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PRATIBIMB The Reflection of Management
FINANCE | GENERAL MANAGEMENT | HUMAN RESOURCE | MARKETING | HEALTHCARE | OPERATIONS | SYSTEMS
Volume II, Issue XVIII March—April 2013 A Monthly e-Magazine
A Students’ Initiative
Visiting the Unique Selling Proposition Of Rural Women Entrepreneurs
Gayatrii Shanmugam , The Ohio State University
Is India Ready To See The Rising Sun?
Deepa Sastri, School of Petroleum Management
Panacea For Indian Economy -Poaching or No Poaching ?
S. Priya, Lal Bahadur Shastri Institute of Management
ROI Of Social Media Marketing
Aditya Vikram Bharadwaj, MDI
Shift From Corporate Ladder To Lattice
Vignesh Lakshminarayanan & Kailash Mahadevan V M , NITIE
Succession Planning
Prisoomit P Nayak , Welingkar Mumbai
Pratibimb | March-April 2013 | 2
T. A. Pai Management Institute (TAPMI) is a premier management institute situated in Manipal
and is well known for its academic rigor & faculty-student interaction. The Institute has been
recently ranked amongst top 1 per cent of B-schools in India & 4th in the South Zone by The
Week Magazine.
Founded by the visionary, Late Shri. T. A. Pai, TAPMI’s mission is to provide much needed
impetus to the task of building professional management capability in the country. In the
process, it has also played a role in strengthening the existing educational and health
infrastructure of Manipal.
TAPMI is committed to excellence in post graduate management education, research and
practice by nurturing and developing global wealth creators and leaders. We shall continually
benchmark ourselves against the best-in-class institutions. We shall foster continuous learning
and reflection, achievement-orientation, creative interdependence, and respect for diversity with
a holistic concern for ethics, environment and society.
T. A. Pai Management Institute
Manipal, Karnataka
About TAPMI
Our Mission
Pratibimb | March-April 2013 | 3
TAPMI’s e-Magazine - is the conglomeration of the various
specializations in MBA (Marketing, Finance, HR, Systems and
Operations). It is primarily intended to provide insights into the
plethora of knowledge that relate to the various departments of
Management and to give an opportunity to the students of TAPMI
and the best brains across country to exhibit their creative cells. The
magazine also strives to bring expert inputs from industries, thereby
bringing the academia and industry together.
Pratibimb the e-Magazine of TAPMI had its first issue in December
2010. The issue comprised of an interview of well known writer Ms.
Rashmi Bansal along with a series of articles by students and industry
experts like MadhuSudan Rao (AVP-Delivery, Mahindra Satyam) & Ed Cohen who is a global leader
and chief learning officer who led Booz Allen Hamilton & Satyam Computer Services to the first
rank globally for learning & development . It also included a hugely successful and engrossing game
for finance geeks called “Beat the Market” to bring out the application based knowledge of
students by providing them the platform where they were expected to predict the stock prices of
two selected stocks on a future date. The magazine is primarily intended for the development of all
around management knowledge by providing unbiased critical insights into the modern
developments.
TAPMI believes that learning is a continuous process and is not limited to the four walls of the
classroom. This viewpoint is further enhanced through Pratibimb wherein students manage and
contribute to create a refreshing learning environment outside the classrooms which eventually
leads to a holistic development process. The magazine provides a competitive platform and
opportunity to the students where they can compete with the best brains in the B-Schools of the
country. The magazine also provides a platform for prominent industry stalwarts to communicate
their views and learning about and from the recent developments from their respective fields of
business which in turn helps to create a collaborative learning base for its readers.
Pratibimb is committed in continuing this initiative by bringing in continuous improvement in the
magazine by including quality articles related to various management issues and eventually creating
a more engaging relationship with its readers by providing them a platform to showcase their
talent.
We invite all the best brains across country to be part of this initiative and help us take this to the
next level.
PRATIBIMB TAPMI’S MONTHLY e-MAGAZINE VOLUME 2, ISSUE XVIII MARCH, 2013
Pratibimb | March-April 2013 | 4
It is heartening to see a major surge in research activities in TAPMI in recent times. It manifests two
things: (i) there is an increasing inquisitiveness among the students and faculty to explore , seek and
strive and (ii) there is a sense of achievement through application of research techniques to that
inquisitiveness which ends up in contribution to the domain of management knowledge.
The recent events in research indicate that we are moving in the right direction in our augmenting the
management domain. The quality of the journals where the papers are published and the quality of
the conferences where the papers are presented go on to prove that TAPMI has, at last, arrived in
research space. It is now time to consolidate.
Best wishes,
Dr. R. C. Natarajan
Director’s
Message
Pratibimb | March-April 2013 | 5
Editor’s corner
Arun Stephen
Abhineet Rastogi
Bhavnita Nareshkumar
Devi Kailas
Kannan Venkat
Shubha Prabhu
Aditya Bhat
Lloyd George
Prof. Chowdari Prasad Dean (Branding and Promotions)
Prof. Aparna Bhat
Editor in Chief
Marketing & Advertising
Creative & Cover Design
Communications
Operations
Publishing
Faculty Advisors
Dear Readers,
Its summer! And what does summer mean for us B-school students? Internship, of course!!! As each of us gear up to have our first taste of corporate life, Pratibimb brings to you yet another edition filled with info and fun. Can't believe it? Why don't you turn a few pages and see for yourself?
Gayatrii Shanmugam of The Ohio State University discusses about rural women entrepreneurs in her article "Visiting the Unique Selling Proposition of Rural Women Entrepreneurs on this International Women’s Day!". I am sure that will strike a chord with many of you budding entrepreneurs out there, especially the ladies!
In "Is India Rady To See The Rising Sun?", Deepa Sastry School of Petroleum Management, talks about recognizing solar power as the Energy of Tomorrow and its impact. "Poaching or No Poaching" by S. Priya of LBSIM, New Delhi talks about the ethics of Poaching as a recruitment strategy in various companies today.
Aditya Vikram Bharadwaj of MDI, Gurgaon has a sure shot winner in "ROI Of Social Media Marketing", the current hot topic among marketers. Vignesh Lakshminarayanan & Kailash Mahadevan V M of NITIE, Mumbai has a very relevant article in HR on career advancement called "Shift From Corporate Ladder To Lattice". In addition, we have another entry from Prisoomit P Nayak of Welingkar Institute, Mumbai discussing the importance of Succession Planning.
As always, stay safe, celebrate life and keep reading Pratibimb.
Stay updated, like our page to hear more from us at
http://www.facebook.com/pratibimb.reflecting.management
We would like to thank all faculty members who have provided their valuable feedback to help maintain the standards we have strived to achieve. Also, send in your valuable suggestions or feedback to pratibimb@tapmi.edu.in
Enjoy Reading!
Arun Stephen
Pratibimb | March-April 2013 | 6
Contents Visiting the Unique Selling Proposition of Rural Women Entrepreneurs 7 by Gayatrii Shanmugam, The Ohio State University
Is India ready to see the rising sun? 9 by Deepa Sastri, School of Petroleum Management
Poaching or No Poaching ? 12 by S. Priya, Lal Bahadur Shastri Institute of Management
ROI Of Social Media Marketing 14 by Aditya Vikram Bharadwaj, MDI
Shift from corporate ladder to lattice 17 by Vignesh Lakshminarayanan & Kailash Mahadevan V M , NITIE
Succession planning 22 by Prisoomit P Nayak , Welingkar Mumbai
Future of Financial Research 25 by Nitin Singh, Symbiosis Pune
Pratibimb | March-April 2013 | 7
Visiting The Unique Selling Proposition
of The Rural Women Entrepreneurs Gayatrii Shanmugam , The Ohio State University
Around 1970’s the only place for entrepreneur spirit for Indian women was her kitchen.
She was a Chief Financial Officer who decided how much to spend for grocery, how much
for cleaning and washing. As a Chief Executive Officer she was responsible for the entire
operations of her kitchen. Things started changing gradually with women gaining more
respect. United Nations celebrated first International women’s day on 8 March 1975.
From 1997 they celebrated with a theme. The theme for 2012 was – Empower rural
women end poverty and Hunger.
