different reliability coefficients can

be utilized. The analysis sets out the how all the constructs in the instrument measure similar constructs (Sweet &

Grace-Martin, 2003). The reliability test is presented numerically utilizing the SPSS software and the coefficients

differ from 0 to 1. An alpha or result that is closer to 1 shows a higher reliability level based on George and Mallery,

(2003). Thus, the reliability test in this study will utilize the Cronbach’s Alpha. The findings are demonstrated in the

table below for all the different variables. After carrying out the pilot test for the questionnaire, the ambiguous

questions from the questionnaires will be revised and designed according to the test prior to the distribution of the

final questionnaire.

Table 1: the entire Variables’ Alpha Value

Cronbach's Alpha Cronbach's Alpha According to the

Standardized Items No. of Items

0.73 5x10=50

Among 150 usable questionnaires, many relevant issues to culture, organization and technology have been

obtained. Because of the fact that number of questionnaires and the answers were too much, so presenting all of the

questions in this paper is not possible. Thus, through content analyses, numerous results have been achieved that will be discussed in details in a separate research paper. Some of the respondents directly pointed out to the existed

issues while on the other side other ones indirectly mentioned such issues. In addition, the extremity of mentioned

issues was different in all of the obtained responds that have been rated as high, medium and low existed issues. The

first factor that will be discussed is the related challenges to technological context:

9.6. Technological Contexts

One of the important factors that were bolded in this study is the accessibility. In order to use relevant

services to e-government, they should be accessible so that users can easily employ them. As a simple example we

can name accessible ATM machines for paying the bills. It is clear that number of ATM machines will be increased

according to the population in different regions. Among 150 respondents, 122 of them mentioned this issue and the

results are presented in Table below:

Table 2: Accessibility issues

Frequency Problem

26 High

59 middle

37 Low

Total 122

Another explored problem through this study refers to system quality. This problem has been obtained from

21 of the respondents. Since usually the high quality products are being used in order to implement electronic

services so it can be concluded that this subject is initiated from culture. In fact, complaining about quality of the

products is one the usual issues in Middle East countries. Table 3 demonstrates frequency of answers according to

three main intensities:

Table 3: System Quality issues

Frequency Problem

2 High


9 middle

10 Low

Total 21

Another existed challenge that can be related to organizational and cultural context is ease of use. Overall,

131 respondents emphasized on ease of use. Using the electronic systems and online services although seems easy

for young generation but for most of the population is complicated. This issue also can be assumed as to be related

to culture of people to accept new and modern technologies. However, organizational context is equally important because organizational readiness significantly facilitates the utilization of such services. Table 4 presents

frequencies of obtained responds:

Table 4: Ease of Use’s frequency

Frequency Problem

53 High

40 middle

38 Low

Total 131

Service quality was the last identified challenge technically that has been highlighted by this study. Such

technological issue can be related to organization too because organizations should utilize appropriate technologies

in order to offer improved services. Moreover, service quality can be related to cultural context. As it was mentioned

earlier, being dissatisfied of current situation can be related to cultural context. 88 individuals mentioned service

quality either directly or indirectly. In addition, they believed that still electronic services cannot cover all of the

relevant sections. On the other hand, for some of the services they apply online but for proceed the online and

electronic services are not effective enough. Table 5, Shows the frequency of service quality problem:

Table 5: Service Quality’s frequency

Frequency Problem

18 High

32 middle

38 Low

Total 88

9.7. Organizational Demand

In case of using the online and electronic services, users will face many issues. On the other hand,

organization was not able to clarify this matter. Therefore, sometimes the request is not in line with the received

service. Moreover, organizations offer different services that it seems some of them require long time to respond

effectively. On the other hand, the structure of an organization should be developed in such a way that those sections

which have more demands to have more workforce as well. 112 respondents have pointed out to demand and the

frequency of their response is presented in Table 6.

Table 6: Demand’s frequency

Frequency Problem

34 High


27 middle

61 Low

Total 112

Employee readiness is another factor that was achieved from data analyses of 93 collected responses. The

fact that employees in any organization demonstrate an acceptable performance is very critical. In addition to IT, the

employee’s performance is important in order to improve organizational performance. Most of the users asserted

that still there are many errors taking place by employees in organizations. Their low ability results in lower service

quality. On the other hand, national culture could be related to organizational culture that finally impacts employee

performance.

Table 7: Employee readiness’s frequency

Frequency Problem

30 High

22 middle

41 Low

Total 93

The last issue in organizational context is documentation that has been highlighted by respondents. 62 of them emphasized on this problem that it can be related to employee’s experience and official process. On the other

hand, through training the employees and improving the official process such issue can be solved.

Table 8: Documentation frequency

Frequency Problem

20 High

22 Middle

21 Low

Total 62

9.8. Cultural Context

Social background demonstrates all of the issues which explain the basic national characteristics of a

country for example its history, demographic, politics and economies. In e-government, digital divide is known as

the most pressing challenge due to generally developing countries suffer from inappropriate public education levels

and large gaps between rural and urban areas. 43 respondents mentioned the issue that social background is one the

factors that resulted in some problems to implement e-government. Table 9, demonstrates the frequency of social

background.

Table 9: Social background’s frequency

Frequency Problem

9 High

10 middle

14 Low

Total 43


Government support is another factor that both directly and indirectly was mentioned. 67 of total

respondents believed that government training is one of the critical factors in government support.

Table 10: Government Support’s frequency

Frequency Problem

17 High

27 middle

19 Low

Total 63

The findings above, suggests that there are several technological, cultural, and organizational challenges

faces e-government systems implementation in which can significantly impact the degree of success or failure of

such system implementation and usability. Moreover; the explored challenges answer both research questions of this

study. Technological challenges consist of ease of use, accessibility, service quality, and system quality. Existing

organizational challenges refer to demand, employee readiness: documentation while the main cultural challenges are originated from social background and government support. It is also the finding of this study that interactions

among technological, organizational, and cultural factors must be determined prior to any e-government system

implementation. Employees at the Ministry of Transportation and Communications for instance expressed their

dissatisfaction towards other employees in their ministry because of their lack of knowledge, information sharing,

attitude towards work, knowledge decimation, willingness to use new e-government system and willingness in

general to help the public (citizens) during work hours. Such findings are highly related to educational level, training,

but also representative of government employees’ general attitude towards the workplace. Such attitude or outlook

towards one’s job highly impacts the quality of service and the level of e-government initiative success.

Findings of surveyed government employees also showed that some employees are not trained or educated

enough to provide sufficient level of services to the general public. For instance, receiving emails and providing

basic online services (in customer services department) have shown that workers at the ministry are not adequately equipped to handle customer services and deal with online based services. Feedbacks from government employees

also showed that technology acceptance of online service and utilization of computer based systems is low. Findings

revealed that employees as service providers at the ministry prefer to use traditional and outdated methods such as

pen and paper to register information and share information via memorandums and verbal communications rather

than emails. This problem can be linked to lack of training, basic education which disqualify employees from being

placed in such positions and general low personal aptitude and capacity.

A consistent theme as part of the findings revealed that organizational issues such as (accessibility, service

quality, and system quality) are correlated to governmental support. It is a core conviction of employees that there is

lack of support in terms of strong commitment to actually train and support personal in the entirety of any e-

government system implementation initiative. Such conviction was found to affect moral and impact the utilization

of e-government services. Furthermore, there are several arguments raised by participants regarding the linkage

between government and organizational readiness. Employees strongly believe that any improvement in

organizational infrastructure is requires broad governmental support. Employees feel that government has not

adequately provided sufficient training or showed the will to seriously push for fundamental shift in service

providing. As such, employees are not keen on any initiative, and therefore, internal processes should have been

modified by better and broader planning by higher level administrators. Other respondents indicated that the

government should have imposed a new organizational culture prior to providing services to users. However; the

obtained results assume government support to enhance technological and organizational services provided to

citizens as part of general services improvement initiatives. Finally, it is our finding that the interaction between organizational and technological challenges is intertwined and are sociocultural in nature. This is to say that social

and cultural factors impact the level of readiness, utilization, and acceptance of e-government systems


implementation. In other words, technology acceptances can be highly influenced by socio-cultural, inter-

organizational and technological challenges.

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Technical analysis in practice: Exploring Lebanese stock market

Ale J. Hejase, School of Business, Islamic University of Lebanon, Beirut – Lebanon

[email protected]

Jihad S. El-Hokayem, School of Business, Lebanese American University, Beirut – Lebanon

[email protected]

*Hussin J. Hejase, Faculty of Business Administration, Al Maaref University, Beirut - Lebanon

* Correspondence author: [email protected]

Abstract

This research examines the ability of basic Technical Analysis (TA) tools to forecast security prices within the Lebanese stock

market. Moving Average and Relative Strength Index (RSI) variants are used to assess the capabilities of TA against the efficient

market hypothesis represented by a Buy/Hold strategy. The results demonstrate that long, medium and short term Moving

Averages have significant predictive ability to forecast Lebanese banking and real estate stock prices when compared with their Buy/Hold competitors. Likewise, the study suggests that the application of RSI TA variants on several Lebanese stocks have no

predictive ability to outperform the Buy/Hold approach.

Keywords: Technical Analysis, Moving Average, RSI, Lebanon, Stock Market

___________________________________________________________________________

1. Introduction

Technical Analysis (TA) is a forecasting tool for securities that use mathematical algorithms together with

traders’ sentiments (behavior) and the changes in traders’ sentiments (changes in behavior) in order to analyze

market actions and infer how these markets are going to change. In fact, TA professionals try to detect traders’

sentiments, such as optimism, pessimism, profit desire, and loss avoidance in order to deduce trading scenarios

(Kinsky, 2011). Moreover, Technical Analysis is the analysis of human mass psychology; that’s why it is also

referred to as behavioral finance (Credit Suisse, 2012).

Traders that rely on Technical Analysis to achieve their expectations have worked hard to assemble the

fewest possible words that would define TA. Ciana (2011) presents the following definitions:

• Analysis of past price changes in the hope of forecasting future price changes.

• Analysis based on market action through chart study, moving averages, volume, open interest, formations,

and other technical indicators.

• An approach to forecast commodity prices that examines patterns of price change, rates of change, and

changes in volume of trading an open interest, without regard to fundamental factors.

Likewise, other researchers proposed more definitions such as:


• TA is the study of any market that uses price and volume information only in order to forecast future price

movement and trends (Stevens, 2002).

• TA is the art of analyzing price data on charts (Person, 2004)

• TA is the art of identifying a trend reversal at an early stage and riding that trend until the weight of the evidence proves that it has been reversed (Pring, 1991).

From the aforementioned definitions it is clear that Technical Analysis is based on one major assumption:

Markets trend (Kirkpatrick II & Dahlquist, 2011). In fact, traders look forward to buying a stock somewhere at the

early stages of an uptrend movement, then riding the trend, and finally selling the stock at some point; a point where

the trend has attained a sufficiently high price that fulfills the traders’ profit expectations. For Technical Analysts,

the best source of information is the market itself with its publicly available data such as stock prices, market index

levels, number of securities traded and technical indicators (Vuković, Grubišić , & Jovanović , 2012).

Traditionally, the stock market includes two types of players, investors and traders. An investor is simply

an individual interested in finding and then buying shares of stock for long-term price appreciation, while protecting

one’s capital; whereas a trader is more interested in moving in and out of investments’ positions on short-term, with

an aim to achieve a large volume of smaller profits (Thomsett, 2013). Therefore, under the time horizon

consideration of both types, investors relay heavily on Fundamental Analysis (FA), i.e. published results of

operations, financial statements and annual reports; while traders rely on reading charts, spotting short-term trends

and market sentiments. Similarly, due to the time frame considered by each type, investors seeking long term profits

usually monitor their markets at a low frequency rate such as weekly or monthly in contrast to traders who monitor

their markets very carefully and on a continuous basis.

In his book “The Black Swan” (2010), author Nassim Taleb criticizes forecasting models, emphasizing the fact that at any time the impossible or merely the less probable may occur. In fact, the underlying message of “The

Black Swan” is an alert that a sudden change is probable at any moment as per Murphy’s Law (iMinds, 2014)

“Anything that can go wrong will go wrong”. Murphy’s Law justifies The Black Swan’s theory that on the long run

the inevitable will happen; however, considering the long run, when is the time of occurrence? Accordingly, the

challenge that Taleb, Murphy and many others want to bring forward presents itself. Their main concern is to

anticipate and improvise incidents rather than be an ideal risk averter who tries to avoid all sorts of acts and ventures

for fear of what might be the consequences. After all, none can today claim that profit and competitive advantage

may be won by sitting aside or by being on the margin watching other players. Success necessitates that one be in

the midst of the game; that’s how profit is achieved!

In brief, Technical Analysis is a tool that helps in decision making and relies on studying past and present

stock price movements in order to identify the next actions to be taken. Technical Analysis makes use of historical

price movements and volume variations to spot trends, recognize patterns, and see stereotype graphs that may imply

some future behavior. To those who expect black swans and admire Murphy’s curse, it is worth mentioning that, in

general, no prediction tool is 100% reliable, and, in particular, Technical Analysis is like a weather forecast where

there is always an inherent unpredictability in it; predictions are more often right than wrong. After all, it will be

extremely foolish to ignore the weather’s forecasts when the weather itself can seriously affect an action to be taken (Kinsky, 2011). Ignoring forecasts entails risk. However, a technical analyst as time goes by will acquire expertise

and self-propelled confidence that is apt to minimize the impacts of negative undesirable occurrences.

Technical Analysis is not popular within academic communities as is among stock market professionals

(Sulistiawan & Hartono, 2014); TA is more attractive to practitioners than academicians. As a matter of fact, many

practitioners see various key advantages of TA over FA. Three main advantages are specifically highlighted by

Yonatan Rom, the former CEO of a trading establishment -The Winning Edge - located in Johannesburg, South

Africa (FINWEEK, 2006). The first is that TA can be adapted to be used for any security that has trading history,

like commodities, foreign exchange, shares, unit trusts or others. The second key advantage is that TA may be

adjusted to deal with different investment horizons that may be monthly, weekly, daily or even minute-to-minute.


Lastly, TA overwhelms FA in that investors can look at a wide gamut of markets instead of just focusing on a

narrow reach of investment opportunities as fundamental analysts do.

2. Beirut Stock Exchange

Beirut Stock Exchange (BSE) is the second oldest stock market in the region following the Egyptian Stock

Exchange, which is the oldest stock market established in the Middle East in 1883; it was established in 1920, by a decree of the French Commissioner (Beirut Stock Exchange, 2014). Initially, trading was restricted to gold and

foreign currencies. In the early 1930s, trading was expanded to encompass shares of private companies set up under

the French Mandate to operate and manage some public services and sectors (railways, communications, post…).

During the 1950s’ and 1960s, the Lebanese economy witnessed a significant activity as, various industrial, banking

and service companies listed their stocks on the BSE, putting it at the forefront of the regional markets with a total

of 50 listed bonds. By 1975, with the security deterioration in Lebanon, the trading activity in the BSE began to

retreat and was conclusively halted in 1983. This suspension extended until January 22, 1996, when the BSE re-

launched the trading activity in its hall, following a thirteen-year compulsory suspension. Today, ten companies are

listed in the Beirut Stock Exchange as seen in Table 1 (ibid). However, it is worth mentioning that the BSE is

basically not an economic indicator since two of the main columns of the Lebanese economy, namely, tourism and

services sectors, are not included in the bourse.

Table 1: List of companies listed on the Beirut Stock Exchange (Oct. 2014)

Issuer Code Type Class No. of listed shares

Solidere SOLA Common A 100,000,000

SOLB Common B 65,000,000

Bank Audi

AUDI Common 399,749,204

AUSR GDR 102,493,911

AUPRE Preferred E 1,250,000

AUPRF Preferred F 1,500,000

AUPRG Preferred G 1,500,000

BLC Bank

BLC Common 51,033,333

BLCPA Preferred A 400,000

BLCPB Preferred B 550,000

BLCPC Preferred C 350,000

Bank of Beirut

BOB Common 16,822,467

BOBPT Priority 4,762,000

BOBPE Preferred E 2,400,000

BOBPH Preferred H 5,400,000

BOBPI Preferred I 5,000,000

Byblos Bank

BYB Common 565,515,040

BYBDR GDR 1,309,078

BYB08 Preferred 08 2,000,000

BYB09 Preferred 09 2,000,000

Banque BEMO

BEMO Common 51,400,000

BMO13 Preferred 2013 350,000

BLOM Bank BLOM Common 215,000,000


BLBD GDR 73,896,010

BLP11 Preferred 2011 20,000,000

Rasamny Younis Motor Co. RYM Common B 10,920,000

Holcim Liban HOLC Common 19,516,040

S. L. des Ciments Blancs

CBB Common Bearer 6,000,000

CBN Common Nominal 3,000,000

The lack of a “culture of investment” constitutes one of the reasons that have led to the low number of

listed companies in BSE; that is, the Lebanese culture does not consider the stock exchange as a serious investment

(Badri and Salim El Meouchi Law Firm, 2009). Moreover, more than 80% of the Lebanese companies are small and

medium family-owned enterprises which are run by their corresponding family members, thus lacking the

organizational structure and transparency in their management; two components which are important for a company

to possess to be listed at the equity exchange. In addition, many companies have found other alternative sources to

finance their growth and future projects such as bank loans, hence avoiding the task of issuing stocks in the stock

market and inevitably affecting negatively the activity of Beirut Stock Exchange.

Currently, the BSE operates from 9:30 am to 12:30 pm during the five working days of the week (Monday

through Friday). The BSE administration has established some trading policies of its own that are rarely seen

elsewhere. One of these policies that relate directly to the current research is the calculation of the closing prices at

the end of the day. Traditionally, in the world markets this price is the price of the last transaction executed on that

day. However, in Lebanon, where the stock market is characterized by low liquidity, the closing price is set to be the

weighted average of the last five operations with volume levels being used as weights. This means that the closing

price is somehow theoretical and does not really represent the price of some transaction. According to Mr. Youssef

Sadek, the deputy secretary general of BSE, this policy has been adopted so that traders are not be able to play with

the stock prices few minutes before the 12:30 closing time. During an informal interview, Mr. Sadek affirmed that in

an attempt to prevent closing price manipulations, they consider the last five transactions of the day in order to

calculate the closing price, but only after careful inspection and auditing to check that these transactions were not

performed by practically the same trader by creating a fictitious transaction between two of his/her clients with the

objective of raising the closing price. . Likewise, another policy that the BSE follows is related to the fact that

traders are not allowed to go in “Short”, meaning that the only allowed trading positions are trading “Long”.

3. Literature Review

In recent years, Technical Analysis has achieved a significant position in Wall Street. Actually, Technical

Analysis has been applied to a wide gamut of well-known stocks. In fact, Technical Analysis relies on the

imbalances of buying and selling pressures which may be identified through the patterns they create in prices. A

classical study that has tested Moving Averages and trading range break-outs on the Dow Jones Industrial Average

(DJIA) provided strong evidence in favor of the use of Technical Analysis approach (Brock, Lakonisshok, &

LeBaron, 1992). The researchers reported that “overall our results provide strong support for the technical strategies we explored”; furthermore, the researchers’ “Buy/Sell” simulated trades based on technical rules showed

that the outcome’s returns were higher than the outcome’s “normal” returns. The research’s results revealed a typical

difference in returns, over a 10-day period, between a “Bbuy” and a “Sell” signal of about 0.8 percent as compared

to a “normal’ upward drift of 0.17 percent.

