(a conceptual study) 12 no.02.pdf · enhancing lifestyles (a conceptual study) priya angle |...

ISSN: 0973-9165OCTOBER 2016 - MARCH 2017 Vol: 12. No: 2

Disruptive Technologies:Breaking Boundaries,Transforming Work, Enhancing Lifestyles (A Conceptual Study)

Priya Angle | Bhaswati Biswas

E-marketplaces:The New Mantra of Farmer-Centric Agri Business Marketing in Karnataka

Dr. S Manoharan Rachana Pujar|

Digital India:A Proposal to Bring Transparency in Agricultural Supply Chains?

Dr. Y.T Krishnegowda | Nagaraj BV

Employee Response to Dimensions of Internal Branding:A literature review

Dr. Githa Heggde Gayatri Sasi Tampi|

Impulse Response of Economic Growth to Renewable Energy Shocks: Indian ScenarioDr. B.Venkatraja

HR Analytics:A Big Deal for C-Suite in Talent Management

Mohamed Minhaj | L. Gandhi, M. A

www.ifimbschool.com

Employability Skills: A Comparative Study of Students from Metro and Tier-II cities in India

Archana Shrivastava Manujata Midha Richa Verma| |

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2 IFIM International Journal of Management FOCUS October 2016 - March 2017|

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3IFIM International Journal of Management FOCUS | October 2016 - March 2017

From the Editor's Desk

Chief Editor - FOCUS

Dr. Githa Heggde

Dear Readers,

Happy to release FOCUS, IFIM’s International Journal of Management, Vol 12, No 2.

This issue includes outcome of contemporary management challenges such as

disruptive technologies and its impact on lifestyle, ecommerce for agribusiness,

Analytics for talent management, study on Internal Branding. Papers vary from

conceptual to empirical studies and are insightful.

The theme paper titled, “Impulse Response of Economic Growth to Renewable

Energy Shocks: Indian Scenario” highlights the Share of renewable energy

consumption in total energy consumption and share of renewable electricity output in

total energy output as proxies to renewable energy and economic growth. Linear

multiple regression model, variance decomposition and impulse response function

techniques have been applied to estimate the impact.

We thank you all for patronizing FOCUS Journal and acknowledge the contribution

made by Authors, Reviewers and Editorial board Members


Index


Impulse Response of Economic Growth to Renewable Energy Shocks: Indian Scenario

Employee Response to Dimensions of Internal Branding: A literature review

E-marketplaces: The New Mantra of Farmer-Centric Agri Business Marketing in Karnataka

Digital India: A Proposal to Bring Transparency in Agricultural Supply Chains?

HR Analytics: A Big Deal for C-Suite in Talent Management

Disruptive Technologies:Breaking Boundaries, Transforming Work, Enhancing Lifestyles (A Conceptual Study)


S.No. Title and Name of the Author Page No.

1

Dr. B.Venkatraja

Dr. Githa Heggde | Gayatri Sasi Tampi

Priya Angle | Bhaswati Biswas

Dr. S Manoharan | Rachana Pujar

Dr. Y.T Krishnegowda | Nagaraj BV

Mohamed Minhaj | L. Gandhi, M. A

2

3

4

5

6

7

Archana Shrivastava | Manujata Midha | Richa Verma

06-10

11-17

18-27

28-37

38-43

44-50

51-58

Impulse Response of Economic Growth to Renewable Energy Shocks: Indian Scenario

*Assistant Professor of Economics, Shri Dharmasthala Majunatheshwara Institute for Management Development (SDMIMD), MysoreEmail: [email protected].

Dr. B.Venkatraja*

Abstract

Introduction

There is a growing urge from among the global community to

sustain the growth by adopting more of renewable energy

practices since the Kyoto Protocol Agreement, 1997. In a bid to

reduce greenhouse gas emissions, many countries particularly

developed economies have increased the production and

consumption of renewable energy in absolute terms and its

proportion to total energy mix as well. Different hypotheses have

been developed by the theorists on the relationship between

renewable energy and economic growth. One of the prominent

hypotheses in the literature is the growth hypothesis which

propounds that increased share of renewable energy to total

energy mix depresses the economic growth. At this backdrop the

present paper studies the impact of shocks in renewable energy on

economic growth in India and tests the growth hypothesis. The

study employs the secondary data covering the period 1991-2012.

Share of renewable energy consumption in total energy

consumption and share of renewable electricity output in total

energy output have been considered as proxies to renewable

energy and economic growth is measured by GDP per capita.

Linear multiple regression model, variance decomposition and

impulse response function techniques have been applied to

estimate the impact. Results of the study support the growth

hypothesis reflecting that increased share of renewable energy in

total energy tend to adversely affect economic growth in India.

With the emergence of the greater need for 'welfare state' across

the world, developed and emerging economies accelerated

industrialisation and other economic activities which have

created two major challenges. Firstly, fast depletion of non-

renewable energy sources like petrol, diesel, gas and coal with their

Key words: Impulse Response, variance decomposition, GDP per capita, renewable energy, India

ever increasing consumption. Secondly, global warming caused by

the emissions of greenhouse gases like carbon dioxide and

methane. These energy challenges have shifted the focus heavily

towards renewable energy. Renewable energy sources are clean

and sustainable unlike conventional energy. There is a growing

urge from among the global community to sustain the growth by

adopting more renewable energy practices since the Kyoto

Protocol Agreement, 1997. In a bid to reduce greenhouse gas

emissions, many countries particularly developed economies have

increased the production and consumption of renewable energy

in absolute terms and its proportion to total energy mix as well.

With the changed energy dynamics, the impact of increased

consumption of renewable energy on economic growth is to be

researched.

The dynamics of relationship between renewable energy and

economic growth is highly debated and led to the emergence of

four different hypotheses. The growth hypothesis believes that

energy conservation policies and increased consumption of

renewable energy may adversely affect the economic growth. It is

argued that economic growth is largely dependent on the

traditional energy sources. In contrast, conservation hypothesis

advocates that energy conservation policies or increased

renewable energy consumption may have very little or no impact

on economic growth. The feedback hypothesis reflects the

interdependence and complementarities among the energy

conservation and economic growth. The neutrality hypothesis

implies that energy conservation policies/ increased renewable

energy consumption will leave insignificant impact on economic

growth with the absence of the causal relation running from

renewable energy consumption to economic growth.

Given the emergence of significance for renewable energy for a

sustainable future, it is pertinent to understand the nature and


size of impact of renewable energy on economic growth. The

current study attempts to address the same. This study, unlike

many of the previous works, disaggregates energy into renewable

and non-renewable and investigates their impact on economic

growth. Thus the objective of the study goes into finding out the

variability and response of economic growth for the shocks in

renewable energy variable over the long run.

The study of Menegaki (2011) by using a random effect model to

cointegration and a panel error correction model framework to a

group of 27 European countries support the neutrality

hypothesis, implying that the lower levels of renewable energy

consumption across Europe cannot play a significant role in

promoting economic growth. Lean and Smyth (2013) examined

the relationship between disaggregated energy consumption by

fuel type and economic growth in Malaysia. The main finding is

that diesel and motor petrol are the major contributors to

economic growth in the long-run. The results suggest that the

challenge for Malaysia will be to replace diesel and petrol with

cleaner biodiesel alternatives, which will not adversely affect

Malaysia's growth rate. This empirical result supports the

conservative hypothesis. Fang (2011) empirically investigated the

impact of renewable energy consumption on the economic

growth using Cobb–Douglas production functions for China

from 1978 to 2008. From the multivariate ordinary least squares

method it is found that a 1 percent increase in renewable energy

consumption increases real GDP by 0.12 percent.

Lotz (2013) estimated the impact of the renewable energy

consumption on economic welfare by using panel data

techniques. The results showed that the influence of renewable

energy consumption or its share to the total energy mix to

economic growth is significantly positive. The study led to the

inference that promoting renewable energy bears benefits not

only to the environment but also to the economic growth of the

countries.

Ikhide and Adjasi (2015) investigated the causal link between

renewable and non-renewable energy sources and economic

growth in Nigeria. The study employed quarterly time series data

for the period of 1971-2013. The model had real GDP as a

dependent variable and energy as an independent variable. The

Granger causality test found that causality runs from renewable

energy to real GDP. The impact of renewable energy on real GDP

appears to be positive as obtained from the ordinary least squares

test. The elasticity values showed that a unit change in renewable

energy increases economic growth by 19 percent, while it is 8

percent in case of non-renewable energy.

Cetin (2016) investigated the long-run relationship between

renewable energy consumption and economic growth for E-7

countries over the period 1992–2012 by heterogeneous panel data

analysis techniques. According to the result, renewable energy

consumption has a positive impact on real GDP in E-7 countries

in the long run. In a similar study Tiwari (2011) also arrived at

similar results. His study focussed on the comparative

performance impact of renewable and non-renewable energy on

economic growth in Europe and Eurasian countries. The study

Review of Literature

reveals that while the growth rate of non-renewable energy

consumption has a negative impact, the growth rate of renewable

energy consumption has a positive impact on the GDP growth

rate.

Ferroukhi et.al. (2016) analysed the impact of renewable energy

deployment on the economies across the globe and arrived at the

similar results of Lean and Smyth (2013) and Ikhide and Adjasi

(2015). This study demonstrates that scaling up renewable energy

is cost competitiveness. The study observes that increased

deployment of renewable energy can meet the energy needs of the

growing population, drive development and improve well-being.

It also reduces greenhouse gas emissions and increases natural

resource productivity. The study outcome provides empirical

evidence that economic growth and environmental conservation

are compatible, and that the conventional consideration of trade-

off between the two is outdated and erroneous.

Silva et.al. (2012) analysed the impact of increasing share of

renewable energy sources on electricity generation (RES-E) on

Gross Domestic Product (GDP) and Carbon Dioxide (CO2)

emissions using a 3 variable Structural Vector Autoregressive

(SVAR) methodology. The study was conducted for four countries

- the USA, Denmark, Spain and Portugal for the period 1960 to

2004. The impulse response function estimation showed that, for

all countries in the sample, except for the USA, the increasing

share of renewable energy sources had economic costs in terms of

GDP per capita which in turn is the acceptance of growth

hypothesis. The variance decomposition showed that a significant

part of the forecast error variance of GDP per capita was explained

by the share of renewable energy sources.

Apergis and Danuletiu (2014) examined the relationship between

renewable energy and economic growth for 80 countries using

long-run causality test, which indicates that there is long-run

positive causality. The findings of the study support feedback

hypothesis with strong evidence to conclude that renewable

energy is important for economic growth. Further, economic

growth encourages the use of more renewable energy source.

Leitao (2014) also examined the correlation between economic

growth, carbon dioxide emissions, renewable energy and

globalization. The results demonstrated the existence of a strong

and positive link between renewable energy and economic

growth.

Though a large plethora of literature is available on the

relationship between renewable energy and economic growth, the

current study is unique in three ways: Firstly, the available

evidence from the empirical results on the dynamics of

relationship between renewable energy and economic growth is

inconclusive. Different studies support different hypothesis. This

creates scope for a reinvestigation on the impact of changed share

of renewable energy in the total energy produced and consumed

on the economic growth. The present study would focus largely on

testing the growth hypothesis of energy conservation. Secondly,

very limited number of empirical studies were conducted on this

specific issue in Indian context and this makes the case for the

study. Thirdly, the study applies three estimation techniques-

multiple linear regression analysis, variance decomposition and

impulse response function. Each technique validates the result of

the other and provides comprehensive understanding on the


nature and extent of variability in economic growth caused by

shocks in renewable energy in India.

Variables:

In the present study, renewable energy has been measured by two

proxy variables: clean energy and sustainable energy. Clean energy

is measured by share of renewable electricity in total energy

output. Sustainable energy is measured by share of renewable

energy consumption in total energy consumption. Both the

energy variables are taken into study in per capita unit. The

economic growth is measured by GDP per capita.

Data:

The present study uses time series data of the variables selected for

Indian situation from secondary sources. The essential data are

procured from World Development data base. The study covers

annual data from 1991 to 2012. Recent years' data are excluded as

they are unavailable.

Model Specification & Estimation Techniques:

To meet one of the objectives of the study i.e., to assess the impact

of renewable energy on economic growth, multiple linear

regression model is estimated. The model estimated for impact

analysis is:

Methodology

In this model, GDP/c is per capita GDP, REC is the share of per

capita renewable energy consumption in total energy

consumption, and REO is the share of per capita renewable

electricity in total energy output. Whereas, b1 and b2 are the

elasticity coefficients of independent variables, a is the constant of

the model and e is the error term of the model.

Although regression model shows the relationship between the

variables and the impact of independent variables on the

dependent variables, it does not sufficiently answer on what is the

extent of impact of one variable on the other. Further, it does not

explain how much variability in the dependent variable is caused

by the shocks of independent variables and how much is owing to

its own shocks. The variability of GDP per capita over the long

period of time for the volatility in renewable electricity output and

renewable energy consumption as well as GDP per capita itself is

measured through Variance Decomposition.

Impulse response function verifies the results of variance

decomposition. The impulse response explains the

responsiveness of the endogenous variable in the system to shocks

to each of the other endogenous variables. For each endogenous

variable in the system, a unit shock is applied to the error, and the

effects over time are noted. Impulse response function reflects the

percentage change in GDP per capita for a given percentage

change in the renewable energy variables in the long run.

The review of literature and theoretical framework has prompted

the testing of two hypotheses in this study.

Hypotheses:

1. Renewable energy consumption (sustainable energy)

does not adversely affect economic growth.

2. Renewable electricity output (clean energy) does not

have significant impact on the economic growth in

India.

Impact of Renewable Energy on Economic Growth

Inorder to meet the objective of bringing out the impact of

renewable energy on economic growth, multiple linear regression

model is estimated. The results are presented in Table-1.

Result Analysis and Discussion

Table - 1. Estimation of renewable energy - growth model.

Predictors Beta coefficients t sig VIF

Constant

22.896

26.087

.000

REC

- 4.242

- 19.269

.000 1.059

REO

0.022

0.133

0.895 1.059

R2

= 0.954

Adj.

R2

= 0.949

D- W = 0.688

F= 196.053, Sig. =.000

GDP/c is the dependent variable

From the results it appears that the model explains 95 percent of

the changes in the GDP per capita. The Durbin – Watson statistic

value confirms the goodness of fit of the model. Multiple

regression estimation may sometimes result in wrong inferences if

the predictors are correlated. The current study tested for the

multicollinearity using Variance Inflation Factor (VIF) method

and it has been found that the model is free from such

multicollinearity issues as predictors are not correlated which is

evident from low VIF. The reliability of the model is

authenticated by high and significant F value. From the results,

the regression model can be written as:

GDP/c = 22.89 - 4.24 REC + 0.022 REO + e

The constant has positive sign as expected. However, the

coefficient value of renewable energy consumption is negative.

This reflects that increased share of renewable energy in the total

energy consumption has negative impact on the growth. Further

the size of impact is large. The regression model estimates that one

percent increase in the share of renewable energy consumption in

the basket of total energy consumption, the per capita GDP

decreases by more than four percent. The result supports the

growth hypothesis which advocates that more of energy

conservation and increased consumption of renewable energy

adversely affects economic growth.

Significantly, the result appears to be statistically significant as

reflected in the regression result table-1. Owing to this, the first

hypothesis of the study i.e. renewable energy consumption

(sustainable energy) does not adversely affect economic growth - is

rejected. This makes us to infer that sustainable energy has

significant impact on the economic growth. And the impact is

rather negative.

Clean energy is also a very vital component of renewable energy.

Theoretically it is argued that transition from conventional energy


to clean energy would incur very huge fixed cost as well as variable

cost. Increased cost of clean energy is expected to raise the cost of

production, bring down the production and hence affects

employment negatively. The growth hypothesis considers clean

energy as impediment in growth. However, the regression results

provide positive impact of clean energy component i.e. share of

renewable electricity output in total energy output on GDP per

capita. Significantly, the magnitude of impact is very limited. If

the share of renewable electricity output to total energy output

increases by ten percent, the GDP per capita is likely to increase by

a only two percent. Further the impact is not statistically

significant. Hence, the second hypothesis of the study i.e.

renewable electricity output (clean energy) does not have

significant impact on the economic growth in India- is accepted. It

rather supports neutral hypothesis.

The regression model demystifies the impact of renewable energy

on economic growth. Two major inferences could be arrived from

the regression estimation. One, sustainable energy in the form of

increased renewable energy consumption has significant adverse

impact on the growth. Second, clean energy in the form renewable

electricity output does not significantly accelerate the growth of

the economy. Going by the growth hypothesis, renewable energy

does not induce growth may be due to the fact that the initial fixed

capital assets requirement is very high in renewable energy

production as well as utilisation. Technological backwardness and

high costs involved in the production/consumption of renewable

clean and sustainable energy may reduce the economic efficiency

of the production sector. Further, transition from non-renewable

energy to renewable energy in the production sector involves long

run and necessitates transition in the production tools,

equipment, skills of manpower – burdening the production sector

financially. This will affect the growth negatively.

Variance Decomposition of Economic GrowthFrom the regression results it is not known how much variation in

economic growth is caused by its own changes and how much

variation is caused by shocks in the independent variables.

Variance decomposition technique provides such analysis for a

longer period. The results are presented in Table-2.

Table - 2. Variance Decomposition Index of GDP Per capita for REO & REC

Period

Variance Decomposition of

GDP/c

Variance Decomposition of

GDP/c

GDP/c REO GDP/c REC

1 100.0000 0.000000 100.0000 0.000000

2

99.67318

0.326824

99.37967 0.620328

3

99.71255

0.287445

99.50446 0.495543

4

99.20998

0.790025

98.59933 1.400670

5

98.27295

1.727047

97.47981 2.520190

6

97.15069

2.849309

96.32666 3.673344

7

96.01485

3.985152

95.13006 4.869937

8

94.95286

5.047142

94.18396 5.816044

9 93.99811 6.001885 93.49540 6.504604

10 93.15584 6.844163 92.97814 7.021861

The results show how much an economic growth's own shock is

explained by movements in its own variance and in the other

variables viz. renewable electricity output and renewable energy

consumption. It appears from the results that only about 6

percent variability of GDP percapita is accounted for renewable

electricity output shocks over the time horizon. Similarly,

shocks/innovations in renewable energy consumption over the

period of time causes just 7 percent variability in GDP percapita.

Thus, the forecasting error in economic growth is not significantly

explained by the lagged values of either clean energy or sustainable

energy. This supplements regression results.

Impulse Response of GDP/c to Shocks of

Renewable EnergyTo understand the precise size of response of economic growth for

the shocks in the renewable energy in a time horizon, which is not

reflected in the regression, impulse response function is applied.

The impulse response explains the responsiveness of the

endogenous variable in the system to shocks to each of the other

endogenous variables. So, for each endogenous variable in the

system, a unit shock is applied to the error, and the effects over

time are noted. In Figure-1, the impulse responses of GDP per

capita for the given shocks in the renewable energy variables are

presented.

This is evident from the results that future values of GDP per

capita respond significantly but negatively to the shocks of

renewable electricity output. For renewable electricity output

shocks, future values of GDP per capita respond sharply and but

negatively as year progresses. The inverse response of the GDP per

capita to the renewable electricity output is evident from the steep

downward flow of the curve over the period. Whereas, to the

shocks of renewable energy consumption, GDP per capita

responds positively as time progresses. But the response is very

mild and not significant. So, even in the long run renewable


energy does not seem to contribute significantly to the economic

growth in India. The results of impulse response function affirm

the initial conclusion arrived by regression model and variance

decomposition.

Conclusion, Policy Implications and Scope for Future Studies

It is undeniable fact that world has to shift towards renewable

energy to sustain economic growth. The renewable energy policy

initiatives should drive economic growth towards sustainability.

However, the results of the present study do not signal any such

association between renewable energy and growth. Ability of

renewable energy to drive growth of Indian economy appears to be

very limited, rather it affects growth negatively. In the recent

decade, the government has made increasing budgetary allocation

to develop renewable energy sector. Solar energy, wind energy, bio

energy are the focus sectors. But the government investment is not

successful in harnessing the potential renewable energy and

channelise to the growth. The effectiveness of the current

renewable energy policy is to be reviewed at this backdrop. Faulty

renewable energy policies appear to be the major issue. This

argument is strengthened by the fact that despite government

allocations, the share of renewable energy in total energy is

declining over the period of time.

Results have significant policy implications. The policy makers

have to introspect the renewable energy policy of the nation and

retrieve the major factors affecting the growth adversely. Despite

adverse impact, thrust has to continue on renewable energy. To

enable sustained long run growth environmental friendly energy

policies are essential to pursue. To withstand the negative impact

of renewable energy on the growth and make growth more

sustainable, the government may formulate policies which are

more realistic, result oriented and implement them effectively.

Periodic assessment of the project implementation and the

resultant outcome has to be taken up.

The current study offers scope for future research as well. The

present study measures economic growth in terms of GDP per

capita. One of the major limitations of GDP per capita is that it

does not take into account the quality of environment. Future

studies may incorporate variables proxy to environment to reflect

the sustainability of the growth caused by the renewable energy.

Further, study can also be extended to detect the factors affecting

the economic growth adversely with increased share of renewable

energy.

References

Apergis, Nicholas., Danuletiu, Dan Constantin, 2014, “Renewable Energy and Economic Growth: Evidence from the Sign of Panel

Long-Run Causality”, International Journal of Energy Economics and Policy, Vol. 4, No.4, pp 578-587.

Cetin. M.A 2016, “Renewable energy consumption-economic growth nexus in E-7 countries”, Energy Sources, Vol. 11, No.12, pp 1180-

1185.

Fang, Y, 2011, “Economic Welfare Impacts from Renewable Energy Consumption: The China Experience”, Renewable and Sustainable

Energy Reviews, Vol.15 (9), pp. 5120–5128.

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Employee Response to Dimensions of Internal Branding: A literature review

Key words: Internal Branding, brand understanding, brand commitment, brand citizenship behavior, job satisfaction.

Dr. Githa Heggde* Gayatri Sasi Tampi**|

Internal branding has increasingly been conceptualized in recent

times. But there does not seem to be much agreement on what it

is, the attitudes involved in it, how it is initiated and its positive

consequences. Hence, the employee branding construct is still not

completely conceptualized. In spite of the growing popularity of

the concept of internal branding in aligning employees' brand

behavior, not much is known of the relationship between internal

branding practices and employees' brand behavior. The dearth of

research in this area also limits the understanding of what is the

appropriate employee behavior that could enhance the

organization's brand performance. (Shaari, Hasnizam et al (2012).

This paper reviews the definitions and dimensions of internal

branding by drawing together strands from various literature and

empirical studies made. The paper reviews the definitions and

literature on internal branding. A framework is then built for

internal branding, focusing on employee based context that

includes the dimensions of internal branding.

Some studies have provided empirical evidence for the link

between internal branding and employees brand commitment

(Burmann and Zeplin, 2005), some have focused on the

relationship between internal branding and brand loyalty

(Papasolomou and Vrontis, 2006) and others have focused on the

influence of internal branding on employees' brand supporting

behaviours (De chernatony and Cottam, 2005; De chernatony

and Segal-horn, 2001; Kotter and Heskett, 1992).

Clearly, research in internal branding through the years result in

different dimensions of internal branding. However, a common

denominator in many of the models is the utilization of the Miles

and Mangold model (Miles and Mangold, 2004) and secondly,

brand supporting behavior (Javanmard and Nemati Nia, 2011).

