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Management & Change, Volume 19, Number 2 (2015)
FOREWORD: MANAGEMENT TEACHING AND
RESEARCH. ARE THEY INVERSELY RELATED?
Sudarsanam Padam1
In recent years, there has been a grave concern that management
schools are lagging behind in research. The same concern is also
relevant in most other academic disciplines in Indian universities and
other advanced centres of learning. Though taught as an academic
discipline, management, as a subject, has a bias for practice and freely
takes from all other academic disciplines the concepts they teach, yet
at the same time endeavours to send out students who start managing
from day one. Since some of the best management schools are also
concerned about creating a nancial surplus, the plot thickens. Do
teachers create knowledge, or are they to peddle knowledge created
elsewhere and apply it to management concepts through case studies
and experiences of failing and succeeding in the market place?
The issue becomes clearer if we look at the whole gamut of higher
education and research in India.
SHIFTING RESEARCH FROM UNIVERSITIES TO
ADVANCED CENTRES.
One of the persistent observations in recent years is the absence
of Indian higher educational institutions in the top 100 in the world. A
very successful manager and a role model himself recently commented
that the Massachusetts Institute of Technology (MIT), in the last 100
years, can claim most advanced scientic research to itself. He asked,
why Indian academic institutions cannot do that. There are certain
steps taken since Independence to separate research from universities
and create advanced institutions so that greater attention is given to
research. In retrospect this seems to have boomeranged. Research and
advanced talent ed from universities to the specialized institutions
such as the Indian Institutes of Technology or Central Universities.
Most university departments, even in hard sciences, do not have
proper laboratories. If they have, the equipment is outdated and
1 Former Dean, Administrative Staff College of India, Hyderabad, India.
Email: spadam74@gmail.com
Management & Change, Volume 19, Number 2 (2015)
2 Foreword: Management Teaching and Research. Are They Inversely Related?
not renewed to keep pace with the march of science. It is difcult
to think that even high schools once had science laboratories; now
teachers teach only from text books even to students studying physics
and chemistry.
Coming back to the remark made by the successful business
leader (mentioned above), the reason why MIT is at the forefront
of research is not so much because it had government or corporate
funding. Successful individuals, both students and entrepreneurs,
have donated enormous amounts of money for research. Particularly
in hard sciences like physics, chemistry, etc., the time frame for
research is longer and professors and students are expected to work
over longer periods. They need funding and salaries and stipends
which may not match what the market offers but atleast large enough
to attract students and academicians to commit longer periods of time.
Ask any Indian Institute of Technology (IIT) student whether he or
she wants to do research after the degree, the preference is mostly
to work for corporate jobs which pay more and perhaps invest more
status. This is perhaps the reason why IIT master degree students
are invariably not their own bachelors’ students, but those coming
from the so-called lesser institutions. Not surprisingly, there are few
top Indian Institute of Management (IIM) students who take up the
Fellow (doctoral) programme. They take up jobs which are more
remunerative.
The larger question therefore is, who will teach at the higher
and advanced institutions? Not necessarily the brightest. These
institutions need funding, a lot of it, not just from the government or
corporate enterprises, but from rich and successful individuals. Alfred
P. Sloan, who had been at the helm of General Motors for almost 50
years in last century, donated his entire wealth to MIT, of which he
was a mechanical engineering student, to set up the Sloan Foundation,
an off-shoot of which is the Sloan School of Management of MIT.
We have a few examples in India, but not many, and with much less
sustained funding. Research often negates short-term successes and
therefore needs greater patience, perseverance and nance. China
has realized this and within less than two decades has been able to
put some of its institutions in the top 50 of the world. This cannot
Management & Change, Volume 19, Number 2 (2015)
Sudarsanam Padam 3
happen in India if the government of the day thinks myth is fact and
obsess with the aviation science in Ramayana which made Ravana
y his Pushpak, or medical science which attached elephant head to a
mortal and made him a god! Nor does it need corporate enterprises
and businessmen whose purpose of endowment is to have their names
inscribed - but rarely as an anonymous bequest to create and expand
the boundaries of science.
BACK TO MANAGEMENT RESEARCH
Let me return to management from where the discussion started.
It is often said that management is a duplicitous discipline which freely
takes from all other sciences, social sciences and humanities and try
to apply them to life. A challenging task, but less rigorous in terms
of research in each of the disciplines it borrows from. Management
teachers teach concepts, but they do not, and cannot, teach life. The
student has to do that himself or herself. As an applied discipline,
management education is less and more than other academic
disciplines. Its concern is what is doable, some of it in the short-
run but much of it in the long run. The dichotomy persists. It is not
surprising that some very successful businessmen and industrialists
of earlier generations even looked down on management schools. It
may be apocryphal, but it is once said that Warren Buffet thundered:
What Can You Teach Me? A teacher’s response ought to be, “Do you
want to learn? I cannot teach you life, you have to live life yourself.
But I can give you the tools and concepts, go and apply them. Not all
I teach is may seem to be relevant, but over time, in a long career, it
will be. It is your genius to apply.’’ Hence the title of the very rst
book on management by Peter Drucker in 1952 is The Practice of
Management.
With the brightest students sidestepping academics who will
teach management and create knowledge that can be taught and
learnt? In order to build successful enterprises and contribute to
enhancing the quality of life, the best are needed. The question is: Are
management schools prepared to break the placement and teaching
load barrier and take to the rough and tumble of research? The
chances are as good or as bad as the long term prospects in the careers
Management & Change, Volume 19, Number 2 (2015)
4 Foreword: Management Teaching and Research. Are They Inversely Related?
of management teachers. Have they come for jobs, to scale up from
assistant professor to professor and dean of the institution they work
for? Or are they seeking recognition in their own disciplines across
the schools they work for and build bridges with other institutions
and other academics and professionals working in their elds?
The best known early management institution in India is
undoubtedly the Administrative Staff College of India (ASCI)
which started in 1956. It was not meant, even now, to give degrees.
Management discipline itself being a nascent one, ASCI’s charter
was - and, perhaps, still is - to bring into its classrooms civil servants
and managers from both public and private sectors, with fteen to
twenty years’ experience, and make them discuss, make presentations
and engage in debates on the state of business and industry, and
indeed the overall economy. The philosophy of its founding fathers,
who included Jawaharlal Nehru, C.D. Deshmukh, P.L. Tandon and
Dharma Vira was to improve quality of life in every walk of life - not
that management is only needed for business and industry. Then
came the formal degrees, popularly called MBAs, with the massive
governmental initiative in establishing the IIMs. The rest, as they
say, is history.
LIBERALIZATION AND AFTER
As the 1990s rolled in, the market was favourable and private
money poured into management schools. Parents were willing to
pay high fees, even in the face of steep debt, to build success into
the lives of their children. Initially started as not for prot but later
as for prot, these schools held sway. With annual fees towering Rs
2.5 million, the stage was set. But who will create knowledge needed
for teaching management. The U.S. of A., of course. The materials
and cases were available at a conceptual level, but had to be made
relevant to the Indian context. Even adapting knowledge made in
abroad needed internal research. Paradoxically, the best Indian cases
were written by Harvard Business School. Indian business refused to
be part of case studies which critically examine failures. They were
open, however, to schools from abroad.
The gaps became uncomfortably evident when Indian business
Management & Change, Volume 19, Number 2 (2015)
Sudarsanam Padam 5
schools lined up for international accreditation. Where is research?
And who will do research? Obviously, many management teachers
came for jobs, not necessarily careers. They are content to teach
what others wrote, although many of them were good teachers.
But the problem is research needs different thinking, approach and
orientation. Much of it comes from within, a hankering to express. It
cannot always be inuenced, much less dictated from, from outside.
This suited diploma mills which mushroomed all over, managed at
the top by nanciers out to take advantage and make quick money
from gullible parents and teachers. There are schools which run on
borrowed and part-time faculty, often with .5 directors!
In school after school, it was evident that the deans are driven
by the number of students, placements and budgets. There are
2-year programmes, 1-year programmes and short duration executive
education. Week-end classes and summer schools. The schools went
for them with arrogance and gusto in such a way that there was no
time for writing even for those who wanted to write. In any case,
for those who do not - or cannot - write, there is the ready excuse of
teaching load. For impecunious teachers, the nancial compensation
was matched by a blind eye on research from the businessmen who
owned schools. Much of what went as research was a pre-PhD
affair. Post-PhD it was less and less. One of the most embarrassing
questions at the faculty interviews was: What is the latest book you
read in your subject? Often, the answer was a deafening silence - or
prevarication.
Meanwhile, the schools thrived, particularly the for profit
ones. Some of them even argued about the relevance of research,
when one can get it ready-made from other schools, both here and
abroad. The deans and directors were compensated, rewarded and
promoted to fancier designations on their ability to create surplus for
their masters, the businessmen who invested money. Government
institutions followed. The top IIMs charge over one-and-half million
rupees. Some lesser schools even more, with a foreign trip thrown
in. Indeed, management teachers should create knowledge and
knowledge cannot come without research. Whatever be the schools’
orientation, at least for management teachers, research should be a
Management & Change, Volume 19, Number 2 (2015)
6 Foreword: Management Teaching and Research. Are They Inversely Related?
long term obsession if they want to be counted among their peers
elsewhere. India should strive to encourage its bright teachers and
form teams of interested alumni to create collaborative culture
DRAMATIS PERSONAE
Now the difficult part: how do we harness research in
management schools? There are three primary actors: management
schools, teachers and students. First the schools. Vast sums of
money are being spent on infrastructure; it is okay. But there should
be a strict audit of the costs of infrastructure and whether they are
directed towards effective teaching aid training and the money spent
on them as investment. The emphasis on research is not to create
a small group of professors who write all papers. It should be to
inculcate the bent of research in the younger teachers, supported
by their seniors. The schools should have periodical research audit
both on volume and quality of papers presented and published. If
it is often difcult to nd good journals, there should however be
faculty committees to evaluate draft papers within well before they
are offered to management journals. This is suggested because of the
great competition to publish in acknowledged journals. And they
often take longer time too. There are subtle ways of creating an
environment conducive to research and the schools which created a
name for themselves do know how to create such environment.
Management teachers do expect rewards from the school in
the shape of promotions, which should be linked to research besides
teaching. But what is important is whether a teacher is known outside
his school in his subject. This can only be done with collaboration
among schools, frequent meetings through seminars, joint papers
and offering papers for review to peers. Research is a continuous
activity; it takes place in the mind. Once the research bug bites, there
can be no stopping. Good teachers often leave their schools for those
which recognize and support research. The main question for an
aspiring teacher is whether he or she is known in his or her discipline
outside the school. It is this bedrock which motivates and becomes
contagious. The problem often is that senior teachers either do not,
or do not have time, to write. The example should come from the
Management & Change, Volume 19, Number 2 (2015)
Sudarsanam Padam 7
seniors - and not just to use the work of their juniors.
The students are a difcult part of research. Most of them want
to build their careers in the open world. But it should still be possible
to identify a few, or even some alumni, who could opt for research
careers. Unless research attracts bright students, the long term and
sustained commitment to research will suffer. It is difcult, given the
orientation of the subject of management itself. It should therefore be
the joint endeavour of both the schools and the teachers to strengthen
the Fellow programmes and attract students for careers academic. If
research is weak, it affects teaching. And if teaching is weak, the
school will decline in its standing and relevance. Hence, the need
for sustained joint effort! Management education needs to be saved
from charlatans, careerists purely ‘for prot’ businessmen.
Summing up, it should be emphasized that good intentions do not
always end up in doing good things. In fact, it is aptly said that the
way to hell is paved with good intentions. While everyone agrees
that management schools need research focus, barring a meagre ve
present of schools, there is more chaff than grain. Whether the glass
is half-full or half-empty, India will be propelled into the vortex of
global business and technology. The challenge is for management
schools to keep a constant and qualitative supply of manager’s
year after year, and keep them motivated to return to the school for
renewal, reection and recharging. This depends upon their respect
the school and its faculty command in the society at large, ultimately
it is knowledge which commands respect. While it is a rhetorical
question whether management and research are poles apart, the need
is to bind them together for being counted among the best. Nothing
can warm a teacher’s heart more than students remembering in later
years that they learnt from him. And so is the school.
Management & Change, Volume 19, Number 2 (2015)
8 Foreword: Management Teaching and Research. Are They Inversely Related?
Management & Change, Volume 19, Number 2 (2015)
CASE STUDY BASED PEDAGOGY FOR MARKETING
EDUCATION IN INDIA
Jaydeep Mukherjee2
The increasing popularity of the case study based pedagogy is driven
by stricter benchmarks set by the accreditation agencies on the
quality of teaching and teaching materials. There are considerable
differences in the understanding and execution of the process
of case method of education among faculty and students across
institutions, as well as case writers, reviewers and publishers. This
poses the challenge of non-standard delivery and learning outcomes.
This paper attempts to understand the differences in use of the case
method as a pedagogical tool, from the perspectives of the different
stakeholders like students, the faculty and the case write. An open
ended qualitative research was conducted till the data saturation was
achieved. The results were synthesized and organized to arrive at a
shared understanding and insights on case method of teaching.
Keywords: Teaching Cases, Case Method, Pedagogy, Case Based
Teaching in India, Teaching Marketing
INTRODUCTION
The forces of globalization are increasing the demand for global
managers and management institutes in the Asian subcontinent
are actively seeking international accreditations (Friga, Bettis and
Sullivan, 2003). Following the trend, there has been an increase in
interest among the Indian business schools also to get international
accreditation. As per the requirements of accreditation, there are
now initiatives on faculty development, curriculum design, course
materials and pedagogy. Accesses to international case repositories
have increased because of the ease of internet and electronic data
download. The increasing popularity of the case study based pedagogy
is also supported by the stricter benchmarks set by the accreditation
agencies on the quality of teaching materials.
2 Associate Professor, Marketing Area, Management Development Institute, Gurgaon – 122007,
Haryana, India. Email: jmukherjee@mdi.ac.in
Management & Change, Volume 19, Number 2 (2015)
10 Case Study Based Pedagogy for Marketing Education in India
Cases are very relevant to discipline of management education as
it helps in developing the skill of applying the concept to the context.
Though there are many critique of the case based teaching in business
schools (Shugan, 2006), the popularity and prevalence of case method
across many globally reputed management institutions can’t be
denied. There exists an understanding of the method, its usefulness
and limitations among the faculty of management institutes.
The use and outcome of the case based pedagogy is not only
dependent on the faculty and the students, but also on the previous
academic exposure of the faculty and the students. In the Indian
context, the students who get admitted in management courses and
even the faculty are from undergraduate courses where lecture method
and laboratory work is prevalent. They are used to learning from their
faculty where the role of student is of a receiver of information and
the objective is dissemination of established knowledge. They were
used to classrooms where there is less emphasis on co-creating the
learning process and outcomes in the class. Hence, the case method
is quite a new pedagogy for the management students in India as well
as many faculties in India. Thus they are not used to case method
in which student and teacher co-create the learning environment as
well as outcomes (Bonoma, 1989). The method requires the students
and the teachers having to come out of their comfort zones, but it
also provides the opportunity for the student and faculty to start from
the scratch and dene their own conceptualization of the case based
pedagogy. Based on the specic adaptations made by the faculty and
the students, differences exist between ideal (if there is any such thing)
and the actual practice of case method of teaching (Dowd, 1992).
If we consider a small unit of analysis like an individual
business school, there are likely to be considerable differences in
the understanding and execution of the process of case method of
education among different faculty and students. Similarly, there would
be differences in the perspectives of the case writers, reviewers and
publishers. The presence of multiple perspectives is natural and to an
extent desirable for the proliferation and continuous improvements of
this pedagogy. However, it also poses the challenges of non standard
delivery and learning outcomes. Thus there is a need to understand
Management & Change, Volume 19, Number 2 (2015)
Jaydeep Mukherjee 11
the differences in use of the case method as a pedagogical tool, from
the perspectives of the different stakeholders.
There had been a compilation of comprehensive work in this
important area of pedagogy, published in the journal Vikalpa, Volume
30, in 2005. However, since then, there has been a tremendous change
in the technological environment, which has impacted the access to
cases, the method of delivery for the teachers and the ways of learning
and interaction among the students. Hence, there is a need to revisit
the topic.
RESEARCH METHODOLOGY
The objective of the research was to nd out how the case method
of teaching and learning is perceived and its impact assessed by the
following stakeholders:-
i. management students
ii. management faculty
iii. case writer/evaluator/reviewer’s
Management education is multidisciplinary in nature and there
could be differences among the different academic streams like
nance, marketing, human resource management etc. Hence the scope
of the study was limited to the marketing discipline only. Marketing
was chosen as case method is very popular in this discipline and it is
used extensively across different institutions.
The enquiry was focused on human sense-making, which was
part of interpretive research and essentially qualitative in nature
(Myers, 2013). The approach was to ask the relevant respondents
questions about how and what they learnt from the case method,
when and why they used it etc. Open ended conversations helped
the process of exploring the nuances of the pedagogy, as perceived
by the respondent. Thus the perspectives of the students, the faculty
and the case writers were collected by conducting semi-structured
interviews with open ended questions. This approach has been chosen
Management & Change, Volume 19, Number 2 (2015)
12 Case Study Based Pedagogy for Marketing Education in India
to recognize the existence of different perceptive as well as differences
in perspectives between the different groups of stakeholders as well as
among the same group of stakeholders (Bijapurkar, 2005; Monippally,
2005; Raghuram, 2005; Krishnan, 2005).
The sample size was not predetermined, and the data was
collected from respondents till the level of saturation was achieved
and no more new insights were uncovered (Myers, 2013). The
respondents (students and faculty) were selected from four different
institutions and their business school ranking ranged from top ten to
top two hundred as per some well known weekly magazine in India,
who conduct such study annually. Since these institutions had students
and faculty coming from different parts of India, it was a reasonable
all India representation.
The students were selected based on their having experience
of at least thirty case studies in marketing courses. Those marketing
faculty, who conducted at least half of their courses through case
studies and had minimum of ve years of teaching experience
were considered. Thus, a total of seventeen students and ten faculty
members were interviewed. Three writers and reviewers of case study
were interviewed and they had at least 5 case studies published in
national or international journals or case clearing houses in which
they were the rst authors.
The data was collected by the researcher by taking down notes
during the interview process and then collating them and organizing
them into themes in a spreadsheet. The researcher had more than a
decade of experience in conducting qualitative research and teaching
with case method, helping in the process of unbiased probing and data
collection. The criteria of investigator responsiveness, methodological
coherence, sample selection and data saturation were applied to ensure
reliability and validity of this research (Morse et.al., 2008).
Since this was an exploratory research, apart from the answers
to the main questions, other insights about case teaching emerged.
They were insights on conducting the case study in the classroom.
The same was compiled and was included in this paper.
Management & Change, Volume 19, Number 2 (2015)
Jaydeep Mukherjee 13
Thu the reliability and validity was established by ensuring
FINDINGS
The ndings are organized as per the respondent groups as the
perspectives were distinctly different. They are given below:
a. Case Study from the perspective of a management student
There was multiple understanding of the case study method in
marketing among the students. There were essentially three main
ndings, which are given below:
i. Applying concepts to contexts: The students perceive case
study as a mechanism of applying of theoretical concepts to a
“marketing context”. So the case is essentially a “laboratory”
like simulation of real life marketing situations where “stakes”
for the decision maker was limited (as the decisions were only
discussed and not implemented).
Cases were set pieces, where errors in decision were not costly
and hence many experiments could be conducted. Thus the
learning was by active participation, experimenting with ideas.
Case studies are also perceived to help in applying conceptual
knowledge on marketing situations, helping in assimilation of
conceptual learning acquired elsewhere. The primary objective
is to “crack the case” which is essentially to get insights
which was not available earlier, going beyond the obvious or
discovering the “big picture”. Within this broad paradigm, the
students have differing understanding of the learning process.
Some have active learning paradigm, like researching on the
relevant concepts, trying to nd the appropriate technique(s)
to use, which is supported or to some extent validated by the
faculty in the classroom. However, there exists a passive learning
paradigm also, where students expect the faculty to demonstrate
the application of concept to the marketing context, unravel the
mystery of the bigger picture etc.
Management & Change, Volume 19, Number 2 (2015)
14 Case Study Based Pedagogy for Marketing Education in India
ii. Learning is entertainment and fun: In case the faculty is able
to pull off the case in an engrossing manner, it is perceived as
an entertaining class (not necessarily very high on long term
and insightful learning). Some students nd it easier to relate
to this pedagogy as it does not put overt stress (because there
is no unique solution and hence even an incomplete analysis is
accepted in the class), providing the fun of learning in a relaxed
ambience. An extreme reason (which is also quite common)
for preference for case based learning pedagogy and its use as
an evaluation tool, was the “assurance of reasonable grades”
without reading the books and doing much hard work.
iii. Case studies cause confusion: In the case method, there are no
xed and standard answers to what is a good case preparation,
what is the ideal process of learning and its outcome for a
student. The problem is compounded by lack of clarity on “how
to transfer learning derived from cases to the real world contexts
which the student is preparing to face”. Thus many students
also do not relate to the method and would prefer other methods
like lecture, discussion and assignments. They expect the case
method to be a small part of the curriculum and the faculty to
provide an ideal solution to the class, so that there is a closure
to the discussion.
b. Case study from the perspective of a management faculty
The faculties had differing views on the usefulness, limitations
and reasons for choosing the case method. These views are primarily
shaped by their own experience(s) as students, their professional
training, academic and pedagogical exposure to case method and
specic teaching objectives. However, some key issues which drive
the differences in the use of case based pedagogy are faculty’s
perspectives and assumptions about:
i. What is the learning process in the case method? A prevalent
view is that it is an adult learning process where the primary
responsibility to learn rests on the students. Hence the student
is expected to undertake adequate pre-class preparations, be
intensely attentive, listen and contribute in the class. They are
Management & Change, Volume 19, Number 2 (2015)
Jaydeep Mukherjee 15
expected to discuss the case even beyond the scheduled classroom
and make their own conclusions. Most faculty are clear on the
above, they however consider it to be an ideal which is seldom
achieved at marketing classes in India – specially considering the
large number of business schools where marketing is taught.
A natural corollary to the above argument is that, it is not
adequate to have an understanding of what a case method is and
what it can deliver, but it needs to be put in the context of “what
are the alternatives to case method of teaching/learning? Which
method is more appropriate in a specic context of student, topic
and class?”
The standard alternatives available to marketing faculty are
lecture method; project based learning, role-play based learning as
well as simulation games. In fact this analysis is not possible unless
the following assumptions are made:
a. A student’s ability to learn and a faculty’s ability to conduct the
class effectively by each one of the different pedagogy are same
across the pedagogical methods like lecture, case method etc.
b. All students have similar abilities to adapt themselves to the
different pedagogy.
Since these assumptions are unlikely to be true across the
situations, the relative prociency of the faculty and the students
in following the different pedagogical options becomes critical.
Other factors could be the specic topic of education and student’s
prociency in assimilating and learning from the different pedagogical
techniques. Hence the comfort level of the faculty with the method
and the assessment of the student’s competence to deal with the
pedagogy is the key to success of the pedagogy.
Since case study method is not very common in the graduate
level education in India – setting the expectations for the case based
pedagogy may be quite effective. Creating a shared understanding
about the different pedagogical choices, demands of the specic
methods and their relative merits and demerits may go a long way
Management & Change, Volume 19, Number 2 (2015)
16 Case Study Based Pedagogy for Marketing Education in India
in improving the outcome – irrespective of the context. Certain key
issues which could be discussed to develop a shared understanding
could be:
• What constitutes a good case preparation: It should address
the possibility of multiple analyses and its impact on class
learning. There is need to emphasize the virtual impossibility
of conducting a meaningful case based class if the students do
not make adequate pre-class preparation.
• How much faculty control over outcome of class is possible
and desirable: Clarity on objective of the class, for example:
application of concepts / decision making skill as opposed to
improving analytical acumen and understanding. There has to be
appreciation of some inherent risk of a case based class like:
i. Discussion being high-jacked by a few irrelevant thoughts
(and students),
ii. The class discussion drifting without achieving any
concerted learning,
iii. Possibility of no or very insignicant learning for majority
of the class.
These challenges get compounded by and the insecurity of the
faculty as there is uncertainty about the outcome of the class (from
disaster to ecstasy).
• How to achieve value addition by the case method. Who all in
the classroom have the responsibility and the specic nature
of their responsibility in helping the learning through the case
method?
Many a times, a lot of confusion creeps in because the role of
the faculty is not clear. Is it that of a conductor of symphony,
or is it guiding the discussion, or does it include summing up,
consolidating learning during the course of discussion (in a
blackboard) or even concluding the case discussion by offering
Management & Change, Volume 19, Number 2 (2015)
Jaydeep Mukherjee 17
own insights, or to more active role of steering and focusing the
discussion to pre decided course.
Majority of these choices are result of the individual faculty’s
position on the different paradigms of the learning process. Most
faculty fall somewhere between the two distinctly divergent
paradigms give below:
i. Student as consumers of marketing education where faculty
is a service provider. Hence faculty is eventually responsible
for the learning and value addition to the student.
ii. Students are preparing for taking meaningful assignments
in the industry and faculty are only helping them in their
preparation. Hence, the onus of acquiring the learning and
being suitable for the industry is on the student.
c. Case study from the case writer/evaluator/reviewer’s
perspective
Since case study and its use in imparting marketing education
have multiple perspectives. Thus the case writer’s job becomes quite
difcult as their output should be able to accommodate the diversity.
Similarly it becomes difcult to set rigid rules and review criteria for
the cases which are meant for classroom teaching. However, there
exists some shared understanding on cases for management education,
which could be considered:
A case is not an exercise in creative writing, it is serious research:
Most cases are developed by experienced and learned faculty by
collecting relevant primary and secondary data. It includes point of
view of the different stakeholders in the marketing context. Though
the case may be constructed or presented as a hypothetical one, the
case writer has to validate each of the ndings which are put in the
case. A good case is expected to be objective, hence, should have
balance of perspectives on different points of views expressed – which
acts as a check to the individual biases and preferences creeping into
the case.
Management & Change, Volume 19, Number 2 (2015)
18 Case Study Based Pedagogy for Marketing Education in India
Focus on learning objectives, yet allowing multiple interpretations:
Most case studies narrate marketing situations and hence there is a
possibility of multiple analyses based on differences in interpreting
the context. This has the potential to add to confusion but also has
benets, for example, it helps the students to discern what is important
from what is not. However, this inherent characteristic of case studies
could lead to a diffused, directionless outcome in a classroom. The
prevalent method to solve the problem is to identify a primary platform
and a set of (two to four) secondary platforms to peg the case study.
Another choice which should be clear to the case writer is the nature of
the case, whether it describes a decision making process or a decision
making problem. In case it is about a process, it normally lends itself
to a larger set of treatment than a decision problem case, and hence
the style of writing has to be adjusted.
The dilemma of data adequacy Vs data redundancy: The data
provided in the case is fundamentally linked to the primary and
secondary discussion platforms used in the case study. If there is
too less data, signicant learning insights may be lost - reducing the
effectiveness of the case. However, too much of data robs the charm
of the case and prevents the analytical skills being challenged and
developed adequately though classroom discussion and analysis.
One of the rule of thumb could be to err slightly on the side of more
data than less data. This is more so in the current marketing contexts
where the managers have access to so more data than they can use.
Writing cases which are evergreen: Some cases retain their
relevance longer than others. The longer lasting cases commonly
employ past tense and are either written in time neutral manner or
are very clearly ensconced in a particular time and context - so that
they could be used irrespective of time.
Generating interest for the reader: The attention span of the
student population is reducing and they have many competing
methods to learn. Hence there is an increasing trend towards shorter
form of cases, video cases etc. The challenge of writing a compelling
case could be in the domain of content as well as communication. The
commonly used communication style has been to state the problem
Management & Change, Volume 19, Number 2 (2015)
Jaydeep Mukherjee 19
situation and the hook early in the case, followed by the context in
ashback form, keeping real characters, strong storyline and language
validation.