A lot of people reading this may picture today’s women as someone whose work time
starts when sun shines in United States of America. But, unfortunately this situation is
still limited to the big cities and metros of India. There is still this big chunk of rural India
with patriarchal system. We are real winners only when there is women’s empowerment
even in rural India. To achieve this, there are few “super woman” who has already taken
baby steps. They got their feet wet using entrepreneurship. So, what was their unique
selling proposition?
For God fearing, it is Vaishno Devi in Jammu, for romantics it is Dal lake in Srinagar and
for adventurous it is Ladakh. Back in history, trekking hiking skiing was a boy’s thing. But
today marketers are selling hiking boots for women, that’s the trend. Women are always
welcomed as consumer. The rapport changes when it comes to enterprising. There is a
glass ceiling that still exists almost everywhere. So the club of successful women has
some special selling point. What is the unique selling proposition of the trekking
company in Ladakh?
Ladakh women’s travel company is the first travel company that is owned and operated
by women. It differs from other company not just in terms of its entrepreneur but also in
terms of its service. The trekkers are provided with female guides and porters. So, you
heard the “unique selling proposition” of this company. An entrepreneurial quest and
success of a woman in a traditionally men dominated area is laudable, but then if it is a
rural woman, then it is extremely commendable. Well, it is an admirable story of rural
women empowerment!
Thinlas Chorol is the woman behind this success story. She is native of a rural village
Takmachik. You need travel at least 65 km to reach the town in the district. This lady
crossed more than 500 kms and attended National Outdoor Leadership School (NOLS) at
Ranikhet, India. Of course, NOLS has strong international repute with one of their
campus in United States of America. She is not only the first woman to start a trekking
company, but also a first professionally trained female trekking guide in the year 2003.
Within 6 years, Chorol created this company. One of the most respectable
characteristic of this entrepreneurship is her vision of employing female guides and
porters. This action is an empowerment for all women in that village. Their approach of
Pratibimb | March-April 2013 | 8
homestays gives financial freedom for women in that area.
On a bigger picture, the method of entrepreneurship of this
rural woman has also marketed this village as a land of op-
portunities to the nearby places with variety of jobs like
porter, guide and host. A tremendous selling point for a
town in this dull economy!
With big conglomerates working on corporate social re-
sponsibility and Dow Jones tracking the sustainability index,
this rural entrepreneur is no less to her contemporaries.
Using eco-tourism label, they advertise habits that pose less
impact to environment. Be it using refillable water bottles
or discouraging the use of ponies that eat limited available
grass. Having come from humble rural background, Chorol
created a brand forherself and the company using her
unique selling proposition. A true rural woman empower-
ment that ends poverty and hunger!
If Chorol is the name in the regions close to the national
capital, then Chetna Gala Sinha is the name around the fi-
nancial capital of India. She is the founder of Mann Deshi
Mahila Shankari Bank in the rural Satara region of Maha-
rashtra. A baby born in the year 1997 grew up to receive a
cooperative license from Reserve Bank of India in the do-
main of rural financial company. With all these recognition,
don’t get fooled by assuming this as a regular microfinance
organization. They offered something more. They had their
own unique selling proposition-USP.
Chetna Gala Sinha had a different vision in terms of mi-
crofinance. She envisioned something that went beyond the
idea of lending. She embraced the idea that along with
monetary help they also need to be provided with neces-
sary infrastructure and training. As an answer, she created
Mann Deshi Foundation. Mann Deshi Foundation is an arm
that provides all non-financial services like financial and
entrepreneurial training. This approach makes sure that
loaned money is used in best possible way. The educational
training turns the project into sustainable one.
They were out of the box thinkers in terms of banking
and training purpose. One of the most commendable con-
cepts is “e-card”. It is nothing but a door step pigmy savings
scheme. An approach that brings the product or banking
“within arm’s reach” of the consumer! Their mobile busi-
ness school is laudable in training domain. It’s a bus that
travels to remotest village in Maharashtra and Karnataka to
teach the practical business skills. A concept of crossing all
the boundaries and delivering the product at the door step
of the customer!
Still you don’t see anything special? According to
Gutierrez, Feminist empowerment model defines women’s
empowerment as process of increasing personal, interper-
sonal and political power so that individuals can take ac-
tions to improve their life situation.In rural India with the
patriarchal system, violence against women is very com-
mon. It may be physical violence due to any reason includ-
ing alcoholism or the ridiculous sexual violence. Sinha’s
model not only gives financial freedom but also a validation
to fight violence. Well, that’s their USP!
The United Nations theme for International Women’s
day 2013 is “A promise is a promise: time for action to end
violence against women”. Chorol and Sinha used their
unique selling proposition for rural empowerment to end
poverty and hungry. They certainly fit the UN International
Women’s day 2012 theme. On an ending note, let’s be
hopeful that 2013 will be year of many social cause mar-
keting campaigns that fight violence against women. To
everyone out there, Happy Women’s day!
References
http://www.ladakhiwomenstravel.com/about.htm
http://www.manndeshi.org/smartcards.html
http://www.manndeshifoundation.org/
mobilebusinessschool.html
http://www.un.org/womenwatch/feature/iwd/
Pratibimb | March-April 2013 | 9
With India facing significant challenges of burgeoning energy deficit and lowering carbon
footprint, it is time that we reckon solar power as the Energy of Tomorrow. As India en-
deavors to achieve the targeted 15% energy from renewable sources by 2020, solar
power is expected to play a more prominent role with India’s solar potential pegged at
600 GW. Four years post the release of the National Action Plan on Climate Change
(NAPCC), this article discusses the progress made so far in the solar space and attempts
to juxtapose and analyze the solar power policies at the Centre and state level.
Among the potential states for solar development, Gujarat, Rajasthan, Karnataka, TN,
MP and AP have laid down clear mandates for solar investments and hence these states
have been chosen for evaluation. A blanket policy approach does not work because of
the underpinning differences in the macro environmental aspects of different states
(Table 1).
Table 1: Macro Environmental Analysis
(Source: Compiled by author from different sources)
Government of India (GoI) included solar energy as a key mission under the National
Action Plan on Climate Change and formally launched the Jawaharlal Nehru National
Solar Mission (JNNSM) in 2010. The project has been planned in three phases .
Is India Ready to See The Rising
Sun?
Deepa Sastri, School of Petroleum Management
Pratibimb | March-April 2013 | 10
Out of the 37 projects selected in batch I, 35 have achieved
financial closure and are expected to be on track for timely
installation. Only 143.5MW out of 1000 MW has been com-
missioned till November, 2011 and a lot more action is re-
quired on ground to meet the 2013 target of 1000 MW.
Indian states are making foray into the solar arena and poli-
cy frameworks are evolving over the stages of drafting, rede-
fining and finalizing. The table 2 provides a comparative
summary of the policy parameters in four out of the six
identified states.
While there are two main approaches for tariff determina-
tion – feed-in-tariff (FiT) / preferential tariff and reverse
competitive bidding (RCB), Gujarat, which spearheaded solar
power generation through its state policy, is the only state
to adopt FiT pricing mechanism. Gujarat State Electricity
Board (SEB) being in profits, promoted FiT in order to create
a market of stable returns for the investors. Analyzing the
sorry SEB financial situation of other states (Table 1), it is
well evident that a competitive price through RCB is the way
to go. The lowest RCB tariff under JNNSM fell from Rs.
12.16/kwh to Rs. 7.49/kwh, partly signaling the maturing
market and partly due to an oversupply of PV cells by Chi-
nese manufacturers.
An important clause in the solar policies is with respect to
Domestic Content Requirement (DCR).While this encourages
the domestic manufacturing industry, it restricts access to
the international sources for material procurement and fi-
nancial support through cheap foreign debt. In light of this
understanding, the national as well as state policies have
limited the DCR level (Table 1). Rajasthan, in a bid to pro-
mote the internal industry development, has well defined
DCR guidelines. To maintain a balanced procurement
source, MP solar policy defines a 30% DCR which is in line
with JNNSM.
Another major determinant for attracting Solar Power De-
velopers (SPDs) and increasing competition is the project
sizes. A minimum project size of 5 MW ensures developer
accountability and at the same time attracting various com-
panies. All the states do not differ in terms of minimum ca-
pacity. However, except for Gujarat, the other three states
have upper cap so as to restrict monopolizing tendencies.