Another study that applied the two aforementioned technical trading tools namely, Moving Averages and

trading range breakouts, was performed in England with application on the daily closing values of the Financial

Times-Institute of Actuaries 30 (FT30) index (Mills, 1997). As in the work of Brock et al. (1992), the results


showed that for most of the trading period, the technical rules do work in the sense of producing returns greater than

those produced by following a ”Buy/Hold” strategy.

A different research was performed where a systematic and automatic approach to technical pattern

recognition was applied to various U.S. stocks from 1962 to 1996 (Lo, Mamaysky, & Wang, 2000). The research

concluded that Technical Analysis can add value to the investment process. Moreover, Lo and his co-researchers

proposed that Technical Analysis might be the next application that could bypass human judgment, and which relies

on computational algorithms that perform fully automated pattern recognition tasks.

During the past few years, the works of Brock et al. (1992), Mills (1997), Lo et al. (2000) and many others

were considered, and different studies attempted to apply TA charting and strategies to various financial markets

around the globe. As such, TA was applied to the Chilean Stock Exchange Market (Umaña & Romo, 2007), where

the study used different TA indicators (Moving averages, momentum, %R of Williams, %K and RSI) and concluded

that the “R of Williams” indicator do deliver greater returns than any other indicator when considering the daily closing prices of the stocks from 22 companies that compose the IPSA index. Additionally, the returns of applying

“R of Williams” to the Chilean considered stocks provided greater returns as compared to those resulting from the

usage of a “Buy and Hold” strategy. Moreover, the same research reported that Moving Average techniques

overcome the passive “Buy and Hold” tactic in achieving higher stock returns. Furthermore, the study concluded

that better return results were achieved with short-term Moving Averages (5 days) as compared to long-term

Moving Averages (200 days).

In Hong Kong, Chong and Ng (2008), examined two TA oscillators – the Moving Average Convergence

Divergence (MACD) and the Relative Strength Index (RSI) – to inspect if their outcomes provide higher trading

profits when applied to the London FT30 stock market index. The results of the research conclusively concluded

that the trading rules based on the RSI oscillator provide buy annual returns (22.44%) that are significantly higher (at 5% level) than the 5.8% returns of the passive “Buy-Hold” strategy. Moreover, RSI sell rules generate annual

returns (-3.36%), which is significant (at 10% level) when compared to the 5.8% returns of the passive “Buy-Hold”

strategy. The MACD trading strategies also show signs of higher significant returns when compared to the passive

“Buy-Hold” tactic. The research concludes that the RSI oscillator generates a buy annual return of 42.9%, which is

significantly higher (at 5% level) than the 5.8% return of the passive strategy. The study concludes that the RSI and

MACD rules outperform the “Buy-and-Hold” strategy.

Along the same lines, TA was applied to the Indian Stock Market, where Mitra (2011) studied the

profitability of Moving Average based trading rules on four Indian stock indices for the period that extended from

January 1998 to March 2008. Again to measure the effectiveness of the forecasting power of the trading rules, the

researcher compared the returns of the Moving Average strategy with the returns of the passive static strategy: “Buy

and Hold”. The findings reveal that TA can be more profitable when the transaction costs are kept low. In fact, shorter-period Moving Averages showed better return results than longer periods; this result agrees with those of

other researchers; however, shorter Moving Average rules generate greater numbers of trades and thus increase

transaction costs, making the extra profitability irrelevant.

In another study, six Technical Analysis indicators were used to examine the profitability in the Danish

Stock Market (Chen, Metghalchi, & Garza-Gomez, 2011). The research used the daily closing level (between July 1,

1993 and June 30, 2010) of the OMXC20 stock index, which is a market value weighted index that includes the 20

most traded stocks in the Copenhagen Stock Exchange. The chosen technical tools were: Standard Moving Average,

Increasing Moving Average, RSI, Parabolic Stop and Reverse, Directional Moving System, and MACD. The

benchmark ceiling for comparison purposes was the “Buy-and-Hold” strategy to the investors who follow the

Efficient Market Hypothesis (EMH) (Fama, 1970), where EMH defines an efficient financial market as that market where prices fully reflect all available information. The strength of the EMH rests on the fact that most of its


corresponding statistical analyses show that its associated random walk theory stands well against alternative

specifications which suffer from weaknesses and continues to be hard to beat (Xie, 2011, p. 9).The empirical results

of this research concluded that under the trading rules that result from two or three TA indicators, the “Buy-and-

Hold” strategy is significantly overwhelmed. Once again this research proves that TA has a solid predictive power

when applied to the Danish Stock Market.

The engulfing power of TA over FA was demonstrated again in the Chinese Stock Market. In their study,

researchers Moosa and Li (2011) chose a random sample of 100 stocks from the full roll of companies listed on the

Shanghai Stock Exchange. The objective of the research was to compare technical to fundamental trading rules. The

researchers concluded that in the light of the fact that trading activities within the Chinese Stock Exchange Market

are dominated by individual traders and investors because government shares are not tradable, gives Technical

Analysts the upper hand over the fundamentalists, meaning that former’s trading strategies have more influence on

the stock prices. In fact, the data studied demonstrate that technical trading is more effective.

In an attempt to support TA strategies, Quintanilla Garcia et al. (2012) focused their research on the high-

low ask price spread rather than closing prices. Their aim was to capture more relevant information that did prove

the fact that price ranges have historical dependencies, thus affirming the TA chart observation. The proposed price-

range model was applied to the USD/CHF foreign exchange market; it concluded that “technical analysis in foreign

exchange trading can and should take a leading role for analyzing expected exchange movements”.

Going to the application of TA to the Spanish Stock Markets, Rosillo et al. (2013) examined the use of RSI,

MACD, momentum and stochastic rules on the said markets for securities from 1986 to 2009. While applying the

aforementioned Technical Analysis strategies to calculate profitability, this research took into consideration the two

usually forgotten factors of commissions and economic crises. In effect, commissions and fees charged by banks,

agencies and brokers cannot be ignored since they can change the final profitability outcome; in practice Rosillo and co-researchers considered a commission of 0.85% in their simulations. The other factor that was considered in this

research is the set of economic crises that occurred within the period of study, i.e. between February 14, 1986 and

February 27, 2009. As a matter of fact, the researchers had to isolate the data into disjoint periods that are separated

by the major events such as: the crash of the Black Monday of October 19, 1987, the Russian financial crisis of

August 17, 1998, the USA crash of October 2008, and the world financial crisis of September 14, 2008. With the TA

tools at one hand and the considered factors on the other, the researchers were able to create a software tool that

helps small traders and investors to make decisions in the stock exchange. This tool was tested on different

companies of the Spanish Continuous Market where profitability came up to be dependent on the type of stock

exchange company and the TA indicator used; in addition, the research’s results clearly show that higher

commissions reduce profitability, thus putting the technical indicator under a major strain.

In another part of the globe, the Taiwan Stock Market trading historical data was used by Chen et al. (2011) to investigate the validity and predictability of Technical Analysis. The research data included the Taiwan Stock

Exchange Capitalization Weighted Index (TAIEX) over the period of January 1975 till December 2006, and taking

into consideration that the crises of July 1985 and July 1998 do divide the data at hand into three meaningful sub-

periods. The research concluded that across the full sample and the three sub-periods, and without the consideration

of transaction costs, the mean returns generated by the rules of short-term buy signals are significantly superior to

the passive “Buy-and-Hold” strategy. Likewise, as in other studies, the inclusion of transaction costs reduces

profitability, putting the less profitable long-term predictions at the front. Indeed, the final comment of the

researchers was: “the Taiwan stock market stands for market efficiency, and economical profits cannot be rendered

from technical analysis in this market”. In a recent paper, Simple Moving Average (SMA) trading rules were

applied to the Indonesian Stock Exchange (IDX) during the period that extended from 2007 till 2012 (Sulistiawan &

Hartono, 2014). The objective of the study was to test whether TA signals can detect price reactions before and after

earning announcements’ dates at the Indonesian Stock Market. The results showed that SMA signals before earning

announcements can produce profits, contrary to signals after announcements.


In an attempt to verify how rewarding is technical analysis, Park and Irwin (2007) compared 95 modern

studies on the usefulness of TA and observed that 56 found positive results, 20 obtained negative results and 19

ended up with mixed results. In fact, the debate between TA and FA has another dimension where both TA and FA

stand united in front of the concept of an efficient market which is associated with the idea of a random walk, meaning that security price changes are simply random departures from previous prices, i.e. tomorrow’s security

price will reflect only tomorrow’s news and will not depend on the price changes of today, specifically suggesting

that TA does not have the ability to forecast a security price (Lento, 2008). The random walk theory continues to be

regarded as the testable implication of the efficient market hypothesis (Xie, 2011, p. 213), and denies the reliability

of any fundamental or technical analysis (Thomsett, 2013, p. 251). However, for many others, the problem with this

theory is that it ignores the easily observed trends and momentum factors that do directly affect the price movement

(ibid, p. 255). It is worth mentioning that up till these days, the debate continues with traders and speculators

whereby the idea that a financial market is governed by a “fair game” is negated (Ilinskaia & Ilinski, 1999). In fact,

no technical indicators provide the right signals 100% of the time. The financial markets have so many variables that

do affect the securities’ prices and lead any previously developed perfect system to be ineffective. Likewise, the

trader should be convinced that incredible back-test may fail when estimating the future, but this should not be used

as an excuse for not following a system. Thus, systems should be utilized in combination with any new market

information, and trades are won by simultaneously knowing oneself and the markets (Bedford, 2005).

The aforementioned paragraphs presented an overview of the application of TA around the globe, and

made it clearly evident that research of TA in the MENA region is absent. As a matter of fact, the authors of this

paper could not identify any published research that observes the application of TA trading rules to the regional

stock markets in general and to the Lebanese market in particular. This lack of literature enriches the objective of

this current study, making it a future valuable resource that may trigger many prospect works.

4. The Research Problem

The purpose of this research is to explore the predictive ability of some technical analysis tools when

applied to the main stocks listed on the Beirut Stock Exchange. As delineated, several academic studies have come

to conclude that Technical Analysis is an effective means to extract useful information from market prices (Lo,

Mamaysky, & Wang, 2000). Similarly, Technical Analysis has gained a wide reputation among traders who have

been using its tactics since the late 1800’s and who have enjoyed the Technical Analysis’s fruitful outcomes to

uncover the future patterns of the markets (Brock, Lakonisshok, & LeBaron, 1992). So, this research intends to

review some popular and accepted technical analysis algorithms that were reported to be efficient and effective, to

apply them to the major Lebanese stocks, then conclude to what extent can these algorithms produce the desired

trading signals that relatively maximize profitability.

4. 1. The Beirut Stock Exchange Data

The historical time-series data used in this research was obtained from the BSE archives. The data consists

of daily open, close, high and low prices for five Lebanese stocks: three for banks (Audi, Byblos and BLOM) and

two for real estate (Solidere A and Solidere B), all during the period that extends from July 8, 2003 till October 23,

2014.

Our research will make use of the closing price which, as was mentioned before, is a weighted average of the last

five transactions of the day. Similarly, any trading plan executed based on a closing price at a certain day will be practically traded on the following working day at the closing price of this next day. In addition, the following

assumptions are considered:


• The total period for the simulations will extend from July 2003, till October 23, 2014, meaning that the

total holding period for yield calculations is practically more than ten years.

• All simulations will start with USD10,000 in cash, which will be available at the start of the trading

operations.

• All “Buy” and “Sell” operations are based on long trading since BSE does not permit short trading.

• For all “Buy” trading operations, the whole available cash capital is invested; likewise, for all “Sell”

trading operations, the whole available securities shall be exchanged for cash.

• Any “Buy” trading operation cannot be followed by another “Buy” simply because all available cash is invested under long trading.

• Any “Sell” trading operation cannot be followed by another “Sell” simply because what is available after a

“Sell” is cash that is ready to be invested in buying securities.

• The benchmarks used for TA yield comparison purposes are based on the “Buy-and-Hold” strategy in

accordance with the Efficient Market Hypothesis (EMH) (Fama, 1970). Three Buy-and-Hold” strategies

are considered:

o Daily “Buy-and–Hold”, where the available securities are evaluated daily in accordance with each

day’s closing price. A total unique holding period return (HPR) is calculated over the whole

simulation period by considering the initial capital (USD 10,000) and the final simulation capital

on October 14, 2014.

o Yearly HPRs are calculated based on the closing prices at the start and end of each year for the

whole simulation period. Then a simple average of the yearly HPRs is computed.

o Yearly HPRs are calculated based on the closing prices at the start and end of each year for the

whole simulation period. Then the geometric mean of the yearly HPRs is computed.

• Two types of simulation will be carried; the first excludes trading commissions and the other will consider

a trading commission of 0.3%.

5. Methodology

This research is conducted by taking a long position along three main tracks with all trading transactions

taking place at the end of the day, and considering the BSE adjusted closing price of the security.

The first is a simple “Buy and Hold” track that emphasizes the Efficient Market Hypothesis (EMH)

combined with a stop-loss strategy. With “Buy and Hold”, a trader decides to buy a stock and hold it for a long time

(Thomsett, 2013, p. 54). Under this track, the position is taken at the first day of the study period and the proceeds

are reinvested every day until the end of the study period.

The second and third tracks make use of charts which in their different forms and appearances form the

main stream and the working tool of Technical Analysis (Edwards & Magee, 1997). The second track relies on the interaction between a price graph, mainly a line graph which represents the sequence of closing prices of a security

along time, and a Moving Average graph which smoothens the fluctuations in the security price time series. In fact,

the Moving Average is the average price of the security over a number of periods. This number depends on whether

the trader is looking for short, medium or long term trends in the stock-market (Khan, 2010). In our work, we will be

looking at a 15-day, 50-day, and 100-day Moving Averages to determine short-term, medium-term and long-term

trends respectively. Under this track, and a long position, the security is bought when the trading rule corresponding

to Moving Averages generates a “Buy” signal (golden cross), and is held until a “Sell” signal (dead cross) is

generated. In the paper titled “Monthly Moving Averages-An effective Investment Tool?” (James, 1968), the author

recommends that for a “Buy” signal the closing price will have to rise above the Moving Average by 2% or more.

Likewise, for the “Sell” signal the price will have to fall below the Moving Average by at least 2%. It is worth

mentioning here that Moving Averages are the right tool that eliminates the inevitable subjectivity that arises from

using direct visual methods (Kinsky, 2011, p. 97).


The third track makes use of the aforementioned closing price line graph in conjunction with the Relative

Strength Index oscillator signal. Actually, oscillators are technical analysis tools that act on market prices to

generate signals that may be compared to some predefined reference levels in order to highlight oversold or

overbought stock markets. Again, as indicated before, under a long position, a security is bought when the RSI

oscillator generates a “Buy” signal, and is held until another “Sell” signal is generated.

Again for tracks two and three, the resulting funds originating from “Sell” operations are held in cash until

the start of the next trading “Buy” operation; likewise, the resulting possessed stocks originating from buy

operations are held until the start of the next trading “Sell” operation.

Three main assumptions are considered in the research. The first is related to the BSE trading commissions

which range from 0.3% for big volume operations up to 0.4% for small and medium volume operations. Even

though other studies have considered a transaction cost of 0.7% for each pair of “Buy” and “Sell” (Rosillo, de la

Fuente, & Brugos, 2013), in our simulations, we shall consider the 0.3% that prevails in the BSE. The second is attached to the fact that any money kept in cash after a “Sell” operation will not get any interest. Likewise, the third

assumption is that at the time of any “Buy” or any “Sell” operation, where we will trade with all the available cash

resources at the time of buying or stocks at the time of selling.

The experimental simulation procedure is based on an investor who tries to buy the stocks with all the cash

at hand or sell the owned stocks and hold the cash until the next buy transaction. All simulations start with an initial

sum of USD 10,000. Furthermore, as per previous studies (Rosillo, De la Fuente, & Brugos, 2013), it should be clear

that if an indicator generates a purchase order, no other purchase orders are allowed until the aforementioned

purchase order is settled by a sales order. This same idea applies to sale orders, if an indicator generates a sale order,

no other sale order is allowed until the cash of the current sale undergoes a buy transaction order.

6. Results and Discussions

Three moving average strategies were considered and applied to six of the BSE stocks. The Moving

Average of order 100 was deemed to consider long-term forecasts, of order 50 took into account medium-range

forecasts, while the Moving Average of order 15 was regarded as a means to predict short-term prices. These three

aforementioned Moving Averages were put on one hand as the adopted strategies, and on the other hand two “Buy-

and-Hold” mechanisms were suggested as a benchmark in order to verify the effectiveness of TA. The first

suggested “Buy-and-Hold” mechanism was simply based on finding the arithmetic average of all the returns that

result from each investment year, assuming that during the said year the stocks fluctuate up and down according to the closing prices; i.e., the quantity of stocks purchased at the beginning of the year are evaluated daily as per the

closing price of that day. Similarly, the second considered “Buy-and-Hold” mechanism was based on the same lines

of the first but with a minor difference, where a geometric mean was considered instead of the arithmetic mean.

Thus, having these ideas in mind, simulations were run for six different BSE stocks (four banking stocks: Byblos,

Audi, Audi-GDR, Blom-GDR; and two real estates: Solidere-A and Solidere-B). The results of the corresponding

simulations are depicted in Table 2, where the period of simulation for the majority of the runs extended from July

2003 till October 2014.

Table 2: Summary of results for Moving Averages and Buy/Hold strategies without commissions


Stock Description MA(100) MA(50) MA(15) StartDay EndDay

Yearly

Buy/Hold

(Average)

Yearly

Buy/Hold

(GM)MAHPR ##### ##### ######

DailyB/HHPR ##### -4.76% -5.88%

MAHPR ##### ##### ######

DailyB/HHPR ##### 5.26% ######

MAHPR ##### ##### ######

DailyB/HHPR ##### ##### ######

MAHPR ##### ##### ######

DailyB/HHPR ##### ##### ######

MAHPR ##### ##### ######

DailyB/HHPR ##### ##### ######

MAHPR ##### ##### ######

DailyB/HHPR ##### ##### ######

######

######

Byblos

Audi

BLOM-GDR

Audi-GDR

Solidere-A

Solidere-B

############

######

######

######

######

######

######

######

######

-0.44%-0.12%

11.29%17.20%

17.00%

4.26%

14.42%

14.31% 9.29%

9.41%

2.85%

13.60%

The columns under Moving Average of Table 2 portray the holding period returns (HPR) of both the TA

strategy and the “Buy-and-Hold” approach with daily evaluation during the whole simulation period of more than

ten years. It is clear from comparing the outcomes that the MA HPRs surpass those of the “Buy-and-Hold”. For

example, when considering the Byblos stock listed in the first row of the table, the resulting MA HPRs were 38.45%

(for a Moving Average of order 100), 64.80% (for a Moving Average of order 50), and 50.19% (for a Moving

Average of order 15) which surpass the MA HPRs “Buy-and-Hold” counterparts of -10.65%, -4.76%, and -5.88%

respectively. Likewise, for the Audi stock, the resulting MA HPRs came up to be -18.14% (for a Moving Average of

order 100), 129.66% (for a Moving Average of order 50), and 411.03% (for a Moving Average of order 15); results

which again beat their corresponding “Buy-and-Hold” of -33.33%, 5.26% and 224.325 respectively.