Many a time, students search the internet for information about
the case, during their preparation. The case should be so designed
that it cannot be solved based on such internet searches; hence the
faculty has to do the internet search every time the assignment is given.
However, searching the internet is not to be discouraged, in fact it
may be encouraged as it demonstrates the interest of the students and
can help them learn on their own. The visit to the internet sites should
ideally increase the interest in the case rather than decrease and the
focus should not be to nd easy solutions and beat the system.
Teaching note development: The key questions to be considered
before commencing the case writing exercise is to know a) for
whom b) for what purpose the case has been written, c) what other
audiences and purposes it could be used. Though the case writer may
have used very clearly developed primary and secondary platforms
for the conducting the case study, most marketing cases would have
possible alternate usage / analysis / treatments. The key requirement
is the ability of the teaching note is to help the faculty to make the
class discover the possible angles to the case, as well as focus on the
key learning objective through effective use of the lead questions. If
that is not possible, the teaching note should try to alert the teaching
faculty to the possible other treatments. The choice of teaching focus
would determine the efciency of learning with respect to richness of
understanding, assimilation of the concepts and thus is best left to the
user of the teaching note. It is worth considering writing one’s own
case notes (even if that of case writer is available) and even revisiting
the case key from time to time for critical analysis.
d. Insights on conducting case studies in the classroom
This section tries to collate the interesting insights which came
across during the research, which could be useful in improving the
classroom experience and outcomes.
Faculty preparation: How much preparation is adequate remains
Management & Change, Volume 19, Number 2 (2015)
20 Case Study Based Pedagogy for Marketing Education in India
a dilemma for the faculty. The basic thumb rule is that faculty should
ensure that they have worked out the different analysis that the class
is likely to come up with (though may not be exactly matching the
faculty’s list). There should not be major surprise for the faculty in
the classroom. This means that the work done by the faculty on the
case should be able to address the collective analysis of the entire
class.
The use of lead questions: These are questions to guide the
discussion and the choice needs to be exercised on its usage, in terms
of number of questions and their timing. The alternatives available
include giving it the students as pre-class preparation questions; or
use it in the beginning of the class to set the agenda, or let the class
ow on its own and use only if necessary (in the middle of the class)
just to bring in some specic direction. One of the possible ways to
use the lead questions is to use them like “opening moves” in chess.
For a case faculty, though the end objective could be unique, but
there exists scope for tremendous variations in the execution, making
it challenging to conduct the class and also brings in interesting
insights.
Outcome of successfully conducted “case study”: Though the
prevalent point of view is that at the end of class, there is a clear
feeling of value addition to the participants, like realization of counter
intuitive perspective, new insights, ability to apply concepts into
contexts etc. However there could be a diametrically opposite point
of view of frustration, unresolved and inconclusive analysis and a
lingering problem which keeps the participants thinking even after
the class is over. The preference of the participants could be based
on the understanding of “Where does the learning happen in a case
study?” and the possible answers could be as diverse as - in the class
room, during pre – class preparation, after class, sometimes even
much later in life. Thus the case study could be perceived to be a
beginning to solving a problem and not a nal solution. Thus the
ideal class outcome is where answers to the problem are found or it
could even be, when the case raises more question than it answers.
Ensuring quality class participation: The case study method
Management & Change, Volume 19, Number 2 (2015)
Jaydeep Mukherjee 21
depends primarily on the class participation to stimulate the learning
process and outcomes. The basic assumption that the students have
come prepared (which is reading + analysis + discussion among
themselves) for the class. However, this is not a common in practice;
hence the rst challenge for the case faculty is to manage the pre-
reading. It could be achieved by various operational tools like seeking
individual case notes as submission, asking individual students about
their point of view, giving evaluation weight for class participation,
conducting quizzes on pre class preparations or even asking students
to leave the class if they are found to be not prepared.
The use of internet to nd solution to case, adds to the problem.
The faculty has to be careful and devise ways to penalize this
behavior. The ideal way to manage the process is to make the class
so meaningful for the student that they come prepared on their own
volition. The personality of the faculty and their prior reputation (if
any) may help. Whichever be the method or combination of methods
adopted, the bottom-line is that it is nearly impossible to conduct
meaningful case based classes without the students being adequately
prepared.
How to spice up a case study in classroom and overcome faculty
fatigue: Sometimes the same cases are taken in multiple sessions
by the faculty for different set of students (but similar prole),
with similar learning objectives. This can be boring unless handled
innovatively. Similarly, the students may get used to and become
immune to a certain style of conducting case studies by a faculty.
Some ways to make the process more invigorating for the faculty is
to “change contexts & yet apply the concepts”. It could be achieved
by beginning with different sets of lead questions, or even handle
the cases from different sets of primary & secondary platform.
Though the faculty is expected to have limited style options and
personal preferences based on individual strengths and limitations;
techniques like humor, intense interjection, questioning to the extent
of interrogation are some variations which could be adopted.
Board Planning & execution: Since the case method is relatively
broad mechanism which has many stakeholders, it is many a time
Management & Change, Volume 19, Number 2 (2015)
22 Case Study Based Pedagogy for Marketing Education in India
difcult to lead the class to a narrow set of options (which might be
counterproductive also). Thus there is limited possibility to completely
pre plan the session, thus canned presentation are not quite useful. Thus
the board work assumes very high degree of importance in capturing
the essence of the case based learning model. The board also acts as
the memory of the class and hence could be a critical tool in aiding
the retention of the collective learning process. In case the faculty is
well prepared, it is possible to improve the assimilation of the learning
and its retention by the class by pre planned conceptualization of the
board plan. As and when particular elements unfold in the case, it
is put up in a predestined position in the board. Thus the case study
unfolds as a jigsaw puzzle which logically falls into place in the board
during the progression of the case analysis. This requires exhaustive
analysis, conceptual clarity and focus of teaching objectives. In case
the faculty refers to the board more often, it is likely to help improve
the board work of the faculty as well as help students retain better as
their focus also shifts to the board by this act of the faculty.
The case study has to focus on problems or solutions: There
are differing views on the primary focus of the case study. The
primary choice seems to focus on solutions. However, there is merit
in focusing on the key problems also. The support for the problem
identication argument is that; a proper diagnosis of the problem is
critical to successfully addressing the problem. In many cases, the
problems are not very apparent but good analysis could pin them
down. While solutions could be confounded with various tradeoff’s,
which can not be evaluated in light of information provided or may
not be relevant in the real world context any more (as the context had
changed), limiting its usefulness.
CONCLUSION
The case methodology in India seems to be evolving in different
directions. Some of it is in line with the current understanding in the
international best practices like focusing on educating the students
for a lifetime and not to pass a class. Helping the students learning
to think, perform analysis, deal with ambiguity, and make and
substantiate decisions with facts, are key to success in the modern
world (Guess 2014).
Management & Change, Volume 19, Number 2 (2015)
Jaydeep Mukherjee 23
However, this research also shows that the management
educators in India are adapting their pedagogy to the realities of the
students and the job opportunities. As a country we have too many
potential job opportunities in the lower management levels and with
glass ceilings which are quite low in the organizational hierarchy.
Hence, there is not only need to prepare for the business leaders but
also managers who can handle sales and operations driven jobs, which
they would enhance with their work experiences. The educators are
India are alive to such requirements and are preparing their students
appropriately.
This paper helps the faculty to pick up appropriate ideas and
experiment with them to help improve the effectiveness of learning
by the case method for their own student base.
LIMITATIONS OF THE STUDY AND AREAS OF FURTHER
RESEARCH
The research was limited to the discipline of marketing, there is
need to test if the ndings hold true for other disciplines taught in the
management education. Also, the study was conducted among select
set of business schools which was ranked in the top hundred. Hence
the research ndings may not be extended to all the institutions. A
more robust methodology may improve the generalization.
Qualitative research ndings are a good base for quantitative
validation. Hence, each of the findings and insights can be
quantitatively validated.
The case base pedagogy is neither static nor amenable to one
particular point of view. This paper attempt is to provide a nature
of challenges from the perspectives of different stakeholders. It
elucidates the different tradeoffs which need to be made, the variety
of choices available to the faculty.
Hence the ndings are limited by the current context. So these
questions need to be validates as and when the context changes within
India as well as other countries.
Management & Change, Volume 19, Number 2 (2015)
24 Case Study Based Pedagogy for Marketing Education in India
REFERENCES
Bijapurkar, R. (2005). Going back to the future of case method,
Vikalpa, Vol. 30, No 4, pp 109-111
Bonoma, T. V. (1989). Learning with cases, Harvard Marketing
School Publishing, 9-589-080, pp. 1-10
Dowd, J.J. (1992). Case Method Teaching: Suggestions for Practice,
Marketing Education Review, Vol. 2, pp. 44-47
Friga, P. N., Bettis, R. A., & Sullivan, R. S. (2003). Changes in
graduate management education and new marketing school
strategies for the 21st century, Academy of Management
Learning & Education, 2(3), 233-249.
Guess, A. K. (2014). A Methodology for Case Teaching: Becoming a
Guide on The Side. Journal of Accounting and Finance, 14(6),
113.
Krishnan, R.T., (2005). The case method in Indian management
education, Vikalpa, Vol. 30, No 4, pp 112 - 115
Myers, M. D. (2013). Qualitative research in marketing and
management. Sage.
Monippally, M.M., (2005). The case method in ‘teaching’ managerial
communication, Vikalpa, Vol. 30, No 4, pp 106-111
Morse, J. M., Barrett, M., Mayan, M., Olson, K., & Spiers, J. (2008).
Verication strategies for establishing reliability and validity
in qualitative research, International journal of qualitative
methods, 1(2), 13-22
Raghuram, G (2005). What is the future of case method in management
education in India, Vikalpa, Vol. 30, No 4, pp 118-120
Shugan, S. M. (2006). Editorial: Save research-abandon the case
method of teaching. Marketing Science, 25(2), 109-115
Management & Change, Volume 19, Number 2 (2015)
AN EMPIRICAL ASSESSMENT OF TOURISM SERVICE
QUALITY, SATISFACTION AND BEHAVIOURAL
INTENTIONS IN KASHMIR VALLEY
Mushtaq Ahmad Bhat1 Nabina Qadir2
Due to growing competition and increased signicance of tourism
sector in the global economy, service quality has become an important
concern of tourism destinations as it signicantly inuences tourist
satisfaction, repeat visits and word of mouth recommendations. Also,
providing quality tourism service is essential because of the fact that
successful tourism increases destination’s tourist receipts, income,
employment and government revenues and leads to the growth of the
GDP of an economy. Therefore, keeping in view the importance of
service quality for the sustenance and promotion of tourism business
and tourist destination, present study is an attempt to measure
the relationship between tourism service quality, satisfaction and
behavioural intentions. Data was collected with the help of a self-
administered and statistically tested research instrument. A total
of one thousand forty-three (1043) lled-in questionnaires were
used for the purpose of analysis. The ndings of the study revealed
positive and strong relationship between tourism service quality,
satisfaction and behavioural intentions. Moreover, direct effect of
service quality on behavioural intentions and moderating effect of
satisfaction on the relationship of service quality and behavioural
intentions is conrmed. Therefore, improving service quality and
customer satisfaction should be considered as key factors responsible
for increasing customer loyalty and protability of a business.
Keywords: Service Quality, Tourist Satisfaction, Tourist Behavioural
Intentions, Dimensions of Tourism Services
1 Associate Professor, Marketing Area, Management Development Institute, Gurgaon – 122007,
Haryana, India. Email: jmukherjee@mdi.ac.in
Associate Professor, Department of Business & Financial Studies, University of Kashmir, Srinagar
– 190006, J&K, India. Email: mb@kashmiruniversity.ac.in
2 Assistant Professor, Government Degree College, Bemina, Srinagar – 190006, J&K, India. Email:
nabeena2012@gmail.com
Management & Change, Volume 19, Number 2 (2015)
26 An Empirical Assessment of Tourism Service Quality, Satisfaction and...
INTRODUCTION
The travel and tourism has emerged as one of the fastest growing
industries in the global economy. Since 1950, international tourist
arrivals have grown from mere 25 million to reach 1035 million
in 2012. Travel and tourism is recognized as the world’s largest
industry relating to employment, foreign exchange earnings and
overall economic development of several countries. It provides an
opportunity to reduce poverty, offers impetus to other industries
through backward and forward linkages and generates huge revenue
receipts for the nation.
During 2009-2012, international tourist arrivals grew from
881 million to 1035 million registered an increase of 3.8% in
2012. International tourism receipts also recorded a growth of 4%
(equivalent to the growth rate of international tourist arrivals) in
real terms in 2012 and conrmed the strong correlation between the
two key indicators used in monitoring international tourism trends
(UNWTO, 2013).
Table 1: International Tourist Arrivals Worldwide, 2009 – 2012
Region
Tourist Arrivals
(in millions) % change
(2012/2011)
%age Share
(2012)
2009 2010 2011 2012
Europe 461.1 487.6 517.5 534.8 3.3 51.7
Asia and the Pacic 181.0 205.1 218.1 232.9 6.8 22.5
Americas 140.7 150.3 156.3 162.1 3.7 15.7
Africa 46.0 49.8 49.2 52.3 6.3 5.1
Middle East 52.1 59.2 55.3 52.6 -4.9 5.1
Advanced Economies 473 507 530 551 3.8 53.2
Emerging Economies 408 445 466 484 4.3 46.8
World 881 952 996 1035 3.8 100
Source: UNWTO, 2013
Management & Change, Volume 19, Number 2 (2015)
Mushtaq Ahmad Bhat, Nabina Qadir 27
According to World Travel and Tourism Council (WTTC,
2013), the total contribution of travel and tourism to the world GDP
was 9.3% (US$ 6,630.4 billion) in 2012 and is forecasted to rise by
4.4% p.a. to reach to 10.0% of world GDP (US$10,507.1 billion) by
2023. However, its total contribution to global employment was 8.7%
(261,394,000 jobs) in the same year. In 2012, the world generated
US$ 1.3 trillion in visitor exports accounting for 6 per cent of the
world’s exports.
In India, the travel and tourism sector holds strategic importance
by providing several socio-economic benets such as employment,
foreign exchange earnings, development of infrastructure,
development or expansion of agriculture, construction, handicraft
industries etc. Total tourist arrivals have increased at a rate of 16.3
per cent per annum from 577 million tourists in 2008 to 1057 million
tourists in 2012 (Table 2).
Table 2: Tourist Arrivals in India, 2008-2012
Year
Tourist arrivals (in millions) Direct
contribution
to GDP (INR
Billions)
Domestic Foreign Total
2008 563 14 577 1160
2009 669 14 683 1228
2010 748 18 766 1437
2011 865 19 884 1674
2012 1036 21 1057 1920
Source: WTTC, 2013
According to World Travel and Tourism Council (WTTC, 2013),
travel and tourism sector directly contributed INR 1920 billion to
India’s GDP and supported 25 million jobs constituting 4.9 per cent
of the total employment in the country in 2012. It has been recognized
as one of the largest net earners of foreign exchange for the country,
recording earnings of Rs 94,487 crores (provisional) in 2012, a growth
Management & Change, Volume 19, Number 2 (2015)
28 An Empirical Assessment of Tourism Service Quality, Satisfaction and...
of 21.8% over 2011, (Ministry of Tourism, Govt. of India, 2013). The
country has signicant potential to become a major global tourist
destination, with the tourism sector expected to contribute around INR
3,414.8 billion (US$ 77.0 billion) by 2021 (Indian tourism, 2013).
The tourism industry is contending with the issue of service
quality and recognizes it as a key to long-term success (Foster, 2001).
Due to intense competition in tourism business markets, service
quality has become one of the most important sources of competitive
advantage. Research has extensively revealed that higher levels of
service quality produce higher levels of customer satisfaction, which
in turn lead to higher levels of customer patronage, positive word-of-
mouth, employees’ satisfaction and commitment, enhanced corporate
image, reduced costs and improved protability (Berry, et. al., 1989;
Amin and Isa, 2008, Lien, 2010). Consequently, all tourism enterprises
need to focus on various ways to increase the level of service quality,
tourists’ satisfaction and their revisit intentions (Kara, et. al., 1995,
Gillbert, et. al., 2004, Qin and Prybutok, 2008). Thus, it becomes
indispensable to understand tourism service quality, satisfaction
and behavioural intentions in order to gain and maintain long-term
competitive position in the market place.
REVIEW OF LITERATURE
Service Quality
Although service quality construct has been studied by many
researchers for several decades, there is no consensus about the
conceptualization of service quality (Cronin and Taylor, 1992).
Most of the suggested definitions focus on meeting customer
needs and expectations. Lewis and Booms (1983) dened service
quality as “a measure of how well the service delivered matches
customer’s expectations”. Parasuraman, et. al., (1985) proposed
a formal denition of customer service quality as “the degree and
direction of discrepancy between customers’ service perceptions and
expectations”. Yet, service quality is a difference between customer
expectations of ‘what they want’ and their perceptions of ‘what they
get’ (Gronroos, 1982, Boulding, et. al., 1993). However, Bitner and
Hubbert (1994) stated, “service quality is the customers’ overall
Management & Change, Volume 19, Number 2 (2015)
Mushtaq Ahmad Bhat, Nabina Qadir 29
impression of the relative inferiority/superiority of the organization
and its services”. In the tourism context, service quality refers to
service performance at the attribute level (Chen and Chen, 2010). As
stated by Kandampully, et. al., (2011), consistent quality of service
creates and sustains the image of a destination which ultimately results
in tourists’ loyalty. So, tourists’ loyalty depends on the destinations
ability to consistently deliver service quality.
Customer Satisfaction
Many researchers (Oliver, 1981, Brady and Robertson, 2001,
Lovelock, et. al., 2001) conceptualize customer satisfaction as an
individual’s feeling of pleasure or disappointment resulting from a
comparison between prior expectation and perceived performance
after consumption. Generally, there are two conceptualizations
of satisfaction – transaction-specic satisfaction and cumulative
satisfaction (Boulding, et. al., 1993, Jones and Suh, 2000, Yi and La,
2004). Transaction-specic satisfaction is a customer’s evaluation of
his or her experience and reactions to a particular service encounter
(Cronin and Taylor, 1992, Boshoff and Gray, 2004), and cumulative
satisfaction refers to the customer’s overall evaluation of the
consumption experience to date (Johnson, et. al., 1995). The literature
reveals that understanding tourist satisfaction is one of the most
relevant areas of research for the tourism industry (Petrick, 2003,
Prebensen, 2006), as satised tourists tend to transmit their positive
experience to others and repeat their visit (Kozak and Rimmington,
2000, Gonzalez, et. al., 2007). According to Reisinger and Turner
(2003), when experiences compared to expectations result in feelings
of gratication, the tourist is satised. However, when they result in
feelings of displeasure, the tourist is dissatised.
Behavioural Intentions
The concept of behavioural intentions is referred to as people’s
beliefs about what they intend to do in a certain situation (Ajzen
and Fishbein, 1980). Behavioural intentions can be dened as,
“indicators that signal whether customers will remain with or defect
from the company” (Zeithaml, et. al., 1996; Alexandris, et. al., 2002).
Madhavaiah, et. al., (2008) stated that behavioural intentions can be
Management & Change, Volume 19, Number 2 (2015)
30 An Empirical Assessment of Tourism Service Quality, Satisfaction and...
favourable or unfavourable, depending on the quality and satisfaction
rating that customers have for the service. Favourable behavioural
intentions of customers can be in the form of expressing positive word
of mouth communication (Boulding, et. al., 1993), customer loyalty
(Rust and Zahorik, 1993) and recommendation (Parasuraman, et. al,
1988, 1991). Unfavourable behavioural intentions, on the other hand,
include customer switching behaviour and complaint behavior (Lobo,
et. al., 2007). Understanding the behavioural intentions of customers
after experiencing services is important because they are seen as a
prime determinant of a rm’s long term nancial performance and
is considered a major source of competitive advantage (Lam, et. al.,
2004).
RELATIONSHIP BETWEEN SERVICE QUALITY,
CUSTOMER SATISFACTION AND BEHAVIOURAL
INTENTIONS
There are divergent results available in the literature (Palmer,
2008, Vlachos and Vrechopoulos, 2008) related to the relationship
of service quality and customer satisfaction. Some studies noted that
service quality is an antecedent of customer satisfaction (Cronin and
Taylor, 1992), while others found reverse relationship (Bitner, 1990).
However, there is a general agreement that satisfaction mediates
the relationship between perceived service quality and business
performance (Fornell, 1992, Gotlieb, et. al., 1994, Babikas, et. al.,
2004). According to Gandolfo and Rosa (2010), service quality
and customer satisfaction are the key factors to obtain competitive
advantage and is one of the biggest challenges for managers in the
hospitality industry. Amin and Isa (2008) described that service
quality is positively associated with customer satisfaction and that
establishment of higher levels of service quality will lead customers
to have a high level of satisfaction. Similarly, Rahman et. al., (2010)
suggested that overall good service quality does bring about improved
tourist satisfaction. In addition to this, many other empirical studies
(Abdullah and Rozario, 2009, Chen and Chen, 2010, Chen, et. al.,
2011, Islam, et. al., 2011, Shing, et. al., 2012) pertaining to service
quality in hospitality industry suggest that there is a signicant,
direct and positive relationship between service quality and customer
satisfaction. The literature, therefore, supported the formulation of
Management & Change, Volume 19, Number 2 (2015)
Mushtaq Ahmad Bhat, Nabina Qadir 31
following testable hypothesis:
H 1: Tourism service quality is positively related to tourist
satisfaction.
Also, previous research maintained that customer satisfaction
exerted a strong and direct inuence on behavioural intentions (Bitner,
1990, Cronin, et. al., 2000; Choi and Chu, 2001, Chang, 2003, Wang,
et. al., 2006, Shonk, 2006, Lin and Hsieh, 2007, Clemes, et. al., 2008,
Chen and Chen, 2010). Hence, Suhartanto (1998) and Kandampully
and Suhartanto (2000, 2003) concluded that there is a positive link
between customer satisfaction and behavioural intentions in the
hospitality industry. In addition, Chou (2004) and Kang, et. al.,
(2004) proposed that customer satisfaction is a powerful factor that
inuences behavioural intentions in the hospitality industry. Thus,
there appears to be a consensus that satisfaction is an antecedent to
future behavioural intentions in service environments which lead to
the formulation of following hypothesis:
H2: Tourist satisfaction is positively related to tourist behavioural
intentions.
Furthermore, substantial empirical and theoretical evidence
in the literature suggests that there is a direct link between service
quality and behavioural intentions (Bitner, 1990, Bolton and Drew,
1991). Among the various studies related to behavioural intention,
considerable emphasis has been placed on the impact of service
quality in determining repeat purchase and customer loyalty (Jones
and Farquhar, 2003). As pointed out by Bolton (1998), service
quality inuences a customer’s subsequent behaviour, intentions and
preferences. Cronin and Taylor (1992, 1994) also found that service
quality has a signicant effect on repurchase intentions. Besides, many
other studies (Zeithaml, et. al., 1996, Cronin, et. al., 2000, Choi, et. al.,
2004) supported the notion that repurchase intentions are positively
inuenced by service quality. Hence, the following hypothesis has
been framed:
H3: Tourist behavioural intentions are directly and positively
inuenced by service quality.
Management & Change, Volume 19, Number 2 (2015)
32 An Empirical Assessment of Tourism Service Quality, Satisfaction and...
Many researchers (Anderson and Sullivan, 1993, Gotlieb et.
al., 1994, Roest and Pieters,1997) have investigated the relationship
between service quality, satisfaction and behavioral intentions and
suggested that service quality inuences behavioural intentions only
through value and satisfaction, while others argue that there is a direct
link between service quality and behavioural intentions (Parasuraman,
et. al., 1988, 1991, Bitner, 1990, Bolton and Drew, 1991, Boulding,
et. al., 1993, Taylor and Baker, 1994, Zeithaml, et. al., 1996). Besides,
many other studies (Cronin, et. al., 2000, Choi, et. al., 2004) supported
the notion that behavioural intentions are positively inuenced by
service quality. Based on the above cited literature, the following
hypothesis has been framed:
H4: Tourist satisfaction moderates (strengthens) the relationship
of tourism service quality and tourist behavioural intentions.
Figure 1: Conceptual Model of the Study
OBJECTIVES OF THE STUDY
In view of the increased signicance of tourism service quality to
the GDP of an economy (Tables 1-2), besides its direct link to tourist
satisfaction and behavioral intentions (Bitner, 1990, Bolton and Drew,
1991), present study is aimed to achieve the following objectives:
Management & Change, Volume 19, Number 2 (2015)
Mushtaq Ahmad Bhat, Nabina Qadir 33
• To study tourism service quality, satisfaction and behavioral
intentions in Kashmir;
• To measure the relationship between service quality, satisfaction
and behavioral intentions; and
• To offer suggestions, on the basis of study results, for improving
tourism service quality and tourist satisfaction so as to improve
tourist loyalty and improved protability.
RESEARCH METHODOLOGY
Sample Design and Data Collection
The study has been carried out in Kashmir. All the tourists
visiting Kashmir was the target population. By applying convenience
sampling technique, a sample survey of domestic and foreign tourists
of Kashmir valley was conducted during April 2012-March 2013. In
total, one thousand-seventy (1070) questionnaires were distributed
among the respondents at different tourist attractions like: Pahalgam,
Gulmarg, Sonamarg, Sinthan-top, Daksum, Mughal Gardens, etc.
After collecting responses, only one thousand-forty three (1043)
lled in questionnaires (727 from domestic tourists and 316 from
foreign tourists) were found usable for the purpose of analysis in this
study. In order to make sample representative of the population, due
care has been taken to ensure that respondents represent different
socio-economic groups classied on the basis of age, gender, income,
occupation, education etc.
Development of Research Instrument
The research instrument for the present study was a self-
administered questionnaire covering all the three variables. To
measure the service quality construct, the twenty-two (22) items
of SERVQUAL instrument was modied and rephrased to suit the
peculiar tourism environment in Kashmir (Mushtaq, 2012). In order to
measure the satisfaction construct, a scale developed by Westbrook and
Oliver (1991) for measuring consumer satisfaction has been adapted
(Greenwell, et. al., 2002a, Shonk, 2006, Huynh, 2010). However, for
Management & Change, Volume 19, Number 2 (2015)
34 An Empirical Assessment of Tourism Service Quality, Satisfaction and...
measuring behavioural intentions construct, the elements proposed
by Baker and Crompton (2000) have been used (Festus, et. al., 2006,
Shonk, 2006, Gonzalez, et. al., 2007, Huynh, 2010). All the items
in the questionnaire were then arranged alphabetically. Ten-point
scale, ranging from strongly disagree to strongly agree was applied
to measure the constructs. The purication of the scale was carried
out in two steps. In the rst step content and face validity was tested
through a panel of experts. As a result, the questionnaire was nalized
with 51 questions viz., 32 on service quality, 5 on satisfaction, 5 on
behavioral intentions constructs, and 9 on demographics. In the second
step, a pilot study was conducted on 50 respondents and Cronbach’s
alpha test was performed. The alpha scores for the constructs ranged
from 0.97 to 0.93. Thus, reected the adequacy of the reliability as
recommended by Nunnally (1978).
Data Analysis
The collected data, after sorting out for invalid questionnaires,
were coded and analyzed using Statistical Package for Social Sciences
(SPSS, version 20.0) software. The methods used for analysis are
described as follows:
Frequency Analysis
In order to analyze the background of respondents, frequency
analysis has been performed. Different socio-economic characteristics
like gender, age, education, income, occupation, length of stay, purpose
of visit and number of visits have been taken into consideration. The
study is based on a sample size of 1043 respondents which includes
727 (70 percent) domestic tourists and 316 (30 percent) foreign.