However, a point to note is that the multi-developer model
of Charankha could be pulled off through just twenty one
developers due to this non-capping of the capacity.
The intangibles of government support and non-price incen-
tives go a long way in deciding the attractiveness of the poli-
cy. The vast wastelands and higher irradiance are proving to
be an asset for the states in solar development. While these
natural endowments facilitate solar development, it is the
political will that determines the utilization of these re-
sources. A case in point is MP allowing SPDs to set up facili-
ties above 10 MW beyond the geographical boundaries of
the state to tap the wasteland and irradiance benefits of
neighboring states like Gujarat and Rajasthan while making
it mandatory for the companies to sell it to MP SEB.
Pratibimb | March-April 2013 | 11
It is important for the governments to take note of the
mounting peak power deficits. Conflicts like the Telangana
issue of Andhra, over populist measures in TN and the coali-
tion conformity at national level pose a threat to the sus-
tainability of policies framed. Investor confidence in the
government and the financial capability of DISCOMS impact
the final investment decision in the region (Table 1).With
most DISCOMS of the potential states carrying a loss of over
100cr on their books, attracting investors is difficult. It is
here that encouraging policy benefits like tax exemptions
and concessions, single window clearance, banking and
wheeling clauses, power evacuation, water and other infra-
structural necessities strengthen the market attractiveness.
Figure 2 : Various RPO Levels in different States
The high potential new states coming into the scene have
been AP and TN. TN proposes to follow RCB. Andhra policy,
while betting on Renewable Energy Certificate (REC) market,
allows a project developer to either sell the power to the
DISCOMS at the average pooled purchase cost (APPC) or to
any customer. While AP exempts a developer from wheel-
ing, transmission and other charges, TN does not. TN is an
improvement over AP policy which contradicts CERC norms
by allowing both REC mechanism and concessionary bene-
fits. Both the states have no limitations for domestic con-
tent requirement.
The policy framing is just the beginning; the success of the
same depends on its execution and compliance. While solar
policies piggyback on the REC mechanism, the RPO compli-
ance norms have been achieved by only a few states like
Gujarat and Rajasthan (Figure 2). Hence how effective the
pro REC policy will be is yet to be seen. Also, the penalty
clauses defining liquidated damages and bank guarantees
need to be more stringent to oversee efficient and timely
implementation.
The policies of each state are aligned with their macro envi-
ronmental conditions, what is instrumental is how the
states deliver upon the promises that they have made in
their respective policies. The policy initiatives are indicative
of India’s cognizance to the growing role of renewable
source in its energy mix. It is time that the country disbands
its typical laxity and demonstrates discipline and vigor for
moving from ‘policy’ to ‘practice’ to see the Rising Sun.
References
Prime Minister's Council on Climate Change. (2008). Na-
tional Action Plan on Climate Change. India.
Tamil Nadu Regulatory Commission. (2012). Consultative
Paper on "Comprehensive Tariff Order for Solar Photovol-
taic and Solar Thermal Power Plants". Tamil Nadu, India.
Rajasthan DCR: Eligibility Criteria
Pratibimb | March-April 2013 | 12
This is an ethical dilemma companies are in when filling niche positions. It was towards the
nineteenth century that the employer-employee relationship shifted to a voluntary relation,
where the power is distributed.
It has been defined as ‘the intentional actions of recruiters in one company to identify, contact,
solicit and hire a currently employed individual or group of individuals away from another
company.’
Poaching is a wide practice, it accounts for 30 percent of the movement in labour. The sectors
like IT, technology, retail etc. are booming, NASSCOM and McKinsey predicts that the jobs
technology space will increase ten-fold from the current 60,000 professionals to over 6 lacs
people by 2015, and the recent increase in the number of start-ups is also fuelling hiring. Adding
to this, there lack of readily available talent in India.
Poaching should be accepted, and even encouraged, to make companies more competitive.
Moreover, any sort of Non-Solicitation agreement between organisations is unjustifiable under
the current socio-economic conditions. The Non-Compete agreement between the employer
and the employee is not legally enforceable. Organisations can’t bar an employee from
venturing out of the organisation. Employees are to be treated as free people and not as
subjects or assets that a company owns. There is no ethical issue involved with poaching; the
final employee always has the discretion to reject the offer. Poaching can, in a free market, help
organisations to put their assets to the best use.
As offshore outsourcing goes main stream in India, multinationals are hiring Indians to head
their teams in foreign markets. Notably, Accenture and Capgemini are increasing poaching
employees from their Indian rivals, like TCS, Wipro, and Infosys, to compete more effectively
against these companies.
When Jet airways restrained its pilots from joining Sahara, on the grounds that it had made
considerable investments in training them, the court ruled in favour of the pilots stating that
the skills and the knowledge acquired are a property of the pilots and they were free to take up
employment with Sahara.
In 2010, the U.S. department of Justice barred giants like Google, Apple, Intel Corporation and
others from entering into a non-solicitation agreement for employees. E bay has been sued for
entering into a non-solicitation of employees with Intuit.
The ever increasing competition amongst companies, high growth rate, especially in sectors like
IT technology & services, recent increase in the number of start-ups, rising concern due to
Talent Crunch are the main reasons for increase in Poaching as a recruitment strategy.
Multinationals are eying the right talent who can hit the ground from day one. Companies are
looking to stay ahead by differentiating on products, processes, technology and a host of other
things, hence require the right skill sets and knowledge. The high rate of growth in sectors like,
technology is creating more and more jobs. But the readily employable graduates in India are
Poaching or No Poaching ?
S. Priya, Lal Bahadur Shastri Institute of Management
Pratibimb | March-April 2013 | 13
less than 30%. This rising gap between the skills required
and that is available is creating the need for HRs to look for
talents in other organisations. Companies, for example
Oracle, Hewlett-Packard and Cisco, are diversifying into
other businesses; this is increasing competition in an
industry.
Poaching becomes unethical or illegal when the candidate,
for a job, is misled by a company about the job being offer.
Some practices associated with poaching cross the line
when the employee is hired to steal information or clients
related to the employer. Anti-poaching agreements are
relevant when two organisations are engaged in joint-
venture.
Employees are poached from ‘vulnerable’ companies. The
real issue lies in the employer-employee relationship; it is a
failure of the company to retain its employees. The reasons
could vary from the pay and benefits to the whole
employee proposition or because of their bosses.
The HRs should pick up signs displayed by employees at
work. The most frequent sign is change in habits related to
work, i.e., there is lack of engagement with projects or
colleagues, large number of absences, getting up-to-date
information on expense accounts.
Companies have been taking several measures to retain and
attract employees by benchmarking on their employment
brand against the competitors. Being competitive in pay
and benefits and in the whole employment proposition
could be the key. Long term incentive plans tied to the
success of the business as a whole and succession planning
could send a message to the employees that they are
significant role and are valuable to the success of the
business. Employees also leave because of their bosses, to
retain employees, the managers should be effective.
Knowledge sharing and trainings such as, Supervisory
training, Leadership training could instil useful management
skills.
NASSCOM has advised companies to not to resort to
Poaching, it has been working out strategies to deal with
situations where a whole of a team is wiped out or when
the intention is to sabotage the operations. NASSCOM has
recommended companies to follow a standardized exit and
on-boarding process and ask for relieving letters from the
new joinees.
There are three important stakeholders, Organisations,
Educational Institutions and NASSCOM. Steps need to be
taken collectively to reduce the gap between available
talent and required skills. Effective education and training in
institutions is the need of the hour. The stakeholders should
work out strategies to formulate the curriculum, specialised
courses, offer more practical exposure, guest lecturers from
veterans to the students.
References
www.osnews.com/story/26726.
www.edn.com.
www.frontlinerecruitmentgroup.com.
www.risesmart.com/blog.
www.vanderbilt.edu/magazines/vanderbilt-magazine/2010/04.
web.ebscohost.com.
Pratibimb | March-April 2013 | 14
ROI of Social Media Marketing Aditya Vikram Bharadwaj, MDI
Introduction
Social media marketing refers to the process of gaining website traffic or attention
through social media sites. It is largely driven by the consumer acting as a voice of the
brand on a social network platform.