Internal branding practices consists of initiatives, which in turn

leads to brand supporting behaviors, which in turn leads to job

satisfaction.

Abstract

Introduction

Internal Branding is a concept born in the early 1990s. Successful

internal branding provides a competitive advantage that is critical

to the accomplishment of companies. There is no common point

of view with regard to the measurement of internal branding,

however, this paper only studies the employee response to the

internal brand. The aim of this study is to review the dimensions

of the internal brand by drawing together strands from various

literature and empirical studies made within the area of internal

branding. The paper is conceptual in nature. The required data

has been collected from different secondary sources like research

paper, review papers, journal articles in the area of internal

branding. A conceptual framework for understanding and

measuring the internal brand and the internal branding process is

developed to provide a more integrative conceptualization of

internal branding.

The study of internal branding is increasingly popular as some

researchers have concluded that it is one of the most valuable

competitive advantages that a company has. The brand image

desired by the organization can be achieved only by employees

who characterize the organization and the task of getting

employees to reflect the organization's brand image and deliver on

its promises is a challenge for the business. The topic has gathered

both managerial and research attention that focuses on

addressing this challenge (Miles & Mangold, 2004). Frontline

employees' behaviors and attitudes not only affect external

stakeholders, but also shape the organization's brand and

reputation in the eyes of the public and other stakeholders

(Punjaisri and Wilson, 2007; Bergstrom, Blumenthal and

Crothers, 2002).


*Dean Research and International Affairs, IFIM Business School. **Research Scholar, Bharathiar University & Assistant Professor, St Joseph's College of Commerce

A framework for measuring internal branding

Brand Understanding

Internal branding is defined as an enabler of an organization's

success in delivering the brand promise to meet customer's brand

expectations set by various communication activities (Drake et al,

2005). The employees' brand attitudes are namely brand

identi?cation, brand commitment and brand loyalty. (Punjaisri,

Khanyapuss & Wilson, Alan (2007). A conceptual framework for

measuring internal branding, based on the employees' perspective

of it, is developed by using the conceptualization of the employee

branding process by Miles and Mangold(2004). There is an

attempt to study the antecedents of internal brand management

outcomes i.e brand understanding, brand commitment and

brand citizenship (Piehler and Burmann, 2014), in relation to the

job satisfaction, and perceived individual productivity, which are

the outcome variables studied. Brand understanding and brand

identification are the cognitive components of the brand

attitudes, brand commitment and loyalty are the affective

components and brand citizenship behavior is the behavioural

component of the brand attitudes.

In the present scenario, establishing brand equity by the

establishment of a strong internal brand is becoming more and

more challenging. Amplified pressures to compete on salary and

perquisites are faced by companies in the current scenario.

Internal branding emerges from the greater enthusiasm that

employees place in their organization, than they do in

competitors. This confidence of brand association gets translated

into employees' job satisfaction, individual productivity, tenure

and their willingness to accept the conditions of work. But how

the various internal branding practices will affect the brand

attitudes of the employees and how they will react and respond

towards these practices of internal branding is relatively

unknown. The study highlights employees' understanding and

identification with the brand as a basis for brand commitment

and brand citizenship behaviour and argues that these three

factors become the actual foundation for internal branding. The

study aims: -

• To review the dimensions of internal branding.

• To provide a more integrative conceptualization of

building internal branding.

• To study the antecedents of internal brand

management outcomes in relation to the job satisfaction, and

perceived individual productivity.

Source of datahe required information has been collected from various

secondary resources like research papers, articles, conference

proceedings that are peer reviewed, and books related to the topic.

The results of the study on antecedents of internal brand

management outcomes, show that cognitive brand

understanding is a key outcome which has an effect on affective

brand commitment and behavioral brand citizenship behavior.

There has not been much resarch on antecedents of cognitive

outcomes. The cognitive outcome is brand understanding in the

Internal Brand Management study. (Piehler, Rico and Burmann,

Christoph (2014). Employee brand understanding is a precursor

to positive brand building behaviour. Internal oriented brand

activities are a important influence on employees'brand

understanding, leading to exhibition of pro-brand behaviour.

Employees'understanding of the brand is critical to successful

brand building behaviour. (King, Ceridwyn and Fung So, Kevin

Kam (2015).

he involvement of the human resources function for helping

employees in internalizing brand identity has been a developing

area of study. Internal branding emerges as a strategy through

which organizations encourage their employees, through their

engagemet, to become involved in the nurturing of a brand. (lik,

Gaye (2015). A brand needs to have a consistent and continuous

identity in order to be trusted and a holistic model for internal

brand management focuses on the role of employees in ensuring

consistency of the brand identity. (Burmann, Christoph & Zelin,

Sabrina (2005). The organization brand is found to be effective

on brand identification from the employees'perspective.

(Javanmard, Habibollah and Nia, EnsiyehNemati (2011). The

relationship between brand identification, brand commitment

and brand loyalty was assessed empirically and one of the findings

was that brand identification is a driver of brand commitent,

which precedes brand loyalty of employees. (Punjaisri et al, 2009).

Brand identification is the employees sense of belonging, which

will in turn induce a behavior that strives to improve the external

perception of the organization (Punjaisri, et al.,2009Punjaisri &

Wilson, 2011). The employees will then perceive the successes and

failures of the brand as their own and thus brand identification

encourages brand-supporting behavior (Vallaster & De

Chernatony, 2005).

rand commitment of employees is de?ned as the extent of

employee's psychological attachment to a brand and the extent to

which they experience a sense of identification and involvement

with the brand values of the company they work for, and is an

important factor for the effectiveness of brand management.

(Burmann, Christoph and König, Verena (2011), Kimpakorn,

Narumon and Tocquer, Gerard (2009). The organization brand is

effective on brand commitment, from the employees' perspective.

(Javanmard, Habibollah and Nia, EnsiyehNemati (2011). It is a

large contributor to the retention of valuable employees (Du Preez

& Bendixen, 2015). Brand commitment has a significant

relationship with brand citizenship behavior and the causal link

between brand commitment and brand citizenship behaviour was

empirically validated. ( Burmann ,Zeplin& Riley, (2009), Shaari ,

Hasnizam et al (2012), Burrmann, Christoph & Zeplin, Sabrina

(2005). It thus explains the psychological processes that leads

employees to show brand citizenship behaviour. (Burmann,

Christoph & Zeplin, Sabrina (2005).

Brand identi?cation is the driver of brand commitment, which

precedes brand loyalty of employees. (Punjaisri K, E. and Wilson,

A. (2009). The affective outcome in the study conducted on

Internal Brand Management is brand commitment and the

results show that cognitive brand understanding is a key Internal

Brand Identification

Brand commitment


Brand Management outcome which has an effect on affective

brand commitment and behavioral brand citizenship behavior. (

Piehler, Rico and Burmann, Christoph (2014).Internal branding

seeks to achieve consistency with the external brand and

encourage brand commitment and the possibility of brand

championship among employees.( Mahnert, K.F and Ann, T.,

(2007).

Brand loyalty is a measurement of the employees' willingness to

stay with the current organization which is closely related to brand

commitment. Brand commitment precedes brand loyalty of

employees. The mediational effects of brand loyalty have been

studied. (Punjaisri, et al., 2009) The effect of internal branding on

employees' brand loyalty has been studied and it has a positive

effect on their performance with regard to customer attraction.

(Javanmard, Habibollah and Nia, Ensiyeh Nemati (2011).

Employee brand attitudes are namely brand identification, brand

commitment and brand loyalty and they influence the manner in

which employees deliver their service. Internal branding

influences the attitudes employees have towards the brand.

(Punjaisri, Khanyapuss & Wilson, Alan(2007). Hence, it is

important to have a high level of identification, commitment, and

loyalty towards the brand since they are all interlinked to each

other, to achieve employees' delivery of brand promise (Punjaisri

& Wilson, 2011).

Brand citizenship behaviour outlines what it means for employees

to 'live the brand'. (Burmann, Christoph & Zeplin,

Sabrina(2005). Brand citizenship behavior is one of the three

concepts of internal brand management model, the other two

being brand commitment and brand customer relationship.

(Burmann ,Zeplin& Riley, 2009). The behavioral outcome of the

study on Internal Brand Management was brand citizenship

behaviour ( Piehler, Rico and Burmann, Christoph (2014). Brand

psychological ownership was found to have a positive effeect on

brand citizenship behaviour. Brand psychological ownership

mediated the relationship between corporate branding and brand

citizenship behaviour in the multilevel relationship. (Chiang,

Hsu-Hsi et al (2013). Brand knowledge and brand rewards have a

significant positive relationship with brand commitment and

brand citizenship behavior. Brand commitment has a significant

relationship with brand citizenship behavior. Attempts have also

been made to examine the relationship between brand knowledge

and rewards on employees' brand citizenship behavior and

integrating brand commitment as mediation. (Shaari Hasnizam

et al (2012). Brand trust has a significant effect on brand

citizenship behavior and it mediates the effect of brand

commitment on brand citizenship behavior. (Erkmen, Ezgi and

Hancer, Murat (2015).

The antecedents of Brand Citizenship Behavior (BCB) and the

role that the frequency of employee contact with customers plays

has been examined. (Porricellia, Mathew et al (2014). An

organization can adopt brand-centered HR practices to make

employees produce brand citizenship behaviors, thus

contributing to customer satisfaction. HR managers can

Brand Loyalty

Brand Citizenship Behaviour

strengthen employees' brand citizenship behaviors by fostering

their brand psychological ownership feelings. (Chang, Aihwa et al

(2012).

Fig.1 Conceptual framework of internal branding developed by researcher

Dimensions of Internal Branding: The proposed

model

Internal branding practices

Internal Communication

As indicated from Figure 1, the internal branding practices are

what produce the brand supporting behaviours. These practices

form the basis of internal branding. They bring about the

cognitive, affective and the behavioural components of the brand

supporting behavior. Possible consequences of successful

employee branding efforts are increased job satisfaction and

increased individual productivity, which is perceived by the

individual employees.

Internal communication is the concerted, inter-departmental and

multi-directional internal communications effort carried out in

order to create and maintain an internal brand. ( Mahnert, K.F

and Ann, T., (2007). Managers can use internal communication

to enhance employee buy-in and thus achieve better performance.

The positive impact effective communication has on buy-

in,commitment and trust and therefore performance, is noticed.

(Thomson, Kevin, de Chematony, Leslie, Aianbright, Lorrie and

Khan, Sajid (1999), (Ferdous, Ahmed Shahriar(2008)). The

internal branding process from the employees' perspective is

described. Internal communication and training can be used to

in?uence employees' brand-supporting attitudes and behaviours.

(Punjaisri K, E. and Wilson, A. (2009).

Practice of internal communication is considered as one of the

antecedents of the three Internal Brand Management outcomes.

The results show that the usage of central, cascade, and lateral

internal communication are important antecedents of brand

understanding, brand commitment, and brand citizenship

behaviour. (Piehler, Rico and Burmann, Christoph (2014). By

involving the HR in internal branding projects, firms can better

use internal communications to give employees a deeper

understanding of the brand and the enhancing their role in

increasing the brand image ( Aurand et al (2005), Timothy A.W,

Linda and Terrence B. R (2005)).


Values are communicated to employees via overt internal

communications. There is the need for consistency in all brand

value communications. (De Chernatony, Leslie et al (2006).

When internal communications is founded on strong corporate

values, it can help transform key employees into 'walking

embodiments' of the core values, and key touch points into

opportunities for fulfilling the brand promise. (Mark

Chong(2007)

.

Internal communication is important for building a culture of

transparency between management and employees, and it can

engage employees in the organization's priorities. There is a

growing role that internal communication plays in employee

engagement to build optimal levels of engagement.((Mishra,

Karen et al (2014), (Karanges, Emma et al(2014)). Most employees

felt most engaged at work when face-to-face communication was

used. (O'Neill , Kate et al(2015).

Internal communication strategies can promote strategic

employee communicative actions to disseminate positive

information that enhances the company's reputation and they

sustain the competitive advantage of a company. (Mazzei,

Alessandra (2014) Internal brand communication is the most

important contributor to Internal Brand Management. (Du

Preez, Rose and Benxiden, Michael Thomas (2015)

Leadership as the 'key element' in organisation's brand to the

outside world, which also influences how employees eventually

perceive the external brand that has been portrayed by the

organization.( Naidoo, Vinessa and Ukpere, Wilf

red(2012).Internal branding is related to organisational factors

such as OCTAPACE culture, communication and information,

management support, leadership, teamwork, HR processes,

engagement, citizenship behaviour and employer brand equity

(Raj, AshaBinu and Jyothi, P(2011) . It is argued here that the

success of internal brand building depends on the ability to

leverage cognitive, affective, and communicative differences

amongst culturally-diverse employees. For this, it becomes

necessary to define a clear brand vision, and facilitate verbal and

non-verbal social interaction pattems (showing commitment,

trusting employees, and living brand values) which helps to build

commitment and organisational identification amongst

employees, ultimately responsible for successful brands.

(Vallaster, Christine and de Chematony, Lesl ie (2005).The brand-

oriented leadership of top management is an important driver of

the internal branding process. The top management's leadership

is important in internal branding and its role in achieving

employees' emotional attachment to the brand. Leaders must

compel employees to possess brand–relevant knowledge, share

similar values and perceive their psychological contract as being

fulfilled. (Terglav, Katja et al (2016).

How can managers elicit brand-building behaviour on the part of

frontline employees? Transformational leadership styles clearly

outperform transactional leadership styles. Brand-specific

transformational leaders influence followers through a process of

internalization, leading to decreased turnover intentions and an

Leadership

increase in in-role and extra-role brand-building behaviors.

(Morhart, Felicitas et al(2011). In building a holistic model for

internal brand management, brand leadership is identified as one

of the three key levers for generating brand commitment, and

illustrated as building blocks of internal brand management.

(Burmann, Christoph & Zeplin, Sabrina(2005).

Successful employment branding develops a theme and

establishes an image of the employment experience at an

organisation and helps to retain the right employees to the

organisation. (Amin, Shivdasini Singh & Bhaskar, Shilpa

(2014).Resources plays a strong role in ensuring effective

implementation. It is seen that internal branding is not just the

purview of marketing departments. However, it was noticed that

the marketing department tended to be more involved in the

development of the brand strategy, while the HR department was

involved in the matter of compensation,employee attributes and

behaviors and recruitment. (Groom S, Maclaverty, Mcquillan,

Oddie (2008).

It is found that internally oriented brand activities, especially

brand oriented recruitment, training and brand oriented support

exert a significant influence on employees' brand understanding,

leading to subsequent exhibition of pro-brand behaviour. (King,

Ceridwyn and Fung So, Kevin Kam (2015)

OrientationInternal Branding process is chronicled in seven phases, out of

which senior management orientation is one of the important

phases. It ends on the note that internal branding is critical to

survival. (Tosti, D. T. and Stotz, R. D. (2001). Relationship

orientation was found to have a signi?cant positive effect on

Brand Commitment, but not Brand Citizenship Behaviour.

(King, Ceridwyn and Grace, Debra(2012)

TrainingTraining and education are one of the four constituents of

Internal Management. The IM perspective has the potential to

integrate all staff in the branding process. (Papasolomou and

Vrontis (2006). It plays a strategic role. It an help transform key

employees into embodiments' of the core values, and key touch

points into opportunities for fulfilling the brand promise.(Mark

Chong(2007) It can be used to in?uence employees' brand-

supporting attitudes and behaviours and exerts a significant

influence on employees' brand understanding, leading to

subsequent exhibition of pro-brand behaviour. (King, Ceridwyn

and Fung So, Kevin Kam (2015), (Punjaisri K, E. and Wilson, A.

(2009).

The internal marketing dimensions of training, among others has

a strong and significant influence on employees' job satisfaction. (

Allada, Vijaya Kameswari & Rajyalakshmi, Nittala(2012).

Internal branding is used to focus on training and operations.

There should be a focused message and goal behind all the

elements of training. (Davies Josh (2004). For transforming

organizations, consultants should create strategies for internal

Recruitment

Orientation and Training


and external audiences. The benefits of such inward-focused

brand initiatives in the arenas of human resources, organisational

development, training and operations are many. (Faust, Bill and

Bethge, Beverly (2003). It is recognized that brand training has a

positive impact on communication satisfaction that further

promotes a sense of brand identi?cation, loyalty and commitment

among the employees. (Sharma, N and Kamalanabhan, T (2011).

RewardsIt is revealed that brand knowledge and brand rewards have a

significant positive relationship with brand commitment and

brand citizenship behavior. (Shaari , Hasnizam et al (2012).It has

been demonstrated that IT professionals' perceptions of the

valence of job satisfaction would be in?uenced more by ?nancial

rewards than by non-?nancial rewards. (Chou, Shih Yung and

Pearson, John M. (2012). The messages emanating from the

organization's message systems should be proactively designed to

reflect the behaviors and attitudes the organization expects and

rewards. (Miles, Sandra Jeanquart & Mangold, W.

Glynn(2005)Rewards systems should be repeated on a constant

basis to build and sustain a strong corporate brand.

Perceived Individual ProductivityEmployee engagement is linked to higher productivity. While

drivers of employee engagement have been identified as perceived

support, job characteristics, and value congruence, internal

communication is theoretically suggested to be a key influence in

both the process and maintenance of employee engagement

efforts. Organizations and supervisors should focus on internal

communication efforts toward building greater perceptions of

support and stronger identification among employees in order to

foster optimal levels of engagement. (Karanges, Emma et al(2014)

Successful employment branding develops a theme and

establishes an image of the employment experience at an

organisation and retains the right employees to the organisation.

Effective, practical employer branding strategies in India that

address issues like recruitment, training, employee motivation,

employee engagement, and retention, with a view to positively

impact organisation costs, productivity and business performance

has been examined. (Amin, Shivdasini Singh & Bhaskar, Shilpa

(2014).

PerformanceThe employees' brand loyalty has a positive effect on their

performance with regard to customer attraction. (Javanmard,

Habibollah and Nia, EnsiyehNemati (2011).Internal branding

not only directly in?uences the extent to which employees

perform their role in relation to the brand promise, but also

in?uences the attitudes employees have towards the brand, which

in turn affects employee performance. Punjaisri, khanyapuss &

Wilson, Alan(2007).

Greater staff understanding (intellectual buy-in) and

commitment (emotional buy-in) can enhance brand and business

performance. Focusing on internal branding, it shows why these

two issues are important drivers of brand success. The intellectual

Outcome variables

emotional buy-in matrix is developed, showing how managers can

better use internal communication to enhance employee buy-in

and thus achieve better performance. Links between buy-in as

perceived employee performance are reported. The positive

impact effective communication has on buy-in, and therefore

performance, is noted. (Thomson, Kevin, de Chematony, Leslie,

Aianbright, Lorrie and Khan, Sajid (1999).Brand's contribution

to company success by brand consistent employee behaviour,

functional employee performance and brand congruent mass

media communication has been studied. Brand consistent

employee behaviour and functional employee performance in

turn are modelled as determined by formal and informal

management techniques as well as employee empowerment.

(Henkel et al (2007).

Job SatisfactionInternal marketing is relevant to all organizations and especially

critical for a people intensive industry such as services. The

internal marketing dimensions of work content, training, support

from superiors, support from colleagues and recognition have a

strong and significant influence on employees' job satisfaction.

(Allada, vijaya kameswari & Rajyalakshmi, nittala(2012).Internal

brand management, a subset of internal marketing, impacts job

satisfaction.(Rose Du Preez and Michael Thomas Bendixen

,(2015) While positive external communication has proven to

have a positive association with brand commitment and job

satisfaction; when approached by positive external information

employees feel sense of pride and gains an increased incentive to

perform to the fullest (Du Preez & Bendixen, 2015). Job

satisfaction is a precursor to employees' intention to stay, which is

the definition of brand loyalty (Punjaisri & Wilson, 2011).

Service-worker customer orientation affects several important job

responses, including perceived job fit, job satisfaction,

commitment to the firm, and organizational citizenship

behaviors. (Donavan, D. Todd, J. Brown, Tom & C. Mow,

John(2004).

It has been studied that job stress, trust and commitment affect

job satisfaction in the IT Sector, which in turn in?uences his or

her OCB. There is signi?cant relationship between job

satisfaction and OCB. Additionally, commitment to organization

and profession contributed signi?cantly to job satisfaction.

Exhibiting OCB results in job satisfaction in the IT setting.

Moreover, it is demonstrated that IT professionals' perceptions of

job satisfaction would be in?uenced more by ?nancial rewards

than by non-?nancial rewards. Furthermore, because of the

dif?culty of changing profession and the ease of changing

workplace, IT professionals' commitment to the profession might

be higher than commitment to their organizations. The paper

provides a starting point for the investigation of OCB exhibited by

highly skilled professionals. (Chou, Shih Yung and Pearson, John

M. (2012).The construct employee engagement is built on the

foundation of earlier concepts like job satisfaction, employee

commitment and Organizational citizenship behaviour. Though

it is related to and encompasses these concepts, employee

engagement is broader in scope. Employee engagement is stronger

predictor of positive organizational performance. Engaged

employees are emotionally attached to their organization and


highly involved in their job with a great enthusiasm for the success

of their employer, going extra mile beyond the employment

contractual agreement. (Markos, Solomon and Sridevi, Sandhya

(2010). It has also been found that exhibiting OCB results in job

satisfaction in the IT setting. (Chou, Shih Yung and Pearson, John

M. (2012).It has been proven that internal Brand Management

significantly contributes to Job Satisfaction. (Du Preez, Rose and

Benxiden, Michael Thomas (2015)

Several favorable consequences occur to organizations in which a

strong brand is developed, job satisfaction and productivity, being

some of the important ones (Rousseau, 1995).The model

presented here goes beyond the existing literature by bringing

about a framework, which, if utilized properly, will lead to strong

employee branding, which can be then turned into a competitive

advantage. The processes include, but are not limited to, internal

communications, training support, leadership practices, reward

& recognition programs, recruitment practices and sustainability

factors" (Groom, McQuillan, MacLaverty and Oddie, 2008). The

process centers around the internal branding practices, which, if

Conclusion

effective, leads to three main attitudes, translating into favorable

satisfaction levels and perceived productivity. All the five internal

branding practices should be aligned to the organization's brand

image. The conscious development of the internal branding

practices is the fundamental building block/bottleneck in this

process. Also, employees need to have the right skills and

knowledge in order to gain a higher level of emotional attachment

towards the brand. Therefore, the organization need to take

measures to implement activities that enhances the employees'

skills and knowledge about the brand. This will enable the

employees to embrace the brand and develop an emotional

attachment to the brand which helps them to incorporate the

brand values in their everyday actions (Du Preez & Bendixen,

2015).

The consequences of the employee branding process can be

monitored through the feedback loop. We hope that a fair

comprehension of the employee branding process, which we have

attempted through this model, will lead to sound and consistent

employee branding programs within the institution, which will

lead to higher job satisfaction and productivity.

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E-marketplaces:The New Mantra of Farmer-Centric Agri Business Marketing in Karnataka

*Associate Professor at the Department of Management Studies and Research Centre, BMS College of Engineering, Bangalore ([email protected]) Research Scholar at the Department of Management Studies and Research Centre, BMS College of Engineering, Bangalore ([email protected])**

Dr. S Manoharan* | Rachana Pujar**

The agricultural trading environmentAgriculture marketing is a state subject and markets in agricultural products are regulated under the

Agricultural Produce Market Committee (APMC) Act enacted by State Governments.