In terms of gender, the sample comprises of 63.1 percent males. A
considerable number of respondents (33.9 percent) belonged to the age
group of 30-40 years followed by 40-50 years (26 percent) whereas
lowest number of respondents (15 percent) belonged to the age group
of above 50 years followed by age group of up to 30 years (25.1
percent). Majority of the respondents (61.2 percent) are graduates
followed by post- graduates (23.1 percent) and undergraduates (15.7
percent) were the least. Respondents with monthly income of Rs
Management & Change, Volume 19, Number 2 (2015)
Mushtaq Ahmad Bhat, Nabina Qadir 35
20,001-40,000 p.m. were highest in number (34.4 percent) followed
by the respondents having monthly income of Rs 40,001-60,000
p.m.(27.6 percent), whereas respondents having monthly income
above Rs 60,000 p.m. were lowest in number (15.4 percent) followed
by respondents having monthly income up to Rs 20,000 p. m. (22.5
percent). Most of the sampled tourists were belonging to service class
(54.6 percent) followed by business (33 percent) and the least number
were professionals (12.5 percent). Respondents who stayed for 1-6
days in Kashmir were highest in number (43.7 percent) followed by
those who stayed for 7-12 days (34.3 percent) while as those who
stayed for more than 18 days were the least (6.1 percent) followed
by those who stayed for 13-18 days (15.8 percent). Majority of the
participants were leisure/holiday tourists (66.5 percent) followed
by pilgrimage tourists (13.1 percent) whereas tourists visiting for
business purpose were the least (6.6 percent) followed by sports
tourists (6.7 percent) and the tourists visiting friends/relatives (7
percent). However, most of the sampled tourists were rst time visitors
(61.6 percent) followed by second time visitors (26.7 percent) while
as least number of tourists was fourth time visitors (2.8 percent)
followed by third time visitors (8.8 percent).
Factor Analysis
In order to determine the dimensions of the 32 item service
quality scale, Exploratory Factor Analysis has been performed (Table
3). The study used R-mode Principal Component Analysis with a
Varimax Rotation and Eigen value equal to or more than 1. In order
to get clear factorial design, 3 items with factor loadings of less than
0.50 were dropped and loadings equal to or above 0.50 were retained
(Hair, et. al., 2006). The dropped questions were 3, 17 and 24 and
were labeled as: comfortable recreational facilities; professional,
polite and competent service personnel; and, provision of
information about local events and entertainment. The factor analysis
got completed in 8 iterations, identied 5 factors on service quality
construct consisting of 29 items and Explained 67.94% Variance. The
5 factors identied were labeled as per the items loaded onto it – F1-
‘Tangibility’, F2-‘Assurance’, F3-‘Reliability’, F4-‘Responsiveness’
and F5-‘Empathy’. Highest variance was observed on Tangibility
Management & Change, Volume 19, Number 2 (2015)
36 An Empirical Assessment of Tourism Service Quality, Satisfaction and...
(17.37%) and Assurance (16.33%) and as such these two dimensions
are considered as the most important determinants of tourism service
quality.
Table 3: Summary of the Results of Factor Analysis:
Dimensions, Factor Loadings, Communalities, Eigen Values,
Explained Variance and Cronbach’s Alpha
Items Factors Communalities
F1 F2 F3 F4 F5
1 TAN .720 .356 .397 .010 -.107 .815
2 ASS .242 .577 .134 .008 .273 .484
3 TAN .557 .110 -.359 -.299 .474 .766
4 REL -.141 .171 .854 .049 .142 .800
5 ASS -.104 .835 .206 .187 -.076 .792
6 REL .033 -.079 .714 .104 -.093 .537
7 EMP .432 .267 .246 .111 -.651 .755
8 REL .077 .403 .553 .355 -.029 .602
9 REL .313 .428 .576 -.155 .144 .657
10 ASS .031 .872 -.066 .122 .130 .797
11 TAN .661 .335 .301 .181 -.186 .707
12 REL .325 .342 .518 .447 .022 .691
13 EMP -.278 -.087 .007 -.124 .547 .400
14 REL .200 .526 .549 .277 .212 .739
15 TAN .772 .328 -.174 .050 -.067 .741
16 ASS .146 .797 .173 .066 -.028 .691
17 EMP .033 .309 .010 .195 .756 .706
18 TAN .724 .167 .233 .141 -.115 .639
19 TAN .710 .179 .341 -.203 .311 .791
20 ASS .268 .737 .075 -.284 -.016 .701
21 TAN .710 -.169 .260 .391 .014 .754
22 EMP .253 .168 .194 .051 .749 .693
23 RES .170 .001 .255 .513 .493 .600
24 REL .488 -.014 .637 .144 -.041 .666
25 TAN .686 -.094 -.244 .220 .089 .595
26 RES .482 .065 .159 .658 .009 .695
27 RES .191 -.133 .177 .679 -.128 .563
28 RES -.140 .168 -.088 .816 .122 .737
29 RES .099 .525 .257 .640 -.222 .810
Eigen Value 10.279 3.278 3.212 2.673 2.301 21.7431
Percentage of Total
Variance 17.374 16.332 13.521 11.582 9.139 67.9482
Cronbach’s Alpha 0.784 0.794 0.839 0.784 0.761 0.9493
Number of Items 8575 4 294
Note: 1 represents ‘Sum of Eigen Values’, 2 represents ‘Total Variance Explained’, 3 represents ‘Overall
Cronbach’s Alpha’ and 4 represents ‘Total Number of Items
Management & Change, Volume 19, Number 2 (2015)
Mushtaq Ahmad Bhat, Nabina Qadir 37
To measure the consistency of the scale in the present study,
Cronbach’s alpha test was used as a measure of reliability. The
reliability scores for all the extracted variables were found high. The
lowest range of Cronbach’s alpha for SERVQUAL was 0.761 for the
dimension of empathy and the highest was 0.839 for the dimension
of reliability. Nunnally (1967) suggested that a modest reliability
range for SERVQUAL instrument of between 0.5 and 0.6 would
be sufcient. Therefore, Cronbach’s alpha values of service quality
dimensions fulll the minimum requirement level of reliability.
The appropriateness of factor analysis was conrmed with the
help of Kaiser-Meyer-Olkin (KMO) measure of sampling adequacy
and Bartlett’s Test of Sphericity. The KMO measure of sampling
adequacy reported a value of 0.948 which is higher than the suggested
value of 0.6 (Tabachnik and Fidell, 2001).The Bartlett’s Test of
Sphericity revealed a Chi-square at 12158.612 (p<0.000 at 1% level)
which conrmed that the correlation matrix was not an identity matrix
(Table 4).
Table 4: KMO and Barlett’s Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy 0.948
Barlett’s Test of Sphericity (Approx. Chi-Square) 12158.612*
*At 1% Signicance Level
Data Analysis
In line with the objectives, the study is aimed to measure
the relationship between tourism service quality, satisfaction and
behavioural intentions. As stated earlier, all the three constructs were
measured on a ten point scale. Service quality scores were computed
by subtracting the mean scores of tourists’ expectations from the
mean scores of tourists’ perceptions. The element-wise service quality
scores were then averaged to determine the dimension-wise and
overall tourism service quality. Mean scores of tourist satisfaction
Management & Change, Volume 19, Number 2 (2015)
38 An Empirical Assessment of Tourism Service Quality, Satisfaction and...
were computed separately followed by the mean scores of tourist
behavioural intentions (Table 5). It is evident from Table 5 that
tourists perceived higher levels of service quality (0.43), were highly
satised (7.37) with the services provided by Kashmir valley as a
tourist destination and were positive (7.61) to repeat their visit and
recommend the destination to others to visit. The data was then put to
SPSS (version 20.0) to perform regression analysis and to determine
the strength of relationships.
Table 5: Overall Scores of Tourism Service Quality,
Satisfaction and Behavioural Intentions
Tourism Service Quality Score
Tangibility 0.31
Assurance 0.56
Reliability 0.40
Responsiveness 0.53
Empathy 0.37
Overall Tourism Services (Averaged on all
Dimensions) 0.43
Tourist Satisfaction
Overall, I am satised with tourism services in
Kashmir Valley. 7.51
My visit to Kashmir Valley exceeded my ex-
pectations. 7.25
I feel satised with the decision of visiting
Kashmir Valley. 7.42
My choice of visiting Kashmir Valley is wise. 7.39
In Kashmir, I feel at home. 7.30
Overall Tourist Satisfaction (Averaged on all
Elements) 7.37
Tourist Behavioural Intentions
I consider Kashmir Valley the rst on my list of
destinations. 7.54
I will rather pay a higher price than in other
destinations, because of the advantages Kash-
mir offers.
7.37
Management & Change, Volume 19, Number 2 (2015)
Mushtaq Ahmad Bhat, Nabina Qadir 39
I will speak highly of Kashmir Valley to my
friends and relatives. 7.68
I will encourage my family and friends to visit
to Kashmir Valley. 7.68
If I have to select again a destination, I would
choose Kashmir again. 7.78
Overall Tourist Behavioural Intentions (Av-
eraged on all Elements) 7.61
Note: - (authors own calculations based on eld data)
RELATIONSHIP BETWEEN TOURISM SERVICE QUALITY
AND SATISFACTION
In order to test hypothesis 1 (tourism service quality is positively
related to tourist satisfaction), simple linear regression analysis was
performed (Table 6).
Table 6: Linear Regression Analysis Results (Dependent
variable: Satisfaction)
Model Unstandardized Coefcients Standardized Coef-
cients T Sig.
B Std. Error Β
(Constant)
Service quality
6.018
1.838
0.029
0.030 0.882 210.498
60.312
0.000*
0.000*
RR2Adjusted R2F Sig
0.882 0.777 0.777 3.637 0.000*
*Signicant at 1% level
Note: - (authors own calculations based on eld data)
The ndings reveal an R2 (coefcient of determination) value of
0.777 which indicates that 77.7 % variance in satisfaction is explained
by service quality. Moreover, positive beta coefcient of 0.882 with
signicant (p<0.001) t-value conrms that tourism service quality
is positively, signicantly and strongly related to tourist satisfaction
meaning thereby that higher levels of tourism service quality result
in higher levels of tourist satisfaction. Therefore, hypothesis 1 is
accepted.
Management & Change, Volume 19, Number 2 (2015)
40 An Empirical Assessment of Tourism Service Quality, Satisfaction and...
In addition to above, Multiple Linear Regression analysis was carried
out to determine the signicance of each service quality dimension
in determining tourist satisfaction in Kashmir.
Table 7: Multiple Linear Regression Results (Dependent
variable: Satisfaction)
Model
Unstandardized
Coefcients
Standardized
Coefcients
t Sig.
Collinearity Statistics
B
Std.
Error ΒTolerance VIF
(Constant)
Tangibility
Assurance
Reliability
Responsiveness
Empathy
6.039
0.358
0.272
0.414
0.347
0.441
0.031
0.039
0.046
0.051
0.050
0.046
0.200
0.145
0.222
0.189
0.249
197.052
9.138
5.892
8.167
6.950
9.664
0.000*
0.000*
0.000*
0.000*
0.000*
0.000*
0.443
0.353
0.287
0.288
0.322
2.256
2.836
3.485
3.467
3.107
R
0.883
R2
0.779
Adjusted R2
0.778
F
731.821
Sig
0.000*
*Signicant at 1% level
Note: - (authors own calculations based on eld data)
The results in Table 7 indicate that out of ve service quality
dimensions, Empathy [β (0.249, p<0.001)] and Reliability [β
(0.222, p<0.001) dimensions have the most signicantimpact on
tourist satisfaction followed by Tangibility [β (0.200, p<0.001)]
and Responsiveness [β (0.189, p<0.001)]. The ve service quality
dimensions have also been tested for multicollinearity issues (Table
7) with the help of tolerance and Variance Ination Factor (VIF).
The tolerance scores range from 0.287 to 0.443, were above the
suggested cut off value of 0.20 (Fox, 1991, Tabachnick and Fidell,
2001). Also, the VIF scores were less than the threshold value of 4
(Hair, et. al., 1995) indicating that variables have not been affected
by multicollinearity problem.
Relationship between Tourist Satisfaction and Tourists’
Behavioural Intentions
In order to test hypothesis 2 (tourist satisfaction is positively
related to tourists’ behavioural intentions), simple linear regression
Management & Change, Volume 19, Number 2 (2015)
Mushtaq Ahmad Bhat, Nabina Qadir 41
analysis has been used. The ndings [F (2.919, p< 0.001); R2 (0.737);
β (0.859); t-value (54.029, p<0.001)] reveal that tourist satisfaction is
signicantly, positively and strongly related to tourists’ behavioural
intentions (Table 8) meaning thereby that higher levels of tourist
satisfaction result in positive tourist behavioural intentions in the form
of repeat visits and recommendation. Therefore, H2 is accepted.
Table 8:-Linear Regression Analysis Results (Dependent
variable: Behavioural Intentions)
Model Unstandardized Coefcients Standardized Coefcients t Sig.
B Std. Error Β
(Constant)
Satisfaction
4.252
0.506
0.066
0.009
0.859
64.534
54.029
0.000*
0.000*
RR2Adjusted R2F Sig
0.859 0.737 0.737 2.919 0.000*
*Signicant at 1% level
Note: - (authors own calculations based on eld data)
Relationship between Tourism Service Quality and Tourists’
Behavioural Intentions
While testing Hypothesis 3 (tourism service quality is positively
related to tourists’
Table 9: Linear Regression Analysis Results (Dependent
variable: Behavioural Intentions)
Model Unstandardized Coefcients Standardized
Coefcients t Sig.
B Std. Error Β
(Constant)
Service
Quality
7.295
0.939
0.023
0.025 0.764 316.275
38.189
0.000*
0.000*
RR2Adjusted R2F Sig
0.764 0.584 0.583 1.458 0.000*
*Signicant at 1% level
Note: - (authors own calculations based on eld data)
Management & Change, Volume 19, Number 2 (2015)
42 An Empirical Assessment of Tourism Service Quality, Satisfaction and...
behavioural intentions), the results (Table 9) of regression analysis [F
(1.458, p<0.001); R 2 (0.584); β (0.764); t-value (38.189, p<0.001)]
reveal that tourism service quality is directly, positively and
signicantly related to tourist behavioural intentions which indicates
that higher levels of tourism service quality lead to positive intentions
of tourists to return and recommend the destination to others to visit.
Therefore, hypothesis 3 is accepted.
In addition to linear regression above, Multiple Regression analysis
(Table10) was carried out to examine the signicance of each service
quality dimension in determining tourists’ behavioural intentions. The
regression coefcients indicate that Tangibility [β (0.247, p<0.001)]
and Reliability [β (0.230, p<0.001)] dimensions have the most
signicant impact on overall tourist behavioural intentions, followed
by Empathy [β (0.186, p<0.001)] and Assurance [β (0.111, p<0.001)]
respectively.
Table 10: Multiple Linear Regression Results (Dependent
variable:Behavioural Intentions)
Model
Unstandardized
Coefcients
Standardized
Coefcients
t Sig.
Collinearity
Statistics
B
Std.
Error ΒTolerance VIF
(Constant)
Tangibility
Assurance
Reliability
Responsiveness
Empathy
7.323
0.260
0.123
0.253
0.110
0.195
0.025
0.032
0.037
0.041
0.040
0.037
0.247
0.111
0.230
0.101
0.186
296.752
8.240
3.294
6.189
2.732
5.306
0.000*
0.000*
0.000*
0.000*
0.000*
0.000*
0.443
0.353
0.287
0.288
0.322
2.256
2.836
3.485
3.467
3.107
RR2Adjusted R2F Sig
0.767 0.588 0.586 296.486 0.000*
*Signicant at 1% level
Note: - (authors own calculations based on eld data)
Relationship between Tourism Service Quality, Satisfaction and
Behavioural Intentions
One of the hypotheses (H4) in the study was that tourist
satisfaction moderates (strengthens) the relationship of tourism
Management & Change, Volume 19, Number 2 (2015)
Mushtaq Ahmad Bhat, Nabina Qadir 43
service quality and tourist behavioural intentions. Since, many
researchers (Sharama, et. al., 1981, Cronbach, 1987, Aiken and West,
1991, Taylor and Baker, 1994, Aydin, et. al., 2005) agree that one
of the clearest ways to test moderating effect is using a hierarchical
regression analysis based on Baron and Kenny’s (1986) methodology.
Thus, hierarchical analysis using regression models was considered
an appropriate approach in this study.
Before performing regression analysis, a new variable to represent
the interaction is computed by forming the product of service
quality and satisfaction constructs (service quality × satisfaction).
After forming the interaction term, the data was rst explored using
bivariate correlation analysis. Since, independent variables (service
quality and satisfaction) were highly correlated (Table 11) in the
present study, multicollinearity issues need to be tested (Tabachnick
and Fidell, 1996).
Table 11: Correlations
Service Quality Satisfaction Behavioural
Intentions
Inter_sq_sat
Service Quality Pearson Correlation 1 .882** .764** .912**
Sig. (2-tailed) .000 .000 .000
N 1043 1043 1043 1043
Satisfaction Pearson Correlation .882** 1 .859** .869**
Sig. (2-tailed) .000 .000 .000
N 1043 1043 1043 1043
Behavioural
Intentions
Pearson Correlation .764** .859** 1.770**
Sig. (2-tailed) .000 .000 .000
N 1043 1043 1043 1043
Inter_sq_sat Pearson Correlation .912** .869** .770** 1
Sig. (2-tailed) .000 .000 .000
N 1043 1043 1043 1043
**. Correlation is signicant at the 0.01 level (2-tailed).
Note: - (authors own calculations based on eld data)
The assumption of multicollinearity was checked from the collinearity
diagnostics in the SPSS, using tolerance and Variance Ination Factor
(VIF). Commonly, VIF values closer to 10 and tolerance values less
than 0.20 indicate serious problems of multicollinearity (Fox, 1991;
Hair, et. al., 1995; Tabachnick and Fidell, 2001).
Management & Change, Volume 19, Number 2 (2015)
44 An Empirical Assessment of Tourism Service Quality, Satisfaction and...
Table 12: Collinearity Statistics (Dependent Variable: Behavioural
Intentions)
Model Tolerance VIF
Service Quality
Satisfaction
Inter_sq_sat
0.136
0.197
0.150
7.331
5.073
6.676
Note: - (authors own calculations based on eld data)
As can be seen in Table 12 that VIF scores for all predictor
variables range from 5.073 to 7.331 (closer to 10), and tolerance values
were less than suggested cut off value (0.20), indicating that variables
were affected by multicollinearity problem. In order to overcome this
multicollinearity problem, the values of independent (service quality),
moderating (satisfaction) and dependent (behavioural intentions)
variables were centered. That is, the mean value of each variable
was subtracted from the respected values of the variables. Kim et.
al., (2001) and Keith (2006) suggested that multicollinearity may
be reduced by centering the values of the variables. After centering
the variables, a new interaction term was formed by multiplying
centered independent variable (centered service quality) with
centered moderator variable (centered satisfaction). For conrming
moderating effect, this interaction term should be signicant and
explain incremental variance in the dependent variable beyond the
main effects (Aiken and West, 1991). Hierarchical regression analysis
was then performed in three steps (Table 13).
Management & Change, Volume 19, Number 2 (2015)
Mushtaq Ahmad Bhat, Nabina Qadir 45
Table 13: Hierarchical Regression Analysis
Model
Unstandardized Coef-
cients
Standardized
Coefcients
t Sig.B Std. Error Beta
1 (Constant)
Cent_Service Quality
-1.786
0.939
0.020
0.025 0.764
0.000
38.189
0.999
0.000
2 (Constant)
Cent_ Service Quality
Cent_Satisfaction
8.021
0.038
0.490
0.016
0.041
0.020
0.031
0.831
0.000
0.912
24.680
1.000
0.362
0.000
3 (Constant)
Cent_Service Quality
Cent_Satisfaction
Int_Cent_sq_sat
-0.039
0.144
0.481
0.031
0.020
0.053
0.020
0.010
0.117
0.816
0.088
-1.917
2.701
24.070
3.153
0.056
0.007
0.000
0.002
Model R R2Adjusted R2
1
2
3
0.764a
0.859b
0.860c
0.584
0.737
0.740
0.583
0.737
0.739
a. Predictors: (Constant), Cent_ Service Quality
b. Predictors: (Constant), Cent_ Service Quality, Cent_Satisfaction
c. Predictors: (Constant), Cent_ Service Quality, Cent_ Satisfaction, Int_Cent_sq_sat
Note: - (authors own calculations based on eld data)
First, the centered dependent variable (tourist behavioral
intentions) was regressed on the centered independent variable
(tourism service quality). Second, the centered independent and
moderator (tourist satisfaction) variables were entered. In the third
step, interaction term (centered service quality × centered satisfaction)
with centered independent variable and centered moderator variable
was included.
As can be seen in Table 13 that R2 changes from 0.584 to 0
.740 and explains incremental variance after the interaction term is
included. Thus, it can be concluded that tourist satisfaction moderates
(strengthens) the relationship of tourism service quality and tourists’
behavioural intentions. Therefore, hypothesis 4 is accepted. This
moderation effect was further conrmed with the help of interaction
plot (Fig.1).
Management & Change, Volume 19, Number 2 (2015)
46 An Empirical Assessment of Tourism Service Quality, Satisfaction and...
Figure 2: Interaction Plot
(authors own calculations based on eld data)
CONCLUSION AND SUGGESTIONS
The major focus of the research was on to study the quality
of tourism services, tourist satisfaction and tourist behavioural
intentions. The analysis clearly reveals that tourists perceived higher
levels of tourism service quality (0.43) were highly satised (7.37)
with the services in Kashmir and were positive to repeat their visits
and recommend the destination to others to visit (7.61). As mentioned
earlier, the study employed modified SERVQUAL instrument
(Mushtaq, 2012) for determining overall quality of tourism services
and identied ve dimensions – Tangibility, Assurance, Reliability,
Responsiveness and Empathy with 29 statements. The results have
conrmed that out of ve tourism service dimensions, assurance
(0.56) and responsiveness (0.53) dimensions are the signicant
contributors of overall tourism service quality followed by, Reliability
(0.40), Empathy (0.37) and Tangibility (0.31) respectively. Therefore,
the study lead to the conclusion that there are some deciencies in the
quality of tourism services on tangibility and empathy dimensions
where service quality scores (0.31, 0.37) are relatively low. Therefore,
this nding suggests substantial investment on physical aspect of
tourism services, like bringing modern and technologically relevant
vehicles, improving quality of food and beverages, ensuring neat
and clean environment and tidiness of staff, providing proper health
care facilities, and, providing diversied services based on individual
Management & Change, Volume 19, Number 2 (2015)
Mushtaq Ahmad Bhat, Nabina Qadir 47
needs of the tourists.
Moreover, the results brought to light that tourism service quality
is positively related to tourist satisfaction and tourist behavioural
intentions. These ndings are consistent with the studies which
demonstrated that service quality is positively, signicantly, strongly
and directly related to satisfaction (Cronin and Taylor, 1992, Oliver,
1993, Bitner and Hubbert, 1994, Gotlieb, et. al., 1994, Liu and
Yen, 2010, Chen, et. al., 2011, Shing, et. al., 2012) and behavioural
intentions (Getty and Thompson, 1994, Cronin, et. al, 2000,Cho, et.
al., 2004, Hu, et. al., 2009, Clemes, et. al., 2009, Chen and Chen,
2010, Wu, 2013). The results conrmed that Empathy (β=0.249)
dimension is a major contributor of overall tourist satisfaction while
as Tangibility dimension (β=0.247) is a most signicant predictor
of tourist behavioural intentions. Moreover, tourist satisfaction as
an independent and moderator variable has been found as positively
and strongly related to tourist behavioural intentions. According
to regression results (Table 13), interaction term (Service Quality
× Satisfaction) has a stronger effect on behavioural intentions
(R2=0.740) than service quality and satisfaction indicating that
satisfaction moderates (strengthens) the relationship of service quality
and behavioural intentions. These ndings support other researchers
(Woodside, et. al., 1989, Bou, et. al., 2001, Gonzalez, et. al., 2007,
Lien, 2010) who stated that the relationship between service quality
and behavioural intentions can be direct, indirect or moderated by
other variables. Thus, it can be concluded as: the higher the level
of tourism service quality, the higher will be the level of tourist
satisfaction and the more positive the intentions of the tourists to
revisit or return to same destination would be. Also, higher levels
of tourism service quality bring about more favourable behavioural
intentions if tourists would be highly satised /delighted with those
services. Therefore, tourism managers should not only focus on
improving service quality but also nd ways to create customer
delight which ultimately results in positive word of mouth, repeat
visits, recommendations and improved protability.
Management & Change, Volume 19, Number 2 (2015)
48 An Empirical Assessment of Tourism Service Quality, Satisfaction and...
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Management & Change, Volume 19, Number 2 (2015)
FUND MANAGEMENT AND RISK MANAGEMENT
PRACTICES AT MUTUAL FUNDS IN INDIA
R Srinivasan1 Raj S Dhankar2
The mutual funds industry, despite being ve decades old, has not
taken off in India. The research work was initiated with the objective
of getting insight into the operational aspects of a Mutual Funds
Company functioning in India, and the risk management practices
followed by them. This work is based on review of existing literature
on the risk management practices across the globe, and one to one
interaction with the fund managers working with different fund houses
in India. It was observed through this research study that there is lack
of transparency and blatant mis-selling by fund houses. Algorithm
and High Frequency Trades have only helped increase volatility. To
manage risk fund houses, resort to information based risk mitigation
practices; and also estimate risk using ‘Tracking Error’ mechanism
which are widely practiced in the mutual funds industry, and also
is advocated by Security Exchange Board of India (SEBI). But, the
researcher feels that the fund managers could adopt more robust
quantitative technique like Value at Risk (Var) for estimation of risk
and risk management. Investor education, greater awareness, and
stronger regulations may also be helpful in building the investor
condence on the capital markets.
Keywords: Risk Management, Fund Management, Mutual Funds,
Value at Risk, Asset Management Company
BACKGROUND
Risk is a function of change, and in managing investments, when
this change gets more frequent and rapid we need to manage with
techniques for coping with the effects of change (Crockford, 2005).
Although in modern parlance the term risk has come to mean ‘danger
of loss’, nance theory denes risk as the dispersion of unexpected
1 Professor, Finance, Accounting & Control Area, IILM Institute for Higher Education, 3 Lodhi
Institutional Area, New Delhi – 110003, India. Email: r.srinivasan@iilm.edu
2 Vice Chancellor, Ansal University, Sector-55, Golf Course Road Gurgaon 122003, Haryana (In-
dia). Professor, Faculty of Management Studies (FMS) University of Delhi, India. Email: rajsdhan-
kar@gmail.com
Management & Change, Volume 19, Number 2 (2015)
60 Fund Management And Risk Management Practices ...
outcomes owing to movements in nancial variables; thus viewing
both positive and negative deviations as sources of risk (Jorion,
2007). Risk is the volatility of unexpected outcomes, generally in the
value of assets or liabilities of interest (Jorion, 2002). Financial risk
is often dened as the unexpected variability or volatility of returns;
and thus includes both potential worse-than-expected losses as well
as better-than-expected returns. Since Markowitz’s (1952) seminal
work on nancial volatility, the variance (or, equivalently, standard
deviation – σ) of a random return/loss has been frequently used as a
measure of risk.
Financial instruments generally involve risk. Investment in shares
involves business risk, investments in bonds involve interest rate risks,
investments in currencies involve exchange rate risks, and investments
in xed deposits involve risk of default. As mutual funds invest its
corpus in all these risky assets, investment in mutual funds is the sum
of all the above risks. Mutual funds are managed by professionals,
who pick and select securities and try to mitigate risk by investing the
funds collected from the public in diverse high yielding securities, so
as to provide good returns.
The objective of pursuing this research is to take a peep into the
investment and risk management practices pursued by the mutual
fund managers in India and across the globe. The research work also
proposes to suggest alternative ways to estimate risk, so that effective
risk mitigation is possible.
To meet this end, the existing literature has been reviewed has
reviewed to elucidate the risk management tools and techniques used
for risk estimation. Besides, interviews hen conducted with four fund
managers from three different Mutual Fund houses for getting the
insider view of the functioning of the mutual fund houses in India.
