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ISSN : 2249-8826

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RAF

ZENITH International Journal of Business Economics & Management Research

November 2011

-

Volume : 1

-

Issue : 2

A Research Publication of

Vision : Sharing Research for Better World

ZENITH: INTERNATIONAL JOURNAL OF BUSINESS ECONOMICS & MANAGEMENT RESEARCH ISSN : 2249-8826

A Monthly Journal Internationally indexed and listed at: Open J-gate, India ; Ulrich's Periodicals Directory, U.S.A., EZB, Germany, E-ISRJC, Philippines

PATRON

EDITORS

PROF.(DR) SATISH KUMAR

DR HIRA LAL SHARMA

DR BIMAL ANJUM

Director, Vidya School of Business Vidya Knowledge Park Meerut, U.P.(INDIA)

Head, Dept.of Commerce & Management Bhagwan Parsuram College Kurukshetra, Haryana

Professor & Head RIMT-IET, Mandi Gobindgarh, Punjab

EDITORIAL BOARD

ASSOCIATE EDITORS

DR. S.C BHATNAGAR

DR. MOHINDER CHAND

Associate Professor/Reader Department of Commerce & B. Admin. J V Jain College, Saharnpur, U.P (INDIA)

Associate Professor Department of Tourism & Hotel Management Kurukshetra University Kurukshetra Haryana (INDIA)

DR. SANKET VIJ Dean & Chairperson Faculty of Commerce & Management B. P. S. Mahila Vishwavidyalaya, Khanpur Kalan, Sonepat, Haryana

DR. VIVEK CHAWLA Associate Professor Department of Commerce University College, Kurukshetra University Kurukshetra Haryana

(Dr) ROSHAN LAL Professor M.M.Institute of Management MM University, Mullana-Ambala, Haryana PROF. (DR) ATUL DHINGRA Professor and Head Department of Business Management Hisar Agricultural University, Hisar, Haryana

DR. JATINDER KUMAR R. SAINI Associate Professor & Head, Department of Computer Science (MCA), S.P.College of Engineering, Visnagar, Mehsana, Gujarat

T.SUDHAKAR PAUL

PROF.(DR) AZIM ANSARI

Senior Lecturer Department of Management Studies MVJ College of Engineering, Banglore

Head Department of Commerce & Business Administration Jamia Millia Islamia, Central University, New Delhi

DR. VIKAS CHOUDHARY

Dr RAMESH KUMAR MIRYALA Professor Swami Ramananda Tirtha Institute of Science & Technology Nalgonda, AP(INDIA)

DR. MANDEEP KAUR

DR. BABLI DHIMAN

Reader Department of Commerce & Management Guru Nanak Dev University, Amritsar

Assistant Professor Finance Lovely Honours School of Business Lovely Professional University, Phagwara, Punjab

DR DEEPAK TANDON Professor Lal Bahadur Shastri Institute of Management (LBSIM) DWARKA, New Delhi

DR. TAPAL DULABABU Professor & Principal, The Oxford College of Business Management, HSR Layout, Bangalore

PROF. U. C. JHA Professor & Head - R & D Kanpur Institute of Technology, Kanpur

Assistant Professor Deptt. of Humanities & Social Sciences NIT, Kurukshetra, Haryana (INDIA)

A KOTISHWAR Associate Professor & HOD Department of Master of Business Management CMR College of Engineering and Technology, Hyderabad

DR. NEERAJ KAUSHIK Associate Professor (Management Studies) The Technological Institute of Textile & Sciences Birla Colony, Bhiwani-127021, Haryana

SOUJI GOPALAKRISHNA PILLAI

ANTHEA WASHINGTON Senior Lecturer Caledonian College of Engineering, Muscat

DR BRANKO DIMESKI Assistant Professor Dept. of Admin. & Mgt. Inf. Systems St.Kliment Ohridski University Republic of Macedonia

Deputy Director, Centre for R&D Berjaya University College of Hospitality Kuala Lumpur, MALAYSIA

MOHAMMAD REZA NORUZI Faculty of Economics and Mgt. Tarbiat Modarres University, Tehran, Iran

SUDHANSHU D JOSHI

DR. K.S.CHANDRASEKAR Prof. & Head - Inst. of Mgt. in Kerala Chairman - Board of Studies in Business Mgt. University of Kerala Thiruvananthapuram 695034 Kerala (INDIA)

Associate Professor Applied Finance & Inf. System Mgt. School of Management Doon University,Dehradun, Uttaranchal (INDIA)

Contact us :

ZENITH INTERNATIONAL RESEARCH & ACADEMIC FOUNDATION (ZIRAF) Near Vivekanand School, HUDA, Jagadhri - 135 003 (Haryana) INDIA e-mails: [email protected] • [email protected] • [email protected] web-site: www.zenithresearch.org.in

ZENITH International Journal of Business Economics & Management Research Vol.1 Issue 2, Nov 2011, ISSN 2249 8826 Online available at http://zenithresearch.org.in/

ZENITH INTERNATIONAL JOURNAL OF BUSINESS ECONOMICS & MANAGEMENT RESEARCH (ZIJBEMR) VOL.1 - ISSUE 2; NOVEMBER 2011; ISSN 2249 8826

1.

CONTENTS

PAGE NO.

IMPACT OF TRANSFORMATIONAL AND TRANSACTIONAL LEADERSHIP ON EMPLOYEE JOB PERFORMANCE AND 1-19 JOB SATISFACTION IN UAE BANKING SECTOR

2.

ANURADHA REDDY ROLE OF CO-OPERATIVE BANKS IN AGRICULTURE CREDIT: ORGANIZATION, GROWTH AND CHALLENGES

3.

RAJESH BHARDWAJ, PRIYANKA, REKHA RAHEJA BUSINESS OPPORTUNITIES FOR INDIA IN ECONOMIES

4.

5.

6.

7.

8.

20-30

AGEING 31-39

HITESH I. BHATIA TRAINING IN WRITING STRATEGIES TO ENCHANCE TECHNICAL WRITING SKILLS OF OUTGOING B.TECH 40-56 STUDENTS - A CASE STUDY DR. MADHAVI JANAGANI SELF HELP GROUP- (SHG) BANK LINKAGE SYSTEM IN MICROFINANCE

57-65

DR. SADYOJATHAPPA. S IMPACT OF SERVICE QUALITY, CUSTOMER SATISFACTION AND TRUST ON CUSTOMER LOYALTY: A STUDY WITH SPECIAL REFERENCE TO TELECOMMUNICATION COMPANY IN MADHYA PRADESH 66-78 (INDIA) SATENDRA THAKUR, DR. A. P SINGH AN INVESTIGATION OF THE IMPACT OF MARKET RECESSION AND ECONOMIC RECOVERY ON SALES FORCE MOTIVATION STRATEGY IN SPECIFIC INDIAN 79-96 COMPANIES RAKHI BHATTACHARJEE, DR. ASHOK KUMAR TIWARI ESTIMATING SURVIVAL PROBABILITIES FOR ENDOWMENT POLICYHOLDERS OF LIFE INSURANCE 97-125 CORPORATION (LIC) OF INDIA MS. RACHANA K RAVAL

www.zenithresearch.org.in

SR. NO.


9.

UNDERSTANDING THE POTENTIAL OF MARKETING IN INDIA - AN ANALYTICAL STUDY

10.

MD RAFIUDDIN, DR. BADIUDDIN AHMED WOMEN ENTREPRENEURS IN AGRICULTURAL SECTOR

12.

13.

14.

15.

126-139 INDIAN 140-144

DR. ASHISH MATHUR A BRIEF STUDY OF THE SWOT, GOVERNMENT ROLE AND CONTRIBUTION IN THE DEVELOPMENT OF THE MSME’S 145-174 OF THE HARYANA REGION ANISHA SAHAPATHI, DR. PARUL KHANNA AN EMPERICAL INVESTIGATION ON THE INVESTORS’ PERCEPTION TOWARDS COMMODITIES FUTURES TRADING IN INDIA WITH SPECIAL REFERENCE TO 175-189 PUDUCHERRY, INDIA DR. R. T. NIRMAL KUMAR, MR. BALAJI.K TEAM WORK-NEED OF THE HOUR 190-196 CHANDANA JOHN A STUDY ON EDUCATIONAL STATUS CHILDREN IN THE NILGRIS DISTRICT

OF

TRIBAL 197-210

DR. V. RAJAM, MS. MALARVIZHI. V RISK MANAGEMENT: THE RELEVANCE OF MARKOWITZ THEORY IN PORTFOLIO MANAGEMENT 211-225 K. BHAVANA RAJ, DR. S. SUMAN BABU

DR.

SINDHU,

DR. M.

JAYASREE,


11.

THE

RURAL


IMPACT OF TRANSFORMATIONAL AND TRANSACTIONAL LEADERSHIP ON EMPLOYEE JOB PERFORMANCE AND JOB SATISFACTION IN UAE BANKING SECTOR ANURADHA REDDY* *Research Scholar, Kakatiya University, Freelance Report Writer, Ex. Assistant Professor Emirates College of Management and Information Technology, ECMIT, Dubai.

ABSTRACT

KEYWORDS: Job performance, job satisfaction, transformational leadership, transactional leadership. ______________________________________________________________________________

1

This research aims to identify the impact of transformational and transactional leadership styles on employee job performance and job satisfaction through focusing on management styles in three different banks by collecting opinions of the bank employees. Objectives include (i) study the difference between transactional and transformational leadership (ii) identify and evaluate the impact of leadership on employee job performance (iii) identify and evaluate the impact of leadership on employee job satisfaction and finally (iv) put forward few recommendations in relation to the evaluation of results and analysis. A Multifactor Leadership questionnaire (MLQ) questionnaire was designed for the survey that included a total of 28 questions, of which 20 questions were based on transformational leadership style and the rest 8 questions on transactional leadership style. Survey was conducted in three banks in Al Ain, UAE which included 54 participants. Results of the questionnaire were analyzed in percentages. The survey results indicated that though transactional method of leadership still persists in minor form but overall the management should take into consideration transformational leadership. There is no doubt that being able to inspire people, stimulate them to think differently and pay attention to their needs are great ways for a leader to behave. It is emphasized that if a leader has good content and integrity and can present a case for change with enough enthusiasm to inspire people there can be better communication. Being inspirational is most useful in situations where there is no evidence or the facts are unclear. This is especially true with clashes of values or standards of behavior. The truth is, however, that different influencing styles work better with different audiences.


Past three to four decades leadership concept has become increasingly complex and highly structured. Leader is one who can motivate people thus ensuring that the set goals and targets are achieved. Different persons (leaders) may approach different ways, methods and means of achieving the same. Leadership is not merely a display of characteristics. It is a continuous journey – a journey of moving from one place to another place, one level to another level. Every leader needs followers - followers who are committed, dedicated and willing. Even when the leader returns to the same point, there is a different level of maturity, understanding and thinking.


INTRODUCTION TRANSACTIONAL AND TRANSFORMATIONAL LEADERSHIP

2

A transactional leader “pursues a cost benefit, economic exchange to met subordinates current material and psychic needs in return for “contracted” services rendered by the subordinate” Bass (1985). Transactional leaders encourage consistent performance from followers that allows them to meet agreed-upon goals. They make the leader-follower relationship an economic exchange transaction by using rewards and punishments to promote performance. Unlike transactional leadership, transformational leadership tends to be associated with a more enduring leader-follower relationship. It is based on trust and communication and concentrates on organizational change through emphases on new values and alternative visions of future. Transactional leaders manage organizations by satisfying follower’s self-interest, transformational leaders inspire and stimulate followers to set aside those interests to some degree and replacing them with collective or team purpose. Transactional leadership is not sufficient to develop the trust and full potential of organizations’ members. In current organizational contexts, there is a need for leadership that goes beyond the simple transactional approach to styles characterized by inspiration, stimulation, motivation and charisma for heightened levels of interdependence and integration. A transformational leader has the capacity to become a role model for their followers. Also they are respected, admired and followed by them. They have a separate place in the hearts of followers. Transformational leader trusts the followers and the followers trust the leader. All this happens because the followers fully understand and accept that the leader has a great potential required and has the determination so that they would be taken to higher levels. The leader should be willing to take calculated risks,


Transactional leadership and transformational leadership are seemed to be “distinct dimensions rather than opposite ends of continuum” (Doherty and Danylchuk, 1996). These two terms are also described by Yukl (1989) and Weese (1994) as closely related parts of leadership styles, they remain distinct. The relationship between leaders and follower in terms of two dimensions, developmental orientation and individual orientation describes individual consideration. A transformational leader is one who “recognizes and exploits an existing need or demand of a potential follower … (and) looks for potential motives in followers, seeks to satisfy higher needs, and engages the full person of the follower”, and “the transactional leaders work within the organizational culture as it exists; the transformational leader changes the organizational culture.”-- Burns (1978). The basic ideas of leadership theory state that transformational leadership is a more humane leadership theory, as compared to the militaristic transactional theory. It believes in inspiring employees to do great work through example and force of a leader's personality. This theory believes that people rise higher through positive motivation, than negative motivation (Manz and Sims Jr., 1987). According to Bass (1985), transformational leadership is a leadership perspective that explains how leaders change teams or organizations by creating, communicating and modeling a vision for the organization or work unit and inspiring employees to strive for that vision. Transformational leadership creates a sensible vision with appealing picture of the future. The strategy under the leadership style leads to logic how his vision can be achieved. Under the plan specific steps, timetables and plans are to be executed to implement the strategy. Further transformational leadership are common and are as follows: “Management is doing things right, leadership is doing the right things”.


but be consistent. They should always show high standards of ethics and good conduct (Hellriegel and Slocum, 2007).

LEADERSHIP – EMPLOYEE JOB PERFORMANCE Job performance most commonly refers to a person’s performance of his job in the workplace (Gomez-Mejia, Balkin, Cardy, 2007). Performance is an extremely important criterion that relates to organizational outcomes and success. The most accepted theories of job performance

3

According to Bass (2000) a leader’s behavior or leadership style may influence the subordinate level of job satisfaction. Many studies concluded that effective leadership associated with better and more ethical performance can help attain a good level of job satisfaction. Focusing on employee job satisfaction it is observed that job satisfaction can be an important indicator on how employee feels about their jobs and it is also considered as predictor of work behaviors. Job satisfaction is an important attribute, which is frequently measured by most of the organizations. Job satisfaction is also considered as an attitude (Gomez-Mejia, Balkin, Cardy, 2007). Employees form attitudes towards their jobs by taking into account their feelings, their beliefs, and their behaviors (Fernandes and Awamleh, 2004). Bass (1985) offered a more methodically detailed theory of transformational leadership that further differentiated transformational from transactional leadership. Transformational leadership is viewed from the perspective of leaders’ influence on subordinates. Subordinates become motivated to surpass original expectations by the influence of transformational leaders. According to a study conducted by Fernandes and Awamleh, (2004), job satisfaction can be influenced by a range of factors for instance quality of the physical environment in which they work degree of the fulfillment in the work, and quality of employee’s relationship with their superiors. The implicit assumption of many studies of job satisfaction is, “the satisfied worker is the productive worker”, but later studies testified that there is no connection between productivity and satisfaction. It is important for an organization to have satisfied workers, as training new employees and lost time can cost lots of money to the company both directly in terms of poor quality of production and lost business. To measure the success of management policies and practices, employee satisfaction can be considered as one of the criteria, and this is also a component used to measure job satisfaction. The measure of job satisfaction should be capable of being used over a wide range of job classifications and with people of varying job levels. A measure of job satisfaction may be sufficient for some purposes. Company characteristics, individual, and relationship between different aspects of the job situation may also play a vital role in measuring job satisfaction (Gomez-Mejia, Balkin, Cardy, 2007). Job satisfaction has been shown to be positively related with high subordinate’s performance. Low job turnover with low absenteeism and high productivity, athletic directors who are transformational will make significant difference in terms of the organizations performance and effectiveness. It is seen that a company, which promotes a new product, they offer their sales representatives constant prizes on a single product to encourage the sales for the company. It provides extra pay for selling most number of same products. Hence sales representative shows more interest on selling the new product, which is one of the schemes of sales promotion. In this context the management promotes motivation towards employee (Bass, 2000; Shin & Zhou, 2003).


LEADERSHIP – EMPLOYEE JOB SATISFACTION


from Campbell (1990) describes that it is an individual level variable. Performance can also be defined as individual behavior. Performance is divided up in terms of task and contextual (citizenship and counterproductive) behaviors. Citizenship behavior can be defined as the behavior which contributes to the goal of an organization through their effect on social and psychological conditions. Counterproductive behaviors are intentional actions by employees which circumvent the aims of the organization (Bass and Avolio, 1990). Campbell (1990) also mentioned several parameters for performance that should be investigated by industrial and organizational psychologists, which have important implications for the job performance setting. Two parameters are distinction between speed and accuracy and distinction between typical and maximum performance. Distinction between speed and accuracy – This is similar to the one between quantity and quality. The important questions considered include: which is most valued by the organization, maximized speed, maximized accuracy, or some balance between the two? What kind of tradeoffs should an employee makes? Distinction between typical and maximum performance – A study on supermarket cashiers found that there was a substantial difference between scores reflecting their typical performance and scores reflecting their maximum performance. Typical performance can be considered as regular work situations reflecting varying levels of motivation. Maximum performance can be considered as special circumstances generating maximum employee motivation (Campbell, 1990). Employee performance is also influenced by leadership which controls them (Avolio, Waldman, & Einstein, 1988; Waldman, Bass, Yammarino, 1989). There are two main leaderships that influence the employee performance in the organization. They are transactional and transformational. They differ in their assumptions about the core underlying bases for motivation to work. Depending upon their belief patterns, cultural values, and parental upbringing, employees can be broadly classified into two categories; one who are essentially interested in material gains and other although not averse to material gains, give more importance to spiritual development and value satisfaction (Campbell, 1990). Thus this indicates that leadership styles within the organization influences the employee job performance.

4

Banking sector in UAE is said to be unique in the Arab world as it is more congested when considered with the UAE total population which is approximately four million in 2009 and UAE tends to have a large number of banks and branches. Currently there are 49 national and foreign banks in UAE where in there are 263 domestic branches and 106 branches for foreign banks. Apart form these there are 45 representative offices for foreign banks. When we compare the banks and its branches with that of UAE nationals it is noticed that there is a high level of congestion in the world. Banking sector in UAE is said to have relatively young leadership when compared with that of other countries. Banking sector is undergoing considerable changes and the financial sector in UAE is generally emphasized by judicial system and legal frameworks. UAE government has actively encouraged banking sector after the discovery of oil in 1960. Abu Dhabi government has been taking wide steps in encouraging national and international banks to set up in the emirates. One of the major factors that are leading to the growth of foreign banks is


BANKING SECTOR IN UNITED ARAB EMIRATES


to serve the increasing expatriate population and increase the ability of earning high profits (Awamleh, Evans and Mahate, 2005). METHODS A sample MLQ Survey questionnaire was prepared based on the concept of transformational and transactional leadership and their effectiveness and distributed to 54 participants in 3 different banks (18 employees from each bank). MEASURES The sample survey questionnaire included a total of 28 questions, of which 20 questions were based on transformational leadership style and the rest 8 questions on transactional leadership style. The 20 questions based on transformational leadership style focused on factors such as building trust, acting with integrity, inspiring others, encouraging innovative thinking and coaching others. The 8 questions related to transactional leadership style were focused on factors such as reward achievements and monitoring mistakes. The rating of the questionnaire is done on the basis of rating scale mentioned as 0 = Never, 1 = Once in a while, 2 = Sometimes, 3 = Fairly often, 4 = Frequently, if not always. The results were analyzed in percentages of response and inferences were drawn out. INTREPRETATION OF RESULTS

5

Based on the 54 people surveyed 79.6% were males and 20.4% were females. The age wise bifurcation shows that 77.8% of the participants are under the age group of 25 – 35, 14.8% were under the age group of 35 – 45, 3.7% were under the age group of 45 – 55 and the other 3.7% were under the age group of less than 25. Next considering the designation of the participants surveyed it is seen that 29.6% are Clerk, Teller, Data entry operator, cashier, 29.6% were Credit Analyst, Marketing sales Executives followed by 21.4% Receptionist, office assistant and 16.7% in others category. The results clearly indicate that the survey was well diversified under qualitative and quantitative approach. It was observed that due to culture of UAE women did not come forward to fill up the survey report as easily as being done by men. The age group is accepted as in the portfolio selected most of them were youngsters and participants are with experience up to 8 years. The following tables will give a clear picture of factors related to both transactional and transformational leadership.


PERSONAL INFORMATION OF EMPLOYEES


BUILDING TRUST 1(a) Managers inspire power and pride in when associated with him Level of opinion

Number

% Response

Never

2

3.7

Once in a while

5

9.3

Some times

7

12.9

Fairly often

8

14.8

Frequently if not always

32

59.3

1(b) Managers go beyond their own individual interests Level of opinion

Number

% Response

Never

2

3.7

Once in a while

4

7.4

Some times

5

9.3

Fairly often

18

33.3


25

46.3

Number

% Response

Never

NIL

NIL

Once in a while

1

1.8

Some times

5

9.3

Fairly often

8

14.8


40

74.1

6

Level of opinion


1(c ) Your managers focus on the interests of the teams and its members


The percent wise response to building trust indicates that the response varies from 46.3% to 74.1% proving support from the managers. The feeling of power and pride is result of mutual understanding and harmonious environment in which the employees are working. The ratio also proves that employees believe in organization and its values and perform better for improvement in the organization. The managers try to go beyond their individual interest for social cause and others mainly restricting themselves as per ethics of the organization. 46% of the data shows that managers were more co operative in handling the situation by avoiding their self interest. Such type of the view indicates that the management is not conflict management but supporting management. The review of data is not astonishing as it proves that the leadership style in these cases is the transformational and 74% of the survey participants are of the view that managers try to focus on common interest of the group rather than individual interests. ACTING WITH INTEGRITY 2. (a) Your managers manifest positive and highly valuated behaviors (like authority, awareness, self-control, a high moral judgment, optimism and self-efficiency) Level of opinion

Number

% Response

Never

1`

1.8

Once in a while

3

5.6

Some times

8

14.8

Fairly often

22

40.7


20

37.1

Number

% Response

Never

NIL

NIL

Once in a while

4

7.4

Some times

5

9.3

Fairly often

29

53.7


16

29.6

7

Level of opinion


2. (b) Your manager mostly talk about their most important values and beliefs


2. (c )Your manager focus on a wanted vision Level of opinion

Number

% Response

Never

NIL

NIL

Once in a while

4

7.5

Some times

7

12.9

Fairly often

25

46.3


18

33.3

Number

% Response

Never

NIL

NIL

Once in a while

6

11.1

Some times

6

11.1

Fairly often

32

59.3


10

18.5

The parameters of Acting with integrity show that most of the respondents are of the view that managers focus on ethics, vision and highly valuated behaviours. Maximum participants gave the highest scoring to Fairly Often which shows that in transformational leadership style there is value addition in knowledge, ethics and overall management by the managers. The percent wise response varied from 40.7% to 59.3% under category of “Fairly often” for exhibiting the various qualities is the fair indication of values, communicating vision and beliefs etc. The analysis show that most of the managers are normally talking about their thinking of value and beliefs. This is typical example of organizational behaviour, motivation, and change. At times the employees may not believe in all the talks and views of managers but majority i.e 53.7% indicate “Fairly Often” attitude. This leads to human resource professionals and others in today's organizations to understand better, more quickly and reliably, what the underlying human problems in their organizations are. The percentage wise response of 29.6% under frequent category is also good indication for the issues raised. The review of the analysis of the data is indication of the trend in recent times to define their "Vision/Mission Statement" by all the corporate. A mission statement articulates the philosophy of the company with respect to the business in specific and society in general. Once the mission statement of the company is finalized and adapted, it provides a readymade guideline to employees of the organization about its principles, policies and practices.

8

Level of opinion


2. (d) Your manager always consider the moral and ethical consequences of their actions


The response of the participants under Fairly Open and Frequently 46.3% & 33.3% is a step towards importance of vision statement. Moral and ethical consequence of the actions of the managers is being appreciated by most of the participants in the study. The majority i.e 59.3% are of the view that the organization they are part of has such practice and their managers were concentrating on moral values. In fact most of the companies having strong outlook for the ethics infuse strong ethical principles to retain the culture of the organization. INSPIRING OTHERS 3 (a) Are you inspired without the need for identification or contacts with your managers Level of opinion

Number

% Response

Never

NIL

NIL

Once in a while

7

12.9

Some times

30

55.6

Fairly often

12

22.2


5

9.3

Number

% Response

Never

NIL

NIL

Once in a while

6

11.1

Some times

15

27.8

Fairly often

28

51.8


5

9.3

9

Level of opinion


3 (b) Are the managers communicative and share goals and have mutual understanding of what is right and important


3 (c) Your manager provide visions of what is possible and how to attain them Level of opinion

Number

% Response

Never

2

3.7

Once in a while

4

7.4

Some times

6

11.1

Fairly often

32

59.3


10

18.5

3 (d) Your manager develop sense and promote positive expectations about what has to be done Level of opinion

Number

% Response

Never

1

1.8

Once in a while

3

5.6

Some times

5

9.3

Fairly often

35

64.8


10

18.5

Number

% Response

Never

2

3.7

Once in a while

5

9.4

Some times

7

12.9

Fairly often

33

61.1


7

12.9

10

Level of opinion


3 (e) What do you think they are inspiring - themselves or for improving their group, division, organization, and/or community


It is a universal fact that at work, some people inspire you more than others. Though it may not be your immediate boss or any other senior but that person will have the qualities which have attracted you to contact him. Any such person who influences your thoughts is a strong leader. Employees listened to what he had to say and were inspired by him. The data analysis is also inaction of the same. Self inspiration is limited in non managerial categories but given the proper line of action the staff is motivated to large extent. The response varies from 51.8% to 61.8% under the category proving majority of staff is of the opinion mangers provide vision, goals and ways to achieve it. In most of the cases the leaders share the goals and have mutual understanding amongst the staff which is good indication of leadership style being not autocratic. The analysis of the data collected is also giving evidence of the acceptance of communication of targets. The participants are of the view that majority i.e 59% feel that managers do provide the visions of the organisation and also suggesting the way out to achieve the same. Managers get involved in various projects and work with staff. Input from the staff will be encouraged and respected to be creative in accomplishing their projects. This indication is well reflected in the 64.8% of the participants feel that managers develop positive expectations by involving them. The leaders under the transformation leadership style works for the group and the tasks undertaken by them are for the improvement in the community. The maximum of 61.1% of the employees in these banks voted for the “ Fairly Often” category proving that group goals are most important for achieving the individual goals. ENCOURAGING INNOVATIVE THINKING

Number

% Response

Never

2

3.7

Once in a while

5

9.3

Some times

14

25.9

Fairly often

28

51.8


5

9.3

4 (b) Your managers help others to think about old problems in new ways Level of opinion

Number

% Response

Never

2

3.7

Once in a while

4

7.4

Some times

16

29.6

11

Level of opinion


4 (a) Do your managers intellectually encourage you for ideas and values


Fairly often

28

51.9


4

7.4

4 (c ) Your managers encourage to question their own beliefs, statements, and values Level of opinion

Number

% Response

Never

2

3.7

Once in a while

2

3.7

Some times

10

18.5

Fairly often

14

25.9


26

48.2

Number

% Response

Never

3

5.5

Once in a while

5

9.3

Some times

15

27.8

Fairly often

25

46.3


6

11.1

4 (e) You learn to tackle and solve problems on your own by being creative and innovative Level of opinion

Number

% Response

Never

5

9.3

Once in a while

5

9.3

Some times

20

37.0

12

Level of opinion


4 (d) You develop the capacity to solve future problems that are unexpected by your manager


Fairly often

17

31.5


7

12.9

As per the survey most of the employees are of the opinion that managers encourage better ideas from the staff under the category of Fairly Often and frequently if not always. Most of the staff are awarded for providing the intellectual ideas. The percentage wise distribution is better if we add two categories frequently and Fairly Often. The response of 51.8% and 9.3% under this category is fair indication of asking for opinion from staff which is one of the important features of Transformational Theory of leadership. The data indicates that most frequent and fairly often category includes 51.9% and 7.4% of the data collection suggesting new ways to solve old problems. This is being seen as a step as per modern trend and change in working style to avoid loss and get rid of problems faced in the past. The data pertaining to encouraging the staff to comment upon the beliefs of the managers in spread out in three main categories i.e., some times, Fairly often and Frequently if not always constituting 48.2%, 25.9% and 18.5% of the total survey data. This is clear indication of the managers accepting the criticism of their self beliefs which are their personal opinion and not binding. Survey indicates that employees are engaged in creativity by bringing into existence the idea which is new to them. The practical approach is always taken into consideration for implementation in future. COACHING OTHERS

Number

% Response

Never

3

5.5

Once in a while

5

9.3

Some times

15

27.8

Fairly often

23

42.6


8

14.8

5.(b) Your managers treats each individual uniquely Level of opinion

Number

% Response

Never

NIL

NIL

Once in a while

3

5.6

13

Level of opinion


5 (a) Your manager understands and shares with others' concerns and developmental needs


Some times

9

16.6

Fairly often

32

59.3


10

18.5

5 (c ) Does this help you to recognize and satisfy your current needs Level of opinion

Number

% Response

Never

NIL

NIL

Once in a while

6

11.1

Some times

11

20.4

Fairly often

32

59.3


5

9.2

Number

% Response

Never

NIL

NIL

Once in a while

7

12.9

Some times

12

22.2

Fairly often

30

55.6


5

9.3

The survey indicates that 42.6% of the employees are of the opinion that managers do show their concern towards employees. Employees constituting 59.3% agreed that managers deal with employees uniquely. The implementation cannot be uniform with all employees. The indication of 59.3% accepting that their current needs are being met is a fair indication of employees satisfaction level and enjoying the culture of the organization.