There are about 2477 principal regulated markets which are also called as APMCs and 4843 sub-market yards in India (Economic Survey,

2014-15). In order to ensure standardised regulatory framework for agriculture marketing governance and reforms across states the

Ministry of Agriculture has been soliciting the state governments to modify their respective Acts along the lines of the Model APMC Act,

2003. (Economic Survey, 2014-15)

Underscoring the importance of State's role in facilitation of

agriculture marketing, Karnataka has consistently been able to

implement reforms in regulation after the enactment of

Karnataka Agricultural Produce Marketing (Regulation and

Development) Act, 1966 and recently introduced a

comprehensive Karnataka Agricultural Marketing Policy 2013.

Since the initial legislation, there have been numerous changes in

the agricultural marketing scenario – such as increase in

commodities produced, changing consumption patterns, and

emerging agriculture business models. This has led to a need for

increased autonomy for farmers and a liberalised market scenario.

While state regulations have provided for establishment of private

markets, operations of bulk buyers like exporters, food processors,

retail chain stores, through registration under respective APMCs,

establishment of special commodity markets and Public private

partnership (PPP)in the agriculture sector the effectiveness of

these provisions still remains to be seen.

The National Agriculture market proposed by the Ministry of

Agriculture, is a nationwide e-platform that will connect 250

mandis by September 2016 and a total 585 mandis by March 2018

across India.

The table below gives an indication of various stakeholders and

participants that are directly or indirectly involved in agricultural

marketing transactions.


Role of an Agriculture Produce Market

Committee (APMC) in Karnataka

As per the APMC act, “agriculture produce to include all produce

of agriculture, animal husbandry, apiculture, horticulture or

pissciculture, forest produce and any other produce, live-stock and

poultry.”

Each APMC is a separate governing body which has a market area

and linked sub-markets. The APMC Act indicates that any market

area is more than a district or less than a taluk. Trading of

notified agriculture commodities happens only through APMCs.

The APMC licenses various participants or market functionaries

such as – brokers, commission agents, exporters, importers,

stockists, traders, ginners, pressers, processors, weighman,

measurer, transporter, warehouse. It also provides various

amenities in or around its premises such as - auction halls, weigh

bridges, godowns, shops for retailers, canteens, infrastructure for

access roads, lights, drinking water, police station, post-office,

bore-wells, warehouse, farmers amenity centres, water treatment

plant, soil-testing laboratory, toilet blocks, etc


APMC levies different kinds of fee for market participants licensed for agriculture transactions.

a. Market fee is an important component of the trades conducted in an APMC's market area.

APMC is authorised to levy market fee through

i. commissioning agents who mediate between buyers and farmers

ii. importer who will realise the fee from the purchaseriii. trader who directly purchases from a producer iv. any

other purchaserb. Licensing fees from a whole range of functionaries

(warehousing agents, loading agents, quality assignors etc.)c. Statutory levies/mandi tax, Value added tax (VAT) etc.

In 2013, 92 agriculture commodities were traded in Karnataka through APMCs. There currently are

155 primary markets (APMCs) and 354 sub markets like weekly mandis while there are 771 rural primary markets. The volume of business transacted through these markets exceeded Rs. 25,000 crores in 2011-12. Tumkur, Koppal, Udupi, Bangalore Urban and Shimoga making the top five districts in terms of revenue contributions (Refer Annexure I) (Agricultural Marketing Reforms Committee, 2013). The revenue earned by the APMCs does not go to the State exchequer (Economic Survey 2014-15)While the agricultural markets continue to be governed by APMCs - directly or indirectly there is a need for assessment of factors that will enable a greater role of technology in liberalisation of agricultural trading.

The e-marketplace or e-trading model of agriculture transactions started to come in vogues in 2014. These marketplaces target both business and end consumers with focus on participants in the agriculture trading chain. As Karnataka has been in the forefront of agriculture marketing reforms, the State has witnessed various emerging business models in this segment.

1. Online matching of demand and supply–

a. Businesses are facilitating interaction of farmers, producer organisations and sellers/wholesalers/retailers and direct customers while actual trading happens physically. There is no licensing requirement in this model.

2. Single APMC license for e-trading –

a. Commodity trading platforms such as NCDEX, N-Spot

b. Existing traders are allowed to operate online with license for online trading/e-trading.

Evolving models for farmer centric agricultural marketing

They can operate both – physical and virtual trading.c. Licensing and accreditation for weighment, payment, stocking, transportation and logistics. d. Eg. A large trader get license from Director of Agriculture Marketing to supply maize toAfrica which is bought from Karnataka – Davangere or Koppal.

e. The state government has formed a SPV and joint venture with existing commodity trading platforms Eg. Rashtriya e-Market Services

3. Price information providers –

a. Private

i. Reuters –The farmers can register to get SMS alerts on price information for selected commodities and select markets as part of annual subscription. The service gives details of input availability at the beginning of crop season, likely diseases and pesticides to be used during sowing and prices of commodities in different markets for selling the produce. The service enabler farmers make informed decisions.

b. Government institutions

i. NICNET– daily arrivals and prices are generated and fed into the network by APMC.

Krishimarata vahini managed by KSAMB (as part of AGMARKNET) covers 192 markets in Karnataka.ii. More than 2200 markets are regularly reporting price and arrivals related data which is being disseminated through the portal of AGMARKNET.

4. Farm input (non-financial) marketing involves supply of inputs like seeds, fertilizers, manures, pesticides, cattle feed to the members & farmers

Virtual Markets or electronic markets enable producers and buyers in the supply chain to access each other spread beyond geographies with a view to transact at the most efficient and transparent prices, reducing the cost of intermediation, improving marketing efficiency.

Various categories of virtual markets include Futures Exchange, Spot Exchange, Warehouse Receipt

System, ICT based demand and supply matching and crowdsourcing solutions or e-marketplaces.

Agriculture e-marketplace is a business to business e-trading platform that provides a convenient way for price comparison, demand matching and logistics that provide significant advantages towards cost reduction, elimination of middlemen and an easier way of trading their produce. (Xiaoping Z., Chunxia W., Dong T., Xiaoshuan Z., 2009).

These platforms though primarily business to business in nature are also connecting end consumers directly to the producer.

While different pricing methods (Refer Annexure II) are

Convergence of technology aided agriculture marketplace platforms


adopted by participants for trading of agriculture produce in both traditional and electronic forms, the e-trading platform provide a transparent approach for pricing.

The electronic trading platform also fills the structural hole in the agricultural network by connecting the farmers and the consumers. It takes care of the important task of matching supply and demand. The Mandi Exchange employs quality checkers who check the quality of the produce at the source. With connections to transporters the exchange ensures efficient transport of produce directly from farms to industrial or retail markets. (Viswanadham N., Chidananda Sridhar, Narahari Y., Dayama Pankaj,2012)

The figure below provides the process flow comparison of a market yard through e-tendering and transaction through an e-trading platform–With mobile or smartphones as the change

Figure 1 - High level process flow for e-Auction & e-Trading

Source: Agriculture Marketing Reforms Committee, 2013 and NCDEX Spot Exchange guidelines

agent, non-conventional platforms such as crowdsourcing solutions or e-marketplaces are disrupting the traditional multi-tiered transaction mode of e-trading. They eliminate multi-tiered transaction mode and reduce transaction costs by bringing together the buyer and seller under a single platform through

Key technologies –

• Automated geo-tagging of location• Map based view of available farm products• Matching algorithms for pricing, buying and selling• User preferred language support• Proposed features such as - Post-harvest support such as

Logistics based information and warehouse availability, historical data usage in making price predictions–

Allied services –

• Price alerts for preferred agricultural inputs and produce• Farmer or buyer profile specific information• Access to financial services e.g. mobile payment system and

microlending platform• Real time weather informationo Information on

procurement of high yielding seeds, fertilizers,etc.• Networking platform for farmers, traders, agriculture experts,

food processors and other allied entities

The report of Working Group on Agriculture Marketing Infrastructure, Secondary agriculture and Policy required for Internal and External trade in 2013 indicated the following gaps in the agriculture marketing infrastructure across India (as quoted from the report) –

Average area served by a market is 115 sq. km while an average area served by a regulated market is 454 sq.km (varies from 103 sq km in Punjab to 11,215 sq km in Meghalaya ). According to recommendations by National Farmers Commission, availability of Markets should be within 5 km radius (approx. 80 sq km) (2004).

Only 11 States have taken initiative in establishing 109 cold storage and eight states have established 51 apni mandis, there is virtually no progress in the setting up of wholesale markets except in Kerala Only 1637 grading units at the primary level, which include 125 units with cooperatives and144 units with others

Regulated markets, there are only 1368 grading units in a total of 7246 market yards/sub- yards Only around seven percent of the total quantity sold by farmers is graded before sale

Scientific storage capacity is only 30 per cent of the required capacity

Cold storage facility is available for only 10 per cent of fruits and vegetables

Following factors will play a pivotal role in encouraging the development of e-marketplace model –

1. Need for Quality standardisation of inputs and produce

Quality of the agriculture produce needs to be graded through Quality assignor (recognised and authorised by e-trading platform) based on which the produce stored in an accredited warehouse.

Current status of Agricultural Marketing Infrastructure

Key factors that enable e-Marketplaces


2. Addressing information asymmetryThe primary factor contributing to farmer e-

commerce adoption is information dissemination - access of price information, climate change and weather data etc. This information can be extraneous or general, product related, and personal information (Just & Just, 2006)

In addition, information availability and standardisation is a huge challenge due to the differences in regulatory provisions of state specific APMC acts.

3. Controlling food losses through efficient post harvest processes

“Post harvest food losses (PHFL) is defined as measurable qualitative and quantitative food loss along the supply chain, starting at the time of harvest till its consumption or other end uses” (FAO Paper, 2013)

The diagram below indicates the traditional versus mechanised post harvest chain and the food loss therein –The infrastructure

for storage, sorting, grading or post-harvest management includes storage including cold chain infrastructure, infrastructure required for linking the commodity futures with the farmers, perishable cargo centres, rural farm road infrastructure, market information infrastructure, infrastructure for livestock markets, poultry and livestock meat markets, slaughter house facilities and quality assurance infrastructure of various agricultural commodities.

4. Elimination of regulatory environment that hinders e-Trading

The mandatory requirement of the buyers having to pay APMC charges even when the produce is sold directly outside the APMC area (for eg. to the contract sponsors or in a market set up by private individuals) even though no facility provided by the APMC is used does not encourage competition and a liberalised trading environment. (Economic Survey,2014-15)

5. Transparency in price setting mechanism

The farmers buy farm and agricultural inputs at market price but sells the produce at wholesale price

There is no standard methodology for price determination and to ensure efficient and fair price setting mechanisms. I n case of certain commodities, the farmer receives only 20% of market price paid by the end customer due to the long chain of middlemen, logistics involved and food losses.

6. Provision of quality agriculture inputs

Inspite of regulations for control of seed, fertilisers and pesticides, the availability of good quality of seeds is difficult. Farmers face problems such as failure in germination, creation of artificial scarcity, being charged high prices and duplicates or imitation seeds and farm inputs.

7. Effective implementation of Government Schemes

Various schemes related to pre and post harvesting, listed below, have been lauched to benefit the agricultural marketing sector but have been inadequate in their outreach to the farmer –

i. Central Sector Scheme of Marketing Research and Information Network (AGMARKNET)

ii. Strengthening of Agmark Grading Facilities (SAGF)

iii. Development and strengthening of agricultural marketing infrastructure, grading and standardization

iv. Grameen Bhandaran Yojana

Rashtriya e-Market Services Limited (REMSL) is a division of NCDEX and is a special purpose vehicle (SPV) created alongwith Government of Karnataka. As an extension of the APMC led agricultural marketing model, REMSL provides an e trading solution with logistics management obligations handled by NCDEX.

For this NCDEX is licensed with the respective APMC under a revenue sharing model. The exchange pays 70% of market fees to APMC for trades that happen through REMSL platform while APMC pays back 20% of revenue received on account of availing NCDEX services.

According to experts in Agriculture Marketing, less than 5% of the produce is traded through this e- trading platform and the arrangement has not been satisfactory. An important factor being inadequacy of quality assignors and accredited warehouses and the unwillingness of farmers to grade their produce. APMC has already paid around Rs. 40 crores to NCDEX for its services until the year 2015.

As an alternative to the government led model of e-trading, 6 startups that are based or have operations in Karnataka are providing solutions for price and demand matching of produce and agriculture inputs as well as online trading of farm and farm-related produce.

While REMSL services are only available to licensed traders that are linked to APMC platform, these startups provide services through website or mobile application.The following table

A comparison of e-marketplace models


Methodology and summary of findings

In order to understand the simplification of agricultural trading models for marketing farmer produce, this study analyses the government operated and privately owned online marketplaces for their contribution in efficient transaction mechanisms. As the

e-marketplace model for agriculture trading is at a nascent stage an unstructured questionnaire based approach to interview stakeholders was taken. Key stakeholders that were connected to these firms were interviewed to understand the strategies adopted by these firms and effectiveness of the marketplace model. An in-depth interview with a checklist based approach was taken to interview experts in the agricultural marketing sector.

Assessment of various business models of e-marketplace modelTable 5 - Assess ment of e- marketplace business models

Assess mentparameter

Special Purpose Vehicle basedmodel

Privat e e- marketplace 1 Privat e e- marketplace 2 Researcher ’s perspective

Presence Karnataka Only National Global Applicable globally

Business model Licensed by APMC as trader Trade enabling platform Private disruptive Technology intensive model withoutgovernment intervention

Reason To bring

in

reforms

in

agriculture

Marketing

Sector

Faced

a problem

and

set

up

business

to

solve

this

problem

Faced

a problem

and

set

up

business

to

solve

this

problem

Urgent need for farmer centricbusiness models

Target segment Farmers,

Traders,

Processors

Entire

agri

market

supply

chain

Global

agricultural

community

Farmers, multiple categories oftraders, end consumers

Ser vices offered Platform

for

trading(Buyers

and

sellers

meet),

price

discovery mechanism

Online

matching

of

demand

and

supply

Online

matching

of

demand

and

supply

One

to one trading platform, pricediscovery, weather information, logistics support, warehouse support sys tems, financial support

Channels ofmarketing

Producers

to

buyers

Collaboration

with

NGOs

and

other

organisations App,

Social

media

and

public

relations

(PR) Networking events, Phys ical mandis,

Kisan

bazars, private mandis, Conventional rural gatherings , Digital media, NGO collaborations

Stage of offering Scali ng

up

Scali ng

up

Scali ng

up

-

Period of ideation Less than

6

months

6 to

12

months

Not

available

-

External supportreceived

Incentives

from

government

(State

and Centre)

None

Founders

are

external

funding

entities

Government incentives are needed toliberalise e- marketplace facilities in trading in agricultural inputs and produce

Interaction withgov ernment ag encies

Agriculture

Produce

Market

Committee

(APMC)

None

SFC/Commercial,

Cooperative,

Regional

Rural

Banks

Government entities, agricultureinstitutes, Banks and financial institutions

Opinion on role ofAPMCs

APMC is working and theirpresence is strong.Still lot of scope to facilitate better price discovery and competition

APMC restric ts the farmersreach and agricultural marketing space need not be regulated

APMC is an unfair platform fortrading in agriculture

Need to minimise APMC role andmove towards an external facilitation agency

matching of buyers and farmers

A traditional platform that providesprice and demand-supply matching services. Farmers can

social networking platform


Assess mentparameter

Special Purpose Vehicle basedmodel

Privat e e- marketplace 1 Privat e e- marketplace 2 Researcher ’s perspective

Regulations that promote e- Trading in ag ricul ture

A special purpose vehicle can beset up to provide e- trading inAgriculture commodity.Director of Agriculture marketing has the provision to direct the market and

commodity

that

has

to be traded

through

online

No Introduction of provision for

direct marketing-

Post transaction -Logistics andwarehousingsupport

1. APMC

Godowns

used

by

buyers

to

store

post-

transaction

2. e- permit

can

be

generated

by trader

themselves

3. Single

license

to

trade

in

all

APMC's

in

Karnataka

4. Online

payment

facility

No

Support

in

the

form

of

1.

Logistics

2.

Warehousing

3.

Cold

chain

4.

Financing

the

transaction

are provided

Support in the form of1.

Logistics2.

Warehousing3.

Cold chain4.

Financing the transaction are provided

5.

Financial investments

Basis of delivery after sale

Primary sale bill, Sec ondary Sale Bill and e-Permit

Farmers directly interact with sellers

Goods receipt note (GRN) To be standardised

Agricul ture datasources

krishimaratavahini.kar.nic.in

AGMARKNET

Internal

Information

Standard pricing mechanisms to beintroducedManually entered data to be eliminated

Competition NCDEX

FARMILY,

GREENO,

ITC

E

CHOUPAL

Existing

middlemen

Opening up of the sector for privateplayers

Transaction flow Gate entry,

Lot

entry ,

Assaying,

information

upload,

Bidding, Tender list

declaration, Weighment

entry,

Primary

sale bill generation, Settlement voucher, Online payment, e-Permit

Farmers

and

traders/shop

owners

connect

and

decide

on price

and

product

quantity

for sale

Login,

List

produce

for

sale,

add

photos

of

produce,

desc ribe quality

and

grade

etc

and

terms

of sale,

buyers

are

notified

and

bids are placed, Seller chooses the best bid and terms, Material isshipped, Buyer accepts the goods, Payment is done

-

Qualitystandardisat ion

Through external certified qualityassignor

Responsibility of purchaser Purchaser responsibility to ensurequalityCertification through a certified quality ass ignor

-

Regulations that promote e- Trading in ag ricul ture

A special purpose vehicle can beset up to provide e- trading inAgriculture commodity.Director of Agriculture marketing has the provision to direct the market and commodity that has to be traded through online

No Introduction of provision fordirect marketing

-

Post transaction -Logistics andwarehousingsupport

1. APMC

Godowns

used

by

buyers

to

store

post-

transaction

2. e- permit

can

be

generated

by trader

themselves

3. Single

license

to

trade

in

all

APMC's

in

Karnataka

4. Online

payment

facility

No

Support

in

the

form

of

1.

Logistics

2.

Warehousing

3.

Cold

chain

4.

Financing

the

transaction

are provided

Support in the form of1.

Logistics2.

Warehousing3.

Cold chain4.

Financing the transaction are provided

5.

Financial investments

Basis of delivery after sale

Primary

sale

bill,

Sec ondary

Sale

Bill and

e-Permit

Farmers

directly

interact

with

sellers

Goods

receipt

note

(GRN)

To

be

standardised

Agricul ture datasources

krishimaratavahini.kar.nic.in

AGMARKNET

Internal

Information

Standard pricing mechanisms to beintroducedManually entered data to be eliminated

Competition NCDEX

FARMILY,

GREENO,

ITC

E

CHOUPAL

Existing

middlemen

Opening up of the sector for privateplayers

Transaction flow Gate entry,

Lot

entry ,

Assaying,

information

upload,

Bidding, Tender

list

declaration, Weighment

entry,

Primary

sale bill generation,

Settlement voucher,

Online

payment,

e-

Permit

Farmers

and

traders/shop

owners

connect

and

decide

on price

and

product

quantity

for sale

Login,

List

produce

for

sale,

add

photos

of

produce,

desc ribe quality

and

grade

etc

and

terms

of sale,

buyers

are

notified

and

bids are

placed,

Seller

chooses

the

best bid

and

terms,

Material

is

shipped, Buyer accepts the goods, Payment is done

-

Qualitystandardisat ion

Through external certified qualityassignor

Responsibility of purchaser Purchaser responsibility to ensurequalityCertification through a certified quality ass ignor

-

y

Transaction charges

1.5% market fee on trade value Free platform 1% of trade value Revenue generation is also donethrough sponsored advertisements

Businesseffectiveness metrics

Business Analytics, ISOCertifications, Transactions, IT Strategy ,

CSI

and

Regulatory

Number of transactions,Engagement on app

Customer satisfaction and growthin transactions

App engagement, transactions,revenue analytics for farmer

No.

of

farmers

connected

More

than

500

More

than

500

More

than 500 -

Number

of

buyers/wholesalers connected

More

than

500

More

than

500

More

than 500 -

Number of APMCs connected

100 to 500 less than 50 Less than 50 -

Source:

Primar

data -

Stakeholder

Interviews

conducted b authors


ConclusionThe agricultural marketing sector is still highly regulated in nature. In order to provide a far reaching platform for agriculture trading and consolidation of its activities, technology enabled platforms also called as e-marketplaces have emerged to eliminate the nexus of middlemen and provide global market access to farmers. These models also aim to address –

awareness among market participants especially farmers

access to information on modern farming methods

outreach of pricing and produce related information

quality of agriculture inputs

capacity of post-harvest infrastructure

food losses and quality of produce due to longer storage period

While the government approach has been provider led, various startups are directly connecting farmers to suppliers, buyers and end consumers through technology enabled platform using Internet of things (IoT), geo-tagging and price matching mechanisms.

However, due to the nascent stage of their operations and the continued dominance of APMC market- fee based regime, e-

marketplaces have constrained effectiveness. The business models that have emerged as a result need further study over the next five years so concrete conclusions can be arrived at regarding their effectiveness. At present, their importance as an alternate and effective option for trading of produce and procurement of farm inputs needs has been emphasised through this paper.

The financial input marketing such as insurance, financial assistance through government institutions, banks has not been considered in this study. Due to the evolving nature of the business models and reduced effectiveness of regulation in agricultural marketing the study was unable to substantiate the impact these changes have in shaping a farmer centric environment.

Various other areas also present avenues for research such as relationship between e-marketplaces and Integrated Value Chains. Other startup business models that are bringing the farmer towards technology utilisation enabling end to end tracking of produce right from sowing season, harvesting and settlement also needs to be explored. The effectiveness of public sources of agricultural market data and farmer's direct linkages is an important area that needs to be studied further.

Future scope of the study

Areas of further study

(Rs. In Lakhs)

S. No. District/Division 2007- 08 2008- 09 2009- 10 2010- 11 2011 - 12

1. Tumkur 5841.17 6148.02 8191.77 9770.96 10338.25

2. Koppal 5816.99 6982.61 6760.2 8300.31 8286.55

3. Udupi 2308.21 3019.92 4013.18 4721.74 5377.95

4. Bangalore Urban 1972.71 1906.82 2364.16 2877.63 2735.96

5. Shimoga 1101.37 1316.95 1803.62 2178.97 2441.76

6. Haveri 1243.68

1361.79

1629.86

2460.59 2177.20

7. Raichur 1759.3

1982

1963.56

2479.91 1934.17

8. Bellary 1248.45

1610.24

1397.67

1603.25 1697.4

9. Gulbarga

979.97

1055.9

1090.11

1342.99 1528.66

10. Davangere

713.07

810.69

1266.48

1409.44 1434.88

11. Mysore 539

685.26

914.34

1123.04 1187.47

12. Belgaum

585.34

646.59

879.18

1102.47 1146.6

13. Hassan 381.84

405.82

609.51

843.8 1098.94

14. Dharwar

654.52

698.52

941.12

1304.84 1094.4

15. Chitradurga 738.4 682.82 858.1 1010.26 1076.62

16. South Canara

475.94

767.8

863.45

914.12 1054.45

17. Gadag 382.72

433.69

626.12

891.26 1018.15

18. Mandya 317.71

427.71

745.11

722.64 778.92

19. Uttar Kannada

355.45

417.08

540.84

579.17 734.12

20. Bijapur 326.13

341.33

402.39

669.41 705.13

21. Y adgir 431.64

499.02

414.61

682.18 623.92

22. Bagalkot

229.88

295.03

365.83

527.89 545.96

23. Bidar 394.74

345.86

308.56

490.11 529.28

24. Kolar 427.62

303.86

380.87

411.23 482.37

25. Chickmaglur

238.27

274.26

332.56

412.7 441.94

26. Chickballapur 99.67 97.36 138.02 243.95 349.5

27. Coorg 136.97 182.68 230.41 268.39 267.27

28. Chamrajanagar 117.37 147.37 149.39 202.54 265.99

29. Bangalore Rural 137.86 247.53 290.63 331.14 250.89

30. Ramanagaram 43.76 44.85 62.4 96.44 102.89

Sta te total17744.09 20344.58 24350.49 30328.64 31424.31

Source: Report of Agricultural Marketing Reforms Committee 2013

Annexure I - Statement showing details of market fee collected by APMCs from 2007-08 to 2011-12


Annexure II – Types of trading transactionsThe various types of transactions that facilitate trading of agriculture produce are –

Type of transa ction Description1. Mutual negotiations The buyers and sellers mutually agree upon a price based on

which the transaction is carried out.