The second set of results is depicted in Table 3 which shows three RSI strategies applied to six of the BSE

stocks. Three different threshold levels are considered being the classical (70, 30), with two alterations namely (80,

20) and (60, 40). These three aforementioned RSI agents were put on one hand as the adopted strategies, and on the

other hand the two aforementioned “Buy-and-Hold” mechanisms were suggested as a benchmark in order to verify

the effectiveness of TA. According to the RSI oscillator signals, a security is considered overbought when the RSI

signal crosses above the upper threshold (for example 70), and oversold when it swings to below the lower (for

example 30). Furthermore, when the oscillator generates a “buy” signal, securities are kept until a “sell” signal is

generated; likewise, cash is kept after a “sell” event until a new “buy” pointer is generated.

Table 3: Summary of results for RSI oscillator and Buy/Hold strategies without commissions


Stock Description RSI(70,30) RSI(80,20) RSI(60,40) Start Day End Day

Yearly

Buy/Hold

(Average)

Yearly

Buy/Hold

(GM)

RSI HPR -45.16% -14.83% -37.16%

Daily B/H HPR -3.03% -3.03% -3.03%

RSI HPR -44.44% -40.42% -54.28%

Daily B/H HPR 224.32% 224.32% 224.32%

RSI HPR -44.72% -26.43% -54.10%

Daily B/H HPR 108.09% 108.09% 108.09%

RSI HPR -35.55% -18.07% -9.75%

Daily B/H HPR 306.52% 306.52% 306.52%

RSI HPR -47.15% -10.10% -33.53%

Daily B/H HPR 135.99% 135.99% 135.99%

RSI HPR -48.61% -49.24% -44.29%

Daily B/H HPR 130.20% 130.20% 130.20%

Audi 28-Jul-03 23-Oct-14 17.20% 11.29%

Byblos 08-Jul-03 23-Oct-14 -0.12% -0.44%

BLOM-GDR 09-Jul-03 17-Oct-14 17.00% 13.60%

Audi-GDR 04-Jan-05 23-Oct-14 4.26% 2.85%

Solidere-B 09-Jul-03 23-Oct-14 14.31% 9.29%

Solidere-A 08-Jul-03 23-Oct-14 14.42% 9.41%

The columns under RSI of Table 3 portray the holding period returns (HPR) of both the RSI oscillator strategy and the “Buy-and-Hold” approach with daily evaluation during the whole simulation period of more than

ten years. It is clear from comparing the outcomes that the “Buy-and-Hold” HPRs surpass those of the RSI oscillator.

For example, when considering the Byblos stock listed in the first row of the table, the resulting RSI oscillator HPRs

were -45.16% for RSI(70,30), -14.38% for RSI(80,20), and 50.19% for RSI(60,40) which fall under the buy-and-

hold HPR of -3.03%. Likewise, for the Audi stock, the buy-and-hold HPR came up to be 224.32% which again beats

the corresponding RSI oscillator HPR’s of -44.44%, -40.42% and -54.32% for RSI(70,30), RSI(80,20), and

RSI(60,40) respectively.

Finally, the periodical end of year cash capitals achieved as a result of the moving “buy” and “sell” signals

of the Moving Averages trading rules are compared with the annual end of year cash capitals of the “Buy-and-Hold”

method (Vasiliou, Eriotis, & Papathanasiou, 2006). To compare the returns of these two tracks, a paired samples t-test is conducted. This t-test aims at accepting or rejecting the null hypothesis that the two tracks (“Buy-and-Hold”

on one side and TA trading rule on the other side) have no difference in their mean returns.

The mean scores for the returns are shown in Table 4 where as expected, with 5% level of significance,

most of the TA moving average strategies perform better than the “Buy-and-Hold” strategy (Burns & Burns, 2008).

Specifically, for the four banking stocks, the averages corresponding to the three strategies MA(100), MA(50) and

MA(15) outperform the “Buy-and-Hold” strategy at a 5% level of significance. As for the real estate stocks

corresponding to Solidere A and B, the paired comparisons show that both MA strategies and “Buy-and-Hold” have

no significant average differences except for the MA(15) strategy which demonstrated significant difference with

the “Buy-and-Hold” (p-values were 0.007986 and 0.002324 for Soldere-A and Solidere-B respectively).

Table 4: Paired sample average comparisons for MA strategies and Buy/Hold with significance levels


Stock Description MA(100) vs B/H MA(50) vs B/H MA(15) vs B/H

Average MA Annual Cash $13,883.27 $14,137.42 $15,048.33

Average B/H Annual Cash $11,490.05 $10,193.45 $10,490.17

Paired Samples p-Value 0.043611 0.001003 0.000201
















Audi

Byblos

BLOM-GDR

Audi-GDR

Solidere-B

Solidere-A

Along the same arguments, but this time with buy and sell commissions of 0.3%, the columns under

Moving Average of Table 5 portray the holding period returns (HPR) of both the TA strategy and the “Buy-and-

Hold” approach with daily evaluation during the whole simulation period of more than ten years. Once more, it is

clear that the MA HPRs surpass those of the “Buy-and-Hold” at the three considered moving averages of 100, 50

and 15.

Likewise, the results of combing the RSI decisions with commission charges of 0.3% for buy and sell

operations produce the results depicted in Table 6 which portrays the holding period returns (HPR) for both the RSI

oscillator strategy and the “Buy-and-Hold” approach. The cells of Table 6 make it clear that commissions do not

alter the fact of table 3 where the “Buy-and-Hold” HPR’s surpass those of the RSI oscillator.

Table 5: Summary of results for Moving Averages and Buy/Hold strategies with 0.3% commissions


Stock Description MA(100) MA(50) MA(15) Start Day End Day

Yearly

Buy/Hold

(Average)

Yearly

Buy/Hold

(GM)

MA HPR 29.62% 44.80% 17.70%

Daily B/H HPR -11.19% -5.33% -6.45%

MA HPR -22.04% 117.58% 358.57%

Daily B/H HPR -33.73% 4.63% 222.38%

MA HPR 79.98% 158.29% 249.22%

Daily B/H HPR 26.87% 44.75% 104.43%

MA HPR 379.47% 545.90% 340.20%

Daily B/H HPR 258.70% 304.09% 304.09%

MA HPR 195.07% 137.50% 30.82%

Daily B/H HPR 168.64% 158.94% 135.54%

MA HPR 177.47% 123.35% 17.12%

Daily B/H HPR 140.86% 163.01% 131.13%

Audi 28-Jul-03 23-Oct-14 16.85% 10.96%

Byblos 08-Jul-03 23-Oct-14 -0.42% -0.74%

BLOM-GDR 09-Jul-03 17-Oct-14 16.65% 13.26%

Audi-GDR 04-Jan-05 23-Oct-14 3.95% 2.54%



Table 6: Summary of results for RSI oscillator and Buy/Hold strategies with 0.3% commissions

Stock Description RSI(70,30) RSI(80,20) RSI(60,40) Start Day End Day

Yearly

Buy/Hold

(Average)

Yearly

Buy/Hold

(GM)

RSI HPR -50.80% -17.58% -49.08%

Daily B/H HPR -3.61% -3.61% -3.61%

RSI HPR -44.88% -43.00% -61.00%

Daily B/H HPR 222.38% 222.38% 222.38%

RSI HPR -49.96% -29.79% -61.50%

Daily B/H HPR 106.85% 106.85% 106.85%

RSI HPR -43.28% -24.16% -28.21%

Daily B/H HPR 304.09% 304.09% 304.09%

RSI HPR -55.69% -17.37% -54.30%

Daily B/H HPR 134.58% 134.58% 134.58%

RSI HPR -57.12% -53.15% -60.10%

Daily B/H HPR 128.82% 128.82% 128.82%



Audi-GDR 04-Jan-05 23-Oct-14 3.95% 2.54%

BLOM-GDR 09-Jul-03 17-Oct-14 16.65% 13.26%

Byblos 08-Jul-03 23-Oct-14 -0.42% -0.74%

Audi 28-Jul-03 23-Oct-14 16.85% 10.96%

7. Conclusions

The results of this study suggest that for the Lebanese Stock Market, TA in general and MA in particular is

able to outperform the Buy/Hold model at Moving Average lags of 100, 50 and 15. In fact, the resulting information

depicted in Tables 2 and 4 provide sufficient evidence of the outperforming ability of TA Moving Average strategies

in overcoming the classical efficient market Buy/Hold approach.


The MA(100) and MA(50) are individually significant across all the data sets corresponding to both the

banking and real estate sectors of the Lebanese Stock Market. On the other hand, the TA strategy corresponding to

MA(15) succeeded in outperforming the Buy/Hold approach under the banking sector; however, it failed under the

real estate sector. These findings suggest that MA trading may be used as a principal tool to forecast and predict the future behavior of most Lebanese banking and real estate sectors with high success on the long MA(100) and

medium MA(50) ranges. Less confidence ability is put on the short ranges like in MA(15) as per the aforementioned

results.

On the other hand, TA strategies under the RSI oscillator when applied to the Lebanese Stock Market

proved to be deficient and could overcome the classical efficient market Buy/Hold approach.

As a final point, it is worth mentioning that most securities’ traders look for a trading mechanism in the

wrong place. In fact, the search for that magic system that never fails is very difficult since it is impossible to

identify a unique “for-all-times” mechanism. Indeed, as suggested by many investigators and traders, the real trading

system is found in the integration of trading philosophy, trading psychology, and market knowledge (Tudela, 2008).

Nevertheless, one must keep in mind the principal clue behind TA: “If you cannot figure out what a chart is telling

you, do not trade!” (Brooks, 2009).

8. Limitations

No use was made of financial and economic reports. Undeniably, governments and media release dozens of

reports every week that offer insights into where the financial markets are heading. In addition, news articles, central

banks announcements and government policies usually dictate how different financial products and future prices

will perform (Person, 2004).

A trader should be careful in that one of the real dangers with data-mining research based strategies is over-

fitting a model to describe the past without being able to forecast the future. Indeed, a correlative fit of past data is

not at all a guarantee of success unless it is backed by a sound support theory (Pham, 2013).

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Telstra, Market-Based Management and Knowledge

Peter J.C.K. Gisbeya

aSwiss Management Centre University, Baarerstrasse 112, Zug, 6302, Switzerland

Abstract

Telstra is a major Australian telecommunications and media company operating within a highly competitive domestic and

international business environment. It has in recent years adopted measures and strategies in order to make itself more customer-

facing and responsive to changing customer needs and requirements. Moreover, it has improved its ability to exploit and disperse

valuable information across its various businesses and locations. This paper seeks to shed light on the nature of market-based

management (MBM) pursued in the same organisation. It finds that there is significant evidence of Telstra efficiently and

effectively applying concepts associated with the generation and use of knowledge, a key facet of market-based management.

Keywords: MBM; knowledge; information; tacit; sharing; customer; advocacy

1. Introduction

As Telstra (2015a) suggests, Telstra is a leading Australian telecommunications and media company. As

Telstra (2015b) notes, the company was founded in 1901 as Post Master General (PMG), becoming Telecom

Australia on the 1st of July 1975 and latterly Telstra on the 13th of April 1993. As Telstra (2015a) confirms, its

mission is to create a “...brilliant connected future for everyone” (p. 4).

As Telstra (2015b) indicates, Telstra offers a wide range of telecommunications and information services. Moreover,

Telstra’s principal activities include providing telephone exchange lines, servicing local and long-distance telephone

calls, supplying mobile telecommunications services, providing a broad data and Internet services, and offering pay

TV services.

Furthermore, as Telstra (2015a) confirms, its vision is “…to be a world class technology company that

empowers people to connect” (p. 4). Telstra (2015c) provides further supporting detail for what Telstra’s intentions

are concerning its vision, noting that it is “…to do for customers what no one else has done: create a world of 1 click, 1 touch, 1 button, 1 screen, 1 step solutions that are simple, easy and valued by individuals, businesses, enterprises

and government” (p. 1). Since 2005, Telstra has systematically implemented a market-based management (MBM)

approach to marketing (Brown et al., 2008). MBM places customers at the heart of the business and makes the

company sell services to meet their needs. Regarding Telstra, and in connection with MBM, this case paper will

particularly focus on the significance of the generation and use of knowledge (Ellig, 1995; Ellig and Gable, 1993;

Koch, 2007; Nonaka, 1991).


Market-Based Management (MBM) is a framework which “…seeks to adapt the principles of a free society and market economy to improve management practice in organisations” (Ellig, 1996, p. 73). Holian (2007) also

indicates that MBM “…attempts to harness the power of markets inside a firm” (p. 23). Building on the work of

Ellig (1996), Koch (2007) defines MBM “…as a philosophy that enables organisations to succeed long term by

applying the principles that allow free societies to prosper” (p. vii). Additionally, Gable (1995) points out that MBM

fosters a decentralised decision-making process within firms, regardless of job titles.


A focus on making firms more market-based therefore lies at the heart of MBM. In this context, it is also suggested

that a firm’s decision-making authority is moved to where knowledge is located (Jensen & Meckling, 1992; Ellig,

1995; Cowen & Parker, 1997). Moreover, the literature indicates a clear rationale for firms to implement MBM,

since it “…seeks to improve organizational performance by exploring analogous elements in market economies and

organizations” (Ellig, 1996, p. 740).

The literature identifies six key elements of organisations committed to MBM: mission and systems, values

and culture, roles and responsibilities, compensation and motivation, generation and use of knowledge, and internal

market (Ellig and Gable, 1993; Ellig, 1995). Correspondingly, Koch (2007) refers to five dimensions of MBM,

namely visions, virtues and talents, knowledge processes, decision rights and incentives.

Generation and use of knowledge is analogous to the market principle of free flow of ideas. ‘Free flow of ideas’ and

the deployment of knowledge incorporates freedom of action, exchange and speech. Tellingly, Andani (2014) notes

that: “An organisation can do the best job of identifying opportunities, solving problems, and making decisions only

by using the best knowledge available within the organisation” (p. 2). This view is supported elsewhere in the

literature; in particular, with employees being allowed to make decisions based on local knowledge, whether tacit or

explicit, productivity is increased within the firm and the firm is more client-focused (Ellig, 1995; Nonaka, 1991).

Moreover, Charles Koch Institute (2013), in determining ten guiding principles of MBM, emphasises the importance

of using, seeking and sharing high-quality knowledge.

Furthermore, the generation and use of knowledge helps executives and senior managers develop their

epistemological awareness and ability to improve the connections between such knowledge and workers’

responsibilities within the relevant businesses (Nobles and Redpath, 1995). In order to fully use knowledge that is

dispersed, tacit, subjective, and subject to change, organisations must give individuals spheres of influence within

which they can use their own judgment. Individuals also need ways to understand how their decisions and actions

affect the decisions and actions to others in the organisation (Cowen and Ellig, 1995).

3. Discussion

As a brief overview, profound changes that have taken place at Telstra in recent years, the implementation

of far-reaching reforms to its marketing strategies outlined by the then chief executive Sol Trujillo in November of

the same year (Telecompaper, 2005), and the importance of knowledge to Telstra as explicated by the MBM

framework.

Firstly, however, it is important to bear in mind the wider backdrop of fundamental change in the

Australian telecommunications industry since the beginning of the early 1990s, with Telstra facing competition for

the first time and becoming a public limited company in 1991 (Telstra, 2015b).

Between 1991 and 1994, Telstra also underwent a significant transformation of its internal communications environment; it benefitted from voice and data platform standardisation, and vastly enhanced access to dispersed

information within the firm (Butler and Weill, 1997).

Regarding these internal changes, Butler and Weill (1997) approvingly note: “The introduction of a standardised

environment has provided Telstra for the first time with a consistent and effective, corporate-wide, approach to IT”

(p. 37).

In October 2006, Telstra strategically repositioned its marketing plan in order to implement a Market Based

Management (MBM) approach. Moreover, at the same time, it introduced its Next G™ mobile broadband network,

responding to customer needs identified as part of the MBM approach (Telstra, 2006).

Telstra provides customers with an integrated telecommunications experience using its own assets and content

services such as Sensis® and BigPond®. Indeed, with its Next G™ network, it offers Australia's largest and fastest

national 3G mobile network, unparalleled by any of its competitors (Telstra, 2015a).


Secondly, the Australian telecommunications industry has undergone a rapid transformation in previous decades,

principally due to the impact of technology and competition.

Regarding technology, in an information society such as Australia, access to information is live, online and

mobile (Given, 2004). Technology has greatly altered the way people make use of information. People increasingly

look for choice, convenience, control and flexibility of the information important to them.

Regarding competition, the Australian government in recent decades has committed itself to opening up the

Australian telecommunications market with the implementation of relevant deregulation and privatisation policies

by successive administrations since 1990 (Butler and Weill, 1997). Telstra's strategy therefore involves the creation

of an easy to use, simple and intuitive solution that provides a real advantage and cost benefit to individuals,

businesses, enterprises and government. It aims to do this by integrating the assets that Telstra owns and sharing

content across home phones, mobiles, Internet and cable TV. This is achieved by offering five core products: home

phone, mobile phone (pre-paid and post-paid), fixed broadband, wireless broadband and Pay TV (Telstra, 2015a).

Telstra’s approach to MBM strategically places the needs and wants of an organisation's customers at the centre

of all business activity. There are five key concepts underpinning Telstra’s MBM philosophy:

i) Customer focus and profitability - focusing on customers and their needs rather than products and

technology;

ii) Creation of customer value - creating superior value over the competitors' product and providing

exceptional value to the customer; this value may be tangible such as providing a physical product or

intangible such as service and account management;

iii) Customer retention and advocacy - creating customer loyalty and encouraging customers to promote

your brand

iv) Competitor analysis - understanding the competitor's differentiation, market share strategy and customer

segmentation and

v) Cross functional teamwork - a collaborative approach to working together, sharing information and

building creativity and problem solving capacity in order to bring a greater and more positive

customer experience.

Telstra uses strong market research to underpin the basis of all marketing activity. Moreover, in order to

understand its customers, Telstra divides its business and consumer customers into unique segments so as to better

make sense of their needs.

Segment needs are differentiated in four ways, namely:

i) Customer demographics including age, income, ethnicity and family status;

ii) Preferred marketing style;

iii) Understanding, acceptance and use of technology;

iv) Buying decisions and motivations.

The role of knowledge, and how it is generated, used and shared is therefore of crucial importance for Telstra.

Telstra’s 4G service now covers 94% of the Australian population. Moreover, its customers remain its highest

priority and it continues to improve the way it interacts with them on a daily basis (Telstra, 2015a).

http://www.afrbiz.com.au/learning-resources/glossary/i.html

http://www.afrbiz.com.au/learning-resources/glossary/s.html

http://www.afrbiz.com.au/learning-resources/glossary/d.html


Specifically, in order to respond to the changing needs of the Australian and increasingly international community,

Telstra needs to reliably and constantly capture information within and within the firm in real-time, fully discerning

its value and significance.

As Brown et al. (2008) notes, regarding the transformation in Telstra started in 2005, “…the new Telstra

leadership communicated its new vision and developed a strategy around the approach of market-based

management…. In 2006 Telstra re-organized with a customer facing structure….It developed learning programs for

implementation across the whole organization starting with the marketing and product management functions in all

business units” (p. 32-33).