14

Level of opinion


5 ( d) You attempt to maximize and develop these needs at a possible limit


REWARD ACHIEVEMENTS 6 (a) Your managers discuss in clear the terms regarding the responsibilities for specific tasks (given to you or your team) Level of opinion

Number

% Response

Never

2

3.7

Once in a while

5

9.3

Some times

23

42.6

Fairly often

20

37.0


4

7.4

Number

% Response

Never

NIL

NIL

Once in a while

16

29.6

Some times

20

37.0

Fairly often

10

18.5


8

14.9

6 (c ) Your manager express satisfaction when they get the desired output Level of opinion

Number

% Response

Never

NIL

NIL

Once in a while

7

12.9

Some times

15

27.8

Fairly often

27

50.0

15

Level of opinion


6 (b) Your manager project, state the performance objectives, clarify rewards and punishments (if any)



5

9.3

Survey indicates that managers in the banks are communicating their views on the performance and rewards and punishments are being indicated to the staff. The responsibility aspect is passed on the employees as per 42.6% employees in the survey list. Some of the employees feel i.e 37% that punishment is indicated to the employees. Subject to the condition that transparency in actions is maintained in banks the indication of reward and punishment will improve the working giving chance to others to be motivated for better performance. The data shows that 50% of the employees are of the view that their work in noticed if the targets allocated to them are achieved. MONITORS MISTAKES 7 (a ) Your manager clearly describe your inefficient performance Level of opinion

Number

% Response

Never

NIL

NIL

Once in a while

2

3.7

Some times

5

9.3

Fairly often

18

33.3


29

53.7

Number

% Response

Never

NIL

NIL

Once in a while

2

3.7

Some times

8

14.8

Fairly often

19

35.2


25

46.3

16

Level of opinion


7 ( b) Your manager keep track of your mistakes and later concentrate on errors and exceptions


7 (c ) Your manager focus on allowing you for not respecting the set standards Level of opinion

Number

% Response

Never

NIL

NIL

Once in a while

5

9.3

Some times

20

37.0

Fairly often

25

46.3


4

7.4

7 (d) Your manager monitor deviations, mistakes and errors and further put forward quick and thorough corrective measures Level of opinion

Number

% Response

Never

2

3.7

Once in a while

8

14.9

Some times

18

33.3

Fairly often

20

37.0


6

11.1

The analysis of these parameters indicates 53.7% of the sample employees furnishing the opinion

Transformational leaders will transform the needs (current and future), values, preferences and aspirations of the followers from the self interest to collective interests. One of the major finding in the report is that transactional leadership is mainly related to rewards and punishments. Dependence on only this theory will cause damage to the bank’s reputation in future. Survey analysis confirms that a transformational leadership style of bank managers will boost employees' job satisfaction and performance. The transformational qualities are step towards higher level needs of followers and result in feelings of satisfaction. This finding is in line with the leadership researchers (e.g., Bass & Avolio, 1990). The value addition and ethics that managers will give to juniors will be reflected in their general positive attitude toward work and work conditions, which in turn, increases job satisfaction and facilitates performance. It was

17

CONCLUSION AND RECOMMENDATIONS


that while criticizing performance managers do not hesitate. 46.3% of the sample data feel that their errors and mistakes are being monitored.


observed that employees in general were getting awareness from their superiors. The employees of two banks are found to be less experimental, less risk taking learning from successes and failures when compared to the later. Though transnational method of leadership still persists in minor form but overall the management should take into consideration transformational leadership. The three banks have demonstrated change in the style of leadership though they differ in percentage wise implementation. These banks are able to successfully initiate, implement and sustain these changes for their future developments. The benefits of the transformational leadership observed in the survey improved employee commitment, increase in trust in leadership and stronger connection with the vision of the banks. There are other positive outcomes in nature of improved employee-leader relationship, providing suggestions for improvements and able to discuss the beliefs of the management. This can be further improved if it is extended to all departments. These banks should present an elaborate plan and state the best path toward achieving the mission. Under the improvement for the system, mentoring is the way that takes the bank to next level. The most important factor is who is to be mentored. This may not be an easy thing to figure out. It is also important for the manager to bring team in line with the company’s objectives. He should also motivate the team so that it truly wants the outcome of its creativity to be successful. Manager should have potential to harness the talent of the team member’s best. Manager should change their mind in favor of a team member’s suggestion and actively involve the team and takes their suggestions. Manager should inspire employees by enhancing the meaningfulness of their work and making them feel important to their organization. This kind of leadership helps people determine what is right and wrong, relevant and irrelevant in the organization. Managers should go beyond their individual interest to maintain the credibility, trust and respect of employees by the behavior. REFERENCES 1. Avolio, B. J., Waldman, D. A., & Einstein, W. O. (1988). Transformational leadership in a management game simulation. Group & Organization Studies, 13(1):59-80.

4. Burns, J.M. (1978). Leadership. New York: Harper & Row. 5. Campbell, J.P. (1990). Modeling the performance prediction problem in industrial and organizational psychology. In M.D. Dunnette & L.M. Hough (Eds.), Handbook of Industrial and Organizational Psychology (pp. 687 -732). Palo Alto, CA: Consulting Psycholo gists Press, Inc. 6. Doherty, A. J., & Danylchuk, K.E. (1996). Transformational and transactional leadership in interuniversity athletics management. Journal of Sport Management, 10(3), 292-309.

18

3. Bass, B. M. (2000). The future of leadership in learning organizations. Journal of Leadership Studies, 7:18-40.


2. Bass, B. M. (1985). Leadership and performance beyond expectations. Free Press: New York.


7. Don Hellriegel, John W. Slocum, 2007. Organizational behavior, Thomson south western, USA 8. Fernandes, C., & Awamleh, R. (2004). The impact of transformational and transactional leadership styles on employee's satisfaction and performance: An empirical test in a multicultural environment. International Business and Economics Research Journal, 3(8):65-76. 9. J R Awamleh, John Evans, Ashraf Mahate (2005). A test of transformational and transactional leadership styles on employees' satisfaction and performance in the UAE banking sector. Journal of Comparative International Ma nagement. 10. Luis R. Gomez-Mejia, David B. Balkin, Robert L. Cardy (2007). Managing Human Resource, Pearson Education, Inc. New Jersey. 11. Manz, C.C., & Sims, H.P., Jr. 1987. Super leadership Englewood Cliffs, NJ: Prentice-Hall. 12. Shin, S., & Zhou, J. (2003). Transformational leadership, conservation, and creativity: Evidence from Korea. Academy of Management Journal, 46:703 -714. 13. Waldman, D. A., Bass, B. M. & Yammarino, F. J. (1989). Adding to leader follower transactions: The augmenting effect of charismatic le adership. ONR Technical Report No.3. Binghamton, NY: Center for Leadership Studies, State University of New York 14. Weese, W.J. (1996). Do Leadership and organizational culture really matter? Journal of Sport Management, 10(2), 197 -206.

19


15. Yukl, G. (1989b). Managerial leadership: a review of theory and research. Journal of Management, 15(2), 251-289.


ROLE OF CO-OPERATIVE BANKS IN AGRICULTURE CREDIT: ORGANIZATION, GROWTH AND CHALLENGES RAJESH BHARDWAJ*; PRIYANKA**; REKHA RAHEJA*** *Research Scholar, Department of Commerce, M.D. University, Rohtak, Haryana. **Assistant Professor, Department of Business Administration, Hindu college, Sonepat. ***Assistant Professor, Department of Commerce, Hindu College, Sonepat.

ABSTRACT In this study we have analysed the role of Co-operative banks in agriculture credit in India from 2001/2002 to 2006/2007 with the help of ACGR. The study reveals that the aggregate amount of agriculture credit has increased, while, the share in total institutional agriculture credit has been decreased from 37.91 in 2001/2002 to 18.51 in 2006/07 and further, found that the level of NPAs in Co-operative banks is very high as compare to other financial institutions in India. So, co-operatives banks should control their NPAs level for surviving in credit market of India in future. KEYWORDS: Co-operatives, Agriculture credit, NPAs. ___________________________________________________________________________

20

Agriculture is the mainstay of the Indian economy. According to NSSO round 2001, 54.3 per cent workforce has been depends on agriculture, out of these, 50.3 percent depends on crop production and left 4 percent on livestock production for their livelihood. Agriculture and allied sectors contribute nearly 22 per cent in Gross Domestic Product (GDP) of India and further 9.93 per cent contribution in total export of India (Economic Survey of India: 2006). Agriculture sector plays a vital role in Indian economy through providing livelihood opportunity and export earnings. Agriculture is the most important sector of the Indian economy from the perspective of poverty alleviation, and employment generation. When any change in the agriculture sector-„Positive or Negative‟- has multiplier effect on the entire economy. At presently agriculture are facing much difficulties such as irrigation, HYVs, marketing of agriculture products, advanced technique of farming, fertilizer, credit and other capital equipment etc. Credit is the major factor all of them that affecting the agriculture development. The low productivity of land, heavy dependence on usurious money lender and high level of indebtedness were seem as the main causes of rural poverty and distress (Vidyanathan: 2010). There are two source of agriculture credit first is non-institutional i.e., Professional miner lenders, friends, relatives etc. and second is institutional source i.e., Cooperative banks, Regional Rural Banks and Commercial Banks. The institutional source of agriculture credit aim is providing high quality loans with low cost. But at present the aim of different institutions is not fulfils. The Economic survey (GoI), 2010, showed that out of 27 public sector banks, only 14 public sector banks achieved the agriculture credit target of 18 per cent agriculture credit, in case of private sector banks, only 8 achieved the target of 18 percent for lending to agriculture in 2009, further, National Sample Survey Organization (2003) in his “situation assessment survey” found that the „only 48.6 percent farmer


INTRODUCTION


households were indebted, of which only 57.7 percent were indebted to institutional agencies. In other words, only 28.04 percent of farmer households were indebted to institutional agencies. And further found that the „after nearly 37 years of nationalization and over 15 years of credit targeting for agriculture, in AP and Rajasthan the total debt of the farmer households from all institutional sources put together was less than that from the moneylenders. Further, in Punjab, Assam and Bihar, the total debt of the farmer households from institutional agencies was less than from non-institutional agencies. Thus, evolution of institutional credit to agriculture has assumed critical importance. In this study, we have examined the role of Co-operative banks in agriculture credit from 2000/2001 to 2006/07 in India. Thus, this study examined the organisation, trend and pattern of agriculture credit and challenges facing by Co-operative banking institution in India. RESEARCH METHODOLOGY The nature of present study is analytical. The study is based on secondary data. The necessary data were collected from Report trend and progress of banking in India, RBI Annual report. The results have obtained from different statistical tools such as Mean, ACGR, S.D. etc. the period of study is 2001 to 2007. AVERAGE COMPOUND GROWTH RATE (ACGR) The average compound growth rate was computed by employing following formula: Y = ab By using logarithm, it may be written as: Log y = log a + t log b Y* = a* + t.b* (where log y = y*, log a = a* and log b = b*) The value of b* is computed by using ordinary least square (OLS) Method. Further, the value of ACGR can be calculated by followed method: ACGR = (Antilog b* -1) x 100

(i)

Land improvement Loans Act of 1883 and

(ii)

Agriculture Loan Act of 1884.

Under these Laws, indirect loan know as „Taccavi‟ loan were given to the farmers for understanding land improvement measure like embankment, tanks, water-source and the like with a maximum repayment, period of 35years. Under the later stage, direct loans where provided for the purchase of seeds, cattle, manure and implements. „Taccavi‟ loans played an important role during times of famines, floods and drought. These loans were routed through the revenue department of the State Government up to 1969-70.The second step was taken

21

The first step was taken by the „British Government‟ in context of organized/institutional loan for agriculture in India. To make the provision of organized loan under


PROGRESS OF CO-OPERATIVE BANKING - A BIRD EYE-VIEW


22


1904 in context of institutional loans for agriculture as a Co-operative movement. The Cooperative movement owns its origin to „England‟, where a great philosopher, „Robert Owen (1771-1850)”, has given the idea of „Self-Help through Mutual Help‟ to mitigate the suffering of the exploited class of the society. The Co-operative movement was introduced in India in the early year of 20th century with the main object relieving the peasantry‟s burden of debt and for providing credit through a local agency on the principles of thrift, self-help and mutual aid. The Co-operative Societies Act, 1904, was introduced on the recommendation of the Law Committee appointed by the Government of India under the chairmanship of “Edward Law”. Indian Co-operative Movement picked up momentum especially after the world war. By 1950 the Co-operative credit movement had emerged as a developed, sound satisfactory banking system in most of the Indian Union. The Co-operative Banks are organised and managed on the principal of co-operation, self-help, and mutual help. They function with the rule of "one member, one vote". Function on "no profit, no loss" basis. Cooperative banks, as a principle, do not pursue the goal of profit maximisation. Co-operative bank performs all the main banking functions of deposit mobilisation, supply of credit and provision of remittance facilities. Co-operative Banks provide limited banking products and are functionally specialists in agriculture related products.


FIGURE 1 ORGANIZATION STRUCTURE OF CO-OPERATIVE BANKING IN INDIA Structure of Co-operative Banking

Direct Cooperatives

State Cooperative Banks

Indirect Cooperatives

State Agriculture & Rural Development Banks

23

Primary Agriculture Credit Co-operative Societies

Primary Agriculture & Rural Development Banks


District Central Co-operative Banks


Source of Capital and Working fund1 of Co-operative banking in India are given below: There are five sources of funding of Co-operative banks in India. (a) Central and state government, (b) The Reserve Bank of India and NABARD, (c) Other Co-operative institutions, (d) Ownership funds and, (e) Deposits. PRIMARY CO-OPERATIVE AGRICULTURAL CREDIT SOCIETIES (PACSS) A Co-operative agricultural credit society can be started with 10 or more persons normally belonging to a village or a group of villages. The value of each share is generally nominal so as to enable even the poorest farmer to become a member. The members have unlimited liability, that is each member is fully responsible for the entire loss of the society, in the event of failure. Loans are given for short periods, normally for the harvest season, for carrying on agricultural operation, and the rate of interest is fixed. There are now over 92,000 primary agricultural credit societies in the country with a membership of over 100 million. The primary agricultural credit society was expected to attract deposits from among the well –to-do members and non-members of the village and thus promote thrift and self-help. It should give loans and advances to needy members mainly out of these deposits. CENTRAL CO-OPERATIVE BANKS (CCBS)

Their own share capital and reserves

2)

Deposits from the public and

3)

Loans from the state Co-operative banks

To manage the appropriate funds for development is biggest challenge for Co operative Banks in India as they cannot go for public issue of share and nor can they issue shares and or debentures at par or premium to fulfil the requirement of funds. According to SEBI Act, 1992 and Security Contract Act, 1956 (SCRA), for a financial instrument to be eligible to be listed in the Stock Exchange, it should be issued by a body corporate as defined under the Companies Act, 1956. A Co-operative Society is a body co rporate as per the Co-operative Societies Act, but not as per the Companies Act. As such, the financial instruments issued by Co -operative Banks cannot be listed in a stock exchange.

24

1

1)


The central Co-operative banks located at the district headquarters or some prominent town of the district. The central Co-operative banks have three sources of funds. The sources of funds of central Co-operative banks are given below:


Their main function is to lend to primary credit society apart from that, central Co-operative banks have been undertaking normal commercial banking business also, such as attracting deposits from the general public and lending to the needy against proper securities. There are now 367 central Co-operative banks. STATE CO-OPERATIVE BANKS (SCBS) The state Co-operative Banks (29: 2009 in number), they finance, co-ordinate and control the working of the central Co-operative Banks in each state. They serve as the link between the Reserve bank and the general money market on the one side and the central Cooperative and primary societies on the other. They obtain their funds mainly from the general public by way of deposits, loans and advances from the Reserve Bank and they are own share capital and reserves. FIGURE 1 TREND IN GROWTH OF AGRICULTURE CREDIT BY CO-OPERATIVE BANKS IN INDIA 0.5 0.45 0.4 0.35

0.25 0.2 0.15

0.05 0 2001/02

2002/03

2003/04

2004/05 Years

2005/06

2006/07


0.1

25

Per Cent

0.3


TABLE 1 TREND IN GROWTH AND PATTERN OF ADVANCES BY CO-OPERATIVE BANKING IN INDIA Years.

Total Credit By Cooperative Banks.

Total Institutional Agriculture Credit in India.

Total Direct Credit By Cooperative Bank

Total Direct Institutional Agriculture Credit in India

Total indirect Credit By Cooperative Banks

Total indirect Institutional Agriculture Credit in India

23524

62045

18787

40509

4737

24536

(37.91)

(100)

(46.37)

(100)

(19.30)

(100)

23636

69560

19668

45586

3968

23974

(33.97)

(100)

(43.14)

(100)

(16.55)

(100)

26875

86981

22640

54977

4235

32004

(30.89)

(100)

(41.18)

(100)

(13.23)

(100)

31231

125309

27157

71847

4074

53462

(24.92)

(100)

(37.79)

(100)

(7.62)

(100)

39404

180486

34930

105282

4474

75204

(21.83)

(100)

(33.17)

(100)

(5.94)

(100)

42480

229400

38622

131631

3858

71666

(18.51)

(100)

(29.34)

(100)

(5.38)

(100)

31191.67

125630.2

26967.33

74972

4224.333

46807.67

(24.82)

(100)

(35.96)

(100)

(9.02)

(100)

S.D.

8116.468

67019.61

8224.296

36303.55

330.9928

23259.93

ACGR

10.35

24.35

12.76

21.7

-3.36

19.56

2003/04

2004/05

2005/06

2006/07

Average

26

2002/03


2001/02


Source: 1. Reserve Bank of India. 2. National Bank for Agriculture and Rural Development. Table 1 reveals the agriculture credit provided by Co-operative banks from 2001/02 to 2006/07 in India. The table also depict the direct credit as well as indirect credit provided by Co-operatives banks. Total agriculture credit by Co-operatives has grown from Rs. 23524 crore from in 2001/2002 to Rs. 42480 crore in 2006/2007; direct agriculture credit has grown from Rs. 18787 to Rs. 38622 in same period while, indirect agriculture has decrease from Rs. 4737 crore in 2001/02 to Rs. 3858 crore in 2006/07. The average share of Co-operative in total agriculture credit has 24.82 per cent at national level, while, direct agriculture credit 35.96 per cent and indirect agriculture credit 9.02 percent during the period under study. The ACGR of agriculture credit by Co-operative banks has 10.5 percent in total agriculture credit, while, ACGR of institutional agriculture credit in India has 24.35 percent in same period. In case of direct and indirect agriculture credits ACGR of Co-operative banks has 12.76 and 3.36 per cent respectively, while the ACGR of institutional direct and indirect institutional agriculture credit in India has 24.35 and 19.56 per cent. The ACGR of Co-operative banks has always less as comparison to aggregate institutional agriculture credit India during the period under study. It is a matter of concern because; the percentage share of Co-operative banks in total institutional agriculture credit has 65.44 percent in 1973-74 and it has decreased at still 24.82 percent in 2006/2007. Besides, there are many resins are responsible such high level of NPAs2, traditional services3 providing by Co-operatives credit societies, limited area4 of operation etc.

NPA‟s: A Non-Performing Asset can be defined as a credit facility in respect of which the interest or the instalment of principal has remained overdue for a specified period of time (90days). The specified period of time was reduced in a phased manner over the years. An asset is classified as non-performing if the borrower does not pay dues in the form of principal and interest for a period of 180 days. However, which effect from March 2004, default-status will be given to a borrower account if dues are not paid for 90 days. 3 4

Like Deposits and Advances, no internet banking, Electronic Fund Transfer, ATM, etc

Since the Co-operative Act, is a state matter, therefore, opening the extension counters and operate them in other states is an important challenge for the development of Cooperative Banks movement in India.

27

2


Table 2 reveals the non performing assets of Co-operative banking in India from 2001/2002 to 2007/2008. Maximum non-performing assets are consisting in Primary Cooperative Agriculture and Rural Development Banks and minimum in District Central Cooperative Banks. It means say that the fund management practise by DCCBs is batter out of all and poor practise by Primary Co-operative Agriculture and Rural Development Banks. The ACGR of all Co-operative institutions has negative except State Co-operative Agriculture and Rural Development Banks and Primary Co-operative Agriculture and Rural Development Banks during the period under consideration. The ACGR of NPAs in State Cooperative Banks has -1.25 per cent, District Central Co-operative Banks 0.88 per cent, Primary Agricultural Credit Societies -4.82 per cent, State Co-operative Agriculture and Rural Development Banks 6.44 per cent and Primary Co-operative Agriculture and Rural Development Banks 0.05 per cent. On the base of ACGR of NPAs, we conclude that the fund


management practices by Primary Agricultural Credit Societies has been batter all of them in context of NPAs management. TABLE 2

State Cooperative Banks

District Central Cooperative Banks

Primary Agricultural Credit Societies

State Cooperative Agriculture and Rural Development Banks

Primary Cooperative Agriculture and Rural Development Banks

2001/02

13.4

19.9

32.5

18.5

30.2

2002/03

18.2

21.2

37.9

20.9

33.8

2003/04

22.7

18.7

24

36.8

26.7

2004/05

23.2

16.3

19.9

33.6

31.3

2005/06

18.9

16.8

19.7

30.4

32.7

2006/07

18.3

14.2

18.5

26.9

30.3

2007/08

12.27

18.7

23

****

43

Average

18.138

17.97143

25.07143

27.85

32.57143

Minimum

12.27

14.2

18.5

18.5

26.7

Maximum

23.2

21.2

37.9

36.8

43

4.1619

2.366231

7.348178

7.159539

5.117849

-1.25

-0.88

-4.82

6.44

0.05

S.D. ACGR

Source: Reserve Bank for UCBs and NABARD for Rural Co-operative Banks (excluding PACS for which the source is NAFSCOB)

28

Years


NON-PERFORMING ASSETS OF CO-OPERATIVE BANKING


FIGURE 2 TREND OF NON-PERFORMING ASSETS IN INDIAN CO-OPERATIVE BANKING 50 45 40

Per Cent

35 30

I

25

II

20

III

15

IV V

10 5 0 2001-02

2002-03

2003-04

2004-05

2005-06

2006-07

2007-08

Years

Note: I: State Co-operative Banks, II: District Central Co-operative Banks, III: Primary Agricultural Credit Societies, IV: State Co-operative Agriculture and Rural Development Banks, and V: Primary Co-operative Agriculture and Rural Development Banks

29

There are now over 92,000 primary agricultural credit societies, 367 central Cooperative banks and 29 state Co-operative Banks operating in India (RBI: 2009). It is a remarkable achievement of Co-operative credit movement in India. Total agriculture credit by Co-operatives has grown from Rs. 23524 crore from 2001/2002 to Rs. 42480 crore in 2006/2007; direct agriculture credit has grown from Rs. 18787 crore to 38622 crore in same period while, indirect agriculture has decreased from Rs. 4737 crore in 2001/02 to Rs. 3858 crore in 2006/07.The ACGR of total agriculture credit by co-operatives has 10.5 per cent, direct agriculture credit ACGR 10.76 per cent and indirect ACGR -3.36 per cent during period under study while, the ACGR of aggregate institutional agriculture credit in India has been 24.34 per cent, 21.7 per cent and 19.76 per cent respectively in same period. The ACGR of NPAs has -1.25 per cent in State Co-operative Banks, -0.88 per cent in District Central Cooperative Banks, -4.82 per cent in Primary Agricultural Credit Societies, 6.44 per cent in State Co-operative Agriculture and Rural Development Banks and 0.05 per cent in Primary Co-operative Agriculture and Rural Development Banks. In nut sell the ACGR of agriculture credit by Co-operative banks always less as comparison to ACGR of all India institutional agriculture credit during the period under consideration and the level of NPAs in Cooperative banking system is very high as compare to other financial institutions. Therefore, co-operatives banks should control their NPAs level for surviving in credit market of India in future.


