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The International Journal of Management Research

July - December, 2013Vol. 01, No. 01

EditorialResearch PapersCritical Study of Different Variables Affecting the Formation of Capital Structure of Power Sector Units in India - Dr. Paresh Shah

Max Weber and Kautilya: A Comparative Perspective on Bureaucracy- Sathya Narayanan SR & Dr. KPV Ramanakumar

Analysis of Regional Bias in Primary Education in Gujarat: Dummy Variable Econometric Model - Dr. Kalpana Satija, Dr. Mohan Patel & Ms. Keya Patel

CRM in Beverage Industry - Ms. Sapna Dadwal

Case StudyReengineering the Transport of Motor Cycle through Indian Railways to Address Service Quality Challenges - Nagapavan Chintalapati

Book Reviews‘Where Have All the Senior Women Gone?: 9 Critical Job Assignments for Women Leaders’ by Ines Wichert - Ms. Khan Firdaus

‘Reverse Innovation: Create Far from Home, Win Everywhere’ by Vijay Govindarajan and Chris Trimble - Shiv Shankar Tripathi

ICBM-School of Business ExcellenceH Y D E R A B A D

Editorial Board

Prof. Mohd. Akbar Ali KhanVice-Chancellor, Telangana University, Nizamabad, India

Mr. Douglas ViehlandExecutive Director, ACBSP, USA

Prof. Vidyadhar Reddy AileniFormer Dean, Faculty of Management, Osmania University, India

Prof. B. Krishna Reddy Dean, Faculty of Management, Osmania University, Hyderabad, India

Prof. V. Shekhar Principal - UCC & BM, Osmania University, Hyderabad, India

Dr. A. R. AryasriDirector & Professor, School Of Management Studies, JNT University, Hyderabad, India

Dr. R. NandagopalDirector , PSG Institute of Management, Coimbatore, India

Prof. S. ZararDirector / Principal, ICBM – School of Business Excellence, Hyderabad, India

Prof. Jitender GovindaniDirector – Academics, ICBM – School of Business Excellence, Hyderabad, IndiaEditor – in – Chief, UDAAN: The International Journal of Management Research

Prof. Kunal GauravAssociate Professor (Marketing), ICBM – School of Business Excellence, Hyderabad, IndiaEditor, UDAAN: The International Journal of Management Research

Prof. Khan FirdausAssociate Professor (Finance), ICBM – School of Business Excellence, Hyderabad, IndiaAssistant Editor, UDAAN: The International Journal of Management Research

© All Rights ReservedPrinted and Published by Dr. Ritu Zarar, Chairperson, ICBM – School of Business Excellence, Hyderabad, India.

Opinions expressed in UDAAN: The International Journal of Management Research are of the writers’. UDAAN: The International Journal of Management Research and ICBM – School of Business Excellence, Hyderabad, India do not assume any responsibility. All rights reserved, including the right to reproduce the contents of this publication in whole or part without prior written permission. (Subject to Hyderabad jurisdiction Only)

1UDAAN: The International Journal of Management Research

Editorial

A warm welcome to the opening issue of ‘UDAAN: The International Journal of Management Research’, a bi-annual peer reviewed journal. It’s a real moment of pride and happiness for us to publish this journal with the intention to provide an opportunity to academicians, researchers and practitioners to exchange their knowledge and insights through the dissemination of empirical and theoretical research in the area of management.

The opening article titled - ‘Critical Study of Different Variables Affecting the Formation of Capital Structure of Power Sector Units in India’ by Dr. Paresh Shah is intended to analyze the firm’s efficiency through capital structure with special reference to Power Sectors Units in India.

Modern Management thought often find inspiration in ancient texts. In the article titled – ‘Max Weber and Kautilya: A Comparative Perspective on Bureaucracy’, the authors Mr. Sathya Narayanan SR and Dr. KPV Ramanakumar attempt to present the commonalities between the Kautilya’s Arthashastra and management model of propounded by Max Weber in early 20th century.

The importance of education in a country’s economic growth & development is unequivocal. The Indian state of Gujarat claims to be a model of economic growth. Dr. Kalpana Satija, Dr. Mohan Patel and Ms. Keya Patel in their article titled – ‘Analysis of Regional Bias in Primary Education in Gujarat: Dummy Variable Econometric Model’ try to examine the region wise performance of key indicators of primary education with the help of econometric analysis through Dummy Variable economic model in order to spot any regional discrepancies in the growth of the education sector.

Today’s marketing has become more competitive and complicated than ever before. Highly competitive and dynamic business environment has forced the organizations to focus not only on attracting, but more so on retaining their customers. Ms Sapna Dadwal in her article titled – ‘CRM in Beverage Industry’ makes an attempt to appreciate various CRM initiatives undertaken by players of Indian Beverage Industry in order to create and sustain long term relationships with customers.

Indian Railways is an Indian state-owned enterprise operated by the Ministry of Railways and has the distinction of being world’s largest railway networks. Indian Railways is one of


the most preferred options for passengers for travel and carriage. In the case study titled – ‘Reengineering the Transport of Motor Cycle through Indian Railways to Address Service Quality Challenges’ Mr. Nagapavan Chintalapati tries to present a narrative model of a service problem in the event of over carry in the parcel service of Indian Railways during the transport of a motorcycle.

The Glass Ceiling is a phenomenon that has gained attention in both the western world as well as in Asian economies, including India. Though the 1990s saw the corporate world open up to women holding senior positions, there is not much bite to this bark. Women miss out on Board positions due to cultural and structural impediments such as a skewed perception of Leadership qualities being male-oriented, getting labeled as ‘over-aggressive’ if a woman is overtly assertive, sabbaticals that most women invariably take to raise children and a tendency to take on functional rather than line roles. Ms. Firdaus Khan MR in her review of Ines Wichert’s book ‘Where Have All the Senior Women Gone?: 9 Critical Job Assignments for Women Leaders’ appeals to women to become ‘Career Intelligent’.

Irrespective of the various innovation failures, Innovation has become an essential element for business development and success. Reverse Innovation, a comparatively new concept that talks about the process by which firms in developing and emerging markets develops cost effective innovations for buyers in more developed markets. Mr. Shiv Shankar Tripathi in his review of the book – ‘Reverse Innovation: Create Far From Home, Win Everywhere’ authored by Vijay Govindarajan & Chris Trimble argues that a well established company should leverage all its resources to understand & meet the needs of developing or poor country consumers through innovations that can flow in a reverse manner from poor countries to the rich countries to experience further growth through reverse innovations.

This is undoubtedly the first of many to follow as ICBM – School of Business Excellence continues its ascent on the horizon of management education & research.

Wishing you all a very Happy Reading!

Prof. Jitender GovindaniDirector – Academics, ICBM – School of Business Excellence, Hyderabad, India

Editor – in – Chief, UDAAN: The International Journal of Management Research


Critical Study of Different Variables Affecting the Formation of Capital Structure of Power Sector Units in India

Dr. Paresh Shah*

AbstractThere have always been controversies among finance researchers and practitioners relating to capital structure of a firm. In this research paper, researcher has argued the case for relationship between capital structure in the form of debt equity ratio (leverage) on the firm size, earnings before interest and tax, agency cost, return on investment, and collateral value of the asset. Here, researcher has provided an overview of five sets of theories followed by linkages between different financial variables. The study has made an attempt to highlight that, the traditional belief of relationship between capital structure and profitability cannot be valid in present circumstances of business, and industry in an open economy. The nature of the relationship (more debt in the capital structure) suggests using the debt to such an extent so that it can bring the optimal level of profit for the firm. This paper also provides theoretical support to factors which affect the capital structure with respect to present corporate scenario.

Key Words: Agency costs, Debt Equity Ratio, Firm Size, Collateral value of asset, Leverages, Return on Investment.

IntroductionIndia’s power market is the fifth largest in the world. The power sector is high on India’s priority as it offers tremendous potential for investing companies based on the sheer size of the market and the returns available on invested capital.

In finance, capital structure refers to the way a firm finances its long term assets through some combination of equity, debt or hybrid securities. A firm’s capital structure is then the composition or ‘structure’ of its liabilities. For example, a firm that raises Rs. 20 crores in equity and Rs. 80 crores in debt is said to be 20% equity-financed and 80% debt-financed. The firm’s ratio of debt to total financing, 80% in this example is referred to as the firm’s leverage.

*Director, Fenil Institute, Ahmedabad, Gujarat, India.


The Capital Structure decision is very significant in financial management, as it influences debt equity mix which ultimately affects shareholders and owners return and risk. For example,

• The rate of dividend per share depends upon the capital structure of the firm.

• Capital structure is important from the view point of firm‘s financial liquidity and for raising capital in future.

• If capital structure policy is not framed properly, the situation of under or over capitalization may arise.

The larger portion of debt in firm‘s capital structure will increase financial risk of firm whereas larger portion of equity in firm‘s capital structure will decrease Earning Per Share (EPS).

An appropriate debt equity mix can be determined by taking into consideration the factors like operating leverage, financial leverage, and combined leverage; and also the coverage ratios.

a) Operating leverage refers to the ability of the firm to make maximum utilization of operating fixed cost and in turn to evaluate the effect of change in sales on Earning Before Interest and Taxes (EBIT).

b) Financial leverage refers to the ability of the firm to make maximum utilization of financial fixed cost and to evaluate the effect of change in EBIT on EPS.

c) Combined leverage refers to the ability of the firm to make maximum utilization of total fixed cost i.e., operating and financial fixed cost.

Firm having higher operating leverage should be accompanied by a low financial leverage and vice versa otherwise it will face problems of inadequate liquidity and in turn insolvency.


The optimum capital structure is based on combination of debt and equity that leads to the maximization of the value of firm through the minimization of the firm‘s overall cost of capital.

Literature ReviewVarious accounting based measures of leverage and their informational content are widely discussed in financial literature. It suggests that the choice of measure should be based on the objective of the analysis. For instance, the ratio of total liabilities to total assets can be considered as a proxy for what is left for shareholders after liquidation, but is not a good indication of the firm’s risk of default in the near future. Also, since total liabilities include such balance sheet items as accounts payable, which are used for transactions purposes rather than for financing, it may overstate the amount of leverage.

Modigliani and Miller published their seminal paper in 1958, and argued that in efficient markets the debt-equity ratio is irrelevant to the value of the firm and benefits of using debts will offset by decrease in firm’s stock value.

Conventional perception has been that using financial leverage increases firm’s value. In this respect, there is an optimal capital structure that minimizes capital costs. The increasing debt results in an increased probability of bankruptcy. Hence, the optimal capital structure represents a level of leverage that balances bankruptcy costs and benefits of debt finance. Additional costs of debt include potential bankruptcy costs, and agency costs associated with the monitoring of investments by lender of funds. Costs and benefits of alternate financial sources are “traded off” until the marginal cost of equity equals the marginal cost of debt, yielding the optimal capital structure, and maximizing the value of the firm. The alternative theory discussed by Meyers; Fama and French; describes a firm’s debt position as the accumulated outcome of past investment and capital decisions, commonly called as the “Pecking Order” theory.

Jansen predicts a positive link between financial leverage and profitability in efficient market and if the market is inefficient, there will be a negative relationship between them.


Research ObjectivesThe following research objectives are being set, for the present research study by researcher.

a. To analyze the firm’s efficiency through capital structure in the Power industry in India.

b. To analyze the impact of capital structure on performance of companies in Power industry.

c. To find out the significant factors which determine level of total debt.

d. To study the relationship between effective capital structure and profitability during 2006-2007 to 2010-2011 in power industry.

Research MethodologyThe present research study aims to provide a status on the extent to which a firm’s capital structure may differ and how value of firm changes. To study the impact of capital structure on the performance of firm, the study analyzed six companies from power sectors. The study used secondary data of selected companies’ financial statements, i.e., balance sheets and income statements from 2006-2007 to 2010-2011. The study carefully attempted to select a number of variables, i.e., factors which are essential to enhance the efficiency of the capital structure of firm as well as other factors important in the industry.

From the data of balance sheet and income statements the few ratios and parameters were calculated to aid the empirical model. The value of firm was represented by the market capitalization. This is significantly related to the market price of each firm’s stock assuming no new public issues (seasoned issues) in between the years of analysis.

The study used descriptive statistics to describe and to understand the basic features of the data, as it provides summaries about the sample and the measures. This has supported the study of minimum, maximum value, the mean and standard deviation of each variable.

The study also used cross sectional time series fixed effect model to analyze available data to find out the impact of capital structure on the firm value (expressed by the share price in the market). Cross sectional regression analysis measures the observations at the same point in time or over the same period but differs along with another dimension. Time series


analysis identifies the nature of phenomenon represented by the sequence of observations, observes a trend and forecasts the future value.

Correlation coefficient is used in the study to describe the degree to which one variable is linearly related to another. The correlation study seeks to identify the degree of association among the variables.

The empirical model used in the study considered the value of the firm (share price) as a dependent variable; firm size, profitability, public ownership in the form of capital structure, asset and operating efficiency, collateral value of assets, liquidity and business risk are taken as independent variables. Firm size is represented by share capital, profitability is measured through Return on Investment, public ownership is in percentage of capital structure, leverage is represented by the ratio of long term debt to total assets, asset and operating efficiency is measured through fixed asset turnover, collateral value of assets is measured as book value of assets, and business risk is represented by operating leverage.

Data Analysis tools and techniques

Sources of DataThe study is based on secondary data. Data were collected from Indian companies of power industry which are listed in the Bombay Stock Exchange (BSE), the major stock bourse of the country. Only listed companies were selected because accounting and market price information are publicly available from public domain.

Book values of the variables are collected from the www.moneycontrol.com for the period of five years ranging from 2006-2007 to 2010-2011. Data from six companies were collected. Thus total numbers of observation were 30.

Analytical tools and techniquesa. Student test (T Test) was run to verify suitability of the random effect model for the

data set.

b. Multiple Ordinary Least Square (OLS) Regression was run in order to measure the impact of explanatory variables on leverage ratio of the selected companies.

c. Pearson’s Correlation method was used to assess the multi co-linearity problem between the independent variables.


d. Regression Equation was used to assess the multi co-linearity problem among the independent variables.

Statement of Hypothesis

The following null hypotheses’ were framed to verify and test the capital structure variables and its impact.

Hypothesis H01 : “There is no significant relationship between Firm size (size) and Leverage ratio of the firm.”

Hypothesis H02 : There is no significant relationship between EBIT and Leverage ratio of the firm.

Hypothesis H03 : There is no significant relationship between Agency cost and Leverage ratio of the firm.

Hypothesis H04 : There is no significant relationship between Return on Investment (ROI) and Leverage ratio of the firm.

Hypothesis H05 : There is no significant relationship between Collateral value of the asset (CVA) and Leverage ratio of the firm.

Sample CompaniesSix sample companies were used to study the variables affecting the capital structure of power sector companies operating in India, i.e., Essar Power; NHPC Limited; NTPC; Power Grid; Tata Power; and Torrent Power.

Essar Power (EP) has two gas-based plants in Bhander and Hazira area and co-generation plant in Vadinar and Algoma. EP owns coal mines in Indonesia and Mozambique. EP also exploring opportunities for new projects based on thermal, wind and hydro energy.

NHPC Limited (Formerly National Hydroelectric Power Corporation), A Govt. of India Enterprise, was incorporated with an objective to plan, promote and organize an integrated and efficient development of hydroelectric power in all aspects. NHPC has expanded its objects to include other sources of energy like Geothermal, Tidal, Wind, etc.

India’s largest power firm, NTPC (formerly known as “National Thermal Power Corporation Limited”) (NTPC) was set up to accelerate power development in India. NTPC is emerging


as a diversified power major with presence in the entire value chain of the power generation business. NTPC has already ventured into consultancy, power trading, ash utilisation and coal mining.

Power Grid Corporation of India Limited (POWERGRID) is a Navratna state-owned electric utility firm headquartered in Gurgaon, India. Power Grid wheels about 51% of the total power generated in India on its transmission network and has a pan India presence.

Tata Power (TATA) is India’s largest integrated private power utility plant. TATA has set the momentum of growth, from Fuel and Logistics to Generation and Transmission to Distribution. Additionally, explored the various renewable sources of energy in India and globally. It has also made significant presence in wind, solar, hydro and geothermal energy space. TATA has infrastructure in Delhi, Jharkhand, and internationally in the Bhutan and Indonesia.

Torrent Power (TP) is one of the leading brands in the Indian power sector, promoted by the Torrent Group – a group committed to its mission of transforming life by serving two of the most critical needs - healthcare and power. With an all-round experience in generation, transmission and distribution of power, and a proven track record of implementing large power projects, TP is the most experienced private sector player in the city of Ahmedabad and Surat of State of Gujarat.