Social media marketing programs usually focuses on “content marketing”, i.e. it creates
content that attracts attention and encourages readers to share it with their social net-
works. The content quickly spreads from user to user as it appears to come from a trust-
ed, third-party source, as opposed to the brand or company itself. Hence, this form of
marketing is driven by referral or word-of-mouth, meaning it results in earned media
rather than paid media and can go viral.
Social media is the latest trend in the marketing domain. It has become a platform that is
easily accessible to anyone with internet access. Increased communication for organiza-
tions fosters brand awareness and often, improved customer service. Additionally, social
media serves as a relatively inexpensive platform for organizations to implement mar-
keting campaigns.
What is the ROI of Social media mar-
keting campaign?
ROI stands for Return on Investment. In
the financial world, ROI is used
to measure the financial efficiency of an
investment. Thus, social media ROI is
defined as a measure of the efficiency of
a social media marketing campaign.
ROI is based on the financial formula:
So, for Social Media (SM):
Here, we know our Social Media Investment, but Social Media Return is not as clearly
defined. However, the peculiar feature of the social media return is that it can be de-
fined to be essentially anything you want it to be. Thus, in general, we can say that social
media return is the value that is derived from social media based on the goals of the
campaign. These goals may be to increase brand awareness, to increase sales, to get
consumer insights, or to get email addresses of potential customers.
Pratibimb | March-April 2013 | 15
After estimating SM Return and SM Investment, ROI formu-
la is used to calculate your SM ROI. Now, this ROI number
can be used to compare to other social media campaigns.
Methodology to evaluate ROI for a Social Media Campaign
1. What is goal?
We need to know what is it we are trying to achieve, i.e.
our goal. Let’s say our goal is to capture the email address-
es into databases, so that we can nurture those leads and
turn them into clients. Now, we set a target of collecting
100 email addresses within one month period. The time
frame is necessary so that at the end of the time frame we
can measure the success of our efforts. To get these ad-
dresses, we need to give the people a highly relevant offer,
which is related to our industry. Then, we measure goal
conversion in Google analytics, which tells us how many
people sign up for the offer and end up on the confirmation
page. Thus, now we can measure cost per sale/cost per
lead
2. Traffic Vs Conversations
Conversion - How many people we need to get to visit our
website in order to collect these 100 email addresses?
If we aim for a 20% conversion rate, that means that to
collect these 100 email addresses, we need to get 500 peo-
ple to visit our website. If we are not able to achieve the
required conversion rate, it directly points to some defi-
ciencies in our offer. Either the offer is not relevant, or its
perceived value by the users is not high enough. Landing
pages can also be one of the reasons for poor conversion
rate, so they should be as per the best practices, and must
have relevant keywords. As the users sign up, and their
email addresses get stored in the database, an email auto
responder sends mail to them to nurture these leads and
turn them into clients
Traffic Sources
Face book, Twitter etc are the sources of potential traffic
that visits our website, from where we will get the 100
email addresses. We can measure traffic sources in Google
Analytics to identify which source generates maximum
traffic, which will help us in formulating our strategy later
on. Catchy headlines on Twitter, like tab on Face book etc
are a few of the ways to maximise traffic
3. Time/Cost required to implement
Next we have to determine the cost and time required
to implement this process, and find out the ROI of this
Social Media Campaign
The below flow chart shows how the traffic is filtered until
finally sales takes place.
This was the case when our goal was to capture the email
addresses into databases, so that we can nurture those
leads and turn them into clients. We can similarly calculate
the Social Media ROI in case of some other goals.
Pratibimb | March-April 2013 | 16
Model/Theory applicable/associated with the evaluation
of social media campaigns’ ROI
Kirkpatrick's Four-Level Evaluation
Level 1: Reaction (or satisfaction)
Users participate in some form of a questionnaire to rate
satisfaction of features or content (e.g., Least Favourable
to Most Favourable; Low to High; "A, B, C, D, F", etc.).
Few examples of this are rating a YouTube video, clicking
a star on a blog comment or rating a "Best Answer" on
LinkedIn.
Level 2: Learning (or knowledge retention)
Next step is measuring changes in the quantity/quality of
relationships that the network generates as a result of
implementing a social network.
These changes can be in:
Subscriber counts
Unique visitors
Returning visitors
Page views
Bounce rates
Quantity of content
Quality and popularity of
content, and so on.
Level 3: Transfer (to the real world)
To get to this point of evalua-
tion, the organization should
have clearly defined objec-
tives for developing a social
network. Also, there is a need
to observe the effect of social
network on the ultimately ben-
eficiaries.
Level 4: Results
These assessments determine the extent of impact these
social media campaigns have on the bottom line. Metrics
like this may include financial measures like:
Profitability
Increased sales
Return on Investment (ROI).
But the scope can be scaled down to include department-
level productivity measures like:
improved customer satisfaction
reduced customer complaints
Level 4 assessments usually deal with undefined bounda-
ries, and therefore are difficult to work with. That’s be-
cause increase in sales might be attributed to factors oth-
er than Social Media Campaigns.
Parameters/Metrics to be considered for calculating the
ROI
There are many metrics to consider, but here are four
that can be applied to companies of any size or industry:
Demographics
Social demographic analysis shows which initiatives are
reaching target audience. It assists in locating new
customers
Page views
It is easy to calculate and gives a measure of content
popularity
Conversion
Landing page conversion and Sales conversion tell about
the effectiveness of the program
Cost
Measuring cost per lead/sales gives a measure of the
expense we are incurring
These parameters are crucial, and must be considered for
the calculation of ROI. Demographic analysis helps in in-
fluencing future marketing, as we get to know who exact-
ly is responding to social media efforts. Page views on
different social media are not equally valuable, and this
helps in choosing which media to focus on. Again, measur-
ing conversion rate is extremely important, as it directly
correlates to revenue. However, behavioural study of pro-
spective customers is required to attribute the change in
revenue to social media campaigns. Finally, cost per lead/
sales measurement helps determine how to allocate
funds for the campaign, and success/profitability.
Conclusion
There are different things that need to be kept in mind
while trying to evaluate social media ROI. It is difficult to
realize that which of the advertisement followers actually
bought the products or hired services. So, different factors
have to be kept in consideration before ROI of the social
media campaign is calculated.
However, this is a fact that social media is very necessary
for running an online business today. Social media is no
doubt, a best way to advertise about your products, ser-
vices and brand name. To make progress in online indus-
try, taking services of social media networks is a must.
References
http://www.businesscasualblog.com/2008/12/
applying-kirkpatricks-four-level-evaluation-to-
social-network-roi.html
http://www.youtube.com/watch?
v=UChhA3QGX5U
www.socialmediaexaminer.com
Pratibimb | March-April 2013 | 17
Introduction
Each one of us wants career advancement in life. As a person’s influence and ability grows in the
organization, he/she wants to take up greater responsibilities. In organizations, there’s a well defined
hierarchy for career advancement. There are various stages in a hierarchy for which a person is
required to acquire certain skills and competencies. This hierarchy which is prevalent in many
organizations is called “The Corporate Ladder”. “Corporate Ladder “has been the prevailing model
since the 1950’s. Right from when the idea of the “Organization Man” was conceived, the ladder has
been the paradigm to structure an enterprise and successfully manage its work and people.
Though there have been certain changes on path to progression in the ladder, however the essence
of the ladder has endured the test of time. Now workplaces have changed. Organizations and the
environments have changed drastically. The burning question is whether the proverbial “Rise along
the Corporate Ladder” is still relevant in today’s business environment. Business environments and
organizations have become very diverse and complex. The technological, geographical and economic
barriers have been blurred. Gender barriers are coming down and the “Glass-Ceiling” has been giving
way. The generations are changing. With the Generation Y entering the workforce and baby boomers
on the verge of retirement, the aspirations and thought process of the workforce is changing. The
very meaning of career advancement and fulfillment has undergone a profound change with the
changing attitudes and perceptions about the workplace.
Have the existing structures outlived their era? Is there a radical shift of thinking towards a new
paradigm?
This is where the transition from a “Corporate Ladder Model” to the new “Corporate Lattice” model
assumes great significance. As organizational hierarchies are becoming leaner and agile, the Lattice
model is fast displacing the Ladder model. This is the inflexion point for many organizations and
sooner rather than later they have to shift to the Lattice model.