CONCLUSION


REFERENCES Kodan, Singh Anand, Malhan, Sanjay and Malik, Surjit (2010) „Role of Scheduled Commercial Banks in Agriculture Credit in India: A Comparative Study of Public and Private Sector Bank Groups‟. Journal of Economic and International Finance, Vol. 2(12), November (2010) Published By Academic Journals Kodan, Singh Anand, Mehra, Shalinder and Kaidyann Narander (Forthcoming) „Deposit Mobilized by Districts Co-operative Banks: A Case Study of Baroda Districts Central Co-operative Bank‟ Indian Journal of Finance, New Delhi Kodan, Singh Anand and Deswal, Jasbir (2010) „Role of RRB‟s for agriculturists‟ Southern Economist, Banglore Vol. 48 Issue No.17 January 2010. Datta S.K. & S. Kapoor, (1996), Collectivetive Action, Leadership and Success in Agricultural Co-operatives – A Study of Gujarat and West Bengal, Oxford & IBH Publishing Co. Pvt. Ltd., New Delhi. Indian Co-operative Movement: A Profile, (1998), National Resource Centre of NCUI, New Delhi, India. Mishra S.N,(1997), Agricultural Liberalisation and Development Strategy in 9th Plan, Economic and Political Weekly, March 29 – April 4, 1997, Vol. 32, No. 13. Rakesh A.R., (1997), Institutional Arrangement for Rural Credit in India, YOJANA, Government of India. Rama Rao P.V.A, (1998), Co-operative at the Cross Roads, Delivering Rural Credit through Co-operatives – An Indian Experience, Co-operatives: Policy Issues for the SAARC Region, edited by Sanjeev Chopra, Centre for Co-operatives & Rural Development, LBSNAA, Mussoorie, India. Taimni K.K., (1998), Meeting the Capital Needs of Co-ops: International Experience, Creating the Space: Financial Disengagement of Government from Co-operatives, edited by Sanjeev Chopra, Centre for Co-operatives & Rural Development, LBSNAA, Mussoorie, India.

Bilamge, Pandit C et al (2010) „Financial Analysis of Co-operative Banks. Third Concept, Feb. Kumar, Mallika (2010) „Co-operatives in India‟. Third Concept, Feb.

30

Report Trend and Progress of Banking in India (RBI Publication) 2006-07.


Reserve Bank of India Annual Report 2006-07.


BUSINESS OPPORTUNITIES FOR INDIA IN AGEING ECONOMIES HITESH I. BHATIA* *Assistant Professor, Navrachana University Baroda, Gujarat.

ABSTRACT If United Nations report (2006-2009) on population ageing is to be believed then over 10 billion people would be dwelling on this earth by 2050. The population is expected to rise by over 3 billion since 2009 to 2050. The gravity of the matter can be felt from the fact that share of people aged over 60 will stand for 22% with a colossal 33% living in developed countries. The comparable share for India by 2050 will come at 20%, 60% of India’s population will be in the productive age group of 15-59 with median age still in 30’s. The very fact that India will be the only major young economy by 2050 provides immense profitable business opportunities for the country. This paper focuses on the other side of the ageing crisis by comparing the demand pattern of the country with ageing. A brief analysis of important demographic indices is done for selected countries to find out how India can take commercial advantage from the same. ___________________________________________________________________________

The 2010 Global Manufacturing Competitiveness Index has ranked India 2nd after China and ahead of USA and South Korea. Lately, India has been successful in surpassing its image of just being a low cost destination. The R&D integration with engineering and technology intelligence has made India a priority destination for designing and manufacturing innovative products demanded in global markets (Deloitte, 2010). A detailed discussion on this theme is done later in the paper.

31

The demography has witnessed a silent revolution during the 20th century, the growth of medical science gifted greater longevity to mankind in the past century that will result in an ageing population globally. The ageing is a far more serious subject then old age; contrary to the popular misconception that both ageing and old age are synonyms (Bhatia, Hitesh 2009). Were old age merely relates to the people who have surpassed the average age of the nation and now are into the last stage of human life cycle, ageing is an elongated process. Population ageing is defined as a process of shift in nation’s population towards older ages. However, India for now is enjoying its demographic dividend and will continue to do so for couple of more decades (Kapila, Uma 2009). With fertility rate falling to 2.6 and the working age group population increasing to over 65% (CIA, World Fact Book, 2010), India will have less dependents both in the age group of below 15 and above 60 years. This shall provide India with a special window of opportunities for business, investment, human development and faster rate of economic growth during the next few decades. To reap the fruits of demographic transition India needs to up its investment in health, education and physical infrastructure this will not only raise the productivity levels but will also make them more competitive in international markets.


INTRODUCTION


However the prevailing conditions show that most of the developed regions are in the fourth stage of demographic transition with both Birth and Death Rates on the lower side. This has brought radical changes in the age structure with more number of people living towards the higher side of age structure. According to United Nation’s Report on World Population Ageing, 20091 the proportion of old-age people in the total population has been gradually rising from 8% in 1950 to 11% in 2009 and is further expected to rise to 22% by 2050. CHART - I PERCENTAGE OF OLD AGE (60+) TO TOTAL POPULATION Least Develp Countries

10 5 20

LDR

8 32

MDR

20 22

World

11 World

MDR

LDR

Least Develp Countries

2050

22

32

20

10

2009

11

20

8

5

MDR – More Developed Regions, LDR – Less Developed Regions

1

The population estimates and projections, which are prepared biennially by the Population Division of the Department of Economic and Social Affairs of the United Nations Secretariat, provide the standard and consistent set of population figures that are used throughout the United Nations system as the basis for activities requiring population information.

32

As shown in the chart I of all; MDR which comprises of all regions of Europe plus Northern America, Australia/New Zealand and Japan (UN, Population Division) would be worst affected due to population ageing. Over 1/3rd of population in these countries would be over 60 years by 2050. The LDR which mainly comprise of regions of Africa, Asia (excluding Japan) and Latin America would witness the maximum growth rate of population over 60 years. By 2050 the ratio of aged will be two and a half times more then present. Although due to low levels of fertility the proportion of aged to total population in LDR would remain less then that of MDR by 2050. The LDC, which comprises of 49 countries across Africa, Asia, and the Caribbean, would be having less proportion of aged in their population consequently the proportion of those in working age group will increase from 53% in 2009 to 61% in 2050


Source: - World Population Prospects: The 2009, Department of Economic and Social Affairs, UN


(World Population Prospects: The 2009). This will create huge opportunity for attaining high economic growth rate for the LDC, if the working age population is gainfully employed. It would be interesting to note that during the period of 2006 to 2050 the percentage rise in population ageing will dramatically differ across the globe. TABLE - I PERCENTAGE CHANGE IN POPULATION AGEING 60 YEARS (DURING 2006 TO 2050) Regions/Country

% Change

Regions/Country

% Change

UAE

1313.39

Africa

89.21

China, Macao SAR b

275.43

New Zealand

76.13

Philippines

223.26

Canada

74.64

Malaysia

201.57

Zimbabwe

67.34

Singapore

196.92

USA

56.35

Rep of Korea

191.14

Japan

53.73

China

177.57

Germany

38.78

Brazil

176.83

United Kingdom

37.07

Sri Lanka

168.95

More developed regions

58.62

Pakistan

161.84

Less developed regions

142.02

India

157.71

Least developed countries

93.69

Nepal

142.96

World

106.17

Other gist’s of ageing include, increase in the median age of country’s population or fall in fertility rate and thereby less proportion of children in total population. In other words either or both are possible reasons for the problem of ageing, one; rising life expectancy and two; falling fertility. The Median Age indicates that half of the country’s population is older then this age; compare to other half that’s younger to that age. A country wise comparison of

33

The more developed regions will see 59% change of those with 60+ years, this is much lower compare to the less and least developed regions vis-à-vis world as a whole. UAE will see maximum change in its old age population from 2% in 2006 to 23% in 2050. At the same time countries like Japan and Germany are showing much lesser change in terms of growth of old age population. But the figures can be misleading as the actual rise of projected old age people in these countries will be among highest in the world.


Source: - World Population Prospects: The 2006 Revision, Department of Economic and Social Affairs, UN


growth in old-age people will further help in understating the crisis of ageing. Today; Japan stands with highest median age of 44 years, much above the world’s median age of 28 years. The trend continues in the coming decades too, by 2050 Japan along with China SAR is projected to exceed median age of 55 years, far above the world’s median age which would then be 38 years. CHART – II COUNTRY WISE RISE IN PROPORTION OF OLD-AGE (60+) 41

39

38

26

37

23

35

34

33

31

29

29

25 21

21

16 11

32

13

28

26

21

21

18

17 11

11

11

C hi

C hi

8

In di a

27

41

Ja pa na n , M na I ta , H ac ly on ao S g A K on R b g S AR S in a ga po re G re e G ce er m an y E ur op e Fr an ce C an ad a U ni te Ch d i K na in gd om S U ri ni La te d nk S ta Th a te ai s of lan d A m er ic a

Percentage

42

2006 2050

Countries

Source: - World Population Prospects: The 2006 Revision, Department of Economic and Social Affairs, United Nations In most of the countries shown in above table the population of those above 60 years will get nearly double by 2050 compare to the present rates. Few countries like Japan, Germany, Italy, Macao SAR China etc will be having 40% of their population aged 60 years and above. In addition other 28 countries will have 33% of their population above 60 years.

One doesn’t needs to run a complex demand estimation model to know the basic needs of elderly. Compare to those from younger generations people from the elderly age groups are likely to spend more on housing, health, medical, recreational, physical support systems, safety and security items, energy etc. The growth of old-age is higher then the total average growth rate of population across all the regions of the world irrespective of their level of development. The 60+ population is growing at an alarming rate of 2.6 % pa, this is far more then the overall growth rate of population on the globe which is 1.2%. Such a mammoth growth of old-age population will require severe socio-economic adjustments in both ageing and young economies. Were the former will require providing more of goods and services demanded by the older people, the later will have the profitable opportunities to produce and supply the same.


CHANGING DEMAND PATTERNS OF ELDERLY

34

It’s a well researched mater that the individual consumer spending changes significant patterns over the lifecycle (Fernandez, Jesus & Dirk Krueger, 2002). Similarly ageing also


affects the national demand and supply structure of goods and services (Luhrmann, Mmelanie, 2005). It is apparent that the share of health expenditure in total expenditure of an individual, family and the nation will increase substantially due to rising life expectancy. Also the demand for health care products would rise accordingly. At the same time furniture, vehicles, education, fast food, sports equipments and some more complex durable goods will find few takers in ageing economies. TABLE –II COMMON GOODS AND SERVICES DEMANDED BY ELDERLY

Easy to wear clothes and accessories

Happy homes

Comfortable Furniture and fixtures

Affordable Hospitals and medical homes

Simple to use gadgets and electronic goods like remote controls

Massage parlors, saloons

Medical goods like walking sticks dentures, hearing machine and spectacles

Recreational centers

Fitness products like wheel chairs, jogging suits and walkers

Life insurance and health insurance

News papers and Books on various issues

Home to Banking services

Affordable and comfortable houses

Religious and spiritual Places

Local shops and supply of basic necessities

Affordable public transport

Home security equipments like alarms and door cameras

Timely Services of Nursing, security guards, aids

Diabetes, BP and other Health monitoring machines

Community halls, parks and places for evening get-together

Source: - http://www.seniorshops.com Moreover ageing economies will also witness a huge demand for unorganized small retail outlets down the lane. This will create employment opportunities in rural areas and towns with less population. A small make shift shop like arrangement can provide adequate supply for aged in the area. As age will restrict the mobility, people will demand simple and basic goods which can be available at their arms length. As shown in the table 3 a huge 30+ percentage of female population is living alone in most of the developed countries, which is also over the age of 60. This would further get shoddier by 2050. With so many women’s living alone at the age of 60+ a new category of demand pattern will emerged. Goods like home security systems will become a must for such category of population. Even in case of males nearly 20% of people over 60+ are living alone presently considering even a nominal increase in this would result in huge demand for nursing services, security guards, parks and


Services Demanded by Elderly

35

Goods Demanded by Elderly


places for evening get-together, massage parlors etc. The culture of being single is largely prevalent in more developed economies were around 22% of population is living alone irrespective of gender. Compare to this in less and least developed regions only 7% and 6% respectively are living alone at present. FALLING LABOR FORCE PARTICIPATION On one hand the demand pattern in ageing economies will see dramatic changes, while at the same time the supply of personalized goods and services too is a case of concern. As median age increases working potential of labor force is expected to fall drastically in next couple of decades. The labor intensive industrial sector in most of the developed nations will be adversely affected due to condensed physical health of it ageing labor force. Labor market adjustments and social security for aged population will be two major challenges future economies will have to face. The labor markets will witness a two-way crisis; one, retirement age will see a dire rise at least by five years and, second, the cost of labor. Skilled labor shortages coupled with experienced (aged) managerial workforce will stipulate the wage rate. TABLE-III LABOR MARKET DYNAMICS AT THE AGE OF 60 AND OVER Life expectancy at age 60

Country/Regions

Statutory retirement Men Women Men Women age Men Women

World

8

19

40

16

-

17

21

More developed regions

13

32

22

11

-

19

23

Less developed regions

5

9

50

19

-

17

19

Least developed countries

4

8

71

37

65

15

17

China, Hong Kong SAR a

11

11

18

4

65

22

26

Japan

13

13

41

19

60

22

27

Republic of Korea

8

8

49

28

60

18

23

India

2

5

59

18

60

16

18

Europe

13

35

15

7

18

22

United Kingdom

22

45

19

7

65

20

23

Italy

10

32

13

4

60

France

15

38

6

4

65

20

26


Percentage in labor force (60+)

36

Percentage living alone (60+)


Germany

15

46

14

6

65

19

24

Canada

14

33

23

11

65

21

25

United States of America 15

35

30

19

65

20

24

Source: - World Population Prospects: The 2006 Revision, Department of Economic and Social AffairsUN Even at today’s rate the life expectancy at the age of 60 years is for nearly 20+ years, couple of decades later with medical developments taking place this figure is going to increase substantially. Official retirement age in most of the countries is between 60 to 65 i.e. people would stop productively contributing after that, but would continue to demand customize goods and services as mentioned in previous section. This would be in addition to basic necessities. Gender wise women are expected to live a longer life compare to men in most of the cases.

According to the U.S. Bureau of Labor Statistics, the ageing-services industry comprising home, healthcare, elderly and disabled services and community care facilities for the elderly, is already 3rd largest industry among top 10 industries with fastest growth possibilities. The more developed regions of Europe, Germany, Japan, China SAR, Italy, France, USA etc are going to face acute shortages of young and productive labor force to stabilize their economic growth and have adequate production of required goods and services. Country like India can take enormous opportunities by not only exporting goods and services demanded there as discussed in table 2, but also by allowing easy migration of both skilled and unskilled labor to meet the labor market deficiency in those countries. India is known world wide to have the best pool of talented and skilled personal, also India comprises of largest number of English

37

ADVANTAGE INDIA


The nature of social security measures available to older people will also affect the labor force participation rates. With pension and other benefits easily available to take care for life post retirement people may opt for voluntary retirement. In UK, USA, Italy, Germany, France, Europe and China SAR on average 5% to 20% of people aged 60+ are participating in labor force. Further the participation of women in labor force is between 4% to 10% much lower then men, considering that the rate of women living alone is much higher then men at the age of 60 and over, this will result in serious constraint. While in case of less and least developing regions due to lack of adequate social security and pension fund benefits available in old-age, people are expected to remain economically active for a long period of time even after retirement. 54% of people at the age of 60 are active in least developed regions while 35% in less developed regions compare to this only 16% remain active in more developed regions at present. It is also true that in countries like India and other less developed regions over 90% population works in unorganized sector thus the effect of statutory retirement age limit is negligible. According to the World Population Ageing Report of 2006 the labor force participation of 60+ in 12 major countries has declined by at least 70 per cent since 1980. These changes in coming decades will put huge pressure on labor market causing lesser supply of labor from productive age group and raising the cost of labor (Fougere, Maxime & Marcel Mérette 2006). Globalization has already created opportunities for both skilled and unskilled labor to migrate smoothly across the countries. Labors from less and least developed regions can contribute significantly in the productive process of more developed regions by grabbing the employment opportunities their.


speaking people and due to this over 70% of Indians who migrate go to countries outside Asia and about 50% to developed counties (Khadria, Binod 2006). India ranks 2nd the list of English speaking countries with 23% of its population fluent in English this is far less then china which ranks 18 with 0.77% of its English speaking population. English being the World’s business language, India will stand out all other industrially developed economies like China, Germany, France, Russia and others. TABLE - IV SELECTED DEMOGRAPHIC INDICES OF INDIA 1950-2050 Indices

1950

1975

2000

2025

2050

Population 60+

5.6

6.2

7.6

12.5

20.6

Population 15-59

55.46

54.00

58.89

64.30

59.71

Life Expectancy at Birth

38.7

52.9

64.2

71.6

75.4

Men

Women

Average

5

3.5

Percentage living alone (60+) 2006 2

Percentage in labor force (60+)

19

18

18.5

Life expectancy at age 60

16

18

17

CONCLUSION India is already the second largest growing economy after China today. The World had witness India’s economic strength in the recent global slowdown. India is going to witness a favorable demographic change in the coming decades. The present competitor China would be having ageing profile similar to the western counterparts. China’s one child policy is going to backfire by 2050; with just 50% of its population in the age bracket of 15-59 i.e. is about

38

By even some modest prophecy India would remain one of the most productive nations by 2050. With 20% of population above sixty years and a colossal 60% of population in the age bracket of 15-59 which is also called as the labor force of the country, India is for certain going to reap the advantage of being the most productive nation. Life expectancy will improve to above 75 years and 19% of population at the age of 60 years will remain actively involved in the labor force. India is already recognized as the low cost producer for most of the goods and services in the world. The time is not away when India will also be known for gigantic production quantities at lowest prices. By some estimates India is already 2 nd largest producer of small cars, auto parts, pharmaceuticals and largest producer of steel in addition India is known as ‘world’s back-office’ with about 44% of global IT and BPO offshore work is done in India (Mohan Ram, Alfred Toma & William Roe, 2006).


Source: - Population Division, DESA, United Nations


17% less then the present. Some other emerging economies shall also continue to enjoy demographic advantages. Countries from Latin America and Africa will also have their population in the productive age group. ‘But their demographic dividends may be inhibited by political and social instability that impedes efforts to put this young population to productive use; a country with massive numbers of unemployed young people and no constructive economic outlet for their dynamism is headed for trouble’ (Strategy +Business, 2010). India on the other hand will have a pool of skilled and trained manpower in addition higher economic efficiency and fiscal sustainability will result in greater utilization of world’s resources. Also India’s strong public and private sector along with its fundamentally stable government will support India in realizing its demographic dividend. However India does have its due share of demographic and other challenges like vast unemployment, mass poverty, low human development, inadequate infrastructure, illiteracy etc. It’s the matter of further research and debate that how India overcomes these limitations. REFERENCES Bhatia, Hitesh (2009), Ageing Economics: Some Indices, VISHLESHAN, A Quarterly Journal of Research and Readings in Economics, South Gujarat University, Vol 34 No 1. Bureau of labor Statistics (2009), Employment Projections: 2008-2018 Summary Chan Angelique (2001), Singapore’s changing Structure and the Policy Implications ….. Asian Metacentre, For Population and Sustainable Development Analysis, National University of Singapore Deloitte (2010) Global Manufacturing Competitiveness Index Fernandez, Jesus and Dirk Kruegar (2002) Consumption over the Life Cycle: Some Facts from Consumer Expenditure Survey Data, Working Paper 9382, National Bureau of Economic Research, Cambridge, Kapila, Uma (2009) India's Economic Development Since 1947, Academic Foundation

Luhrmann, Mmelanie, (2005) Population Ageing and Demand for Goods and Services in Germany, Mannheim Research Institute of Economics and Ageing, University of Mannheim Maxime Fougère and Marcel Mérette (2006), Population Ageing in Canada and Labor Market Challenges, Human Resources and Skill Development Canada. Mohan Ram, Alfred Toma & William Roe, (2006) India and China Vying For World Economic Supremacy, International Business & Economics Research Journal – February 2009 Volume 8, Number 2 113 Strategy +Business, (2010) Preparing for a Demographic Dividend, Issue 59


Khadria, Binod (2006), India: Skilled Migration to Developed Countries, Labor Migration to the Gulf, meme.phpwebhosting.com/~migracion/modules/ve7/2.pdf

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World Population Ageing 1950-2050, (2006) Population Division, DESA, United Nations


TRAINING IN WRITING STRATEGIES TO ENCHANCE TECHNICAL WRITING SKILLS OF OUTGOING B.TECH STUDENTS A CASE STUDY DR. MADHAVI JANAGANI* *Assistant Professor, GITAM University, Hyderabad Campus, Andhra Pradesh, India.

1. INTRODUCTION “Writing is a reflection of your personality and style, a statement of your professional standards. It counts as much as anything else you do” as said by Stephen Wilbers. ESP is classified as EST (English for Science and Technology) EOP (English for Occupational Purpose), EAP (English for Academic Purpose), etc. English for scientific & technical writing is only a part of ESP. In this paper, technical writing which is considered to be a skill of communication is focused much. This writing, in fact, reflects the unique purpose and considerations required in the advancement of science and technology in the form of technical letter writing, technical report writing, technical articles, resume‟,cover letters, etc. Most of the organizations are taking to follow the quality standards laid by national and international bodies. Any documents such as letters, reports, memos, minutes that are to be prepared should meet the quality standards set by the organization. For this, command over English language, especially in writing is required. Henceforth the students show more interest to develop their writing skills by employing various writing strategies. This paper focus on the problems faced by the students while writing and also on various strategies adopted by students to improve their writing skills.It also presents the field study that was carried out in an engineering college pertaining to the training in writing strategies in technical writing; especially to write a resume‟ and a cover letter. According to this the outgoing B.Tech students are divided into two batches of 15 students each. Only one batch will be provided with training in writing strategies. The hypothesis underlying this case study is that the trained batch will perform better than the untrained batch which has been proved.

With rapid globalization and the peak development in science and technology communication systems has begun to play an important role in increasing the international business, particularly IT & ITES across the world. Those appointed for these fields must be proficient in English so as to make effective proposals, presentations, emails, letters, faxes, conferences, meetings, minutes etc. Therefore, the business world demands the best academic preparation to meet today‟s needs and tomorrow‟s challenges. For this most of them are

40

English occupies an important place in the educational system and life of our country. It is an international language, which opens worldwide chances for employment and is responsible for cultural give and take. English forms a window on the rapid progress of technology and scientific knowledge that is constantly taking place in the world.


2. PRESENT STATUS OF ENGLISH IN INDIA


putting their relentless efforts in developing their language skills in English. The study of English in India is important because English is an international language, which opens worldwide chances for employment and is responsible for cultural give and take. English forms a window on the rapid progress of technology and scientific knowledge that is constantly taking place in the world. To quote F.G.French,"Anyone who can read English can keep in touch with the whole world without leaving his own home". The goals and priorities of English education as perceived by the rulers and other „strands‟ outlined above shaped the teaching of English in colonial India; literary texts became the very staple of English teaching representing both models of good writing and the illustration of the grammatical rules of the language. Modern Indian literature is greatly influenced by English literature. It is only through English that Tagore, Gandhi and Nehru have communicated our aspirations to the world outside. The main function of teaching English in India is communicative; the secondary function is for increasing job potential and mobility of students. 3. RECENT SHIFT OF FOCUS FROM THE TEACHER TO THE LEARNER With the spread of general and professional education and a result of the agreement between the European countries in the West, to encourage mutual exchange of professional experts and other employees, the need for teaching or learning foreign languages especially, English has received a special emphasis. Consequently, there has been an unprecedented spurt in the related research activity. A large body of research studies underscored the role of the learner in this context and there was again a concerted effort to identify the needs of the learners. Thus need-based analysis and learner-centered teaching became the major themes of research in the fields of language acquisition-learning or teaching.

4. LANGUAGE LEARNING STRATEGIES “Learning strategy is a choice that the learner makes while learning or using the L2 that effects learning”, (Vivian Cook, 1991). Studies have been generated that look at different aspects of learning strategies and their roles in language learning. Of these the studies by Bialy Stok (1987), Gardner (1985), Holec (1981), O‟Malley and Chamot (1989), Wenden and Ruben (1987) and Oxford, R (1985,1990) are note worthy.

41

Thus, instead of learning the language depending completely on the teachers and his/her own selected methods, it is better to learn the language by applying their own methods seeking a little help from the teacher. Therefore, it is the responsibility of all the teachers in English to train the learners in strategies so that both teaching and learning becomes successfully effective and easy.


Researchers say that the learners must be given a chance and freedom to apply their own ways in learning. This will surely lead to the successful learning of the language. As a result the learners try to find out easy ways, tricks or methods to make their learning easy. These methods or ways employed in learning are otherwise known as strategies. By applying these strategies the learners learn the language perfectly and remain in their memory forever.


4.1 REBECCA OXFORD’S CLASSIFICATION OF STRATEGIES Rebecca L. Oxford (1990) provides a detailed discussion of different languages learning strategies and suggests how these strategies can be applied to the four basic language skills (i.e., LSRW). Rebecca Oxford classifies language-learning strategies into two broad categories: i)

Direct strategies.

2)

Indirect strategies.

The direct strategies are further sub classified into memory strategies, cognitive strategies and compensation strategies whereas the indirect strategies are divided into meta- cognitive strategies, affective strategies and social strategies. Again each of the three in the two broad categories is further divided. This may be shown in a table as follows: DIRECT STRATEGIES

INDIRECT STRATEGIES

a). Memory strategies

a). Meta cognitive strategies:

i) Creating mental linkages.

i). Centering your Learning.

ii). Applying images and sounds.

ii) Arranging and planning

iii) Reviewing well. iv) Employing action.

your learning. iii). Monitoring and evaluating your learning.

b). Cognitive strategies

b). Affective strategies:

i) Practicing.

i). Lowering your anxiety.

ii) Receiving and sending messages.

ii). Encouraging your self.

iii) Analyzing and reasoning. iv) Creating structure for input and

iii) Taking your emotional temperature

i) Guessing intelligently.

c). Social strategies: i) Asking questions.

ii) Overcoming limitations in speaking and writing.

ii) Cooperating with others iii) Empathizing with others.

42

c). Compensation strategies


output


4.2. ADVANTAGES AND FEATURES OF PRACTICING LEARNER STRATEGIES i)

They contribute to the main goal, communicative competence.

ii)

They allow learners to become more self-directed.

iii)

They expand the roll of teachers.

iv)

They are problem oriented.

v)

They are specific actions taken by the teacher.

i)

They involve many aspects of the learners not just the cognitive.

vii)

They support learning both directly and indirectly.

viii)

They are not always observable.

ix)

They are often conscious.

x)

They can be taught.

xi)

They are flexible.

xii)

They are influenced by a variety of factors.

(Rebecca Oxford, pg.9). 5. NEEDS OF INDIAN B.TECH STUDENTS The learner‟s needs may be classified into Academic Needs, Personal Needs and Professional Needs. A) ACADEMIC NEEDS

To read magazines, books etc. for pleasure, to see English movies; to converse with tourists; to write letters to friends, etc. C) PROFESSIONAL NEEDS To carry out one‟s duties and to keep in touch with one‟s profession and know what is happening in the field; it is future need which students are not able to enunciate precisely. At present the learners have to concentrate on reading, writing, listening, and speaking, in that order. If there is a need for rewriting the materials, keeping in mind the needs of the learners, it is also necessary that teachers employ an effective methodology for exploiting these materials in the classrooms so as to maximize the skills the learners need.

43

B) PERSONAL NEEDS


To read subject books, to read instructions to tasks, to read official notices, journal, newspapers, to prepare for entrance examinations as well as competitive examinations to appear in interviews; to write assignments, job applications, to participate in debates, group discussions and quizzes.