Data AnalysisAll companies are listed in Bombay Stock Exchange (BSE). The period covered is 2006-2007 to 2010 - 2011. Total number of observation is 30. The number of companies are broadly classified as Generation, Distribution and both, and exhibited in Table 1.

Sector within Power Industry

No. of Companies Selected

No. of Years Covered

No. of Observations

Generation 2 5 10Distribution 2 5 10Both 2 5 10

Total 6 5 30Table 1: Classification of companies according to the sectors engaged

The table no. 2 below indicates the descriptive statistics of the variables in the form of Minimum, Maximum, Mean and Standard Deviation value.


Variable N Minimum Maximum Mean Std. Deviation

Leverage Ration 30 0.3700 2.0300 0.8653 0.4926ROI 30 4.2900 22.2500 10.1110 4.1844SIZE 30 2464.8100 111080.4900 31918.1990 31681.5860CVA 30 0.2000 0.8600 0.4800 0.1738EBIT 30 149.0700 14198.6800 3453.1603 4245.4889Agency Cost 30 0.0030 0.1900 0.0774 0.0590

Table 2: Descriptive Statistics of Variables

The above Table shows that, the selected power companies are using 86.53% debt on the average in their capital structure as far as the market value of assets is concerned. Average return on investment of these companies is positive i.e. 10.11%. The average Agency cost of the companies is 7.74%.

To examine the multi-co linearity among the variables, a correlation matrix has been obtained and shown in Table 3 below.

Multiple Regressions was run in SPSS using the Least Square Estimation method to test the set of hypotheses or more clearly to test how the independent variables explain the capital structure. Before running the regression, investigation into the multi collinearity problem was carried out by using the Pearson Correlation method.

Variable Leverage Ratio ROI SIZE CVA EBIT Agency

Leverage Ratio 1.00 0.03 0.04 0.667** -0.07 -0.10ROI 0.03 1.00 0.33 0.35 0.471** 0.693**SIZE 0.04 0.33 1.00 -0.14 0.967** 0.605**CVA 0.667** 0.35 -0.14 1.00 -0.20 0.02EBIT -0.07 0.471** 0.667** -0.20 1.00 0.688**Agency Cost -0.10 0.693** 0.605** 0.02 .688** 1.00

Table 3: Co linearity Matrix Using Pearson’s Correlation Method

**Correlation is significant at the 0.05 level (2-tailed)

First of all, bivariate (pair-wise) correlations among the independent variables were examined to find out the multi co-linearity problem. The existence of correlation of about


0.80 or larger indicates that there is problem of multi co-linearity (Lewis-Back 1993). An examination of correlation among the explanatory variables found that size and EBIT has multi co-linearity problem.

Test of HypothesisThe t statistics is used for examining the relation of independent variables on leverage ratio. The calculated t value is compared to the critical t value at the desired level of significance. The desired level of significance is 0.02; which indicates that 98% level of confidence has been sought for. If the calculated value of t exceeds the critical value then the null hypothesis is rejected.

Testing of Hypothesis H01 H01 : “There is no significant relationship between Firm Size (Size) and leverage

ratio of the firm.”

HA1 : “There is significant relationship between Firm Size (Size) and leverage ratio of the firm.”

ModelUnstandardized Coef-

ficientsStandardized Coefficients t Sig

BetaB Std. Error(Constant) 29741.654 12044.489 2.469 .020Firm Size 2515.268 12146.174 .039 .207 .837

Table 4: Testing of Hypothesis H01

Calculated T Value of the Firm Size Variable is 0.207; while the critical value is 2.462 at 0.02 significance level. Here the calculated value is less than the critical value; hence Null hypothesis is not rejected. It can be concluded that there is no significant relationship between Firm Size and leverage ratio of the firm. Thus, alternative hypothesis is not accepted.

The Beta co-efficient of the Firm Size variable is positive (+ 0.039) means that holding the influence of all other variables constant, on average, leverage ratio increase by 3.9 % as Firm Size increases by 1%.


It is apparent from the result that the Firm Size has statistically minor significant influence on leverage ratio of the Firm. The statistically significant positive relation is consistent with the theoretical relation as explained by trade off theory. The past empirical evidences also show the same results.

Testing of Hypothesis H02

H02: There is no significant relationship between EBIT and leverage ratio of the firm.

HN2: There is significant relationship between EBIT and leverage ratio of the firm.



BetaB Std. Error(Constant) 3998.528 1610.933 2.482 .019Firm Size -630.239 1624.533 -.073 -.388 .701


Calculated T Value of the EBIT Variable is -0.388; while the critical value is 2.462 at 0.02 significance level. The calculated value is less than the critical value; hence Null hypothesis is not rejected. It can be concluded that there is no significant relationship between EBIT and leverage ratio of the firm. Thus, alternative hypothesis is rejected.

The Beta co-efficient of the EBIT is negative (- 0.073) means that holding the influence of all other variables constant, on average, as EBIT increases by 1%, leverage ratio decreases by 7.3 %.

It is apparent from the result that the EBIT of the firm has no significant effect on the leverage. The statistically significant positive relation is consistent with the theoretical relation explained by trade off theory. The past empirical evidences shown the positive relationship between EBIT and Leverage, it means as EBIT increases, leverage increases. In the study undertaken, it has been concluded that such traditional conclusion is not applicable for power sector in Indian environment based on sample study.


H03: There is no significant relationship between Agency cost and leverage ratio of the firm.


HN3: There is significant relationship between Agency cost and leverage ratio of the firm.



BetaB Std. Error(Constant) 3998.528 1610.933 2.482 .019Firm Size -630.239 1624.533 -.073 -.388 .701


Calculated T Value of the Agency cost variable is -0.528; while the critical value is 2.462 at 0.02 significance level. The calculated value is less than the critical value; hence Null hypothesis is not rejected. It can be concluded that there is no significant relationship between Agency cost and leverage ratio of the firm. Thus, alternative hypothesis is rejected.

The Beta co-efficient of the Agency Cost is negative (- 0.099) means that holding the influence of all other variables constant, on average, leverage ratio decreases by 9.9 % as the agency cost increases by 1%.

It is apparent from the result that the Agency Cost has statistically significant influence on leverage ratio of the Firm. The statistically significant relationship is consistent with the theoretical relation explained by trade off theory. The past empirical evidences also show the same results.

According to agency theory, this type of shareholding conforms to the features of closely held companies. Monitoring cost borne by minority shareholders is significantly low and agency cost of equity is expected to be minimal.

Hence, the companies prefer debt financing to get tax shield benefit until marginal cost of debt exceeds marginal benefit of debt.


H04: There is no significant relationship between ROI and leverage ratio of the firm.

HN4: There is significant relationship between ROI and leverage ratio of the firm.




BetaB Std. Error(Constant) 9.860 1.591 6.197 .000

ROI .290 1.605 .034 .181 .858Table 7: Testing of Hypothesis H04

Calculated T Value of the ROI variable is 0.181; while the critical value is 2.462 at 0.02 significance level. The calculated value is less than the critical value; hence Null hypothesis is not rejected. It can be concluded that there is no significant relationship between ROI and leverage ratio of the firm.

The Beta co-efficient of the ROI is positive (+0.034) means that holding the influence of all other variables constant, on average, leverage ratio increase by 3.4 % as ROI increases by 1%.

The statistically positive relation is consistent with the theoretical relation explained by trade off theory. The past empirical evidences also show the same results.


H05 : There is no significant relationship between Collateral Value of the Assets (CVA) and leverage ratio of the firm.

HN5 : There is significant relationship between Collateral Value of the Assets (CVA) and leverage ratio of the firm.



BetaB Std. Error(Constant) .276 .049 5.609 .000

CVA .235 .050 .667 4.736 .000Table 8: Testing of Hypothesis H05


Calculated T Value of the Collateral value of the asset variable is 4.736; while the critical value is 2.462 at 0.02 significance level. The calculated value is more than the critical value, hence Null hypothesis is rejected. It can be concluded that there is significant relationship between CVA and leverage ratio of the firm as alternative hypothesis is accepted.

The Beta co efficient of the H04 is (0.667) which indicates that Collateral value of the Assets variable is positively related with the firm’s Leverage Ratio and moreover it is significant as well.

The finding about Collateral to the Assets variable of the study is in consistent with the prediction made by trade off theory.

Findings and Conclusions The important findings of the study in contrast to the traditional perception are:

A) Size does not matter in firms’ capital structure decisions. Indeed, in line with the trade off theory and control considerations, leverage tends to increase with size. The present study supports the trade off theory, and indicates statistically minor significant influence of size on leverage ratio of the firm.

B) Impact of operating profit on the capital structure decision is not very strong. Nonetheless, the negative association between profitability and leverage is consistent with the pecking order notion that firms with sufficient internal funds tend to avoid external debt. Risk also tends to be negatively correlated with debt levels of firms and this is in line with trade off and agency considerations. The past empirical evidence has shown a positive relationship between EBIT and Leverage, it means as EBIT increases, leverage increases. In the study undertaken, it has been concluded that such traditional conclusion not applicable for power sector in Indian environment based on sample study.

C) It is apparent from the result that the Agency Cost has statistically significant influence on leverage ratio of the Firm.

D) It is apparent from the result that the leverage ratio of the firm has statistically significant influence on ROI of the Firm.

E) It can be concluded that there is significant relationship between CVA and leverage ratio of the firm as alternative hypothesis is accepted.


Limitations of the StudyThe present study is based on secondary data taken from published annual reports of selected cement companies, and also the data collected from the www.moneycontrol.com; therefore the quality of the study depends purely upon the accuracy, reliability and quality of the secondary data source. Approximation, and relative measures with respect to the data source might impact the results.

The study is based on 6 companies of the power Industry in India that are also drawn from the companies listed in BSE. Therefore, the accuracy of results is purely based on the data of sample units. If one takes sample units from other sources than it may be get different answer. The study is confined to five years data only therefore, a detailed analysis covering a lengthy period, which may give slightly different results has not been made.


Bibliography

1. Titman, S and Wessels, R (1988), ‘The determinants of capital structure choice’, The journal of Capital structure Choice, vol. 43 pp. 1-18.

2. www.bizresearchpapers.com

3. www.bseindia.com

4. www.businessjournalz.org/articlepdf

5. www.cefims.ac.uk/cgi-bin/research.cgi

6. www.entrepreneurswebsite.com/2010/05/26/power-industry-in-india/2

7. www.essarpower.com

8. www.ivythesis.typepad.com/term_paper_topics/2011/10/the-impact-of-capital-structure-on-bank-performance.html

9. www.nhpc.gov.in

10. www.ntpc.gov.in

11. www.managementparadise.com

12. www.moneycontrol.com

13. www.powergrid.com

14. www.tatapower.com

15. www.torrentpower.com


Max Weber and Kautilya: A Comparative Perspective on Bureaucracy

Sathya Narayanan SR* & Dr. KPV Ramanakumar**

AbstractThe bureaucratic efficiency determines the governance power of the Government. Therefore, bureaucratic models have always attracted the attention of historians, economists, sociologists and now management gurus In the field of management three important Bureaucratic models have been generally discussed. First, is by Max Weber, second by Parkinson and third, by Peter. Both Parkinson and Peter have negatively commented on the functioning of bureaucracy. They have been joined by many writers about the malfunctioning of bureaucracy. Kautiliya’s Arthshastra has also given the working model of bureaucracy. Purpose of this paper is to create awareness to the management readers of the existence of Kautilya’s Arthashastra and its management lessons as it provides intelligent interpretation and re- interpretation to apply effectively in the context of modern management.

Key Words: Kautilya, Arthashastra, bureaucracy, Leadership, Behaviour.

IntroductionManagement throughout the world and from centuries downward is run by bureaucracy. Bureaucratic efficiency determines the governance power of the Government. Therefore, bureaucratic models have always attracted the attention of historians, economists, sociologists and now management gurus. In the field of management three important Bureaucratic models have been generally discussed. First, is by Max Weber, second by Parkinson and third, by Peter. Both Parkinson and Peter have negatively commented on the functioning of bureaucracy. They have been joined by many writers about the malfunctioning of bureaucracy

Kautilya’s Arthashastra has also given the working model of bureaucracy. The model was given during the reign of Chandragupta Maurya about 322 B.C. A huge skeleton of bureaucratic structure was required by the Mauryan Empire to run the administration. The model was given by Kautilya, the Prime Minister of Chandragupta Maurya, in his famous classic the Arthshashtra which is the most comprehensive treatise on the subject. The model seems to have functioned efficiently. It was considered a standard of work on

*Research Scholar, SCSVMV University, Kanchipuram, Tamil Nadu, India.**Dean, Faculty of Management Studies, SCSVMV University, Kanchipuram, Tamil Nadu, India.


administration throughout the Hindu period and even long after as the historians acclaim the excellence of governance and rule of the Mauryan emperors namely, Chandragupta Maurya, Bindusar and Ashoka Maurya. “It was a part of well organized empire, at the head of which stood a great military genius and a far-sighted politician. The arms of Maury an empire were carried almost to the southern extremity of the Indian peninsula, and the Maurya banner waved across the vast stretch of land, from Herat in north west, to Madura in the South. India was a leading power in the world and maintained diplomatic relations with outside countries.

Max Wever (1864-1920) was a German Social Scientist and a philosopher. Though he wrote many books, Weber’s book on bureaucracy namely, “The Theory of Social and Economic Organisation” has been the most famous as far as the science of management is concerned. In it he has expounded his views on bureaucracy.

Though more than twenty-two centuries separate these two famous authors - Kautilya and Max Weber, yet there is a similarity in their views on the functioning of bureaucracy. The fundamental principles of the working of bureaucracy and its impact on governance are common in the work of both the authors. The main objective of the present study is to highlight the approaches of these authors and find out the lessons which present Governments can learn from these treaties. The study is divided into three sections. SectionsI deals with the introductory part setting the basis for a comparison between Kautilya and Max Weber Parts II and III explain the bureaucratic models of Max Weber and Kautilya, respectively. The points of comparison and contrast will be highlighted along with conclusion in section IV.

The Broad purpose of this paperResearch work, analyzing ancient texts such as Kautilya’s Arthashastra in the context of modern management practices, is indeed limited. This ancient text has many lessons for management, especially in leadership. Yet there are many managers and administrators in India and abroad who are not aware of Kautilya’s Arthashastra and its contribution towards organizational management. Consequently, one of the objectives of this paper is to introduce students and practitioners of management to the existence of Kautilya’s Arthashastra and its management lessons, opening up an avenue for intelligent interpretation, re- interpretation and application in the context of modern management.


MethodologyThis paper is based on a qualitative research methodology called hermeneutics. Hermeneutics is related to the name of the Greek god Hermes in his role as the interpreter of the messages of the Gods. In the current context, hermeneutics can be described as the interpretation and understanding of ancient literatures and religious texts. It is also used in contemporary philosophy to denote the study of theories and methods of the interpretation of all texts and systems of meaning. The concept of “text” is here extended beyond written documents to any number of objects open to interpretation, such as experiences and human behaviour. A hermeneutic is defined as a specific system or method for interpretation, or a specific theory of interpretation. The scope of hermeneutics also includes the investigation and interpretation not only of ancient texts, but of human behavior generally, including language and patterns of speech, social institutions, and ritual behaviors. Hermeneutics is widely applied in many fields of social sciences.

Kautilya wrote his Arthashastra in Sanskrit language. Sanskrit is one of the oldest languages in world and forms the foundation for many other languages. Arthashastra was written for the purpose of managing a kingdom or a country. From the entire body of work, only five of Kautilya’s sutras or aphorisms of management of kingdom are interpreted in the context of management of organizations in this paper. The sutra or aphorism system of teaching within any body of language is a unique system developed and used for many thousands of years. The sutra needs to be commented upon, and interpreted for correct understanding and use. For example in explaining the Arthashastra in the context of management, the term rajya (state) is interpreted to the organization.

Max Weber on BureaucracyMax Weber explains his theory of bureaucracy under the broad heading, “The Types of Authority and Imperative Co ordination”. Under this heading the major subjects discussed are: (i) The basis of legitimacy, (ii) Legal authority with a bureaucratic administration (iii) Traditional authority, (iv) Charismatic authority and (v) Collegiality and the separation of powers.

The Basis of Legitimacy Max Weber starts with the definition, conditions and types of imperative control. “Imperative coordination has been de fined as the probability that certain specific commands (or all commands) from a given source will be obeyed by a given group of persons. “The motives


of obedience vary for different reasons. Imperative co-ordination is required for control over the staff and imparts legitimacy to the rules and instructions issued by the authority. According to Weber there are three pure types of legitimate authority. They are based on the following ground Rational Grounds, Traditional Grounds, and finally Charismatic Grounds.

Legal Authority with a Bureaucratic AdministrationUnder this heading Weber explains the legal authority: with Pure type with Employment of a Bureaucratic Administrative staff. According to Weber, the effectiveness of legal authority rests on the acceptance of the validity of the following mutually inter-dependent ideas.