The paper is organized in six chapters. Section two gives an
overview of the mutual funds in India, and how it has evolved over the
years. In section three, literature from the existing published work is
reviewed to gain knowledge about risk estimation tools and processes.
In section four “Tracking Error” mechanisms, advocated by SEBI,
has been discussed, to understand this tool vis-à-vis other quantitative
Management & Change, Volume 19, Number 2 (2015)
R Srinivasan, Raj S Dhankar 61
techniques suggested by researchers across the globe. Section ve gives
an insight of the functioning of a fund management team, to give an idea
about how investment decisions are made, how investment objectives
are set by the fund management team, and, what it does to manage
and mitigate risk. The ndings and discussions have been concluded
in section six.
MUTUAL FUNDS (MF) IN INDIA
In most developed markets, the mutual fund companies and
pension funds come to the rescue of its senior citizens during their
twilight years. Despite being the best investment alternative for the
post-retirement nancial needs of a individual, as per data compiled
by Investment Company Institute, USA, India’s Gross Domestic
Product-Asset Under Management (GDP-AUM) ratio stands at 7% in
comparison to the global average of 33.7%. But, in India the situation
is not very encouraging, despite it being more than ve decades old. A
study conducted in the city of Agra, India reveals that the majority of
investors lack awareness about the concept and working of the mutual
funds (Parihar, Sharma & Singh, 2009). Another study, among the
mutual fund investors in India about the risk perception on mutual funds
reveals that the investors do not carry any difference in risk perception
about any two different mutual fund schemes (Luis & Cristina, 2005).
Investors’ approach to mutual funds in India is that they invest in them
with an understanding that they are safe portfolios which would give
them better return, and is bereft of any risk (Zafar, Chaubey & Hasan,
2011).
Figure 1: Asset Under Management-GDP Ratio across
Countries
Source: Investment Company Institute, USA
Management & Change, Volume 19, Number 2 (2015)
62 Fund Management And Risk Management Practices ...
Fig. 2 below depicts some of the important milestones in the history
of mutual funds in India.
Figure 2: Fifty Years of Mutual Funds in India
Growth in aggregate Asset Under Management (AUM), over the years,
with all the fund houses had been sluggish. But, at the turn of the
century, sentiments turned positive and investments in mutual funds
gathered momentum. Fig. 3 shows the pattern of growth in AUM over
the years, crossing Rs. 5 trillion mark for the rst time in 2010, and
then it crossed Rs. 10 trillion mark in the year 2014. However, the ride
has not been smooth.
Figure 3: Total AUM since 1970
Source: Reserve Bank of India
Management & Change, Volume 19, Number 2 (2015)
R Srinivasan, Raj S Dhankar 63
As per SEBI (Mutual Funds) Regulations, 1996, the mutual fund
companies consist of a sponsor company, which appoints trustees for
the supervision and management of the trust; the Asset Management
Company (AMC), which constitutes of professionals, are responsible
for launching of New Fund Offers (NFO), and for conduct of day-to-
day business of the business. The nancial assets of the trust are vested
with a separate entity called the custodian; which is responsible for
safety of the nancial instruments bought by AMCs, and for proper
upkeep of books of accounts of the fund house. The custodians also
act as transfer agents, and interface with the unit-holders. This 3-tier
structure in Indian mutual fund industry has been instituted to protect
the investor pool, as well as to eliminate fraud.
Mutual Funds are categorised based on maturity period as open
ended, where entry and exit can be at will; and close ended schemes
that have a stipulated maturity period, and are open for subscription
only during a specied period. Units of a MF scheme can be bought at
the face value at the time of NFO or at NAV of older schemes. Some
of the schemes are listed below in table 1 based on the objectives and
duration.
Table 1: Summary of Various Funds and their Investment
Objectives
Objective Scheme Type Time Horizon Risk
Prole
Typical Investment Pattern
Open Close Eq-
uity
(%)
Debt
(%)
Money
Market
Inst. &
Others
Money Market Yes No Short-Term Low 00-20 80-100
Income Yes Yes Medium to
Long-Term
Low to
Me-
dium
080-
100
0-20
Growth Yes Yes Long-Term High 80-
100
0-20 0-20
Balanced Yes Yes Long-term Me-
dium to
high
0-60 0-40 0-20
Tax Saving Ye s Ye s Long-term High 80-
100
0-20 0-20
Management & Change, Volume 19, Number 2 (2015)
64 Fund Management And Risk Management Practices ...
Investment in mutual funds involves risk; hence active
management of risk is expected from the management of mutual funds.
This is where the skill of the fund manager assumes importance. Huang,
Sialm, & Zhang, (2007) opine that the experience and expertise of
fund managers, their sound security selection skills and the ability to
time their buying and selling, help in building a strong portfolio of
securities, with the potential to fetch higher risk-adjusted returns.
Loth (2009) also advocates that a fund’s investing style, growth,
risk and return prole, trading activity, costs and performance are all
a product of management’s efforts, but how a fund manager is able to
score in all these areas is even more important parameter.
LITERATURE REVIEW
An important method of risk mitigation is by diversication.
By carefully choosing and picking investments, certain risks can be
mitigated. For eliminating other kinds of risk there are derivative
instruments. Some researchers advocate the use of data analytics for
understanding nancial risk and manage them by predicting risk. The
General Autoregressive Conditional Heteroskedastic (GARCH) models
have been found useful in predicting risks, when highly volatile values
are immediately followed by high volatility and low volatile values are
followed by low volatile trades (Nelson, 1991).
JP Morgan (1995), proposed the Risk Metrics exponential
weighted moving average model (EWMA) to estimate this time-
varying conditional volatility. Garcia, Renault, & Tsafack (2007)
argued the rationale for decentralized risk management, and make their
point that individual traders possess richer information on their specic
market segment to fetch superior returns and better control over risk.
Wilson, Nganje and Hawes (2007), applied Value-at-Risk methods
to a bread baking company and observed that Value-at-Risk, when
complemented with management goals, competition, and conduct
within the industry, provides an effective tool in setting risk limits.
Rosenberg (1979) opines that active management offers a potential
for superior reward when superior information is available, but it also
increases portfolio risk. A study on US mutual funds from 1984 to 1999
Management & Change, Volume 19, Number 2 (2015)
R Srinivasan, Raj S Dhankar 65
has revealed better risk-adjusted returns from actively managed funds,
and holding portfolios concentrated in a few industries (Kacperczyk,
Sialm, & Zheng, 2005). It is observed that due to heterogeneous risk-
taking by funds, a sizable minority of fund managers have the ability
to pick stocks well enough to provide better risk-adjusted and cost-
adjusted returns (Kosowski, Timmermann, Wermers, & White, 2006).
The performance and survival of a mutual fund has more to do with
relative risk; and the risk taking capability of a fund manager is driven
more by the relative peer performance, excess volatility and age of the
fund; and that the older the fund, there is more likelihood of its survival
than its newer competitors (Brown, Goetzmann, & Park, 2001).
Binsbergen, Brandt, & Koijen (2008) while deriving an
unconditional linear performance benchmark, observe that
decentralization of investment management may lead to uncertainty
about the risk apetite of FMs in team, which may increase cost of
decentralized management as well as the value of an optimally designed
bechmark. A quantitative model called ω-score, demostrated that there
is an interrelationship between operational risk and nancial risk; but
the former is more likely to lead to failure of a fund house than the latter
(Brown S. , Goetzmann, Liang, & Schwarz, 2009).A study on large US
equity mutual funds on the performance of the FMs and concluded
that FM do not rely too much public information for their investment
decisions (Seru & Kacperczyk, 2007).
Cremers & Petajisto, (2009) observded that active shares, the
ones that are different from that of bench mark indices, were found to
outperform the benchmark index. Research has also shown that FMs are
in a position to withstand occasional penalties, due to their risk-taking
capabilities and higher returns for the fund house (Golec, 1988). Timing
the market can be an important attribute of an FM. Raju & Rao (2009)
while analysing Indian Stock Market Indices, viz., NSE’s Nifty, and
BSE’s Sensex, conclude that FMs are not seriously engaged in any market
timing; but concentrate more on stock selection skills. Busse (1999)
argues that timing the market is an important factor in providing higher
risk-adjusted returns, and such funds are likely to survive longer.
Most mutual fund managers tend to track the benchmark index,
Management & Change, Volume 19, Number 2 (2015)
66 Fund Management And Risk Management Practices ...
only a few tend to shun glamour stocks for growth stocks (Chan, Chen,
& Lakonishok, 2002). Ammann & Verhofen (2007) using a dynamic
Bayesian network, successful performers in the previous year, are
more actively into fund management and tend to take more risk in the
following year. These actions on the part of FMs are likely to increase
volatility, beta, and tracking error. However, Chevalier & Ellison (1999)
have concluded that younger managers hold less unsystematic risk and
have more conventional portfolios.
Evans (2008) examined the FM’s personal holding in a fund
managed by him, and observed that FMs become more responsible
and disciplined when their own stakes are higher. Due to some
investment biases, as the size of the asset under management (AUM)
increases, there is a tendency on the part of the FMs to increase the
concentration of investments in a limited number of stocks, which
may in the long-run, lead to reversal in fund performance (Bernhardt
& Davies, 2009). Poor performance of an FM during the mid-year
review is likely to instigate the FM into manipulating the fund risks
to a greater extent, causing the volatility of the portfolio to increase
(Brown, Harlow, & Starks, 1996). Koski & Pontiff, (1999) investigated
the use of derivatives for hedging purposes, and concluded that neither
there is a better risk management nor the returns are higher. Benson,
Brailsford, & Humphrey (2006) show that there is little difference in
the stock-picking ability of a conventional fund manager, and socially
responsible investment (SRI) managers.
TRACKING ERROR
Fund houses use ‘Tracking Error’ technique for measuring risk.
‘Tracking Error’ is dened as the annualized standard deviation of
the difference in return between the Index fund and its target index”
(IIS&PL, 2014). Tracking Error is calculated as follows:
‘TE’ is Tracking Error; ‘RP’ is return of the manager or the fund;
‘RI’ is return on the benchmark index; ‘N’ is the number of return
periods.
Management & Change, Volume 19, Number 2 (2015)
R Srinivasan, Raj S Dhankar 67
THE INSIDE STORY IN AN ASSET MANAGEMENT
COMPANY
To do the reality check and to understand the risk management
practices interviews of a few members from the investment team of
three different fund houses were conducted. Four fund managers agreed
to cooperate on the condition of anonymity. Three were male members,
who were directly handling funds, and there was one female member,
who was part of the research team. The three male members were the
FMs. One fund house was a joint venture between a commercial bank
in India and a foreign AMC, and the remaining two were private sector
funds. Between them, the FMs ranged from about Rs. 100 crores to
above Rs. 600 crores. The female member was not an FM, but part of
the investment team.
Generally, the fund management team consists of a CIO, FMs,
Dealers, and Research team consisting of statisticians and economists.
The teams are constituted of 10 to 15 members. Every scheme is
allocated to a separate fund management team; with separate CIOs
assigned for equity and debt schemes. However, one investment team
can be assigned more than one scheme. Risk guidance is provided by
the risk team that functions independent of the investment team, with
regular coordination between the two teams. Normally risk boundaries
are dened at the beginning of each year, with interactions as and when
required. Day-to-day fund and risk management is discussed in the
daily meetings of the investment team.The deliberations with the fund
manager are reproduced hereunder. Mutual funds should be looked at
from a longer time horizon of at least 3 years; but an investment horizon
of 5-years or more is always better to get a risk-adjusted return of 15
percent. A proper research before choosing a scheme ensures good
returns.
Mutual fund schemes are well diversied, with each consisting of
30 to 45 stocks. No two schemes offered by a mutual fund company
can have the same theme. As per SEBI regulations (2012), not
more than 25% of any scheme’s amount can be invested in a single
sector, and not more than 10% in a single stock. To check for any
violations, circuit-breakers are set; which when triggered, positions
Management & Change, Volume 19, Number 2 (2015)
68 Fund Management And Risk Management Practices ...
are liquidated. Investment decisions and composition of securities are
that of FMs. Normally any scheme’s top 15 stocks constitute 80%
of the fund value and contribute maximum to the scheme’s prots;
and the remaining 30 odd stocks form the remaining 20% of the fund
value.
Outperformance target is dened as the return percentage a fund
manager is expected to give over and above the benchmark returns.
Normally, S&P-BSE-100 is the benchmark index against which the
FM’s performance is measured. For thematic funds, the specic
sectoral index is set as benchmark. At the beginning of each year,
the outperformance targets of the teams are decided in the meeting of
investment and risk management teams. The higher the outperformance
target, less stringent is the risk limit and risk assessment. An FM
having an outperformance target of 8% will be less critically assessed
in comparison to another FM having a 5% target. Covrig, Lau &
Source, (2006) believe that a fund manager’s performance gets
inuenced by the geographic allocations of the fund’s investments.
In India investments can be made in long only securities, and short
selling is not permitted; hence, risk control is somewhat less stringent.
Limits to holding cash are pre-set and differ from fund to fund.
FMs take investment decisions with long-term perspective, and
do not indulge in any speculative activities. Undervalued securities
are identied based on fundamentals. The identied company is
chosen based on factors like P/E ratio (historical, current & global),
P/B ratio, EBDITA (when large debt position exists in the company),
its market capitalization, discounted cash ow, shareholding pattern
of the promoters, etc. The FMs make use of information from annual
reports, quarterly press releases, reports of independent research
analysts, etc. They also attend investor meets, and if required also
interact with promoters during these meets. In some cases may also
visit the companies to have a look at its facilities. As these are long
drawn processes and it takes a lot of time for an undervalued stock
to come to become an outperformer, it does not make sense for an
FM to indulge in speculative short-term trading. The securities are
liquidated once the target returns are achieved. The FMs also shared
that as the fund houses invest in a minimum terms of tens of thousands
Management & Change, Volume 19, Number 2 (2015)
R Srinivasan, Raj S Dhankar 69
of shares, liquidity plays a very important role. Instruments that take
more than 10 to 12 days to liquidate are considered to be unsafe, and
are not considered for investments.
The risk assessment in the fund house is performed through
Tracking Error method as discussed above, which is a globally accepted
risk measurement technique. Most AMCs do not follow any other
quantitative technique for risk measurement. On daily basis the
investment teams meet to take stock of the market conditions, and
to iron out issues that are of immediate concern, and address them.
Investments in large cap stocks are considered to be safe, and any loss
in such stocks does not attract too much criticism. However, investment
in smaller, lesser known companies remains the focal point in the
meetings, and is viewed critically. The FM is individually answerable
for the risks associated with those stocks. If there are losses from
such securities, it does not augur well for the team’s interests. As per
regulations, to contain excessive variation in returns, investments in
derivatives are not permitted in funds like Equity Linked Savings
Schemes (ELSS).
The female member, who was part of research team, conrmed that
picking up equity stocks is a long drawn process and is purely based on
fundamentals of a company; and speculative investments are considered
against the investor’s interests. She advised against the investors going
for direct investments into equities, as investments in securities by
mutual funds, undergo a rigorous and time consuming process. A lot
of information about the securities and knowledge about the markets is
required for proper decision making. Investments purely based on public
information may not be enough. One needs to maintain work ethic too,
in the portfolio management process; else one may be left with deep
wounds.
She reiterated that for individual investors, the mutual fund is the
safer route; but one needs to exercise immense caution. She conrmed
the existence of preference for new fund offers (NFOs), due to its lower
price of units; but, opined that “Price is what you pay”, and “Value is
what you get”. Low price is not necessarily low in value. Investors
should rather look at the past performances of the fund and the fund
Management & Change, Volume 19, Number 2 (2015)
70 Fund Management And Risk Management Practices ...
manager, for making value investments. FMs with good track record
are more likely to continue give better than market returns, irrespective
of how costly the NAV of the fund may have become. A fund with a
decent history and having a track record of beating the market in about
three out of every four years is likely to continue performing well, rather
than a new scheme or a new fund house. The investor should also make
comparisons among different better performing funds, before taking their
nal call. She added that investors should have a mix of MF schemes,
like pure equity funds, sectoral funds, balanced funds, pure debt funds,
etc., to benet out of cyclical up and downturns.
Yet another FM talked about the prot making from front-running
trades. Some FMs indulge in placing his personal order just before
executing a big order for his AMC, for buying the same scrip. As the
big orders will lead to an increase in demand and a marginal hike in
security price; the FM later sells the same scrip at a marginally higher
price, to generate a small prot for himself. If front-running is resorted
to several times in a year, it could accumulate into a big prot for the
FM. Though, it is not an illegal practice, but is unethical, and articially
jacks up the market price of the scrip in the market. Front-running trades
are very sparsely prevalent practice as there are many internal checks
and controls within an AMC. But, he shared an important information
about front-running trades, learnt from his overseas friends. Of late,
especially after 2008, many highly paid, and highly trained super brains
from the nancial sector, lost jobs, due to closure of several big nancial
companies. They developed softwares to execute front-running trades,
and are raking in billions of dollars. These software driven trades is
called algorithm trading (Sraeel, 2009).
The front-running trade executed using softwares, and turbo-
charged computers, on high-speed computer networks is called high
frequency trading (HFT). HFTs, benet by obtaining early information
about others’ orders, by intercepting and receiving trading data a few
milliseconds ahead of someone else, practically rigging the stock market
to the disadvantage of other players, especially the smaller investors,
who are connected through slower networks. These are technology
driven, so in matured markets like USA and Europe, these kinds of trades
happen, hundreds of thousands of times a day, generating billions of
Management & Change, Volume 19, Number 2 (2015)
R Srinivasan, Raj S Dhankar 71
dollars of prots for the HFTs. This has raised a question mark on the
“fair trade practices” in the nancial markets and “best price discovery”
mechanism; and has also introduced a lot of volatility in the markets. But,
some also argue in favour of HFTs as it brings greater liquidity and more
efcient pricing; and that HFTs are not as harmful as it has been made
out to be. The FM shared that these front running trades and HFTs are
not prevalent at Indian AMCs, as it hampers the image of the AMC.
All the experts were of the same opinion that SEBI is fast emerging
as a proactive and powerful watchdog. In the recent past it has been
trying to curb the malpractices aficting the nancial markets. Most of
the data including that of mutual funds are reported electronically. Any
violations can be immediately discovered. An FM shared that CIOs
are very cautious on these issues, and are aware about the fallouts of
any misreporting for himself, as well as for the fund house. Another
FM added that mis-selling is another menace in the industry. Again,
SEBI has played an active role, and to curb this practice, high broking
commissions offered agents, have been brought down. Now, total
expense ratio (TER) is capped at 2.50 percent of the investments; and
there is another 0.30 percent for promoting schemes in smaller cities.
Besides, colour coding of schemes is also mandatory, to reect risk
prole of all the schemes.
CONCLUSION
The mutual funds industry despite being ve decades old, has
not taken off in India. There are many challenges to it. One of the main
challenges is the lack of transparency, in terms of hidden costs, agents’
commissions etc. by mutual fund companies. There has also been utter
lack of awareness among investors, as to the benets of investing in
the capital markets through the mutual fund route. Due to mis-selling
by marketing companies and brokers, a negative perception prevails.
Similarly, the algorithm trading and HFTs are another menace, which
are ctitious trades, and can introduce only articial liquidity. But, HFTs
can denitely cause unwanted panic among investors, and introduce
excessive volatility in the markets.
For the industry to grow and for it to invite greater participation
from the small investor, more openness can only help. SEBI, over
Management & Change, Volume 19, Number 2 (2015)
72 Fund Management And Risk Management Practices ...
a period of time, has becoming a stronger regulator, and has been
consistently trying to bring in changes, as the time demands. The global
recession triggered in 2008, has also not helped in boosting investor
sentiments. All said and done, mutual funds, is one of the important
cogs in the wheel of development. Investment in right kind of mutual
fund is a win-win situation for the company, the individual investor,
and the economy. They help the government in mopping up funds
for infrastructure development, for funding the corporate investments,
investments in capital market instruments is absolutely essential. The
recent turn of political events in India has certainly been helpful in
adding a lot of positivity to industry and the stock markets, which is
reected in the behaviour of the markets.
The mutual fund companies seem to be more reliant on experience
and intuition, apart from using ‘Tracking Error’ technique of risk
management. It was shared by the FMs that they rely on market
information for day-to-day risk management. As Fest & Sraeel (2009)
put it, there is need for developing risk modelling that relies on predictive
analytics, providing context and knowledge, including future elements,
as well as historical data, to turn unknown-unknowns into risks that can
be managed. The FMs should consider more scientic measurement tool
for management of risk in mutual funds.
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Management & Change, Volume 19, Number 2 (2015)
1Associate Professor, Department of Commerce, Guru Nanak Dev University, Amrit-
sar-143005, Punjab, India. Email: mandeep.gndu@gmail.com
2Senior Research Fellow, Department of Commerce, Guru Nanak Dev University, Amrit-
sar- 143005, Punjab, India. Email: tina198416@yahoo.com
INVESTMENT PREFERENCES OF WOMEN STOCK
INVESTORS OF PUNJAB: AN EMPIRICAL STUDY
Mandeep Kaur1 Tina Vohra2
The modern era has been an era of transformation for the Indian
securities market. The transformation of the market, has brought
along with it an abundance of nancial products for the investors
to choose from and direct their savings towards. The proliferation
of nancial products available in the securities market leads the
individuals to rely on their beliefs, attitudes and their preferences
in order to choose an investment option. Since the investment
preferences are based on certain demographic predictors, therefore
the investment preferences of women are different from that of
men. Considering the growing involvement of women in nancial
activities these days, the present study attempts to identify the
investment preferences of women stock investors in Punjab and
to examine whether the investment preferences of women stock
investors vary across demographics or not. For the purpose of the
study, data were collected from primary sources using a pre tested,
well-structured questionnaire. Descriptive Statistics as well as the
Kruskal Wallis test have been used in order to analyze the collected
data. The results of the study brought out that equity in secondary
market and mutual funds are the most preferred investment
avenues of women stock investors in Punjab. The difference in
the expected and actual investment preferences of women reveal a
shift in the preference of women from equity in secondary market
and mutual funds towards xed-income investments i.e. bonds.
Further the results of the study brought out that service women
nd mutual funds as an ideal investment option while women in
business opt to invest in secondary market. The paper suggests that
education and awareness camps should be organized for improving
the participation of women in Indian stock market. Along with
this, nancial advisors can also play a vital role in improving the
participation of women in investment activities by providing them
Management & Change, Volume 19, Number 2 (2015)
78 Investment Preferences of Women Stock Investors of Punjab
greater assistance which is needed in order to understand nancial
matters.
Keywords: Investment, Kruskal Wallis Test, Preferences, Stock
Market, Women
INTRODUCTION
The modern era has been an era of transformation for the Indian
securities market. Today, the Indian securities market is considered
as one of the most promising markets and is listed as one of the top
emerging markets by the global players for investment purposes
(ISMR, 2010).
The transformation of the market, has brought along with it an
abundance of nancial products for the investors to choose from and
direct their saving towards. This increasing proliferation of nancial
products along with bringing a lot of investment opportunities has
also brought about more complexity in the nancial decision-making
process of the investors.
The decision theory argues that while choosing among risky
alternatives, preferences for an alternative can be determined on the
basis of the maximization of expected value of a numerical utility
function. The decision theory therefore requires the investor to acquire
information before making a decision (Ozmete and Hira, 2011).
However, the financial consumers are not fully equipped
to evaluate the available information due to limited information
processing ability and therefore are unable to analyze the complete
set of information available in the market. Moreover, the plethora of
information regarding the numerous investment alternatives poses
a serious concern for people who do not have the knowhow or the
proper guidance on the most suitable investment options. Therefore,
investors have to rely on their beliefs and attitudes that reect their
preferences, towards the investment options (Sahi et al., 2012).
WOMEN AND INVESTING
As the perceptions of an individual investor are based on certain
Management & Change, Volume 19, Number 2 (2015)
Mandeep Kaur, Tina Vohra 79
demographic predictors, therefore the investment preferences of
women are different from that of men. Academic Researchers have
identied women as conservative investors who are less willing to
commit their savings over long periods of time (Burton, 1995). In
fact, paying off their current debt is considered as a primary goal by
most of the women. They are also likely to place more emphasis on
the measures of risk and are less likely to purchase investments which
have a highly variable rate of return. Women professional investors
are more security prone decision makers and therefore are less likely
to invest in the stock market (Martenson, 2008).
Women make different choices than men and due to greater
family responsibilities are more inclined to invest in xed income
alternatives (Bernasek and Bajtelsmit, 1996). They tend to be holistic
thinkers, aware of all aspects of an issue and equally aware of the
importance of balance. Women are likely to be intuitive, discerning
and perceptive in their view of the world. They tend to be more
concerned with quality rather than quantity, which can translate into
better decision making in the complex world of investing (Avery,
2010).
Moreover, another interesting fact about women is that women
do not want to learn about their investments from computers or
the Internet. This is not only due to the fact that they have security
concerns and nd web sites confusing but because they prefer working
with people over working with machines (Hira and Loibl, 2008).
REVIEW OF LITERATURE
Lewellen et al., (1977) attempted to study the Asset portfolio
of U.S investors, their decision making behavior and their dealing
with the broker. The respondents for the study were chosen at random
from a list of accounts of a brokerage rm over a period from January
1, 1964 to December 31, 1970.On analyzing the responses it was
found that the investors preferred securities with long term capital
appreciation instead of short term gains. Gupta (1993) conducted a
nationwide survey of 40998 unit holders and 165819 shareholders.
The study covered a wide cross section of households, spread out
geographically over 19 states/Union Territories and 76 cities/places in
Management & Change, Volume 19, Number 2 (2015)
80 Investment Preferences of Women Stock Investors of Punjab
India. The objective of the survey was to analyze the changing pattern
of ownership of Indian Households in order to provide a deeper insight
into the changes in investors’ perceptions and preferences for different
saving instruments. The study revealed a massive shift towards units/
mutual fund products, a moderate continuing shift towards shares
and debentures and a shift away from traditional nancial assets
viz. National Saving Certicates, life insurance policies, bank xed
deposits and company deposits.
Gupta et al., (2001) attempted to examine and compare the
pattern of investors’ preferences among Mutual Fund organizations/
schemes and other nancial products such as equity shares, bonds,
bank FDs and government saving schemes. The data for the study was
collected through an All- India survey of 312 household investors,
conducted during July-October 2000.The authors’ observed that 90%
of mutual fund investors had spread their mutual fund holdings over
two or more funds. The results of the study revealed that among
Mutual Fund schemes UTI owned US-64 was the most popular but
its position with regard to equity schemes was weaker than the others.
Kiran D. and Rao (2004) identied the investor group segments
on the basis of demographic and psychographic characteristics of
investors. The study aimed at segmenting the investors on the basis
of these characteristics. Demographic variables included age, gender,
marital status, place, education, profession, employment sector,
number of dependents and the annual income of the investor while
the psychographic characteristics included risk taking ability and
preference for safety, tax saving, liquidity, long term appreciation, high
short term returns, exibility of installments, risk coverage and size of
investments. The investment and saving instruments included Stocks,
Bonds, IPOs, Real estate, Gold, Post Ofce (NCDs), Fixed Deposits,
Insurance, Recurring deposits, PPF, Pension funds and SIPs. Out of
200 questionnaires administered 96 usable responses were received
from all over India. The data was analyzed using statistical techniques
such as Multinomial Logistic Regression (MLR) and Factor Analysis
(FA). MLR was used to bring out the characteristics of Investors which
predominantly determined their risk-taking capacity while factor
analysis was used to identify four major Investor segments based
on their demographic and psychographic characteristics. The results
Management & Change, Volume 19, Number 2 (2015)
Mandeep Kaur, Tina Vohra 81
of the study indicated that the risk-bearing capacity of an individual
was strongly dependent on their demographics and psychographics.