Teachers must also effect suitable changes in the examination system to test the skills rather than the product learnt. Although a teacher-predicted-needs-profile cannot be ruled out a situation like ours, learners will have to be given freedom to formulate their own profiles in order to make learning effective. The two types of needs are effective. The two types of needs (those predicted by the teacher and those analyzed by the learner themselves) have been termed as „Objectives‟ and Subjective needs, respectively. In the former, the analyst identifies learners in terms of age, and in the latter, personality, attitudes, wants and expectations, strategies, etc, are identified (see, Nunan, 1988b; Brindley 1989). Both must go meaningful and effective. Mainly himself admits this and he is obviously pleading for a comprehensive analysis of needs (objectives and subjective) that are crucial for designing courses which are learner-entered and communication-oriented (see, Nunan 1988a, 1988b; Brindley 1989; Berwick 1989) 6.0. A MODEL PROGRAMME IN TRAINING LEARNER STRATEGIES In teaching writing strategies a teacher can adopt different methods. The method, which is followed in this study, can be demonstrated as follows. Prepare a short-term study programme for teaching or training in writing strategies in one or two engineering colleges. The learners of second language (L2-English) are divided into two homogenous groups of 15 members each. That is, the learners of both the groups are on par in every aspect such as, age, class, medium, etc. They are i)

A controlled group and

ii)

An experimental group.

At first both these groups are tested. The results are to be compared. The performance of both these groups is found to be more or less same. Later only the experimental group will be provided with training in writing strategies. After a short gap a common test is administered to both the groups and their performances will be compared. The hypothesis underlined this study is that learners trained in using writing strategies will perform better in the examination than those learners (controlled group) who did not receive any training in writing strategies. Primary data will include the details of the proposed experiment and results of the performance of the learners and related works, research articles on writing strategies. Secondary data will be drawn from books, dissertations and articles in journals in the field of English Language Teaching (ELT).

After correction of the responses/answers it was found that the results were not up to the mark. Even the most intelligent student made simple mistakes. From the next day onwards only ECE- A group had been given training in strategies, which were to be employed in the process of writing. The students, then, were asked to discuss their performance in test-1 looking at the corrected papers. The students were suggested of some strategies to be used or followed while writing.

44

As discussed under methodology, the same process has been applied in testing the students regarding the writing skills .The first test was administered for both the groups of ECE- A and B branches on the same day and in successive periods, to assess their writing skills. Neither of them was given any training in strategies.


6.1. LEARNER’S PERFORMANCE


6.2. PROBLEMS FACED BY LEARNERS WHILE WRITING 1. Though the learners of English are highly motivated; their problems seldom involve a lack of ideas to develop the content. 2. They feel difficulty in expressing concepts and ideas in English 3. In spite of having had extensive English grammar study the learners must focus first on content and then approach grammar problems in the context of their writing. 4. Often they fail to distinguish content problems from grammar problems. 5. In the learners writing tasks teachers often find missing parts of speech, verb form errors, missing articles and a lack of connection between words and ideas resulting in a very perplexing paragraph. 6.3. TEACHER’S ROLE IN HELPING THE LEARNERS TO OVERCOME THEIR DIFFICULTIES WHILE WRITING Discuss different cultural views on sources, texts, reference conventions, and plagiarism. Explain what is expected if students want to succeed in that course. Explain how and why questions about texts are asked; encourage students to see question posing as an important academic skill. Explain when to quote, when to paraphrase, when to reference, and when to summarize using examples. Then assign practice summarizing and paraphrasing in the context of the writing assignment. By knowing a few strategies for helping ESL writers, teachers can teach more effectively Students need frequent, guided practice using language in writing. 6.4. SOME OF THESE SUGGESTED STRATEGIES They should make themselves relaxed and comfortable, calm and attentive while the question is read out.

They should realise the purpose of writing. After a gap of ten days, the second test was administered to the experimental group or the trained group ECE-A and the controlled group or the untrained group ECE-B. Later, on correcting the papers of both the groups it was found that the students of experimental group ECE-A improved more than 70% in the second test when compared to the test-1, while the controlled group ECE-B marked up to 45% only. There was hardly any improvement in ECE-B, the untrained group.

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At this moment the teacher must take care that the students are motivated properly so that they can participate actively in the classroom.


And think about the audience who would read their written materials.


7. MATERIALS USED FOR WRITING SKILLS DEVELOPMENT The exercises are designed to help a B.Tech student to master various mechanical and stylistic aspects of engineering and scientific writing. Since the learners are in the completion stage of their graduation they insisted to learn more about writing a better cover letter and resume‟ along with paragraph writing; focusing much on usage of correct grammar and sentence structure.(Appendix-A) 7.1. INTERPRETATION After conducting the first test the performance of the students was not found to be satisfactory. The corrected papers were given back to the students of experimental group only and the exercise was again discussed. The students were asked to follow some of the cues or methods to fill the blanks. The suggested cues were as follows: i)

Find out the tense used in the paragraph after reading it thoroughly.

ii)

Then find out the word in the paragraph to confirm your answer.

iii) Do you think that this paragraph describes a process, which is not time bound? iv)

Find out the subject used here is time bound or not time bound.

v)

Find out whether the sentences of the paragraph are in passive voice or active voice.

The students of the experimental group were trained in the above-mentioned strategies for about a week. During this program the same test i.e. test-1 was conducted and the results were above the average. The students too were showing interest in applying strategies in writing. They also started thinking to find out many more new strategies to employ them in the process of effective learning.

i) In the second line there is a word „becomes‟. This word is a verb and it is in the -------------tense. (Present) ii) When a paragraph describes a process, which is not time bound, then Simple Present Tense forms should be used. Cues 1 and 2 tell that the verbs should be used in simple present form only. iii) See whether the Subject (noun) of each sentence is in the singular or plural form. This is necessary if the actions or situations are related to present time or all times.

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As a result of the cues provided, almost all the students of the experimental group successfully answered the exercise. They used the cues that were discussed with them. Some of these are as follows:


After a gap of ten days another test i.e. test-2 was administered to both the groups. The anticipation of solving the test exercise correctly, efficiently and quickly was found in the students of the trained group rather than the untrained or controlled group. The reason for this sort of behavior is due to the lack of knowledge in applying strategies in language learning.


This tells that „s‟ should be added to the verbs. iv) See if the sentences are in active or passive voice. In the above exercise sentences 1 and 2 are in passive voice because some one „obtains‟ and „produces‟ husk. So the tense forms are „is obtained‟ and „is produced‟. While the sentences 3 and 4 are in active voice. Regarding the second test i.e. test 2, most of the students had been successful in filling all the blanks. The students were asked about the strategies they followed in solving the exercise. They happened to use the following clues: i)

The paragraph‟s actions relating to all times.

ii)

Sentence 3 requiring a noun as a subject for the verb „is‟.

iii)

Sentence 1 requiring an adjective to qualify „radiation‟.

iv)

Only sentence 2 being in the passive voice.

ECE-A showed the score up to 42% before giving training. But after receiving training in strategies they improved and showed a raised score of 40%. Whereas ECE-B scored only 42% in the first test and improved by only 8% in the second test. This group did not receive any training in strategies. (Appendix-D) 7.2. GENERAL STRATEGIES USED IN IMPROVING WRITING SKILLS Sequencing of ideas, use of linkers at right places, writing down the topic sentence clearly, maintenance of unity and coherence of the paragraph, the form of tense used, singular or plural form of the words, etc. are some of the most commonly adopted strategies in writing. The writing strategies in which the training was given, in addition to those, which have been discussed under writing skill development, are as follows: i)

Firstly, learners have to read the question, thoroughly and try to understand what is to be written.

ii) Secondly, the learners have to underline the topic asked and the main words that tell what to write and how to write.

v) Learners have to consider the voice of the sentences; accordingly they have to write the correct form of the words. vi) Students were given training in mastering Spelling and Grammar- the most fundamental basis in any kind of writing good grammar and spelling makes a document readable and highly comprehensible. Students should become familiar with the spelling and grammar for words commonly used in their areas of choice.

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iv) Learners read the whole passage thoroughly and find out whether the given passage is time bound or not. If it is not time bound then simple present tense should be used.


iii) Thirdly, when the perspective is clear then the learners need to proceed for writing. After writing the answer they need to scan it quickly.


Since the present research work was carried out with heterogeneous groups of students of varying degrees of proficiency, some of the strategies worked successfully with some of the students. 7.3. WRITING GUIDELINES FOR ENGINEERING AND SCIENCE STUDENTS Learners were trained to understand the subject matter that they are trying to communicate. They tried to analyze the general idea in terms of writing constraints, viz format of the document, type of audience who read it, etc. Learners learnt to focus on grammar, punctuation, usage and ambiguity (style) to make their documents readable and understandable. Learner must assess the type of audience whether they are professors, managers, engineers, scientists, or technicians? Does the audience know about the subject? Is the document supposed to inform or to convince? Finally, the learner had to consider how his audience would read the report that documented and easily convey the specific information the audience are looking for. Learner should concentrate much on selecting the format: The choice of typeface, the placement of headings, t he method of citing references -these are aspects of format. For longer documents such as reports, format also encompasses the arrangement of information into sections. In engineering and science, there is no universal format. Rather, companies, journals, and courses select formats to serve their particular audiences, purposes, and occasions.

Correspondence to obtain a job is perhaps the most important correspondence that a student does and s/he strongly wish to enhance their skills in writing the same. They should know how to write job letters and résumés. Tone is difficult to control in correspondence. For instance, in a job application letter, the student should learn to how to project his or her accomplishments without sounding boastful? Or in a letter complaining about faulty workmanship, they should learn how to motivate the reader to repair the damage without hurting or abasing the reader? It is, certainly, a difficult task. Henceforth students, engineers and scientists lose control of tone by avoiding simple straightforward wording. Here the students should avoid using difficult phrases, sophisticated vocabulary as these phrases are not natural or straightforward, they inject an undesired attitude, usually arrogance, into the writing.

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In engineering and science, correspondence is an effective way to make requests, submit changes to a job, and deliver specific information. This requires the learner‟s complete concentration on being clear and precise so as to correspond effectively in the form of memos, letters, and electronic mail.


Learner has to focus on the Style; the most important aspect in writing because there is a distinction in scientific writing between format (the way you place the type upon the page) and the style (the way that you express a thought in words and images). Style comprises structure, language, and illustration.


LETTERS Formats for letters vary from company to company. For instance, some formats call for paragraph indents; others don't. The letter should be simple and straightforward. RÉSUMÉS A document that often accompanies correspondence, especially a job application letter, is a résumé. A résumé talks of one‟s education, work experience, and accomplishments. These are essential to decide whether to interview the applicant for a job, or to use to decide whether applicant is qualified to do the proposed work. One‟s best attributes should be highlighted in a resume‟ but in a clear and concise way. The students are advised to use action verbs wherever possible. For example action verbs, such as "designed," "analyzed," "measured," and "managed," put accomplishments in the strongest light. Finally, one should proofread the one‟s resume‟. 7.4. POINTS TO BE CONSIDERED WHILE WRITING Some writing is intended to communicate information to the reader. These purposes include to inform, to explain, to review, to outline, and to describe. Other purposes convince the reader of a particular viewpoint. These include to request, to persuade, to assess, to recommend, to propose, to forecast, and to entertain. The purpose for the writing will affect the selection of content, language, and form. When students can get the “picture” of a form of writing in their heads, they feel more confident about creating the final product. A student needs regular, meaningful opportunities to practice writing in subject-specific contexts.

Prior knowledge about language, subject content, and the world. Gather knowledge of different writing forms and their characteristics. Students should enhance their vocabulary particularly meant for subject specific writing. Adopt and employ strategies to become independent writers in any context.

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Students must be provided with opportunities to talk about their writing.


Students should be trained under those teachers who model the writing process and demonstrate its usefulness.


8. COVER LETTER The letter of introduction is called a cover letter. It is a matter of courtesy that we introduce ourselves when we are requesting something for an interview. A cover letter is addressed to a potential employer. Its sole purpose is to obtain for its author an interview. This fact should shape every aspect of the letter. The Core part of a Cover Letter must consists of any one of the following subjects based on the type of job the learner would like to apply. To work in a globally competitive environment on challenging assignments that shall yield the twin benefits of the job satisfaction and a steady-paced professional growth. To work efficiently and effectively as well as grow with a prestigious organization in field of production, maintenance, and designing. So as to achieve self realization and accomplishment of organizational goals. Seeking a challenging and satisfying career in Web Application Development environment. To work in a creative and challenging environment using cutting edge technologies where i could constantly learn and successfully deliver solutions to problems. To develop my career as a Software Engineer where I will be a valuable team member, contributing quality ideas and work for an organization where there is an ample scope for individual as well as organization growth in Software Design and Development. To be an excellent software professional and move into higher technology areas which provide an environment to improve my technical and analytical abilities. To be in a position in a result oriented company that seeks an ambitious and career conscious person where acquired skills and education will be utilized towards continuous growth and advancement. 8.1. EFFECTIVE STRATEGIES FOR SUCCESSFUL COVER LETTER WRITING

These letters should be brief and simple. Gather information about your target audience i.e. recruiter, potential employer, company for this will help the applicant craft a cover letter that will not only grab attention but will also highlight the best attributes in relation to specific company information. Before drafting a cover letter one should find the answers for the below questions 1)For what position are we applying? 2) How did we learn of the position or company?


A cover letter is required as our introduction when we personally do not meet the hiring personal.

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3) Why are we perfect for the position?


4) Who will contact who? Learner should have a specific call to action in his/her cover letter. Also, be sure to thank the employer for their time and consideration and this would be the closing of the letter. The tone, style and content of the letter should be as important as what the applicant say. Keep it simple, conversational and professional and avoid clichés, creative fonts and designs. Proofread carefully as there is absolutely no excuse for spelling, gr ammar or typing errors. 9.0. RESUME’ The resume‟ presents an outline of the subject's qualifications. The purpose is to highlight features of the subject's background, and to suggest an organized and directed career, or the beginning of an organized and directed career. The information should be arranged from most relevant to least relevant. For this reason, the resumes of most college seniors begin with a description of their education; the resumes of professionals more than a year or two out of college or graduate school begin with a description of their work experience. Recent college graduates sometimes run to two pages. In such cases each page is numbered, alerting the reader to the fact that there are two pages. All resumes are composed of some combination of the following sections. Do not be concerned that the background of the learner cannot supply entries for each section listed here. Few can. In fact, the only section required of all resumes is the first. One list as such is shown below. 1) NAME, ADDRESS, TELEPHONE AND DATE The learner is trained so that he mentions the above categories clearly in his resume. 2)OVERVIEW Many resumes include, below name and address, a one-sentence summary of the subject's background and goals. This assists the employer who must read cursorily and quickly 3) JOB OBJECTIVE

4) EDUCATION Degrees obtained are listed in inverse chronological order — that is, most recent to least recent. The applicant must include degree, institution, and date on which the degree is granted or would be granted. Relevant courses, academic awards and any independent project or specialized area of study should be mentioned. 5) EXPERIENCE


Generally this section is highlighted as "Professional Goal."

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The experience section should include name of position, name of employer and dates of employment. It may be divided into professional or relevant work experience and other work


experience. The most relevant experience to least relevant experience should be cited. 6) AWARDS Any academic scholarships and fellowships, and any honor associated with past or present employment can be included. 7) SKILLS Mentioning these skills would help to showcase areas of expertise or interest which might be hidden in the sections of education or work experience. It also offers a way to make a background not obviously suited to a certain position more appropriate; in so doing, it may demonstrate the applicant's creativity and self-awareness. A skills section may be subdivided into categories like leadership, communication, research, administrative and sales. 8) INTERESTS Many employers seek a balanced personality in their workers, and so are impressed by an interests or activities section which cites participation in each of three types of activity — one professional or academic, one social and one athletic. 9) PERSONAL DATA Applicants can use their discretion to mention their age, sex, marital status, race and religion. 10) REFERENCES The names of three people can be provided as reference. 9.1. JOYCE'S RESUME WRITING TIPS AND SUGGESTIONS: New technology which retains the original document, formatted resumes with embellishments like boldface, italics, fancy fonts and bullets are back in style.

Write it until its right. Think, write, think some more, rewrite, proofread, get feedback and rewrite. Send the resume so it arrives mostly on Tuesday, Wednesday or Thursday. Monday's are busy and Friday's are termination days.

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Choose the resume format wisely which highlights the strengths and hides the shortcomings. The book has a wide selection of templates to choose from to develop your own resume.


It's important to note that the use of online screening before your resume is rated is growing.


Post on specialty web sites. These sites will have more focused job listings. 10.0. TEACHING OF STRATEGIES RELATING TO THE WRITING SKILLS i) The teacher should be careful in selecting the topic of the reading passage for the learners. Because this would be helpful/encouraging for the learners to order their thoughts in a proper way which is useful in writing. ii) Learners should be trained to use connectives in writing, must learn to put their ideas in a sequence, and take care of the tenses. iii) Learners have to read and understand the questions thoroughly. iv)In this direction, they should be asked to underline the topic discussed and the main words that tell what to write and how to write. Thus the learners are helped to be clear in their perspective. v) Learners have to be trained to maintain unity and coherence in their answer. That is, there should be an uninterrupted free flow of ideas in a sequence. vi) After checking their answers the teacher must find out what strategies they employed in solving the task. vii) Provide students with a template to scaffold their understanding of a form of writing and help them organize information before drafting the piece. 11.0. CONCLUSION

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It was found that when a learner is motivated positively and the teacher is only a facilitator, s/he finds a lot of scope to think of new strategies independently and avail the opportunity of using them extensively in their language learning, thus making the language learning easy and effective. English is the key to the storehouse of knowledge. Therefore all teachers should be able to teach English well with the use of different, suitable strategies. The teaching of strategies help the learner to generate ideas and to demonstrate that some imagination can make even evidently unremarkable backgrounds seem tailored for a given position. The learner is strongly recommended to rearrange parts of the résumés to construct their own. This sort of training raises their confidence levels to encounter uncertainties and to think of different ways to communicate and engage an unknown audience; learn to describe what employers expect to see, and want to see, in job application materials. The students need to be so trained that they try to learn the language independently with the aid of effective learning strategies. It must be remembered that helping students to become more aware of their processing strategies means helping them develop their Meta cognitive skills.


In this study, it was found that the students were more concerned with how to learn and write effectively, especially job application materials. They were found interested in the communicative dimensions of language learning as well as the grammar of the language. They were found concerned much with the sentence errors. Also, as a result of the awareness of their purpose of learning English, as a second language, students were more eager to seek opportunities to use English beyond the classroom.


It can be concluded that an awareness and use of the strategies would definitely help the learners to be successful in the L2 class. Theoretical aspects, such as, the various types of strategies and the intensive training in strategies were observed to be affective with respect to the results. Regarding the hypothesis, which said that those who trained in strategies were more successful and performed well in the tasks administered than those who did not receive any training in strategies, it can be said that the hypothesis is valid. Through constant practice in using as well as in acquiring knowledge of strategies, the L2 learners can develop their writing skills and can excel themselves in this regard. REFERENCES Allen, Jo. 1991. “Gender issues in technical communication studies: an overview of the implications for the profession, research, and pedagogy.” Journal of Business and Technical Communication 5: 371-92. Britton, Earl W. "What Is Technical Writing? A Redefinition," College Composition and Communication Vol. 16 (May 1965): 113-116. Barnum, Carol M., and Saul Carliner, eds. 1993. Techniques for technical communicators. New York: Macmillan Publishing Company. Beatty, Richard H. The Perfect Cover Letter. New York: Wiley, 1989. Boles, Richard N. What Color is Your Parachute? Berkeley: Ten Speed Press, 1993. Bostwick, Burdette E. Résumé Writing: A Comprehensive How-to do-it Guide. New York: Wiley, 1976. Britton, Earl W. "What Is Technical Writing? A Redefinition," College Composition and Communication Vol. 16 (May 1965): 113-116. Burnett, Rebecca E. Technical Communication. 2nd. ed. Belmont, CA: Wadsworth Publishing, 1990. Brown,H. 1987. “Principles of Language Learning and Teaching” (2nd ed.), Eaglewood Cliffs, N.J.: Prentice Hall.

Cohen, A. D., & Weaver, S. J.1998. “Strategies-based Instructions for Second Language Learners”. Carver, D.1984. “Plans, Learner-Strategies and Self-direction in Language Learning System.” 12)2). pp.123-131. Corder, S. P.1983. “ Strategies of Communication”. In Faerch,C,and Kasper,G.(eds.), Strategies in Interlanguage, London: Longman.

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Crowther, Karmen N. T. Researching Your Way to a Good Job. New York: John Wiley & Sons, 1993.


Bialystok, E.Blackwell, Oxford. 1990. “Communication strategies”.


Foxman. L.D. The Executive Résumé Book. New York: Wiley, 1989. Guide to Writing Résumés and Cover Letters. Cambridge, Mass.: Placement Office, Harvard Business School, 1991. Kohli, A. L. 1970. “Techniques of Teaching English”. 12th ed. New Delhi: J.C. Kapur, Dhanpat Rai & Sons. Pg. 2-69. Krishnaswamy, N. & Sri Raman, T. “English Teaching in India”.T.R. Publications. pp.43-70. Lippincott, Gail. 1997. “Experimenting at home: writing for the nineteenth-century domestic workplace.” Technical Communication Quarterly 6: 365-80. Lakshminarayanan, K.R.1999.”A Textbook on Effective Technical English”.Chennai: Scitech Publications. pp.20-22 Lewis, Adele Beatrice. Better Résumés for College Graduates. Woodbury, NY: Barron's Educational Series, 1985. Lewis, Adele Beatrice. The Best Résumés for Scientists and Engineers. New York: Wiley, 1988. Mitchell, John H. "Professional Educators as Communications Consultants." Journal of Technical Writing and Communication, Vol. 9(1), 1979. Markel, Michael H. Technical Writing Situations and Strategies. 3rd. ed. New York: St. Martin's Press, 1992. Mowla, Dr. Shaik.2001. “The Techniques of Teaching English”. New Delhi: Neelkamal Publications. pp. 1- 25. Nunan,D. 1988. “The Learner-Centered Curriculum”. Cambridge University Press. Oxford.R.L. 1990.”Language Learning Strategies: What Every Teacher Should Know”, New York: Newbury House/ Harper & Row. Pp.16-21.

Rubin, J. 1981. “Study of Cognitive Processes in Second Language Learning”, Applied Linguistics,11,pp.117-131. Rubin, J., & Thompson, I.1982. “How to be a More Successful Language Learner”. Boston: Heinle & Heinle. Subba Rao, A. “Learner Strategies: Implications For Learner-Centered Teaching in E.L.T.--- A Handout”.

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Richards C. Jack& Renandya A. Willy (Ed.). 2002. “Methodology in Language Teaching: An Anthology of Current Practice”. Cambridge University press.


Oxford, Rebecca. 1992. “Research on Second Language Strategies”, Annual Reviews of Applied Linguistics, pp.188-205.


Subramaniam, T.K.& et.al.2001. “A Textbook of English for Engineers and Technologists”. Orient Longman Limited. pp. 61- 62. Tickoo, M.L. 2003.”Teaching and Learning English- A Source Book for Teachers and TeacherTrainers”. Orient Longman. Wenden, A.L., & Rubin, J. 1987b. “Learning Strategies in Language Learning”. Prentice Hall: Eastwood Cliffs, N.Y. OTHER RECOMMENDED SOURCES Atwell, Nancy. (1998-revised 2nd edition). In the Middle: New Understandings about Writing, Reading, and Learning. Portsmouth, NH: Heinemann. Bauman, Amy and Art Peterson, eds. (2002). Breakthroughs: Classroom Discoveries about Teaching Writing. Berkeley, CA: National Writing Project. Bazerman, Charles. Shaping Written Knowledge. Madison: The University of Wisconsin Press, 1988. Claggett, Fran. et.al. (2005). Teaching Writing: Craft, Art,Genre. Urbana, IL: NCTE. Dean, Deborah. (2006). Strategic Writing: The Writing Process and Beyond in the Secondary English Classroom. Urbana, IL: NCTE. Evered, David & Maeve O'Connor eds. Communicating Science to the Public. Chichester, UK: John Wiley, 1987. Gere, Anne Ruggles, L. Christenbury, and K. Sassi. (2005). Writing on Demand: Best Practices and Strategies for Success. Portsmouth, NH: Heinemann. Kuhn, Thomas. The Structure of Scientific Revolutions. 2nd ed. Chicago: University of Chicago Press, 1970. Nelkin, Dorothy. (ed.) Controversy: Politics of Technical Decisions. 2nd. ed. Beverly Hills, CA: Sage, 1984.

INTERNET SOURCES http://www.faculty.english.vt.edu/Collier/stc/ch4pt2.htm www.writingproject.org www.ncte.org www.ReadWriteThink.org www.stepuptowriting.com http://freshersworld.com/resume/sample.htm


Strong, William. (2005). Write for Insight: Empowering Content Learning, Grades 6-12. New York, NY: Allyn and Bacon.

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http://www.tesol-journal.com


SELF HELP GROUP- (SHG) BANK LINKAGE SYSTEM IN MICROFINANCE DR. SADYOJATHAPPA. S* *Assistant Professor, SSA Govt. First Grade College, Bellary, karnataka - 583201.

INTRODUCTION The Self-Help Group (SHG) movement is a noble mission on the lines of the microfinance movement which originated in Bangladesh under the Leadership of Noble Laureate Mohamed Yunus. The innovative concept, that has roots in Bangladesh, has touched every part of the globe. In order to achieve the mission of reaching those families who did not have access to credit by any formal financial institution and, therefore, were dependent on informal sources and moneylenders, the National Bank for Agriculture and Rural Development (NABARD) introduced the “SHG-Bank Linkage Programme” as a pilot project in 1992. The Reserve Bank of India (RBI) had then advised commercial banks to participate actively in this programme. Subsequently, the programme was extended to all Regional Rural Banks (RRBs) and cooperative banks. The SHG-Bank Linkage Scheme has the following objectives: 1. Develop mutual faith and confidence between bankers and rural poor, 2. Expand credit flow to the rural poor with less transaction costs. 3. Combine flexibility, sensitivity and responses of the informal credit system with the strength of technical and administration capabilities and the financial resources of formal financial institutions. WHAT IS SHG?

SHGs may or may NOT be registered.



Number of members is between 10-25. But, for irrigation projects there is no upper ceiling.



One person from one family can become a member.



There are regular weekly or fortnightly meetings.



These members save the amount and this amount is used as loans.

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


Self Help Groups means a group which represents a financial intermediation, but the financial intermediation is not the only primary objective of the groups. The idea is to combine the access to low-cost financial services with a process of self management and development. They are usually formed and supported by NGOs or Government agencies.