If persons stand in certain social relationships or carry out forms of social action.

That every body of law exists essentially in a consistent system of abstract rules which have normally been intentionally established.

The person in authority occupies an office.

He who obeys authority does so only in his capacity as a member of the corporate group and what he obeys is law.

The persons obey him not as an individual but to the impersonal order.

The fundamental categories of rational legal authority

• A continuous organization of official functions bound by rules.

• A specified sphere of competence.

• The organization of offices follows the principles of hierarchy.

• The rules which regulate the conduct of a n office may be technical rules or norms.

• In the rational type it is a matter of principle that the member s of the administrative staff should be completely separated from ownership of means of production or administration. .

• There is also a complete absence of appropriation of his official position by the incumbent.


• Administrative acts, decisions and rules are formulated and recorded in writing.

• Legal authority can be exercised in a wide variety of different forms.

Continuing his discussion on the legal authority of pure type, Max Webber states that the pure type of exercise of legal authority is that which employs a bureaucratic administrative staff. Only the supreme chief of the organisation occupies his post of authority by virtue of appropriation, of election or of having been designated for the succession. This type of organisation is in principle applicable with equal facility in many fields such as profit making business, charitable organisations, political and religious organisations.

• Traditional AuthorityThe traditional authority has been defined by Weber as, the personal authority of the individual which he enjoys by virtue of his traditional status. It is based on relations of personal loyalty, cultivated through common process of education. The subordinate staff owes loyalty to him traditionally based on customs and precedents. The staff consists of persons related to the Chief called patrimonial recruitment under which are recruited those who are favored, vassal slaves etc. These are called extra patrimonial recruitment. These two types of recruits and subordinate staff under the chief have many implications, both economic and social. For example, centralization of power and decentralization of the same have different repercussions on the authority and the system.

• Charismatic AuthorityThe term charisma is “applied to a certain quality of an individual personality by virtue of which he is set apart from ordinary men and treated as endowed with supernatural, super human or at least specifically exceptional powers or qualities. This characteristic makes him a hero and a leader for the subordinates to obey and follow him. But the charisma holds well so long as the personality keeps and applies his charismatic powers. Once it fades away and becomes routine it becomes a traditional type of authority. Once it is made a routine, it is difficult to hold on it unless new charismatic personality replaces it. But this becomes rare because every leader that follows the leadership of the organization does not have charismatic traits. In such a situation the traditions continue for a while and after some time rules and procedures set by charismatic leader start changing and new rules and procedure replace old ones.

The routine of charismatic leadership in traditional authority has great implications for economic power. If economic power continues with successive leadership, the authority


remains. Once economic power is weakened, the authority of the leadership also gets weekend in its legitimacy. Charisma is transformed in an anti-authoritarian direction. It slowly degenerates from nomination of legitimacy of authority shifts from charisma to election. In democratic set up the authority is vested in elected leader. In such a situation a collegial body is set up by the elected leader. In such a situation a collegial body is set up by the leader to help him. The members of this collegial body happen to be the experts of their field. It is up to the elected authority to accept, reject or amend the recommendations of collegial body. It may be used to impart legitimacy to the authority.

Kautilya on Bureaucracy Kautilya’s Arthshastra mentions a huge structure of bureaucracy to run the administration. The ministers, the chaplain, counselors, chief of army and many other high dignitaries were appointed after passing four tests 1) Dharmopada i.e. the test of piety and loyalty 2) Arthropods i.e the test for judging the greediness and sensuousness.3) Kamopada i.e the test for judging the sexual habit and 4) Bhayapada i.e the test for judging cowardliness. Elaborate arrangements were made to select the right type of person to posts of authority.

Gradation of salaries was practiced for different jobs. For example, the salary of sacrificial priest, the preceptor, the minister, the chaplain, the commander-in-chief, etc. each was specified and graded. The crown prince’s or the king’s mother - crowned queen was fixed at 48000 panas (one pana was approximately 3\4 of a tola of silver). The chief palace usherer, chief of palace guards, the director, and the administrator got twenty four thousand panas and so on.

On the whole the bureaucratic structure mentioned in the Arthshastra was a complex one. The main functionaries and their mode of appointments are stated in Appendix-1. Since, it is not possible to explain the case of each functionary it is given in the manner like this. If it is 1.2.3 it means it is Book I. chapter 2 and shloka 3 of the Arthshastra, In this manner the list is given Appendix-I.

Similarities between Kautilya and Max WeberIn spite of the fact that there is a difference of more than twenty-two centuries between these two philosophers, there are a number of similarities in their bureaucratic models. These similarities are due to the fact that the basic goals of societies, across all times and in all ages, remain the same i.e. the material well being and betterment of life and the bureaucratic instrument to achieve this goal has to be ideal.


Max Weber built up his bureaucratic model based on the social and economic conditions of his time. According to him every society has its objectives and the entire governance is tailored to achieve these objectives. Therefore, bureaucracy which is the main base of governance has to be ideally suited towards this end. Max Webber was not considering empirical aspects of bureaucracy, concentrating instead on how it ‘ought’ to operate. That is why he built up the model of ideal and rational bureaucracy. Most of the critics of his model explain that bureaucracy has been associated with red-tape, rigidity and corruption. Its malfunctioning has been highlighted. The critics could not put forward the alternative models of bureaucracy calling it is a necessary evil to run the administration. If bureaucracy has to stay then it needs improvement and the improvement suggested for an ideal bureaucratic model will be similar as proposed by Webber.

Like Max Webber, the model of bureaucracy outlined in Kautilya’s Arthashastra has been modeled to achieve goals and objectives of the society during his days. Being theoretical in character, it sets forth what, according to it, takes into consideration all aspects of state’s possible activity and describes its fairly in minute detail in a way that a state setting up its actual practice will aspire for a system of administration more or less similar to that recommended in the text.

According to Kautilya, “artha” is the sustenance or livelihood of men, in other words it means the earth inhabited by men. It is a science which is the means of the acquisition and protection of the earth. Kautilyal has developed his model with this objective of the society in mind. The kin and his functionaries should operate to achieve this goal efficiently and effectively”.

According to Max Weber, the obedience by subordinate staff mainly depends on legitimacy of the authority issuing commands. This terms as imperative control which has been defined as the probability that certain specific command or all commands from a given source will be obeyed by a given group of persons. In the monarchial system, according to the Arthashastra, the king is the ultimate source of law. “When all laws are perishing, the king here is the promulgator of laws. A matter in dispute has four feet - law, transaction, custom and royal edict. This system imparts legitimacy and ensures imperative coordination.

The validity of legitimacy according to Weber is based on rational grounds, traditional grounds and finally charismatic grounds. These grounds can be interpreted in the Kautilian system as well. The various heads of the department, revenue authorities in hierarchical


order etc., have the legal authority and legitimacy to issue commands. On traditional grounds or traditional authority, it has been mentioned in the Arthashastra, that these rules are based on numerous traditions and works of earlier authors who are the sources of Kautilya’s Arthashastra.

The charismatic authority in the Weberian system is based on exceptional sanctity, heroism or exemplary character of an individual person. The rules and commands given in the Arthashastra favour the “Shrotriyas” or the Bhramins learned in the Vedas. These persons were considered to have achieved heroic deeds and exemplary character by virtue of their learning and scholarship. In accordance with Weberian concept of legal authority with bureaucratic administrative staffs, Kautilya also agrees that the effectiveness of legal authority depends on a number of factors. The major factors are the status of the person in certain social relationship, working under certain written or unwritten rules, the obedience to higher authority is impersonal and only law and not the person is obeyed. According to Weber only the supreme chief of the organization occupies his position of authority. This also applies in the case of various authority mentioned in the Arthashastra.

Like Weber, Kautilya also holds that bureaucratic authority is carried out in its purest form where it is mostly dominated by the principle of appointment. In Arthashastra, the appointment of ministers, counselors, chaplain, persons in secret services etc., are directly appointed by the king and the seniority, salaries and authority lines are clearly defined. Again in the Weberian sense, the technical qualifications and salary are fixed. There is separation of the official position from the means of administration also. According to Kautilya the type of bureaucratic setup suggested is capable of attaining the highest degree of efficiency to achieve the goals of the society. While appointing administrative staff, their technical qualifications and administrative skills are strictly taken into consideration.

Using the Weberian the terminology both “patrimonial” and “extra patrimonial” recruitment is done. The Arthashastra has clearly mentioned that appointment of ministers, counselors’, chaplain, Commander-in- chief and other high officials generally are related to the king either by blood relationship or by heredity. Under extra patrimonial recruitment are included favorites, vassal slaves and other petty officials. This Administrative arrangement of recruitment is essential for the strengthening and sustenance of the system.


ConclusionBoth Weber and Kautilya purpose theoretical models for bureaucracy so that it functions efficiently and effectively. The basis of legitimacy, traditional authority and charisma are the same in both the models. Both of them have similarities despite the fact that there is a gap of twenty two centuries between them. The basic truth will remain the same irrespective of time and place because the objective of society always remains the same - the betterment of life. Consequently the bureaucratic instrument to achieve this objective has also to be an ideal one.

Bibliography

1. Luthans, Fred (1995) Organisational Behaviour, McGrawhill- Hill, New York, p.465.

2. Drucker, Peter (1954), The Parctice of Management, Harper, New York, p.133-134.

3. Blau, Peter M (1956) Bureaucracy in Modern Society, Random House, New York.

4. Bennis, Waran (1965) Beyond Bureaucracy, Trans-Action, July- August p9.33.

5. Majumudar, RC (1952), Ancient India, Motilal Banarsidas, p.105.

6. Kangle, RP (1965), The Kautilya Arthashastra Part III, Motilal Banarsidass, Delhi, P.213.

7. Sastri, K A Nilakanda (1952), Age of Nandas and Mauryas, Motilal Banarsidass, Delhi.

8. Deb, HK (1938), The Kautilya Arthashastra on forms of Government, IHQ, XIV, 99.366-379.


Analysis of Regional Bias in Primary Education in Gujarat: Dummy Variable Econometric Model

Dr. Kalpana Satija*, Dr. Mohan Patel**, Ms. Keya Patel***

AbstractSustainable development needs educated population. Gujarat is the role model for economic and social development but there is a lot regional bias that was found in the education sector. This paper attempts to apply econometric analysis to study whether some regions have lower growth in education sector. The present study analyses educational performance at regional level through dummy econometric variable model. The study reveals that most education indicators are performing well except SCR and PTR. Decreasing statistics in these indicators are evidence the state government needs to take affirmative action to eliminate the disparity between regions.

Key words: Regional disparities in primary education, Dummy Variable Econometric Model.

Introduction and Review of LiteratureThe focus of basic education must, therefore, be on actual learning acquisition and outcome, rather than exclusively upon enrolment.

-World Declaration on Education for All, 1990

Literacy and education are most valuable and reasonable for economic and human development of any country. The 2000 Education For All (EFA) assessment pointed out that significant growth has been achieved by improving the access to and quality of education. Today, the basic purpose of development is to enlarge people’s choices (GOK, 2005). The other objective of development is to create and enable an environment for people to enjoy long, healthy and creative lives (GOK, 2005). The Constitution (86th Amendment) Act, 2002, makes elementary Education a fundamental right for all children in the age group of 6 – 14 years. AT a conference of the World Education Forum held in Dakar, Senegal, in April 2004, representatives of 164 countries, including India, adopted the

*Associate Professor, Sardar Patel Institute of Economic and Social Research, Ahmedabad, Gujarat, India.**Principal, N. S. Patel Arts College, Anand, Gujarat, India.***Researcher, India.


Dakar Framework for Action on Education for All. Education has a positive relationship with economic development (Palanithurai, 2004; GOI, 1966). This study recommends that progressive expansion should be in early childhood care and education. After 86th Constitutional Amendment, education has become a fundamental right and accordingly, it is the responsibility of the community to exercise it. Improvement in education is not only related to the increase in average values, but also to the level of distribution. Because the role of education in social, political and economic development has been realized, attention has been drawn to the issues of equality of education in recent years (Costell and Domenech, 2002; Mesa, 2005; Qian and Smyth, 2005; Thomas et al., 2001). Anwar Shah, Qinghua Zhang and Heng-fu Zou, they explore the causes of the regional inequality of the educational investment measured by the enrolment rate at various school levels. They found that re-enrollment, governmental support and financial constraint play an important role in generating differences in educational investment across regions. Atal Bihari Das and Dukhabandhu Sahoo discussed in their paper regional disparities in education in Odisha with special reference to KBK and non-KBK districts, they conclude with demand side constraints of education in KBK districts. Hence, the findings in their paper suggest that in order to enhance enrolment in the KBK region parental motivation is very significant. In Gujarat earlier there was wide gap in regional steadiness in primary education, but after the launch of many schemes by the state government this inconsistency and disparity has decreased. State government has specially launched schemes for girl’s education like Kanya Kelavni and Vidyalaxmi Bonds which are really helpful in rural areas, giving a boost to primary education of girls. This paper studies the performance of primary educational indicators at regional level in the state of Gujarat. The results could give valuable insight for further policy initiatives by the Govt. in Gujarat.

Objectives1. To examine region-wise performance of key educational indicators.

2. Econometric analysis through Dummy Variable Econometric Model of educational performance.

3. To interpret econometric results in order to detect any regional bias in education sector of Gujarat.


MethodologyFor this study, data has been collected mainly by secondary official source. In analyzing data, a Dummy Variable Econometric model for Regional Bias in primary education in Gujarat is developed and applied .

Coverage of the studyThe study includes all districts 25 districts of Gujarat.

Data collectionThe data has been collected from DISE (District Information Service of Education) for the year 2005-06 and 2011-2012. Care was taken to ensure the authenticity of data. In analyzing the data, eight variables are taken into account, which are, GER, NER, Drop-out-Rate, SCR, PTR, GPI, Repetition Rate and Female Teacher Ratio. The methodology is Dummy Econometric Variable Model - Regional Bias Model.

Data analysis/interpretation Multivariate analysis is applied to the 8 variables regarding primary education performance in all the districts in Gujarat. This analysis will find out the r and p values of all defined variables and regional bias model will present t value of all the variables of the 25 districts.

For regional bias model The Study uses disparity analysis dummy variable econometric models as nominal scale was operating. The model explains the presence or non- presence of an attribute (Damodar & Sangeetha, 2007). To avoid the dummy variable trap, n-1 dummies were used since there are 25 regions in Gujarat. To identify the presence of regional bias the following model was used.

Where,

Ii = Literacy Rate

Ii = α + β1D1i + β2D2i + β3D3i + ui………………….. (1)

D1i = 1 if Ahmedabad region

= 0 otherwise

D2i = 2 if Surat region


= 0 otherwise

D3i = 3 if Kachchh region

= 0 otherwise

The two more models for enrollment and Employment dropout rate and all others which have followed the same methodology are;

Where

Ei = Enrollment Rate

Ei= α + β1D1i + β2D2i + β3D3i + ui…………………..(2)

Where,

Di = Dropout Rate

Di = α + β1D1i + β2D2i + β3D3i + ui…………………..(3)

Result and Discussion:

Result for 2005-2006 2010-2011Average GER in Gujarat 90.344 114.48t-test value 8.486Significant at 0.075

Table 1: Comparison of GER for the Period 2005-2006 & 2010-2011

***Significant at 5%

In Gujarat during 2005-2006 and 2010-2011 the GER has increased from 90.344 to 114.48%. It is revealed from the t-test analysis that the difference between two periods is significant at 5% level and t-value is 8.486. Hence, the GER in the state has increased by 24.136% in 5 years period, which is considerably good achievement.


Result for 2005-2006 2010-2011Average NER in Gujarat 83.972 86.44t-test value 69.049Significant at 0.009


***Significant at 5%

In Gujarat during 2005-2006 and 2010-2011, the NER were increased from 83.972 to 86.44. It is evident from the t-test analysis that the difference between two periods is significant at 5% level. Hence, the NER in the state were increased. Since the difference is significant, level it gives the room for thinking about the steadiness in increase and variance among the districts.

Result for 2005-2006 2010-2011Average DROP OUT RATE in Gujarat 4.812 4.348t-test value 19.831Significant at 0.032


***significant at 5%

In Gujarat during 2005-2006 and 2010-2011, the drop-out rate has decreased from 4.812% to 4.348%. From t-test analysis the difference between two periods is significant at 5 % level. Hence, the drop-out rate in the state has decreased by 0.464% in 5 years period, which is considerably middling achievement.

Result for 2005-2006 2010-2011Average SCR in Gujarat 32.24 25.72t-test value 8.89Significant at 0.071



In Gujarat during 2005-2006 and 2010-2011, the SCR has decreased from 32.24% to 25.72%. From t-test analysis the difference between two periods is significant at 5 % level, significant at 0.071. Hence, the SCR in the state has decreased by 6.52% in 5 years period, which is considerably appalling performance.