The Corporate Ladder Model
The “Corporate Ladder” can be viewed as the ascent from the base of the ladder (i.e. the entry level)
to the top of the ladder (CEO) punctuated by different strata which represent the various levels in
Why the shift?
Organizations and environments have changed drastically Technological, economic, gender barriers broken Workforce’ s thought process changing Career advancement and fulfillment has seen a profound change
Shift from Corporate Ladder to
Lattice
Vignesh Lakshminarayanan & Kailash Mahadevan V M , NITIE
Pratibimb | March-April 2013 | 18
the ladder which a person has to cross before reaching the
pinnacle.
A Typical Ladder Structure
As a person grows and becomes proficient he naturally
moves up the ladder. Initially moving up the ladder was
conceived for a person in a single organization but later on
as shifting between organizations for progression became
the trend; the definition of Corporate Ladder became more
generic. It evolved into the various stages of succession in
one’s career relative to a well defined position in the ladder
encompassing organizations.
The model was the driver for maximizing efficiencies and
economies of scale in the Industrial era. The basic
assumption of the model is that all individuals are alike and
the direction of progression of an employee is linear.
Success is defined by the level of prestige, rewards, and
power tied to each rung. High performance and career-life
fit are viewed as opposing forces. Work-life balance and
level of progression is a trade-off in this model. There is a
strict hierarchical reporting relationships and the access to
information is directly linked to the layer in the hierarchy
which the person is occupying. The “Corporate Ladder”
model epitomizes the “One size fits all approach” which is
out of sync with today’s organizational environment.
Flaws of the Corporate Ladder Model
Though the Ladder model is a highly structured approach to
career advancement it has severe limitations.
1. Today’s workplace is multicultural. There’s a huge
diversity in the workplace. The culture of all workplaces has
become all inclusive. Women are becoming critical in
organizations and the traditional roles are being challenged
in the society.
2. Employees can no longer be constrained and with
increasing freedom of interaction and knowledge sharing
and with the advent of virtualization of workplaces no
longer are employees tethered to their seat. Mobility has
become the buzz word in organizations. No longer can
employees be tied down.
3. The methods of working can no longer be defined and
flexible work practices have redefined the workplace.
Motivation is no longer monetary or linked influence and
power. Career-Life balance is no longer a trade off. Hence
an integrated approach towards one’s career, success-both
professional and personal and a seamless balance between
work and life is of paramount importance today. The
ossified standalone approach towards work and life where
one aspect has to be sacrificed for the other no longer
works. There’s fluidity in terms of how work is done, careers
are built and how each one participates and contributes in
the organization.
What's Driving this Trend?
4. “Information Arbitrage” no longer works. Work places
have become more open and the flow of information is
seamless across the organization.
5. There has been a paradigm shift in the attitudes towards
the workplace. Nowadays extrinsic motivators like
the salary and position have been replaced by intrinsic
motivators like meaningfulness of job and
accomplishment and greater say in decision making.
With a large proportion of Generation Y entering into the
organizational mix, traditional structures are being
challenged.
6. With “Talent Retention” becoming a major issue due to a
huge gap in the availability of skilled talent in the market,
constraining the employees under the existing structures
where they cannot express themselves and be creative will
become dysfunctional.
7. Organizational hierarchies have become flatter and with
an almost 25% reduction
8. With increasing size of organizations and evolution of
matrix and super-matrix forms of organizations, the
Pratibimb | March-April 2013 | 19
traditional top down hierarchy is out of the equation. There
are multiple reporting relationships. The very basis of the
various levels and the various criteria to ascend to these
levels is questionable.
9. The proficiencies or skill sets at any position are not
static but dynamic. In other words with evolution of
businesses there’s a huge overlap of skill sets required at
various levels. With increased impetus in cross functional
exposure which entails moving across divisions, domains,
positions and specializations the ladder model loses
significance. The very idea of skill sets has been redefined.
There is virtually no ladder for the amount of skills a person
wants to acquire or what kind of progress he wants to
acquire. In other words “The bottom to top approach” has
been toppled and progression is infinite. It can be
horizontal, vertical or diagonal which cuts across different
functions.
10. Each employee is “unique” and not “alike”. Hence
the fundamental assumption of the Ladder Model is flawed.
The shift to the “Lattice Model”
One can visualize a lattice as a three dimensional structure
which extends infinitely in any direction. “The Corporate
Lattice model” is a comprehensive integrated approach to
the every changing corporate scenario. At a time when the
structures and divisions with respect to an organizational
set up are blurring, the lattice model is set to displace the
ladder model. No longer are career and life separate realms
and a holistic approach needs to be adopted in an
organization. Career paths have become multidirectional as
individuals look at multiplying their chances to grow ahead.
A lattice can be viewed as a grid with different nodes and
employees can connect different nodes at any point of
time. This represents the unconstrained organizational
relationships, interaction, and communication and
information flow. There is a shift to a participative culture
and a profound transformation in the mindset.
Employees now need to feel the need of engagement to the
organization. At a juncture where one spends more time at
the workplace than the house, the workplace must create
an experience which should motivate the person to come
again the next day and perform with the same amount of
vitality and commitment. The silo approach no longer works
and widespread collaboration is enabling individuals to
constantly learn, contribute and innovate. There’s a greater
transparency and the very notion of an optimized Career-
Life fit and high performance is mutually reinforcing. There
is greater emphasis on the need to be flexible and develop
transferable skills. There is a much sharper focus on
creating a portfolio of skills that can be ported over into
new fields as they emerge. Suddenly there seems to be a
convergence of all these aspects of a workplace which have
necessitated the shift to the lattice. The very realization that
there cannot be one set certain future path reinforces the
lattice approach. Hence individuals should gain further
competencies and with his existing capabilities must take
alternative views of their career. For instance if an
individual has to go to a lower level to cultivate some
unfulfilled competency, the lattice model helps him to make
that shift. Taking a step down so as to climb up two steps is
not at all bad. In the traditional ladder set up this would
have been a stigma. Therefore the change to the lattice
needs a significant change in the mentality of organizations.
Again no two individuals are the same and hence allowing
individuals to make optimal choices of what suits them the
best has lead to the origin of “Mass Career Customization”
model.
Mass career customization (MCC) – The fundamental tenet
of the Lattice Approach
To get an insight into this model, we can correlate
customization to the products we buy. Depending on our
tastes and preferences and more essentially the priority we
assign to certain quality we customize our products. Based
on our idea, the maker customizes the features of the
product. A similar paradigm can be extended to one’s
career.
In a product customization, the amount of variation differs
from miniscule details to major features. When for a
product there’s such a plethora of options to choose from
then why can’t the same be extended to careers? This is the
raison d'être behind the Mass Career Customization
Pratibimb | March-April 2013 | 20
framework. This framework is the new way employees can
be provided with definitive options. This is a fool proof
option where employees can weigh their options like the
way one weighs different features while buying a product.
There are generally four dimensions which are the pace of
growth, the amount of workload an employee wants to
handle, the location he wants and the role and
responsibilities he wants to undertake. By laying down the
options on the basis of the weighted choice of the career
wants, an employee’s career path is much more defined.
There’s a lot of clarity and freedom of choice on the basis of
what an employee wants and accordingly can make
tradeoffs between the various dimensions. Hence
customization is a compelling proposition as it gives
individuals “the option value” i.e. the value which
individuals place on the ability to make choices at any point
of time. This is an integrated approach which takes into
consideration the undulations of a career while factoring in
the fluidity of roles and needs while ensuring greater
transparency.
The advantages of this model are motivated and productive
employees who are committed to the organization’s cause.
At the same time “Talent Retention” becomes a much
easier task. MCC requires a massive effort on the part of
managers to know their employees, engage in meaningful
conversations and come up with options that work for the
business and the employee. MCC must be viewed as an
integral part of the talent management architecture. It must
not be isolated from other career management activities
like goal setting, performance management, compensation
and benefits, succession planning, workforce planning,
scheduling and deployment and training & development.