2. Secr et tender sy stem A prospective buyer can inspect the commodity well in advance, note the lot number, quote the price in a piece of paper and dropin a box for secret tenders. The highest bidder is awarded withthe lot and the trade conclusion is at the discretion of the farmer or producer. However, it is binding on the bidder to accept the product.

3. Open auction

The

produce

is displayed

for

inspection of

prospective bidders.The

APMC official

or

licensed auctioneer

will

conduct the auction

and award

the bids

for

highest

price. However, the choice to sell

is with the farmer

and is not

binding.

4. Secr et tender

sy stem

cum Open auction

In order

to eliminate

the possibility

of

collusion between traders and other

allied participants, bids

from

secret

tender and open auction

are

combined. For

the same lot,

the

trader that providesthe best

price

quote can settle the

transaction.

5. Price determination based on k nown

standar ds

The

price

of

the

commodity

is determined based on the quality of the product

available

for

sale.

6. e- Tendering or

Virtual bidding

The

e- tendering

terminal

enable

the

trader

to fill in quotes for a commodity

available for

sale.

This

is a

secret

tender sy stem. Atthe

initial

entry

into APMC

premises,

the

produce is assigned a lot

identification number

(lot

ID)

based on which it is tracked for sale

and

settlement. Every

buyer

will

check

the quality and lotnumber

before entering

the

e- tender.

The

auction results can be gained in

a span of

10 minutes

and payment

received on the sameday.

Computer

network

across

the state for

e-Tendering includesGulbarga

–

Toor, Gangavati – Paddy, Tiptur

–

Kopra,

Chamrajnagar – Turmeric. In Karnataka, 50 APMCs have installed computers for e-

tendering

where buyers can

quote

the

price

and solicit traders fortransaction.

The

National

Informatics

Centre (NIC)

platform created the e-

tendering

platform.

NICNET

also

facilitates

daily

transmission

of

prices of commodities.

7. e- Tra ding

The

e- trading

system

enables

producers,

user

organizations, electronic traders

and existing

traders

to offer

product to themultiple markets.The system provides facility to provide buying needs and product requirements through secure information exchange.In this case, while area- specific license jurisdiction is restricted to the APMC of area of produce, single license is issued by Directorof Agriculture marketing, Government of Karnataka which isvalid across the state for e-Trading.Licensed buyers from outside the state can also buy the product through this platform.

The government in a tie up with NCDEX for futures exchange and spot exchange. The first of its kind spot exc hange was established in Gulbarga for Toor – N Spot where the prospectivebuyers can quote the price indicating the quality ba sed onWarehouse receipt.

Eg-

Arecanut

from

Shimoga can be bought buy a buyer inKanpur

which

enables

optimum pricing and increased competition

from

across

the country.

8.

National

Integra ted mark et

-

NIM

(recently pro posed)

The

Union Budget

2015

proposed establishment of NIM.

Under

NIM

a licensee

can

operate through partner for management

of

logistics

and software solutions.

In this case, each state

is needed to amend their Act permitting other

agencies

to operate

in

Agriculture marketing apart fromAPMCs.

Source:

Expert

interview

–

University

of

Agricultural Scie nces, Bangalore


References

1. Aulakh, Jaspreet, Regmi, Anita, Post Harvest Food Losses estimation – Development of consistent methodology, GS SAC-102,2013,

Food and Agriculture Organisation Retrieved from

http://www.fao.org/fileadmin/templates/ess/documents/meetings_and_workshops/GS_SAC_2

013/Improving_methods_for_estimating_post_harvest_losses/Final_PHLs_Estimation_6-13-13.pdf

2. Agricoop (2006-07), Annual Report – Agricultural Marketing

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symposium, Kansas City, June 8-9, 2010

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market-reforms-114091800773_1.html

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Finance - Economic Survey 2014-15, pp 117-121

Retrieved from http://indiabudget.nic.in/es2014-15/echapter-vol1.pdf

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in agriculture, American Journal of Agricultural Economics, 2006, 88:1, pages 882 to 889

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Rules 1968,Retrieved from http://krishimaratavahini.kar.nic.in/department/acts.htm

9. Emanuel Haque, Anu Peter, MS Jairath (2015, Jan 28) Karnataka shows the way on Unified

National Agri Market, The Hindu

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National Farm Market, The Indian Express

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farm-market/#sthash.IDPeH4RQ.dpuf

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Retrieved from http://krishimaratavahini.kar.nic.in/Kannada/spotexhange.htm

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13. Madhvi Sally (2015, Dec 16) National Agriculture Market to cover 250 mandis by September2016

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16/news/69091190_1_market-farmers-mandis

14. Ministry of Agriculture, Department of Agriculture and Co-operation, Government of India, Final report of Committee of State

Ministers, In-charge of Agriculture Marketing to Promote Reforms (January, 2013)

Retrieved from http://agmarknet.nic.in/stminprreform.pdf15. Operational Guidelines, 2014 - Ministry of Agriculture,

(Department of Agriculture & Cooperation), New Delhi

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http://www.fao.org/docrep/006/y4890e/y4890e0v.htm

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Agricultural Marketing Reforms (July, 2014)

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http://www.remsl.in/docs/AMRC%20Report%202013-ENG-LOW-72dpi.pdf

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Digital India: A Proposal to Bring Transparency in Agricultural Supply Chains?

*Professor, Maharaja Institute of Technology, Srirangapatna, Mysore ([email protected])**Asst. Professor at Kirloskar Institute of Advanced Management Studies, Yantrapur, Harihar. ([email protected])

Dr. Y.T Krishnegowda* | Nagaraj BV**

priority projects of the present government with a clearly laid out

mission to provide broadband in 2 lakh villages, universal phone

connectivity, 400,000 public internet access points, Wi-fi in 2.5

lakh schools and all universities; Public wi-fi hotspots for citizens,

Digital Inclusion of IT, Telecom and Electronics; e-Governance &

e-Services across government, resulting in digitally empowered

citizens through public cloud, internet access by the end of 2017.

Common citizen of India residing in urban places can now

visualize usefulness of digitalization as almost all of them are

enjoying benefits of internet banking facilities, core banking,

services provided by private e-commerce portals like Amazon,

Flipkart and many more which not only changed the basics of

trade and commerce but also paved a way to reach out almost

everybody potentially in understanding their needs. Further

successful implementation of unique ID through Aadhar has

created lot of faith among people about dynamics of public

administration through e-governance though there were some

hick-ups faced for its security issues.

However common farmers who make about more than 60% of

Indian population are still ignorant of the potential of

digitalization except for those who came in contact with private

organizations' successful initiatives like ITC's e- Choupal, EID-

Parry's Indiagriline and Shakthi and such few who acted upon

strengthening agribusiness supply chain using Information

Communication Technology (ICT) applications.

In fact digitalization is a much needed device to realize the

strength of Indian Agriculture when it is used to track

agribusiness supply chains, which are being presently controlled

by intermediaries like agents, processors and stockists before

reaching end consumers in their respective supply chains of

almost all crops in the absence of agile and transparent

governance. A research carried out in the state of Karnataka by the

authors Nagaraj BV and Y.T Krishnegouda (2015) points out the

fact that there is a distress sales of more than 65% of paddy which

is being sold out at the farm gate bypassing all standing norms of

Abstract

Introduction

Digitalization in India sounds to be the most wanted requirement

to get connected with whole nation in order to bring in

transparency in governance and to reach out the common and

poor in a much effective manner. There has been over 60% rural

population with average literacy rate of just 74% who are under

the influence of the current of liberalization, privatization and

globalization since three decades. During this phase of three

decades, there has been tremendous growth in food retail sector,

export of agricultural produce from India, direct marketing

initiatives like e-choupal of ITC, which in turn exposed Indian

farmer to make agri-business differently. But all this happened

with non-transparent governance of agricultural supply chains

and hence in most of the cases common farmer was the biggest

loser for not being equipped to face rapid change in trade and

business. Research findings show that in Karnataka, annually for

paddy alone there has been a distress sale of more than 65%

(2015) which is not routed through proper channel (APMC), the

reasons being poverty, middlemen and search for better selling

price. The present study uses the existing status of digitalization

done at schools, rural banks, agricultural research centers spread

across the state of Karnataka to build a conceptual network of

digitalization to bring transparency in agricultural supply chains

and policy requirements to revive the economics and lives of

common farmer which in fact is our primary motive since

independence.

Digital India is an initiative to ensure that Government services

are made available to citizens electronically by improving online

infrastructure and by increasing Internet connectivity. It includes

plans to connect rural areas with high-speed internet networks

and envisages

• The creation of digital infrastructure

• Delivering services digitally

• Digital literacyDigital India is one among the top


selling through APMC and that every year the worth of paddy

produced in a year is $1.3 billion (approximately 8000 MT/ year).

Further the study estimates 44.6% of value mark-up just for

stocking and milling of paddy soon after harvesting which is being

presently managed by rice mill owners and a network induced by

them (referred to as harvesting network) mainly due to inadequate

storage facility and policy lapses of the government in managing

the harvest volume of paddy even today. If this issue is managed

within the ambit of well administered ICT enabled applications

across its value chain, paddy supply chain can create wealth of over

20% on its investment (i.e., $1.3 billion to buy from farmers after

harvesting, stocking and milling) every year which alone if

controlled can transform the face of agriculture.

ITC's e- Choupal, EID- Parry's Indiagriline are the strong

evidences on agribusiness supply chains in Indian context on how

ICT applications help farmers as well as organizations to make

mutually profitable avenues apart from exposing farmers to food

and hygiene requirements of the world, producing export quality

agricultural produce just by supporting them with information

and guidance thereby making their lives economically better and

futuristically potential. With the support of such practical

ventures and documented research work carried out on

agribusiness supply chains across the world, this paper tries to

bring about the conceptual model of managing agribusiness

supply chains with the existing ICT infrastructure available at

government schools and offices of public administration in sync

with digital India initiatives with special reference to supply chain

of paddy in Karnataka.

The present work is based on the thinking leads from extensive

review of literature in support of agribusiness supply chain

management using ICT applications apart from its practical

ventures by organizations in Indian context to understand the

existing status, support systems provided by the governments,

agricultural and financial institutions; policy lapses and scope for

further development.

This paper uses the basic research cues from a study done by the

authors on value chain analysis of paddy. The theoretical

framework and its outcomes are discussed in the following

sections. Primary data is collected from 196 farmers from across

the state according to their holding pattern and Secondary

information is collected from available literature and web sources

to know the existing IT infrastructure made available by the

governments (both central and state) in Karnataka at schools,

offices of public administration, banks in order to meet the

functional requirements at these work centers. Keeping the

principal objective of digital India initiatives and its derivable

benefits to the common public in mind and synchronizing the

existing IT strength mentioned herewith, the plausible

conceptual model is proposed for effective agribusiness supply

chain management of paddy in Karnataka.

Research Objective

Methodology

Literature ReviewExtensive literature search on agribusiness supply chains; need

and importance of agricultural value chains; cases of successful

agribusiness supply chain models in the context of different

nations across the world and in India using ICT applications and

in particular value chain tracking of paddy in Karnataka as a part

of authors research work and published papers on the same were

found to suit the relevance of the topic. Extracts of the same are

presented as follows.

One of the key dimensions of VCA is “governance”. It has become

a dominant theme in food value chain discussions in recent years

(Gereffi, 1994; Kaplinsky and Morris, 2001; Humphrey, 2006a, b;

Dolan and Humphrey, 2004). It indicates the degree of power and

defines the strength in a chain's performance. Kaplinksy and

Morris (2001) classified it as “legislative”, “executive” and

“judicial governance” that, respectively, allowed compliance of

standards, assisting value chain participants in complying to

standards and co-coordinating their compliances.

Using Case study of ITC's e- Choupal, Zabir Ali and Sushil Kumar

(2011) empirically analyzed the role of information and

communication technology in enhancing decision making

capabilities of Indian farmers and found that users of e-choupal

are significantly better in decision making when compared to non-

users on many practices across the agricultural supply chain. They

also found the various factors like education background, social

category, income and land holding pattern also influence farmer's

decision making ability. Further they emphasized the importance

of designing ICT enabled information systems to suit the socio-

demographic profile of farmers.

Soham Sen and Vikas Chaudhary (2012) in lists various working

models of agribusiness supply chains across the world with the

inputs of ICT applications. The authors strongly recommend

with evidences that inclusion of smallholders in agribusiness

supply chains is possible in ICT enabled environments. Quoting

the successful implementation in India about e-chaupal of ITC

Ltd., EID Parry's Indiagriline and how Suguna poultry used ERP

system in managing their agribusiness supply chain, the authors

identify the need for change in existing policies of agricultural

marketing towards broader perspectives of managing agribusiness

supply chains effectively in tune with the far reaching abilities of

technology and digitalization.

M Umagowri and M Chandrasekaran (2011) in their study An

Economic Analysis of Value Chain of Banana in Western Tamil

Nadu brings out the fact that to prevent the post-harvest loss there

is need for training in post-harvest handling of fruit bunches; to

improve the marketing efficiency, the growers should sell their

produce directly to the wholesaler or tie up with the processor or

retailer wherever feasible; and farmers must have the latest market

knowledge, for taking better sales decision.

Niraj Kumara and Sanjeev Kapoor (2010) in their research ”Value

Chain Analysis of Coconut in Orissa” finds that, no major value

addition is done by the players at any level. The study has observed

a high ratio of vendors v/s farmers and aggregators v/s vendors in

the channel. In spite of this high ratio, both vendors and

aggregators are able to earn profit and are continuing the

business. It is suggested that coconut based industries should be


jointly promoted by state industry department, state agriculture

department

Nagaraj BV and Dr. Y.T. Krishnegowda (2015) in their empirical

research article, “Value Chain Analysis for derived Products from

Paddy- a case of Karnataka” finds step wise value addition for all

stages of paddy cultivation, harvesting, milling, wholesale & retail

markets of rice; value addition at solvent extraction plant using

rice bran and husk aft different industries. It is further found that

the highest gain (44.6%) in the value chain of paddy is for a

network of people who take care of paddy soon after harvesting till

its milling and the lowest paid stakeholder in the paddy value

chain is the farmer, who is a source of paddy supply chain.

Nagaraj BV and Dr. Y.T. Krishnegowda (2015) in their work

“Supply Chain of Paddy : an opportunity to revive for continual

growth of agriculture sector?” tries to find a conceptual solution to

the smooth functioning of paddy supply chain and conceptually

evolves “Harvest Reserve Fund” based on the responses collected

across all stake holders of integrated value chain of paddy that can

work as an engine producing high returns every paddy harvesting,

paying back the farmers in the form of regular income apart from

striking equally balancing all involved in the chain.

The agricultural supply chains in India and their management are

now evolving to respond to the new marketing realities thrown by

the wave of globalisation and other internal changes like rise in

the level of disposable income of consumers, change in the food

basket of the consumers towards high value products like fruits,

Agribusiness supply chains in India: reach and

limitations

vegetables and animal protein. The new challenges of the

agricultural economy of the country have now spurred the

government agencies to go in for different legal reforms for

enabling and inviting private investment in agricultural

marketing infrastructure, removing different entry barriers to

promote coordinated supply chain and traceability. The amended

APMR act, the major agricultural Marketing Act of the country,

being implemented by the different states of India, now contains

enabling provisions to promote contract farming, direct

marketing and setting up of private markets (hitherto banned).

These measures will go a long way towards providing economies of

scale to the small firms in establishing direct linkage between

farmers, and processors/ exporters/ retailers, etc. Thus, the

measure will provide both backward and forward linkages to

evolve integrated supply chains for different agricultural produce

in the country.

While studying the supply chain-management issues of the

agriculture sector, it is worthwhile to analyse the prevalent market

channels of some commodities to bring the discussion to

perspective. Marketing channels for fruits and vegetables in India

vary considerably by commodity and state, but they are generally

very long and fragmented. Figure 4 presents typical marketing

channels for mangoes and onions in Tamil Nadu. The majority of

domestic fruit and vegetable production is transacted through

wholesale markets although depending on the state and

commodity; farmers may sell to traders directly at the farm gate, to

traders at village markets, or directly to processors, co-ops and

others. Some of the common problems in agricultural supply

chains in India are presented in table-1 below.

Table - 1: Broken Links in Agri cultural Supply Chain in India

Stage 1 –

mroduction

Poor extension

of quality inputs

Low productivity

Deficient and inefficient production management

Non demand linked production

Improper post- harvest management resulting in poor quality

Stage 2 - Supply Chain Issues

Lack of storage, Poor transportation High wastages Multiple intermediaries Fresh produce transported to mandis in open baskets or gunny bags stacked one on top of the other Cold chain absent or broken, produce deteriorates rapidly Food safety is major concern: Hygiene and pesticide MRL not monitored

Stage 3 –

Processing

Low processing

Lack of quality

Poor returns

Low capacity utilization

Stage 4 –

Marketing

Poor infrastructure

Lack of grading

No linkages

Non- transparency in prices

Long delays from producer to retailer

Source: adopted from http://www.manage.gov.in/studymaterial/scm -E.pdf

Note: Each stage works

in an isolated manner resultin g

in multiple losses across the value chain.


There has been a tremendous support to agriculture from the

government and non- government organizations across the

country through various programmes due in the interest of the

farming community. Since independence, Indian Council of

Agricultural Research(ICAR) an autonomous organisation under

the Department of Agricultural Research and Education (DARE),

Ministry of Agriculture, Government of India. has set up many

agricultural universities and research centers across the country to

educate farmer for better productivity and achieved remarkable

success in many areas like seed development, better agricultural

practices, better yield, agricultural engineering and technology,

exports etc.,.

In order to help farmers financially, banking organizations like

NABARD has in its network more than 1800 rural banks

operating across the country. Albeit all efforts from many such

organizations, agriculture in India faces many problems like poor

education level, socio economic conditions & living standards of

farmers who are dependent on agriculture since generations,

which in fact obstructing the pace of growth in agriculture sector

as a whole.

The supply chain of agricultural produce in India is well

supported by government up to the stage of farm production and

later part of supply chain is dominated by economically strong

intermediaries who act as traders, next level industrial processors,

stockists, wholesalers and so on and hence much of the benefit of

value addition to the basic produce is encashed by them. The

network of these intermediaries with farmers is so enduring that

farmers exercise more faith in dealing with intermediaries rather

than any government schemes / systems existing to have better

governance (eg. APMC) over the supply chain. This practice over a

long period of time has put farmers in a loop of earning and

spending without much scope to better their living standards.

Further this network becomes instrumental in forming different

colonies and groups with different interests influencing electoral

system and hence become attractive political destinations for the

people who run governments in a democratic system like India

through elections. Hence policies also get biased in serving the

interests of such powerful networks rather than being rational and

integrative.

Though all agricultural universities, institutes, research centers do

have internet connectivity as of now, they are working as internal

support systems to reach out annual goals of departments and

there is no integrative effort of these entities to support entire

supply chain of the agricultural produce instead of stopping their

assistance soon after production. Thus there is a burning need to

track agricultural supply chains through ICT, digitalization

applications and revision of policies in in accordance with todays'

requirement in order to efficiently meet the goals set out by these

stakeholder bodies.

Value chain of paddy (as an example) in

KarnatakaPaddy is a food crop in India with largest area under cultivation

contributing to about 20% of its world production. Rice the

cereal inside the hull of the paddy is used as the staple food in

India and 2/3rd of the world as well. Karnataka stands 5th (4388

kg of paddy / Ha) in rice productivity and 12thin its area under

coverage (1.416 million Ha, 2011-12) in India.

In Karnataka many varieties of paddy (both scientifically /

traditionally developed) are cultivated in almost all districts as per

the suitability of agro climatic conditions. Out of 31 districts, 14

districts produce high yielding (more than 2750 kg paddy /Acre)

fine quality rice. Unlike other cereal foods, paddy after initial

hulling process, gives vide range of products viz., fine rice, cut rice,

derived products (from large sized varieties) like Poha (known as

Avalakki in Kannada), stuffed rice products (known as

Churumuri / Mandakki in Kannada) and by-products like Husk

& Rice Bran. One of these by-products Husk is used as fuel in

steam / power generation in process industries besides being used

in Brick manufacturing as burning curator. Ash remains of paddy

husk is further used as farm yard manure with additions of some

micronutrients. Another by product rice bran contains about 18-

20% of oil content extracted as Rice Bran Oil (RBO) in solvent

extraction plants. In Japan RBO is used as edible oil since many

years, which is also known as heart oil for its vitamin E rich

content with high smoke point and antioxidant √ - Oryzanol,

which possess high nutraceutical value with properties to reduce

low density cholesterol absorption in blood, lowering of TSH and

skin care. There has been extensive research in Japan on RBO and

commercial extraction of √ - Oryzanol. In India till recently the

usage of Rice Bran Oil was limited and now with the awareness

among the customers it is being used as edible oil which assures

not only good health but also economically viable in comparison

with other edible oils available in the market. (Source

:http://drd.dacnet.nic.in/Status Paper - 05.html)

Based on the research output reported by Nagaraj BV and Y.T

Krishnegowda in International Journal of Managing Value and

Supply Chains (March 2015) for paddy based on information

collected from 196 farmers through interview, the estimated

production quantity for the year 2012-13 in Karnataka,

participants of harvesting network of paddy, their financing

mechanism, benefits and quality of life the following section of

value chain analysis of paddy is adopted and presented in the

following sections.