WHAT IS SHG BANK LINKAGE PROGRAMME? The Self-Help Group-Bank Linkage Programme (SBLP), which started as a pilot programme in 1992 has developed with rapid strides over the years. SHG-Bank Linkage Programme was started on the basis of recommendation of S K Kalia Committee. MODELS OF SHG-BANK LINKAGE PROGRAMME SHG MODEL The strategy involved in this model is that of forming small, cohesive and participative groups of the poor, encouraging them to pool their savings regularly and using the pooled savings to make small interest bearing loans to members and, in the process, learning the nuances of financial discipline. Subsequently, bank credit also becomes available to the group to augment its resources for the purpose of lending to its members. The SHG-bank linkage program has proved to be the major supplementary credit delivery system with a wide acceptance by banks, NGOs and various government departments. There are three models of SHG-bank linkages that have evolved over time, especially in India. MODEL I: SHGS FORMED AND FINANCED BY BANK

Bank Linkage

SHGs

NGOs

In this model, banks themselves take up the work of forming and nurturing the groups, opening their savings accounts and providing them bank loans. Up to March 2006, 20% of the total number of SHGs financed were from this category. This showed an increase of 61.63 per cent in bank loan to SHGs over the position as on March 05, reflecting an increased role of banks in promoting and nurturing SHGs.

NGOs

Promotions Training & Credit Support

SHGs

This model continues to have the major share, with 74 % of the total number of SHGs financed up to 31 March 2006 falling under this category. Here, NGOs and formal agencies in the field of microfinance act only as facilitators. They facilitate organizing, forming and

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Bank


MODEL II: SHGS FORMED BY NGOS AND FORMAL ORGANISATIONS, BUT DIRECTLY FINANCED BY THE BANKS


nurturing of groups, and train them in thrift and credit management. Banks give loans directly to these SHGs. MODEL III

Bank

Promotion Credit support

SHGs

SHG Members

In the model iii, banks take sole responsibility for promoting, developing, and financing SHGs. This programme requires considerable effort by the banking staff towards SHG formation. This model is not an encouraging one and only 8% of SHGs follow this model. CURRENT STATUS OF SHG-BANK LINKAGE PROGRAMME In 2009-10, 1.59 million new SHGs were credit-linked with banks, and bank loan of 14,453 crore (including repeat loan) was disbursed to these SHGs. Further, at end-March 2010, 6.95 million SHGs maintained savings accounts with banks. On an average, the amount of savings per SHG was 8,915 as compared to the amount of credit outstanding of 57,795 in 2009-10. While there was a continued increase in the amount of credit outstanding per SHG, there was a fluctuating trend in the amount of saving per SHG in the recent years. EXHIBIT 1: NOTABLE COMPARATIVE FEATURES OF SHGS AT A GLANCE

B.SHG Formation

Conceived as organizing generally poor people to address their common problems with voluntary thrift supported by bank loans and helping them imbibe the essentials of financial intermediation.

Conceived as a holistic programme of self-employment. It covers all the aspects of self employment of the rural poor, viz. organizing them in SHGs, their capacity building selection of key activities, planning of activity clusters, infrastructure build-up, technology and marketing support. SHG members are generally Specifically SHG members from from poor families BPL families with some exception for a few marginal APL families if acceptable to the BPL members of the group. Group size of about 15 persons Group size of 10-20 persons, with the exception of deserts, hills and disabled persons where the number of members may vary from 5 to 20.


A. Strategy

NABARD SHGs - Under SGSY Guidelines

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SHGs - Under Guidelines


60

SHGs may be formed with all Special focus on the formation of women members also. exclusive women Self-Help Groups.50% of the groups formed in each block should be exclusively for women. SHGs are generally formed by SHGs are normally formed by NGOs, banks, NGOs, Farmers’ Clubs CBOs, Animators, Network of and IRVs. Community-based Coordinators, or team of dedicated functionaries of the government. C. IncomeSHG members are free to choose SGSY Committee identifies about 10 Generating their income-generating farm and non-farm key activities per Activities activities without any block for the individual/SHG Swarozgar (Micro precondition. is of the block to choose some of them enterprise as the sustainable income generating selection) activity for themselves. Income- generating activity is Primarily, single income-generating normally taken up by individual activity by the group is given preference members. under group loan. Group, however, may go for multiple activities also under group loaning. Thus, IGAs are taken by the SHG members as a group activity or by individual Swarozgar is independently. There is no activity cluster The focus is on the development of approach for selection of IGAs activity cluster to facilitate forward and by the SHG members. backward linkages to IGAs. D. Promotional There is no direct financial Revolving Fund Assistance (RFA) is Support assistance to SHGs. provided to groups equal to their group corpus within the prescribed limit. (i) Financial Back-ended subsidy to the extent of Support 30% to 50% of the project cost is provided to individual beneficiary, and 50% of the project cost for group level activity is provided within the prescribed limits. (ii) Group Maximum Grant Assistance of Financial Assistance is provided to Formation and Rs.2, 000 is provided as a group NGOs/CBOs/SHPI, etc., for formation Nurturing building support for promotion and development of SHGs, as Support and linkage of one SHG. mentioned below. � Rs10,000 per SHG is paid for the formation and development of SHGs in four installments. � 1st – 20% at the beginning of the group formation. � 2nd – 30% when group qualifies for Revolving Fund. � 3rd – 40% when group takes up economic activity. � 4th --10% after the start of economic


Vol.1 Issue 2, Nov 2011, ISSN 2249 8826 Online available at http://zenithresearch.org.in/


(iii) Capacity Building Support (iv) Infrastructure Building Support

activity and on adherence of group to repayment of bank loan. Fund support is provided for Fund support is made available to conducting/sponsoring various organize training of beneficiaries in types of training programmes for group processes and skill development. group members There is a conceptual focus. There is planned focus on infrastructure build- up, technology and marketing support to make self-employment activity economically sustainable.

ADVANTAGES OF SHGs The methodology behind micro-credit through SHGs involves collective wisdom of the poor, the organizational capabilities of the social intermediary and the financial strengths of the banks. The advantages of this methodology are elaborated in the following sections:  Peer group monitoring- The group members have the incentive of monitoring each other to ensure timely repayment f the loan and to avoid any potential social sanction in the event that any member defaults on repayment.  Peer pressures-Microfinance institutions (MFIs) use social collateral in the form of peer groups in ensures loan repayment. Borrowers take loans in groups of five to eight individuals. If a borrower defaults on loan repayment, the entire group typically is penalized and some times barred altogether from taking further loans. This peer pressure encourages borrowers to very selective about their peer group members and to repay loans in full, on time, resulting in a higher than 95% repayment rate industry-wide.  Compulsory saving mobalisation: the SHGs encourage group savings as collateral substitute for the loan.  Weekly meets- These meetings reinforce a culture of discipline routine repayments, and accountability among the borrowers.

 Homogeneous and affinity in groups- Generally, these groups are formed by people belonging to the same caste, religion, tribe, gender, age or community- thus having a social bond amongst themselves and making it’s solidarity group.  Joint liability- The joint liability concept means that SHGs should be formed with like minded people who would voluntarily take up joint liability for the group or individual’s loans. In this, the group offers a joint undertaking which enables them to avail a loan from the bank.


 Voluntary group formation- These groups are voluntarily formed by the borrowers so there is no possibility of any adverse selection problem arising. Micro-credit generally uses self-selected groups of borrowers, who guarantee each other’s loans.

61

PROGRESS OF THE PROGRAMME: The NABARD introduced SHG-Bank linkage to discard the general perception of bankers that customers with no formal education or source of income or of no use to the bank and thus are not welcome. The SHG-Bank Linkage progromme


is an effective way of providing credit to very small borrowers. Statistics show that since the year 2000, the rate of growth in SHGs linked under the programme is gradually falling in the year 1999-2000 this growth rate more than 245% whereas it fell below 38.3% in 2005-06. However, the higher growth in the late nineties may be due to initial penetration of SHGs under the programme. Yet there is considerable scope for formation of new SHGs and it should be worked upon. CHART-1: PERCENTAGE GROWTH IN NUMBER OF SHGS LINKED UNDER SHGBANK LINKAGE PROGRAMME 300 250 200 150

Series1

100 50 0 199900

200001

200102

200203

200304

200405

200506

Source: Report on Trend and Progress of Banking in India, 2007-08. The cumulative number of SHGs linked with banks increased sharply from 255 in 1992-93 to 461,478 in 2002-03 and further to 2924973 in 2006-07. During this period the cumulative loans disbursed to SHGs also witnessed a sharp increase from INR 0.29 crores in 1992-93 to INR 1026.34 crores in 2002-03 and further to INR 18040.74 crore in 2005-06. TABLE1--: CUMULATIVE PROGRESS OF SHG-BANK LINKAGE PROGRAMME

Year

SHGs linked

Bank loan

Refinance Assistance

1992-93

255

0.29

0.27

1995-96

4757

6.06

5.66

1999-00

32995

57.07

52.06

2002-03

461478

1026.34

790.24

2005-06

2238565

13975.43

4153.83

2006-07

2924973

18040.74

5446.49

2007-08 (provisional)

3477965

22268.32

7061.99


(INR IN CRORES)

62

Source: NABARD Annual Report 2007-08.


Table--1 shows the cumulative progress in this area with the amount of refinance assistance during the respective periods. The growing role of SHGs through unique processes of socioeconomic engineering is also important. So far, the SHG movement in the country is mostly south-centric and it is yet to take off in the real sense in other regions of India. TABLE—2 SHG – BANK LINKAGE CUMULATIVE PROGRESSIVE (1992-2006) Up to end March

SHGs Financed

Bank Loan (Rs. Million)

1992-99

32995

571

1999-00

114775

1930

2000-01

263825

4809

2001-02

461478

10263

2002-03

717360

20487

2003-04

1079091

39042

2004-05

1618456

68985

2005-06

2238565

113975

Source: NABARD Annual Report. As may be seen from Table – 2, the bank loans aggregating Rs.113,975 million were disbursed to 2,238,565 SHGs with refinance support of Rs. 41,597 million from NABARD, up to 31 March 2006. Around 90 per cent of the SHGs linked were exclusive women SHGs. Various studies revealed that the on-time repayment of SHG loans to banks was over 90 per cent.

SHGs Number (000’s)

Bank Finance Amount (INR in crores)

Commercial Banks

572

52

3919

60

RRBs

381

34

2053

31

Co-operative Banks

153

14

599

09

Total

1106

100

6570

100

Source: Report on Trend and progress of Banking in India, 2007-08. Today, the SHG-Bank linkage programme led by NABRAD in India claims to be the largest and fastest growing micro credit of the world with over 11 million poor households accessing micro-credit through their over 11 lakhs SHGs with the association of over 2800 NGOs and 30000 branches of 500 banks. NABARD has set up the Microfinance Development Fund in

63

Agency


TABLE—3 AGENCY WISE DISTRIBUTION OF SHGS FINANCED UP TO MARCH 31, 2007


2001 with a corpus of INR 100 crores which in now renamed as Micro-credit Development and Equity Fund since 2005 with an increased corpus of INR 200 crores. This fund has been set up to address institutional and delivery issues like institutional growth and transformation, governance, accessing new sources of funding, building institutional capacity and increasing volumes and to support the following activities of SHGs. 

Give training and exposure to SHG members, partner NGOs, Banks and government agencies.



Provide start-up to micro-credit institutions and meet their initial operational deficits.



Bear the cost of formation and nurturing of SHGs.



Design new delivery mechanisms.



Promote research, action research management dissemination of best practices in micro-credit.

information

systems

and

CONCLUSION Microfinance has emerged as a vital approach to meet the heterogeneous needs of the poor. In India, microfinance in the formal sector has assumed the form of SHG-bank linkage program. Through this program, the Reserve Bank of India and NABARD have tried to promote relationship banking, i.e., “Improving the existing relationship between the poor and the bankers with the social intermediation of the NGOs.” The SHG-bank linkage program in India is rapidly expanding its outreach under the pioneering initiative of NABARD, the monitoring and supervision of RBI, and the promotional policies of the government of India. At the grass root level the program is being implemented by the commercial banks, cooperatives, and regional rural banks, with government agencies. Pro-activeness of the rural folk and artisans is need of the Hour.

Reserve Bank of India

RRBs:

Regional Rural Banks

SHPI:

Self Help Group Promoting Institution

SHGs:

Self Help Groups

SGSY:

Swarnajayanti Grameen Swarozgar Yojana

MFIs:

Microfinance institutions

MYRADA:

Mysore Resettlement and Development Agency

NABARD:

National Bank for Agriculture and Rural Development

NGO:

Non Governmental Organizations

BPL:

Below Poverty Line

64

RBI:


ABBREVIATIONS


APL:

Above Poverty Line

RFA:

Revolving Fund Assistance

CBO:

Community Based Organisation

IGAs:

Income Generating Activities

IRV:

Individual Rural Volunteers

REFERENCES 1. NABARD Annual Report 2007-08. 2. Report on Trend and Progress of Banking in India, 2007-08. 3. Sheokand, S. M. (2000). Reorienting banking with the poor: The SHG bank linkage way. In K. Basu & K. Jindal (Eds.), Microfinance emerging challenges. Tata McGraw Hill Publications. 4. Chandrashekar, T.C. "Economic Performance of Micro Finance in India", 2007 5. George, M. "A Primer on Microfinance in India", [access on 16 July 17, 2009]

65


6. Ghorude, K.N. "Micro Finance for Financial Inclusion and Sustainable Rural Development", Southern Economist, vol-48, No-1, May 1, 2009


IMPACT OF SERVICE QUALITY, CUSTOMER SATISFACTION AND TRUST ON CUSTOMER LOYALTY: A STUDY WITH SPECIAL REFERENCE TO TELECOMMUNICATION COMPANY IN MADHYA PRADESH (INDIA) SATENDRA THAKUR*; DR. A. P SINGH** *Assistant professor, Department of Management, RKDF Group of Institute, Gandhi Nagar, Bhopal. **Director, Maharana Pratap College of Management, Bhopal.

ABSTRACT In this research article we have discussed about the impact of service quality, customer satisfaction, and trust on customer loyalty in major telecommunication company operating in Madhya Pradesh. Data has been collected from 248 subscriber customer of the company. The result of the study indicate that customer satisfaction is significantly and positively related with customer loyalty, customer satisfaction is to be found important mediator between service quality and customer loyalty, A clear understanding of the postulated relationships among the studied variables might encourage the mobile service provider(s) to figure out appropriate course of action to win customers satisfaction by providing better services in order to create a loyal customer base. KEY WORDS: service quality, customer satisfaction, customer loyalty and trust. __________________________________________________________________________

66

In the past three decades, due to liberalization and privatization the telecommunication industry has become a dynamic service industry subject to increased competition with huge growth potential. Due to the competition the strategic behavior of telecommunication has attract so much attention in recent years, both in the rural and urban area. Currently the number of telecommunication company in Madhya Pradesh is eight (seven private and one Govt.); but the aggressive competition has forced the incumbent telecommunication company or mobile operators to reconfigure their strategy and business to sustain or improve there competitive advantage. In this emerging market customer are not loyal to one particular private telecommunication company, hence the major private telecommunication forced consider how to create loyal customer base. There for all the telecommunication company must realize the necessity of studying and understanding various antecedents (such as service quality, switching cost, trust, corporate image, and customer satisfaction) for developing loyal customer base. The objective of this study is to analyze a conceptual framework empirically that considers the interrelationships of customers‟ perceived service quality, trust, and customer satisfaction and customer loyalty in the context of a group of customers of a major private telecommunication company in Madhya Pradesh


INTRODUCTION


REVIEW OF LITERATURE SERVICE QUALITY Service quality has become as one of the key driving forces for business sustainability and is crucial for firms‟ accomplishment (Rust and Oliver, 1994) [52]. Hence; many research activity on service quality has been conducted out worldwide. The development of the original 22item SERVQUAL instrument by Parasuraman (1985, 1988, and 1994) [39,40,41].It has provided researchers with the possibility of measuring the performance expectations gaps composed by five determinants knows, reliability, responsiveness, empathy, assurance and tangibility. Rust and Oliver (1994)[52] has given three component model including service quality, service product service delivery to investigate service quality but not many researcher has used it whereas service product allude the technical quality, service delivery allude functional quality and service environment indicate internal and external. Rust and Oliver (1994) [52] have not tested their conceptualization but support has been found for related models in retail banking and health care samples (Mc Alexander, Kaldenberg and Koenig 1994). Furthermore, Kotler and Amstrong (1999) [24] stated, “A service firm‟s ability to hang onto its customers depends on how consistently it delivers value to them”. Satisfaction is a person‟s feeling of the pleasure or disappointment arising from comparing products perceived performance in relation to expectation. The connection between customer satisfaction and future intentions has been identified. Customer satisfaction is believed to be associated with fruitful customer behavior from the firm‟s point of view. A number of empirical studies did indicate a link between service quality and satisfaction (e.g., Fornell, 1982; Taylor and Baker, 1994) [17, 58]. CUSTOMER SATISFACTION

Customer loyalty is not always easy to construe and many definitions have been proposed. Let's first settle what customer loyalty is not (Prus & Brandt, 1995) [44]: Customer loyalty is not customer satisfaction. Satisfaction is a necessary but not sufficient criterion. We know that "very satisfied" to "satisfied" customers sometimes switch to competitors. Customer loyalty is not a response to trial offers or incentives (Cronin & Taylor1992, Prus & Brandt, 1995) [13, 44] Customers who react to incentives are often highly disloyal and they often leave as fast as they came. They are very much inclined to respond to a competitor's incentive. Customer loyalty is not a strong market share. High level of market share can also be influenced by other factors such as poor performance by competitors or price issues. Customer loyalty is not repeat buying or habitual buying. Some of your consumers choose

67

CUSTOMER LOYALTY


Customer satisfaction is the primary mental state of customer which comprise by two thing (1) expectation before purchase (2) perception about performance after purchase (Oliver 1997,, Westbrook & Oliver 1991)[36,60]. However, according to Levesque and McDougall (1996) [27] satisfaction is conceptualized as an overall, customer attitude towards a service provider. Similarly, Andreessen and Lindestad (1998) claimed that customer satisfaction is the accumulated experience of a customer‟s purchase and consumption experiences. It was therefore; client satisfaction construct in this paper will be measured through overall satisfaction toward the services. In the satisfaction literature, customer satisfaction usually refers to the latter type of outcome. Moreover, this mental state, which we view as a cognitive judgment, is conceived of as falling somewhere on a bipolar continuum bounded at the lower end by a low level of satisfaction (expectations exceed performance perceptions) and at the higher end by a high level of satisfaction (performance perceptions exceed expectations).


your products because of convenience or habits and they can be tempted to defect for any reason. Prus & Brandt, 1995 then describe customer loyalty as follows: "Customer loyalty is a composite of a number of qualities. It is driven by customer satisfaction, yet it also involves a commitment on the part of the customer to make a sustained investment in an ongoing relationship with a brand or company (Zeithaml, Berry, &Parasuraman, 1993) [66]. Finally, customer loyalty is reflected by a combination of attitudes (intention to buy again and/or buy additional products or services from the same company, willingness to recommend the company to others, commitment to the company demonstrated by a resistance to switching to a competitor) and behaviors (repeat purchasing, purchasing more and different products or services from the same company, recommending the company to others)". TRUST In business trust is viewed as one of the most relevant antecedents of stable and collaborative relationships. Researchers had established that trust is essential for building and maintaining long-term relationships (Rousseau, Sitkin, Burt, & Camerer, 1998; Singh & Sirdeshmukh, 2000, Morgan and Hunt (1994) [51, 54, 31] stated that trust exists only when one party has confidence in an exchange partner‟s reliability and integrity. While defining trust Moorman, Deshpande, & Zaltman, 1993) [30] referred to the willingness to rely on an exchange partner in whom one has confidence. if one party trusts another party that eventually engenders positive behavioral intentions towards the second party. From Anderson and Narus (1990)[03] it can be safely deduced that if one party believes that the actions of the other party will bring positive outcomes to the first party, trust can be developed. Doney and Cannon (1997)[15] added that the concerned party also must have the ability to continue to meet its obligations towards its customers within the cost-benefits relationship; so, the customer should not only foresee the positive outcomes but also believe that these positive outcomes will continue in the future. The definition provided by Morgan and Hunt (1994) [31] has been used for this study. SERVICE

QUALITY

AND

CUSTOMER

Over the past few years there has been a heightened emphasis on service quality and customer satisfaction in business and academia alike. Sureshchandar et al, (2003) identified that strong relationships exist between service quality and customer satisfaction while emphasizing that these two are conceptually distinct constructs from the customers‟ point of view. Spreng and Mackoy (1996) [56] also showed that service quality leads to customer satisfaction while working on the model developed by Oliver (1997) [36]. In a recent study conducted by Ribbink et.al (2004) [48] revealed that this relationship also exists in the ecommerce industry. Consistent with these findings, the researchers have hypothesized the following: RELATIONSHIP BETWEEN SERVICE QUALITY AND CUSTOMER LOYALTY In various studies the relationship between service quality and customer preference loyalty had been examined (Boulding, Kalra, Staelin, & Zeithaml, 1993; Cronin & Taylor, 1992) [08, 13] . In their study Cronin and Taylor (1992) focused solely on repurchase intentions, whereas Boulding et al. (1993) [08] focused on the elements of repurchasing as well as the willingness to recommend. In the study by Cronin and Taylor service quality did not appear to have a significant (positive) effect on repurchase intentions (in contrast to the significant positive impact of satisfaction on repurchase intention), whereas Boulding et al. (1993) [08] found


BETWEEN

68

RELATIONSHIP SATISFACTION


positive relationships between service quality and repurchase intentions and willingness to recommend. Therefore, following hypothesis has been proposed: RELATIONSHIP BETWEEN TRUST AND CUSTOMER LOYALTY A number of researchers have advocated that trust is fundamental in developing customer loyalty (Moorman, Deshpande, & Zaltman, 1993; Morgan & Hunt, 1994) [30, 31]. The importance of trust in explaining loyalty is also supported by authors like Lim and Razzaque (1997) [28], Garbarino and Johnson (1999) [19],, Singh and Sirdeshmukh (2000)[54],. However, in a market with suitable alternatives lack of trust might lead to negative loyalty. Corbitt, Thanasankit, and Yi (2003)[11] have pointed out that a strong positive effect of trust on customer loyalty in case of telecommunications sector. Therefore, following hypothesis has been formulated: RELATIONSHIP BETWEEN CUSTOMER SATISFACTION AND CUSTOMER LOYALTY Several authors have found a positive correlation between customer satisfaction and loyalty (Anderson & Sullivan, 1993; Bolton & Drew, 1991 ;) [02,09,]. Numerous studies in the service sector have also empirically validated the link between satisfaction and behavioral intentions such as customer retention and word of mouth (Anderson & Sullivan, 1993; 1999; Cronin & Taylor, 2000)[02,13] Hart and Johnson (1999)[20] have added that one of the conditions of true customer loyalty is total satisfaction. Hence, the researchers have hypothesized The following: OBJECTIVE OF THE STUDY 1. To identify the service quality dimension and there priority 2. To determine the strength of relationship between service quality, customer satisfaction, trust and customer loyalty

4. To describe customer satisfaction work as a mediator between service quality and customer satisfaction 5. To analyze the service rendered by telecommunication company customer RESEARCH METHODOLOGY HYPOTHESIS H1: Customers‟ perceived service quality has a positive effect on Customer Satisfaction. H2: Customers‟ perceived service quality has a positive effect on customer loyalty.


3. To measure the customer satisfaction, trust and customer loyalty of the telecommunication company

69

H3: Trust has a positive effect on customer loyalty.


H4: Customer satisfaction has a positive effect on customer loyalty METHODOLOGY DATA COLLECTION In order for the research to produce a realistic outcome, the collation of data has to be distributed over a large population. Thus, the survey questionnaires are designed to apply to a heterogeneous population, where targeted respondents come from the general open public Owing to the fact that different levels of the society have different expectations and needs, therefore, the idea of choosing respondents from different backgrounds will most certainly generate a more reliable outcome towards Service Quality by Telecommunication Company. SAMPLE Due to the constraint in obtaining necessary information about the population element this study utilized sampling technique according to the information data has been collected from 248 subscribe of the major private telecommunication of Madhya Pradesh , the average age of the respondents was 29 years RESULT AND DISCUSSION Through Data, this study was analyzed after collecting from all respondents and illustrated in the form of table and bar charts. There were only 248 sets of questionnaires that were answered by the respondents who were customer of particular private telecommunication company data analysis is important for researcher for develop the reliability test, frequency distribution, Pearson correlation, descriptive analysis and regression

Frequency

Percentage

Company representatives

42

16.86

Own Business

25

10.04

Personal Business

159

63.85

Agent

28

11.24

Others

13

5.22

Table 1: indicate that personal business represented that biggest percentage of 63.9, percentage followed by company representative 16.9percentage, agent 11.2 percentage, own business 10.04 and others 5.2 percent

70

Occupational Sector


TABLE 1: FREQUENCY DISTRIBUTION


TABLE 2: RELIABILITY ANALYSIS Variable

Cronbach’s Alpha

No. Of item

Customer Loyalty

5

0.737

Customer satisfaction

5

0.873

Service quality

5

0.872

Trust

5

0.815

n= 248 Table 2: indicates alpha for all variable are more then 0.70, which indicate suitability of the construct in terms of occupational sector TABLE3: MEAN AND STANDARD DEVIATION

Maximum

Mean

S.D

Customer Loyalty

1

5

3.37

0.72


1

5

3.47

0.83

Service quality

1

5

3.42

0.81

Trust

1

5

3.69

0.74

Table 3: shows the means and standard deviations for the 4 study variable overall, all the variable means are above the mid point of 3. The means ranged from 3.69 for trust to 3.37 for customer loyalty


Minimum

71

Variable


TABLE 4: INTERCORELATION Variable

1

2

3

4

Customer Loyalty

-

.30*

.24**

.20**


-

-

.80**

.71**

Service quality

-

-

-

.81**

Trust

-

-

-

-

The result of the correlation analysis presented in the table4 show that the customer loyalty is related with customer satisfaction (r=. 30, p χ² 9.09

Hence, communication of the Govt. with the MSME‟s is not satisfactory 5.4: Opinion on the adequacy of the existing communication channels between the Government and MSME’s

No. of Respondents

%

Sufficient

12

17

Insufficient

40

58

Can't Say

17

25

166

Opinion


TABLE 5.4: ADEQUACY OF THE EXISTING COMMUNICATION CHANNELS BETWEEN THE GOVERNMENT AND MSME’S


%

100 80

No. of Respondents

58

60 40

17

20

25

40

17

12

0 Sufficient

Insufficient

Can't Say

CHART 1.4: ADEQUACY OF THE EXISTING COMMUNICATION CHANNELS Out of the total surveyed MSME‟s, 58% (n=40) reported that there is insufficiency with regard to the existing communication channels among the Government and the small scale industries. The lack of communication infrastructure and of a similar business network has been recognized as a drawback by Kotelnikov (2008) as also by MSME‟s. However, 25% (n=17) reported that they can‟t say and the remaining 17% said there is sufficiency in the communication.

5.5: TO WHAT EXTENT WILL THE GOVERNMENT’S PROMOTION ON THE USE OF TECHNOLOGY HELP MSME’S?