Mishra (2007) attempted to understand the perceptions and behavioral
issues regarding the investment decision making process by employed
women in India. With the aim of collecting primary data, a sample
of 1200 working women was selected from the major metros of
the country. The study was conducted between October 1999 to
March 2004.The data was collected using a structured questionnaire
which was divided into three parts. The questionnaire dealt with the
demographic prole and the preferences of the investors towards
various investment alternatives. The data was analyzed by using
various statistical techniques like simple percentage, Chi Square
analysis, Garret Ranking, Factor analysis and the model specically
designed to test the overall effectiveness of investment alternatives
on investment decision making of employed women. The results of
the study revealed that investment in Fixed Deposits with post ofces
was the women’s most preferred investment avenue followed by
Fixed Deposits with banks and purchase of gold while investment
in real estate and share market were found to be the least preferred
investment avenue. Most of the respondents were of the opinion that
stock market investments were highly risky.
Gupta and Jain (2008) conducted an all-India survey of 1463
household investors on “The Changing Investment Preferences of
Indian Households”. The survey was conducted to bring out the
investors’ preferences among the various types of nancial assets and
also their problems concerning the stock market. The data for the study
was collected through a structured questionnaire. The study found that
the household investors preferred investing in Shares as compared
to Mutual Funds. The middle and the upper middle class preferred
Mutual Funds and Shares as compared to Bank Deposits and Govt.
Savings. Kumar et al., (2008) studied the nancial product preference
of the respondents belonging to Tiruchipalli town of Tamil Nadu in
order to rank their preferences in dealing with six nancial investment
products i.e. post ofce savings, bank deposits, gold, real estate, equity
investments and mutual funds. A sample consisting of 120 respondents
was chosen using Stratied random sampling The respondents were
asked to rank the nancial products on the basis of various attributes
Management & Change, Volume 19, Number 2 (2015)
82 Investment Preferences of Women Stock Investors of Punjab
namely Safety of principal, Liquidity, Stability of income, Capital
growth, Tax benet, Ination resistance and Concealability. Primary
data was collected for a period from April 2007 to August 2007.
The respondents were selected from the tax payers list of the local
administration ofce of Tiruchirapalli Corporation consisting of 60
blocks. Analytical Hierarchy process and Multi criteria decision
making techniques were used to analyze the data. The results of the
study revealed that there was no nancial product that was better on
each attribute. The investors needed to choose the nancial products
from among the alternatives available and according to their own
priority rating of an attribute in the product. It was found that post
ofce savings were the most preferred nancial product followed
by bank deposits, gold, real estate, equity investments and mutual
funds.
Walia and Ravikiran (2009) analyzed the investor’s perception
and expectations towards mutual funds and focused on nding out
the parameters that accounted for the dissatisfaction among the
investor’s. The author’s used a well structured questionnaire in
order to understand the investor’s risk and return perception towards
mutual funds. Using selective systematic sampling, 100 individual
investors were selected from different regions of Punjab in order to
test the reliability of questionnaire. The responses to the statements
in the questionnaire were analyzed and quantied on a 5 point likert
scale. Ranking and rating methodology was followed to prioritize
the investor’s preferences. Chi-square test was applied to measure
the impact of investor’s age and income as the determinants of
investment objectives. ANOVA was applied in order to measure the
opinion of investors from different categories towards risk disclosure.
The values of Average preference Scores (APS) revealed the fact that
individual investors admitted that the capital market instruments i.e
Shares were the most risky investment followed by mutual funds. The
results of the study revealed that the preferences of varied investors
who desire to invest in mutual funds require some innovations and
added quality dimensions in existing services. Kathirvel and Mekala
(2010) examined the factors associated with the nancial decision
making of women investors as well as to analyze the preference
of women investors towards various investment outlets. The study
Management & Change, Volume 19, Number 2 (2015)
Mandeep Kaur, Tina Vohra 83
aimed at suggesting suitable measures to protect the interest of the
women investors. The authors followed a descriptive approach to
investigate the behavior of women investors. Interviews of women
investors in Coimbatore district of Tamil Nadu were conducted. The
district was divided into 5 parts viz Pollachi, Udumalai, Coimbatore
North, Coimbatore South and Mettupalayam. From each parts 30
women investors were selected. A sample of 150 women investors
were studied using convenience sampling method. Chi square test
was used to test the association between variables. Simple percentage
analysis was used to nd out the relative difference between two or
more attributes. Variables such as age, marital status, educational
qualication, occupation, monthly income, status in the family,
family members, number of dependents, family income and saving
were taken as dependent variables while time was taken as an
independent variable. The authors concluded that the above factors
closely inuence the investment decisions of the investors.
Parashar (2010) attempted to nd out the effect of Personality
Traits on Investment Choice made by individual investors. The
data was collected with the help of a structured questionnaire. The
questionnaire was designed to study the investor’s risk tolerance
and the investment decisions that individuals take when faced with
alternative choices. Real estate and mutual funds were found to be the
most preferred choices of investment among investors while PPF and
bank xed deposit were the least preferred. Cluster Analysis, Kruskal
Wallis test, Factor Analysis and Correspondence Analysis were used
to analyze the results of the study. The study revealed that the risk
takers and adventurous people tend to invest their money in equity
and real estate while options like bonds and mutual funds are for the
people who are risk averse. Sashikala and Prasad Ravi (2010) studied
the demographic characteristics such as gender and age as factors
inuencing the investment choice of the investors. The study aimed
at segmenting the investors on the basis of the above characteristics.
A pilot test of the questionnaire was done with 40 respondents and
then the questionnaire was administered over a wide cross section. A
combination of cluster analysis and logit regression was performed.
The results revealed that the investment choice was affected by the
demographic characteristics i.e. gender and age.
Management & Change, Volume 19, Number 2 (2015)
84 Investment Preferences of Women Stock Investors of Punjab
Bayyurt (2013) attempted to explore the differences in the
investment preferences of men and women. The data from a web
based survey of 2036 Turkish individual investors was used for the
purpose of the study. Discriminant Analysis and Logistic Regression
were used to analyze the results of the study. The results of the study
revealed that male investors preferred to invest in common stocks
and real estate while individual women investors preferred to invest
in fund, time deposits and gold.
RESEARCH DESIGN
Need of the Study
Traditionally, investing was considered as a male prerogative
and women were excluded from nancial discussions, on the explicit
ground that they could not understand investments. Moreover, various
studies in the past have attempted to study the investment preferences
of individual investors, where gender has been considered as a
secondary issue. As a result, there is a dearth of literature focusing
on the investment preferences of women investors.
However, with the growing involvement of women in business
and nance, it has been realized that a signicant amount of economic
growth can be achieved by ensuring the participation of women
in areas that were earlier thought to be dominated by men. The
understanding of the investment preferences of women would help
the nancial service industry in targeting women (the next generation
nancial decision makers) from a nancial perspective.
Knowing about the investment preferences of women will also
help the nancial advisors to provide women with greater assistance
that is needed by them in order to understand nancial matters, thereby
improving their participation in investment activities.
Management & Change, Volume 19, Number 2 (2015)
Mandeep Kaur, Tina Vohra 85
Objectives
Following are the specic objectives of the study:
1. To identify the investment preferences of women stock investors
in Punjab.
2. To examine if there is a signicant difference in the investment
preferences of women stock investors based on the demographics
of the respondents.
DATA BASE AND RESEARCH METHODOLOGY
The investment preferences of women stock investors in
India were examined with the help of a pre-tested, well-structured
questionnaire. The questionnaire was divided into two parts. The
rst part of the questionnaire was designed to nd out the investment
preferences of women stock investors in India. The respondents were
asked to assign percentages to various investment avenues namely
Equity Investment through Primary Market (IPO), Equity Investment
through Secondary Market, Mutual Funds, Bonds, Debentures and
Trading in Derivatives in the order of their preference, assigning
a higher percentage to the most preferred investment avenue. The
respondents were also asked about their future investment intentions.
The second part of the questionnaire was related to the demographic
prole of women investors. The data were collected from 200 women
stock investors from the four major cities of Punjab, i.e. Amritsar,
Jalandhar, Ludhiana and the Union Territory Chandigarh. The sampled
respondents were selected using Purposive Sampling Method. The
respondents were chosen from a list of women investors. The list was
prepared with the help of brokerage rms.5 brokerage rms were
selected from each city and then 10 clients from each brokerage rm
were selected from their client database. Thereafter, the questionnaires
were sent to the respondents by post. Online questionnaires were
also mailed to the respondents. The survey was conducted during
December, 2013 to September,2014.
The Sum of percentages assigned to the various investment
instruments and the Kruskal Wallis test were used in order to analyze
the collected data.
Management & Change, Volume 19, Number 2 (2015)
86 Investment Preferences of Women Stock Investors of Punjab
Sample Characteristics
As far as the demographic prole of the respondents is concerned,
the sample comprised of variety of respondents belonging to
different economic and professional backgrounds. The demographic
background of the sampled respondents is presented in Table no. 1.
Table 1: Demographic Prole of Respondents
Demographic Variables No. of Respondents (%)
Age (Yrs)
Less than 30 80(40.0)
30-40 84(42.0)
40-50 24(12.0)
50-60 11(5.5)
Above 60 1(.5)
Total 200(100)
Marital Status
Married 153 (76.5)
Single 41(20.5)
Divorcee 4(2.0)
Widow 2(1)
Total 200 (100)
Education Level
Matriculation 4(2.0)
Under Graduation 6(3.0)
Graduation 89(44.5)
Post Graduation 98(49.0)
Doctorate 3(1.5)
Total 200(100)
Occupation
Businesswoman/Self
employed
79(39.5)
Professional 30(15)
Service 91(45.5)
Total 200(100)
Family Monthly
Income(Rs.)
Less than 40000 5(2.5)
40000-80000 34(17.0)
80000-120000 30 (15.0)
More than Rs 120000 131(65.5)
Total 200(100)
Personal Monthly
Income(Rs.)
Less than 40000 85(42.5)
40000-60000 48(24.0)
60000-80000 19(9.5)
More than Rs 80000 48(24.0)
Total 200(100)
No. of Earning Members
1.00 23 (11.5)
2.00 104 (52.0)
3.00 42 (21.0)
4 or more 31 (15.5)
Total 200(100)
Source: Percentages Calculated on the Basis of Collected Data
Management & Change, Volume 19, Number 2 (2015)
Mandeep Kaur, Tina Vohra 87
The table shows that the majority of the respondents (42%)
belonged to the age group between 30-40 years, followed by 40%
of the respondents belonging to the age group of less than 30 years.
The next category of respondents was of the age group of 40-50 years
(12%).The respondents falling in the age category of 50-60 were 5.5%,
while those falling in the age category of above 60 formed just 0.5%
of the sample. With regard to the marital status of the respondents,
most of the respondents i.e. 76.5% respondents in the sample were
married while 20.5% of them were single, 2% were divorced and the
rest 1% widowed. As far as respondent’s occupation is concerned, the
table shows that majority of the respondents belong to service category
(45.5%), followed by businesswomen/self-employed women (39.5%).
Professional women constituted 15% of the sample. Since the sample
respondents were only working women, therefore housewives did
not form a part of the sample. Table 1 also shows the education level
of the sampled population. It brings out that 49% of the respondents
were post graduates followed by graduates (44.5%). Few of them
were undergraduates (3%) followed by 2% of the respondents with a
matriculation degree and only 1.5% of the respondents had a doctoral
degree.
The income categorization, shows that 42.5% of the respondents
belonged to the personal monthly income category of less than
Rs.40000 followed by 24% belonging to the income category of
Rs. 40000-60000.Only 9.5% of the respondents were in the income
category of 60000-80000 while 24% of the women belonged
to the income category of above Rs.80000 income. The family
wise income categorization, shows that 2.5% of the women stock
investors’ belonged to the family monthly income category of less
than Rs.40000 followed by 17% belonging to the family income
category of Rs. 40000-80000.Only 15% of the women stock investors’
were of the income category of 80000-120000 while 65.5% of the
women belonged to the family income category of above Rs.120000
income.
As far as the number of earning members in the family are
concerned, majority of women i.e.52% had two earning members in
their family followed by 21% and 15.5% respondents who had three
Management & Change, Volume 19, Number 2 (2015)
88 Investment Preferences of Women Stock Investors of Punjab
and four earning members in their family respectively. Only 11.5%
women were the sole earning member in their family.
ANALYSIS AND DISCUSSION
In order to examine the investment preferences of women stock
investors, the sum of percentages of amount invested by women in
various investment avenues was used. The respondents were asked to
assign percentages to the various investment avenues namely Equity
Investment through Primary Market (IPO), Equity Investment through
Secondary Market, Mutual Funds, Bonds, Debentures and Trading
in Derivatives in the order of their preference, assigning a higher
percentage to the most preferred investment avenue. The respondents
were also asked to reveal their future investment intentions in a
similar way i.e. by assigning a percentage to the various investment
options in which they intend to invest in future. Table 2 shows the
sum of percentage of amount invested by women stock investors
in various investment avenues. As shown in the table, the sum of
percentages of the amount invested is the highest in the case of
Equity in Secondary market and Mutual funds, therefore for women
stock investors, Equity in Secondary market and Mutual funds are
the most preferred investment avenues. Similar results are observed
in case of women stock investors as far as their future investment
intentions are concerned. The difference in the expected and actual
investment preferences of women reveals a shift in the preference of
women from equity in the secondary market and mutual funds towards
xed-income investments i.e. bonds. The nding is in consonance
with that of Gupta et al., (2001) and Parashar (2010).
Management & Change, Volume 19, Number 2 (2015)
Mandeep Kaur, Tina Vohra 89
Table 2: Sum of Percentage of amount invested by Women
Stock Investors in various Investment Avenues
Sum of Percentage of amount invested by Women Stock Investors in various Investment Avenues (Actual)
Category Equity in
Primary
Market
Equity in
Secondary
Market
Mutual
Funds Bonds Debentures
Trading in
Derivatives
Women
Stock
Investors
Sum 2060.00 9020.00 6805.00 660.00 405.00 1000.00
Rank 3 1 2 5 6 4
Sum of Percentage of amount invested by Women Stock Investors in various Investment Avenues(Expected)
Category Equity in
Primary
Market
Equity in
Secondary
Market
Mutual
Funds Bonds Debentures
Trading in
Derivatives
Women
Stock
Investors
Sum 2124.00 8867.00 6690.00 839.00 390.00 1070.00
Rank 3 1 2 5 6 4
Sum of the Difference between the Expected and Actual amount invested in various Investment Avenues
Category Equity in
Primary
Market
Equity in
Secondary
Market
Mutual
Funds Bonds Debentures
Trading in
Derivatives
Women
Stock
Investors
Sum 64.00 -153.00 -115.00 179.00 -15.00 70.00
Rank 3 6 5 1 4 2
Source: Calculated through SPSS
Note: Sum of Percentage is obtained by adding the product of (Percentage ×Frequency).
Ranks are assigned in the order of preference from highest to lowest
After determining the investment instruments that are most
preferred by women stock investors, the Kruskal Wallis test was used
to nd out whether demographics have a signicant impact on the
choice of an investment instrument.
The following Hypotheses have been set in order to achieve the
objectives of the study:
H01: There is no signicant difference between the Age of women
stock investors and their actual stock market investment prole.
H02: There is no signicant difference between the Marital Status
of women stock investors and their actual stock market investment
prole.
H03: There is no signicant difference between the Educational
Qualication of women stock investors and their actual stock market
Management & Change, Volume 19, Number 2 (2015)
90 Investment Preferences of Women Stock Investors of Punjab
investment prole.
H04: There is no signicant difference between the Occupation of
women stock investors and their actual stock market investment
prole.
H05: There is no signicant difference between the Family Monthly
Income of women stock investors and their stock market investment
prole.
H06: There is no signicant difference between the Personal Monthly
Income of women stock investors and their stock market investment
prole.
H07: There is no signicant difference between the Earning Members
in the family of women stock investors and their stock market
investment prole.
Since the sum of percentages of the amount invested in each
investment avenue is calculated and the highest percentage means the
most preferred investment avenue. Therefore, the investment avenue
with the highest sum is the most preferred i.e. Equity in Secondary
Market and Mutual Funds have been used for further analysis.
Table 3 shows that the Chi-Square values of all the demographic
variables are insignificant except for the variable occupation.
Therefore, the investment preferences of all women stock investors
are the same. The only difference in the investment preferences of
women is seen in terms of their occupation. Servicewomen nd
mutual funds as an ideal investment option as it minimizes the risk
associated with investments by investing in a portfolio of securities
while women in business or those who are self employed opt to invest
in the secondary market. This is mainly due to the fact that women
in service are more risk averse than women in business.
Management & Change, Volume 19, Number 2 (2015)
Mandeep Kaur, Tina Vohra 91
Table 3: Demographics of Women Stock Investors and their
Actual Stock Market Investment Prole
Instruments Age N Mean
Rank
Chi-
Square
df Sig. Decision
Equity in
Secondary
Market
20-30 80 96.80 5.787 4 .216 Accept
the Null
Hypothesis
30-40 84 98.05
40-50 24 120.85
50-60 11 109.14
60-70 1 19.00
Total 200
Mutual Funds Age N Mean
Rank
5.102 4 .277 Accept
the Null
Hypothesis
20-30 80 106.47
30-40 84 97.92
40-50 24 85.00
50-60 11 102.86
60-70 1 185.50
Total 200
Instruments Marital Status N Mean
Rank
6.520 3 .089 Accept
the Null
Hypothesis
Equity in
Secondary
Market
Married 153 99.85
Single 41 95.17
Divorcee 4 136.63
Widow 2 187.00
Total 200
Mutual Funds Marital Status N Mean Rank 3.167 3.367 Accept
the Null
Hypothesis
Married 153 100.26
Single 41 104.51
Divorcee 4 103.13
Widow 2 31.50
Total 200
Instruments Education N Mean
Rank
5.839 4 .211 Accept
the Null
Hypothesis
Equity in
Secondary
Market
Matriculation 4 44.75
Under Graduate 6 99.92
Graduate 89 107.59
Post Graduate 98 96.94
Any other 3 82.00
Total 200
Instruments Education N Mean Rank 4.585 4 .333 Accept
the Null
Hypothesis
Mutual Funds Matriculation 4 148.38 2 .009 Reject
the Null
Hypothesis
Under Graduate 6 90.58
Graduate 89 94.58
Post Graduate 98 104.08
Any other 3 115.33
Total 200
Management & Change, Volume 19, Number 2 (2015)
92 Investment Preferences of Women Stock Investors of Punjab
Instruments Occupation N Mean
Rank
9.387
Equity in
Secondary
Market
Businesswoman/
Self Employed
79 114.47
Professional 30 102.93
Service 91 87.57
Total 200
Mutual Funds Occupation N Mean Rank 11.467
2 .003 Reject
the Null
Hypothesis
Businesswoman/
Self Employed
79 86.73
Professional 30 91.98
Service 91 115.26
Total 200
Instruments Family Monthly
Income
NMean Rank 1.524
30.677 Accept
the Null
Hypothesis
Equity in
Secondary
Market
below 40000 5 108.00
40000-80000 34 91.46
80000-120000 30 108.53
above 120000 131 100.72
Total 200
Mutual Funds Family Monthly
Income
NMean Rank 3.591
3 0.309 Accept
the Null
Hypothesis
below 40000 5 63.40
40000-80000 34 111.15
80000-120000 30 95.18
above 120000 131 100.37
Total 200
Instruments Personal
Monthly Income
NMean Rank 5.869
3 0.118 Accept
the Null
Hypothesis
Equity in
Secondary
Market
below 40000 85 110.57
40000-60000 48 92.03
60000-80000 19 106.37
above 80000 48 88.81
Total 200
Management & Change, Volume 19, Number 2 (2015)
Mandeep Kaur, Tina Vohra 93
Mutual Funds Personal
Monthly Income
NMean Rank 5.263 3 0.154 Accept
the Null
Hypothesis
below 40000 85 98.11
40000-60000 48 106.57
60000-80000 19 75.71
above 80000 48 108.47
Total 200
Instruments Earning
Members
N Mean
Rank
1.387 30.708 Accept
the Null
Hypothesis
Equity in
Secondary
Market
1.00 23 98.11
2.00 104 104.93
3.00 42 96.11
4 or more 31 93.37
Total 200
Mutual Funds Earning
Members
NMean Rank 4.296 3 0.231 Accept
the Null
Hypothesis
1.00 23 95.22
2.00 104 99.62
3.00 42 114.67
4 or more 31 88.18
Total 200
Source: Calculated through SPSS, Kruskal Wallis Test, Grouping Variables: Demographics
CONCLUSION AND RECOMMENDATIONS OF THE
STUDY
Academic researchers are of the view that women are conservative
and more security prone investors’ and are less likely to invest in the
stock market. However, now a day, women have started realizing
that their participation in the areas that were earlier thought to be
dominated by men is of paramount importance in order to ensure the
economic wellbeing of their family as well as the society. In order
to ensure the effective participation of women in the stock market,
they need to be provided with the products and services that suit their
needs.
The abundance of nancial products available in the securities
market leads individuals to rely on their beliefs, attitudes and their
preferences in order to choose an investment option. Since the
investment preferences of women are different from that of men,
therefore the current study attempted to identify the investment
preferences of women stock investors in Punjab. The paper also
examined whether the investment preferences of women stock
Management & Change, Volume 19, Number 2 (2015)
94 Investment Preferences of Women Stock Investors of Punjab
investors vary across demographics or not.
The results of the study brought out that equity in the secondary
market and mutual funds are the most preferred investment avenue
of women stock investors in Punjab. The difference in the expected
and actual investment preferences of women reveals a shift in the
preference of women from the equity in the secondary market and
mutual funds towards xed-income investments i.e. bonds. This is
mainly due to the fact that women are risk averse. The academicians
and practitioners in this eld are also of the view that risk aversion is
greater in case of women and that they are also more concerned about
the return as compared to men. Further, the results of the study show
that service women nd mutual funds as an ideal investment option
as it minimizes the risk while women in business opt to invest in the
secondary market.
ON THE BASIS OF THE RESULTS OF THE STUDY,
FOLLOWING RECOMMENDATIONS CAN BE MADE:
To the Regulator of the Stock Market (SEBI)
The paper suggests that education and awareness camps should
be organized for improving the participation of women in Indian stock
market. Women being risk averse investors need to trust the stock
market in order to continue investing in it.
To the Financial Advisors
Moreover, financial advisors can also play a vital role in
improving the participation of women in investment activities by
providing them greater assistance required to understand nancial
matters.
To the Financial Engineers
Further, nancial engineering can help a great deal in designing
innovative financial instruments that suit the needs of various
segments of women investors’, thereby making the stock market
investments more safe and likeable for women.
Management & Change, Volume 19, Number 2 (2015)
Mandeep Kaur, Tina Vohra 95
LIMITATIONS AND SCOPE FOR FURTHER RESEARCH
The present study is restricted only to the major cities of Punjab
i.e. Amritsar, Jalandhar, Ludhiana and Chandigarh. However, a more
extended geographical sample may produce different results. Further a
comparative study of the Investment Preferences of women belonging
to different states of India can be conducted to nd out the differences
in their Preference towards various stock market investment avenues.
A comparison of the investment preferences of men and women stock
investors can be carried out in order to nd out the gender differences
in investment preferences. In future, studies can be carried out in order
to explore the various factors inuencing the Investment Preferences
of women stock investors.
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Bayyurt, N., Karışık, V., & Coşkun, A. (2013). Gender differences
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Bernaseki, A. and Bajtelsmit, V.L. (1996). Why Do Women Invest
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Burton, D. (1995). Women and nancial services: some directions
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96 Investment Preferences of Women Stock Investors of Punjab
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Management & Change, Volume 19, Number 2 (2015)
98 An Empirical Assessment of Tourism Service Quality
Management & Change, Volume 19, Number 2 (2015)
JOB SATISFACTION ACT AS A MEDIATOR BETWEEN
PROCEDURAL FAIRNESS AND ORGANIZATIONAL
COMMITMENT
Luxmi Malodia1 Ashu Vashisht2
The purpose of this paper is to understand the relationship between
procedural fairness, job satisfaction and organizational commitment
and moderating effect of job satisfaction on procedural fairness and
organizational commitment in banking sector. In today’s dynamic
business environment organizations must pay attention to aspects of
procedural fairness and job satisfaction of their employees, so as to
generate a committed workforce, which ultimately acts as strategic
advantage for an organization. The results revealed that there exists
a signicant and positive relationship between procedural fairness,
job satisfaction and organizational commitment. Also, it was found
that job satisfaction fully mediates the link between procedural
fairness and organization commitment; which clearly states that
more the fairness in the procedures of the organization more will
be the levels of job satisfaction and organizational commitment
respectively. The results of the study will help the managers to focus
upon various aspects of procedural fairness which will further
lead to committed and satised workforce. The paper serves as a
reference for fostering commitment in an organization. In order
to have committed employees it is important to have fairness in
procedures of an organization and it becomes important to pay
attention to various facets of job satisfaction to get positive results
in an organization.
Keywords: Organization Commitment, Job Satisfaction, Procedural
Fairness, Banks, Public Sector Banks, Private Sector Banks, Delhi,
India
1 Associate Professor, University Business School, Panjab University, Chandigarh – 160014,
Punjab, India. Email: luxmimalodia@yahoo.com
2 Research Scholar, University Business School, Panjab University, Chandigarh – 160014, Punjab,
India. Email: vashishthashu@gmail.com
Management & Change, Volume 19, Number 2 (2015)
100 Job Satisfaction Act as a Mediator between Procedural Fairness and
INTRODUCTION
Human resource management is an important aspect of
organizational processes. This emanated from the fact that the
human resources of an organization and the organization itself
are synonymous. To ensure the achievement of a rm’s goal, the
organization needs to create an atmosphere of commitment and
cooperation for its employees through policies that facilitate employee
satisfaction. Motivated employees develop loyalty or commitment
to the rm resulting to greater productivity and lower turnover rates,
thus clearly showing a linkage between commitment and satisfaction
among human resources of an organization, (Kabir & Parvin, 2011).
Employee job satisfaction is essential to face the dynamic and ever-
increasing challenges of maintaining productivity of the organization
by keeping their workforce constantly engaged and motivated.
Furthermore, environmental pressures, rising health costs and various
needs of the workforce also pose a challenge for the management.
This can be overcome by creating a work environment that maintains
employee job satisfaction as well as motivates individuals towards
exceptional performance at the workplace achieving work-life
balance, (Singh & Jain 2013). As rightly stated by Dicke et al., (2007)
there is little doubt that employee commitment can be strengthened by
fairness and its related elements, just as employee commitment can
be weakened by unfairness and the like. As both the workforce and
the workplace evolve, organizations may nd that in order to win the
“war for talent,” they must rst win the battle for employees’ hearts.
Decision-making processes that are unclear to employees violate
procedural fairness and trust – damaging the employer-employee
relationship. Thus it becomes imperative for organizations to foster
fairness in procedures i.e. procedural justice in organizations, so as to
get positive outcomes. There are an increasing number of studies on
organizational commitment yet no unifying work is focused on the
measurement of degree of difference in organizational commitment
in a public sector organization and a private sector organization in
Indian context. Job satisfaction and organizational commitment are
two vital grounds on which the productivity of the employees of the
organization depends. If an employee is satised with his job and is
committed to his organization his productivity will be more which
Management & Change, Volume 19, Number 2 (2015)
Luxmi Malodia, Ashu Vashisht 101
in turn will lead to strategic advantage for the organization. But one
point not to be missed while studying these variables is that job
satisfaction and organizational commitment themselves depend on
a major determinant, that is, procedural fairness. Hence in order to
keep a tap on protability of the organization the relationship between
these three variables is vital to study.