Lattice at Work- How Organizations are harnessing the
benefits
A very relevant example of lattice in action is exemplified by
how Cisco resurrected its fortunes from the aftermath of
the dot com bubble. The organization had come crumbling
down from being one of the most valued companies and
this is when the organization started embracing the lattice
approach. Cisco then realized the value of the collaboration
both internally and externally. Engagement became the
central objective around which everything else was
structured. To make sure that the employee’s objectives
were aligned to the goals of the organization, employees
had the mission, vision and the objectives printed on to
their cards. Cisco transformed its structures to enable cross
functional coordination by instituting cross functional
councils thereby promoting collaboration and participation.
Apart from this the organization has heavily invested on the
development of its employees and helped employees
choose realistic fulfilling career paths. At the same time it is
offering flexible work options and other wellness programs.
Apart from this the organization has virtualized the
workplace with social networking tools. For instance
communication has been virtualized by video conferencing.
Other examples are promotion internal wikis and podcasts,
tutorials on how to share blog and usage of a Facebook like
internal platform to communicate with partners and
customers. All these efforts have ultimately unleashed a
wave of productivity in the organization. Cisco for long has
been the best place to work and people stay and make
careers in this great organization.
Conclusion
Though there is a noticeable shift towards the corporate
lattice model, one cannot underestimate the importance of
the ladder model. The concept of “Lattice” has taken root in
service based organizations where roles are fluid. However
in organizations, where there are significant differences in
skill requirements for successive levels, the extent of
deployment of the lattice philosophy is still unknown or the
idea might not be feasible. Ladder model also helps in
identification and differentiation of a very good person from
an average person. At a time where ROI on employee is
significant, Ladder model does provide a clear direction on
“Talent Retention”. The Ladder model is by far the most
efficient and relevant model for grooming talent for taking
up leadership positions in any organization. The Ladder
model has too undergone a metamorphosis to a “Round
Ladder Model”, where reciprocal mentoring relationships
have broken down the “Tunnel Vision”. Organizations are
however adopting an optimized mix of both the Ladder and
Lattice approaches. Hence, on the evidence of this, one can
conclude that despite the promise and potential of the
lattice model, it is still very early to conclude that it will
supersede the existing Ladder Model.
Pratibimb | March-April 2013 | 21
References:
http://www.deloitte.com/view/en_US/us/Services/consulting/all-offerings/hot-topics/human-capital-trends-
2011/1644e312bc44f210VgnVCM2000001b56f00aRCRD.htm
http://www.forbes.com/2011/03/16/corporate-lattice-ladder-leadership-managing-hierarchy_2.html
http://businessfinancemag.com/article/shift-corporate-ladder-lattice-0422
http://blogs.hbr.org/ideacast/2010/07/when-the-corporate-ladder-beco.html
http://www.thecorporatelattice.com
http://www.masscareercustomization.com
http://www.leadersmag.com/issues/2011.3_Jul/PDFs/LEADERS-Cathleen-Benko-Deloitte.pdf
http://lifeworkalliance.com/pdfs/moving_towards_a_new_career_paradigm.pdf
http://talentmgt.com/articles/view/the_corporate_lattice_/print:1
http://blog.upmo.com/2011/03/02/the-corporate-ladder-is-collapsing/
The Corporate Lattice :Achieving high performance in the changing world of work by Cathleen Blenko and Molly Anderson –
Harvard Business Press
http://www.learningwiki.com/files/717/MASIE%20Mass%20Career%20Customization%20-%20A%20New%20Talent%
20Model.pdf
http://www.emeraldinsight.com/journals.htm?articleid=1626434&show=html
https://www.whymetlife.com/downloads/MetLife_MMI_MultiGenCaseStudies.pdf
Pratibimb | March-April 2013 | 22
“We really should be running succession management as if we are producing a product
because, at the end of the day, we are producing a product that needs to come off the end
of a production line and be delivered to someone at a certain period of time”
Marc Effron, President, The Talent Strategy Group
Introduction:
Succession Planning has emerged as one of the most important Strategic Business Process
in all types of organizations. The events of succession at Apple Inc. (consequent to the
death of the charismatic Steve Jobs) and the baton changing at in some Indian MNC’s (Tata,
L&T) have spilt into the mainstream media - resulting in higher levels of awareness.
Moreover, the critical concern that many family businesses face today is how to institution-
alize succession planning while taking care that the business will safeguard the future re-
quirements and needs of the owner and his/her family.
If an owner does not efficiently plan the proper transition in his/her lifetime then it can re-
sult in huge monetary losses and even loss of the business on the whole. Family Firm Insti-
tute estimates that “70% will not survive into the second generation, and 90% will not make
it to the third generation”.
India’s Tryst with Succession Planning:
In India till very recently, Succession Planning was not given due importance because of the
following sociological mind sets
Many senior management executives and at times the Entrepreneur too feel that
they are ‘indispensable & immortal”.
There is a fear that if a potential successor is identified, the current role holder could
feel ‘insecure - intellectually threatened’, etc.
Succession, be it at the family level, community, politics - have been messier than
seamless.
But, slowly Succession Planning is gaining traction because of the following possible
reasons:
Risk Mitigation: Succession Planning is one of the key components of an organiza-
tion’s risk mitigation approach, from Business Continuity point of view. Hence, inves-
tors and other stakeholders are putting pressure on the Boards of large listed compa-
nies to embed the process of Succession Planning.
Succession Planning
Prisoomit P Nayak , Welingkar Mumbai
Pratibimb | March-April 2013 | 23
Increased Attrition: Explosion in opportunities for
talented employees in India has led to acceleration in
attrition, revealing unplanned ‘holes’ on the organiza-
tion chart. Hence, due to this new reality of top tal-
ent quitting, and the increasingly difficult challenge of
obtaining an external replacement, succession Plan-
ning has come into focus.
Institutionalize Talent Management Process: In to-
day’s world, the ‘excellence in the knowledge compo-
nent’ of all roles is going to drive the success of busi-
ness. Therefore, the continued success of the organi-
zation is very closely related to, not only having tal-
ented and competent employees in key roles but also
having processes of continuous identification, assess-
ment of internal/external talent. This discipline alone
can feed the population of the talent pipeline with
potential successors.
Challenges in Succession Management:
Defining Future Roles
One major challenge for organizations is to define
critical present and future roles, particularly as busi-
ness model changes in response to the market forces.
The key is to be able to recast talent assessment of
the potential successors. Tools like the 9-box model
help determine leaders’ readiness to advance in the
talent pipeline.
Need for Speed Versus Accuracy
Succession planning must be much more dynamic,
much more real-time so that a company’s portfolio of
people should be updated at least quarterly, rather
than annually. When it comes to what the future
holds, it’s critical for HR and others making talent
decisions to be tightly aligned with strategy teams
not to understand it in depth, but to understand the
contours what the likely shifts in business will be.
Danger: Unconscious Bias Ahead
Bias is an inclination to present or hold a partial per-
spective at the expense of possibly equally valid alter
natives. Unconscious bias can cloud hiring decisions,
talent reviews, and high potential selection, as well as
the overall process of “marching people through the
pipeline and developing talent.
Industry disruption and the need to predict an uncer-
tain future
Challenges unique to managing global talent pools
Pre-requisites for successful planning for the future
Moving beyond the status quo
Creating viable and agile systems, policies and prac-
tices
Increasing Diversity
A key way to increase diversity in the pipeline is to
reduce bias. One way to mitigate such bias is by
providing targeted intervention to talent manage-
ment decision makers. For example, BAE partnered
with corporate consulting firm Cook Ross Inc. to fig
ure out a more structured and systematic way to root
out bias in its talent processes. The company used to
select participants for its emerging leaders program
through manager nomination, but the program was
viewed as “subjective and inconsistent” and the com
pany realized that “a lot of bias was getting in the
way”. During calibration discussions, the company
worked to ensure that it was assessing potential “and
not preference through our own lenses,” and
achieved a diverse representation of participants
while ensuring high potential for leadership. The re
sult was that the company’s diversity and inclusion
strategy and training now includes unconscious bias
training—an enterprise-wide training requirement
for all leaders by 2013.
Rethinking Global Strategies
With increased globalization, it is key to “start with a
global hat and to keep the global hat on”. When it
comes to getting the right people, the right plan and
the right fit for global talent:
Make sure there’s global and functional representa-
tion of critical stakeholders in decision-making.