No. of Respondents

%

A lot help

31

45

Not much help at all

29

42

Not Sure

9

13

167

Opinion


TABLE 5.5: GOVERNMENT’S PROMOTION ON THE USE OF TECHNOLOGY HELPS MSME’S


80 70 60 50 40 30 20 10 0

45

42

31

13

29

9 A lot help


Not Sure

No. of Respondents

%

CHART 1.5: GOVERNMENT’S PROMOTION ON THE USE OF TECHNOLOGY HELPS MSME’S The enterprises (45%; n=31) were of the opinion that if the Government‟s promotion on the usage of the technology would help the small scale industries a lot. Whereas, 42% enterprises said not much help would be availed and just 13% (n=9) said they are not sure. 5.6: SUBSIDIES BY THE GOVT. FOR TECHNOLOGY USAGE

Opinion

Observed Frequency (O)

1

Very Interested

35

30

5

25

0.83

2

Interested

25

21

4

16

0.76

3

Not much interested

1

7

-6

36

5.14

4

To some extent

3

8

-5

25

3.13

O-E

(O - E)2 (O - E)2/ E

168

S. N

Expected Frequency (E)


TABLE 5.6: SUBSIDIES BY THE GOVT. FOR TECHNOLOGY USAGE


5

Can't Say

5

3

Total

69

69

2

4

1.33 11.20

Table Value χ² 0.05 for d.f. 4= 9.48 Test is accepted

At 95% confidence level, the critical value obtained from the chi –square test is χ² 0.05, 4= 9.48 , χ² is calculated as 11.20 which is more than the tabular value. Hence test is accepted and null hypothesis is rejected. χ²

0.05, 4

9.48 < χ² 11.20

Hence, Govt. provides adequate subsidies for the technological up-gradation to various MSME‟s since they lack funds. 5.7 CURRENT LEGAL SYSTEM OF THE GOVERNMENT TABLE 5.7: RATING OF THE CURRENT LEGAL SYSTEM OF THE GOVERNMENT

Opinion

1

Excellent

0

1

-1

1

1.00

2

Good

4

5

-1

1

0.20

3

Average

43

40

3

9

0.23

4

Fair

6

3

3

9

3.00

5

Poor

16

20

-4

16

0.80

Total

69

69

(O - E)2 (O - E)2/ E

5.23

Table Value χ² 0.05 for d.f. 4= 9.48 Test is rejected

At 95% confidence level, the critical value obtained from the chi –square test is χ² 0.05, 4= 9.48, χ² is calculated as 5.23 which is less than the tabular value. Hence test is rejected and null hypothesis is accepted.


O-E

S. No

169




χ² 0.05, 4 9.48 > χ² 5.23 Hence, current legal system of the Government is poor as per the requirements of the MSME‟s. 5.8: IF THE GOVERNMENT SETS UP AN MSME’S DEVELOPING COMMITTEE, TO WHAT EXTENT COULD THIS ASSOCIATION HELP YOUR COMPANY? TABLE 5.8: GOVERNMENT SETS UP AN MSME’S DEVELOPING COMMITTEE Opinion

No. of Respondents

%

A lot help

49

71


7

10

Not sure

13

19

Assistance by SME Development Committtee 19% 10% 71%

A lot help


Not sure

The enterprises (71%; n=49) were of the opinion that if the Government sets up a MSME Development Committee it would help them. Whereas, 19% enterprises said they are not sure and 10% said not much help would be availed with the MSME‟s Development Committee. 5.9: IF THE GOVERNMENT SETS UP AN MSME’S CREDIT BANK, TO WHAT EXTENT COULD IT HELP YOU IN SOLVING THE FI NANCING PROBLEMS OF YOUR MSME’S TABLE 5.9: GOVERNMENT SETS UP AN MSME’S CREDIT BANK No. of Respondents

%

170

Opinion


CHART 1.6: GOVERNMENT SETS UP AN MSME’S DEVELOPING COMMITTEE


A lot help

57

83


4

6

Not sure

8

12

Assistance by SME Credit Bank

6%

12% 83%

A lot help


Not sure

CHART 1.7: GOVERNMENT SETS UP AN MSME’S CREDIT BANK The enterprises (83%; n=57) were of the opinion that if the Government sets up a MSME‟s Credit Bank it would help them. Whereas, 12% enterprises said they are not sure and 6% said not much help would be availed with the MSME‟s Credit Bank.

Opinion

No. of Respondents

%

A lot help

46

67


17

25

Not sure

6

9

171

TABLE 5.10: LEASE OF EQUIPMENTS BY THE GOVERNMENT


5.10: GOVERNMENT LEASES PARTICULAR EQUIPMENTS (E.G., COMPUTER, TELECOMMUNICATION EQUIPMENTS) TO YOUR COMPANY, TO WHAT EXTENT COULD IT HELP YOUR COMPANY


Lease of equipments by the Govt 9% 25% 67%

A lot help


Not sure

CHART 1.8: LEASE OF EQUIPMENTS BY THE GOVERNMENT The enterprises (67%; n=46) were of the opinion that if the Government leases particular equipments (e.g., Computer, Telecommunication equipments) to your enterprise, it would help them a lot. Whereas, 25% enterprises said not much help would be availed with this facility. Rest 9% said that they are not sure. C. FUTURE OF THE MSME’S TABLE 6.1: FUTURE OF MSME’S

O-E

(O - E)2 (O - E)2/ E

1

Very Optimistic

31

30

1

1

0.03

2

Optimistic

33

27

6

36

1.33

3

Neutral

3

6

-3

9

1.50

4

Pessimistic

2

4

-2

4

1.00

5

Very Pessimistic

0

2

-2

4

2.00

Total

69

69

5.87

Table Value χ² 0.05 for d.f. 4= 9.48 Test is rejected


Opinion


172

S. No



At 95% confidence level, the critical value obtained from the chi –square test is χ² 0.05, 4= 9.48 , χ² is calculated as 5.87 which is less than the tabular value. Hence test is rejected and null hypothesis is accepted. χ² 0.05, 4 9.48 > χ² 5.87 Hence, the future perspectives of the MSME‟s are not very much optimistic due to the upcoming of the MNC‟s with the latest technologies which provides more satisfaction to the customers. CONCLUSION Therefore it is evident from the above explanation that the MSME‟s of Haryana are fully equipped with their strengths, and opportunities to combat with the competition from the large scale enterprises. However, the Haryana government is also supporting these enterprises. With regard to the research regarding the growth of the small scale industries is concerned majority of the surveyed enterprises suggested that there should be an encouragement with regard to low cost automation. Competitiveness, primarily with high productivity and quality at low cost, is a major manufacturing need, which can be fulfilled by low-cost automation. LCA is a technology that creates some degree of automation around the existing equipment, tools, methods, people, etc, using mostly standard components available in the market with low investment so that the payback period is short (a few weeks to less than a year). PRODUCTIVITY NEEDS TO BE IMPROVED: Small- and medium-sized enterprises (MSME‟Ss) in must upgrade their technologies and transform themselves to cope with intense competition and rising labor and raw material costs.

Database of Bulk Buyers (Product wise) Buyers in Government / Public Sector Undertakings. 

Database of Rate Contracts of various Government Department and PSUs.



Information on Tenders Floated by Government Department and PSUs.



Database of Indian Exporters to various Countries with Products.

173

PROVISION OF MARKET INTELLIGENCE AND MARKET ASSISTANCE: Another suggestion given by the surveyed MSME‟s was regarding setting up of Market Intelligence Cell and Market Assistance Programmes. To provide this, the National Small Industries Corporation (NSIC), ISO:9001:2008 certified company and a Government of India Enterprise has been working to fulfill its mission of promoting, aiding and fostering the growth of Micro, Small & Medium Enterprises in the country. Its main objective is to collect and disseminate both domestic as well as international marketing intelligence for the benefit of MSMEs. This cell, in addition to spreading awareness about various programmes/schemes for MSMEs, will specifically maintain database and disseminate information on the following:


SKILL BASED NEEDS TO BE IMPROVED: Management skills are about making the right decisions and getting them executed by the right people at the right time. Thus, skills are undeniably all those things that effective management professionals does for the working.




Database of International Buyers with Products.



Database of Technology Suppliers & Projects for MSMEs



List of Micro & Small Enterprises registered with NSIC for Government Purchases, Raw Material Assistance, Performance & Credit Rating Schemes, list of MSMEs Industrial Association.

INTERNET APPLICATION USAGE AMONG B2B SUPPLIERS ACROSS INDIA: Another suggestion was regarding the adoption and implementation of the Internet application usage among B2B suppliers across India. A survey result showed that today, almost all B2B suppliers use Internet for communication purposes. In terms of various forms of ICT penetration, PC/ laptops have the highest penetration levels among B2B suppliers across India. PCs are followed by printers in terms of average number of units per B2B suppliers, followed by accounting software like Tally. ICT penetration in terms of server software is quite low, with an average usage for every 20 B2B suppliers surveyed across India. WORLD CLASS INFRASTRUCTURAL FACILITIES NEED TO BE PROVIDED: The last suggestion was regarding the improvement in the infrastructural facilities provided to the MSME‟s. The demand for proper transportation facilities, electricity and other facilities is also being reported. REFERENCES  J. C. Sandesara, “Scale and Technology in Indian Industry”, Oxford Bulletin of Economics and Statistics, Vol.28, 1966.  J. C. Sandesara, “Size and Capital Intensity in Indian Industry: Some Comments”, Oxford Bulletin of Economics and Statistics, Vol.31, No.1, 1969.  K. V. Ramaswamy, Technical Efficiency in Modern Small Industry in India, (Ph.D. thesis, Delhi: University of Delhi, 1990)  P. N. Dhar and H. F. Lydall, The Role of Small Scale Enterp rises in Indian Economic Development, (Bombay: Asia Publishing House, 1961)

174


 Gupta, M. and Cawthon, G., (1996), “Managerial implications of flexible manufacturing for small/medium-sized enterprises”, Technovation, Vol. 16 (2): 77-83.


AN EMPERICAL INVESTIGATION ON THE INVESTORS’ PERCEPTION TOWARDS COMMODITIES FUTURES TRADING IN INDIA WITH SPECIAL REFERENCE TO PUDUCHERRY, INDIA DR. R. T. NIRMAL KUMAR*; MR. BALAJI.K** *Professor, School of management Studies, Surya Group of Institutions, Anna University Tharamani, Chennai, Tamil Nadu, India. **Assistant Professor, School of management Studies,Surya Group of Institutions, Anna University Tharamani, Chennai, Tamil Nadu, India.

ABSTRACT

KEYWORDS: Investors Perception, Commodities Futures, Financial Engineering. ______________________________________________________________________________ INTRODUCTION Commodity derivative markets have traditionally been a contentious issue at various policy forums across the world, particularly with the imbroglio created by allegations from various corners that they encourage excessive speculation and are therefore responsible for the recent

175

This paper also deals with the historical perspective of Commodities Derivatives Market, the scope of strengthening the Commodities derivatives trading and its regulations. The major outcome of this paper is that there is no significant relationship between the Gender and the Category of Investment. There is significant difference between the perceptions and the saving percentage for the commodity futures. Despite a long history of commodity futures trading in the country, futures markets are still viewed with suspicion by many investors‟. Against such conflicting views, commodity futures markets present a rich research agenda on identifying the retail investors‟ perception towards Commodities Futures trading.


This paper empirically investigates the Investors Perception towards commodities Futures trading in India. Since 2004, the development of commodity derivatives markets has been impressive. It was observed that though derivatives trading commenced in the securities market only in June 2000 it was growing at great speed while the commodity derivatives markets which were operational for about 48 years by then was only gradually waking up. It is very evident that Institutional players are restricted to participate in Commodities futures trading in India. Thus the major player in Commodities Futures market is the Retail Investors. This study has been taken to identify the Investors perception towards Commodities futures trading and the level of awareness towards Commodities Futures trading. The research design chosen is descriptive. The data was collected using a questionnaire that consists of closed and open ended questions. Convenient sampling method is employed. The statistical analyses were performed by using Chi Square, Weighted average Method, One Way ANOVA and Rank Correlation.


commodity price escalation. While this suspicion of excessive speculation in the commodity markets has always been there among policymakers in developing nations like India, it has become more widespread since 2008 in the wake of worldwide inflationary pressures on food and energy. The sudden deflation in the value of various assets underlying different derivatives, which includes commodity derivatives, in the wake of the global meltdown has provoked greater apprehension about the economic utility of futures markets. The suspicion has reached such a high pitch that even the U.S., the biggest proponent of market forces with the most active commodity exchanges in the world, is considering new modes of regulation, and is also investigating the role of commodity derivative trading in the wake of steep rise in prices of wheat, rice, and crude oil. On the other hand, ever since commodity derivative trading was allowed in India in the new millennium, there has always been a hue and cry against such markets, with the alleged notion of excessive “speculation”. Rather than recognizing the potential economic utility of commodity derivative markets in price discovery and risk management, the government has been more apprehensive about its alleged ill-effects. As a result, over time, a future trading has been subjected to strict regulations, and certain commodities have been inflicted with occasional bans. Thus, while the “disutility” of the market is yet to be proven, the overcautious behaviour of the government has never really allowed the market to develop and prove its utility. Hence, in the midst of doubts and debates on the utility of commodity futures markets and against the background of conflicting views and vista, there is a need to identify the Investors perception towards commodities market and this presents the agenda for research on commodity futures.

DEFINITION AND USES OF DERIVATIVES A derivative security is a financial contract whose value is derived from the value of something else, such as a stock price, a commodity price, an exchange rate, an interest rate, or even an index of prices. In the Appendix, I describe some simple types of derivatives: forwards, futures, options and swaps Ashutosh Vashishtha & Satish Kumar International Research Journal of Finance and Economics ISSN 1450-2887 Issue 37 (2010)

176

The global economic order that emerged after World War II was a system where many less developed countries administered prices and centrally allocated resources. Even the developed economies operated under the Bretton Woods system of fixed exchange rates.The system of fixed prices came under stress from the 1970s onwards. High inflation and unemployment rates made interest rates more volatile. The Bretton Woods system was dismantled in 1971, freeing exchange rates to fluctuate. Less developed countries like India began opening up their economies and allowing prices to vary with market conditions. Price fluctuations make it hard for businesses to estimate their future production costs and revenues. Derivative securities provide them a valuable set of tools for managing this risk.


RISE OF DERIVATIVES


Commodities Futures Contracts: A future contract is an agreement for buying or selling a commodity for predetermined delivery price at a specific future time.Futures are standardized contract that are traded on organized future exchange that ensures performance of the contractsand thus remove the default risk. Dr. Narendar L.Ahuja (2005) Derivatives may be traded for a variety of reasons. A derivative enables a trader to hedge some preexisting risk by taking positions in derivatives markets that offset potential losses in the underlying or spot market. In India, most derivatives users describe themselves as hedgers (FitchRatings, 2004) and Indian laws generally require that derivatives be used for hedging purposes only. Another motive for derivatives trading is speculation (i.e. taking positions to profit from anticipated price movements). In practice, it may be difficult to distinguish whether a particular trade was for hedging or speculation, and active markets require the participation of both hedgers and speculators. A third type of trader, called arbitrageurs, profit from discrepancies in the relationship of spot and derivatives prices, and thereby help to keep markets efficient. Jogani and Fernandes (2003) describe India‟s long history in arbitrage trading, with line operators and traders arbitraging prices between exchanges located in different cities, and between two exchanges in the same city. Their study of Indian equity derivatives markets in 2002 indicates that markets were inefficient at that time. They argue that lack of knowledge, market frictions and regulatory impediments have led to low levels of capital employed in arbitrage trading in India. However, more recent evidence suggests that the efficiency of Indian equity derivatives markets may have improved (ISMR, 2004).

Commodity Derivative markets were set up in India in cotton in 1875 and in oilseeds in 1900 at Bombay. Forward trading in raw jute and jute goods started at Calcutta in 1912. Forward Markets in Wheat had been functioning at Hapur since 1913, and in bullion at Bombay, since 1920. In 1919, the government of Bombay passed Bombay Contract Control (War Provision) Act and set up the Cotton Contracts Board. With a view to restricting speculative activity in cotton market, the Government of Bombay issued an Ordinance in September 1939 prohibiting option business. Bombay Options in Cotton Prohibition Act, 1939, later replaced the Ordinance. In 1943, the Defence of India Act was utilized on a large scale for the purpose of prohibiting forward trading in some commodities and regulating such trading in others on an all India basis. In the same year oilseeds forward contracts prohibition order was issued and forward contracts in oilseeds were banned. Similarly orders were issued banning forward trading in food-grains, spices, vegetable oils, sugar and cloth. These orders were retained with necessary modifications in the Essential Supplies Temporary Powers Act 1946, after the Defence of India Act had lapsed. With a view to evolve the unified systems, Bombay enacted the Bombay Forward Contract Control Act, 1947. STRENGTHENING THE SCOPE OF COMMODITY DERIVATIVE TRADING


EVOLUTION OF COMMODITY DERIVATIVE MARKETS

177

The issue of expanding the scope of commodity derivative trading is apparently normative and value judgmental. This is primarily because of a large group of people who feel that commodity


derivative trading should not be allowed at all and hence the question of expanding its scope does not arise. However, there are enough strong arguments in favour of strengthening commodity derivatives markets and developing supportive market institutions and awareness. Rutten, L. (2009): “Researching Commodity Futures Markets”, in Pavaskar, M. (ed.), Effects of Futures Markets on Agricultural Commodities (Mumbai: Takshashila Academia of Economic Research Limited).The role of commodity futures markets becomes even more compelling with India moving toward greater trade liberalization, particularly in the context of agriculture, and getting further exposed to the volatilities of international trade and finance. Commodity futures is a market mechanism that is viable for risk management and price discovery, and such institutions can help “bail out” the economy from the vagaries of international trade. Ghosh, N. (2008a): “Ruthlessness and Generosity of Markets: Futures as Instruments for Combating Agricultural Price Volatility”, Commodity Vision, 2(1), 12-18. COMMODITY FUTURES MARKET IN 2009-10– A REVIEW

178

SOURCES: FORWARD MARKETS COMMISSION ANNUAL REPORT 2009-10


The Indian Commodity Futures Markets continued to grow, despite the suspension of futures trading in a few agricultural commodities. During the year 109 commodities were regulated under the auspices of the recognized Exchanges. During 2009-10, 21 recognized exchanges were functioning. Out of the 109 commodities, regulated by the FMC, in terms of value of trade, Gold, Silver, Copper, Nickel, Zinc, Lead, Guarseed, Soy Oil, Chana, Jeera and Guargum were the prominently traded commodities.


Against this backdrop the purpose of this paper is to study on Investors perception towards Commodities futures trading, the level of awareness towards Commodities Futures trading and to analysis the factors considered by investors, which ultimately influence their investments. Empirical research was conducted and the data was collected through survey method. Questionnaire was constructed which consists of close ended questions. Sample size is 200 (Traders trading at Puducherry, Union Territory, India). Convenient sampling method is employed.

179

SOURCES: FORWARD MARKETS COMMISSION ANNUAL REPORT 2009-10


Vol.1 Issue 2, Nov 2011, ISSN 2249 8826 Online available at http://zenithresearch.org.in/


After an in depth review of literature, the statistical analysis were performed by using Percentage Analysis, Chi Square, Weighted average Method, One Way ANOVA and Rank Correlation. FINDINGS AND DISCUSSIONS PERCENTAGE ANALYSIS 40% of the respondents are having good experience in the practice of investment. In commodity futures nearly 40% of the respondents are investing weekly once. 40% of the respondents preferring medium term positions in trading In commodity futures 44% of the respondents have invested 10 – 20% of their savings. 30% of the respondents are trading in commodity futures through their self research. 56% of the respondent feels that the felicitation fee charged by the company is reasonable. 50% of the respondents feel that the margin requirement charged by the company is high. 70% of the respondents feel that the commodity future trading is good investment option. 30% of the respondents are selected gold as commodity for the investment in future. Most of the respondents are like to do the cash settlements in stead of the physical settlement that is 80%.

ANALYSIS OF TWO VARIABLES The following hypotheses were taken for testing: By comparison between gender wise and category of investment (Excluding commodities futures) (H0): There is no significant relationship between the gender and category of investment.


Investors annual incomes are seem to be between the ranges of 2 – 3 lakhs.

180

(H1): There is significant relationship between the gender and category of investment TABLE :I


Level of significance α = 0.05 For testing the Hypothesis

Oi = Observed Frequency, Ei = Expected Frequency EXPECTED VALUE

181


TABLE :II


TABLE : III

Calculated Value = 3.847 Degree of freedom = (r-1) (c-1) = (2-1) (7-1)

= 12.59

Calculated Value < Table Value 3.847 < 12.59 INFERENCE Since calculated value is less than table value we accepted the (H0) and rejected alternative hypothesis (H1).So there is no significant relationship between the gender and category of investment.

182

Table Value


Degree of freedom = 6


ONE WAY ANNOVA Comparison made between the perceptions and the saving percentage for the commodity futures. (H0): There is no significant difference between the perceptions and the saving percentage for the commodity futures. (H1):There is significant difference between the perceptions and the saving percentage for the commodity futures. TABLE: IV 0-10%

10-20%

20-30%

Above 30%

Total

Friends/family

10

27

7

8

52

Self-research

25

20

8

7

60

Media

24

19

2

3

48

Others

13

22

3

2

40

Total

72

88

20

20

200

X1

X2

X3

X4

X12

X22

X32

X42

Total

Friends/family

10

27

7

8

100

729

49

64

942

Self-research

25

20

8

7

625

400

64

49

1138

Media

24

19

2

3

576

361

4

9

950

Others

13

22

3

2

169

484

9

4

666

Total

72

88

20

20

1470

1974

126

126

3696

C.F=T2 /N = 200 2 /16 = 2500 C.F

183

TSS =


TABLE: V


= 3696-2500 = 1196 SSC= (

C.F

= (72)2/4+ (88)2/4+ (20)2/4+ (20)2/4-2500 = 3432-2500 = 932 SSE = SST-SSC: = 1196-932 = 264 TABLE: VI

F-table value = 5.95 Calculated value >Tabulated value 14.12 > 5.95 INFERENCE Since the calculate value is greater than the table value. So we reject null hypothesis and accept alternative hypothesis. There is significant difference between the perceptions and the saving percentage for the commodity futures.

184

V1=3, v2=12


ANOVA TABLE


APPLYING WEIGHTED AVERAGE METHOD TABLE: VII Weightings: 7

6

5

4

Factors

3

2

1

No. of Respondents

W.A

Rank

86

56

21

13

8

10

6

40.89

I

Silver

80

51

20

15

16

8

10

39.28

III

Aluminum

21

15

10

51

80

11

12

27.32

V

Barley

10

13

56

11

45

55

10

25.96

VI

Crude oil

56

86

21

13

8

10

6

40

II

Flakementh

20

45

9

11

5

60

50

24.42

VII

Others

30

21

25

70

20

19

15

30.5

IV

Gold

Calculation of Weighted Average: Formula = R1*7 + R2*6+ R3*5+ R4*4 + R5*3+R6*2+R7*1 Total weights

28 = 40.89 INFERENCE From the above table it is inferred that many investors prefers to take future contract in gold rather than others and the minimum goes for the flakementh.

185

Group Discussion = 86*7+56*6+21*5+13*4+8*3+10*2+6*1


Sample Calculation:


APPLYING WEIGHTED AVERAGE METHOD TABLE:VIII Weightings:

6

5

4

Factors

3

2

1

No. of Respondents

W.A

Rank

Market conditions

70

21

30

45

15

19

21

VI

Profits

80

60

13

21

14

12

44.52

I

Speculator

40

35

10

20

45

50

31.19

V

Hedging

35

20

40

50

30

25

33.57

IV

Investment opportunities

45

30

25

30

40

30

37.38

II

Arbitrage

50

30

35

40

20

25

36.90

III

Calculation of Weighted Average: Formula = R1*6+ R2*5+ R3*4+ R4*3 + R5*2+R6*1 Total weights Sample Calculation:

INFERENCE From the above table it is inferred that futures contract are taken by investors for making profits. Thus profit is considered to be the important factor for taking future contract and Minimum considering factor goes for market condition.

186

21


Group Discussion = 70*6+21*5+30*4+45*3+15*2+19*1


CORREALATON CO-EFFICIENT By comparing the frequent usage about the commodity futures and type of trade (Ho): There is no significant relation with the frequent usage about the commodity futures and type of trade. (H1): There is significant relation with the frequent usage about the commodity futures and type of trade. TABLE: IX X

72

80

48

Y

64

80

56

TABLE:X X

Y

Xy

72

64

5184

4096

4608

80

80

6400

6400

6400

48

56

2304

3136

2688

=200

=200

=13888

=13632

=13696

INFERENCE Since r is +ve there is no significant relation with the frequent usage about the commodity futures and type of trade. This study identifies that a perception lies with majority of investors that future trading will lead to profits and it is not used for other purpose like hedging. The nature of the derivatives instruments are to reduce the risk involved in trading but in real time investors are not taking derivatives trading for reducing their risk involved in trading and profit making is considered to be an important factor for the them. On the other side without focusing the market condition if an investor takes future contract how he/ she will book profit? The above study identified that less

187

r = +0.733


r=


weights are given towards market condition and it is not considered as an important factor among the investors while taking future contracts. Thus it reveals that without having proper knowledge about derivatives, derivatives instruments many investors are trading. The study further identified that only 30% of the respondents are trading in commodity futures through their self research and majority are looking for sources of information from media, brokers, friends etc. Majority of the investors do not know why and when to take commodities futures contract. The perception about the Commodities futures trading should be drastically redefined, reshaped and repositioned among the retail investors, through constant education, training and awareness program. Thus the FMC has to conduct lot of training program for the investors to strengthen commodities futures trading volume. This training program should cover the basic of commodities futures, how to do analysis for choosing the type of trade (Fundamentally and technically).The retail investors should not drop their hope in futures trading on commodities because they are the major player in the market because financial and foreign institutional investors are prohibited to do trading in Commodities Futures for the long term sustainment of Commodities futures trading FMC has to play pivotal role. On the other side a number of reforms and initiatives are still needed in promoting India as a major futures trading hub in tune to the status of being amongst the top five producers of most of the commodities. In addition India is also a major consumer of bullion and energy products. A resurrected futures market ready to accelerate as a bullet train cannot run on the traditional tracks. Therefore, issues which would facilitate shifting the commodity futures markets on to a modern track are to be tackled on an urgent basis. But at the same time, the FMC and the Union Ministry of Consumer Affairs in India are considering seriously reviving the Bill to amend the FCRA, since it lapsed after the dissolution of the last Lok Sabha. The Bill seeks to not only strengthen, enlarge, and upgrade the FMC, with more regulatory powers, but also legalize options, permit trading in intangibles with cash settlement provisions, and allowing the entry of financial institutions, including foreign financial institutes, in commodity derivative trading business to broaden and deepen the markets. This research paper throws open the lacunae and the pitfalls in Commodities Futures Trading, and how the perception of investors should undergo drastic change.