Result for 2005-2006 2010-2011Average PTR in Gujarat 29.04 24.52t-test value 11.85Significant at 0.054



In Gujarat during 2005-2006 and 2010-2011, the PTR were decreased from 29.04 to 24.52. It is evident from the t-test analysis that the difference between two periods is significant at 5% level. Hence, the PTR in the state were decreased. Since the difference is significant, level it gives the room for thinking about the better performance and variance among the districts.

Result for 2005-2006 2010-2011Average GPI in Gujarat 0.9 0.8712t-test value 61.5Significant at 0.01



In Gujarat during 2005-2006 and 2010-2011, the GPI were decreased from 0.9 to 0.8712. It is evident from the t-test analysis that the difference between two periods is significant at 5% level. Hence, the GPI in the state were decreased. Since the difference is significant, level it gives the room for thinking about the more efforts in better performing and variance among the districts.

Result for 2005-2006 2010-2011Average REPETITION RATE in Gujarat 11.212 9.524t-test value 12.284Significant at 0.052

Table 7: Comparison of GER for the Period 2005-2006 & 2010-2011***significant at 5%

In Gujarat during 2005-2006 and 2010-2011, the REPETITION RATE were decreased from 11.212 to 9.524 It is evident from the t-test analysis that the difference between two periods


is significant at 5% level. Hence, the REPETITION RATE in the state was decreased. Since the difference is significant, level it gives the room for thinking about the reliability and variance among the districts.

Result for 2005-2006 2010-2011Average FEMALE TEACHER in Gujarat 47.384 50.892t-test value 28.015Significant at 0.023

Table 8: Comparison of FEMALE TEACHER for the Period 2005-2006 & 2010-2011


In Gujarat during 2005-2006 and 2010-2011, the FEMALE TEACHER RATE were increased from 47.384 to 50.892. It is evident from the t-test analysis that the difference between two periods is significant at 5% level. Hence, the FEMALE TEACHER RATIO in the state were increased. Since the difference is significant, level it gives the room for thinking about the reliability and variance among the districts.

RESULT AND DISCUSSION

Regional Bias in GER

The dummy variable regression was run twice to identify the presence of regional bias for the district level data, for the year 2004-2005 and 2010-2011.

The results for the year 2010-2011 are:

GE= α + β1D1i + β2D2i + β3D3i + β4D4i + β5D5i + β6D6i + β7D7i + β8D8i + β9D9i + β10D10i + β11D11i + β12D12i + β13D13i + β14d14i + β15D15i + β16D16i + β17D17i + β18D18i + β19D19i + β20D20i + β21D21i + β22D22i + β23D23i + β24D24i + β25D25i + ui…

t: (97.105) + (24.287) + ( 165.462) + ( 395.750) + ( 75.786) + (125.100) + (93.971) + (353.000) + (103.500) + (48.911) + ( 53.000) + (64.235) + (86.440) + (50.907) + (66.000) + ( 124.905) + ( 155.750) + (149.857) + ( 19.000) + (149.875) + ( 13.105) + ( 189.154) + (0.000) + ( 54.412)+ ( 228.400).


Prob : (0.007) + (0.026) + ( 0.004) + ( 0.002) + (0.008) +(0.005) + (0.007) + (0.002) + (0.006) + ( 0.013) +(0.012) + (0.010) + (0.007) +(0.013) + (0.010) +(0.005) + (0.004) + (0.004) + (0.033) + (0.004) + (0.048) + (0.003) + (0) + (0.012) + (0.003)

R² = 0.972, R²adj. = 0.971

(2005-2006)

GE= α + β1D1i + β2D2i + β3D3i + β4D4i + β5D5i + β6D6i + β7D7i + β8D8i + β9D9i + β10D10i + β11D11i + β12D12i + β13D13i + β14d14i + β15D15i + β16D16i + β17D17i + β18D18i + β19D19i + β20D20i + β21D21i + β22D22i + β23D23i + β24D24i + β25D25i + ui…

t: 161.750 + 14.098 + 19.233 + 86.000 + 8.784 + 16.983 + 131.444 + 21.554+ 25.179+ 18.509

+ 28.818+ 40.958+ 26.086+ 24.452+ 186.000+ 25.256+ 899.000+ 19.843+ 1223.000+ 27.973+ 131.000+ 123.000+ 136.652+ 21.136+ 38.467

Prob: 0.004+ .045+ .033+ .007+ .072+ .037+ .005+ .030+ .025+ .034+ .022+ .016+ .024+ .026+ .003+ .025+ .001+ .032+ .001+ .023+ .005+ .005+ .005+ .030+ .017

R² = 0.914, R²adj. = 0.910

Both the models are reasonably good fitted with the adjusted R squared values of 0.971 and 0.910. The constant and coefficient values are acceptable at 5 % level, since probabilities are almost nearer to zero. The positive signs of the coefficients show the presence of regional bias. It is evident from the above results that the regional bias has a great impact on the educational development of Gujarat. During the period 2010-2011 to 2005-2006 the GER in all districts have increase.

Regional Bias in NERThe dummy variable regression was run twice to identify the presence of regional bias for the district level data, for the year 2004-2005 and 2010-2011.



NE= α + β1D1i + β2D2i + β3D3i + β4D4i + β5D5i + β6D6i + β7D7i + β8D8i + β9D9i + β10D10i + β11D11i + β12D12i + β13D13i + β14d14i + β15D15i + β16D16i + β17D17i + β18D18i + β19D19i + β20D20i + β21D21i + β22D22i + β23D23i + β24D24i + β25D25i + ui…

t : 59.000+ 34.061+ 35.667+ .000+ 146.167+ 665.667+ .000+ 1683.000+82.750+ 42.302+ .000+ 163.182+ 45.368+ 33.109+ 72.905+ 15.393+ 217.889+ 42.800+ 16.814+ 196.600+ 5.297+ 975.000+ .000+ 32.021+ 2.810

Prob: .011+ .019+ .018+ .000+ .004+ .001+ .000+ .000+ .008+ .015+ .000+ .004+ .014+ .019+ .009+ .041+ .003+ .015+ .038+ .003+ .119+ .001+ 0+ .020+ .218

R² = 0.484, R²adj. = 0.461

(2005-2006)

NE= α + β1D1i + β2D2i + β3D3i + β4D4i + β5D5i + β6D6i + β7D7i + β8D8i + β9D9i + β10D10i + β11D11i + β12D12i + β13D13i + β14d14i + β15D15i + β16D16i + β17D17i + β18D18i + β19D19i + β20D20i + β21D21i + β22D22i + β23D23i + β24D24i + β25D25i + ui…

t : 10.221+ 281.667+ 20.775+ 21.222+ 108.231+ 22.671+ 30.746+ 19.700+ 17.333+ 27.062+ 8.902+ 13.141+ 19.000+ 19.860+ 8.879+ 19.412+ 18.566+ 4.670+ 9.649+ 16.873+ 11.795+ 10.759+ 21.222+ 34.355+ 8.895

Prob : .062+ .002+ .031+ .030+ .006+ .028+ .021+ .032+ .037+ .024+ .071+ .048+ .033+ .032+ .071+ .033+ .034+ .134+ .066+ .038+ .054+ .059+ .030+ .019+ .071

R² = 0.810, R²adj. =0.802

Both the models are reasonably good fitted with the adjusted R squared values of 0.461 and 0.802. The constant and coefficient values are acceptable at 5 % level, since probabilities are almost nearer to zero. The positive signs of the coefficients show the presence of regional bias. It is evident from the above results that the regional bias has a great impact on the educational development of Gujarat. The co-efficient represents the level of difference compared with different districts. During the period 2010-2011 to 2005-2006 the NER in all districts have increased.


Regional Bias in DROP OUTThe dummy variable regression was run twice to identify the presence of regional bias for the district level data, for the year 2004-2005 and 2010-2011.


DO = α + β1D1i + β2D2i + β3D3i + β4D4i + β5D5i + β6D6i + β7D7i + β8D8i + β9D9i + β10D10i + β11D11i + β12D12i + β13D13i + β14d14i + β15D15i + β16D16i + β17D17i + β18D18i + β19D19i + β20D20i + β21D21i + β22D22i + β23D23i + β24D24i + β25D25i + ui…

t : 1.625+ 3.048+ 6.714+ 4.524+ 4.091+ 30.000+ 5.870+ 3.080+ 109.000+ 2.800+ 4.882+ 7.800+ 3.857+ 2.545+ 3.526+ 27.000+ 42.000+ 25.000+ 95.000+ .000+ 16.250+ 47.000+ 4.400+ 15.667+ 3.706

Prob : .351+ .202+ .094+ .138+ .153+ .021+ .107+ .200+ .006+ .218+ .129+ .081+ .161+ .238+ .176+ .024+ .015+ .025+ .007+ .000+ .039+ .014+ .142+ .041+ .168

R² = 0.362, R²adj. = 0.334

(2005-2006)

DO = α + β1D1i + β2D2i + β3D3i + β4D4i + β5D5i + β6D6i + β7D7i + β8D8i + β9D9i + β10D10i + β11D11i + β12D12i + β13D13i + β14d14i + β15D15i + β16D16i + β17D17i + β18D18i + β19D19i + β20D20i + β21D21i + β22D22i + β23D23i + β24D24i + β25D25i + ui…

t : 25.500+ 1.458+ 26.000+ 1.765+ 5.286+ 3.968+ 45.667+ 11.400+ 3.286+ 6.833+ 39.000+ 5.556+ 2.526+ 1.231+ 1.701+ 4.158+ 2.133+ 1.394+ 1.816+ 4.375+ 16.600+ 4.000+ 2.286+ 31.500+ 5.500

Prob : .025+ .383+ .024+ .328+ .119+ .157+ .014+ .056+ .188+ .093+ .016+ .113+ .240+ .434+ .338+ .150+ .279+ .396+ .320+ .143+ .038+ .156+ .263+ .020+ .114

R² =0.005, R²adj. = -0.038

Both the models do not fit well with the adjusted R squared values of 0.334 and -0.038. The constant in the first model and coefficients in both the models are not acceptable at 5 % level, since probabilities are not less than 0.10. The positive signs of the coefficients show


the presence of regional bias. Moreover, the Drop out have decreased during the period. Therefore, it can be said that since the government of Gujarat has given high priority to education and introduced varieties of educational programmes, the enrolments in the Gujarat region has increased considerably, & Drop out Decreased.

Regional Bias in SCRThe dummy variable regression was run twice to identify the presence of regional bias for the district level data, for the year 2004-2005 and 2010-2011.


SCR = α + β1D1i + β2D2i + β3D3i + β4D4i + β5D5i + β6D6i + β7D7i + β8D8i + β9D9i + β10D10i + β11D11i + β12D12i + β13D13i + β14d14i + β15D15i + β16D16i + β17D17i + β18D18i + β19D19i + β20D20i + β21D21i + β22D22i + β23D23i + β24D24i + β25D25i + ui…

t : 69.000+ 6.750+ 31.000+ .000+ 41.000+ .000+ .000+ 17.000+ 15.667+ 35.000+ 31.000+ 47.000+ .000+ 14.333+ .000+ .000+ 63.000+ 31.000+ 9.000+ .000+ 9.000+ 21.000+ 11.800+ 45.000+ .000

Prob : .009+ .094+ .021+ .000+ .016+ .000+ .000+ .037+ .041+ .018+ .021+ .014+ .000+ .044+ .000

+ .000+ .010+ .021+ .070+ .000+ .070+ .030+ .054 + .014+ .000

R² = 0.859, R²adj. = 0.853

(2005-2006)

t : 28.333+ 23.000+ .000+ .000+ 32.000+ 50.000+ 99.000+ 59.000+ 21.000+ 15.000+ 12.333+ .000+ 61.000+ 28.000+ 25.000+ 19.667+ 73.000+ 28.000+ 9.000+ .000+ 28.000+ 15.800+ 53.000+ 21.000+ .000

Prob : .022+ .028+ .000+ .000+ .020+ .013+ .006+ .011+ .030+ .042+ .052+ .000+ .010+ .023+ .025+ .032+ .009+ .023+ .070+ .000+ .023+ .040+ .012+ .030+ .000

R² = 0.889, R²adj. = 0.884Both the models are reasonably good fitted with the adjusted R squared values of 0.884 and 0.853. The constant and coefficient values are acceptable at 5 % level, since probabilities are almost nearer to zero. The positive signs of the coefficients show the presence of regional


bias, which are 0.889 and 0.859. It is evident from the above results that the regional bias has a great impact on the educational development of Gujarat. During the period 2010-2011 to 2005-2006 the SCR in all districts have increase.

Regional Bias in PTRThe dummy variable regression was run twice to identify the presence of regional bias for the district level data, for the year 2004-2005 and 2010-2011.


PTR = α + β1D1i + β2D2i + β3D3i + β4D4i + β5D5i + β6D6i + β7D7i + β8D8i + β9D9i + β10D10i + β11D11i + β12D12i + β13D13i + β14d14i + β15D15i + β16D16i + β17D17i + β18D18i + β19D19i + β20D20i + β21D21i + β22D22i + β23D23i + β24D24i + β25D25i + ui…

t : 5.154+ 9.400+ 12.200+ 28.000+ 43.000+ 33.000+ 17.000+ .000+ 21.000+ 33.000+ 26.000+ .000+ 55.000+ 20.000+ 41.000+ 23.000+ 57.000+ 16.000+ 43.000+ .000+ 15.667+ .000+ 19.000+ 11.000+ .000

Prob : .122+ .067+ .052+ .023+ .015+ .019+ .037+ .000+ .030+ .019+ .024+ .000+ .012+ .032+ .016+ .028+ .011+ .040+ .015+ 0.000+ .041+ .000+ .033+ .058+ .000

R² = 0.634, R²adj. =0.619

(2005-2006)

t : 77.000+ 17.000+ .000+ 12.000+ .000+ 39.000+ 27.667+ 29.000+ 7.250+ 19.000+ 7.600+ 26.000+ 59.000+ 14.500+ .000+ 51.000+ 20.333+ 15.500+ 10.500+ 51.000+ 28.000+ .000+ 27.000+ 13.500+ 65.000

Prob : .008+ .037+ .000+ .053+ .000+ .016+ .023+ .022+ .087+ .033+ .083+ .024+ .011+ .044+ .000+ .012+ .031+ .041+ .060+ .012+ .023+ .000+ .024+ .047+ .010

R² = 0.704, R²adj. =0.691

Both the models are reasonably good fitted with the adjusted R squared values of 0.691 and 0.634. The constant and coefficient values are acceptable at 5 % level, since probabilities


are almost nearer to zero. The positive signs of the coefficients show the presence of regional bias. It is evident from the above results that the regional bias has a great impact on the educational development of Gujarat. So the PTR is increased in compare to last years. During the period 2010-2011 to 2005-2006 the PTR in all districts have increase.

Regional Bias in GPIThe dummy variable regression was run twice to identify the presence of regional bias for the district level data, for the year 2004-2005 and 2010-2011.


GPI = α + β1D1i + β2D2i + β3D3i + β4D4i + β5D5i + β6D6i + β7D7i + β8D8i + β9D9i + β10D10i + β11D11i + β12D12i + β13D13i + β14d14i + β15D15i + β16D16i + β17D17i + β18D18i + β19D19i + β20D20i + β21D21i + β22D22i + β23D23i + β24D24i + β25D25i + ui…

t : .000+ 89.000+ 165.000+ 169.000+ .000+ .000+ 92.000+ .000+ 183.000+ .000+ 89.000+ .000+ 159.000+ 187.000+ 37.400+ 181.000+ 169.000+ 179.000+ 56.333+ .000+ 21.750+ 171.000+ .000+ 175.000+ .000

Prob : .000+ .007+ .004+ .004+ .000+ .000+ .007+ .000+ .003+ .000+ .007+ .000+ .004+ .003+ .017+ .004+ .004+ .004+ .011+ 0.000+ .029+ .004+ .000+ .004+ 0.000

R² = 0.818, R²adj. =0.81

(2005-2006)

t : .000+ .000+ 83.000+ 23.571+ 16.000+ 44.500+ 31.000+ 159.000+ 92.000+ 181.000+ 58.333+ 86.000+ 80.000+ 62.333+ 93.000+ 93.000+ 18.778+ 90.000+ 181.000+ 88.000+ 95.000+ 44.000+ 97.000+ 179.000+ 181.000

Prob : .000+ .000+ .008+ .027+ .040+ .014+ .021+ .004+ .007+ .004+ .011+ .007+ .008+ .010+ .007+ .007+ .034+ .007+ .004+ .007+ .007+ .014+ .007+ .004+ .004

R² = 0.738, R²adj. =0.727

Both the models are reasonably good fitted with the adjusted R squared values of 0.727 and 0.81. The constant and coefficient values are acceptable at 5 % level, since probabilities are almost nearer to zero. The positive signs of the coefficients show the presence of regional bias. It is evident from the above results that the regional bias has a great impact on the educational development of Gujarat. There women’s participation in education is increased.