Table - 2: Value Chain Analysis of Paddy

Paddy at

Farm Farmer Agent NA 1606 49707264 79829865984 -

Paddy Agent Stockist NA 1686 49707264 83806447104 4.9 (Commission to agent)

Paddy to Rice Stockist Rice Mill NA 1790 49707264 88976002560

6.17 (Cost of

milling+Storing)

Product From To

% of

paddy Price/Qntl

Qtty

(Qntl) Value (Rs.) % Value Created


a) Rice Paddy Rice 67% 3500 33303867 1.1279E+11 -

b) Levy Rice *

c) Cut rice Paddy Cut rice 8% 2000 3976581 2684192256 -

d) Husk Paddy Husk 18% 300 8947308 5219262720 -

e) Bran Paddy Bran 7% 1500 3479508 7953162240 -

Total

(a+b+c+d+e)

Rice Mill

Mill Owners

(stockists)

NA

NA

49707264 1.28647E+11 44.6

Rice

Mill Owner/

Stockist

Agent

3450

33303867 1.14898E+11 -

Rice

Rice Stockist

Wholesaler

NA

3500

33303867 1.16564E+11 -

Rice

Wholesaler

Retailer

NA

3700

33303867 1.23224E+11 5.71(Commission to agent)

Rice

Unorganized

Retailer- 95%

Customer

NA

4200

33303867 1.39876E+11 13.5

Rice

Organized

Retailer- 5%

Customer

NA

4600

33303867 1.53198E+11 24.3

* Levy rice quantity and price is regulated by the government from time to time (not a fixed quantity)

Product From To

% of

paddy Price/Qntl

Qtty

(Qntl) Value (Rs.) % Value Created

Unlike many staple food commodities, paddy creates a distinct

supply chain for its variety of by-products and their usage by many

stakeholders including end consumers and industrial users.

Recent study carried out by Nagaraj BV and Dr. Y T

Krishnegowda (2015)on value chain analysis of paddy in

Karnataka and its derived products reveal that the highest value

addition of about 44.6% in the chain (see table 1 below)is

recorded through harvesting & stocking at optimum moisture

content, milling and packing of rice and selling of other by-

products like rice bran and husk to respective industrial users

from rice mills. All these activities of buying paddy from farmers

soon after harvesting, stocking and preserving them with

optimum moisture content, milling paddy and sellingby-products

at right time are handled by a well organized network of people

involving potential farmers, agents, stockists and rice mill owners

(hereon this group of people is referred to as Harvesting Network)

who assume multiple roles as farmers, stockists, wholesale and

retail merchants in the entire supply chain of paddy. It is because

of this risk involving complicated high investment activity

(investment of approximately Rs. 9000 crores every year) executed

by the harvesting network, it commands over rest of the value

chain of paddy right from influencing price fixing for different

varieties of rice, its stocking and marketing as the role of

government in this entire process is very much limited.

Participants of harvesting network of paddy: Characteristics and Functions

Participants Characteristics in social set up FunctionsSemi- Medium to large scale farmers

Themselves farmers, Opinion Leaders, own wholesale dealership, large land holding, maintain good relationship among other channel members, influential, politically able people in villages

Will observe constantly about practices of other small farmers, financially help them at times; purchase paddy from small farmers either directly or through agents to stock it in their own facility/ Govt. go -downs / rice mills on rent

Private commission agents

Usually farmers / non farmers, who maintain balanced relationship between farmers and stockistsand rice mill owners; acts as catalyst to carry out harvesting of

paddy; they can even act as agents to sell rice to wholesellers after milling; can assume roles of wholesale merchants, partners of rice mills

Identification of potential farmers for harvesting; negotiating for price; understanding the pulse of the farmer in influencing sale of paddy as per his requirement

Stockists& Rice Mill Owners

They can be potential farmers, wholesalers of paddy & rice; foresee the demand and provide financial assistance for harvesting as per their strength; politically influential;

partners

of rice mills; licensed merchants or exporters; run parallel businesses

Stocking paddy at optimum moisture content and processing; Establishing and developing market, creating demand, mobilizing finances either through banks or open market or sel f


Financing mechanism of harvesting network

a) Semi-Medium to large farmers

b) Commission Agents

c) Commission Agents

Benefits of paddy harvesting to participants of Harvesting Network

*Societal Benefit: is perceived as the benefit to the larger farming community of marginal and small farmers who account for about 76.4% of all farmers in the state.

Observe that the benefits are almost personal with varied level of

risks associated and societal benefits in reaching out large

population involved in agriculture is just marginal. Note that the

benefits are almost cyclic in each year without much deviations.

This works as a routine for all participants of the harvesting

network. Though the personal benefits seem high for all involved

in harvesting network, it is to be understood that they finance this

activity by sourcing funds from the open market in most of the

cases at high interest rates; since the proportion of gain is high, it

offsets the effect of interests paid there by. As most of the finances

arranged by the participants of harvesting network comes from

private financing bodies or banks, to whom they have to pay huge

interest, the quality of life enjoyed by them can be rated as “just

above average” and this continues to be their growth pattern year

on year. Most beneficial in this network rice mill owners, semi-

medium and large farmers who invest on their own and stock

paddy or rice at their own facility; hence quality of life enjoyed by

them can be rated as “Good”. However for nobody in the

harvesting network, the quality of life can be called “excellent” as

there is very less evidence of finding any participant of the

harvesting network who are elevated differently in reaching out

the larger population of small and marginal farmers, improving

their business acumen, transforming themselves as diversified

farmers. Thus the present process of post harvest scenario of

paddy being handled by harvesting network sets a kind of routine

for all involved in agriculture with either marginal benefit in large

or “Just above average” or “good” quality of life. The approximate

number of farm house holds with respective quality of life due to

paddy cultivation in a state can be summarized as follows.

Rating Scale for Quality of Life*


Summary of the above table can be visualized as follows

2309000

1283000

760000

307000

41000

0

500000

1000000

1500000

2000000

2500000

Poor to Marginal Marginal Average Avg. to Above Avg. Above Avg - Good -Very Good

Outcome of Existing Paddy Supply Chain No.of Farm house holds <> Quality Of Life

It is quite evident that marginal and small farm house holds i.e.,

almost 75% of families dependent on agriculture are

continuously put in a loop of experiencing poor to marginal

quality of life because of their marginal earnings from agriculture

of paddy. This can be very well attributed to the existing practice

of its supply chain which is proving itself inefficient in paying

farmers with sustainable income. This infact is making farmers to

loose confidence in agriculture. With present supply chain

practice, there is no scope for constant increase in pricing of

paddy, improvements to cut down cost of cultivation need

mechanization which can not be afforded neither by farmers nor

by governments as it need huge funding and willing involvement

of private agencies which is very difficult to happen.

Under these given circumstances the only way out possible is to

control the agriculture and supply chain of paddy as a regulated

activity by the government. By having such a regulated system for

agriculture of paddy, it is possible to revive the whole agriculture

sector itself as more than 60% farmers in Karnataka (or in India or

in 2/3rd of the world agriculture community) are involved in

cultivation of paddy. To have regulated system in place for

agriculture of paddy, it is very essential to run the complete supply

chain of paddy under participative and legislative e-governance

model (Kaplinksy and Morris (2001) on dimensions of VCA). The

only area in existing supply chain of paddy where government is

not an active participant is itspost harvest scenario, which requires

huge funding & trained manpower in addition to building new

stocking capacities. The approximate amount to control post

harvest scenario of paddy in Karnataka state is estimated at Rs.

9000 crores annually with a growth rate of 45% (Table 1).

Need for digital supply chain of paddy

It is evident from table-2 above that there is a disproportionate

wealth distribution across the supply chain of paddy even though

the law of high risk- high return holds true. The stocking or

milling firms/intermediaries earn the highest value of 44.6% of

their investment and if we observe the practices being followed in

buying paddy by farmers from these intermediaries, there is no

fool-proof tracking system by the government / APMC and actual

quantities produced are just based on estimates of agricultural

departments and there is no accurate way to verify these estimates

as more than 65% of paddy produced is sold at farm gate by the

farmers to many intermediaries who maintain an enduring

relationship with farmers in terms of helping them financially

when required across the year by serving them through part

payment (in 53% of cases) to their (farmers) selling of paddy

during harvesting. With the existing practices of paddy supply

chain following questions remain unanswered with very less to

justify on the part of governance.

[Note: Pre- production losses i.e., selection of quality seeds,

authentication, land preparation, cultivation practices, soil

testing, selection of seed variety is dropped in the discussion as the

losses during this phase are attributed to many socio economic

factors of farmers, weather conditions etc., which cannot be

estimated uniformly. Hence only tangible and controllable loss to

farmers after harvesting due to improper governance issues is

herewith focused].

1. No guidelines for buyers of paddy at farm gate.

Vast area under production. Hence no uniform

mechanism be monitored.

2. Will the farmer get complete payment for the paddy sold

immediately to agents?

No. he gets partly paid (in 53% of cases) & he is happy with

it.

3. Why more than 65% of paddy is sold out at farm gate?

No adequate stocking facility by the government. So

government has to be dependent on rice mills.

4. How do the stockist / mill owners arrange payment

during harvesting?

They are large farmers; arrange money from markets,

banks and sometimes raise agriculture loans through

farmers

5. Is there any verification mechanism to verify the

estimated production figures with actuals?

No monitoring system be planted as the area under

production is vast.

6. Who will fix price of paddy? Is there a scientific base for it?

Stockists. It is not related to inflation in the economy.

7. Is there any mechanism to track the quantities

stocked/transacted at rice mills?

There is a mechanism but accuracy cannot be exercised.

8. Is there any way to control overstocking of paddy / rice b y

rice mills?

No exhaustive mechanism

9. Is there any chance to earn high for paddy farmer in a year

so as to get better QOL?

Not possible for a routine paddy farmer

10.Are the mill owners / stockists lead exemplary QOL?

No. They are also formers who worry arranging finance f o r

harvesting.

The following conceptual model is believed to answer the above

questions effectively seeking connectivity between government

offices like district and gram panchayats, Govt. offices, Schools,

ICAR, Research Stations, KVKs, APMCs', Banks (Need for

commodity banking), which do already have IT infrastructure in

place. Now in order to track supply chain of paddy the very

important new interfaces that are to be established are

Conceptual model for digitalization of paddy

supply chain


1. Profiling of each paddy farmer & data on his agricultural

practices, seed selection, problems, quantity grown etc., being

reported at regular basis electronically. An established format

may be asked to be filled up by school children (studying VII,

VIII & IX classes) of respective village & the same be uploaded

from centralized computer labs of schools in each taluk.

2. All rice mills, rice bran extraction plants to be tracked online

for its operations, receipt and delivery of goods to accurately

track the demand and supply.

3. There should either be a Public-Private-Partnership (PPP) or

One Time Harvest Reserve fund (HRF) (Nagaraj BV & YT

Krishnegowda 2015) set up by contribution of all farmers in

buying of paddy during harvesting through a creation of

designated fund for the purpose. Banks need to manage and

monitor the fund.

4. Designate all agents who work during crucial season of

harvesting as government recognized paddy supply chain

assistants with RFID enabled identification. Further stockists,

wholesalers and retailers of paddy, rice and industrial users of

paddy by-products

5. Rice mills should be the single points of reporting for paddy

sales. Government should pay rent for stocking paddy and rice

until its delivery in the market.

6. APMCs' need to track and cross-verify quantities across the

supply chain & report exhaustive and accurate supply and

demand data to all supply chain stake holders which can be

made online.

Farming Harvesting Stocking Paddy Milling/Packing Selling of Rice

Govt. approved

Stock Yards

Kisan ID

(RFID enabled) with

farmer detail s

Fixing of price based

on yearly BCR

Digitally controlled Rice Mills to

act as hub of data to track the

supply chain further

PPP* / One time HRF** to

buy paddy

from farmers

(Help of RRBs’)

Schools with

ICT facility to

get farm data

Schools with ICT

facility to get

harvest data

Diagram 1: I-KISAN (PPP/HRF) Paddy Supply Chain Model

* Public Private Partnership (PPP) for buying, storing, milling of

paddy and dispatch of rice: The present mechanism/network

among farmer-agent-rice mill owner during harvesting for buying,

storing, milling of paddy make a private entity (i.e., referred to as

“Mill owners & Stockists”) in the PPP model which owns 50% of

the process and Govt./a firm nominated by the government will

have ownership of remaining 50%

** “Farmers One Time Harvest Reserve Fund” is a fund to manage

post harvest scenario of paddy. This fund will be raised from all

the farmers as one time investment plan based on their strength

(size of the holding). As there is a huge scope of making annual

gain of 44.6% every year through harvesting, the part of this

revenue can be shared to all farmers annually for their life time,

which may even cover life and crop insurance. The remaining part

of the revenue can be used for agricultural developments,

mechanization, reduction of labor cost, increase productivity,

seed development, exports, building new opportunities in

agriculture through innovation and so on. Managing post harvest

scenario of paddy using “Harvest Reserve Fund” need strict

adherence to participative and legislative e-governance which

need the following things to be in place.

1. “Harvest Reserve Fund” should be managed and maintained

by rural banks which are functioning all over the state in

almost all rural areas.

2. New team from APMC for paddy harvesting to be formed with

new set of guidelines suiting to the requirement of new supply

chain practices and personnel having separate designation &

electronic IDs' to be made available on the task.

3. Farmers to be tracked with a unique electronic ID (Kisan ID)

4. Purchase of paddy should happen primarily at rural banks and

its receipt should be used for further stocking and processing

as a document of trade authenticity

5. The existing skilled human resource instrumental during

paddy harvesting to be identified and employed by the

government, later the same set of resource may be used for

bringing other agricultural products to the market.

6. All private stocking warehouses / rice mills to be used on

rental basis until the sophisticated government warehouses are

built

7. All rice mills to be digitalized and centrally controlled through

ERP system for receipt and delivery of paddy and related

quantities

8. “Harvest Reserve Fund” should not be used as an alternative

arrangement in place of state agriculture budget.

Farmers' One time Harvest Reserve Fund (HRF) is constructed

based on the land holding pattern of farmers in Karnataka which

is the only measure of their economic status and financial stability

(table-3). Primary structure of contribution to HRF from farmers

belonging to each class is worked out based on financial capability

to invest (table-4). Finally the derived benefits at the rate of 45%

(approximated value to 44.6% of table-2) of the total investment

on harvesting of paddy is calculated taking hypothetical

importance to possible heads of expenses (table-5). Finally annual

benefits to each former is calculated by considering 25% of the

total returns distributed to different class of farmers as per their

investment (table-6) is presented as follows.

Construction, primary structure and benefits of

Harvest Reserve Fund

Table – 3: Landholding pattern of farmers in Karnataka

Size (Class) No of Operational holdings (‘000 )

Area of operational holdings (‘000 ha)

Av g. size of operational holdings (ha)

Marginal (Below 1 ha)

3848

1851 0.48Small (1 to 2 ha)

2138

3020 1.41Semi Medium (2 to 4 ha)

1267

3393 2.68Medium (4 to 10 ha)

511

2904 5.69Large(Above 10 ha)

68

994 14.71

Total

7832

12161 1.55Source: State Agriculture Profile Karnataka- Agricultural Census 2010-11; a part of reported research by the authors

Required amount for farmers' One Time Harvest Reserve Fund =

Rs. 9000 Crores (an amount to buy paddy in one year of

harvesting)

Total number of farm house holds = 7832000

Thus investment/house hold = 90000000000/7832000=11,491

(Rs. 12000 approx.)


Investing Rs. 12000 is very difficult for marginal and small house

holds, whereas it is easy for semi medium, medium and large

holders. Keeping in view the capability of different size of

holdings the following one time investment amounts can be fixed.

Size (Class) No of Operational holdings (‘000 )

Amount of one time investment (Rs.)

Total Amount (Rs.)

Marginal (Below 1 ha) 3848 6000 23088000000

Small (1 to 2 ha) 2138 12000 25656000000

Semi Medium (2 to 4 ha) 1267 20000 25340000000

Medium (4 to 10 ha) 511 30000 15330000000

Large(Above 10 ha) 68 40000 2720000000

Total 7832 92134000000

Source: A part of reported research by the authors(2015).

Revenue through paddy harvesting activities (assuming 45% return) = 41460300000

Table - 5: Sharing of the revenue due to paddy harvesting

Total annual revenue 45% on Harvest reserve fund

Rs. 41460300000

Annual Return to farmers with life and crop

insurance

25% of total

revenue Rs. 23033500000

Buying mechanized instruments for cultivation 10% of total

revenue Rs. 4146030000

Payment of salaries & rentals to the resources of

harvesting activiti es & Training of farmers in

handling advanced instruments / methods in

agriculture

5% of total

revenue Rs. 2073015000

Addition to reserve fund

5% of total

revenue Rs. 2073015000Source: A

part of reported research by the authors

(2015).

Table - 6: Annual Return to all farmers

Size (Class)

Amount for one time investment (Rs.)

Return @ 25% p.a.*

Total Amount (Rs.)

Marginal (Below 1 ha)

6000

1500 5772000000

Small (1 to 2 ha)

12000

3000 6414000000

Semi Medium (2 to 4 ha)

20000

5000 6335000000

Medium (4 to 10 ha)

30000

7500 3832500000

Large(Above 10 ha)

40000

10000 680000000

Total

23033500000

Derived benefits of the conceptual model1. Elimination of middlemen; All farmers are equally treated;

2. No power imbalance in the supply chain & no power play

because of transparency

3. Maximum benefits to farmer due to harvest reserve fund.

Huge benefits of minimum 20% return of investment for

harvesting, which can be used for lot of developmental

activities.

4. School children get exposure to agricultural economics

5. Continuous periodical income for the life time to all farmers

6. Enhanced scope for using modern agricultural practices

which can increase productivity & reduce cost of farming

7. Scope to focus on large and semi medium farmers for exposing

them to international standards of food requirements; focus

on small and marginal farmers to move them to better quality

of life

8. Scope to enhance confidence level of farmers at the bottom of

agriculture pyramid.

Source: A part of reported research by the authors (2015).

*This amount will be the continuous return on farmers' one time investment payable annually throughout his/her life time.

9. Exploring possibilities to reach out the best standards in food

export and new opportunities of growth through agriculture.

10.Harvest reserve fund during un-season will earn interest and

the annual return credited to farmers account also keeps on

growing which in turn help farmers in a long run as provident

fund.

11. No question of market support price (MSP) for as the

production will be demand based after few years (5-10 years) of

implementing the model. Even if it exists, it will be based on

point-to-point cases and not en-mass.

12.Agricultural loans which seek waive-off after some time in

existing system start diminishing over a period of time, there

by making farmers self-reliant.

1. Strict guidelines to treat paddy as regulated commodity by the

government in which entire ownership of supply chain is

managed by Government-Agricultural Institutes-Rural Banks-

PPP agreements or one time HRF & Rice-mills under the

ambit of e-governance.

2. Vital middlemen in paddy supply chain (agents who work

actively in paddy harvesting purely for commission) who make

virtual connect between farmers and stockists / mill owners to

be appointed as paddy supply chain assistants by the

government with digital ID. Later the same persons can be

used to maintain supply chains of other commodities also (if

needed).

3. Others acting as middlemen in paddy supply chain (semi

average/ average / large farmers) with identities like stockist,

wholesale merchants and mill owners are to be differently

motivated to their next potential level of agriculture and be

involved to improve their existing agriculture practices

towards excellence (mechanization, exporting, horticulture

and other farms of agriculture) with better assistance

programs.

4. Education department can design a subject in their

curriculum for classes VII VIII and IX on agricultural economics

(Each district has Krishi Vigyan Kendra which may be asked to

educate students with limited number of sessions). Evaluation

component can be based on practical exposure through

conducting structured survey to collect and report information

on agricultural statistics (from each farmer regarding area used for

cultivation of each crop, quantities of seeds, fertilizers, varieties

used, cost, problems faced and harvesting details like yield,

quantity sold, unit rate, product selling mode etc.,) to the

government thrice in a year first during commencement of

monsoon, second at the end of monsoon and start of winter and

third at the end of winter and start of summer (reporting can be

online as almost all taluks in each district of Karnataka will have

at least one government school having ICT enabled

infrastructure. There are more than 5000 government and aided

schools situated in rural and semi-urban places across the state –

source: dsert.kar.nic.in/html/chapter06.html). This data collect

this way is a real time data and very crucial to run effective supply

chain of paddy to meet expected dividends. This step would help

students to realize agriculture as a potential field of growth and

expose them to new thoughts to bring more transparency to the

Policy needs for digital agribusiness supply chain

management


existing state of affairs and prosperity to the families

dependent on agriculture.

5. Rural banks are to be given autonomy to act as Agri-Wealth

Banks who will actively involve in

a. managing one time Harvest Reserve Fund (HRF) or such fund

originated through Public-Private-Partnership for paddy

harvesting payments

b. certifying the quantities of paddy produced by each farmer, its

price, payment to farmer and maintain stocks & sales of paddy

at rice mills / warehouses.

Though digitalization of the nation is an apt and priority project

initiated by the government, ICT enabled infrastructure has been

developed since 1990 (post liberalization era) rapidly across

different functions of the society viz., govt. administrative offices

at national, state, district, taluk and to some extent village

panchayat offices, schools, banks and so on in order to improve

the efficiency of services. Parallel to these efforts development of

human resource also has taken place accordingly. Now with

digitalization being in place, some of the complex processes in

society and agriculture are to be focused which are otherwise

dominated by intermediaries and private parties who kept on

exploring huge benefits, one among such processes is e-

Conclusion

governance of agricultural supply chains and in particular supply

chain of paddy.

Since paddy is an agricultural produce cultivated by more than

60% of the farmers in Karnataka, its geographical spread is vast

and to maintain its supply chain for effective results, timely and

enormous data need to be collected and tracked simultaneously

and this cannot be accomplished until all the supporting

functions viz., government, agricultural institutes, banks,

processing units (rice mills) and offices / facilities (schools, taluk

& district administrative offices) with ICT infrastructure along

with all stakeholders of its supply chain work unitedly under e-

governance made possible by digitalization.

As evidenced through the example of paddy supply chain, there is

a potential return of nearly 45% on every year's paddy harvesting

provided there is a bureaucratic e-governance across the agile

supply chain which can serve as boon to solve many issues of

agriculture. It is now time for the policymakers and regulators to

focus on the issues related to supply chain of paddy and agri-

business supply chain as whole which in true spirit help the

farmers to develop themselves economically year on year. Thus it

can be concluded that digitalization with coordinated efforts of

people related to agriculture, e-governance of agricultural supply

chain of paddy can set agriculture on high growth trajectory.

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International Journal of Information Management. Apr 2011, Vol. 31 Issue 2, p149-159


HR Analytics:

A Big Deal for C-Suite in Talent Management

*M.B.A., M.Phil., UGC-NET (Ph.D), Asst. Professor- OB/HRM |** MCA, M.Phil, Associate Professor – SystemsShri Dharmasthala Manjunatheshwara, Institute for Management Development (SDMIMD), Mobile: 9916122245

Mohamed Minhaj*| L. Gandhi, M. A**

Abstract

HR Analytics- Objective

In this highly networked business world, there may be some

dichotomous perceptions in the minds of C-suite such as why does

one executive outperform his/her colleagues? What is the effect of

training and development programs on company's overall

performance? What will be the minimum duration for new

personnel to get acquainted with the system and start showing

results? Why do some Managers flourish and others perish? If one

stop solution is surfed to all such interrogations, then they have to

hit the Big Data and derive logical analysis. In fact, the companies

are not in dearth of data, they do have abundance of data to

critically analyze. But, the million dollar question is how to use it

logically for getting required analysis. If the concern is to logically

analyze data than just compiling them, then HR Analytics come

in handy in all dimensions. This article laid emphasis on

objectives of HR Analytics, HR Analytics beyond reporting, 4 As

of HR Analytics, Transmitting HR Data into Insight and review of

existing studies, HR Intelligence cycle, HR intelligence value

chain, Uses of HR Analytics and Technological aspects.

Human Resources (HR) Analytics is the application of refined

data and business analytics techniques to Human Resources (HR)

data. The major aim of HR analytics is to provide a business entity

with acumen for successfully managing people in order to

synchronize and accomplish overall corporate goal. The

enormous challenge of HR analytics is to ascertain what data must

be captured and how to use the data in forecasting competencies

in order to realize the best output from employees.