Moreover, Brown et al. (2008) indicates that by February 2008, Telstra had put into practice detailed

procedures linked to learning and change management and institutionalised the market-based framework in all

customer-facing parts of the business. Since then, Telstra has gone on to embed the market-based framework

elsewhere in the organisation, particularly at support function level. Ross (2009) indicates that Telstra committed itself to spending A$200 million from 2006 to 2011 on staff training, including the creation of a ‘Telstra Learning

Academy’. Moreover, Ross (2009) suggests that Telstra has used new technologies to enhance control over its

technical work allocation and monitoring processes, especially through the provision of relevant and ‘real time’

information in connection with performance management.

The findings of Brown et al. (2008) and Ross (2009) therefore suggest that Telstra has significantly

committed itself to enhancing the way in which it generates, uses and shares high-quality knowledge.

At this point, it is worth re-emphasising that, in the five years after the unveiling of Telstra’s market-based management strategy, Telstra committed itself to radical change in many areas. In particular, there was

organisational restructuring around customer segments and the building of the national Next GTM network.

Moreover, there was a complex transformation of core systems and processes at Telstra Consumer. Additionally,

there were new product and service offerings, by Telstra Consumer and Telstra Business, respectively. Furthermore,

it can be tentatively suggested that the same changes delivered tangible results, particularly regarding revenue

growth for mobiles and broadband (Telstra, 2006; Telstra, 2007; Telstra, 2008; Telstra, 2009; Telstra, 2010).

The evidence provided by Telstra concerning the next four years is similarly impressive in terms of the

impact it believes its Market-Based Management approach to marketing has had on corporate performance (Telstra,

2011; Telstra, 2012; Telstra, 2013; Telstra, 2014; Telstra, 2015a).

It may be concluded from the preceding points that the relevant changes had a positive and significant impact on the

availability and quality of Telstra’s knowledge. However, as Lamberton (1997) contends, a continuing input of tacit

knowledge is necessary for sustained innovation and growth; new technologies in themselves are not enough.

In any case, all of the points raised thus far indicate that the careful generation, use and sharing of knowledge by

Telstra is key to its business performance. In this regard, an efficient, comprehensive and scalable knowledge

management system is essential (Delisser, 2004). Moreover, the relevant research literature clearly indicates that the

design of an efficient organization involves the careful use of information (Bernus and Nemes, 1999; Daft and

Lengel, 1984; Samuelson and Marks, 2012).

Samuelson and Marks (2012) notes: “A firm should assign decision responsibilities to those managers with

the best information on which to act” (p. 596). Crucially, the aforementioned changes in work practices at Telstra

have led to the creation of a significantly decentralised organisational structure, better mimicking the external

markets outside Telstra and giving managers a significantly greater degree of decision-making autonomy.

For corporations across the world, such as Telstra, it is becoming more and more difficult for them to both survive

and achieve strategic business objectives without widespread and ever more effective use of information technology


(Porter and Millar, 1985). However, while IT may play a significant role in producing competitive advantage, the

advantages in terms of superior corporate performance may not be sustained (Powell and Dent-Micallef, 1997).

Notwithstanding the increasing and positive impact of knowledge-sharing practices for Telstra’s

competitiveness and market performance, there are many barriers that make it difficult for its knowledge

management systems to achieve their pre-determined goals (Riege, 2005).

However, Telstra’s Business Principles serve to usefully mitigate against such negative influences, especially as

they are underscored by underlying values of service, respect for the individual, integrity, commitment and

accountability, trust, leadership and teamwork (Telstra, 2015c).

4. Conclusion

The evidence gathered in this case paper suggests that Telstra has convincingly applied in a variety of ideas

the ‘generation and use of knowledge’ element of MBM. Scholarly support for this viewpoint is strikingly provided

by Brown et al. (2008), especially in connection with the early stages of MBM implementation at Telstra.

Furthermore, Ross (2009) confirms the significant and positive impact of new technologies on the extent and quality

of knowledge available at Telstra, certainly from a management point of view.

However, it is clear that customer advocacy in particular remains both one of the central foci of Telstra’s MBM

approach, and an improvement area (Telstra, 2011; Telstra, 2012; Telstra, 2013; Telstra, 2014; Telstra, 2015a).

Having said this, the projected trajectory in this area for Telstra is clearly upward at the current time (Telstra, 2015a).

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Locus of control of young Emirati professionals: The socialization

process

Antiado, D. F.,a Castillo, F. G.,b Tawdrous, M. I. c a, c

University of Modern Sciences, Dubai, United Arab Emirates

b University of Fujairah, Fujairah, United Arab Emirates

E-mail address: [email protected]

Abstract

Locus of control is perhaps one of the most interesting topics and issues in modern day behavioral psychology and socialization. In a competitive global market and a multicultural and diverse workplace, the young professionals of today have to keep pace

with the demands of a fast-changing environment. This paper is an eye opener on understanding issues that impact on young

professionals in a multi-cultural, competitive and knowledge-based society. The degree to which they are able to control their

environment – their locus of control will significantly affect their work experience and professional growth.

Keywords: locus of control; young professionals; behavior; socio-cultural; growth.

1. INTRODUCTION

Locus of control is perhaps one of the most interesting topics and issues in modern day behavioral psychology and

socialization. In a competitive global market and a multi-diverse workplace, the young professionals of today have

to keep pace with the demands of a fast-changing environment. Their ability to control events in their lives and

strategize how they will manage their careers and lifestyle requires adjustment and fine-tuning. Making adjustments

and trying to cope is determined by their locus of control and ultimately, they become competitive professionally,

socially and economically. Different societies are facing this scenario because of work migration and movements of

talents across countries and not to mention as a result of globalization. Many countries are facing these challenges as

a result of global phenomenon and this trend will surely affect both local and international talents. As society finds

itself with these challenges brought about by a multicultural and diverse environment and experiences varied

influences coming from various sectors in the society, makes the locus of control vulnerable to those changes. If the society has a homogenous environment then we can expect the same results however, if they are exposed in a

multicultural and diverse environment then there is tendency that their shared values, beliefs, and behavior will

change.

The concept which was originally developed by Rotter (1966) refers to Locus of Control as an individual's

perception about the underlying main causes of events in a person’s life. The authored further mentioned that locus

of control can either be internal and external. He argued that behavior was largely guided by "reinforcements"

(rewards and punishments) and that through contingencies such as rewards and punishments, individuals come to

hold beliefs about what causes their actions. These beliefs, in turn, guide the kind of attitudes and behaviors people

adopt. While according to Zimbardo (1985, p. 275), a locus of control orientation is a “belief about whether the

outcomes of our actions are contingent on what we do (internal control orientation) or on events outside our personal

control (external control orientation)."

In the case of young Emirati professionals in the United Arab Emirates known as YUPPIEs, belong to the

Generation Y who had grown in an environment where they have witnessed many changes in their lifetime. As a

result, their society experienced generation gap and the young professionals tends to behave differently because of

the influence and exposure in the environment around them. At early age these young professionals are given responsibility by their parents to manage their business and started to be independent to some extent. The country is

dominated by foreign/expatriates which is account to more than 2/3 of the total population. Because of these, young


professionals became more independent in managing and setting priorities in their life, and at the same time being

able to balance their work and social and professional life.

Most of the young professionals are able to work in both public and private at a young age which makes

them responsible and productive citizens of their country. In the process, they learn to manage their time and

balance the demands of work to their life. Emiratis have become fast learners and adoptive type of Arabs, due to

their exposure to multicultural and diverse environment than other nationalities. As a result, they tend to be flexible

and responsive to these challenges and changes. Locus of control orientation provides the individual person the direction of what his is purpose in life to include ones’ plans and aspirations. Their orientation serves a as guide for

them to explore potential opportunities that come their way and discover their well being.

The United Arab Emirates Society: In Focus

Due to globalization of talents, we have seen many issues, challenges and changes that surround the

workplace diversity. It’s happening all over the world and its impact was felt in the United Arab Emirates society in

general. Relative to its size and oil wealth, the UAE has a small population, estimated at 2,624,000 in 1997. Before

1970, the local population was tiny (estimated at eighty-six thousand in 1961) and lacked most of the technical skills

needed for a modern society. The commercial production of oil triggered rapid population growth which eventually

lead to improvements in diet, health care, and living standards, and the importation of a large scale of mostly male

foreign laborers. The figures started to increase gradually because UAE started to open its door for opportunities for

foreign workers to explore their talents and take advantage of the opportunities.

The country is a multicultural society consisting of different nationalities which accounts for more than

65% in its total population, and its growth in the past 30 years accelerated gradually more than any Gulf States in the

region. United Arab Emirates is considered as a home of many opportunities for many nationals across the world

and this trend is perceived to continue thru the years. This young country in the Gulf region was part of the Trucial

States before each countries decided to become independent. The locals are described as respectful and courteous to

their elders and are expected to listen more rather than talk. Emiratis stand close to each other when interacting. It is acceptable for men or women to hold hands. The presence of many ethnic groups has led Emiratis to be tolerant of other social customs, yet they remain conscious of their own customs as markers of cultural identity. The society started to change a little bit because of the various influence and changes in the society where

their younger generations started to adapt. The latter factor has generated a dependence on expatriate labor; the UAE has become a multiethnic society, and Emirati nationals account for only about 20 percent of the population. Language is also an important aspect of their cultural expression that is derived from Arabic language and started to adopt English as a medium of communications in business, commercial trading, education, hospitality and many more.


Psychologist Julian B. Rotter (1954) suggested that our behavior was controlled by rewards and

punishments, and that it was these consequences for our actions that determined our beliefs about the underlying causes for these actions. Our beliefs about what causes our actions then influence our behaviors and attitudes. In a

similar study by Weiner (1980) “People who have internal locus of control believe that the outcomes of their actions

are results of their own abilities. Internals believe that their hard work would lead them to obtain positive outcomes”.

Both Rotter (1954) and Weiner (1980) have the same sentiment on the locus of control of individuals which

characterizes their capability and ability to face situations.

Table 1: Internal and External Locus of Control

External Locus of Control Internal Locus of Control

Individual believes that his/her behaviour is guided by fate, Individual believes that his/her behaviour is guided by his/her

http://www.everyculture.com/knowledge/Expatriate.html

http://psychology.about.com/od/socialpsychology/a/attitudes.htm


luck, or other external circumstances personal decisions and efforts.

Source: http://en.wikiversity.org/wiki/Locus_of_control

Spector (1982) suggested that individuals with an internal locus of control should be more job satisfied because they are less likely to stay in a dissatisfying job and are more likely to be successful in organizations. More generally the

research of Mamlin, Harris and Case (2001) found the following trends:

• Males tend to be more internal than females.

• As people get older they tend to become more internal.

• People higher up in organizational structures tend to be more internal.

Those finding maybe applicable in other countries or demographics however in the case of young professional

in United Arab Emirates, this may subject to further studies and investigation to determine the differences. The

locus of control can be attributed to the self-esteem as Locke, McClear and Knight (1996) noted that “a person with

a high self-esteem will view a challenging job as a deserved opportunity which he can master and benefit from,

whereas a person with low self-esteem is more likely to view it as an underserved opportunity or a chance to fail” (p.

21). This study is very similar to Emirati culture and behavior as they started to find jobs that requires challenge and

they can apply their experiences. As a matter of fact at young age they are able to work for their family business and

private entities. The ratio is 1:5 which favor the women in terms of studying and working because they realize that

they want to use their studies in valuable ways to show that they have something to contribute in the society.

In a study by Jacobs-Lawson et al (2011) they mentioned that “people with an external locus of control tend to believe that the things which happen in their lives are out of their control, and even that their own actions are a result

of external factors, such as fate, luck, the influence of powerful others (such as doctors, the police, or government

officials) and/or a belief that the world is too complex for one to predict or successfully control its outcomes.” The

Locus of control orientation provides the direction on how to manage the challenges and changes around us and

other things beyond our control and significantly affects our lives in general. The research study aims to know the

locus of control of young professionals in the United Arab Emirates. The age, civil status, and gender affects the

respondents’ locus of control which had been taken account as a factor determining how they behave in the social

process. The locus of control which is a core feature of personality is not a fixed trait and is affected by one’s

response to success and or failures throughout life. This study investigates the control orientation of the young

professionals in UAE (Emiratis or locals) in response to the challenges of the workplace affected by a fast changing

multicultural environment.

3. Methods

The research location was in Dubai, United Arab Emirates however various professionals are represented in

different Emirates (city) across the country. Both male and female Emirati respondents were given survey

questionnaires and follow up interviews had been conducted to validate their responses and views of the study. The

data used in this study is a combination of primary and secondary data from various sources. The questionnaire was pre-tested before actual test in order to incorporate the suggestions of other researchers/evaluators. The

questionnaire used is a five point (5) Likert Scale and interviews were conducted to validate the study. The sample

size of the study is N=93 which served as a sample or representative of the population of young professionals in

United Arab Emirates.

4. Data Analysis and Result

The research study is an attempt to discover the “Locus of Control of Young professional in United Arab

Emirates. The results of the research study are presented with corresponding interpretation, findings and

observations. This research study is exploratory and uses descriptive type of research with a clear purpose of

identifying the rationality behind its values, personality and behavior according to variables identified.

Q1. What is the Locus of Control of the Respondents?

Table 2: Summary of Means of Locus of Control

Mean Interpretation

http://en.wikiversity.org/wiki/Locus_of_control


Internal Locus of control 2.699 High

External Locus of Control-

Power of Others

1.914 Average

External Locus of Control-

Chance

2.011 Average

Table 2 shows the summary of means of the locus of control of the respondents. It shows that the respondents tended

to have a high Internal Locus of Control. This means that they believe in their own capability to control themselves

and influence the world around them. In fact from an interview conducted by the researchers to validate the

responses, the male are more aggressive in their behavior towards their ability and potentials. This is because of

their exposure in their family business and society in general. The UAE society is changing as the society started to

accept females in the work place. That is one of the responses by one of the female respondents’ who believe that

the trend of females staying at home only may have changed little by little in the society. This is because there are

many female who going to school to be educated. In fact there are more females going to school compared to males.

The pattern in the society contributed to the responses of both males and females to aspire to be competitive in their

field of interest and specialization. On the other hand both perceived that their locus of control as affected by the

power of others and due to chance was average. It clearly shows that they tended to believe in their capability to

control the events in their lives more than entrust it to fate or let powerful others influence them.

Q2. Is the locus of control of the respondents affected by age?

Table 3: ANOVA of Locus of Control Across Age

Sum of

Squares

Df Mean

Square

F Sig.

Internal Between Groups (Combined)

Within Groups

Total

4.318

21.252

25.570

18

74

92

.240

.287

.835 .654

Powerful Between Groups (Combined)

Within groups

Total

7.176

26.136

33.312

18

74

92

.399

.353

1.129 .343

Chance Between Groups (Combined)

Within groups

Total

4.977

28.013

32.989

18

74

92

.276

.379

.730 .769

**p<0.01

*<0.05

Table 3 indicates a one-way ANOVA showing that there is no difference in the locus of control between the

respondents across age group. It explains that locus of control is not affected by age as a factor. Interviews indicated

that all age groups are optimistic about their future, and they see a bright future ahead.

Q3. What is the Locus of Control of the respondents according to gender?

Table 4: Summary Table of Means of Locus of Control across Gender

Internal Locus of Control External Locus of

Control- Power of Others

External Locus of

Control- Chance


Male 2.693

HIGH

1.855

AVERAGE

1.984

AVERAGE

Female 2.710

High

2.032

AVERAGE

2.065

AVERAGE

Total 2.699

HIGH

1.914

AVERAGE

2.011

AVERAGE

Table 4 shows the summary of means of the locus of control of the respondents according to gender. It explicitly

explains that both males and females tended to have high Internal Locus of Control. Across gender, they are in

control of the events they encounter, and whatever direction they choose is of their own doing and/ responsibility.

On the average, both genders believe that their fate depended on powerful others or by sheer chance. Table 5. ONE WAY ANOVA of Locus of Control across Gender

Sum of Squares Df Mean

Square

F Sig

Internal Between Groups (combined)

Within Groups

Total

.005

25.656

25.570

1

91

92

.005

.281

.019 .890

Powerful*

gender

Between Groups (combined)

Within Groups

Total

.651

32.661

33.312

1

91

92

.651

.359

1.813 .182

Chance* gender Between Groups (combined)

Within Groups

Total

.134

32.855

32.989

1

91

92

.134

.361

.372 .543

**p<0.01

*<0.05

Table 5 indicates a one-way ANOVA showing that there is no significant difference in the locus of control

between the respondents across gender groups. The age comparison is very similar and identical in terms of

responses. The young Emirati professionals have grown in number both in private sectors and government

institutions as they started to value their contribution in the society. Gender wise, the UAE government had been

perceived as giving the opportunities for both genders to contribute significantly in the workplace. The females who

were interviewed felt empowered in the sense that they find themselves becoming productive in society, and able to

take charge of their lives like their male counterparts.

The gender issue is a major concern for the research study because UAE is still the adolescence stage as far

as locus of control is concerned however, they are in the stage that they can be able to adopt and be flexible to those

changes and challenges ahead of them. This research study further showed that gender is not a factor for locus of

control or to their decisions.

Q4. What is the Locus of control of the respondents according to civil status?

Table 6: Summary Table of Means of Locus of Control across Status

Civil Status Internal

Locus of control

External Locus of

Control - Power of Others

External Locus of Control -

Chance


Married 2.92 HIGH 1.92 AVERAGE 2.00 AVERAGE

Single 2.63 HIGH 1.8 AVERAGE 2.02 AVERAGE

Divorced 2.5 HIGH 2.5 HIGH 2.0 AVERAGE

Total 2.699 HIGH 1.914 AVERAGE 2.011 AVERAGE

Table 6 shows the summary of means of the locus of control of the respondents according to civil or marital

status. It confirms that married, single and divorced respondents have HIGH Internal Locus of Control and

AVERAGE in terms of External Locus of Control- chance or circumstances happening as a matter of luck. The,

married and single respondents tended to have AVERAGE External Locus of Control while the Divorced tended to

have HIGHER External Control when powerful others try to influence them. The result indicates that the locus of

control of the Divorced is affected when it comes to powerful others influencing them. One of the sensitive issues

that young professionals of UAE are facing is about marital status. The question is very private and to some extent

very difficult to ask as locals are not really willing to disclose their marital status and they are only willing to share it

to persons they know well. The marital status is a conservative question to Arab people because they want to protect

their privacy and confidentiality of information about their personal life. In fact in actual interview some are not

comfortable and willing to answer and some wants to keep it within themselves. The respondents was ask to be

honest in all of their responses in order to arrive with accurate answers and perspective on locus of control.

Q5. Is the locus of control of the respondents affected by status?

Based on tables 7, 8 and 9 below the locus of control of the respondents is partially affected by civil status.

Only Internal locus of control is affected by status. Married respondents have higher internal locus of control. While

table 6 indicates a one way ANOVA showing that the difference in the internal locus of control means scores

between married group (N=25, M=2.920, SD=.2769), the single group (N=64, M=2.625, SD=.5774), and the

divorced group (N=4, M=2.500, SD=.5774) were statistically significant, F(2,6)=3.265, p=.043 n2=.865. Tukey’s

HSD tests showed that the internal locus of control mean score of the married group is statistically significantly

higher than the singles and divorced group. However, the divorced and single groups did not differ significantly.