[1]Commodity Research Bureau (2008), The CRB Commodity Yearbook 2008, Hoboken: John Wiley & Sons Inc. [2]Deaton, A. and G. Laroque (1992), “On the behaviour of commodities prices”, Review of Economic Studies, No. 59, pp. 1-23 [3]Development of Financial Derivatives Market in India- A Case Study International Research Journal of Finance and Economics ISSN 1450-2887 Issue 37 (2010) [4]Govt. of India (1952) Forward Contracts (Regulation) Act, 1952 [5]Government of India Forward Markets Commission, Annual Report 2009-10 Derivatives‟,

available

188

[6]Hirani, Kapil (2007), „Understanding at:http://kapilhirani.com/News5.php (accessed on May 20,2009)


REFERENCES


[7] „Introduction to derivatives in India‟, available at: http://business.mapsofindia.com/investmentindustry/introduction-to-derivatives.html(accessed on May 27, 2009). [8]Kannan, R. (2008), „Onset of Derivatives Trading in Derivatives market‟, available at: www.geocities.com/kstability/content/derivatives/first.html (accessed on May 20, 2009). [9]Naik, Gopal and Jain, S.K (1999) A Study on the Performance of Indian Commodity Futures Markets, Indian Institute ofManagement, Ahmedabad. [10]Dr. Narendar L.Ahuja : Commodities Derivatives Regulations and Future prospectus (2005)

market in India: Development,

[11]Nair C.K.G: Commodities market Ready for take off? www.nseindia.com [12]Piero Cinquegrana: The Need for Transparency in Commodity and Commodity Derivatives Markets, ECMI Research Report No. 3/December 2008 [13]R.T. Nirmal and Balaji.K, 2011, Derivatives Market in India and the Role of Retail Investors ICBSM 2011, Hyderabad, India [14]S.M. Lokare Commodity Derivatives and Price Risk Management: An Empirical Anecdote from India, Reserve Bank of India Occasional Papers Vol. 28, No. 2, Monsoon 2007 [15]Survey of the World's Commodity Exchanges 2005, UNCTAD Expert Meeting "Enabling small commodity producers in developing countries to reach global markets"

189


[16]Telser, L.G. (1981): “Why there are Organised Futures Markets”, Journal of Law and Economics, 24, 1-22.


TEAM WORK-NEED OF THE HOUR CHANDANA JOHN* *Faculty, GITAM University, Hyderabad Campus, Hyderabad Andhra Pradesh, India.

ABSTRACT This paper explores the need for teamwork in today’s work place. Tracing the antecedents of teamwork from Nature, it goes on to talk about its importance and prevalence. It defines a team and enumerates the qualities needed to be a good team member. The concepts of cultural adaptability and emotional quotient are analyzed. The elements of a team and its advantages are discussed. The various stages of team formation are touched on briefly. The characteristics of a team as well as the problems that it may have to face are explored. The individual stands to gain a lot from teamwork .Team work contribute to the making of a complete individual. Over all, it is concluded that no man is an island and team work is the need of the hour. KEYWORDS: competencies, conflict, emotion, global, individual, relationship, team. ______________________________________________________________________________ INTRODUCTION I am only one, But still I am one. I cannot do everything, But still I can do something; And because I cannot do everything

Today the world has shrunk and technology has made it easier for us to communicate with people at a great distance from us. The people with whom we need to communicate may inhabit another part of the world or belong to a different culture or attuned to a different wavelength emotionally. In the work place, an individual needs to understand himself before he can accept and work with another individual with his or her differences. His confidence in his own unique nature leads him to appreciate the divergence in his fellow human beings. In the present Global scenario every individual is expected to contribute at his or her own level to the growth of the Company or Institute or Industry wherein he works. But he is no longer working in a vacuum but is a clog in the machinery in tandem with other people. He is part of a

190

Edward Everett Hale (1998)


I will not refuse to do the something that I can do.


larger group and at all times his success and efficiency depends upon others in the group as well as his innate intelligence. Team work can be found everywhere in Nature. From flocks of birds, grass eating animals to insects like bees and termites all display team work of the highest order for their survival, whether it is to gather food or defend themselves from their enemies. Even in the plant world, different tissues take up different functions and work as a whole. The human body too boasts of team work with different organs functioning optimally for the well being of the entire body. So it is hardly surprising that the conglomerates now swear by team work. Corporate and multinational companies are spread across countries and many a times employ people of various nationalities in a single centre. This cosmopolitanism raises the problem of cultural diversity in work places where some people insist on preserving their own identities and this spills over into their relationships with their colleagues in the work place. Dealing with people from different countries and cultures can become problematic unless one recognizes respects and accepts diverse groups. CULTURAL ADAPTIBILITY In a team, cultural adaptability is of the highest importance, since the members are expected to work closely for sometime in total synergy. Cultural adaptability is the ability of a person to adapt to different cultures and social mores at the personal level. Each individual, at any level of organization, brings different values, expectations and perspectives with them to work. They affect how he manages, leads or interacts with his peers, superiors and subordinates. Often, a rigid mentality will find itself in trouble when placed in a team with members belonging to different backgrounds. One has to be aware of Multiple Intelligences (Gardner, 1993) and the different ways of perceiving and assimilating that we all employ in our daily lives.

The young people today lack the maturity to acknowledge the superiority of another person gracefully. They also lack the patience to handle and manage another person who may not have his level of knowledge or experience. Today’s society, made up of nuclear families, does not offer any opportunity for the practice of these inter-relational skills. In India, especially, the dissolution of the joint family system have left the younger generation bereft of the skills of respecting and sharing which are necessary life skills if one has to successful in one’s life. A positive attitude of give and take is mostly lacking in our young graduates and as a result, many a time we see an academically well qualified person behaving in a disruptive manner when placed in a team.

191

This is where prospective employers are more and more concerned about the emotional quotient of a person, the quotient which expresses his willingness to work as a member of a team which is much harder than working alone. For managing a team is like dealing with a many headed monster, trying to get the best from each person within a framework of given time. The individual as a team member has to look out for the entire team even if he is not the leader of the project. Many people have no training or practice to shoulder this added responsibility and as a result fail miserably while working in a team.


EMOTIONAL QUOTIENT


Many businesses now prefer people with high emotional Intelligence. Peter Salovey and John Mayer(1997) defined E.I. in their ground breaking article defined Emotional Intelligence as ‘The subset of social intelligence that involves the ability to monitor one’s own and others’ feelings and emotions, to discriminate among them and use this information to guide one’s thinking and actions.’ Only a person with high emotional quotient can work efficiently as part of a team. Let us consider the case of one Mr. X which will help us understand the importance of EQ. Mr. X is a software engineer working for an MNC. He is experienced and nearing his Thirties. He also has a loving and supportive family. But at office, he does not seem to be getting along with anybody. He is seen arguing hotly over trivial issues with his colleagues. He is impulsive and not ready to acknowledge his error even when it is obvious that he is in the wrong. The rigidity of his thoughts and their blunt expressions antagonize his team mates continuously and as a result they shy away from him and avoid him as much as possible. Sometimes he does not receive pertinent information and at other times fails to pass on the relevant information to other members of the team. This results in decisions that pull down the entire project. He loses confidence and tries to hide it by aggressive behavior. He is not aware of the vicious circle that he is creating for himself. Mr.X is may be quite intelligent but his E.Q. is very low. As a result the competencies related to Emotional Intelligence needs to be developed in him. The personal competencies of selfawareness and self-management are lacking. It is interesting to note that the qualities desirable in an ideal team member like self control, trustworthiness, adaptability, flexibility, innovation, creativity and commitment coincides with these competencies.

ELEMENTS OF A TEAM The team needs to be manageable and so is best restricted to 5 -12 members.

192

So, quite apart from the technological know-how, team work is mostly to do with one’s inter relational skills. Even basic academic skills like initiating a conversation, seeking or giving information, coordinating and consolidating information are a prerequisite for good team work. Encouraging one another, seeing that everyone has a chance to contribute and express themselves, adapting and relieving tension in positive ways would set one apart as a natural leader. Getting into loud arguments, disagreeing beyond reason, dominating or withdrawing from the group and bringing in irrelevant personal interests are totally uncalled for in team-work.


The social competencies which come under this framework are social awareness and relationship management. According to Daniel Goleman (1998), a sense of empathy, organizational awareness and service orientation consists of social awareness and effective communication, motivation and vision, managing conflicts, building bonds collaboration and cooperation, developing others as well as acting as a catalyst for change comprises relationship management. These should also be a part and parcel of an effective team member.


The work that needs to be done must be interdependent and everyone should have a contribution to make. Members of a team should possess complementary skills. The vision should be shared and inspiring in line with the capability and expectation from the team. All the members should be committed to the goal and share the responsibility of achieving it in the given time frame. Team work can be seen in any area of our life whenever two or more individuals come together to work for a common goal and is a beautiful revelation of the potential of the human spirit in action. A team is necessarily a group of persons committed towards a common goal and working in synergy to achieve it. Every individual in the team needs to uphold the objective of the team and consider it of greater priority than any individual goal. The commonality of the team goals is what converts a group into a team. ADVANTAGES OF TEAM WORK But what are the advantages of team work? Firstly, it is necessary because an individual cannot do everything. Team work can save time and energy for each individual does what he is good at and the collective effort helps the team to achieve the goal fas ter. Every individual is in a co-operating mindset and so in a team one is constantly learning from the others. Also since there is an element of belonging and trust associated with being part of a team, creativity is in full flow. Every member of the te am feels free to put forth his ideas even if nothing comes of it.

One is reminded of a cricket team which plays as one representing its country though each member has a different and specific role to play in a match and the entire team is held responsible for a defeat or victory. Similarly, a team anywhere, functions as a single entity. This is not to say that there are no conflicts amongst the team members. But the conflicts are resolved quickly and amicably in the spirit of camaraderie which prevails in a team.

193

Also, the distribution of work is more or less equal with each member accountable for part of the project so that it is understood that the responsibility as well as the credits would be shared by the entire team.


This leads to a lot of caring and sharing and enhanced communication between the Members of a team are the order of the day.


PHASES IN TEAM FORMATION In a corporate set up a team usually consists of members with their own areas of expertise which is pooled together to reach its goal. A team is usually formed for a specific purpose and dismantled once it has served its purpose. It is helpful to know that just as a relationship with an individual goes through phases so also a team has formative phases where initially the team members are just coming to know of each other and with time begins to build a team identity and accept the leader. The norming and storming stages are necessary steps leading to the performing stage. It is only in the last stage of team formation that optimum and efficient work output is observed since at this stage there is clarity in the mind of the team members regarding their roles as well as an appraisal of other team members’ capabilities. Once the goals are reached, there is a feeling either of euphoria at a job well done or a feeling of nostalgia for the times spent together and once again it is the individual’s positive mindedness which helps him to move on. CHARACTERISTICS OF A GOOD TEAM For a team to function at its optimum potential, the objectives of the team should be clearly defined along with the roles of each individual. These roles should be accepted by the team members to ensure total co-operation between the members. Since the roles are sometimes imposed by the authorities, a certain open mindedness and work attitude is required on the part of an individual. A sincere and responsible attitude helps one to excel in the given role. Since no two people work in the same way, an awareness and exposure to different kinds of people is a definite plus point in a team member. He also needs to be secure and confident about his own abilities and mindful of his weak points as well. Allowing others to be different yet acknowledging their innate humanity is the key to the smooth functioning of a team. Subsidiary skills like listening actively, questioning and discussing strategies, persuading, respecting, helping and sharing; all spring from this attitude. Good communication skills also go a long way in ensuring co-operation between all members of a team.

PROBLEMS AND DIFFICULTIES Teams can deteriorate into a social group with the members loafing around without putting in their full effort because no one feels responsible for the outcome or is in a comparison mode with other team members and does not trust them.

194

It is the express responsibility of the team leader to see that every member in the team is supported and valued and he must set the trend by personal example. Clear cut goals and objectives, logical and firm deadlines and unobstructed flow of relevant information are the hallmarks of a good team. A system of feedback which allows every member of the team to voice their problems and suggestions from time to time can help the leader to control and guide the team-work to success.


Pertinent information should be made available to all members of a team if the team is to function well. Conflicts should be allowed in an atmosphere of brainstorming. Decision making should be shared.


The vision given is not developed or the members are unable to identify with it. Sometimes loyalty pressures stop members from voicing their opinions and feelings. Only fifteen percent of the population is natural team players. Others range anywhere on a 0 to 10 scale. The management and higher ups do not really believe in team work but pay only lip-service to it. Members are unable to communicate frequently across borders, both horizontally and vertically. Members hesitate to act for fear of getting reprimanded. Members of a team may be impatient and may not wait for other members to find their feet. An atmosphere of trust and credibility may be missing. The reward system in the organization may unwittingly reinforce individual work. THE PATH TO WHOLENESS THROUGH TEAMWORK Any member of a team stands to gain if he or she maintains a positive frame of mind. One’s problem solving capacities are enhanced both through practice and observing the members of the team. Communication skills are polished through regular practice.

One reaches a balance between one’s own individual pride and pride in the team. Narrow mindedness is vanquished. One gets an opportunity to develop leadership qualities as well as enhance social skills. One’s chances of making mistakes in team work are negligible since all ideas are put forward before the team. A sense of self esteem adds to one’s confidence as one’s contribution is acknowledged.


Positive interdependence leads to optimal networking and good contacts.

195

Tolerance and adaptability become s part of one’s character.


Learns to evaluate and give constructive feed -back. Very often our social action and our productive work aim at fulfilling our duty. Our ego aims at asserting our very own identity. Consequently, our psychic emotional status does not include just emotions and feelings, but also include their system of adjustment, represented by feelings of pleasure, power and weakness, attraction or repulsion versus love and hatred. Like Carl Gustav Jung once said, they introduce judgment values into our lives. These judgment values pertain to health and happiness, and so good team work can bring great benefits to the individual. In conclusion, let us remember that a team is not formed haphazardly or at the spur of the moment but with due thought to the task and goals to be reached and the members’ suitability to contribute towards their fulfillment. The needs of the project and the skills of the members should be matched. Resource allocations should be kept in view. Procedures and criteria of measurement as well as the criteria of achievement should be clearly defined. Time for periodical reviews should be set aside and there should be scope for up gradation whenever needed. The goals including objectives, purposes, values, visions, strategies to be employed as well as short term planning or long term planning framework should be well defined. Interpersonal skills, awareness in group context and feedback should be taken into consideration while choosing the team members. We are part of a rapidly changing world. As Daniel Goleman (1998) would aver, it is no longer enough to be a smart and experienced individual with expertise in our chosen area. We are being judged by a new yardstick -whether we can be good team players-whether we can handle ourselves and each other well. Hence, let us learn to march to the band of mutual love, respect and cooperation and in helping others, help ourselves to scale the ladder of success. Finally, we must realize, as Andrew Carnegie (1998) quotes "Teamwo rk is the ability to work together toward a common vision. The ability to direct individual accomplishments toward organizational objectives. It is the fuel that allows common people to attain uncommon results.”

Goleman D (1998) Working with emotional intelligence, New York: Bantam Mayer. J.D& Salovey, (1997),‟What is Emotional Intelligence. , New York Webster’s Pocket Quotation Dictionary, (1998); Trident Press International: Radcliffe

New

196

Gardner, Howard (1983:1993) Frames of mind; the Theory of multiple intelligences, York: Basic Books.


REFERENCES


A STUDY ON EDUCATIONAL STATUS OF TRIBAL CHILDREN IN THE NILGRIS DISTRICT DR. V. RAJAM*; MS. MALARVIZHI. V** *Professor, Avina shilingam Institute for Home Science and Higher Education for Women, Coimbatore-43, Tamilnadu, India. **Assistant Professor, Avina shilingam Institute for Home Science and Higher Education for Women, Coimbatore-43, Tamilnadu, India.

ABSTRACT Literacy and human development are keys to any quantitative social change and those two factors influence demographic behaviour The reservation policy has opened the gates of education to Scheduled Caste and Scheduled Tribes low privileged groups‟ caste men as well as women. With this background an attempt was made with the objectives; to study the parental objective in educating the respondents, to find out the reasons for taking education and financial aid for children and to assess the difficulties faced by them. The study was based on the primary data that was collected with the help of well-structured and pre-tested interview schedule, administered to 600 respondents in the Nilgris in two blocks. A purposive random sampling method was adopted in data collection. From the findings of the study, that the given opportunities were not utilized fully; sometimes they were opposed by their own caste people, which resulted in conflicts, problems and tensions. The study suggested that, Massive community programme could be taken with a view to change the aspiration levels of the disadvantaged children and a crèche attached to the school may lighten the domestic burden of school girls. To conclude, as education of women brings out change of the standard of living and their entire family system. KEYWORDS: conflicts, domestic, education, Human development, and scheduled Tribes. ______________________________________________________________________________

197

Literacy and human development are keys to any quantitative social change and those two factors influence demographic behaviour. The educational system in India is the second largest in the world with 10.4 lakhs schools, about 17,000 colleges and about 329 universities including institutions demanded to be university (Tilak, 2006: 33-34). The number of students in educational institutions in India out numbers the total population of united Germany, England and Canada together. Also enrolment in all educational institutions have increased eight times from 2.4 crores in 1950-01 to 21 crores in 2002-03, as per official statistics (Ibid :33). Of late, schemes such as Sarva Shiksha Abhiyan and Mid- Day Meal have proved to be highly beneficial for providing access to children to elementary schools and retain them up to class VIII (Joshi 2009: 30-31).


INTRODUCTION


Yet the pressure to build an appropriate educational structure for the burgeoning population is deeply felt in India. One thing that is constant independently of the level of development and stage of demographic transition is that household educational expenditure per child decline with family size. The impact is more pronounced in case of the girl child, as there is less retention of girls after the age of 11 for several socio- cultural reasons. With nearly 273 million total illiterate in, most of whom are women and people from disadvantaged sections, India tops the rank of the largest number of illiterates in the world. According UNICEF (2009) report, in India, the net attendance ratio in primary schools is 72 percent in 2005-06. In the middle, secondary and higher secondary standard such a ratio is only 52 percent. The government of India in its 11th Plan Document (2008:4) has acknowledged that 51 percent of students at the elementary level (classes 1-8) had dropped out during 2004-05. Such a rate is much higher for the Scheduled Tribe (66 percent) and Scheduled Caste (57 percent) students. Despite the expansion of the system in recent years, therefore, the progress achieved so far has not been satisfactory, both in terms of quantity and quality. According to the „EFA Global Monitoring Report 2010‟ (UNESCO), India‟s rank on EDI was 105 among 128 countries. And it continues to figure, along with a bunch of African and one or two Asian countries, such as Pakistan and Bangladesh, in the group of countries with a low EDI. In 2001 also India was ranked 105 among 127 countries (Tilak 2010). The reservation policy has opened the gates of education to Scheduled Caste (SC) and Scheduled Tribes (ST) low privileged groups‟ caste men as well as women. But quite a few low privileged caste girls/women are not aware of their rights and welfare and do not take advantage of the reservation and policies of protective discrimination. Therefore to achieve a sustainable balance development, which is the key area concern in hilly regions, the study has attempted to study the educational status of Tribal children in Nilgiris district. OBJECTIVES OF THE STUDY To study the formal level of education and achievement among the Tribal group. To study the parental objective in educating the respondents.

To assess the difficulties faced by them. REVIEW OF LITERATURE Singh and Ohri (1993) opined in their study that the educational status of tribals should be improved. The study suggested that as a result of modernization, education and social change among tribals have improved better. Further improvement can be made on the basis of data related to education available from various sources, identifying tribal groups for initiating innovative educational programmes at the micro-level, conducting state-wise and district-wise

198

To find out the knowledge about the reservation of seats for Scheduled Caste and financial aid for children.


To find out the reasons for taking education.


surveys of causes of non-enrolment of girl child in tribal communities in order to achieve the goal of universalisation of elementary education, studying the problems of drop-outs, wastage and stagnation among tribal girls in school and examining their occupational mobility. The role of mass media also needs to be assessed in the educational development of tribals. Jayaswal, et.al, (2003) examined the role of parental support on academic achievement of tribal school students. The study selected a sample of 10 schools of Ranchi town having classes I, VI and XI randomly making a total of 300 children. The parents of 30 high achievers and 30 low achievers were selected as the parental sample. The tools used in the study were personal data questionnaire, academic achievement test, and parental support scale. The study found that the parents of high achievers exerted significantly more support in their children‟s studies than the parents of low achievers students. The parents of high achievers had greater work commitment concern with the quality of performance and inclination to learn lessons from others, more interest in children‟s educational success and were liberal. On the other hand the parents of low achievers were not strongly ambitious of children‟s upward mobility and were more fatalistic, lacking a role model and having low self-confidence and initiative for guiding their children.

199

Vinoba Gautam (2003) focused his study on education of tribal children in India and the issue of medium of instruction through a joint programme “Janshala” for the universalisation of primary education among educationally underserved communities. The programme was being implemented in nine Indian states. Records collected in schools in the Janshala Programme areas indicated continuing high “dropout” rates among tribal children. A major reason for this was that in most states the medium of instruction was regional language. Most tribal children do not understand the textbooks, which were generally in the regional language. The appointment of non-tribal teachers in tribal children‟s schools was another problem, the teachers could not know the language the children speak and children could not understand the teacher‟s language. The issue of language was being debated in the context of tribal education. While some researchers argued for a uniform policy with respect to language use in schools, others perceived it as a constraint in the process of schooling. This paper examined the current policy framework of the participating states with regard to the medium of instruction in government schools in tribal areas and meeting the needs of sound education of tribal children in terms of the posting of teachers, development of textbooks and curricula, training of teachers, etc. The responses of the stakeholders have been gathered through a survey carried out recently in fifteen Janshala blocks of five states. The paper also presented a statistical analysis of the responses of parents, children


Vijayalakshmi (2003) conducted a study to identify the problems of tribal students in secondary schools. The sample consisted of 240 students from VIII, IX and X classes who were selected from Andhra Pradesh Tribal Welfare Residential Schools, Ashram Schools and Zilla Parishad High Schools at random The findings of the study revealed that the tribal students had more problems with regard to their parents and family followed by personal, infrastructural and facilities, academic and teachers related. The individual problems faced by students were low social status of the parent, illiteracy of parents, cultural backwardness of the family, low educational levels of the siblings and nomadic life of parents. The other problems faced by them were lack of academic help from the teachers, non-availability of teachers, insect bites in the school premises, inconvenient school timings and absence of teachers in the school.


and teachers on the issue of using the mother tongue as medium of instruction in schools and other language issues. METHODOLOGY India is one of the largest concentrations of tribal population in the world. According to the census of 2001, the tribal population in India is 67.76 million constituting 8.08 percent of total population. There are about 449 Tribes and sub – Tribes in different parts of India. Most of the Tribes live in well defined but isolated hilly areas, which are often inaccessible and relatively underdeveloped and poorly integrated with the rest of the nation. Hence, tribal communities in Nilgris district also followed distinctive culture. The present study was conducted in The Nilgris in two blocks viz., girl children in five groups of tribes namely Todas, Kotas, Kurumbas, Paniyas and Kattunayakans sample of six hundred respondents from each group of tribals from two blocks viz., Udagamandalam and Kothagiri. The locale of the study was confined to two blocks limits on the grounds of easy collection of data and time constraint. The total sample consisted of 600 respondents were selected by adopting purposive random sampling technique. The present study is based on primary data, by administering an interview schedule to the selected respondents to collect the information required. The interview schedule was first pre-tested to check for clarity and specificity and the necessary modification were made on the basis of the experience gained during pre-testing. The field investigation and data collection for the study were carried out during the period from November 2010- January 2011. Data collection were tabulated and analyzed for the purpose of giving precise and concise information. Central Government and state Government offices, Universities, hospitals, colleges, schools and other offices where women were employed extended their cooperation. RESULTS AND DISCUSSIONS For the first time in the year 1899, the British Government, on the basis of the report of the educational authorities, established on the higher altitude of The Nilgris hill, a few special schools for indigo communities like Badagas, Kotas and Todas, Considered by them as the backward classes.