Regional Bias in REPETITION RATEThe dummy variable regression was run twice to identify the presence of regional bias for the district level data, for the year 2004-2005 and 2010-2011.


RR= α + β1D1i + β2D2i + β3D3i + β4D4i + β5D5i + β6D6i + β7D7i + β8D8i + β9D9i + β10D10i + β11D11i + β12D12i + β13D13i + β14d14i + β15D15i + β16D16i + β17D17i + β18D18i + β19D19i + β20D20i + β21D21i + β22D22i + β23D23i + β24D24i + β25D25i + ui…

t : 2.765+ 3.727+ 2.404+ 10.923+ 4.364+ 4.548+ 5.326+ 2.206+ 3.400+ 4.000+ 5.605+ 3.714+ 4.617+ 2.231+ 6.750+ 6.375+ 5.833+ 2.217+ 3.222+ 5.000+ 5.667+ 4.822+ 11.759+ 2.364+ 5.160

Prob : .221+ .167+.251+ .058+ .143+ 0.138+ .118+ .271+ .182+ .156+ .112+ .167+ .136+ .268+ .094+ .099+ .108+ .270+ .192+ .126+ .111+ .130+ .054+ .255+ .122

R² = 0.533, R²adj. =0.512

(2005-2006)

t : 5.667+ 8.407+ 11.500+ 9.977+ 3.868+ 11.952+ 5.825+ 5.438+ 11.706+ 5.800+ 5.000+ 2.844+ 20.857+ 4.481+ 2.870+ 9.162+ 10.591+ 1.000+ 169.000+ 10.846+ 4.114+ 9.129+ 12.190+ 6.102+ 30.000

Prob : .111+ .075+ .055+ .064+ .161+ .053+ .108+ .116+ .054+ .109+ .126+ .215+ .030+ .140+ .213+ .069+ .060+ .500+ .004+ .059+ .152+ .069+ .052+ .103+ .021

R² = 0.035, R²adj. = -0.007

Both the models do not fit good with the adjusted R squared values of -0.007 and 0.512. The constant in the first model and coefficients in both the models are not acceptable at 5 % level, since probabilities are not less than 0.10, because some of the values are more than 0.10 like 0.111, 0.161,0.116 these all value shown that the probability is not accepted at 5% level. The positive signs of the coefficients show the presence of regional bias.


Regional Bias in FEMALE TEACHERThe dummy variable regression was run twice to identify the presence of regional bias for the district level data, for the year 2004-2005 and 2010-2011.


FT= α + β1D1i + β2D2i + β3D3i + β4D4i + β5D5i + β6D6i + β7D7i + β8D8i + β9D9i + β10D10i + β11D11i + β12D12i + β13D13i + β14d14i + β15D15i + β16D16i + β17D17i + β18D18i + β19D19i + β20D20i + β21D21i + β22D22i + β23D23i + β24D24i + β25D25i + ui…

t : 436.000+ 138.333+ 33.788+ 37.000+ 114.333+ 66.200+ 52.571+ 38.000+ 15.815+ 73.308+ 104.556+ 168.200+ 54.714+ 60.455+ 114.636+ 49.667+ 92.800+ 381.667+ 159.500+ 516.000+ 296.500+ 16.283+ 1.206+ 461.000+ 317.500

Prob : .001+ .005+ .019+ .017+ .006+ 0.01+ .012+ .017+ .040+ .009+ .006+ .004+ .012+ .011+ .006+ .013+ .007+ .002+ .004+ .001+ .002+ .039+ .441+ .001+ .002

R² = 0.975, R²adj. = -0.974

2005-2006

t : 234.143 + 22.725+ 84.667+ 226.000+ 23.053+ 19.571+ 258.333+ 103.923+ 16.811+ 127.750+ 18.762+ 51.000+ 49.727+ 35.800+ 40.200+ 77.667+ 56.333+ 41.273+ 377.667+ 335.000+ 89.500+ 56.600+ 56.167+ 15.582+ .000

Prob : .003+ .028+ .008+ .003+ .028+ .032+ .002+ .006+ .038+ .005+ .034+ .012+ .013+ .018+ .016+ .008+ .011+ .015+ .002+ .002+ .007+ .011+ .011+ .041+ 0.000

R² = 0.956, R²adj. = 0.954

Both the models do not fit good with the adjusted R squared values of 0.954 and-0.974 . The constant in the first model and coefficients in both the models are not acceptable at 5 % level, since probabilities are not less than 0.10. The positive signs of the coefficients 0.975 and 0.956 have shown the presence of regional bias. Number of Female teachers increased in compare to last years that shows the women participation in education and employment participation.


District name GER NER DROP

OUT SCR PTR GPI Repeti-tion Rate

Female Teacher

Better performing Dohad Dohad Navsari Dohad Ahmedabad

The Dangs Surat Ahmedabad

Lower performing Surat Ahmedabad Kheda Porbandar Porbandar Mahesana patan Banaskantha

Table 8: Comparison of FEMALE TEACHER for the Period 2005-2006 & 2010-2011

Conclusion Out of 25 districts of Gujarat, Dohad is found to be a better performing district, in the field of education. Compared to other districts, in Dohad GER, NER, SCR are highest. And Surat district has been found to be a lower performing district, with unsatisfactory values in GER and Dropout rate. Due to educational programmes introduced by the government, the enrolments in the other lower performing districts have increased but students do not complete their education fully because of high drop-out rate. It needs immediate attention on part of government to tackle the problem. The study strongly advocates for the programmes which can increase the literacy rate and reduce the drop-out rate simultaneously.

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education attainment in China, CEMA working paper.

2. Atal Bihari Das and Dukhabandhu Sahoo (2012), International Journal of Humanities and Social Sciences (IJHSS), Vol.1, Issue 1 p. no. 39-52.

3. Castello, A., & Domenech, R. (2002), Human capital inequality and economic growth: some new evidence. Economic Journal, 112, 187–200.

4. Damodar, N. Gujarati., & Sangeetha. (2007), Basic Econometrics, New Delhi: Tata McGraw-Hill Publishing, p. no. 304-313.

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7. Palanithurai, G. (2004), Rural Transformation and People’s Entitlements. New Delhi: Concept Publishing.

8. Qian X., & Smyth, R. (2005), Measuring regional inequality of education in China: widening coast inland gap or widening rural-urban gap? ABERU Discussion Paper, Monash University, Australia.

9. Thomas, V,. Wang, Y., & Fan, X. (2001), Measuring education inequality: Gini coefficients of education. Policy Research Working Paper 2525, Washington DC: The World Bank.


CRM in Beverage IndustrySapna Dadwal*

AbstractHighly competitive and dynamic business environment has forced organizations to aim to not only to attract, but also to retain their customers. Hence the need to build and maintain one to one, life long relationship with large number of customers has led the emergence of Customer Relationship Management (CRM). CRM is built on the philosophy of rela-tionship marketing that aims to create, retain, develop and enhance relationships with customers as well as to enhance the customer lifetime value and organization profitability. The goal is to improve the customer experience so that it enhances satisfaction and loyalty which in turn will lead to increased profits. Customer relationship management is a compa-nywide business strategy adopted by most modern organisations and it requires customer- centric business approach to support effective marketing, sales, service and process. The study analyses CRM initiatives in the Beverage Industry. The competitive environment for Beverage manufacturers is changing rapidly. The Beverage industry has emerged as a big component of the industrial sector in India and has been constantly adding to the revenue of our country. Implementation of CRM in Beverage sector enables the organizations to build and leverage their brand values by ensuring that all trade promotions, campaigns and sales activities are executed with the right brand messages.

Key Words: CRM, Beverage Industry, Relationship Marketing.

IntroductionGlobalization has changed the international business environment by erasing boundaries of countries. This rapid change in global environment puts high pressure on companies to adjust to new situations so as to compete in the international market. No company in this integrated world remains unaffected of what happens in the world economy (Brake, walker &Walker, 1995; Stanat,2002).

From the early 1980s the new alternative approach to marketing theory and practice was gaining power, namely relationship marketing. The shift from traditional marketing towards relationship marketing is occurring and several scholars are claiming this is a paradigm shift in marketing (Gronroos.1997; Parvatiar and Sheth,1994). The changes in the market have led the companies to switch to customer base structures so that they can face global competition. This key change in marketing paradigm has given way to Customer Relation Management.

*Assistant Professor, Gurgaon Institute of Technology & Management, Gurgaon, Haryana, India.


CRM stands for Customer Relationship Management. It is a process or methodology used to learn more about customers’ needs and behaviors in order to develop stronger relationships with them. There are many technological components to CRM, but thinking about CRM in only Software technological terms is a mistake. Actually CRM is a process that will help bring together varied pieces of information about customers, sales, marketing effectiveness, responsiveness and market trends. In a more precise way CRM is an information industry term for methodologies, software, and usually Internet capabilities that help an enterprise manage customer relationships in an organized way. For example, an organization with the creation of a database about its customers would be able to maintain relationships with its customers, would be able provide information to salespeople, service personnel, and perhaps the customer directly could access information, match customer needs with product plans and offerings, remind customers of service requirements, and know what related products a customer had purchased. So customer relationship management generally consists of:

• Helping an organization to identify and target their best customers, manage marketing campaigns and generate quality leads for the sales team.

• Assisting the organization to improve sales management.

• Formation of individualized relationships with customers, with the aim of improving customer satisfaction.

• Maximizing profits by identifying the most profitable customers and providing them the highest level of service.

• Identifying customer needs and effectively building relationships between the company, its customer, and distribution partners.

From the above it can be said that Customer relationship management (CRM) is a widely implemented strategy for managing a company’s interactions with customers, clients and sales prospects. It involves using technology to organize, automate, and synchronize business processes—principally sales activities, but also those for marketing, customer service, and technical support. The overall goals are to find, attract, and win new clients, nurture and retain those the company already has, entice former clients back into the fold, and reduce the costs of marketing and client service. CRM describes a company-wide business strategy including customer-interface departments as well as other departments. Measuring and valuing customer relationships is critical to implementing this strategy.


Beverage Industry in IndiaBeverage, may be called as a drink, is a liquid which is specifically prepared for human consumption. In addition to fulfilling a basic need, beverages form part of the culture of human society.

Beverages are of following form

• Fruit Juices

• Hot Beverages

• Soft drinks.

• Non –alcoholic beverages

• Alcoholic beverages

Over the past ten years, Consumer goods manufacturers and brand owners have been caught between value-conscious and price-sensitive consumers and powerful retailers.

The competitive environment for consumer goods manufacturers is changing rapidly. Now even more pressure is being placed on these companies through the continued spread of private labels, more discounted retailing, and a shift in market power toward the consumer. To meet these challenges, consumer goods companies are increasingly focusing energy and resources on their relationships with customers, consumers and retailers through customer relationship management (CRM). CRM is becoming an important part of consumer goods companies’ long-term strategies to maintain their competitive advantage, defend their market position, and secure brand values.

The beverage industry in India consists of high level of market segmentation, huge vari-ety of products, huge number of companies and many other characteristics. The beverage industry in India represents a diverse set of products, which are manufactured, distributed, imported, and marketed to consumers, retailers, catering services, and other manufactur-ers. The manufacture & export of beverages has been constantly increasing since past few years. Beverage industry has become a big factor and has been constantly adding to the revenue of our country.

Customer Relationship Management for the Food and Beverage industry links an organization’s product and trade marketing to its sales operations, and addresses the needs


of both strategic planning and sales execution. The CRM effectively helps the food and beverage industry in trade promotion management and sales execution, and will make the substantial difference.

CRM in food and Beverage sector enables them to secure and strengthen their brand values by ensuring that all trade promotions, campaigns and sales activities are executed with the right brand messages at all times. The solution empowers sales representatives by providing the tools required to manage their changed roles in relation to retailers and maximizes value-added selling time by a higher degree of automation and improved decision support.

Improved collaboration between account management, marketing and sales offers a significant reduction in non-value-added time, reduced lead times in the sales and marketing planning process, and a minimization of resource conflicts and prioritizations that are not in line with sales and brand strategies.

Literature ReviewRelationship marketing has been in vogue for more than two decades (Harker and Egan, 2006). Its advocates see it as an emerging paradigm that promises much in the way of customer satisfaction and loyalty (Sheth and Parvatiyar, 1995; Gummesson, 1999). Pepper and Rogers (1995) define CRM as comprising of three phases: acquiring, enhancing and retaining. Each phase supports and enhances the understanding between company and its customers.

The most basic point to relationship marketing is attracting and keeping customers in the long term. The aim is to convert buyer status from fleeting casual encounter, through marketing interventions, to committed relationships (Varey, 2002). Relationship marketing advocates that marketing can no longer only be about developing, selling and delivering products, but the emphasis is on having a relationship with customers rather than keeping them. It is more concerned with the development and maintenance of mutually satisfying relationships with customers (Buttle, 1996), and holds the promise of keeping customers loyal (Gummesson, 1994; Bulger, 1999). This pursuit is characterized by the quest to both fully understand and anticipate the customers’ needs, in a bid to develop long lasting and mutually et al. 1999). A two-way or dialogue marketing communications approach is needed to support the establishment, maintenance and enhancement of an interaction process, if relationship marketing is to be successful (Sheth and Parvatiyar, 2000).


According to Bose (2002, p.15) CRM is defined as “an enterprise wide integration of technologies and functions such as data warehouse, websites, intranet/extranet, telephone support system, accounting, sales, marketing and production”. According to Swift (2001, p.16) CRM is defined as “an enterprise approach for understanding and influencing customer behavior through meaningful communications in order to improve customer acquisition, customer retention, customer loyalty and customer profitability”. From the above it is clear that managing the customer plays a very important role in CRM. So CRM in general is operationally defined by authors as a management process of acquiring customers by understanding their requirements, retaining customers by fulfilling their requirements more than expectations and attracting new customers through customer specific strategic marketing approaches.

The emergence of database and online communications technology (Dwyer et al, 1987; Pine et al; Palmer, 1999) opened the possibility of creating personal relationships with mass market. In the words of Gronroos (1999) the data base technology provides the means to engage the customer who wants individual treatment.

Research MethodologyResearch is a systematic inquiry aimed at providing information to solve problems (cooper and Schindler, 2002:14). Different requirements of information, availability of time and need patterns have given way to the developments of various types of research methods however need of any research method remains the same –to get information. The reason behind the use of any method of research is to generation of optimum results. This study is based on primary data, which has been collected through questionnaire having statements to which respondents have to give their level of satisfaction ranging between 1-5 level and agreement ranging from strongly agrees to strongly disagree. Since it was not feasible to examine the entire universe the representative sample were selected from Delhi, Gurgaon and Noida. Respondents were asked to fill questionnaire personally. The study is confined to only three major multinational companies in the beverage industry.


Objectives of the StudyAs the title suggest the main objective of the present study is to know the role of CRM in beverage industry of India. Other some affiliated objectives along with the broad objective are:

1. To know the perception of customer towards the CRM strategy in beverage industry of India.

2. To assess factors of customer satisfaction.

Data Analysis To know the perception of customers towards organization’s CRM strategy they were asked to evaluate each factor first on statements ranging from not at all important to extremely important and then they have to evaluate their satisfaction level with each factor on 1-5 scale. The responses are analyzed by calculating the mean value and the results are presented in the subsequent discussion.

Gender Frequency Valid% Cumulative%Male 109 69.4% 69.4

Female 48 30.6% 100Total 157 100%

Table 1: Gender

Category Frequency Valid % Cumulative%<20 yrs 32 20.3 20.321-30yrs 43 27.5 47.831-40yrs 42 26.7 74.541-50yrs 27 17.5 92.4>50yrs 12 7.6 100Total 157 100

Table-2: Age


Category Frequency Valid% Cumulative%Student 54 34.4 34.4Self employed 46 29.3 63.7Professional 36 22.9 86.6Housewife 17 10.8 97.4Sr. Citizen 04 02.6 100Total 157

Table-3: Occupation

Category Frequency Valid% Cumulative%1-2 lakh 11 7 72-3 lakh 36 22.9 29.93-5 lakh 77 49 78.9>5 lakh 33 21.1 100Total 157 100

Table-4: Family Income (Per Annum)

Category Frequency Valid% Cumulative%Less than Graduate 38 24.2 24.2Graduate 74 47.1 71.3Post Graduate 36 22.9 94.2Doctorate 09 5.8 100Total 157 100

Table-5: Education

The Table 1, 2, 3, 4&5 gives the demographic the profile of the sample respondents. Among total of 157 respondents, 69.4% were male and 30.6% were female. Respondents whose age is less than 20 yrs were 20.3% ,27.5% were between 21 to 30,26.7% were between 31 to 40 ,17.5% were between 41 to50,7.6% are above 50 years. In the occupation, students are 34.4%, housewife 10.8%, self employed 29.3%, Professional 22.9% and Senior citizens are2.6%.Families with an annual income of 1-2 lakh are 7%, 2-3 lakh are 22.9%,3-5 lakh are 49% and more than 5 lakh are 21.1%. 24.2% respondents are less than graduate, 47.1% are graduate, and 22.9% are post graduate and5.8% is doctorate.