THEORETICAL FRAMEWORK AND HYPOTHESES
DEVELOPMENT
Procedural Fairness
As stated by Greenberg (1990), procedural justice was
introduced by Thibaut and Walker (1975) during their research on
dispute resolution procedures which refers to the perceived fairness
of the policies and procedures used to make decisions. According to
Alexander and Ruderman (1987), Korsgaard et al., (1995), Farmer
et al., (2003) procedural justice refers to fairness in the process of
decision making about resource allocation. Authors such as Moorman
(2005), Greenberg (2001, 2004), Aryee et al., (2002), Elovainio et al.,
(2004), and Byrne (2005) viewed procedural justice as the employees’
observations about fairness in rules and regulation which are used
to make a decision that will lead to the ultimate outcome. According
to Leventhal (1980), when individuals feel that they have a voice
in the process or that the process involves characteristics such as
consistency, accuracy, ethicality, and lack of bias then procedural
justice is enhanced.
Tyler et al., (1985) stated that procedural justice concerns the
fairness and the transparency of the processes by which decisions are
made, and may be contrasted with distributive justice (fairness in the
distribution of rights or resources), and retributive justice (fairness
in the punishment of wrongs). Kontakos (2007) in his paper stated
that some theories of procedural justice hold that fair procedure
leads to equitable outcomes, even if the requirements of distributive
or restorative justice are not met. The labelling of an organization as
“fair” can be made on the basis of perception and reality. Fairness is
ideally seen and felt throughout all levels of the organization (thereby
conrming it is real rather than just perceived) and can take many
forms in the workplace such as: application of policies, procedures
and the presence of unions to help level the playing eld. According
Management & Change, Volume 19, Number 2 (2015)
102 Job Satisfaction Act as a Mediator between Procedural Fairness and
to Ceplenski Chris (2013) perceived fairness of employee rewards
(or the lack thereof) is often at the root of why employees leave
organizations. The idea of fairness also determines if an employee
will make an extra effort to reach organizational goals or even the
objectives of his or her own job. For these reasons, it’s vital for
organizations to ensure that their employee rewards are according
to the principles of fairness. Bianchi et al., (2015) stated that when
individual’s experience of outcome and procedural fairness diverged
from how they expected to be treated, they reacted in the direction of
their experiences; otherwise, their reactions were consistent with their
expectations. Leventhal, G. S. (1980) stated various factors which
can inuence the perception of fairness or justice: consistency, bias
suppression, accuracy of information, existence of provisions for
correcting bad decisions and conformity with personal standards of
ethics and morality. Prior researchers such as De Cremer et al., (2010),
Sholihin et al., (2007) have shown that procedural fairness interacts
with outcome fairness to inuence employees’ work attitudes (e.g.,
organizational commitment) and behaviours (e.g., job performance,
organizational citizenship behaviour), such that employees’ tendencies
to respond more positively to higher procedural fairness are stronger
when outcome fairness is relatively low.
H1a: There is high level of procedural fairness in few select public
and private sector banks under study.
Job Satisfaction
Job satisfaction is an older concept that took root in the mid
1970’s. In 1976, it was dened as a pleasurable or positive emotional
state resulting from the appraisal of one’s job or job experiences (Brief
& Weiss 2002). However, researchers in the mid 1980 discovered
that this denition had shortcomings. The 1976 denition described
affective dimensions but measurement tools of the 1980’s only
measured cognitive components, thus, creating a paradox. By the
late 1990’s and early 2000’s new research updated the denition
of job satisfaction to include cognitive components. Brief & Weiss
(2002) dened job satisfaction as, “a positive (or negative) evaluative
judgment one makes about one’s job or job situation.” Locke and
Lathan (1990) stated a comprehensive denition of job satisfaction as
“pleasurable or positive emotional state resulting from the appraisal of
Management & Change, Volume 19, Number 2 (2015)
Luxmi Malodia, Ashu Vashisht 103
one’s job or job experience. Job satisfaction is a result of employee’s
perception of how well their job provides those things that are viewed
as important”. According to Mitchell and Lasan (1987), it is generally
recognized in the organizational behaviour eld that job satisfaction
is the most important and frequently studied attitude. The happier
people are within their job, the more satised they are said to be. Job
satisfaction is not the same as motivation, although it is clearly linked.
Achieving motivation and job satisfaction to develop organizational
commitment is not simple or easy and works according to the context
of individual rms (Kabir & Parvin 2013). While Luthan (1998)
posited that there are three important dimensions to job satisfaction:
Job satisfaction is an emotional response to a job situation, determined
by how well outcome meet or exceed expectations, and represents
several related attitudes which are most important characteristics
of a job about which people have effective response. Moser, 1997
stated that Job satisfaction is so important in that its absence often
leads to lethargy and reduced organizational commitment. Lack of
job satisfaction is a predictor of quitting a job, (Alexander et al.,
1997, Jamal 1997). Nwagwu (1997) in his research paper found that
sometimes workers may quit from public to the private sector and
vice versa. At the other times the movement is from one profession
to another that is considered a greener pasture. This later is common
in countries grappling with dwindling economy and its concomitant
such as poor conditions of service and late payment of salaries.
Tregone (1993) found that librarians in public libraries showed greater
satisfaction. Armentor & Forsyth (1995), Flanegan et al., (1996),
Kadushin, and Kulys(1995), Paramer and East (1993), Adeyemo
(2000), Bolarin (1993) Gomez-Henandez et al., (1997) found
extrinsic factors that affect Job satisfaction are the availability of
power and status, pay satisfaction, promotion opportunities, and task
clarity; whereas other researchers MacDonald (1996), O’Toole (1980)
argue in favour of the control of job satisfaction by factors intrinsic
to the workrs, the reason stated was based on the idea that workers
have an intrinsic feeling to nd satisfaction in their jobs and perceive
them as worthwhile. According to Friedlander and Margulies (1969)
contradicted the view of Herzberg (1959) by stating that management
& friendly staff relationships contribute to the level of job satisfaction;
Whereas Herzberg (1966) stated that supervision is irrelevant to the
Management & Change, Volume 19, Number 2 (2015)
104 Job Satisfaction Act as a Mediator between Procedural Fairness and
level of job satisfaction. St. Lifer (1994) concluded that salaries and
benets are related to job satisfaction while Horenstein (1993) stated
that job satisfaction it related to faculty status, thus indicating that
employees with high academic rank were more satised. Singh &
Jain (2013) in their paper stated various other factors affecting job
satisfaction which are: policies of compensation and benet, job
security, working conditions, relationship with superior authority,
promotion and career development, leadership styles, work group,
personal variables such as- personality, expectation, age, education,
and gender differences, other factors such as-group outgoing (feel
like a part of family), encouragement and feedback, use of internet
and other technology for doing job. Similarly, the result of some other
studies as Sencer (1982), Kose (1985), Kyamanywa T.N. (1996)
have shown meaningful relations between job satisfaction and wages,
management policy, working conditions, possibilities of promotion,
gaining respect, the size of the organization and self-development
and achievement of the use of talents.
H1b: There is high level of job satisfaction in few select public
and private banks under study.
Organizational Commitment
Organizational commitment research seemed to really take
form in the early 1970’s. One denition from the mid 1980’s states
organizational commitment is a process of identication with the
goals of an organization’s multiple constituencies. The goals referred
to in this denition can range from broad organizational goals and
values to a more specic formulation that species whose goals and
values should be the focal point for multiple commitments, (Reichers
1985).
Organizational commitment is a feeling of dedication to one’s
employing organization, willingness to work hard for that employer,
and the intent to remain with that organization (Meyer and Allen,
1988). Employees are regarded as committed to an organization if
they willingly continue their association with the organization and
devote considerable effort to achieving organizational goals (Raju
and Srivastava 1994, Sharma and Bajpai 2010).
Management & Change, Volume 19, Number 2 (2015)
Luxmi Malodia, Ashu Vashisht 105
According to Northcraft and Neale (1996) organizational
commitment is an attitude reecting an employee’s loyalty to the
organization, and an ongoing process through which organization
members express their concern for the organization and its continued
success and well being. Moday et al (1982) described organizational
commitment as taken to be identication with the goals and values
of the organization, a desire to belong to the organization and a
willingness to display effort on behalf of the organization. Salancik
(1977) related organizational commitment to the behaviour of an
employee, namely three features of behaviour are important in binding
individuals to act: visibility of acts, extent to which the outcomes are
irrevocable, and degree to which the person undertakes the action
voluntarily.
Meyer and Allen, (1994) dened organizational commitment as
“a psychological state which characterizes the employee’s relationship
with the organization and has implications for the decision to continue
membership in the organization. They proposed a three component
model which has implications for the continuing participation of the
individuals in the organization:
• Affective Commitment – psychological attachment
• Continuance Commitment – cost associated with leaving the
organization
• Normative Commitment – perceived obligation to remain with
the organization”
A wide variety of definitions and measure of organizational
commitment exist. Becker et al., (1995) dened the term in a three
dimensions: a strong desire to remain a member of a particular
organization; a willingness to exert high levels of efforts on behalf
of the organization; a dene belief in and acceptability of the values
and goals of the organization.
Guest (1991) concluded that high organizational commitment
is associated with lower turnover and absence, but there is no clear
link to performance. It is probably wise not to expect too much from
Management & Change, Volume 19, Number 2 (2015)
106 Job Satisfaction Act as a Mediator between Procedural Fairness and
commitment as a means of making a direct and immediate impact
on performance. It is not the same as motivation. Commitment is
a broader concept and tends to withstand transitory aspects of an
employee’s job. It is possible to be dissatised with a particular
feature of a job while retaining a reasonably high level of commitment
to the organization as a whole. As Amstrong (1999) stated that
creating commitment includes communication, education, training
programs, and initiatives to increase involvement and ownership and
the development of performance and reward management systems.
Meyer and Allen (1991) stated the factors which signicantly predict
organizational behaviour among blue collar workers including:
promotion, satisfaction, job characteristics, extrinsic and intrinsic
rewards. Dornstein and Matalon (1998) gave eight variables of
organizational commitment: interesting work, co-workers’ attitude,
organizational dependency, age, education, employment alterations,
attitude of family and friends. Ferreira (2014) found that affective and
normative commitment was signicantly associated with supervisor
support; perception of procedural fairness; work-life balance and
tenure. According to a survey conducted in thirty-two countries
by Walker Information, the factors that most inuence employee
commitment (and one could argue employee engagement) are fairness,
care and concern for employees, and trust (Frank et al., 2004).
Ceplenski (2013) stated that unfair treatment is corrosive, just
the perception that treatment is unfair can have devastating effects
on the organization because it: creates a climate of distrust and
hostility, erodes performance and employee commitment to the
organization, increases counter-productive work behaviour, reduces
the willingness of employees to help each other, increases unionizing
activity, increases voluntary turnover and absenteeism.
Dornstein and Matalon (1998) describe eight variables that are
relevant to organizational commitment. These are interesting work,
co-worker’s attitudes towards the organization, organizational
dependency, age, education, employment alternatives, attitude of
family and friends. Sharma & Bajpai (2010) found that employees
in public sector organization have greater degree of organizational
commitment in comparison to private sector organizations.
Management & Change, Volume 19, Number 2 (2015)
Luxmi Malodia, Ashu Vashisht 107
H1c: There is high level of organizational commitment in few
select public and private sector banks under study.
Procedural Fairness and Organizational Commitment
According to McDowall and Fletcher (2004) procedural
fairness was found to be signicantly and positively correlated with
organizational commitment, as the employees who held a perception
that the review process in the organization is fair, may feel emotionally
committed to their organization and job, and hence they not leave
the organization. Yavuz (2010), Fatt et al., (2010), Kim (2009)
stated that managers who feel they are treated more fairly would be
more committed to the organization, be more inspired to personal
industry and individual initiative, and hence be expected to be more
motivated to perform planning. Various authors such as Korsgaard et
al., (1995), Chan et al., (2008), Siegel et al., (2005), Lavelle et al.,
(2009), Leow and Khong (2009), Al-Shammari and Ebrahim (2014),
Ferreira (2014), Oppenheimer and Roberto (2014), Trivellas et al.,
(2015), Yao & Fan (2015), Piaralal et al (2015) found that perceptions
of being treated fairly leads to increased organizational commitment.
The organization that wishes its employees to manifest high level
of commitment should, therefore, concentrate more on fairness in
procedures at work.
H2a: Procedural fairness is positively related to organization
commitment.
Procedural Fairness and Job Satisfaction
Chan et al., (2008) conducted the research on Fairness of
performance evaluation procedures and Job satisfaction and found that
fairness in performance evaluation procedures has a signicant total
effect on the job satisfaction of a subordinate. Sholihin et al., (2007)
conducted their research on the Moderating effects of procedural
fairness and distributive fairness on the relationship between
performance evaluation styles and job satisfaction and concluded that
procedural fairness and distributive fairness moderate the relationship
between Reliance on Accounting Performance Measures (RAPM) and
job satisfaction, but not on non-nancial measures based performance
Management & Change, Volume 19, Number 2 (2015)
108 Job Satisfaction Act as a Mediator between Procedural Fairness and
evaluation and job satisfaction. The studies of Colquitt et al., (2001),
Folger and Cropanzano (1998), Cohen and Spector (2001), Lambert
(2003), Bianchi et al., (2015) also found that justice dimensions have
positive and signicant impact on job satisfaction. Tang et al., (1996)
indicated that procedural justice has a direct positive inuence on job
satisfaction. And procedural justice was related to satisfaction with
supervision, self - reported performance appraisal rating, performance
appraisal, commitment, and job involvement. Malik and Naeem
(2011) found that Procedural justice was found to have no effect on
overall job satisfaction of faculty members serving in public and
private sector institutions of higher learning. Various other studies
justifying this relationship are: Daileyl & Kirk (1992), Moorman et
al., (1993), Schappe (1998), Akbar et al., (2006), Yamazaki et al.,
(2015) and others.
H2b: Procedural fairness is positively related to job
satisfaction.
Job satisfaction and Organizational Commitment
Ishigaki (2004) found that employees with higher job satisfaction
believed that the organization would be a tremendous future in the
long run and care about the quality of their work; therefore, they were
more committed to the organization. Naja et al., (2011) found that job
satisfaction and organizational commitment mediated the relationship
between organizational justice and psychological empowerment.
Yan and Liping (1997) concluded that different managers have
no signicant difference in levels of organizational commitment,
job satisfaction, personality traits and turnover intention. Sharma
& Bajpai (2010) found that job satisfaction increases or decreases
based on increase or decrease in organizational commitment. Buki
Folami et al., (2014) found that job satisfaction and organization
context variables such as formalization, organizational inexibility,
and satisfaction with organization structure signicantly impact
organization commitment. Chang et al., (2015) conducted a study
on the relations between principals’ perceived autonomy support
from superintendents, affective commitment to their school districts,
and job satisfaction and found that principals are more likely to be
Management & Change, Volume 19, Number 2 (2015)
Luxmi Malodia, Ashu Vashisht 109
affectively committed to their school districts and more satised
with their jobs when they perceive their superintendents as more
autonomy supportive, thus, depicting a clear relationship between
job satisfaction and organization commitment.
H2c: Job satisfaction is positively related to organizational
commitment.
Job Satisfaction, Procedural Justice and Organization
Commitment.
Fatt et al., (2010) reported that the higher level of employee’s
perception towards procedural justice and distributive justice tended
to increase the level of employees’ job satisfaction and organizational
commitment, higher the level of employee’s perception towards
fairness to the means used to determine outcomes (procedural
justice) and fairness of the outcomes employees receive (distributive
justice) tended to increase the level of employees’ job satisfaction,
organizational commitment while reduces turnover intention. Kim
(2009) found that employees who perceived that their company had
behaved with justice tended to improve and maintain communal
relationships with the company. In addition, when employees felt
that they were treated fairly by their company, they were probably
to hold more commitment, trust, & satisfaction. Naja et al., (2011)
stated that organizations that take a proactive approach to understand
employee’s perceptions of distributive and procedural justice, and
provide appropriate working environment can potentially reap
benets including job satisfaction and organization commitment.
Zaman et al., (2010) found that justice dimensions namely procedural,
interactional and distributive justice foster job satisfaction and
commitment of the employees. In another study, Bakhshi et al.,
(2009) reported the positive and signicant association of distributive
justice and procedural justice with organizational commitment and
job satisfaction of medical college employees in India. Various other
studies justifying this relationship are: Akbar et al., (2006), Tekin &
Erturk (2015), Rivai (2015) and others.
Management & Change, Volume 19, Number 2 (2015)
110 Job Satisfaction Act as a Mediator between Procedural Fairness and
H3: Job satisfaction mediates the relationship between procedural
justice and organizational commitment.
CONCEPTUAL FRAMEWORK
Figure 1: Mediation Model Linking Procedural Fairness, Job
Satisfaction and Organizational Commitment
HYPOTHESIS
H1: There is high level of procedural fairness, job satisfaction
organizational commitment in few select public and private
sector banks under study.
H1a: There is high level of procedural fairness in few select
public and private sector banks under study.
H1b: There is high level of job satisfaction in few select public
and private banks under study.
H1c: There is high level of organizational commitment in few
select public and private sector banks under study.
H2: There is significant and positive correlation between
procedural fairness, organization commitment and job
satisfaction in few select public and private sector banks
under study.
Management & Change, Volume 19, Number 2 (2015)
Luxmi Malodia, Ashu Vashisht 111
H2a: Procedural fairness is positively related to organization
commitment.
H2b: Procedural fairness is positively related to job
satisfaction.
H2c: Job satisfaction is positively related to organizational
commitment.
H3: Job satisfaction mediates the relationship between
procedural justice and organizational commitment in few
select public and private sector banks under study.
RESEARCH METHODOLOGY
Sample and Data Collection
The current study employed the questionnaire survey approach
to gather data for testing the proposed hypotheses. The Primary data
for the study was collected using snowball sampling for analyzing
a sample of 100 respondents from public sector and private sector
banks amongst all the levels of employees.
Out of 100 respondents, the study comprised of 73 Male
respondents forming 73% of the sample survey and 27 Female
respondents forming 27% of the sample survey. In terms of age,
the study comprised of 41 respondents in 20s forming 41%, 10
respondents in 30s forming 10%, 20 respondents in 40s forming 20%,
29 respondents above 50 yrs forming 29%.
Tools for Data Collection
a) Procedural fairness- The Questionnaire developed by Scarpello
and Jones (1996) was used to assess employee perception
about the fairness of the procedure used for making pay related
decisions. It uses 15 items to describe the fairness of procedures
used for pay determination, pay communication, performance
appraisal, and appeal.
b) Job satisfaction– Minnesota Satisfaction Questionnaire with 12
Management & Change, Volume 19, Number 2 (2015)
112 Job Satisfaction Act as a Mediator between Procedural Fairness and
item subscales measuring intrinsic satisfaction & 8 item subscale
measuring extrinsic satisfaction.
c) Organizational Commitment– Questionnaire developed
by Meyer and Allen (1997) containing three-component
framework to measure organizational commitment (i.e. affective,
continuance, and normative) was used.
Statistical Methods
Statistical tools such as correlations, means, and regression analysis
were used to analyze the data. To nd mediation effect of job
satisfaction on dependent and independent variables mediated
regression analysis recommended by Baron and Kenny (1986) was
used for analysis.
RESULTS
The results drawn are presented in the tables and described below.
Hypothesis H1: There is high level of procedural fairness, job
satisfaction, organizational commitment in few select public and
private sector banks under study.
Table 1: Descriptive Statistics
The descriptive statistics in table 1 is used to show the level of
procedural fairness, job satisfaction, and organizational commitment
with their sub categories, thus it can be concluded that the three
Management & Change, Volume 19, Number 2 (2015)
Luxmi Malodia, Ashu Vashisht 113
variables procedural fairness, job satisfaction, and organizational
commitment show an above average level of satisfaction. The mean
of procedural fairness was calculated to be 3.71 and the standard
deviation stood at 0.43123 which denotes that the level of procedural
fairness amongst the organization is above average but the data varies
a lot around the mean. The mean of pay determination and standard
deviation stand at 3.67 and 0.52007 which shows an above satisfactory
level of fairness. The mean of pay communication was found to be
3.73 which indicates an above average level of fairness The mean of
performance appraisal stood at 3.7550 which shows a satisfactory
level of fairness as far as performance appraisal is concerned The
mean of appeal items is 3.6850 this shows that the organization tackles
the appeal issues quiet satisfactorily.
The mean or average of job satisfaction stands at 3.7133 and
the standard deviation at 0.50128 which shows an above average
satisfaction level among the employees in spite of the fact that the
data varies around the mean quiet a noticeable deal. Its sub variables
intrinsic satisfaction and extrinsic satisfaction are averaged at 3.6992
and 3.7275 respectively which also denote quiet a satisfactory level
amongst the employees towards their job.
The organizational commitment stands averaged at 3.2808 which
show a slightly below average commitment level from the employees
towards the organization. Its sub variable affective commitment stands
at an average of 2.9862 and standard deviation of 0.56934 which
indicates a below average level of commitment with the data varying
a great deal from the mean, whereas the normative and continuance
commitment show a satisfactory level with an average of 3.5 and
3.3563 respectively.
Hence Hypothesis H1: There is high level of procedural fairness,
job satisfaction Organizational Commitment in few select public
and private sector banks under study; H1a: There is high level of
procedural fairness in few select public and private sector banks
under study; H1b: There is high level of job satisfaction in few select
public and private banks under study; H1c: There is high level of
Organizational Commitment in few select public and private sector
Management & Change, Volume 19, Number 2 (2015)
114 Job Satisfaction Act as a Mediator between Procedural Fairness and
banks under study have been proved to be true.
According to the study it can be deduced that the three variables,
i.e., procedural fairness, job satisfaction, and organizational
commitment are maintained at a satisfactory level throughout the
four organizations and both the sectors. It is observed here that the
sectors, public as well as private, have been able to maintain an above
average level of fairness regarding their procedures and hence have
gained an equal level of satisfaction and commitment from their
employees. The organizations have been successful in being fair to
their employees as far as their procedures like pay determination, pay
communication and performance appraisal. These organizations have
been open regarding their pay policy as all the information regarding
the same is posted on their website which every employee using his
identity card can access and the process for appraising performance
is also disclosed to their employees hence they have a decent level
of fairness regarding the procedures they follow. It is because of this
fairness that the employees have an above average satisfaction level
towards their job which in turn leads to commitment towards the
organization.
H2: There is signicant and positive correlation between the
procedural fairness, job satisfaction and organization commitment
in few select public and private sector banks under study.
Table 2: Correlations
Management & Change, Volume 19, Number 2 (2015)
Luxmi Malodia, Ashu Vashisht 115
The results of Pearson’s coefcient of correlation shows a
signicant and positive correlation between procedural fairness and job
satisfaction (r= 0.642, p=.000); Procedural fairness and organization
commitment (r= 0.460, p=.000); job satisfaction and organization
commitment (r= 0.734, p=.000) as getting p value or signicant level
less than 0.01. Thus, it can be concluded that the three variables have
a signicant positive relationship with each other. The results proved
that there exists a positive as well as a signicant relationship between
procedural fairness, job satisfaction and organizational commitment
which showcases a reciprocatory relation. Hence, Hypothesis H2:
There is signicant and positive correlation between the procedural
fairness, job satisfaction and organization commitment in public and
private sector banks; H2a: Procedural Fairness is positively related
to organization commitment; H2b: Procedural fairness is positively
related to Job satisfaction; H2c: Job satisfaction is positively related
to organizational commitment have been proved to be true.
The results were supported by various studies such as: Korsgaard
et al., (1995), Chan et al., (2008), Siegel et al., (2005), Lavelle et al.,
(2009), Leow and Khong (2009), Al-Shammari and Ebrahim (2014),
Ferreira (2014), Oppenheimer and Roberto (2014), Trivellas et al.,
(2015), Yao & Fan (2015), Piaralal et al (2015), : Daileyl & Kirk
(1992), Moorman et al., (1993), Schappe (1998), Akbar et al., (2006),
Yamazaki et al., (2015), Chang et al., (2015).
H3: Job satisfaction mediates the relation between procedural
fairness and Organization commitment in few public and private
sector banks under study.
Management & Change, Volume 19, Number 2 (2015)
116 Job Satisfaction Act as a Mediator between Procedural Fairness and
Results of Mediated regression analysis by Baron and Kenny (1986):
Testing the mediating effects of job satisfaction on procedural
fairness and organization commitment.
To test the mediation, we adopted mediated regression analysis
recommended by Baron and Kenny (1986). According to Baron and
Kenny (1986), there are three conditions whose fullment is essential
for the existence of mediation.
Table 3 presented above highlights that every condition necessary
for mediation was satised.
The steps adopted for mediation analysis are discussed below:
Step-1: Coefcient of procedural fairness was found positive and
signicant for job satisfaction (β = 0.642, p ≤ 0.001), and 64.2% of the
variances in procedural fairness was explained by job satisfaction.
Step-2: Coefficients of job satisfaction was found positive and
signicant for organization commitment (β = 0.734, p ≤ 0.001)
and 73.4 % of the variances in job satisfaction was explained by
organization commitment.
Step-3: Coefcients procedural fairness of was found positive and
signicant for organization commitment (β = 0.46, p ≤ 0.001) and
46 % of the variances in procedural fairness was explained by
organization commitment.
Step-4: when job satisfaction and procedural fairness was entered
simultaneously into the regression equation as independent variables,
β coefcient related to procedural fairness no longer remained
signicant. However, job satisfaction still had signicant and positive
impact on organization commitment (β = 0.746, p ≤ 0.001).
The results depicted that job satisfaction fully mediated
the relationship between procedural fairness and organization
commitment. R square (R2) is the proportion of variation in the
dependent variable which can be explained by the independent
variables. This is an overall measure of the strength of association
Management & Change, Volume 19, Number 2 (2015)
Luxmi Malodia, Ashu Vashisht 117
and does not reect the extent to which any particular independent
variable is associated with the dependent variable. In this model,
73.4% of the variation in organization commitment was explained
by the independent variables. Hence,
Hypotheses H3: Job satisfaction mediates the relation between
procedural fairness and Organization commitment in public and
private sector banks was fully supported.
The reason for such behaviour may be fair communication of
pay and policies by the organizations well in advance to employees.
The employees scored high on appealing performance evaluations
by their organization and performance which is reected in their
pay, thus leading to procedural fairness in the organization. When
the employees get a chance to do different tasks and were given full
freedom to utilize their abilities for a dynamic performance and steady
employment with pay equating with amount of work done; which in
turn leads to high job satisfaction which in turns leads to committed
employees who feel guilty in leaving their present jobs. Various
other factors that were found for positive results were co-operative
co-workers, supporting management, competence of supervisor, good
working conditions, higher chances of advancement at work, freedom
to choose different work methods, praise for good work and feeling
of accomplishment, an identication with the goals and values of the
organization; a desire to belong to the organization; and a willingness
to display effort on behalf of the organization and last but not the least
fairness in procedures adopted were found to be major catalyst for
fostering job satisfaction and organization commitment. The results
were supported by various studies such as: Kim (2009), Bakhshi et
al., (2009), Fatt et al., (2010), Zaman et al., (2010), Naja et al.,
(2011), Akbar et al., (2006), Tekin & Erturk (2015), Rivai (2015)
and others.
CONCLUSIONS OF THE STUDY
It was concluded that there exists a signicant positive relation
between procedural fairness and job satisfaction and organizational
commitment. The study further suggested that job satisfaction
mediated the relation between procedural justice and organizational
Management & Change, Volume 19, Number 2 (2015)
118 Job Satisfaction Act as a Mediator between Procedural Fairness and
commitment. It can be understood as if the organization is fair
and transparent in its procedures regarding various areas like
performance appraisal, pay determination, pay communication etc,
then it will lead to building of employees’ trust towards the working
of the organization and hence they start believing in the way the
organization works this results in the employees feeling a sense of
belonging to the organization and feel satisfaction towards various
aspects of their job. This whole sense of belonging which they acquire
leads to commitment towards the organization, that is, they want
to stick around and serve the same employer rather than looking
for options and shifting between organizations. Thus in order to
increase organization commitment in employees organizations must
strive for fairness in procedures and methods should be adopted for
increasing job satisfaction among employees for better productivity
and other positive outcomes to gain competitive advantage. Results
revealed that the type of sector in which the organization exists has
insignicant impact on procedural fairness, job satisfaction as well
as organizational commitment of an employee.