Plan the timeline accurately, setting clear expecta-
tions and allowing extra time for global complexities.
Maintain a learning mind-set and be flexible. For ex-
ample, one may learn something from colleagues and
vendors that can enhance the final solution.
Be clear about selection criteria—both what’s essen-
tial and what’s desired. Assign weights and use rigor
around psychometrics and essential cultural fit fac-
tors, including non-quantitative ones.
Pratibimb | March-April 2013 | 24
Probing Individual Aspirations
Global talent shouldn’t be treated as static “lists and
big pools”. During talent reviews, assess employee
aspirations to create more transparency around
what the person wants rather than the manager
assuming what someone wants.
In 2012, PepsiCo implemented “candid career conversa-
tions,” in which employees fill out online profiles about
their aspirations, experiences and critical experience
they think they need to have to advance in the compa-
ny. The manager then offers his or her perspective.
Examples:
McDonalds, in the recent past had lost two Top Manage-
ment Employees, one after the other, in the same role- due
to their sudden passing away- and yet it was able to name a
third competent person to fill the shoes of the same role.
GE is legendary in their record of generating successors-
across the management roles and functions. When the cur-
rent CEO, Jeffrey Immelt was elevated to the position, two
other candidates were also in the running. Once Jeffrey was
named, two large global companies immediately offered
the top job to the other two GE potential CEO candidates.
The Murugappa Group is a family business spanning across
4 generations. Their leadership includes each of the seven
flagship companies to be headed by a family member with
informal interaction and consultation among themselves. In
the late 1990’s, the group in order to shed the traditional
family business approach, went for a mass professionalism
and though there were short term troubles, it had many
long term benefits in terms of turnover and profits. Now
the group CEO is a non-family member and 5 out of 9 board
members are outside family professionals.
Conclusion:
Hence, the only way forward for Indian organizations to get
better at this process, quickly, is by embedding Succession
Planning in the KPI’s of all Senior Management role holders.
The brief communicated to them should be that they have
to make themselves ‘redundant, in their current role, at the
end of a tentatively indicated fixed period of time by gener-
ating a competent successor (internal and/or external). The
current Role holder should be considered for their next role
- lateral or vertical- only if they deliver on this KPI. Succes-
sion Planning is too important a process to be internally
‘outsourced’ to the CEO & Top Management, HR or external
Consultants.
References
Babcock, Pamela. (Oct 2012) Babcock “Rethinking Succes-
sion Planning”, SHRM.
P, Vijayan. (Sep 2012) “Succession Planning”, aWEshkar,
Vol. XIV, No. 2
www.empoweredindia.com/Archives_ET/ET201202.html
http://en.wikipedia.org/wiki/Bias
http://www.murugappa.com/
http://www.ge.com/
http://www.baesystems.com/
http://www.pepsico.com/
Pratibimb | March-April 2013 | 25
Whenever I pore over the national dailies, there is a buzz in media about Human
Development Index (HDI). In the various components of HDI, one is Tele Density. Tele Density
depends proportionately (ad valorem) on usage of mobile connections per capita. Now the
stark reality portrays that Tele Density is higher in urban India. But in rural India it is tad.
Future of Financial Research
Nitin Singh, Symbiosis , Pune
Pratibimb | March-April 2013 | 26
As the time is ticking, there is a sea change in the
technology advancements. Especially, clamour for cheap
technological advancements are gaining momentum. Social
Inclusion is the major force responsible for driving this
propensity. However, competition also played a huge role
into this transformation. Increased cost effectiveness and
market capitalization are factors behind these changes.
Advancements made
In this era of ultra high speed technology umpteen smart
phones at throwaway prices are available in the market.
With the increase in demand for blogs, internet and social
media, there is a colossal rise in their usage. Various kinds
of paradigms such as fashion, marketing, advertisement and
fashion are leveraging this rising appetite to the hilt.
With the rise in tech savvy people, a remarkable rise in
trade and financial activities is ostensible. Moreover, small
retail investors who don’t have much advanced gizmos are
now not feeling alienated. Paucity of high end technology
for financial domain usage is not ill afforded now. Blogs are
new fad now for various facets of society, be it finance,
fashion, spiritual, social or political.
Internet is now buzzword everywhere. It has become
ubiquitous. And the great news is that it is beneficial to us
in manifold ways. The moot point is that this progress is
now making inroads in financial sector.
Financial sector and technological advancement are
entwined
With rise in competition and globalisation, there was
imminent overhaul needed in financial sector. To catapult
the efficiency of stock exchanges and trading, it was felt
that financial research must also pace in accordance with
technology. Therefore a streak of reforms were introduced
by experts.
With the talisman of social and financial inclusion gaining
traction, there is a huge section of small investors from
small towns, who were not capable of coping with
intermittent and mercurial financial activities, are now
Pratibimb | March-April 2013 | 27
making use of cheap technology for their progress. This is
providing a level playing field for small investors.
Now small investors or common Diaspora can extract useful
and indispensable knowledge required for financial re-
search. The Rajiv Gandhi Equity Scheme is a welcome step
in this direction. It is intended by government to promote
small retail investors. Various set of concessions are be-
stowed upon investors in this scheme. Our government is
trying to target small investors from tier-II cities, where fi-
nancial activities are not active as they should be. Hence in
such a case to alchemize this scheme usage of now going
cheap and advanced technology is adopted.
If such kind of boost in terms of technology and financial
accessibility is given to people in remote terrains, then cov-
eted goal of wholesome and inclusive progress can be
achieved. Participation from rural and far-flung areas will
improve. The penetration of technology in these areas helps
in alleviating poverty and amelioration of infrastructure.
Impact on financial sector
We will see salubrious impact on our economy if aforemen-
tioned measures are adopted. Particularly, financial sector
would rise by leaps and bounds. Phenomenal rise in finan-
cial activities will result in greater profit margin in financial
paradigm. This would in turn buoy investor sentiments in
growing sectors such as infrastructure projects in rural ter-
rains. Now this causes inflow of FIIs in market. Now in that
case we have more money in the market therefore ECBs can
be raised easily. This is how the whole financial market
transforms from dud to rejuvenated, streamlined and
strengthened market.
Impact on economy, which is in soup
High fiscal deficit
During fiscal year 2011 a whopping 200% rise in subsidies
given by government. That means our expenditure outstrips
income receipts. But if investments in the form of FIIs,
FDI, ECB, FCCBs start flowing into the market, there seems
the silver lining. This will harness our government to rein
in burgeoning fiscal deficit to comfortable zone. High fiscal
deficit is a major stumbling block which is continuously
haunting our economy. It causes catastrophic impacts on
economy. For example, high fiscal deficit gives rise to disar-
rayed Current Account deficit (CAD). CAD is the major com-
ponent in Balance of Payments (BoP). Dastardly, BoP gets
affected.
High Interest rates and uncomfortable key policy
rates
High interest rates suppress the money in market which
causes people to move from investment to savings. This
hampers investment in the market. For example, due to
high interest rates demand of automobiles in the market is
slumping. The manufacturing process in domestic market
slows down and it causes growth of core sector to take a
hit. Manufacturing has 79% weight-age in Index of Industrial
production (IIP). Thus, IIP becomes sluggish. However, be-
cause of cheap advanced technology easily available to in-
vestors in tier II and tier III cities, there is a landscape which
portrays a rosy picture of overhauling and revamping whole
economy at a huge scale. This potential germinates much
needed investments in various forms and improves infra-
structure projects which are almost dead now. At last, we
will see reduction in repo rate and Cash Reserve Ratio
(CRR), which are vital for the industrial growth of a nation.
Recently, we have also seen eyebrows rising when a prover-
bial debate in media was fuelled by honchos of major banks
in our country.
Pratibimb | March-April 2013 | 28
banks in our country.