Factors Mean (Satisfaction Level) Order processing speed 3.2Degree of ease in getting Product 3.8Pricing of the products 3.9Packaging 3.5Quality of products 4.7Personal attention 1.7Customer Touch Points 3.1Complaint Management 2.8Quality of communication from company 3.5Festival Schemes 3.5Promotional Schemes 2.5Credit schemes in case of bulk Purchase 3.1Reliability 4.2Company’s advertising 3.9No of Customer touch points 4.1Friendliness and politeness of employees 2.3Accuracy of information 4.1Product Variety 3.2Value For money 2.7After sale help/Suggestions 2.4

Table-6: Showing different variables of CRM

The Table-6 shows the variables of CRM in Beverage sector and the mean % of consumer satisfaction level. Variables such as Company’s advertising, Customer touch points, Accuracy of information about products and Individual attention (for each segment) have high scores whereas variables such as Complaint management, Promotional schemes like sales discounts, friendliness of employees, Value for money and After sale help/suggestions have low scores. Quality of products is the factor that most impacts customer satisfaction while personal attention is the least.


Items Overall perception of Customer Customers are valuable 2.9Organization understands needs of customer 3.9Organization treats customers as important part of organization

2.8

Organization wants to retain customers 3.1Organization wants to enhance relationship 3.4Organization wants to improve elements of service 3.2

Table-7: Showing perception of Customers

The Table-7 shows the overall perceptions of customers on the scale of 1-5.It shows that majority of respondents feel that the organization understands their needs and wants to enhance the relationship with them. The perception is that the organizations, to retain their customer, do make changes in the products and service as per the requirements of the customer. But a certain percentage of customers do feel that they are not valuable for the organization and they are not considered to be an important part of the organization.

Findings On the basis of the information collected in the questionnaire and analysis made there of the following are findings are noted by researcher:

• The study reveals that the mean percentage of customer satisfaction level is maximum in the variables like degree of ease in getting product, pricing of the product, quality of product, Reliability, Company’s advertising, accuracy of information& number of customer touch points .The mean percentage of customer satisfaction level minimum in variables like personal attention to customers, promotional schemes after sale suggestion/help, complaint management, friendliness and politeness of employees after sale help. There are some variables like order processing speed, packaging, quality of communication, promotional schemes; degree of ease in getting product, product variety and festivals schemes has an average consumer satisfaction level.

• The study reveals that overall perception of customer is above average toward CRM strategies except in strategies such as Customers are valuable and Organization treats its customers as an important part of the organization.


ConclusionThe organizations in Beverage sector need to improve upon factors such as individual attention, after sales help/suggestions and complaint management. There are also some variables which are having average consumer satisfaction level and effectiveness of these can be enhanced by giving more focus on them. CRM strategy can help organizations improve their brand and to create satisfied customers. Hence the CRM strategy should be well designed and implemented.


Bibliography

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11. Vary,R (2002) Relationship Marketing, dialogue and Networks in the E-Commerce era, John Wiley&Sons ,England.


Reengineering the transport of Motor Cycle through Indian Railways to Address Service Quality Challenges

Nagapavan Chintalapati*

AbstractIndian Railways is one of the options for the passengers to transport themselves and their belongings. In this case study we look into the operations of the parcel and luggage service of the Indian Railways and understand the different aspects of parcel service. We studied the problem of Over carry of the booked items and the service recovery process that followed. The case study examined an anecdotal evidence of a customer who has booked a motorcycle for transport from the city of Lucknow, Uttar Pradesh to Muri, Jharkhand. The final destination for the vehicle was Ranchi, Jharkhand which does not have a direct rail connection from Lucknow.

The case provided information regarding the technological alternatives that may be considered to address the service quality problem. The case also provided information on the technical solution presently in the pilot state of Parcel Management Systems and PLUTO. An overview on the parcel business of Indian Railways and the challenges in improving the parcel business as a revenue generator is also provided. We will also examine as part of the case analysis evaluation of solutions that are possible to address this problem of Over carry and service recovery in Indian Railways. The solutions analyzed by the class will be based on the conceptual understanding of the concepts of business process reengineering and the role of technology in evaluation and solution design and decide on whether process reengineering needs to be carried out or the existing system and processes of Indian Railways need not be modified. The case is a narration of a particular incident and would help the students to examine individual cases of service failure and evaluate the possible decision alternative.

The case is a narrative model of the service problem of Over carry in the parcel service of Indian Railways in the transport of a motorcycle. The case study described the efforts of the customer in tracking the vehicle which could not be delivered on his arrival in Muri due to a technical The efforts of Indian Railways employees in sending the vehicle back to Muri in order to ensure delivery to the customer will form the backdrop to the efforts of the customer in tracking the vehicle location and the help provided by the government employees is also described.

Key Words: Indian Railways, Service Quality, Service Recovery, Parcel Service.

*Assistant Professor, Centre for Business Administration, Central University of Jharkhand , Ranchi, Jharkhand, India.


“Parcel services will be managed as a separate business and run from dedicated terminals with separate parcel trains rather than from station platforms. On major routes, this service will be run as efficiently and professionally as air cargo services. The revenue from parcel services would be targeted for at least a fivefold increase in ten years from the present level of around Rs. 1600 crore per annum”.

Mamta Banerjee, Then Minister of Railways

Dr. Rajesh Singh, a resident of Lucknow, Uttar Pradesh had been offered a central government job in an academic institution recently established in Ranchi, Jharkhand. The institution of Dr. Rajesh has offered him accommodation in the premises of the institution, which was more than 25 km from the main city of Ranchi. The office was in a village with minimum facilities and has facilities only for small grocery shop and has no restaurants and entertainment facilities. The nearest hotel and restaurant was 10 km from the office and the only mode of transport available was a share auto. Dr. Rajesh has found this very suffocating compared to the life style he was used to in Lucknow, where he could socialize and meet people more regularly. He therefore had decided to bring his two wheeler (a Bajaj Pulsar motorcycle) from Lucknow. This was the reason for Dr. Rajesh to search for transport service for moving his bike from Lucknow to Ranchi. When Dr. Rajesh had enquired in the trade of transporters, he found that the road transport of the motor cycle was very costly and the service between Lucknow and Ranchi was not very frequent. He was suggested to use the services of Indian Railways to transport the motorcycle.

Dr. Rajesh enquired about the service in the Lucknow station and was directed to the Parcel section towards the end of the platform. The various stages and safeguards for transporting a motorcycle are provided in Exhibit I. Dr. Rajesh had reviewed the various options for travel from Lucknow to Ranchi. The Indian Railways had no direct train between Lucknow and Ranchi. The alternative trains for travel between Lucknow and Ranchi requires Dr. Rajesh to change stations either in Uttar Pradesh or in Jharkhand. The details of alternatives considered by Dr. Rajesh are provided in the Table 1.

1. Address to Indian Parliament introducing the Indian Railways Vision 2020 document in 2009.

2. Share Auto is a service where the seven seat autos ply from one location to another. The commuters have the option of travelling in the auto by paying a fixed price which is very less than reserve auto, which is a specific booking by the commuter for their purpose. The shared autos have no fixed timings like city buses, but move based on the demand for commute in terms of passengers. They are also unsafe as overloading is a common occurrence. The city does not have a public transport system in the route that Dr. Rajesh normally has to travel.


3. The Indian Railways has a rationalization policy for transit of parcels booked on PWB. The destination station should have a stop of duration longer than 5 min for the parcel service to be provided to that station through Express /Mail trains. The rationalization policy is not applicable in case of the Luggage Ticket (LT). This was expected to address the problem of over carriage of parcels.

4. The Train preferred by Dr. Rajesh for transport of motor cycle is shown and highlighted in dark grey cell. Dr. Rajesh wanted to take possession of motor cycle in Muri and drive from there to Ranchi.

The transport of bike through Indian Railways offered two alternatives to him. The first alternative was booking the motorcycle from Lucknow to Ranchi on a Parcel Way Bill (PWB) and hope the vehicle will be shifted at the station enroute without any damage to the vehicle due to unsupervised porters. He had analyzed and found that travelling along with the bike and supervising the shifting was not possible since many of the trains reach the station enroute either too early in the morning or too late in the evening. The major difference between the two alternatives is the rationalization policy1 of the Indian Railways in addition to the costs involved.

The second alternative was to book the vehicle against travel ticket and load the vehicle at Lucknow under personal supervision and unload the vehicle at the destination station under personal supervision. He may travel to Kanpur, a distance of around 90 km and travel from there to Ranchi or he may decide to travel to Muri in Jharkhand and then travel with his motor cycle to Ranchi a distance of around 65 kilometers. He had dropped the idea of booking the bike from Kanpur since the city was not known to him and working with the booking agents in a new station with no local support was not a palatable idea to Dr. Rajesh.

Origin Station Train Number Enroute station Train Number Destination Wait Time

Lucknow 15707 Kanpur Central 12440 Ranchi 75 min







Lucknow 12372 Mughalsarai Jn. 12818 Ranchi 55 min

Lucknow 12358 Dhanbad 13351 Hatia 205 min

Lucknow 128764 Muri 15028 Hatia 52 min

Lucknow 12876 Gaya 18623 Hatia 30 min

Table 1: Various alternative trains considered by Dr. Rajesh

Source: www.90di.com


Since, there are no direct trains, Dr. Rajesh, decided that he will book the vehicle against his travel ticket as Luggage Ticket (LT) from Lucknow to Muri in Neelanchal Express (12876) and then drive from Muri to Ranchi by Road. However, the ticket clerk at the Lucknow station has booked the motorcycle on the Parcel Way Bill (PWB) mode. The rationalization policy was not known to Dr. Rajesh and he did not understand the difference between the two modes.

Dr. Rajesh boarded the train on August 12, 2012 at Lucknow station. The motor cycle properly packed as per the guidelines and requirements of Indian Railways had been booked in the parcel section from Lucknow to Muri. The booking clerk in the Lucknow station assured Dr. Rajesh that the bike can be booked to Muri and the time was considered sufficient for unloading the bike at the destination. Dr. Rajesh went to the station early and had personally supervised the loading of the vehicle and then went to the seat in the reserved compartment. He reached Muri in the early morning of August 13, 2012.

Dr. Rajesh goes to the guard of the train to ask about the unloading of the vehicle. The guard tells him that the parcel van in which his motor cycle was loaded had been sealed up to Kharagpur and he cannot do anything. Dr. Rajesh goes to the parcel office in Muri station and speaks to the person in-charge of the place. The parcel office manager Mr. Vijay promised that he will speak to Kharagpur parcel office and ensure that the motor cycle will be off loaded in that station. Mr. Vijay calls the Kharagpur parcel office and informs them of the over carry and request that the vehicle may be offloaded at Kharagpur and then sent to Muri by the passenger the next day. Mr. Vijay assured Dr. Rajesh that he will call him about the bike the moment he receives the same in his station.

Dr. Rajesh leaves Muri and travels to Ranchi to join his duty and await the call of Mr. Vijay in one or two days. After a period of two days Dr. Rajesh tries to contact Mr. Vijay on the mobile phone provided by Mr. Vijay and trace the vehicle. Mr. Vijay then informs him that the vehicle has still not reached Muri and he was still waiting for the same to arrive in his station, so that Dr. Rajesh may be informed. Dr. Rajesh is now a worried man.


Service Recovery Process

Day 1: August 15, 2012

Dr. Rajesh then goes to the Ranchi station on August 15, 2012 accompanied by his colleague Dr. Praveen Mishra to find out where the vehicle might have gone. He visited the Ranchi parcel office to enquire on the way to track the consignment. He is informed that there is no online system like the passenger reservation system (PNR No.), though a system for Parcel Management is under test in the New Delhi – Howrah route in select stations. (See Exhibit II). Dr. Rajesh was told to call the Muri Parcel office on the RailTel network5

phone available at the parcel office. He was informed that the vehicle has not reached Muri and was advised to verify whether the vehicle had been offloaded at Kharagpur station.

The manager in-charge of Ranchi Parcel office informed Dr. Rajesh that he does not have the time to help him and suggests that he travel to Muri station to find out of the status of the vehicle, as the over carriage of the consignment and subsequent recovery was the responsibility of staff of the Muri Parcel Office. Dr. Rajesh visits the station manager of Ranchi station to find out if he may be able to help in some manner. The station managers calls the Kharagpur station and after a long wait of more than one hour and two calls later finds out that the vehicle was not off loaded at the Kharagpur station.

The station manager then informs Dr. Rajesh that he has to call the different stations to track the vehicle status, and lets him know that the best place to use the RailTel network was the telephone network office in Ranchi station. Dr. Rajesh and Dr. Mishra visited the Telephone network office to contact the Puri station parcel office. Dr. Mishra requests the help from the in-charge of the office Mr. Kishore Panda. Mr. Panda calls the central office to find out the contact no. of the Puri station, which happens to be the last station for the Neelanchal Express. The clerk in the Puri parcel office requested time to check the details of the consignment in his records and wanted at least 2 hours time.

Dr. Rajesh and Dr. Mishra had to wait for two hours in the Ranchi station. They take leave from Mr. Panda thanking him for the help provided and letting him know that they will return after two hours time to call the Puri parcel office again. Both the colleagues while waiting for the time to elapse discussed the reasons for this kind of a service problem from

5. RailTel is the internal telephone network of the Indian Railways, which is the backbone of its communication Network. All com-munications between railway stations are handled through the RailTel Network only and the internal office do not necessarily have external telephone lines for out side customers to call and seek service for their various requirements.


occurring. Dr. Mishra referred to the board in the Ranchi Parcel office giving statistics of revenue earned through parcel service, which also had details of the lost parcel or over carried parcels. Dr. Rajesh is emphatic in the opinion that if the entire process is computerized similar to the Passenger Reservation System (PRS) then the human errors will be reduced. Dr. Rajesh felt that the problem in his case is primarily because of the error committed in the Lucknow Parcel office either with the clerk giving a wrong receipt or the inspector sealing the parcel van wrongly. Dr. Mishra suggested that the Indian Railways is better off using technology like the barcode or Radio Frequency Identification Device (RFID) to ensure that the parcels are offloaded without any problem. This computerized system coupled with technology solutions like the RFID, GPS, wagon layout design, containerization, etc (see Exhibit III) would definitely be a boon to help the Indian Railway parcel office staff to carry out their responsibilities much faster.

After a wait of more than 2 hours and 3 phone calls, Dr. Rajesh received confirmation about vehicle being offloaded at the Puri station. When he enquires regarding the process of getting the bike delivered, he was informed by the Puri Parcel Office that the vehicle will be sent to Muri station, which was the destination to which it had been booked.

Having lost patience Dr. Rajesh wanted to complain to the Divisional Railway Manager (DRM) of the Ranchi division, under whose jurisdiction the Muri station falls. Conveniently he found out that the DRM was in the Ranchi station for monitoring an accident site. Since, the August 15 was a holiday for the office and the DRM was on a more immediate responsibility he decided to visit the DRM office in Hatia station which is about 8 km from Ranchi station in the same city the next day.

Day 2 – August 16, 2012Dr. Rajesh visited Hatia station in the afternoon and was advised to visit the DRM office for further assistance. The office has no information regarding the vehicle of Dr. Rajesh and he was directed to the commercial manager of the Hatia Division. Dr. Rajesh during the visit to the DRM office has read about the vision of the Indian Railways (see Exhibit IV) with promise to provide the best service to the customers in all areas.

Dr. Rajesh met the commercial manager and sought help in tracking the consignment. The commercial manager advised Dr. Rajesh to register a complaint with the Non Receipt Cell (NRC) of Indian Railways, which was located in New Delhi. The commercial manager also apologized to Dr. Rajesh for the inconvenience caused and assured him that the


consignment will be delivered safely to the customer though it may take some time. The commercial manager also promised help in case Dr. Rajesh is willing to go the extra mile to track his vehicle and ensure that he gets the delivery at the earliest. During the discussion with the commercial Dr. Rajesh was also provide some inputs regarding the parcel business of Indian Railways and the plan for improving the business (see Exhibit V).

The NRC cell has registered the complaint and promised to help within 24 hours. The NRC cell was contactable from the public telephone network and the complaint (See Exhibit VII) can be registered and tracked online. This cell became the main contact point for Dr. Rajesh in tracking his bike consignment which is in transit in some station in India.