LIMITATIONS
There are some limitations to this study. Apart from the self-
reported nature of the data, the small sampling of the study imposed
limitations as obtained results may not be generalizable to the other
organizations. Furthermore, cautions should be taken while using
the results in different cultures, as the study has been conducted
specically in Indian context, so is important to note that future
researchers should be cautious when generalizing the results to
different cultural contexts.
IMPLICATIONS
The level of procedural fairness prevailing in an organization
can be increased if more transparency brought about regarding
various processes like performance appraisal, pay determination,
communication of pay details etc. The level of job satisfaction
amongst the employees can be increased to a very high level if
intrinsic satisfaction factors like chance to do different things,
chance to be “somebody” in the community etc. are focused upon
Management & Change, Volume 19, Number 2 (2015)
Luxmi Malodia, Ashu Vashisht 119
so as to increase the sense of belonging of the employee towards
the organization, thereby increasing organization commitment
of employees. The results of the present study can be implied in
practical sense in the organizations including the banking sector,
where managers must utilize various methods and strategies to
foster fairness in various procedures so that employees feel a sense
of belongingness and loyalty towards the organizations and feels
satised by various intrinsic and extrinsic factors. The satised and
committed employees act as a strategic advantage which in turn leads
to a productive organization.
DIRECTIONS FOR FUTURE RESEARCH
In order to carry out any future researches the sample size can be
extended so as to obtain a clearer picture regarding the relationship
between procedural fairness, job satisfaction and organizational
commitment. The variables studied have a great range of sub variables
which could be studied on an individual basis so as to obtain in-depth
knowledge regarding both the main as well as the sub variables. The
future researchers are recommended to carry out further study on
these variables in other sectors such as telecom, insurance, education
sector, or hospitality sector. Also, role of moderators can be studied
to get a better understanding of the variables under study.
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Management & Change, Volume 19, Number 2 (2015)
STORYTELLING IN BUSINESS: AN EFFECTIVE BRAND
COMMUNICATION TOOL
Pooja Jain1 Yukti Ahuja2
The art of storytelling has been a part of the Indian tradition since
eternity. It has travelled generations with its power to mesmerize
and entice the audience. With creativity brimming around brand
building, several opportunities have surfaced in the past few years.
Marketers are now trying to weave a storyline that inspires the
actions, beliefs and behaviors of the target audience. The meteoric
growth of content marketing in the last few years has contributed
to the relevance of communicating and sharing stories. Brands
have successfully captured the audience’s hearts with innovative
and alluring stories. A story can narrate much about a Brand and
its bearing. This research paper seeks to address the relevance of
Art of storytelling in the modern day marketing space. The work
deliberates upon the signicance of telling a story and drawing
audience attention, it discusses how storytelling can impact
customers’ emotions and aspirations. It suggests the base model
of a comprehensive communication campaign which is applicable
across sectors. The research work explores the concept with the
help of literature readings in journals, magazines and other online
resources. It studies brands which have incorporated storytelling
and analyzes the implications. The study showcases the potential
of storytelling in creating a positive impact and has takeaways for
marketers, researchers and academicians who can build upon
this research endeavor through both qualitative and quantitative
studies.
Keywords: Storytelling, Branding, Marketing
INTRODUCTION
“The universe is made of stories, not of atoms,” poet Muriel
Rukeyser famously said.
1 Assistant Professor, Management, Jagan Institute of Management Studies, Rohini sector 5, Delhi –
110085, India. Email: poojajain@jimsindia.org
2 Assistant Professor, Management, Jagan Institute of Management Studies, Rohini sector 5, Delhi –
110085, India. Email: yukti7884@gmail.com
Management & Change, Volume 19, Number 2 (2015)
132 Storytelling in Business: an Effective Brand Communication Tool
Storytelling is a treasured part of childhood memories. It is
an art which gives voice to human expression. Stories can provide
consistent and compelling content to build a picture. The narratives
weaved together facilitate thinking and action. Storytelling predates
writing and in its earliest forms was primarily oral but complemented
by gestures and expressions. The enactment of stories along with
music, rock art and dance became popular formats of representing
stories. The oral narrative era was followed by paintings, carved
pottery, palm-leaf books, bark cloth, paper, silk, canvas, and other
textiles. The modern day story telling has invaded the digital media
and all electronic formats completely. From a social congregation in
rural India to gossips in the urban Indian kitty parties, storytelling
has been an elementary pillar of evolution in the cultural context.
People get engrossed in the storyline and characters which set their
heart pumping and emotions owing. Stories help memorising things,
events and messages. As human beings tend to join the dots and put
things in context, retaining things through a series of events is always
better since such episodes live longer and stay vibrant deep within
subconscious minds.
In the last few years there have been several studies on how
stories can impact human mind. Results of such studies have
showcased that consumers’ attitudes, fears, hopes, and values are
strongly inuenced by story lines. Marketers are constantly trying
to weave a storyline that inspires the actions, beliefs and behaviors
of the target audience. Yahoo! and BBDO did a joint study which
revealed that 95% of consumers “crave” engagement with brands
and that leveraging storytelling on paid, owned and earned media
(POE) “through the prism of a dating relationship” will increase
marketing success (Brand Channel, 2011). When consumers see
factual arguments and discussions, they try to read between the lines
and become critical and skeptical. But in a story people generally
take off their intellectual guard and get carried away with the ow.
Stories hit the emotional chord. Vanilla advertising and story woven
advertising are distinguished by the effect each has on the audience.
The creative conjures up because stories give situations which
command deep seated involvement. In the marketing arena, story-
telling has acquired a gigantic status.
Storytelling endows two things upon a message, a narrative and a
Management & Change, Volume 19, Number 2 (2015)
Pooja Jain, Yukti Ahuja 133
personality. Storytelling can be done through a blog, packaging, video,
advertisement or product itself. A story can be a part of a campaign or
a complete campaign in itself. Apple’s “think different” story line is a
classic example of a story which has a heroic element of its founder,
displaying the persona of a rebel. Steve Jobs has been an amazing
storyteller who capitalized on the power of stories as a guiding
principal for product development and marketing. The Bournville
cocoa beans advertisement showcases the chocolate makers attempt to
get the beans from the deepest depths of Ghana adds to the credibility
of the Brand. When people trust the story, they begin to trust the
product too. Only trust and faith in a brand have the potential to
break the noise and clutter of ubiquitous marketing. Another brand
that has story telling in its DNA is Patagonia. It believes that the
most contribution in building stories is by its customers. Every year,
customers send more than 80,000 photographs of themselves doing
the things they love—wearing Patagonia gear. And the results bespeak
the success of the idea that customers have now started sharing their
failure stories as well. A recent issue of the catalog featured stories of
failure—written by climbers who couldn’t complete their expedition.
And between the customer stories are photos and descriptions of
the gear that makes it all possible. The most important part of these
stories is that they aren’t about Patagonia. Just inspirational images
and stories about what their customers love to do. This creates an
impact which supersedes marketing communication effort by an
organization and lays the foundation for strong bonds.
REVIEW OF LITERATURE
In the last few years there has been an increase in storytelling
research (Adaval and Wyer, 1998, Benjamin, 2006, Mattila, 2000,
Mossberg and Nissen Johansen, 2006, Woodside et al., 2008).
Research related to brand stories investigates consumer experiences,
consequences of product use (Chang, 2009, p.22), or story content
in advertising (Stern, 1994). Sources which have been searched for
nding content for stories include travel blogs (Hsu et al., 2009,
Woodside et al., 2008), Harry Potter (Brown and Patterson, 2010) and
consumer blogs. Stories fascinate the customers because they breathe.
The narratives can set the tone for emotional conversations which can
motivate and retain customers. The mode of communication could
be packaging, websites, e-newsletters, blogs, brochures, magazines,
Management & Change, Volume 19, Number 2 (2015)
134 Storytelling in Business: an Effective Brand Communication Tool
and social media channels.
Stories are built on a plot with a defined setting, chosen
characters, and are structured from beginning to an end. (Ruger,
2010). Communication done with the help of images creates a better
understanding in the human mind. Authors such as Brown & Patterson
(2010) opine that marketers are realizing that customers do not want
to see and hear boring content and they our working on building
interesting storylines. Research indicated stories based on good versus
evil, suspense, surprise or strife elements are keeping the consumers
engrossed and interested. Stories are more engaging, more relatable
and are memorable as compared to facts. Stories have the potential to
mold both the mind and the emotions of their consumers positively
towards the brand. Chiu et al., (2012) identify that positive impacts
can be created on brand attitude and purchase intention with stories
targeting emotions and feelings.
Brand stories which are told well, have the potential to inuence
consumers’ brand experience. This consists of all the “sensations,
feelings, cognitions, and behavioral responses evoked by brand-
related stimuli that are part of brand’s design and identity, packing,
communications, and environment” (Brakus et al., 2009, p. 52). Many
authors in their research have highlighted the power of storytelling
(Woodside, Sood, Miller, 2008; Fog et al., 2010; Baker, Boyle,
2009).
The stories written by consumers are widely circulated however
rms can also create their own stories. Such brand stories are esteemed
to be inuential, especially in services (e.g., Mossberg and Nissen
Johansen, 2006). With creativity brimming around brand building,
several opportunities have come to the forefront. Little work has been
done in the eld of quantitative assessment of storytelling impact for
rm originated stories. Merchant et al., (2010), studied the effects of
rm-originated stories on donors’ (negative) emotions and intentions,
and concluded that story content affected both.
Consumers remember stories and experiences over facts and
features. Companies that do not tell a compelling and consistent
brand story that speaks to both the rational and the emotional needs
Management & Change, Volume 19, Number 2 (2015)
Pooja Jain, Yukti Ahuja 135
of the audiences risk creating a shallow, short-term brand that is easily
destroyed by external factors (Herskowitz, Crystal, 2010). The birth
of the brand, the brand philosophy, the brand resilience, the brand
strength, success and many such things can become a part of the brand
story. To build on the opportunities that today’s hyper connected,
socially active consumer and multiple distribution channels offer,
brands need to move away from developing maneuvered content and
encourage true storytelling. A successful brand must narrate its journey
to its patrons. It’s the glue that holds all brand’s actions and words
together. Just as the story of a hero on an epic journey can help readers
see the meaning of life’s struggle, stories about particular business
challenges can help buyers see the value of a product that helps
them solve those challenges. A strong partner for brand storytellers,
especially if we consider the destination brands is, or should be,
the media (Fog et al., 2010, 206-208). The more competitive the
environment, the greater the challenge to wade through it and that
makes the concept alive and relevant at all times.
Very little scholarly attention has been done on qualitatively
studying the concept of storytelling and brand building in India. This
study focuses on fundamental concept of storytelling in creating and
strengthening brand awareness. Storytelling is being increasingly
used to connect with consumers by using stories about them, stories
that relate to them and stories that celebrated them. As India moves
towards a more mobile-driven economy, there is a huge potential
for video consumption over affordable data plans. Brands now
communicate with the help of digital storytelling lm launched on
social media rather than a smaller curtailed version of 30 seconds for
television audiences. Marketers are using digital platforms to build
their brands and digital marketing relies on developing fresh ideas
that focus on reaching a target audience with a powerful story.
RESEARCH METHODOLOGY
The paper is an honest endeavor to study the concept of
storytelling from evolution to its execution. The study is exploratory
in nature owing to the contemporariness of the subject and dearth of
relevant literature especially in India. The input has been collated from
various journals, newspapers, magazines and company websites. The
Management & Change, Volume 19, Number 2 (2015)
136 Storytelling in Business: an Effective Brand Communication Tool
work deliberates types of stories and some campaigns which have
won people’s heart in present times. The paper proposes a model for
executing the concept in business to get competitive advantage in
highly competitive markets. Both qualitative and quantitative research
are strongly recommended as dimensions for future study.
Following objectives were considered for the study-
• To study the progression of storytelling concept to its modern
day avatar in marketing communication
• To discuss the different sorts of story lines and some popular
story telling campaigns along with their implications
• To propose a model for an appropriate execution of storytelling
in the process of brand building.
BRAND STORIES: THE TYPES
In order to remain relevant in a changing market environment
crafting a brand story which denes and expresses the core truth
of an organization is a potent tool. Marketers should leverage the
opportunities in the new media landscape and transform one-way
storytelling into dynamic storytelling hoping to add value and
signicance to consumer’s lives. There is always a challenge of
creating content in storytelling such that every touch point with a
customer should tell that story. It is important to create contagious
ideas to encourage customers’ emotions leading to conversations.
Brands can emphasize transition from a functional preposition to
an emotional one. Brands can share about themselves, about their
heritage, journey of existence and much more.
Some popular techniques in storytelling are:
1. Brand rejuvenation: Brands narrate stories of their creative
regeneration. Mahindra Holidays revamped their website to
focus on customers sharing their holiday experiences with the
brand rather focusing on hotel reviews or rating points.
2. Overcoming the rival: Marketers try to portray their brand
or the company in a better position as against its competitors.
Management & Change, Volume 19, Number 2 (2015)
Pooja Jain, Yukti Ahuja 137
Brands create stories that showcase their improved business
performance. Tata Motors’ Commercial Vehicles TVC campaign
in 2012 “Ek Kadam Aagey” conveys the company’s philosophy
of staying ahead of people’s needs and developing products that
live up their expectations and have the potential to surpass the
expectations. The idea of the campaign is to bridge distances –
literally and those between one’s dreams and reality.
3. Emotional: Appeal to the emotions of customers by developing
an experience narrative which is very different from making
a cold sales pitch. Such a Story should get customers heart
pumping and emotions owing. Successful brands move beyond
the core product offering and develop a consumer feeling like
McDonald’s knows that most cheap burgers are all the same, so
its advertisement sells an attitude, not just a burger. Louis Vuitton
celebrates a travel lifestyle, not just a bag. Such initiatives turn
a product into ego-feeding aspiration and an attitude for living.
Airtel launched in 2012 their ‘Internet Hai Toh Friendship
Hai...Friendship Hai Toh Sharing Hai, jo tera hai wo mera
hai’ campaign motivating the emotions of togetherness among
youngsters.
4. The Path Story: Narrates the peaks and troughs of Brand’s
journey in the market place from inception till date. Brand
represents the intellectual and emotional associations that people
make with a company, product or person.
5. Inspirational Story: Inspirational stories touch the heart
and soul of consumers and make a difcult concept easier
to understand. Shahrukh Khan endorsing the Fair &
Handsome brand talking about his own journey of Stardom
and how the product is responsible for attining limelight and
success in his life. Campaign motivates consumers to increase
their aspirational thirst and persuade them to move up in life.
6. Humorous: A well-crafted humorous story can arouse emotional
response from the customer. These brand stories are retained in
consumer’s long term memory. Humorous stories are hard to
make but are hugely popular in advertising.
Management & Change, Volume 19, Number 2 (2015)
138 Storytelling in Business: an Effective Brand Communication Tool
7. Patriotic: Amul campaign told the story of history of India.
The feeling of patriotism captivates hearts of many people.
Brands create a sense of national pride and association among
the consumers through patriotic storytelling.
8. Heroic: Hero MotoCorp TV Commercial Ad campaign ‘Hum
Mein Hai Hero’ charged the batteries of the Indian consumers by
inspiring them to do things they aspired for long. An inspiring
and heart touching video was beautifully composed by A.R.
Rehman.
Stories are essential to a brands success as they compress a
product narrative to the heart of the brands, carrying the essence of
message.
STORYTELLING CAMPAIGNS
Today consumers look for deeper and engaging experience
with the organization. Storytelling campaigns create a platform for
consumers to share their moments of happiness and joy with the
brand. Using real people in a brand’s communication in the right
context and manner can make the communication more relatable
and effective. It is prudent to have a strong brand idea and message
owing to increasing consumer awareness about rampant civilization.
A real story from consumers’ lives has taken storytelling to a whole
new level. Several campaigns inviting consumer’s opinions, stories,
experiences have been adjudged to be more powerful than a made
up commercial. Some campaign making are discussed here.
Air India
The airline decided to get a cross section of its actual users to
endorse the brand. Air India developed an advertising message by
entailing their corporate clients like Tata Services, Skoda and SBI
life senior executives, who were their frequent iers to endorse the
brand by highlighting different features like in-ight entertainment
and more legroom to outsmart their competitors (Economic Times,
Nov 14, 2012). By using real customers, Air India tried to deliver
the consumer side of the brand-story in a credible manner. Many
would argue that this could be a double-edged sword especially for
a brand that has been constantly in the news, and not always for
Management & Change, Volume 19, Number 2 (2015)
Pooja Jain, Yukti Ahuja 139
the right reasons. Using real people in a brand’s communication in
the right context and manner can make the communication more
relatable. Stories straight from the consumers lend greater credibility
to brands
Marico Hair fall Shampoo
Marico launched an anti-hair fall product in an already cluttered
market. Assuming that consumers trusted each other more than they
trusted marketers, they let the consumers tell the story themselves
to other consumers. This added credibility to the campaign and this
brand advocacy led to successful storytelling. Marico benetted from
this campaign by getting double- digit market share in an already
crowded market.
Coca cola
Coca cola has tried to move away from creative excellence to
content excellence by adopting storytelling. They are engaging with
their customers with fresh and relevant content twenty four seven.
Rather than relying on traditional advertising agencies for ideas, they
crowd sourced fans on Facebook and Twitter to create content for coke
by sharing their experiences. They created compelling content which
added substance and value to people’s lives. Their content was mix of
slide share articles, images, infographics and videos with easy social
sharing functions. Coke created 120 different pieces of content for
London 2012 Olympics campaign. They announced a 45% rise in
global revenues to $12.2 billion and 8% rise in their prots to $2.2
billion in third quarter of 2012. A campaign liquid and linked was
launched by coke with an objective of explosion of ideas that linked
with customers’ interest and objectives. This attracted an average
1.2 million unique visitors per month and 40, 000 shares. They have
been able to create emotional connections with content leading to
conversions at lower costs over time.
Google India
Google India launched a reunion Ad campaign in 2013 where
Google search acts as a facilitator between two childhood friends
separated by the 1947 India-Pakistan partition by reuniting him with
his childhood friend (who is now in Pakistan) after over 6 decades
of separation. With “Reunion” campaign, Google reinforced their
Management & Change, Volume 19, Number 2 (2015)
140 Storytelling in Business: an Effective Brand Communication Tool
mission by telling a relatable customer story about how it operates.
The campaign received over 4 million YouTube hits in under a month,
encouraging Google India to launch a successive series of smaller
ads based on the similar narrative.
Lifebuoy
An ad campaign featuring Gondappa’s story was launched in to
raise awareness on hand washing and personal hygiene, with the larger
goal of eradicating diarrhoea in Indian villages. It was exclusively
used for its Facebook fans and it quickly spread onto other social
networks. The ad campaign received 1.5 million views in the rst
three weeks of being launched. It even found itself in second place
at 16 million views in the list of ’10 most viewed ads on YouTube in
2013’. An emotional connect was established by using storytelling
and purpose of existence of the brand was established.
Volkswagen
Volkswagen launched “Why VW” social media campaign to
capture and share stories of VW customers in a whole new way. The
brand realized that the stories people had about Volkswagen and the
moments they had with the product were never curated. The campaign
was committed to give meaningful engagement and experience
sharing. VW used Facebook for ease of publishing, sharing and
nding stories. The most compelling content won perks such as free
event tickets or Volkswagen gear. The unique selling point of this
story telling campaign was its capability of integrating VW’s content
with the real life experiences. If a visitor wanted to learn about VW’s
performance of a specic model, they could see all factual information
but alongside they saw relevant consumer stories. The company was
able to win the hearts of Americans with the campaign.
L’oreal India
L’oreal India’s “swipe to spice” Twitter campaign invited viewers
to use the product Baby Lips and post their pictures with quirky
Bollywood lines. Sales went up by 30% for this aspirational category
product with the campaign’s success.
Management & Change, Volume 19, Number 2 (2015)
Pooja Jain, Yukti Ahuja 141
STORYTELLING: THE EXECUTION
The campaign should not only be carefully planned but well
executed too. Any storytelling campaign should comprise visual
effects in which marketer should show how the product can benet
the users and how values of the company demonstrate this through
their unique brand personality. Rather than the reasons of purchase
brands focusing on the experience associated with usage of product/
brand and emotions attached with the purchase can have a signicant
impact. A consistent image and good values through every touch
point reect trust and authenticity. A brand should add value to the
target audience lives and brand association should be a memorable
experience for the consumer.
While executing a storytelling campaign one assumption is that
customer is always on the lookout for his takeaway. Though narrative
always helps making sense of the world around, it is imperative that
stories have a stickiness factor. They should be simple, concrete,
credible and emotional which will make them easily transmittable,
tangible and notable. By drawing on real life examples and telling
stories through characters that audience can resonate with, the stories
will become popular. There are several dimensions which need to be
explored before a story is build or even thought of. Before making
a plan, the “what” of storytelling should be at the heart of all efforts
and focus of all deliberation. What is the brand? What is the product
type? What is the vision and mission of the company? What is the
core competency of the rm? What does the organization take pride
in? Whether the story is happy or sad, serious or humorous, old or
new, long or short, the customers should get enticed to the content.
They should be hooked on to it. Their presence can be ensured by
teasers like “watch this space,” “see the sneak preview,” “like this
page to nd out more”. Meaningful, consistent content across multiple
channels, gives people a reason to stay. In the multi-media marketing
environment, stories craft a valuable engagement with the customers.
All the values should be connected in a story so that customer
engagement enables customers to become brand fans. These fans will
share brand images and eventually become brand ambassadors.
Many brands use storytelling but fail to connect to their audience
Management & Change, Volume 19, Number 2 (2015)
142 Storytelling in Business: an Effective Brand Communication Tool
in the way that brand makers intend. Why do brands either connect of
fail to connect? If the communication made to the customers does not
follow a synchronized pattern there is a strong possibility that it will
fall at on its face. An attractive story campaign should begin with
chasing the customer’s attention. It can be inspirational, persuasive,
motivating, entertaining or simply interesting. Once the listener or
reader experiences the weight in conversation, he starts looking for
trust and authenticity. If the customer believes in the organization’s
claim then he can share with others, add content, give ideas and lastly
develop a meaningful relationship with the brand. Important stories
that precede these are stories of the choices made and the freedom to
make those choices. The brand should communicate stories that enable
trust and authenticity and make the brand the “Brand of choice”.
STORYTELLING: THE PROPOSED MODEL
Good advertising has always told stories about brands, but
lately the business model themselves become a brand story. In the
last decade most powerful stakeholder in any business has been the
customer. Also most communication is through word of mouth than
any other form of media. The enterprise business model itself is
on how stories are told and how brands are connecting. The Story
telling process is all about making the brand look comprehensive and
compact yet impactful. For every company it is necessary to develop
a framework that unies its brand image in the market and connects
easily with the customer. One of the models that can work across
organizations and products is suggested here.
Step1: Create Content
Creating content that can capture the audiences’ attention, it is
recommended to share a story that is worth telling. It must be aligned
with one’s brand values & vision. Keeping in mind- the setting, the
Management & Change, Volume 19, Number 2 (2015)
Pooja Jain, Yukti Ahuja 143
time, place and context followed by the brand as a character, including
its role in the life of the audience. Next is developing the narrative
that includes actions, desired experiences, events etc. and ending it
with adding authenticity with metaphors, symbols and voice of the
brand.
Step2: Communicate Content
It is essential to communicate the content in a format that is
suitable for all types of media. The message should be spread in the
lower media like television and newspapers and in the uid media like
internet and retail stores alike. The story should cut across times and
generations so that everyone nds it relatable. The focus of a brand
story is to guide the communication both internally and externally to
indicate the same brand image, values and vision. This image must be
maintained for employees as much as for customers. If the brand has
a story, their story shines through all associated brand communication
materials and touch points.
Step3: Customer Engagement
Though capturing the share of the mind is at the heart of brand
positioning; brand story telling is about conquering all ve senses.
It is at this stage that the narrative leaves the strategy of one way
communication and dons the interactive mode. When the interaction
happens between the customer and the organization, co creation
happens. It is the most valuable stage of strategic story telling. The
engagement happens at all touch points. People get involved in their
stories, cultures and experiences; this adds value to the content.
The brand attains relevance at every step in the consumers’ lives.
Audiences get completely engaged with such brands- emotionally
and rationally and build some unforgettable memories for themselves
and the brand.
CONCLUSION
This work tries to analyze the potential of storytelling for
molding customer’s emotions favorably towards the brand. The study
signies that marketers not only need to create an effective story but
Management & Change, Volume 19, Number 2 (2015)
144 Storytelling in Business: an Effective Brand Communication Tool
also build an engaging experience through content which is inspiring
and relevant. The challenge is for marketers to have less rewalls
and more open conversations with consumers. The takeaway for
marketers is that emotions lead to actions as human beings are moved
when their emotions are nurtured. It is important to touch the hearts
of people because customers’ purchases are inuenced more by heart
than mind. The challenge is now for marketers to have less barriers
and more open conversations with consumers. Marketers need to look
at a different kind of ecosystem of not just better stories or content,
but also need to redesign the business model itself. Consumers have
the power to change the enterprise business model.
The initiative to capitalize on consumer engagement will be
through deep analysis of data and its application in the marketplace
in a way that will create a pertinent, customer experience.
On the academic front, the concept adds to the body of knowledge
related to brand building through customer engagement. It echoes the
belief that in this competitive market, customers must be taken on a
journey which is everlasting and forges a deep human connection.
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com/2010/03/storytelling-in-business-how-can-it-benet-you.
Shayon, S. (2011) Yahoo!/BBDO: Leverage Storytelling to Build
Passion Brands, Brand Channel http://www.brandchannel.com/
home/post/2011/10/05/bbdo-yahoo-brand-storytelling-research.
aspx
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BOOK REVIEW
Manfred. B. Steger, Globalization: A Very Short Introduction,
New Delhi: Oxford University Press India (I Floor, YMCA
Library Building, Jai Singh Road, Connaught Place, New Delhi,
Delhi 110001, 3rd edition, 2013, Pages ix + 176, Price: $191.00,
ISBN-10: 0199662665, ISBN-13: 978-0199662661
Globalization has taken the experts all over the world by surprise
due to the theatrical increase in its pace over the past few decades.
Last decade has experienced large amount of speculation around
the word “Globalization”. Just the way “Democratization” changed
the world in the twentieth century, the same is being expected from
“Globalization” in the twenty rst century. However, the benets
of Globalization have reached the people in the world in a very
heterogeneous fashion. Though people in the developed nations of the
world have gained more economic, cultural, educational and social
benets, people in the developing nations are still trying to understand
Globalization in its true context. They are still getting marginalized
on a large number of parameters. This increasing disparity, and, the
marginalization of the developing and under- developed nations,
are one of the major reasons for experts to view Globalization with
skepticism. Moreover, it is somewhat impossible to arrive at a single
unanimously agreed denition of the word “Globalization”. As a
result, different authors have written about the subject and justied it
from different perspectives thereby resulting in a signicant number
of publications on the subject.
In a broader sense, it is nothing less than a revolution that
though in 1900 not even a single country in the world had universal
adult franchise, today seventy percent of the countries in the world
have universal adult franchise (according to the United Nations
Development Program ). This is just one of the many other success
stories that highlight the impact of Globalization. But it still remains
a debate with the experts whether the pros of Globalization are more
than the cons or vice versa. A large number of experts are trying to
justify Globalization as a harmless, developmental phenomenon by
citing success stories and linkages to various predominant phenomena
Management & Change, Volume 19, Number 2 (2015)
148 BOOK REVIEW
in the world. One such attempt has been made by Manfred B. Steger
who has tried to cover Globalization from a three sixty degree
angle.
In this context, the book by Manfred B. Steger manages to covers
the concept of Globalization from multiple dimensions – economic,
political, cultural, and ideological. This book is also supplemented
with many distinct illustrations, graphs and charts trying to add more
visual connotations to a subject like Globalization. An attempt to give
visual connotations to Globalization is quite unique and comes across
very handy for readers.