Understandably, organizations are in possession of adequate data

to trigger analytics meaningful; In general, companies create data

in different formats like spreadsheets, HRIS and store in multiple

Key words: HR Analytics, Talent Analytics, HR Data analysis, HR Intelligence cycle

locations. If the Mangers are on the lookout for a system which

can solve most of their HR related problems, then HR Analytics to

be administered in the organization. The role of HR Analytics is

not only collecting data pertaining to employee efficiency but also

to give insight into each step by collecting data and analyzing to

enhance the processes.

Bridging Business and Employees data

HR Analytics- beyond HR Reporting

The pivotal aspect of HR Analytics is to categorically exhibit the

influence of HR department on the organization. In order to

measure this impact, HR analytics correlate Business and

Employees data. Precisely, HR analytics is all about establishing a

cause-and-effect relationship between HR functions and

organization results and then deploying strategies based on the

analysis.

Although, HR reporting plays a significant role in people

management, it should not be confused with HR analytics as it

has got its own impact and implications. In addition to avoiding

interchangeable use of HR Reporting and HR Analytics, it is also

important to learn how these two are different. HR Reporting is


arranging data into meaningful packages of information; on the

contrary, HR Analytics is about making insights from available

data to predict future implications and suggest outcome based

decisions.

Exhibit 2- HR Analytics beyond HR Reporting

HR Analytics: Review of LiteratureAccording to an SHL global assessment report published in

February

There are still obstacles to adopting workforce analytics: Less than

half of the global companies use objective data when making

workforce decisions, and fewer than 20 percent were satisfied with

the ability of their current data management systems to manage

talent data,. But armed with actionable analytics, leaders and

managers have immense opportunities to use talent data in

reducing workforce costs, identifying revenue streams, mitigating

risks and executing business strategy. As David Crumley, Vice-

President of HRIS at Coca-Cola Enterprises, says, “this is where it

gets really exciting.”

People Matters talent analytics study 2016

The People Matters Talent Analytics Study 2016 collected

responses from 239 leaders across India Inc. via a survey which

was rolled out during the months of January' 16 and February' 16.

Breakdown of the participant organizations: MNC's 58%,

professionally-run business 29%, Family-owned business 11%

and public sector organization 2%. This study revealed that 81%

of the respondents agree to the fact that analytics is an important

competitive resource for any company. The study also revealed

that only 26% organizations do analytics, the remaining 74%

organizations do reporting (which is often mistakenly perceived as

analytics). The study says that 38% organizations do simple

reporting, 36% organizations do advanced reporting, 9%

companies have predictive models and 17% engage in prescriptive

analytics. When it comes to analytics tools, as many as 70% of the

organizations use spreadsheet based systems for HR analytics;

68% rely on HRIS or dashboards; 17% have dedicated analytics

software and 5% have no system at all.

According to a study by Deloitte

Only 6% of HR departments believe they are excellent in using

analytics and about 60% feel they are poor and are lagging behind.

Apart from this, companies are also coming to terms with the

preferences of the millennial workforce. Millennials want their

workplace to be “fun and social” and this generation also has the

higher propensity for instant gratification. They are also a

generation heavily reliant on the mobile phone. As a result of all

these factors, the attrition level of millennials is also very hard to

keep up with. While several companies are proactively adopting

analytics in talent acquisition, retention, risk management, sales

forecasting, capacity planning, the use of analytics in driving

increased employee engagement and therefore improving

productivity will be critical for the future.

According to Tuhin Subhra Dey and Prithwis De in their white

paper on Predictive Analytics in HR: A Primer at TCS

“Every business function has to reduce costs, increase revenue,

maximize operational efficiency, and focus on strategic initiatives

to stay profitable, sustain agility, and grow. Whether in developed

or emerging markets, HR leaders often struggle to support the

business with the skilled workforce it needs, due to budget and

time constraints. One of the biggest challenges a company faces

when it plans to launch a new line of services or products is

recruiting the right people for the job in time for execution.

Similarly, businesses bear explicit and implicit costs when talent

exits the organization. It is worse when employees quit soon after

participating in an expensive training program sponsored by the

organization. Is there a way to predict such risks and reduce the

costs associated with them?”

Talent acquisition and resource management

How can we acquire the right talent? How can we decide which

profiles are right for the job

description?

How can we extract high-employee value?

How can we retain and engage our top talent?

Workforce administration

How can we manage capacity optimally?

How can we reduce employee fraud risk to protect our brand

image?

How can we leverage social network data to ensure employee-

centric human resources operations?

Performance and learning

How can we gain greater value from our training programs?

How do we select the right employees for training?

According to Mick Collins (2013), in his HBR article Change your

company with better HR Analytics narrates that “the good news is

that Big Data is making a difference in places and ways you might

not expect, particularly in human resources. Companies are

analyzing their employee data with workforce analytics to answer a

variety of critical questions: Black Hills Corp. is one of those

companies. A 130-year-old energy conglomerate, Black Hills

doubled its workforce to about 2,000 employees after an

acquisition. Like many energy companies, a combination of

challenges — an aging workforce, the need for specialized skills,

and a lengthy timeline for getting employees to full competence —

created a significant talent risk. In fact, forecasts showed that,

within five years, the firm could lose 8,063 years of experience

from its workforce. To prevent a massive turnover catastrophe, the

company used workforce analytics to calculate how many

employees would retire per year, the types of workers needed to

replace them, and where those new hires were most likely to come

from. The result was a workforce planning summit that

Other such questions to be addressed by HR

leaders include:


categorized and prioritized 89 action plans designed to address

the potential talent shortage. For other firms, more effectively

using talent data is a key component of an HR transformation,

one that seeks to improve the function's role as a true business

partner”.

Exhibit 3- Applications of HR Analytics

Accoring to Dr. Salvatore Falletta, Managing Director for the

Organizational Intelligence Institute

“HR analytics encompasses the full range of HR research and

analytics related practices including workforce surveys and

assessments, 360° feedback, metrics and indicators,

benchmarking, human capital research, employee and talent

profiling, talent forecasting, learning evaluation, and more.”.

The HR Intelligence Cycle is a process involving seven steps as

developed by Dr. Salvatore Falletta.

1. Determining stakeholder requirements

2. Defining the HR research and analytics agenda

3. Identifying Big (and Little) data sources

4. Gathering data

5. Transforming data

6. Communicating and using intelligence results

7. Enabling strategy, decision-making, execution, and

learning

Source: http://hrintelligence.org/our-mission-promise/hr-analytics-intelligence/

Step 1: Determine Stakeholder RequirementsDetermining stakeholder requirements is vital to the overall

success of any HR analytic initiative. It is much more than meeting

with a few influential or vocal stakeholders each year to formulate

the annual HR research and analytics agenda. It's about

establishing and cultivating a partnership and becoming a

legitimate player by adding value to the business. With respect to

the HR intelligence cycle, an ongoing and proactive partnership

with key stakeholders is an essential role to ensure up-front

legitimacy and trusted credibility and to obtain an accurate

picture of the most pressing organizational problems and

expected outcomes. In short, determining stakeholders'

requirements is important to:

• Identify strategic and tactical research, data and

informational needs, expectations and priorities;

• Secure involvement, commitment and support of the

HR research and analytics effort to increase ownership

of the intelligence results, both positive and negative;

• Provide communication on the ongoing progress of the

overall HR intelligence cycle; and,

• Ensure utilization of the intelligence results and

recommendations.

Once stakeholder requirements are obtained, it's time to define

the HR research and analytics agenda. An HR research agenda in

organizational settings may be long-term or short-term. The

constantly changing and evolving nature of business and the

external environment are redefining the notion of time in terms

of what is considered long-term versus short-term. In our age of

real-time technologies and on-demand data visualization, long-

term is no longer three to five years out. One year is considered the

long-term norm today in virtually all industries. Conversely, short-

term requirements tend to coincide with a company's quarterly

results, sometimes monthly. It important to note that short-term

doesn't necessarily mean tactical or reactive, nor is long-term

equated with strategic. Short-term and long-term research

requirements can be both strategic and tactical in nature. For

example, a short-term project can yield strategic results (e.g.,

market adjustments to employee salaries that could potentially

have strategic and long-term implications).

Consider the following when establishing the HR analytics and

research agenda:

• Organize the general stakeholder requirements by

theme or major topic;

• Pose broad research questions for each theme or major

topic and use stakeholders' language and terminology

to the extent possible;

• Under each of the broad research questions, begin

generating targeted research questions, which lend

themselves to measurement;

• Identify both the long-term and short-term

requirements of the overall research agenda; and

• Share the research agenda with your key stakeholders

and go through an iterative process of refinement.

Once the HR research and analytics agenda is established, you

need to identify the sources of data that will help to answer the

research questions. Data sources may be either public or private.

Step 2: Define HR Research & Analytics Agenda

Step 3: Identifying Data Sources


Public data resides in university libraries, knowledge repositories

and governmental databases (e.g., U.S. Department of Labor

Statistics). Examples of private data include a company's internal

employee data through HRIS as well as external benchmarking

data from "best-in-class” companies. Research reports and results

gathered by credible membership-based consortia (e.g., HR

Intelligence Organization, CEB, The Conference Board, and the

i4CP) and academic think tanks (e.g., Cornell's Center for

Advanced Human Resource Studies, University of Southern

California's Center for Effective Organizations) are excellent

sources of private data and information. Sources of data may or

may not exist depending on your organization's current HR

research and analytics practices. While reviewing data sources,

questions may arise as to whether your organization's HR research

and analytics practices are still valid and useful to the business

(e.g., some practices may have become institutionalized or

ritualized over the years). Therefore, some tough decisions may

need to be made with respect to modifying existing practices,

starting new ones, and in some cases, discontinuing outmoded or

symbolic practices.

This step of the HR intelligence cycle involves the actual

collection of data through primary research, secondary research,

or mining your HRIS. Primary research is new or original research

that addresses a specific research question or set of questions (e.g.,

a study to identify which factors enable or inhibit employee

engagement and performance). Secondary research is data and

information available through existing research sources; it may

involve examining existing literature or research reports. Mining

and modeling data from your HRIS is another way to gather,

query, and analyze data about your workforce, provided it's done

responsibly and ethically.

Given that data and information are gathered from multiple

sources at different points in time, it is recommended that you

coordinate and monitor all aspects of HR research and analytics

activities at your company. For example, if your company uses

multiple customized employee surveys within business units

rather than a single corporate-wide or global employee survey

effort, you should assess and consider the implications and

potential impact of such an approach. Companies that are serious

about Big Data and predictive analytics in the context of HR and a

driving cohesive HR strategy should arguably conduct a company-

wide employee survey to ensure consistency, ease of analysis across

the entire company, and minimize the impact of over surveying

their employee base.

Transforming data into useful and insightful intelligence is

arguably the most important yet most challenging step. While a

number of advancements and innovations have been made by

leading edge software firms (e.g., Oracle, SAP, Workday,

Salesforce) that have incorporated workforce analytical

capabilities within their suite of products, none of these SaaS-

based tools can magically codify, analyze, and interpret all of the

disparate “Big Data” at our disposal.

Step 4: Gather Data

Step 5: Transform Data (Meta-Analysis)

When it comes to a company's annual HR strategy and planning

cycle, however, much of this work is still done manually by HR

professionals – usually with some outside assistance from social

and behavioral scientists, statisticians, and data scientists. It is

recommended that you start small and build your HR analytical

capability overtime. Perform a meta-analysis (i.e., an analysis of

analysis) across your disparate data sources. For example, to what

extent are the results from individual 360 degree assessments

consistent with your employee survey data, exit survey data, or

actual turnover? Are high-potential, emerging leaders leaving the

company for same reasons year over year (e.g., little to no

advancement and promotion opportunities, lack of decision

rights, low base pay relative to the market)? Performing a meta-

analysis enables you to answer these questions and more

importantly organize and codify information in order to glean

critical workforce insights. Performing the meta-analysis can be

simple or complex. This largely depends on the nature of the data

gathered, sophistication and competency of the HR researcher or

data scientist, and the amount of time one has to actually conduct

the analysis.

The sixth step of the HR intelligence cycle involves

communicating intelligence results. The gestalt of HR

intelligence places more effort and emphasis on telling a story

about the data in relation to the organization's most pressing

problems and successes. This goes beyond traditional HR

research and analytics reporting processes and presentations,

which can be characterized as the “proverbial data dump,” as it

involves strategic insights and interpretation by you – the HR

research and analytics professional.

The final step of the HR intelligence cycle is strategy creation and

decision making. We all have heard the proverbial mantra that

behind every successful company is a strategy that works. But what

exactly is strategy? Strategy is a multidimensional concept that can

be defined in a number of different ways. It involves asking

intelligent questions, identifying strengths, weaknesses,

opportunities and threats (SWOT), knowing the right things at

the right time, game theory, scenario planning, decision-making,

establishing priorities and goals, and effectively managing

execution, and so on. Despite these various methods and

approaches, strategy can be simply viewed as the means by which

an organization intends on achieving its overall mission and goals,

and creating value for its stakeholders.

Proactive HR analytics arms strategists and decision-makers with

pertinent knowledge and insight to make critical decisions

pertaining to human capital. Moreover, establishing effective HR

research and analytics practices can ameliorate ad hoc data

fetching by providing HR leaders with real intelligence and

insights. While this undoubtedly can be a slippery slope in terms

of organizational politics and data ownership across your

company's HR functional silos, data analyzed and interpreted in

the context of the business and in relation to other factors and

Step 6: Communicate Intelligence Results

Step 7: Enable Strategy & Decision-Making


variables are hard to ignore, particularly when it's predictive in

nature.

It is incumbent on HR to play a central role in delving into the

data science revolution before someone else does. In fact there are

a handful of “Big Data” hawks, annoyingly, calling for IT and

Finance to lead the way. While an IT and/or financial

professional might possess the technological and statistical chops

to mine and model data, it takes an applied HR researcher,

analyst, and/or data scientist with the right disciplinary

background and experience to accurately interpret the workforce

data and predictive insights in the context of individual, group,

and organizational behavior. This is not to say that we shouldn't

collaborate with IT and Finance – but HR should be leading the

human capital analytics charge while leveraging IT and Finance's

expertise as appropriate.

Closing Remarks

HR Intelligence Value Chain

Source: http://hrintelligence.org/our-mission-promise/hr-analytics-intelligence/

4 As of HR AnalyticsHR department should be cautious enough in delivering Big Data

to their Managers primarily to enable advanced levels of

application and faster creation of key insights. The suggested 4 As

of HR analytics shall be considered while transferring data to

Managers for making HR related decisions

Exhibit 4- 4 As of HR Analytics

Appropriate: In order to get meaningful results, HR analysts need

to relate pertinent data to the business problem rather than using

a redundant amount of information.

Actual: In HR Analytics, in addition to the quality of data,

Managers must be appraised about the trustworthiness of Human

Resource metrics.

Absorbing: HR department should not get carried away with

disseminating raw numbers and anticipating the receiver to

ascertain the exact interpretations. HR Analysts have to know

their spectators, construct related storylines and inscribe

conclusions that pool together the fundamental details.

Adaptation: In the long run, meaningful analytics have to

transform a Manager's perception and attitude. With the help of

HR Analytics data, Managers should be able to bring alteration in

their pattern of thinking and create swift and logical decisions.

Business challenges of the moment call for more than just larger

competence in the HR department or system. Fairly, they are in

need of improved value gained through an extensive

understanding of the dynamics enhancing employees'

performance. Business houses need to realize the multifarious

relationship between employment levels; skills, compensation,

employees' profile and other pertinent aspects to assist them

maximize their return on HR. In order to know how personnel

factors impact the industry warrants not only suitable but also

cohesive comprehension from HR and functioning structures

across the company. On the other hand, most organizations face

hurdles to acquire timely and pertinent facts from their systems.

Dual reasons could be portrayed in this case. First, there has been

an outburst in both the size and intricacy of data. Secondly, the

customary Business Intelligence (BI) systems used by many

establishments to analyze the statistics do not convey the required

evidence to C-suite executives and Managers when it has the

ultimate consequence.

Human Resources Analytics system provides reliable metrics,

signals and reports to C-suite executives and HR Managers in

facilitating them to recognize how HR factors are influencing

departments and take relevant actions. Managers receive

significant information on Talent acquisition and development,

HR cost and multiplicity at levels of detail such as by geographical

factors, job grade/category, hierarchical division and pay

structure.

Professional Human Resources Analytics system enables

organizations to effectively accomplish and advance performance

by:

Optimizing Talent: To improve overall cost-effectiveness through

active HR cost control measures is the major objective of

optimizing talent. In fact, executives can appreciate how to

optimize the talent to make sure that reasonable distribution of

service while retaining the lowest but efficient employees. There is

also possibility of understanding the effect of paying overtime

work versus staffing new employees on overall productivity.

HR Insight: Generating and disseminating HR Managers reliable

and cohesive talent insight to efficiently manage employees'

performance and competencies. HR and top file and rank can get

clarity into High, Slow and Low performing talents, to develop

and retain key talents.

HR Causal Effect: Delivering the ability to correlate HR

information with overall functioning processes to better

Transmitting HR Data into Insight


apprehend the causal effect of HR investment on results in

congruence to organizational objectives.

Moving forward to Execution of HR Analytics from transmitting

data to insight is lucrative and significant part of HR Analytics, a

few live cases are narrated in the table below. The companies such

as Google, AMC Theaters, HP, IBM and Kaiser Permanente have

implemented HR Analytics in different functions of their

respective HR department as mentioned below.

Uses of HR Analytics- Data Execution

HR Function Company Name

Execution

Personnel Recruitment Google Google applies its proprietary predictive modeling to the field of recruitment as well. They have learned not to rely on traditional performance indicators like school or GPA, which prove to not have much predictive value. Instead they use five key, measurable attributes that correlat e with successful hires: coding ability, cognitive skills, leadership, humility & ownership. (Friedman 2014)

Employee Recruitment

AMC Theaters

AMC used workforce analytics and employee profiling to identify the core traits of superior customer service representatives, and re - modeled their hiring and interview process to predict successful hires. The result: increased employee engagement, lower turnover, and improved client satisfaction. (Kruse 2013)

Employee Retention

HP

HP used data science to determ ine create a ‘flight risk’ indicator for its employees. (Single 2014) The program is described to have identified opportunities to save A3MMjI but there was also a lot of negative fallout in the mo department once employees realized what was happening. A good example of the potential of using predictive modelling, but also in the sensitivity of working with people analytics

Workforce Planning IBM In 2010, a team of IBM researchers from the Watson laboratory were awarded with the Daniel H. Wagner prize in Excellence in Operations Research Practice for a project called OnTheMark (OTM), applied stochastic modeling and supply chain techniques to workforce planning. (Butler 2011) The presentation of the project introduced three core modelling techniques (Squi llante 2010):

Demand Forecasting:

probability modeling of sales opportunities, likely revenue and skills needed to deliver opportunity based on historical operations data comparisons.

Risk based capacity planning: Optimization models map current available skills, utilization to maximize productivity, and opportunity loss risked if under staffed.

Supply evolution & optimization:accounts for time variables in supply and the human nature of the service product. This step takes into account hiring, promotion, skills acquired over time, and attrition over the entire ecosystem over time.

Kaiser Permanente

Two major projects at KP helped them to close anticipated gaps in their service delivery: (Shen 2011)

Supply and Demand Forecasting: prediction of future critical business drivers in relation to anticipated market forces such as: process improvements, anticipated market size, changes in technology and changes in healthcare delivery. Comparison to current skills and capacity .Leadership behavior modeling: regression analysis of high performance team indicators: quality, safety, delivery performance, & innovation were correlated with the following leader behaviors: new hire orientation, setting clear expectations, coaching and using lean tools.

LeadershipHR Planning and

Source: Daniel B Macdonald (2016) 5 HR Case Studies in Predictive Analytics , Adapted from http://www.talentrics.com/case_studies/

Daniel summarizes as these five examples of applied analytics in

the field of Human Resources are only a small set of a much

broader movement in the profession. As a new generation of HR

data scientists emerges, and improved optimization methods are

discovered, it is becoming more and more common to see

organizations move to data driven HR decision models

Conclusion

References

Human Resource department has essential operational functions

that can be enriched by relating procedures in HR analytics. These

are talent acquisition, Training & Development, Measuring

performance, compensation management etc., HR analytics can

support to dig problems and issues adjoining these necessities and

by means of analytical process will direct the HR Managers to

answer queries and understand from information at hand. This

will facilitate the HR Managers to make appropriate decisions and

take suitable actions.

1. Boudreau J. &c Ramstad, P. (2007). Beyond HR: The New

Science of Human Capital, Boston, MA: Harvard Business

School Press.

2. Davenport, T., Harris, J., & Morison, R. (2010). Analytics at

Work: Smarter Decisions, Better Results, Boston, MA: Harvard

Business School Press.

3. Davenport, T, Harris, J., & Shapiro, J. (2010). Competing on

talent analytics. Harvard Business Review, 52-58.

4. Falletta, S. (2014). In search of HR intelligence: Evidence-based HR

practices in high performing companies. People & Strategy, 36, 4, 28-37

5. Mick Collins (2013), Change your company with better HR

Analytics, Harvard Business Review, Dec 2013

6. Vikas Arora (2016), Workplace Analytics: How mature are

organizations, People Matters, May 2016.

7. Daniel B Macdonald (2016) 5 HR Case Studies in Predictive

Analytics, Retrieved from http://www.talentrics.com/case_studies/

h t t p : / / w w w. t c s . c o m / S i t e C o l l e c t i o n D o c u m e n t s / W h i t e -

Papers/Predictive-Analytics-HR-0115-1.pdf z

Sample of Technology Platforms used for Analytics

IBM

Microsoft

Microstrategy

SAS

SAP

Tableau

Qlik

TIBCO


Disruptive Technologies:Breaking Boundaries,Transforming Work, Enhancing Lifestyles -A Conceptual Study

Key words: Disruptive Technology, Mobile Internet, Near Field Communication, Smart Watches, Mobile Wallets, Digital Climate, Digital Excellence, Digital Transformation, Smart City

* Research Scholar , IFIM Research Centre Under Visvesvaraya Technological University, Belagavi & Associate Professor , IFIM Business School Bangalore**Chartered Accountant

IntroductionGrowth in the Indian economy has been fuelled by rapid changes

in technology in the recent years. Changes in technology have

occurred so fast that at times it is difficult to keep pace with these

new developments.

Technology has in fact impacted the way we live and work. It has

led to the development of new markets, new products and

services, new business models and made redundant established

norms and ways of doing business. It is therefore important to

understand the likely economic impact and possible disruptive

changes that any new technology can bring to a market place.

Corporations must understand how technological advancements

can erode their customer base and resultant market share or how

it can help them develop competitive advantage. Governments

will have to create infrastructure where its citizens can

continuously upgrade themselves in order to survive and prosper

through the changes that technology will bring. The regulators

will also have to be nimble in terms of new regulations that may be

required to protect the rights and privacy of citizens.

This paper looks at the parameters that helps in classifying

technologies as disruptive and tires to identify a few upcoming

technologies that are likely to have a major impact on the

prosperity of nations. In particular, the paper will focuses on the

impact of mobile internet on different sectors of an economy.

Transformation possible in education, communications,

transportation and healthcare sectors due to the advent of mobile

internet technology is assessed. The key drivers that would lead to

the proliferation of mobile internet technology are also evaluated.