Table 7: ANOVA of Internal Locus of Control Across Status

Sum of Squares df Mean Square F Sig.

Between groups

(combined)

1.730 2 .865 3.265 0.43*

Within groups 23.840 90 .265

Total 25.570 92

**p <0.01, * P <0.05

Table 8: ANOVA of External Locus of Control- powerful others across status


Between groups

(combined)

1.472 2 .736 2.080 .131



Total 33.312 92

Table 8 indicates a one way ANOVA showing that there is no significant difference in the external locus of

control- powerful others between the respondents across status groups. This means it doesn’t affect their well being

in the process as they still believe they are capable to handle their situation. Since the information show us their

current responses it remains to be seen in the future their differences thru comparative study in 2-3 year period.

Table 9: ANOVA of External Locus of Control- chance across status


Between groups

(combined)

.005 2 .002 .007 .993


Total 92

**p<0.01, * p<0.05

Table 9 indicates a one way ANOVA showing that there is no significant difference in the external locus of control-

chance between the respondents across status groups. This means that chance across status there is no major

difference as to their responses. Overall the socialization processes of young professionals are very significant and

inter related to each one.

5. Conclusion

In summary, the results of the present study indicate that the locus of control of young Emirati

professionals in UAE tend to be internal. Age - wise, no significant differences in the locus of control was found.

No significant differences across genders was also found. The workplace is perceived as giving opportunities for

both genders to contribute significantly. In terms of status, married respondents tended to have higher internal locus

of control.

The results of the study imply that the young Emirati working professionals perceive their working

environment as manageable and are able to have a degree of control over their lives amidst a fast-changing

multicultural environment. Further indicates they have a stable faith in their abilities as they face the challenges of

the circumstances they are into.

This research study can be a supplemental study about their emotional intelligence and how it affects their

emotional well being as young professionals.

Overall this study is an eye opener to find out how other nationals/citizens’ locus of control impacts on their behavior, attitudes and values in the society. A counseling and/ mentoring program for all young professionals

would be beneficial to guide them as they respond and or meet the challenges in the workplace and continually

attain success in life. And lastly, the study indicates various observations that may occur in the future for other

young professionals due to international competition and changes in the society.

- The locus of control affect their lives which is not permanent and may change thru the years.

- Feedback is very important and assessing their behavior towards work life balance.

- Partnership and collaboration is important tool in locus of control.

- Social engagement is critical in well being of young professionals.

6. Recommendation

From the above results, conclusion and discussions it is evident that Emirati Young professionals are very

competitive as compared with other Arabs in the GCC region. They are able to maximize the use of their skills and


abilities in their work place. Aside from that they are adoptive to the changes and challenges they are facing in their

lives as to work, school and social life. Locus of control may change over time due to social factors that affects

attitudes, behaviors and shared values. As a result the pattern may have a strong shift based from the dominant

influencer that brings those change in behavior and beliefs.

The Locus of Control as a research study in the Middle Eastern region is quite new. Comparison with other

Arabs is really a good study to explore in the near future. Identifying their similarities and differences is very good

topic to be considered. This will highlight the persona of individual as to the uses of their locus of control. The society is changing and this change will be their passport for success in order to be responsive and adoptive to

society.

References

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lasting effect. Review of Educational Research, 67, 43-87.

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a Common Assumption. Journal of Special Education, Winter.

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Spector, P. E. (1982) Behavior in Organizations as a function of employees locus of control. Psychological Bulletin, 91. 482-497.

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http://www.everyculture.com/To-Z/United-Arab-Emirates.html [Available]. Online. [Accessed 7 April 2015]

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________________________________________________________________

Special Thanks: Dr. H. Levenson for allowing us to use her research questionnaire entitled “Levenson Multidimentional Locus of Control Scales

© 1973 Journal of Consulting and Clinical Psychology 41:397-404. Used with permission.

Antiado, D. F and Tawdrous, M . I are Assistant Professors - College of Arts and Science, University of Modern Sciences, Dubai, United Arab

Emirates. Dr. Antiado is a psychologist and guidance counselor with more than 20 years of experience in the Philippines and United Arab

Emirates. Dr. Tawdrous is a senior statistician with more than 20 years of experience in Egypt and Middle East.

Castillo, F. G. Jr., is a Faculty Member at School of Business/MBA program - University of Fujairah, Fujairah, United Arab Emirates. He holds

professional certifications and qualification in Human Resource Management and Quality Management. Dr. Castillo is an industry practitioner

before shifting career in the academe. He has more than 10 years of academic and administrative experience including consulta ncy and trainer

role in major companies in UAE. He won international awards in education and research given by international awarding body in Hong Kong,

United Arab Emirates and Singapore.

http://wilderdom.com/ResearchReviewsMetaanalysis.html#Hans2000

https://en.wikipedia.org/wiki/Digital_object_identifier

https://dx.doi.org/10.1007%2Fs12144-011-9108-z

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http://www.findarticles.com/cf_0/m0HDF/4_34/76157546/p1/article.jhtml?term=Learning+Problems

http://www.everyculture.com/To-Z/United-Arab-Emirates.html

http://psychology.about.com/od/personalitydevelopment/fl/What-Is-Locus-of-Control.htm


Digital financial services-mobile money

Rajnia, Arshi Zareenb, Priyanka Chaddhac

a Department of Commerce, Bharati College, University of Delhi, 110058, INDIA, Email-

[email protected]

bDepartment of Commerce, Bharati College, University of Delhi. 110058, INDIA, Email-

[email protected]

cDepartment of Commerce, Bharati College, University of Delhi. 110058, INDIA, Email-

[email protected]

Abstract

Today mobile money represents a great opportunity for the country, still large number of people are not able to find a viable

alternative to the cash economy and informal financial services. Many studies observed that the digital financial services in the

form of mobile money has had a positive qualitative and quantitative impact on the enhancement of financial inclusion in a

developing economy. Mobile money has a potential to generate revenue stream between 1% and 5% of an MNO’s total revenues.

Although the full potential of digital financial services in India has not yet been realized. With more than 900 million subscribers

across India (which is expected to rise to 1.16 billion by 2017), telecom service providers see mobile money as the next big

business opportunity. In India, majority of the population falls into the 16-30 age bracket, the biggest adopters of technology and

the convenience of mobile commerce. As the youth population they are more prone to the use of new technology as compare to

the others we want to study the use of mobile money among the college youth in Delhi. This paper provides insight into the lack

of mobile money adoption among college youth in Delhi. The study was geared towards investigating the use and awareness of

mobile phones for mobile banking and mobile money services. The authors investigated whether participants in the study

perceived mobile phones as easy to use for various tasks including mobile banking and mobile money transfers and whether

mobile money services were adopted

Keywords: Mobile Money, Mobile payment, Financial Inclusion, Digital Wallet, Mobile banking

10. Introduction

Mobile money services, which were essentially non-existent at the turn of the century, are now available in

over 70 countries, and are used to move billions of dollars every month. In many countries, the number of outlets—

storefronts where customers can open accounts and deposit or retrieve funds associated with transactions conducted

on their mobile phones—exceeds the number of bank branches (Pénicaud, Claire 2013). For the unbanked, who lack

access to traditional bank accounts but who nonetheless have high rates of mobile phone ownership, mobile money

is playing a critical role in financial inclusion by providing access to stored value accounts and a growing set of

financial services. The growth of mobile money has closed the loop in a positive feedback cycle that increases the

incentives for the unbanked to use mobile phones, which in turn increases the market for companies delivering

phone-based financial services. As mobile phones become more capable and less expensive, mobile money will

drive digital inclusion in developing countries in ways that go far beyond the set of currently available transaction-

mailto:[email protected]





focused services.(John Villasenor 2013). With roughly 100 million Indians living away from their hometowns in

other cities across the country, there is a need for safe, timely, and cost-effective money transfer facilities, especially

in remote areas. This is where mobile banking and payments will play a pivotal role (Chowdhury 2012). There are

nearly 900 million mobile connections across India, and this figure is expected to rise to 1.16 billion by 2017.

According to the Telecom Regulatory Authority of India (TRAI) there are 350.37 million rural subscribers. With

more than 900 million subscribers, telecom service providers see mobile money as the next big business opportunity.

Currently, mobile money service is primarily used for Domestic Money Remittance (where the customer moves

cash to a bank account using a digital wallet), payment of utility bills, recharges, settling post-pay bills, travel ticket bookings etc. But there are many other avenues where mobile money can be used, which may include merchant

payments (both online and offline). The full potential of digital financial services in India has not yet been realized.

Millions of people still lack a viable alternative to the cash economy and informal financial services, and mobile

money represent a great opportunity for the country. The mobile phone has had a positive qualitative and

quantitative impact on many of the world’s poor is no longer an issue for debate, and the simple fact that many

invest in a few months’ salary to purchasing one suggests that it continues to meet a broad spectrum of base user

needs from directly creating revenue generating opportunities to indirectly supporting survival. As a personally

carried, connected device the mobile phone is in a prime position to bring mobile money services to the world’s

unbanked, and today there is much activity, debate and not a little hype on its potential (Ramussen, 2009). In India,

as in other markets, increased competition in mobile telephony has resulted in a reduction of the unit cost of voice

per minute. Indian MNOs have had to rely on non-voice revenue streams to hedge against diminishing voice

revenue. Mobile money is one such revenue stream and can generate between 1% and 5% of an MNO’s total

revenues. Globally there are already four MNOs that derive over 10% of their revenues from mobile money

operations, while in Kenya M-PESA contributed 18% of direct revenues for Safaricom in 2012-13 FY. India should

be no exception.

In India, more than 50 percent of the population falls into the 16-30 age bracket, the biggest adopters of technology

and the convenience of mobile commerce. As the youth population they are more prone to the use of new

technology as compare to the others we want to study the use of mobile money among the college youth in Delhi.

This paper provides insight into the lack of mobile money adoption among college youth in Delhi. The study was

geared towards investigating the use of mobile phones for mobile banking and mobile money services. The author

investigated whether participants in the study perceived mobile phones as easy to use for various tasks including

mobile banking and mobile money transfers and whether mobile money services were adopted.

1.2 Mobile Money

Mobile money generally refers to financial transaction services available to anyone with a mobile phone—

including the unbanked. The bricks-and-mortar component of mobile money systems is the network of shops (also

called “outlets” or “branches”) staffed by small business owners who are authorized “agents” of the mobile money

service provider. In addition to providing a means to store value, mobile money is commonly used for person to-

person transfers. As mobile money systems have matured, service offerings have broadened beyond person-to-

person transfers to include bill payment, shopping, payments from employers to workers, cash withdrawal at ATMs,

payment and collection of rent, and access to interest-bearing savings accounts and loans.(John Villasenor

2013).While mobile money can be used by anyone, its impact has been greatest on the unbanked in developing countries, who often live in places without traditional bank branches—or, if they are in larger towns and cities, may

be unable to meet minimum balance requirements associated with some bank accounts. Many of the unbanked, do,

however, own mobile phones, and thus have devices suitable for financial transactions literally in hand. In addition,

they often live and work in close proximity to retail establishments selling groceries and other goods. Mobile money

systems provide the missing link in the chain by turning retail establishments into locations where cash can be

converted into and out of electronic funds. Once the funds are in electronic form, transactions can be conducted

using a mobile phone.

ICICI Bank presents "Mobile Money", an account on your mobile phone where your mobile number itself

is your account number. Some of the key services you can avail through your Mobile Money account: Deposit

Money, Prepaid Recharge, Transfer Funds, Pay Bills, Withdraw Cash, Pay Merchants.


According to MMAI/GSMA (2013) Mobile money is a transformational service that uses information and

communication technologies (ICTs) and non-bank retail channels to extend the delivery of financial services to

clients who cannot be reached profitably with traditional branch-based financial services. Typical examples of

mobile money services are e-wallets that are used to make peer-to-peer (P2P) transfers and a range of payments, or

to receive salary and government to person payments (G2P). The average value of a P2P transaction on a mobile

money platform is USD 35 (Rs 2191).

The key characteristics of a mobile money service are:

• customers get money into and out of the service using a network of transactional agents that operate outside

bank branches; and

• Customers initiate transactions using an interface that is available on basic mobile handsets.

Although there is currently no standard regulatory definition of mobile money and electronic money (e-money)

suitable for global use, countries that have developed their own definitions tend to echo several common elements.

Mobile money is monetary value that is:1

• available to a user to conduct transactions through a mobile device;

• accepted as a means of payment by parties other than the issuer;

• issued on receipt of funds in an amount equal to the available monetary value;

• electronically recorded;

• mirrored by the value stored in an account(s) usually open in one (or more) bank(s); and

• Redeemable for cash.

In jurisdictions where e-money has been defined in regulation or legislation, mobile money is a form of e-

money. For the telecom operator, revenue accrues from the transaction cost that the customer is charged, for money remittance services. The cost varies on the basis of the ticket size for remittance transactions, and the merchant

service fee that the merchant bank agrees to pay for transactions done by the customer using this instrument. This is

not dependent on the telecom consumer, as it is an independent service, said Pradeep Sampath, chief operating

officer, MMPL, a 100% subsidiary company of Tata Teleservices.

2. Review of Literature

According to CGAP-GSMA Mobile Money Market Sizing Study (CGAP-GSMA, 2009) an estimated 3.5

billion people worldwide currently lack access to formal financial services, and there will be 1.7 billion unbanked

people with mobile phones in 2012. The largest barrier to mobile phone ownership is cost – with the average Total

Cost of Ownership (TCO) how much of a consumers income is required to own and use a mobile phone, currently

standing at ~$11 across 77 of the lowest income countries. Research by Nokia suggests that a TCO of $5 or less per

month would enable the majority of world’s lower income consumers to join the world’s cellular-connected

community – with 12 countries including India, Pakistan and Indonesia already in these ranks (Nokia,

2009).According to a GSMA report, about 67% of retail spending in India is carried out in cash. It feels that mobile

money services could potentially replace cash transactions and enable micro transactions to proliferate. Millions of

people would be able to store, send and spend money at low transaction costs using their mobiles.

Jan Chipchase (2009) has specified that the market potential has created an environment where services pilots are being rolled out at breakneck speed, players in this space are advised to look at the edges of the systems –

in particular the role of agents in mediating mobile money transactions. The careful use of real-world analytics

combined with contextual qualitative understanding has the opportunity to reveal not only what people are doing,

but also the nuances of how and why. The author believes that this in turn will lead to the next round of service

innovation insights.

Diniz, Albuquerque and Cernev (2011) focuses on mobile payment/mobile money (as opposed to mobile

financing in general) with a special stress on local development (but not limited to works that deal with development

or developing countries. This study tries to fill the knowledge gap by providing a comprehensive literature review,

which attempts to analyze significant experiences in this field, especially in developing countries. The review is to

map out the existing knowledge on mobile money by pointing out the main sources of information on the subject,

and defining the topics that are most frequently researched. In addition, it examines which locations most studies


focus on, and which methodologies are being applied to these studies, as well as the determining factors and

contexts of the published studies.

Jake Kendall et.al (2011) present the results of some initial probes to understand how market players are

harnessing M-PESA as a platform for new services, and to gauge the emerging ecosystem of these M-PESA enabled

services. They find an ecosystem of firms has sprung up to facilitate the technical integration of existing financial

institutions’ back end systems with the new mobile money platform. They also find a number of innovative new

businesses and “pure play” startups which operate solely over the mobile money platform. They said, significant barriers remain which block the development of a more fully developed ecosystem including the high price of

money transfers and the difficulty of integrating to the mobile money interfaces (especially that of M-PESA). Firms

wishing to outsource their day-to-day cash transactions with clients to the mobile money system may face a new

challenge, as they must find new opportunities for interactions with their clients to reinforce rapport, build trust,

educate, and cross sell new products.

N. Chaudhary (2012) also specified that there is a need for safe, timely, and cost-effective money transfer

facilities, especially in remote areas. This is where mobile banking and payments will play a pivotal role. With

continued support from partners, government, and RBI, mobile banking will continue to break new ground in 2012.

Since this service is used to perform day-to-day transactions, the ecosystem for mobile banking must be mature in

order to make the service complete and useful—right from banks to merchants, agents, utility companies, and

neighborhood vendors. Large banks and telecom companies, such as Union Bank of India and Nokia partnering with

Obopay, represent a turning point for India. Alice S. Etim (2014) studied that the basic mobile phones were widely

adopted and used mainly for communication with mostly family and friends, they were rarely used for servicing

high order tasks like mobile banking or mobile money transfers in Nigeria.

Rajiv Lal and Ishan Sachdev (2015) in their research, analyzed an array of five successful mobile money

deployments from across the emerging markets to attempt to understand which characteristics are critical for the

success of a mobile money service, particularly at launch. The mobile money services they analyzed cover a

disparate set of geographies with different political climates, economic situations, and pre-existing levels of

financial infrastructure, yet they observed significant commonalities among the key competencies required for

success, and the approaches taken to develop those key competencies by the successful services. They find that

consumer and context oriented design orientation is the key success factor, not the specific product offerings, and

can also be generalized to other mobile money deployments.

As the mobile money is a growing concept that why we want to study its impact among Indian youth in Delhi.

3. Objectives of the study

The objectives of the study are:

1. To understand the concept of mobile money in Indian context. (i.e. what change will it bring to consumer

mind sets and their buying behaviour. How it will change the concept of not only shopping but also non-

commercial transactions of customers like for eg an advertisement is there of kotak money, where mobile

money is used to pay shagun to a distantly living sister etc.)

2. To check the awareness of mobile money among the youth.

3. To study the most popular brand of mobile money among youth.

4. To study the proportion of mobile money spent by the youth.

5. To study the areas where youth is using mobile money.

6. To study problems faced by youth in using mobile money.

7. To study the possible reasons for less usage of mobile money among youth.

4. Hypotheses of the Study-


H0 : Youth are not aware about the various brands available for mobile money.

H0 : There is no relationship between usage of online services and usage of mobile money for them.

H0 : Smart phone does not play any role in usage of mobile money.

H0 : Youth does not use mobile money for any purpose

5. Research design and Methodology:

This paper provides insight into the lack of mobile money adoption among college youth in Delhi. The

study was geared towards investigating the use of mobile phones for mobile banking and mobile money services.

The authors investigated whether participants in the study perceived mobile phones as easy to use for various tasks

including mobile banking and mobile money transfers and whether mobile money services were adopted.

5.1. Sampling Fundamentals

The focus of the study is the awareness and usage level of youth across various mobile money services

available in Delhi therefore the sample of the study consisted of students studying in various colleges in Delhi. The

study was administered to a small sample of 250 students, studying in different colleges In Delhi. The sample

included both girls and boys coming from different family backgrounds. Among 250 students 82 were boys and 168

were girls. The convenient random sampling technique is pressed into service to select the sample respondents. The

responses were collected using a questionnaire survey method. The details of data collection and questionnaire

development are discussed in next section.

5.2. Data Collection

For the proposed work, data will be collected from both primary and secondary sources. The secondary

data was collected from various journals, magazine, report MMAI/GSMI. Primary information was collected by

using Questionnaire survey method.

5.3. Questionnaire Design

In order to develop questionnaire, extensive review of existing research study questionnaires was conducted.