The book is very well structured and ows from one dimension
of Globalization to another effortlessly. It is organized into eight
chapters. Each chapter covers a different aspect of the subject and
focuses on one concept at the time. The examples mentioned in the
chapters are highly relevant and have been used at the right places
to generate a meaningful connection with the debate. The ow of the
book is such that the early chapters primarily focus on the debate that
whether Globalization really is a new phenomenon or is it a part of
a gradual evolution from the past thousands of years. Steger tries to
convince the readers by using the examples of past inventions whereby
ideas that originated in one part of the world were transferred to the
neighboring countries and adopted by them. Invention of the wheel
or writing, are the two examples that occupy prime focus in the
discussions. According to Steger, viewing globalization as a uniquely
modern phenomenon born of the age of passenger-air travel and global
electronic communications is frenzied. According to him, it is more
viable to see the present interconnected world as just the latest in an
inevitable process.
This book is synchronized into eight chapters each covering a
different dimension of Globalization.
Chapter 1: Globalization – A contested concept aims to give
a near to perfect denition of Globalization. It is largely being
associated with social concepts and social processes. The concept has
been compared to the story of the elephant where six blind people
touch the elephant and each have a different perception of it. Similarly,
Management & Change, Volume 19, Number 2 (2015)
BOOK REVIEW 149
it is being elucidated that for each person/academician/scientist,
Globalization has a different meaning and scope. The chapter sums
up by raising the question whether Globalization is the phenomenon
of modern age or not.
Chapter 2: Is Globalization a new phenomenon? emphasizes
on the fact that the world today is as connected as never before. The
industrial revolution and, now, the technological revolutions have
made the world smaller and more linked. This chapter then divides
the history into different periods: The Prehistoric Period, The Pre-
modern Period, The Early Modern Period, The Modern Period and
The Contemporary Period (from 1970) and takes incidences from all
these to prove that Globalization has always been in existence though
in different ways. It is the present era that gives it more visibility and
relevance.
Chapter 3: The Economic Dimension of Globalization primarily
focuses on Globalization from various economic concepts. It starts
the debate from the emergence of economic order tracing back to
the end of World War II. Moving forward to the Internationalization
of Trade and Finance, it highlights how Globalization had increased
the world trade from $ 57 billion in 1947 to $ 6 trillion in the late
1990’s.
Chapter 4: The Political Dimension of Globalization takes
the Security Council of the United Nations an illustration to dene
Globalization from political dimensions. It challenges the idea of
Political Globalization vs. Cosmopolitan democracy. It concludes
that there is a worldwide intensication of political and economic
dimension which has a great dependence on the cultural dimension
of Globalization which is discussed in the following chapter.
Chapter 5: The Cultural Dimension of Globalization. The term
“culture” has been used to describe human experience. The strong
cultural interconnections and interdependencies in the last decades
have led some experts to suggest that cultural practices lie at the heart
of contemporary Globalization. The author very beautifully gives
points both for and against the debate. The chapter also describes
cultural hegemony in detail.
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150 BOOK REVIEW
Chapter 6: The ideological dimension of Globalization. This
chapter discusses ve different ideologies pertaining to Globalization:
1. Globalization is about the globalization and liberalization of
markets, 2. Globalization is inevitable and irreversible, 3. Nobody is
in charge of Globalization, 4. Globalization benets everyone,and, 5.
Globalization furthers the spread of democracy in the world. It argues
that both the massive anti-globalist protests from Seattle to Genoa
and the Al Qaeda terrorist attacks of 11 September 2001 have shown
the expansion of globalist ideology.
Chapter 7: Challenges to Globalization focuses on two diverse
yet very strong view points of Particularistic protectionists and
Universalist protectionists. It highlights the differences of opinions
and ideologies between these two protectionists groups of United
States of America and how each one views the challenges to
Globalization.
Chapter 8: Assessing the future of Globalization. Assimilating
all the viewpoints discussed so far, this chapter emphasizes that
there is nothing wrong with the greater manifestations of social
interdependence that emerge as a result of Globalization. However,
what bothers experts all over the world is the fact that the current
oppressive structure of Globalization divides the world into two
distinct privileged and disadvantaged entities.
The book also covers all the major global developments of the
past decade – the recent ones including the rise of social networks
such as Facebook, Twitter etc. It also covers the older phenomena
like the Japanese earthquake and killing of Osama bin Laden – both
in 2011. It further moves down to relate the global nancial crises of
the 2008-2010 with the process of Globalization. Also, it has tried to
touch upon all the years of the last decade thereby rendering discussion
evolutionary rather than randomly discussing about Globalization in
bits and pieces.
The scope of the book also extends to examining political
movements both for and against globalization, from WTO protests to
the rise in Jihadism. Finally, Steger also tries to explain the connection
between economic globalization and multinational corporations,
World Bank, International Monetary Fund, and the World Trade
Management & Change, Volume 19, Number 2 (2015)
BOOK REVIEW 151
Organization.
This book by Manfred B. Steger is a brilliant synopsis for
anyone who is interested in learning about globalization from a
conceptual multidimensional framework encircling global, regional
and local aspects of social life. Considering the fact that Globalization
has become the new mantra for development and that the world is
increasingly becoming one big global economy, this book comes as
a handy tool for basic knowledge and discussions on Globalization.
This book will be helpful not only for the management students but
also for all the graduates irrespective of the eld. The book provides
a wide variety of views written in an understandable and a general
fashion. This book will also be a useful tool in aiding discussions and
debates.
Bhavleen Rekhi, Assistant Professor, Marketing and Sales,
IILM Institute for Higher Education, 3 Lodhi Institutional Area, New
Delhi – 110003, India. Email: bhavleen.rekhi@iilm.edu
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BOOK REVIEW
Investing and the Irrational Mind. Tata McGraw-Hill Education
Private Limited, The McGraw-Hill Companies., New York. Year
2013, Pages-xvi+299, Price - ` 2029 or $ 30.60, ISBN:978-1-25-
900202-1
Robert Koppel’s “Investing and the Irrational Mind”, 2013,
McGraw-Hill Publications; talks about Rethink Risk, Outwit
Optimism, and Seize Opportunities as the three strategies that most
people miss. It explains how psychology inuences nancial decisions
and drives markets. Koppel demonstrates that success as an investor
does not depend on the worth of the investment ideas, but, more on
the management of emotions. The rationale behind the book is to
facilitate the reader to break free from the psychological barriers.
Koppel makes an intriguing attempt on teaching the investor how
to identify negative, self-defeating patterns of thought, tailoring
goals according to investor psychology, developing a scaffold for
overcoming irrational thoughts in investment decisions.
The book is organized into fteen chapters. The very rst chapter
gives overview on the history of investor psychology. Koppel sets
the background straight by combining psychology, economics and
neuroeconomics studying how people react in emotionally exuberant
situations. Koppel interweaves judgments from behavioral nance
and neurology as well as perceptions from top traders to differentiate
between specialist or winning traders and learner or losing traders and
suggests how to unite the lines of the former. It is also suggested that
it is instincts that are used to create investment ideas and to investigate
is the second step. The sequence depends on what investment style
the investor uses in general. Another, very captivating observation in
this chapter is from the eld of neuro-economics, decision making
and brain that “after two recurrences of a spur the brain instinctively
takes the subsequent one for granted”. Koppel rightly says that it is
no wonder that after two protable trades, the investors feel that their
next investment too shall reap prots.
Chapter 2, The Inner Game, highlights the blueprint that offers
solutions by modeling beliefs, mental strategies, and internal dialogue
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of some of the world’s best traders and economists such as George
Soros ad Nobel prize winning George A. Akerlof.
The chapter on Hardwired and Irrational looks into aspects of
behavioral Finance and neuro-economics for insights into investment
decisions based on the latest studies and ndings about the structure
of the mind alerting the investor to the challenges of an irrational
self.
Chapter 4, A user’s guide to the Brain, proposes that trading
prot is more a function of being able to read the minds of others
(specically, the Theory of mind that is the ability to attribute mental
states — beliefs, intents, desires, pretending, knowledge, etc. — to
oneself and others and to understand that others have beliefs, desires,
intentions, and perspectives that are different from one’s own) than
of analytical ability.
The Market, chapter 5, afrms that the market is a jungle and there
are factors common to markets and mind. It cites counter examples by
behavioralists to economic rationality-loss aversion, overcondence,
overreaction, mental accounting, and other behavioral biases-are, in
fact, consistent with an evolutionary model of individuals adapting
to a changing environment via simple Heuristics.
Chapter 6 discussed Market psychology through the lens of
behavioral economists Robert Shiller and Joseph Stiglitz and also
through personal analysis. It also refers to the experience of managing
a team of proprietary traders and the essential psychological barriers
that stand in the way of protable investing.
Chapter 7 accentuates the vitality of establishing realistic
investment goals that are applicable to one’s personality and identies
the critical factors that determine the edge that makes the difference.
It also stresses that irrespective of being a long-term or a short-term
trader, it is advised to invest with a focus on your long-term growth
and nancial stability; an intelligent investor must be businesslike
in his approach and guided by specic principles. It is important for
an investor to know what attracts him to investing, what will sustain
his interest in investing and dedication to be successful.
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154 BOOK REVIEW
The subsequent chapter stresses upon some of the common
cognitive biases that intrude on our investment decisions. It also
discusses psychological factors and rules of thumb or heuristics,
deviations of judgment faced by other traders and institutional clients.
A very important aspect discussed in this chapter is the Blind Spots
which occur when investors fail to compensate for their subjectively
known cognitive biases. The term coined by Emily Pronin explains
that there is need for the investor to be more cautious against any
potential bias that causes deviations in judgment as well as the
constant challenge that the investors’ irrational brain poses.
Chapter 9 looks at cognitive fallacies, another category of
mental traps that lead the investor astray. It confers how fallacious
arguments are designed to exploit rhetorical patterns that obscure
logic. It explains fallacy as a distorted, exaggerated, or misrepresented
assertion that leads to a faulty conclusion. For the investor, a number
of psychological fallacies that impair performance are ready to intrude
at any given time. It explains different types of fallacies that impact
investor behavior such as Planning fallacy, Fallacy of Accident,
Gambler’s fallacy, Historian fallacy, Psychologist’s fallacy and Texas
Sharpshooter fallacy. Koppel also tries to accentuate on the type
of illusion or misperception involving a vague or obscure stimulus
being perceived as something clear and distinct called Pareidolia, e.g.
interpreting through symbols as we do when we are watching markets
and charts. It seems that science is justifying the percepts of several
of the premature traders. It can also involve the subjective insight
of directives entrenched in price charts when no such information is
really there.
The next chapter on Illusions highlights how fallacy is related
to clustering illusion, or the psychological tendency to identify and
interpret patterns in randomness where none exist. It denes the three
types of visual illusions: Literal, physiological, and cognitive. A very
intriguing part of this chapter is the elucidation of several cognitive
distortions of reality that articulate for investors, illusions appear in
the guise of cognitive distortions: exaggerated and irrational thoughts
that taint their nancial decisions. It lastly states that awareness alone
does not allow an investor to overcome cognitive distortion. Although
Management & Change, Volume 19, Number 2 (2015)
BOOK REVIEW 155
it is a critical step, commitment to improve and repeated trial and
error are the ultimate recipe for overcoming illusions’ undesirable
effects.
Chapter 11 ‘Taking a loss’ discusses the most signicant issue
in investment decisions, the feat of losing. At the heart of all our
nancial decisions is an aversion to loss. The same is demonstrated
by a phenomenon in prospect theory that describes the natural
predisposition of individuals to prefer avoiding a loss to achieve
prot. On the basis of conversations and interviews with some of
the best traders, Koppel found that protable investing often comes
down to three things: knowledge, nerve and the ability to lose money.
In a section on Condence and not overcondence, Koppel states
the traders point that after sustaining a loss or a string of losses, it is
hard to continue to make trades. A very catchy reference to The New
market wizards by Jack Schwager mentions that great traders realize
how intrinsic the element of losing is to being successful in trading.
In the segment on ‘the truth about taking a loss’ Koppel mentions
several physical and emotional symptoms of taking a loss. It is also
mentioned that an investor should consider losses as intrinsic and
inevitable part of investing and not as disruptive or failed events.
Risk is considered central to any discussion of investment and
investors performance. A very important issue of risk management
in order to better understand how to develop a conceptual scaffold
for overcoming irrational thoughts, fears and beliefs in investment
decisions is addressed in chapter 12.The key to understanding
investment risk is recognizing that it goes far beyond math and
strategy, deep into the recesses of human psychology and emotion.
Every investor must fully understand when to embrace risk rather
than avoid it, and how to circumscribe risk rather than let it get out
of control. Tips on how effectively risk is managed and investing
successfully are also mentioned in this chapter.
In the next chapter Koppel takes a look at the role of intuition
for investors. A prized ideal among traders and investors and true
intuition is greatly sought after, but all too often vaguely understood.
There are varied reasons why it is difcult for investors to identify and
Management & Change, Volume 19, Number 2 (2015)
156 BOOK REVIEW
then rely on their intuition. Professional traders do rely on intuition
as a vital tool in their arsenal of psychological and strategic skills.
The vital role of intuition for the seasoned investor, now veried by
neuroscience, is an afrmation that emotions are integral to investors’
ability to reason, and, gut feelings are indispensable tools for rational
decision making. Intuition is the result of years of hard work and
battle-tested experience.
Chapter 14 looks at ways to overcome adversity and achieve
resilience irrespective of how the market is performing. Koppel
interviewed many traders and investors and found out that the work of
most of the professional investors is often characterized by turbulence,
complications, and heavy blows. Investors are smart, determined and
receptive to novel ideas. It is important for the investors to overcome
obstacles that stand in their way, relying implicitly on their power
of resilience. Koppel also mentions ways to build psychological
resilience. Lastly, ow is stated as an optimal performance state
that is not familiar to traders and investors, where the individual
is fully engaged and has an overwhelming feeling of satisfaction,
demonstrating skills and losing all sense of time.
The constant psychological challenges that investors face are
listed in the last chapter of the book. Koppel concludes by citing that
investing is a microcosm of life. Within it, the investors experience joy,
uncertainty, frustration and struggle. It requires courage, optimism and
humility and the desire to succeed. Through commitment, diligence,
practice, and respect for intellect and emotions, the investors can
triumph not only as investors but as human beings too. Koppel
has made a successful attempt by answering how does the investor
overcome habit-driven behaviors and ordinary reasoning, and move
forward to achieve psychological freedom to invest.
This book would of great appeal to people who invest actively,
particularly for those who plan to invest for a limited period of time.
Robert details the steps traders can follow to turn their destructive
behavioral patterns into life-long positive assets that extend well
beyond their original intent. The book is a must read for active and
passive, professional and non-professional, and, greed and fear driven
Management & Change, Volume 19, Number 2 (2015)
BOOK REVIEW 157
investors. Investing is fraught with uncertainty, which gives rise to
psychological issues that investors ignore at their peril. Koppel has
written a captivating and comprehensive study of this versatile area
of interest and analysis.
Deepika Dhingra, Assistant Professor, Finance, Accounting & Control
Area, IILM Institute for Higher Education, 3 Lodhi Institutional Area,
New Delhi – 110003, India. Email: deepika.dhingra@iilm.edu
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BOOK REVIEW
Vanita Ahuja and Sangeeta Sinha, Indian Project Management
Case Studies, New Delhi: Excel Books (A-45, Naraina, Phase I,
New Delhi-110028), 2013, Enterprise Resource Planning, New
Delhi: Tata McGraw Hill Education Private Limited (7, West Patel
Nagar, New Delhi, 110008), 2011, xii+142 pages, paperback.
Project management is dened as set of well dened techniques
that are used to plan, guide, control and complete discrete packages
of work that have well dened objectives and scope. As a discipline,
Project Management has ancient roots, and nds applicability in all
kinds of projects - big or small. Though typically associated with
production, software and infrastructure projects, project management
techniques are equally applicable in diverse situations. For all future
and practicing managers, it is important to understand how these
techniques can be applied effectively.
Project Management is an evolved area and several well written
text books on the subject can be found. While all project management
books include case studies, not many case studies are in the Indian
context, thus making it difcult for the Indian readers to draw a
parallel. The book by Vanita Ahuja and Sangeeta Sinha is a welcome
addition to the literature available on Project Management and aims
to ll this lacuna. The book is a book of cases and is a compilation of
Indian Case studies on Project Management. It is written in simple,
easy to understand language. The authors have made sure that its
readers get a avor of project management in diverse settings. The
discussions at the end of each chapter give a customized and detailed
analysis of each case study. Moreover, the currency of the data and
detailed descriptions of all aspects exhibit the authors’ ability to
analyze and interpret the cases in their context. This adds immensely
to the readability of the book.
Chapter 1 of the book gives an overview of Project Management
fundamentals. Using the framework described by Project Management
Body of Knowledge (PMBOK 5.0), the guide by Project Management
Institute (PMI) USA, the chapter gives a succinct but exhaustive
description of project management. The chapter introduces its readers
Management & Change, Volume 19, Number 2 (2015)
BOOK REVIEW 159
to project phases and hierarchy. It also gives an overview of the ten
Project Management Knowledge Areas i.e. Integration Management,
Scope Management, Time Management, Cost Management, Quality
Management, Human Resource Management, Communication
Management, Risk Management, Procurement Management, and,
Stakeholder Management. The readers not just get an overview of
these areas, but also get an overview of the processes associated
with these key areas. The chapter also explains the different project
organizational structures i.e. functional, project based, matrix and
composite. This chapter puts together all concepts essential for
understanding and analyzing the case studies given in the subsequent
chapters.
The books bring together case studies from various different
sectors to give its readers a avor of project management as understood
and practiced in diverse areas and showcase the commonality.
Chapters 2 to 11 are a compilation of case studies. Chapter 2 describes
the Case of Godhuli, an NGO in Delhi which took up the challenge of
providing basic education to poor and under privileged children in the
slum areas of New Delhi. NGOs are very small set-ups and generally
face a paucity of funds and support. The case is very interesting as
project management is naturally associated with large manufacturing
organizations. The case however gives a lucid description of how the
NGO planned it activities to handle challenges in terms of funds and
government regulations to take it from its humble beginnings in 1999
to its current position.
Chapter 3 discusses the case of “Aadhaar” which can be termed
as one of the largest and most ambitious projects of the Indian
government. A social-IT project, Aadhaar, aimed at providing a unique
identity to all residents of the country, with the particular focus on the
people below poverty line. The case gives a detailed description of
how the project was envisaged as Unique Identication (UID) project
by the Planning Commission in 2006 as a basis for delivery of welfare
services. The authors have provided a very comprehensive description
of the chronology of events of how the project was conceptualized.
Unlike typical government projects, given the scale and complex
nature, the project involved extensive participation from the private
Management & Change, Volume 19, Number 2 (2015)
160 BOOK REVIEW
sector, starting from the appointment of Mr Nandan Nilekani to
spearhead the project and the choice of private organizations for
data management. The case gives a very good understanding of how
projects require planning for external pressures which may emerge
despite meticulous planning. Details of how the project ran out of
steam, the shift from UID to Aadhaar, the change in scope, challenges
that emerged in the form of external pressures etc have all been
beautifully brought out in the this chapters. Was Aadhaar a successful
project? The authors have presented all facts about issues of cost and
time overruns, quality, data security and analyzed the implications,
leaving the question to the readers to evaluate.
Moving from Aadhaar, the authors have moved to a completely
different domain. In Chapter 4, they have presented the case of
the System-on-Chip project of the silicon industry. The SoC is the
Integrated circuit that integrates all components of an electronic
system. It can be found in almost all electronic gadgets. Since
the SoC use VLSI, changes in VLSI technologies affect the SoC
project lifecycle. Quality management is a critical parameter in this
industry. Also, technological changes are frequent requiring shorter
manufacturing-to-delivery cycles as obsolescence is common. This
brings with it the threat of scope change. Risk factors such as these
become the critical determinants for project success. Through this case
study, the authors have brought out project management challenges
and how these are managed particularly in rapidly changing and
technology intensive sectors.
India International Trade Fair (IITF) is Asia’s largest trade show
of its kind. The fair gives an opportunity to a myriad of organizations
from all possible sectors to showcase new developments. This also
provides a platform for business networking. The IITF is held in
Pragati maidan and witnesses an average footfall of several thousand
per day. Managing such a large scale fair requires meticulous planning
and monitoring. The next chapter of the book showcases a case study
of management of IITF 2011, which had participants from over 350
companies from 28 countries. With the help of data, the authors have
shown how despite good planning, several problems had emerged.
The customer feedback shows that the project cannot be treated as a
Management & Change, Volume 19, Number 2 (2015)
BOOK REVIEW 161
successful one. The authors have approached the case in a novel way
by presenting scenarios which could have been planned to improve
management of each problem.
The next chapter of the book presents a case study from the
hospitality sector. The authors have presented the case of a hotel chain
which acquired an old, quaint hotel which was valued by its customers
for its old-world charm and warmth. The hotel conversion had strict
timelines and the project leaders had clearly dened the project
milestones. The description of the milestones and the evaluation
of their efcacy have been presented very well by the authors. The
EAFOE (Eight Areas for Operational Excellence) are well dened.
However, the authors could have added more details to improve
comprehension.
Chapter 7 of the book describes an International Railway
Construction Project, namely Electried Double Railway Track
Project, executed by IRCON Ltd. The was an international project
executed in Malaysia with IRCON being the lead contractor. A project
executed in a foreign country faces many difculties. The scope of
the project included detailed planning, design, construction, testing,
commissioning and maintenance of the work. The case brings out
well the challenges faced in handling an international project. The
authors have successfully brought out the robust project tracking and
monitoring process. The description will help readers understand
the importance of planning in large international projects. The need
for good multicultural hue in HRM in such projects is evident.
The analysis and discussion show that in collaborative project it is
important to have good and regular communication. The success of
these projects are driven by the client who sets the rules and drives
the project. The case study will provide a good learning to its readers
about how international projects are handled.
Chapter 8 lists success story of Simhadri Power Project. A
large project initiated in 2012, Simhadri power Project was oated
by the Ministry of Power, Government of India for the national
Thermal Power corporation (NTPC). The chapter gives a very good
understanding of the Integrated Project Management & Control
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162 BOOK REVIEW
System (IPMCS), a 3-tiered planning, monitoring and control system
used by NTPC. All critical aspects of project management such as
stakeholder management, health and safety, and quality management
have been brought out. The case study shows how through good
project management even large projects can be fast tracked and
completed within the allocated budget.
Roadways are the lifeline of the country. In the last 2 decades,
the expressway, highway and roadways network of the country has
grown rapidly. Infact, over the last ten years’ road travel as emerged
as competitor to the railways in many areas. One such corridor
which is widely used for travel is the Mumbai-Pune Expressway. An
expressway project requires many government clearances, citizen
buy-in, study of the environment impact and private partnership. The
Mumbai-Pune Expressway project discussed in Chapter 9 shows how
the Maharashtra State Road Development Corporation (MSRDC)
effectively handled various conventional issues along with issues such
as rehabilitation of inhabitants, risk management, land acquisition and
public-private partnerships. The dilemma is in determining whether
the project was successful or not. It was completed on time but at 30%
cost overrun! The authors have left it for the readers to decide.
The last and nal case presented in the book is of Chandrayaan-I,
India’s rst lunar mission to launch an unmanned vehicle to carry a
moon impact probe to be launched on the surface of the moon. All
space projects are very detailed, complex and well planned. The case
gives a lucid account of the project which was conceptualized in 2003
and terminated in 2006. Perhaps owing to the complex nature of the
project, security constraints and lack of access to information, the
authors have given a very cryptic account of the situation. Discussion
of the project and a special mention of the criticism and praise,
however, compensate for the paucity of details.
Organized as a very concise and handy book of cases, this
book is an excellent collection of case studies in the area of project
management. The case studies are drawn from diverse functional
areas thereby giving its readers a very good idea of how Project
Management is not just limited to any one eld. There are very few
Management & Change, Volume 19, Number 2 (2015)
Guidelines for Contributors 163
books which bring together such a comprehensive collection of cases,
let alone Indian cases. The book is a welcome addition to the readily
available books on Project Management. The book will be an excellent
reference book for both faculty and students.
What sets the book apart is the range and variety of sectors
covered and depth of discussions given at the end of each case. The
details in the chapters may not be elaborate, yet are sufcient to provide
relevant understanding into each case. One area where the book is
found to be wanting is in its approach towards dark-side cases i.e.
cases representing failure. Just as successful projects impart learning,
dark side cases give a good understanding of what can possibly go
wrong despite meticulous planning. While three dark-side cases have
been included, they fail to bring out well the critical details due to
lack of sufcient data. Inclusion of a more clearly dened failure
case and its analysis would have added great value to the book. All
in all, the book will be an excellent reading and can easily be used as
a supplement to any generic book on Project Management. The text
would be useful both for students and for practicing managers.
Vandana Srivastava, Professor, Technology & Operations
Management, IILM Institute for Higher Education, 3 Lodhi
Institutional Area, New Delhi – 110003, India. Email: vandana.
srivastava@iilm.edu.
Management & Change, Volume 19, Number 2 (2015)
164 Guidelines for Contributors
Guidelines for Contributors
1. Manuscripts and all editorial correspondence should be addressed
to:
The Editor, Management & Change, IILM Institute for Higher
Education, 3, Lodhi Institutional Area, Lodhi Road, New
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2. Articles should be written in MS Word, Times New Roman font,
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\6. Use single quotes throughout. Double quotes only to be used
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Management & Change, Volume 19, Number 2 (2015)
Guidelines for Contributors 165
7. Use ‘twentieth century’, ‘1980s’. Spell out numbers from one
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Guidelines specied in the Publication Manual of the American
Psychological Association (5th edition) must be followed.
Inverted names: In each reference, authors’ names are
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subsequent ones); give the last name and initials for all
authors of a particular work unless the work has more than
six authors. If the work has more than six authors, list the rst
six authors and then use et al., after the sixth author’s name.
Arrangement of references: Reference list entries should be
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Chronological listing: If you have more than one
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Sentence case: In references, follow sentence
case for the titles of papers, books, articles, etc.
Title case: In references, Journal titles are put in title case.\
Management & Change, Volume 19, Number 2 (2015)
166 Guidelines for Contributors
Reference styles:Book
Hochschild, A.R. (1983). The Managed heart: Commercialization
of human feeling. Berkeley, CA: University of California
Press.
Article in an edited book
Van Maanen, J., & Kunda, G. (1989). Real feelings: Emotional
expression and organizational culture. In L.L. Cummings, &
B.M. Staw (Eds), Research in Organizational Behavior (pp.
43–103). Greenwich CT: AI Press.
Conference Proceedings\
Akaike, H. (1973). Information theory and an extension of
the maximum likelihood principle. Proceedings of the 2nd
International Symposium on Information Theory (pp. 267–281).
Budapest, Hungary: Akademiai Kiado.
Article from the web
Hort, L., Barrett, M., & Fullop, L. (2001). Doing hard labor:
Gendered emotional labor in academic management. Retrieved
from www.mngt.waikato.ac.nz/ejrot/cms conference/2001/
Papers/Gender/Hort
Journal Article
Harris, L.C. (2002). The emotional labor of barristers: An
exploration of emotional labor by status professionals. Journal
of Management Studies, 39(4), 553–584.
11. The reference to other works should be provided in the
text using citations written in the author-datemethod.
Author-date method: Follow the author-date method of in-text
citation, e.g., (Morris, 2000).
Quotes: When directly quoting from a work, include the page
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Management & Change, Volume 19, Number 2 (2015)
Guidelines for Contributors 167
Citation styles: One Work by One Author: (Morris, 2000)
One Work by Multiple Authors: (Morris and Feldman, 2000)
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For example, if Seidenberg and McClelland’s work is cited in
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cited in Coltheart, Curtis, Atkins, and Haller, 1993)....
12. Book reviews must have details like name of author/editor
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