Day 3 – August 17, 2012Dr. Rajesh contacted NRC the next day and was informed that the consignment has left Puri in Utkal Express to be offloaded at Kharagpur station but was not unloaded at Kharagpur and would be carried to Haridwar, which was the last station for Utkal Express. Dr. Rajesh was informed by the NRC that the status of consignment may be verified next day from Haridwar Parcel Office. Dr. Rajesh had to visit the RailTel office in Ranchi to contact Haridwar Parcel Office and track the vehicle consignment. The number for Haridwar Parcel Office was available on the RailTel website. The NRC was only answering queries and has not shown any initiative in addressing the problem of the bike being delivered to the customer at the appropriate time and place. There is no pro-activeness on the part of the NRC to resolve the customer service problem. Dr. Rajesh has found that the problem of lost parcels is not small and NRC is responsible to centrally monitor and reduce loss arising out of the failure to complete the service (See Exhibit VI).

Dr. Rajesh was also able to observe that the zonal and divisional structure (see Exhibit VIII) of the Indian Railways with focus on the geographical boundaries has not placed enough emphasis on the commercial viability of the parcel operations, though the Railway board has renewed attempts to lease the parcel space to private operators who would carry out the tasks related to the customers and use the railway network as a transport mechanism for the parcel operations.

Day 4 – August 18, 2012The Haridwar Parcel office on contact has informed that the vehicle consignment was received and will be loaded in Haridwar – Howrah Super Fast Express to Howrah. The train was expected to reach Howrah station in 35 hours. Dr. Rajesh was getting frustrated


that the bike was travelling across different states unattended and he was worried about the status of his bike getting loaded and unloaded by the railway staff in different stations. The help from Indian Railways was available but no effort was visible in getting the problem addressed proactively. The physical strain of travelling from his office to the Ranchi city coupled with the financial expenditure was becoming taxing to Dr. Rajesh. Dr. Rajesh has decided to travel to Howrah in the Shatabdi Express and before boarding train to Howrah contacts Haridwar Parcel office for confirmation that the vehicle consignment was loaded as expected to Howrah. Based on the confirmation from Haridwar Parcel Office Dr. Rajesh has decided to travel to Howrah station and ensure that he will be able to take the situation in his control. Dr. Rajesh reached Howrah station on Sunday August 19, 2012.

Day 5 – August 19, 2012 Dr. Rajesh visited the parcel office in Howrah station immediately on reaching Howrah and enquired about the status of the bike consignment and was informed that they do not have any advance intimation and only can confirm regarding the bike status after the train from Haridwar comes to station.

Dr. Rajesh waited in the dormitory in Howrah station and passed his time reading magazines and calling friends. The train from Haridwar arrived late. The parcel office in Howrah has confirmed the receipt of the vehicle consignment, but has refused to give delivery to Dr. Rajesh in Howrah as the vehicle was supposed to be delivered in Muri station only. They claimed that it was against rules to give delivery in any station other than the intended destination of the consignment.

Dr. Rajesh clarified from the Howrah parcel office as to how the vehicle will be sent to Muri station. He was told that the vehicle will be loaded in Howrah – Hatia express and delivered at Muri. He will be able to take delivery in Muri parcel office only. Dr. Rajesh decided to wait in Howrah and travel along with the vehicle consignment in the same train.

Day 6 – August 20, 2012 Dr. Rajesh who was travelling in the same train has gone to the Muri Parcel office to take delivery of the vehicle consignment which should have been delivered to him more than 10 days back. The vehicle fortunately was in a good condition and there was no damage to the vehicle. Dr. Rajesh buys petrol and drives his Bajaj Pulsar from Muri station to Ranchi. The service recovery was completed successfully, but at a great cost of time and money to the customer.


Exhibit I

Process of transporting a motorcycle through Parcel Service of Indian Railways6

The usual procedure for booking and loading the bike in a train is summarized below. The bike can be booked in the Indian Railways in two modes – parcel and luggage.

1) As parcel: Book between 3 to 7days in advance, no ticket required. (It depends on the availability of space in the train connecting the two stations. It is a useful option if there is a direct train between two locations. No advised in case the bike has to be loaded to another train enroute.

2) As luggage along with ticket: if you traveling in same train, you can take your motorcycle with you. Bit costly and quicker compare to first one. (Comes along with you in same train)

Parcel booking is transport of a bike in the train without an accompanying passenger travelling to the destination in the same train. As Parcel without ticket, you need to book during parcel office timings that is between 9AM to 5PM. The delivery is also available only during the Parcel office working hours. They charge less compared to Parcel along with ticket. But it might take anytime between 3-7 days.

Along with ticket is 2nd option, where you need to do parcel booking option 2-3 hours in advance to your train’s actual departure time. Show the ticket and book the bike. Luggage booking is loading a bike in the break-van (the rolling stock used for goods) based on a ticket of a passenger travelling by the same train. Rates differ, but the main difference is parcel office remain open 24 hrs. for delivery. They send the bike along with you (Parcel wagon) in same train. You need to make sure whether the bike is loaded in parcel wagon and placed in good position. It’s not compulsory but to be on safe side, you need to pay Rs. 30-50/- to porter and make sure it is loaded. If you go one hour early to departure you can check yourself.

There are usually three coaches for loading on the train, Direct Coach or Seal Coach is the best option for a passenger travelling the entire distance of the train, as this coach is sealed at the station from where the train departs and is opened only at the last destination. This

6 This exhibit is prepared by the author based on the experience of booking the motorcycle through the Parcel Office and the safeguards suggested by the booking agents used.


coach is not opened unlike other coaches which are opened at major stations on the way for reloading. Reloading is done very fast at these stations since the train stoppage is for a very limited duration. The limited duration has to be used for unloading the parcels booked and also loading the parcel for the next leg of the journey from the station. But Seal Coach has one drawback, sometimes it is opened the next day, the sealed coach is taken to the yard and opened the next day.

The bike has to be packed in a proper manner and the loading agents are available to provide this service to the ordinary commuter who has limited capabilities in this matter. The agent will help in filling the form, pack and load the bike. The agents charge fee for their services, which includes the money to be paid to the Porters for loading the bike. The form has an option for declaring the value of the bike for insurance purposes and in case the bike is damaged extensively in the transport for any reason, this is the amount that the customer will recover from the Indian Railways. It is normally at 1% of the value of the bike and has to be paid along with the cost of transporting the bike, which is a charge based on the distance to be covered.

Going a day before and booking the bike is a must to avoid last minute running around, especially if you have a morning train. Your bike will be safe at the Railway’s parcel office for one day. Take original and Xerox copy of the bike registration and railway ticket for booking the bike. Remove all the petrol from the bike before packing. For packing, you can go to the dealer of the bike and ask for packing material used for transporting the new bikes form the factory to the dealer location. These covers are for petrol tank and side boxes only.

On reaching the final destination, after the bike is unloaded, take the inspector’s signature on the receipt who will be supervising the particular coach. With that receipt and ticket go to the parcel office, they will authenticate the receipt and send you to Octroi department, who will ask you to pay Octroi charges as your bike is from a different state. Octroi department will sign on the receipt only after getting convinced that you are touring the state, or simply tell them you are on an all India Tour. They will pass your bike immediately. After the Octroi department’s signature, again go to the platform where your bike is, show the receipt signed by Octroi department to the inspector. Then you can drag your bike to the parcel office; remember you are not allowed to remove the packing until you leave the railway premises. At the parcel dispatch office, on


showing the receipt and the railway ticket, they will give you the delivery receipt. After that with that receipt drag your bike outside the station, where one copy of the receipt has to be given to the police officer at the gate, than finally you can remove the packing from the bike. You can also load the bike in the train if you are not traveling by the same train. The bike can be collected from the parcel office once you reach there. Or someone can collect it for you if they have the railway receipt and railway ticket with them. Make sure you are present when the bike is loaded in the Coach; there have been instances where bikes have been loaded into wrong trains. Make sure that there is enough of time load and unload the bike; there have been instances where the bikes have not been loaded and unloaded on enroute stations.

Safeguards

Remove the rear view mirrors before packing and carry spare brake and clutch lever with yoke when you go to collect your bike, sometimes brake/clutch levers and yoke break during the journey, thanks to the loading procedure of railway employees.


Exhibit II

Parcel Management System7

IntroductionParcel Management System (PMS) is a computerized system for handling all different tasks related to parcel and luggage booking in the Indian Railways. The pilot project was for ten stations between Delhi and Howrah with a sanctioned budget of 2 Crore rupees. PMS commenced operations in New Delhi Parcel Office on 1st November 2006. It has been successfully implemented at Delhi, Kanpur, Allahabad, Gaya, Patna, Danapur, Mughalsarai, Sealdah and Howrah.

Feature of PMSPMS will perform the various tasks with regard to parcel and luggage traffic and has the following features:

• Direct capture of parcel weight electronically

• Universal windows for all destinations for booking

• Single window for weighment and cash payment possible

• Advance unloading guidance about inward parcel from the system at destination

• Tracking parcel with help of barcode technology and SMS

• Advance unloading guidance about inward parcel from the system at destination

• Parcel Website www.parcel.indianrail.gov.in

Benefits of PMS

Customer• Track latest status of the parcel through internet and SMS

• Reduction in time required for weighment and booking

7 This exhibit is prepared by the author as summary of PMS based on the following documents: http://www.parcel.indianrail.gov.in/pms/PMS.pps Last Accessed on 30.05.2013 and http://www.indianrailways.gov.in/railwayboard/uploads/directorate/cis/downloads/ParcelManagementSystem.pdf Last Accessed on 30.05.2013


Staff• Automatic freight calculation based on latest rules

• Reduction in human errors.

Railways• Loading generally according to priority thereby curtailing malpractices and

complaints

• Beneficial to Accounts for internal check

• Reduction in Claims

• Potential for revenue generation based on improvement in service.

Parcel and Luggage Tracking Online (PLUTO)A screen shot of the PLUTO system is provided below. It has facility for customers to check the status of their consignment online.


The barcode reading of the data through scanner will read as provided in Figure give below

Handheld mobile devices with barcode scanner facility will be used for transmitting the PMS Data to the PMS server at CRIS New Delhi in Real-time fashion, through GPRS network. The various modules of PMS are Tracking of Parcel online (PLUTO), FSLA (Freight Service & Ledger Account), Lease, Training, Bug Reporting, and Data Warehouse

Implementation Strategy for Roll – Out Indian Railways has allocated Rs. 115.32 crores for rollout of PMS system in two phases. The first phase will cover four railway corridors, 76 stations and 11 zones. The second phase will cover 6 corridors, 144 stations and 5 zones.


Exhibit III

Alternative systems to ensure confirmed delivery

Device based on GPS The device will store the product details like code, delivery station and will have signaling light and will have the following features:

• The light will turn Amber the previous station. The guard will have the details available along with the station staff.

• The light will turn GREEN the moment the destination station arrives. This will help the porters to identify the packages to be offloaded in their station without manually tracking the code numbers.

• The guard will have a summary statement of the number of consignments to be offloaded and verify against the blinking lights on the platform.

• The guard will have the details of the number of items to be offloaded in the next station and the type of items, the same information is available with the parcel office and the required porters will be coordinated to ensure that the items are off loaded in the duration the train stops.

• The parcel office will seal the parcel van based on the next delivery point, a railway station to where a parcel is booked. The same information will be confirmed by the guard unit to ensure that the customers are not inconvenienced.

Barcode Technology The Indian Railways will have a barcode printer which will print the information on to the sticker that is affixed to the consignment. The barcode scanner available at the parcel office will scan the sticker and based on the destination information will unload the parcel at the appropriate station. The bar code scanner data will be uploaded on the main server to enable tracking of the parcel en-route to the destination. A similar technology is being implemented with the pilot project of the Parcel Management System discussed in Exhibit II.


Device based on RFID Technology8 RFID tags are intelligent bar codes that can talk to a networked system. RFID tags will communicate with an electronic reader that will detect every item in the wagon and track each up almost instantly. The reader will be connected to a large network that will send information on the consignments to the central server and to customer online. This technology will help the real-time tracking of the consignment across stations and will help the customer to take delivery and plan for delivery.

Modification to the parcel van internal architectureSegmentation of the parcel van in such a way that the loading of parcels are segmented to the different stations are loaded into separate compartments and sealed separately. The issue may deal with the challenge of load utilization, since some compartments may not have complete load. However, the cost of the internal modification had to compared against other technological solutions for a better choice by Indian Railways.

Use of Parcel Containers Design of Parcel containers to hold the smaller units of parcels for easy transfer between stations may be also considered for better revenue from the Parcel services by Indian Railways. The parcels are loaded into the container and the container is loaded at the booking station AND off loaded at the destination station. The single delivery stations will have their items loaded into a corner for immediate offloading. So, effectively every station will have only one or two items (individual or containers) to be offloaded. This may actually help the time for loading and offloading to be reduced. Another advantage of this model is the capability to transfer containers from one zone to another zone similar to the sorting system used by Courier and Postal companies.

8 Excerpts based on http://www.howstuffworks.com/gadgets/high-tech-gadgets/rfid.htm Accessed on May 30, 2013


Exhibit IV9

Vision Statement of Indian RailwaysIndian Railways shall provide efficient, affordable, customer-focused and environmentally sustainable integrated transportation solutions. It shall be a vehicle of inclusive growth, connecting regions, communities, ports and centers of industry, commerce, tourism and pilgrimage across the country. The reach and access of its services will be continuously expanded and improved by its integrated team of committed, empowered and satisfied employees and by use of cutting-edge technology.

Passenger Services Vision By 2020, Railway’s passenger services would be transformed from a supply- constrained business to a state of availability on demand. Quality of services in terms of punctuality, safety, security, sanitation, cleanliness and amenities at stations and onboard, catering and other value- added services (pre-boarding and post -disembarkation) would be upgraded to match the best in the world. Access to railway services will also be improved by using existing and innovative networks of distribution channels like internet, mobile telephones and other vending mechanism. Enquiry services would be transformed by using online data from train operations and emerging technologies of internet and mobile telephones. Speed of trains would be raised to 160-200 kmph on segregated passenger routes and work on a few selected corridors of high speed trains travelling at 250kmph to 300 kmph would be initiated. Special attention will be paid to meet the requirements of lady passengers, students and youth.

9 Excerpted from the Indian Railways Vision 2020 document


Exhibit V10

Parcel Business Parcel traffic, mostly carried along with the passenger services is presently estimated to account for barely 2% of the total non-bulk traffic of the country. Recently a number of initiatives have been taken to realize the enormous potential of the parcel business. These include leasing out of parcel vans and a policy shift away from piecemeal traffic in parcel vans in passenger-carrying trains toward movement in rakes of parcel trains between dedicated parcel terminals. Further, stress has been laid on attracting new traffic like automobiles and agri-produce in addition to conventional high-rated parcel traffic like white goods, processed food, FMCG, electronic goods, textiles, perishables. As a result of these measures, there has been a perceptible growth in tonnage and earnings from parcel business during the last five years:

Year Tonnage (In million tonnes) Earnings (Rs. in crores)2004-05 4.19 532 2005-06 4.63 637 2006-07 4.94 900 2007-08 5.54 1008 2008-09 5.92 1081

A lot more, however, remains to be done to realize the full potential of the business. A market-oriented strategy, with focus on total logistics support, value-added services, rational cost-and-value-based tariff, state-of-the art IT applications for providing real-time online access to information on movement of consignments and adequate and appropriate rolling stock and public private participation in terminal operation and road bridging are needed. Dedicated parcel terminals with mechanized handling facilities , specifically targeted at agri-produce, automobiles, other industrial products and general parcels and a focused organization that would concentrate on marketing, sales and transport of parcel services within an agreed transit time through timetabled trains and parcel specials would be needed. Experimentally, for a few identified corridors, licensing of parcel operators to bring in rolling stock and handle marketing includes first-mile and last-mile activities could be tried. This will be particularly relevant for clusters serving SMEs and agri-produce hubs. Provided that the above measures are taken, the business can be projected to grow at a fast pace. Anticipated growth in parcel business for the three horizon years of 2011-12 and 2019-20 is shown below:

10 Excerpted from the Indian Railways Vision 2020 document


Year. (Rs in crore) Revenue

2011-2012 1644.002019-2020 8000.00

Projections of parcel business

Challenges for Parcel BusinessIn parcel business, the main challenges are enhancement of carrying capacity (rolling stock and dedicated terminal infrastructure) and re-positioning the business as a separate service rather than a piggy-back service of the passenger business as now. Unexplored or under-exploited opportunities in the white-goods and agri-produce sectors could be realized through investment in storage and handling facilities at loading and unloading ends and development of allied infrastructure for connectivity to road and other modes, in partnership with aggregators and logistics players in the field. This would call for a separate organization.