The study used non-disguised questionnaire to collect data. In order to minimize the respondents response error,

close ended questions has been considered in questionnaire because the closed questions have guidance of answers

that may encourage the respondents to have more interest in answering the questionnaire. In order to give more

response category to respondent 5 point Likert-scale was considered. Two 5 point Likert- scales has been used for

getting the responses of respondents. The questionnaire was administered to a small sample of 250 students. Out of

250 questionnaires 236 were found valid and thus used for the analysis. The sample included both girls and boys

coming from different family backgrounds. Among 236 students 68 were boys and 168 were girls.

5.4. Pilot-Testing of Questionnaire

For conducting questionnaire survey, it is necessary to test the validity and reliability of the scales which are

developed to test the particular variables. In order to test the validity and reliability of the questionnaire, the pilot

testing of questionnaire were conducted by collecting the 10% responses of total sample size and the reliability

statistics is computed using Cronbach Alpha reliability statistics. The value of Cronbach’s Alpha (0.901) was found

adequately high to consider the questionnaire reliable and consistent.

5.5. Data Analysis Techniques (Statistical Tools)


For data analysis, SPSS (Statistical Package for the Social Sciences) version 17 was used. Various statistical

tests are applied to analyze the data. In order to see characteristics of data, the descriptive statistics was computed;

which consist of central tendency and the frequency distributions with graphical plots. Further cross-tab analysis and

one sample t-test statistics is computed to see the difference in the mean and variance patterns of responses.

6 Results & Findings

6.1 Awareness level: The awareness of respondents was measured across various mobile money services like PayTm,

Google Wallet, PayPal, PayUMoney, Mobilink, Pocket and others. Cross-tab analysis was done regarding the

awareness of boys and girls in sample for above mentioned mobile money services. The results of cross-tab

analysis were plotted in the form of histogram as shown in figure 1. It was found that 100% of respondents knew

the concept of mobile money and were aware about one or more mobile money services available in the market.

However, it can be clearly seen form the graph that boys were found more aware about the mobile money

options available in the market than girls except for ‘PayUMoney’ and ‘Pocket’, where the awareness among

girls is little higher than boys. In addition the awareness of both girls and boys were found highest for ‘PayTm’.

Therefore we can conclude that PayTm is most popular brand among college youth followed by ‘PayUMoney’.

Figure 1

Figure 2 depicts the relationship between the awareness of a particular brand of mobile money with its

usage rate. The ‘PayTM’ brand was found to be the most popular and used brand among the available ones and is

closely followed by ‘PayUMoney’.


Figure 2

6.2. Usage of Mobile & Mobile Money

a. Type of Mobile used: Figure 3 shows that majority of students i.e., around 84% use smart phones irrespective of

the family and income background from where they come. Usage of smart phones and using a number of mobile

applications supports the result of 100% awareness of mobile money services among college going youth.

Figure 3


b. Relationship between mobile usage and mobile money usage

Karl Pearson coefficient of correlation has been used to find the relationship between mobile usage and

mobile money usage. It was found that there exists a very weak positive but significant relationship (r = 0.254)

between the two. This shows that although respondents are using frequently mobile phones for shopping and other

activities but they are not using mobile money for them.

6.3. Usage Of Mobile Money

a. Duration of usage:

Bar graph is prepared in figure 4 to analyse the duration for which the respondents are using mobile money.

It was found that most of the respondents have recently adopted the services. Around 61% of the respondents started

using mobile money in the last six months only. As compared to 100% awareness and popularity the usage of

mobile money is lacking far behind. Study found resistance among respondents for using mobile money as

compared to the traditional means. By now they have become more comfortable and confident in using traditional

means and therefore efforts needs to be made to make mobile money as their comfort zone. Therefore there is a need

of increasing its usage by making it more acceptable in market by vendors and by using promotional offers. They

are aware of mobile money but they also have to be made aware of its simplicity and security of use, only then they

will be encouraged to use more of mobile money services.

Figure 4

b. Awareness:

Although there is 100% awareness among youth but still its usage is limited to a small amount of money. It

can be clearly seen from figure 5, 69% of all respondents spend between Rs.1000 – Rs.5000 only which is not even

1% of their total expenditure. The youths of today are considered as more tech-savy than their elders and also they

do most of their work (like online shopping etc.) online. But still the use of mobile money is lacking far behind.

Therefore, it can be concluded that inspite of higher level of awareness the usage rate among youth is very low.

Figure 5


c. Area of Usage:

Table 1 shows result of t-test applied on the responses of various statements concerning the respondent’s

mobile money usage areas. Considering that the youth now-a-days use online services also on behalf of their parents,

relatives and friends all possible usages areas have been included in the questionnaire. The results of t-test are found

to be significant for all usage areas. On a 5 point likert scale ranging between ‘always’ to ‘never’, it was found that

on an average only sometimes the respondents use mobile money for recharging their mobiles and entertainment,

rarely for fund transfer, bills payment, college fees, taxi bills etc. and never for loan payments and investment. This

also justifies the low amount spent by youth on mobile money.

Table 1: Areas of usage of mobile money

One-Sample t- Test

Statements

N

Test Value = 0

t df Sig. (2-tailed)

Mean

Difference

95% Confidence Interval

of the Difference

Lower Upper

Mobile Recharge 233 33.288 232 .000 3.2618 3.069 3.455

Fund Transfer 231 25.834 230 .000 2.2078 2.039 2.376

Entertainment 232 30.116 231 .000 2.7284 2.550 2.907

Bills payment 232 25.737 231 .000 2.3750 2.193 2.557

Loan Payment 232 22.568 231 .000 1.9052 1.739 2.071

Investment 231 22.614 230 .000 1.8961 1.731 2.061


College Fees 232 26.221 231 .000 2.3578 2.181 2.535

Taxi Bills 232 24.983 231 .000 2.0216 1.862 2.181

Others 232 37.728 231 .000 2.3750 2.251 2.499

6.4. Problems related to usage of mobile money:

The scale used to test the significance of problem areas the study used 5 point likert scale ranging from

‘strongly agree’ to ‘strongly disagree’. The results were found significant representing the neutrality of respondents

on the issues & problem areas associated with mobile money (see table 2). The reason could be the low usage rate.

Since the respondents don’t use mobile money services much frequently, either they are not aware with the

problems or they have not faced it yet.

Table 2: Problem areas of using Mobile Money

Statements N

Test Value = 0

T Df

Sig. (2-

tailed)

Mean

Difference

95% Confidence Interval of

the Difference

Lower Upper

Possibility of wrong amount

debited 234 45.455 233 .000 3.1410 3.005 3.277

Chances of errors & Frauds 234 46.779 233 .000 3.2137 3.078 3.349

Resolving of Complaints 234 46.661 233 .000 3.2350 3.098 3.372

Timely problem solution 234 44.605 233 .000 3.1368 2.998 3.275

7. Challenges faced by Mobile Money In India

Technology evangelist Sam Pitroda told IANS in an interview that “People do not understand the larger

concept. I really wanted to create a leather wallet metaphor on mobile phone — one that gives all the functionalities

I get in leather wallet. It has four phases – mobile banking, mobile payment, mobile commerce and mobile

transaction. In India, the telecom service providers like Bharti Airtel and Vodafone India have developed their

individual mobile wallet platforms to grab the opportunity of promising future of mobile money in India. But the

mobile wallet segment is facing challenges in India. The factors such as alternative money transfer channels, lack of

awareness, stringent policies on restriction of cash-out facility, low profit margins and poor internet connectivity in

many areas are holding back its growth.

In an interview with TOI, Suresh Sethi, business head – M-Pesa, Vodafone India said, while this industry is still

nascent, it offers exciting opportunity for innovations and experiments. “Our current offering is the outcome of our

post extensive research and customer insights from our pilots. Given the number of mobile users in India, mobile


banking has the potential to emerge as a game changer in terms of costs, convenience and speed of reach”. He also

added that their new tie-up with ICICI Bank has created a platform to enhance financial inclusion even in remote

areas.

Bharti Airtel too has been expanding substantially in catering to the need of customers with its Airtel

money. The company is creating a state-of-the-art technology platform and training programs to educate the masses.

However, it is facing the problem of low penetration of mobile in proximity payments which is currently less than

2%. The basic factor of low proximity payments is the lack of required infrastructure for mobile payment acceptance.

The total number of POS terminals in India is less than 700,000 which equates to 5.4% penetration. To add to this

concern, more than 13 million retail establishments with less capability and incentive to acquire POS terminals are

expanding in India.

Another key challenge in enhancing proximity mobile payments in India is the apparent unwillingness of

various players to interoperate in order to adopt the technology at scale. Mobile payment service providers are

needed to work together with banks so that a seamless ecosystem for the efficient use of technology can be created.

All players in India try to solve specific problems within limited geographical reach. The partnership model

which is presently used in other developed economies is still yet to gain its place in India. The RBI is the strongest

factor to determine future of mobile payments in India as it is the provider of the payments bank license. Both

telecom operators and third party payments service providers are required to apply for the license. The telecom

operators without license can at least make use of their network indirectly as they are not allowed to use their

network for payments bank) for last mile connectivity. However, those with payments bank license will be able to

allow cash withdrawals through a wallet which would solve a portion of the problem. Companies like Paytm, having

its operations in the transaction space do not have physical retail networks in rural areas, where a major section of

the unbanked population resides.

International remittance which is currently not allowed for non banks can be offered through payments

banks’ wallets an additional revenue stream. Although cash withdrawal, international remittances etc has been

allowed to be performed by payment banks, the proliferation of mainstream proximity mobile payments in India still

seems to be a distant dream. The Indian central bank, the Reserve Bank of India (RBI), felt that the context in India

was very different from that of other countries which had launched successful mobile money services, and therefore

decided to develop a very proscriptive regulatory framework based on a system they felt would work best. In

particular, they felt that other countries a) had services which focused only on remittance, and not a complete set of

mobile banking tools, which the RBI wanted deployed in India, b) had relatively poor banking infrastructure

compared to India, c) had a national identification number which could be used to facilitate transactions, which India

didn’t yet have at the time, and d) had MNOs with a monopoly position (or an effective monopoly position), which

made it easier for them to gain scale (Rajiv Lal and IshanSachdev (2015)). From all these we say that there are lot of

challenges in India to make the idea of mobile money successful in India.

8. Discussion & Conclusion

From all these results we conclude that there is awareness regarding the mobile money concept among

youth and they were aware about one or more mobile money services exist in the market. Majority of students in our

study use smart phones irrespective of the family and income background from where they come. Thus we can say

that smart phone plays a significant role in the use of mobile money as without smart phone we can’t access the

mobile money services. With the help of smartphone one can download the various apps to use the mobile money

more efficiently. It was also found out from our study that boys were more aware about the mobile money options

available in the market than girls and PayTm is found to be most popular brand among college youth followed by

‘PayUMoney’. The youth spend Rs. 1000-5000 as expenditure on mobile money. It was found that the respondents

use mobile money for recharging their mobiles and entertainment, rarely for fund transfer, bills payment, college

fees, taxi bills etc. and never for loan payments and investment. This also justifies the low amount spent Rs. 1000-


5000 by youth on mobile money. It has also been found that since the youth are not using this service frequently

they are not too much aware about the issues and problem areas related with the mobile money.

9. Limitations

The limitation of our study is the small sample size and we can increase the sample size to get more appropriate results. As we have only focused on the youth regarding their usage of mobile money we can also work

on the other age group to study their usage of mobile money in India. Various others factors can also be studied for

examples the reason for low uses, problems faced by persons not using this service.

References

Alice S. Etim (2014) Mobile banking and mobile money adoption for financial inclusion, Research in Business and Economics Journal, Volume 9

August, 2014.

CGAP-GSMA (2009).Mobile Money Market Sizing Study, blog post.

Chowdhury, N. (2012). Mobile Money for Financial Inclusion in India. User Experience Magazine, 11(2).

Diniz, Albuquerque and Cernev (2011) Mobile Money and Payment: a literature review, Proceedings of SIG GlobDev Fourth Annual Workshop,

Shanghai, China December 03, 2011

John Villasenor 2013, Smartphones for the Unbanked: How Mobile Money will Drive Digital Inclusion in Developing, Issues in Technological

Innovation, No-25, September 2013 Countries

Jake Kendall et.al (2011) An Emerging Platform: From Money Transfer System to Mobile Money Ecosystem, Legal Studies Research Paper Series

No. 2011-14, School of Law, University of California, Irvine

Jan Chipchase (2009) Mobile Phone Practices & The Design of Mobile Money Services for Emerging Markets, Mobile money transfer conference,

December 2009

MMAI/GSMA (2013) Mobile Money: the Opportunity for India, MMAI/GSMA POSITION PAPER, Submission to the Reserve Bank of India’s

(RBI) Committee on Comprehensive Financial Services for Small Businesses and Low-Income Households, 13 November 2013

Pénicaud, Claire(2013) State of the Industry: Results from the 2012 Global Mobile Money Adoption Survey. GSMA Mobile Money for the

Unbanked, February 27, 2013.

Rajiv Lal and Ishan Sachdev (2015) Mobile Money Services - Design and Development for Financial Inclusion, Harward Business School, Working

Paper 15-083, July 2015

Ramussen, Stephen (2009), Hype Cycle and Mobile Banking, Presentation to the Mobile Money Summit, June 23rd.



Cyberloafing and innovative work behaviour among banking sector

employees

Ayşe Esmeray YOGUN

Toros University

Email: [email protected]

Abstract To being an online has been increasing every day. Employees are online day long by different method of access to web sources.

To understand and lead to positive results of technology using is an important and practical matter for companies since it is so inevitable. The main purpose of this paper to examine the role of cyberloafing to predict innovative work behavior of employees

in Adana and Mersin/Turkey from the banking sector. Doorn’s (2011) Cyberloafing Questionnaire and Innovative Work

Behavior Scale (originally Janssen, 2000) were used for data gathering and both measures used that have been used and validated

previously by other studies. Data were collected from 200 employees, with a .50 percent response rate. Questionnaires are completed anonymously. The sample of the study comprised men (n = 48) and women (n = 52), respondents’ average age was 31

years. Stepwise regression function of SPSS was applied to see the per role of cyberloafing dimensions on innovative work

behavior and t test was used to understand the group mean difference between gender and public & private organization types.

The result of the study shows that informational function with β =.20, p <.001; social function with β =.13, p <.05, while le isure function with β = -. 11, p <.05 effect on innovative work behaviors. Thus this unique research, it is aimed to start new discussions

in the literature, to find constructive way of managing the reality of cyberloafing in today’s’ online workplace.

Keywords: Cyberloafing, cyberslacking, innovative work behaviors, stepwise regression, managers, non-managers banks

1. Introduction To survive in the current aggressive marketplace, organizations are to be an innovative more than ever before.

Ramoorthy et al. (2005) found that to accomplish the assignment, organizations attempt to bolster workers, to

advance and show signs of improvement powerful and productive results. Globalization of the commercial center

and clients, the greater part of the cutting edge associations face surviving difficulties. Consequently, the innovative

work conduct is definitely key for associations to survive and to develop in the current aggressive world of

workplace (In Khan, 2012: Jung, Chow, & Wu, 2003; Tierney, Farmar, & Green, 1999). Despite the frequently

emphasized importance of the innovative work behavior (IWB) for organizational success, the measurement of the

IWB, antecedents are still not understood properly.

Cyberloafing; utilizing the web for non-business related goals are an across the board “undesired work conduct”

(CWBs) in the working environment, yet scientists have not given careful consideration to this concept, particularly

approaching the cyberloafing in positive work results, for example, innovative work behavior like in this paper. This present study will find the potential positive results of cyberloafing exercises to understand innovative work conduct

of bank representatives including chiefs.

2. Literature Review And Hypotheses Development Innovative work behavior is a phenomenon that incorporates with the creativity. According to Janssen (2000)

employees need to be skilled to innovate not only to directly innovate, advancement, and development, but also such

issues like quality management and corporate entrepreneurship (Sharma & Chrisman, 1999 in Kahn, 2012).

The internet has made business more powerful by expanding representative profitability, beating the restricted time

and space and empowering better cooperation with clients. On the other hand, the usage of the internet at work has

its pros and cons. Cyberloafing (Lim, 2002), one of four classes of counterproductive work practices (CWBs),

characterized as practices that damage companies and/or individuals in companies (Robinson and Bennett, 1995;


Spector and Fox, 2005). Surfing amid work hours at work is common in the contemporary work environment

(Malachowski, 2005). These undesired work practices called "cyberloafing" and characterized as "any intentional

demonstration of representatives' utilizing their organizations' web access amid an available time to surf non-

employment related sites for individual purposes and to check individual email" (Lim, 2002, p. 677). Through

cyberloafing, employees waste time and less occupied with their work, which, thus, diminishes their effectiveness

(Malachowski, 2005; Stewart, 2000). For instance, it is accounted that 59% of the utilization of the web is not

applicable to work matters (Griffiths, 2003). Cyberloafing additionally causes issues in data frameworks and

information security for the organizations (Levoie and Pychyl, 2001; Sipior and Ward, 2002). After the existed writing results of cyberloafing has been sought and numerous examination has been led to distinguish what conveys

to cyberloafing practices of employees (Blanchard and Henle, 2008; Liberman, Seidman, McKenna, and Buffardi,

2011, Lim, 2002). Burnout, foul play convictions toward the association, outer locus of control and lack of sleep are

some different discoveries which bring loafing (Blanchard and Henle, 2008; Henle and Blanchard, 2008; Krishnan

and Lim, 2010; Lim, 2002). Opposite, responsibility, fulfillment and association and equity recognitions are found

as diminishing cyberloafing (Liberman et al., 2011; Lim, 2002). There still does not have a comprehension of the

consequence of cyberloafing with a positive point of view in the paper. In this manner not very many studies are

recognized in a broad writing hunt, examined cyberloafing from a positive viewpoint. Lim and Chen (2012) are a

special case based with their "cyberloafing is a gain or drain at work?" titled study. The aftereffect of their study

gives a helpful viewpoint to analysts to show that cyberloafing not just for negative results and discoveries propose

that perusing exercises positively affect workers' passionate while messaging exercises have a negative effect.

Another remarkable study, which inspects cyberloafing with a positive point of view were performed by Coker

(2011) named as "opportunity to surf" that indicates cyberloafing empowers reclamation of mental limit and

encourages sentiments of self-rule. Another positive result identified with cyberloafing is said in the examination of

Belanger and Van Slyke (2002). The authors of the paper were demonstrated that cyberloafing could prompt an

enhanced comprehension of existing information. Moreover, cyberloafing exercises additionally "serve to open

blocked innovation channels" (Oravec, 2002, p. 63) which demonstrates that an increment of innovation by cyberloafing.Another issue should be mentioned here is that cyberloafing is an inevitable reality for the companies.

There are some studies shows that cyberloafing is the most common way that employees’ waste time at work and

reducing productivity (Malachowski, 2005). The amount of time employees spend on cyberloafing is also increasing

every day (Blanchard & Helne, 2008; Greenfield & Davis, 2002; Mills, Hu, Beldona, & Clay, 2001).