Economist Joseph Schumpeter has aptly said that “the most

significant advances in economies are often accompanied by the

process of creative destruction, which shifts profit pools,

rearranges industry structures and replaces incumbent businesses

AbstractIn the recent years growth in the Indian economy has been fuelled

by rapid changes. Changes in technology have occurred so fast

that at times it is difficult to keep pace with these new

developments.

Technology has in fact impacted the way we live and work. It has

led to the development of new markets, new products and

services, new business models and made redundant established

norms and ways of doing business. It is therefore important to

understand the likely economic impact and possible disruptive

changes that any new technology can bring to a market place.

This paper looks at the parameters that helps in classifying

technologies as disruptive and tries to identify a few upcoming

technologies that are likely to have a major impact on the

prosperity of nations. In particular, the paper will focus on the

impact of mobile internet on different sectors of an economy.

Transformation possible in education, communications,

transportation and healthcare sectors due to the advent of mobile

internet technology is assessed. Current trends seen in these

sectors are highlighted .The key drivers that would lead to the

proliferation of mobile internet technology are also evaluated.

The paper also tries to postulate what is likely to happen in future.

The mobile phone being the identity of a person using near field

communications, life in a smart city and the redundance of

hospital services due to the introduction of a medical tricorder are

explored.

We conclude by identifying a few challenges that consumers,

corporation and governments' will face in light of disruptive

technologies and discuss probable ways of addressing these.

Priya Angle* | Bhaswati Biswas**


”What are Disruptive Technologies?

Mobile Internet Economies:

A disruptive technology displaces an established technology and

shakes up the industry or creates a ground-breaking product that

creates a completely new industry and a new way of doing business

A technology could be classified as disruptive if it has the

following characteristics:

1. High Rate of Change

2. Broad Impact

3. High Economic Value

4. Potential to change Status Quo

Disruptive technologies are those that change rapidly in terms of

price and performance, as compared with substitutes or

alternative approaches. These technologies experience

breakthroughs that enable them to change at an accelerated pace.

Disruptive technologies affect a large number of people across

organizations, industries and geographies. These technologies

lead to the introduction of new products, new services and new

machines, that improves the efficiency and effectiveness of masses

These technologies are high value in nature implying that they

significantly impact profit potential of firms, GDP and capital

investment patterns of nation.

Such technologies change the way people live and work. They

create new opportunities, make businesses obsolete, and change

the status of competitive advantage enjoyed by nations.

Mckinsey Global Institute has identified twelve upcoming

technologies as potentially disruptive technologies( Table 1). This

paper however, would focus on how the Mobile Internet is

transforming lives across nations.

According to research conducted by the World Bank in 2008, a

10% increase in mobile phone use in low and middle income

economies leads to a 0.81% increase in per capita GDP growth

annually. Advances in wireless networking technology has led to

the development of a large number of new services and

applications that have resulted in significant improvement in the

standard of living for people across nations. A study conducted

on the fish industry in South India, by economists of Brown

University highlighted that the use of new phones had helped

sellers reduce their costs by 4% and increase profits by 8%.

Improved productivity and the creation of new business models

have been possible because of mobile internet. The computing

power of smart phones today is better than that of

supercomputers of the previous decades. The speed of mobile

data delivery as well as the quality of wireless networks has

improved with each passing day and is likely to be enhanced

further with the introduction of fourth –generation (4G)

networks. The convergence of cellular telephone networks and

the internet led to the development of mobile broadband as we

see it. While the 3G networks focused on voice, the 4G network

have been developed to handle large quantities of data. The

challenges faced by mobile internet so far have been the cost,

speed of service and uninterrupted availability. These shortfalls

are likely to be addressed by new emerging technologies.

sources with reduced harmful climate impact

Mobile Landscape in India

Mobile Internet Opportunities:

More than 53% of Indian homes, roughly 70% in the villages, lack

toilets. In contrast, the number of mobile phone subscribers in

India has almost touched the billion figure mark. According to

the latest report from TRAI mobile phone subscriber base in

India recorded 6.71% YOY growth to 980.81 million users in Q2

2015

Low entry barriers have led to the success of mobile application.

The advances in internet mobile technology are driving

transformation across many sectors like education, energy,

healthcare, banking and transportation.

Communication One carries in pocket a 5-inch device that allows

one to call, message, search information on the internet, take

pictures and videos and share them via e-mail, whatsapp or social

media. One can have a music library composed of many songs,

and if one gets bored on the car/bus/train/metro, s/he can watch

the last episode of their favourite serial , listen to music, browse

through the day's newspaper or read a book. All of this can be

done within 10 seconds, and at an affordable price.

Education processes are likely to become more flexible and

unique because of wireless mobile devices. Going forward, the


classrooms may not be the focal point of student education.

iPhone and iPads with a plethora of educational application will

not only make learning fun but also will also innovative. SMS

facilities are already being used by many schools to communicate

important messages to parent and students. Tablets are being used

by teachers in coaching institutes. Near Field Communication

enabled phones could help student use their mobiles to mark

their attendance, pay canteen expenses and also review books on

their machines.

Problems of poor infrastructure and cost that plague the

education systems in developing countries could be overcome

using mobile internet technology. The information asymmetry

that exists between urban and rural populations can be bridged

using mobile phone.

Healthcare can benefit immensely because of mobile internet

technology. Widespread use of mobiles can be tapped to provide

quick and expert care to underdeveloped, remote or rural regions,

at low costs. For example, applications like pill phone, used in the

US, help in providing reminders about dosage amount and

dosage time, to patients on their cell phone. Many applications

also provide information on body mass index, nutrition and other

health indicators. GPS systems can also be used to warn of

medical hazards that individuals might encounter. For example a

GPS enabled mobile device could warn asthma patients when air

quality in a region reaches dangerous levels because of pollutants

or allergens.

Fitness and tracking apps have been around earlier but 2015 saw

them being more tightly integrated with gear such as fitness bands

and pedometers. Garmin, Tom, Fitbit and even watch majors

such as Timex have jumped on to this bandwagon. With Swiss

watchmakers announcing smart watches, 2016 might well see the

debut of fitness apps from storied companies.

Transportation space is also getting transformed due to mobile

internet. Access to real time information about traffic condition,

flight/ train status, less congested routes is making lives of

commuters easier. Already, cities in the US like San Francisco are

using mobile networks to promote “smart parking systems” that

enable commuters to identify and pay for open parking slots using

their mobile phones. Even commercial transport can benefit from

mobile broadband as tracking and tracing vehicles and better

inventory management would be facilitated.

Mobile Banking and Mobile Wallets are common in many

developed countries like US, Japan and Korea. Single, powerful

digital devices are replacing the traditional wallets as far as

transactions relating to cash, credit cards and personal

identification are concerned. Online payment, electronic

boarding passes and payment made using mobile phones is not

only providing convenience to consumers but is also enabling

service and application innovations and productivity

improvements

Today, people no longer spend hours gazing at a computer screen

after work or class; instead, they use their mobile devices to stay

online everywhere, all the time. 24/7 communication is the new

way of life now. Anyone failing to keep abreast of this radical

change is losing out on an opportunity

While the benefits of mobile internet are immense, meaningful

participation of all the stakeholders would be only possible if the

requirements pertaining to the key drivers of digital excellence are

met.

The important drivers of digital excellence are (Chicago, May

2007, Report of the Mayors Advisory Council on Closing the Digital Divide, “ The City that Networks: Transforming Society and Economy through Digital Excellence)

• Effective Network Access – high speed, reliability,

affordability and availability at all places.

• Affordable Hardware – that will enable complete

utilization of the entire range of internet capabilities.

• Customized Software – catering to the requirements of

individuals, families communities and businesses

• Digital Education - for users to make them comfortable

and proficient with the new technology

• Evolving Mindsets - Willingness to continuously learn

new things and identify new opportunities.

The Digital Climate Success Factors

Digital

Transformation

Digital

Excellence

Access

Hardware

Software

Education

Mind- Set

(Chicago, May 2007, Report of the Mayors Advisory Council on Closing the Digital Divide, “ The City that Networks: Transforming Society and Economy through Digital Excellence)

Current Trends :Scenario 1 - Flight, Train, Bus, Hotel Bookings via Mobile Sites,

Apps rise (Source: Business Standard)

In a clear sign of changing hotel and flight booking habits among

Indians, travel portals like MakeMyTrip and Cleartrip are seeing

about half of the hotel bookings and one- third of their flight

bookings coming from mobile phones, including apps.

Mobile booking is assuming a greater importance for these

portals. For some of the portals, mobile apps are accounting for

over half of the traffic.

As per Clear trips latest quarter report over 60 per cent of total

traffic came from the mobile channels, overtaking desktop

channel for the first time. Clear trip's mobile app has seen over

nine million downloads since its launch in 2012. Make My Trip


too is witnessing a similar mobile growth story. Its app has seen 12

million downloads in four years.

The chances of retaining customers as well as their engagement

works better in apps as compared to a web site. An app on a

customer's mobile phone ensures that there is constant

engagement.

One of the reasons behind the rising popularity of mobile site and

apps for travel portals is the convenience it offers. These apps

allow customers to book flights, hotels and bus tickets on the

move, cancel their bookings, track the status of their refunds, send

e- tickets and vouchers. It also allows them to locate hotels near to

their current location, and provide attractive last minute deals for

same day hotel bookings

Price Talkie achieves the following:

Makes selection easy for consumers

Instant consumer gratification

Instant results that help in

Grows market share

Reinforces brand awareness

Helps in customer retention and loyalty

The rapid increase in usage of smart phones (on account of falling

prices) and better internet access has resulted in an increase in app

downloads across tier- II and tier- III cities. Yatra's app has seen five

million downloads since its launch in 2012.

Scenario 2 - A retail mobile app : Future of retail in an app-

enabled world (Source: www.pricetalkie.com)

Price Talkie is a mobile app that works for all brands, across all

segments. This enterprise marketing software is used by brands to

rapidly introduce, target, track and modify sales promotions

across entire retail network instantly, anytime and anywhere. It is

used by retailers and consumers to discover brand promotions

and participate in them. It is an unique app that straddles

seamlessly between B2B and B2C business models.

Scenario 3 – Netmeds : Netmeds is India's largest online

pharmacy. It enables individuals to buy medicines online /

through the mobile app and get it delivered anywhere in India..

For example one could be in Delhi and order medicines over the

app for parents living in Chennai, which will be home-delivered to

them. One can get a plethora of benefits (convenience, comfort,

trust, cost advantage, time saving, reliability, relief). Distance is

not an issue as mobile technology shows the way to the future

Scenario 4 – Paytm, the Mobile Wallet

The mobile commerce platform allows buyers and sellers to do

transaction on its mobile app. It also has the facility of “cash on

the go” – the Paytm Wallet.

A digital wallet, Paytm Wallet can be used for:

• Recharges, bill payments, bus ticket bookings, shopping

from hundreds of categories on Paytm

• Send & receive money to & from friends and family

• Avail of services at partner destinations like Uber,

Makemyt r ip , Bookmyshow, Fab Furn i sh ,

HomeShop18 and many more.

• Can be used 'on-the-go' using web or mobile app

• Is RBI approved

• Is like ready to use cash

Scenario 5 - Mobile Banking & E- Commerce

The rising number of smart phones in the country, rapid growth

in e- commerce and the shift in consumer behaviour has

prompted several players including banks to launch their mobile

payment solutions. Long, serpentine queues for even basic

banking activities are now a story of the past; today's banks reside

in customers' pockets on their mobile phones.

The sector has changed considerably in the past 15 years, and

India's banking regulator is aware of this evolution. “The day is

not far when banks will be viewed more as technology firms

offering banking products and services. While this will be a new

challenge, I see this as an opportunity for banks to find new

growth drivers,” said Reserve Bank of India (RBI) Deputy

Governor H R Khan in August 2015.

Banking is undergoing a transformation, and the world,

including India, is at the cusp of that change. The concept of

brick- and- mortar branches is fading fast, with consumers

increasingly embracing technology for their basic banking needs,

especially driven by a rise in e- commerce. According to an

ASSOCHAM- PricewaterhouseCoopers study, India's e-

commerce sector could rise beyond $ 100- billion mark in five

years, from $ 17 billion at present.

Bankers see a future where the entire payment system will be built

around the mobile phone architecture.

Given the rapid pace at which mobile apps are being adopted for

banking, this seems credible. “Five years ago, we did not expect

mobile phones would have such a huge impact on banking. Now,

we cannot think of a future without them,” said Chadra Shekhar

Ghosh, Managing Director (MD) & CEO of Bandhan, India's

Mobiles as virtual Debit Cards


newest bank. Customers are paying taxi fares through mobiles and

soon may even pay the vegetable vendor using the same route.

A unified payments interface, launched in February,2015, aims to

make mobile phones double up as virtual debit cards. It will allow

account holders across banks to send and receive money through

smart phones using Aadhaar, phone numbers, or even virtual

payment addresses like e- wallets. No bank account details will be

required. Improvement in mobile data speeds, with 3G, 4G and

beyond, will make the process hiccup- free.

Mobile wallet generally refers to payment services performed from

or via a mobile device. Instead of paying with cash, cheque, or

credit cards, a consumer can use a mobile phone to pay for a wide

range of services and digital or hard goods. These transactions

come under the ambit of the Regulator.

In developing countries mobile payment solutions have been

deployed as a means of extending financial services to the

community known as the "unbanked" or "underbanked," which is

estimated to be as much as 50% of the world's adult population,

according to Financial Access' 2009 Report "Half the World is

Unbanked". These payment networks are often used for

(https://en.wikipedia.org/wiki/Mobile_payment)

Mobile wallet might be a new concept in India, but it has

surpassed credit cards in terms of the number of users. Noida-

based Paytm, has 20 million active users and this is higher than the

cumulative number of credit cards in India. There are 10-12

companies operating in the mobile wallet space in the country.

The players in the mobile wallet service space in India are Paytm,

MobiKwik, Oxigen and Citrus. Users can digitally store cash for

mobile and online transactions, however, money cannot be

withdrawn. Mobile wallet operators follow a semi-closed model,

according to which users load money in the wallets and make

payments to only those merchants that have operational tie-ups

with a mobile wallet service provider.

Digital wallets have already become extremely popular with

consumers, and all banks have launched their versions of wallets,

or virtual prepaid accounts. According to a Business Standard

report, the number of transactions via mobile wallets in 2014- 15

stood at 255 million, compared with 172 million transactions

through mobile banking. Though the size of transactions through

wallets remains smaller, mobile wallets exceed mobile banking in

the number of transactions.

Scenario 1

Imagine a scenario where your debit/credit cards are gone, air,

train, bus tickets have vanished, the loyalty/membership cards for

retail chains are binned.

You are the victim not of theft, but of the future - a future where

the wallet, purse, plastic cards, paper tickets and pockets have all

gone digital and live solely on your phone. Your identity is in your

phone. All of this will be possible because of near field

communications (NFC)

By tapping your phone on a payment terminal in a shop, airport,

train or bus station or retail shop your account could be identified

Rise of the Mobile Wallet

Future Scenarios

and payments made through an app on your phone.

Scenario 2 (Source : PCQuest)

What would it be like to live in a smart city? Cisco has created a

blueprint for it on its own sprawling 2.6 million sq ft. campus in

Bengaluru. Smart cities will integrate traditional technologies

with the new emerging technologies to improve quality of life.

Imagine that you wake up in the morning and open your mobile phone and check where your office bus has reached on a map, so that you can plan to reach the bus stand just in time. Your company too tracks you along with other employees who are on board its entire bus fleet, along with their gender and arrival times to ensure complete safety of each employee. If you prefer to drive down to work instead, then you check for free parking slots in your office compound from your mobile app and book one in advance.

You reach office and choose a cubicle you want to work in, because your company hasn't allotted any fixed seats to anyone. Each cubicle has a QR code, which you scan to login and personalize the work space. Once logged in, it adjusts the lighting and AC as per your preferences. Also, as you have already checked whether this cubicle was vacant from your mobile phone and booked it, the cubical has the workstation of a particular configuration you will be needing for your work.

During a break, you walk over to your office café to grab a coffee, and while there, remember that you have to book a meeting room for some visitors. You pull out your mobile phone and quickly check the status of meeting rooms on a map, and book the one that with an A/C, Internet access, projector and whiteboard.

When you leave office, all lights and ACs automatically go off. The entire city is under electronic surveillance. You pass by a kiosk where you see some ladies filing an FIR over a high-definition video chat and a touch screen with a complaint form. You'd never imagined that citizens would ever be able to do this, because doing so earlier required going to the police station.

You have to pick up something from the mall before going home, so you once again pull out your mobile phone to check which mall has a free parking slot, because it is rush hour and most malls would be crowded. You save both time and fuel by doing that. If the parking lot is full or you are tired, you open the big basket or the Grofer app and order online. You save time and effort, as also the jostling around.

Life in a Smart City


Scenario 3

With the development of high power computer chips, advanced

technology for cell phones and scanners, the invention of a

handheld device to take health measurements of individuals is a

possibility. Such a device would help to self diagnose medical

conditions. Such a hand held device could check vital organ

functions, detect the presence of dangerous organisms, and

human physiology. Such a device could bring huge increases in

productivity and cost-savings

The device should be able to do the following:

• Disease diagnosis.

• Show ongoing personal health metrics such as heart rate.

• Monitor ongoing health

• Summarize a person's state of health.

• Confirm quickly if a person is healthy or not. This

function would be similar to the check engine light on car.

Mobile technology is expanding the digital frontiers far beyond

what was even imaginable a few years ago. The disruption to

traditional communication media is beyond imagination.

To ensure that mobile broadband reaches its full potential,

nations must continue to support both the deployment of mobile

broadband technologies and the proliferation of mobile

computing devices through which to access the Internet.

Ensuring the trust and security of mobile networks; to encourage

companies to invest in mobile technology is necessary. Equally

important is digital literacy of people so that they can enjoy the

benefits of the mobile broadband technology.

The number of mobile Internet users in India is projected to

double and cross the 300 million mark by 2017 from 159 million

users at present according to a new report by Internet and Mobile

Association of India (IAMAI) and consultancy firm KPMG

Though India has low Internet penetration at 19% compared

with other developed and developing economies that have up to

90% penetration, the country has the third-largest internet user

base in the world, with more than 300 million users, of which

more than 50% are mobile-only internet users. This impressive

growth would drive India to become one of the leading internet

markets in the world with more than 50% of internet user base

being mobile-only Internet users( KPMG)

The growth will also be driven by the government's Digital India

initiative, collaboration among mobile internet ecosystem

stakeholders and innovative content and service offerings from

mobile-based services players.

Digital India is an umbrella programme that encompasses

providing internet access to all by creating infrastructure,

delivering government services on the web and mobile phone,

promoting digital literacy and increasing electronic

manufacturing capability.

Conclusion

However, there are challenges in the mobile internet ecosystem

that could impede growth substantially :

1) Telecom operators are finding themselves cash-strapped in

making heavy investment for network infrastructure upgrade due

to high license fees, charges and levies which total up to 28-29%

of the total revenue.

This is in addition to uncertainties around regulation and policy

primarily concerning merger and acquisition guidelines,

spectrum management and tax regulations that is adding to the

telecom companies' woes.

The content and service providers, despite being a source for

cutting-edge innovation, also face significant challenges

including slower and overloaded telecom networks,

experimentation with monetization models and underdeveloped

billing and customer care systems.

What perhaps worsens the situation is limited collaboration

between the different pillars of the ecosystem; each component

trying to take the challenges of demand, supply and customer

satisfaction head-on by itself.

To overcome various challenges, the business models of various

companies in the ecosystem would need to be redefined.

2) Over 60 per cent mobile users in India are facing network

problems while accessing internet across locations, says a

study(Source: Firstpost.com – April, 2015)

Users face differing mobile data issues depending upon location.

About 63 per cent people face quality and reliability issues (like

voice drops, connection breaks, inconsistent speed, non

availability of 3G) inside their house, according to a study by

Erricsson across 33 major cities.

The study shows 62 per cent users in mid-size and small cities face

issues of inconsistent speeds and app usage while outdoors and

63 per cent have web page load time issues indoors.

Consumers are willing to pay but there are certain barriers that

are coming in way of growth of mobile broadband in the country.

Network performance continues to be a challenge and is a key

driver of consumer perception (Erricson Study).

For those who do not use mobile broadband, affordability and

digital literacy are prime obstacles to adoption.

Further 48 per cent of those using mobile internet on 2G or 3G

are unable to perceive any difference between 2G and 3G

services.

Affordability poses a major barrier to mobile broadband

adoption, particularly in a market as diverse as India where

hugely varied socioeconomic factors affect price sensitivity. 88

percent of Indian smart phone owners who do not use mobile

broadband feel that it is too expensive.


Studies have shown that 70 per cent people use mobile

broadband to access video and 27 per cent more are willing to

start accessing it but not doing at present due to barriers of cost

and network.

3) Digital Literacy (Source :GSMA Study – July, 2015)

Non-users often lack the digital skills to be able to access the

mobile internet and discover what is available. This can be

compounded by a lack of motivation due to the perception of

limited relevant content

Digital literacy can be particularly problematic on feature

phones, where more steps are required to access the internet and

knowledge of what one is trying to access on the internet is often

required to conduct the search action

India stands on the verge of the internet era where it is poised for

transforming large parts of its economy and society. Achieving

large scale internet penetration and usage can enable India to

double the contribution of Internet to its GDP. All stakeholders

– government and policy makers, individuals, entrepreneurs and

enterprises have to collaborate to achieve this.

Some of the action point for future success could be:

• Extending infrastructure for low cost, high speed

connectivity to semi-urban and rural parts of India.

• Concerted actions by policy makers and businesses to

improve infrastructure and increase the reach of

Internet.

• Reduce the cost of internet access and usage even more.

• Enable large scale digital literacy to promote end user

engagement.

• Introduce internet based applications in nontraditional

areas such as agriculture, utilities, healthcare etc.

• Create a favourable environment for mobile internet based

businesses

References:

1. NASSCOM, 10,000 Startups, Edition 2015, “Start- up India- The Momentous rise of the India Start up Ecosystem”

2. McKinsey Global Institute, May 2013, “Disruptive technologies: Advances that will transform life, business, and the global

economy”

3. Scott M. Andes and Daniel Castro, September 2010, “ Opportunities and Innovations in the Mobile Broadband Economy”

4. Chicago, May 2007, Report of the Mayors Advisory Council on Closing the Digital Divide, “ The City that Networks: Transforming

Society and Economy through Digital Excellence.

5. Prasad Krishna, May 22, 2013, The Centre for Internet & Society in collaboration with Ford Foundation, “India's Internet Growth

& Challenges”

6. Anil Chopra, 2015, PC Quest, “Smart Cities as the Ultimate Form of Digital Transformation”

7. Pricetalkie.com : December, 2015

8. Firstpost.com : April, 2015

9. Business Standard editions : 2015-2016

10. Economic Times editions : 2015-2016

11. Livemint.com : January, 2016

12. GSMA Study – July, 2015

13. https://en.wikipedia.org/wiki/Medical_tricorder

14. https://en.wikipedia.org/wiki/Mobile_payment



Archana Shrivastava* Manujata Midha** Richa Verma***| |

India in order to understand the quality of students provided to

the employment market. In Indian context, employability skills

mainly contribute for an employer's work performance with main

emphasis given on literacy (means knowledge here) and language

skills together with an explicit technical training and domain

specific skills. In India where the language and dialect changes

with a move of every 200 km, along with the state educational

stipulations, we observe an immense variation in student's

development of tier I, tier II and tier III cities of this country. Tier I

cities, a term in India, is mainly used for metropolitan cities which

are highly commercialized with latest input of technology, large

industries, business organizations and development perspectives.