Blocks

Population

Pandalur

32.08

Kothagiri

24.10

Gudalur

14.33

200

BLOCKS AND POPULATION OF SCHEDULED TRIBES IN THE NILGIRIS DISTRICT


TABLE- 1


Kundah

13.16

Udhagamandalam

9.27

Coonoor

6.96

Source: Tribal education Status Documentation, (2010- 11) The above table shows that, Pandalur block has higher percent of the tribes (32 %) next to Kothagiri (24 %) and least percent of the tribes belong to Coonoor block. TABLE- 2 STATUS OF FORMAL EDUCATION AND ACHIEVEMENT OF TRIBES 10th passed

Literates

M

F

M

F

M

F

M

F

M

F

M

F

Todas

580

467

316

285

48

41

29

32

4

12

0

3

Kotas

450

628

512

395

75

54

46

45

25

18

9

6

Kurumbas (Alu)

1919

2832 1491 645 109

112

92

75

2

-

-

-

Kurumbas (Jenu)

233

196

62

79

15

12

6

4

-

-

-

-

Kurumbas (Betta)

469

511

55

49

19

14

7

6

-

-

-

-

Kurumbas (Mullu)

305

486

290

165

85

45

41

35

7

4

3

-

Kurumbas (Urali)

241

261

39

35

16

7

9

6

-

-

-

-

Irula

2399

3320 2010 985 220

240

125

140

9

6

-

-

Paniyas Urban

428

345

163

214 260

172

-

-

-

-

-

-

Paniyas Rural

1559

1565

47

12

1

-

-

-

-

-

-

Paniyas Total

1987

1910

210

226 271

173

-

-

-

-

-

-

11

Graduate

Post graduate


10th failed

Non literates

201

Name of the tribes


Source: a) Tribal Education status Documentation (2010), b) Tribal Research centre (TRC), Hill Area Development Programme (HADP), Udhagamandalam, TamilNadu, and PP.58-66. The selected respondents in the study do not belong to drop out for they have reached up to the secondary school level, passed the examination and managed to get jobs. The parental objectives in educating their children are seen in table-3. TABLE- 3

To get knowledge

To get a while collar job

To get a non-traditional job

To raise income earning capacity

For personal Development

To get a better husband

1+5 above or any other combination with 18 above

4+5 above

Block I

Block II

Udhagamandalam

Kothagiri

66

51

(22.0)

(17.00)

41

110

(13.66)

(36.66)

17

8

(5.66)

(2.66)

69

23

(22.33)

(7.66)

67

88

(22.33)

(29.34)

25

9

(8.34)

(3.00)

7

10

(2.33)

(3.33)

7

-

(2.33) No reply

1

1

202

Parents objectives


PARENTAL OBJECTIVES IN EDUCATING THEIR CHILDERN


Total

300

300

(99.99)

(99.98)

Source: Field Survey The three main reasons for educating their children were i) to get knowledge, ii) to raise income earning capacity and iii) for personal development. The other reasons pointed out by them were, to get white collar job and to get better husband. This means that the parents of respondents who were illiterate had tried to overcome their handicaps by educating their daughters. In table-4, the respondents‟ perception of taking education is presented. The respondents taught education because they wanted employment, higher status in society and attain economic security and also to improve the standard of family and to achieve self satisfaction. TABLE- 4

For employment

For economic security

For getting higher status in society

Education is a goal of life

For improving standard of family

Education is an asset to marriage

For self satisfaction

Block I (Udhagamandalam)

Block II (Kothagiri)

89

93

(29.67)

(31.00)

45

30

(15.00)

(10.00)

52

54

(17.33)

(18.00)

49

47

(16.33)

(15.66)

28

43

(9.33)

(14.33)

6

11

(2.00)

(3.67)

26

21

203

Reasons


RESPONDENTS REASONS FOR TAKING EDUCATION


Other combinations 1+2+3

(8.67)

(7.00)

2

-

(0.66) Not taken higher education

Total

3

1

(1.00)

(0.33)

300

300

(99.89)

(99.99)

Source: Field Survey (Figures in parent thesis show percentage to total) In table-5, the present study establishes the fact that even though a very large number of respondents were aware of the reservation of seats for them a sizeable number of them were not aware of the facilities regarding (a) educational facilities (b) concessions and (c) reservation in government offices offered to them. TABLE- 5

BlockI

BlockII

(Udhagamandalam)

(Kothagiri)

Free concession

28 (9.33)

28 (9.33)

Free uniform

2 (0.66)

1 (0.33)

Free Books

-

1 (0.33)

Government of India Scholarship

-

3 (1.00)

149 (49.66)

93 (31.00)

Fee concession + Educational facilities

1 (0.33)

13 (4.33)

Reservation in government offices

18 (6.00)

5 (1.66)

Not taken

50 (16.66)

51 (17.00)

No reply

52 (17.33)

105 (35.00)

Educational facilities

204

Aware of Reservations


KNOWLEDGE REGARDING RESERVATION OF SEATS FOR SCHEDULED CASTE/SCHEDULED TRIBES


Total

300 (99.997)

300 (99.98)

Sources: Field Survey (figures in parenthesis show percentage to total) Besides scholarships and freeships, educating girls require considerable finance for their maintenance. In the case of the selected respondents, the financial burden for higher education is borne by (a) their parents (b) relatives and (c) scholarships and were aided by parents when required. Lack of achievement drive among the respondents was due to the reasons that they are assured some job by virtue of being Scheduled Tribes. In fact from the responses, the study found that a large group from among these respondents felt that it was their birth right to get such aid from the government. Table-6, explains the financial aid for education. TABLE- 6

Block I

Block II

(Udhagamandalam)

(Kothagiri)

181

250

(60.33)

(83.33)

30

12

(10.00)

(4.00)

4

1

(1.33)

(0.33)

81

37

(27.00)

(12.33)

Other means

-

-

Parents and Husband

-

-

Self

1

-

Parents

Help from relatives

Part time role

Scholarship and parents

(0.33) Parents and relatives

3

-

(1.00)

205

Financed Aid


FINANCIAL AID FOR EDUCATION


No reply Total

-

-

300

300

(99.98)

(99.99)

Source: Field Survey (Figures in parenthesis show percentage to total) DIFFICULTIES FOR PURSUING EDUCATION The difficulties for pursuing education as ranked by the respondents have been tabulated and presented in table-7. TABLE- 7 RESPONDENTS DIFFICULTIES

Could not afford to buy all the books

Instruction through English were difficult to follow Non – receipt of scholarship

Not getting proper food

Economizing on their inadequate scholarship

needs

because

of

Negligence towards studies due to worries and mental disturbance due to lack of finance No difficulties

BlockII (Kothagiri)

117

76

(39.00)

(25.33)

51

27

(17.00)

(9.00)

27

9

(9.00)

(3.00)

8

6

(2.66)

(2.00)

10

8

(3.33)

(2.66)

25

12

(8.34)

(4.00)

40

153

(13.33)

(51.00)


BlockI (Udhagamandalam)

206

Types of difficulties


10

5

(3.33)

(1.66)

12

4

(4.00)

(1.33)

300

300

(99.98)

(99.99)

None of these

No reply

Total

Source: Field Survey (Figures in Parenthesis show Percentage to total) Majority of the respondents stated that their performance suffered due to negligence towards studies due to worries and mental disturbance due to lack of finances. REASONS FOR FINDING STUDIES DIFFICULT Table-8 presents the reasons for finding studies difficult. TABLE- 8

English medium

No guidance

Heavy syllabus

No difficulties

No interest

Block I

Block II

(Udhagamandalam)

(Kothagiri)

70

37

(23.33)

(12.33)

163

103

(54.33)

(34.33)

38

25

(12.66)

(8.34)

14

130

(4.66)

(43.44)

1

1

(0.33)

(0.33)

207

Reasons


REASONS FOR FINDING STUDIES DIFFICULT


2 and 3 above

All 1+2+3

No reply

Total

1

1

(0.33)

(0.33)

12

1

(4.00)

(0.33)

1

1

(0.33)

(0.33)

300

300

(99.97)

(99.99)

Source: Field Survey, Figures in Parenthesis show percent to total Their chief reason seems to be lack of guidance. A few could not cope up with the syllabus as it was too heavy and they could not give enough attention. CORRECTIVE MEASURES FOR DROPOUT SYNDROME 1. Incentive in the form of free books, food and clothing would be useful but should not be freely available. Some work in turn should be extracted from them in the nature of vocational training with available natural resources. 2. Massive community programme could be taken with a view to change the aspiration levels of the disadvantaged children. 3. A mobile school room would be ideal and 4. A crèche attached to the school may lighten the domestic burden of school girls.

208

After independence, the new constitution of free India made untouchability-un lawful, thus providing complete security to Scheduled Caste and Scheduled Tribes section of Indian society. But in reality, insecurity persists in many subtle ways. As a result, the given opportunities were not utilized fully; sometimes they were opposed by their own caste people, which resulted in conflicts, problems and tensions. To conclude, as education of a women brings out change of the entire family Scheduled Caste and Scheduled Tribes girls education should be taken up on a war footing if the unnatural protective discrimination has to come to an end within short period of time.


CONCLUSION


REFERENCE BOOKS Chimis Suma (1981), “A long way to go, ICSSR Allied Publisher Pvt ltd, New Delhi. Rao, Usha (1981), “Deprived Castes in India”, Chugh Publication, Allahabad. JOURNALS Jayaswal, M., Sinha, S.K., Kumari, K. and Arora, A. (2003), Parental Support and Academic Achievement in Tribal School Students of Jharkhand, Journal of All India Association for Educational Research, September, Vol. 15, No.3, Pp: 9-16. Joshi, Ira (2009), “Quality Education for all –The New National Agenda” Kurushetra, 57(9), pp.29-31. Singh and Ohri (1993), “Status of Tribal Women in India” Social Change, Vol.23, No.4, Pp: 21-26.

December,

UshaSree, S., (1980): Social Disadvantage, Academic Adjustment and Socialistic Achievement, Social Change, Vol. 10. No.1& 2. REPORTS Biswajit Ghosh, (2011), “Population change and its consequences: India‟s concerns in the 21st century”, Man and Development Centre for Research in Rural and Industrial Development, Vol.XXXIII, No .1, March, pp.1-18.

Jakka parthasarathy (2008), “The Badagas of the Nilgris District”, Tribal Research Centre, Under the Hill Area Development Programme (HADP), Udhagamandalam, Nilgiris, Tamil Nadu. Jakkar Parthasarathy (2007), “Education and Development among the Tribes – A Study of Formal Education and Tribal Girl Child Dropouts in the Nilgris District, Tamil Nadu”, Tribal Education Status Documentation, Tribal Research Centre (TRC) Under the Hill Area Development Programme (HADP), Udhagamandalam, Nilgiris, Tamil Nadu.

209

Jakka parthasarathy (2003), “ Irula women and Empowerment in Nilgris District, Tamil Nadu, A study on Alternatives for Tribal Development, Tribal Women Empowerment Documentation”, Tribal Research Centre (TRC), Under the Hill Area Development Programme (HADP), Udhagamandalam, Nilgiris, Tamil Nadu.


Government of India (2008) “Eleventh Five Year Plan 2007-2012”, Vol.1 and 2, Planning Commission, New Delhi.


Tilak J.B.G. (2006), “Education – A Saga of Spectacular Achievement and Conspicuous Failures in India: Social Development Report (Council for Social Development)”, Oxford University, New Delhi. UNICEF (2009), “The State of the Worlds Children”, New York. Vinoba Gautam (2003), “Education of tribal children in India and the issue of Medium of Instruction: A Janshala experience Coordinator”, UN/Government Janshala Programme, New Delhi.

210


World Bank (1992-2008), “World Development Report”, Oxford University Press, New York.


RISK MANAGEMENT: THE RELEVANCE OF MARKOWITZ THEORY IN PORTFOLIO MANAGEMENT K. BHAVANA RAJ*; DR. SINDHU**; DR. M. JAYASREE***; DR. S.SUMAN BABU*** *Senior Research Fellow, School of Management Studies, Jawaharlal Nehru Technological University, Hyderabad, Kukatpally, India. **Associate Professor, School of Management Studies, Jawaharlal Nehru Technological University, Hyderabad, Kukatpally, India. ***Assistant Professor, Hyderabad Business School, GITAM University, Hyderabad, India. ****Assistant Professor, Hyderabad Business School, GITAM University, Hyderabad, India.

ABSTRACT A portfolio is a group of financial assets such as stocks, bonds and cash equivalents, as well as their mutual, exchange-traded and closed-fund counterparts. Portfolios are held directly by investors and/or managed by financial professionals. Portfolio management is the art and science of making decisions about investment mix and policy, matching investments to objectives, asset allocation for individuals and institutions, and balancing risk against performance. The present study attempts to identify optimal portfolio which promises maximum returns for given risk by applying the Markowitz model. The study considers securities of Pharmaceutical and automobile industry in India and attempts to understand by applying the model the selection of optimal portfolio. ______________________________________________________________________________

A portfolio is a group of financial assets such as stocks, bonds and cash equivalents, as well as their mutual, exchange-traded and closed-fund counterparts. Portfolios are held directly by investors and/or managed by financial professionals. Portfolio management is the art and science of making decisions about investment mix and policy, matching investments to objectives, asset allocation for individuals and institutions, and balancing risk against performance. Portfolio management is all about strengths, weaknesses, opportunities and threats in the choice of debt vs. equity, domestic vs. international, growth vs. safety, and many other tradeoffs encountered in the attempt to maximize return at a given level of risk. PROCESS OF PORTFOLIO MANAGEMENT The Portfolio Management is a process which involves six stages. These stages include 1.

Identification of goals and objectives of portfolio management.

2. Determination of optimal investment mix.


INTRODUCTION

211

3. Customization of investment policy


4. Selection of investment 5. Monitoring of progress 6. Assessment of performance. The first step in the process of portfolio management is identifying the goals and objectives of the portfolio. Each individual investor has his own goal which could be regular returns or capital appreciation. The portfolio mix also depends upon the objectives. The portfolio mix is based on the goals identified. The next process is customizing the policy to the needs of the investment plan. The selection of investment is then done. Once the selection process is complete the progress is monitored and then the goals may be reassessed.

OBJECTIVES OF THE STUDY

3. To analyze individual security risk and portfolio risk. RESEARCH METHODOLOGY The data for the purpose of the study was collected from Bombay stock exchange website. The companies taken in the sample includes four companies two from pharmaceutical namely Dr. Reddy’s Laboratories and Sun Pharmaceuticals and other two from Automobiles which include Hindustan Motors and Hero Honda. The study covers five years from 2006 to 2010. The Markowitz model has been used for analyzing individual returns and portfolio returns. The model was also used to analyze individual risk and portfolio risk. The study attempts to understand how

212

2. To analyze returns of individual security and portfolio returns.


1. To understand the optimal portfolio mix based on returns and risk factors.


individual risk varies with portfolio risk. The study also makes an attempt to analyze how portfolio returns vary from individual returns. REVIEW OF LITERATURE Zia Mohiuddin Ansari (2006) applied the theory of Markowitz and CAPM to study the efficient management of portfolio of ships and shipping securities. Marc A. Louargand (1992) Studied largest institutional portfolios on portfolio management practices relating to diversification strategies, risk measurement, and evaluation of investment returns with particular reference to pension funds and real estate portfolios. Chao Chen (2001) in his paper examines three important issues related to the relationship between stock returns and volatility. First, the relationship between individual stock returns and volatility is examined at the portfolio level. Second, the seasonality of the market returns volatility. Lastly, relationship between the size of portfolio returns and symmetrical reaction to the market volatility during business cycles is examined. It is found that the market volatility exhibits strong autocorrelation and small size portfolio returns exhibit seasonality. However, this phenomenon is not present in large size portfolios. Carlos Castro (2010) in his article applied parametric portfolio policy approach to optimizing portfolios with large number of assets. The study attempts to test the importance of local factors in portfolio optimization. Holger Kraft (2007) works on the assumption that the investor and manager have homogenous expectations about the investment opportunity set. MARKOWITZ MODEL Markowitz provided a conceptual framework for selection of an optimal portfolio. The model shows how an investor can construct an optimal portfolio. The optimal portfolio is constructed based on returns and risk factors. The model is based on the following assumptions. 1. An investor is basically risk averse.

4. An investor attempts to get maximum return from the investment with minimum risk. The formula for risk that is standard deviation for two securities is as follows

= √(x1)2 (1)2 + (X2)2 (2)2 + 2(X1)(X2)(r12)(1) (2)

213

3. The decision of the investor for selection of the portfolio is made on the basis of expected returns and risk.


2. The risk of a portfolio is estimated on the basis of variability of expected returns of the portfolio.

ZENITH International Journal of Business Economics & Management Research Vol.1 Issue 2, Nov 2011, ISSN 2249 8826 Online available at http://zenithresearch.org.in/ p  Standard

deviation of the portfolio return

X1= proportion of the portfolio invested in security 1 X2= proportion of the portfolio invested in security 2 1= standard deviation of the return on security 1 2= standard deviation of the return on security 2 r12= coefficient of correlation between the returns on securities 1 and 2 MEASURING THE EXPECTED RETURN The expected return on a portfolio is the weighted average of the returns of individual assets, where each asset's weight is determined by its weight in the portfolio. THE FORMULA IS E (Rp) = [WaX E (Ra)] + [WaX E (Ra)] Where E (Rp) = is stands for expected Return on the portfolio Wa= Weight of asset n where n my stand for asset a, b…etc. Ra= Return on asset n where n may stand for asset a, b…etc The data collected is analyzed by using these formulas and optimal portfolio is designed. DATA ANALYSIS & INFERENCES CALCULATION OF AVERAGE RETURN OF COMPANIES

Opening share price (P0)

Closing share price (P1)

(P1-P0)

(P1-P0)/ P0*100

2006

986

811.2

-174.8

-17.73

2007

814

735.35

-78.65

-9.66

2008

735

469.75

-265.6

-36.14

Year

214

TABLE-1: DR. REDDY’S LABORATORIES LTD


Average return = ∑ R/N


2009

475

1143.8

668.8

140.8

2010

1140

1662.55

522.55

45.84

TOTAL RETURN

123.11

AVERAGE RETURN (∑ R/N )

123.11 / 5

24.61

Dr. Reddy’s witnessed negative returns for the first three years from 2006 to 2008. The negative returns were highest for 2008 which was -36.14. The year 2009 has registered highest returns which was 140.8%. In 2010 however the returns were 45.84%. The average returns of the company were 24.62% TABLE-2: SUN PHARMACEUTICAL INDUSTRIES LTD Opening share price (P0)


(P1-P0)

(P1-P0)/ P0*100

2006

672

979

307

45.68

2007

985

1222.05

237.05

24.01

2008

1217.9

1064.95

-152.95

-12.56

2009

1070

1507.10

437.10

40.85

2010

1538

484.65

-1053.35

-68.49 29.49


29.49 / 5

5.90

In the year 2006 the returns of the company was 45.68% this has come down to 24.01% in 2007. The company registered a negative return in 2008. In 2009 the returns were 40.85%. However in 2010 the returns turned negative. The average returns of the company were 5.9%. TABLE-3: HINDUSTAN MOTORS LTD Year 2006

Opening share price (P0)


(P1-P0)

(P1-P0)/ P0*100

30.50

34.00

3.50

11.48


TOTAL RETURN

215

Year


2007

34.45

61.05

26.60

77.21

2008

61.30

13.08

-48.22

-78.66

2009

13.15

23.65

10.5

79.84

2010

24.00

24.40

0.40

1.67

91.54 / 5

18.31

TOTAL RETURN AVERAGE RETURN (∑ R/N )

The company registered negative returns only for the year 2008. For all the years the returns were positive. The year 2007 witnessed highest returns. The average returns were 18.31%. TABLE-4: HERO HONDA MOTORS LTD Opening share price (P0)


(P1-P0)

(P1-P0)/ P0*100

2006

860

762.35

-97.65

-11.35

2007

760

697.65

-62.35

-8.20

2008

698

805.10

107.10

15.34

2009

800

1716.45

916.45

114.56

2010

1739

1986.10

247.10

14.21

124.56 / 5

24.91

Year

The company had negative returns for 2006 and 2007. From 2008 onwards the company had positive returns. The highest returns were witnessed for the year 2009. The average returns of the company were 24.91%.

216



TOTAL RETURN


MEASUREMENT OF RISK CALCULATION OF STANDARD DEVIATION √ Variance

Standard Deviation = Variance

=

1/n-1 (∑d2)

TABLE-5 DR. REDDY’S LABORATORIES LTD d= Year

Return (R)

D2

Avg. Return (R¯ ) (R-R¯)

2006

-17.73

24.61

-42.35

1793.52

2007

-9.66

24.61

-34.28

1175.12

2008

-36.14

24.61

-60.76

3691.78

2009

140.8

24.61

116.18

13497.79

2010

45.84

24.61

21.22

450.29 ∑d2=20608.5

TOTAL

Variance = 1/n-1 (∑d2) = 1/5-1 (20608.5) = 5152.13

Standard Deviation =

Variance

= 5152.13

=

71.78

d= Year

Return (R)

Avg. Return (R¯ )

D2

(R-R¯) 2006

45.68

5.90

39.78

1582.45

2007

24.01

5.90

18.11

327.97

2008

-12.56

5.90

-18.46

340.77

217

TABLE-6: SUN PHARMACEUTICAL INDUSTRIES LTD


The standard deviation of the company is 71.78. This shows the company has highest risk factor.


2009

40.85

5.90

34.95

1221.50

2010

-68.49

5.90

-74.39

5533.87 ∑d2=9006.56

TOTAL

Variance = 1/n-1 (∑d2) = 1/5-1 (9006.56) = 2251.64


Variance

= 2251.64

=

47.45

The standard deviation is 47.45 and variance is 2251.64. The risk is lower when compared to Dr. Reddy’s laboratories. TABLE-7: HINDUSTAN MOTORS LTD d= Year

Return (R)

D2


2006

11.48

18.31

-6.83

46.65

2007

77.21

18.31

58.9

3469.21

2008

-78.66

18.31

-96.97

9403.18

2009

79.84

18.31

61.53

3785.94

2010

1.67

18.31

-16.64

276.89

Standard Deviation=

Variance

= 4245.47

The standard deviation is 65.16 and variance is 4245.47.

=

65.16

218

Variance = 1/n-1 (∑d2) = 1/5-1 (16981.87) = 4245.47


∑d2=16981.87

TOTAL


TABLE-8: HERO HONDA MOTORS LTD d= Year

Return (R)

D2


2006

-11.35

24.91

-36.26

1314.79

2007

-8.20

24.91

-33.11

1096.27

2008

15.34

24.91

-9.57

91.58

2009

114.56

24.91

89.65

8037.12

2010

14.21

24.91

-10.7

114.19 ∑d2=10653.95

TOTAL

Variance = 1/n-1 (∑d2) = 1/5-1 (10653.95) = 2663.49


Variance

= 2663.49

=

51.61

The standard deviation is 51.61 and variance is 2663.49. The risk is lower when compared to Hindustan Motors Ltd. Calculation of Correlation between two Companies Covariance (COVab) = 1/(n-1) (∑dx.dy)

YEA R

2006

Dev. Of Dr. Laboratories

Reddy’s Dev. Of Sun Industries Ltd

Product Pharmaceutical dev. (dx)(dy)

(dx)

(dy)

-42.35

39.78

-1684.68

of

219

TABLE-9: DR. REDDY’S LABORATORIES LTD & SUN PHARMACEUTICAL INDUSTRIES LTD


Correlation of coefficient = COVab / σx* σy


2007

-34.28

18.11

-620.81

2008

-60.76

-18.46

1121.63

2009

116.18

34.95

4060.49

2010

21.22

-74.39

-1578.55 ∑dx. dy =

TOTAL

1298.08

COVab

= 1/(5-1)(1298.08) = 324.52

Correlation of coefficient = 324.52/71.78*47.45 = .01 The coefficient of correlation is .01. Indicating that, there is minimum correlation between the two. TABLE-10 HINDUSTAN MOTORS LTD & HERO HONDA MOTORS LTD

2006

-6.83

-36.26

247.66

2007

58.9

-33.11

-1950.18

2008

-96.97

-9.57

928.01

2009

61.53

89.65

5516.16

2010

-16.64

-10.7

178.05 ∑dx. dy =

TOTAL

4919.7

of


YEA R

Product Dev. Of Hindustan Motors Dev. Of Hero Honda Motors dev. Ltd Ltd (dx)(dy) (dx) (dy)

220

COVab =1/(5-1)(4919.7) = 1229.93


Correlation of coefficient = 1229.93/65.16*51.61 = 0.36 The correlation of Hindustan Motors Ltd & Hero Honda Motors Ltd is 0.36. CALCULATION OF PORTFOLIO WEIGHTS Deriving the minimum risk portfolio, the following formula is used: WA =

(σb)2 - rab (σa) (σb) (σa)2 + (σb)2 – 2rab (σa) (σb)

Where, Xa is the proportion of security A Xb is the proportion of security B σa = standard deviation of security A σb = standard deviation of security B rab = correlation co-efficient between A&B DR. REDDY’S LABORATORIES LTD & SUN PHARMACEUTICAL INDUSTRIES LTD Xa =

(47.45)2- (0.01) (71.78) (47.45) (71.78)2 + (47.45)2 -2 (0.10) (71.78) (47.45) = 0.30 Xb = 1-Xa

= 0.70 CALCULATION OF PORTFOLIO WEIGHTS HINDUSTAN MOTORS LTD & HERO HONDA MOTORS LTD Deriving the minimum risk portfolio, the following formula is used: (σb)2 - rab (σa) (σb) (σa)2 + (σb)2 – 2rab (σa) (σb)

221

WA =


= 1-0.30


Where, Xa is the proportion of security A Xb is the proportion of security B σa = standard deviation of security A σb = standard deviation of security B rab = correlation co-efficient between A&B (51.61)2- (0.0.36) (65.16) (51.61)

Xa =

(65.61)2 + (51.61)2 -2 (0.36) (65.61) (51.61) = 0.32 Xb = 1-Xa = 1-0.32 = .68 CALCULATION OF PORTFOLIO RETURN Rp = W1R1 + W2R2 (for two securities) Where, W1, W2 are the weights of the securities R1, R2 are the Expected returns

= 11.51 HINDUSTAN MOTORS LTD & HERO HONDA MOTORS LTD Rp = (0.32) (18.31) + (0.68) (24.91) = 22.8

222

Rp = (0.30) (24.61) + (0.70) (5.9)


DR. REDDY’S LABORATORIES LTD & SUN PHARMACEUTICAL INDUSTRIES LTD


The combination of Hindustan Motors Ltd & Hero Honda Motors Ltd is more when compared to Dr. Reddy’s Laboratories Ltd & Sun Pharmaceutical Industries Ltd. However decision cannot be taken only by returns the portfolio risk also should be analyzed. PORTFOLIO STANDARD DEVIATION CALCULATION OF PORTFOLIO RISK FOR TWO SECURITIES σP =

σa2*(Xa) 2 + σb2*(Xb) 2 + 2rab*σa*σb*Xa*Xb

Where, σP = portfolio risk Xa = proportion of investment in security A Xb = proportion of investment in security B R12 = correlation co-efficient between security 1 & 2 σa = standard deviation of security 1 σb = standard deviation of security 2 The portfolio standard deviation of Dr. Reddy’s Laboratories Ltd & Sun Pharmaceutical Industries Ltd is σp = √(71.78)2 *(0.30)2 +(47.45)2 *(0.70)2 +2(0.01)(71.78)(47.45)(0.30)(0.70) = √2997.45 = 54.75

σp = √(65.16)2 *(0.32)2 +(51.61)2 *(0.68)2 +2(0.36)(65.16)(51.61)(0.32)(0.68) = √2193.28 = 46.83 The combined risk of Hindustan Motors Ltd & Hero Honda Motors Ltd is 46.83 and combined returns are 22.8. Therefore this is optimal portfolio as per Markowitz theory.

223

Calculation of portfolio risk for Hindustan Motors Ltd & Hero Honda Motors Ltd


The combined risk is 54.75 and return of the portfolio is 11.51%.


CONCLUSION The study revealed that portfolio risk can be minimized and returns can be maximized by proper selection of portfolio. The Markowitz theory helps in selecting a portfolio with maximum returns and minimum risk. The theory helps in management of risk through proper selection of portfolio. The standard deviation of Dr. Reddy’s is 71.78 and for Sun Pharmaceuticals is 47.45. The combined standard deviation is 54.75. The individual returns of Dr. Reddy’s and Sun Pharmaceuticals are 24.61 and 5.9 respectively. The portfolio returns of the same are 11.51. This portfolio does not promise returns as per the risk involved therefore cannot be taken as ideal portfolio. The standard deviation of Hindustan Motors is 65.16 and for Hero Honda is 51.61. The combined standard deviation is 46.83. The individual returns of Hindustan Motors and Hero Honda are 18.31 and 24.91 respectively. The portfolio returns are 22.8. This is an ideal portfolio as it promises more returns and risk is less when compared with the portfolio of Dr. Reddy’s and Sun Pharmaceuticals. The study therefore proves that Markowitz model helps in management of risk and selection of ideal portfolio. REFERENCES 1. Chow G., Jacquier E., Kritzman M., and K. Lowry (1999) "Optimal Portfolios in Good Times and Bad Times" Financial Analysts Journal, vol. 55, no.3, (March/June): 65-73. 2. Dybvig, P., Farnsworth, H.K., Carpenter, J.N. “Portfolio performance and agency” Working Paper, Washington University in Saint Louis (2001) 3. Ansari Mohiuddin Zia, Portfolio Risk Manage ment in Shipping real assets and shipping security assets, Eramus University Rotterdam, 2006. 4. Louargand A. Marc, A survey of pension fund real estate portfolio risk management practices, Centre for real estate, Massachusetts Institute of technology, Cambridge, July 1992.

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Zhou Guo Zhong, Chen Chao, Portfolio returns, Market volatility and seasonality Kluwar Academic Publishers, Netherlands, 2001.

8. Donald E. Fischer, Ronald J. Jordan, SAPM, 1999, Sixth Edition, Portfolio Analysis, page no: 559-588. 9. Punithavathy Pandian, Security Analysis & Portfolio Management , 2007, Portfolio Markowitz Model, page no: 329 -349.

224

6. Kraft Holger, Continuous – Time delegated portfolio management with homogenous expectations: can an agency con flict be avoided, Swiss Society for financial markets, 2007.


5. Caster Carlos, “Portfolio Choice Under Local Industry and Country Factors” Swiss Society for financial markets 12 th October 2010.


10. Prasanna Chandra, Investment Analysis & Portfolio Management , 2006, Second edition, Portfolio Return & Ri sk, page no: 244-251. Management,Sultan Chand

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225

11. Rustagi R. P., Delhi,2005