Exhibit VI11 Cases of loss of parcels and goods in trainsIndian Railways receives complaints on lost parcel and goods carried by Goods trains/Parcel trains on account of loss and theft, pilferage, breakage, damage, delay in transit and other causes including trains involved in accidents. The year-wise break-up of complaints received are as under:

Year No. of cases registered2007-08 301882008-09 27270

2009-10 (April to June) 6638

There is a defined and uniform procedure, as per relevant provisions of Indian Railways Act, 1989, for dealing (Filing and settlement) of all goods and parcel claims cases (also involving goods train accidents)

11 Response of the Railway minister in the Loksabha. Accessed from http://pib.nic.in/newsite/AdvSearch. accessed on May 30, 2013.


Exhibit VIINon Delivery of Goods Complaint Form

Source: http://www.claims.indianrail.gov.in/claims/claims.webreg?webclmno=


Exhibit VIIIOrganization Structure of the Indian Railways

Source: http://www.indianrailways.gov.in/railwayboard/view_section.jsp?lang=0&id=0,1,304,305

77UDAAN: Th e International Journal of Management Research

Book Review Where Have All the Senior Women Gone?: 9 Critical Job Assignments for Women LeadersInes WichertReviewer: Firdaus Khan MR*

Publisher: Palgrave Macmillan

ISBN: 978-0230301290

Year of Publication: 2011

Where Are All The Senior Women?” is a book that addresses the pertinent issue of under-representation of women at senior management level. The climb to the higher echelons of the corporate ladder is arduous and grueling for both men and women alike. This destination requires sharp decision-making skills, exposure to P&L accountability, mental toughness and preferably a cross-functional exposure built over a period of time. Women do not lack these skills but end up defi cient in comparison to men when it comes to convincing the interview panel for a seat on the Board. The core problem is two-fold: Learning on the job & building a strong CV for top positions. Working backwards (from what a Leader is to what gets her there) the book maps out the alternative career routes women can consider embarking upon, if they aspire to lead corporations. The book relates 3 key issues: Critical job assignments, personal development challenges associated with these and the career development opportunities that they offer. The book relies on two primary sources of information – interviews of 53 senior women managers of Financial Times – London Stock Exchange FTSE 100 companies and the expertise of Leadership and Talent Management consultants across the globe. Existing academic research forms the secondary source of information. The book sets a clear landscape of 9 roles that women could don in order to fast track their career and ultimately bag the coveted seat on a company’s Board.

The Glass Ceiling is a phenomenon that has gained attention in both the western world as well as in Asian economies, including India. Though the 1990s saw the corporate world open up to women holding senior positions, there is not much bite to this bark. A recent report by the British Equal Opportunity Commission highlights that only 124 out of 1,119 FTSE 100 directorships are held by women and only 16 FTSE 100 companies have female executive directors. Women of Infl uence magazine recently stated that in the list of Fortune 500 CEOs, only 20 are women. It also states that women earn $0.77 for every dollar earned *Associate Professor (Finance), ICBM – School of Business Excellence, Hyderabad, AP, India.


by men. Overlooking the dismal statistics, one issue has become very apparent - having women in senior positions is no longer an issue about equality or fairness. It has become a business imperative given that half of the workforce is female and companies with women directors perform better on parameters such as return on equity, return on sales and return on invested capital (Joy, Carter et al, 2007). Corporate research also shows that men’s and women’s lives diverge dramatically – both at work and outside it. (Mason & Mason, 2004) In short, it is a ‘gendered experience of work’ and women lose out on genuine opportunities due to the lack of a compelling CV reflecting diverse job experiences and skill sets. This forms the backdrop against which the author Ines Wichert maps an alternative view of the glass ceiling and offers realistic solutions. The key question is: Are women being restricted from taking on senior positions or are their career choices effectively eliminating them from the top game?

Women miss out on Board positions due to cultural and structural impediments such as a skewed perception of Leadership qualities being male-oriented, getting labeled as ‘over-aggressive’ if a woman is overtly assertive, sabbaticals that most women invariably take to raise children and a tendency to take on functional rather than line roles. The book offers a holistic model of career planning that can ensure motivated women are in the right place at the right time. The book is divided into 3 parts. The first part contains three chapters that cite academic research and industry reports to assess the various phases in a woman’s career graph and the importance of timing critical job assignments. The book builds a compelling case for women to take ownership of their career trajectory and advocates the use of ‘Critical Job Assignments Model’ as a template for career progression. In the second part of the book the author, Dr. Wichert expertly propounds “The Critical Job Assignments Model”, clearly laying out 9 alternative career defining assignments that women should consider if they aspire to break the glass ceiling some day. She also lists out career benefits of each job assignment and concludes with a list of actionable tasks to get started. The final part of the book summarizes the main insights and learning outcomes associated with each of the 9 varied critical job assignments recommended by the author.

The Early Stretch Assignment: Starting Off on the Fast TrackThe first strategy for women is to get out of their comfort zone. The author recommends ‘The Early Stretch Assignment’ which is also called the ‘Sink or Swim Assignment.’ Young women professionals should take on a challenging assignment early in their career, diving headlong into unfamiliar territory while learning about self as well the organization.


Such opportunities are especially available in smaller, under-resourced organizations or departments performing under pressure in a market characterized by high demand. Sheryl Sandberg’s career is a case in point. After one year at McKinsey, Sandberg joined the US Treasury Dept. and got noticed for her work on waiving of debt in developing countries during the Asian financial crisis. This experience catapulted her to VP Global Online Sales & Operations at Google followed by post of COO at Face Book & finally, first female member on the co.’s Board. Women adopting this strategy will face a tough challenge trying to build credibility in a male-dominated environment. But the rewards will be worth the toil – gaining self-confidence, shaping a senior management perspective and developing emotional intelligence. An early stretch assignment puts a woman on the fast track, allowing her to skip a few rungs of the corporate ladder and gaining the mentorship of top management.

International Assignments & Global Roles: Working Abroad The corporate world unanimously accepts that an international assignment is the test that separates the wheat from the chaff. The book recommends an international exposure in a woman’s CV. This could be either as being responsible for the sales & revenue of one or more overseas regions or getting posted abroad to run local operations or to set up new business overseas. Such international assignments hone out-of-the box thinking, cultural sensitivity, independent thinking, diversity management skills and resilience. The author warns that both married and unmarried women have to fight stereotypes and actual family issues when committing to such assignments. The perks of these two assignments are keen business acumen and a professional as well as personal support system that women can tap into throughout their career lifespan. As examples of these strategies 2 Indian women who come to mind are Capgemini’s India CEO Aruna Jayanthi and Neelam Dhawan MD, HP India. The former’s role as global delivery officer for outsourcing catapulted her to the top job. The latter’s varied stints at HCL, IBM & MS in the areas of corporate partnerships & strategic alliances have led her to her current role & responsibilities.

Operational Experience: The Day To Day Running of a Business and P&L Accountability Operational excellence is the cornerstone of all modern successful businesses and a key rung on the corporate ladder leading to the coveted ceiling. The author makes a special appeal to women to break away from the functional expert’s role and opt for the seat-of –the –pants decision making that heading an operation entails. In the absence of any such


opportunity, the author advises women to consider quitting the current profile in order to work in a different environment that shapes them as business managers, not mere functional specialists. Credibility and Visibility will be the twin outcome of these assignments. Devita Saraf is a shining example of this strategy. The young professional walked away from her inheritance of the Rs. 300 cr. co. Zenith Computers in order to establish her own technology firm Vu Technologies.

People Management Responsibility: Building A High Performance TeamSuccessfully leading and developing teams is a strategic strength for any CXO aspirant. Delivering results by harnessing the energies of the team they lead is a very viable option for the upwardly mobile career woman. Any assignment that gives her an opportunity to shape her unique leadership brand should be grabbed by both hands. Under this key deliverable, a woman has two options - would she hone her crisis management skills and cool demeanor to become the ‘Turnaround Pro’ or would she rather capitalize on her people skills to emerge as the ‘Change Agent’ during reengineering, mergers or downsizing ? It’s a call she needs to take. Marissa Mayer is a case in point. During her Google years Marissa established herself as a people-person and not just the first female engineer at the co. Working with teams across numerous assignments such as Google Images, Google Maps, Google Books, iGoogle, Gmail & many more Marissa proved her people management credentials. This earned her the coveted CEO post at Yahoo. She is currently in action building a high performance team to turnaround Yahoo, bringing it back to its tech roots by trimming away the excess ‘media co.’ offshoots it has sprouted over the years. The challenges of these people management assignments are the intuitive sorting out of people problems, keeping people engaged and assuming authority without fear or inhibitions. The first two issues women take on as a duck takes to water. It’s the third that they drag their feet for. The book carries a wonderful quote “Start as if you mean to go on…If you are leading the meeting, go into the meeting leading.”

Working In A Different Environment: New Roles, New Functions & New IndustriesWomen professionals should challenge the status quo, every few years, seeking new roles, responsibilities, and new ways of doing things or a different work environment. A well-rounded leader who exercises flexibility and hits the ground running is a much sought resource in today’s volatile business environment. Many brave women have consciously etched rewarding careers spanning numerous industries and geographic regions making them ideal candidates to head international conglomerates. Indra Nooyi is one such


successful woman who took on varied responsibilities such as Sales, Finance, Business Process Optimization, IT & Strategy to name only a few. She kept building her CV, moving from one corporation to another as and when an opportunity arose. Nooyi has had major stints at J&J, ABB, Boston Consulting Group and Motorola, before finally settling in at PepsiCo.

Creating Something New: The Corporate IntrapreneurEntrepreneurial spirit is not only appreciated in all economies but more so within modern organizations. Today’s businesses need to constantly innovate to stay relevant. Innovative insights that lead to cost reduction, quality improvements or creating new markets are important for organizational renewal. This is not an easy job though as it requires dealing with resistance, bureaucracy and infrastructural constraints. The greatest outcome for a woman is the opportunity to create a legacy. Meg Whitman is one such leader who has taken ebay to another level and is currently leading the organizational renewal at HP.

Joining The Executive Committee: Making It To The TopThe final strategy for a female professional is to join the Executive Committee in a leadership role - finding her own voice and firmly standing her ground. Chanda Kocchar of ICICI is one such role model who has climbed the corporate ladder by the dint of her talent and professionalism. She is known to work best under pressure, delivering results consistently and building trust among the bank’s stakeholders.

The book concludes by reiterating that women do not have a level playing field as cultural and structural impediments decelerate their ascent to senior positions. The author lists 5 Cs that women can do in order to help themselves: Career Planning, Critical job assignments, Courage, Curiosity and Connectedness. The book wraps up with an appeal to women to become ‘career intelligent.’

The book ‘Where Have All the Senior Women Gone?’ can become a valuable part of a woman’s professional planning or it could provide a fair paradigm to corporate mentors and members of the Board of Directors looking forward to groom women professionals for top jobs. The book essentially has a very positive focus. The emphasis is on women bridging the gap rather than playing the blame-game of the glass ceiling effect.

82UDAAN: Th e International Journal of Management Research

Book ReviewReverse Innovation: Create Far from Home, Win EverywhereVijay Govindarajan and Chris TrimbleReviewer: Shiv Shankar Tripathi*

Publisher: Harvard Business Review

ISBN: 978-1-4221-5764-0

Year of Publication: 2012

Reverse Innovation is any innovation that is fi rst developed and adopted in the poor countries, thereafter to gain advantage of this dev elopment, it may be marketed to the developed world and the companies can earn huge margins out of it. The entire book prescribes one thought that the future is away from home. It is probably true for those companies in the developed world who are mature and are looking for a potential market in any part of the world especially in the developing or poor countries. These companies look out for such a market, identify a specifi c local need, do innovations to make a product or service affordable to the local market and when successful, sell the same products with some cosmetic changes to the customers of the developed world and earn heavy margins. The book argues that there are widespread differences between the need of the consumers of the rich world and a consumer from the poor market. It is emphasized that due to these differences, a rich country company should leverage all its resources to understand the needs of developing or poor country consumers to come up with innovations that can fl ow in a reverse manner from poor countries to the rich countries that is why they are reverse innovations.

The book is divided into two parts. The fi rst part deals with the understanding of reverse innovation, providing a roadmap for following a reverse innovation strategy by shifting the key resources to the developing world markets. The second part contains eight in-depth case studies of companies following the strategy of reverse innovation showing how they are leveraging the advantages of reverse innovation to earn huge profi t margins.

In the fi rst part, the authors suggest that there exist fi ve gaps between the needs of rich countries and the poor countries viz. performance gap; infrastructure gap; sustainability

*Assistant Professor (Marketing), Calcutta Business School, Kolkata, WB, India.


gap; regulatory gap and preferences gap. In a nutshell, authors are of the view that there is a huge gap amongst the needs of the customers of the poor countries and those who belong to the rich countries. E.g. developing a 50% solution with 15% price will click in the poor or emerging market. For achieving such radical innovations, companies need to follow a clean-slate approach to innovation, as almost all the existing benchmarks or pre-conceived notions would be broken in this process.

The authors talk about changing the mindsets of the rich-world countries who think that the emerging or poor nations have insignificant markets. They propose a change in this mindset by shifting from glocalisation to completely new innovations specifically designed for the poor country consumers. In other words, by shifting from downgraded versions of products to completely new products for the poor nations as after achieving maturity, a company needs to understand the specific and completely different needs of the customers in the poor nations. They give examples of companies who have tried to offer the scaled-down or down-graded versions of their products thinking they will gain market share in the developing countries and have failed miserably.

Thereafter, the authors emphasize on building local growth teams (LGTs) in order to capitalize upon the opportunity that is present outside the home country. For this purpose companies should depute its resources to the fullest extent possible in the targeted emerging market in order to really come up with their own dominant logic that is specific to the emerging market. It does not matter whether a company is the first to enter in the market or a late entrant, what matters is how fast one can adapt to the changes in the emerging market to come up with reverse innovations.

In the second part, the book gives examples of eight companies in the form of case studies, depicting the role played by the reverse innovation strategy. E.g. it shows how Logitech, a known name in IT peripherals industry was taken aback by an upstart rival company named Rapoo in China when they ignored it. Though Logitech came out of its weak position by deploying a local growth team, it learned the lesson for any other market in the world. Similarly, the case study of P&G in Mexico with their Naturella brand of fem-care products also emphasizes on the need of a clean-slate approach to innovation, i.e. unlearning the past knowledge acquired from the rich world and start treating an emerging market consumers as completely different ones. The next case study is on EMC Corporation where it identified a new opportunity in managing digital information clutter in China through an alternative search engine called iMecho. Another example is of Harman Industries where changing the


mind-set was realized to be the main problem to the growth of the company when it tried to simplify the technological architecture of their infotainment systems in automobiles. Another case study describes how a poor country initiative called Partners in Health in Haiti can be used to strengthen a developed world health care programme named PACT (Prevention and access to Healthcare and Treatment) in the Boston area of USA.

The book gives some interesting examples of companies who have found the opportunities of reverse innovation in India. E.g. it shows how John Deere & Co. - the market leader in tractors in the USA misjudged the Indian market by just selling US type models in India, assuming the market is same and failed. In order to recover Deere had to understand the Indian market afresh as the needs of Indian customers were uniquely different as compared to USA. On the other hand when Indian company Mahindra & Mahindra went to USA, it identified a target segment of hobby farmers and made its mark in a rich country like USA. It was because of the fact that it understood the american market without any pre-conceived notion to carve out a niche segment through which they will gradually expand. The second example is of General Electric’s innovation called MAC 400, an ECG machine that reduced the cost of getting an ECG done from US$20 to US$0.20 meaning almost a hundred times reduction in the cost. The main takeaway from this case study is that the same ECG machines can earn huge profits for the company if they are leveraged to the other parts of the world including the developed markets and can become a source of competitive advantage for the company because of their ease in use besides the cost. The third example is of PepsiCo which identified the need of a snack attuned to the Indian taste as well as the fact that it was baked, and launched the Aliva brand of snacks in India. Aliva was able to make an entry in the market where a more powerful and successful brand of the same company was existing named Kurkure because it managed to leverage the global resource base through carefully managed partnerships for building strong local growth teams. At the end the book gives a toolkit for Reverse Innovation which can be used by companies to assess the potential of reverse innovation in any country.

The book is a good read as it contains plenty of examples, easy to understand models and will motivate the corporates and academicians alike. Especially if the theme is discussed in some public forums it is bound to uncover some interesting examples of companies already following the strategy of reverse innovation.

GUIDELINES FOR AUTHORS

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double blind referred & reviewed management journal is the flagship publication of

ICBM – School of Business Excellence, Hyderabad. It invites researchers, management

professors and practicing managers to contribute to the existing body of knowledge by

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