Tier II cities are cities mainly categorized on the basis of fast

growing urban centres and tier III cities are categorized as cities at

a developing st age . 'Fol lowing the government ' s

recommendations of 6th Central Pay Commission of 2008 the

cities of India were categorized on the grounds of Compensatory

C i t y A l l o w a n c e a n d H o u s e R e n t A l l o w a n c e ' .

(www.mapsofindia.com). However, after 2011 census, the

population of the city has been set as the criteria for the

segregation of Indian cities, broadly termed as tier I, tier II and tier

III cities. The students studying in different tier cities accordingly

develop their abilities for professional work due to the distinctive

exposure gathered through a multiplicity of living standards.

This research study is an effort to understand the variation of the

quality of students and their employability skills from tier I and

tier II cities. This research study will highlight the factors showing

a clear comparison between the employability skills of budding

employers from different cities. In today's era the demand for the

recruiters in job market is based on the employability skills of the

AbstractIn today's competitive world, job requirement and the role of

employment market are decided by employability skills.

Employability skills set is a combination of different types of

behavior, interpersonal skills and analytical ability of judgment,

apart from many more qualities which lead an employer to be

superior in performance. Employability skills are also termed as

generic skills in a person that allows them to avail a competitive

edge in their job markets. In addition to the domain specific skills

which are generally shown in the expertise of subjects and training

of specialized topics, every student is expected to develop some

employability skills such as decision making, listening skills, time

management, assertiveness, problem solving skills, team work,

focus and patience to list a few. Such employability skills, required

for organizations, industries and other concerns are no longer

confined to a particular job profile but is learnt by stepping on-to

the outside world and is evaluated by the osmosis of a real world.

India is one of the largest educational systems with enormous job

opportunities yet there is a huge deficit of employable talent in

Indian companies. The need gap is the lack of employability skills

among Indian students. The NASSCOM predicts “India will

confront a huge shortage of skilled workforces in the next

decade”. The number of students graduating in India is twice as

much as US and 3 times more than UK but still the country faces

about 60% of unemployment. A better part can be blamed on the

lack of employability skills among students or a diverse section of

students spread into a vast geographical area who are unable to get

the right opportunity to be placed.

The purpose of this research activity is therefore, to find out the

significant employability skills in the students of different cities in

Key words: Employability, Skills, Metro cities, Tier-II cities, India

*Asst. Professor-Business Communication at Birla Institute of Management Technology.**Asst. Professor-Business Communication at Birla Institute of Management Technology.,***Asst. Professor HSS Dept.UIET, CSJMU Kanpur


students, and this research activity will help analyze the self-

assessment of students as well as their peer's perspective of their

skills.

• To compare employability skills of a post graduate student's

self-assessment with peer's assessment in both teams from

tier I and tier II cities.

• To identify the difference between the categories of

employability skills of both teams from tier I and tier II cities.

• To analyze the valuable factors of special employability skills

of a particular student through Principal Component

Analysis.

The purpose of conducting this research is to assemble the data

for the two teams of tier I and tier II cities, so that we can know the

exact importance of these skills of every student in terms of their

recruiters. This research paper will also prove useful for the

educational institutes for further development of their students

in terms of the demand of organizations. For the students also this

research activity will make them realize and analyze their own

generic skills and their peer's perspectives which show the level of

their employability skills and provide them ways to enhance their

skills for better placements.

Boud and Symes, 2000, p. 14 draw a distinction between work-

based and learning in the workplace as “a form of learning that

occurs on a day-to-day basis at work as employees acquire new

skills or develop new approaches to solving problems.”

It has been noted that most of the researchers in this area believe

that the business employer look for potential employability skills

rather than domain specific skills. In India also, the same trend of

increasing importance of employability skills is realized. India's

The methodology of this research involves three

stages:

Introduction

current economic boom can be attributed largely to the volume of

educated knowledge workers it produces each year (Shalini Verma

2012). Still the fact is out of total graduates it produces, between

10%-25% cannot be employed by any technology firm in the

country. The country no doubt is facing national skills deficit.

Some significant facts about the employability status in India are

shocking. According to NASSCOM, ONLY 10% graduates with

non- specialized degrees are considered employable by leading

companies. Report 2007 considers youth unemployability as a

bigger crises than unemployment, a consultancy firm Aspiring

Minds in the employability study conducted in 2011 reports that

merely 4.22% of engineering graduates are employable i product

companies and only 17% in IT services. Study conducted by

McKinsey reports 15% finance professionals and 10% graduates

can be employed for general positions. Study conducted by

McKinsey reports 15% finance professionals and 10% graduates

can be employed for general positions.

Blom A. and Saeki H.(April 2011) in their policy research working

paper supported by World Bank, emphasize that one of the

impediments in India's further economic growth is 'insufficient

supply of quality skills' in the industry. “In India shortages of skills

are among the main constraints to continued growth of the

economy…. employers complain that most newly graduated

engineers lack suitable skills.” This is due to the economic

disparity among the metros and the tier 11 and tier 111 cities. To

bridge this gap the Indian National Skills Development

Corporation (NSDC) is working to meet the skill shortage. Indian

institute of Job Training (IIJT), a subsidiary of TeamLease

Services, India's largest staffing company has set up various multi

skills development centres across the country.

Simon Cassidy (2006) quotes (Sherer and Eadie, 1987, p. 16):

(1987) for defining employability skills as the skills “which cut

horizontally across all industries and vertically across all jobs from

entry level to chief executive officer”. Cassidy (2006) also

emphasizes that it is the “responsibility of the educational

institutions to develop such skills.”

The interest of our research activity is to analyze the sense of

responsibility to the educational institutions to develop the

specific employability skills to their students. All India

management association (AIMA) refers to “the most challenging

national requirement is the need to mobilize effectively the young

and qualified human resources. There is a huge gap between what

the industry needs and what is available in terms of skilled

candidates”. For the overall growth of the country, manpower

should be enabled not only with the technical skills but also with

non-technical, i.e., transferrable skills. Employers seek “evidences

of competencies and skills rather than just qualification”

(Shrivastava A. & Midha M., 2014). The purpose of our research

paper is to meet these criteria of understanding the quality of

1-Julka & Pankaj Mishra, 'Only 25% IT graduates readily employable: Nasscom', Economic Times , 7 April 2011 http://articles.economictimes.indiatimes.com/2011-04-07/news/29392668_1_engineering-colleges-employability-study-nasscom (retrieved on 11 September 2015)

2- http://www.studymode.com/essays/The-Paradox-Of-Employee-Poaching-In-156836.html Retrieved on 11 September 2015 3- http://www.studymode.com/essays/The-Paradox-Of-Employee-Poaching-In-156836.html Retrieved on 11 September 2015


employment skills in tier I and tier II cities.

This research work is first of its kind to compare the employability

skills among a set of students in tier I and II cities. It is a qualitative

research conducted by critically observing ten factors identified as

the most valuable variables for enhancing employability skills of

the teams of the students. These variables are decision-making,

listening, interpersonal skills, teamwork, analytical ability, focus,

patience, time management, assertiveness and problem-solving

skills. This research will lay the foundation for identifying the gaps

in the skills of these students in different cities, for the

academicians and researchers to further understand how to

minimize the gaps and match the requirements of the recruiters.

The paper will also try to extract significant components of

employability skills with the possibility of using the output for

further research in this area.

Employability Skills is a term which is defined by different authors

in different ways. According to Mason , taking the employers'

point of view into consideration, 'employability' refers to 'work-

readiness', which consists of “possession of the skills, knowledge,

attitudes and commercial understanding” that can help the

students in making valuable contributions to their organisations

soon after joining them. . Quoting Peter Knight from Hobsons

Directory 2005, highlight that “ability to cope with uncertainty;

ability to work under pressure; action-planning skills;

communication skills; IT skills; proficiency in networking and

team working; readiness to explore and create opportunities; self-

confidence; self-management skills; and willingness to learn” are

the most valued skills by the employers at the time of hiring

process. For , while quoting Cotton (2001) on his extensive

research, the employability skills are the non-technical skills which

include oral communication, reading, writing and arithmetic,

learning skills, problem solving, decision making, affective skills,

dependability, positive attitude, team work, interpersonal skills,

self-discipline and self-management.

in their study emphasize that these skills are very important

because today the jobs require individuals to do multi-tasking.

They emphasized that the employability skills which are

transferable are as important as the technical skills from the

perspective of employers because these skills allow students to

apply their technical skills effectively and efficiently at the

workplace. They identified four such transferrable skills, i.e.,

interpersonal skills, team-work, creative skills and critical

thinking abilities, as the most significant skills. Employability

Skills is a broad term which has been defined in different ways

over the years and basically include a spectrum of skills which are

required by the students for employment and career progression.

Some studies are done in the past to examine the employability

skills of the industry ready students. in their research on the

students of South Africa revealed that there is very little that has

been done to develop employability skills of the students. Their

results show that “97% of the unemployed matriculates and

graduates in South Africa had no idea as to what these

employability skills are” and don't even realise that these skills

Literature Review

have a strong impact on their employability. in their study

followed 'triangular design approach' for examining the

employability skills by studying the attitudes of students, faculty

and HR managers and identified eight basic employability skills:

'literacy and numeracy', 'critical thinking', 'management',

'leadership', 'interpersonal', 'IT', 'systems thinking' and 'work ethic

disposition'. They believe that an integrated triangular approach

is required by understanding the attitudes of students, needs of

the employer and the approach followed by the faculty, to

empower students with these eight employability skills. It is very

important to understand the expectations of the industry as well

the techniques followed by educational institutions to groom

students in order to make the students ready for employment.

have highlighted in their research in Malaysia that it is the

responsibility of the universities to enable students with

knowledge, intellectual skills and also the generic skills such as

ability to communicate, possession of attitudes and values of

responsible citizens. The information received by the universities

from the employers play a significant role in understanding the

future trends, so that appropriate changes in the curriculum can

be made.

, in their policy research working paper on Indian graduates,

supported by World Bank, mention that it has become

demanding now to find out the kinds of skills expected by the

employers from teachers, administrators and policy makers. Their

findings have suggested that the assessment, teaching-learning

process and curricula should be refocused away from lower-order

thinking skills like remembering and understanding, and towards

higher-order skills like creativity, analytical and problem-solving

skills. They also emphasize that more interaction with employers

is required to understand the demand for the skills in the

industry.

In an assessment of the state of management education in a

seminal work titled 'Rethinking the MBA: Business Education at

a Crossroads' , the authors feel that business schools are in the

business of developing leaders and entrepreneurs and to be

successful in their mission they need to reassess the facts,

frameworks, and theories that they teach , while at the same time

rebalancing their curricula so that more attention is paid to

developing their skills, capabilities, and techniques that lie at the

heart of the practice of management (the “doing” component)

and the values, attitudes, and beliefs that form managers'

worldviews and professional identities (the “being” component).

Enhancing soft skills for engineering and management students

in India is a major challenge as the Indian industry demands ''first

day-first hour productivity'' from its prospective employees. These

soft skills are the pleasing presentation of hard skills. These soft

skills are also called people skills, life skills, interpersonal skills,

employability skills, and emotional intelligence. Some of the

companies in India, such as Sun Microsystems, Mastek, Polaris

and Infosys, have made soft skills training as part of their training

module for the new employees. The right teaching and training

methods can influence the students to imbibe these skills

effectively . This study suggests some of the training methods like


case study methodology, role plays, management games,

sensitivity training, Just A Minute (JAM), debates, group

discussions and outward bound training, which can help develop

these skills effectively. The findings of his research highlight that

along with an effective synchronization amongst the four

stakeholders, i.e., teachers, students, industry and directors of

educational institutions, the fifth force, i.e. the Training and

Placement Officer (TPO) need to be included for giving soft skills

training and bridging the gap between the students and the

industry.

In India, the general perception which goes in the industry is that

there is a difference in the level of skills possessed by the students

in a metro/tier-I city and in a tier-II city. Recruiters get multiple

dimensions of profiles. Not many studies have been done in the

past to substantiate the perception. Some of the differences

identified by T V Rao, Siddhartha Saxena , Vijay Sherry Chand,

Rajeshwari Narendran, Kandaswamy Bharathan , and B H Jajoo

in the skills possessed by Tier- I and Tier- II cities in India point

that the key differences are in the area of exposure and confidence

the employees bring to the job. The ones from the Tire-II schools

do not seem to be that confident and have poor exposure to the

business world. They felt that Tier-III students have more

entrepreneurial abilities. They are more aware of ground realities

and are thus able to solve real life problems . A significant study

needs to be done to substantiate the difference between the

capabilities and skills of students from tier-I and tier-II cities of

India, so that the educational institutes across India come to

know about the gap between their curricula and the industry

expectations and are able to devise strategies to groom their

students effectively and to pay more emphasis on the weaker skills

to make them industry-ready.

In order to achieve competitive advantage in the industry,

students must enhance their employability skills along with their

technical or domain-specific skills. In India, the general

perception which goes in the industry is that there is a difference

in the level of skills possessed by the students in a metro/tier-I city

and in a tier-II city. But there is hardly any research done in the

past to substantiate the perception. This research was conducted

to compare the employability competencies of the students at

post-graduate level of a metro city and of a tier-II city.

The purpose of this research is, firstly, to compare the

employability skills of students at post-graduate level of metro and

two-tier cities in India, and secondly, to find out the significant

skills from the ones mentioned above which enhance the

employability of students. This research will identify the gaps in

the skills and will lay the foundation for further research to bridge

these gaps.

This research will help the students to analyse their skills from

their own as well as their peers' perspectives, and will also throw

light, for the recruiters, on the difference and importance of these

skills in the students of metro and two-tier cities in India.

This research paper will also prove useful for the educational

Problem Statement:

Purpose, Coverage and Scope:

institutes of both metro and two-tier cities in India, for the

development of appropriate employability skills in the students,

which are much in demand by the recruiters these days and to

work in the direction to fill the gap in the skills, if any.

The research conducted will also try to extract significant

components of employability skills with the possibility of using

the output for further research in this area.

As one of the purposes of the research was to examine and

compare the employability skills of the post graduate level

students of the metro and two-tier cities in India, 50 students

each from metro and two tier cities were selected. The research

started with the hypothesis in mind:

H0: There is a difference in the employability skills of students at

post-graduate level of metro and two-tier cities in India.

H1: There is no difference in the employability skills of students at

post-graduate level of metro and two-tier cities in India.

The data for the metro city was collected from one of the good B-

Schools located in Delhi NCR. While selecting the samples

educational background of the students were checked. As the

population was mixed, consisting of the students from all over

India the care was taken to pick up only those students who had

their previous education in metro cities only. Kanpur University

was selected to get the data for the two tire cities. Located at the

heart of the country, Kanpur University accommodates students

from many small cities located in central India. These cities are

mainly small or two tire cities. Before starting the assessment

procedure, the students were asked to register the self-assessment

of their employability skills. They were then divided in the teams.

Each team comprised 10 students. As the post graduate students

were selected for the study, the average age group of the

participants was between 21-24 years. Of the total population

selected, 80 were females and 120 were males. The short term

project was assigned to each team which they were expected to

complete in stipulated time. While working in teams they

displayed various skills including the ones mentioned above.

After the task got over the team members were expected to give a

collective feedback of each member of the team with whom they

had worked to complete the task. The collective feedback was

taken in the absentia of the candidate being evaluated. Peer

evaluation is significant because most of the time we live with the

self perceived image but are judged by the image which others

perceive about us. In this process perceptions of colleagues were

used to substantiate or refute the claims made by the team

members in the beginning of the activity. Entire activity was done

under the strict guidance and observation on mentors/ faculty.

Total data collected was 200(50 self + 50 peer=100 each from

metro and two- tier).The results were compiled for further

analysis.

To reach to the final data, average scores of self and peer

assessment were calculated. Self assessment scores were added to

MethodologyProcedure

Research Technique


the group assessment. The group assessment scores were assumed

to be two times more as team of 9 members collectively gave peer

assessment for each candidate. The formula used for converting

the data is:

Average Score= 1SA+2PA/3, where SA is Self Assessment and PA

is Peer Assessment.

The Independent sample t-test was conducted to compare the

means between the two unrelated groups on the same continuous

dependent variables. Findings of the test are displayed in the next

section.

Next part of the research focused upon finding factors among

observed variables. The data contained ten variables to check

employability skills of the post graduate students of Metro and two

tiers cites. The purpose then was to reduce the number of

variables. Principal Component Analysis was conducted to group

variables with similar characteristics together.

Findings

Independent-samples t-testExhibit 1Group Statistics

Exhibit 2


6. Patience two tier cities (M=4.0, SD=.84) and metro

(M=4.7,SD= .52) conditions; p=.00, and

7. Problem solving skills two tier cities (M=3.5, SD=1.1) and

metro (M=4.2, SD= .87) conditions; p=.00.

Based on the results of T-Test we accept the null hypothesis over

H1.

Next part of the research focused upon finding factors among

observed variables. The data contained ten variables; each

variable measures some part of the common aspect of

“employability skills.” The purpose then was to reduce the

number of variables. Principal Component Analysis was done to

group variables with similar characteristics together. The test was

also conducted with the possibility of using the output for further

research in this area.

The first step was to check whether the sample is big enough to

perform Principal Component Analysis. Kaiser- Meyer- Olkin

(Exhibit 3) measure of sampling adequacy (KMO-test) was thus

performed. As the KMO was .647 which is > .5 the sample was

found to be adequate.

Principal Component Analysis

Exhibit3KMO and Bartlett's Test

Exhibit 4Communalities

Communalities represent the total influence on a single observed

variables from all the factors associated with it. In our case four

variables which were highly influenced are Analytical skills,

Problem solving skills, Patience and assertiveness. (Exhibit 4)

Total Variance Explained

Exhibit5

Total Variance Explained

Interpretation for t-test

An independent-samples t-test was conducted to compare the

employability skills of the students from two tier cities with that of

the metro cities. The results suggest that out of 10 employability

skills analysed there are only three skills in which students were

almost at par. These skills are Decision making, Time

Management and Assertiveness. In rest of the seven skills the p

value mentioned is < .05 which shows that there is a significant

difference in the scores. These skills are:

1. Listening for two tier cities (M=4.0, SD=.84) and metro

(M=4.7,SD= .52) conditions; p=.00,

2. Interpersonal skills two tier cities (M=3.6, SD=.94) and

metro (M=3.9,SD= .46) conditions; p=.02,

3. Teamwork two tier cities (M=3.6, SD=.11) and metro

(M=4.4,SD= .67) conditions; p=.00,

4. analytical skills two tier cities (M=3.6, SD=1.1) and metro

(M=6.8,SD= 1.1) conditions; p=.00,

5. focus two tier cities (M=3.8, SD=1.0) and metro (M=4.2,SD=

. 67) conditions; p=.03,


aComponent Matrix

Exhibit 6

Extraction Method: Principal Component Analysis.

Finally, the Component Matrix shows the factor loadings for each

variable. We went across each row, and highlighted the factor that

each variable loaded most strongly on. Based on these factor

loadings, we (three authors) think the factors represent:

• The first 4 subtests (listening, working in team, analytical

ability, and Patience) loaded strongly on Factor 1. As these

skills are natural skill we called them “Intrinsic skills”

• Assertiveness and Problem solving loaded strongly on Factor

2. These two skills were demonstrated explicitly so we

termed it as “Demonstrative skills”

• Interpersonal skills loaded strongly and time management

loaded fairly on Factor 3, which we will term “People's skills”

• Factor 4 is strongly loaded on Decision Making which we

will simply term “Decision making skills.”

So, according to the study done, the four extracted components

for analysing employability skills of the candidates can be Intrinsic

Skills, Demonstrative Skills, and People Skills and Decision

Making Skills.

1) The research was done in two cities of India, one representing

the metro/tier-I city and the other tier-II city. The result might

have been different if the data was collected from more number of

cities of India.

2) Peer assessment was done by the students from the same cities.

The result would have been different if the peer assessment was

done by the mixed groups of metro and tier-II cities.

3) The duration of the project in which the students were judged

by their peers was very short.

The overall study suggests that there is difference in the

employability skills of the students from two tier and metro cities

in India. Out of ten skills studied the mean differences are highly

significant for seven skills. Students from metro/tier-I city were

found to be better from the tier-II city in these seven skills. The

results that have come out in the study will prove instrumental for

the educational institutions of the two-tier cities in India, to

design delivery methodologies to support the development of

these skills and attributes in their students.

Self evaluation & substantiating it with Peer evaluation is

significant methodology to test the skills because most of the time

we live with the self perceived image but are judged by the image

which others perceive about us. In this process perceptions of

colleagues are used to substantiate or refute the claims made by

the team members in the beginning of the activity. The students

from both metro/tier-I and tier-II cities can use the methodology

to analyse their skills from their own as well as their peers'

perspectives and can work upon improving on the skills in which

they are lacking behind.

Considerably less research has been done on the employability

skills in India. The four extracted components i.e. Intrinsic skills,

Demonstrative skills, People skills and Decision making skills can

be used for further research in this area. The study also

recommends that college curriculum should address the four

factors to make student skills more relevant to the workplace.

Limitations:

Conclusion

In the process of extracting the components (Exhibit 5), we see,

the first eigenvalue is equal to 2.951, and corresponds to 29.508%

of the variance in the original data. The second eigenvalue,

corresponding to the second factor, is associated with 14.853% of

the variance in the original data, the third factor with 11.817%

and fourth with 11.173%.Together, the first four factors explain

67.351% of the variance in the original data. This gives and ides of

how many components can be extracted. In our case it was clear

that we can extract four components.

Extraction Method: Principal Component Analysis.

Examining a scree plot (Fig 1) also, in which the eigenvalues are

plotted from largest to smallest and looking for a "bend" in the

eigenvalues to determine where to stop the retention of factors for

our data, the solution is obvious, and we would only retain the

first four factors.

Figure1


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South Asia Region.

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IFIM Business School has achieved a unique distinction. It has probably become the first management institute in the

country to make sports and wellness a compulsory activity for its students. A certified fitness trainer monitors the progress

of the students. This is supported with a Centre for personality development which works in the holistic development of

the students. Overall, IFIM provides a three pronged platform for its students to excel. The two year full time Post Graduate

Diploma in Management (PGDM) program for working professionals being offered by IFIM is a unique program. This

allows the working professional to continue with their respective jobs whilst they study for a full time PGDM degree at IFIM

Business School. The program is designed to accommodate the job environment of the professional. The program is

designed in a manner in which the working professional can aim to move up the echelons of management.

The Centre for Developmental Education, under the aegis of which IFIM Business School operates, has a new member-

IFIM College. IFIM College was started in year 2010 and is successfully imparting graduate programs in the areas of

Commerce, Management and Computer Applications. These programs are approved by the Bangalore University.

IFIM Campus is located in the IT hub of Bangalore- Electronics City. With an environment-friendly campus situated

among the top blue chip companies, IFIM has made a steady progress. The placement record of the college has been very

impressive and the students have carved a niche for themselves in the corporate world. The B-School has a strong alumni

network and the illustrious alumni look up to their alma mater for the sound management foundation they have received.