The lack of studies on the positive impact of cyberloafing in the management literature, possible theoretical

relation between this two concept lead this present paper focuses on examining the cyberloafıng as predictor of

innovative work behavior. Cyberloafing should be highly related to innovative work behavior since self-

development and searching (web, printed document) are associated with cyberloafing (Doorn, 2011) in most of the

scientifically valid IWB scale (Janssen, 2004). Insomuch as, for searching the scale of this research, it is found that

there are same questions both in IWB scale and cyberloafing scale, such as self-improvement, wandering and

searching for acquiring new skills.

IWB were chosen daily innovative work behaviors at work are crucial for surviving and competing

performance of the companies (Janssen, 2000; Oldham and Cummings, 1996). Therefore, the companies support

employees to innovate more than ever. If IWB is so crucial issue of organizational performance as prevalent work

behavior potential predictors should be examined properly to improve the practical application for companies.

Organizations have already implemented policies aimed at internet use. These policies indicate that organizations

recognize the potential risks of internet at work. However, cyberloafing does not only have to lead to negative

consequences. Organizations should realize that the Internet also can provide positive effects which they can utilize. By providing possibilities for organizations to influence cyberloafing, cyberloafing becomes more tangible and

better to control for organizations. The point of the present study was to investigate the cyberloafing as indicators of

innovative work conduct. The conceptual framework is given in Figure 1. differences in gender and public-private

sector banks in cyberloafing. Another aim of the study is to examine the innovative work behaviors’ group mean

differences according to gender and public& private banks. The combination of the above literature formed the main

problem statement of this study as


H1: Informational cyberloafing activities would be correlated with an innovative work behavior.

This study described cyberloafing as a multi-dimensional construct: the combination of different activities together

with the behaviors of cyberloafing. The four activities considered in this study are the social, informational, leisure

and virtual emotional activities: Social activities consisted of expressing yourself or share information via blogs (e.g.

Facebook); informational activity, involved searching information and news (e.g. CNN); leisure activities described activities related to playing games online or download music (e.g. YouTube), finally, the virtual emotional activities

contained all activities on the Internet that were not categorized within the other three activities (e.g. gambling,

dating, shop online).

The four behaviors of cyberloafing were: Development, Recovery, Deviant and Addiction behavior.

Development behavior considered related to the learning and acquiring new skills. Recovery behavior viewed

cyberloafing as a way to recover from work activities. Deviant behavior considered the engagement in cyberloafing

to avoid work activities. The last behavior was the Addiction behavior, related to the compulsory use of cyberloafing

activities. Then again, Belanger and Van Slyke (2002) found that cyberloafing could lead to employees an improved

understanding of knowledge. This indicates an increase of creativity due to Cyberloafing at work despite some

disadvantageous. Below, Figure 1 is the model of the research statement:

Figure1. Research Model

Li and Chung (2006) set a typology of cyberloafing examples as four distinct capacities that clarify individuals

can utilize the web sources. These capacities are: social capacity (e.g. utilizing the Internet to speak with

companions or colleaques), informational capacity (e.g. utilizing the Internet to pick up the data), leisure capacity

(e.g. Web for stimulation) and virtual emotional capacity (e.g. remaining web exercises like betting or dating). The

hypothetically informational capacity is straightforwardly related to the innovative work conduct related practices,

for example, advancement, securing new aptitudes and adapting new way or strategies.

Informational

Social

Leisure

Virtual Emotional

PREDICTORS

IWB

OUTCOME


3. Method

This study is performed within the private bank branches in the Adana and Mersin cities in the south of Turkey.

The banking sector is chosen because employees within bank can be considered as knowledge workers; “a

professional who applies ideas, concepts and information” (Rahman & Abdul-Gader, 1993, p. 303). The tasks of the worker vary from collecting, processing and analyzing information and thus are focused more on mental than

physical efforts (Chen, Hsu, Tung, & Lee, 2010; Gururajan, 2004). Also, the employees in banks use the Internet

during their work. The scope of the study thus is limited to bank employees (managers, non-managers).

This study is based on a survey method which is sent and filled by email paradoxically to answer the survey was

itself cyberloafing activity for the sample. To collection of the data, a convenience sampling technique was used. In

total, volunteer employees of 7 banks with 35 branches participated in this study resulting in a total sample size (N)

of 118 respondents. 200 email addresses were posted for the research and all employees were received an email

with explanation letter and survey attachment. Thus, 118 of the employees accepted to participate in this study while

18 of them were totally empty. Email addresses were gathered by researcher personal visiting to branch managers.

A pilot study was carried out in Turkey (Mersin city) with 34 sample size. After pilot study 3 questions

addressing virtual emotional function (shopping online, play gambling and date online) from cyberloafing scale has eliminated because of the managers’ feedback since those questions already include illegal behavior and participants

can’t answer or sincerely answer those 3 questions. Therefore the main survey performed with 9 questions and 3

dimensions (social, informational and leisure) to test of research hypotheses. Exploratory factor analysis (EFA) was

used to explore the dimensions of the cyberloafing items. Using 9 items, pre-analysis tests for the suitability of the

data for factor analysis were computed as recommended by Hair et al. (2007). The Kaiser–Meyer–Olkin (KMO)

measure of sampling adequacy was 0.91, and the Bartlett test of sphericity was significant at p < 0.001, indicating

suitability of the data for analyses for factor analyses following Hair et al. (2007), factor loadings should preferably

over 0.50, while cross-loadings should not exceed 0.30. All 3 dimensions with 9 items were used for the main

survey, according to the result. The other measures had good reliability, i.e., Cronbach’s alpha value was 0.87 for

innovative work behavior and, 0.84 for cyberloafing scale. A total of 118 employees’ turn back while 18 were

excluded because almost totally empty.

The demographic information indicated that the average age was between 30-39 years, 52% of the participant

was female (52 employees), all participants have university degree even 12% (12 employees) with post graduate

degree, 37% of the participants have 5-10 years tenure and 30% were managers (30 employees) while the rest of the

participants in non-managerial positions (70 employees). The data were collected both from governmental (n = 2)

and private sector branches (n = 98). It is unbalanced in this study, because of the privatization of the banking sector.

3.1. Instruments Cyberloafing Activities: To assess the cyberloafing activities, used the scale used by Akca (2013 originally by Doorn,

2011). The scale ranges from 1 = “never,” to 5 = “constantly.” Examples from the 9-item measure of cyberloafing

includes “learn new skills, develop myself, relax and acquire new abilities. Coefficient alpha was.84 for this current

research while alpha was 0,929 for the original scale. Respondents' sex was controlled for on the grounds that men

will probably take part in cyberloafing than women(Lim and Chen, 2009). Age was controlled since it has been

found that people in their late 20s to mid 30s will probably utilize the Internet (Reed, Doty, and May, 2005).

Innovative work Behavior: Innovative work behavior is measured by using the nine items from originally Janssen

(2000 with α = 0.95) and translated according to the scientific method by Mete (2007 to 0,935 alpha value). These

nine items measured the extent to which an employee engages in innovative work behaviors, with 1 = ‘never’ and 5 =‘always’ as anchors. These nine items yielded a coefficient alpha of 0.87 which is very close the original alpha

value of the scale. Data coding was done such that a higher score indicated a higher level of innovative work

behavior. Examples from 9 items include “Creating new ideas for difficult issues, searching out new work methods,

techniques or instrument.

4. Findings

According to Table 1 there is a positive correlation between Informational cyberloafing and social cyberloafing

function (r =.63, p <.05), and innovative work behavior (r =.60, p <.01) And there is negative .-14 correlation


between informational and leisure function whereas, social function is correlated with leisure positively with r =. 23,

and innovative work behavior with r =. 50, and leisure cyberloafing activities are negatively correlated with

innovative work behavior with r =-. 20.

Table 1 Correlations and Mean, SD, α Values

Scale Subscales M SD α 1 2 3 4

Informational 54.08 11.63 .92 --- .63* -.14* .60**

Social 28.08 5.45 .84 --- 23* .50*

Leisure 3.97 3.14 .54 --- *-.20

IWB 96.92 20.15 .91 -

*p<.05 , **p<.01, N=100

For the main research question stepwise regression was conducted to understand the role of which

informational, social and leisure activities on innovative work behavior. Step 1 indicates that informational function

(β =.44, p <.001) is the most positive predictor of innovative work behavior causing 38% variance in it, F (1) =

44.42, p <.001. Step 2 shows that social cyberloafing function is the second important predictor of innovative work

behavior and 42% variance is explained by the predictors, F (2) = 27.78, p <.001, indicating that addition of social

cyberloafing increased 4% of variance in innovative work behavior. Step 3 shows that the leisure cyberloafing

function is the least important predictor of innovative work behavior in this model and only 44% variance is

explained by the predictors, F (3) = 17.40, p <.001, showing that adding leisure function to model increased 2% of

variance in total innovative work behavior. As seen in Table 2 model results indicate that the informational function

(β =.20, p <.001) and social function (β =.13, p <.05) Have a significant positive effect, whereas leisure function (β

= -. 11, p <. 05) has a significant negative effect on innovation work behavior.

Table 2 Regression Analysis: Innovative Work Behavior and Informational, Social and Leisure Cyberloafing Function

Predictors ∆R²

β

Step 1

Informational

.38

.44***

Step 2

Informational

Social

.04

.29***

.24*

Step 3

Informational

Social

Leisure

.02

.20***

.13*

-.11*


Table 3 shows t-test of sex and organizational type (public and private sector) for cyberloafing and

innovative work behavior. The results are significant for sex in informational, t(94) = 1.04, p < .05, social, t(94) =

1.45, p < .05, and leisure, t(94) = 1.34, p < .05, indicating that women bank managers have more informational, less

social and lower leisure cyberloafing as compared to men in line with existed literature findings. Men and women

also significantly differ in innovative work behavior, t(94) = 1.11, p < .05, indicating men to score high as compared

to women. For public-private banks, the mean of group difference shows significant difference for informational,

t(94) = 1.00, p < .05, social, t(94) = 1.31, p < .05, and leisure, t(94) = 1.82, p < .05, indicating public sector bank

managers to show more informational and less social and less leisure as compared to private sector bank workers. The results were also significant for innovative work behavior, t(94) = 1.42, p < .05, which indicates private sector

bank workers to be higher on it as compared to public sector bank workers.

Table 3 Mean and t Values

Variables Women=52

M SD

Men=48

M SD

t

Private=98

M SD

Public=2

M SD

t

Informational 57.77 10.95 53.73 10.54 1.04* 56.07 10.76 56.13 10.37 1.00*

Social 27.81 5.46 29.94 5.31 1.45* 30.13 5.48 29.36 97.80 1.31*

Leisure 4.40 3.05 5.84 3.17 1.34* 5.73 3.36 4.83 3.09 1.82*

IWB 96.31 18.60 101.01 16.70 1.11* 100.31 17.52 97.80 15.27 1.42*

Degree of freedom = 96. *p < .05.

5. Conclusion

Definitely this study is not without limits, which aims to contribute a unique perspective for practical advice and

future research for academicians about the inevitable reality of the working life “cyberloafing”. The main limitation

concerns a potential generalization problem of every budget and time limited research that all analysis performed

with only 100 sample size despite 300 were mailed. Another limitation is data were based on self-report measures

that potential threat to the internal validity of this study’s findings and definitely it is a paradox that while answering

the survey, participants were cyberloafing again, according to definition.

Lack of between sector comparison is another crucial limitation, other sectors’ work settings might be somewhat

different from a bank setting because of working policies (Flynn, 2005; Henle & Blanchard, 2008). Malachowski

(2005) indicates that education, insurance, public sector, research and development sectors are more convenient for

time-wasting, whereas shipping and receiving, manufacturing, healthcare, finance and banking, marketing,

communication sectors are more time-conserving. And also unbalanced participation of the public sector employees another important limitation of the study. Informational and social cyberloafing are valid predictors of cyberloafing

at work in the banking sector, according to the findings. Due to pilot study result 3 questions addressing virtual

emotional function (shopping online, play gambling and date online) from scale has been eliminated because of the

managers’ feedback since those questions already include illegal actions against a job contract employee has signed.

Despite many limitations, the findings provide a contribution for future research in generating a more

complete understanding of the consequences and characteristics of cyberloafing without present and misleading

traditional counterproductive approach.

The amount of time employees spend on cyberloafing is also increasing everyday inevitably; current estimates range

from 3 hours per week to 2.5 hours daily at work (Blanchard & Helne, 2008; Greenfield & Davis, 2002; Mills, Hu,

Beldona, & Clay, 2001). So it would be appropriate to ask the question, if cyberloafing seems to happen under most

conditions so inevitably, how is it possible that any work done on daily organizational life with this cyberloafer


person? If cyberloafing is so prevalent, there should be more constructive and managerial motivation to increase

positive outcomes of cyberloafing rather than fruitless attempt to stop cyberloafing of employees. Thus, taking brief

breaks from a task has been identified as a best practice for improving the creativity in teams (Paulus & Brown,

2003; Paulus & Nakui, 2005). These positive and constructive approach by organizations, can facilitate to keep

cyberloafing under control with positive outcomes. Understanding the cyberloafing is a crucial and practical matter

for organizations since the use of the Internet has its dark side and inevitable in somehow.

Very few studies are identified in an extensive literature search, related positive outcomes of cyberloafing

in a work setting. The existed literature has paid attention to finding out what are the negative results of the

cyberloafing.Therefore, given the scarcity of studies on the positive outcomes of cyberloafing literature, this

research almost uniquely focuses on cyberloafing activities as predictors of IWB. In this study very new and

important predictor is added to IWB and cyberloafing literature. Performed analysis showed that informational and

social cyberloafing to have high internal consistency except for leisure cyberloafing with innovative work behavior.

Anandarajan and Simmers, (2005) Maslach and Leiter (1997), Belanger et all. (2002) and Oravec, (2002)

are other researchers that indicating possible outcomes of cyberloafing such as decreasing burnout, less stress and

anxiety level. There is also a significant sex difference in informational, social and leisure cyberloafing scores,

indicating that women bank managers have more informational, less social and less leisure cyberloafing as

compared to their men colleagues.

According to sex, employees are significantly changing in innovation scores, men have higher as compared

to women, in line with some researchers’ findings. Again, in parallel to existing literature, t public sectors bank

managers’ to have higher scores in informational and less social and less leisure as compared to the private sector.

Consistent results were found in this present study with Batt (2000) findings that under standardized procedures and

bureaucratic structures, employees will have less opportunity to engage in cyberloafing in comparison to settings

where employees more optional free behavior (Batt, 2000) such as in the private sector. Furthermore, findings

showed that innovative work behavior is higher in the private banking sector. Consistent with Khan and other

researchers (2012) result innovative work behaviors are more in the private settings, because innovative work

behavior is required for the organization to survive in the global market (Mukherjee & Ray, 2009).

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Study on the significance of economic planning for retirement

community

M. Baskaran1* & R. Chandrasekaran2

1Research Scholar, Bharathiar University, Coimbatore, Tamil Nadu, India 2Director, Dept. of Management Studies, Karpagam College of Engineering, Coimbatore, Tamil Nadu, India

* M: +918870553333, E-mail: [email protected]

Abstract

There is an inescapable need for management of personal finance to cater for living expenses of elders in order to have a decent

life style until the end of their silver years) Hence every individual need to be aware of as to how to make savings prior to

retirement or generate the savings with whatever funds that they have already got so that they can spend their rest of their life peacefully without having any uncertainty or fear. When such savings is possible and feasible, seniors at this stage will fee l the

sense of confidence amongst themselves in the society with significance without depending on others. Even timely food, rest and

relaxations are very much essential to seniors, generally at growing old age. Many researchers have done a lot of research in

relation to planning about retirement life. However, in this research we have discussed that the similar things in a different angle commencing from the base level.

KEYWORDS: Retirement, Plan vs. Planning, Government schemes, Individual plans and Care.

1. Introduction

Retirement is generally significant life events which many of individuals will ever experience in their life. Commencing from both a personal as well as financial perspective, comprehending a secure retirement is an

extremely wide procedure so as to take sensible planning with years of persistence. Once anyone attains retirement

age; it will be an ongoing process amidst their committed responsibilities that they have to plan for their post

retirement life in their silver years. Although all the individuals would like to retire comfortably, the complexity and

time required in building a successful retirement plan can create the entire process giving the impression nothing

short of daunting. Though, it can frequently be done by means of fewer headaches that individual may think of, all it

takes is small assignments, a realistic savings along with investment plan with a long-term commitment.

Retirement also tagged along with a tendency of expectations and their aspirations as they age. Although they

attain a particular age towards retirement, it does not mean that they individual must automatically retire. Post

retirement life can be catorigized as individual seeking independent living based on the essential living needs or the

lifestyle that they seek even though they prefer to retire at the early age as sufficient resources have been created to

meet the long term expenses of senior living. The precise age to retire can differ from individual to individual,

depending on their commitments, available resources and circumstances.

The actions individual take in the pre retirement stage starts or commences a decade before their retirement, are

critical towards getting the next phase of smooth post retirement plan and living. One need to analyse the following

aspects mentioned in Table 1 while taking a decision on the senior living.

Table 1. Decisive Factors for Senior Living

S.No Decisive factor

1 See if you are saving is adequate

2 Stagger your retirement benefit with that of your spouse’s


3 Do not automatically quit on stocks.

4 Do the math on your mortgage.

5 Make friends with the young’uns.

The procedure of determining retirement income goals as well as the actions in addition to decisions essential in

the direction of achieving those goals are of paramount importance. Retirement planning comprises recognizing

sources of income, estimating expenses, implementing a saving program as well as managing assets. Prospect cash

flows are estimated towards determining the retirement income goal determination is achieved.

There is a huge reward waiting in favour of individual in retirement, individual can at last go on those trips

constantly dreamed of, with no worry or concern running out of vacation days or else coming back towards plenty of

work in addition to an annoyed boss.

Research from many countries around the world shows not only that individuals display low levels of financial literacy but also that financial illiteracy can be linked to lack of financial planning and insufficient resources in

retirement (Lusardi and Mitchell, 2011a, 2014). Using data recently collected via a questionnaire especially

designed to be comparable to surveys administered in a number of other countries (Australia, France, Germany,

Italy, Japan, the Netherlands, New Zealand, Romania, Russia, Sweden, Switzerland, and the United States), this

paper aims to assess how Canadians fare in terms of financial literacy and retirement planning.

The Canadian case is important for many reasons. For decades, Canada has had some of the lowest levels of

poverty among seniors (see, e.g., OECD, 2011). Although old-age poverty seems to be changing according to recent

and forecasted trends (Fréchet, 2012) public retirement programs provide a high income replacement ratio, typically

from 60 percent to 90 percent or more, for workers with earnings below the median. For those individuals,

retirement planning may be relatively simple.

On the other hand, retirement planning can be particularly important Canadians earning above the median

income. Income floor programs (the so-called 1st pillar) in combination with compulsory public savings plans (the

2nd pillar) do not guarantee a sufficiently high replacement (Clavet et al., 2013). Indeed, these programs provide

retirement income capped at approximately CA$19,000 per year in 2014, meaning that replacement ratio decline to

well below 50 percent for those earning above the median. Hence, workers in these earnings brackets need to put aside additional savings (the so-called 3rd pillar) to ensure that their retirement income adequately replaces earnings,

for example through an employer-sponsored pension plan or tax-sheltered vehicles. In recent years, much of the

policy debate has evolved around the question of whether or not middle- and high -income Canadians are saving

enough for retirement. Other important trends are also taking place, including a shift from defined-benefit (DB) to

defined-contribution (DC) pension plans, though this has been more limited in Canada than elsewhere (Gougeon,

2009), and a decline in the coverage of private-sector employer-sponsored plans, which may have stabilized

(Milligan and Schirle, 2014).