Yawning demand for gold
Lack of attractive and salutary financial instruments In the
market impede money in the market. Instead people are
lured by the glitter of yellow metal. Unfortunately behind
the shine of precious yellow metal there lies accumulation
and blockage of capital. People vehemently invest into buy-
ing gold as it is giving fairer return. Secondly, our skyrock-
eting import bill which is growing exponential due to import
duty paid on import of gold. Thirdly, it is causing imbalance
in our trade balance. Keeping in view of these intricacies the
viable solution would be to formulate attractive and benefi-
cial financial instruments. In order to increase the reach of
financial products, use of booming technology can be lever-
aged. This would increase participation and stakes of small
investors with big investors too. Further, if this model is
adopted, then there would be overt outcomes. Diversion of
investors to other financial instruments will reduce astro-
nomical demand of gold.
Depreciation of Rupee
The drop in rupee against dollar is 20% since early 2011.
Panacea for us in these circumstances would be to access
overseas funds. Second, introduce FDI in the market. How-
ever, for both of the solutions raising investor sentiments is
the most important. Here too our reforms in technology
which translate into financial penetration, can rev up the
whole financial structure.
Stubborn Inflation
On account of demand-supply mismatches in the market,
there is inflation. Nut die to the lack of investment in the
market, we see inflation going north. There is an imminent
need to raise capital invested in market. And this brooks no
delay.
Drop in investments
A mere 29.5% of our GDP is attributed to investments. Gross
Fixed Capital Formation (GFCF) is lowest in seven years. In
order to appease the situation government must switch
from subsidies to investments. It must invest in roads,
towns and broadband infrastructure. Introduction of mobile
payments will further streamline the process of reforms.
Pratibimb | March-April 2013 | 29
is lowest in seven years. In order to appease the situation
government must switch from subsidies to investments. It
must invest in roads, towns and broadband infrastructure.
Introduction of mobile payments will further streamline the
process of reforms.
Decline in portfolio inflows
During previous year portfolio inflows were Rs. 110120 cr
as against Rs. 47738 cr inflows in 2011-12 year. To stem this
rot government must improve general sentiments. It must
allow employees to migrate from EPF to NPS for long term
savings to be deployed in stocks.
Financial Inclusion felicitated because of technology
Pointers of financial inclusion
In India, almost half the country is unbanked.
Only 55 per cent of the population have deposit ac-
counts and 9 % have credit accounts with banks.
India has the highest number of households (145
million) excluded from Banking.
There was only one bank branch per 14,000 people.
6 lakh villages in India, rural branches of SCBs includ-
ing RRBs number 33,495.
Only a little less than 20% of the population has any
kind of life insurance and 9.6% of the population has
non-life insurance coverage.
Just 18 per cent had debit cards and less than 2 per-
centage had credit cards.
Financial Exclusion – Why did we fail?
Absence of Banking Technology
Absence of Reach and Coverage
Absence of Viable Delivery Mechanism
Not having a Business Model
What has been done so far
ICT based Business Correspondent (BC) Model for
low cost doorstep banking services in remote villag-
es.
Board approved Financial Inclusion Plans (FIPs) of
banks for 3 years, starting April 2010.
Roadmap to cover villages of above 2000 population
by march 2012
Availability of minimum four banking products
through ICT model has been ensured.
Guidelines for convergence between Electronic Ben-
efit Transfer and FIP have been issued.
Pratibimb | March-April 2013 | 30
Guidelines for convergence between Electronic Ben-
efit Transfer and FIP have been issued.
All Bank branches must be on Core Banking Solution
(CBS). All Regional Rural Banks (RRBs) to be on CBS
by September 2011
Multi-channel approach (Handheld devices, mobiles,
cards, Micro-ATMs, Branches, Kiosks
Front-end devices transactions must be seamlessly
integrated with the banks’ CBS.
In a nutshell
The technology advancement in communication sector is
the key for growth. Especially, financial sector’s progress
depends on technology. Hence technological advancement
in terms of mobile communication devices is quintessential
for us. The coveted dream of financial inclusion and in-
creased participation of secluded society based on econom-
ic background is proportional to recuperation of technology
for the betterment of common people. For example, Aa-
kash tablet that comes for just Rs, 2200, is making cuts in
the society. It is well fit in the pocket of needy. Its afforda-
bility and multifaceted use will definitely make sea changes
in our financial sector.
The panacea for our economy is heightened financial activi-
ty. And this turns into reality if our people are given all eq-
uitable opportunity to grow. That would cause inclusive
growth for whole economy at a huge scale. Our economy
which is a laggard in non conducive global environment can
be resurrected only if stakes from left small investors are
taken into consideration. Cumulative and aggregated
growth is capable of overhauling our ennui financial sector
which now depends at the behest of western economies.
We cannot any more afford to depend on such whimsical
and capricious economies. The brunt of dependence on
western economies was clearly evident when global reces-
sion caved in 2008. Our whole economy was incarcerated in
shackles. To set it free from such covert shackles we have
to be independent and efficient.
India would come up as a major financial hub of world if its
financial sector integrated with advance technology grows
by leaps and bounds.
Steady growth in technology is driving our economy partic-
ularly, financial research towards new heights. This propi-
tious trend of inclusive growth in financial research is mak-
ing strides to transform our nation into past glorious form
of Golden Sparrow.
Pratibimb | March-April 2013 | 31
References
www.rbi.org.in
http://commerce.nic.in/
http://www.thehindubusinessline.com/multimedia/dynamic/00879/BL27_FI_eps_879175g.jpg
http://rbidocs.rbi.org.in/rdocs/speeches/pdfs/fic060911dg.pdf
http://biz.thestar.com.my/archives/2011/3/24/business/b_pg12banksystem.jpg
http://static.expressindia.com/expressindia/newpic/gross08.jpg
http://www.getmoneyrich.com/wp-content/uploads/2012/09/Inflation-Asia.jpg
http://business.gov.in
http://indiabudget.nic.in/
http://india.gov.in/
http://www.burson-marsteller.com
http://www.business-standard.com/newsimgfiles/2012/june/29062012/062912_36.jpg
www.economictimes.com
www.frontline.com
www.epw.org
Pratibimb | March-April 2013 | 32
Introduction
`Does the stock market overreact?' De Bondt and Thaler in 1985 gave start to a new wave of thinking
known as behavioural finance. Weak form inefficiency of the stock market was discovered by them after
analysing how people are systematically overreacting to unexpected and dramatic news events which were
surprising and profound. The Efficient Market Hypothesis as proposed by Fama (1970) asserts that the
stock prices reflect the relevant information. The asset prices follow a random walk path i.e. they are
merely random numbers. The study conducted by Caginalp G. and H. Laurent (1998) by the predictive
power of price patterns finds patterns and confirms that they are statistically significant even in out-of-
sample testing and report.
The pattern of the stock index might help in predicting some of the effects of the various events. The
calendar anomalies tends to exist which goes against the efficient market hypothesis. The researchers have
used Gregorian calendar to investigate the calendar anomalies. There are various countries and societies
which follow their own calendar on the basis of their religion. For example, the Hebrew calendar is
followed by the Jewish society, which is strictly based on luni-solar, the Christian society follows the
Gregorian, which is based on solar, and similarly Hindu and Chinese follow their own.
The Hindu calendar is called “Panchanga” and it is based on both movements of the sun and the moon.
The festival of “Diwali” is typically occurs at the end of October and beginning of November.
The special ritual called “Mahurat Trading” can be observed on major stock exchanges like NSE, BSE,
NCDEX to name a few lasts for about an hour. It is performed as a symbolic ritual since many years. It
marks a link with the rich past and brokers look at it on a positive note. It marks an auspicious beginning to
the Hindu New Year. The investors place token orders and buy stocks for their children, which are
sometimes never sold and intraday profits are booked, however small they may be. Thus, it is widely
believed that trading on this day will bring wealth and prosperity throughout the year.
It is interesting to observe the behaviour of trading activities during the period preceding and succeeding
Mahurat Trading. The purpose of this study is to know the effect of the festival prior and post diwali on the
the returns.
Econometric methodology
I have measured stock return as the continuously compounded daily percentage change in the share price
index (S&P CNX NIFTY) as shown below:
Rt = (lnPt – lnPt-1) x 100 …………………… (1)
Where, Rt = return at time t
Pt, Pt-1 = closing value of the stock price index at time t, t-1.
I have used S&P CNX Nifty as it has got the most liquid stocks in its portfolio. Further, the National
Stock Exchange is largest in terms of Market capitalisation and Volume. I have used the data of the
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