Proposed reforms have followed two strands. The first strand has focused on expanding the 2nd pillar (the

contributory Canada Pension Plan and its sister Quebec Pension Plan; see for instance Wolfson, 2011 and 2013, and

Milligan and Schirle, 2014, for an overview), and sometimes the 1st and 3rd pillars (see, respectively, Townson,

2009, and Ambachtsheer, 2008, for examples). One argument often made is that Canadians have low levels of

financial literacy and thus expansion of relatively simple mandatory programs may be advantageous.

The second strand focuses on voluntary savings plans. One change to the 3rd pillar is currently being gradually

implemented at the federal level and in some provinces: pooled Retirement Pension Plans (PRPPs), which are being

legislated under various names in each province. PRPPs are individual accounts with “group investment options,” offered by privateprivate financial institutions. Accounts include additional features such as automatic enrollment

and default options, and the inclusion of these options can be linked to the notion that purely voluntary savings

programs are unlikely to be effective due, among other factors, to lack of financial knowledge.

Existing evidence revealed low levels of financial literacy in Canada (Task Force on Financial Literacy, 2010;

MacKay, 2011; Mullock and Turcotte, 2012; Lalime and Michaud, forthcoming). However, this evidence drew

mostly from the 2009 Canadian Financial Capability Survey, which did not use questions comparable to those used


in other countries. Comparisons can be useful as they highlight similarities and differences across countries. They

can also draw attention to important features of the data, for example the groups that consistently display the lowest

levels of financial literacy, irrespective of institutional setting, and the effects of financial illiteracy.

2. Facts and needs of retirement

Individual’s retirement desires are different. Towards working out how much human being need and think in

relation to how long determination have in retirement, what sort of lifestyle individual will want as well as where

individual will live. One of the prime reasons that people engage a financial planner is to recognize while they can

retire. Now the thought of retirement can cause anxiety, lot of feel overwhelmed as well as unprepared. In reality,

one of the main dilemmas intended for those approaching retirement is balancing the life they desire to live today by

means of the life they want to live in retirement. There are a few familiar, yet avoidable mistakes so as to prevent a

lot of people commencing from retiring on time. However by means of proper planning, individual can steer clear

of mistakes encountered or foreseen so as to have the retirement as planned.

Paying off individual mortgage prior to individual retirement is subsequently the main concern. However

creating certain so as to it is not individual merely retirement plan. The interest person pay on mortgage is advanced

than a few after-tax return individual might earn on individual savings as well as with the intention of return is

guaranteed. With the aim of something a small number of investments can put forward. However there are risks in

leaving serious retirement saving in anticipation of individual got rid of individual mortgage. Individual might finish

up comprise a mortgage meant for longer than anticipate, owing towards changing in circumstances such as ill health or else loss of work so as to decrease ability towards making repayments or a life shock similar to separation

could upset plans. Generally overlooked areas of retirement planning are estimating health care costs might be in

retirement as well as including this in the calculation of income desires. Frequently, individuals assume

determination cover these expenses in retirement. However, this simply is not true. It costs towards retirees are

rising every year so it is important to expect. The research line related headed for costs comprises the following five

lists. The entire research lines as well as the topics therein are shown in Figure 1.

Figure 1: Needs of Health Care


Individuals are living longer currently. On average, 65-year-old men be able to live until they're 86 and 65-year-

old women until 88. In the future, people certainly live even longer. Men reaching 65 in 2031 can expect to live until

88 and women until they are at least 90. Assure that individual plan to retire at 65. Seniors need to save or else

having alternative plan (Figure 2) towards generating income meant for 20 years or more in order to meet the

expenses of any medical emergencies.

Figure 2: Investment Plans for Retirement

Anyone who cared for an aging parent knows the toll it can take on their loved ones with their savings and the

time as well as money needed towards providing quality care. Children were willing to contribute for a decent living

for their parents, since this gave them a feeling of comfort and reduced their guilt of not being able to take care of

them in their advancing age. Please remember, India has changed, but when it comes to parents-children relationship,

we should be proud that our children do care for us and the meaning of family has not been lost to the levels that we

see in the Western societies.

But unlike the Western World, where the State does take care of senior citizens, in India, the seniors have to

plan for their Silver Years. The Middle Class has paid taxes throughout their lives, but never got anything in return

from the Government. In the Western Countries, everyone paid taxes but the State takes care of them especially when they became old and are required to be taken care of. In India, we got nothing. Only for the poor and the

destitute, there are Old Age Homes, mostly run by Charitable Institutions. The Middle Class had to save money for

the old age and had to fulfill all family obligations. Pension was restricted to a select few only. Going back to the

Preparing

for

retirement

Credit money into an

Individual

Retirement Account

Enquire employer

towards starting a plan

Do not touch retirement

savings

Consider essential

investment principles

Be acquainted by means

of individual retirement

needs

Contribute towards

employer’s retirement

savings plan

Commence saving, keep

saving along with

sticking to the goals

Gain knowledge in

relation to employer's

pension plan


basics, being debt free happens when individual spend less than earn and are committed to live that way. In order to

stay debt free, individual need to plan for the long-term and make permanent lifestyle changes.

3. Budget concerning individual expenses

Successful individuals as well as corporate live by means of budgets. To create personal budget, one has to

consider the current expenses, the long-term plan as well as generating the emergency fund. Budget will also take

into consideration of sundry expenditures that individual can spend which is unforeseen or casual expenditure of

momentary nature. One has to be honest concerning the expenses as well as goals while developing the budget to

meet these needs which can be followed for years by them. This will facilitate them leading a lifestyle without any

debt and stress thereupon. There are cases where few have failed since they lost sight of the plan as they do not have

the passion and discipline to follow it through.

Major expences in retirement

The figure 3 explains how huge the expenses are while planning for the retirement in India. It is quite obvious

to see that the major chunk of finances will be spent on housing.

Figure 3: Proportions of Major Expenses

Major Expenses Percentage

Housing 46.89%

Food and Beverages 15%

Transportation 13.82%

Medical care 12.10%

Table 2: Source of Money

RETIREMENT PLANNING: SOURCE OF MONEY

Employment

Income

As individual progress through working life, annual employment income will probably be the largest source of incoming funds

that individual receives as well as the largest component of contributions to individual retirement fund. The maximum amount

of employment income can contribute to retirement fund each year.

Social

Security

Gone are the days where the elders in their silver years were made to live with what has been given to them or destined to get

what has been thrusted on them in terms of living and care and their essential needs. With the advent of nuclear family, the

concept the expectations of elders at present are well defined and the aspirations are to get the desired life style and their needs

to fund the living expenses when retired and the reduced size of nest egg. Planning to live in a retirement community will

ensure their social security benefits are achieved with proper retirement planning.

4. Retrain thinking and spending

Annual income twenty pounds, annual expenditure nineteen six, result happiness. Annual income twenty

pounds, annual expenditure twenty pound ought and six, result misery.” Charles Dickens, David Copperfield


Debt free living is an effortless concept which can be said easier than done. Lot of individuals spent most of

their life time learning towards living in debt. The determination takes time, commitment, skill towards retraining

thinking, spending as well as get back to living this way. Living debt free requires change, with change is a process.

Plan along with planning of retirement community is an extremely essential in the learning stage itself. However,

everything has changed now with education and awareness amongst the people. In childhood days, parents take care

of their children while when they grow as youngsters they are earning sufficiently towards spending for the comfort

of their parents. As they age the young generation not able to take care of them continuously for various reasons beyond their control. Hence, the need to plan for their retirement life should be like any other planning for education,

home, vehicle, health.

Everyone concerned need to involve themselves broadly linking the behavioural aspects covering personal

responsibility, financial awareness, financial capability or understanding, retirement planning, financial preparing,

income replacement and all these are for the long time for a peaceful retirement life. These considerations are not

only for the seniors retirement life but also for everyone to plan their normal life for living and thereafter for their

retirement life.

Saving meant for retirement is a function so as to be often put on hold by means of those who feel they have

enough time to start planning as well as save later. Whereas it is certainly not too soon to start saving for retirement

for any age group, those who fall within the age range of 55-64 are more aware of its significance, as retirement is

imminent. As such, age 55 to 64 is a critical period to get a realistic assessment of how financially prepared people

are for retirement.

Table 3: Finacial Assessment

Assess Whether Individual

Financially Ready for

Retirement

Assessing individual financial readiness will assist individual to determine whether they have a projected shortfall as well as whether they need to modify their retirement strategies, goals along with objectives.

Individual need towards including the balances of all of the accounts, the income tax rate, the average rate

of return on the savings as well as information about his or her current income.

Re-Assess Your Portfolio

With the possibility of receiving large returns on individual investment, the stock market can be attractive,

especially if individual are starting late. Along with the possibility of a high return comes the possibility of

losing most of individual initial investment. As such, the closer to retirement, the more conservative want to

be with individual investments since there is less time to recuperate losses. Having said that the retirement

savings on track can provide great satisfaction, it is significant to continue on that path and increase

individual savings where individual can. Saving more than individual is projected to need, that will assist to

cover any unexpected expenses.

Appropriate implementation of those key components is necessary in guaranteeing an economically secure

retirement. This engages looks at every possible source of retirement income. The developed world's populations are continuing to age, by means of fewer and fewer working age people remaining towards contributing to social

security systems. Greater burdens are being placed on the system. People live longer than ever before due to

advancement in health care and their life style. This leads to putting strain on the system as well as could leave

governments with no other viable option but to reduce social security benefits or suspend them altogether, however

poor they are. In accumulation, many employers who used to offer defined benefit plans are now shifting to define

contribution plans due to the increased liability as well as expenses that are associated with it, thus increasing the

uncertainty of a financially secured retirement for many.

5. Financial Investment

Financial investments refer towards putting aside a fixed amount of money as well as expecting a few kind of

gain out of it within a predetermined time frame. An individual can invest in some of the following before he moves

into retirement:

▪ Mutual Funds: Investment programmes funded by means of shareholders so as to trade in expand holdings

as well as are efficiently managed.


▪ Fixed Deposits: A fixed deposit is a financial instrument make available by means of banks which provides

investors through a higher rate of interest than a regular savings account, in anticipation of the specified

maturity date.

▪ Bonds: In finance, a bond is an instrument of indebtedness of the bond issuer to the holders. It is a debt

security, under which the issuer owes the holders a debt and depending on the terms of the bond, is obliged to

pay them interest and or to repay the principal at a later date, termed the maturity date.

▪ Stock: The capital rose by means of a company or else corporation throughout the issue along with

subscription of shares. ▪ Equities: The value of the shares issued by means of a company.

▪ Real Estate: Property consisting of land or else buildings.

▪ Gold Investment: The Table 4 and Figure.4 illustrates the growth rate of Gold from 1925 to 2015

Table 4: Year and Gold Rate

Year 10 Grams Gold Year 10 Grams Gold

1925

1930

1935

1940

1945

1950

1955

1960

1965

1970

18.8

18.1

30.8

36

62

99.2

79,2

112

71.8

185

1975

1980

1985

1990

1995

2000

2005

2010

2015

540

1330

2130

3200

4680

4000

7000

18500

24599

Figure 4: Growth of gold rate

6. Retirement planning

Any individual can dream of moving towards a new location on retirement. While retirees are no longer tied

towards the job, they can finally choose their retirement destination based on various factors like a warmer climate,

pursue hobbies etc. and to encompass quality health care facilities in case they need them. Selecting a place to retire

requires a great deal of thought as well as planning. Moving to a lower cost locale than where people live now can

give nest egg a much needed boost. Our ‘Best Places’ to retire lists can assist individual find an idyllic locale on the water, tucked away in the mountains or else deep in country/outskirts. Individual have also tracked down towns so

as to be especially green, educated as well as historical. If there were one perfect spot to match the needs of each


retiree, deciding where to settle would be simple. Regardless of individual ideal or else deal breakers, there a few

key things to look for while deciding where to live in retirement. A generation ago, the primary concern meant for

retirees seeking a new location was climate. Nowadays, financial considerations weigh much additional heavily.

Low cost of living and housing costs are significant to most of individuals.

The area should be growing as well as have qualities that attract newcomers, like natural endowments such

recreational land, visible history such as landmark buildings, historic monuments and a vibrant economy where

people can find work. It should also have a low crime rate, be relatively close to good retail shopping as well as a major media market. Individual might also think why towards move away from civilization; however individual can

easily begin to feel isolated. Mainly and significantly for seniors, a full-service medical facility should be within

reasonable driving distance. Taxes are another deciding factor for most people. Currently, there are few

countries/few states which do not hold personal income taxes. Choosing an area by means of a smaller tax break

however a lower cost of living or lower property taxes might put people ahead of the game taking a balanced focus

on life planning over tax planning.

Prior to making any decision, pre-retirees should first determine whether a move is necessary. Earlier to making

any decisions about where you want to live, it helps to do some research. Here is where to start Table 5 represents to

select the best place,

Table 5: Selection of Best Place

Population o Identifying likeminded groups/people

o Particular geographical area

Economy

o Area of the production

o Distribution or trade

o Consumption of goods

o Services by different agents in a given geographical location

Climate o Weather conditions prevailing in an area

o General or over a long period

Cost of Living o Maintaining a certain standard of living

Crime Rates o Number of offenses

7. Socio demographic profile

This research puts forth the socio-democratic and economic profile of the oldest old, along with insights on their

dependency for various requirements like daily routine and health care, among others. It also presents findings

pertaining to the welfare schemes and support systems available to them at the community level. In 2015, a socio

demographic profile has been carried out a survey in 8 cities of India, covering 833 respondents, all from the oldest

old i.e. 80 + years in age. The cities covered were Delhi, Mumbai, Hyderabad, Chennai, Patna, Kolkata, Bhopal and

Ahmadabad.

Table 6: Socio Demographic Profile

Age

Group

(Years)

DEL

MUM

HYD

CHN

PTN

KOL

BPL

AHD

80-84 73.3 84.2 72.3 72 66 75.5 82.4 77.2

85-90 18.3 12.9 27.7 23 27 22.5 13 22.8

Above 90 8.3 3 0 5 7 2 4.6 0


Figure 6: Socio Demographic Profile

Is your Site Suitable for a Senior Living Facility? What Factors are Important?

Senior living projects are specialized projects and therefore have unique location requirements which can make

a difference between and average and a successful project. Most Indian cities have options to locate a senior living

project in its in growth corridors, however, factors such as availability of healthcare, social eco system, connectivity

besides the aesthetics of the site ecosystem continue to play a major role in selection of the project by senior

residents.

Table 7: Location Decision Influencing Factors

HEALTHCARE ACCESSIBILITY CRIME RATE

Spread, quality of and access to healthcare facilities from various

locations within each corridor. Typically the site should be within 20-

30 minutes from a good secondary and tertiary care hospital.

Incidences of crime or the perceived sense of security of lack thereof

in different pockets of the city. Sometimes a suburban undeveloped

area can be perceived as risky from a crime perspective in-spite of site

level security.

SOCIAL ECOSYSTEM AESTHETIC ECOSYSTEM

Presence of social amenities such as temples, clubs, retail mall,

entertainment and other recreational facilities in the nearby catchment.

Presence of well –maintained public parks, roads, water bodies, control

of density, general cleanliness etc., found within locations in each

corridor.

EDUCATION ECO SYSTEM CONNECTIVITY

Spread, quality of and access to educational facilities play a role in

selection of a project. In many cases, presence of such institutions in

micro catchment offers great advantage.

Connectivity to major city modes, retail and entertainment activity

hubs and work places. Considers both existing and proposed

infrastructure initiatives within the city to ensure ease of commute.

GROWTH PERSPECTIVE LAND VALUE

Expected growth in items of civic amenities and infrastructure in a

particular corridor in order to take advantage of capital appreciation.

Lower land value (to ensure affordability) for locations within the

corridors can be a strong attraction.

CONGESTION INDEX EMPLOYMENT DESTINATION

Lower traffic congestion, lower density of population and lower

presence of polluting industries etc., are preferred by senior citizens for

selection of a senior housing project.

Access of employment hubs and facilities play a strong role since

seniors especially in the independent living stage want to stay

employed even if it is part-time or consultative employment.

A suitable location for setting up a CCRC in one which scores high on the positive attributes such as healthcare

accessibility, social ecosystem and connectivity; and low on negative attributes such as lan value, congestion and crime index. Healthcare accessibility, social ecosystem and connectivity are important considerations for seniors and

hold higher weight age in the selection criteria. The good thing about senior living facilities is that it is possible to

move out of the city into more affordable zones. However, the developer has to be cautions that the project does not


go too much off the social and economic connect of the city in which case the project would face difficulties from an

occupancy perspective.

Senior Living – What is the Demand for Senior Living in India?

Demand for senior living comes from a variety of customer segments with varying needs and wants. However,

primarily the need for better healthcare in old age, secure surrounding and a social support system designed to take

care of the senior are prime drivers for demand for such assets. The four primary types of customers as per our

research are:

Table 8: Types of Senior Living Occupants

TYPE 1 TYPE 2 TYPE 3 TYPE 4

Aspirational well heeled empty

nester couple wanting a better

quality life

Aging retiree facing early or

advanced signs of constant

healthcare needs

Non Resident coming back from

outside India or from other state

Short term stay seniors wanting

to stay for 3-6 months a year

• Offers suburban lifestyle

• Couple would find the concept

of campus living appealing

• Values being part of peer

group of like-minded people /

similar social strata

• Willing to pay premium for

good project design and proper

brand

• Seniors staying alone who like

the campus like social

environment

• Appreciates long term

healthcare requirements

• 6% of seniors in India have some

form of dementia

• Family not able to take good care

of senior in their limited

resources

• Brings relief to second generation

from care giving and still

allows connect on a 24/7 basis

• Values professional care

environment which is required

at this stage

• Highly relevant where support

system is absent

• Requirements are similar to

well-heeled empty nester

couples

• Large customer segment in

Middle East, North America,

Europe and Australia

• Focused reach through NRI

regional groups

• Both – (a) seniors staying

abroad wanting to come back

as well as (b) children staying

abroad; with parents here will

fuel demand for projects

• Travelling NRI’s coming to

India on short stays due to

weather, visits, functions or

religious requirements.

• Possible to also attract

foreigners to come and stay in

such projects owing to cost

advantage offered vis-à-vis

similar facilities in the

developed nations.

• Health and wellness stay

• Rehabilitation & recuperation

stay

8. Conclusion

As a result of an increasingly aging population, governments may be forced to suspend social security benefits

in the future. However, individuals need to take care about, how much money needs to save for retirement will

depend on desired standard of living, individual expenses and target retirement age. Based on family strength,

situation and health planning also will be differing. We hope this research article will help to analyse about needs of

retirement planning and way of plan based on banking sector.

Retirement planning is strongly associated with financial literacy. This result has been found in many countries

and the estimates in Canada are similar to those of other countries. This is relevant in the Canadian context because

of the relatively low level of financial literacy, even among the more fortunate Canadians (i.e., those with higher education and income), who may need to rely more and more on voluntary savings programs to fund their

accustomed level of consumption in retirement.

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